Arlington, VA-The American Consumer Institute (ACI) joined a coalition of taxpayer, consumer, and free-market organizations in urging Congress to oppose S.4198/H.R. 8087, the Main Street Depositor Protection Act, warning that the proposal would dramatically expand federal deposit insurance coverage while increasing risks to taxpayers and weakening market discipline. The coalition argues that raising FDIC coverage limits for certain noninterest-bearing transaction accounts up to $5 million would encourage excessive risk-taking by financial institutions, reduce congressional oversight by delegating authority to the FDIC to set coverage levels, and impose new regulatory burdens across the banking system.
They also raised concerns about the significant potential cost to the Deposit Insurance Fund and consumers, while emphasizing that any targeted response to financial instability should be temporary and narrowly tailored rather than a permanent expansion of federal guarantees.
Read the coalition letter here.
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The American Consumer Institute is a nonprofit education and research organization.