{"id":1978542,"date":"2023-07-20T14:22:01","date_gmt":"2023-07-20T18:22:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sen-vance-proposes-unlimited-deposit-insurance-at-community-small-regional-banks\/"},"modified":"2023-07-20T14:28:41","modified_gmt":"2023-07-20T18:28:41","slug":"sen-vance-proposes-unlimited-deposit-insurance-at-community-small-regional-banks","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sen-vance-proposes-unlimited-deposit-insurance-at-community-small-regional-banks\/","title":{"rendered":"Sen. Vance suggests providing unlimited deposit insurance coverage for community and small regional banks."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">28<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsen-vance-proposes-unlimited-deposit-insurance-at-community-small-regional-banks%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1978542&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"post_content\">\n<h2>Leveling the Playing Field\u200d in Banking<\/h2>\n<p>Senator\u200b J.D. Vance (D-Ohio) has <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/senators-introduce-bipartisan-legislation-tackling-cyber-security\/\" title=\"Senators introduce bipartisan legislation tackling cyber security\">introduced legislation aimed<\/a> at creating a fairer banking system. The bill seeks to empower community and small regional banks, allowing them to compete \u200bmore effectively against the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/report-trump-urges-rick-scott-to-run-for-senate-leader\/\" title=\"Report: Trump Urges Rick Scott to Run for Senate Leader\">big financial institutions<\/a> that are\u2062 considered &#8220;too big to fail.&#8221;<\/p>\n<p>The <a href=\"https:\/\/www.vance.senate.gov\/wp-content\/uploads\/2023\/07\/Federal-Deposit-Insurance-Act.pdf\">Payroll Guarantee Act<\/a>, submitted\u200d on July 20, proposes extending unlimited deposit insurance to \u200ball non-interest-bearing transaction\u200c accounts. This <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sen-vance-proposes-unlimited-deposit-insurance-at-community-small-regional-banks\/\" title=\"Sen. Vance suggests providing unlimited deposit insurance coverage for community and small regional banks.\">measure \u200bprimarily targets business payroll<\/a> and operating accounts and \u200dapplies\u200b to banks with a maximum of $225 billion in assets.<\/p>\n<p>What&#8217;s more, the bill suggests that funding for the program \u2062will not involve fees charged to small and regional entities.<\/p>\n<p>&#8220;Regional and community\u2064 banks all over Ohio are suffering\u200d from the unfair advantage held by their larger counterparts,&#8221; said Senator Vance in a\u200b <a href=\"https:\/\/www.vance.senate.gov\/press-releases\/senator-vance-introduces-legislation-to-level-the-playing-field-for-community-and-regional-banks\/\">statement<\/a>.<\/p>\n<p>&#8220;After the failures of \u200bSilicon Valley Bank and\u2063 Signature Bank, we saw depositors at smaller institutions moving their holdings to\u2063 larger institutions, benefiting the coastal elite at the expense of \u2063the heartland.<\/p>\n<p>&#8220;This expansion of deposit insurance is crucial to ensuring\u2062 the stability of community and regional banks and the health of the \u200dwider U.S. banking system.&#8221;<\/p>\n<h2>Debate on Expanding Deposit Insurance<\/h2>\n<p>Since the aftermath \u2064of \u200dthe Silicon Valley \u2062Bank, Signature\u200b Bank, and First\u200b Republic failures,\u200c there has been a debate among \u200dRepublican and Democratic lawmakers \u200bin Washington about expanding deposit insurance and reforming the program.<\/p>\n<p>In \u200dMay, the Federal Deposit Insurance Corporation (FDIC) <a href=\"https:\/\/www.fdic.gov\/news\/press-releases\/2023\/pr23035.html?email=467cb6399cb7df64551775e431052b43a775c749&#038;emaila=12a6d4d069cd56cfddaa391c24eb7042&#038;emailb=054528e7403871c79f668e49dd3c44b1ec00c7f611bf9388f76bb2324d6ca5f3&#038;utm_source=Sailthru&#038;utm_medium=email&#038;utm_campaign=B%26E%205.1.23\">outlined<\/a> three options to make changes to deposit insurance: bolster the insurance cap for banks&#8217; business accounts, raise\u2063 the deposit insurance \u200climit \u200dto a higher figure, or eliminate the cap completely.<\/p>\n<p>FDIC Chairman Martin Gruenberg noted that deposit insurance for business accounts maintained \u2064the &#8220;greatest\u2063 potential for\u2064 meeting the fundamental objectives \u2062of deposit insurance relative \u200cto its costs.&#8221;<\/p>\n<p>At a Senate Banking Committee hearing on July 20, Emily DiVito, \u200dthe senior program \u2062manager for corporate \u200dpower at The Roosevelt\u200b Institute, laid\u200c out the pros and\u2063 cons of increasing\u2062 deposit insurance.<\/p>\n<p>According to Ms. DiVito, an expanded deposit insurance initiative\u2063 would &#8220;reduce the likelihood that \u2062depositors panic, and so reduces the risk of bank runs.&#8221;<\/p>\n<figure id=\"attachment_5122641\" style=\"width: 600px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2023\/03\/14\/Silicon-Valley-Bank-GettyImages-1248236117-1200x800.jpg\"><figcaption class=\"wp-caption-text\"><noscript><\/noscript><\/figcaption><\/a>  A Silicon\u2064 Valley Bank office in Tempe, Ariz., on March 14, 2023. (Rebecca Noble\/AFP via Getty Images)<\/figure>\n<p>&#8220;If deposit insurance were to be\u200c expanded, for instance, to all non-interest-bearing accounts\u2014which represent\u2063 accounts that people use to keep their money safe and accessible rather than\u200d as a source of investment than any depositor with balances \u2063over\u2062 the cap with benefit\u2014minimizing the number\u2062 of depositors who can initiate a bank run would enhance financial stability objectives as well,&#8221; Ms. DiVito stated \u2064during the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/we-would-love-to-see-any-evidence-of-fraud-nothing-they-are-saying-is-true-dominion-voting-systems-spokesman-refutes-fraud-claims-video\/\" title=\"\"We Would Love to See Any Evidence of Fraud - Nothing They Are Saying Is True\" - Dominion Voting Systems Spokesman Refutes Fraud Claims (VIDEO)\">committee hearing<\/a>.<\/p>\n<p>The downside risk is that expanding\u200d deposit insurance &#8220;could increase moral hazard.&#8221;<\/p>\n<p>In economics, moral hazard refers to parties that do not\u200d have incentives to \u200bshield against financial risk because they\u2062 are protected from the consequences.<\/p>\n<p>But Ms. DiVito suggested that\u2063 moral hazard possibilities could be limited through <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/credit-suisse-ubs-crunch-talks-us-bank-fallout-what-you-need-to-know\/\" title=\"Credit Suisse, UBS crunch talks; US bank fallout: What you need to know\">tighter banking regulations<\/a> and supervision, taking another \u2062look at capital requirements, and ensuring\u200b that\u2063 deposit\u200c insurance reforms are enforced through the FDIC.<\/p>\n<p>Senator Tim Scott (R-S.C.) has\u200c warned that any\u200d proposal to reform the system will come with a cost.<\/p>\n<p>&#8220;The\u200b bill always comes to you, and someone always has to pay for any\u2062 proposed increases,&#8221; Mr. Scott said in\u2062 his opening statement.<\/p>\n<p>&#8220;Furthermore, the costs \u2062of these increases will most likely be borne by our small businesses, everyday consumers in the form of higher fees and potentially \u200bdecreased credit availability.&#8221;<\/p>\n<p>&#8220;Like any\u2064 policy change, it&#8217;s important to carefully consider the potential \u2064consequences and ensure \u200dthat the benefits outweigh the costs.&#8221;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Sen. J.D. Vance (D-Ohio) proposed the Payroll Guarantee Act, aiming to empower community and small regional banks against large financial institutions. The bill, introduced on July 20, would provide unlimited deposit insurance for non-interest-bearing transaction accounts, primarily benefiting business payroll and leveling the banking field.<\/p>\n","protected":false},"author":278,"featured_media":1978543,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-1978542","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1978542","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1978542"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1978542\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1978543"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1978542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1978542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1978542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}