US House Makes Another Push for Deposit Insurance Reform

The March 2023 collapse of Silicon Valley Bank triggered a digital bank run, prompting the Federal Deposit Insurance Corp. to invoke the systemic risk exception and protect all depositors. Standard coverage, however, remains capped at $250,000 per depositor, per bank. Corporate payroll and operating balances often far exceed that amount, making reform consequential for regional banks’ competition for deposits and for moral-hazard concerns.

On March 25, 2026, the House Financial Services Committee advanced four reform proposals, including Frank Lucas’s H.R. 8087, the Main Street Depositor Protection Act. The bill would require the FDIC, within six months of enactment, to set coverage for eligible noninterest-bearing transaction accounts at between $250,000 and $5 million. Banks with no more than $10 billion in assets would be exempt from additional premiums during a 10-year transition period.