Helping Local Communities to Keep Their Money in Town

Last week I introduced the Municipal Deposit Insurance Protection Act to provide additional FDIC coverage so that local governments and schools can keep their deposits within the community.

As you know, deposits are currently insured by the FDIC up to $100,000. In small communities, such as those across my district, municipalities must often choose between fostering economic development by placing their deposits in local banks or receiving guaranteed FDIC coverage through large out-of-state banks, or other complex financial arrangements.

My bill would provide public deposits with greater FDIC protection through a raise in coverage levels. H.R. 382 would authorize FDIC insurance coverage for 80 percent of the deposits beyond the standard level of FDIC coverage up to $2,000,000.

Raising FDIC coverage on municipal deposits is not a new idea as my bill passed the U.S. House in the 107th, 108th, and 109th Congresses. Unfortunately, this commonsense bill never received a vote in the Senate. In my district, I saw firsthand what the lack of adequate FDIC coverage can do when bank fraud cost the municipality and local school district hundreds of thousands of dollars. The lessons learned from inadequate deposit coverage can be cruel and deserve a commonsense fix to protect our communities.