On September 10, the U.S. Senate Committee on Banking, Housing, and Urban Affairs held a hearing on deposit insurance reform, with Chairman Tim Scott (R-SC) and Ranking Member Elizabeth Warren (D-MA) highlighting the importance of deposit insurance to consumer and business confidence in the U.S. banking system. In his opening remarks, Chairman Scott emphasized that “[d]eposit insurance is central to the trust and confidence Americans place in their banks” and cautioned that “deposit insurance reform should not be based on rushed decisions.”

Ranking Member Warren advocated for raising the deposit insurance limit for business transaction accounts, arguing that the current $250,000 cap was insufficient for many small and mid-sized businesses. She pointed to the 2023 issues regarding two large banks, which prompted “extraordinary” government action to guarantee all uninsured deposits at those banks, and small bank failures in the same year that resulted in local and small businesses losing “millions of dollars on the uninsured balance” because their assistance was limited to the $250,000 cap. Warren also outlined reform principles, including having the increased insurance limit apply to transaction accounts used to make and receive payments that do not pay interest or other monetary benefits, and implementing a coverage “framework that will be easier for the FDIC and NCUA to administer, easier for small businesses to understand, and easier for banks to implement.”