Unlimited FDIC Coverage Could Be Extended

Reid proposes two more years for Transaction Account Guarantee program.

Extending the Transaction Account Guarantee program past its scheduled expiration on Dec. 31 seemed unlikely a few weeks ago, but the measure has a new champion in Senate Majority Leader Harry Reid, D-Nev., who has proposed extending the program for another two years.

Reid’s bill, S. 3637, would temporarily extend the TAG program, which provides unlimited Federal Deposit Insurance Corp. insurance on no-interest checking accounts used mainly by businesses. The senator introduced the stand-alone bill under Rule 14, which would allow it to bypass committee hearings and go straight to the Senate floor for a vote, indicating that it’s very likely to get approved.

Reid’s bill doesn’t mean passage is a slam dunk but does indicate it has strong support, Merski says. “Now it has the highest level of support in the United States Senate,” he says. “It has a very viable chance of passage in the last three weeks of the session.”

James Ballentine, chief lobbyist at the American Bankers Association, pictured at right, is a little more skeptical about passage. “It’s still up in the air,” he says. “The introduction of a bill doesn’t mean the passage of a bill. It’s certainly helpful to get someone in a leadership position to support this, but as we know from this Congress, that doesn’t necessarily guarantee anything.”

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