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.
The FDIC created the TAG program in the depths of the financial crisis in 2008 to protect against bank runs. Congress extended the program for two additional years in 2010 as part of Dodd-Frank. Without congressional action, FDIC insurance on these accounts will revert back to the original cap of $250,000 per account.
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