TAG Extension Faces Opposition in House

Community bankers expect the Senate to pass a two-year extension; Obama supports measure.

Community bankers who expect the U.S. Senate to pass a bill tomorrow that would extend a program intended to help them retain deposits also believe they will have a tougher time getting the measure though the House.

Facing strong opposition in that Republican-controlled chamber, including from Majority Leader Eric Cantor of Virginia and incoming Financial Services Committee Chairman Jeb Hensarling of Texas, supporters of the Transaction Account Guarantee program may now try to add the extension to fiscal cliff legislation.

Depositors’ Assumptions

While community banks are healthier than they were in 2008, many such bankers worry they’ll lose transaction accounts to bigger rivals because of a public perception that big institutions will be rescued by the government if there is another crisis.

Broader Package

Still, Independent Community Bankers of America chief economist Paul Merski said he supports the fiscal-cliff strategy to extend TAG.

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