S. 4198

119 S4198 IS: Main Street Depositor Protection Act
 U.S. Senate
 2026-03-25
 text/xml
 EN
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 II  119th CONGRESS  2d Session  S. 4198  IN THE SENATE OF THE UNITED STATES   March 25, 2026   Mr. Hagerty  (for himself,  Ms. Alsobrooks ,  Mr. Banks ,  Ms. Cortez Masto ,  Mrs. Hyde-Smith ,  Mr. Gallego , and  Mr. Wicker ) introduced the following bill; which was read twice and referred to the  Committee on Banking, Housing, and Urban Affairs    A BILL
To amend the Federal Deposit Insurance Act to provide deposit insurance for noninterest-bearing transaction accounts, and for other purposes.
1.
Short title
This Act may be cited as the   Main Street Depositor Protection Act  .
2.
Transaction account insurance
(a)
Depository institutions
(1)
In general
Section 11(a)(1) of the Federal Deposit Insurance Act ( 12 U.S.C. 1821(a)(1) ) is amended by striking subparagraph (B) and inserting the following:
(B)
Net amount of insured deposit
(i)
In general
The net amount due to any depositor at an insured depository institution shall not exceed the sum of—
(I)
the standard maximum deposit insurance amount as determined in accordance with subparagraphs (C), (D), (E), and (F) and paragraph (3); and
(II)
the net amount under clause (ii).
(ii)
Insurance for noninterest-bearing transaction accounts
(I)
In general
Except as provided in subclause (IV), not later than the end of the 6-month period beginning on the date of enactment of this clause, the Corporation shall insure the net amount that any depositor maintains, in the aggregate, in 1 or more noninterest-bearing transaction accounts at an insured depository institution, in the amount determined under subclause (II).
(II)
Insured amount
The Corporation shall issue a rule to establish the maximum amount for insurance described in subclause (I), which shall be in an amount that is—
(aa)
not less than the standard maximum deposit insurance amount on the date such rule is issued;
(bb)
not more than $5,000,000; and
(cc)
based on considerations of enhancing the financial stability of the banking system, promoting economic growth, and providing for the safety of the Deposit Insurance Fund.
(III)
Aggregation
For the purpose of determining the net amount due to any depositor under subclause (I), the Corporation shall aggregate the amounts of all deposits in noninterest-bearing transaction accounts at insured depository institutions that are subsidiaries of a single depository institution holding company.
(IV)
Exclusion
(aa)
Definition
In this subclause, the term  foreign bank  does not include any bank organized under the laws of any territory of the United States, Puerto Rico, Guam, American Samoa, or the Virgin Islands, the deposits of which are insured by the Corporation pursuant to this Act.
(bb)
Exclusion
The Corporation may not insure under subclause (I) amounts maintained at—
(AA)
any insured depository institution that is a subsidiary of a bank holding company that is identified as a global systemically important BHC under section 217.402 of title 12, Code of Federal Regulations (or any successor regulation); or
(BB)
any insured branch of a foreign bank.
(cc)
Rule of construction
Nothing in this subclause may be construed to exclude any insured depository institution described in subitem (AA) from the standard maximum deposit insurance amount described in clause (i)(I).
(V)
No subsequent adjustments
After the Corporation issues a rule pursuant to subclause (II), the amount of insurance provided under subclause (I) may not subsequently be modified or repealed except by an Act of Congress.
 .
(2)
Technical and conforming amendment
Section 3(m) of the Federal Deposit Insurance Act ( 12 U.S.C. 1813(m) ) is amended—
(A)
in paragraph (1), by inserting  , including deposits in a noninterest-bearing transaction account,  after  deposits ; and
(B)
by adding at the end the following:
(5)
Noninterest-bearing transaction account
The term  noninterest-bearing transaction account  means a deposit or account maintained at an insured depository institution—
(A)
with respect to which interest is neither accrued nor paid;
(B)
on which the depositor or account holder is permitted to make withdrawals by negotiable or transferable instrument, payment orders of withdrawal, telephone or other electronic media transfers, or other similar items for the purpose of making payments or transfers to third parties or others; and
(C)
on which the insured depository institution does not reserve the right to require advance notice of an intended withdrawal.
 .
(3)
Assessments
During the transition period under subsection (c), no insured depository institution with total assets of $10,000,000,000 or less shall be required to pay—
(A)
any special assessment under section 7(b)(5) or 13(c)(4)(G) of the Federal Deposit Insurance Act ( 12 U.S.C. 1817(b)(5) , 1823(c)(4)(G)) as a condition to insurance on a noninterest-bearing transaction account, as defined in paragraph (5) of section 3(m) of the Federal Deposit Insurance Act ( 12 U.S.C. 1813(m) ), as added by paragraph (2) of this subsection; or
(B)
any increase in assessments under section 7(b)(2) of the Federal Deposit Insurance Act ( 12 U.S.C. 1817(b)(2) ) solely to offset any impact on the reserve ratio arising out of the extension of insurance to noninterest-bearing transaction accounts in excess of the standard maximum deposit insurance amount as determined in accordance with subparagraphs (C), (D), (E), and (F) of paragraph (1) and paragraph (3) of section 11(a) of that Act ( 12 U.S.C. 1821(a) ).
(b)
Credit unions
(1)
In general
Section 207(k)(1)(A) of the Federal Credit Union Act ( 12 U.S.C. 1787(k)(1)(A) ) is amended—
(A)
by striking  Subject to the provisions of paragraph (2), the net amount  and inserting the following:
(i)
Net amount of insurance payable
Subject to clause (ii) and the provisions of paragraph (2), the net amount
 ; and
(B)
by adding at the end the following:
(ii)
Insurance for noninterest-bearing transaction accounts
(I)
In general
Notwithstanding clause (i), the Board shall insure the net amount that any member, or any person with funds lawfully held in a member account, maintains, in the aggregate, in 1 or more noninterest-bearing transaction accounts at an insured credit union.
(II)
Insured amount
The maximum amount for insurance described in subclause (I) shall be the maximum amount determined in the rule issued by the Federal Deposit Insurance Corporation pursuant to section 11(a)(1)(B)(ii)(II) of the Federal Deposit Insurance Act ( 12 U.S.C. 1821(a)(1)(B)(ii)(II) ).
(III)
Exclusion
The amount described in subclause (I) shall not be taken into account when computing the net amount due to a member, or to any person with funds lawfully held in a member account, described in that subclause under clause (i).
 .
(2)
Technical and conforming amendments
Section 101 of the Federal Credit Union Act ( 12 U.S.C. 1752 ) is amended—
(A)
in paragraph (5), by inserting  such terms mean a noninterest-bearing transaction account,  after  Act, ;
(B)
in paragraph (8), by striking  and  at the end;
(C)
in paragraph (9), by striking the period at the end and inserting  ; and ; and
(D)
by adding at the end the following:
(10)
The term  noninterest-bearing transaction account  means an account of a member, or nonmember that is eligible to maintain an insured account, maintained at an insured credit union—
(A)
with respect to which interest is neither accrued nor paid;
(B)
on which the member or account holder is permitted to make withdrawals by negotiable or transferable instrument, payment orders of withdrawal, telephone or other electronic media transfers, or other similar items for the purpose of making payments or transfers to third parties or others; and
(C)
on which the insured credit union does not reserve the right to require advance notice of an intended withdrawal.
 .
(c)
Transition period
(1)
Depository institutions
(A)
In general
Notwithstanding any other provision of law, insured deposits in noninterest-bearing transaction accounts, as described in clause (ii) of section 11(a)(1)(B) of the Federal Deposit Insurance Act ( 12 U.S.C. 1821(a)(1)(B) ), as added by subsection (a)(1) of this section, shall be included in the determination of the value of the estimated insured deposits described in sections 3(y)(3) and 7(b)(3)(B) of that Act ( 12 U.S.C. 1813(y)(3) , 1817(b)(3)(B)) in accordance with the plan required under subparagraph (B).
(B)
Plan
Not later than 1 year after the date of enactment of this Act, the Federal Deposit Insurance Corporation shall publish in the Federal Register a plan for gradually increasing, during the period ending on the date that is 10 years after the date of enactment of this Act, the portion of insured deposits described in subparagraph (A) in the determination described in that subparagraph, reaching 100 percent at the end of the period.
(2)
Credit unions
(A)
In general
Notwithstanding any other provision of law, insured shares in noninterest-bearing transaction accounts, as described in clause (ii) of section 207(k)(1)(A) of the Federal Credit Union Act ( 12 U.S.C. 1787(k)(1)(A) ), as added by subsection (b)(1) of this section, shall be included in the determination of the value of the aggregate amount of the insured shares, as defined in section 202(h) of that Act ( 12 U.S.C. 1782(h) ), in accordance with the plan required under subparagraph (B).
(B)
Plan
Not later than 1 year after the date of enactment of this Act, the National Credit Union Administration Board shall publish in the Federal Register a plan for gradually increasing, during the period ending on the date that is 10 years after the date of enactment of this Act, the portion of insured shares described in subparagraph (A) in the determination described in that subparagraph, reaching 100 percent at the end of the period.
(C)
Regulations
The National Credit Union Administration Board may promulgate regulations to ensure that the National Credit Union Share Insurance Fund remains well-capitalized.
(d)
Regulations
The Federal Deposit Insurance Corporation and the National Credit Union Administration Board may promulgate regulations carrying out the amendments made by this section, including prohibiting insured depository institutions, as defined in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ), insured credit unions, as defined in section 101 of the Federal Credit Union Act ( 12 U.S.C. 1752 ), and third parties, as applicable, from evading the limitation of insurance established under those amendments to only—
(1)
noninterest-bearing transaction accounts;
(2)
deposits or accounts at insured depository institutions not excluded under clause (ii)(IV) of section 11(a)(1)(B) of the Federal Deposit Insurance Act ( 12 U.S.C. 1821(a)(1)(B) ), as added by subsection (a) of this section; and
(3)
shares, deposits, or accounts at insured credit unions.