Prominent lawmakers are calling for the Federal Deposit Insurance Corporation (FDIC) to raise the ceiling on its $250,000 insurance limit following the collapse of Silicon Valley Bank.
This comes after regulators shut down Silicon Valley Bank earlier in the month. The FDIC took control of the bank and said they would protect insured deposits, which means they would protect anything up to the $250,000 limit. Shortly thereafter, the government announced that they would be taking “decisive actions to protect the U.S. economy” by making deposits above the FDIC’s $250,000 limit available.
However, weeks after the collapse, lawmakers wanted to raise the limit again after it was permanently raised to $250,000 from $100,000 by the 2008 Dodd-Frank law following a temporary hike during the 2008 financial crisis.
Sen. Elizabeth Warren told CBS’s Face the Nation on Sunday that raising the limit has “got to be on the table right now” with the chaos in the banking sector.
“I think the lifting the FDIC insurance cap is a good move. Now the question is, where’s the right number on lifting,” Warren questioned, while not mentioning a specific number. “But recognize that we have to do this because these banks are underregulated, and if we lift the cap, we are requiring — or relying even more heavily on the regulators to do their jobs.”
Sen. Mark Warner (D-VA) told Bloomberg also said he is “open” to extending FDIC insurance for two years to deposits of all sizes but doesn’t “want to rush because to take that leap is a big leap.”
Sen. Mike Rounds (R-SD) told NBC’s Meet the Press that “Perhaps that’s not enough” when talking about the $250,000 limit.
Rep. Blaine Luetkemeyer (R-MO), a former banker, alluded to their being a run on smaller banks if there isn’t something temporarily done about the $250,000 FDIC limit to “give the system confidence.”
“If you don’t do this, there’s going to be a run on your smaller banks,” Luetkemeyer told Politico. “Everyone’s going to take their money out and run to the JPMorgan’s and these too-big-to-fail banks, and they’re going to get bigger, and everybody else is going to get smaller and weaker, and it’s going really be bad for our system.”
Jacob Bliss is a reporter for Breitbart News. Write to him at email@example.com or follow him on Twitter @JacobMBliss.
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