Hagerty Introduces Legislation to Relieve Stress on Banking System, Restore Confidence in America’s Financial Sector

MEMPHIS, TN—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, introduced the Depositor Protection Act of 2023, a bill to address the current stress on the American banking system and restore confidence in our financial sector.

“As the past few months have made clear, our banking system is under significant stress from the rapid rise in interest rates due to the historic inflation that we are experiencing,” said Senator Hagerty. “While banks should be responsible for managing such risks, alleviating some of these pressures in our financial system will restore confidence and prevent unnecessary damage to our economy.”

Specifically, the Depositor Protection Act of 2023 would:

1. Introduce a two-year transaction guarantee for non-interest-bearing accounts up to $100 million to protect commercial deposits;
2. Increase the limit on reciprocal deposits to protect retail deposits;
3. Streamline the regulatory approval process for well-rated and well-capitalized banks; and
4. Amend the Federal Deposit Insurance Corporation’s (FDIC) least cost test to expand the cost considerations used for a potential sale of a failed bank.

Full text of the legislation can be found here.