Democrats are pushing to reform the deposit insurance system following massive bank failures that nearly tanked the economy earlier this year, The Hill reported. After the collapse of Silicon Valley Bank (SVB), Signature Bank and First Republic Bank, whose uninsured deposits all ended up being insured by the Federal Deposit Insurance Corporation (FDIC), Democrats are echoing the call of smaller banks, arguing that deposit insurance should apply to all U.S. deposits. “The recent bank failures have reignited concerns regarding an implicit guarantee wherein only deposits at larger banks will reliably be safe in the event of a failure,” Rep. Maxine Waters (Calif.), top Democrat on the House Financial Services Committee, said Friday. Waters endorsed a number of suggested reforms including “raising the $250,000 [account balance insurance] limit to a higher threshold, unlimited deposit insurance for everyone, and covering business payment accounts like the payroll accounts of start-up companies.”
