GFOA of the US & Canada

Issue Brief: FDIC Reform

Updated January 2008

Congress has not acted on FDIC reform measures since the Federal Deposit Insurance Reform Act of 2005 (P.L.
109-171). The Act addressed many technical issues within the FDIC and also provided for an inflation adjustment
to the standard insurance amount ($100,000) beginning in 2010. The Act also increased the insured limit for
retirement accounts to $250,000.

The Act did not include a provision that was passed in an earlier House bill which would have raised the insurance
coverage for in-state municipal deposits to either $2 million or the standard insurance amount plus 80 percent of
the deposits over that amount, whichever is less. This provision was supported by GFOA.

Outlook for 2008

It is unlikely that Congress will address FDIC reform issues, including an increase in the insurance coverage for
municipal deposits, in 2008.

Related GFOA Public Policy Statements

• Use and Importance of Pledging Requirements for Public Deposits (1984)
• Local Restrictions on Banks and Investments (1997)

GFOA • Federal Liaison Center • (202) 393-8020 • (202) 393-0780 FAX • Email