A new bipartisan bill introduced in Washington aims to strengthen confidence in the United States banking system by increasing deposit insurance limits for key business accounts, in a move designed to support regional and community lenders.
Representative Frank D. Lucas and Senator Bill Hagerty have put forward the Main Street Depositor Protection Act, legislation that would direct regulators to raise the maximum deposit insurance threshold for noninterest-bearing transaction accounts to $5 million.
The proposal is positioned as a targeted response to vulnerabilities exposed during recent banking sector stress, particularly the collapse of Silicon Valley Bank, which triggered concerns over uninsured deposits held by businesses for operational purposes such as payroll.
Under the bill, the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) would be required to modernise existing rules governing deposit insurance coverage. The focus is specifically on transaction accounts that do not earn interest but are widely used by small and medium-sized enterprises to manage day-to-day cash flow.
“The Main Street Depositor Protection Act ensures banks of all sizes continue to play a fundamental role in driving economic growth in their communities,” said Congressman Frank D. Lucas. “I’m proud to support President Trump’s Main Street agenda by introducing a targeted bill that preserves Oklahoma banks’ competitiveness and enhances financial stability across the nation.”
Supporters of the legislation argue that raising insurance limits for these accounts would help prevent sudden withdrawals during periods of financial uncertainty, thereby reducing the risk of bank runs that disproportionately affect smaller institutions.
Senator Bill Hagerty highlighted the broader policy objective of maintaining a balanced financial system that supports both large and smaller banks. “The banks that serve Main Street must have the same chance to succeed as the banks that serve Wall Street. This bipartisan, bicameral bill advances the Administration’s priority of preserving the central role of regional and community banks in the financial system of the future. It’s narrowly targeted to address a very specific concern that manifested itself during the Silicon Valley Bank collapse — a run on non-interest bearing transaction accounts typically used to make payrolls by small businesses that are very important customers for our local and regional banks.” said Senator Bill Hagerty.
The bill has received backing from a range of banking industry groups, including the Independent Community Bankers of America, the Mid-Size Bank Coalition of America, and state-level organisations in Oklahoma.
Industry leaders have framed the proposal as a necessary update to a system that has not kept pace with the evolving scale of business banking. Independent Community Bankers of America President and CEO Rebeca Romero Rainey: “ICBA thanks Rep. Frank Lucas for advancing the deposit insurance debate by introducing the Main Street Depositor Protection Act. We appreciate Rep. Lucas’s efforts to promote balanced deposit insurance coverage across the banking industry to further strengthen the deposit insurance system and to better support small businesses that use transaction accounts for payroll and other recurring expenses while being mindful of costs on community banks.”
Mid-Size Bank Coalition of America Chairman Jim Ryan: “On behalf of mid-size banks across the country, I want to thank Congressman Lucas [and Senators Hagerty and Alsobrooks] for introducing this important legislation. This commonsense modernization bill will allow Main Street banks to serve their customers better and keep capital in all communities across the country. The Mid-Size Bank Coalition of America thanks Congressman Lucas [and Senators Hagerty and Alsobrooks] for his leadership and advocacy for Main Street businesses.”
At the state level, regulators and banking representatives have also expressed support. Oklahoma State Banking Commissioner Mick Thompson: “Oklahoma has seen firsthand the need for targeted deposit insurance reform. We are grateful for Congressman Lucas’ leadership in introducing the Main Street Depositor Protection Act that increases the resiliency of the financial system and keeps Oklahoma banks strong.”
Community banking advocates argue that the reform would help level the playing field with larger financial institutions. Community Bankers Association of Oklahoma President and CEO Craig Buford: “The Community Bankers Association of Oklahoma (CBAO) strongly supports Congressman Frank Lucas introduction of legislation that will grant the FDIC authority to increase deposit insurance on non-interest-bearing accounts. Community banks are the lifeblood of the nation’s economy and this legislation will help the community banking industry remain competitive.”
The Oklahoma Bankers Association President and CEO Adrian Beverage added: “The Oklahoma Bankers Association board of directors unanimously approved support for Rep. Lucas in his effort for reasonable deposit reform to protect and support community banks. The Main Street Depositor Protection Act is a good first step to achieve these goals. We thank Rep. Lucas for his efforts to address this issue and his unyielding support of community banks.”
Executives from financial institutions echoed similar sentiments, noting that the proposal reflects current economic realities. BOK Financial CFO Marty Grunst: “This legislation represents a solid step forward in modernizing the deposit insurance framework—one that has not been meaningfully updated in 18 years. We support these reforms because they bring the system closer to the realities of the current operating environment.”
First United Bank & Trust Company CEO Greg Massey: “We appreciate Congress’s continued work on deposit reform as we work together to strengthen depositor protections, reinforce confidence in the banking system, and ensure community banks can continue reinvesting in our local communities to support economic growth. We are proud to support Congressman Lucas’s bill.”
BancFirst Corporation Chairman David Rainbolt: “Too Big To Fail has siphoned local deposits from smaller banks, draining our communities of essential lending capacity and economic opportunity. The Main Street Depositor Protection Act rightly strengthens the deposit framework to keep deposits in our neighborhoods and ensure we can continue to thrive. I thank Congressman Lucas for his unwavering support of Oklahoma’s banks.”
The legislation now awaits further consideration in Congress, where its progress will be closely watched by banking stakeholders and policymakers assessing the future shape of deposit insurance in the US financial system.
