Congress quietly shields small banks from insurance costs while expanding deposit coverage
S. 4198 — Main Street Depositor Protection Act · Filed by Bill Hagerty (R-TN) · 6 cosponsors · Introduced Mar 25, 2026 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill expands federal deposit insurance to cover noninterest-bearing transaction accounts (checking accounts) beyond the current $250,000 limit, up to a maximum of $5 million per depositor per bank, phased in over 10 years. Small banks (under $10 billion in assets) are exempt from paying special insurance assessments during the transition. The bill applies to both banks and credit unions, but excludes subsidiaries of systemically important banks and foreign bank branches.
Why we flagged it
The bill's core mechanism is expanding FDIC/NCUA coverage for noninterest-bearing accounts, a consumer protection measure. However, the assessment exemption for banks under $10 billion in assets is a direct subsidy to a defined industry segment, making the bill functionally a hybrid of consumer protection and small-bank relief.
What the text implies
- The $5 million cap per depositor per bank creates a cliff: a business with $5.1 million in operating deposits at one bank loses coverage on the excess, incentivizing deposit fragmentation across multiple institutions and increasing systemic complexity.
- Small banks (under $10 billion assets) are exempt from special assessments during the 10-year transition, shifting the cost burden to larger banks and potentially to the Deposit Insurance Fund itself if losses exceed reserves—a hidden subsidy to a politically favored segment.
The full analysis lists 5 implications of this text.
Who stands to gain
community banks and regional banks (under $10 billion in assets); small-business payroll processors and cash-management service providers; credit unions