S.Amdt. 6396

SA 6396 aims to create additional insurance for noninterest-bearing transaction accounts at insured depository institutions and credit unions. This would be added to the existing standard maximum deposit or share insurance amounts.

Key Changes and Additions

• New Insurance Coverage: The amendment directs the Corporation and the National Credit Union Administration to set a maximum insurance amount for these specific accounts. This amount must be at least the current standard maximum but cannot exceed $5,000,000.

• Account Requirements: To qualify, a "noninterest-bearing transaction account" must:

  • Not accrue or pay interest.
  • Allow withdrawals via instruments like checks, electronic transfers, or phone calls for payments to third parties.
  • Not require advance notice for withdrawals.

• Exclusions: This extra insurance cannot be used for accounts at:

  • Insured branches of foreign banks.
  • Depository institutions that are subsidiaries of bank holding companies identified as global systemically important BHC.

• Protection for Smaller Institutions: Depository institutions with total assets of $10 billion or less will not be required to pay special assessments or certain assessment increases as a condition of providing this insurance.

• Implementation:

  • The rules for the insurance amount must be issued within 6 months of enactment.
  • Once the amount is set, it cannot be changed or repealed unless Congress passes an Act.
  • A 10-year transition period will be established via a published plan to gradually increase the portion of these insured deposits/shares used in specific value determinations.