WASHINGTON—United States Senator Bill Hagerty (R-TN), Ranking Member of the Senate Appropriations Subcommittee on Financial Services and General Government, today received a commitment from Treasury Secretary Janet Yellen that the Biden Administration is not considering an unprecedented expansion of Federal Deposit Insurance Corporation (FDIC) coverage to guarantee all uninsured deposits without Congressional approval. Hagerty’s questioning of Yellen follows news reports yesterday that the Treasury Department was reviewing whether federal regulators have authority to circumvent Congressional approval and temporarily insure deposits greater than the current $250,000 cap.
“I’d like to turn to news reports yesterday that [the] Treasury is considering whether the Administration can order an unprecedented expansion of FDIC coverage to guarantee all uninsured deposits. As was reported, this facility would be backed by the Exchange Stabilization Fund (ESF), which was created to support the value of the U.S. dollar in international markets, not as a slush fund, when consulting Congress may be inconvenient. I’m deeply concerned by these reports, as such a program would not only or constitute a misuse of the ESF, but it would circumvent Congress’s role in approving such an action. Madam Secretary, does ensuring every deposit at every FDIC insured bank in the nation over $250,000 require congressional approval?” Hagerty asked.
“This is not something that we have looked at. It’s not something that we are considering,” Yellen responded.
Hagerty reminded Yellen that Congressional approval is required in the form of a joint resolution to temporarily insure deposits larger than the current $250,000 cap.