WASHINGTON—On October 30, United States Senator Bill Hagerty (R-TN) and United States Secretary of the Treasury Scott Bessent penned a joint letter to the Wall Street Journal’s Editorial Board. In the letter, entitled “How to Make Main Street Banks Great Again,” the Senator and the Treasury Secretary argue that a targeted expansion of deposit insurance is necessary to strengthen the roles of community and regional banks in the financial system of the future.
To advance this Trump Administration priority, Sen. Hagerty introduced the bipartisan Main Street Depositor Protection Act last month. This legislation would provide expanded deposit insurance coverage for noninterest-bearing transaction accounts at insured banks and credit unions, excluding only the largest banks, which already benefit from a perceived government guarantee. This measure will help correct competitive imbalances in the banking system and ensure that the banks that serve Main Street have the same chance to succeed as the banks that serve Wall Street. The bill is supported by the Independent Community Bankers of America, Mid-Size Bank Coalition of America, America’s Credit Unions, Tennessee Bankers Association, and the Tennessee Credit Union League.
Read the letter in the Wall Street Journal or below:
How to Make Main Street Banks Great Again
Treasury Secretary Scott Bessent and Sen. Bill Hagerty reply to the editorial board.
Oct. 30, 2025 4:44 pm ET
Amid the panic that ensued in the spring 2023, billions of dollars of deposits fled from regional and community banks to the largest banks. Regulators responded by invoking emergency powers, further entrenching the bailout culture that the Dodd-Frank Act of 2010 was intended to end. What explained the flight? A competitive imbalance: The biggest banks benefit from a perceived government guarantee that smaller institutions lack.
This perceived guarantee has contributed to the steady disappearance of community banks. The U.S. has lost 3,600 of them since 2010, a 45% decline. Community banks’ share of bank assets has fallen to 15% from 23%. Their share of outstanding loans has dropped to 20% from 27%.
In “How to Make Banks Less Safe” (Review & Outlook, Oct. 20), you shrug off the market-distorting effects of the government’s perceived guarantee. Given that Dodd-Frank entrenched the biggest banks as “too big to fail,” you suggest it’s somehow efficient market behavior for them to attract all deposits.
We disagree. A strong and stable American banking system must include small and midsize banks, too. Compared with large outfits, community banks allocate a much higher proportion of their assets to small business and retail lending. Despite holding only 15% of industry assets and deposits, community banks account for 40% of small-business loans and 70% of agricultural loans.
Empowering them to succeed is essential to driving economic growth in America’s heartland. In coastal cities, global systemically important banks may sponsor big-league stadiums. But in the rural towns of South Carolina and Tennessee, it is the community banks that sponsor the Little League, lend to Main Street businesses and make the American dream possible.
One of us, Sen. Hagerty, recently proposed legislation to fortify our community banks against existential headwinds by raising the Federal Deposit Insurance Corp. limit. This would put community banks on a more even playing field with their larger competitors and provide small businesses more certainty to maintain their payroll and other operating accounts with community banks in times of stress. By bolstering depositor confidence and reducing the risk of runs, the policy would prevent costly failures before they happen.
Addressing this vulnerability is key to restoring fairness to our banking system. If we fail to correct the competitive imbalances that favor large banks, the consequences could be dire. A failure to act is a tacit endorsement of a future that looks too much like Europe or Canada, where the six megabanks control more than 90% of the country’s bank assets.
Dodd-Frank was supposed to end “too big to fail,” but instead created “too small to succeed.” It’s time for regulators and Congress to reckon with the damage that the act has inflicted on community banks and the families that depend on them. To expand opportunity for all Americans, the banks that serve Main Street must have the same chance to succeed as the banks that serve Wall Street.
Scott Bessent and Bill Hagerty
Washington and Nashville, Tenn.
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