S. 4198

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4198 Introduced in Senate (IS)]

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119th CONGRESS
2d Session
S. 4198

To amend the Federal Deposit Insurance Act to provide deposit insurance 
for noninterest-bearing transaction accounts, and for other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

March 25, 2026

Mr. Hagerty (for himself, Ms. Alsobrooks, Mr. Banks, Ms. Cortez Masto, 
Mrs. Hyde-Smith, Mr. Gallego, and Mr. Wicker) introduced the following 
bill; which was read twice and referred to the Committee on Banking, 
Housing, and Urban Affairs

_______________________________________________________________________

A BILL

To amend the Federal Deposit Insurance Act to provide deposit insurance 
for noninterest-bearing transaction accounts, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Main Street Depositor Protection 
Act''.

SEC. 2. TRANSACTION ACCOUNT INSURANCE.

(a) Depository Institutions.--
(1) In general.--Section 11(a)(1) of the Federal Deposit 
Insurance Act (12 U.S.C. 1821(a)(1)) is amended by striking 
subparagraph (B) and inserting the following:
``(B) Net amount of insured deposit.--
``(i) In general.--The net amount due to 
any depositor at an insured depository 
institution shall not exceed the sum of--
``(I) the standard maximum deposit 
insurance amount as determined in 
accordance with subparagraphs (C), (D), 
(E), and (F) and paragraph (3); and
``(II) the net amount under clause 
(ii).
``(ii) Insurance for noninterest-bearing 
transaction accounts.--
``(I) In general.--Except as 
provided in subclause (IV), not later 
than the end of the 6-month period 
beginning on the date of enactment of 
this clause, the Corporation shall 
insure the net amount that any 
depositor maintains, in the aggregate, 
in 1 or more noninterest-bearing 
transaction accounts at an insured 
depository institution, in the amount 
determined under subclause (II).
``(II) Insured amount.--The 
Corporation shall issue a rule to 
establish the maximum amount for 
insurance described in subclause (I), 
which shall be in an amount that is--
``(aa) not less than the 
standard maximum deposit 
insurance amount on the date 
such rule is issued;
``(bb) not more than 
$5,000,000; and
``(cc) based on 
considerations of enhancing the 
financial stability of the 
banking system, promoting 
economic growth, and providing 
for the safety of the Deposit 
Insurance Fund.
``(III) Aggregation.--For the 
purpose of determining the net amount 
due to any depositor under subclause 
(I), the Corporation shall aggregate 
the amounts of all deposits in 
noninterest-bearing transaction 
accounts at insured depository 
institutions that are subsidiaries of a 
single depository institution holding 
company.
``(IV) Exclusion.--
``(aa) Definition.--In this 
subclause, the term `foreign 
bank' does not include any bank 
organized under the laws of any 
territory of the United States, 
Puerto Rico, Guam, American 
Samoa, or the Virgin Islands, 
the deposits of which are 
insured by the Corporation 
pursuant to this Act.
``(bb) Exclusion.--The 
Corporation may not insure 
under subclause (I) amounts 
maintained at--

``(AA) any insured 
depository institution 
that is a subsidiary of 
a bank holding company 
that is identified as a 
global systemically 
important BHC under 
section 217.402 of 
title 12, Code of 
Federal Regulations (or 
any successor 
regulation); or

``(BB) any insured 
branch of a foreign 
bank.

``(cc) Rule of 
construction.--Nothing in this 
subclause may be construed to 
exclude any insured depository 
institution described in 
subitem (AA) from the standard 
maximum deposit insurance 
amount described in clause 
(i)(I).
``(V) No subsequent adjustments.--
After the Corporation issues a rule 
pursuant to subclause (II), the amount 
of insurance provided under subclause 
(I) may not subsequently be modified or 
repealed except by an Act of 
Congress.''.
(2) Technical and conforming amendment.--Section 3(m) of 
the Federal Deposit Insurance Act (12 U.S.C. 1813(m)) is 
amended--
(A) in paragraph (1), by inserting ``, including 
deposits in a noninterest-bearing transaction 
account,'' after ``deposits''; and
(B) by adding at the end the following:
``(5) Noninterest-bearing transaction account.--The term 
`noninterest-bearing transaction account' means a deposit or 
account maintained at an insured depository institution--
``(A) with respect to which interest is neither 
accrued nor paid;
``(B) on which the depositor or account holder is 
permitted to make withdrawals by negotiable or 
transferable instrument, payment orders of withdrawal, 
telephone or other electronic media transfers, or other 
similar items for the purpose of making payments or 
transfers to third parties or others; and
``(C) on which the insured depository institution 
does not reserve the right to require advance notice of 
an intended withdrawal.''.
(3) Assessments.--During the transition period under 
subsection (c), no insured depository institution with total 
assets of $10,000,000,000 or less shall be required to pay--
(A) any special assessment under section 7(b)(5) or 
13(c)(4)(G) of the Federal Deposit Insurance Act (12 
U.S.C. 1817(b)(5), 1823(c)(4)(G)) as a condition to 
insurance on a noninterest-bearing transaction account, 
as defined in paragraph (5) of section 3(m) of the 
Federal Deposit Insurance Act (12 U.S.C. 1813(m)), as 
added by paragraph (2) of this subsection; or
(B) any increase in assessments under section 
7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 
1817(b)(2)) solely to offset any impact on the reserve 
ratio arising out of the extension of insurance to 
noninterest-bearing transaction accounts in excess of 
the standard maximum deposit insurance amount as 
determined in accordance with subparagraphs (C), (D), 
(E), and (F) of paragraph (1) and paragraph (3) of 
section 11(a) of that Act (12 U.S.C. 1821(a)).
(b) Credit Unions.--
(1) In general.--Section 207(k)(1)(A) of the Federal Credit 
Union Act (12 U.S.C. 1787(k)(1)(A)) is amended--
(A) by striking ``Subject to the provisions of 
paragraph (2), the net amount'' and inserting the 
following:
``(i) Net amount of insurance payable.--
Subject to clause (ii) and the provisions of 
paragraph (2), the net amount''; and
(B) by adding at the end the following:
``(ii) Insurance for noninterest-bearing 
transaction accounts.--
``(I) In general.--Notwithstanding 
clause (i), the Board shall insure the 
net amount that any member, or any 
person with funds lawfully held in a 
member account, maintains, in the 
aggregate, in 1 or more noninterest-
bearing transaction accounts at an 
insured credit union.
``(II) Insured amount.--The maximum 
amount for insurance described in 
subclause (I) shall be the maximum 
amount determined in the rule issued by 
the Federal Deposit Insurance 
Corporation pursuant to section 
11(a)(1)(B)(ii)(II) of the Federal 
Deposit Insurance Act (12 U.S.C. 
1821(a)(1)(B)(ii)(II)).
``(III) Exclusion.--The amount 
described in subclause (I) shall not be 
taken into account when computing the 
net amount due to a member, or to any 
person with funds lawfully held in a 
member account, described in that 
subclause under clause (i).''.
(2) Technical and conforming amendments.--Section 101 of 
the Federal Credit Union Act (12 U.S.C. 1752) is amended--
(A) in paragraph (5), by inserting ``such terms 
mean a noninterest-bearing transaction account,'' after 
``Act,'';
(B) in paragraph (8), by striking ``and'' at the 
end;
(C) in paragraph (9), by striking the period at the 
end and inserting ``; and''; and
(D) by adding at the end the following:
``(10) The term `noninterest-bearing transaction account' 
means an account of a member, or nonmember that is eligible to 
maintain an insured account, maintained at an insured credit 
union--
``(A) with respect to which interest is neither 
accrued nor paid;
``(B) on which the member or account holder is 
permitted to make withdrawals by negotiable or 
transferable instrument, payment orders of withdrawal, 
telephone or other electronic media transfers, or other 
similar items for the purpose of making payments or 
transfers to third parties or others; and
``(C) on which the insured credit union does not 
reserve the right to require advance notice of an 
intended withdrawal.''.
(c) Transition Period.--
(1) Depository institutions.--
(A) In general.--Notwithstanding any other 
provision of law, insured deposits in noninterest-
bearing transaction accounts, as described in clause 
(ii) of section 11(a)(1)(B) of the Federal Deposit 
Insurance Act (12 U.S.C. 1821(a)(1)(B)), as added by 
subsection (a)(1) of this section, shall be included in 
the determination of the value of the estimated insured 
deposits described in sections 3(y)(3) and 7(b)(3)(B) 
of that Act (12 U.S.C. 1813(y)(3), 1817(b)(3)(B)) in 
accordance with the plan required under subparagraph 
(B).
(B) Plan.--Not later than 1 year after the date of 
enactment of this Act, the Federal Deposit Insurance 
Corporation shall publish in the Federal Register a 
plan for gradually increasing, during the period ending 
on the date that is 10 years after the date of 
enactment of this Act, the portion of insured deposits 
described in subparagraph (A) in the determination 
described in that subparagraph, reaching 100 percent at 
the end of the period.
(2) Credit unions.--
(A) In general.--Notwithstanding any other 
provision of law, insured shares in noninterest-bearing 
transaction accounts, as described in clause (ii) of 
section 207(k)(1)(A) of the Federal Credit Union Act 
(12 U.S.C. 1787(k)(1)(A)), as added by subsection 
(b)(1) of this section, shall be included in the 
determination of the value of the aggregate amount of 
the insured shares, as defined in section 202(h) of 
that Act (12 U.S.C. 1782(h)), in accordance with the 
plan required under subparagraph (B).
(B) Plan.--Not later than 1 year after the date of 
enactment of this Act, the National Credit Union 
Administration Board shall publish in the Federal 
Register a plan for gradually increasing, during the 
period ending on the date that is 10 years after the 
date of enactment of this Act, the portion of insured 
shares described in subparagraph (A) in the 
determination described in that subparagraph, reaching 
100 percent at the end of the period.
(C) Regulations.--The National Credit Union 
Administration Board may promulgate regulations to 
ensure that the National Credit Union Share Insurance 
Fund remains well-capitalized.
(d) Regulations.--The Federal Deposit Insurance Corporation and the 
National Credit Union Administration Board may promulgate regulations 
carrying out the amendments made by this section, including prohibiting 
insured depository institutions, as defined in section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813), insured credit unions, as 
defined in section 101 of the Federal Credit Union Act (12 U.S.C. 
1752), and third parties, as applicable, from evading the limitation of 
insurance established under those amendments to only--
(1) noninterest-bearing transaction accounts;
(2) deposits or accounts at insured depository institutions 
not excluded under clause (ii)(IV) of section 11(a)(1)(B) of 
the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)(B)), as 
added by subsection (a) of this section; and
(3) shares, deposits, or accounts at insured credit unions.
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