WASHINGTON (AP) — The Senate is considering a bill to extend for two years a Great Recession program that provides open-ended government insurance backing for certain non-interest-bearing bank accounts.
The 76-20 vote to take up a bill extending the Transaction Account Guarantee program was a victory for community banks. These banks say ending the insurance program could lead to a flight of money from smaller, more vulnerable, banks to the too-big-to-fail megabanks.
Conservative groups, and credit unions seeking greater equality with banks, oppose the legislation. They say the program put in place in 2008 to stop a possible run on banks has outlived its usefulness.
Their position may prevail in the end. If the bill clears the Senate, it faces opposition in the Republican-controlled House.