The House Financial Services Committee’s November 18, 2025, hearing on deposit insurance reform marked the next stage of congressional review of proposed changes to federal deposit insurance reform, following the Senate Banking Committee’s hearings in September. Following the foundation established in earlier analysis, the House session chose not to introduce new reform categories. Instead, it sharpened the focus on several recurring themes that are now driving policy choices.
Why The House Hearing Matters
Rather than debating whether reform is needed, the House session marked a clear shift toward discussing the structure of potential changes. Chairman French Hill set the tone by emphasizing that “the House Financial Services Committee has been and will continue to be taking an approach that is thoughtful, deliberative, and data-driven.”
Members highlighted recurring concerns about data gaps, depositor fairness, and the speed of modern deposit movement. As Rep. Andy Barr noted: “Members on this committee did not rush to enact legislation that might have resulted in unintended consequences, but rather took the time to examine potential reforms, and today’s hearing is a result of this education.”
The hearing served to refine, rather than expand, the key issues that policymakers are working through as they consider next steps.
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1
Limited Visibility into Uninsured Deposits
House members repeatedly emphasized incomplete reporting of uninsured deposits and the need for more granularity in deposit data. Chairman Hill detailed the problem: “The FDIC call report lumps together individuals, business partnerships, and corporations when banks report transaction and non-transaction accounts, and then further lumps all of those together for reporting of insured versus uninsured deposits. So there’s ambiguity between interest-bearing and non-interest-bearing account classifications.”
When asked directly whether sufficient publicly available data exists to justify significant changes, community banker Jill Castilla replied simply: “No,” adding later that “we really haven’t seen” adequate data. -
2
Fairness And Cost Pressures for Smaller Institutions
Discussion then focused on uneven support for certain banks during the 2023 regional bank crisis, competitive challenges for community banks, and moral hazard concerns. The hearing record shows persistent concern that broad coverage expansions could create cross-subsidies or competitive distortions that disproportionately affect smaller institutions.
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3
Targeted Coverage for Business Operating Accounts
Members and witnesses pointed to operating and payroll accounts as the most practical area for potential adjustment. James Ryan of Old National Bank made the case for precision: “A solution such as the Main Street Depositor Protection Act introduced by Senators Hagerty and Alsobrooks is narrow by design, targeting FDIC coverage for non-interest-bearing accounts used for payroll, payables, and working capital… This reform is about protecting paychecks and critical payment systems, not shielding banks.”
Castilla also raised a concern about proposals targeting only non-interest-bearing accounts: “You’re immediately shifting a business from likely being an interest-bearing account with reciprocal deposits… to now not earning any interest on their account, and they have 10 million dollars plus in that account, and mechanically it doesn’t really work any different. They have the same amount of coverage.” -
4
Recognition Of Private-Sector Tools
Lawmakers acknowledged that reciprocal deposits and cash sweep networks already extend access to expanded deposit insurance coverage within existing rules. Castilla noted that “market tools extend protection without burdening the FDIC or taxpayers” and emphasized that “collateralization, federal home loan bank letters of credit, and reciprocal deposits deliver pool protection… while embedding guardrails that limit access by troubled institutions.”
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5
Restoring Faster Emergency Authority
Broad support emerged for temporary crisis-response tools that federal regulators could invoke more quickly than under the current framework. Chris Furlow of the Texas Bankers Association, representing a coalition of seven state banking associations, outlined the priority: “Our first step, an emergency transaction account guarantee or ETAG capability. Deposit insurance must be a prophylaxis against bank runs, not a reactionary facility.”
The Five Core Issues
Legislative Proposals in Play
Several bills now before Congress reflect the themes raised during the hearing:
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The Main Street Depositor Protection Act (S. 2999), introduced by Senators Angela Alsobrooks and Bill Hagerty, would raise FDIC insurance limits to as much as $10 million for non-interest-bearing transaction accounts at banks with assets under $250 billion. While many questions remain, this proposal aligns directly with the hearing’s focus on targeted coverage for business operating accounts.
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The Community Bank Deposit Access Act (H.R. 5317) takes a different approach, focusing on regulatory treatment rather than coverage limits. Advanced through the House Financial Services Committee by a 48 to 2 vote, the bill updates the classification of certain custodial deposits in Section 29 of the Federal Deposit Insurance Act.
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The Keeping Deposits Local Act (H.R. 3234) would expand access to reciprocal deposit networks for community banks, reinforcing the private-sector tools that witnesses highlighted as already effective under existing rules.
Together, these proposals signal a broader effort to reduce systemic risk by updating the FDIC deposit insurance policy, mitigating the impact of future bank failures, and increasing regulatory flexibility.
Closing Perspective
The hearing reinforced the same five issues identified in earlier analysis while adding clarity on how members are evaluating next steps. The record shows a committee that is serious about reform but determined to proceed methodically.
Several signals point to the likely sequencing. Updated requirements to provide more granular data on uninsured deposit accounts may come first, given Chairman Hill’s detailed questioning about call report limitations and Acting FDIC Chair Travis Hill’s acknowledgment of data gaps. Next, emergency authority, framed by multiple witnesses as a necessary first step before deliberate reform, appears to have gained traction with members and could seek to mitigate some deposit limit concerns. In terms of changes to insurance limits, further refinement of proposals targeting operating-account coverage is likely to receive the most attention as a discrete category that could be addressed without the complexity and cost of universal increases.
Chairman Hill closed by noting that members have until December 23 to submit written questions, with responses from witnesses expected. Expect continued hearings, discussion drafts, and data-gathering efforts in early 2026 before any significant legislative action.