Community banks fear return of insurance cap
Big institutions will get an edge, small rivals say
To prevent a possible run on banks at the height of the financial crisis four years ago, Congress expanded government insurance for certain bank deposits to include totals above the usual $250,000 limit. Now that the ceiling is about to be re-imposed, community banks fear they’ll lose customers to bigger banks and want Congress to come to their rescue. They are being opposed by conservative groups, among others, who say that the Transaction Account Guarantee program is no longer needed and discourages the wealthy investing in the economy.