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FBN's Peter Barnes on community banks lobbying Congress to extend a program that provides federal guarantees for more than $1 trillion in larger bank ...
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-- from that throughout the -- business exclusive now on community banks lobbying congress to extend -- program providing federal guarantees for more than a trillion dollars.
In larger bank accounts -- bonds joins us from DC with this exclusive.
Why is a self importance of the community banks -- Well there are a little bit moody to.
There were.
President and -- -- help but you're gonna help but well well I play well attended and I.
Well that's.
-- that let me get to this story here.
They're worried about the possible risks -- the US economy and the financial system like the European debt crisis for example so they want congress to allow the FDIC to continue this program which was started in the 2008 financial crisis.
For another five years to give big depositors confidence that their deposits will be safe.
And then they will keep them at a bank.
It's called the transaction account guarantee program it's scheduled to expire at the end of this year.
It covers deposits in excess of 250000.
Dollars and mainly non interest bearing checking accounts more than 700000.
Of them.
Mainly for business says the program covers get this.
One point two trillion dollars in deposits right now.
About 15%.
Of total US bank deposits.
And the banks actually pay for the cost of this insurance would billions in -- premiums.
That they pay HE each year into the FDIC's deposit insurance program.
But smaller banks in particular rely.
On these big deposits to help them finance their lending and other activities and they say that if customers pulled their money.
Because this tag program expires bank lending -- supper especially to small business.
So much of our deposits.
250000.
Miles that if they do eliminate this program.
I believe that deposits will leave and -- the 24% loan growth that we've been able to -- -- -- Be able to get back.
Just won't be able to be continued.
Now the Independent Community Bankers Of America a trade association is leading the charge to convince congress to extend the tag program starting with 14100.
Letters its members sent the lawmakers on Capitol Hill earlier this month they're gonna -- the odds and Peter congress actually proving mr.
A lot.
Well banking industry official says that the initial reaction on -- capital hill has been very good but bankers have to fight the perception that they might be looking for more taxpayer bailouts down the road.
And so they're they're screaming -- that this program is bank industry funded with all these fees to the FDIC.
