S 2999119th CongressIn Committee

Main Street Depositor Protection Act

Introduced: Oct 9, 2025

Sponsor: Sen. Hagerty, Bill [R-TN] (R-Tennessee)

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Main Street Depositor Protection Act would expand federal deposit insurance to cover noninterest-bearing transaction accounts (NBTA) at insured banks and credit unions. For banks, NBTA balances could be insured up to $10,000,000 per depositor (aggregated across all NBTA accounts at subsidiaries of the same holding company), in addition to the existing standard deposit insurance cap. A parallel expansion would apply to insured credit unions, with NBTA balances also insured up to $10,000,000 per member (aggregated across NBTA accounts). The bill sets limits and exclusions, defines NBTA precisely (no interest earned or paid, withdrawals allowed by common payment methods, and no required advance notice of withdrawals), and imposes a 10-year phased-in plan toward full insurance coverage. It also provides transitional relief from certain insurance assessments for smaller institutions and directs regulators to prevent evasion of the expanded coverage. The act is named the “Main Street Depositor Protection Act” and was introduced in the Senate.

Key Points

1NBTA insurance expansion: The bill allows NBTA deposits to be insured up to $10,000,000 per depositor, in aggregate across NBTA accounts at insured depository institutions, in addition to the standard maximum insurance amount for other deposits.
2Aggregation and exclusions: For NBTA, the FDIC must aggregate NBTA deposits across all insured institutions that are subsidiaries of the same depository holding company. The bill excludes certain entities (e.g., foreign banks and certain branches) from NBTA insurance.
3Definitions: NBTA is defined as a deposit or account where no interest is earned or paid, withdrawals can be made by checks or electronic transfers, and the institution does not reserve the right to require advance withdrawal notice.
4Credit unions: The same NBTA insurance concept applies to insured credit unions, with NBTA deposits insured up to $10,000,000 per member (aggregated across NBTA accounts), not to be counted against other insured amounts.
5Transition plan and timeline: There is a 10-year transition period to phase in NBTA coverage to 100 percent, with FDIC and NCUA boards required to publish a plan within 1 year and implement gradual increases ending at full coverage after 10 years.
6Regulatory framework and anti-evasion: FDIC and NCUA may issue regulations to prevent evasion of the expanded coverage and to ensure proper implementation.
7Transitional relief for small institutions: During the transition, insured depositories with assets of $10 billion or less are not required to pay certain special assessments or increases in assessments solely to offset reserve ratio impacts from extending NBTA insurance.
8Status and sponsorship: The bill is introduced in the Senate as S. 2999 on October 9, 2025, sponsored by Senator Hagerty (joined by Senator Alsobrooks).

Impact Areas

Primary group/area affected- Depositors with large balances in noninterest-bearing transaction accounts (including businesses managing payroll or cash flows) who would benefit from higher insurance coverage (up to $10 million per depositor per depository institution, aggregated across subsidiaries).- Members of insured credit unions who maintain NBTA accounts, with insurance capped at $10 million per member (aggregated across NBTA accounts).Secondary group/area affected- Banks and bank holding companies: Regulators will implement new rules, monitor the expanded coverage, and consider capital and funding implications for the deposit insurance funds.- Credit unions and the National Credit Union Administration: Similar regulatory and supervisory adjustments to administer NBTA insurance within the NCUSIF framework.Additional impacts- Insurance funds and taxpayer risk: The expansion increases the potential exposure of the FDIC and NCUSIF, prompting a phased-in approach and temporary relief from certain assessments for smaller institutions to manage funding and stability during transition.- Market and behavioral effects: Depositors may reallocate funds toward NBTA accounts to maximize insurance coverage (subject to NBTA’s non-interest-bearing nature), potentially affecting the composition of bank deposits.- Exclusions and foreign entities: Depositors at foreign banks or certain foreign bank branches would not be covered for NBTA under this act, continuing existing limitations on which deposits receive NBTA insurance.- Compliance and anti-evasion: Banks and credit unions would face new regulatory requirements to prevent evasion of the insurance limits (e.g., structuring deposits to avoid aggregation).Noninterest-bearing transaction account (NBTA): An account where no interest is earned or paid, withdrawals are possible via typical payment methods (checks, transfers, etc.), and the institution cannot require advance notice before withdrawal.Aggregation: For purposes of NBTA insurance, deposits across multiple accounts at subsidiaries of a single bank holding company (or across accounts at insured credit unions in the same ecosystem) are added together to determine total insured amount for that depositor.Standard maximum deposit insurance amount (SMDIA): The usual cap on deposit insurance for standard deposits outside NBTA, traditionally $250,000 per depositor per insured institution, though the statute references the current standard as determined under the FDIC Act. The NBTA portion is added on top of this amount (up to the $10 million NBTA cap).

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