U.S. Senator Joe Manchin (D-W.Va.) voted today to extend the Transaction Account Guarantee program, an effort that has widespread support from West Virginia's community banks as a proven way to encourage lending. The program is fully funded by the member banks and would not cost taxpayers a single penny.
The Transaction Account Guarantee program offers unlimited deposit insurance coverage on non-interest-bearing deposits like checking accounts. The previous limit was $250,000 per account and Senator Manchin's vote today would extend the program for another two years. The Senate agreed to move forward with the bill 76-20 and the bill is expected to be considered for final passage later this week.
"I've heard from so many community banks in our state that this measure is absolutely vital for continued lending," Senator Manchin said. "With our economy still in a fragile state of recovery, I believe we must continue to support the community institutions that are helping small businesses create and keep jobs. This measure won't cost the taxpayers a penny and it will expand lending -- and that makes all the sense in the world.
"When people and businesses deposit their money at a community bank, those institutions turn around and invest it in their hometowns. Those investments make for vibrant communities, and I am committed to making sure that they thrive."
"ICBA thanks Senator Manchin for his support of this critical bank-funded deposit coverage," said Jeffrey L. Gerhart, chairman of the Independent Community Bankers of America. "Extending the TAG program is essential for keeping business and municipal accounts secure, and preventing excessive deposit concentration in the largest and riskiest financial institutions. Further, the coverage is fully paid for by the nation's banks -- not taxpayers."
In West Virginia, 93 percent of community banks have TAG accounts. The state has 58 chartered institutions with 1,409 TAG accounts totaling $1 billion in deposits.