May 6, 2025

The Honorable French Hill                
Chair
Committee on Financial Services
U.S. House of Representatives
2129 Rayburn House Office Building
Washington, D.C. 20515

The Honorable Maxine Waters 
Ranking Member 
Committee on Financial Services 
U.S. House of Representatives 
4340 O'Neil House Building 
Washington, D.C. 20515

Re: Opposition to Deposit Insurance Cap Increases

Dear Chair Hill, Ranking Member Waters, and Members of the House Financial Services Committee,

We, the undersigned organizations, and individuals, write to express our opposition to legislative or regulatory action that would increase the deposit insurance cap or fully insure all deposits at insured depository institutions on a temporary or permanent basis. Changes to the deposit insurance framework would increase moral hazard, propagate a cycle of risky behavior that forces taxpayers to perennially bail out depositors, and subject insured depository institutions to more government control.

Last week, former Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra called on Congress to pass legislation expanding the government’s role in deposit insurance, including for business payment accounts.1 These proposals would inherently increase risk for taxpayers, who would ultimately be on the hook for insuring deposits.

There are practical and philosophical problems with raising the deposit insurance limit, even for business accounts. For one, it increases the difficulty of determining the exact nature of a “business” or “payment” account, terms the Federal Deposit Insurance Corporation (FDIC) has not even attempted to define. This leaves the door open to a vague definition, which effectively raises the limit for everyone. Moreover, creating a separate business account definition opens the door to abuse without significant regulatory constraints, requiring financial institutions to endure additional recordkeeping and supervisory scrutiny to prove an account meets the definition.

We are broadly concerned that expanding government deposit insurance is a Trojan Horse for increased regulation on the banking sector, morphing financial institutions into government-sponsored enterprises like Fannie Mae and Freddie Mac, as proponents of the idea have repeatedly called for.

Ultimately, we believe expanding the federal government’s role in deposit insurance is unnecessary and costly to taxpayers. Raising the deposit insurance limit, including for business payment accounts, would directly contradict laudable attempts to deregulate the financial sector and protect taxpayers.

Sincerely, 

David Williams 
President, Taxpayers Protection Alliance 

Phil Kerpen 
President, American Commitment 

Tirzah Duren 
President, American Consumer Institute 

Brent Gardner 
Chief Government Affairs Officer & Senior Vice President, Americans for Prosperity 

Grover Norquist 
President, Americans for Tax Reform 

Ryan Walker 
Executive Vice President, Heritage Action for America 

Jeffrey Mazzella 
President, Center for Individual Freedom 

Brandon Arnold 
Executive Vice President, National Taxpayers Union 

Iain Murray 
Vice President, Competitive Enterprise Institute 

Gordon Gray 
Executive Director, Pinpoint Policy Institute 

Gerard Scimeca 
Chairman, Consumer Action for a Strong Economy 

James Erwin 
Interim Director, Shareholder Advocacy Forum 

Tom Schatz 
President, Council for Citizens Against Government Waste

Karen Kerrigan 
President & CEO, Small Business & Entrepreneurship Council