November 17, 2025

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

The Honorable Maxine Waters
Ranking Member
Committee on Financial Services
U.S. House of Representatives
4340 O'Neill House Building
Washington DC 20024

Re: Opposition to Increasing FDIC Deposit Insurance Limits

Dear Chair Hill and Ranking Member Waters,

We, the undersigned organizations, representing millions of taxpayers and consumers nationwide, write to express our strong opposition to increasing the Federal Deposit Insurance Corporation (FDIC) deposit insurance limit for non-interest-bearing transaction accounts. While framed as a measure to stabilize financial institutions, such proposals – including existing legislation that would increase the limit to $10 million for all non-interest-bearing accounts – would impose significant and unjustifiable costs on these same institutions, with downstream effects borne by American consumers and taxpayers. Ahead of this week’s hearing on the issue, we urge members of the committee to steadfastly oppose any such effort and to highlight the dangers.

According to recent estimates prepared by the Taxpayers Protection Alliance (TPA), raising the deposit insurance cap to $10 million for all non-interest-bearing transaction accounts would create exorbitant costs. Such a move would necessitate a one-time special assessment of approximately $42 billion to recapitalize the Deposit Insurance Fund (DIF) to its statutory minimum. Beyond this extraordinary burden, the bill’s language allows for a ten-year window to rebuild the DIF, while the new limit would be implemented immediately. This drastically increases the risk of a costly bailout.

Previous analyses estimated that even proposals to increase the FDIC limit for only business accounts would increase FDIC premiums by nearly two-thirds (64 percent) over the first five years. The economic consequences are unavoidable. Financial institutions will assuredly pass these costs on to consumers in the form of higher service fees, reduced credit availability, and less favorable terms for small businesses. Far from providing stability, raising the limit risks distorting the financial marketplace by privileging large uninsured corporate accounts at the expense of individual depositors and community banks.

Moreover, such a drastic expansion of federal insurance coverage fundamentally alters the risk calculus of depositors and financial institutions, embedding greater moral hazard into the system. The statutory role of the FDIC is to protect ordinary depositors, not to subsidize corporate entities with multimilliondollar transaction accounts. This added moral hazard will more than likely be accompanied by calls for increased regulations and government central planning in the financial services industry. This legislation exceeds the FDIC’s current mandate and imposes extraordinary systemic costs to benefit a narrow subset of account holders. As such, we urge the committee use this hearing as an opportunity clearly articulate the consequences of such a drastic move. The burdens will not be limited to large financial institutions but will fall on the taxpayers and consumers we represent.

We thank the committee for its focus and attention on this crucial issue.

Sincerely,

David Williams
President
Taxpayers Protection Alliance

Phil Kerpen
President
American Commitment

Leah M. Locke
Finance and Insurance Policy Analyst
The American Consumer Institute

Brent Gardner
Chief Government Affairs Officer
Americans for Prosperity

Grover Norquist
President
Americans for Tax Reform

Jeffrey Mazzella
President
Center for Individual Freedom

John Berlau
Director of Finance Policy
Competitive Enterprise Institute

Gerard Scimeca
Chairman
Consumer Action for a Strong Economy (CASE)

Brandon Arnold
Executive Vice President
National Taxpayers Union

Tom Schatz
President
Council for Citizens Against Government Waste

Eric Ventimiglia
Executive Director
Pinpoint Policy Institute