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Congress should include credit unions while considering proposals to provide deposit insurance coverage for business transactional accounts at financial institutions, CUNA wrote to the Senate Banking, Housing, and Urban Affairs Committee Thursday. The committee conducted a hearing on deposit insurance reform after recent bank failures.
“Should Congress direct the bank’s Deposit Insurance Fund to provide higher or unlimited coverage for such accounts, the Committee should provide reciprocal instructions pertaining to the National Credit Union Share Insurance Fund,” the letter reads.
“Credit unions have many members with accounts for their small and medium sized businesses. Furthermore, small businesses are more frequently reaching out to their community credit union for lending. These member businesses enjoy the service and stability of doing business with credit unions,” it adds. “Credit unions stand ready to serve small businesses and reform to deposit insurance accounts should reflect this fact. It stands to reason that their transactional business accounts should receive the same coverage as those insured by the FDIC.”
CUNA also called for privately insured credit unions to be eligible for the Federal Reserve’s Bank Term Funding Program to access additional liquidity.