Foggy weather in the Washington, D.C., area Monday resulted in canceled flights and a delay in a scheduled Senate vote on a procedural motion that could affect whether the Transaction Account Guarantee, or TAG, program will be extended for another two years.
The motion, which would require 60 votes to pass, would end debate on the controversial issue and allow the Senate to take further action on the proposal. The vote is now scheduled to take place Tuesday.
The bill would extend unlimited deposit insurance coverage for noninterest bearing transaction accounts. Without an extension, the insurance coverage limit would revert to $250,000 at the end of the year.
TAG was created four years ago as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Approximately $1.4 trillion is deposited in noninterest-bearing transaction bank accounts that many state and local governments, large corporations, medium and small businesses, universities, charities and hospitals use to meet payroll and operational expenses.
Supporters of the extension include the American Bankers Association, American Land Title Association, Conference of State Bank Supervisors, Independent Community Bankers of America, International Franchise Association, National Association of Realtors, National Grocers Association, National League of Cities and the National Association of State Treasurers, or NAST.
NAST President and Nevada State Treasurer Kate Marshall said in a statement that TAG helps ensure the safety of public funds.
"While NAST understands that some of the nation's largest banks may oppose its continuation, we believe it would be imprudent to abruptly terminate this program without providing a proper time period for transition," Marshall says.
Maryland State Treasurer Nancy Kopp also says in the NAST statement that TAG shouldn't be abruptly eliminated from the U.S. banking system.
"A phaseout of the program will reduce the current volatility of the financial markets and provide ample time for state and local governments to consider safe alternative placement for taxpayer funds," Kopp says.
The Credit Union National Association, or CUNA, opposes the extension.
What do you think? Is this needed?
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