Raising the FDIC Limit Risks Repeating the S&L Crisis

Jeb Hensarling and Michael Solon Government insurance programs are often tied to budget-busting bailouts and economic crises. But political pressures are again driving their expansion—and when these programs fail, taxpayers are left with the bill. , Washington’s latest bad idea is the Main Street Depositor Protection Act, offered by Sens.

Bill Hagerty (R., Tenn.) and Angela Alsobrooks (D., Md.) and endorsed by Treasury Secretary Scott Bessent. The bill would increase the Federal Deposit Insurance Corp. limit on all non-interest-bearing accounts from $250,000 to $10 million.

But the change would apply only to midsize and community banks—not to global, systemically important banks. Smaller banks wouldn’t have to pay the estimated $42 billion for the increased insurance; the premium increases