Sep 30, 2008 6:30 pm US/Eastern
FDIC Requests Hike In $100,000 Insurance Cap
WASHINGTON (AP) ―
The agency that protects U.S. bank deposits is asking Congress for temporary authority to boost deposit insurance limits as the government works to contain the financial crisis.
Federal Deposit Insurance Corp. Chairwoman Sheila Bair on Tuesday asked for unspecified authority to raise insurance limits on the very day that both presidential candidates recommended the move as a way to help prospects for the failed $700 billion financial bailout bill.
Bair said the overwhelming majority of banks remain sound but that an increase in the cap would help ease the crisis of confidence in the banking system.
Earlier Tuesday, Sens. John McCain and Barack Obama pushed the idea of an increase in the insurance limit to $250,000.
If the FDIC's request is approved, the move may reassure nervous Americans -- and hence their elected representatives at the Capitol -- that the legislation would shore up the faltering economy.
Republican House aides said the FDIC proposal might attract some conservatives who want to help small business owners and avert runs on banks by customers fearful of losing their savings.
House Republican leader John Boehner welcomed McCain's and Obama's embrace of a higher insurance cap, saying congressional Democrats had rejected it Saturday.
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