Call To Action: Oppose S. 3637 – TAG Extension
During the TARP era, the FDIC used emergency powers to extend unlimited deposit insurance coverage to noninterest bearing accounts at banks. This was necessary to maintain confidence in the banking sector which was in crisis. During the Dodd-Frank Act, Congress temporarily authorized the FDIC to continue this coverage, and expanded the program to include credit unions as well through the NCUSIF. This program, called the Transaction Account Guarantee Program (TAG), expires at the end of the year.
CUNA opposes the extension of the TAG program because it is risky, unnecessary, has not proven to inspire additional bank business lending and there are better policy options available to Congress, namely the Credit Union Small Business Jobs Act.
Key Message Points
- Congress should end bank bailouts and handouts. Since TAG is no longer necessary, continuing the program is a giveaway to the banks, providing a taxpayer-backed guarantee to over a trillion dollars of large depositor deposits.
- The banks are flush with liquidity but are not lending. During the financial crisis, small bank small business lending contracted 15% while credit union small business lending expanded 45%. This program was not successful in encouraging banks to lend to small businesses.
- There are better options available to Congress: small businesses need banks and credit unions to provide access to credit. If Congress decides to continue to provide taxpayer backed insurance over large deposits, then Congress should also permit experienced, well-managed credit unions to continue to lend to small businesses by enacting S. 2231, the Credit Union Small Business Jobs Act.
- Vote NO on S. 3637
We need credit union board members, executive, employees and members to:
- Email Senators using our Grassroots Action Center
- Call Senators at 202-224-3121