The chairman of the House Financial Services Committee has told lawmakers that a federal bank regulator will seek authority to increase the deposit insurance limit to a level above its current $100,000, said a source familiar with the chairman's thinking.
Representative Barney Frank, a Massachusetts Democrat, has told lawmakers of his committee that Sheila Bair, chairman of the Federal Deposit Insurance Corporation, will soon request the authority to boost the level of insured deposits, the source said.
Presidential nominees Barack Obama and John McCain both proposed an increase in federal deposit insurance to $250,000 from $100,000 as a way to broaden support for the bank asset bailout bill rejected on Monday by the U.S. House of Representatives.
Those efforts come a day after the House rejected a $700 billion Wall Street bailout, sending stock markets plummeting.
The FDIC insures up to $100,000 per deposit account and up to $250,000 per retirement account at insured banks. The agency's insurance fund stood at about $45.2 billion at the end of the second quarter and has taken a hit from bank failures in recent months.
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