WASHINGTON (Reuters) - U.S. President Barack Obama on Monday proposed increasing the borrowing authority of the Federal Deposit Insurance Corp with the Treasury Department to $100 billion from the current $30 billion.
With an expected increase in bank failures, the authority would give the FDIC the ability to finance expenses for resolving failed FDIC-insured institutions, including guaranteeing up to $250,000 per depositor.
The increase also would give the agency the flexibility to lower premiums charged to banks for FDIC insurance coverage at a time when struggling banks can least afford to pay it.
In the meantime the U.S. Congress is considering legislation aimed giving the FDIC a similar increase but lawmakers also want to give the agency temporary borrowing ability for up to $500 billion in the event of an emergency.
Reporting by John Poirier and Kim Dixon; Editing by Neil Stempleman