Barr Introduces E-TAG Act to Protect Bank Depositors During Financial Crises

Washington, D.C.- Today, U.S. Congressman Andy Barr (R-KY-06), Chairman of the House Financial Services Subcommittee on Financial Institutions, introduced the Emergency Transaction Account Guarantee (E-TAG) Act. Barr's proposal establishes an emergency program allowing the U.S. Department of the Treasury to temporarily provide unlimited deposit insurance on transaction accounts during periods of severe financial stress.

Under the legislation, the Treasury Secretary would have the authority to quickly invoke expanded deposit insurance coverage when necessary to stabilize the financial system and prevent bank runs during times of economic uncertainty. This will be accomplished by the Treasury Sec. working in coordination with the FDIC and NCUA.

"We need the American people to have the utmost confidence in our banking system, especially during times of crisis," said Chairman Barr. "The E-TAG Act gives Treasury the ability to act quickly in a crisis to guarantee the security of bank accounts, prevent bank runs, and stabilize financial institutions before a crisis spreads. This is a smart, targeted tool that strengthens the safety and soundness of our financial system and protects American workers, small businesses, and local banks."

During the Great Financial Crisis of 2008, a similar Transaction Account Guarantee (TAG) program was deployed and proved crucial in bolstering confidence in the banking sector at the height of the financial panic. Barr's legislation ensures federal regulators have the tools and flexibility needed to respond quickly to future financial emergencies.

The E-TAG Act allows the Treasury Secretary to determine when emergency coverage is necessary and streamlines the process so regulators can respond faster in times of financial stress. The legislation is designed to ensure businesses can continue making payroll and meeting financial obligations even during periods of financial market disruption.

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