Association Supports Efforts to Strengthen Deposit Insurance for Small Businesses

The MD|DC Credit Union Association recently sent a letter to Senator Angela Alsobrooks, backing her amendment to the National Defense Authorization Act (NDAA), co-sponsored with Senator Bill Hagerty. The proposal would raise deposit insurance coverage for business transaction accounts at community-based financial institutions.

In the letter, the Association asserts that Maryland is home to 580,000 small businesses that employ more than 1 million residents. Many of them rely on credit unions and local banks for essential services. But today's $250,000 insurance cap leaves businesses vulnerable when covering expenses like payroll, utilities, and vendor payments.

"Small businesses struggle under the current deposit insurance ceiling of $250,000 per account, which fails to account for modern business requirements," the Association wrote.

The amendment would boost coverage up to $20 million, giving small businesses more security while ensuring credit unions and banks are treated equally. The Association also emphasized the need to implement the change carefully, since credit union members directly fund the insurance fund.