Statement of Senator Mike Enzi
Senate Banking Committee Markup of: S. 1562, the “Safe and Fair Deposit Insurance Act of 2005"for purposes of reporting the bill to the Senate Budget Committee as Title II for reconciliation purposes
October 18, 2005
The current FDIC system is in desperate need of improvement. Over the past 20 years, deposit insurance has been eroded by inflation and growing deposits. As it stands today, the Bank Insurance Fund is dangerously close to falling below safe levels. We need to enact this important legislation before that happens. We need to give the FDIC the statutory authority to make the deposit insurance fund healthy again, and in a way that accounts for the riskiness of each institution it insures.
This bill is very important to America’s rural financial institutions. In states like Wyoming, people have limited choices where they can safely deposit their hard-earned money. They usually depend on a local bank or credit union. These financial institutions, in turn, lend money to local businesses and invest in their communities. This relationship benefits the customer, the institution, and the community. However, it can only work if there is a system in place that allows our small banks to operate with the confidence of knowing that this money will be safe in an unlikely case of a crisis. I am pleased that we are making progress on a bill that will preserve this relationship.
It is also important that this bill will help the committee meet its cost-saving obligations under the instructions for budget reconciliation. The Congressional Budget Office estimates that S. 1562 will save the federal government about $300 million over five years, and $1.5 billion over 10 years. Over this time, we will be funding programs to recover from the devastation wrought by Hurricanes Katrina and Rita, and funding military operations overseas. It is good that this bill will save money that could be used to advance these vital efforts.
Once again, I would like to thank Senator Hagel, Senator Allard, and Senator Johnson for joining me in support of this bill. I also thank Chairman Shelby for working with us to iron out the details of this bill and bringing everyone to the table.
I understand there may be some outstanding issues and differences between the House and Senate versions of this bill that may not have been fully addressed before the committee markup. I am confident that these issues can be resolved in conference and am eager to see a final bill enacted into law with all deliberate speed.