Employee Paycheck and Small Business Protection Act

This bill proposes significant changes to federal deposit and share insurance, aiming to enhance financial stability and ensure businesses can meet payment obligations. It mandates the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) to establish programs that fully insure "covered transaction accounts" up to $100,000,000 per depositor or member at insured institutions. These accounts are defined as those maintained by businesses, non-profits, or municipalities, primarily used for transactions like payroll and vendor payments, and are either non-interest bearing or pay materially low interest rates. To implement this expanded coverage, the FDIC and NCUA must collect data, analyze factors such as financial stability, market competition, and the ability of account holders to meet payment obligations, and then publish reports within 18 months. They are also required to issue proposed rules within 18 months and final rules within 30 months, jointly determining the definitions and maximum insurance amounts for these expanded coverages. Failure to meet these rulemaking deadlines triggers mandatory testimony to Congress and reports from the agencies and the Government Accountability Office (GAO). Additionally, the legislation authorizes a temporary transaction account guarantee program , allowing the FDIC and NCUA to fully insure covered transaction accounts for up to 180 days during times of severe financial instability. This temporary program can only be implemented if the Secretary of the Treasury, based on recommendations from the FDIC/NCUA and the Federal Reserve, determines that failure to do so would have serious adverse effects on the U.S. financial system or economy. Funding for this program would come from assessments on participating institutions and existing insurance funds. The temporary program can be extended for an additional 90 days under similar conditions, requiring a report to Congress. It automatically terminates after 270 days unless Congress approves an extension through a joint resolution. The bill also extends the restoration plans for the Deposit Insurance Fund and the National Credit Union Share Insurance Fund by eight years, starting from the effective date of the final rules for expanded coverage.