H.R. 4551 — Employee Paycheck and Small Business Protection Act

This section establishes programs administered by the Federal Deposit Insurance Corporation (FDIC) and National Credit Union Administration (NCUA) to fully insure covered transaction accounts up to $100 million in net deposits or shares per depositor or member per insured depository institution or credit union, excluding such amounts from standard $250,000 insurance calculations. A covered transaction account is a non-interest-bearing or low-interest deposit, share, or account held by a business, nonprofit, municipality, or similar organization and used predominantly for transactional purposes (e.g., payroll and vendor payments). The programs apply to such accounts upon issuance of a final implementing rule; additionally, the FDIC and NCUA must begin collecting and analyzing data from institutions within 90 days of enactment to establish eligibility and insurance amount requirements, considering safety and soundness, financial system stability, and competition (including for minority, rural, and community development institutions).

This section establishes a Temporary Transaction Account Guarantee Program for insured depository institutions under the Federal Deposit Insurance Act and a parallel program for insured credit unions under the Federal Credit Union Act. (As background, these programs authorize the FDIC and NCUA, respectively, to fully insure—beyond the standard $250,000 deposit insurance limit—the net amount in covered transaction accounts, defined as non-interest-bearing accounts or those paying interest materially below market rates (i.e., typically checking accounts), for an initial period of up to 180 days, to prevent bank or credit union runs during financial crises.) Under both programs, implementation requires a two-thirds vote by the relevant agency board (FDIC Board of Directors or NCUA Board), a two-thirds vote by the Federal Reserve Board of Governors, and a determination by the Treasury Secretary (in consultation with the President) that failure to act would seriously harm U.S. financial stability or economic conditions; insolvent institutions are ineligible; and funding may come from participant assessments or the relevant insurance fund (Deposit Insurance Fund or National Credit Union Share Insurance Fund). The programs may be extended once for an additional 90 days (to 270 days total) upon similar two-thirds votes, agency recommendations, a Treasury report to Congress, and, for termination avoidance beyond 270 days, a congressional joint resolution of approval using expedited procedures; the FDIC chairperson, Fed chair, and Treasury Secretary must testify before congressional banking committees within 45 days of implementation, and GAO must report to Congress within 90 days.