Business Accounts Get $100 Million Deposit Insurance Cap to Protect Payroll and Operations

The “Employee Paycheck and Small Business Protection Act” is a big deal for anyone who manages a company's cash flow, from the local construction firm to the mid-sized tech startup. This bill fundamentally changes how much of a business’s operating money is insured by the government, aiming to keep payroll running even if a bank hits the rocks.

The $100 Million Safety Net

Section 2 of this bill creates a massive, permanent insurance boost specifically for what the bill calls “covered transaction accounts” at both banks (FDIC) and credit unions (NCUA). Think of this as the money a business uses every day to pay the bills, buy supplies, and, most importantly, make payroll. Since these accounts are typically low- or zero-interest, the bill recognizes they are purely operational funds. The new limit? A cool $100,000,000 per depositor, per institution. Critically, this $100 million is in addition to the standard $250,000 consumer insurance limit.

What does this mean in the real world? If you run a manufacturing plant that keeps $5 million in the bank just to make sure 50 employees get paid on Friday, that entire $5 million is now rock-solid insured. Before this, only the first $250,000 was covered, forcing businesses with big operational needs to spread their cash across multiple banks—a huge logistical headache. This change aims to simplify life for the finance managers and ensure that a bank failure doesn't automatically mean a missed payroll for hundreds of workers. Agencies like the FDIC and NCUA have 30 months to finalize the rules, but the clock is ticking now.

The Emergency Button: Full Guarantee

Section 3 sets up a temporary, emergency program that could fully insure these same business accounts, regardless of the cap. This is the government’s “break glass in case of fire” provision. If the economy is on shaky ground and the Treasury Secretary, along with the heads of the FDIC/NCUA and the Federal Reserve, decides that not fully insuring these accounts would cause “serious economic harm,” they can activate the Temporary Transaction Account Guarantee Program.

When activated, every dollar in those covered business accounts is guaranteed for 180 days. This is a powerful tool designed to stop financial panic from turning into a full-blown economic crisis where companies can’t access their cash. However, this power comes with a catch: it grants significant discretionary authority to the executive branch. The decision to pull the trigger on this full guarantee relies on a subjective determination of “serious economic harm.” If activated, the agencies must testify before Congress within 45 days to explain why, and any extension beyond the initial 180 days requires a joint resolution passed by Congress.

Who Pays and What’s the Risk?

While this bill is fantastic news for businesses that rely on large working capital, it doesn't come free. The permanent $100 million guarantee significantly increases the potential liability of the Deposit Insurance Fund (DIF) and the National Credit Union Share Insurance Fund (SIF). These funds are paid for by the banks and credit unions themselves, but ultimately, increased liability means increased risk to the financial system. For the regular person, this is where the cost could eventually show up, as banks may pass on higher insurance premiums to customers.

Another interesting detail: the bill automatically extends any existing plan to restore the insurance funds by an extra 8 years once the final rules are in place. This means the agencies are essentially buying themselves more time to manage the new, much larger risk exposure created by the $100 million cap. This move acknowledges that expanding liability this much is a serious financial undertaking that will take nearly a decade to properly absorb.