To amend the Federal Deposit Insurance Act with respect to municipal deposits.

February 2, 2005

Mr. GILLMOR introduced the following bill; which was referred to the Committee on Financial Services

To amend the Federal Deposit Insurance Act with respect to municipal deposits.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Municipal Deposit Insurance Protection Act of 2005'.

SEC. 2. INCREASED INSURANCE COVERAGE FOR MUNICIPAL DEPOSITS.

Section 11(a)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(2)) is amended--

(1) in subparagraph (A)--

(A) by moving the margins of clauses (i) through (v) 4 ems to the right;

(B) by striking, in the matter following clause (v), `such depositor shall' and all that follows through the period; and

(C) by striking the semicolon at the end of clause (v) and inserting a period;

(2) by striking `(2)(A) Notwithstanding' and all that follows through `a depositor who is--' and inserting the following new paragraph:

`(2) MUNICIPAL DEPOSITORS-

`(A) IN GENERAL- Notwithstanding any limitation in this Act or in any other provision of law relating to the amount of deposit insurance available to any 1 depositor--

`(i) a municipal depositor shall, for the purpose of determining the amount of insured deposits under this subsection, be deemed to be a depositor separate and distinct from any other officer, employee, or agent of the United States or any public unit referred to in subparagraph (E); and

`(ii) except as provided in subparagraph (B), the deposits of a municipal depositor shall be insured in an amount not to exceed the amount referred to in paragraph (1)(B).

`(B) IN-STATE MUNICIPAL DEPOSITORS- In the case of the deposits of an in-State municipal depositor described in clause (ii), (iii), (iv), or (v) of subparagraph (E) at an insured depository institution, such deposits shall be insured in an amount not to exceed the lesser of--

`(i) $2,000,000; or

`(ii) the sum of--

`(I) the amount referred to in paragraph (1)(B); and

`(II) 80 percent of the amount of any deposits in excess of such amount.

`(C) MUNICIPAL DEPOSIT PARITY- No State may deny to insured depository institutions within its jurisdiction the authority to accept deposits insured under this paragraph, or prohibit the making of such deposits in such institutions by any in-State municipal depositor.

`(D) IN-STATE MUNICIPAL DEPOSITOR DEFINED- For purposes of this paragraph, the term `in-State municipal depositor' means a municipal depositor that is located in the same State as the office or branch of the insured depository institution at which the deposits of that depositor are held.

`(E) MUNICIPAL DEPOSITOR- For purposes of this paragraph, the term `municipal depositor' means a depositor that is--';

(3) by striking `(B) The' and inserting the following:

`(F) AUTHORITY TO LIMIT DEPOSITS- The'; and

(4) by striking `depositor referred to in subparagraph (A) of this paragraph' each place such term appears and inserting `municipal depositor'.

END