A number of agriculture organizations are urging Congress to prevent the expiration of the FDIC's Transaction Account Guarantee program.
The program provides full insurance coverage for non-interest bearing transaction accounts, but is set to expire at year's end.
Groups that sent out the cautionary letters include the Agricultural Retailers Association, the American Association of Crop Insurers, the National Association of Wheat Growers, National Cattlemen's Beef Association and National Corn Growers Association.
"We are deeply concerned ... and urge the Senate to pass S. 3637, which provides a temporary 2-year extension," the groups wrote in their letters.
The transaction accounts are used by producers and agribusinesses for payroll, as well as lump sum deposits, "which are inherent in the seasonal nature of their business," the letter stated.
The TAG program was enacted during the economic crisis to protect depositors and prevent a sudden withdrawal of deposits that would dislocate the banking system. Some worry that if full TAG insurance coverage expires, farmers and rural businesses would be forced to shift their deposits out of the local banks -- potentially impacting their extension of credit, and hurting the local economy.
Distributed by MCT Information Services
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