Employee Paycheck and Small Business Protection Act

This bill amends the Federal Deposit Insurance Act and the Federal Credit Union Act to create a permanent program that fully insures business payment accounts up to $100,000,000 per depositor per institution, and establishes a temporary program to guarantee certain uninsured transaction accounts during a financial crisis.

Sec. 2, Expanded insurance coverage for business payment accounts: The FDIC and NCUA must each create a program to fully insure deposits in "covered transaction accounts" (non-interest or below-market-rate accounts used by businesses, non-profits, or municipalities for payroll, vendor payments, etc.) up to $100,000,000 per depositor per institution. This insurance is separate from standard deposit insurance. The agencies must collect data, consider safety, stability, competition, and payment obligations, and issue proposed rules within 18 months and final rules within 30 months. If a final rule is missed, agency heads must testify and report, and the GAO must review. Existing insurance fund restoration plans are extended by 8 years after the final rule takes effect.

Sec. 3, Temporary Transaction Account Guarantee Program: The FDIC must create a framework for a program that fully insures certain uninsured transaction accounts for up to 180 days, but can only implement it if the Treasury Secretary (with the President) determines failure would harm financial stability, based on a two-thirds vote recommendation from the FDIC Board and Federal Reserve Board. Insolvent institutions are ineligible. The program can be funded by assessments on participating institutions and the Deposit Insurance Fund. It can be extended 90 days under similar conditions, and must terminate after 270 days unless Congress approves an extension. The NCUA may establish a similar program for credit unions under the same conditions. Both programs require testimony and a GAO report after implementation.