Senate advances bill extending guarantees for small business bank accounts

TAG was created during the financial crisis, and provides for government guarantees for non-interest-bearing bank accounts used by small companies and municipalities. Companies and local governments holding large amounts of money for a brief period of time use the transaction accounts.

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Extending TAG would keep an estimated $1.4 trillion insured by the government — something banks believe is needed given the continuing economic uncertainty.

“This program provides certainty to businesses at uncertain times,” Sen. Tim JohnsonTim JohnsonOn Wall Street, Dem shake-up puts party at crossroads Regulators fret over FOIA reform bill Senators push back against using guarantee fees to offset spending MORE (D-S.D.) said ahead of the vote Tuesday. “With concerns about the fiscal cliff and the continuing instability in European markets, I believe this is still needed.”

Johnson said the bill has a cost recovery provision, meaning taxpayers wouldn’t be on the hook. He said the bill “is not and never will be a bailout.”

The Senate voted 76-20 to end debate on a motion to proceed to consideration of the bill. The motion to proceed was then approved immediately by unanimous consent. The Senate is expected to continue work on the bill this week.

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