First Independence Bank CEO Kenneth Kelly Testifies Before Senate on Deposit Insurance Reform

September 22, 2025

Kenneth Kelly, CEO of Detroit-based First Independence Bank and chair-elect of the American Bankers Association, recently testified before the U.S. Senate Banking Committee on modernizing deposit insurance. Representing the ABA, Kelly presented ten recommendations from a task force he chaired that aims to update the system created in 1933 and tested by recent bank failures like Silicon Valley Bank in 2023. The proposals focus on making deposit insurance more transparent, flexible during crises, and equitable across different-sized institutions, while maintaining its role as a stabilizing force in the U.S. financial system.

Who is affected

Bank customers, including individuals, businesses, nonprofits, and municipalities
Banks of all sizes, particularly community banks and smaller institutions
Black-owned banks and historically underserved communities
The broader financial system and economy
Detroit residents who rely on community banks like First Independence Bank

What action is being taken

The ABA has convened over 300 member banks to debate reforms and formed a task force chaired by Kelly
Kelly is presenting testimony and recommendations to the Senate Banking Committee
The ABA is advocating for giving the FDIC standing authority to back deposits during crises
The ABA is calling for increased transparency in how the FDIC determines systemic risk and calculates assessments
The organization is requesting restoration of tax deductibility for bank assessments

Why it matters

The deposit insurance system provides stability and confidence in the banking system
Recent bank failures in 2023 revealed potential weaknesses in the current framework
Technology now allows bank runs to occur much faster than when the system was created
Reforms could affect how future bank failures are handled and how deposits are protected
Changes would impact both large financial institutions and community banks serving specific neighborhoods
First Independence Bank represents an important Black-owned financial institution that serves historically underserved communities

What's next

Lawmakers on the Banking Committee are expected to continue discussions in the coming months
Congress and regulators will consider which recommendations to implement
Some recommendations would require congressional action while others could be adopted directly by the FDIC
The FDIC may collect data to better understand tradeoffs involved in potentially increasing the $250,000 insurance cap

Read full article from source: Michigan Chronicle