Summary
Changes the rules for how banks can count certain shared deposits, making it easier for them to manage their money and keep deposits in local communities.
What problem does this solve?
Current banking rules can make it hard for local banks to accept large deposits from customers like towns or businesses. This bill changes those rules to help banks keep more of that money available for local lending.
What does this bill do?
Reference
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Section:
Sec. 2
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Amount of reciprocal deposits that are not considered to be funds obtained by or...
Changes how reciprocal deposits are counted
Creates new tiered limits for how much money from reciprocal deposits is not counted as brokered. The limits are based on a bank's total size, allowing larger amounts for smaller banks.
Modifies the definition of an agent institution
Allows banks with a CAMELS rating of 1, 2, or 3 to qualify as an agent institution. This rating measures a bank's overall health and safety.
Requires a study on reciprocal deposits
Directs the Federal Deposit Insurance Corporation (FDIC) to study how reciprocal deposits have been used since 2018, including during times of financial stress, and report its findings to Congress.
Who does this affect?
- Banks and financial institutions
- Businesses, municipalities, and non-profits with large deposits
- Federal banking regulators
What is the real world impact?
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Supports local banks and communities
Helps community banks accept large deposits from local businesses, towns, and nonprofits. This keeps more money in the community, which can then be used for local loans and investments.
When does this start?
The changes would take effect as soon as the bill is signed into law, but it also sets a deadline for a government report.
FDIC report on reciprocal deposits
The Federal Deposit Insurance Corporation must submit a report on its study of reciprocal deposits to Congress within 6 months of the bill becoming law.