Keeping Deposits Local Act

Tom Emmer

Republican · MN · Representative

Source: Congress.gov · FEC

• Daniel Meuser (R-PA-9)Original· 2025-05-07
• Gwen Moore (D-WI-4)Original· 2025-05-07
• Joyce Beatty (D-OH-3)Original· 2025-05-07
• Andy Barr (R-KY-6)· 2025-05-20
• Mike Flood (R-NE-1)· 2025-07-02
• Roger Williams (R-TX-25)· 2025-07-02
• Mike Ezell (R-MS-4)· 2025-09-11
• Pete Sessions (R-TX-17)· 2025-09-15
• Jack Bergman (R-MI-1)· 2025-09-18
• Jared F. Golden (D-ME-2)· 2025-09-18
• Mike Rogers (R-AL-3)· 2025-11-04

Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

2026-05-21

Source: Congress.gov

This bill increases the amount insured depository institutions may accept as reciprocal deposits. (Reciprocal deposits are used by institutions to increase the availability of deposit insurance by splitting large deposits using a reciprocal network of institutions.) The bill creates a tiered system so that the allowable amount is based on the institution's total liabilities. Additionally, the bill changes certain qualifications insured depository institutions may be required to have to accept reciprocal deposits. Under current law, institutions may qualify by having a composite rating of outstanding or good, among other requirements. The bill allows institutions with a 1, 2, or 3 rating under the CAMELS scale to qualify. (The Uniform Financial Institutions Rating System uses the characteristics of capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk (i.e., CAMELS ratings) to rate the health of financial institutions, with a 1 indicating the highest rating and least degree of supervisory concern and a 5 indicating the lowest rating and highest degree of supervisory concern.)

Plain-English rewrite of the Congressional Research Service summary published on Congress.gov. Cached and reviewed.

[Congressional Bills 119th Congress] [From the U.S. Government Publishing Office] [H.R. 3234 Reported in House (RH)] <DOC> Union Calendar No. 314 119th CONGRESS 1st Session H. R. 3234 [Report No. 119-362] To amend the Federal Deposit Insurance Act to modify the amount of reciprocal deposits of an insured depository institution that are not considered to be funds obtained by or through a deposit broker, and for other purposes. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES May 7, 2025 Mr. Emmer (for himself, Mrs. Beatty, Mr. Meuser, and Ms. Moore of Wisconsin) introduced the following bill; which was referred to the Committee on Financial Services November 4, 2025 Additional sponsors: Mr. Barr, Mr. Flood, Mr. Williams of Texas, Mr. Ezell, Mr. Sessions, Mr. Golden of Maine, Mr. Bergman, and Mr. Rogers of Alabama November 4, 2025 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on May 7, 2025] _______________________________________________________________________ A BILL To amend the Federal Deposit Insurance Act to modify the amount of reciprocal deposits of an insured depository institution that are not considered to be funds obtained by or through a deposit broker, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Keeping Deposits Local Act''. SEC. 2. AMOUNT OF RECIPROCAL DEPOSITS THAT ARE NOT CONSIDERED TO BE FUNDS OBTAINED BY OR THROUGH A DEPOSIT BROKER. Section 29(i) of the Federal Deposit Insurance Act (12 U.S.C. 1831f(i)) is amended by striking paragraph (1) and inserting the following: ``(1) In general.--The sum of the following amounts of reciprocal deposits of an agent institution shall not be considered to be funds obtained, directly or indirectly, by or through a deposit broker: ``(A) An amount equal to 50 percent of the portion of the total liabilities of the agent institution that is less than or equal to $1,000,000,000. ``(B) An amount equal to 40 percent of the portion, if any, of the total liabilities of the agent institution that is greater than $1,000,000,000, but less than or equal to $10,000,000,000. ``(C) An amount equal to 30 percent of the portion, if any, of the total liabilities of the agent institution that is greater than $10,000,000,000, but less than or equal to $250,000,000,000.''. SEC. 3. DEFINITION OF AGENT INSTITUTION. Section 29(i)(2)(A)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1831f(i)(2)(A)(i)) is amended by striking subclause (I) and inserting the following: ``(I) when most recently examined under section 10(d) was assigned a CAMELS rating of 1, 2, or 3 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system); and''. SEC. 4. RECIPROCAL DEPOSITS STUDY. (a) In General.--The Federal Deposit Insurance Corporation, in consultation with the Board of Governors of the Federal Reserve System, shall carry out a study on reciprocal deposits. (b) Contents.--The study required under subsection (a) shall include-- (1) an analysis of how reciprocal deposits have performed since 2018, which shall include-- (A) the use of quantitative and qualitative data; (B) a breakdown of the usage of reciprocal deposits by size of insured depository institution; (C) the usage of reciprocal deposits during periods of stress; and (D) an analysis, to the extent practicable, of end- user depositors, such as municipalities, businesses, and non-profit organizations, that drive demand for reciprocal products; (2) an…

analysis, to the extent practicable, of how reciprocal deposits compare to other deposit arrangements; and (3) an analysis of the benefits and potential risks of reciprocal deposits. (c) Report.--Not later than 6 months after the date of enactment of this Act, the Federal Deposit Insurance Corporation shall issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing all findings and determinations made in carrying out the report required under subsection (a). Union Calendar No. 314 119th CONGRESS 1st Session H. R. 3234 [Report No. 119-362] _______________________________________________________________________ A BILL To amend the Federal Deposit Insurance Act to modify the amount of reciprocal deposits of an insured depository institution that are not considered to be funds obtained by or through a deposit broker, and for other purposes. _______________________________________________________________________ November 4, 2025 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

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