Bill > HR3234

This bill aims to modify how reciprocal deposits (a type of banking arrangement where banks exchange deposits to help each other meet local funding needs) are treated under federal banking regulations. The bill would change the Federal Deposit Insurance Act to allow banks to count a larger percentage of reciprocal deposits as local funds, rather than considering them as funds obtained through a deposit broker. Specifically, banks can now count 50% of deposits up to $1 billion, 40% of deposits between $1-10 billion, and 30% of deposits between $10-250 billion as local funds. The bill also modifies the definition of an "agent institution" by requiring that such institutions have a CAMELS rating of 1, 2, or 3 (a standard bank performance rating system) when last examined. Additionally, the bill mandates that the Federal Deposit Insurance Corporation conduct a comprehensive study on reciprocal deposits within six months, examining their performance since 2018, usage across different bank sizes, behavior during financial stress, and potential benefits and risks. The study's findings will be reported to Congressional financial committees, providing insight into this complex banking practice.

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https://www.congress.gov/bill/119th-congress/house-bill/3234/all-info