Bill > HR3234

This bill, titled the "Keeping Deposits Local Act," amends the Federal Deposit Insurance Act to change how certain deposits are treated, specifically those made through a "deposit broker," which is an entity that solicits and accepts funds from the public for deposit with an insured depository institution. The core change is to increase the amount of "reciprocal deposits" that are *not* considered to be funds obtained through a deposit broker. Reciprocal deposits are a way for banks to accept larger deposits from customers by spreading them across multiple banks, ensuring they remain insured by the Federal Deposit Insurance Corporation (FDIC) up to the standard limit per depositor, per insured bank, for each account ownership category. The bill modifies the existing rules by stating that a certain percentage of an "agent institution's" (the bank receiving the deposits) total liabilities will not be considered broker-deposited funds, with these percentages decreasing as the institution's liabilities increase, up to $250 billion. For example, 50% of liabilities up to $1 billion, 40% of liabilities between $1 billion and $10 billion, and 30% of liabilities between $10 billion and $250 billion will be exempt. The bill also clarifies that an agent institution qualifies if it has a good financial health rating (CAMELS rating of 1, 2, or 3) when most recently examined. Furthermore, the bill mandates a study by the FDIC, in consultation with the Federal Reserve, to analyze the performance, usage, and comparison of reciprocal deposits since 2018, with a report due to Congress within six months of enactment. Finally, it includes a provision to reduce a specific dollar amount in a discretionary surplus fund related to the Federal Reserve Act, effective in 2036.