Bill > S2757

This bill, known as the "Keeping Deposits Local Act," amends the Federal Deposit Insurance Act to modify how reciprocal deposits are treated for banks. Reciprocal deposits occur when banks exchange deposits to help each other meet local banking needs. The bill changes the calculation of how much of these deposits are not considered to be obtained through a deposit broker, which affects how banks can manage their funds. Specifically, the bill creates a tiered system where banks can exclude a percentage of their reciprocal deposits based on their total liabilities: 50% for liabilities up to $1 billion, 40% for liabilities between $1-10 billion, 30% for liabilities between $10-250 billion, 20% for liabilities between $250 billion-$1 trillion, and 2% for liabilities over $1 trillion. Additionally, the bill modifies the definition of an "agent institution" by changing the bank health assessment from a "composite condition of outstanding or good" to being assigned a CAMELS rating of 1, 2, or 3 (a standard bank rating system that evaluates Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk). These changes are designed to provide more flexibility for banks in managing their deposits and potentially support local banking activities.

Housing and Urban Affairs

https://www.congress.gov/bill/119th-congress/senate-bill/2757/all-info