Minority Depository Institution and Community Bank Deposit Access Act of 2020
This bill specifies that certain custodial deposits at eligible institutions shall not be considered to be brokered deposits, which are subject to additional regulatory requirements, including those related to liquidity. The bill generally defines a custodial deposit as a deposit made by a certain entity serving as an agent, trustee, or custodian at an insured depository institution for the purpose of providing deposit insurance for the benefit of a third party. Among other requirements, the bill provides that an eligible institution includes small depository institutions, community development financial institutions, and minority depository institutions.
Additionally, the bill specifies that only low-income credit unions and minority depository institutions that are federally insured credit unions are eligible for certain community development revolving loans.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 4644 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
2d Session
S. 4644
To amend the Federal Deposit Insurance Act to ensure that certain
custodial deposits of well capitalized insured depository institutions
are not considered to be funds obtained by or through deposit brokers,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 22, 2020
Mr. Jones introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Federal Deposit Insurance Act to ensure that certain
custodial deposits of well capitalized insured depository institutions
are not considered to be funds obtained by or through deposit brokers,
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 ``Minority Depository Institution and
Community Bank Deposit Access Act of 2020''.
SEC. 2. LIMITED EXCEPTION FOR CUSTODIAL DEPOSITS.
(a) In General.--Section 29 of the Federal Deposit Insurance Act
(12 U.S.C. 1831f) is amended by adding at the end the following:
``(j) Limited Exception for Custodial Deposits.--
``(1) In general.--Custodial deposits of an eligible
institution shall not be considered to be funds obtained,
directly or indirectly, by or through a deposit broker to the
extent that the total amount of such custodial deposits does
not exceed an amount equal to 20 percent of the total
liabilities of the eligible institution.
``(2) Definitions.--In this subsection:
``(A) Custodial deposit.--The term `custodial
deposit' means a deposit that would otherwise be
considered to be obtained, directly or indirectly, by
or through a deposit broker, if the deposit is
deposited at 1 or more insured depository institutions,
for the purpose of providing or maintaining deposit
insurance for the benefit of a third party, by or
through any of the following, each acting in a formal
custodial or fiduciary capacity for the benefit of a
third party:
``(i) An insured depository institution
serving as agent, trustee, or custodian.
``(ii) A trust entity controlled by an
insured depository institution serving as
agent, trustee, or custodian.
``(iii) A State-chartered trust company
serving as agent, trustee, or custodian.
``(iv) A plan administrator or investment
advisor, acting in a formal custodial or
fiduciary capacity for the benefit of a plan,
as defined in section 3 of the Employee
Retirement Income Security Act of 1974 (29
U.S.C. 1002).
``(B) Eligible institution.--The term `eligible
institution' means an insured depository institution
that accepts custodial deposits, that were not
deposited at the insured depository institution in
return for fees paid by the insured depository
institution pursuant to an agreement with a third
party, if the insured depository institution--
``(i)(I) has less than $1,000,000,000 in
total assets as reported on the consolidated
report of condition and income as reported
quarterly to the appropriate Federal banking
agency; or
``(II)(aa) is a community development
financial institution, as defined in section
103 of the Community Development Banking and
Financial Institutions Act of 1994 (12 U.S.C.
4702); or
``(bb) is a minority depository
institution, as defined in section 308 of the
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1463 note);
``(ii)(I) when most recently examined under
section 10(d) was found to have a composite
condition of outstanding or good; and
``(II) is well capitalized; or
``(iii) has obtained a waiver pursuant to
subsection (c).
``(C) Plan administrator.--The term `plan
administrator' has the meaning given the term
`administrator' in section 3 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002).
``(D) Well capitalized.--The term `well
capitalized' has the meaning given the term in section
38(b).''.
(b) Interest Rate Restriction.--Section 29 of the Federal Deposit
Insurance Act (12 U.S.C. 1831f) is amended by striking subsection (e)
and inserting the following:
``(e) Restriction on Interest Rate Paid.--
``(1) Definitions.--In this subsection--
``(A) the terms `custodial deposit', `eligible
institution', and `well capitalized' have the meanings
given those terms in subsection (j); and
``(B) the term `covered insured depository
institution' means an insured depository institution
that--
``(i) under subsection (c) or (d), accepts
funds obtained, directly or indirectly, by or
through a deposit broker, or
``(ii) while acting as an eligible
institution under subsection (j), accepts
custodial deposits while not well capitalized.
``(2) Prohibition.--A covered insured depository
institution may not pay a rate of interest on funds that, under
subsection (c) or (d), are obtained, directly or indirectly, by
or through a deposit broker or on custodial deposits that are
accepted while not well capitalized that, at the time the funds
or custodial deposits are accepted, significantly exceeds the
limit set forth in paragraph (3).
``(3) Limit on interest rates.--The limit on the rate of
interest referred to in paragraph (2) shall be not greater
than--
``(A) the rate paid on deposits of similar maturity
in the normal market area of the covered insured
depository institution for deposits accepted in the
normal market area of the covered insured depository
institution; or
``(B) the national rate paid on deposits of
comparable maturity, as established by the Corporation,
for deposits accepted outside the normal market area of
the covered insured depository institution.''.
SEC. 3. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR CREDIT UNIONS.
Section 130 of the Federal Credit Union Act (12 U.S.C. 1772c-1) is
amended by striking subsection (c) and inserting the following:
``(c) Loans.--
``(1) In general.--The Board may require that any loans
made from the Fund be matched by increased shares in the
borrower credit union.
``(2) Eligibility.--Only low-income credit unions and
minority depository institutions that are federally insured
credit unions are eligible for loans made from the Fund.''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
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