Community Bank Deposit Access Act of 2025
This bill changes the treatment of certain types of deposits so they are no longer classified as brokered deposits. Brokered deposits are funds placed by a broker on behalf of a client in a depository institution to maximize interest rates and for depository insurance purposes. Currently, institutions that accept brokered deposits may be subject to additional oversight.
In particular, under the bill, custodial deposits at insured depository institutions with less than $10 billion in total assets shall not be treated as brokered deposits if the deposits do not exceed 20% of the institution’s liabilities. The institution must be well-capitalized and have a specified minimum soundness rating, or be in possession of a waiver from the Federal Deposit Insurance Corporation.
The bill also generally applies existing interest rate limits applicable to institutions that are not well-capitalized to similar institutions that accept custodial deposits.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5317 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 5317
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 HOUSE OF REPRESENTATIVES
September 11, 2025
Mr. Hill of Arkansas introduced the following bill; which was referred
to the Committee on Financial Services
_______________________________________________________________________
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 ``Community Bank Deposit Access Act of
2025''.
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) has less than $10,000,000,000 in
total assets as reported on the consolidated
report of condition and income as reported
quarterly to the appropriate Federal banking
agency;
``(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.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
Committee Consideration and Mark-up Session Held
Ordered to be Reported (Amended) by the Yeas and Nays: 48 - 2.
Reported (Amended) by the Committee on Financial Services. H. Rept. 119-369.
Reported (Amended) by the Committee on Financial Services. H. Rept. 119-369.
Placed on the Union Calendar, Calendar No. 321.
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