May 21, 2026
Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs
To amend the Federal Deposit Insurance Act to modify the amount of reciprocal deposits of an insured depository institution that are not considered to be funds obtained by or through a deposit broker, and for other purposes.
Section 1. Short title
This Act may be cited as the Keeping Deposits Local Act
.
Sec. 2. Amount of reciprocal deposits that are not considered to be funds obtained by or through a deposit broker
Section 29(i) of the Federal Deposit Insurance Act (12 U.S.C. 1831f(i)) is amended by striking paragraph (1) and inserting the following:
(1) In general
The sum of the following amounts of reciprocal deposits of an agent institution shall not be considered to be funds obtained, directly or indirectly, by or through a deposit broker:
(A)
An amount equal to 50 percent of the portion of the total liabilities of the agent institution that is less than or equal to $1,000,000,000.
(B)
An amount equal to 40 percent of the portion, if any, of the total liabilities of the agent institution that is greater than $1,000,000,000, but less than or equal to $10,000,000,000.
(C)
An amount equal to 30 percent of the portion, if any, of the total liabilities of the agent institution that is greater than $10,000,000,000, but less than or equal to $250,000,000,000.
Sec. 3. Definition of Agent Institution
Section 29(i)(2)(A)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1831f(i)(2)(A)(i)) is amended by striking subclause (I) and inserting the following:
(I)
when most recently examined under section 10(d) was assigned a CAMELS rating of 1, 2, or 3 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system); and
Sec. 4. Reciprocal deposits study
(a) In general
The Federal Deposit Insurance Corporation, in consultation with the Board of Governors of the Federal Reserve System, shall carry out a study on reciprocal deposits.
(b) Contents
The study required under subsection (a) shall include—
(1)
an analysis of how reciprocal deposits have performed since 2018, which shall include—
(A)
the use of quantitative and qualitative data;
(B)
a breakdown of the usage of reciprocal deposits by size of insured depository institution;
(C)
the usage of reciprocal deposits during periods of stress; and
(D)
an analysis, to the extent practicable, of end-user depositors, such as municipalities, businesses, and non-profit organizations, that drive demand for reciprocal products;
(2)
an analysis, to the extent practicable, of how reciprocal deposits compare to other deposit arrangements; and
(3)
an analysis of the benefits and potential risks of reciprocal deposits.
(c) Report
Not later than 6 months after the date of enactment of this Act, the Federal Deposit Insurance Corporation shall issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing all findings and determinations made in carrying out the report required under subsection (a).
Sec. 5. Discretionary Surplus Fund
(a) In general
The dollar amount specified under section 7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is reduced by $28,000,000.
(b) Effective date
The amendment made by subsection (a) shall take effect on September 1, 2036.