Community Bank Deposit Access Act of 2025
Officially: “Community Bank Deposit Access Act of 2025” Read the full text
What it does
Read it in plain language
1Short title
This section would let the Act be called the Community Bank Deposit Access Act of 2025.
Show official text
1. Short title This Act may be cited as the Community Bank Deposit Access Act of 2025 .
2Limited exception for custodial deposits
This section would amend section 29 of the Federal Deposit Insurance Act in two ways. First, it would add a new subsection saying that custodial deposits of an eligible institution do not count as funds obtained, directly or indirectly, by or through a deposit broker, but only up to an amount equal to 20 percent of the eligible institution's total liabilities; any custodial deposits above that 20 percent amount would still count as obtained by or through a deposit broker. A custodial deposit is a deposit that would otherwise count as broker-obtained, if it is placed at one or more insured depository institutions to provide or maintain deposit insurance for a third party, through any of these parties acting in a formal custodial or fiduciary capacity for that third party: an insured depository institution acting as agent, trustee, or custodian; a trust entity controlled by an insured depository institution and acting as agent, trustee, or custodian; a State-chartered trust company acting as agent, trustee, or custodian; or a plan administrator or investment adviser acting in a formal custodial or fiduciary capacity for a plan as defined in section 3 of the Employee Retirement Income Security Act of 1974. An eligible institution is an insured depository institution that accepts custodial deposits that were not deposited there in return for fees the institution paid under an agreement with a third party, and that also either has less than $10,000,000,000 in total assets as reported on its quarterly consolidated report of condition and income to its Federal banking agency, or was found to have a composite condition of outstanding or good at its most recent examination under section 10(d) of the Federal Deposit Insurance Act and is well capitalized, or has obtained a waiver under subsection (c) of section 29. The new subsection also defines plan administrator by pointing to the meaning of administrator in section 3 of the Employee Retirement Income Security Act of 1974, and defines well capitalized by pointing to the meaning of that term in section 38(b) of the Federal Deposit Insurance Act. Second, this section would replace the Act's existing interest rate restriction, subsection (e), with a new version. Under the new subsection (e), a covered insured depository institution is an insured depository institution that either accepts broker-obtained funds under subsection (c) or (d) of section 29, or accepts custodial deposits under the new subsection (j) while not well capitalized. A covered insured depository institution could not pay a rate of interest, at the time the funds or custodial deposits are accepted, that significantly exceeds a set limit on those broker-obtained funds or on custodial deposits accepted while not well capitalized. That limit could not be more than the rate paid on deposits of similar maturity in the institution's normal market area, for deposits accepted in that normal market area, or the national rate paid on deposits of comparable maturity for deposits accepted outside the institution's normal market area, as set by the Corporation (the FDIC).
Show official text
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. .
Where it is
In the House.