I 

118TH CONGRESS 

1ST SESSION H. R. 5845 

To amend the Federal Deposit Insurance Act to address transaction account 

guarantees, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 29, 2023 

Mr. KUSTOFF introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on the 

Judiciary, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Federal Deposit Insurance Act to address 

transaction account guarantees, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Depositor Protection 

5 Act of 2023’’. 

6 SEC. 2. TRANSACTION ACCOUNT GUARANTEES. 

7 (a) IN GENERAL.—Section 11(a)(1) of the Federal 

8 Deposit Insurance Act (12 U.S.C. 1821(a)(1)) is amend9 ed— 


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1 (1) in subparagraph (B)— 

2 (A) by striking ‘‘The net amount’’ and in3 serting the following: 

4 ‘‘(i) IN GENERAL.—Subject to clause 

5 (ii), the net amount’’; and 

6 (B) by adding at the end the following: 

7 ‘‘(ii) INSURANCE FOR NONINTEREST8 BEARING TRANSACTION ACCOUNTS.— 

9 ‘‘(I) IN GENERAL.—Notwith10 standing clause (i), and subject to 

11 subclause (II) of this clause, the Cor12 poration shall insure the net amount, 

13 in an amount that is not more than 

14 $100,000,000, that any depositor at 

15 an insured depository institution 

16 maintains in a noninterest-bearing 

17 transaction account. Such amount 

18 shall not be taken into account when 

19 computing the net amount due to 

20 such depositor under clause (i). 

21 ‘‘(II) ABILITY OF CERTAIN IN22 SURED DEPOSITORY INSTITUTIONS TO

23 OPT-OUT.— 

24 ‘‘(aa) IN GENERAL.—An in25 sured depository institution that 


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1 has less than $250,000,000,000 

2 in total consolidated assets may 

3 elect not to participate with re4 spect to the increased amount of 

5 insurance made available under 

6 subclause (I). 

7 ‘‘(bb) LIMITATION ON AS8 SESSMENT OF FEE.—The Cor9 poration may not assess a fee on 

10 any insured depository institution 

11 that elects not to participate with 

12 respect to the increased amount 

13 of insurance made available 

14 under subclause (I). 

15 ‘‘(III) DEFINITION.—In this 

16 clause, the term ‘noninterest-bearing 

17 transaction account’ means a deposit 

18 or account maintained at an insured 

19 depository institution— 

20 ‘‘(aa) with respect to which 

21 interest is neither accrued nor 

22 paid; 

23 ‘‘(bb) on which the depositor 

24 or account holder is permitted to 

25 make withdrawals by negotiable 


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1 or transferable instrument, pay2 ment orders of withdrawal, tele3 phone or other electronic media 

4 transfers, or other similar items 

5 for the purpose of making pay6 ments or transfers to third par7 ties or others; and 

8 ‘‘(cc) on which the insured 

9 depository institution does not re10 serve the right to require advance 

11 notice of an intended with12 drawal.’’; and 

13 (2) in subparagraph (C), by striking ‘‘subpara14 graph (B)’’ and inserting ‘‘subparagraph (B)(i)’’. 

15 (b) REVERSION.—On the date that is 2 years after 

16 the date of enactment of this Act, section 11(a)(1) of the 

17 Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)) is 

18 amended— 

19 (1) by amending subparagraph (B) to read as 

20 follows: 

21 ‘‘(B) NET AMOUNT OF INSURED DE22 POSIT.—The net amount to any depositor at an 

23 insured depository institution shall not exceed 

24 the standard maximum deposit insurance 

25 amount as determined in accordance with subVerDate Sep 11 2014 00:03 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5845.IH H5845

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1 paragraphs (C), (D), (E), and (F) and para2 graph (3).’’; and 

3 (2) in subparagraph (C), by striking ‘‘subpara4 graph (B)(i)’’ and inserting ‘‘subparagraph (B)’’. 

5 SEC. 3. RECIPROCAL DEPOSITS. 

6 Section 29(i)(1) of the Federal Deposit Insurance Act 

7 (12 U.S.C. 1831f(i)(1)) is amended— 

8 (1) in subparagraph (A), by striking 

9 ‘‘$5,000,000,000’’ and inserting ‘‘$10,000,000,000’’; 

10 and 

11 (2) in subparagraph (B), by striking ‘‘20 per12 cent’’ and inserting ‘‘25 percent’’. 

13 SEC. 4. ADJUSTED LEAST COST RESOLUTION. 

14 Section 13(c)(4) of the Federal Deposit Insurance 

15 Act (12 U.S.C. 1823(c)(4)) is amended— 

16 (1) by redesignating subparagraph (H) as sub17 paragraph (I); and 

18 (2) by inserting after subparagraph (G) the fol19 lowing: 

20 ‘‘(H) NON-SYSTEMIC SECONDARY COST TO

21 THE DEPOSIT INSURANCE FUND.— 

22 ‘‘(i) DEFINITIONS.—In this subpara23 graph: 

24 ‘‘(I) LARGE INSURED DEPOSI25 TORY INSTITUTION.—The term ‘large 


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1 insured depository institution’ means 

2 an insured depository institution with 

3 total consolidated assets of not less 

4 than $100,000,000,000. 

5 ‘‘(II) NON-SYSTEMIC SECONDARY

6 COST TO THE DEPOSIT INSURANCE

7 FUND.—The term ‘non-systemic sec8 ondary cost to the Deposit Insurance 

9 Fund’ means a cost to the Deposit In10 surance Fund from— 

11 ‘‘(aa) the appointment of the 

12 Corporation as a receiver for a 

13 second or additional insured de14 pository institution as a direct 

15 and contemporaneous result of 

16 the compliance by the Corpora17 tion with subparagraphs (A) and 

18 (E) with respect to a large in19 sured depository institution, in20 cluding the cost of liquidating 

21 any such second or additional in22 sured depository institution in 

23 compliance with subparagraphs 

24 (A) and (E); 


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1 ‘‘(bb) a reduction in the 

2 price of an asset as a direct and 

3 contemporaneous result of the 

4 liquidation by the Corporation of 

5 a large insured depository insti6 tution in compliance with sub7 paragraphs (A) and (E); or 

8 ‘‘(cc) any other direct and 

9 contemporaneous result of the 

10 compliance by the Corporation 

11 with subparagraphs (A) and (E) 

12 with respect to a large insured 

13 depository institution (other than 

14 any such loss that arises from se15 rious adverse effects on economic 

16 conditions or financial stability 

17 within the meaning of subpara18 graph (G)). 

19 ‘‘(ii) ACTION PERMITTED UPON DE20 TERMINATION BY THE BOARD OF DIREC21 TORS.— 

22 ‘‘(I) IN GENERAL.—Notwith23 standing subparagraphs (A) and (E), 

24 if the Board of Directors (upon a vote 

25 of not less than two-thirds of the 


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1 members of the Board of Directors) 

2 makes a determination described in 

3 subclause (II), the Corporation may 

4 take action or assistance under para5 graph (2) for the purpose of facili6 tating— 

7 ‘‘(aa) a merger or consolida8 tion of the applicable large in9 sured depository institution with 

10 another insured depository insti11 tution; 

12 ‘‘(bb) the sale of any or all 

13 of the assets of the applicable 

14 large insured depository institu15 tion; 

16 ‘‘(cc) the assumption of any 

17 or all of the liabilities of the ap18 plicable large insured depository 

19 institution by another insured de20 pository institution; or 

21 ‘‘(dd) the acquisition of the 

22 stock of the applicable large in23 sured depository institution. 

24 ‘‘(II) DETERMINATION DE25 SCRIBED.—A determination described 


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1 in this subclause is a determination 

2 that— 

3 ‘‘(aa) the compliance by the 

4 Corporation with subparagraphs 

5 (A) and (E) with respect to a 

6 large insured depository institu7 tion for which the Corporation 

8 has been appointed receiver 

9 would result in a non-systemic 

10 secondary cost to the Deposit In11 surance Fund; and 

12 ‘‘(bb) any action or assist13 ance under this subparagraph 

14 would avoid or mitigate the non15 systemic secondary cost to the 

16 Deposit Insurance Fund de17 scribed in item (aa). 

18 ‘‘(iii) ADJUSTED LEAST-COST RESOLU19 TION REQUIREMENT.—The Corporation 

20 may not take any action or provide any as21 sistance under this subparagraph unless 

22 the total amount of the expenditures by 

23 the Corporation and obligations incurred 

24 by the Corporation (including any imme25 diate and long-term obligation of the CorVerDate Sep 11 2014 00:03 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5845.IH H5845

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1 poration and any direct or contingent li2 ability for future payment by the Corpora3 tion) in connection with the taking of that 

4 action or provision of that assistance with 

5 respect to an insured depository institution 

6 is the least costly to the Deposit Insurance 

7 Fund, taking into account the non-sys8 temic secondary costs to the Deposit Insur9 ance Fund that would result without the 

10 taking of that action or the provision of 

11 that assistance, of all possible methods for 

12 meeting the obligations of the Corporation 

13 under this section. 

14 ‘‘(iv) DOCUMENTATION REQUIRED.— 

15 The Chairperson of the Board of Directors 

16 shall— 

17 ‘‘(I) document any determination 

18 under clause (ii); and 

19 ‘‘(II) retain the documentation 

20 for review under clause (v). 

21 ‘‘(v) GAO REVIEW.—The Comptroller 

22 General of the United States shall review 

23 and report to Congress on any determina24 tion under clause (ii), including— 


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1 ‘‘(I) the basis for the determina2 tion; 

3 ‘‘(II) the purpose for which any 

4 action was taken pursuant to such 

5 clause; and 

6 ‘‘(III) the likely effect of the de7 termination and such action on the in8 centives and conduct of insured depos9 itory institutions and uninsured de10 positors. 

11 ‘‘(vi) NOTICE.— 

12 ‘‘(I) IN GENERAL.—Not later 

13 than 3 days after making a deter14 mination under clause (ii), the Sec15 retary of the Treasury shall provide 

16 written notice of any determination 

17 under clause (ii) to the Committee on 

18 Banking, Housing, and Urban Affairs 

19 of the Senate and the Committee on 

20 Financial Services of the House of 

21 Representatives. 

22 ‘‘(II) DESCRIPTION OF BASIS OF

23 DETERMINATION.—The notice under 

24 subclause (I) shall include a descripVerDate Sep 11 2014 00:03 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5845.IH H5845

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1 tion of the basis for any determination 

2 under clause (ii).’’. 

3 SEC. 5. ACQUISITIONS OF DISTRESSED BANKS. 

4 (a) DEFINITIONS.—In this section: 

5 (1) APPROPRIATE FEDERAL BANKING AGENCY; 

6 INSURED BANK.—The terms ‘‘appropriate Federal 

7 banking agency’’ and ‘‘insured bank’’ have the 

8 meanings given the terms in section 3 of the Federal 

9 Deposit Insurance Act (12 U.S.C. 1813). 

10 (2) BOARD.—The term ‘‘Board’’ means the 

11 Board of Governors of the Federal Reserve System. 

12 (3) BANK HOLDING COMPANY; CONTROL; SUB13 SIDIARY.—The terms ‘‘bank holding company’’, 

14 ‘‘control’’, and ‘‘subsidiary’’ have the meanings given 

15 the terms in section 2 of the Bank Holding Com16 pany Act of 1956 (12 U.S.C. 1841). 

17 (4) COVERED ENTITY.—The term ‘‘covered en18 tity’’ means— 

19 (A) after a transaction described in sub20 section (b)(1)(A), the bank holding company of 

21 which the applicable distressed insured bank 

22 has become a subsidiary; 

23 (B) after a transaction described in sub24 section (b)(1)(B), the bank holding company 


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1 that has acquired the direct or indirect owner2 ship or control described in that provision; and 

3 (C) after a merger or consolidation de4 scribed in subsection (b)(1)(C), the bank hold5 ing company that results because of that merg6 er or consolidation. 

7 (5) DISTRESSED INSURED BANK.—The term 

8 ‘‘distressed insured bank’’ means an insured bank 

9 that has a class of equity securities, or is controlled, 

10 directly or indirectly, by a company that has a class 

11 of equity securities— 

12 (A) registered pursuant to section 12(b) of 

13 the Securities Exchange Act of 1934 (15 

14 U.S.C. 78l(b)); and 

15 (B) the price of which on a national securi16 ties exchange has declined not less than 20 per17 cent at any time on or after March 1, 2023, as 

18 compared with the highest price of those securi19 ties on that exchange on or after March 1, 

20 2023. 

21 (6) EQUITY SECURITY; EXCHANGE.—The terms 

22 ‘‘equity security’’ and ‘‘exchange’’ have the meanings 

23 given the terms in section 3(a) of the Securities Ex24 change Act of 1934 (15 U.S.C. 78c(a)). 


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1 (7) NATIONAL SECURITIES EXCHANGE.—The 

2 term ‘‘national securities exchange’’ means an ex3 change that is registered in accordance with section 

4 6 of the Securities Exchange Act of 1934 (15 U.S.C. 

5 78f). 

6 (8) TOTAL CONSOLIDATED ASSETS.—The term 

7 ‘‘total consolidated assets’’ means, with respect to an 

8 entity, the total consolidated assets of that entity, as 

9 determined pursuant to the instructions of Form FR 

10 Y–9C of the Board. 

11 (b) TEMPORARY WAIVER OF REGULATORY APPROV12 ALS FOR ACQUISITIONS OF DISTRESSED BANKS.— 

13 (1) IN GENERAL.—Subject to paragraphs (2) 

14 and (3), except as provided in paragraph (4), and 

15 notwithstanding any requirement or restriction relat16 ing to notification, approval, or other matter under 

17 section 3 or 4 of the Bank Holding Company Act of 

18 1956 (12 U.S.C. 1842, 1843), section 7(j) or 18(c) 

19 of the Federal Deposit Insurance Act (12 U.S.C. 

20 1817(j), 1828(c)), or any other Federal or State 

21 law, after written notice to the Board— 

22 (A) a distressed insured bank may become 

23 a subsidiary of a bank holding company; 

24 (B) a bank holding company may acquire 

25 direct or indirect ownership or control of any 


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1 voting shares of any distressed insured bank or 

2 any company that controls a distressed insured 

3 bank; and 

4 (C) a bank holding company may merge or 

5 consolidate with a bank holding company that 

6 has a subsidiary that is a distressed insured 

7 bank. 

8 (2) CONDITIONS.—Paragraph (1) shall apply 

9 only if— 

10 (A) after the applicable transaction or 

11 other action under that paragraph— 

12 (i) the applicable covered entity would 

13 meet the required capital levels for well 

14 capitalized bank holding companies estab15 lished by the Board; or 

16 (ii) in the case of a transaction or 

17 other action described in subparagraph (A) 

18 or (B) of that paragraph, the total consoli19 dated assets of the applicable covered enti20 ty would be not more than 2 times the 

21 amount of the total consolidated assets (as 

22 measured immediately before the trans23 action or other action) of— 

24 (I) in the case of an action de25 scribed in subparagraph (A) of that 


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1 paragraph, the bank holding company 

2 of which the distressed insured bank 

3 is becoming a subsidiary as a result of 

4 that action; or 

5 (II) in the case of an acquisition 

6 described in subparagraph (B) of that 

7 paragraph, the bank holding company 

8 that is acquiring direct or indirect 

9 ownership or control of any voting 

10 shares of the distressed insured bank 

11 or the company that controls a dis12 tressed insured bank; and 

13 (B) each insured bank controlled by the 

14 applicable covered entity— 

15 (i) has a composite rating, as deter16 mined by the appropriate Federal banking 

17 agency in the most recent report of exam18 ination of the applicable insured bank, of 

19 1 or 2 under the Uniform Financial Insti20 tution Rating System; and 

21 (ii) has been assigned by the appro22 priate Federal banking agency a rating of 

23 ‘‘outstanding’’ or ‘‘satisfactory’’ in the 

24 most recent Community Reinvestment Act 


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1 examination of the applicable insured 

2 bank. 

3 (3) EXPIRATION.—A transaction or other ac4 tion to which paragraph (1) applies shall be con5 summated not later than 90 days after the date of 

6 enactment of this Act. 

7 (4) EXCEPTIONS.—Paragraph (1) shall not 

8 apply to— 

9 (A) any action that would cause a dis10 tressed insured bank to become a subsidiary of 

11 an insured bank; 

12 (B) any acquisition of direct or indirect 

13 ownership or control by an insured bank of any 

14 voting shares of any distressed insured bank or 

15 any company that controls a distressed insured 

16 bank; or 

17 (C) any merger, consolidation, acquisition 

18 of assets, or other acquisition of control, of an19 other company that would be subject to section 

20 14 of the Bank Holding Company Act of 1956 

21 (12 U.S.C. 1852). 

22 (c) NO PREMERGER NOTIFICATION AND WAITING

23 PERIOD.—A transaction under subsection (b) shall be exVerDate Sep 11 2014 00:03 Oct 05, 2023 Jkt 049200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\H5845.IH H5845

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1 empt from the requirements of section 7A of the Clayton 

2 Act (15 U.S.C. 18a). 

Æ 


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