Asset Growth Restriction Act of 2022

To amend the Federal Deposit Insurance Act to remove restrictions on brokered deposits, and for other purposes. 1. Short title This Act may be cited as the Asset Growth Restriction Act of 2022 2. Findings and purpose (a) Findings Congress finds that— (1) restrictions on the acceptance of brokered deposits were enacted in 1989 in order to prevent the abuse of the deposit insurance system by troubled depository institutions; (2) since the enactment of the restrictions described in paragraph (1), technological and demographic developments have changed the way in which depository institutions seek and source deposits, and, as a result, many deposits that are classified as brokered pose little, if any, risk to the deposit insurance system; and (3) in today’s economy, the greatest risk to the deposit insurance system is asset growth by depository institutions that are less than well capitalized. (b) Purpose The purpose of this Act, and the amendments made by this Act, is to remove the current (as of the date of enactment of this Act) restrictions on brokered deposits and to authorize the Federal Deposit Insurance Corporation to issue regulations that restrict asset growth by depository institutions that are less than well capitalized. 3. Asset growth restriction (a) Asset growth restriction Section 29 of the Federal Deposit Insurance Act ( 12 U.S.C. 1831f (1) in the section heading, by striking Brokered deposits Asset growth restrictions (2) by striking subsections (a) through (i), and inserting the following: (a) Definitions In this section, the terms average critically undercapitalized well capitalized (b) Regulations required Not later than 18 months after the date of enactment of the Asset Growth Restriction Act of 2022 (c) Maximum level of growth As part of the regulations required under subsection (b), the Corporation shall— (1) establish a framework to impose 1 or more maximum levels of growth in average total assets that an insured depository institution that is less than well capitalized may not exceed, and provide appropriate adjustments for growth resulting from corporate restructuring such as acquisitions or mergers; and (2) establish a waiver process to enable the Corporation to waive the maximum level established in paragraph (1) upon application by an insured depository institution that is not critically undercapitalized, based on conditions set by the Corporation. (d) Exemptions and additional restrictions As part of the regulations required under subsection (b), the Corporation may— (1) exempt specified classes of assets from the asset growth restriction if the Corporation, in the discretion of the Corporation, determines that growth in those assets does not present risks to the safety and soundness of an insured depository institution; and (2) impose additional restrictions on insured depository institutions to prevent circumvention or evasion of this section by an insured depository institution resulting from actions taken by the insured depository institution by, or through, affiliates of the insured depository institution. (e) Orders The Corporation may, by order— (1) establish a less restrictive level of growth restriction for a particular insured depository institution that is less than well capitalized, or a group of insured depository institutions that are less than well capitalized, if the Corporation finds that such a level will not pose an undue risk to the Deposit Insurance Fund; and (2) establish a more restrictive level of growth restriction for a particular insured depository institution that is less than well capitalized, or a group of insured depository institutions that are less than well capitalized, if the Corporation finds that such a level is necessary to protect the Deposit Insurance Fund. (f) Conforming regulations The Corporation shall revise the regulations of the Corporation, as in existence on the date of enactment of the Asset Growth Restriction Act of 2022 . (b) Rule of construction An insured depository institution that is in compliance with the regulations or orders issued pursuant to section 29 of the Federal Deposit Insurance Act ( 12 U.S.C. 1831f 12 U.S.C. 1831p–1 (c) Technical and conforming amendment Section 274(5) of the Truth in Savings Act ( 12 U.S.C. 4313(5) , as that provision was in effect on the day before the date of enactment of the Asset Growth Restriction Act of 2022 Act

Summary: Asset Growth Restriction Act of 2022 This bill repeals restrictions related to brokered deposits and provides for asset growth restrictions applicable to insured depository institutions. Brokered deposits are deposits made to an insured institution, such as a bank, through a third-party broker for investment purposes. Currently, only well-capitalized banks are allowed to solicit and accept brokered deposits, while institutions that are adequately capitalized may accept if granted a waiver. Undercapitalized banks are prohibited from accepting these deposits. The bill repeals these brokered deposit restrictions and directs the Federal Deposit Insurance Corporation to establish limits on growth of average total assets for less than well-capitalized institutions to maintain their safety and soundness.