Community Bank Deposit Access Act of 2019

To amend the Federal Deposit Insurance Act to ensure that certain custodial deposits of a well capitalized insured depository institution are not considered to be funds obtained by or through a deposit broker, and for other purposes. 1. Short title This Act may be cited as the Community Bank Deposit Access Act of 2019 2. Limited exception for custodial deposits (a) In general Section 29 of the Federal Deposit Insurance Act ( 12 U.S.C. 1831f (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 the lesser of— (A) $5,000,000,000; or (B) an amount equal to 10 percent of the total liabilities of the eligible institution. (2) Definitions In this subsection: (A) Custodial deposit The term custodial deposit (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 defined in section 3(3) of the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1002(3) (B) Eligible institution The term eligible institution (i) (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 (ii) has obtained a waiver pursuant to subsection (c). (C) Plan administrator The term plan administrator administrator 29 U.S.C. 1002(16) (D) Well capitalized The term well capitalized . (b) Interest rate restriction Section 29 of the Federal Deposit Insurance Act ( 12 U.S.C. 1831f (e) Restriction on interest rate paid (1) Definitions In this subsection— (A) the terms custodial deposit eligible institution well capitalized (B) the term covered insured depository institution (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— (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. .

Summary: Community Bank Deposit Access Act of 2019 This bill specifies that certain custodial deposits shall not be considered to be brokered deposits, which are subject to additional regulatory requirements, including those related to liquidity. The bill generally defines a custodial deposit as a deposit made by a certain entity serving as an agent, trustee, or custodian at an insured depository institution for the purpose of providing deposit insurance for the benefit of a third party.