I 
115TH CONGRESS 
1ST SESSION H. R. 2403 
To amend the Federal Deposit Insurance Act to ensure that the reciprocal 
deposits of an insured depository institution are not considered to be 
funds obtained by or through a deposit broker, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 8, 2017 
Ms. MOORE (for herself, Mr. EMMER, Ms. MAXINE WATERS of California, 
Mrs. CAROLYN B. MALONEY of New York, Mr. MEEKS, Mr. HECK, Mr. 
POCAN, Mr. CLAY, Mr. CLEAVER, Ms. SINEMA, Mr. STIVERS, Mr. 
PITTENGER, Mr. MESSER, Mr. ZELDIN, Mr. HUIZENGA, Mr. HILL, and 
Mr. LUCAS) introduced the following bill; which was referred to the Com-
mittee on Financial Services 
A BILL 
To amend the Federal Deposit Insurance Act to ensure that 
the reciprocal deposits of an insured depository institu-
tion are not considered to be funds obtained by or 
through a deposit broker, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Keeping Capital Local 
for Underserved Communities Act of 2017’’. 
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SEC. 2. LIMITED EXCEPTION FOR RECIPROCAL 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 new subsection: 
‘‘(i) LIMITED EXCEPTION FOR RECIPROCAL DEPOS-
ITS.— 
‘‘(1) IN GENERAL.—Reciprocal deposits of an 
agent institution shall not be considered to be funds 
obtained, directly or indirectly, by or through a de-
posit broker to the extent that the total amount of 
such reciprocal deposits does not exceed the lesser 
of— 
‘‘(A) $10,000,000,000; or 
‘‘(B) an amount equal to 20 percent of the 
total liabilities of the agent institution. 
‘‘(2) DEFINITIONS.—In this subsection: 
‘‘(A) AGENT
INSTITUTION.—The term 
‘agent institution’ means an insured depository 
institution that places a covered deposit 
through a deposit placement network at other 
insured depository institutions in amounts that 
are less than or equal to the standard max-
imum deposit insurance amount, specifying the 
interest rate to be paid for such amounts, if the 
agent institution— 
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‘‘(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 (as defined in 
section 38(b)(1)(A)); 
‘‘(ii) has obtained a waiver pursuant 
to subsection (c) of this section; or 
‘‘(iii) does not receive an amount of 
reciprocal deposits that causes the total 
amount of reciprocal deposits held by the 
agent institution to be greater than the av-
erage of the total amount of reciprocal de-
posits held by the agent institution on the 
last day of each of the 4 calendar quarters 
preceding the calendar quarter in which 
the agent institution was found not to have 
a composite condition of outstanding or 
good or was determined to be not well cap-
italized. 
‘‘(B) COVERED DEPOSIT.—The term ‘cov-
ered deposit’ means a deposit that— 
‘‘(i) 
is 
submitted 
for 
placement 
through a deposit placement network by an 
agent institution; and 
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‘‘(ii) does not consist of funds that 
were obtained for the agent institution, di-
rectly or indirectly, by or through a deposit 
broker before submission for placement 
through a deposit placement network. 
‘‘(C) DEPOSIT
PLACEMENT
NETWORK.— 
The term ‘deposit placement network’ means a 
network in which an insured depository institu-
tion participates, together with other insured 
depository institutions, for the processing and 
receipt of reciprocal deposits. 
‘‘(D) NETWORK
MEMBER
BANK.—The 
term ‘network member bank’ means an insured 
depository institution that is a member of a de-
posit placement network. 
‘‘(E) RECIPROCAL
DEPOSITS.—The term 
‘reciprocal deposits’ means deposits received by 
an agent institution through a deposit place-
ment network with the same maturity (if any) 
and in the same aggregate amount as covered 
deposits placed by the agent institution in other 
network member banks.’’. 
(b) INTEREST RATE RESTRICTION.—Subsection (e) 
of section 29 of the Federal Deposit Insurance Act (12 
U.S.C. 1831f(e)) is amended to read as follows: 
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‘‘(e) RESTRICTION ON INTEREST RATE PAID.— 
‘‘(1) IN GENERAL.—An insured depository in-
stitution that— 
‘‘(A) under subsection (c) or (d), accepts 
funds obtained, directly or indirectly, by or 
through a deposit broker, or 
‘‘(B) while acting as an agent institution 
under subsection (i), accepts reciprocal deposits 
(as defined in such subsection) while not well 
capitalized (as defined in section 38(b)(1)(A)), 
may not pay a rate of interest on such funds or re-
ciprocal deposits which, at the time that such funds 
or reciprocal deposits are accepted, significantly ex-
ceeds the limit set forth in paragraph (2). 
‘‘(2) LIMIT ON INTEREST RATES.—The limit on 
the rate of interest referred to in paragraph (1) shall 
be— 
‘‘(A) the rate paid on deposits of similar 
maturity in such institution’s normal market 
area for deposits accepted in the institution’s 
normal market area; or 
‘‘(B) the national rate paid on deposits of 
comparable maturity, as established by the Cor-
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poration, for deposits accepted outside the insti-
tution’s normal market area.’’. 
Æ 
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