Minority Depository Institution and Community Bank Deposit Access Act of 2022
Bill: S.3562 | Sponsor: Sen. Scott, Tim (R-SC)
Policy area: Finance and Financial Sector

Summary:
Minority Depository Institution and Community Bank Deposit Access Act of 2022
This bill specifies that certain custodial deposits at eligible institutions 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. Among other requirements, the bill provides that an eligible institution includes small depository institutions, community development financial institutions, and minority depository institutions.
Additionally, the bill specifies that only low-income credit unions and minority depository institutions that are federally insured credit unions are eligible for certain community development revolving loans.

To amend the Federal Deposit Insurance Act to ensure that certain 
custodial deposits of well capitalized insured depository institutions 
are not considered to be funds obtained by or through deposit brokers, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Minority Depository Institution and 
Community Bank Deposit Access Act of 2022''.

SEC. 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 10 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)(I) has less than $5,000,000,000 in 
                        total assets as reported on the consolidated 
                        report of condition and income as reported 
                        quarterly to the appropriate Federal banking 
                        agency; or
                            ``(II)(aa) is a community development 
                        financial institution, as defined in section 
                        103 of the Community Development Banking and 
                        Financial Institutions Act of 1994 (12 U.S.C. 
                        4702); or
                            ``(bb) is a minority depository 
                        institution, as defined in section 308 of the 
                        Financial Institutions Reform, Recovery, and 
                        Enforcement Act of 1989 (12 U.S.C. 1463 note);
                            ``(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.''.

SEC. 3. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR CREDIT UNIONS.

    Section 130 of the Federal Credit Union Act (12 U.S.C. 1772c-1) is 
amended by striking subsection (c) and inserting the following:
    ``(c) Loans.--
            ``(1) In general.--The Board may require that any loans 
        made from the Fund be matched by increased shares in the 
        borrower credit union.
            ``(2) Eligibility.--Only low-income credit unions and 
        minority depository institutions that are federally insured 
        credit unions are eligible for loans made from the Fund.''.
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