Asset Growth Restriction Act of 2022
Bill: S.5347 | Sponsor: Sen. Moran, Jerry (R-KS)
Policy area: Finance and Financial Sector

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.

To amend the Federal Deposit Insurance Act to remove restrictions on 
               brokered deposits, 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 ``Asset Growth Restriction Act of 
2022''.

SEC. 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.

SEC. 3. ASSET GROWTH RESTRICTION.

    (a) Asset Growth Restriction.--Section 29 of the Federal Deposit 
Insurance Act (12 U.S.C. 1831f) is amended--
            (1) in the section heading, by striking ``brokered 
        deposits'' and inserting ``asset growth restrictions''; and
            (2) by striking subsections (a) through (i), and inserting 
        the following:
    ``(a) Definitions.--In this section, the terms `average', 
`critically undercapitalized', and `well capitalized' have the meanings 
given those terms in section 38(b).
    ``(b) Regulations Required.--Not later than 18 months after the 
date of enactment of the Asset Growth Restriction Act of 2022, the 
Corporation, in consultation with the Board of Governors of the Federal 
Reserve System and the Comptroller of the Currency, shall promulgate 
regulations imposing a restriction on average total asset growth for 
insured depository institutions that are less than well capitalized to 
maintain safety and soundness and minimize risk to the Deposit 
Insurance Fund.
    ``(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, to ensure that 
those regulations conform to the requirements of this section.''.
    (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), as 
amended by subsection (a) of this section, shall be deemed to be in 
compliance with the asset growth standard established pursuant to 
section 39 of that Act (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)) is amended by inserting ``, as 
that provision was in effect on the day before the date of enactment of 
the Asset Growth Restriction Act of 2022'' after ``Act''.
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