Title: Community Bank Deposit Access Act of 2019
Policy area: Finance and Financial Sector

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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4384 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 4384

   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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 18, 2019

    Mr. Crist (for himself and Mr. Hill of Arkansas) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
   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.

    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 ``Community Bank Deposit Access Act of 
2019''.

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 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' means a deposit that would otherwise be 
                considered to be obtained, directly or indirectly, by 
                or through a deposit broker, if it 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 
                        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' means an insured depository institution 
                that accepts custodial deposits, that were not placed 
                there 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) 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' has the meaning given the term 
                `administrator' in section 3(16) of the Employee 
                Retirement Income Security Act of 1974 (29 U.S.C. 
                1002(16)).
                    ``(D) Well capitalized.--The term `well 
                capitalized' has the meaning given the term in section 
                38(b)(1)(A).''.
    (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, respectively, 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--
                    ``(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.''.
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