I 114th CONGRESS 1st Session H. R. 4116 IN THE HOUSE OF REPRESENTATIVES November 19, 2015 Ms. Moore (for herself and Mr. Emmer of Minnesota ) 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 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.

1. 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 deposits (1) In general Reciprocal deposits of an insured depository institution shall not be considered to be funds obtained, directly or indirectly, by or through a deposit broker if— (A) when the institution was most recently examined, its composite condition was found to be outstanding or good; or (B) the total amount of such reciprocal deposits does not exceed the lesser of— (i) $10,000,000,000; or (ii) an amount equal to 20 percent of the total liabilities of the insured depository institution. (2) Rule of construction Nothing in this subsection shall be construed to limit the authority of the Corporation to require, on a case-by-case basis, that an agent institution that is less than adequately capitalized (as defined in section 38(b)(1)(B)) not accept particular types of deposits upon finding that the acceptance of such deposits constitutes an unsafe or unsound practice with respect to such institution. (3) 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 maximum deposit insurance amount, specifying the interest rate to be paid for such amounts, where the agent institution— (i) is well capitalized (as defined in section 38(b)(1)(A)) or has obtained a waiver pursuant to subsection (c) of this section; or (ii) 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 average of the total amount of reciprocal deposits 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 determined to be not well capitalized. (B) Covered deposit The term covered deposit means a deposit that— (i) is submitted for placement through a deposit placement network by an agent institution; and (ii) does not consist of funds that were obtained for the agent institution, directly 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 institution 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 deposit placement network. (E) Reciprocal deposits The term reciprocal deposits means deposits received by an agent institution through a deposit placement 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) Applicability Nothing in this Act shall be construed to limit the application of any provision of the Federal Deposit Insurance Act, other than section 29 of such Act ( 12 U.S.C. 1831f ), to an insured depository institution (as defined in section 3(c) of such Act ( 12 U.S.C. 1813(c) )).