II 116th CONGRESS 2d Session S. 4644 IN THE SENATE OF THE UNITED STATES September 22, 2020 Mr. Jones introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL 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.

1. Short title This Act may be cited as the Minority Depository Institution and Community Bank Deposit Access Act of 2020 . 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 20 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 $1,000,000,000 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. . 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. .