H.R. 3234 · Passed House · Finance and Financial Sector

Keeping Deposits Local Act

Sponsor: Tom Emmer (R-MN)

What it does

• Raises the amount insured depository institutions may accept as reciprocal deposits.
• Creates a tiered system that bases the allowable amount on an institution's total liabilities.
• Allows institutions rated 1, 2, or 3 on the CAMELS scale to qualify to accept reciprocal deposits, instead of requiring an outstanding or good composite rating.

Official summary

This bill increases the amount insured depository institutions may accept as reciprocal deposits. (Reciprocal deposits are used by institutions to increase the availability of deposit insurance by splitting large deposits using a reciprocal network of institutions.) The bill creates a tiered system so that the allowable amount is based on the institution's total liabilities. Additionally, the bill changes certain qualifications insured depository institutions may be required to have to accept reciprocal deposits. Under current law, institutions may qualify by having a composite rating of outstanding or good, among other requirements. The bill allows institutions with a 1, 2, or 3 rating under the CAMELS scale to qualify. (The Uniform Financial Institutions Rating System uses the characteristics of capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk (i.e., CAMELS ratings) to rate the health of financial institutions, with a 1 indicating the highest rating and least degree of supervisory concern and a 5 indicating the lowest rating and highest degree of supervisory concern.)

Latest action

May 21, 2026: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Committee: Senate Banking, Housing, and Urban Affairs