Community Bank Deposit Access Act of 2025
- Bill Number
- H.R. 5317
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Finance and Financial Sector
- Status
- Passed House
- Latest Action
- 2026-05-21: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2026-05-23T06:53:30Z
AI-Generated Summary
Purpose of the Legislation
This Act aims to provide regulatory relief to small, well-capitalized insured depository institutions by excluding certain custodial deposits from classification as brokered deposits under federal banking rules, while imposing related interest rate limits and offsetting costs through a reduction in Federal Reserve funds.
Key Provisions
- Limited Exception for Custodial Deposits: Amends Section 29 of the Federal Deposit Insurance Act to exclude custodial deposits from being treated as funds obtained through deposit brokers, provided they do not exceed 20 percent of an eligible institution's total liabilities.
- Definitions:
- A custodial deposit is a deposit placed at insured institutions by entities acting in a formal custodial or fiduciary role (such as insured depository institutions, trust entities, state-chartered trust companies, or plan administrators) to provide or maintain deposit insurance for a third party, without the institution paying fees under an agreement with a third party.
- An eligible institution is an insured depository institution with less than $10 billion in total assets that either holds a composite rating of 1, 2, or 3 and is well capitalized, or has obtained a waiver.
- Related terms reference the Employee Retirement Income Security Act of 1974 for plans and administrators, and Section 38(b) for "well capitalized."
- Interest Rate Restriction: Prohibits covered insured depository institutions (those accepting custodial deposits while not well capitalized) from paying interest rates on such deposits that significantly exceed local or national market rates for similar deposits.
- Funding Offset: Reduces the dollar amount in Section 7(a)(3)(A) of the Federal Reserve Act by $4 million, effective September 1, 2036.
Significant Changes to Existing Law
- Introduces a new subsection (j) to the Federal Deposit Insurance Act creating a size- and condition-based exception to brokered deposit rules specifically for custodial deposits.
- Adds a new subsection (k) imposing interest rate caps on custodial deposits accepted by institutions that fall below well-capitalized status.
- Makes a one-time reduction to the Federal Reserve's discretionary surplus fund to cover implementation costs.
Potential Impacts
- On Government Agencies: The Federal Deposit Insurance Corporation gains authority to administer the new exception and interest rate rules; the Federal Reserve faces a minor reduction in its surplus fund.
- On Citizens: May increase deposit options and stability for customers of small banks, including those using custodial arrangements for retirement plans or trusts.
- On International Relations: No direct effects identified.
Main Stakeholders Affected
- Small community banks and other insured depository institutions with under $10 billion in assets.
- Custodians and fiduciaries such as trust companies, plan administrators, and investment advisors.
- Depositors and third-party beneficiaries relying on insured custodial arrangements.
- The Federal Deposit Insurance Corporation and the Federal Reserve.
Notable Legal, Constitutional, or Political Implications
- Represents targeted regulatory relief under existing FDIC authority without altering core constitutional banking powers or creating new federal mandates.
- Ties the exception to objective criteria like asset size, examination ratings, and capitalization status to limit scope.
- Includes a long-term funding mechanism that avoids immediate budgetary impacts.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-05-21: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2026-05-20: Motion to reconsider laid on the table Agreed to without objection.
- 2026-05-20: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 393 - 16 (Roll no. 179). (Roll call 179)
- 2026-05-20: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by the Yeas and Nays: (2/3 required): 393 - 16 (Roll no. 179). (Roll call 179)
- 2026-05-20: Considered as unfinished business. (consideration: CR H3645-3646)
- 2026-05-19: At the conclusion of debate, the Yeas and Nays were demanded and ordered. Pursuant to the provisions of clause 8, rule XX, the Chair announced that further proceedings on the motion would be postponed.
- 2026-05-19: DEBATE - The House proceeded with forty minutes of debate on H.R. 5317.
- 2026-05-19: Considered under suspension of the rules. (consideration: CR H3586-3588; text: CR H3586)
- 2026-05-19: Mr. Hill (AR) moved to suspend the rules and pass the bill, as amended.
- 2025-11-04: Placed on the Union Calendar, Calendar No. 321.
- 2025-11-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-369.
- 2025-11-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-369.
- 2025-09-16: Ordered to be Reported (Amended) by the Yeas and Nays: 48 - 2.
- 2025-09-16: Committee Consideration and Mark-up Session Held
- 2025-09-11: Referred to the House Committee on Financial Services.
Bill Versions
- Community Bank Deposit Access Act of 2025 — issued 2026-05-20 — PDF (8 pages)
- Community Bank Deposit Access Act of 2025 — issued 2025-09-11 — PDF (6 pages)
- Community Bank Deposit Access Act of 2025 — issued 2026-05-21 — PDF (6 pages)
- Community Bank Deposit Access Act of 2025 — issued 2025-11-04 — PDF (8 pages)