Keeping Deposits Local Act

This bill makes it easier for banks to keep local deposits in their communities. It raises how much “reciprocal deposits” can count as regular deposits, not “brokered” deposits. Reciprocal deposits are when a bank places part of a customer’s large deposit at other banks to stay within insurance limits, and gets matching deposits back. The bill sets tiered limits based on a bank’s total liabilities, allowing larger portions to be treated as regular deposits (for example, 50% of the first $1 billion, 40% of amounts from $1–$10 billion, 30% from $10–$250 billion, 20% from $250 billion–$1 trillion, and 2% above $1 trillion) . It also updates who can use this treatment, tying it to banks with CAMELS ratings of 1, 2, or 3, which generally indicates stronger condition than lower ratings .

In plain terms, the goal is to let stable banks handle more large, local deposits without facing extra limits, which could help keep money circulating in hometowns and small businesses .

• Who is affected: Insured banks that use reciprocal deposits; their customers and local communities .
• What changes: Higher tiered amounts of reciprocal deposits are treated like regular (not brokered) deposits; eligibility tied to CAMELS ratings 1–3 .
• When: The text describes the changes but does not state an effective date .