US Federal Senate Bill SB2757

US Federal 2025-2026 Regular Session

• Introduced: 9/10/25
• Refer: 9/10/25

Caption

Keeping Deposits Local Act

Summary

The Keeping Deposits Local Act would amend the Federal Deposit Insurance Act to expand the amount of reciprocal deposits that an insured depository institution may hold without those deposits being treated as funds obtained by or through a deposit broker. Reciprocal deposits are deposits placed through a network of banks that allow customers to access deposit insurance coverage across multiple institutions. Under current law, only certain amounts are exempt from brokered-deposit treatment; this bill replaces that framework with a tiered formula tied to an institution’s total liabilities. Specifically, the bill would allow larger amounts of reciprocal deposits to avoid brokered-deposit classification based on the size of the agent institution’s liabilities: 50% of liabilities up to $1 billion, 40% of liabilities between $1 billion and $10 billion, 30% between $10 billion and $250 billion, 20% between $250 billion and $1 trillion, and 2% above $1 trillion. The bill also revises the definition of an eligible agent institution by requiring a CAMELS rating of 1, 2, or 3, rather than the current standard of being found to have a composite condition of outstanding or good.

Impact

The bill would directly amend Section 29(i) of the Federal Deposit Insurance Act, changing federal treatment of reciprocal deposits and the brokered-deposit rules that apply to insured depository institutions. In practice, it would likely make it easier for qualifying banks to gather and retain reciprocal deposits without triggering restrictions associated with brokered deposits, potentially affecting liquidity management, deposit competition, and regulatory treatment for banks of different sizes. The change would primarily affect insured depository institutions, especially those participating in reciprocal deposit networks and those seeking to use deposits as a stable funding source.

Sentiment

Based on the bill text and the limited available context, the measure appears to be framed positively as a bank-regulatory relief and local-deposit retention proposal. The title and structure suggest support for community and regional banks by allowing more deposits to remain within local institutions. There is no recorded committee debate or vote history in the provided materials, so no formal opposition or support can be measured from proceedings; however, the policy direction indicates likely interest from banks that use reciprocal deposit networks and from lawmakers favoring reduced regulatory constraints.

Contention

The main policy tension is between expanding banks’ flexibility to use reciprocal deposits and preserving the prudential purpose of brokered-deposit limits. Supporters would likely argue that the current thresholds are too restrictive and that the bill helps banks compete for deposits and keep funds local. Critics, if any, may worry that broadening the exemption could weaken safeguards intended to limit reliance on potentially less stable funding sources, especially for larger institutions. The CAMELS-rating requirement also suggests a concern that only relatively sound institutions should benefit from the expanded treatment.