Findings and purpose

(a)

Findings

Congress finds that—(1)restrictions on the acceptance of brokered deposits were enacted in 1989 in order to prevent the abuse of the deposit insurance system by troubled depository institutions;(2)since the enactment of the restrictions described in paragraph (1), technological and demographic developments have changed the way in which depository institutions seek and source deposits, and, as a result, many deposits that are classified as brokered pose little, if any, risk to the deposit insurance system; and(3)in today’s economy, the greatest risk to the deposit insurance system is asset growth by depository institutions that are less than well capitalized.(b)

Purpose

The purpose of this Act, and the amendments made by this Act, is to remove the current (as of the date of enactment of this Act) restrictions on brokered deposits and to authorize the Federal Deposit Insurance Corporation to issue regulations that restrict asset growth by depository institutions that are less than well capitalized.

Asset growth restriction

(a)

Asset growth restriction

Section 29 of the Federal Deposit Insurance Act (12 U.S.C. 1831f) is amended—(1)in the section heading, by striking

Brokered deposits

and inserting

Asset growth restrictions

; and(2)by striking subsections (a) through (i), and inserting the following:

(a)

Definitions

In this section, the terms average, critically undercapitalized, and well capitalized have the meanings given those terms in section 38(b). (b)

Regulations required

Not later than 18 months after the date of enactment of the Asset Growth Restriction Act of 2022, the Corporation, in consultation with the Board of Governors of the Federal Reserve System and the Comptroller of the Currency, shall promulgate regulations imposing a restriction on average total asset growth for insured depository institutions that are less than well capitalized to maintain safety and soundness and minimize risk to the Deposit Insurance Fund.(c)

Maximum level of growth

As part of the regulations required under subsection (b), the Corporation shall—(1)establish a framework to impose 1 or more maximum levels of growth in average total assets that an insured depository institution that is less than well capitalized may not exceed, and provide appropriate adjustments for growth resulting from corporate restructuring such as acquisitions or mergers; and(2)establish a waiver process to enable the Corporation to waive the maximum level established in paragraph (1) upon application by an insured depository institution that is not critically undercapitalized, based on conditions set by the Corporation.(d)

Exemptions and additional restrictions

As part of the regulations required under subsection (b), the Corporation may—(1)exempt specified classes of assets from the asset growth restriction if the Corporation, in the discretion of the Corporation, determines that growth in those assets does not present risks to the safety and soundness of an insured depository institution; and(2)impose additional restrictions on insured depository institutions to prevent circumvention or evasion of this section by an insured depository institution resulting from actions taken by the insured depository institution by, or through, affiliates of the insured depository institution.(e)

Orders

The Corporation may, by order—(1)establish a less restrictive level of growth restriction for a particular insured depository institution that is less than well capitalized, or a group of insured depository institutions that are less than well capitalized, if the Corporation finds that such a level will not pose an undue risk to the Deposit Insurance Fund; and(2)establish a more restrictive level of growth restriction for a particular insured depository institution that is less than well capitalized, or a group of insured depository institutions that are less than well capitalized, if the Corporation finds that such a level is necessary to protect the Deposit Insurance Fund.(f)

Conforming regulations

The Corporation shall revise the regulations of the Corporation, as in existence on the date of enactment of the Asset Growth Restriction Act of 2022, to ensure that those regulations conform to the requirements of this section.

(b)

Rule of construction

An insured depository institution that is in compliance with the regulations or orders issued pursuant to section 29 of the Federal Deposit Insurance Act (12 U.S.C. 1831f), as amended by subsection (a) of this section, shall be deemed to be in compliance with the asset growth standard established pursuant to section 39 of that Act (12 U.S.C. 1831p–1).(c)

Technical and conforming amendment

Section 274(5) of the Truth in Savings Act (12 U.S.C. 4313(5)) is amended by inserting , as that provision was in effect on the day before the date of enactment of the Asset Growth Restriction Act of 2022 after Act.