[House Report 119-369]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-369
======================================================================
COMMUNITY BANK DEPOSIT ACCESS ACT OF 2025
_______
November 4, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 5317]
The Committee on Financial Services, to whom was referred
the bill (H.R. 5317) to amend the Federal Deposit Insurance Act
to ensure that certain custodial deposits of well capitalized
insured depository institutions are not considered to be funds
obtained by or through deposit brokers, and for other purposes,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Committee Consideration.......................................... 3
Related Hearings................................................. 4
Committee Votes.................................................. 4
Committee Oversight Findings..................................... 6
Performance Goals and Objectives................................. 6
Committee Cost Estimate.......................................... 6
New Budget Authority and CBO Cost Estimate....................... 6
Unfunded Mandates Statement...................................... 6
Earmark Statement................................................ 6
Federal Advisory Committee Act Statement......................... 7
Applicability to the Legislative Branch.......................... 7
Duplication of Federal Programs.................................. 7
Section-by-Section Analysis of the Legislation................... 7
Changes in Existing Law Made by the Bill, as Reported............ 7
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Community Bank Deposit Access Act of
2025''.
SEC. 2. LIMITED EXCEPTION FOR CUSTODIAL DEPOSITS.
(a) In General.--Section 29 of the Federal Deposit Insurance Act (12
U.S.C. 1831f) is amended by adding at the end the following:
``(j) Limited Exception for Custodial Deposits.--
``(1) In general.--Custodial deposits of an eligible
institution shall not be considered to be funds obtained,
directly or indirectly, by or through a deposit broker to the
extent that the total amount of such custodial deposits does
not exceed an amount equal to 20 percent of the total
liabilities of the eligible institution.
``(2) Definitions.--In this subsection:
``(A) Custodial deposit.--The term `custodial
deposit' means a deposit that is not deposited at an
insured depository institution in return for fees paid
by the insured depository institution pursuant to an
agreement with a third party and that would otherwise
be considered to be obtained, directly or indirectly,
by or through a deposit broker, if the deposit is
deposited at 1 or more insured depository institutions,
for the purpose of providing or maintaining deposit
insurance for the benefit of a third party, by or
through any of the following, each acting in a formal
custodial or fiduciary capacity for the benefit of a
third party:
``(i) An insured depository institution
serving as agent, trustee, or custodian.
``(ii) A trust entity controlled by an
insured depository institution serving as
agent, trustee, or custodian.
``(iii) A State-chartered trust company
serving as agent, trustee, or custodian.
``(iv) A plan administrator or investment
advisor, acting in a formal custodial or
fiduciary capacity for the benefit of a plan.
``(B) Eligible institution.--The term `eligible
institution' means an insured depository institution
that accepts custodial deposits, if the insured
depository institution has less than $10,000,000,000 in
total assets as reported on the consolidated report of
condition and income as reported quarterly to the
appropriate Federal banking agency and--
``(i)(I) when most recently examined under
section 10(d) was assigned a composite rating
of 1, 2, or 3 under the Uniform Financial
Institutions Rating System (or an equivalent
rating under a comparable rating system); and
``(II) is well capitalized; or
``(ii) has obtained a waiver pursuant to
subsection (c).
``(C) Plan.--The term `plan' has the meaning given
the term in section 3 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002).
``(D) Plan administrator.--The term `plan
administrator' has the meaning given the term
`administrator' in section 3 of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1002).
``(E) Well capitalized.--The term `well capitalized'
has the meaning given the term in section 38(b).''.
(b) Interest Rate Restriction.--Section 29 of the Federal Deposit
Insurance Act (12 U.S.C. 1831f), as amended by subsection (a), is
further amended by adding at the end the following:
``(k) Restriction on Interest Rate Paid on Certain Custodial
Deposits.--
``(1) Definitions.--In this subsection--
``(A) the terms `custodial deposit', `eligible
institution', and `well capitalized' have the meanings
given those terms in subsection (j); and
``(B) the term `covered insured depository
institution' means an insured depository institution
that while acting as an eligible institution under
subsection (j), accepts custodial deposits while not
well capitalized.
``(2) Prohibition.--A covered insured depository institution
may not pay a rate of interest on custodial deposits that are
accepted while not well capitalized that, at the time the funds
or custodial deposits are accepted, significantly exceeds the
limit set forth in paragraph (3).
``(3) Limit on interest rates.--The limit on the rate of
interest referred to in paragraph (2) shall be not greater
than--
``(A) the rate paid on deposits of similar maturity
in the normal market area of the covered insured
depository institution for deposits accepted in the
normal market area of the covered insured depository
institution; or
``(B) the national rate paid on deposits of
comparable maturity, as established by the Corporation,
for deposits accepted outside the normal market area of
the covered insured depository institution.''.
Purpose and Summary
H.R. 5317, the Community Bank Deposit Access Act of 2025,
was introduced on September 11, 2025, by Republican
Representative French Hill (AR-02). This bill would amend the
Federal Deposit Insurance Act to establish that custodial
deposits of an insured depository institution are not
considered to be brokered deposits as long as the total amount
does not exceed 20 percent of an institution's total
liabilities. This applies to well-capitalized institutions with
less than $10 billion in assets that were assigned a composite
rating of 1, 2, or 3 under the Uniform Financial Institutions
Rating System, or have obtained a waiver.
Background and Need for Legislation
Custodial deposit accounts are deposit accounts opened by a
third party at a bank on behalf of others who may own the funds
but typically do not have a direct relationship with the bank.
Custodial deposit accounts are popular among various
businesses, including mortgage servicers, securities broker-
dealers, and attorneys, among others. Recently, custodial
deposit accounts have become popular with financial technology
companies. Such an arrangement presents several benefits for
both banks and third parties. For banks, custodial deposits
provide access to new, low-cost sources of additional funding.
For third parties, they offer the convenience of maintaining a
single account with a bank--rather than opening hundreds or
even thousands of individual accounts for each customer--along
with the added advantage of deposit insurance. The FDIC has
long recognized that deposit insurance can apply on a pass-
through basis--meaning that even if a custodial deposit account
holds more than $250,000, the funds will still be insured, as
the actual beneficiaries each hold less than $250,000 and their
funds are simply pooled within the custodial account.
This bill applies only to well-capitalized and well-managed
institutions with less than $10 billion in assets, allowing
small community banks to increase access to diverse sources of
funding.
Committee Consideration
119TH CONGRESS
On September 11, 2025, Representative Hill introduced H.R.
5317, the Community Bank Deposit Access Act of 2025. The bill
was referred solely to the Committee on Financial Services.
The bill was attached to the September 9, 2025, hearing
titled ``Promoting the Health of the Banking Sector: Reforming
Resolution and Broadening Funding Access for Long-Term
Resilience.''
On September 16, 2025, the Committee on Financial Services
met in open session to consider, among others, H.R. 5317. The
Committee ordered H.R. 5317, as amended, to be favorably
reported to the House of Representatives.
116TH CONGRESS
On September 18, 2019, Democratic Representative Charlie
Crist (FL-13) introduced H.R. 4384, the Community Bank Deposit
Access Act of 2019, with Representative Hill as an original
cosponsor. The bill was referred solely to the Committee on
Financial Services.
Related Hearings
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 5317:
The Subcommittee on Financial Institutions held a September
9, 2025, hearing titled ``Promoting the Health of the Banking
Sector: Reforming Resolution and Broadening Funding Access for
Long-Term Resilience.'' A draft version of the bill was
attached to the hearing. The subcommittee heard testimony from
the following witnesses: Mr. Dory Wiley, President and CEO,
Commerce Street Holdings; Mr. James B. Barresi, Partner, Squire
Patton Boggs; Mr. Hugh Carney, Executive Vice President of
Financial Institution Policy and Regulatory Affairs, American
Bankers Association; Dr. Norbert Michel, Vice President and
Director, Cato Institute Center for Monetary and Financial
Alternatives; and Mr. Robert James, President and CEO, Carver
Financial Corporation, on behalf of the National Bankers
Association.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include record
votes on the motion to report legislation and amendments
thereto.
On September 16, 2025, the Committee ordered H.R. 5317, as
amended, to be reported favorably to the House by a recorded
vote of 48 yeas and 2 nays, a quorum being present. (Record
Vote No. FC-197).
The Committee considered the following amendments to H.R.
5317:
Representative Hill offered an amendment in
the nature of a substitute, designated HILLAR_047,
which made minor edits and technical changes. This
amendment was adopted by a voice vote.
Representative Hill offered an amendment
(No. 1), designated HILLAR_050. This amendment would
clarify conditions for an eligible institution to
include those that were assigned a composite rating of
1, 2, or 3 under the Uniform Financial Institutions
Rating System or an equivalent rating under a
comparable rating system. This amendment was adopted by
a voice vote.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 5317 is to expand
access to diverse sources of funding for small financial
institutions that are well-managed and well-capitalized.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 5317. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee will adopt as its own
the cost estimate by the Director of the Congressional Budget
Office once it has been prepared.
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee will adopt as
its own the cost estimate for the bill prepared by the Director
of the Congressional Budget Office. However, a cost estimate
was not made available to the Committee in time for the filing
of this report. The Chairman of the Committee shall cause such
estimate to be printed in the Congressional Record upon its
receipt by the Committee.
Unfunded Mandates Statement
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Chairman of the Committee shall cause
such estimate to be printed in the Congressional Record upon
its receipt by the Committee.
Earmark Statement
In compliance with clause 9 of rule XXI of the Rules of the
House of Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.
Federal Advisory Committee Act Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides the short title is the ``Community Bank
Deposit Access Act''.
Section 2. Limited exception for custodial deposits
Section 2 provides a limited exception for custodial
deposits of an eligible institution to not be considered funds
obtained by or through a deposit broker if the total amount of
such custodial deposits does not exceed 20 percent of the
liabilities of the institution. This section defines the term
``custodial deposit'' as a deposit that is not deposited at an
eligible institution in return for fees in an arrangement with
a third party, that would otherwise be considered to be
obtained by a deposit broker, if the deposit is deposited at
one or more institutions. This section defines the term
``eligible institution'' as an insured depository institution
with less than $10 billion in assets that has received a
composite rating of outstanding or good when most recently
examined, is well capitalized, or has obtained a waiver.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italics and existing law in which no change is
proposed is shown in roman):
FEDERAL DEPOSIT INSURANCE ACT
* * * * * * *
SEC. 29. BROKERED DEPOSITS.
(a) In General.--An insured depository institution that is
not well capitalized may not accept funds obtained, directly or
indirectly, by or through any deposit broker for deposit into 1
or more deposit accounts.
(b) Renewals and rollovers treated as acceptance of funds.--
Any renewal of an account in any troubled institution and any
rollover of any amount on deposit in any such account shall be
treated as an acceptance of funds by such troubled institution
for purposes of subsection (a).
(c) Waiver Authority.--The Corporation may, on a case-by-case
basis and upon application by an insured depository institution
which is adequately capitalized (but not well capitalized),
waive the applicability of subsection (a) upon a finding that
the acceptance of such deposits does not constitute an unsafe
or unsound practice with respect to such institution.
(d) Limited Exception for Certain Conservatorships.--In the
case of any insured depository institution for which the
Corporation has been appointed as conservator, subsection (a)
shall not apply to the acceptance of deposits (described in
such subsection) by such institution if the Corporation
determines that the acceptance of such deposits--
(1) is not an unsafe or unsound practice;
(2) is necessary to enable the institution to meet
the demands of its depositors or pay its obligations in
the ordinary course of business; and
(3) is consistent with the conservator's fiduciary
duty to minimize the institution's losses.
Effective 90 days after the date on which the institution was
placed in conservatorship, the institution may not accept such
deposits.
(e) Restriction on Interest Rate Paid.--
(1) Definitions.--In this subsection--
(A) the terms ``agent institution'',
``reciprocal deposits'', and ``well
capitalized'' have the meanings given those
terms in subsection (i); and
(B) the term ``covered insured depository
institution'' means an insured depository
institution that--
(i) under subsection (c) or (d),
accepts funds obtained, directly or
indirectly, by or through a deposit
broker; or
(ii) while acting as an agent
institution under subsection (i),
accepts reciprocal deposits while not
well capitalized.
(2) Prohibition.--A covered insured depository
institution may not pay a rate of interest on funds or
reciprocal deposits described in paragraph (1) that, at
the time that the funds or reciprocal deposits are
accepted, significantly exceeds the limit set forth in
paragraph (3).
(3) Limit on interest rates.--The limit on the rate
of interest referred to in paragraph (2) shall be--
(A) the rate paid on deposits of similar
maturity in the normal market area of the
covered insured depository institution for
deposits accepted in the normal market area of
the covered insured depository institution; or
(B) the national rate paid on deposits of
comparable maturity, as established by the
Corporation, for deposits accepted outside the
normal market area of the covered insured
depository institution.
(f) Additional Restrictions.--The Corporation may impose, by
regulation or order, such additional restrictions on the
acceptance of brokered deposits by any institution as the
Corporation may determine to be appropriate.
(g) Definitions Relating to Deposit Broker.--
(1) Deposit broker.--The term ``deposit broker''
means--
(A) any person engaged in the business of
placing deposits, or facilitating the placement
of deposits, of third parties with insured
depository institutions or the business of
placing deposits with insured depository
institutions for the purpose of selling
interests in those deposits to third parties;
and
(B) an agent or trustee who establishes a
deposit account to facilitate a business
arrangement with an insured depository
institution to use the proceeds of the account
to fund a prearranged loan.
(2) Exclusions.--The term ``deposit broker'' does not
include--
(A) an insured depository institution, with
respect to funds placed with that depository
institution;
(B) an employee of an insured depository
institution, with respect to funds placed with
the employing depository institution;
(C) a trust department of an insured
depository institution, if the trust in
question has not been established for the
primary purpose of placing funds with insured
depository institutions;
(D) the trustee of a pension or other
employee benefit plan, with respect to funds of
the plan;
(E) a person acting as a plan administrator
or an investment adviser in connection with a
pension plan or other employee benefit plan
provided that that person is performing
managerial functions with respect to the plan;
(F) the trustee of a testamentary account;
(G) the trustee of an irrevocable trust
(other than one described in paragraph (1)(B)),
as long as the trust in question has not been
established for the primary purpose of placing
funds with insured depository institutions;
(H) a trustee or custodian of a pension or
profitsharing plan qualified under section
401(d) or 403(a) of the Internal Revenue Code
of 1986; or
(I) an agent or nominee whose primary purpose
is not the placement of funds with depository
institutions.
(3) Inclusion of depository institutions engaging in
certain activities.--Notwithstanding paragraph (2), the
term ``deposit broker'' includes any insured depository
institution that is not well capitalized (as defined in
section 38), and any employee of such institution,
which engages, directly or indirectly, in the
solicitation of deposits by offering rates of interest
which are significantly higher than the prevailing
rates of interest on deposits offered by other insured
depository institutions in such depository
institution's normal market area.
(4) Employee.--For purposes of this subsection, the
term ``employee'' means any employee--
(A) who is employed exclusively by the
insured depository institution;
(B) whose compensation is primarily in the
form of a salary;
(C) who does not share such employee's
compensation with a deposit broker; and
(D) whose office space or place of business
is used exclusively for the benefit of the
insured depository institution which employs
such individual.
(h) Deposit Solicitation Restricted.--An insured depository
institution that is undercapitalized, as defined in section 38,
shall not solicit deposits by offering rates of interest that
are significantly higher than the prevailing rates of interest
on insured deposits--
(1) in such institution's normal market areas; or
(2) in the market area in which such deposits would
otherwise be accepted.
(i) Limited Exception for Reciprocal Deposits.--
(1) In general.--Reciprocal deposits of an agent
institution shall not be considered to be funds
obtained, directly or indirectly, by or through a
deposit broker to the extent that the total amount of
such reciprocal deposits does not exceed the lesser
of--
(A) $5,000,000,000; or
(B) an amount equal to 20 percent of the
total liabilities of the agent institution.
(2) Definitions.--In this subsection:
(A) Agent institution.--The term ``agent
institution'' means an insured depository
institution that places a covered deposit
through a deposit placement network at other
insured depository institutions in amounts that
are less than or equal to the standard maximum
deposit insurance amount, specifying the
interest rate to be paid for such amounts, if
the insured depository institution--
(i)(I) when most recently examined
under section 10(d) was found to have a
composite condition of outstanding or
good; and
(II) is well capitalized;
(ii) has obtained a waiver pursuant
to subsection (c); or
(iii) does not receive an amount of
reciprocal deposits that causes the
total amount of reciprocal deposits
held by the agent institution to be
greater than the average of the total
amount of reciprocal deposits held by
the agent institution on the last day
of each of the 4 calendar quarters
preceding the calendar quarter in which
the agent institution was found not to
have a composite condition of
outstanding or good or was determined
to be not well capitalized.
(B) Covered deposit.--The term ``covered
deposit'' means a deposit that--
(i) is submitted for placement
through a deposit placement network by
an agent institution; and
(ii) does not consist of funds that
were obtained for the agent
institution, directly or indirectly, by
or through a deposit broker before
submission for placement through a
deposit placement network.
(C) Deposit placement network.--The term
``deposit placement network'' means a network
in which an insured depository institution
participates, together with other insured
depository institutions, for the processing and
receipt of reciprocal deposits.
(D) Network member bank.--The term ``network
member bank'' means an insured depository
institution that is a member of a deposit
placement network.
(E) Reciprocal deposits.--The term
``reciprocal deposits'' means deposits received
by an agent institution through a deposit
placement network with the same maturity (if
any) and in the same aggregate amount as
covered deposits placed by the agent
institution in other network member banks.
(F) Well capitalized.--The term ``well
capitalized'' has the meaning given the term in
section 38(b)(1).
(j) Limited Exception for Custodial Deposits.--
(1) In general.--Custodial deposits of an eligible
institution shall not be considered to be funds
obtained, directly or indirectly, by or through a
deposit broker to the extent that the total amount of
such custodial deposits does not exceed an amount equal
to 20 percent of the total liabilities of the eligible
institution.
(2) Definitions.--In this subsection:
(A) Custodial deposit.--The term ``custodial
deposit'' means a deposit that is not deposited
at an insured depository institution in return
for fees paid by the insured depository
institution pursuant to an agreement with a
third party and that would otherwise be
considered to be obtained, directly or
indirectly, by or through a deposit broker, if
the deposit is deposited at 1 or more insured
depository institutions, for the purpose of
providing or maintaining deposit insurance for
the benefit of a third party, by or through any
of the following, each acting in a formal
custodial or fiduciary capacity for the benefit
of a third party:
(i) An insured depository institution
serving as agent, trustee, or
custodian.
(ii) A trust entity controlled by an
insured depository institution serving
as agent, trustee, or custodian.
(iii) A State-chartered trust company
serving as agent, trustee, or
custodian.
(iv) A plan administrator or
investment advisor, acting in a formal
custodial or fiduciary capacity for the
benefit of a plan.
(B) Eligible institution.--The term
``eligible institution'' means an insured
depository institution that accepts custodial
deposits, if the insured depository institution
has less than $10,000,000,000 in total assets
as reported on the consolidated report of
condition and income as reported quarterly to
the appropriate Federal banking agency and--
(i)(I) when most recently examined
under section 10(d) was assigned a
composite rating of 1, 2, or 3 under
the Uniform Financial Institutions
Rating System (or an equivalent rating
under a comparable rating system); and
(II) is well capitalized; or
(ii) has obtained a waiver pursuant
to subsection (c).
(C) Plan.--The term ``plan'' has the meaning
given the term in section 3 of the Employee
Retirement Income Security Act of 1974 (29
U.S.C. 1002).
(D) Plan administrator.--The term ``plan
administrator'' has the meaning given the term
``administrator'' in section 3 of the Employee
Retirement Income Security Act of 1974 (29
U.S.C. 1002).
(E) Well capitalized.--The term ``well
capitalized'' has the meaning given the term in
section 38(b).
(k) Restriction on Interest Rate Paid on Certain Custodial
Deposits.--
(1) Definitions.--In this subsection--
(A) the terms ``custodial deposit'',
``eligible institution'', and ``well
capitalized'' have the meanings given those
terms in subsection (j); and
(B) the term ``covered insured depository
institution'' means an insured depository
institution that while acting as an eligible
institution under subsection (j), accepts
custodial deposits while not well capitalized.
(2) Prohibition.--A covered insured depository
institution may not pay a rate of interest on custodial
deposits that are accepted while not well capitalized
that, at the time the funds or custodial deposits are
accepted, significantly exceeds the limit set forth in
paragraph (3).
(3) Limit on interest rates.--The limit on the rate
of interest referred to in paragraph (2) shall be not
greater than--
(A) the rate paid on deposits of similar
maturity in the normal market area of the
covered insured depository institution for
deposits accepted in the normal market area of
the covered insured depository institution; or
(B) the national rate paid on deposits of
comparable maturity, as established by the
Corporation, for deposits accepted outside the
normal market area of the covered insured
depository institution.
* * * * * * *
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