Sec. 503. Community Bank Deposit Access
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Section 29 of the Federal Deposit Insurance Act ( 12 U.S.C. 1831f ) is amended by adding at the end the following: 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. If an insured depository institution ceases to be an eligible institution because it no longer satisfies any of the criteria in paragraph (3)(B), the Corporation may, on a case-by-case basis and upon application, provide a waiver to permit the institution to continue to be treated as an eligible institution for purposes of paragraph (1), for a specific or indefinite period of time, if the Corporation determines that failure to grant such a waiver would negatively impact the safety and soundness of the insured depository institution.
In this subsection: 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:
An insured depository institution serving as agent, trustee, or custodian. A trust entity controlled by an insured depository institution serving as agent, trustee, or custodian. A State-chartered trust company serving as agent, trustee, or custodian. A plan administrator or investment advisor, acting in a formal custodial or fiduciary capacity for the benefit of a plan. 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— 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 is well capitalized; has not yet been examined under section 10(d) and the deposits of which first became insured under this Act during the current calendar year or during the immediately preceding calendar year; or has obtained a waiver pursuant to subsection (c).
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 ). 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 ). The term well capitalized has the meaning given the term in section 38(b). . 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:
In this subsection— the terms custodial deposit , eligible institution , and well capitalized have the meanings given those terms in subsection (j); and 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. 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).
The limit on the rate of interest referred to in paragraph
(2)shall be not greater than— 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 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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