House Passes Pair of Bills Softening Bank Deposit Restrictions

The House passed a pair of bills Wednesday aimed at loosening restrictions on bank deposits, sending the Senate standalone versions of language from its housing package.

The chamber passed, 393-16, a bill (H.R. 5317) to allow qualified community banks to accept some custodial deposits without triggering heightened regulatory scrutiny.

Custodial deposits are treated as brokered deposits, and subject to additional regulations, under current law. The bill would explicitly exempt custodial deposits from being considered brokered if the total amount of the funds in question doesn’t exceed 20% of the bank’s liabilities and the bank meets certain other requirements. ...