119-HR-3234 Journalist Public Summary

H.R. 3234 – Keeping Deposits Local Act: Public Summary

Headline Summary: A bipartisan proposal to help community and regional banks keep large local deposits by loosening how much of their “reciprocal deposits” count against brokered‑deposit limits, and to require an FDIC study of the risks and benefits.

What It Does: The bill adjusts caps so that a portion of a bank’s reciprocal deposits does not count as brokered funding, using tiered percentages tied to the bank’s total liabilities. It also broadens which banks can use reciprocal deposits by allowing institutions with regulator safety ratings of 1, 2, or 3 (on the CAMELS scale) to qualify. Finally, it directs the FDIC—working with the Federal Reserve—to study how reciprocal deposits have performed since 2018, compare them with other funding options, and report back to Congress within six months of enactment.

• Who’s For It: Bipartisan House sponsors and backers, including Reps. Tom Emmer (R‑MN), Joyce Beatty (D‑OH), Dan Meuser (R‑PA), and Gwen Moore (D‑WI), plus additional cosponsors from both parties. Supporters say the bill would help community and regional banks keep local government, nonprofit, and business deposits while staying within FDIC rules, which they argue supports local lending and economic stability.
• Who’s Against It: No recorded committee opposition (the bill advanced 51–0). Some watchdogs and risk‑focused critics may worry that easing brokered‑deposit treatment could encourage greater reliance on potentially volatile funding if not paired with strong risk management.

What’s Next: On May 19, 2026, the House debated the bill under a fast‑track process for broadly supported measures, but the final vote was postponed. The House would need to reschedule and pass it before it can move to the Senate.