Keeping Deposits Local Act

What this does

This bill lets banks classify more of their reciprocal deposits as local funds instead of brokered funds under the Federal Deposit Insurance Act. It sets the exempt amount as a tiered share of a bank's total liabilities: 50 percent of liabilities up to $1 billion, 40 percent of the portion between $1 billion and $10 billion, and 30 percent of the portion between $10 billion and $250 billion. It widens which banks qualify by letting institutions with a CAMELS supervisory rating of 3, not just 1 or 2, count as an agent institution. It orders the FDIC to study reciprocal deposits and report to the House and Senate banking committees within six months. It also cuts the Federal Reserve's discretionary surplus fund cap by $28 million, effective September 1, 2036.