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Reciprocal Deposit Regulations (U.S.)

The only active United States federal statute that includes regulations on reciprocal deposits is the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

US FEDERAL STATUTE THAT INCLUDES REGULATIONS ON RECIPROCAL DEPOSITSREGULAT

TITLE:

  • Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA).

NICKNAME:

  • The Crapo Bill is the nickname for the EGRRCPA (S.2115)

SUMMARY:

  • The EGRRCPA PL 115-174 provisions amended the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act; PL 111-203).
  • Under Section 202, it allowed more banks to accept reciprocal deposits wherein reciprocal deposits define deposits that two banks place with each other in equal amounts.

VOTING RECORD IN CONGRESS:

  • With the breakdown of 67 to 31 votes, (50 Republicans, 16 Democrats, and one Independent voted in favor), the Crapo Bill was passed in the Senate in its original form.
  • Of note, although all Republicans voted in favor of the bill, the Democrats were divided, and 16 of those supported the bill while 30 voted against it along with an Independent.

ADDITIONAL INFORMATION

  • HR 764, the United States Reciprocal Trade Act, is still under legislation process wherein supporters argue that the bill helps balance the economic scales and opponents worry that increasing tariffs raise prices for domestic consumers.
  • S. 69, Constitutional Concealed Carry Reciprocity Act of 2019, is still under legislative process wherein the purpose of the bill is to allow reciprocity for the carrying of certain concealed firearms.

RESEARCH STRATEGY

The research team began by looking through federal database sites that record various bills and legislation in the US such as the websites of the Federal Reserve, GovTrack, Congress, and the Office of the Comptroller of the Currency. The search revealed the active federal statute that include regulations on reciprocal deposit — EGRRCPA (Crapo bill) of 2018, which was passed by a winning voting record.
Next, we found references of the other related legislation such as the Constitutional Concealed Carry Reciprocity Act of 2019 and United States Reciprocal Trade Act, which were related to the reciprocal deposit but were still under legislature process. Additionally, the other related statutes in this direction found were either under the stalled status or very old.
As the information required was related to active United States federal statutes, we tried to search through third-party sites such as SIFMA and C-SPAN to find insights on the regulations on reciprocal deposit that could pass/be active in the near future. Through this approach, we that most of the information available was related to the assessments and discussion notice around the already identified statute, EGRRCPA, with no mention of any other active statute on the regulation on reciprocal deposit.
We also searched through multiple news articles and business journals that cover information on the latest regulations being discussed in Congress concerning US financial institutions such as Cornell’s Legal Information Institute, Vox, Forbes, and Investopedia. Through this approach, no relevant insights on possible federal statutes that include regulations on reciprocal deposit were found, and the information available was related to the EGRRCPA or the brokered deposit regulation.

Brokered Deposit Regulations (U.S.)

The United States federal active statutes that include regulations on brokered deposits are; Economic Growth, Regulatory Relief, and Consumer Protection Act(EGRRCPA), H.R. 6158 (115th): Brokered Deposit Affiliate-Subsidiary Modernization Act of 2018

EGRRCPA

  • Economic Growth, Regulatory Relief, and Consumer Protection Act(EGRRCPA) is nicknamed the Crapo Bill.
  • The EGRRCPA e P.L. 115-174 provisions amended the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act; P.L. 111-203), regulatory reform legislation and intended to reduce the regulatory burden involved in mortgage lending and to expand credit availability, especially in certain market segments.
  • The bill was passed by the Senate with ease in the original form with the breakdown of 67 to 31 votes, 50 Republicans, 16 Democrats and one Independent voted in favor of the statute.
  • Even though all the Republicans voted in the favor of the bill, the Democrats were divided with 16 of those supporting the bill, while 30 of them voted against it.

BROKERED DEPOSIT AFFILIATE

  • The H.R. 6158 (115th): Brokered Deposit Affiliate-Subsidiary Modernization Act of 2018 does not have a nickname.
  • The Bill aimed to “amend the Federal Deposit Insurance Act to exclude affiliates and subsidiaries of insured depository institutions in the definition of deposit broker, and for other purposes”. It was noted that the amendments were designed to prevent weak depository institutions from accessing less stable brokered deposits to grow in size.
  • The bill was passed favorably in the original form with the reported breakdown of 34-17 votes from republicans and democrats.
  • The amendment offered by Rep. Waters to give regulators the ability to look at broker deposits as they relate to financial stability was not agreed to in a 20-31 vote.

RESEARCH STRATEGY

We began our research searching through federal database sites, which record various bills and legislation in US along with US Legislation tracker. Through this search we found two active federal statutes that include regulations on brokered deposits. Further, it was found that the other eligible statute “Consumer Transaction Account Protection Act of 2017″ which was to amend the Federal Deposit Insurance Act to provide that the consumer transaction account deposits of an insured depository institution are not considered to be funds obtained by or through a deposit broker, and for other purposes. At present, it is under the “Stalled” stage and not active, therefore we have not included information on this statute in the research. Also, most of the other related statutes in this direction from recent years (or older by last 5 years) were largely found, related to the reciprocal deposits but not brokered deposits.
As the information required was related to the active United States federal statutes, no criteria to triangulate the response was possible. We searched through third party and concluded that there were no additional relevant statutes.
Additionally, we searched through multiple news articles which cover news articles on the latest regulations being discussed in house related to financial institutions. Through this avenue, no relevant insights on possible federal statutes include regulations on brokered deposits were found and the information available was related to the limited attention paid by the FDIC on the Brokered deposits sector specifically, wherein the last amendment took place in 1991.

TDM

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