Congress quietly raises limits on brokered deposits for mid-sized banks

What it does

This bill increases the amount of reciprocal deposits (deposits placed through brokers at other banks) that small and mid-sized banks can hold without triggering deposit-broker restrictions. It raises the threshold from a flat cap to a tiered system based on bank size, allowing smaller banks to keep more brokered deposits on their books. The bill also updates the regulatory standard used to qualify for this treatment, replacing an older rating system with the current CAMELS rating scale.

Why we flagged it

The bill's operative mechanism is a targeted regulatory exemption for a specific class of financial institutions (banks using reciprocal deposits). It reduces compliance burden and expands funding options for smaller and mid-sized banks by raising thresholds for brokered-deposit classification.

What the text implies

• Tiered thresholds create incentive for banks to grow liabilities to reach higher exemption tiers, potentially encouraging rapid balance-sheet expansion and risk-taking.
• Reduced brokered-deposit monitoring may obscure funding fragility at mid-sized banks, delaying early-warning signals to regulators and depositors.
• Banks with $1B–$10B in liabilities (the tier receiving the largest proportional benefit) gain competitive advantage over both smaller and larger peers, potentially consolidating market share in the mid-market segment.
• CAMELS rating update modernizes the standard but may inadvertently broaden eligibility if the new rating scale is less stringent than the prior 'outstanding or good' standard.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Community and regional banks gain operational flexibility and lower compliance costs, potentially enabling them to compete with larger institutions and maintain lending capacity. However, the bill may reduce FDIC's ability to monitor deposit concentration risk and brokered-deposit flows, which are early-warning signals for bank instability — a cost to depositor protection and financial stability.

Who stands to gain

• community banks
• regional banks
• mid-sized depository institutions
• deposit brokers (indirectly, through expanded client base)

Named in the bill

Federal Deposit Insurance Corporation (FDIC), Federal Deposit Insurance Act, reciprocal deposits, deposit brokers, agent institutions, CAMELS rating system

Where it stands

4 cosponsors: 2 Democrats, 2 Republicans.

• Sep 10, 2025 — Introduced · Congress.gov: “Introduced in Senate”
• Sep 10, 2025 — Referred to Senate Committee on Banking, Housing, and Urban Affairs · Congress.gov: “Read twice and referred to the Committee on Banking, Housing, and Urban Affairs”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $690,000 in lobbying spend. A filing names 10 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Mike Rounds, the sponsor, reported $1,681,790 in PAC receipts in the 2026 cycle.

• Global Medical Response Inc — $540,000 on 1 filing
• Western Alliance Bancorporation — $150,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.