The American Bankers Association wrote to Sen. Mark Warner (D-Va.) today in support of S. 1500, a bipartisan bill that would update Section 29 of the Federal Deposit Insurance Act to clarify that reciprocal deposits of another insured depository institution are not considered brokered deposits. The bill is co-sponsored by Sens. Jerry Moran (R-Kan.), Heidi Heitkamp (D-N.D.), David Perdue (R-Ga.), Robert Menendez (D-N.J.), John Boozman (R-Ark.) and Chris Van Hollen (D-Md.).
The association called the bill a “necessary step” toward reforming Section 29, and noted that the evolution of banking practices and technology has led to far more deposits being considered “brokered” by regulators than otherwise should be. The change would “help community banks attract more local deposits to fund loans in their local communities,” ABA added.
