Bankers Say S. 2155’s Reciprocal Deposit Provision Most Helpful

When asked to rank eight key provisions of S. 2155 — the new regulatory reform law — based on their likelihood to positively affect their institution, community and midsize bank executives said that the law’s provision amending the Federal Deposit Insurance Act to make most reciprocal deposits non-brokered ranked highest.

In a survey conducted by Promontory Interfinancial Network, 37 percent of bankers gave that provision the highest ranking on a scale of one to five, more than for any other legislative provision tested. Additionally, 58 percent said they plan to start using or expand their use of reciprocal deposits immediately or very soon because of the new law, and another 29 percent said they would consider doing so in the future. The other two highest-ranked provisions were those expanding eligibility for an 18-month exam cycle and an exemption from reporting the recently expanded Home Mortgage Disclosure Act data points.

The survey also asked bankers for their perspectives on the economy in the year ahead. In general, bankers were less optimistic about the trajectory of the economy over the next 12 months than they were a year ago; 49 percent expected conditions to improve, compared to 60 percent last year. In addition, more bankers than last year predicted increased competition for deposits and higher funding costs. Expectations about loan demand remained mostly the same, as did expectations about access to capital.