Mid-Size, Small Banks To Benefit From Deposit Insurance Reforms In Housing Bill

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Mid-Size, Small Banks To Benefit From Deposit Insurance Reforms In Housing Bill

TD Securities (USA) LLC POLICY NOTE

June 17, 2026

■WRG Financial Services Mid-Size, Small Banks To Benefit From

Deposit Insurance Reforms In Housing Bill

Jaret Seiberg THE TD COWEN INSIGHT

202 868 5313

The Senate voted Tuesday 87 to 8 to begin debating a housing bill that includes several

jaret.seiberg@tdsecurities.com

banking provisions, including one on reciprocal deposits. We view this provision as modestly

positive for mid-size and small banks. Given the bipartisan support for the housing package,

we expect this to become law in the coming weeks.

What Is Happening

House and Senate leaders have agreed to include banking provisions in the bipartisan housing

bill that should be enacted into law in the next few weeks.

These include the following:

■Expands the amount of reciprocal deposits a bank may possess without them being

deemed brokered. A bank may have reciprocal deposits equal to 50% of total liabilities for

the first $1 billion of total liabilities. That ratio drops to 40% for the next $9 billion of total

liabilities and 30% for total liabilities of between $10 billion and $96.33 billion.

■Requires a study on reciprocal deposits with a focus on their benefits and risks.

■Language exempting custodial deposits from the definition of brokered deposits if they

make up less than 20% of total liabilities and the bank has less than $10 billion of assets.

■Raises the threshold for an 18-month exam cycle to $6 billion from $3 billion.

■Eases the process to create new banks with a focus on capital raising and data sources.

■Mandates a study on how to preserve and expand rural banks.

■Bars the Federal Reserve from issuing a digital dollar, though the prohibition expires on Dec.

31, 2030.