In March, the Senate passed the 21st Century ROAD to Housing Act (H.R. 6644), which included additions made by Senators. The bill includes language to reward communities that build more housing supply, ease environmental review of new construction, rethink regulations that hamper additional lending for small-dollar mortgages, and expand tenant assistance and protections. With the bill back in the House to review the Senate’s changes, House leadership released a draft that made still further amendments. On Wednesday, the revised bill passed the House by a vote of 396-13. Importantly, the House version has numerous provisions that are of great interest to banks. [Click for more]

• The Community Bank Deposit Access Act (Section 901 – H.R. 5317) to allow custodial deposits to be held by community banks without being considered brokered deposits, provided they do not exceed 20 percent of total liabilities. Brokered deposits are subject to certain capital and interest-rate restrictions. This provision would help community banks maintain lower funding costs, expand lending opportunities, and serve their communities by attracting stable, low-cost funding. 

• The Keeping Deposits Local Act (Section 902 – H.R. 3234) to raise the percentage threshold of reciprocal deposits that may be held by a bank without being considered brokered deposits. Reciprocal deposits are swapped among banks participating in a network and result in higher aggregate levels of deposit insurance coverage. Raising the percentage of reciprocal deposits allowed would assist banks approaching the current-law threshold and support lending needs.

• The TRUST Act (Section 903 – H.R. 4478) to provide well-managed and well-capitalized financial institutions with up to $6 billion in assets to qualify for an 18-month exam cycle. These reforms provide exam relief without compromising safety and soundness and would allow more community banks to direct more resources toward serving their communities.

• The Advancing the Mentor-Protégé Program for Small Financial Institutions Act (Section 908 – H.R. 3709) to establish a Treasury Financial Agent program enabling partnerships between Minority Depository Institutions (MDIs), rural community banks, and other financial institutions. This legislation reinforces and supports the critical role of MDIs and rural community banks as a lifeline in their communities, providing tailored financial products, and fostering greater economic growth.

• The American Access to Banking Act (Section 909 – H.R. 4544) to promote the formation of de novo community banks by streamlining the application process and provide for review of capital raising. A separate provision (Section 910), based on the Promoting New Bank Formation Act, would create a two-year pilot program to promote the creation of de novo banks, especially in rural areas, by providing more regulatory, capital and lending flexibility for these banks.

• The Rural Depositories Revitalization Study Act (Section 911 – H.R. 6536) to require the federal banking agencies to study improving the growth, capital adequacy, and profitability of rural depository institutions.