Initial research checked September 27, 2026. Source dates, operative law and proposed changes are distinguished; examples are illustrative.
The version distinction that changes the calculation
H.R. 3234 passed the House in May 2026 and was referred to the Senate. Its reciprocal-deposit formula used a top liability tier reaching $250 billion. The later enacted authority is section 902 of Public Law 119-101, dated July 11, 2026, which uses an upper tier of $96,333,333,333. Treating the House bill’s $250 billion endpoint as the enacted rule would overstate capacity for larger institutions. [1, 2]
The standalone bill’s procedural history and the policy’s enactment through another vehicle can both be true. Recommended source order is the enacted law, current statutory text and applicable implementing material, followed by earlier bills for legislative history. A favorable House vote alone is not the legal basis for changing a regulatory classification.
How the enacted tiers work
Section 902 excludes a sum of eligible reciprocal deposits from brokered treatment: 50% of the first $1 billion of an agent institution’s total liabilities, 40% of liabilities above $1 billion through $10 billion, and 30% above $10 billion through $96,333,333,333. These are marginal tiers, not one percentage applied to the entire balance sheet. The law also changes the specified supervisory-rating language to include CAMELS ratings 1, 2 or 3. Other eligibility conditions still require review. [2]
This article’s calculations illustrate that enacted formula. They do not determine whether a particular institution or arrangement satisfies all statutory and regulatory conditions. The relevant balance-sheet input is total liabilities, not total assets or only deposits. A model using the wrong denominator can produce a plausible but incorrect answer.
Worked examples: capacity is not a funding forecast
Illustrative institution A has $1 billion in total liabilities. The tier calculation is 50% × $1 billion = $500 million. Institution B has $5 billion: $500 million plus 40% × $4 billion = $2.1 billion. Institution C has $12 billion: $500 million plus $3.6 billion plus 30% × $2 billion = $4.7 billion.
At the enacted upper endpoint, the formula produces approximately $30 billion of capacity. The arithmetic does not establish that an institution can attract that amount, that all of it qualifies or that it should use the maximum. Compare the calculation with actual eligible reciprocal balances and the institution’s internal funding limits.
Recommended treasury reporting shows regulatory capacity separately from desired funding, executable network capacity, concentration limits and stressed retention. Conflating those measures can make a legal change appear to create liquidity that has not actually arrived.
What insurance does and does not change
FDIC guidance describes the standard insurance amount as $250,000 per depositor, per insured bank, for each ownership category. Deposits in the same ownership category at the same bank must be considered together. Reciprocal placement can spread eligible deposits across institutions, but the customer’s actual coverage depends on the arrangement and applicable insurance rules. [3]
My assessment is that the customer proposition may be convenient access to coverage while maintaining a primary banking relationship. The operating challenge is keeping placement records, ownership information and disclosures accurate. A customer’s pre-existing deposits at a destination institution can matter to the coverage analysis.
The brokered-deposit classification and insurance coverage answer different questions. Neither should be used as shorthand for the other. Marketing and treasury documentation should state the actual arrangement clearly, including any relevant limitations on access or placement.
Economics and stress behavior
Illustrative pricing: a network or service expense of 10 basis points on $100 million of balances equals $100,000 annually before other expenses. Compare all-in funding cost with alternatives, including customer rates, operating expense, collateral requirements and relationship value. A lower regulatory burden does not guarantee a lower economic cost.
For liquidity, test whether balances are rate-sensitive, linked to a small group of customers or dependent on one network. Insurance can reduce one reason to leave, but customers may still move funds because of pricing, service problems or their own cash needs. Model observable behavior rather than assume that nonbrokered means stable.
Rapid growth creates a second risk: the bank may deploy new funding faster than it can originate sound assets or manage interest-rate exposure. A funding opportunity should enter the asset-liability plan with credit capacity, liquidity buffers and capital constraints considered together.
Implementation and the next evidence
Recommended implementation starts with a documented eligibility assessment, independently checked tier calculations and a comparison of the enacted text with any existing policy or vendor configuration. Preserve the source version used. Reconcile reporting fields to the balance sheet and establish an owner for changes in status or balances.
The law calls for an FDIC study, in consultation with the Federal Reserve, on reciprocal deposits and a report within six months of enactment. Its examination of stress behavior and end users should be useful evidence, rather than a reason to assume in advance that every reciprocal arrangement behaves alike. [2]
My view would strengthen if the added capacity supports diversified relationship funding and sustainable local lending at a competitive cost. It would weaken if a bank relies on maximum legal capacity, ignores concentration or commits funding to assets whose duration and liquidity are poorly matched. The immediate decision is how much the bank can prudently use, not simply how much the statute permits.