Rep. Tom Emmer
U.S. House Majority Whip Tom Emmer (R-MN) cheered action by the U.S. House of Representatives to pass his bipartisan bill to raise the amount insured depository institutions may accept as reciprocal deposits, which are used by institutions to increase the availability of deposit insurance by splitting large deposits using a reciprocal network of institutions.
The House on May 20 voted 405-0 to advance the Keeping Deposits Local Act, H.R. 3234, to the U.S. Senate, which referred it to the U.S. Senate Banking, Housing, and Urban Affairs Committee.
“The Keeping Deposits Local Act, which has been a priority for nearly a decade, passed the House today with nonpartisan support,” Rep. Emmer said on Wednesday. “Our bill gives local banks the flexibility they need to grow, compete, and invest in their communities.
“We’re fostering local, relationship-oriented banking by helping protect deposits, supporting lending, and keeping dollars invested in the communities where they belong,” he added. “We urge our Senate colleagues to pass this bill quickly.”
Rep. Emmer sponsored H.R. 3234 in May 2025 alongside three original cosponsors, including U.S. Rep. Joyce Beatty (D-OH), to also change certain qualifications insured depository institutions may be required to have to accept reciprocal deposits.
H.R. 3234 in September 2025 passed the U.S. House Financial Services Committee, which is chaired by U.S. Rep. French Hill (R-AR).
“Banks are important economic drivers and deserve a regulatory framework that lets them compete, grow, and better serve their customers,” said Rep. Hill. “Majority Whip Emmer and Congresswoman Beatty’s bill would give banks greater flexibility to accept reciprocal deposits without triggering stricter brokered deposit requirements, freeing up more capital for local loans and investments.”
The bill builds upon previous bipartisan legislation introduced by Rep. Emmer that was enacted by Congress in 2018, and excludes most reciprocal deposits from being treated as brokered deposits.
H.R. 3234 is supported by the Independent Community Bankers of America and the Minnesota Bankers Association.
“This commonsense bill provides certainty for Minnesota’s community and mid-size banks and helps ensure they can continue supporting local businesses, consumers, and communities,” said Joe Witt, president and CEO of the Minnesota Bankers Association.