Community Bank Deposit Access Act of 2025

Floor Speech

Mr. Speaker, I rise in support of H.R. 5317, the Community Bank Deposit Access Act of 2025, sponsored by Chairman Hill.

Let me start by thanking the chairman for his focus on supporting community banks and credit unions, including community development financial institutions, or CDFIs, and minority depository institutions, or MDIs.

This bill will allow community banks to receive so-called custodial deposits from larger banks and then use those funds to lend into their communities.

Custodial deposits are shared between banks in a network, allowing them to provide FDIC insurance on amounts larger than $250,000, although for a fee paid by the MDI or community bank.

Mr. Speaker, the original introduced bill would have provided an unnecessary exemption for the largest banks which, as we have discussed, honestly don't need help competing for deposits. I appreciate that Mr. Hill and his staff worked with us on important improvements to narrow the focus of this bill to just support community banks.

Furthermore, as I have said before, I do not believe this reform will singlehandedly get community banks all the help they need to compete for deposits and acquire more small business customers.

Mr. Speaker, I would again urge the chairman and the supporters of this bill to work with me and support advancing deposit insurance reform, like my bill, which takes a data-driven approach that the chairman said he would prefer, with opportunities for stakeholder input and congressional oversight.

I also commend Representatives Lucas, Barr, Meuser, and Stutzman for recently introducing their own deposit insurance reform bills. I couldn't help but notice their bills have a lot of similarities with my bill and with similar bipartisan reform efforts in the Senate.

It has been more than 15 years since Congress updated our deposit insurance framework, and it is time for Congress to comprehensively update it again.

H.R. 5317 is a good piece of that reform effort, and I urge my colleagues to support the chairman's bill, and I reserve the balance of my time.

Mr. Speaker, I again thank the chairman for working with me regarding improvements that were made to the bill in markup to ensure it focused on helping community banks.

Custodial deposits are something that community banks can use as a funding source to help them better serve their communities.

I hope today's vote on this bill and the bill of the gentleman from Minnesota (Mr. Emmer) and the gentlewoman from Ohio (Mrs. Beatty) is just the beginning in our efforts to modernize our deposit insurance framework broadly and to provide even more tools for community banks to compete for deposits from local churches, nonprofits, city governments, and small businesses.

Mr. Speaker, I urge the chairman to work with me and our members to advance broad deposit insurance reform.

In the meantime, I urge the House to advance the chairman's bill, which serves as a good, complementary reform to help our smallest banks compete.

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