Community Bank Deposit Access Act of 2025

This legislation amends the Federal Deposit Insurance Act to redefine certain custodial deposits, aiming to ease regulatory burdens for smaller financial institutions. Its primary purpose is to ensure that specific types of custodial deposits held by eligible insured depository institutions are not considered funds obtained through deposit brokers. The bill introduces a limited exception for these custodial deposits, provided they do not exceed 20 percent of the institution's total liabilities. An eligible institution is generally defined as one with less than $10 billion in assets, a strong examination rating, and a "well capitalized" status. These custodial deposits are those placed by fiduciaries for the benefit of a third party to maintain deposit insurance. Furthermore, the bill modifies existing interest rate restrictions. It specifies that a covered institution, including an eligible institution accepting custodial deposits while not well capitalized, cannot pay an interest rate on these funds that significantly exceeds local market rates or the national average for comparable deposits.