A $5bn Cap Became $30bn. The $25bn Bank Gains Least.

Since 11 July, a US bank has been able to treat up to six times as much reciprocal deposit money as non-brokered as it could before — or 1.72 times as much, depending entirely on how large it is.

The FDIC published the rule conforming its own regulations to that statute on 1 September. It is an interim final rule, effective the day it published, with comments due 1 October. The FDIC's own framing is worth keeping in view: because section 902 of the 21st Century ROAD to Housing Act was effective on enactment, the agency says that "relative to a post-statutory baseline these amendments will have no substantive effect". The statute made the change. The rule writes it down.

From one ceiling to three tiers

Since 2018, a qualifying bank could exclude reciprocal deposits from brokered-deposit treatment up to a general cap of "the lesser of $5 billion or 20 percent of the total liabilities" of the institution. One number, one percentage, and a hard stop.

The statute replaced that with a tiered calculation, which the FDIC has now written into 12 CFR 337.6(e)(1). The general cap is the sum of 50% of total liabilities up to $1 billion, 40% of the portion between $1 billion and $10 billion, and 30% of the portion between $10 billion and $96,333,333,333.

That last figure is not arbitrary. It is the exact point at which the third tier reaches $30 billion, which the rule states is the maximum general cap available to any institution. Work backwards from $30 billion through the tiers and $96,333,333,333 is what falls out.

The institution that gains least has $25 billion in liabilities

Because the old cap was the lesser of two things, it behaved differently at different sizes. Below $25 billion in total liabilities, 20% was the binding constraint. At exactly $25 billion, 20% equalled $5 billion, and from there upward the $5 billion ceiling bound instead — flat forever, however large the bank.

The new cap keeps climbing to $96.33 billion. Put the two together and the increase is not monotonic.

A bank with $500 million in liabilities goes from $100 million to $250 million: 2.5 times. A bank with $10 billion goes from $2 billion to $4.1 billion: 2.05 times. A bank with exactly $25 billion goes from $5 billion to $8.6 billion: 1.72 times, the smallest increase anywhere on the curve. A bank with $96.33 billion or more goes from $5 billion to $30 billion: 6 times, and that multiple holds for every institution above that size.

The $25 billion bank does worst because it was the one size that had already extracted the full value of both halves of the old formula.

Read it the other way and the answer reverses

Measured as a share of its own balance sheet, the smallest institutions gain most. The new cap is 50% of liabilities for a bank under $1 billion, 41% at $10 billion, 34.4% at $25 billion, 31.1% at $96.33 billion, and then falls away — 6% at $500 billion, 3% at $1 trillion, because the $30 billion ceiling stops moving while the balance sheet does not.

So there is no single answer to who benefits. Against the old rule, the largest eligible institutions gain most. Against their own size, the smallest do. Neither reading is stated in the rule; both come from the same four numbers in it.

How much money this is actually about

The rule contains its own measurement, taken from 31 March 2026 call report data, the last before the statute took effect.

There were 4,278 FDIC-insured institutions. Of those, 2,089 — 48.8% — reported holding reciprocal deposits at all, totalling $462.8 billion. But only 331 institutions, 7.7% of the industry, reported brokered reciprocal deposits, and those totalled $91.9 billion. That $91.9 billion is the pool the change actually acts on: 19.9% of all reciprocal deposits, and 7.6% of the $1.204 trillion of brokered deposits reported across 1,971 institutions.

The FDIC then counts the institutions whose deposit insurance assessments could fall: 16 established small institutions, 14 large or highly complex institutions, and three more through the brokered deposit adjustment. Thirty-three institutions, or 10% of the 331. The estimated effect on the insurance fund is a reduction in aggregate assessment revenue of $45.8 million a year.

Set that against the $91.9 billion of brokered reciprocal deposits and the relief is worth about five basis points on the affected balances. It is a real number and a small one, and the FDIC adds that against a post-statutory baseline even this is nil, because the statute had already done it.

A rating category was added, and the statute did not finish the job

The second change is smaller in the text and larger in effect. To use the exception at all, a bank must be an "agent institution", and before the Housing Act the first prong of that definition required a composite condition of "outstanding or good", which the FDIC has interpreted as a CAMELS composite rating of 1 or 2.

The statute replaced that with an explicit requirement of a CAMELS composite rating of "1", "2", or "3". The FDIC's own summary of the effect is that this expands "the agent institution definition to include institutions assigned a CAMELS composite rating of '3'", provided they are also well capitalised.

The agency then flags something the statute left behind. Section 902 amended the "outstanding or good" language in the agent institution definition but not the same phrase where it appears in the special cap provision. Read together, the FDIC says, an institution that becomes subject to the special cap may not have that cap calculated on the preceding four quarters at all, but on quarters that are years older. It works through a bank downgraded from 2 to 3 in 2026 and to 4 in 2030, whose special cap would rest on its 2025-2026 holdings, and concludes that the special cap "no longer approximates the status quo" at the moment eligibility is lost.

Effective before comment

The rule took effect on publication. The FDIC invoked the good cause exception at 5 U.S.C. 553(b)(B) to waive both prior notice and comment and the customary 30-day delayed effective date, reasoning that leaving its regulations inconsistent with the amended statute would cause "uncertainty for industry participants". Because no proposed rule was published, the agency also concluded that the Regulatory Flexibility Act's analysis requirements do not apply, while inviting feedback on burden anyway.

The statute took effect on 11 July. The conforming rule took effect 52 days later. The comment period closes 30 days after that, on a rule that already binds.

What to watch

Reciprocal deposits are how a bank places a large customer deposit across a network of other banks so the whole balance stays within insurance limits, and takes matching deposits back. The classification matters because brokered deposits feed into assessment rates and into supervisory views on funding.

The FDIC says the change "may result in increased holdings of reciprocal deposits by IDIs, including by institutions that previously did not utilize reciprocal deposits", and that it cannot estimate how many institutions or how much volume. That is the agency saying it expects new entrants to this funding channel and does not know the size.

Three things to watch. Whether the comment file objects to the CAMELS 3 admission, which is the substantive change rather than the arithmetic one. Whether the unamended "outstanding or good" language in the special cap provision gets fixed. And whether call report data over coming quarters shows reciprocal deposit balances rising fastest in the $25 billion to $96 billion band, where the gap between the old cap and the new one is widest.

This piece reads a rule. It is not legal or compliance advice, and any institution's actual cap depends on its own call report data and supervisory ratings.