House Passes Whip Emmer’s Bill to Increase Flexibility for Local Banks

WASHINGTON – House Majority Whip Tom Emmer (R-Minn.) released the following statement after the U.S. House of Representatives passed his legislation, HR. 3234, the Keeping Deposits Local Act, to provide local banks with additional flexibility regarding reciprocal deposits. The bill passed by a vote of 405-0.

Whip Emmer: “The Keeping Deposits Local Act, which has been a priority for nearly a decade, passed the House today with nonpartisan support. 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. We urge our Senate colleagues to pass this bill quickly.”

House Committee on Financial Services Chairman French Hill (R-Ark.): “Banks are important economic drivers and deserve a regulatory framework that lets them compete, grow, and better serve their customers. 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. This is exactly the kind of smart, targeted reform at the heart of the Committee’s Making Community Banking Great Again agenda. I was proud to support this legislation’s passage in the House, and I urge my colleagues in the Senate to maintain this momentum and get it across the finish line.”

Background: 

Whip Emmer introduced the Keeping Deposits Local Act on May 7, 2025, and it was approved by the House Financial Services Committee on September 16, 2025.

The Keeping Deposits Local Act allows community banks, which often have small branch networks, to accept a greater amount of reciprocal deposits before becoming subject to stringent brokered-deposit regulations, helping them make loans in their local communities. 

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.

Rebecca Romero Rainey, President and CEO, The Independent Community Bankers of America (ICBA): “ICBA and the nation’s community bankers congratulate Rep. Emmer on the House’s passage of his Keeping Deposits Local Act to implement needed revisions to reciprocal deposits policy. We strongly support this bill to help community banks support local credit needs by creating a scale of tiered thresholds, and we encourage the Senate to quickly take up and pass this common-sense legislation.”

Joe Witt, President and CEO, Minnesota Bankers Association: “The Minnesota Bankers Association appreciates Congressman Emmer’s leadership on this important reciprocal deposits legislation. As depository lenders, banks are reliant on stable and predictable deposits to fund their loans. 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.”