Bill Overview
Title: Minority Depository Institution and Community Bank Deposit Access Act of 2022
Description: This bill specifies that certain custodial deposits at eligible institutions shall not be considered to be brokered deposits, which are subject to additional regulatory requirements, including those related to liquidity. The bill generally defines a custodial deposit as a deposit made by a certain entity serving as an agent, trustee, or custodian at an insured depository institution for the purpose of providing deposit insurance for the benefit of a third party. Among other requirements, the bill provides that an eligible institution includes small depository institutions, community development financial institutions, and minority depository institutions. Additionally, the bill specifies that only low-income credit unions and minority depository institutions that are federally insured credit unions are eligible for certain community development revolving loans.
Sponsors: Sen. Scott, Tim [R-SC]
Target Audience
Population: People served by minority depository institutions, community banks, and low-income credit unions globally
Estimated Size: 20000000
- The bill impacts insured depository institutions, particularly small depository institutions, community development financial institutions, and minority depository institutions.
- Institutions such as low-income credit unions and minority depository institutions will have changes in how their deposits are classified, affecting their regulatory requirements.
- Customers and communities served by these institutions, often including underserved and minority populations, will indirectly be impacted through changes in their financial service providers.
Reasoning
- This policy is designed to impact financial institutions like minority depository institutions and low-income credit unions which often serve underserved populations, including minorities and those in low-income brackets.
- The policy's financial directives are likely to alter how these institutions manage their deposits and interact with regulatory frameworks, potentially enhancing their capacity to offer services to their communities.
- Considering the $20,000,000 budget over ten years, the direct effects are primarily on the institutions, with indirect effects on their customers.
- The diversity of interviewee backgrounds reflects different levels and kinds of impacts, offering a glimpse into how broader demographics might experience the changes.
Simulated Interviews
Small Business Owner (Atlanta, Georgia)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- I hope the policy allows our local credit union to offer better terms.
- Access to more liquidity could mean more loans for expanding my business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Credit Union Employee (Chicago, Illinois)
Age: 32 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Regulatory changes could mean better opportunities for our credit union.
- I'm cautiously optimistic that this could result in job stability and career growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 7 |
Retired (New York, New York)
Age: 60 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- I'm not sure how this policy impacts me directly, but if my bank improves, it might offer better services.
- I hope this policy keeps my local bank stable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Tech Entrepreneur (Los Angeles, California)
Age: 27 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- I'm excited if this policy unlocks more funds for startups like mine in minority areas.
- Better financial services lead to better tech innovation in my community.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 7 |
Community Organizer (Houston, Texas)
Age: 40 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- This policy could enhance our local banks' ability to support community projects.
- I'm eager to see how financial institutions will respond and support our initiatives.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 6 |
Bank Manager (Miami, Florida)
Age: 55 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- The regulatory relief could help us reduce compliance costs greatly.
- It could translate to more services and better rates for our clients.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 8 | 8 |
Teacher (Dallas, Texas)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- Any support for community banks could improve financial literacy initiatives.
- I'd love to see more educational resources become available as banks stabilize.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Automobile Worker (Detroit, Michigan)
Age: 38 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Improved bank conditions might help us with better loan terms.
- Less regulatory burden means more focused services on the community.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Single Parent (Phoenix, Arizona)
Age: 34 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- If our credit union remains stable, so does my savings.
- I worry about regulation but hope this policy helps.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 5 | 4 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 4 | 4 |
Financial Advisor (Tucson, Arizona)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- This policy could diversify investment opportunities in minority communities.
- I am interested in how this opens up economic growth potentials.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Cost Estimates
Year 1: $2000000 (Low: $1000000, High: $3000000)
Year 2: $2000000 (Low: $1000000, High: $3000000)
Year 3: $2000000 (Low: $1000000, High: $3000000)
Year 5: $2000000 (Low: $1000000, High: $3000000)
Year 10: $2000000 (Low: $1000000, High: $3000000)
Year 100: $2000000 (Low: $1000000, High: $3000000)
Key Considerations
- The reclassification of deposits may shift risk in the financial system if not monitored appropriately.
- In the long term, community development might be positively impacted, leading to economic growth in underserved areas.
- Potential reduction in administrative overhead for small and minority depository institutions.