|
The 21st Century ROAD to Housing Act expands the acceptability of reciprocal deposits and custodial deposits. It also reinforces NBID’s mission to ensure core deposit infrastructure is bank-owned and bank-managed for long-term stability, alignment, and shared upside.
On July 11, 2026, the 21st Century ROAD to Housing Act (H.R. 6644) (the “Act”) became law. The Act is a landmark win for community and regional bank funding, containing two provisions that meaningfully change the deposit landscape. The first substantially expands the reciprocal deposits a bank can hold as non-brokered. The second lets well-capitalized banks under $10 billion in assets treat custodial deposits as core funding for the first time, which is designed to apply to deposits sourced through NBID.
Congress has chosen to expand reciprocal deposits as its primary approach to deposit insurance reform. Both chambers passed the bill by wide margins, 85 to 5 in the Senate and 358 to 32 in the House. Those margins confirm what thousands of community banks already know: reciprocal deposits are a safe, stable, and proven way to protect depositors, retain large balances, and keep funding local. The vote also signals confidence in and reaffirms the importance of community banks to the growth and success of the economy and American banking. With Congress’s approval, reciprocal deposits are firmly established in the banking system, and their use will keep growing.
|
Reciprocal Deposits, Now Foundational Infrastructure
|
Reciprocal deposit usage has nearly tripled in recent years to roughly half a trillion dollars. More than 2,000 banks actively hold reciprocal deposits according to latest call reports. Expanding the framework will grow that market further. Reciprocal deposits have become foundational banking infrastructure, and every bank now faces a practical question: who should own the infrastructure they rely on?
The financial system’s most important utilities, including Visa at formation, DTCC, SWIFT, and The Clearing House, were built as coalitions owned by their member institutions. NBID has brought the same model to reciprocal deposits. It is the first reciprocal deposit network owned and governed by the banks that use it. Member banks receive preferential pricing, share in its economics through a profit share, elect its board, and set its direction. Twelve of NBID’s fourteen board seats are held by banks of varying sizes and regions (nbid.com/board). The remaining seats are held by the network’s chosen operator and by Gene Ludwig as Chairman of the Board, former Comptroller of the Currency and a pioneer of reciprocal deposits. Since inception in 2025, more than 740 banks have joined (nbid.com/bank-list). The speed and scale of NBID’s growth reflects the importance and resonance of its mission.
|
“Reciprocal deposits level the playing field for community institutions. The value of a reciprocal network is the banks themselves. Through NBID, member institutions can benefit from the networks they power.”
Gene Ludwig, 27th Comptroller of the Currency, NBID Board Director and Chairman
|
|
“Deposits are the foundation of our industry, and controlling this essential asset is critical, particularly for community and regional banks. By keeping governance in the hands of member banks, we ensure the NBID network operates as a true coalition on behalf of its participants.”
John Asbury, CEO, Atlantic Union Bank and NBID Board Director
|
|
“Reciprocal networks allow us to better serve clients of all sizes. Through NBID, we finally have oversight over a service that has quickly become essential to our growth and stability, and we benefit financially from its success.”
Chris Maher, CEO, OceanFirst Bank and NBID Board Director
|
|
“NBID’s bank-governed model offers a compelling way for community and regional banks to collaborate with oversight, alignment, and transparency over critical deposit network infrastructure.”
Kenneth Kelly, Chairman & CEO, First Independence Bank and NBID Board Director
|
|
Two Wins, With the Second for Banks Under $10 Billion
|
The Act carries two specific deposit changes for banks, both folded into a larger housing package. The first comes from the Keeping Deposits Local Act and replaces today’s flat cap on reciprocal deposits (currently, the lesser of 20% of total liabilities or $5 billion) with a tiered schedule that stacks like tax brackets. Specifically, a bank will be able to treat reciprocal deposits as core, non-brokered funding up to:
| • |
A $1B bank moves from roughly $200M to $500M of non-brokered reciprocal capacity. |
| • |
A $10B bank moves from about $2B to roughly $4.1B. |
| • |
A $50B bank moves from about $5B to roughly $16.1B. |
| • |
Eligibility widens to well-capitalized banks rated CAMELS 1, 2, or 3, where today it stops at 1 or 2. |
|
The Act includes a second win. Its incorporation of the Community Bank Deposit Access Act provisions let well-capitalized banks under $10 billion in assets treat “custodial deposits” as core, non-brokered funding, up to 20% of total liabilities. NBID’s one-way deposit placement was designed for this structure. Deposits sourced through NBID and held with a qualifying custodian are designed to qualify as core funding for eligible receiving banks. That gives those banks balance-sheet flexibility from the day the change takes effect.
Together, the two provisions enlarge the reciprocal market and give community banks a bigger, more durable tool to compete, grow, and thrive. NBID puts that tool, and the infrastructure behind it, in the hands of banks themselves.
Banks evaluating how to grow under the new framework or with questions regarding the legislation can learn more at nbid.com, by reaching out to contact@nbid.com, or by calling (332) 333-1069.
|
