For years, banks used reciprocal deposits narrowly: giving large-balance customers access to expanded FDIC insurance coverage while keeping the primary banking relationship in place. That value still holds. What changed on July 11, 2026 is the scale, and with it the strategic role of the category.
The 21st Century ROAD to Housing Act, enacted as Public Law 119-101, replaced the old non-brokered reciprocal deposit cap, the lesser of $5 billion or 20 percent of total liabilities, with a tiered formula that raises the ceiling for nearly every bank. It also widened the agent-institution ratings test to include well-capitalized CAMELS 1, 2, and 3 institutions.
The New Formula Changes the Strategic Question
Under Section 902, qualifying reciprocal deposits are excluded from brokered treatment up to 50 percent of the first $1 billion of liabilities, 40 percent of the next $9 billion, and 30 percent of the portion above $10 billion through roughly $96.33 billion. That produces a maximum statutory capacity of about $30 billion.
| Total liabilities | Previous cap | New statutory capacity |
| $1 billion | $200 million | $500 million |
| $10 billion | $2.0 billion | $4.1 billion |
| $50 billion | $5.0 billion | $16.1 billion |
| $96.33 billion+ | $5.0 billion | $30.0 billion maximum |
Illustrative amounts based on the statutory formula and the total liabilities shown. Previous cap reflects the lesser of $5 billion or 20% of total liabilities.
For most banks, the first tier matters most. A bank with $1 billion in liabilities goes from $200 million of non-brokered reciprocal capacity to $500 million. Across the industry, the change increases potential non-brokered reciprocal capacity by more than $2 trillion, from about $1.3 trillion to $3.5 trillion. Banks that once had to choose which deposit types got their reciprocal capacity can now plan an enterprise-wide deposit strategy. You can model your own number with the reciprocal capacity calculator (actual capacity depends on agent-institution eligibility and other applicable requirements).
Industry figures are R&T estimates; $3.5T is derived by applying the statutory formula to total-liabilities data reported in public Call Reports.
Reciprocal Deposits Are Becoming Strategic Infrastructure
The most important shift is broad adoption and acceptance. Reciprocal deposits are no longer just an insurance feature or a niche funding product. They can be used to connect relationship growth, funding strategy, liquidity planning, and depositor confidence.
Capacity is an opportunity, not a strategy. A bank that simply raises an internal cap may gain little. A bank that identifies the best sources of funds, models the economics, and equips its relationship teams turns the same statutory change into durable growth.
A Law in Effect, With Mechanics Still Catching Up
Section 902 amended Section 29 of the Federal Deposit Insurance Act and is effective now. The FDIC has issued an interim final rule conforming 12 CFR 337.6 to the new framework, published in the Federal Register and effective September 1, 2026. FFIEC Call Report instructions are expected to be conformed by year-end.
Institutions weighing expansion as the statute, rule, and Call Report instructions are conformed should document their interpretation, coordinate with Call Report advisers, and involve the appropriate regulators when warranted. The rule also invites public comment for 30 days after publication.
Do not assume reclassification automatically lowers deposit insurance assessments. In fact, the FDIC’s interim final rule estimates that only 33 institutions nationwide could see a lower assessment as a result of the change. Growth can affect the assessment base, capital ratios, and other pricing inputs, so a lower reported brokered figure may be favorable, neutral, or offset by other changes. Model the full economics rather than infer them. The opportunity is real, and so is the need for institution-specific advice.
Five Moves for Bank Leaders
Early-mover advantage does not mean racing to the ceiling. It means using the planning window to turn added capacity into a governed, repeatable capability.
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1
Quantify the runway.
Calculate statutory capacity under the tiered formula, compare it with current reciprocal balances, and identify internal policy limits.
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2
Map the opportunity.
Rank business lines and customer segments by deposit potential, relationship value, operational fit, and time to market.
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3
Model the full economics.
Compare all-in funding cost, liquidity value, capital and assessment effects, collateral requirements, and stress-case behavior.
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4
Build reporting governance.
Align finance, treasury, compliance, and counsel on classification, Call Report treatment, documentation, and regulator communication.
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5
Operationalize growth.
Select program structures, integrations, and controls, then equip bankers and customers with clear, consistent messaging before launch.
From Expanded Capacity to Competitive Advantage
Public Law 119-101 confirms what leading institutions have already started to recognize. Reciprocal deposits can do more than expand access to deposit insurance. They can be a core part of how a bank attracts, retains, and deploys deposits.
The institutions that benefit most will not treat the law as a one-time limit increase. They will use it to modernize deposit strategy across the franchise, pairing relationship insight with sound economics, operational discipline, and transparent governance.
R&T Deposit Solutions helps institutions turn that opportunity into action, from capacity analysis and use-case prioritization to program design, integration, private-label marketing, and banker education. Contact us to begin a reciprocal deposit strategy discussion.