Pub. 15 2018 Issue 2

20 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G N E W M E X I C O R E A L I Z E D R E A M S lesser-known provision of a new law just changed the market for deposits, and it could not have come at a better time for banks, espe- cially community banks. The provision, which is part of the regulatory relief package for banks just signed by President Trump, provides that most recipro- cal deposits are no longer treated as brokered. As a result, well-capitalized banks can now attract more large-dollar, local relationships and, in turn, have more cost-effective funding on hand to finance lending in their communities. In recent months, U.S. banks have been bracing for in- creased competition for customer deposits. According to the Bank Executive Business Outlook Survey (2018, Q1) a record number of bank respondents (76 %) reported facing more competition for deposits over the past year and almost 90 percent believe it is only going to get tougher. 1 Source: Bank Executive Business Outlook Survey 1st Quarter, 2018 Good News for Banks: Congress Makes Way for Reciprocal Deposits By Glenn Martin, Regional Director, Promontory Interfinancial Network, LLC, Arlington, VA A