Small and mid-sized banks (those with under $10 billion in assets) would get more flexibility in how certain deposits are counted for regulatory purposes. Specifically, "custodial deposits" — money that a third party manages on behalf of many individual customers and places into a bank — would no longer automatically count as "brokered deposits," a category that normally triggers extra scrutiny and restrictions because regulators worry those funds can be pulled out quickly and destabilize a bank. To qualify for this exception, the bank must be financially healthy (well-capitalized) and in good standing with regulators, or get special permission from the FDIC, the federal agency that insures bank deposits and oversees bank safety, and the custodial deposits can't make up more than 20% of what the bank owes to others. The practical effect is that smaller banks could accept more of these custodial deposits without facing the tighter rules that normally apply to brokered funds, potentially giving them easier access to a larger pool of deposits.