A final rule on treatment of banks’ reciprocal deposits under the recently enacted regulatory reform law will take effect 30 days after publication in the Federal Register – slated Monday – for an early March implementation.
The effective date of the final rule – adopted by the Federal Deposit Insurance Corp. (FDIC) Board in December – is another victim of the 35-day partial federal government shutdown, which ended Jan. 26. The board adopted the final rule Dec. 19 (which had been proposed in September). The measure implements requirements of last year’s regulatory relief law, the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA, S. 2155).
Although the board’s decision came right before the federal shutdown began on Dec. 22, the final rule was not published before then and had to wait for publication. Had the federal government shutdown not intervened, the final rule most likely would have already taken effect.
Adopted unchanged from the agency’s September proposal, the final rule excepted capped amounts of reciprocal deposits from being considered brokered deposits for institutions meeting minimum capital and exam rating requirements.
Under the final rule’s “general cap,” well-capitalized and well-rated institutions will not be required to treat reciprocal deposits – generally speaking, deposits obtained from a deposit placement network in exchange for funds placed into the network – as brokered deposits up to the lesser of 20% of their total liabilities or $5 billion. The rule also provides a “special cap” for institutions that are either not well-rated or not well-capitalized.