Unsafe and Unsound Banking Practices: Brokered Deposits and Interest Rate Restrictions
The FDIC is finalizing revisions to its regulations relating to the brokered deposits and interest rate restrictions that apply to less than well capitalized insured depository institutions. For brokered deposits, the final rule establishes a new framework for analyzing certain provisions of the “deposit broker” definition, including “facilitating” and “primary purpose.” For the interest rate restrictions, the FDIC is amending its methodology for calculating the national rate, the national rate cap, and the local market rate cap. Further, the FDIC is explaining when nonmaturity deposits are accepted and when nonmaturity deposits are solicited for purposes of applying the brokered deposits and interest rate restrictions.
NOTE: This final rule was published in the Federal Register after the Biden administration issued a memorandum calling on executive agencies and departments to hold off on publishing new rules pending review, with certain exceptions. The extent of that directive’s impact on this final rule is unclear.
|Date proposed:||Dec. 12, 2019|
|Comments due date:||
June 9, 2020
|Final rule effective date:||April 1, 2021; with an extended compliance date of Jan. 1, 2022, as provided in section I(C)(4)|
|Rule compliance date:|
|Related Reg Report item(s):||
‘New framework’ for determining what makes a brokered deposit ‘brokered’ envisioned in proposal