Amid coronavirus challenges, comment period extended 60 days on brokered deposits restrictions

The comment period on proposed rule changes on brokered deposits restrictions applicable to less-than-well-capitalized banks is extended 60 days to June 9, according to the Federal Deposit Insurance Corp. (FDIC), which pointed to the challenges associated with the coronavirus (COVID-19).

The proposal, issued in December, would create a new framework for analyzing certain provisions of the “deposit broker” definition, including “facilitating” and “primary purpose.” It would also establish an application and reporting process with respect to the primary purpose exception. The application process would be available to insured depository institutions and third parties that wish to utilize the exception, according to the proposed rule summary.

In issuing the proposal, the agency said in December that the proposal would “modernize a regulatory framework built for a different era to remove regulatory disincentives to offering deposit accounts to customers through different channels.”

FDIC Extends Comment Period on Modernizing Brokered Deposit Restrictions