On October 8, 2024, the Federal Deposit Insurance Corporation
("FDIC") announced an extension to the comment period
on its notice of proposed rulemaking ("NPR") regarding
brokered deposits. Originally, the comment period for the PR was to
close on October 22, 2024, but is now planned to close on November
21, 2024.
The original NPR, "Unsafe and Unsound Banking Practices:
Brokered Deposits Restrictions," was published by the FDIC
this past August. The NPR would revise 12 C.F.R. Parts 303 and 337
with a goal of improving the analysis of "deposit
brokers" and ensure accurate reporting of such deposits.
The NPR seeks to achieve these goals with a few key revisions, among others. First, the FDIC is proposing to update the definition of a "deposit broker, " particularly with respect to the analysis of the "primary purpose" exception to the definition, which is critical for anyone trying to avoid brokered deposit classification. Second, the NPR continues to exempt well-capitalized institutions from brokered deposit restrictions, but will generally enhance the rules for other insured depository institutions to "strengthen the safety and soundness of the banking system by ensuring that less than well-capitalized institutions are restricted from relying on brokered deposits to support risky, rapid growth."
The NPR can be found at https://www.federalregister.gov/documents/2024/08/23/2024-18214/unsafe-and-unsound-banking-practices-brokered-deposits-restrictions.
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