On December 15, 2020, the FDIC issued its final rule revising its regulation regarding brokered deposits. TBS has been actively engaged with regulators, banks and financial intermediates as the rule has been finalized and further clarification is underway.
TBS has created this Resource Center as a single destination for industry participants to access FDIC FAQ updates, information on the TBS response, and other relative news to help you navigate the new rule. Check back often as new updates will be added as they are forthcoming.
ABOUT THE RULE
The rule amends the brokered deposit regulation to elaborate on the ‘facilitation’ prong of the deposit broker definition and to provide clarity about the availability of the Primary Purpose Exception (PPE). For sweep program participants, the final rule specifies elements that must be included in a sweep program to permit banks to treat the deposits as non-brokered. The amendment to the brokered deposit regulation became effective as of April 1, 2021, with an extended compliance date of January 1, 2022 for institutions that continue to rely on previous staff opinions. After January 1, 2022, full compliance with the regulation is required.
IMPORTANT UPDATE RE: FDIC BROKERED DEPOSIT DEFINITION OF ‘MATCHMAKING ACTIVITIES’
On September 9, 2021 the FDIC added a new Question 7a to the Questions and Answers Related to Brokered Deposit Rule (FAQs) on its website which substantially modifies the definition of ‘matchmaking activities.’ TBS has published a summary of the impact of the new Question 7a here.
TBS WHITEPAPER: Navigating the FDIC Brokered Deposit Rule.
This TBS whitepaper smmarizes the key aspects of the Final Rule as it relates to insured deposit sweep programs and shed light on nuances that have material implications for program participants.
Click here to download the paper.
FDIC BROKERED DEPOSIT RESOURCE CENTER
FDIC Banker Resource Center re: Brokered Deposits
─ List of companies that have submitted notices for a Primary Purpose Exception under the 25% on Enabling Transactions tests
─ Questions and Answers Related to the Brokered Deposits Rule
─ Instructions for Primary Purpose Exception Submissions (notices, applications, or ongoing reports)
─ National Rates and Rate Caps (Applicable to Less Than Well Capitalized Institutions)
─ Small Entity Compliance Guide
─ Previous FDIC Staff Interpretations (phased out January 1, 2022)
OTHER FDIC RESOURCES
February 23, 2021
FDIC Financial Institutions Letter re: New Call Report Data Items for Sweep Deposits Beginning with June 30, 2021 Call Reports
January 22, 2021
Final Rule Published in Federal Register, 86 Fed. Reg. 6742
December 15, 2020
FDIC Brokered Deposits Rule Press Release
TOTAL BANK SOLUTIONS IS HERE TO HELP
Does your financial institution need more help understanding the implications of the rule or creating a path to compliance? The insured deposit experts at TBS are here to help. You can reach us at info@totalbanksolutions.com.