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多宝游戏下载 Board Approves Proposed Rule to Revise Brokered Deposit Regulations

Strengthening the safety and soundness of the banking system, helping ensure uniform and consistent reporting of brokered deposits and reducing operational challenges and reporting burdens.

July 30, 2024

WASHINGTON 鈥  多宝游戏下载 (多宝游戏下载) Board of Directors today approved a notice of proposed rulemaking to strengthen the important prudential protections of the agency鈥檚 safety and soundness rule on brokered deposits (12 CFR 337.6) that implements section 29 of the Federal Deposit Insurance Act. Based on the 多宝游戏下载鈥檚 experience since the adoption of the 2020 final rule and the large bank failures in 2023, the proposed revisions seek to strengthen the safety and soundness of the banking system, help ensure uniform and consistent reporting of brokered deposits, and reduce operational challenges and reporting burdens on insured depository institutions (IDIs). 

鈥淭he changes to the brokered deposit rule contained in this proposal address the fundamental relationship between a bank, a depositor, and a third party intermediary, and the risks the relationship may pose as illustrated by the recent failure of the nonbank deposit broker Synapse Financial,鈥 said 多宝游戏下载 Chairman Martin J. Gruenberg. 鈥淭he changes would also help strengthen the important prudential protections of the brokered deposit rule required by statutory restrictions and reduce the very serious risks that brokered deposits pose to less than well-capitalized IDIs and the Deposit Insurance Fund.鈥 

The proposed rule would simplify the definition of 鈥渄eposit broker,鈥 eliminate the 鈥渆xclusive deposit placement arrangement鈥 exception, and revise the interpretation of the primary purpose exception (PPE) to consider the third party鈥檚 intent in placing customer funds at a particular IDI. In addition, the proposed rule would: 

  • Allow only IDIs to file notices and applications for PPEs; 
  • Revise the 鈥25 percent test鈥 designated business exception for a PPE to be available only to broker-dealers and investment advisers and only if less than 10 percent of the total assets that the broker-dealer or investment adviser has under management for its customers is placed at one or more IDIs; 
  • Eliminate the enabling transactions designated business exception; and,
  • Clarify when an IDI, which has lost its agent institution status, can regain that status for purposes of the limited exception for reciprocal deposits. 

Public comments on the proposal are due 60 days after publication in the Federal Register.

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Last Updated: July 30, 2024