FDIC Adopts Revisions to Brokered Deposit Regime

The FDIC revised its brokered deposit regime and interest rate restrictions for insured depository institutions ("IDIs") that are less than "well-capitalized" (i.e., any IDI that does not significantly exceed the required minimum for capital ratios).

Among other things, the revised rule:

• creates new definitions relevant to the defined term "deposit broker," including the terms "facilitating" and "primary purpose";
• updates the interest rate calculation methodology; and
• clarifies when the rule is applicable.

The revised rule eliminates the information sharing provision in the original interpretation (see previous coverage) of twhat constitutes being engaged in the business of facilitating the placement of deposits. The revised rule replaces this provision with a prong that "captures persons that engage in matchmaking."

The revised rule goes into effect on April 1, 2021 and compliance with the rule is required by January 1, 2022.

FDIC Chair Jelena McWilliams commended the final rule for establishing a "more transparent and consistent regulatory approach" through its creation of bright line tests for the "facilitation" provision of the "deposit broker" definition.