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.
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.
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.
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.
─ 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)
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 firstname.lastname@example.org.