Federal Deposit Insurance Corporation Proposes Significant Revisions to Brokered Deposit Regulations
Financial regulatory and corporate attorneys Jeffrey Haas, Shawn Turner, Paul Aguggia and Rolland Hampton co-authored an article for The Banking Law Journal breaking down proposed changes to Federal Deposit Insurance Corporation (FDIC) regulations related to brokered deposits. These significant revisions would expand the definition of "brokered deposit" to rein in various deposit placement arrangements between insured depository institutions (IDIs) and intermediaries, such as nonbank financial companies, as well as allow only IDIs to file notices and applications for a primary purpose exception (PPE), among other measures. If the proposed regulations are enacted, some deposits currently classified as non-brokered would be reclassified as brokered, which would mean that an insured depository institution's continued custody of deposits could increase deposit insurance assessments and negatively affect its supervisory liquidity rating. The article provides detailed analysis of these and other changes, explains how they differ from the 2020 revisions and lists key takeaways for organizations.
The authors also published a Holland & Knight alert on this topic.
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