Oct. 29, 2018 — ICBA commended the FDIC for conforming its brokered deposit regulations with the Regulatory Relief Act (S. 2155), which exempts certain reciprocal deposits from being considered brokered deposits.
Under the ICBA-advocated exception, well-capitalized and well-rated institutions are not required to treat reciprocal deposits as brokered deposits up to the lesser of 20 percent of their total liabilities or $5 billion.
While ICBA generally supports the FDIC’s proposed conforming rules, it expressed concerns with the FDIC’s interpretation of the “special cap,” which disqualifies institutions that cease to be well-rated or well-capitalized.
ICBA noted that the Regulatory Relief Act prohibition for these institutions refers only to receiving deposits, not maintaining or holding them. As such, the agency should not require institutions that retain the reciprocal deposits they accepted before becoming subject to the special cap to reduce their holdings.
A second rulemaking planned for later this year will seek comments on the agency’s overall brokered deposit regulations and the interest rate restrictions that apply to brokered deposits. More information on the Regulatory Relief Act is available in ICBA’s matrix on the law’s regulatory implementation and its “Passage of S. 2155” webpage.