Banking and Finance Law Daily Wrap Up, DEPOSIT INSURANCE—FDIC extends comment period on brokered deposit proposal, (Oct 9, 2024)
The 30-day extension moves the deadline from Oct. 22, 2024, to Nov. 21, 2024.
The Federal Deposit Insurance Corporation has announced a 30-day extension of the comment period for its notice of proposed rulemaking which would expand the definition of “deposit broker” to capture many deposit placement arrangements that currently do not meet the criteria for enhanced scrutiny under current regulation, such as sweep deposits and those related to financial technology and cryptocurrency (FIL-72-2024). The new notice of proposed rulemaking extends the comment period to November 21, moved from October 22.
In August the Federal Deposit Insurance Corporation published a notice of proposed rulemaking on “Unsafe and Unsound Banking Practices: Brokered Deposits Restrictions,” which would revise 12 C.F.R. Parts 303 and 337. The proposal would revise the agency’s regulations on brokered deposits, revising the definition of "deposit broker," and would amend the analysis of the "primary purpose" exception to the "deposit broker" definition. The proposed rule would also amend the primary purpose exception (PPE) for two of the designated business relationships under the primary purpose exception, as well as make changes to the notice and application process for the primary purpose exception (see Banking and Finance Law Daily, July 31, 2024).
In response to the FDIC’s notice, 13 industry associations sent two separate comment letters requesting that the FDIC provide 60 more days on its request for public input on deposit data. The associations also requested withdrawal of the proposal to expand the definition of “deposit broker,” arguing that it would “significantly alter the agency’s brokered deposit regulatory framework and reverse existing interpretations of law, all without sufficient data or a robust rationale to support the changes” (see Banking and Finance Law Daily, Aug. 22, 2024).
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