Regulatory Alerts2024-08-23 | 2024-18214Unsafe and Unsound Banking Practices: Brokered Deposits Restrictions
The Federal Deposit Insurance Corporation proposes revisions to its brokered deposits regulations for less than well-capitalized insured depository institutions to correct underreporting and risk misclassifications introduced by the 2020 Final Rule. The proposal redefines "deposit broker," amends the primary purpose exception and designated business relationships, and clarifies agent institution status for capped reciprocal deposits. These adjustments will standardize deposit reporting and prevent undercapitalized banks from funding rapid growth with volatile third-party deposits that threaten financial stability.
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