Regulatory Alerts2022-01-10 | 2021-28540Added · Updated
Unsafe and Unsound Banking Practices: Brokered Deposits
The Federal Deposit Insurance Corporation has identified a new designated exception to the deposit broker definition that exempts specific non-discretionary custodial services from brokered deposit classification. Under this rule, third-party custodial agents that place customer funds at insured depository institutions solely based on specific depositor instructions, without determining placement locations or negotiating deposit terms, automatically qualify for the primary purpose exception. Entities meeting these criteria may rely on the exception without filing a formal notice or application, and their involvement does not alter the brokered deposit status of funds placed by qualifying depositors or agents.
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