FDIC Seeks Comment on the Treatment of Reciprocal Deposits

The FDIC today issued a request for comment on a proposed rule to implement Section 202 of S. 2155, the new regulatory reform law. Under the proposed rule, well-capitalized and well-rated institutions would not be required to treat reciprocal deposits as brokered deposits up to the lesser of 20 percent of its total liabilities or $5 billion. Institutions that are not both well capitalized and well rated may also exclude reciprocal deposits from their brokered deposits under certain circumstances.

This rulemaking is the first of a two-part effort the FDIC plans to undertake to revisit the brokered deposit rules.  For the second part, the FDIC plans to seek comments later this year on the agency’s overall brokered deposit and rate cap regulations.

The American Bankers Association has long called for modernizing these regulations, noting that they have become increasingly out of step with the ways banks now interact with their customers under new technology and bank business models. Comments on the proposed rule will be accepted for 30 days after publication in the Federal Register.