McWilliams: Brokered Deposit Proposal Will Seek to Foster Innovation

FDIC Chairman Jelena McWilliams today previewed the long-awaited overhaul of the brokered deposit rule, which the agency is poised to propose on during its board meeting tomorrow. McWilliams highlighted four key goals of the proposal, which include developing a framework that will encourage innovation and allow banks to better serve their customers.

“Striking the right balance in how we interpret the brokered deposits statute is key to this goal, as we seek to remove regulatory hurdles to innovative partnerships between banks and nonbanks, and avoid discoursing banks from offering products and services through online and mobile channels,” McWilliams said in remarks during a Brookings Institution event in Washington, D.C.

She added, however, that “the changes the FDIC is considering to its brokered deposits regulation should not be interpreted to mean that the FDIC is ignoring the potential risks associated with different forms of funding,” and also noted that undertaking a more holistic review of the brokered deposit statutes will require an act of Congress. ABA VP Alison Touhey also spoke at the event, providing the banking industry’s perspective.