The FDIC’s brokered deposits proposal would reverse important reforms put in place in 2020, American Bankers Association President and CEO Rob Nichols said. He also questioned the decision by the FDIC board to push forward with several policy proposals in a single meeting, noting there will soon be a change in leadership at the agency.
At today’s meeting, the FDIC board voted 3-2 to advance a proposed rule that would expand the definition of “deposit broker” to capture many deposit placement arrangements. It also took votes on several other proposed regulations on topics ranging from industrial banks to changes in bank control.
The broker deposits proposal, which would amend an existing rule enacted in 2020, “would restrict access to sources of liquidity while penalizing banks for pursuing funding sources that enable them to meet the needs of their communities,” Nichols said. “Additionally, we are skeptical about the FDIC’s plan to use the brokered deposits framework to regulate bank partnerships with crypto and fintech companies.”
Nichols also noted ABA’s concern about the lengthy list of policy proposals at the meeting. FDIC Chairman Martin Gruenberg’s has announced his intention to resign from the position and the Senate is currently considering President Biden’s nominee for his successor, CFTC Commissioner Christy Goldsmith Romero.
“Given the pending change in FDIC leadership, we question the need to advance an array of unrelated regulatory changes—with unusually short comment periods—that clearly lack consensus support within the agency,” Nichols said. “We will review today’s FDIC actions with our members and provide input in the weeks ahead.”
