On June 30, 2016, the US FDIC finalized updates to its Frequently Asked Questions regarding identifying, accepting and reporting brokered deposits. In general, brokered deposits are treated less favorably than nonbrokered deposits for various supervisory purposes, including a prohibition on accepting such deposits if an insured depository institution’s capital falls below certain thresholds under the Prompt Corrective Action (PCA) framework.
In November 2015, the FDIC released for comment proposed updates to the FAQs that were originally issued in January 2015. After consideration of the comments received, the agency retained a majority of the proposed updates, with certain clarifications and the addition of new FAQs.
The FAQs are based on the statute, regulation and explanations of the requirements for identifying and accepting brokered deposits provided to the industry through published advisory opinions and the FDIC’s Study on Core Deposits and Brokered Deposits issued in July 2011, as well as on comments received since publication of the FAQs. The FAQs provide plain language information about categorizing brokered deposits.
Key updates since the FAQs were issued in January 2015 address matters related to: (i) business professionals and deposit referral programs; (ii) deposits gathered through “dual hatted,” “dual” and “call center” employees (as explained in the FAQs) or contractors; (iii) deposits underlying government-sponsored prepaid or debit card programs; (iv) whether certain non-maturity deposits are brokered; and (v) actions an insured depository institution should take if it holds certain brokered deposits and falls below “well capitalized” for PCA purposes.
The updated FAQs are available at: https://fdic.gov/news/news/financial/2016/fil16042.pdf.