During an ambitious board meeting on Tuesday, the FDIC issued a proposed rule to revise regulations on brokered deposits following the recent failure of the nonbank deposit broker Synapse Financial.
Details: Citing the impact of the FDIC brokered deposit framework adopted in 2020, the agency said the rule would:
Simplify the definition of “deposit broker.”
Eliminate the “exclusive deposit placement arrangement” exception.
Revise rules on the primary purpose exception, or PPE, and require regulators to consider the third party’s intent in placing customer funds at a particular depository institution.
Comments: Public comments on the proposal are due 60 days after publication in the Federal Register.
Background: The FDIC in 2020 approved a new framework for determining whether deposits made through deposit arrangements qualify as brokered deposits.
