The Federal Deposit Insurance Corp. on Friday laid out the process for banks to seek exemptions from new deposit-rate restrictions.

Starting Jan. 1, less-than-well-capitalized institutions must cap rates at a limit determined by a national average of what the industry pays. But institutions can exceed the cap in their local areas if the FDIC determines a bank operates in a high-rate market.

In a letter to all depository institutions, the FDIC said it will analyze standardized data about rates in a bank's state and metropolitan area to decide whether it can exceed the cap.

Institutions requesting a waiver by Dec. 31 will hear back from the agency by Jan. 30; regardless of the ultimate decision, these institutions may wait until March 31 to enforce the cap. Banks filing requests after Dec. 31 must use the national rate on Jan. 1 while they wait for a response.

The agency said waivers will be good for one year but that it can rescind a waiver at any time if a bank's market is no longer deemed to be high-rate. Any exemption will not apply to a bank's out-of-market rates.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.