FDIC proposal would ease regs on certain deposits
WASHINGTON — The Federal Deposit Insurance Corp. is soliciting public comment on easing regulations for the healthiest banks in their reporting of reciprocal deposits.
The proposal, required by the regulatory relief package that Congress passed in May, would exempt the healthiest banks from having to count reciprocal deposits as brokered deposits, thus potentially lowering a bank's deposit insurance premiums, among other things.
The proposal is the first of a two-part move in which the FDIC will seek comments on amending the larger brokered deposit and rate-cap regulations later this year.
“As FDIC chairman, I am currently undertaking a comprehensive review of FDIC regulations and policies. A key part of this process will be a reassessment of the agency’s brokered deposits regulations and FAQs,” FDIC Chairman Jelena McWilliams said in a press release. “Since the rules were put in place, the industry has seen significant changes in technology, business models, and product types, and later this year we will ask for public comment on how best to update the rules to reflect such changes.”
The first proposal on reciprocal deposits would exempt well-capitalized and well-rated banks from reporting them as brokered deposits. The reciprocal deposit exemption applies for an amount up to 20% of total liabilities or $5 billion, whichever is the lower threshold.
The comment period on the reciprocal deposits proposal will end 30 days after it is published in the Federal Register.