On July 30, 2024, the Federal Deposit Insurance Corporation (FDIC) proposed revisions to the restrictions on brokered deposits (the “Proposal”). The Proposal is intended to strengthen the restrictions to reflect the FDIC’s experience since earlier revisions in 2020 and the regional bank failures of 2023. This is generally accomplished by undoing key elements of the 2020 revisions and would dramatically expand the number of deposit brokers and the amount of deposits that are brokered.
The FDIC will accept comments on the Proposal for 60 days after they are published in the Federal Register, which is expected shortly. In this Legal Update, we provide a background on the brokered deposits restrictions and discuss key elements of the Proposal.
Continue reading this Legal Update.