FDIC Issues Updates on Brokered Deposits

On July 15, 2022, the FDIC issued a statement, adding a new Question and Answer (Q&A), and updating public information on the Banker Resource Center Brokered Deposits Page, to remind FDIC-insured depository institutions (IDIs) that deposits swept from broker dealers with a primary purpose exception to unaffiliated IDIs must be reported as brokered if there are any additional third parties involved that qualify as a deposit broker.

Highlights of the FDIC’s statement include:

• The Statement, the new Q&A (D.10) Related to Brokered Deposit Rule, and an update to the Public Report of Entities Submitting Notices for a Primary Purpose Exception asterisk note, were issued to remind IDIs that:

  • An IDI receiving sweep deposits from an unaffiliated broker dealer with a primary purpose exception for that business line should be aware of any additional third parties involved in the deposit placement arrangement that qualify as a deposit broker;

  • If an additional third party is involved that would qualify as a deposit broker, then the sweep deposits received from the broker dealer must be reported as brokered deposits on the IDI’s quarterly filings of the Call Report, even if the broker dealer has a primary purpose exception for the relevant business line;

  • In conjunction with new Q&A, IDIs should review Q&A C.6 for an example of services that constitute matchmaking activities when provided by a third party to a broker-dealer in an unaffiliated sweep program; and

  • The IDI is responsible for accurately reporting deposits on its Call Report. 

• Call Report instructions have been updated to provide that IDIs that receive deposits from a person with a primary purpose exception should be aware if any additional third parties that qualify as deposit brokers are involved in the deposit placement arrangement, and if so, those deposits must be reported as brokered.

• The Public Report of Entities Submitting Notices for a Primary Purpose Exception has also been updated to include filings received through June 24, 2022.

• Interested parties can sign up to receive alerts when the Brokered Deposits page is updated through the FDIC Subscription Service.

The FDIC’s press release can be found here.