The Federal Deposit Insurance Corporation's Final Brokered Deposits Rule: Six Things to Know

On December 15, 2020, the Board of Directors of the Federal Deposit Insurance Corporation (“FDIC”) voted 3–1 to approve a final rule that significantly revises and clarifies the regulatory framework applicable to brokered deposits, under which less-than-well-capitalized insured depository institutions (“IDIs”) are generally prohibited from accepting funds obtained, directly or indirectly, from a deposit broker. The final rule represents the culmination of a long process, including an advance notice of proposed rulemaking (“ANPR”) issued in December 2018 and a notice of proposed rulemaking (the “proposal” or the “proposed rule”) issued in December 2019, to modernize the FDIC’s brokered deposit regulations, and adopts a number of significant changes relative to the proposal. The final rule becomes effective April 1, 2021, but the full compliance date is delayed until January 1, 2022. A comparison of the final rule text against the proposed rule text is available here.