Summary:
The Federal Deposit Insurance Corporation (FDIC) is issuing 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, as defined by Section 337.6 –Brokered Deposits, of the FDIC’s Rules and Regulations.
The FDIC Statement can be found on the FDIC website.
See FDIC’s Banker Resource Center Brokered Deposits Page for the new Q&A and additional information.
Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-insured financial institutions.
Highlights:
- A Statement, new Q&A (D.10) in the Questions and Answers Related to Brokered Deposit Rule, and an update to the Public Report of Entities Submitting Notices for a Primary Purpose Exception asterisk note, are being 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, for example, the third party is engaging in matchmaking activities, then the sweep deposits received from the broker dealer must be reported as brokered deposits on the IDI’s quarterly filings of the Consolidated Report of Condition and Income (Call Report), even if the broker dealer has a primary purpose exception for the relevant business line;
- In conjunction with new Q&A D.10, 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. However, the FDIC will not require an IDI to refile Call Reports that predate the issuance of the attached Statement, if, after good faith efforts, certain deposits were not previously reported as brokered by the IDI due to a misunderstanding of how the facilitation aspect of the deposit broker definition applies when additional third parties are involved.
- 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.