A group of 11 financial services associations is asking the FDIC to rescind its notice of proposed rulemaking aimed at strengthening the prudential protections of the agency’s safety and prudential rules for brokered deposits. (12 CFR 337.6).
The groups said in the letter that authorities have failed to justify the need for the rules.
If the FDIC does not rescind the rule, industry groups asked the agency to provide data explaining why the rule is needed and to extend the comment period on the proposal for an additional 60 days. The comment period currently ends 60 days after the proposal is published in the Federal Register.
“We are concerned that the brokered deposit proposal would significantly change the FDIC’s brokered deposit framework and override statutory interpretation without sufficient and transparent data or a solid policy basis,” the group said in a letter to the FDIC. “I am doing so,” he said. “This is particularly concerning given the extensive multi-year effort that preceded the 2020 rulemaking, a process that included multiple rounds of public comment and outreach to industry, policy makers, and various stakeholders. That’s what you should do.”
The proposal would expand the definition of brokered deposits, including subjecting them to enhanced regulation and removing certain exceptions to the rules.
In proposing these rules, the FDIC cited the recent failures of nonbank deposit brokers and also noted the potential risks to banks that rely on brokered deposits as a source of funding.
The industry group said the proposals were likely to have a significant impact on banks’ funding and the products and services available to customers.
Specifically, the organizations argue that the proposal:
Reverses the changes the FDIC implemented in the 2020 Brokered Deposit Final Rule. Significant implications for banks, broker-dealers, investment advisors, third-party service providers, and customers. disrupt business arrangements made under existing rules; Significantly increase the proportion of deposits classified as brokered deposits. Implementing changes without proper support for the proposed changes. “Notably, this proposal does not provide a factual basis for many of the changes it proposes,” the groups claim. Changing the regulatory framework governing brokered deposits without taking into account recent technological changes. Duplicate request for information regarding pending deposits.
The organizations that sent the letter include the American Bankers Association, the American FinTech Council, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum, the Financial Technology Association, the Independent Community Bankers of America, the Innovative Payments Association; is. International Bankers, National Association of Industrial Bankers, Securities Industry and Financial Markets Association.
