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John Tyson
CFO/SVP
Altamaha Bank & Trust Company
Vidalia GA
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Original Message:
Sent: 12-17-2019 09:04
From: Barb Rehm
Subject: Tuesday Topic: Liberalizing Brokered Deposit Regs
The FDIC released an 85-page proposal last week outlining how it plans to loosen its rules governing brokered deposits. The proposal seeks public input on a series of questions, but makes clear the agency expects "some amount of deposits currently designated as brokered deposits to no longer be so designated." The industry will have a couple months to provide input and then the FDIC is expected to finalize the changes. Some interesting numbers from the proposal, as of June 30:
- 8.5% of the $13 trillion in domestic deposits were classified as brokered
- 41% of insured institutions held some brokered deposits
- 3% of banks classified as not well capitalized held brokered deposits
The FDIC said just 16 banks are classified as adequately capitalized or undercapitalized and these banks held $61 million in brokered deposits. I didn't love any of the news stories on the FDIC's proposal. The Wall Street Journal decided to focus on the potential impact on competition with fintechs, concluding: "Tech firms might never be able to offer banking services directly. Changing the brokered-deposit rules could be the next best thing." American Banker did a straight summary piece, but it didn't go very deep. So I'd recommend reading the Covington law firm's detailed yet concise analysis.
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Barb Rehm
Senior Managing Director
Promontory Interfinancial Network, LLC
Arlington VA
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