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ABA: The American Bankers Association
Press Release

ABA Welcomes FDIC's Review of Brokered Deposit Regulations

The American Bankers Association welcomes the Federal Deposit Insurance Corp.’s announcement today to review its brokered deposit rules and solicit comments from the public. This is an important next step toward modernizing regulations so that they better align with how customers want to interact with their banks rather than discourage deposit taking.
Deposit taking is fundamental to banking and it’s essential that banks can continue to evolve and innovate to receive and safeguard customer deposits and meet the lending needs that are the engine of economic growth.  While technology, business models and product types have changed, the importance of bank deposits has not.
“We appreciate Chairman McWilliams’ leadership on this issue and the FDIC’s decision to ask for input,” said ABA president and CEO Rob Nichols. “We look forward to contributing to the discussion and working with the FDIC as it reviews its deposit rules.”
Brokered deposit regulations were originally designed to restrict certain kinds of deposits that institutions in a weakened capital position could accept. But the regulations — written over 30 years ago — did not contemplate the advent of the internet, smart phones or how the industry has evolved along with the preferences of its customers. Moreover, brokered deposits themselves have evolved. For example, deposit regulations often don’t consider how banks have changed the ways that they communicate with their customers and the rules can interfere with customer interactions, penalizing banks for finding new and innovative ways to provide deposit services. 
The FDIC also expansively views deposits above a rate cap as volatile. While the rate cap is intended to prevent struggling banks from offering excessively high rates, it is often applied to healthy banks and calculated in a way that doesn’t take into account differences in local markets and how banks compete.
“Brokered deposit regulations affect every bank in this country and it’s our duty to our members and our members’ customers to try find a better approach to the rules,” said Nichols. “We think they can be updated to reflect the realities of today’s marketplace and better fit how banks serve their customers.”


About the American Bankers Association

The American Bankers Association is the voice of the nation’s $21.1 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $17 trillion in deposits and extend nearly $11 trillion in loans.

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Ian McKendry

(202) 663-5473

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