On December 15, 2020, the FDIC adopted a final rule (the “Final Rule”) to revise its regulations on brokered deposits, which are promulgated pursuant to Section 29 of the Federal Deposit Insurance Act. The Final Rule creates “a new framework for analyzing certain provisions of the ‘deposit broker’ definition, including ‘facilitating’ and ‘primary purpose.’”
The Final Rule retains the basic framework proposed by the FDIC in December 2019 (the “Proposed Rule”), but differs in a number of key respects. In particular, the Final Rule (1) provides that a third party that places, or facilitates the placement of, deposits exclusively with one insured depository institution (“IDI”) would not be engaged in the business of placing, or facilitating the placement of, deposits (and therefore would not be a deposit broker); (2) includes 11 business relationships that qualify for the primary purpose exception that were not included in the Proposed Rule; and (3) eliminates the proposed application process with respect to specific business relationships that qualify for the primary purpose exception (but retains an application process for business relationships that do not meet one of these bright-line tests).