|On January 22, 2021, the Federal Deposit Insurance Corporation (“FDIC”) published its final rule (“Final Rule”) revising and modernizing its regulations related to brokered deposits and the interest rate restrictions that apply to insured depository institutions (“IDIs”) that are less than well capitalized. Under Section 29 of the Federal Deposit Insurance Act, certain IDIs that are not well capitalized are prohibited from accepting, or require a waiver to accept, deposits from a deposit broker. Section 29 defines a “deposit broker” and sets forth nine exclusions from the definition of deposit broker. The Final Rule establishes a new framework for analyzing certain aspects of the “deposit broker” definition, including what constitutes “facilitating” the placement of deposits and what business arrangements satisfy the “primary purpose exception.” This alert summarizes the Final Rule and identifies key aspects for broker dealers.
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