FDIC Adopts Interim Final Rule Raising Reciprocal Deposit Cap

The FDIC adopted an interim final rule increasing the amount of reciprocal deposits that agent institutions may exclude from treatment as brokered deposits to a maximum of $30 billion.

In the interim final rule, the FDIC implemented section 902 of the 21st Century ROAD to Housing Act, which amended the statutory framework governing reciprocal deposits under Federal Deposit Insurance Act Section 29 ("Brokered deposits").

The rule replaced the prior general cap, the lesser of $5 billion or 20 percent of an agent institution's total liabilities, with a tiered calculation. The rule also expanded the definition of an agent institution to include well-capitalized institutions with a supervisory rating of 3, broadening the pool of eligible participants.

The interim final rule clarified when an institution receives non-maturity reciprocal deposits and specified the conditions for requalifying as an agent institution following changes in supervisory rating, capital category, brokered deposits waiver approval, or a reduction in reciprocal deposits below its special cap.

The FDIC said it would coordinate with the Federal Financial Institutions Examination Council to update Call Report instructions to reflect the revised framework.

The rule takes effect upon publication in the Federal Register. Comments are due 30 days after that date, and the FDIC said it will revise the rule if appropriate in light of them.