Notice of Proposed Rulemaking, Unsafe and Unsound Banking Practices: Brokered Deposits Restrictions; Request for Extension of Comment Period
Ladies and Gentlemen:
The American Bankers Association, the American Fintech Council, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum, the Financial Technology Association, the Independent Community Bankers of America, the Innovative Payments Association, the Institute of International Bankers, the National Association of Industrial Bankers and the Securities Industry and Financial Markets Association respectfully request that the Federal Deposit Insurance Corporation withdraw the proposed rulemaking relating to the FDIC's brokered deposit restrictions. If the proposal is not withdrawn, we request that the FDIC extend the public comment period, which currently will expire 60 days after publication in the Federal Register.
We are concerned that the brokered deposits proposal would significantly alter the FDIC's brokered deposit framework, and reverse statutory interpretations without sufficient or transparent data or robust policy rationale. This is particularly concerning given the extensive, multiyear initiative that preceded the 2020 rulemaking, a process which included multiple rounds of public comment and outreach to industry, policymakers and a variety of stakeholders. With respect to the proposed changes, the FDIC does not provide sufficient information or time for thorough public consideration of the complex issues raised by the proposal. In fact, the proposal cites as support the FDIC's 2011 study, updated in 2019, both of which were available to the FDIC when it adopted changes in 2020. As described further below, the proposal provides selected examples from "recent events" and "recent experience" but does not assess whether those examples are indicative of broader trends or how the specific proposed revisions to the brokered deposits framework would have led to different outcomes in either event. Nor does the proposal address the changes in technology and business practices since the 2020 rule was adopted, in many cases in reliance on the exceptions granted under that framework, or seriously consider how the proposed changes would affect the availability and costs of services available to customers. In the absence of data and sufficient rationale for revising the brokered deposits framework at this time, we believe the proposal should be withdrawn until the FDIC conducts additional analysis and makes it available to the public for comment.
Download the joint comment letter to read the full text.
