Joint Trades Letter to the FDIC on the Proposed Expansion of Deposit Broker Definition

Ladies and Gentlemen:

The American Bankers Association, Bank Policy Institute, United States Chamber of Commerce, Financial Services Forum, Financial Technology Association, Independent Community Bankers of America, and Securities Industry and Financial Markets Association (collectively, "the Associations") are filing this comment on the notice of proposed rulemaking issued by the Federal Deposit Insurance Corporation concerning brokered deposits. See Unsafe and Unsound Banking Practices: Brokered Deposits Restrictions, 89 Fed. Reg. 68,244 (Aug. 23, 2024).

As described in detail below, any final rule adopted based on this proposal would violate the Administrative Procedure Act in multiple ways. Among other flaws, the proposal is inconsistent with the statutory definition of a "deposit broker," which, as relevant here, requires a deposit broker to be "engaged in the business of placing deposits[] or facilitating the placement of deposits," and excludes any person "whose primary purpose is not the placement of funds with depository institutions." 12 U.S.C. § 1831f(g)(1), (g)(2)(I). The proposed rule would sweep in entities that are not "engaged in the business of placing deposits" at all, let alone as their "primary purpose."

Download the joint comment letter to read the full text.