Brokered Deposits
Position Summary
Section 29 of the Federal Deposit Insurance Act was enacted in 1989 to prevent less-than-well-capitalized banks from exacerbating losses to the Deposit Insurance Fund by pursuing risky growth strategies with expensive third-party funding sources. Although risks related to excessive reliance on third-party funding persist, technology has significantly reshaped bank funding practices. Third-party funding arrangements have also evolved and diversified to present different and bespoke funding characteristics and risks. These differences impact the behavior of the underlying deposits and require tailored bank risk management practices and models.

Brokered Deposits News

Blog post

FDIC Should Rescind Brokered Deposits Proposal

The FDIC should rescind its brokered deposits proposal, CSBS said in a comment letter today. The proposal would needlessly disrupt an important source of bank funding and cause other complications with no clear justification. “The brokered deposits proposal fails to meet the rigorous, fact-based, and data-driven rulemaking standard stakeholders deserve,” said CSBS President and CEO Brandon Milhorn. “This proposal takes
November 21, 2024

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