FDIC updates rules on reciprocal deposits

The Federal Deposit Insurance Corporation issued a final interim rule to update its reciprocal deposit regulations to comply with housing legislation recently passed by Congress.

The 21st Century ROAD to Housing Act became law in July after both chambers of Congress passed it with bipartisan support. The legislation combined elements of housing and banking proposals from the House Financial Services Committee and the Senate Banking Committee. Among its many provisions was new language on how reciprocal deposits are treated for legal purposes.

Consistent with the legislation, the interim final rule raises the amount of reciprocal deposits an “agent institution” may exclude from treatment as brokered deposits, using a new tiered, liability-based calculation, up to a maximum of $30 billion, according to the FDIC. The interim rule also broadens the definition of “agent institution” and clarifies how the reciprocal deposits framework operates.

The interim rule will take effect 30 days after publication in the Federal Register.