[Federal Register: April 3, 2001 (Volume 66,
[Rules and Regulations]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 337
Rescission of Deposit Broker Notification, Recordkeeping and Reporting Requirements
AGENCY: Federal Deposit Insurance Corporation (``FDIC'').
SUMMARY: As part of the Financial Regulatory Relief and Economic
Efficiency Act of 2000, Congress repealed section 29A of the Federal
Deposit Insurance Act (``FDI Act''). Section 29A imposed certain
requirements on deposit brokers and authorized the FDIC to issue
implementing regulations. The FDIC is rescinding the regulations issued
to implement the now-repealed section 29A of the FDI Act. As a result
of Congress' repeal of section 29A and the FDIC's rescission of the
implementing regulations, deposit brokers no longer are required to
notify the FDIC that they are acting as deposit brokers or have ceased
acting as such. Also, deposit brokers no longer are required to
maintain records as to the amounts and maturities of deposits placed by
the broker at each insured depository institution.
EFFECTIVE DATE: April 3, 2001.
FOR FURTHER INFORMATION CONTACT: Carol A. Mesheske, Chief, Special
Activities Section, Division of Supervision, (202) 898-6750, Joseph A.
DiNuzzo, Counsel, (202) 898-7349 or Christopher L. Hencke, Counsel,
(202) 898-8839, Legal Division, FDIC, Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION: Congress repealed section 29A of the FDI Act
(12 U.S.C. 1831f-1) in the Financial Regulatory Relief and Economic
Efficiency Act of 2000. Pub. L. 106-569, Title XII, Sec. 1203. The
effective date of that legislation was December 27, 2000. Section 29A
prohibited a ``deposit broker,'' as defined in section 29(g) of the FDI
Act (12 U.S.C. 1831f(g)), from soliciting or placing deposits with
FDIC-insured depository institutions unless the broker notified the
FDIC that it was acting as a deposit broker. Deposit brokers also were
required to notify the FDIC when they stopped acting as deposit
brokers. In addition, section 29A authorized the FDIC to impose, by
regulation, recordkeeping and reporting requirements upon deposit
brokers. As an amendment to Sec. 337.6 of its regulations, in 1992 the
FDIC issued notice, recordkeeping and reporting requirements affecting
deposit brokers. 12 CFR 337.6(e). As the result of Congress' repeal of
section 29A of the FDI Act, the FDIC is now rescinding the regulations
issued pursuant to section 29A.
In the past, some deposit brokers have advertised themselves as
``FDIC-registered.'' Such advertisements suggested that the broker had
been approved or examined by the FDIC. Such suggestions were incorrect.
By repealing section 29A, Congress intended to eliminate such
inaccurate advertisements. Brokers should no longer advertise that they
are ``FDIC-registered'' or otherwise indicate that they are somehow
approved by the FDIC.
Neither the repeal of section 29A nor the rescission of
Sec. 337.6(e) changes the definition of deposit broker. Under the FDI
Act a deposit broker is broadly defined as ``any person engaged in the
business of placing deposits or facilitating the placement of deposits
of third parties with insured depository institutions * * *.'' 12
U.S.C. 1831f(g)(1)(A). The repeal of section 29A and the rescission of
Sec. 337.6(e) mean only that deposit brokers are no longer bound by the
former statutory and regulatory notification, recordkeeping and
reporting requirements. The prohibition on the acceptance of brokered
deposits by certain FDIC-insured depository institutions, based on
their capitalization, continues to apply. (12 U.S.C. 1831f; 12 CFR
337.6.) Similarly, the requirements for obtaining ``pass-through''
insurance coverage on brokered deposits are unchanged. (12 CFR
Exemption From Public Notice and Comment
The rescission of Sec. 337.6(e) does not constitute a ``rule'' for
which the FDIC is required to publish a general notice of proposed
rulemaking under section 553(b) of the United States Code. This is
because the final rule merely rescinds a regulation issued pursuant to
a statute that Congress has repealed. Thus, the FDIC has determined for
good cause that public notice and comment are unnecessary and the rule
should be published in final form.
Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5 USC 601-612) requires an agency
to publish an initial regulatory flexibility analysis, except to the
extent provided in 5 USC 605(b), whenever the agency is required to
publish a general notice of proposed rulemaking for a proposed rule.
For the reasons discussed above, the FDIC is publishing this rule as a
final rule, for which no publication of a general notice of proposed
rulemaking is necessary. Thus, no regulatory flexibility analysis is
Congressional Review Act
The Office of Management and Budget has determined that this final
rule is not a ``major rule'' within the meaning of the Congressional
Review Act (5 USC 801, et seq.). The FDIC will file the appropriate
reports with Congress and the General Accounting Office so that this
final rule can be reviewed.