Federal Deposit Insurance Act: Deposit broker notification, recordkeeping, and reporting requirements; rescission,
[Federal Register: April 3, 2001 (Volume 66, Number 64)]
[Rules and Regulations]
[Page 17621-17622]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03ap01-1]
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[[Page 17621]]
FEDERAL DEPOSIT INSURANCE CORPORATION
RIN 3064-AC48
Rescission of Deposit Broker Notification, Recordkeeping and Reporting Requirements
AGENCY: Federal Deposit Insurance Corporation (``FDIC'').
ACTION: Final rule.
SUMMARY: As part of the Financial Regulatory Relief and Economic Efficiency Act of 2000, Congress repealed section 29A of the Federal Deposit Insurance Act (``FDI Act'').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 The FDIC is rescinding the regulations issued to implement the now-repealed section 29A of the FDI Act.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SUPPLEMENTARY INFORMATION: Congress repealed section 29A of the FDI Act (12 U.S.C. 1831f-1) in the Financial Regulatory Relief and Economic Efficiency Act of 2000.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 330.5(b).)
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 required.
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.
List of Subjects in 12 CFR Part 337
Banks, banking, Deposit brokers, Deposit insurance, Reporting and recordkeeping requirements, Savings associations, Securities.
In consideration of the foregoing, the FDIC hereby amends part 337 of chapter III of title 12 of the Code of Federal Regulations as follows:
PART 337--UNSAFE AND UNSOUND BANKING PRACTICES
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The authority citation for part 337 continues to read as follows:
Authority: 12 U.S.C. 375a(4), 375b, 1816, 1818(a), 1818(b), 1819, 1820(d)(10), 1821f, 1828(j)(2), 1831, 1831f-1.
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Sec. 337.6 [Amended]
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Section 337.6(e) is removed and reserved.
By order of the Board of Directors.
Dated at Washington, D.C., this 26th day of March, 2001.
Federal Deposit Insurance Corporation.
Robert E. Feldman, Executive Secretary.
[FR Doc. 01-8100Filed4-2-01; 8:45 am]
BILLING CODE 6714-01-P
