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Rule2026-17865

Reciprocal Deposits: Implementing the 21st Century ROAD to Housing Act

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Published

September 1, 2026

Effective

September 1, 2026

Issuing agencies

Federal Deposit Insurance Corporation

Abstract

The Federal Deposit Insurance Corporation (FDIC) is amending its brokered deposit regulations to conform with recent changes to section 29 of the Federal Deposit Insurance Act made by section 902 of the 21st Century ROAD to Housing Act related to reciprocal deposits, which took effect on July 11, 2026. The FDIC is also providing certain clarifications regarding the reciprocal deposit framework to facilitate and simplify compliance. The FDIC invites public comment on this interim final rule.

Full Text

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<title>Federal Register, Volume 91 Issue 168 (Tuesday, September 1, 2026)</title>
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[Federal Register Volume 91, Number 168 (Tuesday, September 1, 2026)]
[Rules and Regulations]
[Pages 56022-56029]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17865]

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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 337

RIN 3064-AG32

Reciprocal Deposits: Implementing the 21st Century ROAD to
Housing Act

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Interim final rule and request for comment.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending
its brokered deposit regulations to conform with recent changes to
section 29 of the Federal Deposit Insurance Act made by section 902 of
the 21st Century ROAD to Housing Act related to reciprocal deposits,
which took effect on July 11, 2026. The FDIC is also providing certain
clarifications regarding the reciprocal deposit framework to facilitate
and simplify compliance. The FDIC invites public comment on this
interim final rule.

[[Page 56023]]

DATES: The interim final rule is effective September 1, 2026. Comments
must be received no later than October 1, 2026.

ADDRESSES: You may submit comments on the interim final rule,
identified by RIN 3064-AG32 using any of the following methods:
<bullet> FDIC Website: <a href="https://www.fdic.gov/federal-register-publications">https://www.fdic.gov/federal-register-publications</a>. Follow the instructions for submitting comments on the
agency website.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#53103c3e3e363d27201335373a307d343c25">[email&#160;protected]</a>. Include RIN 3064-AG32 on the
subject line of the message.
<bullet> Mail: Jennifer M. Jones, Deputy Executive Secretary,
Attention: Comments--RIN 3064-AG32, Federal Deposit Insurance
Corporation, 550 17th Street NW, Washington, DC 20429.
<bullet> Hand Delivery to FDIC: Comments may be hand-delivered to
the guard station at the rear of the 550 17th Street NW, building
(located on F Street NW) on business days between 7 a.m. and 5 p.m.
<bullet> Public Inspection: Comments received, including any
personal information provided, may be posted without change to <a href="https://www.fdic.gov/federal-register-publications">https://www.fdic.gov/federal-register-publications</a>. Commenters should submit
only information that the commenter wishes to make available publicly.
The FDIC may review, redact, or refrain from posting all or any portion
of any comment that it may deem to be inappropriate for publication,
such as irrelevant or obscene material. The FDIC may post only a single
representative example of identical or substantially identical
comments, and in such cases will generally identify the number of
identical or substantially identical comments represented by the posted
example. All comments that have been redacted, as well as those that
have not been posted, that contain comments on the merits of the rule
will be retained in the public comment file and will be considered as
required under all applicable laws. All comments may be accessible
under the Freedom of Information Act.
This interim final rule, all comments received, and a summary of
not more than 100 words are available at <a href="https://www.fdic.gov/federal-register-publications">https://www.fdic.gov/federal-register-publications</a> consistent with the Providing Accountability
Through Transparency Act of 2023.

FOR FURTHER INFORMATION CONTACT: Legal Division: Ryan McCarthy,
Counsel, (202) 898-7301, <a href="/cdn-cgi/l/email-protection#483a31252b2b293a3c2031082e2c212b662f273e">[email&#160;protected]</a>; Shane Bogusz, Senior
Attorney, (571) 366-0212, <a href="/cdn-cgi/l/email-protection#6c1f0e030b191f162c0a08050f420b031a">[email&#160;protected]</a>. Risk Management
Supervision: Brian Cox, Deputy Director, Capital Markets, Accounting,
and Policy, (703) 254-0763, <a href="/cdn-cgi/l/email-protection#f59787969a8db593919c96db929a83">[email&#160;protected]</a>; Justin Hagerty, Senior
Examination Specialist, (319) 382-2760, <a href="/cdn-cgi/l/email-protection#2e44464f494b5c5a576e484a474d00494158">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION:

I. Background

The 21st Century ROAD to Housing Act (the Housing Act) became
effective on July 11, 2026. Section 902 of the Housing Act amended the
limited exception for reciprocal deposits (the exception) in section
29(i) of the Federal Deposit Insurance Act (FDI Act). The exception was
added to section 29 by section 202 of the Economic Growth, Regulatory
Relief, and Consumer Protection Act (EGRRCPA) \1\ enacted on May 24,
2018, and allows qualifying institutions to except a capped amount of
reciprocal deposits from being considered to be received by or through
a deposit broker (i.e., the reciprocal deposits are considered to not
be brokered deposits). The FDIC implemented section 202 of EGRRCPA by
amending its brokered deposit and assessment regulations through a 2018
rule.\2\ The FDIC is now issuing this interim final rule (IFR) to amend
its brokered deposit regulations to conform with section 29 as amended
by the Housing Act.
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\1\ Public Law 115-174, 132 Stat. 1296 (May 24, 2018).
\2\ 84 FR 1346 (Feb. 4, 2019).
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A. Section 29 of the FDI Act

Under section 29 of the FDI Act, an insured depository institution
(IDI) is restricted from accepting deposits by or through a deposit
broker unless the institution is well capitalized for Prompt Corrective
Action (PCA) purposes.\3\ The FDIC may waive this restriction if the
IDI is adequately capitalized; however, the restriction cannot be
waived if the institution is undercapitalized.\4\
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\3\ 12 U.S.C. 1831f(a).
\4\ 12 U.S.C. 1831f(c).
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A ``deposit broker,'' as defined by section 29 of the FDI Act,
includes ``any person engaged in the business of placing deposits, or
facilitating the placement of deposits, of third parties with insured
depository institutions or the business of placing deposits with
insured depository institutions for the purpose of selling interests in
those deposits to third parties. . . .'' \5\
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\5\ 12 U.S.C. 1831f(g)(1).
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Section 337.6 of the FDIC's Rules and Regulations implements the
brokered deposit restrictions of section 29 of the FDI Act. Under the
FDIC's regulations, a ``brokered deposit'' is thus defined as ``any
deposit that is obtained, directly or indirectly, from or through the
mediation or assistance of a deposit broker.'' \6\
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\6\ 12 CFR 337.6(a)(2).
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Neither section 29 nor the FDIC's brokered deposit regulations
prescribe reporting requirements for brokered deposits or reciprocal
deposits. Rather, IDIs are required to report deposits in accordance
with the instructions to the Consolidated Reports of Condition and
Income (Call Report) promulgated by the Federal Financial Institutions
Examination Council (FFIEC).\7\ The Call Report instructions describe
the reporting requirements for brokered deposits, including reciprocal
deposits,\8\ to in part support the FDIC's calculation of assessments
under the risk-based assessment system required by section 7 of the FDI
Act. As discussed below, the FFIEC will be issuing supplemental Call
Report instructions for the September 30, 2026 reporting period so that
institutions may report brokered and reciprocal deposits consistent
with the Housing Act.
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\7\ 12 CFR 304.3(a).
\8\ The FDIC defines reciprocal deposits as ``deposits received
by an agent institution through a deposit placement network with the
same maturity (if any) and in the same aggregate amount as covered
deposits placed by the agent institution in other network member
banks.'' 12 CFR 337.6(e)(2)(v).
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B. Section 29(i)--Reciprocal Deposit Exception

Consistent with section 29 of the FDI Act, an ``agent institution''
can except reciprocal deposits received through a deposit placement
network from being classified as brokered deposits up to its applicable
statutory cap.\9\ Prior to the Housing Act, section 29 defined an agent
institution as an IDI that places a covered deposit at other IDIs
through a deposit placement network in amounts that are less than or
equal to the standard maximum deposit insurance amount, if the placing
institution satisfies at least one of three prongs:
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\9\ See 12 U.S.C. 1831f. The 2018 rulemaking introduced the
terms special cap and general cap to refer to the statutory caps
established by section 202 of EGRRCPA. See 84 FR 1346 (Feb. 4,
2019).

(1) the institution, when most recently examined, was found to
have a composite condition of outstanding or good, and is well
capitalized;
(2) the institution has obtained a waiver under section 29(c);
or
(3) the institution does not receive an amount of reciprocal
deposits that causes the total amount of reciprocal deposits held by
the agent institution to be greater than the average of the total
amount of reciprocal deposits held by the agent institution on the
last day of the 4 calendar quarters preceding the calendar quarter
in which the agent institution was found not to have a

[[Page 56024]]

composite condition of outstanding or good or was determined to be
not well capitalized.

The FDIC has interpreted ``a composite condition of outstanding or
good'' to constitute an institution that has been assigned a CAMELS
\10\ composite rating of ``1'' or ``2.'' \11\
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\10\ CAMELS refers to Capital adequacy, Asset quality,
Management, Earnings, Liquidity, and Sensitivity to market risk.
\11\ 84 FR 1346, 1347-48 (Feb. 4, 2019).
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The amount of the four-quarter average described in the third prong
is referred to as the special cap. The maximum amount of reciprocal
deposits that can be treated as not being brokered under the exception
is referred to as the general cap. Prior to the Housing Act, the
general cap was the lesser of $5 billion or 20 percent of the total
liabilities of the agent institution.

C. Section 902 of the 21st Century ROAD to Housing Act

The Housing Act became effective on July 11, 2026, and made two
amendments to the reciprocal deposit exception provisions in section
29. First, the Act changed the amount and calculation method of the
general cap. Second, the Act amended the first prong of the agent
institution definition to replace the requirement that an institution
be found to have a composite condition rating of ``outstanding or
good'' with the requirement that an institution was assigned a CAMELS
rating of ``1,'' ``2,'' or ``3'' under the Uniform Financial
Institutions Rating System (or an equivalent rating under a comparable
rating system).
As discussed below, this IFR amends the FDIC's brokered deposit
regulations in section 337.6 to implement the statutory text of section
29 as amended by the Housing Act. The IFR also makes corresponding
changes to the regulations to facilitate and simplify compliance.

II. Changes To Conform FDIC Brokered Deposit Regulations to Section 902
of the Housing Act

A. General Cap

An agent institution can except reciprocal deposits from being
considered brokered deposits up to either its general cap or special
cap, as applicable.\12\ The Housing Act increased the maximum potential
amount of the general cap and uses a tiered calculation based on the
total liabilities of the agent institution. Consistent with the Housing
Act, the IFR amends the general cap in section 337.6(e)(1) to be the
sum of:
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\12\ The application of the caps is detailed in the 2018 final
rule. See 84 FR 1346 (Feb. 4, 2019).

(1) 50 percent of the portion of the total liabilities of the
agent institution that is less than or equal to $1,000,000,000;
(2) 40 percent of the portion, if any, of the total liabilities
of the agent institution that is greater than $1,000,000,000, but
less than or equal to $10,000,000,000; and
(3) 30 percent of the portion, if any, of the total liabilities
of the agent institution that is greater than $10,000,000,000, but
less than or equal to $96,333,333,333.

Under the general cap, as amended by the Housing Act, the maximum
amount of reciprocal deposits allowed under the exception for any
institution totals $30 billion, which would be the general cap for an
institution with $96.33 billion or more in total liabilities (assuming
the institution is not limited to the special cap). An institution with
less than $96.33 billion in total liabilities must calculate its
general cap using the new tiered methodology. As an example for how the
FDIC would calculate the amount of reciprocal deposits eligible for the
exception, an agent institution with $25 billion in total liabilities
would have a general cap equal to (0.5 * $1 billion) + (0.4 * $9
billion) + (0.3 * $15 billion) = $8.6 billion.
The FDIC will continue to calculate an institution's general cap
based on data reported in its Call Report.

B. Qualifying as an Agent Institution

Consistent with the Housing Act, the IFR amends the first prong of
the agent institution definition \13\ to require that, when most
recently examined under section 10(d) of the FDI Act, an institution
was assigned a CAMELS composite rating of ``1,'' ``2,'' or ``3'' under
the Uniform Financial Institutions Rating System (or an equivalent
rating under a comparable rating system).\14\ The second element of the
definition is that the institution be well capitalized; this element
was not amended by the Housing Act. Thus, under the first prong as
amended, an institution must have a CAMELS composite rating of ``1,''
``2,'' or ``3'' and be well capitalized.
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\13\ The second and third prongs of the agent institution
definition remain unchanged.
\14\ The effective date of a CAMELS composite rating is the
``date of written notification to the institution by its primary
federal regulator or state authority of its supervisory rating.'' 12
CFR 327.4(f).
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The FDIC recognizes that, although the Housing Act amends the first
prong of the agent institution definition to replace the ``outstanding
or good'' rating language, it did not amend the mirroring ``outstanding
or good'' rating language used in the special cap prong. Thus, read
together, the two provisions indicate that an institution that becomes
subject to the special cap because it no longer satisfies the first
prong of the agent institution definition may not have its four-quarter
average (i.e., its special cap) calculated based on the preceding four
quarters. Instead, this calculation may rely on quarters that are
earlier than the preceding four quarters.\15\
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\15\ For example, if an institution is downgraded from a ``2''
to a ``3'' in 2026, then downgraded to a ``4'' in 2030, the special
cap will be based on its reciprocal deposit holdings in 2025 to 2026
(when it was no longer considered ``outstanding or good''), not the
four quarters preceding the downgrade to a ``4.'' Thus, with respect
to an institution that loses agent institution status due to a
ratings downgrade, the special cap no longer approximates the status
quo that exists immediately prior to an institution no longer
meeting the first prong of the agent institution definition.
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Although this could have the effect of an institution's special cap
being smaller or larger than the average of the most recent four
quarters prior to the institution ceasing to meet the first prong of
the agent institution definition, an agent institution that becomes
subject to the special cap may continue to hold reciprocal deposits
previously received in an amount that is greater than the special cap;
\16\ therefore, institutions will not be disqualified from being
considered an agent institution as a result of the timing disparity
between the special cap calculation and its application.
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\16\ See 84 FR 1346, 1349 (Feb. 4, 2019).
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III. Clarifications Regarding Reciprocal Deposits Framework and
Reporting

The FDIC recognizes that section 902 of the Housing Act may result
in increased holdings of reciprocal deposits by IDIs, including by
institutions that previously did not utilize reciprocal deposits. To
facilitate compliance with the FDIC's regulations concerning reciprocal
deposits, and to assist institutions that may be reviewing and relying
upon those regulations for the first time, the FDIC is clarifying
certain aspects of the reciprocal deposits framework.

A. Receipt of Nonmaturity Reciprocal Deposits

An agent institution that becomes subject to the special cap can
continue to hold the reciprocal deposits that it received prior to
becoming subject to the special cap; however, if an institution
``receives'' reciprocal deposits in excess of its special cap, it is no
longer an agent institution, and all of its reciprocal deposits must be
reported as brokered deposits.\17\
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\17\ See id. at 1348-49 (explaining the FDIC's view that the
special cap limits an agent institution's receipt of reciprocal
deposits, not the maintenance, retention, or holding of reciprocal
deposits).

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[[Page 56025]]

Over the past several years, institutions have sought clarity
regarding the ``receipt'' of nonmaturity reciprocal deposits through a
deposit placement network. More specifically, there has been
uncertainty as to whether changes in the composition of the reciprocal
deposits received through a deposit placement network resulting from
actions of the network operator, as opposed to the agent institution
placing covered deposits, constitutes ``receiving'' reciprocal
deposits. For example, the identities of the individual depositors for
whom the agent institution holds reciprocal deposits may change day by
day. Likewise, the amounts of reciprocal deposits attributable to
individual depositors may change without an increase in the aggregate
amount of reciprocal deposits the agent institution receives from the
network.
Section 902 of the Housing Act and this IFR are likely to increase
the range of institutions that participate in reciprocal deposit
networks and that are subject to the FDIC's regulations, which only
underscores the need to provide clarity in this area. Per section 29 of
the FDI Act, an institution satisfies the third prong of the agent
institution definition if it places a covered deposit through a deposit
placement network at other institutions as long as the agent
institution does not receive an amount of reciprocal deposits that
causes the total amount of reciprocal deposits held by the agent
institution to be greater than its special cap. Section 29 defines a
``covered deposit'' as one submitted for placement through a deposit
placement network by an agent institution, and it defines ``reciprocal
deposits'' as deposits received by an agent institution through a
deposit placement network with the same maturity (if any) and in the
same aggregate amount as covered deposits placed by the agent
institution in other network member banks.
The plain meaning of these statutory definitions is that to
``receive'' reciprocal deposits, an agent institution must also place a
covered deposit through a deposit placement network. Only by placing a
covered deposit can an agent institution then ``receive'' an amount of
reciprocal deposits that causes the total amount of its reciprocal
deposits held by the agent institution to be greater than its special
cap.\18\ Thus, an institution cannot receive nonmaturity reciprocal
deposits if it does not first place additional covered deposits through
a deposit placement network.
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\18\ As explained in the 2018 final rule, renewing or rolling
over maturity reciprocal deposits would be considered placement and
receipt of reciprocal deposits. See 84 FR 1348-49 (Feb. 4, 2019).
Nothing in this IFR is intended to alter the FDIC's approach to the
receipt of reciprocal time deposits.
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The statute provides that an institution meets the definition of an
agent institution as long as it does not receive an amount of
reciprocal deposits above its special cap. Thus, to the extent a
deposit placement network alters the individual underlying depositors
or rebalances the amount on deposit at an institution that holds an
amount of reciprocals in excess of its special cap at the time it
becomes subject to the special cap without increasing the aggregate
amount of reciprocals, the institution continues to meet the definition
of an agent institution. If, however, the agent institution places any
covered deposits into the network while holding an amount of reciprocal
deposits above its special cap, it will have received an amount of
reciprocal deposits in excess of its special cap and will no longer
satisfy the agent institution definition.\19\
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\19\ This can have disruptive and costly effects for an
institution because all reciprocal deposits must then be reported as
brokered, unless and until the institution again qualifies as an
agent institution.
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B. Requalifying as an Agent Institution

As discussed above, the Housing Act amended the definition of agent
institution to include institutions that have been assigned a CAMELS
rating of ``1,'' ``2,'' or ``3.'' This amendment expands the scope of
institutions that can qualify as an agent institution, and certain
institutions that did not qualify prior to the Housing Act now meet the
definition of agent institution. Qualifying as an agent institution has
important implications, such as whether an institution may receive
reciprocal deposits (if the institution is not well capitalized and
does not have a waiver) and the extent to which reciprocal deposits are
reported as brokered deposits. The FDIC is therefore clarifying when an
institution qualifies as an agent institution. In general, and as
discussed below, an institution should determine whether it qualifies
as an agent institution as of the quarter-end without regard for
whether the institution was, or was not, an agent institution at any
point throughout the quarter.
1. Supervisory Ratings Change
A well capitalized institution qualifies as an agent institution as
of the date it receives a CAMELS composite rating of ``1,'' ``2,'' or
``3'' from its primary federal regulator (PFR) because it meets the
statutory definition of an agent institution at that time. The FDIC's
brokered deposit regulations neither control nor determine the
effective date of a ratings upgrade. The effective date of a CAMELS
composite rating is the date of written notification to the institution
by its PFR or state authority of its supervisory rating.\20\ If an
institution has a CAMELS composite rating of ``4,'' upon an effective
composite rating upgrade to a CAMELS ``1,'' ``2,'' or ``3'' from its
PFR, the institution immediately becomes an agent institution under the
first prong of the definition, if it is well capitalized.
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\20\ The FDIC uses the date of written notification by an
institution's PFR for purposes of the brokered deposit regulations,
consistent with the FDIC's assessment regulations at 12 CFR
327.4(f).
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2. Capital Category Change
Similarly, an institution that has a CAMELS composite rating of
``1,'' ``2,'' or ``3'' qualifies as an agent institution on the date it
is deemed to be within the well capitalized category. Like rating
changes, the FDIC's brokered deposit regulations do not control or
determine the effective date of a capital category change. Rather, the
brokered deposit regulations incorporate the implementing regulations
for section 38 of the FDI Act promulgated by the Federal banking
agencies for determining the date of a capital category change because
section 29 also incorporates the section 38 capital standards.\21\
Thus, when determining whether it qualifies as an agent institution, an
institution should determine the effective date of its capital category
change according to the PCA laws and regulations.
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\21\ 12 CFR 337.6(a)(3); FDIC--12 CFR part 324, subpart H; Board
of Governors of the Federal Reserve System--12 CFR part 208; and
Office of the Comptroller of the Currency--12 CFR part 6.
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3. Obtaining a Brokered Deposit Waiver
An institution qualifies as an agent institution under the second
prong of the agent institution definition on the date it receives
written notice from the FDIC that its application for a brokered
deposit waiver under section 29(c) has been approved. Likewise, an
institution that obtains a waiver while qualifying as an agent
institution under the special cap prong will no longer be subject to
the special cap on the date it receives written notice from the FDIC
that its application for a brokered deposit waiver has been
approved.\22\
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\22\ As a condition of approving a brokered deposit waiver, the
FDIC may limit the amount of reciprocal and brokered deposits an
institution may accept, hold, renew, etc., and therefore, such an
institution may not necessarily be able to rely on the general cap.

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[[Page 56026]]

4. Special Cap
An institution that is not well capitalized and does not have a
brokered deposit waiver can only receive reciprocal deposits if it
qualifies as an agent institution under the special cap prong of the
definition. Otherwise, section 29 prohibits these institutions from
accepting brokered deposits because they are not well capitalized.
Thus, the date these institutions qualify as an agent institution also
determines what deposit taking activities are permissible. The FDIC is
therefore clarifying when an institution requalifies under the special
cap.
As discussed above, section 29 provides that an institution meets
the definition of an agent institution as long as it does not receive
an amount of reciprocal deposits above its special cap. An institution
that places an amount of covered deposits such that the amount received
in return causes the amount held to exceed its special cap does not
qualify as an agent institution. Such an institution will requalify as
an agent institution under the special cap prong on the date it reduces
its reciprocal deposits to an amount that is less than its special cap.

C. Call Report Changes

The Housing Act became effective in the third quarter of 2026 and
the FFIEC will issue Supplemental Instructions as part of the September
30, 2026 Call Report Instructions for information on reporting brokered
and reciprocal deposits under the new law. The FFIEC indicated that it
anticipates updating the Call Report instructions to conform to the new
law for purposes of reporting in the Call Report by December 31, 2026.
No new line items will need to be added to the Call Report, although
the FDIC anticipates working through the FFIEC so that RC-O Line 9 for
brokered reciprocal deposits will be reported confidentially as part of
the instruction updates.
In conjunction with conforming assessment regulation changes made
in 2018, the FFIEC updated the Call Report to add Memorandum item 1.g,
``Total reciprocal deposits,'' to Schedule RC-E.\23\ However, this
line, if viewed alongside Schedule RC-O, item 9 (``Brokered reciprocal
deposits''),\24\ may reveal non-public supervisory information. The
issue arises because an agent institution that no longer qualifies for
the reciprocal deposit exception must report all of its reciprocal
deposits as brokered reciprocal deposits on Schedule RC-O, item 9.
These deposits previously would have been excepted and not reported as
brokered, up to the applicable general or special cap amount for that
institution. This reporting reclassification can cause the amount of
brokered reciprocal deposits an institution must report on Schedule RC-
O, item 9 to increase significantly over the period of a single quarter
while Schedule RC-E, Memorandum item 1.g, the line for total reciprocal
deposits, typically does not change to the same degree.
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\23\ See Fed. Fin. Inst. Examination Council, FFIEC 051 Call
Report Instruction Book Update (Sept. 2018).
\24\ The FDIC uses Schedule RC-O, item 9 for assessment purposes
because brokered reciprocal deposits are excluded from the brokered
deposit ratio for small institutions that are well capitalized and
well rated.
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The interplay of these two lines together may indicate that an
institution no longer qualifies as an agent institution. Because an
institution that is well capitalized will only be disqualified from
excepting reciprocal deposits if it does not have a CAMELS composite
rating of ``1,'' ``2,'' or ``3,'' an observer may be able to infer an
institution's confidential supervisory rating through changes in the
amount of brokered reciprocal deposits reported on Schedule RC-O, item
9. To counter this unintended consequence while still collecting the
necessary data for assessment purposes, the FDIC intends to work
through the FFIEC to make Schedule RC-O, item 9 confidential when the
Call Report instructions are updated to conform to the Housing Act.

IV. Expected Effects

The rule implements section 902 of the Housing Act by making
conforming changes to the FDIC's regulations. Relevant regulations as
of June 30, 2026, and financial data as of March 31, 2026, are
generally used to estimate outcomes under the IFR and the baseline.\25\
This section summarizes the analysis performed by the FDIC to estimate
those economic impacts. The FDIC notes at the outset that the IFR is
implementing Section 902 of the Housing Act, which was effective upon
enactment. Therefore, relative to a post-statutory baseline these
amendments will have no substantive effect.
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\25\ The FDIC is analyzing expected effects based on March 31,
2026 Call Report data, which is the last available Call Report data
prior to the enactment of section 902 of the Housing Act on July 11,
2026.
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As of March 31, 2026, there were 4,278 FDIC-insured institutions.
Of these, 1,971 institutions reported having brokered deposits, which
totaled $1.204 trillion. Additionally, a total of 2,089 institutions
reported having reciprocal deposits totaling $462.8 billion. Of these,
331 institutions reported brokered reciprocal deposits totaling $91.9
billion.
The principal effect of section 902 of the Housing Act, and of this
implementing regulation, will be that a smaller share of reciprocal
deposits are classified as brokered deposits. As previously discussed,
the IFR would increase the general cap applicable to reciprocal
deposits for certain institutions. The IFR would increase the general
cap from the lesser of $5 billion or 20 percent of total liabilities to
a tiered calculation based on total liabilities. Further, the IFR
implements the Housing Act's definition of ``outstanding or good'' with
respect to the general cap, thereby expanding the agent institution
definition to include institutions assigned a CAMELS composite rating
of ``3.'' These amendments would increase the number of IDIs who can
exclude certain volumes of reciprocal deposits from being considered
brokered deposits. In turn, these aspects of the IFR may result in an
increase in the volume of reciprocal deposits held by IDIs, as well as
an increase in the number of institutions holding reciprocal deposits.
The FDIC does not have the information necessary to accurately estimate
the number of IDIs affected or any such changes in volumes of
reciprocal deposits, reported or held, in future periods.
The IFR could indirectly affect deposit insurance assessments for a
small number of institutions. The following assessments impact is based
on data as of March 31, 2026, with the current assessment
regulations.\26\
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\26\ On June 25, 2026, the FDIC Board approved a notice of
proposed rulemaking that would amend the FDIC's assessment
regulations. See 91 FR 39794 (Jun. 30, 2026).
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For established small institutions, the IFR may decrease their
brokered deposit ratio, potentially resulting in a change in the bank's
assessment. The brokered deposit ratio is one of the financial measures
used to determine assessment rates for established small
institutions.\27\ The ratio is the difference between brokered deposits
and 10 percent of total assets to total assets. Additionally, for
institutions that are well capitalized and have a CAMELS composite
rating of ``1'' or ``2,'' brokered reciprocal deposits are deducted
from brokered deposits.\28\ Established small institutions that are
well capitalized and have a CAMELS composite rating of ``1'' or ``2''
can already deduct brokered reciprocal deposits from brokered deposits
and generally would not be affected by the

[[Page 56027]]

IFR, for assessment purposes.\29\ Furthermore, the IFR would not affect
the assessment rates of small institutions that do not have reciprocal
deposits or whose brokered deposits comprise less than 10 percent of
total assets. The FDIC estimates that 16 small FDIC-insured
institutions could have a lower assessment due to the effect of the IFR
on their brokered deposit ratio, if their reciprocal deposits are
excepted from treatment as brokered.
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\27\ See 12 CFR 327.16(a)(1).
\28\ See 12 CFR 327.16(a)(1)(ii)(A).
\29\ The core deposit ratio is measured as domestic deposits,
excluding brokered deposits and uninsured non-brokered time
deposits, divided by total liabilities. Reciprocal deposits that are
brokered reciprocal deposits will continue to be excluded from the
ratio. See 12 CFR 327.16(b) and 12 CFR part 327, Appendix B to
Subpart A.
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For large and highly complex institutions, the IFR may increase the
core deposit ratio, potentially resulting in a reduction in the bank's
assessment. The core deposit ratio applies to large and highly complex
institutions and is measured as domestic deposits, excluding brokered
deposits and uninsured non-brokered time deposits, divided by total
liabilities.\30\ The FDIC estimates that 14 large or highly complex
institutions could have a lower assessment due to the effect of the IFR
on their core deposit ratio, if their reciprocal deposits are excepted
or further excepted from treatment as brokered.
---------------------------------------------------------------------------

\30\ See 12 CFR 327.16(b) and Appendix B to Subpart A.
---------------------------------------------------------------------------

For certain large and highly complex institutions and new small
institutions that meet the revised definition of agent institution, the
IFR may alter their brokered deposit adjustment, resulting in a change
in the bank's assessment. The brokered deposit adjustment applies to
all new small institutions in Risk Categories II, III, and IV, and all
large and all highly complex institutions, except large and highly
complex institutions (including new large and new highly complex
institutions) that are well capitalized and have a CAMELS composite
rating of 1 or 2.\31\ The brokered deposit adjustment can increase
assessments for institutions that have brokered deposits in excess of
10 percent of domestic deposits.\32\ The FDIC estimates that three
FDIC-insured institutions could have a lower assessment due to the
effect of the IFR on the brokered deposit adjustment, if their
reciprocal deposits are excepted from treatment as brokered.
---------------------------------------------------------------------------

\31\ See 12 CFR 327.16(e)(3).
\32\ Id.
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Based on data as of March 31, 2026, the FDIC estimates that
aggregate assessment revenue would be reduced by an estimated $45.8
million annually. However, as previously discussed, the IFR is
implementing section 902 of the Housing Act, which was effective upon
enactment, and thus, relative to a post-statutory baseline, the IFR
will have no substantive effect on assessment revenue.
Through the IFR, the FDIC further clarifies certain provisions
within and related to section 29 of the FDI Act, such as what
constitutes ``receipt'' of nonmaturity reciprocal deposits,
requalifying as an agent institution, effective date of a supervisory
ratings or capital category change, effective date for written notice
of a brokered deposit waiver, or when an institution requalifies under
the special cap. These aspects of the IFR should benefit IDIs by
enabling them to comply with section 29 of the FDI Act more
efficiently.
Institutions may incur small costs to make changes to their systems
and procedures for maintaining compliance with section 29 of the FDI
Act. However, these changes are likely to be de minimis.

V. Administrative Law Matters

The FDIC is issuing the IFR without prior notice and the
opportunity for public comment and the delayed effective date
ordinarily prescribed by the Administrative Procedure Act (APA).\33\
Pursuant to section 553(b)(B) of the APA, general notice and the
opportunity for public comment are not required with respect to a
rulemaking when an ``agency for good cause finds (and incorporates the
finding and a brief statement of reasons therefore in the rules issued)
that notice and public procedure thereon are impracticable,
unnecessary, or contrary to the public interest.'' \34\
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\33\ 5 U.S.C. 553.
\34\ 5 U.S.C. 553(b)(B).
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Notice and comment are unnecessary for this rule. The substantive
changes made by the interim final rule implement section 902 of the
Housing Act, which became effective upon enactment. Notice and comment
are unnecessary as the FDIC is required to conform its regulations to
avoid legal conflicts.\35\ Delaying the issuance of amended
regulations--or delaying the effective date of those regulations--would
prolong the time in which the FDIC's regulations were inconsistent with
the FDI Act, as amended by the Housing Act, causing uncertainty for
industry participants. The FDIC has therefore determined that the
public notice and participation ordinarily required by the APA before a
regulation may take effect would, in this case, be unnecessary and
contrary to the public interest and that good cause exists to waive the
customary 30-day delayed effective date.
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\35\ See Gray Panthers Advoc. Comm. v. Sullivan, 936 F.2d 1284,
1291-92 (D.C. Cir. 1991) (citations omitted) (public comment is
unnecessary if the regulation ``merely reiterates the statutory
language''); Metzenbaum v. FERC, 675 F.2d 1282, 1291 (D.C. Cir.
1982) (notice and comment was unnecessary for nondiscretionary act);
accord Lake Carriers' Ass'n v. EPA, 652 F.3d 1, 10 n.10 (D.C. Cir.
2011) (collecting cases).
---------------------------------------------------------------------------

Nevertheless, the FDIC desires to have the benefit of public
comment before adopting a permanent final rule and thus invites
interested parties to submit comments during a 30-day comment period.
In adopting a final regulation, the FDIC will revise the IFR if
appropriate in light of the comments received.

A. Paperwork Reduction Act

This IFR has been reviewed for compliance with the Paperwork
Reduction Act of 1995 (PRA) (44 U.S.C. 3501 et seq.). In accordance
with the PRA, the FDIC may not conduct or sponsor, and an organization
is not required to respond to, an information collection unless the
information collection displays a currently valid Office of Management
and Budget (OMB) control number. The FDIC has reviewed this IFR and
determined that it does not create any information collection or revise
any existing collection of information. Accordingly, no PRA submissions
to OMB will be made with respect to this rule.

B. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) requires an agency to consider
whether the rules it proposes will have a significant economic impact
on a substantial number of small entities. The RFA applies only to
rules for which an agency publishes a general notice of proposed
rulemaking pursuant to 5 U.S.C. 553(b). As discussed previously,
consistent with section 553(b)(B) of the APA, the FDIC has determined
for good cause that notice and opportunity for public comment prior to
the rule's effective date is contrary to the public interest and
therefore is not issuing a notice of proposed rulemaking. Accordingly,
the FDIC has concluded that the RFA's requirements relating to initial
and final regulatory flexibility analyses do not apply. Nevertheless,
the FDIC is interested in receiving feedback on ways that it could
reduce any potential burden of the IFR on small entities.

[[Page 56028]]

C. Riegle Community Development and Regulatory Improvement Act

The Riegle Community Development and Regulatory Improvement Act of
1994 (RCDRIA),\36\ generally provides that new regulations or
amendments to regulations prescribed by a Federal banking agency that
impose additional reporting, disclosure, or other new requirements on
insured depository institutions shall take effect on the first day of a
calendar quarter that begins on or after the date on which the
regulations are published in final form, unless the agency determines,
for good cause published with the rule, that the rule should become
effective before such time.\37\ Pursuant to section 553(d)(1) of the
APA, a rule may become effective without waiting for the delayed
effective date to elapse where the rule grants an exemption or relieves
a restriction.\38\ For the reasons discussed above, and because the IFR
relaxes certain aspects of the FDIC's restrictions on reciprocal
deposits, the FDIC has determined that good cause exists for the IFR to
become effective immediately upon publication in the Federal Register.
---------------------------------------------------------------------------

\36\ 12 U.S.C. 4802.
\37\ 12 U.S.C. 4802(b).
\38\ 5 U.S.C. 553(d)(1).
---------------------------------------------------------------------------

D. Plain Language

Section 722 of the Gramm-Leach-Bliley Act \39\ requires the Federal
banking agencies to use plain language in all proposed and final
rulemakings published in the Federal Register after January 1, 2000.
The FDIC invites your comments on how to make this rule easier to
understand, including the following:
---------------------------------------------------------------------------

\39\ Public Law 106-102, section 722, 113 Stat. 1338, 1471 (Nov.
12, 1999); 12 U.S.C. 4809.
---------------------------------------------------------------------------

<bullet> Has the FDIC organized the material to suit your needs? If
not, how could the rule be more clearly stated?
<bullet> Are the requirements in the rule clearly stated? If not,
how could the rule be more clearly stated?
<bullet> Does the rule contain language or jargon that is not
clear? If so, which language requires clarification?
<bullet> Would a different format (grouping and order of sections,
use of headings, paragraphing) make the rule easier to understand? If
so, what changes to the format would make the rule easier to
understand?
<bullet> What else could the FDIC do to make the rule easier to
understand?

E. Executive Orders 12866, 13563, and 14192

Executive Order 12866 directs agencies to assess the costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits.
This rule was drafted and reviewed in accordance with Executive Order
12866. Within OMB, the Office of Information and Regulatory Affairs
(OIRA) has determined that this rulemaking is not a ``significant
regulatory action'' under section 3(f) of Executive Order 12866.
Accordingly, the draft rule was submitted to OIRA for review. As noted
in other sections of the SUPPLEMENTARY INFORMATION of this document,
the FDIC has assessed the costs and benefits of this rulemaking and has
made a reasoned determination that the benefits of this rulemaking
justify its costs. Executive Order 14192, titled ``Unleashing
Prosperity Through Deregulation,'' was issued on January 31, 2025.
Section 3(a) of Executive Order 14192 requires an agency, unless
prohibited by law, to identify at least ten existing regulations to be
repealed when the agency publicly proposes for notice and comment or
otherwise promulgates a new regulation. In furtherance of this
standard, section 3(c) of Executive Order 14192 requires that the new
incremental costs associated with new regulations shall, to the extent
permitted by law, be offset by the elimination of existing costs
associated with at least ten prior regulations. This rule is not
expected to be a regulatory action under Executive Order 14192.

VI. Request for Comment

The FDIC invites comments on all aspects of the interim final rule.
In particular, the FDIC requests comment on the following:
Question 1: Do the amendments to the FDIC's regulations made by
this interim final rule fully and properly implement section 902 of the
Housing Act? If not, how could the amendments be improved?
Question 2: Is the FDIC's interpretation of the third prong of the
agent institution definition in Section 29 of the FDI Act, as amended
by the Housing Act, regarding the timing of the four-quarter average,
appropriate? If not, what interpretation should the FDIC adopt and why?
Question 3: Are the clarifications contained in this interim final
rule regarding the reciprocal deposit regulations sufficiently clear?
If not, how could they be improved?
Question 4: Is the FDIC's interpretation of when a reciprocal
deposit is ``received'' by an agent institution appropriate? If not,
what interpretation should the FDIC adopt and why? Would additional
clarity be helpful?
Question 5: Are there other aspects of the FDIC's reciprocal
deposit regulations that are ambiguous or unclear? If so, what changes,
including adopting amended regulations, should the FDIC consider to
address such ambiguity?

List of Subjects in 12 CFR Part 337

Banks, Banking, Reporting and recordkeeping requirements, Savings
associations, Securities.

Authority and Issuance

For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation amends 12 CFR part 337 as follows:

PART 337--UNSAFE AND UNSOUND BANKING PRACTICES

0
1. The authority citation for part 337 continues to read as follows:

Authority: 12 U.S.C. 375a(4), 375b, 1463, 1464, 1468, 1816,
1818(a), 1818(b), 1819, 1820(d), 1821(f), 1828(j)(2), 1831, 1831f,
1831g, 5412.

0
2. Amend Sec. 337.6 by:
0
a. Revising paragraphs (a)(3)(ii) and (iii), (e)(1) and (2); and
0
b. Adding paragraphs (e)(3) and (4).
The revisions and additions read as follows:

Sec. 337.6 Brokered deposits.

(a) * * *
(3) * * *
(ii) If the appropriate Federal banking agency reclassifies a well
capitalized insured depository institution as adequately capitalized
pursuant to section 38 of the Federal Deposit Insurance Act, the
institution so reclassified shall be subject to the provisions
applicable to such lower capital category under this section and Sec.
337.7, including paragraph (e)(2)(i)(A)(2) of this section.
(iii) An insured depository institution shall be deemed to be
within a given capital category for purposes of this section and Sec.
337.7, including paragraph (e)(2)(i)(A)(2) of this section, as of the
date the institution is notified of, or is deemed to have notice of,
its capital category, under regulations implementing section 38 of the
Federal Deposit Insurance Act issued by the appropriate Federal banking
agency for that institution.
* * * * *
(e) Limited exception for reciprocal deposits--(1) Limited
exception. The sum of the following amounts of reciprocal deposits of
an agent institution shall not be considered to be funds obtained,
directly or indirectly, by or through a deposit broker:

[[Page 56029]]

(i) An amount equal to 50 percent of the portion of the total
liabilities of the agent institution that is less than or equal to
$1,000,000,000;
(ii) An amount equal to 40 percent of the portion, if any, of the
total liabilities of the agent institution that is greater than
$1,000,000,000, but less than or equal to $10,000,000,000; and
(iii) An amount equal to 30 percent of the portion, if any, of the
total liabilities of the agent institution that is greater than
$10,000,000,000, but less than or equal to $96,333,333,333.
(2) Additional definitions that apply to the limited exception for
reciprocal deposits--(i) Agent institution means an insured depository
institution that places a covered deposit through a deposit placement
network at other insured depository institutions in amounts that are
less than or equal to the standard maximum deposit insurance amount,
specifying the interest rate to be paid for such amounts, if the
insured depository institution:
(A)(1) When most recently examined under section 10(d) of the
Federal Deposit Insurance Act (12 U.S.C. 1820(d)) was assigned a CAMELS
rating of 1, 2, or 3 under the Uniform Financial Institutions Rating
System (or an equivalent rating under a comparable rating system); and
(2) Is well capitalized;
(B) Has obtained a waiver pursuant to paragraph (c) of this
section; or
(C) Does not receive an amount of reciprocal deposits that causes
the total amount of reciprocal deposits held by the agent institution
to be greater than the average of the total amount of reciprocal
deposits held by the agent institution on the last day of each of the
four calendar quarters preceding the calendar quarter in which the
agent institution was found not to have a composite condition of
outstanding or good or was determined to be not well capitalized.
(ii) Covered deposit means a deposit that:
(A) Is submitted for placement through a deposit placement network
by an agent institution; and
(B) Does not consist of funds that were obtained for the agent
institution, directly or indirectly, by or through a deposit broker
before submission for placement through a deposit placement network.
(iii) Deposit placement network means a network in which an insured
depository institution participates, together with other insured
depository institutions, for the processing and receipt of reciprocal
deposits.
(iv) Network member bank means an insured depository institution
that is a member of a deposit placement network.
(v) Reciprocal deposits means deposits received by an agent
institution through a deposit placement network with the same maturity
(if any) and in the same aggregate amount as covered deposits placed by
the agent institution in other network member banks.
(3) Requalifying as an Agent Institution due to a Rating Change or
Receipt of Reciprocal Deposits in Excess of 4-Quarter Average--(i)
Rating change. The effective date of a CAMELS rating change for
purposes of satisfying the agent institution definition under paragraph
(e)(2) of this section is the date of written notification to the
insured depository institution by its appropriate Federal banking
agency of its supervisory rating.
(ii) Receipt of Reciprocal Deposits in Excess of 4-Quarter Average.
An insured depository institution that does not satisfy the agent
institution definition under paragraph (e)(2) of this section because
it receives an amount of reciprocal deposits that causes the total
amount of reciprocal deposits held to be greater than the amount
specified in paragraph (e)(2)(i)(C) of this section is considered to
satisfy the definition as of the date the amount of reciprocal deposits
held by the insured depository institution is less than the amount
specified in paragraph (e)(2)(i)(C) of this section.
(4) Receipt of nonmaturity reciprocal deposits. For purposes of
this section, an agent institution receives nonmaturity reciprocal
deposits through a deposit placement network if the deposit is received
from a deposit placement network as a result of the agent institution
submitting a new covered deposit for placement through the deposit
placement network.

Federal Deposit Insurance Corporation.

By order of the Board of Directors.
Dated at Washington, DC, on August 28, 2026.
Jennifer M. Jones,
Deputy Executive Secretary.
[FR Doc. 2026-17865 Filed 8-31-26; 8:45 am]
BILLING CODE 6714-01-P

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