FDIC Advisory Committee on 

Community Banking 

April 13, 2021 

Supervision Update 
FDIC Advisory Committee on 

Community Banking 

April 13, 2021 

Supervision Update – Pandemic Response 
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FDIC Coronavirus Pandemic Response 

The FDIC’s timely and targeted 

response to the Coronavirus

pandemic allowed us to fulfill our 

mission of maintaining stability

and public confidence in the

nation’s financial system. 

Our Response to the Coronavirus Pandemic 

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Encouraged 

Banks to Work 

with Affected 

Customers and 

Communities 

Issued Frequently Asked Questions for financial

institutions and bank customers 

Increased flexibility for banks to work with their 

customers 

Clarified that prudent efforts to modify terms of existing

loans will not be subject to examiner criticism 

Allowed for delayed receipt of required appraisals for

certain real estate loans 

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Fostered 

Small 

Business 

Lending 

Clarified that loans issued under the PPP would receive a 

zero risk weight for risk-based capital purposes 

Supported banks’ participation in the Small Business

Administration’s Paycheck Protection Program (PPP) 

Encouraged banks to use their capital and liquidity to

support the US economy, small businesses, and

individual households 

Approved rules to mitigate the impact of both PPP 

lending on banks’ deposit insurance assessments and

participation in the PPP Lending Facility on banks’

regulatory capital ratios 

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Implemented 

Temporary 

Examination 

Procedures and 

Heightened 

Monitoring 

Activities 

Temporarily paused examinations to allow bankers time

to adapt to changing conditions, and then conducted

off-site, full-scope examinations to meet statutory

examination requirements 

Expanded risk-monitoring of banks whose activities or

concentrations may present additional concerns due to the economic consequences of the pandemic 

Safety And 

Soundness 

1,301 Exams 

Completed 

BSA 

1,324 Exams 

Completed 

Information 

Technology 

1,291 Exams 

Completed 

Specialty* 

292 Exams 

Completed 

4,208 

Exams 

Completed 

From March 16, 2020 –March 15, 2021 

*Specialty examination areas include Trust, Government Securities Dealer, Municipal Securities Dealer, and Transfer Agent 

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Enhanced 

Communication 

Efforts 

Issued guidelines outlining the FDIC’s supervisory

response to the pandemic 

Created alternative procedures for internal and external

communication channels, including virtual meetings

and electronic workflows 

Increased frequencyof communication with banking

organizations, state and federal regulatory agencies,

and trade associations 

Engaged in increased industry outreach through

webinars, banker roundtables, and podcasts 

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Regulatory Response 

March 2020 

*FDIC Announces 

Steps to Protect 

Banks and 

Consumers and to 

April 2020 

*Interagency 

Statement on Loan 

Modifications for 

Customers Impacted 

May 2020 

*FAQs for Financial 

Institutions 

Impacted by the 

COVID-19 Pandemic 

June 2020 

*Interagency 

Guidance on Safety & 

Soundness 

Assessments in Light 

August 2020 

*FFIEC Statement on 

Additional Loan 

Accommodations 

*Modifications to the 

October 2020 

*Interim Final Rule to 

Provide Temporary 

Relief from Part 363 

Audit and Reporting 

Continue Operations 

*Statement on the 

Use of Capital and 

Liquidity Buffers 

*Interim Final Rules: 

Eligible Retained 

Income and Money 

Market Mutual Fund 

Liquidity Facility 

by the Pandemic 

*Webinar on the 

above Statement 

*Temporary 

Modifications to the 

Community Bank 

Leverage Ratio 

*Neutralized Effects 

of PPP Loans and 

PPP Lending 

Exposures on RiskBased Capital Ratios 

*Temporary Changes 

to the 

Supplementary 

Leverage Ratio 

*Modified the 

Liquidity Coverage 

Ratio 

of the Pandemic 

*Neutralized impact 

on Deposit Insurance 

Assessment 

stemming from 

participation in the 

PPP, PPPL, and 

Money Market 

Mutual Fund Facility 

Community Bank 

Leverage Ratio 

Framework 

*Webinar: PPP Loan 

Forgiveness and 

Changes to the PPP 

Program 

September 2020 

*Webinar to Discuss 

Economic Impact 

Payments and 

Promote Access to 

Affordable Bank 

Accounts 

Requirements 

November 2020 

*Interim Final Rule to 

Temporarily Change 

Asset Thresholds for 

Certain Rules 

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Resources 

• https://www.fdic.gov/coronavirus/ 

• Frequently Asked Questions for Financial Institutions Affected by the Coronavirus Disease 2019 

• Coronavirus (COVID-19) Information for Small Business Lenders 

• FIL-36-2020: Revised Interagency Statement on Loan Modifications by Financial Institutions 

Working with Customers Affected by the Coronavirus 

• FDIC Issues Final Rule to Mitigate the Deposit Insurance Assessment Effect of Participation in the 

Paycheck Protection Program (PPP), the PPP Liquidity Facility, and the Money Market Mutual 

Fund Liquidity Facility 

• FDIC Approves Interim Final Rule to Provide Temporary Relief from Part 363 Audit and Reporting 

Requirements 

• FIL-27-2020: Temporary Alternative Procedures for Sending Supervision-Related Mail and 

Email to the FDIC 

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Operational Response to the Pandemic 

Leveraged Telework 

• Moved workforce to remote 

work in a quick and efficient 

manner 

• Ensured all employees were 

equipped for mobile work 

• Maintained IT systems and 

remote capabilities with 

minimal disturbance to staff 

• Implemented flexible work 

schedules 

Expanded 

Telework Policy 

Adaptable IT 

Infrastructure 

Flexible Schedules 

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Contingency

Operating 

Strategies 

Hired additional entry-level staff 

Offered examination staff a leave 

buyback option 

Rehired retired annuitants in offices with 

significant training responsibilities 

Initiated a number of continuity planning

protocols 

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FDIC Advisory Committee on 

Community Banking 

April 13, 2021 

Supervision Update – Brokered Deposit and Interest Rate Risk Restrictions 
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Brokered Deposits and Interest Rate Restrictions 

On December 15, 2020, the FDIC 

finalized revisions to its regulations 

relating to brokered deposits and 

interest rate restrictions that apply to 

less than well-capitalized insured 

depository institutions (IDIs). 

The revisions became effective on April 1, 2021, with a full compliance date of January 1, 2022. 

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Changes Related to Brokered Deposits 

What is a Deposit Broker? 

Any person engaged 

in the business of 

placing deposits or 

of facilitating the 

placement of 

deposits of third 

parties with IDIs 

An agent or trustee 

who establishes a 

deposit account to 

use the proceeds of 

the account to fund 

a prearranged loan 

Any person placing 

deposits with IDIs to 

sell those deposits 

or interest in those 

deposits to third 

parties 

Any IDI that is less 

than well 

capitalized, and any 

employee of any 

such IDI, that 

solicits deposits by 

offering rates of 

interest 

significantly higher 

than rates offered by 

other IDIs in the 

IDI’s normal market 

area 

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Changes Related to Brokered Deposits 

Placing Deposits Facilitating the Placement of Deposits 

If the person, while engaged in business, 

receives third-party funds and deposits 

those funds at more than one IDI 

A person with an exclusive deposit placement 

arrangement with one IDI does not meet the 

“deposit broker” definition 

For deposits placed at more than one IDI, if 

the person, while engaged in business: 

• Has legal authority to close the account or 

move the third party’s funds to another 

IDI; 

• Is involved in negotiating or setting rates, 

fees, terms, or conditions for the deposit 

account; or 

• Engages in matchmaking services 

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Changes Related to Brokered Deposits 

Must File Notice with the FDIC 

Primary 

Purpose 

Exception 

25% of Assets: 

Less than 25% of the total assets that the agent or nominee has 

under administration for its customers are deposited in IDIs 

Enabling Transactions: 

100% of depositors’ funds that the agent or nominee places at 

IDIs are in transaction accounts, and no fees, interest, or other 

remuneration is provided to the depositor 

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Property management services Collateralsecuring credit card loans

Cross-border clearing services Programs to pay for

qualified medical expenses

Mortgage servicing 529 Plans

Real estate transaction services Tax-advantaged retirement programs

1031 exchanges Programs for government beneficiaries

Certain reserve accounts

(CFTC and SEC rules)

No Notice Required

Changes Related to Brokered Deposits 

No Notice Required 

Primary 

Purpose 

Exception 

Other relationships the FDIC 

recognizes for primary purpose exceptions 

Property management services Collateral securing credit card loans 

Cross-border clearing services Programs to pay for 

qualified medical expenses 

Mortgage servicing 529 Plans 

Real estate transaction services Tax-advantaged retirement programs 

1031 exchanges Programs for government 

beneficiaries 

Certain reserve accounts 

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Changes Related to Interest Rate Restrictions 

National Rate National Rate Cap 

Average of rates paid by all IDIs and insured 

credit unions on a given deposit product, 

weighted by market share of domestic 

deposits 

The higher of: 

• The national rate plus 75 basis points, or 

• For maturity deposits: 120% of the 

current yield on similar maturity U.S. 

Treasury obligations, plus 75 basis 

points, or 

• For anynonmaturitydeposit: the federal 

funds rate plus 75 basis points 

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Changes Related to Interest Rate Restrictions 

Local Rate 

Cap 

An IDI no longer has to receive a high rate area

determination or calculate average rates in its local 

market area. 

The local market rate cap is 90% of the highest interest 

rate on a particular deposit product offered within the 

IDI’s local market area. 

• An IDI’s local market area is any readily defined 

geographical market area in which the IDI accepts or 

solicits deposits. 

• An IDI shall notify the FDIC of the highest rate paid in its 

local market area and update calculations monthly. 
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Changes Related to Interest Rate Restrictions 

Off-Tenor 

Deposit 

Products 

If an institution seeks to offer a product with a maturity

for which the FDIC does not publish the national rate cap 

or that is not offered by another institution within its local 

market area, the IDI must use the rate offered on the next 

lower on-tenor maturity of that product. 

On-tenor Maturities: 

1-month 24-months 

3-months 36-months 

6-months 48-months 

12-months 60-months 

Off-tenor Maturities: All other term periods 
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Changes Related to Interest Rate Restrictions 

Reminder: A well capitalized IDI may pay interest 

on deposits without restriction. 

A well capitalized IDI is not subject to the restrictions imposed by§337.6 or§337.7 
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Changes Related to Nonmaturity Deposits 

A less than well capitalized IDI may not solicit deposits by 

offering a rate above its rate caps or accept brokered deposits. 

Solicit Nonmaturity Deposit 

• Open a nonmaturity account 

• Raise the rate paid on a nonmaturity account existing when the IDI was last 

well capitalized 

• Credit funds for a new depositor to a nonmaturity account existing when the 

IDI was last well capitalized 

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Changes Related to Nonmaturity Deposits 

A less than well capitalized IDI may not solicit deposits by 

offering a rate above its rate caps or accept brokered deposits. 

Accepts Nonmaturity Brokered Deposit 

• From a particular deposit broker: 

 When opening a new nonmaturity account 

 When the account balance exceeds the account balance at the time the 

institution declined to less than well capitalized 

• For agency or nominee accounts, when the IDI credits any fund for a new 

depositor to a nonmaturity account 

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Changes Related to Nonmaturity Deposits 

A less than well capitalized IDI with a waiver to accept brokered 

deposits may not pay interest in excess of the applicable rate cap on: 

• From a particular deposit broker: 

 Any new nonmaturity accounts 

 Any amount of funds that exceed the account balance at the time the 

institution fell to less than well capitalized 

• For agency or nominee accounts, any funds for a new depositor 

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Resources 

• FIL-113-2020: Combined Final Rule on Brokered Deposits and Interest Rate 

Restrictions 

• FIL-14-2021: Industry Webinar on Final Rule Revising Brokered Deposits and 

Interest Rate Restrictions 

• Final Rule: Brokered Deposits and Interest Rate Restrictions 

• Fact Sheet on Brokered Deposits 

• Fact Sheet on Interest Rate Restrictions 

• FIL-23-2021:Webpage with Information on the Brokered Deposits Regulation 

including Instructions for Filing Requirements under the Primary Purpose 

Exception 

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FDIC Advisory Committee on

Community Banking April 13, 2021 

Supervision Update – Consumer Compliance 
FDIC: 

 

Streamlined 

Report of 

Examination 

Pilot for Low-Risk Financial Institutions 

(May 1, 2021 – June 30, 2021) 

Examination Efficiency and Timely Turnaround 

First Pilot Phase Feedback – Overall Positive 

Examination Process Remains the Same 

Written Report Format is Streamlined 

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FDIC: 

 

 

 

Streamlined 

Report of 

Examination 

Consumer Compliance Ratings of 1 or 2, 

and Satisfactory or Higher CRA 

No Level 3 Violations, and no UDAP, 

RESPA Section 8, or Discriminatory Violations 

No Repeat Level 2 Violations 

No Civil Money Penalties 

No Restitution of $1,000 or More 

Other Criteria 

Eligibility Criteria Include: 

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FDIC: 

Report Format 

Streamlined 

Report of 

Examination 

Cover 

Brief Compliance Management System (CMS) Description 

Violations Pages (if applicable) 

Transmittal Letter 

2 to 3 Pages 

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Feedback Other Related Project 

Streamlined 

Report of 

Examination 

Banker Feedback 

Strongly encouraged and 

appreciated 

Standard Report of 

Examination 

Reviewing current format to 

ensure most effective 

communication of exam findings 

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