12 USC 1831f - Brokered deposits

U.S Code last checked for updates: Jul 25, 2026

§ 1831f.

Brokered deposits

(a)

In general

(b)

Renewals and rollovers treated as acceptance of funds

(c)

Waiver authority

(d)

Limited exception for certain conservatorships

In the case of any insured depository institution for which the Corporation has been appointed as conservator, subsection (a) shall not apply to the acceptance of deposits (described in such subsection) by such institution if the Corporation determines that the acceptance of such deposits—

(1)

is not an unsafe or unsound practice;

(2)

is necessary to enable the institution to meet the demands of its depositors or pay its obligations in the ordinary course of business; and

(3)

is consistent with the conservator’s fiduciary duty to minimize the institution’s losses.

Effective 90 days after the date on which the institution was placed in conservatorship, the institution may not accept such deposits.

(e)

Restriction on interest rate paid

(1)

Definitions

In this subsection—

(A)

the terms “agent institution”, “reciprocal deposits”, and “well capitalized” have the meanings given those terms in subsection (i); and

(B)

the term “covered insured depository institution” means an insured depository institution that—

(i)

under subsection (c) or (d), accepts funds obtained, directly or indirectly, by or through a deposit broker; or

(ii)

while acting as an agent institution under subsection (i), accepts reciprocal deposits while not well capitalized.

(2)

Prohibition

(3)

Limit on interest rates

The limit on the rate of interest referred to in paragraph (2) shall be—

(A)

the rate paid on deposits of similar maturity in the normal market area of the covered insured depository institution for deposits accepted in the normal market area of the covered insured depository institution; or

(B)

the national rate paid on deposits of comparable maturity, as established by the Corporation, for deposits accepted outside the normal market area of the covered insured depository institution.

(f)

Additional restrictions

(g)

Definitions relating to deposit broker

(1)

Deposit broker

The term “deposit broker” means—

(A)

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; and

(B)

an agent or trustee who establishes a deposit account to facilitate a business arrangement with an insured depository institution to use the proceeds of the account to fund a prearranged loan.

(2)

Exclusions

The term “deposit broker” does not include—

(A)

an insured depository institution, with respect to funds placed with that depository institution;

(B)

an employee of an insured depository institution, with respect to funds placed with the employing depository institution;

(C)

a trust department of an insured depository institution, if the trust in question has not been established for the primary purpose of placing funds with insured depository institutions;

(D)

the trustee of a pension or other employee benefit plan, with respect to funds of the plan;

(E)

a person acting as a plan administrator or an investment adviser in connection with a pension plan or other employee benefit plan provided that that person is performing managerial functions with respect to the plan;

(F)

the trustee of a testamentary account;

(G)

the trustee of an irrevocable trust (other than one described in paragraph (1)(B)), as long as the trust in question has not been established for the primary purpose of placing funds with insured depository institutions;

(H)

a trustee or custodian of a pension or profitsharing plan qualified under section 401(d) or 403(a) of title 26; or

(I)

an agent or nominee whose primary purpose is not the placement of funds with depository institutions.

(3)

Inclusion of depository institutions engaging in certain activities

(4)

Employee

For purposes of this subsection, the term “employee” means any employee—

(A)

who is employed exclusively by the insured depository institution;

(B)

whose compensation is primarily in the form of a salary;

(C)

who does not share such employee’s compensation with a deposit broker; and

(D)

whose office space or place of business is used exclusively for the benefit of the insured depository institution which employs such individual.

(h)

Deposit solicitation restricted

An insured depository institution that is undercapitalized, as defined in section 1831o of this title, shall not solicit deposits by offering rates of interest that are significantly higher than the prevailing rates of interest on insured deposits—

(1)

in such institution’s normal market areas; or

(2)

in the market area in which such deposits would otherwise be accepted.

(i)

Limited exception for reciprocal deposits

(1)

In general

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:

(A)

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.

(B)

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.

(C)

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)

Definitions

In this subsection:

(A)

Agent institution

The term “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—

(i)

(I)

when most recently examined under section 1820(d) of this title 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

(II)

is well capitalized;

(ii)

has obtained a waiver pursuant to subsection (c); or

(iii)

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 4 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.

(B)

Covered deposit

The term “covered deposit” means a deposit that—

(i)

is submitted for placement through a deposit placement network by an agent institution; and

(ii)

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.

(C)

Deposit placement network

(D)

Network member bank

(E)

Reciprocal deposits

(F)

Well capitalized

(j)

Limited exception for custodial deposits

(1)

In general

(2)

Definitions

In this subsection:

(A)

Custodial deposit

The term “custodial deposit” means a deposit that is not deposited at an insured depository institution in return for fees paid by the insured depository institution pursuant to an agreement with a third party and that would otherwise be considered to be obtained, directly or indirectly, by or through a deposit broker, if the deposit is deposited at 1 or more insured depository institutions, for the purpose of providing or maintaining deposit insurance for the benefit of a third party, by or through any of the following, each acting in a formal custodial or fiduciary capacity for the benefit of a third party:

(i)

An insured depository institution serving as agent, trustee, or custodian.

(ii)

A trust entity controlled by an insured depository institution serving as agent, trustee, or custodian.

(iii)

A State-chartered trust company serving as agent, trustee, or custodian.

(iv)

A plan administrator or investment advisor, acting in a formal custodial or fiduciary capacity for the benefit of a plan.

(B)

Eligible institution

The term “eligible institution” means an insured depository institution that accepts custodial deposits, if the insured depository institution has less than $10,000,000,000 in total assets as reported on the consolidated report of condition and income as reported quarterly to the appropriate Federal banking agency and—

(i)

(I)

when most recently examined under section 10(d) was assigned a composite rating of 1, 2, or 3 under the Uniform Financial Institutions Rating System (or an equivalent rating under a comparable rating system); and

(II)

is well capitalized; or

(ii)

has obtained a waiver pursuant to subsection (c).

(C)

Plan

(D)

Plan administrator

(E)

Well capitalized

(k)

Restriction on interest rate paid on certain custodial deposits

(1)

Definitions

In this subsection—

(A)

the terms “custodial deposit”, “eligible institution”, and “well capitalized” have the meanings given those terms in subsection (j); and

(B)

the term “covered insured depository institution” means an insured depository institution that while acting as an eligible institution under subsection (j), accepts custodial deposits while not well capitalized.

(2)

Prohibition

(3)

Limit on interest rates

The limit on the rate of interest referred to in paragraph (2) shall be not greater than—

(A)

(B)

the national rate paid on deposits of comparable maturity, as established by the Corporation, for deposits accepted outside the normal market area of the covered insured depository institution.

(Sept. 21, 1950, ch. 967, § 2[29], as added Pub. L. 101–73, title II, § 224(a), Aug. 9, 1989, 103 Stat. 273; amended Pub. L. 102–242, title III, § 301(a), (c), Dec. 19, 1991, 105 Stat. 2343, 2345; Pub. L. 102–550, title XVI, § 1605(a)(1), Oct. 28, 1992, 106 Stat. 4084; Pub. L. 103–325, title III, § 337, Sept. 23, 1994, 108 Stat. 2235; Pub. L. 115–174, title II, § 202, May 24, 2018, 132 Stat. 1307; Pub. L. 119–101, title IX, §§ 901, 902(a), (b), July 11, 2026, 140 Stat. 964–966.)

cite as: 12 USC 1831f