[Federal Register Volume 66, Number 64 (Tuesday, April 3, 2001)]
[Rules and Regulations]
[Pages 17621-17622]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8100]



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 Rules and Regulations
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  Federal Register / Vol. 66, No. 64 / Tuesday, April 3, 2001 / Rules 
and Regulations  

[[Page 17621]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 337

RIN 3064-AC48


Rescission of Deposit Broker Notification, Recordkeeping and 
Reporting Requirements

AGENCY: Federal Deposit Insurance Corporation (``FDIC'').

ACTION: Final rule.

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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Efficiency Act of 2000, Congress repealed section 29A of the Federal 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to implement the now-repealed section 29A of the FDI Act.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SUPPLEMENTARY INFORMATION: Congress repealed section 29A of the FDI Act 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

    1. 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.

[[Page 17622]]

Sec. 337.6  [Amended]

    2. 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. 01-8100 Filed 4-2-01; 8:45 am]
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