FDIC: Frequently Asked Questions on Identifying, Accepting and Reporting Brokered Deposits

Financial Institution Letter


The FDIC is finalizing updates to its Frequently Asked Questions (FAQs) regarding identifying, accepting and reporting brokered deposits. In November 2015, the FDIC released for comment proposed updates to the FAQs that were originally issued in January 2015. After consideration of the comments received, the FDIC retained a majority of the proposed updates, with certain clarifications and new FAQs. This Financial Institution Letter supersedes FIL-2-2015 and FIL-51-2015.

Statement of Applicability to Institutions with Total Assets Under $1 Billion: This Financial Institution Letter applies to all FDIC-insured financial institutions that use brokered deposits.


  • Section 29 of the Federal Deposit Insurance Act (12 U.S.C. §1831f) and Section 337.6 of the FDIC’s rules and regulations (12 C.F.R. § 337.6) define the term “deposit broker” and restrict the acceptance of brokered deposits by FDIC-insured depository institutions (IDIs) that are not well capitalized for Prompt Corrective Action (PCA) purposes.
  • The FAQs are based on the statute, regulation and explanations of the requirements for identifying and accepting brokered deposits provided to the industry through published advisory opinions and the FDIC’s Study on Core Deposits and Brokered Deposits issued in July 2011, as well as on comments received since publication of the FAQs. The FAQs provide plain language information about categorizing brokered deposits.
  • The FDIC will continue to consider each request on a brokered deposits determination on a case-by-case basis and will issue additional advisory opinions as appropriate. The FAQs will be updated periodically on the FDIC’s website at https://www.fdic.gov/news/news/financial/.
  • Key updates since the FAQs were issued in January 2015 address matters related to:
    • Business professionals and deposit referral programs;
    • Deposits gathered though “dual hatted,” “dual” and “call center” employees (as explained in the FAQs), or contractors;
    • Deposits underlying government-sponsored prepaid or debit card programs;
    • Whether certain nonmaturity deposits are brokered; and
    • Actions an IDI should take if it holds certain brokered deposits and falls below well capitalized for PCA purposes.

Suggested Distribution:

  • FDIC-Insured Depository Institutions

Suggested Routing:

  • Chief Executive Officer
  • Chief Financial Officer
  • Chief Legal Officer

Related Topics:



  • Martin Thompson, Senior Examination Specialist (202-898-6767); Rebecca Berryman, Senior Capital Markets Specialist (202-898-6901); and Vivek Khare, Senior Attorney (202-898-6847)


FDIC Financial Institution Letters (FILs) may be accessed from the FDIC’s Web site at https://www.fdic.gov/news/news/financial/2016/.

To receive FILs electronically, please visit https://www.fdic.gov/about/subscriptions/fil.html.

Paper copies may be obtained through the FDIC’s Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200).

Visa Lawsuit Alleges Walmart Plan to Eliminate Signature Verification

Turnabout is fair play in business, and it often occurs in the legal system. Visa Inc. has filed a lawsuit against Walmart this week in a dispute over customers’ use of signatures or PINs to verify purchases with EMV-equipped debit cards at Walmart. Last month, Walmart sued Visa, claiming the payments network required the retailer to offer EMV debit users the option of signature or PIN verification for purchases with EMV-equipped debit cards.

In Walmart’s lawsuit, it claims “Visa believes that Walmart should be required to use … signature verification for certain debit card transactions, which in the case of a Visa-branded debit card would route debit card transaction across Visa’s debit network rather than competitor networks of Walmart’s choosing.”

Visa denies the allegation in its lawsuit and adds that the contract between the two companies doesn’t give Walmart the right to require PIN entry for purchases with Visa debit cards. “Many Visa cardholders do not want to enter, or cannot remember, their PIN and the contract preserves’ cardholders’ freedom to provide a signature instead,” according to the lawsuit filed yesterday in New York State Supreme Court.

Visa alleges another breach of contract, claiming that “Walmart had already hatched a plan to eliminate the signature option at its physical locations after the effective date” of the contract, yet Walmart “falsely promised” not to change how it accepted Visa debit cards. Contract negotiations began in 2013, and the contract was signed November 2015, with an effective date of Jan. 1, 2016. Visa’s suit claims that Walmart secretly began testing the elimination of the signature option at terminals in several of its stores shortly after the contract was signed, and the testing continued beyond the contract’s effective date.

Earlier this week, grocery market chain Kroger filed a lawsuit against Visa, also related to Visa’s requirement that merchants give customers the option of verifying EMV debit purchases via signature.

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Image Credits: Pierre Desrosiers/Shutterstock

Blackboard Nabs Higher One Payment Platform for $260 Million

Higher education payments technology provider Higher One Inc. has entered into a definitive agreement to be acquired by an affiliate of education technology company Blackboard for $260 million, or $5.15 per share. The all-cash deal has been approved by Higher One’s board and is expected to close in the third quarter of this year, subject to antitrust clearance and other customary closing conditions. The sale will give Blackboard control of Higher One’s CASHNet platform, which provides billing and payments services to more than 700 campuses and millions of students across the U.S. CASHNet will be integrated into Blackboard’s Transact line of payment solutions, the companies said.

Higher One previously sold its Campus Labs data analytics division to an affiliate of Leeds Equity Partners in a $91 million deal in October 2015. Two months later, the company sold its financial aid refund disbursement platform to one of its bank partners, Customers Bank, for $37 million, following an FDIC fine and restitution order over allegations it violated the Federal Trade Commission Act in its marketing materials. As part of the agreement with the FDIC, Higher One neither admitted nor denied any wrongdoing.

The acquisition of Higher One is Blackboard’s latest play in the education payments space. Earlier this month, the company acquired Sequoia Retail Systems Inc., a provider of POS, retail bookstore and inventory management services for educational institutions. In 2015, the company partnered with My Payment Network to integrate the latter company’s SchoolPay payment system into Blackboard’s ParentLink app. In 2013, Blackboard won a Pay Award in the Best Consumer Value category for its BlackboardPay platform, a Discover-branded prepaid account that can be integrated with a student ID card to facilitate disbursement of financial aid balances and student payroll.

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Image Credits: Shutterstock/Tyler Olson

Reports: EU-U.S. Privacy Shield Heads Toward Approval

The EU-U.S. Privacy Shield agreement finally could win European approval as early as July, according to reports, providing some long-awaited certainty to financial service providers and tech companies like Google and Facebook that handle consumers’ personal information.

The proposed data-transfer pact between the U.S. and European Union would replace the Safe Harbor agreement, which was struck down by a European court last year. Safe Harbor enabled U.S. companies to handle and store the personal data of users in the EU without being subject to the EU’s often strict privacy rules.

According to the New York Times, European officials are “satisfied” that data “would not be unfairly used or retrieved by American intelligence agencies.” A vote on the pact could happen Monday but even if approval is won then, a final deal is not expected until July 11, when U.S. Commerce Secretary Penny Pritzker is scheduled to visit E.U. capital city Brussels.

Approval would come over the recent objections of European privacy advocates.

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On the Wire: First Data, SVB Expand Partnership; GB Group to Acquire IDscan Biometrics; More

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Image Credits: Shutterstock/Gang Liu