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CBAI Urges Further Revisions to the FDIC’s Deposit Rate Caps

In a comment letter dated November 4, 2019, CBAI thanked the FDIC for proposed rulemaking to “amend its methodology for calculating the national rate cap[s]” applicable to institutions that are less than well-capitalized. CBAI further stated its appreciation for the Agency’s recognition that inappropriately setting the Deposit Rate Caps could “prohibit less than well capitalized banks from competing for deposits and create a liquidity strain.”

CBAI is again urging the FDIC to count each financial institution only once (regardless of the number of branch locations or market share); and include credit unions deposit rates, as well as specials, promotional and negotiated rates, and also internet-only rates in calculating the National Rates for Rate Cap purposes. Not including these inputs in the calculation presents an incomplete picture of the competitive reality faced by community banks in obtaining and retaining deposits. CBAI also recommended additional time be granted for the Rate Caps to take effect and for the FDIC to have the flexibility to further delay the effective date of the Caps to avoid creating a liquidity strain where none would have existed if a more reasonable amount of time was allowed to comply with the Caps.

Read CBAI Comment Letter.