“We have serious concerns with the Federal Deposit Insurance Corporation’s (FDIC) decision to issue its proposed rulemaking on brokered deposits and the amendments found therein.

AFC has consistently drawn issue with the FDIC’s apprehensive view towards innovation. The agency’s lack of engagement has resulted in their misunderstanding and misapplication of the actual risks associated with fintech companies and their bank partners engaging in deposit-responsible relationships. To that end, we are concerned that this latest proposed rulemaking is yet another indication of an intentional effort to stifle innovation within the financial services ecosystem. The agency’s rationale to justify the changes put forth in the proposed rulemaking represents limited and idiosyncratic examples of innovation gone awry and is not representative of the broader bank-fintech market nor proportionate to the significant changes proposed in the new rule.

Markets function best with settled expectations. However, less than five years after the FDIC finalized its existing brokered deposits rule—which provided important clarity to banks and their fintech partners—as well as, to the overarching brokered deposits waiver application process, the agency is seeking two amendments to the detriment of both consumers and the financial services industry. They are unnecessarily increasing regulatory burdens and reconstituting a subjective and confusing agency process for determining which arrangements are covered under the rule.

In the years since the finalization of the 2020 brokered deposits rule, innovative banks and their fintech partners have developed a wide array of services to help historically underserved communities and improve competition in the broader financial services industry. To undo the prudent reforms made in the final rule without strong evidence, will undermine the viability of the improved service offerings provided through responsible bank-fintech partnerships.

AFC remains committed to working with the FDIC to ensure that any rulemaking on brokered deposits continues to maintain the resilience of the banking system while also ensuring that historically-underserved consumers continue to be served."