What 12 CFR Part 337 - Unsafe and Unsound Banking Practices (Brokered Deposits, Rate Caps, Insider Credit) requires
12 CFR Part 337 sets out FDIC rules that address unsafe and unsound banking practices for FDIC-supervised institutions. Standby letters of credit must be combined with other guarantees and extensions of credit and counted toward the institution's lending and investment limits and recorded so they are subject to the same scrutiny as loans. Extensions of credit to executive officers, directors and principal shareholders are subject to limits consistent with the insider-lending rules. Under section 29 of the Federal Deposit Insurance Act, only a well-capitalized insured depository institution may accept, renew or roll over brokered deposits without restriction; an adequately capitalized institution may do so only with a waiver granted by the FDIC; and an undercapitalized institution may not accept brokered deposits. An institution that is less than well capitalized is also subject to interest rate restrictions and generally may not pay deposit rates that exceed the national rate cap, defined as the higher of the national rate plus 75 basis points or 120 percent of the comparable Treasury yield plus 75 basis points, or, where applicable, the local market rate cap of 90 percent of the highest rate in the institution's local market area. These restrictions are in addition to other applicable banking-practice requirements, and the FDIC sets the frequency of examinations.
Pillar: Banking & Global Finance · Authority: Federal Deposit Insurance Corporation (FDIC) · Version: 1.0.0 · Last updated:
Primary source: https://www.ecfr.gov/current/title-12/chapter-III/part-337
SHA-256 integrity: 9358e0619377faf9b33b54f732e04fb55c216b303cf0d55134a9beb0b4a74fb3
Primary Citations — 8 traced to source
- 12 CFR Part 337, §337.2 - standby letters of credit
- 12 CFR Part 337, §337.3 - limits on extensions of credit to executive officers, directors and principal shareholders
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