The FDIC proposal amending the interest rate restrictions for insured depository institutions ("IDIs") that are less than "well capitalized" (i.e., any IDIs that do not significantly exceed the required minimum for capital ratios) was published in the Federal Register. Comments must be submitted by November 4, 2019.

As previously covered, the proposal is designed to (i) make the national rate cap "more balanced, reflective and dynamic" and (ii) allow less than well capitalized institutions to offer a maximum of 90 percent of the highest rate paid on a deposit product within an institution's local market areas. Specifically, the proposal would:

  • measure the national rate by the weighted average of rates paid by all IDIs on a particular deposit product; and
  • set the national rate cap for specific products at the higher of either (i) the 95th percentile of rates paid by IDIs weighted by each institution's share of total domestic deposits or (ii) the proposed national rate plus 75 basis points.

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