Matthew Bornfreund, a partner in Troutman Pepper’s Corporate Practice Group, was quoted in the August 21, 2024 S&P Global Market Intelligence article, “FDIC’s Brokered Deposit Proposal Expected to Face Industry Pushback.”

Currently, deposit accounts enabling payment transactions are automatically non-brokered, but the new rule will eliminate this designation, meaning parties relying on the “enabling transactions” exception will have to go through an application process, said Matthew Bornfreund, a partner at Troutman Pepper.

“It is hugely burdensome, and there’s also a question of whether or not the FDIC has the capacity to handle the volume of applications that are going to come in with all the companies that are currently relying on that exception,” Bornfreund said.

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Brokered deposits have not been a distinct partisan matter, but the idea of modernizing the treatment of brokered deposits was generally seen by the Democrats as a loosening of regulations, so they tended to be more skeptical of the 2020 rule, Bornfreund said.