Q: What factors does the FDIC consider when assessing an application for a waiver?
A: Applications for waivers from brokered deposit restrictions are not automatically granted and are evaluated on a case-by-case basis. Further, brokered deposit waiver applications are usually not eligible for expedited processing. Waiver applications are evaluated for traditional safety-and-soundness concerns based on an institution’s capital position, asset quality, liquidity, and earnings performance. Applications also should include the institution’s plan for reducing its dependence on brokered deposits. The FDIC also considers the opinion of the institution’s primary federal regulator and its Bank Secrecy Act/Anti-Money Laundering compliance. Other important factors considered include management’s capability to manage the potential volatility of the brokered deposits, contingency funding plans (such as alternate funding sources under lines of credit with correspondent banks or government agencies), and the liquidity monitoring program. The FDIC also will assess the institution’s current business plan, including any plans relating to expansion or growth, and management’s strategy to return the institution to a sound financial condition, if applicable.