Bill Overview
Title: Brokered Deposit Affiliate-Subsidiary Modernization Act of 2022
Description: This bill excludes affiliates and subsidiaries of an insured depository institution from certain limitations applicable to brokered deposits. (Brokered deposits are a type of deposit accepted by an institution from a third-party deposit broker for investment purposes. Institutions that accept brokered deposits are subject to additional regulatory requirements, including those related to liquidity.) The bill also expands the definition of an employee of an insured depository institution, thereby exempting these individuals from treatment as a deposit broker. Specifically, the bill includes as an employee (1) an individual who receives compensation in any form from an insured depository institution or from an affiliate or subsidiary, and (2) a registered representative of a broker or dealer that is an affiliate or subsidiary of an insured depository institution.
Sponsors: Sen. Moran, Jerry [R-KS]
Target Audience
Population: People involved with insured depository institutions globally
Estimated Size: 1200000
- The bill affects insured depository institutions, which are banks or other financial institutions that provide deposit accounts that are covered by insurance from the FDIC or similar entities.
- Individuals who are employees of these institutions, affiliates, or subsidiaries will be affected because their classification in relation to brokered deposits is altered.
- Individuals involved in the creation or management of brokered deposits will be impacted as the bill modifies regulatory conditions.
- The clientele or customers of these depository institutions might experience indirect effects due to changes in how brokered deposits are handled.
Reasoning
- The primary individuals affected by this policy will be employees within the financial sector, especially those involved in institutions that use brokered deposits or those directly handling such transactions.
- Not all employees at these institutions will experience a change. For those who do, the effect could vary based on their connection to brokered deposits and the impact of regulatory changes on their job roles.
- Customers of these institutions may see indirect effects reflected in the services they receive, possibly influencing their perception of service quality.
- Implementation cost must consider training for compliance with new regulatory interpretations or changes in administrative processes.
- Given the large financial sector in the U.S., the policy's direct impact may be limited in absolute terms but significant to the targeted workers and sectors.
Simulated Interviews
Bank Executive (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- I think the policy will streamline operations and alleviate some regulatory burdens related to brokered deposits.
- There's potential for improved efficiency in deposit handling which could allow us to offer better rates to customers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Financial Analyst (Charlotte, NC)
Age: 32 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 5/20
Statement of Opinion:
- This policy could reduce some of the paperwork and compliance checks related to brokered deposits.
- It might simplify my work, but I worry about the broader risks if regulatory oversight diminishes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Bank Teller Supervisor (San Francisco, CA)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 14/20
Statement of Opinion:
- I'm not directly involved with brokered deposits, so I doubt I'll see much change from this policy.
- However, the bank might shift some strategies, potentially affecting the products we offer customers.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 4 |
Software Developer (Seattle, WA)
Age: 28 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- This policy will likely increase the demand for our compliance software solutions as banks adapt to the new definitions.
- It could potentially boost our sales and growth as institutions look for efficient compliance solutions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Small Business Owner (Chicago, IL)
Age: 42 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- I'm not sure how this policy will affect me directly. It might change the lending practices or the rates banks offer at some point.
- As long as it doesn't make borrowing tougher, I'm indifferent.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 6 | 6 |
Loan Officer (Dallas, TX)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 12/20
Statement of Opinion:
- I believe this policy could simplify the process around checking funds availability for loans as deposit strategies might change.
- Ultimately, it depends on how our bank decides to implement it.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Retiree (Miami, FL)
Age: 55 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 20/20
Statement of Opinion:
- I doubt this new policy will have much of an impact on my life as a retiree.
- My main concern is whether such policies make the banking system more or less stable in the long run.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 6 | 6 |
| Year 20 | 5 | 5 |
Regulatory Compliance Officer (Houston, TX)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 2/20
Statement of Opinion:
- This policy will require me to update our compliance protocols and educate our staff about the new definitions.
- It might reduce some oversight in certain areas but will add workloads in initial implementation phases.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 6 |
| Year 20 | 6 | 5 |
Customer Service Representative (Boston, MA)
Age: 34 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 1.0 years
Commonness: 10/20
Statement of Opinion:
- I won't be directly affected, but changes in deposit handling could impact what information I need to convey to customers.
- This policy might lead to more complex inquiries initially, as customers adjust to new processes.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Investment Banker (Los Angeles, CA)
Age: 37 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 6/20
Statement of Opinion:
- This policy has the potential to change how certain deposit products are structured, affecting strategies I propose to clients.
- It could create more opportunities for innovative deposit products and strategies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 6 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $8000000)
Year 2: $3000000 (Low: $2000000, High: $6000000)
Year 3: $2000000 (Low: $1500000, High: $4000000)
Year 5: $1000000 (Low: $500000, High: $3000000)
Year 10: $500000 (Low: $100000, High: $2000000)
Year 100: $100000 (Low: $50000, High: $1000000)
Key Considerations
- Administrative and compliance costs could vary widely depending on existing infrastructure and adaptability of institutions.
- The broader systemic impact on the financial sector will depend on how many institutions choose to leverage newfound regulatory flexibility.
- Potential legal ramifications due to changes in the treatment of brokered deposits may influence financial institutions' strategic decisions.