Quiero saber acerca de...

Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Rules and Regulations determination from the FDIC and, if approved, calculate the prevailing rate within local markets. Instead, a less than well capitalized institution would need to notify its appropriate FDIC
regional office that it intends to offer a rate that is above the national rate cap and provide evidence that an insured depository institution or credit union in the local market area is offering a rate in its local market area in excess of the national rate cap for a comparable deposit product. As described above, the institution would then be allowed to offer 90 percent of the rate offered by the insured depository institution or credit union in the institutions local market area. The institution would be expected to calculate the local rate cap periodically, and, upon the FDICs request, provide the documentation to the appropriate FDIC regional office and to examination staff during subsequent examinations.

jbell on DSKJLSW7X2PROD with RULES2

F. Discussion of Comments In response to the Interest Rate NPR, the FDIC received a total of 43
comments. Three of the comments were from national associations representing stakeholders in the banking industry;
three were from state-level associations representing stakeholders in the banking industry in those states; one comment was from another trade association; one was from a state banking department, one comment was from a law firm on behalf of a bank, and 30 comments were from bankers or banks, including 12
similar emails from bankers. The details of these comments are discussed below.
1. Discussion of Public Comment on the National Rate Several commenters raised concerns about the proposed methodology for calculating the national rate. For example, a national trade association for the banking industry and several bankers raised concerns regarding the use of a weighted approach. Some commenters wrote that they believed that the proposed methodology continued to give undue weight to the largest institutions with a traditional branch based model. One commenter indicated that it remained concerned about the continued use of weighting, whether it be by branch, market share, or size because they believe that weighting tends to misrepresent actual market share. Several commenters urged the FDIC to include rates paid by credit unions and internet banks, stating that including those rates would make for a more accurate national rate calculation.
The commenters suggested that such rates are often higher and thus not including them would cause the
VerDate Sep<11>2014

20:25 Jan 21, 2021

Jkt 253001

national rate and, ultimately, the national rate cap to be too low, making it harder for banks, particularly community banks, to compete for or attract deposits.
A trade association recommended that credit union rates be included as part of the national rate calculation because credit unions compete on both a national and local scale with insured depository institutions.
2. Discussion of Public Comment on the National Rate Cap Most commenters agreed that the current interest rate cap methodology needed to be revised and no commenter recommended that the current methodology remain unchanged.
Several commenters raised general concerns about data quality and transparency, in particular with respect to the 95th percentile. One commenter questioned the quality of the underlying data used to calculate the rate. One commenter wrote that the data that is currently being collected and used by the FDIC to calculate the rate cap is not always an accurate representation of actual rates that many banks are willing to pay and are actively paying and that while the 95th percentile would be an improvement over the current methodology, it still does not produce a rate cap high enough to exceed prevailing rates in some economic cycles. Several argued that the national rate is not robust enough and should be based on publicly available, transparent data. One commenter stated that it is important to have a transparent and market-based national rate. Another argued that the 95th percentile would not be effective because it is not an accurate representation of actual rates that many banks are willing to pay and actively paying, and that if the FDIC
used the 95th percentile it should add 75 basis points to that rate. One commenter stated that the 95th percentile still gives large banks too much influence over the calculation of the rate.
Several commenters recommended additional changes and requested that the proposed methodology be revised in the final rule. A trade association representing banks recommended that the FDIC adopt a rate cap that is the higher of the rate cap using the methodology in place between 1992 and 2009 the Treasuries-based rate cap, and the rate cap using the methodology currently in place but modified so that it is 100 basis points above the average instead of 75 basis points and so that the average is calculated assigning each bank the same weight, with the additional change to include credit
PO 00000

Frm 00027

Fmt 4701

Sfmt 4700

6767

unions. Another trade association representing banks recommended that the FDIC set the national rate cap using a formula that it submitted, and implicit in that formula was the higher of the pre-2009 Treasuries-based rate and the current rate, with modifications.
A trade association recommended that the FDIC adopt a national rate cap of the higher of the current rate cap or the Treasuries-based rate cap in place from 1992 to 2009. A State banking commissioner recommended that the FDIC set the national rate cap at the higher of the following 4 measures: 1
The proposed national rate cap methodology; 2 the 19922009
methodology, i.e., 120 percent or 130
percent of the comparable U.S. Treasury plus 75 basis points; 3 the average of the top 25 rates offered in the nation;
and 4 the highest rate offered by a local institution for a particular deposit product. For renewals of time deposits, the State banking commissioner recommended that a bank be permitted to pay the rate currently paid to the customer for the same or lesser amount and for the same or lesser term.
Commenters generally recommended that the national rate cap be more transparent by basing it on publicly available market data such as Treasury and federal funds rates.
A banker recommended that the FDIC
make a list of the highest rates offered to consumers for comparable products, select a certain number of the highest rates, e.g., 25 and average those 25
highest rates. To accommodate the statutory language, the banker suggested that the average be the national rate and the FDIC allow 110 percent of that average as the level that does not significantly exceed the national rate.
For nonmaturity deposits, one commenter suggested that the national rate cap be based on the federal funds rate, 1-month Treasuries rate, FHLB
overnight funds rate, or rates offered by listing services. Another banker suggested using the 3-month Treasuries rate or the federal funds rate, plus 75
basis points. Still another commenter suggested that nonmaturity products should use either the pre-2009
methodology or the rates on 1-year Treasuries.
3. Discussion of Public Comment on Local Rate Cap The FDIC received several comments regarding the local rate cap proposal.
One national trade association representing banks, as well as a state trade association, recommended that the FDIC use 125 percent, instead of the proposed 90 percent, of a competing interest rate as the upper limit, which it
E:FRFM22JAR2.SGM

22JAR2