What is a brokered deposit and who is a deposit broker?
The term “brokered deposit” means any deposit that is obtained from or through the mediation or assistance of a deposit broker. The term “deposit broker” refers to any person engaged in the business of placing deposits or facilitating the placement of deposits with insured depository institutions for a third party. To see the FDIC’s definitions of “brokered deposit” and “deposit broker”, view C.F.R. 337.6 at the FDIC’s web site. Practically speaking, there are three kinds of deposits that may apply: • direct certificates of deposit from investors, which may or may not be brokered deposits; • certificates of deposit where a third party, such as Primary Financial, acts as an administrator, custodian, agent or trustee, which are generally considered brokered deposits; and • DTC-eligible brokered deposits.
