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FDIC Board of Directors Withdraws Four Proposed Rules
The Federal Deposit Insurance Corporation’s (FDIC) Board of Directors has approved the withdrawal of four outstanding proposed rules, sparking controversy and concerns over the potential impact on the financial industry.
The proposed rules, which were published in the Federal Register between August and October 2023 and 2024, aimed to regulate brokered deposits, corporate governance, and the Change in Bank Control Act (CBCA). The FDIC is also withdrawing authority for staff to publish a proposed rule related to incentive-based compensation arrangements.
The brokered deposits proposal, published on August 23, 2024, would have significantly disrupted many aspects of the deposit landscape. The corporate governance proposal, published on October 11, 2023, would have created a number of overly prescriptive and process-oriented expectations for management and boards of directors of FDIC-supervised institutions with $10 billion or more in total consolidated assets.
The proposal related to the CBCA, published on August 19, 2024, would have removed an exemption from the requirement to submit a notice to the FDIC for an acquisition of voting securities of a depository institution holding company for which the Federal Reserve reviews a CBCA notice. The proposal related to incentive-based compensation arrangements was approved by the FDIC Board on May 3, 2024, but was never published in the Federal Register.
FDIC officials stated that the withdrawal of these proposed rules is a result of concerns over the potential disruption to the financial industry. If the FDIC pursues regulatory action on these matters in the future, it will do so by publishing new proposals or other issuances consistent with the Administrative Procedure Act.
The withdrawal of these proposed rules comes as a surprise to many in the financial industry, who had been following the developments closely. The move is seen as a significant shift in the FDIC’s regulatory approach, and its implications will be closely watched in the coming months.
As the FDIC continues to navigate the complex and ever-changing landscape of financial regulation, one thing is clear: the agency’s priorities and approaches will continue to be closely scrutinized by industry stakeholders, policymakers, and the public.
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