The Evolution of Money: From Stable to Hot

In This Episode

The FDIC recently issued a proposed rule change on how brokered deposits are treated. This isn’t so much a proposed change but a rollback. A roll way back. Way back to 1989 when the original brokered deposit rule was written. As Jason Mikula points out, that’s when Taylor Swift was born. Jason M, Alex Johnson, Kiah Haslett and Alex Barrage of Troutman Pepper have some hot takes with Jason Henrichs on how the business of banking has changed through the eras and the implications for the future. Also, the views expressed are those of the individuals and not their respective employers – the lawyers made us add that.

Read the entire transcript here.

Podcast Content:

Chapter 1: 00:00 – Welcome and Introduction

Brett King and Jason Henricks introduce the episode, featuring a panel discussion on the FDIC’s proposed changes to broker deposit rules.

Chapter 2: 03:20 – Rolling Back to 1989: What’s Changing?

The panel explains the proposed rule changes, comparing them to the original 1989 statute and analyzing their relevance in today’s banking landscape.

Chapter 3: 09:50 – The Problem with Blanket Rules

A debate over whether the FDIC’s rollback is a necessary step or an overreaction, with a focus on the lack of modern data to support the changes.

Chapter 4: 17:35 – Are All Deposits Becoming Hot Money?

Discussing the impact of technology, consumer behavior, and open banking on the stickiness of deposits, making the case for nuanced regulation.

Chapter 5: 27:10 – Self-Brokered Deposits: A New Paradigm

Exploring the idea that modern consumers act as their own deposit brokers, reshaping how banks should approach liquidity and risk.

Chapter 6: 36:45 – Liquidity, Portability, and the Future of Deposits

Analyzing how innovations like FedNow and open banking could transform deposit flows, amplifying risks in ways the proposed rule doesn’t address.

Chapter 7: 46:20 – The Regulatory Disconnect

Panelists highlight how regulators’ legacy frameworks may fail to capture emerging risks, from fintech partnerships to instantaneous deposit movement.

Chapter 8: 55:30 – Unintended Consequences of the Rule

The potential fallout of the rule for fintech partnerships, community banks, and consumer access to innovative banking solutions.

Chapter 9: 01:05:00 – Closing Thoughts and Calls to Action

The episode wraps up with reflections on the importance of public comments and industry collaboration to guide smarter regulatory decisions.

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