BROKERED DEPOSITS.

SEC 224. BROKERED DEPOSITS. (a) In General.—The Federal Deposit Insurance Act is amended by inserting after section 28 (as added by section 222 of this title) the following new section: “SEC. 29. BROKERED DEPOSITS. “(a) In General.—A troubled institution may not accept funds obtained, directly or indirectly, by or through any deposit broker for deposit into 1 or more deposit accounts. “(b) Renewals and rollovers treated as acceptance of funds.—Any renewal of an account in any troubled institution and any rollover of any amount on deposit in any such account shall be treated as an acceptance of funds by such troubled institution for purposes of subsection (a). “(c) Waiver Authority.—The Corporation may, on a case-by-case basis and upon application by an insured depository institution, waive the applicability of subsection (a) upon a finding that the acceptance of such deposits does not constitute an unsafe or unsound practice with respect to such institution. “(d) Limited Exception for Certain Conservatorships.—In the case of any insured depository institution for which the Corporation has been appointed as conservator, subsection (a) shall not apply to 103 STAT. 274the acceptance of deposits (described in such subsection) by such institution if the Corporation determines that the acceptance of such deposits— “(1) is not an unsafe or unsound practice; and “(2) either— “(A) is necessary to enable the institution to meet the demands of its depositors or pay its obligations in the ordinary course of business; or “(B) is consistent with the conservator’s fiduciary duty to minimize the losses of the institution. “(e) Additional Restrictions.—The Corporation may impose, by regulation or order, such additional restrictions on the acceptance of brokered deposits by any troubled institution as the Corporation may determine to be appropriate. “(f) Definitions Relating to Deposit Broker.— “(1) Deposit broker.—The term ‘deposit broker’ means— “(A) any person engaged in the business of placing deposits, or facilitating the placement of deposits, of third parties with insured depository institutions or the business of placing deposits with insured depository institutions for the purpose of selling interests in those deposits to third parties; and “(B) an agent or trustee who establishes a deposit account to facilitate a business arrangement with an insured depository institution to use the proceeds of the account to fund a prearranged loan. “(2) Exclusions.—The term ‘deposit broker’ does not include— “(A) an insured depository institution, with respect to funds placed with that depository institution; “(B) an employee of an insured depository institution, with respect to funds placed with the employing depository institution; “(C) a trust department of an insured depository institution, if the trust in question has not been established for the primary purpose of placing funds with insured depository institutions; “(D) the trustee of a pension or other employee benefit plan, with respect to funds of the plan; “(E) a person acting as a plan administrator or an investment adviser in connection with a pension plan or other employee benefit plan provided that that person is performing managerial functions with respect to the plan; “(F) the trustee of a testamentary account; “(G) the trustee of an irrevocable trust (other than one described in paragraph (1)(B)), as long as the trust in question has not been established for the primary purpose of placing funds with insured depository institutions; “(H) a trustee or custodian of a pension or profitsharing plan qualified under section 401(d) or 403(a) of the Internal Revenue Code of 1986; or “(I) an agent or nominee whose primary purpose is not the placement of funds with depository institutions. “(3) Inclusion of depository institutions engaging in certain activities.—Notwithstanding paragraph (2), the term ‘deposit broker’ includes any insured depository institution, and any employee of any insured depository institution, which en-103 STAT. 275gages, directly or indirectly, in the solicitation of deposits by offering rates of interest (with respect to such deposits) which are significantly higher than the prevailing rates of interest on deposits offered by other insured depository institutions having the same type of charter in such depository institution’s normal market area. “(4) Employee.—For purposes of this subsection, the term ‘employee’ means any employee— “(A) who is employed exclusively by the insured depository institution; “(B) whose compensation is primarily in the form of a salary; “(C) who does not share such employee’s compensation with a deposit broker; and “(D) whose office space or place of business is used exclusively for the benefit of the insured depository institution which employs such individual. “(g) Troubled Institution Defined.—The term ‘troubled institution’ means any insured depository institution which does not meet the minimum capital requirements applicable with respect to such institution.”. (b) Effective Date.—The amendment made by subsection (a) shall apply to deposits accepted after the end of the 120-day period beginning on the date of the enactment of this Act.