depositoffer (BETA-LIVE)

The text below is repeated on my google drive here you can comment as well.

https://docs.google.com/document/d/1yWXetja-k0nW121p0aHAr9s9OwEeXMRoQ-goad38Oac/edit?usp=sharing

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To understand the issues, you need to read the above first.

https://www.fdic.gov/news/news/financial/2015/fil15002a.pdf

The FDIC has made forbidden what is known as “brokered services” (see above ) for undercapitalized banks . It makes brokering of deposits difficult even for well capitalized banks. There are many ways to get around this for example the reciprocal brokered deposits where banks placed deposits with their own network up to the insured amount etc.

There is also an exemption for Listing services ie where website only provides “rates”. This can be found under the above FAQ at page 5. I have cut and paste below in RED. I will also attempt to answer each of the criteria below against what I am building here in depositoffer.

"The FDIC does not treat the listing service as a deposit broker if the company satisfies each of the following requirements:

(A) The person or entity providing the listing service is compensated solely by means of subscription fees (i.e., the fees paid by subscribers as payment for their opportunity to see the rates gathered by the listing service) and/or listing fees (i.e., the fees paid by depository institutions as payment for their opportunity to list or “post” their rates). The listing service does not require a depository institution to pay for other services offered by the listing service or its affiliates as a condition precedent to being listed. "

REPLY: Depositoffer asks for listing fees from depositors and/or banks. In our scenario, we ask the depositor to provide their minimum deposit rates and the banks may if they so wish post a bid rate against that minimum deposit rate. This way we have real competition and better rates for the depositors.

"(B) The fees paid by depository institutions are flat fees, not calculated on the basis of the number or dollar amount of deposits accepted by the depository institution as a result of the listing or posting of the depository institution’s rates. "

REPLY: The bid fees to post a rate is a flat fee. This is a bid and in our depositoffer is the depositor that decides.

"(C) In exchange for these fees, the listing service performs no services except: (1) the gathering and transmission of information concerning the availability of deposits; and/or (2) the transmission of messages between depositors and depository institutions
including purchase orders and trade confirmations. In publishing or displaying information about depository institutions, the listing service must not attempt to steer funds toward particular institutions, except that the listing service may rank institutions
according to interest rates and also may exclude institutions that do not pay the listing fee. Similarly, in any communications with depositors or potential depositors, the listing service must not attempt to steer funds toward particular institutions."

REPLY: Depositoffer has no role in the deposit auction other than to facilitate a platform, the depositor will select the “best” bid and follow through the instructions given to complete the deposits with the selected bank directly.

"(D) The listing service is not involved in the physical placement of deposits. Any funds to be invested in deposit accounts are remitted directly by the depositor to the insured depository institution and not, directly or indirectly, by or through the listing service."

REPLY: Depositoffer is not involved with the physical placement of deposits