WASHINGTON, D.C. -- The Conference of State Bank Supervisors (CSBS) has asked the FDIC to further review its proposed rule on interest rate restrictions for institutions that are ?less than well-capitalized? to provide more time to unwind their holdings of brokered deposits. In a comment letter issued today, CSBS President and CEO Neil Milner restated a suggestion made in an earlier letter to FDIC Chairman Sheila Bair that institutions falling below well-capitalized be allowed time to reduce their dependence on brokered deposits. ?Absent a waiver from the FDIC, institutions are required to stop accepting or renewing brokered deposits,? Milner said. ?We are concerned that this provision is unnecessarily creating liquidity events,? he added. CSBS suggested banks be given 12 months to unwind the positions, reducing the balances each month by 1/12 of the amount as of the determination date. ?This will allow the bank to reduce its dependence on brokered deposits over time, while helping to ensure adequate liquidity is maintained as the bank works to enhance capital and reduce its risk profile,? Milner said. Milner said CSBS supports the proposal for providing depository institutions and examiners with a clear method for calculating applicable interest rate caps and suggested the FDIC post on its website those markets that qualify as a higher-rate market to provide institutions with a useful resource in determining the appropriate interest rate. ?However, we encourage the FDIC to consider the impact non-depository market participants are having upon the prevailing rates in an institution?s normal market area,? Milner said. The letter can be viewed here. # # # The Conference of State Bank Supervisors is the nationwide organization for state banking, representing the bank regulators of the 50 states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands, and approximately 6,200 state-chartered financial institutions. The Conference is responsible for defending state authority to determine banking structure and the products and services state-chartered institutions can offer and for improving the quality of state bank supervision by providing department performance evaluation and accreditation programs and supervisory education/training programs for state banking department personnel. CSBS Information Contact: Mary White, firstname.lastname@example.org, (202) 728-5715.