Are there requirements for being a godparent?
The short answer
Canon law requires godparents for infant baptism "insofar as possible," and a godparent must lead a life of faith befitting the role. A couple in an irregular marriage does not qualify; their sponsorship would be illicit, though the baptism would still be valid.
Canon 872 calls for godparents at infant baptism "insofar as possible"; they are not absolutely required for a valid baptism. A godparent must be someone who leads a life of faith in keeping with the role (canon 874 §1).
Your brother and his wife do not qualify because of their irregular marriage. Their serving as godparents would be illicit, that is, contrary to Church law, but the baptism itself would still be valid.