Alerts

FDIC Augments OCC Action to Expand Pool of Troubled Financial Institution Buyers

November 26, 2008

Following up on the Office of the Comptroller of the Currency’s creation of a new national bank “shelf charter” method to expand pool of troubled financial buyers, the Federal Deposit Insurance Corporation has taken its own steps to expand the pool of potential buyers able to participate in FDIC-run auctions for troubled financial institutions. The FDIC has established a modified bidder qualification process, thereby qualifying potential non-depository institution investors to bid on failing institutions. However, this streamlined approval process will only benefit institutions that have obtained conditional approval for a bank or thrift charter from the responsible agency, such as the shelf charter from the OCC. Under the new process, the FDIC will accept abbreviated information submissions and applications, and may issue conditional approval for Deposit Insurance, in order to quickly secure qualified and interested buyers. When considering abbreviated applications, the FDIC will focus on “a business plan compliant with the Community Reinvestment Act, readily available capital, and an identified management team subject to financial and biographical review.”