Category — FDIC

In an effort to provide guidance to private investors interested in acquiring or investing in failed depository institutions in receivership, on July 1, 2009, the Federal Deposit Insurance Corporation (FDIC) proposed eligibility standards for investors who are not already owners of a bank or thrift holding company.  As defined in the FDIC’s proposed policy statement, “Investors” means (a) private capital investors in a company (other than a bank or thrift holding company existing or acquired at least three years prior to the effective date of the proposed policy) that proposes to directly or indirectly assume deposit liabilities and/or assets from a failed insured depository institution in receivership, and (b) in the case of de novo charters issued in connection with the resolution of failed insured depository institutions, applicants for insurance.

Click here to read the full alert.

In an effort to determine the level of investor interest in the Legacy Loans Program (LLP), Federal Deposit Insurance Corporation (FDIC) is asking investors to respond to an online survey published on FDIC’s Web site. Access to the survey may be obtained here. FDIC has indicated that responses to the survey will remain confidential.

FDIC intends to begin contacting interested investors to determine their eligibility to participate in the LLP as soon as a definitive structure for the program has been announced. Although investor eligibility requirements have not yet been determined, FDIC has stated that investors must demonstrate their ability to manage purchased assets with an eye to maximizing their value and minimizing risk to FDIC, as the guarantor of debt used to purchase the assets, and the U.S. Treasury, as an equity participant in the purchasing public-private investment fund (PPIF).

Click here for the text of the full alert.

Earlier this week, the U.S. Treasury Department and the Federal Reserve Bank jointly announced a Public-Private Investment Program (Program). Pursuant to the Program, Treasury will co-invest in whole loans sold at auction by banks insured by the Federal Deposit Insurance Corporation (FDIC), and the FDIC will facilitate purchase money financing through a loan guarantee program. The Program is described in greater detail here.

Yesterday, the FDIC held a conference call for bankers to provide an overview of the Program and to respond to initial questions and comments about the Program. FDIC Chairman Sheila Bair emphasized the FDIC’s desire for transparency in implementing the Program. She encouraged the public to submit comments during the next two weeks in response to questions posted by the FDIC on its Web site in order to get the Program up and running as soon as possible.

Read the full alert here.