On June 4, the FDIC adopted a final rule which establishes the criteria for determining if a company is engaged in “activities that are financial in natural or incidental thereto” for purposes of being subject to the orderly liquidation authority under the Title II of the Dodd-Frank Act. FDIC Memo. FDIC Final Rule.
orderly liquidation authority
FDIC Report on Lehman Orderly Resolution
On April 18, the FDIC released a report examining how it could have structured an orderly resolution of Lehman Brothers Holdings Inc. using the orderly liquidation authority under Title II of the Dodd-Frank Act. FDIC Release.
FDIC Proposed Rule for Orderly Liquidation Authority
On March 15, the FDIC approved a Notice of Proposed Rulemaking to clarify application of the orderly liquidation authority mandated by the Dodd-Frank Act. The NPR: (i) builds on the interim rule of January 18, which clarified certain issues under the OLA; (ii) establishes a framework for the priority payment of creditors and for the procedures for filing a claim with a receiver and, if dissatisfied, pursuing a claim in court; (iii) clarifies how compensation will be recouped from senior executives and directors who are substantially responsible for the failure of the firm; and (iv) clarifies the meaning of “financial company”. Comments must be submitted within 60 days after publication in the Federal Register. FDIC Release. FDIC Proposed Rule.
FDIC to Discuss Orderly Liquidation Authority
On March 15, the FDIC will hold an open meeting to discuss the notice of proposed rulemaking regarding priorities and claims process under the Orderly Liquidation Authority provisions of the Dodd-Frank Act. Webcast.
Fitch Report on FDIC Safe Harbor and Orderly Liquidation Authority
On February 28, Fitch addressed questions that have arisen related to the orderly liquidation authority under the Dodd-Frank Act and the securitization safe harbor. Fitch stated that clarifications from the FDIC provide comfort that the rights of investors can be determined at the outset of a securitization and that the ratings assigned to the transaction can be de-linked from those of the sponsoring entity. Fitch Release. Fitch Report.
FDIC Interim Final Rule on Orderly Liquidation Authority
On January 18, the FDIC approved an interim final rule clarifying how it will treat certain creditor claims under the new orderly liquidation authority established under the Dodd-Frank Act. This interim final rule differs from the related Notice of Proposed Rulemaking by clarifying the standard for collateral valuations and the treatment of contingent claims. FDIC Release. FDIC Rule.