ABA Statement on FDIC Proposals on Resolutions and Long-Term Debt

“The new rules proposed by the FDIC expanding resolution planning rules for banks with as little as $50 billion in assets and imposing long-term debt requirements for banks with assets of $100 billion or more are another step in the wrong direction. Today’s FDIC actions, in most cases over dissenting votes, come on top of last month’s misguided capital proposal and run counter to the bipartisan law Congress passed requiring that regulations be tailored based on a bank’s risk and business model.  We will advocate strongly to ensure that regulators understand the harm that these overly broad rules would impose on customers, communities and the banks that serve them.

“While we are concerned with the proposed expansion of resolution planning and long-term debt requirements, we believe that the FDIC’s potential reforms to the process of selling certain failed banks could be a positive development. By allowing a wider range of bidders — as long as they meet the same requirements that apply to any other parties seeking control of a bank or acquisition of deposits, or the requirements to purchase assets — these changes could potentially result in more price competition without diluting the appropriate safeguards on who can own a bank.”