Insolvency Issues and the FDIC.

Intro -- INSOLVENCY ISSUES AND THE FDIC -- INSOLVENCY ISSUES AND THE FDIC -- CONTENTS -- PREFACE -- Chapter 1 A YEAR IN BANK SUPERVISION: 2008 AND A FEW OF ITS LESSONS -- BANK SUPERVISION -- The Prelude to the Events of 2008 -- A Selective 2008 Chronology -- The First Quarter -- 2008: THE YEAR OF THE BANK HOLDING COMPANY -- The Second Quarter -- The Third Quarter -- The Fourth Quarter -- TROUBLED ASSET RELIEF PROGRAM CAPITAL PURCHASE PROGRAM -- Areas of Bank Regulatory and Supervisory Focus Beyond 2008 -- Underwriting -- Consumer Protection -- Capital -- Concentrated Risk -- Liquidity -- Public Stakeholders -- Conclusion -- REMOTE DEPOSIT CAPTURE: A PRIMER -- Background -- Managing RDC Risks -- Operational Risks and Controls -- Customer Screening -- Monitoring and Reporting -- Vendor Screening -- Customer Audits -- Business Continuity Planning -- Change Control Processes -- Insurance -- Legal Risks and Controls -- Compliance Risks and Controls -- Conclusion -- Future Prospects -- FROM THE EXAMINER'S DESK: CHANGES TO REGULATION Z AFFORD INCREASED CONSUMER PROTECTIONS -- New and Enhanced Protections for Consumers of Higher-Priced and High-Cost Mortgage Loans -- New Protections for Consumers of Higher-Priced Mortgage Loans -- Relying on the collateral securitizing the loan without regard to the consumer's ability to repay the loan -- Relying on the consumer's income or assets without verifying such amounts through reasonably reliable third-party documents -- COMPLIANCE PRACTITIONER NOTE -- Imposing a prepayment penalty after two years or imposing a prepayment penalty at any time under certain circumstances65 -- Failing to escrow for property taxes and mortgage-related insurance when the mortgage loan is secured by a first lien -- HIGHER-PRICED MORTGAGES AND HMDA -- Enhanced Protections for Consumers of High-Cost Mortgage Loans.

Collateral-based Lending without Regard to Repayment Ability -- Prepayment Penalties -- IMPACT OF REGULATION Z'S HIGHER-PRICED AND HIGH-COST MORTGAGE AMENDMENTS ON NONTRADITIONAL AND SUBPRIME MORTGAGE GUIDANCE -- Appraisal and Servicing Protections for Consumers of Mortgage Loans Secured by the Consumer's Principal Dwelling -- Expanded and Enhanced Early Disclosure Requirements and New Prohibitions against Deceptive Advertising -- Early Disclosures -- Advertising -- Effective Dates -- Conclusion -- OVERVIEW OF SELECTED REGULATIONS AND SUPERVISORY GUIDANCE -- End Notes -- Chapter 2 THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC): EFFORTS TO SUPPORT FINANCIAL AND HOUSING MARKETS -- SUMMARY -- BRIEF OVERVIEW OF FDIC FUNCTIONS -- Deposit Insurance -- Resolution of Bank Failures -- EFFORTS TO SUPPORT FINANCIAL AND HOUSING MARKETS15 -- Increase in Deposit Insurance -- Support of the Deposit Insurance Fund -- Temporary Liquidity Guarantee Program -- Foreclosure Mitigation Efforts -- APPENDIX. LARGEST FDIC BANK CLOSINGS, 2008 -- Public-Private Investment Fund (PPIF)/Legacy Loan Program -- End Notes -- Chapter 3 FEDERAL DEPOSIT AND SHARE INSURANCE: PROPOSALS FOR CHANGE -- SUMMARY -- WHAT IS DEPOSIT INSURANCE AND HOW IS IT ADMINISTERED? -- ISSUES -- POLICY CONSIDERATIONS -- FDIC RECOMMENDATIONS AND CONGRESSIONAL ACTIVITY -- 2005 -- 2006 -- 2007 -- 2008 -- 2009 -- End Notes -- Chapter 4 FINANCIAL INSTITUTION INSOLVENCY: FEDERAL AUTHORITY OVER FANNIE MAE, FREDDIE MAC, AND DEPOSITORY INSTITUTIONS -- SUMMARY -- OVERVIEW OF THE U.S. CREDIT CRUNCH AND ITS EFFECT ON FANNIE, FREDDIE, BANKS, AND THRIFTS -- Introduction -- Background on Fannie Mae and Freddie Mac -- FDIC AND INSOLVENT BANKS AND THRIFTS -- Background -- Appointment of a Conservator or Receiver over Banks and Thrifts -- Generally.

Grounds for Appointing the FDIC as Conservator or Receiver over Banks and Thrifts -- FDIC's Conservatorship or Receivership Powers -- Overvie -- FDIC's Rulemaking Powers of Conservatorships or Receiverships -- FDIC's General and Incidental Powers as Conservator or Receiver -- FDIC's Explicit Powers as Conservator or Receiver -- Statutes of Limitations Available to Conservatorships or Receiverships of Banks or Thrifts -- FDIC's Additional Conservatorship Powers -- FDIC's Additional Receivership Powers -- FDIC's Options for Resolving Bank and Thrift Insolvencies -- Least-Cost Resolution Requirement -- Cross-Guaranty and Holding Company Contribution Requirements -- Deposit Payoff -- Open Institution Assistance -- Purchase and Assumptions (P&amp -- As) -- FDIC's Claims Process as Receiver -- Overview -- Payment of Claims and Priority of Claimants -- Overview -- Priorities -- Agreements against the Interests of the FDIC -- FANNIE MAE AND FREDDIE MAC -- Before P.L. 110-289: OFHEO's Powers as Conservator -- New Powers Granted by P.L. 110-289 to Deal with a Failing Fannie or Freddie -- Overview -- Notable Differences between the FDIC's Authority and that of the FHFA -- Grounds for Appointing the FHFA as Conservator or Receiver -- FHFA Conservatorship or Receivership Powers -- Overview -- FHFA's Rulemaking Powers as Conservator or Receiver -- FHFA's General and Incidental Powers -- FHFA's Explicit Powers as Conservator or Receiver -- Statutes of Limitations Available to the FHFA as Conservator or Receiver -- FHFA's Additional Conservatorship Powers -- FHFA's Additional Receivership Powers -- FHFA's Options for Resolving Insolvencies and the Inapplicability of the Least-Cost Requirement -- Claims Process -- Overview -- Payment of Claims -- FHFA Priority -- Agreements against the Interests of the FHFA -- End Notes.

Chapter 5 INSOLVENCIES OF "SYSTEMICALLY SIGNIFICANT FINANCIAL COMPANIES" (SSFCS): PROPOSAL FOR FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC) RESOLUTION -- SUMMARY -- BACKGROUND -- TREASURY'S MARCH 25, 2009, PROPOSAL -- What Types of Companies Does It Cover? -- What Is a Systemic Risk Determination? -- What Is "Default or Danger of Default"? -- When Is the Systemic Risk Determination Made? -- Who Makes the Systemic Risk Determination? -- Who Recommends a Systemic Risk Determination? -- What Must Be Included in the Recommendation for a Systematic Risk Determination? -- What Is the Effect of a Systemic Risk Determination? -- What Considerations Must the FDIC Weigh in Determining a Course of Action Once a Systemic Risk Determination Has Been Made? -- What Actions May the FDIC Take? -- What Rulemaking Authority is Provided under this Proposal? -- What Are Some of the Effects of FDIC's Appointment as Receiver or Conservator? -- Judicial Review and Effect on Other Litigation -- General Resolution Powers -- Merger Autority and Asset-Transfer Authority of Conservator or Receiver -- Miscellaneous Powers -- Incidental Powers -- and Termination of Shareholders' Rights -- Judicial Proceedings -- FDIC Rights and Remedies -- When Must Actions against FDIC as Conservator or Receiver Be Filed? -- Fraudulent Transfers -- Expedited Procedures for Appeals in Cases against Directors, etc. -- What Standards Are Imposed Upon FDIC as Conservator or Receiver under this Proposal? -- How Are Claims Determined? -- Overview -- What is the Maximum Liability to a Claimant? -- Priority of Claimants -- Contracts Entered Into before Appointment of Conservator or Receiver -- Leases or Contracts for the Sale of Real Property and Service Contracts -- How Are "Qualified Financial Contracts" Treated? -- Authority to Enforce Contracts -- Liability of Directors and Officers.

Bridge Financial Companies -- Establishment and Duration -- Stay of Judicial Action -- What Corporate Law Applies to a Bridge Financial Company? -- Agreements against the Interest of a Bridge Finance Company -- Bridge Financial Companies: Not Federal Agencies and Are Tax-Exempt -- Authority of Bridge Financial Company to Obtain Credit -- Liquidation of Certain Stockbrokers or Commodity Brokers -- Funding for FDIC,s Resolution Authority -- CLARIFICATION OF CRIMINAL PROVISION REGARDING CONCEALING ASSETS FROM A CONSERVATOR, RECEIVER, OR LIQUIDATING AGENT -- Miscellaneous Provisions -- APPENDIX A. FORMS OF BANKING ORGANIZATIONS -- APPENDIX B. ACTIVITIES CONSIDERED FINANCIAL IN NATURE UNDER SECTION 4(K)(4) OF THE BANK HOLDING COMPANY ACT, 12 U.S. /843(K)(4) -- Activities That Are Financial in Nature -- APPENDIX C. PERMISSIBLE NON-BANKING ACTIVITIES: 12 C.F.R. 225.28 -- List of Permissible Nonbanking Activities -- APPENDIX D. ACTIVITIES PERMISSIBLE FOR FINANCIAL HOLDING COMPANIES UNDER /2 C.F.R. 225.86 -- Activities That Are Financial in Nature or Incidental to a Financial Activity -- End Notes -- Chapter 6 INSOLVENCY OF SYSTEMICALLY SIGNIFICANT FINANCIAL COMPANIES: BANKRUPTCY VS. CONSERVATORSHIP/RECEIVERSHIP -- SUMMARY -- INTRODUCTION -- COMPARISON OF DEPOSITORY INSTITUTIONS AND SYSTEMICALLY SIGNIFICANT FINANCIAL INSTITUTIONS -- DIFFERENCES BETWEEN THE FDIC'S CONSERVATORSHIP/RECEIVERSHIP POWERS AND THE BANKRUPTCY CODE -- Overall Objectives of Each Regime -- Insolvency Initiation Authority and Timing -- Oversight Structure and Appeal -- Management, Shareholder, and Creditor Rights -- FDIC "SUPERPOWERS," INCLUDING CONTRACT REPUDIATION, VERSUS BANKRUPTCY,S AUTOMATIC STAY -- Speed of Resolution -- End Notes -- Chapter 7 CURRENT ISSUES IN DEPOSIT INSURANCE -- CONDITION OF THE DEPOSIT INSURANCE FUND -- BORROWING AUTHORITY.

IMPROVING THE SYSTEMIC RISK SPECIAL ASSESSMENT.

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