The Federal Deposit Insurance Corporation (FDIC) adopted a final rule on April 14, 2014 to implement section 210(r) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under the final rule individuals or entities that have, or may have, contributed to the failure of a “covered financial company” cannot buy a covered financial company’s assets from the FDIC. The final rule establishes a self-certification process that is a prerequisite to the purchase of assets of a covered financial company from the FDIC.
With one exception, the final rule is unchanged from the proposed rule. Language is added to require that a prospective purchaser certify that a sale of assets of a covered financial company by the FDIC is not structured to circumvent section 210(r) or the final rule. The final rule is distinct because it would apply to sales of covered financial company assets by the FDIC and not to sales of failed insured depository institution assets. The final rule addresses the statutory prohibitions contained in section 210(r). It does not address other restrictions on sales of assets. For instance, the final rule does not address purchaser restrictions imposed by 12 CFR part 366 (“Minimum Standards of Integrity and Fitness for an FDIC Contractor”) and 5 CFR part 3201 (“Supplemental Standards of Ethical Conduct for Employees of the Federal Deposit Insurance Corporation”). Further, the final rule is separate and apart from any policy that the FDIC has, or may adopt or amend, regarding collection of amounts owed by obligors to a failed insured depository institution or a covered financial company. The focus of a collection policy is to encourage delinquent obligors to promptly repay or settle obligations, which is outside the scope of section 210(r) and the final rule.