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FDIC Reviews Bank Buyout Guidelines in Roundtable

The FDIC, after meeting with several buyout pros last week, has agreed on and finalized its guidelines for private investment in Failed Insured Depository Institutions. The agency agreed to refine its prior guidelines pertaining to the description of the types of investors covered, the capital standard and clarifying the cross support obligation rules.

Press release:

Senior officials of the Federal Deposit Insurance Corporation (FDIC) yesterday held a roundtable discussion with a wide variety of interested groups, including public interest organizations, pension funds, private investors, investment managers, and others, to discuss the application of the FDIC Statement of Policy on the Acquisition of Failed Insured Institutions, published on September 2, 2009. The roundtable was part of the six-month review of the Statement of Policy mandated by the FDIC Board of Directors when it was adopted. By providing an opportunity for open dialogue with interested parties, the roundtable will help support improved application of the requirements contained in the Statement of Policy and the principles that underlie them.

“Bringing responsible new investors into the banking system is an important step towards a strengthened banking system,” said FDIC Chairman Sheila C. Bair. “In doing so, we must also make sure that new investment supports strong banking institutions for the long term and meets the fundamental principles applicable to the ownership of insured depository institutions.”

The FDIC Statement of Policy on the Acquisition of Failed Insured Institutions provides guidance to investors interested in acquiring or investing in the acquisition of failed banks or thrifts about the standards they will be expected to meet in order to qualify to bid on a failed institution.

“Since the adoption of the Statement of Policy, qualified private investors in new banks and in partnership with existing banks and holding companies have successfully bid on and acquired failed institutions. The Statement of Policy has been crucial tool and it continues to be our goal to have a transparent application process in order to give clear and timely answers,” Chairman Bair said. “Today’s roundtable was useful to help guide the FDIC’s ongoing review of the Statement of Policy.”

View the initial guidelines here.

View the participants below:

Press Releases

Attendees:

John L. Douglas
Partner, Davis Polk & Wardwell

Jimmy Dunne
Senior Managing Principal, Sandler O’Neill + Partners

Jack Murphy
Partner, Cleary Gottlieb Steen & Hamilton

Kevin Stein
Partner, FBR Capital Markets & Co.

Nick Adams
Senior VP, Partner and Equity Portfolio Manager, Wellington Management

Walt Burkley
Senior Vice President and Senior Counsel of the Fund Business Management
Group, Capital Research and Management Company

Elizabeth Caldas
Director of Private Markets, NYC Pension System

David Coulter
Managing Director and Senior Advisor, Warburg Pincus

Charles Davis
Chief Executive Officer, Stone Point Capital

Michael Dutton
Portfolio Manager, CalPERS

Allen Puwalski
Senior Vice President, Paulson & Co.

Randal K. Quarles
Managing Director, The Carlyle Group

Neil Randall
Senior Investment Manager, Texas Retirement System of Teachers

Jeff T. Blau
Co-Founder and President, SJB Escrow Corporation

Walter L. Davis
Vice Chairman, Chief Credit Officer, and Director, Blue Ridge Holdings

Lawrence Fish
Chief Executive Officer, NBH Holdings Corp.

Robert Steel
Director, Community Bancorp

Michael Calhoun
President, Center for Responsible Lending

Mary Frances Monroe
Vice President, Office of Regulatory Policy, American Bankers Association

Damon A. Silvers
Director of Policy and Special Counsel, AFL-CIO

Karen Thomas
Senior Executive Vice President, Independent Community Bankers of America