The Federal Deposit Insurance Corporation posted sample documents on its website to “increase transparency” into the marketing and sale process of failing financial institutions. The move to provide resource documents was recommended and supported by ABA’s Task Force on Deposit Insurance Modernization.
Speaking at an event in October, FDIC Chairman Travis Hill said his agency was working on “a better-understood, competitive and nimble failed-bank marketing process” for banks in receivership. As part of that effort, the agency is revising its bidding process as the current criteria for bidder eligibility are “too restrictive when it comes to large failures.”
Eleven new sample documents were released, covering franchise sales and loan pools, including purchase and assumption agreements, confidentiality agreements and financing terms. The website updates also include additional information for nonbank acquirers and “alliance bids,” which occur when multiple bidders combine resources to bid on a failed institution. The FDIC said additional financing documents will be released soon and that it “welcomes feedback” about ways the forms could be modified. No deadline was given for industry comments.
“Sample document templates will likely change over time, in which case newer versions may be posted,” the agency cautioned. “The version of a template used for any particular transaction could be different from the posted version as a result of updates that have not yet been posted and/or unique transaction offerings.”
