If private equity investors ("PE Investors") feel like
they have whiplash from the recent actions of the FDIC, there are
good reasons for it. In less than two
months—unprecedented speed for a banking regulatory
agency—the FDIC has proposed and adopted a policy
statement that first seemed to suggest that PE Investors were
disinvited from the failed bank bidding process and then offered a
compromise that suggests they may participate if they are willing
to bid more than other bidders or, even more to the FDIC's
liking, join forces with an established banking organization, which
itself may need additional capital.
The FDIC's position on PE Investors' access to the
bidding process is a critical issue, as it impacts the ability of
the banking industry to attract capital and avoid taxpayer
bailouts. The final Statement of Policy on Qualifications for
Failed Bank Acquisitions ("Statement") continues to
single out PE Investors as posing peculiar risks to insured
depository
