FDIC Seeks Comments From Banking Industry And Investors For Legacy Loans Program

On March 26, 2009, the Federal Deposit Insurance Corporation (FDIC) announced the opening of the public comment period for the Legacy Loans Program (LLP), a key effort in the Treasury Department's Public-Private Investment Program. The FDIC is requesting comment from interested parties on key terms of the proposed LLP.

We understand that the initial focus of the FDIC is expected to be loans related to commercial and residential real estate, including construction loans. Participating banks may sell loans with or without cash flow; the FDIC initially expects that such loans will be sold on a servicing-released basis.

Participating banks may include FDIC-insured banks of all sizes, although it is uncertain to what degree foreign-owned banks will be eligible to participate.