The FDIC’s Statement Of Policy On Qualifications For Failed Bank Acquisitions

Originally published August 31, 2009

The Board Of Directors of the Federal Deposit Insurance Corporation ("FDIC") has adopted its final Statement of Policy on Qualifications for Failed Bank Acquisitions (the "Acquisition Policy Statement") by a 4-1 vote.¹ As adopted, the Acquisition Policy Statement applies to investments by "private capital investors," which term appears to be the FDIC's name for private equity funds ("PEFs"), albeit the scope of application of the Acquisition Policy Statement remains unclear (as discussed in Section II of this memorandum) and will afford the regulators considerable discretion in its application.²

While the Acquisition Policy Statement is not as burdensome to PEFs as would have been the case under the Proposed Guidelines,³ as discussed in our prior Memorandum of July 15, 2009,⁴ it nonetheless imposes burdens on PEFs that will not apply to other investors in banks or thrifts. Accordingly, PEFs should give substantial consideration