FDIC to Private Equity: Thanks but (Maybe) No Thanks
By V. Gerard Comizio, Lawrence D. Kaplan, Kevin L. Petrasic, Todd Beauchamp and Helen Lee
On July 2, 2009, the Board of Directors of the Federal Deposit Insurance Corporation (FDIC) issued for public comment a proposed Statement of Policy that sets forth the qualifications expected of private equity investors for failed bank acquisitions (Proposal). The purpose of the Proposal is to provide guidance to private equity investors that are interested in acquiring or investing in assets and liabilities from failed insured depository institutions (Failed Banks) by setting forth the terms and conditions for such investments or acquisitions.
While the FDIC is currently seeking comment on all aspects of the Proposal, the implications of the Proposal, if adopted in final form, would significantly impact and potentially derail the considerations of private equity firms looking to invest in Failed Banks through various investment structures previously contemplated and, in many cases, approved by the federal banking agencies.