On March 19, the FDIC Board of Directors announced the rescission of its 2009 “Statement of Policy on Qualifications for Failed Bank Acquisitions” and related 2010 guidance, effective March 23. The FDIC described the rescinded policy as imposing “onerous and highly prescriptive measures” on private capital investors seeking to acquire failed bank assets or deposit liabilities, including heightened capital standards, cross-guarantee requirements, “restrictive” affiliate transaction limits, and “lengthy” continuity of ownership requirements. The agency asserted that these restrictions may have discouraged nonbank participation in the resolution process, noting that, while nonbanks participated in FDIC auctions following prominent bank failures in 2023, their bidding options may have been limited by the policy’s requirements.

The FDIC said the rescission is intended to remove regulatory barriers for nonbank entities such as private equity firms to participate in bids on failed banks and to reduce costs to the Deposit Insurance Fund. The FDIC emphasized that potential investors must comply with existing laws and regulations governing capital, control, affiliate transactions, and BSA/AML requirements, and will be expected to operate in a safe and sound manner following an acquisition.