FDIC Modifies Approach to IDI Resolution Planning for Large Banks
The FDIC is modifying its approach to insured depository institution (IDI) resolution planning, to focus the process on information relevant for a successful resolution of a large bank through a weekend sale or short-term operations while marketing efforts are conducted. The FDIC also is providing exemptions on full resolution plan content requirements, such as the requirements to utilize a bridge bank strategy and a hypothetical failure scenario in the plan. Further, the FDIC has issued an updated set of Frequently Asked Questions (FAQs) containing additional exemptions and clarified expectations including a new FAQ that states FDIC staff will not recommend findings related to the credibility of the identified strategy or make credibility determinations on each submission. These changes will apply in the upcoming submission cycle.
The following are content requirement exemptions for the initial submission cycle:
Group A CIDI Resolution Plans & Group B CIDI Informational Filings:
- Mitigants to economic impact of failure
- Non-deposit claims
Group A CIDI Resolution Plans:
- Requirement for bridge bank or multi-acquirer strategies
- Failure scenario
- Quantitative valuation analysis
Group B CIDI Informational Filings:
- Franchise components, including certain elements of the remaining content requirements
- Corporate governance (select components)
Group A CIDI & Group B CIDI Interim Supplements:
- Franchise components and, for group B CIDIs, franchise component elements of the remaining content requirements
- Off-balance sheet exposures
- Payment, clearing, and settlement
- Capital structure, funding sources
- Cross-border elements
- Management information systems, software licenses, and intellectual property
In addition, the following FAQs also contain important additions or revisions:
- Key personnel
- Franchise components and material asset portfolios (divestiture options remains unchanged)
- Digital services and electronic platforms
- Communications playbook
- CIDI assessment of the full resolution submission
- Engagement
- Capabilities testing
- Changes since prior cycle
Reach out to a Forvis Mazars professional for more information.