Acting Comptroller Issues Statement on FDIC Resolution Plan Rule

WASHINGTON—Acting Comptroller of the Currency Michael J. Hsu issued the following statement at today’s Federal Deposit Insurance Corporation (FDIC) board meeting regarding the final rule on insured depository institution (IDI) resolution planning.

As a long-time regulator of large financial institutions, I know first-hand the consequences of complacency when it comes to resolvability. Those consequences can include not just disorderly failure and the need for extraordinary government action, but also a broader loss of trust in banks and their regulators. It is on us to remain vigilant to safeguard that trust.

I support the final rule to modify the current insured depository institution (IDI) resolution plan rule, codified at 12 CFR 360.10, including requirements for the content, timing, and evaluation of resolution submissions, to support the FDIC’s readiness in the event of material distress and failure of a covered IDI (CIDI).

The FDIC published a notice of proposed rulemaking in September 2023 to modify the current IDI resolution plan rule. I appreciate the thoughtful comments, all of which were carefully analyzed and considered. While this final rule retains key elements from the proposal, it is improved by several modifications taken from commenters. The final rule requires CIDIs with at least $100 billion in total assets, or Group A CIDIs, to develop and submit detailed plans demonstrating how they could be resolved in an orderly and timely manner in the event of receivership. These plans must include an identified strategy that would provide timely access to insured deposits, maximize value from the sale or disposition of assets, minimize any losses realized by creditors in resolution, and address potential risk of adverse effects on US economic conditions or financial stability.

CIDIs with at least $50 billion but less than $100 billion in total assets, or Group B CIDIs, are required to submit more limited informational filings that will support the development of strategic options for resolution of the CIDI by the FDIC. To implement these requirements, I support termination of the existing moratorium on submission of resolution filings by Group B CIDIs.

Importantly, the final rule requires that CIDIs be able to demonstrate the capabilities necessary to ensure that franchise components, such as asset portfolios or lines of business, are marketable in resolution. Submissions must describe capabilities to establish a virtual data room in a timely manner to market such franchise components. Such capabilities would improve not only the likelihood of orderly resolution, but also the chances of recovery when banks are in stress.

For these reasons, I support the final rulemaking to revise the IDI resolution plan rule. I especially want to thank the staff for their dedication and hard work on this matter.

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