Banking and Finance Law Daily Wrap Up, FINANCIAL INTERMEDIARIES—FDIC rescinds policy on failed bank acquisition qualifications, (Mar 20, 2026)
Organizations Mentioned:First Republic Bank | Signature Bank | Silicon Valley Bank
By Sherri M. Schroeder, J.D.
The FDIC expressed concern that the policy would discourage or limit investment by nonbanks in connection with the resolution of failed depository institutions.
The Federal Deposit Insurance Corporation has rescinded its Statement of Policy on Qualifications for Failed Bank Acquisitions along with related questions and answers. The Statement, published in September 2009, and the accompanying online questions and answers on aspects of the Statement, published in 2010, were issued to provide guidance regarding the terms and conditions applicable to private capital investors that wanted to acquire the deposit liabilities or assets of failed insured depository institutions. The FDIC was concerned that the “onerous and highly prescriptive” measures included in the Statement might discourage and potentially limit investments by nonbanks. As a general statement of policy exempt from the notice and comment requirements of the Administrative Procedure Act, the rescission is scheduled for publication in the Federal Register on March 23, 2026, which is the effective date of the rescission.
Statement. Following a 30-day comment period, the Statement of Policy on Qualifications for Failed Bank Acquisitions was published on Sept. 2, 2009. In Jan. and Apr. 2010, the agency posted online questions and answers on aspects of the Statement. Per the FDIC, the Statement was issued to provide guidance to private capital investors wanting to acquire the deposit liabilities, or both the liabilities and assets, of insured depository institutions that had failed. The Statement established extensive terms and conditions private capital investors were expected to satisfy before they could bid on a failing institution. The standards were applied to both private investors in certain companies that sought to assume deposit liabilities or assets from the resolution of a failed institution and private capital investors involved in applications for deposit insurance in conjunction with de novo charters issued in connection with the resolution of a failed institution.
According to the FDIC, the Statement included “onerous and highly prescriptive” requirements, including:
capital standards that would not be applicable in any other failed bank acquisitions;
imposition of an agreement to a cross guarantee with respect to substantially commonly owned depository institutions;
limits on transactions with affiliates that were more restrictive than Sections 23A and 23B of the Federal Reserve Act; and
lengthy continuity of ownership requirements.
“The FDIC is concerned that these and other aspects of the Statement of Policy may discourage and potentially limit investments by nonbanks in connection with the resolution of failed depository institutuions,” stated the FDIC. “Accordingly, the FDIC is rescinding the Statement of Policy.
Rationale. In the rationale the FDIC gave in its final action rescinding the Statement, the FDIC noted the rapid speed of the 2023 bank failures of Silicon Valley Bank, Signature Bank, and First Republic Bank. “Although nonbanks participated in FDIC auctions for these failed banks in 2023, their options for bidding and the participation of additional nonbanks may have been limited by the restrictions imposed by the Statement of Policy,” stated the FDIC. The FDIC also noted that nonbank entities such as private equity firms “can play a significant role in the resolution process, given their ability to access and deploy significant pools of capital.”
“Because the Statement of Policy is more restrictive than certain statutory requirements, and also introduces another point of approval and uncertainty for nonbanks in the failed bank acquisition process, the FDIC believes that continuing to apply the Statement of Policy may have a deterrent effect on private capital investment and inhibit the infusion of a potentially significant flow of capital into failed institutions,” stated the FDIC.
The FDIC also used the rationale that technological advancement and the ongoing evolution of the financial system may increase the speed with which bank failures may occur. The impact of this could result in considerably increased costs of resolution and risk to the Deposit Insurance Fund.
The FDIC further notes that potential investors will continue to be required to comply with existing laws and regulations, including those governing capital, control, affiliate transactions, and anti-money laundering/countering the financing of terrorism requirements. Potential investors will also be expected to operate in a safe and sound manner following any acquisition.
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