ICBA to FDIC: Focus new resolution standards on banks over $100B

ICBA said it agrees with an FDIC proposal to implement resolution planning for banks with at least $100 billion in assets but said banks between $50 billion and $100 billon should generally be exempt.

ICBA Comments: In a comment letter to the FDIC, ICBA said:

  • Resolution requirements for banks $100 billion and over is needed because the pool of potential acquirers is limited for banks of that size.

  • It agrees the FDIC should use a bridge depository institution, or BDI, where possible so the agency could sell the resolved bank in pieces to multiple acquirers over time, limiting the propensity for bank failures to lead to large banks growing larger.

  • BDIs or whole bank sales are more viable for banks between $50 billion and $100 billon, so they should be fully exempted from filing resolution plans or informational filings unless they engage in activities that are so complex that resolution options are limited.

Background: Responding to the failures this year of Silicon Valley Bank and Signature Bank of New York, the FDIC proposed requiring:

  • Resolution plans for banks over $100 billion and informational filings for banks with at least $50 billion in assets.

  • More FDIC board engagement in selling failed banks over $50 billion.

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