* WASHINGTON (9/28/10)--The Federal Deposit Insurance Corp. (FDIC) Monday was ready to begin creating a resolution procedure for systemically significant firms that improves the bankruptcy process. The FDIC was scheduled to meet Monday in a first step to implement the resolution plan, which allows the government to improve risky banks and nonbanks (American Banker
Sept. 27). The board also is expected to finalize a rule on what conditions securitizers must follow to be exempt from FDIC takeovers. Financial observers said they hope the new plan would mirror the bankruptcy model as closely as possible. Michael Krimminger, FDIC deputy for policy, said while the resolution plan will have some new parts, it will aim to track existing models. The new system also could be more efficient than bankruptcy-related court proceedings, he said ... * WASHINGTON (9/28/10)-- The Federal Deposit Insurance Corp. (FDIC) Monday approved a final safe harbor rule
for securitizations and participations. The rule would extend through Dec. 31 a safe harbor protection for treatment by the FDIC as conservator or receiver of financial assets transferred by an insured depository institution for a securitization or participation. The FDIC previously extended the protections twice, with the last set to expire on Thursday. The safe harbor was initially adopted in 2000 for securitizations and participations. In the event of a bank failure, the FDIC would not try to reclaim loans transferred into such transactions as long as an accounting sale had occurred. However, some changes made in June 2009 by the Financial Accounting Standards Board caused many securitizations to now longer comply with preconditions for the application of the original safe harbor ... * WASHINGTON (9/28/10)--The Federal Deposit Insurance Corp. (FDIC) approved the issuance of a proposed rule
to implement provisions of the Dodd-Frank Act on regulator reform to provide deposits at all FDIC-insured institutions with unlimited deposit insurance coverage on noninterest bearing transaction accounts from Dec. 31 through Dec. 31, 2012. Under the proposal, the FDIC will create a new, temporary deposit insurance category for noninterest bearing transaction accounts. Under FDIC’s Transaction Account Guarantee Program, which will expire at year-end, the Dodd-Frank provision will apply at all FDIC-insured institutions and will cover only traditional checking accounts that do not pay interest. The rule emphasizes that starting Jan. 1, low-interest consumer checking accounts and Interest on Lawyer Trust Accounts will no longer be eligible for an unlimited guarantee ...