On November 28, 2018, Federal Deposit Insurance Corporation (“FDIC”) Chairman Jelena McWilliams delivered keynote remarks regarding resolution planning requirements at the 2018 Annual Conference of The Clearing House and Bank Policy Institute. Chairman McWilliams repeatedly emphasized that the failure of a financial institution should be dealt with through bankruptcy. She stated that she strongly supports legislation that would establish a more tailored, transparent process for large financial firms under the Bankruptcy Code. According to McWilliams, “[t]he FDIC stands ready to work with Congress and hopes to see such a measure signed into law.” Additionally, the FDIC is considering refinements to the Orderly Liquidation Authority (the process created in the Dodd-Frank Act as an alternative to bankruptcy for large financial institutions), including recommendations from the Treasury Department published earlier this year.
Notably, Chairman McWilliams described two rulemaking that are expected in the coming months regarding resolution plans required by:
- Section 165(d) of the Dodd-Frank Act for bank holding companies (“BHCs”) with $50 billion or more in total consolidated assets (“165(d) resolution plans”); and
- The FDIC rule for insured depository institutions (“IDIs”) with $50 billion or more in total consolidated assets (“IDI resolution plans”).