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2000 - FDIC Rules and Regulations
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PART 360—RESOLUTION AND RECEIVERSHIP RULES
Sec.
360.1
Least-cost resolution.
360.2
Federal Home Loan banks as secured creditors.
360.3
Priorities.
360.4
Administrative expenses.
360.5
Definition of qualified financial contracts.
360.6
Treatment by the Federal Deposit Insurance Corporation as conservator
or receiver of financial assets transferred in connection with a
securitization or participation.
360.7
Post-insolvency interest.
AUTHORITY: 12 U.S.C. 1821(d)(1), 1821(d)(10)(C), 1821(d)(11),
1821(e)(1), 1821(e)(8)(D)(i), 1823(c)(4), 1823(e)(2); Sec. 401(h), Pub.
L. 101--73, 103 Stat. 357.
SOURCE: The provisions of this Part 360 appear at 55 Fed. Reg.
46496, November 5, 1990, except as otherwise
noted.
§ 360.1 Least-cost resolution.
(a) General rule. Except as provided in section
13(c)(4)(G) of the FDI Act (12 U.S.C.
1823(c)(4)(G)), the FDIC shall not take any action, directly or
indirectly, under sections 13(c), 13(d), 13(f), 13(h) or 13(k) of the
FDI Act (12 U.S.C. 1823(c), (d), (f), (h) or (k)) with respect to any
insured depository institution that would have the effect of increasing
losses to any insurance fund by protecting:
(1) Depositors for more than the insured portion of their
deposits (determined without regard to whether such institution is
liquidated); or
(2) Creditors other than depositors.
(b) Purchase and assumption transactions. Subject to the
requirement of section 13(c)(4)(A) of the FDI Act (12 U.S.C.
1823(c)(4)(A)), paragraph (a) of this section shall not be construed as
prohibiting the FDIC from allowing any person who acquires any assets
or assumes any liabilities of any insured depository institution, for
which the FDIC has been appointed conservator or receiver, to acquire
uninsured deposit liabilities of such institution as long as the
applicable insurance fund does not incur any loss with respect to such
uninsured deposit liabilities in an amount greater than the loss which
would have been incurred with respect to such liabilities if the
institution had been liquidated.
[Codified to 12 C.F.R. § 360.1]
[Section 360.1 added at 58 Fed. Reg. 67664, December 22,
1993, effective January 21, 1994; 63 Fed. Reg. 37761, July 14, 1998,
effective August 13, 1998]
§ 360.2 Federal Home Loan banks as secured creditors.
(a) Notwithstanding any other provisions of federal or state law or
any other provisions of these regulations, the receiver of a borrower
from a Federal Home Loan bank shall recognize the priority of any
security interest granted to a Federal Home Loan bank by any member of
any Federal Home Loan bank or any affiliate of any such member, whether
such security interest is in specifically designated assets or a
blanket interest in all assets or categories of assets, over the claims
and rights of any other party (including any receiver, conservator,
trustee or similar party having rights of a lien creditor) other than
claims and rights that
(1) Would be entitled to priority under otherwise applicable law;
and
(2) Are held by actual bona fide purchasers for value or by
actual secured parties that are secured by actual perfected security
interests.
(b) If the receiver rather than the bank shall have possession of
any collateral consisting of notes, securities, other instruments,
chattel paper or cash securing advances of the bank, the receiver
shall, upon request by the bank, promptly deliver possession of such
collateral to the bank or its designee.
(c) In the event that a receiver is appointed for any member of a
Federal Home Loan bank, the following procedures shall
apply:
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(1) The receiver and the bank shall immediately seek and develop
a mutually agreeable plan for the payment of any advances made by the
bank to such borrower or for the servicing, foreclosure upon and
liquidation of the collateral securing any such advances, taking into
account the nature and amount of such collateral, the markets in which
such collateral is normally traded or sold and other relevant factors.
(2) In the event that the receiver and the bank shall not, in
good faith, be able to develop such a mutually agreeable plan, or, in
the interim, the bank in good faith reasonably concludes that the value
of such collateral is decreasing, because of interest rate or other
market changes, at such a rate that to delay liquidation or other
exercise of the bank's rights as a secured party for the development of
a mutually agreeable plan could reasonably cause the value of such
collateral to decrease to an amount that is insufficient to satisfy the
bank's claim in full, the bank may, at any time thereafter if permitted
to do so by the terms of the advances or other security agreement with
such borrower or otherwise by applicable law, proceed to foreclose
upon, sell, lease or otherwise dispose of such collateral (or any
portion thereof), or otherwise exercise its rights as a secured party,
provided that the bank acts in good faith and in a commercially
reasonable manner and otherwise in accordance with applicable law.
(3) The foregoing provisions of this paragraph (c) shall not
apply in the event that a purchase and assumption transaction is
entered into regarding any such member.
(d) The bank's rights pursuant to the second sentence of section
10(d) of the Federal Home Loan Bank Act shall not be affected or
diminished by any provisions of state law that may be applicable to a
security interest in property of the member.
(e) The receiver for a borrower from a Federal Home Loan bank shall
allow a claim for a prepayment fee by the Bank if, and only if:
(1) The claim is made pursuant to a written contract that
provides for a prepayment fee, provided, however, that such prepayment
fee allowed by the receiver shall not exceed the present value of the
loss attributable to the difference between the contract rate of the
secured borrowing and the reinvestment rate then available to the Bank;
and
(2) The indebtedness owed to the Bank by such borrower is secured
by sufficient collateral in which a perfected security interest in
favor of the Bank exists or as to which the Bank's security interest
is entitled to priority under section 306(d) of the Competitive
Equality Banking Act of 1987 (CEBA) (12 U.S.C. 1430(e), footnote (1),
or otherwise so that the aggregate of the outstanding principal on the
advances secured by such collateral, the accrued but unpaid interest
thereon and the prepayment fee applicable to such advances can be paid
in full from the amounts realized from such collateral. For purposes of
this paragraph (e)(2), the adequacy of such collateral shall be
determined as of the date such prepayment fees shall be due and payable
under the terms of the written contract providing therefor.
[Codified to 12 C.F.R. § 360.2]
[Section 360.1 redesignated as § 360.2 at 58 Fed. Reg. 67664
December 22, 1993, effective January 21, 1994; 63 Fed. Reg. 37761, July
14, 1998, effective August 13, 1998]
§ 360.3 Priorities.
(a) Unsecured claims against an association or the receiver that
are proved to the satisfaction of the receiver shall have priority in
the following order:
(1) Administrative expenses of the receiver, including the costs,
expenses, and debts of the receiver;
(2) Administrative expenses of the association, provided
that such expenses were incurred within thirty (30) days prior to
the receiver's taking possession, and that such expenses shall be
limited to reasonable expenses incurred for services actually provided
by accountants, attorneys, appraisers, examiners, or management
companies, or reasonable expenses incurred by employees which were
authorized and reimbursable under a pre-existing expense reimbursement
policy, that, in the opinion of the receiver, are of benefit to the
receivership, and shall not include wages or salaries of employees of
the association;
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(3) Claims for wages and salaries, including vacation and sick
leave pay and contributions to employee benefit plans, earned prior to
the appointment of the receiver by an employee of the association whom
the receiver determines it is in the best interests of the receivership
to engage or retain for a reasonable period of time;
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(4) If authorized by the receiver, claims for wages and salaries,
including vacation and sick leave pay and contributions to employee
benefits plans, earned prior to the appointment of the receiver, up to
a maximum of three thousand dollars ($3,000) per person, by an employee
of the association not engaged or retained pursuant to a determination
by the receiver pursuant to the third category above;
(5) Claims of governmental units for unpaid taxes, other than
federal income taxes, except to the extent subordinated pursuant to
applicable law; but no other claim of a governmental unit shall have a
priority higher than that of a general creditor under paragraph (a)(6)
of this section;
(6) Claims for withdrawable accounts, including those of the
Corporation as subrogee or transferee, and all other claims which have
accrued and become unconditionally fixed on or before the date of
default, whether liquidated or unliquidated, except as provided in
paragraphs (a)(1) through (a)(5) of this section, provided, however,
that if the association is chartered and was operated under the laws of
a state that provided a priority for holders of withdrawable accounts
over such other claims or general creditors, such priority within this
paragraph (a)(6) shall be observed by the receiver; and provided
further, that if deposits of a federal association are booked or
registered at an office of such association that is located in a state
that provides such priority with respect to state-chartered
associations, such deposits in a federal association shall have
priority over such other claims or general creditors, which shall be
observed by the receiver;
(7) Claims other than those that have accrued and become
unconditionally fixed on or before the date of default, including
claims for interest after the date of default on claims under paragraph
(a)(6) of this section, Provided that any claim based on an
agreement for accelerated, stipulated, or liquidated damages, which
claim did not accrue prior to the date of default, shall be considered
as not having accrued and become unconditionally fixed on or before the
date of default;
(8) Claims of the United States for unpaid federal income taxes;
(9) Claims that have been subordinated in whole or in part to
general creditor claims, which shall be given the priority specified in
the written instruments that evidence such claims; and
(10) Claims by holders of nonwithdrawable accounts, including
stock, which shall have priority within this paragraph (a)(10) in
accordance with the terms of the written instruments that evidence such
claims.
(b) Interest after the date of default on claims under paragraph
(a)(6) of this section shall be at a rate or rates adjusted monthly to
reflect the average rate for U.S. Treasury bills with maturities of not
more than ninety-one (91) days during the preceding three (3) months.
(c) [Reserved]
(d) All unsecured claims of any category or class or priority
described in paragraphs (a)(1) through (a)(10) of this section shall be
paid in full, or provision made for such payment, before any claims of
lesser priority are paid. If there are insufficient funds to pay all
claims of a category or class in full, distribution to claimants in
such category or class shall be made pro rata. Notwithstanding anything
to the contrary herein, the receiver may, at any time, and from time to
time, prior to the payment in full of all claims of a category or class
with higher priority, make such distributions to claimants in priority
classes outlined in paragraphs (a)(1) through (a)(6) of this section as
the receiver believes are reasonably necessary to conduct the
receivership.
Provided that the receiver determines that adequate funds
exist or will be recovered during the receivership to pay in full all
claims of any higher priority.
(e) If the association is in mutual form, and a surplus remains
after making distribution in full of allowed claims as set forth in
paragraphs (a) and (b) of this section, such surplus shall be
distributed to the depositors in proportion to their accounts as of the
date of default.
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(f) Under the provisions of section 11(d)(11) of the Act
(12 U.S.C. 1821(d)(11)), the
provisions of this § 360.3 do not apply to any receivership
established and liquidation or other resolution occurring after August
10, 1993.
[Codified to 12 C.F.R. § 360.3]
[Section 360.2 amended at 58 Fed. Reg. 43070, August 13, 1993;
redesignated as § 360.3 at 58 Fed. Reg. 67664, December 21, 1993,
effective January 21, 1994; amended at 60 Fed. Reg. 35488, July 10,
1995]
§ 360.4 Administrative expenses.
The priority for "administrative expenses of the receiver", as
that term is used in section 11(d)(11) of the Act (12 U.S.C.
1821(d)(11)), shall include those necessary expenses incurred by the
receiver in liquidating or otherwise resolving the affairs of a failed
insured depository institution. Such expenses shall include pre-failure
and post-failure obligations that the receiver determines are necessary
and appropriate to facilitate the smooth and orderly liquidation or
other resolution of the institution.
[Codified to 12 C.F.R. § 360.4]
[Section 360.3 added at 58 Fed. Reg. 43070, August 13, 1993;
redesignated as § 360.4 at 58 Fed. Reg. 67664, December 21, 1993,
effective January 21, 1994; amended at 60 Fed. Reg. 35488, July 10,
1995]
§ 360.5 Definition of qualified financial contracts.
(a) Authority and purpose. Sections 11(e)(8) and (10) of
the Federal Deposit Insurance Act, 12
U.S.C. 1821(e)(8) through (10), provide special rules for the
treatment of qualified financial contracts of an insured depository
institution for which the FDIC is appointed conservator or receiver,
including rules describing the manner in which qualified financial
contracts may be transferred or closed out. Section 11(e)(8)(D)(i) of
the Federal Deposit Insurance Act, 12 U.S.C. 1821(e)(8)(D)(i), grants
the Corporation authority to determine by regulation whether any
agreement, other than those identified within section 11(e)(8)(D),
should be recognized as qualified financial contracts under the
statute. The purpose of this section is to identify additional
agreements which the Corporation has determined to be qualified
financial contracts.
(b) Repurchase agreements. The following agreements
shall be deemed "repurchase agreements" under section
11(e)(8)(D)(v)) of the Federal Deposit Insurance Act, as amended (12
U.S.C. 1821(e)(8)(D)(v)): A repurchase agreement on qualified foreign
government securities is an agreement or combination of agreements
(including master agreements) which provides for the transfer of
securities that are direct obligations of, or that are fully guaranteed
by, the central governments (as set forth at
12 CFR part 325, appendix
A, section II.C, n. 17, as may be amended from time to time) of
the OECD-based group of countries (as set forth at 12 CFR part 325,
appendix A, section II.B.2., note 12 as may be amended from time to
time) against the transfer of funds by the transferee of such
securities with a simultaneous agreement by such transferee to transfer
to the transferor thereof securities as described above, at a date
certain not later than one year after such transfers or on demand,
against the transfer of funds.
(c) Swap agreements. The following agreements shall be
deemed "swap agreements" under section 11(e)(8)(D)(vi) of the
Federal Deposit Insurance Act, as amended (12 U.S.C.
1821(e)(8)(D)(vi)): A spot foreign exchange agreement is any agreement
providing for or effecting the purchase or sale of one currency in
exchange for another currency (or a unit of account established by an
intergovernmental organization such as the European Currency Unit) with
a maturity date of two days or less after the agreement has been
entered into, and includes short-dated transactions such as
tomorrow/next day and same day/tomorrow transactions.
(d) Nothing in this section shall be construed as limiting or
changing a party's obligation to comply with all reasonable trading
practices and requirements, non-insolvency law requirements and any
other requirements imposed by other provisions of the
FDI
{{12-31-07 p.3087}}Act. This section in no way
limits the authority of the Corporation to take supervisory or
enforcement actions, or to otherwise manage the affairs of a financial
institution for which the Corporation has been appointed conservator or
receiver.
[Codified to 12 C.F.R. § 360.5]
[Section 360.5 added at 60 Fed. Reg. 66865, December 27,
1995]
§ 360.6 Treatment by the Federal Deposit Insurance Corporation
as conservator or receiver of financial assets transferred in
connection with a securitization or participation.
(a) Definitions. (1) Beneficial interest
means debt or equity (or mixed) interests or obligations of any
type issued by a special purpose entity that entitle their holders to
receive payments that depend primarily on the cash flow from financial
assets owned by the special purpose entity.
(2) Financial asset means cash or a contract or
instrument that conveys to one entity a contractual right to receive
cash or another financial instrument from another entity.
(3) Participation means the transfer or assignment of
an undivided interest in all or part of a loan or a lease from a
seller, known as the "lead", to a buyer, known as the
"participant", without recourse to the lead, pursuant to an
agreement between the lead and the participant. Without recourse
means that the participation is not subject to any agreement that
requires the lead to repurchase the participant's interest or to
otherwise compensate the participant due to a default on the underlying
obligation.
(4) Securitization means the issuance by a special
purpose entity of beneficial interests:
(i) The most senior class of which at time of issuance is rated
in one of the four highest categories assigned to long-term debt or in
an equivalent short-term category (within either of which there may be
sub-categories or gradations indicating relative standing) by one or
more nationally recognized statistical rating organizations, or
(ii) Which are sold in transactions by an issuer not involving
any public offering for purposes of section 4 of the Securities Act of
1933 (15 U.S.C. 77d), as
amended, or in transactions exempt from registration under such Act
pursuant to Regulation S thereunder (or any successor regulation).
(5) Special purpose entity means a trust, corporation,
or other entity demonstrably distinct from the insured depository
institution that is primarily engaged in acquiring and holding (or
transferring to another special purpose entity) financial assets, and
in activities related or incidental thereto, in connection with the
issuance by such special purpose entity (or by another special purpose
entity that acquires financial assets directly or indirectly from such
special purpose entity) of beneficial interests.
(b) The FDIC shall not, by exercise of its authority to disaffirm
or repudiate contracts under 12
U.S.C. 1821(e), reclaim, recover, or recharacterize as property
of the institution or the receivership any financial assets transferred
by an insured depository institution in connection with a
securitization or participation, provided that such transfer meets all
conditions for sale accounting treatment under generally accepted
accounting principles, other than the "legal isolation" condition
as it applies to institutions for which the FDIC may be appointed as
conservator or receiver which is addressed by this section.
(c) Paragraph (b) of this section shall not apply unless the
insured depository institution received adequate consideration for the
transfer of financial assets at the time of the transfer, and the
documentation effecting the transfer of financial assets reflects the
intent of the parties to treat the transaction as a sale, and not as a
secured borrowing, for accounting purposes.
(d) Paragraph (b) of this section shall not be construed as
waiving, limiting, or otherwise affecting the power of the FDIC, as
conservator or receiver, to disaffirm or repudiate any agreement
imposing continuing obligations or duties upon the insured depository
institution in conservatorship or receivership.
(e) Paragraph (b) of this section shall not be construed as
waiving, limiting or otherwise affecting the rights or powers of the
FDIC to take any action or to exercise any power not specifically
limited by this section, including, but not limited to, any rights,
powers or remedies of the FDIC regarding transfers taken in
contemplation of the institution's
{{12-31-07 p.3088}}insolvency or with the intent to
hinder, delay, or defraud the institution or the creditors of such
institution, or that is a fraudulent transfer under applicable law.
(f) The FDIC shall not seek to avoid an otherwise legally
enforceable securitization agreement or participation agreement
executed by an insured depository institution solely because such
agreement does not meet the "contemporaneous" requirement of
sections 11(d)(9), 11(n)(4)(I), and 13(e) of the Federal Deposit
Insurance Act (12 U.S.C.
1821(d)(9),
(n)(4)(I),
1823(e).
(g) This section may be repealed or amended by the FDIC upon 30
days notice and opportunity for comment provided in the Federal
Register, but any such repeal or amendment shall not apply to any
transfers of financial assets made in connection with a securitization
or participation that was in effect before such repeal or modification.
[Codified to 12 C.F.R. § 360.6]
[Section 360.6 added at 65 Fed. Reg. 49191, August 11, 2000,
effective September 11, 2000]
§ 360.7 Post-insolvency interest.
(a) Purpose and scope. This section establishes rules
governing the calculation and distribution of post-insolvency interest
to creditors with proven claims in all FDIC-administered receiverships
established after June 13, 2002.
(b) Definitions. (1) Equityholder. The owner
of an equity interest in a failed depository institution, whether such
ownership is represented by stock, membership in a mutual association,
or otherwise.
(2) Post-insolvency interest. Interest calculated from
the date the receivership is established on proven creditor claims in
receiverships with surplus funds.
(3) Post-insolvency interest rate. For any calendar
quarter, the coupon equivalent yield of the average discount rate set
on the three-month Treasury bill at the last auction held by the United
States Treasury Department during the preceding calendar quarter, and
adjusted each quarter thereafter.
(4) Principal amount. The proven claim amount and any
interest accrued thereon as of the date the receivership is
established.
(5) Proven claim. A claim that is allowed by a
receiver or upon which a final non-appealable judgment has been entered
in favor of a claimant against a receivership by a court with
jurisdiction to adjudicate the claim.
(c) Post-insolvency interest distributions. (1)
Post-insolvency interest shall only be distributed following
satisfaction by the receiver of the principal amount of all creditor
claims.
(2) The receiver shall distribute post-insolvency interest at the
post-insolvency interest rate prior to making any distribution to
equityholders. Post-insolvency interest distributions shall be made in
the order of priority set forth in section 11(d)(11)(A) of the Federal
Deposit Insurance Act, 12 U.S.C. 1821(d)(11)(A).
(3) Post-insolvency interest distributions shall be made at such
time as the receiver determines that such distributions are appropriate
and only to the extent of funds available in the receivership estate.
Post-insolvency interest shall be calculated on the outstanding balance
of a proven claim, as reduced from time to time by any interim dividend
distributions, from the date the receivership is established until the
principal amount of a proven claim has been fully distributed but not
thereafter. Post-insolvency interest shall be calculated on a
contingent claim from the date such claim becomes proven.
(4) Post-insolvency interest shall be determined using a simple
interest method of calculation.
[Codified to 12 C.F.R. § 360.7]
[Section 360.7 added at 67 Fed. Reg. 34386, May 14, 2002, effective
June 13, 2002]
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