Resolving Financial Institution Failures
During 2004, the FDIC resolved three BIF-insured institution failures
with total assets of $150 million, and one SAIF - insured institution
failure with total assets of $15 million. In all cases, the target time
frame was met for giving depositors access to their funds. (See the
accompanying table below for details about liquidation activities.)
Protecting Insured Depositors Through Asset Marketing
The FDICs ability to attract healthy FDIC-insured institutions
to assume deposits and purchase the assets of failed banks and
savings associations ensures that depositors have prompt access
to their insured deposits, minimizes the disruption to the customers
and the community, and allows a fair portion of the failed institutions
assets to be returned to the private sector almost immediately.
Assets remaining after the resolution transaction are liquidated by
the FDIC in an orderly manner, and the proceeds are used to pay
creditors and uninsured depositors (depositors whose accounts
exceed the $100,000 deposit insurance limits), and to reimburse
the insurance fund that funded the resolution transaction.
Customer Service Center
In order to help consumers needing assistance with matters arising
from failed financial institutions, the FDIC operates a Customer
Service Call Center with staff dedicated to handling records research
and collateral releases. During 2004, the FDIC staff responded to
36,791 inquiries. The records research staff reviews the historical
records of failed financial institutions in order to answer customer
questions on deposit accounts, loan transaction histories, tax suits
for delinquent real estate and other issues. The collateral release
staff researches and determines ownership of collateral securing
loans of failed financial institutions in order to provide a release
of lien, assignment or reconveyance to the borrower. This staff
successfully handled 13,494 collateral release inquiries in 2004.
The Customer Service Call Center handled 76,217 calls asking for
information or assistance. The FDIC Customer Service Center also
supported the Federal Emergency Management Agency (FEMA) in
its effort to help the people affected by hurricanes in Florida and
other parts of the country. More than 100 FDIC employees assisted
FEMA in fielding calls and processing FEMA applications associated
with these emergencies.
Receivership Terminations
The FDIC, as receiver, manages the receivership estate and the
subsidiaries of failed financial institutions with the goal of achieving
an expeditious and orderly termination. The oversight and prompt
termination of receiverships help to preserve value for the uninsured
depositors and creditors by reducing overhead and other holding
costs. For that reason, the FDIC has established a target of
terminating 75 percent of receiverships within three years of
the failure date. This goal was met at year-end 2004, with only
one of four 2001 receiverships still active. The single remaining
receivership could not be terminated due to the existence of
ongoing professional liability litigation and other impediments.