Minority and Women Outreach
In 2011, the FDIC awarded 1,936 contracts. Of these, 558 contracts (29 percent) were awarded to Minority- and Women-Owned Businesses (MWOBs). The total dollar value of contracts awarded was $1.4 billion, of which $417 million (29 percent) was awarded to MWOBs, compared to 24 percent for all of 2010. In addition, engagements of Minority- and Women-Owned Law Firms (MWOLFs) were 30 percent of all engagements; total payments of $23 million to MWOLFs were 17 percent of all payments to outside counsel, compared to 10 percent for all of 2010. Policy modifications and contracting procedures have also resulted in the following changes and/or new initiatives:
- The Office of Minority and Women Inclusion (OMWI) participates on contracting Technical Evaluation Panels as a voting member.
- The FDIC entered into an MOU with the U.S. Small Business Administration to participate in their 8(a) Program in May 2011.
- The FDIC issues some contracts on a regional basis, or allows contractors to bid on a subset of a contract, rather than requiring them to bid on the entire contract, in order to allow MWOBs and small businesses to be more competitive.
In 2011, the FDIC exhibited at 18 procurement-specific trade shows to provide participants with the FDIC’s general contracting procedures, prime contractors’ contact information, and possible upcoming solicitations. Prime contractors are reminded of the FDIC’s emphasis on MWOB participation and are encouraged to subcontract or partner with MWOBs. The FDIC also exhibited at seven non-procurement events where contracting information was provided. In addition, the FDIC’s Legal Division was represented at trade shows where information was provided to MWOLFs about outside counsel opportunities and how to enter into co-counsel arrangements with majority firms.
FDIC personnel frequently met with MWOBs and MWOLFs in one-on-one meetings to discuss contracting opportunities at the FDIC. MWOBs are encouraged to register in the FDIC’s Contractor Resource List, which is an online self registration system that can be accessed through the FDIC’s website by any firm interested in doing business with the FDIC. FDIC personnel use the Contractor Resource List to develop source lists for solicitations.
As a result of the Asset Purchaser, Investor, and Minority Depository Institutions Outreach seminars conducted in 2010, the FDIC developed an Investor Match Program (IMP). The IMP was launched in September 2011 to encourage and facilitate interaction between small investors, asset managers and large investors to bring sources of capital together with the expertise needed to participate in structured sales transactions. Two structured transactions workshops for Minority- and Women-Owned Investors and Asset Managers were held in New York, New York and Irvine, California. Information was presented on how structured transactions are planned and conducted, including an introduction and overview on the structured transactions process and bidder qualification procedures. In addition, speakers highlighted some key features of transaction documents, their experience in dealing with tax-related issues, as well as post-bid management oversight and the document reporting process.
The FDIC piloted a Small Investor Program (SIP) in 2011 to increase MWOB participation in accordance with Section 342 of Dodd-Frank. The SIP is geared towards marketing distressed loans under the structured sales program to smaller investors, many of whom are MWOBs. The SIP offers smaller-sized asset pools than a typical multi-bank structured loan sale. For this program, a pool of loans would typically be drawn from a single receivership resulting in the loan pool being secured by collateral in a more concentrated geographical area than would be found in a traditional, nationwide or regional multibank structured sale. The FDIC also adjusted the structure of the SIP to make offerings more accessible to smaller investors and to increase participation while maintaining a level playing field for all investors.
In 2012, as the FDIC winds down the operations of failed institutions and liquidates residual assets, the FDIC will continue to encourage and foster diversity and the inclusion of MWOBs in its procurement activities, outside counsel engagements, and asset sales programs.
Protecting Insured Depositors
The FDIC’s ability to attract healthy institutions to assume deposits and purchase assets of failed banks and savings associations at the time of failure minimizes the disruption to customers and allows assets to be returned to the private sector immediately. Assets remaining after resolution are liquidated by the FDIC in an orderly manner, and the proceeds are used to pay creditors, including depositors whose accounts exceeded the insurance limit. During 2011, the FDIC paid dividends of $12 million to depositors whose accounts exceeded the insured limit(s).
Professional Liability and Financial
FDIC staff works to identify potential claims against directors, officers, fidelity bond insurance carriers, appraisers, attorneys, accountants, mortgage loan brokers, title insurance companies, securities underwriters, securities issuers, and other professionals who may have contributed to the failure of an IDI. Once a claim is deemed meritorious and cost-effective to pursue, the FDIC initiates legal action against the appropriate parties. During 2011, the FDIC recovered $240.4 million from professional liability claims/settlements. The FDIC also authorized lawsuits related to 30 failed institutions against 264 individuals for director and officer liability with damage claims of $5.1 billion. The FDIC also authorized 19 other lawsuits for fidelity bond, liability insurance, attorney malpractice, appraiser malpractice, and RMBS claims. There also were 189 residential mortgage malpractice and fraud lawsuits pending as of year-end. At the end of 2011, the FDIC’s caseload included 52 professional liability lawsuits (up from 27 at year-end 2010) and 1,811 open investigations (down from 2,750) at year-end 2010.
In addition, as part of the sentencing process for those convicted of criminal wrongdoing against institutions that later failed, a court may order a defendant to pay restitution or to forfeit funds or property to the receivership. The FDIC, working in conjunction with the U.S. Department of Justice, collected $3,633,426 from criminal restitutions and forfeitures during the year. At year-end, there were 5,192 active restitution and forfeiture orders (up from 4,895 at year-end 2010). This includes 294 FSLIC Resolution Fund orders, i.e., orders inherited from the Federal Savings and Loan Insurance Corporation on August 10, 1989, and orders inherited from the Resolution Trust Corporation on January 1, 1996.