| TO: |
CHIEF
EXECUTIVE OFFICER
|
| SUBJECT: |
Rescission
of the FDIC Statement of Policy on Retail
Repurchase Agreements
|
The
FDIC Board of Directors has rescinded the FDIC
Statement of Policy on Retail Repurchase Agreements.
A copy of the Federal Register notice is attached.
The Government Securities Act of 1986 and the
Interagency Statement on Retail Sales of Nondeposit
Investment Products (FIL-9-94) continue to apply
to retail repurchase agreements. The issuance
of retail repurchase agreements also has implications
under the federal securities laws. Banks should,
therefore, consult legal counsel before engaging
in retail repurchase activities. At a minimum,
banks should continue to disclose that a retail
repurchase agreement is not a deposit and is
not insured by the FDIC. Disclosure should also
include the nature and terms of the retail repurchase
agreement, including a clear delineation of
the rights and liabilities of the parties to
the agreement. In addition, banks should explain
that the retail repurchase agreement is subject
to default risk. For more information, please
contact your Division of Supervision Regional
Office.
Attachment
Distribution: FDIC-Supervised Banks (Commercial and Savings) Note: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, N.W., Room 100, Washington, D.C. 20434 ((703) 562-2200) |
FIL-107-96