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Financial Institution Letters

Assignment of Payments

Successor-In-Interest Contract

  • Assigns the right to a payment, or a portion thereof, to the financial institution. The quota holder/producer remains the buyout contract holder.

  • Terminates and transfers all rights and obligations of the buyout contract to the financial institution.
  • May begin with the fiscal year 2005 payment. However, limited to two assignees per year.
  • May not begin until the fiscal year 2006 payment. Financial institution must execute contract by November 1 st of the preceding year, in order to receive the subsequent January payment.

  • Revocable at any time with the consent of the financial institution.

  • May not be revoked.
  • Quota holder/producer is subject to the offset of payment provisions of the Debt Collection Improvement Act of 1996.
  • Quota holder/producer may not enter into a successor-in-interest contract if subject to an outstanding claim established by any agency of the United States at that time.

  • Annual payments made to the financial institution will be reduced by the amount the quota holder or producer owes to any agency of the United States at any time over the life of the assignment.
  • Annual payments made to the financial institution will be reduced by the amount the institution owes to any agency of the United States at any time over the life of the contract.
  • Subsequent actions or debts of the quota holder/producer will not affect the annual payments received by the financial institution after the rights in the contract are transferred to the institution.

  • The CCC will not make payments to the financial institution under an assignment if the producer is not in compliance with the wetlands and highly erodible land provisions and substance control provisions in federal law.
  • This is the case even if the failure to comply is associated with a property other than the one which generates the assignment payments.

  • The CCC will not make payments to a financial institution that is the successor-in-interest to a producer contract if the institution is not in compliance with the wetlands and highly erodible land provisions and substance control provisions found in federal law.
  • All or part of the payment stream may be assigned.
  • Must succeed to whole contract (partial successor-in-interest contracts are not allowed).

 

  • The CCC will allow the sale of a successor-in-interest contract to another party, but the number of successions has not yet been determined.



Last Updated 8/03/2005 communications@fdic.gov

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