Before acquiring an investment, and periodically thereafter, an insured state bank and an insured state savings association must determine that an issuer has adequate capacity to meet all financial commitments under the security for the projected life of the security.
An issuer has adequate capacity to meet a financial commitment if the issuer presents a low risk of default and is likely to make full and timely repayment of principal and interest.
For purposes of this creditworthiness assessment, due diligence may include consideration of internal analyses, third-party research and analytics including external credit ratings, internal risk ratings, default statistics of external credit rating agencies, and other sources of information appropriate for the particular security.
The range and type of specific factors an institution should consider will vary depending on the particular type and nature of the security.
While the FDIC does not expect the OCC final rule or the FDIC final rule to materially change the scope of permissible investment securities, FDIC-supervised institutions are required to comply with the new rules.
Chief Executive Officer
Chief Financial Officer
Chief Investment Officer
Chief Risk Officer
OCC Final Rule: Alternatives to the Use of External Credit Ratings - PDF (PDF Help)
OCC Guidance: Due Diligence Requirements on Determining Whether Securities Are Eligible for Investment - PDF (PDF Help)
Eric Reither, Senior Capital Markets Specialist, Capital Markets Branch, at firstname.lastname@example.org or
(202) 898 3707
Kyle Hadley, Chief, Examination Support, Capital Markets Branch, at email@example.com or (202) 898-6532
FDIC Financial Institution Letters (FILs) may be accessed from the FDIC's Web site at
To receive FILs electronically, please visit
Paper copies may be obtained through the FDICís Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200).