In a speech on resolution readiness, Acting Chairman Travis Hill said the Federal Deposit Insurance Corporation (FDIC) has revised how it implements its insured depository institution (IDI) resolution planning requirements in response to lessons from the 2023 bank failures, with an emphasis on preparing for a rapid sale rather than relying on bridge banks. The remarks also set out operational upgrades under way to improve the FDIC’s failed-bank marketing process, reduce costs to the Deposit Insurance Fund (DIF), and strengthen funding options for large receiverships. Under the IDI rule, April 2025 frequently asked questions (FAQs) waived the expectation that large IDIs build plans around an “identified strategy” with a bias toward a bridge bank, instead allowing filers to describe resolution strategies the FDIC could reasonably execute. The FAQs also pared back requirements for speculative scenario analysis and other elements viewed as low-value for executing an orderly resolution, while retaining a focus on capabilities such as standing up a virtual data room to support due diligence and competitive bidding. Hill said the FDIC is developing a proposal to amend the underlying rule, at minimum to codify the FAQs, and is examining overlap with Title I resolution planning, including how the IDI planning obligation should apply to firms using single point of entry or multiple point of entry strategies. Separately, the FDIC is upgrading its marketing toolkit and internal readiness, including more flexible transaction documentation, improvements to bidder communications and transparency (including on available financing), expanded information expectations for data rooms, a faster least-cost test model that can process bids in hours rather than days, and a planned reevaluation of bidder eligibility criteria. On receivership funding, Hill highlighted the scale and cost of Federal Reserve borrowings assumed in 2023 and said the FDIC is working with the Federal Financing Bank to enable faster securitization of assets assumed from large failed IDIs. The FDIC plans to pilot a pre-qualification process for nonbank bidders starting in January 2026, initially with firms that participated in the Republic First Bank failure bidding process and Signature Bank-related asset sales, with a public release of the process and application expected after pilot feedback. Hill also noted an Financial Stability Board Resolution Steering Group task force chaired by the FDIC to address challenges in executing bail-in of certain bonds held by U.S. investors, alongside work by the Securities and Exchange Commission, and described ongoing FDIC planning and multi-regulator exercises on central counterparty resolution readiness.
Federal Deposit Insurance Corporation 2025-10-15
Federal Deposit Insurance Corporation shifts large-bank resolution planning toward weekend sales and plans January 2026 nonbank bidder pre-qualification pilot
Acting Chairman Travis Hill announced that the FDIC has revised its insured depository institution resolution planning, emphasizing rapid sales over bridge banks after the 2023 bank failures. The FDIC is enhancing its failed-bank marketing process, reducing costs to the Deposit Insurance Fund, and improving funding options for large receiverships. Additionally, the FDIC plans to pilot a pre-qualification process for nonbank bidders and is working with the Federal Financing Bank to expedite asset securitization.