FDIC Requests Public Comment On Legacy Loans Program
The Federal Deposit Insurance Corporation ("FDIC") has
requested public comments on all aspects of its proposal, announced
on March 23, 2009, to remove troubled "legacy loans" and
other assets from banks' and thrifts' balance sheets by
creating Public-Private Investment Funds ("PPIFs") to
See Enlisting Private Equity to Rescue "Legacy
Assets": Treasury Announces Public-Private Investment Funds
Structures, 21st Century Money, Banking & Commerce
Alert® (Mar. 25, 2009). The FDIC has announced its intention to
launch this program as quickly as possible. The
deadline for providing public comments is
Friday, April 10, 2009.
The FDIC request includes 17 multiple-part questions. The
request for comments and the preliminary program descriptions that
have been released indicate the great breadth and depth of the open
issues that must be resolved before the first PPIF is organized and
the first legacy loans are purchased.
Among the issues highlighted in the request for comments is the
fundamental question for private investors of what the relative
role of the government and private investors will be in the
selection and oversight of asset managers. In this regard, although
not addressed in any of the materials released to date, the FDIC
has indicated that Legacy Loan PPIFs would be subject to the
federal government's loan modification program.
The FDIC appears to be very receptive to receiving private
sector input to make the Legacy Loans Program as...
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