US Federal Deposit Insurance Corporation Announces Modifications To Its Statement Of Policy Regarding Section 19 Of The Federal Deposit Insurance Act

Author:Shearman & Sterling LLP
Profession:Shearman & Sterling LLP

On August 20, 2018, the U.S. Federal Deposit Insurance Corporation issued modifications to its Statement of Policy with respect to Section 19 of the Federal Deposit Insurance Act, which (among other things) prohibits persons with convictions for certain criminal offenses, or those who have entered into pretrial diversion or similar programs with respect to the same, from participating in the affairs of a FDIC-insured financial institution without prior approval of the FDIC. This prohibition extends to individuals who are or would become institution-affiliated parties, individuals who directly or indirectly control or own an insured depository institution or individuals who participate directly or indirectly in the conduct of the affairs of an insured depository institution. In order to obtain approval from the FDIC, the financial institution or, in certain instances, the affected individual must file an application with the FDIC. The modifications expand the de minimis exception, for which the FDIC's consent is considered automatically granted without the filing of an application, to include, subject to certain additional requirements and limitations, issuance of insufficient funds checks of moderate aggregate value (less than $1,000); small dollar, simple...

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