Resolution Plans Required for Insured Depository Institutions With $50 Billion or More in Total Assets, 3075-3088 [2012-1136]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION

[Federal Register Volume 77, Number 14 (Monday, January 23, 2012)]
[Rules and Regulations]
[Pages 3075-3088]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-1136]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 360

RIN 3064-AD59


Resolution Plans Required for Insured Depository Institutions 
With $50 Billion or More in Total Assets

AGENCY: Federal Deposit Insurance Corporation (``FDIC'').

ACTION: Final rule.

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SUMMARY: The FDIC is adopting this final rule (``Rule'') requiring an 
insured depository institution with $50 billion or more in total assets 
to submit periodically to the FDIC a contingent plan for the resolution 
of such institution in the event of its failure (``Resolution Plan''). 
The Rule establishes the requirements for submission and content of a 
Resolution Plan, as well as procedures for review by the FDIC. The Rule 
requires a covered insured depository institution (``CIDI'') to submit 
a Resolution Plan that should enable the FDIC, as receiver, to resolve 
the institution under Sections 11 and 13 of the Federal Deposit 
Insurance Act (``FDI Act''), 12 U.S.C. 1821 and 1823, in a manner that 
ensures that depositors receive access to their insured deposits within 
one business day of the institution's failure (two business days if the 
failure occurs on a day other than Friday), maximizes the net present 
value return from the sale or disposition of its assets and minimizes 
the amount of any loss to be realized by the institution's creditors. 
The Rule is intended to address the continuing exposure of the banking 
industry to the risks of insolvency of large and complex insured 
depository institutions, an exposure that can be mitigated with proper 
resolution planning.
    The Interim Final Rule, which preceded this Rule, was effective 
January 1, 2012,\1\ and remains in effect until superseded by this Rule 
on April 1, 2012.
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    \1\ 76 FR 58379 (September 21, 2011).

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DATES: The Rule is effective April 1, 2012.

FOR FURTHER INFORMATION CONTACT: John F. Simonson, Deputy Director, 
Office of Complex Financial Institutions, (202) 898-6681, Hashim 
Hamandi, Section Chief, Office of Complex Financial Institutions, (202) 
898-6884, Richard T. Aboussie, Associate General Counsel, (703) 562-
2452, David N. Wall, Assistant General Counsel, (703) 562-2440, Mark A. 
Thompson, Counsel, (703) 562-2529, Mark G. Flanigan, Counsel, (202) 
898-7426, or Shane Kiernan, Senior Attorney, (703) 562-2632.

SUPPLEMENTARY INFORMATION:

I. Background

    The FDIC is charged by Congress with the responsibility for 
insuring the deposits of banks and thrifts in the United States, and 
with serving as receiver of such institutions if those banks and 
thrifts should fail. As of September 30, 2011, the FDIC insured 
approximately $6.78 trillion in deposits in more than 7,445 depository 
institutions. To evaluate potential loss severity and to enable it to 
perform its resolution functions most efficiently, the FDIC is 
requiring each insured depository institution with $50 billion or more 
in total assets to submit periodically to the FDIC a Resolution Plan. 
Currently, 37 insured depository institutions are covered by the Rule. 
Those institutions held approximately $4.14 trillion in insured 
deposits or nearly 61 percent of all insured deposits as of September 
30, 2011.
    In implementing the deposit insurance program and in efficiently 
and effectively resolving failed depository institutions, the FDIC 
strengthens the stability of, and helps maintain public confidence in, 
the banking system in the United States. In its efforts to achieve this 
objective and to implement its insurance and resolution functions, the 
FDIC requires a comprehensive understanding of the organization, 
operation and business practices of insured depository institutions in 
the United States, with particular attention to the nation's largest 
and most complex insured depository institutions.
    To ensure that the FDIC can effectively carry out these core 
responsibilities, the Rule requires a limited number of the largest 
insured depository institutions to provide the FDIC with essential 
information concerning their structure, operations, business practices, 
financial responsibilities and risk exposures. The Rule requires these 
institutions to develop and submit detailed plans demonstrating how 
such insured depository institutions could be resolved in an orderly 
and timely manner in the event of receivership. The Rule also makes a 
critically important contribution to the FDIC's implementation of its 
statutory receivership responsibilities by providing the FDIC as 
receiver with the information it needs to make orderly and cost-
effective resolutions much more feasible. Based upon its experience 
resolving failed insured depository institutions (and in particular, 
large and complex insured depository institutions), the FDIC has 
concluded that Resolution Plans for large and complex insured 
depository institutions are essential for their orderly and least-cost 
resolution and the development of such plans should begin promptly.
    Since the recent financial crisis began in late 2008, financial 
authorities throughout the world have recognized and agreed that 
advance planning for the resolution of large, complex financial 
institutions is critical to minimizing the disruption that a failure

[[Page 3076]]

of such an institution may have as well as the costs of its resolution. 
At the 2009 Pittsburgh Summit, and in response to the crisis, the G20 
Leaders called on the Financial Stability Board (``FSB'') to propose 
possible measures to address the ``too big to fail'' and moral hazard 
concerns associated with systemically important financial institutions. 
Specifically, the G20 Leaders called for the development of 
``internationally consistent firm-specific contingency and resolution 
plans.'' The FSB continues its efforts to develop the international 
standards for contingency and resolution plans and to evaluate how to 
improve the capacity of national authorities to implement orderly 
resolutions of large and interconnected financial firms and 
periodically reports its progress to the G20 Leaders.\2\
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    \2\ See ``Progress in the Implementation of the G20 
Recommendations for Strengthening Financial Stability'' Reports of 
the Financial Stability Board to G20 Finance Ministers and Central 
Bank Governors dated February 15, 2011, and April 10, 2011.
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    The FSB's program has built on work undertaken by the Basel 
Committee on Banking Supervision's Cross-border Bank Resolution Group, 
co-chaired by the FDIC, since 2007. In its final Report and 
Recommendations of the Crossborder Bank Resolution Group, issued on 
March 18, 2010, the Basel Committee emphasized the importance of 
preplanning and the development of practical and credible plans to 
promote resiliency in periods of severe financial distress and to 
facilitate a rapid resolution should that be necessary. In its review 
of the financial crisis, the Report found that one of the main lessons 
was that the complexity and interconnectedness of large financial 
conglomerates made crisis management and resolutions more difficult and 
unpredictable.
    Similarly, the FSB's Principles for Cross-Border Cooperation on 
Crisis Management commit national authorities to ensure that firms 
develop adequate contingency plans, including information regarding 
group structure, and legal, financial and operational intra-group 
dependencies; the interlinkages between the firms and financial system 
(e.g., in markets and infrastructures) in each jurisdiction in which 
they operate; and potential impediments to a coordinated solution 
stemming from the legal frameworks and bank resolution procedures of 
the countries in which the firm operates. The FSB Crisis Management 
Working Group has recommended that supervisors ensure that firms are 
capable of supplying in a timely fashion the information that may be 
required by the authorities in managing a financial crisis. The FSB 
recommendations strongly encourage firms to maintain contingency plans 
and procedures for use in a resolution situation (e.g., factsheets that 
could easily be used by insolvency practitioners), and to review them 
regularly to ensure that they remain accurate and adequate. On July 19, 
2011, the FSB issued a public consultation on proposed measures to 
address systemic risk and moral hazard posed by systemically important 
financial institutions, which includes proposed measures for improved 
resolution planning by firms and authorities.\3\ The Rule supports and 
complements these international efforts.
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    \3\ See Financial Stability Board, ``Consultative Document: 
Effective Resolution of Systemically Important Financial 
Institutions--Recommendations and Timelines,'' 17 (July 19, 2011), 
available at https://www.financialstabilityboard.org/publications/r_110719.pdf (``An adequate, credible [recovery and resolution plan] 
should be required for any firm that is assessed by its home 
authority to have a potential impact on financial stability.'') 
Annex 5 of the Consultative Document sets out a comprehensive 
proposed framework and content for such plans.
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    In addition, Section 165(d) of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (the ``Dodd- Frank Act''), 12 U.S.C. 
5365(d), adopted July 21, 2010, mandates that each covered company 
periodically submit to the Board of Governors of the Federal Reserve 
System (``FRB''), the Financial Stability Oversight Council, and the 
FDIC the plan of such company for rapid and orderly resolution under 
the Bankruptcy Code in the event of material financial distress or 
failure (``DFA Resolution Plan''). This requirement applies to each 
nonbank financial company subjected to supervision by the Federal 
Reserve Board under Title I of the Dodd-Frank Act and each bank holding 
company with assets of $50 billion or more, including foreign bank 
holding companies with U.S. financial operations.
    The Rule is intended to complement the resolution plan requirements 
of the Dodd-Frank Act. The Rule requires each insured depository 
institution with $50 billion or more in total assets to submit 
periodically to the FDIC a contingent plan for the resolution by the 
FDIC, as receiver, of such institution under the Federal Deposit 
Insurance Act (``FDI Act'') in the event of the institution's failure. 
Currently, with the exception of three thrifts covered by the Rule, 
holding companies of each insured depository institution covered by the 
Rule are expected to file a DFA Resolution Plan. While a DFA Resolution 
Plan will describe the plan to resolve each parent holding company 
under the Bankruptcy Code, the Rule is focused on planning the 
resolution of the subsidiary insured depository institution, a 
resolution that will not be conducted under the Bankruptcy Code, but 
rather will be conducted under the receivership and liquidation 
provisions of the FDI Act.\4\ The Rule sets forth the elements that are 
expected to be included in an insured depository institution's 
Resolution Plan. The requirements for DFA Resolution Plans are provided 
in FRB and FDIC regulations relating thereto (``Section 165(d) 
rule'').\5\
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    \4\ Sections 11 and 13 of the FDI Act, 12 U.S.C. 1821 and 1823.
    \5\ See FRB and FDIC Final Rule: Resolution Plans Required, 76 
FR 67323 (November 1, 2011).
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    The FDI Act gives the FDIC broad authority to carry out its 
statutory responsibilities, and to obtain the information required by 
the Rule. The FDIC's roles as insurer and receiver require a distinct 
focus on potential loss severities, default risks, complexities in 
structure and operations, and other factors that impact risk to the 
Deposit Insurance Fund and the ability of the FDIC to conduct an 
orderly resolution. The authority to issue the Rule is provided by 
Section 9(a) Tenth of the FDI Act, 12 U.S.C. 1819(a) Tenth, which 
authorizes the FDIC to prescribe, by its Board of Directors, such rules 
and regulations as it may deem necessary to carry out the provisions of 
the FDI Act or of any other law that the FDIC is responsible for 
administering or enforcing. The FDIC also has authority to adopt 
regulations governing the operations of its receiverships pursuant to 
Section 11(d)(1) of the FDI Act. 12 U.S.C. 1821(d)(1). Collection of 
the information required by the Rule is also supported by the FDIC's 
broad authority to conduct examinations of depository institutions to 
determine the condition of the insured depository institution, 
including special examinations, 12 U.S.C 1820(b)(3).

II. Interim Final Rule: Summary of Comments

    The FDIC originally proposed the resolution plan rule through a 
Notice of Proposed Rulemaking (``NPR'') published in the Federal 
Register on May 17, 2010.\6\ The NPR solicited public comment on all 
aspects of the NPR. The comment period ended on July 16, 2010, and 
eight comments were received. On September 21, 2011, the

[[Page 3077]]

FDIC caused to be published in the Federal Register an Interim Final 
Rule (the ``IFR'').\7\ The FDIC invited public comment on all aspects 
of the IFR and posed specific questions to the public regarding the 
scope of coverage, definitions of terms used in the IFR, strategic 
analysis, governance, informational elements and process. The comment 
period ended on November 21, 2011.
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    \6\ 75 FR 27464, entitled '' Special Reporting, Analysis and 
Contingent Resolution Plans at Certain Large Depository 
Institutions'' (the ``Proposed Rule'').
    \7\ 76 FR 58379.
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    The FDIC received seven comment letters from individuals and 
banking organizations, as well as industry and trade groups 
representing the banking, insurance and financial services industry. 
Six of these comments specifically address provisions of the IFR. The 
comment letters generally expressed support for the broader goals of 
the IFR to require CIDIs to provide the FDIC with essential information 
concerning their structure, operations, business practices, financial 
responsibilities and risk exposures, and to develop and submit detailed 
plans demonstrating how such insured depository institutions could be 
resolved under the FDI Act in an orderly and timely manner in the event 
of receivership. Some comment letters expressed concern that the IFR 
did not conform closely enough with the Section 165(d) rule, and others 
suggested that the Rule more specifically describe certain information 
that a CIDI must provide. By and large, the comments received fit 
within several of the categories of questions posed by the FDIC to the 
public in the IFR. One comment addressed the FDIC's burden estimate. 
These comments are summarized below.

Scope

    The IFR requires each insured depository institution with $50 
billion or more in total assets to submit periodically to the FDIC a 
plan for the resolution of such institution in the event of its 
failure. The $50 billion in asset threshold was an increase from the 
$10 billion in asset threshold proposed in the NPR although the NPR 
also required the CIDI to be owned by a holding company with $100 
billion or more in assets. One commenter agreed that only insured 
depository institutions with $50 billion or more in assets should be 
subject to the Rule while those insured depository institutions with 
less than $50 billion in assets should not be because their holding 
company structures and affiliate relationships are simple enough that 
they would not impede resolution under the FDI Act.
    Another commenter advocated a coverage threshold using the 
aggregate assets of all consolidating and non-consolidating entities in 
the holding company group in order to mitigate the risk that assets are 
allocated among smaller entities to avoid being subject to the Rule. 
This commenter suggested that an insured depository institution should 
be covered if the group's aggregate assets exceed $50 billion.
    One commenter was critical of the inclusion of savings association 
subsidiaries of savings and loan holding companies because savings 
associations typically focus on consumer and retail lending rather than 
commercial banking and do not present the complexity and the kind of 
threat to the deposit insurance fund or financial system that the Rule 
attempts to address. This commenter suggests that the rule should be 
imposed only on savings associations in financial distress, if other 
factors present a threat to the deposit insurance fund or the economy, 
or if the parent company has been designated as a systemically 
important financial institution by the Financial Stability Oversight 
Council; or, alternatively, only if the savings association is over $50 
billion and receives a CAMELS rating of 3 or worse or its parent 
receives an equivalent low rating. Additionally, this commenter 
suggests that the FDIC modify the Rule in a manner that would base a 
subsidiary insured depository institution's duty to file a Resolution 
Plan upon the requirement that the subsidiary's parent financial 
company file a DFA Resolution Plan.

Strategic Analysis

    With respect to strategic analysis, one commenter suggested that 
the FDIC consider a recapitalization of a CIDI as an alternative to 
traditional resolution methods, believing that such a strategy would be 
more effective during financial panic than would be a liquidation of 
assets or sale to a third party pursuant to a traditional purchase and 
assumption agreement. The same commenter recommended eliminating the 
requirement that the CIDI demonstrate the resolution strategy as 
``least-costly'' because only the FDIC can make such a determination 
and it does not have to be made until failure. Further, according to 
this commenter, a requirement that the CIDI demonstrate that the 
strategy is least costly dissuades the CIDI from considering other 
resolution strategies as only one strategy could be ``least-cost.''
    The IFR requires that a Resolution Plan provide a detailed 
description of the processes the CIDI employs for assessing the 
feasibility of the plan under idiosyncratic and industry-wide stress 
scenarios. One commenter requests clarification of this terminology in 
light of the requirement that the Resolution Plan strategies should 
take into account that the failure of the CIDI may occur under 
baseline, adverse and severely adverse economic conditions. This 
commenter believes that the Rule's reference to ``idiosyncratic and 
industry-wide stress scenarios'' be deleted to avoid internal 
inconsistency and to better harmonize the relevant provisions of the 
Rule.
    Another commenter suggests that the Rule take into account the 
differences among organizations and the range of strategies that each 
may consider. This commenter requests that less complex institutions be 
given the ability to submit streamlined Resolution Plans tailored to 
nature and risk profile of the CIDI.
    The IFR allows a CIDI to submit its initial Resolution Plan 
assuming the baseline conditions only, or, if a baseline scenario is 
not then available, a reasonable substitute developed by the CIDI. One 
commenter believes that the FDIC should not allow a CIDI to submit its 
initial Resolution Plan assuming the baseline conditions only and 
recommends that CIDIs be required to assume adverse and severely 
adverse economic conditions for their initial Resolution Plans in order 
to increase confidence in, and the integrity of, the resolution 
planning process.
    One commenter recommends adopting language directing CIDIs to 
identify and discuss ``potential barriers to effective resolution and 
actions to mitigate these'' in order to conform to the FSB's key 
attributes of effective resolution regimes for financial institutions.

Governance

    One commenter suggests that the Rule clearly permit a committee, 
rather than a single ``senior management official,'' to be responsible 
for development, maintenance, implementation and filing of the 
Resolution Plan. This commenter suggests that the Rule clarify that it 
would be appropriate for the CIDI to divide such responsibilities among 
multiple senior management officials or assign them to a committee, and 
points out that the Section 165(d) rule recognizes that the 
responsibility need not be vested in an individual by referring to 
``senior management official(s)'' responsible for resolution planning.

[[Page 3078]]

Informational Elements

    The IFR sets forth a number of informational elements that a CIDI 
should include in its plan. One commenter notes that the IFR required a 
description of material effects that any material event may have on the 
Resolution Plan and summary of changes that are required to the 
Resolution Plan, whereas the Section 165(d) rule only requires an 
explanation of why the event may require changes. This commenter 
recommends that the FDIC not require more detailed information with the 
notice of material events than would be required under the Section 
165(d) rule.
    The IFR requires identification in the Resolution Plan of each 
payment, clearing and settlement system of which a CIDI is a member. A 
commenter suggests that the Rule require identification of ``material'' 
payment, clearing and settlement systems, and recommends that the Rule 
be conformed to the Section 165(d) rule, which limits disclosure to 
systems on which a covered company conducts a material number or value 
amount of trades or transactions.
    The same commenter recommends that the Rule qualify the common or 
shared personnel, facilities, or systems requirements so that the 
Resolution Plan only need identify ``key'' common or shared personnel, 
facilities, or systems. This commenter argues that, without a 
qualifier, the Rule would require exhaustive lists of personnel and 
systems that would be of little practical use to the FDIC. The 
commenter points out the limitation of the scope of a parallel 
informational requirement in the Section 165(d) rule, which requires 
identification of interconnections and interdependencies that, if 
disrupted, would materially affect funding or operations.
    This commenter also requests that the requirement to describe non-
U.S. components of the CIDI's structure and operations be limited to 
material or key components because it believes it would be more useful 
to focus on the assets, operations, interrelationships and exposures 
that are material to the resolution of the CIDI.
    Another commenter thought that the IFR overlooks contingent 
liabilities for correspondent banking and unfunded lending commitments 
to government subdivisions and social service agencies. This commenter 
believes that these entities would suffer if CIDI fails and the 
receiver repudiates its funding obligation, and such action could lead 
to public panic or distrust in the event that the agency is unable to 
find another source of liquidity. This commenter suggests that the 
reporting of unfunded commitments would enable FDIC to develop an 
action plan to mitigate the adverse effects resulting from the 
cessation of funding.

Process

    The IFR requires a CIDI to demonstrate its capability to promptly 
produce the information and data underlying its plan in a format 
acceptable to the FDIC. One commenter believes that this requirement 
would be better addressed through the FDIC's ongoing review of 
Resolution Plans than through a rule-based requirement, and points out 
how the Section 165(d) rule eliminated a similar data-production 
requirement in favor of a supervisory approach. This commenter also 
states that informational requirements are being developed and data 
capabilities are evolving, and such improvement and evolution should be 
part of the supervisory process.
    One commenter points out several date discrepancies between the IFR 
and the Section 165(d) rule. First, there is a difference in effective 
dates between the IFR, which is effective on January 1, 2012, and the 
Section 165(d) rule, which is effective on November 30, 2011. The 
commenter believes that the measurement date should be the same to 
ensure that any company subject to the Section 165(d) rule and any of 
its subsidiary insured depository institutions subject to the Rule will 
have the same initial and subsequent Resolution Plan submission dates. 
A change in size during the gap between effective dates could result in 
Resolution Plans under the two rules being due on different dates. 
Second, there is a discrepancy between the plan submission dates for an 
insured depository institution that becomes subject to the IFR after 
its effective date and a company that becomes subject to the Section 
165(d) rule after its effective date. Under the Section 165(d) rule, a 
company that becomes covered after the effective date must submit its 
initial plan by July 1 of the following year, provided that July 1 of 
the following year is at least 270 days after the date on which the 
company becomes covered. Under the IFR, an insured depository 
institution that that becomes covered after the effective date must 
submit its initial plan by July 1 of the following year, without any 
proviso ensuring that the CIDI have 270 days from the date it becomes 
covered to submit its plan. The commenter urges the FDIC to add a 
similar proviso to the Rule to ensure consistency between the rules and 
to avoid the potential for different submission dates for a company 
subject to the Section 165(d) rule and its CIDI subsidiary. Third, it 
is possible that an insured depository institution that becomes a CIDI 
after the effective date could have a different initial submission date 
than if it had been covered as of the effective date because it would 
presumably have to file on July 1 of the following year, rather than in 
accordance with the staggered schedule. The commenter suggests that the 
FDIC use its discretionary authority to permit a new CIDI additional 
time to submit its initial plan in these circumstances to avoid 
differential treatment of similarly situated insured depository 
institutions.
    One commenter points out that, under both the IFR and the Section 
165(d) rule, CIDIs and covered companies are required to file a notice 
within 45 days of any event, occurrence, change in conditions or 
circumstances or other change that results in, or could reasonably be 
foreseen to have, a material effect on the Resolution Plan. The Section 
165(d) rule provides that such notice is not required if the date by 
which the notice must be submitted is within 90 days of the annual 
Resolution Plan submission date, while the IFR only provides a 45-day 
window. The commenter requests that the two requirements be conformed.
    A commenter suggests the Rule provide that the FDIC will consult 
with the appropriate federal banking agency for the CIDI and its parent 
company before determining that a Resolution Plan is not credible. This 
commenter also suggests that the Rule provide that the FDIC will 
consult with the appropriate foreign supervisors, including the 
relevant home-country supervisor for the foreign-based parent of the 
CIDI, before issuing any notice of deficiencies, imposing any 
requirements or restrictions, or taking any other similar remedial 
action.
    One commenter states that, in determining whether a Resolution Plan 
is credible, the FDIC should consider whether the resolution strategy 
envisions breaking the entity into subcomponents for sale. This 
commenter believes that any Resolution Plan that excludes breakup as an 
option only perpetuates the risk that the Rule intends to mitigate.

Burden

    One commenter states that the burden on CIDIs whose parent company 
is not required to file a Resolution Plan under the Section 165(d) rule 
could be significant and likely exceeds the FDIC's published estimate. 
Although this commenter does not provide a specific

[[Page 3079]]

burden estimate, it anticipates that the resources required to produce 
a Resolution Plan is several times the FDIC's 7,200 hours estimate. The 
commenter believes the FDIC's estimate may be accurate for CIDIs, whose 
parent is filing a DFA Resolution Plan, but it does not account for the 
additional burden on savings associations whose parent would not be 
filing a DFA Resolution Plan.
    The FDIC has carefully considered the comments and has made 
appropriate revisions to the Rule as described below.

III. Section-by-Section Analysis of Rule

    Definitions. Section 360.10(b) defines certain terms, including 
``core business lines,'' ``critical services,'' ``covered insured 
depository institution,'' ``parent company,'' ``parent company 
affiliate'' and ``material entity,'' which are key definitions in the 
Rule.
    ``Core business lines'' means those business lines of the CIDI, 
including associated operations, services, functions and support that, 
in the view of the CIDI, upon failure would result in a material loss 
of revenue, profit, or franchise value. The core business lines of the 
CIDI are valuable assets of the CIDI. The Resolution Plan should 
provide a strategy for the sale of the core business lines. The Section 
165(d) rule contains a similar definition but, for the Section 165(d) 
rule the core business lines are determined from the perspective of the 
covered company rather than the CIDI. For example, the CIDI may be 
providing services to its holding company, such as payment services, 
that support a business line of its holding company, such as a 
brokerage service, that is not a core business line of the CIDI. In 
such example, payment services may be identified as a core business 
line of the CIDI, while its holding company identifies brokerage 
services as a business line in its DFA Resolution Plan.
    ``Covered insured depository institution'' means an insured 
depository institution with $50 billion or more in total assets, as 
determined based upon the average of the institution's four most recent 
Reports of Condition and Income or Thrift Financial Reports, as 
applicable to the insured depository institution. Although several 
commenters requested changes in the scope of insured depository 
institutions covered by the Rule, after consideration of those 
comments, the Rule has not been amended. The FDIC needs the information 
required by the Rule before an institution is in financial distress. 
The purpose of the Rule is to enable the FDIC to perform its resolution 
functions most efficiently through extensive planning in cooperation 
with the CIDI and to enhance its ability to evaluate potential loss 
severity if an institution fails. History instructs us that the 
financial condition of a large institution can deteriorate rapidly, and 
such deterioration is exacerbated in illiquid markets. Additionally, 
requiring all insured depository institutions of significant size to 
focus on resolution planning will focus attention on hidden or nascent 
deficiencies that healthy institutions may have.
    ``Critical Services'' means services and operations of the CIDI, 
such as servicing, information technology support and operations, human 
resources and personnel that are necessary to continue the day-to-day 
operation of the CIDI. The Resolution Plan should provide for the 
continuation and funding of critical services. For clarity and to avoid 
confusion, the term ``critical services'' differs substantially from 
the term ``critical operations'' as used in the Section 165(d) rule. 
The term ``critical operations'' is used to designate operations of a 
covered company the discontinuation of which would pose a threat to the 
financial stability of the United States. In contrast, the term 
``critical services'' is used in the Rule to mean those functions that 
must be kept operational during the resolution process to allow the 
receiver to conduct the resolution in an orderly and efficient manner.
    ``Parent company'' means the company that controls, directly or 
indirectly, an insured depository institution. In a multi-tiered 
holding company structure, parent company means the top-tier of the 
multi-tiered holding company only.
    ``Parent company affiliate'' means any affiliate of the parent 
company other than the CIDI and subsidiaries of the CIDI. The term is 
used in identifying the exposures or reliance that the CIDI has on 
entities in its affiliated group that are not owned or otherwise 
controlled by the CIDI. In a multi-tier holding company structure, the 
term includes all holding companies of the CIDI (except the top-tier 
holding company) and their affiliates (other than the top-tier holding 
company, the CIDI and subsidiaries of the CIDI).
    ``Material entity'' means a company that is significant to the 
activities of a critical service or core business line. For example, 
the legal entity utilized by the CIDI as the contracting entity for a 
core business line would be a material entity. Also, a subsidiary of 
the CIDI that provides a critical service would be a material entity.
    Resolution Plans to be submitted by the CIDI to the FDIC. Pursuant 
to Section 360.10(c), the initial filings will be staggered to 
correspond to the schedule of filings by parent companies under the 
Section 165(d) rule. This schedule also allows the FDIC to focus on the 
most complex or largest institutions first. In response to comments on 
the IFR, the date for calculating total nonbank assets in the Rule has 
been change to November 30, 2011. The Rule requires the first filing 
group, which consists of each CIDI whose parent company, as of November 
30, 2011, had $250 billion or more in total nonbank assets (or in the 
case of a parent company that is a foreign-based company, such 
company's total U.S. nonbank assets), to file their initial Resolution 
Plans on July 1, 2012. The Rule requires the second filing group, which 
consists of each CIDI not included in the first group whose parent 
company, as of November 30, 2011, had $100 billion or more in total 
nonbank assets (or, in the case of a parent company that is a foreign-
based company, such company's total U.S. nonbank assets) to file their 
initial Resolution Plans on or before July 1, 2013. The Rule requires 
the third filing group, which consists of the remaining CIDIs, to file 
their initial Resolution Plans on or before December 31, 2013. The Rule 
also provides that, on a case-by-case basis, the FDIC may extend, upon 
request, the implementation and updating time frames of the Rule.
    After the initial Resolution Plan is submitted, each CIDI is 
required to submit a new Resolution Plan annually on or before the 
anniversary date of the date for the submission of its initial plan.
    With respect to an insured depository institution that becomes a 
CIDI after the effective date of the Rule and in response to comments, 
the Rule was revised to coincide with the Section 165(d) rule's filing 
requirement for such an institution's parent. The Rule provides that an 
insured depository institution that becomes a CIDI after the effective 
date of the Rule shall submit its initial Resolution Plan no later than 
the next July 1 following the date the insured depository institution 
becomes a CIDI, provided such date occurs no earlier than 270 days 
after the date on which the insured depository institution became a 
CIDI.
    A CIDI is required to file a notice no later than 45 days after any 
event, occurrence, change in conditions or circumstances or change 
which results in, or could reasonably be foreseen to

[[Page 3080]]

have, a material effect on the Resolution Plan of the CIDI. The FDIC 
desires a notice only when an event results in, or could reasonably be 
foreseen to have, a material effect on the Resolution Plan of the CIDI 
such that the Resolution Plan would be ineffective or require material 
amendment to be effective. A notice is not required if an event does 
not result in, or could not reasonably be foreseen to have, a material 
effect on the Resolution Plan of the CIDI. In regard to what 
constitutes a material effect on the Resolution Plan, the effect on the 
Resolution Plan should be of such significance as to render the 
Resolution Plan ineffective, in whole or in part, until an update is 
made to the plan. A notice should describe the event, occurrence or 
change and explain why the event, occurrence or change may require 
changes to the resolution plan. One commenter noted that the IFR 
provision regarding notice of material event varied from the similar 
provision in the Section 165(d) rule and requested that the Rule be 
modified to be consistent with the Section 165(d) rule. The Rule has 
been modified to be consistent with the Section 165(d) rule with 
respect to both the content of the notice and the exception, i.e., 
under the Rule, a CIDI is not required to file a notice of material 
event within 90 days prior to the date on which it is required to file 
its annual resolution plan.
    Incorporation of data and other information from a Dodd-Frank Act 
resolution plan. The CIDI may incorporate data and other information 
from a DFA Resolution Plan filed by its parent company.
    Content of the Resolution Plan. Section 360.10(c)(2) requires each 
CIDI to submit a Resolution Plan that should enable the FDIC to resolve 
the CIDI in the event of its insolvency under the FDI Act in a manner 
that ensures that depositors receive access to their insured deposits 
within one business day of the institution's failure (two business days 
if the failure occurs on a day other than Friday), maximizes the net 
present value return from the sale or disposition of its assets and 
minimizes the amount of any loss realized by the creditors in the 
resolution in accordance with Sections 11 and 13 of the FDI Act, 12 
U.S.C. 1821 and 1823, and specifies the minimum content of the 
Resolution Plan. The Resolution Plan strategies should take into 
account that failure of the CIDI may occur under the baseline, adverse 
and severely adverse economic conditions developed by the FRB pursuant 
to 12 U.S.C. 5365(i)(1)(B); provided, however, a CIDI may submit its 
initial Resolution Plan assuming the baseline conditions only, or, if a 
baseline scenario is not then available, a reasonable substitute 
developed by the CIDI. While one commenter suggested that a CIDI's 
first iteration of a Resolution Plan should assume a baseline, adverse 
and severely adverse economic conditions, the FDIC recognizes the 
burden that the Rule imposes on CIDIs and the challenge that CIDIs face 
in preparing their initial Resolution Plans. To reduce this burden, the 
FDIC is requiring that feasibility for initial Resolution Plans be 
assessed under only baseline economic condition scenarios. Subsequent 
Resolution Plans must assess feasibility under adverse and severely 
adverse economic condition scenarios as well.
    The Resolution Plan should include an executive summary that 
summarizes the key elements of the CIDI's strategic plan for resolution 
under the FDI Act in the event of its insolvency. After the CIDI files 
its initial plan, each annual Resolution Plan should also describe 
material events, such as acquisitions, sales, litigation and 
operational changes, since the most recently filed plan that may have a 
material effect on the plan, material changes to the CIDI's Resolution 
Plan from its most recently filed plan, and any actions taken by the 
CIDI since filing of the previous plan to improve the effectiveness of 
its Resolution Plan or remediate or otherwise mitigate any material 
weaknesses or impediments to the effective and timely execution of the 
Resolution Plan.
    The Resolution Plan should provide the CIDI's, parent company's, 
and affiliates' legal and functional structures and identify core 
business lines. A mapping of core business lines, including material 
asset holdings and liabilities related thereto, to material entities 
should be provided that identifies which legal entities are utilized in 
the conduct of such business line. The Resolution Plan should include a 
discussion of the CIDI's overall deposit activities including, among 
other things, unique aspects of the deposit base or underlying systems 
that may create operational complexity for the FDIC or result in 
extraordinary resolution expenses in the event of failure and a 
description of the branch organization, both domestic and foreign. Key 
personnel tasked with managing core business lines and deposit 
activities and the CIDI's branch organization should be identified.
    The Resolution Plan should identify critical services and providers 
of critical services. A mapping of critical services to material 
entities and core business lines should be provided that identifies 
which legal entities are providing the critical services and which 
business lines are utilizing the critical services. The Resolution Plan 
should describe the CIDI's strategy for continuing critical services in 
the event of the CIDI's failure. When critical services are provided by 
the parent company or a parent company affiliate, the Resolution Plan 
should describe the CIDI's strategy for continuing critical services in 
the event of the parent company's or parent company affiliate's 
failure. The ability of each parent company affiliate providing 
critical services to function on a stand-alone basis in the event of 
the parent company's failure should be assessed.
    The Resolution Plan should identify the elements or aspects of the 
parent company's organizational structure, the interconnectedness of 
its legal entities, the structure of legal or contractual arrangements, 
or its overall business operations that would, in the event the CIDI 
were placed in receivership, diminish the CIDI's franchise value, 
obstruct its continued business operations or increase the operational 
complexity to the FDIC of resolution of the CIDI. One commenter 
suggested that the Rule require the CIDI to identify potential barriers 
or other obstacles to an orderly resolution of the CIDI. The Rule now 
provides that the CIDI identify potential barriers or other material 
obstacles to an orderly resolution of the CIDI, interconnections and 
inter-dependencies that hinder the timely and effective resolution of 
the CIDI, and include the remediation steps or mitigating responses 
necessary to eliminate or minimize such barriers or obstacles.
    The Resolution Plan should provide a strategy to unwind or separate 
the CIDI and its subsidiaries from the organizational structure of its 
parent company in a cost-effective and timely fashion. The Resolution 
Plan should also describe remediation or mitigating steps that can be 
taken to eliminate or mitigate obstacles to such separation.
    The Resolution Plan should provide a strategy for the sale or 
disposition of the deposit franchise, including branches, core business 
lines and major assets of the CIDI in a manner that ensures that 
depositors receive access to their insured deposits within one business 
day of the institution's failure (two business days if the failure 
occurs on a day other than Friday), maximizes the net present value 
return from the sale or disposition of such assets and minimizes the 
amount of any loss realized in the resolution of cases. The Resolution 
Plan should also describe how the strategies for the separation of the 
CIDI and its subsidiaries from its

[[Page 3081]]

parent company's organization and sale or disposition of deposit 
franchise, core business lines and major assets can be demonstrated to 
be the least costly to the Deposit Insurance Fund of all possible 
methods for resolving the CIDI as required by Section 13(c)(4)(A) of 
the FDI Act, 12 U.S.C. 1823(c)(4)(A). One commenter suggested that the 
Rule should not require the CIDI to demonstrate a strategy is least 
costly ex ante. The Rules requires the CIDI to propose reasonable 
resolution options and demonstrate how one is least costly relative to 
liquidation or other resolution methods. A CIDI can demonstrate a 
selected strategy is least costly by offering a range of transactions 
and be ensuring that the transactions are offered broadly to the 
market, competitive bids are taken and bids are evaluated carefully. 
The CIDI can apply those strategies, or others it may develop, for 
demonstrating that the option ultimately selected will be least costly.
    Among potential strategies for the payment of depositors that 
should be considered are: (a) A cash payment of insured deposits,\8\ 
(b) a purchase and assumption transaction with an insured depository 
institution to assume insured deposits, (c) a purchase and assumption 
transaction with an insured depository institution to assume all 
deposits, (d) a purchase and assumption transaction with multiple 
insured depository institutions in which branches are broken up and 
sold separately in order to maximize franchise value, and (e) transfer 
of insured deposits to a bridge institution chartered to assume such 
deposits, as an interim step prior to the purchase of the deposit 
franchise and assumption of such deposits by one or more insured 
depository institutions.\9\
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    \8\ This task could be accomplished through the exercise of 
FDIC's authority to temporarily operate a new depository institution 
under Section 11(m) of the FDI Act, 12 U.S.C. 1821(m).
    \9\ A bridge depository institution is a new, temporary, full-
service insured depository institution controlled by the FDIC. It is 
designed to ``bridge'' the gap between the failure of an insured 
depository institution and the time when the FDIC can implement a 
satisfactory acquisition by a third party. Section 11(n) of the FDI 
Act, 12 U.S.C. 1821(n).
---------------------------------------------------------------------------

    Among potential strategies for the sale of core business lines and 
assets that should be considered are: (a) Retention of some or all of 
the assets in receivership, to be marketed broadly to eligible 
purchasers, including insured depository institutions as well as other 
interested purchasers, (b) sale of all or a portion of the core 
business lines and assets in a purchase and assumption agreement, to 
one or more insured depository institutions, and (c) transfer of all or 
a portion of the core business lines and assets to a bridge institution 
chartered to continue operating the core business lines and service the 
assets transferred to it, as an interim step prior to the sale of such 
core business lines and assets through appropriate marketing 
strategies.\10\
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    \10\ One significant benefit of using the bridge depository 
institution relates to qualified financial contracts. Qualified 
financial contracts are not subject to either the ipso facto rule or 
the 90-day stay on enforcement of contracts in default. However, the 
FDI Act precludes a counterparty from terminating a qualified 
financial contract solely by reason of the appointment of a receiver 
for a insured depository institution (a) until 5 p.m. (Eastern time) 
on the business day following the date of appointment; or (b) after 
the counterparty has received notice that the contract has been 
transferred to a solvent financial institution, including a bridge 
insured depository institution.
---------------------------------------------------------------------------

    In developing a resolution strategy, each CIDI may utilize one or 
more of the methods described above, but is not limited to these 
methods. As suggested by one commenter, a CIDI may consider a post-
appointment recapitalization in its Resolution Plan and a CIDI should 
address this option if it believes a recapitalization would be among 
the resolution options that are least costly to the deposit insurance 
fund. Another commenter suggested a breakup of an institution should 
also be considered. A breakup is a legitimate resolution method and a 
CIDI may consider that as a resolution option. The resolution strategy 
should be tailored to the size, complexity and risk profile of the 
institution.
    In addition to the strategic analyses described above, the 
Resolution Plan should provide a detailed description of the processes 
the CIDI employs for determining the current market values and 
marketability of core business lines and material asset holdings, 
assessing the feasibility of the CIDI's plans, under baseline, adverse 
and severely adverse economic condition scenarios for executing any 
sales, divestitures, restructurings, recapitalizations, or similar 
actions contemplated in the Resolution Plan, and assessing the impact 
of any sales, divestitures, restructurings, recapitalizations, or other 
similar actions on the value, funding and operations of the CIDI and 
its core business lines. This information will allow the FDIC to 
understand the basis for the valuations included in the Resolution Plan 
and to consider how those processes could be utilized in a resolution.
    Major counterparties should be identified. The CIDI should describe 
the interconnections, interdependencies and relationships with such 
major counterparties and analyze whether the failure of each major 
counterparty would likely have an adverse impact on or result in the 
material financial distress or failure of the CIDI. The Resolution Plan 
should describe any material off-balance-sheet exposures (including 
unfunded commitments, guarantees and contractual obligations) of the 
CIDI and those exposures should be mapped to core business lines.
    The Resolution Plan should identify and describe processes used by 
the CIDI to determine to whom the CIDI has pledged collateral, identify 
the person or entity that holds such collateral, and identify the 
jurisdiction in which the collateral is located; and if different, the 
jurisdiction in which the security interest in the collateral is 
enforceable against the CIDI.
    The Resolution Plan should describe the practices of the CIDI and 
its core business lines related to the booking of trading and 
derivative activities. Each system on which the CIDI conducts a 
material number or value amount of trades should be identified. Each 
trading system should be mapped to the CIDI's legal entities and core 
business lines. The Resolution Plan should identify material hedges of 
the CIDI and its core business lines related to trading and derivative 
activities, including a mapping to legal entity. Hedging strategies of 
the CIDI should be described.
    An unconsolidated balance sheet for the CIDI and a consolidating 
schedule for all material entities that are subject to consolidation 
with the CIDI should be provided. Amounts attributed to entities that 
are not material may be aggregated on the consolidating schedule. 
Financial statements for material entities should be provided. When 
available, audited financial statements should be provided.
    The Resolution Plan should identify each payment, clearing and 
settlement system of which the CIDI, directly or indirectly, is a 
member. Membership in each such system should be mapped to the CIDI's 
legal entities and core business lines. Systems that are immaterial in 
resolution planning, such as a local check clearing house, do not need 
to be identified.
    The Resolution Plan should provide detailed descriptions of the 
funding, liquidity and capital needs of, and resources available to, 
the CIDI and its material entities, which should be mapped to core 
business lines and critical services. The Resolution Plan should also 
describe the material components of the liabilities of the CIDI and its 
material entities and identify types and amounts of short-term and 
long-term liabilities by type and term to

[[Page 3082]]

maturity, secured and unsecured liabilities and subordinated 
liabilities.
    The Resolution Plan should describe any material affiliate funding 
relationships, accounts, and exposures, including terms, purpose, and 
duration, that the CIDI and any of its subsidiaries have with its 
parent or any parent company affiliate. All material affiliate 
financial exposures, claims or liens, lending or borrowing lines and 
relationships, guaranties, asset accounts, deposits, or derivatives 
transactions should be described. The description should clearly 
identify the nature and extent to which parent company or parent 
company affiliates serve as a source of funding to the CIDI, the terms 
of any contractual arrangements, including any capital maintenance 
agreements, the location of related assets, funds or deposits and the 
mechanisms by which funds can be downstreamed from the parent company 
to the CIDI and its subsidiaries.
    The Resolution Plan should describe systemically important 
functions that the CIDI, its subsidiaries and affiliates provide, 
including the nature and extent of the institution's involvement in 
payment systems, custodial or clearing operations, large sweep 
programs, and capital markets operations in which it plays a dominant 
role. Critical vulnerabilities, estimated exposure and potential 
losses, and why certain attributes of the businesses detailed in 
previous sections could pose a systemic risk to the broader economy 
should be discussed.
    The Resolution Plan should describe material components of the 
CIDI's structure that are based or located outside the United States, 
including foreign branches, subsidiaries and offices. Details should be 
provided on the location and amount of foreign deposits and assets. The 
Resolution Plan should discuss the nature and extent of the CIDI's 
cross-border assets, operations, interrelationships and exposures which 
should be mapped to legal entities and core business lines.
    The Resolution Plan should provide a detailed inventory and 
description of the key management information systems and applications, 
including systems and applications for risk management, accounting, and 
financial and regulatory reporting, used by the CIDI and its 
subsidiaries. The legal owner or licensor of the systems should be 
identified. The use and function of the system or application should be 
described. A listing of service level agreements and any software and 
systems licenses or associated intellectual property related thereto 
should be provided. Any disaster recovery or other backup plans should 
be identified and described. The Resolution Plan should identify common 
or shared facilities and systems as well as personnel necessary to 
operate such facilities and systems. Personnel may be identified by a 
department name or other identifier (for example, the accounting 
department personnel) when the names of such personnel are retrievable, 
upon request, using such identifier. The Resolution Plan should also 
describe the capabilities of the CIDI's processes and systems to 
collect, maintain, and report the information and other data underlying 
the Resolution Plan to management of the CIDI and, upon request to the 
FDIC. Furthermore, the Resolution Plan should describe any 
deficiencies, gaps or weaknesses in such capabilities and the actions 
the CIDI intends to take to promptly address such deficiencies, gaps, 
or weaknesses, and the time frame for implementing such actions.
    The Resolution Plan should include a detailed description of how 
resolution planning is integrated into the corporate governance 
structure and processes of the CIDI, the CIDI's policies, procedures, 
and internal controls governing preparation and approval of the 
Resolution Plan, and the identity and position of the senior management 
official of the CIDI who is primarily responsible and accountable for 
the development, maintenance, implementation, and filing of the 
Resolution Plan and for the CIDI's compliance with this section. One 
commenter suggested that the Rule be modified to make clear that it 
would be appropriate if a CIDI were to divide responsibilities among 
multiple senior management officials or assign them to a committee. 
While it may be appropriate to divide up the responsibilities, to 
assure appropriate oversight, the primary responsibility and 
accountability for the development, maintenance, implementation, and 
filing of the Resolution Plan and for the CIDI's compliance with this 
section should be assigned to one senior management official.
    The Resolution Plan should describe the nature, extent, and results 
of any contingency planning or similar exercise conducted by the CIDI 
since the date of the most recently filed Resolution Plan to assess the 
viability of or improve the Resolution Plan.
    The Resolution Plan should identify and discuss any other material 
factor that may impede the resolution of the CIDI.
    Approval by CIDI's Board of Directors. The CIDI's board of 
directors must approve the Resolution Plan. Such approval shall be 
noted in the Board minutes.
    Review of Resolution Plan. The FDIC desires to work closely with 
CIDIs in the development of their Resolution Plans and is dedicating 
staff for that purpose. The FDIC expects the review process to evolve 
as CIDIs gain more experience in preparing their Resolution Plans. The 
FDIC recognizes that plans will vary by institution and, in their 
evaluation of plans, will take into account variances among 
institutions in their core business lines, critical operations, foreign 
operations, capital structure, risk, complexity, financial activities 
(including the financial activities of their subsidiaries), size and 
other relevant factors. Each Resolution Plan, however, must be 
credible. A Resolution Plan is credible if its strategies for resolving 
the CIDI, and the detailed information required by this section, are 
well-founded and based on information and data related to the CIDI that 
are observable or otherwise verifiable and employ reasonable 
projections from current and historical conditions within the broader 
financial markets.
    Because each Resolution Plan is expected to be unique, the FDIC 
encourages CIDIs to ask questions and, if so desired, to arrange a 
meeting with the FDIC. The FDIC expects the initial Resolution Plan 
will provide the foundation for developing more robust annual 
Resolution Plans.
    After receiving a Resolution Plan, the FDIC will determine whether 
the submitted plan satisfies the minimum informational requirements of 
this section. If the FDIC determines that a Resolution Plan is 
informationally incomplete or that additional information is necessary 
to facilitate review of the Resolution Plan, the FDIC will return the 
Resolution Plan to the CIDI and inform the CIDI in writing of the 
area(s) in which the plan is informationally incomplete or with respect 
to which additional information is required. The CIDI must resubmit an 
informationally complete Resolution Plan or such additional information 
as requested to facilitate review of the Resolution Plan no later than 
30 days after receiving the notice described in preceding sentence, or 
such other time period as the FDIC may determine.
    Upon acceptance of a Resolution Plan as complete, the FDIC will 
review the Resolution Plan in consultation with the appropriate Federal 
banking agency for the CIDI and its parent company. If, after 
consultation with the appropriate Federal banking agency for the CIDI, 
the FDIC determines that the Resolution Plan of a CIDI submitted is not 
credible,

[[Page 3083]]

the FDIC will notify the CIDI in writing of such determination. Any 
notice provided under this paragraph will identify the aspects of the 
Resolution Plan that the FDIC determines to be deficient.
    Within 90 days of receiving a notice of deficiencies issued 
pursuant to the preceding paragraph, or such shorter or longer period 
as the FDIC may determine, a CIDI must submit a revised Resolution Plan 
to the FDIC that addresses the deficiencies identified by the FDIC and 
discusses in detail the revisions made to address such deficiencies.
    Upon a written request by a CIDI, the FDIC may extend any time 
period under the Rule. Each extension request shall be in writing and 
describe the basis and justification for the request.
    Implementation Matters. In order to allow evaluation of the 
Resolution Plan, each CIDI must provide the FDIC such information and 
access to such personnel of the CIDI as the FDIC determines is 
necessary to assess the credibility of the Resolution Plan and the 
ability of the CIDI to implement the Resolution Plan. The FDIC will 
rely to the fullest extent possible on examinations conducted by or on 
behalf of the appropriate Federal banking agency for the relevant 
company.
    The CIDI's ability to produce the information and data underlying 
its resolution rapidly and on demand is a vital element in a credible 
Resolution Plan. While one commenter believes that this requirement 
would be better addressed through the FDIC's ongoing review of 
Resolution Plans than through a rule-based requirement, without up-to-
date information on the CIDI, the FDIC, as receiver, would be hampered 
in implementing the Resolution Plan. Therefore, within a reasonable 
period of time, as determined by the FDIC, after the filing of its 
initial Resolution Plan, the CIDI must demonstrate its capability to 
produce promptly, in a time frame and format acceptable to the FDIC, 
accurate and verifiable data underlying the key aspects of Resolution 
Plan. The FDIC understands that the capability to produce the data 
underlying the key aspects of the Resolution Plan will vary by CIDI 
and, therefore, intends to review and discuss the CIDI's plans to 
remedy deficiencies as part of their review of a CIDI's initial 
Resolution Plan. In addition, the Rule has been modified to require the 
FDIC shall consult with the appropriate Federal banking agency for the 
CIDI before any finding that the CIDI's capability to produce the 
information and data underlying its resolution plan is unacceptable.
    Notwithstanding the general requirements of this section, on a 
case-by-case basis, the FDIC may extend, upon notice, the 
implementation and updating time frames for all or part of the 
requirements of this section. The FDIC may also, upon application of a 
CIDI, exempt a CIDI from one or more of the requirements of this 
section.
    No limiting effect on the FDIC as receiver. No Resolution Plan 
provided pursuant to the Rule shall be binding on the FDIC as 
supervisor, deposit insurer or receiver for a CIDI or otherwise require 
the FDIC to act in conformance with such plan.
    Confidentiality of Information Submitted Pursuant to this Section. 
Several commenters requested that the Resolution Plans be treated as 
exempt from disclosure under the Freedom of Information Act (``FOIA''). 
The FDIC is aware of and sensitive to the significant concerns 
regarding confidentiality of Resolution Plans. The Rule contemplates 
and requires the submission of highly detailed, internal proprietary 
information of CIDIs. This is the type of information that CIDIs would 
not customarily make available to the public and that an agency 
typically would have access to and could review as part of the 
supervisory process in assessing, for example, the safety and soundness 
of a regulated institution. In the FDIC's view, release of this 
information would impede the quality and extent of information provided 
by CIDIs and could significantly impact the FDIC's efforts to encourage 
effective and orderly resolution of the CIDIs in a crisis.
    Under the Rule, the confidentiality of Resolution Plans is to be 
assessed in accordance with the applicable exemptions under the FOIA, 5 
U.S.C. 552(b), and the FDIC's Disclosure of Information Rule, 12 CFR 
part 309. The FDIC certainly expects that large portions of the 
submissions will contain or consist of ``trade secrets and commercial 
or financial information obtained from