Federal Deposit Insurance Corporation October 16, 2012 – Federal Register Recent Federal Regulation Documents

The Federal Deposit Insurance Corporation (the ``FDIC'' or the ``Corporation'') is issuing a final rule (``Final Rule'') that implements part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank Act'' or the ``Act''), which permits the Corporation, as receiver for a financial company whose failure would pose a significant risk to the financial stability of the United States (a ``covered financial company''), to enforce contracts of subsidiaries or affiliates of the covered financial company despite contract clauses that purport to terminate, accelerate or provide for other remedies based on the insolvency, financial condition or receivership of the covered financial company. As a condition to maintaining these subsidiary or affiliate contracts in full force and effect, the Corporation as receiver must either: Transfer any supporting obligations of the covered financial company that back the obligations of the subsidiary or affiliate under the contract (along with all assets and liabilities that relate to those supporting obligations) to a bridge financial company or qualified third-party transferee by the statutory one-business-day deadline; or provide adequate protection to such contract counterparties. The final rule sets forth the scope and effect of the authority granted under the Dodd-Frank Act, clarifies the conditions and requirements applicable to the receiver, addresses requirements for notice to certain affected counterparties and defines key terms.