Contracts Adverse to Safety and Soundness of Insured Depository Institutions

요약

The Federal Deposit Insurance Corporation (FDIC) is withdrawing its proposed rule which would have implemented the statutory prohibition on contracts that adversely affect the safety or soundness of insured depository institutions. The statutory provision remains in place and unchanged. The FDIC has decided to withdraw the proposed rule because the existence of adverse contracts involving insured institutions has decreased considerably since the proposed rule was issued for public comment on April 1, 1991, because of the overwhelmingly negative comments received from the industry to the proposal, and because of an FDIC policy statement that recommends the withdrawal of proposed rules that have not been acted upon by the FDIC Board of Directors within nine months of the date of proposal. Many of the negative comments received in response to the proposal expressed the view that such a regulation would create unnecessary regulatory burden and that the Federal banking agencies already possess the necessary supervisory authority to deal with adverse contracts. Since the type of activity that the proposed rule was intended to eliminate (i.e., abuses involving contracts made by or on beha