IndyMac not done. FDIC allows nonbank bids

Discussion in 'Wall St. News' started by osorico, Nov 28, 2008.

  1. Part 1...

    FDIC Expands Bidder List for Troubled Institutions
    Plan Allows Those Without a Bank Charter to Participate in the Process

    November 26, 2008

    The FDIC is establishing a modified bidder qualification process to expand the pool of qualified bidders for the deposits and assets of failing depository institutions. The process will allow interested parties that do not currently have a bank charter to participate in the bid process through which failing depository institutions are resolved.

    The FDIC is responsible for ensuring that failing institutions are resolved in a manner that will result in the least cost to the Deposit Insurance Fund and minimal disruption to the financial system. In order to achieve this result, the FDIC markets the deposits and assets of a failing institution to known, qualified, and interested potential bidders. The FDIC recognizes that investors not organized as an FDIC insured depository institution or holding company may potentially be interested in bidding to purchase a failing institution.

    In light of the time constraints involved with these types of transactions and consistent with the FDIC's Statement of Policy on Applications for Deposit Insurance, the FDIC may apply modified deposit insurance application processes. The FDIC will consider abbreviated information submissions and applications, and may issue conditional approval for Deposit Insurance, in order to qualify interested parties for the FDIC's failing institution bidders list. Investors that are interested in acquiring the deposits of failing institutions must have conditional approval for a charter from the responsible agency and meet the bid criteria established by the FDIC. In certain cases it would also be necessary to obtain conditional approval to establish a bank or thrift holding company. Federal and State agencies are coordinating on specific information needs and timing requirements and ultimately the granting of a charter and Deposit Insurance.

    The basic areas of consideration would include a business plan compliant with the Community Reinvestment Act, readily available capital, and an identified management team subject to financial and biographical review.

    Interested parties should contact Associate Director Lisa Arquette or Counsel Catherine Topping in the FDIC's Washington Office. Messages can be left at (202) 898-8515 or sent electronically to

    Part 2...,0,1681900.story

    From the Los Angeles Times
    FDIC, failing to find buyer for IndyMac, lets nonbanks bid
    By E. Scott Reckard

    November 27, 2008

    Should you have to be a bank to bid for Pasadena mortgage lender IndyMac Federal Bank or any other failed financial institution?

    The Federal Deposit Insurance Corp., which has been unable to sell IndyMac since it was seized four months ago, said Wednesday it didn't think so.

    The FDIC, which has dealt with 22 failed banks and thrifts this year (including IndyMac on July 11 and Southland-based Downey Savings and PFF Bancorp last week), said it hoped to generate more interest by allowing nonbanks to join the auction process.

    If it actually won the bidding for a failed institution, a nonbank bidder would have to get a bank charter and qualify for FDIC insurance before assuming the institution's deposits. The federal Office of the Comptroller of the Currency, which regulates national banks, said last week that it would issue "shelf charters" to prospective bidders for failed banks, essentially clearing them in advance.

    Bank consultant Bert Ely, based in Arlington, Va., said bidders would probably be the type of groups that start new banks -- a former bank chief executive or chief financial officer backed by "money people."

    IndyMac spokesman Evan Wagner said the Pasadena institution was hoping to solicit additional bids -- marking the latest in a series of revisions to plans to find a buyer. Since no buyer was found for IndyMac before it failed -- unlike the cases of Downey, PFF, Washington Mutual and others -- the FDIC has been stuck operating IndyMac.

    The FDIC said initially that it hoped to find a buyer for all or part of IndyMac within three months. It later extended the deadline, with bids for pieces as well as for the entire thrift continuing into this month.

    David Barr, a spokesman for the FDIC, said recently that the agency still hoped to have a deal worked out by sometime in December. He couldn't be reached for comment Wednesday on whether expanding the potential pool of bidders would once again push the target sale date back.

    Reckard is a Times staff writer.