[Federal Register Volume 76, Number 183 (Wednesday, September 21, 2011)]
[Rules and Regulations]
[Pages 58379-58393]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-24179]



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  Federal Register / Vol. 76, No. 183 / Wednesday, September 21, 2011 / 
Rules and Regulations  

[[Page 58379]]



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: Interim final rule.

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SUMMARY: The FDIC is adopting an interim final rule (``Rule''), with 
request for comments, 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 
FDIC finds that there is good cause and it is in the public interest to 
adopt the Rule. Resolution plans for large and complex insured 
depository institutions are essential for their orderly and least-cost 
resolution. 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 Rule enables 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.

DATES: The Rule is effective January 1, 2012. Written comments on the 
Rule must be received by the FDIC no later than November 21, 2011.

ADDRESSES: You may submit comments by any of the following methods:
     Agency Web Site: http://www.fdic.gov/regulations/laws/federal. Follow instructions for Submitting comments on the Agency Web 
Site.
     E-mail: [email protected]. Include ``Resolution plans 
required for insured depository institutions with $50 billion or more 
in total assets'' in the subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.
     Hand Delivery/Courier: Guard station at the rear of the 
550 17th Street Building (located on F Street) on business days between 
7 a.m. and 5 p.m. (EST).
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    Public Inspection: All comments received will be posted without 
change to http://www.fdic.gov/regulations/laws/federal including any 
personal information provided. Comments may be inspected and 
photocopied in the FDIC Public Information Center, 3501 North Fairfax 
Drive, Room E-I002, Arlington, VA 22226, between 9 a.m. and 5 p.m. 
(EST) on business days. Paper copies of public comments may be ordered 
from the Public Information Center by telephone at (877) 275-3342 or 
(703) 562-2200.

FOR FURTHER INFORMATION CONTACT: Keith Ligon, Acting Associate 
Director, Office of Complex Financial Institutions, International 
Coordination Branch (202) 898-3686, or James Marino, Project Manager, 
Division of Resolutions and Receiverships, (703) 516-5043, or 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 and Authority for the Rule

    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 they should fail. As 
of December 31, 2010, the FDIC insured approximately $6.2 trillion in 
deposits in more than 7,650 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 $3.6 trillion in insured deposits or 
nearly 60 percent of all insured deposits as of December 31, 2010.
    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

[[Page 58380]]

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 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.\1\
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    \1\ 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 Cross-border Bank Resolution Group, issued on 
March 18, 2010, the Basel Committee emphasized the importance of pre-
planning 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.\2\ The Rule supports and 
complements these international efforts.
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    \2\ See Financial Stability Board, ``Consultative Document: 
Effective Resolution of Systemically Important Financial 
Institutions--Recommendations and Timelines,'' 17 (July 19, 2011), 
available at http://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, originally proposed on May 17, 2010, 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.\3\ 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'').\4\
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    \3\ Sections 11 and 13 of the FDI Act, 12 U.S.C. 1821 and 1823.
    \4\ See FRB and FDIC Notice of Proposed Rulemaking: Resolution 
Plans and Credit Exposure Reports Required, 76 FR 22648 (April 22, 
2011). The Final Rule regarding Resolution Plans under Section 
165(d) of the Dodd-Frank Act is being issued concurrently with the 
Rule.
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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

[[Page 58381]]

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 IDI, including special examinations, 12 U.S.C 1820(b)(3).

II. The Notice of Proposed Rulemaking: Comment Summary

    On May 17, 2010, the FDIC caused to be published in the Federal 
Register a Notice of Proposed Rulemaking (``NPR'') requiring Special 
Reporting, Analysis and Contingent Resolution Plans at Certain Large 
Depository Institutions (the ``Proposed Rule'').\5\ The Proposed Rule 
would have required each insured depository institution with greater 
than $10 billion in total assets that is owned or controlled by a 
holding company with more than $100 billion in total assets to submit 
to the FDIC analysis, information, and contingent resolution plans that 
address and demonstrate the insured depository institution's ability to 
be separated from its parent structure, and to be wound down or 
resolved in an orderly fashion.
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    \5\ 75 FR 27464.
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    The NPR solicited public comment on all aspects of the Proposed 
Rule. The comment period ended on July 16, 2010, and eight comments 
were received. Most of the commenters suggested that the FDIC withdraw, 
or delay the implementation of, the Proposed Rule in anticipation of 
Section 165(d) of the Dodd-Frank Act, which was signed into law on July 
21, 2010, as well as ongoing international efforts related to 
contingent resolution planning. Commenters were concerned that the 
FDIC's separate rulemaking would result in significant additional 
costs, duplicated efforts and excessive burdens on covered 
institutions. Commenters felt that the FDIC should coordinate with 
other regulators, both domestically and internationally. Some 
commenters felt that the resolution plan requirements of the Dodd-Frank 
Act would be sufficient and there was no need for the preparation a 
specific resolution plan by an insured depository institution owned by 
a bank holding company that was required to prepare a resolution plan 
under the Dodd-Frank Act.
    In response to the comments related to passage of the Dodd-Frank 
Act, the FDIC delayed issuance of the Rule until such time as the FRB 
and the FDIC issued separate rulemaking implementing Section 165(d) and 
setting forth the resolution plan requirements in detail. During this 
period, the FDIC sought to make the two rules complementary and avoid 
duplication of costs, efforts and burdens on the covered institutions. 
In that regard, the Resolution Plan required by the Rule is different 
from the DFA Resolution Plan the insured depository institution's 
holding company is required to prepare under Section 165(d). The Rule 
requires a plan to resolve the insured depository institution under the 
FDI Act with the FDIC acting as receiver. The Section 165(d) rule 
requires the covered company to submit a plan for it to be resolved in 
an orderly manner under the Bankruptcy Code. The Rule is focused on 
ensuring depositors receive access to their insured deposits rapidly, 
minimizing the costs to the Deposit Insurance Fund and maximizing 
recovery for creditors in the resolution of insured depository 
institutions. The Section 165(d) rule is focused on minimizing systemic 
risk in the resolution of the covered company in order to protect the 
financial stability of the United States while maximizing recovery for 
creditors. To avoid duplication in the production of information, the 
Rule specifically provides that the CIDI may incorporate data and other 
information from its holding company's DFA Resolution Plan. The FDIC 
requests comments on additional steps that can be taken to allow a CIDI 
to integrate the resolution planning that takes place under the Rule 
with its holding company's DFA Resolution Plan.
    Several commenters felt the informational requirements of the 
Proposed Rule were unclear and requested clarification or made 
suggestions for improvement. Some commenters suggested that the FDIC 
provide a template for the Resolution Plan. In response to these 
comments, the Rule provides more detailed descriptions of the elements 
and the elements were reorganized so that the Rule lists each element 
that must be included in the Resolution Plan. While each CIDI may 
organize its plan in a manner that it feels best communicates the 
requested information, the list of elements was prepared in an order 
that the FDIC felt would work well for the plans of most institutions.
    Several commenters were concerned that the Proposed Rule favored 
resolution over recovery and was biased in favor of separation of the 
insured depository institution from the parent organization rather than 
looking to maintain enterprise value. By issuing the Rule, the FDIC 
does not intend to substitute resolution planning for recovery 
planning. Both are very important and serve complementary purposes. The 
Rule, however, focuses on resolution planning.
    One commenter suggested that the FDIC take a risk-based approach to 
the plan requirements, i.e., the scope and timing of the requirements 
and degree of planning and reporting should not be as high for well-
managed and well-capitalized institutions. Another commenter suggested 
an exemption for institutions that are not interconnected with 
affiliates in operations and contracts. Several commenters requested 
that multiple insured depository institutions within a holding company 
group be permitted to file a single plan. Several commenters requested 
clarification of the Proposed Rule's application to an institution 
owned by foreign parent. In light of these concerns, as well as to 
align the Rule more closely with the Section 165(d) rule with respect 
to institutional groups filing plans, the FDIC raised the minimum asset 
size for a CIDI from $10 billion to $50 billion and eliminated the 
requirement that the CIDI be owned or controlled by a holding company 
with $100 billion in assets or more. This change means that insured 
depository institutions between $10 billion and $50 billion in total 
assets do not need to file Resolution Plans. The FDIC believes that 
change reduces the burden of the Rule on certain multiple bank holding 
companies because their insured depository institutions with assets 
under $50 billion will not need to file plans under the Rule. While 
this change means that some insured depository institutions not 
previously covered are now required to file Resolution Plans, the FDIC 
felt that obtaining Resolution Plans under the Rule from such 
institutions would be consistent with its desire to coordinate the 
efforts under the Rule with the Section 165(d) planning process and 
would also assist the FDIC in meeting its objectives and goals in 
issuing the Rule.\6\
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    \6\ Three of the newly covered institutions currently will not 
be covered by DFA Resolution Plans because their holding companies 
are thrift holding companies, not bank holding companies. 
Nevertheless, the FDIC believes that the $50 billion asset threshold 
used in the Dodd-Frank Act is also an appropriate threshold to apply 
to these thrifts to enable the FDIC to meet its objectives and goals 
in issuing the Rule.
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    A few commenters believed that much of the information requested 
was already provided to other regulatory agencies and that the FDIC 
should reduce the informational requirements by leveraging existing 
reporting. One

[[Page 58382]]

commenter felt that the Proposed Rule should only request information 
that had not been previously submitted by the institution or its parent 
to one of the bank regulatory agencies. In addition, one commenter 
suggested that, with respect to funding and liquidity requirements, the 
FDIC leverage the funding and liquidity planning that the institutions 
were doing to comply with the Interagency Policy Statement on Funding 
and Liquidity Risk Management, which was effective May 21, 2010. 
Several commenters felt that the burden of the informational 
requirements could be significantly reduced by using materiality 
standards or thresholds in the Proposed Rule. Similarly, one commenter 
suggested that information on subsidiaries be limited to key operating 
subsidiaries. To address many of these concerns, materiality thresholds 
have been incorporated in several provisions of the Rule. In addition, 
an institution may incorporate information provided in its DFA 
Resolution Plan. The FDIC invites comments on additional ways that the 
informational requirements can be revised to reduce the burden on the 
covered institutions.
    Several commenters were concerned that the Proposed Rule would 
require ongoing reporting of day-to-day operational and fiscal 
challenges. One commenter suggested requiring the reporting of material 
events only when the event related to fulfillment of, or had an impact 
on, the Resolution Plan. In response to these comments, the FDIC 
clarified in the Rule when and how material events should be addressed.
    A number of commenters had questions related to the proposed gap 
analysis. Requests were made to clarify the purpose and effect of the 
gap analysis. Requests were made that the Proposed Rule state that the 
gap analysis is intended for planning purposes only and does not 
require reorganizing the institution's operations. In light of these 
comments, the term ``gap analysis'' is not used in the Rule and the 
analysis sought is requested in different ways. To the extent, however, 
that a plan identifies obstacles to the CIDI's resolution that have a 
bearing on potential loss severity, such as the inability to make quick 
deposit insurance determinations and depositor payments or the 
inability to provide sufficient information on qualified financial 
contracts to allow the FDIC to make timely and correct determinations 
on these contracts in the event of failure, the FDIC does expect the 
plans also to provide strategies that could be taken to remove those 
obstacles or mitigate the effects thereof.
    Several commenters were concerned about the provision in the 
Proposed Rule requiring the production of audited financial statements. 
These commenters sought clarification that the FDIC did not intend to 
require institutions to prepare additional audited financial statements 
for subsidiaries not already preparing such statements. In light of 
these comments, the Rule reflects that the FDIC is not requiring 
institutions to prepare additional audited financial statements for 
subsidiaries not already preparing such statements.
    A number of commenters read the Proposed Rule provisions regarding 
the confidentiality of information submitted as suggesting that 
confidentiality would only be afforded to information which, if 
disclosed, would endanger the institution's safety and soundness. These 
commenters suggested that such a standard for obtaining confidentiality 
for material submitted was incorrect and should be revised to reflect 
requirements of existing law. Furthermore, commenters felt that, in all 
cases, the resolution plan and related analysis and information 
submitted should be treated as confidential supervisory or examination 
information exempt from public disclosure. Given the comments on 
confidentiality, the confidentiality provision has been revised to 
provide that the Resolution Plan be divided into a public section and a 
confidential section. In addition, the Rule provides that, to the 
extent permitted by law, the information comprising the confidential 
section of a Resolution Plan will be treated as confidential.
    Commenters also believed the Proposed Rule's requirement that the 
insured depository institution's board of directors attest that a 
resolution plan is accurate and the information is current is 
inconsistent with corporate governance principles regarding the board's 
role and imposes too great a burden on the institution's board. The 
commenters suggested that the final rule simply require the 
institution's board to approve the resolution plan. The Rule requires a 
Resolution Plan to be approved by the CIDI's board of directors and 
requires that a Resolution Plan include certain specified information 
about the CIDI's corporate governance structure and processes.
    A number of commenters questioned the regulatory burden analysis 
and felt that the estimated time to respond was significantly below the 
time that would be actually required to respond. In addition, most 
commenters felt that six months was too short a time to prepare the 
initial Resolution Plan. Several suggested allowing institutions to 
obtain extensions for good cause. Given these comments, the FDIC 
reevaluated its estimates of the regulatory burden and made adjustments 
thereto. The initial filings will be staggered. This change provides 
most CIDIs with much more time to prepare their initial Resolution 
Plans. In order to reduce the burden on CIDIs by allowing them to 
utilize information and data compiled for their parent company's DFA 
Resolution Plan, the groupings and timing of the filings are the same 
as the groupings and timing of filings to be utilized for DFA 
Resolution Plans. The order utilized also allows the FDIC to focus on 
the most complex or largest institutions first. The Rule requires the 
first filing group, which consists of each CIDI whose parent company, 
as of the effective date of the Rule, 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 the effective date of the Rule, 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 change a CIDI's scheduled filing date and 
extend the implementation and updating time frames of the Rule.
    Several commenters felt that enforcement action should not be taken 
except in very limited situations where noncompliance was willful and 
continuous. The commenters felt that termination of insurance was too 
draconian a remedy to use except in extraordinary circumstances. 
Several commenters requested that an appeals process be provided in the 
Proposed Rule as well as a clarification of what standards will be used 
to evaluate compliance with the Proposed Rule. The FDIC intends to use 
its enforcement powers only in appropriate circumstances. The Rule now 
provides for a multi-step review process that affords the covered 
institutions the opportunity to correct deficiencies in their 
Resolution Plans before the FDIC would use its enforcement powers. The

[[Page 58383]]

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 Resolution 
Plans will vary by company and, in its evaluation of plans, will take 
into account variances among companies in their core business lines, 
critical operations, domestic and foreign operations, capital 
structure, risk, legal structure, complexity, financial activities 
(including the financial activities of their subsidiaries), size and 
other relevant factors. 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. There is no expectation by the FDIC 
that initial Resolution Plans will be found to be deficient, but rather 
the initial Resolution Plans will provide the foundation for developing 
more robust annual Resolution Plans. The Rule also allows the FDIC to 
extend deadlines on its own initiative or upon request.
    As noted above, the FDIC made a number of revisions to the Proposed 
Rule as a result of the comments received. The FDIC believes that 
additional comments would be helpful in refining certain aspects of the 
Rule and therefore is issuing the Rule as an interim final rule, with 
request for comments. This action will avoid a delay in the 
implementation of the important resolution planning process, while 
allowing the FDIC to solicit and obtain additional comments that may 
serve as the basis for further clarification of the requirements of the 
Rule, if necessary.

III. Section-by-Section Analysis of the 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.
    ``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. The Rule requires the first 
filing group, which consists of each CIDI whose parent company, as of 
the effective date of the Rule, 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 the effective date of the Rule, 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. An 
insured depository institution that becomes a CIDI after the effective 
date of the Rule shall submit its initial resolution plan no later than 
July 1 of the following calendar year.
    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 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

[[Page 58384]]

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, 
describe any material effects that the event may have on the Resolution 
Plan and summarize the changes that are required in the 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.
    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, 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.
    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 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).
    Among potential strategies for the payment of depositors that 
should be considered are: (a) A cash payment of insured deposits, \7\ 
(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.\8\
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    \7\ 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).
    \8\ 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

[[Page 58385]]

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.\9\
---------------------------------------------------------------------------

    \9\ One significant benefit of using the bridge insured 
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 pm (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. 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 idiosyncratic and 
industry-wide stress scenarios (including time frames), 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 
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 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 individual 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 personnel, facilities, or systems. 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

[[Page 58386]]

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 that is primarily responsible for overseeing the 
development, maintenance, implementation, and filing of the Resolution 
Plan and for the CIDI's compliance with this section.
    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 the FDIC 
determines that the Resolution Plan of a CIDI submitted is not 
credible, 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. 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 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.
    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 
309. The FDIC certainly expects that large portions of

[[Page 58387]]

the submissions will contain or consist of ``trade secrets and 
commercial or financial information obtained from a person and 
privileged or confidential'' and information that is ``contained in or 
related to examination, operating, or condition reports prepared by, on 
behalf of, or for the use of an agency responsible for the regulation 
or supervision of financial institutions.'' This information is subject 
to withholding under exemptions 4 and 8 of the FOIA, 5 U.S.C. 552(b)(4) 
and (8).
    The FDIC also recognizes, however, that the regulation calls for 
the submission of details regarding CIDIs that are publicly available 
or otherwise are not sensitive and should be made public. Unless 
inextricably intertwined with exempt information, these details would 
be releasable under the FOIA. The FDIC is concerned that it and the 
courts could reach inconsistent conclusions regarding which portions of 
the Resolution Plans contain or consist of reasonably segregable 
nonexempt information. This uncertainty, in turn, could impact the 
quality and content of the information provided by CIDIs.
    In order to reduce this uncertainty, the Rule requires Resolution 
Plans to be divided into two sections: a public section and a 
confidential section. The Rule further specifies the scope and content 
of the information that is to comprise each section. In the FDIC's 
view, the details required to be contained in the public section are or 
should be publicly available. The public section of the resolution plan 
should be segregated and separately identified from the confidential 
section. The public section will be made available to the public in 
accordance with the FDIC's Disclosure of Information Rule, 12 CFR part 
309.
    The FDIC also intends and will presume that the confidential 
section of a resolution plan contains and consists of information that 
is subject to withholding in full under one or more of the FOIA 
exemptions. That said, a CIDI should submit a properly substantiated 
request for confidential treatment of any details in the confidential 
section that it believes are subject to withholding under exemption 4 
of the FOIA. In addition, the FDIC will have to make formal exemption 
and segregability determinations if and when a plan is requested under 
the FOIA.
    The public section of the Resolution Plan consists of an executive 
summary of the Resolution Plan that describes the business of the CIDI 
and includes, to the extent material to an understanding of the CIDI: 
(1) The names of material entities; (2) a description of core business 
lines; (3) consolidated financial information regarding assets, 
liabilities, capital and major funding sources; (4) a description of 
derivative activities and hedging activities; (5) a list of memberships 
in material payment, clearing and settlement systems; (6) a description 
of foreign operations; (7) the identities of material supervisory 
authorities; (8) the identities of the principal officers; (9) a 
description of the corporate governance structure and processes related 
to resolution planning; (10) a description of material management 
information systems; and (11) a description, at a high level, of the 
CIDI's resolution strategy, covering such items as the range of 
potential purchasers of the CIDI, its material entities and core 
business lines.

IV. Interim Final Rule; Request for Comments

    The FDIC finds that there is good cause and it is in the public 
interest to adopt the Rule as an interim final rule. 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 Rule enables 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.
    Resolution plans for large and complex insured depository 
institutions are essential for their orderly and least-cost resolution. 
The FDIC believes good cause exists for issuing the Rule as an interim 
final rule and that its issuance is in the public interest. While the 
FDIC issued the NPR on the Proposed Rule last year, many commenters 
recommended that the FDIC defer final action until the companion 
Section 165(d) rule was finalized. Concurrent with the issuance of the 
Rule, the FDIC and the FRB are issuing a final rule requiring the 
preparation of resolution plans pursuant to Section 165(d) of the Dodd-
Frank Act, 12 U.S.C. 5365(d). It is imperative that the two companion 
rules incorporate coordinated requirements and for CIDIs to initiate 
preparatory work for their resolution plans in concert with the related 
plans of their holding companies. With limited exception, the parent 
company of each insured depository institution covered by the Rule is 
expected to file a DFA Resolution Plan required by Section 165(d). The 
issuance of the Rule as an interim final rule outlining the 
requirements for an insured depository institution subsidiary 
Resolution Plan enables a holding company to consider these 
requirements in preparing its DFA Resolution Plan.
    The Rule will support the FDIC's ongoing resolution planning 
activities as those insured depository institutions will be best 
positioned to understand the most effective and efficient manner for 
their resolution under their existing holding company structure. The 
initiation of the CIDI resolution planning processes under the Rule 
along with the related holding company resolution planning process 
under the Section 165(d) rule will facilitate more effective planning, 
reduce the risks of inconsistent plan development, and materially 
assist the FDIC's planning efforts and evaluation of the development of 
the companion resolution plans under the Section 165(d) rule. Finally, 
it is in the public interest to issue the Rule as an interim final rule 
in order to coordinate with the finalization of the Section 165(d) 
rule, which is subject to a Congressional deadline. The issuance of the 
Rule as an interim final rule outlining the requirements for a CIDI's 
Resolution Plan enables a holding company to consider these 
requirements in preparing its DFA Resolution Plan.
    Issuance of the resolution plan requirements for CIDIs through the 
Rule also will facilitate the development of such plans at an earlier 
date and provide adequate time for the institutions covered by the Rule 
to prepare their first Resolution Plans for submission on their initial 
submission date, as well as to prepare their DFA Resolution Plans for 
submission in accordance with the Section 165(d) rule.
    The FDIC realizes that the Rule imposes additional regulatory and 
financial burdens on the industry. The FDIC is seeking to minimize the 
burden while carrying out its mandates as insurer and as receiver. The 
FDIC seeks comments on all aspects of the Rule. Comments will be 
considered by the FDIC and appropriate revisions will be made to the 
Rule, if necessary, before a Final Rule is issued. Comments are 
specifically requested on the following:

Scope

    Should a CIDI be defined differently? Should the asset threshold 
for inclusion be lower or higher than $50 billion?

Definitions

    1. What terms defined by the Rule require further clarification and 
how should they be defined?
    2. What other terms used in the Rule should the FDIC define?

[[Page 58388]]

Strategic Analysis

    1. What additional elements of strategic analysis should be 
included in the CIDI's Resolution Plan? Are there any elements listed 
in the Rule that create an unnecessary burden or that should not be 
included in the CIDI's Resolution Plan?
    2. How can the requirements regarding the strategic analysis be 
improved to provide additional clarity?

Governance

    1. What additional resolution planning governance and oversight 
requirements should the Rule include?
    2. What alternative governance requirements might exist that would 
ensure that a CIDI places adequate importance and attention on 
resolution planning?

Informational Elements

    1. What additional informational elements should the Rule require 
as part of a Resolution Plan? What impediments attend collection and 
production of the informational elements identified by the Rule? What 
impediments apply to collection and production of additional 
informational elements you have identified?
    2. Do the informational elements described in the Rule capture the 
correct types of information for resolution planning? Are any of the 
informational elements identified in the Rule not necessary?
    3. Which of the information elements described in the Rule could be 
clarified?
    4. To the extent any of the informational elements identified in 
the Rule are not readily available, identify the burden of or 
impediment to (e.g., technology limits, confidentiality concerns, etc.) 
obtaining and reporting such information? What changes could the FDIC 
make to the Rule to reduce burdens and impediments?
    5. Should any informational elements be required to be available on 
an ``on demand'' or ``real time'' basis? What impediments apply to 
making such information available on demand?
    6. What is the burden related to producing an unconsolidated 
balance sheet and providing consolidating schedules? What alternatives 
could the FDIC include in the Rule to reduce that burden?

Process

    1. Are the proposed timelines for Resolution Plan submission (i.e., 
initial, annual and notice of material change) adequate for the CIDI to 
develop and submit the information required by the Rule? If not, what 
timelines would be appropriate?
    2. With regard to the provision of the Rule that would require a 
CIDI to file a notice of material change upon a material event, 
occurrence, or change, should the Rule provide greater specificity 
(e.g., in terms of a dollar amount or percentage of assets acquired or 
disposed of in a significant transaction)?
    3. Are there explicit factors the FDIC should consider in 
determining whether a Resolution Plan is not credible?
    4. What additional steps could be taken to allow a CIDI to 
integrate the resolution planning that takes place under the Rule with 
its parent company's DFA Resolution Plan?

V. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (44 U.S.C. 3501 et 
seq.) (``PRA''), the FDIC may not conduct or sponsor, and a person is 
not required to respond to, a collection of information unless it 
displays a currently valid Office of Management and Budget (OMB) 
control number. The estimated burden for the reporting and disclosure 
requirements, as set forth in the Notice of Proposed Rulemaking, is as 
follows:
    Title: Resolution plans required for insured depository 
institutions with $50 billion or more in total assets.
    OMB Number: 3064-New Collection.
    Affected Public: Insured depository institutions with $50 billion 
or more in total assets.
    A. Estimated Number of Respondents for Contingent Resolution Plan: 
37.
    Frequency of Response: Once.
    Estimated Time per Response: 7,200 hours per respondent.
    Estimated Total Initial Burden: 266,400 hours.
    B. Estimated Number of Respondents for Annual Update of Resolution 
Plan: 37.
    Frequency of Response: Annual.
    Estimated Time per Response: 452 hours per respondent.
    Estimated Total Initial Burden: 16,724 hours.
    C. Estimated Number of Respondents for Notice of Material Change 
Affecting Resolution Plan: 37.
    Frequency of Response: Zero to two times annually.
    Estimated Time per Response: 226 hours per respondent.
    Estimated Total Initial Burden: 8,362 hours.
    Background/General Description of Collection: Section 360.10 
contains collections of information pursuant to the PRA. In particular, 
the following requirements of the Rule constitute collections of 
information as defined by the PRA: all CIDIs are required to submit to 
the FDIC a Resolution Plan that contains certain required information 
and meets certain described standards; updates to the analysis and plan 
are required to be submitted annually, with certain notices to be filed 
more frequently as a result of material changes. The collections of 
information contained in the Rule are being submitted to OMB for 
review.
    Comments: In addition to the questions raised elsewhere in this 
Preamble, comment is solicited on (1) whether the collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (2) the accuracy of the agency's estimate of the burden of the 
collection of information, including the validity of the methodology 
and assumptions used; (3) ways to enhance the quality, utility, and 
clarity of the information to be collected; (4) ways to minimize the 
burden of the information collection on respondents, including through 
the use of automated collection techniques or other forms of 
information technology, e.g., permitting electronic submission of 
responses; and (5) estimates of capital or start-up costs and costs of 
operation, maintenance, and purchases of services to provide 
information.
    Addresses: Interested parties are invited to submit written 
comments to the FDIC concerning the PRA implications of the Rule. Such 
comments should refer to ``Resolution plans required for insured 
depository institutions with $50 billion or more in total assets'' 
Comments may be submitted by any of the following methods:
     Agency Web Site: http://www.FDlC.gov/regulations/laws/federal. Follow instructions for submitting comments on the Agency Web 
Site.
     E-mail: [email protected]. Include ``Resolution plans 
required for insured depository institutions with $50 billion or more 
in total assets'' in the subject line of the message.
     Mail: Gary A. Kuiper (202.898.3877), Counsel, Attention: 
Comments, FDIC, 550 17th Street, NW., Room F-1072, Washington, DC 
20429.
     Hand Delivery/Courier: Comments may be hand-delivered to 
the guard station at the rear of the 550 17th Street Building (located 
on F Street), on business days between 7 a.m. and 5 p.m. (EST).
     A copy of the comments may also be submitted to the OMB 
desk officer for the FDIC, Office of Information and Regulatory 
Affairs, Office of Management and Budget, New Executive Office 
Building, Room 3208, Washington, DC 20503.

[[Page 58389]]

    Public Inspection: All comments received will be posted without 
change to http://www.fdic.gov/regulations/laws/federal including any 
personal information provided.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act 5 U.S.C. 601 et seq. (RFA) requires 
each Federal agency to prepare a final regulatory flexibility analysis 
in connection with the promulgation of a final rule, or certify that 
the final rule will not have a significant economic impact on a 
substantial number of small entities.\10\ Under regulations issued by 
the Small Business Administration (``SBA''), a ``small entity'' 
includes those firms within the ``Finance and Insurance'' sector with 
asset sizes that vary from $7 million or less in assets to $175 million 
or less in assets.\11\ Therefore, insured depository institutions with 
assets sizes of $175 million or less are considered small entities for 
purposes of the RFA.
---------------------------------------------------------------------------

    \10\ See 5 U.S.C. 603, 604 and 605.
    \11\ 13 CFR 121.201.
---------------------------------------------------------------------------

    The Rule would apply only to insured depository institutions with 
$50 billion or more in total assets. The Rule would apply to 37 insured 
depository institutions upon its effective date. Pursuant to section 
605(b) of the Regulatory Flexibility Act, the FDIC certifies that the 
Rule will not have a significant economic impact on a substantial 
number of small entities and therefore a regulatory flexibility 
analysis under the RFA is not required.

VII. Government Appropriations Act, 1999--Assessment of Federal 
Regulations and Policies on Families

    The FDIC has determined that the Rule will not affect family well-
being within the meaning of section 654 of the Treasury and General 
Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 
(Pub. L. 105-277, 112 Stat. 2681).

VIII. Plain Language

    Section 722 of the Gramm-Leach-Bliley Act (Pub. L. 106-102, 113 
Stat.1338, 1471), requires the Federal banking agencies to use plain 
language in all proposed and final rules published after January 1, 
2000. The FDIC has sought to present the Rule in a simple and 
straightforward manner.

IX. Small Business Regulatory Enforcement Fairness Act

    The Office of Management and Budget has determined that the Rule is 
not a ``major rule'' within the meaning of the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA) (5 U.S.C. 801 et 
seq.). As required by SBREFA, the FDIC will file the appropriate 
reports with Congress and the General Accounting Office so that the 
Rule may be reviewed.

X. Riegle Community Development and Regulatory Improvement Act

    Section 302 of Riegle Community Development and Regulatory 
Improvement Act (RCDRIA) \12\ generally requires that regulations 
prescribed by Federal banking agencies which impose additional 
reporting, disclosures or other new requirements on insured depository 
institutions take effect on the first day of a calendar quarter which 
begins on or after the date on which the regulations are published in 
final form unless an agency finds good cause that the regulations 
should become effective sooner. The effective date of the Rule is 
January 1, 2012, which is the first day of the calendar quarter which 
begins on or after the date on which the regulations are published in 
final form, as required by RCDRIA.
---------------------------------------------------------------------------

    \12\ 12 U.S.C. 4802.
---------------------------------------------------------------------------

List of Subjects in 12 CFR Part 360

    Banks, Banking, Bank deposit insurance, Holding companies, National 
banks, Participations, Reporting and recordkeeping requirements, 
Savings associations, Securitizations.

    For the reasons stated above, the Board of Directors of the Federal 
Deposit Insurance Corporation amends part 360 of title 12 of the Code 
of Federal Regulations as follows:

PART 360--RESOLUTION AND RECEIVERSHIP

0
1. The authority citation for part 360 is revised to read as follows:

    Authority: 12 U.S.C. 1817(b), 1818(a)(2), 1818(t), 1819(a) 
Seventh, Ninth and Tenth, 1820(b)(3), (4), 1821(d)(1), 
1821(d)(10)(c), 1821(d)(11), 1821(e)(1), 1821(e)(8)(D)(i), 
1823(c)(4), 1823(e)(2); Sec. 401(h), Pub. L. 101-73, 103 Stat. 357.



0
2. Add new Sec.  360.10 to read as follows:


Sec.  360.10  Resolution plans required for insured depository 
institutions with $50 billion or more in total assets.

    (a) Scope and purpose. This section 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. This section also establishes 
the rules and requirements regarding the submission and content of a 
resolution plan as well as procedures for review by the FDIC of a 
resolution plan. This section requires a covered insured depository 
institution 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 realized by the 
creditors in the resolution. This rule is intended to ensure that the 
FDIC has access to all of the material information it needs to resolve 
efficiently a covered insured depository institution in the event of 
its failure.
    (b) Definitions--(1) Affiliate has the same meaning given such term 
in Section 3(w)(6) of the FDI Act, 12 U.S.C. 1813(w)(6).
    (2) Company has the same meaning given such term in Sec.  362.2(d) 
of the FDIC's Regulations, 12 CFR 362.2(d).
    (3) Core business lines means those business lines of the covered 
insured depository institution (``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.
    (4) Covered insured depository institution (``CIDI'') 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.
    (5) 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 
operations of the CIDI.
    (6) Foreign-based company means any company that is not 
incorporated or organized under the laws of the United States.
    (7) Insured depository institution shall have the meaning given 
such term in Section 3(c)(2) of the FDI Act, 12 U.S.C. 1813(c)(2).
    (8) Material entity means a company that is significant to the 
activities of a critical service or core business line.

[[Page 58390]]

    (9) 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.
    (10) Parent company affiliate means any affiliate of the parent 
company other than the CIDI and subsidiaries of the CIDI.
    (11) Resolution plan means the plan described in paragraph (c) of 
this section for resolving the CIDI under Sections 11 and 13 of the FDI 
Act, 12 U.S.C. 1821 and 1823.
    (12) Subsidiary has the same meaning given such term in Section 
3(w)(4) of the FDI Act, 12 U.S.C. 1813(w)(4).
    (13) Total assets are defined in the instructions for the filing of 
Reports of Condition and Income and Thrift Financial Reports, as 
applicable to the insured depository institution, for determining 
whether it qualifies as a CIDI.
    (14) United States means the United States and includes any state 
of the United States, the District of Columbia, any territory of the 
United States, Puerto Rico, Guam, American Samoa and the Virgin 
Islands.
    (c) Resolution Plans to be submitted by CIDI to FDIC.
    (1) General. (i) Initial resolution plans required. Each CIDI shall 
submit a resolution plan to the FDIC, Attention: Office of Complex 
Financial Institutions, 550 17th Street, NW., Washington, DC 20429, on 
or before the date set forth below (``Initial Submission Date''):
    (A) July 1, 2012, with respect to a CIDI whose parent company, as 
of the effective date of this section, 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);
    (B) July 1, 2013, with respect to any CIDI not described in 
paragraph (c)(1)(i)(A) of this section whose parent company, as of the 
effective date of this section, 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); and
    (C) December 31, 2013, with respect to any CIDI not described in 
paragraph (c)(1)(i)(A) or (B) of this section.
    (ii) Submission by new CIDIs. An insured depository institution 
that becomes a CIDI after the effective date of this section shall 
submit its initial resolution plan no later than July 1 of the 
following calendar year.
    (iii) After filing its initial Resolution Plan pursuant to 
paragraph (c)(1)(i) or (c)(1)(ii) of this section, each CIDI shall 
submit a Resolution Plan to the FDIC annually on or before each 
anniversary date of its Initial Submission Date.
    (iv) Notwithstanding anything to the contrary in this paragraph 
(c)(1), the FDIC may determine that a CIDI shall file its initial or 
annual Resolution Plan by a date other than as provided in this 
paragraph (c). The FDIC shall provide a CIDI with written notice of a 
determination under this paragraph (c)(1)(iv) no later than 180 days 
prior to the date on which the FDIC determines to require the CIDI to 
submit its Resolution Plan.
    (v) Notice of material events. (A) Each CIDI shall file with the 
FDIC a notice no later than 45 days after 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 of the CIDI. Such notice shall describe the event, 
occurrence or change, describe any material effects that the event, 
occurrence or change may have on the resolution plan and summarize the 
changes that are required in the resolution plan. The CIDI shall 
address any event, occurrence or change with respect to which it has 
provided notice pursuant hereto in the following resolution plan 
submitted by the CIDI.
    (B) A CIDI shall not be required to file a notice under paragraph 
(c)(1)(v)(A) of this section if the date on which the CIDI would be 
required to submit a notice under paragraph (c)(1)(v)(A) would be 
within 45 days prior to the date on which the CIDI is required to file 
an annual Resolution Plan under paragraph (c)(1)(iii) of this section.
    (iv) Incorporation of data and other information from a Dodd-Frank 
Act resolution plan. The CIDI may incorporate data and other 
information from a resolution plan filed pursuant to Section 165(d) of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act, 12 
U.S.C. 5365(d), by its parent company.
    (2) Content of the resolution plan. The resolution plan submitted 
should enable the FDIC, as receiver, 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. 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 Board of Governors of the 
Federal Reserve System 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. At a minimum, 
the resolution plan shall:
    (i) Executive summary. Include an executive summary describing 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 shall also describe:
    (A) 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;
    (B) Material changes to the CIDI's resolution plan from its most 
recently filed plan; and
    (C) 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.
    (ii) Organizational structure: legal entities; core business lines 
and branches. Provide the CIDI's, parent company's, and affiliates' 
legal and functional structures and identify core business lines. 
Provide a mapping of core business lines, including material asset 
holdings and liabilities related thereto, to material entities. Discuss 
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, result in extraordinary 
resolution expenses in the event of failure and a description of the 
branch organization, both domestic and foreign. Identify key personnel 
tasked with managing core business lines and deposit activities and the 
CIDI's branch organization.
    (iii) Critical services. Identify critical services and providers 
of critical services. Provide a mapping of critical services to 
material entities and core business lines. 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, describe the CIDI's strategy for continuing critical 
services in the event of the parent company's or parent company 
affiliate's failure. Assess the

[[Page 58391]]

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.
    (iv) Interconnectedness to parent company's organization. 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.
    (v) Strategy to separate from parent company's organization. 
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. Describe remediation or mitigating steps 
that could be taken to eliminate or mitigate obstacles to such 
separation.
    (vi) Strategy for the sale or disposition of deposit franchise, 
business lines and assets. 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.
    (vii) Least costly resolution method. Describe how the strategies 
for the separation of the CIDI and its subsidiaries from its 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.
    (viii) Asset valuation and sales. Provide a detailed description of 
the processes the CIDI employs for:
    (A) Determining the current market values and marketability of core 
business lines and material asset holdings;
    (B) Assessing the feasibility of the CIDI's plans, under 
idiosyncratic and industry-wide stress scenarios (including 
timeframes), for executing any sales, divestitures, restructurings, 
recapitalizations, or similar actions contemplated in the CIDI's 
resolution plan; and
    (C) 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.
    (ix) Major counterparties. Identify the major counterparties of the 
CIDI and describe the interconnections, interdependencies and 
relationships with such major counterparties. 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.
    (x) Off-balance-sheet exposures. Describe any material off-balance-
sheet exposures (including guarantees and contractual obligations) of 
the CIDI and map those exposures to core business lines.
    (xi) Collateral pledged. Identify and describe processes used by 
the CIDI to:
    (A) Determine to whom the CIDI has pledged collateral;
    (B) Identify the person or entity that holds such collateral; and
    (C) 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.
    (xii) Trading, derivatives and hedges. Describe the practices of 
the CIDI and its core business lines related to the booking of trading 
and derivative activities. Identify each system on which the CIDI 
conducts a material number or value amount of trades. Map each trading 
system to the CIDI's legal entities and core business lines. Identify 
material hedges of the CIDI and its core business lines related to 
trading and derivative activities, including a mapping to legal entity. 
Describe hedging strategies of the CIDI.
    (xiii) Unconsolidated balance sheet of CIDI; material entity 
financial statements. Provide an unconsolidated balance sheet for the 
CIDI and a consolidating schedule for all material entities that are 
subject to consolidation with the CIDI. Provide financial statements 
for material entities. When available, audited financial statements 
should be provided.
    (xiv) Payment, clearing and settlement systems. Identify each 
payment, clearing and settlement system of which the CIDI, directly or 
indirectly, is a member. Map membership in each such system to the 
CIDI's legal entities and core business lines.
    (xv) Capital structure; funding sources. Provide detailed 
descriptions of the funding, liquidity and capital needs of, and 
resources available to, the CIDI and its material entities, which shall 
be mapped to core business lines and critical services. 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 maturity, secured and unsecured 
liabilities and subordinated liabilities.
    (xvi) Affiliate funding, transactions, accounts, exposures and 
concentrations. Describe material affiliate funding relationships, 
accounts, and exposures, including terms, purpose, and duration, that 
the CIDI or any of its subsidiaries have with its parent or any parent 
company affiliate. Include in such description material affiliate 
financial exposures, claims or liens, lending or borrowing lines and 
relationships, guaranties, asset accounts, deposits, or derivatives 
transactions. Clearly identify the nature and extent to which parent 
company or parent company affiliates serve as a source of funding to 
the CIDI and its subsidiaries, 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.
    (xvii) Systemically important functions. 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. Discuss 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.
    (xviii) Cross-border elements. Describe individual components of 
the CIDI's structure that are based or located outside the United 
States, including foreign branches, subsidiaries and offices. Provide 
detail on the location and amount of foreign deposits and assets. 
Discuss the nature and extent of the CIDI's cross-border assets, 
operations, interrelationships and exposures and map to legal entities 
and core business lines.
    (xix) Management information systems; software licenses; 
intellectual property. 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. 
Identify

[[Page 58392]]

the legal owner or licensor of the systems identified above; describe 
the use and function of the system or application, and provide a 
listing of service level agreements and any software and systems 
licenses or associated intellectual property related thereto. Identify 
and discuss any disaster recovery or other backup plans. Identify 
common or shared personnel, facilities, or systems. 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. 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.
    (xx) Corporate governance. Include a detailed description of:
    (A) How resolution planning is integrated into the corporate 
governance structure and processes of the CIDI;
    (B) The CIDI's policies, procedures, and internal controls 
governing preparation and approval of the resolution plan; and
    (C) The identity and position of the senior management official of 
the CIDI that is primarily responsible for overseeing the development, 
maintenance, implementation, and filing of the resolution plan and for 
the CIDI's compliance with this section.
    (xxi) Assessment of the resolution plan. 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.
    (xxii) Any other material factor. Identify and discuss any other 
material factor that may impede the resolution of the CIDI.
    (3) Approval. The CIDI's board of directors must approve the 
resolution plan. Such approval shall be noted in the Board minutes.
    (4) Review of resolution plan.
    (i) Each resolution plan submitted shall 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.
    (ii) After receiving a resolution plan, the FDIC shall determine 
whether the submitted plan satisfies the minimum informational 
requirements of paragraph (c)(2) of this section; and either 
acknowledge acceptance of the plan for review or return the resolution 
plan if the FDIC determines that it is incomplete or that substantial 
additional information is required to facilitate review of the 
resolution plan.
    (iii) If the FDIC determines that a resolution plan is 
informationally incomplete or that additional information is necessary 
to facilitate review of the plan, the FDIC shall 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.
    (iv) The CIDI shall 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 paragraph, or such other time period as the FDIC 
may determine.
    (v) Upon acceptance of a resolution plan as informationally 
complete, the FDIC will review the resolution plan in consultation with 
the appropriate Federal banking agency for the CIDI and its parent 
company. If the FDIC determines that the resolution plan of a CIDI 
submitted is not credible, the FDIC shall notify the CIDI in writing of 
such determination. Any notice provided under this paragraph shall 
identify the aspects of the resolution plan that the FDIC determines to 
be deficient.
    (vi) Within 90 days of receiving a notice of deficiencies issued 
pursuant to paragraph (c)(4)(v) of this section, or such shorter or 
longer period as the FDIC may determine, a CIDI shall 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.
    (vii) Upon its own initiative or a written request by a CIDI, the 
FDIC may extend any time period under this section. Each extension 
request shall be in writing and shall describe the basis and 
justification for the request.
    (d) Implementation matters. (1) 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.
    (2) Within a reasonable period of time, as determined by the FDIC, 
following its Initial Submission Date, the CIDI shall demonstrate its 
capability to produce promptly, in a format acceptable to the FDIC, the 
information and data underlying its resolution plan.
    (3) Notwithstanding the general requirements of paragraph (c)(1) of 
this section, on a case-by-case basis, the FDIC may extend, on its own 
initiative or upon written request, the implementation and updating 
time frames for all or part of the requirements of this section.
    (4) FDIC may, on its own initiative or upon written request, exempt 
a CIDI from one or more of the requirements of this section.
    (e) No limiting effect on FDIC. No resolution plan provided 
pursuant to this section 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.
    (f) Form of resolution plans; confidential treatment of resolution 
plans. (1) Each resolution plan of a CIDI shall be divided into a 
Public Section and a Confidential Section. Each CIDI shall segregate 
and separately identify the Public Section from the Confidential 
Section. The Public Section shall consist of an executive summary of 
the resolution plan that describes the business of the CIDI and 
includes, to the extent material to an understanding of the CIDI:
    (i) The names of material entities;
    (ii) A description of core business lines;
    (iii) Consolidated financial information regarding assets, 
liabilities, capital and major funding sources;
    (iv) A description of derivative activities and hedging activities;
    (v) A list of memberships in material payment, clearing and 
settlement systems;
    (vi) A description of foreign operations;
    (vii) The identities of material supervisory authorities;
    (viii) The identities of the principal officers;
    (ix) A description of the corporate governance structure and 
processes related to resolution planning;
    (x) A description of material management information systems; and
    (xi) A description, at a high level, of the CIDI's resolution 
strategy, covering such items as the range of potential purchasers of 
the CIDI, its material entities and core business lines.
    (2) The confidentiality of resolution plans shall be determined in 
accordance with applicable exemptions under the Freedom of Information 
Act (5 U.S.C. 552(b)) and the FDIC's Disclosure of Information Rules 
(12 CFR part 309).

[[Page 58393]]

    (3) Any CIDI submitting a resolution plan or related materials 
pursuant to this section that desires confidential treatment of the 
information submitted pursuant to 5 U.S.C. 552(b)(4) and the FDIC's 
Disclosure of Information Rules (12 CFR part 309) and related policies 
may file a request for confidential treatment in accordance with those 
rules.
    (4) To the extent permitted by law, information comprising the 
Confidential Section of a resolution plan will be treated as 
confidential.
    (5) To the extent permitted by law, the submission of any 
nonpublicly available data or information under this section shall not 
constitute a waiver of, or otherwise affect, any privilege arising 
under Federal or state law (including the rules of any Federal or state 
court) to which the data or information is otherwise subject. 
Privileges that apply to resolution plans and related materials are 
protected pursuant to Section 18(x) of the FDI Act, 12 U.S.C. 1828(x).

    By order of the Board of Directors.

    Dated at Washington, DC, this 13th day of September, 2011.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2011-24179 Filed 9-20-11; 8:45 am]
BILLING CODE 6714-01-P