Is the FDIC Contemplating the Proactive Use of Living Will Authority?

November 30, 2010
Among the requirements imposed by Title I of the Dodd-Frank Act on large bank holding companies and designated nonbank financial companies (together, systemically important financial companies or SIFIs) is the obligation to draft a plan for a company’s rapid and orderly resolution in the event of its material financial distress, often referred to as a “living will.” Recent statements by the Federal Deposit Insurance Corporation (FDIC) suggest the agency may use this requirement as a lever to compel SIFIs to engage in significant reorganizations and make significant divestitures.