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FDIC Law, Regulations, Related Acts

[Main Tabs]     [Table of Contents - 4000]     [Index]     [Previous Page]     [Next Page]     [Search] 4000 - Advisory Opinions Exception to Interlock Prohibitions for Successor Institutions FDIC-90-31 August 2, 1990 Gerald J. Gervino, Senior Attorney   Your letter of July 9, 1990, addressed to Roger Hood, Assistant General Counsel, requests our written confirmation that an exception to the prohibitions imposed by the Depository Institution Management Interlocks Act, 12 U.S.C. §§3201-3208 ("Interlocks Act") is applicable to the current situation of your client, the Bank of *** ("New Bank") and its President, *** ("President"), who is, or was, also the chief executive officer of *** ("Other Bank").   New Bank was chartered to facilitate an individual's acquisition of a failed bank. On the same day that it was chartered, New Bank "acquired" the failed bank from the FDIC in a transaction you feel is commonly called a "clean bank purchase".   The president was the chief operating officer of Other Bank prior to the organization of New Bank and the acquisition of the failed bank. While New Bank and Other Bank share common ownership, you state that they are not "affiliates" for purposes of the Interlocks Act. The exception in question reads as follows:   [a]  depository institution or a depository holding company which   (A)  is closed or is in danger of closing, as determined by the appropriate Federal depository institutions regulatory agency in accordance with regulations prescribed by such agency; and {{10-15-90 p.4464}}   (B)  is acquired by another depository institution or depository holding company, during the 5-year period beginning on the date of the acquisition of the depository institution or depository holding company described in subparagraph (A). 12 U.S.C. §3204(7).   You note that the language of the above statute might not apply to your clients president if it were read to except only management officials of the failed institution itself, thus preserving the interlock prohibitions for successor institutions such as the New Bank.   You feel that a restrictive reading of the statute would render it nearly useless. Thus, you offer your opinion that the exception should apply to your client and request our concurrence with your opinion. You enclose a staff opinion dated January 17, 1989, from the General Counsel of the Board of Governors of the Federal Reserve System with respect to the exception. That opinion appears to concur with an inquiring attorney's opinion that a successor to a failed bank may claim the above exception.   Based upon the facts presented to us in your letter, we concur in your view that the above exception would be applicable to your client's president. If the facts should prove otherwise or the applicable law should change, this concurrence would not apply to those differing circumstances.   If you have any further questions, please write or call me at (202) 898-3723. [Main Tabs]     [Table of Contents - 4000]     [Index]     [Previous Page]     [Next Page]     [Search]

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