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12 Pratt's J. Bankr. L. 3 (2016)
Resolution Policy for Bank-Centric Firms: Where Are We and Where Are We Headed

handle is hein.journals/prattjb12 and id is 7 raw text is: 









Resolution Policy for Bank-Centric Firms:
Where Are We and Where Are We Headed?

                     By Bimal Patel and Todd Arena*
    This article describes the current state of resolution policy focusing on
    bank-centric firms, identifying open questions that will affect the direction
    of policy and includes analysis of both the Title I process under Section
    165(d) of Dodd-Frank and the less-discussed Federal Deposit Insurance
    Corporation covered insured depository institutions resolution require-
    ments.
    In a recent article' we discussed the developing framework for financial
company resolution policy under the Dodd-Frank Act (Dodd-Frank).2 The
discussion in that article centered on the resolution planning requirements
contained in Titles I and II of Dodd-Frank that prescribe requirements and
procedures under the Bankruptcy Code and Orderly Liquidation Authority
(OLA) respectively. Neither of these authorities, however, affects the resolu-
tion of insured depository institution subsidiaries (IDIs) of large financial
companies because resolution of IDIs is governed by the Federal Deposit
Insurance Act (FDI Act);3 IDIs are exempt from the resolution provisions of
the Bankruptcy Code and OLA.4 Thus, for large financial firms whose business
models are bank-centric, while these firms are subject to Title I resolution
planning requirements and could potentially be eligible for a Title II resolution
at the parent level, a significant component of resolution planning for these
firms lies outside of Title I and Title II planning. To address this reality, the
Federal Deposit Insurance Corporation (FDIC) promulgated a bank resolu-
tion planning requirement applicable to covered insured depository institutions

    Bimal Patel is head of the Financial Advisory and Regulation Practice at O'Melveny &
Myers LLP and is resident in Washington, D.C., and New York. He was formerly a senior
executive at the FDIC, where he served until May 2015. He regularly represents financial
institutions and investment funds in connection with a variety of regulatory, transactional, and
litigation engagements. Todd Arena is an associate in the Project Development and Real Estate
Practice group, resident in New York, where he regularly advises financial institutions on general
corporate, transactional and governance matters.
  1 Bimal Patel & Todd Arena, Resolution Policy: Where Are We and Where Are We Headed?, 11
PRATT'S JOURNAL OF BANKRUPTCY LAw 338 (2015).
  2 Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. No. 111-203
(2010) (codified at 12 U.S.C. § 5301 et. seq.).
  3 12 U.S.C. % 1811-1835a.
  4 12 U.S.C. § 1821(c). See also, 11 U.S.C. § 109 and 12 U.S.C. § 5381(a)(8)(B).

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