FDIC Extends Securitization Safe Harbor and Portends Further Securitization Reforms


On November 12, 2009, the board of directors of the Federal Deposit Insurance Corporation (“FDIC”) adopted an interim final rule (the “Interim Rule”) amending 12 C.F.R. §360.6 (the “Securitization Rule”) regarding the FDIC’s treatment, as conservator or receiver, of financial assets transferred in connection with a securitization or participation.1 The Interim Rule was adopted in response to recent changes to generally accepted accounting principles (“GAAP”) that will require many securitizations and participations currently accounted for as “sales” under GAAP to be accounted for as secured on-balance sheet borrowings commencing with the sponsoring depository institution’s first fiscal year that begins after November 15,2009.

The Interim Rule provides that all securitizations and participations for which financial assets were transferred, or for revolving securitization trusts for which securities are issued, prior to March 31, 2010 will remain “legally isolated” so long as those securitizations and participations would been accounted for as sales under GAAP as in effect before November 15, 2009 and satisfy all other conditions of the Securitization Rule.

Please see full bulletin below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.