Venable partners Dick Wasserman and Ron Glancz were quoted in a story about the FDIC's expanded power under the Dodd-Frank Wall Street Reform and Consumer Protection Act in a September 7, story on Law.com.
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law July 21, the FDIC has the power to take over and liquidate nonbank companies whose failure would jeopardize the financial system, acting with almost no judicial oversight. This new authority is in response to the near failures of American International Group Inc., The Bear Stearns Cos. Inc., and Merrill Lynch & Co. Inc., and the bankruptcy of Lehman Brothers Inc., in 2008.
According to Wasserman, the lack of judicial oversight is the "No. 1 difference" between bankruptcy and the FDIC's liquidation process. The FDIC system "doesn't envision a court process or bankruptcy judge. There's no neutral party," he said. "The powers the FDIC has are quite strong. They take over and run this process, and there's generally no court proceedings."
In the article Glancz said, "There are a lot of folks who advocate that this should have been kept within the realm of bankruptcy courts. Some of the banks that have failed were huge companies, so the FDIC does have experience with large institutions. But this is new."
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law July 21, the FDIC has the power to take over and liquidate nonbank companies whose failure would jeopardize the financial system, acting with almost no judicial oversight. This new authority is in response to the near failures of American International Group Inc., The Bear Stearns Cos. Inc., and Merrill Lynch & Co. Inc., and the bankruptcy of Lehman Brothers Inc., in 2008.
According to Wasserman, the lack of judicial oversight is the "No. 1 difference" between bankruptcy and the FDIC's liquidation process. The FDIC system "doesn't envision a court process or bankruptcy judge. There's no neutral party," he said. "The powers the FDIC has are quite strong. They take over and run this process, and there's generally no court proceedings."
In the article Glancz said, "There are a lot of folks who advocate that this should have been kept within the realm of bankruptcy courts. Some of the banks that have failed were huge companies, so the FDIC does have experience with large institutions. But this is new."