On July 26, 2024, Max Bonici and Connor Webb published, “Why FDIC Banks May Want to Consider Fed Membership” in Law360. The following is an excerpt:
While all banks are subject to heightened scrutiny following the spring 2023 bank failures, the Federal Deposit Insurance Corp. in particular has been subjecting state-chartered nonmember banks to more stringent review and expectations based on their asset size, perceived complexity, business lines and technologies, or other agency-specific criteria. The scrutiny is bearing out in supervision, which is highly confidential, and formal enforcement actions, which are very public.
Historically, some state-chartered banks have assumed or concluded that Fed membership may not be needed. But the FDIC's idiosyncratic issues, policies and approaches—even if only proposed—may cause banks to reconsider this view.
Click here to access the article.