34814 Federal Register / Vol. 61, No. 129 / Wednesday, July 3, 1996 / Notices

List of Subjects

Environmental protection,

Administrative practice and procedure,

Agricultural commodities, Pesticides

and pests.

Dated: June 11, 1996.

Stephen L. Johnson,

Director, Registration Division, Office of

Pesticide Programs.

[FR Doc. 96–16590 Filed 7–2–96; 8:45 am]

BILLING CODE 6560–50–F

FEDERAL COMMUNICATIONS

COMMISSION

Public Safety Wireless Advisory

Committee; Steering and

Subcommittee Meetings

AGENCIES: The National

Telecommunications and Information

Administration (NTIA), Larry Irving,

Assistant Secretary for Communications

and Information, and the Federal

Communications Commission (FCC),

Reed E. Hundt, Chairman.

ACTION: Notice of the Next Meetings of

the Spectrum Requirements and

Interoperability Subcommittees.

SUMMARY: In accordance with the

Federal Advisory Committee Act, Public

Law 92–463, as amended, this notice

advises interested persons of the next

meetings of two of the five

Subcommittees of the Public Safety

Wireless Advisory Committee. The

NTIA and the FCC established a Public

Safety Wireless Advisory Committee,

Subcommittees, and Steering Committee

to prepare a final report to advise the

NTIA and the FCC on operational,

technical and spectrum requirements of

Federal, state and local Public Safety

entities through the year 2010. All

interested parties are invited to attend

and to participate in the next round of

meetings of the Subcommittees.

DATES: July 18, 19 1996 (Thursday,

Friday).

ADDRESSES: Federal Communications

Commission, 2000 M St., NW, Rooms

110 A,B, & C (Rooms subject to change),

Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: For

information regarding the

Subcommittees, contact: Interoperability

Subcommittee: James E. Downes at 202–

622–1582; Spectrum Requirements

Subcommittee: Richard N. Allen at 703–

630–6617.

For information regarding

accommodations and transportation,

contact: Deborah Behlin at 202–418–

0650 (phone), 202–418–2643 (fax), or

dbehlin@fcc.gov (email). You may also

contact Ms. Behlin for general

information concerning the Public

Safety Wireless Advisory Committee.

Information is also available from the

Internet at the Public Safety Wireless

Advisory Committee homepage (http://

pswac.ntia.doc.gov).

SUPPLEMENTARY INFORMATION: Two

Subcommittees of the Public Safety

Wireless Advisory Committee will hold

consecutive meetings on Thursday, July

18, 1996 and Friday, July 19, 1996. The

expected arrangement of the meetings,

which is subject to change at the time

of the meetings, is as follows:

July 18 & July 19: The Interoperability

Subcommittee and then the Spectrum

Requirements Subcommittee will meet

consecutively starting at 8:00 a.m.

For further information contact Don

Speights, NTIA, directly at 202–482–

1652 or by email at

wspeights@ntia.doc.gov.

The tentative agenda for each

subcommittee meeting is as follows:

1. Welcoming Remarks.

2. Approval of Agenda.

3. Administrative Matters.

4. Work Program/Organization of Work.

5. Meeting Schedule.

6. Agenda for Next Meeting.

7. Other Business.

8. Closing Remarks.

The tentative schedule and general

location of the next full meeting of the

Public Safety Wireless Advisory

Committee is: September 1996, in

Washington, D.C.

The Co-Designated Federal Officials

of the Public Safety Wireless Advisory

Committee are William Donald

Speights, NTIA, and John J. Borkowski,

FCC. For public inspection, a file

designated WTB–1 is maintained in the

Private Wireless Division of the

Wireless Telecommunications Bureau,

Federal Communications Commission,

Room 8010, 2025 M Street, N.W.,

Washington, D.C. 20554.

Federal Communications Commission

Robert H. McNamara.

Chief, Private Wireless Division, Wireless

Telecommunications Bureau.

[FR Doc. 96–17096 Filed 7–2–96; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL DEPOSIT INSURANCE

CORPORATION

Statement of Policy on Assistance to

Operating Insured Depository

Institutions

AGENCY: Federal Deposit Insurance

Corporation (FDIC).

ACTION: Policy statement; Notice of

opportunity for comment.

SUMMARY: The statement of policy

would revise the FDIC’s Statement of

Policy on Assistance to Operating

Insured Depository Institutions, which

was published in the Federal Register

on December 18, 1992 (the 1992 Policy

Statement) (see, 57 FR 60203 (December

18, 1992)). As required by section 303(a)

of the Riegle Community Development

and Regulatory Improvement Act of

1994 (the RCDRIA), the FDIC is

conducting a systematic review of its

regulations and statements of policy to

identify and revise regulations and

statements of policy that might be

inefficient, cause unnecessary burden,

or contain outmoded, duplicative, or

inconsistent provisions (see, 60 FR

62345 (December 6, 1995)). The FDIC

has reviewed the 1992 Policy Statement

and has concluded that it should be

revised. This revised statement of policy

would replace the 1992 Policy

Statement.

The statement of policy would (i)

reflect the statutory ‘‘sunset’’ of the

Resolution Trust Corporation on

December 31, 1995, by deleting

references to the Resolution Trust

Corporation’s statutory authority; (ii)

incorporate the requirements of section

11 of the Resolution Trust Corporation

Completion Act, P.L. 103–204, section

11 (1993), which revised section 11(a)(4)

of the Federal Deposit Insurance Act, as

amended (the FDI Act), 12 U.S.C.

1821(a)(4), to prohibit, with certain

exceptions, the use of funds from the

Bank Insurance Fund or the Savings

Association Insurance Fund to benefit

shareholders of a failed or failing

insured depository institution; thus, the

statement of policy would impact the

treatment of shareholders with regard to

FDIC assistance under section 13(c) of

the FDI Act to an operating insured

depository institution prior to the

appointment of a conservator or receiver

for that institution; (iii) provide that any

depository institution subsidiary of a

holding company may be included

when considering what entities may

contribute resources in connection with

a proposal for FDIC assistance; and (iv)

generally streamline the retained

provisions of the 1992 Policy Statement,

in pertinent part by removing certain

detailed discussions of section 13(k)(5)

of the FDI Act and various provisions

added to the FDI Act by the Federal

Deposit Insurance Corporation

Improvement Act of 1991.

DATES: Written comments must be

received on or before August 2, 1996.

ADDRESSES: Written comments should

be addressed to the Office of the

Executive Secretary, FDIC, 550 17th

Street, N.W., Washington, D.C. 20429.
Federal Register / Vol. 61, No. 129 / Wednesday, July 3, 1996 / Notices 34815

1The terms ‘‘default’’ and ‘‘in danger of default’’

are defined in section 3(x) of the FDI Act, 12 U.S.C.

1813(x).

2See section 13(c)(4)(A)(ii) of the FDI Act, 12

U.S.C. 1823(c)(4)(A)(ii).

3See section 13(c)(4)(G) of the FDI Act, 12 U.S.C.

1823(c)(4)(G).

4See section 13(c)(8)(A)(i)(I) of the FDI Act, 12

U.S.C. 1823(c)(8)(A)(i)(I).

5See section 13(c)(8)(A)(i)(II) of the FDI Act, 12

U.S.C. 1823(c)(8)(A)(i)(II).

6 ‘‘Appropriate Federal banking agency’’ is

defined at 12 U.S.C. 1813(q), in part, to mean: (1)

the Comptroller of the Currency, in the case of a

national bank; (2) the Board of Governors of the

Federal Reserve System, in the case of a state

member insured bank; (3) the FDIC, in the case of

a state nonmember insured bank; and (4) the

Director of the Office of Thrift Supervision, in the

case of any savings association.

7See section 13(c)(8)(A)(ii)(I) of the FDI Act, 12

U.S.C. 1823(c)(8)(A)(ii)(I).

8See section 13(c)(8)(A)(ii)(II) of the FDI Act, 12

U.S.C. 1823(c)(8)(A)(ii)(II).

9See section 13(c)(8)(B) of the FDI Act, 12 U.S.C.

1823(c)(8)(B).

10Assistance proposals with respect to SAIFinsured institutions under section 13(k)(5) that do

not meet all nine of the criteria in that statutory

provision may be submitted to the FDIC for

consideration under section 13(c) of the FDI Act.

Section 13(k)(5) applies only to SAIF-insured

institutions located in ‘‘economically depressed

regions,’’ and only if those institutions have certain

types of problems pre-dating the enactment of the

Financial Institutions Reform, Recovery, and

Enforcement Act of 1989. The nine criteria for

proposals submitted under section 13(k)(5) of the

FDI Act are listed in subsections (k)(5)(A)(i) (I)–(III)

and (A)(ii) (I)–(VI) of section 13 of the FDI Act, 12

U.S.C. 1823(k)(5)(A)(i) (I)–(III) and (A)(ii) (I)–(VI).

11Among the cost advantages favoring a

resolution transaction following the appointment of

a receiver for an institution are the effect of the

receivership on the contingent liabilities of the

failed institution, the potential for uninsured

depositors and other unsecured creditors to share

in the loss incurred on the institution and the

ability of the FDIC as receiver to repudiate

burdensome contracts.

Comments may be hand delivered to

Room F–402, 1776 F Street, N.W.,

Washington, D.C. 20439, on business

days between 8:30 a.m. and 5:00 p.m.

Comments may be sent through

facsimile to: (202) 898–3838 or by the

Internet to: comments@fdic.gov.

Comments will be available for

inspection at the FDIC Public

Information Center, room 100, 801 17th

Street, N.W., Washington, D.C. between

9:00 a.m. and 4:30 p.m. on business

days.

FOR FURTHER INFORMATION CONTACT: Gail

L. Patelunas, Acting Director, Division

of Resolutions, (202) 898–6779; Sean C.

Forbush, Resolutions Specialist,

Division of Resolutions, (202) 898–8506;

Barbara I. Taft, Assistant General

Counsel, Legal Division, (202) 736–

0183; Michael B. Phillips, Counsel,

Legal Division, (202) 736–0186, Federal

Deposit Insurance Corporation, 550 17th

Street, N.W., Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION:

Paperwork Reduction Act

The statement of policy does not

require any collections of paperwork

pursuant to section 3504(h) of the

Paperwork Reduction Act, 44 U.S.C.

3501 et seq. Accordingly, no

information has been submitted to the

Office of Management and Budget for

review.

Regulatory Flexibility Act

Pursuant to section 605(b) of the

Regulatory Flexibility Act, 5 U.S.C. 601

et seq., it is certified that the statement

of policy will not have a significant

economic impact on a substantial

number of small entities. In addition,

the statement of policy will not impose

regulatory compliance requirements on

depository institutions of any size.

The text of the statement of policy

follows:

FDIC Statement Of Policy on Assistance

to Operating Insured Depository

Institutions

I. Introduction

A. General Statutory Requirements

Section 13(c) of the Federal Deposit

Insurance Act, as amended (the FDI

Act), authorizes the Federal Deposit

Insurance Corporation (the FDIC) to

provide assistance to operating insured

institutions (open assistance) (1) to

prevent the ‘‘default’’ of insured

institutions or to assist acquisitions of

insured institutions that are ‘‘in danger

of default,’’ 1 or (2) if severe financial

conditions exist that threaten the

stability of a significant number of

insured institutions or of insured

institutions possessing significant

financial resources, to lessen the risk to

the FDIC posed by such insured

institutions under such threat of

instability.

In order for the FDIC to provide

assistance to an operating insured

institution, the FDIC must determine

that the assistance meets the least-cost

test set forth in section 13(c) of the FDI

Act. That section provides that the

assistance (1) must be necessary to meet

the obligation of the FDIC to provide

insurance coverage for the insured

deposits in such institution, and (2)

must be the least costly to the deposit

insurance fund of all possible methods

for meeting that obligation.2

The FDIC has the authority to provide

to an operating insured institution

assistance that does not meet the leastcost test only if the Secretary of the

Treasury (in consultation with the

President and upon the written

recommendations of two-thirds of the

Board of Directors of the FDIC and twothirds of the Board of Governors of the

Federal Reserve System) determines that

the FDIC’s compliance with the leastcost test would have adverse effects on

economic conditions or financial

stability and the assistance to the

operating insured institution would

avoid or mitigate such adverse effects

(the ‘‘Systemic Risk Exception’’).3

The FDIC may consider providing

financial assistance under section 13(c)

to an operating insured institution

before the appointment of a conservator

or receiver only if the FDIC determines

that (1) grounds for the appointment of

a conservator or receiver exist or likely

will exist in the future unless the

institution’s capital levels are

increased,4 and (2) it is unlikely that the

institution can meet all currently

applicable capital standards without

assistance.5 In addition, before the FDIC

may provide assistance to an operating

insured institution, (1) the appropriate

Federal banking agency 6 and the FDIC

must determine that, for such period of

time as the agency or the FDIC considers

to be relevant, the institution’s

management has been competent and

has complied with applicable laws,

rules, and supervisory directives and

orders,7 and (2) the FDIC must

determine that the institution’s

management did not engage in any

insider dealing, speculative practice, or

other abusive activity.8 Any

determination made by the FDIC to

provide assistance to an operating

insured institution under section 13(c)

must be made in writing and published

in the Federal Register.9

SAIF-insured institutions submitting

proposals for assistance under section

13(k)(5) of the FDI Act also must meet

the criteria contained in that statutory

provision.10

B. Timing Considerations

As section 13(c)(4) of the FDI Act

requires the FDIC to select the

resolution alternative that involves the

least cost to the relevant deposit

insurance fund, any open assistance

proposal must be evaluated on a

competitive basis with other available

resolution alternatives. Because of the

cost savings inherent in FDIC-assisted

transactions involving the appointment

of a receiver for an institution, it may be

difficult for an open assistance proposal

to be more cost effective than an

available closed institution resolution.11

Therefore, an open assistance proposal,

to be acceptable, generally must be

submitted substantially before grounds

exist for the appointment of a receiver

for the institution. Moreover, because of

the complexity of many transactional
34816 Federal Register / Vol. 61, No. 129 / Wednesday, July 3, 1996 / Notices

12See section 38(h)(3) of the FDI Act, 12 U.S.C.

1831o(h)(3).

13See 12 U.S.C. 1821(a)(4).

14See the Report of the House Committee on

Banking, Finance and Urban Affairs, H.R. Rep. No.

103, 103d Cong., 1st Sess., Part 1, at 32 (1993) and

the Conference Report accompanying the RTC

Completion Act, H.R. Rep. No. 380, 103d Cong., 1st

Sess. at 55 (1993).

15This criterion is mandatory. See section

13(c)(8)(A) of the FDI Act, 12 U.S.C. 1823(c)(8)(A).

16This criterion is mandatory. See section

13(c)(8)(A) of the FDI Act, 12 U.S.C. 1823(c)(8)(A).

17This criterion is mandatory unless the Secretary

of the Treasury makes a systemic risk

determination. See section 13(c)(4) (A) and (G) of

the FDI Act, 12 U.S.C. 1823(c)(4) (A) and (G).

Resolution alternatives must be evaluated on a

present-value basis, using a realistic discount rate.

See section 13(c)(4)(B) of the FDI Act, 12 U.S.C.

1823(c)(4)(B). This cost determination is premised

on evaluating all possible resolution alternatives

and must be made as of the date the FDIC

determines to provide section 13(c) assistance. See

section 13(c)(4)(C) of the FDI Act, 12 U.S.C.

1823(c)(4)(C). In calculating the cost of such

assistance, the FDIC must treat any tax revenues

that the U.S. Treasury would forego as a result of

an assistance transaction, to the extent they are

reasonably determinable, as revenues foregone by

the applicable deposit insurance fund.

18The regulatory capital requirements of the

respective Federal banking agencies are stated in:

(1) For the Office of the Comptroller of the

Currency, 12 CFR Part 3; (2) for the Board of

Governors of the Federal Reserve System, 12 CFR

Part 225; (3) for the FDIC, 12 CFR Part 325; and (4)

for the Office of Thrift Supervision, 12 CFR Part

567.

19 Viability may be demonstrated by pro forma

projections based on reasonable assumptions

regarding the use of the assistance, earnings, reserve

levels, asset quality trends, anticipated dividends,

and capital levels and needs. The viability

projections will be reviewed closely by the FDIC for

the reasonableness of assumptions. In addition,

under normal circumstances, enough new capital

should come from outside private sources to

represent a vote of confidence in the viability of the

assisted institution. By contrast, as an example, a

de minimus investment which gave the investor an

option on the whole institution would not represent

a market validation of the assurance of viability.

20The FDIC has determined that under 12 U.S.C.

1823(c)(4), in order to demonstrate that the least

costly resolution was selected, an assistance

transaction generally cannot be the result of a single

party negotiation, but rather must be the result of

a competitive process.

21Under 12 U.S.C. 1823(c)(5), the FDIC is

prohibited from purchasing the voting or common

stock of an insured institution. However, this

restriction does not preclude the acceptance by the

FDIC of non-voting preferred stock, warrants, or

other forms of equity or equity-equivalent

arrangements.

structures involving open assistance, the

time required to negotiate terms

acceptable to all parties and to obtain

necessary regulatory and shareholder

approvals, and the ‘‘prompt corrective

action’’ mandates of Section 38 of the

FDI Act,12 the FDIC encourages

submission of proposals for open

assistance well before grounds exist for

the institution’s closure. In general, this

timing consideration will require the

board of directors of the insured

institution to make the difficult business

judgment that the institution is likely to

fail and that the balance of their

responsibilities, including those to

depositors as well as shareholders,

compels the board to seek FDIC

assistance, and to make that judgment

before it is certain that the institution

will fail.

II. Treatment of Shareholders Under

Section 11(a)(4) of the FDI Act

Section 11(a)(4) of the FDI Act states,

in pertinent part:

Notwithstanding any provision of law

other than section 13(c)(4)(G) [of the FDI

Act], the Bank Insurance Fund and the

Savings Association Insurance Fund

shall not be used in any manner to

benefit any shareholder of—

(i) Any insured depository institution

for which the [FDIC] or the [RTC] has

been appointed conservator or receiver,

in connection with any type of

resolution by the [FDIC] or the [RTC];

(ii) Any other insured depository

institution in default or in danger of

default, in connection with any type of

resolution by the [FDIC] or the [RTC]; or

(iii) Any insured depository

institution, in connection with the

provision of assistance under this

section or section 13 with respect to

such institution, except that this clause

shall not prohibit any assistance to any

insured depository institution that is not

in default, or that is not in danger of

default, that is acquiring (as defined in

section 13(f)(8)(B) [of the FDI Act])

another insured depository institution.13

As the scope of the language of

section 11(a)(4) and related legislative

history with respect to the limitation on

the use of the relevant deposit insurance

fund for assistance under section 13(c)

of the FDI Act is not clearly

delineated,14 the FDIC will determine,

on a case-by-case basis, the application

of section 11(a)(4) to any proposal for

assistance.

III. Criteria for the FDIC’s

Consideration of Proposals for

Assistance to an Operating Insured

Institution

A proposal for assistance to an

operating insured institution will be

evaluated pursuant to the following

criteria:

A. Prerequisites for Open Assistance

Criterion 1. The FDIC must determine

that grounds for the appointment of a

conservator or receiver exist or likely

will exist in the future unless the

insured institution’s capital levels are

increased.15

Criterion 2. The FDIC must determine

that it is unlikely that the insured

institution can meet all currently

applicable capital standards without

assistance.16

B. Financial Criteria for Open

Assistance

Criterion 3. The cost of the proposal

for open assistance to the FDIC must be

determined to be the least-costly

alternative available.17 In order to

ensure that the proposal is the least

costly alternative, the FDIC will, in

many cases, also seek proposals for

resolving the insured institution on a

closed basis.

Criterion 4. The proposal must

provide for sufficient tangible

capitalization, including capital

infusions from outside private

investment sources, to meet the

regulatory capital standards of the

appropriate Federal banking agency.18

Criterion 5. The amount of the

assistance and the new capital injected

from outside sources must provide for a

reasonable assurance of the future

viability of the insured institution.19

Criterion 6. Applicants must establish

quantitative limits on all financial items

in the proposal. For example, if

applicants request indemnification from

the FDIC for certain contingent

liabilities, the proposal must include

ceilings on the FDIC’s financial

exposure.

C. Competition

Criterion 7. The FDIC will consider

the proposal within a competitive

context which provides for the

solicitation by the FDIC of interest from

qualified entities.20

D. FDIC Financial Contribution and

Repayment and Repayment

Criterion 8. The FDIC will consider,

on a case-by-case basis, whether the

proposal shall provide the FDIC with an

equity or other financial interest in the

resulting institution.21

Criterion 9. It is preferable that the

proposal for FDIC assistance provide for

repayment of such assistance in whole

or in part.

E. Impact on Shareholders and

Creditors

Criterion 10. Unless the Systemic Risk

Exception in section 13(c)(4)(G) of the

FDI Act is applicable, FDIC assistance

may not be used in any manner to

benefit any preexisting shareholder of

the insured institution, as determined

by the FDIC on a case-by-case basis. In

any event, any remaining ownership

interest of such shareholders shall be

subordinate to the FDIC’s right to

receive reimbursement for any
Federal Register / Vol. 61, No. 129 / Wednesday, July 3, 1996 / Notices 34817

22See section 13(c)(3) of the FDI Act, 12 U.S.C.

1823(c)(3).

23This criterion is mandatory. See section

13(c)(8)(A) of the FDI Act, 12 U.S.C. 1823(c)(8)(A).

The FDIC interprets section 13(c)(8)(A)(ii) of the

FDI Act that the management critrion applies to the

management of the resulting institution, including

any management retained from the predecessor

institution, but not including predecessor

management that is not retained. This interpretation

is based on the relevant statutory provisions and

their legislative history and reconciles the

management criteria of section 13(c)(8)(A)(ii) with

the statutory mandate of minimizing the cost of

resolutions and with Congress’ desire to encourage

early resolutions.

24This criterion is mandatory. See section

13(c)(8)(A) of the FDI Act, 12 U.S.C. 1823(c)(8)(A).

25 In addition, under section 18(k)(1) of the FDI

Act, the FDIC may ‘‘prohibit or limit, by regulation

or order, any golden parachute payment or

indemnification payment.’’ See 12 U.S.C.

1828(k)(1). The terms ‘‘golden parachute payment’’

and ‘‘indemnification payment’’ are defined in 12

U.S.C. 1828(k)(4) and (5)(A), respectively. See also

the FDIC’s regulations at 12 CFR part 359, which

implement section 18(k)(1).

assistance provided. Preexisting

debtholders of the insured institution

shall make substantial concessions.

F. Due Diligence

Criterion 11. Applicants must consent

to unrestricted on-site due diligence

reviews by the FDIC (or its agents) and

FDIC-monitored, on-site due diligence

reviews by all potential qualified

acquirers as determined by the FDIC

(after consultation with the appropriate

Federal banking agency).

G. Acquisition Within a Holding

Company Structure

Criterion 12. The proposal must

ensure that the assistance will benefit

the insured institution and the FDIC and

not be diverted to other purposes. If the

insured institution is a subsidiary of a

holding company, the proposal should

be structured so that FDIC assistance is

not provided to the holding company,

except where compelling reasons

require it, and then only when the

holding company acts as a conduit to

immediately provide the entire amount

of assistance to the insured institution.22

Criterion 13. If the insured institution

is a subsidiary of a holding company,

the proposal should be structured so

that available resources from the

holding company and its other

depository institution subsidiaries and/

or nondepository subsidiaries are used

to make a significant contribution

toward minimizing the financial

exposure of the FDIC.

H. Assets

Criterion 14. The FDIC may consider,

in appropriate circumstances, the

acquisition of, or loss-sharing, gainsharing and other incentive

arrangements with respect to, distressed

assets.

I. Supervisory Concerns With Respect to

Management

Criterion 15. The appropriate Federal

banking agency and the FDIC must

determine that, during such period of

time preceding the date of such

determination as the agency or the FDIC

considers to be relevant, management of

the insured institution was competent

and complied with applicable laws,

rules, and supervisory directives and

orders. In no event will such

determination, for assistance transaction

purposes, estop or impair the FDIC or

the appropriate Federal banking agency

from pursuing any enforcement, civil or

criminal remedies or redress against any

person.23

Criterion 16. The FDIC must

determine that the management of the

resulting institution did not engage in

any insider dealing, speculative

practice, or other abusive activity.24

Criterion 17. The proposal must

provide for adequate managerial

resources. Continued service of any

directors or senior ranking officers who

served in a policy-making role at the

insured institution, as may be

determined by the FDIC, will be subject

to approval by the FDIC.

Criterion 18. Any renegotiation or

termination of management contracts is

to be completed prior to the granting of

assistance. Further, the FDIC may

review and object to any or all parts of

any compensation arrangements

(including termination clauses) covering

these individuals during the period

assistance is outstanding.25 In general,

the failure to terminate a particular

management contract prior to the

granting of assistance will not stop the

FDIC or the appropriate Federal banking

agency from subsequently pursuing any

enforcement, civil, or criminal remedies

or redress against any person by reason

of such contract, unless there is a

written statement explicitly waiving

such rights that is signed by an

authorized official of the FDIC and the

appropriate Federal banking agency.

Notwithstanding the foregoing, any such

waiver must take into consideration the

requirements of 12 CFR part 359.

J. Fee Arrangements

Criterion 19. All fee arrangements

with attorneys, investment bankers,

accountants, consultants, and other

advisors and agents incident to an open

assistance proposal must be disclosed to

the FDIC and will be evaluated in

determining the cost of the assistance.

Excessive fees must be avoided.

IV. Other Information

Any proposal requesting assistance to

prevent the closing of an insured

institution should be addressed to the

appropriate FDIC regional offices of the

Division of Supervision and the

Division of Resolutions and should

provide the amount, terms, and

conditions of the assistance requested,

as well as the details of the financial

support to be provided. This

information must be presented in

sufficient detail to permit the FDIC to

estimate the maximum cost that will be

incurred as a result of the proposal and

to determine the extent to which the

proposal satisfies the criteria of this

policy statement.

The proposal must include, with

respect to the management

determinations set forth in Criteria 15,

16, 17 and 18 in Part III, information

about proposed management of the

insured institution or the resulting

institution, as applicable. Specifically,

the proposal must identify all

individuals who would exercise

significant influence over, or participate

in, major policy-making decisions of the

insured institution or the resulting

institution, without regard to title,

salary or compensation. This list would

include, without limitation, all

directors, the chief executive officer,

chief managing official (in an insured

state branch of a foreign bank), chief

operating officer, chief financial officer,

chief lending officer and chief

investment officer.

Copies of the proposal also should be

provided to (1) the Director of the

Division of Supervision, FDIC, 550 17th

Street, N.W., Washington, D.C. 20429,

(2) the Director of the Division of

Resolutions, FDIC, 550 17th Street,

N.W., Washington, D.C. 20429, (3) the

insured institution’s chartering

authority, and, (4) if approvals under

the Bank Holding Company Act are

required, the appropriate Federal

Reserve Bank.

By Order of the Board of Directors. Dated

at Washington, D.C., this 17th day of June,

1996.

Federal Deposit Insurance Corporation.

Robert E. Feldman,

Deputy Executive Secretary.

[FR Doc. 96–16904 Filed 7–2–96; 8:45 am]

BILLING CODE 6714–01–P