Rule Gives FDIC Power Over Contracts With Failed SIFIs' Units

Law360, New York (October 17, 2012, 8:09 PM EDT) -- The Federal Deposit Insurance Corp. on Tuesday issued a final rule mandated by the Dodd-Frank Act that prevents counterparties from breaking contracts with subsidiaries and affiliates of systemically important financial institutions simply because the parent company has gone under.

The rule gives the FDIC, as receiver of the failed institution, the authority to enforce the contracts of the SIFI subsidiaries and affiliates despite clauses that could terminate, accelerate or provide for other remedies based on the SIFI's insolvency, financial condition or receivership.

The provision of Dodd-Frank's...
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