FDIC Extends Rule Protecting Securities From Seizure

Law360, New York (November 12, 2009, 5:38 PM EST) -- The Federal Deposit Insurance Corp.'s board of directors has temporarily extended a safe harbor provision that protects securities backed by loans and bonds from being seized by the FDIC if the lending institution fails.

Changes to accounting rules that are due to go into effect Nov. 15 would have allowed the FDIC to seize the securitized assets. Credit card bonds had dropped in October as a result, Dow Jones reported, but some said the FDIC's action should allow credit to flow freely again.

"Today's action by...
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