FDIC Loss-Share Compliance: Lessons Learned

Failed-bank acquisitions assisted by the Federal Deposit Insurance Corporation (FDIC) pose both opportunities and risks. Some of the risks relate to the burden of complying with all of the provisions in a commercial shared-loss agreement (CSLA) and single-family shared-loss agreement (SFSLA) with the FDIC. The failure to comply can jeopardize a bank’s ability to recover on the covered losses associated with the failed bank, in turn reducing the value of the acquisition.