The FDIC’s broad authority to take over failed banks and dispose of their assets includes the power to create a public-private joint venture and transfer the bank’s assets to it, a federal appeals court held on Thursday.
In a case of first impression for the federal courts, the 8th U.S. Circuit Court of Appeals rejected arguments that the FDIC’s Structured Transaction Program, which the agency has used since 2008, goes beyond the powers that Congress gave the agency in the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
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