FDIC Mailbag: Comments on the Bank Investing Proposals
The FDIC is two weeks into the comment period on its proposed rules for PE bank investments, and has begun publishing the inbox. Only three up there so far, but I'd expect a slew more to appear before the August 10 deadline. For the uninitiated, many of these rules are pointlessly punative and would literally prevent PE firms from investing in banks (troubled or otherwise). For example, a cross-guarantee requirement not only would violate a private equity fund's charter, but would create the very systemic risk that some other legislation is trying to guard against. The most pertinent comment comes from from Charles Moore, president of Banc Funds. Seems he's okay with the rules for most, but not for firms (like his) that limit their investments to less than 10% ownership. As such, he'd like a safe harbor for those at 9.9% or below. He writes, in part:
