On July 28, 2008, the FDIC published a Notice of Proposed Rulemaking in the Federal Register seeking to establish recordkeeping requirements for qualified financial contracts (“QFCs”) held by banks in “troubled” condition. The purpose of the Proposed Rule is to enable the FDIC, upon receivership, to make expeditious and well-informed decisions with respect to the management of a failed bank’s QFC portfolio.

Recent case law reminds practitioners and lenders to pay careful attention when drafting prepayment premium provisions in debt instruments or risk having the premiums disallowed in a borrower’s bankruptcy case.

A recent New York court decision has cleared the way for lenders to seek recovery against non-recourse carve-out, or “bad boy,” guarantors during a pending mortgage foreclosure action if a borrower files for bankruptcy. In so doing, the court answered a question that, surprisingly, was thus far apparently unanswered in a reported decision in New York: whether New York’s “one action rule” under RPAPL § 1301 bars a lender from obtaining a money judgment against a “bad boy” guarantor for the debt if a mortgage borrower files for bankruptcy while a foreclosure action is underway.

The two most recent decisions of the Supreme Court involving federal taxes illustrate how a conservative approach to statutory interpretation tends to prevail, but only with great effort, and changing constituencies.

Hall v. United States

On Friday, the Florida Office of Financial Regulation closed Progress Bank of Florida, headquartered in Tampa, Florida, and appointed the FDIC as receiver.

On Friday, the Ohio Division of Financial Institutions closed Bramble Savings Bank, headquartered in Milford, Ohio, and appointed the FDIC as receiver for the bank. As receiver, the FDIC entered into a purchase and assumption agreement with Foundation Bank, headquartered in Cincinnati, Ohio, to assume all of the deposits of Bramble Savings Bank.

On Friday, the Oregon Department of Consumer and Business Services closed Home Valley Bank, headquartered in Cave Junction, Oregon, and appointed the FDIC as receiver for the bank.

On Friday, the New York State Banking Department closed USA Bank, headquartered in Port Chester, New York, and the FDIC was appointed receiver.

On Friday, the Minnesota Department of Commerce closed Pinehurst Bank, headquartered in Saint Paul, Minnesota. As receiver, the FDIC entered into a purchase agreement with Coulee Bank, headquartered in LaCrosse, Wisconsin, to assume all of the deposits of Pinehurst Bank.

Yesterday, the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico closed Westernbank Puerto Rico, headquartered in Mayaguez, Puerto Rico, and the FDIC was appointed receiver.