Academic journal article Journal of Accountancy

The Board of Directors of the FDIC Approved a Notice of Proposed Rulemaking (NPR) to Clarify the Safe Harbor Protection in a Conservatorship or Receivership for Financial Assets Transferred by an Insured Depository Institution in Connection with a Securitization or Participation

Academic journal article Journal of Accountancy

The Board of Directors of the FDIC Approved a Notice of Proposed Rulemaking (NPR) to Clarify the Safe Harbor Protection in a Conservatorship or Receivership for Financial Assets Transferred by an Insured Depository Institution in Connection with a Securitization or Participation

Article excerpt

The Board of Directors of the FDIC approved a Notice of Proposed Rulemaking (NPR) to clarify the safe harbor protection in a conservatorship or receivership for financial assets transferred by an insured depository institution in connection with a securitization or participation.

The action was necessitated by FASB's changes in June 2009 to the accounting standards on which the FDIC's prior rule, 12 C.F.R. [section] 360.6, was based. The changes are contained in FASB Statement no. 166, Accounting for Transfers of Financial Assets, an Amendment of FASB Statement No. 140, and Statement no. 167, Amendments to FASB Interpretation No. 46(R). The standards went into effect for annual financial reporting periods beginning after Nov. 15, 2009. The changes affect whether a special-purpose entity (SPE) must be consolidated for financial reporting purposes, thereby subjecting many SPEs to GAAP consolidation requirements.

Late in 2009, the FDIC approved an Advanced Notice of Proposed Rulemaking (ANPR) (available at tinyurl.com/361q4sw) regarding what standards should be applied to securitizations seeking safe harbor treatment for transactions created after March 31, 2010. However, in March 2010, the FDIC Board extended the transitional safe harbor that permanently grandfathered securitizations or participations in process through Sept. …

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