EARLY RESOLUTION.

SEC. 143. EARLY RESOLUTION. (a) In General.— It is the sense of the Congress that the Federal banking agencies should facilitate early resolution of troubled insured depository institutions whenever feasible if early resolution would have the least possible long-term cost to the deposit insurance fund, consistent with the least-cost and prompt corrective action provisions of the Federal Deposit Insurance Act. (b) General Principles.— In encouraging the Federal banking agencies to pursue early resolution strategies, the Congress contemplates that any resolution transaction under section 13(c) of that Act would observe the following general principles: (1) Competitive negotiation.— The transaction should be negotiated competitively, taking into account the value of expediting the process. (2) Resulting institution adequately capitalized.— Any insured depository institution created or assisted in the trans-105 STAT. 2282action (hereafter the “resulting institution”) and any institution acquiring the troubled institution should meet all applicable minimum capital standards. (3) Substantial private investment.— The transaction should involve substantial private investment. (4) Concessions.— Preexisting owners and debtholders of any troubled institution or its holding company should make substantial concessions. (5) Qualified management.— Directors and senior management of the resulting institution should be qualified to perform their duties, and should not include individuals substantially responsible for the troubled institution’s problems. (6) FDIC’s participation.— The transaction should give the Federal Deposit Insurance Corporation an opportunity to participate in the success of the resulting institution. (7) Structure of transaction.— The transaction should, insofar as practical, be structured so that— (A) the Federal Deposit Insurance Corporation— (i) does not acquire a significant proportion of the troubled institution’s problem assets; (ii) succeeds to the interests of the troubled institution’s preexisting owners and debtholders in proportion to the assistance the Corporation provides; and (iii) limits the Corporation’s assistance in term and amount; and (B) new investors share risk with the Corporation. (c) Report.— Two years after the date of enactment of this Act, the Federal Deposit Insurance Corporation shall submit a report to Congress analyzing the effect of early resolution on the deposit insurance funds.