Assets -> cash -> forgive any loans to the people who had accounts -> payoff FDIC insured accounts -> distribute remainder according to the courts
This is what happened for US customers with both loans and unsecured accounts. bank #2 says they dont have to forgive the loans specifically for some customers.
FDIC takes over bank -> FDIC allows people to pay off their loans with the same bank using funds at the same bank -> FDIC pays off insured accounts and takes on debt from the bank -> Sells Assets -> Uses cash to pay itself back by being first in line with the courts.
If it gets to Bank #2, it's not their problem and they specifically don't have to. Also, this wasn't a US bank! It wasn't under FDIC control. That payoff happens before bankruptcy. If the FDIC doesn't take over your bank it doesn't apply.
>Also, this wasn't a US bank! It wasn't under FDIC control
That's the part that I disagree with. My understanding is that FDIC took possession and sold off the International loans to bank number two, but did not discount them by the international account balances.
It doesn't seem right to me that the FDIC can say "it's not my problem we don't have control“ while simultaneously taking and selling the international loans
Which they are, and FDIC now has to choose whether it's going to take back the loans it's sold off to pay the account holders.
This isn't about what happens to FDIC insured accounts, it's about how to apply pre-existing FDIC policy for handling non-insured accounts. The regulation is very clear on how not insured accounts get offset in some cases and the regulations are unclear or discretionary in other cases.
This goes full circle back to my original point that if the FDIC takes control of the International loans, but they should deduct the value of that counts from those loans, just like they did for the majority of the customers
Assets -> cash -> forgive any loans to the people who had accounts -> payoff FDIC insured accounts -> distribute remainder according to the courts
This is what happened for US customers with both loans and unsecured accounts. bank #2 says they dont have to forgive the loans specifically for some customers.