On October 15, Travis Hill, Acting Chairman of the Federal Deposit Insurance Corporation (who has been nominated to permanently lead the agency) delivered a speech titled “Resolution Readiness and Lessons Learned from Recent Large Bank Failures” at the EU Single Resolution Board’s 10th Anniversary Conference. In his remarks, Acting Chairman Hill previewed changes the FDIC is considering to streamline resolution plan requirements. He also shared his views on resolution planning and the FDIC’s management of failed bank receiverships, influenced by lessons learned from the spring 2023 failures of Silicon Valley Bank, Signature Bank, and First Republic Bank.

• Resolution planning: Acting Chairman Hill reiterated his previously expressed view that the FDIC’s current insured depository institution (“IDI”) resolution plan rule overemphasizes a bridge bank strategy, in which the FDIC operates a failed bank in receivership for an extended time, relative to the more traditional approach of executing a weekend sale. He indicated that the FDIC’s April 2025 waiver of certain content requirements (including the requirement for large IDIs to analyze a bridge bank strategy) for the current cycle of IDI resolution plan submissions would be made permanent by rule, and suggested that the FDIC would look at other ways to reduce redundancies between the FDIC IDI resolution plans and the holding company-level resolution plans that large financial institutions are required to submit to the Federal Reserve and the FDIC under the Dodd-Frank Act.
• Failed bank marketing and receivership: The second major focus of the speech was the FDIC’s management of the auction process for failed banks. Acting Chairman Hill emphasized a need for the FDIC to be more transparent and flexible when marketing failed banks. In addition to highlighting operational improvements the FDIC has made to enhance its ability to resolve banks quickly and effectively, he indicated that the FDIC would reevaluate its screening criteria for potential acquirers permitted to bid in failed bank auctions and would work to make it easier for non-banks to bid on the assets of failed banks.

If Acting Chairman Hill’s indicated reforms are carried out, they could significantly reduce the burden of resolution planning requirements on IDIs. They could also result in a more competitive auction process for sales of failed banks by increasing the number of bidders.

Resolution Planning

Background

The first portion of Acting Chairman Hill’s remarks^[1] focused on the FDIC’s IDI resolution plan rule. Large banking organizations are required to prepare two separate types of resolution plans. First, insured depository institutions (“IDIs”) with at least $50 billion in assets are required periodically to submit IDI resolution plan filings to the FDIC. Under the FDIC’s IDI plan rule, most IDIs are required to submit full resolution plans every three years, with more abbreviated interim filings required in the off years; the eight U.S. Global Systemically Important Banks (“GSIBs”) are required to submit IDI plans every other year. IDIs with $100 billion or more in assets are required to submit comprehensive resolution plan filings, while those with between $50 and $100 billion in assets submit shorter “informational” filings. Second, under section 165(d) of the Dodd-Frank Act, large domestic or foreign banking organizations with $250 billion or more in total consolidated assets are required to submit holding company-level resolution plans to the Federal Reserve and the FDIC jointly every two or three years.[2]

The current IDI plan rule, adopted by the FDIC in June 2024,^[3] requires all IDIs with at least $100 billion in assets to articulate an identified strategy for resolving the bank in the event of failure, and requires that the strategy generally contemplate the formation and operation by the FDIC of a bridge bank.^[4] Since the time of its adoption, Acting Chairman Hill has been critical of this requirement and has expressed skepticism about the practical usefulness of the bridge bank resolution approach. Consistent with these views, in April 2025 the FDIC modified its approach to IDI resolution planning for the current submission cycle, waiving the bridge bank strategy requirement along with certain other content requirements under the IDI plan rule (the “April 2025 Waivers”).^[5]

De-emphasizing Bridge Bank Strategies and Making Recent Content Waivers for IDI Plans Permanent

Acting Chairman Hill reiterated his previous skepticism of bridge bank resolutions, noting that “given the plethora of challenges and costs associated with running a bridge bank, in my view, the primary goal for resolution planning for large regional banks should be to maximize the likelihood of the optimal resolution outcome, which is generally a weekend sale.”[6] He noted that the April 2025 Waivers, intended to implement this goal, have allowed banks “to focus their attention more closely on the most critical elements the FDIC would need to market a failed bank, as well as those that would enable us, or a potential bidder, to understand its internal operations.”[7] He announced that the FDIC has begun work on a rulemaking proposal that would, at a minimum, make permanent the April 2025 Waivers and associated clarifications that were issued in the form of FAQs, and noted that the FDIC is also “evaluating other content elements that could be adjusted or streamlined to further improve the value of these filings.”[8]

Addressing the Overlap Between IDI and 165(d) Resolution Plans

Acting Chairman Hill also discussed the interplay between the bank-level plans submitted to the FDIC under the IDI plan rule and the holding company-level plans submitted jointly to the FDIC and the Federal Reserve under section 165(d) of the Dodd-Frank Act. Filers of 165(d) plans adopt either a single point of entry (“SPOE”) strategy, in which only the top-tier U.S. holding company enters resolution (through a bankruptcy proceeding), or a multiple point of entry (“MPOE”) strategy, in which the bank entity is resolved through an FDIC receivership, the holding company is resolved in a bankruptcy proceeding, and other subsidiary entities enter their own resolution proceedings as necessary. The Federal Reserve and FDIC have not mandated the selection of a particular strategy and have emphasized that a firm’s selection of its strategy should reflect the characteristics of the firm and its operations.^[9]Nonetheless, the agencies appear to have encouraged SPOE as the 165(d) strategy for the U.S. GSIBs and all the U.S. GSIBs have adopted SPOE.^[10] Entry of an IDI subsidiary into an FDIC receivership—which must be analyzed in resolution plans under the IDI plan rule—runs fundamentally counter to the intended operation of a holding company-level SPOE strategy. For firms that have adopted MPOE strategies, the current requirements for IDI plans and 165(d) plans, though not identical, have significant overlap as both plans must address in detail the resolution of the IDI.

In light of these considerations, Acting Chairman Hill questioned whether preparing IDI plans at all is productive for domestic firms that have adopted SPOE 165(d) plans, as well as whether there are ways to substantially reduce redundancies between the IDI plans and 165(d) plans for filers that have adopted an MPOE strategy for 165(d) purposes.

Failed Bank Marketing and Receivership

The other major focus of Acting Chairman Hill’s remarks was the FDIC’s own management of failed bank receiverships. He touched on a number of areas in which the FDIC is working to enable a fast, transparent and flexible sales process for failed institutions that will minimize cost to the DIF. Acting Chairman Hill reviewed various aspects of the failed bank auctions which the FDIC ran in spring 2023 that attracted criticism from the banking industry, regulators and lawmakers. He noted the FDIC is in the process of gathering input from potential bidders on possible improvements to the bidding process, and highlighted specific areas where the FDIC is looking to make improvements:

Expanding Bidder Eligibility and Auction Participation

Acting Chairman Hill announced that the FDIC plans to reevaluate the bidder eligibility criteria it applies to determine the set of eligible participants in failed bank auctions.^[11] The manner in which institutions were invited to bid during the spring 2023 bank failures has been the subject of controversy. For instance, press reports claimed that the bidder list in the initial auction for Silicon Valley Bank was unduly restricted by the FDIC, to the detriment of the competitive process and ultimately the DIF.^[12]

Although Acting Chairman Hill acknowledged “a balance to be struck between (1) maximizing the number of bidders and (2) ensuring that bidders have the financial and operational capacity to take on a failed bank transaction,” he argued that the current criteria are overly restrictive and suggested that some increased risk of future problems at potential bidders may be outweighed by the risk of a failed auction or a suboptimal auction result if the bid list is overly restricted.^[13] He also noted that the changes to bank supervision and ratings being undertaken by the FDIC and other banking agencies will themselves have the effect of expanding the bidder because fewer banks will have unsatisfactory supervisory ratings that would disqualify them from bidding.^[14]

Acting Chairman Hill further noted that under his leadership the FDIC has worked to expand the ability of nonbanks to participate in the receivership marketing process, in recognition of the fact that “[t]oday, nonbanks control substantial pools of capital that can be deployed to bid on assets of failed institutions and can be used in partnership with banks to bid on entire institutions.”^[15] Work in this area includes an ongoing effort to develop a bidder pre-qualification program for nonbank firms that are interested in participating in future auctions. Acting Chairman Hill announced that an initial pilot pre-qualification process will begin in January 2026 focusing on nonbank bidders who participated in the asset sale process in certain recent failures. A more general pre-qualification process and application form are expected to be released later on the basis of feedback from the pilot program. Acting Chairman Hill also noted the FDIC’s intention to adopt a new “seller financing” program for nonbank bidders, in which the FDIC would use its broad receivership powers to extend financing arrangements to eligible nonbank bidders in connection with their bid proposals.^[16]

Operational Improvements

Acting Chairman Hill noted the FDIC would be making a range of updates to standard form transaction documents to make them more flexible and better able to accommodate the sale of large or complex financial institutions. He also noted that the FDIC has made various internal operational improvements to prepare itself to resolve failed banks more quickly and efficiently, including by instituting systems improvements, better internal training, and updates to the model the FDIC uses to assess potential resolution options against its statutory mandate to resolve failed banks in the manner that is least costly to the DIF. He indicated that the updated least cost test model requires less manual input and will allow the FDIC to evaluate bids more quickly and consider more complex transaction proposals.

Acting Chairman Hill also noted that the FDIC has received feedback on the importance to bidders of being able to promptly access a complete and well-organized virtual data room (“VDR”) to prepare their bids, and he indicated that the FDIC may begin to routinely include certain “off-the-shelf” reports of the failed IDI (such as internal risk management reports and liquidity data) within marketing VDRs in the future.

Receivership Funding

Finally, Acting Chairman Hill discussed the manner in which the FDIC finances receiverships. He criticized the FDIC’s decision to allow post-failure discount window borrowings by Silicon Valley Bridge Bank and Signature Bridge Bank, as well as pre-failure borrowings by First Republic Bank, to remain outstanding for a number of months at a “penalty rate,” echoing prior criticisms.^[17] He also noted that the FDIC is working with the Federal Financing Bank on a process for quickly securitizing assets assumed from failed IDIs, which could allow the FDIC to finance receiverships at significantly lower cost to the DIF.

Implications

• The April 2025 Waivers represented a rejection of a fundamental element of the IDI plan rule as it was revised in 2024 under prior FDIC leadership; Acting Chairman Hill’s remarks make clear that the FDIC will continue to de-emphasize bridge bank solutions in favor of planning designed to facilitate a weekend sale approach where possible.
• Acting Chairman Hill’s remarks indicated potential openness to eliminating the IDI plan requirement altogether for SPOE filers and streamlining such requirements substantially for MPOE filers. Although it remains to be seen whether significant streamlining will in fact be proposed, the commitment at a minimum to make permanent the April 2025 Waivers through adoption of a revised IDI plan rule will reduce the burden of preparing future plans.
• Whether the FDIC will push back or pause the IDI plan submissions currently due in 2026 to enable the contemplated revisions to the IDI plan rule to take place in advance of the most intense phase of the work cycle necessary to prepare such plans remains an important open question.
• An expanded range of bidder participation in failed bank auctions—including by nonbanks—could lead to more competitive bids, reduced costs to the DIF, and could make unsuccessful auctions less likely in the event of larger bank failures, reducing the likelihood that a bridge bank will need to be deployed.
• Both bank and nonbank firms interested in potentially participating in future auction processes should consider reviewing their preparedness to participate under the updated format taking shape as a result of these FDIC initiatives and consider direct engagement with the FDIC.

ENDNOTES

[1] Travis Hill, Acting Chairman, FDIC, Speech at the EU Single Resolution Mechanism 10th Anniversary Conference: Resolution Readiness and Lessons Learned from Recent Large Bank Failures (Oct. 15, 2025) [hereinafter Hill Speech], https://www.fdic.gov/news/speeches/2025/resolution-readiness-and-lessons-learned-recent-large-bank-failures.

[2] Dodd-Frank Wall Street Reform and Consumer Protection Act § 165(d), 12 U.S.C. § 5365(d); Regulation QQ, 12 C.F.R. part 243 (2025).

[3] Resolution Plans Required for Insured Depository Institutions With $100 Billion or More in Total Assets; Informational Filings Required for Insured Depository Institutions With at Least $50 Billion but Less Than $100 Billion in Total Assets, 89 Fed. Reg. 56620 (June 20, 2024) (codified at 12 C.F.R. § 306.10). For our client memorandum, see S&C Memo, IDI Resolution Plans: FDIC Finalizes Revisions to Insured Depository Institution Resolution Planning Rule (June 26, 2024), https://www.sullcrom.com/insights/memo/2024/June/‌FDIC-Finalizes-Revisions-Insured-Depository-Institution-Resolution-Planning-Rule.

[4] 12 C.F.R. § 360.10(d)(1)(ii) (2025).

[5] Press Release, FDIC, FDIC Modifies Approach to Resolution Planning for Large Banks (Apr. 18, 2025), https://www.fdic.gov/news/press-releases/2025/fdic-modifies-approach-resolution-planning-large-banks; Content Requirement Exemptions for Initial Submission Cycle (12 C.F.R. § 360.10), FDIC, https://www.fdic.go‌v/content-requirement-exemptions-initial-submission-cycle-12-cfr-ss-36010.pdf; FDIC, IDI Resolution Planning Rule Frequently Asked Questions (FAQs) (Aug. 15, 2025), https://www.fdic.gov/resolutions/idi-resol‌ution-planning-rule-frequently-asked-questions-faqs. For our related client memorandum, see S&C Memo, IDI Resolution Plans: FDIC Modifies Approach to Insured Depository Institution Resolution Planning, Issues Updated FAQs on IDI Rule (May 2, 2025), https://www.sullcrom.com/insights/memo/2025/May/FDIC-Issues-Updated-FAQs-Resolution-Plan-Rule-Insured-Depository-Institutions.

[6] Hill Speech.

[7] Id.

[8] Id.

[9] Guidance for Resolution Plan Submissions of Domestic Triennial Full Filers, 89 Fed. Reg. 66388, 66398 (Aug. 9, 2024).

[10] Advance Notice of Proposed Rulemaking, Resolution-Related Resource Requirements for Large Banking Organizations, 87 Fed. Reg. 64170, 64172 (Oct. 18, 2022) (“As described in the public sections of their resolution plans, the U.S. GSIBs have all adopted a single-point-of-entry (SPOE) resolution strategy.”).

[11] The precise details of the current criteria have long been somewhat opaque, and although the FDIC ultimately publishes the names of banks that submit unsuccessful bids in a failed bank auction, it does not disclose the list of banks that were invited to bid. The FDIC notes that IDIs “qualify for acquisitions based on location, total assets, capital level, and regulatory ratings,” and in certain cases, based on designation as a minority depository institution. Franchise Sales: Bidder Qualification, FDIC (July 5, 2023),https://www.fdic.gov/franchi‌se-sales/bidder-qualification. A 2017 FDIC Office of Inspector General report indicated that the criteria applicable at that time to qualify as an eligible bidder included a composite CAMELS rating and a CAMELS management component rating of 1 or 2, a capital category of at least “adequately capitalized” for prompt corrective action purposes, adequate loss reserves, at least a “satisfactory” CRA performance rating, a satisfactory BSA/AML record, and generally that the acquiring institution is larger than the failed bank target. FDIC Off. of Inspector Gen., Rep. No. AUD-17-005, Material Loss Review of Seaway Bank and Trust Company, Illinois 18 (Aug. 2017), https://www.fdicoig.gov/sites/default/files/reports/2022-08/17-005AUD.pdf. The FDIC may also exclude a bidder if its state or federal supervisory authority objects.

[12] Liz Hoffman & Gina Chon, Why the biggest banks were first shut out of bidding on Silicon Valley Bank, Semafor (Mar. 14, 2023), https://www.semafor.com/article/03/14/2023/largest-us-banks-first-shut-out-of-silicon-valley-bank-bid; Saleha Mohsin, Hannah Levitt & Allyson Versprille, SVB Hunts for a Buyer After Tense, Dragged-Out FDIC Sale Failed, Bloomberg (Mar. 16, 2023), https://www.bloomberg.com/news/articles‌/2023-03-16/svb-hunts-for-a-buyer-after-tense-dragged-out-fdic-sale-failed.

[13] Hill Speech.

[14] Id. n.11. For more on the supervisory reforms underway at the banking agencies, see S&C Memo, FDIC and OCC Issue Proposal to Define ‘Unsafe or Unsound Practice’ and Constrain Issuance of Matters Requiring Attention (Oct. 14, 2025), https://www.sullcrom.com/insights/memo/2025/October/FDIC-OCC-Issue-Proposal-Define-Unsafe-Unsound-Practice-Limit-MRAs; and S&C Memo, Revisions to the Large Financial Institution Rating System (July 16, 2025), https://www.sullcrom.com/insights/memo/2025/July/Revisi‌ons-Large-Financial-Institution-Rating-System.

[15] Hill Speech.

[16] In August 2023, then-FDIC Director Jonathan McKernan expressed the view that the FDIC should have done more to enable participation by nonbank acquirors in the auction of First Republic’s assets, potentially increasing costs to the DIF. Jonathan McKernan, Director, FDIC, Statement on Reinstating Board Oversight over Failed Bank Resolutions n.3 (Aug. 29, 2023), https://www.fdic.gov/news/speeches/2023/spaug2923h.ht‌ml (“While some nonbanks were admitted to the auction, the FDIC did not extend to nonbank bidders the same generous financing and loss-share terms that it offered to bank bidders.”).

[17] See, e.g., Travis Hill, Vice Chairman, FDIC, Speech at the American Enterprise Institute: Reflections on Bank Regulatory and Resolution Issues (July 24, 2024), https://www.fdic.gov/news/speeches/2024/reflections‌-bank-regulatory-and-resolution-issues.

This post comes to us from Sullivan & Cromwell LLP. It is based on the firm’s memorandum, “Acting FDIC Chairman Previews Changes to Resolution Planning and Execution,” available here.