At the end of December, the FDIC issued two releases related to the resolution of failed banks. The December 31 release provided an update about the FDIC rule on insured depository institution (“IDI”) resolution plans (the “IDI plan rule”).[1] The December 30 release announced updates to the materials on the FDIC’s website about the marketing and sale process for failed banks.[2] Both releases had been previewed by Chairman Travis Hill (then Acting Chairman) in remarks delivered on October 15.[3] In those remarks, Chairman Hill highlighted the FDIC’s efforts to promote a timely and competitive auction process for failed banks while reducing unnecessary burden on banks subject to the IDI plan rule.

• IDI Resolution Planning Update: The FDIC reiterated plans to propose amendments to the IDI plan rule to, at a minimum, codify the modifications to the IDI plan submission process that the agency implemented in 2025 using its waiver authority. The FDIC also announced its expectations for the timing and content of IDI plan submissions during 2026. Additionally, the FDIC provided information about the approach it will take during 2026 toward conducting capabilities testing exercises, which it plans to carry out at IDIs that filed full IDI plans in 2025 or will file full IDI plans in 2026. The exercises will focus on an IDI’s ability to quickly populate a virtual data room (“VDR”) in preparation for sale.
• Failed Bank Marketing and Sale Process Transparency: The FDIC updated its website with new information about the marketing and sale process for failed banks. The updates included the publication of template transaction documents. Notably, and in line with Chairman Hill’s prior remarks, the FDIC’s updated materials seek to accommodate greater participation by nonbank bidders for failed bank assets.

Update to IDI Plan Process

Background

IDIs with at least $50 billion in assets are required to periodically submit IDI resolution plan filings to the FDIC.[4] IDIs with $100 billion or more in assets (“Group A IDIs”) are required to submit comprehensive resolution plan filings, while those with between $50 and $100 billion in assets (“Group B IDIs”) submit shorter “informational” filings.[5]

With the exception of the IDI subsidiaries of the eight U.S. GSIBs, IDIs subject to the IDI plan rule are required to submit full resolution plans every three years, with more abbreviated interim filings (“interim supplements”) required in the off years.[6] By contrast, the IDI subsidiaries of U.S. GSIBs are required to submit full IDI plans every other year.[7] This submission alternates with the GSIBs’ submissions of holding company-level resolution plans (“Title I plans”) to the Federal Reserve and FDIC, as required under section 165(d) of the Dodd-Frank Act.[8] IDI subsidiaries of U.S. GSIBs are not required to submit any filing under the IDI plan rule during the year in which they submit a Title I plan.[9]

April 2025 Modifications to IDI Plan Rule

In April 2025, the FDIC modified its expectations for the content of IDI resolution plan submissions, but did not amend the IDI plan rule itself.[10] Rather, the FDIC issued waivers regarding the content requirements for plan submissions (the “April 2025 Waivers”) and published a related set of Frequently Asked Questions (“FAQs”).[11] The modifications were intended to focus the FDIC’s IDI resolution planning process on the operational information most relevant for (1) resolving a large bank through a weekend sale, or (2) operating the institution for a short period of time during a rapid marketing process.[12] At the time, Chairman Hill characterized the modifications as “one step in shifting [the FDIC’s] approach towards maximizing the likelihood of a lower cost and more stabilizing resolution for large regional banks.”[13]

Chairman Hill’s October Preview

Chairman Hill’s October remarks previewed the FDIC’s December 31 update. Chairman Hill noted that the April 2025 Waivers would be made permanent by future amendments to the IDI plan rule.[14] He also signaled that the FDIC would consider other ways to reduce redundancies between IDI plans and Title I plans. For example, Chairman Hill questioned the value of requiring Title I plan filers that have adopted a single point of entry (“SPOE”) strategy for resolution to continue to file IDI plans, given that under the SPOE strategy IDI subsidiaries would not enter receivership under the Federal Deposit Insurance Act.

Chairman Hill also highlighted the FDIC’s ongoing engagement with both bank and nonbank firms in their capacity as potential future bidders in the auction process for failed banks, outlining a set of planned updates to the marketing and sale process, discussed in greater detail below. He highlighted that nearly all potential bidders with which the FDIC has engaged have emphasized the importance of due diligence and the value of being able to review a VDR that contains complete, well-organized, and timely information. Chairman Hill also noted that the FDIC’s ability to quickly provide high-quality information to the bidder population affects the competitiveness of the bids that it receives and, in turn, the ultimate cost to the Deposit Insurance Fund.

Anticipated Rulemaking Proposal

In the December 31 update, the FDIC confirmed that it plans during 2026 to propose changes to the IDI plan rule to codify the April 2025 Waivers and associated FAQs.[15] The FDIC indicated that the contemplated rulemaking will propose additional changes designed to take into account lessons learned from its review of IDI plans that were submitted during 2025. The FDIC stated that these modifications will aim to eliminate distracting or low-value informational requirements, while ensuring that the information most critical to the FDIC’s ability to execute a rapid, low-cost resolution is furnished. The FDIC noted that it continues to evaluate the interplay between Title I and IDI plan requirements and will consider adjustments to address overlap between the two.

2026 IDI Plan Submission Schedule

The FDIC’s December 31 update also included information on how it would approach the schedule for 2026 IDI plan submissions while the rulemaking process proceeds.[16]

• Interim Supplements for IDI Subsidiaries of U.S. GSIBs: IDI subsidiaries of U.S. GSIBs, which had been scheduled to file full IDI plan submissions by July 1, 2026, will instead be required to submit a reduced set of content equivalent to an interim supplement.

In support of its action to reduce the scope of content required for these upcoming filings, the FDIC noted that “each U.S. GSIB has adopted a [SPOE] resolution strategy, which envisions a parent company filing for bankruptcy while the IDI and other subsidiaries remain open and operating.” The release also noted that “U.S. GSIBs are subject to the most robust resolution planning requirements under the Title I rule” and filed their most recent Title I plans in July 2025.

• Regular Submissions Still Required for Non-GSIB Group A IDIs: Group A IDIs that are not subsidiaries of U.S. GSIBs will be required to file their IDI pan submissions on July 1, 2026 as previously scheduled, subject to the current IDI plan rule as modified by the April 2025 Waivers and FAQs.[17] The FDIC noted that it “plans to provide additional waivers for valuation content that has not proven valuable during reviews of the 2025 submissions.”

The FDIC noted that this set of non-GSIB Group A IDIs “includes large [IDI] subsidiaries of firms with multiple point of entry [(“MPOE”)] strategies in their plans under the Title I Rule” and that “[r]esolution submissions under the IDI Rule from these [IDIs] have been valuable.” The release further noted that “retaining 2026 submission requirements for these filers maintains parity with similar [IDIs] that already submitted their full resolution submissions in 2025.”

• Confirmation of Filing Schedule for Group B Submissions Due on April 1 or July 1: Group B IDIs that are scheduled to file full plan submissions by April 1, 2026, or by July 1, 2026, will be required to file as currently scheduled, subject to the current IDI plan rule as modified by the April 2025 Waivers and FAQs.

• Suspension of Filings for Group B IDIs with Submissions due on October 1: Group B IDIs that are scheduled to file full resolution submissions or an interim supplement by October 1, 2026, and any IDIs that become newly subject to the IDI plan rule before the contemplated revisions are finalized will not be required to file submissions until issuance of the updated final rule.

The FDIC’s action to exempt the IDI subsidiaries of U.S. GSIBs from the requirement to make a full IDI plan submission in 2026 appears consistent with the FDIC questioning the utility of IDI plans for these institutions, as Chairman Hill suggested in October.[18]

The FDIC’s affirmation that IDI plan submissions by Group A IDIs whose parent companies follow an MPOE Title I strategy “have been valuable” may indicate an inclination to retain the substance of IDI plan requirements for these firms in the upcoming rulemaking – possibly in a fashion that is more harmonized with (and less duplicative of) the Title I plan requirements that apply to these firms. Notably, for these firms the Title I and IDI plan submissions both contemplate IDI-level resolution being undertaken by the FDIC.[19]

More broadly, the changes to the 2026 filing schedule appear to reflect the FDIC’s expectations regarding the pace of its rulemaking activity during 2026. The FDIC indicated that it “expects to have made sufficient progress through the rulemaking process” by October to make it appropriate to delay submissions for the firms that had filings due in October until the updated rule is finalized.

Capabilities Testing To Be Conducted in 2026

Finally, the FDIC provided additional detail about its plans for conducting capabilities testing exercises in 2026. For IDIs that submitted full IDI plans in 2025, the FDIC will commence its capabilities testing exercises in “early 2026.” For firms that will submit full plans in 2026, the FDIC expects to commence capabilities testing exercises in the months following the submission due date. The FDIC indicated that it will provide advance notification and instructions to IDIs that will be subject to a capabilities testing exercise approximately 30 days prior to the start date. The FDIC will not conduct IDI-specific capabilities testing exercises with respect to IDI subsidiaries of U.S. GSIBs, noting that capabilities testing for those IDIs will be conducted through the Title I plan process only.

The FDIC plans to focus its capabilities testing exercises on an IDI’s ability to populate information to the FDIC’s VDR.[20] The FDIC highlighted that a key lesson learned from the spring 2023 bank failures was the importance of being able to quickly populate a VDR to facilitate a rapid sale process.

Enhanced Transparency on Failed Bank Marketing and Sale Process

Background

When a troubled IDI is unable to independently resolve problems that may lead to failure, the FDIC steps in to attempt to sell the failed bank to a pool of qualified bidders, typically resulting in a sale to a single healthy depository institution. To arrange a sale, the FDIC conducts a marketing process in which it provides information about the bank to qualified prospective bidders to allow them to conduct due diligence and formulate their bid.[21] Historically, the FDIC has preferred resolutions to be structured as whole bank sales and generally does not separately market a bank’s assets (e.g., loan pools, real estate) apart from its deposit franchise prior to the commencement of the receivership.[22] However, any assets not assumed by the acquiror of the deposit franchise will ultimately be made available for sale as part of the administration of the receivership following the closure of the bank.[23]

As noted above, the FDIC has recently been engaging with both bank and nonbank firms in their capacity as potential future bidders in the auction process for failed banks. This engagement has focused on how to improve the marketing and sale process and remove obstacles to bids that could lower costs to the DIF.[24] In Chairman Hill’s October remarks, he noted that the agency has received feedback that the FDIC should be more transparent and proactive in its engagement with potential bidders before and during the failed bank marketing process. He indicated that the agency is updating its process and seeking to expand its engagement to educate potential bidders.

In addition, Chairman Hill stated that the FDIC is working to update its sale techniques and transaction documents to be more flexible in accommodating the range of transaction types that might be needed in resolution, including in particular bank and nonbank partnerships.[25] In his October speech, Chairman Hill highlighted that the FDIC has developed a seller financing program for nonbank bidders, to increase the ability of private equity firms and other nonbank firms to act as purchasers of failed bank assets.[26]

Updates to Franchise Marketing and Asset Sale Information on FDIC’s Website

The FDIC’s December 30 changes to its website accord with the priorities that Chairman Hill outlined in his October remarks, particularly his emphasis on promoting participation by nonbank bidders in the asset sale process. Notable changes to the material on the FDIC’s website include a new page on loan pool sales that may be offered to bank and nonbank asset buyers prior to the closure of the failing bank. This new information is notable because of the FDIC’s historical reluctance to entertain pre-failure bids on loan pools by nonbank bidders, unless made in partnership with a bank bid for the deposit franchise.

Template Documents Published

The FDIC also published template transaction documents related to both franchise sales and the sale of loan pools to asset buyers.[27] The newly published templates include:

• Franchise Sales:[28]
  • Whole Bank Purchase and Assumption Agreement
  • Whole Bank with Optional Shared Loss Purchase and Assumption Agreement
  • Basic Purchase and Assumption Agreement
  • Pre-Failure Confidentiality Agreement
• Loan Pool Sales:
  • Loan Sale Agreement
  • Financing Term Sheet (for financing provided by the FDIC to purchaser of the loan pools)
  • Purchase Money Note
  • Account Control Agreement
  • Custodial and Paying Agency Agreement
  • Security Agreement
  • Depository Trust Company (“DTC”) Eligible Global Note

The FDIC stated that it decided to publish these transaction document templates in response to feedback received during the course of its outreach on improvements to the sale process on the need to make transaction documents more readily available. The FDIC said it is considering ways to improve and modernize these form agreements and welcomes feedback. The FDIC noted that the templates would likely change over time and that the version of an agreement used for any particular transaction may be different from the posted version, due to updates or a transaction’s unique characteristics.

Notably, the new documents released in relation to loan pool sales contemplate an arrangement in which the FDIC, in its capacity as receiver of a failed bank, provides purchase money note financing to the buyer of a loan pool. This represents a concrete step toward implementation of the new seller financing program targeted at nonbank bidders that Chairman Hill referenced in his October remarks.

Implications

• The FDIC’s update regarding the IDI plan rule signals that the agency will remain focused during 2026 on efforts to address redundancies between the IDI plan and Title I plan processes, to reduce burden related to the content requirements for IDI plans, and to promote a rapid sale process.
• The information released by the FDIC in relation to the franchise marketing and asset sale process, particularly the release of the template documents, offers an increase in transparency and an opportunity for potential bidders in future auctions to enhance their preparedness to participate as purchasers when the opportunity arises. Because of the accelerated schedule under which banks are resolved, interested bidders may want to review these template documents now so as to be better prepared to engage with the FDIC at an early stage.

ENDNOTES

[1] Press Release, FDIC, FDIC Provides Update on IDI Resolution Planning for Large Banks (Dec. 31, 2025) [hereinafter IDI Plan Release], https://www.fdic.gov/news/financial-institution-letters/2025/fdic-provides-update-idi-resolution-planning-large-banks.

[2] Press Release, FDIC, FDIC Provides Additional Transparency Regarding Marketing and Sale of Failing Financial Institutions (Dec. 30, 2025) [hereinafter FDIC Website Update], https://www.fdic.gov/news/financial-institution-letters/2025/fdic-provides-additional-transparency-regarding-marketing.

[3] 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. For our related client memorandum, see S&C Memo, Acting FDIC Chairman Previews Changes to Resolution Planning and Execution: Acting FDIC Chairman Hill Offers Lessons Learned from 2023 Bank Failures and Discusses Potential Streamlining of Resolution Plan Requirements and Improvements to Failed Bank Receivership Process (Oct. 27, 2025), https://www.sullcrom.com/insights/memo/2025/October/Acting-FDIC-Chairman-Previews-Changes-Resolution-Planning-Execution.

[4] 12 C.F.R. § 360.10(a), (c).

[5] 12 C.F.R. § 360.10(a).

[6] 12 C.F.R. § 360.10(c), (e).

[7] 12 C.F.R. § 360.10(c)(1)(i).

[8] 12 C.F.R. § 360.10(e)(1)(ii); 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, 56626 (July 9, 2024); see 12 C.F.R. §§ 360.10(c)(1)(i), 381.4(a)(3); 12 U.S.C. § 5365(d)(1).

[9] 12 C.F.R. § 360.10(e)(1)(ii).

[10] Press Release, FDIC, FDIC Modifies Approach to Resolution Planning for Large Banks (Apr. 18, 2025) [hereinafter April 2025 Press Release], https://www.fdic.gov/news/press-releases/2025/fdic-modifies-approach-resolution-planning-large-banks; FDIC, Content Requirement Exemptions for Initial Submission Cycle (12 C.F.R. § 360.10) [hereinafter April 2025 Content Requirement Exemptions], 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) [hereinafter April 2025 FAQs (Amended)], 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.

[11] See 12 C.F.R. § 360.10(i)(2) regarding the FDIC’s waiver authority.

[12] April 2025 Press Release.

[13] Id.

[14] Hill Speech.

[15] IDI Plan Release.

[16] Id.

[17] Under the FDIC’s previously announced schedule, 12 of the 24 Group A IDIs that are not subsidiaries of U.S. GSIBs are scheduled to file full IDI plans by July 1, 2026. The other 12 were required to submit their full IDI plans by July 1, 2025, and must submit interim supplements by July 1, 2026. See FDIC, Press Release, FDIC Establishes Initial Submission Dates for Resolution Plans and Informational Filings for Covered Institutions (Aug. 8, 2024), https://www.fdic.gov/news/inactive-financial-institution-letters/2024/fdic-establishes-initial-submission-dates-resolution-plans.

[18] See Hill Speech (“[I]s it a good use of time and resources for domestic Title I filers that have adopted a [SPOE] strategy – which envisions a parent company filing for bankruptcy while bank subsidiaries continue operating – to continue to file IDI plans?”).

[19] See 12 C.F.R. § 360.10(a); Guidance for Resolution Plan Submissions of Domestic Triennial Full Filers, 89 Fed. Reg. 66388, 66389 (Aug. 15, 2024).

[20] The FDIC’s previously issued an FAQ on its expectations for capabilities texting exercises had indicated that the exercises would focus on the ability of Group A IDIs to create and populate their own VDR and the ability of Group B IDIs to populate a VDR provided and managed by the FDIC. See April 2025 FAQs (Amended).

[21] FDIC, Bidder Qualification (July 5, 2023), https://www.fdic.gov/franchise-sales/bidder-qualification.

[22] FDIC, Transaction Types (Dec. 30, 2025), https://www.fdic.gov/franchise-sales/transaction-types.

[23] FDIC, Loan Sales (dated June 7, 2024; updated Dec. 30, 2025), https://www.fdic.gov/asset-sales/loan-sales.

[24] Hill Speech.

[25] In the wake of the spring 2023 bank failures, the FDIC was criticized for not providing the same competitive opportunity to nonbank bidders as it did to bank bidders, which effectively prevented bank-nonbank partnerships. See Jonathan McKernan, Director, FDIC, Statement at Open Board Meeting, Reinstating Board Oversight of Failed-Bank Resolutions (Aug. 29, 2023), https://www.fdic.gov/news/speeches/2023/spaug2923h.html.

[26] The FDIC has previously offered seller financing for some transactions involving nonbank purchasers. See, e.g., Press Release, FDIC, FDIC Signature Bridge Bank Receivership Sells 20 Percent Equity Interest in Entity Holding $16.8 Billion of Commercial Real Estate Loans (Dec. 14, 2023), https://www.fdic.gov/news/press-releases/2023/pr23105.html (noting that the FDIC, as receiver, provided seller financing to facilitate the transaction).

[27] FDIC Website Update. The FDIC has historically published a variety of final transaction documents on its website, which give an indication of certain templates that have been in use over time. See, e.g., FDIC, Failed Bank Information for Signature Bank, New York (Oct. 9, 2025), https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/signature-ny.html; FDIC, Joint Venture Transaction Documents (May 30, 2025), https://www.fdic.gov/asset-sales/joint-venture-transactions-documents#39.

[28] The FDIC noted that template financing documents will also be added soon for franchise sale transactions.

This post is based on a Sullivan & Cromwell LLP memorandum, “FDIC Provides Update on Resolution Planning for Large Banks and New Transparency on Failed Bank Sale Process,” dated January 12, 2026, and available here.