Brea, California-based Fremont General Corp., the parent-company of subprime lender Fremont Investment & Loan, has been issued a directive from the Federal Deposit Insurance Corp. (FDIC), saying the company has until May 26, 2008 to raise capital to stay in compliance with FDIC guidelines.
Fremont confirmed the order in a press statement Friday, saying the FDIC issued the order with the California Department of Financial Institutions in agreement.
As part of the directives, Fremont has been told to either be combined with another insured depository financial platform or allow itself to be acquired. In addition, the FDIC ordered that Fremont sell “enough voting shares or obligations of the bank” to reach the right capitalization levels and divest the company from the bank.