The Board of Governors of the Federal Reserve and the Federal Deposit Insurance Corporation announced that they had completed the review of the second round of resolution plans submitted by 11 large banks. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that banking organizations with total consolidated assets of $50 billion or more periodically submit resolution plans to the Federal Reserve and the Federal Deposit Insurance Corporation. The plans are commonly referred to as living wills.
Each plan must describe the company's strategy orderly resolution in the event of the failure of the company or severe financial distress. Each plan must describe the company's strategy orderly resolution in the event of the failure of the company or severe financial distress. The agencies noted that the review of the resolution plans highlighted some improvement on from the first submissions in 2012. However multiple common failures still remain that must be addressed in the submissions next year. The next installment of plans is due no later than July 1, 2015.
Freddie Mac has agreed to sell more than a half-billion dollars in what it calls “deeply delinquent” loans from its investment portfolio to an as-yet unnamed buyer. According to Freddie Mac, the deal will relieve it from $659 million dollars in unpaid loans when the transaction completes by the end of August. This is the first such sale by the GSE, which, like its larger cousin, Fannie Mae, is looking for ways to lighten its burden, under government mandate.