2024 Supervisors Symposium

Coordination among States is Critical to Success • Clarity on role and responsibilities before gameday—just like with a large state bank operating in multiple jurisdictions • GSEs—very clear its FHFA—stated in the HERA statute along with all of the powers and authorities the FHFA has to resolve the GSEs and FHLB Banks. • Large Bank BHCs—the 3 keys. FDIC resolves the SIFI IF a Majority of FDIC Board/Fed Board/Treasury Secretary determine BK not feasible/would have serious effects on financial stability. Otherwise, its BK Court w FDIC for IDIs. • Benefit from the insurance regulator’s success • Consider who your ”3 keys” are in the event of a large NMC failure • Who makes the decisions to place a NMC into bankruptcy/special resolution—is their a lead state regulator? If not, then who? Do you just leave it to the company (not advisable…)…who makes the call and under what basis. Just like when you close a bank…

11

Prioritize • Focus on the big ticket items. What resolution powers do you have? • Is it just Bankruptcy? Do states have additional laws or regulations that allow for special resolution tools--like over QFCs, similarly situated claims, liquidity. • Ensure the NMC has a credible plan for accessing DIP in various adverse scenarios. • Have the NMC servicer articulate a scenario where DIP would not be forthcoming and develop a plan to mitigate that event • Don’t get caught up in the “weeds” of whether every service contract is bankruptcy remote. Start at the top. Ability to facilitate a large scale transfer of serviced customers—fsoc mentioned this 20x. • Look to large servicer failures—New Century and ResCap to see what the big issues were and make sure you have them covered.

12