FDIC seal

The FDIC’s October 11, 2023 proposal will, among other things:

  • Represent a sharp departure from existing sound governance practices of the federal banking agencies, governing state law, and widely accepted best practices
  • Hamper bank directors in exercising their fiduciary duties and reasonable business judgment and from tailoring governance practices to their individual bank
  • Detract from safety and soundness by discouraging or preventing qualified persons from serving on bank boards or hampering directors’ exercise of their fiduciary duties and business judgment by discouraging them from taking reasonable, controlled risks for the benefit of their institution’s shareholders
  • Make bank directors guarantors of their bank’s success
  • Impose management functions on bank directors
  • Require bank directors to owe a fiduciary duty not just to shareholders but also banking agencies and other constituencies, which might be in conflict with each other
  • Require a majority of some bank boards to consist of members who do not serve on the parent company board or boards of affiliates
  • Add materially to the reports to the board, exacerbating the burdens already placed on bank boards
  • Authorize and encourage banks to nominate and elect directors based on race, color, gender, and other suspect classifications, in violation of the U.S. Constitution
  • Fail to acknowledge that directors should be selected solely on merit

AABD joined BPI in submitting a comment letter to the FDIC, urging it to withdraw the proposal.