The Paper Chase: Effects of FDIC Document Retention Policies on D&O Suits

Thomson Reuters
10 minute read | May.30.2012

As the Federal Deposit Insurance Corporation continues to pursue professional liability suits against directors and officers of failed banks, the agency's recent regulatory guidance addressing the removal or copying of internal bank documents for both failed and troubled banks has further tilted the playing field in favor of the FDIC.

By severely limiting the instances in which bank directors and officers may remove or copy documents for their own personal defense, the FDIC has significantly impeded their ability to defend themselves against potential administrative, civil, and criminal proceedings. These disadvantages are most pronounced at troubled community banks, where directors and officers generally lack the background and resources to navigate FDIC investigations and litigation.

Reprinted with permission, Thomson Reuters 2012.