INSOLVENT LENDERS From the stock market crash of 1929, to the savings and loan crisis in the 1980s, to the derivatives bubble burst of 2008, our history has seen cycles of over-expansion followed by bank failures. In an effort to regulate the financial industry and provide protection to consumers, the federal government has established numerous regulatory agencies that supervise and manage the nation’s financial institutions. There are five primary regulatory agencies in the United States, each with a different regulatory focus. They are as follows: Federal Reserve Board: The FRB is the regulatory agency of state-chartered banks that are members of the Federal Reserve System, bank holding companies, and branches of foreign banking organizations operating in the United States. Office of the Comptroller of the Currency: The OCC is a division of the Department of the Treasury, and is responsible for chartering, regulating and supervising all national banks. Federal Deposit Insurance Corporation: The FDIC operates under the direction of the OCC. This is the regulatory agency for state-chartered banks that are not members of the Federal Reserve System and for insured branches of foreign banks. The FDIC provides limited insurance against consumer deposit losses due to bank failure. Office of Thrift Supervision: The OTS is a division of the Department of the Treasury, and supervises thrift institutions. Thrift institutions are deposit institutions, but their primary goal is to provide home loans. National Credit Union Administration: The NCUA is the regulatory agency responsible for oversight of credit unions, which are membership banking organizations. When a financial institution reaches the point of insolvency, or if the appropriate regulatory agency has reason for concern that a financial institution may find itself insolvent, the foregoing regulatory agencies have the authority to appoint a receiver, effectively replacing a financial institution’s executive management. The receiver will be granted authority to either manage and sell the financial institution, or else wind down business operations and liquidate the institution’s assets. When a financial institution has been declared insolvent, or has been taken over by a regulatory agency, you should proceed with caution in any transaction involving such an institution. Although financial institutions under a receivership may advertise “business as usual” to their customers, when processing new loans or satisfying existing loans, that may not actually be the case. If you need to administer a settlement involving a financial institution that is insolvent or under the management of a receiver, you should contact your supervisory office to ensure proper procedures. Guidance may also be available in the “Bulletins” section of this guide under the heading “FDIC.” See also section entitled “Liens of the United States – Foreclosure and Redemption” in this guide. © 2009 Old Republic National Title Insurance Company All Rights Reserved 0509 .