• On April 18, 2025, the Federal Deposit Insurance Corporation announced two separate but related actions regarding its IDI resolution planning rule.
• The FDIC waived certain content requirements under the IDI rule for the upcoming submission cycle and issued updated FAQs that explain the waivers and clarify the FDIC’s approach to its review of resolution plans and engagement with IDIs regarding their plans.
• These actions are the FDIC’s first significant actions regarding resolution planning under the Trump administration and are a welcome reduction to the informational content requirements for IDI resolution plans.

Introduction

On April 18, 2025, the Federal Deposit Insurance Corporation (the “FDIC”) announced significant shifts in its resolution planning policies for insured depository institutions (“IDIs”) under the FDIC’s IDI resolution planning rule, 12 CFR § 360.10 (the “IDI Rule”). In two separate but related actions, the FDIC waived certain content requirements under the IDI Rule (the “Waivers”) for the upcoming submission cycle and issued updated FAQs (the “April FAQs”) that explain the Waivers and clarify the FDIC’s approach to its review of resolution plans and engagement with IDIs regarding their plans.

These actions are the FDIC’s first significant actions regarding resolution planning under the Trump administration following the FDIC’s overhaul of the IDI Rule in June 2024 and subsequent release of FAQs last December under the Biden administration (the “December FAQs”). The changes come less than three months before the July 1, 2025 date when most covered IDIs (“CIDIs”) are required to file their next submissions and less than six months before the October 1, 2025 date by which all CIDIs are required to file.

Overall, the changes are a welcome reduction to the informational content requirements for IDI resolution plans and signal a shift in the FDIC’s focus from potential bridge bank resolution scenarios to whole bank sales, although CIDIs may be challenged to adjust their resolution plans to react to the new expectations in the few months remaining before plans are due.

The Acting Chairman of the FDIC, Travis Hill, previewed the release of the April FAQs and Waivers in a speech on April 8, 2025 where he discussed key policy issues at the FDIC. Substantively, the changes align with Acting Chair Hill’s previous comments on the 2024 update to the IDI Rule, both when it was proposed in 2023 and when it was finalized in 2024.

Background

The FDIC substantially revised the IDI Rule in 2024 following a multi-year process that included a moratorium in 2018, an advanced notice of proposed rulemaking in 2019, reimposition of resolution planning requirements on certain IDIs via a policy statement in 2021 and, ultimately, proposing and issuing a final updated IDI Rule in June 2024. The FDIC’s experience in the resolutions of Silicon Valley Bank, Signature Bank and First Republic Bank in early 2023, where the FDIC invoked the systemic risk exception to least-cost resolution and was required to establish bridge banks for two of the three failing banks, had a clear influence on the contents of the final IDI Rule.

The IDI Rule distinguishes between two types of CIDIs: (i) IDIs with over $100 billion in average total assets (“Group A Filers”), who are required to file full resolution plans either biennially (for U.S. global systemically important banking organizations) or triennially, and (ii) IDIs with between $50 billion and $100 billion in average total assets (“Group B Filers”), who are required to file more limited informational filings triennially, with interim supplement filings required from both Group A and B Filers in off years.

Key Waivers

Waivers Relevant to the Identified Resolution Strategies for Group A Filers

The FDIC has waived the requirements for Group A Filers to include the formation and stabilization of a bridge depository institution as the “identified strategy” for resolution and to provide “meaningful optionality” for execution across a range of scenarios, which would have required lengthy narrative descriptions of different potential resolution options tailored to the size and complexity of the CIDI. Instead, Group A Filers are asked to submit one or more identified strategies that might be suitable in different circumstances—for example, “a short discussion of a bridge bank strategy and how the CIDI could be sold in a whole bank sale.” The April FAQs suggest lengthy narrative descriptions of the strategies are not required.

The FDIC has also waived the requirement that Group A Filers develop their identified strategies utilizing a specific failure scenario wherein the CIDI is experiencing material financial distress under severely adverse economic conditions developed by the Federal Reserve Board. The FDIC will also no longer require the CIDI to provide a quantitative valuation analysis and estimates of the IDI franchise value in the failure scenario.

Waiver of Franchise Component Information for Group B Filers

Group B Filers are not required to include identified resolution strategies or failure scenarios in their informational filings under the IDI Rule, but they are required to provide information about the CIDI’s franchise and operations to support the development of strategic options for resolution of the CIDI by the FDIC. The FDIC has waived all requirements under the IDI Rule for Group B Filers to identify and discuss “franchise components,” which are defined as key components of the CIDI that could be separated and sold or divested independently of the CIDI (such as business segments, branch networks, major assets and material asset portfolios).

The goal of these requirements, which continue to apply to Group A Filers, is to provide marketing optionality by identifying components of an IDI franchise that can be sold separately, thereby reducing the size of the IDI franchise and enhancing competitive bidding. The waiver for Group B Filers likely reflects the FDIC’s view that Group B Filers are more likely to be resolved with a full bank sale over the weekend, such that detailed discussion of franchise components is unnecessary. Group B filers would, however, continue to be required to identify material asset portfolios that can be sold.

Other Waivers

All CIDIs are required to identify any activities that provide material services or functions to a specific geographic area or business sector or to other financial institutions, but the FDIC has waived the further requirement that the resolution plan or informational filing include a description of potential mitigants should those activities be terminated due to the failure of the CIDI.

The FDIC has also waived the requirement for submissions to include information on non-deposit claims and has waived various information requirements for the interim supplements that CIDIs are required to file as updates on off years when a full resolution plan or informational filing submission is not required.

Other Policy Clarifications

Capabilities Testing

The April FAQs provide an updated timeline for capabilities testing and formal engagement, stating that there will be no capabilities testing before 2026 and that the FDIC expects to conduct horizontal testing once per cycle for triennial filers. For the first submission cycle, the FDIC expects to focus its horizontal testing on the ability of Group A Filers to populate a virtual data room (“VDR”) with information to support a timely sale and disposition of the IDI franchise through a competitive bid process.

The April FAQs also clarify that the IDI Rule does not require CIDIs to have a self-assessment or capabilities testing framework but that full resolution submissions after the initial full submission should describe the results of any contingency planning or similar exercises that have been conducted by the CIDI since the most recent full resolution submission. Given the FDIC’s focus on VDR capabilities in its initial round of horizontal testing, CIDIs may wish to make testing these capabilities a priority.

Engagement

Other than informal communications conducted as part of the normal course of reviewing a submission, the April FAQs announces that the FDIC generally intends to provide three months’ notice before conducting engagement with a CIDI on resolution-related topics intended to facilitate the FDIC’s own resolution planning, and the FDIC expects to provide CIDIs with advance notice of the scope of topics to be discussed and information required. Formal engagement of this type is expected to occur only once per cycle for triennial filers.

Credibility Findings

The April FAQs announce several policy shifts regarding the FDIC’s approach to credibility findings, stating that the FDIC’s review will focus on the quality and thoroughness of the submission rather than a comprehensive verification of capabilities or evaluation of projections and the FDIC will not recommend findings related to the credibility of the plan’s identified strategy. In addition, the FDIC now expects to make a credibility determination only if a submission is determined to be “not credible” rather than issuing a determination for every submission.

Digital Services

The April FAQs clarify the IDI Rule’s requirement for resolution submissions to include a description of customer-facing digital services and electronic platforms. For initial submissions under the IDI Rule, the FDIC only expects a CIDI to describe its unique digital services and electronic platforms with low substitutability that might result in customer loyalty.

Resolution Planning Under the Trump Administration

The April FAQs and Waivers are the Trump administration’s first formal actions related to resolution planning and may be an early sign of the FDIC’s approach going forward. Notably, they align with Acting Chair Hill’s specific critiques of the 2024 update to the IDI Rule, potentially showing his current influence over resolution policy at the FDIC. Although he voted against the updates at both the proposed and final stages, Acting Chair Hill has made a point of stating he approves broadly of the exercise of resolution planning and specifically of capabilities testing, suggesting the FDIC will continue to focus on IDI resolution planning, albeit in a more targeted way.

This publication is for general information purposes only. It is not intended to provide, nor is it to be used as, a substitute for legal advice. In some jurisdictions it may be considered attorney advertising.