To resolve billions in failed-bank loans that had no buyers at the point of closure, the Federal Deposit Insurance Corp. (FDIC) has formed 32 complex vehicles to carry some of the agency's load from the crisis. But not everyone is a fan of the deals.

Two building developers told lawmakers Wednesday that the FDIC's shared-equity transactions with investors are having significant unintended consequences. They said construction borrowers impacted by the deals face challenges trying to repair their loans, some of the investors compete with developers who had taken out loans from the bank, and some of the ventures have hurt real estate values in their respective markets.

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