The Federal Deposit Insurance Corp. (FDIC) will not exercise its authority under the Dodd-Frank Act to reclaim or recover assets transferred by a financial company into a securitization, said FDIC acting FDIC General Counsel, Michael Krimminger in a letter to the industry.

Krimminger said that the FDIC will apply sale principles under bankruptcy law instead of determinations under the FDIC’s repudiation authority to decide how it will treat securitizations by a covered financial firm placed in a receivership. The interpretation will remain effective for securitizations issued until at least June 30.

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