Protecting the American Taxpayers: Assigning the FDIC's Six Year Statute of Limitations to Third Party Purchasers

Abstract

Investigates a new act enacted by Congress, to facilitate the efficient and speedy recovery of failed institution assets, the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which increased the powers and legal rights of the Federal Deposit Insurance Corporation (FDIC). The article discusses extending the FDIC's six year limitations period to third party purchasers in order to: (1) protect the dwindling FDIC insurance fund; (2) keep the FDIC from incurring any more debt in the private sector; (3) lessen the burden that will ultimately be pushed upon the taxpayer, and (4) keep the responsibility for that debt on the proper party: the debtor himself. This extension will help alleviate some of the costs associated with bank failures.