The Financing Corporation (FICO) was a federally established mixed-ownership corporation that assumed all the assets and liabilities of the insolvent Federal Savings and Loan Insurance Corporation (FSLIC) and operated as a financing vehicle for the FSLIC Resolution Fund after the former was abolished by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).[1]

History

FICO was chartered by the Federal Home Loan Bank Board pursuant to the FSLIC Recapitalization Act of 1987.[1][2] FICO's sole purpose was for issuing bonds to finance a rebuilding of the Federal Savings and Loan Insurance Corporation (FSLIC),[3] and after FIRREA to function as a financing vehicle for the FSLIC Resolution Fund that succeeded the FSLIC. Pursuant to the Recapitalization Act, FICO was authorized to issue debentures, bonds, and other obligations subject to limitations, the net proceeds of which were to be used solely to purchase capital certificates issued by the FSLIC Resolution Fund, or to refund any previously issued obligations.[1] The Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991 terminated FICO's borrowing authority.[1][4] By that time FICO had issued bonds for $8.2 billion with fixed maturities of 30 years.[5]

After FIRREA, FICO bond payments came from Federal Deposit Insurance Corporation (FDIC) Savings Association Insurance Fund (SAIF) premiums instead of FSLIC premiums.[6] The FICO bond obligation was extended to state and national banks under the Deposit Insurance Funds Act of 1996.[7][8] FICO made its final bond payments in September 2019[5] and began dissolution the following month.[9]

Notes

  1. 1 2 3 4 OMB 2010, p. 1337.
  2. ↑ Federal Savings and Loan Insurance Corporation Recapitalization Act of 1987, Title III of the Competitive Equality Banking Act of 1987, Pub. L. 100–86, 101 Stat. 552, enacted August 10, 1987
  3. ↑ Leggett & Strand 1997, p. 179.
  4. ↑ Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991, Pub. L. 102–233, 105 Stat. 1761, enacted December 12, 1991
  5. 1 2 FDIC: FICO Assessment
  6. ↑ Leggett & Strand 1997, p. 180.
  7. ↑ Leggett & Strand 1997, p. 182.
  8. ↑ Deposit Insurance Funds Act of 1996, Subtitle G of the Economic Growth and Regulatory Paperwork Reduction Act of 1996, Title II of the 1997 Omnibus Consolidated Appropriations Act, Pub. L. 104–208 (text) (PDF), 110 Stat. 3009, enacted September 30, 1996
  9. ↑ Federal Housing Finance Agency Order 2018-OR-B-5, "In Re: FICO Dissolution"

References

  • Leggett, Keith J.; Strand, Robert W. (Fall 1997). "The Financing Corporation, Government-Sponsored Enterprises, and Moral Hazard" (PDF). Cato Journal. Cato Institute. 17 (2). Archived from the original (PDF) on 2011-03-28. Retrieved 2011-06-03.
  • Appendix, Budget of the United States Government, Fiscal Year 2010, Office of Management and Budget (OMB), 2010, archived from the original on 2011-02-18, retrieved 2011-06-03

See also

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