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Overview

The purpose of the �౦��Ϸ���� professional liability program is to recover funds for �౦��Ϸ���� receiverships and to hold accountable directors, officers, and professionals who caused losses to insured depository institutions (“IDIs”) that are later placed in �౦��Ϸ���� receivership. From 1986 through 2023, the �౦��Ϸ���� and the former Resolution Trust Corporation (“RTC”)1 recovered $10.56 billion from professional liability claims and spent $2.53 billion to fund all investigations and litigation. Of the total recoveries, $4.48 billion was recovered since the 2008 financial crisis through 2023, with $1.12 billion spent.

In addition to recovering funds, the program’s existence also enhances industry awareness of sound corporate governance standards. The �౦��Ϸ���� conducts a thorough investigation into potential professional liability claims arising from every IDI failure but pursues claims only if they are both meritorious and expected to be cost-effective.

All lawsuits are reviewed by senior �౦��Ϸ���� managers and, with limited exceptions, are approved by the �౦��Ϸ���� Board of Directors. Prior to filing a lawsuit, staff in most cases will attempt to settle with the responsible parties. Professional Liability Program Settlement Agreements entered into since 2007 are publicly available. Litigation is initiated if a settlement cannot be reached. Attorneys in the Legal Division may engage outside counsel to assist with the investigation and litigation of professional liability matters. However, whether outside counsel is involved or not, attorneys in the Legal Division manage all legal assignments and litigation and oversee settlement and litigation strategy. The �౦��Ϸ����’s in-house attorneys are always available to discuss all aspects of litigation and settlement.

Further information on the �౦��Ϸ����'s professional liability activities is available in Professional Liability Program Annual Reports, the �౦��Ϸ����'s Statement Concerning the Responsibilities of Bank Directors and Officers, Chapter 11 of Managing the Crisis: The �౦��Ϸ���� and RTC Experience; and Legal Claims and Administrative Enforcement Proceedings 2008-2013 Banking Crisis.

• 1

  The RTC was created by Congress in August 1989 to resolve savings and loan associations insured by the former Federal Savings and Loan Insurance Corporation. At the end of 1995, the RTC ceased operation and its activities were absorbed by the �౦��Ϸ����. During its existence, the RTC resolved 747 savings and loans.

• 2

  See Failed Bank List (showing failed banks since 2000).