Courts have extended the protections afforded the FDIC by the D’Oench Doctrine and 12 U.S.C. § 1823(e) to successors or assignees of the FDIC as receiver of the failed banks. This is a logical expansion when considered in light of the public policy underlying these special powers. If a borrower were allowed to assert claims or defenses based on improperly documented “agreements” (the term has been interpreted broadly) against the FDIC, the value of the assets would be unexpectedly diminished, and the powers seek to protect against that event. Conditions that may exist relating to the viability of a loan obligation must be apparent to the regulators examining the failed bank’s records and determining the bank’s worth.
Just as the FDIC must be able to rely on the failed bank records to determine the value of the assets, so too must the successor institution. Prospective acquiring institutions must be able to quickly appraise the assets of a failed bank to determine whether and what to bid to acquire those assets. If the borrower were nonetheless able to assert claims or defenses based on unrecorded agreements against the successor institution, the same diminishing of assets that the doctrine seeks to prevent would occur. Successor institutions would lose much of the incentive they may have to acquire assets from the FDIC in its receiver capacity if they could not depend on the valuation derived from the failed bank’s records, and instead had to ascertain whether there were any known or unknown claims or defenses based on unrecorded agreements.
Institutions that acquire loans from the FDIC should check to see whether their purchase agreement requires that they first obtain approval from the FDIC before asserting special powers in a pending action.