The FDR Administration


Established in the first months of the FDR administration in 1933, the Federal Deposit Insurance Corporation (FDIC) was established to protect the funds of consumers after many of them lost everything during the first years of The Depression. In addition to protection, the FDIC has helped to establish classifications on loans to determine if they are safe or at risk. One of the classifications is substandard.

According to FDIC itself, a substandard loan is “inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.” In basic terms, it means there’s a known weakness by the loan owner which can prevent the elimination of debt. This type of loan so big that the bank can possibly lose revenue when it defaults. When this happens, the bank has to determine if they will work with the borrower to resolve the issue or if they need to take the case to court.

If it’s the latter, then much needs to be done in order to ensure the bank will receive some return on the loan. This is where financial litigation support specialists come in. These experts, such as Michael F. Richards, provide detailed depositions against these substandard properties.

When experts are called upon, they ask the attorneys in the matter if they have collected all of the necessary documents in discovery, including items like the Allowance for Loan and Lease Loss (ALLL). If not, expert witnesses can help attorneys find this information or decline to assist until discovery is completed. This process is especially important if the litigation support specialist works with someone who is arguing against the bank that the loan should be categorized as substandard.

How does one obtain a litigation specialist? If you are a bank officer, then you will most likely have information to pull from as cases like this are not rare. If fighting against the bank, your attorneys should know where to look for an expert witness. Whichever party you are, ensure you are familiar with the witness, their qualifications, and what they can provide to the case. Ask questions if needed in order to feel confident that the case will be one or at least settled in a way mutual to both parties.


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The FDR Administration

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