California Department of Financial Protection and Innovation Seizes Control of First Republic Bank, Appoints FDIC as Receiver

Early Monday morning, the California Department of Financial Protection and Innovation (DFPI) seized control of First Republic Bank, making it the third financial institution to be taken under government control this year. The DFPI appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.

The FDIC then accepted a bid from JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all deposits, including all uninsured deposits, and substantially all assets of First Republic Bank. JPMorgan Chase will take over all deposits and most of the assets of First Republic Bank.

The DFPI said it acted under California law regarding a financial entity the law describes as “conducting its business in an unsafe or unsound manner.” The DFPI said it had taken over San Francisco-based First Republic and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.

The FDIC said it would provide additional information about the closure of First Republic Bank, including the cost to the Deposit Insurance Fund, as soon as it was available. The FDIC also said it would provide information about the availability of First Republic Bank’s deposits and other services.

The takeover of First Republic Bank by JPMorgan Chase is the third financial institution to be taken under government control this year. It is unclear at this time what the long-term implications of this takeover will be, but it is clear that the FDIC and DFPI are taking steps to ensure the safety and soundness of the financial system.