Least Cost Exception Act

This bill allows the Federal Deposit Insurance Corporation (FDIC) to waive the least-cost resolution requirement for failed insured depository institutions and use alternative methods of resolution, particularly alternatives that do not involve global systemically important banks (G-SIBs).

Under current law, the FDIC must use the resolution method (such as a deposit payoff or the purchase and assumption of a bank’s assets and liabilities) that costs the FDIC's Deposit Insurance Fund the least to implement when an insured depository institution fails.

The bill provides an exception to this requirement if the following criteria are met:

the alternative method is the least costly of all alternatives that do not involve a G-SIB and that do not exceed the cost of liquidation;

Summary by the Congressional Research Service.