When a traditional nonbanking company files a case under the Bankruptcy Code, a judge is appointed to be the neutral arbiter of disputes that arise between the debtor and its creditors. Under the new insolvency regime created by Title II of the Dodd-Frank Wall Street and Consumer Protection Act (the "Act''), the Federal Deposit Insurance Corporation (the "FDIC''), who, until now, was only the receiver for banks, also may be appointed as receiver of the nonbank financial company if the Secretary of Treasury, in consultation with the President, determines that the company is in default or in danger of default, and the failure of the company would have serious adverse effects on the nation's financial stability.
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