WASHINGTON — The Federal Deposit Insurance Corp. approved a deal Tuesday allowing CapitalSource Inc. to take over the deposits and some assets of troubled Fremont General Corp.
If completed, the deal would prevent what some analysts had predicted: the failure of Fremont’s industrial loan company. The FDIC in March demanded capital improvements by the $6 billion Fremont Investment and Loan, which had been badly damaged by the subprime meltdown.
Under the deal, CapitalSource, a Chevy Chase, Md., commercial lender, plans to fold Fremont’s $5.6 billion of deposits and 22 branches into a new California ILC chartered by the acquirer. Fremont agreed to the deal, which also includes CapitalSource’s taking over some of Fremont’s short-term investments and participating in commercial real estate loans, in April.
CapitalSource announced Friday that the California Department of Financial Institutions had approved the deal.
The California deal is CapitalSource’s second attempt at offering banking services through an ILC. In March 2007, the FDIC approved the firm’s bid to charter a Utah ILC, but CapitalSource balked over strict conditions the agency placed on the approval amid the ILC furor sparked by Wal-Mart Stores Inc.’s efforts to charter one in the state.
