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Why D’Oench, Duhme? An Economic, Legal, And Philosophical Critique Of A Failed Bank Policy, Richard E. Flint
Why D’Oench, Duhme? An Economic, Legal, And Philosophical Critique Of A Failed Bank Policy, Richard E. Flint
Faculty Articles
In 1942, the Supreme Court handed down its decision in the case of D’Oench, Duhme, & Co. c. FDIC. This decision established an equitable estoppel under the umbrella of federal common law to protect the insurance fund of the Federal Deposit Insurance Corporation (FDIC) from secret agreements between borrowers and banks which misrepresented the value of a bank’s assets.
In the last fifty years, the D’Oench doctrine has been greatly expanded by the courts, and its purported legislative counterpart, 12 U.S.C. Section 1823(e) has enjoyed similar expansion. More recently, courts have even created a fiction by holding that the FDIC …