This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

47489 

Vol. 74, No. 178 

Wednesday, September 16, 2009 

1See Section 13(c)(4)(G) of the Federal Deposit 

Insurance Act (FDI Act), 12 U.S.C. 1823(c)(4)(G). 

The determination of systemic risk triggered the 

FDIC’s authority—‘‘in its sole discretion and upon 

such terms and conditions as the [FDIC’s] Board of 

Directors may prescribe—to take actions to avoid or 

mitigate serious adverse effects on economic 

conditions or financial stability. See also Section 

9(a)Tenth of the FDI Act, 12 U.S.C. 1819(a)Tenth. 

The FDIC implemented the TLGP in response. 

2 73 FR 64179 (October 29, 2008). This interim 

rule was finalized and a final rule was published 

in the Federal Register on November 26, 2008. 73 

FR 72244 (November 26, 2008). 

3 74 FR 26521 (June 3, 2009). 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 370 

RIN 3064–AD37 

Expiration of the Issuance Period for 

the Debt Guarantee Program; 

Establishment of Emergency 

Guarantee Facility 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The FDIC is issuing this 

Notice of Proposed Rulemaking to 

present two alternatives for phasing out 

the Debt Guarantee Program (DGP), a 

component of the Temporary Liquidity 

Guarantee Program (TLGP). 

Under the first alternative, the DGP 

would conclude as provided in the 

current regulation. Thus, insured 

depository institutions (IDIs) and certain 

other participating entities would be 

permitted to issue FDIC-guaranteed debt 

no later than October 31, 2009, with the 

FDIC’s guarantee for such debt expiring 

no later than December 31, 2012. 

Under the second alternative, the DGP 

would expire as indicated above; 

however, the FDIC would establish a 

limited six-month emergency guarantee 

facility to be made available in 

emergency circumstances to insured 

depository institutions (IDIs) and certain 

other entities participating in the DGP 

upon application to and with the prior 

approval of the FDIC. Under the 

proposed emergency guarantee facility, 

the FDIC would guarantee senior 

unsecured debt issued on or before 

April 30, 2010. The emergency 

guarantee facility would be available on 

a limited, case-by-case basis to insured 

depository institutions (IDIs) 

participating in the DGP and to other 

entities participating in the DGP that 

have issued FDIC-guaranteed debt under 

the DGP by September 9, 2009. Entities 

seeking to participate in the emergency 

guarantee facility would be required to 

submit an application to the FDIC on or 

before April 30, 2010, and demonstrate 

an inability to issue non-guaranteed 

debt to replace maturing senior 

unsecured debt as a result of market 

disruptions or other circumstances 

beyond the entity’s control. If approved 

by the FDIC, senior unsecured debt 

issued under the emergency guarantee 

facility would be guaranteed by the 

FDIC until a date no later than 

December 31, 2012, and would be 

subject to an annualized participation 

fee of at least 300 basis points. 

DATES: Written comments must be 

received by the FDIC by October 1, 

2009. 

ADDRESSES: You may submit comments 

on the Notice of Proposed Rulemaking, 

by any of the following methods: 

• Agency Web Site: http:// 

www.FDIC.gov/regulations/laws/ 

federal/notices.html. Follow 

instructions for submitting comments 

on the Agency Web Site. 

• E-mail: Comments@FDIC.gov. 

Include RIN # 3064–AD37 on the 

subject line of the message. 

• Mail: Robert E. Feldman, Executive 

Secretary, Attention: Comments, Federal 

Deposit Insurance Corporation, 550 17th 

Street, NW., Washington, DC 20429. 

• Hand Delivery: Comments may be 

hand delivered to the guard station at 

the rear of the 550 17th Street Building 

(located on F Street) on business days 

between 7 a.m. and 5 p.m. 

Instructions: All comments received 

will be posted generally without change 

to http://www.fdic.gov/regulations/laws/ 

federal/final.html, including any 

personal information provided. 

FOR FURTHER INFORMATION CONTACT: (for 

questions or comments related to 

applications) Lisa D Arquette, Associate 

Director, Division of Supervision and 

Consumer Protection, (202) 898–8633 or 

larquette@fdic.gov; Serena L. Owens, 

Associate Director, Supervision and 

Applications Branch, Division of 

Supervision and Consumer Protection, 

(202) 898–8996 or sowens@fdic.gov; Gail 

Patelunas, Deputy Director, Division of 

Resolutions and Receiverships, (202) 

898–6779 or gpatelunas@fdic.gov; 

Donna Saulnier, Manager, Assessment 

Policy Section, Division of Finance, 

(703) 562–6167 or dsaulnier@fdic.gov; 

Munsell St. Clair, Chief, Bank and 

Regulatory Policy Section, Division of 

Insurance and Research, (202) 898–8967 

or mstclair@fdic.gov; Robert C. Fick, 

Counsel, Legal Division, (202) 898–8962 

or rfick@fdic.gov; or A. Ann Johnson, 

Counsel, Legal Division, (202) 898–3573 

or aajohnson@fdic.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The FDIC adopted the TLGP in 

October, 2008 following a determination 

of systemic risk by the Secretary of the 

Treasury (after consultation with the 

President) that was supported by 

recommendations from the FDIC and 

the Board of Governors of the Federal 

Reserve System (Federal Reserve).1 The 

TLGP is part of a coordinated effort by 

the FDIC, the U.S. Department of the 

Treasury (Treasury), and the Federal 

Reserve to address unprecedented 

disruptions in credit markets and the 

resultant difficulty of many financial 

institutions to obtain funds and to make 

loans to creditworthy borrowers. 

On October 23, 2008, the FDIC’s 

Board of Directors (Board) authorized 

the publication in the Federal Register 

of an interim rule that outlined the 

structure of the TLGP.2 Designed to 

assist in the stabilization of the nation’s 

financial system, the FDIC’s TLGP is 

composed of two distinct components: 

the DGP and the Transaction Account 

Guarantee Program (TAG program). The 

DGP initially permitted participating 

entities to issue FDIC-guaranteed senior 

unsecured debt until June 30, 2009, 

with the FDIC’s guarantee for such debt 

to expire on the earlier of the maturity 

of the debt (or the conversion date, for 

mandatory convertible debt) or June 30, 

2012. 

To reduce market disruption at the 

conclusion of the DGP and to facilitate 

the orderly phase-out of the program, 

the Board issued a final rule that 

generally extended for four months the 

period during which participating 

entities could issue FDIC-guaranteed 

debt.3 Under this rule, all IDIs and those 

other participating entities that had 

issued FDIC-guaranteed debt on or 


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4 74 FR 45093 (September 1, 2009). 

5Establishment of the emergency guarantee 

facility would be consistent with the rationale for 

establishing the existing TLGP and the 

determination of systemic risk made on October 14, 

2008, pursuant to 12 U.S.C. section 1823(c)(4)(G), 

by the Secretary of the Treasury (after consultation 

with the President) following receipt of the written 

recommendation dated October 13, 2008, of the 

FDIC’s Board of Directors (Board) and the similar 

written recommendation of the Board of Governors 

of the Federal Reserve System (Federal Reserve). In 

addition to the authority granted to the FDIC by the 

systemic risk determination, the FDIC is authorized 

under Section 9(a)(Tenth) of the FDI Act, 12 U.S.C. 

1819(a)Tenth, to prescribe, by its Board, such rules 

and regulations as it may deem necessary to carry 

out the provisions of the FDI Act. 

before April 1, 2009 are permitted to 

participate in the extended DGP without 

application to the FDIC. Other 

participating entities that receive 

approval from the FDIC also may 

participate in the extended DGP. The 

rule also extended the expiration of the 

guarantee period from June 30, 2012 to 

December 31, 2012. As a result, 

participating entities may issue FDICguaranteed debt through and including 

October 31, 2009, where the FDIC’s 

guarantee expires on the earliest of the 

debt’s mandatory conversion date, the 

stated maturity date, or December 31, 

2012. 

On June 23, 2009, the Board proposed 

two alternatives for phasing out the 

TAG. The first proposed alternative 

provided that the TAG would expire on 

December 31, 2009, as required by the 

terms of the existing rule. The second 

proposed alternative provided for a 

limited six month extension to that 

program. Following consideration of the 

comments submitted in response to the 

two alternatives, on August 26, 2009, 

the Board adopted and approved for 

publication in the Federal Register a 

final rule providing for a six-month 

extension of the TAG program, through 

June 30, 2010.4 The extended TAG 

program is available to any participating 

IDI that does not elect to opt-out of the 

extension, subject to an increased fee for 

the FDIC’s guarantee of qualifying noninterest bearing transaction accounts 

during the extension period. 

Recent data suggest that the TLGP and 

other federal efforts to restore liquidity 

to and confidence in the banking and 

financial services industries have had a 

positive impact. For example, only a 

few participating entities have issued 

FDIC-guaranteed debt under the 

extended DGP, and a number of banking 

organizations have conducted 

successful public offerings of non-FDICguaranteed debt and equity. A number 

of banking organizations also have 

repaid the preferred shares purchased 

by the U.S. Treasury through its Capital 

Purchase Program. Funding costs have 

eased as the three-month Libor rate has 

reached record lows and related credit 

spreads have moderated substantially. 

Since there is evidence that the 

domestic credit and liquidity markets 

are beginning to normalize and since 

there has been a decrease in the number 

of entities that now are issuing debt 

under the DGP, the current regulation 

may provide an appropriate means for 

concluding the DGP. On the other hand, 

however, it may be prudent for the FDIC 

to allow the DGP to expire by its terms, 

while establishing an emergency 

guarantee facility to be accessed on a 

limited, case-by-case basis by IDIs and 

certain other entities participating in the 

DGP if emergency circumstances 

warrant. This limited emergency 

guarantee facility could afford 

protection to entities participating in the 

DGP that are unable to issue nonguaranteed debt to replace maturing 

debt because of market disruptions or 

other circumstances beyond their 

control.5

II. Proposed Alternatives for 

Concluding the Debt Guarantee 

Program 

As it did when proposing alternatives 

for concluding the TAG, in this Notice 

of Proposed Rulemaking the FDIC 

presents two alternatives for concluding 

the FDIC’s guarantee of senior 

unsecured debt under the DGP. In 

general, under Alternative A, IDIs and 

certain other participating entities 

would be permitted to issue FDICguaranteed debt under the DGP no later 

than October 31, 2009, with the FDIC’s 

guarantee for such debt expiring no later 

than December 31, 2012, as provided for 

in the current regulation. Under 

Alternative B, although the DGP 

effectively would end as provided for in 

the current regulation, the FDIC would 

establish and make available on a 

limited, case-by-case basis, an 

emergency guarantee facility. The 

proposed emergency guarantee facility 

would be made available only following 

FDIC approval of an application 

submitted by an IDI or other entity that 

issued FDIC-guaranteed senior 

unsecured debt on or before September 

9, 2009. If approved by the FDIC, an 

applicant would be permitted to issue 

FDIC-guaranteed senior unsecured debt 

during the period between November 1, 

2009 and April 30, 2010, subject to any 

other restrictions and conditions 

deemed appropriate by the FDIC, 

including limiting executive 

compensation, bonuses, or the payment 

of dividends. 

A. Alternative A 

Alternative A would preserve the 

current regulation regarding the 

duration of the FDIC’s guarantee of 

senior unsecured debt under the DGP. 

Thus, all IDIs participating in the DGP 

(and other participating entities that had 

either issued guaranteed debt before 

April 1, 2009, or had not issued 

guaranteed debt before April 1, 2009, 

but had otherwise received the FDIC’s 

permission to issue non-guaranteed 

debt) would be permitted to issue FDICguaranteed senior unsecured debt until 

October 31, 2009. The FDIC’s guarantee 

for such debt issuances would expire no 

later than December 31, 2012. 

B. Alternative B 

Under Alternative B, the DGP would 

expire as currently structured. In 

Alternative B, however, the FDIC 

proposes the establishment of a limited, 

six-month emergency guarantee facility 

upon expiration of the DGP on October 

31, 2009, as currently structured. 

This emergency guarantee facility 

would be designed to address an entity’s 

inability to replace maturing debt 

through non-guaranteed sources as a 

result of a market disruption or other 

circumstance beyond the control of the 

participating entity. Under this 

emergency guarantee facility, the FDIC, 

after prior approval granted on a caseby-case basis, would guarantee senior 

unsecured debt (as defined in 12 CFR 

370.2(e)) issued by certain entities 

participating in the DGP after October 

31, 2009, through and including April 

30, 2010, subject to restrictions and 

conditions deemed appropriate by the 

FDIC. The FDIC’s guarantee of principal 

and interest payments for senior 

unsecured debt issuances approved 

under the emergency guarantee facility 

would extend through the earliest of the 

mandatory conversion date (for 

mandatory convertible debt), the stated 

maturity date, or December 31, 2012. If 

Alternative B were adopted, with the 

exception of the prior approval 

requirement and the increased 

participation fee, the terms of the FDIC 

guarantee would remain unchanged 

from the existing DGP. Further, should 

Alternative B be adopted, there would 

be no effect on any conditions that the 

FDIC may have placed on the issuance 

of debt by an IDI or other entity 

participating in the DGP. 

Any IDI participating in the DGP and 

any other entity participating in the 

DGP that has issued FDIC-guaranteed 

debt by September 9, 2009, would be 

permitted to apply to use this 

emergency guarantee facility. Any use of 

the facility would require the prior 


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Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Proposed Rules 47491 

approval of the FDIC which is expected 

to be provided on a limited basis 

following case-by-case consideration. 

Application Requirements for 

Participation in the Emergency 

Guarantee Facility 

Applications to participate in the 

emergency guarantee facility would be 

required to be submitted to the Director 

of the Division of Supervision and 

Consumer Protection on or before April 

30, 2010. The application would be 

expected to include a projection of the 

sources and uses of funds through 

December 31, 2012; a summary of the 

entity’s contingency plans; a description 

of any collateral that an entity can make 

available to secure the entity’s 

obligation to reimburse the FDIC for any 

payments made pursuant to the 

guarantee; a description of the plans for 

retirement of the FDIC-guaranteed debt; 

a description of the market disruptions 

or other circumstances beyond the 

entity’s control that prevent the entity 

from replacing maturing debt with nonguaranteed debt; a description of 

management’s efforts to mitigate the 

effects of such disruptions or 

circumstances; conclusive evidence that 

demonstrates an entity’s inability to 

issue non-guaranteed debt; and any 

other relevant information that the FDIC 

deems appropriate. 

Participation in the emergency 

guarantee facility would be limited only 

to those entities that demonstrated the 

inability to issue non-guaranteed debt to 

replace maturing debt as a result of 

market disruptions or other 

circumstances beyond the entities’ 

control. In order for an application to be 

accepted and considered by the FDIC, 

applicants would be required to 

describe the circumstances that gave 

rise to the request to participate in the 

emergency guarantee facility and also 

must include an explanation of how and 

the extent to which such circumstances 

were unanticipated by the applicant and 

remain beyond its control. In addition, 

applicants would be expected to include 

an explanation of the actions taken by 

its management to mitigate such 

circumstances. 

Participation Fee 

Under Alternative B, the FDIC would 

assess an annualized participation fee of 

at least 300 basis points on any FDICguaranteed debt issued by entities that 

are permitted to use the emergency 

guarantee facility. The FDIC would 

reserve the right to increase the 

participation fee on a case-by-case basis, 

depending upon the risks present in the 

issuing entity’s organization. The FDIC 

notes that the participation fee may 

provide an appropriate deterrent to 

applications based on other, less severe 

circumstances or concerns. Consistent 

with the existing DGP, a participating 

entity may be required to pledge 

sufficient collateral to ensure the 

repayment of any principal and interest 

payments made by the FDIC under the 

guarantee facility, and also may be 

subject to other conditions and 

restrictions that the FDIC deems 

appropriate, including, for example, 

limiting executive compensation, 

bonuses, or the payment of dividends. 

IV. Request for Comments 

The FDIC requests comments on all 

aspects of this notice. Specifically, the 

FDIC notes that, upon approval of 

application, the emergency guarantee 

facility proposed in Alternative B would 

be available to all participating IDIs and 

to those other entities that had issued 

FDIC-guaranteed debt by September 9, 

2009. The FDIC requests comment as to 

whether, if Alternative B is adopted, 

eligibility should be limited in this 

manner. Finally, the FDIC asks 

commenters to indicate a preference for 

either Alternative A or Alternative B as 

a means of providing the most 

appropriate phase out of the FDIC’s 

DGP. 

V. Regulatory Analysis and Procedure 

A. Regulatory Flexibility Act 

In accordance with section 3(a) of the 

Regulatory Flexibility Act (RFA), 5 

U.S.C. 603(a), the FDIC must publish an 

initial regulatory flexibility analysis 

with this proposed rulemaking or certify 

that the proposed rule, if adopted, will 

not have a significant economic impact 

on a substantial number of small 

entities. For purposes of the RFA 

analysis or certification, financial 

institutions with total assets of $175 

million or less are considered to be 

‘‘small entities.’’ The FDIC hereby 

certifies pursuant to 5 U.S.C. 605(b) that 

the Alternative B of the proposed rule, 

if adopted, will not have a significant 

economic impact on a substantial 

number of small entities. (Alternative A, 

as described in the proposed rule, 

represents no change from the FDIC’s 

existing regulation. As such, Alternative 

A is not likely to have a significant 

economic impact on a substantial 

number of small entities.) 

Currently, 4,424 IDIs participate in 

the DGP, of which approximately 2,136 

(or approximately 48 percent) are small 

entities. If Alternative B is adopted, all 

2,136 IDIs that are considered small 

entities for purposes of this analysis 

would be eligible to apply to access the 

emergency guarantee facility. As a 

result, the FDIC asserts that Alternative 

B could have some impact on a 

substantial number of IDIs that are small 

entities that participate in the DGP. 

Nevertheless, the FDIC has 

determined that, were Alternative B of 

the proposed rule to be adopted, the 

economic impact on small entities will 

not be significant for the following 

reasons. The emergency guarantee 

facility as contemplated in Alternative B 

is designed to be accessed on an 

emergency case-by-case basis by IDIs 

(and other entities that issued debt 

under the DGP) only if such entities are 

unable to replace maturing debt as a 

result of market disruptions or other 

circumstances beyond the entities’ 

control. Eighty-one IDIs have issued 

FDIC-guaranteed debt through the DGP 

since the program’s inception. It appears 

unlikely that a significant number of 

IDIs (or other qualifying entities) would 

satisfy the requirements to issue FDICguaranteed debt during such emergency 

circumstances. Accordingly, if adopted 

in final form, neither Alternate A nor 

Alternate B of the proposed rule would 

have a significant economic impact on 

a substantial number of small entities. 

B. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.), an agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. If Alternative B were 

adopted, the Proposed Rule would 

establish a new OMB-approved 

information collection, entitled the 

‘‘Temporary Liquidity Guarantee 

Program—Emergency Guarantee 

Facility’’ (OMB No. 3064—NEW). 

(Should Alternative A be adopted, no 

change would occur in the existing 

regulation or the existing burden 

estimates.) Should Alternative B be 

adopted, the estimated burden for the 

proposed application process, described 

in Alternative B of the Proposed Rule, 

is as follows: 

Title: ‘‘Temporary Liquidity 

Guarantee Program—Emergency 

Guarantee Facility’’. 

OMB Number: 3064—NEW. 

Estimated Number of Respondents: 

Application to access emergency 

guarantee facility submitted by IDIs—8. 

Application to access emergency 

guarantee facility submitted by non-IDIs 

that issued FDIC-guaranteed debt under 

the DGP—4. 

Frequency of Response: 

Application to access emergency 

guarantee facility submitted by IDIs— 

once. 


srobinson on DSKHWCL6B1PROD with PROPOSALS
47492 Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Proposed Rules 

Application to access emergency 

guarantee facility submitted by non-IDIs 

that issued FDIC-guaranteed debt under 

the DGP—once. 

Affected Public: IDIs; thrift holding 

companies, bank and financial holding 

companies, and affiliates of IDIs that 

issued debt under the DGP. 

Average Time per Response: 

Application to access emergency 

guarantee facility submitted by IDIs—4 

hours. 

Application to access emergency 

guarantee facility submitted by non-IDIs 

that issued FDIC-guaranteed debt under 

the DGP—4 hours. 

Estimated Annual Burden: 

Application to access emergency 

guarantee facility submitted by IDIs—32 

hours. 

Application to access emergency 

guarantee facility submitted by non-IDIs 

that issued FDIC-guaranteed debt under 

the DGP—16 hours. 

Total Annual Burden—48 hours. 

The FDIC is requesting comment on 

the new TLGP-related information 

collection proposed in Alternative B. 

The FDIC is also giving notice that the 

proposed collection of information has 

been submitted to OMB for review and 

approval. Comments are invited on: (1) 

Whether this collection of information 

is necessary for the proper performance 

of the FDIC’s functions, including 

whether the information has practical 

utility; (2) the accuracy of the estimates 

of the burden of the information 

collection, including the validity of the 

methodologies and assumptions used; 

(3) ways to enhance the quality, utility, 

and clarity of the information to be 

collected; and (4) ways to minimize the 

burden of the information collection on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Interested parties are invited to submit 

written comments on the estimated 

burden by any of the following methods: 

• http://www.FDIC.gov/regulations/ 

laws/federal/propose.html. 

• E-mail: comments@fdic.gov. 

Include the name and number of the 

collection in the subject line of the 

message. 

• Mail: Leneta Gregorie (202–898– 

3719), Counsel, Federal Deposit 

Insurance Corporation, 550 17th Street, 

NW., Washington, DC 20429. 

• Hand Delivery: Comments may be 

hand-delivered to the guard station at 

the rear of the 550 17th Street Building 

(located on F Street), on business days 

between 7 a.m. and 5 p.m. 

A copy of the comment may also be 

submitted to the OMB Desk Officer for 

the FDIC, Office of Information and 

Regulatory Affairs, Office of 

Management and Budget, New 

Executive Office Building, Room 3208, 

Washington, DC 20503. All comments 

should refer to the name and number of 

the collection. 

C. Solicitation of Comments on Use of 

Plain Language 

Section 722 of the Gramm-LeachBliley Act, Public Law 106–102, 113 

Stat. 1338, 1471 (Nov. 12, 1999), 

requires the federal banking agencies to 

use plain language in all proposed and 

final rules published after January 1, 

2000. The FDIC invites your comments 

on how to make this proposed 

regulation easier to understand. For 

example: 

• Has the FDIC organized the material 

to suit your needs? If not, how could 

this material be better organized? 

• Are the requirements in the 

proposed rule clearly stated? If not, how 

could the proposed rule be more clearly 

stated? 

• Does the proposed rule contain 

language or jargon that is not clear? If 

so, which language requires 

clarification? 

• Would a different format (grouping 

and order of sections, use of headings, 

paragraphing) make the proposed rule 

easier to understand? If so, what 

changes to the format would make the 

proposed rule easier to understand? 

• What else could the FDIC do to 

make the proposed rule easier to 

understand? 

D. The Treasury and General 

Government Appropriations Act, 1999— 

Assessment of Federal Regulations and 

Policies on Families 

The FDIC has determined that the 

proposed rule will not affect family 

well-being within the measure of 

section 654 of the Treasury and General 

Government Appropriations Act, 

enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Pub. L. 105–277, 112 Stat. 2681). 

List of Subjects in 12 CFR Part 370 

Banks, Banking, Bank deposit 

insurance, Holding companies, National 

banks, Reporting and recordkeeping 

requirements, Savings associations. 

For the reasons discussed in the 

preamble, the Federal Deposit Insurance 

Corporation proposes to amend 12 CFR 

Part 370 as follows: 

PART 370—TEMPORARY LIQUIDITY 

GUARANTEE PROGRAM 

1. The authority citation for part 370 

continues to read as follows: 

Authority: 12 U.S.C. 1813(l), 1813(m), 

1817(i), 1818, 1819(a)(Tenth), 1820(f), 

1821(a), 1821(c), 1821(d), 1823(c)(4). 

2. Amend § 370.2 by revising 

paragraph (n) to read as follows: 

§ 370.2 Definitions. 

* * * * * 

(n) Issuance period. Except as 

provided in paragraph (n)(2) of this 

section, the term ‘‘issuance period’’ 

means 

(i) With respect to the issuance, by a 

participating entity that is either an 

insured depository institution, an entity 

that has issued FDIC-guaranteed debt 

before April 1, 2009, or an entity that 

has been approved pursuant to 

§ 370.3(h) to issue FDIC-guaranteed debt 

after June 30, 2009 and on or before 

October 31, 2009, of: 

(A) Mandatory convertible debt, the 

period from February 27, 2009 to and 

including October 31, 2009, and 

(B) All other senior unsecured debt, 

the period from October 14, 2008 to and 

including October 31, 2009; and 

(ii) With respect to the issuance, by 

any other participating entity, of 

(A) Mandatory convertible debt, the 

period from February 27, 2009 to and 

including June 30, 2009, and 

(B) All other senior unsecured debt, 

the period from October 14, 2008 to and 

including June 30, 2009. 

(2) The ‘‘issuance period’’ for a 

participating entity that has been 

approved to issue FDIC-guaranteed debt 

pursuant to § 370.3(k) of this part is the 

period after October 31, 2009 and on or 

before April 30, 2010. 

* * * * * 

3. Amend section 370.3 as follows: 

a. Revise paragraph (d)(2); 

b. Revise paragraphs (h)(1) through 

(h)(3), (h)(5), and (h)(6); and 

c. Add paragraph (k), to read as 

follows: 

§ 370.3 Debt Guarantee Program. 

* * * * * 

(d) * * * 

(2) With respect to debt that is issued 

on or after April 1, 2009 by a 

participating entity that is either an 

insured depository institution, a 

participating entity that has issued 

guaranteed debt before April 1, 2009, a 

participating entity that has been 

approved pursuant to § 370.3(h) to issue 

guaranteed debt after June 30, 2009 and 

on or before October 31, 2009, or a 

participating entity that has been 

approved pursuant to § 370.3(k) to issue 

guaranteed debt after October 31, 2009, 

the guarantee expires on the earliest of 

the mandatory conversion date for 

mandatory convertible debt, the 


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maturity date of the debt, or December 

31, 2012. 

* * * * * 

(h) Applications for exceptions, 

eligibility, and issuance of certain debt. 

(1) The following requests require 

written application to the FDIC and the 

appropriate Federal banking agency of 

the entity or the entity’s lead affiliated 

insured depository institution: 

(i) A request by a participating entity 

to establish, increase, or decrease its 

debt guarantee limit, 

(ii) A request by an entity that 

becomes an eligible entity after October 

13, 2008, for an increase in its 

presumptive debt guarantee limit of 

zero, 

(iii) A request by a non-participating 

surviving entity in a merger transaction 

to opt in to either the debt guarantee 

program or the transaction account 

guarantee program, 

(iv) A request by an affiliate of an 

insured depository institution to 

participate in the debt guarantee 

program, 

(v) A request by a participating entity 

to issue FDIC-guaranteed mandatory 

convertible debt, 

(vi) A request by a participating entity 

that is neither an insured depository 

institution nor an entity that has issued 

FDIC-guaranteed debt before April 1, 

2009, to issue FDIC-guaranteed debt 

after June 30, 2009 and on or before 

October 31, 2009, 

(vii) A request by a participating 

entity to issue senior unsecured nonguaranteed debt after June 30, 2009, and 

(viii) A request by a participating 

entity to issue FDIC-guaranteed debt 

after October 31, 2009 under the 

Emergency Guarantee Facility pursuant 

to paragraph (k) of this section. 

(2) Each letter application must 

describe the details of the request, 

provide a summary of the applicant’s 

strategic operating plan, describe the 

proposed use of the debt proceeds, and 

(i) With respect to an application for 

approval of the issuance of mandatory 

convertible debt, must also include: 

(A) The proposed date of issuance, 

(B) The total amount of the mandatory 

convertible debt to be issued, 

(C) The mandatory conversion date, 

(D) The conversion rate (i.e., the total 

number of shares of common stock that 

will result from the conversion divided 

by the total dollar amount of the 

mandatory convertible debt to be 

issued), 

(E) Confirmation that all applications 

and all notices required under the Bank 

Holding Company Act of 1956, as 

amended, the Home Owners’ Loan Act, 

as amended, or the Change in Bank 

Control Act, as amended, have been 

submitted to the applicant’s appropriate 

Federal banking agency in connection 

with the proposed issuance, and 

(F) Any other relevant information 

that the FDIC deems appropriate; 

(ii) With respect to an application 

pursuant to paragraph (h)(1)(vi) of this 

section to extend the period for issuance 

of FDIC-guaranteed debt to and 

including October 31, 2009, the entity’s 

plans for the retirement of the 

guaranteed debt, a description of the 

entity’s financial history, current 

condition, and future prospects, and any 

other relevant information that the FDIC 

deems appropriate; 

(iii) With respect to an application 

pursuant to paragraph (h)(1)(vii) of this 

section to issue senior unsecured nonguaranteed debt, a summary of the 

applicant’s strategic operating plan and 

the entity’s plans for the retirement of 

any guaranteed debt; and 

(iv) With respect to an application 

pursuant to paragraph (h)(1)(viii) of this 

section to issue FDIC-guaranteed debt 

under the Emergency Guarantee 

Facility, a projection of the sources and 

uses of funds through December 31, 

2012, a summary of the entity’s 

contingency plans, a description of the 

collateral that an entity can make 

available to secure the entity’s 

obligation to reimburse the FDIC for any 

payments made pursuant to the 

guarantee, a description of the plans for 

retirement of the FDIC-guaranteed debt, 

a description of the market disruptions 

or other circumstances beyond the 

entity’s control that prevent the entity 

from replacing maturing debt with nonguaranteed debt, a description of 

management’s efforts to mitigate the 

effects of such disruptions or 

circumstances, conclusive evidence that 

demonstrates an entity’s inability to 

issue non-guarantee debt, and any other 

relevant information. 

(3) In addition to any other relevant 

factors that the FDIC deems appropriate, 

the FDIC will consider the following 

factors in evaluating applications filed 

pursuant to paragraph (h) of this 

section: 

(i) For applications pursuant to 

paragraphs (h)(1)(i), (h)(1)(ii), (h)(1)(iii), 

and (h)(1)(v) of this section: the 

proposed use of the proceeds; the 

financial condition and supervisory 

history of the eligible/surviving entity; 

(ii) For applications pursuant to 

paragraph (h)(1)(iv) of this section: the 

proposed use of the proceeds; the extent 

of the financial activity of the entities 

within the holding company structure; 

the strength, from a ratings perspective 

of the issuer of the obligations that will 

be guaranteed; the size and extent of the 

activities of the organization; 

(iii) For applications pursuant to 

paragraph (h)(1)(vi) of this section: the 

proposed use of the proceeds; the 

entity’s plans for the retirement of the 

guaranteed debt, the entity’s financial 

history, current condition, future 

prospects, capital, management, and the 

risk presented to the FDIC; 

(iv) For applications pursuant to 

paragraph (h)(1)(vii) of this section: the 

entity’s plans for the retirement of the 

guaranteed debt, and 

(v) For applications pursuant to 

paragraph (h)(1)(viii) of this section, the 

applicant’s strategic operating plan, the 

proposed use of the debt proceeds, the 

entity’s plans for the retirement of the 

FDIC-guaranteed debt, the entity’s 

contingency plans, the nature and 

extent of the market disruptions or other 

circumstances beyond the entity’s 

control that prevent the entity from 

replacing maturing debt with nonguaranteed debt, the collateral that an 

entity can make available to secure the 

entity’s obligation to reimburse the FDIC 

for any payments made pursuant to the 

guarantee, management’s efforts to 

mitigate the effects of such conditions or 

circumstances, the evidence that 

demonstrates an entity’s inability to 

issue non-guarantee debt, and the risk 

presented to the FDIC. 

* * * * * 

(5) The filing deadlines for certain 

applications are: 

(i) At the same time the merger 

application is filed with the appropriate 

Federal banking agency, for an 

application pursuant to paragraph 

(h)(1)(iii) of this section (which must 

include a copy of the merger 

application); 

(ii) October 31, 2009, for an 

application pursuant to paragraph 

(h)(1)(v) of this section that is filed by 

a participating entity that is either an 

insured depository institution, an entity 

that has issued FDIC-guaranteed debt 

before April 1, 2009, or an entity that 

has been approved pursuant to 

paragraph (h) of this section to issue 

FDIC-guaranteed debt after June 30, 

2009 and on or before October 31, 2009; 

(iii) June 30, 2009, for an application 

pursuant to paragraph (h)(1)(v) of this 

section that is filed by a participating 

entity other than an entity described in 

paragraph (h)(5)(ii) of this section; 

(iv) June 30, 2009, for an application 

pursuant to paragraph (h)(1)(vi); and 

(v) April 30, 2010, for applications 

pursuant to paragraph (h)(1)(viii). 

(6) In granting its approval of an 

application filed pursuant to paragraph 

(h) of this section the FDIC may impose 


srobinson on DSKHWCL6B1PROD with PROPOSALS
47494 Federal Register / Vol. 74, No. 178 / Wednesday, September 16, 2009 / Proposed Rules 

any conditions it deems appropriate, 

including without limitation, 

requirements that the issuer (i) Hedge any foreign currency risk, or 

(ii) Pledge collateral to secure the 

issuer’s obligation to reimburse the 

FDIC for any payments made pursuant 

to the guarantee. (iii) Limit executive compensation 

and bonuses, and/or 

(iv) Limit or refrain from the payment 

of dividends. 

* * * * * 

(k) Emergency Guarantee Facility. In 

the event that a participating entity that 

is either an insured depository 

institution or an entity that has issued 

FDIC-guaranteed debt on or before 

September 9, 2009 is unable, after 

October 31, 2009, to issue nonguaranteed debt to replace maturing 

senior unsecured debt as a result of 

market disruptions or other 

circumstances beyond the entity’s 

control, the participating entity may, 

with the FDIC’s prior approval under 

paragraph (h) of this section, issue 

FDIC-guaranteed debt after October 31, 

2009 and on or before April 30, 2010. 

Any such issuance is subject to all of the 

terms and conditions imposed by the 

FDIC in its approval decision as well as 

all of the provisions of this part, 

including without limitation, the 

payment of the applicable assessment 

and compliance with the disclosure 

requirements. 4. Amend section 370.5 as follows: 

a. Revise paragraph (f); and 

b. Revise paragraph (h)(2), to read as 

follows: 

§ 370.5 Participation. 

* * * * * 

(f) Except as provided in paragraphs 

(g), (j), and (k) of § 370.3, participating 

entities are not permitted to select 

which newly issued senior unsecured 

debt is guaranteed debt; all senior 

unsecured debt issued by a participating 

entity up to its debt guarantee limit 

must be issued and identified as FDICguaranteed debt as and when issued. 

* * * * * 

(h) * * * 

(2) Each participating entity that is 

either an insured depository institution, 

an entity that has issued FDICguaranteed debt before April 1, 2009, an 

entity that has been approved pursuant 

to § 370.3(h) to issue FDIC-guaranteed 

debt after June 30, 2009 and on or before 

October 31, 2009, or a participating 

entity that has been approved pursuant 

to § 370.3(k) to issue FDIC-guaranteed 

debt after October 31, 2009, must 

include the following disclosure 

statement in all written materials 

provided to lenders or creditors 

regarding any senior unsecured debt 

that is issued by it during the applicable 

issuance period and that is guaranteed 

under the debt guarantee program: 

This debt is guaranteed under the Federal 

Deposit Insurance Corporation’s Temporary 

Liquidity Guarantee Program and is backed 

by the full faith and credit of the United 

States. The details of the FDIC guarantee are 

provided in the FDIC’s regulations, 12 CFR 

Part 370, and at the FDIC’s Web site, http:// 

www.fdic.gov/tlgp. [If the debt being issued is 

mandatory convertible debt, add: The 

expiration date of the FDIC’s guarantee is the 

earlier of the mandatory conversion date or 

December 31, 2012]. [If the debt being issued 

is any other senior unsecured debt, add: The 

expiration date of the FDIC’s guarantee is the 

earlier of the maturity date of the debt or 

December 31, 2012.] 

* * * * * 

5. Amend section 370.6 as follows: 

a. Revise paragraph (d)(1); and 

b. Add paragraph (i), to read as 

follows: 

§ 370.6 Assessments under the Debt 

Guarantee Program. 

* * * * * 

(d) Amount of assessments for debt 

within the debt guarantee limit (1) 

Calculation of assessment. Subject to 

paragraphs (d)(3) and (h) of this section, 

and except as provided in paragraph (i) 

of this section, the amount of 

assessment will be determined by 

multiplying the amount of FDICguaranteed debt times the term of the 

debt or, in the case of mandatory 

convertible debt, the time period from 

issuance to the mandatory conversion 

date, times an annualized assessment 

rate determined in accordance with the 

following table. 

For debt with a maturity or time 

period to conversion date of 

The 

annualized 

assessment 

rate (in 

basis 

points) is 

180 days or less (excluding 

overnight debt) ...................... 50 

181–364 days ........................... 75 

365 days or greater .................. 100 

* * * * * 

(i) Assessment for Debt issued under 

the Emergency Guarantee Facility. The 

amount of the assessment for FDICguaranteed debt issued pursuant to 

§ 370.3(k) of this part is equal to the 

amount of the debt times the term of the 

debt (or in the case of mandatory 

convertible debt, the time period to 

conversion) times an annualized 

assessment rate of 300 basis points, or 

such greater rate as the FDIC may 

determine in its decision approving 

such issuance. 

Dated at Washington DC, this 9th day of 

September 2009. 

By order of the Board of Directors. 

Federal Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. E9–22372 Filed 9–15–09; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 25 

[Docket No. FAA–2008–1292; Notice No. 09– 

05A] 

RIN 2120–AJ35 

Flightcrew Alerting; Reopening of 

Comment Period 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Notice of proposed rulemaking 

(NPRM); reopening of comment period. 

SUMMARY: On July 9, 2009, the FAA 

published an NPRM to amend the 

airworthiness standards for flightcrew 

alerting and invited comments for a 60- 

day period. The comment period closed 

on September 8, 2009; however, the 

FAA is reopening the comment period 

for an additional 15 days in response to 

requests from The Boeing Company; the 

Air Line Pilots Association, 

International; the General Aviation 

Manufacturers Association; and Airbus. 

All of the requestors stated that 

reopening the comment period is 

needed to permit them additional time 

to develop comments responsive to 

Notice No. 09–05. Reopening the 

comment period will allow the 

requestors and others additional time to 

review and comment on the proposal. 

DATES: The comment period for the 

NPRM published on July 9, 2009 (74 FR 

32810) closed September 8, 2009, and is 

reopened until October 1, 2009. 

ADDRESSES: You may send comments 

identified by Docket Number FAA– 

2008–1292 using any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov and follow 

the instructions for sending your 

comments electronically. 

• Mail: Send comments to Docket 

Operations, M–30, U.S. Department of 

Transportation, 1200 New Jersey 

Avenue, SE., West Building Ground 

Floor, Room W12–140, Washington, DC 

20590. 

• Fax: Fax comments to Docket 

Operations at 202–493–2251. 

• Hand Delivery: Bring comments to 

Docket Operations in Room W12–140 of 


srobinson on DSKHWCL6B1PROD with PROPOSALS