12078 Federal Register / Vol. 74, No. 54 / Monday, March 23, 2009 / Rules and Regulations 

11 69 FR 28856 (May 19, 2004). 

12 70 FR 11834 (March 10, 2005). 

the other Federal banking agencies and 

Treasury, to respond to the current 

financial situation. 

Regulatory Flexibility Act 

Under section 604 of the Regulatory 

Flexibility Act (RFA) (5 U.S.C. 604), a 

final regulatory flexibility analysis is 

required only for notice-and-comment 

rulemakings conducted under section 

553 of the APA. Since the Board finds 

that there is ‘‘good cause’’ under the 

APA for not proceeding with noticeand-comment rulemaking for this 

amendment to the implementation date 

for the final rule, the RFA does not 

require that a final regulatory flexibility 

analysis be provided for this 

amendment. 

The Board provided regulatory 

flexibility analysis in the preamble to 

the final rule published on March 10, 

2005 (70 FR 11827–11838). In that 

regulatory flexibility analysis, the Board 

considered the likely impact of the final 

rule on small entities and determined 

that the final rule will not have a 

significant impact on a substantial 

number of small entities. 

Paperwork Reduction Act 

In accordance with the requirements 

of the Paperwork Reduction Act of 1995 

(44 U.S.C. 3506), the Board has 

reviewed this rule to assess any 

information collections. There are no 

collections of information as defined by 

the Paperwork Reduction Act in this 

rule. 

Solicitation of Comments on Use of 

Plain Language 

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

requires the Federal banking agencies to 

use plain language in all proposed and 

final rules published after January 1, 

2000. The Board invited comment on 

how to make the final rule easier to 

understand.11 No commenter indicated 

that the proposed rule should be revised 

to make it easier to understand. In the 

preamble to the final rule the Board 

indicated that it believes the final rule 

is written plainly and clearly.12

List of Subjects in 12 CFR Part 225 

Administrative Practice and 

Procedure, Banks, Banking, Federal 

Reserve System, Holding companies, 

Reporting and recordkeeping 

requirements, Securities. 

Board of Governors of the Federal 

Reserve System 

12 CFR Chapter II 

Authority and Issuance 

■ For the reasons stated in the preamble, 

the Board of Governors of the Federal 

Reserve System amends part 225 of 

chapter II of title 12 of the Code of 

Federal Regulations as follows: 

PART 225—BANK HOLDING 

COMPANIES AND CHANGE IN BANK 

CONTROL (REGULATION Y) 

■ 1. The authority citation for part 225 

continues to read as follows: 

Authority: 12 U.S.C. 1817(j)(13), 1818, 

1828(o), 1831i, 1831p–1, 1843(c)(8), 1844(b), 

1972(1), 3106, 3108, 3310, 3331–3351, 3907, 

and 3909; 15 U.S.C. 6801 and 6805. 

Appendix A to Part 225 [Amended] 

■ 2. In Appendix A to part 225, 

paragraphs II.A.1.b.ii. and II.A.2.d.iv. 

are amended by removing ‘‘2009’’ and 

adding ‘‘2011’’ in its place wherever it 

appears. 

By order of the Board of Governors of the 

Federal Reserve System, March 16, 2009. 

Jennifer J. Johnson, 

Secretary of the Board. 

[FR Doc. E9–6096 Filed 3–20–09; 8:45 am] 

BILLING CODE 6210–02–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 370 

RIN 3064–AD37 

Amendment of the Temporary Liquidity 

Guarantee Program To Extend the 

Debt Guarantee Program and To 

Impose Surcharges on Assessments 

for Certain Debt Issued on or After 

April 1, 2009 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Interim Rule with request for 

comments. 

SUMMARY: The FDIC is issuing this 

Interim Rule to amend the Temporary 

Liquidity Guarantee Program (TLGP) by 

providing a limited extension of the 

Debt Guarantee Program (DGP) for 

insured depository institutions (IDIs) 

participating in the DGP. The extended 

DGP also would apply to other 

participating entities; however, other 

participating entities that have not 

issued FDIC-guaranteed debt before 

April 1, 2009 are required to submit an 

application to and obtain approval from 

the FDIC to participate in the extended 

DGP. The Interim Rule imposes 

surcharges on certain debt issued on or 

after April 1, 2009. Any surcharge 

collected will be deposited into the 

Deposit Insurance Fund (DIF or Fund). 

The Interim Rule also establishes an 

application process whereby entities 

participating in the extended DGP may 

apply to issue non-FDIC-guaranteed 

debt during the extension period. 

DATES: The Interim Rule becomes 

effective on March 23, 2009. Comments 

on the Interim Rule must be received by 

April 7, 2009. 

ADDRESSES: You may submit comments 

on the Interim Rule 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/propose.html, including any 

personal information provided. 

FOR FURTHER INFORMATION CONTACT: 

Mark L. Handzlik, Senior Attorney, 

Legal Division, (202) 898–3990 or 

mhandzlik@fdic.gov; Robert C. Fick, 

Counsel, Legal Division, (202) 898–8962 

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

Counsel, Legal Division, (202) 898–3573 

or aajohnson@fdic.gov; (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; 

or Munsell St. Clair, Chief, Bank and 

Regulatory Policy Section, Division of 

Insurance and Research, (202) 898–8967 

or mstclair@fdic.gov. 

SUPPLEMENTARY INFORMATION: 


dwashington3 on PROD1PC60 with RULES
Federal Register / Vol. 74, No. 54 / Monday, March 23, 2009 / Rules and Regulations 12079 

1Public Law 110–343 (October 3, 2008). 

2Public Law 111–5 (February 17, 2009). 

3Memorandum dated November 19, 2008, to 

FDIC Chairman Sheila C. Bair from Federal Reserve 

Board Staff at page 1. 

4Secretary Geithner Introduces Financial 

Stability Plan, http://www.treas.gov/press/releases/ 

tg18.htm (last visited Feb. 19, 2009). 

5 12 U.S.C. 1823(c)(4)(G). 

6 12 U.S.C. 1819(a)Tenth. 

7 2009 Monetary Press Release, Release Date: 

February 3, 2009, http://www.federalreserve.gov/ 

newsevents/press/monetary/20090203a.htm (last 

visited February 20, 2009) (announcing four month 

extensions until October 2009 of six liquidity 

programs originally scheduled to expire in April 

2009). 

8Unless those other participating entities that 

have not issued debt before April 1, 2009, apply 

and receive the approval of the FDIC to participate 

in the extended DGP, the FDIC’s guarantee will 

expire for such entities no later than June 30, 2012. 

(See Section III.B.) 

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). 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 inability of financial 

institutions to fund themselves and 

make loans to creditworthy borrowers. 

More broadly, Congress, the Treasury, 

and the federal banking agencies, have 

taken coordinated steps to preserve 

confidence in the American economy. 

Congress enacted sweeping laws to deal 

with the economic crisis, including the 

Emergency Economic Stabilization Act 1

(which temporarily raised deposit 

insurance limits) and the American 

Recovery and Reinvestment Act of 

2009; 2 the Federal Reserve made 

commercial paper facilities available; 

and the Treasury provided banks with 

capital injections. 

The disruption in credit markets that 

emerged in the second half of 2008 

impaired the ability of financial 

institutions to obtain funding, make 

loans to creditworthy borrowers, and 

intermediate credit transactions. 

Although the financial system and 

credit markets remain stressed, credit 

market conditions have improved in 

response to government stabilization 

efforts such as the TLGP. Interbank 

short-term funding rates have fallen 

notably since mid-October 2008. The 

three-month Libor rate has fallen about 

350 basis points from the 4.75 percent 

peak in mid-October 2008. The threemonth Libor spread over Treasuries has 

also declined to under one percent, 

down from 4.57 percent in mid-October 

2008, but remains above a historical 

spread of approximately 40 basis points. 

While liquidity in the financial 

markets has not returned to pre-crisis 

levels, the TLGP debt guarantee program 

has been effective to date in improving 

short-term and intermediate-term 

funding for banking organizations. More 

than two-thirds of new public debt 

issuances by banking organizations 

between October 14, 2008, and March 4, 

2009, that matures on or before June 30, 

2012, are FDIC-guaranteed. Thus far, 

non-FDIC-guaranteed debt issued by 

banking organizations has mostly been 

for relatively small amounts with some 

exceptions. During the first two months 

of the year, one banking organization 

issued $2 billion in 10-year senior notes, 

and another banking organization issued 

$4 billion in 30-year bonds, both 

without government guarantees. 

At its inception, the Federal Reserve 

and the Treasury recommended 

extending the DGP to bank holding 

companies, given the difficulties that 

these institutions were having with 

gaining access to funding. Concerns 

were raised that under the 

circumstances at that time, there would 

be risk to IDIs and to the banking system 

as a whole if the FDIC did not guarantee 

debt issued by bank holding companies 

under the TLGP.3 The FDIC believes 

that certain aspects of the credit markets 

have improved, and with this Interim 

Rule, the FDIC is acting to ensure the 

orderly phase-out of the TLGP, a 

program that has provided benefit to 

IDIs, bank and certain savings and loan 

holding companies, and certain of their 

affiliates. 

The FDIC expects the Interim Rule to 

provide an orderly transition period for 

participating entities returning to nonFDIC-guaranteed funding, and reduce 

the potential for market disruption 

when the DGP ends. Also, the extension 

should enhance bank liquidity while the 

elements of the Treasury’s proposed 

Financial Stability Plan are fully 

implemented.4

II. Authority To Provide Limited 

Extension of the TLGP 

The amendment to the DGP provided 

under the Interim Rule is consistent 

with the rationale for establishing the 

existing TLGP and the determination of 

systemic risk made on October 14, 2008, 

pursuant to section 13(c)(4)(G),5 by the 

Secretary of the Treasury (after 

consultation with the President) 

following receipt of the written 

recommendation dated October 13, 

2008, by the Board of Directors of the 

FDIC (Board) and the similar written 

recommendation of the Federal Reserve. 

The determination of systemic risk 

authorized the FDIC to take actions to 

avoid or mitigate serious adverse effects 

on economic conditions or financial 

stability by providing a guarantee of 

senior unsecured debt, and the FDIC 

initiated the TLGP in response. The 

limited extension of the TLGP provided 

for in the Interim Rule represents 

continued action by the FDIC to avoid 

or mitigate further deterioration in the 

economic condition and stability of the 

U.S. financial system and is consistent 

with the systemic risk determination 

made by the Secretary of the Treasury 

based on recommendations of the FDIC 

and the FRB in October 2008. 

In addition to the authority granted to 

the FDIC by the systemic risk 

determination made under Section 

13(c)(4) of the FDI Act, as described 

above, the FDIC is authorized under 

Section 9(a) Tenth of the FDI Act,6 to 

prescribe, by its Board, such rules and 

regulations as it may deem necessary to 

carry out the provisions of the FDI Act. 

The FDIC has determined that this 

Interim Rule is necessary to further 

enhance the TLGP. 

III. The Interim Rule 

A. Extension of the Debt Guarantee 

Program for IDIs Participating in the 

TLGP 

Under the existing DGP, participating 

entities are permitted to issue senior 

unsecured debt until June 30, 2009. The 

FDIC will guarantee this debt until the 

earlier of the maturity of the debt or 

June 30, 2012. 

The Interim Rule provides a limited 

four-month extension for the issuance of 

debt under the DGP and is consistent 

with extensions to other liquidity 

programs recently announced by the 

Federal Reserve.7 The Interim Rule 

permits all IDIs participating in the DGP 

to issue FDIC-guaranteed senior 

unsecured debt until October 31, 2009. 

For debt issued on or after April 1, 2009, 

the Interim Rule extends the FDIC’s 

guarantee (previously set to expire 

under the existing program on the 

earliest of the opt-out date, if any, the 

maturity of the debt, the mandatory 

conversion date for mandatory 

convertible debt, or June 30, 2012) until 

the earliest of the opt-out date, the 

maturity of the debt, the mandatory 

conversion date for mandatory 

convertible debt, or December 31, 2012.8


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12080 Federal Register / Vol. 74, No. 54 / Monday, March 23, 2009 / Rules and Regulations 

9Unlike IDIs (for whom the FDIC has either 

primary or backup supervision authority) and other 

participating entities that have issued debt before 

April 1, 2009 (for whom the FDIC is aware of 

current debt issuances and the evolving financial 

condition of those entities), for other participating 

entities that have not issued debt before April 1, 

2009, the FDIC has chosen to mitigate its risk 

during the extension period by establishing an 

application process that will enable the FDIC to 

become more familiar with the current financial 

situation for these entities and with their plans for 

issuing debt during the extension period. 

B. Extension of the Debt Guarantee 

Program for Other Entities Participating 

in the TLGP 

The Interim Rule permits other 

participating entities that have issued 

FDIC-guaranteed debt before April 1, 

2009 to participate in the extended DGP. 

However, other participating entities 

that have not issued FDIC-guaranteed 

debt before April 1, 2009 must apply to 

and receive approval from the FDIC to 

participate in the extended DGP.9 The 

deadline for submitting an application 

to participate in the extended DGP is 

June 30, 2009. The FDIC will review 

such applications on a case-by-case 

basis. 

As with other applications submitted 

to the FDIC for purposes of the DGP, the 

application must include a summary of 

the applicant’s strategic operating plan; 

the proposed use of the debt proceeds; 

the entity’s plans for retiring any FDICguaranteed debt; a description of the 

entity’s financial history, current 

condition and future prospects; the risk 

presented by the proposal to the FDIC; 

and any other relevant information that 

the FDIC deems appropriate. The FDIC 

also may condition its approval on any 

requirement deemed appropriate, 

including without limitation, the pledge 

of collateral by the applicant to secure 

the applicant’s obligation to reimburse 

the FDIC for any payments made 

pursuant to the FDIC’s guarantee. 

This Interim Rule will not change a 

participating entity’s existing debt 

guarantee limit or affect any conditions 

that the FDIC may have placed on the 

issuance of debt by an IDI or other 

participating entity. In addition, 

consistent with prudent liquidity 

management practices, issuance levels 

under the TLGP should be consistent 

with existing funding plans and 

estimated liquidity needs. The chart that 

follows provides a summary of the 

relevant dates for entities that 

participate (and those that do not 

participate) in the extended DGP. 

Application date Issue date Guarantee expiration date 

IDIs currently participating in the 

DGP, and other participating entities that have issued FDIC-guaranteed debt before April 1, 2009.

Not required to submit an application to participate in the extension of the DGP.Senior unsecured debt may be 

issued no later than Oct. 31, 

2009.

For debt issued on or after April 

1, 2009, FDIC-guarantee of 

senior unsecured debt expires 

on the earliest of the opt-out 

date, if any, the mandatory 

conversion date for mandatory 

convertible debt, the stated 

date of maturity, or Dec. 31, 

2012. 

Other participating entities that 

have not issued FDIC-guaranteed debt before April 1, 2009, 

which have received approval to 

participate in the extension of the 

DGP.

Application due on or before June 

30, 2009.

With FDIC approval, senior unsecured debt may be issued no 

later than Oct. 31, 2009.

For debt issued on or after April 

1, 2009, with FDIC approval, 

FDIC-guarantee of senior unsecured debt expires on the earliest of the opt-out date, if any, 

the mandatory conversion date 

for mandatory convertible debt, 

the stated date of maturity, or 

Dec. 31, 2012. 

Other participating entities currently 

participating in the DGP, but not 

participating in the extension of 

the DGP.

N/A ............................................... Senior unsecured debt may be 

issued no later than June 30, 

2009.

FDIC-guarantee of senior unsecured debt expires on the earliest of the mandatory conversion date for mandatory convertible debt, the stated date of 

maturity, or June 30, 2012. 

C. Surcharges on Assessments for 

Certain Debt Issued on or After April 1, 

2009 

Surcharges provided for in the Interim 

Rule will be imposed on an annualized 

basis and apply only to FDIC-guaranteed 

debt with maturities (or, in the case of 

mandatory convertible debt, time 

periods to conversion) of at least one 

year; the assessment rates for shorter 

term FDIC-guaranteed debt remain 

unchanged, as do the rates for 

guaranteed debt issued before April 1, 

2009. 

For FDIC-guaranteed debt with 

maturities (or, in the case of mandatory 

convertible debt, time periods to 

conversion) of at least one year issued 

on or after April 1, 2009, until and 

including June 30, 2009, and maturing 

on or before June 30, 2012, the 

annualized surcharge on the 

assessments is 10 basis points for IDIs 

and 20 basis points for other 

participating entities. 

The Interim Rule also imposes an 

additional surcharge on assessments for 

FDIC-guaranteed debt issued under the 

extended DGP—that is, FDIC-guaranteed 

debt issued after June 30, 2009 and on 

or before October 31, 2009, or FDICguaranteed debt issued on or after April 

1, 2009 with a maturity date after June 

30, 2012. The applicable annualized 

surcharge on the assessments for IDIs is 

25 basis points. For other participating 

entities that have issued FDICguaranteed debt under the DGP before 

April 1, 2009 (and for such entities that 

have not issued FDIC-guaranteed debt 

under the DGP before April 1, 2009, but 

that have been approved by the FDIC to 

participate in the extended DGP), the 

annualized applicable surcharge on the 

assessments is 50 basis points. 

Unlike TLGP fees, which are reserved 

for possible TLGP losses and not 

generally available for DIF purposes, the 

amount of any surcharge collected in 

connection with the extended DGP will 

be deposited into the DIF and used by 

the FDIC when calculating the reserve 

ratio of the Fund. The FDIC has every 

expectation that the TLGP will pay for 

itself and has set TLGP fees accordingly. 

The surcharge provisions recognize 

that a relatively small portion of the 


dwashington3 on PROD1PC60 with RULES
Federal Register / Vol. 74, No. 54 / Monday, March 23, 2009 / Rules and Regulations 12081 

10See 74 FR 9525 (March 4, 2009). 

11Some participating entities elected to pay a fee 

to issue long-term non-guaranteed debt that could 

mature beyond June 30, 2012, pursuant to 12 CFR 

370.6(f). If those entities are eligible to participate 

in the extension of the TLGP, the Interim Rule 

requires such entities to apply to issue other than 

long-term non-guaranteed debt, without cost for 

such issuances if approved by the FDIC. 12 12 U.S.C. 4802. 

industry is actively using the DGP, but 

all IDIs ultimately bear the risk that a 

systemic risk assessment might be 

necessary to recover any excess losses 

attributable to the program. The 

surcharge is intended to compensate the 

DIF members, by increasing funds 

deposited directly into the DIF, for 

bearing the risk that TLGP fees will be 

insufficient and that a systemic risk will 

be levied. 

The surcharges also are intended to 

reduce the subsidy provided by the DGP 

and to encourage institutions to seek 

funding in ways that do not involve 

government guarantees, so that the DGP 

can be wound down in an orderly 

fashion. The DGP extension will also 

partially address potential competitive 

disparities with similar programs in 

other countries. The FDIC anticipates 

that the amount of revenue that the 

surcharge produces will enable the FDIC 

to reduce the amount of the special 

assessment provided for in the Interim 

Rule adopted on February 27, 2009.10

D. Opportunity To Apply To Issue NonGuaranteed Debt 

Any entities participating in the 

extended DGP may apply to the FDIC to 

issue non-FDIC-guaranteed debt. If 

approved, such entities may issue nonguaranteed debt after June 30, 2009, 

without cost to the entity.11

IV. Request for Comments 

The FDIC invites comments on all 

aspects of the Interim Rule and solicits 

suggestions regarding its 

implementation. In particular, the FDIC 

seeks comment as to the 

appropriateness of the surcharges 

imposed on participating entities 

beginning April 1, 2009, for their 

participation in the DGP. 

V. Regulatory Analysis and Procedure 

A. Administrative Procedure Act 

The process of amending Part 370 by 

means of this Interim Rule is governed 

by the Administrative Procedure Act 

(APA). Pursuant to section 553(b)(B) of 

the APA, general notice and opportunity 

for public comment are not required 

with respect to a rule making when an 

agency for good cause finds that ‘‘notice 

and public procedure thereon are 

impracticable, unnecessary, or contrary 

to the public interest.’’ Similarly, 

section 553(d)(3) of the APA provides 

that the publication of a rule shall be 

made not less than 30 days before its 

effective date, except ‘‘* * * (3) as 

otherwise provided by the agency for 

good cause found and published with 

the rule.’’ 

Consistent with section 553(b)(B) of 

the APA, the FDIC finds that good cause 

exists for a finding that general notice 

and opportunity for public comment are 

impracticable and contrary to the public 

interest. The TLGP was announced by 

the FDIC on October 14, 2008, as an 

initiative to counter the system-wide 

crisis in the nation’s financial sector, 

and involved a determination of 

systemic risk by the Secretary of the 

Treasury after consultation with the 

President. The systemic risk 

determination allowed the FDIC to take 

certain actions to avoid or mitigate 

serious adverse effects on economic 

conditions and financial stability. The 

purpose of the TLGP is to promote 

financial stability by preserving 

confidence in the banking system and 

facilitating the flow of liquidity to 

creditworthy businesses and consumers, 

favorably impacting both the availability 

and cost of credit. Immediate issuance 

of this Interim Rule furthers the public 

interest by addressing the 

unprecedented disruption in credit 

markets, which remain largely closed to 

financial institutions unless their bonds 

and notes carry an FDIC guarantee. For 

these same reasons, the FDIC finds good 

cause to publish this Interim Rule with 

an immediate effective date. See 5 

U.S.C. 553(d)(3). 

Although general notice and 

opportunity for public comment are not 

required prior to the effective date, the 

FDIC invites comments on all aspects of 

the Interim Rule, which the FDIC may 

revise if necessary or appropriate in 

light of the comments received. 

B. Riegle Community Development and 

Regulatory Improvement Act 

The Riegle Community Development 

and Regulatory Improvement Act 

(RCDRIA) provides that any new 

regulations or amendments to 

regulations prescribed by a Federal 

banking agency that impose additional 

reporting, disclosures, or other new 

requirements on IDIs shall take effect on 

the first day of a calendar quarter which 

begins on or after the date on which the 

regulations are published in final form, 

unless the agency determines, for good 

cause published with the rule, that the 

rule should become effective before 

such time.12 For the same reasons 

discussed above, the FDIC finds that 

good cause exists for an immediate 

effective date for the Interim Rule. 

C. Small Business Regulatory 

Enforcement Fairness Act Not Finalized 

With OMB 

The Office of Management and Budget 

has previously determined that the 

Interim Rule is not a ‘‘major rule’’ 

within the meaning of the relevant 

sections of the Small Business 

Regulatory Enforcement Act of 1996 

(SBREFA), 5 U.S.C. 801 et seq. As 

required by SBREFA, the FDIC will file 

the appropriate reports with Congress 

and the Government Accountability 

Office so that the Interim Rule may be 

reviewed. 

D. Regulatory Flexibility Act 

The Regulatory Flexibility Act (Pub. 

L. 96–354, Sept. 19, 1980) (RFA) applies 

only to rules for which an agency 

publishes a general notice of proposed 

rule making pursuant to 5 U.S.C. 553(b). 

As discussed above, consistent with 

section 553(b)(B) of the APA, the FDIC 

has determined for good cause that 

general notice and opportunity for 

public comment would be impracticable 

and contrary to the public interest. 

Therefore, the RFA, pursuant to 5 U.S.C. 

601(2), does not apply. 

E. 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 

Office of Management and Budget 

(OMB) control number. This Interim 

Rule contains new reporting 

requirements that modify an existing 

collection of information, entitled 

‘‘Temporary Liquidity Guarantee 

Program’’ (OMB Control No. 3064– 

0166), and that have been submitted to 

OMB under emergency clearance 

procedures, with a request for clearance 

by March 17, 2009. The use of 

emergency clearance procedures is 

necessary to facilitate an orderly 

transition period for participating 

institutions to return to non-guaranteed 

funding and to reduce the potential for 

market disruption and sudden, 

unanticipated systemic risks to the 

nation’s financial system when the 

TLGP ends. A limited four-month 

extension of the DGP should also help 

to enhance bank liquidity while the 

elements of the Treasury’s proposed 

Financial Stability Plan are fully 

implemented. These new collections of 

information are necessary to give effect 

to the extension. Specifically, section 

370.3(h)(1)(vi) requires other 


dwashington3 on PROD1PC60 with RULES
12082 Federal Register / Vol. 74, No. 54 / Monday, March 23, 2009 / Rules and Regulations 

participating entities that have not 

issued FDIC-guaranteed debt before 

April 1, 2009 and that wish to 

participate in the extended DGP to 

submit a written application to the 

FDIC. Any such application must be 

submitted on or before June 30, 2009. In 

addition, section 370.3(h)(1)(vii) 

requires any participating entity that 

wishes to issue non-FDIC-guaranteed 

debt after June 30, 2009, to submit a 

written application to the FDIC. The 

estimated burden for the new 

applications is as follows: 

Title: Temporary Liquidity Guarantee 

Program. 

OMB Number: 3064–0166. 

Estimated Number of Respondents: 

Application to issue non-guaranteed 

debt—1,000. Application by other 

participating entity that has not issued 

FDIC-guaranteed debt before April 1, 

2009, to participate in the extended 

DGP—25. 

Frequency of Response: Application 

to issue non-guaranteed debt—once. 

Application by other participating entity 

that has not issued FDIC-guaranteed 

debt before April 1, 2009, to participate 

in the extended DGP—once. 

Affected Public: Thrift holding 

companies, bank and financial holding 

companies, and affiliates of insured 

depository institutions. 

Average Time per Response: 

Application to issue non-guaranteed 

debt—2 hours. Application by other 

participating entity that has not issued 

FDIC-guaranteed debt before April 1, 

2009, to participate in the extended 

DGP—2 hours. 

Estimated Annual Burden: 

Application to issue non-guaranteed 

debt—2,000 hours. Application by other 

participating entity that has not issued 

FDIC-guaranteed debt before April 1, 

2009, to participate in the extended 

DGP—50 hours. 

Previous Annual Burden—2,201,625 

hours. 

Total New Burden—2,050. 

Total Annual Burden—2,203,675 

hours. 

If the FDIC obtains OMB approval of 

its emergency clearance request, it will 

be followed by a request for clearance 

under normal procedures in accordance 

with the provisions of OMB regulation 

5 CFR 1320.10. In accordance with 

normal clearance procedures, public 

comment will be invited for an initial 

60-day comment period and a 

subsequent 30-day comment period on: 

(1) Whether these collections of 

information are 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 collections, 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 collections on respondents, 

including through the use of automated 

collection techniques or other forms of 

information technology. All comments 

should refer to the name and number of 

the collection. Interested parties are 

invited to submit written comments 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. 

F. 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 proposal 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 

regulation clearly stated? If not, how 

could the regulation be more clearly 

stated? 

• Does the regulation 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 regulation 

easier to understand? If so, what 

changes to the format would make the 

regulation easier to understand? 

• What else could the FDIC do to 

make the regulation easier to 

understand? 

G. The Treasury and General 

Government Appropriations Act, 1999— 

Assessment of Federal Regulations and 

Policies on Families 

The FDIC has determined that the 

interim rule will not affect family wellbeing within the meaning of section 654 

of the Treasury and General 

Government Appropriations Act, 

enacted as part of the Omnibus 

Consolidated and Emergency 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 stated in the preamble, 

the Federal Deposit Insurance 

Corporation amends part 370 of chapter 

III of Title 12 of the Code of Federal 

Regulations to read 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 as follows: 

■ a. Revise paragraph (f); 

■ b. Revise paragraph (m) introductory 

text; and 

■ c. Add a new paragraph (n) as follows: 

§ 370.2 Definitions. 

* * * * * 

(f) Newly issued senior unsecured 

debt. (1) The term ‘‘newly issued senior 

unsecured debt’’ means : 

(i) With respect to a participating 

entity that opted out of the debt 

guarantee program, senior unsecured 

debt that is issued on or after October 

14, 2008, and on or before the date the 

entity opted out; and 

(ii) With respect to a participating 

entity that has not opted out of the debt 

guarantee program, senior unsecured 

debt that is issued during the issuance 

period. 

(2) The term ‘‘newly issued senior 

unsecured debt’’ includes, without 

limitation, senior unsecured debt 

(i) That matures and is renewed 

during the issuance period; or 

(ii) That is issued during such period 

pursuant to a shelf registration, 

regardless of the date of creation of the 

shelf registration. 

* * * * * 

(m) Mandatory convertible debt. The 

term ‘‘mandatory convertible debt’’ 


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means senior unsecured debt that is 

required by the terms of the debt 

instrument to convert into common 

shares of the issuing entity on a fixed 

and specified date, on or before the 

expiration of the guarantee, unless the 

issuing entity: 

* * * * * 

(n) Issuance period. The term 

‘‘issuance period’’ means 

(1) 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: 

(i) Mandatory convertible debt, the 

period from February 27, 2009 to and 

including October 31, 2009, and 

(ii) All other senior unsecured debt, 

the period from October 14, 2008 to and 

including October 31, 2009; and 

(2) With respect to the issuance, by 

any other participating entity, of 

(i) Mandatory convertible debt, the 

period from February 27, 2009 to and 

including June 30, 2009, and 

(ii) All other senior unsecured debt, 

the period from October 14, 2008 to and 

including June 30, 2009. 

■ 3. Amend § 370.3 as follows: 

■ a. Revise the introductory text of 

paragraph (c); 

■ b. Revise paragraph (d); 

■ c. Revise paragraph (e)(3); 

■ d. Revise paragraphs (h)(1)(i) and 

(h)(1)(v) and add new paragraphs 

(h)(1)(vi) and (h)(1)(vii); 

■ e. Revise paragraph (h)(2); 

■ f. Revise paragraph (h)(3); 

■ g. Revise paragraph (h)(4); 

■ h. Revise paragraph (h)(5); 

■ i. Add a new paragraph (h)(6); 

■ j. Revise paragraph (i); and 

■ k. Add a new paragraph (j) as follows: 

§ 370.3 Debt Guarantee Program. 

* * * * * 

(c) Calculation and reporting 

responsibility. Participating entities are 

responsible for calculating and reporting 

to the FDIC the amount of senior 

unsecured debt as defined in 

§ 370.2(e)(1)(i) as of September 30, 2008. 

* * * * * 

(d) Expiration of Guarantee. 

(1) With respect to debt that is issued 

before April 1, 2009 by any participating 

entity, the guarantee expires on the 

earliest of the mandatory conversion 

date for mandatory convertible debt, the 

maturity date of the debt, or June 30, 

2012. 

(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, or 

a participating entity that has been 

approved pursuant to paragraph (h) of 

this section to issue guaranteed debt 

after June 30, 2009 and on or before 

October 31, 2009, the guarantee expires 

on the earliest of the mandatory 

conversion date for mandatory 

convertible debt, the maturity date of 

the debt, or December 31, 2012. 

(3) With respect to guaranteed debt 

that is issued on or after April 1, 2009 

by a participating entity other than an 

entity described in paragraph (d)(2) of 

this section, the guarantee expires on 

the earliest of the mandatory conversion 

date for mandatory convertible debt, the 

maturity date of the debt, or on June 30, 

2012. 

(e) * * * 

* * * * * 

(3) The issuing entity has had its 

participation in the debt guarantee 

program terminated by the FDIC or is 

not a participating entity; 

* * * * * 

(h) * * * 

(1) * * * 

(i) A request by a participating entity 

to establish, increase, or decrease its 

debt guarantee limit, 

* * * * * 

(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, and 

(vii) A request by a participating 

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

(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; and 

(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. 

(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, and 

(iv) For applications pursuant to 

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

entity’s plans for the retirement of the 

guaranteed debt. 

(4) Applications required under this 

part must be in letter form and 

addressed to the Director, Division of 

Supervision and Consumer Protection, 

Federal Deposit Insurance Corporation, 

550 17th Street, NW., Washington, DC 

20429. 

(5) The filing deadlines for certain 

applications are: 


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12084 Federal Register / Vol. 74, No. 54 / Monday, March 23, 2009 / Rules and Regulations 

(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; and 

(iv) June 30, 2009, for an application 

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

(6) In granting its approval of an 

application filed pursuant to paragraph 

(h) of this section the FDIC may impose 

any conditions it deems appropriate, 

including without limitation, a 

requirement 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. 

(i) Time limits on issuance of 

guaranteed debt. 

(1) 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, 

may issue FDIC-guaranteed debt under 

the debt guarantee program through and 

including October 31, 2009. 

(2) A participating entity other than 

an entity described in paragraph (i)(1) of 

this section may issue FDIC-guaranteed 

debt under the debt guarantee program 

through and including June 30, 2009. 

(j) Issuance of non-guaranteed debt 

after June 30, 2009. 

(1) After obtaining the FDIC’s prior 

written approval to issue nonguaranteed debt pursuant to paragraph 

(h)(1) of this section, any participating 

entity that has elected pursuant to 

paragraph (g) of this section to issue 

senior unsecured non-guaranteed debt 

with maturities after June 30, 2012 and 

that has paid the fee provided in 

§ 370.6(f), may issue after June 30, 2009 

senior unsecured non-guaranteed debt 

in any amount with maturities on or 

before June 30, 2012. A participating 

entity that has both made the election 

provided by paragraph (g) of this section 

and paid the fee provided by § 370.6(f) 

does not need the FDIC’s approval to 

issue senior unsecured non guaranteed 

debt that matures after June 30, 2012. 

(2) After obtaining the FDIC’s prior 

written approval to issue nonguaranteed debt pursuant to paragraph 

(h)(1) of this section, any participating 

entity, other than an entity described in 

paragraph (j)(1) of this section, may 

issue after June 30, 2009 senior 

unsecured non-guaranteed debt in any 

amount with any maturity. 

■ 4. Amend § 370.5 as follows: 

■ a. Revise paragraph (b)(1); 

■ b. Revise paragraph (f); and 

■ c. Revise paragraphs (h)(2), (h)(3), 

(h)(4) and (h)(5) as follows: 

§ 370.5 Participation. 

* * * * * 

(b) * * * 

(1) Bound by the terms and conditions 

of the program, including without 

limitation, assessments and the terms of 

the Master Agreement as set forth on the 

FDIC’s Web site; 

* * * * * 

(f) Except as provided in paragraphs 

(g) and (j) 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, or 

an entity that has been approved 

pursuant to § 370.3(h) to issue FDICguaranteed debt after June 30, 2009 and 

on or before 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.] 

(3) Each participating entity other 

than an entity described in paragraph 

(h)(2) of this section 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 June 30, 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 June 30, 2012.] 

(4) Each participating entity must 

include the following disclosure 

statement in all written materials 

provided to lenders or creditors 

regarding any senior unsecured debt 

issued by it during the applicable 

issuance period that is not guaranteed 

under the debt guarantee program: 

This debt is not guaranteed under the 

Federal Deposit Insurance Corporation’s 

Temporary Liquidity Guarantee Program. 

(5) Each insured depository 

institution that offers noninterestbearing transaction accounts must post 

a prominent notice in the lobby of its 

main office, each domestic branch and, 

if it offers Internet deposit services, on 

its Web site clearly indicating whether 

the institution is participating in the 

transaction account guarantee program. 

If the institution is participating in the 

transaction account guarantee program, 

the notice must state that funds held in 

noninterest-bearing transactions 

accounts at the entity are guaranteed in 

full by the FDIC. 

(i) These disclosures must be 

provided in simple, readily 

understandable text. Sample disclosures 

are as follows: 

For Participating Institutions 

[Institution Name] is participating in the 

FDIC’s Transaction Account Guarantee 

Program. Under that program, through 

December 31, 2009, all noninterest-bearing 

transaction accounts are fully guaranteed by 

the FDIC for the entire amount in the 

account. Coverage under the Transaction 

Account Guarantee Program is in addition to 

and separate from the coverage available 


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Federal Register / Vol. 74, No. 54 / Monday, March 23, 2009 / Rules and Regulations 12085 

under the FDIC’s general deposit insurance 

rules. 

For Non-Participating Institutions 

[Institution Name] has chosen not to 

participate in the FDIC’s Transaction 

Account Guarantee Program. Customers of 

[Institution Name] with noninterest-bearing 

transaction accounts will continue to be 

insured through December 31, 2009 for up to 

$250,000 under the FDIC’s general deposit 

insurance rules. 

(ii) If the institution uses sweep 

arrangements or takes other actions that 

result in funds being transferred or 

reclassified to an account that is not 

guaranteed under the transaction 

account guarantee program, for 

example, an interest-bearing account, 

the institution must disclose those 

actions to the affected customers and 

clearly advise them, in writing, that 

such actions will void the FDIC’s 

guarantee with respect to the swept, 

transferred, or reclassified funds. 

* * * * * 

■ 5. Amend § 370.6 as follows: 

■ a. Revise paragraph (c)(2); 

■ b. Revise paragraphs (d)(1) 

introductory text, (d)(2), and the first 

sentence of paragraph (d)(3); 

■ c. Revise paragraph (d)(4); and 

■ d. Add new paragraphs (g)(4) and (h) 

as follows: 

§ 370.6 Assessments under the Debt 

Guarantee Program. 

* * * * * 

(c) * * * 

(2) Beginning on December 6, 2008, 

on all senior unsecured debt, as defined 

in paragraphs (e)(1)(ii) or (e)(1)(iii) of 

§ 370.2, issued by it on or after 

December 6, 2008. 

(d) * * * 

(1) Calculation of assessment. Subject 

to paragraphs (d)(3) and (h) of this 

section, the amount of assessment will 

be determined by multiplying the 

amount of FDIC-guaranteed 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. 

* * * * * 

(2) If the debt being issued has a 

maturity date that occurs after the 

expiration date of the guarantee, the 

expiration date of the guarantee instead 

of the maturity date will be used to 

calculate the assessment. 

(3) The amount of assessment for a 

participating entity, other than an 

insured depository institution, that 

controls, directly or indirectly, or is 

otherwise affiliated with, at least one 

insured depository institution will be 

determined by multiplying the amount 

of FDIC-guaranteed 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 

rates set forth in the table in paragraph 

(d)(1) of this section, except that each 

such rate shall be increased by 10 basis 

points, if the combined assets of all 

insured depository institutions affiliated 

with such entity constitute less than 50 

percent of consolidated holding 

company assets. * * * 

(4) Assessment Invoicing. As soon as 

the participating entity provides notice 

as required in paragraph (b) of this 

section, the invoice for the appropriate 

fee will be automatically generated and 

posted on FDICconnect for the account 

associated with the participating entity, 

and the time limits for providing 

payment in paragraph (g) of this section 

will apply. 

* * * * * 

(g) * * * 

(4) For purposes of this paragraph (g) 

of this section, assessments shall 

include all applicable surcharges 

imposed pursuant to paragraph (h) of 

this section. 

(h) Surcharges on assessments. 

(1) For FDIC-guaranteed debt that has 

a time period to conversion (in the case 

of mandatory convertible debt) or a 

maturity of one year or more, that is 

issued on or after April 1, 2009 and on 

or before June 30, 2009, and that 

matures or converts on or before June 

30, 2012, the assessment rate provided 

in the table in paragraph (d)(1) of this 

section shall be increased by: 

(i) 10 basis points for such debt that 

is issued by a participating entity that is 

an insured depository institution, and 

(ii) 20 basis points for such debt that 

is issued by any other participating 

entity. 

(2) For FDIC-guaranteed debt that has 

a time period to conversion (in the case 

of mandatory convertible debt) or a 

maturity of one year or more, and that 

is either issued on or after April 1, 2009 

with a maturity or conversion date after 

June 30, 2012, or issued after June 30, 

2009, the assessment rate provided in 

the table in paragraph (d)(1) of this 

section shall be increased by 

(i) 25 basis points for such debt that 

is issued by a participating entity that is 

an insured depository institution, and 

(ii) 50 basis points for such debt that 

is issued by any other participating 

entity. 

■ 6. Revise § 370.8 to read as follows: 

§ 370.8 Systemic risk emergency special 

assessment to recover loss. 

To the extent that the assessments 

provided under § 370.6 or § 370.7, other 

than the surcharges provided in 

§ 370.6(h), are insufficient to cover any 

loss or expenses arising from the 

temporary liquidity guarantee program, 

the Corporation shall impose an 

emergency special assessment on 

insured depository institutions as 

provided under 12 U.S.C. 

1823(c)(4)(G)(ii) of the FDI Act. 

■ 7. Revise § 370.9 to read as follows: 

§ 370.9 Recordkeeping requirements. 

The FDIC will establish procedures, 

require reports, and require 

participating entities to provide and 

preserve any information needed for the 

operation and supervision of this 

program. 

■ 8. Revise § 370.12(b)(2) to read as 

follows: 

§ 370.12 Payment on the guarantee. 

* * * * * 

(b) * * *. 

(2) Method of payment. Upon the 

occurrence of a payment default, the 

FDIC shall satisfy its guarantee 

obligation by making scheduled 

payments of principal and interest 

pursuant to the terms of the debt 

instrument through maturity (without 

regard to default or penalty provisions). 

For purposes of mandatory convertible 

debt, principal payment shall be limited 

to amounts paid by holders under the 

issuance. The FDIC may in its 

discretion, at any time after the 

expiration of the guarantee period, elect 

to make a final payment of all 

outstanding principal and interest due 

under a guaranteed debt instrument 

whose maturity extends beyond that 

date. In such case, the FDIC shall not be 

liable for any prepayment penalty. 

* * * * * 

Dated at Washington, DC, this 17th day of 

March, 2009. 

By order of the Board of Directors. 

Federal Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. E9–6115 Filed 3–20–09; 8:45 am] 

BILLING CODE 6714–01–P 


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