Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Proposed Rules 31217 

rates and fees no greater than those of 

comparable education loans offered 

through loan programs of the U.S. 

Department of Education. 

(f) Activities in cooperation with 

minority- or women-owned financial 

institutions and low-income credit 

unions. In assessing and taking into 

account the record of a nonminorityowned and nonwomen-owned bank 

under this part, the FDIC considers as a 

factor capital investment, loan 

participation, and other ventures 

undertaken by the bank in cooperation 

with minority- and women-owned 

financial institutions and low-income 

credit unions, provided that such 

activities help meet the credit needs of 

local communities in which the 

minority- and women-owned financial 

institutions and low-income credit 

unions are chartered. To be considered, 

such activities need not also benefit the 

bank’s assessment area(s) or the broader 

statewide or regional area that includes 

the bank’s assessment area(s). 

3. In Appendix A to Part 345, 

paragraph (a)(1) is revised to read as 

follows: 

Appendix A to Part 345—Ratings 

(a) * * * (1) In assigning a rating, the FDIC 

evaluates a bank’s performance under the 

applicable performance criteria in this part, 

in accordance with §§ 345.21 and 345.28. 

This includes consideration of low-cost 

education loans provided to low-income 

borrowers and activities in cooperation with 

minority- or women-owned financial 

institutions and low-income credit unions, as 

well as adjustments on the basis of evidence 

of discriminatory or other illegal credit 

practices. 

* * * * * 

Office of Thrift Supervision 

12 CFR Chapter V 

For the reasons set forth in the joint 

preamble, the Office of Thrift 

Supervision proposes to amend part 

563e of chapter V of title 12 of the Code 

of Federal Regulations as follows: 

PART 563e—COMMUNITY 

REINVESTMENT 

1. The authority citation for part 563e 

is revised to read as follows: 

Authority: 12 U.S.C. 1462a, 1463, 1464, 

1467a, 1814, 1816, 1828(c), and 2901 through 

2908. 

2. In § 563e.21, add new paragraphs 

(e) and (f) to read as follows: 

§ 563e.21 Performance tests, standards, 

and ratings, in general. 

* * * * * 

(e) Low-cost education loans provided 

to low-income borrowers. In assessing 

and taking into account the record of a 

savings association under this part, the 

OTS considers, as a factor, low-cost 

education loans provided by the savings 

association to borrowers in its 

assessment area(s) who have an 

individual income that is less than 50 

percent of the area median income. For 

purposes of this paragraph, ‘‘low-cost 

education loans’’ means: 

(1) Education loans originated by the 

savings association through a loan 

program of the U.S. Department of 

Education; or 

(2) Any other private education loan, 

as defined in section 140(a)(7) of the 

Truth in Lending Act (including a loan 

under a State or local education loan 

program), originated by the savings 

association for a student at an 

‘‘institution of higher education,’’ as 

that term is generally defined in 

sections 101 and 102 of the Higher 

Education Act of 1965 (20 U.S.C. 1001 

and 1002) and the implementing 

regulations published by the 

Department of Education, with interest 

rates and fees no greater than those of 

comparable education loans offered 

through loan programs of the U.S. 

Department of Education 

(f) Activities in cooperation with 

minority- or women-owned financial 

institutions and low-income credit 

unions. In assessing and taking into 

account the record of a nonminorityowned and nonwomen-owned savings 

association under this part, the OTS 

considers as a factor capital investment, 

loan participation, and other ventures 

undertaken by the savings association in 

cooperation with minority- and womenowned financial institutions and lowincome credit unions, provided that 

such activities help meet the credit 

needs of local communities in which 

the minority- and women-owned 

financial institutions and low-income 

credit unions are chartered. To be 

considered, such activities need not also 

benefit the savings association’s 

assessment area(s) or the broader 

statewide or regional area that includes 

the savings association’s assessment 

area(s). 

3. In Appendix A to part 563e, 

paragraph (a)(1) is revised to read as 

follows: 

Appendix A to Part 563e—Ratings 

(a) * * * (1) In assigning a rating, the OTS 

evaluates a savings association’s performance 

under the applicable performance criteria in 

this part, in accordance with §§ 563e.21 and 

563e.28. This includes consideration of lowcost education loans provided to low-income 

borrowers and activities in cooperation with 

minority- or women-owned financial 

institutions and low-income credit unions, as 

well as adjustments on the basis of evidence 

of discriminatory or other illegal credit 

practices. 

* * * * * 

Dated: June 19, 2009. 

John C. Dugan, 

Comptroller of the Currency. 

By order of the Board of Governors of the 

Federal Reserve System, June 23, 2009. 

Jennifer J. Johnson, 

Secretary of the Board. 

Dated at Washington, DC, this 23rd day of 

June 2009. 

Federal Deposit Insurance Corporation. 

Valerie J. Best, 

Assistant Executive Secretary. 

Dated: June 17, 2009. 

By the Office of Thrift Supervision. 

John E. Bowman, 

Acting Director. 

[FR Doc. E9–15204 Filed 6–29–09; 8:45 am] 

BILLING CODE 4810–33–P, 6210–01–P, 6714–01–P, 

6720–01–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 370 

RIN 3064–AD37 

Notice of Proposed Rulemaking 

Regarding Possible Amendment of the 

Temporary Liquidity Guarantee 

Program To Extend the Transaction 

Account Guarantee Program With 

Modified Fee Structure 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Notice of proposed rulemaking. 

SUMMARY: The FDIC is issuing this 

Notice of Proposed Rulemaking to 

present and request comment on two 

alternatives for phasing out the 

Transaction Account Guarantee (TAG) 

component of the Temporary Liquidity 

Guarantee Program (TLGP). Under the 

first proposed alternative, the FDIC’s 

guarantee of deposits held in qualifying 

noninterest-bearing transaction accounts 

subject to the TAG program would 

continue until December 31, 2009. 

There would be no modification of the 

existing fee structure or any other 

change in the FDIC’s guarantee of 

noninterest-bearing transaction 

accounts, as provided for in the current 

regulation. 

Under the second proposed 

alternative, the TAG program would be 

extended for six months until June 30, 

2010. Insured depository institutions 

(IDIs) that are currently participating in 

the TAG program would be provided a 

single opportunity to opt out of the 

extended TAG program. IDIs that opt 


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31218 Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Proposed Rules 

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 authorized the 

FDIC to take actions to avoid or mitigate serious 

adverse effects on economic conditions or financial 

stability, and the FDIC implemented the TLGP in 

response. 

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

1819(a)Tenth, provides additional authority for the 

establishment of the TLGP. 

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 12078 (March 23, 2009). This Interim 

Rule was finalized and a Final Rule was published 

in the Federal Register on June 3, 2009. 74 FR 

26521 (June 3, 2009). 

All IDIs and those other participating entities that 

issued debt under the TLGP on or before April 1, 

2009, may participate in the extended DGP without 

application to the FDIC. Other participating entities 

that did not issue FDIC-guaranteed debt by April 1, 

2009, may apply to participate in the extended 

DGP. 12 CFR 370.2(n); 370.3(h)(vi). 

out of the extended TAG program would 

be required to update their disclosure 

postings and notices to indicate that 

they are no longer participating in the 

program. 

Under this proposal, IDIs choosing to 

participate in the extended TAG 

program, would be subject to increased 

fees for the FDIC’s extended guarantee 

of its qualifying noninterest-bearing 

transaction accounts. Also, IDIs 

participating in the extended TAG 

program might be required to update 

their disclosures related to the TAG 

program. 

DATES: Written comments must be 

received by the FDIC no later than July 

30, 2009. 

ADDRESSES: You may submit comments 

on the Final 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/final.html, including any 

personal information provided. 

FOR FURTHER INFORMATION CONTACT: 

Christopher L. Hencke, Counsel, Legal 

Division, (202) 898–8839 or 

chencke@fdic.gov; A. Ann Johnson, 

Counsel, Legal Division, (202) 898–3573 

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

Counsel, Legal Division, (202) 898–8962 

or rfick@fdic.gov; Joe DiNuzzo, Counsel, 

Legal Division, (202) 898–7349 or 

jdinuzzo@fdic.gov; Lisa D. Arquette, 

Associate Director, Division of 

Supervision and Consumer Protection, 

(202) 898–8633 or larquette@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: 

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 inability of financial 

institutions to fund themselves and 

make loans to creditworthy borrowers. 

On October 23, 2008, the FDIC’s 

Board of Directors (Board) initially 

authorized the publication in the 

Federal Register of an interim rule that 

outlined the parameters of the TLGP.2

Designed to assist in the stabilization of 

the nation’s financial system, the FDIC’s 

TLGP was designed to be a temporary 

program and is comprised of two 

distinct components: the Debt 

Guarantee Program (DGP), pursuant to 

which the FDIC guarantees certain 

senior unsecured debt issued by entities 

participating in the TLGP, and the TAG 

program, pursuant to which the FDIC 

guarantees all funds held at 

participating IDIs (beyond the standard 

maximum deposit insurance limit) in 

qualifying noninterest-bearing 

transaction accounts. 

The DGP generally permitted 

participating entities to issue FDICguaranteed senior unsecured debt until 

June 30, 2009, with the FDIC’s guarantee 

for such debt to expire on the earlier of 

the maturity or conversion of the debt 

(for mandatory convertible debt) or June 

30, 2012. On March 17, 2009, to reduce 

market disruption at the conclusion of 

the debt guarantee component of the 

TLGP and to facilitate the orderly phaseout of the program, the Board adopted 

an interim rule that, among other things, 

provided for a limited four-month 

extension for the issuance of senior 

unsecured debt under the DGP.3

At the time the TLGP was developed, 

there was concern that many account 

holders might withdraw their uninsured 

balances from IDIs. The TAG 

component of the TLGP was designed to 

improve public confidence and 

encourage depositors to leave these 

large account balances at IDIs of various 

sizes. Loss of these accounts would have 

potentially impaired the funding 

structure of the banking institutions that 

relied on them, as well as other 

institutions that had relationships with 

these banks. 

The TAG program has been an 

important source of stability for banks 

with large transaction account balances. 

Over 7,100 IDIs are participating in the 

TAG program, with an estimated $700 

billion of deposits in noninterestbearing transaction accounts (that 

would not otherwise be insured) 

currently subject to the FDIC’s 

guarantee. Although liquidity in 

financial markets has not returned to 

pre-crisis levels, financial market 

volatility and risk aversion have 

moderated since the fall of 2008 when 

the FDIC implemented the TAG 

program as part of the TLGP. 

The TAG program is scheduled to 

expire on December 31, 2009. As with 

the DGP, the FDIC is committed to 

providing an orderly phase-out of the 

TAG program for participating IDIs and 

their depositors. To that end, and as 

discussed in more detail below, the 

FDIC proposes and requests comment 

on two alternatives for successfully 

concluding the TAG program. 

II. Proposed Alternatives for 

Concluding the Transaction Account 

Guarantee Program 

The FDIC proposes to conclude its 

guarantee of noninterest-bearing 

transaction accounts under the TAG 

program using one of the alternatives 

that follow. In general, Alternative A 

would permit the program to expire on 

December 31, 2009, as provided for in 

existing regulations. Alternative B 

would extend the TAG program until 

June 30, 2010, but the extension would 

be coupled with increased fees for 

participation and possible new 

disclosure requirements. 

A. Alternative A 

Alternative A would preserve the 

current regulation regarding the 

duration of the FDIC’s guarantee for 

coverage of deposits in noninterestbearing transaction accounts pursuant to 

the TAG program. Under the current 


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Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Proposed Rules 31219 

4 12 CFR 370.4(a). 

5 12 CFR 370.5(h)(5). 

6 Id. 

7 Id. 

8 12 CFR 370.7(c). 

9 12 CFR 370.5(h)(5). 

10 Id. 

regulation, the FDIC’s guarantee of 

noninterest-bearing transaction accounts 

expires on the earlier of the date of optout (if an IDI opted out of the TAG 

program) or December 31, 2009.4 Any 

IDI that offers noninterest-bearing 

transaction accounts is required to post 

a conspicuous notice in its lobby, 

branch(es), and Web site, if applicable, 

that discloses whether the IDI is 

participating in the TAG program.5

Disclosures for participating IDIs must 

contain a statement that indicates that 

all noninterest-bearing transaction 

accounts are fully guaranteed by the 

FDIC.6 In addition, even those IDIs that 

are not participating in the TAG 

program are required to disclose that 

deposits in noninterest-bearing 

transaction accounts continue to be 

insured for up to $250,000, pursuant to 

the FDIC’s general deposit insurance 

rules.7 At this time, IDIs participating in 

the TAG program pay quarterly an 

annualized 10 basis point assessment on 

any deposit amounts that exceed the 

existing deposit insurance limit.8

B. Alternative B 

Under the proposed Alternative B, the 

TAG program would be extended 

through June 30, 2010, six months 

beyond the current expiration date of 

December 31, 2009. The extended 

guarantee would apply only to 

noninterest-bearing transaction accounts 

maintained at IDIs that do not opt out 

of the extended TAG program, as 

discussed below. If an IDI that is 

currently participating in the program 

opts out, the FDIC’s guarantee would 

expire as scheduled on December 31, 

2009. 

Increased Fees for Participation in the 

Extended TAG Program 

If the TAG program is extended, the 

FDIC expects to increase fees to support 

its continued guarantee. The cost of 

providing guarantees for noninterestbearing transaction accounts at failed 

IDIs since the inception of the TAG 

program already has exceeded projected 

total TAG program revenue through the 

end of December 2009. The FDIC 

projects additional failures of IDIs 

through the end of the year that will 

result in overall TAG losses that are 

expected to considerably exceed 

revenues. (Revenues generated from fees 

associated with the DGP are expected to 

cover TAG losses as well as losses 

incurred by the FDIC under the DGP.) In 

an effort to balance the income 

generated from TAG fees with potential 

losses associated with the TAG program, 

during the extension period, the FDIC 

proposes to charge an annualized rate of 

25 basis points (rather than the current 

10 basis points) on deposits in 

noninterest-bearing transaction 

accounts. The fee would continue to be 

collected quarterly in the same manner 

as provided for in existing regulations. 

Limited Opportunity To Opt Out of 

Extended TAG Program 

Because of the increase in fees and the 

other regulatory modifications 

associated with an extension of the TAG 

program, the FDIC proposes to offer 

participating IDIs a single opportunity 

to opt out of the TAG extension. An IDI 

that wishes to opt out of the TAG 

extension would be required to provide 

the FDIC with notice of its intent to opt 

out by submitting an e-mail with the 

subject line ‘‘TLGP Election Form Opt 

Out Requested—Cert No. XXXXX’’ to 

dcas@fdic.gov. The e-mail would be 

required to include the following 

information: Name of the IDI; FDIC 

certificate number; City, State, and zip 

code for the IDI; contact name and 

contact information (telephone number 

and e-mail address); a concise statement 

that the IDI would like to opt out of the 

TAG program effective January 1, 2010; 

and confirmation that, no later than 

November 15, 2009, the IDI will post a 

notice in the lobby of its main office, 

each domestic branch, and if it offers 

Internet deposit services, on its Web 

site, clearly indicating that funds held 

in noninterest-bearing transaction 

accounts that are in excess of the 

standard maximum deposit insurance 

amount will not be guaranteed under 

the TAG program after December 31, 

2009. 

Once this information has been 

received and processed, FDIC staff 

would contact the IDI to confirm the 

IDI’s opt out decision. At this time, 

FDIC staff also would be able to provide 

a PDF document of the IDI’s Election 

Form that would indicate the IDI’s opt 

out decision regarding the TAG program 

(available for download via 

FDICconnect). 

Disclosure Requirements 

Under regulations governing the TAG 

program, each IDI that offers 

noninterest-bearing transaction accounts 

is required to post a prominent notice in 

the lobby of its main office, in each 

domestic branch and, if it offers Internet 

deposit services, on its Web site clearly 

indicating whether the institution is 

participating in the TAG program.9 If an 

IDI is participating in the TAG program, 

the notice must state that funds held in 

noninterest-bearing transaction accounts 

at the institution are guaranteed in full 

by the FDIC. Although existing 

regulations do not require specific 

language to appear in disclosures 

regarding the TAG program, the notices 

must be provided in simple, readily 

understandable text. Also, if the IDI uses 

sweep arrangements or takes other 

actions that result in funds being 

transferred or reclassified to an account 

that is not guaranteed under the TAG 

program, the IDI must disclose those 

actions to the affected customers and 

clearly advise them, in writing, that 

such actions will void the FDIC’s 

guarantee as to the swept, transferred, or 

reclassified funds.10 Existing regulations 

provide sample disclosures for IDIs that 

participate and for those that do not 

participate in the TAG program. 

If the expiration date of the TAG 

program is extended, participating IDIs 

that do not opt out of the extended TAG 

program may be required to amend 

these disclosures. The current TAG 

program disclosure postings and notices 

would suffice, as long as those notices 

continue to be accurate and, in 

particular, do not indicate that the 

FDIC’s guarantee will apply only 

through December 31, 2009. Disclosures 

that indicate that the FDIC’s guarantee 

under the TAG program will terminate 

on December 31, 2009, would have to be 

updated to reference June 30, 2010, as 

the extended termination date. Also, on 

or before November 15, 2009, 

participating IDIs that opt out of the 

extended TAG program would be 

required to update their disclosures to 

inform customers and depositors that, 

beginning on January 1, 2010, they will 

no longer participate in the TAG 

program and the deposits in 

noninterest-bearing transaction accounts 

will no longer be guaranteed in full by 

the FDIC. 

III. Request for Comments 

The FDIC requests comments on every 

aspect of this notice and particularly 

asks commenters to indicate a 

preference for Alternative A or 

Alternative B (or some other alternative) 

as a means of providing an orderly 

phase out of the FDIC’s TAG program. 

In addition, the FDIC requests 

comment on the following questions: 

• If the TAG program is extended, is 

six months an appropriate time for the 

extension? If not, what would be 

considered an appropriate extension 


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31220 Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Proposed Rules 

period for the TAG program? Please 

provide reasons to support your 

comment. 

• When the TAG program was 

modified to include an FDIC-guarantee 

for NOW accounts, the FDIC’s guarantee 

extended only to those NOW accounts 

with interest rates no higher than 0.50 

percent. The interest rate limitation 

placed on such accounts was 

comparable to the average effective 

Federal funds rates and significantly 

below the one month CD rates and 

money market fund rates. The NOW 

interest rate limitation for purposes of 

the TAG program is now almost three 

times the Federal funds rate, double the 

one month CD rate, and comparable to 

the average money market deposit 

account rate. 

Should the FDIC reduce the 

maximum interest rate for NOW 

accounts that qualify for the FDIC’s 

guarantee under the TAG program? For 

example, would placing an interest rate 

limit on NOW accounts of no higher 

than 0.25 percent be appropriate? If not, 

what would be considered an 

appropriate interest rate limitation for 

NOW accounts? Please provide reasons 

to support your comment. 

• In order to balance the income 

generated from TAG fees with potential 

losses associated with the TAG program, 

during the extension period the FDIC 

has proposed to charge an annualized 

rate of 25 basis points (rather than the 

current 10 basis points) on deposits in 

noninterest-bearing transaction 

accounts. Is this increase in fees 

appropriate? If not, what fee should be 

charged by the FDIC to cover potential 

losses caused by an extension of the 

TAG program? Please provide reasons to 

support your comment. 

IV. 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 7,107 IDIs participate in the 

TAG program, of which approximately 

3,744, or 52.7 percent are small entities. 

Within the universe of small 

institutions, 1,072, or 28.6 percent did 

not have TAG eligible deposits as of the 

March 2009 Report of Condition and 

Income for banks and the Thrift 

Financial Report for thrifts (collectively, 

‘‘March 2009 Call Reports’’); thus, they 

were not required to pay the 10 basis 

point fee currently assessed for 

participation in the TAG program. 

Assuming these IDIs do not change 

circumstances and do not opt out as 

provided in Alternative B, there would 

be no impact on this group if the 

proposed fee increase contained in 

Alternative B were adopted. As to the 

remaining 2,672 small entities that had 

TAG eligible deposits as of the March 

2009 Call Reports, they would have the 

opportunity to opt out of the extended 

TAG program if Alternative B were 

adopted. However, assuming these 

2,672 small entities remain in the TAG 

program if Alternative B is adopted, the 

FDIC asserts that Alternative B 

described in the proposed rulemaking 

could have some impact on a substantial 

number of them that remain participants 

in the TAG program during the 

extension period. 

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. With respect to the fee increase 

from 10 basis points to 25 basis points 

if Alternative B were adopted, based on 

figures from the March 2009 Call 

Reports, the average fee increase for IDIs 

participating in the extended TAG 

program would be $2,200 annually, 

representing 0.8 percent of the average 

net operating income before taxes. In 

addition, because Alternative B 

proposed only a six-month extension, 

the actual average fee would be less 

than the annualized projection. 

Moreover, the FDIC asserts that the 

economic benefit of the six-month 

extension of Alternative B would 

outweigh the increased fee associated 

with participation in that the small 

entities would benefit from the 

extended time period within which to 

phase out the TAG program as financial 

markets continue to stabilize. 

With respect to amending the 

disclosures related to the TAG program 

if Alternative B is adopted, the FDIC 

asserts that the economic impact on all 

small entities participating in the 

program (regardless of whether they pay 

a fee) would be de minimus in nature 

and would be outweighed by the 

economic benefit of the six-month 

extension. 

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. Alternative B of the 

Notice of Proposed Rulemaking contains 

reporting and disclosure requirements 

that, if adopted, would revise an 

existing OMB-approved information 

collection, entitled the ‘‘Temporary 

Liquidity Guarantee Program’’ (OMB 

No. 3064–0166). Specifically, section 

370.5(c)(2) allows IDIs participating in 

the TAG program on October 31, 2009, 

to opt out of the program effective 

January 1, 2010. In addition, section 

370.5(g)(2)(vi) requires institutions that 

opt out of the TAG program to disclose 

to customers that funds in excess of the 

standard maximum deposit insurance 

amount will no longer be guaranteed 

under the TAG program after December 

31, 2009. The estimated burden for the 

reporting and disclosure requirements, 

as set forth in the Notice of Proposed 

Rulemaking, is as follows: 

Title: Temporary Liquidity Guarantee 

Program. 

OMB Number: 3064–0166. 

Affected public: Participating IDIs— 

7,109. 

Estimated Number of Respondents: 

Opt out of TAG program/Disclosure to 

customers of discontinuation of TAG 

program guarantee—3,555. 

Disclosure to customers of TAG program 

guarantee extension—3,554. 

Frequency of Response: 

Opt out of TAG program/Disclosure to 

customers of discontinuation of TAG 

program guarantee—once. 

Disclosure to customers of TAG program 

guarantee extension—once. 

Average Time per Response: 

Opt out of TAG program/Disclosure to 

customers of discontinuation of TAG 

program guarantee—1 hour. 

Disclosure to customers of TAG program 

guarantee extension—1 hour. 

Estimated Annual Burden: 

Opt out of TAG program/Disclosure to 

customers of discontinuation of TAG 

program guarantee—3,555 hours. 


sroberts on PROD1PC70 with PROPOSALS
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Disclosure to customers of TAG 

program guarantee extension—3554 

hours. 

Current annual burden—382,214 

hours. 

Total new burden—7,109 hours 

Total annual burden—389,323 hours. 

The FDIC is requesting comment on 

the proposed new TLGP-related 

information collection. 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 for opt-out of the TAG program 

and disclosures to customers of 

discontinuation of TAG program 

guarantees 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 regulation clearly stated? If 

not, how could the proposed regulation 

be more clearly stated? 

• Does the proposed 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 proposed 

regulation easier to understand? If so, 

what changes to the format would make 

the proposed regulation easier to 

understand? 

• What else could the FDIC do to 

make the proposed regulation 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 part 370 

of chapter III of Title 12 of the Code of 

Federal Regulations 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 (g); and 

b. Revise paragraph (h)(4); to read as 

follows: 

§ 370.2 Definitions. 

* * * * * 

(g) Participating entity. The term 

‘‘participating entity’’ means with 

respect to each of the debt guarantee 

program and the transaction account 

guarantee program, 

(1) An eligible entity that became an 

eligible entity on or before December 5, 

2008 and that has not opted out, or 

(2) An entity that becomes an eligible 

entity after December 5, 2008, and that 

the FDIC has allowed to participate in 

the program, except that a participating 

entity that opts out of the transaction 

account guarantee program in 

accordance with § 370.5(c)(2) ceases to 

be a participating entity in the 

transaction account guarantee program 

effective on January 1, 2010. 

(h) * * * 

(4) Notwithstanding paragraph (h)(3) 

of this section, a NOW account with an 

interest rate above 0.50 percent as of 

November 21, 2008, may be treated as 

a noninterest-bearing transaction 

account for purposes of this part, if the 

insured depository institution at which 

the account is held reduces the interest 

rate on that account to 0.50 percent or 

lower before January 1, 2009, and 

commits to maintain that interest rate at 

no more than 0.50 percent at all times 

during the period in which the 

institution is participating in the 

transaction account guarantee program. 

* * * * * 

3. Amend § 370.4 by revising 

paragraph (a) to read as follows: 

§ 370.4 Transaction Account Guarantee 

Program. 

(a) In addition to the coverage 

afforded to depositors under 12 CFR 

Part 330, a depositor’s funds in a 

noninterest-bearing transaction account 

maintained at a participating entity that 

is an insured depository institution are 

guaranteed in full (irrespective of the 

standard maximum deposit insurance 

amount defined in 12 CFR 330.1(n)) 

from October 14, 2008 through: 

(1) The date of opt-out, in the case of 

an entity that opted out prior to 

December 5, 2008; 

(2) December 31, 2009, in the case of 

an entity that opts out effective on 

January 1, 2010; or 

(3) June 30, 2010, in the case of an 

entity that does not opt out. 

* * * * * 

4. Amend § 370.5 as follows: 

a. Revise paragraph (c); 

b. Revise paragraph (g); and 

c. Revise paragraph (h)(5), to read as 

follows: 

§ 370.5 Participation. 

* * * * * 

(c) Opt-out and opt-in options. 

(1) From October 14, 2008 through 

December 5, 2008, each eligible entity is 

a participating entity in both the debt 


sroberts on PROD1PC70 with PROPOSALS
31222 Federal Register / Vol. 74, No. 124 / Tuesday, June 30, 2009 / Proposed Rules 

guarantee program and the transaction 

account guarantee program, unless the 

entity opts out. No later than 11:59 p.m., 

Eastern Standard Time, December 5, 

2008, each eligible entity must inform 

the FDIC if it desires to opt out of the 

debt guarantee program or the 

transaction account guarantee program, 

or both. Failure to opt out by 11:59 p.m., 

Eastern Standard Time, December 5, 

2008 constitutes a decision to continue 

in the program after that date. Prior to 

December 5, 2008 an eligible entity may 

opt in to either or both programs by 

informing the FDIC that it will not opt 

out of either or both programs. 

(2) Any insured depository institution 

that is participating in the transaction 

account guarantee program may elect to 

opt out of such program effective on 

January 1, 2010. Any such an election 

to opt out must be made in accordance 

with the procedures set forth in 

paragraph (g)(2) of this section. An 

election to opt out once made is 

irrevocable. 

* * * * * 

(g) Procedures for opting out. 

(1) Except as provided in paragraph 

(g)(2) of this section, the FDIC will 

provide procedures for opting out and 

for making an affirmative decision to 

opt in using FDIC’s secure e-business 

Web site, FDICconnect. Entities that are 

not insured depository institutions will 

select and solely use an affiliated 

insured depository institution to submit 

their opt-out election or their affirmative 

decision to opt in. 

(2) Pursuant to paragraph (c)(2) of this 

section a participating entity may opt 

out of the transaction account guarantee 

program by submitting to the FDIC on 

or before 11:59 p.m. EDST on October 

31, 2009 an e-mail conveying the 

entity’s election to opt out. The subject 

line of the e-mail must include: ‘‘TLGP 

Election to Opt Out—Cert. No. ____ .’’ 

The e-mail must be addressed to 

dcas@fdic.gov and must include the 

following: 

(i) Institution Name; 

(ii) FDIC Certificate number; 

(iii) City, State, ZIP; 

(iv) Name, Telephone Number and Email Address of a Contact Person; 

(v) A statement that the institution is 

opting out of the transaction account 

guarantee program effective January 1, 

2010; and 

(vi) Confirmation that no later than 

November 15, 2009 the institution will 

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 that 

funds held in non-interest bearing 

transaction accounts that are in excess 

of the standard maximum deposit 

insurance amount will not be 

guaranteed under the transaction 

account guarantee program after 

December 31, 2009. 

(h) * * * 

(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 June 

30, 2010, 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 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 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 § 370.7 by revising 

paragraph (c) to read as follows: 

§ 370.7 Assessments for the Transaction 

Account Guarantee Program. 

* * * * * 

(c) Amount of assessment. 

(1) Except as provided in paragraph 

(c)(2) of this section any eligible entity 

that does not opt out of the transaction 

account guarantee program shall pay 

quarterly an annualized 10 basis point 

assessment on any deposit amounts 

exceeding the existing deposit insurance 

limit of $250,000, as reported on its 

quarterly Consolidated Reports of 

Condition and Income, Thrift Financial 

Report, or Report of Assets and 

Liabilities of U.S. Branches and 

Agencies of Foreign Banks (each, a ‘‘Call 

Report’’) in any noninterest-bearing 

transaction accounts (as defined in 

§ 370.2(h)), including any such amounts 

swept from a noninterest bearing 

transaction account into a noninterest 

bearing savings deposit account as 

provided in § 370.4(c). 

(2) Beginning on January 1, 2010, a 

participating entity that does not opt out 

of the transaction account guarantee 

program in accordance with 

§ 370.5(c)(2) shall pay quarterly an 

annualized 25 basis point assessment on 

any deposit amounts exceeding the 

existing deposit insurance limit of 

$250,000, as reported on its quarterly 

Call Report in any noninterest-bearing 

transaction accounts (as defined in 

§ 370.2(h)), including any such amounts 

swept from a noninterest bearing 

transaction account into a noninterest 

bearing savings deposit account as 

provided in § 370.4(c). 

(3) The assessments provided in this 

paragraph (c) shall be in addition to an 

institution’s risk-based assessment 

imposed under Part 327. 

* * * * * 

By order of the Board of Directors. 

Dated at Washington, DC, this 23rd day of 

June, 2009. 

Federal Deposit Insurance Corporation. 

Valerie J. Best, 

Assistant Executive Secretary. 

[FR Doc. E9–15377 Filed 6–29–09; 8:45 am] 

BILLING CODE 6714–01–P 

DEPARTMENT OF DEFENSE 

Department of the Navy 

32 CFR Part 724 

[No. USN–2008–0009] 

RIN 0703–AA86 

Naval Discharge Review Board 

AGENCY: Department of the Navy, DoD. 

ACTION: Proposed rule. 

SUMMARY: The Department of the Navy 

is amending its regulations to reflect the 

name change of the Naval Council of 

Personnel Boards to the Secretary of the 

Navy Council of Review Boards and to 

update other administrative information 

pertaining to the Naval Discharge 

Review Board. 


sroberts on PROD1PC70 with PROPOSALS