Temporary Liquidity Guarantee Program, 66160-66163 [E8-26569]
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Federal Register / Vol. 73, No. 217 / Friday, November 7, 2008 / Rules and Regulations
Secs. 300.101 through 300.104 also issued
under 5 U.S.C. 7201, 7204, 7701; E.O. 11478,
3 CFR, 1966–1970 Comp., page 803.
Sec. 300.301 also issued under 5 U.S.C.
1104 and 3341.
Secs. 300.401 through 300.408 also issued
under 5 U.S.C. 1302(c), 2301, and 2302.
Secs. 300.501 through 300.507 also issued
under 5 U.S.C. 1103(a)(5).
Subpart F—[Removed and Reserved]
2. Remove and reserve subpart F,
consisting of § 300.601 through
§ 300.606.
■
[FR Doc. E8–26559 Filed 11–6–08; 8:45 am]
BILLING CODE 6325–39–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 370
RIN 3064–AD37
Temporary Liquidity Guarantee
Program
Federal Deposit Insurance
Corporation (FDIC).
ACTION: Amendment to the Interim Rule
with request for comments.
AGENCY:
SUMMARY: The FDIC is amending its
Interim Rule with Request for Comment
(Interim Rule) relating to
implementation of its Temporary
Liquidity Guarantee Program (TLG
Program) by extending the opt out date
for eligible entities until December 5,
2008; extending the deadline for
complying with certain disclosure
requirements related to the TLG
Program until December 19, 2008; and
establishing assessment procedures to
accommodate the extended opt out
period.
The Amended Interim Rule
becomes effective on November 4, 2008.
The effective date of § 370.5 paragraphs
(h)(2) and (h)(3), added at 73 FR 64186,
October 29, 2008, is delayed from
December 1, 2008 until December 19,
2008. The FDIC seeks general and
specific comments relating to questions
raised in both the Amended Interim
Rule and the Interim Rule. Comments
regarding both the Amended Interim
Rule and the Interim Rule must be
received by November 13, 2008.
ADDRESSES: You may submit comments
on the Amended Interim Rule by any of
the following methods:
• Agency Web Site: https://
www.FDIC.gov/regulations/laws/
federal/notices.html. Follow
instructions for submitting comments
on the Agency Web Site.
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DATES:
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• 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 https://www.fdic.gov/regulations/laws/
federal/propose.html, including any
personal information provided.
FOR FURTHER INFORMATION CONTACT:
William V. Farrell, Manager,
Assessment Operations Section,
Division of Finance, (703) 562–6168 or
wfarrell@fdic.gov; Donna Saulnier,
Manager, Assessment Policy Section,
Division of Finance, (703) 562–6167 or
dsaulnier@fdic.gov; Richard Bogue,
Counsel, Legal Division, (202) 898–3726
or rbogue@fdic.gov; Robert Fick,
Counsel, Legal Division, (202) 898–8962
or rfick@fdic.gov; A. Ann Johnson,
Counsel, Legal Division, (202) 898–3573
or aajohnson@fdic.gov; Gail Patelunas,
Deputy Director, Division of Resolutions
and Receiverships, (202) 898–6779 or
gpatelunas@fdic.gov; John Corston,
Associate Director (Large Bank
Supervision), Division of Supervision
and Consumer Protection, (202) 898–
6548 or jcorston@fdic.gov; Serena L.
Owens, Associate Director, Supervision
and Applications Branch, Division of
Supervision and Consumer Protection,
(202) 898–8996 or sowens@fdic.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The TLG Program was first
announced by the FDIC on October 14,
2008, as an initiative to counter the
current system-wide crisis in the
nation’s financial sector. It provided two
limited guarantee programs: One, that
guaranteed newly-issued senior
unsecured debt of insured depository
institutions and most U.S. holding
companies of such insured depository
institutions (the debt guarantee
program), and another, that guaranteed
certain noninterest-bearing transaction
accounts at insured depository
institutions (the transaction account
guarantee program).
The FDIC’s action in establishing the
TLG Program was preceded by a
determination of systemic risk by the
Secretary of the Treasury (after
consultation with the President),
following receipt of the written
recommendation of the Board on
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October 13, 2008, along with a similar
written recommendation of the Board of
Governors of the Federal Reserve
System.
The recommendations and eventual
determination of systemic risk were
made in accordance with section
13(c)(4)(G) to the Federal Deposit
Insurance Act (FDI Act), 12 U.S.C.
1823(c)(4)(G). The determination of
systemic risk allowed the FDIC to take
certain actions to avoid or mitigate
serious adverse effects on economic
conditions and financial stability. The
FDIC believes that the TLG Program
promotes financial stability by
preserving confidence in the banking
system and encouraging liquidity in
order to ease lending to creditworthy
businesses and consumers. As a result,
on October 23, 2008, the FDIC’s Board
of Directors authorized publication in
the Federal Register and requested
comment regarding an Interim Rule
designed to implement the TLG
Program. The Interim Rule was
published on October 29, 2008.1 It
became effective on October 23, 2008,
with the exception of certain disclosure
requirements for which a delayed
effective date of December 1, 2008 was
established.2 The FDIC requested
comments regarding the Interim Rule by
November 13, 2008.
II. Opt Out Deadline in the Interim Rule
The Interim Rule provides that no
later than 11:59 p.m. Eastern Standard
Time (EST), on November 12, 2008,
each eligible entity 3 must inform the
FDIC if it desires to opt out of the debt
guarantee component or the transaction
account guarantee component (or both
components) of the TLG Program.4 If an
eligible entity opts out of the TLG
Program, coverage under the program
ends on the earlier of the date of the opt
out or on November 12, 2008.5
According to the Interim Rule, failure to
opt out by November 12, 2008
constitutes a decision on behalf of an
eligible entity to remain in the
1 73
FR 64179 (Oct. 29, 2008).
CFR 370.5(h)(2) and (h)(3).
3 12 CFR 370.2(a) defines ‘‘eligible entity’’ as any
of the following: (1) An insured depository
institution; (2) a U.S. bank holding company,
provided that it has at least one chartered and
operating insured depository institution within its
holding company structure; (3) a U.S. savings and
loan holding company, provided that it has at least
one chartered and operating insured depository
institution within its holding company structure; or
(4) other affiliates of insured depository institutions
that the FDIC after consultation with the
appropriate Federal banking agency, designate as
eligible entities which affiliates, by seeking and
obtaining such designation, will have opted in to
the debt guarantee program.
4 12 CFR 370.5(c).
5 12 CFR 370.5(a).
2 12
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program.6 Prior to November 12, 2008,
an eligible entity may also notify the
FDIC that it will not opt out of (that is,
that it will opt in to) either or both
programs.7 The choice to opt out or in,
once made, is irrevocable.8
The opt out deadline of November 12,
2008 is referenced in several sections of
the Interim Rule in describing the scope
of the guarantees provided by the TLG
Program. For example, the Interim Rule
provides that funds held in noninterestbearing transaction accounts at eligible
entities will be guaranteed from October
14, 2008, through November 12, 2008,9
and that eligible entities that do not opt
out on or before November 12, 2008 will
not be able to select which newly issued
senior unsecured debt 10 is guaranteed
debt under the Debt Guarantee
Program.11
Significantly, in the Interim Rule
calculations involving assessments
charged to an eligible entity for its
participation in the TLG Program are
related to the November 12, 2008 opt
out date. For example, the Interim Rule
permits eligible entities to participate in
both components of the TLG Program
from October 14, 2008, through
November 12, 2008, at no cost to the
entities.12
With respect to the Debt Guarantee
Program, the Interim Rule requires an
eligible entity that does not opt out of
the program by the opt out date of
November 12, 2008, and that issues
guaranteed debt during the period from
October 14, 2008, through November 12,
2008 that was still outstanding on
November 12, 2008, to notify the FDIC
and certify that the issuances that it
made did not exceed the guaranteed
limit.13 (An eligible entity that has not
opted out of the Debt Guarantee
Program and that issues debt after
November 12, 2008, is subject to similar
notification and certification
requirements.) Beginning on November
13, 2008, if an eligible entity has not
opted out, the Interim Rule provides for
eligible entities to be charged
6 12
CFR 370.5(c).
7 Id.
8 12
CFR 370.5(d).
CFR 370.5(j)(2).
10 12 CFR 370.2(f) defines ‘‘newly issued senior
unsecured debt’’ as senior unsecured debt issued by
a participating entity on or after October 14, 2008,
and on or before: (1) The earlier of November 12,
2008 or the date an eligible entity opts out, for an
eligible entity that opts out of the debt guarantee
program; or (2) June 30, 2009, for an eligible entity
that does not opt out of the debt guarantee program.
11 12 CFR 370.5(f). The limitations of this
provision are subject to 12 CFR 370.3(f), describing
the long term non-guaranteed debt option.
12 12 CFR 370.6(a) and 370.7(a).
13 12 CFR 370.6(b)(1) and (2).
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assessments for their participation in
the Debt Guarantee Program.14
With respect to the Transaction
Account Guarantee Program, the Interim
Rule provides that, beginning on
November 13, 2008 and continuing
through December 31, 2009, any eligible
entity that has not opted out of this
component of the TLG Program will be
subject to an assessment for its
participation in the Transaction
Account Guarantee Program.
III. Opt Out and Disclosure Deadlines
Extended in the Amended Interim Rule
The comment period for the Interim
Rule will expire on November 13, 2008.
Thus, the FDIC will not issue a final
rule concerning its TLG Program before
eligible entities are required to opt out
on November 12, 2008, as prescribed in
the Interim Rule. The FDIC anticipates
issuing a final rule after the expiration
of the comment period and after its
consideration of comments related to
the Interim Rule. In order to provide
eligible entities an opportunity to
review the final rule before they are
required to decide whether or not to opt
out, this Amended Interim Rule extends
the opt out deadline for the TLG
Program until December 5, 2008. For
similar reasons, this Amended Interim
Rule extends the deadline for
compliance with certain disclosure
requirements described in section
370.5(h) until December 19, 2008.
By establishing December 5, 2008 as
the new opt out deadline, conforming
modifications are required to provisions
of part 370 that refer to or are based
upon the previous opt out deadline of
November 12, 2008. The changes that
result from the extended opt out period
are technical in nature, and are not
discussed in further detail. Those
changes that relate to assessments under
the Debt Guarantee Program and the
Transaction Guarantee Program are
described further below.
Assessments under the Debt
Guarantee Program are discussed in
section 370.6. Under section 370.6(a),
eligible entities are not required to pay
any assessment associated with the Debt
Guarantee Program for the period from
October 14, 2008, through November 12,
2008. The amendments made to the
Interim Rule retain this provision. In
addition, section 370.6(a) of the
Amended Interim Rule includes a
provision to the effect that an eligible
entity that opts out of the Debt
Guarantee Program by the extended
deadline of December 5, 2008 will not
pay any assessment under the program.
14 12
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CFR 370.6(c).
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Sections 370.6(b)(1) and (2) contain
notice and certification requirements for
eligible entities that issue guaranteed
debt under the Debt Guarantee Program
for the period from October 14, 2008
through November 12, 2008 and for the
period after November 12, 2008,
respectively. Although the notification
and certification requirements have not
changed, the references in those
sections to the former opt out deadline
of November 12, 2008, have been
changed to reflect the new opt out
deadline of December 5, 2008.
Section 370.6(c) governs the initiation
of assessments for the Debt Guarantee
Program. It originally provided that
beginning on November 13, 2008, any
eligible entity that has chosen not to opt
out of this aspect of the TLG Program
would be charged assessments as
provided elsewhere in part 370. The
section did not distinguish between
overnight debt instruments and other
types of newly issued senior secured
debt. Although the manner of
calculating assessments has not
changed, the revisions to section
370.6(c) reflect two changes. The first
change reflects the newly extended opt
out deadline, and the second change
differentiates between overnight debt
instruments and other newly issued
senior unsecured debt and explains how
assessments are initiated for overnight
debt instruments as compared with
other newly issued senior unsecured
debt.
Section 370.6(c), as amended,
provides that assessments will accrue,
with respect to each eligible entity that
does not opt out of the debt guarantee
program on or before December 5, 2008
(1) beginning on November 13, 2008, on
all senior unsecured debt, other than
overnight debt instruments, issued by it
on or after October 14, 2008 that is still
outstanding on November 13, 2008; (2)
beginning on November 13, 2008, on all
senior unsecured debt, other than
overnight debt instruments, issued by it
on or after November 13, 2008 and
before December 6, 2008; and (3)
beginning on December 6, 2008, on all
senior unsecured debt issued by it on or
after December 6, 2008. Calculations
related to both overnight debt
instruments and other newly issued
unsecured debt will continue to be
made in accordance with section
370.6(d). Section 370.6(d) remains
unchanged.
Assessments under the Transaction
Account Guarantee Program are
discussed in section 370.7. Under
section 370.7(a), eligible entities are not
required to pay an assessment
associated with the Transaction
Account Guarantee Program from the
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period October 14, 2008, through
November 12, 2008. The Amended
Interim Rule adds a new provision to
section 370.7(a) to the effect that an
eligible entity that opts out of the
Transaction Account Guarantee Program
by the extended opt out deadline of
December 5, 2008 will not pay any
assessment under the program.
Section 370.7(b) governs the initiation
of assessments for the Transaction
Account Guarantee Program. It
originally provided that for the period
beginning on November 13, 2008, and
continuing through December 31, 2009,
any eligible entity that failed to notify
the FDIC that it had opted out of the
Transaction Account Guarantee Program
would be charged an assessment for its
participation in the Transaction
Account Guarantee Program. Section
370.7(b) of the Amended Interim Rule
contains references to the newly
extended opt out date. The amended
section now provides that beginning on
November 13, 2008, an eligible entity
that does not opt out of the Transaction
Account Guarantee Program on or
before December 5, 2008 will be
required to pay the FDIC assessments on
all deposit amounts in noninterestbearing transaction accounts.
Calculations related to the amount of
assessments for the Transaction
Account Guarantee Program will
continue to be made in accordance with
section 370.7(c). Section 370.7(c)
remains unchanged.
IV. Request for Comments
The FDIC requests comments on all
aspects of the Amended Interim Rule.
The FDIC specifically requests
comments on the following questions:
1. Should the FDIC charge different
premium rates for Fed Funds and/or
other short-term borrowings versus
longer term borrowings? If so, why,
what should be the criteria for
determining which borrowings qualify
for which rates, and what should be the
rate differential?
2. Should banks be allowed to issue
guaranteed debt in an amount equal to
the bank’s cap plus its holding
company’s(ies’) cap, so long as the total
guaranteed debt issued by the bank and
its holding company(ies) does not
exceed their combined cap? If so, why,
and how could this process be managed
to assure, among other things, that the
entities together do not exceed their
combined cap?
3. Section 370.3(b) of the Interim Rule
states, ‘‘If a participating entity had no
senior unsecured debt on September 30,
2008, the entity may seek to have some
amount of debt covered by the debt
guarantee program. The FDIC, after
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consultation with the appropriate
Federal banking agency, will decide
whether, and to what extent, such
requests will be granted on a case-bycase basis.’’ Should the FDIC establish
an alternative guarantee cap, e.g., a
percentage of total liabilities, or an
average of outstanding senior unsecured
debt over some period of time, for those
eligible entities that had no or de
minimis amounts of senior unsecured
debt outstanding on September 30,
2008? If so, what should that alternative
be, and why?
V. Regulatory Analysis and Procedure
A. Administrative Procedure Act
Pursuant to section 553(b)(B) of the
Administrative Procedure Act (APA),
notice and comment are not required
prior to the issuance of a final rule if an
agency for good cause finds that notice
and public procedure thereon are
impracticable, unnecessary, or contrary
to the public interest. In addition,
section 553(d)(3) of the APA provides
that an agency, for good cause found
and published with the rule, does not
have to comply with the requirements
that a final rule be published not less
than 30 days before its effective date.
The FDIC invoked these good cause
exceptions to make the Interim Rule
effective on October 23, 2008, due to the
severe financial conditions that threaten
the stability of the nation’s economy
generally and the banking system in
particular, the serious adverse effects on
economic conditions and financial
stability that would result from any
delay of the effective date of the Interim
Rule, and the fact that the Temporary
Liquidity Guarantee Program became
effective on October 14, 2008.
For the same reasons, and because
comments regarding the Interim Rule
may be submitted through November
13, 2008, and because the delay that
would result from complying with
notice and public procedure in
connection with the Amended Interim
Rule would frustrate the FDIC’s
objective of quickly restoring liquidity
to the financial markets, the FDIC finds
good cause to adopt the Amended
Interim Rule without prior notice and
comment and without the 30-day
delayed effective date.
B. Community Development and
Regulatory Improvement Act
The Riegle Community Development
and Regulatory Improvement Act
(RCDRIA) requires that any new rule
prescribed by a Federal banking agency
that imposes additional reporting,
disclosures, or other new requirements
on insured depository institutions take
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effect on the first day of a calendar
quarter unless the agency determines,
for good cause published with the rule,
that the rule should become effective
before such time.15 The FDIC invoked
the RCDRIA’s good cause exception to
make the Interim Rule effective on
October 23, 2008 due to the severe
financial conditions that threaten the
stability of the nation’s economy
generally and the banking system in
particular, the serious adverse effects on
economic conditions and financial
stability that would result from any
delay of the effective date of the Interim
Rule, and the fact that the Temporary
Liquidity Guarantee Program has been
in effect since October 14, 2008.
For the same reasons, the FDIC finds
good cause to make the Amended
Interim Rule effective immediately. In
addition, the Amended Interim Rule
does not impose any additional
reporting, disclosures, or other new
requirements on insured depository
institutions that were not already
imposed by the Interim Rule.
C. Small Business Regulatory
Enforcement Fairness Act
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 General Accounting Office so
that the Interim Rule and the Amended
Interim Rule may be reviewed.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA)
requires an agency that is issuing a
proposed rule to prepare and make
available for public comment an initial
regulatory flexibility analysis that
describes the impact of a proposed rule
on small entities. Like the Interim Rule,
this Amended Interim Rule does not
involve the issuance of a notice of
proposed rulemaking. As a result, the
requirements of the RFA do not apply.
E. Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995, the information
collections contained in the Interim
Rule issued by the Board on October 23,
2008, were submitted to and approved
by the Office of Management and
Budget (OMB) under emergency
clearance procedures and assigned OMB
Control No. 3064–0166 (expiring on
April 30, 2009). The Amended Interim
15 12
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Rules does not affect the collections of
information outlined in the Interim Rule
nor does it affect the estimated burden
set forth in the Interim Rule.
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 above, The
Board of Directors of the Federal
Deposit Insurance Corporation amends
12 CFR part 370 as follows:
PART 370—TEMPORARY LIQUIDITY
GUARANTEE PROGRAM
1. The authority citation for part 370
continues to read as follows:
■
Authority: 12 U.S.C. 1813(l), 1813(m),
1817(i), 1818, 1819(a) (Tenth); 1820(f),
1821(a); 1821(c); 1821(d); 1823(c)(4).
§ 370.2
[Amended]
2. Amend § 370.2 as follows:
A. In paragraph (f), remove
‘‘November 12’’ and replace it with
‘‘December 5’’.
■ B. In paragraph (g), remove
‘‘November 12’’ and replace it with
‘‘December 5’’ and remove ‘‘November
13’’ wherever it appears and replace it
with ‘‘December 6’’.
■
■
§ 370.3
[Amended]
3. Amend § 370.3 as follows:
In paragraphs (b) and (f), remove
‘‘November 12’’ wherever it appears and
replace it with ‘‘December 5’’.
■
■
§ 370.5
[Amended]
4. Amend § 370.5 as follows:
A. In paragraphs (a), (c), (f), and (j),
remove ‘‘November 12’’ wherever it
appears and replace it with ‘‘December
5’’.
■ B. In paragraph (h), remove
‘‘December 1’’ and replace it with
‘‘December 19’’.
■ 5. Amend § 370.6 by revising
paragraphs (a), (b)(1), (b)(2), and (c) to
read as follows:
■
■
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§ 370.6 Assessments under the Debt
Guarantee Program.
(a) Waiver of assessment for certain
initial periods. No eligible entity shall
pay any assessment associated with the
debt guarantee program for the period
from October 14, 2008 through
November 12, 2008. An eligible entity
that opts out of the program on or before
December 5, 2008 will not pay any
assessment under the program.
(b) * * *
(1) Any eligible entity that does not
opt out of the Debt Guarantee Program
on or before December 5, 2008, as
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provided in § 370.5, and that issues any
guaranteed debt during the period from
October 14, 2008 through December 5,
2008 which is still outstanding on
December 5, 2008, shall notify the FDIC
of that issuance via the FDIC’s ebusiness Web site FDICconnect on or
before December 19, 2008, and the
eligible entity’s Chief Financial Officer
or equivalent shall certify that the
issuances outstanding at each point of
time did not exceed the guaranteed
amount limit as set forth in § 370.3.
(2) Any eligible entity that does not
opt out of the program and that issues
guaranteed debt after December 5, 2008,
shall notify the FDIC of that issuance via
the FDIC’s e-business Web site
FDICconnect within the time period
specified by the FDIC. The eligible
entity’s Chief Financial Officer or
equivalent shall certify that the issuance
of guaranteed debt does not exceed the
guarantee limit as set forth in § 370.3.
*
*
*
*
*
(c) Initiation of assessments.
Assessments, calculated in accordance
with paragraph (d) of this section, will
accrue, with respect to each eligible
entity that does not opt out of the debt
guarantee program on or before
December 5, 2008.
(1) Beginning on November 13, 2008,
on all senior unsecured debt, other than
overnight debt instruments, issued by it
on or after October 14, 2008 that is still
outstanding on November 13, 2008;
(2) Beginning on November 13, 2008,
on all senior unsecured debt, other than
overnight debt instruments, issued by it
on or after November 13, 2008 and
before December 6, 2008; and
(3) Beginning on December 6, 2008,
on all senior unsecured debt issued by
it on or after December 6, 2008.
■ 6. Amend § 370.7 by revising
paragraphs (a) and (b) to read as follows:
§ 370.7 Assessments under the
Transaction Account Guarantee Program.
(a) Waiver of assessment for certain
initial periods. No eligible entity shall
pay any assessment associated with the
transaction account guarantee program
for the period from October 14, 2008,
through November 12, 2008. An eligible
entity that opts out of the program on
or before December 5, 2008 will not pay
any assessment under the program
(b) Initiation of assessments.
Beginning on November 13, 2008 each
eligible entity that does not opt out of
the transaction account guarantee
program on or before December 5, 2008
will be required to pay the FDIC
assessments on all deposit amounts in
noninterest-bearing transaction accounts
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66163
calculated in accordance with paragraph
(c) of this section.
*
*
*
*
*
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. E8–26569 Filed 11–4–08; 4:15 pm]
BILLING CODE 6714–01–P
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 23
[Docket No. CE285, Special Conditions No.
23–225A–SC]
Final Special Conditions: AmSafe
Aviation; Inflatable Restraints
Installation; Approved Model List of
Normal and Utility Category Airplanes,
and Agricultural Airplanes Certificated
in the Normal/Utility/Restricted
Category
Federal Aviation
Administration (FAA), DOT.
ACTION: Final special conditions; request
for comments.
AGENCY:
SUMMARY: These special conditions are
issued for AmSafe Aviation to amend
the list of approved models. These
airplanes, as modified by AmSafe
Aviation, will have novel and unusual
design features associated with the lap
belt or shoulder harness portion of the
safety belt, which contains an integrated
airbag device. The applicable
airworthiness regulations do not contain
adequate and appropriate safety
standards for this design feature. These
special conditions contain the
additional safety standards that the
Administrator considers necessary to
establish a level of safety equivalent to
that established by the airworthiness
standards.
The effective date of these
amended special conditions is October
31, 2008. Comments must be received
on or before December 8, 2008.
ADDRESSES: Mail two copies of your
comments on these amended special
conditions to: Federal Aviation
Administration (FAA), Regional
Counsel, ACE–7, Attention: Rules
Docket, Docket No. CE285, 901 Locust,
Room 506, Kansas City, Missouri 64106,
or you may deliver two copies to the
Regional Counsel at the above address.
Mark your comments: Docket No.
CE285. You may inspect comments in
the Rules Docket weekdays, except
Federal holidays, between 7:30 a.m. and
4 p.m.
DATES:
E:\FR\FM\07NOR1.SGM
07NOR1
Agencies
[Federal Register Volume 73, Number 217 (Friday, November 7, 2008)]
[Rules and Regulations]
[Pages 66160-66163]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26569]
=======================================================================
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 370
RIN 3064-AD37
Temporary Liquidity Guarantee Program
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Amendment to the Interim Rule with request for comments.
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SUMMARY: The FDIC is amending its Interim Rule with Request for Comment
(Interim Rule) relating to implementation of its Temporary Liquidity
Guarantee Program (TLG Program) by extending the opt out date for
eligible entities until December 5, 2008; extending the deadline for
complying with certain disclosure requirements related to the TLG
Program until December 19, 2008; and establishing assessment procedures
to accommodate the extended opt out period.
DATES: The Amended Interim Rule becomes effective on November 4, 2008.
The effective date of Sec. 370.5 paragraphs (h)(2) and (h)(3), added
at 73 FR 64186, October 29, 2008, is delayed from December 1, 2008
until December 19, 2008. The FDIC seeks general and specific comments
relating to questions raised in both the Amended Interim Rule and the
Interim Rule. Comments regarding both the Amended Interim Rule and the
Interim Rule must be received by November 13, 2008.
ADDRESSES: You may submit comments on the Amended Interim Rule by any
of the following methods:
Agency Web Site: https://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 https://www.fdic.gov/regulations/laws/federal/
propose.html, including any personal information provided.
FOR FURTHER INFORMATION CONTACT: William V. Farrell, Manager,
Assessment Operations Section, Division of Finance, (703) 562-6168 or
wfarrell@fdic.gov; Donna Saulnier, Manager, Assessment Policy Section,
Division of Finance, (703) 562-6167 or dsaulnier@fdic.gov; Richard
Bogue, Counsel, Legal Division, (202) 898-3726 or rbogue@fdic.gov;
Robert Fick, Counsel, Legal Division, (202) 898-8962 or rfick@fdic.gov;
A. Ann Johnson, Counsel, Legal Division, (202) 898-3573 or
aajohnson@fdic.gov; Gail Patelunas, Deputy Director, Division of
Resolutions and Receiverships, (202) 898-6779 or gpatelunas@fdic.gov;
John Corston, Associate Director (Large Bank Supervision), Division of
Supervision and Consumer Protection, (202) 898-6548 or
jcorston@fdic.gov; Serena L. Owens, Associate Director, Supervision and
Applications Branch, Division of Supervision and Consumer Protection,
(202) 898-8996 or sowens@fdic.gov.
SUPPLEMENTARY INFORMATION:
I. Background
The TLG Program was first announced by the FDIC on October 14,
2008, as an initiative to counter the current system-wide crisis in the
nation's financial sector. It provided two limited guarantee programs:
One, that guaranteed newly-issued senior unsecured debt of insured
depository institutions and most U.S. holding companies of such insured
depository institutions (the debt guarantee program), and another, that
guaranteed certain noninterest-bearing transaction accounts at insured
depository institutions (the transaction account guarantee program).
The FDIC's action in establishing the TLG Program was preceded by a
determination of systemic risk by the Secretary of the Treasury (after
consultation with the President), following receipt of the written
recommendation of the Board on October 13, 2008, along with a similar
written recommendation of the Board of Governors of the Federal Reserve
System.
The recommendations and eventual determination of systemic risk
were made in accordance with section 13(c)(4)(G) to the Federal Deposit
Insurance Act (FDI Act), 12 U.S.C. 1823(c)(4)(G). The determination of
systemic risk allowed the FDIC to take certain actions to avoid or
mitigate serious adverse effects on economic conditions and financial
stability. The FDIC believes that the TLG Program promotes financial
stability by preserving confidence in the banking system and
encouraging liquidity in order to ease lending to creditworthy
businesses and consumers. As a result, on October 23, 2008, the FDIC's
Board of Directors authorized publication in the Federal Register and
requested comment regarding an Interim Rule designed to implement the
TLG Program. The Interim Rule was published on October 29, 2008.\1\ It
became effective on October 23, 2008, with the exception of certain
disclosure requirements for which a delayed effective date of December
1, 2008 was established.\2\ The FDIC requested comments regarding the
Interim Rule by November 13, 2008.
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\1\ 73 FR 64179 (Oct. 29, 2008).
\2\ 12 CFR 370.5(h)(2) and (h)(3).
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II. Opt Out Deadline in the Interim Rule
The Interim Rule provides that no later than 11:59 p.m. Eastern
Standard Time (EST), on November 12, 2008, each eligible entity \3\
must inform the FDIC if it desires to opt out of the debt guarantee
component or the transaction account guarantee component (or both
components) of the TLG Program.\4\ If an eligible entity opts out of
the TLG Program, coverage under the program ends on the earlier of the
date of the opt out or on November 12, 2008.\5\ According to the
Interim Rule, failure to opt out by November 12, 2008 constitutes a
decision on behalf of an eligible entity to remain in the
[[Page 66161]]
program.\6\ Prior to November 12, 2008, an eligible entity may also
notify the FDIC that it will not opt out of (that is, that it will opt
in to) either or both programs.\7\ The choice to opt out or in, once
made, is irrevocable.\8\
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\3\ 12 CFR 370.2(a) defines ``eligible entity'' as any of the
following: (1) An insured depository institution; (2) a U.S. bank
holding company, provided that it has at least one chartered and
operating insured depository institution within its holding company
structure; (3) a U.S. savings and loan holding company, provided
that it has at least one chartered and operating insured depository
institution within its holding company structure; or (4) other
affiliates of insured depository institutions that the FDIC after
consultation with the appropriate Federal banking agency, designate
as eligible entities which affiliates, by seeking and obtaining such
designation, will have opted in to the debt guarantee program.
\4\ 12 CFR 370.5(c).
\5\ 12 CFR 370.5(a).
\6\ 12 CFR 370.5(c).
\7\ Id.
\8\ 12 CFR 370.5(d).
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The opt out deadline of November 12, 2008 is referenced in several
sections of the Interim Rule in describing the scope of the guarantees
provided by the TLG Program. For example, the Interim Rule provides
that funds held in noninterest-bearing transaction accounts at eligible
entities will be guaranteed from October 14, 2008, through November 12,
2008,\9\ and that eligible entities that do not opt out on or before
November 12, 2008 will not be able to select which newly issued senior
unsecured debt \10\ is guaranteed debt under the Debt Guarantee
Program.\11\
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\9\ 12 CFR 370.5(j)(2).
\10\ 12 CFR 370.2(f) defines ``newly issued senior unsecured
debt'' as senior unsecured debt issued by a participating entity on
or after October 14, 2008, and on or before: (1) The earlier of
November 12, 2008 or the date an eligible entity opts out, for an
eligible entity that opts out of the debt guarantee program; or (2)
June 30, 2009, for an eligible entity that does not opt out of the
debt guarantee program.
\11\ 12 CFR 370.5(f). The limitations of this provision are
subject to 12 CFR 370.3(f), describing the long term non-guaranteed
debt option.
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Significantly, in the Interim Rule calculations involving
assessments charged to an eligible entity for its participation in the
TLG Program are related to the November 12, 2008 opt out date. For
example, the Interim Rule permits eligible entities to participate in
both components of the TLG Program from October 14, 2008, through
November 12, 2008, at no cost to the entities.\12\
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\12\ 12 CFR 370.6(a) and 370.7(a).
---------------------------------------------------------------------------
With respect to the Debt Guarantee Program, the Interim Rule
requires an eligible entity that does not opt out of the program by the
opt out date of November 12, 2008, and that issues guaranteed debt
during the period from October 14, 2008, through November 12, 2008 that
was still outstanding on November 12, 2008, to notify the FDIC and
certify that the issuances that it made did not exceed the guaranteed
limit.\13\ (An eligible entity that has not opted out of the Debt
Guarantee Program and that issues debt after November 12, 2008, is
subject to similar notification and certification requirements.)
Beginning on November 13, 2008, if an eligible entity has not opted
out, the Interim Rule provides for eligible entities to be charged
assessments for their participation in the Debt Guarantee Program.\14\
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\13\ 12 CFR 370.6(b)(1) and (2).
\14\ 12 CFR 370.6(c).
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With respect to the Transaction Account Guarantee Program, the
Interim Rule provides that, beginning on November 13, 2008 and
continuing through December 31, 2009, any eligible entity that has not
opted out of this component of the TLG Program will be subject to an
assessment for its participation in the Transaction Account Guarantee
Program.
III. Opt Out and Disclosure Deadlines Extended in the Amended Interim
Rule
The comment period for the Interim Rule will expire on November 13,
2008. Thus, the FDIC will not issue a final rule concerning its TLG
Program before eligible entities are required to opt out on November
12, 2008, as prescribed in the Interim Rule. The FDIC anticipates
issuing a final rule after the expiration of the comment period and
after its consideration of comments related to the Interim Rule. In
order to provide eligible entities an opportunity to review the final
rule before they are required to decide whether or not to opt out, this
Amended Interim Rule extends the opt out deadline for the TLG Program
until December 5, 2008. For similar reasons, this Amended Interim Rule
extends the deadline for compliance with certain disclosure
requirements described in section 370.5(h) until December 19, 2008.
By establishing December 5, 2008 as the new opt out deadline,
conforming modifications are required to provisions of part 370 that
refer to or are based upon the previous opt out deadline of November
12, 2008. The changes that result from the extended opt out period are
technical in nature, and are not discussed in further detail. Those
changes that relate to assessments under the Debt Guarantee Program and
the Transaction Guarantee Program are described further below.
Assessments under the Debt Guarantee Program are discussed in
section 370.6. Under section 370.6(a), eligible entities are not
required to pay any assessment associated with the Debt Guarantee
Program for the period from October 14, 2008, through November 12,
2008. The amendments made to the Interim Rule retain this provision. In
addition, section 370.6(a) of the Amended Interim Rule includes a
provision to the effect that an eligible entity that opts out of the
Debt Guarantee Program by the extended deadline of December 5, 2008
will not pay any assessment under the program.
Sections 370.6(b)(1) and (2) contain notice and certification
requirements for eligible entities that issue guaranteed debt under the
Debt Guarantee Program for the period from October 14, 2008 through
November 12, 2008 and for the period after November 12, 2008,
respectively. Although the notification and certification requirements
have not changed, the references in those sections to the former opt
out deadline of November 12, 2008, have been changed to reflect the new
opt out deadline of December 5, 2008.
Section 370.6(c) governs the initiation of assessments for the Debt
Guarantee Program. It originally provided that beginning on November
13, 2008, any eligible entity that has chosen not to opt out of this
aspect of the TLG Program would be charged assessments as provided
elsewhere in part 370. The section did not distinguish between
overnight debt instruments and other types of newly issued senior
secured debt. Although the manner of calculating assessments has not
changed, the revisions to section 370.6(c) reflect two changes. The
first change reflects the newly extended opt out deadline, and the
second change differentiates between overnight debt instruments and
other newly issued senior unsecured debt and explains how assessments
are initiated for overnight debt instruments as compared with other
newly issued senior unsecured debt.
Section 370.6(c), as amended, provides that assessments will
accrue, with respect to each eligible entity that does not opt out of
the debt guarantee program on or before December 5, 2008 (1) beginning
on November 13, 2008, on all senior unsecured debt, other than
overnight debt instruments, issued by it on or after October 14, 2008
that is still outstanding on November 13, 2008; (2) beginning on
November 13, 2008, on all senior unsecured debt, other than overnight
debt instruments, issued by it on or after November 13, 2008 and before
December 6, 2008; and (3) beginning on December 6, 2008, on all senior
unsecured debt issued by it on or after December 6, 2008. Calculations
related to both overnight debt instruments and other newly issued
unsecured debt will continue to be made in accordance with section
370.6(d). Section 370.6(d) remains unchanged.
Assessments under the Transaction Account Guarantee Program are
discussed in section 370.7. Under section 370.7(a), eligible entities
are not required to pay an assessment associated with the Transaction
Account Guarantee Program from the
[[Page 66162]]
period October 14, 2008, through November 12, 2008. The Amended Interim
Rule adds a new provision to section 370.7(a) to the effect that an
eligible entity that opts out of the Transaction Account Guarantee
Program by the extended opt out deadline of December 5, 2008 will not
pay any assessment under the program.
Section 370.7(b) governs the initiation of assessments for the
Transaction Account Guarantee Program. It originally provided that for
the period beginning on November 13, 2008, and continuing through
December 31, 2009, any eligible entity that failed to notify the FDIC
that it had opted out of the Transaction Account Guarantee Program
would be charged an assessment for its participation in the Transaction
Account Guarantee Program. Section 370.7(b) of the Amended Interim Rule
contains references to the newly extended opt out date. The amended
section now provides that beginning on November 13, 2008, an eligible
entity that does not opt out of the Transaction Account Guarantee
Program on or before December 5, 2008 will be required to pay the FDIC
assessments on all deposit amounts in noninterest-bearing transaction
accounts. Calculations related to the amount of assessments for the
Transaction Account Guarantee Program will continue to be made in
accordance with section 370.7(c). Section 370.7(c) remains unchanged.
IV. Request for Comments
The FDIC requests comments on all aspects of the Amended Interim
Rule. The FDIC specifically requests comments on the following
questions:
1. Should the FDIC charge different premium rates for Fed Funds
and/or other short-term borrowings versus longer term borrowings? If
so, why, what should be the criteria for determining which borrowings
qualify for which rates, and what should be the rate differential?
2. Should banks be allowed to issue guaranteed debt in an amount
equal to the bank's cap plus its holding company's(ies') cap, so long
as the total guaranteed debt issued by the bank and its holding
company(ies) does not exceed their combined cap? If so, why, and how
could this process be managed to assure, among other things, that the
entities together do not exceed their combined cap?
3. Section 370.3(b) of the Interim Rule states, ``If a
participating entity had no senior unsecured debt on September 30,
2008, the entity may seek to have some amount of debt covered by the
debt guarantee program. The FDIC, after consultation with the
appropriate Federal banking agency, will decide whether, and to what
extent, such requests will be granted on a case-by-case basis.'' Should
the FDIC establish an alternative guarantee cap, e.g., a percentage of
total liabilities, or an average of outstanding senior unsecured debt
over some period of time, for those eligible entities that had no or de
minimis amounts of senior unsecured debt outstanding on September 30,
2008? If so, what should that alternative be, and why?
V. Regulatory Analysis and Procedure
A. Administrative Procedure Act
Pursuant to section 553(b)(B) of the Administrative Procedure Act
(APA), notice and comment are not required prior to the issuance of a
final rule if an agency for good cause finds that notice and public
procedure thereon are impracticable, unnecessary, or contrary to the
public interest. In addition, section 553(d)(3) of the APA provides
that an agency, for good cause found and published with the rule, does
not have to comply with the requirements that a final rule be published
not less than 30 days before its effective date. The FDIC invoked these
good cause exceptions to make the Interim Rule effective on October 23,
2008, due to the severe financial conditions that threaten the
stability of the nation's economy generally and the banking system in
particular, the serious adverse effects on economic conditions and
financial stability that would result from any delay of the effective
date of the Interim Rule, and the fact that the Temporary Liquidity
Guarantee Program became effective on October 14, 2008.
For the same reasons, and because comments regarding the Interim
Rule may be submitted through November 13, 2008, and because the delay
that would result from complying with notice and public procedure in
connection with the Amended Interim Rule would frustrate the FDIC's
objective of quickly restoring liquidity to the financial markets, the
FDIC finds good cause to adopt the Amended Interim Rule without prior
notice and comment and without the 30-day delayed effective date.
B. Community Development and Regulatory Improvement Act
The Riegle Community Development and Regulatory Improvement Act
(RCDRIA) requires that any new rule prescribed by a Federal banking
agency that imposes additional reporting, disclosures, or other new
requirements on insured depository institutions take effect on the
first day of a calendar quarter unless the agency determines, for good
cause published with the rule, that the rule should become effective
before such time.\15\ The FDIC invoked the RCDRIA's good cause
exception to make the Interim Rule effective on October 23, 2008 due to
the severe financial conditions that threaten the stability of the
nation's economy generally and the banking system in particular, the
serious adverse effects on economic conditions and financial stability
that would result from any delay of the effective date of the Interim
Rule, and the fact that the Temporary Liquidity Guarantee Program has
been in effect since October 14, 2008.
---------------------------------------------------------------------------
\15\ 12 U.S.C. 4802.
---------------------------------------------------------------------------
For the same reasons, the FDIC finds good cause to make the Amended
Interim Rule effective immediately. In addition, the Amended Interim
Rule does not impose any additional reporting, disclosures, or other
new requirements on insured depository institutions that were not
already imposed by the Interim Rule.
C. Small Business Regulatory Enforcement Fairness Act
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 General
Accounting Office so that the Interim Rule and the Amended Interim Rule
may be reviewed.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) requires an agency that is
issuing a proposed rule to prepare and make available for public
comment an initial regulatory flexibility analysis that describes the
impact of a proposed rule on small entities. Like the Interim Rule,
this Amended Interim Rule does not involve the issuance of a notice of
proposed rulemaking. As a result, the requirements of the RFA do not
apply.
E. Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995, the
information collections contained in the Interim Rule issued by the
Board on October 23, 2008, were submitted to and approved by the Office
of Management and Budget (OMB) under emergency clearance procedures and
assigned OMB Control No. 3064-0166 (expiring on April 30, 2009). The
Amended Interim
[[Page 66163]]
Rules does not affect the collections of information outlined in the
Interim Rule nor does it affect the estimated burden set forth in the
Interim Rule.
List of Subjects in 12 CFR Part 370
Banks, Banking, Bank deposit insurance, Holding companies, National
banks, Reporting and recordkeeping requirements, Savings associations.
0
For the reasons stated above, The Board of Directors of the Federal
Deposit Insurance Corporation amends 12 CFR part 370 as follows:
PART 370--TEMPORARY LIQUIDITY GUARANTEE PROGRAM
0
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).
Sec. 370.2 [Amended]
0
2. Amend Sec. 370.2 as follows:
0
A. In paragraph (f), remove ``November 12'' and replace it with
``December 5''.
0
B. In paragraph (g), remove ``November 12'' and replace it with
``December 5'' and remove ``November 13'' wherever it appears and
replace it with ``December 6''.
Sec. 370.3 [Amended]
0
3. Amend Sec. 370.3 as follows:
0
In paragraphs (b) and (f), remove ``November 12'' wherever it appears
and replace it with ``December 5''.
Sec. 370.5 [Amended]
0
4. Amend Sec. 370.5 as follows:
0
A. In paragraphs (a), (c), (f), and (j), remove ``November 12''
wherever it appears and replace it with ``December 5''.
0
B. In paragraph (h), remove ``December 1'' and replace it with
``December 19''.
0
5. Amend Sec. 370.6 by revising paragraphs (a), (b)(1), (b)(2), and
(c) to read as follows:
Sec. 370.6 Assessments under the Debt Guarantee Program.
(a) Waiver of assessment for certain initial periods. No eligible
entity shall pay any assessment associated with the debt guarantee
program for the period from October 14, 2008 through November 12, 2008.
An eligible entity that opts out of the program on or before December
5, 2008 will not pay any assessment under the program.
(b) * * *
(1) Any eligible entity that does not opt out of the Debt Guarantee
Program on or before December 5, 2008, as provided in Sec. 370.5, and
that issues any guaranteed debt during the period from October 14, 2008
through December 5, 2008 which is still outstanding on December 5,
2008, shall notify the FDIC of that issuance via the FDIC's e-business
Web site FDICconnect on or before December 19, 2008, and the eligible
entity's Chief Financial Officer or equivalent shall certify that the
issuances outstanding at each point of time did not exceed the
guaranteed amount limit as set forth in Sec. 370.3.
(2) Any eligible entity that does not opt out of the program and
that issues guaranteed debt after December 5, 2008, shall notify the
FDIC of that issuance via the FDIC's e-business Web site FDICconnect
within the time period specified by the FDIC. The eligible entity's
Chief Financial Officer or equivalent shall certify that the issuance
of guaranteed debt does not exceed the guarantee limit as set forth in
Sec. 370.3.
* * * * *
(c) Initiation of assessments. Assessments, calculated in
accordance with paragraph (d) of this section, will accrue, with
respect to each eligible entity that does not opt out of the debt
guarantee program on or before December 5, 2008.
(1) Beginning on November 13, 2008, on all senior unsecured debt,
other than overnight debt instruments, issued by it on or after October
14, 2008 that is still outstanding on November 13, 2008;
(2) Beginning on November 13, 2008, on all senior unsecured debt,
other than overnight debt instruments, issued by it on or after
November 13, 2008 and before December 6, 2008; and
(3) Beginning on December 6, 2008, on all senior unsecured debt
issued by it on or after December 6, 2008.
0
6. Amend Sec. 370.7 by revising paragraphs (a) and (b) to read as
follows:
Sec. 370.7 Assessments under the Transaction Account Guarantee
Program.
(a) Waiver of assessment for certain initial periods. No eligible
entity shall pay any assessment associated with the transaction account
guarantee program for the period from October 14, 2008, through
November 12, 2008. An eligible entity that opts out of the program on
or before December 5, 2008 will not pay any assessment under the
program
(b) Initiation of assessments. Beginning on November 13, 2008 each
eligible entity that does not opt out of the transaction account
guarantee program on or before December 5, 2008 will be required to pay
the FDIC assessments on all deposit amounts in noninterest-bearing
transaction accounts calculated in accordance with paragraph (c) of
this section.
* * * * *
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. E8-26569 Filed 11-4-08; 4:15 pm]
BILLING CODE 6714-01-P