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FDIC Law, Regulations, Related Acts

[Main Tabs]     [Table of Contents - 2000]     [Index]     [Previous Page]     [Next Page]     [Search] 2000 - Rules and Regulations {{12-31-08 p.3239}} PART 370—TEMPORARY LIQUIDITY GUARANTEE PROGRAM     Sec.     370.1    Scope.     370.2    Definitions.     370.3    Debt Guarantee Program.     370.4    Transaction Account Guarantee Program.     370.5    Participation.     370.6    Assessments under the Debt Guarantee Program.     370.7    Assessments for the Transaction Account Guarantee Program.     370.8    Systemic Risk Emergency Special Assessment to recover loss.     370.9    Recordkeeping requirements.     370.10    Oversight.     370.11    Enforcement mechanisms.     370.12    Payment of claims.   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).   SOURCE:  The provisions of this Part 370 appear at 73 Fed. Reg. 64186, October 29, 2008, except as otherwise noted. § 370.1 Scope. |B5  This part sets forth the eligibility, limitations, procedures, requirements, and other provisions related to participation in the FDIC's temporary liquidity guarantee program. § 370.2 Definitions.   As used in this part, the terms listed in this section are defined as indicated below. Other terms used in this part that are defined in the Federal Deposit Insurance Act (FDI Act) have the meanings given them in the FDI Act except as otherwise provided herein.   (a)  Eligible entity. The term "eligible entity" means 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, designates as eligible entities which affiliates, by seeking and obtaining such designation, will have opted in to the debt guarantee program.   (b)  Insured Depository Institution. The term "insured depository institution" means an insured depository institution as defined in section 3(c)(2) of the FDI Act, 12 U.S.C. 1813(c)(2), except that it does not include an "insured branch" of a foreign bank as defined in section 3(s)(3) of the FDI Act, 12 U.S.C. 1813(s)(3), for purposes of the debt guarantee program.   (c)  U.S. Bank Holding Company. The term "U.S. Bank Holding Company" means a "bank holding company" as defined in section 2(a) of the Bank Holding Company Act of 1956 ("BHCA"), 12 U.S.C. 1841(a), that is organized under the laws of any State or the District of Columbia.   (d)  U.S. Savings and Loan Holding Company. The term "U.S. Savings and Loan Holding Company" means a "savings and loan holding company" as defined in section 10(a)(1)(D) of the Home Owners' Loan Act of 1933 ("HOLA"), 12 U.S.C. 1467a(a)(1)(D), that is organized under the laws of any State or the District of Columbia and either:     (1)  Engages only in activities that are permissible for financial holding companies under section 4(k) of the BHCA, 12 U.S.C. 1843(k), or {{12-31-08 p.3240}}     (2)  Has at least one insured depository institution subsidiary that is the subject of an application under section 4(c)(8) of the BHCA, 12 U.S.C. 1843(c)(8), that was pending on October 13, 2008.   (e)  Senior unsecured debt. The term "senior unsecured debt" means unsecured borrowing that: Is evidenced by a written agreement; has a specified and fixed principal amount to be paid in full on demand or on a date certain; is noncontingent; and is not, by its terms, subordinated to any other liability.     (1)  Senior unsecured debt includes, for example, federal funds purchased, promissory notes, commercial paper, unsubordinated unsecured notes, certificates of deposit standing to the credit of a bank, bank deposits in an international banking facility (IBF) of an insured depository institution, and Eurodollar deposits standing to the credit of a bank. For purposes of this paragraph, the term "bank" means an insured depository institution or a depository institution regulated by a foreign bank supervisory agency.     (2)  Senior unsecured debt may be denominated in foreign currency.     (3)  Senior unsecured debt excludes, for example, obligations from guarantees or other contingent liabilities, derivatives, derivative-linked products, debt paired with any other security, convertible debt, capital notes, the unsecured portion of otherwise secured debt, negotiable certificates of deposit, and deposits in foreign currency and Eurodollar deposits that represent funds swept from individual, partnership or corporate accounts held at insured depository institutions. Also excluded are loans to affiliates, including parents and subsidiaries, and institution affiliated parties.   (f)  Newly issued senior unsecured debt. The term "newly issued senior unsecured debt" means senior unsecured debt issued by a participating entity on or after October 14, 2008, and on or before:     (1)  The earlier of December 5, 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.   (g)  Participating entity. The term "participating entity" means:     (1)  For the period from October 14, 2008, through December 5, 2008, any eligible entity that has not opted out; or     (2)  For the period from November 13, 2008 through June 30, 2012, an eligible entity that has not opted out of the debt guarantee program; or     (3)  For the period from November 13, 2008 through December 31, 2009, an eligible entity that has not opted out of the transaction account guarantee program.   (h)  Noninterest-bearing transaction account. (1) The term "noninterest-bearing account" means a transaction account as defined in 12 CFR 204.2 that is       (i)  Maintained at an insured depository institution;       (ii)  With respect to which interest is neither accrued nor paid; and       (iii)  On which the insured depository institution does not reserve the right to require advance notice of an intended withdrawal.     (2)  A noninterest-bearing transaction account does not include, for example, a negotiable order of withdrawal (NOW) account or money market deposit account (MMDA) as those accounts are defined in 12 CFR 204.2.   (i)  FDIC-Guaranteed debt. The term "FDIC-guaranteed debt" means senior unsecured debt issued by a participating entity that meets the requirements of this part for debt that is guaranteed under the debt guarantee program, and is clearly identified as "guaranteed by the FDIC."   (j)  Debt guarantee program. The term "debt guarantee program" refers to the protections afforded newly issued senior unsecured debt as described in this part.   (k)  Transaction account guarantee program. The term "transaction account guarantee program" refers to the protections afforded funds in noninterest-bearing transaction accounts as described in this part. {{12-31-08 p.3241}}   (l)  Temporary liquidity guarantee program. The term "temporary liquidity guarantee program" includes both the debt guarantee program and the transaction account guarantee program. [Codified at 12 C.F.R. § 370.2] [Section 370.2 amended at 73 Fed. Reg. 66163, November 7, 2008, effective November 4, 2008] § 370.3 Debt Guarantee Program.   (a)  Upon the failure of a participating entity that is an insured depository institution or the filing of a petition in bankruptcy with respect to any other participating entity, and subject to the other provisions of this part, the FDIC guarantees payment of the unpaid principal and contract interest accrued to the date of failure or bankruptcy, as appropriate, of all FDIC-guaranteed debt issued by the participating entity during the period from October 14, 2008, through June 30, 2009, provided that the FDIC will pay interest at the 90-day T-Bill bill rate if there is a delay in payment beyond the next business day after the failure of the institution or the date of filing of the bankruptcy petition, respectively.   (b)  Absent action by the FDIC, the maximum amount of debt to be issued under the guarantee is 125 percent of the par value of the participating entity's senior unsecured debt, excluding debt extended to affiliates or institution affiliated parties, outstanding as of September 30, 2008 that was scheduled to mature on or before June 30, 2009. Under certain circumstances and subject to certain conditions, including disclosure requirements, a participating entity may issue senior unsecured debt that is not subject to the guarantee. If the participating entity issues debt identified as "guaranteed by the FDIC" in excess of its maximum amount, it will become subject to assessment increases as provided in § 370.6(e). The FDIC may make exceptions to this guarantee limit, for example, allow a participating entity to exceed the 125 percent guarantee limit, restrict a participating entity to less than 125 percent, and/or impose other limits or requirements. 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.     (1)  Each participating entity shall calculate the amount of its senior unsecured debt outstanding as of September 30, 2008 excluding debt extended to affiliates, that was scheduled to mature on or before June 30, 2009, using the definitions described in this regulation.     (2)  Each participating entity will report the calculated amount to the FDIC, even if such amount is zero, in an approved format via FDICconnect no later than December 5, 2008.     (3)  Each subsequent report to the FDIC concerning debt issuances or balances outstanding will state whether the eligible institution has issued guaranteed debt that exceeded its limits at any time since the previous reporting period.     (4)  All reports subject to this section will contain a certification from the eligible institution's Chief Financial Officer (CFO) or equivalent certifying the accuracy of the information reported.   (c)  For FDIC-guaranteed debt issued on or before June 30, 2009, the FDIC's guarantee will terminate on the earlier of the maturity of the debt or June 30, 2012.   (d)  Debt cannot be issued and identified as guaranteed by the FDIC if:     (1)  The proceeds are used to prepay debt that is not FDIC-guaranteed;     (2)  The issuing entity has previously opted out of the debt guarantee program;     (3)  The issuing entity has had its participation in the debt guarantee program terminated by the FDIC;     (4)  The issuing entity has exceeded its authorized limit for issuing guaranteed debt as specified in paragraph (b) of this section.     (5)  The debt does not otherwise meet the requirements of this part; or     (6)  The debt is extended to an affiliate, an insider of the participating entity, or an insider of an affiliate without FDIC approval of the guarantee. {{12-31-08 p.3242}}   (e)  The FDIC's agreement to include a participating entity's senior unsecured debt in the debt guarantee program does not exempt the entity from complying with any applicable law including, without limitation, Securities and Exchange Commission registration or disclosure requirements that would be applicable if the entity or liability were not included in the program.   (f)  Long term non-guaranteed debt option. On or before 11:59 p.m. Eastern Standard Time, December 5, 2008 a participating entity may also notify the FDIC that it has elected to issue non-guaranteed debt with maturities beyond June 30, 2012, at any time, in any amount, and with out regard to the guarantee limit. By making this election the participating entity agrees to pay to the FDIC the nonrefundable fee as provided in § 370.6(f). [Codified at 12 C.F.R. § 370.3] [Section 370.3 amended at 73 Fed. Reg. 66163, November 7, 2008, effective November 4, 2008] § 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 insured in full (irrespective of the standard maximum deposit insurance amount defined in 12 CFR 330.1(n)) from October 14, 2008, through the earlier of:     (1)  The date of opt-out, if the entity opted out, or     (2)  December 31, 2009.   (b)  In determining whether funds are in a noninterest-bearing transaction account for purposes of this section, the FDIC will apply its normal rules and procedures under § 360.8 (12 CFR 360.8) for determining account balances at a failed insured depository institution. Under these procedures, funds may be swept or transferred from a noninterest-bearing transaction account to another type of deposit or nondeposit account. Unless the funds are in a noninterest-bearing transaction account after the completion of a sweep under § 360.8, the funds will not be guaranteed under the transaction account guarantee program.   (c)  Notwithstanding paragraph (b) of this section, in the case of funds swept from a noninterest-bearing transaction account to a noninterest-bearing savings deposit account, the FDIC will treat the swept funds as being in a noninterest-bearing transaction account. As a result of this treatment, the funds swept from a noninterest-bearing transaction account to a noninterest-bearing savings account will be guaranteed under the transaction account guarantee program. [Codified at 12 C.F.R. § 370.4] § 370.5 Participation.   (a)  Initial period. All eligible entities are covered under the temporary liquidity guarantee program for the period from October 14, 2008 through December 5, 2008, unless they opt out on or before December 5, 2008 in which case the coverage ends on the date of the opt-out.   (b)  The issuance of FDIC-guaranteed debt subject to the protections of the debt guarantee program is an affirmative action by a participating entity that constitutes its agreement to be:     (1)  Bound by the terms and conditions of the program, including without limitation, being subject to the assessments provided herein;     (2)  Subject to and to comply with any FDIC request to provide information relevant to participation in the debt guarantee program and to be subject to FDIC on-site reviews as needed after consultation with the appropriate Federal banking agency to determine compliance with the terms and requirements of the debt guarantee program; and     (3)  Bound by the FDIC's decisions, in consultation with the appropriate Federal banking agency, regarding the management of the temporary liquidity guarantee program.   (c)  Opt-out and Opt-In Options. From October 14, 2008 through December 5, 2008 each eligible entity is a participating entity in both the debt guarantee program and the {{12-31-08 p.3243}}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 inform the FDIC that it will not opt out of either or both programs (opt in).   (d)  An eligible entity may elect to opt out of either the guaranteed debt program or the transaction account guarantee program or both. The choice to opt out, once made, is irrevocable. Similarly, the choice to affirmatively opt in, as provided in § 370.5(c), once made, is irrevocable.   (e)  All eligible entities within a U.S. bank holding company group or U.S. savings and loan holding company group must make the same decision regarding continued participation in each guarantee program; failure to do so constitutes an opt out by all members of the group.   (f)  Eligible entities that do not opt out on or before December 5, 2008 will not be able to select which newly issued senior unsecured debt is guaranteed debt; all senior unsecured debt issued by a participating entity up to the guarantee limit will become guaranteed debt as and when issued, subject to § 370.3(f).   (g)  Procedures for Opting Out. 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 and to make any assessment payments required under the temporary liquidity guarantee program.   (h)  Disclosures regarding participation in the temporary liquidity guarantee program.     (1)  The FDIC will publish on its Web site:       (i)  A list of the eligible entities that have opted out of the debt guarantee program and       (ii)  A list of the eligible entities that have opted out of the transaction account guarantee program.     (2)  If an eligible entity does not opt out of the debt guarantee program, it must clearly identify, in writing and in a commercially reasonable manner, to any interested lender or creditor whether the newly issued debt it is offering is guaranteed or not.     (3)  Each eligible entity that is an insured depository institution must post a prominent notice in the lobby of its main office and each branch clearly indicating whether the entity is participating in the transaction account guarantee program, i.e., whether it has opted out. If the entity is participating in the transaction account guarantee program, the notice must also state that funds held in noninterest-bearing transactions accounts at the entity are insured in full by the FDIC.       (i)  These disclosures must be provided in simple, readily understandable text.       (ii)  If the institution uses sweep arrangements or takes other actions that result in funds being transferred or reclassified to an interest-bearing account or nontransaction 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.     (4)  Effective date for paragraph (2) and (3) of paragraph (h). Paragraphs (h)(2) and (h)(3) of this section are effective December 1, 2008. Prior to that date, eligible entities should provide adequate disclosures of the substance of paragraphs (h)(2) and (h)(3) in a commercially reasonable manner.   (i)  Continued Eligibility. The FDIC will determine eligibility in consultation with the eligible entity's appropriate Federal banking agency.     (1)  Participation by an entity organized after the expiration of the opt-out period will be considered by the FDIC on a case-by-case basis in consultation with the entity's appropriate Federal banking agency.     (2)  An eligible entity that is not an insured depository institution will no longer be eligible to participate in the debt guarantee program once it is no longer affiliated with a chartered and operating insured depository institution. {{12-31-08 p.3244}}   (j)  Duration--(1) Coverage for guaranteed debt. The ability of participating entities to issue guaranteed debt under the debt guarantee program expires on June 30, 2009. For guaranteed debt issued on or before June 30, 2009, coverage would only be provided until the earlier of the maturity of the liability or June 30, 2012.     (2)  Coverage for noninterest-bearing transaction accounts. Funds held in noninterest-bearing transaction accounts at eligible entities will be guaranteed from October 14, 2008 through November 12, 2008. If the eligible entity does not opt-out of the transaction account guarantee program, the coverage will exist through December 31, 2009. [Codified at 12 C.F.R. § 370.5] [Section 370.5 amended at 73 Fed. Reg. 66163, November 7, 2008, effective November 4, 2008] § 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)  Notice to the FDIC. No debt shall be considered guaranteed under the FDIC's debt guarantee program unless notice of the issuance of such debt and payment of associated assessments is provided to the FDIC as required in paragraph (d) of this section.     (1)  Any eligible entity that does not opt out of the Debt Guarantee Program on or before December 5, 2008, as 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 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 § 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.     (3)  The eligible entity shall be required to provide certification that the issuance does not exceed the guaranteed amount limit as set forth in § 370.3.     (4)  The FDIC will provide procedures governing notice to the FDIC and certification of guaranteed amount limits for purposes of this section.   (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.   (d)  Amount of assessments for debt within the guarantee limit.--(1)  Calculation of assessment. The amount of assessment will be determined by multiplying the amount of eligible guaranteed debt times the term of the debt times an annualized 75 basis points. If the debt matures after June 30, 2012, June 30, 2012 will be used as the maturity date.     (2)  Assessment invoicing. Once the participating entity provides notice as required in paragraphs (b)(1) and (b)(2) of this section, the invoice for the appropriate fee will be automatically generated and posted on FDICconnect for the account associated with the participating entity, and the time limits for providing payment in paragraph (e)(1) of this section will apply. {{12-31-08 p.3245}}     (3)  No assessment reduction for early retirement of guaranteed debt. A participating entity's assessment shall not be reduced if guaranteed debt is retired prior to its scheduled maturity date.   (e)  Increased assessments for debt exceeding the Guarantee Limit. Any participating entity that issues guaranteed debt represented as being "guaranteed by the FDIC" exceeding its guaranteed amount limit as set forth in § 370.3(b) shall have its assessment rate for all outstanding guaranteed debt increased to 150 basis points for purposes of the calculations in paragraphs (d)(1) of this section. In addition, any entity making such a misrepresentation may also be subject to enforcement action including civil money penalties under 12 U.S.C. 1818.   (f)  Long term non-guaranteed debt fee. Each participating entity that elects to issue long term non-guaranteed debt pursuant to § 370.3(f) must pay the FDIC a nonrefundable fee equal to 37.5 basis points times the amount of the entity's senior unsecured debt (other than debt owed to affiliates) with a maturity date on or before June 30, 2009, outstanding as of September 30, 2008.     (1)  The nonrefundable fee will be collected in six equal monthly installments.     (2)  An entity electing the nonrefundable fee option will also be billed as it issues guaranteed debt under the debt guarantee program, and the amounts paid as a nonrefundable fee will be applied to offset these bills until the nonrefundable fee is exhausted.     (3)  Thereafter, the institution will have to pay additional assessments on guaranteed debt as it issues the debt.   (g)  Collection of assessments--ACH Debt. Each participating entity shall take all actions necessary to allow the Corporation to debit assessments from the participating entity's designated deposit account as provided for in § 327.3(a)(2). Each participating entity shall ensure that funds in an amount at least equal to the amount of the assessment are available in the designated account for direct debit by the Corporation on the first business day after posting of the invoice on FDICconnect. Failure to take any such action or to provide such funding of the account shall be deemed to constitute nonpayment of the assessment, and such failure by any participating entity will be subject to the penalties for failure to timely pay assessments as provided for at § 308.132(c)(3)(v). [Codified at 12 C.F.R. § 370.6] [Section 370.6 amended at 73 Fed. Reg. 66163, November 7, 2008, effective November 4, 2008] § 370.7 Assessment for 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   (c)  Amount of assessment. 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 Reports of Condition and Income or Thrift Financial 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 an noninterest bearing savings deposit account as provided in § 370.4(c). This assessment shall be in addition to an institution's risk-based assessment imposed under Part 327.   (d)  Collection of assessment. Assessments for the transaction account guarantee program shall be collected along with a participating entity's quarterly deposit insurance payment as provided in § 327.3, and subject to penalties for failure to timely pay assessments as referenced in § 308.132(c)(3)(v). [Codified at 12 C.F.R. § 370.7] [Section 370.7 amended at 73 Fed. Reg. 66163, November 7, 2008, effective November 4, 2008] {{12-31-08 p.3246}} § 370.8 Systemic Risk Emergency Special Assessment to recover loss.   To the extent that the assessments provided under § 370.6 or § 370.7 are insufficient to cover any loss or expenses arising from the temporary liquidity guarantee program, the Corporation shall impose an emergency special assessment on insured depository institutions as provided under 12 U.S.C. 1823(c)(4)(G)(ii) of the FDI Act. [Codified at 12 C.F.R. § 370.8] § 370.9 Recordkeeping requirements.   The FDIC will establish procedures, require reports, and require participating entities to provide and preserve any information needed for the operation of this program. [Codified at 12 C.F.R. § 370.9] § 370.10 Oversight.   (a)  Oversight. Participating entities availing themselves of the temporary liquidity guarantee program are subject to the FDIC's oversight regarding compliance with the terms of the temporary liquidity guarantee program.   (b)  By issuing guaranteed debt, and not opting out of the temporary liquidity guarantee program, all participating entities agree, for the duration of the temporary liquidity guarantee program, to be subject to the FDIC's authority to determine compliance with the provisions and requirements of the program. [Codified at 12 C.F.R. § 370.10] § 370.11 Enforcement Mechanisms.   (a)  Termination of Participation. If the FDIC, in its discretion, after consultation with the participating entity's appropriate Federal banking agency, determines that the participating entity should no longer be permitted to continue to participate in the temporary liquidity guarantee program, the FDIC will inform the entity that it will no longer be provided the protections of the temporary liquidity guarantee program.     (1)  Termination of participation in the temporary liquidity guarantee program will solely have prospective effects. All previously issued guaranteed debt will continue to be guaranteed as set forth in this part.     (2)  The FDIC will work with the participating entity and its appropriate Federal banking agency to assure that the entity notifies its customers and lenders or creditors that its participation in the temporary liquidity guarantee program has ended.   (b)  Enforcement Actions. Violating the terms or requirements of the temporary liquidity guarantee program set forth in this part constitutes a violation of a regulation and subjects the participating entity to enforcement actions under Section 8 of the FDI Act (12 U.S.C. 1818), including the assessment of civil money penalties under section 8(i) of the FDI Act (12 U.S.C. 1818(i)). The appropriate Federal banking agency for the participating entity will consult with the FDIC in enforcing the provisions of this part. The appropriate Federal banking agency and the FDIC also have enforcement authority under 12 U.S.C. 1828(a)(4)(C) to pursue an enforcement action if a person knowingly misrepresents that any deposit liability, obligation, certificate, or share is insured when it is not in fact insured. [Codified at 12 C.F.R. § 370.11] § 370.12 Payment of Claims.   (a)  Claims for Deposits in Guaranteed Transaction Accounts.     (1)  In general. The FDIC will pay guaranteed claims of depositors who hold noninterest-bearing transaction deposit accounts in an insured depository institution that is a participating entity as soon as possible upon the failure of the entity. Unless otherwise provided for in this subsection, the guaranteed claims of depositors who holds noninterest-bearing transaction deposit accounts in such entities will be paid in accordance with 12 U.S.C. 1821(f) and 12 CFR 330.     (2)  Subrogation rights of FDIC. Upon payment of such claims, the FDIC will be subrogated to the claims of depositors in accordance with 12 U.S.C. 1821(g). {{12-31-08 p.3247}}     (3)  Review of final determination. The final determination of the amount guaranteed shall be considered a final agency action of the FDIC reviewable in accordance with Chapter 7 of Title 5, by the United States district court for the federal judicial district where the principal place of business of the depository institution is located. Any request for review of the final determination shall be filed with the appropriate district court not later than sixty (60) days of the date on which the final determination is issued.   (b)  Claims for Guaranteed Debt--(1) Guaranteed debt in receivership.       (i)  Procedure for claims determination. Holders of debt shall file a claim with the receiver of a failed insured depository institution that is a participating entity within ninety days after the FDIC publishes a notice to creditors of the failed financial institution to present claims pursuant to 12 U.S.C. 1821(d)(3)(B). The FDIC will consider the proof of claim, if timely filed, and will make a determination of the amount guaranteed within 180 days of the filing of the proof of claim, unless extended by written agreement between the claimant and the FDIC. The determination of the FDIC will be final. The FDIC will pay interest at the 90-day T-Bill rate if there is a delay in payment beyond the next business day after receivership.       (ii)  Subrogation rights of FDIC. To receive payment under the debt guarantee program, the holder of the unsecured senior debt shall assign its rights, title and interest in the unsecured senior debt to the FDIC and to transfer its validated claim to the FDIC which will be subrogated to such rights.       (iii)  Review of final determination. The debt holder shall have the right to seek judicial review of the FDIC's final determination of the amount guaranteed in the district or territorial court of the United States for the district within which the depository institution's principal place of business is located or the United States District Court for the District of Columbia. The debt holder must file suit on such claim before the end of the 60-day period beginning on the date of the FDIC's final determination or before the end of the 60-day period beginning on the 180th day after the debt holder filed the claim with the FDIC, unless extended by mutual agreement, if the FDIC has not made a final determination.     (2)  Guaranteed debt of a participating U.S. Bank Holding Company, or U.S. Savings and Loan Holding Company or Authorized Affiliates.       (i)  Procedure for claims determination. The holder of the unsecured senior debt of a holding company or authorized affiliate must timely file a bankruptcy proof of claim (POC) against the company's bankruptcy estate and present evidence of such timely filed bankruptcy POC in order to be eligible to participate in the TLG Program. The POC must be filed with the FDIC within 90 days of the published bar date of the bankruptcy proceeding. The claimant shall identify and describe the debt it believes is subject to the FDIC guarantee.       (ii)  Payment of claims. The FDIC will make payment to the debt holder for the principal amount of the debt and contract interest to the date of the filing of a bankruptcy petition with respect to the company, provided that the FDIC will pay interest at the 90-day T-Bill bill rate if there is a delay in payment beyond the next business day after the date of filing of the bankruptcy petition. The FDIC is not required to make payment on the guaranteed amount for a debt asserted against a bankruptcy estate, unless and until the claim for the unsecured senior debt has been determined to be an allowed claim against the bankruptcy estate and such claim is not subject to reconsideration under 11 U.S.C. 502(j).       (iii)  Assignment of rights to FDIC. To receive payment under the debt guarantee program, the holder of the unsecured senior debt shall assign its rights, title and interest in the unsecured senior debt to the FDIC and to transfer its allowed claim in bankruptcy to the FDIC. This assignment shall include the right of the FDIC to receive principal and interest payments on the unsecured senior debt from the proceeds of the bankruptcy estate of the holding company. If the holder of the unsecured senior debt receives any distribution from the bankruptcy estate prior to the FDIC's payment under the guarantee, the guaranteed amount paid by the FDIC shall be reduced by the amount the holder has received in the distribution from the bankruptcy estate.       (iv)  Final determination. The FDIC's determination of the guaranteed amount shall be a final administrative determination subject to judicial review. {{12-31-08 p.3248}}       (v)  Review of final determination. The holder of an unsecured senior debt shall have the right to seek judicial review of the FDIC's final determination in the United States District Court for the District of Columbia or the United State District Court for the federal district where the holding company's principal place of business was located. Failure of the holder of the unsecured senior debt to seek such judicial review within sixty (60) days of the date of the rendering of the final determination will deprive the holder of the unsecured senior debt of all further rights and remedies with respect to the guarantee claim. [Codified at 12 C.F.R. § 370.12] [The page following this is 3249.] [Main Tabs]     [Table of Contents - 2000]     [Index]     [Previous Page]     [Next Page]     [Search]

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