November 6, 2008
Authored by: Robert Klingler
On November 3, 2008, the FDIC extended the deadline for opting out of either component of the Temporary Liquidity Guarantee Program from November 12, 2008 until December 5, 2008. Failure to opt out by December 5, 2008 will constitute a decision to continue to participate in both the debt guarantee and transaction account guarantee programs. (Based on conversations with representatives of the FDIC on Monday, the FDIC does not expect any institution to opt out of the non-interest bearing transaction account guarantee program.)
Decisions to opt out or remain in are irrevocable, and will be made via the FDIConnect system. Election forms will be available starting November 12, 2008, and will require certification by the institution’s Chief Financial Officer.
All eligible entities within the same holding company structure, including the holding company itself, must make the same decision regarding continued participation in either or both programs. Eligible entities that do not opt out of the debt guarantee program must report the amount of outstanding senior, unsecured debt as of September 30, 2008, that is scheduled to mature on or before June 30, 2009.
The FDIC has also published a Sample Election Form, Election Form Instructions and Guidance for Election Options and Reporting Requirements.