While the FDIC’s Temporary Liquidity Guarantee Program (TLGP) remains an “opt-out” program, institutions must take affirmative action if they do not opt-out of the Debt Guarantee portion of the TLGP. Moreover, the FDIC’s Election Form Instructions state that all eligible entities must file the Election Form no later than 11:59 p.m., Eastern Standard Time, on December 5, 2008.
Failure to opt-out by 11:59 p.m., Eastern Standard Time, on December 5, 2008 constitutes an irrevocable decision to remain in both components of the TLGP, as described in the following paragraph. However, it is unclear whether institutions will be able to actually participate in the Debt Guarantee portion of the TLGP unless they have affirmatively opted-in.
About the TLGP
On October 14, 2008, the FDIC announced the TLGP to strengthen confidence and encourage liquidity in the banking system. The TLGP consists of two components: a temporary guarantee of newly-issued senior unsecured debt (the “Debt Guarantee”) and a temporary unlimited guarantee of funds in noninterest-bearing transaction accounts at FDIC-insured institutions (the “Transaction Account Guarantee”). The FDIC has provided a TLGP website and Frequently Asked Questions. In addition, all posts on BankPogo.com regarding the TLGP can be accessed here.
The TLGP Election Form
The TLGP Election Form must be submitted for all eligible entities using FDICconnect. The FDIC has also provided PDF versions of a Sample Election Form and the Election Form Instructions, which should be reviewed before completing the Election Form on FDICconnect.