On October 12th, the FDIC published for comment proposed rules on how the agency would treat certain creditor claims under the new orderly liquidation authority established under the Dodd-Frank Act. The proposed rules bar any additional payments to holders of long-term senior debt, subordinated debt or equity interests that would result in those creditors recovering more than other creditors entitled to the same priority of payments under the law. The proposed rules also clarify that all creditors must expect to absorb losses in any liquidation. The proposed rules further provide that secured creditors will only be protected to the extent of the fair value of their collateral. To the extent that any portion of the claim is unsecured, it will absorb losses along with other unsecured creditors. Secured obligations collateralized with U.S. government securities will be valued at par. FDIC Press Release.