On October 23, 2008, the FDIC issued an Interim Rule and request for comment to implement the two-pronged Temporary Liquidity Guarantee Program (the “Program”) established on October 14, 2008 under the systemic risk provision of the Federal Deposit Insurance Act. As previously reported, the voluntary Program includes a temporary guarantee for newly issued senior unsecured debt (the “Debt Guarantee Program”) and temporary and unlimited deposit insurance coverage for non-interest bearing transaction accounts (the “Transaction Account Guarantee Program”) The Interim Rule was issued following a series of hour-long telephonic technical briefings, the transcripts of which are available on the FDIC’s website.
The FDIC is seeking comment on all aspects of the Interim Rule. With respect to the Debt Guarantee Program, the FDIC is particularly interested in (1) ways in which the claims process may be modified to speed payment to eligible claimants without risking funds administered by the FDIC, and (2) whether the burden of the disclosure required by the Interim Rule outweighs the certainty of payment provided by the disclosures. With respect to the Transaction Account Guarantee Program, the FDIC is particularly interested in whether the unlimited insurance coverage also should extend to NOW accounts held by sole proprietorships, non-profit religious, philanthropic and charitable organizations. Comments are due 15 days from the Interim Rule’s publication in the Federal Register.