In response to public comments received on the proposed Temporary Liquidity Guarantee Program (TLGP) first announced by the Federal Deposit Insurance Corporation (FDIC) on October 13, the Board of Directors of the FDIC approved a final TLGP rule on November 21.  

The TLGP has two components: a debt guarantee component, in which the FDIC guarantees newly issued senior unsecured debt of insured depository institutions and most U.S. holding companies; and a transaction account guarantee program, in which participating institutions can provide customers with full coverage on non-interest bearing transaction accounts held at insured depository institutions for an annual fee of 10 basis points.  

In connection with the final adoption, the Board announced numerous changes to the TLGP in light of public comments. With respect to the debt guarantee component, the final version of the program provides that the FDIC’s payment obligation is triggered by a payment default and also eliminates certain short-term debt from coverage. With respect to the transaction account guarantee program, coverage now includes lawyers’ trust accounts and low-interest Negotiable Order of Withdrawal accounts.  

Eligible institutions that do not wish to participate must opt out no later than December 5.