Last night the U.S. Treasury released an updated version of the Process-Related FAQs for Capital Purchase Program expanding the previously disseminated FAQs. Among the items addressed, the updated FAQs discuss or clarify:

  • the process for seeking confidential treatment of portions of the Capital Purchase Program application (previously addressed in the Application Guidelines for TARP Capital Purchase Program); 
  • that all FDIC-insured depository institutions (other than those controlled by a foreign bank or company) meet the definition of a Qualifying Financial Institution, or QFI, for purposes of the Capital Purchase Program; 
  • the levels of access to the program for entities that are not part of a holding company structure are between one and three percent of the risk-weighted assets at the FDIC-insured depository institution level;
  • that the November 14, 2008 application deadline is for “public” companies and that the Department of Treasury will “provide a separate deadline for private companies when the term sheet for private companies is made available.” A “public” company for these purposes is an entity (1) whose securities are traded on a national securities exchange, and (2) that is required to file, under the federal securities laws, periodic reports with the Securities and Exchange Commission or its primary federal bank regulator. Note that Treasury’s “public” company definition on its face suggests that SEC registrants that have been delisted and now trade in the pink sheets would not be treated as “public” companies that would be subject to the November 14 deadline; 
  • that institutions that file a bank or thrift holding company application (with respect to an already existing U.S. bank or savings association) on or before November 14, 2008 may apply through their federal banking regulator on a conditional basis by the applicable deadline, but must have received final approval of the holding company application from the applicable federal regulator and the regulator must have recommended the holding company for participation in the TARP Capital Purchase Program by December 31, 2008 in order to receive funding; 
  • that, contrary to statements in the Application Guidelines for TARP Capital Purchase Program published on October 31, 2008, Capital Purchase Program applicants that applied before October 31, 2008 (the day investment agreements were made available on the Treasury website) may, but are not required to, file an amended application; 
  • that the warrant exercise price is calculated based on the average closing price of the applicant’s common stock for the 20 trading days ending on the last trading day prior to the date the applicant’s application was preliminarily approved by the Department of the Treasury (rather than the period leading up to the signing of definitive agreements or the closing).