Emergency Clearance Request

FDII

Federal Deposit Insurance Corporation
550 17th Street NW, Washington, D.C. 20429-9990

Legal Division

February 23,2008

Ms. Shagufta Ahed
OMB Desk Offcer
Offce of Management and Budget
New Executive Offce Building
Washington, DC 20503
Dear Ms. Ahmed:

The Federal Deposit Insurance Corporation ("FDIC") is seeking emergency review by
the Paperwork Reduction Act requirements contained in an interim rule
February 27,2008, of
modifying its Temporary Liquidity Guarantee ("TLG") Program. The TLG Program was
instituted by the FDIC on October 14,2008, pursuant to its authority under section l3(c)(4)(G)
of
The Federal Deposit Insurance ("FDI") Act (12 USC 1823(c)O(G)), after an October 13,
2008, determination of systemic risk by the Secretary of the Treasury, in consultation with the
the Boards of
the FDIC and the Federal Reserve
President and upon the recommendation of
System.
the Emergency
Economic Stabilization Act of2008 by Congress, capital injections into banks by the Department
of Treasury, and the making available of commercial paper facilities by the Board of Governors
ofthe Federal Reserve System ("FRB"), to address unprecedented disruption in U.S. and global
credit markets. Under the existing TLG Program, the FDIC provides a 100 percent guarantee for
senior unsecured debt meeting certain criteria that is newly-issued by eligible institutions on or
before June 30, 2009, and for non-interest bearing transaction deposit accounts at FDIC-insured
institutions through December 31, 2009.
The TLG Program was devised as part of a concerted effort, including passage of

Although the TLG Program has had some favorable effects on economic conditions and financial
stability, the disruption in credit markets continues to exist and the general ability to obtain
funding through securitization has created progressively more serious problems, with banks
responding to the market turmoil by retaining cash and tightening lending standards. Data
indicate that debt markets remain largely closed to financial institutions unless their bonds and
notes cary FDIC guarantees. To aid in counteracting these market trends, the FDIC proposes to
expand the TLG Program to include senior unsecured debt with features that require mandatory
the debt into common shares of
the issuing entity at a specified point in time.
conversion of
the TLG Program and the need to take quick action to avoid or mitigate
further deterioration in the economic condition of the financial industry by addressing the
ongoing disruption in the credit markets and, in particular, the long-term funding market for
the TLGP become fully
insured depository institutions requires that the proposed expansion of

The temporary nature of

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operational immediately upon approval by the FDIC Board of
Directors, which is scheduled to
consider the interim rule at a 10:00 a.m. meeting on February 27,2009. We apologize for the
time constraints; however, the FDIC has determined that it is dictated by the exigencies of
the

curent situation in which the financial stability of a significant number of financial institutions is

being threatened, the nation's entire financial system appears to be at risk, and public harm is
the national economy from frozen credit

reasonably likely to result from further deterioration of

markets if normal clearance procedures are followed.

In compliance with the requirements of 5 CFR 1320.12, the FDIC has further determined that the
TLG Program is consistent with the FDIC's mission to maintain the stability of and public
confidence in the national's financial system. The FDIC wil solicit public comment for a 15day period for suggestions on minimizing the burden of
the collection. The FDIC plans to
follow this emergency request with a request through normal clearance procedures and, in that
process, will fully consider all comments on minimizing burden.
Thank you for your consideration of this request.
Sincerely,

-~/L
Robert E. Feldman

Executive Secretary