What if a participating entity inadvertently issues debt identified as “guaranteed by the FDIC” in excess of the limit established by the FDIC?
The penalties referred to in the previous question still apply. The FDIC may reduce the assessments under this paragraph upon a showing of good cause by the entity. Will the holder of debt that was purchased after an issuing entity exceeded its guarantee limit still be protected in the event of a failure or bankruptcy if the purchaser received the required disclosure that the debt was guaranteed? Yes. The FDIC will monitor banks and bank holding companies for compliance with the guarantee limit. A participating entity that issues guaranteed debt beyond the guarantee limit without authorization from the FDIC will have its assessment rate for all guaranteed debt doubled and will be subject to enforcement actions including the assessment of civil money penalties, as appropriate, including, for example, assessment of civil money penalties under section 8(i) of the FDI Act, removal and prohibition orders under section 8(e) of the FDI Act, and cease and desist orders under section 8(b) of th
Related Questions
- Is there a limit to how much guaranteed debt a participating entity may issue under the debt guarantee component of the Temporary Liquidity Guarantee Program guarantee?
- Are there penalties assessed if a participating entity issues debt identified as "guaranteed by the FDIC" in excess of the limit established by the FDIC?
- What if a participating entity inadvertently issues debt identified as "guaranteed by the FDIC" in excess of the limit established by the FDIC?
