Calculation of Maximum Obligation Limitation

SUMMARY: This notice of proposed rulemaking is published jointly by the Federal Deposit Insurance Corporation (the "FDIC") and the Departmental Offices of the Department of the Treasury (the "Treasury") (collectively, the "Agencies") and proposes rules to implement applicable provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"). /1/ In accordance with the requirements of the Dodd-Frank Act, the proposed rules govern the calculation of the maximum obligation limitation ("MOL"), as specified in section 210(n)(6) of the Dodd-Frank Act. The MOL limits the aggregate amount of outstanding obligations that the FDIC may issue or incur in connection with the orderly liquidation of a covered financial company.

FOOTNOTE 1 Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203, 12 U.S.C. 5301 et seq. (2010). END FOOTNOTE

EFFECTIVE DATE: Comments must be received on or before January 24, 2012.

ADDRESSES: You may submit comments by any of the following methods:

FDIC

You may submit comments by any of the following methods:

* FDIC Web Site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow instructions for submitting comments on the agency Web site.

* FDIC Email: [email protected]. Include RIN # [insert] on the subject line of the message.

* FDIC Mail: Robert E. Feldman, Executive Secretary, Attention: Comments, Federal Deposit Insurance Corporation, 550 17th Street NW., Washington, DC 20429.

* Hand Delivery to FDIC: Comments may be hand-delivered to the guard station at the rear of the 550 17th Street Building (located on F Street) on business days between 7 a.m. and 5 p.m.

Please note: All comments received will be posted generally without change to http://www.fdic.gov/regulations/laws/federal/propose.html, including any personal information provided.

Please include your name, affiliation, address, email address and telephone number(s) in your comment. Where appropriate, comments should include a short Executive Summary (no more than five single-spaced pages). All statements received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. You should submit only information that you wish to make available publicly.

Treasury

Federal eRulemaking Portal--"Regulations.gov." You are encouraged to submit comments electronically through the Federal eRulemaking Portal--"Regulations.gov." Go to http://www.regulations.gov to submit or view public comments. The Regulations.gov home page provides information on using Regulations.gov, including instructions for submitting or viewing public comments, viewing other supporting and related materials, and viewing the docket.

Mail: Department of the Treasury, Office of Financial Institutions Policy, Room 1310, Main Treasury Building, 1500 Pennsylvania Avenue NW., Washington, DC 20220.

Instructions: In general, the Treasury will enter all comments received into the docket and make them available without change, including any business or personal information that you provide such as name and address information, email addresses, or phone numbers. Comments, including attachments and other supporting materials, received are part of the public record and subject to public disclosure. Do not enclose any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure.

You may view comments and other related materials by any of the following methods:

Viewing Comments Electronically: Go to http://www.regulations.gov</a> and follow the instructions on the Web site.

FOR FURTHER INFORMATION CONTACT: Arthur D. Murphy, Senior Financial Analyst, Division of Finance (703) 562-6177 or [email protected]; Henry R.F. Griffin, Assistant General Counsel, Legal Division (202) 898-8700 or [email protected]; Michelle Borzillo, Senior Counsel, Legal Division (202) 898-7400 or [email protected]; or Claude A. Rollin, Counsel, Legal Division (202) 898-8741 or [email protected].

Treasury

Lance Auer, Deputy Assistant Secretary (Financial Institution Policy), at (202) 622-1262; Felton Booker, Acting Director, Office of Financial Institutions Policy, at (202) 622-0293; Peter A. Bieger, Acting Assistant General Counsel (Banking and Finance), at (202) 622-0480; and Steven D. Laughton, Senior Counsel, Office of General Counsel, at (202) 622-8413.

SUPPLEMENTARY INFORMATION: Title II of the Dodd-Frank Act establishes an Orderly Liquidation Authority ("OLA") to resolve a large interconnected financial company upon a determination that its failure and resolution under otherwise applicable law would have serious adverse effects on financial stability in the United States and the use of OLA would avoid or mitigate such adverse effects. Under the systemic risk determination process set forth in the Dodd-Frank Act, certain designated Federal agencies, /2/ on their own initiative or at the request of the Secretary of the Treasury ("Secretary"), may recommend that the Secretary appoint the FDIC as receiver of a financial company. Any written recommendation from the designated Federal agencies to the Secretary to make a systemic risk determination must include a number of specific findings, which are enumerated in section 203(a)(2) of the Dodd-Frank Act. /3/ Then, based on the written recommendation of the appropriate agencies, the Secretary, in consultation with the President, must determine whether the conditions in section 203(b) of the Dodd-Frank Act have been satisfied so that the covered financial company can be placed into receivership. In making that determination, the Secretary must document any determination and retain such documentation. /4/ This procedure is very similar to the way that systemic risk determinations are made under section 13 of the Federal Deposit Insurance Act (the "FDIA"). /5/ Under section 201(a)(8) of the Dodd-Frank Act, a "covered financial company" is a "financial company" /6/ for which a systemic risk determination has been made pursuant to section 203(b) of the Dodd-Frank Act but does not include an insured depository institution.

FOOTNOTE 2 The Board of Governors of the Federal Reserve System ("FRB") and the Securities and Exchange Commission ("SEC") will make the recommendation if the company or its largest U.S. subsidiary is a broker or a dealer. The FRB and the Director of the Treasury's Federal Insurance Office will make the recommendation and provide affirmative approval, respectively, if the company or its largest U.S. subsidiary is an insurance company, and the FRB and the FDIC will make the recommendation in all other cases. In cases involving the FRB and FDIC, the systemic risk recommendation must be approved by at least 2/3 of the members of the Federal Reserve Board then serving and at least 2/3 of the members of the FDIC Board of Directors then serving. END FOOTNOTE

FOOTNOTE 3 Section 203(a)(2) of the Dodd-Frank Act provides that all written recommendations from the designated Federal agencies to the Secretary to make a systemic risk determination must include the following:

(1) An evaluation of whether the financial company is in default or in danger of default;

(2) A description of the effect that the default of the financial company would have on financial stability in the United States;

(3) A description of the effect that the default of the financial company would have on economic conditions or financial stability for low income, minority, or underserved communities;

(4) A recommendation regarding the nature and the extent of actions to be taken under Title II of Dodd-Frank regarding the financial company;

(5) An evaluation of the likelihood of a private sector alternative to prevent the default of the financial company;

(6) An evaluation of why a case under the Bankruptcy Code is not appropriate for the financial company;

(7) An evaluation of the effects on creditors, counterparties, and shareholders of the financial company and other market participants; and

(8) An evaluation of whether the company satisfies the definition of a financial company under section 201 of the Dodd-Frank Act. END FOOTNOTE

FOOTNOTE 4 Section 203(b) of the Dodd-Frank Act requires the Secretary of Treasury to determine that:

(1) The financial company is in default or in danger of default;

(2) The failure of the financial company and its resolution under otherwise applicable Federal or State law would have serious adverse effects on financial stability in the United States;

(3) No viable private sector alternative is available to prevent the default of the financial company;

(4) Any effect on the claims or interests of creditors, counterparties, and shareholders of the financial company and other market participants as a result of actions taken under this title is appropriate, given the impact that any action taken under this title would have on financial stability in the United States;</p>

--This is a summary of a Federal Register article originally published on the page number listed below--

Notice of proposed rulemaking.

CFR Part: "12 CFR Part 380"

RIN Number: "RIN 1505-AC36"

Citation: "76 FR 72645"

Document Number: "RIN 3064-AD84"

Federal Register Page Number: "72645"

"Proposed Rules"