FDIC Federal Register Citations

From: JJohnson@badgerbank.com 
Sent: Tuesday, November 11, 2008 9:47 AM
To: Comments
Subject: RIN #3064-AD37 

This message is regarding the Debt Guarantee Program portion of the Temporary Liquidity Guarantee Program (TLGP).

My questions and comments are as follows:

1. The TLGP has a significant cost (75bp) associated with it and our bank has always found an available market for overnight funds without the necessity of insuring such. Why are we being “forced” to fund the costs of other operations?

2. The TLGP program is scheduled to operate through June 30, 2009. (although unsecured debt with a longer maturity could be covered until 2012).  What happens after that?

3. The “Opt Out” provision seems to include a stigma associated with any banks that choose to do so. If we choose that option, does it automatically imply that our bank has weaknesses that could lead to loss of funding from our market base?

4. Based on the September 30, 2008 “base value” for eligible insured borrowings, you request an additional amount.  Why does the program need to be based on September 30 and is there a practical process in place to request a higher amount?

5. We have been advised that the cost of borrowing from our Correspondent may reflect “tiered-pricing” based on insured, secured or “other” borrowings. Is that an equitable situation for the overwhelming majority of community banks who are well run, well-capitalized institutions?

6. We are a shareholder and/or customer of Bankers’ Bank in Madison, WI and at this point choose to continue to have them provide all Correspondent relationships available to us. We have jointly developed an efficient model and the preference is that it will continue.

7. We prefer that the TLGP is either reduced in costs for actual usage (to a level not to exceed the costs of FDIC excess insurance on accounts over $250K) or is eliminated completely. Why not direct “troubled institutions” to the Discount Window and allow all other institutions to continue to borrow in the open market as has been the case in the banking system for several decades?

Sincerely; 

Jeffrey J. Johnson
President
Badger Bank
1003 South Main Street
Jefferson, WI  53549