Highlights:
- The Tobacco Transition Payment Program terminates the federal tobacco
marketing quota and price support loan programs. It also establishes a
10-year transitional payment program for eligible tobacco quota holders
(i.e., land owners) and producers (i.e., farmers) with annual
installments beginning in fiscal year 2005 and ending in fiscal year
2014. The sign-up period to be eligible to receive the 2005 payment
began on March 14, 2005, and ended on June 17, 2005.
- Financial institutions may offer individual producers and quota holders
a lump sum payment – in exchange for the stream of annual payments
received under the tobacco buyout program – through either an
assignment of payments or a successor-in-interest contract. Assignments
may begin with the fiscal year 2005 payment, while successor-in-interest
contracts may not begin until the fiscal year 2006 payment.
- The attached examiner guidance provides information about the Tobacco
Transition Payment Program. It also describes risk-management
examination procedures to be used for state nonmember banks that enter
into related assignment of payments arrangements or
successor-in-interest contracts.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested Routing:
Chief Executive Officer
Chief Lending Officer
Compliance Officer
Related Topics:
The Fair
and Equitable Tobacco Reform Act of 2004
Attachment:
Guidance on the Examination Treatment of the
Tobacco Transition Payment Program
Guidance on the Examination Treatment of the
Tobacco Transition Payment Program - PDF 31k (PDF Help)
Contact:
Section
Chief Serena Owens at sowens@fdic.gov or (202) 898-8996
Case
Manager Nikita Smith at nsmith@fdic.gov or (901) 818-5705.
Note:
FDIC
Financial Institution Letters (FILs) may be accessed from the FDIC's Web
site at www.fdic.gov/news/news/financial/2005/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC FILs may be obtained through the FDIC's Public
Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434
(1-877-275-3342 or (703) 562-2200).
