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?
Jeffrey J. Johnson
1003 South Main Street
Jefferson, WI 53549