United States Department of the Treasury Releases Term Sheet Allowing Private Institutions to Participate in Capital Purchase Program
On Monday, November 17, 2008, the United States Department of the Treasury ("UST") issued a new term sheet and set of frequently asked questions that set forth a program for qualifying financial institutions which are not publicly traded in order to allow those institutions to participate in the UST's capital purchase program. While the new program specifically excludes S corporations, the recent issuances by the UST note that structures for S corporations are still under consideration. The deadline for filing an application to participate in the capital purchase program for non-public qualifying financial institutions (excluding S corporations) is Monday, December 8, 2008. In other words, the recent UST pronouncements specifically state that the December 8, 2008, filing deadline will not apply to S corporations.
While this program for privately-held C corporations contains similarities to the program for publicly-held banking corporations, there are a number of significant revisions to the program. As such, privately-held financial institutions should closely review the newly issued term sheet and any follow-up documents issued by the UST to determine whether they desire to participate in the program.
Winthrop & Weinstine will continue to monitor the capital purchase program for non-public qualifying financial institutions. Should you wish to discuss this program in greater detail, please feel free to contact any of the undersigned attorneys in Winthrop & Weinstine's community banking practice.
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