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8000 - Miscellaneous Statutes and Regulations


TITLE IV—MISCELLANEOUS PROVISIONS

Subtitle A—Payment System Risk Reduction

CHAPTER 1—BILATERAL AND CLEARING ORGANIZATION NETTING

SEC. 401. FINDINGS AND PURPOSE.

The Congress finds that--

(1)  many financial institutions engage daily in thousands of transactions with other financial institutions directly and through clearing organizations;

(2)  the efficient processing of such transactions is essential to a smoothly functioning economy;

(3)  such transactions can be processed most efficiently if, consistent with applicable contractual terms, obligations among financial institutions are netted;

(4)  such netting procedures would reduce the systemic risk within the banking system and financial markets; and

(5)  the effectiveness of such netting procedures can be assured only if they are recognized as valid and legally binding in the event of the closing of a financial institution participating in the netting procedures.

[Codified to 12 U.S.C. 4401]

[Source:  Section 401 of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2371), effective December 19, 1991]

SEC. 402. DEFINITIONS.

For purposes of this chapter--

(1)  BROKER OR DEALER.--The term "broker or dealer" means--

(A)  any company that is registered or licensed under Federal or State law to engage in the business of brokering, underwriting, or dealing in securities in the United States; and

(B)  to the extent consistent with this title, as determined by the Board of Governors of the Federal Reserve System, any company that is an affiliate of a company described in subparagraph (A) and that is engaged in the business of entering into netting contracts.

(2)  CLEARING ORGANIZATION.--The term "clearing organization" means a clearinghouse, clearing association, clearing corporation, or similar organization--

(A)  that provides clearing, netting, or settlement services for its members and--

(i)  in which all members other than the clearing organization itself are financial institutions or other clearing organizations; or

(ii)  which is registered as a clearing agency under the Securities Exchange Act of 1934, or is exempt from such registration by order of the Securities and Exchange Commission; or

(B)  that is registered as a derivatives clearing organization under section 5b of the Commodity Exchange Act, that has been granted an exemption under section 4(c)(1) of the Commodity Exchange Act, or that is a multilateral clearing organization (as defined in section 408 of this Act).

(3)  COVERED CLEARING OBLIGATION.--The term "covered clearing obligation" means an obligation of a member of a clearing organization to make payment to another member of a clearing organization, subject to a netting contract.

(4)  COVERED CONTRACTUAL PAYMENT ENTITLEMENT.--The term "covered contractual payment entitlement" means--

(A)  an entitlement of a financial institution to receive a payment, subject to a netting contract from another financial institution; and

(B)  an entitlement of a member of a clearing organization to receive payment, subject to a netting contract, from another member of a clearing organization of a covered clearing obligation.

(5)  COVERED CONTRACTUAL PAYMENT OBLIGATION.--The term "covered contractual payment obligation" means--

(A)  an obligation of a financial institution to make payment, subject to a netting contract to another financial institution; and

(B)  a covered clearing obligation.

(6)  DEPOSITORY INSTITUTION.--The term "depository institution" means--

(A)  a depository institution as defined in section 19(b)(1)(A) of the Federal Reserve Act (other than clause (vii));

(B)  an uninsured national bank or an uninsured State bank that is a member of the Federal Reserve System, if the national bank or State member bank is not eligible to make application to become an insured bank under section 5 of the Federal Deposit Insurance Act;

(C)  a branch or agency of a foreign bank, a foreign bank and any branch or agency of the foreign bank, or the foreign bank that established the branch or agency, as those terms are defined in section 1(b) of the International Banking Act of 1978;

(D)  a corporation chartered under section 25(a) of the Federal Reserve Act; or

(E)  a corporation having an agreement or undertaking with the Board of Governors of the Federal Reserve System under section 25 of the Federal Reserve Act.

(7)  FAILED FINANCIAL INSTITUTION.--The term "failed financial institution" means a financial institution that--

(A)  fails to satisfy a covered contractual payment obligation when due;

(B)  has commenced or had commenced against it insolvency, liquidation, reorganization, receivership (including the appointment of a receiver), conservatorship, or similar proceedings; or

(C)  has generally ceased to meet its obligations when due.

(8)  FAILED MEMBER.--The term "failed member" means any member that--

(A)  fails to satisfy a covered clearing obligation when due,

(B)  has commenced or had commenced against it insolvency, liquidation, reorganization, receivership (including the appointment of a receiver), conservatorship, or similar proceedings, or

(C)  has generally ceased to meet its obligations when due.

(9)  FINANCIAL INSTITUTION.--The term "financial institution" means a broker or dealer, a depository institution, a futures commission merchant, or any other institution as determined by the Board of Governors of the Federal Reserve System.

(10)  FUTURES COMMISSION MERCHANT.--The term "futures commission merchant" means a company that is registered or licensed under Federal law to engage in the business of selling futures and options in commodities.

(11)  MEMBER.--The term "member" means a member of or participant in a clearing organization, and includes the clearing organization and any other clearing organization with which such clearing organization has a netting contract.

(12)  NET ENTITLEMENT.--The term "net entitlement" means the amount by which the covered contractual payment entitlements of a financial institution or member exceed the covered contractual payment obligations of the institution or member after netting under a netting contract.

(13)  NET OBLIGATION.--The term "net obligation" means the amount by which the covered contractual payment obligations of a financial institution or member exceed the covered contractual payment entitlements of the institution or member after netting under a netting contract.

(14)  NETTING CONTRACT.--

(A)  IN GENERAL.--The term "netting contract"--

(i)  means a contract or agreement between 2 or more financial institutions, clearing organizations, or members that provides for netting present or future payment obligations or payment entitlements (including liquidation or close out values relating to such obligations or entitlements) among the parties to the agreement; and

(I)  is governed by the laws of the United States, any State, or any political subdivision of any State, and

(II)  provides for netting present or future payment obligations or payment entitlements (including liquidation or close-out values relating to the obligations or entitlements) among the parties to the agreement; and

(ii)  includes the rules of a clearing organization.

(B)  INVALID CONTRACTS NOT INCLUDED.--The term "netting contract" does not include any contract or agreement that is invalid under or precluded by Federal law.

(15)  PAYMENT.--The term "payment" means a payment of United States dollars, another currency, or a composite currency, and a noncash delivery, including a payment or delivery to liquidate an unmatured obligation.

[Codified to 12 U.S.C. 4402]

[Source:  Section 402 of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2372), effective December 19, 1991; as amended by section 1606(a) of title XVI of the Act of October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 4087), effective December 12, 1991; sections 112(a)(1) and 123(b) of title I of the Act of December 21, 2000 (Pub. L. No. 106--554; 114 Stat. 2763A--391 and 411), effective December 21, 2000; section 906(a) of title IX of the Act of April 20, 2005 (Pub. L. No. 109--8; 119 Stat. 167 and 168), effective April 20, 2005]

SEC. 403. BILATERAL NETTING.

(a)  GENERAL RULE.--Notwithstanding any other provision of State or Federal law (other than section 11(e) of the Federal Deposit Insurance Act, section 210(c) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617(d)), section 207(c) of the Federal Credit Union Act, or any order authorized under section 5(b)(2) of the Securities Investor Protection Act of 1970), the covered contractual payment obligations and the covered contractual payment entitlements between any 2 financial institutions shall be terminated, liquidated, accelerated, and netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract (except as provided in section 561(b)(2) of title 11, United States Code).

[Codified to 12 U.S.C. 4403(a)]

[Source:  Section 403(a) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991; as amended by section 906(b)(1) of title IX of the Act of April 20, 2005 (Pub. L. No. 109--8; 119 Stat. 168), effective April 20, 2005; section 4(a) of the Act of December 12, 2006 (Pub. L. No. 109--390; 120 Stat. 2695), effective December 12, 2006; section 211(c) of title II of the Act of July 21, 2010 (Pub. L. No. 111--203; 124 Stat. 1514), effective July 21, 2010]

(b)  LIMITATION ON OBLIGATION TO MAKE PAYMENT.--The only obligation, if any, of a financial institution to make payment with respect to covered contractual payment obligations to another financial institution shall be equal to its net obligation to such other financial institution, and no such obligation shall exist if there is no net obligation.

[Codified to 12 U.S.C. 4403(b)]

[Source:  Section 403(b) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991]

(c)  LIMITATION ON RIGHT TO RECEIVE PAYMENT.--The only right, if any, of a financial institution to receive payments with respect to covered contractual payment entitlements from another financial institution shall be equal to its net entitlement with respect to such other financial institution, and no such right shall exist if there is no net entitlement.

[Codified to 12 U.S.C. 4403(c)]

[Source:  Section 403(c) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991]


(d)  PAYMENT OF NET ENTITLEMENT OF FAILED FINANCIAL INSTITUTIONS.--The net entitlement of any failed financial institution, if any, shall be paid to the failed financial institution in accordance with, and subject to the conditions of, the applicable netting contract.

[Codified to 12 U.S.C. 4403(d)]

[Source:  Section 403(d) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991]

(e)  EFFECTIVENESS NOTWITHSTANDING STATUS AS FINANCIAL INSTITUTION.--This section shall be given effect notwithstanding that a financial institution is a failed financial institution.

[Codified to 12 U.S.C. 4403(e)]

[Source:  Section 403(e) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991]

(f)  ENFORCEABILITY OF SECURITY AGREEMENTS.--The provisions of any security agreement or arrangement or other credit enhancement related to one or more netting contracts between any 2 financial institutions shall be terminated, liquidated, accelerated, and enforceable in accordance with their terms (except as provided in section 561(b)(2) of title 11, United States Code), and shall not be stayed, avoided, or otherwise limited by any State or Federal law (other than section 11(e) of the Federal Deposit Insurance Act, section 207(c) of the Federal Credit Union Act, and section 5(b)(2) of the Securities Investor Protection Act of 1970).

[Codified to 12 U.S.C. 4403(f)]

[Source: Section 906(b)(2) of title IX of the Act of April 20, 2005 (Pub. L. No. 109--8; 119 Stat. 168), effective April 20, 2005; section 4(a) of the Act of December 12, 2006 (Pub. L. No. 109--390; 120 Stat. 2695), effective December 12, 2006]

SEC. 404. CLEARING ORGANIZATION NETTING.

(a)  GENERAL RULE.--Notwithstanding any other provisions of State or Federal law (other than section 1(e) of the Federal Deposit Insurance Act, section 207(c) of the Federal Credit Union Act, and any order authorized under section 5(b)(2) of the Securities Investor Protection Act of 1970), the covered contractual payment obligations and the covered contractual payment entitlements of a member of a clearing organization to and from all other members of a clearing organization shall be terminated, liquidated, accelerated, and netted in accordance with and subject to the conditions of any applicable netting contract (except as provided in section 561(b)(2) of title 11, United States Code).

[Codified to 12 U.S.C. 4404(a)]

[Source:  Section 404(a) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991; as amended by section 906(c)(1) of title IX of the Act of April 20, 2005 (Pub. L. No. 109--8; 119 Stat. 168), effective April 20, 2005; section 4(b) of the Act of December 12, 2006 (Pub. L. No. 109--390; 120 Stat. 2695), effective December 12, 2006]

(b)  LIMITATION OF OBLIGATION TO MAKE PAYMENT.--The only obligation, if any, of a member of a clearing organization to make payment with respect to covered contractual payment obligations arising under a single netting contract to any other member of a clearing organization shall be equal to its net obligation arising under that netting contract, and no such obligation shall exist if there is no net obligation.

[Codified to 12 U.S.C. 4404(b)]

[Source:  Section 404(b) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991]

(c)  LIMITATION ON RIGHT TO RECEIVE PAYMENT.--The only right, if any, of a member of a clearing organization to receive payment with respect to a covered contractual payment entitlement arising under a single netting contract from other members of a clearing organization shall be equal to its net entitlement arising under that netting contract, and no such right shall exist if there is no net entitlement.

[Codified to 12 U.S.C. 4404(c)]


[Source:  Section 404(c) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991]

(d)  ENTITLEMENT OF FAILED MEMBERS.--The net entitlement, if any, of any failed member of a clearing organization shall be paid to the failed member in accordance with, and subject to the conditions of, the applicable netting contract.

[Codified to 12 U.S.C. 4404(d)]

[Source:  Section 404(d) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991]

(e)  OBLIGATIONS OF FAILED MEMBERS.--The net obligation, if any, of any failed member of a clearing organization shall be determined in accordance with, and subject to the conditions of, the applicable netting contract.

[Codified to 12 U.S.C. 4404(e)]

[Source:  Section 404(e) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2374), effective December 19, 1991]

(f)  LIMITATION ON CLAIMS FOR ENTITLEMENT.--A failed member of a clearing organization shall have no recognizable claim against any member of a clearing organization for any amount based on such covered contractual payment entitlements other than its net entitlement.

[Codified to 12 U.S.C. 4404(f)]

[Source:  Section 404(f) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2375), effective December 19, 1991]

(g)  EFFECTIVENESS NOTWITHSTANDING STATUS AS MEMBER.--This section shall be given effect notwithstanding that a member is a failed member.

[Codified to 12 U.S.C. 4404(g)]

[Source:  Section 404(g) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2375), effective December 19, 1991]

(h)  ENFORCEABILITY OF SECURITY AGREEMENTS.--The provisions of any security agreement or arrangement or other credit enhancement related to one or more netting contracts between any 2 members of a clearing organization shall be terminated, liquidated, accelerated, and enforceable in accordance with their terms (except as provided in section 561(b)(2) of title 11, United States Code), and shall not be stayed, avoided, or otherwise limited by any State or Federal law (other than of section 11(e) of the Federal Depoist Insurance Act, section 207(c) of the Federal Credit Union Act, and section 5(b)(2) of the Securities Investor Protection Act of 1970).

[Codified to 12 U.S.C. 4404(h)]

[Source: Section 906(c)(2) of title IX of the Act of April 20, 2005 (Pub. L. No. 109--8; 119 Stat. 168), effective April 20, 2005; section 4(b) of the Act of December 12, 2006 (Pub. L. No. 109--390; 120 Stat. 2695), effective December 12, 2006]

SEC. 405. PREEMPTION.

No stay, injunction, avoidance, moratorium, or similar proceeding or order, whether issued or granted by a court, administrative agency, or otherwise, shall limit or delay application of otherwise enforceable netting contracts in accordance with sections 403 and 404.

[Codified to 12 U.S.C. 4405]

[Source:  Section 405 of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2375), effective December 19, 1991]

SEC. 406. RELATIONSHIP TO OTHER PAYMENTS SYSTEMS.

This subtitle shall have no effect by implication or otherwise on the validity or legal enforceability of a netting arrangement of any payment system which is not subject to this subtitle.

[Codified to 12 U.S.C. 4406]


[Source:  Section 406 of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2375), effective December 19, 1991]

SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED NATIONAL BANKS, UNINSURED FEDERAL BRANCHES AND AGENCIES, CERTAIN UNINSURED STATE MEMBER BANKS, AND EDGE ACT CORPORATIONS.

(a)  IN GENERAL.--Notiwthstanding any other provision of law, paragraphs (8), (9), (10), and (11) of section 11(e) of the Federal Deposit Insurance Act shall apply to an uninsured national bank or uninsured Federal branch or Federal agency, a corporation chartered under section 25A of the Federal Reserve Act, or an uninsured State member bank which operates, or operates as, a multilateral clearing organization pursuant to section 409 of this Act, except that for such purpose--

(1)  any reference to the "Corporation as receiver" or "the receiver or the Corporation" shall refer to the receiver appointed by the Comptroller of the Currency in the case of an uninsured national bank or uninsured Federal branch or agency, or to the receiver appointed by the Board of Governors of the Federal Reserve System in the case of a corporation chartered under section 25A of the Federal Reserve Act or an uninsured State member bank;

(2)  any reference to the "Corporation" (other than in section 11(e)(8)(D) of such Act), the "Corporation, whether acting as such or as conservator or receiver", a "receiver", or a "conservator" shall refer to the receiver or conservator appointed by the Comptroller of the Currency in the case of an uninsured national bank or uninsured Federal branch or agency, or to the receiver or conservator appointed by the Board of Governors of the Federal Reserve System in the case of a corporation chartered under section 25A of the Federal Reserve Act or an uninsured State member bank; and

(3)  any reference to an "insured depository institution" or "depository institution" shall refer to an uninsured national bank, an uninsured Federal branch or Federal agency, a corporation chartered under section 25A of the Federal Reserve Act, or an uninsured State member bank which operates, or operates as, a multilateral clearing organization pursuant to section 409 of this Act.

(b)  LIABILITY.--The liability of a receiver or conservator of an uninsured national bank, uninsured Federal branch or agency, a corporation chartered under section 25A of the Federal Reserve Act, or an uninsured State member bank which operates, or operates as, a multilateral clearing organization pursuant to section 409 of this Act, shall be determined in the same manner and subject to the same limitations that apply to receivers and conservators of insured depository institutions under section 11(e) of the Federal Deposit Insurance Act.

(c)  REGULATORY AUTHORITY.--

(1)  IN GENERAL.--The Comptroller of the Currency in the case of an uninsured national bank or uninsured Federal branch or agency and the Board of Governors of the Federal Reserve System in the case of a corporation chartered under section 25A of the Federal Reserve Act, or an uninsured State member bank that operates, or operates as, a multilateral clearing organization pursuant to section 409 of this Act, in consultation with the Federal Deposit Insurance Corporation, may each promulgate regulations solely to implement this section.

(2)  SPECIFIC REQUIREMENT.--In promulgating regulations, limited solely to implementing paragraphs (8), (9), (10), and (11) of section 11(e) of the Federal Deposit Insurance Act, the Comptroller of the Currency and the Board of Governors of the Federal Reserve System each shall ensure that the regulations generally are consistent with the regulations and policies of the Federal Deposit Insurance Corporation adopted pursuant to the Federal Deposit Insurance Act.

(d)  DEFINITIONS.--For purposes of this section, the terms "Federal branch", "Federal agency", and "foreign bank" have the same meanings as in section 1(b) of the International Banking Act of 1978.

[Codified to 12 U.S.C. 4406a]

[Section 906(d) of title IX of the Act of April 20, 2005 (Pub. L. No. 109--8; 119 Stat. 169), effective April 20, 2005]

SEC. 407A. NATIONAL EMERGENCIES.

The provisions of this subtitle may not be construed to limit the authority of the President under the Trading With the Enemy Act (50 U.S.C. App. 1 et seq.) or the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.).

[Codified to 12 U.S.C. 4407]

[Source:  Section 407 of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2375), effective December 19, 1991; redesignated by section 906(d)(1) of title IX of the Act of April 20, 2005 (Pub. L. No. 109--8; 119 Stat. 169), effective April 20, 2005] ]

CHAPTER 2—MULTILATERAL CLEARING ORGANIZATIONS

SEC. 408. DEFINITIONS.

For purposes of this chapter, the following definitions shall apply:

(1)  MULTILATERAL CLEARING ORGANIZATION.--The term "multilateral clearing organization" means a system utilized by more than two participants in which the bilateral credit exposures of participants arising from the transactions cleared are effectively eliminated and replaced by a system of guarantees, insurance, or mutualized risk of loss.

(2)  OVER-THE-COUNTER DERIVATIVE INSTRUMENT.--The term "over-the-counter derivative instrument" includes--

(A)  any agreement, contract, or transaction, including the terms and conditions incorporated by reference in any such agreement, contract, or transaction, which is an interest rate swap, option, or forward agreement, including a rate floor, rate cap, rate collar, cross-currency rate swap, basis swap, and forward rate agreement; a same day-tomorrow, tomorrow-next, forward, or other foreign exchange or precious metals agreement; a currency swap, option, or forward agreement; an equity index or equity swap, option, or forward agreement; a debt index or debt swap, option, or forward agreement; a credit spread or credit swap, option, or forward agreement; a commodity index or commodity swap, or forward agreement; and a weather swap, weather derivative, or weather option;

(B)  any agreement, contract or transaction similar to any other agreement, contract, or transaction referred to in this clause that is presently, or in the future becomes, regularly entered into by parties that participate in swap tranactions (including terms and conditions incorporated by reference in the agreement) and that is a forward, swap, or option on one or more occurrences of any event, rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, economic or other indices or measures of economic or other risk or value;

(C)  any agreement, contract, or transaction excluded from the Commodity Exchange Act under section 2(c), 2(d), 2(f), or 2(g) of such Act, or exempted under section 2(h) or 4(c) of such Act; and

(D)  any option to enter into any, or any combination of, agreements, contracts or transactions referred to in this subparagraph.

(3)  OTHER DEFINITIONS.--The terms "insured State nonmember bank", "State member bank", and "affiliate" have the same meanings as in section 3 of the Federal Deposit Insurance Act.

[Uncodified]

[Source: Section 112(3) of title I of the Act of December 21, 2000 (Pub. L. No. 106--554; 114 Stat. 2763A--391), effective December 21, 2000]

SEC. 409. MULTILATERAL CLEARING ORGANIZATIONS.

(a)  IN GENERAL.--Except with respect to clearing organizations described in subsection (b), no person may operate a multilateral clearing organization for over-the-counter derivative instruments, or otherwise engage in activities that constitute such a multilateral clearing organization unless the person is a national bank, a State member bank, an insured State nonmember bank, an affiliate of a national bank, a State member bank, or an insured State nonmember bank, or a corporation chartered under section 25A of the Federal Reserve Act.

[Uncodified]

[Source: Section 112(3) of title I of the Act of December 21, 2000 (Pub. L. No. 106--554; 114 Stat. 2763A--391), effective December 21, 2000]

(b)  CLEARING ORGANIZATIONS.--Subsection (a) shall not apply to any clearing organization that--

(1)  is registered as a clearing agency under the Securities Exchange Act of 1934;

(2)  is registered as a derivatives clearing organization under the Commodity Exchange Act; or

(3)  is supervised by a foreign financial regulator that the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission, or the Commodity Futures Trading Commission, as applicable, has determined satisfies appropriate standards.

[Uncodified]

[Source: Section 112(3) of title I of the Act of December 21, 2000 (Pub. L. No. 106--554; 114 Stat. 2763A--391), effective December 21, 2000]


Subtitle D--Miscellaneous Committees, Studies, and Reports

SEC. 421. AMENDMENTS RELATING TO FEDERAL RESERVE BOARD RESERVE REQUIREMENTS.

(a)  STUDY ON PAYMENT OF IMPUTED EARNINGS ON STERILE RESERVES TO INSURANCE FUNDS.--The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, and the National Credit Union Administration shall jointly--

(1)  conduct a study on the feasibility of assessing Federal Reserve banks an amount equal to the imputed earnings on reserves held at such banks by insured depository institutions under section 19(b) of the Federal Reserve Act; and

(2)  assess the likely beneficial and adverse effects such an assessment would have on the Federal reserve banks, the deposit insurance funds, the insured depository institutions, and the Federal payment system, including a comparison of the effects on each such subject of the study.

[Uncodified]

[Source:  Section 421(a) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2377), effective December 19, 1991]

(b)  REPORT TO CONGRESS.--Before the end of the 6-month period beginning on the date of the enactment of this Act, the Board of Governors of the Federal Reserve System,the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, and the National Credit Union Administration shall jointly submit a report to the Congress on the findings and conclusions made with respect to the study under subsection (a), together with any recommendation for any legislative or administrative action which such agencies may determine to be appropriate.

[Uncodified]

[Source:  Section 421(b) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2377), effective December 19, 1991]

(c)  REPORT OF DISSENTING VIEWS.--Any agency described in subsections (a) and (b) which does not concur in the findings, conclusions, or recommendations referred to in subsection (b) or has additional findings, conclusions, or recommendations which were not included in the report may submit a report to the Congress describing--

(1)  the reasons why the agency does not concur in the findings, conclusions, or recommendations referred to in subsection (b); and

(2)  such additional findings, conclusions, or recommendations.

[Uncodified]

[Source:  Section 421(c) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2377), effective December 19, 1991]


Subtitle F--Emergency Assistance for Rhode Island

SEC. 431. EMERGENCY LOAN GUARANTEE.

(a)  IN GENERAL.--

(1)  PROVISION FOR GUARANTEE.--Subject to the terms and conditions established by or under this subsection, the Secretary of the Treasury shall guarantee the repayment of any amount not to exceed $180,000,000 borrowed by the State of Rhode Island and Providence Plantations (hereafter in this section referred to as the "State of Rhode Island"), or the Depositors Economic Protection Corporation established by such State, to expedite the repayment of depositors at State-chartered banks and credit unions in receivership in such State and to facilitate the resolution of such receiverships.

(2)  LOAN COLLATERAL REQUIRED AS CONDITION FOR GUARANTEE.--The Secretary of the Treasury may not guarantee the repayment of any amount under paragraph (1) unless the amount of any loan for which the guarantee is sought is fully secured as follows:

(A)  A first lien on assets held or controlled by the Depositors Economic Protection Corporation and the proceeds from the sale of such assets, are irrevocably pledged to the extent necessary to provide collateral for the guarantee.

(B)  If the liens and assets described in subparagraph (A) are insufficient to fully secure the guarantee, then a first lien on any assets held or controlled by the State of Rhode Island or any instrumentality of the State of Rhode Island and the proceeds from the sale of such assets, are irrevocably pledged to the extent necessary to provide collateral for the guarantee.

(C)  If the liens and assets described in subparagraphs (A) and (B) are insufficient to fully secure the guarantee, then any revenue from the State sales tax which is dedicated to the Depositors Economic Protection Corporation under the law of the State of Rhode Island in excess of the amount necessary to pay principal and interest on any obligation of the State or the Corporation issued before the date of the loan is irrevocably dedicated to the extent necessary to provide collateral for the guarantee.

(3)  GUARANTEE FEES.--The Secretary may assess and collect with respect to loans guaranteed under this subsection an annual guarantee fee computed daily at a rate which may not exceed one-half of 1 percent of the outstanding principal amount of the guaranteed loan.

(4)  PLEDGE OF CERTAIN INCOME FOR REPAYMENT.--The Secretary may not guarantee under this section the repayment of any loan proposed to be made to the Depositors Economic Protection Corporation unless, for each fiscal year of the Depositors Economic Protection Corporation, all rents, issues, profits, products, proceeds, revenues, and other income (including insurance proceeds and condemnation awards) received by the Corporation from, or attributable to, the assets pledged to the United States in accordance with this subsection, in excess of the amount necessary to pay the interest, or principal and interest on any loan to the Corporation guaranteed under paragraph (1) that is payable in such fiscal year are irrevocably pledged to be deposited into a sinking fund or defeasance fund maintained by the Corporation and are irrevocably pledged and dedicated to the repayment of the principal of such guaranteed loan in the inverse order of the maturity of such principal installments.

(5)  INVESTMENT GRADE RATING.--The Secretary may not guarantee under this section the repayment of any loan proposed to be made to the State of Rhode Island or the Depositors Economic Protection Corporation unless each such proposed loan has received a rating (for purposes of which the collateral securing the guarantee is considered to be securing the loan) of--

(A)  the highest investment grade from a nationally recognized statistical rating organization;

(B)  not less than 1 less than the investment grade rating from 2 nationally recognized statistical rating organizations; or

(C)  not less than 2 less than the highest investment grade from 2 nationally recognized statistical rating organizations to the extent that--

(i)  a rating of not less than 1 less than the highest investment grade rating from 2 nationally recognized statistical rating organization has not been achieved through the use of all of the collateral listed in subsection (a)(2)(A) and the available collateral under subparagraph (B) or (C) of subsection (a)(2) at the time of the State of Rhode Island's request for the loan guarantee; and

(ii)  representatives of the State of Rhode Island and the Secretary are able to agree upon the lesser grade rating based on changes negotiated to other terms of this subtitle, including the purchase of bond insurance.

(6)  TERMS.--

(A)  IN GENERAL.--The guarantee provided for in this subsection shall be with respect to a loan which--

(i)  is made not more than 1 year after the date of enactment of this Act;

(ii)  will mature not later than 8 years after the date of such loan; and

(iii)  is scheduled to be repaid in equal installments of principal during the last 4 years of the repayment term of such loan.

(B)  AUTHORITY TO VARY TIME PERIODS.--The Secretary and the duly authorized representative of the State of Rhode Island may, by mutual agreement, modify any durational requirement specified in subparagraph (A).

(7)  ADDITIONAL TERMS AND CONDITIONS.--Except as otherwise provided in this subsection, the terms and conditions of any loan guarantee under this section shall be established by mutual agreement of the Secretary of the Treasury and the duly authorized representative of the State of Rhode Island.

[Uncodified]

[Source:  Section 431(a) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2379), effective December 19, 1991]

(b)  APPROPRIATION OF AMOUNTS.--There are hereby appropriated to the Secretary of the Treasury such sums as may be necessary for any fiscal year to meet the obligation of the United States under subsection (a)(1).

[Uncodified]

[Source:  Section 431(b) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2380), effective December 19, 1991]


Subtitle I--Bank and Thrift Employee Provisions

SEC. 451. CONTINUATION OF HEALTH PLAN COVERAGE IN CASES OF FAILED FINANCIAL INSTITUTIONS.

(a)  CONTINUATION COVERAGE.--The Federal Deposit Insurance Corporation--

(1)  shall, in its capacity as a successor of a failed depository institution (whether acting directly or through any bridge bank), have the same obligation to provide a group health plan meeting the requirements of section 602 of the Employee Retirement Income Security Act of 1974 (relating to continuation coverage requirements of group health plans) with respect to former employees of such institution as such institution would have had but for its failure, and

(2)  shall require that any successor described in subsection (b)(1)(B)(iii) provide a group health plan with respect to former employees of such institution in the same manner as the failed depository institution would have been required to provide but for its failure.

[Codified to 12 U.S.C. 1821 note]


[Source:  Section 451(a) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2382), effective December 19, 1991]

(b)  DEFINITIONS.--For purposes of this section--

(1)  SUCCESSOR.--An entity is a successor of a failed depository institution during any period if--

(A)  such entity holds substantially all of the assets or liabilities of such institution, and

(B)  such entity is--

(i)  the Federal Deposit Insurance Corporation,

(ii)  any bridge bank, or

(iii)  an entity that acquires such assets or liabilities from the Federal Deposit Insurance Corporation or a bridge bank.

(2)  FAILED DEPOSITORY INSTITUTION.--The term "failed depository institution" means any depository institution (as defined in section 3(c) of the Federal Deposit Insurance Act) for which a receiver has been appointed.

(3)  BRIDGE BANK.--The term "bridge bank" has the meaning given such term by section 3(i)(2) of the Federal Deposit Insurance Act.

[Codified to 12 U.S.C. 1821 note]

[Source:  Section 451(b) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2382), effective December 19, 1991; as amended by section 1606(g)(1) of title XVI of the Act of October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 4088), effective December 19, 1991]

(c)  NO PREMIUM COSTS IMPOSED ON FDIC.--Subsection (a) shall not be construed as requiring the Federal Deposit Insurance Corporation to incur, by reason of this section, any obligation for any premium under any group health plan referred to in such subsection.

[Codified to 12 U.S.C. 1821 note]

[Source:  Section 451(c) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2383), effective December 19, 1991]

(d)  EFFECTIVE DATE.--This section shall apply to plan years beginning on or after the date of the enactment of this Act, regardless of whether the qualifying event under section 603 of the Employee Retirement Income Security Act of 1974 occurred before, on, or after such date.

[Codified to 12 U.S.C. 1821 note]

[Source:  Section 451(d) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2383), effective December 19, 1991]


Subtitle J--Sense of the Congress Regarding the Credit Crisis

SEC. 456. CREDIT CRUNCH.

(a)  FINDINGS.--The Congress finds that--

(1)  during the past year and a half a credit crunch of crisis proportions has taken hold of the economy and grown increasingly severe, particularly for real estate;

(2)  to date the credit crisis has shown no sign of improvement with its effects being felt broadly throughout the Nation as business failures soar, financial institutions weaken, real estate values decline, and State and local property tax bases further erode;

(3)  approximately $200,000,000,000 of the nearly $400,000,000,000 in commercial real estate loans now held by commercial banks are coming due within the next 2 years;

(4)  banks for a variety of reasons, are reluctant to renew these maturing real estate loans;

(5)  both pension funds in the United States, with assets of nearly $2,000,000,000,000, and a stronger and more active secondary market for commercial real estate debt and equity could play a more significant role in providing liquidity and credit to the real estate and banking sectors of the economy;

(6)  many regulatory practices encourage banks to reduce their real estate lending without regard to long-term historical risk; and

(7)  the stability of real estate has suffered during the past decade first from tax rules that in 1981 stimulated excessive investment in real estate, and then in 1986 when rules were adopted that discourage capital investment in real estate, artificially eroding real estate values.

[Uncodified]

[Source:  Section 456(a) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2383), effective December 19, 1991]

(b)  SENSE OF THE CONGRESS.--It is the sense of the Congress that--

(1)  immediate and carefully-coordinated action should be taken by the Congress and the President to arrest the credit crisis referred to in subsection (a) and provide a healthy and efficient marketplace that works for owners, lenders, and investors; and

(2)  that efforts should be undertaken to explore measures that--

(A)  modernize and simplify the rules that apply to pension investment in real estate to remove unnecessary barriers to pension funds seeking to invest in real estate;

(B)  strengthen the secondary market for commercial real estate debt and equity by removing arbitrary obstacles to private forms of credit enhancement;

(C)  restore balance to the regulatory environment by considering the impact of risk-based capital standards on commercial, multifamily and single-family real estate; ending mark-to-market, liquidation-based, appraisals; encouraging loan renewals; and, fully communicating the supervisory policy to bank examiners in the field; and

(D)  rationalize the tax system for real estate owners and operators by modifying the passive loss rules and encouraging loan restructures.

[Uncodified]

[Source:  Section 456(b) of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2383), effective December 19,1991]


Subtitle M--Other Miscellaneous Provisions

SEC. 477. [Repealed]

[Source:  Section 477 of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2387), effective December 19, 1991; as repealed by section 2224(a) of title II of the Act of September 30, 1996 (Pub. L. No. 104--208; 110 Stat. 3009--415), effective September 30, 1996]

SEC. 478. SPECIAL INSURED DEPOSITS.

For purposes of the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.), the deposits of the Freedom National Bank of New York and the deposits of Community National Bank and Trust Company of New York that--

(1)  were deposited by a charitable organization as such term is defined by New York State law, or by a religious organization; and

(2)  were deposits of such bank on the date of its closure by the Office of the Comptroller of the Currency,

shall be fully insured notwithstanding any other provisions of the Federal Deposit Insurance Act.

[Uncodified]

[Source:  Section 478 of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2388), effective December 19, 1991]


Subtitle N--Severability

SEC. 481. SEVERABILITY.

If any provision of this Act, or any application of any provision of this Act to any person or circumstances, is held invalid, the remainder of the Act, and the application of any remaining provision of the Act to any other person or circumstance, shall not be affected by such holding.

[Codified to 12 U.S.C. 1811 note]

[Source:  Section 481 of title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2388), effective December 19, 1991]


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