Commercial Mortgage Capital Availability Act of 1993

Summary: Commercial Mortgage Capital Availability Act of 1993 - Sets forth a regulatory scheme under which qualified insured depository institutions meeting prescribed reserve and capital requirements may execute mortgage loan transfers with a recourse arrangement. 
Amends the Securities Exchange Act of 1934 to modify the definition of "mortgage related security" to include notes directly secured by a first lien on real estate with commercial structures located upon it (thus bringing such securities within the purview of the Act). 
Directs the Secretary of Labor to exempt commercial mortgage related securities transactions from:  (1) certain restrictions of the Employee Retirement Income Security Act of 1974; and (2) certain taxes imposed under the Internal Revenue Code. 
Mandates that securities relying on the provisions of this Act comply with all Federal securities laws relating to disclosure to investors, registrations, reporting and anti-fraud provisions. 
Requires insured depository institutions to maintain the minimum adequate capital prescribed by regulatory banking agencies when executing mortgage backed securities transactions.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Commercial Mortgage Capital 
Availability Act of 1993''.

SEC. 2. INSURED DEPOSITORY INSTITUTION CAPITAL REQUIREMENTS FOR 
              TRANSFERS OF MORTGAGE LOANS.

    (a) Accounting Principles.--The accounting principles applicable to 
the transfer of a mortgage loan with recourse contained in reports or 
statements required to be filed with Federal banking agencies by a 
qualified insured depository institution shall be consistent with 
generally accepted accounting principles.
    (b) Capital and Reserve Requirements.--With respect to the transfer 
of a mortgage loan with recourse that is a sale under generally 
accepted accounting principles, each qualified insured depository 
institution shall--
            (1) establish and maintain a reserve equal to an amount 
        sufficient to meet the reasonable estimated liability of the 
        institution under the recourse arrangement; and
            (2) treat as an asset (for purposes of applicable capital 
        standards and other capital measures, including risk-based 
        capital requirements) only the maximum amount at risk under the 
        recourse arrangement.
    (c) Qualified Institutions Defined.--An insured depository 
institution is a qualified insured depository institution for purposes 
of this section if, without regard to the accounting principles or 
capital requirements referred to in subsections (a) and (b), the 
institution is--
            (1) well capitalized; or
            (2) with the approval, by regulation or order, of the 
        appropriate Federal banking agency, adequately capitalized.
    (d) Aggregate Amount of Recourse.--The total outstanding amount at 
risk with respect to transfers of mortgage loans under subsections (a) 
and (b) (together with the amount at risk under any provisions of law 
substantially similar to subsections (a) and (b)) shall not exceed--
            (1) the amount which is equal to 15 percent of the risk-
        based capital of the institution; or
            (2) such greater amount, as established by the appropriate 
        Federal banking agency by regulation or order.
    (e) Institutions That Cease To Be Qualified or Exceed Aggregate 
Limits.--If an insured depository institution ceases to be a qualified 
insured depository institution or exceeds the limits under subsection 
(d), this section shall remain applicable to any transfer of mortgage 
loans that occurred at a time when the institution was qualified and 
had not exceeded such limit.
    (f) Prompt Corrective Action not Affected.--The capital of an 
insured depository institution shall be computed without regard to this 
section in determining whether the institution is less than well 
capitalized.
    (g) Regulations Required.--Before the end of the 180-day period 
beginning on the date of the enactment of this Act, each appropriate 
Federal banking agency shall prescribe final regulations implementing 
this section.
    (h) Alternative System Permitted.--
            (1) In general.--At the discretion of the appropriate 
        Federal banking agency, this section shall not apply if the 
        regulations of the agency provide that the aggregate amount of 
        capital and reserves required with respect to the transfer of 
        mortgage loans with recourse does not exceed the aggregate 
        amount of capital and reserves that would be required under 
        subsection (b).
            (2) Existing transactions not affected.--Notwithstanding 
        paragraph (1), this section shall remain in effect with respect 
        to transfers of mortgage loans with recourse by qualified 
        insured depository institutions occurring before the effective 
        date of regulations referred to in paragraph (1).
    (i) Definitions.--The following definitions apply for purposes of 
this section:
            (1) Adequately capitalized.--The term ``adequately 
        capitalized'' has the same meaning as in section 38(b) of the 
        Federal Deposit Insurance Act.
            (2) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency'' has the same meaning as 
        in section 3 of the Federal Deposit Insurance Act.
            (3) Capital standards.--The term ``capital standards'' has 
        the same meaning as in section 38(c) of the Federal Deposit 
        Insurance Act.
            (4) Federal banking agencies.--The term ``Federal banking 
        agencies'' has the same meaning as in section 3 of the Federal 
        Deposit Insurance Act.
            (5) Insured depository institution.--The term ``insured 
        depository institution'' has the same meaning as in section 3 
        of the Federal Deposit Insurance Act.
            (6) Other capital measures.--The term ``other capital 
        measures'' has the same meaning as in section 38(c) of the 
        Federal Deposit Insurance Act.
            (7) Recourse.--The term ``recourse'' has the meaning given 
        to such term under generally accepted accounting principles.
            (8) Mortgage loan.--The term ``mortgage loan'' means any--
                    (A) note or certificate of interest or 
                participation in a note (including any rights designed 
                to assure servicing of, or the timeliness of receipt by 
                the holders of such notes, certificates, or 
                participation of amounts payable under such notes, 
                certificates or participation) that is principally 
                secured by an interest in real property; or
                    (B) any security (within the meaning of section 8 
                of the Securities Exchange Act of 1934) that is secured 
                by one or more notes described in subparagraph (A) or 
                certificates of interest or participation in such notes 
                (with or without recourse to issuers thereof) and that, 
                by its terms, provides for payments of principal in 
                relation to payments, or reasonable projections of 
                payments, on notes described in subparagraph (A) or 
                certificates of interest or participation in such 
                notes.
            (9) Well capitalized.--The term ``well capitalized'' has 
        the same meaning as in section 38(b) of the Federal Deposit 
        Insurance Act.

SEC. 3. AMENDMENT TO DEFINITION OF MORTGAGE RELATED SECURITY.

    Section 3(a)(41)(A)(i) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)(41)(A)(i)) is amended by inserting before the semicolon 
``, or on 1 or more parcels of real estate upon which is located one or 
more commercial structures''.

SEC. 4. AUTHORITY TO EXEMPT COMMERCIAL MORTGAGE RELATED SECURITIES 
              TRANSACTIONS FROM PROHIBITED TRANSACTION RULES.

    The Secretary of Labor, in consultation with the Secretary of the 
Treasury, shall exempt, either unconditionally or on stated terms and 
conditions, transactions involving commercial mortgage related 
securities (as such term is defined in section 3(a)(41) of the 
Securities Exchange Act of 1934, as amended by section 3 of this Act) 
from--
            (1) the restrictions of sections 406(a) and 407(a) of the 
        Employee Retirement Income Security Act of 1974; and
            (2) the taxes imposed under section 4975 of the Internal 
        Revenue Code of 1986.

SEC. 5. PROVISIONS TO SAFEGUARD THE INTEGRITY OF THE SECURITIZATION 
              PROCESS, AND THE SAFETY AND SOUNDNESS OF FEDERALLY 
              INSURED INSTITUTIONS.

    (a) Compliance With Securities Regulations.--Any security relying 
on the provisions of this Act shall comply with all rules and 
regulations of Federal securities laws applicable thereto, as 
determined taking into account the provisions of this Act, including 
all provisions relating to required disclosure to investors, 
registrations, reporting and compliance, and all anti-fraud provisions.
    (b) Treatment of Bank Issued or Purchased Mortgage Backed 
Securities for Purposes of Minimum Capital Requirements.--
            (1) Mortgages held by bank to back securities.--If an issue 
        of securities backed by mortgage loans represents a liability 
        on the balance sheet of an insured depository institution and 
        the assets backing such obligation represent assets on the 
        balance sheet of such institution, the institution shall 
        maintain minimum adequate capital with regard to such assets as 
        prescribed by all applicable rules and regulations of the 
        banking agencies with supervisory and examination authority 
        over such institution, as determined taking into account the 
        provisions of this Act.
            (2) Securities held by bank.--If an insured depository 
        institution purchases a mortgage-related security to which the 
        provisions of this Act apply, the institution shall maintain 
        minimum adequate capital with respect to such security and all 
        other assets as prescribed by all applicable rules and 
        regulations of the banking agencies with supervisory and 
        examination authority over such institution, as determined 
        taking into account the provisions of this Act.