Commercial Mortgage Capital Availability Act of 1993

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 Criteria.--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) 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 during the time that the institution was qualified 
and did not exceed 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 adequately 
capitalized, undercapitalized, significantly undercapitalized, or 
critically undercapitalized under section 38 of the Federal Deposit 
Insurance Act.
    (g) Regulations Required.--Not later than 180 days after the date 
of the enactment of this Act, each appropriate Federal banking agency 
shall promulgate final regulations implementing this section.
    (h) Alternative System Permitted.--
            (1) In general.--This section shall not apply if, at the 
        discretion of the appropriate Federal banking agency, 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.--For purposes of this section--
            (1) the term ``adequately capitalized'' has the same 
        meaning as in section 28(b) of the Federal Deposit Insurance 
        Act;
            (2) the term ``appropriate Federal banking agency'' has the 
        same meaning as in section 3 of the Federal Deposit Insurance 
        Act;
            (3) the term ``capital standards'' has the same meaning as 
        in section 38(c) of the Federal Deposit Insurance Act;
            (4) the term ``Federal banking agencies'' has the same 
        meaning as in section 3 of the Federal Deposit Insurance Act;
            (5) the term ``insured depository institution'' has the 
        same meaning as in section 3 of the Federal Deposit Insurance 
        Act;
            (6) the term ``other capital measures'' has the same 
        meaning as in section 38(c) of the Federal Deposit Insurance 
        Act;
            (7) the term ``recourse'' has the meaning given to such 
        term under generally accepted accounting principles;
            (8) the term ``mortgage loan'' means--
                    (A) 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) a security (as such term is defined in 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; and
            (9) 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 one 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.

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 . 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.