I 

111TH CONGRESS 

1ST SESSION H. R. 2351 

To amend the Federal Credit Union Act to increase the borrowing authority 

of the National Credit Union Administration, establish a National Credit 

Union Share Insurance Fund restoration plan period, assess insured 

credit unions for the costs associated with the corporate credit union 

stabilization effort on an anticyclical basis, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 12, 2009 

Mr. KANJORSKI (for himself, Mr. GUTIERREZ, Mr. ROYCE, Mr. SCOTT of 

Georgia, and Mr. LATOURETTE) introduced the following bill; which was 

referred to the Committee on Financial Services 

A BILL 

To amend the Federal Credit Union Act to increase the 

borrowing authority of the National Credit Union Administration, establish a National Credit Union Share Insurance Fund restoration plan period, assess insured credit 

unions for the costs associated with the corporate credit 

union stabilization effort on an anticyclical basis, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Credit Union Share 

3 Insurance Stabilization Act’’. 

4 SEC. 2. NCUA BORROWING AUTHORITY. 

5 (a) NCUA BORROWING AUTHORITY.—Section 

6 203(d)(1) of the Federal Credit Union Act (12 U.S.C. 

7 1783(d)(1)) is amended to read as follows: 

8 ‘‘(1) If, in the judgment of the Board, a loan 

9 to the insurance fund, or to the stabilization fund 

10 described in section 217, is required at any time for 

11 purposes of this title, the Secretary of the Treasury 

12 shall make the loan, but loans under this paragraph 

13 shall not exceed in the aggregate $6,000,000,000 

14 outstanding at any one time. Except as otherwise 

15 provided in this subsection, section 217, and in sub16 section (e) of this section, each loan under this para17 graph shall be made on such terms as may be fixed 

18 by agreement between the Board and the Secretary 

19 of the Treasury.’’. 

20 (b) TEMPORARY INCREASES OF BORROWING AU21 THORITY FOR NCUA.—Section 203(d) of the Federal 

22 Credit Union Act (12 U.S.C. 1783(d)) is amended by add23 ing at the end the following: 

24 ‘‘(4) TEMPORARY INCREASES AUTHORIZED.— 

25 ‘‘(A) RECOMMENDATIONS FOR IN26 CREASE.—During the period beginning on the 


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1 date of enactment of this paragraph and ending 

2 on December 31, 2010, if, upon the written rec3 ommendation of the Board (upon a vote of not 

4 less than two-thirds of the members of the 

5 Board) and the Board of Governors of the Fed6 eral Reserve System (upon a vote of not less 

7 than two-thirds of the members of such Board), 

8 the Secretary of the Treasury (in consultation 

9 with the President) determines that additional 

10 amounts above the $6,000,000,000 amount 

11 specified in paragraph (1) are necessary, such 

12 amount shall be increased to the amount so de13 termined to be necessary, not to exceed 

14 $30,000,000,000. 

15 ‘‘(B) REPORT REQUIRED.—If the bor16 rowing authority of the Board is increased 

17 above $6,000,000,000 pursuant to subpara18 graph (A), the Board shall promptly submit a 

19 report to the Committee on Banking, Housing, 

20 and Urban Affairs of the Senate and the Com21 mittee on Financial Services of the House of 

22 Representatives describing the reasons and need 

23 for the additional borrowing authority and its 

24 intended uses.’’. 


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1 SEC. 3. ESTABLISHMENT OF A NATIONAL CREDIT UNION 

2 SHARE INSURANCE FUND RESTORATION 

3 PLAN PERIOD. 

4 Section 202(c)(2) of the Federal Credit Union Act 

5 (12 U.S.C. 1782(c)(2)) is amended by adding at the end 

6 the following new subparagraph: 

7 ‘‘(D) FUND RESTORATION PLANS.— 

8 ‘‘(i) IN GENERAL.—Whenever— 

9 ‘‘(I) the Board projects that the 

10 equity ratio of the Fund will, within 6 

11 months of such determination, fall 

12 below the minimum amount specified 

13 in subparagraph (C); or 

14 ‘‘(II) the equity ratio of the Fund 

15 actually falls below the minimum 

16 amount specified in subparagraph (C) 

17 without any determination under sub18 clause (I) having been made, 

19 the Board shall establish and implement a 

20 restoration plan within 90 days that meets 

21 the requirements of clause (ii) and such 

22 other conditions as the Board determines 

23 to be appropriate. 

24 ‘‘(ii) REQUIREMENTS OF RESTORA25 TION PLAN.—A restoration plan meets the 

26 requirements of this clause if the plan proVerDate Nov 24 2008 22:37 May 13, 2009 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2351.IH H2351

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1 vides that the equity ratio of the Fund will 

2 meet or exceed the minimum amount speci3 fied in subparagraph (C) before the end of 

4 the 8-year period beginning upon the im5 plementation of the plan (or such longer 

6 period as the Board may determine to be 

7 necessary due to extraordinary cir8 cumstances). 

9 ‘‘(iii) TRANSPARENCY.—Not more 

10 than 30 days after the Board establishes 

11 and implements a restoration plan under 

12 clause (i), the Board shall publish in the 

13 Federal Register a detailed analysis of the 

14 factors considered and the basis for the ac15 tions taken with regard to the plan.’’. 

16 SEC. 4. TEMPORARY CORPORATE CREDIT UNION STA17 BILIZATION FUND. 

18 (a) ESTABLISHMENT OF TEMPORARY CORPORATE

19 CREDIT UNION STABILIZATION FUND.—Title II of the 

20 Federal Credit Union Act (12 U.S.C. 1781 et seq.) is 

21 amended by adding at the end the following new section: 

22 ‘‘SEC. 217. TEMPORARY CORPORATE CREDIT UNION STA23 BILIZATION FUND. 

24 ‘‘(a) ESTABLISHMENT OF STABILIZATION FUND.— 

25 There is hereby created in the Treasury of the United 


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1 States a fund to be known as the ‘Temporary Corporate 

2 Credit Union Stabilization Fund’ (and referred to here3 after in this section as the ‘Stabilization Fund’) to be ad4 ministered by the Board as prescribed by section 209. 

5 ‘‘(b) EXPENDITURES FROM STABILIZATION FUND.— 

6 Money in the Stabilization Fund shall be available upon 

7 requisition by the Board, without fiscal year limitation, for 

8 making payments for the purposes described in section 

9 203(a), subject to the following additional limitations: 

10 ‘‘(1) All payments other than administrative 

11 payments shall be connected to the conservatorship, 

12 liquidation, or threatened conservatorship or liquida13 tion of a corporate credit union. 

14 ‘‘(2) Prior to authorizing each payment, the 

15 Board shall— 

16 ‘‘(A) certify that, absent the existence of 

17 the Stabilization Fund, the Board would have 

18 made the identical payment out of the National 

19 Credit Union Share Insurance Fund; and 

20 ‘‘(B) report each such certification to the 

21 Committee on Banking, Housing, and Urban 

22 Affairs of the Senate and the Committee on Fi23 nancial Services of the House of Representa24 tives. 

25 ‘‘(c) AUTHORITY TO BORROW.— 


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1 ‘‘(1) IN GENERAL.—The Stabilization Fund is 

2 authorized to borrow from the Secretary of the 

3 Treasury from time-to-time as deemed necessary by 

4 the Board. The maximum outstanding amount of all 

5 borrowings from the Treasury by the Stabilization 

6 Fund and the National Credit Union Share Insur7 ance Fund, combined, is limited to the amount pro8 vided for in section 203(d)(1), including any author9 ized increases in that amount. 

10 ‘‘(2) REPAYMENT OF ADVANCES.— 

11 ‘‘(A) IN GENERAL.—The advances made 

12 under this section shall be repaid by the Sta13 bilization Fund, and interest on such advances 

14 shall be paid, to the General Fund of the 

15 Treasury. 

16 ‘‘(B) VARIABLE RATE OF INTEREST.—The 

17 Secretary of the Treasury shall make the first 

18 rate determination at the time of the first ad19 vance under this section and shall reset the rate 

20 again for all advances on each anniversary of 

21 the first advance. The interest rate shall be 

22 equal to the average market yield on out23 standing marketable obligations of the United 

24 States with remaining periods to maturity equal 

25 to 12 months. 


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1 ‘‘(3) REPAYMENT SCHEDULE.—The Stabiliza2 tion Fund shall repay the advances on a first-in, 

3 first-out basis, with interest on the amount repaid, 

4 at times and dates determined by the Board at its 

5 discretion. All advances shall be repaid not later 

6 than the date of the seventh anniversary of the first 

7 advance to the Stabilization Fund, unless the Board 

8 extends this final repayment date. The Board shall 

9 obtain the concurrence of the Secretary of the 

10 Treasury on any proposed extension, including the 

11 terms and conditions of the extended repayment. 

12 ‘‘(d) ASSESSMENT TO REPAY ADVANCES.—At least 

13 90 days prior to each repayment described in subsection 

14 (c)(3), the Board shall set the amount of the upcoming 

15 repayment and determine if the Stabilization Fund will 

16 have sufficient funds to make the repayment. If the Sta17 bilization Fund might not have sufficient funds to make 

18 the repayment, the Board shall assess each federally in19 sured credit union a special premium due and payable 

20 within 60 days in an aggregate amount calculated to en21 sure the Stabilization Fund is able to make the repay22 ment. The premium charge for each credit union shall be 

23 stated as a percentage of its insured shares as represented 

24 on the credit union’s previous call report. The percentage 

25 shall be identical for each credit union. Any credit union 


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1 that fails to make timely payment of the special premium 

2 is subject to the procedures and penalties described under 

3 subsections (d), (e), and (f) of section 202. 

4 ‘‘(e) DISTRIBUTIONS FROM INSURANCE FUND.—At 

5 the end of any calendar year in which the Stabilization 

6 Fund has an outstanding advance from the Treasury, the 

7 Insurance Fund is prohibited from making the distribu8 tion to insured credit unions described in section 

9 202(c)(3). In lieu of the distribution described in that sec10 tion, the Insurance Fund shall make a distribution to the 

11 Stabilization Fund of the maximum amount possible that 

12 does not reduce the Insurance Fund’s equity ratio below 

13 the normal operating level and does not reduce the Insur14 ance Fund’s available assets ratio below 1.0 percent. 

15 ‘‘(f) INVESTMENT OF STABILIZATION FUND AS16 SETS.—The Board may request the Secretary of the 

17 Treasury to invest such portion of the Stabilization Fund 

18 as is not, in the Board’s judgment, required to meet the 

19 current needs of the Stabilization Fund. Such investments 

20 shall be made by the Secretary of the Treasury in public 

21 debt securities, with maturities suitable to the needs of 

22 the Stabilization Fund, as determined by the Board, and 

23 bearing interest at a rate determined by the Secretary of 

24 the Treasury, taking into consideration current market 


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1 yields on outstanding marketable obligations of the United 

2 States of comparable maturity. 

3 ‘‘(g) REPORTS.—The Board shall submit an annual 

4 report to Congress on the financial condition and the re5 sults of the operation of the Stabilization Fund. The re6 port is due to Congress within 30 days after each anniver7 sary of the first advance made under subsection (c)(1). 

8 Because the Stabilization Fund will use advances from the 

9 Treasury to meet corporate stabilization costs with full re10 payment of borrowings to Treasury at the Board’s discre11 tion not due until 7 years from the initial advance, to the 

12 extent operating expenses of the Stabilization Fund exceed 

13 income, the financial condition of the Stabilization Fund 

14 may reflect a deficit. With planned and required future 

15 repayments, the Board shall resolve all deficits prior to 

16 termination of the Stabilization Fund. 

17 ‘‘(h) CLOSING OF THE STABILIZATION FUND.—With18 in 90 days following the seventh anniversary of the initial 

19 Stabilization Fund advance, or earlier at the Board’s dis20 cretion, the Board shall distribute any funds, property, or 

21 other assets remaining in the Stabilization Fund to the 

22 Insurance Fund and shall close the Stabilization Fund. 

23 If the Board extends the final repayment date as per24 mitted under subsection (c)(3), the mandatory date for 


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1 closing the Stabilization Fund shall be extended by the 

2 same number of days.’’. 

3 (b) CONFORMING AMENDMENT.—Section 

4 202(c)(3)(A) of the Federal Credit Union Act (12 U.S.C. 

5 1782(c)(3)(A)) is amended by inserting ‘‘, subject to the 

6 requirements of section 217(e),’’ after ‘‘The Board shall’’. 

Æ 


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