IB 

Union Calendar No. 403 

109TH CONGRESS 

2D SESSION H. R. 5585 

[Report No. 109–648, Part I] 

To improve the netting process for financial contracts, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 12, 2006 

Mr. MCHENRY (for himself and Ms. WASSERMAN SCHULTZ) introduced the 

following bill; which was referred to the Committee on Financial Services, 

and in addition to the Committee on the Judiciary, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 

SEPTEMBER 12, 2006 

Reported from the Committee on Financial Services 

SEPTEMBER 12, 2006 

Referral to the Committee on the Judiciary extended for a period ending not 

later than September 22, 2006 

SEPTEMBER 22, 2006 

The Committee on the Judiciary discharged; committed to the Committee of 

the Whole House on the State of the Union and ordered to be printed 

A BILL 

To improve the netting process for financial contracts, and 

for other purposes. 


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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Financial Netting Im5 provements Act of 2006’’. 

6 SEC. 2. TREATMENT OF CERTAIN AGREEMENTS BY CON7 SERVATORS OR RECEIVERS OF DEPOSITORY 

8 INSTITUTIONS. 

9 (a) DEFINITION OF SECURITIES CONTRACT.— 

10 (1) FDIC-INSURED DEPOSITORY INSTITU11 TIONS.—Section 11(e)(8)(D)(ii) of the Federal De12 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(ii)) is 

13 amended— 

14 (A) in subclause (I)— 

15 (i) by striking ‘‘mortgage loan, or’’ 

16 and inserting ‘‘mortgage loan,’’; and 

17 (ii) by inserting before the semicolon 

18 ‘‘(whether or not such repurchase or re19 verse repurchase transaction is a ‘repur20 chase agreement’, as defined in clause 

21 (v))’’; 

22 (B) in subclause (IV)— 

23 (i) by inserting ‘‘(including by nova24 tion)’’ after ‘‘the guarantee’’; and 


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1 (ii) by inserting before the semicolon 

2 ‘‘(whether or not such settlement is in con3 nection with any agreement or transaction 

4 referred to in subclauses (I) through (XII) 

5 (other than subclause (II))’’; 

6 (C) in subclause (IX), by striking ‘‘or 

7 (VIII)’’ each place such term appears and in8 serting ‘‘(VIII), (IX), or (X)’’; 

9 (D) by redesignating subclauses (VI), 

10 (VII), (VIII), (IX), and (X) as subclauses 

11 (VIII), (IX), (X), (XI), and (XII), respectively; 

12 and 

13 (E) by inserting after subclause (V) the 

14 following new subparagraphs: 

15 ‘‘(VI) means any extension of 

16 credit for the clearance or settlement 

17 of securities transactions; 

18 ‘‘(VII) means any loan trans19 action coupled with a securities collar 

20 transaction, any prepaid securities 

21 forward transaction, or any total re22 turn swap transaction coupled with a 

23 securities sale transaction;’’. 


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1 (2) INSURED CREDIT UNIONS.—Section 

2 207(c)(8)(D)(ii) of the Federal Credit Union Act 

3 (12 U.S.C. 1787(c)(8)(D)(ii)) is amended— 

4 (A) in subclause (I)— 

5 (i) by striking ‘‘mortgage loan, or’’ 

6 and inserting ‘‘mortgage loan,’’; and 

7 (ii) by inserting before the semicolon 

8 ‘‘(whether or not such repurchase or re9 verse repurchase transaction is a ‘repur10 chase agreement’, as defined in clause 

11 (v))’’; 

12 (B) in subclause (IV)— 

13 (i) by inserting ‘‘(including by nova14 tion)’’ after ‘‘the guarantee’’; and 

15 (ii) by inserting before the semicolon 

16 ‘‘(whether or not such settlement is in con17 nection with any agreement or transaction 

18 referred to in subclauses (I) through (XII) 

19 (other than subclause (II))’’; 

20 (C) in subclause (IX), by striking ‘‘or 

21 (VIII)’’ each place such term appears and in22 serting ‘‘(VIII), (IX), or (X)’’; 

23 (D) by redesignating subclauses (VI), 

24 (VII), (VIII), (IX), and (X) as subclauses 


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1 (VIII), (IX), (X), (XI), and (XII), respectively; 

2 and 

3 (E) by inserting after subclause (V) the 

4 following new subparagraphs: 

5 ‘‘(VI) means any extension of 

6 credit for the clearance or settlement 

7 of securities transactions; 

8 ‘‘(VII) means any loan trans9 action coupled with a securities collar 

10 transaction, any prepaid securities 

11 forward transaction, or any total re12 turn swap transaction coupled with a 

13 securities sale transaction;’’. 

14 (b) DEFINITION OF FORWARD CONTRACT.— 

15 (1) FDIC-INSURED DEPOSITORY INSTITU16 TIONS.—Section 11(e)(8)(D)(iv)(I) of the Federal 

17 Deposit Insurance Act (12 U.S.C. 

18 1821(e)(8)(D)(iv)(I)) is amended by striking ‘‘trans19 action, reverse repurchase transaction’’ and inserting 

20 ‘‘or reverse repurchase transaction (whether or not 

21 such repurchase or reverse repurchase transaction is 

22 a ‘repurchase agreement’, as defined in clause (v))’’. 

23 (2) INSURED CREDIT UNIONS.—Section 

24 207(c)(8)(D)(iv)(I) of the Federal Credit Union Act 

25 (12 U.S.C. 1787(c)(8)(D)(iv)(I)) is amended by 


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1 striking ‘‘transaction, reverse repurchase trans2 action’’ and inserting ‘‘or reverse repurchase trans3 action (whether or not such repurchase or reverse 

4 repurchase transaction is a ‘repurchase agreement’, 

5 as defined in clause (v))’’. 

6 (c) DEFINITION OF SWAP AGREEMENT.— 

7 (1) FDIC-INSURED DEPOSITORY INSTITU8 TIONS.—Section 11(e)(8)(D)(vi) of the Federal De9 posit Insurance Act (12 U.S.C. 1821(e)(8)(D)(vi)) is 

10 amended— 

11 (A) in subclause (I)— 

12 (i) by striking ‘‘or precious metals’’ 

13 and inserting ‘‘, precious metals, or other 

14 commodity’’; and 

15 (ii) by striking ‘‘or a weather swap, 

16 weather derivative, or weather option’’ and 

17 inserting ‘‘weather swap, option, future, or 

18 forward agreement; an emissions swap, op19 tion, future, or forward agreement; or an 

20 inflation swap, option, future, or forward 

21 agreement’’; 

22 (B) in subclause (II)— 

23 (i) by inserting ‘‘or other derivatives’’ 

24 after ‘‘dealings in the swap’’; and 


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1 (ii) by striking ‘‘future, or option’’ 

2 and inserting ‘‘future, option, or spot 

3 transaction’’; and 

4 (C) by striking ‘‘the Securities Act of 

5 1933, the Securities Exchange Act of 1934, the 

6 Public Utility Holding Company Act of 1935, 

7 the Trust Indenture Act of 1939, the Invest8 ment Company Act of 1940, the Investment 

9 Advisers Act of 1940, the Securities Investor 

10 Protection Act of 1970, the Commodity Ex11 change Act, the Gramm-Leach-Bliley Act, and 

12 the Legal Certainty for Bank Products Act of 

13 2000’’ and inserting ‘‘the Gramm-Leach-Bliley 

14 Act, the Legal Certainty for Bank Products Act 

15 of 2000, the securities laws (as such term is de16 fined in section 3(a)(47) of the Securities Ex17 change Act of 1934) and the Commodity Ex18 change Act’’. 

19 (2) INSURED CREDIT UNIONS.—Section 

20 207(c)(8)(D)(vi) of the Federal Credit Union Act 

21 (12 U.S.C. 1787(c)(8)(D)(vi)) is amended— 

22 (A) in subclause (I)— 

23 (i) by striking ‘‘or precious metals’’ 

24 and inserting ‘‘, precious metals, or other 

25 commodity’’; and 


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1 (ii) by striking ‘‘or a weather swap, 

2 weather derivative, or weather option’’ and 

3 inserting ‘‘weather swap, option, future, or 

4 forward agreement; an emissions swap, op5 tion, future, or forward agreement; or an 

6 inflation swap, option, future, or forward 

7 agreement’’; 

8 (B) in subclause (II)— 

9 (i) by inserting ‘‘or other derivatives’’ 

10 after ‘‘dealings in the swap’’; and 

11 (ii) by striking ‘‘future, or option’’ 

12 and inserting ‘‘future, option, or spot 

13 transaction’’; and 

14 (C) by striking ‘‘the Securities Act of 

15 1933, the Securities Exchange Act of 1934, the 

16 Public Utility Holding Company Act of 1935, 

17 the Trust Indenture Act of 1939, the Invest18 ment Company Act of 1940, the Investment 

19 Advisers Act of 1940, the Securities Investor 

20 Protection Act of 1970, the Commodity Ex21 change Act, the Gramm-Leach-Bliley Act, and 

22 the Legal Certainty for Bank Products Act of 

23 2000’’ and inserting ‘‘the Gramm-Leach-Bliley 

24 Act, the Legal Certainty for Bank Products Act 

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1 fined in section 3(a)(47) of the Securities Ex2 change Act of 1934) and the Commodity Ex3 change Act’’. 

4 SEC. 3. CLARIFYING AMENDMENTS RELATING TO DEFINI5 TION OF PERSON. 

6 (a) FDIC-INSURED DEPOSITORY INSTITUTIONS

7 DEFINITION OF PERSON.—Section 11(e)(8)(D) of the 

8 Federal Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)) 

9 is amended by adding at the end the following: 

10 ‘‘(ix) PERSON.—The term ‘person’ includes 

11 any governmental entity in addition to any enti12 ty included in the definition of such term in 

13 section 1 of title 1, United States Code.’’. 

14 (b) INSURED CREDIT UNIONS DEFINITION OF PER15 SON.—Section 207(c)(8)(D) of the Federal Credit Union 

16 Act (12 U.S.C. 1787(c)(8)(D)) is amended by adding at 

17 the end the following: 

18 ‘‘(ix) PERSON.—The term ‘person’ in19 cludes any governmental entity in addition 

20 to any entity included in the definition of 

21 such term in section 1 of title 1, United 

22 States Code.’’. 


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1 SEC. 4. FEDERAL DEPOSIT INSURANCE CORPORATION IM2 PROVEMENT ACT OF 1991. 

3 (a) ENFORCEABILITY OF BILATERAL NETTING CON4 TRACTS.—Section 403 of the Federal Deposit Insurance 

5 Corporation Improvement Act of 1991 (12 U.S.C. 4403) 

6 is amended— 

7 (1) in each of subsections (a) and (f), by strik8 ing ‘‘paragraphs (8)(E), (8)(F), and (10)(B) of’’ 

9 each place such term appears; and 

10 (2) in subsection (a), by inserting ‘‘terminated, 

11 liquidated, accelerated, and’’ after ‘‘institutions shall 

12 be’’. 

13 (b) ENFORCEABILITY OF CLEARING ORGANIZATION

14 NETTING CONTRACTS.—Section 404 of the Federal De15 posit Insurance Corporation Improvement Act of 1991 (12 

16 U.S.C. 4404) is amended— 

17 (1) in each of subsections (a) and (h), by strik18 ing ‘‘paragraphs (8)(E), (8)(F), and (10)(B) of’’ 

19 each place such term appears; and 

20 (2) in subsection (a), by inserting ‘‘terminated, 

21 liquidated, accelerated, and’’ after ‘‘organization 

22 shall be’’. 

23 SEC. 5. CONFORMING AMENDMENTS. 

24 (a) CLARIFYING DEFINITIONS.—Title 11, United 

25 States Code, is amended— 

26 (1) in section 101— 


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1 (A) in paragraph (22)(A)— 

2 (i) by striking ‘‘(domestic or foreign)’’ 

3 after ‘‘an entity’’; and 

4 (ii) by inserting ‘‘(whether or not a 

5 ‘customer’, as defined in section 741)’’ 

6 after ‘‘custodian for a customer’’; 

7 (B) in paragraph (22A)— 

8 (i) by striking ‘‘on any day during the 

9 previous 15-month period’’ each place it 

10 appears and inserting ‘‘at such time or on 

11 any day during the 15-month period pre12 ceding the date of the filing of the peti13 tion’’; and 

14 (ii) by inserting ‘‘(aggregated across 

15 counterparties)’’ after ‘‘principal amount 

16 outstanding’’; 

17 (C) in paragraph (25)(A)— 

18 (i) by inserting ‘‘, as defined in sec19 tion 761’’ after ‘‘commodity contract’’; and 

20 (ii) by striking ‘‘repurchase trans21 action, reverse repurchase transaction,’’ 

22 and inserting ‘‘repurchase or reverse re23 purchase transaction (whether or not such 

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1 action is a ‘repurchase agreement’, as de2 fined in this section)’’; 

3 (D) in paragraph (53B)(A)— 

4 (i) in clause (i)— 

5 (I) in subclause (II), by striking 

6 ‘‘or precious metals’’ and inserting ‘‘, 

7 precious metals, or other commodity’’; 

8 (II) in subclause (VII), by strik9 ing ‘‘or’’ at the end; 

10 (III) in subclause (VIII), by 

11 striking ‘‘weather derivative, or weath12 er option’’ and inserting ‘‘option, fu13 ture, or forward agreement’’; and 

14 (IV) by adding at the end the fol15 lowing: 

16 ‘‘(IX) an emissions swap, option, 

17 future, or forward agreement; or 

18 ‘‘(X) an inflation swap, option, 

19 future, or forward agreement;’’; and 

20 (ii) in clause (ii)— 

21 (I) in subclause (I), by inserting 

22 ‘‘or other derivatives’’ after ‘‘dealings 

23 in the swap’’; and 


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1 (II) in subclause (II), by striking 

2 ‘‘future, or option’’ and inserting ‘‘fu3 ture, option, or spot transaction’’; and 

4 (E) in paragraph (53B)(B), by striking 

5 ‘‘the Securities Act of 1933, the Securities Ex6 change Act of 1934, the Public Utility Holding 

7 Company Act of 1935, the Trust Indenture Act 

8 of 1939, the Investment Company Act of 1940, 

9 the Investment Advisers Act of 1940, the Secu10 rities Investor Protection Act of 1970, the Com11 modity Exchange Act, the Gramm-Leach-Bliley 

12 Act, and the Legal Certainty for Bank Products 

13 Act of 2000’’ and inserting ‘‘the Gramm-Leach14 Bliley Act, the Legal Certainty for Bank Prod15 ucts Act of 2000, the securities laws (as such 

16 term is defined in section 3(a)(47) of the Secu17 rities Exchange Act of 1934) and the Com18 modity Exchange Act’’; 

19 (2) in section 362(b)— 

20 (A) by striking paragraphs (6) and (7) and 

21 inserting the following: 

22 ‘‘(6) under subsection (a) of this section, of the 

23 exercise by a commodity broker, forward contract 

24 merchant, stockbroker, financial institution, finan25 cial participant, or securities clearing agency of any 


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1 contractual right (as defined in section 555 or 556) 

2 under any security agreement or arrangement or 

3 other credit enhancement forming a part of or re4 lated to any commodity contract, forward contract 

5 or securities contract, or of any contractual right (as 

6 defined in section 555 or 556) to offset or net out 

7 any termination value, payment amount, or other 

8 transfer obligation arising under or in connection 

9 with 1 or more such contracts, including any master 

10 agreement for such contracts; 

11 ‘‘(7) under subsection (a) of this section, of the 

12 exercise by a repo participant or financial partici13 pant of any contractual right (as defined in section 

14 559) under any security agreement or arrangement 

15 or other credit enhancement forming a part of or re16 lated to any repurchase agreement, or of any con17 tractual right (as defined in section 559) to offset or 

18 net out any termination value, payment amount, or 

19 other transfer obligation arising under or in connec20 tion with 1 or more such agreements, including any 

21 master agreement for such agreements;’’; 

22 (B) by striking paragraph (17) and insert23 ing the following: 

24 ‘‘(17) under subsection (a) of this section, of 

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1 ticipant of any contractual right (as defined in sec2 tion 560) under any security agreement or arrange3 ment or other credit enhancement forming a part of 

4 or related to any swap agreement, or of any contrac5 tual right (as defined in section 560) to offset or net 

6 out any termination value, payment amount, or 

7 other transfer obligation arising under or in connec8 tion with 1 or more such agreements, including any 

9 master agreement for such agreements;’’; and 

10 (C) by striking paragraph (27) and insert11 ing the following: 

12 ‘‘(27) under subsection (a) of this section, of 

13 the exercise by a master netting agreement partici14 pant of any contractual right (as defined in section 

15 555, 556, 559, or 560) under any security agree16 ment or arrangement or other credit enhancement 

17 forming a part of or related to any master netting 

18 agreement, or of any contractual right (as defined in 

19 section 555, 556, 559, or 560) to offset or net out 

20 any termination value, payment amount, or other 

21 transfer obligation arising under or in connection 

22 with 1 or more such master netting agreements to 

23 the extent that such participant is eligible to exercise 

24 such rights under paragraph (6), (7), or (17) for 


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1 each individual contract covered by the master net2 ting agreement in issue; and’’; and 

3 (3) in section 741(7)(A)— 

4 (A) in clause (i)— 

5 (i) by striking ‘‘mortgage loan or’’ 

6 and inserting ‘‘mortgage loan,’’; and 

7 (ii) by inserting before the semicolon 

8 ‘‘(whether or not such repurchase or re9 verse repurchase transaction is a ‘repur10 chase agreement’, as defined in section 

11 101)’’; 

12 (B) in clause (iii)— 

13 (i) by inserting ‘‘(including by nova14 tion)’’ after ‘‘the guarantee’’; and 

15 (ii) by inserting before the semicolon 

16 ‘‘(whether or not such settlement is in con17 nection with any agreement or transaction 

18 referred to in clauses (i) through (xi))’’; 

19 (C) in clause (viii), by striking ‘‘or (vii)’’ 

20 each place it appears and inserting ‘‘(vii), (viii), 

21 or (ix)’’; 

22 (D) by redesignating clauses (v) through 

23 (ix) as clauses (vii) through (xi), respectively; 

24 and 


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1 (E) by inserting after clause (iv) the fol2 lowing: 

3 ‘‘(v) any extension of credit for 

4 the clearance or settlement of securi5 ties transactions; 

6 ‘‘(vi) any loan transaction cou7 pled with a securities collar trans8 action, any prepaid forward securities 

9 transaction, or any total return swap 

10 transaction coupled with a securities 

11 sale transaction;’’. 

12 (b) LIMITATION OF AVOIDANCE POWERS UNDER

13 MASTER NETTING AGREEMENT.—Section 546 of title 11, 

14 United States Code, is amended— 

15 (1) in subsection (e)— 

16 (A) by inserting ‘‘(or for the benefit of)’’ 

17 before ‘‘a commodity broker’’; and 

18 (B) by inserting ‘‘or that is a transfer 

19 made by or to (or for the benefit of) a com20 modity broker, forward contract merchant, 

21 stockbroker, financial institution, financial par22 ticipant, or securities clearing agency, in con23 nection with a securities contract, as defined in 

24 section 741(7), commodity contract, as defined 


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1 in section 761(4), or forward contract,’’ after 

2 ‘‘securities clearing agency,’’; 

3 (2) in subsection (f)— 

4 (A) by striking ‘‘that is a margin payment, 

5 as defined in section 741 or 761 of this title, 

6 or settlement payment, as defined in section 

7 741 of this title,’’; and 

8 (B) by inserting ‘‘(or for the benefit of)’’ 

9 before ‘‘a repo participant’’; 

10 (3) in subsection (g), by inserting ‘‘(or for the 

11 benefit of)’’ before ‘‘a swap participant’’; and 

12 (4) in subsection (j), by inserting ‘‘(or for the 

13 benefit of)’’ after ‘‘made by or to’’. 

14 (c) SIPC STAY.—Section 5(b)(2)(C)(iii) of the Secu15 rities Investor Protection Act of 1970 (15 U.S.C. 

16 78eee(b)(2)(C)(iii)) is amended— 

17 (1) by inserting ‘‘a derivatives clearing organi18 zation (as defined in the Commodity Exchange Act), 

19 a multilateral clearing organization (as defined in 

20 the Federal Deposit Insurance Corporation Improve21 ment Act of 1991),’’ after ‘‘rule or bylaw of’’; and 

22 (2) by striking ‘‘or a securities clearance agen23 cy, a right set forth in a bylaw of a clearing organi24 zation or contract market’’ and inserting ‘‘a securi25 ties clearing agency, a contract market designated 


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1 under the Commodity Exchange Act, a derivatives 

2 transaction execution facility registered under the 

3 Commodity Exchange Act, or a board of trade (as 

4 defined in the Commodity Exchange Act),’’. 

5 (d) SAVINGS CLAUSE.—Title IX of the Bankruptcy 

6 Abuse Prevention and Consumer Protection Act of 2005 

7 (Public Law 109–8, 119 Stat. 146) is amended by adding 

8 at the end the following: 

9 ‘‘SEC. 912. SAVINGS CLAUSE. 

10 ‘‘The meanings of terms used in this title are applica11 ble for the purposes of this title only, and shall not be 

12 construed or applied so as to challenge or affect the char13 acterization, definition, or treatment of any similar terms 

14 under any other statute, regulation, or rule, including the 

15 Gramm-Leach-Bliley Act, the Legal Certainty for Bank 

16 Products Act of 2000, the securities laws (as such term 

17 is defined in section 3(a)(47) of the Securities Exchange 

18 Act of 1934), and the Commodity Exchange Act.’’. 

19 SEC. 6. WALKAWAY CLAUSES. 

20 (a) FDIC-INSURED DEPOSITORY INSTITUTIONS.— 

21 Section 11(e)(8)(G) of the Federal Deposit Insurance Act 

22 (12 U.S.C. 1821(e)(8)(G)) is amended by striking clause 

23 (ii) and inserting the following new clauses: 

24 ‘‘(ii) LIMITED SUSPENSION OF CER25 TAIN OBLIGATIONS.—In the case of a 


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1 qualified financial contract referred to in 

2 clause (i), any payment or delivery obliga3 tions otherwise due from a party pursuant 

4 to the qualified financial contract shall be 

5 suspended from the time the receiver is ap6 pointed until the earlier of— 

7 ‘‘(I) the time such party receives 

8 notice that such contract has been 

9 transferred pursuant to subparagraph 

10 (A); or 

11 ‘‘(II) 5:00 p.m. (eastern time) on 

12 the business day following the date of 

13 the appointment of the receiver. 

14 ‘‘(iii) WALKAWAY CLAUSE DE15 FINED.—For purposes of this subpara16 graph, the term ‘walkaway clause’ means 

17 any provision in a qualified financial con18 tract that suspends, conditions, or extin19 guishes a payment obligation of a party, in 

20 whole or in part, or does not create a pay21 ment obligation of a party that would oth22 erwise exist, solely because of such party’s 

23 status as a nondefaulting party in connec24 tion with the insolvency of an insured de25 pository institution that is a party to the 


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1 contract or the appointment of or the exer2 cise of rights or powers by a conservator or 

3 receiver of such depository institution, and 

4 not as a result of a party’s exercise of any 

5 right to offset, setoff, or net obligations 

6 that exist under the contract, any other 

7 contract between those parties, or applica8 ble law.’’. 

9 (b) INSURED CREDIT UNIONS.—Section 

10 207(c)(8)(G) of the Federal Credit Union Act 12 U.S.C. 

11 1787(c)(8)(G)) is amended by striking clause (ii) and in12 serting the following new clauses: 

13 ‘‘(ii) LIMITED SUSPENSION OF CER14 TAIN OBLIGATIONS.—In the case of a 

15 qualified financial contract referred to in 

16 clause (i), any payment or delivery obliga17 tions otherwise due from a party pursuant 

18 to the qualified financial contract shall be 

19 suspended from the time the liquidating 

20 agent is appointed until the earlier of— 

21 ‘‘(I) the time such party receives 

22 notice that such contract has been 

23 transferred pursuant to subparagraph 

24 (A); or 


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1 ‘‘(II) 5:00 p.m. (eastern time) on 

2 the business day following the date of 

3 the appointment of the liquidating 

4 agent. 

5 ‘‘(iii) WALKAWAY CLAUSE DE6 FINED.—For purposes of this subpara7 graph, the term ‘walkaway clause’ means 

8 any provision in a qualified financial con9 tract that suspends, conditions, or extin10 guishes a payment obligation of a party, in 

11 whole or in part, or does not create a pay12 ment obligation of a party that would oth13 erwise exist, solely because of such party’s 

14 status as a nondefaulting party in connec15 tion with the insolvency of an insured cred16 it union or the appointment of or the exer17 cise of rights or powers by a conservator or 

18 liquidating agent of such credit union, and 

19 not as a result of a party’s exercise of any 

20 right to offset, setoff, or net obligations 

21 that exist under the contract, any other 

22 contract between those parties, or applica23 ble law.’’. 


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1 SEC. 7. COMPENSATION OF CHAPTER 7 TRUSTEES; CHAP2 TER 7 FILING FEES. 

3 (a) AMENDMENTS TO TITLE 11 OF THE UNITED

4 STATES CODE.— 

5 (1) COMPENSATION OF CHAPTER 7 TRUST6 EES.—Section 330(b)(1) of title 11, United States 

7 Code, is amended by striking ‘‘$45’’ and inserting 

8 ‘‘$100’’. 

9 (2) RELATED AMENDMENTS.—Section 330(b) 

10 of title 11, United States Code, is amended— 

11 (A) by striking ‘‘(1)’’, and 

12 (B) by striking paragraph (2). 

13 (b) AMENDMENTS TO TITLE 28 OF THE UNITED

14 STATES CODE.— 

15 (1) CHAPTER 7 FILING FEE.—Section 

16 1930(a)(1)(A) of title 28 of the United States Code, 

17 as amended by section 10101 of Public Law 109– 

18 171, is amended by striking ‘‘$245’’ and inserting 

19 ‘‘$300’’, and 

20 (2) UNITED STATES TRUSTEE FUND.—Section 

21 589a(b)(1)(A) of title 28, United States Code, is 

22 amended by striking ‘‘40.46’’ and inserting ‘‘29.67’’. 

23 (c) RELATED AMENDMENT REGARDING COLLEC24 TIONS AND DEPOSITS OF MISCELLANEOUS BANKRUPTCY

25 FEES.—Section 406(b) of the Judiciary Appropriations 


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1 Act, 1990 (28 U.S.C. 1931 note) is amended by striking 

2 ‘‘28.87’’ and inserting ‘‘21.17’’. 

3 (d) CONFORMING AMENDMENT.—Section 10101(a) 

4 of Public Law 109–171 is amended by striking paragraph 

5 (2). 

6 (e) EFFECTIVE DATE; APPLICATION OF AMEND7 MENTS.—The amendments made by this section shall take 

8 effect 60 days after the date of the enactment of this Act 

9 and shall not apply with respect to cases commenced 

10 under title 11 of the United States Code before the date 

11 such amendments take effect. 

12 SEC. 8. SCOPE OF APPLICATION. 

13 Subject to section 7(e), the amendments made by this 

14 Act shall not apply to any cases commenced under title 

15 11, United States Code, or appointments made under any 

16 Federal or State law, before the date of the enactment 

17 of this Act. 


ccoleman on PROD1PC71 with BILLS

ccoleman on PROD1PC71 with BILLS
Union Calendar No. 403 

109TH CONGRESS 

2D SESSION H. R. 5585 

[Report No. 109

–648, Part I] 

A BILL 

To improve the netting process for financial 

contracts, and for other purposes. 

SEPTEMBER 22, 2006 

The Committee on the Judiciary discharged; committed 

the Union and ordered to be printed to the Committee of the Whole House on the State of 


ccoleman on PROD1PC71 with BILLS