II 

112TH CONGRESS 

2D SESSION S. 3709 

To require a Government Accountability Office examination of transactions 

between large financial institutions and the Federal Government, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 21, 2012 

Mr. VITTER (for himself and Mr. BROWN of Ohio) introduced the following 

bill 

A BILL 

To require a Government Accountability Office examination 

of transactions between large financial institutions and 

the Federal Government, 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, 

3 SECTION 1. GOVERNMENT ACCOUNTABILITY OFFICE EXAM4 INATION OF TRANSACTIONS BETWEEN 

5 LARGE FINANCIAL INSTITUTIONS AND THE 

6 FEDERAL GOVERNMENT. 

7 (a) DEFINITIONS.—For purposes of this Act— 


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1 (1) the term ‘‘covered institution’’ means any 

2 financial company having more than 

3 $500,000,000,000 in consolidated assets; and 

4 (2) the term ‘‘economic benefit’’ means the dif5 ference between actual loans terms offered, debt or 

6 equity prices, or asset values and a reasonable esti7 mate of what such terms, prices, or values might 

8 have been, as determined by examining actual values 

9 of comparable transaction in the private markets or 

10 by estimating the values of comparable transactions 

11 priced to properly reflect associated risk. 

12 (b) GAO EXAMINATION.—The Comptroller General 

13 of the United States (in this section referred to as the 

14 ‘‘Comptroller’’) shall conduct an examination of covered 

15 institutions, such as— 

16 (1) the favorable pricing of the debt of such in17 stitutions, relative to their risk profile resulting from 

18 the perception that such institutions will receive 

19 Government support in the event of any financial 

20 stress; 

21 (2) any favorable funding or economic treat22 ment resulting from an increase in the credit rating 

23 for covered institutions, as a result of express, im24 plied, or perceived Government support; 


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1 (3) any economic benefit to covered institutions 

2 resulting from the ownership of, or affiliation with, 

3 an insured depository institution; 

4 (4) any economic benefit resulting from the sta5 tus of covered institutions as a bank holding com6 pany, including access to Federal deposit insurance 

7 and the discount window of the Board of Governors 

8 of the Federal Reserve System before the date of en9 actment of this Act; 

10 (5) any economic benefit received through ex11 traordinary Government actions taken, such as— 

12 (A) actions by the Department of the 

13 Treasury— 

14 (i) under the Emergency Economic 

15 Stabilization Act, such as— 

16 (I) asset purchases by the United 

17 States Government; 

18 (II) capital injections from the 

19 United States Government; or 

20 (III) housing programs; 

21 (ii) by the purchase of the mortgage 

22 backed securities of the Federal National 

23 Mortgage Association and the Federal 

24 Home Loan Mortgage Corporation (in this 

25 Act referred to as ‘‘government-sponsored 


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1 enterprises’’), in order to lower interest 

2 rates, and the value of such securities in 

3 the absence of such purchases; or 

4 (iii) by the guarantee of money mar5 ket mutual funds, as compared to the 

6 value of such funds in the absence of such 

7 guarantees; 

8 (B) actions by the Board of Governors of 

9 the Federal Reserve System prior to the date of 

10 enactment of this Act, such as— 

11 (i) reducing the Federal funds rate; 

12 (ii) lowering the interest rate charged 

13 to banks for loans through its discount 

14 window and expanding the list of securities 

15 that banks could post in exchange for 

16 loans through the discount window, as 

17 compared to loans using terms and collat18 eral under normal discount window lending 

19 conditions; 

20 (iii) providing loans to financial insti21 tutions through the Term Auction Facility; 

22 and 

23 (iv) assistance through programs 

24 under section 13(3) of the Federal Reserve 


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1 Act prior to the date of enactment of this 

2 Act, such as— 

3 (I) lending through the Commer4 cial Paper Funding Facility; 

5 (II) securities lending to primary 

6 dealers through the Primary Dealer 

7 Credit Facility and the Term Securi8 ties Lending Facility; 

9 (III) lending to institutions 

10 through the Asset-Backed Commercial 

11 Paper Money Market Mutual Fund 

12 Liquidity Facility; 

13 (IV) lending to institutions 

14 through the Term Asset-Backed Secu15 rities Loan Facility; 

16 (V) purchasing assets through 

17 the Maiden Lane facility; or 

18 (VI) any other asset purchases, 

19 including mortgage-backed securities 

20 backed by the government-sponsored 

21 enterprises, and debt issued by those 

22 enterprises; and 

23 (C) actions by the Federal Deposit Insur24 ance Corporation, such as— 


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1 (i) guaranteeing debt or deposits 

2 through the Temporary Liquidity Guar3 antee Program; 

4 (ii) guaranteeing deposits through the 

5 Deposit Insurance Fund; or 

6 (iii) pricing of assessments related to 

7 any such guarantees; and 

8 (6) any extraordinary assistance provided to 

9 American Insurance Group, but ultimately received 

10 by one of the covered institutions; and 

11 (7) any Government actions that resulted in the 

12 payment or nonpayment of credit default swap con13 tracts entered into by a covered institution. 

14 SEC. 2. REPORT TO CONGRESS. 

15 Not later than 1 year after the date of enactment 

16 of this Act, the Comptroller shall submit a report to Con17 gress detailing the findings of the Comptroller in the study 

18 conducted under this Act. Such report shall be made elec19 tronically available to the public. 

Æ 


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