II 

111TH CONGRESS 

2D SESSION S. 3052 

To address the establishment and maintenance of the Systemic Resolution 

Fund of the Federal Deposit Insurance Corporation, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 1, 2010 

Mr. MENENDEZ introduced the following bill; which was read twice and 

referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To address the establishment and maintenance of the Systemic Resolution Fund of the Federal Deposit Insurance 

Corporation, 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. SHORT TITLE. 

4 This Act may be cited as the ‘‘Ending Taxpayer Bail5 outs by Making Wall Street Pay Act of 2010’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act— 

8 (1) the term ‘‘Corporation’’ means the Federal 

9 Deposit Insurance Corporation; 


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1 (2) the term ‘‘Fund’’ means the Systemic Reso2 lution Fund established under this Act; 

3 (3) the terms ‘‘financial company’’ and ‘‘cov4 ered financial company’’ have the same meanings as 

5 in section 2 of the Restoring American Financial 

6 Stability Act of 2010; and 

7 (4) the term ‘‘off-balance-sheet activity’’ in8 cludes— 

9 (A) any contractual arrangement to which 

10 an unconsolidated entity is a party, under 

11 which the registrant has— 

12 (i) any obligation under certain guar13 antee contracts; 

14 (ii) a retained or contingent interest 

15 in assets transferred to an unconsolidated 

16 entity or similar arrangement that serves 

17 as credit, liquidity, or market risk support 

18 to that entity for such assets; 

19 (iii) any obligation under certain de20 rivative instruments; and 

21 (iv) any obligation under a material 

22 variable interest held by the registrant in 

23 an unconsolidated entity that provides fi24 nancing, liquidity, market risk, or credit 

25 risk support to the registrant, or engages 


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1 in leasing, hedging, or research and devel2 opment services with the registrant; and 

3 (B) transactions that are or involve— 

4 (i) direct credit substitutes, in which a 

5 bank substitutes its own credit for a third 

6 party, including standby letters of credit; 

7 (ii) irrevocable letters of credit that 

8 guarantee repayment of commercial paper 

9 or tax-exempt securities; 

10 (iii) risk participations in bankers’ ac11 ceptances; 

12 (iv) sale and repurchase agreements; 

13 (v) asset sales with recourse against 

14 the seller; 

15 (vi) interest rate swaps; 

16 (vii) credit swaps; 

17 (viii) commodity contracts; 

18 (ix) forward contracts; 

19 (x) securities contracts; 

20 (xi) lease obligations, including obliga21 tions from synthetic leases; 

22 (xii) obligations existing in an invest23 ment accounted for by the equity method; 

24 (xiii) obligations arising from struc25 tured investment vehicles; and 


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1 (xiv) such other activities or trans2 actions as the Agency may, by rule, define. 

3 SEC. 3. SYSTEMIC RESOLUTION FUND. 

4 (a) ESTABLISHMENT.—There is established the Sys5 temic Resolution Fund, which the Corporation shall— 

6 (1) maintain and administer; 

7 (2) use to facilitate the resolution of a covered 

8 financial company, as provided in subsection (b), or 

9 take such other actions as are authorized for the 

10 Corporation; and 

11 (3) invest in accordance with section 13(a) of 

12 the Federal Deposit Insurance Act. 

13 (b) USES OF THE FUND.—The Fund shall be avail14 able to the Corporation for use with respect to a covered 

15 financial company— 

16 (1) to cover the costs incurred by the Corpora17 tion, including as receiver, in exercising its rights, 

18 authorities, and powers and fulfilling its obligations 

19 and responsibilities; 

20 (2) to repay initial capitalization appropriations 

21 under this section; and 

22 (3) to cover the costs of systemic stabilization 

23 purposes. 

24 (c) PROHIBITIONS.—Notwithstanding any other pro25 vision of law amounts in the Fund may not be used to 


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1 convert or maintain a financial company that is insolvent 

2 or in receivership, except to the extent necessary to insure 

3 systemic stabilization in the resolution of such financial 

4 company. 

5 (d) DEPOSITS TO THE FUND.—All amounts assessed 

6 against a financial company under this section shall be 

7 deposited into the Fund. 

8 SEC. 4. ASSESSMENTS. 

9 (a) MINIMUM SIZE OF THE FUND.—The Corporation 

10 shall, by rule, establish the minimum size of the Fund, 

11 consistent with subsections (a) and (b), but amounts 

12 maintained in the Fund shall in no case exceed an amount 

13 equal to 1 percent of the gross domestic product of the 

14 United States. 

15 (b) ASSESSMENTS TO MAINTAIN FUND.—The Cor16 poration shall impose assessments on financial companies 

17 in such amounts and in such manner, and subject to such 

18 terms and conditions as the Corporation, by regulation, 

19 determines are necessary for the amount in the Fund to 

20 be maintained at not less than the minimum size estab21 lished pursuant to subsection (a). 

22 (c) ASSESSMENTS TO REPLENISH THE FUND.—If 

23 the Fund falls below the minimum size established pursu24 ant to subsection (a) the Corporation shall impose assess25 ments on financial companies, in such amounts and such 


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1 manner, and subject to consideration of the factors set 

2 forth in subsection (e), as are necessary for the Fund to 

3 meet or exceed the minimum size established pursuant to 

4 subsection (a) before the end of the 8-year period begin5 ning on the date on which the Fund first fell below the 

6 minimum amount (or such longer period as the Corpora7 tion may determine to be necessary due to extraordinary 

8 circumstances). 

9 (d) MINIMUM ASSESSMENT THRESHOLD.—The Cor10 poration may not impose an assessment under this sub11 section on any financial company that the Corporation de12 termines does not pose a systemic risk to the United 

13 States financial system. 

14 (e) REALLOCATION REQUIRED.—The Corporation 

15 shall, by rule, establish a mechanism whereby the systemic 

16 risk regulator reallocates the assessments for the fund an17 nually among all the systemically risky financial compa18 nies, to include the authority to refund contributions, as 

19 necessary or appropriate in the determination of the Cor20 poration. 

21 (f) FACTORS FOR CONSIDERATION.—In taking ac22 tions and making determinations under this subsection, 

23 the Corporation shall seek to prevent sharp swings in the 

24 assessment rates for financial companies, and shall take 

25 into account— 


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1 (1) the actual or expected risk of losses to the 

2 Fund; 

3 (2) economic conditions generally affecting fi4 nancial companies, so as to allow assessments and 

5 the Fund to increase during more favorable condi6 tions and to decrease during less favorable economic 

7 conditions; 

8 (3) any assessments imposed on a financial 

9 company or a subsidiary or affiliate of a financial 

10 company that is— 

11 (A) an insured depository institution, sub12 ject to assessments under section 7 or 

13 13(c)(4)(G) of the Federal Deposit Insurance 

14 Act; 

15 (B) a member of the Securities Investor 

16 Protection Corporation, subject to assessments 

17 under section 4 of the Securities Investor Pro18 tection Act of 1970; or 

19 (C) an insurance company, subject to as20 sessments pursuant to applicable State law to 

21 cover (or reimburse payments made to cover) 

22 the costs of the rehabilitation, liquidation, or 

23 other State insolvency proceeding with respect 

24 to one or more insurance companies; 


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1 (4) the risks presented by the financial com2 pany to the financial system and the extent to which 

3 the financial company has, or likely would, benefit 

4 from the resolution of a financial company; 

5 (5) any off-balance-sheet activities of the finan6 cial company; and 

7 (6) such other factors as the Corporation may 

8 determine to be appropriate. 

9 (g) PERMISSIBLE DISTINCTIONS FOR ASSESS10 MENTS.—In establishing the assessment system for the 

11 Fund, the Corporation, by regulation, may differentiate 

12 among financial companies based on size, complexity of 

13 operations or organization, relationships, transactions, di14 rect or indirect activities, and any other factors that the 

15 Corporation may deem appropriate. 

16 (h) INITIAL CAPITALIZATION.—There are authorized 

17 to be appropriated to the Secretary, for fiscal years 2010 

18 and 2011, such sums as may be necessary to initially cap19 italize the Fund in accordance with this section. 

Æ 


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