I 

111TH CONGRESS 

1ST SESSION H. R. 2660 

To amend the Federal Deposit Insurance Act to require the appropriate 

Federal banking agencies to prescribe capital standards for certain special purpose entities. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 2, 2009 

Mr. ELLISON introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To amend the Federal Deposit Insurance Act to require 

the appropriate Federal banking agencies to prescribe 

capital standards for certain special purpose entities. 

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 ‘‘Regulatory Capital En5 hancement Act of 2009’’. 

6 SEC. 2. REGULATION OF SPECIAL PURPOSE ENTITIES. 

7 The Federal Deposit Insurance Act (12 U.S.C. 1811 

8 et seq.) is amended by inserting after section 38 the fol9 lowing new section: 


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1 ‘‘SEC. 38A CAPITAL STANDARDS FOR CERTAIN SPECIAL 

2 PURPOSE ENTITIES. 

3 ‘‘(a) IN GENERAL.—Each appropriate Federal bank4 ing agency shall prescribe capital standards, including a 

5 leverage limit and a risk-based capital requirement, for 

6 special purpose entities, or similar types of vehicles or en7 tities, that are sponsored by insured depository institu8 tions regulated by such agency. Such capital standards 

9 shall conform, to the extent practicable, with the capital 

10 standards prescribed for such institution under section 

11 38(c). 

12 ‘‘(b) ADDITIONAL MEASURES.—An appropriate Fed13 eral banking agency may, by regulation, establish any ad14 ditional relevant capital measures for special purpose enti15 ties, or similar types of vehicles or entities, that are spon16 sored by insured depository institutions that such agency 

17 determines necessary to guard against the risk that such 

18 special purpose entities, or similar types of vehicles or en19 tities, become undercapitalized. 

20 ‘‘(c) DETERMINATION OF SPONSORSHIP.—For pur21 poses of subsection (a), a special purpose entity, or similar 

22 type of vehicle or entity, is sponsored by an insured deposi23 tory institution if the finances of the special purpose enti24 ty, or similar type of vehicle or entity, and the insured 

25 depository institution are intertwined such that the failure 

26 of the special purpose entity, or similar type of vehicle or 


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1 entity, would have a significant impact on the insured de2 pository institution. 

3 ‘‘(d) SPECIAL PURPOSE ENTITY DEFINED.—The ap4 propriate Federal banking agencies shall jointly define the 

5 term ‘special purpose entity’ for purposes of this section. 

6 In defining such term, the appropriate Federal banking 

7 agencies shall focus on trusts and other legal entities es8 tablished by or for an insured depository institution to ful9 fill narrow, specific, or temporary objectives, including— 

10 ‘‘(1) the holding of financial assets transferred 

11 during a securitization process; 

12 ‘‘(2) issuing applicable securities representing 

13 claims on such assets; 

14 ‘‘(3) receiving and reinvesting cash flows from 

15 such assets; and 

16 ‘‘(4) distributing proceeds to holders of the se17 curities.’’. 

Æ 


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