I 

111TH CONGRESS 

1ST SESSION H. R. 2896 

To amend the Federal Deposit Insurance Act to provide the same treatment 

for covered bonds as for other qualified financial contracts to which 

a depository institution is a party when such institution is in receivership 

or conservatorship, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 16, 2009 

Mr. GARRETT of New Jersey (for himself, Mr. KANJORSKI, and Mr. BACHUS) 

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

A BILL 

To amend the Federal Deposit Insurance Act to provide 

the same treatment for covered bonds as for other qualified financial contracts to which a depository institution 

is a party when such institution is in receivership or 

conservatorship, 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 ‘‘Equal Treatment of 

5 Covered Bonds Act of 2009’’. 


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1 SEC. 2. COVERED BONDS TREATMENT. 

2 (a) IN GENERAL.—Section 11(e)(8)(D)(i) of the Fed3 eral Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)(i)) 

4 is amended by inserting ‘‘covered bond,’’ after ‘‘forward 

5 contract,’’. 

6 (b) DEFINITIONS.—Section 11(e)(8)(D) of the Fed7 eral Deposit Insurance Act (12 U.S.C. 1821(e)(8)(D)) is 

8 amended— 

9 (1) by redesignating clauses (vii), (viii), and (ix) 

10 as clauses (viii), (ix), and (x), respectively; and 

11 (2) by inserting after clause (vi) the end the fol12 lowing new clause: 

13 ‘‘(vii) COVERED BOND.—The term 

14 ‘covered bond’ means a nondeposit re15 course debt obligation of an insured depos16 itory institution, with a term to maturity 

17 of at least 1 year, which is secured by spe18 cifically identified assets which are per19 forming in accordance with the terms of 

20 the contracts which created the assets.’’. 

21 (c) TECHNICAL AND CONFORMING AMENDMENT.— 

22 Section 8(e)(3)(C) of the Federal Deposit Insurance Act 

23 (U.S.C. 1818(e)(3)(C)) is amended— 

24 (1) by striking ‘‘and’’ at the end of clause (i); 

25 (2) by striking the period at the end of clause 

26 (ii) and inserting ‘‘; and’’; and 


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1 (3) by adding at the end the following new 

2 clause: 

3 ‘‘(iii) with respect to a covered bond, 

4 actual direct compensatory damages deter5 mined as of the date of the appointment of 

6 the conservator or receiver equal to the 

7 sum of— 

8 ‘‘(I) the outstanding principal 

9 amount of the covered bond on that 

10 date; 

11 ‘‘(II) all interest that had ac12 crued on the covered bond through 

13 that date but that had not been paid; 

14 ‘‘(III) the cost on that date of a 

15 guaranteed investment contract, de16 posit agreement, or other instrument 

17 that would provide for scheduled pay18 ments to be made on the covered bond 

19 until its originally scheduled maturity 

20 date; and 

21 ‘‘(IV) the costs (including reason22 able fees of attorneys) incurred 

23 through that date that arise from or 

24 relate to the exercise of any right, 

25 power, or remedy under the covered 


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1 bond or a related transaction docu2 ment.’’. 

3 (d) REGULATIONS.—No regulation of any Federal 

4 banking agency (as defined in section 3 of the Federal 

5 Deposit Insurance Act) shall be applicable with respect to 

6 any covered bond (as defined in the amendment made by 

7 subsection (b)(2)) unless the regulation or the application 

8 of such regulation to such bond, as the case may be, is 

9 prescribed jointly by the Secretary of the Treasury, the 

10 Board of Governors of the Federal Reserve System, the 

11 Comptroller of the Currency, the Director of the Office 

12 of Thrift Supervision, and the Board of Directors of the 

13 Federal Deposit Insurance Corporation. 

Æ 


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