278 
(11) INSURANCE COMPANY.—The term ‘‘insur-
ance company’’ includes any person engaged in the 
business of insurance to the extent of such activities. 
(12) SECRETARY.—The term ‘‘Secretary’’ shall 
mean the Secretary of the Treasury. 
(13) STATE.—The term ‘‘State’’ means any 
State, commonwealth, territory, or possession of the 
United States, the District of Columbia, the Com-
monwealth of Puerto Rico, the Commonwealth of the 
Northern Mariana Islands, American Samoa, Guam, 
and the United States Virgin Islands. 
(14) CERTAIN OTHER TERMS.—The terms ‘‘af-
filiate,’’ ‘‘company,’’ ‘‘control,’’ ‘‘deposit,’’ ‘‘deposi-
tory institution,’’ ‘‘foreign bank,’’ ‘‘insured deposi-
tory institution,’’ and ‘‘subsidiary’’ have the same 
meanings as in section 3 of the Federal Deposit In-
surance Act (12 U.S.C. 1813). 
SEC. 1603. SYSTEMIC RISK DETERMINATION. 
(a) WRITTEN RECOMMENDATION OF THE FEDERAL 
RESERVE BOARD AND THE APPROPRIATE REGULATORY 
AGENCY.— 
(1) VOTE REQUIRED.—At the request of the 
Secretary or the Chairman of the Federal Reserve 
Board or, in cases where an financial company has 
a broker or dealer as its largest subsidiary as meas-
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ured by total assets as of the end of the previous 
calendar quarter, the Commission, the Federal Re-
serve Board and the appropriate regulatory agency 
shall; or on their own initiative, the Federal Reserve 
Board and the appropriate regulatory agency may; 
consider whether to make the written recommenda-
tion provided for in paragraph (2) with respect to a 
financial company, which recommendation shall be 
made upon a vote of not less than two-thirds of the 
members of the Federal Reserve Board then serving 
and two-thirds of the members of the board or of the 
commission then serving of the appropriate regu-
latory agency, as applicable. 
(2) RECOMMENDATION REQUIRED.—Any writ-
ten recommendations made by the Federal Reserve 
Board and the appropriate regulatory agency under 
paragraph (1) shall contain the following: 
(A) A description of the effect that the de-
fault of the financial company would have on 
economic conditions or financial stability in the 
United States. 
(B) A description of the effect that the de-
fault of the financial company would have on 
economic conditions or financial stability for 
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low-income, minority, or underserved commu-
nities. 
(C) A recommendation regarding the na-
ture and the extent of actions that the Board 
and the appropriate regulatory agency rec-
ommend be taken under section 1604 regarding 
the financial holding company subject to strict-
er standards. 
(b) DETERMINATION BY THE SECRETARY.—Notwith-
standing any other provision of Federal law or the law 
of any State, if, upon the written recommendation of the 
Federal Reserve Board and the board of directors or com-
mission of the appropriate regulatory agency as provided 
for in subsection (a)(1), the Secretary (in consultation 
with the President) determines that— 
(1) the financial company is in default or is in 
danger of default; 
(2) the failure of the financial company and its 
resolution under otherwise applicable Federal or 
State law would have serious adverse effects on fi-
nancial stability or economic conditions in the 
United States; and 
(3) any action under section 1604 would avoid 
or mitigate such adverse effects, taking into consid-
eration the effectiveness of the action in mitigating 
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potential adverse effects on the financial system or 
economic conditions, the cost to the general fund of 
the Treasury, and the potential to increase moral 
hazard on the part of creditors, counterparties, and 
shareholders in the financial company, 
then the Secretary must take action under section 
1604(a), the Corporation must act in accordance with sec-
tion 1604(b), and the Corporation may take 1 or more 
actions specified in section 1604(c) in accordance with the 
requirements of that subsection, except that, prior to the 
Secretary or Corporation taking any action under section 
1604, the Federal Reserve Board or the appropriate Fed-
eral regulatory agency shall take action to avoid or miti-
gate potential adverse effects on low-income, minority, or 
underserved communities affected by the failure of such 
financial company. 
(c) DOCUMENTATION AND REVIEW.— 
(1) IN GENERAL.—The Secretary shall— 
(A) document any determination under 
subsection (b); and, 
(B) retain the documentation for review 
under paragraph (2). 
(2) GAO REVIEW.—The Comptroller General of 
the United States shall review and report to the 
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Congress on any determination under subsection (b), 
including— 
(A) the basis for the determination; 
(B) the purpose for which any action was 
taken pursuant thereto; and 
(C) the likely effect of the determination 
and such action on the incentives and conduct 
of financial holding companies subject to strict-
er standards and their creditors, counterparties, 
and shareholders. 
(3) REPORT TO CONGRESS.—Within 48 hours 
after a determination is made under subsection (b), 
the Secretary shall provide written notice of the de-
termination to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Representa-
tives. The notice shall include a description of the 
basis for the determination. 
(d) DEFAULT OR IN DANGER OF DEFAULT.—For 
purposes of subsection (b), a financial holding company 
subject to stricter standards shall be considered to be in 
default or in danger of default if any of the following con-
ditions exist, as determined in accordance with that sub-
section: 
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(1) A case has been, or likely will promptly be, 
commenced with respect to the financial holding 
company subject to stricter standards under title 11, 
United States Code. 
(2) The financial holding company subject to 
stricter standards is critically undercapitalized, as 
such term has been or may be defined by the Fed-
eral Reserve Board. 
(3) The financial holding company subject to 
stricter standards has incurred, or is likely to incur, 
losses that will deplete all or substantially all of its 
capital, and there is no reasonable prospect for the 
company to avoid such depletion without assistance 
under section 1604. 
(4) The assets of the financial holding company 
subject to stricter standards are, or are likely to be, 
less than its obligations to creditors and others. 
(5) The financial holding company subject to 
stricter standards is, or is likely to be, unable to pay 
its obligations (other than those subject to a bona 
fide dispute) in the normal course of business. 
SEC. 1604. RESOLUTION; STABILIZATION. 
(a) APPOINTMENT OF RECEIVER.— 
(1) IN GENERAL.—Upon the Secretary making 
a determination in accordance with section 1603(b), 
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the Secretary shall appoint the Corporation as re-
ceiver for the covered financial company. 
(2) TIME
LIMIT
ON
RECEIVERSHIP
AUTHOR-
ITY.—Any appointment of the Corporation as re-
ceiver under paragraph (1) shall terminate on the 
date that is the end of the 1-year period beginning 
on the date such appointment is made. 
(b) RESOLUTION LIMITATIONS.— 
(1) IN GENERAL.—An insolvent financial com-
pany may be resolved under this subtitle only if the 
failure and resolution of such company under title 
11, United States Code, would be systemically desta-
bilizing, as determined by the appropriate Federal 
regulatory agencies and the Secretary of the Treas-
ury (in consultation with the President) in accord-
ance with section 1603(b). 
(2) LIQUIDATION.—A financial company that 
comes within coverage of this subtitle for resolution 
shall be placed in liquidation, and the associated liq-
uidation costs shall be paid from the company’s as-
sets and borne by the shareholders and unsecured 
creditors of such company. 
(3) ASSESSMENT
FOR
EXCESS
LIQUIDATION 
COSTS.—Any liquidation costs that exceed the 
amount of liquidated assets of the company shall be 
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paid through assessments on large financial compa-
nies. 
(c) CONSULTATION.—The Corporation, as receiver— 
(1) shall consult with the regulators of the cov-
ered financial company and its covered subsidiaries 
for purposes of ensuring an orderly resolution of the 
covered financial company; 
(2) may consult with, or under section 
1609(a)(1)(B)(v) or section 1609(a)(1)(K) acquire 
services of, any outside experts as appropriate to in-
form and aid the Corporation in the resolution proc-
ess; and 
(3) shall consult with the primary regulators of 
any subsidiaries of the covered financial company 
that are not covered subsidiaries as described in sec-
tion 1602(9)(B)(iv) and coordinate with such regu-
lators regarding the treatment of such solvent sub-
sidiaries and the separate resolution of any such in-
solvent subsidiaries under other governmental au-
thority, as appropriate. 
(d) EMERGENCY STABILIZATION AFTER APPOINT-
MENT OF RECEIVER.—Upon the Secretary appointing the 
Corporation as receiver under subsection (a), the Corpora-
tion may, in its corporate capacity and as an agency of 
the United States, with the approval of the Secretary and 
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subject to the conditions in subsections (f) through (g), 
take the following actions under such terms and conditions 
that the Corporation and the Secretary jointly deem ap-
propriate: 
(1) Making loans to, or purchasing any debt ob-
ligation of, the covered financial company or any 
covered subsidiary. 
(2) Purchasing assets of the covered financial 
company or any covered subsidiary directly or 
through an entity established by the Corporation for 
such purpose. 
(3) Assuming or guaranteeing the obligations of 
the covered financial company or any covered sub-
sidiary to one or more third parties. 
(4) Taking a lien on any or all assets of the 
covered financial company or any covered subsidiary, 
including a first priority lien on all unencumbered 
assets of the company or any covered subsidiary to 
secure repayment of any transactions conducted 
under this subsection. 
(5) Selling or transferring all, or any part 
thereof, of such acquired assets, liabilities, or obliga-
tions of the covered financial company or any cov-
ered subsidiary. 
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(e) TREATMENT OF CERTAIN INSURANCE SUBSIDI-
ARIES.— 
(1) IN GENERAL.—Notwithstanding subsection 
(a), if a covered financial company is an insurance 
company covered by a State law designed specifically 
to deal with the insolvency of an insurance company, 
resolution of such company, and any subsidiary of 
such company, will be conducted as provided under 
such State law. 
(2) EXCEPTION FOR COVERED SUBSIDIARIES.— 
The requirement of paragraph (1) shall not apply 
with respect to any covered subsidiary of such an in-
surance company. 
(3) 
BACKUP
AUTHORITY.—Notwithstanding 
paragraph (1), with respect to a covered financial 
company described under paragraph (1), if, after the 
end of the 60-day period beginning on the date a de-
termination is made under section 1603(b) with re-
spect to such company, the appropriate regulatory 
agency has not filed the appropriate judicial action 
in the appropriate State court to place such com-
pany into resolution under the State’s laws and re-
quirements, the Corporation shall have the authority 
to stand in the place of the appropriate regulatory 
agency and file the appropriate judicial action in the 
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appropriate State court to place such company into 
resolution under the State’s laws and requirements. 
(f) MANDATORY TERMS AND CONDITIONS FOR ALL 
STABILIZATION ACTIONS.—The Corporation as receiver is 
authorized to take the stabilization actions listed in sub-
section (d) only if— 
(1) the Secretary and the Corporation deter-
mine that such action is necessary for the purpose 
of financial stability and not for the purpose of pre-
serving the covered financial company; 
(2) the Corporation ensures that the share-
holders of a covered financial company do not re-
ceive payment until after all other claims are fully 
paid; 
(3) the Corporation ensures that any funds 
from taxpayers shall be repaid as part of the resolu-
tion process before payments are made to creditors; 
(4) the Corporation ensures that unsecured 
creditors bear losses; 
(5) the Corporation ensures that management 
responsible for the failed condition of the covered fi-
nancial company is removed (if such management 
has not already been removed at the time the Cor-
poration is appointed as receiver); and 
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(6) the Corporation ensures that the members 
of the board of directors (or body performing similar 
functions) responsible for the failed condition of the 
covered financial company are removed (if such 
members have not already been removed at the time 
the Corporation is appointed as receiver). 
(g) RECOUPMENT OF FUNDS EXPENDED FOR SYS-
TEMIC STABILIZATION PURPOSES.—Amounts expended 
from the Fund by the Corporation under this section shall 
be repaid in full to the Fund from the following sources: 
(1) RESOLUTION
PROCESS.—Amounts attrib-
utable to the proceeds of the sale of, or income from, 
the assets of the covered financial company. 
(2) INDUSTRY
ASSESSMENTS.—If the sources 
described in paragraph (1) are insufficient to repay 
the amount of the stabilization action in full, the dif-
ference shall be recouped through assessments on fi-
nancial companies in accordance with section 
1609(o). 
SEC. 1605. JUDICIAL REVIEW. 
If a receiver is appointed, the covered financial com-
pany may, not later than 30 days thereafter, bring an ac-
tion in the United States district court for the judicial dis-
trict in which the home office of such covered financial 
company is located, or in the United States District Court 
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for the District of Columbia, for an order requiring that 
the receiver be removed, and the court shall, upon the 
merits, dismiss such action or direct the receiver to be re-
moved. Review of such an action shall be limited to the 
appointment of a receiver under section 1604. 
SEC. 1606. DIRECTORS NOT LIABLE FOR ACQUIESCING IN 
APPOINTMENT OF RECEIVER. 
The members of the board of directors (or body per-
forming similar functions) of a covered financial company 
shall not be liable to the covered financial company’s 
shareholders or creditors for acquiescing in or consenting 
in good faith to— 
(1) the Secretary’s appointment of the Corpora-
tion as receiver for the covered financial company 
under section 1604; or 
(2) an acquisition, combination, or transfer of 
assets or liabilities under section 1609. 
SEC. 1607. TERMINATION AND EXCLUSION OF OTHER AC-
TIONS. 
The Corporation’s acting as receiver for a covered fi-
nancial company under this title shall immediately, and 
by operation of law, terminate any case commenced with 
respect to the covered financial company under title 11, 
United States Code, or any proceeding under any State 
insolvency law with respect to the covered financial com-
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291 
pany, and no such case or proceeding may be commenced 
with respect to the covered financial company at any time 
while the Corporation acts as receiver for the covered fi-
nancial company. 
SEC. 1608. RULEMAKING. 
The Corporation may prescribe such regulations as 
the Corporation considers necessary or appropriate to im-
plement the provisions of this title. 
SEC. 1609. POWERS AND DUTIES OF CORPORATION. 
(a) POWERS AND AUTHORITIES.— 
(1) GENERAL POWERS.— 
(A) SUCCESSOR TO COVERED FINANCIAL 
COMPANY.—The Corporation shall, upon ap-
pointment as receiver for a covered financial 
company under section 1604, and by operation 
of law, succeed to— 
(i) all rights, titles, powers, and privi-
leges of the covered financial company, and 
of any stockholder, member, officer, or di-
rector of such institution with respect to 
the covered financial company and the as-
sets of the covered financial company; and 
(ii) title to the books, records, and as-
sets of any previous receiver or other legal 
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custodian of such covered financial com-
pany. 
(B) OPERATE
THE
COVERED
FINANCIAL 
COMPANY.—The Corporation as receiver for a 
covered financial company may— 
(i) take over the assets of and operate 
the covered financial company with all the 
powers of the members or shareholders, 
the directors, and the officers of the cov-
ered financial company and conduct all 
business of the covered financial company; 
(ii) collect all obligations and money 
due the covered financial company; 
(iii) perform all functions of the cov-
ered financial company in the name of the 
covered financial company; 
(iv) preserve and conserve the assets 
and property of the covered financial com-
pany; and 
(v) provide by contract for assistance 
in fulfilling any function, activity, action, 
or duty of the Corporation as receiver. 
(C) FUNCTIONS OF COVERED FINANCIAL 
COMPANY’S OFFICERS, DIRECTORS, AND SHARE-
HOLDERS.— 
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(i) IN
GENERAL.—The Corporation 
may provide for the exercise of any func-
tion by any member or stockholder, direc-
tor, or officer of any covered financial com-
pany for which the Corporation has been 
appointed as receiver under this section. 
(ii) PRESUMPTION.—There shall be a 
strong presumption that the Corporation, 
as receiver, will remove management re-
sponsible for the failed condition of the 
covered financial company (if such man-
agement has not already been removed at 
the time the Corporation is appointed as 
receiver). 
(D) ADDITIONAL POWERS AS RECEIVER.— 
The Corporation may, as receiver, and subject 
to all legally enforceable and perfected security 
interests, place the covered financial company 
in liquidation and proceed to realize upon the 
assets of the covered financial company in such 
manner as the Corporation deems appropriate, 
including through the sale of assets, the trans-
fer of assets to a bridge financial company es-
tablished under subsection (h), or the exercise 
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of any other rights or privileges granted to the 
receiver under this section. 
(E) ORGANIZATION OF NEW COMPANIES.— 
The Corporation as receiver may organize a 
bridge financial company under subsection (h). 
(F) MERGER; TRANSFER OF ASSETS AND 
LIABILITIES.— 
(i) IN
GENERAL.—Subject to clause 
(ii), the Corporation as receiver may— 
(I) merge the covered financial 
company with another company; or 
(II) transfer any asset or liability 
of the covered financial company (in-
cluding assets and liabilities associ-
ated with any trust or custody busi-
ness) without obtaining any approval, 
assignment, or consent with respect to 
such transfer. 
(ii) FEDERAL
AGENCY
APPROVAL; 
ANTITRUST REVIEW.— 
(I) IN
GENERAL.—If a trans-
action described in clause (i) requires 
approval by a Federal agency, the 
transaction may not be consummated 
before the 5th calendar day after the 
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date of approval by the Federal agen-
cy responsible for such approval with 
respect thereto. If, in connection with 
any such approval, a report on com-
petitive factors is required, the Fed-
eral agency responsible for such ap-
proval shall promptly notify the Attor-
ney General of the proposed trans-
action and the Attorney General shall 
provide the required report within 10 
days of the request. If a filing is re-
quired under the Hart Scott-Rodino 
Antitrust Improvements Act of 1976 
with the Department of Justice or the 
Federal Trade Commission, the wait-
ing period shall expire not later than 
the 30th day following such filing not-
withstanding any other provision of 
Federal law or any attempt by any 
Federal agency to extend such waiting 
period, and no further request for in-
formation by any Federal agency shall 
be permitted. 
(II) EMERGENCY.—If the Sec-
retary in consultation with the Chair-
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man of the Federal Reserve Board 
has found that the Corporation must 
act immediately to prevent the prob-
able failure of 1 or more of the cov-
ered financial companies involved, the 
approvals and filings referred to in 
subclause (I) shall not be required 
and the transactions may be con-
summated immediately by the Cor-
poration. 
(G) PAYMENT OF VALID OBLIGATIONS.— 
The Corporation, as receiver, shall, to the ex-
tent funds are available, pay all valid obliga-
tions of the covered financial company that are 
due and payable at the time of the appointment 
of the Corporation as receiver in accordance 
with the prescriptions and limitations of this 
title. 
(H) SUBPOENA AUTHORITY.— 
(i) IN
GENERAL.—The Corporation 
may, for purposes of carrying out any 
power, authority, or duty with respect to a 
covered financial company (including deter-
mining any claim against the covered fi-
nancial company and determining and real-
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izing upon any asset of any person in the 
course of collecting money due the covered 
financial company), exercise any power es-
tablished under section 8(n) of the Federal 
Deposit Insurance Act as if the covered fi-
nancial company were an insured deposi-
tory institution. 
(ii) RULE
OF
CONSTRUCTION.—This 
section shall not be construed as limiting 
any rights that the Corporation, in any ca-
pacity, might otherwise have to exercise 
any powers described in clause (i) under 
any other provision of law. 
(I) INCIDENTAL
POWERS.—The Corpora-
tion, as receiver, may— 
(i) exercise all powers and authorities 
specifically granted to receivers under this 
section and such incidental powers as shall 
be necessary to carry out such powers; and 
(ii) take any action authorized by this 
section, which the Corporation determines 
is in the best interests of the covered fi-
nancial company, its customers, its credi-
tors, its counterparties, or the stability of 
the financial system. 
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(J) UTILIZATION OF PRIVATE SECTOR.—In 
carrying out its responsibilities in the manage-
ment and disposition of assets from a covered 
financial company, the Corporation, as receiver, 
may utilize the services of private persons, in-
cluding real estate and loan portfolio asset 
management, property management, auction 
marketing, legal, and brokerage services, if such 
services are available in the private sector and 
the Corporation determines utilization of such 
services is practicable, efficient, and cost effec-
tive. 
(K) SHAREHOLDERS AND CREDITORS OF 
COVERED
FINANCIAL
COMPANY.—Notwith-
standing any other provision of law, the Cor-
poration as receiver for a covered financial com-
pany pursuant to this section and its succes-
sion, by operation of law, to the rights, titles, 
powers, and privileges described in subpara-
graph (A) shall terminate all rights and claims 
that the stockholders and creditors of the cov-
ered financial company may have against the 
assets of the covered financial company or the 
Corporation arising out of their status as stock-
holders or creditors, except for their right to 
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payment, resolution, or other satisfaction of 
their claims, as permitted under this section. 
The Corporation shall ensure that shareholders 
and unsecured creditors bear losses, consistent 
with the priority of claims provisions in section 
1609(b). 
(L) COORDINATION WITH FOREIGN FINAN-
CIAL
AUTHORITIES.—The Corporation as re-
ceiver for a covered financial company shall co-
ordinate with the appropriate foreign financial 
authorities regarding the resolution of subsidi-
aries of the covered financial company that are 
established in a country other than the United 
States. 
(2) AUTHORITY OF CORPORATION TO DETER-
MINE CLAIMS.— 
(A) IN GENERAL.—The Corporation may, 
as receiver, determine claims in accordance with 
the requirements of this subsection and regula-
tions prescribed under paragraph (3). 
(B) NOTICE
REQUIREMENTS.—The re-
ceiver, in any case involving the liquidation or 
winding up of the affairs of a covered financial 
company, shall— 
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(i) promptly publish a notice to the 
covered financial company’s creditors to 
present their claims, together with proof, 
to the receiver by a date specified in the 
notice which shall be not less than 90 days 
after the publication of such notice; and 
(ii) republish such notice approxi-
mately 1 month and 2 months, respec-
tively, after the publication under clause 
(i). 
(C) MAILING
REQUIRED.—The receiver 
shall mail a notice similar to the notice pub-
lished under subparagraph (B)(i) at the time of 
such publication to any creditor shown on the 
covered financial company’s books— 
(i) at the creditor’s last address ap-
pearing in such books; or 
(ii) upon discovery of the name and 
address of a claimant not appearing on the 
covered financial company’s books, within 
30 days after the discovery of such name 
and address. 
(3) RULEMAKING AUTHORITY RELATING TO DE-
TERMINATION OF CLAIMS.— 
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(A) IN GENERAL.—Subject to subsection 
(b), the Corporation shall prescribe rules and 
regulations regarding the allowance or disallow-
ance of claims by the Corporation and providing 
for administrative determination of claims and 
review of such determination. 
(B) EXISTING
RULES.—The Corporation 
may elect to use the regulations adopted pursu-
ant to the provisions of section 11 of the Fed-
eral Deposit Insurance Act with respect to the 
determination of claims for a covered financial 
company as if the covered financial company 
were an insured depository institution. 
(4) PROCEDURES
FOR
DETERMINATION
OF 
CLAIMS.— 
(A) DETERMINATION PERIOD.— 
(i) IN GENERAL.—Before the end of 
the 180-day period beginning on the date 
any claim against a covered financial com-
pany is filed with the Corporation as re-
ceiver, the Corporation shall determine 
whether to allow or disallow the claim and 
shall notify the claimant of any determina-
tion with respect to such claim. 
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(II) such claim is filed in time to 
permit payment of such claim. 
(D) AUTHORITY TO DISALLOW CLAIMS.— 
(i) IN
GENERAL.—The Corporation 
may disallow any portion of any claim by 
a creditor or claim of security, preference, 
or priority which is not proved to the satis-
faction of the Corporation. 
(ii) PAYMENTS TO LESS THAN FULLY 
SECURED
CREDITORS.—In the case of a 
claim of a creditor against a covered finan-
cial company which is secured by any prop-
erty or other asset of such covered finan-
cial company, the receiver— 
(I) may treat the portion of such 
claim which exceeds an amount equal 
to the fair market value of such prop-
erty or other asset as an unsecured 
claim against the covered financial 
company; and 
(II) may not make any payment 
with respect to such unsecured por-
tion of the claim other than in connec-
tion with the disposition of all claims 
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305 
of unsecured creditors of the covered 
financial company. 
(iii) EXCEPTIONS.—No provision of 
this paragraph shall apply with respect 
to— 
(I) any extension of credit from 
any Federal Reserve bank, or the Cor-
poration, to any covered financial 
company; or 
(II) subject to clause (ii), any le-
gally enforceable or perfected security 
interest in the assets of the covered fi-
nancial company securing any such 
extension of credit. 
(iv) PAYMENTS TO FULLY SECURED 
CREDITORS.—Notwithstanding any other 
provision of law, in any receivership of a 
covered 
financial 
company 
in 
which 
amounts realized from the resolution are 
insufficient to satisfy completely any 
amounts owed to the United States or to 
the Fund, as determined in the receiver’s 
sole discretion, an allowed claim under a 
legally enforceable or perfected security in-
terest (that became a legally enforceable or 
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306 
perfected security interest after the date of 
the enactment of this clause), other than a 
legally enforceable or perfected security in-
terest of the Federal Government, in any 
of the assets of the covered financial com-
pany in receivership may be treated as an 
unsecured claim in the amount of up to 20 
percent as necessary to satisfy any 
amounts owed to the United States or to 
the Fund. Any balance of such claim that 
is treated as an unsecured claim under this 
subparagraph shall be paid as a general li-
ability of the covered financial company. 
(E) NO JUDICIAL REVIEW OF DETERMINA-
TION PURSUANT TO SUBPARAGRAPH (D).—No 
court may review the Corporation determination 
pursuant to subparagraph (D) to disallow a 
claim. 
(F) LEGAL EFFECT OF FILING.— 
(i) 
STATUTE
OF
LIMITATION 
TOLLED.—For purposes of any applicable 
statute of limitations, the filing of a claim 
with the Corporation shall constitute a 
commencement of an action. 
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307 
(ii) NO
PREJUDICE
TO
OTHER
AC-
TIONS.—Subject to paragraph (9), the fil-
ing of a claim with the Corporation shall 
not prejudice any right of the claimant to 
continue any action which was filed before 
the appointment of the Corporation as re-
ceiver for the covered financial company. 
(5) PROVISION FOR JUDICIAL DETERMINATION 
OF CLAIMS.— 
(A) IN GENERAL.—Before the end of the 
60-day period beginning on the earlier of— 
(i) the end of the period described in 
paragraph (4)(A)(i) (or, if extended by 
agreement of the Corporation and the 
claimant, the period described in para-
graph (4)(A)(ii)) with respect to any claim 
against a covered financial company for 
which the Corporation is receiver; or 
(ii) the date of any notice of disallow-
ance of such claim pursuant to paragraph 
(4)(A)(i), 
the claimant may file suit on a claim (or con-
tinue an action commenced before the appoint-
ment of the receiver) in the district or terri-
torial court of the United States for the district 
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308 
within which the covered financial company’s 
principal place of business is located or the 
United States District Court for the District of 
Columbia (and such court shall have jurisdic-
tion to hear such claim). 
(B) STATUTE
OF
LIMITATIONS.—If any 
claimant fails to file suit on such claim (or con-
tinue an action commenced before the appoint-
ment of the receiver) before the end of the 60- 
day period described in subparagraph (A), the 
claim shall be deemed to be disallowed (other 
than any portion of such claim which was al-
lowed by the receiver) as of the end of such pe-
riod, such disallowance shall be final, and the 
claimant shall have no further rights or rem-
edies with respect to such claim. 
(6) EXPEDITED DETERMINATION OF CLAIMS.— 
(A) 
ESTABLISHMENT
REQUIRED.—The 
Corporation shall establish a procedure for ex-
pedited relief outside of the routine claims proc-
ess established under paragraph (4) for claim-
ants who— 
(i) allege the existence of legally valid 
and enforceable or perfected security inter-
ests in assets of any covered financial com-
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309 
pany for which the Corporation has been 
appointed as receiver; and 
(ii) allege that irreparable injury will 
occur if the routine claims procedure is fol-
lowed. 
(B) DETERMINATION PERIOD.—Before the 
end of the 90-day period beginning on the date 
any claim is filed in accordance with the proce-
dures established pursuant to subparagraph 
(A), the Corporation shall— 
(i) determine— 
(I) whether to allow or disallow 
such claim; or 
(II) whether such claim should be 
determined pursuant to the proce-
dures established pursuant to para-
graph (4); and 
(ii) notify the claimant of the deter-
mination, and if the claim is disallowed, 
provide a statement of each reason for the 
disallowance and the procedure for obtain-
ing judicial determination. 
(C) PERIOD
FOR
FILING
OR
RENEWING 
SUIT.—Any claimant who files a request for ex-
pedited relief shall be permitted to file a suit, 
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310 
or to continue such a suit filed before the ap-
pointment of the Corporation as receiver, seek-
ing a determination of the claimant’s rights 
with respect to such security interest after the 
earlier of— 
(i) the end of the 90-day period begin-
ning on the date of the filing of a request 
for expedited relief; or 
(ii) the date the Corporation denies 
the claim. 
(D) STATUTE OF LIMITATIONS.—If an ac-
tion described in subparagraph (C) is not filed, 
or the motion to renew a previously filed suit is 
not made, before the end of the 30-day period 
beginning on the date on which such action or 
motion may be filed in accordance with sub-
paragraph (B), the claim shall be deemed to be 
disallowed as of the end of such period (other 
than any portion of such claim which was al-
lowed by the receiver), such disallowance shall 
be final, and the claimant shall have no further 
rights or remedies with respect to such claim. 
(E) LEGAL EFFECT OF FILING.— 
(i) 
STATUTE
OF
LIMITATION 
TOLLED.—For purposes of any applicable 
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311 
statute of limitations, the filing of a claim 
with the receiver shall constitute a com-
mencement of an action. 
(ii) NO
PREJUDICE
TO
OTHER
AC-
TIONS.—Subject to paragraph (9), the fil-
ing of a claim with the receiver shall not 
prejudice any right of the claimant to con-
tinue any action which was filed before the 
appointment of the Corporation as receiver 
for the covered financial company. 
(7) AGREEMENTS AGAINST INTEREST OF THE 
RECEIVER.—No agreement that tends to diminish or 
defeat the interest of the Corporation as receiver in 
any asset acquired by the receiver under this section 
shall be valid against the receiver unless such agree-
ment is in writing and executed by an authorized of-
ficer or representative of the covered financial com-
pany. 
(8) PAYMENT OF CLAIMS.— 
(A) IN GENERAL.—The Corporation as re-
ceiver may, in its discretion and to the extent 
funds are available, pay creditor claims, in such 
manner and amounts as are authorized under 
this section, which are— 
(i) allowed by the receiver; 
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312 
(ii) approved by the Corporation pur-
suant to a final determination pursuant to 
paragraph (6); or 
(ii) determined by the final judgment 
of any court of competent jurisdiction. 
(B) 
PAYMENT
OF
DIVIDENDS
ON 
CLAIMS.—The receiver may, in the receiver’s 
sole discretion and to the extent otherwise per-
mitted by this section, pay dividends on proven 
claims at any time, and no liability shall attach 
to the Corporation (in the Corporation’s capac-
ity as receiver), by reason of any such payment, 
for failure to pay dividends to a claimant whose 
claim is not proved at the time of any such pay-
ment. 
(C) RULEMAKING
AUTHORITY
OF
COR-
PORATION.—The Corporation may prescribe 
such rules, including definitions of terms, as it 
deems appropriate to establish a single uniform 
interest rate for, or to make payments of post 
insolvency interest to creditors holding proven 
claims against the receivership estates of a cov-
ered financial company following satisfaction by 
the receiver of the principal amount of all cred-
itor claims. 
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(9) SUSPENSION OF LEGAL ACTIONS.— 
(A) IN GENERAL.—After the appointment 
of the Corporation as receiver for a covered fi-
nancial company, the Corporation may request 
a stay for a period not to exceed 90 days in any 
noncriminal judicial action or proceeding to 
which such covered financial company is or be-
comes a party. 
(B) GRANT OF STAY BY ALL COURTS RE-
QUIRED.—Upon receipt of a request by the Cor-
poration pursuant to subparagraph (A) for a 
stay of any non-criminal judicial action or pro-
ceeding in any court with jurisdiction of such 
action or proceeding, the court shall grant such 
stay as to all parties. 
(10) ADDITIONAL RIGHTS AND DUTIES.— 
(A) PRIOR
FINAL
ADJUDICATION.—The 
Corporation 
shall 
abide 
by 
any 
final 
unappealable judgment of any court of com-
petent jurisdiction which was rendered before 
the appointment of the Corporation as receiver. 
(B) RIGHTS
AND
REMEDIES
OF
RE-
CEIVER.—In the event of any appealable judg-
ment, the Corporation as receiver shall— 
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314 
(i) have all the rights and remedies 
available to the covered financial company 
(before the appointment of the receiver 
under section 1604) and the Corporation, 
including but not limited to removal to 
Federal court and all appellate rights; and 
(ii) not be required to post any bond 
in order to pursue such remedies. 
(C) NO ATTACHMENT OR EXECUTION.—No 
attachment or execution may issue by any court 
upon assets in the possession of the receiver. 
(D) LIMITATION ON JUDICIAL REVIEW.— 
Except as otherwise provided in this subsection, 
no court shall have jurisdiction over— 
(i) any claim or action for payment 
from, or any action seeking a determina-
tion of rights with respect to, the assets of 
any covered financial company for which 
the Corporation has been appointed re-
ceiver, including any assets which the Cor-
poration may acquire from itself as such 
receiver; or 
(ii) any claim relating to any act or 
omission of such covered financial company 
or the Corporation as receiver. 
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315 
(E) DISPOSITION
OF
ASSETS.—In exer-
cising any right, power, privilege, or authority 
as receiver in connection with any covered fi-
nancial company for which the Corporation is 
acting as receiver under this section, the Cor-
poration shall, to the greatest extent prac-
ticable, conduct its operations in a manner 
which— 
(i) maximizes the net present value 
return from the sale or disposition of such 
assets; 
(ii) minimizes the amount of any loss 
realized in the resolution of cases; 
(iii) minimizes the cost to the general 
fund of the Treasury; 
(iv) mitigates the potential for serious 
adverse effects to the financial system and 
the U.S. economy; 
(v) ensures timely and adequate com-
petition and fair and consistent treatment 
of offerors; and 
(vi) prohibits discrimination on the 
basis of race, sex, or ethnic groups in the 
solicitation and consideration of offers. 
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316 
(11) STATUTE OF LIMITATIONS FOR ACTIONS 
BROUGHT BY RECEIVER.— 
(A) IN
GENERAL.—Notwithstanding any 
provision of any contract, the applicable statute 
of limitations with regard to any action brought 
by the Corporation as receiver shall be— 
(i) in the case of any contract claim, 
the longer of— 
(I) the 6-year period beginning 
on the date the claim accrues; or 
(II) the period applicable under 
State law; and 
(ii) in the case of any tort claim, the 
longer of— 
(I) the 3-year period beginning 
on the date the claim accrues; or 
(II) the period applicable under 
State law. 
(B) DETERMINATION
OF
THE
DATE
ON 
WHICH
A
CLAIM
ACCRUES.—For purposes of 
subparagraph (A), the date on which the stat-
ute of limitations begins to run on any claim 
described in such subparagraph shall be the 
later of— 
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(i) the date of the appointment of the 
Corporation as receiver under this title; or 
(ii) the date on which the cause of ac-
tion accrues. 
(C) REVIVAL OF EXPIRED STATE CAUSES 
OF ACTION.— 
(i) IN GENERAL.—In the case of any 
tort claim described in clause (ii) for which 
the statute of limitation applicable under 
State law with respect to such claim has 
expired not more than 5 years before the 
appointment of the Corporation as re-
ceiver, the Corporation may bring an ac-
tion as receiver on such claim without re-
gard to the expiration of the statute of lim-
itation applicable under State law. 
(ii) 
CLAIMS
DESCRIBED.—A 
tort 
claim referred to in clause (i) is a claim 
arising from fraud, intentional misconduct 
resulting in unjust enrichment, or inten-
tional misconduct resulting in substantial 
loss to the covered financial company. 
(12) FRAUDULENT TRANSFERS.— 
(A) IN GENERAL.—The Corporation, as re-
ceiver for any covered financial company, may 
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avoid a transfer of any interest of an institution 
affiliated party, or any person who the Corpora-
tion determines is a debtor of the covered finan-
cial company, in property, or any obligation in-
curred by such party or person, that was made 
within 5 years of the date on which the Cor-
poration was appointed receiver if such party or 
person voluntarily or involuntarily made such 
transfer or incurred such liability with the in-
tent to hinder, delay, or defraud the covered fi-
nancial company or the Corporation. 
(B) RIGHT OF RECOVERY.—To the extent 
a transfer is avoided under subparagraph (A), 
the Corporation may recover, for the benefit of 
the covered financial company, the property 
transferred or, if a court so orders, the value of 
such property (at the time of such transfer) 
from— 
(i) the initial transferee of such trans-
fer or the institution-affiliated party or 
person for whose benefit such transfer was 
made; or 
(ii) any immediate or mediate trans-
feree of any such initial transferee. 
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319 
(C) RIGHTS
OF
TRANSFEREE
OR
OBLI-
GEE.—The Corporation may not recover under 
subparagraph (B)— 
(i) any transfer that takes for value, 
including satisfaction or securing of a 
present or antecedent debt, in good faith, 
or 
(ii) any immediate or mediate good 
faith transferee of such transferee. 
(D) RIGHTS UNDER THIS SUBSECTION.— 
The rights of the Corporation as receiver of a 
covered financial company under this subsection 
shall be superior to any rights of a trustee or 
any other party (other than any party which is 
a Federal agency) under title 11, United States 
Code. 
(E) DEFINITION.—For purposes of this 
subsection, the term ‘‘institution affiliated 
party’’ means— 
(i) any director, officer, employee, or 
controlling stockholder of, or agent for, a 
covered financial company; 
(ii) any shareholder, consultant, joint 
venture partner, and any other person as 
determined by the Corporation (by regula-
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320 
tion or otherwise) who participates in the 
conduct of the affairs of a covered finan-
cial company; and 
(iii) any independent contractor (in-
cluding any attorney, appraiser, or ac-
countant) who knowingly or recklessly par-
ticipates in— 
(I) any violation of any law or 
regulation; 
(II) any breach of fiduciary duty; 
or 
(III) any unsafe or unsound 
practice, 
which caused or is likely to cause more 
than a minimal financial loss to, or a sig-
nificant adverse effect on, the covered fi-
nancial company. 
(13) ATTACHMENT OF ASSETS AND OTHER IN-
JUNCTIVE RELIEF.—Subject to paragraph (14), any 
court of competent jurisdiction may, at the request 
of the Corporation, issue an order in accordance 
with Rule 65 of the Federal Rules of Civil Proce-
dure, including an order placing the assets of any 
person designated by the Corporation under the con-
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321 
trol of the court and appointing a trustee to hold 
such assets. 
(14) STANDARDS.— 
(A) SHOWING.—Rule 65 of the Federal 
Rules of Civil Procedure shall apply with re-
spect to any proceeding under paragraph (13) 
without regard to the requirement of such rule 
that the applicant show that the injury, loss, or 
damage is irreparable and immediate. 
(B) STATE PROCEEDING.—If, in the case 
of any proceeding in a State court, the court 
determines that rules of civil procedure avail-
able under the laws of such State provide sub-
stantially similar protections to such party’s 
right to due process as Rule 65 (as modified 
with respect to such proceeding by subpara-
graph (A)), the relief sought by the Corporation 
pursuant to paragraph (14) may be requested 
under the laws of such State. 
(15) TREATMENT
OF
CLAIMS
ARISING
FROM 
BREACH OF CONTRACTS EXECUTED BY THE COR-
PORATION
AS
RECEIVER.—Notwithstanding 
any 
other provision of this subsection, any final and 
unappealable judgment for monetary damages en-
tered against the Corporation as receiver for a cov-
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322 
ered financial company for the breach of an agree-
ment executed or approved by the Corporation after 
the date of its appointment shall be paid as an ad-
ministrative expense of the receiver. Nothing in this 
paragraph shall be construed to limit the power of 
a receiver to exercise any rights under contract or 
law, including to terminate, breach, cancel, or other-
wise discontinue such agreement. 
(16) ACCOUNTING
AND
RECORDKEEPING
RE-
QUIREMENTS.— 
(A) IN GENERAL.—The Corporation as re-
ceiver shall, consistent with the accounting and 
reporting practices and procedures established 
by the Corporation, maintain a full accounting 
of each receivership or other disposition of any 
covered financial company. 
(B) ANNUAL ACCOUNTING OR REPORT.— 
With respect to each receivership to which the 
Corporation was appointed, the Corporation 
shall make an annual accounting or report, as 
appropriate, available to the Secretary and the 
Comptroller General of the United States. 
(C) AVAILABILITY OF REPORTS.—Any re-
port prepared pursuant to subparagraph (B) 
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323 
shall be made available by the Corporation upon 
request to any member of the public. 
(D) RECORDKEEPING REQUIREMENT.— 
(i) IN GENERAL.—Except as provided 
in clause (ii), after the end of the 6-year 
period beginning on the date the Corpora-
tion is appointed as receiver of a covered 
financial company the Corporation may de-
stroy any records of such covered financial 
company which the Corporation, in the 
Corporation’s discretion, determines to be 
unnecessary unless directed not to do so by 
a court of competent jurisdiction or gov-
ernmental agency, or prohibited by law. 
(ii) OLD RECORDS.—Notwithstanding 
clause (i), the Corporation may destroy 
records of a covered financial company 
which are at least 10 years old as of the 
date on which the Corporation is appointed 
as the receiver of such company in accord-
ance with clause (i) at any time after such 
appointment is final, without regard to the 
6-year period of limitation contained in 
clause (i). 
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324 
(b) PRIORITY
OF
EXPENSES
AND
UNSECURED 
CLAIMS.— 
(1) IN GENERAL.—Unsecured claims against a 
covered financial company, or the receiver for such 
covered financial company under this section, that 
are proven to the satisfaction of the receiver shall 
have priority in the following order: 
(A) Administrative expenses of the re-
ceiver. 
(B) Any amounts owed to the United 
States, unless the United States agrees or con-
sents otherwise. 
(C) Any other general or senior liability of 
the covered financial company (which is not a 
liability described under subparagraph (D) or 
(E)). 
(D) Any obligation subordinated to general 
creditors (which is not an obligation described 
under subparagraph (E)). 
(E) Any obligation to shareholders, mem-
bers, general partners, limited partners or other 
persons with interests in the equity of the cov-
ered financial company arising as a result of 
their status as shareholders, members, general 
partners, limited partners or other persons with 
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interests in the equity of the covered financial 
company. 
(2) 
POST-RECEIVERSHIP
FINANCING
PRI-
ORITY.—In the event that the Corporation as re-
ceiver is unable to obtain unsecured credit for the 
covered financial company from commercial sources, 
the Corporation as receiver may obtain credit or 
incur debt on the part of the covered financial com-
pany which shall have priority over any or all admin-
istrative expenses of the receiver under paragraph 
(1)(A). 
(3) CLAIMS OF THE UNITED STATES.—Unse-
cured claims of the United States shall, at a min-
imum, have a higher priority than liabilities of the 
covered financial company that count as regulatory 
capital. 
(4) CREDITORS SIMILARLY SITUATED.—Subject 
to the priorities established under paragraphs (2) 
and (3), all claimants of a covered financial company 
that are similarly situated under paragraph (1) shall 
be treated in a similar manner, except that the re-
ceiver may take any action (including making pay-
ments) that does not comply with this subsection, 
if— 
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(A) the Corporation determines that such 
action is necessary to maximize the value of the 
assets of the covered financial company, to 
maximize the present value return from the sale 
or other disposition of the assets of the covered 
financial company, to minimize the amount of 
any loss realized upon the sale or other disposi-
tion of the assets of the covered financial com-
pany, or to contain or address serious adverse 
effects on financial stability or the U.S. econ-
omy; and 
(B) all claimants that are similarly situ-
ated under paragraph (1) receive not less than 
the amount provided in subsection (d)(2). 
(3) SECURED CLAIMS UNAFFECTED.—This sub-
section shall not affect secured claims, except to the 
extent that the security is insufficient to satisfy the 
claim and then only with regard to the difference be-
tween the claim and the amount realized from the 
security. 
(4) DEFINITIONS.—As used in this subsection, 
the term ‘‘administrative expenses of the receiver’’ 
includes— 
(A) the actual, necessary costs and ex-
penses incurred by the receiver in preserving 
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the assets of a covered financial company or liq-
uidating or otherwise resolving the affairs of a 
covered financial company for which the Cor-
poration has been appointed as receiver; and 
(B) any obligations that the receiver deter-
mines are necessary and appropriate to facili-
tate the smooth and orderly liquidation or other 
resolution of the covered financial company. 
(c) PROVISIONS RELATING TO CONTRACTS ENTERED 
INTO BEFORE APPOINTMENT OF RECEIVER.— 
(1) AUTHORITY TO REPUDIATE CONTRACTS.— 
In addition to any other rights a receiver may have, 
the Corporation as receiver for any covered financial 
company may disaffirm or repudiate any contract or 
lease— 
(A) to which the covered financial company 
is a party; 
(B) the performance of which the receiver, 
in the receiver’s discretion, determines to be 
burdensome; and 
(C) the disaffirmance or repudiation of 
which the receiver determines, in the receiver’s 
discretion, will promote the orderly administra-
tion of the covered financial company’s affairs. 
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(2) TIMING
OF
REPUDIATION.—The receiver 
appointed for any covered financial company under 
section 1604 shall determine whether or not to exer-
cise the rights of repudiation under this subsection 
within a reasonable period following such appoint-
ment. 
(3) CLAIMS
FOR
DAMAGES
FOR
REPUDI-
ATION.— 
(A) IN
GENERAL.—Except as otherwise 
provided in subparagraph (C) and paragraphs 
(4), (5), and (6), the liability of the receiver for 
the disaffirmance or repudiation of any contract 
pursuant to paragraph (1) shall be— 
(i) limited to actual direct compen-
satory damages; and 
(ii) determined as of— 
(I) the date of the appointment 
of the receiver; or 
(II) in the case of any contract 
or agreement referred to in paragraph 
(8), the date of the disaffirmance or 
repudiation of such contract or agree-
ment. 
(B) NO
LIABILITY
FOR
OTHER
DAM-
AGES.—For purposes of subparagraph (A), the 
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term ‘‘actual direct compensatory damages’’ 
does not include— 
(i) punitive or exemplary damages; 
(ii) damages for lost profits or oppor-
tunity; or 
(iii) damages for pain and suffering. 
(C) MEASURE OF DAMAGES FOR REPUDI-
ATION OF QUALIFIED FINANCIAL CONTRACTS.— 
In the case of any qualified financial contract 
or agreement to which paragraph (8) applies, 
compensatory damages shall be— 
(i) deemed to include normal and rea-
sonable costs of cover or other reasonable 
measures of damages utilized in the indus-
tries for such contract and agreement 
claims; and 
(ii) paid in accordance with this sub-
section and subsection (d) except as other-
wise specifically provided in this sub-
section. 
(4) LEASES UNDER WHICH THE COVERED FI-
NANCIAL COMPANY IS THE LESSEE.— 
(A) IN
GENERAL.—If the receiver dis-
affirms or repudiates a lease under which the 
covered financial company was the lessee, the 
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receiver shall not be liable for any damages 
(other than damages determined pursuant to 
subparagraph (B)) for the disaffirmance or re-
pudiation of such lease. 
(B) 
PAYMENTS
OF
RENT.—Notwith-
standing subparagraph (A), the lessor under a 
lease to which such subparagraph applies 
shall— 
(i) be entitled to the contractual rent 
accruing before the later of the date— 
(I) the notice of disaffirmance or 
repudiation is mailed; or 
(II) the disaffirmance or repudi-
ation becomes effective, unless the les-
sor is in default or breach of the 
terms of the lease; 
(ii) have no claim for damages under 
any acceleration clause or other penalty 
provision in the lease; and 
(iii) have a claim for any unpaid rent, 
subject to all appropriate offsets and de-
fenses, due as of the date of the appoint-
ment which shall be paid in accordance 
with this subsection and subsection (d). 
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331 
(5) LEASES UNDER WHICH THE COVERED FI-
NANCIAL COMPANY IS THE LESSOR.— 
(A) IN GENERAL.—If the receiver repudi-
ates an unexpired written lease of real property 
of the covered financial company under which 
the covered financial company is the lessor and 
the lessee is not, as of the date of such repudi-
ation, in default, the lessee under such lease 
may either— 
(i) treat the lease as terminated by 
such repudiation; or 
(ii) remain in possession of the lease-
hold interest for the balance of the term of 
the lease unless the lessee defaults under 
the terms of the lease after the date of 
such repudiation. 
(B) PROVISIONS APPLICABLE TO LESSEE 
REMAINING
IN
POSSESSION.—If any lessee 
under a lease described in subparagraph (A) re-
mains in possession of a leasehold interest pur-
suant to clause (ii) of such subparagraph— 
(i) the lessee— 
(I) shall continue to pay the con-
tractual rent pursuant to the terms of 
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332 
the lease after the date of the repudi-
ation of such lease; 
(II) may offset against any rent 
payment which accrues after the date 
of the repudiation of the lease, any 
damages which accrue after such date 
due to the nonperformance of any ob-
ligation of the covered financial com-
pany under the lease after such date; 
and 
(ii) the receiver shall not be liable to 
the lessee for any damages arising after 
such date as a result of the repudiation 
other than the amount of any offset al-
lowed under clause (i)(II). 
(6) CONTRACTS FOR THE SALE OF REAL PROP-
ERTY.— 
(A) IN GENERAL.—If the receiver repudi-
ates any contract (which meets the require-
ments of subsection (a)(7)) for the sale of real 
property and the purchaser of such real prop-
erty under such contract is in possession and is 
not, as of the date of such repudiation, in de-
fault, such purchaser may either— 
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333 
(i) treat the contract as terminated by 
such repudiation; or 
(ii) remain in possession of such real 
property. 
(B) PROVISIONS
APPLICABLE
TO
PUR-
CHASER
REMAINING
IN
POSSESSION.—If any 
purchaser of real property under any contract 
described in subparagraph (A) remains in pos-
session of such property pursuant to clause (ii) 
of such subparagraph— 
(i) the purchaser— 
(I) shall continue to make all 
payments due under the contract after 
the date of the repudiation of the con-
tract; and 
(II) may offset against any such 
payments any damages which accrue 
after such date due to the non-
performance (after such date) of any 
obligation of the covered financial 
company under the contract; and 
(ii) the receiver shall— 
(I) not be liable to the purchaser 
for any damages arising after such 
date as a result of the repudiation 
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334 
other than the amount of any offset 
allowed under clause (i)(II); 
(II) deliver title to the purchaser 
in accordance with the provisions of 
the contract; and 
(III) have no obligation under 
the contract other than the perform-
ance required under subclause (II). 
(C) ASSIGNMENT AND SALE ALLOWED.— 
(i) IN GENERAL.—No provision of this 
paragraph shall be construed as limiting 
the right of the receiver to assign the con-
tract described in subparagraph (A) and 
sell the property subject to the contract 
and the provisions of this paragraph. 
(ii) NO LIABILITY AFTER ASSIGNMENT 
AND SALE.—If an assignment and sale de-
scribed in clause (i) is consummated, the 
receiver shall have no further liability 
under the contract described in subpara-
graph (A) or with respect to the real prop-
erty which was the subject of such con-
tract. 
(7) PROVISIONS APPLICABLE TO SERVICE CON-
TRACTS.— 
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335 
(A) SERVICES
PERFORMED
BEFORE
AP-
POINTMENT.—In the case of any contract for 
services between any person and any covered fi-
nancial company for which the Corporation has 
been appointed receiver, any claim of such per-
son for services performed before the appoint-
ment of the receiver shall be— 
(i) a claim to be paid in accordance 
with subsections (a), (b) and (d); and 
(ii) deemed to have arisen as of the 
date the receiver was appointed. 
(B) SERVICES
PERFORMED
AFTER
AP-
POINTMENT AND PRIOR TO REPUDIATION.—If, 
in the case of any contract for services de-
scribed in subparagraph (A), the receiver ac-
cepts performance by the other person before 
the receiver makes any determination to exer-
cise the right of repudiation of such contract 
under this section— 
(i) the other party shall be paid under 
the terms of the contract for the services 
performed; and 
(ii) the amount of such payment shall 
be treated as an administrative expense of 
the receivership. 
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336 
(C) ACCEPTANCE
OF
PERFORMANCE
NO 
BAR TO SUBSEQUENT REPUDIATION.—The ac-
ceptance by any receiver of services referred to 
in subparagraph (B) in connection with a con-
tract described in such subparagraph shall not 
affect the right of the receiver to repudiate such 
contract under this section at any time after 
such performance. 
(8) CERTAIN
QUALIFIED
FINANCIAL
CON-
TRACTS.— 
(A) RIGHTS OF PARTIES TO CONTRACTS.— 
Subject to paragraphs (9) and (10) of this sub-
section and notwithstanding any other provision 
of this section (other than subsection (a)(7)), 
any other Federal law, or the law of any State, 
no person shall be stayed or prohibited from ex-
ercising— 
(i) any right such person has to cause 
the termination, liquidation, or acceleration 
of any qualified financial contract with a 
covered financial company which arises 
upon the appointment of the Corporation 
as receiver for such covered financial com-
pany at any time after such appointment; 
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337 
(ii) any right under any security 
agreement or arrangement or other credit 
enhancement related to one or more quali-
fied financial contracts described in clause 
(i). 
(iii) any right to offset or net out any 
termination value, payment amount, or 
other transfer obligation arising under or 
in connection with 1 or more contracts and 
agreements described in clause (i), includ-
ing any master agreement for such con-
tracts or agreements. 
(B) APPLICABILITY
OF
OTHER
PROVI-
SIONS.—Subsection (a)(9) shall apply in the 
case of any judicial action or proceeding 
brought against any receiver referred to in sub-
paragraph (A), or the covered financial com-
pany for which such receiver was appointed, by 
any party to a contract or agreement described 
in subparagraph (A)(i) with such company. 
(C) CERTAIN
TRANSFERS
NOT
AVOID-
ABLE.— 
(i) IN
GENERAL.—Notwithstanding 
paragraph (11), section 5242 of the Re-
vised Statutes of the United States or any 
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338 
other provision of Federal or State law re-
lating to the avoidance of preferential or 
fraudulent 
transfers, 
the 
Corporation, 
whether acting as such or as receiver of a 
covered financial company, may not avoid 
any transfer of money or other property in 
connection with any qualified financial con-
tract with a covered financial company. 
(ii) EXCEPTION FOR CERTAIN TRANS-
FERS.—Clause (i) shall not apply to any 
transfer of money or other property in con-
nection with any qualified financial con-
tract with a covered financial company if 
the Corporation determines that the trans-
feree had actual intent to hinder, delay, or 
defraud such company, the creditors of 
such company, or any receiver appointed 
for such company. 
(D) CERTAIN
CONTACTS
AND
AGREE-
MENTS DEFINED.—For purposes of this sub-
section, the following definitions shall apply: 
(i) 
QUALIFIED
FINANCIAL
CON-
TRACT.—The term ‘‘qualified financial 
contract’’ means any securities contract, 
commodity contract, forward contract, re-
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339 
purchase agreement, swap agreement, and 
any similar agreement that the Corpora-
tion determines by regulation, resolution, 
or order to be a qualified financial contract 
for purposes of this paragraph. 
(ii) 
SECURITIES
CONTRACT.—The 
term ‘‘securities contract’’— 
(I) means a contract for the pur-
chase, sale, or loan of a security, a 
certificate of deposit, a mortgage loan, 
any interest in a mortgage loan, a 
group or index of securities, certifi-
cates of deposit, or mortgage loans or 
interests therein (including any inter-
est therein or based on the value 
thereof) or any option on any of the 
foregoing, including any option to 
purchase or sell any such security, 
certificate of deposit, mortgage loan, 
interest, group or index, or option, 
and including any repurchase or re-
verse repurchase transaction on any 
such security, certificate of deposit, 
mortgage loan, interest, group or 
index, or option (whether or not such 
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340 
repurchase 
or 
reverse 
repurchase 
transaction is a ‘‘repurchase agree-
ment,’’ as defined in clause (v)); 
(II) does not include any pur-
chase, sale, or repurchase obligation 
under a participation in a commercial 
mortgage loan unless the Corporation 
determines by regulation, resolution, 
or order to include any such agree-
ment within the meaning of such 
term; 
(III) means any option entered 
into on a national securities exchange 
relating to foreign currencies; 
(IV) means the guarantee (in-
cluding by novation) by or to any se-
curities clearing agency of any settle-
ment of cash, securities, certificates of 
deposit, mortgage loans or interests 
therein, group or index of securities, 
certificates of deposit or mortgage 
loans or interests therein (including 
any interest therein or based on the 
value thereof) or option on any of the 
foregoing, including any option to 
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341 
purchase or sell any such security, 
certificate of deposit, mortgage loan, 
interest, group or index, or option 
(whether or not such settlement is in 
connection with any agreement or 
transaction referred to in subclauses 
(I) through (XII) (other than sub-
clause (II)); 
(V) means any margin loan; 
(VI) means any extension of 
credit for the clearance or settlement 
of securities transactions; 
(VII) means any loan transaction 
coupled with a securities collar trans-
action, any prepaid securities forward 
transaction, or any total return swap 
transaction coupled with a securities 
sale transaction; 
(VIII) means any other agree-
ment or transaction that is similar to 
any agreement or transaction referred 
to in this clause; 
(IX) means any combination of 
the agreements or transactions re-
ferred to in this clause; 
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342 
(X) means any option to enter 
into any agreement or transaction re-
ferred to in this clause; 
(XI) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), (IV), (V), (VI), (VII), 
(VIII), (IX), or (X), together with all 
supplements to any such master 
agreement, without regard to whether 
the master agreement provides for an 
agreement or transaction that is not a 
securities contract under this clause, 
except that the master agreement 
shall be considered to be a securities 
contract under this clause only with 
respect to each agreement or trans-
action under the master agreement 
that is referred to in subclause (I), 
(III), (IV), (V), (VI), (VII), (VIII), 
(IX), or (X); and 
(XII) means any security agree-
ment or arrangement or other credit 
enhancement related to any agree-
ment or transaction referred to in this 
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343 
clause, including any guarantee or re-
imbursement obligation in connection 
with any agreement or transaction re-
ferred to in this clause. 
(iii) 
COMMODITY
CONTRACT.—The 
term ‘‘commodity contract’’ means— 
(I) with respect to a futures com-
mission merchant, a contract for the 
purchase or sale of a commodity for 
future delivery on, or subject to the 
rules of, a contract market or board 
of trade; 
(II) with respect to a foreign fu-
tures commission merchant, a foreign 
future; 
(III) with respect to a leverage 
transaction 
merchant, 
a 
leverage 
transaction; 
(IV) with respect to a clearing 
organization, a contract for the pur-
chase or sale of a commodity for fu-
ture delivery on, or subject to the 
rules of, a contract market or board 
of trade that is cleared by such clear-
ing organization, or commodity option 
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344 
traded on, or subject to the rules of, 
a contract market or board of trade 
that is cleared by such clearing orga-
nization; 
(V) with respect to a commodity 
options dealer, a commodity option; 
(VI) any other agreement or 
transaction that is similar to any 
agreement or transaction referred to 
in this clause; 
(VII) any combination of the 
agreements or transactions referred to 
in this clause; 
(VIII) any option to enter into 
any agreement or transaction referred 
to in this clause; 
(IX) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
to any such master agreement, with-
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a com-
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345 
modity contract under this clause, ex-
cept that the master agreement shall 
be considered to be a commodity con-
tract under this clause only with re-
spect to each agreement or trans-
action under the master agreement 
that is referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII); or 
(X) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in this clause, 
including any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in this clause. 
(iv) FORWARD CONTRACT.—The term 
‘‘forward contract’’ means— 
(I) a contract (other than a com-
modity contract) for the purchase, 
sale, or transfer of a commodity or 
any similar good, article, service, 
right, or interest which is presently or 
in the future becomes the subject of 
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346 
dealing in the forward contract trade, 
or product or byproduct thereof, with 
a maturity date more than 2 days 
after the date the contract is entered 
into, including a repurchase or reverse 
repurchase transaction (whether or 
not such repurchase or reverse repur-
chase transaction is a ‘‘repurchase 
agreement’’, as defined in clause (v)), 
consignment, 
lease, 
swap, 
hedge 
transaction, deposit, loan, option, allo-
cated transaction, unallocated trans-
action, or any other similar agree-
ment; 
(II) any combination of agree-
ments or transactions referred to in 
subclauses (I) and (III); 
(III) any option to enter into any 
agreement or transaction referred to 
in subclause (I) or (II); 
(IV) a master agreement that 
provides for an agreement or trans-
action referred to in subclauses (I), 
(II), or (III), together with all supple-
ments to any such master agreement, 
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347 
without regard to whether the master 
agreement provides for an agreement 
or transaction that is not a forward 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a forward contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (II), or (III); or 
(V) any security agreement or ar-
rangement or other credit enhance-
ment related to any agreement or 
transaction referred to in subclause 
(I), (II), (III), or (IV), including any 
guarantee or reimbursement obliga-
tion in connection with any agreement 
or transaction referred to in any such 
subclause. 
(v) REPURCHASE
AGREEMENT.—The 
term ‘‘repurchase agreement’’ (which defi-
nition also applies to a reverse repurchase 
agreement)— 
(I) means an agreement, includ-
ing related terms, which provides for 
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348 
the transfer of one or more certifi-
cates of deposit, mortgage-related se-
curities (as such term is defined in 
the Securities Exchange Act of 1934), 
mortgage loans, interests in mortgage- 
related securities or mortgage loans, 
eligible bankers’ acceptances, qualified 
foreign government securities (which 
for purposes of this clause shall mean 
a security that is a direct obligation 
of, or that is fully guaranteed by, the 
central government of a member of 
the Organization for Economic Co-
operation and Development as deter-
mined by regulation or order adopted 
by the Federal Reserve Board) or se-
curities that are direct obligations of, 
or that are fully guaranteed by, the 
United States or any agency of the 
United States against the transfer of 
funds by the transferee of such certifi-
cates of deposit, eligible bankers’ ac-
ceptances, securities, mortgage loans, 
or interests with a simultaneous 
agreement by such transferee to 
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349 
transfer to the transferor thereof cer-
tificates of deposit, eligible bankers’ 
acceptances, 
securities, 
mortgage 
loans, or interests as described above, 
at a date certain not later than 1 year 
after such transfers or on demand, 
against the transfer of funds, or any 
other similar agreement; 
(II) does not include any repur-
chase obligation under a participation 
in a commercial mortgage loan unless 
the Corporation determines by regula-
tion, resolution, or order to include 
any such participation within the 
meaning of such term; 
(III) means any combination of 
agreements or transactions referred to 
in subclauses (I) and (IV); 
(IV) means any option to enter 
into any agreement or transaction re-
ferred to in subclause (I) or (III); 
(V) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), or (IV), together with all 
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350 
supplements to any such master 
agreement, without regard to whether 
the master agreement provides for an 
agreement or transaction that is not a 
repurchase 
agreement 
under 
this 
clause, except that the master agree-
ment shall be considered to be a re-
purchase agreement under this sub-
clause only with respect to each agree-
ment or transaction under the master 
agreement that is referred to in sub-
clause (I), (III), or (IV); and 
(VI) means any security agree-
ment or arrangement or other credit 
enhancement related to any agree-
ment or transaction referred to in 
subclause (I), (III), (IV), or (V), in-
cluding any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in any such subclause. 
(vi) SWAP
AGREEMENT.—The term 
‘‘swap agreement’’ means— 
(I) any agreement, including the 
terms and conditions incorporated by 
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351 
reference in any such agreement, 
which is an interest rate swap, option, 
future, or forward agreement, includ-
ing a rate floor, rate cap, rate collar, 
cross-currency rate swap, and basis 
swap; a spot, same day-tomorrow, to-
morrow-next, forward, or other for-
eign exchange, precious metals, or 
other commodity agreement; a cur-
rency swap, option, future, or forward 
agreement; an equity index or equity 
swap, option, future, or forward 
agreement; a debt index or debt swap, 
option, future, or forward agreement; 
a total return, credit spread or credit 
swap, option, future, or forward 
agreement; a commodity index or 
commodity swap, option, future, or 
forward agreement; weather swap, op-
tion, future, or forward agreement; an 
emissions swap, option, future, or for-
ward agreement; or an inflation swap, 
option, future, or forward agreement; 
(II) any agreement or transaction 
that is similar to any other agreement 
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352 
or transaction referred to in this 
clause and that is of a type that has 
been, is presently, or in the future be-
comes, the subject of recurrent deal-
ings in the swap or other derivatives 
markets (including terms and condi-
tions incorporated by reference in 
such agreement) and that is a for-
ward, swap, future, option or spot 
transaction on one or more rates, cur-
rencies, commodities, equity securities 
or other equity instruments, debt se-
curities or other debt instruments, 
quantitative measures associated with 
an occurrence, extent of an occur-
rence, or contingency associated with 
a financial, commercial, or economic 
consequence, or economic or financial 
indices or measures of economic or fi-
nancial risk or value; 
(III) any combination of agree-
ments or transactions referred to in 
this clause; 
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353 
(IV) any option to enter into any 
agreement or transaction referred to 
in this clause; 
(V) a master agreement that pro-
vides for an agreement or transaction 
referred to in subclause (I), (II), (III), 
or (IV), together with all supplements 
to any such master agreement, with-
out regard to whether the master 
agreement contains an agreement or 
transaction that is not a swap agree-
ment under this clause, except that 
the master agreement shall be consid-
ered to be a swap agreement under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (II), (III), or (IV); 
and 
(VI) any security agreement or 
arrangement or other credit enhance-
ment related to any agreements or 
transactions referred to in subclause 
(I), (II), (III), (IV), or (V), including 
any guarantee or reimbursement obli-
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354 
gation in connection with any agree-
ment or transaction referred to in any 
such subclause. 
(vii) DEFINITIONS RELATING TO DE-
FAULT.—When used in this paragraph and 
paragraph (10)— 
(I) The term ‘‘default’’ shall 
mean, with respect to a covered finan-
cial company, any adjudication or 
other official determination by any 
court of competent jurisdiction, or 
other public authority pursuant to 
which a conservator, receiver, or other 
legal custodian is appointed; and 
(II) The term ‘‘in danger of de-
fault’’ shall mean a covered financial 
company with respect to which the 
Corporation or appropriate State au-
thority has determined that— 
(aa) in the opinion of the 
Corporation or such authority— 
(AA) the covered finan-
cial company is not likely to 
be able to pay its obligations 
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355 
in the normal course of busi-
ness; and 
(BB) there is no rea-
sonable prospect that the 
covered financial company 
will be able to pay such obli-
gations without Federal as-
sistance; or 
(CC) in the opinion of 
the Corporation or such au-
thority— 
(bb) the covered financial 
company has incurred or is likely 
to incur losses that will deplete 
all or substantially all of its cap-
ital; and 
(cc) there is no reasonable 
prospect that the capital will be 
replenished without Federal as-
sistance. 
(viii) TREATMENT OF MASTER AGREE-
MENT AS ONE AGREEMENT.—Any master 
agreement for any contract or agreement 
described in any preceding clause of this 
subparagraph (or any master agreement 
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356 
for such master agreement or agreements), 
together with all supplements to such mas-
ter agreement, shall be treated as a single 
agreement and a single qualified financial 
contact. If a master agreement contains 
provisions relating to agreements or trans-
actions that are not themselves qualified fi-
nancial contracts, the master agreement 
shall be deemed to be a qualified financial 
contract only with respect to those trans-
actions that are themselves qualified finan-
cial contracts. 
(ix) TRANSFER.—The term ‘‘transfer’’ 
means every mode, direct or indirect, abso-
lute or conditional, voluntary or involun-
tary, of disposing of or parting with prop-
erty or with an interest in property, includ-
ing retention of title as a security interest 
and foreclosure of the covered financial 
company’s equity of redemption. 
(x) PERSON.—The term ‘‘person’’ in-
cludes any governmental entity in addition 
to any entity included in the definition of 
such term in section 1, title 1, United 
States Code. 
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357 
(E) CLARIFICATION.—No provision of law 
shall be construed as limiting the right or 
power of the Corporation, or authorizing any 
court or agency to limit or delay, in any man-
ner, the right or power of the Corporation to 
transfer any qualified financial contract in ac-
cordance with paragraphs (9) and (10) of this 
subsection or to disaffirm or repudiate any such 
contract in accordance with subsection (c)(1) of 
this section. 
(F) WALKAWAY
CLAUSES
NOT
EFFEC-
TIVE.— 
(i) IN
GENERAL.—Notwithstanding 
the provisions of subparagraph (A) and 
sections 403 and 404 of the Federal De-
posit Insurance Corporation Improvement 
Act of 1991, no walkaway clause shall be 
enforceable in a qualified financial contract 
of a covered financial company in default. 
(ii) LIMITED SUSPENSION OF CERTAIN 
OBLIGATIONS.—In the case of a qualified 
financial contract referred to in clause (i), 
any payment or delivery obligations other-
wise due from a party pursuant to the 
qualified financial contract shall be sus-
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358 
pended from the time the receiver is ap-
pointed until the earlier of— 
(I) the time such party receives 
notice that such contract has been 
transferred pursuant to paragraph 
(10)(A); or 
(II) 5:00 p.m. (eastern time) on 
the business day following the date of 
the appointment of the receiver. 
(iii) WALKAWAY CLAUSE DEFINED.— 
For purposes of this subparagraph, the 
term ‘‘walkaway clause’’ means any provi-
sion in a qualified financial contract that 
suspends, conditions, or extinguishes a 
payment obligation of a party, in whole or 
in part, or does not create a payment obli-
gation of a party that would otherwise 
exist, solely because of such party’s status 
as a nondefaulting party in connection 
with the insolvency of a covered financial 
company that is a party to the contract or 
the appointment of or the exercise of rights 
or powers by a receiver of such covered fi-
nancial company, and not as a result of a 
party’s exercise of any right to offset, 
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359 
setoff, or net obligations that exist under 
the contract, any other contract between 
those parties, or applicable law. 
(G) RECORDKEEPING.—The Corporation, 
in consultation with the Federal Reserve Board, 
may prescribe regulations requiring that the 
covered 
financial 
company 
maintain 
such 
records with respect to qualified financial con-
tracts (including market valuations) as the Cor-
poration determines to be necessary or appro-
priate in order to assist the receiver of the cov-
ered financial company in being able to exercise 
its rights and fulfill its obligations under this 
paragraph or paragraph (9) or (10). 
(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.— 
(A) IN GENERAL.—In making any transfer 
of assets or liabilities of a covered financial 
company in default which includes any qualified 
financial contract, the receiver for such covered 
financial company shall either— 
(i) transfer to one financial institu-
tion, other than a financial institution for 
which a conservator, receiver, trustee in 
bankruptcy, or other legal custodian has 
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360 
been appointed or which is otherwise the 
subject of a bankruptcy or insolvency pro-
ceeding— 
(I) all qualified financial con-
tracts between any person or any af-
filiate of such person and the covered 
financial company in default; 
(II) all claims of such person or 
any affiliate of such person against 
such covered financial company under 
any such contract (other than any 
claim which, under the terms of any 
such contract, is subordinated to the 
claims of general unsecured creditors 
of such company); 
(III) all claims of such covered fi-
nancial company against such person 
or any affiliate of such person under 
any such contract; and 
(IV) all property securing or any 
other credit enhancement for any con-
tract described in subclause (I) or any 
claim described in subclause (II) or 
(III) under any such contract; or 
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361 
(ii) transfer none of the qualified fi-
nancial contracts, claims, property or other 
credit enhancement referred to in clause (i) 
(with respect to such person and any affil-
iate of such person). 
(B) TRANSFER TO FOREIGN BANK, FINAN-
CIAL
INSTITUTION, OR
BRANCH
OR
AGENCY 
THEREOF.—In transferring any qualified finan-
cial contracts and related claims and property 
under subparagraph (A)(i), the receiver for the 
covered financial company shall not make such 
transfer to a foreign bank, financial institution 
organized under the laws of a foreign country, 
or a branch or agency of a foreign bank or fi-
nancial institution unless, under the law appli-
cable to such bank, financial institution, branch 
or agency, to the qualified financial contracts, 
and to any netting contract, any security agree-
ment or arrangement or other credit enhance-
ment related to one or more qualified financial 
contracts, the contractual rights of the parties 
to such qualified financial contracts, netting 
contracts, security agreements or arrangements, 
or other credit enhancements are enforceable 
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362 
substantially to the same extent as permitted 
under this section. 
(C) TRANSFER
OF
CONTRACTS
SUBJECT 
TO
THE
RULES
OF
A
CLEARING
ORGANIZA-
TION.—In the event that a receiver transfers 
any qualified financial contract and related 
claims, property, and credit enhancements pur-
suant to subparagraph (A)(i) and such contract 
is cleared by or subject to the rules of a clear-
ing organization, the clearing organization shall 
not be required to accept the transferee as a 
member by virtue of the transfer. 
(D) DEFINITIONS.—For purposes of this 
paragraph, the term ‘‘financial institution’’ 
means a broker or dealer, a depository institu-
tion, a futures commission merchant, a bridge 
financial company, or any other institution de-
termined by the Corporation by regulation to be 
a financial institution, and the term ‘‘clearing 
organization’’ has the same meaning as in sec-
tion 402 of the Federal Deposit Insurance Cor-
poration Improvement Act of 1991. 
(10) NOTIFICATION OF TRANSFER.— 
(A) IN GENERAL.—If— 
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363 
(i) the receiver for a covered financial 
company in default or in danger of default 
transfers any assets and liabilities of the 
covered financial company; and 
(ii) the transfer includes any qualified 
financial contract, 
the receiver shall notify any person who is a 
party to any such contract of such transfer by 
5:00 p.m. (eastern time) on the business day 
following the date of the appointment of the re-
ceiver. 
(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.— 
(i) RECEIVERSHIP.—A person who is 
a party to a qualified financial contract 
with a covered financial company may not 
exercise any right that such person has to 
terminate, liquidate, or net such contract 
under paragraph (8)(A) of this subsection 
solely by reason of or incidental to the ap-
pointment under this section of a receiver 
for the covered financial company (or the 
insolvency or financial condition of the cov-
ered financial company for which the re-
ceiver has been appointed)— 
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364 
(I) until 5:00 p.m. (eastern time) 
on the business day following the date 
of the appointment of the receiver; or 
(II) after the person has received 
notice that the contract has been 
transferred pursuant to paragraph 
(9)(A). 
(ii) NOTICE.—For purposes of this 
paragraph, the receiver for a covered fi-
nancial company shall be deemed to have 
notified a person who is a party to a quali-
fied financial contract with such covered fi-
nancial company if the receiver has taken 
steps reasonably calculated to provide no-
tice to such person by the time specified in 
subparagraph (A). 
(C) TREATMENT
OF
BRIDGE
FINANCIAL 
COMPANY.—For purposes of paragraph (9), a 
bridge financial company shall not be consid-
ered to be a financial institution for which a 
conservator, receiver, trustee in bankruptcy, or 
other legal custodian has been appointed or 
which is otherwise the subject of a bankruptcy 
or insolvency proceeding. 
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365 
(D) BUSINESS DAY DEFINED.—For pur-
poses of this paragraph, the term ‘‘business 
day’’ means any day other than any Saturday, 
Sunday, or any day on which either the New 
York Stock Exchange or the Federal Reserve 
Bank of New York is closed. 
(11) DISAFFIRMANCE
OR
REPUDIATION
OF 
QUALIFIED
FINANCIAL
CONTRACTS.—In exercising 
the rights of disaffirmance or repudiation of a re-
ceiver with respect to any qualified financial contract 
to which a covered financial company is a party, the 
receiver for such covered financial shall either— 
(A) disaffirm or repudiate all qualified fi-
nancial contracts between— 
(i) any person or any affiliate of such 
person; and 
(ii) the covered financial company in 
default; or 
(B) disaffirm or repudiate none of the 
qualified financial contracts referred to in sub-
paragraph (A) (with respect to such person or 
any affiliate of such person). 
(12) CERTAIN
SECURITY
AND
CUSTOMER
IN-
TERESTS
NOT
AVOIDABLE.—No provision of this 
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366 
subsection shall be construed as permitting the 
avoidance of any— 
(A) legally enforceable or perfected secu-
rity interest in any of the assets of any covered 
financial company except where such an inter-
est is taken in contemplation of the company’s 
insolvency or with the intent to hinder, delay, or 
defraud the company or the creditors of such 
company; or 
(B) legally enforceable interest in customer 
property. 
(13) AUTHORITY TO ENFORCE CONTRACTS.— 
(A) IN GENERAL.—The receiver may en-
force any contract, other than a director’s or of-
ficer’s liability insurance contract or a financial 
institution bond, entered into by the covered fi-
nancial company notwithstanding any provision 
of the contract providing for termination, de-
fault, acceleration, or exercise of rights upon, or 
solely by reason of, insolvency or the appoint-
ment of or the exercise of rights or powers by 
a receiver. 
(B) CERTAIN
RIGHTS
NOT
AFFECTED.— 
No provision of this paragraph may be con-
strued as impairing or affecting any right of the 
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367 
receiver to enforce or recover under a director’s 
or officer’s liability insurance contract or finan-
cial institution bond under other applicable law. 
(C) CONSENT REQUIREMENT.— 
(i) IN GENERAL.—Except as otherwise 
provided by this section, no person may ex-
ercise any right or power to terminate, ac-
celerate, or declare a default under any 
contract to which the covered financial 
company is a party, or to obtain possession 
of or exercise control over any property of 
the covered financial company or affect 
any contractual rights of the covered finan-
cial company, without the consent of the 
receiver, as appropriate, of the covered fi-
nancial company during the 90-day period 
beginning on the date of the appointment 
of the receiver, as applicable. 
(ii) CERTAIN EXCEPTIONS.—No provi-
sion of this subparagraph shall apply to a 
director or officer liability insurance con-
tract or a financial institution bond, to the 
rights of parties to certain qualified finan-
cial contracts pursuant to paragraph (8), 
or to the rights of parties to netting con-
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368 
tracts pursuant to subtitle A of title IV of 
the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4401 
et seq.), or shall be construed as permit-
ting the receiver to fail to comply with oth-
erwise enforceable provisions of such con-
tract. 
(14) EXCEPTION
FOR
FEDERAL
RESERVE 
BANKS AND CORPORATION SECURITY INTEREST.— 
No provision of this subsection shall apply with re-
spect to— 
(A) any extension of credit from any Fed-
eral Reserve bank or the Corporation to any 
covered financial company; or 
(B) any security interest in the assets of 
the covered financial company securing any 
such extension of credit. 
(15) SAVINGS CLAUSE.—The meanings of terms 
used in this subsection are applicable for purposes of 
this subsection only, and shall not be construed or 
applied so as to challenge or affect the characteriza-
tion, definition, or treatment of any similar terms 
under any other statute, regulation, or rule, includ-
ing, but not limited, to the Gramm-Leach-Bliley Act, 
the Legal Certainty for Bank Products Act of 2000, 
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369 
the securities laws (as that term is defined in section 
3(a)(47) of the Securities Exchange Act of 1934), 
and the Commodity Exchange Act. 
(d) VALUATION OF CLAIMS IN DEFAULT.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of Federal law or the law of any State, and 
regardless of the method which the Corporation de-
termines to utilize with respect to a covered financial 
company, including transactions authorized under 
subsection (h), this subsection shall govern the 
rights of the creditors of such covered financial com-
pany. 
(2) MAXIMUM
LIABILITY.—The maximum li-
ability of the Corporation, acting as receiver or in 
any other capacity, to any person having a claim 
against the receiver or the covered financial com-
pany for which such receiver is appointed shall equal 
the amount such claimant would have received if— 
(A) a determination had not been made 
under section 1603(b) with respect to the cov-
ered financial company; and 
(B) the covered financial company had 
been liquidated under title 11, United States 
Code, or any case related to title 11, United 
States Code (including a case initiated by the 
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370 
Securities Investor Protection Corporation with 
respect to a financial company subject to the 
Securities Investor Protection Act of 1970), or 
any State insolvency law. 
(3) ADDITIONAL PAYMENTS AUTHORIZED.— 
(A) IN GENERAL.—The Corporation may, 
as receiver and with the approval of the Sec-
retary, make additional payments or credit ad-
ditional amounts to or with respect to or for the 
account of any claimant or category of claim-
ants of a covered financial company if the Cor-
poration determines that such payments or 
credits are necessary or appropriate to— 
(i) minimize losses to the receiver 
from the resolution of the covered financial 
company under this section; or 
(ii) prevent or mitigate serious ad-
verse effects to financial stability or the 
United States economy. 
(B) MANNER OF PAYMENT.—The Corpora-
tion may make payments or credit amounts 
under subparagraph (A) directly to the claim-
ants or may make such payments or credit such 
amounts to a company other than a covered fi-
nancial company or a bridge financial company 
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371 
established with respect thereto in order to in-
duce such other company to accept liability for 
such claims. 
(e) LIMITATION ON COURT ACTION.—Except as pro-
vided in this section or at the request of the receiver ap-
pointed for a covered financial company, no court may 
take any action to restrain or affect the exercise of powers 
or functions of the receiver hereunder. 
(f) LIABILITY OF DIRECTORS AND OFFICERS.— 
(1) IN GENERAL.—A director or officer of a 
covered financial company may be held personally 
liable for monetary damages in any civil action de-
scribed in paragraph (2) by, on behalf of, or at the 
request or direction of the Corporation, which action 
is prosecuted wholly or partially for the benefit of 
the Corporation— 
(A) acting as receiver of such covered fi-
nancial company; 
(B) acting based upon a suit, claim, or 
cause of action purchased from, assigned by, or 
otherwise conveyed by such receiver; or 
(C) acting based upon a suit, claim, or 
cause of action purchased from, assigned by, or 
otherwise conveyed in whole or in part by a cov-
ered financial company or its affiliate in con-
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nection with assistance provided under section 
1604. 
(2) ACTIONS
COVERED.—Paragraph (1) shall 
apply with respect to actions for gross negligence, 
including any similar conduct or conduct that dem-
onstrates a greater disregard of a duty of care (than 
gross negligence) including intentional tortious con-
duct, as such terms are defined and determined 
under applicable State law. 
(3) SAVINGS
CLAUSE.—Nothing in this sub-
section shall impair or affect any right of the Cor-
poration under other applicable law. 
(g) DAMAGES.—In any proceeding related to any 
claim against a covered financial company’s director, offi-
cer, employee, agent, attorney, accountant, appraiser, or 
any other party employed by or providing services to a 
covered financial company, recoverable damages deter-
mined to result from the improvident or otherwise im-
proper use or investment of any covered financial com-
pany’s assets shall include principal losses and appropriate 
interest. 
(h) BRIDGE FINANCIAL COMPANIES.— 
(1) ORGANIZATION.— 
(A) PURPOSE.—The Corporation, as re-
ceiver of one or more covered financial compa-
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373 
nies may organize one or more bridge financial 
companies in accordance with this subsection. 
(B) AUTHORITIES.—Upon the creation of 
a bridge financial company under subparagraph 
(A) with respect to a covered financial com-
pany, such bridge financial company may— 
(i) assume such liabilities (including 
liabilities associated with any trust or cus-
tody business but excluding any liabilities 
that count as regulatory capital) of such 
covered financial company as the Corpora-
tion may, in its discretion, determine to be 
appropriate; 
(ii) purchase such assets (including 
assets associated with any trust or custody 
business) of such covered financial com-
pany as the Corporation may, in its discre-
tion, determine to be appropriate; and 
(iii) perform any other temporary 
function which the Corporation may, in its 
discretion, prescribe in accordance with 
this section. 
(2) CHARTER AND ESTABLISHMENT.— 
(A) ESTABLISHMENT.—If the Corporation 
is appointed as receiver for a covered financial 
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company, the Corporation may grant a Federal 
charter to and approve articles of association 
for one or more bridge financial company or 
companies with respect to such covered finan-
cial company which shall, by operation of law 
and immediately upon issuance of its charter 
and approval of its articles of association, be es-
tablished and operate in accordance with, and 
subject to, such charter, articles, and this sec-
tion. 
(B) MANAGEMENT.—Upon its establish-
ment, a bridge financial company shall be under 
the management of a board of directors ap-
pointed by the Corporation. 
(C) ARTICLES OF ASSOCIATION.—The arti-
cles of association and organization certificate 
of a bridge financial shall have such terms as 
the Corporation may provide, and shall be exe-
cuted by such representatives as the Corpora-
tion may designate. 
(D) TERMS
OF
CHARTER; RIGHTS
AND 
PRIVILEGES.—Subject to and in accordance 
with the provisions of this subsection, the Cor-
poration shall— 
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375 
(i) establish the terms of the charter 
of a bridge financial company and the 
rights, powers, authorities and privileges of 
a bridge financial company granted by the 
charter or as an incident thereto; and 
(ii) provide for, and establish the 
terms and conditions governing, the man-
agement (including, but not limited to, the 
bylaws and the number of directors of the 
board of directors) and operations of the 
bridge financial company. 
(E) TRANSFER
OF
RIGHTS
AND
PRIVI-
LEGES OF COVERED FINANCIAL COMPANY.— 
(i) IN
GENERAL.—Notwithstanding 
any other provision of Federal law or the 
law of any State, the Corporation may pro-
vide for a bridge financial company to suc-
ceed to and assume any rights, powers, au-
thorities or privileges of the covered finan-
cial company with respect to which the 
bridge financial company was established 
and, upon such determination by the Cor-
poration, the bridge financial company 
shall immediately and by operation of law 
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376 
succeed to and assume such rights, powers, 
authorities and privileges. 
(ii) 
EFFECTIVE
WITHOUT
AP-
PROVAL.—Any succession to or assumption 
by a bridge financial company of rights, 
powers, authorities or privileges of a cov-
ered financial company under clause (i) or 
otherwise shall be effective without any 
further approval under Federal or State 
law, assignment, or consent with respect 
thereto. 
(F) CORPORATE GOVERNANCE AND ELEC-
TION AND DESIGNATION OF BODY OF LAW.—To 
the extent permitted by the Corporation and 
consistent with this section and any rules, regu-
lations or directives issued by the Corporation 
under this section, a bridge financial company 
may elect to follow the corporate governance 
practices and procedures as are applicable to a 
corporation incorporated under the general cor-
poration law of the State of Delaware, or the 
State of incorporation or organization of the 
covered financial company with respect to which 
the bridge financial company was established, 
as such law may be amended from time to time. 
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377 
(G) CAPITAL.— 
(i) CAPITAL
NOT
REQUIRED.—Not-
withstanding any other provision of Fed-
eral or State law, a bridge financial com-
pany may, if permitted by the Corporation, 
operate without any capital or surplus, or 
with such capital or surplus as the Cor-
poration may in its discretion determine to 
be appropriate. 
(ii) NO CONTRIBUTION BY THE COR-
PORATION REQUIRED.—The Corporation is 
not required to pay capital into a bridge fi-
nancial company or to issue any capital 
stock on behalf of a bridge financial com-
pany established under this subsection. 
(iii) AUTHORITY.—If the Corporation 
determines that such action is advisable, 
the Corporation may cause capital stock or 
other securities of a bridge financial com-
pany established with respect to a covered 
financial company to be issued and offered 
for sale in such amounts and on such 
terms and conditions as the Corporation 
may, in its discretion, determine. 
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378 
(3) INTERESTS IN AND ASSETS AND OBLIGA-
TIONS OF COVERED FINANCIAL COMPANY.—Notwith-
standing paragraphs (1) or (2) or any other provi-
sion of law— 
(A) a bridge financial company shall as-
sume, acquire, or succeed to the assets or liabil-
ities of a covered financial company (including 
the assets or liabilities associated with any trust 
or custody business) only to the extent that 
such assets or liabilities are transferred by the 
Corporation to the bridge financial company in 
accordance with, and subject to the restrictions 
set forth in, paragraph (1)(B); and 
(B) a bridge financial company shall not 
assume, acquire, or succeed to any obligation 
that a covered financial company for which a 
receiver has been appointed may have to any 
shareholder, member, general partner, limited 
partner, or other person with an interest in the 
equity of the covered financial company that 
arises as a result of the status of that person 
having an equity claim in the covered financial 
company. 
(4) BRIDGE FINANCIAL COMPANY TREATED AS 
BEING
IN
DEFAULT
FOR
CERTAIN
PURPOSES.—A 
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379 
bridge financial company shall be treated as a cov-
ered financial company in default at such times and 
for such purposes as the Corporation may, in its dis-
cretion, determine. 
(5) TRANSFER OF ASSETS AND LIABILITIES.— 
(A) TRANSFER
OF
ASSETS
AND
LIABIL-
ITIES.—The Corporation, as receiver, may 
transfer any assets and liabilities of a covered 
financial company (including any assets or li-
abilities associated with any trust or custody 
business) to one or more bridge financial com-
panies in accordance with and subject to the re-
strictions of paragraph (1)(B). 
(B) SUBSEQUENT
TRANSFERS.—At any 
time after the establishment of a bridge finan-
cial company with respect to a covered financial 
company, the Corporation, as receiver, may 
transfer any assets and liabilities of such cov-
ered financial company as the Corporation may, 
in its discretion, determine to be appropriate in 
accordance with and subject to the restrictions 
of paragraph (1)(B). 
(C) TREATMENT OF TRUST OR CUSTODY 
BUSINESS.—For purposes of this paragraph, 
the trust or custody business, including fidu-
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380 
ciary appointments, held by any covered finan-
cial company is included among its assets and 
liabilities. 
(D) EFFECTIVE
WITHOUT
APPROVAL.— 
The transfer of any assets or liabilities, includ-
ing those associated with any trust or custody 
business of a covered financial company to a 
bridge financial company shall be effective with-
out any further approval under Federal or 
State law, assignment, or consent with respect 
thereto. 
(E) EQUITABLE
TREATMENT
OF
SIMI-
LARLY
SITUATED
CREDITORS.—The Corpora-
tion shall treat all creditors of a covered finan-
cial company that are similarly situated under 
subsection (b)(1) in a similar manner in exer-
cising the authority of the Corporation under 
this subsection to transfer any assets or liabil-
ities of the covered financial company to one or 
more bridge financial companies established 
with respect to such covered financial company, 
except that the Corporation may take actions 
(including making payments) that do not com-
ply with this subparagraph, if— 
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381 
(i) the Corporation determines that 
such actions are necessary to maximize the 
value of the assets of the covered financial 
company, to maximize the present value 
return from the sale or other disposition of 
the assets of the covered financial com-
pany, to minimize the amount of any loss 
realized upon the sale or other disposition 
of the assets of the covered financial com-
pany, or to contain or address serious ad-
verse effects to financial stability or the 
U.S. economy; and 
(ii) all creditors that are similarly sit-
uated under subsection (b)(1) receive not 
less than the amount provided in sub-
section (d)(2). 
(F) LIMITATION ON TRANSFER OF LIABIL-
ITIES.—Notwithstanding any other provision of 
law, the aggregate amount of liabilities of a cov-
ered financial company that are transferred to, 
or assumed by, a bridge financial company from 
a covered financial company may not exceed the 
aggregate amount of the assets of the covered 
financial company that are transferred to, or 
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382 
purchased by, the bridge financial company 
from the covered financial company. 
(6) STAY OF JUDICIAL ACTION.—Any judicial 
action to which a bridge financial company becomes 
a party by virtue of its acquisition of any assets or 
assumption of any liabilities of a covered financial 
company shall be stayed from further proceedings 
for a period of up to 45 days (or such longer period 
as may be agreed to upon the consent of all parties) 
at the request of the bridge financial company. 
(7) AGREEMENTS AGAINST INTEREST OF THE 
BRIDGE FINANCIAL COMPANY.—No agreement that 
tends to diminish or defeat the interest of the bridge 
financial company in any asset of a covered financial 
company acquired by the bridge financial company 
shall be valid against the bridge financial company 
unless such agreement is in writing and executed by 
an authorized officer or representative of the covered 
financial company. 
(8) NO FEDERAL STATUS.— 
(A) AGENCY STATUS.—A bridge financial 
company is not an agency, establishment, or in-
strumentality of the United States. 
(B) EMPLOYEE STATUS.—Representatives 
for purposes of paragraph (1)(B), directors, of-
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383 
ficers, employees, or agents of a bridge financial 
company are not, solely by virtue of service in 
any such capacity, officers or employees of the 
United States. Any employee of the Corporation 
or of any Federal instrumentality who serves at 
the request of the Corporation as a representa-
tive for purposes of paragraph (1)(B), director, 
officer, employee, or agent of a bridge financial 
company shall not— 
(i) solely by virtue of service in any 
such capacity lose any existing status as 
an officer or employee of the United States 
for purposes of title 5, United States Code, 
or any other provision of law; or 
(ii) receive any salary or benefits for 
service in any such capacity with respect to 
a bridge financial company in addition to 
such salary or benefits as are obtained 
through employment with the Corporation 
or such Federal instrumentality. 
(9) EXEMPT
TAX
STATUS.—Notwithstanding 
any other provision of Federal or State law, a bridge 
financial company, its franchise, property, and in-
come shall be exempt from all taxation now or here-
after imposed by the United States, by any territory, 
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384 
dependency, or possession thereof, or by any State, 
county, municipality, or local taxing authority. 
(10) FEDERAL AGENCY APPROVAL; ANTITRUST 
REVIEW.— 
(A) IN GENERAL.—If a transaction involv-
ing the merger or sale of a bridge financial 
company requires approval by a Federal agency, 
the transaction may not be consummated before 
the 5th calendar day after the date of approval 
by the Federal agency responsible for such ap-
proval with respect thereto. If, in connection 
with any such approval a report on competitive 
factors from the Attorney General is required, 
the Federal agency responsible for such ap-
proval shall promptly notify the Attorney Gen-
eral of the proposed transaction and the Attor-
ney General shall provide the required report 
within 10 days of the request. If a filing is re-
quired under the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976 with the Depart-
ment of Justice or the Federal Trade Commis-
sion, the waiting period shall expire not later 
than the 30th day following such filing notwith-
standing any other provision of Federal law or 
any attempt by any Federal agency to extend 
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385 
such waiting period, and no further request for 
information by any Federal agency shall be per-
mitted. 
(B) EMERGENCY.—If the Secretary, in 
consultation with the Chairman of the Federal 
Reserve Board, has found that the Corporation 
must act immediately to prevent the probable 
failure of the covered financial company in-
volved, the approvals and filings referred to in 
subparagraph (A) shall not be required and the 
transaction may be consummated immediately 
by the Corporation. 
(11) DURATION
OF
BRIDGE
FINANCIAL
COM-
PANY.—Subject to paragraphs (12), (13) and (14), 
the status of a bridge financial company as such 
shall terminate at the end of the 2-year period fol-
lowing the date it was granted a charter. The Cor-
poration may, in its discretion, extend the status of 
the bridge financial company as such for 3 addi-
tional 1-year periods. 
(12) TERMINATION OF BRIDGE FINANCIAL COM-
PANY STATUS.—The status of any bridge financial 
company as such shall terminate upon the earliest 
of— 
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386 
(A) the merger or consolidation of the 
bridge financial company with a company that 
is not a bridge financial company; 
(B) at the election of the Corporation, the 
sale of a majority of the capital stock of the 
bridge financial company to a company other 
than the Corporation and other than another 
bridge financial company; 
(C) the sale of 80 percent, or more, of the 
capital stock of the bridge financial company to 
a person other than the Corporation and other 
than another bridge financial company; 
(D) at the election of the Corporation, ei-
ther the assumption of all or substantially all of 
the liabilities of the bridge financial company by 
a company that is not a bridge financial com-
pany, or the acquisition of all or substantially 
all of the assets of the bridge financial company 
by a company that is not a bridge financial 
company, or other entity as permitted under 
applicable law; and 
(E) the expiration of the period provided in 
paragraph (11), or the earlier dissolution of the 
bridge financial company as provided in para-
graph (14). 
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387 
(13) EFFECT OF TERMINATION EVENTS.— 
(A) 
MERGER
OR
CONSOLIDATION.—A 
merger or consolidation as provided in para-
graph (12)(A) shall be conducted in accordance 
with, and shall have the effect provided in, the 
provisions of applicable law. For the purpose of 
effecting such a merger or consolidation, the 
bridge financial company shall be treated as a 
corporation organized under the laws of the 
State of Delaware (unless the law of another 
State has been selected by the bridge financial 
company in accordance with paragraph (2)(F)), 
and the Corporation shall be treated as the sole 
shareholder thereof, notwithstanding any other 
provision of State or Federal law. 
(B) CHARTER
CONVERSION.—Following 
the sale of a majority of the capital stock of the 
bridge financial company as provided in para-
graph (12)(B), the Corporation may amend the 
charter of the bridge financial company to re-
flect the termination of the status of the bridge 
financial company as such, whereupon the com-
pany shall have all of the rights, powers, and 
privileges under its constituent documents and 
applicable State or Federal law. In connection 
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388 
therewith, the Corporation may take such steps 
as may be necessary or convenient to reincor-
porate the bridge financial company under the 
laws of a State and, notwithstanding any provi-
sions of State or Federal law, such State-char-
tered corporation shall be deemed to succeed by 
operation of law to such rights, titles, powers 
and interests of the bridge financial company as 
the Corporation may provide, with the same ef-
fect as if the bridge financial company had 
merged with the State-chartered corporation 
under provisions of the corporate laws of such 
State. 
(C) SALE OF STOCK.—Following the sale 
of 80 percent or more of the capital stock of a 
bridge financial company as provided in para-
graph (12)(C), the company shall have all of 
the rights, powers, and privileges under its con-
stituent documents and applicable State or Fed-
eral law. In connection therewith, the Corpora-
tion may take such steps as may be necessary 
or convenient to reincorporate the bridge finan-
cial company under the laws of a State and, 
notwithstanding any provisions of State or Fed-
eral law, the State-chartered corporation shall 
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389 
be deemed to succeed by operation of law to 
such rights, titles, powers and interests of the 
bridge financial company as the Corporation 
may provide, with the same effect as if the 
bridge financial company had merged with the 
State-chartered corporation under provisions of 
the corporate laws of such State. 
(D) ASSUMPTION
OF
LIABILITIES
AND 
SALE OF ASSETS.—Following the assumption of 
all or substantially all of the liabilities of the 
bridge financial company, or the sale of all or 
substantially all of the assets of the bridge fi-
nancial company, as provided in paragraph 
(12)(D), at the election of the Corporation the 
bridge financial company may retain its status 
as such for the period provided in paragraph 
(11) or may be dissolved at the election of the 
Corporation. 
(E) AMENDMENTS
TO
CHARTER.—Fol-
lowing the consummation of a transaction de-
scribed in subparagraph (A), (B), (C), or (D) 
of paragraph (12), the charter of the resulting 
company shall be amended to reflect the termi-
nation of bridge financial company status, if ap-
propriate. 
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390 
(14) DISSOLUTION OF BRIDGE FINANCIAL COM-
PANY.— 
(A) IN
GENERAL.—Notwithstanding any 
other provision of State or Federal law, if a 
bridge financial company’s status as such has 
not previously been terminated by the occur-
rence of an event specified in subparagraph (A), 
(B), (C), or (D) of paragraph (12)— 
(i) the Corporation may, in its discre-
tion, dissolve the bridge financial company 
in accordance with this paragraph at any 
time; and 
(ii) the Corporation shall promptly 
commence dissolution proceedings in ac-
cordance with this paragraph upon the ex-
piration of the 2-year period following the 
date the bridge financial company was 
chartered, or any extension thereof, as pro-
vided in paragraph (11). 
(B) PROCEDURES.—The Corporation shall 
remain the receiver of a bridge financial com-
pany for the purpose of dissolving the bridge fi-
nancial company. The Corporation as such re-
ceiver shall wind up the affairs of the bridge fi-
nancial company in conformity with the provi-
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391 
sions of law relating to the liquidation of cov-
ered financial companies. With respect to any 
such bridge financial company, the Corporation 
as receiver shall have all the rights, powers, and 
privileges and shall perform the duties related 
to the exercise of such rights, powers, or privi-
leges granted by law to a receiver of a covered 
financial company and, notwithstanding any 
other provision of law, in the exercise of such 
rights, powers, and privileges the Corporation 
shall not be subject to the direction or super-
vision of any State agency or other Federal 
agency. 
(15) AUTHORITY TO OBTAIN CREDIT.— 
(A) IN GENERAL.—A bridge financial com-
pany may obtain unsecured credit and issue un-
secured debt. 
(B) INABILITY TO OBTAIN CREDIT.—If a 
bridge financial company is unable to obtain 
unsecured credit or issue unsecured debt, the 
Corporation may authorize the obtaining of 
credit or the issuance of debt by the bridge fi-
nancial company— 
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392 
(i) with priority over any or all of the 
obligations of the bridge financial com-
pany; 
(ii) secured by a lien on property of 
the bridge financial company that is not 
otherwise subject to a lien; or 
(iii) secured by a junior lien on prop-
erty of the bridge financial company that 
is subject to a lien. 
(C) LIMITATIONS.— 
(i) IN
GENERAL.—The Corporation, 
after notice and a hearing, may authorize 
the obtaining of credit or the issuance of 
debt by a bridge financial company that is 
secured by a senior or equal lien on prop-
erty of the bridge financial company that 
is subject to a lien only if— 
(I) the bridge financial company 
is unable to otherwise obtain such 
credit or issue such debt; and 
(II) there is adequate protection 
of the interest of the holder of the lien 
on the property with respect to which 
such senior or equal lien is proposed 
to be granted. 
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393 
(D) BURDEN OF PROOF.—In any hearing 
under this subsection, the Corporation has the 
burden of proof on the issue of adequate protec-
tion. 
(16) EFFECT ON DEBTS AND LIENS.—The re-
versal or modification on appeal of an authorization 
under this subsection to obtain credit or issue debt, 
or of a grant under this section of a priority or a 
lien, does not affect the validity of any debt so 
issued, or any priority or lien so granted, to an enti-
ty that extended such credit in good faith, whether 
or not such entity knew of the pendency of the ap-
peal, unless such authorization and the issuance of 
such debt, or the granting of such priority or lien, 
were stayed pending appeal. 
(i) SHARING RECORDS.—Whenever the Corporation 
has been appointed as receiver for a covered financial com-
pany, the Federal Reserve Board and the company’s pri-
mary appropriate regulatory agency, if any, shall each 
make all records relating to the company available to the 
receiver which may be used by the receiver in any manner 
the receiver determines to be appropriate. 
(j) 
EXPEDITED
PROCEDURES
FOR
CERTAIN 
CLAIMS.— 
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(1) TIME FOR FILING NOTICE OF APPEAL.— 
The notice of appeal of any order, whether interlocu-
tory or final, entered in any case brought by the 
Corporation against a covered financial company’s 
director, officer, employee, agent, attorney, account-
ant, or appraiser or any other person employed by 
or providing services to a covered financial company 
shall be filed not later than 30 days after the date 
of entry of the order. The hearing of the appeal shall 
be held not later than 120 days after the date of the 
notice of appeal. The appeal shall be decided not 
later than 180 days after the date of the notice of 
appeal. 
(2) SCHEDULING.—A court of the United 
States shall expedite the consideration of any case 
brought by the Corporation against a covered finan-
cial company’s director, officer, employee, agent, at-
torney, accountant, or appraiser or any other person 
employed by or providing services to a covered finan-
cial company. As far as practicable, the court shall 
give such case priority on its docket. 
(3) JUDICIAL
DISCRETION.—The court may 
modify the schedule and limitations stated in para-
graphs (1) and (2) in a particular case, based on a 
specific finding that the ends of justice that would 
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be served by making such a modification would out-
weigh the best interest of the public in having the 
case resolved expeditiously. 
(k) FOREIGN INVESTIGATIONS.—The Corporation, as 
receiver of any covered financial company and for pur-
poses of carrying out any power, authority, or duty with 
respect to a covered financial company— 
(1) may request the assistance of any foreign fi-
nancial authority and provide assistance to any for-
eign financial authority in accordance with section 
8(v) of the Federal Deposit Insurance Act as if the 
covered financial company were an insured deposi-
tory institution, the Corporation were the appro-
priate Federal banking agency for the company and 
any foreign financial authority were the foreign 
banking authority; and 
(2) may maintain an office to coordinate for-
eign investigations or investigations on behalf of for-
eign financial authorities. 
(l) PROHIBITION ON ENTERING SECRECY AGREE-
MENTS
AND PROTECTIVE ORDERS.—The Corporation 
may not enter into any agreement or approve any protec-
tive order which prohibits the Corporation from disclosing 
the terms of any settlement of an administrative or other 
action for damages or restitution brought by the Corpora-
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tion in its capacity as receiver for a covered financial com-
pany. 
(m) LIQUIDATION OF CERTAIN COVERED FINANCIAL 
COMPANIES OR BRIDGE FINANCIAL COMPANIES.—Not-
withstanding any other provision of law (other than a con-
flicting provision of this section), the Corporation, in con-
nection with the liquidation of any covered financial com-
pany or bridge financial company with respect to which 
the Corporation has been appointed as receiver, shall— 
(1) in the case of any covered financial com-
pany or bridge financial company that is or has a 
subsidiary that is a stockbroker (as that term is de-
fined in section 101 of title 11 of the United States 
Code) but is not a member of the Securities Investor 
Protection Corporation, apply the provisions of sub-
chapter III of chapter 7 of title 11 of the United 
States Code in respect of the distribution to any 
‘‘customer’’ of all ‘‘customer name securities’’ and 
‘‘customer property’’ (as such terms are defined in 
section 741 of such title 11) as if such covered fi-
nancial company or bridge financial company were a 
debtor for purposes of such subchapter; or 
(2) in the case of any covered financial com-
pany or bridge financial company that is a com-
modity broker (as that term is defined in section 
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101 of title 11 of the United States Code), apply the 
provisions of subchapter IV of chapter 7 of title 11 
of the United States Code in respect of the distribu-
tion to any ‘‘customer’’ of all ‘‘customer property’’ 
(as such terms are defined in section 761 of such 
title 11) as if such covered financial company or 
bridge financial company were a debtor for purposes 
of such subchapter. 
(n) SYSTEMIC DISSOLUTION FUND.— 
(1) ESTABLISHMENT AND PURPOSE.— 
(A) IN GENERAL.—There is established in 
the Treasury a separate fund to be known as 
the ‘‘Systemic Dissolution Fund’’— 
(i) to facilitate and provide for the or-
derly and complete dissolution of any failed 
financial company or companies that pose 
a systemic threat to the financial markets 
or economy, as determined under 1603(b); 
and 
(ii) to ensure that any taxpayer funds 
utilized to facilitate such liquidations are 
fully repaid from assessments levied on fi-
nancial companies that have assets of 
$50,000,000,000, adjusted for inflation, or 
more. 
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(B) ADJUSTMENT
OF
THRESHOLD.—The 
threshold referred to in subparagraph (A)(ii) 
shall be adjusted on an annual basis, based on 
the growth of assets owned or managed by fi-
nancial companies (as defined in section 
1602(9)). 
(2) AUTHORITY.—The Systemic Dissolution 
Fund shall be administered by the Corporation, 
which shall have exclusive authority to— 
(A) impose assessments on covered finan-
cial companies in accordance with paragraphs 
(6) through (8); 
(B) maintain and administer the Fund in 
a manner so as to make clear to the general 
public that such Fund is unrelated to any other 
Fund maintained and administered by the Cor-
poration, including the Deposit Insurance 
Fund; 
(C) utilize the Fund to facilitate the dis-
solution of a covered financial company (as de-
fined by section 1602(5)) as provided in para-
graph (3), or take such other actions as are au-
thorized by this subtitle; 
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(D) invest the Fund in accordance with 
section 13(a) of the Federal Deposit Insurance 
Act; and 
(E) exercise borrowing authority as pre-
scribed in subsection (o). 
(3) USES.— 
(A) The Fund shall be available to the 
Corporation for use with respect to the dissolu-
tion of a covered financial company to— 
(i) cover the costs incurred by the 
Corporation, including as receiver, in exer-
cising its rights, authorities, and powers 
and fulfilling its obligations and respon-
sibilities under this section; 
(ii) repay such funds in accordance 
with subsection (o)(6); and 
(iii) cover the costs of systemic sta-
bilization actions, pursuant to subsections 
(d) and (f) of section 1604. 
(B) The Fund shall not be used in any 
manner to benefit any officer or director of 
such company removed pursuant to section 
1604(f)(6). 
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(4) DEPOSITS TO FUND.—All amounts assessed 
against a financial company under this section shall 
be deposited into the Fund. 
(5) SIZE OF FUND.—The Corporation shall, by 
rule, establish the minimum size of the Fund con-
sistent with subparagraphs (C) and (D) of para-
graph (6). 
(6) ASSESSMENTS.— 
(A) ASSESSMENTS TO MAINTAIN FUND.— 
The Corporation shall impose risk-based assess-
ments on financial companies in such amount 
and manner and subject to such terms and con-
ditions that the Corporation determines, by reg-
ulation and in consultation with the Council, 
are necessary for the amount in the Fund to at 
least equal the minimum size established pursu-
ant to paragraph (5). 
(B) ASSESSMENTS
TO
REPLENISH
THE 
FUND.—If the Fund falls below the minimum 
size established pursuant to paragraph (5), the 
Corporation shall impose assessments on finan-
cial companies in such amounts and manner 
and subject to such terms and conditions as the 
Corporation determines, by regulation and in 
consultation with the Council, are necessary to 
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replenish the fund subject to the limitations in 
subparagraph (D). 
(C) MINIMUM ASSESSMENT THRESHOLD.— 
(i) IN
GENERAL.—The Corporation 
shall not assess financial companies with 
less than $50,000,000,000, adjusted for in-
flation, of assets on a consolidated basis, 
subject to any differentiation as permitted 
in paragraph (8) and shall assess financial 
companies with $10,000,000,000, adjusted 
for inflation or more in assets in accord-
ance with paragraphs (7) and (8). 
(ii) HEDGE FUNDS.—The Corporation 
shall not assess financial companies that 
manage hedge funds (as defined by the 
Corporation for the purpose of this section, 
in consultation with the Securities and Ex-
change 
Commission) 
with 
less 
than 
$10,000,000,000, adjusted for inflation, of 
assets, under management on a consoli-
dated basis, subject to any differentiation 
as permitted in paragraph (8) and shall 
assess any financial companies that man-
age hedge funds with $10,000,000,000 or 
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more of assets under management in ac-
cordance with paragraphs (7) and (8). 
(D) MAXIMUM SIZE OF FUND VIA ASSESS-
MENTS.— 
(i) IN
GENERAL.—The Corporation 
shall suspend assessments on financial 
companies on the day after the date on 
which the total of the assessments, exclud-
ing interest or other earnings from invest-
ments made pursuant to paragraph (2)(D), 
equals $150,000,000,000. 
(ii) EXCEPTIONS.—Any suspension of 
assessments under clause (i)— 
(I) may be set aside if the Fund 
falls below $150,000,000,000; and 
(II) shall be set aside if the Fund 
falls below the minimum level estab-
lished in subparagraph (C). 
(7) FACTORS.—The Corporation, in consulta-
tion with the Council shall establish a risk matrix to 
be used in establishing assessments that takes into 
account— 
(A) the actual or expected risk of losses to 
the Fund; 
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(B) economic conditions generally affecting 
financial companies so as to allow assessments 
and the Fund to increase during more favorable 
economic conditions and to decrease during less 
favorable economic conditions; 
(C) any assessments imposed on a finan-
cial company or an affiliate of a financial com-
pany that— 
(i) is an insured depository institu-
tion, assessed pursuant to section 7 or 
13(c)(4)(G) of the Federal Deposit Insur-
ance Act; 
(ii) is a member of the Securities In-
vestor Protection Corporation, assessed 
pursuant to section 4 of the Securities In-
vestor Protection Act of 1970 (15 U.S.C. 
78ddd); 
(iii) is an insured credit union, as-
sessed pursuant to section 202(c)(1)(A)(i) 
of the Federal Credit Union Act (12 
U.S.C. 1782(c)(1)(A)(i)); or 
(iv) is an insurance company, assessed 
pursuant to applicable State law to cover 
(or reimburse payments made to cover) the 
costs of the rehabilitation, liquidation or 
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other State insolvency proceeding with re-
spect to 1 or more insurance companies; 
(D) the risks presented by the financial 
company to the financial system and the extent 
to which the financial company has benefitted, 
or likely would benefit, from the dissolution of 
a financial company under this title, includ-
ing— 
(i) the amount, different categories, 
and concentrations of assets of the finan-
cial company and its affiliates, including 
both on-balance sheet and off-balance sheet 
assets; 
(ii) the activities of the financial com-
pany and its affiliates; 
(iii) the relevant market share of the 
financial company and its affiliates; 
(iv) the extent to which the financial 
company is leveraged; 
(v) the potential exposure to sudden 
calls on liquidity precipitated by economic 
distress; 
(vi) the amount, maturity, volatility, 
and stability of the company’s financial ob-
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ligations to, and relationship with, other fi-
nancial companies; 
(vii) the amount, maturity, volatility, 
and stability of the company’s liabilities, 
including the degree of reliance on short- 
term funding, taking into consideration ex-
isting systems for measuring a company’s 
risk-based capital; 
(viii) the stability and variety of the 
company’s sources of funding; 
(ix) the company’s importance as a 
source of credit for households, businesses, 
and State and local governments and as a 
source of liquidity for the financial system; 
(x) the extent to which assets are sim-
ply managed and not owned by the finan-
cial company and the extent to which own-
ership of assets under management is dif-
fuse; and 
(xi) the amount, different categories, 
and concentrations of liabilities, both in-
sured and uninsured, contingent and non-
contingent, including both on-balance sheet 
and off-balance sheet liabilities, of the fi-
nancial company and its affiliates; and 
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(E) such other factors as the Corporation, 
in consultation with the Council, may determine 
to be appropriate. 
(8) REQUIREMENT
FOR
EQUITABLE
TREAT-
MENT IN ASSESSMENTS.—In establishing the assess-
ment system for the Fund, the Corporation, by regu-
lation and in consultation with the Council, shall dif-
ferentiate among financial companies based on com-
plexity of operations or organization, interconnected-
ness, size, direct or indirect activities, and any other 
factors the Corporation or the Council may deem ap-
propriate to ensure that the assessments charged eq-
uitably reflect the risk posed to the Fund by par-
ticular classes of financial companies. 
(9) MINIMUM COMMENT PERIOD.—In order to 
ensure sufficient opportunity for public and congres-
sional review and evaluation of any assessment sys-
tem, any proposed regulations regarding the imple-
mentation of the assessment system under this sub-
title shall provide an opportunity for public comment 
during a period of not less than 60 days. 
(o) BORROWING AUTHORITY.— 
(1) BORROWING FROM TREASURY.— 
(A) IN GENERAL.—Subject to paragraphs 
(3), (4), and (5), the Corporation may borrow 
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from the Treasury, and the Secretary of the 
Treasury is authorized to lend to the Corpora-
tion on such terms as may be fixed by the Cor-
poration and the Secretary, such funds as in 
the judgment of the Board of Directors of the 
Corporation are required, in addition to the 
funds available in the Systemic Dissolution 
Fund, to permit the orderly dissolution of 1 or 
more covered systemically significant financial 
companies, covered affiliates, or covered sub-
sidiaries under this title. 
(B) RATE OF INTEREST.—The rate of in-
terest to be charged in connection with any loan 
made pursuant to this subsection shall not be 
less than an amount determined by the Sec-
retary of the Treasury, taking into consider-
ation current market yields on outstanding 
marketable obligations of the United States of 
comparable maturities. 
(2) PUBLIC DEBT ISSUANCES.—For the pur-
poses described in subsection (1), the Secretary of 
the Treasury may use as a public-debt transaction 
the proceeds of the sale of any securities hereafter 
issued under chapter 31 of title 31, and the pur-
poses for which securities may be issued under chap-
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408 
ter 31 of title 31 are extended to include such loans. 
All loans and repayments under this subsection shall 
be treated as public-debt transactions of the United 
States. 
(3) BORROWING AUTHORITY WHEN FUND AS-
SETS ARE LESS THAN $150,000,000,000.— 
(A) Subject to paragraph (B), the bor-
rowing authority granted in paragraph (1) shall 
be available to the Corporation where— 
(i) the value of the Fund is less than 
$150,000,000,000; 
(ii) the Corporation determines that 
the immediate dissolution of a financial 
company or financial companies requires 
more funds than are available in the Fund; 
and 
(iii) the Corporation has provided a 
specific plan for repayment under para-
graph (7)(A). 
(B) The Corporation may borrow, and the 
Secretary may lend, any amount of funds that, 
when added to the amount available in the 
Fund on the date the Corporation makes a re-
quest to borrow funds, would not exceed 
$150,000,000,000. 
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(C) For purposes of paragraph (1), the 
Corporation’s total debt may not exceed 
$150,000,000,000 (not including any funds bor-
rowed pursuant to subsection (s)). 
(4) ADDITIONAL BORROWING AUTHORITY.— 
(A) If at any time the Corporation antici-
pates that the dissolution of any financial com-
pany or financial companies will require funds 
in excess of $150,000,000,000— 
(i) the Corporation shall submit to the 
Secretary and the President a written re-
quest for additional borrowing authority 
subject to the limitation in subparagraph 
(5), which shall be accompanied by a cer-
tification indicating the anticipated amount 
needed, the basis on which such amount 
was determined, and any such information 
as the Secretary may deem necessary; and 
(ii) the President shall transmit a re-
quest to the House of Representatives and 
the Senate requesting the additional bor-
rowing authority, which shall include the 
certification referred to in clause (i) and 
which includes a repayment schedule as 
outlined in paragraph (7). 
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(B) Any request for borrowing authority 
under paragraph (A) shall be effective only if 
approved by affirmative vote of the House of 
Representatives and the Senate in accordance 
with subsection (s). 
(5) LIMITATIONS ON ADDITIONAL BORROWING 
AUTHORITY.— 
(A) No request for borrowing authority is 
permitted under paragraph (4) unless the 
President, in consultation with the Council, cer-
tifies to the House of Representatives and the 
Senate that the borrowing authority is nec-
essary to avoid or mitigate an imminent finan-
cial emergency. 
(B) The amount of borrowing authority re-
quested under subparagraph (A)(i) may not ex-
ceed $50,000,000,000. 
(6) PROCEEDS FROM LIQUIDATION, REPAYMENT 
OF FUNDS.— 
(A) IN GENERAL.—The Corporation shall 
take such measures as may be appropriate to 
maximize the amount of funds from any dis-
solution that may be available for repayment 
under subparagraph (B) consistent with sys-
temic concerns. 
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411 
(B) REPAYMENT PRIORITY.—Amounts re-
alized from the dissolution of any financial com-
pany under this subtitle that are not otherwise 
utilized by the Corporation to dissolve a finan-
cial company under subsection (n)(3)(A) shall 
be paid— 
(i) first, to repay any costs incurred 
in exercising the borrowing authority 
granted in paragraph (1); and 
(ii) second, to recapitalize the Fund to 
such level as the Corporation deems nec-
essary, 
but 
not 
to 
exceed 
$150,000,000,000. 
(7) REPAYMENT
PLAN
AND
SCHEDULES
RE-
QUIRED FOR ANY BORROWING.— 
(A) IN
GENERAL.—No amount may be 
provided by the Secretary of the Treasury to 
the Corporation under paragraph (1) unless an 
agreement is in effect between the Secretary 
and the Corporation which— 
(i) provides a specific plan and sched-
ule for assessments under (n)(6) to achieve 
the repayment of the outstanding amount 
of any borrowing under such subsection; 
and 
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(ii) demonstrates that income to the 
Corporation from assessments under this 
section will be sufficient to amortize the 
outstanding balance within the period es-
tablished in the repayment schedule and 
pay the interest accruing on such balance. 
(B) CONSULTATION WITH AND REPORT TO 
CONGRESS.—The Secretary of the Treasury and 
the Corporation shall— 
(i) consult with the Committee on Fi-
nancial Services of the House of Rep-
resentatives and the Committee on Bank-
ing, Housing, and Urban Affairs of the 
Senate on the terms of any repayment 
schedule agreement; and 
(ii) submit a copy of each repayment 
schedule agreement to the Committee on 
Financial Services of the House of Rep-
resentatives and the Committee on Bank-
ing, Housing, and Urban Affairs of the 
Senate before the end of the 30-day period 
beginning on the date any amount is pro-
vided by the Secretary of the Treasury to 
the Corporation under paragraph (1). 
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413 
(p) INFORMATION GATHERING AND VERIFICATION; 
PAYMENTS .— 
(1) IN
GENERAL.—The Corporation may re-
quire each financial company to make available such 
information as the Corporation may require— 
(A) for purposes of— 
(i) determining the financial com-
pany’s assessment under this section; 
(ii) verifying the accuracy of informa-
tion; and 
(iii) preparing for resolution, includ-
ing a resolution plan as required by this 
section; and 
(B) for such other purposes as may be ap-
propriate and necessary to promote the orderly 
dissolution of the financial company. 
(2) USE OF EXISTING REPORTS.—The Corpora-
tion shall, to the fullest extent possible, accept— 
(A) reports that a financial company has 
provided or been required to provide to other 
Federal or State supervisors or to appropriate 
self-regulatory organizations; 
(B) information that is otherwise required 
to be reported publicly; and 
(C) externally audited financial statements. 
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414 
(3) AUTHORITY
FOR
ON-SITE
INSPECTION.— 
The Corporation may make on-site inspections of a 
financial company’s books and records as necessary 
to carry out the purposes of this subsection. 
(4) RULEMAKING.—The Corporation may pro-
mulgate such rules or regulations as are necessary 
or appropriate to implement this subsection. 
(5) PAYMENTS OF ASSESSMENTS REQUIRED .— 
(A) IN GENERAL.—Any financial company 
subject to an assessment under this section 
shall pay to the Corporation such assessment. 
(B) FORM OF PAYMENT.—The payments 
required under this section shall be made in 
such manner and at such time or times as the 
Corporation, in consultation with the Council, 
shall prescribe by regulation. 
(6) PENALTY FOR FAILURE TO TIMELY PAY AS-
SESSMENTS.—Any financial company that fails or 
refuses to pay any assessment under this section 
shall be subject to a penalty under section 18(h) of 
the Federal Deposit Insurance Act, as if that finan-
cial company were an insured depository institution. 
(q) ASSESSMENT ACTIONS.— 
(1) IN
GENERAL.—The Corporation, in any 
court of competent jurisdiction, shall be entitled to 
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415 
recover from any financial company the amount of 
any unpaid assessment lawfully payable by such 
company. 
(2) 
STATUTE
OF
LIMITATIONS.—Notwith-
standing any other provision in Federal law, or the 
law of any State— 
(A) any action by a financial company to 
recover from the Corporation the overpaid 
amount of any assessment shall be brought 
within 3 years after the date the assessment 
payment was due, subject to subparagraph (C); 
(B) any action by the Corporation to re-
cover from a financial company the underpaid 
amount of any assessment shall be brought 
within 3 years after the date the assessment 
payment was due, subject to subparagraph (C); 
and 
(C) if a financial company has made a 
false or fraudulent statement with intent to 
evade any or all of its assessment, the Corpora-
tion shall have until 3 years after the date of 
discovery of the false or fraudulent statement in 
which to bring an action to recover the under-
paid amount. 
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416 
(r) REQUIREMENT
TO MAINTAIN SYSTEMIC DIS-
SOLUTION FUND AS SEPARATE FUND.—The Systemic 
Dissolution Fund shall at all times be administered in a 
manner that is separate and distinct from the Deposit In-
surance Fund, and the Corporation shall take such actions 
as may be necessary to ensure that such distinction is 
made with respect to internal processes and procedures 
as well as with regard to any public information, discus-
sion or other communications involving either Fund. 
(s) CONGRESSIONAL
APPROVAL
OF
ADDITIONAL 
BORROWING AUTHORITY.— 
(1) INTRODUCTION.—On the day on which the 
request of the President is received by the House of 
Representatives and the Senate under subsection 
(o)(4)(A)(ii), a joint resolution specified in para-
graph (5) shall be introduced in the House by the 
majority leader and minority leader of the House 
and in the Senate by the majority leader and minor-
ity leader of the Senate. If either House is not in 
session on the day on which such a request is re-
ceived, the joint resolution with respect to such re-
quest shall be introduced in that House, as provided 
in the preceding sentence, on the first day thereafter 
on which that House is in session. 
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(2) CONSIDERATION IN THE HOUSE OF REP-
RESENTATIVES.— 
(A) REPORTING
AND
DISCHARGE.—Any 
committee of the House of Representatives to 
which a joint resolution introduced under para-
graph (1) is referred shall report such joint res-
olution to the House not later than 5 calendar 
days after the applicable date of introduction of 
the joint resolution. If a committee fails to re-
port such joint resolution within that period, 
the committee shall be discharged from further 
consideration of the joint resolution and the 
joint resolution shall be referred to the appro-
priate calendar. 
(B) PROCEEDING
TO
CONSIDERATION.— 
After all committees authorized to consider a 
joint resolution have reported such joint resolu-
tion to the House or have been discharged from 
its consideration, it shall be in order, not later 
than the sixth day after the applicable date of 
introduction of the joint resolution, to move to 
proceed to consider the joint resolution in the 
House. Such a motion shall not be in order 
after the House has disposed of a motion to 
proceed on the joint resolution and shall not be 
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in order if the House has received a message 
from the Senate under paragraph (4)(C). The 
previous question shall be considered as ordered 
on the motion to its adoption without inter-
vening motion. A motion to reconsider the vote 
by which the motion is disposed of shall not be 
in order. 
(C) CONSIDERATION.—The joint resolution 
shall be considered in the House and shall be 
considered as read. All points of order against 
a joint resolution and against its consideration 
are waived. The previous question shall be con-
sidered as ordered on the joint resolution to its 
passage without intervening motion except two 
hours of debate equally divided and controlled 
by the proponent and an opponent. A motion to 
reconsider the vote on passage of a joint resolu-
tion shall not be in order. 
(3) CONSIDERATION IN THE SENATE.— 
(A) PLACEMENT ON CALENDAR.—Upon in-
troduction in the Senate, the joint resolution 
shall be placed immediately on the calendar. 
(B) FLOOR CONSIDERATION.— 
(i) IN
GENERAL.—Notwithstanding 
rule XXII of the Standing Rules of the 
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Senate, it is in order at any time during 
the period beginning on the 4th day after 
the applicable date of introduction in the 
Senate and ending on the 6th day after the 
applicable date of introduction in the Sen-
ate (even though a previous motion to the 
same effect has been disagreed to) to move 
to proceed to the consideration of the joint 
resolution, and all points of order against 
the joint resolution (and against consider-
ation of the joint resolution) are waived. 
The motion to proceed is not debatable. 
The motion is not subject to a motion to 
postpone. A motion to reconsider the vote 
by which the motion is agreed to or dis-
agreed to shall not be in order. If a motion 
to proceed to the consideration of the reso-
lution is agreed to, the joint resolution 
shall remain the unfinished business until 
disposed of. 
(ii) DEBATE.—Debate on the joint 
resolution, and on all debatable motions 
and appeals in connection therewith, shall 
be limited to not more than 10 hours, 
which shall be divided equally between the 
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majority and minority leaders or their des-
ignees. A motion further to limit debate is 
in order and not debatable. An amendment 
to, or a motion to postpone, or a motion to 
proceed to the consideration of other busi-
ness, or a motion to recommit the joint 
resolution is not in order. 
(iii) VOTE ON PASSAGE.—The vote on 
passage shall occur immediately following 
the conclusion of the debate on a joint res-
olution, and a single quorum call at the 
conclusion of the debate if requested in ac-
cordance with the rules of the Senate. 
(iv) RULINGS OF THE CHAIR ON PRO-
CEDURE.—Appeals from the decisions of 
the Chair relating to the application of the 
rules of the Senate, as the case may be, to 
the procedure relating to a joint resolution 
shall be decided without debate. 
(4) RULES RELATING TO SENATE AND HOUSE 
OF REPRESENTATIVES.— 
(A) COORDINATION
WITH
ACTION
BY 
OTHER HOUSE.—If, before the passage by one 
House of a joint resolution of that House, that 
House receives from the other House a joint 
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resolution, then the following procedures shall 
apply: 
(i) The joint resolution of the other 
House shall not be referred to a com-
mittee. 
(ii) With respect to the joint resolu-
tion of the House receiving the resolution, 
the procedure in that House shall be the 
same as if no such joint resolution had 
been received from the other House; but 
the vote on passage shall be on the joint 
resolution of the other House. 
(B) TREATMENT
OF
COMPANION
MEAS-
URES.—If, following passage of a joint resolu-
tion in the Senate, the Senate then receives the 
companion measure from the House of Rep-
resentatives, the companion measure shall not 
be debatable. 
(C) FAILURE
OF
JOINT
RESOLUTION
IN 
THE SENATE.— 
(i) If, in the Senate, the motion to 
proceed to the consideration of the joint 
resolution fails on adoption, the Secretary 
of the Senate shall transmit a message to 
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that effect to the House of Representa-
tives. 
(ii) If, in the Senate, the joint resolu-
tion fails on passage, the Secretary of the 
Senate shall transmit a message to that ef-
fect to the House of Representatives. 
(D) RULES OF HOUSE OF REPRESENTA-
TIVES AND SENATE.—This paragraph and the 
preceding paragraphs are enacted by Con-
gress— 
(i) as an exercise of the rulemaking 
power of the Senate and House of Rep-
resentatives, respectively, and as such it is 
deemed a part of the rules of each House, 
respectively, but applicable only with re-
spect to the procedure to be followed in 
that House in the case of a joint resolu-
tion, and it supersedes other rules only to 
the extent that it is inconsistent with such 
rules; and 
(ii) with full recognition of the con-
stitutional right of either House to change 
the rules (so far as relating to the proce-
dure of that House) at any time, in the 
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same manner, and to the same extent as in 
the case of any other rule of that House. 
(5) DEFINITION.—In this section, the term 
‘‘joint resolution’’ means only a joint resolution— 
(A) which does not have a preamble; 
(B) the title of which is as follows: ‘‘Joint 
resolution relating to the approval of request 
for borrowing authority under the Financial 
Stability Improvement Act of 2009.’’; and 
(C) the sole matter after the resolving 
clause of which is as follows: ‘‘That the Con-
gress approves the request for additional bor-
rowing authority transmitted to the Congress 
on lll by the President under section 
1609(o)(4)(A)(ii) of the Financial Stability Im-
provement Act of 2009.’’, the blank space being 
filled with the appropriate date. 
(t) NO FEDERAL STATUS.— 
(1) AGENCY STATUS.—A covered financial com-
pany (or any covered subsidiary thereof) that is 
placed into receivership is not a department, agency, 
or instrumentality of the United States for purposes 
of statutes that confer powers on or impose obliga-
tions on government entities. 
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(2) EMPLOYEE STATUS.—Interim directors, di-
rectors, officers, employees, or agents of a covered 
financial company that is placed into receivership 
are not, solely by virtue of service in any such capac-
ity, officers or employees of the United States. Any 
employee of the Corporation, acting as receiver or of 
any Federal agency who serves at the request of the 
receiver as an interim director, director, officer, em-
ployee, or agent of a covered financial company that 
is placed into receivership shall not— 
(A) solely by virtue of service in any such 
capacity lose any existing status as an officer or 
employee of the United States for purposes of 
title 5, United States Code, or any other provi-
sion of law, or; 
(B) receive any salary or benefits for serv-
ice in any such capacity with respect to a cov-
ered financial company that is placed into re-
ceivership in addition to such salary or benefits 
as are obtained through employment with the 
Corporation or other Federal agency. 
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SEC. 1610. CLARIFICATION OF PROHIBITION REGARDING 
CONCEALMENT OF ASSETS FROM RECEIVER 
OR LIQUIDATING AGENT. 
(a) IN GENERAL.—Section 1032 of title 18, United 
States Code, is amended in paragraph (1) by deleting ‘‘or’’ 
before ‘‘the National Credit Union Administration 
Board,’’ and by inserting immediately thereafter ‘‘or the 
Corporation, as defined in section 1602 of the Resolution 
Authority for Large, Interconnected Financial Companies 
Act of 2009,’’. 
(b) CONFORMING CHANGE.—The heading of section 
1032 of title 18, United States Code, is amended by strik-
ing ‘‘of financial institution’’. 
SEC. 1611. OFFICE OF RESOLUTION. 
(a) TRIGGER OF AND PLAN FOR ESTABLISHMENT.— 
(1) TRIGGER.—If the Secretary appoints the 
Corporation as receiver for a financial company 
under section 1604, the Inspector General of the 
Corporation shall, as soon as possible after such ap-
pointment, establish in accordance with this section 
the Office of Resolution as an office within the Of-
fice of the Inspector General of the Corporation. 
(2) PLAN.—The Inspector General of the Cor-
poration shall, in consultation with the Council of 
Inspectors General on Financial Oversight estab-
lished under section 1702, formulate and maintain a 
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plan to allow for the timely establishment of an Of-
fice of Resolution in accordance with paragraph (1). 
The Inspector General of the Corporation shall make 
such plan available to the Financial Services Over-
sight Council established under section 1001. 
(b) SPECIAL DEPUTY INSPECTOR GENERAL.—The 
head of the Office of Resolution is the Special Deputy In-
spector General for Resolution (in this section referred to 
as the ‘‘Special Deputy Inspector General’’), who shall be 
appointed by and report to the Inspector General of the 
Corporation. 
(c) DUTIES.— 
(1) AUDITS AND INVESTIGATIONS.—It shall be 
the duty of the Special Deputy Inspector General, in 
consultation with and subject to the approval of the 
Inspector General of the Corporation, to conduct, 
supervise, and coordinate audits and investigations 
of the activities of the Corporation in its capacity as 
receiver for a financial company under section 1604, 
including by collecting the following information: 
(A) A description of each financial com-
pany for which the Corporation has been ap-
pointed as receiver under section 1604. 
(B) A description of the activities and fu-
ture plans of the Corporation with respect to 
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427 
each financial company for which it has been 
appointed as receiver, and an analysis of wheth-
er such activities and plans conform to the re-
quirements of this subtitle and other applicable 
law and are in the best interest of the overall 
stability of the financial system. 
(C) Such other information as the Special 
Deputy Inspector General considers appro-
priate, in consultation with and subject to the 
approval of the Inspector General of the Cor-
poration. 
(2) ADDITIONAL DUTIES.— 
(A) SYSTEMS, PROCEDURES, AND
CON-
TROLS.—The Special Deputy Inspector General 
shall establish, maintain, and oversee such sys-
tems, procedures, and controls as the Special 
Deputy Inspector General considers appro-
priate, in consultation with and subject to the 
approval of the Inspector General of the Cor-
poration, to discharge the duties under para-
graph (1). 
(B) REPORTING OF CRIMINAL VIOLATIONS 
TO ATTORNEY GENERAL.—If the Special Dep-
uty Inspector General, in carrying out this sec-
tion, discovers facts that give the Special Dep-
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428 
uty Inspector General reasonable grounds to be-
lieve there has been a violation of Federal 
criminal law, the Special Deputy Inspector Gen-
eral shall expeditiously report such facts to the 
Attorney General. 
(C) MINIMIZING
DUPLICATION
OF
EF-
FORT.—The Inspector General of the Corpora-
tion and the Special Deputy Inspector General 
shall coordinate to minimize duplication of ef-
fort in the oversight of the Corporation’s activi-
ties as receiver for financial companies under 
section 1604. 
(3) DUTIES UNDER THE INSPECTOR GENERAL 
ACT OF 1978.—In addition to the duties specified in 
paragraphs (1) and (2), the Special Deputy Inspec-
tor General shall assist the Inspector General of the 
Corporation in carrying out such duties and respon-
sibilities of inspectors general under the Inspector 
General Act of 1978 as the Inspector General of the 
Corporation considers appropriate. 
(d) AUTHORITIES UNDER THE INSPECTOR GENERAL 
ACT OF 1978.—The Inspector General of the Corporation 
may confer on the Special Deputy Inspector General such 
authorities provided to the Inspector General of the Cor-
poration in section 6 of the Inspector General Act of 1978 
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as the Inspector General of the Corporation considers nec-
essary to enable the Special Deputy Inspector General to 
carry out the duties specified in subsection (c). 
(e) PERSONNEL, FACILITIES, AND
OTHER
RE-
SOURCES.— 
(1) IN GENERAL.—The Special Deputy Inspec-
tor General may, in consultation with and subject to 
the approval of the Inspector General of the Cor-
poration, expend such amounts from the fund estab-
lished under section 1609(n) as are necessary to 
carry out the duties described in subsection (c) and 
to submit the reports required by subsection (h). 
(2) ADDITIONAL
FUNDS.—If the fund estab-
lished under section 1609(n) is insufficient to enable 
the Special Deputy Inspector General to begin car-
rying out the duties of the Special Deputy Inspector 
General in a timely fashion or later becomes insuffi-
cient to enable the Special Deputy Inspector General 
to carry out such duties, the Inspector General of 
the Corporation shall detail the necessary personnel, 
facilities, or other resources to the Special Deputy 
Inspector General. 
(f) CORRECTIVE
RESPONSES
TO
AUDIT
PROB-
LEMS.—The Chairman of the Corporation shall— 
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(1) take action to address deficiencies identified 
by a report or investigation of the Special Deputy 
Inspector General; or 
(2) certify to the appropriate committees of 
Congress that no action is necessary or appropriate. 
(g) COOPERATION AND COORDINATION WITH OTHER 
ENTITIES.—In carrying out the duties, responsibilities, 
and authorities of the Special Deputy Inspector General 
under this section, the Special Deputy Inspector General 
shall work with each of the inspectors general who is a 
member of the Council of Inspectors General on Financial 
Oversight established under section 1703(a)(1), in order 
to avoid duplication of effort and ensure comprehensive 
oversight of the Corporation’s activities as a receiver ap-
pointed under section 1604. 
(h) REPORTS.— 
(1) IN GENERAL.—In lieu of the semiannual re-
ports required by section 5(a) of the Inspector Gen-
eral Act of 1978, the Special Deputy Inspector Gen-
eral shall submit to the appropriate committees of 
Congress at the following times a report prepared in 
consultation with and approved by the Inspector 
General of the Corporation: 
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(A) Not later than 30 days after the ap-
pointment of the Special Deputy Inspector Gen-
eral. 
(B) During the first 3 years after such ap-
pointment, not later than 30 days after the end 
of each fiscal quarter during which the Cor-
poration acts as receiver for a financial com-
pany under section 1604. 
(C) During the 4th year after such ap-
pointment and each year thereafter, not later 
than 30 days after the end of the 2nd and the 
4th fiscal quarters, if the Corporation acts as 
receiver for a financial company under section 
1604 during such semiannual period. 
(2) CONTENT OF REPORTS.—Each report re-
quired by paragraph (1) shall include a summary, 
for the period since the last required report (or, in 
the case of the first report, for the period since the 
Corporation was first appointed as a receiver under 
section 1604) of— 
(A) the activities of the Special Deputy In-
spector General; and 
(B) the activities and future plans of the 
Corporation with respect to each financial com-
pany for which it served as receiver. 
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(i) TERMINATION.—The Office of Resolution shall 
terminate 6 months after the Corporation ceases to serve 
as a receiver for any financial company under section 
1604, subject to reestablishment pursuant to subsection 
(a)(1). 
SEC. 1612. MISCELLANEOUS PROVISIONS. 
(a) BANKRUPTCY
CODE
AMENDMENTS.—Section 
109(b)(2) of title 11 of the United States Code is amended 
by inserting ‘‘covered financial company (as that term is 
defined in section 1602(5) of the Dissolution Authority for 
Large, Interconnected Financial Companies Act of 
2009),’’ after ‘‘a domestic insurance company,’’. 
(b) FEDERAL DEPOSIT INSURANCE ACT AND FED-
ERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT 
ACT OF 1991.— 
(1) Section 18(c)(4)(G)(i) of the Federal De-
posit Insurance Act (12 U.S.C. 1823(c)(4)(G)(i)) is 
amended by inserting at the end the following new 
sentence: ‘‘The determination with regard to the 
Corporation’s exercise of authority under this sub-
paragraph shall apply to only an insured depository 
institution except when severe financial conditions 
exist which threaten the stability of a significant 
number of insured depository institutions.’’. 
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(2) Section 403(a) of the Federal Deposit In-
surance Corporation Improvement Act of 1991 (12 
U.S.C. 4403(a)) is amended by inserting ‘‘section 
1609(c) of the Resolution Authority for Large, 
Interconnected Financial Companies Act of 2009, 
section 1367 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 
U.S.C. 4617(d)),’’ after ‘‘section 11(e) of the Fed-
eral Deposit Insurance Act,’’. 
SEC. 1613. AMENDMENT TO FEDERAL DEPOSIT INSURANCE 
ACT. 
The Federal Deposit Insurance Act (12 U.S.C. 1811 
et seq.) is amended by inserting after section 11A the fol-
lowing new section: 
‘‘SEC. 11B. SYSTEMIC DISSOLUTION AUTHORITY AND FUND. 
‘‘(a) SYSTEMIC
DISSOLUTION
AUTHORITY.—The 
Corporation shall establish a Systemic Dissolution Author-
ity, which shall function as a subsidiary of the Corpora-
tion. 
‘‘(b) SYSTEMIC DISSOLUTION FUND.—Any fund es-
tablished for the purpose of facilitating the dissolution of 
a financial company under subtitle G of the Financial Sta-
bility Improvement Act shall be called the Systemic Dis-
solution Fund, which shall be managed by the Corpora-
tion, through the Systemic Dissolution Authority. 
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‘‘(c) MANAGEMENT OF FUND.— 
‘‘(1) SEPARATE MAINTENANCE.—The Systemic 
Dissolution Fund shall be separately maintained and 
not commingled with any other fund of the Corpora-
tion. 
‘‘(2) TREATMENT OF AND ACCOUNTING FOR AS-
SETS.—The assets and liabilities of the Systemic 
Dissolution Fund— 
‘‘(A) shall be the assets and liabilities of 
the Fund and not of the Corporation; and 
‘‘(B) shall not be consolidated with the as-
sets and liabilities of the Deposit Insurance 
Fund or the Corporation for accounting, report-
ing, or any other purpose. 
‘‘(d) RIGHTS, POWERS, AND DUTIES.— 
‘‘(1) IN GENERAL.—The Corporation, in addi-
tion to any rights, powers, and duties under this Act 
or any other law, shall, through the Systemic Dis-
solution Authority, have all rights, powers, and du-
ties necessary to implement and maintain the Sys-
temic Dissolution Fund in accordance with subtitle 
G of the Financial Stability Improvement Act of 
2009. 
‘‘(2) POWERS AS RECEIVER FOR COVERED FI-
NANCIAL COMPANY.—When acting as receiver with 
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respect to any covered financial company, as defined 
in subtitle G of the Financial Stability Improvement 
Act of 2009, the Corporation, through the Systemic 
Dissolution Authority, shall have all rights, powers, 
and duties that the Corporation has as receiver 
under such subtitle. 
‘‘(3) SPECIFIC AND INCIDENTAL POWERS.—The 
Corporation, through the Systemic Dissolution Au-
thority, or any duly authorized officer or agent of 
the Authority, may exercise all powers specifically 
granted by the provisions of this Act and subtitle G 
of the Financial Stability Improvement Act and such 
incidental powers as shall be necessary to carry out 
the powers so granted and accomplish the purposes 
of subtitle G of the Financial Stability Improvement 
Act. 
‘‘(e) STAFF AND RESOURCES.— 
‘‘(1) IN GENERAL.—The Corporation shall as-
sign such staff, and provide such administrative and 
other support services to the Systemic Dissolution 
Authority as is necessary to fulfill the statutory re-
sponsibilities of the Authority. 
‘‘(2) ADMINISTRATIVE
EXPENSES.— The cost 
of all personnel, services, and resources provided on 
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behalf of the Systemic Dissolution Authority shall be 
paid from the Systemic Dissolution Fund.’’. 
SEC. 1614. APPLICATION OF EXECUTIVE COMPENSATION 
LIMITATIONS. 
The provisions of section 111 of the Emergency Eco-
nomic Stabilization Act of 2008 shall apply to a covered 
financial institution for which a receiver has been ap-
pointed pursuant to section 1604. Such covered financial 
institution shall be considered a TARP recipient for pur-
poses of such section 111 for so long as such institution 
is in receivership. 
Subtitle 
H—Additional 
Improve-
ments for Financial Crisis Man-
agement 
SEC. 1701. ADDITIONAL IMPROVEMENTS FOR FINANCIAL 
CRISIS MANAGEMENT. 
Section 13 of the Federal Reserve Act (12 U.S.C. 
343) is amended by striking the 3rd undesignated para-
graph and inserting the following new subsection: 
‘‘(c) FINANCIAL CRISIS MANAGEMENT.— 
‘‘(1) IN GENERAL.—In unusual and exigent cir-
cumstances, the Board of Governors of the Federal 
Reserve System, upon the written determination, 
pursuant to section 1109 of the Financial Stability 
Improvement Act of 2009, of the Financial Stability 
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Oversight Council, that a liquidity event exists that 
could destabilize the financial system (which deter-
mination shall be made upon a vote of not less than 
two-thirds of the members of such Council then serv-
ing), and with the written consent of the Secretary 
of the Treasury (after certification by the President 
that an emergency exists), may authorize any Fed-
eral reserve bank, during such periods as the Board 
may determine and at rates established in accord-
ance with the provision designated as (d) of section 
14, to discount for an individual, partnership, or 
corporation, notes, drafts, and bills of exchange 
when such notes, drafts, and bills of exchange are 
indorsed or otherwise secured to the satisfaction of 
the Federal reserve bank and in conformance with 
regulations or guidelines issued by the Board of 
Governors regarding the quality of notes, drafts, and 
bills of exchange available for discount and of the se-
curity for those notes, drafts and bills of exchange, 
unless a joint resolution (as defined in paragraph 
(5)) is adopted. Upon making any determination 
under this paragraph, with the consent of the Sec-
retary of the Treasury, the Financial Stability Over-
sight Council shall promptly submit a notice of such 
determination to the Congress. The amounts made 
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hsrobinson on DSK69SOYB1PROD with BILLS
438 
available under this subsection shall not exceed 
$4,000,000,000,000. 
‘‘(2) CLARIFICATION OF ‘SECURED TO THE SAT-
ISFACTION OF THE FEDERAL RESERVE BANK’.—No 
member of the Board of Governors of the Federal 
Reserve System shall vote to authorize any action 
permitted under paragraph (1) and the Secretary of 
the Treasury shall not provide the written consent 
required by paragraph (1) unless that member be-
lieves and the Secretary of the Treasury believes: 
‘‘(A) that there is at least a 99 percent 
likelihood that all funds disbursed or put at risk 
by such action will be repaid to the Federal Re-
serve System; and 
‘‘(B) that there is at least a 99 percent 
likelihood that all interest due on any funds dis-
bursed will also be paid to the Federal Reserve 
System. 
‘‘(3) LOW QUALITY ASSETS EXCLUDED.—The 
notes, drafts, and bills of exchange available for dis-
count for purposes of paragraph (1), and the secu-
rity for those notes, drafts and bills of exchange may 
only include any of the following assets if such asset 
is used to further enhance the security for those 
notes, drafts and bills of exchange which shall be 
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439 
fully secured with assets that are not any of the fol-
lowing assets: 
‘‘(A) An asset (including a security) that 
would be classified as ‘‘substandard,’’ ‘‘doubt-
ful,’’ or ‘‘loss,’’ or treated as ‘‘special mention’’ 
or ‘‘other transfer risk problems,’’ in a report 
of examination or inspection of bank or an affil-
iate of a bank prepared by either a Federal or 
State supervisory agency or in any internal 
classification system used by such individual, 
partnership or corporation. 
‘‘(B) An asset in a nonaccrual status. 
‘‘(C) An asset on which principal or inter-
est payments are more than 30 days past due. 
‘‘(D) An asset whose terms have been re-
negotiated or compromised due to the deterio-
rating financial condition of the obligor unless 
such asset has been performing for at least 6 
months since the renegotiation. 
‘‘(4) 
NO
SINGLE
OR
SPECIFIC
BENE-
FICIARIES.—The Board of Governors of the Federal 
Reserve System may authorize a Federal reserve 
bank to discount notes, drafts, or bills of exchange 
under this section only as part of a broadly available 
credit or other facility and may not authorize a Fed-
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cluding any interest therein or based on 
the value thereof, that is subject to the Se-
curities Act of 1933 (15 U.S.C. 77a et 
seq.) and the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.); 
‘‘(iv) any put, call, straddle, option, or 
privilege relating to foreign currency en-
tered into on a national securities exchange 
registered pursuant to section 6(a) of the 
Securities Exchange Act of 1934 (15 
U.S.C. 78f(a)); 
‘‘(v) any agreement, contract, or 
transaction providing for the purchase or 
sale of one or more securities on a fixed 
basis that is subject to the Securities Act 
of 1933 (15 U.S.C. 77a et seq.) and the 
Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.); 
‘‘(vi) any agreement, contract, or 
transaction providing for the purchase or 
sale of one or more securities on a contin-
gent basis that is subject to the Securities 
Act of 1933 (15 U.S.C. 77a et seq.) and 
the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.), unless such agree-
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swap participant’ has the same meaning as in sec-
tion 1a(48) of the Commodity Exchange Act (7 
U.S.C. 1a(48)). 
‘‘(71) SECURITY-BASED
SWAP
DEALER.—The 
term ‘security-based swap dealer’ has the same 
meaning as in section 1a(44) of the Commodity Ex-
change Act (7 U.S.C. 1a(44)). 
‘‘(72) APPROPRIATE FEDERAL BANKING AGEN-
CY.—The term ‘appropriate Federal banking agency’ 
has the same meaning as in section 3(q) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1813(q)). 
‘‘(73) BOARD.—The term ‘Board’ means the 
Board of Governors of the Federal Reserve System. 
‘‘(74) PRUDENTIAL
REGULATOR.—The term 
‘Prudential Regulator’ has the same meaning as in 
section 1a(43) of the Commodity Exchange Act (7 
U.S.C. 1a(43)). 
‘‘(75) SWAP DEALER.—The term ‘swap dealer’ 
has the same meaning as in section 1a(39) of the 
Commodity Exchange Act (7 U.S.C. 1a(39)). 
‘‘(76) SECURITY-BASED SWAP AGREEMENT.— 
‘‘(A) IN GENERAL.—For purposes of sec-
tions 10, 16, 20, and 21A of this Act, and sec-
tion 17 of the Securities Act of 1933 (15 
U.S.C. 77q), the term ‘security-based swap 
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