211 
is an interest rate swap, option, future, 
or forward agreement, including a rate 
floor, rate cap, rate collar, cross-cur-
rency rate swap, and basis swap; a 
spot, same day-tomorrow, tomorrow- 
next, forward, or other foreign ex-
change or precious metals agreement; a 
currency swap, option, future, or for-
ward agreement; an equity index or eq-
uity 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 agree-
ment; a commodity index or com-
modity swap, option, future, or for-
ward agreement; or a weather swap, 
weather derivative, or weather option; 
‘‘(II) any agreement or trans-
action that is similar to any other 
agreement or transaction referred to in 
this clause and that is of a type that 
has been, is presently, or in the future 
becomes, the subject of recurrent deal-
ings in the swap markets (including
212 
terms and conditions incorporated by 
reference in such agreement) and that 
is a forward, swap, future, or option 
on one or more rates, currencies, com-
modities, equity securities or other eq-
uity instruments, debt securities or 
other debt instruments, quantitative 
measures associated with an occur-
rence, extent of an occurrence, or con-
tingency associated with a financial, 
commercial, or economic consequence, 
or economic or financial indices or 
measures of economic or financial risk 
or value; 
‘‘(III) any combination of agree-
ments or transactions referred to in 
this clause; 
‘‘(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, without
213 
regard to whether the master agreement 
contains an agreement or transaction 
that is not a swap agreement under 
this clause, except that the master 
agreement shall be considered to be a 
swap agreement under this clause only 
with respect to each agreement or 
transaction under the master agree-
ment 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-
gation in connection with any agree-
ment or transaction referred to in any 
such subclause. 
Such term is applicable for purposes of this 
subsection only and shall not be construed 
or applied so as to challenge or affect the 
characterization, definition, or treatment of 
any swap agreement under any other stat-
ute, regulation, or rule, including the Secu-
214 
rities Act of 1933, the Securities Exchange 
Act of 1934, the Public Utility Holding 
Company Act of 1935, the Trust Indenture 
Act of 1939, the Investment Company Act of 
1940, the Investment Advisers Act of 1940, 
the Securities Investor Protection Act of 
1970, the Commodity Exchange Act, the 
Gramm-Leach-Bliley Act, and the Legal 
Certainty for Bank Products Act of 2000. 
‘‘(vii) TREATMENT OF MASTER AGREE-
MENT
AS
ONE
AGREEMENT.—Any master 
agreement for any contract or agreement de-
scribed in any preceding clause of this sub-
paragraph (or any master agreement for 
such master agreement or agreements), to-
gether with all supplements to such master 
agreement, shall be treated as a single 
agreement and a single qualified financial 
contract. 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-
215 
actions that are themselves qualified finan-
cial contracts. 
‘‘(viii) TRANSFER.—The term ‘trans-
fer’ means every mode, direct or indirect, 
absolute or conditional, voluntary or invol-
untary, of disposing of or parting with 
property or with an interest in property, 
including retention of title as a security in-
terest and foreclosure of the regulated enti-
ty’s equity of redemption. 
‘‘(E) CERTAIN PROTECTIONS IN EVENT OF 
APPOINTMENT
OF
CONSERVATOR.—Notwith-
standing any other provision of this Act (other 
than paragraph (13) of this subsection), any 
other Federal law, or the law of any State, no 
person shall be stayed or prohibited from exer-
cising— 
‘‘(i) any right such person has to cause 
the termination, liquidation, or acceleration 
of any qualified financial contract with a 
regulated entity in a conservatorship based 
upon a default under such financial con-
tract which is enforceable under applicable 
noninsolvency law;
216 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement relating to one or more such 
qualified financial contracts; or 
‘‘(iii) any right to offset or net out any 
termination values, payment amounts, or 
other transfer obligations arising under or 
in connection with such qualified financial 
contracts. 
‘‘(F) CLARIFICATION.—No provision of law 
shall be construed as limiting the right or power 
of the Agency, or authorizing any court or agen-
cy to limit or delay, in any manner, the right 
or power of the Agency to transfer any qualified 
financial contract in accordance with para-
graphs (9) and (10) of this subsection or to dis-
affirm or repudiate any such contract in accord-
ance with subsection (d)(1) of this section. 
‘‘(G) WALKAWAY
CLAUSES
NOT
EFFEC-
TIVE.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
the provisions of subparagraphs (A) and 
(E), and sections 403 and 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, no walkaway clause
217 
shall be enforceable in a qualified financial 
contract of a regulated entity in default. 
‘‘(ii) WALKAWAY CLAUSE DEFINED.— 
For purposes of this subparagraph, the term 
‘walkaway clause’ means a provision in a 
qualified financial contract that, after cal-
culation of a value of a party’s position or 
an amount due to or from 1 of the parties 
in accordance with its terms upon termi-
nation, liquidation, or acceleration of the 
qualified financial contract, either does not 
create a payment obligation of a party or 
extinguishes a payment obligation of a 
party in whole or in part solely because of 
such party’s status as a nondefaulting 
party. 
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—In making any transfer of assets or liabil-
ities of a regulated entity in default which includes 
any qualified financial contract, the conservator or 
receiver for such regulated entity shall either— 
‘‘(A) transfer to 1 person— 
‘‘(i) all qualified financial contracts 
between any person (or any affiliate of such 
person) and the regulated entity in default;
218 
‘‘(ii) all claims of such person (or any 
affiliate of such person) against such regu-
lated entity 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 
regulated entity); 
‘‘(iii) all claims of such regulated enti-
ty 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 contract 
described in clause (i) or any claim de-
scribed in clause (ii) or (iii) under any 
such contract; or 
‘‘(B) transfer none of the financial con-
tracts, claims, or property referred to under sub-
paragraph (A) (with respect to such person and 
any affiliate of such person). 
‘‘(10) NOTIFICATION OF TRANSFER.— 
‘‘(A) IN GENERAL.—If— 
‘‘(i) the conservator or receiver for a 
regulated entity in default makes any trans-
fer of the assets and liabilities of such regu-
lated entity, and
219 
‘‘(ii) the transfer includes any quali-
fied financial contract, 
the conservator or receiver shall notify any per-
son who is a party to any such contract of such 
transfer by 5:00 p.m. (eastern time) on the busi-
ness day following the date of the appointment 
of the receiver in the case of a receivership, or the 
business day following such transfer in the case 
of a conservatorship. 
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.— 
‘‘(i) RECEIVERSHIP.—A person who is 
a party to a qualified financial contract 
with a regulated entity may not exercise 
any right that such person has to terminate, 
liquidate, or net such contract under para-
graph (8)(A) of this subsection or section 
403 or 404 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991, sole-
ly by reason of or incidental to the appoint-
ment of a receiver for the regulated entity 
(or the insolvency or financial condition of 
the regulated entity for which the receiver 
has been appointed)—
220 
‘‘(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 trans-
ferred pursuant to paragraph (9)(A). 
‘‘(ii) CONSERVATORSHIP.—A person 
who is a party to a qualified financial con-
tract with a regulated entity may not exer-
cise any right that such person has to ter-
minate, liquidate, or net such contract 
under paragraph (8)(E) of this subsection 
or section 403 or 404 of the Federal Deposit 
Insurance Corporation Improvement Act of 
1991, solely by reason of or incidental to the 
appointment of a conservator for the regu-
lated entity (or the insolvency or financial 
condition of the regulated entity for which 
the conservator has been appointed). 
‘‘(iii) NOTICE.—For purposes of this 
paragraph, the Agency as receiver or conser-
vator of a regulated entity shall be deemed 
to have notified a person who is a party to 
a qualified financial contract with such reg-
ulated entity if the Agency has taken steps
221 
reasonably calculated to provide notice to 
such person by the time specified in sub-
paragraph (A). 
‘‘(C) BUSINESS
DAY
DEFINED.—For pur-
poses of this paragraph, the term ‘business day’ 
means any day other than any Saturday, Sun-
day, 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 conser-
vator or receiver with respect to any qualified finan-
cial contract to which a regulated entity is a party, 
the conservator or receiver for such institution shall 
either— 
‘‘(A) disaffirm or repudiate all qualified fi-
nancial contracts between— 
‘‘(i) any person or any affiliate of such 
person; and 
‘‘(ii) the regulated entity 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).
222 
‘‘(12) CERTAIN SECURITY INTERESTS NOT AVOID-
ABLE.—No provision of this subsection shall be con-
strued as permitting the avoidance of any legally en-
forceable or perfected security interest in any of the 
assets of any regulated entity, except where such an 
interest is taken in contemplation of the insolvency of 
the regulated entity, or with the intent to hinder, 
delay, or defraud the regulated entity or the creditors 
of such regulated entity. 
‘‘(13) AUTHORITY TO ENFORCE CONTRACTS.— 
‘‘(A) IN
GENERAL.—Notwithstanding any 
provision of a contract providing for termi-
nation, default, acceleration, or exercise of rights 
upon, or solely by reason of, insolvency or the 
appointment of a conservator or receiver, the 
conservator or receiver may enforce any contract 
or regulated entity bond entered into by the regu-
lated entity. 
‘‘(B) CERTAIN RIGHTS NOT AFFECTED.—No 
provision of this paragraph may be construed as 
impairing or affecting any right of the conser-
vator or receiver to enforce or recover under a di-
rector’s or officer’s liability insurance contract or 
surety bond under other applicable law. 
‘‘(C) CONSENT REQUIREMENT.—
223 
‘‘(i) IN GENERAL.—Except as otherwise 
provided under this section, no person may 
exercise any right or power to terminate, 
accelerate, or declare a default under any 
contract to which a regulated entity is a 
party, or to obtain possession of or exercise 
control over any property of the regulated 
entity, or affect any contractual rights of 
the regulated entity, without the consent of 
the conservator or receiver, as appropriate, 
for a period of— 
‘‘(I) 45 days after the date of ap-
pointment of a conservator; or 
‘‘(II) 90 days after the date of ap-
pointment of a receiver. 
‘‘(ii) EXCEPTIONS.—This paragraph 
shall— 
‘‘(I) not apply to a director’s or 
officer’s liability insurance contract; 
‘‘(II) not apply to the rights of 
parties to any qualified financial con-
tracts under subsection (d)(8); and 
‘‘(III) not be construed as permit-
ting the conservator or receiver to fail
224 
to comply with otherwise enforceable 
provisions of such contracts. 
‘‘(14) SAVINGS CLAUSE.—The meanings of terms 
used in this subsection are applicable for purposes of 
this subsection only, and shall not be construed or ap-
plied so as to challenge or affect the characterization, 
definition, or treatment of any similar terms under 
any other statute, regulation, or rule, including the 
Gramm-Leach-Bliley Act, the Legal Certainty for 
Bank Products Act of 2000, the securities laws (as 
that term is defined in section 3(a)(47) of the Securi-
ties Exchange Act of 1934), and the Commodity Ex-
change Act 
‘‘(15) EXCEPTION FOR FEDERAL RESERVE AND 
FEDERAL HOME LOAN BANKS.—No provision of this 
subsection shall apply with respect to— 
‘‘(A) any extension of credit from any Fed-
eral home loan bank or Federal Reserve Bank to 
any regulated entity; or 
‘‘(B) any security interest in the assets of 
the regulated entity securing any such extension 
of credit. 
‘‘(e) VALUATION OF CLAIMS IN DEFAULT.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of Federal law or the law of any State, and
225 
regardless of the method which the Agency determines 
to utilize with respect to a regulated entity in default 
or in danger of default, including transactions au-
thorized under subsection (i), this subsection shall 
govern the rights of the creditors of such regulated en-
tity. 
‘‘(2) MAXIMUM
LIABILITY.—The maximum li-
ability of the Agency, acting as receiver or in any 
other capacity, to any person having a claim against 
the receiver or the regulated entity for which such re-
ceiver is appointed shall equal the lesser of— 
‘‘(A) the amount such claimant would have 
received if the Agency had liquidated the assets 
and liabilities of such regulated entity without 
exercising the authority of the Agency under sub-
section (i) of this section; or 
‘‘(B) the amount of proceeds realized from 
the performance of contracts or sale of the assets 
of the regulated entity. 
‘‘(f) LIMITATION ON COURT ACTION.—Except as pro-
vided in this section or at the request of the Director, no 
court may take any action to restrain or affect the exercise 
of powers or functions of the Agency as a conservator or 
a receiver. 
‘‘(g) LIABILITY OF DIRECTORS AND OFFICERS.—
226 
‘‘(1) IN GENERAL.—A director or officer of a reg-
ulated entity may be held personally liable for mone-
tary damages in any civil action by, on behalf of, or 
at the request or direction of the Agency, which action 
is prosecuted wholly or partially for the benefit of the 
Agency— 
‘‘(A) acting as conservator or receiver of 
such regulated entity, or 
‘‘(B) acting based upon a suit, claim, or 
cause of action purchased from, assigned by, or 
otherwise conveyed by such receiver or conser-
vator, 
for gross negligence, including any similar conduct or 
conduct that demonstrates a greater disregard of a 
duty of care (than gross negligence) including inten-
tional tortious conduct, as such terms are defined and 
determined under applicable State law. 
‘‘(2) NO
LIMITATION.—Nothing in this para-
graph shall impair or affect any right of the Agency 
under other applicable law. 
‘‘(h) DAMAGES.—In any proceeding related to any 
claim against a director, officer, employee, agent, attorney, 
accountant, appraiser, or any other party employed by or 
providing services to a regulated entity, recoverable dam-
ages determined to result from the improvident or otherwise
227 
improper use or investment of any assets of the regulated 
entity shall include principal losses and appropriate inter-
est. 
‘‘(i) LIMITED-LIFE REGULATED ENTITIES.— 
‘‘(1) ORGANIZATION.— 
‘‘(A) PURPOSE.—If a regulated entity is in 
default, or if the Agency anticipates that a regu-
lated entity will default, the Agency may orga-
nize a limited-life regulated entity with those 
powers and attributes of the regulated entity in 
default or in danger of default that the Director 
determines necessary, subject to the provisions of 
this subsection. The Director shall grant a tem-
porary charter to the limited-life regulated enti-
ty, and the limited-life regulated entity shall op-
erate subject to that charter. 
‘‘(B) AUTHORITIES.—Upon the creation of 
a limited-life regulated entity under subpara-
graph (A), the limited-life regulated entity 
may— 
‘‘(i) assume such liabilities of the regu-
lated entity that is in default or in danger 
of default as the Agency may, in its discre-
tion, determine to be appropriate, provided 
that the liabilities assumed shall not exceed