372 
transaction referred to in any such 
subclause. 
‘‘(v) REPURCHASE
AGREEMENT.—The 
term ‘repurchase agreement’ (which defini-
tion also applies to a reverse repurchase 
agreement)— 
‘‘(I) means an agreement, includ-
ing related terms, which provides for 
the transfer of one or more certificates 
of deposit, mortgage-related securities 
(as such term is defined in the Securi-
ties Exchange Act of 1934), mortgage 
loans, interests in mortgage-related se-
curities or mortgage loans, eligible 
bankers’ acceptances, qualified foreign 
government securities or securities 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 certificates of de-
posit, eligible bankers’ acceptances, se-
curities, mortgage loans, or interests 
with a simultaneous agreement by such 
transferee to transfer to the transferor
373 
thereof certificates of deposit, eligible 
bankers’ acceptances, securities, mort-
gage loans, or interests as described 
above, at a date certain not later than 
1 year after such transfers or on de-
mand, 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 Agency determines by regulation, 
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 supple-
ments to any such master agreement,
374 
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 agreement shall be con-
sidered to be a repurchase agreement 
under this subclause only with respect 
to each agreement or transaction under 
the master agreement that is referred to 
in subclause (I), (III), or (IV); and 
‘‘(VI) means any security agree-
ment or arrangement or other credit 
enhancement related to any agreement 
or transaction referred to in subclause 
(I), (III), (IV), or (V), including any 
guarantee or reimbursement obligation 
in connection with any agreement or 
transaction referred to in any such 
subclause. 
For purposes of this clause, the term ‘quali-
fied foreign government security’ means a 
security that is a direct obligation of, or 
that is fully guaranteed by, the central gov-
ernment of a member of the Organization 
for Economic Cooperation and Development
375 
(as determined by regulation or order 
adopted by the appropriate Federal banking 
authority). 
‘‘(vi) SWAP
AGREEMENT.—The term 
‘swap agreement’ means— 
‘‘(I) any agreement, including the 
terms and conditions incorporated by 
reference in any such agreement, which 
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-
376 
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 
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;
384 
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)— 
‘‘(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-
385 
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 
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—
386 
‘‘(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). 
‘‘(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
387 
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.— 
‘‘(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.
388 
‘‘(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 
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—
389 
‘‘(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 
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
395 
the limited-life regulated entity in accord-
ance with paragraph (1). 
‘‘(ii) SUBSEQUENT
TRANSFERS.—At 
any time after a charter is transferred to a 
limited-life regulated entity, the Agency, as 
receiver, may transfer any assets and liabil-
ities of such regulated entity in default, or 
in danger in default, as the Agency may, in 
its discretion, determine to be appropriate 
in accordance with paragraph (1). 
‘‘(iii) 
EFFECTIVE
WITHOUT
AP-
PROVAL.—The transfer of any assets or li-
abilities of a regulated entity in default, or 
in danger of default, transferred to a lim-
ited-life regulated entity shall be effective 
without any further approval under Federal 
or State law, assignment, or consent with 
respect thereto. 
‘‘(8) PROCEEDS.—To the extent that available 
proceeds from the limited-life regulated entity exceed 
amounts required to pay obligations, such proceeds 
may be paid to the regulated entity in default, or in 
danger of default. 
‘‘(9) POWERS.—
396 
‘‘(A) IN GENERAL.—Each limited-life regu-
lated entity created under this subsection shall 
have all corporate powers of, and be subject to 
the same provisions of law as, the regulated enti-
ty in default or in danger of default to which it 
relates, except that— 
‘‘(i) the Agency may— 
‘‘(I) remove the directors of a lim-
ited-life regulated entity; and 
‘‘(II) fix the compensation of 
members of the board of directors and 
senior management, as determined by 
the Agency in its discretion, of a lim-
ited-life regulated entity; 
‘‘(ii) the Agency may indemnify the 
representatives for purposes of paragraph 
(1)(B), and the directors, officers, employ-
ees, and agents of a limited-life regulated 
entity on such terms as the Agency deter-
mines to be appropriate; and 
‘‘(iii) the board of directors of a lim-
ited-life regulated entity— 
‘‘(I) shall elect a chairperson who 
may also serve in the position of chief 
executive officer, except that such per-
397 
son shall not serve either as chair-
person or as chief executive officer 
without the prior approval of the Agen-
cy; and 
‘‘(II) may appoint a chief execu-
tive officer who is not also the chair-
person, except that such person shall 
not serve as chief executive officer with-
out the prior approval of the Agency. 
‘‘(B) STAY OF JUDICIAL ACTION.—Any judi-
cial action to which a limited-life regulated enti-
ty becomes a party by virtue of its acquisition 
of any assets or assumption of any liabilities of 
a regulated entity in default shall be stayed from 
further proceedings for a period of up to 45 days 
at the request of the limited-life regulated entity. 
Such period may be modified upon the consent 
of all parties. 
‘‘(10) OBTAINING OF CREDIT AND INCURRING OF 
DEBT.— 
‘‘(A) IN GENERAL.—The limited-life regu-
lated entity may obtain unsecured credit and 
incur unsecured debt in the ordinary course of 
business.
398 
‘‘(B) INABILITY TO OBTAIN CREDIT.—If the 
limited-life regulated entity is unable to obtain 
unsecured credit the Director may authorize the 
obtaining of credit or the incurring of debt— 
‘‘(i) with priority over any or all ad-
ministrative expenses; 
‘‘(ii) secured by a lien on property that 
is not otherwise subject to a lien; or 
‘‘(iii) secured by a junior lien on prop-
erty that is subject to a lien. 
‘‘(C) LIMITATIONS.— 
‘‘(i) IN GENERAL.—The Director, after 
notice and a hearing, may authorize the ob-
taining of credit or the incurring of debt se-
cured by a senior or equal lien on property 
that is subject to a lien (other than mort-
gages that collateralize the mortgage-backed 
securities issued or guaranteed by the regu-
lated entity) only if— 
‘‘(I) the limited-life regulated en-
tity is unable to obtain such credit oth-
erwise; and 
‘‘(II) there is adequate protection 
of the interest of the holder of the lien
399 
on the property which such senior or 
equal lien is proposed to be granted. 
‘‘(ii) BURDEN
OF
PROOF.—In any 
hearing under this subsection, the Director 
has the burden of proof on the issue of ade-
quate protection. 
‘‘(D) EFFECT ON DEBTS AND LIENS.—The 
reversal or modification on appeal of an author-
ization under this paragraph to obtain credit or 
incur debt, or of a grant under this section of a 
priority or a lien, does not affect the validity of 
any debt so incurred, or any priority or lien so 
granted, to an entity that extended such credit in 
good faith, whether or not such entity knew of 
the pendency of the appeal, unless such author-
ization and the incurring of such debt, or the 
granting of such priority or lien, were stayed 
pending appeal. 
‘‘(11) ISSUANCE OF PREFERRED DEBT.—A lim-
ited-life regulated entity may, subject to the approval 
of the Director and subject to such terms and condi-
tions as the Director may prescribe, issue notes, 
bonds, or other debt obligations of a class to which all 
other debt obligations of the limited-life regulated en-
tity shall be subordinate in right and payment.