I
103D CONGRESS
2D SESSION
H. R. 5227
To provide for a system of guaranteeing the deposits and certain other
liabilities of depository institutions through a self-regulating system of
cross-guarantees, to protect taxpayers against deposit insurance losses,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 6, 1994
Mr. PETRI (for himself, Mr. COX, Mr. ARMEY, and Mr. LEVY) introduced the
following bill; which was referred jointly to the Committees on Banking,
Finance and Urban Affairs and the Judiciary
A BILL
To provide for a system of guaranteeing the deposits and
certain other liabilities of depository institutions through
a self-regulating system of cross-guarantees, to protect
taxpayers against deposit insurance losses, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Deposit Insurance Reform, Regulatory Modernization,
and Taxpayer Protection Act of 1994’’.
(b) TABLE OF CONTENTS.—
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Sec. 1. Short title; table of contents.
TITLE I—100 PERCENT CROSS-GUARANTEES
Subtitle A—Definitions
Sec. 101. Definitions.
Sec. 102. Rules of construction.
Subtitle B—Cross-Guarantee Process
Sec. 111. Depository institutions prohibited from operating without a cross-
guarantee contract.
Sec. 112. Parties to cross-guarantee and stop-loss contracts.
Sec. 113. Requirements common to cross-guarantee and stop-loss contracts.
Sec. 114. Requirements applicable only to cross-guarantee contracts.
Sec. 115. Requirements applicable only to stop-loss contracts.
Sec. 116. Eligibility and requirements for direct guarantors.
Sec. 117. Provisions relating to cross-guarantee and stop-loss syndicates.
Sec. 118. Assumption of control of a guaranteed company by a cross-guarantee
syndicate.
Sec. 119. Judicial review of contracts and related actions.
Subtitle C—Powers and Duties of the CGRC
CHAPTER 1—CROSS-GUARANTEE PROCESS
Sec. 121. The Cross-Guarantee Regulation Corporation.
Sec. 122. Regulation of the cross-guarantee process.
Sec. 123. Approval process for cross-guarantee, stop-loss, and group cross-guar-
antee contracts.
Sec. 124. Central electronic repository.
Sec. 125. Restriction on closed loops.
Sec. 126. Treasury oversight of the Cross-Guarantee Regulation Corporation.
CHAPTER 2—PROTECTION OF INSURED DEPOSITS
Sec. 128. Backup insurance on deposits at guaranteed depository institutions.
Subtitle D—Miscellaneous Provisions
Sec. 131. Institutions offering uninsured deposits.
Sec. 132. Federal Reserve lending.
Sec. 133. Advertising by guaranteed financial groups.
Sec. 134. Guaranteed depository institutions remain federally insured deposi-
tories for purposes of State law.
Subtitle E—Transition to 100 Percent Cross-Guarantee Process
Sec. 141. Effective date of system based on minimum number of guaranteed
depository institutions and amount of total assets.
Sec. 142. Mandatory phase-in of cross-guarantees after effective date of system.
Sec. 143. Appointment of receiver for institutions which fail to comply with
transition requirements.
Sec. 144. Funding the cross-guarantee backup fund.
Sec. 145. Severance pay and related benefits for former Federal and State
banking agency employees.
Sec. 146. Abolition of Federal Financial Institutions Examination Council.
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Sec. 147. Abolition of the Federal Deposit Insurance Corporation.
Sec. 148. Continuation of orders, resolutions, and determinations.
TITLE II—AMENDMENTS TO OTHER BANKING LAWS
Sec. 201. Amendments relating to national banks.
Sec. 202. Amendments relating to member banks.
Sec. 203. Amendments relating to savings associations.
Sec. 204. Amendments relating to savings and loan holding companies.
Sec. 205. Amendments relating to the Federal Deposit Insurance Corporation.
Sec. 206. Amendments to other banking laws.
TITLE III—AMENDMENTS TO TITLE 11, UNITED STATES CODE
Subtitle A—Amendments to Chapter 1 of Title 11
Sec. 301. Definitions.
Sec. 302. Applicability of chapters.
Sec. 303. Public access to papers.
Sec. 304. Who may be a debtor.
Subtitle B—Amendments to Chapter 3 of Title 11
Sec. 311. Party in interest.
Sec. 312. Qualification of trustee.
Sec. 313. Notice.
Sec. 314. Money of estates.
Sec. 315. Automatic stay.
Sec. 316. Executory contracts and unexpired leases.
Subtitle C—Amendments to Chapter 5 of Title 11
Sec. 321. Obligations of direct guarantors.
Sec. 322. Debtor’s duties.
Sec. 323. Exceptions to discharge.
Sec. 324. Limitation on avoiding powers.
Sec. 325. Preferences.
Sec. 326. Fraudulent transfers and obligations.
Sec. 327. Post-petition transactions.
Sec. 328. Contractual right to liquidate a securities contract.
Sec. 329. Contractual right to liquidate a commodities contract or forward con-
tract.
Sec. 330. Contractual right to liquidate a repurchase agreement.
Sec. 331. Contractual right to terminate a swap agreement.
Subtitle D—Amendments to Chapter 11 of Title 11
CHAPTER 1—AMENDMENTS TO EXISTING LAW
Sec. 341. Creditors’ and equity security holders’ committees.
Sec. 342. Who may file a plan.
Sec. 343. Impairment of claims or interests.
Sec. 344. Acceptance of plan.
Sec. 345. Confirmation hearing.
Sec. 346. Confirmation of plan.
Sec. 347. Effect of confirmation.
CHAPTER 2—ENACTMENT OF SUBCHAPTER V
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Sec. 351. Guaranteed company reorganization.
Sec. 352. Inapplicability of other sections.
Sec. 353. Effective date of filing.
Sec. 354. Appointment of trustee.
Sec. 355. Liability of direct guarantors for transfers to guaranteed creditors.
Sec. 356. Replacement or modification of cross-guarantee contract.
Sec. 357. Effect of Federal, State, and local legislation and regulations.
Sec. 358. Liquidation.
TITLE IV—AMENDMENT TO TITLE 28, UNITED STATES CODE
Sec. 401. Venue.
TITLE I—100 PERCENT CROSS-
GUARANTEES
Subtitle A—Definitions
SEC. 101. DEFINITIONS.
In this title:
(1) AFFILIATE.—The term ‘‘affiliate’’ means,
with respect to any company, any other company
that controls, is controlled by, or is under common
control with such company.
(2) AGENCY.—The term ‘‘agency’’, when used
in connection with a reference to a foreign bank, has
the same meaning given to such term in section 1(b)
of the International Banking Act of 1978.
(3) BRANCH.—The term ‘‘branch’’, when used
in connection with a reference to a foreign bank, has
the same meaning given to such term in section 1(b)
of the International Banking Act of 1978.
(4) BUSINESS DAY.—The term ‘‘business day’’
means any day other than a Saturday, Sunday, or
legal holiday for the Federal Government.
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(5) CENTRAL ELECTRONIC REPOSITORY.—The
term ‘‘central electronic repository’’ means the re-
pository established under section 124(a)(1).
(6) CLOSED
LOOP.—The term ‘‘closed loop’’
means a set of cross-guarantee and stop-loss con-
tracts in which each direct guarantor under the set
of contracts also is a guaranteed party under one
contract within the set of contracts.
(7) COMPANY.—The term ‘‘company’’—
(A) means any corporation, partnership,
business trust, association, or similar organiza-
tion; and
(B) does not include a branch or agency,
or a group of branches and agencies, of a for-
eign bank.
(8) CONTROL.—
(A) IN
GENERAL.—The term ‘‘control’’
means, with respect to one company’s relation-
ship to another company, one company’s owner-
ship or power to, directly or indirectly, vote an
aggregate of 5 percent or more of any class or
classes of the securities which separately or to-
gether, taking into account the relative voting
weight of different shares, have the power to
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elect a majority of the members of such other
company’s board of directors.
(B) REGULATION.—The Corporation may
prescribe regulations to implement the intent of
this paragraph.
(9) CORPORATION.—The term ‘‘Corporation’’
means the Cross-Guarantee Regulation Corporation.
(10) CROSS-GUARANTEE
ACTIVATION
DATE.—
The term ‘‘cross-guarantee activation date’’ means
the date on which the first cross-guarantee contracts
become effective under section 141(a).
(11) CROSS-GUARANTEE BACKUP FUND.—The
term ‘‘cross-guarantee backup fund’’ means the fund
established pursuant to section 128(a).
(12) CROSS-GUARANTEE CONTRACT.—The term
‘‘cross-guarantee 
contract’’ 
means 
a 
contract
which—
(A) is entered into between—
(i) one or more companies, at least
one of which is a depository institution;
and
(ii) a cross-guarantee syndicate;
(B) is approved by the Corporation under
section 123;
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(C) has become effective in accordance
with the contract’s terms; and
(D) 
is 
not 
enjoined 
under 
section
123(e)(2)(B).
(13) 
CROSS-GUARANTEE
OBLIGATION.—The
term ‘‘cross-guarantee obligation’’ means an obliga-
tion of a direct guarantor arising out of a cross-
guarantee or stop-loss contract, and includes the ob-
ligations of such guarantor under section 125(c)(2)
of this title and sections 321 and 355 of title III.
(14) 
CROSS-GUARANTEE
SYNDICATE.—The
term ‘‘cross-guarantee syndicate’’ means any group
of direct guarantors which has entered into a cross-
guarantee contract with a guaranteed financial
group.
(15) DEPOSIT.—
(A) IN
GENERAL.—The term ‘‘deposit’’
means—
(i) any obligation within the meaning
given the term in paragraphs (1) through
(4) of section 3(l) of the Federal Deposit
Insurance Act; and
(ii) any other obligation that the Cor-
poration determines is a deposit-like obli-
gation by general usage.
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(B) DEPOSITS INCLUDE OBLIGATIONS PAY-
ABLE
OUTSIDE
THE
UNITED
STATES.—The
term ‘‘deposit’’ includes any obligation de-
scribed in subparagraph (A) without regard to
whether the obligation is payable within or
without the United States.
(C) EXCLUSION FOR CHECKABLE SUBOR-
DINATED DEBT.—The term ‘‘deposit’’ shall not
include any obligation which, under section
114(a)(2), may not be a guaranteed obligation.
(16) DEPOSITORY
INSTITUTION.—The term
‘‘depository institution’’ has the meaning given to
such term in section 3(c) of the Federal Deposit In-
surance Act.
(17) DIRECT GUARANTOR.—The term ‘‘direct
guarantor’’ means a member of a cross-guarantee or
stop-loss syndicate which has entered into a cross-
guarantee or stop-loss contract with a guaranteed fi-
nancial group or nondepository guarantor.
(18) EQUITY CAPITAL.—The term ‘‘equity cap-
ital’’ means, with respect to any guaranteed finan-
cial group, the amount, as valued pursuant to sec-
tion 114(c), which is equal to—
(A) the consolidated assets of the guaran-
teed financial group; minus
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(B) the consolidated liabilities, including
the estimated liquidation value of contingent li-
abilities, of the guaranteed financial group.
(19) FAILED DEPOSITORY INSTITUTION.—The
term ‘‘failed depository institution’’ means any de-
pository institution for which a conservator or re-
ceiver has been appointed by the Federal Deposit In-
surance Corporation.
(20) FOREIGN
BANK.—The term ‘‘foreign
bank’’ has the same meaning given to such term in
section 1(b) of the International Banking Act of
1978, except that such term shall not include any
bank organized under the laws of Puerto Rico,
Guam, American Samoa, the Virgin Islands, or any
territory of the United States.
(21) GROUP
CROSS-GUARANTEE
CONTRACT.—
The term ‘‘group cross-guarantee contract’’ means a
contract which—
(A) is entered into between two or more
guaranteed financial groups and a cross-guar-
antee syndicate;
(B) is approved by the Corporation under
section 123;
(C) has become effective in accordance
with the contract’s terms; and
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(D) 
is 
not 
enjoined 
under 
section
123(e)(2)(B).
(22) GUARANTEED
BANKING
OFFICE.—The
term ‘‘guaranteed banking office’’ means any branch
or agency of a foreign bank where the foreign bank
has entered into a cross-guarantee contract with a
cross-guarantee syndicate.
(23) GUARANTEED COMPANY.—
(A) IN GENERAL.—The term ‘‘guaranteed
company’’ means any company which has en-
tered into a cross-guarantee contract with a
cross-guarantee syndicate.
(B) FOREIGN BANKS.—
(i) IN
GENERAL.—Notwithstanding
subparagraph (A), a foreign bank shall not
be a guaranteed company solely because a
branch or agency of such bank is a guar-
anteed banking office under a cross-guar-
antee contract.
(ii) EXCEPTION FOR FOREIGN BANKS
WHICH ARE SUBSIDIARIES.—Notwithstand-
ing clause (i), a foreign bank may be a
guaranteed company, if such bank is guar-
anteed under a cross-guarantee contract
under section 112(e)(1).
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(24) 
GUARANTEED
DEPOSITORY
INSTITU-
TION.—The term ‘‘guaranteed depository institu-
tion’’ means a depository institution which is a guar-
anteed company.
(25) GUARANTEED
FINANCIAL
GROUP.—The
term ‘‘guaranteed financial group’’ means—
(A) a depository institution which is the
sole guaranteed company under a cross-guaran-
tee contract;
(B) two or more companies, at least one of
which is a depository institution and all of
which are guaranteed companies under the
same cross-guarantee contract;
(C) any guaranteed banking office which—
(i) is a branch; and
(ii) is the sole guaranteed banking of-
fice under a cross-guarantee contract; or
(D) any two or more branches and agen-
cies, at least one of which is a branch and all
of which are guaranteed banking offices under
the same cross-guarantee contract.
(26) GUARANTEED OBLIGATION.—
(A) IN GENERAL.—The term ‘‘guaranteed
obligation’’ means an obligation of a guaranteed
party the performance of which has been guar-
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anteed by a cross-guarantee or stop-loss syn-
dicate.
(B) RULE OF CONSTRUCTION.—The term
‘‘performance’’ under subparagraph (A) in-
cludes timely payment of any deposit or other
obligation, including interest, if failure to pay in
a timely manner would constitute a breach of
contract.
(27) GUARANTEED PARTY.—The term ‘‘guaran-
teed party’’ means any guaranteed company, guar-
anteed banking office, or nondepository guarantor.
(28) INSURED
DEPOSIT.—The term ‘‘insured
deposit’’ means any deposit of a guaranteed deposi-
tory institution which is insured against loss by the
cross-guarantee backup fund under section 128.
(29) NET WORTH.—The term ‘‘net worth’’—
(A) means, with respect to a nondepository
guarantor, the amount which is equal to the
stockholders’ equity, the partnership equity, the
net worth, or the fund balance of the guarantor,
as the case may be, as determined in accord-
ance with generally accepted accounting prin-
ciples;
(B) does not include any equitable interest
or liability which the Corporation determines
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should not be treated as net worth for purposes
of this title; and
(C) in the case of any nondepository guar-
antor which controls another nondepository
guarantor or a guaranteed financial group, does
not include the net worth or equity capital of
the subsidiary guarantor or group.
(30) NONDEPOSITORY GUARANTOR.—The term
‘‘nondepository guarantor’’ means any person which
has entered into a stop-loss contract with a stop-loss
syndicate.
(31) PREMIUM INCOME.—The term ‘‘premium
income’’ means any income accrued by a direct guar-
antor under any cross-guarantee or stop-loss con-
tract.
(32) 
PROJECTED
ANNUAL
PREMIUM.—The
term ‘‘projected annual premium’’ means the
amount calculated under section 116(d)(2).
(33) PROJECTED
ANNUAL
PREMIUM
CAPAC-
ITY.—The term ‘‘projected annual premium capac-
ity’’ means the amount which is equal to—
(A) in the case of a guaranteed company,
3 percent of the equity capital of the guaran-
teed financial group which is the party guaran-
teed under the same cross-guarantee contract
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under which such company is a guaranteed
company; or
(B) in the case of a nondepository guaran-
tor, 3 percent of the net worth of the
nondepository guarantor.
(34) PROJECTED
ANNUAL
PREMIUM
LIMIT.—
The term ‘‘projected annual premium limit’’ means
the amount which is equal to 3 percent of projected
annual premium capacity.
(35) SECOND-TIER
GUARANTOR.—The term
‘‘second-tier guarantor’’ means a direct guarantor of
a direct guarantor.
(36) STATE
DEPOSITORY
INSTITUTION.—The
term ‘‘State depository institution’’ has the meaning
given to such term in section 3(c)(5) of the Federal
Deposit Insurance Act.
(37) STOP-LOSS CONTRACT.—The term ‘‘stop-
loss contract’’ means a contract which—
(A) is entered into between a person and
a stop-loss syndicate;
(B) is approved by the Corporation under
section 123;
(C) has become effective in accordance
with the contract’s terms; and
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(D) 
is 
not 
enjoined 
under 
section
123(e)(2)(B).
(38) STOP-LOSS SYNDICATE.—The term ‘‘stop-
loss syndicate’’ means any group of direct guaran-
tors which has entered into a stop-loss contract with
a nondepository guarantor.
(39) SUBORDINATED DEBT.—
(A) IN
GENERAL.—The term ‘‘subordi-
nated debt’’ means an obligation assumed by a
guaranteed company or guaranteed banking of-
fice which is subordinate in right of payment to
any general creditor of the company or office.
(B) GENERAL
CREDITOR.—For purposes
of this paragraph, the term ‘‘general creditor’’
means—
(i) any creditor to which a guaranteed
company or guaranteed banking office has
an obligation which is a guaranteed obliga-
tion under the cross-guarantee contract for
such company of office, unless that credi-
tor is otherwise specifically secured by one
or more assets of the company or office;
and
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(ii) any creditor of the guaranteed
company or guaranteed banking office
which is—
(I) not protected under the con-
tract; and
(II) not subordinated to the
claims of other creditors or treated as
a preference in a bankruptcy proceed-
ing.
(40) 
SUBSIDIARY.—The 
term 
‘‘subsidiary’’
means, with reference to a company, any company
which such company controls.
(41) SYNDICATE AGENT.—The term ‘‘syndicate
agent’’ means any person which acts as the agent
for the direct guarantors under any cross-guarantee
or stop-loss contract.
SEC. 102. RULES OF CONSTRUCTION.
(a) GENERAL RULES OF CONSTRUCTION.—
(1) IN GENERAL.—This title shall be liberally
construed and applied to promote its underlying pur-
poses and policies.
(2) PURPOSES OF THIS TITLE.—The purposes
of this title are—
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(A) to create a competitive and essentially
self-regulating private deposit insurance mar-
ketplace;
(B) to require each bank and savings asso-
ciation which accepts deposits to protect the full
amount of such deposits, along with most other
nondeposit liabilities, by obtaining cross-guar-
antee contracts from syndicates of guarantors;
(C) to induce depository institutions to
lend and invest wisely by authorizing guaran-
tors which issue cross-guarantee contracts to—
(i) charge risk-sensitive premiums for
the guarantees provided; and
(ii) negotiate with the banks and sav-
ings associations which enter into such
contracts all other terms and conditions, to
the extent such terms and conditions are
not inconsistent with this Act or other pro-
visions of law;
(D) to make the cross-guarantee process as
self-regulating as possible by establishing nu-
merous constructive tensions among the partici-
pants in the system;
(E) to establish a closed system of guaran-
tors with tier after tier of guarantors to stand
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behind a guarantee and a ‘‘stop-loss’’ mecha-
nism to spread large losses as widely as possible
to ensure that no guaranteed obligation will
ever go unpaid; and
(F) to regulate the cross-guarantee mar-
ketplace only to the extent necessary to main-
tain the safety, soundness, and viability of the
entire cross-guarantee process and not the sol-
vency of any individual bank or savings associa-
tion regardless of its size.
(b) SPECIFIC RULES OF CONSTRUCTION.—In this
title—
(1) the terms ‘‘guaranteed company,’’ ‘‘guaran-
teed depository institution,’’ ‘‘guaranteed financial
group,’’ ‘‘guaranteed party,’’ and ‘‘nondepository
guarantor’’ refer to those parties in their capacity as
parties guaranteed under a cross-guarantee or stop-
loss contract;
(2) the term ‘‘direct guarantor’’ refers to a
party in such party’s capacity as a guarantor under
a cross-guarantee or stop-loss contract;
(3) the term ‘‘control’’ in such phrases as ‘‘as-
sumption of control’’ or ‘‘assumes control’’ shall not
have the meaning given the term under section
101(8);
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(4) ‘‘including’’ shall not be construed more re-
strictively than the ordinary usage of such term so
as to exclude any other thing not referred to or de-
scribed; and
(5) the phrases ‘‘has entered into a cross-guar-
antee contract’’ and ‘‘has entered into a stop-loss
contract,’’ as used in sections 101(22), 101(23), and
101(30), shall not be construed to refer to a con-
tract which is no longer in effect;
Subtitle B—Cross Guarantee Process
SEC. 111. DEPOSITORY INSTITUTIONS PROHIBITED FROM
OPERATING WITHOUT A CROSS-GUARANTEE
CONTRACT.
After the applicable effective date under section 142,
a depository institution shall be a guaranteed depository
institution or guaranteed banking office unless the deposi-
tory institution—
(a) is a Federal branch that is not an insured
branch (as the terms ‘‘Federal branch’’ and ‘‘in-
sured branch’’ are defined in sections 3(r) and 3(s)
of the Federal Deposit Insurance Act); or
(b) is a failed depository institution.
SEC. 112. PARTIES TO CROSS-GUARANTEE AND STOP-LOSS
CONTRACTS.
(a) CROSS-GUARANTEE CONTRACTS.—
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(1) IN GENERAL.—Each cross-guarantee con-
tract shall have at least the following parties:
(A) A guaranteed financial group as the
party guaranteed under the contract.
(B) The direct guarantors of the guaran-
teed financial group.
(C) A syndicate agent acting on behalf of
the direct guarantors.
(2) AFFILIATE GUARANTEE.—Any affiliate of a
depository institution may guarantee the perform-
ance of such institution’s guaranteed obligations
under a cross-guarantee contract.
(b) STOP-LOSS CONTRACTS.—
(1) IN GENERAL.—Each stop-loss contract shall
have at least the following parties:
(A) A nondepository guarantor as the
party guaranteed under the contract.
(B) 
The 
direct 
guarantors 
of 
the
nondepository guarantor.
(C) A syndicate agent acting on behalf of
the direct guarantors.
(2) AFFILIATE GUARANTEE.—Any affiliate of a
nondepository guarantor may guarantee the per-
formance of the guaranteed obligations of such
nondepository guarantor.
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(c) GROUP CROSS-GUARANTEE CONTRACTS.—
(1) IN GENERAL.—
(A) POOLING
OF
RISK.—Subject to the
provisions of this subsection, the cross-guaran-
tee contracts of two or more guaranteed finan-
cial groups may be pooled for syndication.
(B) SEPARATE
CONTRACT
FOR
A
SYN-
DICATE
OF
POOLED
CONTRACTS.—The direct
guarantors comprising the cross-guarantee syn-
dicate for a group of cross-guarantee contracts
may enter into a separate contract (hereinafter
‘‘group cross-guarantee contract’’) under which
the cross-guaranteed contracts pooled under
such contract shall be incorporated by ref-
erence.
(C) PROPORTIONAL
RISK.—Each direct
guarantor under a group cross-guarantee con-
tract shall have the same proportional rights,
privileges, duties, and obligations in each cross-
guarantee contract incorporated by reference in
the syndicate contract as such guarantor has in
the syndicate contract.
(2) APPROVAL
OF
GROUP
CROSS-GUARANTEE
CONTRACT
AND
ITS
POOL
OF
CROSS-GUARANTEE
CONTRACTS.—The Corporation shall approve or re-
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ject, as a group, a proposed group cross-guarantee
contract and the cross-guarantee contracts pooled
under that contract.
(3) AGGREGATION OF ASSETS FOR PURPOSES
OF RISK DIVERSIFICATION.—The assets of all guar-
anteed parties pooled under a group cross-guarantee
contract shall be aggregated for purposes of apply-
ing the risk diversification requirement established
in section 114(b).
(4) NO CROSS LIABILITY OF GUARANTEED PAR-
TIES.—No guaranteed party under any cross-guar-
antee contract shall be liable for any portion of the
guaranteed obligations of a guaranteed party under
any other cross-guarantee contract which is pooled
under the same group cross-guarantee contract.
(5) INDIVIDUAL
TERMS
AND
RATES.—The
terms, conditions, and premium rates of a cross-
guarantee contract pooled under a group cross-guar-
antee contract may differ from the terms, condi-
tions, and premium rates under any other cross-
guarantee contract pooled under the syndicate con-
tract.
(6) PARTIES TO INDIVIDUAL CROSS-GUARANTEE
CONTRACTS RETAIN SAME RIGHTS AND DUTIES.—No
right, privilege, duty, or obligation that applies
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under this title to any party to a cross-guarantee
contract shall be affected by the pooling of the cross-
guarantee contract with other contracts covered by
a group cross-guarantee contract.
(7) ADDITIONAL GUARANTEED PARTIES UNDER
A GROUP CROSS-GUARANTEE CONTRACT.—A group
cross-guarantee contract may be amended under sec-
tion 123 to add a guaranteed financial group or a
depository institution with a proposed cross-guaran-
tee contract to the existing syndicate contract if—
(A) the syndicate contract remains in com-
pliance with all of the provisions of this title
after the addition of the institution to the syn-
dicate contract; and
(B) the term of the syndicate contract is
not extended beyond the original term of any
cross-guarantee contract already pooled under
the syndicate contract by the addition of the
institution.
(8) TERM OF A GROUP CROSS-GUARANTEE CON-
TRACT.—A group cross-guarantee contract shall con-
tinue in force until each guaranteed party which is
guaranteed under the syndicate contract has ceased
to be a guaranteed party under a cross-guarantee
contract pooled under the syndicate contract.
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(9) LENGTH OF CROSS-GUARANTEE CONTRACT
POOLED
UNDER
A
SYNDICATE
CONTRACT.—No
cross-guarantee contract pooled under a group cross-
guarantee contract shall have a term longer than the
remaining term of the syndicate contract.
(10) RULE
OF
CONSTRUCTION.—Nothing in
this subsection shall be construed as preventing a
cross-guarantee or stop-loss syndicate from becom-
ing a syndicate under two or more cross-guarantee
or stop-loss contracts without including such con-
tracts under a group cross-guarantee contract.
(d) AFFILIATES AND OTHER PARTIES RELATED TO
A DEPOSITORY INSTITUTION WHICH SHALL BE GUARAN-
TEED UNDER ONE CONTRACT.—
(1) IN GENERAL.—Subject to paragraph (4), a
guaranteed depository institution shall be guaran-
teed under the same cross-guarantee contract with
all other affiliated guaranteed depository institu-
tions.
(2) CHAIN BANKS.—Subject to paragraph (4),
if more than two-thirds of the shares of any deposi-
tory institution are directly or indirectly under com-
mon ownership with more than two-thirds of the
shares of any other depository institution, such de-
pository institutions shall be guaranteed depository
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institutions under the same cross-guarantee con-
tract.
(3) DOMESTIC
BRANCHES
AND
AGENCIES
OF
FOREIGN BANKS.—If any branch of a foreign bank
enters into a cross-guarantee contract with a cross-
guarantee syndicate, all branches and agencies of
such foreign bank shall be guaranteed banking of-
fices under the same cross-guarantee contract.
(4) REGULATIONS.—The Corporation shall pre-
scribe regulations for determining which cross-guar-
antee contract shall guarantee the obligations of a
depository institution to which paragraph (1) or (2)
applies.
(e) SUBSIDIARIES WHICH MAY BE GUARANTEED
UNDER ONE CROSS-GUARANTEE CONTRACT.—
(1) IN GENERAL.—A company controlled by a
guaranteed depository institution may be a guaran-
teed company under the same cross-guarantee con-
tract under which the guaranteed depository institu-
tion is guaranteed.
(2) DEFINITION OF CONTROL.—
(A) IN GENERAL.—For purposes of this
subsection, the term ‘‘control’’ means, with re-
spect to one company’s relationship to another
company, one company’s ownership or power to,
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directly or indirectly, vote an aggregate of 50
percent or more of any class or classes of the
securities which separately or together, taking
into account the relative voting weight of dif-
ferent shares, have the power to elect a major-
ity of the members of such other company’s
board of directors.
(B) REGULATIONS.—The Corporation may
prescribe regulations to implement the intent of
this paragraph.
(f) 
PROVISIONS
RELATING
TO
SYNDICATE
AGENTS.—
(1) ANTI-AFFILIATION
RULES.—A syndicate
agent may not—
(A) be an affiliate of any guaranteed party
under any cross-guarantee or stop-loss contract;
or
(B) acquire or retain any ownership inter-
est in any guaranteed party under any cross-
guarantee or stop-loss contract.
(2) NO
DEPOSITORY
INSTITUTION, FOREIGN
BANK OR NON-DEPOSITORY GUARANTOR MAY BE A
SYNDICATE AGENT.—No depository institution, for-
eign bank, or nondepository guarantor may be a
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syndicate agent under any cross-guarantee or stop-
loss contract.
(3) PROHIBITIONS ON INTERLOCKS.—
(A) IN GENERAL.—No owner, director, of-
ficer, employee, or partner of a syndicate agent
may be an owner, director, officer, employee, or
partner of any guaranteed party or other syn-
dicate agent under any cross-guarantee or stop-
loss contract.
(B) SUBCONTRACTORS.—
(i) IN GENERAL.—A subcontractor of
a syndicate agent may be a subcontractor
to any guaranteed party or other syndicate
agent under any cross-guarantee or stop-
loss contract.
(ii) PERSONNEL OVERLAPS.—
(I) IN
GENERAL.—Subject to
subclause (II), an owner, director, of-
ficer, employee, or partner of a sub-
contractor of a syndicate agent may
be an owner, director, officer, em-
ployee, or partner of any guaranteed
party or other syndicate agent under
any cross-guarantee or stop-loss con-
tract.
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(II) EXCEPTION
FOR
GUARAN-
TEED PARTY UNDER THE SAME CON-
TRACT.—An owner, director, officer,
employee, or partner of a subcontrac-
tor of a syndicate agent performing
monitoring work on a guaranteed
party under a cross-guarantee or stop-
loss contract may not be an owner, di-
rector, officer, employee, or partner of
the guaranteed party under the con-
tract.
(C) DEFINITION
OF
OWNER.—For pur-
poses of this paragraph, the term ‘‘owner’’
means, with respect to any company, a person
which controls the company.
SEC. 113. REQUIREMENTS COMMON TO CROSS-GUARANTEE
AND STOP-LOSS CONTRACTS.
(a) STOP-LOSS LIMIT FOR LOSSES OF A GUARAN-
TEED PARTY AS A DIRECT GUARANTOR OF OTHER GUAR-
ANTEED PARTIES.—
(1) DEFINITIONS.—For purposes of this sub-
section:
(A) LEVEL 1 PARTY.—The term ‘‘Level 1
party’’ means a guaranteed party under any
cross-guarantee or stop-loss contract.
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(B) LEVEL 2 PARTY.—The term ‘‘Level 2
party’’ means a direct guarantor of a Level 1
party.
(C) LEVEL 3 PARTY.—The term ‘‘Level 3
party’’ means a direct guarantor of a Level 2
party.
(D) LOSS.—The term ‘‘loss’’ means the
present value, as of the date of a loss event, of
the cash outlays, including administrative ex-
penses, required to fulfill a Level 2 party’s
cross-guarantee obligations to a Level 1 party
due to the occurrence of such loss event, using
as a discount rate the sum of—
(i) 2 percent; and
(ii) the average annual percentage
yield on three-month bills issued by the
Secretary of the Treasury under section
3104(a) of title 31, United States Code, as
determined by the Corporation as of the
most recent issue date preceding the date
of the loss event.
(E) LOSS EVENT.—The term ‘‘loss event’’
means an event described in paragraph (3).
(F) 
STOP-LOSS
LIABILITY.—The 
term
‘‘stop-loss liability’’ means an obligation ac-
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crued by a Level 3 party to a Level 2 party
under paragraph (2).
(G) STOP-LOSS
RECOVERY.—The term
‘‘stop-loss recovery’’ means the amount accrued
by a Level 2 party due to the obligation of a
Level 3 party under paragraph (2).
(2) STOP-LOSS OBLIGATION OF DIRECT GUAR-
ANTORS.—
(A) 
STOP-LOSS
RECOVERY.—for 
any
twelve-calendar month period in which a cross-
guarantee or stop-loss contract exists between
Level 3 parties and a Level 2 party as of the
first day of the first-calendar month of such pe-
riod, the Level 3 parties shall be obligated to
pay to the Level 2 party an amount equal to
the total amount of losses accrued by the Level
2 party in such party’s capacity as a direct
guarantor of Level 1 parties during such
twelve-calendar month period, minus the sum
of—
(i) the greater of—
(I) the amount equal to five
times the total amount of cross-guar-
antee and stop-loss premium income
accruing to the Level 2 party in such
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party’s capacity as a direct guarantor
of Level 1 parties during such twelve-
calendar month period;
(II) the amount equal to five
times the total amount of cross-guar-
antee and stop-loss premium income
accruing to the Level 2 party in such
party’s capacity as a direct guarantor
of Level 1 parties during the twelve-
calendar month period preceding such
twelve-calendar month period;
(III) in the case of a twelve-cal-
endar month period ending in a
month which is among the first eleven
calendar months that the Level 2
party has ever been a party guaran-
teed under a cross-guarantee or stop-
loss contract, the amount equal to the
average monthly cross-guarantee and
stop-loss premium income accruing to
the Level 2 party in such party’s ca-
pacity as a direct guarantor of Level
1 parties since first becoming a party
guaranteed under a cross-guarantee
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or stop-loss contract, multiplied by
sixty; or
(IV) in the case of a twelve-cal-
endar month period ending in a
month which is among the first twen-
ty-three calendar months that the
Level 2 party has ever been a party
guaranteed under a cross-guarantee
or stop-loss contract, the amount
equal to five times the total amount of
cross-guarantee and stop-loss pre-
mium income accruing to the Level 2
party in such party’s capacity as a di-
rect guarantor of Level 1 parties,
without taking into account any re-
duction in premium income due to the
transfer, under section 113(m), of the
Level 2 party’s interest in any cross-
guarantee or stop-loss syndicate; and
(ii) recoveries accrued under this
paragraph by the Level 2 party for each
twelve-calendar month period ending at the
end of each of the first eleven calendar
months in such twelve-calendar month pe-
riod.
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(B) CARRYOVER
FROM
PREVIOUS
CON-
TRACTS.—The amounts calculated in subpara-
graph (A) shall include all losses, premium in-
come, and stop-loss recoveries of the Level 2
party under any cross-guarantee or stop-loss
contracts under which the Level 2 party was a
party guaranteed during such twelve-calendar
month period.
(C) MERGER OF TWO OR MORE GUARAN-
TEED PARTIES.—In the case of any Level 2
party which merged with any other party which
was a Level 2 party guaranteed under another
cross-guarantee 
or 
stop-loss 
contract, 
the
amounts calculated in subparagraph (A) shall
include all losses, premium income, and stop-
loss recoveries of both of the parties prior to
the merger.
(D) OTHER GUARANTEED PARTIES UNDER
THE CONTRACT WHICH WERE PREVIOUSLY DI-
RECT
GUARANTORS.—The amounts calculated
in subparagraph (A) for the Level 2 party shall
include all losses, premium income, and stop-
loss recoveries of any other party guaranteed
under the same cross-guarantee contract as the
Level 2 party, which occurred while such other
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party was a Level 2 party while guaranteed
under the same or another cross-guarantee or
stop-loss contract.
(E) TIMING OF STOP-LOSS RECOVERY.—A
stop-loss recovery shall accrue as of the last day
of the last calendar month of the twelve-cal-
endar month period under which the stop-loss
recovery was calculated.
(F) ADJUSTMENT
FOR
CATASTROPHIC
LOSSES.—
(i) IN GENERAL.—If, for any calendar
month, a closed loop exists in which every
direct guarantor under the contracts in the
closed loop accrues a stop-loss recovery for
such month, then the calculation of stop-
loss recovery for the twelve-calendar month
period ending in such month for all the
contracts in the closed loop shall be ad-
justed as required under clauses (ii) and
(iii).
(ii) ADJUSTMENT.—If, for any cal-
endar month, a closed loop meets the con-
ditions of clause (i), the amounts cal-
culated in subparagraph (A) shall, for the
twelve-calendar month period in which
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such calendar month is the last month, be
adjusted by increasing from five to six,
under clauses (i)(I) and (i)(II) of subpara-
graph (A), the amount multiplied by the
premium income accruing to a Level 2
party and by increasing from sixty to sev-
enty-two, under clause (i)(III) of subpara-
graph (A), the amount multiplied by the
average monthly premium accruing to the
Level 2 party.
(iii) 
FURTHER
ADJUSTMENT.—If,
after making the adjustments to the cal-
culation of stop-loss recovery under clause
(ii), every contract in the closed loop under
clause (i) still accrues a stop-loss recovery,
the amounts under clauses (i)(I) and
(i)(II) of subparagraph (A) shall be in-
creased by one and the amount under
clause (i)(III) of subparagraph (A) shall be
increased by twelve, until at least one di-
rect guarantor under a contract in such
closed loop is not accruing a stop-loss re-
covery for the calendar month in clause (i).
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(3) DETERMINATION
OF
TIME
OF
LOSS.—A
Level 2 party shall accrue a loss as the direct guar-
antor of a Level 1 party as of—
(A) the last day of the calendar month in
which the Level 1 party accrues a stop-loss re-
covery; or
(B) the day on which, with respect to a
Level 1 party which is a guaranteed company,
the earliest of the following occurs:
(i) Notice is filed with the Corporation
under section 118(d)(2)(D) by the cross-
guarantee syndicate of which the Level 2
party is a member that the syndicate has
assumed control of the Level 1 party.
(ii) A transaction is completed which
the Corporation, upon request by the syn-
dicate agent under the contract and pursu-
ant to paragraph (9), determines—
(I) involves the acquisition of the
Level 1 party or a significant portion
of the party’s assets, the merger of
the Level 1 party with any other
party, the liquidation of the Level 1
party, or any other similar transaction
involving the Level 1 party; and
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(II) results proximately in a loss
for the Level 2 parties in their capac-
ity as guarantors under the cross-
guarantee contract.
(iii) The Level 1 party becomes a
debtor in a case under title 11, United
States Code.
(4) PREPARATION OF ORIGINAL LOSS ESTIMATE
BY SYNDICATE AGENT.—The syndicate agent for the
cross-guarantee contract under which a Level 2
party is a direct guarantor shall, whenever a loss
event under subparagraph (3)(B) occurs under such
contract—
(A) estimate the loss for such loss event;
and
(B) by the fifteenth day of the calendar
month following the calendar month in which
such loss event occurs, notify the central elec-
tronic repository of the estimate of the loss
under subparagraph (A).
(5) REVISION
OF
LOSS
ESTIMATE
BY
SYN-
DICATE AGENT.—The syndicate agent for the cross-
guarantee contract under which a Level 2 party is
a direct guarantor shall, whenever a loss event under
subparagraph (3)(B) occurs under such contract—
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(A) revise the original estimate of the loss
for such loss event and notify the central elec-
tronic repository of such revised estimate at
least as often as the fifteenth day of—
(i) the third calendar month following
the calendar month in which the loss event
took place;
(ii) the twelfth calendar month follow-
ing the calendar month in which the loss
event took place; and
(iii) every twelfth month after the cal-
endar month in clause (ii); and
(B) for each estimate of the loss described
in clauses (A)(ii) and (A)(iii), obtain from a
third party a confirmation of the reasonableness
of the revised estimate of the loss.
(6) COMPLETION OF CASH OUTLAYS BECOMES
FINAL
AMOUNT.—Notwithstanding paragraph (5),
once a Level 2 party has made the final cash dis-
bursement to fulfill such party’s cross-guarantee ob-
ligations due to any loss event under subparagraph
(3)(B)—
(A) the syndicate agent for the cross-guar-
antee contract under which the Level 2 party is
a direct guarantor shall calculate the loss from
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person in its capacity as a Level 3 party with
the amount such person is entitled to receive in
its capacity as a Level 2 party to determine the
overall liability or right to payment for such
person.
(D) NOTIFICATION
OF
PARTIES.—Within
five business days after receiving notification
under paragraphs (4), (5), and (6), the central
electronic repository shall notify any Level 2
party or Level 3 party of the results of the cal-
culations under subparagraphs (A), (B), and
(C).
(E) SETTLEMENT.—
(i) PAYMENTS TO BE MADE.—Within
three business days after receiving notifica-
tion under subparagraph (D), each party
which, given the calculations under sub-
paragraph (C), has a net liability shall pay
the amount of such liability to the central
electronic repository.
(ii) DISBURSAL OF PAYMENTS.—Upon
receiving all payments under clause (i), the
central electronic repository shall promptly
disburse to each party which has a right to
payment, given the calculations under sub-
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paragraph (C), the amount owed such
party.
(iii) PENALTIES
FOR
LATE
PAY-
MENT.—If an obligation under clause (i) is
not paid in a timely manner, any party
which fails to perform its obligation under
this title to pay the balance owed under
clause (i), including the guarantors of the
specific party most directly liable under
clause (i), shall be liable to the Corporation
for damages of 10 percent of the unpaid
amount for which the party is obliged, plus
interest at the rate specified under sub-
paragraph (C) of paragraph (8).
(F) REGULATIONS.—The Corporation may
prescribe such regulations as may be necessary
to implement this paragraph.
(8) CALCULATION
OF
STOP-LOSS
PAYMENTS
PLUS INTEREST.—
(A) ORIGINAL ESTIMATE.—If a determina-
tion under subparagraph (7)(A) is based on the
original estimate of loss under paragraph (4)
and results in a stop-loss recovery for a Level
2 party, each Level 3 party shall owe to the
Level 2 party the amount of the stop-loss liabil-
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ity for such Level 3 party plus interest on the
amount of such liability from the last day of the
month in which the loss occurred to the date of
payment under this subparagraph.
(B) REVISION OF ESTIMATES.—If a deter-
mination under subparagraph (7)(A) results
in—
(i) an increase from the previous esti-
mate of the stop-loss recovery for a par-
ticular month, then each Level 3 party
shall owe to the Level 2 party the amount
of the increase in the Level 3 party’s stop-
loss liability plus interest on the amount of
the increase in such liability from the last
day of such month until payment is made
under this clause; or
(ii) a decrease from the previous esti-
mate of the stop-loss recovery for a par-
ticular month, then the Level 2 party shall
owe each Level 3 party the amount of the
decrease in such Level 3 party’s stop-loss
liability plus interest on the amount of the
decrease in such liability from the last day
of such month until payment is made
under this clause.
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(C) INTEREST RATE.—The parties to any
cross-guarantee or stop-loss contract shall agree
to the interest rate to be used for the calcula-
tion of interest under subparagraphs (A) and
(B).
(9) CGRC ADJUDICATION OF TIMING OF LOSS
EVENTS.—
(A) INFORMAL CGRC ADJUDICATION.—The
Corporation shall establish procedures to adju-
dicate the timing of loss events under para-
graph (3)(B)(ii).
(B) JUDICIAL
REVIEW.—Any guaranteed
party may seek judicial review of any deter-
mination under subparagraph (A).
(b) DIRECT GUARANTOR’S CROSS-GUARANTEE OBLI-
GATIONS UNDER
THE CONTRACT
ARE INDEPENDENT
FROM OTHER PARTIES’ OBLIGATIONS.—The cross-guar-
antee obligations of a direct guarantor under any cross-
guarantee or stop-loss contract shall be independent of
any obligation of any other party under the contract.
(c) GUARANTEED PARTY CANNOT BE
A DIRECT
GUARANTOR UNDER THE SAME CONTRACT.—No guaran-
teed party may be a direct guarantor under the cross-
guarantee or stop-loss contract under which such party is
a guaranteed party.
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(d) DIRECT GUARANTORS PROHIBITED FROM OB-
TAINING COLLATERAL FOR CROSS-GUARANTEE OBLIGA-
TIONS.—No direct guarantor under any cross-guarantee
or stop-loss contract may obtain or retain a lien or security
interest in a guaranteed party under the contract, or in
any assets of the guaranteed party, in connection with
such guarantor’s cross-guarantee obligations under the
contract, unless the guaranteed party is a guaranteed
banking office.
(e) PROVISIONS OF CONTRACT REGARDING DIVISION
OF LIABILITY.—
(1) SEVERAL LIABILITY.—No direct guarantor
under any cross-guarantee or stop-loss contract shall
be jointly liable for the cross-guarantee obligations
of any other direct guarantor under the contract.
(2) DIVISION OF LIABILITY.—
(A) DETERMINED BY CONTRACT.—Subject
to section 116(d), the terms of a cross-guaran-
tee or stop-loss contract shall establish the divi-
sion of liability among the direct guarantors
under the contract.
(B) ADJUSTMENT IN CASE OF ERROR.—If
the division of liability under a cross-guarantee
or stop-loss contract does not equal 100 per-
cent, each direct guarantor’s assigned liability
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under the contract shall be adjusted proportion-
ately so that the division of liability equals 100
percent.
(3) LIABILITY OF DIRECT GUARANTOR PROPOR-
TIONATE TO INTEREST IN SYNDICATE.—The rights,
privileges, duties, and obligations of a direct guaran-
tor under a cross-guarantee or stop-loss contract
shall be proportionate to such guarantor’s interest in
the syndicate.
(4) SYNDICATES NOT PARTNERSHIPS OR JOINT
VENTURES.—Notwithstanding any State law, a
cross-guarantee or stop-loss syndicate is not a part-
nership or joint venture, except for purposes of sec-
tion 117(c)(1).
(f) PREMIUM REQUIREMENTS.—Each cross-guaran-
tee and stop-loss contract shall describe the method for
calculating, and the timing of payment, for any premium
payable to the direct guarantors under the contract.
(g) MAXIMUM TERM OF CONTRACTS.—
(1) TERM OF CONTRACT.—A cross-guarantee or
stop-loss contract may not have a term of more than
five years.
(2) AMENDMENTS.—The parties to any cross-
guarantee or stop-loss contract may agree to extend
the length of the contract as long as the contract as
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amended still expires within five years after the
original effective date of the contract.
(3) RENEWAL
OF
CONTRACT
MUST
BE
AP-
PROVED BY THE CORPORATION.—No cross-guaran-
tee or stop-loss contract may be renewed by the par-
ties to the contract, and no successor contract may
become effective, without the approval of the Cor-
poration under section 123.
(4) PENALTIES
FOR
CONTINUING
A
CROSS-
GUARANTEE CONTRACT AFTER EXPIRATION DATE.—
For every day after the thirtieth day following the
expiration of a cross-guarantee contract in which—
(A) the direct guarantors have not as-
sumed control under section 118(a) of all the
guaranteed companies guaranteed under the
contract;
(B) a guaranteed party under such con-
tract has not become a guaranteed party under
another cross-guarantee contract;
(C) a successor contract is not being con-
sidered for approval under section 123 or the
Corporation has already rejected two successor
contracts;
(D) the guaranteed party is not appealing
the rejection by the Corporation, under section
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123, of a successor contract or final judgment
has been reached on such an appeal; or
(E) the guaranteed party is not a debtor
under any proceeding under title 11 of the
United States Code,
the Corporation may penalize each direct guarantor
under such contract up to $100,000.
(h) CANCELLATION
OF
CONTRACTS
BY
SYN-
DICATES.—
(1) RIGHT TO CANCEL.—
(A) DEFAULT
RULE.—Unless otherwise
agreed in a cross-guarantee or stop-loss con-
tract, a cross-guarantee or stop-loss syndicate
may cancel such contract at any time without
cause provided that the syndicate agent under
such contract provides notice of such cancella-
tion to the Corporation and the guaranteed
party or parties under the contract at least
ninety days prior to the effective date of can-
cellation.
(B) MINIMUM NOTICE PERIOD STILL RE-
QUIRED FOR ANY CONTRARY AGREEMENT.—If
the parties to a cross-guarantee or stop-loss
contract agree to cancellation rules different
than those provided under subparagraph (A),
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the contract shall still require the syndicate
agent under the contract to give notice of can-
cellation to the Corporation and to the guaran-
teed party or parties under the contract at least
ninety days prior to the effective date of the
cancellation.
(C) WITHDRAWAL OF CANCELLATION NO-
TICE.—A cross-guarantee syndicate may, prior
to the cancellation becoming effective, withdraw
the cancellation notice issued under this para-
graph.
(2) CANCELLATION OF ONE GUARANTEED FI-
NANCIAL
GROUP
UNDER
A
GROUP
CONTRACT.—A
cross-guarantee syndicate may cancel a cross-guar-
antee contract with one guaranteed financial group
under a group cross-guarantee contract without af-
fecting the rights, privileges, duties, and obligations
arising out of the syndicate contract with regard to
the other guaranteed financial groups under the syn-
dicate contract.
(3) LIMITATIONS ON GUARANTEED PARTY.—A
guaranteed party under any cross-guarantee or stop-
loss contract may not become a direct guarantor
under any other cross-guarantee or stop-loss con-
tract during any of the following periods:
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(A) The period beginning on the date such
party receives a notice of cancellation under
paragraph (1) or (2) with respect to such con-
tract and ending on the date the party becomes
a guaranteed party under a successor contract
or the cancellation notice is withdrawn under
paragraph (1)(C).
(B) The period beginning on the date the
contract expires and ending on the date the
party becomes a guaranteed party under a suc-
cessor contract.
(4) CONTINUED
EFFECTIVENESS
OF
CROSS-
GUARANTEE CONTRACTS UNTIL OTHER COVERAGE IS
OBTAINED.—
(A) IN GENERAL.—The obligations of any
party under a cross-guarantee or stop-loss con-
tract shall remain in effect after the effective
date of the cancellation of the contract by the
direct guarantors or after the expiration of such
contract, as the case may be, until—
(i) the guaranteed party becomes a
guaranteed party under another cross-
guarantee or stop-loss contract; or
(ii) in the case of a guaranteed party
which ceases to exist as a legal entity, the
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guaranteed obligations of the institution
are satisfied or become guaranteed obliga-
tions covered under another cross-guaran-
tee or stop-loss contract.
(B) CANCELLATION
WHEN
NONDEPOSI-
TORY GUARANTOR IS NOT A DIRECT GUARAN-
TOR.—Notwithstanding subparagraph (A), a
cancellation of a stop-loss contract by a stop-
loss syndicate shall take effect immediately if
the party guaranteed under the contract—
(i) is not at the time of cancellation a
direct guarantor under any cross-guarantee
or stop-loss contract; and
(ii) has transferred any remaining
risk under any cross-guarantee or stop-loss
contract under which such guarantor was
formerly a direct guarantor to another di-
rect guarantor.
(i) CANCELLATION OF CONTRACTS BY GUARANTEED
PARTY.—
(1) IN
GENERAL.—The guaranteed financial
group or nondepository guarantor which is the party
guaranteed under a cross-guarantee or stop-loss con-
tract may notify the syndicate agent for the direct
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guarantors under the contract at any time of such
party’s intention to cancel the contract.
(2) CANCELLATION
NOT
EFFECTIVE
UNTIL
SUBSTITUTE
COVERAGE
IS
OBTAINED.—The can-
cellation of any cross-guarantee or stop-loss contract
under paragraph (1) shall not take effect until the
canceling party becomes a guaranteed financial
group or a nondepository guarantor under another
cross-guarantee or stop-loss contract.
(3) ALLOWING
NONDEPOSITORY
GUARANTORS
TO
EXIT
THE
BUSINESS.—Notwithstanding para-
graph (2), a cancellation of a stop-loss contract by
a nondepository guarantor shall take effect imme-
diately if the nondepository guarantor—
(A) is not at the time of cancellation a di-
rect guarantor under any cross-guarantee or
stop-loss contract; and
(B) has transferred any remaining risk
under any cross-guarantee or stop-loss contract
under which such guarantor was formerly a di-
rect guarantor to another direct guarantor.
(4) CANCELLATION FEE.—The cross-guarantee
or stop-loss syndicate under a cross-guarantee or
stop-loss contract which is canceled pursuant to
paragraph (1) may impose a cancellation fee in an
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amount determined in accordance with the terms of
the contract.
(j) CONTINUED EFFECTIVENESS
OF CONTRACTS
AFTER CONVERSION OF CHARTER OF DEPOSITORY INSTI-
TUTION.—If—
(1) any State depository institution becomes a
Federal depository institution;
(2) any Federal depository institution becomes
a State depository institution;
(3) any bank becomes a savings association;
(4) any savings association becomes a bank; or
(5) any depository institution in any other way
modifies its legal status,
through a conversion of the charter of the depository insti-
tution, any cross-guarantee contract under which the insti-
tution is a guaranteed depository institution and which is
in effect immediately before such conversion shall remain
in effect after the conversion.
(k) CONTINUING APPLICABILITY OF OBLIGATIONS
UNDER THE CONTRACTS.—
(1) NO
VOIDING
OR
RESCINDING
OF
CON-
TRACTS.—No party to a cross-guarantee or stop-loss
contract may void or rescind the contract, regardless
of any defense to the existence or enforceability of
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the contract that might exist under Federal or State
law.
(2) NO EXCUSES TO PERFORMANCE.—Notwith-
standing any provision of Federal or State law, no
excuse for the failure to perform any obligation
under a cross-guarantee or stop-loss contract shall
be effective.
(3) NONCOMPLIANCE DOES NOT AFFECT OBLI-
GATIONS.—A party to a cross-guarantee or stop-loss
contract shall remain obliged under the contract re-
gardless of whether—
(A) the contract ceases to comply with any
requirement under this title; or
(B) one or more parties to the contract fail
to comply with this title.
(l) DISTRIBUTION OF LOSSES BETWEEN PRIOR AND
SUCCESSOR SYNDICATES.—
(1) CLAIMS-MADE
GUARANTEE.—Subject to
paragraph (2), as between two or more cross-guar-
antee or stop-loss syndicates which have over time
guaranteed a particular guaranteed party, a cross-
guarantee obligation shall lie with the syndicate
which was the cross-guarantee or stop-loss syndicate
at the time a cause of action described under section
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117(f)(1)(A)(i) was filed with respect to the obliga-
tion.
(2) 
EXCEPTION
FOR
STOP-LOSS
OBLIGA-
TIONS.—The obligation of direct guarantors under
section 113(a) shall lie with the cross-guarantee syn-
dicate described under paragraph (2)(A) of such
subsection.
(m) SUBSTITUTION OF DIRECT GUARANTORS.—
(1) AUTHORIZATION OF TRANSFERS SUBJECT
TO CGRC APPROVAL.—
(A) IN GENERAL.—Any direct guarantor’s
rights, privileges, duties and obligations under a
cross-guarantee or stop-loss contract, and any
portion of any such rights, privileges, duties,
and obligations, may be transferred to a succes-
sor direct guarantor, subject to the approval of
the Corporation (pursuant to section 123 of
this title).
(B) TRANSFER
OF
LONG-TAIL
OBLIGA-
TIONS.—A person which was formerly a direct
guarantor under a cross-guarantee or stop-loss
contract which was formerly, but no longer is,
in effect may transfer to any person which is a
designated direct guarantor under section
116(b) any residual rights, privileges, duties
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and obligations under the contract, subject to
the approval of the Corporation (pursuant to
section 123 of this title).
(2) TRANSFEROR
NO
LONGER
OBLIGED
ON
CONTRACT.—Notwithstanding any Federal or State
law, a transferor of an interest under paragraph (1)
shall not be obliged to perform the transferee’s obli-
gations under the contract should the transferee fail
to perform.
(3) PARTIES AUTHORIZED TO RESTRICT SUB-
STITUTION
OF
GUARANTORS
IN
A
CONTRACT.—A
guaranteed party or a cross-guarantee or stop-loss
syndicate under a cross-guarantee or stop-loss con-
tract may provide in such contract that any transfer
under paragraph (1) of any interest of any direct
guarantor in such contract shall be subject to the
approval of such party or syndicate.
(4) ALLOCATION OF INCOME AND LOSSES BE-
TWEEN THE TRANSFEROR AND TRANSFEREE.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), a transferor’s accrued (but unpaid)
premium income and losses as of the date of
transfer under paragraph (1) may be allocated
between the transferor and transferee in any
manner provided for in the transfer agreement.
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(B) LOSSES ON CROSS-GUARANTEE OBLI-
GATIONS.—The transferor shall be liable for
any losses due to a loss event (as defined in sec-
tion 113(a)) occurring prior to a transfer under
paragraph (1) and the transferee shall be liable
for any losses due to a loss event after the
transfer.
(n) SYNDICATE VOTING RULES.—
(1) PROPORTIONAL VOTING.—Each cross-guar-
antee and stop-loss contract shall provide that a di-
rect guarantor’s voting rights in the cross-guarantee
or stop-loss syndicate shall be proportional to such
guarantor’s interest in the syndicate.
(2) VARIATIONS
PERMITTED
IN
VOTING
RE-
QUIREMENTS.—A cross-guarantee or stop-loss con-
tract may provide that the number of votes needed
to approve an action by a cross-guarantee or stop-
loss syndicate under the contract may differ depend-
ing upon the action on which a vote is taken.
(o) GUARANTEED PARTY CAN BE COVERED ONLY
UNDER ONE CONTRACT.—No guaranteed party under
any cross-guarantee or stop-loss contract may be a guar-
anteed party under another cross-guarantee or stop-loss
contract.
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(p) AUTHORITY OF THE CGRC TO DIRECT TRANS-
FER.—
(1) IN GENERAL.—If any merger, acquisition,
or other combination of two or more direct guaran-
tors within any cross-guarantee or stop-loss syn-
dicate occurs which causes the contract to materially
exceed the limitations set forth in section 114(b)(1)
or paragraph (1) or (2) of section 115(b), the Cor-
poration may issue an order directing the merged
guarantor to obtain a successor for that part of the
guarantor’s interest that exceeds the statutory limit.
(2) EXTENT OF GUARANTEED PARTY’S ABILITY
TO BLOCK TRANSFER.—In the case of any transfer
under paragraph (1), a guaranteed party may bar
the transfer under the authority of subsection
(m)(3) if such party demonstrates that that transfer
of the interest to a particular guarantor would raise
reasonable competitive concerns.
(q) MERGER OF TWO OR MORE GUARANTEED PAR-
TIES.—After any merger, acquisition, or other combina-
tion of two or more guaranteed parties, the successor par-
ty’s cross-guarantee or stop-loss contract shall meet the
same requirements under section 114(b)(1) or paragraph
(1) or (2) of section 115(b), that the successor would have
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to meet if the successor sought to become a guaranteed
party under a new cross-guarantee or stop-loss contract.
(r) MODIFICATION OF CONTRACTS.—An agreement
amending a cross-guarantee or stop-loss contract needs no
consideration to be binding.
(s) BAR
ON REINSURANCE.—Subject to sections
112(a)(2) and 112(b)(2), a direct guarantor may not rein-
sure such guarantor’s interest in a cross-guarantee or
stop-loss contract.
(t) RULE OF CONSTRUCTION RELATING TO CON-
TRACT TERMS.—No provision of this title shall be con-
strued as prohibiting any cross-guarantee or stop-loss con-
tract from containing any term or condition other than
terms or conditions expressly prohibited by this title.
SEC. 114. REQUIREMENTS APPLICABLE ONLY TO CROSS-
GUARANTEE CONTRACTS.
(a) OBLIGATIONS GUARANTEED UNDER A CROSS-
GUARANTEE CONTRACT.—
(1) OBLIGATIONS REQUIRED TO BE GUARAN-
TEED
OBLIGATIONS.—The following obligations of
any guaranteed company or guaranteed banking of-
fice shall be guaranteed obligations under a cross-
guarantee contract:
(A) DEPOSITS.—
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(i) BANKS
AND
SAVINGS
ASSOCIA-
TIONS.—In the case of a guaranteed de-
pository institution, all deposits.
(ii) BRANCHES OF FOREIGN DEPOSI-
TORY
INSTITUTIONS.—In the case of a
guaranteed banking office, all deposits of
such office payable at a location within the
United States.
(B) LOANS AND ADVANCES FROM A DI-
RECT GUARANTOR, FEDERAL RESERVE BANK,
OR FEDERAL HOME LOAN BANK.—All loans and
advances from a direct guarantor, a Federal
Reserve Bank, or a Federal home loan bank.
(C) 
INTEREST-BEARING
OBLIGATIONS
OTHER THAN SUBORDINATED DEBT.—All inter-
est-bearing obligations other than subordinated
debt.
(D) BALANCES
DUE
CLEARINGHOUSES,
THE FEDERAL RESERVE, AND IN SETTLEMENT
OF
OTHER
TRANSACTIONS.—All obligations
owed to clearinghouses, to the Federal Reserve
for funds transfers, and to other funds and se-
curities clearance and settlement systems.
(E) CROSS-GUARANTEE
OBLIGATIONS.—
Cross-guarantee obligations for which the guar-
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anteed company is liable as a direct guarantor
under any other cross-guarantee or stop-loss
contract.
(F) CERTAIN
OTHER
OBLIGATIONS.—All
direct and contingent liabilities under any con-
tract or commitment under—
(i) any letter of credit or bankers’ ac-
ceptance; and
(ii) any securities contract, commodity
contract, forward contract, repurchase
agreement, or swap agreement (as such
terms are defined in section 11(e)(8)(D) of
the Federal Deposit Insurance Act).
(G) LIABILITY UNDER RECOURSE AGREE-
MENTS.—Any liability under recourse agree-
ments that arises when a guaranteed company
or guaranteed banking office sells loans or
other assets.
(H) CERTAIN
LINES
OF
CREDIT.—Any
binding commitment to lend funds.
(I) ACCRUED INTEREST.—Any accrued in-
terest on an underlying obligation which is a
guaranteed obligation.
(J) FRAUD RELATED TO SUBORDINATED
DEBT.—The liability of any guaranteed party
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for damages due to fraudulent actions of such
party related to marketing subordinated debt.
(K) RESIDUAL OBLIGATIONS WHICH THE
CGRC DEEMS MUST BE GUARANTEED.—Subject
to paragraph (3)(C), any other obligation which
the Corporation determines, by regulation con-
sistent with the purposes of this title, should be
guaranteed under each cross-guarantee con-
tract.
(2) OBLIGATIONS WHICH MAY NOT BE GUARAN-
TEED.—The following obligations of any guaranteed
company or guaranteed banking office may not be
guaranteed obligations under a cross-guarantee con-
tract:
(A) SUBORDINATED DEBT.—
(i) IN GENERAL.—Subordinated debt
issued by the guaranteed company or guar-
anteed banking office.
(ii) INCLUDES DEBT WHICH MAY BE
REDEEMED
BY
THE
DEBTHOLDER
BY
CHECK OR OTHER MEANS.—For purposes
of this subparagraph, the term ‘‘subordi-
nated debt’’ includes subordinated debt
which may be withdrawn by or credited to
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the debtholder by a check, wire transfer, or
other order of the debtholder.
(B) EQUITY INTERESTS.—Any equity in-
terest in the guaranteed company or guaranteed
banking office.
(3) OBLIGATIONS
WHICH
MAY
BE
INCLUDED
UNDER A CROSS-GUARANTEE CONTRACT.—
(A) IN GENERAL.—Any obligation of any
guaranteed company or guaranteed banking of-
fice which is not required to be, or not prohib-
ited from being, a guaranteed obligation under
paragraphs (1) and (2) may be a guaranteed
obligation under a cross-guarantee contract to
the extent the contract so expressly provides.
(B) RULES UPON SWITCH TO A SUCCESSOR
CONTRACT.—Any obligation that was a guaran-
teed obligation under the previous cross-guaran-
tee contract shall be a guaranteed obligation
under the successor contract, if such obligation
accrues prior to the obligee receiving notice
from the syndicate agent under the successor
contract that obligations of the same type as
were guaranteed under the previous contract
shall not be guaranteed under the successor
contract.
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(C) JUDGMENTS
AND
SETTLEMENTS.—
Unless the cross-guarantee contract expressly
provides to the contrary, no judgment or settle-
ment from any action arising from any alleged
tortious conduct, breach of contract, or viola-
tion of statutory obligation by the guaranteed
company shall be a guaranteed obligation.
(b) RISK DIVERSIFICATION.—
(1) MINIMUM NUMBER OF DIRECT AND SEC-
OND-TIER GUARANTORS.—Each cross-guarantee con-
tract shall comply with the requirements relating to
the maximum percentage of all guaranteed obliga-
tions under the contract which may be guaranteed
by any one direct guarantor and the minimum num-
ber of second-tier guarantors which the guaranteed
party or parties shall have in the aggregate, as de-
termined under the following table (as adjusted pur-
suant to paragraph (2)) on the basis of the total as-
sets of all the guaranteed parties under the contract:
Aggregate amount of assets of all guaranteed parties under the
contract
Maximum
percentage of
cross-guaran-
tee liability
assumable by
any 1 direct
guarantor
Minimum
number of
second-tier
guarantors
$100,000,000 or less ..................................................
5.0
100
Greater than $100,000,000 but less than or equal to
$500,000,000 .........................................................
4.0
125
Greater than $500,000,000 but less than or equal to
$1,000,000,000 ......................................................
2.5
150
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Aggregate amount of assets of all guaranteed parties under the
contract
Maximum
percentage of
cross-guaran-
tee liability
assumable by
any 1 direct
guarantor
Minimum
number of
second-tier
guarantors
Greater than $1,000,000,000 but less than or equal
to $10,000,000,000 ................................................
1.5
200
More than $10,000,000,000 ......................................
1.0
250
(2) ADJUSTMENT
OF
DOLLAR
AMOUNTS
FOR
INFLATION.—The amounts contained in the table in
paragraph (1) relating to the aggregate assets of
guaranteed parties under any cross-guarantee con-
tract shall be adjusted annually by the Corporation,
after the end of the one-year period beginning on the
date of the enactment of this Act, based on the
change in the deflator for the gross domestic prod-
uct.
(c) BASIS FOR CALCULATING EQUITY CAPITAL.—
Each cross-guarantee contract shall describe the manner
in which the equity capital of the guaranteed financial
group shall be calculated for purposes of the contract.
(d) EMERGENCY LIQUIDITY.—Notwithstanding sec-
tion 113(e)(3), the parties to a cross-guarantee contract
may include terms relating to the provision of emergency
liquidity to a guaranteed party by any direct guarantor
without regard to the relative interest in the contract held
by any guarantor providing the liquidity.
(e) INTERNAL GUARANTEES.—A guaranteed com-
pany under any cross-guarantee contract shall be jointly
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and severally liable to the direct guarantors under such
contract for any loss incurred by the guarantors in connec-
tion with the cross-guarantee obligations of the guarantors
to any other guaranteed company under such contract.
(f) DELEGATION
OF PERFORMANCE
OF GUARAN-
TEED OBLIGATIONS.—
(1) IN GENERAL.—No guaranteed company or
guaranteed banking office may delegate or assign
the performance of a guaranteed obligation unless
the person to which the performance is delegated or
assigned is a guaranteed company or guaranteed
banking office.
(2) TRANSFERRING PARTY AND SYNDICATE NO
LONGER OBLIGED ON OBLIGATION.—Notwithstand-
ing any Federal or State law, a guaranteed company
or guaranteed banking office that was the transferor
of the guaranteed obligation, and the cross-guaran-
tee syndicate for such a company or office, shall not
be obliged to perform on a guaranteed obligation
transferred in compliance with paragraph (1).
SEC. 115. REQUIREMENTS APPLICABLE ONLY TO STOP-
LOSS CONTRACTS.
(a) OBLIGATIONS GUARANTEED UNDER
A STOP-
LOSS CONTRACT.—
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(1) OBLIGATIONS REQUIRED TO BE GUARAN-
TEED
OBLIGATIONS.—A nondepository guarantor’s
cross-guarantee obligations shall be guaranteed obli-
gations under a stop-loss contract.
(2) NO OTHER GUARANTEED OBLIGATIONS.—
Except for the obligations described in paragraph
(1), no obligation of a nondepository guarantor may
be a guaranteed obligation.
(b) RISK DIVERSIFICATION.—
(1) MINIMUM NUMBERS OF DIRECT GUARAN-
TORS.—A direct guarantor under a stop-loss con-
tract may not guarantee more than 2 percent of the
guaranteed obligations under such contract.
(2) SECOND-TIER
GUARANTORS.—The direct
guarantors under any stop-loss contract shall have,
in the aggregate, no fewer than one hundred and
fifty direct guarantors.
SEC. 116. ELIGIBILITY AND REQUIREMENTS FOR DIRECT
GUARANTORS.
(a) ELIGIBILITY.—
(1) IN GENERAL.—No person may become a di-
rect guarantor unless such person is a guaranteed
company or a nondepository guarantor.
(2) NONDEPOSITORY GUARANTOR.—
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(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C) of this paragraph and sub-
section (c) of this section, any person may be
a nondepository guarantor.
(B) INELIGIBILITY OF DEPOSITORY INSTI-
TUTIONS.—
(i) IN GENERAL.—No depository insti-
tution, or subsidiary of a depository insti-
tution, may be a nondepository guarantor.
(ii) RULE
OF
CONSTRUCTION
FOR
FOREIGN BANKS.—Clause (i) shall not be
construed as prohibiting a foreign bank
which has a branch in the United States
from being a nondepository guarantor.
(C) INELIGIBILITY OF GOVERNMENT ENTI-
TIES.—
(i) IN GENERAL.—No entity which—
(I) has direct or indirect taxing
authority;
(II) is a government sponsored
enterprise; or
(III) may issue securities in
which the holders of the securities are
exempt from taxation under State or
Federal law,
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may be a nondepository guarantor.
(ii) RULE
OF
CONSTRUCTION
FOR
GOVERNMENT
PENSION
FUNDS.—Clause
(i) shall not be construed as to prohibit
any pension fund operated for the benefit
of government employees from being a
nondepository guarantor.
(3) GUARANTEED
DEPOSITORY
INSTITUTIONS
AUTHORIZED
TO
BE
DIRECT
GUARANTORS.—Not-
withstanding any other Federal or State law restrict-
ing the powers of depository institutions, a guaran-
teed depository institution may be a direct guarantor
under any cross-guarantee or stop-loss contract.
(b) DESIGNATED DIRECT GUARANTOR.—
(1) ONLY ONE GUARANTEED COMPANY WITHIN
A GUARANTEED FINANCIAL GROUP MAY BE A DI-
RECT GUARANTOR.—No guaranteed company shall
be a direct guarantor if another guaranteed com-
pany under the same cross-guarantee contract al-
ready is a direct guarantor under any cross-guaran-
tee or stop-loss contract.
(2) DESIGNATION OF DIRECT GUARANTOR IN
CROSS-GUARANTEE
CONTRACT.—In the case of a
cross-guarantee contract in which two or more com-
panies are guaranteed under the contract, the con-
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tract shall designate which guaranteed company
may, in accordance with paragraph (1), be a direct
guarantor.
(c) FINANCIAL
RESOURCE
REQUIREMENTS
FOR
NONDEPOSITORY GUARANTORS.—
(1) NET WORTH.—No person may become a
nondepository guarantor unless such person has a
net worth of at least $100,000,000 at the time such
person would, but for this paragraph, become a di-
rect guarantor under a cross-guarantee or stop-loss
contract.
(2) ASSET REQUIREMENTS.—Only assets main-
tained within the United States and subject to the
jurisdiction of a United States court may be taken
into account for the purpose of meeting the require-
ments of paragraph (1).
(d) RISK DIVERSIFICATION REQUIREMENTS FOR DI-
RECT GUARANTORS.—
(1) PROJECTED
ANNUAL
PREMIUM
CAPACITY
AND PROJECTED ANNUAL PREMIUM LIMIT.—A per-
son may not become a direct guarantor under a
cross-guarantee or stop-loss contract if, upon the
contract (but for this paragraph) taking effect—
(A) the sum of the estimated annual pre-
mium which the person would receive as a di-
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rect guarantor under the contract and the per-
son’s projected annual premium income would
exceed such person’s projected annual premium
capacity as of—
(i) in the case of a contract which
would take effect on or before the fifteenth
day of any calendar month, the second cal-
endar month preceding such calendar
month; or
(ii) in the case of a contract which
would take effect after the fifteenth day of
any calendar month, the end of the cal-
endar month preceding such calendar
month; or
(B) the estimated annual premium which
the person would receive as a direct guarantor
under the contract would exceed such person’s
projected annual premium limit as of—
(i) in the case of a contract which
would take effect on or before the fifteenth
day of any calendar month, the second cal-
endar month preceding such calendar
month; or
(ii) in the case of a contract which
would take effect after the fifteenth day of
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any calendar month, the end of the cal-
endar month preceding such calendar
month.
(2) CALCULATION OF PROJECTED ANNUAL PRE-
MIUM.—
(A) IN
GENERAL.—The syndicate agent
under any cross-guarantee or stop-loss contract
shall determine the projected annual premium
earned by any direct guarantor for any calendar
month by calculating the amount of such guar-
antor’s share of the premium accrued under the
contract 
during 
such 
month 
and 
then
annualizing such amount.
(B) FIRST
TWO
MONTHS.—During the
first two calendar months in which any cross-
guarantee or stop-loss contract is in effect, the
syndicate agent shall determine the projected
annual premium under the contract for each of
these two calendar months by annualizing the
premium rate in effect on the date the contract
becomes effective.
(3) CALCULATION OF THE ESTIMATED ANNUAL
PREMIUM FOR THE APPROVED CONTRACT.—
(A) IN GENERAL.—For purposes of para-
graph (1), the term ‘‘estimated annual pre-
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mium’’ means the annualized premium rate
likely to be in effect on the date the contract
becomes effective.
(B) SYNDICATE
AGENT
ESTIMATE.—The
proposed syndicate agent for the contract shall
make a reasonable estimate of the amount in
paragraph (1) within five days prior to the date
on which the contract is to become effective.
(4) CALCULATION OF PROJECTED ANNUAL PRE-
MIUM INCOME.—For purposes of making any deter-
mination under paragraph (1)(A) with respect to a
direct guarantor, the term ‘‘projected annual pre-
mium income’’ means the total projected annual pre-
miums from all cross-guarantee and stop-loss con-
tracts under which such guarantor is a direct guar-
antor, other than the contract for which such deter-
mination is being made, as of—
(A) in the case of contract which would be-
come effective on or before the fifteenth day of
any calendar month, the second calendar month
preceding such calendar month; and
(B) in the case of a contract which would
become effective after the fifteenth day of any
calendar month, the calendar month preceding
such calendar month.
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(5) ADJUSTMENT OF PROJECTED ANNUAL PRE-
MIUM CAPACITY FOR CHANGED CIRCUMSTANCES.—
(A) AUTHORIZATION.—The Corporation
may issue rules adjusting the projected annual
premium capacity below 3 percent if the Cor-
poration determines that the percentage is too
high to ensure an adequate capital base for the
cross-guarantee system.
(B) LIMITS ON ADJUSTMENT.—The Cor-
poration may adjust the projected annual pre-
mium capacity upward if the Corporation has
previously adjusted the capacity percentage
downward under subparagraph (A), except that
the Corporation may not establish a projected
annual premium capacity in excess of 3 percent.
(e) LIABILITY OF ACQUIRER OF ANY DIRECT GUAR-
ANTOR.—Any person which acquires (as defined in section
13(f)(8)(B) of the Federal Deposit Insurance Act) any di-
rect guarantor shall be obligated for all of the cross-guar-
antee obligations of such guarantor under any cross-guar-
antee or stop-loss contract to which such guarantor is a
direct guarantor.
SEC. 117. PROVISIONS RELATING TO CROSS-GUARANTEE
AND STOP-LOSS SYNDICATES.
(a) POWERS AND DUTIES OF SYNDICATE AGENTS.—
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(1) SYNDICATE AGENT IS AGENT OF DIRECT
GUARANTORS.—
(A) IN
GENERAL.—The syndicate agent
under any cross-guarantee or stop-loss contract
shall act as an agent of the direct guarantors
under such contract.
(B) EXCEPTIONS.—Notwithstanding sub-
paragraph (A), the syndicate agent also shall
have—
(i) a duty to protect the confidential-
ity of any aspect of a guaranteed party’s
affairs which the contract specifies shall be
protected; and
(ii) duties to the Corporation as speci-
fied in this title.
(2) POWERS OF SYNDICATE AGENT.—No per-
son under a cross-guarantee or stop-loss contract
other than the syndicate agent shall have the follow-
ing powers:
(A) MONITOR
PERFORMANCE.—Monitor
the performance, or contract with a third party
to monitor the performance, of any party guar-
anteed under such contract.
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(B) COLLECT PREMIUMS.—Collect the pre-
miums due to the direct guarantors under such
contract.
(3) SYNDICATE AGENT REPORTS SUBMITTED TO
THE CENTRAL ELECTRONIC REPOSITORY.—The syn-
dicate agent under any cross-guarantee or stop-loss
contract shall submit in electronic form to the
central electronic repository by the fifteenth of each
calendar month a report—
(A) of the equity capital or the net worth,
as the case may be, of the guaranteed financial
group or nondepository guarantor under the
contract as of the end of the prior calendar
month; and
(B) of the projected annual premium due
each direct guarantor, as of the end of the prior
calendar month.
(4) CONFIRMATION
OF
GUARANTEE
OF
SPE-
CIFIC OBLIGATIONS.—
(A) IN
GENERAL.—The syndicate agent
under any cross-guarantee contract shall—
(i) determine, at the request of any
current or prospective creditor of a guar-
anteed company or guaranteed banking of-
fice under such contract, whether, assum-
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ing that the company or office has or will
have an obligation to the creditor, such ob-
ligation would be a guaranteed obligation
under the contract; and
(ii) promptly notify the current or
prospective creditor of the agent’s deter-
mination.
(B) DETERMINATION
BINDING
ON
SYN-
DICATE.—Any notification of determination
under subparagraph (A) shall be binding on the
cross-guarantee syndicate.
(C) FEE.—A syndicate agent may charge
a creditor a fee for making the determination
and notifying the creditor under subparagraph
(A).
(5) AGREEMENT
GOVERNING
THE
RELATION-
SHIP
BETWEEN
THE
SYNDICATE
AND
SYNDICATE
AGENT.—
(A) IN GENERAL.—Any agreement between
the direct guarantors and the syndicate agent
governing the relationship between such parties
must be included in the cross-guarantee or
stop-loss contract.
(B) LIMITS ON SIDE CONTRACTS.—No di-
rect guarantor or group of director guarantors
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under a cross-guarantee or stop-loss contract
may enter into any other contract or binding
agreement pertaining to the contract with the
syndicate agent under such cross-guarantee or
stop-loss contract.
(6) AUTHORIZATION OF INFORMATION SHARING
AMONG SYNDICATE AGENTS.—The Corporation may
prescribe regulations allowing syndicate agents to
share information if the Corporation finds that the
benefits of such information sharing outweigh the
anticompetitive risks of such sharing.
(b) EXEMPTION FROM SECURITIES LAWS.—
(1) IN GENERAL.—Notwithstanding Federal or
State law, interests in any cross-guarantee or stop-
loss syndicate are not securities for any purpose.
(2) ORGANIZING SYNDICATES.—Any person or
group of persons may organize and market the risk
of loss represented by the participation of any per-
son as a direct guarantor under any cross-guarantee
or stop-loss contract.
(c) TAXATION OF SYNDICATES.—
(1) TREATED
AS
PARTNERSHIP.—Any cross-
guarantee or stop-loss syndicate shall be treated as
a partnership for purposes of the Internal Revenue
Code of 1986.
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(2) CONSOLIDATED
RETURNS
BY
SYNDICATE
AGENT.—A syndicate agent may file an annual in-
formation return with respect to all syndicates for
which such agent is an agent, and all distributions
with respect to such syndicates, on a consolidated
basis.
(3) TAX
EXEMPT
STATUS.—Any syndicate
under any cross-guarantee or stop-loss contract any
income or gross receipts (including premiums), and
any activity of the syndicate shall be exempt from all
taxation imposed by any State, county, municipality,
or local taxing authority.
(d) REPLACEMENT OF SYNDICATE AGENTS.—
(1) IN GENERAL.—The cross-guarantee or stop-
loss syndicate under any cross-guarantee or stop-loss
contract may at any time and without cause replace
the syndicate agent under such contract, subject to
the guaranteed financial group or nondepository
guarantor’s approval of the new syndicate agent, by
amending the contract and obtaining the Corpora-
tion’s approval of the new syndicate agent under sec-
tion 123.
(2) NO EFFECT ON CONTRACT.—The replace-
ment of a syndicate agent by the direct guarantors
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in accordance with paragraph (1) shall not affect the
continuing existence or enforceability of the contract.
(3) WITHDRAWAL OF SYNDICATE AGENT.—
(A) IMMEDIATE SUBMISSION OF AMENDED
CONTRACT WITH NEW SYNDICATE AGENT.—If a
syndicate agent should resign or otherwise cease
providing required services under a cross-guar-
antee or stop-loss contract, whether wrongfully,
as allowed under such contract, or for any other
reason, the cross-guarantee or stop-loss syn-
dicate shall immediately submit an amendment
to the contract, with a successor syndicate
agent named in the amendment, to the Cor-
poration for approval.
(B) INTERIM
CGRC
APPOINTMENT.—The
Corporation may appoint a successor syndicate
agent to serve until a cross-guarantee or stop-
loss syndicate has complied with the require-
ments under subparagraph (A).
(e) CAUSE OF ACTION BY THE SYNDICATE AGAINST
THE SYNDICATE AGENT.—
(1) STANDARD
OF
LIABILITY.—Unless other-
wise agreed, a cross-guarantee or stop-loss syndicate
shall have a cause of action against the syndicate
agent for losses accrued by members of the syn-
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dicate under a cross-guarantee or stop-loss contract
only if the syndicate agent consciously disregarded
substantial and unjustifiable risks being taken by
the guaranteed party under the contract.
(2) CAUSE OF ACTION BELONGS TO THE SYN-
DICATE.—An action against a syndicate agent under
paragraph (1) may be brought solely by the syn-
dicate as a whole and no individual member of the
syndicate shall have a cause of action against the
syndicate agent.
(f) CAUSES OF ACTION AGAINST A SYNDICATE OR
SYNDICATE AGENT.—
(1) PROCEDURAL
RULES
GOVERNING
CAUSES
OF ACTION AGAINST A SYNDICATE.—
(A) IN
GENERAL.—A cross-guarantee or
stop-loss syndicate shall be sued as an entity in
any cause of action based on—
(i) the syndicate’s breach of a cross-
guarantee or stop-loss contract;
(ii) the syndicate’s vicarious liability
for the acts or omissions of the syndicate
agent under the contract; or
(iii) an action taken by a cross-guar-
antee or stop-loss syndicate after voting
approval under section 113(n).
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(B) SEVERAL LIABILITY.—In the case of
any cause of action under subparagraph (A),
the liability of any direct guarantor shall be
several and proportionate to such guarantor’s
interest in the cross-guarantee or stop-loss syn-
dicate.
(C) SERVICE OF PROCESS.—For purposes
of any action described under subparagraph
(A)—
(i) the syndicate agent shall be the
agent for all direct guarantors for service
of process for actions brought against the
syndicate; and
(ii) service of process upon a syn-
dicate agent shall serve as the exclusive
manner of service of process upon any di-
rect guarantor under the contract.
(2) LIMITS ON LIABILITY.—A cross-guarantee
syndicate, stop-loss syndicate, direct guarantor, or
syndicate agent shall not be liable under any Federal
or State law to any person on a claim which is based
on—
(A) any change or inaccuracy in the pre-
mium rate under a cross-guarantee or stop-loss
contract;
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(B) the inadequacy of a syndicate agent’s
monitoring of a guaranteed party; or
(C) the enforcement or nonenforcement of
any provision under a cross-guarantee or stop-
loss contract.
(3) LIABILITY
FOR
ACTS
OF
GUARANTEED
PARTY.—A cross-guarantee syndicate, stop-loss syn-
dicate, direct guarantor, or syndicate agent shall not
be liable for an alleged tortious conduct, breach of
contract, or violation of statutory obligation by an
guaranteed party under the contract.
(4) BAR ON PUNITIVE DAMAGES.—No punitive
damages shall be allowed in any action against a
cross-guarantee syndicate, stop-loss syndicate, direct
guarantor, or syndicate agent in the syndicate’s,
guarantor’s, or agent’s capacity as such under a
cross-guarantee or stop-loss contract.
(g) BAR ON CERTAIN CAUSES OF ACTION BY SYN-
DICATES AND SYNDICATE AGENTS.—A cross-guarantee
syndicate, stop-loss syndicate, or syndicate agent under a
cross-guarantee or stop-loss contract shall have no cause
of action against any accountant, attorney, auditor, ap-
praiser, or other person based on any such person’s activi-
ties relating to the guaranteed party under the contract
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unless the person knowingly and materially misled the
syndicate or syndicate agent.
(h) RELATIONSHIP AMONG SYNDICATE MEMBERS.—
(1) SYNDICATE
MEMBERS
NOT
AGENTS
FOR
EACH OTHER.—Subject to paragraph (2), no direct
guarantor in a cross-guarantee or stop-loss syndicate
shall be liable under agency law for the actions of
any other direct guarantor in the syndicate.
(2) SYNDICATE MAY VOTE TO APPOINT A MEM-
BER AS AGENT FOR THE SYNDICATE.—A cross-guar-
antee or stop-loss syndicate may, consistent with
section 113(n), vote to appoint one or more direct
guarantors under the contract as an agent for the
syndicate.
(i) REGISTRATION OF SYNDICATES.—
(1) IN GENERAL.—The Corporation shall pre-
scribe regulations providing for the registering of
cross-guarantee and stop-loss syndicates for the pur-
pose solely of allowing persons a reference by which
to identify individual syndicates.
(2) REGISTRATION UPON SUBMISSION OF THE
CONTROL
FOR
APPROVAL.—The regulations under
paragraph (1) shall provide for the automatic reg-
istration of a cross-guarantee or stop-loss syndicate
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upon submission for approval of a cross-guarantee
or stop-loss contract under section 123.
(3) DISTINGUISHING
AMONG
SYNDICATES.—
The regulations under paragraph (1) shall reference
a cross-guarantee or a stop-loss syndicate as a
unique syndicate with permanent identification.
SEC. 118. ASSUMPTION OF CONTROL OF A GUARANTEED
COMPANY 
BY 
A 
CROSS-GUARANTEE 
SYN-
DICATE.
(a) RIGHT OF CROSS-GUARANTEE SYNDICATE TO
ASSUME CONTROL.—A cross-guarantee syndicate under
any cross-guarantee contract shall have the right to as-
sume control of a guaranteed company under the contract
under the following circumstances:
(1) CANCELLATION.—Immediately after a can-
cellation of the contract by the syndicate or the
guaranteed financial group has become effective un-
less a successor cross-guarantee contract has taken
effect.
(2) EXPIRATION.—Immediately after the expi-
ration of the cross-guarantee contract unless a suc-
cessor cross-guarantee contract has taken effect.
(b) RIGHT OF GUARANTEED PARTY TO SEEK TO
STAY ASSUMPTION OF CONTROL.—
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(1) IN GENERAL.—A guaranteed company may
file an action requesting a stay of any assumption
of control by a cross-guarantee syndicate.
(2) TIME LIMIT FOR OBJECTING TO ASSUMP-
TION OF CONTROL.—
(A) IN GENERAL.—Any action under para-
graph (1) shall be filed either within thirty days
after the notice of cancellation under section
113(h)(1) is given or more than sixty days prior
to the expiration of the contract, whichever the
case may be.
(B) EXCEPTION IF SUCCESSOR CONTRACT
IS
OBTAINED.—Subparagraph (A) shall not
apply to a guaranteed company which has, sub-
sequent to the notice of cancellation or the date
sixty days prior to expiration, become guaran-
teed under a successor cross-guarantee con-
tract.
(3) EXPEDITED REVIEW.—The United States
district court with jurisdiction over the cross-guaran-
tee contract shall provide expedited review of any ac-
tion under paragraph (1).
(4) BASIS OF DETERMINATION.—In any action
under paragraph (1), the court shall stay the as-
sumption of control by a cross-guarantee syndicate
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only if the conditions for assuming control under
subsection (a) have not been met.
(c) RIGHTS OF CROSS-GUARANTEE SYNDICATE TO
ENJOIN VIOLATIONS OF THE CONTRACT UNTIL ASSUM-
ING CONTROL.—
(1) INJUNCTIVE REMEDIES.—Upon giving no-
tice of cancellation of the cross-guarantee contract
under section 113(h)(1) or the expiration of the con-
tract, the cross-guarantee syndicate shall be granted
injunctive relief to enforce any restrictions imposed
under the contract.
(2) APPOINTMENT OF A CONSERVATOR.—
(A) IN GENERAL.—Upon giving notice of
cancellation of the cross-guarantee contract
under section 113(h)(1) or the expiration of the
contract, the cross-guarantee syndicate may
seek the appointment of a conservator to serve
until the syndicate can assume control under
subsection (a) and a court may appoint such a
conservator, but the court may appoint a con-
servator only if the remedies under paragraph
(1) are not adequate to protect the interests of
the cross-guarantee syndicate.
(B) COURT SHALL APPOINT A CONSERVA-
TOR FROM A LIST SUBMITTED BY CGRC.—The
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court shall appoint a conservator under sub-
paragraph (A) only from a list supplied by the
Corporation to the court of five disinterested
persons who are qualified and willing to serve
as the conservator in the case, and no such per-
son may be a regulatory agency or an employee
of the regulatory agency.
(C) GUARANTEED
COMPANY
CAN
STILL
OBTAIN A SUCCESSOR CONTRACT.—
(i) IN GENERAL.—The appointment of
a conservator under this paragraph shall
not prevent a guaranteed company from
obtaining a successor cross-guarantee con-
tract.
(ii) DISCHARGE OF CONSERVATOR.—
If a guaranteed company obtains a succes-
sor cross-guarantee contract, the conserva-
tor appointed under this contract shall be
discharged when the successor contract has
become effective according to the successor
contract’s terms.
(3) EXPEDITED
RELIEF.—The United States
district court with jurisdiction over the cross-guaran-
tee contract shall provide the relief under para-
graphs (1) and (2) on an expedited basis.
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(d) POWERS AND DUTIES OF A CROSS-GUARANTEE
SYNDICATE AFTER ASSUMPTION OF CONTROL.—
(1) GENERAL POWERS.—
(A) OPERATE
THE
COMPANY.—A cross-
guarantee syndicate which assumes control of a
guaranteed company under subsection (a) shall
have and may exercise all the powers of the
members or shareholders, the directors, and the
officers of the company and shall be entitled
to—
(i) conduct all business of the guaran-
teed company;
(ii) take over the books, records, and
assets of the guaranteed company;
(iii) collect all obligations and money
due the company;
(iv) perform in the name of the com-
pany all functions of the company consist-
ent with the appointment of the syndicate
as the successor to the managers and di-
rectors of the company and the duties of
the syndicate with respect to the company;
and
(v) preserve and conserve the assets
and property of such company.
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(B) 
DISPOSITION
OF
COMPANY.—The
cross-guarantee syndicate which assumes con-
trol of a guaranteed company under subsection
(a) may—
(i) merge the guaranteed company
with another guaranteed company;
(ii) sell or otherwise dispose of the
company; or
(iii) place the company in liquidation
and proceed to realize upon the assets of
the company.
(2) DUTIES.—
(A) PAYMENT OF OBLIGATIONS.—
(i) IN GENERAL.—If a cross-guaran-
tee syndicate assumes control of a guaran-
teed company, the guaranteed company re-
mains liable for all of the company’s obli-
gations without regard to such assumption
of control.
(ii) ASSUMPTION OF CONTROL DOES
NOT
MAKE
SYNDICATE
LIABLE
FOR
UNGUARANTEED
OBLIGATIONS.—Nothing
in this subparagraph shall be construed to
the effect that the act of assuming control
of a guaranteed company makes members
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of the cross-guarantee syndicate liable for
the obligations of the guaranteed company
which are not guaranteed obligations.
(B) DISTRIBUTION
OF
ASSETS.—In any
case in which funds remain from the liquida-
tion, sale, or other disposition of the assets of
any guaranteed company after all depositors,
creditors, other claimants, and administrative
expenses of the syndicate have been paid or oth-
erwise resolved, the syndicate shall promptly
distribute such funds to the company’s share-
holders or members, as the case may be.
(C) FIDUCIARY DUTY.—A cross-guarantee
syndicate which assumes control of a guaran-
teed company in accordance with subsection (a)
shall succeed to the same fiduciary responsibil-
ity as the directors of such company had under
applicable law.
(D) NOTICE TO CGRC.—If a cross-guaran-
tee syndicate assumes control of a guaranteed
company under subsection (a), the syndicate
shall on the same day notify the Corporation
that it has assumed control.
(3) SPECIAL FDIC POWERS DO NOT APPLY.—
The rights and obligations of a guaranteed company
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that a cross-guarantee syndicate has assumed con-
trol of under this section shall not be limited by any
statutory law or common law which grants, or may
be construed as granting, special rights to the Fed-
eral Deposit Insurance Corporation to repudiate con-
tracts of an insured depository institution for which
the Federal Deposit Insurance Corporation has been
appointed a conservator or receiver.
(e) NO AUTHORITY
FOR CGRC, ANY FEDERAL
BANKING AGENCY, OR STATE BANK SUPERVISOR
TO
STAY ASSUMPTION OF CONTROL.—Neither the Corpora-
tion nor any Federal banking agency, State bank super-
visor, or any other Federal or State agency may take any
action to prevent the assumption of control of a guaran-
teed company under subsection (a).
(f) ASSUMPTION OF CONTROL NOT AN EVENT OF
DEFAULT OR GROUNDS FOR ACCELERATION OF OBLIGA-
TIONS.—The assumption of control of a guaranteed com-
pany under subsection (a) shall not be an event of default
by the guaranteed company or grounds for acceleration
of any guaranteed obligation under any agreement to
which the guaranteed company is a party.
(g) SECOND-TIER GUARANTORS CANNOT DISPUTE
LOSSES.—A direct guarantor of any direct guarantor
which is a member of a cross-guarantee syndicate which
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assumes control of a guaranteed party under subsection
(a) may not bring a cause of action against the cross-guar-
antee syndicate based on damage arising out of the syn-
dicate’s decision to assume control or failure to minimize
losses under the cross-guarantee contract.
SEC. 119. JUDICIAL REVIEW OF CONTRACTS AND RELATED
ACTIONS.
(a) JURISDICTION OF FEDERAL COURTS.—
(1) IN
GENERAL.—For purposes of section
1331 of title 28, United States Code, any action
arising under any cross-guarantee or stop-loss con-
tract shall be deemed to arise under Federal law.
(2) REMOVAL.—Any action arising under any
cross-guarantee or stop-loss contract which is
brought in a State court may be removed by the de-
fendant or the defendants to a district court of the
United States.
(3) DESIGNATION OF COURT IN CONTRACT.—
Each cross-guarantee and stop-loss contract shall
designate the district court of the United States
which shall have original jurisdiction over any action
described under section 117(f)(A)(i).
(b) THIRD-PARTY BENEFICIARY ACTIONS.—
(1) RESTRICTIONS
ON
THIRD-PARTY
BENE-
FICIARY ACTIONS.—Notwithstanding any State law,
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no creditor of any guaranteed party under any cross-
guarantee contract may bring an action against the
cross-guarantee syndicate under such contract for
failure to perform any cross-guarantee obligation
under the contract without first having obtained a
judgment against the guaranteed party for failure to
perform such obligation, unless the direct guarantors
have assumed control of the guaranteed party under
section 118(a).
(2) INTERVENTION BY SYNDICATE.—
(A) IN
GENERAL.—A cross-guarantee or
stop-loss syndicate under any cross-guarantee
or stop-loss contract may intervene in any ac-
tion brought by one or more creditors against
a guaranteed party under the contract if any
judgment against the guaranteed party in such
action could affect the potential liabilities of the
direct guarantors under the contract.
(B) RIGHT
OF
INTERVENTION
BELONGS
TO THE SYNDICATE AS A WHOLE.—Any inter-
vention under subparagraph (A) shall be exer-
cised by a cross-guarantee or stop-loss syn-
dicate as a whole and no individual member of
a cross-guarantee or stop-loss syndicate shall
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have a right to intervene in any action de-
scribed in subparagraph (A).
(c) APPLICABLE STATE LAW.—
(1) STATE
CONTRACT
LAW
AS
INTERSTITIAL
LAW.—Unless otherwise indicated in this title, appli-
cable State law shall apply under this title to any
cross-guarantee or stop-loss contract.
(2) PARTIES’ CHOICE OF STATE LAW.—Each
cross-guarantee and stop-loss contract shall des-
ignate the State law that shall be applicable under
paragraph (1).
Subtitle C—Powers and Duties of the CGRC
CHAPTER 1—CROSS-GUARANTEE PROCESS
SEC. 121. THE CROSS-GUARANTEE REGULATION CORPORA-
TION.
(a) CREATION.—
(1) IN GENERAL.—There is hereby established
as a body corporate the ‘‘Cross Guarantee Regula-
tion Corporation’’ which shall have succession until
dissolved by Act of Congress.
(2) CORPORATION NOT AN AGENCY.—The Cor-
poration shall not be an agency or establishment of
the United States Government.
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(3) HEADQUARTERED IN THE DISTRICT OF CO-
LUMBIA.—The Corporation shall maintain its prin-
cipal office in the District of Columbia.
(b) POWERS.—In addition to any powers granted to
the Corporation elsewhere in this title, the Corporation
shall have, consistent with this title, the power—
(1) to sue and be sued, complain and defend, in
its corporate name and through its own counsel, in
any State, Federal, or other court;
(2) to adopt, alter, and use a corporate seal,
which shall be judicially noticed;
(3) to adopt, amend, and repeal, by its board
of directors, such bylaws as may be necessary or ap-
propriate to carry out the purposes of this title, in-
cluding bylaws relating to—
(A) the conduct of its business; and
(B) the indemnity of its directors, officers,
and employees for liabilities and expenses actu-
ally and reasonably incurred by any such person
in connection with the defense or settlement of
an action or suit if such person acted in good
faith and in a manner reasonably believed to be
consistent with the purposes of this chapter.
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(4) to adopt, amend, and repeal, by its board
of directors, such rules as authorized under sub-
section (e)(2) of this section;
(5) to conduct business (including the carrying
on and maintenance of offices) and to exercise all
other rights and powers granted to it by this chapter
in any State or other jurisdiction without regard to
any qualification, licensing, or other statute in such
State or other jurisdiction;
(6) to lease, purchase, accept gifts or donations
of or otherwise acquire, to own, hold, improve, use,
or otherwise deal in or with, and to sell, convey,
mortgage, pledge, lease, exchange or otherwise dis-
pose of, any property, real, personal or mixed, or
any interest therein, wherever situated;
(7) subject to subsection (c), to hire such offi-
cers, attorneys, employees, and agents as may be re-
quired, to determine their qualifications, to define
their duties, to fix their salaries, require bonds for
them and fix the penalty thereof; and
(8) to enter into contracts, to execute instru-
ments, to incur liabilities, and to do any and all
other acts and things as may be necessary or inci-
dental to the conduct of its business and the exercise
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of all other rights and powers granted to the Cor-
poration under this title.
(c) BOARD OF DIRECTORS.—
(1) FUNCTIONS.—The Corporation shall have a
board of directors which, subject to the provisions of
this title, shall determine the policies which shall
govern the operations of the Corporation.
(2) NUMBER AND APPOINTMENT.—The board
of directors shall consist of seven persons as follows:
(A) One director shall be appointed by the
Secretary of the Treasury from among the offi-
cers of the Department of Treasury and shall
be removable by the Secretary without cause at
any time.
(B) Six directors shall be appointed by the
President, by and with the advice and consent
of the Senate, as follows—
(i) three such directors shall be se-
lected from among senior officers of com-
panies that are or are likely to be guaran-
teed depository institutions: Provided, That
the directors are not from the same geo-
graphical area and represent different as-
pects of the industry;
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(ii) one such director shall be selected
from among senior officers of companies
that are likely to be syndicate agents; and
(iii) two such directors shall be se-
lected from the general public from among
persons who are not either regulatory offi-
cials nor associated with a guaranteed de-
pository institution, syndicate agent, or
nondepository guarantor and have not been
such an official or had any such associa-
tion for the five years preceding appoint-
ment.
(3) CHAIRMAN
AND
VICE
CHAIRMAN.—The
President shall designate a chairman and vice chair-
man from among those directors appointed under
paragraph (2)(B)(iii) of this subsection.
(4) TERMS.—
(A) FOUR-YEAR TERMS.—Except as pro-
vided under subparagraphs (B) and (C), each
director shall be appointed for a term of four
years.
(B) TRANSITION RULES.—
(i) STAGGERED TERMS.—Of the direc-
tors first appointed under paragraph
(2)(B)—
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(I) one shall hold office for a
term expiring on December 31 of the
first full calendar year after passage
of this Act;
(II) two shall hold office for a
term expiring on December 31 of the
second full calendar year after pas-
sage of this Act;
(III) one shall hold office for a
term expiring on December 31 of the
third full calendar year after passage
of this Act; and
(IV) two shall hold office for a
term expiring on December 31 of the
fourth full calendar year after passage
of this Act.
(ii) TIMING
OF
PARTICULAR
DIREC-
TOR’S TERM.—
(I) 
INDUSTRY
APPOINTEES’
TERMS
WILL
END
IN
DIFFERENT
YEARS.—One of the directors ap-
pointed under each of the clauses
(i)(I), (II), (III), (IV) shall consist of
the four directors appointed under
paragraphs (2)(B) (i) and (ii).
100
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(II) 
APPOINTEES
FROM
THE
GENERAL PUBLIC.—One director ap-
pointed under both clause (i) (II) and
(IV) shall consist of one of the two di-
rectors appointed under paragraph
(2)(B)(iii).
(iii) TREASURY
DIRECTOR
MUST
BE
APPOINTED
SOON
AFTER
ENACTMENT.—
The Secretary of the Treasury shall ap-
point the director designated under para-
graph (2)(A) within thirty days after en-
actment of this Act.
(C) VACANCIES.—
(i) APPOINTMENT
IN
SAME
MAN-
NER.—A vacancy on the board of directors
shall be filled in the same manner as the
original appointment was made.
(ii) APPOINTMENT ONLY FOR THE RE-
MAINDER OF THE TERM.—Any director ap-
pointed under clause (i) shall be appointed
only for the remainder of the term of his
predecessor.
(D) REMAINING A DIRECTOR UNTIL A SUC-
CESSOR HAS TAKEN OFFICE.—A director may
101
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serve after the expiration of his term until his
successor has taken office.
(5) COMPENSATION.—
(A) CHAIRMAN AND VICE CHAIRMAN.—The
compensation of the chairman and vice chair-
man shall be as provided in the bylaws of the
Corporation.
(B) OTHER
DIRECTORS.—The remaining
five directors shall serve without compensation
except that they are entitled to receive reim-
bursement for expenses incurred in connection
with official business of the Corporation.
(6) OFFICERS AND EMPLOYEES AS MEMBERS
OF THE BOARD OF DIRECTORS.—No officer, attor-
ney, employee, or agent of the Corporation shall be
a member of the board of directors.
(7) BOARD OF DIRECTORS TO DETERMINE OF-
FICERS.—The officers of the Corporation shall be
employed at the will of the board of directors.
(8) DEFINITION OF OFFICER.—For purposes of
this subsection, the term ‘‘officer’’ includes any chief
executive officer, president, senior executive, or other
official with managerial or executive authority within
the Corporation.
(d) MEETINGS OF THE BOARD OF DIRECTORS.—
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(1) TIMING OF MEETINGS.—The board of direc-
tors shall meet at the call of its Chairman, or as
otherwise provided by the bylaws of the Corporation,
except that the director appointed under subsection
(c)(2)(A) may call a meeting until at least three
other directors have taken office.
(2) QUORUM TRANSITION RULE.—The bylaws
shall determine how many members constitute a
quorum when the board of directors meet, except
that the director appointed under subsection
(c)(2)(A) shall alone constitute a quorum until at
least three other directors have taken office.
(e) BYLAWS AND RULEMAKING.—
(1) BYLAWS.—
(A) PROCEDURE.—The board of directors
shall file with the Secretary of the Treasury a
copy of the proposed initial bylaws of the Cor-
poration and any proposed bylaw changes ac-
companied by a concise general statement of
the basis and purpose for such changes.
(B) CHANGES BECOME EFFECTIVE UNLESS
THE TREASURY DEPARTMENT OBJECTS.—Any
bylaws submissions under subparagraph (A)
shall become effective thirty days after the fil-
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ing of such changes with the Secretary of the
Treasury, unless—
(i) the Secretary of the Treasury, by
notice to the Corporation setting forth the
reasons therefor, disapproves of such pro-
posed bylaw changes as being contrary to
the purposes of this title; or
(ii) the Secretary of Treasury decides,
at its own discretion, that public comment
shall be obtained, in which case it may,
after notifying the Corporation in writing
of such finding, require that the proce-
dures set forth in paragraph (2) be fol-
lowed with respect to such a bylaw change.
(2) RULEMAKING.—
(A) RULEMAKING AUTHORITY.—The Cor-
poration shall have the power to issue a rule
only if—
(i) the power to issue the rule is ex-
plicitly provided for in this title; or
(ii) the Corporation demonstrates
that)
(I) the rule implements statutory
language in this title; and
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(II) improves the efficiency of the
cross-guarantee system.
(B) SUBSTANTIVE
BASIS
FOR
RULES.—
Any proposed rule or proposed rule change shall
be approved only if there is substantial evidence
supporting the findings on which the proposed
rule is based.
(C) RULEMAKING PROCEDURES.—
(i) IN
GENERAL.—The Corporation
shall use the informal rulemaking proce-
dures under the Administrative Procedures
Act (5 U.S.C. 553) in prescribing rules
under this paragraph.
(ii) RIGHT TO A HEARING.—In addi-
tion to the procedures under clause (i), any
person may during the comment period re-
quest a hearing and such hearing, if re-
quested, shall take place within thirty days
after the end of the comment period.
(iii) SUBMITTING
RULES
TO
TREAS-
URY.—After having completed the proce-
dures under clauses (i) and (ii), the Cor-
poration shall file with the Secretary of the
Treasury a copy of the proposed rules.
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(iv) TREASURY
AUTHORITY
TO
RE-
JECT RULES.—Any proposed rules or rule
changes submitted under clause (iii) shall
become effective thirty days after the filing
of such proposed rules or rule changes with
the Secretary of the Treasury, unless the
Secretary of the Treasury, by notice to the
Corporation setting forth the reasons
therefor, disapproves of such proposed
rules or rule changes as being contrary to
the purposes of this title.
(D) JUDICIAL REVIEW.—
(i) Standing.—Any person suffering a
legal wrong, or adversely affected or ag-
grieved within the meaning of this title, by
the rules issued under this paragraph is
entitled to judicial review thereof.
(ii) 
JURISDICTION.—The 
United
States Court of Appeals for the District of
Columbia shall have exclusive original ju-
risdiction over any action under clause (i).
(iii) FINALITY.—A rule must be final
to be reviewable under this subparagraph.
(E) INITIAL DEADLINE.—For any rule cov-
ered by subparagraph (A)(i), the Corporation
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shall issue a final rule within one year after
passage of this Act.
(f) FUNDING.—
(1) INITIAL BORROWING.—
(A) BIF FINANCING.—The Corporation
shall have the power to borrow up to
$20,000,000 from the Bank Insurance Fund.
(B) USE OF SUCH FINANCING.—The Cor-
poration shall use any amount borrowed under
subparagraph (A) to establish the central elec-
tronic repository, pay initial salaries and other
operating expenses, buy equipment, develop
computer software, and otherwise begin oper-
ations.
(C) REPAYMENT.—The Corporation shall
repay any borrowing under subparagraph (A)
within five years after the cross-guarantee acti-
vation date from income obtained under para-
graph (2).
(D) INTEREST ON LOAN.—
(i) TIMING OF PAYMENTS.—No prin-
cipal or interest payments on the loan de-
scribed in subparagraph (A) shall be due
prior to one year after the cross-guarantee
activation date.
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(ii) INTEREST
RATE.—The interest
rate on the borrowing under this para-
graph shall be equal to .25 percent plus
the average annual percentage yield on
three-month bills issued by the Secretary
of the Treasury under section 3104(a) of
title 31, United States Code.
(2) FINANCING FROM OPERATIONS.—
(A) SELF-SUPPORTING.—The Corporation
shall repay the loan under paragraph (1) and
pay for its ongoing operating expenses by as-
sessing fees as authorized under subparagraph
(B) and collecting penalties as authorized under
this title and shall not, subject to paragraph
(1), receive any financing or operating subsidies
from the United States Treasury.
(B) FEES.—The Corporation may assess a
reasonable fee upon any party which—
(i) submits a cross-guarantee, stop-
loss, or group cross-guarantee contract, or
amendment thereto, for approval;
(ii) requests use of any service pro-
vided by the central electronic repository;
or
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(iii) requests a certification under sec-
tion 124(b).
(g) MISCELLANEOUS PROVISIONS.—
(1) INSPECTION OF REPORTS.—
(A) IN GENERAL.—Any notice, report, or
other document filed with the Corporation pur-
suant to this title, other than financial state-
ments filed by nondepository guarantors pursu-
ant to section 117(a)(3)(A), shall be available
for public inspection unless the Corporation or
the Secretary of Treasury determines that dis-
closure thereof is not in the public interest.
(B) CONGRESSIONAL
ACCESS.—Nothing
under subparagraph (A) shall act to deny docu-
ments or information to the Congress of the
United States or to the committees of either
House having jurisdiction over depository insti-
tutions and related matters under the rules of
each body.
(C) TREASURY ACCESS TO THE CORPORA-
TION’S
DOCUMENTS.—The Corporation shall
provide the Secretary of the Treasury with any
document or information which the Secretary in
his or her discretion requests.
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(2) SUITS AGAINST THE CORPORATION AND ITS
OFFICERS.—
(A) WAIVER OF SOVEREIGN IMMUNITY.—
The Corporation waives sovereign immunity to
the same extent provided for under the Admin-
istrative Procedures Act (5 U.S.C. 702).
(B) SUITS
FOR
MONEY
DAMAGES.—Nei-
ther the Corporation nor any of the Corpora-
tion’s directors, officers, attorneys, agents, or
employees shall have any liability to any person
for any action taken or not taken under or in
connection with any matter contemplated by
this title, if the act was taken or not taken in
good faith or there were reasonable grounds for
taking or not taking the action.
(3) EXEMPTION
FROM
TAXATION.—The Cor-
poration, its property, its franchise, capital, reserves,
surplus, and its income, shall be exempt from all
taxation now or hereafter imposed by the United
States or by any State or local taxing authority, ex-
cept that any real property or tangible personal
property (other than cash and securities) of the Cor-
poration shall be subject to State and local taxation
to the same extent according to its value as other
real and tangible personal property is taxed.
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(4) FISCAL YEAR.—The fiscal year of the Cor-
poration shall be the calendar year.
SEC. 122. REGULATION OF THE CROSS-GUARANTEE PROC-
ESS.
(a) CROSS-GUARANTEE REGULATION CORPORATION
ENFORCEMENT AUTHORITY.—
(1) IN GENERAL.—Subject to section 126, the
Corporation shall have exclusive authority to enforce
compliance with provisions of this title.
(2) ENFORCEMENT.—The Corporation shall
have the powers provided in subsections (b), (c), (d),
(h), (l), and (n) of section 8 of the Federal Deposit
Insurance Act and paragraph (1) and each subpara-
graph, other than subparagraphs (B) and (C), of
paragraph (2) of subsection (i) of such section in en-
forcing this title with respect to any syndicate agent
and to any direct guarantor, but only with respect
to any violation of any requirements under this title.
(b) LIMITATION ON STATE JURISDICTION.—
(1) IN GENERAL.—Notwithstanding any provi-
sion of State law, no State may exercise authority
over any party to any cross-guarantee or stop-loss
contract with respect to—
(A) whether such party may be a party to
a cross-guarantee or stop-loss contract; and
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(B) the rights, duties, privileges, or obliga-
tions of such party under the contract or pursu-
ant to this title.
(2) RULE OF CONSTRUCTION.—Paragraph (1)
shall not be construed as affecting the authority of
any State to determine the powers and regulate the
activities of State depository institutions.
SEC. 123. APPROVAL PROCESS FOR CROSS-GUARANTEE,
STOP-LOSS, AND GROUP CROSS-GUARANTEE
CONTRACTS.
(a) EXPEDITED APPROVAL OF CONTRACTS AND CON-
TRACT AMENDMENTS.—
(1) NOTICE
AND
REVIEW
AND
REQUIRE-
MENT.—Except as provided in paragraph (3), no
cross-guarantee, stop-loss, or group cross-guarantee
contract, and no amendment to any such contract,
shall be deemed approved unless—
(A) the Corporation has been given fifteen
business days to review the contract or amend-
ment; and
(B) before the end of the fifteen-day period
described in subparagraph (A), the Corporation
has not issued an order—
(i) 
disapproving 
the 
contract 
or
amendment; or
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(ii) extending the period within which
the Corporation may disapprove the con-
tract or amendment in accordance with
paragraph (6).
(2) SUBMISSION OF CONTRACT OR AMENDMENT
IN ELECTRONIC FORM.—The Corporation shall pre-
scribe regulations requiring that any cross-guaran-
tee, stop-loss, or group cross-guarantee contract, and
any amendment to such contract, being submitted
for review under this subsection shall be submitted
in electronic form to the central electronic reposi-
tory.
(3) NOTICE OF APPROVAL BEFORE END OF DIS-
APPROVAL PERIOD.—A cross-guarantee, stop-loss, or
group cross-guarantee contract, and any amendment
to any such contract, shall be deemed approved be-
fore the expiration of the period described in para-
graph (1)(A) (or extended in accordance with para-
graph (6)) for disapproving such contract if the Cor-
poration notifies the parties that the Corporation
does not intend to disapprove the contract.
(4) SUBMISSION
OF
INFORMATION
AND
CER-
TIFICATIONS.—
(A) IN
GENERAL.—The syndicate agent
under any proposed cross-guarantee, stop-loss,
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or group cross-guarantee contract, or any
amendment to any such contract, submitted to
the Corporation for review under paragraph
(1), shall also submit to the Corporation with
such proposed contract such information and
attestations or certifications as the Corporation
may require by regulation.
(B) LIMITATION ON SCOPE OF INFORMA-
TION
REQUIRED.—The regulations prescribed
by the Corporation under subparagraph (A)
may not require the submission of any informa-
tion other than information directly necessary
for the Corporation to determine whether any
proposed cross-guarantee, stop-loss, or group
cross-guarantee contract, or amendment there-
to, submitted to the Corporation for approval is
in compliance with the requirements of this
title.
(5) ADDITIONAL INFORMATION.—
(A) IN GENERAL.—The Corporation may,
by specific request in connection with a particu-
lar proposed cross-guarantee, stop-loss, or
group cross-guarantee contract, or amendment
to any contract, submitted to the Corporation,
require, on one occasion only, that additional
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which the Corporation receives such information)
within which to disapprove the proposed contract.
(7) REVOCATION OF APPROVAL.—The Corpora-
tion may revoke its approval of a contract under this
subsection if a court has enjoined the operation of
the contract under subsection (e)(2)(B).
(b) LIMITED GROUNDS FOR DISAPPROVAL OF PRO-
POSED CONTRACT
OR AMENDMENT.—The Corporation
may disapprove any proposed cross-guarantee, stop-loss or
group cross-guarantee contract, or any amendment to any
such contract, if and only if—
(1) the contract, including any party under the
contract, fails to meet the requirements of this title;
or
(2) the information submitted under subsection
(a) was insufficient to determine whether the con-
tract and the parties to the contract are in compli-
ance with this title.
(c) NOTICE OF DISAPPROVAL.—
(1) IN
GENERAL.—If the Corporation dis-
approves any cross-guarantee, stop-loss, or group
cross-guarantee contract, or any amendment thereto,
the Corporation shall immediately notify the parties
to such contract of the disapproval.
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(2) 
STATEMENT
OF
REASON
FOR
DIS-
APPROVAL.—The notice under paragraph (1) shall
contain a detailed explanation of the specific reasons
for the disapproval under this section.
(d) CONDITIONAL APPROVALS.—
(1) IN GENERAL.—The Corporation shall pre-
scribe regulations which would allow a cross-guaran-
tee, stop-loss, or group cross-guarantee contract to
be conditionally approved, in a manner otherwise in
accordance with this section, if, at the time such
conditional approval is granted, all the information
required by the Corporation to make a final deter-
mination of whether the contract meets the require-
ments of this title cannot be known or ascertained.
(2) RECONFIRMATION.—The regulations pre-
scribed under paragraph (1) shall allow the Corpora-
tion, upon receipt of all the information the Cor-
poration needs to determine whether the contract
meets the requirements of this title, three business
days to give the contract a final approval.
(3) REPLACEMENT OF GUARANTORS.—The reg-
ulations prescribed under paragraph (1) shall allow,
without restriction, the replacement of a direct guar-
antor with another direct guarantor during the pe-
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riod between the date of conditional approval and
final approval.
(e) JUDICIAL REVIEW.—
(1) CONTRACTS DISAPPROVED.—
(A) IN GENERAL.—Any party to a contract
disapproved under this section may seek judicial
review of the disapproval of a contract under
this section.
(B) LIMITATION
ON
STANDING.—Only a
party to a contract disapproved under this sec-
tion may bring an action under this paragraph.
(2) CONTRACTS APPROVED.—
(A) IN GENERAL.—Any guaranteed party
may seek judicial review of the approval of a
contract under this section.
(B) INJUNCTIVE
RELIEF
IF
THE
CON-
TRACT
HAS
NOT
YET
TAKEN
EFFECT.—If a
guaranteed party brings an action under sub-
paragraph (A) and the contract approved under
this section has not yet become effective accord-
ing to the contract’s terms, a court may enjoin
the operation of the contract if it violates any
requirement under this title.
(C) LIMITATION ON REVIEW IF THE CON-
TRACT HAS BECOME EFFECTIVE.—
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(i) IN GENERAL.—A cross-guarantee
or stop-loss contract may be reviewed only
with respect to whether the contract vio-
lates section 116(a) or section 125.
(ii) REMEDIES.—
(I) IN
GENERAL.—Any court
which holds that a cross-guarantee or
stop-loss 
contract 
violates 
section
116(a) or section 125 shall order the
Corporation to use the remedies avail-
able under section 125 to eliminate
the violation.
(II) 
INJUNCTIONS
DIS-
ALLOWED.—No court may enjoin the
operation of a cross-guarantee or
stop-loss contract.
(3) JURISDICTION.—No court other than a dis-
trict court of the United States shall have original
jurisdiction of any action under this subsection.
(f) REGULATIONS TO AVOID FRAUDULENT SIGNATO-
RIES TO CONTRACTS.—
(1) IN GENERAL.—The Corporation shall issue
regulations which will provide a means, within the
time frame of subsection (a), by which, prior to ap-
proval of a cross-guarantee, stop-loss, or group
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cross-guarantee contract, the Corporation can ensure
that every party listed as a party to the contract
agreed to become a party to the contract.
(2) AVOIDING
DUPLICATION.—In issuing the
regulations under paragraph (1), the Corporation
may rely on mechanisms established by the parties
to cross-guarantee, stop-loss, or group cross-guaran-
tee contracts to ensure that all signatories to the
contract agreed to the contract’s terms and shall,
whenever possible, avoid duplicating such efforts.
(g) ACCELERATED REVIEW FOR SECONDARY TRANS-
FERS OF SYNDICATE INTERESTS.—In the case of a con-
tract amendment which consists solely of a transfer of in-
terest under section 113(m), the provisions of this section
shall apply except—
(1) the applicable period for approval under
subsection (a)(1) shall be three business days in-
stead of fifteen business days;
(2) the Corporation may not extend the dis-
approval period as provided for under subsection
(a)(6); and
(3) the Corporation may disapprove the con-
tract amendment under subsection (b) only if the
amended contract would violate section 113(m), sec-
tion 116, or section 125.
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SEC. 124. CENTRAL ELECTRONIC REPOSITORY.
(a) ESTABLISHMENT.—
(1) CGRC ESTABLISHES CENTRAL ELECTRONIC
REPOSITORY.—Before the end of the six-month pe-
riod beginning on the date of the enactment of this
Act, the Corporation shall establish and maintain a
central electronic repository for cross-guarantee,
stop-loss, and group cross-guarantee contracts.
(2) MAINTENANCE
OF
ALL
PAST, CURRENT,
DISAPPROVED, AND
PROPOSED
CONTRACTS.—The
central electronic repository shall maintain files, in
electronic form, of all cross-guarantee, stop-loss, and
group cross-guarantee contracts, including expired,
cancelled, and disapproved contracts, all amend-
ments to any such contract, and all proposed con-
tracts and contract amendments which have been
filed with the Corporation, but not yet acted upon.
(3) DIRECT
ACCESS
FOR
ALL
GUARANTORS,
GUARANTEED PARTIES, AND SYNDICATE AGENTS.—
The files in the central electronic repository estab-
lished under this section shall be directly and imme-
diately accessible by electronic means to any direct
guarantor, guaranteed party, and syndicate agent,
and any other person who qualifies for access under
procedures established by the Corporation.
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(4) CENTRAL
ELECTRONIC
REPOSITORY
VER-
SION OF THE CONTRACT AS A COMPLETELY INTE-
GRATED AGREEMENT.—
(A) LEGAL
EVIDENCE
OF
THE
CON-
TRACT.—The provisions of any cross-guarantee,
stop-loss, or group cross-guarantee contract, in-
cluding any amendment to any such contract,
on file in the central electronic repository shall
be—
(i) irrebuttable evidence of the con-
tract; and
(ii) superior evidence to all other
forms or versions of the contract.
(B) 
PROHIBITION
ON
ADDITIONAL
TERMS.—The contract on file in the central
electronic repository shall be a complete and ex-
clusive statement of the terms of any cross-
guarantee, stop-loss, or group cross-guarantee
contract and no evidence of additional terms is
admissible to supplement the contract on file in
the repository.
(b) AVAILABILITY OF CERTIFIED COPIES.—
(1) IN GENERAL.—The central electronic repos-
itory shall provide upon request a copy of any con-
tract maintained under subsection (a)(2) to any per-
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son, any government officer, agency, or department,
or any court.
(2) CERTIFICATION OF COPIES.—
(A) IN GENERAL.—Each copy of a cross-
guarantee or stop-loss contract provided in ac-
cordance with paragraph (1) shall contain a
certification by the central electronic repository
that such copy is true and correct.
(B) PRIMA FACIE EVIDENCE.—A copy of a
cross-guarantee or stop-loss contract which is
certified in accordance with subparagraph (A)
shall establish prima facie the contract.
(c) MAINTENANCE OF DATA BASE OF ACTIVE GUAR-
ANTORS.—The central electronic repository shall maintain
in electronic form a data base containing the names of
the direct guarantors under each cross-guarantee or stop-
loss contract which has not expired or been canceled and
such other information with regard to such contracts that
will enable any person to determine whether or not any
such contract, proposed contract, or proposed amendment
to any contract, is in compliance with this title and regula-
tions prescribed under this title.
(d) STANDARD CONTRACT LANGUAGE.—The Cor-
poration is authorized to maintain in the central electronic
repository and update as needed standard language for
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various provisions of cross-guarantee, stop-loss, and group
cross-guarantee contracts that parties to these contracts
may, at their sole discretion, incorporate by reference in
contracts and contract amendments they submit to the
Corporation for approval.
(e) REGISTRY OF INDIVIDUALS WITH A QUESTION-
ABLE RECORD.—The Corporation is authorized to main-
tain in the central electronic repository a list of individuals
who have been indicted or convicted of a crime related to
a financial institution or had a judgment entered against
them in a civil case related to financial institutions.
SEC. 125. RESTRICTION ON CLOSED LOOPS.
(a) PROHIBITION OF MORE THAN ONE UNRELATED
CLOSED LOOP.—At no time shall two or more closed loops
exist unless at least one cross-guarantee or stop-loss con-
tract is a contract in each closed loop that exists in the
system.
(b) CGRC CALL-BACK.—If, at any time, the require-
ments of subsection (a) are violated—
(1) the Corporation shall immediately notify
each guaranteed party under each cross-guarantee
and stop-loss contract which is part of the closed
loop which has the fewest number of contracts that
it must obtain a successor cross-guarantee or stop-
loss contract; and
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(2) each guaranteed party under paragraph (1)
shall have ten business days upon notification to
submit a successor contract to the Corporation for
approval.
(c) CGRC FILING OF A BANKRUPTCY PETITION.—
(1) FILING OF A BANKRUPTCY PETITION BY
THE CGRC.—
(A) APPOINTMENT
OF
CGRC
AS
RE-
CEIVER.—The Corporation shall appoint itself
as receiver for a guaranteed company only if
the company has not met the deadline to sub-
mit a contract for approval under subsection
(b).
(B) CGRC IMMEDIATELY FILES A BANK-
RUPTCY PETITION.—Immediately upon appoint-
ing itself as receiver under paragraph (1), the
Corporation shall file a voluntary petition under
section 301 of title 11, United States Code, on
behalf of the guaranteed company for which the
Corporation appointed itself receiver.
(2) RECOVERY FROM ALL GUARANTEED PAR-
TIES FOR LOSSES DUE TO CLOSED LOOPS.—
(A) IN
GENERAL.—In the case of any
guaranteed company for which the Corporation
files a bankruptcy petition under paragraph
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(1)(B), all guaranteed parties shall be liable to
cover any loss to the bankruptcy estate arising
out of the bankruptcy trustee’s duty to perform
on all guaranteed obligations of the guaranteed
company.
(B) LIABILITY PROPORTIONAL TO A PAR-
TY’S SHARE OF OVERALL GUARANTEED OBLIGA-
TIONS.—A guaranteed party shall be liable
under subparagraph (A) in proportion to such
party’s share of the guaranteed obligations of
all guaranteed parties at the time of the filing
of the bankruptcy petition by the Corporation.
(C) CGRC AUTHORIZATION.—The Cor-
poration is authorized to, and shall, assess
guaranteed parties for any amounts owed under
this paragraph.
(d) STANDING.—Any person can bring an action in
a district court of the United States to force the Corpora-
tion to take action under this section.
SEC. 126.
TREASURY OVERSIGHT OF THE CROSS-GUARAN-
TEE REGULATION CORPORATION.
(a) ENFORCEMENT OF THE ACT.—In the event that
the Corporation should fail to fulfill any of its duties under
this title, the Secretary of the Treasury may apply to the
Federal District Court for the District of Columbia for
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an order requiring the Corporation to discharge its obliga-
tions under this title and for such other relief as the court
may deem necessary to carry out the purposes of this title.
(b) EXAMINATIONS AND REPORTS.—
(1) EXAMINATIONS.—The Secretary of the
Treasury may make such examinations and inspec-
tions of the Corporation and require the Corporation
to furnish it with such reports and records or copies
thereof as the Secretary may consider necessary to
implement the purposes of this title.
(2) REPORTS.—
(A) ANNUAL REPORT.—Within ninety days
after the close of each fiscal year of the Cor-
poration, the Corporation shall submit to the
Treasury Department a written report relative
to the conduct of its business, and the exercise
of the other rights and powers granted by this
title, during such fiscal year.
(B) INFORMATION
TO
BE
INCLUDED
IN
REPORT.—The report under subparagraph (A)
shall include financial statements setting forth
the financial position of the Corporation at the
end of such fiscal year and the results of its op-
erations (including the source and application
of its funds) for such fiscal year.
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(C) 
REQUIRED
AUDIT.—The 
financial
statements required under subparagraph (B)
shall be examined by an independent public ac-
countant or firm of independent public account-
ants, selected by the Corporation and satisfac-
tory to the Treasury Department, and shall be
accompanied by the report thereon of such ac-
countant or firm.
(D) SUBMISSION TO THE PRESIDENT AND
CONGRESS.—The Secretary of the Treasury
shall submit the report under subparagraph (A)
to the President and Congress with such com-
ment thereon as the Secretary deems appro-
priate.
CHAPTER 2—PROTECTION OF INSURED
DEPOSITS
SEC. 128.
BACKUP INSURANCE FOR DEPOSITS AT GUAR-
ANTEED DEPOSITORY INSTITUTIONS.
(a) 
ESTABLISHMENT
OF
CROSS-GUARANTEE
BACKUP FUND.—
(1) IN GENERAL.—There is hereby established
the cross-guarantee backup fund consisting of
amounts deposited pursuant to section 144 and sub-
section (c).
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(2) ADMINISTRATION
OF
FUND.—The cross-
guarantee backup fund shall be administered by the
Corporation.
(b) BACKUP DEPOSIT INSURANCE.—
(1) FUND LIABILITY.—Deposits in any guaran-
teed depository institution shall be insured against
loss, to the same extent as deposits are insured
against loss under section 11(a) of the Federal De-
posit Insurance Act (as in effect on the day before
the enactment of this Act), in the event that no ad-
justment under section 113(a)(2)(F)(iii) will be suf-
ficient to protect all guaranteed obligations of all
guaranteed companies against loss.
(2) SUBORDINATED
DEBT
NOT
TREATED
AS
DEPOSIT.—No subordinated debt of any guaranteed
depository institution or any guaranteed banking of-
fice may be treated as a deposit for purposes of
paragraph (1).
(c) USE AND DISPOSITION OF FUND.—
(1) IN GENERAL.—Amounts in the cross-guar-
antee backup fund may be used only to meet obliga-
tions incurred under subsection (b)(1).
(2) INVESTMENTS.—Amounts on deposit in the
cross-guarantee backup fund shall be invested in di-
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rect obligations of the United States and interest
thereon shall accumulate in the fund.
Subtitle D—Miscellaneous Provisions
SEC. 131.
INSTITUTIONS OFFERING UNINSURED DEPOS-
ITS.
The Corporation shall ensure that any company,
other than—
(a) a depository institution;
(b) a branch which is not an insured branch (as
the term ‘‘insured branch’’ is defined in section 3(s)
of the Federal Deposit Insurance Act);
(c) an insured credit union or noninsured credit
union (as such terms are defined in section 101(7)
of the Federal Credit Union Act);
(d) a broker or dealer registered under the Se-
curities and Exchange Act of 1934; or
(e) an investment company registered under the
Investment Company Act of 1940,
which accepts deposits or assumes obligations which would
be deposits if the institution were a bank or savings asso-
ciation (as defined in section 3 of the Federal Deposit In-
surance Act) is accepting such deposits and assuming such
obligations in accordance with all applicable Federal and
State laws which relate to the licensing and regulation of
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institutions which accept deposits or assume such obliga-
tions.
SEC. 132.
FEDERAL RESERVE LENDING.
Before February 1 of each calendar year beginning
after the cross-guarantee activation date, the Board of
Governors of the Federal Reserve System shall submit a
report to the Committee on Banking, Finance and Urban
Affairs of the House of Representatives and the Commit-
tee on Banking, Housing, and Urban Affairs of the Senate
containing—
(a) a certification that—
(1) no loss was incurred by such Board or
any Federal Reserve Bank during the preceding
calendar year on any loan or other advance to
any guaranteed company during such year; and
(2) no loss is anticipated on any such loan
or advance which remains outstanding at the
end of such year; or
(b) the amount of any such loss or anticipated
loss.
SEC. 
133.
ADVERTISING 
BY 
GUARANTEED 
FINANCIAL
GROUPS.
(a) ADVERTISING DEPOSIT GUARANTEES.—
(1) IN GENERAL.—A guaranteed company or
guaranteed banking office may advertise that depos-
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its and certain other liabilities are fully guaranteed
against any loss under a cross-guarantee contract
approved by the Corporation.
(2) CROSS-GUARANTEE LOGO.—Before the end
of the one year period beginning on the date of the
enactment of this Act, the Corporation—
(A) shall design, after consultation with
depository institutions, a logotype for use by a
guaranteed company or guaranteed banking of-
fice, which shall include language which states
‘‘This institution is operating under a cross-
guarantee contract approved by the Cross-
Guarantee Regulation Corporation’’; and
(B) authorize guaranteed companies and
guaranteed banking offices to use such logo-
type.
(3) REGULATIONS GOVERNING MANNER OF AD-
VERTISING.—The Corporation shall prescribe regula-
tions governing the manner in which a guaranteed
company or guaranteed banking office may display
any logotype permitted under this subsection.
(b) ADVERTISING BACKUP INSURANCE.—A deposi-
tory institution which is guaranteed under a cross-guaran-
teed contract—
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(1) shall display at each place of business of the
institution any sign described in section 18(a) of the
Federal Deposit Insurance Act; and
(2) may advertise that deposits at the institu-
tion are insured by the Federal Government to
$100,000.
SEC. 134. GUARANTEED DEPOSITORY INSTITUTIONS RE-
MAIN FEDERALLY INSURED DEPOSITORIES
FOR PURPOSES OF STATE LAW.
Unless a State or party to a contract otherwise pro-
vides subsequent to the passage of this Act, a guaranteed
depository institution shall be deemed to be a federally in-
sured depository institution within the meaning of section
3(c)(2) of the Federal Deposit Insurance Act for purposes
of any State or Federal law or private agreement which
determines the legally acceptable institutions in which to
deposit funds.
Subtitle E—Transition to 100 Percent Cross-
Guarantee Process
SEC. 141. EFFECTIVE DATE OF SYSTEM BASED ON MINI-
MUM NUMBER OF GUARANTEED DEPOSITORY
INSTITUTIONS AND AMOUNT OF TOTAL AS-
SETS.
(a) IN GENERAL.—No cross-guarantee or stop-loss
contract shall take effect before the later of—
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(1) the end of the eighteen-month period begin-
ning on the date of the enactment of this Act; or
(2) Forty business days after the date on which
the Corporation has approved, under subsection (b),
a minimum of two hundred and fifty cross-guarantee
contracts under which depository institutions which,
in the aggregate, have total assets of not less than
$500,000,000,000 are guaranteed companies or
guaranteed banking offices.
(b) CONTINGENT EFFECT OF CONTRACTS UNTIL EF-
FECTIVE DATE.—
(1) IN GENERAL.—The Corporation may condi-
tionally approve a cross-guarantee or stop-loss con-
tract to become effective on the date to be deter-
mined under subsection (a) even though not all di-
rect guarantors under the contract meet the require-
ments under section 116(a)(1).
(2) MINIMUM REQUIREMENTS.—No cross-guar-
antee or stop-loss contract conditionally approved
under paragraph (1) shall receive final approval
from the Corporation for purposes of subsection
(a)(2) unless—
(A) the cross-guarantee or stop-loss con-
tract is one of a set of contracts in which each
contract—
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(i) is a contract in the same closed
loop; and
(ii) becomes effective at the same time
every other contract within the set of con-
tracts takes effect; and
(B) at the time such contract becomes ef-
fective, the requirements of section 125(a) are
met.
(c) PUBLICATION
OF CROSS-GUARANTEE ACTIVA-
TION DATE.—The Corporation shall immediately publish
in the Federal Register the date of the cross-guarantee
activation date as soon as such date is ascertained.
(d) ONE-TIME
CONVERSION
TO
GUARANTEED
PARTY STATUS.—Notwithstanding any provision of sec-
tion 142, section 111 shall apply with respect to any de-
pository institution as of the date—
(1) on which such institution first becomes a
guaranteed depository institution or guaranteed
banking office;
(2) on which any depository institution which is
affiliated with such depository institution becomes a
guaranteed depository institution; or
(3) on which any depository institution which is
under common ownership with such depository insti-
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tution under section 112(d)(2) becomes a guaran-
teed depository institution.
SEC. 142. MANDATORY PHASE-IN OF CROSS-GUARANTEES
AFTER EFFECTIVE DATE OF SYSTEM.
(a) DEPOSITORY INSTITUTIONS WITH ASSETS OF
$1,000,000,000 OR MORE.—Section 111 shall apply as of
the end of the two-year period beginning on the cross-
guarantee activation date with respect to any depository
institution which has consolidated assets at book value
which are equal to or greater than $1,000,000,000 as of
the end of such two-year period.
(b) DEPOSITORY INSTITUTIONS WITH ASSETS OF
$500,000,000 OR MORE.—Section 111 shall apply as of
the end of the three-year period beginning on the cross-
guarantee activation date with respect to any depository
institution which has consolidated assets at book value
which are equal to or greater than $500,000,000 as of
the end of such three-year period.
(c) DEPOSITORY INSTITUTIONS WITH ASSETS
OF
$250,000,000 OR MORE.—Section 111 shall apply as of
the end of the four-year period beginning on the cross-
guarantee activation date with respect to any depository
institution which has consolidated assets at book value
which are equal or to greater than $250,000,000 as of
the end of such four-year period.
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(d) DEPOSITORY INSTITUTIONS WITH ASSETS OF
$100,000,000 OR MORE.—Section 111 shall apply as of
the end of the five-year period beginning on the cross-
guarantee activation date with respect to any depository
institution which has consolidated assets at book value
which are equal to or greater than $100,000,000 as of
the end of such five-year period.
(e) DEPOSITORY INSTITUTIONS WITH ASSETS
OF
$50,000,000 OR MORE.—Section 111 shall apply as of the
end of the six-year period beginning on the cross-guaran-
tee activation date with respect to any depository institu-
tion which has consolidated assets at book value which are
equal to or greater than $50,000,000 as of the end of such
six-year period.
(f) DEPOSITORY INSTITUTIONS WITH ASSETS
OF
$25,000,000 OR MORE.—Section 111 shall apply as of the
end of the seven-year period beginning on the cross-guar-
antee activation date with respect to any depository insti-
tution which has consolidated assets at book value which
are equal to or greater than $25,000,000 as of the end
of such seven-year period.
(g) ALL OTHER DEPOSITORY INSTITUTIONS.—Sec-
tion 111 shall apply as of the end of the eight-year period
beginning on the cross-guarantee activation date with re-
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spect to any depository institution which is not described
in subsection (a), (b), (c), (d), (e), or (f).
(h) CONSOLIDATED ASSETS AT BOOK VALUE DE-
FINED.—The term ‘‘consolidated assets at book value’’
means the total value as determined on a consolidated
basis and in accordance with generally accepted account-
ing principles, of all tangible and intangible property of
any depository institution, all subsidiaries of such institu-
tion, all affiliates of such institution which are depository
institutions, and all subsidiaries of such affiliates.
SEC. 143. APPOINTMENT OF RECEIVER FOR INSTITUTIONS
WHICH FAIL TO COMPLY WITH TRANSITION
REQUIREMENTS.
The Federal Deposit Insurance Corporation shall im-
mediately appoint a receiver for any depository institution
which is not a guaranteed depository institution or guar-
anteed banking office under any cross-guarantee contract
as of the date by which such information is required to
be guaranteed depository institution or guaranteed bank-
ing office under section 142.
SEC. 144. FUNDING THE CROSS-GUARANTEE BACKUP FUND.
(a) SEQUENCE OF ACTIONS TO BE TAKEN ON THE
CROSS-GUARANTEE ACTIVATION DATE.—On the cross-
guarantee activation date, the Federal Deposit Insurance
Corporation shall:
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(1) MERGE
EXISTING
DEPOSIT
INSURANCE
FUNDS.—Merge the Savings Association Insurance
Fund (established under section 11(a)(6)(A) of the
Federal Deposit Insurance Act) into the Bank In-
surance Fund (established under section 11(a)(5)(A)
of the Federal Deposit Insurance Act) with the
Bank Insurance Fund assuming all of the assets and
liabilities of the Savings Association Insurance
Fund.
(2) ADJUST BALANCE IN THE BANK INSURANCE
FUND.—
(A) ADJUST LOSS RESERVE.—Subsequent
to the merger under paragraph (1), adjust the
Bank Insurance Fund’s reserve for losses to re-
flect the present value of the fund’s expected
losses due to depository institutions that did
not become guaranteed depository institutions
on the cross-guarantee activation date.
(B) CREATE
SEVERANCE
BENEFITS
RE-
SERVE.—Transfer to a severance benefits re-
serve from the unobligated balance in the Bank
Insurance Fund the estimated cost of the sever-
ance pay and related benefits to be disbursed
under section 145.
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(3) TRANSFER FUNDS TO FICO.—Transfer from
the Bank Insurance Fund to the Financing Corpora-
tion (established under section 21(a) of the Federal
Home Loan Bank Act) such sums as shall be suffi-
cient to carry out the purposes of subsection (c).
(4) ADJUST DESIGNATED RESERVE RATIO FOR
THE BANK INSURANCE FUND.—After carrying out
the provisions of paragraphs (1) through (3), cal-
culate a designated reserve ratio for the Bank Insur-
ance Fund that shall be used after the cross-guaran-
tee activation date for the purpose of determining
deposit insurance assessments in lieu of the des-
ignated 
reserve 
ratio 
specified 
under 
section
7(b)(2)(A)(iv)(I) of the Federal Deposit Insurance
Act.
(b) ACTIONS SUBSEQUENT TO THE CROSS-GUARAN-
TEE ACTIVISION DATE.—Within thirty days after carrying
out the provisions of subsection (a), the Federal Deposit
Insurance Corporation shall transfer to the cross-guaran-
tee backup fund an amount equal to the product of—
(1) the estimated insured deposits held by de-
pository institutions becoming guaranteed depository
institutions on the cross-guarantee activation date;
and
(2) the ratio calculated under subsection (a)(4).
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(c) DEFEASE REMAINING INTEREST PAYABLE ON
FICO BONDS.—
(1) PURCHASE ZERO COUPON INSTRUMENTS.—
The directors of the Financing Corporation (estab-
lished under section 21(a) of the Federal Home
Loan Bank Act) shall use the funds transferred to
the Financing Corporation under subsection (a)(3)
to purchase noninterest bearing direct obligations of
the United States with face amounts (the amount of
principal payable at maturity) and maturities ap-
proximately equal to the remaining interest due and
payable on obligations issued by the Financing Cor-
poration under section 21(e) of the Federal Home
Loan Bank Act.
(2) TERMINATE
FICO
ASSESSMENT
AUTHOR-
ITY.—Upon purchasing the securities described in
paragraph (1), the Financing Corporation shall
cease making assessments authorized under section
21(f) of the Federal Home Loan Bank Act.
(d) ACTIONS TO BE TAKEN ON EVERY JUNE 30 AND
DECEMBER 31 AFTER THE CROSS-GUARANTEE ACTIVA-
TION DATE.—
(1) ADJUST RESERVES FOR LOSSES AND SEV-
ERANCE BENEFITS.—On every June 30 and Decem-
ber 31 after the cross-guarantee activation date, the
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Federal Deposit Insurance Corporation shall adjust
the reserve for losses and severance benefits in the
Bank Insurance Fund to reflect contemporaneous
estimates of the present value of future losses and
benefits to be paid from the fund.
(2) TRANSFER ADDITIONAL FUNDS TO BACKUP
FUND.—Upon making the adjustments described in
paragraph (1), the Federal Deposit Insurance Cor-
poration shall transfer to the cross-guarantee
backup fund an amount equal to the product of—
(A) the estimated insured deposits, as of
the beginning of the six month period ending on
June 30 or December 31, for all depository in-
stitutions that became guaranteed depository
institutions during such a six-month period;
and
(B) the ratio calculated under subsection
(a)(4).
(e) ACTIONS TO BE TAKEN AFTER THE TRANSITION
PERIOD.—
(1) SEQUENCE OF ACTIONS TO BE TAKEN AT
THE
END
OF
THE
TRANSITION
PERIOD.—Imme-
diately upon the appointment of all receivers under
section 143, the Federal Deposit Insurance Corpora-
tion shall—
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(A) adjust the Bank Insurance Fund’s re-
serves for losses and severance benefits to re-
flect the expenses of winding up each Federal
Deposit Insurance Corporation receivership still
open after all receivers have been appointed
under section 143; and
(B) after making the adjustment described
in subparagraph (A), transfer all funds remain-
ing in the Bank Insurance Fund to the cross-
guarantee backup fund.
(2) ACTIONS TO BE TAKEN AS FDIC RECEIVER-
SHIPS ARE CLOSED OUT.—Upon liquidating all as-
sets and paying all remaining claims and direct and
indirect expenses of a receivership administered by
the Federal Deposit Insurance Corporation, except
the claim of the Federal Deposit Insurance Corpora-
tion, the Federal Deposit Insurance Corporation
shall transfer to the cross-guarantee backup fund all
of the funds remaining in the receivership.
(3) FINAL TRANSFER TO THE CROSS-GUARAN-
TEE
BACKUP
FUND.—After closing out the last
Bank Insurance Fund receivership, the Federal De-
posit Insurance Corporation shall liquidate all of its
remaining assets and then transfer all of its remain-
ing funds to the cross-guarantee backup fund.
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SEC. 145.
SEVERANCE PAY AND RELATED BENEFITS FOR
FORMER 
FEDERAL 
AND 
STATE 
BANKING
AGENCY EMPLOYEES.
(a) DEFINITIONS.—For purposes of this section—
(1) ELIGIBLE EMPLOYEE.—The term ‘‘eligible
employee’’ means any individual—
(A) who is employed by a Federal banking
agency, a State bank supervisor, or the Federal
Financial Institutions Examination Council
(FFIEC) as of the date of the enactment of
this Act, including employees of the Federal
Deposit Insurance Corporation on detail to the
Resolution Trust Corporation; and
(B) whose employment is terminated by
the agency or supervisor after such date other
than for cause.
(2) FEDERAL
BANKING
AGENCY.—The term
‘‘Federal banking agency’’ has the meaning given to
such term in section 3(q) of the Federal Deposit In-
surance Act.
(3) STATE
BANK
SUPERVISOR.—The term
‘‘State bank supervisor’’ has the meaning given to
such term in section 3(r) of the Federal Deposit In-
surance Act.
(b) SEVERANCE PAY.—
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(1) IN GENERAL.—Subject to paragraph (3),
any eligible employee shall be entitled to receive in
a lump sum, from the Bank Insurance Fund at the
time such employee’s employment by a Federal
banking agency, State bank supervisor, or the
FFIEC, is terminated, severance pay in the amount
which is equal to the sum of—
(A) the amount equal to two months of
compensation at the employee’s average annual
rate of base pay for the last twelve calendar
months of the employee’s employment by any
Federal banking agency, State bank supervisor,
or the FFIEC; plus
(B) the product of—
(i) the amount equal to three weeks of
compensation at the employee’s annual
rate of base pay (as determined under sub-
paragraph (A)); and
(ii) the number of years (including
any fraction of a year) of full-time service
of such employee with any Federal banking
agency, State bank supervisor, or the
FFIEC, or any predecessor of any such
agency or supervisor, where such number
of years can include employment for more
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than one such agency or supervisor and
need not be continuous employment.
(2) EXCEPTION FOR EMPLOYEES REEMPLOYED
BY ANOTHER FEDERAL OR STATE AGENCY.—Para-
graph (1) shall not apply with respect to any eligible
employee who—
(A) in the case of an individual who is an
eligible employee by virtue of being separated
from service with any Federal agency, transfers
to or becomes employed by another Federal de-
partment, agency, or government corporation;
or
(B) in the case of an individual who is an
eligible employee by virtue of being separated
from service with a State bank supervisor,
transfers to or becomes employed by another
department, agency, or instrumentality of such
State.
(3) PROHIBITION
ON
CERTAIN
GOVERNMENT
SERVICE AFTER ACCEPTING SEVERANCE PAY.—
(A) FEDERAL EMPLOYEE.—No individual
who receives severance pay under this sub-
section by virtue of being separated from serv-
ice with a Federal agency or State bank super-
visor may be employed by any Federal officer,
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department, agency, or government corporation
during the five-year period beginning on the
date such severance pay is received by such in-
dividual.
(B) STATE
EMPLOYEE.—No individual
who is, but for this subparagraph, entitled to
receive severance pay under this subsection by
virtue of being separated from service with a
State bank supervisor may receive such pay un-
less such individual has entered into a contract
with the Federal Deposit Insurance Corporation
under which such individual, in consideration of
the payment of such severance pay, is obligated
to return such amount in full, plus interest, to
the Federal Deposit Insurance Corporation if
such employee is employed by an officer, de-
partment, or agency of that State during the
five-year period beginning on the date such sev-
erance pay is received by such individual.
(4) PURCHASE
OF
ADDITIONAL
RETIREMENT
BENEFITS.—An eligible employee may use any por-
tion of the severance pay to which the employee is
entitled under this subsection to purchase additional
benefits or make additional investments in any Fed-
eral retirement plan in which the employee is or was
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entitled to participate as an employee before becom-
ing an eligible employee.
(c) RELOCATION EXPENSES AND HEALTH BENE-
FITS.—
(1) RELOCATION EXPENSES.—An eligible em-
ployee who obtains employment away from the place
such employee was employed by an appropriate Fed-
eral banking agency, State banking supervisor, or
the FFIEC shall be entitled to receive travel, reloca-
tion, and moving expenses from the Bank Insurance
Fund to the same extent Federal employees who are
transferred or reemployed are authorized to receive
such expenses under subchapter II of chapter 57 of
title 5, United States Code.
(2) HEALTH BENEFITS.—
(A) IN
GENERAL.—An eligible employee
shall be entitled to receive the same health ben-
efits as such employee received as of the date
of termination for a time period which shall
consist of the shorter of—
(i) eighteen months following the date
of termination of employment; or
(ii) until such employee obtains alter-
native full-time employment.
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(B) ADMINISTRATION OF THE PROVISION
OF HEALTH BENEFITS.—The agency which ter-
minated the employment of the eligible em-
ployee shall be responsible for administering the
provision of health benefits authorized under
subparagraph (A), unless such agency has been
abolished in which case the Federal or State
government (whichever case is appropriate)
shall provide for another agency or government
entity to perform this function.
(C) SEVERANCE FUND COMPENSATION.—
The Bank Insurance Fund shall reimburse any
agency or government entity for the costs of
providing the benefits authorized under sub-
paragraph (A).
(d) FUNDING BENEFITS
FOR ELIGIBLE EMPLOY-
EES.—Expenses incurred by the Federal Deposit Insur-
ance Corporation in administering the provisions of this
section shall be paid from the Bank Insurance Fund.
SEC. 146. ABOLITION OF FEDERAL FINANCIAL INSTITU-
TIONS EXAMINATION COUNCIL.
The Federal Financial Institutions Examination
Council is hereby abolished, effective on the date on which
section 142(g) shall become effective.
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SEC. 147. ABOLITION OF THE FEDERAL DEPOSIT INSUR-
ANCE CORPORATION.
(a) IN GENERAL.—The Federal Deposit Insurance
Corporation is hereby abolished, effective on the date on
which the last receivership or conservatorship resulting
from the appointment of a receiver or conservator by the
Federal Deposit Insurance Corporation has been liq-
uidated, disposed of, or otherwise resolved.
(b) SAVINGS PROVISIONS RELATED TO THE FDIC.—
(1) EXISTING RIGHTS, DUTIES, AND OBLIGA-
TIONS NOT AFFECTED.—Subsection (a) shall not af-
fect the validity of any right, duty, or obligation of
the United States, the Federal Deposit Insurance
Corporation, or any other person, which existed on
the day before the date of the enactment of this Act.
(2) CONTINUATION
OF
SUITS.—No action or
other proceeding commenced by or against the Fed-
eral Deposit Insurance Corporation shall abate by
the reason of the enactment of this Act, except that
the Secretary of Treasury shall be substituted for
the Federal Deposit Insurance Corporation as a
party to any such action or proceeding.
SEC. 148. CONTINUATION OF ORDERS, RESOLUTIONS, AND
DETERMINATIONS.
All orders, resolutions, determinations, and regula-
tions which have been issued, made, prescribed, or allowed
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prior to a depository institution becoming a guaranteed
depository institution shall continue in effect according to
the terms of such orders, resolutions, and determinations
until modified, terminated, set aside, or superseded in ac-
cordance with applicable law by the agency which issued
the order, resolution, determination, or regulation, by any
court of competent jurisdiction, by operation of this Act,
or by operation of law.
TITLE II—AMENDMENTS TO OTHER
BANKING LAWS
SEC. 201. AMENDMENTS RELATING TO NATIONAL BANKS.
(a) EXEMPTIONS FROM MINIMUM CAPITAL, STOCK,
AND OTHER REQUIREMENTS COVERED BY CROSS-GUAR-
ANTEE CONTRACTS.—
(1) CAPITAL
OF
NATIONAL
BANKS.—Section
5138 of the Revised Statutes of the United States
(12 U.S.C. 51) is amended by adding at the end the
following new sentence: ‘‘This section shall not apply
with respect to any national bank which is a guaran-
teed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993).’’.
(2) PREFERRED STOCK IN MEMBER BANKS.—
Section 345 of the Banking Act of 1935 (12 U.S.C.
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51B–1) is amended by adding at the end the follow-
ing new sentence: ‘‘This section shall not apply with
respect to any bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993).’’.
(3) DEFICIENT
CAPITAL
PROVISION
FOR
NA-
TIONAL BANKS.—Section 5205 of the Revised Stat-
utes of the United States (12 U.S.C. 55) is amended
by adding at the end the following new sentence:
‘‘This section shall not apply with respect to any na-
tional bank which is a guaranteed depository institu-
tion (as defined in section 101(a)(7) of the Deposit
Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(4) WITHDRAWAL OF CAPITAL PROVISION FOR
NATIONAL
BANKS.—Section 5204 of the Revised
Statutes of the United States (12 U.S.C. 56) is
amended by adding at the end the following new
sentence: ‘‘This section shall not apply with respect
to any national bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Depositor Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993).’’.
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(5) INCREASE IN CAPITAL PROVISION FOR NA-
TIONAL BANKS.—Section 5142 of the Revised Stat-
utes of the United States (12 U.S.C. 57) is amended
by adding at the end the following new sentence:
‘‘This section shall not apply with respect to any na-
tional bank which is a guaranteed depository institu-
tion (as defined in section 101(a)(7) of the Deposit
Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(6) DECREASE AND DISTRIBUTION OF CAPITAL
PROVISION FOR NATIONAL BANKS.—Section 5143 of
the Revised Statutes of the United States (12
U.S.C. 59) is amended by adding at the end the fol-
lowing new sentence: ‘‘Notwithstanding the preced-
ing sentence, the approval of the Comptroller of the
Currency shall not be required for any reduction of
capital stock, or any distribution to shareholders by
reason of any such reduction, under such sentence
by any national bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993).’’.
(7) DIVIDEND PROVISIONS.—
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(A) IN GENERAL.—Section 5199(a) of the
Revised Statutes of the United States (12
U.S.C. 60(a)) is amended—
(i) by striking ‘‘(a) The directors’’
and inserting ‘‘(a) DECLARATION OF DIVI-
DEND.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
the directors’’;
(ii) by striking ‘‘expedient; except that
until the surplus fund of such association’’
and inserting ‘‘expedient’’.
‘‘(2) 
EXCEPTION
FOR
CERTAIN
UNDERCAPITALIZED ASSOCIATIONS.—Until the sur-
plus fund of a national bank’’; and
(iii) by adding at the end of para-
graph (2) (as so redesignated by clause (ii)
of this subparagraph) the following: ‘‘This
paragraph shall not apply with respect to
any national bank which is a guaranteed
depository institution (as defined in section
101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Tax-
payer Protection Act of 1993).’’.
(B) TECHNICAL AND CONFORMING AMEND-
MENT.—Section 5199(b) of the Revised Stat-
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utes of the United States (12 U.S.C. 60(b)) is
amended—
(i) by striking ‘‘(b) The approval of
the Comptroller’’ and inserting ‘‘(b) AP-
PROVAL OF THE COMPTROLLER.—Except
in the case of a national bank which is a
guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit
Insurance Reform, Regulatory Moderniza-
tion and Taxpayer Protection Act of
1993), the approval of the Comptroller’’;
and
(ii) by striking ‘‘such association’’ and
inserting ‘‘a national bank’’.
(b) EXEMPTIONS FROM REQUIREMENTS RELATING
TO DIRECTORS OF BANKS.—
(1) QUALIFICATIONS OF NATIONAL BANK DI-
RECTORS.—Section 5146 of the Revised Statutes of
the United States (12 U.S.C. 72) is amended by
adding at the end the following new sentence: ‘‘This
section shall not apply with respect to any national
bank which is a guaranteed depository institution
(as defined in section 101(a)(7) of the Deposit In-
surance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993.’’.
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(2) SERVICE
OF
PRESIDENT
OF
NATIONAL
BANK AS CHAIRMAN OF THE BANK’S BOARD OF DI-
RECTORS.—Section 5150 of the Revised Statues of
the United States (12 U.S.C. 76) is amended by
adding at the end the following new sentence: ‘‘This
section shall not apply with respect to any national
bank which is a guaranteed depository institution
(as defined in section 101(a)(7) of the Deposit In-
surance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(3) MEMBER
BANK
DIRECTOR
INTERLOCKS
WITH SECURITIES FIRMS.—Section 32 of the Bank-
ing Act of 1933 (12 U.S.C. 78) is amended by add-
ing at the end the following new sentence: ‘‘This sec-
tion shall not apply with respect to any member
bank which is a guaranteed depository institution
(as defined in section 101(a)(7) of the Deposit In-
surance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(4) LOANS
ON
OR
PURCHASE
OF
NATIONAL
BANK’S OWN STOCK.—Section 5201 of the Revised
Statutes of the United States (12 U.S.C. 83) is
amended by adding at the end the following new
sentence: ‘‘This section shall not apply with respect
to any national bank which is a guaranteed deposi-
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tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993).’’.
(c) EXEMPTION FROM REQUIREMENT RELATING TO
LOANS TO ONE BORROWER.—Section 5200 of the Revised
Statues of the United States (12 U.S.C. 84) is amended
by adding at the end the following new subsection:
‘‘(e) EXEMPTION OF GUARANTEED COMPANIES.—
This section shall not apply with respect to any national
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993).’’.
(d) EXEMPTION FROM REQUIREMENTS RELATING
TO SECURITY FOR DEPOSITS OF GOVERNMENT AGENCIES
AT NATIONAL BANKS.—Section 5153 of the Revised Stat-
utes of the United States (12 U.S.C. 90) is amended—
(1) in the first undesignated paragraph by
striking ‘‘All national banking associations’’ and in-
serting ‘‘(a) IN GENERAL.—All national banks’’;
(2) in the second undesignated paragraph, by
striking ‘‘Any national banking association’’ and in-
serting ‘‘(b) DEPOSITORY FOR STATE AND LOCAL
GOVERNMENTS.—Any national bank’’;
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(3) in the third undesignated paragraph, by
striking ‘‘Any national banking association’’ and in-
serting ‘‘(c) DEPOSITORY
FOR INDIAN TRIBES.—
Any national bank’’; and
(4) by adding at the end the following new sub-
section:
‘‘(d) EXEMPTION FROM SECURITY AND COLLATERAL
REQUIREMENTS.—A national bank which is a guaranteed
depository institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Modernization,
and Taxpayer Protection Act of 1993) shall not be re-
quired to give any security which is otherwise required
under subsection (a), (b), or (c) for deposits with the bank
under this section or for the performance of the bank as
financial agent.’’.
(e) EXEMPTION FROM PROVISION RELATING
TO
TRANSFERS BY NATIONAL BANKS IN CONTEMPLATION OF
INSOLVENCY.—Section 5242 of the Revised Statutes of
the United States (12 U.S.C. 91) is amended by adding
at the end the following new sentence: ‘‘This section shall
not apply with respect to any national bank which is a
guaranteed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform, Regulatory
Modernization, and Taxpayer Protection Act of 1993.’’.
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(f) EXEMPTION FROM REQUIREMENTS RELATING TO
REPORTS OF CONDITION.—Section 5211 of the Revised
Statutes of the United States (12 U.S.C. 161) is amended
by adding at the end the following new subsection:
‘‘(d) EXEMPTION OF GUARANTEED COMPANIES.—
This section shall not apply with respect to any national
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993.’’.
(g) CONSENT OF GUARANTORS REQUIRED FOR VOL-
UNTARY DISSOLUTION.—
(1) IN GENERAL.—Section 5220 of the Revised
Statues of the United States (12 U.S.C. 181) is
amended—
(A) in the first undesignated paragraph, by
striking ‘‘Any association’’ and inserting ‘‘(a)
IN GENERAL.—Any national bank’’;
(B) in the second undesignated paragraph,
by striking ‘‘The Shareholders shall designate’’
and inserting ‘‘(b) LIQUDIATING AGENT
OR
COMMITTEE.—The 
shareholders 
shall 
des-
ignate’’; and
(C) by adding at the end the following new
subsection:
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‘‘(c) CONSENT
OF GUARANTORS REQUIRED
FOR
GUARANTEED COMPANIES.—Int he case of any national
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993), the national bank may go into liquidation
and be closed in accordance with subsection (a) only with
the consent of the direct guarantors of such bank.’’.
(2) NOTICE
TO
SYNDICATE
AGENT.—Section
5221 of the Revised Statutes of the United States
(12 U.S.C. 182 is amended by inserting ‘‘and, in
the case of a national bank which is a guaranteed
depository 
institution 
(as 
defined 
in 
section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993), to the syndicate agent of such bank’’ after
‘‘Comptroller of the currency’’.
(h) COMPTROLLER
OF
THE CURRENCY NOT AU-
THORIZED TO APPOINT RECEIVER.—
(1) IN GENERAL.—The Act entitled ‘‘An Act
authorizing the appointment of receivers of national
banking associations, and for other purposes.’’ and
approved June 30, 1876, is amended by inserting
after the first section (12 U.S.C. 191) the following
new section:
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‘‘SEC. 2. EXEMPTION OF GUARANTEED NATIONAL BANKS.
‘‘This Act shall not apply with respect to any national
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993).’’.
(2) EXEMPTION
FROM
ADDITIONAL
GROUND
FOR
THE
APPOINTMENT
OF
RECEIVERS.—Section
5234 of the Revised Statutes (12 U.S.C. 192) is
amended by adding at the end the following new
sentence: ‘‘This sentence shall not apply with respect
to any national bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993).’’.
(i) COMPTROLLER OF THE CURRENCY NOT AUTHOR-
IZED TO APPOINT CONSERVATOR.—The Bank Conserva-
tion Act is amended by inserting after section 206 the fol-
lowing new section:
‘‘SEC. 207. EXEMPTION OF GUARANTEED NATIONAL BANKS.
‘‘This subchapter shall not apply with respect to any
national bank which is a guaranteed depository institution
(as defined in section 101(a)(7) of the Deposit Insurance
Reform, Regulatory Modernization, and Taxpayer Protec-
tion Act of 1993).’’.
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(j) COMPTROLLER OF THE CURRENCY NOT AUTHOR-
IZED TO EXAMINE GUARANTEED BANKS.—Section 5240
of the Revised Statutes of the United States (12 U.S.C.
481–485) is amended by adding at the end of the first
paragraph of such section the following new sentence:
‘‘Notwithstanding any other provision of this section, the
authority of the Comptroller of the Currency to examine
any national bank or any affiliate of a national bank shall
not apply with respect to any national bank which is a
guaranteed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform, Regulatory
Modernization, and Taxpayer Protection Act of 1993) or
any affiliate of such bank.’’.
(k) EXEMPTION FROM LIMITATION OR CONDITIONS
ON REAL ESTATE LENDING AUTHORITY.—Section 24(a)
of the Federal Reserve Act (12 U.S.C. 371(a)) is amended
by adding at the end the following new sentence: ‘‘Not-
withstanding the preceding sentence, a national bank
which is a guaranteed depository institution (as defined
in section 101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Protection Act
of 1993) shall not be subject to section 18(o) of the Fed-
eral Deposit Insurance Act or any restriction or require-
ment prescribed by the Comptroller of the Currency under
the preceding sentence.’’.
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SEC. 202. AMENDMENTS RELATING TO MEMBER BANKS.
(a) FEDERAL RESERVE BOARD AND FEDERAL RE-
SERVE BANKS NOT AUTHORIZED TO EXAMINE GUARAN-
TEED MEMBER BANKS.—
(1) IN GENERAL.—Section 11(a)(1) of the Fed-
eral Reserve Act (12 U.S.C. 248(a)(1)) is amended
by adding at the end the following new sentence:
‘‘Notwithstanding any other provision of this section,
the authority of the Board or any Federal reserve
bank to examine any member bank shall not apply
with respect to any member bank which is a guaran-
teed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993).’’.
(2) SPECIAL
EXAMINATIONS.—The first sen-
tence of the fifth undesignated paragraph of section
5240 of the Revised Statutes of the United States
(12 U.S.C. 483) is amended by inserting ‘‘which are
not guaranteed depository institutions (as defined in
section 101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Protection
Act of 1993)’’ after ‘‘member banks within its dis-
trict’’.
(3) FOREIGN OPERATION OF STATE MEMBER
BANKS.—The last sentence of the sixth undesignated
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paragraph of section 5240 of the Revised Statutes of
the United States (12 U.S.C. 481) is amended by
inserting ‘‘and are not guaranteed depository institu-
tions (as defined in section 101(a)(7) of the Deposit
Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993)’’ before the pe-
riod.
(4) EXAMINATIONS IN CONNECTION WITH AD-
VANCES OR DISCOUNTS.—Section 11(n) of the Fed-
eral Reserve Act (12 U.S.C. 248(n)) is amended by
striking ‘‘depository institution,’’ and inserting ‘‘de-
pository institution (other than a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993)),’’.
(b) EXEMPTION FROM MEMBER BANK LOAN LIMI-
TATIONS.—Section 11(m) of the Federal Reserve Act (12
U.S.C. 248(m)) is amended by adding at the end the fol-
lowing new sentence: ‘‘This paragraph shall not apply with
respect to any member bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of the De-
posit Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(c) EXEMPTION FROM LIMITATION ON ACCESS TO
FED WIRE.—Section 11 of the Federal Reserve Act (12
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U.S.C. 248) is amended by inserting after paragraph (n)
the following new paragraph:
‘‘(o) PROHIBITION ON LIMITS ON ACCESS TO PAY-
MENT AND CLEARING SYSTEMS BY GUARANTEED MEM-
BER BANKS.—Notwithstanding any other provision of law,
the Board may not limit or deny access by any member
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993) to the payment system or any system in ef-
fect for clearing transactions in securities for the purpose
of protecting any such system from any risk.’’.
(d) FEDERAL RESERVE BOARD NOT AUTHORIZED
TO
APPOINT
CONSERVATOR
OR
RECEIVER.—Section
11(p) of the Federal Reserve Act (12 U.S.C. 248(p)) (as
added by section 133(f) of the Federal Deposit Insurance
Corporation Act of 1991) is amended to read as follows:
‘‘(p) AUTHORITY TO APPOINT CONSERVATOR OR RE-
CEIVER.—
‘‘(A) IN GENERAL.—Except as provided in sub-
paragraph (B), the Board may appoint the Federal
Deposit Insurance Corporation as conservator or re-
ceiver for a State member bank under section
11(c)(8) of the Federal Deposit Insurance Act.
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‘‘(B) EXCEPTION
FOR
GUARANTEED
DEPOSI-
TORY
INSTITUTIONS.—This paragraph shall not
apply with respect to any member bank which is a
guaranteed depository institution (as defined in sec-
tion 101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Protection
Act of 1993).’’.
(e) QUALIFICATION OF GUARANTEED STATE BANKS
FOR MEMBER BANK STATUS WITHOUT APPLICATION.—
(1) IN GENERAL.—The first undesignated para-
graph of section 9 of the Federal Reserve Act (12
U.S.C. 321) is amended by adding at the end the
following new sentence: ‘‘Notwithstanding the appli-
cation requirement contained in the first sentence of
this paragraph, any State bank which is a guaran-
teed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993) may become a member of the Federal Re-
serve System without application by agreeing to be
subject to all applicable provisions of this Act and by
subscribing to stock in the same manner and
amount as a national bank under section 2.’’.
(2) EXEMPTION FROM CAPITAL, RESERVE, AND
REPORTING REQUIREMENTS.—The first sentence of
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the sixth undesignated paragraph of section 9 of the
Federal Reserve Act (12 U.S.C. 324) is amended by
inserting ‘‘, other than a bank which is a guaranteed
depository 
institution 
(as 
defined 
in 
section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993),’’ after ‘‘banks admitted to membership
under authority of this section’’.
(3) EXEMPTION
FROM
EXAMINATION.—The
seventh undesignated paragraph of section 9 of the
Federal Reserve Act (12 U.S.C. 325) is amended by
striking ‘‘such banks’’ and inserting ‘‘, any bank ad-
mitted to membership under this section, other than
a bank which is a guaranteed depository institution
(as defined in section 101(a)(7) of the Deposit In-
surance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993),’’.
(4) EXEMPTION
FROM
SPECIAL
EXAMINA-
TIONS.—The eighth undesignated paragraph of sec-
tion 9 of the Federal Reserve Act (12 U.S.C. 326)
is amended by adding at the end the following new
sentence: ‘‘Notwithstanding any other provision of
this paragraph, the authority of the Board to exam-
ine any member bank shall not apply with respect to
any member bank which is a guaranteed depository
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institution (as defined in section 101(a)(7) of the
Deposit Insurance Reform, Regulatory Moderniza-
tion, and Taxpayer Protection Act of 1993).’’.
(5) EXEMPTION
FROM
CERTAIN
FORFEITURE
PROVISION.—The ninth undesignated paragraph of
section 9 of the Federal Reserve Act (12 U.S.C.
327) is amended by inserting ‘‘, other than a bank
which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance
Reform, Regulatory Modernization, and Taxpayer
Protection Act of 1993),’’ after ‘‘a member bank’’.
(6) EXEMPTION
FROM
ADDITIONAL
CAPITAL
REQUIREMENT.—The eleventh undesignated para-
graph of section 9 of the Federal Reserve Act (12
U.S.C. 329) is amended by adding at the end the
following new sentence: ‘‘This paragraph shall not
apply with respect to any member bank which is a
guaranteed depository institution (as defined in sec-
tion 101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Protection
Act of 1993).’’.
(7) EXEMPTION FROM SECURITY AND COLLAT-
ERAL REQUIREMENT.—The last sentence of the fif-
teenth undesignated paragraph of section 9 of the
Federal Reserve Act (12 U.S.C. 332) is amended by
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inserting ‘‘, other than a bank which a guaranteed
depository 
institution 
(as 
defined 
in 
section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993),’’ after ‘‘the banks and trust companies
thus designated’’.
(8) MEMBERSHIP QUALIFICATION IN THE CASE
OF STATE MUTUAL SAVINGS BANKS.—The sixteenth
undesignated paragraph of section 9 of the Federal
Reserve Act (12 U.S.C. 333) is amended by insert-
ing after the first sentence the following new sen-
tence: ‘‘Notwithstanding the application requirement
contained in the preceding sentence, any State mu-
tual savings bank which is a guaranteed depository
institution (as defined in section 101(a)(7) of the
Deposit Insurance Reform, Regulatory Moderniza-
tion, and Taxpayer Protection Act of 1993) may be-
come a member of the Federal Reserve System with-
out application by agreeing to be subject to all appli-
cable provisions of this Act and by subscribing to
stock in the same manner and amount as provided
in this paragraph for State mutual savings banks
applying for membership.’’
(9) EXEMPTION FROM AFFILIATE REPORTING
REQUIREMENTS—
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(A) IN GENERAL.—The first sentence of
the seventeenth undesignated paragraph of sec-
tion 9 of the Federal Reserve Act (12 U.S.C.
334) is amended by inserting ‘‘, other than a
bank which is a guaranteed depository institu-
tion (as defined in section 101(a)(7) of the De-
posit Insurance Reform, Regulatory Moderniza-
tion, and Taxpayer Protection Act of 1993),’’
after ‘‘bank admitted to membership under this
section’’.
(B) EXEMPTION FROM ADDITIONAL AFFIL-
IATE REPORTING REQUIREMENTS.—The eight-
eenth undesignated paragraph of section 9 of
the Federal Reserve Act (12 U.S.C. 334) is
amended by inserting ‘‘, other than a bank
which is a guaranteed depository institution (as
defined in section 101(a)(7) of the Deposit In-
surance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993),’’ after ‘‘af-
filiated member bank’’.
(10) EXEMPTION
FROM
EXAMINATION
RE-
QUIREMENTS.—The 
twenty-second 
undesignated
paragraph of section 9 of the Federal Reserve Act
(12 U.S.C. 338) is amended by inserting ‘‘, other
than a bank which is a guaranteed depository insti-
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tution (as defined in section 101(a)(7) of the De-
posit Insurance Reform, Regulatory Modernization,
and Taxpayer Protection Act of 1993),’’ after ‘‘State
member banks’’ the first place such term appears.
(f) EXEMPTION FROM INTEREST REQUIREMENTS.—
Section 19(i) of the Federal Reserve Act (12 U.S.C. 371a)
is amended by adding at the end the following new sen-
tence: ‘‘No provision of this subsection shall apply with
respect to a member bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of the De-
posit Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(g) EXEMPTION FROM REQUIREMENTS RELATING
TO INTERBANK LIABILITIES AND TRANSACTIONS WITH
AFFILIATES.—
(1) INTERBANK
LIABILITIES.—Section 23 of
the Federal Reserve Act (12 U.S.C. 371(b–2)) is
amended by adding at the end the following new
subsection:
‘‘(f) EXEMPTION FOR GUARANTEED DEPOSITORY IN-
STITUTIONS.—A guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993) shall not be subject to any regulation or
order issued under this section.’’.
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(2) 
EXEMPTION
FROM
RESTRICTIONS
ON
TRANSACTIONS
WITH
AFFILIATES.—Sections 23A
and 23B of the Federal Reserve Act (12 U.S.C.
371c, 371c–1) are each amended by adding at the
end of each such section the following new sub-
section:
‘‘(f) EXEMPTION FOR GUARANTEED DEPOSITORY IN-
STITUTIONS.—This section shall not apply to any guaran-
teed depository institution (as defined in section 101(a)(7)
of the Deposit Insurance Reform, Regulatory Moderniza-
tion, and Taxpayer Protection Act of 1993) or any affili-
ate of any such institution that is a guaranteed company
(as defined in section 101(a)(6) of the Deposit Insurance
Reform, Regulatory Modernization, and Taxpayer Protec-
tion Act of 1993).’’.
(h) EXEMPTION FROM LIMITATION
ON INVEST-
MENTS IN, OR LOANS ON, BANK PREMISES.—Section 24A
of the Federal Reserve Act (12 U.S.C. 371d) is amended
by adding at the end the following new sentence: ‘‘This
section shall not apply to any guaranteed depository insti-
tution (as defined in section 101(a)(7) of the Deposit In-
surance Reform, Regulatory Modernization, and Taxpayer
Protection Act of 1993).’’.
(i) EXEMPTION FROM LIMITATIONS ON BANKERS’
ACCEPTANCES.—Section 13(7) of the Federal Reserve Act
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(12 U.S.C. 372) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(I) EXEMPTION
FROM
LIMITA-
TIONS FOR GUARANTEED DEPOSITORY
INSTITUTIONS.—Subparagraphs (B),
(C), (D), (E), (F), and (H) shall not
apply to any guaranteed depository in-
stitution 
(as 
defined 
in 
section
101(a)(7) of the Deposit Insurance
Reform, Regulatory Modernization,
and Taxpayer Protection Act of
1993).’’.
(j) EXEMPTION FROM PURCHASING AND LENDING
LIMITS RELATING TO DIRECTORS AND OFFICERS.—Sec-
tion 22 of the Federal Reserve Act (12 U.S.C. 375, 376,
503, 375a, and 375b) is amended by inserting before sub-
section (d) the following new subsection:
‘‘(c) EXEMPTION FOR GUARANTEED DEPOSITORY IN-
STITUTIONS.—Subsections (d), (e), (g), and (h) shall not
apply to any guaranteed depository institution (as defined
in section 101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Protection Act
of 1993) or any affiliate of any such institution.’’.
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SEC. 203. AMENDMENTS RELATING TO SAVINGS ASSOCIA-
TIONS.
(a) 
GUARANTEED
SAVINGS
ASSOCIATION
DE-
FINED.—Section 2 of the Home Owners’ Loan Act (12
U.S.C. 1462) is amended by adding at the end the follow-
ing new paragraphs:
‘‘(10) GUARANTEED
SAVINGS
ASSOCIATION.—
The term ‘guaranteed savings association’ means a
savings association which is a guaranteed depository
institution (as defined in section 101(a)(7) of the
Deposit Insurance Reform, Regulatory Moderniza-
tion, and Taxpayer Protection Act of 1993).
‘‘(11) GUARANTEED FEDERAL SAVINGS ASSO-
CIATION.—The term ‘guaranteed Federal savings as-
sociation’ means a Federal savings association which
is a guaranteed depository institution (as defined in
section 101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Protection
Act of 1993).’’.
(b) EXEMPTION FROM EXAMINATION AND REGULA-
TION BY DIRECTOR OF THE OFFICE OF THRIFT SUPER-
VISION.—
(1) IN GENERAL.—Section 4(a) of the Home
Owners’ Loan Act (12 U.S.C. 1463(a)) is amended
by adding at the end the following new paragraph:
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‘‘(4) EXEMPTION
FOR
GUARANTEED
SAVINGS
ASSOCIATIONS.—The authority of the Director under
this subsection or subsection (b) or (c) to examine
any savings association or prescribe regulations ap-
plicable to savings associations shall not apply with
respect to any guaranteed savings association.’’.
(2) FEDERAL SAVINGS ASSOCIATIONS.—Section
5(a) of the Home Owners’ Loan Act (12 U.S.C.
1464(a)) is amended by adding at the end the fol-
lowing new sentence: ‘‘The authority of the Director
under the preceding sentence to prescribe regula-
tions to provide for the examination and regulation
of Federal savings associations shall not apply with
respect to the examination or regulation of any
guaranteed Federal savings association.’’.
(3) EXEMPTION FROM EXAMINATION FEE PRO-
VISIONS.—Section 9 of the Home Owners’ Loan Act
(12 U.S.C. 1467) is amended by adding at the end
the following new subsection:
‘‘(n) EXEMPTION FOR GUARANTEED SAVINGS ASSO-
CIATIONS.—This section and the authority of the Director
under this section shall not apply with respect to any guar-
anteed savings association.’’.
(c) EXCEPTIONS TO LIMITATIONS ON DEPOSIT AND
RELATED POWERS.—Section 5(b)(1) of the Home Own-
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HR 5227 IH
ers’ Loan Act (12 U.S.C. 1464(b)(1)) is amended by add-
ing at the end the following new subparagraph:
‘‘(G) SPECIAL
RULES
APPLICABLE
TO
GUARANTEED SAVINGS ASSOCIATIONS.—
‘‘(i) 
STATUTORY
AUTHORITY.—A
guaranteed Federal savings association
shall have the powers described in subpara-
graphs (C), (E), and (F) without regard to
the condition or limitation contained in
each such subparagraph relating to regula-
tions of the Director.
‘‘(ii) LIMITATION
ON
REGULATORY
AUTHORITY.—The exercise by a guaran-
teed Federal savings association of powers
established under subparagraph (A) or (D)
or the last sentence of subparagraph (B)
shall not be subject to any regulations pre-
scribed by the Director under such provi-
sion.
‘‘(iii) 
EXEMPTION.—A 
guaranteed
Federal savings association shall not be
subject to the first sentence of subpara-
graph (B).’’.
(d) EXCEPTIONS TO LIMITATIONS ON LOAN AND IN-
VESTMENT POWERS.—Section 5(c) of the Home Owners’
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Loan Act (12 U.S.C. 1464(c)) is amended by adding at
the end the following new paragraph:
‘‘(7) EXCEPTIONS FOR GUARANTEED SAVINGS
ASSOCIATIONS.—
‘‘(A) LIMITATION
ON
REGULATORY
AU-
THORITY.—The exercise by a guaranteed Fed-
eral savings association of powers established
under any provision of this subsection shall not
be subject to any regulations prescribed by the
Director under this subsection.
‘‘(B) 
EXEMPTION
FROM
MAXIMUM
AMOUNT LIMITATIONS.—A guaranteed Federal
savings association shall not be subject to any
limitation in this subsection on the outstanding
amount of loans or investments by the associa-
tion under any provision of this subsection,
without regard to whether such maximum
amount is expressed as a fixed dollar amount or
as a percentage of such association’s assets or
capital.’’.
(e) 
EXEMPTION
FROM
ENFORCEMENT
AND
CONSERVATORSHIP
AND RECEIVERSHIP PROVISIONS.—
Section 5(d) of the Home Owners’ Loan Act (12 U.S.C.
1464(d)) is amended by adding at the end the following
new paragraph:
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‘‘(7) EXEMPTION
FOR
GUARANTEED
SAVINGS
ASSOCIATIONS.—This subsection and the authority
of the Director under this subsection shall not apply
with respect to any guaranteed savings association.’’.
(f) EXEMPTION FROM FITNESS STANDARDS.—Sec-
tion 5(e) of the Home Owners’ Loan Act (12 U.S.C.
1464(e)) is amended by adding at the end the following
new sentence: ‘‘The preceding sentence shall not apply
with respect to any savings association which, at the time
the charter is granted, is a guaranteed depository institu-
tion (as defined in section 101(a)(7) of the Deposit Insur-
ance Reform, Regulatory Modernization, and Taxpayer
Protection Act of 1993) or is required to be a guaranteed
depository institution before such association accepts any
deposit.’’.
(g) EXEMPTION FROM REQUIREMENTS RELATING
TO SECURITY FOR DEPOSITS OF GOVERNMENT AGEN-
CIES.—Section 5(k) of the Home Owners’ Loan Act (12
U.S.C. 1464(k)) is amended by adding at the end the fol-
lowing new sentence: ‘‘A guaranteed savings association
shall not be required to give any security for deposits with
the savings association under this section or for the per-
formance of the association as fiscal agent.’’.
(h) EXEMPTION FROM MINIMUM CAPITAL REQUIRE-
MENTS.—Section 5(s) of the Home Owners’ Loan Act (12
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U.S.C. 1464(s)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(6) EXEMPTION
FOR
GUARANTEED
SAVINGS
ASSOCIATIONS.—This subsection and the authority
of the Director under this subsection shall not apply
with respect to any guaranteed savings association.’’.
(i) EXEMPTION FROM CAPITAL STANDARDS.—Sec-
tion 5(t)(1) of the Home Owners’ Loan Act (12 U.S.C.
1464(t)(1)) is amended by adding at the end the following
new subparagraph:
‘‘(E) EXEMPTION FOR GUARANTEED SAVINGS
ASSOCIATIONS.—This subsection and the authority
of the Director under this subsection shall not apply
with respect to any guaranteed savings association.’’.
(j) EXEMPTION FROM REQUIREMENT RELATING TO
LOANS TO ONE BORROWER.—Section 5(u) of the Home
Owners’ Loan Act (12 U.S.C. 1464(u)) is amended by
adding at the end the following new paragraph:
‘‘(4) EXEMPTION
FOR
GUARANTEED
SAVINGS
ASSOCIATIONS.—This subsection shall not apply with
respect to any guaranteed savings association.’’.
(k) EXEMPTION FROM REQUIREMENT RELATING TO
REPORTS
OF CONDITION.—Section 5(v) of the Home
Owners’ Loan Act (12 U.S.C. 1464(v)) is amended by
adding at the end the following new paragraph:
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‘‘(9) EXEMPTION
FOR
GUARANTEED
SAVINGS
ASSOCIATIONS.—This subsection shall not apply with
respect to any guaranteed savings association.’’.
(l) EXEMPTION FROM REQUIREMENT RELATING TO
LIQUID ASSETS.—Section 6 of the Home Owner’s Loan
Act (12 U.S.C. 1465) is amended by adding at the end
the following new subsection:
‘‘(g) EXEMPTION FOR GUARANTEED SAVINGS ASSO-
CIATIONS.—This section shall not apply with respect to
any guaranteed savings associations.’’.
(m) EXEMPTION FROM AFFILIATE TRANSACTION
AND LENDING LIMITS RELATING TO DIRECTORS AND OF-
FICERS.—Section 11 of the Home Owners’ Loan Act (12
U.S.C. 1468) is amended by adding at the end the follow-
ing new subsection:
‘‘(d) EXEMPTION FOR GUARANTEED SAVINGS ASSO-
CIATIONS.—This section shall not apply with respect to
any guaranteed savings association’’.
SEC. 204
AMENDMENTS RELATING TO SAVINGS AND LOAN
HOLDING COMPANIES.
(a) 
GUARANTEED
SAVINGS
ASSOCIATION
DE-
FINED.—Section 10(a)(1) of the Home Owners’ Loan Act
(12 U.S.C. 1467a(a)(1)) is amended by adding at the end
the following new subparagraph:
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‘‘(K) 
GUARANTEED
SAVINGS
ASSOCIA-
TION.—The term ‘guaranteed savings associa-
tion’ includes any savings association referred
to in subparagraph (A) which is a guaranteed
depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Pro-
tection Act of 1993).’’.
(b) EXEMPTION FROM EXAMINATION AND REPORT-
ING REQUIREMENT.—Section 10(b) of the Home Owners’
Loan Act (12 U.S.C. 1467a(b)) is amended by adding at
the end the following new paragraph:
‘‘(7) EXEMPTION FOR S&L HOLDING COMPANY
WHICH CONTROLS A GUARANTEED SAVINGS ASSOCIA-
TION.—Paragraphs (2), (3), and (4) and the author-
ity of the Director under any such paragraph shall
not apply with respect to any savings and loan hold-
ing company which controls a guaranteed savings as-
sociation and any subsidiary of such company.’’.
(c) COORDINATION
WITH
SECTION
11.—Section
10(d) of the Home Owners’ Loan Act (12 U.S.C.
1467a(d)) is amended by striking ‘‘Transaction’’ and in-
serting ‘‘Subject to section 11(d), transactions’’.
(d) EXEMPTION FROM REQUIREMENTS RELATING
TO DECLARATION OF DIVIDEND.—Section 10(f) of the
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Home Owners’ Loan Act (12 U.S.C. 1467a(f)) is amended
by adding at the end the following new sentence: ‘‘This
subsection shall not apply with respect to any savings and
loan company which controls a guaranteed savings asso-
ciation.’’.
(e) EXEMPTION FROM RESTRICTIONS ON HIGH-RISK
ACTIVITIES.—Section 10(p) of the Home Owners’ Loan
Act (12 U.S.C. 1467a(p)) is amended by adding at the
end the following new paragraph:
‘‘(3) EXEMPTION
FOR
PARENT
OF
GUARAN-
TEED SAVINGS ASSOCIATION.—This subsection shall
not apply with respect to any savings and loan com-
pany which controls a guaranteed savings associa-
tion.’’.
(f) NONAPPLICABILITY OF QUALIFIED STOCK ISSU-
ANCE PROVISIONS.—Section 10(q)(1)(A) of the Home
Owners’
Loan
Act
(12
U.S.C.
1467a(q)(1)(A))
is
amended—
(1) in clause (i), by inserting ‘‘which is not a
guaranteed 
savings 
association’’ 
after 
‘‘under-
capitalized savings association’’; and
(2) in clause (ii), by inserting ‘‘and does not
control a guaranteed savings association’’ after
‘‘controls an undercapitalized savings association’’.
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SEC. 205. AMENDMENTS RELATING TO THE FEDERAL DE-
POSIT INSURANCE CORPORATION.
(a) AMENDMENTS TO DEFINITIONS.—
(1) DEFINITIONS
RELATING
TO
DEPOSITORY
INSTITUTIONS.—Section 3(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(c)) is amended by
adding at the end the following new paragraphs:
‘‘(6) GUARANTEED
DEPOSITORY
INSTITUTION
NOT
INCLUDED.—Except as otherwise specifically
provided in any provision of this Act, the terms ‘de-
pository institution’ and ‘insured depository institu-
tion’ do not include any guaranteed depository insti-
tution.
‘‘(7) 
GUARANTEED
DEPOSITORY
INSTITU-
TION.—The term ‘guaranteed depository institution’
has the meaning given to such term in section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993.’’.
(2) DEFINITION RELATING TO BANKS.—Section
3(a) of the Federal Deposit Insurance Act (12
U.S.C. 1813(a)) is amended by adding at the end
the following new paragraph:
‘‘(5) GUARANTEED DEPOSITORY INSTITUTIONS
NOT
INCLUDED.—Except as otherwise specifically
provided in any provision of this Act, the terms
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‘bank’, ‘national bank’, ‘State bank’, ‘District bank’,
‘branch’, and ‘Federal branch’, whether or not any
such term appears in conjunction with the term ‘in-
sured’, ‘member’, or ‘nonmember’, do not include
any guaranteed depository institution.’’.
(3) DEFINITION RELATING TO SAVINGS ASSO-
CIATIONS.—Section 3(b) of the Federal Deposit In-
surance Act (12 U.S.C. 1813(b)) is amended by
adding at the end of the following new paragraph:
‘‘(4) GUARANTEE
DEPOSITORY
INSTITUTIONS
NOT
INCLUDED.—Except as otherwise specifically
provided in any provision of this Act, the terms ‘sav-
ings association’, ‘Federal savings association’, and
‘State savings association’, whether or not any such
term appears in conjunction with the term ‘insured’,
do not include any guaranteed depository institu-
tion.’’.
(4) DEFINITION
RELATING
TO
APPROPRIATE
FEDERAL
BANKING
AGENCY.—Section 3(q) of the
Federal Deposit Insurance Act (12 U.S.C. 1813(q))
is amended by adding before the last sentence the
following new paragraph:
‘‘(5) The Cross-Guarantee Regulation Corpora-
tion in the case of a guaranteed depository institu-
tion.’’.
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(b) PROHIBITION ON NEW INSURED DEPOSITORY IN-
STITUTIONS, BY CHARTER OR CONVERSION, AFTER EF-
FECTIVE DATE OF CROSS-GUARANTEE SYSTEM.—
(1) NO CONTINUATION OF INSURANCE IN CON-
NECTION
WITH
CONVERSIONS.—Section 4 of the
Federal Deposit Insurance Act (12 U.S.C. 1814) is
amended by adding at the end the following new
subsection:
‘‘(e) INAPPLICABILITY OF SUBSECTIONS (b), (c), AND
(d) AFTER EFFECTIVE DATE OF CROSS-GUARANTEE SYS-
TEM.—Subsections (b), (c), and (d) shall not apply as of
the effective date of the cross-guarantee system under sub-
section (a) of section 141 of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993, as published by the Cross-Guarantee Regula-
tion Corporation in the Federal Register pursuant to sub-
section (c) of such section.’’.
(2) NO NEW INSURANCE UNDER THE FEDERAL
DEPOSIT INSURANCE ACT.—Section 5 of the Federal
Deposit Insurance Act (12 U.S.C. 1815) is amended
by adding at the end the following new subsection:
‘‘(f) PROHIBITION
ON APPROVAL
OF INSURANCE
AFTER EFFECTIVE DATE OF CROSS-GUARANTEE SYS-
TEM.—No application for insurance under this section
may be approved by the Corporation on or after the date
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by which the Cross-Guarantee Regulation Corporation has
approved, under subsection (a) of section 141 of the De-
posit Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993, two hundred and fifty
cross-guarantee contracts described in subsection (a)(2) of
such section.’’.
(c) TERMINATION OF DEPOSIT INSURANCE OF GUAR-
ANTEED DEPOSITORY INSTITUTION.—Section 8(a) of the
Federal Deposit Insurance Act (12 U.S.C. 1818(a)) is
amended—
(1) by redesignating paragraph (10) as para-
graph (11); and
(2) by inserting after paragraph (9), the follow-
ing new paragraph:
‘‘(10) TERMINATION OF INSURANCE OF GUAR-
ANTEED DEPOSITORY INSTITUTION.—The status of
any insured depository institution as an insured de-
pository institution shall cease as of the date the in-
stitution becomes a guaranteed depository institu-
tion.’’.
(d) INELIGIBILITY
OF GUARANTEED DEPOSITORY
INSTITUTION
FOR DEPOSIT INSURANCE UNDER
THE
FEDERAL DEPOSIT INSURANCE ACT.—Section 5(a)(1) of
the Federal Deposit Insurance Act (12 U.S.C. 1815(a)(1))
is amended by striking ‘‘trust funds (as defined in section
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3(p)),’’ and inserting ‘‘trust funds (as defined in section
3(p)) and is not a guaranteed depository institution,’’.
(e) APPLICABILITY
OF INSURANCE LOGO PROVI-
SIONS.—Section 18(a) of the Federal Deposit Insurance
Act (12 U.S.C. 1828(a)) is amended by adding at the end
the following new paragraph:
‘‘(4) APPLICABILITY TO GUARANTEED INSTITU-
TIONS.—For purposes of this subsection, the terms
‘insured bank’ and ‘insured savings association’ shall
be deemed to include any bank (as defined in section
3(a) without regard to paragraph (5) of such sec-
tion) and any savings association (as defined in sec-
tion 3(b) without regard to paragraph (4) of such
section) which is a guaranteed depository institu-
tion.’’.
(f) GUARANTEED DEPOSITORY INSTITUTIONS NOT
EXEMPT FROM LIMITATION ON INSURANCE UNDERWRIT-
ING.—Section 24(b) of the Federal Deposit Insurance Act
(12 U.S.C. 1831a(b)) is amended by adding at the end
the following new paragraph:
‘‘(3) APPLICABILITY TO GUARANTEED DEPOSI-
TORY
INSTITUTIONS.—Notwithstanding 
section
3(a)(5), the term ‘insured State bank’ includes, for
purposes of this subsection, a State bank which is a
guaranteed depository institution.’’.
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SEC. 206. AMENDMENTS TO OTHER BANKING LAWS.
(a) EXEMPTION FROM DEPOSITORY INSTITUTION
MANAGEMENT INTERLOCKS ACT.—Section 205 of the De-
pository Institution Management Interlocks Act (12
U.S.C. 3204) is amended by adding at the end the follow-
ing new paragraph:
‘‘(10) 
GUARANTEED
DEPOSITORY
INSTITU-
TION.—Any guaranteed depository institution and
any affiliate of such institution.’’.
(b) EXEMPTION FROM REAL ESTATE APPRAISAL
REQUIREMENTS.—Section 1121(4) of the Financial Insti-
tutions Reform, Recovery, and Enforcement Act of 1989
(12 U.S.C. 3350(4)) is amended to read as follows:
‘‘(4) FEDERALLY
RELATED
TRANSACTION.—
The term ‘Federally related transaction’—
‘‘(A) means any real estate-related finan-
cial transaction which—
‘‘(i) a Federal financial institutions
regulatory agency or the Resolution Trust
Corporation engages in, contracts for, or
regulates;
‘‘(ii) requires the services of an ap-
praiser; and
‘‘(B) does not include any real estate-relat-
ed financial transaction which is regulated by a
Federal financial institutions regulatory agency
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solely by reason of the involvement of a guaran-
teed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Pro-
tection Act of 1993) in such transaction.’’.
(c) EXEMPTION FROM PAYMENT SYSTEM REQUIRE-
MENTS.—Subtitle A of title IV of the Federal Deposit In-
surance Corporation Improvement Act of 1991 (12 U.S.C.
4401 et seq.) is amended by adding at the end the follow-
ing new section:
‘‘SEC. 408. EXEMPTION FOR GUARANTEED DEPOSITORY IN-
STITUTIONS.
‘‘This subtitle shall not apply with respect to a depos-
itory institution which is a guaranteed depository institu-
tion (as defined in section 101(a)(7) of the Deposit Insur-
ance Reform, Regulatory Modernization, and Taxpayer
Protection Act of 1993).’’.
(d) EXEMPTION FROM THE INTERNATIONAL LEND-
ING SUPERVISION ACT OF 1983.—The last sentence of
section 903(2) of the International Lending Supervision
Act of 1983 (12 U.S.C. 3902(2)) is amended by inserting
‘‘or a guaranteed depository institution (as defined in sec-
tion 101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act of
1993)’’ before the period.
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TITLE III—AMENDMENTS TO TITLE 11,
UNITED STATES CODE
Subtitle A—Amendments to Chapter 1 of
Title 11
SEC. 301. DEFINITIONS.
Section 101 of title 11, United States Code, is
amended—
(a) by redesignating subsection (3) as sub-
section (29);
(b) by redesignating subsections (4)–(7) as sub-
sections (3)–(6);
(c) by adding new subsection (7)—
‘‘(7) ‘company’ means any corporation, partner-
ship, business trust, association, or similar organiza-
tion, but does not include a governmental unit;’’;
(d) by adding new subsection (11)—
‘‘(11) ‘cross-guarantee contract’ means a con-
tract which—
‘‘(A) is entered into between—
‘‘(i) one or more companies, at least
one of which is a depository institution;
and
‘‘(ii) a cross-guarantee syndicate;
‘‘(B) is approved by the regulation cor-
poration under section 123 of title I of this Act;