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insured depository institutions as of the date of enact-
ment of this Act. 
(3) CAPITAL REQUIREMENTS TO ADDRESS AC-
TIVITIES THAT POSE RISKS TO THE FINANCIAL SYS-
TEM.— 
(A) IN
GENERAL.—Subject to the rec-
ommendations of the Council, in accordance with 
section 120, the Federal banking agencies shall 
develop capital requirements applicable to all in-
stitutions covered by this section that address the 
risks that the activities of such institutions pose, 
not only to the institution engaging in the activ-
ity, but to other public and private stakeholders 
in the event of adverse performance, disruption, 
or failure of the institution or the activity. 
(B) CONTENT.—Such rules shall address, at 
a minimum, the risks arising from— 
(i) significant volumes of activity in 
derivatives, securitized products purchased 
and sold, financial guarantees purchased 
and sold, securities borrowing and lending, 
and repurchase agreements and reverse re-
purchase agreements; 
(ii) concentrations in assets for which 
the values presented in financial reports are
117 
† HR 4173 EAS 
based on models rather than historical cost 
or prices deriving from deep and liquid 2- 
way markets; and 
(iii) concentrations in market share for 
any activity that would substantially dis-
rupt financial markets if the institution is 
forced to unexpectedly cease the activity. 
TITLE II—ORDERLY 
LIQUIDATION AUTHORITY 
SEC. 201. DEFINITIONS. 
(a) IN GENERAL.—In this title, the following defini-
tions shall apply: 
(1) ADMINISTRATIVE
EXPENSES
OF
THE
RE-
CEIVER.—The term ‘‘administrative expenses of the 
receiver’’ includes— 
(A) the actual, necessary costs and expenses 
incurred by the Corporation as receiver for a 
covered financial company in liquidating a cov-
ered financial company; and 
(B) any obligations that the Corporation as 
receiver for a covered financial company deter-
mines are necessary and appropriate to facilitate 
the smooth and orderly liquidation of the covered 
financial company.
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† HR 4173 EAS 
(2) BANKRUPTCY CODE.—The term ‘‘Bankruptcy 
Code’’ means title 11, United States Code. 
(3) BRIDGE
FINANCIAL
COMPANY.—The term 
‘‘bridge financial company’’ means a new financial 
company organized by the Corporation in accordance 
with section 210(h) for the purpose of resolving a cov-
ered financial company. 
(4) CLAIM.—The term ‘‘claim’’ means any right 
of payment, whether or not such right is reduced to 
judgment, liquidated, unliquidated, fixed, contingent, 
matured, unmatured, disputed, undisputed, legal, eq-
uitable, secured, or unsecured. 
(5) COMPANY.—The term ‘‘company’’ has the 
same meaning as in section 2(b) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1841(b)), except 
that such term includes any company described in 
paragraph (11), the majority of the securities of 
which are owned by the United States or any State. 
(6) COVERED BROKER OR DEALER.—The term 
‘‘covered broker or dealer’’ means a covered financial 
company that is a broker or dealer that— 
(A) is registered with the Commission under 
section 15(b) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o(b)); and 
(B) is a member of SIPC.
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(7) COVERED
FINANCIAL
COMPANY.—The term 
‘‘covered financial company’’— 
(A) means a financial company for which 
a determination has been made under section 
203(b); and 
(B) does not include an insured depository 
institution. 
(8) COVERED SUBSIDIARY.—The term ‘‘covered 
subsidiary’’ means a subsidiary of a covered financial 
company, other than— 
(A) an insured depository institution; 
(B) an insurance company; or 
(C) a covered broker or dealer. 
(9) DEFINITIONS RELATING TO COVERED BRO-
KERS AND DEALERS.—The terms ‘‘customer’’, ‘‘cus-
tomer name securities’’, ‘‘customer property’’, and 
‘‘net equity’’ in the context of a covered broker or 
dealer, have the same meanings as in section 16 of the 
Securities Investor Protection Act of 1970 (15 U.S.C. 
78lll). 
(10) FINANCIAL COMPANY.—The term ‘‘financial 
company’’ means any company that— 
(A) is incorporated or organized under any 
provision of Federal law or the laws of any 
State;
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† HR 4173 EAS 
(B) is— 
(i) a bank holding company, as defined 
in section 2(a) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1841(a)), and 
including any company described in para-
graph (5); 
(ii) a nonbank financial company su-
pervised by the Board of Governors; 
(iii) any company that is predomi-
nantly engaged in activities that the Board 
of Governors has determined are financial 
in nature or incidental thereto for purposes 
of section 4(k) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1843(k)) other 
than a company described in clause (i) or 
(ii); or 
(iv) any subsidiary of any company 
described in any of clauses (i) through (iii) 
that is predominantly engaged in activities 
that the Board of Governors has determined 
are financial in nature or incidental thereto 
for purposes of section 4(k) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 
1843(k)) (other than a subsidiary that is an
121 
† HR 4173 EAS 
insured depository institution or an insur-
ance company); and 
(C) is not a Farm Credit System institu-
tion chartered under and subject to the provi-
sions of the Farm Credit Act of 1971, as amend-
ed (12 U.S.C. 2001 et seq.), a governmental enti-
ty, or a regulated entity, as defined under sec-
tion 1303 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 
U.S.C. 4502(20)). 
(11) FUND.—The term ‘‘Fund’’ means the Or-
derly Liquidation Fund established under section 
210(n). 
(12) INSURANCE
COMPANY.—The term ‘‘insur-
ance company’’ means any entity that is— 
(A) engaged in the business of insurance; 
(B) subject to regulation by a State insur-
ance regulator; and 
(C) covered by a State law that is designed 
to specifically deal with the rehabilitation, liq-
uidation, or insolvency of an insurance com-
pany. 
(13) NONBANK FINANCIAL COMPANY.—The term 
‘‘nonbank financial company’’ has the same meaning 
as in section 102(a)(4)(C).
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† HR 4173 EAS 
(14) NONBANK FINANCIAL COMPANY SUPERVISED 
BY THE BOARD OF GOVERNORS.—The term ‘‘nonbank 
financial company supervised by the Board of Gov-
ernors’’ has the same meaning as in section 
102(a)(3)(D). 
(15) COURT.—The term ‘‘Court’’ means the 
United States District Court for the District of Co-
lumbia. 
(16) SIPC.—The term ‘‘SIPC’’ means the Secu-
rities Investor Protection Corporation. 
(b) DEFINITIONAL CRITERIA.—For purpose of the defi-
nition of the term ‘‘financial company’’ under subsection 
(a)(10), no company shall be deemed to be predominantly 
engaged in activities that the Board of Governors has deter-
mined are financial in nature or incidental thereto for pur-
poses of section 4(k) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1843(k)), if the consolidated revenues of 
such company from such activities constitute less than 85 
percent of the total consolidated revenues of such company, 
as the Corporation, in consultation with the Secretary, shall 
establish by regulation. In determining whether a company 
is a financial company under this title, the consolidated 
revenues derived from the ownership or control of a deposi-
tory institution shall be included.
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† HR 4173 EAS 
SEC. 202. JUDICIAL REVIEW. 
(a) COMMENCEMENT OF ORDERLY LIQUIDATION.— 
(1) PETITION TO DISTRICT COURT.— 
(A) DISTRICT COURT REVIEW.— 
(i) PETITION
TO
DISTRICT
COURT.— 
Subsequent to a determination by the Sec-
retary under section 203 that a financial 
company satisfies the criteria in section 
203(b), the Secretary shall notify the Cor-
poration and the covered financial com-
pany. If the board of directors (or body per-
forming similar functions) of the covered fi-
nancial company acquiesces or consents to 
the appointment of the Corporation as a re-
ceiver, the Secretary shall appoint the Cor-
poration as a receiver. If the board of direc-
tors (or body performing similar functions) 
of the covered financial company does not 
acquiesce or consent to the appointment of 
the Corporation as receiver, the Secretary 
shall petition the United States District 
Court for the District of Columbia for an 
order authorizing the Secretary to appoint 
the Corporation as a receiver. 
(ii) FORM AND CONTENT OF ORDER.— 
The Secretary shall present all relevant
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† HR 4173 EAS 
findings and the recommendation made 
pursuant to section 203(a) to the Court. The 
petition shall be filed under seal. 
(iii) DETERMINATION.—On a strictly 
confidential basis, and without any prior 
public disclosure, the Court, after notice to 
the covered financial company and a hear-
ing in which the covered financial company 
may oppose the petition, shall determine 
whether the determination of the Secretary 
that the covered financial company is in de-
fault or in danger of default and satisfies 
the definition of a financial company under 
section 201(10) is arbitrary and capricious. 
(iv) ISSUANCE
OF
ORDER.—If the 
Court determines that the determination of 
the Secretary that the covered financial 
company is in default or in danger of de-
fault and satisfies the definition of a finan-
cial company under section 201(10)— 
(I) is not arbitrary and capri-
cious, the Court shall issue an order 
immediately authorizing the Secretary 
to appoint the Corporation as receiver 
of the covered financial company; or
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† HR 4173 EAS 
(II) is arbitrary and capricious, 
the Court shall immediately provide to 
the Secretary a written statement of 
each reason supporting its determina-
tion, and afford the Secretary an im-
mediate opportunity to amend and 
refile the petition under clause (i). 
(v) PETITION GRANTED BY OPERATION 
OF LAW.—If the Court does not make a de-
termination within 24 hours of receipt of 
the petition— 
(I) the petition shall be granted 
by operation of law; 
(II) the Secretary shall appoint 
the Corporation as receiver; and 
(III) liquidation under this title 
shall automatically and without fur-
ther notice or action be commenced 
and the Corporation may immediately 
take all actions authorized under this 
title. 
(B) EFFECT OF DETERMINATION.—The de-
termination of the Court under subparagraph 
(A) shall be final, and shall be subject to appeal 
only in accordance with paragraph (2). The de-
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† HR 4173 EAS 
cision shall not be subject to any stay or injunc-
tion pending appeal. Upon conclusion of its pro-
ceedings under subparagraph (A), the Court 
shall provide immediately for the record a writ-
ten statement of each reason supporting the deci-
sion of the Court, and shall provide copies there-
of to the Secretary and the covered financial 
company. 
(C) CRIMINAL PENALTIES.—A person who 
recklessly discloses a determination of the Sec-
retary under section 203(b) or a petition of the 
Secretary under subparagraph (A), or the pend-
ency of court proceedings as provided for under 
subparagraph (A), shall be fined not more than 
$250,000, or imprisoned for not more than 5 
years, or both. 
(2) APPEAL
OF
DECISIONS
OF
THE
DISTRICT 
COURT.— 
(A) APPEAL TO COURT OF APPEALS.— 
(i) IN
GENERAL.—Subject to clause 
(ii), the United States Court of Appeals for 
the District of Columbia Circuit shall have 
jurisdiction of an appeal of a final decision 
of the Court filed by the Secretary or a cov-
ered financial company, through its board
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† HR 4173 EAS 
of 
directors, 
notwithstanding 
section 
210(a)(1)(A)(i), not later than 30 days after 
the date on which the decision of the Court 
is rendered or deemed rendered under this 
subsection. 
(ii) CONDITION
OF
JURISDICTION.— 
The Court of Appeals shall have jurisdiction 
of an appeal by a covered financial com-
pany only if the covered financial company 
did not acquiesce or consent to the appoint-
ment of a receiver by the Secretary under 
paragraph (1)(A). 
(iii) EXPEDITION.—The Court of Ap-
peals shall consider any appeal under this 
subparagraph on an expedited basis. 
(iv) SCOPE OF REVIEW.—For an ap-
peal taken under this subparagraph, review 
shall be limited to whether the determina-
tion of the Secretary that a covered finan-
cial company is in default or in danger of 
default and satisfies the definition of a fi-
nancial company under section 201(10) is 
arbitrary and capricious. 
(B) APPEAL TO THE SUPREME COURT.—
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† HR 4173 EAS 
(i) IN GENERAL.—A petition for a writ 
of certiorari to review a decision of the 
Court of Appeals under subparagraph (A) 
may be filed by the Secretary or the covered 
financial company, through its board of di-
rectors, 
notwithstanding 
section 
210(a)(1)(A)(i), with the Supreme Court of 
the United States, not later than 30 days 
after the date of the final decision of the 
Court of Appeals, and the Supreme Court 
shall have discretionary jurisdiction to re-
view such decision. 
(ii) WRITTEN
STATEMENT.—In the 
event of a petition under clause (i), the 
Court of Appeals shall immediately provide 
for the record a written statement of each 
reason for its decision. 
(iii) 
EXPEDITION.—The 
Supreme 
Court shall consider any petition under this 
subparagraph on an expedited basis. 
(iv) SCOPE
OF
REVIEW.—Review by 
the Supreme Court under this subparagraph 
shall be limited to whether the determina-
tion of the Secretary that the covered finan-
cial company is in default or in danger of
129 
† HR 4173 EAS 
default and satisfies the definition of a fi-
nancial company under section 201(10) is 
arbitrary and capricious. 
(b) ESTABLISHMENT AND TRANSMITTAL OF RULES 
AND PROCEDURES.— 
(1) IN GENERAL.—Not later than 6 months after 
the date of enactment of this Act, the Court shall es-
tablish such rules and procedures as may be necessary 
to ensure the orderly conduct of proceedings, includ-
ing rules and procedures to ensure that the 24-hour 
deadline is met and that the Secretary shall have an 
ongoing opportunity to amend and refile petitions 
under subsection (a)(1). 
(2) PUBLICATION
OF
RULES.—The rules and 
procedures established under paragraph (1), and any 
modifications of such rules and procedures, shall be 
recorded and shall be transmitted to— 
(A) the Committee on the Judiciary of the 
Senate; 
(B) the Committee on Banking, Housing, 
and Urban Affairs of the Senate; 
(C) the Committee on the Judiciary of the 
House of Representatives; and 
(D) the Committee on Financial Services of 
the House of Representatives.
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† HR 4173 EAS 
(c) PROVISIONS APPLICABLE TO FINANCIAL COMPA-
NIES.— 
(1) BANKRUPTCY CODE.—Except as provided in 
this subsection, the provisions of the Bankruptcy Code 
and rules issued thereunder, and not the provisions of 
this title, shall apply to financial companies that are 
not covered financial companies for which the Cor-
poration has been appointed as receiver. 
(2) THIS
TITLE.—The provisions of this title 
shall exclusively apply to and govern all matters re-
lating to covered financial companies for which the 
Corporation is appointed as receiver, and no provi-
sions of the Bankruptcy Code or the rules issued 
thereunder shall apply in such cases. 
(d) TIME LIMIT ON RECEIVERSHIP AUTHORITY.— 
(1) BASELINE PERIOD.—Any appointment of the 
Corporation as receiver under this section shall termi-
nate at the end of the 3-year period beginning on the 
date on which such appointment is made. 
(2) EXTENSION OF TIME LIMIT.—The time limit 
established in paragraph (1) may be extended by the 
Corporation for up to 1 additional year, if the Chair-
person of the Corporation determines and certifies in 
writing to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on
131 
† HR 4173 EAS 
Financial Services of the House of Representatives 
that continuation of the receivership is necessary— 
(A) to— 
(i) maximize the net present value re-
turn from the sale or other disposition of 
the assets of the covered financial company; 
or 
(ii) minimize the amount of loss real-
ized upon the sale or other disposition of the 
assets of the covered financial company; and 
(B) to protect the stability of the financial 
system of the United States. 
(3) SECOND EXTENSION OF TIME LIMIT.— 
(A) IN
GENERAL.—The time limit under 
this subsection, as extended under paragraph (2), 
may be extended for up to 1 additional year, if 
the Chairperson of the Corporation, with the con-
currence of the Secretary, submits the certifi-
cations described in paragraph (2). 
(B) ADDITIONAL REPORT REQUIRED.—Not 
later than 30 days after the date of commence-
ment of the extension under subparagraph (A), 
the Corporation shall submit a report to the 
Committee on Banking, Housing, and Urban Af-
fairs of the Senate and the Committee on Finan-
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† HR 4173 EAS 
cial Services of the House of Representatives de-
scribing the need for the extension and the spe-
cific plan of the Corporation to conclude the re-
ceivership before the end of the second extension. 
(4) ONGOING LITIGATION.—The time limit under 
this subsection, as extended under paragraph (3), 
may be further extended solely for the purpose of com-
pleting ongoing litigation in which the Corporation 
as receiver is a party, provided that the appointment 
of the Corporation as receiver shall terminate not 
later than 90 days after the date of completion of such 
litigation, if— 
(A) the Council determines that the Cor-
poration used its best efforts to conclude the re-
ceivership in accordance with its plan before the 
end of the time limit described in paragraph (3); 
(B) the Council determines that the comple-
tion of longer-term responsibilities in the form of 
ongoing litigation justifies the need for an exten-
sion; and 
(C) the Corporation submits a report ap-
proved by the Council not later than 30 days 
after the date of the determinations by the Coun-
cil under subparagraphs (A) and (B) to the 
Committee on Banking, Housing, and Urban Af-
133 
† HR 4173 EAS 
fairs of the Senate and the Committee on Finan-
cial Services of the House of Representatives, de-
scribing— 
(i) the ongoing litigation justifying the 
need for an extension; and 
(ii) the specific plan of the Corporation 
to complete the litigation and conclude the 
receivership. 
(5) REGULATIONS.—The Corporation may issue 
regulations governing the termination of receiverships 
under this title. 
(6) NO LIABILITY.—The Corporation and the De-
posit Insurance Fund shall not be liable for unre-
solved claims arising from the receivership after the 
termination of the receivership. 
(e) STUDY OF BANKRUPTCY AND ORDERLY LIQUIDA-
TION PROCESS FOR FINANCIAL COMPANIES.— 
(1) STUDY.— 
(A) IN GENERAL.—The Administrative Of-
fice of the United States Courts and the Comp-
troller General of the United States shall each 
monitor the activities of the Court, and each 
such Office shall conduct separate studies regard-
ing the bankruptcy and orderly liquidation proc-
135 
† HR 4173 EAS 
the Judiciary of the House of Representatives sepa-
rate reports summarizing the results of the studies 
conducted under paragraph (1). 
(f) STUDY OF INTERNATIONAL COORDINATION RELAT-
ING TO BANKRUPTCY PROCESS FOR FINANCIAL COMPA-
NIES.— 
(1) STUDY.— 
(A) IN GENERAL.—The Comptroller General 
of the United States shall conduct a study re-
garding international coordination relating to 
the orderly liquidation of financial companies 
under the Bankruptcy Code. 
(B) ISSUES
TO
BE
STUDIED.—In con-
ducting the study under subparagraph (A), the 
Comptroller General of the United States shall 
evaluate, with respect to the bankruptcy process 
for financial companies— 
(i) the extent to which international 
coordination currently exists; 
(ii) current mechanisms and structures 
for facilitating international cooperation; 
(iii) barriers to effective international 
coordination; and 
(iv) ways to increase and make more 
effective international coordination.
136 
† HR 4173 EAS 
(2) REPORT.—Not later than 1 year after the 
date of enactment of this Act, the Comptroller General 
of the United States shall submit to the Committee on 
Banking, Housing, and Urban Affairs and the Com-
mittee on the Judiciary of the Senate and the Com-
mittee on Financial Services and the Committee on 
the Judiciary of the House of Representatives and the 
Secretary a report summarizing the results of the 
study conducted under paragraph (1). 
(g) STUDY OF PROMPT CORRECTIVE ACTION IMPLE-
MENTATION BY THE APPROPRIATE FEDERAL AGENCIES.— 
(1) STUDY.—The Comptroller General of the 
United States shall conduct a study regarding the im-
plementation of prompt corrective action by the ap-
propriate Federal banking agencies. 
(2) ISSUES TO BE STUDIED.—In conducting the 
study under paragraph (1), the Comptroller General 
shall evaluate— 
(A) the effectiveness of implementation of 
prompt corrective action by the appropriate Fed-
eral banking agencies and the resolution of in-
sured depository institutions by the Corporation; 
and 
(B) ways to make prompt corrective action 
a more effective tool to resolve the insured deposi-
137 
† HR 4173 EAS 
tory institutions at the least possible long-term 
cost to the Deposit Insurance Fund. 
(3) REPORT
TO
COUNCIL.—Not later than 1 
years after the date of enactment of this Act, the 
Comptroller General shall submit a report to the 
Council on the results of the study conducted under 
this subsection. 
(4) COUNCIL
REPORT
OF
ACTION.—Not later 
than 6 months after the date of receipt of the report 
from the Comptroller General under paragraph (3), 
the Council shall submit a report to the Committee on 
Banking, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the 
House of Representatives on actions taken in response 
to the report, including any recommendations made 
to the Federal primary financial regulatory agencies 
under section 120. 
SEC. 203. SYSTEMIC RISK DETERMINATION. 
(a) WRITTEN RECOMMENDATION
AND DETERMINA-
TION.— 
(1) VOTE REQUIRED.— 
(A) IN GENERAL.—On their own initiative, 
or at the request of the Secretary, the Corpora-
tion and the Board of Governors shall consider 
whether to make a written recommendation de-
138 
† HR 4173 EAS 
scribed in paragraph (2) with respect to whether 
the Secretary should appoint the Corporation as 
receiver for a financial company. Such rec-
ommendation shall be made upon a vote of not 
fewer than 2⁄3 of the members of the Board of 
Governors then serving and 2⁄3 of the members of 
the board of directors of the Corporation then 
serving. 
(B) CASES INVOLVING COVERED BROKERS 
OR DEALERS.—In the case of a covered broker or 
dealer, or in which the largest United States sub-
sidiary (as measured by total assets as of the end 
of the previous calendar quarter) of a financial 
company is a covered broker or dealer, the Com-
mission and the Board of Governors, at the re-
quest of the Secretary, or on their own initiative, 
shall consider whether to make the written rec-
ommendation described in paragraph (2) with 
respect to the financial company. Subject to the 
requirements in paragraph (2), such rec-
ommendation shall be made upon a vote of not 
fewer than 2⁄3 of the members of the Board of 
Governors then serving and the members of the 
Commission then serving, and in consultation 
with the Corporation.
139 
† HR 4173 EAS 
(2) RECOMMENDATION REQUIRED.—Any written 
recommendation pursuant to paragraph (1) shall con-
tain— 
(A) an evaluation of whether the financial 
company is in default or in danger of default; 
(B) a description of the effect that the de-
fault of the financial company would have on fi-
nancial stability in the United States; 
(C) a recommendation regarding the nature 
and the extent of actions to be taken under this 
title regarding the financial company; 
(D) an evaluation of the likelihood of a pri-
vate sector alternative to prevent the default of 
the financial company; 
(E) an evaluation of why a case under the 
Bankruptcy Code is not appropriate for the fi-
nancial company; 
(F) an evaluation of the effects on creditors, 
counterparties, and shareholders of the financial 
company and other market participants; and 
(G) an evaluation of whether the company 
satisfies the definition of a financial company 
under section 201. 
(b) DETERMINATION BY THE SECRETARY.—Notwith-
standing any other provision of Federal or State law, the
140 
† HR 4173 EAS 
Secretary shall take action in accordance with section 
202(a)(1)(A), if, upon the written recommendation under 
subsection (a), the Secretary (in consultation with the 
President) determines that— 
(1) the financial company is in default or in 
danger of default; 
(2) the failure of the financial company and its 
resolution under otherwise applicable Federal or State 
law would have serious adverse effects on financial 
stability in the United States; 
(3) no viable private sector alternative is avail-
able to prevent the default of the financial company; 
(4) any effect on the claims or interests of credi-
tors, counterparties, and shareholders of the financial 
company and other market participants as a result of 
actions to be taken under this title is appropriate, 
given the impact that any action taken under this 
title would have on financial stability in the United 
States; 
(5) any action under section 204 would avoid or 
mitigate such adverse effects, taking into consider-
ation the effectiveness of the action in mitigating po-
tential adverse effects on the financial system, the cost 
to the general fund of the Treasury, and the potential 
to increase excessive risk taking on the part of credi-
141 
† HR 4173 EAS 
tors, counterparties, and shareholders in the financial 
company; 
(6) a Federal regulatory agency has ordered the 
financial company to convert all of its convertible 
debt instruments that are subject to the regulatory 
order; and 
(7) the company satisfies the definition of a fi-
nancial company under section 201. 
(c) DOCUMENTATION AND REVIEW.— 
(1) IN GENERAL.—The Secretary shall— 
(A) document any determination under sub-
section (b); 
(B) retain the documentation for review 
under paragraph (2); and 
(C) notify the covered financial company 
and the Corporation of such determination. 
(2) REPORT TO CONGRESS.—Not later than 24 
hours after the date of appointment of the Corpora-
tion as receiver for a covered financial company, the 
Secretary shall provide written notice of the rec-
ommendations and determinations reached in accord-
ance with subsections (a) and (b) to the Majority 
Leader and the Minority Leader of the Senate and the 
Speaker and the Minority Leader of the House of 
Representatives, the Committee on Banking, Housing,
142 
† HR 4173 EAS 
and Urban Affairs of the Senate, and the Committee 
on Financial Services of the House of Representatives, 
which shall consist of a summary of the basis for the 
determination, including, to the extent available at 
the time of the determination— 
(A) the size and financial condition of the 
covered financial company; 
(B) the sources of capital and credit sup-
port that were available to the covered financial 
company; 
(C) the operations of the covered financial 
company that could have had a significant im-
pact on financial stability, markets, or both; 
(D) identification of the banks and finan-
cial companies which may be able to provide the 
services offered by the covered financial com-
pany; 
(E) any potential international ramifica-
tions of resolution of the covered financial com-
pany under other applicable insolvency law; 
(F) an estimate of the potential effect of the 
resolution of the covered financial company 
under other applicable insolvency law on the fi-
nancial stability of the United States;
143 
† HR 4173 EAS 
(G) the potential effect of the appointment 
of a receiver by the Secretary on consumers; 
(H) the potential effect of the appointment 
of a receiver by the Secretary on the financial 
system, financial markets, and banks and other 
financial companies; and 
(I) whether resolution of the covered finan-
cial company under other applicable insolvency 
law would cause banks or other financial compa-
nies to experience severe liquidity distress. 
(3) REPORTS TO CONGRESS AND THE PUBLIC.— 
(A) IN GENERAL.—Not later than 60 days 
after the date of appointment of the Corporation 
as receiver for a covered financial company, the 
Corporation shall file a report with the Com-
mittee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial 
Services of the House of Representatives— 
(i) setting forth information on the fi-
nancial condition of the covered financial 
company as of the date of the appointment, 
including a description of its assets and li-
abilities;
144 
† HR 4173 EAS 
(ii) describing the plan of, and actions 
taken by, the Corporation to wind down the 
covered financial company; 
(iii) explaining each instance in which 
the Corporation waived any applicable re-
quirements of part 366 of title 12, Code of 
Federal Regulations (or any successor there-
to) with respect to conflicts of interest by 
any person in the private sector who was 
retained to provide services to the Corpora-
tion in connection with such receivership; 
(iv) describing the reasons for the pro-
vision of any funding to the receivership out 
of the Fund; 
(v) setting forth the expected costs of 
the orderly liquidation of the covered finan-
cial company; 
(vi) setting forth the identity of any 
claimant that is treated in a manner dif-
ferent from other similarly situated claim-
ants under subsection (b)(4), (d)(4), or 
(h)(5)(E), the amount of any additional 
payment to such claimant under subsection 
(d)(4), and the reason for any such action; 
and
145 
† HR 4173 EAS 
(vii) which report the Corporation 
shall publish on an online website main-
tained by the Corporation, subject to main-
taining appropriate confidentiality. 
(B) AMENDMENTS.—The Corporation shall, 
on a timely basis, not less frequently than quar-
terly, amend or revise and resubmit the reports 
prepared under this paragraph, as necessary. 
(C) CONGRESSIONAL TESTIMONY.—The Cor-
poration and the primary financial regulatory 
agency, if any, of the financial company for 
which the Corporation was appointed receiver 
under this title shall appear before Congress, if 
requested, not later than 30 days after the date 
on which the Corporation first files the reports 
required under subparagraph (A). 
(4) DEFAULT OR IN DANGER OF DEFAULT.—For 
purposes of this title, a financial company shall be 
considered to be in default or in danger of default if, 
as determined in accordance with subsection (b)— 
(A) a case has been, or likely will promptly 
be, commenced with respect to the financial com-
pany under the Bankruptcy Code; 
(B) the financial company has incurred, or 
is likely to incur, losses that will deplete all or
147 
† HR 4173 EAS 
holders, taking into account the impact any ac-
tion under this title would have on financial sta-
bility in the United States, including whether 
the rights of such parties will be disrupted. 
(d) CORPORATION POLICIES AND PROCEDURES.—As 
soon as is practicable after the date of enactment of this 
Act, the Corporation shall establish policies and procedures 
that are acceptable to the Secretary governing the use of 
funds available to the Corporation to carry out this title, 
including the terms and conditions for the provision and 
use of funds under sections 204(d), 210(h)(2)(G)(iv), and 
210(h)(9). 
(e) TREATMENT OF INSURANCE COMPANIES AND IN-
SURANCE COMPANY SUBSIDIARIES.— 
(1) IN
GENERAL.—Notwithstanding subsection 
(b), if an insurance company is a covered financial 
company or a subsidiary or affiliate of a covered fi-
nancial company, the liquidation or rehabilitation of 
such insurance company, and any subsidiary or affil-
iate of such company that is not excepted under para-
graph (2), shall be conducted as provided under such 
State law. 
(2) EXCEPTION FOR SUBSIDIARIES AND AFFILI-
ATES.—The requirement of paragraph (1) shall not 
apply with respect to any subsidiary or affiliate of an
148 
† HR 4173 EAS 
insurance company that is not itself an insurance 
company. 
(3) 
BACKUP
AUTHORITY.—Notwithstanding 
paragraph (1), with respect to a covered financial 
company described in paragraph (1), if, after the end 
of the 60-day period beginning on the date on which 
a determination is made under section 202(a) with 
respect to such company, the appropriate regulatory 
agency has not filed the appropriate judicial action 
in the appropriate State court to place such company 
into orderly liquidation under the laws and require-
ments of the State, the Corporation shall have the au-
thority to stand in the place of the appropriate regu-
latory agency and file the appropriate judicial action 
in the appropriate State court to place such company 
into orderly liquidation under the laws and require-
ments of the State. 
SEC. 204. ORDERLY LIQUIDATION. 
(a) PURPOSE OF ORDERLY LIQUIDATION AUTHOR-
ITY.—It is the purpose of this title to provide the necessary 
authority to liquidate failing financial companies that pose 
a significant risk to the financial stability of the United 
States in a manner that mitigates such risk and minimizes 
moral hazard. The authority provided in this title shall be
149 
† HR 4173 EAS 
exercised in the manner that best fulfills such purpose, so 
that— 
(1) creditors and shareholders will bear the losses 
of the financial company; 
(2) management responsible for the condition of 
the financial company will not be retained; and 
(3) the Corporation and other appropriate agen-
cies will take all steps necessary and appropriate to 
assure that all parties, including management and 
third parties, having responsibility for the condition 
of the financial company bear losses consistent with 
their responsibility, including actions for damages, 
restitution, and recoupment of compensation and 
other gains not compatible with such responsibility. 
(b) CORPORATION AS RECEIVER.—Upon the appoint-
ment of the Corporation under section 202, the Corporation 
shall act as the receiver for the covered financial company, 
with all of the rights and obligations set forth in this title. 
(c) CONSULTATION.—The Corporation, as receiver— 
(1) shall consult with the primary financial reg-
ulatory agency or agencies of the covered financial 
company and its covered subsidiaries for purposes of 
ensuring an orderly liquidation of the covered finan-
cial company;
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† HR 4173 EAS 
(2) may consult with, or under subsection 
(a)(1)(B)(v) or (a)(1)(L) of section 210, acquire the 
services of, any outside experts, as appropriate to in-
form and aid the Corporation in the orderly liquida-
tion process; 
(3) shall consult with the primary financial reg-
ulatory agency or agencies of any subsidiaries of the 
covered financial company that are not covered sub-
sidiaries, and coordinate with such regulators regard-
ing the treatment of such solvent subsidiaries and the 
separate resolution of any such insolvent subsidiaries 
under other governmental authority, as appropriate; 
and 
(4) shall consult with the Commission and the 
Securities Investor Protection Corporation in the case 
of any covered financial company for which the Cor-
poration has been appointed as receiver that is a 
broker or dealer registered with the Commission under 
section 15(b) of the Securities Exchange Act of 1934 
(15 U.S.C. 78o(b)) and is a member of the Securities 
Investor Protection Corporation, for the purpose of 
determining whether to transfer to a bridge financial 
company organized by the Corporation as receiver, 
without consent of any customer, customer accounts of 
the covered financial company.
151 
† HR 4173 EAS 
(d) FUNDING FOR ORDERLY LIQUIDATION.—Upon its 
appointment as receiver for a covered financial company, 
and thereafter as the Corporation may, in its discretion, 
determine to be necessary or appropriate, the Corporation 
may make available to the receivership, subject to the condi-
tions set forth in section 206 and subject to the plan de-
scribed in section 210(n)(11), funds for the orderly liquida-
tion of the covered financial company. All funds provided 
by the Corporation under this subsection shall have a pri-
ority of claims under subparagraph (A) or (B) of section 
210(b)(1), as applicable, including funds used for— 
(1) making loans to, or purchasing any debt ob-
ligation of, the covered financial company or any cov-
ered subsidiary; 
(2) purchasing or guaranteeing against loss the 
assets of the covered financial company or any cov-
ered subsidiary, directly or through an entity estab-
lished by the Corporation for such purpose; 
(3) assuming or guaranteeing the obligations of 
the covered financial company or any covered sub-
sidiary to 1 or more third parties; 
(4) taking a lien on any or all assets of the cov-
ered financial company or any covered subsidiary, 
including a first priority lien on all unencumbered 
assets of the covered financial company or any cov-
152 
† HR 4173 EAS 
ered subsidiary to secure repayment of any trans-
actions conducted under this subsection; 
(5) selling or transferring all, or any part, of 
such acquired assets, liabilities, or obligations of the 
covered financial company or any covered subsidiary; 
and 
(6) making payments pursuant to subsections 
(b)(4), (d)(4), and (h)(5)(E) of section 210. 
SEC. 205. ORDERLY LIQUIDATION OF COVERED BROKERS 
AND DEALERS. 
(a) APPOINTMENT OF SIPC AS TRUSTEE FOR PROTEC-
TION OF CUSTOMER SECURITIES AND PROPERTY.—Upon 
the appointment of the Corporation as receiver for any cov-
ered broker or dealer, the Corporation shall appoint, with-
out any need for court approval, the Securities Investor 
Protection Corporation to act as trustee for liquidation 
under the Securities Investor Protection Act of 1970 (15 
U.S.C. 78aaa et seq.) of the covered broker or dealer. 
(b) POWERS AND DUTIES OF SIPC.— 
(1) IN GENERAL.—Except as provided in this 
section, upon its appointment as trustee for the liq-
uidation of a covered broker or dealer, SIPC shall 
have all of the powers and duties provided by the Se-
curities Investor Protection Act of 1970 (15 U.S.C. 
78aaa et seq.), including, without limitation, all
153 
† HR 4173 EAS 
rights of action against third parties, but shall have 
no powers or duties with respect to assets and liabil-
ities transferred by the Corporation from the covered 
broker or dealer to any bridge financial company es-
tablished in accordance with this title. 
(2) LIMITATION OF POWERS.—The exercise by 
SIPC of powers and functions as trustee under sub-
section (a) shall not impair or impede the exercise of 
the powers and duties of the Corporation with regard 
to— 
(A) any action, except as otherwise provided 
in this title— 
(i) to make funds available under sec-
tion 204(d); 
(ii) to organize, establish, operate, or 
terminate any bridge financial company; 
(iii) to transfer assets and liabilities; 
(iv) to enforce or repudiate contracts; 
or 
(v) to take any other action relating to 
such bridge financial company under sec-
tion 210; or 
(B) determining claims under subsection 
(d).
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† HR 4173 EAS 
(3) QUALIFIED
FINANCIAL
CONTRACTS.—Not-
withstanding any provision of the Securities Investor 
Protection Act of 1970 to the contrary (including sec-
tion 
5(b)(2)(C) 
of 
that 
Act 
(15 
U.S.C. 
78eee(b)(2)(C))), the rights and obligations of any 
party to a qualified financial contract (as that term 
is defined in section 210(c)(8)) to which a covered 
broker or dealer described in subsection (a) is a party 
shall be governed exclusively by section 210, including 
the limitations and restrictions contained in section 
210(c)(10)(B). 
(c) LIMITATION ON COURT ACTION.—Except as other-
wise provided in this title, no court may take any action, 
including any action pursuant to the Securities Investor 
Protection Act of 1970 or the Bankruptcy Code, to restrain 
or affect the exercise of powers or functions of the Corpora-
tion as receiver for a covered broker or dealer and any 
claims against the Corporation as such receiver shall be de-
termined in accordance with subsection (e) and such claims 
shall be limited to money damages. 
(d) ACTIONS BY CORPORATION AS RECEIVER.— 
(1) IN
GENERAL.—Notwithstanding any other 
provision of this title, no action taken by the Cor-
poration, as receiver with respect to a covered broker 
or dealer, shall—
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† HR 4173 EAS 
(A) adversely affect the rights of a customer 
to customer property or customer name securi-
ties; 
(B) diminish the amount or timely pay-
ment of net equity claims of customers; or 
(C) otherwise impair the recoveries provided 
to a customer under the Securities Investor Pro-
tection Act of 1970 (15 U.S.C. 78aaa et seq.). 
(2) NET PROCEEDS.—The net proceeds from any 
transfer, sale, or disposition of assets by the Corpora-
tion as receiver for the covered broker or dealer shall 
be for the benefit of the estate of the covered broker or 
dealer, as provided in this title. 
(e) CLAIMS AGAINST
THE CORPORATION
AS RE-
CEIVER.—Any claim against the Corporation as receiver for 
a covered broker or dealer for assets transferred to a bridge 
financial company established with respect to such covered 
broker or dealer— 
(1) shall be determined in accordance with sec-
tion 210(a)(2); and 
(2) may be reviewed by the appropriate district 
or territorial court of the United States in accordance 
with section 210(a)(5). 
(f) SATISFACTION OF CUSTOMER CLAIMS.—
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† HR 4173 EAS 
(1) OBLIGATIONS
TO
CUSTOMERS.—Notwith-
standing any other provision of this title, all obliga-
tions of a covered broker or dealer or of any bridge 
financial company established with respect to such 
covered broker or dealer to a customer relating to, or 
net equity claims based upon, customer property shall 
be promptly discharged by the delivery of securities or 
the making of payments to or for the account of such 
customer, in a manner and in an amount at least as 
beneficial to the customer as would have been the case 
had the covered broker or dealer been subject to a pro-
ceeding under the Securities Investor Protection Act 
of 1970 (15 U.S.C. 78aaa et seq.) without the ap-
pointment of the Corporation as receiver, and with a 
filing date as of the date on which the Corporation 
is appointed as receiver. 
(2) SATISFACTION OF CLAIMS BY SIPC.—SIPC, 
as trustee for a covered broker or dealer, shall satisfy 
customer claims in the manner and amount provided 
under the Securities Investor Protection Act of 1970 
(15 U.S.C. 78aaa et seq.), as if the appointment of the 
Corporation as receiver had not occurred, and with a 
filing date as of the date on which the Corporation 
is appointed as receiver. The Corporation shall satisfy 
customer claims, to the extent that a customer would
157 
† HR 4173 EAS 
have received more securities or cash with respect to 
the allocation of customer property had the covered fi-
nancial company been subject to a proceeding under 
the Securities Investor Protection Act (15 U.S.C. 
78aaa et seq.) without the appointment of the Cor-
poration as receiver, and with a filing date as of the 
date on which the Corporation is appointed as re-
ceiver. 
(g) PRIORITIES.— 
(1) CUSTOMER PROPERTY.—As trustee for a cov-
ered broker or dealer, SIPC shall allocate customer 
property and deliver customer name securities in ac-
cordance with section 8(c) of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78fff–2(c)). 
(2) OTHER CLAIMS.—All claims other than those 
described in paragraph (1) (including any unpaid 
claim by a customer for the allowed net equity claim 
of such customer from customer property) shall be 
paid in accordance with the priorities in section 
210(b). 
(h) RULEMAKING.—The Commission and the Corpora-
tion, after consultation with SIPC, shall jointly issue rules 
to implement this section.
158 
† HR 4173 EAS 
SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL 
ORDERLY LIQUIDATION ACTIONS. 
In taking action under this title, the Corporation 
shall— 
(1) determine that such action is necessary for 
purposes of the financial stability of the United 
States, and not for the purpose of preserving the cov-
ered financial company; 
(2) ensure that the shareholders of a covered fi-
nancial company do not receive payment until after 
all other claims and the Fund are fully paid; 
(3) ensure that unsecured creditors bear losses in 
accordance with the priority of claim provisions in 
section 210; 
(4) ensure that management responsible for the 
failed condition of the covered financial company is 
removed (if such management has not already been 
removed at the time at which the Corporation is ap-
pointed receiver); and 
(5) not take an equity interest in or become a 
shareholder of any covered financial company or any 
covered subsidiary. 
SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN AP-
POINTMENT OF RECEIVER. 
The members of the board of directors (or body per-
forming similar functions) of a covered financial company
159 
† HR 4173 EAS 
shall not be liable to the shareholders or creditors thereof 
for acquiescing in or consenting in good faith to the ap-
pointment of the Corporation as receiver for the covered fi-
nancial company under section 203. 
SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS. 
(a) IN GENERAL.—Effective as of the date of the ap-
pointment of the Corporation as receiver for the covered fi-
nancial company under section 202 or the appointment of 
SIPC as trustee for a covered broker or dealer under section 
205, as applicable, any case or proceeding commenced with 
respect to the covered financial company under the Bank-
ruptcy Code or the Securities Investor Protection Act of 
1970 shall be dismissed, upon notice to the Bankruptcy 
Court (with respect to a case commenced under the Bank-
ruptcy Code), and upon notice to SIPC (with respect to 
a covered broker or dealer) and no such case or proceeding 
may be commenced with respect to a covered financial com-
pany at any time while the orderly liquidation is pending. 
(b) REVESTING OF ASSETS.—Effective as of the date 
of appointment of the Corporation as receiver, the assets 
of a covered financial company shall, to the extent they have 
vested in any entity other than the covered financial com-
pany as a result of any case or proceeding commenced with 
respect to the covered financial company under the Bank-
ruptcy Code, the Securities Investor Protection Act of 1970,
160 
† HR 4173 EAS 
or any similar provision of State liquidation or insolvency 
law applicable to the covered financial company, revest in 
the covered financial company. 
(c) LIMITATION.—Notwithstanding subsections (a) and 
(b), any order entered or other relief granted by a bank-
ruptcy court prior to the date of appointment of the Cor-
poration as receiver shall continue with the same validity 
as if an orderly liquidation had not been commenced. 
SEC. 209. RULEMAKING; NON-CONFLICTING LAW. 
The Corporation shall, in consultation with the Coun-
cil, prescribe such rules or regulations as the Corporation 
considers necessary or appropriate to implement this title, 
including rules and regulations with respect to the rights, 
interests, and priorities of creditors, counterparties, secu-
rity entitlement holders, or other persons with respect to 
any covered financial company or any assets or other prop-
erty of or held by such covered financial company, and ad-
dress the potential for conflicts of interest between or among 
individual receiverships established under this title or 
under the Federal Deposit Insurance Act. To the extent pos-
sible, the Corporation shall seek to harmonize applicable 
rules and regulations promulgated under this section with 
the insolvency laws that would otherwise apply to a covered 
financial company.
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† HR 4173 EAS 
SEC. 210. POWERS AND DUTIES OF THE CORPORATION. 
(a) POWERS AND AUTHORITIES.— 
(1) GENERAL POWERS.— 
(A) SUCCESSOR
TO
COVERED
FINANCIAL 
COMPANY.—The Corporation shall, upon ap-
pointment as receiver for a covered financial 
company under this title, succeed to— 
(i) all rights, titles, powers, and privi-
leges of the covered financial company and 
its assets, and of any stockholder, member, 
officer, or director of such company; and 
(ii) title to the books, records, and as-
sets of any previous receiver or other legal 
custodian of such covered financial com-
pany. 
(B) OPERATION OF THE COVERED FINAN-
CIAL COMPANY DURING THE PERIOD OF ORDERLY 
LIQUIDATION.—The Corporation, as receiver for 
a covered financial company, may— 
(i) take over the assets of and operate 
the covered financial company with all of 
the powers of the members or shareholders, 
the directors, and the officers of the covered 
financial company, and conduct all busi-
ness of the covered financial company;
162 
† HR 4173 EAS 
(ii) collect all obligations and money 
owed to the covered financial company; 
(iii) perform all functions of the cov-
ered financial company, in the name of the 
covered financial company; 
(iv) manage the assets and property of 
the covered financial company, consistent 
with maximization of the value of the assets 
in the context of the orderly liquidation; 
and 
(v) provide by contract for assistance 
in fulfilling any function, activity, action, 
or duty of the Corporation as receiver. 
(C) FUNCTIONS
OF
COVERED
FINANCIAL 
COMPANY
OFFICERS, DIRECTORS, AND
SHARE-
HOLDERS.— 
(i) IN
GENERAL.—The Corporation 
may provide for the exercise of any function 
by any member or stockholder, director, or 
officer of any covered financial company for 
which the Corporation has been appointed 
as receiver under this title. 
(ii) PRESUMPTION.—There shall be a 
strong presumption that the Corporation, as 
receiver for a covered financial company,
163 
† HR 4173 EAS 
will remove management responsible for the 
failed condition of the covered financial 
company. 
(D) ADDITIONAL POWERS AS RECEIVER.— 
The Corporation shall, as receiver for a covered 
financial company, and subject to all legally en-
forceable and perfected security interests and all 
legally enforceable security entitlements in re-
spect of assets held by the covered financial com-
pany, liquidate, and wind-up the affairs of a 
covered financial company, including taking 
steps to realize upon the assets of the covered fi-
nancial company, in such manner as the Cor-
poration deems appropriate, including through 
the sale of assets, the transfer of assets to a 
bridge financial company established under sub-
section (h), or the exercise of any other rights or 
privileges granted to the receiver under this sec-
tion. 
(E) ADDITIONAL POWERS WITH RESPECT TO 
FAILING SUBSIDIARIES OF A COVERED FINANCIAL 
COMPANY.— 
(i) IN
GENERAL.—In any case in 
which a receiver is appointed for a covered 
financial company under section 202, the
164 
† HR 4173 EAS 
Corporation may appoint itself as receiver 
of any subsidiary (other than an insured 
depository institution, any covered broker 
or dealer, or an insurance company) of the 
covered financial company that is organized 
under Federal law or the laws of any State, 
if the Corporation and the Secretary jointly 
determine that— 
(I) the subsidiary is in default or 
in danger of default; 
(II) such action would avoid or 
mitigate serious adverse effects on the 
financial stability or economic condi-
tions of the United States; and 
(III) such action would facilitate 
the orderly liquidation of the covered 
financial company. 
(ii) TREATMENT AS COVERED FINAN-
CIAL COMPANY.—If the Corporation is ap-
pointed as receiver of a subsidiary of a cov-
ered financial company under clause (i), 
the subsidiary shall thereafter be considered 
a covered financial company under this 
title, and the Corporation shall thereafter 
have all the powers and rights with respect
165 
† HR 4173 EAS 
to that subsidiary as it has with respect to 
a covered financial company under this 
title. 
(F) ORGANIZATION
OF
BRIDGE
COMPA-
NIES.—The Corporation, as receiver for a cov-
ered financial company, may organize a bridge 
financial company under subsection (h). 
(G) MERGER; TRANSFER OF ASSETS AND LI-
ABILITIES.— 
(i) IN
GENERAL.—Subject to clauses 
(ii) and (iii), the Corporation, as receiver 
for a covered financial company, may— 
(I) merge the covered financial 
company with another company; or 
(II) transfer any asset or liability 
of the covered financial company (in-
cluding any assets and liabilities held 
by the covered financial company for 
security entitlement holders, any cus-
tomer property, or any assets and li-
abilities associated with any trust or 
custody business) without obtaining 
any approval, assignment, or consent 
with respect to such transfer.
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† HR 4173 EAS 
(ii) 
FEDERAL
AGENCY
APPROVAL; 
ANTITRUST
REVIEW.—With respect to a 
transaction described in clause (i)(I) that 
requires approval by a Federal agency— 
(I) the transaction may not be 
consummated before the 5th calendar 
day after the date of approval by the 
Federal agency responsible for such ap-
proval; 
(II) if, in connection with any 
such approval, a report on competitive 
factors is required, the Federal agency 
responsible for such approval shall 
promptly notify the Attorney General 
of the United States of the proposed 
transaction, and the Attorney General 
shall provide the required report not 
later than 10 days after the date of the 
request; and 
(III) if notification under section 
7A of the Clayton Act is required with 
respect to such transaction, then the re-
quired waiting period shall end on the 
15th day after the date on which the 
Attorney General and the Federal
167 
† HR 4173 EAS 
Trade Commission receive such notifi-
cation, unless the waiting period is ter-
minated earlier under subsection (b)(2) 
of such section 7A, or is extended pur-
suant to subsection (e)(2) of such sec-
tion 7A. 
(iii) SETOFF.—Subject to the other 
provisions of this title, any transferee of as-
sets from a receiver, including a bridge fi-
nancial company, shall be subject to such 
claims or rights as would prevail over the 
rights of such transferee in such assets 
under applicable noninsolvency law. 
(H) PAYMENT OF VALID OBLIGATIONS.—The 
Corporation, as receiver for a covered financial 
company, shall, to the extent that funds are 
available, pay all valid obligations of the covered 
financial company that are due and payable at 
the time of the appointment of the Corporation 
as receiver, in accordance with the prescriptions 
and limitations of this title. 
(I) APPLICABLE NONINSOLVENCY LAW.—Ex-
cept as may otherwise be provided in this title, 
the applicable noninsolvency law shall be deter-
mined by the noninsolvency choice of law rules
168 
† HR 4173 EAS 
otherwise applicable to the claims, rights, titles, 
persons, or entities at issue. 
(J) SUBPOENA AUTHORITY.— 
(i) IN GENERAL.—The Corporation, as 
receiver for a covered financial company, 
may, for purposes of carrying out any 
power, authority, or duty with respect to 
the covered financial company (including 
determining any claim against the covered 
financial company and determining and re-
alizing upon any asset of any person in the 
course of collecting money due the covered 
financial company), exercise any power es-
tablished under section 8(n) of the Federal 
Deposit Insurance Act, as if the Corpora-
tion were the appropriate Federal banking 
agency for the covered financial company, 
and the covered financial company were an 
insured depository institution. 
(ii) RULE
OF
CONSTRUCTION.—This 
subparagraph may not be construed as lim-
iting any rights that the Corporation, in 
any capacity, might otherwise have to exer-
cise any powers described in clause (i) or 
under any other provision of law.
169 
† HR 4173 EAS 
(K) INCIDENTAL
POWERS.—The Corpora-
tion, as receiver for a covered financial com-
pany, may exercise all powers and authorities 
specifically granted to receivers under this title, 
and such incidental powers as shall be necessary 
to carry out such powers under this title. 
(L) UTILIZATION OF PRIVATE SECTOR.—In 
carrying out its responsibilities in the manage-
ment and disposition of assets from the covered 
financial company, the Corporation, as receiver 
for a covered financial company, may utilize the 
services of private persons, including real estate 
and loan portfolio asset management, property 
management, auction marketing, legal, and bro-
kerage services, if such services are available in 
the private sector, and the Corporation deter-
mines that utilization of such services is prac-
ticable, efficient, and cost effective. 
(M) SHAREHOLDERS
AND
CREDITORS
OF 
COVERED
FINANCIAL
COMPANY.—Notwith-
standing any other provision of law, the Cor-
poration, as receiver for a covered financial com-
pany, shall succeed by operation of law to the 
rights, titles, powers, and privileges described in 
subparagraph (A), and shall terminate all rights
170 
† HR 4173 EAS 
and claims that the stockholders and creditors of 
the covered financial company may have against 
the assets of the covered financial company or 
the Corporation arising out of their status as 
stockholders or creditors, except for their right to 
payment, resolution, or other satisfaction of their 
claims, as permitted under this section. The Cor-
poration shall ensure that shareholders and unse-
cured creditors bear losses, consistent with the 
priority of claims provisions under this section. 
(N) COORDINATION WITH FOREIGN FINAN-
CIAL
AUTHORITIES.—The Corporation, as re-
ceiver for a covered financial company, shall co-
ordinate, to the maximum extent possible, with 
the appropriate foreign financial authorities re-
garding the orderly liquidation of any covered fi-
nancial company that has assets or operations in 
a country other than the United States. 
(O) 
RESTRICTION
ON
TRANSFERS
TO 
BRIDGE FINANCIAL COMPANY.— 
(i) SECTION OF ACCOUNTS FOR TRANS-
FER.—If the Corporation establishes one or 
more bridge financial companies with re-
spect to a covered broker or dealer, the Cor-
poration shall transfer to a bridge financial
171 
† HR 4173 EAS 
company, all customer accounts of the cov-
ered financial company, unless the Corpora-
tion, after consulting with the Commission 
and SIPC, determines that— 
(I) the customer accounts are like-
ly to be promptly transferred to an-
other covered broker or dealer; or 
(II) the transfer of the accounts to 
a bridge financial company would ma-
terially interfere with the ability of the 
Corporation to avoid or mitigate seri-
ous adverse effects on financial sta-
bility or economic conditions in the 
United States. 
(ii) TRANSFER OF PROPERTY.—SIPC, 
as trustee for the liquidation of the covered 
broker or dealer, and the Commission, shall 
provide any and all reasonable assistance 
necessary to complete such transfers by the 
Corporation. 
(iii) CUSTOMER CONSENT AND COURT 
APPROVAL
NOT
REQUIRED.—Neither cus-
tomer consent nor court approval shall be 
required to transfer any customer accounts 
and associated customer property to a
174 
† HR 4173 EAS 
(ii) in any claim filed by the claimant; 
or 
(iii) upon discovery of the name and 
address of a claimant not appearing on the 
books and records of the covered financial 
company, not later than 30 days after the 
date of the discovery of such name and ad-
dress. 
(3) 
PROCEDURES
FOR
RESOLUTION
OF 
CLAIMS.— 
(A) DECISION PERIOD.— 
(i) IN GENERAL.—Prior to the 180th 
day after the date on which a claim against 
a covered financial company is filed with 
the Corporation as receiver, or such later 
date as may be agreed as provided in clause 
(ii), the Corporation shall notify the claim-
ant whether it accepts or objects to the 
claim, in accordance with subparagraphs 
(B), (C), and (D). 
(ii) EXTENSION OF TIME.—By written 
agreement executed not later than 180 days 
after the date on which a claim against a 
covered financial company is filed with the 
Corporation, the period described in clause
175 
† HR 4173 EAS 
(i) may be extended by written agreement 
between the claimant and the Corporation. 
Failure to notify the claimant of any dis-
allowance within the time period set forth 
in clause (i), as it may be extended by 
agreement under this clause, shall be 
deemed to be a disallowance of such claim, 
and the claimant may file or continue an 
action in court, as provided in paragraph 
(4). 
(iii) 
MAILING
OF
NOTICE
SUFFI-
CIENT.—The requirements of clause (i) shall 
be deemed to be satisfied if the notice of any 
decision with respect to any claim is mailed 
to the last address of the claimant which 
appears— 
(I) on the books, records, or both 
of the covered financial company; 
(II) in the claim filed by the 
claimant; or 
(III) in documents submitted in 
proof of the claim. 
(iv) CONTENTS
OF
NOTICE
OF
DIS-
ALLOWANCE.—If the Corporation as receiver
176 
† HR 4173 EAS 
objects to any claim filed under clause (i), 
the notice to the claimant shall contain— 
(I) a statement of each reason for 
the disallowance; and 
(II) the procedures required to file 
or continue an action in court, as pro-
vided in paragraph (4). 
(B) ALLOWANCE OF PROVEN CLAIM.—The 
receiver shall allow any claim received by the re-
ceiver on or before the date specified in the notice 
under paragraph (2)(B)(i), which is proved to 
the satisfaction of the receiver. 
(C) DISALLOWANCE
OF
CLAIMS
FILED 
AFTER END OF FILING PERIOD.— 
(i) IN GENERAL.—Except as provided 
in clause (ii), claims filed after the date 
specified in the notice published under 
paragraph (2)(B)(i) shall be disallowed, 
and such disallowance shall be final. 
(ii) CERTAIN EXCEPTIONS.—Clause (i) 
shall not apply with respect to any claim 
filed by a claimant after the date specified 
in the notice published under paragraph 
(2)(B)(i), and such claim may be considered
177 
† HR 4173 EAS 
by the receiver under subparagraph (B), 
if— 
(I) the claimant did not receive 
notice of the appointment of the re-
ceiver in time to file such claim before 
such date; and 
(II) such claim is filed in time to 
permit payment of such claim. 
(D) AUTHORITY TO DISALLOW CLAIMS.— 
(i) IN
GENERAL.—The Corporation 
may object to any portion of any claim by 
a creditor or claim of a security, preference, 
setoff, or priority which is not proved to the 
satisfaction of the Corporation. 
(ii) PAYMENTS
TO
UNDERSECURED 
CREDITORS.—In the case of a claim against 
a covered financial company that is secured 
by any property or other asset of such cov-
ered financial company, the receiver— 
(I) may treat the portion of such 
claim which exceeds an amount equal 
to the fair market value of such prop-
erty or other asset as an unsecured 
claim; and
178 
† HR 4173 EAS 
(II) may not make any payment 
with respect to such unsecured portion 
of the claim, other than in connection 
with the disposition of all claims of 
unsecured creditors of the covered fi-
nancial company. 
(iii) EXCEPTIONS.—No provision of 
this paragraph shall apply with respect 
to— 
(I) any extension of credit from 
any Federal reserve bank, or the Cor-
poration, to any covered financial 
company; or 
(II) subject to clause (ii), any le-
gally enforceable and perfected security 
interest in the assets of the covered fi-
nancial company securing any such 
extension of credit. 
(E) LEGAL EFFECT OF FILING.— 
(i) 
STATUTE
OF
LIMITATIONS 
TOLLED.—For purposes of any applicable 
statute of limitations, the filing of a claim 
with the receiver shall constitute a com-
mencement of an action.
180 
† HR 4173 EAS 
against a covered financial company for 
which the Corporation is receiver; or 
(ii) the date of any notice of disallow-
ance of such claim pursuant to paragraph 
(3)(A)(i). 
(C) STATUTE
OF
LIMITATIONS.—If any 
claimant fails to file suit on such claim (or to 
continue an action on such claim commenced be-
fore the date of appointment of the Corporation 
as receiver) prior to the end of the 60-day period 
described in subparagraph (B), the claim shall 
be deemed to be disallowed (other than any por-
tion of such claim which was allowed by the re-
ceiver) as of the end of such period, such dis-
allowance shall be final, and the claimant shall 
have no further rights or remedies with respect 
to such claim. 
(5) EXPEDITED DETERMINATION OF CLAIMS.— 
(A) PROCEDURE REQUIRED.—The Corpora-
tion shall establish a procedure for expedited re-
lief outside of the claims process established 
under paragraph (3), for any claimant that al-
leges— 
(i) the existence of a legally valid and 
enforceable or perfected security interest in
181 
† HR 4173 EAS 
property of a covered financial company, or 
is an entitlement holder that has obtained 
control of any legally valid and enforceable 
security entitlement in respect of any asset 
held by the covered financial company for 
which the Corporation has been appointed 
receiver; and 
(ii) that irreparable injury will occur 
if the claims procedure established under 
paragraph (3) is followed. 
(B) DETERMINATION PERIOD.—Prior to the 
end of the 90-day period beginning on the date 
on which a claim is filed in accordance with the 
procedures established pursuant to subparagraph 
(A), the Corporation shall— 
(i) determine— 
(I) whether to allow or disallow 
such claim, or any portion thereof; or 
(II) whether such claim should be 
determined pursuant to the procedures 
established pursuant to paragraph (3); 
(ii) notify the claimant of the deter-
mination; and 
(iii) if the claim is disallowed, provide 
a statement of each reason for the disallow-
182 
† HR 4173 EAS 
ance and the procedure for obtaining a ju-
dicial determination. 
(C) PERIOD
FOR
FILING
OR
RENEWING 
SUIT.—Any claimant who files a request for ex-
pedited relief shall be permitted to file suit (or 
continue a suit filed before the date of appoint-
ment of the Corporation as receiver seeking a de-
termination of the rights of the claimant with re-
spect to such security interest (or such security 
entitlement) after the earlier of— 
(i) the end of the 90-day period begin-
ning on the date of the filing of a request 
for expedited relief; or 
(ii) the date on which the Corporation 
denies the claim or a portion thereof. 
(D) STATUTE OF LIMITATIONS.—If an ac-
tion described in subparagraph (C) is not filed, 
or the motion to renew a previously filed suit is 
not made, before the end of the 30-day period be-
ginning on the date on which such action or mo-
tion may be filed in accordance with subpara-
graph (C), the claim shall be deemed to be dis-
allowed as of the end of such period (other than 
any portion of such claim which was allowed by 
the receiver), such disallowance shall be final,
183 
† HR 4173 EAS 
and the claimant shall have no further rights or 
remedies with respect to such claim. 
(E) LEGAL EFFECT OF FILING.— 
(i) 
STATUTE
OF
LIMITATIONS 
TOLLED.—For purposes of any applicable 
statute of limitations, the filing of a claim 
with the receiver shall constitute a com-
mencement of an action. 
(ii) NO
PREJUDICE
TO
OTHER
AC-
TIONS.—Subject to paragraph (8), the filing 
of a claim with the receiver shall not preju-
dice any right of the claimant to continue 
any action which was filed before the ap-
pointment of the Corporation as receiver for 
the covered financial company. 
(6) AGREEMENTS
AGAINST
INTEREST
OF
THE 
RECEIVER.—No agreement that tends to diminish or 
defeat the interest of the Corporation as receiver in 
any asset acquired by the receiver under this section 
shall be valid against the receiver, unless such agree-
ment— 
(A) is in writing; 
(B) was executed by an authorized officer or 
representative of the covered financial company,
184 
† HR 4173 EAS 
or confirmed in the ordinary course of business 
by the covered financial company; and 
(C) has been, since the time of its execution, 
an official record of the company or the party 
claiming under the agreement provides docu-
mentation, acceptable to the receiver, of such 
agreement and its authorized execution or con-
firmation by the covered financial company. 
(7) PAYMENT OF CLAIMS.— 
(A) IN GENERAL.—Subject to subparagraph 
(B), the Corporation as receiver may, in its dis-
cretion and to the extent that funds are avail-
able, pay creditor claims, in such manner and 
amounts as are authorized under this section, 
which are— 
(i) allowed by the receiver; 
(ii) approved by the receiver pursuant 
to a final determination pursuant to para-
graph (3) or (5), as applicable; or 
(iii) determined by the final judgment 
of a court of competent jurisdiction. 
(B) LIMITATION.—A creditor shall, in no 
event, receive less than the amount that the cred-
itor is entitled to receive under paragraphs (2) 
and (3) of subsection (d), as applicable.
185 
† HR 4173 EAS 
(C) PAYMENT OF DIVIDENDS ON CLAIMS.— 
The Corporation as receiver may, in its sole dis-
cretion, and to the extent otherwise permitted by 
this section, pay dividends on proven claims at 
any time, and no liability shall attach to the 
Corporation as receiver, by reason of any such 
payment or for failure to pay dividends to a 
claimant whose claim is not proved at the time 
of any such payment. 
(D) RULEMAKING BY THE CORPORATION.— 
The Corporation may prescribe such rules, in-
cluding definitions of terms, as the Corporation 
deems appropriate to establish an interest rate 
for or to make payments of post-insolvency inter-
est to creditors holding proven claims against the 
receivership estate of a covered financial com-
pany, except that no such interest shall be paid 
until the Corporation as receiver has satisfied 
the principal amount of all creditor claims. 
(8) SUSPENSION OF LEGAL ACTIONS.— 
(A) IN GENERAL.—After the appointment of 
the Corporation as receiver for a covered finan-
cial company, the Corporation may request a 
stay in any judicial action or proceeding in 
which such covered financial company is or be-
186 
† HR 4173 EAS 
comes a party, for a period of not to exceed 90 
days. 
(B) GRANT OF STAY BY ALL COURTS RE-
QUIRED.—Upon receipt of a request by the Cor-
poration pursuant to subparagraph (A), the 
court shall grant such stay as to all parties. 
(9) ADDITIONAL RIGHTS AND DUTIES.— 
(A) PRIOR FINAL ADJUDICATION.—The Cor-
poration shall abide by any final, non-appeal-
able judgment of any court of competent jurisdic-
tion that was rendered before the appointment of 
the Corporation as receiver. 
(B) 
RIGHTS
AND
REMEDIES
OF
RE-
CEIVER.—In the event of any appealable judg-
ment, the Corporation as receiver shall— 
(i) have all the rights and remedies 
available to the covered financial company 
(before the date of appointment of the Cor-
poration as receiver under section 202) and 
the Corporation, including removal to Fed-
eral court and all appellate rights; and 
(ii) not be required to post any bond 
in order to pursue such remedies. 
(C) NO ATTACHMENT OR EXECUTION.—No 
attachment or execution may be issued by any
187 
† HR 4173 EAS 
court upon assets in the possession of the Cor-
poration as receiver for a covered financial com-
pany. 
(D) LIMITATION
ON
JUDICIAL
REVIEW.— 
Except as otherwise provided in this title, no 
court shall have jurisdiction over— 
(i) any claim or action for payment 
from, or any action seeking a determination 
of rights with respect to, the assets of any 
covered financial company for which the 
Corporation has been appointed receiver, 
including any assets which the Corporation 
may acquire from itself as such receiver; or 
(ii) any claim relating to any act or 
omission of such covered financial company 
or the Corporation as receiver. 
(E) DISPOSITION OF ASSETS.—In exercising 
any right, power, privilege, or authority as re-
ceiver in connection with any covered financial 
company for which the Corporation is acting as 
receiver under this section, the Corporation shall, 
to the greatest extent practicable, conduct its op-
erations in a manner that—
188 
† HR 4173 EAS 
(i) maximizes the net present value re-
turn from the sale or disposition of such as-
sets; 
(ii) minimizes the amount of any loss 
realized in the resolution of cases; 
(iii) mitigates the potential for serious 
adverse effects to the financial system; 
(iv) ensures timely and adequate com-
petition and fair and consistent treatment 
of offerors; and 
(v) prohibits discrimination on the 
basis of race, sex, or ethnic group in the so-
licitation and consideration of offers. 
(10) STATUTE
OF
LIMITATIONS
FOR
ACTIONS 
BROUGHT BY RECEIVER.— 
(A) IN
GENERAL.—Notwithstanding any 
provision of any contract, the applicable statute 
of limitations with regard to any action brought 
by the Corporation as receiver for a covered fi-
nancial company shall be— 
(i) in the case of any contract claim, 
the longer of— 
(I) the 6-year period beginning on 
the date on which the claim accrues; or
189 
† HR 4173 EAS 
(II) the period applicable under 
State law; and 
(ii) in the case of any tort claim, the 
longer of— 
(I) the 3-year period beginning on 
the date on which the claim accrues; or 
(II) the period applicable under 
State law. 
(B) DATE ON WHICH A CLAIM ACCRUES.— 
For purposes of subparagraph (A), the date on 
which the statute of limitations begins to run on 
any claim described in subparagraph (A) shall 
be the later of— 
(i) the date of the appointment of the 
Corporation as receiver under this title; or 
(ii) the date on which the cause of ac-
tion accrues. 
(C) REVIVAL OF EXPIRED STATE CAUSES OF 
ACTION.— 
(i) IN GENERAL.—In the case of any 
tort claim described in clause (ii) for which 
the applicable statute of limitations under 
State law has expired not more than 5 
years before the date of appointment of the 
Corporation as receiver for a covered finan-
190 
† HR 4173 EAS 
cial company, the Corporation may bring 
an action as receiver on such claim without 
regard to the expiration of the statute of 
limitations. 
(ii) CLAIMS DESCRIBED.—A tort claim 
referred to in clause (i) is a claim arising 
from fraud, intentional misconduct result-
ing in unjust enrichment, or intentional 
misconduct resulting in substantial loss to 
the covered financial company. 
(11) AVOIDABLE TRANSFERS.— 
(A) FRAUDULENT
TRANSFERS.—The Cor-
poration, as receiver for any covered financial 
company, may avoid a transfer of any interest 
of the covered financial company in property, or 
any obligation incurred by the covered financial 
company, that was made or incurred at or with-
in 2 years before the time of commencement, if— 
(i) the covered financial company vol-
untarily or involuntarily— 
(I) made such transfer or incurred 
such obligation with actual intent to 
hinder, delay, or defraud any entity to 
which the covered financial company 
was or became, on or after the date on
191 
† HR 4173 EAS 
which such transfer was made or such 
obligation was incurred, indebted; or 
(II) received less than a reason-
ably equivalent value in exchange for 
such transferor obligation; and 
(ii) the covered financial company vol-
untarily or involuntarily— 
(I) was insolvent on the date that 
such transfer was made or such obliga-
tion was incurred, or became insolvent 
as a result of such transfer or obliga-
tion; 
(II) was engaged in business or a 
transaction, or was about to engage in 
business or a transaction, for which 
any property remaining with the cov-
ered financial company was an unrea-
sonably small capital; 
(III) intended to incur, or be-
lieved that the covered financial com-
pany would incur, debts that would be 
beyond the ability of the covered finan-
cial company to pay as such debts ma-
tured; or
192 
† HR 4173 EAS 
(IV) made such transfer to or for 
the benefit of an insider, or incurred 
such obligation to or for the benefit of 
an insider, under an employment con-
tract and not in the ordinary course of 
business. 
(B) PREFERENTIAL TRANSFERS.—The Cor-
poration as receiver for any covered financial 
company may avoid a transfer of an interest of 
the covered financial company in property— 
(i) to or for the benefit of a creditor; 
(ii) for or on account of an antecedent 
debt that was owed by the covered financial 
company before the transfer was made; 
(iii) that was made while the covered 
financial company was insolvent; 
(iv) that was made— 
(I) 90 days or less before the date 
on which the Corporation was ap-
pointed receiver; or 
(II) more than 90 days, but less 
than 1 year before the date on which 
the Corporation was appointed re-
ceiver, if such creditor at the time of 
the transfer was an insider; and
193 
† HR 4173 EAS 
(v) that enables the creditor to receive 
more than the creditor would receive if— 
(I) the covered financial company 
had been liquidated under chapter 7 of 
the Bankruptcy Code; 
(II) the transfer had not been 
made; and 
(III) the creditor received pay-
ment of such debt to the extent pro-
vided by the provisions of chapter 7 of 
the Bankruptcy Code. 
(C) POST-RECEIVERSHIP TRANSACTIONS.— 
The Corporation as receiver for any covered fi-
nancial company may avoid a transfer of prop-
erty of the receivership that occurred after the 
Corporation was appointed receiver that was not 
authorized under this title by the Corporation as 
receiver. 
(D) RIGHT OF RECOVERY.—To the extent 
that a transfer is avoided under subparagraph 
(A), (B), or (C), the Corporation may recover, 
for the benefit of the covered financial company, 
the property transferred or, if a court so orders, 
the value of such property (at the time of such 
transfer) from—
194 
† HR 4173 EAS 
(i) the initial transferee of such trans-
fer or the person for whose benefit such 
transfer was made; or 
(ii) any immediate or mediate trans-
feree of any such initial transferee. 
(E) RIGHTS
OF
TRANSFEREE
OR
OBLI-
GEE.—The Corporation may not recover under 
subparagraph (D)(ii) from— 
(i) any transferee that takes for value, 
including in satisfaction of or to secure a 
present or antecedent debt, in good faith, 
and without knowledge of the voidability of 
the transfer avoided; or 
(ii) any immediate or mediate good 
faith transferee of such transferee. 
(F) DEFENSES.—Subject to the other provi-
sions of this title— 
(i) a transferee or obligee from which 
the Corporation seeks to recover a transfer 
or to avoid an obligation under subpara-
graph (A), (B), (C), or (D) shall have the 
same defenses available to a transferee or 
obligee from which a trustee seeks to recover 
a transfer or avoid an obligation under; 
and
195 
† HR 4173 EAS 
(ii) the authority of the Corporation to 
recover a transfer or avoid an obligation 
shall be subject to subsections (b) and (c) of 
section 546, section 547(c), and section 
548(c) of the Bankruptcy Code. 
(G) RIGHTS
UNDER
THIS
SECTION.—The 
rights of the Corporation as receiver under this 
section shall be superior to any rights of a trust-
ee or any other party (other than a Federal 
agency) under the Bankruptcy Code. 
(H) RULES
OF
CONSTRUCTION; DEFINI-
TIONS.—For purposes of— 
(i) subparagraphs (A) and (B)— 
(I) the term ‘‘insider’’ has the 
same meaning as in section 101(31) of 
the Bankruptcy Code; 
(II) a transfer is made when such 
transfer is so perfected that a bona fide 
purchaser from the covered financial 
company against whom applicable law 
permits such transfer to be perfected 
cannot acquire an interest in the prop-
erty transferred that is superior to the 
interest in such property of the trans-
feree, but if such transfer is not so per-
196 
† HR 4173 EAS 
fected before the date on which the Cor-
poration is appointed as receiver for 
the covered financial company, such 
transfer is made immediately before 
the date of such appointment; and 
(III) the term ‘‘value’’ means 
property, or satisfaction or securing of 
a present or antecedent debt of the cov-
ered financial company, but does not 
include an unperformed promise to 
furnish support to the covered finan-
cial company; and 
(ii) subparagraph (B)— 
(I) the covered financial company 
is presumed to have been insolvent on 
and during the 90-day period imme-
diately preceding the date of appoint-
ment of the Corporation as receiver; 
and 
(II) the term ‘‘insolvent’’ has the 
same meaning as in section 101(32) of 
the Bankruptcy Code. 
(12) SETOFF.— 
(A) GENERALLY.—Except as otherwise pro-
vided in this title, any right of a creditor to off-
197 
† HR 4173 EAS 
set a mutual debt owed by the creditor to any 
covered financial company that arose before the 
Corporation was appointed as receiver for the 
covered financial company against a claim of 
such creditor may be asserted if enforceable 
under applicable noninsolvency law, except to 
the extent that— 
(i) the claim of the creditor against the 
covered financial company is disallowed; 
(ii) the claim was transferred, by an 
entity other than the covered financial com-
pany, to the creditor— 
(I) after the Corporation was ap-
pointed as receiver of the covered fi-
nancial company; or 
(II)(aa) after the 90-day period 
preceding the date on which the Cor-
poration was appointed as receiver for 
the covered financial company; and 
(bb) while the covered financial 
company was insolvent (except for a 
setoff in connection with a qualified fi-
nancial contract); or
198 
† HR 4173 EAS 
(iii) the debt owed to the covered finan-
cial company was incurred by the covered 
financial company— 
(I) after the 90-day period pre-
ceding the date on which the Corpora-
tion was appointed as receiver for the 
covered financial company; 
(II) while the covered financial 
company was insolvent; and 
(III) for the purpose of obtaining 
a right of setoff against the covered fi-
nancial company (except for a setoff in 
connection with a qualified financial 
contract). 
(B) INSUFFICIENCY.— 
(i) IN GENERAL.—Except with respect 
to a setoff in connection with a qualified fi-
nancial contract, if a creditor offsets a mu-
tual debt owed to the covered financial com-
pany against a claim of the covered finan-
cial company on or within the 90-day pe-
riod preceding the date on which the Cor-
poration is appointed as receiver for the 
covered financial company, the Corporation 
may recover from the creditor the amount so
199 
† HR 4173 EAS 
offset, to the extent that any insufficiency 
on the date of such setoff is less than the in-
sufficiency on the later of— 
(I) the date that is 90 days before 
the date on which the Corporation is 
appointed as receiver for the covered fi-
nancial company; or 
(II) the first day on which there 
is an insufficiency during the 90-day 
period preceding the date on which the 
Corporation is appointed as receiver 
for the covered financial company. 
(ii) DEFINITION OF INSUFFICIENCY.— 
In this subparagraph, the term ‘‘insuffi-
ciency’’ means the amount, if any, by which 
a claim against the covered financial com-
pany exceeds a mutual debt owed to the cov-
ered financial company by the holder of 
such claim. 
(C) INSOLVENCY.—The term ‘‘insolvent’’ has 
the same meaning as in section 101(32) of the 
Bankruptcy Code. 
(D) PRESUMPTION
OF
INSOLVENCY.—For 
purposes of this paragraph, the covered financial 
company is presumed to have been insolvent on
200 
† HR 4173 EAS 
and during the 90-day period preceding the date 
of appointment of the Corporation as receiver. 
(E) LIMITATION.—Nothing in this para-
graph (12) shall be the basis for any right of 
setoff where no such right exists under applicable 
noninsolvency law. 
(F) PRIORITY CLAIM.—Except as otherwise 
provided in this title, the Corporation as receiver 
for the covered financial company may sell or 
transfer any assets free and clear of the setoff 
rights of any party, except that such party shall 
be entitled to a claim, subordinate to the claims 
payable under subparagraphs (A), (B), (C), and 
(D) of subsection (b)(1), but senior to all other 
unsecured 
liabilities 
defined 
in 
subsection 
(b)(1)(E), in an amount equal to the value of 
such setoff rights. 
(13) ATTACHMENT OF ASSETS AND OTHER IN-
JUNCTIVE RELIEF.—Subject to paragraph (14), any 
court of competent jurisdiction may, at the request of 
the Corporation as receiver for a covered financial 
company, issue an order in accordance with Rule 65 
of the Federal Rules of Civil Procedure, including an 
order placing the assets of any person designated by
201 
† HR 4173 EAS 
the Corporation under the control of the court and 
appointing a trustee to hold such assets. 
(14) STANDARDS.— 
(A) SHOWING.—Rule 65 of the Federal 
Rules of Civil Procedure shall apply with respect 
to any proceeding under paragraph (13), with-
out regard to the requirement that the applicant 
show that the injury, loss, or damage is irrep-
arable and immediate. 
(B) STATE PROCEEDING.—If, in the case of 
any proceeding in a State court, the court deter-
mines that rules of civil procedure available 
under the laws of the State provide substantially 
similar protections of the right of the parties to 
due process as provided under Rule 65 (as modi-
fied with respect to such proceeding by subpara-
graph (A)), the relief sought by the Corporation 
pursuant to paragraph (14) may be requested 
under the laws of such State. 
(15) TREATMENT
OF
CLAIMS
ARISING
FROM 
BREACH OF CONTRACTS EXECUTED BY THE CORPORA-
TION AS RECEIVER.—Notwithstanding any other pro-
vision of this title, any final and non-appealable 
judgment for monetary damages entered against the 
Corporation as receiver for a covered financial com-
202 
† HR 4173 EAS 
pany for the breach of an agreement executed or ap-
proved by the Corporation after the date of its ap-
pointment shall be paid as an administrative expense 
of the receiver. Nothing in this paragraph shall be 
construed to limit the power of a receiver to exercise 
any rights under contract or law, including to termi-
nate, breach, cancel, or otherwise discontinue such 
agreement. 
(16) ACCOUNTING
AND
RECORDKEEPING
RE-
QUIREMENTS.— 
(A) IN GENERAL.—The Corporation as re-
ceiver for a covered financial company shall, 
consistent with the accounting and reporting 
practices and procedures established by the Cor-
poration, maintain a full accounting of each re-
ceivership or other disposition of any covered fi-
nancial company. 
(B) ANNUAL
ACCOUNTING
OR
REPORT.— 
With respect to each receivership to which the 
Corporation is appointed, the Corporation shall 
make an annual accounting or report, as appro-
priate, available to the Secretary and the Comp-
troller General of the United States. 
(C) AVAILABILITY OF REPORTS.—Any re-
port prepared pursuant to subparagraph (B)
203 
† HR 4173 EAS 
and section 203(c)(3) shall be made available to 
the public by the Corporation. 
(D) RECORDKEEPING REQUIREMENT.— 
(i) IN
GENERAL.—The Corporation 
shall prescribe such regulations and estab-
lish such retention schedules as are nec-
essary to maintain the documents and 
records of the Corporation generated in ex-
ercising the authorities of this title and the 
records of a covered financial company for 
which the Corporation is appointed receiver, 
with due regard for— 
(I) the avoidance of duplicative 
record retention; and 
(II) the expected evidentiary needs 
of the Corporation as receiver for a 
covered financial company and the 
public regarding the records of covered 
financial companies. 
(ii) RETENTION OF RECORDS.—Unless 
otherwise required by applicable Federal 
law or court order, the Corporation may 
not, at any time, destroy any records that 
are subject to clause (i).
204 
† HR 4173 EAS 
(iii) RECORDS DEFINED.—As used in 
this subparagraph, the terms ‘‘records’’ and 
‘‘records of a covered financial company’’ 
mean any document, book, paper, map, 
photograph, microfiche, microfilm, computer 
or electronically-created record generated or 
maintained by the covered financial com-
pany in the course of and necessary to its 
transaction of business. 
(b) PRIORITY
OF
EXPENSES
AND
UNSECURED 
CLAIMS.— 
(1) IN GENERAL.—Unsecured claims against a 
covered financial company, or the Corporation as re-
ceiver for such covered financial company under this 
section, that are proven to the satisfaction of the re-
ceiver shall have priority in the following order: 
(A) Administrative expenses of the receiver. 
(B) Any amounts owed to the United 
States, unless the United States agrees or con-
sents otherwise. 
(C) Wages, salaries, or commissions, includ-
ing vacation, severance, and sick leave pay 
earned by an individual (other than an indi-
vidual described in subparagraph (G)), but only 
to the extent of $11,725 for each individual (as
205 
† HR 4173 EAS 
indexed for inflation, by regulation of the Cor-
poration) earned not later than 180 days before 
the date of appointment of the Corporation as re-
ceiver. 
(D) Contributions owed to employee benefit 
plans arising from services rendered not later 
than 180 days before the date of appointment of 
the Corporation as receiver, to the extent of the 
number of employees covered by each such plan, 
multiplied by $11,725 (as indexed for inflation, 
by regulation of the Corporation), less the aggre-
gate amount paid to such employees under sub-
paragraph (C), plus the aggregate amount paid 
by the receivership on behalf of such employees to 
any other employee benefit plan. 
(E) Any other general or senior liability of 
the covered financial company (which is not a li-
ability described under subparagraph (F), (G), 
or (H)). 
(F) Any obligation subordinated to general 
creditors (which is not an obligation described 
under subparagraph (G) or (H)). 
(G) Any wages, salaries, or commissions in-
cluding vacation, severance, and sick leave pay
206 
† HR 4173 EAS 
earned, owed to senior executives and directors of 
the covered financial company. 
(H) Any obligation to shareholders, mem-
bers, general partners, limited partners, or other 
persons, with interests in the equity of the cov-
ered financial company arising as a result of 
their status as shareholders, members, general 
partners, limited partners, or other persons with 
interests in the equity of the covered financial 
company. 
(2) POST-RECEIVERSHIP FINANCING PRIORITY.— 
In the event that the Corporation, as receiver for a 
covered financial company, is unable to obtain unse-
cured credit for the covered financial company from 
commercial sources, the Corporation as receiver may 
obtain credit or incur debt on the part of the covered 
financial company, which shall have priority over 
any or all administrative expenses of the receiver 
under paragraph (1)(A). 
(3) CLAIMS OF THE UNITED STATES.—Unsecured 
claims of the United States shall, at a minimum, 
have a higher priority than liabilities of the covered 
financial company that count as regulatory capital. 
(4) 
CREDITORS
SIMILARLY
SITUATED.—All 
claimants of a covered financial company that are
207 
† HR 4173 EAS 
similarly situated under paragraph (1) shall be treat-
ed in a similar manner, except that the Corporation 
as receiver may take any action (including making 
payments, subject to subsection (o)(1)(E)(ii)) that 
does not comply with this subsection, if— 
(A) the Corporation determines that such 
action is necessary— 
(i) to maximize the value of the assets 
of the covered financial company; 
(ii) to initiate and continue operations 
essential to implementation of the receiver-
ship or any bridge financial company; 
(iii) to maximize the present value re-
turn from the sale or other disposition of 
the assets of the covered financial company; 
or 
(iv) to minimize the amount of any 
loss realized upon the sale or other disposi-
tion of the assets of the covered financial 
company; and 
(B) all claimants that are similarly situ-
ated under paragraph (1) receive not less than 
the amount provided in paragraphs (2) and (3) 
of subsection (d).
208 
† HR 4173 EAS 
(5) SECURED CLAIMS UNAFFECTED.—This sec-
tion shall not affect secured claims or security entitle-
ments in respect of assets or property held by the cov-
ered financial company, except to the extent that the 
security is insufficient to satisfy the claim, and then 
only with regard to the difference between the claim 
and the amount realized from the security. 
(6) PRIORITY
OF
EXPENSES
AND
UNSECURED 
CLAIMS IN THE ORDERLY LIQUIDATION OF SIPC MEM-
BER.—Where the Corporation is appointed as receiver 
for a covered broker or dealer, unsecured claims 
against such covered broker or dealer, or the Corpora-
tion as receiver for such covered broker or dealer 
under this section, that are proven to the satisfaction 
of the receiver under section 205(e), shall have the 
priority prescribed in paragraph (1), except that— 
(A) SIPC shall be entitled to recover admin-
istrative expenses incurred in performing its re-
sponsibilities under section 205 on an equal 
basis with the Corporation, in accordance with 
paragraph (1)(A); 
(B) the Corporation shall be entitled to re-
cover any amounts paid to customers or to SIPC 
pursuant to section 205(f), in accordance with 
paragraph (1)(B);
209 
† HR 4173 EAS 
(C) SIPC shall be entitled to recover any 
amounts paid out of the SIPC Fund to meet its 
obligations under section 205 and under the Se-
curities Investor Protection Act of 1970 (15 
U.S.C. 78aaa et seq.), which claim shall be sub-
ordinate to the claims payable under subpara-
graphs (A) and (B) of paragraph (1), but senior 
to all other claims; and 
(D) the Corporation may, after paying any 
proven claims to customers under section 205 
and the Securities Investor Protection Act of 
1970 (15 U.S.C. 78aaa et seq.), and as provided 
above, pay dividends on other proven claims, in 
its discretion, and to the extent that funds are 
available, in accordance with the priorities set 
forth in paragraph (1). 
(c) PROVISIONS RELATING TO CONTRACTS ENTERED 
INTO BEFORE APPOINTMENT OF RECEIVER.— 
(1) AUTHORITY TO REPUDIATE CONTRACTS.—In 
addition to any other rights that a receiver may have, 
the Corporation as receiver for any covered financial 
company may disaffirm or repudiate any contract or 
lease— 
(A) to which the covered financial company 
is a party;
210 
† HR 4173 EAS 
(B) the performance of which the Corpora-
tion as receiver, in the discretion of the Corpora-
tion, determines to be burdensome; and 
(C) the disaffirmance or repudiation of 
which the Corporation as receiver determines, in 
the discretion of the Corporation, will promote 
the orderly administration of the affairs of the 
covered financial company. 
(2) TIMING OF REPUDIATION.—The Corporation, 
as receiver for any covered financial company, shall 
determine whether or not to exercise the rights of re-
pudiation under this section within a reasonable pe-
riod of time. 
(3) CLAIMS FOR DAMAGES FOR REPUDIATION.— 
(A) IN GENERAL.—Except as provided in 
paragraphs (4), (5), and (6) and in subpara-
graphs (C), (D), and (E) of this paragraph, the 
liability of the Corporation as receiver for a cov-
ered financial company for the disaffirmance or 
repudiation of any contract pursuant to para-
graph (1) shall be— 
(i) limited to actual direct compen-
satory damages; and 
(ii) determined as of—
211 
† HR 4173 EAS 
(I) the date of the appointment of 
the Corporation as receiver; or 
(II) in the case of any contract or 
agreement referred to in paragraph 
(8), the date of the disaffirmance or re-
pudiation of such contract or agree-
ment. 
(B) NO LIABILITY FOR OTHER DAMAGES.— 
For purposes of subparagraph (A), the term ‘‘ac-
tual direct compensatory damages’’ does not in-
clude— 
(i) punitive or exemplary damages; 
(ii) damages for lost profits or oppor-
tunity; or 
(iii) damages for pain and suffering. 
(C) MEASURE OF DAMAGES FOR REPUDI-
ATION OF QUALIFIED FINANCIAL CONTRACTS.—In 
the case of any qualified financial contract or 
agreement to which paragraph (8) applies, com-
pensatory damages shall be— 
(i) deemed to include normal and rea-
sonable costs of cover or other reasonable 
measures of damages utilized in the indus-
tries for such contract and agreement 
claims; and
212 
† HR 4173 EAS 
(ii) paid in accordance with this para-
graph and subsection (d), except as other-
wise specifically provided in this subsection. 
(D) MEASURE OF DAMAGES FOR REPUDI-
ATION
OR
DISAFFIRMANCE
OF
DEBT
OBLIGA-
TION.—In the case of any debt for borrowed 
money or evidenced by a security, actual direct 
compensatory damages shall be no less than the 
amount lent plus accrued interest plus any 
accreted original issue discount as of the date the 
Corporation was appointed receiver of the cov-
ered financial company and, to the extent that 
an allowed secured claim is secured by property 
the value of which is greater than the amount of 
such claim and any accrued interest through the 
date of repudiation or disaffirmance, such ac-
crued interest pursuant to paragraph (1). 
(E) MEASURE OF DAMAGES FOR REPUDI-
ATION OR DISAFFIRMANCE OF CONTINGENT OBLI-
GATION.—In the case of any contingent obliga-
tion of a covered financial company consisting of 
any obligation under a guarantee, letter of cred-
it, loan commitment, or similar credit obliga-
tion, the Corporation may, by rule or regulation, 
prescribe that actual direct compensatory dam-
213 
† HR 4173 EAS 
ages shall be no less than the estimated value of 
the claim as of the date the Corporation was ap-
pointed receiver of the covered financial com-
pany, as such value is measured based on the 
likelihood that such contingent claim would be-
come fixed and the probable magnitude thereof. 
(4) LEASES UNDER WHICH THE COVERED FINAN-
CIAL COMPANY IS THE LESSEE.— 
(A) IN GENERAL.—If the Corporation as re-
ceiver disaffirms or repudiates a lease under 
which the covered financial company is the les-
see, the receiver shall not be liable for any dam-
ages (other than damages determined pursuant 
to subparagraph (B)) for the disaffirmance or re-
pudiation of such lease. 
(B) PAYMENTS OF RENT.—Notwithstanding 
subparagraph (A), the lessor under a lease to 
which subparagraph (A) would otherwise apply 
shall— 
(i) be entitled to the contractual rent 
accruing before the later of the date on 
which— 
(I) the notice of disaffirmance or 
repudiation is mailed; or
214 
† HR 4173 EAS 
(II) the disaffirmance or repudi-
ation becomes effective, unless the lessor 
is in default or breach of the terms of 
the lease; 
(ii) have no claim for damages under 
any acceleration clause or other penalty 
provision in the lease; and 
(iii) have a claim for any unpaid rent, 
subject to all appropriate offsets and de-
fenses, due as of the date of the appointment 
which shall be paid in accordance with this 
paragraph and subsection (d). 
(5) LEASES UNDER WHICH THE COVERED FINAN-
CIAL COMPANY IS THE LESSOR.— 
(A) IN GENERAL.—If the Corporation as re-
ceiver for a covered financial company repudi-
ates an unexpired written lease of real property 
of the covered financial company under which 
the covered financial company is the lessor and 
the lessee is not, as of the date of such repudi-
ation, in default, the lessee under such lease may 
either— 
(i) treat the lease as terminated by 
such repudiation; or
215 
† HR 4173 EAS 
(ii) remain in possession of the lease-
hold interest for the balance of the term of 
the lease, unless the lessee defaults under the 
terms of the lease after the date of such re-
pudiation. 
(B) PROVISIONS
APPLICABLE
TO
LESSEE 
REMAINING IN POSSESSION.—If any lessee under 
a lease described in subparagraph (A) remains 
in possession of a leasehold interest pursuant to 
clause (ii) of subparagraph (A)— 
(i) the lessee— 
(I) shall continue to pay the con-
tractual rent pursuant to the terms of 
the lease after the date of the repudi-
ation of such lease; and 
(II) may offset against any rent 
payment which accrues after the date 
of the repudiation of the lease, any 
damages which accrue after such date 
due to the nonperformance of any obli-
gation of the covered financial com-
pany under the lease after such date; 
and 
(ii) the Corporation as receiver shall 
not be liable to the lessee for any damages
216 
† HR 4173 EAS 
arising after such date as a result of the re-
pudiation, other than the amount of any 
offset allowed under clause (i)(II). 
(6) CONTRACTS FOR THE SALE OF REAL PROP-
ERTY.— 
(A) IN GENERAL.—If the receiver repudiates 
any contract (which meets the requirements of 
subsection (a)(6)) for the sale of real property, 
and the purchaser of such real property under 
such contract is in possession and is not, as of 
the date of such repudiation, in default, such 
purchaser may either— 
(i) treat the contract as terminated by 
such repudiation; or 
(ii) remain in possession of such real 
property. 
(B) PROVISIONS
APPLICABLE
TO
PUR-
CHASER
REMAINING
IN
POSSESSION.—If any 
purchaser of real property under any contract 
described in subparagraph (A) remains in pos-
session of such property pursuant to clause (ii) 
of subparagraph (A)— 
(i) the purchaser— 
(I) shall continue to make all 
payments due under the contract after
217 
† HR 4173 EAS 
the date of the repudiation of the con-
tract; and 
(II) may offset against any such 
payments any damages which accrue 
after such date due to the nonperform-
ance (after such date) of any obligation 
of the covered financial company under 
the contract; and 
(ii) the Corporation as receiver shall— 
(I) not be liable to the purchaser 
for any damages arising after such 
date as a result of the repudiation, 
other than the amount of any offset al-
lowed under clause (i)(II); 
(II) deliver title to the purchaser 
in accordance with the provisions of 
the contract; and 
(III) have no obligation under the 
contract other than the performance re-
quired under subclause (II). 
(C) ASSIGNMENT AND SALE ALLOWED.— 
(i) IN GENERAL.—No provision of this 
paragraph shall be construed as limiting 
the right of the Corporation as receiver to 
assign the contract described in subpara-
218 
† HR 4173 EAS 
graph (A) and sell the property, subject to 
the contract and the provisions of this para-
graph. 
(ii) NO LIABILITY AFTER ASSIGNMENT 
AND SALE.—If an assignment and sale de-
scribed in clause (i) is consummated, the 
Corporation as receiver shall have no fur-
ther liability under the contract described 
in subparagraph (A) or with respect to the 
real property which was the subject of such 
contract. 
(7) PROVISIONS APPLICABLE TO SERVICE CON-
TRACTS.— 
(A) SERVICES
PERFORMED
BEFORE
AP-
POINTMENT.—In the case of any contract for 
services between any person and any covered fi-
nancial company for which the Corporation has 
been appointed receiver, any claim of such per-
son for services performed before the date of ap-
pointment shall be— 
(i) a claim to be paid in accordance 
with subsections (a), (b), and (d); and 
(ii) deemed to have arisen as of the 
date on which the receiver was appointed.
219 
† HR 4173 EAS 
(B) SERVICES PERFORMED AFTER APPOINT-
MENT AND PRIOR TO REPUDIATION.—If, in the 
case of any contract for services described in sub-
paragraph (A), the Corporation as receiver ac-
cepts performance by the other person before 
making any determination to exercise the right 
of repudiation of such contract under this sec-
tion— 
(i) the other party shall be paid under 
the terms of the contract for the services per-
formed; and 
(ii) the amount of such payment shall 
be treated as an administrative expense of 
the receivership. 
(C) ACCEPTANCE OF PERFORMANCE NO BAR 
TO SUBSEQUENT REPUDIATION.—The acceptance 
by the Corporation as receiver for services re-
ferred to in subparagraph (B) in connection 
with a contract described in subparagraph (B) 
shall not affect the right of the Corporation as 
receiver to repudiate such contract under this 
section at any time after such performance. 
(8) 
CERTAIN
QUALIFIED
FINANCIAL
CON-
TRACTS.—
220 
† HR 4173 EAS 
(A) RIGHTS OF PARTIES TO CONTRACTS.— 
Subject to subsection (a)(8) and paragraphs (9) 
and (10) of this subsection, and notwithstanding 
any other provision of this section, any other 
provision of Federal law, or the law of any 
State, no person shall be stayed or prohibited 
from exercising— 
(i) any right that such person has to 
cause the termination, liquidation, or accel-
eration of any qualified financial contract 
with a covered financial company which 
arises upon the date of appointment of the 
Corporation as receiver for such covered fi-
nancial company at any time after such 
appointment; 
(ii) any right under any security 
agreement or arrangement or other credit 
enhancement related to one or more quali-
fied financial contracts described in clause 
(i); or 
(iii) any right to offset or net out any 
termination value, payment amount, or 
other transfer obligation arising under or in 
connection with 1 or more contracts or 
agreements described in clause (i), includ-
221 
† HR 4173 EAS 
ing any master agreement for such con-
tracts or agreements. 
(B) APPLICABILITY
OF
OTHER
PROVI-
SIONS.—Subsection (a)(8) shall apply in the case 
of any judicial action or proceeding brought 
against the Corporation as receiver referred to in 
subparagraph (A), or the subject covered finan-
cial company, by any party to a contract or 
agreement described in subparagraph (A)(i) with 
such covered financial company. 
(C) 
CERTAIN
TRANSFERS
NOT
AVOID-
ABLE.— 
(i) 
IN
GENERAL.—Notwithstanding 
subsection (a)(11), (a)(12), or (c)(12), sec-
tion 5242 of the Revised Statutes of the 
United States, or any other provision of 
Federal or State law relating to the avoid-
ance of preferential or fraudulent transfers, 
the Corporation, whether acting as the Cor-
poration or as receiver for a covered finan-
cial company, may not avoid any transfer 
of money or other property in connection 
with any qualified financial contract with 
a covered financial company.
222 
† HR 4173 EAS 
(ii) EXCEPTION FOR CERTAIN TRANS-
FERS.—Clause (i) shall not apply to any 
transfer of money or other property in con-
nection with any qualified financial con-
tract with a covered financial company if 
the transferee had actual intent to hinder, 
delay, or defraud such company, the credi-
tors of such company, or the Corporation as 
receiver appointed for such company. 
(D) CERTAIN CONTRACTS AND AGREEMENTS 
DEFINED.—For purposes of this subsection, the 
following definitions shall apply: 
(i) 
QUALIFIED
FINANCIAL
CON-
TRACT.—The term ‘‘qualified financial con-
tract’’ means any securities contract, com-
modity contract, forward contract, repur-
chase agreement, swap agreement, and any 
similar agreement that the Corporation de-
termines by regulation, resolution, or order 
to be a qualified financial contract for pur-
poses of this paragraph. 
(ii) SECURITIES CONTRACT.—The term 
‘‘securities contract’’— 
(I) means a contract for the pur-
chase, sale, or loan of a security, a cer-
223 
† HR 4173 EAS 
tificate of deposit, a mortgage loan, 
any interest in a mortgage loan, a 
group or index of securities, certificates 
of deposit, or mortgage loans or inter-
ests therein (including any interest 
therein or based on the value thereof), 
or any option on any of the foregoing, 
including any option to purchase or 
sell any such security, certificate of de-
posit, mortgage loan, interest, group or 
index, or option, and including any re-
purchase or reverse repurchase trans-
action on any such security, certificate 
of deposit, mortgage loan, interest, 
group or index, or option (whether or 
not such repurchase or reverse repur-
chase transaction is a ‘‘repurchase 
agreement’’, as defined in clause (v)); 
(II) does not include any pur-
chase, sale, or repurchase obligation 
under a participation in a commercial 
mortgage loan unless the Corporation 
determines by regulation, resolution, or 
order to include any such agreement 
within the meaning of such term;
224 
† HR 4173 EAS 
(III) means any option entered 
into on a national securities exchange 
relating to foreign currencies; 
(IV) means the guarantee (includ-
ing by novation) by or to any securi-
ties clearing agency of any settlement 
of cash, securities, certificates of de-
posit, mortgage loans or interests there-
in, group or index of securities, certifi-
cates of deposit or mortgage loans or 
interests therein (including any inter-
est therein or based on the value there-
of) or an option on any of the fore-
going, including any option to pur-
chase or sell any such security, certifi-
cate of deposit, mortgage loan, interest, 
group or index, or option (whether or 
not such settlement is in connection 
with any agreement or transaction re-
ferred to in subclauses (I) through 
(XII) (other than subclause (II))); 
(V) means any margin loan; 
(VI) means any extension of cred-
it for the clearance or settlement of se-
curities transactions;
225 
† HR 4173 EAS 
(VII) means any loan transaction 
coupled with a securities collar trans-
action, any prepaid securities forward 
transaction, or any total return swap 
transaction coupled with a securities 
sale transaction; 
(VIII) means any other agreement 
or transaction that is similar to any 
agreement or transaction referred to in 
this clause; 
(IX) means any combination of 
the agreements or transactions referred 
to in this clause; 
(X) means any option to enter 
into any agreement or transaction re-
ferred to in this clause; 
(XI) means a master agreement 
that provides for an agreement or 
transaction referred to in any of sub-
clauses (I) through (X), other than sub-
clause (II), together with all supple-
ments to any such master agreement, 
without regard to whether the master 
agreement provides for an agreement 
or transaction that is not a securities
226 
† HR 4173 EAS 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a securities contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to in 
any of subclauses (I) through (X), other 
than subclause (II); and 
(XII) means any security agree-
ment or arrangement or other credit 
enhancement related to any agreement 
or transaction referred to in this 
clause, including any guarantee or re-
imbursement obligation in connection 
with any agreement or transaction re-
ferred to in this clause. 
(iii) 
COMMODITY
CONTRACT.—The 
term ‘‘commodity contract’’ means— 
(I) with respect to a futures com-
mission merchant, a contract for the 
purchase or sale of a commodity for fu-
ture delivery on, or subject to the rules 
of, a contract market or board of trade;
227 
† HR 4173 EAS 
(II) with respect to a foreign fu-
tures commission merchant, a foreign 
future; 
(III) with respect to a leverage 
transaction merchant, a leverage trans-
action; 
(IV) with respect to a clearing or-
ganization, a contract for the purchase 
or sale of a commodity for future deliv-
ery on, or subject to the rules of, a con-
tract market or board of trade that is 
cleared by such clearing organization, 
or commodity option traded on, or sub-
ject to the rules of, a contract market 
or board of trade that is cleared by 
such clearing organization; 
(V) with respect to a commodity 
options dealer, a commodity option; 
(VI) any other agreement or 
transaction that is similar to any 
agreement or transaction referred to in 
this clause; 
(VII) any combination of the 
agreements or transactions referred to 
in this clause;
228 
† HR 4173 EAS 
(VIII) any option to enter into 
any agreement or transaction referred 
to in this clause; 
(IX) a master agreement that pro-
vides for an agreement or transaction 
referred to in any of subclauses (I) 
through (VIII), together with all sup-
plements to any such master agree-
ment, without regard to whether the 
master agreement provides for an 
agreement or transaction that is not a 
commodity contract under this clause, 
except that the master agreement shall 
be considered to be a commodity con-
tract under this clause only with re-
spect to each agreement or transaction 
under the master agreement that is re-
ferred to in any of subclauses (I) 
through (VIII); or 
(X) any security agreement or ar-
rangement or other credit enhancement 
related to any agreement or trans-
action referred to in this clause, in-
cluding any guarantee or reimburse-
ment obligation in connection with
229 
† HR 4173 EAS 
any agreement or transaction referred 
to in this clause. 
(iv) FORWARD
CONTRACT.—The term 
‘‘forward contract’’ means— 
(I) a contract (other than a com-
modity contract) for the purchase, sale, 
or transfer of a commodity or any 
similar good, article, service, right, or 
interest which is presently or in the fu-
ture becomes the subject of dealing in 
the forward contract trade, or product 
or byproduct thereof, with a maturity 
date that is more than 10 days after 
the date on which the contract is en-
tered into, including a repurchase or 
reverse repurchase transaction (whether 
or not such repurchase or reverse re-
purchase transaction is a ‘‘repurchase 
agreement’’, as defined in clause (v)), 
consignment, lease, swap, hedge trans-
action, deposit, loan, option, allocated 
transaction, unallocated transaction, 
or any other similar agreement;
230 
† HR 4173 EAS 
(II) any combination of agree-
ments or transactions referred to in 
subclauses (I) and (III); 
(III) any option to enter into any 
agreement or transaction referred to in 
subclause (I) or (II); 
(IV) a master agreement that pro-
vides for an agreement or transaction 
referred to in subclause (I), (II), or 
(III), together with all supplements to 
any such master agreement, without 
regard to whether the master agreement 
provides for an agreement or trans-
action that is not a forward contract 
under this clause, except that the mas-
ter agreement shall be considered to be 
a forward contract under this clause 
only with respect to each agreement or 
transaction under the master agree-
ment that is referred to in subclause 
(I), (II), or (III); or 
(V) any security agreement or ar-
rangement or other credit enhancement 
related to any agreement or trans-
action referred to in subclause (I), (II),
231 
† HR 4173 EAS 
(III), or (IV), including any guarantee 
or reimbursement obligation in connec-
tion with any agreement or trans-
action referred to in any such sub-
clause. 
(v) REPURCHASE
AGREEMENT.—The 
term ‘‘repurchase agreement’’ (which defini-
tion also applies to a reverse repurchase 
agreement)— 
(I) means an agreement, includ-
ing related terms, which provides for 
the transfer of one or more certificates 
of deposit, mortgage related securities 
(as such term is defined in section 3 of 
the Securities Exchange Act of 1934), 
mortgage loans, interests in mortgage- 
related securities or mortgage loans, el-
igible bankers’ acceptances, qualified 
foreign government securities (which, 
for purposes of this clause, means a se-
curity that is a direct obligation of, or 
that is fully guaranteed by, the central 
government of a member of the Organi-
zation for Economic Cooperation and 
Development, as determined by regula-
232 
† HR 4173 EAS 
tion or order adopted by the Board of 
Governors), or securities that are direct 
obligations of, or that are fully guaran-
teed by, the United States or any agen-
cy of the United States against the 
transfer of funds by the transferee of 
such certificates of deposit, eligible 
bankers’ acceptances, securities, mort-
gage loans, or interests with a simulta-
neous agreement by such transferee to 
transfer to the transferor thereof certifi-
cates of deposit, eligible bankers’ ac-
ceptances, securities, mortgage loans, 
or interests as described above, at a 
date certain not later than 1 year after 
such transfers or on demand, against 
the transfer of funds, or any other 
similar agreement; 
(II) does not include any repur-
chase obligation under a participation 
in a commercial mortgage loan, unless 
the Corporation determines, by regula-
tion, resolution, or order to include 
any such participation within the 
meaning of such term;
233 
† HR 4173 EAS 
(III) means any combination of 
agreements or transactions referred to 
in subclauses (I) and (IV); 
(IV) means any option to enter 
into any agreement or transaction re-
ferred to in subclause (I) or (III); 
(V) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause (I), 
(III), or (IV), together with all supple-
ments to any such master agreement, 
without regard to whether the master 
agreement provides for an agreement 
or transaction that is not a repurchase 
agreement under this clause, except 
that the master agreement shall be con-
sidered to be a repurchase agreement 
under this subclause only with respect 
to each agreement or transaction under 
the master agreement that is referred to 
in subclause (I), (III), or (IV); and 
(VI) means any security agree-
ment or arrangement or other credit 
enhancement related to any agreement 
or transaction referred to in subclause
234 
† HR 4173 EAS 
(I), (III), (IV), or (V), including any 
guarantee or reimbursement obligation 
in connection with any agreement or 
transaction referred to in any such 
subclause. 
(vi) SWAP
AGREEMENT.—The term 
‘‘swap agreement’’ means— 
(I) any agreement, including the 
terms and conditions incorporated by 
reference in any such agreement, which 
is an interest rate swap, option, future, 
or forward agreement, including a rate 
floor, rate cap, rate collar, cross-cur-
rency rate swap, and basis swap; a 
spot, same day-tomorrow, tomorrow- 
next, forward, or other foreign ex-
change, precious metals, or other com-
modity agreement; a currency swap, 
option, future, or forward agreement; 
an equity index or equity swap, op-
tion, future, or forward agreement; a 
debt index or debt swap, option, future, 
or forward agreement; a total return, 
credit spread or credit swap, option, 
future, or forward agreement; a com-
235 
† HR 4173 EAS 
modity index or commodity swap, op-
tion, future, or forward agreement; 
weather swap, option, future, or for-
ward agreement; an emissions swap, 
option, future, or forward agreement; 
or an inflation swap, option, future, or 
forward agreement; 
(II) any agreement or transaction 
that is similar to any other agreement 
or transaction referred to in this clause 
and that is of a type that has been, is 
presently, or in the future becomes, the 
subject of recurrent dealings in the 
swap or other derivatives markets (in-
cluding terms and conditions incor-
porated by reference in such agree-
ment) and that is a forward, swap, fu-
ture, option, or spot transaction on one 
or more rates, currencies, commodities, 
equity securities or other equity instru-
ments, debt securities or other debt in-
struments, quantitative measures asso-
ciated with an occurrence, extent of an 
occurrence, or contingency associated 
with a financial, commercial, or eco-
236 
† HR 4173 EAS 
nomic consequence, or economic or fi-
nancial indices or measures of eco-
nomic or financial risk or value; 
(III) any combination of agree-
ments or transactions referred to in 
this clause; 
(IV) any option to enter into any 
agreement or transaction referred to in 
this clause; 
(V) a master agreement that pro-
vides for an agreement or transaction 
referred to in subclause (I), (II), (III), 
or (IV), together with all supplements 
to any such master agreement, without 
regard to whether the master agreement 
contains an agreement or transaction 
that is not a swap agreement under 
this clause, except that the master 
agreement shall be considered to be a 
swap agreement under this clause only 
with respect to each agreement or 
transaction under the master agree-
ment that is referred to in subclause 
(I), (II), (III), or (IV); and
237 
† HR 4173 EAS 
(VI) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in any of 
clauses (I) through (V), including any 
guarantee or reimbursement obligation 
in connection with any agreement or 
transaction referred to in any such 
clause. 
(vii) DEFINITIONS
RELATING
TO
DE-
FAULT.—When used in this paragraph and 
paragraph (10)— 
(I) the term ‘‘default’’ means, 
with respect to a covered financial 
company, any adjudication or other of-
ficial decision by any court of com-
petent jurisdiction, or other public au-
thority pursuant to which the Corpora-
tion has been appointed receiver; and 
(II) the term ‘‘in danger of de-
fault’’ means a covered financial com-
pany with respect to which the Cor-
poration or appropriate State author-
ity has determined that—
238 
† HR 4173 EAS 
(aa) in the opinion of the 
Corporation or such authority— 
(AA) the covered finan-
cial company is not likely to 
be able to pay its obligations 
in the normal course of busi-
ness; and 
(BB) there is no reason-
able prospect that the covered 
financial company will be 
able to pay such obligations 
without Federal assistance; 
or 
(bb) in the opinion of the 
Corporation or such authority— 
(AA) the covered finan-
cial company has incurred or 
is likely to incur losses that 
will deplete all or substan-
tially all of its capital; and 
(BB) there is no reason-
able prospect that the capital 
will be replenished without 
Federal assistance.
239 
† HR 4173 EAS 
(viii) TREATMENT OF MASTER AGREE-
MENT
AS
ONE
AGREEMENT.—Any master 
agreement for any contract or agreement de-
scribed in any of clauses (i) through (vi) (or 
any master agreement for such master 
agreement or agreements), together with all 
supplements to such master agreement, shall 
be treated as a single agreement and a sin-
gle qualified financial contact. If a master 
agreement contains provisions relating to 
agreements or transactions that are not 
themselves qualified financial contracts, the 
master agreement shall be deemed to be a 
qualified financial contract only with re-
spect to those transactions that are them-
selves qualified financial contracts. 
(ix) TRANSFER.—The term ‘‘transfer’’ 
means every mode, direct or indirect, abso-
lute or conditional, voluntary or involun-
tary, of disposing of or parting with prop-
erty or with an interest in property, includ-
ing retention of title as a security interest 
and foreclosure of the equity of redemption 
of the covered financial company.
240 
† HR 4173 EAS 
(x) PERSON.—The term ‘‘person’’ in-
cludes any governmental entity in addition 
to any entity included in the definition of 
such term in section 1, title 1, United 
States Code. 
(E) CLARIFICATION.—No provision of law 
shall be construed as limiting the right or power 
of the Corporation, or authorizing any court or 
agency to limit or delay, in any manner, the 
right or power of the Corporation to transfer any 
qualified financial contract in accordance with 
paragraphs (9) and (10) of this subsection or to 
disaffirm or repudiate any such contract in ac-
cordance with subsection (c)(1). 
(F) WALKAWAY CLAUSES NOT EFFECTIVE.— 
(i) IN GENERAL.—Notwithstanding the 
provisions of subparagraph (A) of this 
paragraph and sections 403 and 404 of the 
Federal Deposit Insurance Corporation Im-
provement Act of 1991, no walkaway clause 
shall be enforceable in a qualified financial 
contract of a covered financial company in 
default. 
(ii) LIMITED SUSPENSION OF CERTAIN 
OBLIGATIONS.—In the case of a qualified fi-
241 
† HR 4173 EAS 
nancial contract referred to in clause (i), 
any payment or delivery obligations other-
wise due from a party pursuant to the 
qualified financial contract shall be sus-
pended from the time at which the Corpora-
tion is appointed as receiver until the ear-
lier of— 
(I) the time at which such party 
receives notice that such contract has 
been transferred pursuant to para-
graph (10)(A); or 
(II) 5:00 p.m. (eastern time) on 
the 3rd business day following the date 
of the appointment of the Corporation 
as receiver. 
(iii) WALKAWAY
CLAUSE
DEFINED.— 
For purposes of this subparagraph, the term 
‘‘walkaway clause’’ means any provision in 
a qualified financial contract that suspends, 
conditions, or extinguishes a payment obli-
gation of a party, in whole or in part, or 
does not create a payment obligation of a 
party that would otherwise exist, solely be-
cause of the status of such party as a non-
defaulting party in connection with the in-
242 
† HR 4173 EAS 
solvency of a covered financial company 
that is a party to the contract or the ap-
pointment of or the exercise of rights or 
powers by the Corporation as receiver for 
such covered financial company, and not as 
a result of the exercise by a party of any 
right to offset, setoff, or net obligations that 
exist under the contract, any other contract 
between those parties, or applicable law. 
(iv) CERTAIN OBLIGATIONS TO CLEAR-
ING ORGANIZATIONS.—In the event that the 
Corporation has been appointed as receiver 
for a covered financial company which is a 
party to any qualified financial contract 
cleared by or subject to the rules of a clear-
ing organization (as defined in subsection 
(c)(9)(D)), the receiver shall use its best ef-
forts to meet all margin, collateral, and set-
tlement obligations of the covered financial 
company that arise under qualified finan-
cial contracts (other than any margin, col-
lateral, or settlement obligation that is not 
enforceable against the receiver under para-
graph (8)(F)(i) or paragraph (10)(B)), as 
required by the rules of the clearing organi-
243 
† HR 4173 EAS 
zation when due, and such obligations shall 
not be suspended pursuant to paragraph 
(8)(F)(ii). 
Notwithstanding 
paragraph 
(8)(F)(ii) or (10)(B), if the receiver fails to 
satisfy any such margin, collateral, or set-
tlement obligations under the rules of the 
clearing organization, the clearing organi-
zation shall have the immediate right to ex-
ercise, and shall not be stayed from exer-
cising, all of its rights and remedies under 
its rules and applicable law with respect to 
any qualified financial contract of the cov-
ered financial company, including, without 
limitation, the right to liquidate all posi-
tions and collateral of such covered finan-
cial company under the company’s qualified 
financial contracts, and suspend or cease to 
act for such covered financial company, all 
in accordance with the rules of the clearing 
organization. 
(G) RECORDKEEPING.— 
(i) JOINT RULEMAKING.—The Federal 
primary financial regulatory agencies shall 
jointly prescribe regulations requiring that 
financial companies maintain such records
244 
† HR 4173 EAS 
with respect to qualified financial contracts 
(including market valuations) that the Fed-
eral primary financial regulatory agencies 
determine to be necessary or appropriate in 
order to assist the Corporation as receiver 
for a covered financial company in being 
able to exercise its rights and fulfill its obli-
gations under this paragraph or paragraph 
(9) or (10). 
(ii) TIMEFRAME.—The Federal pri-
mary financial regulatory agencies shall 
prescribe joint final or interim final regula-
tions not later than 24 months after the 
date of enactment of this Act. 
(iii) BACK-UP RULEMAKING AUTHOR-
ITY.—If the Federal primary financial reg-
ulatory agencies do not prescribe joint final 
or interim final regulations within the time 
frame in clause (ii), the Chairperson of the 
Council shall prescribe, in consultation with 
the Corporation, the regulations required by 
clause (i). 
(iv) CATEGORIZATION AND TIERING.— 
The joint regulations prescribed under 
clause (i) shall, as appropriate, differentiate
245 
† HR 4173 EAS 
among financial companies by taking into 
consideration their size, risk, complexity, le-
verage, frequency and dollar amount of 
qualified financial contracts, interconnect-
edness to the financial system, and any 
other factors deemed appropriate. 
(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.— 
(A) IN GENERAL.—In making any transfer 
of assets or liabilities of a covered financial com-
pany in default, which includes any qualified fi-
nancial contract, the Corporation as receiver for 
such covered financial company shall either— 
(i) transfer to one financial institu-
tion, other than a financial institution for 
which a conservator, receiver, trustee in 
bankruptcy, or other legal custodian has 
been appointed or which is otherwise the 
subject of a bankruptcy or insolvency pro-
ceeding— 
(I) all qualified financial con-
tracts between any person or any affil-
iate of such person and the covered fi-
nancial company in default;
246 
† HR 4173 EAS 
(II) all claims of such person or 
any affiliate of such person against 
such covered financial company under 
any such contract (other than any 
claim which, under the terms of any 
such contract, is subordinated to the 
claims of general unsecured creditors of 
such company); 
(III) all claims of such covered fi-
nancial company against such person 
or any affiliate of such person under 
any such contract; and 
(IV) all property securing or any 
other credit enhancement for any con-
tract described in subclause (I) or any 
claim described in subclause (II) or 
(III) under any such contract; or 
(ii) transfer none of the qualified fi-
nancial contracts, claims, property or other 
credit enhancement referred to in clause (i) 
(with respect to such person and any affil-
iate of such person). 
(B) TRANSFER TO FOREIGN BANK, FINAN-
CIAL
INSTITUTION, 
OR
BRANCH
OR
AGENCY 
THEREOF.—In transferring any qualified finan-
247 
† HR 4173 EAS 
cial contracts and related claims and property 
under subparagraph (A)(i), the Corporation as 
receiver for the covered financial company shall 
not make such transfer to a foreign bank, finan-
cial institution organized under the laws of a 
foreign country, or a branch or agency of a for-
eign bank or financial institution unless, under 
the law applicable to such bank, financial insti-
tution, branch or agency, to the qualified finan-
cial contracts, and to any netting contract, any 
security agreement or arrangement or other cred-
it enhancement related to one or more qualified 
financial contracts, the contractual rights of the 
parties to such qualified financial contracts, net-
ting contracts, security agreements or arrange-
ments, or other credit enhancements are enforce-
able substantially to the same extent as per-
mitted under this section. 
(C) TRANSFER OF CONTRACTS SUBJECT TO 
THE RULES OF A CLEARING ORGANIZATION.—In 
the event that the Corporation as receiver for a 
financial institution transfers any qualified fi-
nancial contract and related claims, property, or 
credit enhancement pursuant to subparagraph 
(A)(i) and such contract is cleared by or subject
248 
† HR 4173 EAS 
to the rules of a clearing organization, the clear-
ing organization shall not be required to accept 
the transferee as a member by virtue of the 
transfer. 
(D) DEFINITIONS.—For purposes of this 
paragraph— 
(i) the term ‘‘financial institution’’ 
means a broker or dealer, a depository in-
stitution, a futures commission merchant, a 
bridge financial company, or any other in-
stitution determined by the Corporation, by 
regulation, to be a financial institution; 
and 
(ii) the term ‘‘clearing organization’’ 
has the same meaning as in section 402 of 
the Federal Deposit Insurance Corporation 
Improvement Act of 1991. 
(10) NOTIFICATION OF TRANSFER.— 
(A) IN GENERAL.— 
(i) NOTICE.—The Corporation shall 
provide notice in accordance with clause 
(ii), if— 
(I) the Corporation as receiver for 
a covered financial company in default 
or in danger of default transfers any
249 
† HR 4173 EAS 
assets or liabilities of the covered fi-
nancial company; and 
(II) the transfer includes any 
qualified financial contract. 
(ii) TIMING.—The Corporation as re-
ceiver for a covered financial company shall 
notify any person who is a party to any 
contract described in clause (i) of such 
transfer not later than 5:00 p.m. (eastern 
time) on the 3rd business day following the 
date of the appointment of the Corporation 
as receiver. 
(B) CERTAIN RIGHTS NOT ENFORCEABLE.— 
(i) RECEIVERSHIP.—A person who is a 
party to a qualified financial contract with 
a covered financial company may not exer-
cise any right that such person has to ter-
minate, liquidate, or net such contract 
under paragraph (8)(A) solely by reason of 
or incidental to the appointment under this 
section of the Corporation as receiver for the 
covered financial company (or the insol-
vency or financial condition of the covered 
financial company for which the Corpora-
tion has been appointed as receiver)—
250 
† HR 4173 EAS 
(I) until 5:00 p.m. (eastern time) 
on the 3rd business day following the 
date of the appointment; or 
(II) after the person has received 
notice that the contract has been trans-
ferred pursuant to paragraph (9)(A). 
(ii) NOTICE.—For purposes of this 
paragraph, the Corporation as receiver for a 
covered financial company shall be deemed 
to have notified a person who is a party to 
a qualified financial contract with such cov-
ered financial company, if the Corporation 
has taken steps reasonably calculated to 
provide notice to such person by the time 
specified in subparagraph (A). 
(C) TREATMENT
OF
BRIDGE
FINANCIAL 
COMPANY.—For purposes of paragraph (9), a 
bridge financial company shall not be considered 
to be a covered financial company for which a 
conservator, receiver, trustee in bankruptcy, or 
other legal custodian has been appointed, or 
which is otherwise the subject of a bankruptcy or 
insolvency proceeding. 
(D) BUSINESS
DAY
DEFINED.—For pur-
poses of this paragraph, the term ‘‘business day’’
251 
† HR 4173 EAS 
means any day other than any Saturday, Sun-
day, or any day on which either the New York 
Stock Exchange or the Federal Reserve Bank of 
New York is closed. 
(11) 
DISAFFIRMANCE
OR
REPUDIATION
OF 
QUALIFIED FINANCIAL CONTRACTS.—In exercising the 
rights of disaffirmance or repudiation of the Corpora-
tion as receiver with respect to any qualified finan-
cial contract to which a covered financial company is 
a party, the Corporation shall either— 
(A) disaffirm or repudiate all qualified fi-
nancial contracts between— 
(i) any person or any affiliate of such 
person; and 
(ii) the covered financial company in 
default; or 
(B) disaffirm or repudiate none of the 
qualified financial contracts referred to in sub-
paragraph (A) (with respect to such person or 
any affiliate of such person). 
(12) CERTAIN SECURITY AND CUSTOMER INTER-
ESTS
NOT
AVOIDABLE.—No provision of this sub-
section shall be construed as permitting the avoidance 
of any—
252 
† HR 4173 EAS 
(A) legally enforceable or perfected security 
interest in any of the assets of any covered fi-
nancial company, except in accordance with sub-
section (a)(11); or 
(B) legally enforceable interest in customer 
property, security entitlements in respect of as-
sets or property held by the covered financial 
company for any security entitlement holder. 
(13) AUTHORITY TO ENFORCE CONTRACTS.— 
(A) IN GENERAL.—The Corporation, as re-
ceiver for a covered financial company, may en-
force any contract, other than a liability insur-
ance contract of a director or officer, a financial 
institution bond entered into by the covered fi-
nancial company, notwithstanding any provi-
sion of the contract providing for termination, 
default, acceleration, or exercise of rights upon, 
or solely by reason of, insolvency, the appoint-
ment of or the exercise of rights or powers by the 
Corporation as receiver, the filing of the petition 
pursuant to section 202(a)(1), or the issuance of 
the recommendations or determination, or any 
actions or events occurring in connection there-
with or as a result thereof, pursuant to section 
203.
253 
† HR 4173 EAS 
(B) CERTAIN RIGHTS NOT AFFECTED.—No 
provision of this paragraph may be construed as 
impairing or affecting any right of the Corpora-
tion as receiver to enforce or recover under a li-
ability insurance contract of a director or officer 
or financial institution bond under other appli-
cable law. 
(C) CONSENT
REQUIREMENT
AND
IPSO 
FACTO CLAUSES.— 
(i) IN GENERAL.—Except as otherwise 
provided by this section, no person may ex-
ercise any right or power to terminate, ac-
celerate, or declare a default under any con-
tract to which the covered financial com-
pany is a party (and no provision in any 
such contract providing for such default, 
termination, or acceleration shall be en-
forceable), or to obtain possession of or exer-
cise control over any property of the covered 
financial company or affect any contractual 
rights of the covered financial company, 
without the consent of the Corporation as 
receiver for the covered financial company 
during the 90 day period beginning from
254 
† HR 4173 EAS 
the appointment of the Corporation as re-
ceiver. 
(ii) EXCEPTIONS.—No provision of this 
subparagraph shall apply to a director or 
officer liability insurance contract or a fi-
nancial institution bond, to the rights of 
parties to certain qualified financial con-
tracts pursuant to paragraph (8), or to the 
rights of parties to netting contracts pursu-
ant to subtitle A of title IV of the Federal 
Deposit Insurance Corporation Improve-
ment Act of 1991 (12 U.S.C. 4401 et seq.), 
or shall be construed as permitting the Cor-
poration as receiver to fail to comply with 
otherwise enforceable provisions of such con-
tract. 
(D) CONTRACTS TO EXTEND CREDIT.—Not-
withstanding any other provision in this title, if 
the Corporation as receiver enforces any contract 
to extend credit to the covered financial company 
or bridge financial company, any valid and en-
forceable obligation to repay such debt shall be 
paid by the Corporation as receiver, as an ad-
ministrative expense of the receivership.
255 
† HR 4173 EAS 
(14) EXCEPTION FOR FEDERAL RESERVE BANKS 
AND CORPORATION SECURITY INTEREST.—No provi-
sion of this subsection shall apply with respect to— 
(A) any extension of credit from any Fed-
eral reserve bank or the Corporation to any cov-
ered financial company; or 
(B) any security interest in the assets of the 
covered financial company securing any such ex-
tension of credit. 
(15) SAVINGS CLAUSE.—The meanings of terms 
used in this subsection are applicable for purposes of 
this subsection only, and shall not be construed or ap-
plied so as to challenge or affect the characterization, 
definition, or treatment of any similar terms under 
any other statute, regulation, or rule, including the 
Gramm-Leach-Bliley Act, the Legal Certainty for 
Bank Products Act of 2000, the securities laws (as 
that term is defined in section 3(a)(47) of the Securi-
ties Exchange Act of 1934), and the Commodity Ex-
change Act. 
(16) ENFORCEMENT OF CONTRACTS GUARANTEED 
BY THE COVERED FINANCIAL COMPANY.— 
(A) IN GENERAL.—The Corporation, as re-
ceiver for a covered financial company or as re-
ceiver for a subsidiary of a covered financial
256 
† HR 4173 EAS 
company (including an insured depository insti-
tution) shall have the power to enforce contracts 
of subsidiaries or affiliates of the covered finan-
cial company, the obligations under which are 
guaranteed or otherwise supported by or linked 
to the covered financial company, notwith-
standing any contractual right to cause the ter-
mination, liquidation, or acceleration of such 
contracts based solely on the insolvency, finan-
cial condition, or receivership of the covered fi-
nancial company, if— 
(i) such guaranty or other support and 
all related assets and liabilities are trans-
ferred to and assumed by a bridge financial 
company or a third party (other than a 
third party for which a conservator, re-
ceiver, trustee in bankruptcy, or other legal 
custodian has been appointed, or which is 
otherwise the subject of a bankruptcy or in-
solvency proceeding) within the same period 
of time as the Corporation is entitled to 
transfer the qualified financial contracts of 
such covered financial company; or
257 
† HR 4173 EAS 
(ii) the Corporation, as receiver, other-
wise provides adequate protection with re-
spect to such obligations. 
(B) RULE
OF
CONSTRUCTION.—For pur-
poses of this paragraph, a bridge financial com-
pany shall not be considered to be a third party 
for which a conservator, receiver, trustee in 
bankruptcy, or other legal custodian has been ap-
pointed, or which is otherwise the subject of a 
bankruptcy or insolvency proceeding. 
(d) VALUATION OF CLAIMS IN DEFAULT.— 
(1) IN
GENERAL.—Notwithstanding any other 
provision of Federal law or the law of any State, and 
regardless of the method utilized by the Corporation 
for a covered financial company, including trans-
actions authorized under subsection (h), this sub-
section shall govern the rights of the creditors of any 
such covered financial company. 
(2) MAXIMUM LIABILITY.—The maximum liabil-
ity of the Corporation, acting as receiver for a covered 
financial company or in any other capacity, to any 
person having a claim against the Corporation as re-
ceiver or the covered financial company for which the 
Corporation is appointed shall equal the amount that 
such claimant would have received if—
258 
† HR 4173 EAS 
(A) the Corporation had not been appointed 
receiver with respect to the covered financial 
company; and 
(B) the covered financial company had been 
liquidated under chapter 7 of the Bankruptcy 
Code, or any similar provision of State insol-
vency law applicable to the covered financial 
company. 
(3) SPECIAL PROVISION FOR ORDERLY LIQUIDA-
TION BY SIPC.—The maximum liability of the Cor-
poration, acting as receiver or in its corporate capac-
ity for any covered broker or dealer to any customer 
of such covered broker or dealer, with respect to cus-
tomer property of such customer, shall be— 
(A) equal to the amount that such customer 
would have received with respect to such cus-
tomer property in a case initiated by SIPC 
under the Securities Investor Protection Act of 
1970 (15 U.S.C. 78aaa et seq.); and 
(B) determined as of the close of business on 
the date on which the Corporation is appointed 
as receiver. 
(4) ADDITIONAL PAYMENTS AUTHORIZED.— 
(A) IN
GENERAL.—Subject to subsection 
(o)(1)(E)(ii), the Corporation, with the approval
259 
† HR 4173 EAS 
of the Secretary, may make additional payments 
or credit additional amounts to or with respect 
to or for the account of any claimant or category 
of claimants of the covered financial company, if 
the Corporation determines that such payments 
or credits are necessary or appropriate to mini-
mize losses to the Corporation as receiver from 
the orderly liquidation of the covered financial 
company under this section. 
(B) LIMITATIONS.— 
(i) PROHIBITION.—The Corporation 
shall not make any payments or credit 
amounts to any claimant or category of 
claimants that would result in any claim-
ant receiving more than the face value 
amount of any claim that is proven to the 
satisfaction of the Corporation. 
(ii) NO OBLIGATION.—Notwithstanding 
any other provision of Federal or State law, 
or the Constitution of any State, the Cor-
poration shall not be obligated, as a result 
of having made any payment under sub-
paragraph (A) or credited any amount de-
scribed in subparagraph (A) to or with re-
spect to, or for the account, of any claimant
260 
† HR 4173 EAS 
or category of claimants, to make payments 
to any other claimant or category of claim-
ants. 
(C) MANNER OF PAYMENT.—The Corpora-
tion may make payments or credit amounts 
under subparagraph (A) directly to the claim-
ants or may make such payments or credit such 
amounts to a company other than a covered fi-
nancial company or a bridge financial company 
established with respect thereto in order to in-
duce such other company to accept liability for 
such claims. 
(e) LIMITATION ON COURT ACTION.—Except as pro-
vided in this title, no court may take any action to restrain 
or affect the exercise of powers or functions of the receiver 
hereunder, and any remedy against the Corporation or re-
ceiver shall be limited to money damages determined in ac-
cordance with this title. 
(f) LIABILITY OF DIRECTORS AND OFFICERS.— 
(1) IN GENERAL.—A director or officer of a cov-
ered financial company may be held personally liable 
for monetary damages in any civil action described 
in paragraph (2) by, on behalf of, or at the request 
or direction of the Corporation, which action is pros-
261 
† HR 4173 EAS 
ecuted wholly or partially for the benefit of the Cor-
poration— 
(A) acting as receiver for such covered fi-
nancial company; 
(B) acting based upon a suit, claim, or 
cause of action purchased from, assigned by, or 
otherwise conveyed by the Corporation as re-
ceiver; or 
(C) acting based upon a suit, claim, or 
cause of action purchased from, assigned by, or 
otherwise conveyed in whole or in part by a cov-
ered financial company or its affiliate in connec-
tion with assistance provided under this title. 
(2) ACTIONS
COVERED.—Paragraph (1) shall 
apply with respect to actions for gross negligence, in-
cluding any similar conduct or conduct that dem-
onstrates a greater disregard of a duty of care (than 
gross negligence) including intentional tortious con-
duct, as such terms are defined and determined under 
applicable State law. 
(3) SAVINGS
CLAUSE.—Nothing in this sub-
section shall impair or affect any right of the Cor-
poration under other applicable law. 
(g) DAMAGES.—In any proceeding related to any 
claim against a director, officer, employee, agent, attorney,
262 
† HR 4173 EAS 
accountant, or appraiser of a covered financial company, 
or any other party employed by or providing services to 
a covered financial company, recoverable damages deter-
mined to result from the improvident or otherwise improper 
use or investment of any assets of the covered financial com-
pany shall include principal losses and appropriate inter-
est. 
(h) BRIDGE FINANCIAL COMPANIES.— 
(1) ORGANIZATION.— 
(A) PURPOSE.—The Corporation, as re-
ceiver for one or more covered financial compa-
nies or in anticipation of being appointed re-
ceiver for one or more covered financial compa-
nies, may organize one or more bridge financial 
companies in accordance with this subsection. 
(B) AUTHORITIES.—Upon the creation of a 
bridge financial company under subparagraph 
(A) with respect to a covered financial company, 
such bridge financial company may— 
(i) assume such liabilities (including 
liabilities associated with any trust or cus-
tody business, but excluding any liabilities 
that count as regulatory capital) of such 
covered financial company as the Corpora-
263 
† HR 4173 EAS 
tion may, in its discretion, determine to be 
appropriate; 
(ii) purchase such assets (including as-
sets associated with any trust or custody 
business) of such covered financial company 
as the Corporation may, in its discretion, 
determine to be appropriate; and 
(iii) perform any other temporary 
function which the Corporation may, in its 
discretion, prescribe in accordance with this 
section. 
(2) CHARTER AND ESTABLISHMENT.— 
(A) ESTABLISHMENT.—Except as provided 
in subparagraph (H), where the covered finan-
cial company is a covered broker or dealer, the 
Corporation, as receiver for a covered financial 
company, may grant a Federal charter to and 
approve articles of association for one or more 
bridge financial company or companies, with re-
spect to such covered financial company which 
shall, by operation of law and immediately upon 
issuance of its charter and approval of its arti-
cles of association, be established and operate in 
accordance with, and subject to, such charter, ar-
ticles, and this section.
264 
† HR 4173 EAS 
(B) MANAGEMENT.—Upon its establish-
ment, a bridge financial company shall be under 
the management of a board of directors ap-
pointed by the Corporation. 
(C) ARTICLES OF ASSOCIATION.—The arti-
cles of association and organization certificate of 
a bridge financial company shall have such 
terms as the Corporation may provide, and shall 
be executed by such representatives as the Cor-
poration may designate. 
(D) TERMS
OF
CHARTER; RIGHTS
AND 
PRIVILEGES.—Subject to and in accordance with 
the provisions of this subsection, the Corporation 
shall— 
(i) establish the terms of the charter of 
a bridge financial company and the rights, 
powers, authorities, and privileges of a 
bridge financial company granted by the 
charter or as an incident thereto; and 
(ii) provide for, and establish the terms 
and conditions governing, the management 
(including the bylaws and the number of di-
rectors of the board of directors) and oper-
ations of the bridge financial company.
265 
† HR 4173 EAS 
(E) TRANSFER OF RIGHTS AND PRIVILEGES 
OF COVERED FINANCIAL COMPANY.— 
(i) 
IN
GENERAL.—Notwithstanding 
any other provision of Federal or State law, 
the Corporation may provide for a bridge 
financial company to succeed to and assume 
any rights, powers, authorities, or privileges 
of the covered financial company with re-
spect to which the bridge financial company 
was established and, upon such determina-
tion by the Corporation, the bridge finan-
cial company shall immediately and by op-
eration of law succeed to and assume such 
rights, powers, authorities, and privileges. 
(ii) EFFECTIVE WITHOUT APPROVAL.— 
Any succession to or assumption by a 
bridge financial company of rights, powers, 
authorities, or privileges of a covered finan-
cial company under clause (i) or otherwise 
shall be effective without any further ap-
proval under Federal or State law, assign-
ment, or consent with respect thereto. 
(F) CORPORATE
GOVERNANCE
AND
ELEC-
TION AND DESIGNATION OF BODY OF LAW.—To 
the extent permitted by the Corporation and con-
266 
† HR 4173 EAS 
sistent with this section and any rules, regula-
tions, or directives issued by the Corporation 
under this section, a bridge financial company 
may elect to follow the corporate governance 
practices and procedures that are applicable to a 
corporation incorporated under the general cor-
poration law of the State of Delaware, or the 
State of incorporation or organization of the cov-
ered financial company with respect to which the 
bridge financial company was established, as 
such law may be amended from time to time. 
(G) CAPITAL.— 
(i) CAPITAL NOT REQUIRED.—Notwith-
standing any other provision of Federal or 
State law, a bridge financial company may, 
if permitted by the Corporation, operate 
without any capital or surplus, or with 
such capital or surplus as the Corporation 
may in its discretion determine to be ap-
propriate. 
(ii) NO CONTRIBUTION BY THE COR-
PORATION REQUIRED.—The Corporation is 
not required to pay capital into a bridge fi-
nancial company or to issue any capital
267 
† HR 4173 EAS 
stock on behalf of a bridge financial com-
pany established under this subsection. 
(iii) AUTHORITY.—If the Corporation 
determines that such action is advisable, the 
Corporation may cause capital stock or 
other securities of a bridge financial com-
pany established with respect to a covered 
financial company to be issued and offered 
for sale in such amounts and on such terms 
and conditions as the Corporation may, in 
its discretion, determine. 
(iv) OPERATING
FUNDS
IN
LIEU
OF 
CAPITAL
AND
IMPLEMENTATION
PLAN.— 
Upon the organization of a bridge financial 
company, and thereafter as the Corporation 
may, in its discretion, determine to be nec-
essary or advisable, the Corporation may 
make available to the bridge financial com-
pany, subject to the plan described in sub-
section (n)(11), funds for the operation of 
the bridge financial company in lieu of cap-
ital. 
(H) BRIDGE BROKERS OR DEALERS.— 
(i) IN GENERAL.—The Corporation, as 
receiver for a covered broker or dealer, may
268 
† HR 4173 EAS 
approve articles of association for one or 
more bridge financial companies with re-
spect to such covered broker or dealer, which 
bridge financial company or companies 
shall, by operation of law and immediately 
upon approval of its articles of associa-
tion— 
(I) be established and deemed reg-
istered with the Commission under the 
Securities Exchange Act of 1934 and a 
member of SIPC; 
(II) operate in accordance with 
such articles and this section; and 
(III) succeed to any and all reg-
istrations and memberships of the cov-
ered financial company with or in any 
self-regulatory organizations. 
(ii) OTHER
REQUIREMENTS.—Except 
as provided in clause (i), and notwith-
standing any other provision of this section, 
the bridge financial company shall be sub-
ject to the Federal securities laws and all 
requirements with respect to being a mem-
ber of a self-regulatory organization, unless 
exempted from any such requirements by
269 
† HR 4173 EAS 
the Commission, as is necessary or appro-
priate in the public interest or for the pro-
tection of investors. 
(iii) TREATMENT
OF
CUSTOMERS.— 
Except as otherwise provided by this title, 
any customer of the covered broker or dealer 
whose account is transferred to a bridge fi-
nancial company shall have all the rights, 
privileges, and protections under section 
205(f) and under the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78aaa et 
seq.), that such customer would have had if 
the account were not transferred from the 
covered financial company under this sub-
paragraph. 
(iv) OPERATION OF BRIDGE BROKERS 
OR DEALERS.—Notwithstanding any other 
provision of this title, the Corporation shall 
not operate any bridge financial company 
created by the Corporation under this title 
with respect to a covered broker or dealer in 
such a manner as to adversely affect the 
ability of customers to promptly access their 
customer property in accordance with ap-
plicable law.
270 
† HR 4173 EAS 
(3) INTERESTS IN AND ASSETS AND OBLIGATIONS 
OF COVERED FINANCIAL COMPANY.—Notwithstanding 
paragraph (1) or (2) or any other provision of law— 
(A) a bridge financial company shall as-
sume, acquire, or succeed to the assets or liabil-
ities of a covered financial company (including 
the assets or liabilities associated with any trust 
or custody business) only to the extent that such 
assets or liabilities are transferred by the Cor-
poration to the bridge financial company in ac-
cordance with, and subject to the restrictions set 
forth in, paragraph (1)(B); and 
(B) a bridge financial company shall not 
assume, acquire, or succeed to any obligation 
that a covered financial company for which the 
Corporation has been appointed receiver may 
have to any shareholder, member, general part-
ner, limited partner, or other person with an in-
terest in the equity of the covered financial com-
pany that arises as a result of the status of that 
person having an equity claim in the covered fi-
nancial company. 
(4) BRIDGE FINANCIAL COMPANY TREATED AS 
BEING
IN
DEFAULT
FOR
CERTAIN
PURPOSES.—A 
bridge financial company shall be treated as a cov-
271 
† HR 4173 EAS 
ered financial company in default at such times and 
for such purposes as the Corporation may, in its dis-
cretion, determine. 
(5) TRANSFER OF ASSETS AND LIABILITIES.— 
(A) AUTHORITY
OF
CORPORATION.—The 
Corporation, as receiver for a covered financial 
company, may transfer any assets and liabilities 
of a covered financial company (including any 
assets or liabilities associated with any trust or 
custody business) to one or more bridge financial 
companies, in accordance with and subject to the 
restrictions of paragraph (1). 
(B) SUBSEQUENT
TRANSFERS.—At any 
time after the establishment of a bridge financial 
company with respect to a covered financial 
company, the Corporation, as receiver, may 
transfer any assets and liabilities of such covered 
financial company as the Corporation may, in 
its discretion, determine to be appropriate in ac-
cordance with and subject to the restrictions of 
paragraph (1). 
(C) TREATMENT
OF
TRUST
OR
CUSTODY 
BUSINESS.—For purposes of this paragraph, the 
trust or custody business, including fiduciary 
appointments, held by any covered financial
272 
† HR 4173 EAS 
company is included among its assets and liabil-
ities. 
(D) EFFECTIVE WITHOUT APPROVAL.—The 
transfer of any assets or liabilities, including 
those associated with any trust or custody busi-
ness of a covered financial company, to a bridge 
financial company shall be effective without any 
further approval under Federal or State law, as-
signment, or consent with respect thereto. 
(E) EQUITABLE TREATMENT OF SIMILARLY 
SITUATED
CREDITORS.—The Corporation shall 
treat all creditors of a covered financial com-
pany that are similarly situated under sub-
section (b)(1), in a similar manner in exercising 
the authority of the Corporation under this sub-
section to transfer any assets or liabilities of the 
covered financial company to one or more bridge 
financial companies established with respect to 
such covered financial company, except that the 
Corporation may take any action (including 
making 
payments, 
subject 
to 
subsection 
(o)(1)(D)(ii)) that does not comply with this sub-
paragraph, if— 
(i) the Corporation determines that 
such action is necessary—
273 
† HR 4173 EAS 
(I) to maximize the value of the 
assets of the covered financial com-
pany; 
(II) to maximize the present value 
return from the sale or other disposi-
tion of the assets of the covered finan-
cial company; or 
(III) to minimize the amount of 
any loss realized upon the sale or other 
disposition of the assets of the covered 
financial company; and 
(ii) all creditors that are similarly sit-
uated under subsection (b)(1) receive not 
less than the amount provided under para-
graphs (2) and (3) of subsection (d). 
(F) LIMITATION ON TRANSFER OF LIABIL-
ITIES.—Notwithstanding any other provision of 
law, the aggregate amount of liabilities of a cov-
ered financial company that are transferred to, 
or assumed by, a bridge financial company from 
a covered financial company may not exceed the 
aggregate amount of the assets of the covered fi-
nancial company that are transferred to, or pur-
chased by, the bridge financial company from the 
covered financial company.
274 
† HR 4173 EAS 
(6) STAY OF JUDICIAL ACTION.—Any judicial ac-
tion to which a bridge financial company becomes a 
party by virtue of its acquisition of any assets or as-
sumption of any liabilities of a covered financial 
company shall be stayed from further proceedings for 
a period of not longer than 45 days (or such longer 
period as may be agreed to upon the consent of all 
parties) at the request of the bridge financial com-
pany. 
(7) AGREEMENTS
AGAINST
INTEREST
OF
THE 
BRIDGE
FINANCIAL
COMPANY.—No agreement that 
tends to diminish or defeat the interest of the bridge 
financial company in any asset of a covered financial 
company acquired by the bridge financial company 
shall be valid against the bridge financial company, 
unless such agreement— 
(A) is in writing; 
(B) was executed by an authorized officer or 
representative of the covered financial company 
or confirmed in the ordinary course of business 
by the covered financial company; and 
(C) has been on the official record of the 
company, since the time of its execution, or with 
which, the party claiming under the agreement 
provides documentation of such agreement and
275 
† HR 4173 EAS 
its authorized execution or confirmation by the 
covered financial company that is acceptable to 
the receiver. 
(8) NO FEDERAL STATUS.— 
(A) AGENCY STATUS.—A bridge financial 
company is not an agency, establishment, or in-
strumentality of the United States. 
(B) EMPLOYEE
STATUS.—Representatives 
for purposes of paragraph (1)(B), directors, offi-
cers, employees, or agents of a bridge financial 
company are not, solely by virtue of service in 
any such capacity, officers or employees of the 
United States. Any employee of the Corporation 
or of any Federal instrumentality who serves at 
the request of the Corporation as a representative 
for purposes of paragraph (1)(B), director, offi-
cer, employee, or agent of a bridge financial 
company shall not— 
(i) solely by virtue of service in any 
such capacity lose any existing status as an 
officer or employee of the United States for 
purposes of title 5, United States Code, or 
any other provision of law; or 
(ii) receive any salary or benefits for 
service in any such capacity with respect to
276 
† HR 4173 EAS 
a bridge financial company in addition to 
such salary or benefits as are obtained 
through employment with the Corporation 
or such Federal instrumentality. 
(9) FUNDING
AUTHORIZED.—The Corporation 
may, subject to the plan described in subsection 
(n)(11), provide funding to facilitate any transaction 
described in subparagraph (A), (B), (C), or (D) of 
paragraph (13) with respect to any bridge financial 
company, or facilitate the acquisition by a bridge fi-
nancial company of any assets, or the assumption of 
any liabilities, of a covered financial company for 
which the Corporation has been appointed receiver. 
(10) EXEMPT
TAX
STATUS.—Notwithstanding 
any other provision of Federal or State law, a bridge 
financial company, its franchise, property, and in-
come shall be exempt from all taxation now or here-
after imposed by the United States, by any territory, 
dependency, or possession thereof, or by any State, 
county, municipality, or local taxing authority. 
(11) FEDERAL
AGENCY
APPROVAL; ANTITRUST 
REVIEW.—If a transaction involving the merger or 
sale of a bridge financial company requires approval 
by a Federal agency, the transaction may not be con-
summated before the 5th calendar day after the date
277 
† HR 4173 EAS 
of approval by the Federal agency responsible for such 
approval with respect thereto. If, in connection with 
any such approval a report on competitive factors 
from the Attorney General is required, the Federal 
agency responsible for such approval shall promptly 
notify the Attorney General of the proposed trans-
action and the Attorney General shall provide the re-
quired report within 10 days of the request. If a noti-
fication is required under section 7A of the Clayton 
Act with respect to such transaction, the required 
waiting period shall end on the 15th day after the 
date on which the Attorney General and the Federal 
Trade Commission receive such notification, unless 
the waiting period is terminated earlier under section 
7A(b)(2) of the Clayton Act, or extended under section 
7A(e)(2) of that Act. 
(12) DURATION
OF
BRIDGE
FINANCIAL
COM-
PANY.—Subject to paragraphs (13) and (14), the sta-
tus of a bridge financial company as such shall ter-
minate at the end of the 2-year period following the 
date on which it was granted a charter. The Corpora-
tion may, in its discretion, extend the status of the 
bridge financial company as such for no more than 
3 additional 1-year periods.
278 
† HR 4173 EAS 
(13) TERMINATION OF BRIDGE FINANCIAL COM-
PANY STATUS.—The status of any bridge financial 
company as such shall terminate upon the earliest 
of— 
(A) the date of the merger or consolidation 
of the bridge financial company with a company 
that is not a bridge financial company; 
(B) at the election of the Corporation, the 
sale of a majority of the capital stock of the 
bridge financial company to a company other 
than the Corporation and other than another 
bridge financial company; 
(C) the sale of 80 percent, or more, of the 
capital stock of the bridge financial company to 
a person other than the Corporation and other 
than another bridge financial company; 
(D) at the election of the Corporation, either 
the assumption of all or substantially all of the 
liabilities of the bridge financial company by a 
company that is not a bridge financial company, 
or the acquisition of all or substantially all of 
the assets of the bridge financial company by a 
company that is not a bridge financial company, 
or other entity as permitted under applicable 
law; and
279 
† HR 4173 EAS 
(E) the expiration of the period provided in 
paragraph (12), or the earlier dissolution of the 
bridge financial company, as provided in para-
graph (15). 
(14) EFFECT OF TERMINATION EVENTS.— 
(A) MERGER OR CONSOLIDATION.—A merg-
er or consolidation, described in paragraph 
(12)(A) shall be conducted in accordance with, 
and shall have the effect provided in, the provi-
sions of applicable law. For the purpose of effect-
ing such a merger or consolidation, the bridge fi-
nancial company shall be treated as a corpora-
tion organized under the laws of the State of 
Delaware (unless the law of another State has 
been selected by the bridge financial company in 
accordance with paragraph (2)(F)), and the Cor-
poration shall be treated as the sole shareholder 
thereof, notwithstanding any other provision of 
State or Federal law. 
(B) CHARTER CONVERSION.—Following the 
sale of a majority of the capital stock of the 
bridge financial company, as provided in para-
graph (13)(B), the Corporation may amend the 
charter of the bridge financial company to reflect 
the termination of the status of the bridge finan-
280 
† HR 4173 EAS 
cial company as such, whereupon the company 
shall have all of the rights, powers, and privi-
leges under its constituent documents and appli-
cable Federal or State law. In connection there-
with, the Corporation may take such steps as 
may be necessary or convenient to reincorporate 
the bridge financial company under the laws of 
a State and, notwithstanding any provisions of 
Federal or State law, such State-chartered cor-
poration shall be deemed to succeed by operation 
of law to such rights, titles, powers, and interests 
of the bridge financial company as the Corpora-
tion may provide, with the same effect as if the 
bridge financial company had merged with the 
State-chartered corporation under provisions of 
the corporate laws of such State. 
(C) SALE OF STOCK.—Following the sale of 
80 percent or more of the capital stock of a 
bridge financial company, as provided in para-
graph (13)(C), the company shall have all of the 
rights, powers, and privileges under its con-
stituent documents and applicable Federal or 
State law. In connection therewith, the Corpora-
tion may take such steps as may be necessary or 
convenient to reincorporate the bridge financial
281 
† HR 4173 EAS 
company under the laws of a State and, notwith-
standing any provisions of Federal or State law, 
the State-chartered corporation shall be deemed 
to succeed by operation of law to such rights, ti-
tles, powers and interests of the bridge financial 
company as the Corporation may provide, with 
the same effect as if the bridge financial com-
pany had merged with the State-chartered cor-
poration under provisions of the corporate laws 
of such State. 
(D) ASSUMPTION OF LIABILITIES AND SALE 
OF ASSETS.—Following the assumption of all or 
substantially all of the liabilities of the bridge fi-
nancial company, or the sale of all or substan-
tially all of the assets of the bridge financial 
company, as provided in paragraph (13)(D), at 
the election of the Corporation, the bridge finan-
cial company may retain its status as such for 
the period provided in paragraph (12) or may be 
dissolved at the election of the Corporation. 
(E) AMENDMENTS TO CHARTER.—Following 
the consummation of a transaction described in 
subparagraph (A), (B), (C), or (D) of paragraph 
(13), the charter of the resulting company shall
283 
† HR 4173 EAS 
for a bridge financial company shall wind up 
the affairs of the bridge financial company in 
conformity with the provisions of law relating to 
the liquidation of covered financial companies 
under this title. With respect to any such bridge 
financial company, the Corporation as receiver 
shall have all the rights, powers, and privileges 
and shall perform the duties related to the exer-
cise of such rights, powers, or privileges granted 
by law to the Corporation as receiver for a cov-
ered financial company under this title and, not-
withstanding any other provision of law, in the 
exercise of such rights, powers, and privileges, 
the Corporation shall not be subject to the direc-
tion or supervision of any State agency or other 
Federal agency. 
(16) AUTHORITY TO OBTAIN CREDIT.— 
(A) IN GENERAL.—A bridge financial com-
pany may obtain unsecured credit and issue un-
secured debt. 
(B) INABILITY
TO
OBTAIN
CREDIT.—If a 
bridge financial company is unable to obtain 
unsecured credit or issue unsecured debt, the Cor-
poration may authorize the obtaining of credit
284 
† HR 4173 EAS 
or the issuance of debt by the bridge financial 
company— 
(i) with priority over any or all of the 
obligations of the bridge financial company; 
(ii) secured by a lien on property of 
the bridge financial company that is not 
otherwise subject to a lien; or 
(iii) secured by a junior lien on prop-
erty of the bridge financial company that is 
subject to a lien. 
(C) LIMITATIONS.— 
(i) IN
GENERAL.—The Corporation, 
after notice and a hearing, may authorize 
the obtaining of credit or the issuance of 
debt by a bridge financial company that is 
secured by a senior or equal lien on prop-
erty of the bridge financial company that is 
subject to a lien, only if— 
(I) the bridge financial company 
is unable to otherwise obtain such cred-
it or issue such debt; and 
(II) there is adequate protection of 
the interest of the holder of the lien on 
the property with respect to which such
285 
† HR 4173 EAS 
senior or equal lien is proposed to be 
granted. 
(ii) HEARING.—The hearing required 
pursuant to this subparagraph shall be be-
fore a court of the United States, which 
shall have jurisdiction to conduct such hear-
ing. 
(D) BURDEN OF PROOF.—In any hearing 
under this paragraph, the Corporation has the 
burden of proof on the issue of adequate protec-
tion. 
(E) QUALIFIED FINANCIAL CONTRACTS.—No 
credit or debt obtained or issued by a bridge fi-
nancial company may contain terms that im-
pair the rights of a counterparty to a qualified 
financial contract upon a default by the bridge 
financial company, other than the priority of 
such counterparty’s unsecured claim (after the 
exercise of rights) relative to the priority of the 
bridge financial company’s obligations in respect 
of such credit or debt, unless such counterparty 
consents in writing to any such impairment. 
(17) EFFECT ON DEBTS AND LIENS.—The rever-
sal or modification on appeal of an authorization 
under this subsection to obtain credit or issue debt, or
286 
† HR 4173 EAS 
of a grant under this section of a priority or a lien, 
does not affect the validity of any debt so issued, or 
any priority or lien so granted, to an entity that ex-
tended such credit in good faith, whether or not such 
entity knew of the pendency of the appeal, unless such 
authorization and the issuance of such debt, or the 
granting of such priority or lien, were stayed pending 
appeal. 
(i) SHARING RECORDS.—If the Corporation has been 
appointed as receiver for a covered financial company, 
other Federal regulators shall make all records relating to 
the covered financial company available to the Corporation, 
which may be used by the Corporation in any manner that 
the Corporation determines to be appropriate. 
(j) EXPEDITED PROCEDURES FOR CERTAIN CLAIMS.— 
(1) TIME FOR FILING NOTICE OF APPEAL.—The 
notice of appeal of any order, whether interlocutory 
or final, entered in any case brought by the Corpora-
tion against a director, officer, employee, agent, attor-
ney, accountant, or appraiser of the covered financial 
company, or any other person employed by or pro-
viding services to a covered financial company, shall 
be filed not later than 30 days after the date of entry 
of the order. The hearing of the appeal shall be held 
not later than 120 days after the date of the notice
287 
† HR 4173 EAS 
of appeal. The appeal shall be decided not later than 
180 days after the date of the notice of appeal. 
(2) SCHEDULING.—The court shall expedite the 
consideration of any case brought by the Corporation 
against a director, officer, employee, agent, attorney, 
accountant, or appraiser of a covered financial com-
pany or any other person employed by or providing 
services to a covered financial company. As far as 
practicable, the court shall give such case priority on 
its docket. 
(3) JUDICIAL DISCRETION.—The court may mod-
ify the schedule and limitations stated in paragraphs 
(1) and (2) in a particular case, based on a specific 
finding that the ends of justice that would be served 
by making such a modification would outweigh the 
best interest of the public in having the case resolved 
expeditiously. 
(k) FOREIGN INVESTIGATIONS.—The Corporation, as 
receiver for any covered financial company, and for pur-
poses of carrying out any power, authority, or duty with 
respect to a covered financial company— 
(1) may request the assistance of any foreign fi-
nancial authority and provide assistance to any for-
eign financial authority in accordance with section 
8(v) of the Federal Deposit Insurance Act, as if the
288 
† HR 4173 EAS 
covered financial company were an insured deposi-
tory institution, the Corporation were the appropriate 
Federal banking agency for the company, and any 
foreign financial authority were the foreign banking 
authority; and 
(2) may maintain an office to coordinate foreign 
investigations or investigations on behalf of foreign fi-
nancial authorities. 
(l) PROHIBITION
ON ENTERING SECRECY AGREE-
MENTS AND PROTECTIVE ORDERS.—The Corporation may 
not enter into any agreement or approve any protective 
order which prohibits the Corporation from disclosing the 
terms of any settlement of an administrative or other action 
for damages or restitution brought by the Corporation in 
its capacity as receiver for a covered financial company. 
(m) LIQUIDATION OF CERTAIN COVERED FINANCIAL 
COMPANIES OR BRIDGE FINANCIAL COMPANIES.— 
(1) IN
GENERAL.—Except as specifically pro-
vided in this section, and notwithstanding any other 
provision of law, the Corporation, in connection with 
the liquidation of any covered financial company or 
bridge financial company with respect to which the 
Corporation has been appointed as receiver, shall— 
(A) in the case of any covered financial 
company or bridge financial company that is or
289 
† HR 4173 EAS 
has a subsidiary that is a stockbroker, but is not 
a member of the Securities Investor Protection 
Corporation, apply the provisions of subchapter 
III of chapter 7 of the Bankruptcy Code, in re-
spect of the distribution to any customer of all 
customer name securities and customer property, 
as if such covered financial company or bridge 
financial company were a debtor for purposes of 
such subchapter; or 
(B) in the case of any covered financial 
company or bridge financial company that is a 
commodity broker, apply the provisions of sub-
chapter IV of chapter 7 the Bankruptcy Code, in 
respect of the distribution to any customer of all 
customer property, as if such covered financial 
company or bridge financial company were a 
debtor for purposes of such subchapter. 
(2) DEFINITIONS.—For purposes of this sub-
section— 
(A) the terms ‘‘customer’’, ‘‘customer name 
securities’’, and ‘‘customer property’’ have the 
same meanings as in section 741 of title 11, 
United States Code; and
290 
† HR 4173 EAS 
(B) the terms ‘‘commodity broker’’ and 
‘‘stockbroker’’ have the same meanings as in sec-
tion 101 of the Bankruptcy Code. 
(n) ORDERLY LIQUIDATION FUND.— 
(1) ESTABLISHMENT.—There is established in 
the Treasury of the United States a separate fund to 
be known as the ‘‘Orderly Liquidation Fund’’, which 
shall be available to the Corporation to carry out the 
authorities contained in this title, for the cost of ac-
tions authorized by this title, including the orderly 
liquidation of covered financial companies, payment 
of administrative expenses, the payment of principal 
and interest by the Corporation on obligations issued 
under paragraph (6), and the exercise of the authori-
ties of the Corporation under this title. 
(2) PROCEEDS.—Amounts received by the Cor-
poration, including assessments received under sub-
section (o), proceeds of obligations issued under para-
graph (6), interest and other earnings from invest-
ments, and repayments to the Corporation by covered 
financial companies, shall be deposited into the Fund. 
(3) MANAGEMENT.—The Corporation shall man-
age the Fund in accordance with this subsection and 
the policies and procedures established under section 
203(d).
291 
† HR 4173 EAS 
(4) INVESTMENTS.—At the request of the Cor-
poration, the Secretary may invest such portion of 
amounts held in the Fund that are not, in the judg-
ment of the Corporation, required to meet the current 
needs of the Corporation, in obligations of the United 
States having suitable maturities, as determined by 
the Corporation. The interest on and the proceeds 
from the sale or redemption of such obligations shall 
be credited to the Fund. 
(5) AUTHORITY TO ISSUE OBLIGATIONS.— 
(A) CORPORATION AUTHORIZED TO ISSUE 
OBLIGATIONS.—Upon appointment by the Sec-
retary of the Corporation as receiver for a cov-
ered financial company, the Corporation is au-
thorized to issue obligations to the Secretary. 
(B) SECRETARY AUTHORIZED TO PURCHASE 
OBLIGATIONS.—The Secretary may, under such 
terms and conditions as the Secretary may re-
quire, purchase or agree to purchase any obliga-
tions issued under subparagraph (A), and for 
such purpose, the Secretary is authorized to use 
as a public debt transaction the proceeds of the 
sale of any securities issued under chapter 31 of 
title 31, United States Code, and the purposes 
for which securities may be issued under chapter
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31 of title 31, United States Code, are extended 
to include such purchases. 
(C) INTEREST RATE.—Each purchase of ob-
ligations by the Secretary under this paragraph 
shall be upon such terms and conditions as to 
yield a return at a rate determined by the Sec-
retary, taking into consideration the current av-
erage yield on outstanding marketable obliga-
tions of the United States of comparable matu-
rity, plus an interest rate surcharge to be deter-
mined by the Secretary, which shall be greater 
than the difference between— 
(i) the current average rate on an 
index of corporate obligations of comparable 
maturity; and 
(ii) the current average rate on out-
standing marketable obligations of the 
United States of comparable maturity. 
(D) SECRETARY AUTHORIZED TO SELL OB-
LIGATIONS.—The Secretary may sell, upon such 
terms and conditions as the Secretary shall de-
termine, any of the obligations acquired under 
this paragraph. 
(E) PUBLIC DEBT TRANSACTIONS.—All pur-
chases and sales by the Secretary of such obliga-
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tions under this paragraph shall be treated as 
public debt transactions of the United States, 
and the proceeds from the sale of any obligations 
acquired by the Secretary under this paragraph 
shall be deposited into the Treasury of the 
United States as miscellaneous receipts. 
(6) MAXIMUM
OBLIGATION
LIMITATION.—The 
Corporation may not, in connection with the orderly 
liquidation of a covered financial company, issue or 
incur any obligation, if, after issuing or incurring the 
obligation, the aggregate amount of such obligations 
outstanding under this subsection for each covered fi-
nancial company would exceed— 
(A) an amount that is equal to 10 percent 
of the total consolidated assets of the covered fi-
nancial company, based on the most recent fi-
nancial statement available, during the 30-day 
period immediately following the date of ap-
pointment of the Corporation as receiver (or a 
shorter time period if the Corporation has cal-
culated the amount described under subpara-
graph (B)); and 
(B) the amount that is equal to 90 percent 
of the fair value of the total consolidated assets 
of each covered financial company that are
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available for repayment, after the time period 
described in subparagraph (A). 
(7) RULEMAKING.—The Corporation and the 
Secretary shall jointly, in consultation with the 
Council, prescribe regulations governing the calcula-
tion of the maximum obligation limitation defined in 
this paragraph. 
(8) RULE OF CONSTRUCTION.— 
(A) IN GENERAL.—Nothing in this section 
shall be construed to affect the authority of the 
Corporation under subsection (a) or (b) of sec-
tion 14 or section 15(c)(5) of the Federal Deposit 
Insurance Act (12 U.S.C. 1824, 1825(c)(5)), the 
management of the Deposit Insurance Fund by 
the Corporation, or the resolution of insured de-
pository institutions, provided that— 
(i) the authorities of the Corporation 
contained in this title shall not be used to 
assist the Deposit Insurance Fund or to as-
sist any financial company under applica-
ble law other than this Act; 
(ii) the authorities of the Corporation 
relating to the Deposit Insurance Fund, or 
any other responsibilities of the Corporation 
under applicable law other than this title,
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derly liquidation plan approved by the Secretary 
with the concurrence of the Secretary. 
(10) IMPLEMENTATION EXPENSES.— 
(A) IN GENERAL.—Reasonable implementa-
tion expenses of the Corporation incurred after 
the date of enactment of this Act shall be treated 
as expenses of the Council. 
(B) REQUESTS FOR REIMBURSEMENT.—The 
Corporation shall periodically submit a request 
for reimbursement for implementation expenses 
to the Chairperson of the Council, who shall ar-
range for prompt reimbursement to the Corpora-
tion of reasonable implementation expenses. 
(C) DEFINITION.—As used in this para-
graph, the term ‘‘implementation expenses’’— 
(i) means costs incurred by the Cor-
poration beginning on the date of enactment 
of this Act, as part of its efforts to imple-
ment this title that do not relate to a par-
ticular covered financial company; and 
(ii) includes the costs incurred in con-
nection with the development of policies, 
procedures, rules, and regulations and other 
planning activities of the Corporation con-
sistent with carrying out this title.
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(o) ASSESSMENTS.— 
(1) RISK-BASED ASSESSMENTS.— 
(A) ELIGIBLE
FINANCIAL
COMPANIES
DE-
FINED.—For purposes of this subsection, the 
term ‘‘eligible financial company’’ means any 
bank holding company with total consolidated 
assets equal to or greater than $50,000,000,000 
and any nonbank financial company supervised 
by the Board of Governors. 
(B) ASSESSMENTS.—The Corporation shall 
charge one or more risk-based assessments in ac-
cordance with the provisions of subparagraph 
(D), if such assessments are necessary to pay in 
full the obligations issued by the Corporation to 
the Secretary within 60 months of the date of 
issuance of such obligations. 
(C) EXTENSIONS
AUTHORIZED.—The Cor-
poration may, with the approval of the Sec-
retary, extend the time period under subpara-
graph (C)(iii), if the Corporation determines 
that an extension is necessary to avoid a serious 
adverse effect on the financial system of the 
United States.
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(D) APPLICATION
OF
ASSESSMENTS.—To 
meet the requirements of subparagraph (C), the 
Corporation shall— 
(i) impose assessments, as soon as 
practicable, on any claimant that received 
additional payments or amounts from the 
Corporation pursuant to subsection (b)(4), 
(d)(4), or (h)(5)(E), except for payments or 
amounts necessary to initiate and continue 
operations essential to implementation of 
the receivership or any bridge financial 
company, to recover on a cumulative basis, 
the entire difference between— 
(I) the aggregate value the claim-
ant received from the Corporation on a 
claim pursuant to this title (including 
pursuant to subsection (b)(4), (d)(4), 
and (h)(5)(E)), as of the date on which 
such value was received; and 
(II) the value the claimant was 
entitled to receive from the Corporation 
on such claim solely from the proceeds 
of the liquidation of the covered finan-
cial company under this title; and
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(ii) if the amounts to be recovered on 
a cumulative basis under clause (i) are in-
sufficient to meet the requirements of sub-
paragraph (C), after taking into account 
the considerations set forth in paragraph 
(4), impose assessments on— 
(I) eligible financial companies; 
and 
(II) financial companies with 
total consolidated assets equal to or 
greater than $50,000,000,000 that are 
not eligible financial companies. 
(E) PROVISION OF FINANCING.—Payments 
or amounts necessary to initiate and continue 
operations essential to implementation of the re-
ceivership or any bridge financial company de-
scribed in subparagraph (E)(i) shall not include 
the provision of financing, as defined by rule of 
the Corporation, to third parties. 
(2) GRADUATED ASSESSMENT RATE.—The Cor-
poration shall impose assessments on a graduated 
basis, with financial companies having greater assets 
being assessed at a higher rate. 
(3) NOTIFICATION AND PAYMENT.—The Corpora-
tion shall notify each financial company of that com-
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pany’s assessment under this subsection. Any finan-
cial company subject to assessment under this sub-
section shall pay such assessment in accordance with 
the regulations prescribed pursuant to paragraph (6). 
(4) 
RISK-BASED
ASSESSMENT
CONSIDER-
ATIONS.—In imposing assessments under this sub-
section, the Corporation shall— 
(A) take into account economic conditions 
generally affecting financial companies, so as to 
allow assessments to be lower during less favor-
able economic conditions; 
(B) take into account any assessments im-
posed on— 
(i) an insured depository institution 
subsidiary of a financial company pursuant 
to section 7 or section 13(c)(4)(G) of the 
Federal Deposit Insurance Act (12 U.S.C. 
1817, 1823(c)(4)(G)); 
(ii) a financial company or subsidiary 
of such company that is a member of SIPC 
pursuant to section 4 of the Securities In-
vestor Protection Act of 1970 (15 U.S.C. 
78ddd); and 
(iii) a financial company or sub-
sidiary of such company that is an insur-
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ance company pursuant to applicable State 
law to cover (or reimburse payments made 
to cover) the costs of rehabilitation, liquida-
tion, or other State insolvency proceeding 
with respect to one or more insurance com-
panies; 
(C) take into account the financial condi-
tion of the financial company, including the ex-
tent and type of off-balance-sheet exposures of the 
financial company; 
(D) take into account the risks presented by 
the financial company to the financial stability 
of the United States economy; 
(E) take into account the extent to which 
the financial company or group of financial 
companies has benefitted, or likely would benefit, 
from the orderly liquidation of a covered finan-
cial company and the use of the Fund under this 
title; 
(F) distinguish among different classes of 
assets or different types of financial companies 
(including distinguishing among different types 
of financial companies, based on their levels of 
capital and leverage) in order to establish com-
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parable assessment bases among financial com-
panies subject to this subsection; 
(G) establish the parameters for the grad-
uated assessment requirement in paragraph (2); 
and 
(H) take into account such other factors as 
the Corporation, in consultation with the Sec-
retary, deems appropriate. 
(5) COLLECTION
OF
INFORMATION.—The Cor-
poration may impose on covered financial companies 
such collection of information requirements as the 
Corporation deems necessary to carry out this sub-
section after the appointment of the Corporation as 
receiver under this title. 
(6) RULEMAKING.— 
(A) IN
GENERAL.—The Corporation shall 
prescribe regulations to carry out this subsection. 
The Corporation shall consult with the Secretary 
in the development and finalization of such regu-
lations. 
(B) EQUITABLE TREATMENT.—The regula-
tions prescribed under subparagraph (A) shall 
take into account the differences in risks posed to 
the financial stability of the United States by fi-
nancial companies, the differences in the liabil-
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ity structures of financial companies, and the 
different bases for other assessments that such fi-
nancial companies may be required to pay, to 
ensure that assessed financial companies are 
treated equitably and that assessments under this 
subsection reflect such differences. 
(p) UNENFORCEABILITY OF CERTAIN AGREEMENTS.— 
(1) IN
GENERAL.—No provision described in 
paragraph (2) shall be enforceable against or impose 
any liability on any person, as such enforcement or 
liability shall be contrary to public policy. 
(2) PROHIBITED PROVISIONS.—A provision de-
scribed in this paragraph is any term contained in 
any existing or future standstill, confidentiality, or 
other agreement that, directly or indirectly— 
(A) affects, restricts, or limits the ability of 
any person to offer to acquire or acquire; 
(B) prohibits any person from offering to 
acquire or acquiring; or 
(C) prohibits any person from using any 
previously disclosed information in connection 
with any such offer to acquire or acquisition of, 
all or part of any covered financial company, includ-
ing any liabilities, assets, or interest therein, in con-
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† HR 4173 EAS 
nection with any transaction in which the Corpora-
tion exercises its authority under this title. 
(q) OTHER EXEMPTIONS.— 
(1) IN
GENERAL.—When acting as a receiver 
under this title— 
(A) the Corporation, including its franchise, 
its capital, reserves and surplus, and its income, 
shall be exempt from all taxation imposed by 
any State, county, municipality, or local taxing 
authority, except that any real property of the 
Corporation shall be subject to State, territorial, 
county, municipal, or local taxation to the same 
extent according to its value as other real prop-
erty is taxed, except that, notwithstanding the 
failure of any person to challenge an assessment 
under State law of the value of such property, 
such value, and the tax thereon, shall be deter-
mined as of the period for which such tax is im-
posed; 
(B) no property of the Corporation shall be 
subject to levy, attachment, garnishment, fore-
closure, or sale without the consent of the Cor-
poration, nor shall any involuntary lien attach 
to the property of the Corporation; and
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(C) the Corporation shall not be liable for 
any amounts in the nature of penalties or fines, 
including those arising from the failure of any 
person to pay any real property, personal prop-
erty, probate, or recording tax or any recording 
or filing fees when due; and 
(D) the Corporation shall be exempt from 
all prosecution by the United States or any 
State, county, municipality, or local authority 
for any criminal offense arising under Federal, 
State, county, municipal, or local law, which 
was allegedly committed by the covered financial 
company, or persons acting on behalf of the cov-
ered financial company, prior to the appoint-
ment of the Corporation as receiver. 
(2) LIMITATION.—Paragraph (1) shall not apply 
with respect to any tax imposed (or other amount 
arising) under the Internal Revenue Code of 1986. 
(r) CERTAIN SALES OF ASSETS PROHIBITED.— 
(1) PERSONS WHO ENGAGED IN IMPROPER CON-
DUCT WITH, OR CAUSED LOSSES TO, COVERED FINAN-
CIAL
COMPANIES.—The Corporation shall prescribe 
regulations which, at a minimum, shall prohibit the 
sale of assets of a covered financial company by the 
Corporation to—
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† HR 4173 EAS 
(A) any person who— 
(i) has defaulted, or was a member of 
a partnership or an officer or director of a 
corporation that has defaulted, on 1 or more 
obligations, the aggregate amount of which 
exceeds $1,000,000, to such covered finan-
cial company; 
(ii) has been found to have engaged in 
fraudulent activity in connection with any 
obligation referred to in clause (i); and 
(iii) proposes to purchase any such 
asset in whole or in part through the use of 
the proceeds of a loan or advance of credit 
from the Corporation or from any covered 
financial company; 
(B) any person who participated, as an of-
ficer or director of such covered financial com-
pany or of any affiliate of such company, in a 
material way in any transaction that resulted in 
a substantial loss to such covered financial com-
pany; or 
(C) any person who has demonstrated a 
pattern or practice of defalcation regarding obli-
gations to such covered financial company.
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(2) CONVICTED DEBTORS.—Except as provided 
in paragraph (3), a person may not purchase any 
asset of such institution from the receiver, if that per-
son— 
(A) has been convicted of an offense under 
section 215, 656, 657, 1005, 1006, 1007, 1008, 
1014, 1032, 1341, 1343, or 1344 of title 18, 
United States Code, or of conspiring to commit 
such an offense, affecting any covered financial 
company; and 
(B) is in default on any loan or other exten-
sion of credit from such covered financial com-
pany which, if not paid, will cause substantial 
loss to the Fund or the Corporation. 
(3) SETTLEMENT OF CLAIMS.—Paragraphs (1) 
and (2) shall not apply to the sale or transfer by the 
Corporation of any asset of any covered financial 
company to any person, if the sale or transfer of the 
asset resolves or settles, or is part of the resolution or 
settlement, of 1 or more claims that have been, or 
could have been, asserted by the Corporation against 
the person. 
(4) DEFINITION OF DEFAULT.—For purposes of 
this subsection, the term ‘‘default’’ means a failure to 
comply with the terms of a loan or other obligation
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† HR 4173 EAS 
to such an extent that the property securing the obli-
gation is foreclosed upon. 
(s) RECOUPMENT OF COMPENSATION FROM SENIOR 
EXECUTIVES AND DIRECTORS.— 
(1) IN GENERAL.—The Corporation, as receiver 
of a covered financial company, may recover from 
any current or former senior executive or director 
substantially responsible for the failed condition of the 
covered financial company any compensation received 
during the 2-year period preceding the date on which 
the Corporation was appointed as the receiver of the 
covered financial company, except that, in the case of 
fraud, no time limit shall apply. 
(2) COST CONSIDERATIONS.—In seeking to re-
cover any such compensation, the Corporation shall 
weigh the financial and deterrent benefits of such re-
covery against the cost of executing the recovery. 
(3) RULEMAKING.—The Corporation shall pro-
mulgate regulations to implement the requirements of 
this subsection, including defining the term ‘‘com-
pensation’’ to mean any financial remuneration, in-
cluding salary, bonuses, incentives, benefits, severance, 
deferred compensation, or golden parachute benefits, 
and any profits realized from the sale of the securities 
of the covered financial company.
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SEC. 211. MISCELLANEOUS PROVISIONS. 
(a) CLARIFICATION OF PROHIBITION REGARDING CON-
CEALMENT OF ASSETS FROM RECEIVER OR LIQUIDATING 
AGENT.—Section 1032(1) of title 18, United States Code, 
is amended by inserting ‘‘the Federal Deposit Insurance 
Corporation acting as receiver for a covered financial com-
pany, in accordance with title II of the Restoring American 
Financial Stability Act of 2010,’’ before ‘‘or the National 
Credit’’. 
(b) CONFORMING AMENDMENT.—Section 1032 of title 
18, United States Code, is amended in the section heading, 
by striking ‘‘of financial institution’’. 
(c) FEDERAL DEPOSIT INSURANCE CORPORATION IM-
PROVEMENT ACT OF 1991.—Section 403(a) of the Federal 
Deposit Insurance Corporation Improvement Act of 1991 
(12 U.S.C. 4403(a)) is amended by inserting ‘‘section 
210(c) of the Restoring American Financial Stability Act 
of 2010, section 1367 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4617(d)),’’ after ‘‘section 11(e) of the Federal Deposit Insur-
ance Act,’’. 
(d) FDIC INSPECTOR GENERAL REVIEWS.— 
(1) SCOPE.—The Inspector General of the Cor-
poration shall conduct, supervise, and coordinate au-
dits and investigations of the liquidation of any cov-
ered financial company by the Corporation as re-
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ceiver under this title, including collecting and sum-
marizing— 
(A) a description of actions taken by the 
Corporation as receiver; 
(B) a description of any material sales, 
transfers, mergers, obligations, purchases, and 
other material transactions entered into by the 
Corporation; 
(C) an evaluation of the adequacy of the 
policies and procedures of the Corporation under 
section 203(d) and orderly liquidation plan 
under section 210(n)(14); 
(D) an evaluation of the utilization by the 
Corporation of the private sector in carrying out 
its functions, including the adequacy of any con-
flict-of-interest reviews; and 
(E) an evaluation of the overall perform-
ance of the Corporation in liquidating the cov-
ered financial company, including administra-
tive costs, timeliness of liquidation process, and 
impact on the financial system. 
(2) FREQUENCY.—Not later than 6 months after 
the date of appointment of the Corporation as receiver 
under this title and every 6 months thereafter, the In-
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spector General of the Corporation shall conduct the 
audit and investigation described in paragraph (1). 
(3) REPORTS
AND
TESTIMONY.—The Inspector 
General of the Corporation shall include in the semi-
annual reports required by section 5(a) of the Inspec-
tor General Act of 1978 (5 U.S.C. App.), a summary 
of the findings and evaluations under paragraph (1), 
and shall appear before the appropriate committees of 
Congress, if requested, to present each such report. 
(4) FUNDING.— 
(A) INITIAL FUNDING.—The expenses of the 
Inspector General of the Corporation in carrying 
out this subsection shall be considered adminis-
trative expenses of the receivership. 
(B) ADDITIONAL
FUNDING.—If the max-
imum amount available to the Corporation as 
receiver under this title is insufficient to enable 
the Inspector General of the Corporation to carry 
out the duties under this subsection, the Corpora-
tion shall pay such additional amounts from as-
sessments imposed under section 210. 
(5) TERMINATION
OF
RESPONSIBILITIES.—The 
duties and responsibilities of the Inspector General of 
the Corporation under this subsection shall terminate
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† HR 4173 EAS 
1 year after the date of termination of the receiver-
ship under this title. 
(e) TREASURY INSPECTOR GENERAL REVIEWS.— 
(1) SCOPE.—The Inspector General of the De-
partment of the Treasury shall conduct, supervise, 
and coordinate audits and investigations of actions 
taken by the Secretary related to the liquidation of 
any covered financial company under this title, in-
cluding collecting and summarizing— 
(A) a description of actions taken by the 
Secretary under this title; 
(B) an analysis of the approval by the Sec-
retary of the policies and procedures of the Cor-
poration under section 203 and acceptance of the 
orderly liquidation plan of the Corporation 
under section 210; and 
(C) an assessment of the terms and condi-
tions underlying the purchase by the Secretary of 
obligations of the Corporation under section 210. 
(2) FREQUENCY.—Not later than 6 months after 
the date of appointment of the Corporation as receiver 
under this title and every 6 months thereafter, the In-
spector General of the Department of the Treasury 
shall conduct the audit and investigation described in 
paragraph (1).