318 
‘‘(3) The authority of the Commission under 
this section shall be in addition to its existing au-
thority to enforce the securities laws. 
‘‘(h) EXCLUSIONS.—Notwithstanding any other pro-
vision of this section, the requirements of this section shall 
not apply to any loan— 
‘‘(1) insured, guaranteed, or administered by 
the Secretary of Education, the Secretary of Agri-
culture, the Secretary of Veterans Affairs, or the 
Small Business Administration; or 
‘‘(2) made, insured, guaranteed, or purchased 
by any person that is subject to the supervision of 
the Farm Credit Administration, including the Fed-
eral Agricultural Mortgage Corporation. 
‘‘(i) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘asset-backed security’ has the 
meaning given such term in section 229.1101(c) of 
title 17, Code of Federal Regulations, or any suc-
cessor thereto. 
‘‘(2) The term ‘Federal banking agencies’ 
means the Board of Governors of the Federal Re-
serve System, the Office of the Comptroller of the 
Currency, the Office of Thrift Supervision, and the 
Federal Deposit Insurance Corporation.
319 
‘‘(3) The term ‘insured depository institution’ 
has the meaning given such term in section 3(c) of 
the Federal Deposit Insurance Act (12 U.S.C. 
1813(c)). 
‘‘(4) The term ‘securitization vehicle’ means a 
trust, corporation, partnership, limited liability enti-
ty, special purpose entity, or other structure that— 
‘‘(A) is the issuer, or is created by the 
issuer, of pass-through certificates, participa-
tion certificates, asset-backed securities, or 
other similar securities backed by a pool of as-
sets that includes loans; and 
‘‘(B) holds such loans. 
‘‘(5) The term ‘securitizer’ means the person 
that transfers, conveys, or assigns, or causes the 
transfer, conveyance, or assignment of, loans, includ-
ing through a special purpose vehicle, to any 
securitization vehicle, excluding any trustee that 
holds such loans for the benefit of the securitization 
vehicle.’’. 
(b) STUDY ON RISK RETENTION.— 
(1) STUDY.—The Board, in coordination and 
consultation with the Comptroller of the Currency, 
the Office of Thrift Supervision, the Federal Deposit 
Insurance Corporation, and the Securities and Ex-
320 
change Commission, shall conduct a study of the 
combined impact by each individual class of asset- 
backed security of— 
(A) the new credit risk retention require-
ments contained in the amendment made by 
subsection (a); and 
(B) the Financial Accounting Statements 
166 and 167 issued by the Financial Account-
ing Standards Board. 
(2) REPORT.—Not later than 90 days after the 
date of enactment of this title, the Board shall sub-
mit to Congress a report on the study conducted 
under paragraph (1). Such report shall include stat-
utory and regulatory recommendations for elimi-
nating any negative impacts on the continued viabil-
ity of the asset-backed securitization markets and on 
the availability of credit for new lending identified 
by the study conducted under paragraph (1). 
SEC. 1503. PERIODIC AND OTHER REPORTING UNDER THE 
SECURITIES EXCHANGE ACT OF 1934 FOR 
ASSET-BACKED SECURITIES. 
Section 15(d) of Securities Exchange Act of 1934 (15 
U.S.C. 78o(d)) is amended— 
(1) by inserting ‘‘, other than securities of any 
class of asset-backed security (as defined in section
321 
229.1101(c) of title 17, Code of Federal Regula-
tions, or any successor thereto),’’ after ‘‘securities of 
each class’’; 
(2) by inserting at the end the following: ‘‘The 
Commission may by rules and regulations provide 
for the suspension or termination of the duty to file 
under this subsection for any class of issuer of asset- 
backed security upon such terms and conditions and 
for such period or periods as it deems necessary or 
appropriate in the public interest or for the protec-
tion of investors. The Commission may, for the pur-
poses of this subsection, classify issuers and pre-
scribe requirements appropriate for each class of 
issuer of asset-backed security.’’; and 
(3) by inserting after the fifth sentence the fol-
lowing: ‘‘The Commission shall adopt regulations 
under this subsection requiring each issuer of an 
asset-backed security to disclose, for each tranche or 
class of security, information regarding the assets 
backing that security. In adopting regulations under 
this subsection, the Commission shall set standards 
for the format of the data provided by issuers of an 
asset-backed security, which shall, to the extent fea-
sible, facilitate comparison of such data across secu-
rities in similar types of asset classes. The Commis-
322 
sion shall require issuers of asset-backed securities 
at a minimum to disclose asset-level or loan-level 
data necessary for investors to independently per-
form due diligence. Asset-level or loan-level data 
shall include data with unique identifiers relating to 
loan brokers or originators, the nature and extent of 
the compensation of the broker or originator of the 
assets backing the security, and the amount of risk 
retention of the originator or the securitizer of such 
assets.’’. 
SEC. 1504. REPRESENTATIONS AND WARRANTIES IN ASSET- 
BACKED OFFERINGS. 
The Commission shall prescribe regulations on the 
use of representations and warranties in the asset-backed 
securities market that— 
(1) require credit rating agencies to include in 
reports accompanying credit ratings a description of 
the representations, warranties, and enforcement 
mechanisms available to investors and how they dif-
fer from representations, warranties, and enforce-
ment mechanisms in similar issuances; and 
(2) require disclosure on fulfilled repurchase re-
quests across all trusts aggregated by originator, so 
that investors may identify asset originators with 
clear underwriting deficiencies.
323 
SEC. 1505. EXEMPTED TRANSACTIONS UNDER THE SECURI-
TIES ACT OF 1933. 
(a) IN GENERAL.—Section 4 of the Securities Act of 
1933 (15 U.S.C. 77d) is amended— 
(1) by striking paragraph (5); and 
(2) by redesignating paragraph (6) as para-
graph (5). 
(b) 
CONFORMING
AMENDMENT.—Section 
3(a)(4)(B)(vii)(I) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a)(4)(B)(vii)(I)) is amended by striking 
‘‘4(6)’’ and inserting ‘‘4(5)’’. 
SEC. 1506. STUDY ON THE MACROECONOMIC EFFECTS OF 
RISK RETENTION REQUIREMENTS. 
(a) STUDY REQUIRED.—The Chairman of the Finan-
cial Services Oversight Council shall carry out a study on 
the macroeconomic effects of the risk retention require-
ments under this subtitle, and the amendments made by 
this subtitle, with emphasis placed on potential beneficial 
effects with respect to stabilizing the real estate market. 
Such study shall include— 
(1) an analysis of the effects of risk retention 
on real estate asset price bubbles, including a retro-
spective estimate of what fraction of real estate 
losses may have been averted had such requirements 
been in force in recent years;
324 
(2) an analysis of the feasibility of minimizing 
real estate price bubbles by proactively adjusting the 
percentage of risk retention that must be borne by 
creditors and securitizers of real estate debt, as a 
function of regional or national market conditions; 
(3) a comparable analysis for proactively ad-
justing mortgage origination requirements; 
(4) an assessment of whether such proactive ad-
justments should be made by an independent regu-
lator, or in a formulaic and transparent manner; 
(5) an assessment of whether such adjustments 
should take place independently or in concert with 
monetary policy; and 
(6) recommendations for implementation and 
enabling legislation. 
(b) REPORT.—Not later than the end of the 180-day 
period beginning on the date of the enactment of this title, 
the Chairman of the Financial Services Oversight Council 
shall issue a report to the Congress containing any find-
ings and determinations made in carrying out the study 
required under subsection (a).
325 
Subtitle G—Enhanced Dissolution 
Authority 
SEC. 1601. SHORT TITLE; PURPOSE. 
(a) SHORT TITLE.—This subtitle may be cited as the 
‘‘Dissolution Authority for Large, Interconnected Finan-
cial Companies Act of 2009’’. 
(b) PURPOSE.—The purpose of this subtitle is to pro-
tect the financial system of the United States in times of 
severe crisis by providing for the orderly resolution of 
large, interconnected financial companies whose failure 
could create, or increase, the risk of significant liquidity, 
credit, or other financial problems spreading among finan-
cial institutions or markets and thereby threaten the sta-
bility of the overall financial system of the United States. 
There shall be a strong presumption that resolution under 
the bankruptcy laws will remain the primary method of 
resolving financial companies, and the authorities con-
tained in this subtitle will only be used in the most exigent 
circumstances. 
SEC. 1602. DEFINITIONS. 
For purposes of this subtitle, the following definitions 
shall apply: 
(1) APPROPRIATE REGULATORY AGENCY.— 
(A) CORPORATION AND COMMISSION.—The 
term ‘‘appropriate regulatory agency’’ means—
326 
(i) the Corporation; 
(ii) the Commission, if the financial 
company, or an affiliate thereof, is a 
broker or dealer registered with the Com-
mission under section 15(b) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 
78o(b) (other than an insured depository 
institution)); and 
(iii) if the financial company or an af-
filiate of the financial company is an insur-
ance company (other than an insured de-
pository institution), the applicable State 
insurance authority of the State in which 
the insurance company is domiciled. 
(B) RULES
OF
CONSTRUCTION.—More 
than 1 agency may be an appropriate regu-
latory agency with respect to any given finan-
cial company. In such instances, the Commis-
sion shall be the appropriate regulatory agency 
for purposes of section 1603 if the largest sub-
sidiary of the financial company is a broker or 
dealer as measured by total assets as of the end 
of the previous calendar quarter, the applicable 
State insurance authority of the State in which 
the insurance company is domiciled shall be the
327 
appropriate regulatory agency for purposes of 
section 1603 if the financial company is an in-
surance company or if the largest subsidiary of 
the financial company is an insurance company 
as measured by total assets as of the end of the 
previous calendar quarter, and otherwise the 
Corporation shall be the appropriate regulatory 
agency for purposes of section 1603. 
(2) BRIDGE FINANCIAL COMPANY.—The term 
‘‘bridge financial company’’ means a new financial 
company organized in accordance with section 
1609(h) by the Corporation. 
(3) COMMISSION.—The term ‘‘Commission’’ 
means the Securities and Exchange Commission. 
(4) CORPORATION.—The term ‘‘Corporation’’ 
means the Federal Deposit Insurance Corporation. 
(5) COVERED FINANCIAL COMPANY.—The term 
‘‘covered financial company’’ means a financial com-
pany for which a determination has been made pur-
suant to and in accordance with section 1603(b). 
(6) COVERED SUBSIDIARY.—The term ‘‘covered 
subsidiary’’ means a subsidiary covered in paragraph 
(9)(B)(v).
328 
(7) CUSTOMER
PROPERTY.—The term ‘‘cus-
tomer property’’ has the meaning ascribed to it in 
the Securities Investor Protection Act of 1970. 
(8) FEDERAL
RESERVE
BOARD.—The term 
‘‘Federal Reserve Board’’ means the Board of Gov-
ernors of the Federal Reserve System. 
(9) FINANCIAL COMPANY.—The term ‘‘financial 
company’’ means any company that— 
(A) is incorporated or organized under 
Federal law or the laws of any State; 
(B) is— 
(i) any bank holding company as de-
fined in section 2(a) of the Bank Holding 
Company 
Act 
of 
1956 
(12 
U.S.C. 
1841(a)); 
(ii) any company that has been sub-
jected to stricter prudential regulation 
under section 1103; 
(iii) any insurance company; 
(iv) any company predominantly en-
gaged in activities that are financial in na-
ture or incidental thereto for purposes of 
section 4(k) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1843(k)) or activi-
ties that have been identified for stricter
329 
prudential standards under section 1103 of 
this title; or 
(v) any subsidiary of companies de-
scribed in clauses (i) through (iv) (other 
than an insured depository institution or 
any broker or dealer registered with the 
Commission under section 15(b) of the Se-
curities Exchange Act of 1934 (15 U.S.C. 
78o(b)) that is a member of the Securities 
Investor Protection Corporation); 
(C) that is not a Farm Credit System in-
stitution chartered under and subject to the 
provisions of the Farm Credit Act of 1971, as 
amended (12 U.S.C. 2001 et seq.); 
(D) that is not a Federal home loan bank, 
the Federal National Mortgage Association, or 
the Federal Home Loan Mortgage Corporation; 
and 
(E) is not an insured depository institution 
(as defined in section 3(c) of the Federal De-
posit Insurance act), a Federal credit union or 
a State-chartered credit union (as such terms 
are defined in section 101 of the Federal Credit 
Union Act), or a government-sponsored enter-
prise (as such term is defined in section 1004(f)
330 
of the Financial Institutions Reform, Recovery 
and Enforcement Act of 1989 (12 U.S.C. 1811 
note)). 
(10) FUND.—The term ‘‘Fund’’ means the Sys-
temic Dissolution Fund established in accordance 
with section 1609(n). 
(11) INSURANCE COMPANY.—The term ‘‘insur-
ance company’’ means any entity covered by a State 
law designed specifically to deal with the rehabilita-
tion, liquidation, or insolvency of an insurance com-
pany. 
(12) SECRETARY.—The term ‘‘Secretary’’ shall 
mean the Secretary of the Treasury. 
(13) STATE.—The term ‘‘State’’ means any 
State, commonwealth, territory, or possession of the 
United States, the District of Columbia, the Com-
monwealth of Puerto Rico, the Commonwealth of the 
Northern Mariana Islands, American Samoa, Guam, 
and the United States Virgin Islands. 
(14) CERTAIN OTHER TERMS.—The terms ‘‘af-
filiate’’, ‘‘company’’, ‘‘control’’, ‘‘deposit’’, ‘‘deposi-
tory institution’’, ‘‘foreign bank’’, ‘‘insured deposi-
tory institution’’, and ‘‘subsidiary’’ have the same 
meanings as in section 3 of the Federal Deposit In-
surance Act (12 U.S.C. 1813).
331 
SEC. 1603. SYSTEMIC RISK DETERMINATION. 
(a) WRITTEN RECOMMENDATION OF THE FEDERAL 
RESERVE BOARD AND THE APPROPRIATE REGULATORY 
AGENCY.— 
(1) VOTE REQUIRED.— 
(A) IN GENERAL.—At the request of the 
Secretary, the Chairman of the Federal Reserve 
Board, or the appropriate regulatory agency, 
the Board and the appropriate regulatory agen-
cy shall, or on their own initiative the Board 
and the appropriate regulatory agency may, 
consider whether to make the written rec-
ommendation provided for in paragraph (2) 
with respect to a financial company. 
(B) TWO-THIRDS AGREEMENT.—Any rec-
ommendation under subparagraph (A) shall be 
made upon a vote of not less than two-thirds of 
the members of the Federal Reserve Board then 
serving and not less than two thirds of any 
members of the board or commission then serv-
ing of the appropriate regulatory agency, as ap-
plicable. 
(2) RECOMMENDATION REQUIRED.—Any writ-
ten recommendations made by the Federal Reserve 
Board and the appropriate regulatory agency under 
paragraph (1) shall contain the following:
332 
(A) A description of the effect that the de-
fault of the financial company would have on 
economic conditions or financial stability in the 
United States. 
(B) A description of the effect that the de-
fault of the financial company would have on 
economic conditions or financial stability for 
low-income, minority, or underserved commu-
nities. 
(C) A recommendation regarding the na-
ture and the extent of actions that the Board 
and the appropriate regulatory agency rec-
ommend be taken under section 1604 regarding 
the financial company. 
(b) DETERMINATION BY THE SECRETARY.—Notwith-
standing any other provision of Federal law or the law 
of any State, if, upon the written recommendation of the 
Federal Reserve Board and the appropriate regulatory 
agency as provided for in subsection (a)(1), the Secretary 
(in consultation with the President) determines that— 
(1) the financial company is in default or is in 
danger of default; 
(2) the failure of the financial company and its 
dissolution under otherwise applicable Federal or 
State law would have serious adverse effects on fi-
333 
nancial stability or economic conditions in the 
United States; and 
(3) any action under section 1604 would avoid 
or mitigate such adverse effects, taking into consid-
eration the effectiveness of the action in mitigating 
potential adverse effects on the financial system or 
economic conditions, the cost to the general fund of 
the Treasury, and the potential to increase moral 
hazard on the part of creditors, counterparties, and 
shareholders in the financial company, 
then the Secretary must take action under section 
1604(a), the Corporation must act in accordance with sec-
tion 1604(b), and the Corporation may take 1 or more 
actions specified in section 1604(c) in accordance with the 
requirements of that subsection, except that, prior to the 
Secretary or Corporation taking any action under section 
1604, the Federal Reserve Board or the appropriate Fed-
eral regulatory agency shall take action to avoid or miti-
gate potential adverse effects on low-income, minority, or 
underserved communities affected by the failure of such 
financial company. 
(c) DOCUMENTATION AND REVIEW.— 
(1) IN GENERAL.—The Secretary shall— 
(A) document any determination under 
subsection (b); and
334 
(B) retain the documentation for review 
under paragraph (2). 
(2) GAO REVIEW.—The Comptroller General of 
the United States shall review and report to the 
Congress on any determination under subsection (b), 
including— 
(A) the basis for the determination; 
(B) the purpose for which any action was 
taken pursuant thereto; and 
(C) the likely effect of the determination 
and such action on the incentives and conduct 
of financial companies and their creditors, 
counterparties, and shareholders. 
(3) REPORT TO CONGRESS.—Within 48 hours 
after a determination is made under subsection (b), 
the Secretary shall provide written notice of the de-
termination to the Committee on Banking, Housing, 
and Urban Affairs and the Committee on the Judici-
ary of the Senate and the Committee on Financial 
Services and the Committee on the Judiciary of the 
House of Representatives. The notice shall include a 
description of the basis for the determination. 
(d) DEFAULT OR IN DANGER OF DEFAULT.—For 
purposes of subsection (b), a financial company shall be 
considered to be in default or in danger of default if any
335 
of the following conditions exist, as determined in accord-
ance with that subsection: 
(1) A case has been, or likely will promptly be, 
commenced with respect to the financial company 
under title 11, United States Code. 
(2) The financial company is critically under-
capitalized, as such term has been or may be defined 
by the Federal Reserve Board. 
(3) The financial company has incurred, or is 
likely to incur, losses that will deplete all or substan-
tially all of its capital, and there is no reasonable 
prospect for the company to avoid such depletion 
without assistance under section 1604. 
(4) The assets of the financial company are, or 
are likely to be, less than its obligations to creditors 
and others. 
(5) The financial company is, or is likely to be, 
unable to pay its obligations (other than those sub-
ject to a bona fide dispute) in the normal course of 
business. 
SEC. 1604. DISSOLUTION; STABILIZATION. 
(a) APPOINTMENT OF RECEIVER.— 
(1) IN GENERAL.—Upon the Secretary making 
a determination in accordance with section 1603(b),
336 
the Secretary shall appoint the Corporation as re-
ceiver for the covered financial company. 
(2) TIME
LIMIT
ON
RECEIVERSHIP
AUTHOR-
ITY.—Any appointment of the Corporation as re-
ceiver under paragraph (1) shall terminate on the 
date that is the end of the 1-year period beginning 
on the date such appointment is made. 
(3) EXTENSION
OF
TIME
LIMIT.—The time 
limit established in paragraph (2) may be extended 
by the Secretary for up to 1 additional year if— 
(A) the Corporation has not completed the 
dissolution of the company within the time pro-
vided in paragraph (2); and 
(B) the Secretary certifies in writing that 
continuation of the receivership is necessary— 
(i) to protect the best interests of the 
taxpayers of the United States; and 
(ii) to protect the stability of the fi-
nancial system and the economy of the 
United States. 
(4) FURTHER EXTENSION.—The time limit, as 
extended in paragraph (3), may be extended for up 
to 1 additional year if— 
(A) the conditions of paragraph (3) are 
met; and
337 
(B) the Corporation submits a report to 
the Congress, no later than 60 days before the 
receivership will expire under the extended limit 
under paragraph (3), that describes in detail— 
(i) the basis for the determination by 
the Corporation that a second extension is 
necessary; and 
(ii) the specific plan of the Corpora-
tion for concluding the receivership before 
the end of the proposed additional year. 
(b) DISSOLUTION LIMITATIONS.— 
(1) IN GENERAL.—An insolvent financial com-
pany may be dissolved under this subtitle only if the 
failure and dissolution of such company under title 
11, United States Code, would be systemically desta-
bilizing, as determined by the appropriate Federal 
regulatory agencies and the Secretary of the Treas-
ury (in consultation with the President) in accord-
ance with section 1603(b). 
(2) LIQUIDATION.—A financial company that 
comes within coverage of this subtitle for dissolution 
shall be placed in liquidation, and the associated liq-
uidation costs shall be paid from the company’s as-
sets and borne by the shareholders and unsecured 
creditors of such company.
338 
(3) ASSESSMENT
FOR
EXCESS
LIQUIDATION 
COSTS.—Any liquidation costs that exceed the 
amount of liquidated assets of the company shall be 
paid through assessments on large financial compa-
nies. 
(c) CONSULTATION.—The Corporation, as receiver— 
(1) shall consult with the regulators of the cov-
ered financial company and its covered subsidiaries 
for purposes of ensuring an orderly dissolution of 
the covered financial company; 
(2) may consult with, or under section 
1609(a)(1)(B)(v) or section 1609(a)(1)(K) acquire 
services of, any outside experts as appropriate to in-
form and aid the Corporation in the dissolution 
process; and 
(3) shall consult with the primary regulators of 
any subsidiaries of the covered financial company 
that are not covered subsidiaries as described in sec-
tion 1602(9)(B)(v) and coordinate with such regu-
lators regarding the treatment of such solvent sub-
sidiaries and the separate dissolution of any such in-
solvent subsidiaries under other governmental au-
thority, as appropriate. 
(d) EMERGENCY STABILIZATION AFTER APPOINT-
MENT OF RECEIVER.—Upon the Secretary appointing the
339 
Corporation as receiver under subsection (a), the Corpora-
tion may, in its corporate capacity and as an agency of 
the United States, with the approval of the Secretary and 
subject to the conditions in subsections (f) through (g), 
take the following actions under such terms and conditions 
that the Corporation and the Secretary jointly deem ap-
propriate: 
(1) Making loans to, or purchasing any debt ob-
ligation of, the covered financial company or any 
covered subsidiary. 
(2) Purchasing assets of the covered financial 
company or any covered subsidiary directly or 
through an entity established by the Corporation for 
such purpose. 
(3) Assuming or guaranteeing the obligations of 
the covered financial company or any covered sub-
sidiary to one or more third parties. 
(4) Taking a lien on any or all assets of the 
covered financial company or any covered subsidiary, 
including a first priority lien on all unencumbered 
assets of the company or any covered subsidiary to 
secure repayment of any transactions conducted 
under this subsection. 
(5) Selling or transferring all, or any part 
thereof, of such acquired assets, liabilities, or obliga-
340 
tions of the covered financial company or any cov-
ered subsidiary. 
(e) TREATMENT OF INSURANCE COMPANIES AND IN-
SURANCE COMPANY SUBSIDIARIES.— 
(1) IN GENERAL.—Notwithstanding subsection 
(a), if an insurance company covered by a State law 
designed specifically to deal with the rehabilitation, 
liquidation or insolvency of an insurance company is 
a covered financial company or a subsidiary of a cov-
ered financial company, resolution of such insurance 
company, and any subsidiary of such company, will 
be conducted as provided under such State law. 
(2) EXCEPTION FOR COVERED SUBSIDIARIES.— 
The requirement of paragraph (1) shall not apply 
with respect to any covered subsidiary of such an in-
surance company, that is not itself an insurance 
company. 
(3) 
BACKUP
AUTHORITY.—Notwithstanding 
paragraph (1), with respect to a covered financial 
company described under paragraph (1), if, after the 
end of the 60-day period beginning on the date a de-
termination is made under section 1603(b) with re-
spect to such company, the appropriate regulatory 
agency has not filed the appropriate judicial action 
in the appropriate State court to place such com-
341 
pany into dissolution under the State’s laws and re-
quirements, the Corporation shall have the authority 
to stand in the place of the appropriate regulatory 
agency and file the appropriate judicial action in the 
appropriate State court to place such company into 
dissolution under the State’s laws and requirements. 
(f) MANDATORY TERMS AND CONDITIONS FOR ALL 
STABILIZATION ACTIONS.—The Corporation as receiver is 
authorized to take the stabilization actions listed in sub-
section (d) only if— 
(1) the Secretary and the Corporation deter-
mine that such action is necessary for the purpose 
of financial stability and not for the purpose of pre-
serving the covered financial company; 
(2) the Corporation ensures that the share-
holders of a covered financial company do not re-
ceive payment until after all other claims are fully 
paid; 
(3) the Corporation ensures that any funds 
from taxpayers shall be repaid as part of the resolu-
tion process before payments are made to creditors; 
(4) the Corporation ensures that unsecured 
creditors bear losses; 
(5) the Corporation ensures that management 
responsible for the failed condition of the covered fi-
342 
nancial company is removed (if such management 
has not already been removed at the time the Cor-
poration is appointed as receiver); and 
(6) the Corporation ensures that the members 
of the board of directors (or body performing similar 
functions) responsible for the failed condition of the 
covered financial company are removed (if such 
members have not already been removed at the time 
the Corporation is appointed as receiver). 
(g) RECOUPMENT OF FUNDS EXPENDED FOR SYS-
TEMIC STABILIZATION PURPOSES.—Amounts expended 
from the Fund by the Corporation under this section shall 
be repaid in full to the Fund only from the following 
sources: 
(1) DISSOLUTION
PROCESS.—Amounts attrib-
utable to the proceeds of the sale of, or income from, 
the assets of the covered financial company. 
(2) INDUSTRY
ASSESSMENTS.—If the sources 
described in paragraph (1) are insufficient to repay 
the amount of the stabilization action in full, the dif-
ference shall be recouped through assessments on fi-
nancial companies in accordance with section 
1609(o).
343 
SEC. 1605. JUDICIAL REVIEW. 
If a receiver is appointed in accordance with section 
1604, the covered financial company may, not later than 
30 days thereafter, bring an action in the United States 
district court for the judicial district in which the home 
office of such covered financial company is located, or in 
the United States District Court for the District of Colum-
bia, for an order requiring that the receiver be removed, 
and the court shall, upon the merits, dismiss such action 
or direct the receiver to be removed. Review of such an 
action shall be limited to the appointment of a receiver 
under section 1604. 
SEC. 1606. DIRECTORS NOT LIABLE FOR ACQUIESCING IN 
APPOINTMENT OF RECEIVER. 
The members of the board of directors (or body per-
forming similar functions) of a covered financial company 
shall not be liable to the covered financial company’s 
shareholders or creditors for acquiescing in or consenting 
in good faith to— 
(1) the Secretary’s appointment of the Corpora-
tion as receiver for the covered financial company 
under section 1604; or 
(2) an acquisition, combination, or transfer of 
assets or liabilities under section 1609.
344 
SEC. 1607. TERMINATION AND EXCLUSION OF OTHER AC-
TIONS. 
(a) TERMINATION
AND
EXCLUSION
OF
BANK-
RUPTCY.—The Corporation’s acting as receiver for a cov-
ered financial company under this subtitle shall imme-
diately, and by operation of law, terminate any case com-
menced with respect to the covered financial company 
under title 11, United States Code, or any proceeding 
under any State insolvency law with respect to the covered 
financial company, and no such case or proceeding may 
be commenced with respect to the covered financial com-
pany at any time while the Corporation acts as receiver 
for the covered financial company. 
(b) CONVERSION TO BANKRUPTCY.— 
(1) CONVERSION.—The Corporation may at any 
time, with the approval of the Secretary and after 
consulting with the Council, convert the receivership 
of a covered financial company to a proceeding 
under chapter 7 or 11 of title 11, United States 
Code, by filing a petition against the covered finan-
cial company under section 303(m) of such title. The 
Corporation may serve as the trustee for the covered 
financial company in bankruptcy. 
(2) BRIDGE
FINANCIAL
COMPANY.—The Cor-
poration’s exercise of authority under paragraph (1) 
shall not affect any powers or duties of the Corpora-
345 
tion with regard to any bridge financial company es-
tablished under section 1609(h). 
(c) REPORTING TO THE CONGRESS.— 
(1) IN GENERAL.— 
(A) INITIAL REPORT.—Upon the appoint-
ment of the Corporation as receiver under sec-
tion 1604(a), the Corporation shall issue a re-
port on the issue described under paragraph 
(3)(A). 
(B) CONTINUING REPORTS.—At the end of 
each 180-day period after the appointment of 
the Corporation as receiver under section 
1604(a), and continuing while the Corporation 
is acting as receiver, the Corporation shall issue 
a report on the issues described under subpara-
graphs (A) through (C) of paragraph (3). 
(2) COMMITTEES TO RECEIVE REPORTS.—Re-
ports issued under this subsection shall be issued to 
the Committee on Banking, Housing, and Urban Af-
fairs and the Committee on the Judiciary of the 
Senate and the Committee on Financial Services and 
the Committee on the Judiciary of the House of 
Representatives. 
(3) REPORTING ISSUES.—
346 
(A) Why the receivership should continue 
instead of converting the receivership into a 
proceeding under chapter 7 or 11 of title 11, 
United States Code. 
(B) The extent to which unsecured credi-
tors are likely to receive at least as much as 
they would receive if the receivership of the cov-
ered financial company was converted to a case 
under chapter 7 of title 11, United States Code. 
(C) An explanation of each instance where 
the Corporation as receiver of a covered finan-
cial company waived the requirement of 12 
CFR Part 366 with respect to conflicts of inter-
est by any person in the private sector who was 
retained to provide services to the Corporation 
in connection with such receivership. 
SEC. 1608. RULEMAKING. 
The Corporation may, after following the notice and 
comment rulemaking requirements under the Administra-
tive Procedure Act, prescribe such regulations as the Cor-
poration considers necessary or appropriate to implement 
the provisions of this title. 
SEC. 1609. POWERS AND DUTIES OF CORPORATION. 
(a) POWERS AND AUTHORITIES.— 
(1) GENERAL POWERS.—
347 
(A) SUCCESSOR TO COVERED FINANCIAL 
COMPANY.—The Corporation shall, upon ap-
pointment as receiver for a covered financial 
company under section 1604, and by operation 
of law, succeed to— 
(i) all rights, titles, powers, and privi-
leges of the covered financial company, and 
of any stockholder, member, officer, or di-
rector of such institution with respect to 
the covered financial company and the as-
sets of the covered financial company; and 
(ii) title to the books, records, and as-
sets of any previous receiver or other legal 
custodian of such covered financial com-
pany. 
(B) OPERATE
THE
COVERED
FINANCIAL 
COMPANY.—The Corporation as receiver for a 
covered financial company may— 
(i) take over the assets of and operate 
the covered financial company with all the 
powers of the members or shareholders, 
the directors, and the officers of the cov-
ered financial company and conduct all 
business of the covered financial company;
348 
(ii) collect all obligations and money 
due the covered financial company; 
(iii) perform all functions of the cov-
ered financial company in the name of the 
covered financial company; 
(iv) preserve and conserve the assets 
and property of the covered financial com-
pany; and 
(v) provide by contract for assistance 
in fulfilling any function, activity, action, 
or duty of the Corporation as receiver. 
(C) FUNCTIONS OF COVERED FINANCIAL 
COMPANY’S OFFICERS, DIRECTORS, AND SHARE-
HOLDERS.— 
(i) IN
GENERAL.—The Corporation 
may provide for the exercise of any func-
tion by any member or stockholder, direc-
tor, or officer of any covered financial com-
pany for which the Corporation has been 
appointed as receiver under this section. 
(ii) PRESUMPTION.—There shall be a 
strong presumption that the Corporation, 
as receiver, will remove management re-
sponsible for the failed condition of the 
covered financial company (if such man-
349 
agement has not already been removed at 
the time the Corporation is appointed as 
receiver). 
(D) ADDITIONAL POWERS AS RECEIVER.— 
The Corporation may, as receiver, and subject 
to all legally enforceable and perfected security 
interests, place the covered financial company 
in liquidation and proceed to realize upon the 
assets of the covered financial company in such 
manner as the Corporation deems appropriate, 
including through the sale of assets, the trans-
fer of assets to a bridge financial company es-
tablished under subsection (h), or the exercise 
of any other rights or privileges granted to the 
receiver under this section. 
(E) ORGANIZATION OF NEW COMPANIES.— 
The Corporation as receiver may organize a 
bridge financial company under subsection (h). 
(F) MERGER; TRANSFER OF ASSETS AND 
LIABILITIES.— 
(i) IN
GENERAL.—Subject to clause 
(ii), the Corporation as receiver may— 
(I) merge the covered financial 
company with another company; or
350 
(II) transfer any asset or liability 
of the covered financial company (in-
cluding assets and liabilities associ-
ated with any trust or custody busi-
ness) without obtaining any approval, 
assignment, or consent with respect to 
such transfer. 
(ii) FEDERAL
AGENCY
APPROVAL; 
ANTITRUST REVIEW.— 
(I) IN
GENERAL.—If a trans-
action described in clause (i) requires 
approval by a Federal agency, the 
transaction may not be consummated 
before the 5th calendar day after the 
date of approval by the Federal agen-
cy responsible for such approval with 
respect thereto. If, in connection with 
any such approval, a report on com-
petitive factors is required, the Fed-
eral agency responsible for such ap-
proval shall promptly notify the Attor-
ney General of the proposed trans-
action and the Attorney General shall 
provide the required report within 10 
days of the request. If notification
351 
under section 7A of the Clayton Act is 
required with respect to such trans-
action, then the required waiting pe-
riod shall end on the 15th day after 
the date on which the Attorney Gen-
eral and the Federal Trade Commis-
sion receive such notification, unless 
the waiting period is terminated ear-
lier under subsection (b)(2) of such 
section, or is extended pursuant to 
subsection (e)(2) of such section. 
(II) EMERGENCY.—If the Sec-
retary in consultation with the Chair-
man of the Federal Reserve Board 
has found that the Corporation must 
act immediately to prevent the prob-
able failure of the covered financial 
company involved, the approval and 
prior notification referred to in sub-
clause (I) shall not be required and 
the transaction may be consummated 
immediately by the Corporation. The 
preceding sentence shall not otherwise 
modify, impair, or supercede the oper-
ation of any of the antitrust laws (as
352 
defined in subsection (a) of the first 
section of the Clayton Act, except that 
such term includes section 5 of the 
Federal Trade Commission Act to the 
extent that such section 5 relates to 
unfair methods of competition). 
(G) PAYMENT OF VALID OBLIGATIONS.— 
The Corporation, as receiver, shall, to the ex-
tent funds are available, pay all valid obliga-
tions of the covered financial company that are 
due and payable at the time of the appointment 
of the Corporation as receiver in accordance 
with the prescriptions and limitations of this 
title. 
(H) SUBPOENA AUTHORITY.— 
(i) IN
GENERAL.—The Corporation 
may, for purposes of carrying out any 
power, authority, or duty with respect to a 
covered financial company (including deter-
mining any claim against the covered fi-
nancial company and determining and real-
izing upon any asset of any person in the 
course of collecting money due the covered 
financial company), exercise any power es-
tablished under section 8(n) of the Federal
353 
Deposit Insurance Act as if the covered fi-
nancial company were an insured deposi-
tory institution. 
(ii) RULE
OF
CONSTRUCTION.—This 
section shall not be construed as limiting 
any rights that the Corporation, in any ca-
pacity, might otherwise have to exercise 
any powers described in clause (i) under 
any other provision of law. 
(I) INCIDENTAL
POWERS.—The Corpora-
tion, as receiver, may— 
(i) exercise all powers and authorities 
specifically granted to receivers under this 
section and such incidental powers as shall 
be necessary to carry out such powers; and 
(ii) take any action authorized by this 
section, which the Corporation determines 
is in the best interests of the covered fi-
nancial company, its customers, its credi-
tors, its counterparties, or the stability of 
the financial system. 
(J) UTILIZATION OF PRIVATE SECTOR.—In 
carrying out its responsibilities in the manage-
ment and disposition of assets from a covered 
financial company, the Corporation, as receiver,
354 
may utilize the services of private persons, in-
cluding real estate and loan portfolio asset 
management, property management, auction 
marketing, legal, and brokerage services, if such 
services are available in the private sector and 
the Corporation determines utilization of such 
services is practicable, efficient, and cost effec-
tive. 
(K) SHAREHOLDERS AND CREDITORS OF 
COVERED
FINANCIAL
COMPANY.—Notwith-
standing any other provision of law, the Cor-
poration as receiver for a covered financial com-
pany pursuant to this section and its succes-
sion, by operation of law, to the rights, titles, 
powers, and privileges described in subpara-
graph (A) shall terminate all rights and claims 
that the stockholders and creditors of the cov-
ered financial company may have against the 
assets of the covered financial company or the 
Corporation arising out of their status as stock-
holders or creditors, except for their right to 
payment, resolution, or other satisfaction of 
their claims, as permitted under this section. 
The Corporation shall ensure that shareholders 
and unsecured creditors bear losses, consistent
355 
with the priority of claims provisions in section 
1609(b). 
(L) COORDINATION WITH FOREIGN FINAN-
CIAL
AUTHORITIES.—The Corporation as re-
ceiver for a covered financial company shall co-
ordinate with the appropriate foreign financial 
authorities regarding the dissolution of subsidi-
aries of the covered financial company that are 
established in a country other than the United 
States. 
(M) APPOINTMENT OF CONSUMER PRIVACY 
ADVISOR.— 
(i) APPOINTMENT.—Upon the ap-
pointment of the Corporation as receiver 
under section 1604(a), the Corporation 
shall appoint a Consumer Privacy Advisor. 
(ii) DUTIES.—The Consumer Privacy 
Advisor appointed under clause (i) shall 
advise the Corporation with respect to— 
(I) the covered financial com-
pany’s consumer privacy policies; 
(II) the potential losses or gains 
of privacy to consumers upon any 
sale, lease, or other transfer of mate-
356 
rial assets of the covered financial 
company; 
(III) the potential costs or bene-
fits to consumers upon any sale, lease, 
or other transfer of material assets of 
the covered financial company; and 
(IV) the potential alternatives 
that would mitigate potential privacy 
loses or potential costs to consumers. 
(2) AUTHORITY OF CORPORATION TO DETER-
MINE CLAIMS.— 
(A) IN GENERAL.—The Corporation may, 
as receiver, determine claims in accordance with 
the requirements of this subsection and regula-
tions prescribed under paragraph (3). 
(B) NOTICE
REQUIREMENTS.—The re-
ceiver, in any case involving the liquidation or 
winding up of the affairs of a covered financial 
company, shall— 
(i) promptly publish a notice to the 
covered financial company’s creditors to 
present their claims, together with proof, 
to the receiver by a date specified in the 
notice which shall be not less than 90 days 
after the publication of such notice; and
357 
(ii) republish such notice approxi-
mately 1 month and 2 months, respec-
tively, after the publication under clause 
(i). 
(C) MAILING
REQUIRED.—The receiver 
shall mail a notice similar to the notice pub-
lished under subparagraph (B)(i) at the time of 
such publication to any creditor shown on the 
covered financial company’s books— 
(i) at the creditor’s last address ap-
pearing in such books; or 
(ii) upon discovery of the name and 
address of a claimant not appearing on the 
covered financial company’s books, within 
30 days after the discovery of such name 
and address. 
(3) RULEMAKING AUTHORITY RELATING TO DE-
TERMINATION OF CLAIMS.— 
(A) IN GENERAL.—Subject to subsection 
(b), the Corporation shall, after following the 
notice and comment rulemaking requirements 
under the Administrative Procedure Act, pre-
scribe rules and regulations regarding the al-
lowance or disallowance of claims by the Cor-
poration and providing for administrative deter-
358 
mination of claims and review of such deter-
mination. 
(B) EXISTING
RULES.—The Corporation 
may elect to use the regulations adopted pursu-
ant to the provisions of section 11 of the Fed-
eral Deposit Insurance Act with respect to the 
determination of claims for a covered financial 
company as if the covered financial company 
were an insured depository institution. 
(4) PROCEDURES
FOR
DETERMINATION
OF 
CLAIMS.— 
(A) DETERMINATION PERIOD.— 
(i) IN GENERAL.—Before the end of 
the 180-day period beginning on the date 
any claim against a covered financial com-
pany is filed with the Corporation as re-
ceiver, the Corporation shall determine 
whether to allow or disallow the claim and 
shall notify the claimant of any determina-
tion with respect to such claim. 
(ii) EXTENSION OF TIME.—The period 
described in clause (i) may be extended by 
a written agreement between the claimant 
and the Corporation.
359 
(iii) MAILING
OF
NOTICE
SUFFI-
CIENT.—The requirements of clause (i) 
shall be deemed to be satisfied if the notice 
of any determination with respect to any 
claim is mailed to the last address of the 
claimant which appears— 
(I) on the covered financial com-
pany’s books; 
(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 any claim filed under 
clause (i) is disallowed, the notice to the 
claimant shall contain— 
(I) a statement of each reason 
for the disallowance; and 
(II) the procedures available for 
obtaining agency review of the deter-
mination to disallow the claim or judi-
cial determination of the claim. 
(B) ALLOWANCE OF PROVEN CLAIM.—The 
Corporation shall allow any claim received on or 
before the date specified in the notice published
360 
under paragraph (2)(B)(i) by the Corporation 
from any claimant which is proved to the satis-
faction of the Corporation. 
(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 any claimant after the date 
specified in the notice published under 
paragraph (2)(B)(i) and such claim may 
be considered by the receiver 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 disallow any portion of any claim by
361 
a creditor or claim of security, preference, 
or priority which is not proved to the satis-
faction of the Corporation. 
(ii) PAYMENTS TO LESS THAN FULLY 
SECURED
CREDITORS.—In the case of a 
claim of a creditor against a covered finan-
cial company which is secured by any prop-
erty or other asset of such covered finan-
cial company, the receiver— 
(I) may treat the portion of such 
claim which exceeds an amount equal 
to the fair market value of such prop-
erty or other asset as an unsecured 
claim against the covered financial 
company; and 
(II) may not make any payment 
with respect to such unsecured por-
tion of the claim other than in connec-
tion with the disposition of all claims 
of unsecured creditors of the covered 
financial company. 
(iii) EXCEPTIONS.—No provision of 
this paragraph shall apply with respect 
to—
362 
(I) any extension of credit from 
any Federal Reserve bank, or the Cor-
poration, to any covered financial 
company; or 
(II) subject to clause (ii), any le-
gally enforceable or perfected security 
interest in the assets of the covered fi-
nancial company securing any such 
extension of credit. 
(iv) PAYMENTS TO FULLY SECURED 
CREDITORS.—Notwithstanding any other 
provision of law, in any receivership of a 
covered 
financial 
company 
in 
which 
amounts realized from the dissolution are 
insufficient to satisfy completely any 
amounts owed to the United States or to 
the Fund, as determined in the receiver’s 
sole discretion, an allowed claim under a 
legally enforceable or perfected security in-
terest in assets of the covered financial 
company arising under a qualified financial 
contract (as defined under subsection 
(c)(8)(D)(i)) with an original term of 30 
days or less (except that, for a contract for 
a term linked to a calendar month, the
363 
original term must be less than 1 calendar 
month), secured by collateral other than 
securities issued by the United States 
Treasury, the Board of Governors of the 
Federal Reserve System, any agency of the 
United States, any Federal Reserve bank, 
or any Government Sponsored Enterprise, 
that became a legally enforceable or per-
fected security interest after the date of 
the enactment of this clause, and that is 
not a security interest of the Federal Gov-
ernment in any of the assets of the covered 
financial company in receivership may be 
treated as an unsecured claim in the 
amount specified under clause (v) as nec-
essary to satisfy any amounts owed to the 
United States or to the Fund. Any balance 
of such claim that is treated as an unse-
cured claim under this subparagraph shall 
be paid as a general liability of the covered 
financial company. This clause shall not 
apply with respect to debt obligations se-
cured by real property. This clause may 
only be implemented with respect to se-
cured creditors if, as a result of the dis-
364 
solution of the covered financial company, 
no funds are available to satisfy, in whole 
or in part, any claims of unsecured credi-
tors or shareholders. 
(v) AMOUNT
SPECIFIED.—For pur-
poses of clause (iv), the amount specified 
under this clause, in the case of a secured 
creditor, is the amount of up to 10 per-
cent. 
(E) NO JUDICIAL REVIEW OF DETERMINA-
TION PURSUANT TO SUBPARAGRAPH (D).—No 
court may review the Corporation determination 
pursuant to subparagraph (D) to disallow a 
claim. 
(F) LEGAL EFFECT OF FILING.— 
(i) 
STATUTE
OF
LIMITATION 
TOLLED.—For purposes of any applicable 
statute of limitations, the filing of a claim 
with the Corporation shall constitute a 
commencement of an action. 
(ii) NO
PREJUDICE
TO
OTHER
AC-
TIONS.—Subject to paragraph (9), the fil-
ing of a claim with the Corporation shall 
not prejudice any right of the claimant to 
continue any action which was filed before
365 
the appointment of the Corporation as re-
ceiver for the covered financial company. 
(5) PROVISION FOR JUDICIAL DETERMINATION 
OF CLAIMS.— 
(A) IN GENERAL.—Before the end of the 
60-day period beginning on the earlier of— 
(i) the end of the period described in 
paragraph (4)(A)(i) (or, if extended by 
agreement of the Corporation and the 
claimant, the period described in para-
graph (4)(A)(ii)) with respect to any claim 
against a covered financial company for 
which the Corporation is receiver; or 
(ii) the date of any notice of disallow-
ance of such claim pursuant to paragraph 
(4)(A)(i), 
the claimant may file suit on a claim (or con-
tinue an action commenced before the appoint-
ment of the receiver) in the district or terri-
torial court of the United States for the district 
within which the covered financial company’s 
principal place of business is located or the 
United States District Court for the District of 
Columbia (and such court shall have jurisdic-
tion to hear such claim).
366 
(B) STATUTE
OF
LIMITATIONS.—If any 
claimant fails to file suit on such claim (or con-
tinue an action commenced before the appoint-
ment of the receiver) before the end of the 60- 
day period described in subparagraph (A), the 
claim shall be deemed to be disallowed (other 
than any portion of such claim which was al-
lowed by the receiver) as of the end of such pe-
riod, such disallowance shall be final, and the 
claimant shall have no further rights or rem-
edies with respect to such claim. 
(6) EXPEDITED DETERMINATION OF CLAIMS.— 
(A) 
ESTABLISHMENT
REQUIRED.—The 
Corporation shall establish a procedure for ex-
pedited relief outside of the routine claims proc-
ess established under paragraph (4) for claim-
ants who— 
(i) allege the existence of legally valid 
and enforceable or perfected security inter-
ests in assets of any covered financial com-
pany for which the Corporation has been 
appointed as receiver; and 
(ii) allege that irreparable injury will 
occur if the routine claims procedure is fol-
lowed.
367 
(B) DETERMINATION PERIOD.—Before the 
end of the 90-day period beginning on the date 
any claim is filed in accordance with the proce-
dures established pursuant to subparagraph 
(A), the Corporation shall— 
(i) determine— 
(I) whether to allow or disallow 
such claim; or 
(II) whether such claim should be 
determined pursuant to the proce-
dures established pursuant to para-
graph (4); and 
(ii) notify the claimant of the deter-
mination, and if the claim is disallowed, 
provide a statement of each reason for the 
disallowance and the procedure for obtain-
ing judicial determination. 
(C) PERIOD
FOR
FILING
OR
RENEWING 
SUIT.—Any claimant who files a request for ex-
pedited relief shall be permitted to file a suit, 
or to continue such a suit filed before the ap-
pointment of the Corporation as receiver, seek-
ing a determination of the claimant’s rights 
with respect to such security interest after the 
earlier of—
368 
(i) the end of the 90-day period begin-
ning on the date of the filing of a request 
for expedited relief; or 
(ii) the date the Corporation denies 
the claim. 
(D) STATUTE OF LIMITATIONS.—If an ac-
tion described in subparagraph (C) is not filed, 
or the motion to renew a previously filed suit is 
not made, before the end of the 30-day period 
beginning on the date on which such action or 
motion may be filed in accordance with sub-
paragraph (B), the claim shall be deemed to be 
disallowed as of the end of such period (other 
than any portion of such claim which was al-
lowed by the receiver), such disallowance shall 
be final, and the claimant shall have no further 
rights or remedies with respect to such claim. 
(E) LEGAL EFFECT OF FILING.— 
(i) 
STATUTE
OF
LIMITATION 
TOLLED.—For purposes of any applicable 
statute of limitations, the filing of a claim 
with the receiver shall constitute a com-
mencement of an action. 
(ii) NO
PREJUDICE
TO
OTHER
AC-
TIONS.—Subject to paragraph (9), the fil-
369 
ing of a claim with the receiver shall not 
prejudice any right of the claimant to con-
tinue any action which was filed before the 
appointment of the Corporation as receiver 
for the covered financial company. 
(7) AGREEMENTS AGAINST INTEREST OF THE 
RECEIVER.—No agreement that tends to diminish or 
defeat the interest of the Corporation as receiver in 
any asset acquired by the receiver under this section 
shall be valid against the receiver unless such agree-
ment is in writing and executed by an authorized of-
ficer or representative of the covered financial com-
pany. 
(8) PAYMENT OF CLAIMS.— 
(A) IN GENERAL.—The Corporation as re-
ceiver may, in its discretion and to the extent 
funds are available, pay creditor claims, in such 
manner and amounts as are authorized under 
this section, which are— 
(i) allowed by the receiver; 
(ii) approved by the Corporation pur-
suant to a final determination pursuant to 
paragraph (6); or 
(iii) determined by the final judgment 
of any court of competent jurisdiction.
370 
(B) 
PAYMENT
OF
DIVIDENDS
ON 
CLAIMS.—The receiver may, in the receiver’s 
sole discretion and to the extent otherwise per-
mitted by this section, pay dividends on proven 
claims at any time, and no liability shall attach 
to the Corporation (in the Corporation’s capac-
ity as receiver), by reason of any such payment, 
for failure to pay dividends to a claimant whose 
claim is not proved at the time of any such pay-
ment. 
(C) RULEMAKING
AUTHORITY
OF
COR-
PORATION.—The Corporation may prescribe 
such rules, including definitions of terms, as it 
deems appropriate to establish a single uniform 
interest rate for, or to make payments of post 
insolvency interest to creditors holding proven 
claims against the receivership estates of a cov-
ered financial company following satisfaction by 
the receiver of the principal amount of all cred-
itor claims. 
(9) SUSPENSION OF LEGAL ACTIONS.— 
(A) IN GENERAL.—After the appointment 
of the Corporation as receiver for a covered fi-
nancial company, the Corporation may request 
a stay for a period not to exceed 90 days in any
371 
noncriminal judicial action or proceeding to 
which such covered financial company is or be-
comes a party. 
(B) GRANT OF STAY BY ALL COURTS RE-
QUIRED.—Upon receipt of a request by the Cor-
poration pursuant to subparagraph (A) for a 
stay of any non-criminal judicial action or pro-
ceeding in any court with jurisdiction of such 
action or proceeding, the court shall grant such 
stay as to all parties. 
(10) ADDITIONAL RIGHTS AND DUTIES.— 
(A) PRIOR
FINAL
ADJUDICATION.—The 
Corporation 
shall 
abide 
by 
any 
final 
unappealable judgment of any court of com-
petent jurisdiction which was rendered before 
the appointment of the Corporation as receiver. 
(B) RIGHTS
AND
REMEDIES
OF
RE-
CEIVER.—In the event of any appealable judg-
ment, the Corporation as receiver shall— 
(i) have all the rights and remedies 
available to the covered financial company 
(before the appointment of the receiver 
under section 1604) and the Corporation, 
including but not limited to removal to 
Federal court and all appellate rights; and
372 
(ii) not be required to post any bond 
in order to pursue such remedies. 
(C) NO ATTACHMENT OR EXECUTION.—No 
attachment or execution may issue by any court 
upon assets in the possession of the receiver. 
(D) LIMITATION ON JUDICIAL REVIEW.— 
Except as otherwise provided in this subsection, 
no court shall have jurisdiction over— 
(i) any claim or action for payment 
from, or any action seeking a determina-
tion of rights with respect to, the assets of 
any covered financial company for which 
the Corporation has been appointed re-
ceiver, including any assets which the Cor-
poration may acquire from itself as such 
receiver; or 
(ii) any claim relating to any act or 
omission of such covered financial company 
or the Corporation as receiver. 
(E) DISPOSITION
OF
ASSETS.—In exer-
cising any right, power, privilege, or authority 
as receiver in connection with any covered fi-
nancial company for which the Corporation is 
acting as receiver under this section, the Cor-
poration shall, to the greatest extent prac-
373 
ticable, conduct its operations in a manner 
which— 
(i) maximizes the net present value 
return from the sale or disposition of such 
assets; 
(ii) minimizes the amount of any loss 
realized in the resolution of cases; 
(iii) minimizes the cost to the general 
fund of the Treasury; 
(iv) mitigates the potential for serious 
adverse effects to the financial system and 
the United States economy; 
(v) ensures timely and adequate com-
petition and fair and consistent treatment 
of offerors; and 
(vi) prohibits discrimination on the 
basis of race, sex, or ethnic groups in the 
solicitation and consideration of offers. 
(11) STATUTE OF LIMITATIONS FOR ACTIONS 
BROUGHT BY RECEIVER.— 
(A) IN
GENERAL.—Notwithstanding any 
provision of any contract, the applicable statute 
of limitations with regard to any action brought 
by the Corporation as receiver shall be—
374 
(i) in the case of any contract claim, 
the longer of— 
(I) the 6-year period beginning 
on the date the claim accrues; or 
(II) the period applicable under 
State law; and 
(ii) in the case of any tort claim, the 
longer of— 
(I) the 3-year period beginning 
on the date the claim accrues; or 
(II) the period applicable under 
State law. 
(B) DETERMINATION
OF
THE
DATE
ON 
WHICH
A
CLAIM
ACCRUES.—For purposes of 
subparagraph (A), the date on which the stat-
ute of limitations begins to run on any claim 
described in such subparagraph shall be the 
later of— 
(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.—
375 
(i) IN GENERAL.—In the case of any 
tort claim described in clause (ii) for which 
the statute of limitation applicable under 
State law with respect to such claim has 
expired not more than 5 years before the 
appointment of the Corporation as re-
ceiver, the Corporation may bring an ac-
tion as receiver on such claim without re-
gard to the expiration of the statute of lim-
itation applicable under State law. 
(ii) 
CLAIMS
DESCRIBED.—A 
tort 
claim referred to in clause (i) is a claim 
arising from fraud, intentional misconduct 
resulting in unjust enrichment, or inten-
tional misconduct resulting in substantial 
loss to the covered financial company. 
(12) FRAUDULENT TRANSFERS.— 
(A) IN GENERAL.—The Corporation, as re-
ceiver for any covered financial company, may 
avoid a transfer of any interest of an institution 
affiliated party, or any person who the Corpora-
tion determines is a debtor of the covered finan-
cial company, in property, or any obligation in-
curred by such party or person, that was made 
within 5 years of the date on which the Cor-
376 
poration was appointed receiver if such party or 
person voluntarily or involuntarily made such 
transfer or incurred such liability with the in-
tent to hinder, delay, or defraud the covered fi-
nancial company or the Corporation. 
(B) 
PREFERENTIAL
TRANSFERS.—The 
Corporation as receiver for any covered finan-
cial company may avoid a transfer of an inter-
est of the covered financial company in property 
that— 
(i) was made to or for the benefit of 
a creditor; 
(ii) was made for or on account of an 
antecedent debt that was owed by the cov-
ered financial company before the transfer 
was made; 
(iii) was made while the covered fi-
nancial company was insolvent; 
(iv) was made— 
(I) on or within 90 days before 
the date on which the Corporation 
was appointed receiver; or 
(II) between 90 days and one 
year before the date that the Corpora-
tion was appointed receiver, if such
377 
creditor at the time of the transfer 
was an insider, as that term is defined 
in section 101(31) of title 11, United 
States Code; and 
(v) enables such creditor to receive 
more than such creditor would receive in 
the liquidation of the covered financial 
company if— 
(I) the transfer had not been 
made; and 
(II) such creditor received pay-
ment of such debt to the extent pro-
vided by the provisions of this sub-
title. 
(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. 
(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 com-
378 
pany, the property transferred or, if a court so 
orders, the value of such property from— 
(i) the initial transferee of such trans-
fer or the entity 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)— 
(i) from a transferee that takes for 
value, including satisfaction or securing of 
a present or antecedent debt, in good faith, 
and without knowledge of the violability of 
the transfer avoided; or 
(ii) any immediate or mediate good 
faith transferee of such transferee. 
(F) DEFENSES.—A transferee or obligee 
from whom the Corporation seeks to recover a 
transfer or avoid an obligation under subpara-
graph (A), (B) or (C) shall have the same af-
firmative defenses and rights to liens on the 
property transferred to the extent they would be 
available to a transferee or obligee from whom 
a trustee under title 11 seeks to recover a
379 
transfer under sections 547, 548, and 549 of 
title 11, United States Code. 
(G) LIMITATIONS ON AVOIDING POWERS.— 
The rights of the Corporation under subpara-
graph (A), (B) or (C) are restricted to the same 
extent as the rights of a trustee in bankruptcy 
under section 546(b)(1) of the Bankruptcy 
Code. 
(H) PRESUMPTION OF INSOLVENCY.—For 
purposes of subparagraph (B), the covered fi-
nancial company is presumed to have been in-
solvent on and during the 90 days immediately 
preceding the date on which the Corporation is 
appointed as receiver. 
(I) RIGHTS UNDER THIS SUBSECTION.— 
The rights of the Corporation as receiver for a 
covered financial company under this subsection 
shall be superior to any rights of a trustee or 
any other party (other than any party which is 
a Federal agency of a Federal Home Loan 
Bank) under title 11, United States Code. 
(J) RIGHT OF RECOVERY.—To the extent 
a transfer is avoided under subparagraph (A), 
the Corporation may recover, for the benefit of 
the covered financial company, the property
380 
transferred or, if a court so orders, the value of 
such property (at the time of such transfer) 
from— 
(i) the initial transferee of such trans-
fer or the institution-affiliated party or 
person for whose benefit such transfer was 
made; or 
(ii) any immediate or mediate trans-
feree of any such initial transferee. 
(K) RIGHTS
OF
TRANSFEREE
OR
OBLI-
GEE.—The Corporation may not recover under 
subparagraph (B)— 
(i) any transfer that takes for value, 
including satisfaction or securing of a 
present or antecedent debt, in good faith; 
or 
(ii) any immediate or mediate good 
faith transferee of such transferee. 
(L) RIGHTS UNDER THIS SUBSECTION.— 
The rights of the Corporation as receiver of a 
covered financial company under this subsection 
shall be superior to any rights of a trustee or 
any other party (other than any party which is 
a Federal agency) under title 11, United States 
Code.
381 
(M) DEFINITION.—For purposes of this 
subsection, the term ‘‘institution affiliated 
party’’ means— 
(i) any director, officer, employee, or 
controlling stockholder of, or agent for, a 
covered financial company; 
(ii) any shareholder, consultant, joint 
venture partner, and any other person as 
determined by the Corporation (by regula-
tion or otherwise) who participates in the 
conduct of the affairs of a covered finan-
cial company; and 
(iii) any independent contractor (in-
cluding any attorney, appraiser, or ac-
countant) who knowingly or recklessly par-
ticipates in— 
(I) any violation of any law or 
regulation; 
(II) any breach of fiduciary duty; 
or 
(III) any unsafe or unsound 
practice, 
which caused or is likely to cause more 
than a minimal financial loss to, or a sig-
382 
nificant adverse effect on, the covered fi-
nancial company. 
(13) ATTACHMENT OF ASSETS AND OTHER IN-
JUNCTIVE RELIEF.—Subject to paragraph (14), any 
court of competent jurisdiction may, at the request 
of the Corporation, issue an order in accordance 
with Rule 65 of the Federal Rules of Civil Proce-
dure, including an order placing the assets of any 
person designated by the Corporation under the con-
trol of the court and appointing a trustee to hold 
such assets. 
(14) STANDARDS.— 
(A) SHOWING.—Rule 65 of the Federal 
Rules of Civil Procedure shall apply with re-
spect to any proceeding under paragraph (13) 
without regard to the requirement of such rule 
that the applicant show that the injury, loss, or 
damage is irreparable and immediate. 
(B) STATE PROCEEDING.—If, in the case 
of any proceeding in a State court, the court 
determines that rules of civil procedure avail-
able under the laws of such State provide sub-
stantially similar protections to such party’s 
right to due process as Rule 65 (as modified 
with respect to such proceeding by subpara-
383 
graph (A)), the relief sought by the Corporation 
pursuant to paragraph (14) may be requested 
under the laws of such State. 
(15) TREATMENT
OF
CLAIMS
ARISING
FROM 
BREACH OF CONTRACTS EXECUTED BY THE COR-
PORATION
AS
RECEIVER.—Notwithstanding 
any 
other provision of this subsection, any final and 
unappealable judgment for monetary damages en-
tered against the Corporation as receiver for a cov-
ered financial company for the breach of an agree-
ment executed or approved by the Corporation after 
the date of its appointment shall be paid as an ad-
ministrative expense of the receiver. Nothing in this 
paragraph shall be construed to limit the power of 
a receiver to exercise any rights under contract or 
law, including to terminate, breach, cancel, or other-
wise discontinue such agreement. 
(16) ACCOUNTING
AND
RECORDKEEPING
RE-
QUIREMENTS.— 
(A) IN GENERAL.—The Corporation as re-
ceiver shall, consistent with the accounting and 
reporting practices and procedures established 
by the Corporation, maintain a full accounting 
of each receivership or other disposition of any 
covered financial company.
384 
(B) ANNUAL ACCOUNTING OR REPORT.— 
With respect to each receivership to which the 
Corporation was appointed, the Corporation 
shall make an annual accounting or report, as 
appropriate, available to the Secretary and the 
Comptroller General of the United States. 
(C) AVAILABILITY OF REPORTS.—Any re-
port prepared pursuant to subparagraph (B) 
shall be made available by the Corporation upon 
request to any member of the public. 
(D) RECORDKEEPING REQUIREMENT.— 
(i) IN GENERAL.—Except as provided 
in clause (ii), after the end of the 6-year 
period beginning on the date the Corpora-
tion is appointed as receiver of a covered 
financial company the Corporation may de-
stroy any records of such covered financial 
company which the Corporation, in the 
Corporation’s discretion, determines to be 
unnecessary unless directed not to do so by 
a court of competent jurisdiction or gov-
ernmental agency, or prohibited by law. 
(ii) OLD RECORDS.—Notwithstanding 
clause (i), the Corporation may destroy 
records of a covered financial company
385 
which are at least 10 years old as of the 
date on which the Corporation is appointed 
as the receiver of such company in accord-
ance with clause (i) at any time after such 
appointment is final, without regard to the 
6-year period of limitation contained in 
clause (i). 
(b) PRIORITY
OF
EXPENSES
AND
UNSECURED 
CLAIMS.— 
(1) IN GENERAL.—Unsecured claims against a 
covered financial company, or the receiver for such 
covered financial company under this section, that 
are proven to the satisfaction of the receiver shall 
have priority in the following order: 
(A) Administrative expenses of the re-
ceiver. 
(B) Any amounts owed to the United 
States, unless the United States agrees or con-
sents otherwise. 
(C) Wages, salaries, or commissions, in-
cluding vacation, severance, and sick leave pay 
earned by an individual (other than manage-
ment responsible for the failed condition of the 
covered financial company who have been re-
moved), subject to the limitations for such pay-
386 
ments contained in title 11, United States 
Code, 
including 
the 
amount 
(11 
U.S.C. 
507(a)(4)) and restrictions on severance pay-
ments to insiders (11 U.S.C. 503(c)). 
(D) Contributions to employee benefit 
plans, subject to the limitations in title 11, 
United States Code (11 U.S.C. 507(a)(5)). 
(E) Any other general or senior liability of 
the covered financial company (which is not a 
liability described under subparagraph (F) or 
(G)). 
(F) Any obligation subordinated to general 
creditors (which is not an obligation described 
under subparagraph (G)). 
(G) 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
PRI-
ORITY.—In the event that the Corporation as re-
ceiver is unable to obtain unsecured credit for the
387 
covered financial company from commercial sources, 
the Corporation as receiver may obtain credit or 
incur debt on the part of the covered financial com-
pany which shall have priority over any or all admin-
istrative expenses of the receiver under paragraph 
(1)(A). 
(3) CLAIMS OF THE UNITED STATES.—Unse-
cured claims of the United States shall, at a min-
imum, have a higher priority than liabilities of the 
covered financial company that count as regulatory 
capital. 
(4) CREDITORS SIMILARLY SITUATED.—Subject 
to the priorities established under paragraphs (2) 
and (3), all claimants of a covered financial company 
that are similarly situated under paragraph (1) shall 
be treated in a similar manner, except that the re-
ceiver may take any action (including making pay-
ments) that does not comply with this subsection, 
if— 
(A) the Corporation determines that such 
action is necessary to maximize the value of the 
assets of the covered financial company, to 
maximize the present value return from the sale 
or other disposition of the assets of the covered 
financial company, to minimize the amount of
388 
any loss realized upon the sale or other disposi-
tion of the assets of the covered financial com-
pany, or to contain or address serious adverse 
effects on financial stability or the U.S. econ-
omy; and 
(B) all claimants that are similarly situ-
ated under paragraph (1) receive not less than 
the amount provided in subsection (d)(2). 
(5) SECURED CLAIMS UNAFFECTED.—This sub-
section shall not affect secured claims, except to the 
extent that the security is insufficient to satisfy the 
claim and then only with regard to the difference be-
tween the claim and the amount realized from the 
security. 
(6) DEFINITIONS.—As used in this subsection, 
the term ‘‘administrative expenses of the receiver’’ 
includes— 
(A) the actual, necessary costs and ex-
penses incurred by the receiver in preserving 
the assets of a covered financial company or liq-
uidating or otherwise dissolving the affairs of a 
covered financial company for which the Cor-
poration has been appointed as receiver; and 
(B) any obligations that the receiver deter-
mines are necessary and appropriate to facili-
389 
tate the smooth and orderly liquidation or other 
dissolution of the covered financial company. 
(7) 
RULEMAKING.—The 
Corporation 
shall, 
after following the notice and comment rulemaking 
requirements under the Administrative Procedure 
Act, prescribe rules to carry out this section. 
(c) PROVISIONS RELATING TO CONTRACTS ENTERED 
INTO BEFORE APPOINTMENT OF RECEIVER.— 
(1) AUTHORITY TO REPUDIATE CONTRACTS.— 
In addition to any other rights a receiver may have, 
the Corporation as receiver for any covered financial 
company may disaffirm or repudiate any contract or 
lease— 
(A) to which the covered financial company 
is a party; 
(B) the performance of which the receiver, 
in the receiver’s discretion, determines to be 
burdensome; and 
(C) the disaffirmance or repudiation of 
which the receiver determines, in the receiver’s 
discretion, will promote the orderly administra-
tion of the covered financial company’s affairs. 
(2) TIMING
OF
REPUDIATION.—The receiver 
appointed for any covered financial company under 
section 1604 shall determine whether or not to exer-
390 
cise the rights of repudiation under this subsection 
within a reasonable period following such appoint-
ment. 
(3) CLAIMS
FOR
DAMAGES
FOR
REPUDI-
ATION.— 
(A) IN
GENERAL.—Except as otherwise 
provided in subparagraph (C) and paragraphs 
(4), (5), and (6), the liability of the receiver for 
the disaffirmance or repudiation of any contract 
pursuant to paragraph (1) shall be— 
(i) limited to actual direct compen-
satory damages; and 
(ii) determined as of— 
(I) the date of the appointment 
of the receiver; or 
(II) in the case of any contract 
or agreement referred to in paragraph 
(8), the date of the disaffirmance or 
repudiation of such contract or agree-
ment. 
(B) NO
LIABILITY
FOR
OTHER
DAM-
AGES.—For purposes of subparagraph (A), the 
term ‘‘actual direct compensatory damages’’ 
does not include— 
(i) punitive or exemplary damages;
391 
(ii) damages for lost profits or oppor-
tunity; or 
(iii) damages for pain and suffering. 
(C) MEASURE OF DAMAGES FOR REPUDI-
ATION OF QUALIFIED FINANCIAL CONTRACTS.— 
In the case of any qualified financial contract 
or agreement to which paragraph (8) applies, 
compensatory damages shall be— 
(i) deemed to include normal and rea-
sonable costs of cover or other reasonable 
measures of damages utilized in the indus-
tries for such contract and agreement 
claims; and 
(ii) paid in accordance with this sub-
section and subsection (d) except as other-
wise specifically provided in this sub-
section. 
(4) LEASES UNDER WHICH THE COVERED FI-
NANCIAL COMPANY IS THE LESSEE.— 
(A) IN
GENERAL.—If the receiver dis-
affirms or repudiates a lease under which the 
covered financial company was the lessee, the 
receiver shall not be liable for any damages 
(other than damages determined pursuant to
392 
subparagraph (B)) for the disaffirmance or re-
pudiation of such lease. 
(B) 
PAYMENTS
OF
RENT.—Notwith-
standing subparagraph (A), the lessor under a 
lease to which such subparagraph applies 
shall— 
(i) be entitled to the contractual rent 
accruing before the later of the date— 
(I) the notice of disaffirmance or 
repudiation is mailed; or 
(II) the disaffirmance or repudi-
ation becomes effective, unless the les-
sor is in default or breach of the 
terms of the lease; 
(ii) have no claim for damages under 
any acceleration clause or other penalty 
provision in the lease; and 
(iii) have a claim for any unpaid rent, 
subject to all appropriate offsets and de-
fenses, due as of the date of the appoint-
ment which shall be paid in accordance 
with this subsection and subsection (d). 
(5) LEASES UNDER WHICH THE COVERED FI-
NANCIAL COMPANY IS THE LESSOR.—
393 
(A) IN GENERAL.—If the receiver repudi-
ates an unexpired written lease of real property 
of the covered financial company under which 
the covered financial company is the lessor and 
the lessee is not, as of the date of such repudi-
ation, in default, the lessee under such lease 
may either— 
(i) treat the lease as terminated by 
such repudiation; or 
(ii) remain in possession of the lease-
hold interest for the balance of the term of 
the lease unless the lessee defaults under 
the terms of the lease after the date of 
such repudiation. 
(B) PROVISIONS APPLICABLE TO LESSEE 
REMAINING
IN
POSSESSION.—If any lessee 
under a lease described in subparagraph (A) re-
mains in possession of a leasehold interest pur-
suant to clause (ii) of such subparagraph— 
(i) the lessee— 
(I) shall continue to pay the con-
tractual rent pursuant to the terms of 
the lease after the date of the repudi-
ation of such lease;
704 
swap participant, security-based swap dealer or 
major security-based swap participant that is— 
‘‘(i) a national bank; or 
‘‘(ii) a federally chartered branch or 
agency of a foreign bank; and 
‘‘(C) the Federal Deposit Insurance Cor-
poration in the case of a swap dealer, major 
swap participant, security-based swap dealer or 
major security-based swap participant that is a 
state-chartered bank that is not a member of 
the Federal Reserve System. 
‘‘(75) SWAP DEALER.—The term ‘swap dealer’ 
has the same meaning as in section 1a(38) of the 
Commodity Exchange Act (7 U.S.C. 1a(38)). 
‘‘(76) SECURITY-BASED SWAP AGREEMENT.— 
‘‘(A) IN GENERAL.—For purposes of sec-
tions 10, 16, 20, and 21A of this Act, and sec-
tion 17 of the Securities Act of 1933 (15 
U.S.C. 77q), the term ‘security-based swap 
agreement’ means a swap agreement as defined 
in section 206A of the Gramm-Leach-Bliley Act 
(15 U.S.C. 78c note) of which a material term 
is based on the price, yield, value, or volatility 
of any security or any group or index of securi-
ties, or any interest therein.