I 
111TH CONGRESS 
1ST SESSION H. R. 2660 
To amend the Federal Deposit Insurance Act to require the appropriate 
Federal banking agencies to prescribe capital standards for certain spe-
cial purpose entities. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 2, 2009 
Mr. ELLISON introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To amend the Federal Deposit Insurance Act to require 
the appropriate Federal banking agencies to prescribe 
capital standards for certain special purpose entities. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Regulatory Capital En-
hancement Act of 2009’’. 
SEC. 2. REGULATION OF SPECIAL PURPOSE ENTITIES. 
The Federal Deposit Insurance Act (12 U.S.C. 1811 
et seq.) is amended by inserting after section 38 the fol-
lowing new section: 
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‘‘SEC. 38A CAPITAL STANDARDS FOR CERTAIN SPECIAL 
PURPOSE ENTITIES. 
‘‘(a) IN GENERAL.—Each appropriate Federal bank-
ing agency shall prescribe capital standards, including a 
leverage limit and a risk-based capital requirement, for 
special purpose entities, or similar types of vehicles or en-
tities, that are sponsored by insured depository institu-
tions regulated by such agency. Such capital standards 
shall conform, to the extent practicable, with the capital 
standards prescribed for such institution under section 
38(c). 
‘‘(b) ADDITIONAL MEASURES.—An appropriate Fed-
eral banking agency may, by regulation, establish any ad-
ditional relevant capital measures for special purpose enti-
ties, or similar types of vehicles or entities, that are spon-
sored by insured depository institutions that such agency 
determines necessary to guard against the risk that such 
special purpose entities, or similar types of vehicles or en-
tities, become undercapitalized. 
‘‘(c) DETERMINATION OF SPONSORSHIP.—For pur-
poses of subsection (a), a special purpose entity, or similar 
type of vehicle or entity, is sponsored by an insured deposi-
tory institution if the finances of the special purpose enti-
ty, or similar type of vehicle or entity, and the insured 
depository institution are intertwined such that the failure 
of the special purpose entity, or similar type of vehicle or 
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entity, would have a significant impact on the insured de-
pository institution. 
‘‘(d) SPECIAL PURPOSE ENTITY DEFINED.—The ap-
propriate Federal banking agencies shall jointly define the 
term ‘special purpose entity’ for purposes of this section. 
In defining such term, the appropriate Federal banking 
agencies shall focus on trusts and other legal entities es-
tablished by or for an insured depository institution to ful-
fill narrow, specific, or temporary objectives, including— 
‘‘(1) the holding of financial assets transferred 
during a securitization process; 
‘‘(2) issuing applicable securities representing 
claims on such assets; 
‘‘(3) receiving and reinvesting cash flows from 
such assets; and 
‘‘(4) distributing proceeds to holders of the se-
curities.’’. 
Æ 
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