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(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
TITLE I—100 PERCENT CROSS-GUARANTEES
Subtitle A—Definitions
Sec. 101. Definitions.
Sec. 102. Rules of construction.
Subtitle B—Cross-Guarantee Process
Sec. 111. Depository institutions prohibited from operating without a cross-
guarantee contract.
Sec. 112. Parties to cross-guarantee and stop-loss contracts.
Sec. 113. Requirements common to cross-guarantee and stop-loss contracts.
Sec. 114. Requirements applicable only to cross-guarantee contracts.
Sec. 115. Requirements applicable only to stop-loss contracts.
Sec. 116. Eligibility and requirements for direct guarantors.
Sec. 117. Provisions relating to cross-guarantee and stop-loss syndicates.
Sec. 118. Assumption of control of a guaranteed company by a cross-guarantee
syndicate.
Sec. 119. Enforcement of contracts.
Subtitle C—Powers and Duties of the CGRC
CHAPTER 1—CROSS-GUARANTEE PROCESS
Sec. 121. The Cross-Guarantee Regulation Corporation.
Sec. 122. Regulation of the cross-guarantee process.
Sec. 123. Approval process for cross-guarantee and stop-loss contracts.
Sec. 124. Central electronic repository.
Sec. 125. Restrictions on closed loops.
Sec. 126. Treasury oversight of the Cross-Guarantee Regulation Corporation.
CHAPTER 2—PROTECTION OF INSURED DEPOSITS
Sec. 128. Backup insurance on deposits at guaranteed depository institutions.
Subtitle D—Miscellaneous Provisions
Sec. 131. Institutions offering uninsured deposits.
Sec. 132. Preemption of state depositor preference laws.
Sec. 133. Federal Reserve lending.
Sec. 134. Advertising by guaranteed financial groups.
Sec. 135. Guaranteed depository institutions remain federally insured deposi-
tories for purposes of state law.
Subtitle E—Transition to 100 Percent Cross-Guarantee Process
Sec. 141. Effective date of system based on minimum number of guaranteed
depository institutions and amount of total assets.
Sec. 142. Mandatory phase-in of cross-guarantees after effective date of system.
Sec. 143. Appointment of conservator or receiver for institutions which fail to
comply with transition requirements.
Sec. 144. Exit fees.
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Sec. 145. Severance pay and related benefits for former Federal and State
banking agency employees.
Sec. 146. Abolition of Federal Financial Institutions Examination Council.
Sec. 147. Abolition of the Federal Deposit Insurance Corporation.
TITLE II—AMENDMENTS TO OTHER BANKING LAWS
Sec. 201. Amendments relating to national banks.
Sec. 202. Amendments relating to member banks.
Sec. 203. Amendments relating to savings associations.
Sec. 204. Amendments relating to savings and loan holding companies.
Sec. 205. Amendments relating to the Federal Deposit Insurance Corporation.
Sec. 206. Amendments to other banking laws.
TITLE III—AMENDMENTS TO TITLE 11, UNITED STATES CODE
Subtitle A—Amendments to chapter 1 of Title 11
Sec. 301. Definitions.
Sec. 302. Applicability of chapters.
Sec. 303. Public access to papers.
Sec. 304. Who may be a debtor.
Subtitle B—Amendments to chapter 3 of Title 11
Sec. 311. Party in interest.
Sec. 312. Qualification of trustee.
Sec. 313. Notice.
Sec. 314. Automatic stay.
Sec. 315. Executory contracts and unexpired leases.
Subtitle C—Amendments to chapter 5 of Title 11
Sec. 321. Claims of direct guarantors.
Sec. 322. Debtor’s duties.
Sec. 323. Exceptions to discharge.
Sec. 324. Limitation on avoiding powers.
Sec. 325. Preferences.
Sec. 326. Fraudulent transfers and obligations.
Sec. 327. Post-petition transactions.
Sec. 328. Contractual right to liquidate a securities contract.
Sec. 329. Contractual right to liquidate a commodities contract or forward con-
tract.
Sec. 330. Contractual right to liquidate a repurchase agreement.
Sec. 331. Contractual right to terminate a swap agreement.
Subtitle D—Amendments to chapter 11 of Title 11
CHAPTER 1—AMENDMENTS TO EXISTING LAW
Sec. 341. Creditors’ and equity security holders’ committees.
Sec. 342. Who may file a plan.
Sec. 343. Impairment of claims or interest.
Sec. 344. Acceptance of plan.
Sec. 345. Confirmation hearing.
Sec. 346. Confirmation of plan.
Sec. 347. Effect of confirmation.
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CHAPTER 2—ENACTMENT OF SUBCHAPTER V
Sec. 351. Guaranteed company reorganization.
Sec. 352. Inapplicability of other sections.
Sec. 353. Effective date of filing.
Sec. 354. Appointment of trustee.
Sec. 355. Liability of direct guarantors for transfers to guaranteed creditors.
Sec. 356. Effect of Federal legislation and Federal, state, and local regulations.
Sec. 357. Liquidation.
TITLE IV—AMENDMENT TO TITLE 28, UNITED STATES CODE
Sec. 401. Venue.
SEC. 2. FINDINGS AND PURPOSES.
The purposes of this Act are:
(1) To create a competitive and essentially self-
regulating private deposit insurance marketplace by
requiring each bank and savings association which
accepts deposits to protect the full amount of
dsposits held along with most other nondeposit li-
abilities by obtaining cross-guarantee contracts from
syndicates of guarantors.
(2) To induce depository institutions to lend
and invest wisely by authorizing guarantors who
issue cross-guarantee contracts to—
(A) charge risk-sensitive premiums for the
guarantees provided; and
(B) negotiate with the banks and savings
association who enter into such contracts all
other terms and conditions, to the extent such
terms and conditions are not inconsistent with
this Act or other provision of law.
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(3) To make the cross-guarantee process as
self-regulating as possible by establishing a closed
system of guarantors which has an inviolable ‘‘stop-
loss’’ mechanism and numerous constructive tensions
among the participants in the system.
(4) To regulate the cross-guarantee market-
place only to the extent necessary to maintain the
safety, soundness, and viability of the entire cross-
guarantee process and not the solvency of any indi-
vidual bank or savings association regardless of its
size.
TITLE I—100 PERCENT CROSS-
GUARANTEES
Subtitle A—Definitions
SEC. 101. DEFINITIONS.
(a) DEFINITIONS RELATING TO DEPOSITORY INSTI-
TUTIONS, NON-DEPOSITORY GUARANTORS, AND AFFILI-
ATES.—For purposes of this title:
(1) COMPANY.—The term ‘‘company’’
(A) means any corporation, partnership,
business trust, association, or similar organiza-
tion; and
(B) does not include a branch or agency,
or a group of branches and agencies, of a for-
eign bank.
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(2) DEPOSITORY INSTITUTION.—The term ‘‘de-
pository institution’’ has the meaning given to such
term in section 3(c) of the Federal Deposit Insur-
ance Act.
(3) FAILED
DEPOSITORY
INSTITUTION.—The
term ‘‘failed depository institution’’ means any de-
pository institution for which a conservator or re-
ceiver has been appointed by the FDIC.
(4) FOREIGN
BANK
BRANCHES
AND
AGEN-
CIES.—The terms ‘‘agency’’ and ‘‘branch’’, when
used in connection with a reference to a foreign
bank, and the term ‘‘foreign bank’’ have the mean-
ings given to such terms in section 1(b) of the Inter-
national Banking Act of 1978.
(5) GUARANTEED BANKING OFFICE.—The term
‘‘guaranteed banking office’’ means any branch or
agency of a foreign bank where the foreign bank has
entered into a cross-guarantee contract with a cross-
guarantee syndicate.
(6) GUARANTEED COMPANY.—
(A) IN GENERAL.—The term ‘‘guaranteed
company’’ means any company which has en-
tered into, and continues to be guaranteed
under, a cross-guarantee contract with a cross-
guarantee syndicate.
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(B) FOREIGN BANKS.—
(i) IN
GENERAL.—Notwithstanding
subparagraph (A), a foreign bank shall not
be a guaranteed company solely because a
branch or agency of such bank is a guar-
anteed banking office under a cross-guar-
antee contract.
(ii) EXCEPTION FOR FOREIGN BANKS
WHICH ARE SUBSIDIARIES.—Notwithstand-
ing clause (i), a foreign bank may be a
guaranteed company, if such bank is guar-
anteed under a cross-guarantee contract
under section 112(e)(1).
(7) GUARANTEED DEPOSITORY INSTITUTION.—
The term ‘‘guaranteed depository institution’’ means
a depository institution which is a guaranteed com-
pany.
(8) GUARANTEED
FINANCIAL
GROUP.—The
term ‘‘guaranteed financial group’’ means—
(A) a depository institution which is the
sole guaranteed company under a cross-guaran-
tee contract;
(B) 2 or more companies, at least 1 of
which is a depository institution and all of
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which are guaranteed companies under the
same cross-guarantee contract;
(C) any guaranteed banking office which—
(i) is a branch; and
(ii) is the sole guaranteed banking of-
fice under a cross-guarantee contract; or
(D) any 2 or more branches and agencies,
at least 1 of which is a branch and all of which
ara guaranteed banking offices under the same
cross-guarantee contract.
(9) NONDEPOSITORY
GUARANTOR.—The term
‘‘nondepository guarantor’’ means any person which
has entered into a stop-loss contract with a stop-loss
syndicate.
(10) STATE
DEPOSITORY
INSTITUTION.—The
term ‘‘state depository institution’’ has the meaning
given to such term in section 3(c)(5) of the Federal
Deposit Insurance Act.
(11) TERMS
RELATING
TO
AFFILIATION
AND
CONTROL.—
(A) AFFILIATE.—The term ‘‘affiliate’’
means, with respect to any company, any other
company that controls, is controlled by, or is
under common control with such company.
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(B) 
CONTROL.—The 
term 
‘‘control’’
means, with respect to one company’s relation-
ship to another company, one company’s owner-
ship or power to, directly or indirectly, vote 5
percent or more of any class of voting securities
of another company.
(C) SUBSIDIARY.—The term ‘‘subsidiary’’
means, with respect to any company, any com-
pany which such company controls.
(b) DEFINITIONS RELATING TO CROSS-GUARANTEE
AND STOP-LOSS CONTRACTS.—For purposes of this title:
(1) CROSS-GUARANTEE CONTRACT.—The term
‘‘cross-guarantee 
contract’’ 
means 
a 
contract
which—
(A) is entered into between—
(i) 1 or more companies, at least 1 of
which is a depository institution; and
(ii) a cross-guarantee syndicate; and
(B) is approved by the Corporation under
section 123.
(2) 
CROSS-GUARANTEE
OBLIGATION.—The
term ‘‘cross-guarantee obligation’’ means an obliga-
tion of a direct guarantor arising out of a cross-
guarantee or stop-loss contract, and shall include the
obligations 
of 
such 
guarantor 
under 
section
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125(c)(2) of this title and sections 321 and 355 of
title III.
(3) CROSS-GUARANTEE SYNDICATE.—The term
‘‘cross-guarantee syndicate’’ means any group of di-
rect guarantors which has entered into a cross-guar-
antee contract with a guaranteed financial group.
(4) DIRECT
GUARANTOR.—The term ‘‘direct
guarantor’’ means a member of a cross-guarantee or
stop-loss syndicate which has entered into a cross-
guarantee or stop-loss contract with a guaranteed
party.
(5) GROUP CROSS-GUARANTEE SYNDICATE CON-
TRACT.—The term ‘‘group cross-guarantee syndicate
contract’’ means a contract which—
(A) is entered into between 2 or more
guaranteed financial groups and a cross-guar-
antee syndicate; and
(B) is approved by the Corporation under
sections 112(c)(2) and 123.
(6) GUARANTEED OBLIGATION.—
(A) IN GENERAL.—The term ‘‘guaranteed
obligation’’ means an obligation of a guaranteed
party on which a cross-guarantee or stop-loss
syndicate has guaranteed performance.
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(B) RULE OF CONSTRUCTION.—The term
‘‘performance’’ under subparagraph (A) shall be
construed to include making payment of prin-
cipal and interest at the promised time of pay-
ment, such that failure to immediately perform
in a timely manner constitutes a breach of con-
tract.
(7) GUARANTEED PARTY.—The term ‘‘guaran-
teed party’’ means any guaranteed company, guar-
anteed banking office, or nondepository guarantor.
(8) PROJECTED ANNUAL PREMIUM.—The term
‘‘projected annual premium’’ means the amount cal-
culated under section 116(d)(2).
(9) PROJECTED ANNUAL PREMIUM CAPACITY.—
The term ‘‘projected annual premium capacity’’
means the amount which is equal to—
(A) in the case of a guaranteed company,
3 percent of the equity capital of the guaran-
teed financial group which is the party guaran-
teed under the same cross-guarantee contract
under which such company is a guaranteed
company; or
(B) in the case of a nondepository guaran-
tor, 3 percent of the net worth of the guaran-
tor.
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cial group, the amount, as valued pursuant to sec-
tion 114(c), which is equal to—
(A) the consolidated assets of the guaran-
teed financial group; minus
(B) the consolidated liabilities, including
the estimated liquidation value of contingent li-
abilities, of the guaranteed financial group.
(2) NET WORTH.—The term ‘‘net worth’’—
(A) means, with respect to a nondepository
guarantor, the amount which is equal to the
stockholders’ equity, the partnership equity, the
net worth, or the fund balance of the guarantor,
as the case may be, as determined in accord-
ance with generally accepted accounting prin-
ciples;
(B) does not include any equitable interest
or liability which the Corporation determines
should not be treated as net worth for purposes
of this title; and
(C) in the case of any nondepository guar-
antor which controls another nondepository
guarantor or a guaranteed financial group, does
not include the net worth or equity capital of
the subsidiary guarantor or group.
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(3) PREMIUM
INCOME.—The term ‘‘premium
income’’ means any income accrued by a direct guar-
antor under any cross-guarantee or stop-loss con-
tract.
(4) SUBORDINATED DEBT.—
(A) IN
GENERAL.—The term ‘‘subordi-
nated debt’’ means any obligation assumed by
a guaranteed company or guaranteed banking
office which is subordinate in right and pay-
ment to any general creditor of the company or
office.
(B) GENERAL
CREDITORS.—The term
‘‘general creditors’’ includes—
(i) any creditor to which a guaranteed
company or guaranteed banking office has
an obligation which is a guaranteed obliga-
tion under the cross-guarantee contract for
such company or office, unless that credi-
tor is otherwise specifically secured by one
or more assets of the company or office;
and
(ii) any creditor of the guaranteed
company or guaranteed banking office
who—
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(I) is not protected under the
contract; and
(II) is not subject to preference
or subordination in a receivership or
bankruptcy proceeding.
(5) UNENCUMBERED
LIQUID
ASSETS.—The
term ‘‘unencumbered liquid assets’’ means, with re-
spect to any nondepository guarantor, the amount
which is equal to the sum of—
(A) the total amount of cash held by the
guarantor;
(B) the total amount on deposit for the
benefit of the guarantor in any transaction ac-
count at any guaranteed financial group or in
any Federal Reserve bank, including amounts
passed through any Federal home loan bank or
depository institution to a Federal Reserve
bank pursuant to the Federal Reserve Act;
(C) an amount equal to 95 percent of the
total market value of investment-grade debt se-
curities which are held by or for the benefit of
the guarantor and which mature in less than 5
years; and
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(D) an amount equal to 80 percent of the
total market value of equity securities which are
held by or for the benefit of the guarantor,
to the extent any such amount is not pledged, re-
stricted, or otherwise encumbered.
(d) DEFINITIONS RELATING TO FUNDS.—For pur-
poses of this title:
(1) CROSS-GUARANTEE
BACKUP
FUND.—The
term ‘‘cross-guarantee backup fund’’ means the fund
established pursuant to section 128(a).
(2) DEPOSIT.—The term ‘‘deposit’’ has the
meaning given to such term in section 3(1) of the
Federal Deposit Insurance Act, except that such
term does not include any obligation which, under
section 114(a)(2), may not be a guaranteed obliga-
tion.
(3) 
FDIC 
SEVERANCE
FUND.—The 
term
‘‘FDIC severance fund’’ means the fund established
under section 145(d)(1) and administered by the
FDIC for the purpose of providing severance pay
and related benefits for employees of Federal or
State agencies engaged in the regulation of deposi-
tory institutions as of the date of the enactment of
this Act.
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(4) INSURED DEPOSIT.—The term ‘‘insured de-
posit’’ means any deposit of a guaranteed depository
institution which is insured against loss by the cross-
guarantee backup fund under section 128.
(e) DEFINITIONS OF OTHER TERMS.—For purposes
of this title:
(1) BUSINESS DAY.—The term ‘‘business day’’
means any day other than a Saturday, Sunday, or
legal holiday for the Federal Government.
(2) CENTRAL ELECTRONIC REPOSITORY.—The
term ‘‘central electronic repository’’ means the re-
pository established pursuant to section 124(a)(1).
(3) CLOSED
LOOP.—The term ‘‘closed loop’’
means a set of cross-guarantee and stop-loss con-
tracts in which any person which is a direct guaran-
tor under any contract which is part of such set of
contracts, and any person which is directly or indi-
rectly liable for a guaranteed obligation of any such
direct guarantor, are persons which are guaranteed
under a cross-guarantee or stop-loss contract which
is part of such set of contracts.
(4) CORPORATION.—The term ‘‘Corporation’’
means the Cross-Guarantee Regulation Corporation.
(5) CROSS-GUARANTEE
ACTIVATION
DATE.—
The term ‘‘cross-guarantee activation date’’ means
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the date on which the first cross-guarantee contracts
become effective under section 141(a).
(6) FDIC.—The term ‘‘FDIC’’ means the Fed-
eral Deposit Insurance Corporation.
SEC. 102. RULES OF CONSTRUCTION.
(a) IN GENERAL.—This title shall be liberally con-
strued and applied to promote its underlying purposes and
policies.
(b) SPECIFIC RULES OF CONSTRUCTION.—In this
title—
(1) the terms ‘‘guaranteed company,’’ ‘‘guaran-
teed depository institution,’’ ‘‘guaranteed party,’’
and ‘‘nondepository guarantor’’ refer to a party in
such party’s capacity as a party guaranteed under a
cross-guarantee or stop-loss contract;
(2) the term ‘‘direct guarantor’’ refers to a
party in such party’s capacity as a guarantor under
a cross-guarantee or stop-loss contract;
(3) the use of the word ‘‘control’’ in such
phrases as ‘‘assumption of control’’ or ‘‘assumes
control’’ shall not take on the meaning given the
word control under section 101(a)(11)(B);
(4) ‘‘including’’ is not limiting; and
(5) the phrases ‘‘has entered into a cross-guar-
antee contract’’ and ‘‘has entered into a stop-loss
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contract,’’ as used in sections 101(a)(5), 101(a)(6),
and 101(a)(9), shall not be construed to refer to a
contract which is no longer in effect.
Subtitle B—Cross-Guarantee
Process
SEC. 111. DEPOSITORY INSTITUTIONS PROHIBITED FROM
OPERATING WITHOUT A CROSS-GUARANTEE
CONTRACT.
After the applicable effective date under section 142,
a depository institution shall be a guaranteed depository
institution or guaranteed banking office unless the deposi-
tory institution—
(a) is a Federal branch that is not an insured
branch (as the terms ‘‘Federal branch’’ and ‘‘in-
sured branch’’ are defined in sections 3(r) and 3(s)
of the Federal Deposit Insurance Act);
(b) is a failed depository institution; or
(c) has not yet had a conservator or receiver
appointed by the FDIC under section 143.
SEC. 112. PARTIES TO CROSS-GUARANTEE AND STOP-LOSS
CONTRACTS.
(a) CROSS-GUARANTEE CONTRACTS.—
(1) IN GENERAL.—Each cross-guarantee con-
tract shall have at least the following parties:
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(A) A guaranteed financial group as the
party guaranteed under the contract.
(B) The direct guarantors of the guaran-
teed financial group.
(C) A syndicate agent acting on behalf of
the direct guarantors.
(2) AFFILIATE GUARANTEE.—Any affiliate of a
depository institution may guarantee the perform-
ance of such institution’s guaranteed obligations
under a cross-guarantee contract.
(b) STOP-LOSS CONTRACTS.—
(1) IN GENERAL.—Each stop-loss contract shall
have at least the following parties:
(A) A nondepository guarantor as the
party guaranteed under the contract.
(B) 
The 
direct 
guarantors 
of 
the
nondepository guarantor.
(C) A syndicate agent acting on behalf of
the direct guarantors.
(2) AFFILIATE GUARANTEE.—Any affiliate of a
nondepository guarantor may guarantee the per-
formance of the guaranteed obligations of such
nondepository guarantor.
(c) GROUP CROSS-GUARANTEE SYNDICATE CON-
TRACTS.—
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(1) IN GENERAL.—
(A) POOLING
OF
RISK.—Subject to the
provisions of this subsection, the cross-guaran-
tee contracts of 2 or more guaranteed financial
groups may be pooled for syndication.
(B) SEPARATE
CONTRACT
FOR
A
SYN-
DICATE
OF
POOLED
CONTRACTS.—The direct
guarantors comprising the cross-guarantee syn-
dicate for a group of cross-guarantee contracts
may enter into a separate contract (hereinafter
‘‘group cross-guarantee syndicate contract’’)
under which the cross-guaranteed contracts
pooled under such contract shall be incor-
porated by reference.
(C) PROPORTIONAL
RISK.—Each direct
guarantor under a group cross-guarantee syn-
dicate contract shall have the same proportional
rights, privileges, duties, and obligations in each
cross-guarantee contract incorporated by ref-
erence in the syndicate contract as such guar-
antor has in the syndicate contract.
(2) APPROVAL
OF
GROUP
CROSS-GUARANTEE
SYNDICATE
CONTRACT
AND
ITS
POOL
OF
CROSS-
GUARANTEE
CONTRACTS.—The Corporation shall
approve or reject, as a group, a proposed group
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cross-guarantee syndicate contract and the cross-
guarantee contracts pooled under that contract.
(3) AGGREGATION OF ASSETS FOR PURPOSES
OF RISK DIVERSIFICATION.—The assets of all guar-
anteed parties pooled under a group cross-guarantee
syndicate contract shall be aggregated for purposes
of applying the risk diversification requirement es-
tablished in section 114(b).
(4) NO CROSS LIABILITY OF GUARANTEED PAR-
TIES.—No guaranteed party under any cross-guar-
anteed contract shall be liable for any portion of the
guaranteed obligations of a guaranteed party under
any other cross-guarantee contract which is pooled
under the same group cross-guarantee syndicate
contract.
(5) INDIVIDUAL
TERMS
AND
RATES.—The
terms, conditions, and premium rates under each
cross-guarantee contract which is pooled under a
group cross-guarantee syndicate contract may differ
from the terms, conditions, and premium rates
under any other cross-guarantee contract which is
pooled under the syndicate contract.
(6) PARTIES TO INDIVIDUAL CROSS-GUARANTEE
CONTRACTS RETAIN SAME RIGHTS AND DUTIES.—No
right, privilege, duty, or obligation applicable under
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this title to any party to a cross-guarantee contract
shall be affected by the inclusion of the cross-guar-
antee contract in a pool of contracts covered under
a group cross-guarantee syndicate contract.
(7) ADDITIONAL GUARANTEED PARTIES UNDER
A
GROUP
CROSS-GUARANTEE
SYNDICATE
CON-
TRACT.—A group cross-guarantee syndicate contract
can be amended under section 123 to add a guaran-
teed financial group or a depository institution with
a proposed cross-guarantee contract to the existing
syndicate contract if—
(A) the syndicate contract remains in com-
pliance with all of the provisions of this title
after the addition of the institution to the syn-
dicate contract; and
(B) the life of the syndicate contract is not
extended beyond the original term of any cross-
guarantee contract already pooled under the
syndicate contract by the addition of the insti-
tution.
(8) LIFE OF A GROUP CROSS-GUARANTEE SYN-
DICATE CONTRACT.—A group cross-guarantee syn-
dicate contract shall continue in force until each
guaranteed party which is guaranteed under the syn-
dicate contract has ceased to be a guaranteed party
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under a cross-guarantee contract which is pooled
under the syndicate contract.
(9) LENGTH OF CROSS-GUARANTEE CONTRACT
POOLED
UNDER
A
SYNDICATE
CONTRACT.—No
cross-guarantee contract pooled under a group cross-
guarantee syndicate contract shall have a term
longer than the remaining term of the syndicate con-
tract.
(10) RULE
OF
CONSTRUCTION.—Nothing in
this subsection shall be construed as preventing a
cross-guarantee or stop-loss syndicate from becom-
ing a syndicate under 2 or more cross-guarantee or
stop-loss contracts without including such contracts
under a group cross-guarantee syndicate contract.
(d) AFFILIATES AND OTHER PARTIES RELATED TO
A DEPOSITORY INSTITUTION WHICH SHALL BE GUARAN-
TEED UNDER 1 CONTRACT.—
(1) IN GENERAL.—Subject to paragraph (4), a
guaranteed depository institution shall be guaran-
teed under the same cross-guarantee contract under
which any other affiliated guaranteed depository in-
stitution is guaranteed.
(2) CHAIN BANKS.—Subject to paragraph (4),
if more than two-thirds of the shares of any deposi-
tory institution are under common ownership or con-
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trol with more than two-thirds of the shares of any
other depository institution, such depository institu-
tions shall be guaranteed depository institutions
under the same cross-guarantee contract.
(3) DOMESTIC
BRANCHES
AND
AGENCIES
OF
FOREIGN BANKS.—If any branch of a foreign bank
enters into a cross-guarantee contract with a cross-
guarantee syndicate, all branches and agencies of
such foreign bank shall be guaranteed banking of-
fices under the same cross-guarantee contract.
(4) REGULATIONS.—With respect to any depos-
itory institution controlled by more than 1 unaffili-
ated company, the Corporation shall prescribe regu-
lations determining under which cross-guarantee
contract the institution shall be a guaranteed deposi-
tory institution.
(e) SUBSIDIARIES WHICH MAY BE GUARANTEED
UNDER 1 CROSS-GUARANTEE CONTRACT.—
(1) IN GENERAL.—Any company controlled by
a guaranteed depository institution may be a guar-
anteed company under the same cross-guarantee
contract under which such depository institution is
guaranteed.
(2) DEFINITION OF CONTROL.—For purposes
of this subsection, the term ‘‘control’’ means, with
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respect to a guaranteed depository institution’s rela-
tionship to another company, the guaranteed deposi-
tory institution’s ownership or power to, directly or
indirectly, vote more than 50 percent of any class of
voting securities of the other company.
(f) 
PROVISIONS
RELATING
TO
SYNDICATE
AGENTS.—
(1) ANTI-AFFILIATION
RULES.—A syndicate
agent may not—
(A) be an affiliate of any other person who
is a party to any cross-guarantee or stop-loss
contract; or
(B) acquire or retain any ownership inter-
est in any such person.
(2) NO
DEPOSITORY
INSTITUTION, FOREIGN
BANK, OR NON-DEPOSITORY GUARANTOR MAY BE A
SYNDICATE AGENT.—No depository institution, for-
eign bank, or nondepository guarantor may be a
syndicate agent.
(3) NO SYNDICATE AGENT MAY BE A DIRECT
GUARANTOR.—No person who is a syndicate agent
under any cross-guarantee or stop-loss contract may
be, as long as such contract is in effect, a direct
guarantor under any cross-guarantee or stop-loss
contract.
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(4) PROHIBITION ON INTERLOCKS.—No direc-
tor, officer, employee, or subcontractor of a syn-
dicate agent under any cross-guarantee or stop-loss
contract or any director, officer, or employee of such
subcontractor may be a director, officer, or employee
of any other party to such contract.
SEC. 113. REQUIREMENTS COMMON TO CROSS-GUARANTEE
AND STOP-LOSS CONTRACTS.
(a) STOP-LOSS LIMIT FOR LOSSES OF A GUARAN-
TEED PARTY AS A DIRECT GUARANTOR OF OTHER GUAR-
ANTEED PARTIES.—
(1) DEFINITIONS.—For purposes of this sub-
section:
(A) LEVEL 1 PARTY.—The term ‘‘Level 1
party’’ means a guaranteed party under any
cross-guarantee or stop-loss contract.
(B) LEVEL 2 PARTY.—The term ‘‘Level 2
party’’ means a direct guarantor of a Level 1
party.
(C) LEVEL 3 PARTY.—The term ‘‘Level 3
party’’ means a direct guarantor of a Level 2
party.
(D) LOSS.—The term ‘‘loss’’ means the
present value, as of the date of a loss event, of
the cash outlays required to fulfill a Level 2
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party’s cross-guarantee obligations to a Level 1
party due to the occurrence of such loss event,
using as a discount rate the sum of—
(i) 2 percent; and
(ii) the average annual percentage
yield on 3-month bills issued by the Sec-
retary of the Treasury under section
3104(a) of title 31, United States Code, as
determined by the Corporation as of the
most recent issue date preceding the date
of the loss event.
(E) LOSS EVENT.—The term ‘‘loss event’’
means any event described in paragraph (3).
(F) 
STOP-LOSS
LIABILITY.—The 
term
‘‘stop-loss liability’’ means a debt accrued by a
Level 3 party under a cross-guarantee or stop-
loss contract due to its obligation to a Level 2
party under paragraph (2).
(G) STOP-LOSS
RECOVERY.—The term
‘‘stop-loss recovery’’ means the amount accrued
in any calendar month by a Level 2 party due
to the obligation of a Level 3 party under para-
graph (2).
(2) STOP-LOSS OBLIGATION OF DIRECT GUAR-
ANTORS.—
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(A) STOP-LOSS RECOVERY.—For any 12-
calendar month period in which a cross-guaran-
tee or stop-loss contract exists between Level 3
parties and a Level 2 party as of the end of the
first calendar month of such period, Level 3
parties shall be obligated to pay to a Level 2
party an amount equal to the total amount of
losses accrued by the Level 2 party in such par-
ty’s capacity as a direct guarantor of Level 1
parties during such 12-calendar month period,
minus the sum of—
(i) the greater of—
(I) the amount equal to 5 times
the total amount of cross-guarantee
and stop-loss premium income accru-
ing to a Level 2 party in such party’s
capacity as a direct guarantor of
Level 1 parties during such 12-cal-
endar month period;
(II) the amount equal to 5 times
the total amount of cross-guarantee
and stop-loss premium income accru-
ing to the Level 2 party in such par-
ty’s capacity as a direct guarantor of
Level 1 parties during the 12-calendar
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month period preceding such 12-cal-
endar month period; or
(III) in the case of a calendar
month which is among the first 11
calendar months that the Level 2
party has ever been a party guaran-
teed under a cross-guarantee or stop-
loss contract, the amount equal to the
average monthly cross-guarantee and
stop-loss premium income accruing to
the Level 2 party in such party’s ca-
pacity as a direct guarantor of Level
1 parties since first becoming a party
guaranteed under a cross-guarantee
or stop-loss contract, multiplied by 60;
and
(ii) recoveries accrued under this
paragraph by the Level 2 party for each
12-calendar month period ending at the
end of each of the first 11 calendar months
in such 12-calendar month period.
(B) CARRYOVER
FROM
PREVIOUS
CON-
TRACTS.—The amounts calculated in subpara-
graph (A) shall include all losses, premium in-
come, and stop-loss recoveries of the Level 2
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party under any cross-guarantee or stop-loss
contracts under which the Level 2 party was a
party guaranteed during such 12-calendar
month period.
(C) MERGER OF TWO OR MORE GUARAN-
TEED PARTIES.—In the case of any Level 2
party which merged with any other party which
was a Level 2 party guaranteed under another
cross-guarantee 
or 
stop-loss 
contract, 
the
amounts calculated in subparagraph (A) shall
include all losses, premium income, and stop-
loss recoveries of both of the parties prior to
the merger.
(D) OTHER GUARANTEED PARTIES UNDER
THE CONTRACT WHICH WERE PREVIOUSLY DI-
RECT
GUARANTORS.—The amounts calculated
in subparagraph (A) for the Level 2 party shall
include all losses, premium income, and stop-
loss recoveries of any other party guaranteed
under the same cross-guarantee contract as the
Level 2 party, which occurred while such other
party was a Level 2 party while guaranteed
under the same or another cross-guarantee or
stop-loss contract.
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(E) TIMING OF STOP-LOSS RECOVERY.—A
stop-loss recovery shall be accrued as of the last
day of the last calendar month of the 12-cal-
endar month period under which the stop-loss
recovery was calculated.
(F) ADJUSTMENT
FOR
CATASTROPHIC
LOSSES.—
(i) IN GENERAL.—If, for any calendar
month, a closed loop exists in which every
guaranteed party guaranteed under a con-
tract in the closed loop accrues a stop-loss
recovery for such month, then the calcula-
tion of stop-loss recovery for the 12-cal-
endar month period ending in such month
for all the contracts in the closed loop shall
be adjusted as required under clauses (ii)
and (iii).
(ii) ADJUSTMENT.—If, for any cal-
endar month, a closed loop meets the con-
ditions of clause (i), the amounts cal-
culated in subparagraph (A) shall, for the
12-calendar month period in which such
calendar month is the last month, be ad-
justed by increasing from 5 to 6, under
clauses (i)(I) and (i)(II) of subparagraph
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(A), the amount multiplied by the premium
income accruing to a Level 2 party and by
increasing from 60 to 72, under clause
(i)(III) of subparagraph (A), the amount,
multiplied by the average monthly pre-
mium accruing to the Level 2 party.
(iii) 
FURTHER
ADJUSTMENT.—If,
after making the adjustments to the cal-
culation of stop-loss recovery under clause
(ii), every contract in the closed loop under
clause (i) still accrues a stop-loss recovery,
the amounts under (i)(I) and (i)(II) shall
be increased by one and the amount under
(i)(III) shall be increased by twelve, until
at least one guaranteed party guaranteed
under a contract in such closed loop is not
accruing a stop-loss recovery for the cal-
endar month in clause (i).
(3) DETERMINATION
OF
TIME
OF
LOSS.—A
Level 2 party shall accrue a loss as the direct guar-
antor of a Level 1 party as of—
(A) the last day of the calendar month in
which a Level 1 party accrues a stop-loss recov-
ery; or
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(B) the date on which, with respect to a
Level 1 party which is a guaranteed company,
the earliest of the following events occurs:
(i) Notice is filed with the Corporation
under section 118(d)(2)(C) by the cross-
guarantee syndicate of which the Level 2
party is a member that the syndicate has
assumed control of the Level 1 party.
(ii) A transaction which—
(I) involves the acquisition of the
Level 1 party or a significant portion
of the party’s assets, the merger of
the Level 1 party with any other
party, the liquidation of the Level 1
party, or any other transaction involv-
ing a significant portion of the assets
or liabilities of the Level 1 party; and
(II) results directly in a loss for
which the Level 2 parties are liable
under the cross-guarantee contract.
(iii) The Level 1 party becomes a
debtor in a case under title 11, United
States Code.
(4) PREPARATION OF ORIGINAL LOSS ESTIMATE
BY SYNDICATE AGENT.—The syndicate agent for the
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cross-guarantee contract under which a Level 2
party is a direct guarantor shall, whenever a loss
event under subparagraph (3)(B) occurs under such
contract—
(A) estimate the loss for such loss event;
and
(B) by the 15th day of the calendar month
following the calendar month in which such loss
event occurs, notify the central electronic repos-
itory of the estimate of the loss under subpara-
graph (A).
(5) REVISION
OF
LOSS
ESTIMATE
BY
SYN-
DICATE AGENT.—The syndicate agent for the cross-
guarantee contract under which the Level 2 party is
a direct guarantor shall, whenever a loss event under
subparagraph (3)(B) occurs under such contract—
(A) revise the original estimate of the loss
for such loss event and notify the central elec-
tronic repository of such revised estimate at
least as often as the 15th day of—
(i) the third calendar month following
the calendar month in which the loss event
took place;
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(ii) the twelfth calendar month follow-
ing the calendar month in which the loss
event took place; and
(iii) every twelfth month after the cal-
endar month in clause (ii); and
(B) for each estimate of the loss described
in clauses (A)(ii) and (A)(iii), obtain from a
third party a confirmation of the reasonableness
of the revised estimate of the loss.
(6) COMPLETION OF CASH OUTLAYS BECOMES
FINAL
AMOUNT.—Notwithstanding paragraph (5),
once the Level 2 parties have made the final cash
disbursement to fulfill such parties’ cross-guarantee
obligations due to any loss event under subpara-
graph (3)(B).—
(A) the syndicate agent for the cross-guar-
antee contract under which the Level 2 parties
are direct guarantors shall calculate the loss
from such loss event (subject to the third party
confirmation in subparagraph (5)(B)) and no-
tify the central electronic repository of this cal-
culation; and
(B) no further revisions of the loss from
such loss event need take place.
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(7) CALCULATION
AND
CLEARINGHOUSE
DU-
TIES OF CENTRAL ELECTRONIC REPOSITORY.—
(A) CALCULATION OF STOP-LOSS LIABIL-
ITY.—After notification under paragraphs (4),
(5), and (6), the central electronic repository
shall calculate the stop-loss recovery for every
Level 2 party for every 12-month calendar pe-
riod affected by the estimates, revised esti-
mates, and final loss amounts.
(B) ADJUSTMENT FOR INTEREST.—Upon
completing the calculations under subparagraph
(A), the central electronic repository shall then
adjust the amounts owed between Level 2 and
Level 3 parties as outlined in paragraph (8).
(C) NETTING CALCULATION.—Upon com-
pleting the calculations under subparagraph
(B), the central electronic repository shall, for
each person that is a direct guarantor or guar-
anteed party, net the amounts owed by such
person in its capacity as a Level 3 party with
the amount such person is entitled to receive in
its capacity as a Level 2 party to determine the
overall liability or right to payment for such
person.
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(D) NOTIFICATION
OF
PARTIES.—Within
five business days after receiving notification
under paragraphs (4), (5), and (6), the central
electronic repository shall notify any Level 2
party or Level 3 party of the results of the cal-
culations under subparagraphs (A), (B), and
(C).
(E) SETTLEMENT.—
(i) RECEIPT OF PAYMENTS.—Within
three business days after receiving notifica-
tion under subparagraph (D), each party
which, given the calculations under sub-
paragraph (C), has a net liability shall pay
the amount of such liability to the central
electronic repository.
(ii) DISBURSAL OF PAYMENTS.—Upon
receiving all payments under clause (i), the
central electronic repository shall promptly
disburse to each party which has a right to
payment, given the calculations under sub-
paragraph (C), the amount owed such
party.
(iii) PENALTIES
FOR
LATE
PAY-
MENT.—If an obligation under clause (i) is
not paid in a timely manner, any party
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which fails to perform its obligation under
this title to pay the balance owed under
clause (i), including the guarantors of the
specific party most directly liable under
clause (i), shall be liable to the Corporation
for damages of 10 percent of the unpaid
amount for which the party is obliged, plus
interest at the rate specified under sub-
paragraph (C) of paragraph (8).
(F) REGULATIONS.—The Corporation may
prescribe regulations necessary to implement
this paragraph.
(8) CALCULATION
OF
STOP-LOSS
PAYMENTS
PLUS INTEREST.—
(A) ORIGINAL ESTIMATE.—If a determina-
tion under subparagraph (7)(A) is based on the
original estimate of loss under paragraph (4)
and results in a stop-loss recovery for the Level
2 party, each Level 3 party shall owe to the
Level 2 party the amount of the stop-loss liabil-
ity for such Level 3 party plus interest on the
amount of such liability from the last day of the
month in which the loss occurred to the date of
payment under this subparagraph.
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(B) REVISION OF ESTIMATES.—If a deter-
mination under subparagraph (7)(A) results
in—
(i) an increase from the previous esti-
mate of the stop-loss recovery for a par-
ticular month, then each Level 3 party
shall owe to the Level 2 party the amount
of the increase in the Level 3 party’s stop-
loss liability plus interest on the amount of
the increase in such liability from the last
day of such month until payment is made
under this clause; or
(ii) a decrease from the previous esti-
mate of the stop-loss recovery for a par-
ticular month, then the Level 2 party shall
owe each Level 3 party the amount of the
decrease in such Level 3 party’s stop-loss
liability plus interest on the amount of the
decrease in such liability from the last day
of such month until payment is made
under this clause.
(C) INTEREST RATE.—The parties to any
cross-guarantee or stop-loss contract shall agree
to the interest rate to be used for the calcula-
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tion of interest under subparagraphs (A) and
(B).
(b) DIRECT GUARANTOR’S CROSS-GUARANTEE OBLI-
GATIONS UNDER
THE CONTRACT
ARE INDEPENDENT
FORM OTHER PARTIES’ OBLIGATIONS.—The cross-guar-
antee obligations of a direct guarantor under any cross-
guarantee or stop-loss contract shall be independent of
any obligation of any other party under the contract.
(c) GUARANTEED PARTY CANNOT
BE
A DIRECT
GUARANTOR UNDER THE SAME CONTRACT.—No guaran-
teed party can be a direct guarantor under the cross-guar-
antee or stop-loss contract under which such party is a
guaranteed party.
(d) DIRECT GUARANTORS PROHIBITED FROM OB-
TAINING COLLATERAL FOR CROSS-GUARANTEE OBLIGA-
TIONS.—No direct guarantor under any cross-guarantee
or stop-loss contract may obtain or retain a security inter-
est in a guaranteed party under the contract, or in any
assets of the guaranteed party, in connection with such
guarantor’s cross-guarantee obligations under the con-
tract, unless the guaranteed party is a guaranteed banking
office.
(e) PROVISIONS OF CONTRACT REGARDING DIVISION
OF LIABILITY.—
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(1) SEVERAL LIABILITY.—No direct guarantor
under any cross-guarantee or stop-loss contract shall
be liable for the cross-guarantee obligations of any
other direct guarantor under the contract.
(2) DIVISION
OF
LIABILITY.—Subject to the
risk diversification requirements of section 116(d),
the terms of a cross-guarantee or stop-loss contract
shall establish the division of liability among the di-
rect guarantors under the contract.
(3) LIABILITY OF DIRECT GUARANTOR PROPOR-
TIONATE TO INTEREST IN SYNDICATE.—The rights,
privileges, duties, and obligations of a direct guaran-
tor under a cross-guarantee or stop-loss contract
shall be proportionate to such guarantor’s interest in
the syndicate.
(4) SYNDICATES NOT PARTNERSHIPS OR JOINT
VENTURES.—Notwithstanding any state law, a
cross-guarantee or stop-loss syndicate is not a part-
nership or joint venture, except for purposes of sec-
tion 117(c)(1).
(f) PREMIUM REQUIREMENTS.—
(1) IN
GENERAL.—Each cross-guarantee and
stop-loss contract shall describe the method for cal-
culating and the timing of payment for any premium
payable to the direct guarantors under the contract.
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(2) RESTRICTION ON REPRICING OF RISK DUE
TO STOP-LOSS OBLIGATION.—No method of calculat-
ing the premium payable under paragraph (1) shall,
directly or indirectly, take into account losses that a
guaranteed party accrues while guaranteed under
the contract in such party’s capacity as a direct
guarantor under another cross-guarantee or stop-
loss contract.
(g) MAXIMUM EFFECTIVE PERIOD OF CONTRACT.—
(1) LENGTH OF CONTRACT.—A cross-guarantee
or stop-loss contract may not have an effective pe-
riod of more than 5 years.
(2) AMENDMENTS.—The parties to any cross-
guarantee or stop-loss contract may agree to extend
the length of the contract as long as the contract as
amended still expires within 5 years after the origi-
nal effective date of the contract.
(3) RENEWAL
OF
CONTRACT
MUST
BE
AP-
PROVED BY THE CORPORATION.—No cross-guaran-
tee or stop-loss contract may be renewed by the par-
ties to the contract, and no successor contract may
become effective, without the approval of the Cor-
poration under section 123.
(4) PENALTIES
FOR
CONTINUING
CONTRACT
AFTER EXPIRATION DATE.—For every day after the
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30th day following the expiration of a cross-guaran-
tee contract in which—
(A) the direct guarantors have not as-
sumed control under section 118(a) of all the
guaranteed companies guaranteed under the
contract;
(B) a guaranteed party under such con-
tract has not become a guaranteed party under
another cross-guarantee contract;
(C) a successor contract is not being con-
sidered for approval under section 123 or the
Corporation has already rejected two successor
contracts;
(D) the guaranteed party is not appealing
the rejection by the Corporation, under section
123, of a successor contract or final judgment
has been reached on such an appeal; or
(E) the guaranteed party is not a debtor
under any proceeding under title 11 of the
United States Code,
the Corporation may at its discretion penalize each
direct guarantor under such contract up to
$100,000.
(h) CANCELLATION
OF
CONTRACTS
BY
SYN-
DICATES.—
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(1) RIGHT TO CANCEL.
(A) DEFAULT
RULE.—Unless otherwise
agreed in a cross-guarantee or stop-loss con-
tract, a cross-guarantee or stop-loss syndicate
may cancel such contract at any time without
cause provided that the syndicate agent under
such contract provides written notice of such
cancellation to the Corporation and the guaran-
teed party or parties under the contract at least
90 days prior to the effective date of cancella-
tion.
(B) 
MINIMUM
NOTICE
PERIOD
RE-
QUIRED.—The parties to a cross-guarantee or
stop-loss contract may agree to cancellation
rules different than those provided under sub-
paragraph (A), provided that the contract still
requires the syndicate agent under the contract
to give written notice of cancellation to the Cor-
poration and to the guaranteed party or parties
under the contract at least 90 days prior to the
effective date of the cancellation.
(2) CANCELLATION OF ONE GUARANTEED FI-
NANCIAL
GROUP
UNDER
A
GROUP
CONTRACT.—A
cross-guarantee syndicate may cancel a cross-guar-
antee contract with 1 guaranteed financial group
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under a group cross-guarantee syndicate contract
without affecting the rights, privileges, duties, and
obligations arising out of the syndicate contract with
regard to the other guaranteed financial groups
under the syndicate contract.
(3) LIMITATIONS ON GUARANTEED PARTY.—A
guaranteed party under any cross-guarantee or stop-
loss contract may not become a direct guarantor
under any other cross-guarantee or stop-loss con-
tract during any of the following periods:
(A) The period beginning on the date such
party receives a notice of cancellation under
paragraph (1) or (2) with respect to such con-
tract and ending on the date the party becomes
a guaranteed party under a successor contract.
(B) The period beginning on the date the
contract expires and ending on the date the
party becomes a guaranteed party under a suc-
cessor contract.
(4) CONTINUED
EFFECTIVENESS
OF
CON-
TRACTS UNTIL OTHER COVERAGE IS OBTAINED.—
(A) IN GENERAL.—The obligations of any
party to a cross-guarantee or stop-loss contract
shall remain in effect after the effective date of
the cancellation of the contract by the direct
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guarantors or after the expiration of such con-
tract, as the case may be, until—
(i) the guaranteed party becomes a
guaranteed party under another cross-
guarantee or stop-loss contract; or
(ii) in the case of a guaranteed party
which ceases to exist as a legal entity, the
guaranteed obligations of the institution
are liquidated or become guaranteed obli-
gations covered under another cross-guar-
antee or stop-loss contract.
(B) CANCELLATION
WHEN
NONDEPOS-
ITORY GUARANTOR IS NOT A DIRECT GUARAN-
TOR.—Notwithstanding subparagraph (A), a
cancellation of a stop-loss contract by a stop-
loss syndicate shall take effect immediately if
the nondepository guarantor which is the party
guaranteed under the contract—
(i) is not at the time of cancellation of
direct guarantor under any cross-guarantee
or stop-loss contract; and
(ii) has transferred any remaining
risk under any cross-guarantee or stop-loss
contract under which such guarantor was
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formerly a direct guarantor to another di-
rect guarantor.
(i) CANCELLATION OF CONTRACTS BY GUARANTEED
PARTY.—
(1) IN
GENERAL.—The guaranteed financial
group or nondepository guarantor which is the party
guaranteed under a cross-guarantee or stop-loss con-
tract may notify the direct guarantors under the
contract at any time of such party’s intention to
cancel the contract.
(2) CANCELLATION
NOT
EFFECTIVE
UNTIL
SUBSTITUTE
COVERAGE
IS
OBTAINED.—The can-
cellation of any cross-guarantee or stop-loss contract
under paragraph (1) shall not take effect until the
cancelling party becomes a guaranteed financial
group or a nondepository guarantor under another
cross-guarantee or stop-loss contract.
(3) ALLOWING
NONDEPOSITORY
GUARANTORS
TO
EXIT
THE
BUSINESS.—Notwithstanding para-
graph (2), a cancellation of a stop-loss contract by
a nondepository guarantor shall take effect imme-
diately if the nondepository guarantor—
(A) is not at the time of cancellation a di-
rect guarantor under any cross-guarantee or
stop-loss contract; and
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(B) has transferred any remaining risk
under any cross-guarantee or stop-loss contract
under which such guarantor was formerly a di-
rect guarantor to another direct guarantor.
(4) CANCELLATION FEE.—The cross-guarantee
or stop-loss syndicate under a cross-guarantee or
stop-loss contract which is cancelled pursuant to
paragraph (1) may impose a cancellation fee in an
amount determined in accordance with the terms of
the contract.
(j) CONTINUED EFFECTIVENESS
OF CONTRACTS
AFTER CONVERSION OF CHARTER OF DEPOSITORY INSTI-
TUTION.—If—
(1) any State depository institution becomes a
Federal depository institution;
(2) any Federal depository institution becomes
a State depository institution;
(3) any bank becomes a savings association;
(4) or any savings association becomes a bank,
through a conversion of the charter of the depository insti-
tution, any cross-guarantee contract under which the insti-
tution is a guaranteed depository institution and which is
in effect immediately before such conversion shall remain
in effect after the conversion.
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(k) CONTINUING APPLICABILITY OF OBLIGATIONS
UNDER THE CONTRACTS.—
(1) NO
VOIDING
OR
RESCINDING
OF
CON-
TRACTS.—No party to a cross-guarantee or stop-loss
contract may void or rescind the contract, regardless
of any defense to the existence or enforceability of
the contract that might exist under Federal or State
law.
(2) NO EXCUSES TO PERFORMANCE.—Notwith-
standing any provision of Federal or State law, no
excuse for the failure to perform any obligation
under a cross-guarantee or stop-loss contract shall
be effective.
(3) NONCOMPLIANCE DOES NOT AFFECT OBLI-
GATIONS.—A party to a cross-guarantee or stop-loss
contract shall remain obliged under the contract re-
gardless of whether—
(A) the contract ceases to comply with any
requirement under this title; or
(B) one or more parties to the contract fail
to comply with this title.
(l) SUBMISSION OF DISPUTES TO ARBITRATION.—
The terms of any cross-guarantee or stop-loss contract
may provide for resolving disputes under the contract
through binding arbitration.
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(m) SUBSTITUTION OF DIRECT GUARANTORS.—
(1) IN
GENERAL.—Any direct guarantor’s
rights, privileges, duties and obligations under a
cross-guarantee or stop-loss contract, and any por-
tion of any such rights, privileges, duties, and obli-
gations, may be transferred to a successor direct
guarantor, subject to the approval of the Corpora-
tion (pursuant to section 123 of this title).
(2) TRANSFEROR
NO
LONGER
OBLIGED
ON
CONTRACT.—Notwithstanding any Federal or State
law, a transferor of an interest under paragraph (1)
shall not be obliged to performed on the contract
should the transferee fail to perform.
(3) PARTIES AUTHORIZED TO RESTRICT SUB-
STITUTION
OF
GUARANTORS
IN
A
CONTRACT.—A
guaranteed party or a cross-guarantee or stop-loss
syndicate under a cross-guarantee or stop-loss con-
tract may provide in such contract that any transfer
under paragraph (1) of any interest of any direct
guarantor in such contract shall be subject to the
approval of such party or syndicate.
(n) SYNDICATE VOTING RULES.—
(1) PROPORTIONAL VOTING.—Each cross-guar-
antee and stop-loss contract shall provide that a di-
rect guarantor’s voting rights in the cross-guarantee
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or stop-loss syndicate shall be proportional to such
guarantor’s interest in the syndicate.
(2) VARIATIONS
PERMITTED
IN
VOTING
RE-
QUIREMENTS.—A cross-guarantee or stop-loss con-
tract may provide that the number of votes needed
to approve an action by a cross-guarantee or stop-
loss syndicate under the contract may differ depend-
ing upon the action on which a vote is taken.
(o) GUARANTEED COMPANY CAN BE COVERED ONLY
UNDER 1 CONTRACT.—No guaranteed company under
any cross-guarantee or stop-loss contract may be a guar-
anteed company under another cross-guarantee or stop-
loss contract.
(p) AUTHORITY OF THE CGRC TO DIRECT ASSIGN-
MENT.—If any merger, acquisition, or other combination
of 2 direct guarantors within any cross-guarantee or stop-
loss syndicate occurs which causes the contract to materi-
ally exceed the limitations set forth in section 114(b)(1)
or paragraph (1) or (2) of section 115(b), the Corporation
may issue an order directing the merged guarantor to ob-
tain a successor for that part of the guarantor’s interest
that exceeds the statutory limit.
(q) MERGER OF 2 OR MORE GUARANTEED COMPA-
NIES.—After any merger, acquisition, or other combina-
tion of 2 or more guaranteed companies, the successor
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party’s cross-guarantee or stop-loss contract shall meet
the same requirements under section 114(b)(1) or para-
graph (1) or (2) of section 115(b), that the successor
would have to meet if the successor sought to become a
guaranteed party under a new cross-guarantee or stop-loss
contract.
(r) MODIFICATION OF CONTRACTS.—An agreement
amending a cross-guarantee or stop-loss contract needs no
consideration to be binding.
(s) RULE OF CONSTRUCTION RELATING TO CON-
TRACT TERMS.—No provision of this title shall be con-
strued as prohibiting any cross-guarantee or stop-loss con-
tract from containing any term or condition other than
terms or conditions which are expressly prohibited by this
title.
SEC. 114. REQUIREMENTS APPLICABLE ONLY TO CROSS-
GUARANTEE CONTRACTS
(a) OBLIGATIONS GUARANTEED UNDER A CROSS-
GUARANTEE CONTRACT.—
(1) OBLIGATIONS REQUIRED TO BE GUARAN-
TEED
OBLIGATIONS.—The following obligations of
any guaranteed company or guaranteed banking of-
fice shall be guaranteed obligations under a cross-
guarantee contract:
(A) DEPOSITS.—
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(i) BANKS
AND
SAVINGS
ASSOCIA-
TIONS.—In the case of a guaranteed de-
pository institution, all deposits (as deter-
mined without regard to subparagraph (A)
or (B) of section 3(l)(5) of the Federal De-
posit Insurance Act), including insured de-
posits, payable at any office of the guaran-
teed company located within or without the
United States.
(ii) BRANCHES OF FOREIGN DEPOSI-
TORY
INSTITUTIONS.—In the case of a
guaranteed banking office, all deposits of
such office payable at a location within the
United States.
(B) LOANS AND ADVANCES FROM A DI-
RECT GUARANTOR, FEDERAL RESERVE BANK,
OR FEDERAL HOME LOAN BANK.—All loans and
advances from a direct guarantor, a Federal
Reserve bank, or a Federal home loan bank.
(C) 
INTEREST-BEARING
OBLIGATIONS
OTHER THAN SUBORDINATED DEBT.—All other
interest-bearing obligations other than subordi-
nated debt.
(D) BALANCES
DUE
CLEARINGHOUSES,
THE FEDERAL RESERVE, AND IN SETTLEMENT
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OF
OTHER
TRANSACTIONS.—All obligations
owed to clearinghouses, to the Federal Reserve
for funds transfers, to other funds transfer sys-
tems, and to any other person in settlement of
financial transactions.
(E) CROSS-GUARANTEE
OBLIGATIONS.—
Cross-guarantee obligations for which the guar-
anteed company is liable as a direct guarantor
under any other cross-guarantee or stop-loss
contract.
(F) OBLIGATIONS INCURRED FOR FEE IN-
COME.—All other direct and contingent liabil-
ities under any contract or commitment for
which the guaranteed company or guaranteed
banking office has or may receive any fee or
other comparable consideration, including for
any letter of credit or bankers’ acceptance, and
any securities contract, commodity contract,
forward contract, repurchase agreement, or
swap agreement (as such terms are defined in
section 11(e)(8)(D) of the Federal Deposit In-
surance Act).
(G) ASSESSMENTS ON DEPOSITORY INSTI-
TUTIONS FOR COSTS OF CLOSED LOOPS.—All li-
abilities assessed under section 125(c)(2).
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(H) LIABILITY UNDER RECOURSE AGREE-
MENTS.—Any liability under recourse agree-
ments that arises when a guaranteed company
or guaranteed banking office sells loans or
other assets.
(2) OBLIGATIONS WHICH MAY NOT BE GUARAN-
TEED.—The following obligations of any guaranteed
company or guaranteed banking office may not be
guaranteed obligations under a cross-guarantee con-
tract:
(A) SUBORDINATED DEBT.—
(i) IN GENERAL.—Subordinated debt
issued by the guaranteed company or guar-
anteed banking office.
(ii) INCLUDES DEBT WHICH MAY BE
REDEEMED
BY
THE
DEBTHOLDER
BY
CHECK OR OTHER MEANS.—For purposes
of this subparagraph, the term ‘‘subordi-
nated debt’’ includes subordinated debt
which may be withdrawn by or credited to
the debtholder by a check, wire transfer, or
other order of the debtholder.
(B) EQUITY INTERESTS.—Any equity in-
terest in the guaranteed company or guaranteed
banking office.
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(3) OBLIGATIONS
WHICH
MAY
BE
INCLUDED
UNDER A CROSS-GUARANTEE CONTRACT.—
(A) IN GENERAL.—Any obligation of any
guaranteed company or guaranteed banking of-
fice which is not required to be, or not prohib-
ited from being, a guaranteed obligation under
paragraphs (1) and (2) may be a guaranteed
obligation under a cross-guarantee contract to
the extent provided by the terms of the con-
tract.
(B) RULES UPON SWITCH TO A SUCCESSOR
CONTRACT.—Any obligation that was a guaran-
teed obligation under the previous cross-guaran-
tee contract shall be a guaranteed obligation
under the successor contract, if such obligation
accrues prior to the obligee receiving written
notice from the syndicate agent under the suc-
cessor contract that obligations of the same
type as were guaranteed under the previous
contract shall not be guaranteed under the suc-
cessor contract.
(4) JUDGMENTS AND SETTLEMENTS.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), a cross-guarantee contract may pro-
vide that any judgment against a guaranteed
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company under the contract, or any obligation
of the company under a settlement agreement,
in any action against the company in the com-
pany’s capacity as trustee or custodian with re-
spect to any person, shall be treated as a guar-
anteed obligation of such company to the extent
that the company’s duty to act as trustee or
custodian with respect to such person, or to a
designated 3d-party beneficiary, was expressly
established by written agreement of the parties
or by operation of law.
(B) RULE OF CONSTRUCTION.—Subpara-
graph (A) shall not be construed to provide that
the amount of any judgment or settlement from
any action arising from any alleged tortious
conduct, breach of contract, or violation of stat-
utory obligation (other than the agreement es-
tablishing the duty of the institution to act as
trustee or custodian) is a guaranteed obligation
unless the cross-guarantee contract expressly so
provides.
(5) VICARIOUS LIABILITY.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), a direct guarantor or syndicate
agent under any cross-guarantee contract shall
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not be vicariously liable for any alleged tortious
conduct, breach of contract, or violation of stat-
utory obligation by any guaranteed party under
the contract.
(B) EXCEPTION FOR FRAUD RELATED TO
SUBORDINATED DEBT.—Not withstanding sub-
paragraph (A), the liability of any guaranteed
party under a cross-guarantee contract for
damages due to the fraudulent actions of such
party related to marketing subordinated debt
shall be a guaranteed obligation under the con-
tract.
(b) RISK DIVERSIFICATION.—
(1) MINIMUM NUMBER OF DIRECT AND SEC-
OND-TIER GUARANTORS.—Each cross-guarantee con-
tract shall comply with the requirements relating to
the maximum percentage of all guaranteed obliga-
tions under the contract which may be guaranteed
by any 1 direct guarantor and the minimum number
of second-tier guarantors which the guaranteed
party or parties shall have in the aggregate, as de-
termined under the following table (as adjusted pur-
suant to paragraph (2)) on the basis of the total as-
sets of all the guaranteed parties under the contract:
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Aggregate amount of assets of all guar-
anteed parties under the contract
Maximum per-
centage of cross-
guarantee liabil-
ity assumable by
any 1 direct
guarantor
Minimum num-
ber of second-tier
guarantors
$100,000,000 or less ..............................
5.0
100
Greater than $100,000,000 but less
than or equal to $500,000,000 ..........
4.0
125
Greater than $500,000,000 but less
than or equal to $1,000,000,000 .......
2.5
150
Greater than $1,000,000,000 but less
than or equal to $10,000,000,000 .....
1.5
200
More than $10,000,000,000 ..................
1.0
250
(2) ADJUSTMENT
OF
DOLLAR
AMOUNTS
FOR
INFLATION.—The amounts contained in the table in
paragraph (1) relating to the aggregate assets of
guaranteed parties under any cross-guarantee con-
tract shall be adjusted annually by the Corporation
on the basis of changes in the deflator for the gross
domestic product.
(c) BASIS FOR VALUING ASSETS AND LIABILITIES.—
Each cross-guarantee contract shall describe the manner
in which the equity capital of the guaranteed financial
group shall be calculated for purposes of the contract.
(d) EMERGENCY LIQUIDITY.—Notwithstanding sec-
tion 113(e)(3), the parties to a cross-guarantee contract
may include terms relating to the provision of emergency
liquidity to a guaranteed party by any direct guarantor
without regard to the relative interest in the contract held
by any guarantor providing the liquidity.
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(e) INTERNAL GUARANTEES.—A guaranteed com-
pany under any cross-guarantee contract shall be jointly
and severally liable to the direct guarantors under such
contract for any loss incurred by the guarantors in connec-
tion with the cross-guarantee obligations of the guarantors
to any other guaranteed company under such contract.
SEC. 115. REQUIREMENTS APPLICABLE ONLY TO STOP-
LOSS CONTRACTS.
(a) GUARANTEED OBLIGATIONS UNDER
A STOP-
LOSS CONTRACT.—
(1) OBLIGATIONS REQUIRED TO BE GUARAN-
TEED
OBLIGATIONS.—A nondepository guarantor’s
cross-guarantee obligations shall be guaranteed obli-
gations under a stop-loss contract.
(2) NO OTHER GUARANTEED OBLIGATIONS.—
Except for the obligations described in paragraph
(1), no obligation of a nondepository guarantor may
be a guaranteed obligation.
(b) RISK DIVERSIFICATION.—
(1) MINIMUM NUMBERS OF DIRECT GUARAN-
TORS.—A direct guarantor under a stop-loss con-
tract may not guarantee more than 2 percent of the
guaranteed obligations under such contract.
(2) SECOND-TIER
GUARANTORS.—The direct
guarantors under any stop-loss contract shall have,
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in the aggregate, no fewer than 150 direct guaran-
tors.
SEC. 116. ELIGIBILITY AND REQUIREMENTS FOR DIRECT
GUARANTORS.
(a) ELIGIBILITY.—
(1) IN GENERAL.—No person may become a di-
rect guarantor unless such person is a guaranteed
company or a nondepository guarantor.
(2) NONDEPOSITORY GUARANTOR.—
(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C) of this paragraph and sub-
section (c) of this section, any person may be
a nondepository guarantor.
(B) NONELIGIBILITY OF DEPOSITORY IN-
STITUTIONS.—
(i) IN GENERAL.—No depository insti-
tution, or subsidiary of a depository insti-
tution, may be a nondepository guarantor.
(ii) RULE
OF
CONSTRUCTION
FOR
FOREIGN BANKS.—Clause (i) shall not be
construed as prohibiting a foreign bank
which has a branch in the United States
from being a nondepository guarantor.
(iii) FOREIGN
BANK
DEFINED.—For
purposes of clause (ii), the term ‘‘foreign
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bank’’ shall exclude any company orga-
nized under the laws of a territory of the
United States, Puerto Rico, Guam, Amer-
ican Samoa, or the Virgin Islands.
(C) NONELIGIBILITY OF GOVERNMENTS.—
(i) IN GENERAL.—No entity with di-
rect or indirect taxing authority may be a
nondepository guarantor.
(ii) RULE
OF
CONSTRUCTION
FOR
GOVERNMENT
PENSION
FUNDS.—Clause
(i) shall not be construed as to prohibit
any pension fund operated for the benefit
of government employees from being a
nondepository guarantor.
(3) GUARANTEED
DEPOSITORY
INSTITUTIONS
AUTHORIZED
TO
BE
DIRECT
GUARANTORS.—Not-
withstanding any other Federal or State law restrict-
ing the powers of depository institutions, a guaran-
teed depository institution may be a direct guarantor
under any cross-guarantee or stop-loss contract.
(b) DESIGNATED DIRECT GUARANTOR.—
(1) ONLY ONE GUARANTEED COMPANY WITHIN
A GUARANTEED FINANCIAL GROUP MAY BE A DI-
RECT GUARANTOR.—No guaranteed company shall
be a direct guarantor if another guaranteed com-
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pany under the same cross-guarantee contract al-
ready is a direct guarantor under any cross-guaran-
tee or stop-loss contract.
(2) DESIGNATION OF DIRECT GUARANTOR IN
CROSS-GUARANTEE
CONTRACT.—In the case of a
cross-guarantee contract in which 2 or more compa-
nies are guaranteed under the contract, the contract
shall designate which guaranteed company may, in
accordance with paragraph (1), be a direct guaran-
tor.
(c) FINANCIAL RESOURCES REQUIREMENTS
FOR
NONDEPOSITORY GUARANTORS.—
(1) NET WORTH.—No person may become a
nondepository guarantor unless such person has a
net worth of not less than $100,000,000 at the time
such person would, but for this paragraph, become
a direct guarantor under a cross-guarantee or stop-
loss contract.
(2) LIQUIDITY
RESOURCES.— Each nondepos-
itory guarantor shall maintain unencumbered liquid
assets in an amount equal to or greater than the
amount which is equal to 5 times the projected an-
nual premium from all cross-guarantee and stop-loss
contracts under which the nondepository guarantor
is a direct guarantor.
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(3) ASSET REQUIREMENTS.—Only assets which
are maintained within the United States and subject
to the jurisdiction of a United States court may be
taken into account for purposes of meeting the re-
quirements of paragraphs (1) and (2).
(d) RISK DIVERSIFICATION REQUIREMENTS FOR DI-
RECT GUARANTORS.—
(1) PROJECTED
ANNUAL
PREMIUM
CAPACITY
AND PROJECTED ANNUAL PREMIUM LIMIT.—A per-
son may not become a direct guarantor under a
cross-guarantee or stop-loss contract if, upon the
contract (but for this paragraph) taking effect—
(A) the sum of the estimated annual pre-
mium which the person would receive as a di-
rect guarantor under the contract and the per-
son’s projected annual premium income would
exceed such person’s projected annual premium
capacity as of—
(i) in the case of a contract which
would take effect on or before the 15th day
of any calendar month, the 2d calendar
month preceding such calendar month; or
(ii) in the case of a contract which
would take effect after the 15th day of any
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calendar month, the end of the calendar
month preceding such calendar month; or
(B) the estimated annual premium which
the person would receive as a direct guarantor
under the contract would exceed such person’s
projected annual premium limit as of—
(i) in the case of a contract which
would take effect on or before the 15th day
of any calendar month, the 2d calendar
month preceding such calendar month; or
(ii) in the case of a contract which
would take effect after the 15th day of any
calendar month, the end of the calendar
month preceding such calendar month.
(2) CALCULATION OF PROJECTED ANNUAL PRE-
MIUM.—
(A) IN
GENERAL.—The syndicate agent
under any cross-guarantee or stop-loss contract
shall determine the projected annual premium
due any direct guarantor for any calendar
month by calculating the amount of such guar-
antor’s share of the premium accrued by the
guaranteed party or parties under the contract
during such month and then annualizing such
amount.
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(B) FIRST
TWO
MONTHS.—During the
first 2 calendar months in which any cross-
guarantee or stop-loss contract is in effect, the
syndicate agent shall determine the projected
annual premium under the contract for each of
these 2 calendar months by annualizing the pre-
mium rate in effect on the date the contract be-
comes effective.
(3) CALCULATION OF THE ESTIMATED ANNUAL
PREMIUM FOR THE APPROVED CONTRACT.—
(A) IN GENERAL.—For purposes of para-
graph (1), the term ‘‘estimated annual pre-
mium’’ means the annualized premium rate
likely to be in effect on the date the contract
becomes effective.
(B) SYNDICATE
AGENT
ESTIMATE.—The
proposed syndicate agent for the contract shall
make an estimate of the amount in paragraph
(1) within five days prior to the date on which
the contract is to become effective.
(4) CALCULATION OF PROJECTED ANNUAL PRE-
MIUM INCOME.—For purposes of making any deter-
mination under paragraph (1)(A) with respect to a
direct guarantor, the term ‘‘projected annual pre-
mium income’’ means the total projected annual pre-
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miums from all cross-guarantee or stop-loss con-
tracts under which such guarantor is a direct guar-
antor, other than the contract for which such deter-
mination is being made, as of—
(A) in the case of contract which would be-
come effective on or before the 15th day of any
calendar month, the 2d calendar month preced-
ing such calendar month; and
(B) in the case of a contract which would
become effective after the 15th day of any cal-
endar month, the calendar month preceding
such calendar month.
(e) LIABILITY OF ACQUIRER OF ANY DIRECT GUAR-
ANTOR.—Any person who acquires (as defined in section
13(f)(8)(B) of the Federal Deposit Insurance Act) any di-
rect guarantor shall be obligated for all of the cross-guar-
antee obligations of such guarantor under any cross-guar-
antee or stop-loss contract to which such guarantor is a
direct guarantor.
SEC. 117. PROVISIONS RELATING TO CROSS-GUARANTEE
AND STOP-LOSS SYNDICATES.
(a) POWERS AND DUTIES OF SYNDICATE AGENTS.—
(1) SYNDICATE AGENT IS AGENT OF DIRECT
GUARANTORS.—
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(A) IN
GENERAL.—The syndicate agent
under any cross-guarantee or stop-loss contract
shall act as an agent of the direct guarantors
under such contract.
(B) EXCEPTIONS.—Notwithstanding sub-
paragraph (A), the syndicate agent also shall
have—
(i) a duty to protect the confidential-
ity of any aspect of a guaranteed party’s
affairs which the contract specifies shall be
protected; and
(ii) duties to the Corporation as speci-
fied in this title.
(2) POWERS OF SYNDICATE AGENT.—No per-
son under a cross-guarantee or stop-loss contract
other than the syndicate agent shall have the follow-
ing powers:
(A) MONITOR
PERFORMANCE.—Monitor
the performance, or contract with a third party
to monitor the performance, of any party guar-
anteed under such contract.
(B) COLLECT PREMIUMS.—Collect the pre-
miums due to the direct guarantors under such
contract.
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(3) SYNDICATE AGENT REPORTS SUBMITTED TO
THE CENTRAL ELECTRONIC REPOSITORY.—The syn-
dicate agent under any cross-guarantee or stop-loss
contract shall submit in electronic form to the
central electronic repository by the 15th of each cal-
endar month a report—
(A) of the equity capital or the net worth,
as the case may be, of the guaranteed financial
group or nondepository guarantor under the
contract as of the end of the prior calendar
month;
(B) of the projected annual premium due
each direct guarantor, as of the end of the prior
calendar month; and
(C) in the case of a stop-loss contract, of
the 
unencumbered 
liquid 
assets 
of 
the
nondepository guarantor as of the end of the
prior calendar month.
(4) CONFIRMATION
OF
GUARANTEE
OF
SPE-
CIFIC OBLIGATIONS.—
(A) IN
GENERAL.—The syndicate agent
under any cross-guarantee contract shall—
(i) determine, at the request of any
current or prospective creditor of a guar-
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anteed company or guaranteed banking of-
fice under such contract, whether—
(I) the company or office has or
will have an obligation to the creditor;
and
(II) such obligation is or would
be a guaranteed obligation under the
contract; and
(ii) promptly notify the current or
prospective creditor in writing of the
agent’s determination.
(B) DETERMINATION
BINDING
ON
SYN-
DICATE.—Any notification of determination
under subparagraph (A) with respect to any
guaranteed company or guaranteed banking of-
fice shall be binding on the cross-guarantee syn-
dicate which is a party to such contract.
(C) FEE.—A syndicate agent may charge
a creditor a fee for making the determination
and notifying the creditor under subparagraph
(A).
(5) SIDE CONTRACTS.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), no direct guarantor or group of di-
rect guarantors under a cross-guarantee or
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stop-loss contract may enter into any other con-
tract or binding agreement pertaining to the
contract with the syndicate agent under such
cross-guarantee or stop-loss contract.
(B) EXCEPTION
FOR
CERTAIN
LIMITED
CONTRACTS.—Notwithstanding 
subparagraph
(A), a syndicate agent and the direct guaran-
tors under a cross-guarantee or stop-loss con-
tract may enter into another contract or bind-
ing agreement if—
(i) the terms of such contract or
agreement relate solely to rights and obli-
gations of such parties to each other under
the cross-guarantee or stop-loss contract,
including the compensation of the agent, to
the extent such terms are not inconsistent
with the cross-guarantee or stop-loss con-
tract; and
(ii) the contract or agreement does
not affect any right or obligation of—
(I) any guaranteed party under
the cross-guarantee or stop-loss con-
tract; or
(II) any creditor or shareholder
of any such guaranteed company.
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(b) SYNDICATION OF CROSS-GUARANTEE AND STOP-
LOSS RISKS.—Notwithstanding any provision of Federal
or State law, interests in any cross-guarantee or stop-loss
syndicate are not securities for any purpose and any per-
son or group of persons may organize and market the risk
of loss represented by the participation of any person as
a direct guarantor under any cross-guarantee or stop-loss
contract.
(c) TAXATION OF SYNDICATES.—
(1) TREATED
AS
PARTNERSHIP.—Any cross-
guarantee or stop-loss syndicate shall be treated as
a partnership for purposes of the Internal Revenue
Code of 1986.
(2) CONSOLIDATED
RETURNS
BY
SYNDICATE
AGENT.—A syndicate agent may file an annual in-
formation return with respect to all syndicates for
which such agent is an agent, and all distributions
with respect to such syndicates, on a consolidated
basis.
(3) 
TAX-EXEMPT
STATUS.—Any 
syndicate
under any cross-guarantee or stop-loss contract, any
income or gross receipts (including premiums), and
any activity of the syndicate shall be exempt from all
taxation imposed by any State, county, municipality,
or local taxing authority.
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(d) AUDITS OF SYNDICATE AGENTS.—Unless other-
wise agreed, the direct guarantors under any cross-guar-
antee or stop-loss contract shall have the right to retain
a third party to audit the performance of the syndicate
agent under the terms of the contract.
(e) REPLACEMENT OF SYNDICATE AGENTS.—
(1) IN GENERAL.—The cross-guarantee or stop-
loss syndicate under any cross-guarantee or stop-loss
contract may at any time and without cause replace
the syndicate agent under such contract, subject to
the guaranteed financial group or nondepository
guarantor’s approval of the new syndicate agent, by
amending the contract and obtaining the Corpora-
tion’s approval of the new syndicate agent under sec-
tion 123.
(2) NO EFFECT ON CONTRACT.—The replace-
ment of a syndicate agent by the direct guarantors
in accordance with paragraph (1) shall not affect the
continuing existence or enforceability of the contract.
(3) WITHDRAWAL OF SYNDICATE AGENT.—
(A) IMMEDIATE SUBMISSION OF AMENDED
CONTRACT WITH NEW SYNDICATE AGENT.—If a
syndicate agent should resign or otherwise cease
providing required services under a cross-guar-
antee or stop-loss contract, whether wrongfully,
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as allowed under such contract, or for any other
reason, the cross-guarantee or stop-loss syn-
dicate shall immediately submit an amendment
to the contract, with a successor syndicate
agent named in the amendment, to the Cor-
poration for approval.
(B) INTERIM
CGRC
APPOINTMENT.—The
Corporation may appoint a successor syndicate
agent to serve until a cross-guarantee or stop-
loss syndicate has complied with the require-
ments under subparagraph (A).
(f) CAUSE OF ACTION BY THE SYNDICATE AGAINST
THE SYNDICATE AGENT.—
(1) STANDARD
OF
LIABILITY.—Unless other-
wise agreed, a cross-guarantee or stop-loss syndicate
shall have a cause of action against the syndicate
agent for losses accrued by members of the syn-
dicate under a cross-guarantee or stop-loss contract
only if the syndicate consciously disregarded sub-
stantial and unjustifiable risks being taken by the
guaranteed party under the contract.
(2) CAUSE OF ACTION BELONGS TO THE SYN-
DICATE.—An action against a syndicate agent under
paragraph (1) may be brought solely by the syn-
dicate as a whole and no individual member of the
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syndicate shall have a cause of action against the
syndicate agent.
SEC. 118. ASSUMPTION OF CONTROL OF A GUARANTEED
COMPANY 
BY 
A 
CROSS-GUARANTEE 
SYN-
DICATE.
(a) RIGHT OF CROSS-GUARANTEE SYNDICATE TO
ASSUME CONTROL.—A cross-guarantee syndicate under
any cross-guarantee contract shall have the right to as-
sume control of a guaranteed company under the contract
under the following circumstances:
(1) CANCELLATION.—Immediately after a can-
cellation of the contract by the syndicate or the
guaranteed financial group has become effective un-
less a successor cross-guarantee contract has taken
effect.
(2) EXPIRATION.—Immediately after the expi-
ration of the cross-guarantee contract unless a suc-
cessor cross-guarantee contract has taken effect.
(b) RIGHT OF GUARANTEED PARTY TO SEEK TO
STAY ASSUMPTION OF CONTROL.—
(1) IN GENERAL.—A guaranteed company may
file an action requesting a stay of any assumption
of control by a cross-guarantee syndicate.
(2) TIME LIMIT FOR OBJECTING TO ASSUMP-
TION OF CONTROL.—Except in the case in which the
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guaranteed company has obtained a successor cross-
guarantee contract, any action under paragraph (1)
shall be filed either within thirty days after the no-
tice of cancellation under section 113(h)(1) is given
or more than sixty days prior to the expiration of
the contract, whichever the case may be.
(3) EXPEDITED REVIEW.—The United States
district court with jurisdiction over the cross-guaran-
tee contract shall provide expedited review of any ac-
tion under paragraph (1).
(4) BASIS OF DETERMINATION.—In any action
under paragraph (1), the court shall stay the as-
sumption of control by a cross-guarantee syndicate
only if the conditions for assuming control under
subsection (a) have not been met.
(c) RIGHTS OF CROSS-GUARANTEE SYNDICATE TO
ENJOIN VIOLATIONS OF THE CONTRACT UNTIL ASSUM-
ING CONTROL.—
(1) INJUNCTIVE REMEDIES.—Upon giving no-
tice of cancellation of the cross-guarantee contract
under section 113(h)(1) or the expiration of the con-
tract, the cross-guarantee syndicate shall be granted
injunctive relief to enforce any restrictions imposed
under the contract.
(2) APPOINTMENT OF A RECEIVER.—
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(A) IN GENERAL.—Upon giving notice of
cancellation of the cross-guarantee contract
under section 113(h)(1) or the expiration of the
contract, the cross-guarantee syndicate may
seek the appointment of a receiver to serve until
the syndicate can assume control under sub-
section (a) and a court may in its discretion ap-
point such a receiver, but the court may ap-
point a receiver only if the remedies under
paragraph (1) are not adequate to protect the
interests of the cross-guarantee syndicate.
(B) CGRC SHALL SUBMIT LIST OF PRO-
SPECTIVE RECEIVERS.—The court shall appoint
a receiver under subparagraph (A) only from a
list supplied by the Corporation to the court of
five disinterested persons who are qualified and
willing to serve as the receiver in the case.
(3) EXPEDITED
RELIEF.—The United States
district court with jurisdiction over the cross-guaran-
tee contract shall provide the relief under para-
graphs (1) and (2) on an expedited basis.
(d) POWERS AND DUTIES OF A CROSS-GUARANTEE
SYNDICATE AFTER ASSUMPTION OF CONTROL.—
(1) GENERAL POWERS.—
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(A) OPERATE
THE
COMPANY.—A cross-
guarantee syndicate which assumes control of a
guaranteed company under subsection (a) shall
have and may exercise all the powers of the
members or shareholders, the directors, and the
officers of the company and shall be entitled
to—
(i) conduct all business of the guaran-
teed company;
(ii) take over the books, records, and
assets of the guaranteed company;
(iii) collect all obligations and money
due the company;
(iv) perform in the name of the com-
pany all functions of the company consist-
ent with the appointment of the syndicate
as the successor to the managers and di-
rectors of the company and the duties of
the syndicate with respect to the company;
and
(v) preserve and conserve the assets
and property of such company.
(B) 
DISPOSITION
OF
COMPANY.—The
cross-guarantee syndicate which assumes con-
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trol of a guaranteed company under subsection
(a) may—
(i) merge the guaranteed company
with another guaranteed company;
(ii) sell or otherwise dispose of the
company; or
(iii) place the company in liquidation
and proceed to realize upon the assets of
the company.
(2) DUTIES—
(A) DISTRIBUTION
OF
ASSETS.—In any
case in which funds remain from the liquida-
tion, sale, or other disposition of the assets of
any guaranteed company after all depositors,
creditors, other claimants, and administrative
expenses of the syndicate have been paid or oth-
erwise resolved, the syndicate shall promptly
distribute such funds to the company’s share-
holders or members, as the case may be.
(B) FIDUCIARY DUTY.—A cross-guarantee
syndicate which assumes control of a guaran-
teed company in accordance with subsection (a)
shall succeed to the same fiduciary responsibil-
ity as the directors and officers of such com-
pany had under applicable law.
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(C) NOTICE TO CGRC.—If a cross-guaran-
tee syndicate assumes control of a guaranteed
company under subsection (a), the syndicate
shall on the same day notify the Corporation
that it has assumed control.
(e) NO AUTHORITY
FOR CGRC, ANY FEDERAL
BANKING AGENCY, OR STATE BANK SUPERVISOR
TO
STAY ASSUMPTION OF CONTROL.—Neither the Corpora-
tion nor any Federal banking agency, State bank super-
visor, or any other Federal or State agency may take any
action to prevent the assumption of control of a guaran-
teed company under subsection (a).
(f) ASSUMPTION OF CONTROL NOT AN EVENT OF
DEFAULT OR GROUNDS FOR ACCELERATION OF OBLIGA-
TIONS.—The assumption of control of a guaranteed com-
pany under subsection (a) shall not be an event of default
by the guaranteed company or grounds for acceleration
of any guaranteed obligation under any agreement to
which the guaranteed company is a party.
(g) SECOND-TIER GUARANTORS CANNOT DISPUTE
LOSSES.—A direct guarantor of any direct guarantor
which is a member of a cross-guarantee syndicate which
assumes control of a guaranteed party under subsection
(a) may not bring a cause of action against the cross-guar-
antee syndicate based on damages arising out of the syn-
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dicate’s decision to assume control or failure to minimize
losses under the cross-guarantee contract.
SEC. 119. ENFORCEMENT OF CONTRACTS.
(a) JURISDICTION OF FEDERAL COURTS.—
(1) IN
GENERAL.—For purposes of section
1331 of title 28, United States Code, any action
arising under any cross-guarantee or stop-loss con-
tract, or any contract arising under section
117(a)(5)(B), shall be deemed to arise under Fed-
eral law and may be brought in the district court of
the United States designated under paragraph (3).
(2) REMOVAL.—Any action arising under any
cross-guarantee or stop-loss contract, or any con-
tract under section 117(a)(5)(B), which is brought
in a State court may be removed by the defendant
or the defendants to the district court of the United
States designated under paragraph (3).
(3) DESIGNATION OF COURT IN CONTRACT.—
Each cross-guarantee and stop-loss contract shall
designate the district court of the United States
which shall have original jurisdiction over any action
brought in or removed to Federal court under para-
graphs (1) and (2).
(b) RESTRICTIONS ON THIRD PARTY BENEFICIARY
ACTIONS.—Notwithstanding any State law, no creditor of
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any guaranteed party under any cross-guarantee or stop-
loss contract may bring an action against the cross-guar-
antee syndicate under such contract for failure to perform
any cross-guarantee obligation under the contract without
first having obtained a judgment against the guaranteed
party for failure to perform such obligation, unless the di-
rect guarantors have assumed control of the guaranteed
party under section 118(a).
(c) SERVICE OF PROCESS.—For purposes of any ac-
tion under subsection (a)—
(1) the syndicate agent shall be the agent for
all direct guarantors for service of process for ac-
tions brought against the syndicate; and
(2) service of process upon a syndicate agent
shall serve as the exclusive manner of service of
process upon any direct guarantor under the con-
tract.
(d) APPLICABLE STATE LAW.—
(1) STATE
CONTRACT
LAW
AS
INTERSTITIAL
LAW.—Unless otherwise indicated in this title, appli-
cable state law shall apply under this title to any
cross-guarantee or stop-loss contract.
(2) PARTIES’ CHOICE OF STATE LAW.—Each
cross-guarantee and stop-loss contract shall des-
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ignate the state law that shall be applicable under
paragraph (1).
Subtitle C—Powers and Duties of
the CGRC
CHAPTER 1—CROSS-GUARANTEE
PROCESS
SEC. 121. THE CROSS-GUARANTEE REGULATION CORPORA-
TION.
(a) CREATION.—
(1) IN GENERAL.—There is hereby established
a body corporate the ‘‘Cross Guarantee Regulation
Corporation’’ which shall have succession until dis-
solved by act of Congress.
(2) CORPORATION NOT AN AGENCY.—The Cor-
poration shall not be an agency or establishment of
the United States Government.
(3) HEADQUARTERED IN THE DISTRICT OF CO-
LUMBIA.—The Corporation shall maintain its prin-
cipal office in the District of Columbia.
(b) POWERS.—In addition to any powers granted to
the Corporation elsewhere in this title, the Corporation
shall have, consistent with this title, the power—
(1) to sue and be sued, complain and defend, in
its corporate name and through its own counsel, in
any State, Federal, or other court;
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(2) to adopt, alter, and use a corporate seal
which shall be judicially noticed;
(3) to adopt, amend, and repeal, by its Board
of Directors, such bylaws as may be necessary or ap-
propriate to carry out the purposes of this title, in-
cluding bylaws relating to—
(A) the conduct of its business; and
(B) the indemnity of its directors, officers,
and employees for liabilities and expenses actu-
ally and reasonably incurred by any such person
in connection with the defense or settlement of
an action or suit if such person acted in good
faith and in a manner reasonably believed to be
consistent with the purposes of this chapter.
(4) to adopt, amend, and repeal, by its Board
of Directors, such rules as authorized under sub-
section (e)(2) of this section;
(5) to conduct business (including the carrying
on and maintenance of offices) and to exercise all
other rights and powers granted to it by this chapter
in any State or other jurisdiction without regard to
any qualification, licensing, or other statute in such
State or other jurisdiction;
(6) to lease, purchase, accept gifts or donations
of or otherwise acquire, to own, hold, improve, use,
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or otherwise deal in or with, and to sell, convey,
mortgage, pledge, lease, exchange or otherwise dis-
pose of, any property, real, personal or mixed, or
any interest therein, wherever situated;
(7) subject to subsection (c), to hire such offi-
cers, attorneys, employees, and agents as may be re-
quired, to determine their qualifications to define
their duties, to fix their salaries, require bonds for
them and fix the penalty thereof; and
(8) to enter into contracts, to execute instru-
ments, to incur liabilities, and to do any and all
other acts and things as may be necessary or inci-
dental to the conduct of its business and the exercise
of all other rights and powers granted to the Cor-
poration under this title.
(c) BOARD OF DIRECTORS.—
(1) FUNCTIONS.—The Corporation shall have a
Board of Directors which, subject to the provisions
of this title, shall determine the policies which shall
govern the operations of the Corporation.
(2) NUMBER AND APPOINTMENT.—The Board
of Directors shall consist of seven persons as follows:
(A) One director shall be appointed by the
Secretary of the Treasury from among the offi-
cers of the Department of Treasury and shall
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be removable by the Secretary without cause at
any time.
(B) Six directors shall be appointed by the
President, by and with the advice and consent
of the Senate, as follows—
(i) two such directors shall be selected
from among senior officers of companies
that are or are likely to be guaranteed de-
pository institutions, provided that the di-
rectors are not from the same geographical
area and represent different aspects of the
industry;
(ii) one such director shall be selected
from among senior officers of companies
that are or are likely to be nondepository
guarantors;
(iii) one such director shall be selected
from among senior officers of companies
that are or are likely to be syndicate
agents; and
(iv) two such directors shall be se-
lected from the general public from among
persons who are not either regulatory offi-
cials nor associated with a guaranteed de-
pository institution, syndicate agent, or
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nondepository guarantor and have not been
such an official or had any such associa-
tion for the 2 years preceding appoint-
ment.
(3) CHAIRMAN
AND
VICE
CHAIRMAN.—The
President shall designate a Chairman and Vice
Chairman from among those directors appointed
under paragraph (2)(B)(iv) of this subsection.
(4) TERMS.—
(A) FOUR-YEAR TERMS.—Except as pro-
vided under subparagraphs (B) and (C), each
director shall be appointed for a term of 4
years.
(B) TRANSITION RULES.—
(i) STAGGERED TERMS.—Of the direc-
tors first appointed under paragraph
(2)(B)—
(I) one shall hold office for a
term expiring on December 31 of the
first full calendar year after passage
of this Act;
(II) two shall hold office for a
term expiring on December 31 of the
second full calendar year after pas-
sage of this Act;
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(III) one shall hold office for a
term expiring on December 31 of the
third full calendar year after passage
of this Act; and
(IV) two shall hold office for a
term expiring on December 31 of the
fourth full calendar year after passage
of this Act.
(ii) TIMING
OF
PARTICULAR
DIREC-
TOR’S TERM.—
(I) 
INDUSTRY
APPOINTEES’
TERMS
WILL
END
IN
DIFFERENT
YEARS.—One of the directors ap-
pointed under each of the clauses
(i)(I), (II), (III), (IV) shall consist of
the 4 directors appointed under para-
graphs (2)(B)(i), (ii), and (iii).
(II) 
APPOINTEES
FROM
THE
GENERAL PUBLIC.—One director ap-
pointed under both clause (i)(II) and
(IV) shall consist of one of the 2 di-
rectors appointed under paragraph
(2)(B)(iv).
(iii) TREASURY
DIRECTOR
MUST
BE
APPOINTED
SOON
AFTER
ENACTMENT.—
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The Secretary of Treasury shall appoint
the director designated under paragraph
(2)(A) within 30 days after enactment of
this Act.
(C) VACANCIES.—
(i) APPOINTMENT
IN
SAME
MAN-
NER.—A vacancy on the Board of Direc-
tors shall be filled in the same manner as
the original appointment was made.
(ii) APPOINTMENT ONLY FOR THE RE-
MAINDER OF THE TERM.—Any director ap-
pointed under clause (i) shall be appointed
only for the remainder of the term of his
predecessor.
(D) REMAINING A DIRECTOR UNTIL A SUC-
CESSOR IS APPOINTED.—A director may serve
after the expiration of his term until his succes-
sor has taken office.
(5) COMPENSATION.—
(A) CHAIRMAN AND VICE CHAIRMAN.—The
compensation of the Chairman and Vice Chair-
man shall be as provided in the bylaws of the
Corporation.
(B) OTHER
DIRECTORS.—The remaining
five directors shall serve without compensation
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except that they are entitled to receive reim-
bursement for expenses incurred in connection
with official business of the Corporation.
(6) OFFICER AND EMPLOYEES AS MEMBERS OF
THE BOARD OF DIRECTORS.—
(A) IN
GENERAL.—Subject to Subpara-
graph (B), no officer, attorney, employee, or
agent of the Corporation shall be a member of
the Board of Directors.
(B) TRANSITION RULE.—The chief execu-
tive officer of the Corporation may be 1 of the
public members of the Board of Directors until
5 years after the cross-guarantee activation
date.
(7) BOARD OF DIRECTORS TO DETERMINE OF-
FICERS.—The officers of the Corporation shall be
employed at the will of the Board of Directors.
(8) DEFINITION OF OFFICER.—For purposes of
this subsection, the term ‘‘officer’’ includes any chief
executive officer, president, senior executive, or other
official with managerial or executive authority within
the Corporation.
(d) MEETINGS OF THE BOARD OF DIRECTORS.—
(1) TIMING OF MEETINGS.—The Board of Di-
rectors shall meet at the call of its Chairman, or as
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otherwise provided by the bylaws of the Corporation,
except that the director appointed under subsection
(c)(2)(A) may by himself call a meeting until at
least three other directors have taken office.
(2) QUORUM TRANSITION RULE.—The bylaws
shall determine how many members constitute a
quorum when the Board of Directors meet, except
that the director appointed under subsection
(c)(2)(A) shall by himself constitute a quorum until
at least three other directors have taken office.
(e) BYLAWS AND RULEMAKING.—
(1) BYLAWS.—
(A) PROCEDURE.—The Board of Directors
shall file with the Secretary of the Treasury a
copy of the proposed initial bylaws of the Cor-
poration and any proposed bylaw changes ac-
companied by a concise general statement of
the basis and purpose for such changes.
(B) CHANGES BECOME EFFECTIVE UNLESS
THE TREASURY DEPARTMENT OBJECTS.—Any
bylaws submissions under subparagraph (A)
shall become effective 30 days after the filing of
such changes with the Secretary of the Treas-
ury, unless—
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(i) the Secretary of the Treasury, by
notice to the Corporation setting forth the
reasons therefor, disapproves of such pro-
posed bylaw changes as being contrary to
the purposes of this title; or
(ii) the Secretary of the Treasury de-
cides, at its own discretion, that public
comment shall be obtained, in which case
it may, after notifying the Corporation in
writing of such finding, require that the
procedures set forth in paragraph (2) be
followed with respect to such a bylaw
change.
(2) RULEMAKING.—
(A) RULEMAKING AUTHORITY.—The Cor-
poration shall have the power to issue a rule
only if—
(i) the power to issue the rule is ex-
plicitly provided for in this title; or
(ii) the Corporation demonstrates
that—
(I) the rule implements statutory
language in this title; and
(II) improves the efficiency of the
cross-guarantee system.
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(B) SUBSTANTIVE
BASIS
FOR
RULES.—
Any proposed rule or proposed rule change shall
be approved only if there is substantial evidence
supporting the findings on which the proposed
rule is based.
(C) RULEMAKING PROCEDURES.—
(i) IN
GENERAL.—The Corporation
shall use the informal rulemaking proce-
dures under the Administrative Procedures
Act (5 U.S.C. 553) in prescribing rules
under this paragraph.
(ii) RIGHT TO A HEARING.—In addi-
tion to the procedures under clause (i), any
person may during the comment period re-
quest a hearing and such hearing, if re-
quested, shall take place within 30 days
after the end of the comment period.
(iii) SUBMITTING
RULES
TO
TREAS-
URY.—After having completed the proce-
dures under clauses (i) and (ii), the Cor-
poration shall file with the Secretary of the
Treasury a copy of the proposed rules.
(iv) TREASURY
AUTHORITY
TO
RE-
JECT RULES.—Any proposed rules submit-
ted under clause (iii) shall become effective
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30 days after the filing of such changes
with the Secretary of the Treasury, unless
the Secretary of the Treasury, by notice to
the Corporation setting forth the reasons
therefor, disapproves of such proposed rule
changes as being contrary to the purposes
of this title.
(D) JUDICIAL REVIEW.—
(i) STANDING.—Any person suffering
a legal wrong, or adversely affected or ag-
grieved within the meaning of this title, by
the rules issued under this paragraph is
entitled to judicial review thereof.
(ii) 
JURISDICTION.—The 
United
States Court of Appeals for the District of
Columbia shall have exclusive original ju-
risdiction over any action under clause (i).
(E) INITIAL DEADLINE.—For any rule cov-
ered by subparagraph (A)(i), the Corporation
shall issue a final rule within 1 year after pas-
sage of this Act.
(f) FUNDING.—
(1) INITIAL BORROWING.—
(A) BIF AND SAIF FINANCING.—The Cor-
poration shall have the power to borrow
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$20,000,000 from the Bank Insurance Fund
and Savings Association Insurance Fund, in the
manner described under section 144(d).
(B) USE OF SUCH FINANCING.—The Cor-
poration shall use any amount borrowed under
subparagraph (A) to establish the central elec-
tronic repository, pay initial salaries and other
operating expenses, buy equipment, develop
computer software, and otherwise begin oper-
ations.
(C) REPAYMENT.—The Corporation shall
repay any borrowing under subparagraph (A)
within 5 years after the cross-guarantee activa-
tion date from income obtained under para-
graph (2).
(D) INTEREST ON LOAN.—
(i) TIMING OF PAYMENTS.—No prin-
cipal or interest payments on the loan de-
scribed in subparagraph (A) shall be due
prior to 1 year after the cross-guarantee
activation date.
(ii) INTEREST
RATE.—The interest
rate on the borrowing under this para-
graph shall be equal to .25 percent plus
the average annual percentage yield on 3-
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month bills issued by the Secretary of the
Treasury under section 3104(a) of title 31,
United States Code.
(2) FINANCING FROM OPERATIONS.—
(A) SELF-SUPPORTING.—The Corporation
shall repay the loan under paragraph (1) and
pay for its ongoing operating expenses by as-
sessing fees as authorized under subparagraph
(B) and collecting penalties as authorized under
this title and shall not, subject to paragraph
(1), receive any financing or operating subsidies
from the United States Treasury.
(B) FEES.—The Corporation may assess a
reasonable fee upon any party which—
(i) submits a cross-guarantee, stop-
loss, or group cross-guarantee syndicate
contract for approval;
(ii) requests use of any service pro-
vided by the central electronic repository;
or
(iii) requests a certification under sec-
tion 124(b).
(g) MISCELLANEOUS PROVISIONS.—
(1) INSPECTION OF REPORTS.—
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(A) IN GENERAL.—Any notice, report, or
other document filed with the Corporation pur-
suant to this title, other than financial state-
ments filed by nondepository guarantors pursu-
ant to section 117(a)(3)(A), shall be available
for public inspection unless the Corporation or
the Secretary of Treasury determines that dis-
closure thereof is not in the public interest.
(B) CONGRESSIONAL
ACCESS.—Nothing
under subparagraph (A) shall act to deny docu-
ments or information to the Congress of the
United States or to the committees of either
House having jurisdiction over depository insti-
tutions and related matters under the rules of
each body.
(C) TREASURY ACCESS TO THE CORPORA-
TION’S
DOCUMENTS.—The Corporation shall
provide the Secretary of Treasury with any doc-
ument or information which the Secretary in
his or her discretion requests.
(2) LIABILITY OF CORPORATION AND ITS OFFI-
CERS.—Neither the Corporation nor any of its direc-
tors, officers, attorneys, agents, or employees shall
have any liability to any person for any action taken
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or omitted in good faith under or in connection with
any matter contemplated by this title.
(3) EXEMPTION
FROM
TAXATION.—The Cor-
poration, its property, its franchise, capital, reserves,
surplus, and its income, shall be exempt from all
taxation now or hereafter imposed by the United
States or by any State or local taxing authority, ex-
cept that any real property or tangible personal
property (other than cash and securities) of the Cor-
poration shall be subject to State and local taxation
to the same extent according to its value as other
real and tangible personal property is taxed.
(4) FISCAL YEAR.—The fiscal year of the Cor-
poration shall be the calendar year.
SEC. 122. REGULATION OF THE CROSS-GUARANTEE PROC-
ESS.
(a) CROSS-GUARANTEE REGULATION CORPORATION
ENFORCEMENT AUTHORITY.—
(1) IN GENERAL.—Subject to section 126, the
Corporation shall have exclusive authority to enforce
compliance with provisions of this title.
(2) ENFORCEMENT.—The Corporation shall
have the powers provided in subsections (b), (c), (d),
(h), (l), and (n) of section 8 of the Federal Deposit
Insurance Act and paragraph (1) and each subpara-
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graph, other than subparagraphs (B) and (C), of
paragraph (2) of subsection (i) of such section in en-
forcing this title with respect to any syndicate agent
and to any direct guarantor, but only with respect
to any violation of any requirements under this title.
(b) LIMITATION ON STATE JURISDICTION.—
(1) IN GENERAL.—Notwithstanding any provi-
sion of state law, no State may exercise authority
over any party to any cross-guarantee or stop-loss
contract with respect to—
(A) whether such party may be a party to
a cross-guarantee or stop-loss contract; and
(B) the rights, duties, privileges, or obliga-
tions of such party under the contract or pursu-
ant to this title.
(2) RULE OF CONSTRUCTION.—Paragraph (1)
shall not be construed as affecting the authority of
any State to determine the powers and regulate the
activities of State depository institutions.
SEC. 123. APPROVAL PROCESS FOR CROSS-GUARANTEE
AND STOP-LOSS CONTRACTS.
(a) EXPEDITED APPROVAL OF CONTRACTS AND CON-
TRACT AMENDMENTS.—
(1) NOTICE AND REVIEW REQUIREMENT.—Ex-
cept as provided in paragraph (3), no cross-guaran-
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tee, stop-loss, or group cross-guarantee syndicate
contract, and no amendment to any such contract,
may take effect unless—
(A) the Corporation has been given 15
business days to review the contract or amend-
ment; and
(B) before the end of the 15-day period de-
scribed in subparagraph (A), the Corporation
has not issued an order—
(i) 
disapproving 
the 
contract 
or
amendment, or
(ii) extending the period within which
the Corporation may disapprove the con-
tract or amendment in accordance with
paragraph (6).
(2) SUBMISSION OF CONTRACT OR AMENDMENT
IN ELECTRONIC FORM.—The Corporation shall pre-
scribe regulations requiring that any cross-guaran-
tee, stop-loss, or group cross-guarantee syndicate
contract, and any amendment to such contract,
being submitted for review under this subsection
shall be submitted in electronic form to the central
electronic repository.
(3) NOTICE OF APPROVAL BEFORE END OF DIS-
APPROVAL PERIOD.—A cross-guarantee, stop-loss, or
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group cross-guarantee syndicate contract, and any
amendment to any such contract, may take effect
before the expiration of the period described in para-
graph (1)(A) (or extended in accordance with para-
graph (6)) for disapproving such contract if the Cor-
poration notifies the parties that the Corporation
does not intend to disapprove the contract.
(4) SUBMISSION
OF
INFORMATION
AND
CER-
TIFICATIONS.—
(A) IN
GENERAL.—The syndicate agent
under any proposed cross-guarantee, stop-loss,
or group cross-guarantee syndicate contract, or
any amendment to any such contract, submitted
to the Corporation for review under paragraph
(1), shall also submit to the Corporation with
such proposed contract such information and
attestations or certifications as the Corporation
may require by regulation.
(B) LIMITATION ON SCOPE OF INFORMA-
TION
REQUIRED.—The regulations prescribed
by the Corporation under subparagraph (A)
may not require the submission of any informa-
tion other than information directly necessary
for the Corporation to determine whether any
proposed cross-guarantee, stop-loss, or group
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cross-guarantee syndicate contract, or amend-
ment thereto, submitted to the Corporation for
approval is in compliance with the requirements
of this title.
(5) ADDITIONAL INFORMATION.—
(A) IN GENERAL.—The Corporation may,
by specific request in connection with a particu-
lar proposed cross-guarantee, stop-loss, or
group cross-guarantee syndicate contract, or
amendment to any contract, submitted to the
Corporation, require, on 1 occasion only, that
additional information be submitted with re-
spect to such contract or amendment, except
that the Corporation may require only such in-
formation as may be relevant to—
(i) a determination of the extent to
which the proposed contract is in compli-
ance with the requirements of this title;
and
(ii) the Corporation’s evaluation of the
contract in accordance with this section.
(B) WRITTEN NOTICE OF EXPLANATION.—
For any request for additional information
under subparagraph (A), the Corporation shall
provide a detailed explanation of the specific
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reasons why such additional information is
needed.
(6) EXTENSION OF DISAPPROVAL PERIOD.—If,
in connection with a particular proposed cross-guar-
antee, stop-loss, or group cross-guarantee syndicate
contract, or any amendment to any such contract,
which is submitted to the Corporation, the Corpora-
tion requests additional information under para-
graph (5), the Corporation may by order provide
that the Corporation shall have any additional period
(not to exceed 5 business days beginning on the date
on which the Corporation receives such information)
within which to disapprove the proposed contract.
(b) LIMITED GROUNDS FOR DISAPPROVAL OF PRO-
POSED CONTRACT
OR AMENDMENT.—The Corporation
may disapprove any proposed cross-guarantee, stop-loss or
group cross-guarantee syndicate contract, or any amend-
ment to any such contract, if and only if—
(1) the contract, including any party under the
contract, fails to meet the requirements of this title;
or
(2) the information submitted under subsection
(a) was insufficient to determine whether the con-
tract and the parties to the contract are in compli-
ance with this title.
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(c) WRITTEN NOTICE OF DISAPPROVAL.—
(1) IN
GENERAL.—If the Corporation dis-
approves any cross-guarantee, stop-loss, or group
cross-guarantee syndicate contract, or any amend-
ment thereto, the Corporation shall provide imme-
diate written notice to the parties to such contract
of any disapproval at the time of disapproval.
(2) 
STATEMENT
OF
REASON
FOR
DIS-
APPROVAL.—The written notice under paragraph (1)
shall contain a detailed explanation of the specific
reasons for the disapproval under this section.
(d) CONDITIONAL APPROVALS.—
(1) IN GENERAL.—The Corporation shall pre-
scribe regulations which would allow a cross-guaran-
tee, stop-loss, or group cross-guarantee syndicate
contract to be conditionally approved, in a manner
otherwise in accordance with this section, before the
effective date of the contract if, at the time such
conditional approval is granted, all the information
which is required for the Corporation to make a
final determination of whether the contract meets
the requirements of this title cannot be known or
ascertained.
(2) RECONFIRMATION.—The regulations pre-
scribed under paragraph (1) shall allow the Corpora-
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tion, upon receipt of all the information the Cor-
poration needs to determine whether the contract
meets the requirements of this title, 3 business days
to give the contract a final approval.
(3) REPLACEMENT OF GUARANTORS.—The reg-
ulations prescribed under paragraph (1) shall allow,
without restriction, the replacement of a direct guar-
antor with another direct guarantor during the pe-
riod between the date of conditional approval and
final approval.
(e) JUDICIAL REVIEW.—
(1) CONTRACTS DISAPPROVED.—
(A) IN GENERAL.—Any party to a contract
disapproved under this section may seek judicial
review of the disapproval of a contract under
this section.
(B) LIMITATION
ON
STANDING.—Only a
party to a contract disapproved under this sec-
tion may bring an action under this paragraph.
(2) CONTRACTS APPROVED.—
(A) IN
GENERAL.—Subject to subpara-
graph (B), any party to any cross-guarantee,
stop-loss, or group cross-guarantee syndicate
contract may seek judicial review of the ap-
proval of a contract under this section.
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(B) LIMITATION OF REVIEW.—A contract
approved under this section may be reviewed
only with respect to whether the contract vio-
lates section 116(a) or section 125.
(C) REMEDIES.—
(i) IN
GENERAL.—Any court which
under this paragraph holds that a contract
violates section 116(a) or section 125 shall
order the Corporation to use the remedies
available under section 125 to eliminate
the violation.
(ii) INJUNCTIONS
DISALLOWED.—No
court may enjoin the operation of a con-
tract approved under this section.
(3) JURISDICTION.—No court other than a dis-
trict court of the United States shall have original
jurisdiction of any action under this subsection.
SEC. 124. CENTRAL ELECTRONIC REPOSITORY.
(a) ESTABLISHMENT.—
(1) CGRC ESTABLISHES CENTRAL ELECTRONIC
REPOSITORY.—Before the end of the 6-month period
beginning on the date of the enactment of this Act,
the Corporation shall establish and maintain a
central electronic repository for cross-guarantee,
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stop-loss, and group cross-guarantee syndicate con-
tracts.
(2) MAINTENANCE OF ALL PAST AND CURRENT
CONTRACTS.—The central electronic repository shall
maintain files, in electronic form, of all cross-guar-
antee and stop-loss contracts which have not been
disapproved by the Corporation under section 123,
including expired and canceled contracts, all amend-
ments to any such contract which have not been dis-
approved by the Corporation under such section, and
all proposed contracts and contract amendments
which have been filed with the Corporation, but not
yet acted upon.
(3) DIRECT
ACCESS
FOR
ALL
GUARANTORS,
GUARANTEED PARTIES, AND SYNDICATE AGENTS.—
The files in the central electronic repository estab-
lished under this section shall be directly and imme-
diately accessible by electronic means to any direct
guarantor, guaranteed party, and syndicate agent,
and any other person who qualifies for access under
procedures established by the Corporation.
(4) LEGAL EVIDENCE OF THE CONTRACT.—The
provisions of any cross-guarantee contract or stop-
loss contract, including any amendment to such con-
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tract, on file in the central electronic repository
shall—
(A) be irrebuttable evidence of the con-
tract; and
(B) be superior evidence to all other forms
or versions of the contract.
(b) AVAILABILITY OF CERTIFIED COPIES.—
(1) IN GENERAL.—The central electronic repos-
itory shall make available a copy of any cross-guar-
antee or stop-loss contract on file in the repository,
including any amendment to any such contract and
any proposed contract or proposed amendment to
any contract, to any person, any Government officer,
agency, or department, or any court upon request.
(2) CERTIFICATION OF COPIES.—
(A) IN GENERAL.—Each copy of a cross-
guarantee or stop-loss contract which is made
available in accordance with paragraph (1) shall
contain a certification by the central electronic
repository that such copy is true and correct.
(B) PRIMA FACIE EVIDENCE.—A copy of a
cross-guarantee or stop-loss contract which is
certified in accordance with subparagraph (A)
shall establish prima facie the contract.
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(c) MAINTENANCE
OF DATA BASE
OF GUARAN-
TORS.—The central electronic repository shall maintain a
data base containing the names of the direct guarantors
under each cross-guarantee or stop-loss contract which
has not expired or been canceled and such other informa-
tion with regard to such contracts that will enable any
person to determine whether or not any such contract,
proposed contract, or proposed amendment to any con-
tract, is in compliance with this title and regulations pre-
scribed under this title.
(d) STANDARD CONTRACT LANGUAGE.—The Cor-
poration is hereby authorized to maintain in the central
electronic repository and update as needed standard lan-
guage for various provisions of cross-guarantee, stop-loss,
and group cross-guarantee syndicate contracts that par-
ties to these contracts may, at their sole discretion, incor-
porate by reference in contracts and contract amendments
they submit to the Corporation for approval.
SEC. 125. RESTRICTIONS ON CLOSED LOOPS.
(a) PROHIBITION OF MORE THAN 1 UNRELATED
CLOSED LOOP.—At no time shall 2 or more closed loops
exist unless at least one cross-guarantee or stop-loss con-
tract is a contract in each closed loop that exists in the
system.
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(b) CGRC CALL-BACK.—If, at any time, the require-
ments of subsection (a) are violated—
(1) the Corporation shall immediately notify
each guaranteed party under each cross-guarantee
and stop-loss contract which is part of the closed
loop which has the fewest number of contracts that
it must obtain a successor cross-guarantee or stop-
loss contract; and
(2) each guaranteed party under paragraph (1)
shall have 10 business days upon notification to sub-
mit a successor contract to the Corporation for ap-
proval.
(c) CGRC FILING OF A BANKRUPTCY PETITION.—
(1) FILING OF A BANKRUPTCY PETITION BY
THE CGRC.—
(A) APPOINTMENT
OF
CGRC
AS
RE-
CEIVER.—The Corporation shall appoint itself
as receiver for a guaranteed company if and
only if the company has not met the deadline
to submit a contract for approval under sub-
section (b).
(B) CGRC IMMEDIATELY FILES A BANK-
RUPTCY PETITION.—Immediately upon appoint-
ing itself as receiver under paragraph (1), the
Corporation shall file a voluntary petition under
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section 301 of title 11, United States Code, on
behalf of the guaranteed company for which the
Corporation appointed itself receiver.
(2) RECOVERY FROM ALL DEPOSITORY INSTI-
TUTIONS FOR LOSSES DUE TO CLOSED LOOPS.—
(A) IN
GENERAL.—In the case of any
guaranteed company for which the Corporation
files a bankruptcy petition under paragraph
(1)(B), all depository institutions guaranteed
under a cross-guarantee contract shall be liable
to cover any loss to the bankruptcy estate aris-
ing out of the bankruptcy trustee’s duty to per-
form on all guaranteed obligations of the guar-
anteed company.
(B) LIABILITY PROPORTIONAL TO AN IN-
STITUTION’S SHARE OF OVERALL GUARANTEED
OBLIGATIONS.—A guaranteed depository insti-
tution or guaranteed banking office shall be lia-
ble under subparagraph (A) in proportion to
such institution’s or office’s share of the depos-
its of all depository institutions at the time of
the filing of the bankruptcy petition by the Cor-
poration.
(C) CGRC AUTHORIZATION.—The Cor-
poration is authorized to, and shall, assess de-
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pository institutions for any amounts owed
under this paragraph.
(d) STANDING.—Any person can bring an action in
a district court of the United States to force the Corpora-
tion to take action under this section.
SEC. 126. TREASURY OVERSIGHT OF THE CROSS-GUARAN-
TEE REGULATION CORPORATION
(a) ENFORCEMENT OF THE ACT.—In the event that
the Corporation should fail to fulfill any of its duties under
this title, the Secretary of Treasury may apply to the Fed-
eral district court for the District of Columbia for an order
requiring the Corporation to discharge its obligations
under this title and for such other relief as the court may
deem necessary to carry out the purposes of this title.
(b) EXAMINATIONS AND REPORTS.—
(1) EXAMINATIONS.—The Secretary of Treas-
ury may make such examinations and inspections of
the Corporation and require the Corporation to fur-
nish it with such reports and records or copies there-
of as the Secretary may consider necessary or appro-
priate to effectuate the purposes of this title.
(2) REPORTS.—
(A) ANNUAL
REPORT.—Within 90 days
after the close of each fiscal year of the Cor-
poration, the Corporation shall submit to the
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Treasury Department a written report relative
to the conduct of its business, and the exercise
of the other rights and powers granted by this
title, during such fiscal year.
(B) INFORMATION
TO
BE
INCLUDED
IN
REPORT.—The report under subparagraph (A)
shall include financial statements setting forth
the financial position of the Corporation at the
end of such fiscal year and the results of its op-
erations (including the source and application
of its funds) for such fiscal year.
(C) 
REQUIRED
AUDIT.—The 
financial
statements included under subparagraph (B)
shall be examined by an independent public ac-
countant or firm of independent public account-
ants, selected by the Corporation and satisfac-
tory to the Treasury Department, and shall be
accompanied by the report thereon of such ac-
countant or firm.
(D) SUBMISSION TO THE PRESIDENT AND
CONGRESS.—The Secretary of Treasury shall
submit the report under subparagraph (A) to
the President and Congress with such comment
thereon as the Secretary deems appropriate.
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CHAPTER 2—PROTECTION OF INSURED
DEPOSITS
SEC. 128. BACKUP INSURANCE ON DEPOSITS AT GUARAN-
TEED DEPOSITORY INSTITUTIONS.
(a) 
ESTABLISHMENT
OF
CROSS-GUARANTEE
BACKUP FUND.—
(1) IN GENERAL.—There is hereby established
the cross-guarantee backup fund consisting of
amounts deposited pursuant to section 144 and sub-
section (c) of this section.
(2) ADMINISTRATION
OF
FUND.—The cross-
guarantee backup fund shall be administered by the
Corporation.
(b) BACKUP DEPOSIT INSURANCE.—
(1) FUND LIABILITY.—Deposits in any guaran-
teed depository institution shall be insured against
loss, to the same extent as deposits are insured
against loss under section 11(a) of the Federal De-
posit Insurance Act (as in effect on the day before
the enactment of this Act), in the event that no ad-
justment under section 113(a)(2)(F)(iii) will be suf-
ficient to protect all guaranteed obligations of all
guaranteed companies against loss.
(2) SUBORDINATED
DEBT
NOT
TREATED
AS
DEPOSIT.—No subordinated debt of any guaranteed
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depository institution or any guaranteed banking of-
fice may be treated as a deposit for purposes of
paragraph (1).
(c) USE AND DISPOSITION OF FUND.—
(1) IN GENERAL.—Amounts in the cross-guar-
antee backup fund may be used only to meet obliga-
tions incurred under subsection (b)(1).
(2) INVESTMENTS.—Amounts on deposit in the
cross-guarantee backup fund shall be invested in di-
rect obligations of the United States and interest
thereon shall accumulate in the fund.
Subtitle D—Miscellaneous
Provisions
SEC. 131. INSTITUTIONS OFFERING UNINSURED DEPOSITS.
The Corporation shall ensure that any company other
than—
(a) a depository institution;
(b) a branch which is not an insured branch (as
the term ‘‘insured branch’’ is defined in section 3(s)
of the Federal Deposit Insurance Act);
(c) an insured credit union or noninsured credit
union (as such terms are defined in section 101(7)
of the Federal Credit Union Act);
(d) a broker or dealer registered under the Se-
curities and Exchange Act of 1934; or
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(e) an investment company registered under the
Investment Company Act of 1940, which accepts de-
posits or assumes obligations which would be depos-
its if the institution were a bank or savings associa-
tion (as defined in section 3 of the Federal Deposit
Insurance Act) is accepting such deposits and as-
suming such obligations in accordance with all appli-
cable Federal and State laws which relate to the li-
censing and regulation of institutions which accept
deposits or assume such obligations.
SEC. 132. PREEMPTION OF STATE DEPOSITOR PREF-
ERENCE LAWS.
Notwithstanding any State law, the depositors of any
guaranteed depository institution shall be general credi-
tors for purposes of any bankruptcy proceeding under title
11.
SEC. 133. FEDERAL RESERVE LENDING.
(a) NO COLLATERAL REQUIRED FOR LENDING TO
GUARANTEED COMPANY.—The cross-guarantee contract
shall be sufficient collateral for any loan to a guaranteed
company by any Federal Reserve bank for purposes of any
provision of Federal law, any regulation prescribed by the
Board of Governors of the Federal Reserve System, or any
requirement of any such bank.
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(b) CERTIFICATION OF NO LOSS.—Before February
1 of each calendar year beginning after the cross-guaran-
tee activation date, the Board of Governors of the Federal
Reserve System, shall submit a report to the Committee
on Banking, Finance and Urban Affairs of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate containing—
(1) a certification that—
(A) no loss was incurred by such Board or
any Federal Reserve Bank during the preceding
calendar year on any loan or other advance to
any guaranteed company during such year; and
(B) no loss is anticipated on any such loan
or advance which remains outstanding at the
end of such year; or
(2) the amount of any such loss or anticipated
loss.
SEC. 
134. 
ADVERTISING 
BY 
GUARANTEED 
FINANCIAL
GROUPS.
(a) ADVERTISING DEPOSIT GUARANTEES.—
(1) IN GENERAL.—A guaranteed company or
guaranteed banking office may advertise that depos-
its and certain other liabilities are fully guaranteed
against any loss under a cross-guarantee contract
approved by the Corporation.
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(2) CROSS-GUARANTEE LOGO.—Before the end
of the 1-year period beginning on the date of the en-
actment of this Act, the Corporation shall—
(A) design, after consultation with deposi-
tory institutions, a logotype for use by a guar-
anteed company or guaranteed banking office to
indicate that such a company or office is guar-
anteed under a cross-guarantee contract; and
(B) authorize guaranteed companies and
guaranteed banking offices to use such logo-
type.
(3) REGULATIONS GOVERNING MANNER OF AD-
VERTISING.—The Corporation shall prescribe regula-
tions governing the manner in which a guaranteed
company or guaranteed banking office may display
any logotype permitted under this subsection.
(b) ADVERTISING BACKUP INSURANCE.—A deposi-
tory institution which is guaranteed under a cross-guaran-
tee contract shall—
(1) display at each place of business of the in-
stitution any sign described in section 18(a) of the
Federal Deposit Insurance Act; and
(2) advertise that deposits at the institution are
insured by the Federal Government to $100,000.
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SEC. 135. GUARANTEED DEPOSITORY INSTITUTIONS RE-
MAIN FEDERALLY INSURED DEPOSITORIES
FOR PURPOSES OF STATE LAW.
Unless a State otherwise provides subsequent to the
passage of this Act, a guaranteed depository institution
shall be deemed to be a federally-insured depository insti-
tution within the meaning of section 3(c)(2) of the Federal
Deposit Insurance Act for purposes of any State or Fed-
eral law or private agreement which determines the legally
acceptable institutions with which to deposit funds.
Subtitle E—Transition to 100
Percent Cross-Guarantee Process
SEC. 141. EFFECTIVE DATE OF SYSTEM BASED ON MINI-
MUM NUMBER OF GUARANTEED DEPOSITORY
INSTITUTIONS AND AMOUNT OF TOTAL AS-
SETS.
(a) IN GENERAL.—No cross-guarantee or stop-loss
contract shall take effect before the later of—
(1) the end of the 18-month period beginning
on the date of the enactment of this Act; or
(2) forty business days after the date on which
the Corporation has approved, under subsection (b),
a minimum of 250 cross-guarantee contracts under
which depository institutions which, in the aggre-
gate, 
have 
total 
assets 
of 
not 
less 
than
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$500,000,000,000 are guaranteed companies or
guaranteed banking offices.
(b) CONTINGENT EFFECT OF CONTRACTS UNTIL EF-
FECTIVE DATE.—
(1) IN GENERAL.—The Corporation may condi-
tionally approve a cross-guarantee or stop-loss con-
tract to become effective on the date to be deter-
mined under subsection (a) even through not all di-
rect guarantors under the contract meet the require-
ments under section 116(a)(1).
(2) MINIMUM REQUIREMENTS.—No cross-guar-
antee or stop-loss contract conditionally approved
under paragraph (1) shall receive final approval
from the Corporation for purposes of subsection
(a)(2) unless—
(A) the cross-guarantee or stop-loss con-
tract is 1 of a set of contracts in which each
contract—
(i) is a contract in the same closed
loop; and
(ii) becomes effective at the same time
every other contract within the set of con-
tracts takes effect; and
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(B) at the time such contract becomes ef-
fective, the requirements of section 125(a) are
met.
(c) PUBLICATION OF SUBSECTION (a) DATE.—The
Corporation shall publish a notice in the Federal Register
of the date by which contracts may take effect in accord-
ance with subsection (a).
(d) ONE-TIME
CONVERSION
TO
GUARANTEED
PARTY STATUS.—Notwithstanding any provision of sec-
tion 142, section 111 shall apply with respect to any de-
pository institution as of the date—
(1) on which such institution first becomes a
guaranteed depository institution or guaranteed
banking office;
(2) on which any depository institution which is
affiliated with such depository institution becomes a
guaranteed depository institution; or
(3) on which any depository institution which is
under common ownership with such depository insti-
tution under section 112(d)(2) becomes a guaran-
teed depository institution.
SEC. 142. MANDATORY PHASE-IN OF CROSS-GUARANTEES
AFTER EFFECTIVE DATE OF SYSTEM.
(a) DEPOSITORY INSTITUTIONS WITH ASSETS OF
$1,000,000,000 OR MORE.—Section 111 shall apply as of
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the end of the 2-year period beginning on the cross-guar-
antee activation date with respect to any depository insti-
tution which has consolidated assets at book value which
are equal to or greater than $1,000,000,000 as of the end
of such 2-year period.
(b) DEPOSITORY INSTITUTIONS WITH ASSETS OF
$500,000,000 OR MORE.—Section 111 shall apply as of
the end of the 3-year period beginning on the cross-guar-
antee activation date with respect to any depository insti-
tution which has consolidated assets at book value which
are equal to or greater than $500,000,000 as of the end
of such 3-year period.
(c) DEPOSITORY INSTITUTIONS WITH ASSETS
OF
$250,000,000 OR MORE.—Section 111 shall apply as of
the end of the 4-year period beginning on the cross-guar-
antee activation date with respect to any depository insti-
tution which has consolidated assets at book value which
are equal to or greater than $250,000,000 as of the end
of such 4-year period.
(d) DEPOSITORY INSTITUTIONS WITH ASSETS OF
$100,000,000 OR MORE.—Section 111 shall apply as of
the end of the 5-year period beginning on the cross-guar-
antee activation date with respect to any depository insti-
tution which has consolidated assets at book value which
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are equal to or greater than $100,000,000 as of the end
of such 5-year period.
(e) DEPOSITORY INSTITUTIONS WITH ASSETS
OF
$50,000,000 OR MORE.—Section 111 shall apply as of the
end of the 6-year period beginning on the cross-guarantee
activation date with respect to any depository institution
which has consolidated assets at book value which are
equal to or greater than $50,000,000 as of the end of such
6-year period.
(f) DEPOSITORY INSTITUTIONS WITH ASSETS
OF
$25,000,000 OR MORE.—Section 111 shall apply as of the
end of the 7-year period beginning on the cross-guarantee
activation date with respect to any depository institution
which has consolidated assets at book value which are
equal to or greater than $25,000,000 as of the end of such
7-year period.
(g) ALL OTHER DEPOSITORY INSTITUTIONS.—Sec-
tion 111 shall apply as of the end of the 8-year period
beginning on the cross-guarantee activation date with re-
spect to any depository institution which is not described
in subsection (a), (b), (c), (d), (e), or (f).
(h) CONSOLIDATED ASSETS AT BOOK VALUE DE-
FINED.—The term ‘‘consolidated assets at book value’’
means the total value, as determined on a consolidated
basis and in accordance with generally accepted account-
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ing principles, of all tangible and intangible property of
any depository institution, all subsidiaries of such institu-
tion, all affiliates of such institution which are depository
institutions, and all subsidiaries of such affiliates.
SEC. 143. APPOINTMENT OF CONSERVATOR OR RECEIVER
FOR INSTITUTIONS WHICH FAIL TO COMPLY
WITH TRANSITION REQUIREMENTS.
The FDIC shall immediately appoint a conservator
or receiver for any depository institution which is not a
guaranteed depository institution or guaranteed banking
office under any cross-guarantee contract as of the date
by which such institution is required to be a guaranteed
depository institution or guaranteed banking office under
section 142.
SEC. 144. EXIT FEES.
(a) CONTINGENT PAYMENT
OF EXIT FEE UPON
CONVERSION OF DEPOSITORY INSTITUTION TO NEW SYS-
TEM.—
(1) PAYMENT
OF
EXIT
FEE.—Any insurance
fund member which becomes a guaranteed deposi-
tory institution or guaranteed banking office may be
assessed an exit fee in an amount to be determined
and assessed under paragraph (2), and such fee
shall be deposited in the insurance fund of which the
guaranteed depository institution or guaranteed
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banking office was a member on the cross-guarantee
activation date.
(2) DETERMINATION OF AMOUNT OF FEE.—
(A) TOTAL AMOUNT OF EXIT FEE TO COL-
LECT
FROM
MEMBERS
OF
AN
INSURANCE
FUND.—The FDIC shall calculate for each in-
surance fund, as of the cross-guarantee activa-
tion date, the total amount of exit fees it would
collect as of that date if all members of the in-
surance fund, except those members the FDIC
projects will have to be liquidated, did become
a guaranteed depository institution or guaran-
teed banking office on such date.
(B) CALCULATION OF TOTAL AMOUNT OF
EXIT FEES.—For the purpose of subparagraph
(A), the total amount of exit fees to be collected
for each insurance fund shall be the greater of
zero or the present value of—
(i) the sum of—
(I) total insured deposits of the
members of an insurance fund on the
cross-guarantee 
activation 
date
(minus the insured deposits, on such
date, held by insurance fund members
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which the FDIC estimates will be liq-
uidated) multiplied by 0.2 percent;
(II) losses incurred by an insur-
ance fund for depository institutions
placed into conservatorship or receiv-
ership after the cross-guarantee acti-
vation date;
(III) administrative expenses of
an insurance fund incurred after the
cross-guarantee activation date; and
(IV) transfers from an insurance
fund to the FDIC severance fund;
minus—
(ii) the sum of—
(I) the balance in an insurance
fund, as of the cross-guarantee activa-
tion date, after adding back any re-
serve for future losses as of such date,
provided that the balance in the Sav-
ings Association Insurance Fund on
that date shall be the greater of zero
or the sum of all amounts assessed
against Savings Association Insurance
Fund members and interest earned
during such period by such fund,
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minus the sum of losses paid or ac-
crued for members of such fund
placed into conservatorship or receiv-
ership and administrative expenses
such fund incurs during such period;
and
(II) premiums earned by an in-
surance fund after the cross-guaran-
tee activation fund.
(C) AMOUNT OF EXIT FEE PAID BY MEM-
BERS OF AN INSURANCE FUND.—Each insur-
ance fund member, on the date such member
becomes a guaranteed depository institution or
guaranteed banking office, shall pay to the in-
surance fund of which such member was a
member on the cross-guarantee activation date
an amount equal to the amount calculated in
paragraph (B) multiplied by—
(i) The insured deposits of such mem-
ber on the cross-guarantee activation date;
divided by
(ii) The total amount of insured de-
posits of the members of such insurance
fund on the cross-guarantee activation
date, minus the insured deposits, as of
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banking office, then such member shall pay the addi-
tional assessment to the insurance fund to which it
belonged on the cross-guarantee activation date
within 20 business days after being notified of the
additional assessment.
(f) ASSESSMENT PROCEDURE.—The FDIC shall pre-
scribe, by regulation, procedures for assessing an exit fee
under subsections (a) and (e).
(g) EXCESS AMOUNT IN INSURANCE FUNDS SHALL
BE TRANSFERRED TO THE CROSS-GUARANTEE BACKUP
FUND.—On the eighth anniversary of the cross-guarantee
activation date and after first fully accruing for the
present value of all losses and expenses associated with
depository institutions to be placed in conservatorship or
receivership after the eighth anniversary date, any balance
remaining in each insurance fund shall be transferred to
the cross-guarantee backup fund.
(h) CALCULATION
OF
INTEREST
OR
DISCOUNT
RATE.—For the purpose of this section, the rate of inter-
est or the discount rate to be sued in a calculation for
any insurance fund shall be the average daily percentage
yield earned on the investments of each insurance fund
for the period of time for which interest or a discounted
value is being calculated.
(i) DEFINITIONS.—For purposes of this section—
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(1) the term ‘‘insurance fund’’ means the Bank
Insurance Fund or the Savings Association Insur-
ance Fund; and
(2) the term ‘‘insurance fund member’’ means
a depository institution, the deposits of which were
insured by an insurance fund on the cross-guarantee
activation date.
SEC. 145. SEVERANCE PAY AND RELATED BENEFITS FOR
FORMER 
FEDERAL 
AND 
STATE 
BANKING
AGENCY EMPLOYEES.
(a) DEFINITIONS.—For purposes of this section—
(1) ELIGIBLE EMPLOYEE.—The term ‘‘eligible
employee’’ means any individual—
(A) who is employed by a Federal banking
agency, a State bank supervisor, or the Federal
Financial Institutions Examination Council
(FFIEC) as of the date of the enactment of
this Act, including employees of the FDIC on
detail to the Resolution Trust Corporation; and
(B) Whose employment is terminated by
the agency or supervisor after such date other
than for cause.
(2) FEDERAL
BANKING
AGENCY.—The term
‘‘Federal banking agency’’ has the meaning given to
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such term in section 3(q) of the Federal Deposit
Insurance Act.
(3) STATE
BANK
SUPERVISOR.—The term
‘‘state bank supervisor’’ means any officer, agency,
or other entity of any State (as defined in section
3(a)(3) of the Federal Deposit Insurance Act) which
has primary regulatory authority over State banks
or State savings associations (as such terms are de-
fined in section 3 of such Act) in such state.
(b) SEVERANCE PAY.—
(1) IN GENERAL.—Subject to paragraph (3),
any eligible employee shall be entitled to receive in
a lump sum, from the FDIC severance fund at the
time such employee’s employment by a Federal
banking agency, state bank supervisor, or the
FFIEC, is terminated, severance pay in the amount
which is equal to the sum of—
(A) the amount equal to 2 months of com-
pensation at the employee’s average annual rate
of base pay for the last 12 calendar months of
the employee’s employment by any Federal
banking agency or State bank supervisor; plus
(B) the product of—
(i) the amount equal to 3 weeks of
compensation at the employee’s annual
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rate of base pay (as determined under sub-
paragraph (A)); and
(ii) the number of years (including
any fraction of a year) of full-time service
of such employee with any Federal banking
agency, State bank supervisor, or the
FFIEC, or any predecessor of any such
agency or supervisor, where such number
of years can include employment for more
than 1 such agency or supervisor and need
not be continuous employment.
(2) EXCEPTION FOR EMPLOYEES REEMPLOYED
BY ANOTHER FEDERAL OR STATE AGENCY.—Para-
graph (1) shall not apply with respect to any eligible
employee who—
(A) in the case of an individual who is an
eligible employee by virtue of being separated
from service with any Federal agency, transfers
to or becomes employed by another Federal de-
partment, agency, or Government corporation;
or
(B) in the case of an individual who is an
eligible employee by virtue of being separated
from service with a State bank supervisor,
transfers to or becomes employed by another
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department, agency, or instrumentality of such
State.
(3) PROHIBITION
OF
CERTAIN
GOVERNMENT
SERVICE AFTER ACCEPTING SEVERANCE PAY.—
(A) FEDERAL EMPLOYEE.—No individual
who receives severance pay under this sub-
section by virtue of being separated from serv-
ice with a Federal agency or State bank super-
visor may be employed by any Federal officer,
department, agency, or Government corporation
during the 5-year period beginning on the date
such severance pay is received by such individ-
ual.
(B) STATE
EMPLOYEE.—No individual
who is, but for this subparagraph, entitled to
receive severance pay under this subsection by
virtue of being separated from service with a
State bank supervisor may receive such pay un-
less such individual has entered into a contract
with the FDIC under which such individual, in
consideration of the payment of such severance
pay, is obligated to return such amount in full,
plus interest, to the FDIC if such employee is
employed by any officer, department, or agency
of that State during the 5-year period begin-
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efits as such employee received as of the date
of termination for a time period which shall
consist of the shorter of—
(i) eighteen months following the date
of termination of employment; or
(ii) until such employee obtains alter-
native full-time employment.
(B) ADMINISTRATION OF THE PROVISION
OF HEALTH BENEFITS.—The agency which ter-
minated the employment of the eligible em-
ployee shall be responsible for administering the
provision of health benefits authorized under
subparagraph (A), unless such agency has been
abolished in which case the Federal or State
government (whichever case is appropriate)
shall provide for another agency or government
entity to perform this function.
(C) SEVERANCE FUND COMPENSATION.—
The FDIC severance fund shall reimburse any
agency or government entity for the costs of
providing the benefits authorized under sub-
paragraph (A).
(d) FUNDING BENEFITS
FOR ELIGIBLE EMPLOY-
EES.—
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(1) ESTABLISHMENT
OF
FDIC
SEVERANCE
FUND.—There is hereby established the FDIC sever-
ance fund which shall be administered by the FDIC.
(2) RELATED
EXPENSES.—Expenses incurred
by the FDIC in administering the FDIC severance
fund shall be paid from the fund.
SEC. 146. ABOLITION OF FEDERAL FINANCIAL INSTITU-
TIONS EXAMINATION COUNCIL.
The Federal Financial Institutions Examination
Council is hereby abolished, effective on the date on which
section 142(g) shall become effective.
SEC. 147. ABOLITION OF THE FEDERAL DEPOSIT INSUR-
ANCE CORPORATION.
The FDIC is hereby abolished, effective on the date
on which the last receivership or conservatorship resulting
from the appointment of a receiver or conservator by the
FDIC has been liquidated, disposed, of, or otherwise
resolved.
TITLE II—AMENDMENTS TO
OTHER BANKING LAWS
SEC. 201. AMENDMENTS RELATING TO NATIONAL BANKS.
(a) EXEMPTIONS FROM MINIMUM CAPITAL, STOCK,
AND OTHER REQUIREMENTS COVERED BY CROSS-GUAR-
ANTEE CONTRACTS.—
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(1) CAPITAL
OF
NATIONAL
BANKS.—Section
5138 of the Revised Statutes of the United States
(12 U.S.C. 51) is amended by adding at the end the
following new sentence: ‘‘This section shall not apply
with respect to any national bank which is a guaran-
teed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993).’’.
(2) PREFERRED STOCK IN MEMBER BANKS.—
Section 345 of the Banking Act of 1935 (12 U.S.C.
51B–1) is amended by adding at the end the follow-
ing new sentence: ‘‘This section shall not apply with
respect to any bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993).’’.
(3) DEFICIENT
CAPITAL
PROVISION
FOR
NA-
TIONAL BANKS.—Section 5205 of the Revised Stat-
utes of the United States (12 U.S.C. 55) is amended
by adding at the end the following new sentence:
‘‘This section shall not apply with respect to any na-
tional bank which is a guaranteed depository institu-
tion (as defined in section 101(a)(7) of the Deposit
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Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(4) WITHDRAWAL OF CAPITAL PROVISION FOR
NATIONAL
BANKS.—Section 5204 of the Revised
Statutes of the United States (12 U.S.C. 56) is
amended by adding at the end the following new
sentence: ‘‘This section shall not apply with respect
to any national bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993).’’.
(5) INCREASE IN CAPITAL PROVISION FOR NA-
TIONAL BANKS.—Section 5142 of the Revised Stat-
utes of the United States (12 U.S.C. 57) is amended
by adding at the end the following new sentence:
‘‘This section shall not apply with respect to any na-
tional bank which is a guaranteed depository institu-
tion (as defined in section 101(a)(7) of the Deposit
Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(6) DECREASE AND DISTRIBUTION OF CAPITAL
PROVISION FOR NATIONAL BANKS.—Section 5143 of
the Revised Statutes of the United States (12
U.S.C. 59) is amended by adding at the end the fol-
lowing new sentence: ‘‘Notwithstanding the preced-
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ing sentence, the approval of the Comptroller of the
Currency shall not be required for any reduction of
capital stock, or any distribution to shareholders by
reason of any such reduction, under such sentence
by any national bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993).’’.
(7) DIVIDEND PROVISIONS.—
(A) IN GENERAL.—Section 5199(a) of the
Revised Statutes of the United States (12
U.S.C. 60(a)) is amended—
(i) by striking ‘‘(a) The directors’’
and inserting:
‘‘(a) DECLARATION OF DIVIDEND.—
‘‘(1) IN GENERAL.—Subject to paragraph (2),
the directors’’;
(ii) by striking ‘‘expedient; except that
until the surplus fund of such association’’
and inserting ‘‘expedient’’.
‘‘(2) 
EXCEPTION
FOR
CERTAIN
UNDER-
CAPITALIZED
ASSOCIATIONS.—Until the surplus
fund of a national bank’’;
and
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(iii) by adding at the end of para-
graph (2) (as so redesignated by clause (ii)
of this subparagraph) the following: ‘‘This
paragraph shall not apply with respect to
any national bank which is a guaranteed
depository institution (as defined in section
101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Tax-
payer Protection Act of 1993).’’.
(B) TECHNICAL AND CONFORMING AMEND-
MENT.—Section 5199(b) of the Revised Stat-
utes of the United States (12 U.S.C. 60(b)) is
amended—
(i) by striking ‘‘(b) The approval of
the Comptroller’’ and inserting:
‘‘(b) APPROVAL OF THE COMPTROLLER.—Except in
the case of a national bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of the De-
posit Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993), the approval of the
Comptroller’’; and
(ii) by striking ‘‘such association’’ and
inserting ‘‘a national bank’’.
(b) EXEMPTIONS FROM REQUIREMENTS RELATING
TO DIRECTORS OF BANKS.—
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(1) QUALIFICATIONS OF NATIONAL BANK DI-
RECTORS.—Section 5146 of the Revised Statutes of
the United States (12 U.S.C. 72) is amended by
adding at the end the following new sentence: ‘‘This
section shall not apply with respect to any national
bank which is a guaranteed depository institution
(as defined in section 101(a)(7) of the Deposit In-
surance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(2) SERVICE
OF
PRESIDENT
OF
NATIONAL
BANK AS CHAIRMAN OF THE BANK’S BOARD OF DI-
RECTORS.—Section 5150 of the Revised Statutes of
the United States (12 U.S.C. 76) is amended by
adding at the end the following new sentence: ‘‘This
section shall not apply with respect to any national
bank which is a guaranteed depository institution
(as defined in section 101(a)(7) of the Deposit In-
surance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(3) MEMBER
BANK
DIRECTOR
INTERLOCKS
WITH SECURITIES FIRMS.—Section 32 of the Bank-
ing Act of 1933 (12 U.S.C. 78) is amended by add-
ing at the end the following new sentence: ‘‘This sec-
tion shall not apply with respect to any member
bank which is a guaranteed depository institution
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(as defined in section 101(a)(7) of the Deposit In-
surance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(4) LOANS
ON
OR
PURCHASE
OF
NATIONAL
BANK’S OWN STOCK.—Section 5201 of the Revised
Statutes of the United States (12 U.S.C. 83) is
amended by adding at the end the following new
sentence: ‘‘This section shall not apply with respect
to any national bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993).’’.
(c) EXEMPTION FROM REQUIREMENT RELATING TO
LOANS TO 1 BORROWER.—Section 5200 of the Revised
Statutes of the United States (12 U.S.C. 84) is amended
by adding at the end the following new subsection:
‘‘(e) EXEMPTION OF GUARANTEED COMPANIES.—
This section shall not apply with respect to any national
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993).’’.
(d) EXEMPTION FROM REQUIREMENTS RELATING
TO SECURITY FOR DEPOSITS OF GOVERNMENT AGENCIES
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AT NATIONAL BANKS.—Section 5153 of the Revised Stat-
utes of the United States (12 U.S.C. 90) is amended—
(1) in the 1st undesignated paragraph, by strik-
ing ‘‘All national banking associations’’ and insert-
ing:
‘‘(a) IN GENERAL.—All national banks’’;
(2) in the 2d undesignated paragraph, by strik-
ing ‘‘Any national banking association’’ and insert-
ing:
‘‘(b) DEPOSITORY FOR STATE AND LOCAL GOVERN-
MENTS.—Any national bank’’;
(3) in the 3d undesignated paragraph, by strik-
ing ‘‘Any national banking association’’ and insert-
ing:
‘‘(c) DEPOSITORY FOR INDIAN TRIBES.—Any na-
tional bank’’; and
(4) by adding at the end the following new sub-
section:
‘‘(d) EXEMPTION FROM SECURITY AND COLLATERAL
REQUIREMENTS.—A national bank which is a guaranteed
depository institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Modernization,
and Taxpayer Protection Act of 1993) shall not be re-
quired to give any security which is otherwise required
under subsection (a), (b), or (c) for deposits with the bank
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under this section or for the performance of the bank as
financial agent.’’.
(e) EXEMPTION FROM PROVISION RELATING
TO
TRANSFERS BY NATIONAL BANKS IN CONTEMPLATION OF
INSOLVENCY.—Section 5242 of the Revised Statutes of
the United States (12 U.S.C. 91) is amended by adding
at the end the following new sentence: ‘‘This section shall
not apply with respect to any national bank which is a
guaranteed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform Regulatory
Modernization, and Taxpayer Protection Act of 1993.’’.
(f) EXEMPTION FROM REQUIREMENTS RELATING TO
REPORTS OF CONDITION.—Section 5211 of the Revised
Statutes of the United States (12 U.S.C. 161) is amended
by adding at the end the following new subsection:
‘‘(d) EXEMPTION OF GUARANTEED COMPANIES.—
This section shall not apply with respect to any national
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993.’’.
(g) CONSENT OF GUARANTORS REQUIRED FOR VOL-
UNTARY DISSOLUTION.—
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(1) IN GENERAL.—Section 5220 of the Revised
Statutes of the United States (12 U.S.C. 181) is
amended—
(A) in the 1st undesignated paragraph, by
striking ‘‘Any association’’ and inserting:
‘‘(a) IN GENERAL.—Any national bank’’;
(B) in the 2d undesignated paragraph, by
striking ‘‘The shareholders shall designate’’ and
inserting:
‘‘(b) LIQUIDATING AGENT
OR COMMITTEE.—The
shareholders shall designate’’; and
(C) by adding at the end the following new
subsection:
‘‘(c) CONSENT
OF GUARANTORS REQUIRED
FOR
GUARANTEED COMPANIES.—In the case of any national
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993), the national bank may go into liquidation
and be closed in accordance with subsection (a) only with
the consent of the direct guarantors of such bank.’’.
(2) NOTICE
TO
SYNDICATE
AGENT.—Section
5221 of the Revised Statutes of the United States
(12 U.S.C. 182) is amended by inserting ‘‘and, in
the case of a national bank which is a guaranteed
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depository 
institution 
(as 
defined 
in 
section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993), to the syndicate agent of such bank’’ after
‘‘Comptroller of the Currency’’.
(h) COMPTROLLER
OF
THE CURRENCY NOT AU-
THORIZED TO APPOINT RECEIVER.—
(1) IN GENERAL.—The Act entitled ‘‘An Act
authorizing the appointment of receivers of national
banking associations, and for other purposes.’’ and
approved June 30, 1876, is amended by inserting
after the 1st section (12 U.S.C. 191) the following
new section:
‘‘SEC. 2. EXEMPTION OF GUARANTEED NATIONAL BANKS.
‘‘This Act shall not apply with respect to any national
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993).’’.
(2) EXEMPTION
FROM
ADDITIONAL
GROUND
FOR
THE
APPOINTMENT
OF
RECEIVERS.—Section
5234 of the Revised Statutes (12 U.S.C. 192) is
amended by adding at the end the following new
sentence: ‘‘This sentence shall not apply with respect
to any national bank which is a guaranteed deposi-
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Modernization, and Taxpayer Protection Act of 1993) or
any affiliate of such bank.’’.
(k) EXEMPTION FROM LIMITATION OR CONDITIONS
ON REAL ESTATE LENDING AUTHORITY.—Section 24(a)
of the Federal Reserve Act (12 U.S.C. 371(a)) is amended
by adding at the end the following new sentence: ‘‘Not-
withstanding the preceding sentence, a national bank
which is a guaranteed depository institution (as defined
in section 101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Protection Act
of 1993) shall not be subject to section 18(o) of the Fed-
eral Deposit Insurance Act or any restriction or require-
ment prescribed by the Comptroller of the Currency under
the preceding sentence.’’.
SEC. 202. AMENDMENTS RELATING TO MEMBER BANKS.
(a) FEDERAL RESERVE BOARD AND FEDERAL RE-
SERVE BANKS NOT AUTHORIZED TO EXAMINE GUARAN-
TEED MEMBER BANKS.—
(1) IN GENERAL.—Section 11(a)(1) of the Fed-
eral Reserve Act (12 U.S.C. 248(a)(1)) is amended
by adding at the end the following new sentence:
‘‘Notwithstanding any other provision of this section,
the authority of the Board or any Federal Reserve
bank to examine any member bank shall not apply
with respect to any member bank which is a guaran-
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teed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993).’’.
(2) SPECIAL EXAMINATIONS.—The 1st sentence
of the 5th undesignated paragraph of section 5240
of the Revised Statutes of the United States (12
U.S.C. 483) is amended by inserting ‘‘which are not
guaranteed depository institutions (as defined in sec-
tion 101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Protection
Act of 1993)’’ after ‘‘member banks within its dis-
trict’’.
(3) FOREIGN OPERATION OF STATE MEMBER
BANKS.—The last sentence of the 6th undesignated
paragraph of section 5240 of the Revised Statutes of
the United States (12 U.S.C. 481) is amended by
inserting ‘‘and are not guaranteed depository institu-
tions (as defined in section 101(a)(7) of the Deposit
Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993)’’ before the pe-
riod.
(4) EXAMINATIONS IN CONNECTION WITH AD-
VANCES OR DISCOUNTS.—Section 11(n) of the Fed-
eral Reserve Act (12 U.S.C. 248(n)) is amended by
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striking ‘‘depository institution,’’ and inserting ‘‘de-
pository institution (other than a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of
the Deposit Insurance Reform, Regulatory Mod-
ernization, and Taxpayer Protection Act of 1993)),’’.
(b) EXEMPTION FROM MEMBER BANK LOAN LIMI-
TATIONS.—Section 11(m) of the Federal Reserve Act (12
U.S.C. 248(m)) is amended by adding at the end the fol-
lowing new sentence: ‘‘This paragraph shall not apply with
respect to any member bank which is a guaranteed deposi-
tory institution (as defined in section 101(a)(7) of the De-
posit Insurance Reform, Regulatory Modernization, and
Taxpayer Protection Act of 1993).’’.
(c) EXEMPTION FROM LIMITATION ON ACCESS TO
FED WIRE.—Section 11 of the Federal Reserve Act (12
U.S.C. 248) is amended by inserting after paragraph (n)
the following new paragraph:
‘‘(o) PROHIBITION ON LIMITS ON ACCESS TO PAY-
MENT AND CLEARING SYSTEMS BY GUARANTEED MEM-
BER BANKS.—Notwithstanding any other provision of law,
the Board may not limit or deny access by any member
bank which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance Re-
form, Regulatory Modernization, and Taxpayer Protection
Act of 1993) to the payment system or any system in ef-
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fect for clearing transactions in securities for the purpose
of protecting any such system from any risk.’’.
(d) FEDERAL RESERVE BOARD NOT AUTHORIZED
TO
APPOINT
CONSERVATOR
OR
RECEIVER.—Section
11(p) of the Federal Reserve Act (12 U.S.C. 248(p)) (as
added by section 133(f) of the Federal Deposit Insurance
Corporation Act of 1991) is amended to read as follows:
‘‘(p) AUTHORITY TO APPOINT CONSERVATOR OR RE-
CEIVER.—
‘‘(1) IN GENERAL.—Except as provided in sub-
paragraph (B), the Board may appoint the Federal
Deposit Insurance Corporation as conservator or re-
ceiver for a State member bank under section
11(c)(8) of the Federal Deposit Insurance Act.
‘‘(2) EXCEPTION
FOR
GUARANTEED
DEPOSI-
TORY
INSTITUTIONS.—This paragraph shall not
apply with respect to any member bank which is a
guaranteed depository institution (as defined in sec-
tion 101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Protection
Act of 1993).’’.
(e) QUALIFICATION OF GUARANTEED STATE BANKS
FOR MEMBER BANK STATUS WITHOUT APPLICATION.—
(1) IN GENERAL.—The 1st undesignated para-
graph of section 9 of the Federal Reserve Act (12
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U.S.C. 321) is amended by adding at the end the
following new sentence: ‘‘Notwithstanding the appli-
cation requirement contained in the 1st sentence of
this paragraph, any State bank which is a guaran-
teed depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993) may become a member of the Federal Re-
serve System without application by agreeing to be
subject to all applicable provisions of this Act and by
subscribing to stock in the same manner and
amount as a national bank under section 2.’’.
(2) EXEMPTION FROM CAPITAL, RESERVE, AND
REPORTING REQUIREMENTS.—The 1st sentence of
the 6th undesignated paragraph of section 9 of the
Federal Reserve Act (12 U.S.C. 324) is amended by
inserting ‘‘, other than a bank which is a guaranteed
depository 
institution 
(as 
defined 
in 
section
101(a)(7) of the Deposit Insurance Reform, Regu-
latory Modernization, and Taxpayer Protection Act
of 1993),’’ after ‘‘banks admitted to membership
under authority of this section’’.
(3) EXEMPTION FROM EXAMINATION.—The 7th
undesignated paragraph of section 9 of the Federal
Reserve Act (12 U.S.C. 325) is amended by striking
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‘‘such banks’’ and inserting ‘‘, any bank admitted to
membership under this section, other than a bank
which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance
Reform, Regulatory Modernization, and Taxpayer
Protection Act of 1993),’’.
(4) EXEMPTION
FROM
SPECIAL
EXAMINA-
TIONS.—The 8th undesignated paragraph of section
9 of the Federal Reserve Act (12 U.S.C. 326) is
amended by adding at the end the following new
sentence: ‘‘Notwithstanding any other provision of
this paragraph, the authority of the Board to exam-
ine any member bank shall not apply with respect to
any member bank which is a guaranteed depository
institution (as defined in section 101(a)(7) of the
Deposit Insurance Reform, Regulatory Moderniza-
tion, and Taxpayer Protection Act of 1993).’’.
(5) EXEMPTION
FROM
CERTAIN
FORFEITURE
PROVISION.—The 9th undesignated paragraph of
section 9 of the Federal Reserve Act (12 U.S.C.
327) is amended by inserting ‘‘, other than a bank
which is a guaranteed depository institution (as de-
fined in section 101(a)(7) of the Deposit Insurance
Reform, Regulatory Modernization, and Taxpayer
Protection Act of 1993),’’ after ‘‘a member bank’’.
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U.S.C. 1468) is amended by adding at the end the follow-
ing new subsection:
‘‘(d) EXEMPTION FOR GUARANTEED SAVINGS ASSO-
CIATIONS.—This section shall not apply with respect to
any guaranteed savings association.’’.
SEC. 204. AMENDMENTS RELATING TO SAVINGS AND LOAN
HOLDING COMPANIES.
(a) 
GUARANTEED
SAVINGS
ASSOCIATION
DE-
FINED.—Section 10(a)(1) of the Home Owners’ Loan Act
(12 U.S.C. 1467a(a)(1)) is amended by adding at the end
the following new subparagraph:
‘‘(K) 
GUARANTEED
SAVINGS
ASSOCIA-
TION.—The term ‘guaranteed savings associa-
tion’ includes any savings association referred
to in subparagraph (A) which is a guaranteed
depository institution (as defined in section
101(a)(7) of the Deposit Insurance Reform,
Regulatory Modernization, and Taxpayer Pro-
tection Act of 1993).’’.
(b) EXEMPTION FROM EXAMINATION AND REPORT-
ING REQUIREMENT.—Section 10(b) of the Home Owners’
Loan Act (12 U.S.C. 1467a(b)) is amended by adding at
the end the following new paragraph:
‘‘(7) EXEMPTION FOR S&L HOLDING COMPANY
WHICH CONTROLS A GUARANTEED SAVINGS ASSOCIA-