H. R. 4173—68 
the Corporation in accordance with section 210(h) for the pur-
pose of resolving a covered financial company. 
(4) CLAIM.—The term ‘‘claim’’ means any right to payment, 
whether or not such right is reduced to judgment, liquidated, 
unliquidated, fixed, contingent, matured, unmatured, disputed, 
undisputed, legal, equitable, secured, or unsecured. 
(5) COMPANY.—The term ‘‘company’’ has the same meaning 
as in section 2(b) of the Bank Holding Company Act of 1956 
(12 U.S.C. 1841(b)), except that such term includes any com-
pany described in paragraph (11), the majority of the securities 
of which are owned by the United States or any State. 
(6) COURT.—The term ‘‘Court’’ means the United States 
District Court for the District of Columbia, unless the context 
otherwise requires. 
(7) COVERED
BROKER
OR
DEALER.—The term ‘‘covered 
broker or dealer’’ means a covered financial company that is 
a broker or dealer that— 
(A) is registered with the Commission under section 
15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o(b)); and 
(B) is a member of SIPC. 
(8) COVERED
FINANCIAL
COMPANY.—The term ‘‘covered 
financial company’’— 
(A) means a financial company for which a determina-
tion has been made under section 203(b); and 
(B) does not include an insured depository institution. 
(9) COVERED SUBSIDIARY.—The term ‘‘covered subsidiary’’ 
means a subsidiary of a covered financial company, other 
than— 
(A) an insured depository institution; 
(B) an insurance company; or 
(C) a covered broker or dealer. 
(10) DEFINITIONS
RELATING
TO
COVERED
BROKERS
AND 
DEALERS.—The terms ‘‘customer’’, ‘‘customer name securities’’, 
‘‘customer property’’, and ‘‘net equity’’ in the context of a covered 
broker or dealer, have the same meanings as in section 16 
of the Securities Investor Protection Act of 1970 (15 U.S.C. 
78lll). 
(11) FINANCIAL COMPANY.—The term ‘‘financial company’’ 
means any company that— 
(A) is incorporated or organized under any provision 
of Federal law or the laws of any State; 
(B) is— 
(i) a bank holding company, as defined in section 
2(a) of the Bank Holding Company Act of 1956 (12 
U.S.C. 1841(a)); 
(ii) a nonbank financial company supervised by 
the Board of Governors; 
(iii) any company that is predominantly engaged 
in activities that the Board of Governors has deter-
mined are financial in nature or incidental thereto 
for purposes of section 4(k) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1843(k)) other than a 
company described in clause (i) or (ii); or 
(iv) any subsidiary of any company described in 
any of clauses (i) through (iii) that is predominantly 
engaged in activities that the Board of Governors has
H. R. 4173—69 
determined are financial in nature or incidental thereto 
for purposes of section 4(k) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1843(k)) (other than a 
subsidiary that is an insured depository institution 
or an insurance company); and 
(C) is not a Farm Credit System institution chartered 
under and subject to the provisions of the Farm Credit 
Act of 1971, as amended (12 U.S.C. 2001 et seq.), a govern-
mental entity, or a regulated entity, as defined under sec-
tion 1303(20) of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4502(20)). 
(12) FUND.—The term ‘‘Fund’’ means the Orderly Liquida-
tion Fund established under section 210(n). 
(13) INSURANCE COMPANY.—The term ‘‘insurance company’’ 
means any entity that is— 
(A) engaged in the business of insurance; 
(B) subject to regulation by a State insurance regulator; 
and 
(C) covered by a State law that is designed to specifi-
cally deal with the rehabilitation, liquidation, or insolvency 
of an insurance company. 
(14) NONBANK FINANCIAL COMPANY.—The term ‘‘nonbank 
financial company’’ has the same meaning as in section 
102(a)(4)(C). 
(15) NONBANK
FINANCIAL
COMPANY
SUPERVISED
BY
THE 
BOARD OF GOVERNORS.—The term ‘‘nonbank financial company 
supervised by the Board of Governors’’ has the same meaning 
as in section 102(a)(4)(D). 
(16) SIPC.—The term ‘‘SIPC’’ means the Securities Investor 
Protection Corporation. 
(b) DEFINITIONAL CRITERIA.—For purpose of the definition of 
the term ‘‘financial company’’ under subsection (a)(11), no company 
shall be deemed to be predominantly engaged in activities that 
the Board of Governors has determined are financial in nature 
or incidental thereto for purposes of section 4(k) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1843(k)), if the consolidated reve-
nues of such company from such activities constitute less than 
85 percent of the total consolidated revenues of such company, 
as the Corporation, in consultation with the Secretary, shall estab-
lish by regulation. In determining whether a company is a financial 
company under this title, the consolidated revenues derived from 
the ownership or control of a depository institution shall be 
included. 
SEC. 202. JUDICIAL REVIEW. 
(a) COMMENCEMENT OF ORDERLY LIQUIDATION.— 
(1) PETITION TO DISTRICT COURT.— 
(A) DISTRICT COURT REVIEW.— 
(i) PETITION TO DISTRICT COURT.—Subsequent to 
a determination by the Secretary under section 203 
that a financial company satisfies the criteria in section 
203(b), the Secretary shall notify the Corporation and 
the covered financial company. If the board of directors 
(or body performing similar functions) of the covered 
financial company acquiesces or consents to the 
appointment of the Corporation as receiver, the Sec-
retary shall appoint the Corporation as receiver. If
H. R. 4173—70 
the board of directors (or body performing similar func-
tions) of the covered financial company does not 
acquiesce or consent to the appointment of the Corpora-
tion as receiver, the Secretary shall petition the United 
States District Court for the District of Columbia for 
an order authorizing the Secretary to appoint the Cor-
poration as receiver. 
(ii) FORM AND CONTENT OF ORDER.—The Secretary 
shall present all relevant findings and the rec-
ommendation made pursuant to section 203(a) to the 
Court. The petition shall be filed under seal. 
(iii) DETERMINATION.—On a strictly confidential 
basis, and without any prior public disclosure, the 
Court, after notice to the covered financial company 
and a hearing in which the covered financial company 
may oppose the petition, shall determine whether the 
determination of the Secretary that the covered finan-
cial company is in default or in danger of default 
and satisfies the definition of a financial company 
under section 201(a)(11) is arbitrary and capricious. 
(iv) ISSUANCE OF ORDER.—If the Court determines 
that the determination of the Secretary that the cov-
ered financial company is in default or in danger of 
default and satisfies the definition of a financial com-
pany under section 201(a)(11)— 
(I) is not arbitrary and capricious, the Court 
shall issue an order immediately authorizing the 
Secretary to appoint the Corporation as receiver 
of the covered financial company; or 
(II) is arbitrary and capricious, the Court shall 
immediately provide to the Secretary a written 
statement of each reason supporting its determina-
tion, and afford the Secretary an immediate oppor-
tunity to amend and refile the petition under 
clause (i). 
(v) PETITION GRANTED BY OPERATION OF LAW.— 
If the Court does not make a determination within 
24 hours of receipt of the petition— 
(I) the petition shall be granted by operation 
of law; 
(II) the Secretary shall appoint the Corpora-
tion as receiver; and 
(III) liquidation under this title shall auto-
matically and without further notice or action be 
commenced and the Corporation may immediately 
take all actions authorized under this title. 
(B) EFFECT OF DETERMINATION.—The determination of 
the Court under subparagraph (A) shall be final, and shall 
be subject to appeal only in accordance with paragraph 
(2). The decision shall not be subject to any stay or injunc-
tion pending appeal. Upon conclusion of its proceedings 
under subparagraph (A), the Court shall provide imme-
diately for the record a written statement of each reason 
supporting the decision of the Court, and shall provide 
copies thereof to the Secretary and the covered financial 
company.
H. R. 4173—71 
(C) CRIMINAL PENALTIES.—A person who recklessly dis-
closes a determination of the Secretary under section 203(b) 
or a petition of the Secretary under subparagraph (A), 
or the pendency of court proceedings as provided for under 
subparagraph (A), shall be fined not more than $250,000, 
or imprisoned for not more than 5 years, or both. 
(2) APPEAL OF DECISIONS OF THE DISTRICT COURT.— 
(A) APPEAL TO COURT OF APPEALS.— 
(i) IN GENERAL.—Subject to clause (ii), the United 
States Court of Appeals for the District of Columbia 
Circuit shall have jurisdiction of an appeal of a final 
decision of the Court filed by the Secretary or a covered 
financial company, through its board of directors, not-
withstanding section 210(a)(1)(A)(i), not later than 30 
days after the date on which the decision of the Court 
is rendered or deemed rendered under this subsection. 
(ii) CONDITION
OF
JURISDICTION.—The Court of 
Appeals shall have jurisdiction of an appeal by a cov-
ered financial company only if the covered financial 
company did not acquiesce or consent to the appoint-
ment of a receiver by the Secretary under paragraph 
(1)(A). 
(iii) EXPEDITION.—The Court of Appeals shall con-
sider any appeal under this subparagraph on an expe-
dited basis. 
(iv) SCOPE OF REVIEW.—For an appeal taken under 
this subparagraph, review shall be limited to whether 
the determination of the Secretary that a covered 
financial company is in default or in danger of default 
and satisfies the definition of a financial company 
under section 201(a)(11) is arbitrary and capricious. 
(B) APPEAL TO THE SUPREME COURT.— 
(i) IN GENERAL.—A petition for a writ of certiorari 
to review a decision of the Court of Appeals under 
subparagraph (A) may be filed by the Secretary or 
the covered financial company, through its board of 
directors, notwithstanding section 210(a)(1)(A)(i), with 
the Supreme Court of the United States, not later 
than 30 days after the date of the final decision of 
the Court of Appeals, and the Supreme Court shall 
have discretionary jurisdiction to review such decision. 
(ii) WRITTEN STATEMENT.—In the event of a peti-
tion under clause (i), the Court of Appeals shall imme-
diately provide for the record a written statement of 
each reason for its decision. 
(iii) EXPEDITION.—The Supreme Court shall con-
sider any petition under this subparagraph on an expe-
dited basis. 
(iv) SCOPE OF REVIEW.—Review by the Supreme 
Court under this subparagraph shall be limited to 
whether the determination of the Secretary that the 
covered financial company is in default or in danger 
of default and satisfies the definition of a financial 
company under section 201(a)(11) is arbitrary and 
capricious. 
(b) ESTABLISHMENT AND TRANSMITTAL OF RULES AND PROCE-
DURES.—
H. R. 4173—72 
(1) IN GENERAL.—Not later than 6 months after the date 
of enactment of this Act, the Court shall establish such rules 
and procedures as may be necessary to ensure the orderly 
conduct of proceedings, including rules and procedures to 
ensure that the 24-hour deadline is met and that the Secretary 
shall have an ongoing opportunity to amend and refile petitions 
under subsection (a)(1). 
(2) PUBLICATION
OF
RULES.—The rules and procedures 
established under paragraph (1), and any modifications of such 
rules and procedures, shall be recorded and shall be transmitted 
to— 
(A) the Committee on the Judiciary of the Senate; 
(B) the Committee on Banking, Housing, and Urban 
Affairs of the Senate; 
(C) the Committee on the Judiciary of the House of 
Representatives; and 
(D) the Committee on Financial Services of the House 
of Representatives. 
(c) PROVISIONS APPLICABLE TO FINANCIAL COMPANIES.— 
(1) BANKRUPTCY CODE.—Except as provided in this sub-
section, the provisions of the Bankruptcy Code and rules issued 
thereunder or otherwise applicable insolvency law, and not 
the provisions of this title, shall apply to financial companies 
that are not covered financial companies for which the Corpora-
tion has been appointed as receiver. 
(2) THIS TITLE.—The provisions of this title shall exclusively 
apply to and govern all matters relating to covered financial 
companies for which the Corporation is appointed as receiver, 
and no provisions of the Bankruptcy Code or the rules issued 
thereunder shall apply in such cases, except as expressly pro-
vided in this title. 
(d) TIME LIMIT ON RECEIVERSHIP AUTHORITY.— 
(1) BASELINE PERIOD.—Any appointment of the Corporation 
as receiver under this section shall terminate at the end of 
the 3-year period beginning on the date on which such appoint-
ment is made. 
(2) EXTENSION OF TIME LIMIT.—The time limit established 
in paragraph (1) may be extended by the Corporation for up 
to 1 additional year, if the Chairperson of the Corporation 
determines and certifies in writing to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representa-
tives that continuation of the receivership is necessary— 
(A) to— 
(i) maximize the net present value return from 
the sale or other disposition of the assets of the covered 
financial company; or 
(ii) minimize the amount of loss realized upon 
the sale or other disposition of the assets of the covered 
financial company; and 
(B) to protect the stability of the financial system of 
the United States. 
(3) SECOND EXTENSION OF TIME LIMIT.— 
(A) IN GENERAL.—The time limit under this subsection, 
as extended under paragraph (2), may be extended for
H. R. 4173—73 
up to 1 additional year, if the Chairperson of the Corpora-
tion, with the concurrence of the Secretary, submits the 
certifications described in paragraph (2). 
(B) ADDITIONAL REPORT REQUIRED.—Not later than 30 
days after the date of commencement of the extension 
under subparagraph (A), the Corporation shall submit a 
report to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Serv-
ices of the House of Representatives describing the need 
for the extension and the specific plan of the Corporation 
to conclude the receivership before the end of the second 
extension. 
(4) ONGOING LITIGATION.—The time limit under this sub-
section, as extended under paragraph (3), may be further 
extended solely for the purpose of completing ongoing litigation 
in which the Corporation as receiver is a party, provided that 
the appointment of the Corporation as receiver shall terminate 
not later than 90 days after the date of completion of such 
litigation, if— 
(A) the Council determines that the Corporation used 
its best efforts to conclude the receivership in accordance 
with its plan before the end of the time limit described 
in paragraph (3); 
(B) the Council determines that the completion of 
longer-term responsibilities in the form of ongoing litigation 
justifies the need for an extension; and 
(C) the Corporation submits a report approved by the 
Council not later than 30 days after the date of the deter-
minations by the Council under subparagraphs (A) and 
(B) to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Serv-
ices of the House of Representatives, describing— 
(i) the ongoing litigation justifying the need for 
an extension; and 
(ii) the specific plan of the Corporation to complete 
the litigation and conclude the receivership. 
(5) REGULATIONS.—The Corporation may issue regulations 
governing the termination of receiverships under this title. 
(6) NO LIABILITY.—The Corporation and the Deposit Insur-
ance Fund shall not be liable for unresolved claims arising 
from the receivership after the termination of the receivership. 
(e) STUDY OF BANKRUPTCY AND ORDERLY LIQUIDATION PROCESS 
FOR FINANCIAL COMPANIES.— 
(1) STUDY.— 
(A) IN
GENERAL.—The Administrative Office of the 
United States Courts and the Comptroller General of the 
United States shall each monitor the activities of the Court, 
and each such Office shall conduct separate studies 
regarding the bankruptcy and orderly liquidation process 
for financial companies under the Bankruptcy Code. 
(B) ISSUES TO BE STUDIED.—In conducting the study 
under subparagraph (A), the Administrative Office of the 
United States Courts and the Comptroller General of the 
United States each shall evaluate— 
(i) the effectiveness of chapter 7 or chapter 11 
of the Bankruptcy Code in facilitating the orderly liq-
uidation or reorganization of financial companies;
H. R. 4173—74 
(ii) ways to maximize the efficiency and effective-
ness of the Court; and 
(iii) ways to make the orderly liquidation process 
under the Bankruptcy Code for financial companies 
more effective. 
(2) REPORTS.—Not later than 1 year after the date of enact-
ment of this Act, in each successive year until the third year, 
and every fifth year after that date of enactment, the Adminis-
trative Office of the United States Courts and the Comptroller 
General of the United States shall submit to the Committee 
on Banking, Housing, and Urban Affairs and the Committee 
on the Judiciary of the Senate and the Committee on Financial 
Services and the Committee on the Judiciary of the House 
of Representatives separate reports summarizing the results 
of the studies conducted under paragraph (1). 
(f) STUDY OF INTERNATIONAL COORDINATION RELATING TO BANK-
RUPTCY PROCESS FOR FINANCIAL COMPANIES.— 
(1) STUDY.— 
(A) IN
GENERAL.—The Comptroller General of the 
United States shall conduct a study regarding international 
coordination relating to the orderly liquidation of financial 
companies under the Bankruptcy Code. 
(B) ISSUES TO BE STUDIED.—In conducting the study 
under subparagraph (A), the Comptroller General of the 
United States shall evaluate, with respect to the bank-
ruptcy process for financial companies— 
(i) the extent to which international coordination 
currently exists; 
(ii) current mechanisms and structures for facili-
tating international cooperation; 
(iii) barriers to effective international coordination; 
and 
(iv) ways to increase and make more effective 
international coordination. 
(2) REPORT.—Not later than 1 year after the date of enact-
ment of this Act, the Comptroller General of the United States 
shall submit to the Committee on Banking, Housing, and Urban 
Affairs and the Committee on the Judiciary of the Senate 
and the Committee on Financial Services and the Committee 
on the Judiciary of the House of Representatives and the Sec-
retary a report summarizing the results of the study conducted 
under paragraph (1). 
(g) STUDY OF PROMPT CORRECTIVE ACTION IMPLEMENTATION 
BY THE APPROPRIATE FEDERAL AGENCIES.— 
(1) STUDY.—The Comptroller General of the United States 
shall conduct a study regarding the implementation of prompt 
corrective action by the appropriate Federal banking agencies. 
(2) ISSUES TO BE STUDIED.—In conducting the study under 
paragraph (1), the Comptroller General shall evaluate— 
(A) the effectiveness of implementation of prompt 
corrective action by the appropriate Federal banking agen-
cies and the resolution of insured depository institutions 
by the Corporation; and 
(B) ways to make prompt corrective action a more 
effective tool to resolve the insured depository institutions 
at the least possible long-term cost to the Deposit Insurance 
Fund.
H. R. 4173—75 
(3) REPORT TO COUNCIL.—Not later than 1 year after the 
date of enactment of this Act, the Comptroller General shall 
submit a report to the Council on the results of the study 
conducted under this subsection. 
(4) COUNCIL REPORT OF ACTION.—Not later than 6 months 
after the date of receipt of the report from the Comptroller 
General under paragraph (3), the Council shall submit a report 
to the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of 
the House of Representatives on actions taken in response 
to the report, including any recommendations made to the 
Federal primary financial regulatory agencies under section 
120. 
SEC. 203. SYSTEMIC RISK DETERMINATION. 
(a) WRITTEN RECOMMENDATION AND DETERMINATION.— 
(1) VOTE REQUIRED.— 
(A) IN GENERAL.—On their own initiative, or at the 
request of the Secretary, the Corporation and the Board 
of Governors shall consider whether to make a written 
recommendation described in paragraph (2) with respect 
to whether the Secretary should appoint the Corporation 
as receiver for a financial company. Such recommendation 
shall be made upon a vote of not fewer than 2⁄3 of the 
members of the Board of Governors then serving and 2⁄3 
of the members of the board of directors of the Corporation 
then serving. 
(B) CASES INVOLVING BROKERS OR DEALERS.—In the 
case of a broker or dealer, or in which the largest United 
States subsidiary (as measured by total assets as of the 
end of the previous calendar quarter) of a financial com-
pany is a broker or dealer, the Commission and the Board 
of Governors, at the request of the Secretary, or on their 
own initiative, shall consider whether to make the written 
recommendation described in paragraph (2) with respect 
to the financial company. Subject to the requirements in 
paragraph (2), such recommendation shall be made upon 
a vote of not fewer than 2⁄3 of the members of the Board 
of Governors then serving and 2⁄3 of the members of the 
Commission then serving, and in consultation with the 
Corporation. 
(C) CASES INVOLVING INSURANCE COMPANIES.—In the 
case of an insurance company, or in which the largest 
United States subsidiary (as measured by total assets as 
of the end of the previous calendar quarter) of a financial 
company is an insurance company, the Director of the 
Federal Insurance Office and the Board of Governors, at 
the request of the Secretary or on their own initiative, 
shall consider whether to make the written recommenda-
tion described in paragraph (2) with respect to the financial 
company. Subject to the requirements in paragraph (2), 
such recommendation shall be made upon a vote of not 
fewer than 2⁄3 of the Board of Governors then serving 
and the affirmative approval of the Director of the Federal 
Insurance Office, and in consultation with the Corporation. 
(2) 
RECOMMENDATION
REQUIRED.—Any 
written 
rec-
ommendation pursuant to paragraph (1) shall contain—
H. R. 4173—76 
(A) an evaluation of whether the financial company 
is in default or in danger of default; 
(B) a description of the effect that the default of the 
financial company would have on financial stability in the 
United States; 
(C) a description of the effect that the default of the 
financial company would have on economic conditions or 
financial stability for low income, minority, or underserved 
communities; 
(D) a recommendation regarding the nature and the 
extent of actions to be taken under this title regarding 
the financial company; 
(E) an evaluation of the likelihood of a private sector 
alternative to prevent the default of the financial company; 
(F) an evaluation of why a case under the Bankruptcy 
Code is not appropriate for the financial company; 
(G) an evaluation of the effects on creditors, counter-
parties, and shareholders of the financial company and 
other market participants; and 
(H) an evaluation of whether the company satisfies 
the definition of a financial company under section 201. 
(b) DETERMINATION BY THE SECRETARY.—Notwithstanding any 
other provision of Federal or State law, the Secretary shall take 
action in accordance with section 202(a)(1)(A), if, upon the written 
recommendation under subsection (a), the Secretary (in consultation 
with the President) determines that— 
(1) the financial company is in default or in danger of 
default; 
(2) the failure of the financial company and its resolution 
under otherwise applicable Federal or State law would have 
serious adverse effects on financial stability in the United 
States; 
(3) no viable private sector alternative is available to pre-
vent the default of the financial company; 
(4) any effect on the claims or interests of creditors, counter-
parties, and shareholders of the financial company and other 
market participants as a result of actions to be taken under 
this title is appropriate, given the impact that any action taken 
under this title would have on financial stability in the United 
States; 
(5) any action under section 204 would avoid or mitigate 
such adverse effects, taking into consideration the effectiveness 
of the action in mitigating potential adverse effects on the 
financial system, the cost to the general fund of the Treasury, 
and the potential to increase excessive risk taking on the part 
of creditors, counterparties, and shareholders in the financial 
company; 
(6) a Federal regulatory agency has ordered the financial 
company to convert all of its convertible debt instruments that 
are subject to the regulatory order; and 
(7) the company satisfies the definition of a financial com-
pany under section 201. 
(c) DOCUMENTATION AND REVIEW.— 
(1) IN GENERAL.—The Secretary shall— 
(A) document any determination under subsection (b); 
(B) retain the documentation for review under para-
graph (2); and
H. R. 4173—77 
(C) notify the covered financial company and the Cor-
poration of such determination. 
(2) REPORT TO CONGRESS.—Not later than 24 hours after 
the date of appointment of the Corporation as receiver for 
a covered financial company, the Secretary shall provide written 
notice of the recommendations and determinations reached in 
accordance with subsections (a) and (b) to the Majority Leader 
and the Minority Leader of the Senate and the Speaker and 
the Minority Leader of the House of Representatives, the Com-
mittee on Banking, Housing, and Urban Affairs of the Senate, 
and the Committee on Financial Services of the House of Rep-
resentatives, which shall consist of a summary of the basis 
for the determination, including, to the extent available at 
the time of the determination— 
(A) the size and financial condition of the covered 
financial company; 
(B) the sources of capital and credit support that were 
available to the covered financial company; 
(C) the operations of the covered financial company 
that could have had a significant impact on financial sta-
bility, markets, or both; 
(D) identification of the banks and financial companies 
which may be able to provide the services offered by the 
covered financial company; 
(E) any potential international ramifications of resolu-
tion of the covered financial company under other 
applicable insolvency law; 
(F) an estimate of the potential effect of the resolution 
of the covered financial company under other applicable 
insolvency law on the financial stability of the United 
States; 
(G) the potential effect of the appointment of a receiver 
by the Secretary on consumers; 
(H) the potential effect of the appointment of a receiver 
by the Secretary on the financial system, financial markets, 
and banks and other financial companies; and 
(I) whether resolution of the covered financial company 
under other applicable insolvency law would cause banks 
or other financial companies to experience severe liquidity 
distress. 
(3) REPORTS TO CONGRESS AND THE PUBLIC.— 
(A) IN GENERAL.—Not later than 60 days after the 
date of appointment of the Corporation as receiver for 
a covered financial company, the Corporation shall file 
a report with the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Finan-
cial Services of the House of Representatives— 
(i) setting forth information on the financial condi-
tion of the covered financial company as of the date 
of the appointment, including a description of its assets 
and liabilities; 
(ii) describing the plan of, and actions taken by, 
the Corporation to wind down the covered financial 
company; 
(iii) explaining each instance in which the Corpora-
tion waived any applicable requirements of part 366
H. R. 4173—78 
of title 12, Code of Federal Regulations (or any suc-
cessor thereto) with respect to conflicts of interest by 
any person in the private sector who was retained 
to provide services to the Corporation in connection 
with such receivership; 
(iv) describing the reasons for the provision of any 
funding to the receivership out of the Fund; 
(v) setting forth the expected costs of the orderly 
liquidation of the covered financial company; 
(vi) setting forth the identity of any claimant that 
is treated in a manner different from other similarly 
situated claimants under subsection (b)(4), (d)(4), or 
(h)(5)(E), the amount of any additional payment to 
such claimant under subsection (d)(4), and the reason 
for any such action; and 
(vii) which report the Corporation shall publish 
on an online website maintained by the Corporation, 
subject to maintaining appropriate confidentiality. 
(B) AMENDMENTS.—The Corporation shall, on a timely 
basis, not less frequently than quarterly, amend or revise 
and resubmit the reports prepared under this paragraph, 
as necessary. 
(C) CONGRESSIONAL TESTIMONY.—The Corporation and 
the primary financial regulatory agency, if any, of the 
financial company for which the Corporation was appointed 
receiver under this title shall appear before Congress, if 
requested, not later than 30 days after the date on which 
the Corporation first files the reports required under 
subparagraph (A). 
(4) DEFAULT OR IN DANGER OF DEFAULT.—For purposes 
of this title, a financial company shall be considered to be 
in default or in danger of default if, as determined in accordance 
with subsection (b)— 
(A) a case has been, or likely will promptly be, com-
menced with respect to the financial company under the 
Bankruptcy Code; 
(B) the financial company has incurred, or is likely 
to incur, losses that will deplete all or substantially all 
of its capital, and there is no reasonable prospect for the 
company to avoid such depletion; 
(C) the assets of the financial company are, or are 
likely to be, less than its obligations to creditors and others; 
or 
(D) the financial company is, or is likely to be, unable 
to pay its obligations (other than those subject to a bona 
fide dispute) in the normal course of business. 
(5) GAO REVIEW.—The Comptroller General of the United 
States shall review and report to Congress on any determina-
tion under subsection (b), that results in the appointment of 
the Corporation as receiver, including— 
(A) the basis for the determination; 
(B) the purpose for which any action was taken pursu-
ant thereto; 
(C) the likely effect of the determination and such 
action on the incentives and conduct of financial companies 
and their creditors, counterparties, and shareholders; and
H. R. 4173—79 
(D) the likely disruptive effect of the determination 
and such action on the reasonable expectations of creditors, 
counterparties, and shareholders, taking into account the 
impact any action under this title would have on financial 
stability in the United States, including whether the rights 
of such parties will be disrupted. 
(d) CORPORATION POLICIES AND PROCEDURES.—As soon as is 
practicable after the date of enactment of this Act, the Corporation 
shall establish policies and procedures that are acceptable to the 
Secretary governing the use of funds available to the Corporation 
to carry out this title, including the terms and conditions for the 
provision and use of funds under sections 204(d), 210(h)(2)(G)(iv), 
and 210(h)(9). 
(e) TREATMENT OF INSURANCE COMPANIES AND INSURANCE COM-
PANY SUBSIDIARIES.— 
(1) IN
GENERAL.—Notwithstanding subsection (b), if an 
insurance company is a covered financial company or a sub-
sidiary or affiliate of a covered financial company, the liquida-
tion or rehabilitation of such insurance company, and any sub-
sidiary or affiliate of such company that is not excepted under 
paragraph (2), shall be conducted as provided under applicable 
State law. 
(2) EXCEPTION
FOR
SUBSIDIARIES
AND
AFFILIATES.—The 
requirement of paragraph (1) shall not apply with respect to 
any subsidiary or affiliate of an insurance company that is 
not itself an insurance company. 
(3) BACKUP AUTHORITY.—Notwithstanding paragraph (1), 
with respect to a covered financial company described in para-
graph (1), if, after the end of the 60-day period beginning 
on the date on which a determination is made under section 
202(a) with respect to such company, the appropriate regulatory 
agency has not filed the appropriate judicial action in the 
appropriate State court to place such company into orderly 
liquidation under the laws and requirements of the State, the 
Corporation shall have the authority to stand in the place 
of the appropriate regulatory agency and file the appropriate 
judicial action in the appropriate State court to place such 
company into orderly liquidation under the laws and require-
ments of the State. 
SEC. 204. ORDERLY LIQUIDATION OF COVERED FINANCIAL COMPA-
NIES. 
(a) PURPOSE OF ORDERLY LIQUIDATION AUTHORITY.—It is the 
purpose of this title to provide the necessary authority to liquidate 
failing financial companies that pose a significant risk to the finan-
cial stability of the United States in a manner that mitigates 
such risk and minimizes moral hazard. The authority provided 
in this title shall be exercised in the manner that best fulfills 
such purpose, so that— 
(1) creditors and shareholders will bear the losses of the 
financial company; 
(2) management responsible for the condition of the finan-
cial company will not be retained; and 
(3) the Corporation and other appropriate agencies will 
take all steps necessary and appropriate to assure that all 
parties, including management, directors, and third parties, 
having responsibility for the condition of the financial company
H. R. 4173—80 
bear losses consistent with their responsibility, including 
actions for damages, restitution, and recoupment of compensa-
tion and other gains not compatible with such responsibility. 
(b) CORPORATION AS RECEIVER.—Upon the appointment of the 
Corporation under section 202, the Corporation shall act as the 
receiver for the covered financial company, with all of the rights 
and obligations set forth in this title. 
(c) CONSULTATION.—The Corporation, as receiver— 
(1) shall consult with the primary financial regulatory 
agency or agencies of the covered financial company and its 
covered subsidiaries for purposes of ensuring an orderly liquida-
tion of the covered financial company; 
(2) may consult with, or under subsection (a)(1)(B)(v) or 
(a)(1)(L) of section 210, acquire the services of, any outside 
experts, as appropriate to inform and aid the Corporation in 
the orderly liquidation process; 
(3) shall consult with the primary financial regulatory 
agency or agencies of any subsidiaries of the covered financial 
company that are not covered subsidiaries, and coordinate with 
such regulators regarding the treatment of such solvent subsidi-
aries and the separate resolution of any such insolvent subsidi-
aries under other governmental authority, as appropriate; and 
(4) shall consult with the Commission and the Securities 
Investor Protection Corporation in the case of any covered 
financial company for which the Corporation has been 
appointed as receiver that is a broker or dealer registered 
with the Commission under section 15(b) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o(b)) and is a member 
of the Securities Investor Protection Corporation, for the pur-
pose of determining whether to transfer to a bridge financial 
company organized by the Corporation as receiver, without 
consent of any customer, customer accounts of the covered 
financial company. 
(d) FUNDING FOR ORDERLY LIQUIDATION.—Upon its appoint-
ment as receiver for a covered financial company, and thereafter 
as the Corporation may, in its discretion, determine to be necessary 
or appropriate, the Corporation may make available to the receiver-
ship, subject to the conditions set forth in section 206 and subject 
to the plan described in section 210(n)(9), funds for the orderly 
liquidation of the covered financial company. All funds provided 
by the Corporation under this subsection shall have a priority 
of claims under subparagraph (A) or (B) of section 210(b)(1), as 
applicable, including funds used for— 
(1) making loans to, or purchasing any debt obligation 
of, the covered financial company or any covered subsidiary; 
(2) purchasing or guaranteeing against loss the assets of 
the covered financial company or any covered subsidiary, 
directly or through an entity established by the Corporation 
for such purpose; 
(3) assuming or guaranteeing the obligations of the covered 
financial company or any covered subsidiary to 1 or more 
third parties; 
(4) taking a lien on any or all assets of the covered financial 
company or any covered subsidiary, including a first priority 
lien on all unencumbered assets of the covered financial com-
pany or any covered subsidiary to secure repayment of any 
transactions conducted under this subsection;
H. R. 4173—81 
(5) selling or transferring all, or any part, of such acquired 
assets, liabilities, or obligations of the covered financial com-
pany or any covered subsidiary; and 
(6) making payments pursuant to subsections (b)(4), (d)(4), 
and (h)(5)(E) of section 210. 
SEC. 205. ORDERLY LIQUIDATION OF COVERED BROKERS AND 
DEALERS. 
(a) APPOINTMENT OF SIPC AS TRUSTEE.— 
(1) APPOINTMENT.—Upon the appointment of the Corpora-
tion as receiver for any covered broker or dealer, the Corpora-
tion shall appoint, without any need for court approval, the 
Securities Investor Protection Corporation to act as trustee 
for the liquidation under the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78aaa et seq.) of the covered broker 
or dealer. 
(2) ACTIONS BY SIPC.— 
(A) FILING.—Upon appointment of SIPC under para-
graph (1), SIPC shall promptly file with any Federal district 
court of competent jurisdiction specified in section 21 or 
27 of the Securities Exchange Act of 1934 (15 U.S.C. 78u, 
78aa), an application for a protective decree under the 
Securities Investor Protection Act of 1970 (15 U.S.C. 78aaa 
et seq.) as to the covered broker or dealer. The Federal 
district court shall accept and approve the filing, including 
outside of normal business hours, and shall immediately 
issue the protective decree as to the covered broker or 
dealer. 
(B) ADMINISTRATION BY SIPC.—Following entry of the 
protective decree, and except as otherwise provided in this 
section, the determination of claims and the liquidation 
of assets retained in the receivership of the covered broker 
or dealer and not transferred to the bridge financial com-
pany shall be administered under the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78aaa et seq.) by SIPC, 
as trustee for the covered broker or dealer. 
(C) DEFINITION OF FILING DATE.—For purposes of the 
liquidation proceeding, the term ‘‘filing date’’ means the 
date on which the Corporation is appointed as receiver 
of the covered broker or dealer. 
(D) DETERMINATION
OF
CLAIMS.—As trustee for the 
covered broker or dealer, SIPC shall determine and satisfy, 
consistent with this title and with the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78aaa et seq.), all claims 
against the covered broker or dealer arising on or before 
the filing date. 
(b) POWERS AND DUTIES OF SIPC.— 
(1) IN GENERAL.—Except as provided in this section, upon 
its appointment as trustee for the liquidation of a covered 
broker or dealer, SIPC shall have all of the powers and duties 
provided by the Securities Investor Protection Act of 1970 (15 
U.S.C. 78aaa et seq.), including, without limitation, all rights 
of action against third parties, and shall conduct such liquida-
tion in accordance with the terms of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78aaa et seq.), except that 
SIPC shall have no powers or duties with respect to assets 
and liabilities transferred by the Corporation from the covered
H. R. 4173—82 
broker or dealer to any bridge financial company established 
in accordance with this title. 
(2) LIMITATION
OF
POWERS.—The exercise by SIPC of 
powers and functions as trustee under subsection (a) shall 
not impair or impede the exercise of the powers and duties 
of the Corporation with regard to— 
(A) any action, except as otherwise provided in this 
title— 
(i) to make funds available under section 204(d); 
(ii) to organize, establish, operate, or terminate 
any bridge financial company; 
(iii) to transfer assets and liabilities; 
(iv) to enforce or repudiate contracts; or 
(v) to take any other action relating to such bridge 
financial company under section 210; or 
(B) determining claims under subsection (e). 
(3) PROTECTIVE
DECREE.—SIPC and the Corporation, in 
consultation with the Commission, shall jointly determine the 
terms of the protective decree to be filed by SIPC with any 
court of competent jurisdiction under section 21 or 27 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u, 78aa), as 
required by subsection (a). 
(4) QUALIFIED
FINANCIAL
CONTRACTS.—Notwithstanding 
any provision of the Securities Investor Protection Act of 1970 
(15 U.S.C. 78aaa et seq.) to the contrary (including section 
5(b)(2)(C) of that Act (15 U.S.C. 78eee(b)(2)(C))), the rights 
and obligations of any party to a qualified financial contract 
(as that term is defined in section 210(c)(8)) to which a covered 
broker or dealer for which the Corporation has been appointed 
receiver is a party shall be governed exclusively by section 
210, including the limitations and restrictions contained in 
section 210(c)(10)(B). 
(c) LIMITATION ON COURT ACTION.—Except as otherwise pro-
vided in this title, no court may take any action, including any 
action pursuant to the Securities Investor Protection Act of 1970 
(15 U.S.C. 78aaa et seq.) or the Bankruptcy Code, to restrain 
or affect the exercise of powers or functions of the Corporation 
as receiver for a covered broker or dealer and any claims against 
the Corporation as such receiver shall be determined in accordance 
with subsection (e) and such claims shall be limited to money 
damages. 
(d) ACTIONS BY CORPORATION AS RECEIVER.— 
(1) IN GENERAL.—Notwithstanding any other provision of 
this title, no action taken by the Corporation as receiver with 
respect to a covered broker or dealer shall— 
(A) adversely affect the rights of a customer to cus-
tomer property or customer name securities; 
(B) diminish the amount or timely payment of net 
equity claims of customers; or 
(C) otherwise impair the recoveries provided to a cus-
tomer under the Securities Investor Protection Act of 1970 
(15 U.S.C. 78aaa et seq.). 
(2) NET PROCEEDS.—The net proceeds from any transfer, 
sale, or disposition of assets of the covered broker or dealer, 
or proceeds thereof by the Corporation as receiver for the cov-
ered broker or dealer shall be for the benefit of the estate 
of the covered broker or dealer, as provided in this title.
H. R. 4173—83 
(e) CLAIMS AGAINST
THE CORPORATION
AS RECEIVER.—Any 
claim against the Corporation as receiver for a covered broker 
or dealer for assets transferred to a bridge financial company estab-
lished with respect to such covered broker or dealer— 
(1) shall be determined in accordance with section 210(a)(2); 
and 
(2) may be reviewed by the appropriate district or territorial 
court of the United States in accordance with section 210(a)(5). 
(f) SATISFACTION OF CUSTOMER CLAIMS.— 
(1) OBLIGATIONS
TO
CUSTOMERS.—Notwithstanding any 
other provision of this title, all obligations of a covered broker 
or dealer or of any bridge financial company established with 
respect to such covered broker or dealer to a customer relating 
to, or net equity claims based upon, customer property or 
customer name securities shall be promptly discharged by SIPC, 
the Corporation, or the bridge financial company, as applicable, 
by the delivery of securities or the making of payments to 
or for the account of such customer, in a manner and in an 
amount at least as beneficial to the customer as would have 
been the case had the actual proceeds realized from the liquida-
tion of the covered broker or dealer under this title been distrib-
uted in a proceeding under the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78aaa et seq.) without the appointment 
of the Corporation as receiver and without any transfer of 
assets or liabilities to a bridge financial company, and with 
a filing date as of the date on which the Corporation is 
appointed as receiver. 
(2) SATISFACTION OF CLAIMS BY SIPC.—SIPC, as trustee 
for a covered broker or dealer, shall satisfy customer claims 
in the manner and amount provided under the Securities 
Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), as 
if the appointment of the Corporation as receiver had not 
occurred, and with a filing date as of the date on which the 
Corporation is appointed as receiver. The Corporation shall 
satisfy customer claims, to the extent that a customer would 
have received more securities or cash with respect to the alloca-
tion of customer property had the covered financial company 
been subject to a proceeding under the Securities Investor 
Protection Act (15 U.S.C. 78aaa et seq.) without the appoint-
ment of the Corporation as receiver, and with a filing date 
as of the date on which the Corporation is appointed as receiver. 
(g) PRIORITIES.— 
(1) CUSTOMER PROPERTY.—As trustee for a covered broker 
or dealer, SIPC shall allocate customer property and deliver 
customer name securities in accordance with section 8(c) of 
the Securities Investor Protection Act of 1970 (15 U.S.C. 78fff– 
2(c)). 
(2) OTHER CLAIMS.—All claims other than those described 
in paragraph (1) (including any unpaid claim by a customer 
for the allowed net equity claim of such customer from customer 
property) shall be paid in accordance with the priorities in 
section 210(b). 
(h) RULEMAKING.—The Commission and the Corporation, after 
consultation with SIPC, shall jointly issue rules to implement this 
section.
H. R. 4173—84 
SEC. 206. MANDATORY TERMS AND CONDITIONS FOR ALL ORDERLY 
LIQUIDATION ACTIONS. 
In taking action under this title, the Corporation shall— 
(1) determine that such action is necessary for purposes 
of the financial stability of the United States, and not for 
the purpose of preserving the covered financial company; 
(2) ensure that the shareholders of a covered financial 
company do not receive payment until after all other claims 
and the Fund are fully paid; 
(3) ensure that unsecured creditors bear losses in accord-
ance with the priority of claim provisions in section 210; 
(4) ensure that management responsible for the failed 
condition of the covered financial company is removed (if such 
management has not already been removed at the time at 
which the Corporation is appointed receiver); 
(5) ensure that the members of the board of directors 
(or body performing similar functions) responsible for the failed 
condition of the covered financial company are removed, if 
such members have not already been removed at the time 
the Corporation is appointed as receiver; and 
(6) not take an equity interest in or become a shareholder 
of any covered financial company or any covered subsidiary. 
SEC. 207. DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINT-
MENT OF RECEIVER. 
The members of the board of directors (or body performing 
similar functions) of a covered financial company shall not be liable 
to the shareholders or creditors thereof for acquiescing in or con-
senting in good faith to the appointment of the Corporation as 
receiver for the covered financial company under section 203. 
SEC. 208. DISMISSAL AND EXCLUSION OF OTHER ACTIONS. 
(a) IN GENERAL.—Effective as of the date of the appointment 
of the Corporation as receiver for the covered financial company 
under section 202 or the appointment of SIPC as trustee for a 
covered broker or dealer under section 205, as applicable, any 
case or proceeding commenced with respect to the covered financial 
company under the Bankruptcy Code or the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78aaa et seq.) shall be dismissed, 
upon notice to the bankruptcy court (with respect to a case com-
menced under the Bankruptcy Code), and upon notice to SIPC 
(with respect to a covered broker or dealer) and no such case 
or proceeding may be commenced with respect to a covered financial 
company at any time while the orderly liquidation is pending. 
(b) REVESTING OF ASSETS.—Effective as of the date of appoint-
ment of the Corporation as receiver, the assets of a covered financial 
company shall, to the extent they have vested in any entity other 
than the covered financial company as a result of any case or 
proceeding commenced with respect to the covered financial com-
pany under the Bankruptcy Code, the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78aaa et seq.), or any similar provision 
of State liquidation or insolvency law applicable to the covered 
financial company, revest in the covered financial company. 
(c) LIMITATION.—Notwithstanding subsections (a) and (b), any 
order entered or other relief granted by a bankruptcy court prior 
to the date of appointment of the Corporation as receiver shall
H. R. 4173—85 
continue with the same validity as if an orderly liquidation had 
not been commenced. 
SEC. 209. RULEMAKING; NON-CONFLICTING LAW. 
The Corporation shall, in consultation with the Council, pre-
scribe such rules or regulations as the Corporation considers nec-
essary or appropriate to implement this title, including rules and 
regulations with respect to the rights, interests, and priorities of 
creditors, counterparties, security entitlement holders, or other per-
sons with respect to any covered financial company or any assets 
or other property of or held by such covered financial company, 
and address the potential for conflicts of interest between or among 
individual receiverships established under this title or under the 
Federal Deposit Insurance Act. To the extent possible, the Corpora-
tion shall seek to harmonize applicable rules and regulations 
promulgated under this section with the insolvency laws that would 
otherwise apply to a covered financial company. 
SEC. 210. POWERS AND DUTIES OF THE CORPORATION. 
(a) POWERS AND AUTHORITIES.— 
(1) GENERAL POWERS.— 
(A) SUCCESSOR TO COVERED FINANCIAL COMPANY.—The 
Corporation shall, upon appointment as receiver for a cov-
ered financial company under this title, succeed to— 
(i) all rights, titles, powers, and privileges of the 
covered financial company and its assets, and of any 
stockholder, member, officer, or director of such com-
pany; and 
(ii) title to the books, records, and assets of any 
previous receiver or other legal custodian of such cov-
ered financial company. 
(B) OPERATION OF THE COVERED FINANCIAL COMPANY 
DURING THE PERIOD OF ORDERLY LIQUIDATION.—The Cor-
poration, as receiver for a covered financial company, 
may— 
(i) take over the assets of and operate the covered 
financial company with all of the powers of the mem-
bers or shareholders, the directors, and the officers 
of the covered financial company, and conduct all busi-
ness of the covered financial company; 
(ii) collect all obligations and money owed to the 
covered financial company; 
(iii) perform all functions of the covered financial 
company, in the name of the covered financial com-
pany; 
(iv) manage the assets and property of the covered 
financial company, consistent with maximization of the 
value of the assets in the context of the orderly liquida-
tion; and 
(v) provide by contract for assistance in fulfilling 
any function, activity, action, or duty of the Corporation 
as receiver. 
(C) FUNCTIONS OF COVERED FINANCIAL COMPANY OFFI-
CERS, DIRECTORS, AND
SHAREHOLDERS.—The Corporation 
may provide for the exercise of any function by any member 
or stockholder, director, or officer of any covered financial 
company for which the Corporation has been appointed 
as receiver under this title.
H. R. 4173—86 
(D) ADDITIONAL POWERS AS RECEIVER.—The Corpora-
tion shall, as receiver for a covered financial company, 
and subject to all legally enforceable and perfected security 
interests and all legally enforceable security entitlements 
in respect of assets held by the covered financial company, 
liquidate, and wind-up the affairs of a covered financial 
company, including taking steps to realize upon the assets 
of the covered financial company, in such manner as the 
Corporation deems appropriate, including through the sale 
of assets, the transfer of assets to a bridge financial com-
pany established under subsection (h), or the exercise of 
any other rights or privileges granted to the receiver under 
this section. 
(E) ADDITIONAL
POWERS
WITH
RESPECT
TO
FAILING 
SUBSIDIARIES OF A COVERED FINANCIAL COMPANY.— 
(i) IN GENERAL.—In any case in which a receiver 
is appointed for a covered financial company under 
section 202, the Corporation may appoint itself as 
receiver of any covered subsidiary of the covered finan-
cial company that is organized under Federal law or 
the laws of any State, if the Corporation and the Sec-
retary jointly determine that— 
(I) the covered subsidiary is in default or in 
danger of default; 
(II) such action would avoid or mitigate serious 
adverse effects on the financial stability or eco-
nomic conditions of the United States; and 
(III) such action would facilitate the orderly 
liquidation of the covered financial company. 
(ii) TREATMENT AS COVERED FINANCIAL COMPANY.— 
If the Corporation is appointed as receiver of a covered 
subsidiary of a covered financial company under clause 
(i), the covered subsidiary shall thereafter be consid-
ered a covered financial company under this title, and 
the Corporation shall thereafter have all the powers 
and rights with respect to that covered subsidiary as 
it has with respect to a covered financial company 
under this title. 
(F) ORGANIZATION OF BRIDGE COMPANIES.—The Cor-
poration, as receiver for a covered financial company, may 
organize a bridge financial company under subsection (h). 
(G) MERGER; TRANSFER OF ASSETS AND LIABILITIES.— 
(i) IN GENERAL.—Subject to clauses (ii) and (iii), 
the Corporation, as receiver for a covered financial 
company, may— 
(I) merge the covered financial company with 
another company; or 
(II) transfer any asset or liability of the cov-
ered financial company (including any assets and 
liabilities held by the covered financial company 
for security entitlement holders, any customer 
property, or any assets and liabilities associated 
with any trust or custody business) without 
obtaining any approval, assignment, or consent 
with respect to such transfer. 
(ii) 
FEDERAL
AGENCY
APPROVAL; 
ANTITRUST 
REVIEW.—With respect to a transaction described in
H. R. 4173—87 
clause (i)(I) that requires approval by a Federal 
agency— 
(I) the transaction may not be consummated 
before the 5th calendar day after the date of 
approval by the Federal agency responsible for 
such approval; 
(II) if, in connection with any such approval, 
a report on competitive factors is required, the 
Federal agency responsible for such approval shall 
promptly notify the Attorney General of the United 
States of the proposed transaction, and the 
Attorney General shall provide the required report 
not later than 10 days after the date of the request; 
and 
(III) if notification under section 7A of the 
Clayton Act is required with respect to such trans-
action, then the required waiting period shall end 
on the 15th day after the date on which the 
Attorney General and the Federal Trade Commis-
sion receive such notification, unless the waiting 
period is terminated earlier under subsection (b)(2) 
of such section 7A, or is extended pursuant to 
subsection (e)(2) of such section 7A. 
(iii) SETOFF.—Subject to the other provisions of 
this title, any transferee of assets from a receiver, 
including a bridge financial company, shall be subject 
to such claims or rights as would prevail over the 
rights of such transferee in such assets under 
applicable noninsolvency law. 
(H) PAYMENT OF VALID OBLIGATIONS.—The Corporation, 
as receiver for a covered financial company, shall, to the 
extent that funds are available, pay all valid obligations 
of the covered financial company that are due and payable 
at the time of the appointment of the Corporation as 
receiver, in accordance with the prescriptions and limita-
tions of this title. 
(I) APPLICABLE NONINSOLVENCY LAW.—Except as may 
otherwise be provided in this title, the applicable noninsol-
vency law shall be determined by the noninsolvency choice 
of law rules otherwise applicable to the claims, rights, 
titles, persons, or entities at issue. 
(J) SUBPOENA AUTHORITY.— 
(i) IN GENERAL.—The Corporation, as receiver for 
a covered financial company, may, for purposes of car-
rying out any power, authority, or duty with respect 
to the covered financial company (including deter-
mining any claim against the covered financial com-
pany and determining and realizing upon any asset 
of any person in the course of collecting money due 
the covered financial company), exercise any power 
established under section 8(n) of the Federal Deposit 
Insurance Act, as if the Corporation were the appro-
priate Federal banking agency for the covered financial 
company, and the covered financial company were an 
insured depository institution. 
(ii) RULE OF CONSTRUCTION.—This subparagraph 
may not be construed as limiting any rights that the
H. R. 4173—88 
Corporation, in any capacity, might otherwise have 
to exercise any powers described in clause (i) or under 
any other provision of law. 
(K) INCIDENTAL POWERS.—The Corporation, as receiver 
for a covered financial company, may exercise all powers 
and authorities specifically granted to receivers under this 
title, and such incidental powers as shall be necessary 
to carry out such powers under this title. 
(L) UTILIZATION OF PRIVATE SECTOR.—In carrying out 
its responsibilities in the management and disposition of 
assets from the covered financial company, the Corporation, 
as receiver for a covered financial company, may utilize 
the services of private persons, including real estate and 
loan portfolio asset management, property management, 
auction marketing, legal, and brokerage services, if such 
services are available in the private sector, and the Cor-
poration determines that utilization of such services is 
practicable, efficient, and cost effective. 
(M) SHAREHOLDERS AND CREDITORS OF COVERED FINAN-
CIAL
COMPANY.—Notwithstanding any other provision of 
law, the Corporation, as receiver for a covered financial 
company, shall succeed by operation of law to the rights, 
titles, powers, and privileges described in subparagraph 
(A), and shall terminate all rights and claims that the 
stockholders and creditors of the covered financial company 
may have against the assets of the covered financial com-
pany or the Corporation arising out of their status as 
stockholders or creditors, except for their right to payment, 
resolution, or other satisfaction of their claims, as permitted 
under this section. The Corporation shall ensure that share-
holders and unsecured creditors bear losses, consistent with 
the priority of claims provisions under this section. 
(N) COORDINATION WITH FOREIGN FINANCIAL AUTHORI-
TIES.—The Corporation, as receiver for a covered financial 
company, shall coordinate, to the maximum extent possible, 
with the appropriate foreign financial authorities regarding 
the orderly liquidation of any covered financial company 
that has assets or operations in a country other than the 
United States. 
(O) RESTRICTION ON TRANSFERS.— 
(i) SELECTION OF ACCOUNTS FOR TRANSFER.—If the 
Corporation establishes one or more bridge financial 
companies with respect to a covered broker or dealer, 
the Corporation shall transfer to one of such bridge 
financial companies, all customer accounts of the cov-
ered broker or dealer, and all associated customer 
name securities and customer property, unless the Cor-
poration, after consulting with the Commission and 
SIPC, determines that— 
(I) the customer accounts, customer name 
securities, and customer property are likely to be 
promptly transferred to another broker or dealer 
that is registered with the Commission under sec-
tion 15(b) of the Securities Exchange Act of 1934 
(15 U.S.C. 73o(b)) and is a member of SIPC; or 
(II) the transfer of the accounts to a bridge 
financial company would materially interfere with
H. R. 4173—89 
the ability of the Corporation to avoid or mitigate 
serious adverse effects on financial stability or eco-
nomic conditions in the United States. 
(ii) TRANSFER OF PROPERTY.—SIPC, as trustee for 
the liquidation of the covered broker or dealer, and 
the Commission shall provide any and all reasonable 
assistance necessary to complete such transfers by the 
Corporation. 
(iii) CUSTOMER CONSENT AND COURT APPROVAL NOT 
REQUIRED.—Neither 
customer 
consent 
nor 
court 
approval shall be required to transfer any customer 
accounts or associated customer name securities or 
customer property to a bridge financial company in 
accordance with this section. 
(iv) NOTIFICATION
OF
SIPC
AND
SHARING
OF 
INFORMATION.—The Corporation shall identify to SIPC 
the customer accounts and associated customer name 
securities and customer property transferred to the 
bridge financial company. The Corporation and SIPC 
shall cooperate in the sharing of any information nec-
essary for each entity to discharge its obligations under 
this title and under the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78aaa et seq.) including by 
providing access to the books and records of the covered 
financial company and any bridge financial company 
established in accordance with this title. 
(2) DETERMINATION OF CLAIMS.— 
(A) IN GENERAL.—The Corporation, as receiver for a 
covered financial company, shall report on claims, as set 
forth in section 203(c)(3). Subject to paragraph (4) of this 
subsection, the Corporation, as receiver for a covered finan-
cial company, shall determine claims in accordance with 
the requirements of this subsection and regulations pre-
scribed under section 209. 
(B) NOTICE
REQUIREMENTS.—The Corporation, as 
receiver for a covered financial company, in any case 
involving the liquidation or winding up of the affairs of 
a covered financial company, shall— 
(i) promptly publish a notice to the creditors of 
the covered financial company to present their claims, 
together with proof, to the receiver by a date specified 
in the notice, which shall be not earlier than 90 days 
after the date of publication of such notice; and 
(ii) republish such notice 1 month and 2 months, 
respectively, after the date of publication under clause 
(i). 
(C) MAILING REQUIRED.—The Corporation as receiver 
shall mail a notice similar to the notice published under 
clause (i) or (ii) of subparagraph (B), at the time of such 
publication, to any creditor shown on the books and records 
of the covered financial company— 
(i) at the last address of the creditor appearing 
in such books; 
(ii) in any claim filed by the claimant; or 
(iii) upon discovery of the name and address of 
a claimant not appearing on the books and records 
of the covered financial company, not later than 30
H. R. 4173—90 
days after the date of the discovery of such name 
and address. 
(3) PROCEDURES FOR RESOLUTION OF CLAIMS.— 
(A) DECISION PERIOD.— 
(i) IN GENERAL.—Prior to the 180th day after the 
date on which a claim against a covered financial com-
pany is filed with the Corporation as receiver, or such 
later date as may be agreed as provided in clause 
(ii), the Corporation shall notify the claimant whether 
it allows or disallows the claim, in accordance with 
subparagraphs (B), (C), and (D). 
(ii) EXTENSION OF TIME.—By written agreement 
executed not later than 180 days after the date on 
which a claim against a covered financial company 
is filed with the Corporation, the period described in 
clause (i) may be extended by written agreement 
between the claimant and the Corporation. Failure 
to notify the claimant of any disallowance within the 
time period set forth in clause (i), as it may be extended 
by agreement under this clause, shall be deemed to 
be a disallowance of such claim, and the claimant 
may file or continue an action in court, as provided 
in paragraph (4). 
(iii) MAILING OF NOTICE SUFFICIENT.—The require-
ments of clause (i) shall be deemed to be satisfied 
if the notice of any decision with respect to any claim 
is mailed to the last address of the claimant which 
appears— 
(I) on the books, records, or both of the covered 
financial company; 
(II) in the claim filed by the claimant; or 
(III) in documents submitted in proof of the 
claim. 
(iv) CONTENTS OF NOTICE OF DISALLOWANCE.—If 
the Corporation as receiver disallows any claim filed 
under clause (i), the notice to the claimant shall con-
tain— 
(I) a statement of each reason for the disallow-
ance; and 
(II) the procedures required to file or continue 
an action in court, as provided in paragraph (4). 
(B) ALLOWANCE OF PROVEN CLAIM.—The receiver shall 
allow any claim received by the receiver on or before the 
date specified in the notice under paragraph (2)(B)(i), which 
is proved to the satisfaction of the receiver. 
(C) DISALLOWANCE
OF
CLAIMS
FILED
AFTER
END
OF 
FILING PERIOD.— 
(i) IN GENERAL.—Except as provided in clause (ii), 
claims filed after the date specified in the notice pub-
lished under paragraph (2)(B)(i) shall be disallowed, 
and such disallowance shall be final. 
(ii) CERTAIN
EXCEPTIONS.—Clause (i) shall not 
apply with respect to any claim filed by a claimant 
after the date specified in the notice published under 
paragraph (2)(B)(i), and such claim may be considered 
by the receiver under subparagraph (B), if—
H. R. 4173—91 
(I) the claimant did not receive notice of the 
appointment of the receiver in time to file such 
claim before such date; and 
(II) such claim is filed in time to permit pay-
ment of such claim. 
(D) AUTHORITY TO DISALLOW CLAIMS.— 
(i) IN
GENERAL.—The Corporation may disallow 
any portion of any claim by a creditor or claim of 
a security, preference, setoff, or priority which is not 
proved to the satisfaction of the Corporation. 
(ii) PAYMENTS TO UNDERSECURED CREDITORS.—In 
the case of a claim against a covered financial company 
that is secured by any property or other asset of such 
covered financial company, the receiver— 
(I) may treat the portion of such claim which 
exceeds an amount equal to the fair market value 
of such property or other asset as an unsecured 
claim; and 
(II) may not make any payment with respect 
to such unsecured portion of the claim, other than 
in connection with the disposition of all claims 
of unsecured creditors of the covered financial com-
pany. 
(iii) EXCEPTIONS.—No provision of this paragraph 
shall apply with respect to— 
(I) any extension of credit from any Federal 
reserve bank, or the Corporation, to any covered 
financial company; or 
(II) subject to clause (ii), any legally enforce-
able and perfected security interest in the assets 
of the covered financial company securing any such 
extension of credit. 
(E) LEGAL EFFECT OF FILING.— 
(i) STATUTE OF LIMITATIONS TOLLED.—For purposes 
of any applicable statute of limitations, the filing of 
a claim with the receiver shall constitute a commence-
ment of an action. 
(ii) NO PREJUDICE TO OTHER ACTIONS.—Subject to 
paragraph (8), the filing of a claim with the receiver 
shall not prejudice any right of the claimant to continue 
any action which was filed before the date of appoint-
ment of the receiver for the covered financial company. 
(4) JUDICIAL DETERMINATION OF CLAIMS.— 
(A) IN GENERAL.—Subject to subparagraph (B), a claim-
ant may file suit on a claim (or continue an action com-
menced before the date of appointment of the Corporation 
as receiver) in the district or territorial court of the United 
States for the district within which the principal place 
of business of the covered financial company is located 
(and such court shall have jurisdiction to hear such claim). 
(B) TIMING.—A claim under subparagraph (A) may 
be filed before the end of the 60-day period beginning 
on the earlier of— 
(i) the end of the period described in paragraph 
(3)(A)(i) (or, if extended by agreement of the Corpora-
tion and the claimant, the period described in para-
graph (3)(A)(ii)) with respect to any claim against a
H. R. 4173—92 
covered financial company for which the Corporation 
is receiver; or 
(ii) the date of any notice of disallowance of such 
claim pursuant to paragraph (3)(A)(i). 
(C) STATUTE OF LIMITATIONS.—If any claimant fails 
to file suit on such claim (or to continue an action on 
such claim commenced before the date of appointment of 
the Corporation as receiver) prior to the end of the 60- 
day period described in subparagraph (B), the claim shall 
be deemed to be disallowed (other than any portion of 
such claim which was allowed by the receiver) as of the 
end of such period, such disallowance shall be final, and 
the claimant shall have no further rights or remedies with 
respect to such claim. 
(5) EXPEDITED DETERMINATION OF CLAIMS.— 
(A) PROCEDURE
REQUIRED.—The Corporation shall 
establish a procedure for expedited relief outside of the 
claims process established under paragraph (3), for any 
claimant that alleges— 
(i) having a legally valid and enforceable or per-
fected security interest in property of a covered finan-
cial company or control of any legally valid and enforce-
able security entitlement in respect of any asset held 
by the covered financial company for which the Cor-
poration has been appointed receiver; and 
(ii) that irreparable injury will occur if the claims 
procedure established under paragraph (3) is followed. 
(B) DETERMINATION PERIOD.—Prior to the end of the 
90-day period beginning on the date on which a claim 
is filed in accordance with the procedures established 
pursuant to subparagraph (A), the Corporation shall— 
(i) determine— 
(I) whether to allow or disallow such claim, 
or any portion thereof; or 
(II) whether such claim should be determined 
pursuant to the procedures established pursuant 
to paragraph (3); 
(ii) notify the claimant of the determination; and 
(iii) if the claim is disallowed, provide a statement 
of each reason for the disallowance and the procedure 
for obtaining a judicial determination. 
(C) PERIOD FOR FILING OR RENEWING SUIT.—Any claim-
ant who files a request for expedited relief shall be per-
mitted to file suit (or continue a suit filed before the date 
of appointment of the Corporation as receiver seeking a 
determination of the rights of the claimant with respect 
to such security interest (or such security entitlement) after 
the earlier of— 
(i) the end of the 90-day period beginning on the 
date of the filing of a request for expedited relief; 
or 
(ii) the date on which the Corporation denies the 
claim or a portion thereof. 
(D) STATUTE OF LIMITATIONS.—If an action described 
in subparagraph (C) is not filed, or the motion to renew 
a previously filed suit is not made, before the end of the 
30-day period beginning on the date on which such action
H. R. 4173—93 
or motion may be filed in accordance with subparagraph 
(C), the claim shall be deemed to be disallowed as of 
the end of such period (other than any portion of such 
claim which was allowed by the receiver), such disallowance 
shall be final, and the claimant shall have no further 
rights or remedies with respect to such claim. 
(E) LEGAL EFFECT OF FILING.— 
(i) STATUTE OF LIMITATIONS TOLLED.—For purposes 
of any applicable statute of limitations, the filing of 
a claim with the receiver shall constitute a commence-
ment of an action. 
(ii) NO PREJUDICE TO OTHER ACTIONS.—Subject to 
paragraph (8), the filing of a claim with the receiver 
shall not prejudice any right of the claimant to continue 
any action which was filed before the appointment 
of the Corporation as receiver for the covered financial 
company. 
(6) AGREEMENTS
AGAINST
INTEREST
OF
THE
RECEIVER.— 
No agreement that tends to diminish or defeat the interest 
of the Corporation as receiver in any asset acquired by the 
receiver under this section shall be valid against the receiver, 
unless such agreement— 
(A) is in writing; 
(B) was executed by an authorized officer or representa-
tive of the covered financial company, or confirmed in the 
ordinary course of business by the covered financial com-
pany; and 
(C) has been, since the time of its execution, an official 
record of the company or the party claiming under the 
agreement provides documentation, acceptable to the 
receiver, of such agreement and its authorized execution 
or confirmation by the covered financial company. 
(7) PAYMENT OF CLAIMS.— 
(A) IN GENERAL.—Subject to subparagraph (B), the Cor-
poration as receiver may, in its discretion and to the extent 
that funds are available, pay creditor claims, in such 
manner and amounts as are authorized under this section, 
which are— 
(i) allowed by the receiver; 
(ii) approved by the receiver pursuant to a final 
determination pursuant to paragraph (3) or (5), as 
applicable; or 
(iii) determined by the final judgment of a court 
of competent jurisdiction. 
(B) LIMITATION.—A creditor shall, in no event, receive 
less than the amount that the creditor is entitled to receive 
under paragraphs (2) and (3) of subsection (d), as 
applicable. 
(C) PAYMENT OF DIVIDENDS ON CLAIMS.—The Corpora-
tion as receiver may, in its sole discretion, and to the 
extent otherwise permitted by this section, pay dividends 
on proven claims at any time, and no liability shall attach 
to the Corporation as receiver, by reason of any such pay-
ment or for failure to pay dividends to a claimant whose 
claim is not proved at the time of any such payment. 
(D) RULEMAKING BY THE CORPORATION.—The Corpora-
tion may prescribe such rules, including definitions of
H. R. 4173—94 
terms, as the Corporation deems appropriate to establish 
an interest rate for or to make payments of post-insolvency 
interest to creditors holding proven claims against the 
receivership estate of a covered financial company, except 
that no such interest shall be paid until the Corporation 
as receiver has satisfied the principal amount of all creditor 
claims. 
(8) SUSPENSION OF LEGAL ACTIONS.— 
(A) IN GENERAL.—After the appointment of the Cor-
poration as receiver for a covered financial company, the 
Corporation may request a stay in any judicial action or 
proceeding in which such covered financial company is 
or becomes a party, for a period of not to exceed 90 days. 
(B) GRANT OF STAY BY ALL COURTS REQUIRED.—Upon 
receipt of a request by the Corporation pursuant to 
subparagraph (A), the court shall grant such stay as to 
all parties. 
(9) ADDITIONAL RIGHTS AND DUTIES.— 
(A) PRIOR FINAL ADJUDICATION.—The Corporation shall 
abide by any final, non-appealable judgment of any court 
of competent jurisdiction that was rendered before the 
appointment of the Corporation as receiver. 
(B) RIGHTS AND REMEDIES OF RECEIVER.—In the event 
of any appealable judgment, the Corporation as receiver 
shall— 
(i) have all the rights and remedies available to 
the covered financial company (before the date of 
appointment of the Corporation as receiver under sec-
tion 202) and the Corporation, including removal to 
Federal court and all appellate rights; and 
(ii) not be required to post any bond in order 
to pursue such remedies. 
(C) NO ATTACHMENT OR EXECUTION.—No attachment 
or execution may be issued by any court upon assets in 
the possession of the Corporation as receiver for a covered 
financial company. 
(D) LIMITATION ON JUDICIAL REVIEW.—Except as other-
wise provided in this title, no court shall have jurisdiction 
over— 
(i) any claim or action for payment from, or any 
action seeking a determination of rights with respect 
to, the assets of any covered financial company for 
which the Corporation has been appointed receiver, 
including any assets which the Corporation may 
acquire from itself as such receiver; or 
(ii) any claim relating to any act or omission of 
such covered financial company or the Corporation as 
receiver. 
(E) DISPOSITION OF ASSETS.—In exercising any right, 
power, privilege, or authority as receiver in connection 
with any covered financial company for which the Corpora-
tion is acting as receiver under this section, the Corporation 
shall, to the greatest extent practicable, conduct its oper-
ations in a manner that— 
(i) maximizes the net present value return from 
the sale or disposition of such assets;
H. R. 4173—95 
(ii) minimizes the amount of any loss realized in 
the resolution of cases; 
(iii) mitigates the potential for serious adverse 
effects to the financial system; 
(iv) ensures timely and adequate competition and 
fair and consistent treatment of offerors; and 
(v) prohibits discrimination on the basis of race, 
sex, or ethnic group in the solicitation and consider-
ation of offers. 
(10) STATUTE OF LIMITATIONS FOR ACTIONS BROUGHT BY 
RECEIVER.— 
(A) IN
GENERAL.—Notwithstanding any provision of 
any contract, the applicable statute of limitations with 
regard to any action brought by the Corporation as receiver 
for a covered financial company shall be— 
(i) in the case of any contract claim, the longer 
of— 
(I) the 6-year period beginning on the date 
on which the claim accrues; or 
(II) the period applicable under State law; and 
(ii) in the case of any tort claim, the longer of— 
(I) the 3-year period beginning on the date 
on which the claim accrues; or 
(II) the period applicable under State law. 
(B) DATE ON WHICH A CLAIM ACCRUES.—For purposes 
of subparagraph (A), the date on which the statute of 
limitations begins to run on any claim described in subpara-
graph (A) shall be the later of— 
(i) the date of the appointment of the Corporation 
as receiver under this title; or 
(ii) the date on which the cause of action accrues. 
(C) REVIVAL OF EXPIRED STATE CAUSES OF ACTION.— 
(i) IN
GENERAL.—In the case of any tort claim 
described in clause (ii) for which the applicable statute 
of limitations under State law has expired not more 
than 5 years before the date of appointment of the 
Corporation as receiver for a covered financial com-
pany, the Corporation may bring an action as receiver 
on such claim without regard to the expiration of the 
statute of limitations. 
(ii) CLAIMS DESCRIBED.—A tort claim referred to 
in clause (i) is a claim arising from fraud, intentional 
misconduct resulting in unjust enrichment, or inten-
tional misconduct resulting in substantial loss to the 
covered financial company. 
(11) AVOIDABLE TRANSFERS.— 
(A) FRAUDULENT
TRANSFERS.—The Corporation, as 
receiver for any covered financial company, may avoid a 
transfer of any interest of the covered financial company 
in property, or any obligation incurred by the covered finan-
cial company, that was made or incurred at or within 
2 years before the date on which the Corporation was 
appointed receiver, if— 
(i) the covered financial company voluntarily or 
involuntarily— 
(I) made such transfer or incurred such obliga-
tion with actual intent to hinder, delay, or defraud
H. R. 4173—96 
any entity to which the covered financial company 
was or became, on or after the date on which 
such transfer was made or such obligation was 
incurred, indebted; or 
(II) received less than a reasonably equivalent 
value in exchange for such transferor obligation; 
and 
(ii) the covered financial company voluntarily or 
involuntarily— 
(I) was insolvent on the date that such transfer 
was made or such obligation was incurred, or 
became insolvent as a result of such transfer or 
obligation; 
(II) was engaged in business or a transaction, 
or was about to engage in business or a trans-
action, for which any property remaining with the 
covered financial company was an unreasonably 
small capital; 
(III) intended to incur, or believed that the 
covered financial company would incur, debts that 
would be beyond the ability of the covered financial 
company to pay as such debts matured; or 
(IV) made such transfer to or for the benefit 
of an insider, or incurred such obligation to or 
for the benefit of an insider, under an employment 
contract and not in the ordinary course of business. 
(B) PREFERENTIAL
TRANSFERS.—The Corporation as 
receiver for any covered financial company may avoid a 
transfer of an interest of the covered financial company 
in property— 
(i) to or for the benefit of a creditor; 
(ii) for or on account of an antecedent debt that 
was owed by the covered financial company before 
the transfer was made; 
(iii) that was made while the covered financial 
company was insolvent; 
(iv) that was made— 
(I) 90 days or less before the date on which 
the Corporation was appointed receiver; or 
(II) more than 90 days, but less than 1 year 
before the date on which the Corporation was 
appointed receiver, if such creditor at the time 
of the transfer was an insider; and 
(v) that enables the creditor to receive more than 
the creditor would receive if— 
(I) the covered financial company had been 
liquidated under chapter 7 of the Bankruptcy 
Code; 
(II) the transfer had not been made; and 
(III) the creditor received payment of such debt 
to the extent provided by the provisions of chapter 
7 of the Bankruptcy Code. 
(C) POST-RECEIVERSHIP TRANSACTIONS.—The Corpora-
tion as receiver for any covered financial company may 
avoid a transfer of property of the receivership that 
occurred after the Corporation was appointed receiver that
H. R. 4173—97 
was not authorized under this title by the Corporation 
as receiver. 
(D) RIGHT OF RECOVERY.—To the extent that a transfer 
is avoided under subparagraph (A), (B), or (C), the Corpora-
tion may recover, for the benefit of the covered financial 
company, the property transferred or, if a court so orders, 
the value of such property (at the time of such transfer) 
from— 
(i) the initial transferee of such transfer or the 
person for whose benefit such transfer was made; or 
(ii) any immediate or mediate transferee of any 
such initial transferee. 
(E) RIGHTS OF TRANSFEREE OR OBLIGEE.—The Corpora-
tion may not recover under subparagraph (D)(ii) from— 
(i) any transferee that takes for value, including 
in satisfaction of or to secure a present or antecedent 
debt, in good faith, and without knowledge of the 
voidability of the transfer avoided; or 
(ii) any immediate or mediate good faith transferee 
of such transferee. 
(F) DEFENSES.—Subject to the other provisions of this 
title— 
(i) a transferee or obligee from which the Corpora-
tion seeks to recover a transfer or to avoid an obligation 
under subparagraph (A), (B), (C), or (D) shall have 
the same defenses available to a transferee or obligee 
from which a trustee seeks to recover a transfer or 
avoid an obligation under sections 547, 548, and 549 
of the Bankruptcy Code; and 
(ii) the authority of the Corporation to recover 
a transfer or avoid an obligation shall be subject to 
subsections (b) and (c) of section 546, section 547(c), 
and section 548(c) of the Bankruptcy Code. 
(G) RIGHTS UNDER THIS SECTION.—The rights of the 
Corporation as receiver under this section shall be superior 
to any rights of a trustee or any other party (other than 
a Federal agency) under the Bankruptcy Code. 
(H) RULES OF CONSTRUCTION; DEFINITIONS.—For pur-
poses of— 
(i) subparagraphs (A) and (B)— 
(I) the term ‘‘insider’’ has the same meaning 
as in section 101(31) of the Bankruptcy Code; 
(II) a transfer is made when such transfer 
is so perfected that a bona fide purchaser from 
the covered financial company against whom 
applicable law permits such transfer to be per-
fected cannot acquire an interest in the property 
transferred that is superior to the interest in such 
property of the transferee, but if such transfer 
is not so perfected before the date on which the 
Corporation is appointed as receiver for the cov-
ered financial company, such transfer is made 
immediately before the date of such appointment; 
and 
(III) the term ‘‘value’’ means property, or satis-
faction or securing of a present or antecedent debt 
of the covered financial company, but does not
H. R. 4173—98 
include an unperformed promise to furnish support 
to the covered financial company; and 
(ii) subparagraph (B)— 
(I) the covered financial company is presumed 
to have been insolvent on and during the 90-day 
period immediately preceding the date of appoint-
ment of the Corporation as receiver; and 
(II) the term ‘‘insolvent’’ has the same meaning 
as in section 101(32) of the Bankruptcy Code. 
(12) SETOFF.— 
(A) GENERALLY.—Except as otherwise provided in this 
title, any right of a creditor to offset a mutual debt owed 
by the creditor to any covered financial company that arose 
before the Corporation was appointed as receiver for the 
covered financial company against a claim of such creditor 
may be asserted if enforceable under applicable noninsol-
vency law, except to the extent that— 
(i) the claim of the creditor against the covered 
financial company is disallowed; 
(ii) the claim was transferred, by an entity other 
than the covered financial company, to the creditor— 
(I) after the Corporation was appointed as 
receiver of the covered financial company; or 
(II)(aa) after the 90-day period preceding the 
date on which the Corporation was appointed as 
receiver for the covered financial company; and 
(bb) while the covered financial company was 
insolvent (except for a setoff in connection with 
a qualified financial contract); or 
(iii) the debt owed to the covered financial company 
was incurred by the covered financial company— 
(I) after the 90-day period preceding the date 
on which the Corporation was appointed as 
receiver for the covered financial company; 
(II) while the covered financial company was 
insolvent; and 
(III) for the purpose of obtaining a right of 
setoff against the covered financial company 
(except for a setoff in connection with a qualified 
financial contract). 
(B) INSUFFICIENCY.— 
(i) IN GENERAL.—Except with respect to a setoff 
in connection with a qualified financial contract, if 
a creditor offsets a mutual debt owed to the covered 
financial company against a claim of the covered finan-
cial company on or within the 90-day period preceding 
the date on which the Corporation is appointed as 
receiver for the covered financial company, the Cor-
poration may recover from the creditor the amount 
so offset, to the extent that any insufficiency on the 
date of such setoff is less than the insufficiency on 
the later of— 
(I) the date that is 90 days before the date 
on which the Corporation is appointed as receiver 
for the covered financial company; or 
(II) the first day on which there is an insuffi-
ciency during the 90-day period preceding the date
H. R. 4173—99 
on which the Corporation is appointed as receiver 
for the covered financial company. 
(ii) 
DEFINITION
OF
INSUFFICIENCY.—In 
this 
subparagraph, the term ‘‘insufficiency’’ means the 
amount, if any, by which a claim against the covered 
financial company exceeds a mutual debt owed to the 
covered financial company by the holder of such claim. 
(C) INSOLVENCY.—The term ‘‘insolvent’’ has the same 
meaning as in section 101(32) of the Bankruptcy Code. 
(D) PRESUMPTION
OF
INSOLVENCY.—For purposes of 
this paragraph, the covered financial company is presumed 
to have been insolvent on and during the 90-day period 
preceding the date of appointment of the Corporation as 
receiver. 
(E) LIMITATION.—Nothing in this paragraph (12) shall 
be the basis for any right of setoff where no such right 
exists under applicable noninsolvency law. 
(F) PRIORITY CLAIM.—Except as otherwise provided in 
this title, the Corporation as receiver for the covered finan-
cial company may sell or transfer any assets free and 
clear of the setoff rights of any party, except that such 
party shall be entitled to a claim, subordinate to the claims 
payable under subparagraphs (A), (B), (C), and (D) of sub-
section (b)(1), but senior to all other unsecured liabilities 
defined in subsection (b)(1)(E), in an amount equal to the 
value of such setoff rights. 
(13) ATTACHMENT
OF
ASSETS
AND
OTHER
INJUNCTIVE 
RELIEF.—Subject to paragraph (14), any court of competent 
jurisdiction may, at the request of the Corporation as receiver 
for a covered financial company, issue an order in accordance 
with Rule 65 of the Federal Rules of Civil Procedure, including 
an order placing the assets of any person designated by the 
Corporation under the control of the court and appointing a 
trustee to hold such assets. 
(14) STANDARDS.— 
(A) SHOWING.—Rule 65 of the Federal Rules of Civil 
Procedure shall apply with respect to any proceeding under 
paragraph (13), without regard to the requirement that 
the applicant show that the injury, loss, or damage is 
irreparable and immediate. 
(B) STATE PROCEEDING.—If, in the case of any pro-
ceeding in a State court, the court determines that rules 
of civil procedure available under the laws of the State 
provide substantially similar protections of the right of 
the parties to due process as provided under Rule 65 (as 
modified with respect to such proceeding by subparagraph 
(A)), the relief sought by the Corporation pursuant to para-
graph (14) may be requested under the laws of such State. 
(15) TREATMENT OF CLAIMS ARISING FROM BREACH OF CON-
TRACTS EXECUTED BY THE CORPORATION AS RECEIVER.—Notwith-
standing any other provision of this title, any final and non- 
appealable judgment for monetary damages entered against 
the Corporation as receiver for a covered financial company 
for the breach of an agreement executed or approved by the 
Corporation after the date of its appointment shall be paid 
as an administrative expense of the receiver. Nothing in this 
paragraph shall be construed to limit the power of a receiver
H. R. 4173—100 
to exercise any rights under contract or law, including to termi-
nate, breach, cancel, or otherwise discontinue such agreement. 
(16) ACCOUNTING
AND
RECORDKEEPING
REQUIREMENTS.— 
(A) IN GENERAL.—The Corporation as receiver for a 
covered financial company shall, consistent with the 
accounting and reporting practices and procedures estab-
lished by the Corporation, maintain a full accounting of 
each receivership or other disposition of any covered finan-
cial company. 
(B) ANNUAL ACCOUNTING OR REPORT.—With respect to 
each receivership to which the Corporation is appointed, 
the Corporation shall make an annual accounting or report, 
as appropriate, available to the Secretary and the Comp-
troller General of the United States. 
(C) AVAILABILITY OF REPORTS.—Any report prepared 
pursuant to subparagraph (B) and section 203(c)(3) shall 
be made available to the public by the Corporation. 
(D) RECORDKEEPING REQUIREMENT.— 
(i) IN GENERAL.—The Corporation shall prescribe 
such regulations and establish such retention schedules 
as are necessary to maintain the documents and 
records of the Corporation generated in exercising the 
authorities of this title and the records of a covered 
financial company for which the Corporation is 
appointed receiver, with due regard for— 
(I) the avoidance of duplicative record reten-
tion; and 
(II) the expected evidentiary needs of the Cor-
poration as receiver for a covered financial com-
pany and the public regarding the records of cov-
ered financial companies. 
(ii) RETENTION
OF
RECORDS.—Unless otherwise 
required by applicable Federal law or court order, the 
Corporation may not, at any time, destroy any records 
that are subject to clause (i). 
(iii) RECORDS DEFINED.—As used in this subpara-
graph, the terms ‘‘records’’ and ‘‘records of a covered 
financial company’’ mean any document, book, paper, 
map, photograph, microfiche, microfilm, computer or 
electronically-created record generated or maintained 
by the covered financial company in the course of and 
necessary to its transaction of business. 
(b) PRIORITY OF EXPENSES AND UNSECURED CLAIMS.— 
(1) IN GENERAL.—Unsecured claims against a covered finan-
cial company, or the Corporation as receiver for such covered 
financial company under this section, that are proven to the 
satisfaction of the receiver shall have priority in the following 
order: 
(A) Administrative expenses of the receiver. 
(B) Any amounts owed to the United States, unless 
the United States agrees or consents otherwise. 
(C) Wages, salaries, or commissions, including vaca-
tion, severance, and sick leave pay earned by an individual 
(other than an individual described in subparagraph (G)), 
but only to the extent of $11,725 for each individual (as 
indexed for inflation, by regulation of the Corporation)
H. R. 4173—101 
earned not later than 180 days before the date of appoint-
ment of the Corporation as receiver. 
(D) Contributions owed to employee benefit plans 
arising from services rendered not later than 180 days 
before the date of appointment of the Corporation as 
receiver, to the extent of the number of employees covered 
by each such plan, multiplied by $11,725 (as indexed for 
inflation, by regulation of the Corporation), less the aggre-
gate amount paid to such employees under subparagraph 
(C), plus the aggregate amount paid by the receivership 
on behalf of such employees to any other employee benefit 
plan. 
(E) Any other general or senior liability of the covered 
financial company (which is not a liability described under 
subparagraph (F), (G), or (H)). 
(F) Any obligation subordinated to general creditors 
(which is not an obligation described under subparagraph 
(G) or (H)). 
(G) Any wages, salaries, or commissions, including 
vacation, severance, and sick leave pay earned, owed to 
senior executives and directors of the covered financial 
company. 
(H) Any obligation to shareholders, members, general 
partners, limited partners, or other persons, with interests 
in the equity of the covered financial company arising 
as a result of their status as shareholders, members, gen-
eral partners, limited partners, or other persons with 
interests in the equity of the covered financial company. 
(2) POST-RECEIVERSHIP FINANCING PRIORITY.—In the event 
that the Corporation, as receiver for a covered financial com-
pany, is unable to obtain unsecured credit for the covered 
financial company from commercial sources, the Corporation 
as receiver may obtain credit or incur debt on the part of 
the covered financial company, which shall have priority over 
any or all administrative expenses of the receiver under para-
graph (1)(A). 
(3) CLAIMS OF THE UNITED STATES.—Unsecured claims of 
the United States shall, at a minimum, have a higher priority 
than liabilities of the covered financial company that count 
as regulatory capital. 
(4) CREDITORS
SIMILARLY
SITUATED.—All claimants of a 
covered financial company that are similarly situated under 
paragraph (1) shall be treated in a similar manner, except 
that the Corporation may take any action (including making 
payments, subject to subsection (o)(1)(D)(i)) that does not 
comply with this subsection, if— 
(A) the Corporation determines that such action is 
necessary— 
(i) to maximize the value of the assets of the 
covered financial company; 
(ii) to initiate and continue operations essential 
to implementation of the receivership or any bridge 
financial company; 
(iii) to maximize the present value return from 
the sale or other disposition of the assets of the covered 
financial company; or
H. R. 4173—102 
(iv) to minimize the amount of any loss realized 
upon the sale or other disposition of the assets of 
the covered financial company; and 
(B) all claimants that are similarly situated under 
paragraph (1) receive not less than the amount provided 
in paragraphs (2) and (3) of subsection (d). 
(5) SECURED CLAIMS UNAFFECTED.—This section shall not 
affect secured claims or security entitlements in respect of 
assets or property held by the covered financial company, except 
to the extent that the security is insufficient to satisfy the 
claim, and then only with regard to the difference between 
the claim and the amount realized from the security. 
(6) PRIORITY OF EXPENSES AND UNSECURED CLAIMS IN THE 
ORDERLY LIQUIDATION OF SIPC MEMBER.—Where the Corporation 
is appointed as receiver for a covered broker or dealer, 
unsecured claims against such covered broker or dealer, or 
the Corporation as receiver for such covered broker or dealer 
under this section, that are proven to the satisfaction of the 
receiver under section 205(e), shall have the priority prescribed 
in paragraph (1), except that— 
(A) SIPC shall be entitled to recover administrative 
expenses incurred in performing its responsibilities under 
section 205 on an equal basis with the Corporation, in 
accordance with paragraph (1)(A); 
(B) the Corporation shall be entitled to recover any 
amounts paid to customers or to SIPC pursuant to section 
205(f), in accordance with paragraph (1)(B); 
(C) SIPC shall be entitled to recover any amounts 
paid out of the SIPC Fund to meet its obligations under 
section 205 and under the Securities Investor Protection 
Act of 1970 (15 U.S.C. 78aaa et seq.), which claim shall 
be subordinate to the claims payable under subparagraphs 
(A) and (B) of paragraph (1), but senior to all other claims; 
and 
(D) the Corporation may, after paying any proven 
claims to customers under section 205 and the Securities 
Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), 
and as provided above, pay dividends on other proven 
claims, in its discretion, and to the extent that funds are 
available, in accordance with the priorities set forth in 
paragraph (1). 
(c) PROVISIONS RELATING TO CONTRACTS ENTERED INTO BEFORE 
APPOINTMENT OF RECEIVER.— 
(1) AUTHORITY TO REPUDIATE CONTRACTS.—In addition to 
any other rights that a receiver may have, the Corporation 
as receiver for any covered financial company may disaffirm 
or repudiate any contract or lease— 
(A) to which the covered financial company is a party; 
(B) the performance of which the Corporation as 
receiver, in the discretion of the Corporation, determines 
to be burdensome; and 
(C) the disaffirmance or repudiation of which the Cor-
poration as receiver determines, in the discretion of the 
Corporation, will promote the orderly administration of 
the affairs of the covered financial company. 
(2) TIMING OF REPUDIATION.—The Corporation, as receiver 
for any covered financial company, shall determine whether
H. R. 4173—103 
or not to exercise the rights of repudiation under this section 
within a reasonable period of time. 
(3) CLAIMS FOR DAMAGES FOR REPUDIATION.— 
(A) IN GENERAL.—Except as provided in paragraphs 
(4), (5), and (6) and in subparagraphs (C), (D), and (E) 
of this paragraph, the liability of the Corporation as 
receiver 
for 
a 
covered 
financial 
company 
for 
the 
disaffirmance or repudiation of any contract pursuant to 
paragraph (1) shall be— 
(i) limited to actual direct compensatory damages; 
and 
(ii) determined as of— 
(I) the date of the appointment of the Corpora-
tion as receiver; or 
(II) in the case of any contract or agreement 
referred to in paragraph (8), the date of the 
disaffirmance or repudiation of such contract or 
agreement. 
(B) NO LIABILITY FOR OTHER DAMAGES.—For purposes 
of subparagraph (A), the term ‘‘actual direct compensatory 
damages’’ does not include— 
(i) punitive or exemplary damages; 
(ii) damages for lost profits or opportunity; or 
(iii) damages for pain and suffering. 
(C) MEASURE OF DAMAGES FOR REPUDIATION OF QUALI-
FIED FINANCIAL CONTRACTS.—In the case of any qualified 
financial contract or agreement to which paragraph (8) 
applies, compensatory damages shall be— 
(i) deemed to include normal and reasonable costs 
of cover or other reasonable measures of damages uti-
lized in the industries for such contract and agreement 
claims; and 
(ii) paid in accordance with this paragraph and 
subsection (d), except as otherwise specifically provided 
in this subsection. 
(D) MEASURE
OF
DAMAGES
FOR
REPUDIATION
OR 
DISAFFIRMANCE OF DEBT OBLIGATION.—In the case of any 
debt for borrowed money or evidenced by a security, actual 
direct compensatory damages shall be no less than the 
amount lent plus accrued interest plus any accreted 
original issue discount as of the date the Corporation was 
appointed receiver of the covered financial company and, 
to the extent that an allowed secured claim is secured 
by property the value of which is greater than the amount 
of such claim and any accrued interest through the date 
of repudiation or disaffirmance, such accrued interest 
pursuant to paragraph (1). 
(E) MEASURE
OF
DAMAGES
FOR
REPUDIATION
OR 
DISAFFIRMANCE OF CONTINGENT OBLIGATION.—In the case 
of any contingent obligation of a covered financial company 
consisting of any obligation under a guarantee, letter of 
credit, loan commitment, or similar credit obligation, the 
Corporation may, by rule or regulation, prescribe that 
actual direct compensatory damages shall be no less than 
the estimated value of the claim as of the date the Corpora-
tion was appointed receiver of the covered financial com-
pany, as such value is measured based on the likelihood
H. R. 4173—104 
that such contingent claim would become fixed and the 
probable magnitude thereof. 
(4) LEASES UNDER WHICH THE COVERED FINANCIAL COMPANY 
IS THE LESSEE.— 
(A) IN GENERAL.—If the Corporation as receiver dis-
affirms or repudiates a lease under which the covered 
financial company is the lessee, the receiver shall not be 
liable for any damages (other than damages determined 
pursuant to subparagraph (B)) for the disaffirmance or 
repudiation of such lease. 
(B) PAYMENTS
OF
RENT.—Notwithstanding subpara-
graph (A), the lessor under a lease to which subparagraph 
(A) would otherwise apply shall— 
(i) be entitled to the contractual rent accruing 
before the later of the date on which— 
(I) the notice of disaffirmance or repudiation 
is mailed; or 
(II) the disaffirmance or repudiation becomes 
effective, unless the lessor is in default or breach 
of the terms of the lease; 
(ii) have no claim for damages under any accelera-
tion clause or other penalty provision in the lease; 
and 
(iii) have a claim for any unpaid rent, subject 
to all appropriate offsets and defenses, due as of the 
date of the appointment which shall be paid in accord-
ance with this paragraph and subsection (d). 
(5) LEASES UNDER WHICH THE COVERED FINANCIAL COMPANY 
IS THE LESSOR.— 
(A) IN GENERAL.—If the Corporation as receiver for 
a covered financial company repudiates an unexpired writ-
ten lease of real property of the covered financial company 
under which the covered financial company is the lessor 
and the lessee is not, as of the date of such repudiation, 
in default, the lessee under such lease may either— 
(i) treat the lease as terminated by such repudi-
ation; or 
(ii) remain in possession of the leasehold interest 
for the balance of the term of the lease, unless the 
lessee defaults under the terms of the lease after the 
date of such repudiation. 
(B) PROVISIONS APPLICABLE TO LESSEE REMAINING IN 
POSSESSION.—If any lessee under a lease described in 
subparagraph (A) remains in possession of a leasehold 
interest pursuant to clause (ii) of subparagraph (A)— 
(i) the lessee— 
(I) shall continue to pay the contractual rent 
pursuant to the terms of the lease after the date 
of the repudiation of such lease; and 
(II) may offset against any rent payment which 
accrues after the date of the repudiation of the 
lease, any damages which accrue after such date 
due to the nonperformance of any obligation of 
the covered financial company under the lease 
after such date; and 
(ii) the Corporation as receiver shall not be liable 
to the lessee for any damages arising after such date
H. R. 4173—105 
as a result of the repudiation, other than the amount 
of any offset allowed under clause (i)(II). 
(6) CONTRACTS FOR THE SALE OF REAL PROPERTY.— 
(A) IN GENERAL.—If the receiver repudiates any con-
tract (which meets the requirements of subsection (a)(6)) 
for the sale of real property, and the purchaser of such 
real property under such contract is in possession and 
is not, as of the date of such repudiation, in default, such 
purchaser may either— 
(i) treat the contract as terminated by such repudi-
ation; or 
(ii) remain in possession of such real property. 
(B) PROVISIONS APPLICABLE TO PURCHASER REMAINING 
IN POSSESSION.—If any purchaser of real property under 
any contract described in subparagraph (A) remains in 
possession of such property pursuant to clause (ii) of 
subparagraph (A)— 
(i) the purchaser— 
(I) shall continue to make all payments due 
under the contract after the date of the repudiation 
of the contract; and 
(II) may offset against any such payments any 
damages which accrue after such date due to the 
nonperformance (after such date) of any obligation 
of the covered financial company under the con-
tract; and 
(ii) the Corporation as receiver shall— 
(I) not be liable to the purchaser for any dam-
ages arising after such date as a result of the 
repudiation, other than the amount of any offset 
allowed under clause (i)(II); 
(II) deliver title to the purchaser in accordance 
with the provisions of the contract; and 
(III) have no obligation under the contract 
other than the performance required under sub-
clause (II). 
(C) ASSIGNMENT AND SALE ALLOWED.— 
(i) IN GENERAL.—No provision of this paragraph 
shall be construed as limiting the right of the Corpora-
tion as receiver to assign the contract described in 
subparagraph (A) and sell the property, subject to the 
contract and the provisions of this paragraph. 
(ii) NO LIABILITY AFTER ASSIGNMENT AND SALE.— 
If an assignment and sale described in clause (i) is 
consummated, the Corporation as receiver shall have 
no further liability under the contract described in 
subparagraph (A) or with respect to the real property 
which was the subject of such contract. 
(7) PROVISIONS APPLICABLE TO SERVICE CONTRACTS.— 
(A) SERVICES
PERFORMED
BEFORE
APPOINTMENT.—In 
the case of any contract for services between any person 
and any covered financial company for which the Corpora-
tion has been appointed receiver, any claim of such person 
for services performed before the date of appointment shall 
be— 
(i) a claim to be paid in accordance with sub-
sections (a), (b), and (d); and
H. R. 4173—106 
(ii) deemed to have arisen as of the date on which 
the receiver was appointed. 
(B) SERVICES
PERFORMED
AFTER
APPOINTMENT
AND 
PRIOR
TO
REPUDIATION.—If, in the case of any contract 
for services described in subparagraph (A), the Corporation 
as receiver accepts performance by the other person before 
making any determination to exercise the right of repudi-
ation of such contract under this section— 
(i) the other party shall be paid under the terms 
of the contract for the services performed; and 
(ii) the amount of such payment shall be treated 
as an administrative expense of the receivership. 
(C) ACCEPTANCE OF PERFORMANCE NO BAR TO SUBSE-
QUENT REPUDIATION.—The acceptance by the Corporation 
as receiver for services referred to in subparagraph (B) 
in connection with a contract described in subparagraph 
(B) shall not affect the right of the Corporation as receiver 
to repudiate such contract under this section at any time 
after such performance. 
(8) CERTAIN QUALIFIED FINANCIAL CONTRACTS.— 
(A) RIGHTS OF PARTIES TO CONTRACTS.—Subject to sub-
section (a)(8) and paragraphs (9) and (10) of this subsection, 
and notwithstanding any other provision of this section, 
any other provision of Federal law, or the law of any 
State, no person shall be stayed or prohibited from exer-
cising— 
(i) any right that such person has to cause the 
termination, liquidation, or acceleration of any quali-
fied financial contract with a covered financial company 
which arises upon the date of appointment of the Cor-
poration as receiver for such covered financial company 
or at any time after such appointment; 
(ii) any right under any security agreement or 
arrangement or other credit enhancement related to 
one or more qualified financial contracts described in 
clause (i); or 
(iii) any right to offset or net out any termination 
value, payment amount, or other transfer obligation 
arising under or in connection with 1 or more contracts 
or agreements described in clause (i), including any 
master agreement for such contracts or agreements. 
(B) APPLICABILITY OF OTHER PROVISIONS.—Subsection 
(a)(8) shall apply in the case of any judicial action or 
proceeding brought against the Corporation as receiver 
referred to in subparagraph (A), or the subject covered 
financial company, by any party to a contract or agreement 
described in subparagraph (A)(i) with such covered finan-
cial company. 
(C) CERTAIN TRANSFERS NOT AVOIDABLE.— 
(i) 
IN
GENERAL.—Notwithstanding 
subsection 
(a)(11), (a)(12), or (c)(12), section 5242 of the Revised 
Statutes of the United States, or any other provision 
of Federal or State law relating to the avoidance of 
preferential or fraudulent transfers, the Corporation, 
whether acting as the Corporation or as receiver for 
a covered financial company, may not avoid any 
transfer of money or other property in connection with
H. R. 4173—107 
any qualified financial contract with a covered financial 
company. 
(ii) EXCEPTION FOR CERTAIN TRANSFERS.—Clause 
(i) shall not apply to any transfer of money or other 
property in connection with any qualified financial con-
tract with a covered financial company if the transferee 
had actual intent to hinder, delay, or defraud such 
company, the creditors of such company, or the Cor-
poration as receiver appointed for such company. 
(D) CERTAIN CONTRACTS AND AGREEMENTS DEFINED.— 
For purposes of this subsection, the following definitions 
shall apply: 
(i) QUALIFIED
FINANCIAL
CONTRACT.—The term 
‘‘qualified financial contract’’ means any securities con-
tract, commodity contract, forward contract, repurchase 
agreement, swap agreement, and any similar agree-
ment that the Corporation determines by regulation, 
resolution, or order to be a qualified financial contract 
for purposes of this paragraph. 
(ii) SECURITIES CONTRACT.—The term ‘‘securities 
contract’’— 
(I) means a contract for the purchase, sale, 
or loan of a security, a certificate of deposit, a 
mortgage loan, any interest in a mortgage loan, 
a group or index of securities, certificates of 
deposit, or mortgage loans or interests therein 
(including any interest therein or based on the 
value thereof), or any option on any of the fore-
going, including any option to purchase or sell 
any such security, certificate of deposit, mortgage 
loan, interest, group or index, or option, and 
including any repurchase or reverse repurchase 
transaction on any such security, certificate of 
deposit, mortgage loan, interest, group or index, 
or option (whether or not such repurchase or 
reverse repurchase transaction is a ‘‘repurchase 
agreement’’, as defined in clause (v)); 
(II) does not include any purchase, sale, or 
repurchase obligation under a participation in a 
commercial mortgage loan unless the Corporation 
determines by regulation, resolution, or order to 
include any such agreement within the meaning 
of such term; 
(III) means any option entered into on a 
national securities exchange relating to foreign 
currencies; 
(IV) means the guarantee (including by nova-
tion) by or to any securities clearing agency of 
any settlement of cash, securities, certificates of 
deposit, mortgage loans or interests therein, group 
or index of securities, certificates of deposit or 
mortgage loans or interests therein (including any 
interest therein or based on the value thereof) 
or an option on any of the foregoing, including 
any option to purchase or sell any such security, 
certificate of deposit, mortgage loan, interest, 
group or index, or option (whether or not such
H. R. 4173—108 
settlement is in connection with any agreement 
or transaction referred to in subclauses (I) through 
(XII) (other than subclause (II))); 
(V) means any margin loan; 
(VI) means any extension of credit for the 
clearance or settlement of securities transactions; 
(VII) means any loan transaction coupled with 
a securities collar transaction, any prepaid securi-
ties forward transaction, or any total return swap 
transaction coupled with a securities sale trans-
action; 
(VIII) means any other agreement or trans-
action that is similar to any agreement or trans-
action referred to in this clause; 
(IX) means any combination of the agreements 
or transactions referred to in this clause; 
(X) means any option to enter into any agree-
ment or transaction referred to in this clause; 
(XI) means a master agreement that provides 
for an agreement or transaction referred to in any 
of subclauses (I) through (X), other than subclause 
(II), together with all supplements to any such 
master agreement, without regard to whether the 
master agreement provides for an agreement or 
transaction that is not a securities contract under 
this clause, except that the master agreement shall 
be considered to be a securities contract under 
this clause only with respect to each agreement 
or transaction under the master agreement that 
is referred to in any of subclauses (I) through 
(X), other than subclause (II); and 
(XII) means any security agreement or 
arrangement or other credit enhancement related 
to any agreement or transaction referred to in 
this clause, including any guarantee or reimburse-
ment obligation in connection with any agreement 
or transaction referred to in this clause. 
(iii) COMMODITY CONTRACT.—The term ‘‘commodity 
contract’’ means— 
(I) with respect to a futures commission mer-
chant, a contract for the purchase or sale of a 
commodity for future delivery on, or subject to 
the rules of, a contract market or board of trade; 
(II) with respect to a foreign futures commis-
sion merchant, a foreign future; 
(III) with respect to a leverage transaction 
merchant, a leverage transaction; 
(IV) with respect to a clearing organization, 
a contract for the purchase or sale of a commodity 
for future delivery on, or subject to the rules of, 
a contract market or board of trade that is cleared 
by such clearing organization, or commodity option 
traded on, or subject to the rules of, a contract 
market or board of trade that is cleared by such 
clearing organization; 
(V) with respect to a commodity options dealer, 
a commodity option;
H. R. 4173—109 
(VI) any other agreement or transaction that 
is similar to any agreement or transaction referred 
to in this clause; 
(VII) any combination of the agreements or 
transactions referred to in this clause; 
(VIII) any option to enter into any agreement 
or transaction referred to in this clause; 
(IX) a master agreement that provides for an 
agreement or transaction referred to in any of 
subclauses (I) through (VIII), together with all 
supplements to any such master agreement, with-
out regard to whether the master agreement pro-
vides for an agreement or transaction that is not 
a commodity contract under this clause, except 
that the master agreement shall be considered 
to be a commodity contract under this clause only 
with respect to each agreement or transaction 
under the master agreement that is referred to 
in any of subclauses (I) through (VIII); or 
(X) any security agreement or arrangement 
or other credit enhancement related to any agree-
ment or transaction referred to in this clause, 
including any guarantee or reimbursement obliga-
tion in connection with any agreement or trans-
action referred to in this clause. 
(iv) FORWARD CONTRACT.—The term ‘‘forward con-
tract’’ means— 
(I) a contract (other than a commodity con-
tract) for the purchase, sale, or transfer of a com-
modity or any similar good, article, service, right, 
or interest which is presently or in the future 
becomes the subject of dealing in the forward con-
tract trade, or product or byproduct thereof, with 
a maturity date that is more than 2 days after 
the date on which the contract is entered into, 
including a repurchase or reverse repurchase 
transaction (whether or not such repurchase or 
reverse repurchase transaction is a ‘‘repurchase 
agreement’’, as defined in clause (v)), consignment, 
lease, swap, hedge transaction, deposit, loan, 
option, allocated transaction, unallocated trans-
action, or any other similar agreement; 
(II) any combination of agreements or trans-
actions referred to in subclauses (I) and (III); 
(III) any option to enter into any agreement 
or transaction referred to in subclause (I) or (II); 
(IV) a master agreement that provides for an 
agreement or transaction referred to in subclause 
(I), (II), or (III), together with all supplements 
to any such master agreement, without regard to 
whether the master agreement provides for an 
agreement or transaction that is not a forward 
contract under this clause, except that the master 
agreement shall be considered to be a forward 
contract under this clause only with respect to 
each agreement or transaction under the master
H. R. 4173—110 
agreement that is referred to in subclause (I), (II), 
or (III); or 
(V) any security agreement or arrangement 
or other credit enhancement related to any agree-
ment or transaction referred to in subclause (I), 
(II), (III), or (IV), including any guarantee or 
reimbursement obligation in connection with any 
agreement or transaction referred to in any such 
subclause. 
(v) 
REPURCHASE
AGREEMENT.—The 
term 
‘‘repurchase agreement’’ (which definition also applies 
to a reverse repurchase agreement)— 
(I) means an agreement, including related 
terms, which provides for the transfer of one or 
more certificates of deposit, mortgage related secu-
rities (as such term is defined in section 3 of the 
Securities Exchange Act of 1934), mortgage loans, 
interests in mortgage-related securities or mort-
gage loans, eligible bankers’ acceptances, qualified 
foreign government securities (which, for purposes 
of this clause, means a security that is a direct 
obligation of, or that is fully guaranteed by, the 
central government of a member of the Organiza-
tion for Economic Cooperation and Development, 
as determined by regulation or order adopted by 
the Board of Governors), or securities that are 
direct obligations of, or that are fully guaranteed 
by, the United States or any agency of the United 
States against the transfer of funds by the trans-
feree of such certificates of deposit, eligible 
bankers’ acceptances, securities, mortgage loans, 
or interests with a simultaneous agreement by 
such transferee to transfer to the transferor thereof 
certificates of deposit, eligible bankers’ accept-
ances, securities, mortgage loans, or interests as 
described above, at a date certain not later than 
1 year after such transfers or on demand, against 
the transfer of funds, or any other similar agree-
ment; 
(II) does not include any repurchase obligation 
under a participation in a commercial mortgage 
loan, unless the Corporation determines, by regula-
tion, resolution, or order to include any such 
participation within the meaning of such term; 
(III) means any combination of agreements 
or transactions referred to in subclauses (I) and 
(IV); 
(IV) means any option to enter into any agree-
ment or transaction referred to in subclause (I) 
or (III); 
(V) means a master agreement that provides 
for an agreement or transaction referred to in sub-
clause (I), (III), or (IV), together with all supple-
ments to any such master agreement, without 
regard to whether the master agreement provides 
for an agreement or transaction that is not a 
repurchase agreement under this clause, except
H. R. 4173—111 
that the master agreement shall be considered 
to be a repurchase agreement under this subclause 
only with respect to each agreement or transaction 
under the master agreement that is referred to 
in subclause (I), (III), or (IV); and 
(VI) means any security agreement or arrange-
ment or other credit enhancement related to any 
agreement or transaction referred to in subclause 
(I), (III), (IV), or (V), including any guarantee or 
reimbursement obligation in connection with any 
agreement or transaction referred to in any such 
subclause. 
(vi) SWAP
AGREEMENT.—The term ‘‘swap agree-
ment’’ means— 
(I) any agreement, including the terms and 
conditions incorporated by reference in any such 
agreement, which is an interest rate swap, option, 
future, or forward agreement, including a rate 
floor, rate cap, rate collar, cross-currency rate 
swap, and basis swap; a spot, same day-tomorrow, 
tomorrow-next, forward, or other foreign exchange, 
precious metals, or other commodity agreement; 
a currency swap, option, future, or forward agree-
ment; an equity index or equity swap, option, 
future, or forward agreement; a debt index or debt 
swap, option, future, or forward agreement; a total 
return, credit spread or credit swap, option, future, 
or forward agreement; a commodity index or com-
modity swap, option, future, or forward agreement; 
weather swap, option, future, or forward agree-
ment; an emissions swap, option, future, or for-
ward agreement; or an inflation swap, option, 
future, or forward agreement; 
(II) any agreement or transaction that is 
similar to any other agreement or transaction 
referred to in this clause and that is of a type 
that has been, is presently, or in the future 
becomes, the subject of recurrent dealings in the 
swap or other derivatives markets (including terms 
and conditions incorporated by reference in such 
agreement) and that is a forward, swap, future, 
option, or spot transaction on one or more rates, 
currencies, commodities, equity securities or other 
equity instruments, debt securities or other debt 
instruments, quantitative measures associated 
with an occurrence, extent of an occurrence, or 
contingency associated with a financial, commer-
cial, or economic consequence, or economic or 
financial indices or measures of economic or finan-
cial risk or value; 
(III) any combination of agreements or trans-
actions referred to in this clause; 
(IV) any option to enter into any agreement 
or transaction referred to in this clause; 
(V) a master agreement that provides for an 
agreement or transaction referred to in subclause 
(I), (II), (III), or (IV), together with all supplements
H. R. 4173—112 
to any such master agreement, without regard to 
whether the master agreement contains an agree-
ment or transaction that is not a swap agreement 
under this clause, except that the master agree-
ment shall be considered to be a swap agreement 
under this clause only with respect to each agree-
ment or transaction under the master agreement 
that is referred to in subclause (I), (II), (III), or 
(IV); and 
(VI) any security agreement or arrangement 
or other credit enhancement related to any agree-
ment or transaction referred to in any of sub-
clauses (I) through (V), including any guarantee 
or reimbursement obligation in connection with 
any agreement or transaction referred to in any 
such clause. 
(vii) DEFINITIONS
RELATING
TO
DEFAULT.—When 
used in this paragraph and paragraphs (9) and (10)— 
(I) the term ‘‘default’’ means, with respect to 
a covered financial company, any adjudication or 
other official decision by any court of competent 
jurisdiction, or other public authority pursuant to 
which 
the 
Corporation 
has 
been 
appointed 
receiver; and 
(II) the term ‘‘in danger of default’’ means 
a covered financial company with respect to which 
the Corporation or appropriate State authority has 
determined that— 
(aa) in the opinion of the Corporation or 
such authority— 
(AA) the covered financial company 
is not likely to be able to pay its obliga-
tions in the normal course of business; 
and 
(BB) there is no reasonable prospect 
that the covered financial company will 
be able to pay such obligations without 
Federal assistance; or 
(bb) in the opinion of the Corporation or 
such authority— 
(AA) the covered financial company 
has incurred or is likely to incur losses 
that will deplete all or substantially all 
of its capital; and 
(BB) there is no reasonable prospect 
that the capital will be replenished with-
out Federal assistance. 
(viii) TREATMENT OF MASTER AGREEMENT AS ONE 
AGREEMENT.—Any master agreement for any contract 
or agreement described in any of clauses (i) through 
(vi) (or any master agreement for such master agree-
ment or agreements), together with all supplements 
to such master agreement, shall be treated as a single 
agreement and a single qualified financial contact. If 
a master agreement contains provisions relating to 
agreements or transactions that are not themselves 
qualified financial contracts, the master agreement
H. R. 4173—113 
shall be deemed to be a qualified financial contract 
only with respect to those transactions that are them-
selves qualified financial contracts. 
(ix) TRANSFER.—The term ‘‘transfer’’ means every 
mode, direct or indirect, absolute or conditional, vol-
untary or involuntary, of disposing of or parting with 
property or with an interest in property, including 
retention of title as a security interest and foreclosure 
of the equity of redemption of the covered financial 
company. 
(x) PERSON.—The term ‘‘person’’ includes any 
governmental entity in addition to any entity included 
in the definition of such term in section 1, title 1, 
United States Code. 
(E) CLARIFICATION.—No provision of law shall be con-
strued as limiting the right or power of the Corporation, 
or authorizing any court or agency to limit or delay, in 
any manner, the right or power of the Corporation to 
transfer any qualified financial contract or to disaffirm 
or repudiate any such contract in accordance with this 
subsection. 
(F) WALKAWAY CLAUSES NOT EFFECTIVE.— 
(i) IN GENERAL.—Notwithstanding the provisions 
of subparagraph (A) of this paragraph and sections 
403 and 404 of the Federal Deposit Insurance Corpora-
tion Improvement Act of 1991, no walkaway clause 
shall be enforceable in a qualified financial contract 
of a covered financial company in default. 
(ii) LIMITED
SUSPENSION
OF
CERTAIN
OBLIGA-
TIONS.—In the case of a qualified financial contract 
referred to in clause (i), any payment or delivery obliga-
tions otherwise due from a party pursuant to the quali-
fied financial contract shall be suspended from the 
time at which the Corporation is appointed as receiver 
until the earlier of— 
(I) the time at which such party receives notice 
that such contract has been transferred pursuant 
to paragraph (10)(A); or 
(II) 5:00 p.m. (eastern time) on the business 
day following the date of the appointment of the 
Corporation as receiver. 
(iii) WALKAWAY
CLAUSE
DEFINED.—For purposes 
of this subparagraph, the term ‘‘walkaway clause’’ 
means any provision in a qualified financial contract 
that suspends, conditions, or extinguishes a payment 
obligation of a party, in whole or in part, or does 
not create a payment obligation of a party that would 
otherwise exist, solely because of the status of such 
party as a nondefaulting party in connection with the 
insolvency of a covered financial company that is a 
party to the contract or the appointment of or the 
exercise of rights or powers by the Corporation as 
receiver for such covered financial company, and not 
as a result of the exercise by a party of any right 
to offset, setoff, or net obligations that exist under 
the contract, any other contract between those parties, 
or applicable law.
H. R. 4173—114 
(G) CERTAIN
OBLIGATIONS
TO
CLEARING
ORGANIZA-
TIONS.—In the event that the Corporation has been 
appointed as receiver for a covered financial company which 
is a party to any qualified financial contract cleared by 
or subject to the rules of a clearing organization (as defined 
in paragraph (9)(D)), the receiver shall use its best efforts 
to meet all margin, collateral, and settlement obligations 
of the covered financial company that arise under qualified 
financial contracts (other than any margin, collateral, or 
settlement obligation that is not enforceable against the 
receiver under paragraph (8)(F)(i) or paragraph (10)(B)), 
as required by the rules of the clearing organization when 
due. Notwithstanding any other provision of this title, if 
the receiver fails to satisfy any such margin, collateral, 
or settlement obligations under the rules of the clearing 
organization, the clearing organization shall have the 
immediate right to exercise, and shall not be stayed from 
exercising, all of its rights and remedies under its rules 
and applicable law with respect to any qualified financial 
contract of the covered financial company, including, with-
out limitation, the right to liquidate all positions and collat-
eral of such covered financial company under the company’s 
qualified financial contracts, and suspend or cease to act 
for such covered financial company, all in accordance with 
the rules of the clearing organization. 
(H) RECORDKEEPING.— 
(i) JOINT
RULEMAKING.—The Federal primary 
financial regulatory agencies shall jointly prescribe 
regulations requiring that financial companies main-
tain such records with respect to qualified financial 
contracts (including market valuations) that the Fed-
eral primary financial regulatory agencies determine 
to be necessary or appropriate in order to assist the 
Corporation as receiver for a covered financial company 
in being able to exercise its rights and fulfill its obliga-
tions under this paragraph or paragraph (9) or (10). 
(ii) TIME FRAME.—The Federal primary financial 
regulatory agencies shall prescribe joint final or 
interim final regulations not later than 24 months 
after the date of enactment of this Act. 
(iii) BACK-UP RULEMAKING AUTHORITY.—If the Fed-
eral primary financial regulatory agencies do not pre-
scribe joint final or interim final regulations within 
the time frame in clause (ii), the Chairperson of the 
Council shall prescribe, in consultation with the Cor-
poration, the regulations required by clause (i). 
(iv) CATEGORIZATION AND TIERING.—The joint regu-
lations prescribed under clause (i) shall, as appropriate, 
differentiate among financial companies by taking into 
consideration their size, risk, complexity, leverage, fre-
quency and dollar amount of qualified financial con-
tracts, interconnectedness to the financial system, and 
any other factors deemed appropriate. 
(9) TRANSFER OF QUALIFIED FINANCIAL CONTRACTS.— 
(A) IN GENERAL.—In making any transfer of assets 
or liabilities of a covered financial company in default,
H. R. 4173—115 
which includes any qualified financial contract, the Cor-
poration as receiver for such covered financial company 
shall either— 
(i) transfer to one financial institution, other than 
a financial institution for which a conservator, receiver, 
trustee in bankruptcy, or other legal custodian has 
been appointed or which is otherwise the subject of 
a bankruptcy or insolvency proceeding— 
(I) all qualified financial contracts between 
any person or any affiliate of such person and 
the covered financial company in default; 
(II) all claims of such person or any affiliate 
of such person against such covered financial com-
pany under any such contract (other than any 
claim which, under the terms of any such contract, 
is subordinated to the claims of general unsecured 
creditors of such company); 
(III) all claims of such covered financial com-
pany against such person or any affiliate of such 
person under any such contract; and 
(IV) all property securing or any other credit 
enhancement for any contract described in sub-
clause (I) or any claim described in subclause (II) 
or (III) under any such contract; or 
(ii) transfer none of the qualified financial con-
tracts, claims, property or other credit enhancement 
referred to in clause (i) (with respect to such person 
and any affiliate of such person). 
(B) TRANSFER TO FOREIGN BANK, FINANCIAL INSTITU-
TION, OR
BRANCH
OR
AGENCY
THEREOF.—In transferring 
any qualified financial contracts and related claims and 
property under subparagraph (A)(i), the Corporation as 
receiver for the covered financial company shall not make 
such transfer to a foreign bank, financial institution orga-
nized under the laws of a foreign country, or a branch 
or agency of a foreign bank or financial institution unless, 
under the law applicable to such bank, financial institution, 
branch or agency, to the qualified financial contracts, and 
to any netting contract, any security agreement or arrange-
ment or other credit enhancement related to one or more 
qualified financial contracts, the contractual rights of the 
parties to such qualified financial contracts, netting con-
tracts, security agreements or arrangements, or other credit 
enhancements are enforceable substantially to the same 
extent as permitted under this section. 
(C) TRANSFER OF CONTRACTS SUBJECT TO THE RULES 
OF A CLEARING ORGANIZATION.—In the event that the Cor-
poration as receiver for a financial institution transfers 
any qualified financial contract and related claims, prop-
erty, or credit enhancement pursuant to subparagraph 
(A)(i) and such contract is cleared by or subject to the 
rules of a clearing organization, the clearing organization 
shall not be required to accept the transferee as a member 
by virtue of the transfer. 
(D) DEFINITIONS.—For purposes of this paragraph—
H. R. 4173—116 
(i) the term ‘‘financial institution’’ means a broker 
or dealer, a depository institution, a futures commis-
sion merchant, a bridge financial company, or any 
other institution determined by the Corporation, by 
regulation, to be a financial institution; and 
(ii) the term ‘‘clearing organization’’ has the same 
meaning as in section 402 of the Federal Deposit Insur-
ance Corporation Improvement Act of 1991. 
(10) NOTIFICATION OF TRANSFER.— 
(A) IN GENERAL.— 
(i) NOTICE.—The Corporation shall provide notice 
in accordance with clause (ii), if— 
(I) the Corporation as receiver for a covered 
financial company in default or in danger of default 
transfers any assets or liabilities of the covered 
financial company; and 
(II) the transfer includes any qualified finan-
cial contract. 
(ii) TIMING.—The Corporation as receiver for a cov-
ered financial company shall notify any person who 
is a party to any contract described in clause (i) of 
such transfer not later than 5:00 p.m. (eastern time) 
on the business day following the date of the appoint-
ment of the Corporation as receiver. 
(B) CERTAIN RIGHTS NOT ENFORCEABLE.— 
(i) RECEIVERSHIP.—A person who is a party to 
a qualified financial contract with a covered financial 
company may not exercise any right that such person 
has to terminate, liquidate, or net such contract under 
paragraph (8)(A) solely by reason of or incidental to 
the appointment under this section of the Corporation 
as receiver for the covered financial company (or the 
insolvency or financial condition of the covered finan-
cial company for which the Corporation has been 
appointed as receiver)— 
(I) until 5:00 p.m. (eastern time) on the busi-
ness day following the date of the appointment; 
or 
(II) after the person has received notice that 
the contract has been transferred pursuant to 
paragraph (9)(A). 
(ii) NOTICE.—For purposes of this paragraph, the 
Corporation as receiver for a covered financial company 
shall be deemed to have notified a person who is a 
party to a qualified financial contract with such covered 
financial company, if the Corporation has taken steps 
reasonably calculated to provide notice to such person 
by the time specified in subparagraph (A). 
(C) TREATMENT OF BRIDGE FINANCIAL COMPANY.—For 
purposes of paragraph (9), a bridge financial company shall 
not be considered to be a financial institution for which 
a conservator, receiver, trustee in bankruptcy, or other 
legal custodian has been appointed, or which is otherwise 
the subject of a bankruptcy or insolvency proceeding. 
(D) BUSINESS DAY DEFINED.—For purposes of this para-
graph, the term ‘‘business day’’ means any day other than 
any Saturday, Sunday, or any day on which either the
H. R. 4173—117 
New York Stock Exchange or the Federal Reserve Bank 
of New York is closed. 
(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINAN-
CIAL CONTRACTS.—In exercising the rights of disaffirmance or 
repudiation of the Corporation as receiver with respect to any 
qualified financial contract to which a covered financial com-
pany is a party, the Corporation shall either— 
(A) disaffirm or repudiate all qualified financial con-
tracts between— 
(i) any person or any affiliate of such person; and 
(ii) the covered financial company in default; or 
(B) disaffirm or repudiate none of the qualified finan-
cial contracts referred to in subparagraph (A) (with respect 
to such person or any affiliate of such person). 
(12) CERTAIN
SECURITY
AND
CUSTOMER
INTERESTS
NOT 
AVOIDABLE.—No provision of this subsection shall be construed 
as permitting the avoidance of any— 
(A) legally enforceable or perfected security interest 
in any of the assets of any covered financial company, 
except in accordance with subsection (a)(11); or 
(B) legally enforceable interest in customer property, 
security entitlements in respect of assets or property held 
by the covered financial company for any security entitle-
ment holder. 
(13) AUTHORITY TO ENFORCE CONTRACTS.— 
(A) IN GENERAL.—The Corporation, as receiver for a 
covered financial company, may enforce any contract, other 
than a liability insurance contract of a director or officer, 
a financial institution bond entered into by the covered 
financial company, notwithstanding any provision of the 
contract providing for termination, default, acceleration, 
or exercise of rights upon, or solely by reason of, insolvency, 
the appointment of or the exercise of rights or powers 
by the Corporation as receiver, the filing of the petition 
pursuant to section 202(a)(1), or the issuance of the rec-
ommendations or determination, or any actions or events 
occurring in connection therewith or as a result thereof, 
pursuant to section 203. 
(B) CERTAIN RIGHTS NOT AFFECTED.—No provision of 
this paragraph may be construed as impairing or affecting 
any right of the Corporation as receiver to enforce or 
recover under a liability insurance contract of a director 
or officer or financial institution bond under other 
applicable law. 
(C) CONSENT REQUIREMENT AND IPSO FACTO CLAUSES.— 
(i) IN GENERAL.—Except as otherwise provided by 
this section, no person may exercise any right or power 
to terminate, accelerate, or declare a default under 
any contract to which the covered financial company 
is a party (and no provision in any such contract pro-
viding for such default, termination, or acceleration 
shall be enforceable), or to obtain possession of or 
exercise control over any property of the covered finan-
cial company or affect any contractual rights of the 
covered financial company, without the consent of the
H. R. 4173—118 
Corporation as receiver for the covered financial com-
pany during the 90 day period beginning from the 
appointment of the Corporation as receiver. 
(ii) EXCEPTIONS.—No provision of this subpara-
graph shall apply to a director or officer liability insur-
ance contract or a financial institution bond, to the 
rights of parties to certain qualified financial contracts 
pursuant to paragraph (8), or to the rights of parties 
to netting contracts pursuant to subtitle A of title 
IV of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 4401 et seq.), 
or shall be construed as permitting the Corporation 
as receiver to fail to comply with otherwise enforceable 
provisions of such contract. 
(D) CONTRACTS TO EXTEND CREDIT.—Notwithstanding 
any other provision in this title, if the Corporation as 
receiver enforces any contract to extend credit to the cov-
ered financial company or bridge financial company, any 
valid and enforceable obligation to repay such debt shall 
be paid by the Corporation as receiver, as an administrative 
expense of the receivership. 
(14) EXCEPTION FOR FEDERAL RESERVE BANKS AND CORPORA-
TION SECURITY INTEREST.—No provision of this subsection shall 
apply with respect to— 
(A) any extension of credit from any Federal reserve 
bank or the Corporation to any covered financial company; 
or 
(B) any security interest in the assets of the covered 
financial company securing any such extension of credit. 
(15) SAVINGS
CLAUSE.—The meanings of terms used in 
this subsection are applicable for purposes of this subsection 
only, and shall not be construed or applied so as to challenge 
or affect the characterization, definition, or treatment of any 
similar terms under any other statute, regulation, or rule, 
including the Gramm-Leach-Bliley Act, the Legal Certainty 
for Bank Products Act of 2000, the securities laws (as that 
term is defined in section 3(a)(47) of the Securities Exchange 
Act of 1934), and the Commodity Exchange Act. 
(16) ENFORCEMENT OF CONTRACTS GUARANTEED BY THE COV-
ERED FINANCIAL COMPANY.— 
(A) IN GENERAL.—The Corporation, as receiver for a 
covered financial company or as receiver for a subsidiary 
of a covered financial company (including an insured 
depository institution) shall have the power to enforce con-
tracts of subsidiaries or affiliates of the covered financial 
company, the obligations under which are guaranteed or 
otherwise supported by or linked to the covered financial 
company, notwithstanding any contractual right to cause 
the termination, liquidation, or acceleration of such con-
tracts based solely on the insolvency, financial condition, 
or receivership of the covered financial company, if— 
(i) such guaranty or other support and all related 
assets and liabilities are transferred to and assumed 
by a bridge financial company or a third party (other 
than a third party for which a conservator, receiver, 
trustee in bankruptcy, or other legal custodian has 
been appointed, or which is otherwise the subject of
H. R. 4173—119 
a bankruptcy or insolvency proceeding) within the 
same period of time as the Corporation is entitled 
to transfer the qualified financial contracts of such 
covered financial company; or 
(ii) the Corporation, as receiver, otherwise provides 
adequate protection with respect to such obligations. 
(B) RULE
OF
CONSTRUCTION.—For purposes of this 
paragraph, a bridge financial company shall not be consid-
ered to be a third party for which a conservator, receiver, 
trustee in bankruptcy, or other legal custodian has been 
appointed, or which is otherwise the subject of a bankruptcy 
or insolvency proceeding. 
(d) VALUATION OF CLAIMS IN DEFAULT.— 
(1) IN GENERAL.—Notwithstanding any other provision of 
Federal law or the law of any State, and regardless of the 
method utilized by the Corporation for a covered financial com-
pany, including transactions authorized under subsection (h), 
this subsection shall govern the rights of the creditors of any 
such covered financial company. 
(2) MAXIMUM LIABILITY.—The maximum liability of the Cor-
poration, acting as receiver for a covered financial company 
or in any other capacity, to any person having a claim against 
the Corporation as receiver or the covered financial company 
for which the Corporation is appointed shall equal the amount 
that such claimant would have received if— 
(A) the Corporation had not been appointed receiver 
with respect to the covered financial company; and 
(B) the covered financial company had been liquidated 
under chapter 7 of the Bankruptcy Code, or any similar 
provision of State insolvency law applicable to the covered 
financial company. 
(3) SPECIAL PROVISION FOR ORDERLY LIQUIDATION BY SIPC.— 
The maximum liability of the Corporation, acting as receiver 
or in its corporate capacity for any covered broker or dealer 
to any customer of such covered broker or dealer, with respect 
to customer property of such customer, shall be— 
(A) equal to the amount that such customer would 
have received with respect to such customer property in 
a case initiated by SIPC under the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78aaa et seq.); and 
(B) determined as of the close of business on the date 
on which the Corporation is appointed as receiver. 
(4) ADDITIONAL PAYMENTS AUTHORIZED.— 
(A) IN GENERAL.—Subject to subsection (o)(1)(D)(i), the 
Corporation, with the approval of the Secretary, may make 
additional payments or credit additional amounts to or 
with respect to or for the account of any claimant or cat-
egory of claimants of the covered financial company, if 
the Corporation determines that such payments or credits 
are necessary or appropriate to minimize losses to the 
Corporation as receiver from the orderly liquidation of the 
covered financial company under this section. 
(B) LIMITATIONS.— 
(i) PROHIBITION.—The Corporation shall not make 
any payments or credit amounts to any claimant or 
category of claimants that would result in any claimant 
receiving more than the face value amount of any
H. R. 4173—120 
claim that is proven to the satisfaction of the Corpora-
tion. 
(ii) NO OBLIGATION.—Notwithstanding any other 
provision of Federal or State law, or the Constitution 
of any State, the Corporation shall not be obligated, 
as a result of having made any payment under 
subparagraph (A) or credited any amount described 
in subparagraph (A) to or with respect to, or for the 
account, of any claimant or category of claimants, to 
make payments to any other claimant or category of 
claimants. 
(C) MANNER OF PAYMENT.—The Corporation may make 
payments or credit amounts under subparagraph (A) 
directly to the claimants or may make such payments 
or credit such amounts to a company other than a covered 
financial company or a bridge financial company estab-
lished with respect thereto in order to induce such other 
company to accept liability for such claims. 
(e) LIMITATION ON COURT ACTION.—Except as provided in this 
title, no court may take any action to restrain or affect the exercise 
of powers or functions of the receiver hereunder, and any remedy 
against the Corporation or receiver shall be limited to money dam-
ages determined in accordance with this title. 
(f) LIABILITY OF DIRECTORS AND OFFICERS.— 
(1) IN GENERAL.—A director or officer of a covered financial 
company may be held personally liable for monetary damages 
in any civil action described in paragraph (2) by, on behalf 
of, or at the request or direction of the Corporation, which 
action is prosecuted wholly or partially for the benefit of the 
Corporation— 
(A) acting as receiver for such covered financial com-
pany; 
(B) acting based upon a suit, claim, or cause of action 
purchased from, assigned by, or otherwise conveyed by 
the Corporation as receiver; or 
(C) acting based upon a suit, claim, or cause of action 
purchased from, assigned by, or otherwise conveyed in 
whole or in part by a covered financial company or its 
affiliate in connection with assistance provided under this 
title. 
(2) ACTIONS
COVERED.—Paragraph (1) shall apply with 
respect to actions for gross negligence, including any similar 
conduct or conduct that demonstrates a greater disregard of 
a duty of care (than gross negligence) including intentional 
tortious conduct, as such terms are defined and determined 
under applicable State law. 
(3) SAVINGS
CLAUSE.—Nothing in this subsection shall 
impair or affect any right of the Corporation under other 
applicable law. 
(g) DAMAGES.—In any proceeding related to any claim against 
a director, officer, employee, agent, attorney, accountant, or 
appraiser of a covered financial company, or any other party 
employed by or providing services to a covered financial company, 
recoverable damages determined to result from the improvident 
or otherwise improper use or investment of any assets of the covered 
financial company shall include principal losses and appropriate 
interest.
H. R. 4173—121 
(h) BRIDGE FINANCIAL COMPANIES.— 
(1) ORGANIZATION.— 
(A) PURPOSE.—The Corporation, as receiver for one 
or more covered financial companies or in anticipation of 
being appointed receiver for one or more covered financial 
companies, may organize one or more bridge financial 
companies in accordance with this subsection. 
(B) AUTHORITIES.—Upon the creation of a bridge finan-
cial company under subparagraph (A) with respect to a 
covered financial company, such bridge financial company 
may— 
(i) assume such liabilities (including liabilities 
associated with any trust or custody business, but 
excluding any liabilities that count as regulatory cap-
ital) of such covered financial company as the Corpora-
tion may, in its discretion, determine to be appropriate; 
(ii) purchase such assets (including assets associ-
ated with any trust or custody business) of such cov-
ered financial company as the Corporation may, in 
its discretion, determine to be appropriate; and 
(iii) perform any other temporary function which 
the Corporation may, in its discretion, prescribe in 
accordance with this section. 
(2) CHARTER AND ESTABLISHMENT.— 
(A) ESTABLISHMENT.—Except as provided in subpara-
graph (H), where the covered financial company is a covered 
broker or dealer, the Corporation, as receiver for a covered 
financial company, may grant a Federal charter to and 
approve articles of association for one or more bridge finan-
cial company or companies, with respect to such covered 
financial company which shall, by operation of law and 
immediately upon issuance of its charter and approval 
of its articles of association, be established and operate 
in accordance with, and subject to, such charter, articles, 
and this section. 
(B) MANAGEMENT.—Upon its establishment, a bridge 
financial company shall be under the management of a 
board of directors appointed by the Corporation. 
(C) ARTICLES OF ASSOCIATION.—The articles of associa-
tion and organization certificate of a bridge financial com-
pany shall have such terms as the Corporation may provide, 
and shall be executed by such representatives as the Cor-
poration may designate. 
(D) TERMS OF CHARTER; RIGHTS AND PRIVILEGES.—Sub-
ject to and in accordance with the provisions of this sub-
section, the Corporation shall— 
(i) establish the terms of the charter of a bridge 
financial company and the rights, powers, authorities, 
and privileges of a bridge financial company granted 
by the charter or as an incident thereto; and 
(ii) provide for, and establish the terms and condi-
tions governing, the management (including the bylaws 
and the number of directors of the board of directors) 
and operations of the bridge financial company. 
(E) TRANSFER OF RIGHTS AND PRIVILEGES OF COVERED 
FINANCIAL COMPANY.—
H. R. 4173—122 
(i) IN GENERAL.—Notwithstanding any other provi-
sion of Federal or State law, the Corporation may 
provide for a bridge financial company to succeed to 
and assume any rights, powers, authorities, or privi-
leges of the covered financial company with respect 
to which the bridge financial company was established 
and, upon such determination by the Corporation, the 
bridge financial company shall immediately and by 
operation of law succeed to and assume such rights, 
powers, authorities, and privileges. 
(ii) EFFECTIVE WITHOUT APPROVAL.—Any succes-
sion to or assumption by a bridge financial company 
of rights, powers, authorities, or privileges of a covered 
financial company under clause (i) or otherwise shall 
be effective without any further approval under Fed-
eral or State law, assignment, or consent with respect 
thereto. 
(F) CORPORATE GOVERNANCE AND ELECTION AND DES-
IGNATION OF BODY OF LAW.—To the extent permitted by 
the Corporation and consistent with this section and any 
rules, regulations, or directives issued by the Corporation 
under this section, a bridge financial company may elect 
to follow the corporate governance practices and procedures 
that are applicable to a corporation incorporated under 
the general corporation law of the State of Delaware, or 
the State of incorporation or organization of the covered 
financial company with respect to which the bridge finan-
cial company was established, as such law may be amended 
from time to time. 
(G) CAPITAL.— 
(i) CAPITAL NOT REQUIRED.—Notwithstanding any 
other provision of Federal or State law, a bridge finan-
cial company may, if permitted by the Corporation, 
operate without any capital or surplus, or with such 
capital or surplus as the Corporation may in its discre-
tion determine to be appropriate. 
(ii) NO
CONTRIBUTION
BY
THE
CORPORATION 
REQUIRED.—The Corporation is not required to pay 
capital into a bridge financial company or to issue 
any capital stock on behalf of a bridge financial com-
pany established under this subsection. 
(iii) AUTHORITY.—If the Corporation determines 
that such action is advisable, the Corporation may 
cause capital stock or other securities of a bridge finan-
cial company established with respect to a covered 
financial company to be issued and offered for sale 
in such amounts and on such terms and conditions 
as the Corporation may, in its discretion, determine. 
(iv) OPERATING
FUNDS
IN
LIEU
OF
CAPITAL
AND 
IMPLEMENTATION PLAN.—Upon the organization of a 
bridge financial company, and thereafter as the Cor-
poration may, in its discretion, determine to be nec-
essary or advisable, the Corporation may make avail-
able to the bridge financial company, subject to the 
plan described in subsection (n)(9), funds for the oper-
ation of the bridge financial company in lieu of capital. 
(H) BRIDGE BROKERS OR DEALERS.—
H. R. 4173—123 
(i) IN GENERAL.—The Corporation, as receiver for 
a covered broker or dealer, may approve articles of 
association for one or more bridge financial companies 
with respect to such covered broker or dealer, which 
bridge financial company or companies shall, by oper-
ation of law and immediately upon approval of its 
articles of association— 
(I) be established and deemed registered with 
the Commission under the Securities Exchange 
Act of 1934 and a member of SIPC; 
(II) operate in accordance with such articles 
and this section; and 
(III) succeed to any and all registrations and 
memberships of the covered financial company 
with or in any self-regulatory organizations. 
(ii) OTHER REQUIREMENTS.—Except as provided in 
clause (i), and notwithstanding any other provision 
of this section, the bridge financial company shall be 
subject to the Federal securities laws and all require-
ments with respect to being a member of a self-regu-
latory organization, unless exempted from any such 
requirements by the Commission, as is necessary or 
appropriate in the public interest or for the protection 
of investors. 
(iii) TREATMENT OF CUSTOMERS.—Except as other-
wise provided by this title, any customer of the covered 
broker or dealer whose account is transferred to a 
bridge financial company shall have all the rights, 
privileges, and protections under section 205(f) and 
under the Securities Investor Protection Act of 1970 
(15 U.S.C. 78aaa et seq.), that such customer would 
have had if the account were not transferred from 
the covered financial company under this subpara-
graph. 
(iv) OPERATION OF BRIDGE BROKERS OR DEALERS.— 
Notwithstanding any other provision of this title, the 
Corporation shall not operate any bridge financial com-
pany created by the Corporation under this title with 
respect to a covered broker or dealer in such a manner 
as to adversely affect the ability of customers to 
promptly access their customer property in accordance 
with applicable law. 
(3) INTERESTS IN AND ASSETS AND OBLIGATIONS OF COVERED 
FINANCIAL COMPANY.—Notwithstanding paragraph (1) or (2) or 
any other provision of law— 
(A) a bridge financial company shall assume, acquire, 
or succeed to the assets or liabilities of a covered financial 
company (including the assets or liabilities associated with 
any trust or custody business) only to the extent that 
such assets or liabilities are transferred by the Corporation 
to the bridge financial company in accordance with, and 
subject to the restrictions set forth in, paragraph (1)(B); 
and 
(B) a bridge financial company shall not assume, 
acquire, or succeed to any obligation that a covered finan-
cial company for which the Corporation has been appointed 
receiver may have to any shareholder, member, general
H. R. 4173—124 
partner, limited partner, or other person with an interest 
in the equity of the covered financial company that arises 
as a result of the status of that person having an equity 
claim in the covered financial company. 
(4) BRIDGE
FINANCIAL
COMPANY
TREATED
AS
BEING
IN 
DEFAULT FOR CERTAIN PURPOSES.—A bridge financial company 
shall be treated as a covered financial company in default 
at such times and for such purposes as the Corporation may, 
in its discretion, determine. 
(5) TRANSFER OF ASSETS AND LIABILITIES.— 
(A) AUTHORITY OF CORPORATION.—The Corporation, as 
receiver for a covered financial company, may transfer 
any assets and liabilities of a covered financial company 
(including any assets or liabilities associated with any trust 
or custody business) to one or more bridge financial compa-
nies, in accordance with and subject to the restrictions 
of paragraph (1). 
(B) SUBSEQUENT TRANSFERS.—At any time after the 
establishment of a bridge financial company with respect 
to a covered financial company, the Corporation, as 
receiver, may transfer any assets and liabilities of such 
covered financial company as the Corporation may, in its 
discretion, determine to be appropriate in accordance with 
and subject to the restrictions of paragraph (1). 
(C) TREATMENT OF TRUST OR CUSTODY BUSINESS.—For 
purposes of this paragraph, the trust or custody business, 
including fiduciary appointments, held by any covered 
financial company is included among its assets and liabil-
ities. 
(D) EFFECTIVE WITHOUT APPROVAL.—The transfer of 
any assets or liabilities, including those associated with 
any trust or custody business of a covered financial com-
pany, to a bridge financial company shall be effective with-
out any further approval under Federal or State law, 
assignment, or consent with respect thereto. 
(E) EQUITABLE
TREATMENT
OF
SIMILARLY
SITUATED 
CREDITORS.—The Corporation shall treat all creditors of 
a covered financial company that are similarly situated 
under subsection (b)(1), in a similar manner in exercising 
the authority of the Corporation under this subsection to 
transfer any assets or liabilities of the covered financial 
company to one or more bridge financial companies estab-
lished with respect to such covered financial company, 
except that the Corporation may take any action (including 
making payments, subject to subsection (o)(1)(D)(i)) that 
does not comply with this subparagraph, if— 
(i) the Corporation determines that such action 
is necessary— 
(I) to maximize the value of the assets of the 
covered financial company; 
(II) to maximize the present value return from 
the sale or other disposition of the assets of the 
covered financial company; or 
(III) to minimize the amount of any loss 
realized upon the sale or other disposition of the 
assets of the covered financial company; and
H. R. 4173—125 
(ii) all creditors that are similarly situated under 
subsection (b)(1) receive not less than the amount pro-
vided under paragraphs (2) and (3) of subsection (d). 
(F) LIMITATION ON TRANSFER OF LIABILITIES.—Notwith-
standing any other provision of law, the aggregate amount 
of liabilities of a covered financial company that are trans-
ferred to, or assumed by, a bridge financial company from 
a covered financial company may not exceed the aggregate 
amount of the assets of the covered financial company 
that are transferred to, or purchased by, the bridge finan-
cial company from the covered financial company. 
(6) STAY OF JUDICIAL ACTION.—Any judicial action to which 
a bridge financial company becomes a party by virtue of its 
acquisition of any assets or assumption of any liabilities of 
a covered financial company shall be stayed from further pro-
ceedings for a period of not longer than 45 days (or such 
longer period as may be agreed to upon the consent of all 
parties) at the request of the bridge financial company. 
(7) AGREEMENTS AGAINST INTEREST OF THE BRIDGE FINAN-
CIAL COMPANY.—No agreement that tends to diminish or defeat 
the interest of the bridge financial company in any asset of 
a covered financial company acquired by the bridge financial 
company shall be valid against the bridge financial company, 
unless such agreement— 
(A) is in writing; 
(B) was executed by an authorized officer or representa-
tive of the covered financial company or confirmed in the 
ordinary course of business by the covered financial com-
pany; and 
(C) has been on the official record of the company, 
since the time of its execution, or with which, the party 
claiming under the agreement provides documentation of 
such agreement and its authorized execution or confirma-
tion by the covered financial company that is acceptable 
to the receiver. 
(8) NO FEDERAL STATUS.— 
(A) AGENCY STATUS.—A bridge financial company is 
not an agency, establishment, or instrumentality of the 
United States. 
(B) EMPLOYEE STATUS.—Representatives for purposes 
of paragraph (1)(B), directors, officers, employees, or agents 
of a bridge financial company are not, solely by virtue 
of service in any such capacity, officers or employees of 
the United States. Any employee of the Corporation or 
of any Federal instrumentality who serves at the request 
of the Corporation as a representative for purposes of para-
graph (1)(B), director, officer, employee, or agent of a bridge 
financial company shall not— 
(i) solely by virtue of service in any such capacity 
lose any existing status as an officer or employee of 
the United States for purposes of title 5, United States 
Code, or any other provision of law; or 
(ii) receive any salary or benefits for service in 
any such capacity with respect to a bridge financial 
company in addition to such salary or benefits as are 
obtained through employment with the Corporation 
or such Federal instrumentality.
H. R. 4173—126 
(9) FUNDING AUTHORIZED.—The Corporation may, subject 
to the plan described in subsection (n)(9), provide funding to 
facilitate any transaction described in subparagraph (A), (B), 
(C), or (D) of paragraph (13) with respect to any bridge financial 
company, or facilitate the acquisition by a bridge financial 
company of any assets, or the assumption of any liabilities, 
of a covered financial company for which the Corporation has 
been appointed receiver. 
(10) EXEMPT
TAX
STATUS.—Notwithstanding any other 
provision of Federal or State law, a bridge financial company, 
its franchise, property, and income shall be exempt from all 
taxation now or hereafter imposed by the United States, by 
any territory, dependency, or possession thereof, or by any 
State, county, municipality, or local taxing authority. 
(11) FEDERAL
AGENCY
APPROVAL; ANTITRUST
REVIEW.—If 
a transaction involving the merger or sale of a bridge financial 
company requires approval by a Federal agency, the transaction 
may not be consummated before the 5th calendar day after 
the date of approval by the Federal agency responsible for 
such approval with respect thereto. If, in connection with any 
such approval a report on competitive factors from the Attorney 
General is required, the Federal agency responsible for such 
approval shall promptly notify the Attorney General of the 
proposed transaction and the Attorney General shall provide 
the required report within 10 days of the request. If a notifica-
tion is required under section 7A of the Clayton Act with 
respect to such transaction, the required waiting period shall 
end on the 15th day after the date on which the Attorney 
General and the Federal Trade Commission receive such 
notification, unless the waiting period is terminated earlier 
under section 7A(b)(2) of the Clayton Act, or extended under 
section 7A(e)(2) of that Act. 
(12) DURATION OF BRIDGE FINANCIAL COMPANY.—Subject 
to paragraphs (13) and (14), the status of a bridge financial 
company as such shall terminate at the end of the 2-year 
period following the date on which it was granted a charter. 
The Corporation may, in its discretion, extend the status of 
the bridge financial company as such for no more than 3 addi-
tional 1-year periods. 
(13) TERMINATION OF BRIDGE FINANCIAL COMPANY STATUS.— 
The status of any bridge financial company as such shall termi-
nate upon the earliest of— 
(A) the date of the merger or consolidation of the 
bridge financial company with a company that is not a 
bridge financial company; 
(B) at the election of the Corporation, the sale of a 
majority of the capital stock of the bridge financial company 
to a company other than the Corporation and other than 
another bridge financial company; 
(C) the sale of 80 percent, or more, of the capital 
stock of the bridge financial company to a person other 
than the Corporation and other than another bridge finan-
cial company; 
(D) at the election of the Corporation, either the 
assumption of all or substantially all of the liabilities of 
the bridge financial company by a company that is not 
a bridge financial company, or the acquisition of all or
H. R. 4173—127 
substantially all of the assets of the bridge financial com-
pany by a company that is not a bridge financial company, 
or other entity as permitted under applicable law; and 
(E) the expiration of the period provided in paragraph 
(12), or the earlier dissolution of the bridge financial com-
pany, as provided in paragraph (15). 
(14) EFFECT OF TERMINATION EVENTS.— 
(A) MERGER OR CONSOLIDATION.—A merger or consoli-
dation, described in paragraph (13)(A) shall be conducted 
in accordance with, and shall have the effect provided 
in, the provisions of applicable law. For the purpose of 
effecting such a merger or consolidation, the bridge finan-
cial company shall be treated as a corporation organized 
under the laws of the State of Delaware (unless the law 
of another State has been selected by the bridge financial 
company in accordance with paragraph (2)(F)), and the 
Corporation shall be treated as the sole shareholder thereof, 
notwithstanding any other provision of State or Federal 
law. 
(B) CHARTER
CONVERSION.—Following the sale of a 
majority of the capital stock of the bridge financial com-
pany, as provided in paragraph (13)(B), the Corporation 
may amend the charter of the bridge financial company 
to reflect the termination of the status of the bridge finan-
cial company as such, whereupon the company shall have 
all of the rights, powers, and privileges under its con-
stituent documents and applicable Federal or State law. 
In connection therewith, the Corporation may take such 
steps as may be necessary or convenient to reincorporate 
the bridge financial company under the laws of a State 
and, notwithstanding any provisions of Federal or State 
law, such State-chartered corporation shall be deemed to 
succeed by operation of law to such rights, titles, powers, 
and interests of the bridge financial company as the Cor-
poration may provide, with the same effect as if the bridge 
financial company had merged with the State-chartered 
corporation under provisions of the corporate laws of such 
State. 
(C) SALE OF STOCK.—Following the sale of 80 percent 
or more of the capital stock of a bridge financial company, 
as provided in paragraph (13)(C), the company shall have 
all of the rights, powers, and privileges under its con-
stituent documents and applicable Federal or State law. 
In connection therewith, the Corporation may take such 
steps as may be necessary or convenient to reincorporate 
the bridge financial company under the laws of a State 
and, notwithstanding any provisions of Federal or State 
law, the State-chartered corporation shall be deemed to 
succeed by operation of law to such rights, titles, powers 
and interests of the bridge financial company as the Cor-
poration may provide, with the same effect as if the bridge 
financial company had merged with the State-chartered 
corporation under provisions of the corporate laws of such 
State. 
(D) ASSUMPTION OF LIABILITIES AND SALE OF ASSETS.— 
Following the assumption of all or substantially all of the 
liabilities of the bridge financial company, or the sale of
H. R. 4173—128 
all or substantially all of the assets of the bridge financial 
company, as provided in paragraph (13)(D), at the election 
of the Corporation, the bridge financial company may retain 
its status as such for the period provided in paragraph 
(12) or may be dissolved at the election of the Corporation. 
(E) AMENDMENTS
TO
CHARTER.—Following the con-
summation of a transaction described in subparagraph (A), 
(B), (C), or (D) of paragraph (13), the charter of the 
resulting company shall be amended to reflect the termi-
nation of bridge financial company status, if appropriate. 
(15) DISSOLUTION OF BRIDGE FINANCIAL COMPANY.— 
(A) IN GENERAL.—Notwithstanding any other provision 
of Federal or State law, if the status of a bridge financial 
company as such has not previously been terminated by 
the occurrence of an event specified in subparagraph (A), 
(B), (C), or (D) of paragraph (13)— 
(i) the Corporation may, in its discretion, dissolve 
the bridge financial company in accordance with this 
paragraph at any time; and 
(ii) the Corporation shall promptly commence dis-
solution proceedings in accordance with this paragraph 
upon the expiration of the 2-year period following the 
date on which the bridge financial company was char-
tered, or any extension thereof, as provided in para-
graph (12). 
(B) PROCEDURES.—The Corporation shall remain the 
receiver for a bridge financial company for the purpose 
of dissolving the bridge financial company. The Corporation 
as receiver for a bridge financial company shall wind up 
the affairs of the bridge financial company in conformity 
with the provisions of law relating to the liquidation of 
covered financial companies under this title. With respect 
to any such bridge financial company, the Corporation as 
receiver shall have all the rights, powers, and privileges 
and shall perform the duties related to the exercise of 
such rights, powers, or privileges granted by law to the 
Corporation as receiver for a covered financial company 
under this title and, notwithstanding any other provision 
of law, in the exercise of such rights, powers, and privileges, 
the Corporation shall not be subject to the direction or 
supervision of any State agency or other Federal agency. 
(16) AUTHORITY TO OBTAIN CREDIT.— 
(A) IN
GENERAL.—A bridge financial company may 
obtain unsecured credit and issue unsecured debt. 
(B) INABILITY TO OBTAIN CREDIT.—If a bridge financial 
company is unable to obtain unsecured credit or issue 
unsecured debt, the Corporation may authorize the 
obtaining of credit or the issuance of debt by the bridge 
financial company— 
(i) with priority over any or all of the obligations 
of the bridge financial company; 
(ii) secured by a lien on property of the bridge 
financial company that is not otherwise subject to a 
lien; or 
(iii) secured by a junior lien on property of the 
bridge financial company that is subject to a lien. 
(C) LIMITATIONS.—
H. R. 4173—129 
(i) IN GENERAL.—The Corporation, after notice and 
a hearing, may authorize the obtaining of credit or 
the issuance of debt by a bridge financial company 
that is secured by a senior or equal lien on property 
of the bridge financial company that is subject to a 
lien, only if— 
(I) the bridge financial company is unable to 
otherwise obtain such credit or issue such debt; 
and 
(II) there is adequate protection of the interest 
of the holder of the lien on the property with 
respect to which such senior or equal lien is pro-
posed to be granted. 
(ii) HEARING.—The hearing required pursuant to 
this subparagraph shall be before a court of the United 
States, which shall have jurisdiction to conduct such 
hearing and to authorize a bridge financial company 
to obtain secured credit under clause (i). 
(D) BURDEN
OF
PROOF.—In any hearing under this 
paragraph, the Corporation has the burden of proof on 
the issue of adequate protection. 
(E) QUALIFIED
FINANCIAL
CONTRACTS.—No credit or 
debt obtained or issued by a bridge financial company 
may contain terms that impair the rights of a counterparty 
to a qualified financial contract upon a default by the 
bridge financial company, other than the priority of such 
counterparty’s unsecured claim (after the exercise of rights) 
relative to the priority of the bridge financial company’s 
obligations in respect of such credit or debt, unless such 
counterparty consents in writing to any such impairment. 
(17) EFFECT ON DEBTS AND LIENS.—The reversal or modi-
fication on appeal of an authorization under this subsection 
to obtain credit or issue debt, or of a grant under this section 
of a priority or a lien, does not affect the validity of any 
debt so issued, or any priority or lien so granted, to an entity 
that extended such credit in good faith, whether or not such 
entity knew of the pendency of the appeal, unless such 
authorization and the issuance of such debt, or the granting 
of such priority or lien, were stayed pending appeal. 
(i) SHARING RECORDS.—If the Corporation has been appointed 
as receiver for a covered financial company, other Federal regulators 
shall make all records relating to the covered financial company 
available to the Corporation, which may be used by the Corporation 
in any manner that the Corporation determines to be appropriate. 
(j) EXPEDITED PROCEDURES FOR CERTAIN CLAIMS.— 
(1) TIME
FOR
FILING
NOTICE
OF
APPEAL.—The notice of 
appeal of any order, whether interlocutory or final, entered 
in any case brought by the Corporation against a director, 
officer, employee, agent, attorney, accountant, or appraiser of 
the covered financial company, or any other person employed 
by or providing services to a covered financial company, shall 
be filed not later than 30 days after the date of entry of 
the order. The hearing of the appeal shall be held not later 
than 120 days after the date of the notice of appeal. The 
appeal shall be decided not later than 180 days after the 
date of the notice of appeal.
H. R. 4173—130 
(2) SCHEDULING.—The court shall expedite the consider-
ation of any case brought by the Corporation against a director, 
officer, employee, agent, attorney, accountant, or appraiser of 
a covered financial company or any other person employed 
by or providing services to a covered financial company. As 
far as practicable, the court shall give such case priority on 
its docket. 
(3) JUDICIAL
DISCRETION.—The court may modify the 
schedule and limitations stated in paragraphs (1) and (2) in 
a particular case, based on a specific finding that the ends 
of justice that would be served by making such a modification 
would outweigh the best interest of the public in having the 
case resolved expeditiously. 
(k) FOREIGN INVESTIGATIONS.—The Corporation, as receiver for 
any covered financial company, and for purposes of carrying out 
any power, authority, or duty with respect to a covered financial 
company— 
(1) may request the assistance of any foreign financial 
authority and provide assistance to any foreign financial 
authority in accordance with section 8(v) of the Federal Deposit 
Insurance Act, as if the covered financial company were an 
insured depository institution, the Corporation were the appro-
priate Federal banking agency for the company, and any foreign 
financial authority were the foreign banking authority; and 
(2) may maintain an office to coordinate foreign investiga-
tions or investigations on behalf of foreign financial authorities. 
(l) PROHIBITION
ON
ENTERING
SECRECY
AGREEMENTS
AND 
PROTECTIVE ORDERS.—The Corporation may not enter into any 
agreement or approve any protective order which prohibits the 
Corporation from disclosing the terms of any settlement of an 
administrative or other action for damages or restitution brought 
by the Corporation in its capacity as receiver for a covered financial 
company. 
(m) LIQUIDATION OF CERTAIN COVERED FINANCIAL COMPANIES 
OR BRIDGE FINANCIAL COMPANIES.— 
(1) IN GENERAL.—Except as specifically provided in this 
section, and notwithstanding any other provision of law, the 
Corporation, in connection with the liquidation of any covered 
financial company or bridge financial company with respect 
to which the Corporation has been appointed as receiver, shall— 
(A) in the case of any covered financial company or 
bridge financial company that is a stockbroker, but is not 
a member of the Securities Investor Protection Corporation, 
apply the provisions of subchapter III of chapter 7 of the 
Bankruptcy Code, in respect of the distribution to any 
customer of all customer name security and customer prop-
erty and member property, as if such covered financial 
company or bridge financial company were a debtor for 
purposes of such subchapter; or 
(B) in the case of any covered financial company or 
bridge financial company that is a commodity broker, apply 
the provisions of subchapter IV of chapter 7 the Bankruptcy 
Code, in respect of the distribution to any customer of 
all customer property and member property, as if such 
covered financial company or bridge financial company 
were a debtor for purposes of such subchapter. 
(2) DEFINITIONS.—For purposes of this subsection—
H. R. 4173—131 
(A) the terms ‘‘customer’’, ‘‘customer name security’’, 
and ‘‘customer property and member property’’ have the 
same meanings as in sections 741 and 761 of title 11, 
United States Code; and 
(B) the terms ‘‘commodity broker’’ and ‘‘stockbroker’’ 
have the same meanings as in section 101 of the Bank-
ruptcy Code. 
(n) ORDERLY LIQUIDATION FUND.— 
(1) ESTABLISHMENT.—There is established in the Treasury 
of the United States a separate fund to be known as the 
‘‘Orderly Liquidation Fund’’, which shall be available to the 
Corporation to carry out the authorities contained in this title, 
for the cost of actions authorized by this title, including the 
orderly liquidation of covered financial companies, payment 
of administrative expenses, the payment of principal and 
interest by the Corporation on obligations issued under para-
graph (5), and the exercise of the authorities of the Corporation 
under this title. 
(2) PROCEEDS.—Amounts received by the Corporation, 
including assessments received under subsection (o), proceeds 
of obligations issued under paragraph (5), interest and other 
earnings from investments, and repayments to the Corporation 
by covered financial companies, shall be deposited into the 
Fund. 
(3) MANAGEMENT.—The Corporation shall manage the 
Fund in accordance with this subsection and the policies and 
procedures established under section 203(d). 
(4) INVESTMENTS.—At the request of the Corporation, the 
Secretary may invest such portion of amounts held in the 
Fund that are not, in the judgment of the Corporation, required 
to meet the current needs of the Corporation, in obligations 
of the United States having suitable maturities, as determined 
by the Corporation. The interest on and the proceeds from 
the sale or redemption of such obligations shall be credited 
to the Fund. 
(5) AUTHORITY TO ISSUE OBLIGATIONS.— 
(A) CORPORATION AUTHORIZED TO ISSUE OBLIGATIONS.— 
Upon appointment by the Secretary of the Corporation 
as receiver for a covered financial company, the Corporation 
is authorized to issue obligations to the Secretary. 
(B) SECRETARY
AUTHORIZED
TO
PURCHASE
OBLIGA-
TIONS.—The Secretary may, under such terms and condi-
tions as the Secretary may require, purchase or agree 
to purchase any obligations issued under subparagraph 
(A), and for such purpose, the Secretary is authorized to 
use as a public debt transaction the proceeds of the sale 
of any securities issued under chapter 31 of title 31, United 
States Code, and the purposes for which securities may 
be issued under chapter 31 of title 31, United States Code, 
are extended to include such purchases. 
(C) INTEREST RATE.—Each purchase of obligations by 
the Secretary under this paragraph shall be upon such 
terms and conditions as to yield a return at a rate deter-
mined by the Secretary, taking into consideration the cur-
rent average yield on outstanding marketable obligations 
of the United States of comparable maturity, plus an
H. R. 4173—132 
interest rate surcharge to be determined by the Secretary, 
which shall be greater than the difference between— 
(i) the current average rate on an index of cor-
porate obligations of comparable maturity; and 
(ii) the current average rate on outstanding 
marketable obligations of the United States of com-
parable maturity. 
(D) SECRETARY AUTHORIZED TO SELL OBLIGATIONS.— 
The Secretary may sell, upon such terms and conditions 
as the Secretary shall determine, any of the obligations 
acquired under this paragraph. 
(E) PUBLIC DEBT TRANSACTIONS.—All purchases and 
sales by the Secretary of such obligations under this para-
graph shall be treated as public debt transactions of the 
United States, and the proceeds from the sale of any obliga-
tions acquired by the Secretary under this paragraph shall 
be deposited into the Treasury of the United States as 
miscellaneous receipts. 
(6) MAXIMUM
OBLIGATION
LIMITATION.—The Corporation 
may not, in connection with the orderly liquidation of a covered 
financial company, issue or incur any obligation, if, after issuing 
or incurring the obligation, the aggregate amount of such obliga-
tions outstanding under this subsection for each covered finan-
cial company would exceed— 
(A) an amount that is equal to 10 percent of the total 
consolidated assets of the covered financial company, based 
on the most recent financial statement available, during 
the 30-day period immediately following the date of 
appointment of the Corporation as receiver (or a shorter 
time period if the Corporation has calculated the amount 
described under subparagraph (B)); and 
(B) the amount that is equal to 90 percent of the 
fair value of the total consolidated assets of each covered 
financial company that are available for repayment, after 
the time period described in subparagraph (A). 
(7) RULEMAKING.—The Corporation and the Secretary shall 
jointly, in consultation with the Council, prescribe regulations 
governing the calculation of the maximum obligation limitation 
defined in this paragraph. 
(8) RULE OF CONSTRUCTION.— 
(A) IN GENERAL.—Nothing in this section shall be con-
strued to affect the authority of the Corporation under 
subsection (a) or (b) of section 14 or section 15(c)(5) of 
the Federal Deposit Insurance Act (12 U.S.C. 1824, 
1825(c)(5)), the management of the Deposit Insurance Fund 
by the Corporation, or the resolution of insured depository 
institutions, provided that— 
(i) the authorities of the Corporation contained 
in this title shall not be used to assist the Deposit 
Insurance Fund or to assist any financial company 
under applicable law other than this Act; 
(ii) the authorities of the Corporation relating to 
the Deposit Insurance Fund, or any other responsibil-
ities of the Corporation under applicable law other 
than this title, shall not be used to assist a covered 
financial company pursuant to this title; and
H. R. 4173—133 
(iii) the Deposit Insurance Fund may not be used 
in any manner to otherwise circumvent the purposes 
of this title. 
(B) VALUATION.—For purposes of determining the 
amount of obligations under this subsection— 
(i) the Corporation shall include as an obligation 
any contingent liability of the Corporation pursuant 
to this title; and 
(ii) the Corporation shall value any contingent 
liability at its expected cost to the Corporation. 
(9) ORDERLY LIQUIDATION AND REPAYMENT PLANS.— 
(A) ORDERLY LIQUIDATION PLAN.—Amounts in the Fund 
shall be available to the Corporation with regard to a 
covered financial company for which the Corporation is 
appointed receiver after the Corporation has developed an 
orderly liquidation plan that is acceptable to the Secretary 
with regard to such covered financial company, including 
the provision and use of funds, including taking any actions 
specified under section 204(d) and subsection (h)(2)(G)(iv) 
and (h)(9) of this section, and payments to third parties. 
The orderly liquidation plan shall take into account actions 
to avoid or mitigate potential adverse effects on low income, 
minority, or underserved communities affected by the 
failure of the covered financial company, and shall provide 
for coordination with the primary financial regulatory agen-
cies, as appropriate, to ensure that such actions are taken. 
The Corporation may, at any time, amend any orderly 
liquidation plan approved by the Secretary with the concur-
rence of the Secretary. 
(B) MANDATORY REPAYMENT PLAN.— 
(i) IN
GENERAL.—No amount authorized under 
paragraph (6)(B) may be provided by the Secretary 
to the Corporation under paragraph (5), unless an 
agreement is in effect between the Secretary and the 
Corporation that— 
(I) provides a specific plan and schedule to 
achieve the repayment of the outstanding amount 
of any borrowing under paragraph (5); and 
(II) demonstrates that income to the Corpora-
tion from the liquidated assets of the covered finan-
cial company and assessments under subsection 
(o) will be sufficient to amortize the outstanding 
balance within the period established in the repay-
ment schedule and pay the interest accruing on 
such balance within the time provided in sub-
section (o)(1)(B). 
(ii) CONSULTATION
WITH
AND
REPORT
TO
CON-
GRESS.—The Secretary and the Corporation shall— 
(I) consult with the Committee on Banking, 
Housing, and Urban Affairs of the Senate and 
the Committee on Financial Services of the House 
of Representatives on the terms of any repayment 
schedule agreement; and 
(II) submit a copy of the repayment schedule 
agreement to the Committees described in sub-
clause (I) before the end of the 30-day period begin-
ning on the date on which any amount is provided
H. R. 4173—134 
by the Secretary to the Corporation under para-
graph (5). 
(10) IMPLEMENTATION EXPENSES.— 
(A) IN GENERAL.—Reasonable implementation expenses 
of the Corporation incurred after the date of enactment 
of this Act shall be treated as expenses of the Council. 
(B) REQUESTS FOR REIMBURSEMENT.—The Corporation 
shall periodically submit a request for reimbursement for 
implementation expenses to the Chairperson of the Council, 
who shall arrange for prompt reimbursement to the Cor-
poration of reasonable implementation expenses. 
(C) DEFINITION.—As used in this paragraph, the term 
‘‘implementation expenses’’— 
(i) means costs incurred by the Corporation begin-
ning on the date of enactment of this Act, as part 
of its efforts to implement this title that do not relate 
to a particular covered financial company; and 
(ii) includes the costs incurred in connection with 
the development of policies, procedures, rules, and 
regulations and other planning activities of the Cor-
poration consistent with carrying out this title. 
(o) ASSESSMENTS.— 
(1) RISK-BASED ASSESSMENTS.— 
(A) ELIGIBLE FINANCIAL COMPANIES DEFINED.—For pur-
poses of this subsection, the term ‘‘eligible financial com-
pany’’ means any bank holding company with total consoli-
dated assets equal to or greater than $50,000,000,000 and 
any nonbank financial company supervised by the Board 
of Governors. 
(B) ASSESSMENTS.—The Corporation shall charge one 
or more risk-based assessments in accordance with the 
provisions of subparagraph (D), if such assessments are 
necessary to pay in full the obligations issued by the Cor-
poration to the Secretary under this title within 60 months 
of the date of issuance of such obligations. 
(C) EXTENSIONS AUTHORIZED.—The Corporation may, 
with the approval of the Secretary, extend the time period 
under subparagraph (B), if the Corporation determines that 
an extension is necessary to avoid a serious adverse effect 
on the financial system of the United States. 
(D) APPLICATION
OF
ASSESSMENTS.—To meet the 
requirements of subparagraph (B), the Corporation shall— 
(i) impose assessments, as soon as practicable, on 
any claimant that received additional payments or 
amounts from the Corporation pursuant to subsection 
(b)(4), (d)(4), or (h)(5)(E), except for payments or 
amounts necessary to initiate and continue operations 
essential to implementation of the receivership or any 
bridge financial company, to recover on a cumulative 
basis, the entire difference between— 
(I) the aggregate value the claimant received 
from the Corporation on a claim pursuant to this 
title (including pursuant to subsection (b)(4), (d)(4), 
and (h)(5)(E)), as of the date on which such value 
was received; and 
(II) the value the claimant was entitled to 
receive from the Corporation on such claim solely
H. R. 4173—135 
from the proceeds of the liquidation of the covered 
financial company under this title; and 
(ii) if the amounts to be recovered on a cumulative 
basis under clause (i) are insufficient to meet the 
requirements of subparagraph (B), after taking into 
account the considerations set forth in paragraph (4), 
impose assessments on— 
(I) eligible financial companies; and 
(II) financial companies with total consolidated 
assets equal to or greater than $50,000,000,000 
that are not eligible financial companies. 
(E) PROVISION OF FINANCING.—Payments or amounts 
necessary to initiate and continue operations essential to 
implementation of the receivership or any bridge financial 
company described in subparagraph (D)(i) shall not include 
the provision of financing, as defined by rule of the Corpora-
tion, to third parties. 
(2) GRADUATED ASSESSMENT RATE.—The Corporation shall 
impose assessments on a graduated basis, with financial compa-
nies having greater assets and risk being assessed at a higher 
rate. 
(3) NOTIFICATION
AND
PAYMENT.—The Corporation shall 
notify each financial company of that company’s assessment 
under this subsection. Any financial company subject to assess-
ment under this subsection shall pay such assessment in accord-
ance with the regulations prescribed pursuant to paragraph 
(6). 
(4) RISK-BASED ASSESSMENT CONSIDERATIONS.—In imposing 
assessments under paragraph (1)(D)(ii), the Corporation shall 
use a risk matrix. The Council shall make a recommendation 
to the Corporation on the risk matrix to be used in imposing 
such assessments, and the Corporation shall take into account 
any such recommendation in the establishment of the risk 
matrix to be used to impose such assessments. In recom-
mending or establishing such risk matrix, the Council and 
the Corporation, respectively, shall take into account— 
(A) economic conditions generally affecting financial 
companies so as to allow assessments to increase during 
more favorable economic conditions and to decrease during 
less favorable economic conditions; 
(B) any assessments imposed on a financial company 
or an affiliate of a financial company that— 
(i) is an insured depository institution, assessed 
pursuant to section 7 or 13(c)(4)(G) of the Federal 
Deposit Insurance Act; 
(ii) is a member of the Securities Investor Protec-
tion Corporation, assessed pursuant to section 4 of 
the Securities Investor Protection Act of 1970 (15 
U.S.C. 78ddd); 
(iii) is an insured credit union, assessed pursuant 
to section 202(c)(1)(A)(i) of the Federal Credit Union 
Act (12 U.S.C. 1782(c)(1)(A)(i)); or 
(iv) is an insurance company, assessed pursuant 
to applicable State law to cover (or reimburse payments 
made to cover) the costs of the rehabilitation, liquida-
tion, or other State insolvency proceeding with respect 
to 1 or more insurance companies;
H. R. 4173—136 
(C) the risks presented by the financial company to 
the financial system and the extent to which the financial 
company has benefitted, or likely would benefit, from the 
orderly liquidation of a financial company under this title, 
including— 
(i) the amount, different categories, and concentra-
tions of assets of the financial company and its affili-
ates, including both on-balance sheet and off-balance 
sheet assets; 
(ii) the activities of the financial company and 
its affiliates; 
(iii) the relevant market share of the financial 
company and its affiliates; 
(iv) the extent to which the financial company 
is leveraged; 
(v) the potential exposure to sudden calls on 
liquidity precipitated by economic distress; 
(vi) the amount, maturity, volatility, and stability 
of the company’s financial obligations to, and relation-
ship with, other financial companies; 
(vii) the amount, maturity, volatility, and stability 
of the liabilities of the company, including the degree 
of reliance on short-term funding, taking into consider-
ation existing systems for measuring a company’s risk- 
based capital; 
(viii) the stability and variety of the company’s 
sources of funding; 
(ix) the company’s importance as a source of credit 
for households, businesses, and State and local govern-
ments and as a source of liquidity for the financial 
system; 
(x) the extent to which assets are simply managed 
and not owned by the financial company and the extent 
to which ownership of assets under management is 
diffuse; and 
(xi) the amount, different categories, and con-
centrations of liabilities, both insured and uninsured, 
contingent and noncontingent, including both on-bal-
ance sheet and off-balance sheet liabilities, of the finan-
cial company and its affiliates; 
(D) any risks presented by the financial company 
during the 10-year period immediately prior to the appoint-
ment of the Corporation as receiver for the covered financial 
company that contributed to the failure of the covered 
financial company; and 
(E) such other risk-related factors as the Corporation, 
or the Council, as applicable, may determine to be appro-
priate. 
(5) COLLECTION OF INFORMATION.—The Corporation may 
impose on covered financial companies such collection of 
information requirements as the Corporation deems necessary 
to carry out this subsection after the appointment of the Cor-
poration as receiver under this title. 
(6) RULEMAKING.— 
(A) IN GENERAL.—The Corporation shall prescribe regu-
lations to carry out this subsection. The Corporation shall
H. R. 4173—137 
consult with the Secretary in the development and finaliza-
tion of such regulations. 
(B) EQUITABLE
TREATMENT.—The regulations pre-
scribed under subparagraph (A) shall take into account 
the differences in risks posed to the financial stability 
of the United States by financial companies, the differences 
in the liability structures of financial companies, and the 
different bases for other assessments that such financial 
companies may be required to pay, to ensure that assessed 
financial companies are treated equitably and that assess-
ments under this subsection reflect such differences. 
(p) UNENFORCEABILITY OF CERTAIN AGREEMENTS.— 
(1) IN GENERAL.—No provision described in paragraph (2) 
shall be enforceable against or impose any liability on any 
person, as such enforcement or liability shall be contrary to 
public policy. 
(2) PROHIBITED PROVISIONS.—A provision described in this 
paragraph is any term contained in any existing or future 
standstill, confidentiality, or other agreement that, directly or 
indirectly— 
(A) affects, restricts, or limits the ability of any person 
to offer to acquire or acquire; 
(B) prohibits any person from offering to acquire or 
acquiring; or 
(C) prohibits any person from using any previously 
disclosed information in connection with any such offer 
to acquire or acquisition of, 
all or part of any covered financial company, including any 
liabilities, assets, or interest therein, in connection with any 
transaction in which the Corporation exercises its authority 
under this title. 
(q) OTHER EXEMPTIONS.— 
(1) IN GENERAL.—When acting as a receiver under this 
title— 
(A) the Corporation, including its franchise, its capital, 
reserves and surplus, and its income, shall be exempt from 
all taxation imposed by any State, county, municipality, 
or local taxing authority, except that any real property 
of the Corporation shall be subject to State, territorial, 
county, municipal, or local taxation to the same extent 
according to its value as other real property is taxed, except 
that, notwithstanding the failure of any person to challenge 
an assessment under State law of the value of such prop-
erty, such value, and the tax thereon, shall be determined 
as of the period for which such tax is imposed; 
(B) no property of the Corporation shall be subject 
to levy, attachment, garnishment, foreclosure, or sale with-
out the consent of the Corporation, nor shall any involun-
tary lien attach to the property of the Corporation; and 
(C) the Corporation shall not be liable for any amounts 
in the nature of penalties or fines, including those arising 
from the failure of any person to pay any real property, 
personal property, probate, or recording tax or any 
recording or filing fees when due; and 
(D) the Corporation shall be exempt from all prosecu-
tion by the United States or any State, county, munici-
pality, or local authority for any criminal offense arising