b'Authority of the Federal Financing Bank to Provide Loans to\nthe Resolution Trust Corporation\nT h e R eso lu tio n T rust C orporation is a "federal a g e n c y \xe2\x80\x9d w ithin the m eaning o f the Federal\nF in an cin g B an k A ct o f 1973, and the RTC is authorized to issue financial obligations under\nthe F ed eral H o m e L oan Bank A ct. Accordingly, u n d er the F FB Act the F ederal F inancing\nB a n k is au th o rized to provide loans to the RTC.\n\nFebruary 14, 1990\nM\n\nem orandum\n\nO\n\np in io n fo r t h e\n\nDepartm ent\n\nof the\n\nG en era l C o u n sel\n\nT rea su ry\n\nThis memorandum responds to your request for our views as to whether\nthe Federal Financing Bank (\xe2\x80\x9cthe Bank\xe2\x80\x9d) is authorized to provide loans to\nthe Resolution Trust Corporation (\xe2\x80\x9cRTC\xe2\x80\x9d). Section 6 of the Federal Financ\xc2\xad\ning Bank Act of 1973 (\xe2\x80\x9cthe FFB Act\xe2\x80\x9d), 12 U.S.C. \xc2\xa7 2285, authorizes the\nBank to provide loans by directly purchasing notes or other obligations from\nany \xe2\x80\x9cFederal agency\xe2\x80\x9d that is authorized to issue such obligations. As ex\xc2\xad\nplained more fully below, we conclude that RTC is a \xe2\x80\x9cFederal agency\xe2\x80\x9d within\nthe meaning o f the FFB Act and that RTC is authorized to issue obligations\nby virtue of its authority under section 21A(b)(4) o f the Federal Home Loan\nBank Act, 12 U.S.C. \xc2\xa7 1441a(b)(4). Accordingly, we conclude that the Bank\nmay provide loans to RTC by directly purchasing RTC notes or obligations.\n\nI. Background\nThe Federal Financing Bank was created in 1973 to reduce the cost of\nfederal and federally assisted borrowing by coordinating financing programs\namong various federal agencies. Prior to enactment of the FFB Act, many\nagencies financed their programs by issuing their own debt securities di\xc2\xad\nrectly into the market. H.R. Rep. No. 299, 93d Cong., 1st Sess. 2 (1973),\nreprinted in 1973 U.S.C.C.A.N. 3153, 3154. This required the agencies to\ndevelop their own financing staffs and consequently to incur significant under\xc2\xad\n\n20\n\n\x0cwriting costs. Lack of coordination among agencies in timing the introduc\xc2\xad\ntion of various issues into the market and liquidity costs associated with having\na proliferation of competing small issues also increased borrowing costs. Id.\nThe FFB Act reduced these costs by allowing agencies to issue obligations\ndirectly to the Bank, which would then issue its own securities into the\nmarket or directly to the Treasury, which is the current procedure. Section 6\nof the Act provides, in part, that \xe2\x80\x9c[a]ny Federal agency which is authorized to\nissue, sell, or guarantee any obligation is authorized to issue or sell such\nobligations directly to the Bank.\xe2\x80\x9d 12 U.S.C. \xc2\xa7 2285(a). The Bank thus may\nprovide financing for the Resolution Trust Corporation if, within the meaning\nof the FFB Act, (1) RTC is a \xe2\x80\x9cFederal agency,\xe2\x80\x9d and (2) RTC is authorized to\n\xe2\x80\x9cissue, sell, or guarantee any obligation[s].\xe2\x80\x9d\n\nII. Discussion\nA. RTC is a "Federal Agency" Within the Meaning o f the FFB Act\nWe believe that RTC is a federal agency within the meaning of the FFB\nAct. Section 3(a) of the Act provides that the term \xe2\x80\x98\xe2\x80\x9c Federal agency\xe2\x80\x99 means\xe2\x80\x9d\nan executive department, an independent Federal establishment,\nor a corporation or other entity established by the Congress\nwhich is owned in whole or in part by the United States.\n12 U.S.C. \xc2\xa7 2282(1). In our view, RTC is a \xe2\x80\x9ccorporation or other entity\nestablished by the Congress which is owned in whole or in part by the\nUnited States.\xe2\x80\x9d 1\n1. Scope o f the Corporation Coverage Clause\nThere is no dispute that RTC is a \xe2\x80\x9ccorporation\xe2\x80\x9d and that it was \xe2\x80\x9cestab\xc2\xad\nlished by the Congress.\xe2\x80\x9d See Federal Home Loan Bank Act, section\n21A(b)(l)(A), as added by Financial Institutions Reform, Recovery and En\xc2\xad\nforcement Act of 1989 (\xe2\x80\x9cFIRREA\xe2\x80\x9d), Pub. L. No. 101-73, \xc2\xa7 501, 103 Stat.\n183, 369 (codified at 12 U.S.C. \xc2\xa7 1441a(b)(l)(A)) (\xe2\x80\x9cThere is hereby estab\xc2\xad\nlished a Corporation to be known as the Resolution Trust Corporation . . . .\xe2\x80\x9d).\nThe central question in determining whether RTC is a \xe2\x80\x9cFederal agency\xe2\x80\x9d\nwithin the meaning of the FFB Act therefore is whether it is \xe2\x80\x9cowned in\nwhole or in part by the United States.\xe2\x80\x9d\nThe FFB Act does not define the phrase \xe2\x80\x9cowned in whole or in part by\nthe United States.\xe2\x80\x9d Ordinarily, ownership in a corporation is a function of\nstock ownership: Under general principles of corporate law, one has an\n\n1Throughout this opinion, we will refer to this phrase as the "corporation coverage clause.\xe2\x80\x9d\n\n21\n\n\x0cownership interest in a corporation if he or she owns capital stock in that\ncorporation. Stock ownership in turn entitles the holder to certain owner\xc2\xad\nship rights. This conventional ownership test, however, is not especially\nhelpful in determining ownership in government corporations. Several gov\xc2\xad\nernm ent corporations, such as the Tennessee Valley Authority and the\nGovernment National Mortgage Association, were intended to be \xe2\x80\x9cFederal\nagencies\xe2\x80\x9d within the scope o f the corporation coverage clause, but they do\nnot issue stock at all.2 See 16 U.S.C. \xc2\xa7\xc2\xa7 831-831dd (outlining powers and\nduties o f TVA); 12 U.S.C. \xc2\xa7\xc2\xa7 1716-1724 (1970 & Supp. Ill 1973) (outlining\npowers and duties o f GNMA); see also infra pp. 22-24. Private capital\ncontributions to government corporations, moreover, do not always entitle\ncontributors to the kind of ownership rights that typically follow from capital\ninvestment in private corporations. For example, although RTC issues \xe2\x80\x9ccapi\xc2\xad\ntal certificates\xe2\x80\x9d to the Resolution Funding Corporation (\xe2\x80\x9cREFCORP\xe2\x80\x9d), a private\ncorporation that raises money for RTC by selling REFCORP bonds, these\ncertificates entitle REFCORP to few of the usual rights of corporate owner\xc2\xad\nship. The certificates are nonvoting, pay no dividends, and do not provide\nREFCORP with any control over the management of RTC. See infra pp. 2930. Thus, the precise scope o f the corporation coverage clause is difficult to\ndiscern from the text of the clause alone.\nThe legislative history of the FFB Act, however, provides further guid\xc2\xad\nance on the meaning of the clause by providing examples of the kinds of\ncorporate entities that were and were not intended to be covered by the\nclause. By contrasting the characteristics o f the included and excluded enti\xc2\xad\nties, one can glean a clearer understanding of the reach of the clause.\nThe legislative history shows that Congress intended the FFB Act3 to\ncover a range o f corporate entities, including the Government National Mort\xc2\xad\ngage Association, 118 Cong. Rec. 22,015 (1972); the Export-Import Bank of\nthe United States, 119 Cong. Rec. 36,004 (1973), 1973 House Hearings at\n15; the Commodity Credit Corporation, id.-, S. Rep. No. 166, 93d Cong., 1st\nSess. 5 (1973); and the Tennessee Valley Authority, H.R. Rep. No. 299 at 5,\n1973 U.S.C.C.A.N. at 3157; 1973 House Hearings at 33.4 In contrast to the\nexcluded corporations, see infra pp. 24-26, the essential characteristics of\n2 D espite its eligibility to finance certain issues through the Bank, see Federal Financing Bank Act:\nH earings Before the House Comm, on Ways and Means, 93d Cong., 1st Sess. 15 (1973) (\xe2\x80\x9c1973 House\nH earings\xe2\x80\x9d) (GN M A mortgage-backed securities); 118 Cong. Rec. 22,015 (1972) (same), GNMA has\nnever done so.\n3The original Federal Financing Bank bill, S. 3001. passed in the Senate during the second session of\nthe N inety-Second Congress in 1972 w as favorably reported by the House Ways and M eans Comm ittee.\nT he full House, however, was not able to act upon the bill before adjournment. H.R. 5874, the bill\nultim ately enacted during the first session of the Ninety-Third Congress in 1973, was very sim ilar to S.\n1001 and included the identical definition of \xe2\x80\x9cFederal agency." Compare S. 3001, 92d Cong., 2d Sess.\n(1972) with H.R. 5874, 93d Cong., 1st Sess. (1973).\n4By statute, all o f these entities were defined as \xe2\x80\x9ccorporate\xe2\x80\x9d entities. 12 U.S.C. \xc2\xa7 1717(a)(2)(A) (1970)\n(G N M A ); id. \xc2\xa7 635(a) (Export-Import Bank); 15 U.S.C. \xc2\xa7 714(1970) (Commodity Credit Corporation);\n16 U .S.C. \xc2\xa7 831 (1970) (TVA). Although TVA is a \xe2\x80\x9cFederal agency\xe2\x80\x9d eligible to borrow from the Bank\nunder section 6 of the FFB Act, the TVA is exempt from the prior approval requirements of section 7 of\nthe Act, 12 U.S.C. \xc2\xa7 2286. See infra note 7.\n\n22\n\n\x0ceach o f these covered corporate entities were typical of the characteristics of\ngovernment entities generally. Each of these corporations received govern\xc2\xad\nment funding, was subject to significant federal oversight and, with one\nexception, generally issued securities backed by the full faith and credit of\nthe federal government.5\nEach of these four corporations received substantial government funding.\nTwo o f them received direct capital contributions from the United States, see\n12 U.S.C. \xc2\xa7 635b (1970) ($1,000,000,000 for Export-Import Bank); 15 U.S.C.\n\xc2\xa7 714e (1970) ($100,000,000 for Commodity Credit Corporation), and at\nleast three received direct appropriations. See Pub. L. No. 93-137, 87 Stat.\n491, 491 (1973) ($19,821,000 for GNMA); Pub. L. No. 93-135, 87 Stat. 468,\n477 (1973) ($3,301,940,000 for Commodity Credit Corporation); Pub. L.\nNo. 93-97, 87 Stat. 318, 328 (1973) ($45,676,000 for TVA).\nThese corporations were generally subject to closer federal oversight than\nwere the excluded corporations, see infra pp. 25-26, although the precise\nrelationship of the various corporations to the federal government differed.\nIndeed, two of the four covered corporations were placed within executive\ndepartments. See 12 U.S.C. \xc2\xa7 1717(a)(2)(A) (1970) (declaring GNMA to be\na body corporate within the Department of Housing and Urban Develop\xc2\xad\nment); id. \xc2\xa7 1723(a) (powers and duties of GNMA vested in the Secretary of\nHUD); 15 U.S.C. \xc2\xa7 714 (1970) (Commodity Credit Corporation is an instru\xc2\xad\nmentality of the United States within the Department of Agriculture and subject\nto the general supervision and direction of the Secretary of Agriculture).6\nThe principal officers and directors of these covered corporations were\nnot elected by private entities; they were appointed directly by the President\nor by the head of an executive department. See 12 U.S.C. \xc2\xa7 1723(a) (1970)\n(Secretary of HUD selects president, vice-president, and other principal of\xc2\xad\nficers of GNMA); id. \xc2\xa7 635a(b) & (c) (board of directors of Export-Import\nBank, which includes its president and first vice-president, are appointed by\nPresident with advice and consent of the Senate); 15 U.S.C. \xc2\xa7 714g(a) (1970)\n(six members of board of directors of Commodity Credit Corporation ap\xc2\xad\npointed by President with advice and consent of the Senate; Secretary of\nAgriculture is a member ex officio and serves as Chairman); 16 U.S.C.\n\xc2\xa7 831a(a) (1970) (board of directors of TVA appointed by President with\nadvice and consent of the Senate).\n\n\xe2\x80\x99 The significance o f the references to these corporations for purposes of determ ining congressional\nintent is not so much that we know whether these particular corporations were to be covered or not\n(although this is important), but rather that we know the types of corporations Congress did and did not\nintend to be covered. Indeed, several of these particular entities have been substantially restructured\nsince the FFB Act was enacted in 1973. O f course, changes in the structure, managem ent and/or\nfunding o f these corporations after the date of enactment of the FFB Act are irrelevant to determining\nCongress\' intent in enacting the legislation. We have considered, therefore, only their structure and\noperations at the time the FFB Act was considered and enacted.\n\xe2\x80\x98 The other covered corporations functioned as independent agencies of the United States See, e.g., 12\nU.S.C. \xc2\xa7 635(a) (1970) (Export-Import Bank).\n\n23\n\n\x0cFinally, each o f these corporations, except for the Tennessee Valley Au\xc2\xad\nthority, generally issued obligations that were backed by the full faith and\ncredit of the United States government.7 See 12 U.S.C. \xc2\xa7 635k (1970) (\xe2\x80\x9cAll\nguarantees and insurance issued by the [Export-Import] Bank shall be con\xc2\xad\nsidered contingent obligations backed by the full faith and credit of the\nGovernment o f the United States of America.\xe2\x80\x9d); 15 U.S.C. \xc2\xa7 713a-4 (1970)\n(obligations of Commodity Credit Corporation \xe2\x80\x9cshall be fully and uncondi\xc2\xad\ntionally guaranteed both as to interest and principal by the United States\xe2\x80\x9d);\n12 U.S.C. \xc2\xa7 1721(g) (Supp. Ill 1973) (full faith and credit of United States\npledged to payment of certain GNMA obligations); but see 12 U.S.C. \xc2\xa7 1721(b)\n(1970) (certain other GNMA obligations not backed by government).\nThe characteristics of these covered corporations were very different from\nthe characteristics of those entities that we know from the legislative history\nwere intended to be excluded from coverage. The committee reports on the\nFFB Act state that the Act would not cover the federal land banks, the\nfederal intermediate credit banks, the banks for cooperatives, the federal\nhome loan banks, the Federal Home Loan Mortgage Corporation, the Fed\xc2\xad\neral National Mortgage Association, and the federal reserve banks. H.R.\nRep. No. 299, at 5, 1973 U.S.C.C.A.N. at 3157; S. Rep. No. 166, at 3. At\nthe time, all of these excluded corporations were wholly privately financed,\nhad significant management independence and, with one exception,8 did not\nissue\'obligations backed by the full faith and credit of the United States.\nThe Federal National Mortgage Association, the federal home loan banks,\nthe banks for cooperatives, the federal land banks, and the federal intermedi\xc2\xad\nate credit banks were initially capitalized in part by contributions from the\nUnited States.9 However, by the time the FFB Act was enacted, the shares\n\n\xe2\x80\x99 The bulk o f TVA\xe2\x80\x99s existing borrowing authority in 1973 consisted o f obligations that were not guaran\xc2\xad\nteed by the governm ent, see 16 U.S.C. \xc2\xa7 831n-4(b) (1970), but TVA had previously issued bonds that\nw ere backed by the full faith and credit o f the United States, see id. \xc2\xa7\xc2\xa7 83 I n -1 & 831n-3. Indeed, in\norder to exem pt TVA from the prior approval requirements of the FFB Act, Congress inserted a clause\ninto section 7 o f the A ct exempting from these requirements any \xe2\x80\x9cobligations issued or sold pursuant to\nan Act o f Congress which expressly prohibits any guarantee of such obligations by the United States.\xe2\x80\x9d\n12 U.S.C. \xc2\xa7 2286(a). T his exemption w ould apply to few, if any, agencies other than TVA, because\nvirtually all federal agencies covered by the FFB Act issued obligations backed by the government.\n* Federal Reserve notes were and continue to be \xe2\x80\x9cobligations of the United States,\xe2\x80\x9d 12 U.S.C. \xc2\xa7 411\n(1970), backed by the federal government. The FFB Act, however, expressly excludes from its coverage\n\xe2\x80\x9c Federal Reserve notes.\xe2\x80\x9d 12 U.S.C. \xc2\xa7 2282(2). Thus, notwithstanding their private capitalization and\nsubstantial day-to-day management independence, the federal reserve banks could not obtain financing\nfrom the Bank by issuing \xe2\x80\x9cFederal Reserve notes" to the Bank.\n\xe2\x80\x99 See 12 U.S.C. \xc2\xa7 1718(a) & (d) (1970) (FNMA); id. \xc2\xa7 1426(f)\n(federal hom e loan banks); id. \xc2\xa7 1134d(a)(l) (banks for cooperatives), repealed by Pub. L. No. 92181, \xc2\xa7 5.26(a), 85 Stat. 583, 624(1971); 12 U.S.C. \xc2\xa7\xc2\xa7 692 & 695 (1970) (federal land banks), repealed\nby Pub. L. No. 92-181, \xc2\xa7 5.26(a); 12 U .S.C. \xc2\xa7 1061(a)(1) (1970) (federal intermediate credit banks),\nrepealed by Pub. L. No. 92-181, \xc2\xa7 5.26(a).\n\n24\n\n\x0cof the United States had been retired, and these entities were entirely pri\xc2\xad\nvately capitalized.10 Although the federal reserve banks were originally\nauthorized to issue stock to the United States, they had never done so. See\n12 U.S.C. note following section 284 (1970). The Federal Home Loan Mort\xc2\xad\ngage Corporation (\xe2\x80\x9cFHLMC\xe2\x80\x9d) had, from its inception, obtained all of its\nequity capital from private sources. See 12 U.S.C. \xc2\xa7 1453 (1970).\nIn addition to being fully privately capitalized, these entities generally\nrelied solely upon their own income, rather than upon appropriations, to\nfund their operating expenses. See 1974 Budget Appendix, supra note 10, at\n1098 (\xe2\x80\x9cThe entire operating expenses of the [Federal Home Loan Banks] are\npaid from their own income and are not included in the budget of the United\nStates.\xe2\x80\x9d); id. at 1094 (banks for cooperatives); id. at 1097 (federal land banks);\nid. at 1095 (federal intermediate credit banks).\nThese corporations were relatively independent in the management of\ntheir day-to-day affairs, although the extent of direct federal supervision\ndiffered substantially. With one exception,11 private entities elected a sub\xc2\xad\nstantial majority of the boards of directors of each of these corporations, and\nthe shares issued by these corporations consisted o f voting stock. Thus,\ntwo-thirds of the directors of the FNMA, the federal reserve banks, and the\nfederal home loan banks were elected by the respective shareholders and\nmembers o f these entities. See 12 U.S.C. \xc2\xa7 1723(b) (1970) (FNMA); id. \xc2\xa7\xc2\xa7\n302 & 304 (federal reserve banks); id. \xc2\xa7 1427(a) (federal home loan banks).\nSimilarly, private parties elected a substantial majority o f the boards of di\xc2\xad\nrectors of the three types of farm credit banks. Under 12 U.S.C. \xc2\xa7 2224\n(Supp. Ill 1973), the same seven members of the board of directors of each\nfarm credit district served as the board of directors for the federal land bank,\nthe federal intermediate credit bank, and the bank for cooperatives of each\nsuch district. Six of the seven members were elected by private entities:\n\n10 See 12 U.S.C. \xc2\xa7 1718(a) (1970) (requiring retirement of preferred shares in FNMA held by the Secre\xc2\xad\ntary o f the Treasury); id. \xc2\xa7 1426(g) (retirement o f stock held by the United States in federal home loan\nbanks); 12 U.S.C. \xc2\xa7 2126 (Supp. Ill 1973) (providing for retirement of stock held by the Governor o f the\nFarm Credit Administration in the banks for cooperatives); U.S. Bureau o f the Budget, The Budget o f the\nUnited Stales Government, Fiscal Year 1974, Appendix at 1094 (1973) (\xe2\x80\x9c1974 Budget Appendix\xe2\x80\x9d) (U.S.\nGovernm ent capital m banks for cooperatives was fully retired on December 31,1968); id. at 1097 (\xe2\x80\x9cThe\nlast o f the Government capital that had been invested in the [federal land banks] was repaid in 1947."); 12\nU.S.C. \xc2\xa7 2073(g) (Supp. Ill 1973) (providing for retirement of stock held by the Farm Credit Adm inistra\xc2\xad\ntion in the federal intermediate credit banks); 1974 Budget Appendix at 1095 (government-held stock in\nfederal intermediate credit banks was fully retired on December 31, 1968). Although the various farm\ncredit banks were authorized to issue nonvoting stock to the Governor of the Farm Credit Adm inistration\non a tem porary basis when iieeded to meet emergency credit needs of borrowers, see 12 U.S.C. \xc2\xa7 2151(a)\n(Supp. Ill 1973); see also id. \xc2\xa7\xc2\xa7 2013(d), 2073(d) & 2124(e) (authorizing issuance of nonvoting stock to\nGovernor o f the Farm Credit Administration), the ownership o f such stock was, for m ost purposes, e x \xc2\xad\npressly \xe2\x80\x9cdeemed to not change the status of ownership of the banks," id. \xc2\xa7 2151(a), and such stock was\nrequired to be retired when no longer needed. See id. \xc2\xa7 2151(b)\n" T h e members of the Federal Home Loan Bank Board, who were appointed by the President with the\nadvice and consent of the Senate, see Reorganization Plan No. 3 of 1947, \xc2\xa7 2(a), 3 C.F.R. 1071, 1072\n(1943-1948), reprinted in 12 U.S.C. \xc2\xa7 1437 note at 2532 (1970), served as the board o f directors o f the\nFederal Home Loan Mortgage Corporation. 12 U.S.C. \xc2\xa7 1452(a) (1970).\n\n25\n\n\x0ctwo were elected by the shareholders o f the federal land bank for that farm\ncredit district, two by the shareholders of the federal intermediate credit\nbank, and two by the shareholders of the bank for cooperatives. 12 U.S.C. \xc2\xa7\n2223(a) (Supp. Ill 1973).12\nFinally, each o f these corporations (except the federal reserve banks13)\nissued obligations that were not guaranteed by the full faith and credit of the\nUnited States government. Indeed, for most of these corporations there was\nan express statutory bar to full faith and credit pledges. See 12 U.S.C. \xc2\xa7\n1719(b) (1970) (FNMA); id. \xc2\xa7 1435 (federal home loan banks); 12 U.S.C. \xc2\xa7\n2155(c) (Supp. Ill 1973) (federal land banks, federal intermediate credit\nbanks, and banks for cooperatives). Although no provision expressly barred\nFHLMC from issuing obligations backed by the federal government, section\n306(c) of the Federal Home Loan Mortgage Corporation Act, 12 U.S.C. \xc2\xa7\n1455(c) (1970), provided that the obligations of the corporation would be\nguaranteed, if at all, by the federal home loan banks. There was no provi\xc2\xad\nsion for FHLM C\xe2\x80\x99s obligations to be backed by the full faith and credit of the\nUnited States.\nFrom this review of the entities that we know Congress considered and\ndeterm ined were either covered or not, it is relatively clear that the Act was\nintended generally to reach a range of federally created corporations that\nreceive substantial funding from the government, that are subject to signifi\xc2\xad\ncant federal control, and that issue obligations guaranteed by the federal\ngovernment. On the other hand, the Act was intended generally to exclude\nthe fairly small group of federally created corporations that are wholly pri\xc2\xad\nvately funded, that have a significant measure o f independence in their\nm anagem ent, and that issue obligations not backed by the full faith and\ncredit of the federal government.14 The apparent purpose of excluding from\ncoverage this latter type of corporation was to prevent privately owned insti\xc2\xad\n\n12Section 2223(a) provided, in part, that:\nTwo o f the district directors shall be elected by the Federal land bank associations, two\nby the production credit associations, and two by the borrowers from or subscribers to\nthe guaranty fund o f the bank for cooperatives.\nT hese three groups which, in turn, were fully privately owned and managed, see 12 U.S.C. \xc2\xa7\xc2\xa7 2032 &\n2034 (Supp. III 1973) (federal land bank associations \xe2\x80\x94 which were distinct entities from the federal\nland banks); id. \xc2\xa7\xc2\xa7 2092 & 2094 (production credit associations), were the respective shareholders o f the\nfederal land banks, id. \xc2\xa7 2013(b), the federal intermediate credit banks, id. \xc2\xa7 2073(b), and the banks for\ncooperatives, id. \xc2\xa7\xc2\xa7 2124(c) & 2127.\n13Federal Reserve notes were obligations o f the United States backed by the federal government. See\nsupra note 8.\n14O f course, any given corporation may not have all o f the principal characteristics of either the in\xc2\xad\ncluded or excluded corporations mentioned above, or it may have the characteristics o f one or the other,\nbut to a lesser or greater extent. In these circum stances, one must determine, with due regard for the\npurposes o f the FFB Act, whether the corporation\'s principal characteristics render it most analogous to\nthose corporations that were intended to be covered by the FFB Act or to those that were not.\n\n26\n\n\x0ctutions from obtaining the advantages of Bank financing, in particular the\nbenefit of financing backed by the full faith and credit of the United States.\nSee infra note 16.13\nThe few actual discussions of the scope of the corporation coverage clause\nin Congress or in the materials submitted in connection with the legislation\nare fully consonant with these conclusions concerning the scope of the clause.\nThe original Federal Financing Bank bill was proposed by the Department\nof the Treasury, and the definition of \xe2\x80\x9cFederal agency\xe2\x80\x9d was taken unaltered\nfrom the language of that original Treasury proposal. Compare 12 U.S.C. \xc2\xa7\n2282 with Letter from John B. Connally, Secretary of the Treasury, to Carl\nB. Albert, Speaker of the House of Representatives (Dec. 9, 1971) (attaching\ndraft bill). In submitting the proposed bill, the Secretary of the Treasury\nemphasized that the corporation coverage clause was intended to exclude\n\xe2\x80\x9cGovernment-sponsored agencies which are entirely privately owned and\nissue obligations which are not directly guaranteed by the Government.\xe2\x80\x9d Id.\nThe Secretary\xe2\x80\x99s understanding of the clause as excluding from coverage\ngovernment corporations that were wholly privately owned and whose obli\xc2\xad\ngations were not backed by the government is supported by testimony given\nby Paul Volcker, then-Under Secretary of the Treasury for Monetary Affairs,\nbefore the House Committee on Ways and Means. In the course of exten\xc2\xad\nsive questioning concerning the coverage of the proposed legislation, Mr.\nVolcker reiterated that wholly privately owned corporations were excluded\nfrom coverage. He explained that one of the principal reasons for excluding\nthese corporations was to prevent them from issuing to the Federal Financ\xc2\xad\ning Bank securities that were not government-backed in exchange for Bank\nfinancing that would be backed by the full faith and credit of the United\nStates.16 These comments, especially taken together with others to the effect\n13 These conclusions as to the reach of the clause are supported by the treatment of governm ent-spon\xc2\xad\nsored agencies in the annual Budgets o f the United States. The list of corporations that the House and\nSenate Reports stated were excluded from the FFB Act\xe2\x80\x99s coverage closely corresponds to the list of\n\xe2\x80\x9cgovernment-sponsored credit agencies\xe2\x80\x9d contained in the appendix to the annual Budget report. Thus,\nfor example, the appendix to the Fiscal Year 1974 Budget (which was the last to be submitted before the\nFFB act was passed) lists six such entities: the FNMA, the banks for cooperatives, the federal interme\xc2\xad\ndiate credit banks, the federal land banks, the federal home loan banks, and the FHLMC See 1974\nB udget Appendix at 1084, 1092-1100. This almost exact correspondence with the list o f excluded\ncorporations is not coincidental; these corporations are excluded from the normal budgetary process\nbecause they are considered to be \xe2\x80\x9cprivately owned.\xe2\x80\x9d Id. ; see also Report o f the President\'s Commission\non Budget Concepts 30 (1967) (\xe2\x80\x9cGovernment-sponsored enterprises [should] be omitted from the bud\xc2\xad\nget when such enterprises are completely privately owned.\xe2\x80\x9d).\n\xe2\x80\x9c Mr. Volcker testified that there were two basic reasons for excluding certain \xe2\x80\x9c privately owned enter\xc2\xad\nprise agencies":\nOne is that these institutions are privately owned, and there is some philosophic question\nin our mind, if you will, whether privately owned institutions should in the nature of\nthings have access to this bank, which, of course, will be emitting full faith and credit\nsecurities of the United States.\n[Second,] [i]f you look at the practicalities, these agencies . . . are large borrowers\nand they are well established and have a niche in the market, so to speak. . . . Their\nsecurities are somewhat more easily traded than many of the securities that we do cover\nhere.\nFederal Financing Bank A ct: Hearings on S. 3001 Before the House Comm, on Ways and M eans, 92d\nCong., 2d Sess. 26-27 (1972) (\xe2\x80\x9c1972 House Hearings\xe2\x80\x9d).\n\n27\n\n\x0cthat the term \xe2\x80\x9cFederal agency\xe2\x80\x9d was intended to have a broad reach, see, e.g.,\nFederal Financing Authority: Hearings on S. 1015, S. 1699, S. 3001 & S.\n3215 Before the Senate Comm, on Banking, Housing and Urban Affairs, 92d\nCong., 2d Sess. 14 (1972) (statement of Paul Volcker) (there were to be few\nexceptions to the coverage of the FFB Act), confirm our conclusions con\xc2\xad\ncerning the relatively narrow scope o f the exclusion.\n2. The Resolution Trust Corporation\nRTC clearly most resembles the corporate entities that were intended to\nbe covered by the Act. It has all of the principal characteristics of the\ncovered corporations; it has none of the principal characteristics of the enti\xc2\xad\nties that were intended to be excluded. First,17 RTC has received substantial\nfunding from the federal government. Congress ordered the Treasury to\nprovide RTC $18.8 billion in fiscal year 1989 and authorized the Secretary\nto use the proceeds from the sale of Treasury securities to supply the neces\xc2\xad\nsary funds. 12 U.S.C. \xc2\xa7 1441a(b)(14).\nSecond, RTC is subject to significant federal oversight and control. The\nday-to-day operations of RTC are managed by the Federal Deposit Insurance\nCorporation (\xe2\x80\x9cFDIC\xe2\x80\x9d), subject to the ultimate oversight of a new federal\nagency, the \xe2\x80\x9cOversight Board.\xe2\x80\x9d Id. \xc2\xa7 1441a(a). Unless removed by the\nOversight Board, see 12 U.S.C. \xc2\xa7 1441a(m), the FDIC functions as the ex\xc2\xad\nclusive manager of RTC, see 12 U.S.C. \xc2\xa7 1441a(b)(l)(C), and the members\no f the FDIC board of directors serve as the board of directors of RTC, see\nid. \xc2\xa7 1441a(b)(8)(A). RTC\xe2\x80\x99s directors therefore are not selected by private\nentities; they are ex, officio members who were appointed to their respective\npositions at the FDIC by the President with the advice and consent of the\nS enate.18\nThe Oversight Board has ultimate oversight responsibility for RTC. 12\nU.S.C. \xc2\xa7 1441a(a).19 It sets the \xe2\x80\x9coverall strategies, policies, and goals\xe2\x80\x9d of\nl7FIRREA describes RTC as "an instrumentality o f the United States,\xe2\x80\x9d declares that it is an \xe2\x80\x9cagency of\nthe U nited States\xe2\x80\x9d for certain purposes, and states that, despite the fact \xe2\x80\x9cthat no Government funds may\nbe invested in the Corporation,\xe2\x80\x9d it shall be treated, for purposes o f the Government Corporation Control\nAct, "as a m ixed-ow nership Government corporation which has capital of the Government.\xe2\x80\x9d 12 U.S.C.\n\xc2\xa7 1 441a(b)(l) & (2). At first blush, it m ight appear that these references to RTC as a government\nagency would alone resolve the question whether it is a federal agency within the meaning of the FFB\nAct. However, several o f the corporations that Congress expressly intended to exclude from coverage\nunder the FFB Act were also considered to be \xe2\x80\x9cinstrumentalities\xe2\x80\x9d and \xe2\x80\x9c mixed-ownership Government\ncorporations\xe2\x80\x9d for certain purposes. See 12 U.S.C. \xc2\xa7 2011 (Supp. Ill 1973) (federal land banks were\n\xe2\x80\x98\xe2\x80\x98federally chartered instrumentalities o f the United States\xe2\x80\x9d); id. \xc2\xa7 2071 (federal intermediate credit\nbanks); id. \xc2\xa7 2121 (banks for cooperatives); 31 U.S.C. \xc2\xa7 856 (1970) (federal hom e loan banks, federal\nland banks, federal intermediate credit banks, and banks for cooperatives were \xe2\x80\x9cmixed-ownership Gov\xc2\xad\nernm ent corporations\xe2\x80\x9d for purposes of the Government Corporation Control Act).\n"S ectio n 2 (a )(l)o fth e Federal Deposit Insurance Act, 12U.S.C \xc2\xa7 1812(a)(1), as amended by FIRREA,\nPub. L. No. 101-73, tit. II, \xc2\xa7 203, 103 Stat. 183, 188 (1989), provides that the board of directors of the\nFD IC consists of five members; the Comptroller of the Currency, the Director of the Office of Thrift\nSupervision, and three other individuals to be appointed by the President with the advice and consent of\nthe Senate. The D irector of the Office o f Thrift Supervision is also a presidential appointee, see 12\nU.S.C. \xc2\xa7 1462a(c)(l), as is the Comptroller of the Currency, see id. \xc2\xa7 2.\n\n28\n\n\x0cRTC. Id. \xc2\xa7 1441a(a)(6). This authority includes the power to establish the\ngeneral policies and procedures for RTC\xe2\x80\x99s handling of case resolutions, its\nmanagement and disposition of assets, and its use of debt securities, as well\nas the power to establish RTC\xe2\x80\x99s overall financial goals and its budget. Id. \xc2\xa7\n1441a(a)(6)(A).\nThe Oversight Board also reviews all rules and regulations issued by\nRTC, and may, within certain limits, require modifications in these regula\xc2\xad\ntions. Id. \xc2\xa7 1441a(a)(6)(C). The Oversight Board also periodically reviews\nthe overall performance of RTC. Id. \xc2\xa7 1441a(a)(6)(D). Moreover, under\ncertain specified circumstances, the Oversight Board is authorized to remove\nthe FDIC as exclusive manager of RTC and to appoint a new board of\ndirectors and chief executive officer. Thus, although the Oversight Board is\nnot involved in RTC\xe2\x80\x99s day-to-day resolution of specific cases, see id. \xc2\xa7\n1441a(a)(8)(A); H.R. Conf. Rep. No. 222, 101st Cong., 1st Sess. 410, re\xc2\xad\nprinted in 1989 U.S.C.C.A.N. 432, 449, the Board\xe2\x80\x99s expansive authority over\nRTC\xe2\x80\x99s operations illustrates the substantial degree of federal governmental\ncontrol over RTC.\nFinally, FIRREA provides that the full faith and credit of the United\nStates is pledged to the payment of any obligation issued by RTC, provided\nonly that the obligation expressly states its principal amount and date of\nmaturity. 12 U.S.C. \xc2\xa7 1441 a(j)(3).\nRTC technically has not received capital contributions from the Treasury\nin exchange for RTC capital certificates. This alone, however, does not\nprevent RTC from being covered under the Act. First, other corporations\nthat were clearly intended to be covered by the FFB Act, such as GNMA\nand TVA, had no outstanding stock owned by the United States. Second,\nalthough RTC issues \xe2\x80\x9ccapital certificates\xe2\x80\x9d to REFCORP20 in exchange for\nREFCORP\xe2\x80\x99s compulsory cash contributions, 12 U.S.C. \xc2\xa7 1441a(b)(10)(M),\nthese certificates do not confer many of the ordinary entitlements of corpo\xc2\xad\nrate ownership. The certificates are nonvoting, pay no dividends, and do not\nprovide REFCORP with any control over the management or operation of\nRTC 2! xhird, if REFCORP\xe2\x80\x99s possession of these certificates were alone\nconsidered sufficient to render RTC a wholly privately owned entity, it would\nbe difficult to explain the need for two separate entities. REFCORP would\n19 The Oversight Board is comprised of five members: the Secretary of the Treasury (who serves as\nChairman), the Chairman of the Board of Governors of the Federal Reserve System, the Secretary o f\nHousing and Urban Development, and two other individuals appointed by the President with the advice\nand consent o f the Senate. 12 U.S.C. \xc2\xa7 1441a(a)(3).\n\xe2\x80\x9c REFCORP is a private entity which is fully capitalized by the federal home loan banks, and which\nraises m oney for RTC by selling REFCORP bonds, which are not backed by the full faith and credit o f\nthe United States. 12 U.S.C. \xc2\xa7 1441b(d)(3), (e), (0(4) & (10). FIRREA, however, does establish a\nFinancing Corporation Principal Fund, which consists of zero-coupon Treasury securities purchased\nwith funds obtained from the federal home loan banks, to ensure principal payments on REFCORP\nbonds. FIRREA also provides that the Secretary of the Treasury shall provide funds for REFCORP\nbond interest payments that are not otherwise covered. Id. \xc2\xa7 1441b(f)(2)(E)(i) & (g)(2).\n11 REFCORP does retain a residual claim on the net assets o f RTC, if any, after RTC is term inated. At\nthat point, RTC\xe2\x80\x99s assets and liabilities are transferred to the \xe2\x80\x9cFSLIC Resolution Fund,\xe2\x80\x9d which, after\nselling the assets, transfers any net proceeds to REFCORP. 12 U.S.C. \xc2\xa7\xc2\xa7 1441a(o)(2) & 1821a(e).\n\n29\n\n\x0cbe unnecessary if it were merely a funding mechanism for another private\ncorporation.\nBecause RTC receives substantial government funding, is subject to sig\xc2\xad\nnificant federal control, and issues obligations backed by the full faith and\ncredit of the United States, w e believe that it is a \xe2\x80\x9ccorporation . . . estab\xc2\xad\nlished by the Congress which is owned in whole or in part by the United\nStates,\xe2\x80\x9d as that phrase is used in the FFB Act.22 Accordingly, we conclude\nthat RTC is a \xe2\x80\x9cFederal agency\xe2\x80\x9d within the meaning of the Act.23\nB. RTC is Authorized to Issue \xe2\x80\x9cObligations" Within the Meaning o f the\nFFB A ct\nRTC must not only be a Federal agency, but also must be authorized to\n\xe2\x80\x9c issue, sell, or guarantee any obligation\xe2\x80\x9d within the meaning of the FFB Act\nto be eligible for FFB financing. Section 3(2) of the Act provides that the\nterm \xe2\x80\x9cobligation\xe2\x80\x9d means\nany note, bond, debenture, or other evidence of indebtedness,\nbut does not include Federal Reserve notes or stock evidenc\xc2\xad\ning an ownership interest in the issuing federal agency.\n12 U.S.C. \xc2\xa7 2282(2). The term thus is broadly defined to include virtually\nany paper evidencing indebtedness. As explained below, we conclude that\nRTC is authorized to issue \xe2\x80\x9cobligations\xe2\x80\x9d within the meaning of the FFB Act\nbecause FIRREA authorizes RTC to issue notes in connection with its case\nresolution duties.\n\xc2\xbb\nNo provision o f FIRREA expressly grants RTC the authority to issue\nobligations. Subsection 21A(b)(4) of the Federal Home Loan Bank Act\n(\xe2\x80\x9cthe FHLB Act\xe2\x80\x9d) as added by FIRREA, however, provides that, subject to\ncertain limitations, RTC \xe2\x80\x9cshall have the same powers and rights to carry out\nits duties with respect to [financial institutions subject to its resolution au\xc2\xad\nthority] as the [FDIC] has under sections 11, 12, and 13 of the Federal\nDeposit Insurance Act [\xe2\x80\x9cthe FDI Act\xe2\x80\x9d] with respect to [depository institu\xc2\xad\ntions insured by the FDIC].\xe2\x80\x9d 12 U.S.C. \xc2\xa7 1441a(b)(4). Section 13(c) of the\nFDI Act provides that the FDIC is authorized, among other things, to make\nloans or contributions to, or make deposits in, certain insured depository\ninstitutions or other companies under certain circumstances. See 12 U.S.C.\n12 Because w e conclude that RTC comes within the corporation coverage clause, we need not address\nw hether RTC m ight also be considered an \xe2\x80\x9cexecutive departm ent\xe2\x80\x9d or an \xe2\x80\x98\xe2\x80\x98independent Federal estab\xc2\xad\nlishm ent\xe2\x80\x9d w ithin the meaning o f section 3(1).\n23 Our analysis o f RTC is supported by the fact that the Fiscal Year 1991 Budget treats RTC, not as a\nprivately ow ned government-sponsored enterprise, but as an independent federal agency. See Execu\xc2\xad\ntive Office o f the President o f the United States, Budget o f the United States Government, Fiscal Year\n1991 A -2 1 to A-23, A -140 to A -142, A -27 1, A -118 1 to A -1182, A -12 13 to A -1226 (1990). See supra\nnote IS.\n\n30\n\n\x0c\xc2\xa7 1823(c). This broad grant of authority to provide financial assistance in\ncase resolutions has been interpreted to include the authority to issue notes\nevidencing the FDIC\xe2\x80\x99s obligation to provide certain sums at a future time.\nSee infra note 29. Since FIRREA provides that RTC shall have the same\nauthority to provide assistance in case resolutions as the FDIC possesses\nunder sections 11, 12, and 13 of the FDI Act,24 it follows that RTC is autho\xc2\xad\nrized to issue obligations when providing financial assistance in case\nresolutions. Accordingly, we conclude that RTC has the authority under 12\nU.S.C. \xc2\xa7 1441a(b)(4) to issue \xe2\x80\x9cobligations.\xe2\x80\x9d\nThere is really no doubt that Congress intended RTC to have such author\xc2\xad\nity. There are repeated, explicit references throughout the statute to RTC\xe2\x80\x99s\nauthority to issue obligations. Subsection 21A(b)(7) of the FHLB Act, as\nadded by FIRREA, for example, provides that \xe2\x80\x9c[RTC\xe2\x80\x99s] authority to issue\nobligations and guarantees shall be subject to general supervision by the\nOversight Board . . . and shall be consistent with subsection (j).\xe2\x80\x9d 12 U.S.C.\n\xc2\xa7 1441a(b)(7) (emphasis added). Subsection <j)(l) even establishes a for\xc2\xad\nmula for calculating the maximum dollar amount of obligations that RTC\nmay have outstanding at any given time. Id. \xc2\xa7 1441a(j)(l).25 In addition,\nthe provision that requires RTC to submit periodic financing requests to the\nOversight Board states that such requests must include \xe2\x80\x9cany proposed use of\nnotes, guarantees or other obligations." Id. \xc2\xa7 1441a(b)(13)(C) (emphasis\nadded). Finally, FIRREA provides that \xe2\x80\x9c[t]he full faith and credit of the\nUnited States is pledged to the payment of any obligation issued by [RTC],\nwith respect to both principal and interest,\xe2\x80\x9d if the obligation states its princi\xc2\xad\npal amount and its date of maturity. Id. \xc2\xa7 1441a(j)(3) (emphasis added).\nThe legislative history of FIRREA affirmatively supports the conclusion\nthat RTC has authority to issue obligations. In pressing for limitations on\nRTC\xe2\x80\x99s authority to issue obligations, Congressman Gonzalez, the Chairman\nof the House Banking Committee and the principal sponsor of FIRREA in\nthe House, pointed out that:\n[UJnder this bill, the RTC will have all of the case resolution\npowers of the FDIC and the FSLIC as we have known them.\n\n24 See, e.g., 135 Cong. Rec. 12,110 (1989) ("RTC will have all of the case resolution powers of the FDIC\nand the FSLIC as we have known them .\xe2\x80\x99\xe2\x80\x99) (emphasis added).\nf\n\xe2\x80\x9c Subsection (j)(l) provides (hat:\nNotwithstanding any other provision o f this section, the amount which is equal to\xe2\x80\x94\n(A) the sum of\xe2\x80\x94\n(i) the total amount of contributions received from [REFCORP]; and\n(ii) the total amount o f outstanding obligations of [RTC]; minus\n(B) the sum of\xe2\x80\x94\n(i) the amount of cash each held by [RTC]; and\n( ii ) the amount which is equal to 85 percent of [RTC\xe2\x80\x99s] estimate of the\nfair market value of other assets held by the Corporation, may not\nexceed $50,000,000,000.\n12 U.S.C. \xc2\xa7 1441 a(j)( 1). RTC thus may issue obligations up to the amount that is equal to $50 billion,\nplus its cash, plus 85% of its assets, less any amounts received from REFCORP.\n\n31\n\n\x0cThis broad grant of power includes the ability to provide fi\xc2\xad\nnancial assistance to acquirers o f insolvent thrifts, assistance\nsuch as notes.\n135 Cong. Rec. 12,110 (1989) (emphasis added).26 Congressman Gonzalez\nand others even expressed concern over the extent to which FSLIC, in late\n1988, had exercised its authority to issue notes, and emphasized that since\nRTC would have this same authority, an explicit limit on the dollar amount\no f such obligations was necessary. See id. ; see also id. at 12,111 (statement\no f Rep. Price) (\xe2\x80\x9cCurrently under both the House and the Senate bill, the\nRTC has the authority to issue notes or other obligations with no apparent\nlimit.\xe2\x80\x9d); id. at 12,112 (statement of Rep. Wylie) (\xe2\x80\x9cThe administration recog\xc2\xad\nnizes the need to place a cap on the aggregate amount of RTC notes and\nobligations based on last year\xe2\x80\x99s FSLIC experience.\xe2\x80\x9d).27\nFinally, and significantly, FSLIC, which previously fulfilled RTC\xe2\x80\x99s case\nresolution role, had itself issued obligations under the authority of the case\nresolution powers conferred by 12 U.S.C. \xc2\xa7 1729(f) (1988), repealed by\nFIRREA, Pub. L. No. 101-73, \xc2\xa7 407, 103 Stat. 183, 363 (1989).28 See 68\nComp. Gen. 14 (1988) (FSLIC has authority to issue notes in connection with\ncase resolutions).29 And, as noted previously, Congress intended RTC to have\nessentially the same case resolution powers that FSLIC had. See supra pp. 31-32.\n\n26 See also Problem s o f the Federal Savings and Loan Insurance Corporation: Hearings Before the\nSenate Comm, on Banking, Housing, and Urban A ffairs, 101st Cong., 1st Sess., pt. II, at 590 (1989)\n(\xe2\x80\x9c1989 Senate F SLIC Hearings") (statement of Richard Darman, Director, Office of M anagement and\nBudget) (RTC may, like FSLIC, issue prom issory notes in resolving cases).\n27 Congressm an G onzalez\xe2\x80\x99s amendment was adopted by the House, and its key provisions ultimately\nbecam e subsection 21 A(j) o f the FHLB A ct, 1 2 U .S .C .I 1441a(j).\nJ ,The text o f form er 12 U.S.C. \xc2\xa7 1729(f)(l)-(4), which described FSL IC \xe2\x80\x99s authority to provide assis\xc2\xad\ntance in case resolutions, used virtually identical language as the statute describing the comparable\nauthority o f the FDIC, 12 U.S.C. \xc2\xa7 1823(c)(l)-(4).\n\xe2\x80\x9d In concluding that FSLIC had the authority to issue notes, the Comptroller General relied not only on\nF S L IC \'s statutory authority to provide assistance in case resolutions, but also upon an express statutory\ngrant o f authority "to issue notes, bonds, debentures or other such obligations.\xe2\x80\x9d 68 Comp. Gen. at 16\n(citing 12 U.S.C. \xc2\xa7 1725(d) (1988), repealed by FIRREA, Pub. L. No. 1 01-73,\xc2\xa7407, 103 Stat. at 363).\nT he absence o f a sim ilar provision in the FD I Act might be taken to suggest that Congress intended the\nFDIC to have less case resolution authority than FSLIC. It is clear, however, in this context that this was\nnot C ongress\xe2\x80\x99 intent. The FD IC \xe2\x80\x99s statutory authority to provide assistance, read together with other\nprovisions of the FDI Act, w hich expressly recognize the power to issue obligations, see, e.g., 12 U.S.C.\n\xc2\xa7 1825(a) (discussing tax treatm ent of \xe2\x80\x9cnotes, debentures, bonds, or other such obligations\xe2\x80\x9d issued by the\nFD IC ); id. \xc2\xa7 1825(c) (lim its on FDIC\xe2\x80\x99s authority to issue notes); id. \xc2\xa7 1826 (directing Secretary of T rea\xc2\xad\nsury to prepare \xe2\x80\x9c forms o f notes, debentures, bonds, or other such obligations\xe2\x80\x9d for issuance by FDIC), is\nsufficiently broad to encom pass the issuance o f notes in connection with case resolutions. Moreover, the\nFD IC has issued such notes in case resolutions. See 1989 Senate FSLIC Hearings at 168 (statem ent of L.\nW illiam Seidm an, Chairm an, Federal Deposit Insurance Corporation); Office of Management and Bud\xc2\xad\nget, B udget o f the U nited Slates Government, Fiscal Year 1990, Appendix at I-Z24 (1989) (listing notes\nissued to acquiring banks as a liability of FDIC).\n\n32\n\n\x0cC O N C LU SIO N\nFor the foregoing reasons, we conclude that RTC is a \xe2\x80\x9cFederal agency\xe2\x80\x9d\nauthorized to issue \xe2\x80\x9cobligations,\xe2\x80\x9d within the meaning of the FFB Act. A c\xc2\xad\ncordingly, section 6 of the FFB Act authorizes RTC \xe2\x80\x9cto issue or sell such\nobligations directly to the Bank,\xe2\x80\x9d and further authorizes the Bank, in turn, to\npurchase such obligations. 12 U.S.C. \xc2\xa7 2285. RTC is therefore authorized\nto issue directly to the Bank those promissory notes it would otherwise have\nissued to depository institutions or other companies in the course of resolv\xc2\xad\ning cases.\nJ. M ICHAEL LUTTIG\nPrincipal Deputy\nAssistant Attorney General\nOffice of Legal Counsel\n\n33\n\n\x0c'