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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

FDIC Law, Regulations, Related Acts

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1000 - Federal Deposit Insurance Act


SEC. 14. BORROWING AUTHORITY.

(a)  BORROWING FROM TREASURY.--

(1)  IN GENERAL.--The Corporation is authorized to borrow from the Treasury, and the Secretary of the Treasury is authorized and directed to loan to the Corporation on such terms as may be fixed by the Corporation and the Secretary, such funds as in the judgment of the Board of Directors of the Corporation are from time to time required for insurance purposes, not exceeding in the aggregate $100,000,000,000 outstanding at any one time, subject to the approval of the Secretary of the Treasury: Provided, That the rate of interest to be charged in connection with any loan made pursuant to this subsection shall not be less than an amount determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities. For such purpose the Secretary of the Treasury is authorized to use as a public-debt transaction the proceeds of the sale of any securities hereafter issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under the Second Liberty Bond Act, as amended, are extended to include such loans. Any such loan shall be used by the Corporation solely in carrying out its functions with respect to such insurance. All loans and repayments under this subsection shall be treated as public-debt transactions of the United States. The Corporation may employ any funds obtained under this section for purposes of the Deposit Insurance Fund and the borrowing shall become a liability of the Deposit Insurance Fund to the extent funds are employed therefor.

(2)  FUNDING.--There are hereby appropriated to the Secretary, for fiscal year 1989 and each fiscal year thereafter, such sums as may be necessary to carry out this subsection.

(3)  TEMPORARY INCREASES AUTHORIZED.--

(A)  RECOMMENDATIONS FOR INCREASE.--During the period beginning on [May 20, 2009], the date of enactment of this paragraph and ending on December 31, 2010, if, upon the written recommendation of the Board of Directors (upon a vote of not less than two-thirds of the members of the Board of Directors) and the Board of Governors of the Federal Reserve System (upon a vote of not less than two-thirds of the members of such Board), the Secretary of the Treasury (in consultation with the President) determines that additional amounts above the $100,000,000,000 amount specified in paragraph (1) are necessary, such amount shall be increased to the amount so determined to be necessary, not to exceed $500,000,000,000.

(B)  REPORT REQUIRED.--If the borrowing authority of the Corporation is increased above $100,000,000,000 pursuant to subparagraph (A), the Corporation shall promptly 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 describing the reasons and need for the additional borrowing authority and its intended uses.

(C)  RESTRICTION ON USAGE.--The Corporation may not borrow pursuant to subparagraph (A) to fund obligations of the Corporation incurred as a part of a program established by the Secretary of the Treasury pursuant to the Emergency Economic Stabilization Act of 2008 to purchase or guarantee assets.

[Codified to 12 U.S.C. 1824(a)]

[Source:  Section 2[14(a)] of the Act of September 21, 1950 (Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950; as amended by section 218 of title II of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 261), effective August 9, 1989; section 2005 of title II of the Act of November 5, 1990 (Pub. L. No. 101--508; 104 Stat. 1388--16), effective November 5, 1990; section 101 of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2336), effective December 19, 1991; section 8(a)(20) of the Act of February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3613), effective date shall take effect on the day of the merger of the Bank Insurance Fund and the Savings Association Insurance Fund pursuant to the Federal Deposit Insurance Reform Act of 2005; section 204(c)(1) of title II of the Act of May 20, 2009 (Pub. L. No. 111--22; 123 Stat. 1649), effective May 20, 2009]


(b)  BORROWING FROM FEDERAL FINANCING BANK.--The Corporation is authorized to issue and sell the Corporation's obligations, on behalf of the Deposit Insurance Fund to the Federal Financing Bank established by the Federal Financing Bank Act of 1973. The Federal Financing Bank is authorized to purchase and sell the Corporation's obligations on terms and conditions determined by the Federal Financing Bank. Any such borrowings shall be obligations subject to the obligation limitation of section 15(c) of this Act. This subsection does not affect the eligibility of any other entity to borrow from the Federal Financing Bank.

[Codified to 12 U.S.C. 1824(b)]

[Source:  Section 2[14(b)] of the Act of September 21, 1950 (Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950; as added by section 2005 of title II of the Act of November 5, 1990 (Pub. L. No. 101--508; 104 Stat. 1388--16), effective November 5, 1990; section 8(a)(21) of the Act of February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3613), effective date shall take effect on the day of the merger of the Bank Insurance Fund and the Savings Association Insurance Fund pursuant to the Federal Deposit Insurance Reform Act of 2005]

(c)  REPAYMENT SCHEDULES REQUIRED FOR ANY BORROWING.--

(1)  IN GENERAL.--No amount may be provided by the Secretary of the Treasury to the Corporation under subsection (a) unless an agreement is in effect between the Secretary and the Corporation which--

(A)  provides a schedule for the repayment of the outstanding amount of any borrowing under such subsection; and

(B)  demonstrates that income to the Corporation from assessments under this Act will be sufficient to amortize the outstanding balance within the period established in the repayment schedule and pay the interest accruing on such balance.

(2)  CONSULTATION WITH AND REPORT TO CONGRESS.--The Secretary of the Treasury and the Corporation shall--

(A)  consult with the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on the terms of any repayment schedule agreement described in paragraph (1) relating to repayment, including terms relating to any emergency special assessment under section 7(b)(7); and

(B)  submit a copy of each repayment schedule agreement entered into under paragraph (1) to the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate before the end of the 30-day period beginning on the date any amount is provided by the Secretary of the Treasury to the Corporation under subsection (a).

[Codified to 12 U.S.C. 1824(c)]

[Source:  Section 2[14(c)] of the Act of September 21, 1950 (Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by section 103(a) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2237), effective December 19, 1991; amended by section 10 of the Act of December 17, 1993 (Pub. L. No. 103--204; 107 Stat. 2389), effective December 17, 1993; section 8(a)(22) of the Act of February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3613), effective date shall take effect on the day of the merger of the Bank Insurance Fund and the Savings Association Insurance Fund pursuant to the Federal Deposit Insurance Reform Act of 2005]

(d)  BORROWING FOR THE DEPOSIT INSURANCE FUND FROM INSURED DEPOSITORY INSTITUTIONS.--

(1)  BORROWING AUTHORITY.--The Corporation may issue obligations to insured depository institutions, and may borrow from insured depository institutions and give security for any amount borrowed, and may pay interest on (and any redemption premium with respect to) any such obligation or amount to the extent--

(A)  the proceeds of any such obligation or amount are used by the Corporation solely for purposes of carrying out the Corporation's functions with respect to the Deposit Insurance Fund; and

(B)  the terms of the obligation or instrument limit the liability of the Corporation or the Deposit Insurance Fund for the payment of interest and the repayment of principal to the amount which is equal to the amount of assessment income received by the Fund from assessments under section 7.

(2)  LIMITATIONS ON BORROWING.--

(A)  APPLICABILITY OF PUBLIC DEBT LIMIT.--For purposes of the public debt limit established in section 3101(b) of title 31, United States Code, any obligation issued, or amount borrowed, by the Corporation under paragraph (1) shall be considered to be an obligation to which such limit applies.

(B)  APPLICABILITY OF FDIC BORROWING LIMIT.--For purposes of the dollar amount limitation established in section 14(a) of the Federal Deposit Insurance Act (12 U.S.C. 1824(a)), any obligation issued, or amount borrowed, by the Corporation under paragraph (1) shall be considered to be an amount borrowed from the Treasury under such section.

(C)  INTEREST RATE LIMIT.--The rate of interest payable in connection with any obligation issued, or amount borrowed, by the Corporation under paragraph (1) shall not exceed an amount determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities.

(D)  OBLIGATIONS TO BE HELD ONLY BY BIF MEMBERS.--The terms of any obligation issued by the Corporation under paragraph (1) shall provide that the obligation will be valid only if held by an insured depository institution.

(3)  LIABILITY OF THE DEPOSIT INSURANCE FUND.--Any obligation issued or amount borrowed under paragraph (1) shall be a liability of the Deposit Insurance Fund.

(4)  TERMS AND CONDITIONS.--Subject to paragraphs (1) and (2), the Corporation shall establish the terms and conditions for obligations issued or amounts borrowed under paragraph (1), including interest rates and terms to maturity.

(5)  INVESTMENT BY INSURED DEPOSITORY INSTITUTIONS.--

(A)  AUTHORITY TO INVEST.--Subject to subparagraph (B) and notwithstanding any other provision of Federal law or the law of any State, any insured depository institution may purchase and hold for investment any obligation issued by the Corporation under paragraph (1) without limitation, other than any limitation the appropriate Federal banking agency may impose specifically with respect to such obligations.

(B)  INVESTMENT ONLY FROM CAPITAL AND RETAINED EARNINGS.--Any insured depository institution may purchase obligations or make loans to the Corporation under paragraph (1) only to the extent the purchase money or the money loaned is derived from the member's capital or retained earnings.

(6)  ACCOUNTING TREATMENT.--In accounting for any investment in an obligation purchased from, or any loan made to, the Corporation for purposes of determining compliance with any capital standard and preparing any report required pursuant to section 7(a), the amount of such investment or loan shall be treated as an asset.

[Codified to 12 U.S.C. 1824(d)]

[Source:  Section 2[14(d)] of the Act of September 21, 1950 (Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by section 105 of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2239), effective December 19, 1991; as amended by section 1603(a)(2) of title XVI of the Act of October 28, 1992 (Pub. L. No. 102--550; 106 Stat. 4078), effective December 19, 1991; section 8(a)(23) of the Act of February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3613), effective date shall take effect on the day of the merger of the Bank Insurance Fund and the Savings Association Insurance Fund pursuant to the Federal Deposit Insurance Reform Act of 2005]

(e)  BORROWING FOR THE DEPOSIT INSURANCE FUND FROM FEDERAL HOME LOAN BANKS.--

(1)  IN GENERAL.--The Corporation may borrow from the Federal home loan banks, with the concurrence of the Federal Housing Finance Board, such funds as the Corporation considers necessary for the use of the Deposit Insurance Fund.

(2)  TERMS AND CONDITIONS.--Any loan from any Federal home loan bank under paragraph (1) to the Deposit Insurance Fund shall--

(A)  bear a rate of interest of not less than the current marginal cost of funds to that bank, taking into account the maturities involved;

(B)  be adequately secured, as determined by the Federal Housing Finance Board;

(C)  be a direct liability of the Deposit Insurance Fund; and

(D)  be subject to the limitations of section 15(c).

[Codified to 12 U.S.C. 1824(e)]

[Source:  Section 2[14(e)] of the Act of September 21, 1950 (Pub. L. No. 797; 64 Stat. 882), effective September 21, 1950, as added by section 8(a)(24) of the Act of February 15, 2006 (Pub. L. No. 109--173; 119 Stat. 3614), effective date shall take effect on the day of the merger of the Bank Insurance Fund and the Savings Association Insurance Fund pursuant to the Federal Deposit Insurance Reform Act of 2005]


NOTES AND DECISIONS

Derivation.  Section 14 derives from section 12B(o)(2) of the Federal Reserve Act, as added by section 101[12B(o)(2)] of title I of the Act of August 23, 1935 (Pub. L. No. 305; 49 Stat. 699), effective August 23, 1935. Section 12B(o)(2) of the Federal Reserve Act was amended by section 4 of the Act of August 5, 1947 (Pub. L. No. 363; 61 Stat. 773), effective August 5, 1947. By section 1 of the Act of September 21, 1950 (Pub. L. No. 797; 64 Stat. 873), effective September 21, 1950, section 12B of the Federal Reserve Act was withdrawn as a part of that Act and was made a separate act known as the "Federal Deposit Insurance Act."


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