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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