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12 U.S.C. § 5214 — Insurance of troubled assets

Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5214 — Insurance of troubled assets

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Stable record: federal_law:legal_authorities:record_usc_28b97d93fbe3e7c8b74adbea
Source file: Laws/federal/codes/united-states-code/title-12/section-5214-insurance-of-troubled-assets--2893bc5acf.md
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Source location: Title 12, Chapter 52, § 5214; chapter-052-emergency-economic-stabilization.md

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**(a) Authority** (1) **In general** — If the Secretary establishes the program authorized under [section 5211 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5211&num=0&edition=prelim), then the Secretary shall establish a program to guarantee troubled assets originated or issued prior to March 14, 2008, including mortgage-backed securities. (2) **Guarantees** — In establishing any program under this subsection, the Secretary may develop guarantees of troubled assets and the associated premiums for such guarantees. Such guarantees and premiums may be determined by category or class of the troubled assets to be guaranteed. (3) **Extent of guarantee** — Upon request of a financial institution, the Secretary may guarantee the timely payment of principal of, and interest on, troubled assets in amounts not to exceed 100 percent of such payments. Such guarantee may be on such terms and conditions as are determined by the Secretary, provided that such terms and conditions are consistent with the purposes of this chapter. **(b) Reports** Not later than 90 days after October 3, 2008, the Secretary shall report to the appropriate committees of Congress on the program established under subsection (a). **(c) Premiums** (1) **In general** — The Secretary shall collect premiums from any financial institution participating in the program established under subsection (a). Such premiums shall be in an amount that the Secretary determines necessary to meet the purposes of this chapter and to provide sufficient reserves pursuant to paragraph (3). (2) **Authority to base premiums on product risk** — In establishing any premium under paragraph (1), the Secretary may provide for variations in such rates according to the credit risk associated with the particular troubled asset that is being guaranteed. The Secretary shall publish the methodology for setting the premium for a class of troubled assets together with an explanation of the appropriateness of the class of assets for participation in the program established under this section. The methodology shall ensure that the premium is consistent with paragraph (3). (3) **Minimum level** — The premiums referred to in paragraph (1) shall be set by the Secretary at a level necessary to create reserves sufficient to meet anticipated claims, based on an actuarial analysis, and to ensure that taxpayers are fully protected. (4) **Adjustment to purchase authority** — The purchase authority limit in [section 5225 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section5225&num=0&edition=prelim) shall be reduced by an amount equal to the difference between the total of the outstanding guaranteed obligations and the balance in the Troubled Assets Insurance Financing Fund. **(d) Troubled Assets Insurance Financing Fund** (1) **Deposits** — The Secretary shall deposit fees collected under this section into the Fund established under paragraph (2). (2) **Establishment** — There is established a Troubled Assets Insurance Financing Fund that shall consist of the amounts collected pursuant to paragraph (1), and any balance in such fund shall be invested by the Secretary in United States Treasury securities, or kept in cash on hand or on deposit, as necessary. (3) **Payments from Fund** — The Secretary shall make payments from amounts deposited in the Fund to fulfill obligations of the guarantees provided to financial institutions under subsection (a).

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5211 — Purposes

The purposes of this chapter are— (1) to immediately provide authority and facilities that the Secretary of the Treasury can use to restore liquidity and stability to the financial system of the United States; and (2) to ensure that such authority and such facilities are used in a manner that— (A) protects home values, college funds, retirement accounts, and life savings; (B) preserves homeownership and promotes jobs and economic growth; (C) maximizes overall returns to the taxpayers of the United States; and (D) provides public accountability for the exercise of such authority.

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5201 — Emergency treatment

All provisions of this chapter are designated as an emergency requirement and necessary to meet emergency needs pursuant to section 204(a) of S. Con. Res 11 So in original. Probably should be followed by a period. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008 and rescissions of any amounts provided in this chapter shall not be counted for purposes of budget enforcement.

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5225 — Minimization of long-term costs and maximization of benefits for taxpayers

**(a) Long-term costs and benefits** (1) **Minimizing negative impact** — The Secretary shall use the authority under this chapter in a manner that will minimize any potential long-term negative impact on the taxpayer, taking into account the direct outlays, potential long-term returns on assets purchased, and the overall economic benefits of the program, including economic benefits due to improvements in economic activity and the availability of credit, the impact on the savings and pensions of individuals, and reductions in losses to the Federal Government. (2) **Authority** — In carrying out paragraph (1), the Secretary shall— (A) hold the assets to maturity or for resale for and until such time as the Secretary determines that the market is optimal for selling such assets, in order to maximize the value for taxpayers; and (B) sell such assets at a price that the Secretary determines, based on available financial analysis, will maximize return on investment for the Federal Government. (3) **Private sector participation** — The Secretary shall encourage the private sector to participate in purchases of troubled assets, and to invest in financial institutions, consistent with the provisions of this section. **(b) Use of market mechanisms** In making purchases under this chapter, the Secretary shall— (1) make such purchases at the lowest price that the Secretary determines to be consistent with the purposes of this chapter; and (2) maximize the efficiency of the use of taxpayer resources by using market mechanisms, including auctions or reverse auctions, where appropriate. **(c) Direct purchases** If the Secretary determines that use of a market mechanism under subsection (b) is not feasible or appropriate, and the purposes of the chapter are best met throu

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Federal law — U.S. Code and appendices · legal_authorities

12 U.S.C. § 5214 — Financial Stability Oversight Board

Page 1802 TITLE 12—BANKS AND BANKING § 5214 (2) providing stability and preventing disrup- tion to financial markets in order to limit the impact on the economy and protect American jobs, savings, and retirement security; (3) the need to help families keep their homes and to stabilize communities; (4) in determining whether to engage in a di- rect purchase from an individual financial in- stitution, the long-term viability of the finan- cial institution in determining whether the purchase represents the most efficient use of funds under this chapter; (5) ensuring that all financial institutions are eligible to participate in the program, without discrimination based on size, geog- raphy, form of organization, or the size, type, and number of assets eligible for purchase under this chapter; (6) providing financial assistance to finan- cial institutions, including those serving low- and moderate-income populations and other underserved communities, and that have as- sets less than $1,000,000,000, that were well or adequately capitalized as of June 30, 2008, and that as a result of the devaluation of the pre- ferred government-sponsored enterprises stock will drop one or more capital levels, in a man- ner sufficient to restore the financial institu- tions to at least an adequately capitalized level; (7) the need to ensure stability for United States public instrumentalities, such as coun- ties and cities, that may have suffered signifi- cant increased costs or losses in the current market turmoil; (8) protecting the retirement security of Americans by purchasing troubled assets held by or on behalf of an eligible retirement plan described in clause (iii), (iv), (v), or (vi) of sec- tion 402(c)(8)(B) of title 26, except that such authority shall n

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