12 U.S.C. § 5612 — Emergency financial stabilization

Page 2006 TITLE 12—BANKS AND BANKING § 5611 (3) recommendations for regulations to en- sure the appropriate protection of such con- sumers. (c) Program Not later than 2 years after the date of the submission of the report under subsection (b), the Bureau shall, consistent with part B, pro- pose regulations or otherwise establish a pro- gram to protect consumers who use exchange facilitators. (d) Exchange facilitator defined In this section, the term ‘‘exchange facilitator’’ means a person that— (1) facilitates, for a fee, an exchange of like kind property by entering into an agreement with a taxpayer by which the exchange facilitator acquires from the taxpayer the con- tractual rights to sell the taxpayer’s relin- quished property and transfers a replacement property to the taxpayer as a qualified inter- mediary (within the meaning of Treasury Reg- ulations section 1.1031(k)–1(g)(4)) or enters into an agreement with the taxpayer to take title to a property as an exchange accommodation titleholder (within the meaning of Revenue Procedure 2000–37) or enters into an agreement with a taxpayer to act as a qualified trustee or qualified escrow holder (within the meaning of Treasury Regulations section 1.1031(k)–1(g)(3)); (2) maintains an office for the purpose of so- liciting business to perform the services de- scribed in paragraph (1); or (3) advertises any of the services described in paragraph (1) or solicits clients in printed pub- lications, direct mail, television or radio ad- vertisements, telephone calls, facsimile trans- missions, or other electronic communications directed to the general public for purposes of providing any such services. (Pub. L. 111–203, title X, § 1079, July 21, 2010, 124 Stat. 2077.) SUBCHAPTER VI—FEDERAL RESERVE SYSTEM PROVISIONS § 5611. Liquidity event determination (a) Determination and written recommendation (1) Determination request The Secretary may request the Corporation and the Board of Governors to determine whether a liquidity event exists that warrants use of the guarantee program authorized under section 5612 of this title. (2) Requirements of determination Any determination pursuant to paragraph (1) shall— (A) be written; and (B) contain an evaluation of the evidence that— (i) a liquidity event exists; (ii) failure to take action would have se- rious adverse effects on financial stability or economic conditions in the United States; and (iii) actions authorized under section 5612 of this title are needed to avoid or mitigate potential adverse effects on the United States financial system or eco- nomic conditions. (b) Procedures Notwithstanding any other provision of Fed- eral or State law, upon the determination of both the Corporation (upon a vote of not fewer than 2⁄3 of the members of the Corporation then serving) and the Board of Governors (upon a vote of not fewer than 2⁄3 of the members of the Board of Governors then serving) under sub- section (a) that a liquidity event exists that warrants use of the guarantee program author- ized under section 5612 of this title, and with the written consent of the Secretary— (1) the Corporation shall take action in ac- cordance with section 5612(a) of this title; and (2) the Secretary (in consultation with the President) shall take action in accordance with section 5612(c) of this title. (c) Documentation and review (1) Documentation The Secretary shall— (A) maintain the written documentation of each determination of the Corporation and the Board of Governors under this section; and (B) provide the documentation for review under paragraph (2). (2) GAO review The Comptroller General of the United States shall review and report to Congress on any determination of the Corporation and the Board of Governors under subsection (a), in- cluding— (A) the basis for the determination; and (B) the likely effect of the actions taken. (d) Report to Congress On the earlier of the date of a submission made to Congress under section 5612(c) of this title, or within 30 days of the date of a deter- mination under subsection (a), the Secretary shall provide written notice of the determina- tion of the Corporation and the Board of Gov- ernors to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Com- mittee on Financial Services of the House of Representatives, including a description of the basis for the determination. (Pub. L. 111–203, title XI, § 1104, July 21, 2010, 124 Stat. 2120.) Statutory Notes and Related Subsidiaries EFFECTIVE DATE Subchapter effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as a note under section 5301 of this title. § 5612. Emergency financial stabilization (a) In general Upon the written determination of the Cor- poration and the Board of Governors under sec- tion 5611 of this title, the Corporation shall cre- ate a widely available program to guarantee ob- ligations of solvent insured depository institu- tions or solvent depository institution holding companies (including any affiliates thereof) dur- ing times of severe economic distress, except that a guarantee of obligations under this sec- tion may not include the provision of equity in any form. Page 2007 TITLE 12—BANKS AND BANKING § 5612 (b) Rulemaking and terms and conditions (1) Policies and procedures As soon as is practicable after July 21, 2010, the Corporation shall establish, by regulation, and in consultation with the Secretary, poli- cies and procedures governing the issuance of guarantees authorized by this section. Such policies and procedures may include a require- ment of collateral as a condition of any such guarantee. (2) Terms and conditions The terms and conditions of any guarantee program shall be established by the Corpora- tion, with the concurrence of the Secretary. (c) Determination of guaranteed amount (1) In general In connection with any program established pursuant to subsection (a) and subject to para- graph (2) of this subsection, the Secretary (in consultation with the President) shall deter- mine the maximum amount of debt out- standing that the Corporation may guarantee under this section, and the President may transmit to Congress a written report on the plan of the Corporation to exercise the author- ity under this section to issue guarantees up to that maximum amount and a request for approval of such plan. The Corporation shall exercise the authority under this section to issue guarantees up to that specified max- imum amount upon passage of the joint reso- lution of approval, as provided in subsection (d). Absent such approval, the Corporation shall issue no such guarantees. (2) Additional debt guarantee authority If the Secretary (in consultation with the President) determines, after a submission to Congress under paragraph (1), that the max- imum guarantee amount should be raised, and the Council concurs with that determination, the President may transmit to Congress a written report on the plan of the Corporation to exercise the authority under this section to issue guarantees up to the increased maximum debt guarantee amount. The Corporation shall exercise the authority under this section to issue guarantees up to that specified max- imum amount upon passage of the joint reso- lution of approval, as provided in subsection (d). Absent such approval, the Corporation shall issue no such guarantees. (d) Resolution of approval (1) Additional debt guarantee authority A request by the President under this sec- tion shall be considered granted by Congress upon adoption of a joint resolution approving such request. Such joint resolution shall be considered in the Senate under expedited pro- cedures. (2) Fast track consideration in Senate (A) Reconvening Upon receipt of a request under subsection (c), if the Senate has adjourned or recessed for more than 2 days, the majority leader of the Senate, after consultation with the mi- nority leader of the Senate, shall notify the Members of the Senate that, pursuant to this section, the Senate shall convene not later than the second calendar day after re- ceipt of such message. (B) Placement on calendar Upon introduction in the Senate, the joint resolution shall be placed immediately on the calendar. (C) Floor consideration (i) In general Notwithstanding Rule XXII of the Stand- ing Rules of the Senate, it is in order at any time during the period beginning on the 4th day after the date on which Con- gress receives a request under subsection (c), and ending on the 7th day after that date (even though a previous motion to the same effect has been disagreed to) to move to proceed to the consideration of the joint resolution, and all points of order against the joint resolution (and against consider- ation of the joint resolution) are waived. The motion to proceed is not debatable. The motion is not subject to a motion to postpone. A motion to reconsider the vote by which the motion is agreed to or dis- agreed to shall not be in order. If a motion to proceed to the consideration of the reso- lution is agreed to, the joint resolution shall remain the unfinished business until disposed of. (ii) Debate Debate on the joint resolution, and on all debatable motions and appeals in con- nection therewith, shall be limited to not more than 10 hours, which shall be divided equally between the majority and minor- ity leaders or their designees. A motion further to limit debate is in order and not debatable. An amendment to, or a motion to postpone, or a motion to proceed to the consideration of other business, or a mo- tion to recommit the joint resolution is not in order. (iii) Vote on passage The vote on passage shall occur imme- diately following the conclusion of the de- bate on the joint resolution, and a single quorum call at the conclusion of the de- bate if requested in accordance with the rules of the Senate. (iv) Rulings of the Chair on procedure Appeals from the decisions of the Chair relating to the application of the rules of the Senate, as the case may be, to the pro- cedure relating to a joint resolution shall be decided without debate. (3) Rules (A) Coordination with action by House of Representatives If, before the passage by the Senate of a joint resolution of the Senate, the Senate re- ceives a joint resolution, from the House of Representatives, then the following proce- dures shall apply: (i) The joint resolution of the House of Representatives shall not be referred to a committee. Page 2008 TITLE 12—BANKS AND BANKING § 5612 1 See References in Text note below. (ii) With respect to a joint resolution of the Senate— (I) the procedure in the Senate shall be the same as if no joint resolution had been received from the other House; but (II) the vote on passage shall be on the joint resolution of the House of Rep- resentatives. (B) Treatment of joint resolution of House of Representatives If the Senate fails to introduce or consider a joint resolution under this section, the joint resolution of the House of Representa- tives shall be entitled to expedited floor pro- cedures under this subsection. (C) Treatment of companion measures If, following passage of the joint resolution in the Senate, the Senate then receives the companion measure from the House of Rep- resentatives, the companion measure shall not be debatable. (D) Rules of the Senate This subsection is enacted by Congress— (i) as an exercise of the rulemaking power of the Senate, and as such it is deemed a part of the rules of the Senate, but applicable only with respect to the procedure to be followed in the Senate in the case of a joint resolution, and it super- sedes other rules, only to the extent that it is inconsistent with such rules; and (ii) with full recognition of the constitu- tional right of the Senate to change the rules (so far as relating to the procedure of the Senate) at any time, in the same man- ner, and to the same extent as in the case of any other rule of the Senate. (4) Definition As used in this subsection, the term ‘‘joint resolution’’ means only a joint resolution— (A) that is introduced not later than 3 cal- endar days after the date on which the re- quest referred to in subsection (c) is received by Congress; (B) that does not have a preamble; (C) the title of which is as follows: ‘‘Joint resolution relating to the approval of a plan to guarantee obligations under section 1105 of the Dodd-Frank Wall Street Reform and Consumer Protection Act’’; and (D) the matter after the resolving clause of which is as follows: ‘‘That Congress approves the obligation of any amount described in section 1105(c) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.’’. (e) Funding (1) Fees and other charges The Corporation shall charge fees and other assessments to all participants in the program established pursuant to this section, in such amounts as are necessary to offset projected losses and administrative expenses, including amounts borrowed pursuant to paragraph (3), and such amounts shall be available to the Corporation. (2) Excess funds If, at the conclusion of the program estab- lished under this section, there are any excess funds collected from the fees associated with such program, the funds shall be deposited in the General Fund of the Treasury. (3) Authority of Corporation The Corporation— (A) may borrow funds from the Secretary of the Treasury and issue obligations of the Corporation to the Secretary for amounts borrowed, and the amounts borrowed shall be available to the Corporation for purposes of carrying out a program established pursu- ant to this section, including the payment of reasonable costs of administering the pro- gram, and the obligations issued shall be re- paid in full with interest through fees and charges paid by participants in accordance with paragraphs (1) and (4), as applicable; and (B) may not borrow funds from the Deposit Insurance Fund established pursuant to sec- tion 1821(a)(4) of this title. (4) Backup special assessments To the extent that the funds collected pursu- ant to paragraph (1) are insufficient to cover any losses or expenses, including amounts bor- rowed pursuant to paragraph (3), arising from a program established pursuant to this sec- tion, the Corporation shall impose a special assessment solely on participants in the pro- gram, in amounts necessary to address such insufficiency, and which shall be available to the Corporation to cover such losses or ex- penses. (5) Authority of the Secretary The Secretary may purchase any obligations issued under paragraph (3)(A). For such pur- pose, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, and the purposes for which secu- rities may be issued under that chapter 31 are extended to include such purchases, and the amount of any securities issued under that chapter 31 for such purpose shall be treated in the same manner as securities issued under section 208(n)(5)(E).1 (f) Rule of construction For purposes of this section, a guarantee of de- posits held by insured depository institutions in noninterest-bearing transaction accounts may be treated as a debt guarantee program. (g) Definitions For purposes of this section, the following definitions shall apply: (1) Company The term ‘‘company’’ means any entity other than a natural person that is incor- porated or organized under Federal law or the laws of any State. (2) Depository institution holding company The term ‘‘depository institution holding company’’ has the same meaning as in section 1813 of this title. (3) Liquidity event The term ‘‘liquidity event’’ means— Page 2009 TITLE 12—BANKS AND BANKING § 5614 (A) an exceptional and broad reduction in the general ability of financial market par- ticipants— (i) to sell financial assets without an un- usual and significant discount; or (ii) to borrow using financial assets as collateral without an unusual and signifi- cant increase in margin; or (B) an unusual and significant reduction in the ability of financial market participants to obtain unsecured credit. (4) Solvent The term ‘‘solvent’’ means that the value of the assets of an entity exceed its obligations to creditors. (h) Approval of guarantee program during the COVID–19 crisis (1) In general For purposes of the congressional joint reso- lution of approval provided for in subsections (c)(1) and (2) and (d), notwithstanding any other provision of this section, the Federal De- posit Insurance Corporation is approved upon enactment of this Act to establish a program provided for in subsection (a), provided that any such program and any such guarantee shall terminate not later than December 31, 2020. (2) Maximum amount Any debt guarantee program authorized by this subsection shall include a maximum amount of outstanding debt that is guaran- teed. (Pub. L. 111–203, title XI, § 1105, July 21, 2010, 124 Stat. 2121; Pub. L. 116–136, div. A, title IV, § 4008(a), Mar. 27, 2020, 134 Stat. 477.) Editorial Notes REFERENCES IN TEXT Section 1105 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, referred to in subsec. (d)(4)(C), (D), is section 1105 of Pub. L. 111–203, which is classified to this section. Section 208(n)(5)(E), referred to in subsec. (e)(5), prob- ably means section 210(n)(5)(E) of Pub. L. 111–203, which is classified to section 5390(n)(5)(E) of this title, because section 208 does not contain a subsec. (n) and section 210(n)(5)(E) relates to treatment of certain purchases and sales of obligations by the Secretary as public debt. Enactment of this Act, referred to in subsec. (h)(1), probably means the date of enactment of subtitle A of title IV of div. A of Pub. L. 116–136, known as the Coronavirus Economic Stabilization Act of 2020, which was approved Mar. 27, 2020. For complete classification of this Act to the Code, see section 4001 of div. A of title IV of Pub. L. 116–136, set out as a Short Title note under section 9001 of this title, and Tables. AMENDMENTS 2020—Subsec. (f). Pub. L. 116–136, § 4008(a)(1), inserted ‘‘in noninterest-bearing transaction accounts’’ after ‘‘institutions’’ and substituted ‘‘may’’ for ‘‘shall not’’. Subsec. (h). Pub. L. 116–136, § 4008(a)(2), added subsec. (h). § 5613. Additional related matters (a) Suspension of parallel Federal Deposit Insur- ance Act authority Effective upon July 21, 2010, the Corporation may not exercise its authority under section 1823(c)(4)(G)(i) of this title to establish any wide- ly available debt guarantee program for which section 5612 of this title would provide author- ity. (b) Omitted (c) Effect of default on an FDIC guarantee If an insured depository institution or deposi- tory institution holding company (as those terms are defined in section 1813 of this title) participating in a program under section 5612 of this title, or any participant in a debt guarantee program established pursuant to section 1823(c)(4)(G)(i) of this title defaults on any obli- gation guaranteed by the Corporation after July 21, 2010, the Corporation shall— (1) appoint itself as receiver for the insured depository institution that defaults; and (2) with respect to any other participating company that is not an insured depository in- stitution that defaults— (A) require— (i) consideration of whether a determina- tion shall be made, as provided in section 5383 of this title to resolve the company under section 5382 of this title; and (ii) the company to file a petition for bankruptcy under section 301 of title 11 if the Corporation is not appointed receiver pursuant to section 5382 of this title within 30 days of the date of default; or (B) file a petition for involuntary bank- ruptcy on behalf of the company under sec- tion 303 of title 11. (Pub. L. 111–203, title XI, § 1106, July 21, 2010, 124 Stat. 2125.) Editorial Notes CODIFICATION Section is comprised of section 1106 of Pub. L. 111–203. Subsec. (b) of section 1106 of Pub. L. 111–203 amended section 1823 of this title. § 5614. Exercise of Federal Reserve authority (1) No decisions by Federal reserve bank presi- dents No provision of subchapter I relating to the authority of the Board of Governors shall be construed as conferring any decision-making au- thority on presidents of Federal reserve banks. (2) Voting decisions by Board The Board of Governors shall not delegate the authority to make any voting decision that the Board of Governors is authorized or required to make under subchapter I of this chapter in con- travention of section 248(k) of this title. (Pub. L. 111–203, title XI, § 1108(d), July 21, 2010, 124 Stat. 2127.) Editorial Notes REFERENCES IN TEXT Subchapter I, referred to in text, was in the original ‘‘title I’’, meaning title I of Pub. L. 111–203, July 21, 2010, 124 Stat. 1391, known as the Financial Stability Act of 2010, which is classified principally to subchapter I (§ 5311 et seq.) of this chapter. For complete classifica- tion of title I to the Code, see Short Title note set out under section 5301 of this title and Tables.