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U.S. Code as of:
01/19/04
Section 1824. Borrowing authority
(a) Borrowing from Treasury
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 $30,000,000,000
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
chapter 31 of title 31, and the purposes for which securities may
be issued under chapter 31 of title 31 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
Bank Insurance Fund or the Savings Association Insurance Fund and
the borrowing shall become a liability of each such fund to the
extent funds are employed therefor. 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.
(b) Borrowing from Federal Financing Bank
The Corporation is authorized to issue and sell the Corporation's
obligations, on behalf of the Bank Insurance Fund or Savings
Association Insurance Fund, to the Federal Financing Bank
established by the Federal Financing Bank Act of 1973 [12 U.S.C.
2281 et seq.]. 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
1825(c) of this title. This subsection does not affect the
eligibility of any other entity to borrow from the Federal
Financing Bank.
(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) of this section 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 chapter 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 1817(b)(7) of this
title; 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) of this section.
(3) Industry repayment
(A) BIF member payments
No agreement or repayment schedule under paragraph (1) shall
require any payment by a Bank Insurance Fund member for funds
obtained under subsection (a) of this section for purposes of
the Savings Association Fund.
(B) SAIF member payments
No agreement or repayment schedule under paragraph (1) shall
require any payment by a Savings Association Insurance Fund
member for funds obtained under subsection (a) of this section
for purposes of the Bank Insurance Fund.
(d) Borrowing for BIF from BIF members
(1) Borrowing authority
The Corporation may issue obligations to Bank Insurance Fund
members, and may borrow from Bank Insurance Fund members 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 Bank Insurance
Fund; and
(B) the terms of the obligation or instrument limit the
liability of the Corporation or the Bank 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 1817 of
this title.
(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, 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
subsection (a) of this section, 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 subsection.
(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 a Bank Insurance Fund member.
(3) Liability of BIF
Any obligation issued or amount borrowed under paragraph (1)
shall be a liability of the Bank 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 BIF members
(A) Authority to invest
Subject to subparagraph (B) and notwithstanding any other
provision of Federal law or the law of any State, any Bank
Insurance Fund member 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 Bank Insurance Fund member 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 1817(a) of this title,
the amount of such investment or loan shall be treated as an
asset.
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