12 U.S.C. § 1824 : US Code - Section 1824: Borrowing authority

Search 12 U.S.C. § 1824 : US Code - 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
Deposit Insurance Fund and the borrowing shall become a liability
of the Deposit Insurance 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 Deposit 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.
(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 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 (!1)
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 (!2) 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 (!3) 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.
(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 1825(c) of this
title.