Sec. 1008. Amendments to powers of the Board of Governors of the Federal Reserve System
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Section 13(3) of the Federal Reserve Act ( 12 U.S.C. 343(3) ), as amended by section 111(b)(3), is further amended— in subparagraph (A)— by inserting that pose a threat to the financial stability of the United States after unusual and exigent circumstances ; and by inserting and by the affirmative vote of not less than nine presidents of the Federal reserve banks after five members ; in subparagraph (B)— in clause (i), by inserting at the end the following: Federal reserve banks may not accept equity securities issued by the recipient of any loan or other financial assistance under this paragraph as collateral.
Not later than 6 months after the date of enactment of this sentence, the Board shall, by rule, establish— a method for determining the sufficiency of the collateral required under this paragraph; acceptable classes of collateral; the amount of any discount on the value of the collateral that the Federal reserve banks will apply for purposes of calculating the sufficiency of collateral under this paragraph; and a method for obtaining independent appraisals of the value of collateral the Federal reserve banks receive. ; and in clause (ii)— by striking the second sentence; and by inserting after the first sentence the following:
A borrower shall not be eligible to borrow from any emergency lending program or facility unless the Board and all Federal banking regulators with jurisdiction over the borrower certify that, at the time the borrower initially borrows under the program or facility, the borrower is not insolvent. ; by inserting financial institution before participant each place such term appears; in subparagraph (D)(i), by inserting financial institution before participants ; and by adding at the end the following new subparagraphs:
Not later than 6 months after the date of enactment of this subparagraph, the Board shall, with respect to a recipient of any loan or other financial assistance under this paragraph, establish by rule a minimum interest rate on the principal amount of any loan or other financial assistance. In this subparagraph, the term minimum interest rate shall mean the sum of— the average of the secondary discount rate of all Federal Reserve banks over the most recent 90-day period; and the average of the difference between a distressed corporate bond yield index (as defined by rule of the Board) and a bond yield index of debt issued by the United States (as defined by rule of the Board) over the most recent 90-day period.
For purposes of this paragraph, the term financial institution participant — means a company that is predominantly engaged in financial activities (as defined in section 102(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5311(a) )); and does not include an agency described in subparagraph
(W)of section 5312(a)(2) of title 31, United States Code, or an entity controlled or sponsored by such an agency. . Section 11(r)(2)(A) of the Federal Reserve Act ( 12 U.S.C. 248(r)(2)(A) ) is amended— in clause (ii)(IV), by striking ; and and inserting a semicolon; in clause (iii), by striking the period at the end and inserting ; and ; and by adding at the end the following new clause: the available members secure the affirmative vote of not less than nine presidents of the Federal reserve banks. .
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Sec. 1008
Amendments to powers of the Board of Governors of the Federal Reserve System
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