Sec. 8. Priority for customers of registered covered providers
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/bill/119/hr/8395/ih/section-8·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
In this section, the term nonbank provider means a registered covered provider that is not an insured depository institution (as defined in section 2 of the GENIUS Act ( 12 U.S.C. 5901 )). A nonbank provider shall not be treated as a debtor for purposes of chapter 7 or chapter 11 of title 11, United States Code. A nonbank provider shall be eligible to be subject to an insolvency proceeding administered by a covered State regulator. Notwithstanding any other provision of Federal law or the law of any State, the Comptroller may be appointed by the covered State regulator to act as conservator or receiver for such a nonbank provider, pursuant to such rules issued by the Comptroller.
If, with respect to an insolvent nonbank provider, a State does not promptly initiate an insolvency proceeding beginning on the date the nonbank provider becomes insolvent, the Comptroller shall initiate such insolvency proceeding. For purposes of this paragraph, the Comptroller shall issue such rules as necessary to define promptly . To the extent that a customer may hold balances with a nonbank provider, amounts realized from the liquidation or other resolution of the nonbank provider by the covered State regulator or the Comptroller (whichever is acting as a conservator or receiver under this section) shall be distributed to pay claims (other than secured claims to the extent of any such security) in the following order of priority:
Administrative expenses of the conservator or receiver. Outstanding payment obligations to customers. Any other general or senior liability of the nonbank provider. Any obligation subordinated to liabilities described in paragraphs
(2)and
(3)not described in paragraph (5). Any obligation to shareholders or members of the nonbank provider arising as a result of their status as shareholders or members. Monetary value maintained in connection with access or custody services, properly segregated from the nonbank provider’s proprietary assets, are not general assets of the nonbank provider subject to the priority set forth in subsection (d). Any shortfall in custodial assets shall have the same priority as outstanding payment obligations to customers under subsection (d)(2). In addition to and not in derogation of the powers conferred and the duties imposed by this Act on the Comptroller or a State as conservator or receiver of a nonbank provider, the Comptroller or State, as applicable, shall have such additional powers and duties with respect to the nonbank provider as imposed on a conservator or receiver of an insured depository institution under any other provision of law.
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Sec. 8
Priority for customers of registered covered providers
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