Sec. 1101. FEDERAL RESERVE ACT AMENDMENTS ON EMERGENCY LENDING AUTHORITY
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## SEC. 1101 FEDERAL RESERVE ACT AMENDMENTS ON EMERGENCY LENDING AUTHORITY ###
(a)Federal Reserve Act The third undesignated paragraph of section 13 of the Federal Reserve Act (12 U.S.C. 343) (relating to emergency lending authority) is amended— ####
(1)by inserting “(3)(A)” before “In unusual”; ####
(2)by striking “individual, partnership, or corporation” the first place that term appears and inserting the following: “participant in any program or facility with broad-based eligibility”; ####
(3)by striking “exchange for an individual or a partnership or corporation” and inserting “exchange,”; ####
(4)by striking “such individual, partnership, or corporation” and inserting the following: “such participant in any program or facility with broad-based eligibility”; ####
(5)by striking “for individuals, partnerships, corporations” and inserting “for any participant in any program or facility with broad-based eligibility”; and ####
(6)by striking “ may prescribe. ” and inserting the following: > “may prescribe. > > > ##### “(B) > > > ######
(i)> > As soon as is practicable after the date of enactment of this subparagraph, the Board shall establish, by regulation, in consultation with the Secretary of the Treasury, the policies and procedures governing emergency lending under this paragraph. Such policies and procedures shall be designed to ensure that any emergency lending program or facility is for the purpose of providing liquidity to the financial system, and not to aid a failing financial company, and that the security for emergency loans is sufficient to protect taxpayers from losses and that any such program is terminated in a timely and orderly fashion. The policies and procedures established by the Board shall require that a Federal reserve bank assign, consistent with sound risk management practices and to ensure protection for the taxpayer, a lendable value to all collateral for a loan executed by a Federal reserve bank under this paragraph in determining whether the loan is secured satisfactorily for purposes of this paragraph. > > > ###### “(ii) > > The Board shall establish procedures to prohibit borrowing from programs and facilities by borrowers that are insolvent. Such procedures may include a certification from the chief executive officer (or other authorized officer) of the borrower, at the time the borrower initially borrows under the program or facility (with a duty by the borrower to update the certification if the information in the certification materially changes), that the borrower is not insolvent. A borrower shall be considered insolvent for purposes of this subparagraph, if the borrower is in bankruptcy, resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any other Federal or State insolvency proceeding. > > > ###### “(iii) > > A program or facility that is structured to remove assets from the balance sheet of a single and specific company, or that is established for the purpose of assisting a single and specific company avoid bankruptcy, resolution under title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or any other Federal or State insolvency proceeding, shall not be considered a program or facility with broad-based eligibility. > > > ###### “(iv) > > The Board may not establish any program or facility under this paragraph without the prior approval of the Secretary of the Treasury. > > > ##### “(C) > > The Board shall provide to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives— > > > ###### “(i) > > not later than 7 days after the Board authorizes any loan or other financial assistance under this paragraph, a report that includes— > > > ###### “(I) > > the justification for the exercise of authority to provide such assistance; > > > ###### “(II) > > the identity of the recipients of such assistance; > > > ###### “(III) > > the date and amount of the assistance, and form in which the assistance was provided; and > > > ###### “(IV) > > the material terms of the assistance, including— > > > ###### “(aa) > > duration; > > > ###### “(bb) > > collateral pledged and the value thereof; > > > ###### “(cc) > > all interest, fees, and other revenue or items of value to be received in exchange for the assistance; > > > ###### “(dd) > > any requirements imposed on the recipient with respect to employee compensation, distribution of dividends, or any other corporate decision in exchange for the assistance; and > > > ###### “(ee) > > the expected costs to the taxpayers of such assistance; and > > > ###### “(ii) > > once every 30 days, with respect to any outstanding loan or other financial assistance under this paragraph, written updates on— > > > ###### “(I) > > the value of collateral; > > > ###### “(II) > > the amount of interest, fees, and other revenue or items of value received in exchange for the assistance; and > > > ###### “(III) > > the expected or final cost to the taxpayers of such assistance. > > > ##### “(D) > > The information required to be submitted to Congress under subparagraph
(C)related to— > > > ###### “(i) > > the identity of the participants in an emergency lending program or facility commenced under this paragraph; > > > ###### “(ii) > > the amounts borrowed by each participant in any such program or facility; > > > ###### “(iii) > > identifying details concerning the assets or collateral held by, under, or in connection with such a program or facility, > > shall be kept confidential, upon the written request of the Chairman of the Board, in which case such information shall be made available only to the Chairpersons or Ranking Members of the Committees described in subparagraph (C). > > > ##### “(E) > > If an entity to which a Federal reserve bank has provided a loan under this paragraph becomes a covered financial company, as defined in section 201 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, at any time while such loan is outstanding, and the Federal reserve bank incurs a realized net loss on the loan, then the Federal reserve bank shall have a claim equal to the amount of the net realized loss against the covered entity, with the same priority as an obligation to the Secretary of the Treasury under section 210(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.” > . ###
(b)Conforming Amendment Section 507(a)(2) of title 11, United States Code, is amended by inserting “unsecured claims of any Federal reserve bank related to loans made through programs or facilities authorized under section 13(3) of the Federal Reserve Act (12 U.S.C. 343),” after “this title,”. ###
(c)References **[**[12 U.S.C. 343 note](/us/usc/t12/s343)**]** On and after the date of enactment of this Act, any reference in any provision of Federal law to the third undesignated paragraph of section 13 of the Federal Reserve Act (12 U.S.C. 343) shall be deemed to be a reference to section 13(3) of the Federal Reserve Act, as so designated by this section. * * * * * * *
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Sec. 1101
FEDERAL RESERVE ACT AMENDMENTS ON EMERGENCY LENDING AUTHORITY
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