§ 1788. — Special assistance to avoid liquidation.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1788]
TITLE 12--BANKS AND BANKING
CHAPTER 14--FEDERAL CREDIT UNIONS
SUBCHAPTER II--SHARE INSURANCE
Sec. 1788. Special assistance to avoid liquidation
(a) Loans; purchase of assets; accounts; agreements affecting interest
of Board in any asset acquired by it
(1) In order to reopen a closed insured credit union or in order to
prevent the closing of an insured credit union which the Board has
determined is in danger of closing or in order to assist in the
voluntary liquidation of a solvent credit union, the Board, in its
discretion, is authorized to make loans to, or purchase the assets of,
or establish accounts in such insured credit union upon such terms and
conditions as it may prescribe. Except with respect to the voluntary
liquidation of a solvent credit union, such loans shall be made and such
accounts shall be established only when, in the opinion of the Board,
such action is necessary to protect the fund or the interests of the
members of the credit union.
(2) Whenever in the judgment of the Board such action will reduce
the risk or avert a threatened loss to the fund and will facilitate a
merger or consolidation of an insured credit union with another insured
credit union, or will facilitate the sale of the assets of an open or
closed insured credit union to and assumption of its liability by
another person, the Board may, upon such terms and conditions as it may
determine, make loans secured in whole or in part by assets of an open
or closed insured credit union, which loans may be in subordination to
the rights of members and creditors of such credit union, or the Board
may purchase any of such assets or may guarantee any person against loss
by reason of its assuming the liabilities and purchasing the assets of
an open or closed insured credit union. For purposes of this paragraph,
the term ``person'' means any credit union, individual, partnership,
corporation, trust, estate, cooperative, association, government or
governmental subdivision or agency, or other entity.
(3) No agreement which tends to diminish or defeat the right, title,
or interest of the Board, in any asset acquired by it under this
subsection, either as security for a loan or by purchase, shall be valid
against the Board unless such agreement--
(A) shall be in writing;
(B) shall have been executed by the credit union and the person
or persons claiming an adverse interest thereunder, including the
obligor, contemporaneously with the acquisition of the asset by the
credit union;
(C) shall have been approved by the board of directors of the
credit union, which approval shall be reflected in the minutes of
such board; and
(D) shall have been continuously, from the time of its
execution, an official record of the credit union.
(b) Protection of Fund
For the protection of the Fund, the Board, without regard to the
Federal Property and Administrative Services Act of 1949, may--
(1) deal with, complete, reconstruct, rent, renovate, modernize,
insure, make contracts for the management of, sell for cash or
credit, or lease, in its discretion, any real property acquired or
held by it under this section; and
(2) assign or sell at public or private sale, or otherwise
dispose of, any evidence of debt, contract, claim, personal
property, or security assigned to or held by it under this section.
Section 5 of title 41 shall not apply to any purchase or contract for
services or supplies made or entered into by the Board under this
section if the amount thereof does not exceed $1,000, or to any contract
for hazard insurance on any real property acquired or held by it under
this section.
(c) Money paid into Fund
Money received by the Board in carrying out this section shall be
paid into the Fund.
(June 26, 1934, ch. 750, title II, Sec. 208, as added Pub. L. 91-468,
Sec. 1(3), Oct. 19, 1970, 84 Stat. 1013; amended Pub. L. 92-221, Sec. 3,
Dec. 23, 1971, 85 Stat. 797; Pub. L. 93-383, title VII, Sec. 729, Aug.
22, 1974, 88 Stat. 721; Pub. L. 95-630, title V, Sec. 502(b), Nov. 10,
1978, 92 Stat. 3681; Pub. L. 100-86, title VII, Sec. 714(b), (c), Aug.
10, 1987, 101 Stat. 655.)
References in Text
The Federal Property and Administrative Services Act of 1949,
referred to in subsec. (b), is act June 30, 1949, ch. 288, 63 Stat. 377,
as amended. Except for title III of the Act, which is classified
generally to subchapter IV (Sec. 251 et seq.) of chapter 4 of Title 41,
Public Contracts, the Act was repealed and reenacted by Pub. L. 107-217,
Secs. 1, 6(b), Aug. 21, 2002, 116 Stat. 1062, 1304, as chapters 1 to 11
of Title 40, Public Buildings, Property, and Works.
Amendments
1987--Subsecs. (c), (d). Pub. L. 100-86 redesignated subsec. (c) as
section 1787(j) of this title and subsec. (d) as (c).
1978--Pub. L. 95-630 substituted ``Board'' for ``Administrator''
wherever appearing, ``it'' for ``he'' and ``its'' for ``him'', and
``its'' for ``his'', where appropriate.
1974--Subsec. (a)(1). Pub. L. 93-383 inserted provisions relating to
the voluntary liquidation of a solvent credit union and struck out
provisions subordinating loans and accounts to the rights of members and
creditors of the credit union.
1971--Subsec. (a)(2). Pub. L. 92-221 substituted ``assumption of its
liability by another person'' for ``assumption of its liability by
another insured credit union'' and ``may guarantee any person against
loss by reason of his'' for ``may guarantee any other insured credit
union against loss by reason of its'' and inserted definition of
``person'' as that term is used in par. (2).
Effective Date of 1978 Amendment
Amendment by Pub. L. 95-630 effective on expiration of 120 days
after Nov. 10, 1978, and transitional provisions, see section 509 of
Pub. L. 95-630, set out as a note under section 1752 of this title.
Section Referred to in Other Sections
This section is referred to in sections 1783, 1787, 1790d of this
title.
