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§ 1824. —  Borrowing authority.



[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
  January 24, 2002 and December 19, 2002]
[CITE: 12USC1824]

 
                       TITLE 12--BANKS AND BANKING
 
            CHAPTER 16--FEDERAL DEPOSIT INSURANCE CORPORATION
 
Sec. 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 Bank Insurance Fund or the Savings Association 
Insurance Fund and the borrowing shall become a liability of each such 
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 Bank Insurance Fund or Savings Association 
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.

                       (3) Industry repayment

        (A) BIF member payments

            No agreement or repayment schedule under paragraph (1) shall 
        require any payment by a Bank Insurance Fund member for funds 
        obtained under subsection (a) of this section for purposes of 
        the Savings Association Fund.

        (B) SAIF member payments

            No agreement or repayment schedule under paragraph (1) shall 
        require any payment by a Savings Association Insurance Fund 
        member for funds obtained under subsection (a) of this section 
        for purposes of the Bank Insurance Fund.

(d) Borrowing for BIF from BIF members

                       (1) Borrowing authority

        The Corporation may issue obligations to Bank Insurance Fund 
    members, and may borrow from Bank Insurance Fund members 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 Bank Insurance Fund; 
        and
            (B) the terms of the obligation or instrument limit the 
        liability of the Corporation or the Bank 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

            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 Bank Insurance Fund member.

                        (3) Liability of BIF

        Any obligation issued or amount borrowed under paragraph (1) 
    shall be a liability of the Bank 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 BIF members

        (A) Authority to invest

            Subject to subparagraph (B) and notwithstanding any other 
        provision of Federal law or the law of any State, any Bank 
        Insurance Fund member 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 Bank Insurance Fund member 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 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.

(Sept. 21, 1950, ch. 967, Sec. 2[14], 64 Stat. 890; Pub. L. 101-73, 
title II, Sec. 218, Aug. 9, 1989, 103 Stat. 261; Pub. L. 101-508, title 
II, Sec. 2005, Nov. 5, 1990, 104 Stat. 1388-16; Pub. L. 102-242, title 
I, Secs. 101, 103(a), 105, Dec. 19, 1991, 105 Stat. 2236, 2237, 2239; 
Pub. L. 102-550, title XVI, Sec. 1603(a)(2), Oct. 28, 1992, 106 Stat. 
4078; Pub. L. 103-204, Sec. 10, Dec. 17, 1993, 107 Stat. 2389; Pub. L. 
104-208, div. A, title II, Sec. 2704(d)(14)(N)-(Q), Sept. 30, 1996, 110 
Stat. 3009-493.)

                       References in Text

    The Federal Financing Bank Act of 1973, referred to in subsec. (b), 
is Pub. L. 93-224, Dec. 29, 1973, 87 Stat. 937, as amended, which is 
classified generally to chapter 24 (Sec. 2281 et seq.) of this title. 
For complete classification of this Act to the Code, see Short Title 
note set out under section 2281 of this title and Tables.

                          Codification

    ``Chapter 31 of title 31'' substituted in subsec. (a) for ``the 
Second Liberty Bond Act, as amended'' on authority of Pub. L. 97-258, 
Sec. 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which 
enacted Title 31, Money and Finance.


                            Prior Provisions

    Section is derived from subsec. (o) of former section 264 of this 
title. See Codification note set out under section 1811 of this title.


                               Amendments

    1996--Subsec. (a). Pub. L. 104-208, Sec. 2704(d)(14)(N), which 
directed substitution of ``Deposit Insurance Fund'' for ``Bank Insurance 
Fund or the Savings Association Insurance Fund'' and ``the Deposit 
Insurance Fund'' for ``each such fund'' in fifth sentence, was not 
executed. See Effective Date of 1996 Amendment note below.
    Subsec. (b). Pub. L. 104-208, Sec. 2704(d)(14)(O), which directed 
substitution of ``Deposit Insurance Fund'' for ``Bank Insurance Fund or 
Savings Association Insurance Fund'', was not executed. See Effective 
Date of 1996 Amendment note below.
    Subsec. (c)(3). Pub. L. 104-208, Sec. 2704(d)(14)(P), which directed 
striking out par. (3), was not executed. See Effective Date of 1996 
Amendment note below.
    Subsec. (d). Pub. L. 104-208, Sec. 2704(d)(14)(Q), which directed 
substitution of ``DIF'' for ``BIF'' and ``Deposit Insurance Fund'' for 
``Bank Insurance Fund'' wherever appearing, was not executed. See 
Effective Date of 1996 Amendment note below.
    1993--Subsec. (c)(3). Pub. L. 103-204 added par. (3).
    1992--Subsec. (d)(2)(D). Pub. L. 102-550 substituted ``member'' for 
``Member''.
    1991--Subsec. (a). Pub. L. 102-242, Sec. 101, substituted 
``$30,000,000,000'' for ``$5,000,000,000''.
    Subsec. (c). Pub. L. 102-242, Sec. 103(a), added subsec. (c).
    Subsec. (d). Pub. L. 102-242, Sec. 105, added subsec. (d).
    1990--Pub. L. 101-508 inserted section catchline, designated 
existing provisions as subsec. (a), inserted heading, substituted ``this 
subsection'' for ``this section'' wherever appearing, substituted ``The 
Corporation may employ any funds obtained under this section'' for ``The 
Corporation may employ such funds'', and added subsec. (b).
    1989--Pub. L. 101-73 substituted ``$5,000,000,000 outstanding at any 
one time, subject to the approval of the Secretary of the Treasury'' for 
``$3,000,000,000 outstanding at any one time'', substituted ``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 ``the current average rate 
on outstanding marketable and nonmarketable obligations of the United 
States as of the last day of the month preceding the making of such 
loan'', and inserted at end ``The Corporation may employ such funds for 
purposes of the Bank Insurance Fund or the Savings Association Insurance 
Fund and the borrowing shall become a liability of each such 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 section.''

                         Change of Name

    Committee on Banking, Finance and Urban Affairs of House of 
Representatives treated as referring to Committee on Banking and 
Financial Services of House of Representatives by section 1(a) of Pub. 
L. 104-14, set out as a note preceding section 21 of Title 2, The 
Congress. Committee on Banking and Financial Services of House of 
Representatives abolished and replaced by Committee on Financial 
Services of House of Representatives, and jurisdiction over matters 
relating to securities and exchanges and insurance generally transferred 
from Committee on Energy and Commerce of House of Representatives by 
House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-208 effective Jan. 1, 1999, if no insured 
depository institution is a savings association on that date, see 
section 2704(c) of Pub. L. 104-208, set out as a note under section 1821 
of this title.


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-550 effective as if included in the Federal 
Deposit Insurance Corporation Improvement Act of 1991, Pub. L. 102-242, 
as of Dec. 19, 1991, see section 1609(a) of Pub. L. 102-550, set out as 
a note under section 191 of this title.


 Retirement and Cancellation of Capital Stock; Payments of Capital and 
                  Surplus to Secretary of the Treasury

    Section 1 of act Aug. 5, 1947, ch. 492, 61 Stat. 773, directed the 
Federal Deposit Insurance Corporation to retire its capital stock by 
paying the amount received therefor (whether received from the Secretary 
of the Treasury or the Federal Reserve banks) to the Secretary of the 
Treasury, to be covered into the Treasury as miscellaneous receipts, 
with the Corporation to pay to the Secretary so much of its capital and 
surplus as is in excess of $1,000,000,000, the balance of the amount to 
be paid to the Secretary in units of $10,000,000 except that the last 
unit to be paid could be less than $10,000,000.

                  Section Referred to in Other Sections

    This section is referred to in sections 1817, 1821, 1825, 2712 of 
this title.



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