§ 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.