§ 3901. — Congressional declaration of policy.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
TITLE 12--BANKS AND BANKING
CHAPTER 40--INTERNATIONAL LENDING SUPERVISION
Sec. 3901. Congressional declaration of policy
(a)(1) It is the policy of the Congress to assure that the economic
health and stability of the United States and the other nations of the
world shall not be adversely affected or threatened in the future by
imprudent lending practices or inadequate supervision.
(2) This shall be achieved by strengthening the bank regulatory
framework to encourage prudent private decisionmaking and by enhancing
international coordination among bank regulatory authorities.
(b) The Federal banking agencies shall consult with the banking
supervisory authorities of other countries to reach understandings aimed
at achieving the adoption of effective and consistent supervisory
policies and practices with respect to international lending.
(Pub. L. 98-181, title IX, Sec. 902, Nov. 30, 1983, 97 Stat. 1278.)
Short Title of 1989 Amendment
Pub. L. 101-240, title IV, Sec. 401, Dec. 19, 1989, 103 Stat. 2501,
provided that: ``This title [enacting section 3904a of this title and
enacting provisions set out as notes under section 3904a of this title
and section 2291 of Title 22, Foreign Relations and Intercourse] may be
cited as the `Foreign Debt Reserving Act of 1989'.''
Section 901 of title IX of Pub. L. 98-181 provided that: ``This
title [enacting this chapter] may be cited as the `International Lending
Supervision Act of 1983'.''
Encouragement of Debt-for-Development Swaps Through Local Currency
Pub. L. 101-240, title V, Sec. 531, Dec. 19, 1989, 103 Stat. 2513,
``(a) Statement of Policy.--It is the sense of the Congress that--
``(1) debt-for-development swaps, where payment is made in local
currency at the free market rate, serve a useful purpose by
providing banking institutions with constructive opportunities for
the reduction of the external debt of highly indebted developing
countries in a process that involves the participation of private,
nonprofit groups in providing a stimulus to the economic and social
development of such developing countries;
``(2) debt-for-development swaps provide highly indebted
developing countries with a creative method of reducing external
debt burdens, while promoting their economic growth and
``(3) banking institutions should give careful consideration to
engaging in such swaps as one means of strengthening overall loan
portfolios through the reduction of high external debt burdens while
expanding economic opportunities through private sector initiatives;
``(4) in order to avoid any bias against such swaps in the
regulatory framework applicable to the financial reporting of
banking institutions, where payment is made in local currency at the
free market rate, appropriate recognition of the fair market
exchange value of the currency so received should be made.
``(b) Notification Relating to Local Currency Repayment Through
Debt-for-Development Swaps.--Before the end of the 6-month period
beginning on the date of the enactment of this section [Dec. 19, 1989],
each appropriate Federal banking agency shall adopt uniform guidelines
that will effectuate the policy set forth in subsection (a) concerning
the regulatory framework and accounting treatment of debt-for-
development swaps involving repayment in local currency at the free
market rate. For the purpose of such guidelines, the impact of such
swaps on reported loan loss reserves shall be determined by valuing
currency received in such swaps at fair market exchange value.
``(c) Definitions.--As used in this section:
``(1) Appropriate federal banking agency.--The term `appropriate
Federal banking agency' has the meaning given such term in section
903(1) of the International Lending Supervision Act of 1983 [12
``(2) Banking institution.--The term `banking institution' has
the meaning given such term in section 903(2) of the International
Lending Supervision Act of 1983.
``(3) Debt-for-development swap.--The term `debt-for-development
swap' has the meaning given such term in section 1608(b)(2) of the
International Financial Institutions Act [22 U.S.C. 262p-4c(b)(2)].
``(4) Highly indebted country.--The term `highly indebted
country' means any country designated as a `Highly Indebted Country'
in the annual World Debt Tables most recently published by the
International Bank for Reconstruction and Development before the
date of the enactment of this section [Dec. 19, 1989].''