[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4318 Introduced in House (IH)]







104th CONGRESS
  2d Session
                                H. R. 4318

To provide for a system of guaranteeing the deposits and certain other 
liabilities of depository institutions through a self-regulating system 
  of cross-guarantees, to protect taxpayers against deposit insurance 
                    losses, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 28, 1996

  Mr. Petri introduced the following bill; which was referred to the 
  Committee on Banking and Financial Services, and in addition to the 
Committee on the Judiciary, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To provide for a system of guaranteeing the deposits and certain other 
liabilities of depository institutions through a self-regulating system 
  of cross-guarantees, to protect taxpayers against deposit insurance 
                    losses, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Deposit Insurance 
Reform, Regulatory Modernization, and Taxpayer Protection Act of 
1996''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
                 TITLE I--100-PERCENT CROSS-GUARANTEES

                        Subtitle A--Definitions

Sec. 101. Definitions.
Sec. 102. Rules of construction.
                  Subtitle B--Cross-Guarantee Process

Sec. 111. Depository institutions prohibited from operating without a 
                            cross-guarantee contract.
Sec. 112. Parties to cross-guarantee and stop-loss contracts.
Sec. 113. Requirements common to cross-guarantee and stop-loss 
                            contracts.
Sec. 114. Requirements applicable only to cross-guarantee contracts.
Sec. 115. Requirements applicable only to stop-loss contracts.
Sec. 116. Eligibility and requirements for direct guarantors.
Sec. 117. Provisions relating to cross-guarantee and stop-loss 
                            syndicates.
Sec. 118. Assumption of control of a guaranteed company by a cross-
                            guarantee syndicate.
Sec. 119. Judicial review of contracts and related actions.
               Subtitle C--Powers and Duties of the CGRC

                   Chapter 1--Cross-Guarantee Process

Sec. 121. Cross-Guarantee Regulation Corporation.
Sec. 122. Regulation of the cross-guarantee process.
Sec. 123. Approval process for cross-guarantee, stop-loss, and group 
                            cross-guarantee contracts.
Sec. 124. Central electronic repository.
Sec. 125. Restriction on closed loops.
Sec. 126. Treasury oversight of the Cross-Guarantee Regulation 
                            Corporation.
               Chapter 2--Protection of Insured Deposits

Sec. 128. Backup insurance for deposits in guaranteed depository 
                            institutions.
                  Subtitle D--Miscellaneous Provisions

Sec. 131. Institutions offering uninsured deposits.
Sec. 132. Federal Reserve lending.
Sec. 133. Advertising by guaranteed financial groups.
Sec. 134. Guaranteed depository institutions remain federally insured 
                            depositories for purposes of state or 
                            federal law.
     Subtitle E--Transition to 100 Percent Cross-Guarantee Process

Sec. 141. Effective date of system based on minimum number of 
                            guaranteed depository institutions and 
                            amount of total assets.
Sec. 142. Mandatory date on which depository institutions must become 
                            guaranteed.
Sec. 143. Appointment of receiver for institutions which fail to comply 
                            with transition requirements.
Sec. 144. Funding the cross-guarantee backup fund.
Sec. 145. Abolition of the Federal Financial Institutions Examination 
                            Council.
Sec. 146. Abolition of the Federal Deposit Insurance Corporation.
Sec. 147. Continuation of orders, resolutions, and determinations.
               TITLE II--AMENDMENTS TO OTHER BANKING LAWS

Sec. 201. Amendments relating to national banks.
Sec. 202. Amendments relating to member banks.
Sec. 203. Amendments relating to savings associations.
Sec. 204. Amendments relating to savings and loan holding companies.
Sec. 205. Amendments relating to the Federal Deposit Insurance 
                            Corporation.
Sec. 206. Amendments to other banking laws.
         TITLE III--AMENDMENTS TO TITLE 11, UNITED STATES CODE

            Subtitle A--Amendments to Chapter 1 of Title 11

Sec. 301. Definitions.
Sec. 302. Applicability of chapters.
Sec. 303. Public access to papers.
Sec. 304. Who may be a debtor.
            Subtitle B--Amendments to Chapter 3 of Title 11

Sec. 311. Party in interest.
Sec. 312. Qualification of trustee.
Sec. 313. Notice.
Sec. 314. Money of estates.
Sec. 315. Automatic stay.
Sec. 316. Executory contracts and unexpired leases.
            Subtitle C--Amendments to Chapter 5 of Title 11

Sec. 321. Obligations of direct guarantors.
Sec. 322. Debtor's duties.
Sec. 323. Exceptions to discharge.
Sec. 324. Limitation on avoiding powers.
Sec. 325. Preferences.
Sec. 326. Fraudulent transfers and obligations.
Sec. 327. Post-petition transactions.
Sec. 328. Contractual right to liquidate a securities contract.
Sec. 329. Contractual right to liquidate a commodities contract or 
                            forward contract.
Sec. 330. Contractual right to liquidate a repurchase agreement.
Sec. 331. Contractual right to terminate a swap agreement.
            Subtitle D--Amendments to Chapter 11 of Title 11

                 Chapter 1--Amendments to Existing Law

Sec. 341. Creditors' and equity security holders' committees.
Sec. 342. Who may file a plan.
Sec. 343. Impairment of claims or interests.
Sec. 344. Acceptance of plan.
Sec. 345. Confirmation hearing.
Sec. 346. Confirmation of plan.
Sec. 347. Effect of confirmation.
                  Chapter 2--Enactment of Subchapter V

Sec. 351. Guaranteed company reorganization.
Sec. 352. Inapplicability of other sections.
Sec. 353. Effective date of filing.
Sec. 354. Appointment of trustee.
Sec. 355. Liability of direct guarantors for transfers to guaranteed 
                            creditors.
Sec. 356. Replacement or modification of cross-guarantee contract.
Sec. 357. Effect of Federal, state, and local legislation and 
                            regulations.
Sec. 358. Liquidation.
          TITLE IV--AMENDMENT TO TITLE 28, UNITED STATES CODE

Sec. 401. Venue.

                 TITLE I--100-PERCENT CROSS-GUARANTEES

                        Subtitle A--Definitions

SEC. 101. DEFINITIONS.

    In this title--
            (1) Affiliate.--The term ``affiliate'' means, with respect 
        to any company, any other company that controls, is controlled 
        by, or is under common control with such company.
            (2) Agency.--The term ``agency'', when used in connection 
        with a reference to a foreign bank, has the same meaning given 
        to such term in section 1(b) of the International Banking Act 
        of 1978.
            (3) Branch.--The term ``branch'', when used in connection 
        with a reference to a foreign bank, has the same meaning given 
        to such term in section 1(b) of the International Banking Act 
        of 1978.
            (4) Business day.--The term ``business day'' means any day 
        other than a Saturday, Sunday, or legal holiday for the Federal 
        Government.
            (5) Central electronic repository.--The term ``central 
        electronic repository'' means the repository established under 
        section 124(a)(1).
            (6) Closed loop.--The term ``closed loop'' means a set of 
        cross-guarantee and stop-loss contracts in which each direct 
        guarantor under the set of contracts also is a guaranteed party 
        under one contract within the set of contracts.
            (7) Company.--The term ``company''--
                    (A) means any corporation, limited liability 
                company, partnership, business trust, association, or 
                similar organization; and
                    (B) does not include a branch or agency, or a group 
                of branches and agencies, of a foreign bank.
            (8) Control.--
                    (A) In general.--The term ``control'' means, with 
                respect to one company's relationship to another 
                company, one company's ownership or power to, directly 
                or indirectly, vote an aggregate of 5 percent or more 
                of any class or classes of the securities which 
                separately or together, taking into account the 
                relative voting weight of different shares, have the 
                power to elect a majority of the members of such other 
                company's board of directors.
                    (B) Rule.--The Corporation may prescribe rules to 
                implement the intent of this paragraph.
            (9) Corporation.--The term ``Corporation'' means the Cross-
        Guarantee Regulation Corporation.
            (10) Cross-guarantee activation date.--The term ``cross-
        guarantee activation date'' means the date on which the first 
        cross-guarantee contracts become effective under section 
        141(a).
            (11) Cross-guarantee backup fund.--The term ``cross-
        guarantee backup fund'' means the fund established pursuant to 
        section 128(a).
            (12) Cross-guarantee contract.--The term ``cross-guarantee 
        contract'' means a contract which--
                    (A) is entered into between--
                            (i) one or more companies, at least one of 
                        which is a depository institution; and
                            (ii) a cross-guarantee syndicate;
                    (B) is approved by the Corporation under section 
                123;
                    (C) has become effective in accordance with the 
                contract's terms; and
                    (D) is not enjoined under section 123(e)(2)(B).
            (13) Cross-guarantee obligation.--The term ``cross-
        guarantee obligation'' means an obligation of a direct 
        guarantor arising out of a cross-guarantee or stop-loss 
        contract, and includes the obligations of such guarantor under 
        section 125(c)(2) of this title and sections 321 and 355 of 
        title III.
            (14) Cross-guarantee syndicate.--The term ``cross-guarantee 
        syndicate'' means any group of direct guarantors which has 
        entered into a cross-guarantee contract with a guaranteed 
        financial group.
            (15) Deposit.--
                    (A) In general.--The term ``deposit'' means--
                            (i) any obligation within the meaning given 
                        the term in paragraphs (1) through (4) of 
                        section 3(l) of the Federal Deposit Insurance 
                        Act; and
                            (ii) any other obligation that the 
                        Corporation determines is a deposit-like 
                        obligation by general usage.
                    (B) Deposits include obligations payable outside 
                the united states.--The term ``deposit'' includes any 
                obligation described in subparagraph (A) without regard 
                to whether the obligation is payable within or without 
                the United States.
                    (C) Exclusion for checkable subordinated debt.--The 
                term ``deposit'' shall not include any obligation 
                which, under section 114(a)(2)(A), may not be a 
                guaranteed obligation.
            (16) Depository institution.--The term ``depository 
        institution'' has the meaning given to such term in section 
        3(c) of the Federal Deposit Insurance Act.
            (17) Direct guarantor.--The term ``direct guarantor'' means 
        a member of a cross-guarantee or stop-loss syndicate which has 
        entered into a cross-guarantee or stop-loss contract with a 
        guaranteed financial group or nondepository guarantor.
            (18) Equity capital.--The term ``equity capital'' means, 
        with respect to any guaranteed financial group, the amount, as 
        valued pursuant to section 114(c), which is equal to--
                    (A) the consolidated assets of the guaranteed 
                financial group; minus
                    (B) the consolidated liabilities, including the 
                estimated liquidation value of contingent liabilities, 
                of the guaranteed financial group.
            (19) Failed depository institution.--The term ``failed 
        depository institution'' means any depository institution for 
        which a conservator or receiver has been appointed by the 
        Federal Deposit Insurance Corporation.
            (20) Foreign bank.--The term ``foreign bank'' has the same 
        meaning given to such term in section 1(b) of the International 
        Banking Act of 1978, except that such term shall not include 
        any bank organized under the laws of Puerto Rico, Guam, 
        American Samoa, the Virgin Islands, or any territory of the 
        United States.
            (21) Group cross-guarantee contract.--The term ``group 
        cross-guarantee contract'' means a contract which--
                    (A) is entered into between two or more guaranteed 
                financial groups and a cross-guarantee syndicate;
                    (B) is approved by the Corporation under section 
                123;
                    (C) has become effective in accordance with the 
                contract's terms; and
                    (D) is not enjoined under section 123(e)(2)(B).
            (22) Guaranteed banking office.--The term ``guaranteed 
        banking office'' means any branch or agency of a foreign bank 
        where--
                    (A) the foreign bank is a guaranteed company 
                pursuant to section 112(e); or
                    (B) the branch or agency has entered into a cross-
                guarantee contract with a cross-guarantee syndicate.
            (23) Guaranteed company.--
                    (A) In general.--The term ``guaranteed company'' 
                means any company which has entered into a cross-
                guarantee contract with a cross-guarantee syndicate.
                    (B) Foreign banks.--
                            (i) In general.--Notwithstanding 
                        subparagraph (A), a foreign bank shall not be a 
                        guaranteed company solely because a branch or 
                        agency of such bank is a guaranteed banking 
                        office under a cross-guarantee contract.
                            (ii) Exception for foreign banks which are 
                        subsidiaries.--Notwithstanding clause (i), a 
                        foreign bank may be a guaranteed company, if 
                        such bank is guaranteed under a cross-guarantee 
                        contract under section 112(e).
            (24) Guaranteed depository institution.--The term 
        ``guaranteed depository institution'' means a depository 
        institution which is a guaranteed company.
            (25) Guaranteed financial group.--The term ``guaranteed 
        financial group'' means one or more guaranteed companies or 
        guaranteed banking offices guaranteed under the same cross-
        guarantee contract.
            (26) Guaranteed obligation.--
                    (A) In general.--The term ``guaranteed obligation'' 
                means an obligation of a guaranteed party the 
                performance of which has been guaranteed by a cross-
                guarantee or stop-loss syndicate.
                    (B) Rule of construction.--The term ``performance'' 
                under subparagraph (A) includes timely payment of any 
                deposit or other obligation, including interest, if 
                failure to pay in a timely manner would constitute a 
                breach of contract.
            (27) Guaranteed party.--The term ``guaranteed party'' means 
        any guaranteed company, guaranteed banking office, or 
        nondepository guarantor.
            (28) Insured deposit.--The term ``insured deposit'' means 
        any deposit of a guaranteed depository institution which is 
        insured against loss by the cross-guarantee backup fund under 
        section 128.
            (29) Net worth.--The term ``net worth''--
                    (A) means, with respect to a nondepository 
                guarantor, the amount which is equal to the 
                stockholders' equity, the partnership equity, the net 
                worth, or the fund balance of the guarantor, as the 
                case may be, as determined in accordance with generally 
                accepted accounting principles;
                    (B) does not include any equitable interest or 
                liability which the Corporation determines should not 
                be treated as net worth for purposes of this title; and
                    (C) in the case of any nondepository guarantor 
                which controls another nondepository guarantor or a 
                guaranteed financial group, does not include the net 
                worth or equity capital of the subsidiary guarantor or 
                group.
            (30) Nondepository guarantor.--The term ``nondepository 
        guarantor'' means any person which has entered into a stop-loss 
        contract with a stop-loss syndicate.
            (31) Premium income.--The term ``premium income'' means any 
        income accrued by a direct guarantor under any cross-guarantee 
        or stop-loss contract.
            (32)  Projected annual premium.--The term ``projected 
        annual premium'' means the amount calculated under section 
        116(d)(2).
            (33) Projected annual premium capacity.--The term 
        ``projected annual premium capacity'' means the amount which is 
        equal to--
                    (A) in the case of a guaranteed company, 3 percent 
                of the equity capital of the guaranteed financial group 
                guaranteed under the same cross-guarantee contract 
                under which such company is a guaranteed company; or
                    (B) in the case of a nondepository guarantor, 3 
                percent of the net worth of the nondepository 
                guarantor.
            (34) Projected annual premium limit.--The term ``projected 
        annual premium limit'' means the amount which is equal to 3 
        percent of projected annual premium capacity.
            (35) Second-tier guarantor.--The term ``second-tier 
        guarantor'' means a direct guarantor of a direct guarantor.
            (36) State depository institution.--The term ``state 
        depository institution'' has the meaning given to such term in 
        section 3(c)(5) of the Federal Deposit Insurance Act.
            (37) Stop-loss contract.--The term ``stop-loss contract'' 
        means a contract which--
                    (A) is entered into between a person and a stop-
                loss syndicate;
                    (B) is approved by the Corporation under section 
                123;
                    (C) has become effective in accordance with the 
                contract's terms; and
                    (D) is not enjoined under section 123(e)(2)(B).
            (38) Stop-loss syndicate.--The term ``stop-loss syndicate'' 
        means any group of direct guarantors which has entered into a 
        stop-loss contract with a nondepository guarantor.
            (39) Subordinated debt.--
                    (A) In general.--The term ``subordinated debt'' 
                means an obligation assumed by a guaranteed company or 
                guaranteed banking office which is subordinate in right 
                of payment to any general creditor of the company or 
                office.
                    (B) General creditor.--For purposes of this 
                paragraph, the term ``general creditor'' means--
                            (i) any creditor to which a guaranteed 
                        company or guaranteed banking office has an 
                        obligation which is a guaranteed obligation 
                        under the cross-guarantee contract for such 
                        company or office, unless that creditor is 
                        otherwise specifically secured by one or more 
                        assets of the company or office; and
                            (ii) any creditor of the guaranteed company 
                        or guaranteed banking office which is--
                                    (I) not protected under the 
                                contract; and
                            (II) not subordinated to the claims of 
                        other creditors or treated as a preference in a 
                        bankruptcy proceeding.
            (40) Subsidiary.--The term ``subsidiary'' means, with 
        reference to a company, any company which such company 
        controls.
            (41) Syndicate agent.--The term ``syndicate agent'' means 
        any person which acts as the agent for the direct guarantors 
        under any cross-guarantee or stop-loss contract.

SEC. 102. RULES OF CONSTRUCTION.

    (a) General Rules of Construction.--
            (1) In general.--This title shall be liberally construed 
        and applied to promote its underlying purposes and policies.
            (2) Purposes of this title.--The purposes of this title 
        are--
                    (A) to create and maintain a private, competitive 
                deposit insurance marketplace;
                    (B) to require each bank and savings association 
                which accepts deposits to protect the full amount of 
                such deposits, along with most other nondeposit 
                liabilities, by obtaining cross-guarantee contracts 
                from syndicates of direct guarantors;
                    (C) to induce depository institutions to lend and 
                invest wisely by authorizing direct guarantors which 
                issue cross-guarantee contracts to--
                            (i) charge risk-sensitive premiums for the 
                        guarantees provided; and
                            (ii) negotiate with the banks and savings 
                        associations which enter into such contracts 
                        all other terms and conditions, to the extent 
                        such terms and conditions are not inconsistent 
                        with this Act or other provisions of law;
                    (D) to make the cross-guarantee process as self-
                regulating as possible by establishing numerous 
                constructive tensions among the participants in the 
                system;
                    (E) to establish a closed system of guarantors with 
                tier after tier of guarantors to stand behind a 
                guarantee and a ``stop-loss'' mechanism to spread large 
                losses as widely as possible to ensure that no 
                guaranteed obligation will ever go unpaid;
                    (F) to force guarantors to pay promptly for any 
                losses that do occur and to prevent guarantors from 
                using legal actions to recover any losses from other 
                persons, except under highly exceptional circumstances; 
                and
                    (G) to regulate the cross-guarantee marketplace 
                only to the extent necessary to maintain the safety, 
                soundness, and viability of the entire cross-guarantee 
                process and not the solvency of any individual bank or 
                savings association regardless of its size.
    (b) Specific Rules of Construction.--In this title--
            (1) the terms ``guaranteed company,'' ``guaranteed 
        depository institution,'' ``guaranteed financial group,'' 
        ``guaranteed party,'' and ``nondepository guarantor'' refer to 
        those parties in their capacity as parties guaranteed under a 
        cross-guarantee or stop-loss contract;
            (2) the term ``direct guarantor'' refers to a party in such 
        party's capacity as a guarantor under a cross-guarantee or 
        stop-loss contract;
            (3) the term ``control'' in such phrases as ``assumption of 
        control'' or ``assumes control'' shall not have the meaning 
        given the term under section 101(8);
            (4) ``including'' shall not be construed more restrictively 
        than the ordinary usage of such term so as to exclude any other 
        thing not referred to or described; and
            (5) the phrases ``has entered into a cross-guarantee 
        contract'' and ``has entered into a stop-loss contract,'' as 
        used in sections 101(22), 101(23), and 101(30), shall not be 
        construed to refer to a contract which is no longer in effect.

                  Subtitle B--Cross-Guarantee Process

SEC. 111. DEPOSITORY INSTITUTIONS PROHIBITED FROM OPERATING WITHOUT A 
              CROSS-GUARANTEE CONTRACT.

    After the applicable effective date under section 142, a depository 
institution shall be a guaranteed depository institution or guaranteed 
banking office unless the depository institution--
            (a) is a Federal branch that is not an insured branch (as 
        the terms ``Federal branch'' and ``insured branch'' are defined 
        in sections 3(r) and 3(s) of the Federal Deposit Insurance 
        Act); or
            (b) is a failed depository institution.

SEC. 112. PARTIES TO CROSS-GUARANTEE AND STOP-LOSS CONTRACTS.

    (a) Cross-Guarantee Contracts.--
            (1) Scope of cross-guarantee system.--
                    (A) Limit on guaranteed companies.--Subject to 
                section 112(e), no company which is not a depository 
                institution may be a guaranteed company.
                    (B) Limit on the number of guaranteed parties 
                within a guaranteed financial group.--Subject to 
                sections 112(d) and 112(e), no guaranteed company or 
                guaranteed banking office shall be guaranteed under the 
                same cross-guarantee contract as another guaranteed 
                company or guaranteed banking office.
            (2) Necessary parties.--Each cross-guarantee contract shall 
        have the following parties:
                    (A) A guaranteed financial group consisting of the 
                party or parties guaranteed under the contract.
                    (B) The direct guarantors of the guaranteed 
                financial group.
                    (C) A syndicate agent acting on behalf of the 
                direct guarantors.
            (3) Affiliate guarantee.--Any affiliate of a depository 
        institution may guarantee the performance of such institution's 
        guaranteed obligations under a cross-guarantee contract.
    (b) Stop-Loss Contracts.--
          (1) In general.--Each stop-loss contract shall have the 
        following parties:
                    (A) A nondepository guarantor as the party 
                guaranteed under the contract.
                    (B) The direct guarantors of the nondepository 
                guarantor.
                    (C) A syndicate agent acting on behalf of the 
                direct guarantors.
            (2) Affiliate guarantee.--Any affiliate of a nondepository 
        guarantor may guarantee the performance of the guaranteed 
        obligations of such nondepository guarantor.
    (c) Group Cross-Guarantee Contracts.--
            (1) In general.--
                    (A) Pooling of risk.--Subject to the provisions of 
                this subsection, the cross-guarantee contracts of two 
                or more guaranteed financial groups may be pooled for 
                syndication.
                    (B) Separate contract for a syndicate of pooled 
                contracts.--The direct guarantors comprising the cross-
                guarantee syndicate for a group of cross-guarantee 
                contracts may enter into a separate contract 
                (hereinafter ``group cross-guarantee contract'') under 
                which the cross-guaranteed contracts pooled under such 
                contract shall be incorporated by reference.
                    (C) Proportional risk.--Each direct guarantor under 
                a group cross-guarantee contract shall have the same 
                proportional rights, privileges, duties, and 
                obligations in each cross-guarantee contract 
                incorporated by reference in the syndicate contract as 
                such guarantor has in the syndicate contract.
            (2) Approval of group cross-guarantee contract and its pool 
        of cross-guarantee contracts.--The Corporation shall approve or 
        reject, as a group, a proposed group cross-guarantee contract 
        and the cross-guarantee contracts pooled under that contract.
            (3) Aggregation of assets for purposes of risk 
        diversification.--The assets of all guaranteed parties pooled 
        under a group cross-guarantee contract shall be aggregated for 
        purposes of applying the risk diversification requirement 
        established in section 114(b).
            (4) No cross liability of guaranteed parties.--No 
        guaranteed party under any cross-guarantee contract shall be 
        liable for any portion of the guaranteed obligations of a 
        guaranteed party under any other cross-guarantee contract which 
        is pooled under the same group cross-guarantee contract.
            (5) Individual terms and rates.--The terms, conditions, and 
        premium rates of a cross-guarantee contract pooled under a 
        group cross-guarantee contract may differ from the terms, 
        conditions, and premium rates under any other cross-guarantee 
        contract pooled under the syndicate contract.
            (6) Parties to individual cross-guarantee contracts retain 
        same rights and duties.--No right, privilege, duty, or 
        obligation that applies under this title to any party to a 
        cross-guarantee contract shall be affected by the pooling of 
        the cross-guarantee contract with other contracts covered by a 
        group cross-guarantee contract.
            (7) Additional guaranteed parties under a group cross-
        guarantee contract.--A group cross-guarantee contract may be 
        amended under section 123 to add a guaranteed financial group 
        or a depository institution with a proposed cross-guarantee 
        contract to the existing syndicate contract if--
                    (A) the syndicate contract remains in compliance 
                with all of the provisions of this title after the 
                addition of the institution to the syndicate contract; 
                and
                    (B) the term of the syndicate contract is not 
                extended beyond the original term of any cross-
                guarantee contract already pooled under the syndicate 
                contract by the addition of the institution.
            (8) Term of a group cross-guarantee contract.--A group 
        cross-guarantee contract shall continue in force until each 
        guaranteed party which is guaranteed under the syndicate 
        contract has ceased to be a guaranteed party under a cross-
        guarantee contract pooled under the syndicate contract.
            (9) Length of cross-guarantee contract pooled under a 
        syndicate contract.--No cross-guarantee contract pooled under a 
        group cross-guarantee contract shall have a term longer than 
        the remaining term of the syndicate contract.
            (10) Rule of construction.--Nothing in this subsection 
        shall be construed as preventing a cross-guarantee or stop-loss 
        syndicate from becoming a syndicate under two or more cross-
        guarantee or stop-loss contracts without including such 
        contracts under a group cross-guarantee contract.
    (d) Affiliates and Other Parties Related to a Depository 
Institution Which Shall Be Guaranteed Under One Contract.--
            (1) In general.--Subject to paragraph (4), a guaranteed 
        depository institution shall be guaranteed under the same 
        cross-guarantee contract with all other affiliated guaranteed 
        depository institutions.
            (2) Chain banks.--Subject to paragraph (4), if more than 
        two-thirds of the shares of any depository institution are 
        directly or indirectly under common ownership with more than 
        two-thirds of the shares of any other depository institution, 
        such depository institutions shall be guaranteed depository 
        institutions under the same cross-guarantee contract.
            (3) Domestic branches and agencies of foreign banks.--
                    (A) In general.--If any branch of a foreign bank is 
                a guaranteed banking office, all branches and agencies 
                of such foreign bank shall be guaranteed banking 
                offices under the same cross-guarantee contract.
                    (B) Branches and agencies affiliated with 
                guaranteed depository institutions.--
                            (i) In general.--A guaranteed banking 
                        office shall be guaranteed under the same 
                        cross-guarantee contract as any affiliated 
                        guaranteed depository institution.
                            (ii) Definition of affiliation.--
                                    (I) In general.--For purposes of 
                                this subparagraph, the term 
                                ``affiliate'' shall have the same 
                                meaning as defined in section 101(1) 
                                except that ``control'' shall mean the 
                                ownership or power to, directly or 
                                indirectly, vote an aggregate of 50 
                                percent or more of any class or classes 
                                of the securities which separately or 
                                together, taking into account the 
                                relative voting weight of different 
                                shares, have the power to elect a 
                                majority of the members of the 
                                company's board of directors.
                                    (II) Rules.--The Corporation shall 
                                prescribe rules to implement the intent 
                                of this subparagraph.
          (4) Rules.--For cases under this subsection in which a 
        guaranteed depository institution may be required to be 
        guaranteed under more than one contract, the Corporation shall 
        prescribe rules for determining which cross-guarantee contract 
        shall guarantee such a depository institution's obligations.
    (e) Nondepository Institutions Which May Become Guaranteed 
Companies.--
          (1) Subsidiaries.--
                    (A) In general.--A company controlled by a 
                guaranteed depository institution may be a guaranteed 
                company under the same cross-guarantee contract under 
                which the guaranteed depository institution is 
                guaranteed.
                    (B) Definition of control.--
                            (i) In general.--For purposes of this 
                        paragraph, the term ``control'' means, with 
                        respect to one company's relationship to 
                        another company, one company's ownership or 
                        power to, directly or indirectly, vote an 
                        aggregate of 50 percent or more of any class or 
                        classes of the securities which separately or 
                        together, taking into account the relative 
                        voting weight of different shares, have the 
                        power to elect a majority of the members of 
                        such other company's board of directors.
                            (ii) Rules.--The Corporation shall 
                        prescribe rules to implement the intent of this 
                        paragraph.
            (2) Affiliated foreign banks.--
                    (A) In general.--A foreign bank affiliated to a 
                guaranteed depository institution may be guaranteed 
                under the same cross-guarantee contract under which the 
                guaranteed depository institution is guaranteed.
                    (B) Definition of affiliation.--
                            (i) In general.--For purposes of this 
                        subparagraph, the term ``affiliate'' shall have 
                        the same meaning as defined in section 101(1) 
                        except that ``control'' shall mean the 
                        ownership or power to, directly or indirectly, 
                        vote an aggregate of 50 percent or more of any 
                        class or classes of the securities which 
                        separately or together, taking into account the 
                        relative voting weight of different shares, 
                        have the power to elect a majority of the 
                        members of the company's board of directors.
                            (ii) Rules.--The Corporation shall 
                        prescribe rules to implement the intent of this 
                        paragraph.
    (f) Provisions Relating to Syndicate Agents.--
            (1) Anti-affiliation rules.--A syndicate agent may not--
                    (A) be an affiliate of any guaranteed party under 
                any cross-guarantee or stop-loss contract; or
                    (B) acquire or retain any ownership interest in any 
                guaranteed party under any cross-guarantee or stop-loss 
                contract.
            (2) No depository institution, foreign bank, or 
        nondepository guarantor may be a syndicate agent.--No 
        depository institution, foreign bank, or nondepository 
        guarantor may be a syndicate agent under any cross-guarantee or 
        stop-loss contract.
            (3) Prohibitions on interlocks.--
                    (A) In general.--No owner, director, officer, 
                employee, agent, or partner of a syndicate agent may be 
                an owner, director, officer, employee, agent, or 
                partner of any guaranteed party or other syndicate 
                agent under any cross-guarantee or stop-loss contract.
                    (B) Subcontractors.--
                            (i) In general.--A subcontractor of a 
                        syndicate agent may be a subcontractor to any 
                        guaranteed party or other syndicate agent under 
                        any cross-guarantee or stop-loss contract.
                            (ii) Personnel overlaps.--
                                    (I) In general.--Subject to 
                                subclause (II), an owner, director, 
                                officer, employee, agent, or partner of 
                                a subcontractor of a syndicate agent 
                                may be an owner, director, officer, 
                                employee, agent, or partner of any 
                                guaranteed party or other syndicate 
                                agent under any cross-guarantee or 
                                stop-loss contract.
                                    (II) Exception for guaranteed party 
                                under the same contract.--An owner, 
                                director, officer, employee, agent, or 
                                partner of a subcontractor of a 
                                syndicate agent performing monitoring 
                                work on a guaranteed party under a 
                                cross-guarantee or stop-loss contract 
                                may not be an owner, director, officer, 
                                employee, agent, or partner of the 
                                guaranteed party under the contract.
                    (C) Definition of owner.--For purposes of this 
                paragraph, the term ``owner'' means, with respect to 
                any company, a person who controls the company.

SEC. 113. REQUIREMENTS COMMON TO CROSS-GUARANTEE AND STOP-LOSS 
              CONTRACTS.

    (a) Stop-Loss Limit for Losses of a Guaranteed Party as a Direct 
Guarantor of Other Guaranteed Parties.--
            (1) Definitions.--For purposes of this subsection:
                    (A) Level 1 party.--The term ``level 1 party'' 
                means a guaranteed party under any cross-guarantee or 
                stop-loss contract.
                    (B) Level 2 party.--The term ``level 2 party'' 
                means a direct guarantor of a level 1 party.
                    (C) Level 3 party.--The term ``level 3 party'' 
                means a direct guarantor of a level 2 party.
                    (D) Loss.--The term ``loss'' means the present 
                value, as of the date of a loss event, of the cash 
                outlays, including administrative expenses, required to 
                fulfill a level 2 party's cross-guarantee obligations 
                to a level 1 party due to the occurrence of such loss 
                event, using as a discount rate the sum of--
                            (i) 2 percent; and
                            (ii) the average annual percentage yield on 
                        3-month bills issued by the Secretary of the 
                        Treasury under section 3104(a) of title 31, 
                        United States Code, as determined by the 
                        Corporation as of the most recent issue date 
                        preceding the date of the loss event.
                    (E) Loss event.--The term ``loss event'' means an 
                event described in paragraph (3).
                    (F) Stop-loss liability.--The term ``stop-loss 
                liability'' means an obligation accrued by a level 3 
                party to a level 2 party under paragraph (2).
                    (G) Stop-loss recovery.--The term ``stop-loss 
                recovery'' means the amount accrued by a level 2 party 
                due to the obligation of a level 3 party under 
                paragraph (2).
            (2) Stop-loss obligation of direct guarantors.--
                    (A) Stop-loss recovery.--For any 12-calendar month 
                period in which a cross-guarantee or stop-loss contract 
                exists between level 3 parties and a level 2 party as 
                of the first day of the first calendar month of such 
                period, the level 3 parties shall be obligated to pay 
                to the level 2 party an amount equal to the total 
                amount of losses accrued by the level 2 party in such 
                party's capacity as a direct guarantor of level 1 
                parties during such 12-calendar-month period, minus the 
                sum of--
                            (i) the greater of--
                                    (I) the amount equal to 5 times the 
                                total amount of cross-guarantee and 
                                stop-loss premium income accruing to 
                                the level 2 party in such party's 
                                capacity as a direct guarantor of level 
                                1 parties during such 12-calendar-month 
                                period;
                                    (II) the amount equal to 5 times 
                                the total amount of cross-guarantee and 
                                stop-loss premium income accruing to 
                                the level 2 party in such party's 
                                capacity as a direct guarantor of level 
                                1 parties during the 12-calendar-month 
                                period preceding such 12-calendar-month 
                                period;
                                    (III) in the case of a 12-calendar-
                                month period ending in a month which is 
                                among the first 11 calendar months that 
                                the level 2 party has ever been a party 
                                guaranteed under a cross-guarantee or 
                                stop-loss contract, the amount equal to 
                                the average monthly cross-guarantee and 
                                stop-loss premium income accruing to 
                                the level 2 party in such party's 
                                capacity as a direct guarantor of level 
                                1 parties since first becoming a party 
                                guaranteed under a cross-guarantee or 
                                stop-loss contract, multiplied by 60; 
                                or
                                    (IV) in the case of a 12-calendar-
                                month period ending in a month which is 
                                among the first 23 calendar months that 
                                the level 2 party has ever been a party 
                                guaranteed under a cross-guarantee or 
                                stop-loss contract, the amount equal to 
                                5 times the total amount of cross-
                                guarantee and stop-loss premium income 
                                accruing to the level 2 party in such 
                                party's capacity as a direct guarantor 
                                of level 1 parties, without taking into 
                                account any reduction in premium income 
                                due to the transfer, under section 
                                113(m), of the level 2 party's interest 
                                in any cross-guarantee or stop-loss 
                                syndicate; and
                            (ii) recoveries accrued under this 
                        paragraph by the level 2 party for each 12-
                        calendar-month period ending at the end of each 
                        of the first 11 calendar months in such 12-
                        calendar-month period.
                    (B) Carryover from previous contracts.--The amounts 
                calculated in subparagraph (A) shall include all 
                losses, premium income, and stop-loss recoveries of the 
                level 2 party under any cross-guarantee or stop-loss 
                contracts under which the level 2 party was a party 
                guaranteed during such 12-calendar-month period.
                    (C) Merger or consolidation of two or more 
                guaranteed parties.--In the case of any level 2 party 
                which merged or consolidated with any other party which 
                was a level 2 party guaranteed under another cross-
                guarantee or stop-loss contract, the amounts calculated 
                in subparagraph (A) shall include all losses, premium 
                income, and stop-loss recoveries of both of the parties 
                prior to the merger or consolidation.
                    (D) Other guaranteed parties under the contract 
                which were previously direct guarantors.--The 
amounts calculated in subparagraph (A) for the level 2 party shall 
include all losses, premium income, and stop-loss recoveries of any 
other party guaranteed under the same cross-guarantee contract as the 
level 2 party, which occurred while such other party was a level 2 
party while guaranteed under the same or another cross-guarantee or 
stop-loss contract.
                    (E) Timing of stop-loss recovery.--A stop-loss 
                recovery shall accrue as of the last day of the last 
                calendar month of the 12-calendar-month period under 
                which the stop-loss recovery was calculated.
                    (F) Adjustment for catastrophic losses.--
                            (i) In general.--If, for any calendar 
                        month, a closed loop exists in which every 
                        direct guarantor under the contracts in the 
                        closed loop accrues a stop-loss recovery for 
                        such month, then the calculation of stop-loss 
                        recovery for the 12-calendar-month period 
                        ending in such month for all the contracts in 
                        the closed loop shall be adjusted as required 
                        under clauses (ii) and (iii).
                            (ii) Adjustment.--If, for any calendar 
                        month, a closed loop meets the conditions of 
                        clause (i), the amounts calculated in 
                        subparagraph (A) shall, for the 12-calendar 
                        month period in which such calendar month is 
                        the last month, be adjusted by increasing from 
                        5 to 6, under clauses (i)(I) and (i)(II) of 
                        subparagraph (A), the amount multiplied by the 
                        premium income accruing to a level 2 party and 
                        by increasing from 60 to 72, under clause 
                        (i)(III) of subparagraph (A), the amount 
                        multiplied by the average monthly premium 
                        accruing to the level 2 party.
                            (iii) Further adjustment.--If, after making 
                        the adjustments to the calculation of stop-loss 
                        recovery under clause (ii), every contract in 
                        the closed loop under clause (i) still accrues 
                        a stop-loss recovery, the amounts under clauses 
                        (i)(I) and (i)(II) of subparagraph (A) shall be 
                        increased by 1 and the amount under clause 
                        (i)(III) of subparagraph (A) shall be increased 
                        by 12, until at least one direct guarantor 
                        under a contract in such closed loop is not 
                        accruing a stop-loss recovery for the calendar 
                        month in clause (i).
            (3) Determination of time of loss.--A level 2 party shall 
        accrue a loss as the direct guarantor of a Level 1 party as 
        of--
                    (A) the last day of the calendar month in which the 
                level 1 party accrues a stop-loss recovery; or
                    (B) the day on which, with respect to a level 1 
                party which is a guaranteed company, the earliest of 
                the following occurs:
                            (i) Notice is filed with the Corporation 
                        under section 118(d)(2)(D) by the cross-
                        guarantee syndicate of which the level 2 party 
                        is a member that the syndicate has assumed 
                        control of the level 1 party.
                            (ii) A transaction is completed which the 
                        Corporation, upon request by the syndicate 
                        agent under the contract and pursuant to 
                        paragraph (9), determines--
                                    (I) involves the acquisition of the 
                                level 1 party or a significant portion 
                                of the party's assets, the merger or 
                                consolidation of the level 1 party with 
                                any other party, the liquidation of the 
                                level 1 party, or any other similar 
                                transaction involving the level 1 
                                party; and
                                    (II) results proximately in a loss 
                                for the level 2 parties in their 
                                capacity as guarantors under the cross-
                                guarantee contract.
                            (iii) The level 1 party becomes a debtor in 
                        a case under title 11, United States Code.
            (4) Preparation of original loss estimate by syndicate 
        agent.--The syndicate agent for the cross-guarantee contract 
        under which a level 2 party is a direct guarantor shall, 
        whenever a loss event under subparagraph (3)(B) occurs under 
        such contract--
                    (A) estimate the loss for such loss event; and
                    (B) by the 15th day of the calendar month following 
                the calendar month in which such loss event occurs, 
                notify the central electronic repository of the 
                estimate of the loss under subparagraph (A).
            (5) Revision of loss estimate by syndicate agent.--The 
        syndicate agent for the cross-guarantee contract under which a 
        level 2 party is a direct guarantor shall, whenever a loss 
        event under subparagraph (3)(B) occurs under such contract--
                    (A) revise the original estimate of the loss for 
                such loss event and notify the central electronic 
                repository of such revised estimate at least as often 
                as the 15th day of--
                            (i) the third calendar month following the 
                        calendar month in which the loss event took 
                        place;
                            (ii) the twelfth calendar month following 
                        the calendar month in which the loss event took 
                        place; and
                            (iii) every twelfth month after the 
                        calendar month in clause (ii); and
                    (B) for each estimate of the loss described in 
                clauses (A)(ii) and (A)(iii), obtain from a third party 
                a confirmation of the reasonableness of the revised 
                estimate of the loss.
            (6) Completion of cash outlays becomes final amount.--
        Notwithstanding paragraph (5), once a level 2 party has made 
        the final cash disbursement to fulfill such party's cross-
        guarantee obligations due to any loss event under subparagraph 
        (3)(B)--
                    (A) the syndicate agent for the cross-guarantee 
                contract under which the level 2 party is a direct 
                guarantor shall calculate the loss from such loss event 
                (subject to the third party confirmation in 
                subparagraph (5)(B)) and notify the central electronic 
                repository of this calculation; and
                    (B) no further revisions of the loss from such loss 
                event shall be permitted.
            (7) Calculation and clearinghouse duties of central 
        electronic repository.--
                    (A) Calculation of stop-loss liability.--After 
                notification under paragraphs (4), (5), and (6), the 
                central electronic repository shall calculate the stop-
                loss recovery for every level 2 party for every 12-
                month calendar period affected by the initial estimate, 
                revised estimates, and final loss amounts.
                    (B) Adjustment for interest.--Upon completing the 
                calculations under subparagraph (A), the central 
                electronic repository shall then adjust the amounts 
                owed between level 2 and level 3 parties as specified 
                in paragraph (8).
                    (C) Netting calculation.--Upon completing the 
                calculations under subparagraph (B), the central 
                electronic repository shall, for each person that is a 
                direct guarantor or guaranteed party, net the amounts 
                owed by such person in its capacity as a level 3 party 
                with the amount such person is entitled to receive in 
                its capacity as a level 2 party to determine the 
                overall liability or right to payment for such person.
                    (D) Notification of parties.--Within five business 
                days after receiving notification under paragraphs (4), 
                (5), and (6), the central electronic repository shall 
                notify any level 2 party or level 3 party of the 
                results of the calculations under subparagraphs (A), 
                (B), and (C).
                    (E) Settlement.--
                            (i) Payments to be made.--Within three 
                        business days after receiving notification 
                        under subparagraph (D), each party which, given 
                        the calculations under subparagraph (C), has a 
                        net liability shall pay the amount of such 
                        liability to the central electronic repository.
                            (ii) Disbursement of payments.--Upon 
                        receiving all payments under clause (i), the 
                        central electronic repository shall promptly 
                        disburse to each party which has a right to 
                        payment, given the calculations under 
                        subparagraph (C), the amount owed such party.
                            (iii) Penalties for late payment.--If an 
                        obligation under clause (i) is not paid in a 
                        timely manner, any party which fails to perform 
                        its obligation under this title to pay the 
                        balance owed under clause (i), including the 
                        guarantors of the specific party most directly 
                        liable under clause (i), shall be liable to the 
                        Corporation for damages of 10 percent of the 
                        unpaid amount for which the party is obligated, 
                        plus interest at the rate specified under 
                        subparagraph (C) of paragraph (8).
                    (F) Rules.--The Corporation may prescribe such 
                rules as may be necessary to implement this paragraph.
            (8) Calculation of stop-loss payments plus interest.--
                    (A) Original estimate.--If a determination under 
                subparagraph (7)(A) is based on the original estimate 
                of loss under paragraph (4) and results in a stop-loss 
                recovery for a level 2 party, each level 3 party shall 
                owe to the level 2 party the amount of the stop-loss 
                liability for such level 3 party plus interest on the 
                amount of such liability from the last day of the month 
                in which the loss occurred to the date of payment under 
                this subparagraph.
                    (B) Revision of estimates.--If a determination 
                under subparagraph (7)(A) results in--
                            (i) an increase from the previous estimate 
                        of the stop-loss recovery for a particular 
                        month, then each level 3 party shall owe to the 
                        level 2 party the amount of the increase in the 
                        level 3 party's stop-loss liability plus 
                        interest on the amount of the increase in such 
                        liability from the last day of such month until 
                        payment is made under this clause; or
                            (ii) a decrease from the previous estimate 
                        of the stop-loss recovery for a particular 
                        month, then the level 2 party shall owe each 
                        level 3 party the amount of the decrease in 
                        such level 3 party's stop-loss liability plus 
interest on the amount of the decrease in such liability from the last 
day of such month until payment is made under this clause.
                    (C) Interest rate.--The parties to any cross-
                guarantee or stop-loss contract shall agree to the 
                interest rate to be used for the calculation of 
                interest under subparagraphs (A) and (B).
            (9) CGRC adjudication of timing of loss events.--
                    (A) Informal cgrc adjudication.--The Corporation 
                shall establish procedures to determine the timing of 
                loss events under paragraph (3)(B)(ii).
                    (B) Judicial review.--Any guaranteed party may seek 
                judicial review of any determination under subparagraph 
                (A).
    (b) Direct Guarantor's Cross-Guarantee Obligations Under the 
Contract are Independent From Other Parties' Obligations.--The cross-
guarantee obligations of a direct guarantor under any cross-guarantee 
or stop-loss contract shall be independent of any obligation of any 
other party under the contract.
    (c) Guaranteed Party Cannot be a Direct Guarantor Under the Same 
Contract.--No guaranteed party may be a direct guarantor under the 
cross-guarantee or stop-loss contract under which such party is a 
guaranteed party.
    (d) Direct Guarantors Prohibited From Obtaining Collateral for 
Cross-Guarantee Obligations.--No direct guarantor under any cross-
guarantee or stop-loss contract may obtain or retain a lien or security 
interest in a guaranteed party under the contract, or in any assets of 
the guaranteed party, in connection with such guarantor's cross-
guarantee obligations under the contract, unless the guaranteed party 
is a guaranteed banking office.
  (e) Provisions of Contract Regarding Division of Liability.--
            (1) Several liability.--No direct guarantor under any 
        cross-guarantee or stop-loss contract shall be jointly liable 
        for the cross-guarantee obligations of any other direct 
        guarantor under the contract.
            (2) Division of liability.--
                    (A) Determined by contract.--Subject to section 
                116(d), the terms of a cross-guarantee or stop-loss 
                contract shall establish the division of liability 
                among the direct guarantors under the contract.
                    (B) Adjustment.--If the division of liability under 
                a cross-guarantee or stop-loss contract does not equal 
                100 percent, each direct guarantor's assigned liability 
                under the contract shall be adjusted proportionately so 
                that the division of liability equals 100 percent.
            (3) Liability of direct guarantor proportionate to interest 
        in syndicate.--The rights, privileges, duties, and obligations 
        of a direct guarantor under a cross-guarantee or stop-loss 
        contract shall be proportionate to such guarantor's interest in 
        the syndicate.
            (4) Syndicates not partnerships or joint ventures.--
        Notwithstanding any state law, a cross-guarantee or stop-loss 
        syndicate is not a partnership or joint venture, except for 
        purposes of section 117(c)(1).
    (f) Premium Requirements.--Each cross-guarantee and stop-loss 
contract shall describe the method for calculating, and the timing of 
payment, for any premium payable to the direct guarantors under the 
contract.
    (g) Maximum Term of Contracts.--
            (1) Term of contract.--A cross-guarantee or stop-loss 
        contract may not have a term of more than 5 years.
            (2) Amendments.--The parties to any cross-guarantee or 
        stop-loss contract may agree to extend the term of the contract 
        as long as the contract as amended still expires within 5 years 
        after the original effective date of the contract.
            (3) Renewal of contract must be approved by the 
        corporation.--No cross-guarantee or stop-loss contract may be 
        renewed by the parties to the contract, and no successor 
        contract may become effective, without the approval of the 
        Corporation under section 123.
            (4) Remedy for continuing a cross-guarantee contract after 
        expiration date.--After the 30th day following the expiration 
        of a cross-guarantee contract in which--
                    (A) the direct guarantors have not assumed control 
                under section 118(a) of all the guaranteed companies 
                guaranteed under the contract;
                    (B) a guaranteed party under such contract has not 
                become a guaranteed party under another cross-guarantee 
                contract;
                    (C) a successor contract is not being considered 
                for approval under section 123 or the Corporation has 
                already rejected two successor contracts;
                    (D) the guaranteed party is not appealing the 
                rejection by the Corporation, under section 123, of a 
                successor contract or final judgment has been reached 
                on such an appeal; or
                    (E) the guaranteed party is not a debtor under any 
                proceeding under title 11 of the United States Code,
        the Corporation may appoint a receiver for the guaranteed party 
        and file a bankruptcy petition, pursuant to section 125(c).
    (h) Cancellation of Contracts by Syndicates.--
            (1) Right to cancel.--
                    (A) Default rule.--Unless otherwise agreed in a 
                cross-guarantee or stop-loss contract, a cross-
                guarantee or stop-loss syndicate may cancel such 
                contract at any time without cause provided that the 
                syndicate agent under such contract provides notice of 
                such cancellation to the Corporation and the guaranteed 
                party or parties under the contract at least 90 days 
                prior to the effective date of cancellation.
                    (B) Minimum notice period still required for any 
                contrary agreement.--If the parties to a cross-
                guarantee or stop-loss contract agree to cancellation 
                rules different than those provided under subparagraph 
                (A), the contract shall still require the syndicate 
                agent under the contract to give notice of cancellation 
                to the Corporation and to the guaranteed party or 
                parties under the contract at least 90 days prior to 
                the effective date of the cancellation.
                    (C) Withdrawal of cancellation notice.--A cross-
                guarantee syndicate may, prior to the cancellation 
                becoming effective, withdraw the cancellation notice 
                issued under this paragraph.
            (2) Cancellation of one guaranteed financial group under a 
        group contract.--A cross-guarantee syndicate may cancel a 
        cross-guarantee contract with 1 guaranteed financial group 
        under a group cross-guarantee contract without affecting the 
        rights, privileges, duties, and obligations arising out of the 
        syndicate contract with regard to the other guaranteed 
        financial groups under the syndicate contract.
            (3) Limitations on guranteed party.--A guaranteed party 
        under any cross-guarantee or stop-loss contract may not become 
        a direct guarantor under any other cross-guarantee or stop-loss 
        contract during any of the following periods:
                    (A) The period beginning on the date such party 
                receives a notice of cancellation under paragraph (1) 
                or (2) with respect to such contract and ending on the 
                date the party becomes a guaranteed party under a 
                successor contract or the cancellation notice is 
                withdrawn under paragraph (1)(C).
                    (B) The period beginning on the date the contract 
                expires and ending on the date the party becomes a 
                guaranteed party under a successor contract.
            (4) Continued effectiveness of cross-guarantee contracts 
        until other coverage is obtained.--
                    (A) In general.--The obligations of any party under 
                a cross-guarantee or stop-loss contract shall remain in 
                effect after the effective date of the cancellation of 
                the contract by the direct guarantors or after the 
                expiration of such contract, as the case may be, 
                until--
                            (i) the guaranteed party becomes a 
                        guaranteed party under another cross-guarantee 
                        or stop-loss contract; or
                            (ii) in the case of a guaranteed party 
                        which ceases to exist as a legal entity, the 
                        guaranteed obligations of the institution are 
                        satisfied or become guaranteed obligations 
                        covered under another cross-guarantee or stop-
                        loss contract.
                    (B) Cancellation when nondepository guarantor is 
                not a direct guarantor.--Notwithstanding subparagraph 
                (A), a cancellation of a stop-loss contract by a stop-
                loss syndicate shall take effect immediately if the 
                party guaranteed under the contract--
                            (i) is not at the time of cancellation a 
                        direct guarantor under any cross-guarantee or 
                        stop-loss contract; and
                            (ii) has transferred any remaining risk 
                        under any cross-guarantee or stop-loss contract 
                        under which such guarantor was formerly a 
                        direct guarantor to another direct guarantor.
    (i) Cancellation of Contracts by Guaranteed Party.--
            (1) In general.--The guaranteed financial group or 
        nondepository guarantor which is the party guaranteed under a 
        cross-guarantee or stop-loss contract may notify the syndicate 
        agent for the direct guarantors under the contract at any time 
        of such party's intention to cancel the contract.
            (2) Cancellation not effective until substitute coverage 
        obtained.--The cancellation of any cross-guarantee or stop-loss 
        contract under paragraph (1) shall not take effect until the 
        cancelling party becomes a guaranteed financial group or a 
        nondepository guarantor under another cross-guarantee or stop-
        loss contract.
            (3) Allowing nondepository guarantors to exit the 
        business.--Notwithstanding paragraph (2), a cancellation of a 
        stop-loss contract by a nondepository guarantor shall take 
        effect immediately if the nondepository guarantor--
                    (A) is not at the time of cancellation a direct 
                guarantor under any cross-guarantee or stop-loss 
                contract; and
                    (B) has transferred any remaining risk under any 
                cross-guarantee or stop-loss contract under which such 
                guarantor was formerly a direct guarantor to another 
                direct guarantor.
            (4) Cancellation fee.--The cross-guarantee or stop-loss 
        syndicate under a cross-guarantee or stop-loss contract which 
        is canceled pursuant to paragraph (1) may impose a cancellation 
        fee in an amount determined in accordance with the terms of the 
        contract.
    (j) Continued Effectiveness of Contracts After Conversion of 
Charter of Depository Institution.--If--
            (1) any State depository institution becomes a Federal 
        depository institution;
            (2) any Federal depository institution becomes a State 
        depository institution;
            (3) any bank becomes a savings association;
            (4) any savings association becomes a bank; or
            (5) any depository institution in any other way modifies 
        its legal status,
through a conversion of the charter of the depository institution, any 
cross-guarantee contract under which the institution is a guaranteed 
depository institution and which is in effect immediately before such 
conversion shall remain in effect after the conversion.
    (k) Continuing Applicability of Obligations Under the Contracts.--
            (1) No voiding or rescinding of contracts.--No party to a 
        cross-guarantee or stop-loss contract may void or rescind the 
        contract, regardless of any defense to the existence or 
        enforceability of the contract that might exist under Federal 
        or State law.
            (2) No excuses to performance.--Notwithstanding any 
        provision of Federal or State law, no excuse for the failure to 
        perform any obligation under a cross-guarantee or stop-loss 
        contract shall be effective.
            (3) Noncompliance does not affect obligations.--A party to 
        a cross-guarantee or stop-loss contract shall remain obliged 
        under the contract regardless of whether--
                    (A) the contract ceases to comply with any 
                requirement under this title; or
                    (B) one or more parties to the contract fail to 
                comply with this title.
    (l) Distribution of Losses Between Prior and Successor 
Syndicates.--
            (1) Claims-made guarantee.--Subject to paragraph (2), as 
        between two or more cross-guarantee or stop-loss syndicates 
        which have over time guaranteed a particular guaranteed party, 
        a cross-guarantee obligation shall lie with the syndicate which 
        was the cross-guarantee or stop-loss syndicate at the time a 
        cause of action described under section 117(e)(1)(A)(i) was 
        filed with respect to the obligation.
            (2) Exception for stop-loss obligations.--The obligation of 
        direct guarantors under section 113(a) shall lie with the 
        cross-guarantee syndicate described under paragraph (2)(A) of 
        such subsection.
    (m) Substitution of Direct Guarantors.--
            (1) Authorization of transfers subject to cgrc approval.--
                    (A) In general.--Any direct guarantor's rights, 
                privileges, duties, and obligations under a cross-
                guarantee or stop-loss contract, and any portion of any 
                such rights, privileges, duties, and obligations, may 
                be transferred to a successor direct guarantor, subject 
                to the approval of the Corporation (pursuant to section 
                123 of this title).
                    (B) Transfer of long-tail obligations.--A person 
                which was formerly a direct guarantor under a cross-
                guarantee or stop-loss contract which was formerly, but 
                no longer is, in effect may transfer to any person 
                which is a designated direct guarantor under section 
                116(b) any residual rights, privileges, duties, and 
                obligations under the contract, subject to the approval 
                of the Corporation (pursuant to section 123 of this 
                title).
            (2) Transferor no longer obliged on contract.--
        Notwithstanding any Federal or State law, a transferor of an 
        interest under paragraph (1) shall not be obliged to perform 
        the transferee's obligations under the contract should the 
        transferee fail to perform.
            (3) Parties authorized to restrict substitution of 
        guarantors in a contract.--A guaranteed party or a cross-
        guarantee or stop-loss syndicate under a cross-guarantee or 
        stop-loss contract may provide in such contract that any 
        transfer under paragraph (1) of any interest of any direct 
        guarantor in such contract shall be subject to the approval of 
        such party or syndicate.
            (4) Allocation of income and losses between the transferor 
        and transferee.--
                    (A) In general.--Subject to subparagraph (B), a 
                transferor's accrued (but unpaid) premium income and 
                losses as of the date of transfer under paragraph (1) 
                may be allocated between the transferor and transferee 
                in any manner provided for in the transfer agreement.
                    (B) Losses on cross-guarantee obligations.--The 
                transferor shall be liable for any losses due to a loss 
                event (as defined in section 113(a)) occurring prior to 
                a transfer under paragraph (1) and the transferee shall 
                be liable for any losses due to a loss event after the 
                transfer.
    (n) Syndicate Voting Rules.--
            (1) Proportional voting.--Each cross-guarantee and stop-
        loss contract shall provide that a direct guarantor's voting 
        rights in the cross-guarantee or stop-loss syndicate shall be 
        proportional to such guarantor's interest in the syndicate.
            (2) Variations permitted in voting requirements.--A cross-
        guarantee or stop-loss contract may provide that the number of 
        votes needed to approve an action by a cross-guarantee or stop-
        loss syndicate under the contract may differ depending upon the 
        action on which a vote is taken.
    (o) Guaranteed Party Can Be Covered Only Under One Contract.--No 
guaranteed party under any cross-guarantee or stop-loss contract may be 
a guaranteed party under another cross-guarantee or stop-loss contract.
    (p) Authority of the CGRC To Direct Transfer.--
            (1) In general.--If any merger, acquisition, consolidation, 
        or other combination of two or more direct guarantors within 
        any cross-guarantee or stop-loss syndicate occurs which causes 
        the contract to materially exceed the limitations set forth in 
        section 114(b)(1) or paragraph (1) or (2) of section 115(b), 
        the Corporation may issue an order directing the merged or 
        consolidated guarantor to obtain a successor for that part of 
        the guarantor's interest that exceeds the statutory limit.
            (2) Extent of guaranteed party's ability to block 
        transfer.--In the case of any transfer under paragraph (1), a 
        guaranteed party may bar the transfer under the authority of 
        subsection (m)(3) if such party demonstrates to the Corporation 
        that that transfer of the interest to a particular guarantor 
        would raise reasonable competitive concerns.
    (q) Merger or Consolidation of Two or More Guaranteed Parties.--
After any merger, acquisition, consolidation, or other combination of 
two or more guaranteed parties, the successor party's cross-guarantee 
or stop-loss contract shall meet the same requirements under section 
114(b)(1) or paragraph (1) or (2) of section 115(b), that the successor 
would have to meet if the successor sought to become a guaranteed party 
under a new cross-guarantee or stop-loss contract.
    (r) Modification of Contracts.--An agreement amending a cross-
guarantee or stop-loss contract needs no consideration to be binding.
    (s) Bar on Reinsurance.--Subject to sections 112(a)(3) and 
112(b)(2), a direct guarantor may not reinsure such guarantor's 
interest in a cross-guarantee or stop-loss contract.
    (t) Rule of Construction Relating to Contract Terms.--No provision 
of this title shall be construed as prohibiting any cross-guarantee or 
stop-loss contract from containing any term or condition other than 
terms or conditions expressly prohibited by this title.

SEC. 114. REQUIREMENTS APPLICABLE ONLY TO CROSS-GUARANTEE CONTRACTS.

    (a) Obligations Guaranteed Under a Cross-Guarantee Contract.--
            (1) Obligations required to be guaranteed obligations.--The 
        following obligations of any guaranteed company or guaranteed 
        banking office shall be guaranteed obligations under a cross-
        guarantee contract:
                    (A) Deposits.--
                            (i) Banks and savings associations.--In the 
                        case of a guaranteed depository institution, 
                        all deposits.
                            (ii) Branches of foreign depository 
                        institutions.--In the case of a guaranteed 
                        banking office, all deposits of such office 
                        payable at a location within the United States.
                    (B) Interest-bearing obligations other than 
                subordinated debt.--All interest-bearing obligations 
                other than subordinated debt.
                    (C) All other customer balances and property.--All 
                balances owed by, or previously identified property 
                held in custody by, the guaranteed company or 
                guaranteed banking office in its capacity as a 
                fiduciary, including escrows, balances in brokerage 
                accounts, and balances on stored-value cards.
                    (D) Balances due clearinghouses, the federal 
                reserve, and in settlement of other transactions.--All 
                obligations owed to clearinghouses, to the Federal 
                Reserve for funds transfers, and to other funds and 
                securities clearance and settlement systems.
                    (E) Other obligations owed to direct guarantors or 
                guaranteed depository institutions.--All non-interest-
                bearing obligations owed to a direct guarantor or 
                guaranteed depository institution.
                    (F) Cross-guarantee obligations.--Cross-guarantee 
                obligations for which the guaranteed company is liable 
                as a direct guarantor under any other cross-guarantee 
                or stop-loss contract.
                    (G) Backup fund payments.--Obligations to repay the 
                cross-guarantee backup fund pursuant to section 
                128(c)(3).
                    (H) Certain other obligations.--All direct and 
                contingent liabilities under any contract or commitment 
                under--
                            (i) any letter of credit or bankers' 
                        acceptance; and
                            (ii) any securities contract, commodity 
                        contract, forward contract, repurchase 
                        agreement, or swap agreement (as such terms are 
                        defined in section 11(e)(8)(D) of the Federal 
                        Deposit Insurance Act).
                    (I) Liability under recourse agreements.--Any 
                liability under recourse agreements that arises when a 
                guaranteed company or guaranteed banking office sells 
                loans or other assets.
                    (J) Certain lines of credit.--Any binding 
                commitment to lend funds.
                    (K) Accrued interest.--Any accrued interest on an 
                underlying obligation which is a guaranteed obligation.
                    (L) Fraud related to subordinated debt.--The 
                liability of any guaranteed party for damages due to 
                the fraudulent actions of such party related to 
                marketing subordinated debt.
                    (M) Obligations erroneously confirmed by syndicate 
                agent.--Any obligation binding on the cross-guarantee 
                syndicate under section 117(a)(4)(B).
                    (N) Residual obligations which the cgrc deems must 
                be guaranteed.--Subject to paragraph (3)(C), any other 
                obligation which the Corporation determines, through 
                rules consistent with the purposes of this title, 
                should be guaranteed under each cross-guarantee 
                contract.
            (2) Obligations which may not be guaranteed.--The following 
        obligations of any guaranteed company or guaranteed banking 
        office may not be guaranteed obligations under a cross-
        guarantee contract:
                    (A) Subordinated debt.--
                            (i) In general.--Subordinated debt issued 
                        by the guaranteed company or guaranteed banking 
                        office.
                            (ii) Includes debt which may be redeemed by 
                        the debtholder by check or other means.--For 
                        purposes of this subparagraph, the term 
                        ``subordinated debt'' includes subordinated 
                        debt which may be withdrawn by or credited to 
                        the debtholder by a check, wire transfer, or 
                        other order of the debtholder.
                    (B) Equity interests.--Any equity interest in the 
                guaranteed company or guaranteed banking office.
            (3) Obligations which may be included under a cross-
        guarantee contract.--
                    (A) In general.--Any obligation of any guaranteed 
                company or guaranteed banking office which is not 
                required to be, or not prohibited from being, a 
                guaranteed obligation under paragraphs (1) and (2) may 
                be a guaranteed obligation under a cross-guarantee 
                contract to the extent the contract so expressly 
                provides.
                    (B) Rules upon switch to a successor contract.--Any 
                obligation that was a guaranteed obligation under the 
                previous cross-guarantee contract shall be a guaranteed 
                obligation under the successor contract, if such 
                obligation accrues prior to the obligee receiving 
                notice from the syndicate agent under the successor 
                contract that obligations of the same type as were 
                guaranteed under the previous contract shall not be 
                guaranteed under the successor contract.
                    (C) Judgments and settlements.--Unless the cross-
                guarantee contract expressly provides to the contrary, 
                no judgment or settlement from any action arising from 
                any alleged tortious conduct, breach of contract, or 
                violation of statutory obligation by the guaranteed 
                company shall be a guaranteed obligation.
    (b) Risk Diversification.--
            (1) Minimum number of direct and second-tier guarantors.--
        Each cross-guarantee contract shall comply with the 
        requirements relating to the maximum percentage of all 
        guaranteed obligations under the contract which may be 
        guaranteed by any one direct guarantor and the minimum number 
        of second-tier guarantors which the guaranteed party or parties 
        shall have in the aggregate, as determined under the following 
        table (as adjusted pursuant to paragraph (2)) on the basis of 
        the total assets of all the guaranteed parties under the 
        contract:

------------------------------------------------------------------------
                                              Maximum                   
                                           percentage of                
                                              cross-                    
    Aggregate amount of assets of all        guarantee    Minimum number
  guaranteed parties under the contract      liability    of second-tier
                                           assumable by     guarantors  
                                           any 1 direct                 
                                             guarantor                  
------------------------------------------------------------------------
 $100,000,000 or less...................             5.0             100
Greater than $100,000,000 but less than                                 
 or equal to $500,000,000...............             4.0             125
Greater than $500,000,000 but less than                                 
 or equal to $1,000,000,000.............             2.5             150
Greater than $1,000,000,000 but less                                    
 than or equal to $10,000,000,000.......             1.5             200
More than $10,000,000,000...............             1.0             250
------------------------------------------------------------------------

            (2) Adjustment of dollar amounts for inflation.--The 
        amounts contained in the table in paragraph (1) relating to the 
        aggregate assets of guaranteed parties under any cross-
        guarantee contract shall be adjusted annually by the 
        Corporation, after the end of the 1-year period beginning on 
        the date of the enactment of this Act, based on the change in 
        the implicit price deflator for the gross domestic product or 
        its successor measure.
    (c) Basis for Calculating Equity Capital.--Each cross-guarantee 
contract shall describe the manner in which the equity capital of the 
guaranteed financial group shall be calculated for purposes of the 
contract.
    (d) Emergency Liquidity.--Notwithstanding section 113(e)(3), the 
parties to a cross-guarantee contract may include terms relating to the 
provision of emergency liquidity to a guaranteed party by any direct 
guarantor without regard to the relative interest in the contract held 
by any guarantor providing the liquidity.
    (e) Internal Guarantees.--A guaranteed company under any cross-
guarantee contract shall be jointly and severally liable to the direct 
guarantors under such contract for any loss incurred by the guarantors 
in connection with the cross-guarantee obligations of the guarantors to 
any other guaranteed company under such contract.
    (f) Delegation of Performance of Guaranteed Obligations.--
            (1) In general.--No guaranteed company or guaranteed 
        banking office may delegate or assign the performance of a 
        guaranteed obligation unless the person to which the 
        performance is delegated or assigned is a guaranteed company or 
        guaranteed banking office.
            (2) Transferring party and syndicate no longer obliged on 
        obligation.--Notwithstanding any Federal or State law, a 
        guaranteed company or guaranteed banking office that was the 
        transferor of the guaranteed obligation, and the cross-
        guarantee syndicate for such a company or office, shall not be 
        obliged to perform on a guaranteed obligation transferred in 
        compliance with paragraph (1).

SEC. 115. REQUIREMENTS APPLICABLE ONLY TO STOP-LOSS CONTRACTS.

    (a) Obligations Guaranteed Under a Stop-Loss Contract.--
            (1) Obligations required to be guaranteed obligations.--A 
        nondepository guarantor's cross-guarantee obligations shall be 
        guaranteed obligations under a stop-loss contract.
            (2) No other guaranteed obligations.--Except for the 
        obligations described in paragraph (1), no obligation of a 
        nondepository guarantor may be a guaranteed obligation.
    (b) Risk Diversification.--
            (1) Minimum numbers of direct guarantors.--A direct 
        guarantor under a stop-loss contract may not guarantee more 
        than 2 percent of the guaranteed obligations under such 
        contract.
            (2) Second-tier guarantors.--The direct guarantors under 
        any stop-loss contract shall have, in the aggregate, no fewer 
        than 150 direct guarantors.

SEC. 116. ELIGIBILITY AND REQUIREMENTS FOR DIRECT GUARANTORS.

    (a) Eligibility.--
            (1) In general.--No person may become a direct guarantor 
        unless such person is a guaranteed company or a nondepository 
        guarantor.
            (2) Nondepository guarantor.--
                    (A) In general.--Subject to subparagraphs (B) and 
                (C) of this paragraph and subsection (c) of this 
                section, any person may be a nondepository guarantor.
                    (B) Ineligibility of depository institutions.--
                            (i) In general.--No depository institution, 
                        or subsidiary of a depository institution, may 
                        be a nondepository guarantor.
                            (ii) Rule of construction for foreign 
                        banks.--Clause (i) shall not be construed as 
                        prohibiting a foreign bank which has a branch 
                        in the United States from being a nondepository 
                        guarantor.
                            (iii) Rule if foreign bank is a guaranteed 
                        company.--A foreign bank which is a guaranteed 
                        company may not be a nondepository guarantor.
                    (C) Ineligibility of government entities.--
                            (i) In general.--No entity which--
                                    (I) has direct or indirect taxing 
                                authority;
                                    (II) is a government sponsored 
                                enterprise; or
                                    (III) may issue securities in which 
                                the owners of the securities are exempt 
                                from taxation under State or Federal 
                                law,
                        may be a nondepository guarantor.
                            (ii) Rule of construction for government 
                        pension funds.--Clause (i) shall not be 
                        construed as to prohibit any pension fund 
                        operated for the benefit of government 
                        employees from being a nondepository guarantor.
            (3) Guaranteed depository institutions authorized to be 
        direct guarantors.--Notwithstanding any other Federal or State 
        law restricting the powers of depository institutions, a 
        guaranteed depository institution may be a direct guarantor 
        under any cross-guarantee or stop-loss contract.
    (b) Designated Direct Guarantor.--
            (1) Only one guaranteed company within a guaranteed 
        financial group may be a direct guarantor.--No guaranteed 
        company shall be a direct guarantor if another guaranteed 
        company under the same cross-guarantee contract already is a 
        direct guarantor under any cross-guarantee or stop-loss 
        contract.
            (2) Designation of direct guarantor in cross-guarantee 
        contract.--In the case of a cross-guarantee contract in which 
        two or more companies are guaranteed under the contract, the 
        contract shall designate which guaranteed company may, in 
        accordance with paragraph (1), be a direct guarantor.
    (c) Financial Resource Requirements for Nondepository Guarantors.--
No person may become a nondepository guarantor unless such person has a 
net worth of at least $100,000,000 at the time such person would, but 
for this paragraph, become a direct guarantor under a cross-guarantee 
or stop-loss contract.
    (d) Risk Diversification Requirements for Direct Guarantors.--
            (1) Projected annual premium capacity and projected annual 
        premium limit.--A person may not become a direct guarantor 
        under a cross-guarantee or stop-loss contract if, upon the 
        contract (but for this paragraph) taking effect--
                    (A) the sum of the estimated annual premium which 
                the person would receive as a direct guarantor under 
                the contract and the person's projected annual premium 
                income would exceed such person's projected annual 
                premium capacity as of--
                            (i) in the case of a contract which would 
                        take effect on or before the 15th day of any 
                        calendar month, the second calendar month 
                        preceding such calendar month; or
                            (ii) in the case of a contract which would 
                        take effect after the 15th day of any calendar 
                        month, the end of the calendar month preceding 
                        such calendar month; or
                    (B) the estimated annual premium which the person 
                would receive as a direct guarantor under the contract 
                would exceed such person's projected annual premium 
                limit as of--
                            (i) in the case of a contract which would 
                        take effect on or before the 15th day of any 
                        calendar month, the second calendar month 
                        preceding such calendar month; or
                            (ii) in the case of a contract which would 
                        take effect after the 15th day of any calendar 
                        month, the end of the calendar month preceding 
                        such calendar month.
            (2) Calculation of projected annual premium.--
                    (A) In general.--The syndicate agent under any 
                cross-guarantee or stop-loss contract shall determine 
                the projected annual premium earned by any direct 
                guarantor for any calendar month by calculating the 
                amount of such guarantor's share of the premium accrued 
                under the contract during such month and then 
                annualizing such amount.
                    (B) First two months.--During the first two 
                calendar months in which any cross-guarantee or stop-
                loss contract is in effect, the syndicate agent shall 
                determine the projected annual premium under the 
                contract for each of these two calendar months by 
                annualizing the premium rate in effect on the date the 
                contract becomes effective.
            (3) Calculation of the estimated annual premium for the 
        approved contract.--
                    (A) In general.--For purposes of paragraph (1), the 
                term ``estimated annual premium'' means the annualized 
                premium rate likely to be in effect on the date the 
                contract becomes effective.
                    (B) Syndicate agent estimate.--The proposed 
                syndicate agent for the contract shall make a 
                reasonable estimate of the amount in paragraph (1) 
                within five days prior to the date on which the 
                contract is to become effective.
            (4) Calculation of projected annual premium income.--For 
        purposes of making any determination under paragraph (1)(A) 
        with respect to a direct guarantor, the term ``projected annual 
        premium income'' means the total projected annual premiums from 
        all cross-guarantee and stop-loss contracts under which such 
        guarantor is a direct guarantor, other than the contract for 
        which such determination is being made, as of--
                    (A) in the case of contract which would become 
                effective on or before the 15th day of any calendar 
                month, the second calendar month preceding such 
                calendar month; and
                    (B) in the case of a contract which would become 
                effective after the 15th day of any calendar month, the 
                calendar month preceding such calendar month.
            (5) Adjustment of projected annual premium capacity for 
        changed circumstances.--The Corporation may, by rulemaking, set 
        the projected annual premium capacity below 3 percent if the 
        Corporation determines that the existing percentage is too high 
        to ensure an adequate capital base for the cross-guarantee 
        system.
    (e) Liability of Acquirer of Any Direct Guarantor.--Any person 
which acquires (as defined in section 13(f)(8)(B) of the Federal 
Deposit Insurance Act) any direct guarantor shall be obligated for all 
of the cross-guarantee obligations of such guarantor under any cross-
guarantee or stop-loss contract to which such guarantor is a direct 
guarantor.

SEC. 117. PROVISIONS RELATING TO CROSS-GUARANTEE AND STOP-LOSS 
              SYNDICATES.

    (a) Powers and Duties of Syndicate Agents.--
            (1) Syndicate agent is agent of direct guarantors.--
                    (A) In general.--The syndicate agent under any 
                cross-guarantee or stop-loss contract shall act as an 
                agent of the direct guarantors under such contract.
                    (B) Exceptions.--Notwithstanding subparagraph (A), 
                the syndicate agent also shall have--
                            (i) a duty to protect the confidentiality 
                        of any aspect of a guaranteed party's affairs 
                        which the contract specifies shall be 
                        protected; and
                            (ii) duties to the Corporation as specified 
                        in this title.
            (2) Powers of syndicate agent.--No person under a cross-
        guarantee or stop-loss contract other than the syndicate agent 
        shall have the following powers:
                    (A) Monitor performance.--Monitor the performance, 
                or contract with a third party to monitor the 
                performance, of any party guaranteed under such 
                contract.
                    (B) Collect premiums.--Collect the premiums due to 
                the direct guarantors under such contract.
            (3) Syndicate agent reports submitted to the central 
        electronic repository.--The syndicate agent under any cross-
        guarantee or stop-loss contract shall submit in electronic form 
        to the central electronic repository by the 15th of each 
        calendar month a report--
                    (A) of the equity capital or the net worth, as the 
                case may be, of the guaranteed financial group or 
                nondepository guarantor under the contract as of the 
                end of the prior calendar month; and
                    (B) of the projected annual premium due each direct 
                guarantor, as of the end of the prior calendar month.
            (4) Confirmation of guarantee of specific obligations.--
                    (A) In general.--The syndicate agent under any 
                cross-guarantee contract shall--
                            (i) determine, at the request of any 
                        current or prospective creditor of a guaranteed 
                        company or guaranteed banking office under such 
                        contract, whether, assuming that the company or 
                        office has or will have an obligation to the 
                        creditor, such obligation would be a guaranteed 
                        obligation under the contract; and
                            (ii) promptly notify the current or 
                        prospective creditor of the agent's 
                        determination.
                    (B) Determination binding on syndicate.--Any 
                notification of determination under subparagraph (A) 
                shall be binding on the cross-guarantee syndicate.
                    (C) Fee.--A syndicate agent may charge a current or 
                prospective creditor a fee for making the determination 
                and notifying the creditor under subparagraph (A).
            (5) Agreement governing the relationship between the 
        syndicate and syndicate agent.--
                    (A) In general.--Any agreement between the direct 
                guarantors and the syndicate agent governing the 
                relationship between such parties must be included in 
                the cross-guarantee or stop-loss contract.
                    (B) Limits on side contracts.--No direct guarantor 
                or group of direct guarantors under a cross-guarantee 
                or stop-loss contract may enter into any other contract 
                or binding agreement pertaining to the contract with 
                the syndicate agent under such cross-guarantee or stop-
                loss contract.
            (6) Authorization of information sharing among syndicate 
        agents.--Notwithstanding Federal or State law, the Corporation 
        may prescribe rules allowing syndicate agents to share 
        information if the Corporation finds that the benefits of such 
        information sharing outweigh the anticompetitive risks of such 
        sharing.
    (b) Exemption From Securities Laws.--Notwithstanding Federal or 
State law, interests in any cross-guarantee or stop-loss syndicate are 
not securities for any purpose.
    (c) Taxation of Syndicates.--
            (1) Treated as partnership.--Any cross-guarantee or stop-
        loss syndicate shall be treated as a partnership for purposes 
        of the Internal Revenue Code of 1986.
            (2) Consolidated returns by syndicate agent.--A syndicate 
        agent shall file an annual information return with the Internal 
        Revenue Service with respect to all syndicates for which such 
        agent is an agent, and all distributions with respect to such 
        syndicates, on a consolidated basis.
            (3) Tax exempt status.--Any syndicate under any cross-
        guarantee or stop-loss contract, any income or gross receipts 
        (including premiums), and any activity of the syndicate shall 
        be exempt from all taxation imposed by any State, county, 
        municipality, or local taxing authority.
    (d) Replacement of Syndicate Agents.--
            (1) In general.--The cross-guarantee or stop-loss syndicate 
        under any cross-guarantee or stop-loss contract may at any time 
        and without cause replace the syndicate agent under such 
        contract, subject to the guaranteed financial group or 
        nondepository guarantor's approval of the new syndicate agent, 
        by amending the contract and obtaining the Corporation's 
        approval of the new syndicate agent under section 123.
            (2) No effect on contract.--The replacement of a syndicate 
        agent by the direct guarantors in accordance with paragraph (1) 
        shall not affect the continuing existence or enforceability of 
        the contract.
            (3) Withdrawal of syndicate agent.--
                    (A) Same-day submission of amended contract with 
                new syndicate agent.--If a syndicate agent should 
                resign or otherwise cease providing required services 
                under a cross-guarantee or stop-loss contract, whether 
                wrongfully, as allowed under such contract, or for any 
                other reason, the cross-guarantee or stop-loss 
                syndicate shall by the end of the business day on which 
                the resignation or cessation of services is effective 
                submit an amendment to the contract, with a successor 
                syndicate agent named in the amendment, to the 
                Corporation for approval.
                    (B) Interim cgrc appointment.--The Corporation may 
                appoint a successor syndicate agent to serve until a 
                cross-guarantee or stop-loss syndicate has complied 
                with the requirements under subparagraph (A).
    (e) Causes of Action Against a Syndicate or Syndicate Agent.--
            (1) Causes of action against a syndicate.--
                    (A) In general.--A cross-guarantee or stop-loss 
                syndicate shall be sued as an entity, and no direct 
                guarantor may be sued in such guarantor's individual 
                capacity, for--
                            (i) breach of the cross-guarantee or stop-
                        loss contract;
                            (ii) liability for the acts or omissions of 
                        the syndicate agent under the contract; or
                            (iii) wrongs arising out of any action 
                        authorized by the syndicate, including actions 
                        undertaken pursuant to sections 113(n) and 
                        117(h)(2).
                    (B) Several liability.--Section 113(e) shall apply 
                in determining a direct guarantor's liability under any 
                cause of action under subparagraph (A).
                    (C) Service of process.--For the purposes of any 
                action under subparagraph (A)--
                            (i) the syndicate agent shall be the agent 
                        for the cross-guarantee or stop-loss syndicate 
                        for service of process; and
                            (ii) service of process upon a syndicate 
                        agent shall serve as the exclusive manner of 
                        service of process upon the syndicate under the 
                        contract.
            (2) Conduct for which syndicates have no legal duty to 
        third parties.--A cross-guarantee or stop-loss syndicate shall 
        have no legal duty under Federal or State law to any person 
        with respect to--
                    (A) the level or accuracy of the premium rate under 
                a cross-guarantee or stop-loss contract;
                    (B) the adequacy of a syndicate agent's monitoring 
                of a guaranteed party; or
                    (C) the decision whether to enforce or waive a 
                right or privilege of the syndicate under the cross-
                guarantee or stop-loss contract.
            (3) Conduct for which syndicate agents have no legal duty 
        to third parties.--A syndicate agent shall have no legal duty 
        under Federal or State law to any person other than the parties 
        to a cross-guarantee or stop-loss contract with respect to the 
        adequacy of the agent's performance of such agent's contractual 
        obligations under the contract.
            (4) Liability for acts of a guaranteed party.--Subject to 
        sections 114(a) and 115(a), a cross-guarantee syndicate, stop-
        loss syndicate, or syndicate agent shall not be liable for any 
        alleged tortious conduct, breach of contract, or violation of 
        statutory obligation by a guaranteed party under the contract.
            (5) Bar on punitive damages.--No punitive damages shall be 
        allowed in any action against a cross-guarantee syndicate, 
        stop-loss syndicate, or syndicate agent in the syndicate's or 
        agent's capacity as such under a cross-guarantee or stop-loss 
        contract.
    (f) Causes of Action by a Syndicate, Syndicate Agent, or Direct 
Guarantor.--
            (1) Direct guarantors cannot sue in their individual 
        capacity in actions that are derivative of actions of the 
        syndicate.--No direct guarantor may sue, in such guarantor's 
        individual capacity, any person under Federal or State law for 
        injuries arising out of any cross-guarantee or stop-loss 
        contract unless--
                    (A) such guarantor's injury is a special injury 
                distinct from injuries suffered by other direct 
                guarantors which are members of the cross-guarantee or 
                stop-loss syndicate; or
                    (B) such guarantor's claim is against the cross-
                guarantee or stop-loss syndicate itself.
            (2) Bar on certain actions against third parties.--Except 
        for an action for breach of contract, a cross-guarantee 
        syndicate, stop-loss syndicate, or syndicate agent shall not 
        have a cause of action under Federal or State law against any 
        person for any loss arising out of any cross-guarantee or stop-
        loss contract unless the syndicate or syndicate agent (as the 
        case may be), in addition to proving the required elements of a 
        cause of action under Federal or State law, proves by a 
        preponderance of the evidence that--
                    (A) the party made a false representation to the 
                syndicate, guarantor, or syndicate agent;
                    (B) the party had actual knowledge that the 
                representation was false; and
                    (C) the false representation was material;
    (g) Cause of Action By the Syndicate Against the Syndicate Agent.--
In any action by the cross-guarantee or stop-loss syndicate against the 
syndicate agent to recover damages due to a loss (as the term ``loss'' 
is defined in section 113(a)(1)(D)), the syndicate must, in addition to 
proving the required elements of a cause of action under Federal or 
State law, prove by a preponderance of the evidence--
            (1) that--
                    (A) the syndicate agent made a false representation 
                to the syndicate;
                    (B) the syndicate agent had actual knowledge that 
                the representation was false; and
                    (C) the false representation was material; or
            (2) that the syndicate agent consciously disregarded 
        substantial and unjustifiable risks being taken by the 
        guaranteed party under the contract.
    (h) Relationship Among Syndicate Members.--
            (1) Syndicate members not agents for each other.--Subject 
        to paragraph (2), no direct guarantor in a cross-guarantee or 
        stop-loss syndicate shall be liable under agency law for the 
        actions of any other direct guarantor in the syndicate.
            (2) Syndicate may vote to appoint a member as agent for the 
        syndicate.--A cross-guarantee or stop-loss syndicate may, 
        consistent with section 113(n), vote to appoint one or more 
        direct guarantors under the contract as an agent for the 
        syndicate.
    (i) Registration of Syndicates.--
            (1) In general.--The Corporation shall prescribe rules 
        providing for the registering of cross-guarantee and stop-loss 
        syndicates for the purpose solely of allowing persons a 
        reference by which to identify individual syndicates.
            (2) Registration upon submission of the contract for 
        approval.--The rules under paragraph (1) shall provide for the 
        automatic registration of a cross-guarantee or stop-loss 
        syndicate upon submission for approval of a cross-guarantee or 
        stop-loss contract under section 123.
            (3) Distinguishing among syndicates.--The rules under 
        paragraph (1) shall reference a cross-guarantee or a stop-loss 
        syndicate as a unique syndicate with permanent identification.

SEC. 118. ASSUMPTION OF CONTROL OF A GUARANTEED COMPANY BY A CROSS-
              GUARANTEE SYNDICATE.

    (a) Right of Cross-Guarantee Syndicate to Assume Control.--A cross-
guarantee syndicate under any cross-guarantee contract shall have the 
right to assume control of a guaranteed company under the contract 
under the following circumstances:
            (1) Cancellation.--Immediately after a cancellation of the 
        contract by the syndicate or the guaranteed financial group has 
        become effective unless a successor cross-guarantee contract 
        has taken effect.
            (2) Expiration.--Immediately after the expiration of the 
        cross-guarantee contract unless a successor cross-guarantee 
        contract has taken effect.
    (b) Right of Guaranteed Party To Seek To Stay Assumption of 
Control.--
            (1) In general.--A guaranteed company may file an action 
        requesting a stay of any assumption of control by a cross-
        guarantee syndicate.
            (2) Time limit for objecting to assumption of control.--
                    (A) In general.--Any action under paragraph (1) 
                shall be filed either within 30 days after the notice 
                of cancellation under section 113(h)(1) is given or 
                more than 60 days prior to the expiration of the 
                contract, whichever the case may be.
                    (B) Exception if successor contract is obtained.--
                Subparagraph (A) shall not apply to a guaranteed 
                company which has, subsequent to the notice of 
                cancellation or the date 60 days prior to expiration, 
                become guaranteed under a successor cross-guarantee 
                contract.
            (3) Expedited review.--The United States district court 
        with jurisdiction over the cross-guarantee contract shall 
        provide expedited review of any action under paragraph (1).
            (4) Basis of determination.--In any action under paragraph 
        (1), the court shall not stay the assumption of control by a 
        cross-guarantee syndicate if the conditions for assuming 
        control under subsection (a) have been met.
    (c) Rights of Cross-Guarantee Syndicate To Enjoin Violations of the 
Contract Until Assuming Control.--
            (1) Injunctive remedies.--Upon giving notice of 
        cancellation of the cross-guarantee contract under section 
        113(h)(1) or the expiration of the contract, the cross-
        guarantee syndicate shall be granted injunctive relief to 
        enforce any restrictions imposed under the contract.
            (2) Appointment of a conservator.--
                    (A) In general.--Upon giving notice of cancellation 
                of the cross-guarantee contract under section 113(h)(1) 
                or the expiration of the contract, the cross-guarantee 
                syndicate may seek the appointment of a conservator to 
                serve until the syndicate can assume control under 
                subsection (a) and a court may appoint such a 
                conservator, but the court may appoint a conservator 
                only if the remedies under paragraph (1) are not 
                adequate to protect the interests of the cross-
                guarantee syndicate.
                    (B) Court shall appoint a conservator from a list 
                submitted by cgrc.--The court shall appoint a 
                conservator under subparagraph (A) only from a list 
                supplied by the Corporation to the court of 5 
                disinterested persons who are qualified and willing to 
                serve as the conservator in the case, and no such 
                person may be a regulatory agency or an employee of a 
                regulatory agency.
                    (C) Powers of conservator.--
                            (i) In general.--The conservator's duties 
                        under this paragraph shall be limited to 
                        monitoring compliance by the guaranteed company 
                        with the court's orders and the cross-guarantee 
                        contract and making reports to the court, as 
                        necessary, to ensure such compliance.
                            (ii) No power to operate company.--The 
                        conservator shall have no power to operate the 
                        guaranteed company.
                    (D) Guaranteed company can still obtain a successor 
                contract.--
                            (i) In general.--The appointment of a 
                        conservator under this paragraph shall not 
                        prevent a guaranteed company from obtaining a 
                        successor cross-guarantee contract.
                            (ii) Discharge of conservator.--If a 
                        guaranteed company obtains a successor cross-
                        guarantee contract, the conservator appointed 
                        under this contract shall be discharged when 
                        the successor contract has become effective 
                        according to the successor contract's terms.
            (3) Expedited relief.--The United States district court 
        with jurisdiction over the cross-guarantee contract shall 
        provide the relief under paragraphs (1) and (2) on an expedited 
        basis.
    (d) Powers and Duties of a Cross-Guarantee Syndicate After 
Assumption of Control.--
            (1) General powers.--
                    (A) Operate the company.--A cross-guarantee 
                syndicate which assumes control of a guaranteed company 
                under subsection (a) shall have and may exercise all 
                the powers of the members or shareholders, the 
                directors, and the officers of the company and shall be 
                entitled to--
                            (i) conduct all business of the guaranteed 
                        company;
                            (ii) take over the books, records, and 
                        assets of the guaranteed company;
                            (iii) collect all obligations and money due 
                        the company;
                            (iv) perform in the name of the company all 
                        functions of the company consistent with the 
                        appointment of the syndicate as the successor 
                        to the managers and directors of the company 
                        and the duties of the syndicate with respect to 
                        the company; and
                            (v) preserve and conserve the assets and 
                        property of such company.
                    (B) Disposition of company.--The cross-guarantee 
                syndicate which assumes control of a guaranteed company 
                under subsection (a) may--
                            (i) merge or consolidate the guaranteed 
                        company with another guaranteed company;
                            (ii) sell or otherwise dispose of the 
                        company; or
                            (iii) place the company in liquidation and 
                        proceed to realize upon the assets of the 
                        company.
            (2) Duties.--
                    (A) Payment of obligations.--
                            (i) In general.--If a cross-guarantee 
                        syndicate assumes control of a guaranteed 
                        company, the guaranteed company remains liable 
                        for all of the company's obligations without 
                        regard to such assumption of control.
                            (ii) Assumption of control does not make 
                        syndicate liable for unguaranteed 
                        obligations.--Nothing in this subparagraph 
                        shall be construed to the effect that the act 
                        of assuming control of a guaranteed company 
                        makes members of the cross-guarantee syndicate 
liable for the obligations of the guaranteed company which are not 
guaranteed obligations.
                    (B) Distribution of assets.--In any case in which 
                funds remain from the liquidation, sale, or other 
                disposition of the assets of any guaranteed company 
                after all depositors, creditors, other claimants, and 
                administrative expenses of the syndicate have been paid 
                or otherwise resolved, the syndicate shall promptly 
                distribute such funds to the company's shareholders or 
                members, as the case may be.
                    (C) Fiduciary duty.--A cross-guarantee syndicate 
                which assumes control of a guaranteed company in 
                accordance with subsection (a) shall succeed to the 
                same fiduciary responsibility as the directors of such 
                company had under applicable law.
                    (D) Notice to cgrc.--If a cross-guarantee syndicate 
                assumes control of a guaranteed company under 
                subsection (a), the syndicate shall on the same day 
                notify the Corporation that it has assumed control.
            (3) Special fdic powers do not apply.--Nothing in this 
        title shall be construed to give a cross-guarantee syndicate, 
        upon assuming control of a guaranteed company under this 
        section, the power to limit or expand the rights and 
        obligations of the guaranteed company, by analogous reference 
        to any statutory law or common law which grants, or may be 
        construed as granting, special rights to the Federal Deposit 
        Insurance Corporation to repudiate contracts of an insured 
        depository institution for which the Federal Deposit Insurance 
        Corporation has been appointed a conservator or receiver.
    (e) No Authority for CGRC, Any Federal Banking Agency, or State 
Bank Supervisor To Stay Assumption of Control.--Neither the Corporation 
nor any Federal banking agency, State bank supervisor, or any other 
Federal or State agency may take any action to prevent the assumption 
of control of a guaranteed company under subsection (a).
    (f) Assumption of Control Not an Event of Default or Grounds for 
Acceleration of Obligations.--The assumption of control of a guaranteed 
company under subsection (a) shall not be an event of default by the 
guaranteed company or grounds for acceleration of any obligation, 
whether or not it is a guaranteed obligation, under any agreement to 
which the guaranteed company is a party.
    (g) Second-Tier Guarantors Cannot Dispute Losses.--A direct 
guarantor of any direct guarantor which is a member of a cross-
guarantee syndicate which assumes control of a guaranteed party under 
subsection (a) may not bring a cause of action against the cross-
guarantee syndicate based on damages arising out of the syndicate's 
decision to assume control or failure to minimize losses under the 
cross-guarantee contract.

SEC. 119. JUDICIAL REVIEW OF CONTRACTS AND RELATED ACTIONS.

    (a) Jurisdiction of Federal Courts.--
            (1) In general.--For purposes of section 1331 of title 28, 
        United States Code, any action arising under any cross-
        guarantee or stop-loss contract shall be deemed to arise under 
        Federal law.
            (2) Removal.--Any action arising under any cross-guarantee 
        or stop-loss contract which is brought in a State court may be 
        removed by the defendant or the defendants to a district court 
        of the United States.
            (3) Designation of court in contract.--Each cross-guarantee 
        and stop-loss contract shall designate the district court of 
        the United States which shall have original jurisdiction over 
        any action described under section 117(e)(1)(A)(i).
    (b) Third Party Beneficiary Actions.--
            (1) Restrictions on third party beneficiary actions.--
        Notwithstanding any State law, no creditor of any guaranteed 
        party under any cross-guarantee contract may bring an action 
        against the cross-guarantee syndicate under such contract for 
        failure to perform any cross-guarantee obligation under the 
        contract without first having obtained a judgment against the 
        guaranteed party for failure to perform such obligation, unless 
        the direct guarantors have assumed control of the guaranteed 
        party under section 118(a).
            (2) Intervention by syndicate.--
                    (A) In general.--A cross-guarantee or stop-loss 
                syndicate under any cross-guarantee or stop-loss 
                contract may intervene in any action brought by one or 
                more creditors against a guaranteed party under the 
                contract if any judgment against the guaranteed party 
                in such action could affect the potential liabilities 
                of the direct guarantors under the contract.
                    (B) Right of intervention belongs to the syndicate 
                as a whole.--Any intervention under subparagraph (A) 
                shall be exercised by a cross-guarantee or stop-loss 
                syndicate as a whole and no individual member of a 
                cross-guarantee or stop-loss syndicate shall have a 
                right to intervene in any action described in 
                subparagraph (A).
    (c) Applicable State Law.--
            (1) In general.--Unless otherwise indicated in this title, 
        State law shall apply under this title to any cross-guarantee 
        or stop-loss contract.
            (2) Parties' choice of state contract law.--Each cross-
        guarantee and stop-loss contract shall designate the State law 
        that shall be applicable under paragraph (1).

               Subtitle C--Powers and Duties of the CGRC

                   CHAPTER 1--CROSS-GUARANTEE PROCESS

SEC. 121. THE CROSS-GUARANTEE REGULATION CORPORATION.

    (a) Creation.--
            (1) In general.--There is hereby established a body 
        corporate the ``Cross Guarantee Regulation Corporation'' which 
        shall have succession until dissolved by act of Congress.
            (2) Corporation not an agency.--The Corporation shall not 
        be an agency or establishment of the United States Government.
            (3) Headquartered in the district of columbia.--The 
        Corporation shall maintain its principal office in the District 
        of Columbia.
    (b) Powers.--In addition to any powers granted to the Corporation 
elsewhere in this title, the Corporation shall have, consistent with 
this title, the power--
            (1) to sue and be sued, complain and defend, in its 
        corporate name and through its own counsel, in any State, 
        Federal, or other court;
            (2) to adopt, alter, and use a corporate seal, which shall 
        be judicially noticed;
            (3) to adopt, amend, and repeal, by its Board of Directors, 
        such bylaws as may be necessary or appropriate to carry out the 
        purposes of this title, including bylaws relating to--
                    (A) the conduct of its business; and
                    (B) the indemnity of its directors, officers, and 
                employees for liabilities and expenses actually and 
                reasonably incurred by any such person in connection 
                with the defense or settlement of an action or suit if 
                such person acted in good faith and in a manner 
                reasonably believed to be consistent with the purposes 
                of this chapter.
            (4) to adopt, amend, and repeal, by its Board of Directors, 
        such rules as authorized under subsection (e)(2) of this 
        section;
            (5) to conduct business (including the carrying on and 
        maintenance of offices) and to exercise all other rights and 
        powers granted to it by this chapter in any State or other 
        jurisdiction without regard to any qualification, licensing, or 
        other statute in such State or other jurisdiction;
            (6) to lease, purchase, accept gifts or donations of or 
        otherwise acquire, to own, hold, improve, use, or otherwise 
        deal in or with, and to sell, convey, mortgage, pledge, lease, 
        exchange or otherwise dispose of, any property, real, personal 
        or mixed, or any interest therein, wherever situated;
            (7) subject to subsection (c), to hire such officers, 
        attorneys, employees, and agents as may be required, to 
        determine their qualifications, to define their duties, to fix 
        their salaries, require bonds for them and fix the penalty 
        thereof; and
            (8) to enter into contracts, to execute instruments, to 
        incur liabilities, and to do any and all other acts and things 
        as may be necessary or incidental to the conduct of its 
        business and the exercise of all other rights and powers 
        granted to the Corporation under this title.
    (c) Board of Directors.--
            (1) Functions.--The Corporation shall have a Board of 
        Directors which, subject to the provisions of this title, shall 
        determine the policies which shall govern the operations of the 
        Corporation.
            (2) Number and appointment.--The Board of Directors shall 
        consist of seven persons as follows:
                    (A) One director shall be appointed by the 
                Secretary of the Treasury from among the officers of 
                the Department of Treasury that have been confirmed 
                with the advice and consent of the Senate, and shall be 
                removable by the Secretary without cause at any time.
                    (B) Six directors shall be appointed by the 
                President, by and with the advice and consent of the 
                Senate, as follows--
                            (i) three such directors shall be selected 
                        from among senior officers of companies that 
                        are or are likely to be guaranteed depository 
                        institutions, provided that the directors are 
                        not from the same geographical area and 
                        represent different aspects of the industry;
                            (ii) one such director shall be selected 
                        from among senior officers of companies that 
                        are or are likely to be syndicate agents; and
                            (iii) two such directors shall be selected 
                        from the general public from among persons who 
                        are not either regulatory officials nor 
                        associated with a guaranteed depository 
                        institution, syndicate agent, or nondepository 
                        guarantor and have not been such an official or 
                        had any such association for the five years 
                        preceding appointment.
            (3) Chairman and vice chairman.--The President shall 
        designate a Chairman and Vice Chairman from among those 
        directors appointed under paragraph (2)(B)(iii) of this 
        subsection.
            (4) Terms.--
                    (A) Four-year terms.--Except as provided under 
                subparagraphs (B) and (C), each director shall be 
                appointed for a term of four years.
                    (B) Transition rules.--
                            (i) Staggered terms.--Of the directors 
                        first appointed under paragraph (2)(B)--
                                    (I) one shall hold office for a 
                                term expiring on December 31 of the 
                                first full calendar year after passage 
                                of this Act;
                                    (II) two shall hold office for a 
                                term expiring on December 31 of the 
                                second full calendar year after passage 
                                of this Act;
                                    (III) one shall hold office for a 
                                term expiring on December 31 of the 
                                third full calendar year after passage 
                                of this Act; and
                                    (IV) two shall hold office for a 
                                term expiring on December 31 of the 
                                fourth full calendar year after passage 
                                of this Act.
                            (ii) Timing of particular director's 
                        term.--
                                    (I) Industry appointees' terms will 
                                end in different years.--One of the 
                                directors appointed under each of the 
                                clauses (i)(I), (II), (III), (IV) shall 
                                consist of the four directors appointed 
                                under paragraphs (2)(B)(i) and (ii).
                                    (II) Appointees from the general 
                                public.--One director appointed under 
                                both clause (i)(II) and (IV) shall 
                                consist of one of the two directors 
                                appointed under paragraph (2)(B)(iii).
                            (iii) Treasury director must be appointed 
                        soon after enactment.--The Secretary of the 
                        Treasury shall appoint the director designated 
                        under paragraph (2)(A) within 30 days after 
                        enactment of this Act.
                    (C) Vacancies.--
                            (i) Appointment in same manner.--A vacancy 
                        on the Board of Directors shall be filled in 
                        the same manner as the original appointment was 
                        made.
                            (ii) Appointment only for the remainder of 
                        the term.--Any director appointed under clause 
                        (i) shall be appointed only for the remainder 
                        of the term of his predecessor.
                    (D) Remaining a director until a successor has 
                taken office.--A director may serve after the 
                expiration of his term until his successor has taken 
                office.
            (5) Compensation.--
                    (A) Chairman and vice chairman.--The compensation 
                of the Chairman and Vice Chairman shall be as provided 
                in the bylaws of the Corporation.
                    (B) Other directors.--The remaining five directors 
                shall serve without compensation except that they are 
                entitled to receive reimbursement for expenses incurred 
                in connection with official business of the 
                Corporation.
            (6) Officers and employees as members of the board of 
        directors.--No officer, attorney, employee, or agent of the 
        Corporation shall be a member of the Board of Directors.
            (7) board of directors to determine officers.--The officers 
        of the Corporation shall be employed at the will of the Board 
        of Directors.
            (8) Definition of officer.--For purposes of this 
        subsection, the term ``officer'' includes any chief executive 
        officer, president, senior executive, or other official with 
        managerial or executive authority within the Corporation.
    (d) Meetings of the board of directors.--
            (1) Timing of meetings.--The Board of Directors shall meet 
        at the call of its Chairman, or as otherwise provided by the 
        bylaws of the Corporation, except that the director appointed 
        under subsection (c)(2)(A) may call a meeting until at least 
        three other directors have taken office.
            (2) Quorum transition rule.--The bylaws shall determine how 
        many members constitute a quorum when the Board of Directors 
        meet, except that the director appointed under subsection 
        (c)(2)(A) shall alone constitute a quorum until at least three 
        other directors have taken office.
    (e) Bylaws and Rulemaking.--
            (1) Bylaws.--
                    (A) Procedure.--The Board of Directors shall file 
                with the Secretary of the Treasury a copy of the 
                proposed initial bylaws of the Corporation and any 
                proposed bylaw changes accompanied by a concise general 
                statement of the basis and purpose for such changes.
                    (B) Changes become effective unless the treasury 
                department objects.--Any bylaws submissions under 
                subparagraph (A) shall become effective thirty days 
                after the filing of such changes with the Secretary of 
                the Treasury, unless--
                            (i) the Secretary of the Treasury, by 
                        notice to the Corporation setting forth the 
                        reasons therefor, disapproves of such proposed 
                        bylaw changes as being contrary to the purposes 
                        of this title; or
                            (ii) the Secretary of the Treasury decides, 
                        at its own discretion, that public comment 
                        shall be obtained, in which case it may, after 
                        notifying the Corporation in writing of such 
                        finding, require that the procedures set forth 
                        in paragraph (2) be followed with respect to 
                        such a bylaw change.
            (2) Rulemaking.--
                    (A) Rulemaking authority.--The Corporation shall 
                have the power to issue a rule only if--
                            (i) the power to issue the rule is 
                        explicitly provided for in this title; or
                            (ii) the Corporation demonstrates that--
                                    (I) the rule implements statutory 
                                language in this title; and
                                    (II) improves the efficiency of the 
                                cross-guarantee system.
                    (B) Substantive basis for rules.--Any proposed rule 
                or proposed rule change shall be approved only if there 
                is substantial evidence supporting the findings on 
                which the proposed rule is based.
                    (C) Rulemaking procedures.--
                            (i) In general.--The Corporation shall use 
                        the informal rulemaking procedures under the 
                        Administrative Procedures Act (5 U.S.C. 
                        Sec. 553) in prescribing rules under this 
                        paragraph.
                            (ii) Right to a hearing.--In addition to 
                        the procedures under clause (i), any person may 
                        during the comment period request a hearing and 
                        such hearing, if requested, shall take place 
                        within 30 days after the end of the comment 
                        period.
                            (iii) Submitting rules to treasury.--After 
                        having completed the procedures under clauses 
                        (i) and (ii), the Corporation shall file with 
                        the Secretary of the Treasury a copy of the 
                        proposed rules.
                            (iv) Treasury authority to reject rules.--
                        Any proposed rules or rule changes submitted 
                        under clause (iii) shall become effective 
                        thirty days after the filing of such proposed 
                        rules or rule changes with the Secretary of the 
                        Treasury, unless the Secretary of the Treasury, 
                        by notice to the Corporation setting forth the 
                        reasons therefor, disapproves of such proposed 
                        rules or rule changes as being contrary to the 
                        purposes of this title.
                    (D) Judicial review.--
                            (i) Standing.--Any person suffering a legal 
                        wrong, or adversely affected or aggrieved 
                        within the meaning of this title, by the rules 
                        issued under this paragraph is entitled to 
                        judicial review thereof.
                            (ii) Jurisdiction.--The United States Court 
                        of Appeals for the District of Columbia shall 
                        have exclusive original jurisdiction over any 
                        action under clause (i).
                            (iii) Finality.--A rule must be final to be 
                        reviewable under this subparagraph.
                            (iv) Timing.--A petition for review under 
                        this subparagraph must be filed within 90 days 
                        after the date on which the rule became final.
                    (E) Initial deadline.--For any rule covered by 
                subparagraph (A)(i), the Corporation shall issue a 
                final rule within one year after passage of this Act.
    (f) Funding.--
            (1) Initial borrowing.--
                    (A) BIF financing.--The Corporation shall have the 
                power to borrow up to $20 million from the Bank 
                Insurance Fund.
                    (B) Use of such financing.--The Corporation shall 
                use any amount borrowed under subparagraph (A) to 
                establish the central electronic repository, pay 
                initial salaries and other operating expenses, buy 
                equipment, develop computer software, and otherwise 
                begin operations.
                    (C) Repayment.--The Corporation shall repay any 
                borrowing under subparagraph (A) within 5 years after 
                the cross-guarantee activation date from income 
                obtained under paragraph (2).
                    (D) Interest on loan.--
                            (i) Timing of payments.--No principal or 
                        interest payments on the loan described in 
                        subparagraph (A) shall be due prior to one year 
                        after the cross-guarantee activation date.
                            (ii) Interest rate.--The interest rate on 
                        the borrowing under this paragraph shall be 
                        equal to .25 percent plus the average annual 
                        percentage yield on 3-month bills issued by the 
                        Secretary of the Treasury under section 3104(a) 
                        of title 31, United States Code.
            (2) Financing from operations.--
                    (A) Self-supporting.--The Corporation shall repay 
                the loan under paragraph (1) and pay for its ongoing 
                operating expenses by assessing fees as authorized 
                under subparagraph (B) and collecting penalties as 
                authorized under this title and shall not, subject to 
                paragraph (1), receive any financing or operating 
                subsidies from the United States Treasury.
                    (B) Fees.--The Corporation may assess a reasonable 
                fee upon any party which--
                            (i) submits a cross-guarantee, stop-loss, 
                        or group cross-guarantee contract, or amendment 
                        thereto, for approval;
                            (ii) requests use of any service provided 
                        by the central electronic repository; or
                            (iii) requests a certification under 
                        section 124(b).
    (g) Miscellaneous Provisions.--
            (1) Inspection of reports.--
                    (A) In general.--Any notice, report, or other 
                document filed with the Corporation pursuant to this 
                title, other than financial statements filed by 
                nondepository guarantors pursuant to section 
                117(a)(3)(A), shall be available for public inspection 
                unless the Corporation or the Secretary of Treasury 
                determines that disclosure thereof is not in the public 
                interest.
                    (B) Congressional access.--Nothing under 
                subparagraph (A) shall act to deny documents or 
                information to the Congress of the United States or to 
                the committees of either House having jurisdiction over 
                depository institutions and related matters under the 
                rules of each body.
                    (C) Treasury access to the corporation's 
                documents.--The Corporation shall provide the Secretary 
                of Treasury with any document or information which the 
                Secretary in his or her discretion requests.
            (2) Suits against the corporation and its officers.--
                    (A) Waiver of sovereign immunity.--The Corporation 
                waives sovereign immunity to the same extent provided 
                for under the Administrative Procedures Act (5 U.S.C. 
                Sec. 702).
                    (B) Suits for money damages.--Neither the 
                Corporation nor any of the Corporation's directors, 
                officers, attorneys, agents, or employees shall have 
                any liability to any person for any action taken or not 
                taken under or in connection with any matter 
                contemplated by this title, if the act was taken or not 
                taken in good faith or there were reasonable grounds 
                for taking or not taking the action.
            (3) Exemption from taxation.--The Corporation, its 
        property, its franchise, capital, reserves, surplus, and its 
        income, shall be exempt from all taxation now or hereafter 
        imposed by the United States or by any State or local taxing 
        authority, except that any real property or tangible personal 
        property (other than cash and securities) of the Corporation 
        shall be subject to State and local taxation to the same extent 
        according to its value as other real and tangible personal 
        property is taxed.
            (4) Fiscal year.--The fiscal year of the Corporation shall 
        be the calendar year.

SEC. 122. REGULATION OF THE CROSS-GUARANTEE PROCESS.

    (a) Cross-Guarantee Regulation Corporation Enforcement Authority.--
            (1) In general.--Subject to section 126, the Corporation 
        shall have exclusive authority to enforce compliance with 
        provisions of this title.
            (2) Enforcement.--The Corporation shall have the powers 
        provided in subsections (b), (c), (d), (h), (l), and (n) of 
        section 8 of the Federal Deposit Insurance Act and paragraph 
        (1) and each subparagraph, other than subparagraphs (B) and 
        (C), of paragraph (2) of subsection (i) of such section in 
        enforcing this title with respect to any syndicate agent, 
        guaranteed party, or direct guarantor, but only with respect to 
        any violation of any requirements under this title.
    (b) Limitation on State Jurisdiction.--
            (1) In general.--Notwithstanding any provision of state 
        law, no state may exercise authority over any party to any 
        cross-guarantee or stop-loss contract with respect to--
                    (A) whether such party may be a party to a cross-
                guarantee or stop-loss contract; and
                    (B) the rights, duties, privileges, or obligations 
                of such party under the contract or pursuant to this 
                title.
            (2) Rule of construction.--Paragraph (1) shall not be 
        construed as affecting the authority of any state to determine 
        the powers and regulate the activities of state depository 
        institutions.

SEC. 123. APPROVAL PROCESS FOR CROSS-GUARANTEE, STOP-LOSS, AND GROUP 
              CROSS-GUARANTEE CONTRACTS.

    (a) Expedited Approval of Contracts and Contract Amendments.--
            (1) Notice and review requirement.--Except as provided in 
        paragraph (3), no cross-guarantee, stop-loss, or group cross-
        guarantee contract, and no amendment to any such contract, 
        shall be deemed approved unless----
                    (A) the Corporation has been given 15 business days 
                to review the contract or amendment; and
                    (B) before the end of the 15-day period described 
                in subparagraph (A), the Corporation has not issued an 
                order--
                            (i) disapproving the contract or amendment; 
                        or
                            (ii) extending the period within which the 
                        Corporation may disapprove the contract or 
                        amendment in accordance with paragraph (6).
            (2) Submission of contract or amendment in electronic 
        form.--The Corporation shall prescribe rules requiring that any 
        cross-guarantee, stop-loss, or group cross-guarantee contract, 
        and any amendment to such contract, being submitted for review 
        under this subsection shall be submitted in electronic form to 
        the central electronic repository.
            (3) Notice of approval before end of disapproval period.--A 
        cross-guarantee, stop-loss, or group cross-guarantee contract, 
        and any amendment to any such contract, shall be deemed 
        approved before the expiration of the period described in 
        paragraph (1)(A) (or extended in accordance with paragraph (6)) 
        for disapproving such contract if the Corporation notifies the 
        parties that the Corporation does not intend to disapprove the 
        contract.
            (4) Submission of information and certifications.--
                    (A) In general.--The syndicate agent under any 
                proposed cross-guarantee, stop-loss, or group cross-
                guarantee contract, or any amendment to any such 
                contract, submitted to the Corporation for review under 
                paragraph (1), shall also submit to the Corporation 
                with such proposed contract such information and 
                attestations or certifications as the Corporation may 
                require by rule.
                    (B) Limitation on scope of information required.--
                The rules prescribed by the Corporation under 
                subparagraph (A) may not require the submission of any 
                information other than information directly necessary 
                for the Corporation to determine whether any proposed 
                cross-guarantee, stop-loss, or group cross-guarantee 
                contract, or amendment thereto, submitted to the 
                Corporation for approval is in compliance with the 
                requirements of this title.
            (5) Additional information.--
                    (A) In general.--The Corporation may, by specific 
                request in connection with a particular proposed cross-
                guarantee, stop-loss, or group cross-guarantee 
                contract, or amendment to any contract, submitted to 
                the Corporation, require, on one occasion only, that 
                additional information be submitted with respect to 
                such contract or amendment, except that the Corporation 
                may require only such information as may be relevant 
                to--
                            (i) a determination of the extent to which 
                        the proposed contract is in compliance with the 
                        requirements of this title; and
                            (ii) the Corporation's evaluation of the 
                        contract in accordance with this section.
                    (B) Notice of explanation.--For any request for 
                additional information under subparagraph (A), the 
                Corporation shall provide a detailed explanation of the 
                specific reasons why such additional information is 
                needed.
            (6) Extension of disapproval period.--If, in connection 
        with a particular proposed cross-guarantee, stop-loss, or group 
        cross-guarantee contract, or any amendment to any such 
        contract, which is submitted to the Corporation, the 
        Corporation requests additional information under paragraph 
        (5), the Corporation may by order provide that the Corporation 
        shall have any additional period (not to exceed 5 business days 
        beginning on the date on which the Corporation receives such 
        information) within which to disapprove the proposed contract.
            (7) Revocation of approval.--The Corporation may revoke its 
        approval of a contract under this subsection if a court has 
        enjoined the operation of the contract under subsection 
        (e)(2)(B).
    (b) Limited Grounds for Disapproval of Proposed Contract or 
Amendment.--The Corporation may disapprove any proposed cross-
guarantee, stop-loss or group cross-guarantee contract, or any 
amendment to any such contract, if and only if--
            (1) the contract, including any party under the contract, 
        fails to meet the requirements of this title; or
            (2) the information submitted under subsection (a) was 
        insufficient to determine whether the contract and the parties 
        to the contract are in compliance with this title.
    (c) Notice of Disapproval.--
            (1) In general.--If the Corporation disapproves any cross-
        guarantee, stop-loss, or group cross-guarantee contract, or any 
        amendment thereto, the Corporation shall immediately notify the 
        parties to such contract of the disapproval.
            (2) Statement of reason for disapproval.--The notice under 
        paragraph (1) shall contain a detailed explanation of the 
        specific reasons for the disapproval under this section.
    (d) Conditional Approvals.--
            (1) In general.--The Corporation shall prescribe rules 
        which would allow a cross-guarantee, stop-loss, or group cross-
        guarantee contract to be conditionally approved, in a manner 
        otherwise in accordance with this section, if, at the time such 
        conditional approval is granted, all the information required 
        by the Corporation to make a final determination of whether the 
        contract meets the requirements of this title cannot be known 
        or ascertained.
            (2) Reconfirmation.--The rules prescribed under paragraph 
        (1) shall allow the Corporation, upon receipt of all the 
        information the Corporation needs to determine whether the 
        contract meets the requirements of this title, 3 business days 
        to give the contract a final approval.
            (3) Replacement of guarantors.--The rules prescribed under 
        paragraph (1) shall allow, without restriction, the replacement 
        of a direct guarantor with another direct guarantor during the 
        period between the date of conditional approval and final 
        approval.
    (e) Judicial Review.--
            (1) Contracts disapproved.--
                    (A) In general.--Any party to a contract 
                disapproved under this section may seek judicial review 
                of the disapproval of a contract under this section.
                    (B) Limitation on standing.--Only a party to a 
                contract disapproved under this section may bring an 
                action under this paragraph.
            (2) Contracts approved.--
                    (A) In general.--Any guaranteed party may seek 
                judicial review of the approval of a contract under 
                this section.
                    (B) Injunctive relief if the contract has not yet 
                taken effect.--If a guaranteed party brings an action 
                under subparagraph (A) and the contract approved under 
                this section has not yet become effective according to 
                the contract's terms, a court may enjoin the operation 
                of the contract if it violates any requirement under 
                this title.
                    (C) Limitation on review if the contract has become 
                effective.--
                            (i) In general.--A cross-guarantee or stop-
                        loss contract may be reviewed only with respect 
                        to whether the contract violates section 116(a) 
                        or section 125.
                            (ii) Remedies.--
                                    (I) Section 125 violation.--Any 
                                court which holds that a cross-
                                guarantee or stop-loss contract 
                                violates section 125 shall order the 
                                Corporation to use the remedies 
                                available under section 125 to 
                                eliminate the violation.
                                    (II) Section 116(a) violation.--Any 
                                court which holds that a cross-
                                guarantee or stop-loss contract 
                                violates section 116(a) shall order the 
                                Corporation to adjust each direct 
                                guarantor's liability pursuant to 
                                section 113(e)(2)(B).
                                    (III) Injunctions disallowed.--No 
                                court may enjoin the operation of a 
                                cross-guarantee or stop-loss contract.
            (3) Jurisdiction.--No court other than a district court of 
        the United States shall have original jurisdiction of any 
        action under this subsection.
    (f) Rules To Avoid Fraudulent Signatories to Contracts.--
            (1) In general.--The Corporation shall issue rules which 
        will provide a means, within the time frame of subsection (a), 
        by which, prior to approval of a cross-guarantee, stop-loss, or 
        group cross-guarantee contract, the Corporation can ensure that 
        every party listed as a party to the contract agreed to become 
        a party to the contract.
            (2) Avoiding duplication.--In issuing the rules under 
        paragraph (1), the Corporation may rely on mechanisms 
        established by the parties to cross-guarantee, stop-loss, or 
        group cross-guarantee contracts to ensure that all signatories 
        to the contract agreed to the contract's terms and shall, 
        whenever possible, avoid duplicating such efforts.
            (3) Remedies if party still falsely listed as direct 
        guarantor.--
                    (A) In general.--Any guaranteed party named as a 
                direct guarantor under any cross-guarantee or stop-loss 
                contract even though such party did not agree to become 
                a party to the contract shall have all the rights, 
                privileges, duties, and obligations of a direct 
                guarantor under the contract.
                    (B) Remedies.--Subject to 113(k), any guaranteed 
                party falsely listed as a direct guarantor under 
                subparagraph (A) shall have any recourse provided under 
                Federal or State law against the persons responsible 
                for the false listing.
    (g) Accelerated Review for Secondary Transfers of Syndicate 
Interests.--In the case of a contract amendment which consists solely 
of a transfer of interest under section 113(m), the provisions of this 
section shall apply except--
            (1) the applicable period for approval under subsection 
        (a)(1) shall be 3 business days instead of 15 business days;
            (2) the Corporation may not extend the disapproval period 
        as provided for under subsection (a)(6); and
            (3) the Corporation may disapprove the contract amendment 
        under subsection (b) only if the amended contract would violate 
        section 113(m), section 116(a), or section 125.

SEC. 124. CENTRAL ELECTRONIC REPOSITORY.

    (a) Establishment.--
            (1) CGRC establishes central electronic repository.--Before 
        the end of the 6-month period beginning on the date of the 
        enactment of this Act, the Corporation shall establish and 
        maintain a central electronic repository for cross-guarantee, 
        stop-loss, and group cross-guarantee contracts.
            (2) Maintenance of all past, current, disapproved, and 
        proposed contracts.--The central electronic repository shall 
        maintain files, in electronic form, of all cross-guarantee, 
        stop-loss, and group cross-guarantee contracts, including 
        expired, cancelled, and disapproved contracts, all amendments 
        to any such contract, and all proposed contracts and contract 
        amendments which have been filed with the Corporation, but not 
        yet acted upon.
            (3) Direct access to central electronic repository.--The 
        files in the central electronic repository established under 
        this section shall be directly and immediately accessible by 
        any person under procedures established by the Corporation.
            (4) Central electronic repository version of the contract 
        as a completely integrated agreement.--
                    (A) Legal evidence of the contract.--The provisions 
                of any cross-guarantee, stop-loss, or group cross-
                guarantee contract, including any amendment to any such 
                contract, on file in the central electronic repository 
                shall be--
                            (i) irrebuttable evidence of the contract; 
                        and
                            (ii) superior evidence to all other forms 
                        or versions of the contract.
                    (B) Prohibition on additional terms.--The contract 
                on file in the central electronic repository shall be a 
                complete and exclusive statement of the terms of any 
                cross-guarantee, stop-loss, or group cross-guarantee 
                contract and no evidence of additional terms is 
                admissible to supplement the contract on file in the 
                repository.
    (b) Availability of Certified Copies.--
            (1) In general.--The central electronic repository shall 
        provide upon request a copy of any contract maintained under 
        subsection (a)(2) to any person, any government officer, 
        agency, or department, or any court.
            (2) Certification of copies.--
                    (A) In general.--Each copy of a cross-guarantee or 
                stop-loss contract provided in accordance with 
                paragraph (1) shall contain a certification by the 
                central electronic repository that such copy is true 
                and correct.
                    (B) Prima facie evidence.--A copy of a cross-
                guarantee or stop-loss contract which is certified in 
                accordance with subparagraph (A) shall establish prima 
                facie the contract.
    (c) Maintenance of Data Base of Active Guarantors.--The central 
electronic repository shall maintain in electronic form a data base 
containing the names of the direct guarantors under each cross-
guarantee or stop-loss contract which has not expired or been canceled 
and such other information with regard to such contracts that will 
enable any person to determine whether or not any such contract, 
proposed contract, or proposed amendment to any contract, is in 
compliance with this title and the rules prescribed under this title.
    (d) Standard Contract Language.--The Corporation is authorized to 
maintain in the central electronic repository and update as needed 
standard language for various provisions of cross-guarantee, stop-loss, 
and group cross-guarantee contracts that parties to these contracts 
may, at their sole discretion, incorporate by reference in contracts 
and contract amendments they submit to the Corporation for approval.
    (e) Registry of Individuals With a Questionable Record.--The 
Corporation is authorized to maintain in the central electronic 
repository a list of individuals who have been indicted or convicted of 
a crime related to a financial institution or had a judgment entered 
against them in a civil case related to financial institutions.

SEC. 125. RESTRICTION ON CLOSED LOOPS.

    (a) Prohibition of More Than One Unrelated Closed Loop.--At no time 
shall two or more closed loops exist unless at least one cross-
guarantee or stop-loss contract is a contract in each closed loop that 
exists in the system.
    (b) CGRC Call-Back.--If, at any time, the requirements of 
subsection (a) are violated--
            (1) the Corporation shall on the same business day notify 
        each guaranteed party under each cross-guarantee and stop-loss 
        contract which is part of the closed loop which has the fewest 
        number of contracts that it must obtain a successor cross-
        guarantee or stop-loss contract; and
            (2) each guaranteed party under paragraph (1) shall have 10 
        business days upon notification to submit a successor contract 
        to the Corporation for approval.
    (c) CGRC Filing of a Bankruptcy Petition.--
            (1) Filing of a bankruptcy petition by the cgrc.--
                    (A) Appointment of cgrc as receiver.--
                            (i) Failure to submit a contract.--If a 
                        guaranteed company has not met the deadline to 
                        submit a contract for approval under subsection 
                        (b), the Corporation shall appoint itself as 
                        receiver for the company.
                            (ii) Limits on cgrc's powers.--Except as 
                        provided in this paragraph and section 
                        113(g)(4), the Corporation may not appoint 
                        itself receiver or file a bankruptcy petition 
                        for a guaranteed company.
                    (B) CGRC immediately files a bankruptcy petition.--
                On the same business day that the Corporation appoints 
                itself as receiver, the Corporation shall file a 
                voluntary petition under section 301 of title 11, 
                United States Code, on behalf of the guaranteed company 
                for which the Corporation appointed itself receiver.
            (2) Recovery from all guaranteed parties for losses due to 
        closed loops.--
                    (A) In general.--In the case of any guaranteed 
                company for which the Corporation files a bankruptcy 
                petition under paragraph (1)(B), all guaranteed parties 
                shall be liable to cover any loss to the bankruptcy 
                estate arising out of the bankruptcy trustee's duty to 
                perform on all guaranteed obligations of the guaranteed 
                company.
                    (B) Liability proportional to a party's share of 
                overall guaranteed obligations.--A guaranteed party 
                shall be liable under subparagraph (A) in proportion to 
                such party's share of the guaranteed obligations of all 
                guaranteed parties at the time of the filing of the 
                bankruptcy petition by the Corporation.
                    (C) CGRC authorization.--The Corporation is 
                authorized to, and shall, assess guaranteed parties for 
                any amounts owed under this paragraph.
    (d) Standing.--Any person can bring an action in a district court 
of the United States to force the Corporation to take action under this 
section.

SEC. 126. TREASURY OVERSIGHT OF THE CROSS-GUARANTEE REGULATION 
              CORPORATION.

    (a) Enforcement of the Act.--In the event that the Corporation 
should fail to fulfill any of its duties under this title, the 
Secretary of the Treasury may apply to the Federal district court for 
the District of Columbia for an order requiring the Corporation to 
discharge its obligations under this title and for such other relief as 
the court may deem necessary to carry out the purposes of this title.
    (b) Examinations and Reports.--
            (1) Examinations.--The Secretary of the Treasury may make 
        such examinations and inspections of the Corporation and 
        require the Corporation to furnish it with such reports and 
        records or copies thereof as the Secretary may consider 
        necessary to implement the purposes of this title.
            (2) Reports.--
                    (A) Annual report.--Within 90 days after the close 
                of each fiscal year of the Corporation, the Corporation 
                shall submit to the Treasury Department a written 
                report relative to the conduct of its business, and the 
                exercise of the other rights and powers granted by this 
                title, during such fiscal year.
                    (B) Information to be included in report.--The 
                report under subparagraph (A) shall include financial 
                statements setting forth the financial position of the 
                Corporation at the end of such fiscal year and the 
                results of its operations (including the source and 
                application of its funds) for such fiscal year.
                    (C) Required audit.--The financial statements 
                required under subparagraph (B) shall be examined by an 
                independent public accountant or firm of independent 
                public accountants, selected by the Corporation and 
                satisfactory to the Treasury Department, and shall be 
                accompanied by the report thereon of such accountant or 
                firm.
                    (D) Submission to the president and congress.--The 
                Secretary of the Treasury shall submit the report under 
                subparagraph (A) to the President and Congress with 
                such comment thereon as the Secretary deems 
                appropriate.

               CHAPTER 2--PROTECTION OF INSURED DEPOSITS

SEC. 128. BACKUP INSURANCE FOR DEPOSITS IN GUARANTEED DEPOSITORY 
              INSTITUTIONS.

    (a) Establishment of Cross-Guarantee Backup Fund.--
            (1) In general.--There is hereby established the cross-
        guarantee backup fund consisting of amounts deposited pursuant 
        to section 144 and subsection (c).
            (2) Administration of fund.--The cross-guarantee backup 
        fund shall be administered by the Federal Deposit Insurance 
        Corporation until such time as the administration of the fund 
        is transferred to the Corporation as provided for in section 
        144(e)(3).
    (b) Backup Deposit Insurance.--
            (1) Fund liability.--Deposits in any guaranteed depository 
        institution or guaranteed banking office shall be insured 
        against loss, to the same extent as deposits are insured 
        against loss under section 11(a) of the Federal Deposit 
        Insurance Act (as in effect on the day before the enactment of 
        this Act), in the event that no adjustment under section 
        113(a)(2)(F)(iii) will be sufficient to protect all guaranteed 
        obligations of all guaranteed companies against loss.
            (2) Subordinated debt not treated as deposit.--No 
        subordinated debt of any guaranteed depository institution or 
        any guaranteed banking office may be treated as a deposit for 
        purposes of paragraph (1).
    (c) Use and Disposition of Fund.--
            (1) In general.--Amounts in the cross-guarantee backup fund 
        may be used only to meet obligations incurred under subsection 
        (b)(1).
            (2) Investments.--Amounts on deposit in the cross-guarantee 
        backup fund shall be invested in direct obligations of the 
        United States and interest thereon shall accumulate in the 
        fund.
            (3) Repayment.--A guaranteed depository institution or 
        guaranteed banking office shall be obliged to repay the cross-
        guarantee backup fund, including any foregone interest under 
        paragraph (2), for any payments made to the institution or 
        banking office or the institution's or banking office's 
        depositors pursuant to paragraph (1).
    (d) Assessments.--If the repayment required pursuant to paragraph 
(3) of subsection (c) is not repaid to the cross-guarantee backup fund 
within 30 days after payment under paragraph (1) of subsection (c), the 
Federal Deposit Insurance Corporation or the Corporation, as the case 
may be, shall levy pro rata on all insured deposits in guaranteed 
depository institutions and guaranteed banking offices, as of the end 
of the calendar quarter preceding the payment under paragraph (1), an 
amount equal to the amount owed under paragraph (3).

                  Subtitle D--Miscellaneous Provisions

SEC. 131. INSTITUTIONS OFFERING UNINSURED DEPOSITS.

    The Corporation shall ensure that any company, other than--
            (a) a depository institution;
            (b) a branch which is not an insured branch (as the term 
        ``insured branch'' is defined in section 3(s) of the Federal 
        Deposit Insurance Act);
            (c) an insured credit union or noninsured credit union (as 
        such terms are defined in section 101(7) of the Federal Credit 
        Union Act);
            (d) a broker or dealer registered under the Securities 
        Exchange Act of 1934; or
            (e) an investment company registered under the Investment 
        Company Act of 1940,
which accepts deposits or assumes obligations which would be deposits 
if the company were a bank or savings association (as defined in 
section 3 of the Federal Deposit Insurance Act) is accepting such 
deposits and assuming such obligations in accordance with all 
applicable Federal and State laws which relate to the licensing and 
regulation of institutions which accept deposits or assume such 
obligations.

SEC. 132. FEDERAL RESERVE LENDING.

    Before February 1 of each calendar year beginning after the cross-
guarantee activation date, the Board of Governors of the Federal 
Reserve System shall submit a report to the committees of both Houses 
of the Congress of the United States having jurisdiction over 
depository institutions containing--
            (a) a certification that--
                    (1) no loss was incurred by such Board or any 
                Federal Reserve Bank during the preceding calendar year 
                on any loan or other advance to any guaranteed company 
                during such year; and
                    (2) no loss is anticipated on any such loan or 
                advance which remains outstanding at the end of such 
                year; or
            (b) the amount of any such loss or anticipated loss.

SEC. 133. ADVERTISING BY GUARANTEED FINANCIAL GROUPS.

    (a) Advertising Deposit Guarantees.--
            (1) In general.--A guaranteed company or guaranteed banking 
        office may advertise that deposits and certain other 
        liabilities are fully guaranteed against any loss under a 
        cross-guarantee contract approved by the Corporation.
            (2) Cross-guarantee logo.--Before the end of the 1-year 
        period beginning on the date of the enactment of this Act, the 
        Corporation--
                     (A) shall design, after consultation with 
                depository institutions, a logotype for use by a 
                guaranteed company or guaranteed banking office, which 
                shall include language which states ``This institution 
                is operating under a cross-guarantee contract approved 
                by the Cross-Guarantee Regulation Corporation''; and
                     (B) authorize guaranteed companies and guaranteed 
                banking offices to use such logotype.
            (3) Rules governing manner of advertising.--The Corporation 
        shall prescribe rules governing the manner in which a 
        guaranteed company or guaranteed banking office may display any 
        logotype permitted under this subsection.
    (b) Advertising Backup Insurance.--A depository institution which 
is guaranteed under a cross-guarantee contract--
            (1) shall display at each place of business of the 
        institution any sign described in section 18(a) of the Federal 
        Deposit Insurance Act; and
            (2) may advertise that deposits at the institution are 
        insured by the federal government to the same extent as 
        deposits are insured against loss under section 11(a) of the 
        Federal Deposit Insurance Act (as in effect on the date before 
        the enactment of this Act).
    (c) Equal Treatment in Advertising the FDIC Logo.--The rules 
governing advertising under subsection (b) shall not provide for 
different treatment based on whether or not a depository institution is 
a guaranteed depository institution.

SEC. 134. GUARANTEED DEPOSITORY INSTITUTIONS REMAIN FEDERALLY INSURED 
              DEPOSITORIES FOR PURPOSES OF STATE OR FEDERAL LAW.

    Unless a State or party to a contract otherwise provides subsequent 
to the passage of this act, a guaranteed depository institution shall 
be deemed to be a federally insured depository institution within the 
meaning of section 3(c)(2) of the Federal Deposit Insurance Act for 
purposes of any State or Federal law or private agreement which 
determines the legally acceptable institutions in which to deposit 
funds.

     Subtitle E--Transition to 100 Percent Cross-Guarantee Process

SEC. 141. EFFECTIVE DATE OF SYSTEM BASED ON MINIMUM NUMBER OF 
              GUARANTEED DEPOSITORY INSTITUTIONS AND AMOUNT OF TOTAL 
              ASSETS.

    (a) In General.--No cross-guarantee or stop-loss contract shall 
take effect before the later of--
            (1) the end of the 18-month period beginning on the date of 
        the enactment of this Act; or
            (2) 40 business days after the date on which the 
        Corporation has approved, under subsection (b), a minimum of 
        250 cross-guarantee contracts under which depository 
        institutions which, in the aggregate, have total assets of not 
        less than $500,000,000,000 are guaranteed companies or 
        guaranteed banking offices.
    (b) Contingent Effect of Contracts Until Effective Date.--
            (1) In general.--The Corporation may conditionally approve 
        a cross-guarantee or stop-loss contract to become effective on 
        the date to be determined under subsection (a) even though not 
        all direct guarantors under the contract meet the requirements 
        under section 116(a)(1).
            (2) Minimum requirements.--No cross-guarantee or stop-loss 
        contract conditionally approved under paragraph (1) shall 
        receive final approval from the Corporation for purposes of 
        subsection (a)(2) unless--
                    (A) the cross-guarantee or stop-loss contract is 1 
                of a set of contracts in which each contract--
                            (i) is a contract in the same closed loop; 
                        and
                            (ii) becomes effective at the same time 
                        every other contract within the set of 
                        contracts takes effect; and
                    (B) at the time such contract becomes effective, 
                the requirements of section 125(a) are met.
    (c) Publication of Cross-Guarantee Activation Date.--The 
Corporation shall submit for publication in the Federal Register the 
date of the cross-guarantee activation date on the day that such date 
is ascertained.
    (d) One-Time Conversion to Guaranteed Party Status.--
Notwithstanding any provision of section 142, section 111 shall apply 
with respect to any depository institution as of the date--
            (1) on which such institution first becomes a guaranteed 
        depository institution or guaranteed banking office;
            (2) on which any depository institution which is affiliated 
        with such depository institution becomes a guaranteed 
        depository institution; or
            (3) on which any depository institution which is under 
        common ownership with such depository institution under section 
        112(d)(2) becomes a guaranteed depository institution.

SEC. 142. MANDATORY DATE ON WHICH DEPOSITORY INSTITUTIONS MUST BECOME 
              GUARANTEED.

    (a) In General.--A depository institution may operate without being 
a guaranteed depository institution until the end of a two-year period 
beginning on the last day of a calendar quarter in which--
            (1) more than 90 percent of the consolidated assets at book 
        value of all depository institutions are owned by guaranteed 
        depository institutions; or
            (2) more than 90 percent of all depository institutions are 
        guaranteed depository institutions.
    (b) Consolidated Assets at Book Value Defined.--
            (1) In general.--The term ``consolidated assets at book 
        value'' means the total value, as determined on a consolidated 
        basis and in accordance with generally accepted accounting 
        principles, of all tangible and intangible property of any 
        depository institution, all subsidiaries of such institution, 
        all affiliates of such institution which are depository 
        institutions, and all subsidiaries of such affiliates.
            (2) Rules.--The Corporation may issue rules to further 
        define the term consistent with this subsection.

SEC. 143. APPOINTMENT OF RECEIVER FOR INSTITUTIONS WHICH FAIL TO COMPLY 
              WITH TRANSITION REQUIREMENTS.

    The Federal Deposit Insurance Corporation shall immediately appoint 
a receiver for any depository institution which is not a guaranteed 
depository institution or guaranteed banking office under any cross-
guarantee contract as of the date by which such institution is required 
to be a guaranteed depository institution or guaranteed banking office 
under section 142.

SEC. 144. FUNDING THE CROSS-GUARANTEE BACKUP FUND.

    (a) Sequence of Actions To Be Taken on the Cross-Guarantee 
Activation Date.--On the cross-guarantee activation date, the Federal 
Deposit Insurance Corporation shall:
            (1) Merge existing deposit insurance funds.--Merge the 
        Savings Association Insurance Fund (established under section 
        11(a)(6)(A) of the Federal Deposit Insurance Act) into the Bank 
        Insurance Fund (established under section 11(a)(5)(A) of the 
        Federal Deposit Insurance Act) with the Bank Insurance Fund 
        assuming all of the assets and liabilities of the Savings 
        Association Insurance Fund.
            (2) Adjust loss reserve in the bank insurance fund.--
        Subsequent to the merger under paragraph (1), adjust the Bank 
        Insurance Fund's reserve for losses to reflect the present 
        value of the fund's expected losses due to depository 
        institutions that did not become guaranteed depository 
        institutions on the cross-guarantee activation date.
            (3) Transfer funds to fico.--Transfer from the Bank 
        Insurance Fund to the Financing Corporation (established under 
        section 21(a) of the Federal Home Loan Bank Act) such sums as 
        shall be sufficient to carry out the purposes of subsection 
        (c).
            (4) Adjust designated reserve ratio for the bank insurance 
        fund.--After carrying out the provisions of paragraphs (1) 
        through (3), calculate a designated reserve ratio for the Bank 
        Insurance Fund that shall be used after the cross-guarantee 
        activation date for the purpose of determining deposit 
        insurance assessments in lieu of the designated reserve ratio 
        specified under section 7(b)(2)(A)(iv)(I) of the Federal 
        Deposit Insurance Act.
    (b) Actions Subsequent to the Cross-Guarantee Activation Date.--
Within 30 days after carrying out the provisions of subsection (a), the 
Federal Deposit Insurance Corporation shall transfer to the cross-
guarantee backup fund an amount equal to the product of--
            (1) the estimated insured deposits held by depository 
        institutions becoming guaranteed depository institutions on the 
        cross-guarantee activation date; and
            (2) the ratio calculated under subsection (a)(4).
    (c) Defease Remaining Interest Payable on FICO Bonds.--
            (1) Purchase zero coupon instruments.--The directors of the 
        Financing Corporation (established under section 21(a) of the 
        Federal Home Loan Bank Act) shall use the funds transferred to 
        the Financing Corporation under subsection (a)(3) to purchase 
        noninterest bearing direct obligations of the United States 
        with face amounts (the amount of principal payable at maturity) 
        and maturities approximately equal to the remaining interest 
        due and payable on obligations issued by the Financing 
        Corporation under section 21(e) of the Federal Home Loan Bank 
        Act.
            (2) Terminate fico assessment authority.--Upon purchasing 
        the securities described in paragraph (1), the Financing 
        Corporation shall cease making assessments authorized under 
        section 21(f) of the Federal Home Loan Bank Act.
    (d) Actions To Be Taken on Every June 30 and December 31 After the 
Cross-Guarantee Activation Date.--
            (1) Adjust reserves for losses.--On every June 30 and 
        December 31 after the cross-guarantee activation date, the 
        Federal Deposit Insurance Corporation shall adjust the reserve 
        for losses in the Bank Insurance Fund to reflect 
        contemporaneous estimates of the present value of future losses 
        to be paid from the fund.
            (2) Transfer additional funds to backup fund.--Upon making 
        the adjustments described in paragraph (1), the Federal Deposit 
        Insurance Corporation shall transfer to the cross-guarantee 
        backup fund an amount equal to the product of--
                    (A) the estimated insured deposits, as of the 
                beginning of the six-month period ending on June 30 or 
                December 31, for all depository institutions that 
                became guaranteed depository institutions during such a 
                six-month period; and
                    (B) the ratio calculated under subsection (a)(4).
    (e) Actions To Be Taken After the Transition Period.--
            (1) Sequence of actions to be taken at the end of the 
        transition period.--Immediately upon the appointment of all 
        receivers under section 143, the Federal Deposit Insurance 
        Corporation shall--
                    (A) adjust the Bank Insurance Fund's reserves for 
                losses to reflect the expenses of winding up each 
                Federal Deposit Insurance Corporation receivership 
                still open after all receivers have been appointed 
                under section 143; and
                    (B) after making the adjustment described in 
                subparagraph (A), transfer all funds remaining in the 
                Bank Insurance Fund to the cross-guarantee backup fund.
            (2) Actions to be taken as fdic receiverships are closed 
        out.--Upon liquidating all assets and paying all remaining 
        claims and direct and indirect expenses of a receivership 
        administered by the Federal Deposit Insurance Corporation, 
        except the claim of the Federal Deposit Insurance Corporation, 
        the Federal Deposit Insurance Corporation shall transfer to the 
        cross-guarantee backup fund all of the funds remaining in the 
        receivership.
            (3) Final transfer to the cross-guarantee backup fund.--
        After closing out the last Bank Insurance Fund receivership, 
        the Federal Deposit Insurance Corporation shall liquidate all 
        of its remaining assets, transfer all of its remaining funds to 
        the cross-guarantee backup fund, and then transfer the 
        administration of the fund to the Corporation.

SEC. 145. ABOLITION OF THE FEDERAL FINANCIAL INSTITUTIONS EXAMINATION 
              COUNCIL.

    The Federal Financial Institutions Examination Council is hereby 
abolished, effective on the date on which, pursuant to section 142, all 
depository institutions shall be guaranteed depository institutions.

SEC. 146. ABOLITION OF THE FEDERAL DEPOSIT INSURANCE CORPORATION.

    (a) In General.--The Federal Deposit Insurance Corporation is 
hereby abolished, effective on the date on which the last receivership 
or conservatorship resulting from the appointment of a receiver or 
conservator by the Federal Deposit Insurance Corporation has been 
liquidated, disposed of, or otherwise resolved.
    (b) Savings Provisions Related to the FDIC.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) shall not affect the validity of any 
        right, privilege, duty, or obligation of the United States, the 
        Federal Deposit Insurance Corporation, or any other person, 
        which existed on the day before the date of the enactment of 
        this Act.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Federal Deposit Insurance 
        Corporation shall abate by reason of the enactment of this Act, 
        except that the Secretary of Treasury shall be substituted for 
        the Federal Deposit Insurance Corporation as a party to any 
        such action or proceeding.

SEC. 147. CONTINUATION OF ORDERS, RESOLUTIONS, AND DETERMINATIONS.

    All orders, resolutions, determinations, and rules which have been 
issued, made, prescribed, or allowed prior to a depository institution 
becoming a guaranteed depository institution shall continue in effect 
according to the terms of such orders, resolutions, determinations, and 
rules until modified, terminated, set aside, or superseded in 
accordance with applicable law by the agency which issued the order, 
resolution, determination, or rule, by any court of competent 
jurisdiction, by operation of this Act, or by operation of law.

               TITLE II--AMENDMENTS TO OTHER BANKING LAWS

SEC. 201. AMENDMENTS RELATING TO NATIONAL BANKS.

    (a) Exemptions From Minimum Capital, Stock, and Other Requirements 
Covered by Cross-Guarantee Contracts.--
            (1) Capital of national banks.--Section 5138 of the Revised 
        Statutes of the United States (12 U.S.C. 51) is amended by 
        adding at the end the following new sentence: ``This section 
        shall not apply with respect to any national bank which is a 
guaranteed depository institution (as defined in section 101(a)(7) of 
the Deposit Insurance Reform, Regulatory Modernization, and Taxpayer 
Protection Act of 1996).''.
            (2) Preferred stock in member banks.--Section 345 of the 
        Banking Act of 1935 (12 U.S.C. 51B-1) is amended by adding at 
        the end the following new sentence: ``This section shall not 
        apply with respect to any bank which is a guaranteed depository 
        institution (as defined in section 101(a)(7) of the Deposit 
        Insurance Reform, Regulatory Modernization, and Taxpayer 
        Protection Act of 1996).''.
            (3) Deficient capital provision for national banks.--
        Section 5205 of the Revised Statutes of the United States (12 
        U.S.C. 55) is amended by adding at the end the following new 
        sentence: ``This section shall not apply with respect to any 
        national bank which is a guaranteed depository institution (as 
        defined in section 101(a)(7) of the Deposit Insurance Reform, 
        Regulatory Modernization, and Taxpayer Protection Act of 
        1996).''.
            (4) Withdrawal of capital provision for national banks.--
        Section 5204 of the Revised Statutes of the United States (12 
        U.S.C. 56) is amended by adding at the end the following new 
        sentence: ``This section shall not apply with respect to any 
        national bank which is a guaranteed depository institution (as 
        defined in section 101(a)(7) of the Deposit Insurance Reform, 
        Regulatory Modernization, and Taxpayer Protection Act of 
        1996).''.
            (5) Increase in capital provision for national banks.--
        Section 5142 of the Revised Statutes of the United States (12 
        U.S.C. 57) is amended by adding at the end the following new 
        sentence: ``This section shall not apply with respect to any 
        national bank which is a guaranteed depository institution (as 
        defined in section 101(a)(7) of the Deposit Insurance Reform, 
        Regulatory Modernization, and Taxpayer Protection Act of 
        1996).''.
            (6) Decrease and distribution of capital provision for 
        national banks.--Section 5143 of the Revised Statutes of the 
        United States (12 U.S.C. 59) is amended by adding at the end 
        the following new sentence: ``Notwithstanding the preceding 
        sentence, the approval of the Comptroller of the Currency shall 
        not be required for any reduction of capital stock, or any 
        distribution to shareholders by reason of any such reduction, 
        under such sentence by any national bank which is a guaranteed 
        depository institution (as defined in section 101(a)(7) of the 
        Deposit Insurance Reform, Regulatory Modernization, and 
        Taxpayer Protection Act of 1996).''.
            (7) Dividend provisions.--
                    (A) In general.--Section 5199(a) of the Revised 
                Statutes of the United States (12 U.S.C. 60(a)) is 
                amended--
                    (i) by striking ``(a) The directors'' and 
                inserting:
    ``(a) Declaration of Dividend.--
            ``(1) In general.--Subject to paragraph (2), the 
        directors'';
                            (ii) by striking ``expedient; except that 
                        until the surplus fund of such association'' 
                        and inserting ``expedient.
            ``(2) Exception for certain undercapitalized 
        associations.--Until the surplus fund of a national bank''; and
                            (iii) by adding at the end of paragraph (2) 
                        (as so redesignated by clause (ii) of this 
                        subparagraph) the following: ``This paragraph 
                        shall not apply with respect to any national 
                        bank which is a guaranteed depository 
                        institution (as defined in section 101(a)(7) of 
                        the Deposit Insurance Reform, Regulatory 
                        Modernization, and Taxpayer Protection Act of 
                        1996).''.
                    (B) Technical and conforming amendment.--Section 
                5199(b) of the Revised Statutes of the United States 
                (12 U.S.C. 60(b)) is amended--
                            (i) by striking ``(b) The approval of the 
                        Comptroller'' and inserting ``(b) Approval of 
                        the Comptroller.--Except in the case of a 
                        national bank which is a guaranteed depository 
                        institution (as defined in section 101(a)(7) of 
                        the Deposit Insurance Reform, Regulatory 
                        Modernization, and Taxpayer Protection Act of 
                        1996), the approval of the Comptroller''; and
                            (ii) by striking ``such association'' and 
                        inserting ``a national bank''.
    (b) Exemptions From Requirements Relating to Directors of Banks.--
            (1) Qualifications of national bank directors.--Section 
        5146 of the Revised Statutes of the United States (12 U.S.C. 
        72) is amended by adding at the end the following new sentence: 
        ``This section shall not apply with respect to any national 
        bank which is a guaranteed depository institution (as defined 
        in section 101(a)(7) of the Deposit Insurance Reform, 
        Regulatory Modernization, and Taxpayer Protection Act of 
        1996).''.
            (2) Service of president of national bank as chairman of 
        the bank's board of directors.--Section 5150 of the Revised 
        Statutes of the United States (12 U.S.C. 76) is amended by 
        adding at the end the following new sentence: ``This section 
        shall not apply with respect to any national bank which is 
a guaranteed depository institution (as defined in section 101(a)(7) of 
the Deposit Insurance Reform, Regulatory Modernization, and Taxpayer 
Protection Act of 1996).''.
            (3) Member bank director interlocks with securities 
        firms.--Section 32 of the Banking Act of 1933 (12 U.S.C. 78) is 
        amended by adding at the end the following new sentence: ``This 
        section shall not apply with respect to any member bank which 
        is a guaranteed depository institution (as defined in section 
        101(a)(7) of the Deposit Insurance Reform, Regulatory 
        Modernization, and Taxpayer Protection Act of 1996).''.
            (4) Loans on or purchase of national bank's own stock.--
        Section 5201 of the Revised Statutes of the United States (12 
        U.S.C. 83) is amended by adding at the end the following new 
        sentence: ``This section shall not apply with respect to any 
        national bank which is a guaranteed depository institution (as 
        defined in section 101(a)(7) of the Deposit Insurance Reform, 
        Regulatory Modernization, and Taxpayer Protection Act of 
        1996).''.
    (c) Exemption From Requirement Relating to Loans to one Borrower.--
Section 5200 of the Revised Statutes of the United States (12 U.S.C. 
84) is amended by adding at the end the following new subsection:
    ``(e) Exemption of Guaranteed Companies.--This section shall not 
apply with respect to any national bank which is a guaranteed 
depository institution (as defined in section 101(a)(7) of the Deposit 
Insurance Reform, Regulatory Modernization, and Taxpayer Protection Act 
of 1996).''.
    (d) Exemption From Requirements Relating to Security for Deposits 
of Government Agencies at National Banks.--Section 5153 of the Revised 
Statutes of the United States (12 U.S.C. 90) is amended--
            (1) in the 1st undesignated paragraph, by striking ``All 
        national banking associations'' and inserting ``(a) In 
        General.--All national banks'';
            (2) in the 2nd undesignated paragraph, by striking ``Any 
        national banking association'' and inserting ``(b) Depository 
        for State and Local Governments.--Any national bank'';
            (3) in the 3rd undesignated paragraph, by striking ``Any 
        national banking association'' and inserting ``(c) Depository 
        for Indian Tribes.--Any national bank''; and
            (4) by adding at the end the following new subsection:
    ``(d) Exemption From Security and Collateral Requirements.--A 
national bank which is a guaranteed depository institution (as defined 
in section 101(a)(7) of the Deposit Insurance Reform, Regulatory 
Modernization, and Taxpayer Protection Act of 1996) shall not be 
required to give any security which is otherwise required under 
subsection (a), (b), or (c) for deposits with the bank under this 
section or for the performance of the bank as financial agent.''.
    (e) Exemption From Provision Relating to Transfers by National 
Banks in Contemplation of Insolvency.--Section 5242 of the Revised 
Statutes of the United States (12 U.S.C. 91) is amended by adding at 
the end the following new sentence: ``This section shall not apply with 
respect to any national bank which is a guaranteed depository 
institution (as defined in section 101(a)(7) of the Deposit Insurance 
Reform, Regulatory Modernization, and Taxpayer Protection Act of 
1996.)''.
    (f) Exemption From Requirements Relating to Reports of Condition.--
Section 5211 of the Revised Statutes of the United States (12 U.S.C. 
161) is amended by adding at the end the following new subsection:
    ``(d) Exemption of Guaranteed Companies.--This section shall not 
apply with respect to any national bank which is a guaranteed 
depository institution (as defined in section 101(a)(7) of the Deposit 
Insurance Reform, Regulatory Modernization, and Taxpayer Protection Act 
of 1996.)''.
    (g) Consent of Guarantors Required for Voluntary Dissolution.--
            (1) In general.--Section 5220 of the Revised Statutes of 
        the United States (12 U.S.C. 181) is amended--
                    (A) in the 1st undesignated paragraph, by striking 
                ``Any association'' and inserting ``(a) In General.--
                Any national bank'';
                    (B) in the 2nd undesignated paragraph, by striking 
                ``The shareholders shall designate'' and inserting 
                ``(b) Liquidating Agent or Committee.--The shareholders 
                shall designate''; and
                    (C) by adding at the end the following new 
                subsection:
    ``(c) Consent of Guarantors Required for Guaranteed Companies.--In 
the case of any national bank which is a guaranteed depository 
institution (as defined in section 101(a)(7) of the Deposit Insurance 
Reform, Regulatory Modernization, and Taxpayer Protection Act of 1996), 
the national bank may go into liquidation and be closed in accordance 
with subsection (a) only with the consent of the direct guarantors of 
such bank.''.
            (2) Notice to Syndicate Agent.--Section 5221 of the Revised 
        Statutes of the United States (12 U.S.C. 182) is amended by 
        inserting ``and, in the case of a national bank which is a 
        guaranteed depository institution (as defined in section 
101(a)(7) of the Deposit Insurance Reform, Regulatory Modernization, 
and Taxpayer Protection Act of 1996), to the syndicate agent of such 
bank'' after ``Comptroller of the Currency''.
    (h) Comptroller of the Currency not Authorized To Appoint 
Receiver.--
            (1) In general.--The Act entitled ``An Act authorizing the 
        appointment of receivers of national banking associations, and 
        for other purposes.'' and approved June 30, 1876, is amended by 
        inserting after the 1st section (12 U.S.C. 191) the following 
        new section:

``SEC. 2. EXEMPTION OF GUARANTEED NATIONAL BANKS.

    ``This Act shall not apply with respect to any national bank which 
is a guaranteed depository institution (as defined in section 101(a)(7) 
of the Deposit Insurance Reform, Regulatory Modernization, and Taxpayer 
Protection Act of 1996).''.
            (2) Exemption from additional ground for the appointment of 
        receivers.--Section 5234 of the Revised Statutes (12 U.S.C. 
        192) is amended by adding at the end the following new 
        sentence: ``This sentence shall not apply with respect to any 
        national bank which is a guaranteed depository institution (as 
        defined in section 101(a)(7) of the Deposit Insurance Reform, 
        Regulatory Modernization, and Taxpayer Protection Act of 
        1996).''.
    (i) Comptroller of the Currency not Authorized To Appoint 
Conservator.--The Bank Conservation Act is amended by inserting after 
section 206 the following new section:

``SEC. 207. EXEMPTION OF GUARANTEED NATIONAL BANKS.

    ``This subchapter shall not apply with respect to any national bank 
which is a guaranteed depository institution (as defined in section 
101(a)(7) of the Deposit Insurance Reform, Regulatory Modernization, 
and Taxpayer Protection Act of 1996).''.
    (j) Comptroller of the Currency not Authorized To Examine 
Guaranteed Banks.--Section 5240 of the Revised Statutes of the United 
States (12 U.S.C. 481--485) is amended by adding at the end of the 1st 
paragraph of such section the following new sentence: ``Notwithstanding 
any other provision of this section, the authority of the Comptroller 
of the Currency to examine any national bank or any affiliate of a 
national bank shall not apply with respect to any national bank which 
is a guaranteed depository institution (as defined in section 101(a)(7) 
of the Deposit Insurance Reform, Regulatory Modernization, and Taxpayer 
Protection Act of 1996) or any affiliate of such bank.''.
    (k) Exemption From Limitation or Conditions on Real Estate Lending 
Authority.--Section 24(a) of the Federal Reserve Act (12 U.S.C. 371(a)) 
is amended by adding at the end the following new sentence: 
``Notwithstanding the preceding sentence, a national bank which is a 
guaranteed depository institution (as defined in section 101(a)(7) of 
the Deposit Insurance Reform, Regulatory Modernization, and Taxpayer 
Protection Act of 1996) shall not be subject to section 18(o) of the 
Federal Deposit Insurance Act or any restriction or requirement 
prescribed by the Comptroller of the Currency under the preceding 
sentence.''.

SEC. 202. AMENDMENTS RELATING TO MEMBER BANKS.

    (a) Federal Reserve Board and Federal Reserve Banks Not Authorized 
To Examine Guaranteed Member Banks.--
            (1) In general.--Section 11(a)(1) of the Federal Reserve 
        Act (12 U.S.C. 248(a)(1)) is amended by adding at the end the 
        following new sentence: ``Notwithstanding any other provision 
        of this section, the authority of the Board or any Federal 
        reserve bank to examine any member bank shall not apply with 
        respect to any member bank which is a guaranteed depository 
        institution (as defined in section 101(a)(7) of the Deposit 
        Insurance Reform, Regulatory Modernization, and Taxpayer 
        Protection Act of 1996).''.
            (2) Special examinations.--The 1st sentence of the 5th 
        undesignated paragraph of section 5240 of the Revised Statutes 
        of the United States (12 U.S.C. 483) is amended by inserting 
        ``which are not guaranteed depository institutions (as defined 
        in section 101(a)(7) of the Deposit Insurance Reform, 
        Regulatory Modernization, and Taxpayer Protection Act of 
        1996)'' after ``member banks within its district''.
            (3) Foreign operation of state member banks.--The last 
        sentence of the 6th undesignated paragraph of section 5240 of 
        the Revised Statutes of the United States (12 U.S.C. 481) is 
        amended by inserting ``and are not guaranteed depository 
        institutions (as defined in section 101(a)(7) of the Deposit 
        Insurance Reform, Regulatory Modernization, and Taxpayer 
        Protection Act of 1996)'' before the period.
            (4) Examinations in connection with advances or 
        discounts.--Section 11(n) of the Federal Reserve Act (12 U.S.C. 
        248(n)) is amended by striking ``depository institution,'' and 
        inserting ``depository institution (other than a guaranteed 
        depository institution (as defined in section 101(a)(7) of the 
        Deposit Insurance Reform, Regulatory Modernization, and 
        Taxpayer Protection Act of 1996)),''.
    (b) Exemption From Member Bank Loan Limitations.--Section 11(m) of 
the Federal Reserve Act (12 U.S.C. 248(m)) is amended by adding at the 
end the following new sentence: ``This paragraph shall not apply with 
respect to any member bank which is a guaranteed depository institution 
(as defined in section 101(a)(7) of the Deposit Insurance Reform, 
Regulatory Modernization, and Taxpayer Protection Act of 1996).''.
    (c) Exemption From Limitation on Access to Fed Wire.--Section 11 of 
the Federal Reserve Act (12 U.S.C. 248) is amended by inserting after 
paragraph (n) the following new paragraph:
    ``(o) Prohibition on Limits on Access to Payment and Clearing 
Systems by Guaranteed Member Banks.--Notwithstanding any other 
provision of law, the Board may not limit or deny access by any member 
bank which is a guaranteed depository institution (as defined in 
section 101(a)(7) of the Deposit Insurance Reform, Regulatory 
Modernization, and Taxpayer Protection Act of 1996) to the payment 
system or any system in effect for clearing transactions in securities 
for the purpose of protecting any such system from any risk.''.
    (d) Federal Reserve Board Not Authorized To Appoint Conservator or 
Receiver.--Section 11(p) of the Federal Reserve Act (12 U.S.C. 248(p)) 
(as added by section 133(f) of the Federal Deposit Insurance 
Corporation Act of 1991) is amended to read as follows:
    ``(p) Authority To Appoint Conservator or Receiver.--
            ``(A) In general.--Except as provided in subparagraph (B), 
        the Board may appoint the Federal Deposit Insurance Corporation 
        as conservator or receiver for a State member bank under 
        section 11(c)(8) of the Federal Deposit Insurance Act.
            ``(B) Exception for guaranteed depository institutions.--
        This paragraph shall not apply with respect to any member bank 
        which is a guaranteed depository institution (as defined in 
        section 101(a)(7) of the Deposit Insurance Reform, Regulatory 
        Modernization, and Taxpayer Protection Act of 1996).''.
    (e) Qualification of Guaranteed State Banks for Member Bank Status 
Without Application.--
            (1) In general.--The 1st undesignated paragraph of section 
        9 of the Federal Reserve Act (12 U.S.C. 321) is amended by 
        adding at the end the following new sentence: ``Notwithstanding 
        the application requirement contained in the 1st sentence of 
        this paragraph, any State bank which is a guaranteed depository 
        institution (as defined in section 101(a)(7) of the Deposit 
        Insurance Reform, Regulatory Modernization, and Taxpayer 
        Protection Act of 1996) may become a member of the Federal 
        Reserve System without application by agreeing to be subject to 
        all applicable provisions of this Act and by subscribing to 
        stock in the same manner and amount as a national bank under 
        section 2.''.
            (2) Exemption from capital, reserve, and reporting 
        requirements.--The 1st sentence of the 6th undesignated 
        paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 
        324) is amended by inserting ``, other than a bank which is a 
        guaranteed depository institution (as defined in section 
        101(a)(7) of the Deposit Insurance Reform, Regulatory 
        Modernization, and Taxpayer Protection Act of 1996),'' after 
        ``banks admitted to membership under authority of this 
        section''.
            (3) Exemption from examination.--The 7th undesignated 
        paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 
        325) is amended by striking ``such banks'' and inserting ``, 
        any bank admitted to membership under this section, other than 
        a bank which is a guaranteed depository institution (as defined 
        in section 101(a)(7) of the Deposit Insurance Reform, 
        Regulatory Modernization, and Taxpayer Protection Act of 
        1996),''.
            (4) Exemption from special examinations.--The 8th 
        undesignated paragraph of section 9 of the Federal Reserve Act 
        (12 U.S.C. 326) is amended by adding at the end the following 
        new sentence: ``Notwithstanding any other provision of this 
        paragraph, the authority of the Board to examine any member 
        bank shall not apply with respect to any member bank which is a 
        guaranteed depository institution (as defined in section 
        101(a)(7) of the Deposit Insurance Reform, Regulatory 
        Modernization, and Taxpayer Protection Act of 1996).''.
            (5) Exemption from certain forfeiture provision.--The 9th 
        undesignated paragraph of section 9 of the Federal Reserve Act 
        (12 U.S.C. 327) is amended by inserting ``, other than a bank 
        which is a guaranteed depository institution (as defined in 
        section 101(a)(7) of the Deposit Insurance Reform, Regulatory 
        Modernization, and Taxpayer Protection Act of 1996),'' after 
        ``a member bank''.
            (6) Exemption from additional capital requirement.--The 
        11th undesignated paragraph of section 9 of the Federal Reserve 
        Act (12 U.S.C. 329) is amended by adding at the end the 
        following new sentence: ``This paragraph shall not apply with 
        respect to any member bank which is a guaranteed depository 
        institution (as defined in section 101(a)(7) of the Deposit 
        Insurance Reform, Regulatory Modernization, and Taxpayer 
        Protection Act of 1996).''.
            (7) Exemption from security and collateral requirement.--
        The last sentence of the 15th undesignated paragraph of section 
        9 of the Federal Reserve Act (12 U.S.C. 332) is amended by 
        inserting ``, other than a bank which a guaranteed depository 
        institution (as defined in section 101(a)(7) of the Deposit 
        Insurance Reform, Regulatory Modernization, and Taxpayer 
        Protection Act of 1996),'' after ``the banks and trust 
        companies thus designated''.
            (8) Membership qualification in the case of state mutual 
        savings banks.--The 16th undesignated paragraph of section 9 of 
        the Federal Reserve Act (12 U.S.C. 333) is amended by inserting 
        after the 1st sentence the following new sentence: 
        ``Notwithstanding the application requirement contained in the 
preceding sentence, any State mutual savings bank which is a guaranteed 
depository institution (as defined in section 101(a)(7) of the Deposit 
Insurance Reform, Regulatory Modernization, and Taxpayer Protection Act 
of 1996) may become a member of the Federal Reserve System without 
application by agreeing to be subject to all applicable provisions of 
this Act and by subscribing to stock in the same manner and amount as 
provided in this paragraph for State mutual savings banks applying for 
membership.''
            (9) Exemption from affiliate reporting requirements.--
                    (A) In general.--The 1st sentence of the 17th 
                undesignated paragraph of section 9 of the Federal 
                Reserve Act (12 U.S.C. 334) is amended by inserting ``, 
                other than a bank which is a guaranteed depository 
                institution (as defined in section 101(a)(7) of the 
                Deposit Insurance Reform, Regulatory Modernization, and 
                Taxpayer Protection Act of 1996),'' after ``bank 
                admitted to membership under this section''.
                    (B) Exemption from additional affiliate reporting 
                requirements.--The 18th undesignated paragraph of 
                section 9 of the Federal Reserve Act (12 U.S.C. 334) is 
                amended by inserting ``, other than a bank which is a 
                guaranteed depository institution (as defined in 
                section 101(a)(7) of the Deposit Insurance Reform, 
                Regulatory Modernization, and Taxpayer Protection Act 
                of 1996),'' after ``affiliated member bank''.
            (10) Exemption from examination requirements.--The 22d 
        undesignated paragraph of section 9 of the Federal Reserve Act 
        (12 U.S.C. 338) is amended by inserting ``, other than a bank 
        which is a guaranteed depository institution (as defined in 
        section 101(a)(7) of the Deposit Insurance Reform, Regulatory 
        Modernization, and Taxpayer Protection Act of 1996),'' after 
        ``State member banks'' the 1st place such term appears.
    (f) Exemption From Interest Requirements.--Section 19(i) of the 
Federal Reserve Act (12 U.S.C. 371a) is amended by adding at the end 
the following new sentence: ``No provision of this subsection shall 
apply with respect to a member bank which is a guaranteed depository 
institution (as defined in section 101(a)(7) of the Deposit Insurance 
Reform, Regulatory Modernization, and Taxpayer Protection Act of 
1996).''.
    (g) Exemption From Requirements Relating to Interbank Liabilities 
and Transactions With Affiliates.--
            (1) Interbank liabilities.--Section 23 of the Federal 
        Reserve Act (12 U.S.C. 371(b-2)) is amended by adding at the 
        end the following new subsection:
    ``(f) Exemption for Guaranteed Depository Institutions.--A 
guaranteed depository institution (as defined in section 101(a)(7) of 
the Deposit Insurance Reform, Regulatory Modernization, and Taxpayer 
Protection Act of 1996) shall not be subject to any regulation or order 
issued under this section.''.
            (2) Exemption from restrictions on transactions with 
        affiliates.--Sections 23A and 23B of the Federal Reserve Act 
        (12 U.S.C. 371c, 371c-1) are each amended by adding at the end 
        of each such section the following new subsection:
    ``(f) Exemption for Guaranteed Depository Institutions.--This 
section shall not apply to any guaranteed depository institution (as 
defined in section 101(a)(7) of the Deposit Insurance Reform, 
Regulatory Modernization, and Taxpayer Protection Act of 1996) or any 
affiliate of any such institution that is a guaranteed company (as 
defined in section 101(a)(6) of the Deposit Insurance Reform, 
Regulatory Modernization, and Taxpayer Protection Act of 1996).''.
    (h) Exemption From Limitation on Investments in, or Loans on, Bank 
Premises.--Section 24A of the Federal Reserve Act (12 U.S.C. 371d) is 
amended by adding at the end the following new sentence: ``This section 
shall not apply to any guaranteed depository institution (as defined in 
section 101(a)(7) of the Deposit Insurance Reform, Regulatory 
Modernization, and Taxpayer Protection Act of 1996).''.
    (i) Exemption From Limitations on Bankers' Acceptances.--Section 
13(7) of the Federal Reserve Act (12 U.S.C. 372) is amended by adding 
at the end the following new subparagraph:
                ``(I) Exemption from limitations for guaranteed 
                depository institutions.--Subparagraphs (B), (C), (D), 
                (E), (F), and (H) shall not apply to any guaranteed 
                depository institution (as defined in section 101(a)(7) 
                of the Deposit Insurance Reform, Regulatory 
                Modernization, and Taxpayer Protection Act of 1996).''
    (j) Exemption From Purchasing and Lending Limits Relating to 
Directors and Officers.--Section 22 of the Federal Reserve Act (12 
U.S.C. 375, 376, 503, 375a, and 375b) is amended by inserting before 
subsection (d) the following new subsection:
    ``(c) Exemption for Guaranteed Depository Institutions.--
Subsections (d), (e), (g), and (h) shall not apply to any guaranteed 
depository institution (as defined in section 101(a)(7) of the Deposit 
Insurance Reform, Regulatory Modernization, and Taxpayer Protection Act 
of 1996) or any affiliate of any such institution.''.

SEC. 203. AMENDMENTS RELATING TO SAVINGS ASSOCIATIONS.

    (a) Guaranteed Savings Association Defined.--Section 2 of the Home 
Owners' Loan Act (12 U.S.C. 1462) is amended by adding at the end the 
following new paragraphs:
            ``(10) Guaranteed savings association.--The term 
        `guaranteed savings association' means a savings association 
        which is a guaranteed depository institution (as defined in 
        section 101(a)(7) of the Deposit Insurance Reform, Regulatory 
        Modernization, and Taxpayer Protection Act of 1996).
            ``(11) Guaranteed federal savings association.--The term 
        `guaranteed Federal savings association' means a Federal 
        savings association which is a guaranteed depository 
        institution (as defined in section 101(a)(7) of the Deposit 
        Insurance Reform, Regulatory Modernization, and Taxpayer 
        Protection Act of 1996).''.
    (b) Exemption From Examination and Regulation by Director of the 
Office of Thrift Supervision.--
            (1) In general.--Section 4(a) of the Home Owners' Loan Act 
        (12 U.S.C. 1463(a)) is amended by adding at the end the 
        following new paragraph:
            ``(4) Exemption for guaranteed savings associations.--``The 
        authority of the Director under this subsection or subsection 
        (b) or (c) to examine any savings association or prescribe 
        regulations applicable to savings associations shall not apply 
        with respect to any guaranteed savings association.''.
            (2) Federal savings associations.--Section 5(a) of the Home 
        Owners' Loan Act (12 U.S.C. 1464(a)) is amended by adding at 
        the end the following new sentence: ``The authority of the 
        Director under the preceding sentence to prescribe regulations 
        to provide for the examination and regulation of Federal 
        savings associations shall not apply with respect to the 
        examination or regulation of any guaranteed Federal savings 
        association.''.
            (3) Exemption from examination fee provisions.--Section 9 
        of the Home Owners' Loan Act (12 U.S.C. 1467) is amended by 
        adding at the end the following new subsection:
    ``(n) Exemption for Guaranteed Savings Associations.--This section 
and the authority of the Director under this section shall not apply 
with respect to any guaranteed savings association.''.
    (c) Exceptions to Limitations on Deposit and Related Powers.--
Section 5(b)(1) of the Home Owners' Loan Act (12 U.S.C. 1464(b)(1)) is 
amended by adding at the end the following new subparagraph:
            ``(G) Special rules applicable to guaranteed savings 
        associations.--
                    ``(i) Statutory authority.--A guaranteed Federal 
                savings association shall have the powers described in 
                subparagraphs (C), (E), and (F) without regard to the 
                condition or limitation contained in each such 
                subparagraph relating to regulations of the Director.
                    ``(ii) Limitation on regulatory authority.--The 
                exercise by a guaranteed Federal savings association of 
                powers established under subparagraph (A) or (D) or the 
                last sentence of subparagraph (B) shall not be subject 
                to any regulations prescribed by the Director under 
                such provision.
                    ``(iii) Exemption.--A guaranteed Federal savings 
                association shall not be subject to the 1st sentence of 
                subparagraph (B).''.
    (d) Exceptions to Limitations on Loan and Investment Powers.--
Section 5(c) of the Home Owners' Loan Act (12 U.S.C. 1464(c)) is 
amended by adding at the end the following new paragraph:
            ``(7) Exceptions for guaranteed savings associations.--
                    ``(A) Limitation on regulatory authority.--The 
                exercise by a guaranteed Federal savings association of 
                powers established under any provision of this 
                subsection shall not be subject to any regulations 
                prescribed by the Director under this subsection.
                    ``(B) Exemption from maximum amount limitations.--A 
                guaranteed Federal savings association shall not be 
                subject to any limitation in this subsection on the 
                outstanding amount of loans or investments by the 
                association under any provision of this subsection, 
                without regard to whether such maximum amount is 
                expressed as a fixed dollar amount or as a percentage 
                of such association's assets or capital.''.
    (e) Exemption From Enforcement and Conservatorship and Receivership 
Provisions.--Section 5(d) of the Home Owners' Loan Act (12 U.S.C. 
1464(d)) is amended by adding at the end the following new paragraph:
            ``(7) Exemption for guaranteed savings associations.--This 
        subsection and the authority of the Director under this 
        subsection shall not apply with respect to any guaranteed 
        savings association.''.
    (f) Exemption From Fitness Standards.--Section 5(e) of the Home 
Owners' Loan Act (12 U.S.C. 1464(e)) is amended by adding at the end 
the following new sentence:
``The preceding sentence shall not apply with respect to any savings 
association which, at the time the charter is granted, is a guaranteed 
depository institution (as defined in section 101(a)(7) of the Deposit 
Insurance Reform, Regulatory Modernization, and Taxpayer Protection Act 
of 1996) or is required to be a guaranteed depository institution 
before such association accepts any deposit.''.
    (g) Exemption From Requirements Relating to Security for Deposits 
of Government Agencies.--Section 5(k) of the Home Owners' Loan Act (12 
U.S.C. 1464(k)) is amended by adding at the end the following new 
sentence: ``A guaranteed savings association shall not be required to 
give any security for deposits with the savings association under this 
section or for the performance of the association as fiscal agent.''.
    (h) Exemption From Minimum Capital Requirements.--Section 5(s) of 
the Home Owners' Loan Act (12 U.S.C. 1464(s)) is amended by adding at 
the end the following new paragraph:
            ``(6) Exemption for guaranteed savings associations.--This 
        subsection and the authority of the Director under this 
        subsection shall not apply with respect to any guaranteed 
        savings association.''.
    (i) Exemption From Capital Standards.--Section 5(t)(1) of the Home 
Owners' Loan Act (12 U.S.C. 1464(t)(1)) is amended by adding at the end 
the following new subparagraph:
            ``(E) Exemption for guaranteed savings associations.--This 
        subsection and the authority of the Director under this 
        subsection shall not apply with respect to any guaranteed 
        savings association.''.
    (j) Exemption From Requirement Relating to Loans to One Borrower.--
Section 5(u) of the Home Owners' Loan Act (12 U.S.C. 1464(u)) is 
amended by adding at the end the following new paragraph:
            ``(4) Exemption for guaranteed savings associations.--This 
        subsection shall not apply with respect to any guaranteed 
        savings association.''.
    (k) Exemption From Requirement Relating to Reports of Condition.--
Section 5(v) of the Home Owners' Loan Act (12 U.S.C. 1464(v)) is 
amended by adding at the end the following new paragraph:
            ``(9) Exemption for guaranteed savings associations.--This 
        subsection shall not apply with respect to any guaranteed 
        savings association.''.
    (l) Exemption From Requirement Relating to Liquid Assets.--Section 
6 of the Home Owners' Loan Act (12 U.S.C. 1465) is amended by adding at 
the end the following new subsection:
    ``(g) Exemption for Guaranteed Savings Associations.--This section 
shall not apply with respect to any guaranteed savings associations.''.
    (m) Exemption From Affiliate Transaction and Lending Limits 
Relating to Directors and Officers.--Section 11 of the Home Owners' 
Loan Act (12 U.S.C. 1468) is amended by adding at the end the following 
new subsection:
    ``(d) Exemption for Guaranteed Savings Associations.--This section 
shall not apply with respect to any guaranteed savings association.''.

SEC. 204. AMENDMENTS RELATING TO SAVINGS AND LOAN HOLDING COMPANIES.

    (a) Guaranteed Savings Association Defined.--Section 10(a)(1) of 
the Home Owners' Loan Act (12 U.S.C. 1467a(a)(1)) is amended by adding 
at the end the following new subparagraph:
                    ``(K) Guaranteed savings association.--The term 
                `guaranteed savings association' includes any savings 
                association referred to in subparagraph (A) which is a 
                guaranteed depository institution (as defined in 
                section 101(a)(7) of the Deposit Insurance Reform, 
                Regulatory Modernization, and Taxpayer Protection Act 
                of 1996).''.
    (b) Exemption From Examination and Reporting Requirement.--Section 
10(b) of the Home Owners' Loan Act (12 U.S.C. 1467a(b)) is amended by 
adding at the end the following new paragraph:
            ``(7) Exemption for s&l holding company which controls a 
        guaranteed savings association.--Paragraphs (2), (3), and (4) 
        and the authority of the Director under any such paragraph 
        shall not apply with respect to any savings and loan holding 
        company which controls a guaranteed savings association and any 
        subsidiary of such company.''.
    (c) Coordination With Section 11.--Section 10(d) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(d)) is amended by striking 
``Transaction'' and inserting ``Subject to section 11(d), 
transactions''.
    (d) Exemption From Requirements Relating to Declaration of 
Dividend.--Section 10(f) of the Home Owners' Loan Act (12 U.S.C. 
1467a(f)) is amended by adding at the end the following new sentence: 
``This subsection shall not apply with respect to any savings and loan 
company which controls a guaranteed savings association.''.
    (e) Exemption From Restrictions on High-Risk Activities.--Section 
10(p) of the Home Owners' Loan Act (12 U.S.C. 1467a(p)) is amended by 
adding at the end the following new paragraph:
            ``(3) Exemption for parent of guaranteed savings 
        association.--This subsection shall not apply with respect to 
        any savings and loan company which controls a guaranteed 
        savings association.''.
    (f) Nonapplicability of Qualified Stock Issuance Provisions.--
Section 10(q)(1)(A) of the Home Owners' Loan Act (12 U.S.C. 
1467a(q)(1)(A)) is amended--
            (1) in clause (i), by inserting ``which is not a guaranteed 
        savings association'' after ``undercapitalized savings 
        association''; and
            (2) in clause (ii), by inserting ``and does not control a 
        guaranteed savings association'' after ``controls an 
        undercapitalized savings association''.

SEC. 205. AMENDMENTS RELATING TO THE FEDERAL DEPOSIT INSURANCE 
              CORPORATION.

    (a) Amendments to Definitions.--
            (1) Definitions relating to depository institutions.--
        Section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(c)) is amended by adding at the end the following new 
        paragraphs:
            ``(6) Guaranteed depository institution not included.--
        Except as otherwise specifically provided in any provision of 
        this Act, the terms `depository institution' and `insured 
        depository institution' do not include any guaranteed 
        depository institution.
            ``(7) Guaranteed depository institution.--The term 
        `guaranteed depository institution' has the meaning given to 
        such term in section 101(a)(7) of the Deposit Insurance Reform, 
        Regulatory Modernization, and Taxpayer Protection Act of 
        1996.''.
            (2) Definition relating to banks.--Section 3(a) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813(a)) is amended by 
        adding at the end the following new paragraph:
            ``(5) Guaranteed depository institutions not included.--
        Except as otherwise specifically provided in any provision of 
        this Act, the terms `bank', `national bank', `State bank', 
        `District bank', `branch', and `Federal branch', whether or not 
        any such term appears in conjunction with the term `insured', 
        `member', or `nonmember', do not include any guaranteed 
        depository institution.''.
            (3) Definition relating to savings associations.--Section 
        3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813(b)) 
        is amended by adding at the end the following new paragraph:
            ``(4) Guaranteed depository institutions not included.--
        Except as otherwise specifically provided in any provision of 
        this Act, the terms `savings association', `Federal savings 
        association', and `State savings association', whether or not 
        any such term appears in conjunction with the term `insured', 
        do not include any guaranteed depository institution.''.
            (4) Definition relating to appropriate federal banking 
        agency.--Section 3(q) of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(q)) is amended by adding before the last sentence 
        the following new paragraph:
            ``(5) The Cross-Guarantee Regulation Corporation in the 
        case of a guaranteed depository institution.''.
    (b) Prohibition on New Insured Depository Institutions, by Charter 
or Conversion, After Effective Date of Cross-Guarantee System.--
            (1) No continuation of insurance in connection with 
        conversions.--Section 4 of the Federal Deposit Insurance Act 
        (12 U.S.C. 1814) is amended by adding at the end the following 
        new subsection:
    ``(e) Inapplicability of Subsections (b), (c), and (d) After 
Effective Date of Cross-Guarantee System.--Subsections (b), (c), and 
(d) shall not apply as of the effective date of the cross-guarantee 
system under subsection (a) of section 141 of the Deposit Insurance 
Reform, Regulatory Modernization, and Taxpayer Protection Act of 1996, 
as published by the Cross-Guarantee Regulation Corporation in the 
Federal Register pursuant to subsection (c) of such section.''.
            (2) No new insurance under the federal deposit insurance 
        act.--Section 5 of the Federal Deposit Insurance Act (12 U.S.C. 
        1815) is amended by adding at the end the following new 
        subsection:
    ``(f) Prohibition on Approval of Insurance After Effective Date of 
Cross-Guarantee System.--No application for insurance under this 
section may be approved by the Corporation on or after the date by 
which the Cross-Guarantee Regulation Corporation has approved, under 
subsection (a) of section 141 of the Deposit Insurance Reform, 
Regulatory Modernization, and Taxpayer Protection Act of 1996, 250 
cross-guarantee contracts described in subsection (a)(2) of such 
section.''.
    (c) Termination of Deposit Insurance of Guaranteed Depository 
Institution.--Section 8(a) of the Federal Deposit Insurance Act (12 
U.S.C. 1818(a)) is amended--
            (1) by redesignating paragraph (10) as paragraph (11); and
            (2) by inserting after paragraph (9), the following new 
        paragraph:
            ``(10) Termination of insurance of guaranteed depository 
        institution.--The status of any insured depository institution 
        as an insured depository institution shall cease as of the date 
        the institution becomes a guaranteed depository institution.''.
    (d) Ineligibility of Guaranteed Depository Institution for Deposit 
Insurance Under the Federal Deposit Insurance Act.--Section 5(a)(1) of 
the Federal Deposit Insurance Act (12 U.S.C. 1815(a)(1)) is amended by 
striking ``trust funds (as defined in section 3(p)),'' and inserting 
``trust funds (as defined in section 3(p)) and is not a guaranteed 
depository institution,''.
    (e) Applicability of Insurance Logo Provisions.--Section 18(a) of 
the Federal Deposit Insurance Act (12 U.S.C. 1828(a)) is amended by 
adding at the end the following new paragraph:
            ``(4) Applicability to guaranteed institutions.--For 
        purposes of this subsection, the terms `insured bank' and 
        `insured savings association' shall be deemed to include any 
        bank (as defined in section 3(a) without regard to paragraph 
        (5) of such section) and any savings association (as defined in 
        section 3(b) without regard to paragraph (4) of such section) 
        which is a guaranteed depository institution.''.
    (f) Guaranteed Depository Institutions Not Exempt From Limitation 
on Insurance Underwriting.--Section 24(b) of the Federal Deposit 
Insurance Act (12 U.S.C. 1831a(b)) is amended by adding at the end the 
following new paragraph:
            ``(3) Applicability to guaranteed depository 
        institutions.--Notwithstanding section 3(a)(5), the term 
        `insured State bank' includes, for purposes of this subsection, 
        a State bank which is a guaranteed depository institution.''.

SEC. 206. AMENDMENTS TO OTHER BANKING LAWS.

    (a) Exemption From Depository Institution Management Interlocks 
Act.--Section 205 of the Depository Institution Management Interlocks 
Act (12 U.S.C. 3204) is amended by adding at the end the following new 
paragraph:
            ``(10) Guaranteed depository institution.--Any guaranteed 
        depository institution and any affiliate of such 
        institution.''.
    (b) Exemption From Real Estate Appraisal Requirements.--Section 
1121(4) of the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3350(4)) is amended to read as follows:
            ``(4) Federally related transaction.--The term `Federally 
        related transaction'--
                    ``(A) means any real estate-related financial 
                transaction which--
                            ``(i) a Federal financial institutions 
                        regulatory agency or the Resolution Trust 
                        Corporation engages in, contracts for, or 
                        regulates;
                            ``(ii) requires the services of an 
                        appraiser; and
                    ``(B) does not include any real estate-related 
                financial transaction which is regulated by a Federal 
                financial institutions regulatory agency solely by 
                reason of the involvement of a guaranteed depository 
                institution (as defined in section 101(a)(7) of the 
                Deposit Insurance Reform, Regulatory Modernization, and 
                Taxpayer Protection Act of 1996) in such 
                transaction.''.
    (c) Exemption From Payment System Requirements.--Subtitle A of 
title IV of the Federal Deposit Insurance Corporation Improvement Act 
of 1991 (12 U.S.C. 4401 et seq.) is amended by adding at the end the 
following new section:

``SEC. 408. EXEMPTION FOR GUARANTEED DEPOSITORY INSTITUTIONS.

    ``This subtitle shall not apply with respect to a depository 
institution which is a guaranteed depository institution (as defined in 
section 101(a)(7) of the Deposit Insurance Reform, Regulatory 
Modernization, and Taxpayer Protection Act of 1996).''.
    (d) Exemption From the International Lending Supervision Act of 
1983.--The last sentence of section 903(2) of the International Lending 
Supervision Act of 1983 (12 U.S.C. 3902(2)) is amended by inserting 
``or a guaranteed depository institution (as defined in section 
101(a)(7) of the Deposit Insurance Reform, Regulatory Modernization, 
and Taxpayer Protection Act of 1996)'' before the period.

         TITLE III--AMENDMENTS TO TITLE 11, UNITED STATES CODE

                 Subtitle A--Amendments to Chapter 1 of

                                Title 11

SEC. 301. DEFINITIONS.

    Section 101 of title 11, United States Code, is amended--
            (a) by adding new subsection (7A)--
            ``(7A) `company' means any corporation, partnership, 
        limited liability company, business trust, association, or 
        similar organization, but does not include a governmental 
        unit;'';
            (b) by adding new subsection (10A)--
            ``(10A) `cross-guarantee contract' means a contract which--
                    ``(A) is entered into between--
                            ``(i) one or more companies, at least one 
                        of which is a depository institution; and
                            ``(ii) a cross-guarantee syndicate;
                    ``(B) is approved by the regulation corporation 
                under section 123 of title I of this Act;
                    ``(C) has become effective in accordance with the 
                contract's terms; and
                    ``(D) is not enjoined under section 123(e)(2)(B) of 
                title I of this Act;'';
            (c) by adding new subsection (10B)--
            ``(10B) `cross-guarantee obligation' means an obligation of 
        a direct guarantor arising out of a cross-guarantee or stop-
        loss contract, and includes the obligations of such guarantor 
        under section 125(c)(2) of title I of this Act and sections 321 
        and 355 of this title;'';
            (d) by adding new subsection (10C)--
            ``(10C) `cross-guarantee premium payment' means the payment 
        a guaranteed company periodically makes to the guaranteed 
        company's direct guarantors under the terms of a cross-
        guarantee contract;'';
            (e) by adding new subsection (10D)--
            ``(10D) `cross-guarantee syndicate' means any group of 
        direct guarantors which has entered into a cross-guarantee 
        contract with one or more guaranteed companies;'';
            (f) by adding new subsection (13A)--
            ``(13A) `depository institution' has the meaning given to 
        such term in section 3(c)(1) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1813(c)(1)), however, for the purposes of this 
        title, depository institution shall not mean a Federal branch 
        or an insured branch as those terms are defined in sections 
        (3)(r) and (3)(s) of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(r) and (s));'';
            (g) by adding new subsection (13B)--
            ``(13B) `direct guarantor' means a member of a cross-
        guarantee or stop-loss syndicate which has entered into a 
        cross-guarantee or stop-loss contract with a guaranteed 
        party;'';
            (h) by adding new subsection (27A)--
            ``(27A) `guaranteed company' means any company which has 
        entered into a cross-guarantee contract with a cross-guarantee 
        syndicate and has guaranteed obligations outstanding as of the 
        date of the filing of the petition;'';
            (i) by adding new subsection (27B)--
            ``(27B) `guaranteed creditor' means any entity who owns or 
        is the beneficiary of a guaranteed obligation;'';
            (j) by adding new subsection (27C)--
            ``(27C) `guaranteed obligation' means an obligation of a 
        guaranteed party of which a cross-guarantee or stop-loss 
        syndicate has guaranteed performance, including the timely 
        payment of principal and interest, if a failure to perform in a 
        timely manner constitutes a breach of contract;'';
            (k) by adding new subsection (27D)--
            ``(27D) `guaranteed party' means any guaranteed company or 
        nondepository guarantor;'';
            (l) by adding new subsection (39A)--
            ``(39A) `monitoring fee payment' means the periodic payment 
        made by a guaranteed party to a syndicate agent under the terms 
        of the guaranteed party's cross-guarantee or stop-loss 
        contract;'';
            (m) by adding new subsection (40A)--D15/
            ``(40A) `nondepository guarantor' means any person or 
        company which has entered into a stop-loss contract with a 
        stop-loss syndicate;'';
            (n) by adding new subsection (44A)--
            ``(44A) `regulation corporation' means the Cross Guarantee 
        Regulation Corporation;'';
            (o) by adding new subsection (53E):
            ``(53E) `stop-loss contract' means a contract which--
                    ``(A) is entered into between a person or a company 
                and a stop-loss syndicate;
                    ``(B) is approved by the regulation corporation 
                under section 123 of title I of this Act;
                    ``(C) has become effective in accordance with the 
                contract's terms; and
                    ``(D) is not enjoined under section 123(e)(2)(B) of 
                title I of this Act;'';
            (p) by adding new subsection (53F)--
            ``(53F) `stop-loss premium payment' means the payment a 
        nondepository guarantor periodically makes to direct guarantors 
        under the nondepository guarantor's stop-loss contract;'';
            (q) by adding new subsection (53G)--
            ``(53G) `stop-loss syndicate' means any group of direct 
        guarantors which has entered into a stop-loss contract with a 
        nondepository guarantor;'';
            (r) by adding new subsection (53H)--
            ``(53H) `syndicate agent' means any person or company who 
        acts as the agent for the direct guarantors under any cross-
        guarantee or stop-loss contract;''.

SEC. 302. APPLICABILITY OF CHAPTERS.

    Section 103 of title 11, United States Code, is amended--
            (a) in subsection (a) by striking ``section 1161'' and 
        adding ``sections 1161 and 1181'';
            (b) by adding new subsection (h)--
    ``(h) Subchapter V of chapter 11 of this title applies only in a 
case under such chapter in which a guaranteed company is the debtor''; 
and
            (c) by redesignating subsections (h) and (i) as (i) and 
        (j).

SEC. 303. PUBLIC ACCESS TO PAPERS.

    Section 107 of title 11, United States Code, is amended--
            (a) in subsection (a) by striking ``subsection (b)'' and 
        inserting ``subsections (b) and (c)''; and
            (b) by adding new subsection (c)--
            ``(c) Notwithstanding subsection (a) of this section, the 
        identity of a guaranteed creditor and the amount of a 
        guaranteed creditor's claim in a case under subchapter V of 
        chapter 11 is not a matter of public record and shall be kept 
        confidential.''.

SEC. 304. WHO MAY BE A DEBTOR.

    Section 109 of title 11, United States Code, is amended--
            (a) in subsection (b)(2) by striking ``or'' from the end of 
        the subsection;
            (b) in subsection (b)(3) by striking ``.'' and adding ``; 
        or'' at the end of the subsection;
            (c) by adding new paragraph (b)(4)--
            ``(4) a guaranteed company.'';
            (d) in subsection (d) by striking ``and a railroad'' and 
        inserting ``a railroad, and a guaranteed company'';
            (e) by adding new subsection (h)--
    ``(h) A company must be a debtor under subchapter V of chapter 11 
if--
            ``(1) the company is a guaranteed company; or
            ``(2) the company would be a guaranteed company but for the 
        requirement that the company has guaranteed obligations 
        outstanding as of the date of the filing of the petition and 
after the date of the filing of the petition, the company incurs 
guaranteed obligations.''; and
            (f) by adding new subsection (i)--
    ``(i) Once a guaranteed company has become a debtor under 
subchapter V of chapter 11, it is not eligible for relief under any 
other subchapter of chapter 11 or under any other chapter in this 
title.''

            Subtitle B--Amendments to Chapter 3 of Title 11

SEC. 311. PARTY IN INTEREST.

    Title 11, United States Code, is amended by adding new section 
308--
``Sec. 308. Party in Interest
    ``(a) The regulation corporation shall be a party in interest in 
any action seeking to impair or limit the obligations or duties of the 
debtor or of a direct guarantor under a cross-guarantee or stop-loss 
contract.
    ``(b) A cross-guarantee or stop-loss syndicate shall be a party in 
interest for the purpose of filing objections to the allowance of a 
claim or interest as provided under section 502(a) of this title.
    ``(c) A cross-guarantee or stop-loss syndicate shall be a party in 
interest in any determination of whether a claim is a guaranteed 
obligation under a cross-guarantee or stop-loss contract in a case 
under subchapter V of chapter 11 of this title.''.

SEC. 312. QUALIFICATION OF TRUSTEE.

    Section 322 of title 11, United States Code, is amended--
            (a) in subsection (a) by inserting ``1183,'' after 
        ``1163,''; and
            (b) by adding new paragraph (b)(3)--
            ``(3) In a case under subchapter V of chapter 11, the 
        United States trustee shall consult with the syndicate agent 
        monitoring the debtor as of the date of the filing of the 
        petition and shall consider any existing bonds covering the 
        guaranteed company when determining the amount of the bond 
        required to be filed under subsection (a) of this section.''.

SEC. 313. NOTICE.

    Section 342 of title 11, United States Code, is amended by adding 
new subsection (d)--
    ``(d) Notwithstanding subsection (a) of this section, notice of the 
entry of an order for relief in a case under subchapter V of chapter 11 
shall be given by publication and shall be given in writing to the 
syndicate agent and to all creditors having claims that are not 
guaranteed obligations. Notice to the syndicate agent shall constitute 
notice to all guaranteed creditors in the case.''.

SEC. 314. MONEY OF ESTATES.

    Section 345 of title 11, United States Code, is amended in 
subsection (b) by inserting after the third usage of ``United States'' 
``or is guaranteed under a cross-guarantee contract.''.

SEC. 315. AUTOMATIC STAY.

    Section 362 of title 11, United States Code, is amended by adding 
new paragraph (b)(19):
            ``(19) under subsection (a) of this section, of the 
        exercise of any right of a guaranteed creditor under applicable 
        nonbankruptcy law to collect, enforce or recover a guaranteed 
        obligation from the debtor.''.

SEC. 316. EXECUTORY CONTRACTS AND UNEXPIRED LEASES.

    Section 365 of title 11, United States Code, is amended--
            (a) in subsection (a) by striking ``and (d)'' and inserting 
        ``(d), and (q)'';
            (b) in paragraph (e)(1), by inserting ``guaranteed 
        obligation,'' after the first usage of ``contract''; by 
        inserting ``, guaranteed obligation,'' after the second usage 
        of ``contract''; by striking ``or'' after the first usage of 
        ``terminated''; by inserting ``;'' after the first usage of 
        ``terminated''; by inserting ``or any liability thereunder 
        accelerated,'' after the first usage of ``modified,''; by 
        striking ``or'' after ``right''; by inserting ``;'' after 
        ``right''; by inserting ``, or liability'' after 
        ``obligation''; by inserting ``, guaranteed obligation,'' after 
        the third usage of ``contract''; by striking ``or'' after the 
        second usage of ``terminated''; by inserting ``;'' after the 
        second usage of ``terminated''; by inserting ``or accelerated'' 
after the second usage of ``modified,''; and by inserting ``, 
guaranteed obligation,'' after the fourth usage of ``contract'';
            (c) in subparagraph (e)(2)(B), by striking ``such contract 
        is a'' and inserting ``such contract is not a guaranteed 
        obligation but is some other'';
            (d) by adding a new subsection (p):
    ``(p) Notwithstanding subsection (c)(2) of this section, the 
trustee shall be deemed to have assumed as of the date of filing of the 
petition all cross-guarantee and stop-loss contracts to which the 
debtor is a party. The trustee shall immediately pay all cross-
guarantee premium payments, stop-loss premium payments, and monitoring 
fee payments due under any cross-guarantee or stop-loss contract so 
assumed. Any claim for a subsequent breach of the obligations under 
such contracts shall be entitled to priority under section 507(a)(1). 
The trustee shall not reject any cross-guarantee or stop-loss 
contract.''; and
            (e) in paragraph (f)(1) by inserting after ``Except as 
        provided in subsection (c) of this section'' the following to 
        complete the clause, ``and excluding those executory contracts 
        described in subsection (p)''.

            Subtitle C--Amendments to Chapter 5 of Title 11

SEC. 321. OBLIGATIONS OF DIRECT GUARANTORS.

    Title 11, United States Code, is amended by adding a new section 
511:
``Sec. 511. Obligations of Direct Guarantors
    ``The direct guarantors of a debtor shall pay to the trustee the 
amount by which losses accrued by the estate as a direct guarantor 
since the date the petition was filed exceed the cross-guarantee and 
stop-loss premiums the estate has accrued since that date. Such payment 
shall be received by the trustee on the effective date of a plan 
confirmed under section 1129 of this title or, in the case of a 
liquidation under section 1187 of this title, at the time of the 
transfer to an unrelated party or the termination of all of the 
estate's guaranteed obligations. The claim resulting from the amount 
paid by the direct guarantors in accordance with this subsection shall 
be subordinated to all other claims in the case for the purpose of 
distribution under this title.''.

SEC. 322. DEBTOR'S DUTIES.

    Section 521 of title 11, United States Code, is amended--
            (a) in paragraph (1) by inserting ``(a)'' at the beginning 
        of the paragraph; and
            (b) by adding new subparagraph (1)(b):
    ``(b) in a case under subchapter V of chapter 11 and subject to the 
requirement of subsection 107(c) of this title, file under seal the 
list of guaranteed creditors and the amount of the claims of the 
guaranteed creditors.''.

SEC. 323. EXCEPTIONS TO DISCHARGE.

    Section 523 of title 11, United States Code, is amended by adding 
new paragraph (a)(17):
            ``(17) which arises as a result of the debtor's cross-
        guarantee obligations.''.

SEC. 324. LIMITATION ON AVOIDING POWERS.

    Section 546 of title 11, United States Code, is amended--
            (a) by redesignating the second subsection (g) as 
        subsection (h); and
            (b) by adding new subsection (i):
    ``(i) Notwithstanding sections 544, 545, 547, and 548(a)(2) of this 
title, the trustee may not avoid a transfer that is a cross-guarantee 
premium payment, a stop-loss premium payment, or a monitoring fee 
payment made before the commencement of the case, except under section 
548(a)(1) of this title.''.

SEC. 325. PREFERENCES.

    Section 547 of title 11, United States Code, is amended by adding 
new subsection (h):
    ``(h) For the purposes of this section, a payment of a guaranteed 
obligation is deemed to be a payment of a debt incurred by the debtor 
in the ordinary course of business or financial affairs of the debtor 
and the transferee.''.

SEC. 326. FRAUDULENT TRANSFERS AND OBLIGATIONS.

    Section 548 of title 11, United States Code, is amended in 
paragraph (d)(2) by adding new subparagraph (E):
                    ``(E) A cross-guarantee syndicate or a syndicate 
                agent that receives a cross-guarantee premium payment, 
                a stop-loss premium payment, or a monitoring fee 
                payment takes for value to the extent of such 
                payment.''.

SEC. 327. POST-PETITION TRANSACTIONS.

    Section 549 of title 11, United States Code, is amended--
            (a) in subsection (a) by striking ``subsections (b) or 
        (c)'' and by inserting ``subsections (b), (c), or (d)'';
            (b) by adding new subsection (d)--
    ``(d) The trustee may not avoid under subsection (a) of this 
section a transfer of property to a transferee whose claim, in the 
absence of such transfer, would be guaranteed under a cross-guarantee 
or stop-loss contract''; and
            (c) by redesignating subsection (d) as subsection (e).

SEC. 328. CONTRACTUAL RIGHT TO LIQUIDATE A SECURITIES CONTRACT.

    Section 555 of title 11, United States Code, is amended--
            (a) by inserting ``(a)'' at the beginning of the section; 
        and
            (b) by adding new subsection (b)--
    ``(b) Subsection (a) of this section shall not apply in any case 
under subchapter V of chapter 11.''.

SEC. 329. CONTRACTUAL RIGHT TO LIQUIDATE A COMMODITIES CONTRACT OR 
              FORWARD CONTRACT.

    Section 556 of title 11, United States Code, is amended--
            (a) by inserting ``(a)'' at the beginning of the section; 
        and
            (b) by adding new subsection (b)--
    ``(b) Subsection (a) of this section shall not apply in any case 
under subchapter V of chapter 11.''.

SEC. 330. CONTRACTUAL RIGHT TO LIQUIDATE A REPURCHASE AGREEMENT.

    Section 559 of title 11, United States Code, is amended--
            (a) by inserting ``(a)'' at the beginning of the section; 
        and
            (b) by adding new subsection (b)--
    ``(b) Subsection (a) of this section shall not apply in any case 
under subchapter V of chapter 11.''.

SEC. 331. CONTRACTUAL RIGHT TO TERMINATE A SWAP AGREEMENT.

    Section 560 of title 11, United States Code, is amended--
            (a) by inserting ``(a)'' at the beginning of the section; 
        and
            (b) by adding new subsection (b)--
    ``(b) Subsection (a) of this section shall not apply in any case 
under subchapter V of chapter 11.''.

            Subtitle D--Amendments to Chapter 11 of Title 11

                 CHAPTER 1--AMENDMENTS TO EXISTING LAW

SEC. 341. CREDITORS' AND EQUITY SECURITY HOLDERS' COMMITTEES.

    Section 1102 of title 11, United States Code, is amended in 
paragraph (a)(1) by inserting at the end ``: Provided, however, That 
only creditors holding claims that are not guaranteed obligations under 
a cross-guarantee or stop-loss contract and are not direct guarantors 
may be appointed to such committee in a case under subchapter V of 
chapter 11''.

SEC. 342. WHO MAY FILE A PLAN.

    Section 1121 of title 11, United States Code, is amended by adding 
new subsection (f):
    ``(f) Notwithstanding subsection (c) of this section, a guaranteed 
creditor may not file a plan in a case under subchapter V of chapter 
11.''.

SEC. 343. IMPAIRMENT OF CLAIMS OR INTERESTS.

    Section 1124 of title 11, United States Code, is amended--
            (a) by inserting ``(a)'' at the beginning of the section; 
        and
            (b) by adding new subsection (b)--
    ``(b) Notwithstanding subsection (a) of this section, the claim of 
a guaranteed creditor is deemed to be unimpaired in a case under 
subchapter V of chapter 11.''.

SEC. 344. ACCEPTANCE OF PLAN.

    Section 1126 of title 11, United States Code, is amended in 
subsection (a) by inserting at the end of the first sentence:'', 
``provided, however, that a guaranteed creditor is not entitled to 
accept or reject a plan in a case under subchapter V of chapter 11''.

SEC. 345. CONFIRMATION HEARING.

    Section 1128 of title 11, United States Code, is amended in 
subsection (b) by inserting after ``A party in interest'':'', ``other 
than a guaranteed creditor in a case under subchapter V of chapter 
11,''.

SEC. 346. CONFIRMATION OF PLAN.

    Section 1129 of title 11, United States Code, is amended--
            (a) in paragraph (a)(4), by inserting at the end:'', 
        ``Provided, however, That no such approval of any payment by a 
        cross-guarantee or stop-loss syndicate is required when the 
        cross-guarantee or stop-loss syndicate is the proponent of the 
        plan and the payment is made pursuant to a cross-guarantee or 
        stop-loss contract''; and
            (b) by adding new subsection (e)--
    ``(e) Notwithstanding subsections (a) and (b) of this section, the 
court may confirm a plan that otherwise meets the requirements of 
subsection (a) and (b) of this section even though, in a case under 
subchapter V of chapter 11, a guaranteed creditor receives or retains 
no property under the plan.''.

SEC. 347. EFFECT OF CONFIRMATION.

    Section 1141 of title 11, United States Code, is amended--
            (a) in subsection (a) by striking ``(d)(2) and (d)(3)'' and 
        by inserting ``(d)(2), (d)(3), (d)(4), and (d)(5)'';
            (b) by inserting new paragraph (d)(4)--
            ``(4) Except as provided in subsection 365(k) of this 
        title, the confirmation of a plan does not discharge a 
        guaranteed company that is a debtor under subchapter V of 
        chapter 11 of this title from any debt arising out of a 
        guaranteed obligation'';
            (c) by inserting new paragraph (d)(5)--
            ``(5) Except as provided in section 365(k) of this title, 
        the confirmation of a plan does not discharge a debtor of its 
        obligations and liabilities as a direct guarantor under a 
        cross-guarantee or stop-loss contract''; and
            (d) by redesignating paragraph (d)(4) as (d)(6).

                  CHAPTER 2--ENACTMENT OF SUBCHAPTER V

SEC. 351. GUARANTEED COMPANY REORGANIZATION.

    Title 11, United States Code, is amended by adding a new subchapter 
V:

          ``Subchapter V--Guaranteed Company Reorganization''.

SEC. 352. INAPPLICABILITY OF OTHER SECTIONS.

    Title 11, United States Code, is amended by adding new section 
1181:
    ``Sec. 1181. Inapplicability of other sections
    ``Sections 341, 343, 1104, 1105, and 1107 do not apply in a case 
under subchapter V of chapter 11.''.

SEC. 353. EFFECTIVE DATE OF FILING.

    Title 11, United States Code, is amended by adding new section 
1182:
``Sec. 1182. Effective date of filing
    ``The effective date and time of the filing of a petition under 
this subchapter shall be the close of business on the business day 
preceding the date on which the petition is actually filed.''.

SEC. 354. APPOINTMENT OF TRUSTEE.

    Title 11, United States Code, is amended by adding new section 
1183:
``Sec. 1183. Appointment of trustee
    ``As soon as practicable after the entry of an order for relief, 
the regulation corporation shall submit to the United States Trustee a 
list of five disinterested persons who are qualified and willing to 
serve as the trustee in the case. The United States Trustee shall 
appoint one such person to serve as the trustee in the case. Neither 
the syndicate agent monitoring the debtor as of the date of the filing 
of the petition nor a governmental unit or the employee of a 
governmental unit shall be eligible to serve as the trustee.''.

SEC. 355. LIABILITY OF DIRECT GUARANTORS FOR TRANSFERS TO GUARANTEED 
              CREDITORS.

    Title 11, United States Code, is amended by adding new section 
1184:
``Sec. 1184. Liability of direct guarantors for transfers to guaranteed 
              creditors
    ``The trustee may recover for the benefit of all guaranteed 
creditors from the direct guarantors of the debtor the amount of any 
transfers of property of the estate to or for the benefit of guaranteed 
creditors that enable such creditors to receive more than such 
creditors would receive if the trustee was engaged in a liquidation 
pursuant to section 1187 of this chapter and such transfers had not 
been made.''.

SEC. 356. REPLACEMENT OR MODIFICATION OF CROSS-GUARANTEE CONTRACT.

    Title 11, United States Code, is amended by adding new section 
1185:
``Sec. 1185. Replacement or modification of cross-guarantee contract
    ``Prior to the debtor filing any application with the regulation 
corporation for approval of any replacement cross-guarantee contract or 
for the approval of any modification of the debtor's existing cross-
guarantee contract, the debtor must obtain the approval of the court to 
enter into such replacement contract or to modify such existing 
contract.''.

SEC. 357. EFFECT OF FEDERAL, STATE, AND LOCAL LEGISLATION AND 
              REGULATIONS.

    Title 11, United States Code, is amended by adding new section 
1186:
``Sec. 1186. Effect of Federal, State, and local legislation and 
              regulations
    ``(a) Except with respect to merger, modification of the financial 
structure of the debtor, or the issuance or sale of securities under a 
plan, the trustee and the debtor are subject to all Federal, State, and 
local legislation, regulations and orders to the same extent as the 
debtor would be if a petition commencing the case under this chapter 
had not been filed.
    ``(b) Notwithstanding subsection (a) of this section, neither 
Federal receivership law, State receivership law, nor any laws 
prohibiting the enforcement of an agreement that is not contained in 
the records of a debtor under this subchapter, including sections 
212(a) and 217(4) of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 1821(d)(9)(A) and 1823(e)), shall be 
applicable.
    ``(c) Notwithstanding any State or Federal law, depositors in a 
guaranteed company that is a debtor under this subsection shall not 
receive any preference in distribution under this title over other 
creditors.''.

SEC. 358. LIQUIDATION.

    Title 11, United States Code, is amended by adding new section 
1187:
``Sec. 1187. Liquidation
    ``On request of a party in interest and after notice and a hearing, 
the court may order the trustee to cease the debtor's operation and to 
collect and reduce to money all of the property of the estate in the 
same manner as if the case were a case under chapter 7 of this title if 
such liquidation is in the best interest of creditors.''.

          TITLE IV--AMENDMENT TO TITLE 28, UNITED STATES CODE

SEC. 401. VENUE.

    Title 28, United States Code, is amended by adding new subsection 
1409(f):
    ``(f) A proceeding arising in or related to a case under subchapter 
V of chapter 11 of title 11 regarding the debtor's satisfaction of a 
guaranteed obligation, whether arising before or after the commencement 
of the case, may be commenced in the district court for the district 
where the State or Federal court sits in which the party commencing 
such proceeding may, under applicable non-bankruptcy venue provisions, 
have brought an action on such claim, or in the district court in which 
such case is pending. The cross-guarantee syndicate which has entered 
into a cross-guarantee contract in such a case shall be a party in 
interest in any proceeding commenced under this subsection.''.
                                 <all>