[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2847 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 2847

  To amend the Federal Home Loan Bank Act to allow Federal home loan 
   banks to invest surplus funds in student loan securities and make 
      advances for student loan financing, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 10, 2008

   Mr. Kerry introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
  To amend the Federal Home Loan Bank Act to allow Federal home loan 
   banks to invest surplus funds in student loan securities and make 
      advances for student loan financing, 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.

    This Act may be cited as the ``Emergency Student Loan Market 
Liquidity Act''.

SEC. 2. EMERGENCY STUDENT LOAN MARKET LIQUIDITY.

    The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is 
amended--
            (1) by redesignating section 30 as section 31; and
            (2) by inserting after section 29, the following new 
        section:

``SEC. 30. EMERGENCY AUTHORITY.

    ``(a) Investment of Surplus.--Such part of the assets of each 
Federal home loan bank (except reserves and amounts provided for in 
subsection (g) of section 11) as are not required for advances to 
members, may be invested in student loan-related securities in addition 
to the other investments described in subsection (h) of such section.
    ``(b) Collateral.--For purposes of section 10(a)(3), the following 
shall be considered eligible collateral in addition to the other 
categories of eligible collateral described in such section:
            ``(1) Student loan-related securities.
            ``(2) Student loans.
    ``(c) Long-Term Advances.--Notwithstanding section 10(a)(2), any 
Federal home loan bank may make secured long-term advances upon 
sufficient collateral for purposes of providing funds to any member for 
financing the origination of student loans or the purchase or financing 
of student loan-related securities.
    ``(d) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Student loan-related security.--The term `student 
        loan-related security' means a security that--
                    ``(A) is rated in 1 of the 3 highest rating 
                categories (without regard to any refinement or 
                gradation of such rating category by a numerical 
                modifier or otherwise) by at least one nationally 
                recognized statistical rating organization; and
                    ``(B) is described in at least 1 of the following 
                clauses:
                            ``(i) Represents an interest in student 
                        loans.
                            ``(ii) Is a bond, note or other obligation 
                        payable from and secured by an interest in 
                        student loans.
                            ``(iii) Is a bond, note or other obligation 
                        that--
                                    ``(I) is part of an issue of 
                                securities issued for the purpose of 
                                providing funds to purchase or 
                                originate student loans; and
                                    ``(II) will be payable from and 
                                secured by an interest in such student 
                                loans.
            ``(2) Interest in student loans.--The term `interest in 
        student loans' includes ownership rights in, or certificates of 
        interest or participation interests in, such student loans or 
        the promissory notes evidencing such student loans and rights 
        designated to assure servicing of such promissory notes, or the 
        receipt or timely receipt of amounts payable and under such 
        promissory notes or the timely distribution thereof to the 
        holders of such interest.
            ``(3) Student loan.--The term `student loan' means any loan 
        made under subtitle B of title IV of the Higher Education Act 
        of 1965 (whether to a student, the parents of a student, or a 
        consolidating borrower).
    ``(e) Temporary Nature of Relief.--
            ``(1) Effective period.--Except as provided in paragraph 
        (2), this section shall be effective for investments and 
        advances made between February 1, 2008, and the end of the 2-
        year period beginning on the date of the enactment of the 
        Emergency Student Loan Market Liquidity Act.
            ``(2) Exception.--Notwithstanding the expiration of the 
        effective period of this section--
                    ``(A) any investment by any Federal home loan bank 
                under subsection (a) in any student loan-related 
                security shall remain an authorized investment of such 
                bank through the maturity of such security; and
                    ``(B) any student loan-related securities or 
                student loans held by any Federal home loan bank as 
                collateral under subsection (b) for an advance to a 
                member under subsection (c) may continue to be held by 
                the bank as security until the advance matures or is 
                otherwise repaid or extinguished.''.
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