[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2660 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 2660

 To amend the Federal Deposit Insurance Act to require the appropriate 
  Federal banking agencies to prescribe capital standards for certain 
                       special purpose entities.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 2, 2009

 Mr. Ellison introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To amend the Federal Deposit Insurance Act to require the appropriate 
  Federal banking agencies to prescribe capital standards for certain 
                       special purpose entities.

    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 ``Regulatory Capital Enhancement Act 
of 2009''.

SEC. 2. REGULATION OF SPECIAL PURPOSE ENTITIES.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended by inserting after section 38 the following new section:

``SEC. 38A CAPITAL STANDARDS FOR CERTAIN SPECIAL PURPOSE ENTITIES.

    ``(a) In General.--Each appropriate Federal banking agency shall 
prescribe capital standards, including a leverage limit and a risk-
based capital requirement, for special purpose entities, or similar 
types of vehicles or entities, that are sponsored by insured depository 
institutions regulated by such agency. Such capital standards shall 
conform, to the extent practicable, with the capital standards 
prescribed for such institution under section 38(c).
    ``(b) Additional Measures.--An appropriate Federal banking agency 
may, by regulation, establish any additional relevant capital measures 
for special purpose entities, or similar types of vehicles or entities, 
that are sponsored by insured depository institutions that such agency 
determines necessary to guard against the risk that such special 
purpose entities, or similar types of vehicles or entities, become 
undercapitalized.
    ``(c) Determination of Sponsorship.--For purposes of subsection 
(a), a special purpose entity, or similar type of vehicle or entity, is 
sponsored by an insured depository institution if the finances of the 
special purpose entity, or similar type of vehicle or entity, and the 
insured depository institution are intertwined such that the failure of 
the special purpose entity, or similar type of vehicle or entity, would 
have a significant impact on the insured depository institution.
    ``(d) Special Purpose Entity Defined.--The appropriate Federal 
banking agencies shall jointly define the term `special purpose entity' 
for purposes of this section. In defining such term, the appropriate 
Federal banking agencies shall focus on trusts and other legal entities 
established by or for an insured depository institution to fulfill 
narrow, specific, or temporary objectives, including--
            ``(1) the holding of financial assets transferred during a 
        securitization process;
            ``(2) issuing applicable securities representing claims on 
        such assets;
            ``(3) receiving and reinvesting cash flows from such 
        assets; and
            ``(4) distributing proceeds to holders of the 
        securities.''.
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