[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3052 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3052

To address the establishment and maintenance of the Systemic Resolution 
   Fund of the Federal Deposit Insurance Corporation, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 1, 2010

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

_______________________________________________________________________

                                 A BILL


 
To address the establishment and maintenance of the Systemic Resolution 
   Fund of the Federal Deposit Insurance Corporation, 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 ``Ending Taxpayer Bailouts by Making 
Wall Street Pay Act of 2010''.

SEC. 2. DEFINITIONS.

    In this Act--
            (1) the term ``Corporation'' means the Federal Deposit 
        Insurance Corporation;
            (2) the term ``Fund'' means the Systemic Resolution Fund 
        established under this Act;
            (3) the terms ``financial company'' and ``covered financial 
        company'' have the same meanings as in section 2 of the 
        Restoring American Financial Stability Act of 2010; and
            (4) the term ``off-balance-sheet activity'' includes--
                    (A) any contractual arrangement to which an 
                unconsolidated entity is a party, under which the 
                registrant has--
                            (i) any obligation under certain guarantee 
                        contracts;
                            (ii) a retained or contingent interest in 
                        assets transferred to an unconsolidated entity 
                        or similar arrangement that serves as credit, 
                        liquidity, or market risk support to that 
                        entity for such assets;
                            (iii) any obligation under certain 
                        derivative instruments; and
                            (iv) any obligation under a material 
                        variable interest held by the registrant in an 
                        unconsolidated entity that provides financing, 
                        liquidity, market risk, or credit risk support 
                        to the registrant, or engages in leasing, 
                        hedging, or research and development services 
                        with the registrant; and
                    (B) transactions that are or involve--
                            (i) direct credit substitutes, in which a 
                        bank substitutes its own credit for a third 
                        party, including standby letters of credit;
                            (ii) irrevocable letters of credit that 
                        guarantee repayment of commercial paper or tax-
                        exempt securities;
                            (iii) risk participations in bankers' 
                        acceptances;
                            (iv) sale and repurchase agreements;
                            (v) asset sales with recourse against the 
                        seller;
                            (vi) interest rate swaps;
                            (vii) credit swaps;
                            (viii) commodity contracts;
                            (ix) forward contracts;
                            (x) securities contracts;
                            (xi) lease obligations, including 
                        obligations from synthetic leases;
                            (xii) obligations existing in an investment 
                        accounted for by the equity method;
                            (xiii) obligations arising from structured 
                        investment vehicles; and
                            (xiv) such other activities or transactions 
                        as the Agency may, by rule, define.

SEC. 3. SYSTEMIC RESOLUTION FUND.

    (a) Establishment.--There is established the Systemic Resolution 
Fund, which the Corporation shall--
            (1) maintain and administer;
            (2) use to facilitate the resolution of a covered financial 
        company, as provided in subsection (b), or take such other 
        actions as are authorized for the Corporation; and
            (3) invest in accordance with section 13(a) of the Federal 
        Deposit Insurance Act.
    (b) Uses of the Fund.--The Fund shall be available to the 
Corporation for use with respect to a covered financial company--
            (1) to cover the costs incurred by the Corporation, 
        including as receiver, in exercising its rights, authorities, 
        and powers and fulfilling its obligations and responsibilities;
            (2) to repay initial capitalization appropriations under 
        this section; and
            (3) to cover the costs of systemic stabilization purposes.
    (c) Prohibitions.--Notwithstanding any other provision of law 
amounts in the Fund may not be used to convert or maintain a financial 
company that is insolvent or in receivership, except to the extent 
necessary to insure systemic stabilization in the resolution of such 
financial company.
    (d) Deposits to the Fund.--All amounts assessed against a financial 
company under this section shall be deposited into the Fund.

SEC. 4. ASSESSMENTS.

    (a) Minimum Size of the Fund.--The Corporation shall, by rule, 
establish the minimum size of the Fund, consistent with subsections (a) 
and (b), but amounts maintained in the Fund shall in no case exceed an 
amount equal to 1 percent of the gross domestic product of the United 
States.
    (b) Assessments To Maintain Fund.--The Corporation shall impose 
assessments on financial companies in such amounts and in such manner, 
and subject to such terms and conditions as the Corporation, by 
regulation, determines are necessary for the amount in the Fund to be 
maintained at not less than the minimum size established pursuant to 
subsection (a).
    (c) Assessments To Replenish the Fund.--If the Fund falls below the 
minimum size established pursuant to subsection (a) the Corporation 
shall impose assessments on financial companies, in such amounts and 
such manner, and subject to consideration of the factors set forth in 
subsection (e), as are necessary for the Fund to meet or exceed the 
minimum size established pursuant to subsection (a) before the end of 
the 8-year period beginning on the date on which the Fund first fell 
below the minimum amount (or such longer period as the Corporation may 
determine to be necessary due to extraordinary circumstances).
    (d) Minimum Assessment Threshold.--The Corporation may not impose 
an assessment under this subsection on any financial company that the 
Corporation determines does not pose a systemic risk to the United 
States financial system.
    (e) Reallocation Required.--The Corporation shall, by rule, 
establish a mechanism whereby the systemic risk regulator reallocates 
the assessments for the fund annually among all the systemically risky 
financial companies, to include the authority to refund contributions, 
as necessary or appropriate in the determination of the Corporation.
    (f) Factors for Consideration.--In taking actions and making 
determinations under this subsection, the Corporation shall seek to 
prevent sharp swings in the assessment rates for financial companies, 
and shall take into account--
            (1) the actual or expected risk of losses to the Fund;
            (2) economic conditions generally affecting financial 
        companies, so as to allow assessments and the Fund to increase 
        during more favorable conditions and to decrease during less 
        favorable economic conditions;
            (3) any assessments imposed on a financial company or a 
        subsidiary or affiliate of a financial company that is--
                    (A) an insured depository institution, subject to 
                assessments under section 7 or 13(c)(4)(G) of the 
                Federal Deposit Insurance Act;
                    (B) a member of the Securities Investor Protection 
                Corporation, subject to assessments under section 4 of 
                the Securities Investor Protection Act of 1970; or
                    (C) an insurance company, subject to assessments 
                pursuant to applicable State law to cover (or reimburse 
                payments made to cover) the costs of the 
                rehabilitation, liquidation, or other State insolvency 
                proceeding with respect to one or more insurance 
                companies;
            (4) the risks presented by the financial company to the 
        financial system and the extent to which the financial company 
        has, or likely would, benefit from the resolution of a 
        financial company;
            (5) any off-balance-sheet activities of the financial 
        company; and
            (6) such other factors as the Corporation may determine to 
        be appropriate.
    (g) Permissible Distinctions for Assessments.--In establishing the 
assessment system for the Fund, the Corporation, by regulation, may 
differentiate among financial companies based on size, complexity of 
operations or organization, relationships, transactions, direct or 
indirect activities, and any other factors that the Corporation may 
deem appropriate.
    (h) Initial Capitalization.--There are authorized to be 
appropriated to the Secretary, for fiscal years 2010 and 2011, such 
sums as may be necessary to initially capitalize the Fund in accordance 
with this section.
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