[Congressional Record Volume 151, Number 163 (Saturday, December 17, 2005)]
[Senate]
[Pages S13966-S13968]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                FEDERAL DEPOSIT INSURANCE ACT AMENDMENTS

  Mr. FRIST. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of S. 2141 introduced earlier 
today.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 2141) to make improvements to the Federal 
     Deposit Insurance Act.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. FRIST. Mr. President, I ask unanimous consent that the bill be 
read a third time and passed, the motion to reconsider be laid upon the 
table, and any statement related to the bill be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 2141) was read the third time and passed, as follows:

                                S. 2141

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

[[Page S13967]]

     SECTION. 1. TREATMENT OF CERTAIN AGREEMENTS BY CONSERVATORS 
                   OR RECEIVERS OF DEPOSITORY INSTITUTIONS.

       (a) Definition of Securities Contract.--
       (1) FDIC-insured depository institutions.--Section 
     11(e)(8)(D)(ii) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(ii)) is amended--
       (A) in subclause (I)--
       (i) by striking ``mortgage loan, or'' and inserting 
     ``mortgage loan,''; and
       (ii) by inserting before the semicolon ``(whether or not 
     such repurchase or reverse repurchase transaction is a 
     `repurchase agreement', as defined in clause (v))'';
       (B) in subclause (IV)--
       (i) by inserting ``(including by novation)'' after ``the 
     guarantee''; and
       (ii) by inserting before the semicolon ``(whether or not 
     such settlement is in connection with any agreement or 
     transaction referred to in subclauses (I) through (XII) 
     (other than subclause (II))'';
       (C) in subclause (IX), by striking ``or (VIII)'' each place 
     that term appears and inserting ``(VIII), (IX), or (X)'';
       (D) by redesignating subclauses (VI) through (X) as 
     subclauses (VIII) through (XII), respectively; and
       (E) by inserting after subclause (V) the following:

       ``(VI) means any extension of credit for the clearance or 
     settlement of securities transactions;
       ``(VII) means any loan transaction coupled with a 
     securities collar transaction, any prepaid securities forward 
     transaction, or any total return swap transaction coupled 
     with a securities sale transaction;''.

       (2) Insured credit unions.--Section 207(c)(8)(D)(ii) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(ii)) is 
     amended--
       (A) in subclause (I)--
       (i) by striking ``mortgage loan, or'' and inserting 
     ``mortgage loan,''; and
       (ii) by inserting before the semicolon ``(whether or not 
     such repurchase or reverse repurchase transaction is a 
     `repurchase agreement', as defined in clause (v))'';
       (B) in subclause (IV)--
       (i) by inserting ``(including by novation)'' after ``the 
     guarantee''; and
       (ii) by inserting before the semicolon ``(whether or not 
     such settlement is in connection with any agreement or 
     transaction referred to in subclauses (I) through (XII) 
     (other than subclause (II))'';
       (C) in subclause (IX), by striking ``or (VIII)'' each place 
     that term appears and inserting ``(VIII), (IX), or (X)'';
       (D) by redesignating subclauses (VI) through (X) as 
     subclauses (VIII) through (XII), respectively; and
       (E) by inserting after subclause (V) the following:

       ``(VI) means any extension of credit for the clearance or 
     settlement of securities transactions;
       ``(VII) means any loan transaction coupled with a 
     securities collar transaction, any prepaid securities forward 
     transaction, or any total return swap transaction coupled 
     with a securities sale transaction;''.

       (b) Definition of Forward Contract.--Section 
     11(e)(8)(D)(iv)(I) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(iv)(I)) is amended by striking 
     ``transaction, reverse repurchase transaction'' and inserting 
     ``or reverse repurchase transaction (whether or not such 
     repurchase or reverse repurchase transaction is a `repurchase 
     agreement', as defined in clause (v))''.
       (c) Definition of Swap Agreement.--
       (1) FDIC-insured depository institutions.--Section 
     11(e)(8)(D)(vi) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)(8)(D)(vi)) is amended--
       (A) in subclause (I)--
       (i) by striking ``or precious metals'' and inserting ``, 
     precious metals, or other commodity''; and
       (ii) by striking ``or a weather swap, weather derivative, 
     or weather option'' and inserting ``weather swap, option, 
     future, or forward agreement; an emissions swap, option, 
     future, or forward agreement; or an inflation swap, option, 
     future, or forward agreement'';
       (B) in subclause (II)--
       (i) by inserting ``or other derivatives'' after ``dealings 
     in the swap''; and
       (ii) by striking ``future, or option'' and inserting 
     ``future, option, or spot transaction''; and
       (C) by striking ``the Securities Act of 1933, the 
     Securities Exchange Act of 1934, the Public Utility Holding 
     Company Act of 1935, the Trust Indenture Act of 1939, the 
     Investment Company Act of 1940, the Investment Advisers Act 
     of 1940, the Securities Investor Protection Act of 1970, the 
     Commodity Exchange Act, the Gramm-Leach-Bliley Act, and the 
     Legal Certainty for Bank Products Act of 2000'' and inserting 
     ``the Gramm-Leach-Bliley Act, the Legal Certainty for Bank 
     Products Act of 2000, the securities laws (as that term is 
     defined in section 3(a)(47) of the Securities Exchange Act of 
     1934) and the Commodity Exchange Act''.
       (2) Insured credit unions.--Section 207(c)(8)(D)(vi) of the 
     Federal Credit Union Act (12 U.S.C. 1787(c)(8)(D)(vi)) is 
     amended--
       (A) in subclause (I)--
       (i) by striking ``or precious metals'' and inserting ``, 
     precious metals, or other commodity''; and
       (ii) by striking ``or a weather swap, weather derivative, 
     or weather option'' and inserting ``weather swap, option, 
     future, or forward agreement; an emissions swap, option, 
     future, or forward agreement; or an inflation swap, option, 
     future, or forward agreement'';
       (B) in subclause (II)--
       (i) by inserting ``or other derivatives'' after ``dealings 
     in the swap''; and
       (ii) by striking ``future, or option'' and inserting 
     ``future, option, or spot transaction''; and
       (C) by striking ``the Securities Act of 1933, the 
     Securities Exchange Act of 1934, the Public Utility Holding 
     Company Act of 1935, the Trust Indenture Act of 1939, the 
     Investment Company Act of 1940, the Investment Advisers Act 
     of 1940, the Securities Investor Protection Act of 1970, the 
     Commodity Exchange Act, the Gramm-Leach-Bliley Act, and the 
     Legal Certainty for Bank Products Act of 2000'' and inserting 
     ``the Gramm-Leach-Bliley Act, the Legal Certainty for Bank 
     Products Act of 2000, the securities laws (as that term is 
     defined in section 3(a)(47) of the Securities Exchange Act of 
     1934) and the Commodity Exchange Act''.

     SEC. 2. CLARIFYING AMENDMENTS RELATING TO DEFINITION OF 
                   PERSON.

       (a) FDIC-Insured Depository Institutions Definition of 
     Person.--Section 11(e)(8)(D) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1821(e)(8)(D)) is amended by adding at the end 
     the following:
       ``(ix) Person.--The term `person' includes any governmental 
     entity and any entity included in the definition of the term 
     `person' in section 1 of title 1, United States Code.''.
       (b) Insured Credit Unions definition of person.--Section 
     207(c)(8)(D) of the Federal Credit Union Act (12 U.S.C. 
     1787(c)(8)(D)) is amended by adding at the end the following:
       ``(vii) Person.--The term `person' includes any 
     governmental entity and any entity included in the definition 
     of the term `person' in section 1 of title 1, United States 
     Code.''.

     SEC. 3. FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT 
                   OF 1991.

       (a) Enforceability of Bilateral Netting Contracts.--Section 
     403 of the Federal Deposit Insurance Corporation Improvement 
     Act of 1991 (12 U.S.C. 4403) is amended--
       (1) in each of subsections (a) and (f), by striking 
     ``paragraphs (8)(E), (8)(F), and (10)(B) of'' each place that 
     term appears; and
       (2) in subsection (a), by inserting ``terminated, 
     liquidated, accelerated, and'' after ``institutions shall 
     be''.
       (b) Enforceability of Clearing Organization Netting 
     Contracts.--Section 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 (12 U.S.C. 4404) is 
     amended--
       (1) in each of subsections (a) and (h), by striking 
     ``paragraphs (8)(E), (8)(F), and (10)(B) of'' each place that 
     term appears; and
       (2) in subsection (a), by inserting ``terminated, 
     liquidated, accelerated, and'' after ``organization shall 
     be''.

     SEC. 4. CONFORMING AMENDMENTS.

       (a) Clarifying Definitions.--Title 11, United States Code, 
     is amended--
       (1) in section 101--
       (A) in paragraph (22)(A)--
       (i) by striking ``(domestic or foreign)'' after ``an 
     entity''; and
       (ii) by inserting ``(whether or not a `customer', as 
     defined in section 741)'' after ``custodian for a customer'';
       (B) in paragraph (22A)--
       (i) by striking ``on any day during the previous 15-month 
     period'' each place it appears and inserting ``at such time 
     or on any day during the 15-month period preceding the date 
     of the filing of the petition''; and
       (ii) by inserting ``(aggregated across counterparties)'' 
     after ``principal amount outstanding'';
       (C) in paragraph (25)(A)--
       (i) by inserting ``, as defined in section 761'' after 
     ``commodity contract''; and
       (ii) by striking ``repurchase transaction, reverse 
     repurchase transaction,'' and inserting ``repurchase or 
     reverse repurchase transaction (whether or not such 
     repurchase or reverse repurchase transaction is a `repurchase 
     agreement', as defined in this section)'';
       (D) in paragraph (53B)(A)--
       (i) in clause (i)--

       (I) in subclause (II), by striking ``or precious metals'' 
     and inserting ``, precious metals, or other commodity 
     agreement'';
       (II) in subclause (VII), by striking ``or'' at the end;
       (III) in subclause (VIII), by striking ``weather 
     derivative, or weather option'' and inserting ``option, 
     future, or forward agreement''; and
       (IV) by adding at the end the following:
       ``(IX) an emissions swap, option, future, or forward 
     agreement; or
       ``(X) an inflation swap, option, future, or forward 
     agreement;''; and

       (ii) in clause (ii)--

       (I) in subclause (I), by inserting ``or other derivatives'' 
     after ``dealings in the swap''; and
       (II) in subclause (II), by striking ``future, or option'' 
     and inserting ``future, option, or spot transaction''; and

       (E) in paragraph (53B)(B), by striking ``the Securities Act 
     of 1933, the Securities Exchange Act of 1934, the Public 
     Utility Holding Company Act of 1935, the Trust Indenture Act 
     of 1939, the Investment Company Act of 1940, the Investment 
     Advisers Act of 1940, the Securities Investor Protection Act 
     of 1970, the Commodity Exchange Act, the Gramm-Leach-Bliley 
     Act, and the Legal Certainty for Bank Products Act of 2000'' 
     and inserting ``the Gramm-Leach-Bliley Act, the Legal 
     Certainty for Bank Products Act of 2000, the securities laws 
     (as that term is defined in

[[Page S13968]]

     section 3(a)(47) of the Securities Exchange Act of 1934) and 
     the Commodity Exchange Act'';
       (2) in section 362(b)--
       (A) by striking paragraphs (6) and (7) and inserting the 
     following:
       ``(6) under subsection (a) of this section, of the exercise 
     by a commodity broker, forward contract merchant, 
     stockbroker, financial institution, financial participant, or 
     securities clearing agency of any contractual right (as 
     defined in section 555 or 556) under any security agreement 
     or arrangement or other credit enhancement forming a part of 
     or related to any commodity contract, forward contract or 
     securities contract, or of any contractual right (as defined 
     in section 555 or 556) to offset or net out any termination 
     value, payment amount, or other transfer obligation arising 
     under or in connection with 1 or more such contracts, 
     including any master agreement for such contracts;
       ``(7) under subsection (a) of this section, of the exercise 
     by a repo participant or financial participant of any 
     contractual right (as defined in section 559) under any 
     security agreement or arrangement or other credit enhancement 
     forming a part of or related to any repurchase agreement, or 
     of any contractual right (as defined in section 559) to 
     offset or net out any termination value, payment amount, or 
     other transfer obligation arising under or in connection with 
     1 or more such agreements, including any master agreement for 
     such agreements;'';
       (B) by striking paragraph (17) and inserting the following:
       ``(17) under subsection (a) of this section, of the 
     exercise by a swap participant or financial participant of 
     any contractual right (as defined in section 560) under any 
     security agreement or arrangement or other credit enhancement 
     forming a part of or related to any swap agreement, or of any 
     contractual right (as defined in section 560) to offset or 
     net out any termination value, payment amount, or other 
     transfer obligation arising under or in connection with 1 or 
     more such agreements, including any master agreement for such 
     agreements;''; and
       (C) by striking paragraph (27) and inserting the following:
       ``(27) under subsection (a) of this section, of the 
     exercise by a master netting agreement participant of any 
     contractual right (as defined in section 555, 556, 559, or 
     560) under any security agreement or arrangement or other 
     credit enhancement forming a part of or related to any master 
     netting agreement, or of any contractual right (as defined in 
     section 555, 556, 559, or 560) to offset or net out any 
     termination value, payment amount, or other transfer 
     obligation arising under or in connection with 1 or more such 
     master netting agreements to the extent that such participant 
     is eligible to exercise such rights under paragraph (6), (7), 
     or (17) for each individual contract covered by the master 
     netting agreement in issue; and''; and
       (3) in section 741(7)(A)--
       (A) in clause (i)--
       (i) by striking ``mortgage loan or'' and inserting 
     ``mortgage loan,''; and
       (ii) by inserting before the semicolon ``(whether or not 
     such repurchase or reverse repurchase transaction is a 
     `repurchase agreement', as defined in section 101)'';
       (B) in clause (iii)--
       (i) by inserting ``(including by novation)'' after ``the 
     guarantee''; and
       (ii) by inserting before the semicolon ``(whether or not 
     such settlement is in connection with any agreement or 
     transaction referred to in clauses (i) through (xi))'';
       (C) in clause (viii), by striking ``or (vii)'' each place 
     it appears and inserting ``(vii), (viii), or (ix)'';
       (D) by redesignating clauses (v) through (ix) as clauses 
     (vii) through (xi), respectively; and
       (E) by inserting after clause (iv) the following:

       ``(v) any extension of credit for the clearance or 
     settlement of securities transactions;
       ``(vi) any loan transaction coupled with a securities 
     collar transaction, any prepaid forward securities 
     transaction, or any total return swap transaction coupled 
     with a securities sale transaction;''.

       (b) Limitation of Avoidance Powers Under Master Netting 
     Agreement.--Section 546 of title 11, United States Code, is 
     amended--
       (1) in subsection (e)--
       (A) by inserting ``(or for the benefit of)'' before ``a 
     commodity broker''; and
       (B) by inserting ``or that is a transfer made by or to (or 
     for the benefit of) a commodity broker, forward contract 
     merchant, stockbroker, financial institution, financial 
     participant, or securities clearing agency, in connection 
     with a securities contract, as defined in section 741(7), 
     commodity contract, as defined in section 761(4), or forward 
     contract,'' after ``securities clearing agency,'';
       (2) in subsection (f)--
       (A) by striking ``that is a margin payment, as defined in 
     section 741 or 761 of this title, or settlement payment, as 
     defined in section 741 of this title,''; and
       (B) by inserting ``(or for the benefit of)'' before ``a 
     repo participant'';
       (3) in subsection (g), by inserting ``(or for the benefit 
     of)'' before ``a swap participant''; and
       (4) in subsection (j), by inserting ``(or for the benefit 
     of)'' after ``made by or to''.
       (c) SIPC Stay.--Section 5(b)(2)(C)(iii) of the Securities 
     Investor Protection Act of 1970 (15 U.S.C. 
     78eee(b)(2)(C)(iii)) is amended--
       (1) by inserting ``a derivatives clearing organization (as 
     defined in the Commodity Exchange Act), a multilateral 
     clearing organization (as defined in the Federal Deposit 
     Insurance Corporation Improvement Act of 1991),'' after 
     ``rule or bylaw of''; and
       (2) by striking ``or a securities clearance agency, a right 
     set forth in a bylaw of a clearing organization or contract 
     market'' and inserting ``a securities clearing agency, a 
     contract market designated under the Commodity Exchange Act, 
     a derivatives transaction execution facility registered under 
     the Commodity Exchange Act, or a board of trade (as defined 
     in the Commodity Exchange Act),''.
       (d) Savings Clause.--Title IX of the Bankruptcy Abuse 
     Prevention and Consumer Protection Act of 2005 (Public Law 
     109-8, 119 Stat. 146) is amended by adding at the end the 
     following:

     ``SEC. 912. SAVINGS CLAUSE.

       ``The meanings of terms used in this title are applicable 
     for the purposes of this title only, and shall not be 
     construed or applied so as to challenge or affect the 
     characterization, definition, or treatment of any similar 
     terms under any other statute, regulation, or rule, including 
     the Gramm-Leach-Bliley Act, the Legal Certainty for Bank 
     Products Act of 2000, the securities laws (as that term is 
     defined in section 3(a)(47) of the Securities Exchange Act of 
     1934), and the Commodity Exchange Act.''.

     SEC. 5. WALKAWAY CLAUSES.

       Section 11(e)(8)(G)) of the Federal Deposit Insurance Act 
     (12 U.S.C. 1821(e)(8)(G)) is amended to read as follows:
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable in a qualified 
     financial contract of an insured depository institution in 
     default, provided that any payment or delivery obligations 
     otherwise due from a party pursuant to the qualified 
     financial contract shall be suspended from the time that the 
     receiver is appointed until the earlier of--

       ``(I) the time that such party receives notice that such 
     contract has been transferred pursuant to subparagraph (A); 
     or
       ``(II) 5:00 p.m. (eastern time) on the business day 
     following the date of the appointment of the receiver.

       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means any provision 
     in a qualified financial contract that suspends, conditions, 
     or extinguishes a payment obligation of a party in whole or 
     in part or does not create a payment obligation of a party 
     that would otherwise exist solely because of such party's 
     status as a nondefaulting party in connection with the 
     insured depository institution's insolvency or the 
     appointment of or the exercise of rights or powers by a 
     conservator or receiver, and not as a result of a party's 
     exercise of any right to offset, setoff, or net obligations 
     that exist under the contract, any other contract between 
     those parties, or applicable law.''.

     SEC. 6. EFFECTIVE DATE.

       (a) Effective date.--This Act and the amendments made by 
     this Act shall take effect on the date of enactment of this 
     Act.
       (b) No retroactive application of amendments.--The 
     amendments made by this Act shall not apply to any cases 
     commenced under title 11, United States Code, or appointments 
     made under any Federal or State law, before the effective 
     date of this Act.

     

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