§2279aa–13 — Title 12 Banks and Banking | U.S. Code

Summary

Allows the Corporation to sell IOUs to the Secretary of the Treasury so the Corporation can get money only to pay for guarantee losses. The sale is allowed only if earlier limits are met and the Corporation certifies that those limits are met and that the money is needed. After the Corporation gives that certification, the Secretary must buy enough IOUs within 10 business days to cover the Corporation’s guarantee obligations. The Secretary cannot hold more than $1,500,000,000 of those IOUs at any time. Each IOU will earn interest at a rate the Secretary sets, using the average rate on U.S. marketable debt as of the last day of the previous month as a guide. The Corporation must buy back the IOUs within a reasonable time. The Treasury may sell government securities to get the cash for these purchases, and all such transactions count as public debt operations. Up to $1,500,000,000 is authorized to be appropriated to the Secretary, with no fiscal year limit, to carry out these purposes.

Title 12, §2279aa–13

Banks and Banking — Source: USLM XML via OLRC

(a)(1)Subject to the limitations contained in section 2279aa–10(c) of this title and the requirement of paragraph (2), the Corporation may issue obligations to the Secretary of the Treasury the proceeds of which may be used by the Corporation solely for the purpose of fulfilling the obligations of the Corporation under any guarantee provided by the Corporation under this subchapter.

(2)The Secretary of the Treasury may purchase obligations of the Corporation under paragraph (1) only if the Corporation certifies to the Secretary that—

(A)the requirements of section 2279aa–10(c) of this title have been fulfilled; and

(B)the proceeds of the sale of such obligations are needed to fulfill the obligations of the Corporation under any guarantee provided by the Corporation under this subchapter.

(b)Not later than 10 business days after receipt by the Secretary of the Treasury of any certification by the Corporation under subsection (a)(2), the Secretary of the Treasury shall purchase obligations issued by the Corporation in an amount determined by the Corporation to be sufficient to meet the guarantee liabilities of the Corporation.

(c)The aggregate amount of obligations issued by the Corporation under subsection (a)(1) which may be held by the Secretary of the Treasury at any time (as determined by the Secretary) shall not exceed $1,500,000,000.

(d)(1)Each obligation purchased by the Secretary of the Treasury shall bear interest at a rate determined by the Secretary, taking into consideration the average rate on outstanding marketable obligations of the United States as of the last day of the last calendar month ending before the date of the purchase of such obligation.

(2)The Secretary of the Treasury shall require that such obligations be repurchased by the Corporation within a reasonable time.

(e)(1)For the purpose of purchasing obligations of the Corporation, the Secretary of the Treasury may use as a public debt transaction the proceeds from the sale by the Secretary of any securities issued under chapter 31 of title 31, and the purposes for which securities may be issued under such chapter are extended to include such purchases.

(2)All purchases and sales by the Secretary of the Treasury of obligations issued by the Corporation under this section shall be treated as public debt transactions of the United States.

(f)There is authorized to be appropriated to the Secretary of the Treasury $1,500,000,000, without fiscal year limitation, to carry out the purposes of this subchapter.

Editorial Notes

Amendments

1996—Subsec. (a). Pub. L. 104–105 substituted “section” for “section 2279aa–6(b) and” in pars. (1) and (2)(A).

§2279aa–13 Authority to issue obligations to cover guarantee losses of Corporation

Summary

Title 12, §2279aa–13

Notes & Related Subsidiaries

Editorial Notes

Amendments

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