§5232 — Title 12 Banks and Banking | U.S. Code

Summary

Require that the costs of buying troubled assets, guaranteeing them, and any related cash flows be worked out under the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et seq.). Under section 502(5) of that Act, the discount rate used to calculate those costs must be changed to reflect market risk. If a troubled asset or its guarantee is modified, the cost of that change is the difference between two current estimates: one for the asset or guarantee as it was, and one for it as modified, both using the market-risk–adjusted discount rate.

Title 12, §5232

Banks and Banking — Source: USLM XML via OLRC

(a)Subject to subsection (b), the costs of purchases of troubled assets made under section 5211(a) of this title and guarantees of troubled assets under section 5212 of this title, and any cash flows associated with the activities authorized in section 5212 of this title and subsections (a), (b), and (c) of section 5216 of this title shall be determined as provided under the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et.11 So in original. seq.).

(b)For the purposes of section 502(5) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))—

(1)the cost of troubled assets and guarantees of troubled assets shall be calculated by adjusting the discount rate in section 502(5)(E) (2 U.S.C. 661a(5)(E)) for market risks; and

(2)the cost of a modification of a troubled asset or guarantee of a troubled asset shall be the difference between the current estimate consistent with paragraph (1) under the terms of the troubled asset or guarantee of the troubled asset and the current estimate consistent with paragraph (1) under the terms of the troubled asset or guarantee of the troubled asset, as modified.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Federal Credit Reform Act of 1990, referred to in subsec. (a), is title V of Pub. L. 93–344, as added by Pub. L. 101–508, title XIII, § 13201(a), Nov. 5, 1990, 104 Stat. 1388–609, which is classified generally to subchapter III (§ 661 et seq.) of chapter 17A of Title 2, The Congress. For complete classification of this Act to the Code, see

Short Title

note set out under section 621 of Title 2 and Tables.

§5232 Credit reform