§5611 — Title 12 Banks and Banking | U.S. Code

Summary

The Secretary can ask the Corporation and the Board of Governors to decide if a “liquidity event” is happening and if the guarantee program under section 5612 should be used. Any decision must be written and explain the evidence showing: a liquidity event exists; failing to act would seriously hurt U.S. financial stability or the economy; and actions under section 5612 are needed to avoid or reduce those harms. If both the Corporation and the Board each approve the decision by at least two-thirds of their current members, and the Secretary gives written consent, the Corporation must act under section 5612(a) and the Secretary, after consulting the President, must act under section 5612(c). These steps can go forward even if other Federal or State laws say otherwise. The Secretary must keep the written record, give it to the Comptroller General for review and reporting to Congress on the basis and likely effects, and notify the Senate Banking Committee and House Financial Services Committee in writing either when a submission to Congress under section 5612(c) is made or within 30 days of the decision, whichever comes first.

Title 12, §5611

Banks and Banking — Source: USLM XML via OLRC

(a)(1)The Secretary may request the Corporation and the Board of Governors to determine whether a liquidity event exists that warrants use of the guarantee program authorized under section 5612 of this title.

(2)Any determination pursuant to paragraph (1) shall—

(A)be written; and

(B)contain an evaluation of the evidence that—

(i)a liquidity event exists;

(ii)failure to take action would have serious adverse effects on financial stability or economic conditions in the United States; and

(iii)actions authorized under section 5612 of this title are needed to avoid or mitigate potential adverse effects on the United States financial system or economic conditions.

(b)Notwithstanding any other provision of Federal or State law, upon the determination of both the Corporation (upon a vote of not fewer than ⅔ of the members of the Corporation then serving) and the Board of Governors (upon a vote of not fewer than ⅔ of the members of the Board of Governors then serving) under subsection (a) that a liquidity event exists that warrants use of the guarantee program authorized under section 5612 of this title, and with the written consent of the Secretary—

(1)the Corporation shall take action in accordance with section 5612(a) of this title; and

(2)the Secretary (in consultation with the President) shall take action in accordance with section 5612(c) of this title.

(c)(1)The Secretary shall—

(A)maintain the written documentation of each determination of the Corporation and the Board of Governors under this section; and

(B)provide the documentation for review under paragraph (2).

(2)The Comptroller General of the United States shall review and report to Congress on any determination of the Corporation and the Board of Governors under subsection (a), including—

(A)the basis for the determination; and

(B)the likely effect of the actions taken.

(d)On the earlier of the date of a submission made to Congress under section 5612(c) of this title, or within 30 days of the date of a determination under subsection (a), the Secretary shall provide written notice of the determination of the Corporation and the Board of Governors to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, including a description of the basis for the determination.

Statutory Notes and Related Subsidiaries

Effective Date

Subchapter effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as a note under section 5301 of this title.

§5611 Liquidity event determination

Summary

Title 12, §5611

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Citations & Metadata