§1455 Obligations and Securities of the Corporation

Summary

Lets the Corporation borrow money, give security, pay interest, and issue notes, bonds, mortgage-backed and other securities on terms it sets. Its obligations stay valid even if the people who signed them later die, become disabled, or leave office. The Corporation can limit or create liens or charges on its property, including property it later acquires, and those liens can be floating. Those limits, liens, and charges can say how they rank and can be enforced in the U.S. District Court for the District of Columbia or any district where the property is located, with process served anywhere under U.S. jurisdiction. The Secretary of the Treasury may buy the Corporation’s obligations using public-debt proceeds, but may not raise the Treasury’s holdings under that authority above $2,250,000,000. The Secretary must set a rate of return based on the average marketable U.S. rate as of the last day of the month before purchase, may later sell what was bought, and all such buys and sales count as public debt transactions. The section’s rules and any liens or restrictions work even if other laws or sovereign-immunity rules would say otherwise. People, trusts, or organizations that may hold U.S. obligations may also buy, hold, and invest in the Corporation’s mortgages and securities to the same extent, unless a State after December 21, 1979, specifically names the Corporation and limits that authority; that extra buy/hold authority expired June 30, 1985 (but earlier contracts stay valid). The Corporation may issue nonvoting preferred stock. Its securities (except those guaranteed that are backed by mortgages the Corporation did not buy) are treated like direct U.S. obligations for securities-law purposes. The Corporation may not guarantee mortgage-backed securities that are backed by mortgages it did not buy, and all its obligations must say they are not guaranteed by the United States and are not U.S. debt. No U.S. agency may charge fees on the Corporation’s buying, selling, pledging, issuing, guaranteeing, or redeeming of mortgages or securities except fees under sections 1452(c) and 1455(c) and assessments under section 4516. The Secretary must approve issuance of unsecured notes, debentures, and certain mortgage-backed securities; approvals already in place on August 9, 1989 are treated as approved for short- and long-term issues but expire 365 days (for 1 year or less) or 60 days (for more than 1 year) after that date. The Secretary has broader authority to buy the Corporation’s obligations with the Corporation’s agreement to preserve market stability, avoid mortgage-finance disruption, and protect taxpayers; the Secretary must consider protections such as payment priorities, limits on maturities and dispositions, plans to return to private funding, repayment chances, keeping private shareholder status, and limits on dividends and executive pay, and must report to specified House and Senate committees. The Secretary may exercise rights from purchases, sell what was bought, and must put sale proceeds into the Treasury’s General Fund for deficit reduction. The Secretary may use proceeds from the sale of securities under chapter 31 of Title 31 for these purchases, and funds used count as appropriated when spent. The broader purchase authority (except parts about exercising rights and using chapter 31 proceeds) expired December 31, 2009. The Director may approve, disapprove, or change the Corporation’s executive compensation as defined under Regulation S‑K.