§1783 — Title 12 Banks and Banking | U.S. Code

Summary

Creates a National Credit Union Share Insurance Fund in the U.S. Treasury to be used as a working fund for the agency. Money in the fund can be requested by the Board at any time, with no fiscal year limit, to pay insurance claims under section 1787, to help when insured credit unions are being closed or might be closed, and to pay related administrative expenses. All deposits, insurance premiums, exam fees, and penalties collected under this law must go into the fund. The Board must report each year to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives about the fund’s operating level and include an independent audit. The Board may have the Treasury invest unused parts of the fund in U.S. government or similarly guaranteed securities, and any income from those investments becomes part of the fund. If the Board decides the fund needs a loan, the Treasury must lend money so long as total loans do not exceed $6,000,000,000 outstanding at any one time, on terms set by the Board and the Treasury. Interest on such loans is paid back to the Treasury each year and is calculated from the average yield of marketable U.S. public debt with five years or less to maturity using daily September quotations from the prior fiscal year, rounded to the nearest one-eighth of 1 percent. Loans and repayments count as public debt transactions. From May 20, 2009, through December 31, 2010, that $6,000,000,000 limit could be raised, up to $30,000,000,000, if the Board (by a two-thirds vote), the Federal Reserve Board (by a two-thirds vote), and the Secretary of the Treasury (with the President) agree it is needed; if raised, the Board must quickly report to the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services explaining why. While any Treasury loans remain unpaid, the Board must at least once a year check for any excess fund balance and pay any excess to the Treasury to reduce the loans. The fund may also borrow from the National Credit Union Administration Central Liquidity Facility.

Title 12, §1783

Banks and Banking — Source: USLM XML via OLRC

(a)There is hereby created in the Treasury of the United States a National Credit Union Share Insurance Fund which shall be used by the Board as a revolving fund for carrying out the purposes of this subchapter. Money in the fund shall be available upon requisition by the Board, without fiscal year limitation, for making payments of insurance under section 1787 of this title, for providing assistance and making expenditures under section 1788 of this title in connection with the liquidation or threatened liquidation of insured credit unions, and for such administrative and other expenses incurred in carrying out the purposes of this subchapter as it may determine to be proper.

(b)All deposits and premium charges for insurance paid pursuant to the provisions of section 1782 of this title and all fees for examinations and all penalties collected by the Board under any provision of this subchapter shall be deposited in the National Credit Union Share Insurance Fund. The Board shall report annually to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives with respect to the operating level of the fund. Such report shall also include the results of an independent audit of the fund.

(c)The Board may authorize the Secretary of the Treasury to invest and reinvest such portions of the fund as the Board may determine are not needed for current operations in any interest-bearing securities of the United States or in any securities guaranteed as to both principal and interest by the United States or in bonds or other obligations which are lawful investments for fiduciary, trust, and public funds of the United States, and the income therefrom shall constitute a part of the fund.

(d)(1)If, in the judgment of the Board, a loan to the insurance fund, or to the stabilization fund described in section 1790e of this title, is required at any time for purposes of this subchapter,11 See References in Text note below. the Secretary of the Treasury shall make the loan, but loans under this paragraph shall not exceed in the aggregate $6,000,000,000 outstanding at any one time. Except as otherwise provided in this subsection, section 1790e of this title, and in subsection (e) of this section, each loan under this paragraph shall be made on such terms as may be fixed by agreement between the Board and the Secretary of the Treasury.

(2)Interest shall accrue to the Treasury on the amount of any outstanding loans made to the fund pursuant to paragraph (1) of this subsection on the basis of the average daily amount of such outstanding loans determined at the close of each fiscal year with respect to such year, and the Board shall pay the interest so accruing into the Treasury as miscellaneous receipts annually from the fund. The Secretary of the Treasury shall determine the applicable interest rate in advance by calculating the average yield to maturity (on the basis of daily closing market bid quotations during the month of September of the preceding fiscal year) on outstanding marketable public debt obligations of the United States having a maturity date of five or less years from the first day of such month of September and by adjusting such yield to the nearest one-eighth of 1 per centum.

(3)For the purpose of making loans under paragraph (1) of this subsection, the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds of the sale of any securities issued under chapter 31 of title 31, and the purposes for which securities may be issued under chapter 31 of title 31 are hereby extended to include such loans. All loans and repayments under this section shall be treated as public debt transactions of the United States.

(4)(A)During the period beginning on May 20, 2009, and ending on December 31, 2010, if, upon the written recommendation of the Board (upon a vote of not less than two-thirds of the members of the Board) and the Board of Governors of the Federal Reserve System (upon a vote of not less than two-thirds of the members of such Board), the Secretary of the Treasury (in consultation with the President) determines that additional amounts above the $6,000,000,000 amount specified in paragraph (1) are necessary, such amount shall be increased to the amount so determined to be necessary, not to exceed $30,000,000,000.

(B)If the borrowing authority of the Board is increased above $6,000,000,000 pursuant to subparagraph (A), the Board shall promptly submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing the reasons and need for the additional borrowing authority and its intended uses.

(e)So long as any loans to the fund are outstanding, the Board shall from time to time, not less often than annually, determine whether the balance in the fund is in excess of the amount which, in its judgment, is needed to meet the requirements of the fund and shall pay such excess to the Secretary of the Treasury, to be credited against the loans to the fund.

(f)In addition to the authority to borrow from the Secretary of the Treasury provided in subsection (d), if in the judgment of the Board, a loan to the fund is required at any time for carrying out the purposes of this subchapter, the fund is authorized to borrow from the National Credit Union Administration Central Liquidity Facility.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This subchapter, referred to in subsec. (d)(1), probably should have been a reference to this title in the original, meaning title II of act June 26, 1934, ch. 750, which is classified generally to this subchapter. Codification In subsec. (d)(3), “chapter 31 of title 31” substituted for “the Second Liberty Bond Act, as amended” on authority of Pub. L. 97–258, § 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which enacted Title 31, Money and Finance.

Amendments

2009—Subsec. (d)(1). Pub. L. 111–22, § 204(c)(2), amended par. (1) generally. Prior to amendment, par. (1) read as follows: “If, in the judgment of the Board, a loan to the fund is required at any time for carrying out the purposes of this subchapter, the Secretary of the Treasury shall make the loan, but loans under this paragraph shall not exceed in the aggregate $100,000,000 outstanding at any one time. Except as otherwise provided in this subsection and in subsection (e) of this section, each loan under this paragraph shall be made on such terms as may be fixed by agreement between the Board and the Secretary of the Treasury.” Subsec. (d)(4). Pub. L. 111–22, § 204(c)(3), added par. (4). 1984—Subsec. (b). Pub. L. 98–369 inserted “deposits and” and provisions relating to annual reporting requirements by the Board. 1982—Subsec. (f). Pub. L. 97–320 added subsec. (f). 1978—Pub. L. 95–630 substituted “Board” for “Administrator” wherever appearing and “it” and “its” for “he” and “his”, respectively, where appropriate. 1976—Subsec. (d)(2). Pub. L. 94–273 substituted “September” for “June” wherever appearing.

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.

Effective Date

of 1978 AmendmentAmendment by Pub. L. 95–630 effective on expiration of 120 days after Nov. 10, 1978, and transitional provisions, see section 509 of Pub. L. 95–630, set out as a note under section 1752 of this title.

§1783 National Credit Union Share Insurance Fund