12 U.S.C. § 2279aa–10: Funding for guarantee…

Summary

The Corporation must guarantee securities that are backed by pools of qualified loans. When it makes a guarantee, it can charge the certified facility an initial fee of not more than 1/2 of 1 percent of the pool’s initial principal. Starting in the second year after the guarantee, it can charge an annual fee of up to 1/2 of 1 percent of the principal still in the pool. The Corporation must set these fees based on the risk it takes and on an actuarially sound basis. The Comptroller General may review and report on the fees. The Corporation must put the needed part of those fees into a separate reserve account to pay for losses from its guarantees. The Corporation cannot issue obligations to the Secretary of the Treasury to meet guarantee obligations until that reserve is used up. The Corporation may also charge reasonable fees to cover its administrative costs.

Title 12, §2279aa–10

Banks and Banking, Source: USLM XML via OLRC

(a)Guarantee

The Corporation shall provide guarantees for securities representing interests in, or obligations backed by, pools of qualified loans through commitments issued by the Corporation providing for guarantees.

(b)Guarantee fees

(1)Initial fee

At the time a guarantee is issued by the Corporation, the Corporation shall assess the certified facility a fee of not more than ½ of 1 percent of the initial principal amount of each pool of qualified loans.

(2)Annual fees

Beginning in the second year after the date the guarantee is issued under paragraph (1), the Corporation may, at the end of each year, assess the certified facility an annual fee of not more than ½ of 1 percent of the principal amount of the loans then constituting the pool.

(3)Determination of amount

The Corporation shall establish such fees on the amount of risk incurred by the Corporation in providing the guarantees with respect to which such fee is assessed, as determined by the Corporation. Fees assessed under paragraphs (1) and (2) shall be established on an actuarially sound basis.

(4)Review by GAO

The Comptroller General of the United States may review, and submit to the Congress a report regarding, the actuarial soundness and reasonableness of the fees established by the Corporation under this subsection.

(c)Corporation reserve against guarantees losses required

(1)In general

So much of the fees assessed under this section as the Board determines to be necessary shall be set aside by the Corporation in a segregated account as a reserve against losses arising out of the guarantee activities of the Corporation.

(2)Exhaustion of reserve required

The Corporation may not issue obligations to the Secretary of the Treasury under section 2279aa–13 of this title in order to meet the obligations of the Corporation with respect to any guarantees provided under this subchapter until the reserve established under paragraph (1) has been exhausted.

(d)Fees to cover administrative costs authorized

The Corporation may impose charges or fees in reasonable amounts in connection with the administration of its activities under this subchapter to recover its costs for performing such administration.

Editorial Notes

Amendments

1996—Subsec. (b)(4). Pub. L. 104–316 substituted “Review” for “Annual review” in heading and “may review” for “shall annually review” in text.

§2279aa–10 Funding for Guarantee; Reserves of Corporation

Summary

Title 12, §2279aa–10

Notes & Related Subsidiaries

Editorial Notes

Amendments

Citations & Metadata