Depositor Protection Act of 2009

Depositor Protection Act of 2009 - Amends the Federal Deposit Insurance Act to limit the authority of the Federal Deposit Insurance Corporation (FDIC) to engage in activities relating to systemic risk without a congressional declaration of a financial emergency.

Requires an Act of Congress to declare that severe financial conditions exist, threatening the stability of a significant number of insured depository institutions or of insured depository institutions possessing significant financial resources, before the FDIC may exercise its existing authority to engage in certain transactions with an insured depository institution in order to lessen the risk to the FDIC posed by the institution under such threat of instability.

Declares that FDIC authority to borrow from the Treasury amounts "required for insurance purposes" shall not be construed as authorizing the FDIC to borrow any amount for purposes of funding any action taken under this Act.

[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2657 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 2657

 To amend the Federal Deposit Insurance Act to limit the authority of 
   the Federal Deposit Insurance Corporation to engage in activities 
  relating to systemic risk without a congressional declaration of a 
              financial emergency, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 2, 2009

 Mr. Capuano introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To amend the Federal Deposit Insurance Act to limit the authority of 
   the Federal Deposit Insurance Corporation to engage in activities 
  relating to systemic risk without a congressional declaration of a 
              financial emergency, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Depositor Protection Act of 2009''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) The Federal Deposit Insurance Corporation was 
        established in 1933 with the explicit authority and mission to 
        insure and guarantee the deposits of all its member banks and, 
        since 1989, savings associations.
            (2) The Public-Private Investment Program for Legacy Assets 
        was established by the Secretary of the Treasury, in 
        conjunction with the Board of Governors of the Federal Reserve 
        System and the Federal Deposit Insurance Corporation.
            (3) As it is not the mission of the Public-Private 
        Investment Program for Legacy Assets to protect the deposits of 
        the insured depository institutions that are insured by the 
        Federal Deposit Insurance Corporation, such Corporation has no 
        purpose for participating in the Program.

SEC. 3. CLARIFICATION THAT OPEN INSTITUTION ASSISTANCE ON THE BASIS OF 
              SYSTEM RISK REQUIRES A CONGRESSIONAL DECLARATION OF A 
              FINANCIAL EMERGENCY.

    (a) In General.--Subparagraph (C) of section 13(c)(1) of the 
Federal Deposit Insurance Act (12 U.S.C. 1823(c)(1)(C)) is amended by 
inserting ``an Act of Congress has declared (for the specific exercise 
of authority by the Corporation under this subparagraph) that, for a 
period (or after a date) specified in such Act,'' after ``if, when''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply as of the date of the enactment of this Act to any exercise of 
any authority by the Federal Deposit Insurance Corporation under 
section 13(c)(1)(C) of the Federal Deposit Insurance Act regardless of 
any action taken by the Corporation before such date but shall not 
require the Corporation to dispose of any asset acquired under such 
provision of law before such date.

SEC. 4. CLARIFICATION OF LIMITATION ON LINE OF CREDIT.

    The authority under section 14(a) of the Federal Deposit Insurance 
Act for the Federal Deposit Insurance Corporation to borrow from the 
Treasury amounts ``required for insurance purposes'' shall not be 
construed as authorizing the Corporation to borrow from the Treasury 
any amount for purposes of funding any action taken by the Corporation 
under section 13(c)(1)(C) of such Act.
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