§ 4403. Bilateral netting

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1991

   Federal Deposit Insurance Corporation Improvement Act of 1991

   Pub. L. 102–242 title IV § 403 · 105 Stat. 2236

   Enacted · 12 U.S.C. § 4403

   Pub. L. 102–242, title IV, § 403, Dec. 19, 1991, 105 Stat. 2374

   Source evidence

   Code source credit
   Pub. L. 102–242, title IV, § 403, Dec. 19, 1991, 105 Stat. 2374

   Enacted provision · exact public law section
   SEC. 403. BILATERAL NETTING. (a) General Rule.— Notwithstanding any other provision of law, the covered contractual payment obligations and the covered contractual payment entitlements between any 2 financial institutions shall be netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract. (b) Limitation on Obligation To Make Payment.— The only obligation, if any, of a financial institution to make payment with respect to covered contractual payment obligations to another financial institution shall be equal to its net obligation to such other financial institution, and no such obligation shall exist if there is no net obligation. (c) Limitation on Right To Receive Payment.— The only right, if any, of a financial institution to receive payments with respect to covered contractual payment entitlements from another financial institution shall be equal to its net entitlement with respect to such other financial institution, and no such right shall exist if there is no net entitlement. (d) Payment of Net Entitlement of Failed Financial Institution.— The net entitlement of any failed financial institution, if any, shall be paid to the failed financial institution in accordance with, and subject to the conditions of, the applicable netting contract. (e) Effectiveness Notwithstanding Status as Financial Institution.— This section shall be given effect notwithstanding that a financial institution is a failed financial institution.

2. 2005

   Pub. L. 109–8 § 906(b)(1) · 119 Stat. 23

   1. Added · 12 U.S.C. § 4403(a)

      Pub. L. 109–8, § 906(b)(1), added subsec. (a)

   2. Struck · 12 U.S.C. § 4403(a)

      Pub. L. 109–8, § 906(b)(1), struck out heading and text of former subsec. (a). Text read as follows: “Notwithstanding any other provision of law, the covered contractual payment obligations and the covered contractual payment entitlements between any 2 financial institutions shall be netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract.”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 109–8, § 906(b)(1), added subsec. (a) and struck out heading and text of former subsec. (a). Text read as follows: “Notwithstanding any other provision of law, the covered contractual payment obligations and the covered contractual payment entitlements between any 2 financial institutions shall be netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract.”

   Enacted provision · exact public law section
   (1) by striking subsection (a) and inserting the following: “(a) General Rule.— Notwithstanding any other provision of State or Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal Deposit Insurance Act, paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) of the Federal Credit Union Act, or any order authorized under section 5(b)(2) of the Securities Investor Protection Act of 1970), the covered contractual payment obligations and the covered contractual payment entitlements between any 2 financial institutions shall be netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract (except as provided in section 561(b)(2) of title 11, United States Code).” ; and

3. 2005

   Pub. L. 109–8 § 906(b)(2) · 119 Stat. 23

   Added · 12 U.S.C. § 4403(f)

   Pub. L. 109–8, § 906(b)(2), added subsec. (f)

   Source evidence

   Code amendment note
   Subsec. (f). Pub. L. 109–8, § 906(b)(2), added subsec. (f).

   Enacted provision · exact public law section
   (2) by adding at the end the following new subsection: “(f) Enforceability of Security Agreements.— The provisions of any security agreement or arrangement or other credit enhancement related to one or more netting contracts between any 2 financial institutions shall be enforceable in accordance with their terms (except as provided in section 561(b)(2) of title 11, United States Code), and shall not be stayed, avoided, or otherwise limited by any State or Federal law (other than paragraphs (8)(E), (8)(F), and (10)(B) of section 11(e) of the Federal Deposit Insurance Act, paragraphs (8)(E), (8)(F), and (10)(B) of section 207(c) of the Federal Credit Union Act, and section 5(b)(2) of the Securities Investor Protection Act of 1970).” .

4. 2006

   Financial Netting Improvements Act of 2006

   Pub. L. 109–390 § 4(a) · 120 Stat. 2692

   Struck and inserted · 12 U.S.C. § 4403(a)

   Pub. L. 109–390 struck out “paragraphs (8)(E), (8)(F), and (10)(B) of” before “section 1821(e)” and “section 1787(c)” and inserted “terminated, liquidated, accelerated, and” after “institutions shall be”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 109–390 struck out “paragraphs (8)(E), (8)(F), and (10)(B) of” before “section 1821(e)” and “section 1787(c)” and inserted “terminated, liquidated, accelerated, and” after “institutions shall be”.

   Enacted provision · exact public law section
   (a) Enforceability of Bilateral Netting Contracts.— Section 403 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4403) is amended— (1) in each of subsections (a) and (f), by striking “paragraphs (8)(E), (8)(F), and (10)(B) of” each place such term appears; and (2) in subsection (a), by inserting “terminated, liquidated, accelerated, and” after “institutions shall be”.

5. 2006

   Financial Netting Improvements Act of 2006

   Pub. L. 109–390 § 4(a)(1) · 120 Stat. 2692

   Struck · 12 U.S.C. § 4403(f)

   Pub. L. 109–390, § 4(a)(1), struck out “paragraphs (8)(E), (8)(F), and (10)(B) of” before “section 1821(e)” and “section 1787(c)”

   Source evidence

   Code amendment note
   Subsec. (f). Pub. L. 109–390, § 4(a)(1), struck out “paragraphs (8)(E), (8)(F), and (10)(B) of” before “section 1821(e)” and “section 1787(c)”.

   Enacted provision · exact public law section
   (1) in each of subsections (a) and (f), by striking “paragraphs (8)(E), (8)(F), and (10)(B) of” each place such term appears; and

6. 2010

   Dodd-Frank Wall Street Reform and Consumer Protection Act

   Pub. L. 111–203 title II § 211(c) · 124 Stat. 1376

   Inserted · 12 U.S.C. § 4403(a)

   Pub. L. 111–203 inserted “section 5390(c) of this title, section 4617 of this title,” after “section 1821(e) of this title,”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 111–203 inserted “section 5390(c) of this title, section 4617 of this title,” after “section 1821(e) of this title,”.

   Enacted provision · exact public law section
   (c) Federal Deposit Insurance Corporation Improvement Act of 1991.— Section 403(a) of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4403(a)) is amended by inserting “section 210(c) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617(d)),” after “section 11(e) of the Federal Deposit Insurance Act,”.

   Effective date note
   Amendment by Pub. L. 111–203 effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of this title.

7 of 7 references resolved to an enrolled provision