NONDISCHARGE OF DEBTS IN FEDERAL BANKRUPTCY INVOLVING OBLIGATIONS ARISING FROM A BREACH OF FIDUCIARY DUTY; DISALLOWING USE OF BANKRUPTCY TO EVADE COMMITMENTS TO MAINTAIN THE CAPITAL OF A FEDERALLY INSURED DEPOSITORY INSTITUTION OR TO EVADE CIVIL OR CRIMINAL LIABILITY.

SEC. 2522. NONDISCHARGE OF DEBTS IN FEDERAL BANKRUPTCY INVOLVING OBLIGATIONS ARISING FROM A BREACH OF FIDUCIARY DUTY; DISALLOWING USE OF BANKRUPTCY TO EVADE COMMITMENTS TO MAINTAIN THE CAPITAL OF A FEDERALLY INSURED DEPOSITORY INSTITUTION OR TO EVADE CIVIL OR CRIMINAL LIABILITY. (a) Exception To Discharge in General.— Section 523 of title 11, United States Code, is amended— (1) in subsection (a) by— (A) striking “or” at the end of paragraph (9); (B) striking the period at the end of paragraph (10) and inserting a semicolon; and 104 STAT. 4866 (C) adding at the end thereof the following new paragraphs: “(11) provided in any final judgment, unreviewable order, or consent order or decree entered in any court of the United States or of any State, issued by a Federal depository institutions regulatory agency, or contained in any settlement agreement entered into by the debtor, arising from any act of fraud or defalcation while acting in a fiduciary capacity committed with respect to any depository institution or insured credit union; or “(12) for malicious or reckless failure to fulfill any commitment by the debtor to a Federal depository institutions regulatory agency to maintain the capital of an insured depository institution, except that this paragraph shall not extend any such commitment which would otherwise be terminated due to any act of such agency;”; and (2) by adding at the end thereof the following new subsections: “(e) Any institution-affiliated party of a depository institution or insured credit union shall be considered to be acting in a fiduciary capacity with respect to the purposes of subsection (a) (4) or (11).”; and (3) in subsection (c)— (A) by inserting “(1)” after “(c)”; and (B) by adding at the end the following: “(2) Paragraph (1) shall not apply in the case of a Federal depository institutions regulatory agency seeking, in its capacity as conservator, receiver, or liquidating agent for an insured depository institution, to recover a debt described in subsection (a)(2), (a)(4), (a)(6), or (a)(11) owed to such institution by an institution-affiliated party unless the receiver, conservator, or liquidating agent was appointed in time to reasonably comply, or for a Federal depository institutions regulatory agency acting in its corporate capacity as a successor to such receiver, conservator, or liquidating agent to reasonably comply, with subsection (a)(3)(B) as a creditor of such institution-affiliated party with respect to such debt.”. (b) Exception to Exemptions.— Section 522(c) of title 11, United States Code, is amended— (1) in paragraph (1) by striking “or” at the end; (2) in paragraph (2) by striking the period and inserting “; or”; and (3) by adding at the end the following: “(3) a debt of a kind specified in section 523(a)(4) or 523(a)(6) of this title owed by an institution-affiliated party of an insured depository institution to a Federal depository institutions regulatory agency acting in its capacity as conservator, receiver, or liquidating agent for such institution.”. (c) Assumption of commitments as executory contracts.— Section 365 of title 11, United States Code, is amended by adding at the end thereof the following: “(o) In a case under chapter 11 of this title, the trustee shall be deemed to have assumed (consistent with the debtor’s other obligations under section 507), and shall immediately cure any deficit under, any commitment by the debtor to the Federal Deposit Insurance Corporation, the Resolution Trust Corporation, the Director of the Office of Thrift Supervision, the Comptroller of the Currency, or the Board of Governors of the Federal Reserve System, or its predecessors or successors, to maintain the capital of an insured104 STAT. 4867 depository institution, and any claim for a subsequent breach of the obligations thereunder shall be entitled to priority under section 507. This subsection shall not extend any commitment that would otherwise be terminated by any act of such an agency.”. (d) Commitments To Maintain the Capital of Federally Insured Depository Institutions.— Section 507(a) of title 11, United States Code, is amended by adding at the end the following new paragraph: “(8) Eighth, allowed unsecured claims based upon any commitment by the debtor to the Federal Deposit Insurance Corporation, the Resolution Trust Corporation, the Director of the Office of Thrift Supervision, the Comptroller of the Currency, or the Board of Governors of the Federal Reserve System, or their predecessors or successors, to maintain the capital of an insured depository institution.”. (e) Definitions.— Section 101 of title 11, United States Code, is amended— (1) by redesignating paragraphs (32) through (53) as paragraphs (36) through (57), respectively; (2) by inserting before paragraph (36), as so redesignated, the following: “(33) ‘institution-affiliated party’— “(A) with respect to an insured depository institution (as defined in section 3(c)(2) of the Federal Deposit Insurance Act), has the meaning given it in section 3(u) of the Federal Deposit Insurance Act (12 U.S.C. 1813(u)); and “(B) with respect to an insured credit union, has the meaning given it in section 206(r) of the Federal Credit Union Act (12 U.S.C. 1786(r)); “(34) ‘insured credit union’ has the meaning given it in section 101(7) of the Federal Credit Union Act (12 U.S.C. 1752(7)); “(35) ‘insured depository institution’— “(A) has the meaning given it in section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)(2)); and “(B) includes an insured credit union (except in the case of paragraphs (3) and (33)(A) of this subsection);”; (3) by redesignating paragraphs (3) through (31) as paragraphs (4) through (32), respectively; and (4) by inserting after paragraph (2) the following: (3) ‘Federal depository institutions regulatory agency’ means— “(A) with respect to an insured depository institution (as defined in section 3(c)(2) of the Federal Deposit Insurance Act) for which no conservator or receiver has been appointed, the appropriate Federal banking agency (as defined in section 3(q) of such Act); “(B) with respect to an insured credit union (including an insured credit union for which the National Credit Union Administration has been appointed conservator or liquidating agent), the National Credit Union Administration; “(C) with respect to any insured depository institution for which the Resolution Trust Corporation has been appointed conservator or receiver, the Resolution Trust Corporation; and “(D) with respect to any insured depository institution for which the Federal Deposit Insurance Corporation has been104 STAT. 4868 appointed conservator or receiver, the Federal Deposit Insurance Corporation;”.