NCUA POWERS AS LIQUIDATING AGENT AND CONSERVATOR.

SEC. 1217. NCUA POWERS AS LIQUIDATING AGENT AND CONSERVATOR. (a) In General.—Section 207 of the Federal Credit Union Act (12 U.S.C. 1787) is amended— (1) in subsection (a), by striking paragraph (2) and by redesignating paragraph (3) as paragraph (2); (2) by striking subsections (d) and (j); (3) by redesignating subsections (b), (c), (e), (f), (g), (h), and (i) as subsections (j), (k), (1), (m), (n), (o), and (p), respectively; (4) by inserting after subsection (a) the following new subsections: “(b) Powers and Duties of Board as Conservator or Liquidating Agent.— “(1) Rulemaking authority of board.—The Board may prescribe such regulations as the Board determines to be appropriate regarding the conduct of the Board as conservator or liquidating agent. “(2) General powers.— “(A) Successor to credit union.—The Board shall, as conservator or liquidating agent, and by operation of law, succeed to— “(i) all rights, titles, powers, and privileges of the credit union, and of any member, accountholder, officer, or director of such credit union with respect to the credit union and the assets of the credit union; and “(ii) title to the books, records, and assets of any previous conservator or other legal custodian of such credit union. “(B) Operate the credit union,—The Board may, as conservator or liquidating agent— “(i) take over the assets of and operate the credit union with all the powers of the members or shareholders, the directors, and the officers of the credit union and shall be authorized to conduct all business of the credit union; “(ii) collect all obligations and money due the credit union; “(iii) perform all functions of the credit union in the name of the credit union which is consistent with the appointment as conservator or liquidating agent; and 103 STAT. 531 “(iv) preserve and conserve the assets and property of such credit union. “(C) Functions of credit union’s officers, directors, and shareholders.—The Board may, by regulation or order, provide for the exercise of any function by any member or stockholder, director, or officer of any credit union for which the Board has been appointed conservator or liquidating agent. “(D) Powers as conservator.—The Board may, as conservator, take such action as may be— “(i) necessary to put the credit union in a sound and solvent condition; and “(ii) appropriate to carry on the business of the credit union and preserve and conserve the assets and property of the credit union. “(E) Additional powers as liquidating agent.—The Board may, as liquidating agent, place the credit union in liquidation and proceed to realize upon the assets of the credit union, having due regard to the conditions of credit in the locality. “(F) Payment of valid obligations.—The Board, as conservator or liquidating agent, shall pay all valid obligations of the credit union in accordance with the prescriptions and limitations of this Act. “(G) Incidental powers.—The Board may, as conservator or liquidating agent— “(i) exercise all powers and authorities specifically granted to conservators or liquidating agents, respectively, under this Act and such incidental powers as shall be necessary to carry out such powers; and “(ii) take any action authorized by this Act, which the Board determines is in the best interests of the credit union, its account holders, or the Board. “(3) Authority of liquidating agent to determine claims.— “(A) In general.—The Board may, as liquidating agent, determine claims in accordance with the requirements of this subsection and regulations prescribed under paragraph (4). “(B) Notice requirements.—The liquidating agent, in any case involving the liquidation or winding up of the affairs of a closed credit union, shall— “(i) promptly publish a notice to the credit union’s creditors to present their claims, together with proof, to the liquidating agent by a date specified in the notice which shall be not less than 90 days after the publication of such notice; and “(ii) republish such notice approximately 1 month and 2 months, respectively, after the publication under clause (i). “(C) Mailing required.—The liquidating agent shall mail a notice similar to the notice published under subparagraph (B)(i) at the time of such publication to any creditor shown on the credit union’s books— “(i) at the creditor’s last address appearing in such books; or 103 STAT. 532 “(ii) upon discovery of the name and address of a claimant not appearing on the credit union’s books within 30 days after the discovery of such name and address. “(4) Rulemaking authority relating to determination of claims.—The Board may prescribe regulations regarding the allowance or disallowance of claims by the liquidating agent and providing for administrative determination of claims and review of such determination. “(5) Procedures for determination of claims.— “(A) Determination period.— “(i) In general.—Before the end of the 180-day period beginning on the date any claim against a credit union is filed with the Board as liquidating agent, the Board shall determine whether to allow or disallow the claim and shall notify the claimant of any determination with respect to such claim. “(ii) Extension of time.—The period described in clause (i) may be extended by a written agreement between the claimant and the Board. “(iii) Mailing of notice sufficient.—The requirements of clause (i) shall be deemed to be satisfied if the notice of any determination with respect to any claim is mailed to the last address of the claimant which appears— “(I) on the credit union’s books; “(II) in the claim filed by the claimant; or “(III) in documents submitted in proof of the claim. “(iv) Contents of notice of disallowance.—If any claim filed under clause (i) is disallowed, the notice to the claimant shall contain— “(I) a statement of each reason for the disallowance; and “(II) the procedures available for obtaining agency review of the determination to disallow the claim or judicial determination of the claim. “(B) Allowance of proven claims.—The liquidating agent shall allow any claim received on or before the date specified in the notice published under paragraph (3)(B)(i) by the liquidating agent from any claimant which is proved to the satisfaction of the liquidating agent. “(C) Disallowance of claims filed after end of filing period.— “(i) In general.—Except as provided in clause (ii), claims filed after the date specified in the notice published under paragraph (3)(B)(i) shall be disallowed and such disallowance shall be final. “(ii) Certain exceptions.—Clause (i) shall not apply with respect to any claim filed by any claimant after the date specified in the notice published under paragraph (3)(B)(i) and such claim may be considered by the liquidating agent if— “(I) the claimant did not receive notice of the appointment of the liquidating agent in time to file such claim before such date; and 103 STAT. 533 “(II) such claim is filed in time to permit payment of such claim. “(D) Authority to disallow claims.—The liquidating agent may disallow any portion of any claim by a creditor or claim of security, preference, or priority which is not proved to the satisfaction of the liquidating agent. “(E) No judicial review of determination pursuant to subparagraph (d) .—No court may review the Board’s determination pursuant to subparagraph (D) to disallow a claim. “(F) Legal effect of filing.— “(i) Statute of limitation tolled—For purposes of any applicable statute of limitations, the filing of a claim with the liquidating agent shall constitute a commencement of an action. “(ii) No prejudice to other actions.—Subject to paragraph (12), the filing of a claim with the liquidating agent shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the liquidating agent. “(6) Provision for agency review or judicial determination of claims.— “(A) In general.—Before the end of the 60-day period beginning on the earlier of— “(i) the end of the period described in paragraph (5)(A)(i) with respect to any claim against a credit union for which the Board is liquidating agent; or “(ii) the date of any notice of disallowance of such claim pursuant to paragraph (5)(A)(i), the claimant may request administrative review of the claim in accordance with subparagraph (A) or (B) of paragraph (7) or file suit on such claim (or continue an action commenced before the appointment of the liquidating agent) in the district or territorial court of the United States for the district within which the credit union’s principal place of business is located or the United States District Court for the District of Columbia (and such court shall have jurisdiction to hear such claim). “(B) Statute of limitations.—If any claimant fails to— “(i) request administrative review of any claim in accordance with subparagraph (A) or (B) of paragraph (7); or “(ii) file suit on such claim (or continue an action commenced before the appointment of the liquidating agent), before the end of the 60-day period described in subparagraph (A), the claim shall be deemed to be disallowed (other than any portion of such claim which was allowed by the liquidating agent) as of the end of such period, such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim. “(7) Review of claims.— “(A) Administrative hearing.—If any claimant requests review under this subparagraph in lieu of filing or continuing any action under paragraph (6) and the Board agrees to such request, the Board shall consider the claim after opportunity for a hearing on the record. The final deter-103 STAT. 534mination of the Board with respect to such claim shall be subject to judicial review under chapter 7 of title 5, United States Code. “(B) Other review procedures.— “(i) In general.—The Board shall also establish such alternative dispute resolution processes as may be appropriate for the resolution of claims filed under paragraph (5)(A)(i). “(ii) Criteria.—In establishing alternative dispute resolution processes, the Board shall strive for procedures which are expeditious, fair, independent, and low cost. “(iii) Voluntary binding or nonbinding procedures—The Board may establish both binding and nonbinding processes, which may be conducted by any government or private party, but all parties, including the claimant and the Board, must agree to the use of the process in a particular case. “(iv) Consideration of incentives —The Board shall seek to develop incentives for claimants to participate in the alternative dispute resolution process. “(8) Expedited determination of claims.— “(A) Establishment required.—The Board shall establish a procedure for expedited relief outside of the routine claims process established under paragraph (5) for claimants who— “(i) allege the existence of legally valid and enforceable or perfected security interests in assets of any credit union for which the Board has been appointed liquidating agent; and “(ii) allege that irreparable injury will occur if the routine claims procedure is followed. “(B) Determination period—Before the end of the 90-day period beginning on the date any claim is filed in accordance with the procedures established pursuant to subparagraph (A), the Board shall— “(i) determine— “(I) whether to allow or disallow such claim; or “(II) whether such claim should be determined pursuant to the procedures established pursuant to paragraph (5); or “(ii) notify the claimant of the determination, and if the claim is disallowed, a statement of each reason for the disallowance and the procedure for obtaining agency review or judicial determination. “(C) Period for filing or renewing suit.—Any claimant who files a request for expedited relief shall be permitted to file a suit, or to continue a suit filed before the appointment of the liquidating agent, seeking a determination of the claimant’s rights with respect to such security interest after the earlier of— “(i) the end of the 90-day period beginning on the date of the filing of a request for expedited relief; or “(ii) the date the Board denies the claim. “(D) Statute of limitations.—If an action described in subparagraph (C) is not filed, or the motion to renew a previously filed suit is not made, before the end of the 103 STAT. 53530-day period beginning on the date on which such action or motion may be filed in accordance with subparagraph (B), the claim shall be deemed to be disallowed as of the end of such period (other than any portion of such claim which was allowed by the liquidating agent), such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim. “(E) Legal effect of filing.— “(i) Statute of limitation tolled.—For purposes of any applicable statute of limitations, the filing of a claim with the liquidating agent shall constitute a commencement of an action. “(ii) No prejudice to other actions.—Subject to paragraph (12), the filing of a claim with the liquidating agent shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the liquidating agent. “(9) Agreement as basis of claim.— “(A) Requirements.—Except as provided in subparagraph (B), any agreement which does not meet the requirements set forth in section 208(a)(3) shall not form the basis of, or substantially comprise, a claim against the liquidating agent or the Board. “(B) Exception to contemporaneous execution requirement.—Notwithstanding section 208(a)(3), any agreement between a Federal home loan bank or Federal Reserve bank and any insured credit union which was executed before the extension of credit by such bank to such credit union shall be treated as having been executed contemporaneously with such extension of credit for purposes of subparagraph (A). “(10) Payment of claims.— “(A) In general.—The liquidating agent may, in the liquidating agent’s discretion and to the extent funds are available, pay creditor claims which are allowed by the liquidating agent, approved by the Board pursuant to a final determination pursuant to paragraph (7) or (8), or determined by the final judgment of any court of competent jurisdiction in such manner and amounts as are authorized under this Act. “(B) Payment of dividends on claims.—The liquidating agent may, in the liquidating agent’s sole discretion, pay dividends on proved claims at any time, and no liability shall attach to the Board (in such Board’s corporate capacity or as liquidating agent), by reason of any such payment, for failure to pay dividends to a claimant whose claim is not proved at the time of any such payment. “(11) Distribution of assets.— “(A) Subrogated claims; claims of uninsured accountholders and other creditors.— The liquidating agent shall— “(i) retain for the account of the Board such portion of the amounts realized from any liquidation as the Board may be entitled to receive in connection with the subrogation of the claims of accountholders; and “(ii) pay to accountholders and other creditors the net amounts available for distribution to them. 103 STAT. 536 “(B) Distribution to shareholders of amounts remaining after payment of all other claims and expenses.—In any case in which funds remain after all account-holders, creditors, other claimants, and administrative expenses are paid, the liquidating agent shall distribute such funds to the credit union’s shareholders or members together with the accounting report required under paragraph (14)(C). “(12) Suspension of legal actions.— “(A) In general.—After the appointment of a conservator or liquidating agent for an insured credit union, the conservator or liquidating agent may request a stay for a period not to exceed— “(i) 45 days, in the case of any conservator; and “(ii) 90 days, in the case of any liquidating agent, in any judicial action or proceeding to which such credit union is or becomes a party. “(B) Grant of stay by all courts required.—Upon receipt of a request by any conservator or liquidating agent pursuant to subparagraph (A) for a stay of any judicial action or proceeding in any court with jurisdiction of such action or proceeding, the court shall grant such stay as to all parties. “(13) Additional rights and duties.— “(A) Prior final adjudication.—The Board shall abide by any final unappealable judgment of any court of competent jurisdiction which was rendered before the appointment of the Board as conservator or liquidating agent. “(B) Rights and remedies of conservator or liquidating agent.—In the event of any appealable judgment, the Board as conservator or liquidating agent shall— “(i) have all the rights and remedies available to the credit union (before the appointment of such conservator or liquidating agent) and the Board in its corporate capacity, including removal to Federal court and all appellate rights; and “(ii) not be required to post any bond in order to pursue such remedies. “(C) No attachment or execution.—No attachment or execution may issue by any court upon assets in the possession of the liquidating agent. “(D) Limitation on judicial review.—Except as otherwise provided in this subsection, no court shall have jurisdiction over— “(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any credit union for which the Board has been appointed liquidating agent, including assets which the Board may acquire from itself as such liquidating agent; or “(ii) any claim relating to any act or omission of such credit union or the Board as liquidating agent. “(14) Statute of limitations for actions brought by conservator or liquidating agent.— “(A) In general.—Notwithstanding any provision of any contract, the applicable statute of limitations with regard to 103 STAT. 537any action brought by the Board as conservator or liquidating agent shall be— “(i) in the case of any contract claim, the longer of— “(I) the 6-year period beginning on the date the claim accrues; or “(II) the period applicable under State law; and “(ii) in the case of any tort claim, the longer of— “(I) the 3-year period beginning on the date the claim accrues; or “(II) the period applicable under State law. “(B) Determination of the date on which a claim accrues.—For purposes of subparagraph (A), the date on which the statute of limitation begins to run on any claim described in such subparagraph shall be the later of— “(i) the date of the appointment of the Board as conservator or liquidating agent; or “(ii) the date on which the cause of action accrues. “(15) Accounting and recordkeeping requirements.— “(A) In general.—The Board as conservator or liquidating agent shall, consistent with the accounting and reporting practices and procedures established by the Board, maintain a full accounting of each conservatorship and liquidation or other disposition of credit unions in default. “(B) Annual accounting or report.—With respect to each conservatorship or liquidation to which the Board was appointed, the Board shall make an annual accounting or report, as appropriate, available to the Comptroller General of the United States or, in the case of a State-chartered credit union, the authority which appointed the Board as conservator or liquidating agent. “(C) Availability of reports.—Any report prepared pursuant to subparagraph (B) shall be made available by the Board upon request to any shareholder of the credit union for which the Board was appointed conservator or liquidating agent or any other member of the public. “(D) Recordkeeping requirement.—After the end of the 6-year period beginning on the date the Board is appointed as liquidating agent of an insured credit union, the Board may destroy any records of such credit union which the Board, in the Board’s discretion, determines to be unnecessary unless directed not to do so by a court of competent jurisdiction or governmental agency, or prohibited by law. “(c) Provisions Relating to Contracts Entered Into Before Appointment of Conservator or Liquidating Agent.— “(1) Authority to repudiate contracts.—In addition to any other rights a conservator or liquidating agent may have, the conservator or liquidating agent for any insured credit union may disaffirm or repudiate any contract or lease— “(A) to which such credit union is a party; “(B) the performance of which the conservator or liquidating agent, in the conservator’s or liquidating agent’s discretion, determines to be burdensome; and “(C) the disaffirmance or repudiation of which the conservator or liquidating agent determines, in the conservator’s or liquidating agent’s discretion, will promote the orderly administration of the credit union’s affairs. 103 STAT. 538 “(2) Timing of repudiation.—The conservator or liquidating agent appointed for any insured credit union shall determine whether or not to exercise the rights of repudiation under this subsection within a reasonable period following such appointment. “(3) Claims for damages for repudiation.— “(A) In general.—Except as otherwise provided in subparagraph (C) and paragraphs (4), (5), and (6), the liability of the conservator or liquidating agent for the disaffirmance or repudiation of any contract pursuant to paragraph (I) shall be— “(i) limited to actual direct compensatory damages; and “(ii) determined as of— “(I) the date of the appointment of the conservator or liquidating agent; or “(II) in the case of any contract or agreement referred to in paragraph (8), the date of the disaffirmance or repudiation of such contract or agreement. “(B) No liability for other damages.—For purposes of subparagraph (A), the term ‘actual direct compensatory damages’ does not include— “(i) punitive or exemplary damages; “(ii) damages for lost profits or opportunity; or “(iii) damages for pain and suffering. “(C) Measure of damages for repudiation of financial contracts.—In the case of any qualified financial contract or agreement to which paragraph (8) applies, compensatory damages shall be— “(i) deemed to include normal and reasonable costs of cover or other reasonable measures of damages utilized in the industries for such contract and agreement claims; and “(ii) paid in accordance with this subsection and subsection (f) except as otherwise specifically provided in this section. “(4) Leases under which the credit union is the lessee.— “(A) In general.—If the conservator or liquidating agent disaffirms or repudiates a lease under which the credit union was the lessee, the conservator or liquidating agent shall not be liable for any damages (other than damages determined pursuant to subparagraph (B)) for the disaffirmance or repudiation of such lease. “(B) Payments of rent.—Notwithstanding subparagraph (A), the lessor under a lease to which such subparagraph applies shall— “(i) be entitled to the contractual rent accruing before the later of the date— “(I) the notice of disaffirmance or repudiation is mailed; or “(II) the disaffirmance or repudiation becomes effective, unless the lessor is in default or breach of the terms of the lease; “(ii) have no claim for damages under any acceleration clause or other penalty provision in the lease; and 103 STAT. 539 “(iii) have a claim for any unpaid rent, subject to all appropriate offsets and defenses, due as of the date of the appointment which shall be paid in accordance with this subsection and subsection (b). “(5) Leases under which the credit union is the lessor.— “(A) In general.—If the conservator or liquidating agent repudiates an unexpired written lease of real property of the credit union under which the credit union is the lessor and the lessee is not, as of the date of such repudiation, in default, the lessee under such lease may either— “(i) treat the lease as terminated by such repudiation; or “(ii) remain in possession of the leasehold interest for the balance of the term of the lease unless the lessee defaults under the terms of the lease after the date of such repudiation. “(B) Provisions applicable to lessee remaining in possession.—If any lessee under a lease described in subparagraph (A) remains in possession of a leasehold interest pursuant to clause (ii) of such subparagraph— “(i) the lessee— “(I) shall continue to pay the contractual rent pursuant to the terms of the lease after the date of the repudiation of such lease; “(II) may offset against any rent payment which accrues after the date of the repudiation of the lease, any damages which accrue after such date due to the nonperformance of any obligation of the credit union under the lease after such date; and “(ii) the conservator or liquidating agent shall not be liable to the lessee for any damages arising after such date as a result of the repudiation other than the amount of any offset allowed under clause (i)(D). “(6) Contracts for the sale of real property.— “(A) In general.—If the conservator or liquidating agent repudiates any contract (which meets the requirements of each paragraph of section 208(a)(3)) for the sale of real property and the purchaser of such real property under such contract is in possession and is not, as of the date of such repudiation, in default, such purchaser may either— “(i) treat the contract as terminated by such repudiation; or “(ii) remain in possession of such real property. “(B) Provisions applicable to purchaser remaining in possession.—If any purchaser of real property under any contract described in subparagraph (A) remains in possession of such property pursuant to clause (ii) of such subparagraph— “(i) the purchaser— “(I) shall continue to make all payments due under the contract after the date of the repudiation of the contract; and “(II) may offset against any such payments any damages which accrue after such date due to the nonperformance (after such date) of any obligation of the credit union under the contract; and “(ii) the conservator or liquidating agent shall— 103 STAT. 540 “(I) not be liable to the purchaser for any damages arising after such date as a result of the repudiation other than the amount of any offset allowed under clause (i)(II); “(II) deliver title to the purchaser in accordance with the provisions of the contract; and “(III) have no obligation under the contract other than the performance required under subclause (II). “(C) Assignment and sale allowed.— “(i) In general.—No provision of this paragraph shall be construed as limiting the right of the conservator or liquidating agent to assign the contract described in subparagraph (A) and sell the property subject to the contract and the provisions of this paragraph. “(ii) No liability after assignment and sale.—If an assignment and sale described in clause (i) is consummated, the conservator or liquidating agent shall have no further liability under the contract described in subparagraph (A) or with respect to the real property which was the subject of such contract. “(7) Provisions applicable to service contracts.— “(A) Services performed before appointment.—In the case of any contract for services between any person and any insured credit union for which the Board has been appointed conservator or liquidating agent, any claim of such person for services performed before the appointment of the conservator or the liquidating agent shall be— “(i) a claim to be paid in accordance with subsection (b); and “(ii) deemed to have arisen as of the date the conservator or liquidating agent was appointed. “(B) Services performed after appointment and prior to repudiation.—If, in the case of any contract for services described in subparagraph (A), the conservator or liquidating agent accepts performance by the other person before the conservator or liquidating agent makes any determination to exercise the right of repudiation of such contract under this section— “(i) the other party shall be paid under the terms of the contract for the services performed; and “(ii) the amount of such payment shall be treated as an administrative expense of the conservatorship or liquidation. “(C) Acceptance of performance no bar to subsequent repudiation.—The acceptance by any conservator or liquidating agent of services referred to in subparagraph (B) in connection with a contract described in such subparagraph shall not affect the right of the conservator or liquidating agent to repudiate such contract under this section at any time after such performance. “(8) Certain qualified financial contracts.— “(A) Rights of parties to contracts.—Subject to paragraph (12) of this subsection and notwithstanding any other provision of this Act (other than subsection (b)(9) of this section and section 208(a)(3)), any other Federal law, or the 103 STAT. 541law of any State, no person shall be stayed or prohibited from exercising— “(i) any right to cause the termination or liquidation of any qualified financial contract with an insured credit union which arises upon the appointment of the Board as liquidating agent for such credit union at any time after such appointment; “(ii) any right under any security arrangement relating to any contract or agreement described in clause (i); or “(iii) any right to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with I or more contracts and agreements described in clause (i), including any master agreement for such contracts or agreements. “(B) Applicability of other provisions.—Subsection (b)(12) shall apply in the case of any judicial action or proceeding brought against any liquidating agent referred to in subparagraph (A), or the credit union for which such liquidating agent was appointed, by any party to a contract or agreement described in subparagraph (A)(i) with such credit union. “(C) Certain transfers not avoidable.— “(i) In general.—Notwithstanding paragraph (11), the Board, whether acting as such or as conservator or liquidating agent of an insured credit union, may not avoid any transfer of money or other property in connection with any qualified financial contract with an insured credit union. “(ii) Exception for certain transfers.—Clause (i) shall not apply to any transfer of money or other property in connection with any qualified financial contract with an insured credit union if the Board determines that the transferee had actual intent to hinder, delay, or defraud such credit union, the creditors of such credit union, or any conservator or liquidating agent appointed for such credit union. “(D) Certain contracts and agreements defined.— For purposes of this subsection— “(i) Qualified financial contract.—The term ‘qualified financial contract’ means any securities contract, forward contract, repurchase agreement, and any similar agreement that the Board determines by regulation to be a qualified financial contract for purposes of this paragraph. “(ii) Securities contract.—The term ‘securities contract’— “(I) has the meaning given to such term in section 741(7) of title 11, United States Code, except that the term ‘security’ (as used in such section) shall be deemed to include any mortgage loan, any mortgage-related security (as defined in section 3(a)(41) of the Securities Exchange Act of 1934), and any interest in any mortgage loan or mortgage-related security; and “(II) does not include any participation in a commercial mortgage loan unless the Board deter-103 STAT. 542mines by regulation, resolution, or order to include any such participation within the meaning of such term. “(iii) Forward contract.—The term ‘forward contract’ has the meaning given to such term in section 101(24) of title 11, United States Code. “(iv) Repurchase agreement.—The term ‘repurchase agreement’— “(I) has the meaning given to such term in section 101(41) of title 11, the United States Code, except that the items (as described in such section) which may be subject to any such agreement shall be deemed to include mortgage-related securities (as such term is defined in section 3(a)(41) of the Securities Exchange Act of 1934, any mortgage loan, and any interest in any mortgage loan; and “(II) does not include any participation in a commercial mortgage loan unless the Board determines by regulation, resolution, or order to include any such participation within the meaning of such term. “(v) Transfer.—The term ‘transfer’ has the meaning given to such term in section 101(50) of title 11, United States Code. “(E) Certain protections in event of appointment of conservator.—Notwithstanding any other provision of this Act (other than paragraph (12) of this subsection, subsection (b)(9) of this section, and section 208(a)(3) of this Act), any other Federal law, or the law of any State, no person shall be stayed or prohibited from exercising— “(i) any right such person has to cause the termination, liquidation, or acceleration of any qualified financial contract with a credit union in a conservatorship based upon a default under such financial contract which is enforceable under applicable noninsolvency law; “(ii) any right under any security arrangement relating to such qualified financial contracts; or “(iii) any right to offset or net out any termination values, payment amounts, or other transfer obligations arising under or in connection with such qualified financial contracts. “(9) Transfer of qualified financial contracts.—In making any transfer of assets or liabilities of a credit union in default which includes any qualified financial contract, the conservator or liquidating agent for such credit union shall either— “(A) transfer to 1 credit union (other than a credit union in default)— “(i) all qualified financial contracts between— “(I) any person or any affiliate of such person; and “(II) the credit union in default; “(ii) all claims of such person or any affiliate of such person against such credit union under any such contract (other than any claim which, under the terms of 103 STAT. 543any such contract, is subordinated to the claims of general unsecured creditors of such credit union); “(iii) all claims of such credit union against such person or any affiliate of such person under any such contract; and “(iv) all property securing any claim described in clause (ii) or (iii) under any such contract; or “(B) transfer none of the financial contracts, claims, or property referred to in subparagraph (A) (with respect to such person and any affiliate of such person). “(10) Notification of transfer.— “(A) In general.—If— “(i) the conservator or liquidating agent for an insured credit union in default makes any transfer of the assets and liabilities of such credit union; and “(ii) the transfer includes any qualified financial contract, the conservator or liquidating agent shall use such conservator’s or liquidating agent’s best efforts to notify any person who is a party to any such contract of such transfer by 12:00, noon (local time), on the business day following such transfer. “(B) Business day defined.—For purposes of this paragraph, the term ‘business day’ means any day other than any Saturday, Sunday, or any day on which either the New York Stock Exchange or the Federal Reserve Bank of New York is closed. “(11) Certain security interests not avoidable.—No provision of this subsection shall be construed as permitting the avoidance of any legally enforceable or perfected security interest in any of the assets of any credit union except where such an interest is taken in contemplation of the credit union’s insolvency or with the intent to hinder, delay, or defraud the credit union or the creditors of such credit union. “(12) Authority to enforce contracts.— “(A) In general.—The conservator or liquidating agent may enforce any contract, other than a director’s or officer’s liability insurance contract or a credit union bond, entered into by the credit union notwithstanding any provision of the contract providing for termination, default, acceleration, or exercise of rights upon, or solely by reason of, insolvency or the appointment of a conservator or liquidating agent. “(B) Certain rights not affected.—No provision of this paragraph may be construed as impairing or affecting any right of the conservator or liquidating agent to enforce or recover under a directors or officers liability insurance contract or credit union bond under other applicable law. “(13) Exception for federal reserve and federal home loan banks.—No provision of this subsection shall apply with respect to— “(A) any extension of credit from any Federal home loan bank or Federal Reserve bank to any insured depository institution; or “(B) any security interest in the assets of the institution securing any such extension of credit. “(d) Payment of Insured Deposits.— 103 STAT. 544 “(1) In general.—In case of the liquidation of any insured credit union, payment of the insured deposits in such credit union shall be made by the Board as soon as possible, subject to the provisions of subsection (e) of this section, either by cash or by making available to each accountholder a transferred deposit in a new credit union in the same community or in another insured credit union in an amount equal to the insured deposit of such accountholder. “(2) Proof of claims.—The Board, in its discretion, may require proof of claims to be filed and may approve or reject such claims for insured deposits. “(3) Resolution of disputes.— “(A) Resolutions in accordance to board regulations.—In the case of any disputed claim relating to any insured deposit or any determination of insurance coverage with respect to any deposit, the Board may resolve such disputed claim in accordance with regulations prescribed by the Board establishing procedures for resolving such claims. “(B) Adjudication of claims.—If the Board has not prescribed regulations establishing procedures for resolving disputed claims, the Board may require the final determination of a court of competent jurisdiction before paying any such claim. “(4) Review of board’s determination.—Final determination made by the Board shall be reviewable in accordance with chapter 7 of title 5, United States Code, by the United States Court of Appeals for the District of Columbia or the court of appeals for the Federal judicial circuit where the principal place of business of the credit union is located. “(5) Statute of limitations.—Any request for review of a final determination by the Board shall be filed with the appropriate circuit court of appeals not later than 60 days after such determination is ordered. “(e) Subrogation of Board.— “(1) In general.—Notwithstanding any other provision of Federal law, the law of any State, or the constitution of any State, the Board, upon the payment to any accountholder as provided in subsection (d) in connection with any insured credit union described in such subsection or the assumption of any deposit in such credit union by another insured credit union pursuant to this section, shall be subrogated to all rights of the accountholder against such credit union to the extent of such payment or assumption. “(2) Dividends on subrogated amounts.—The subrogation of the Board under paragraph (1) with respect to any insured credit union shall include the right on the part of the Board to receive the same dividends from the proceeds of the assets of such credit union as would have been payable to the accountholder on a claim for the insured deposit, but such accountholder shall retain such claim for any uninsured or unassumed portion of the deposit. “(f) Valuation of Claims in Default.— “(1) In general.—Notwithstanding any other provision of Federal law or the law of any State, this subsection shall govern the rights of the creditors (other than insured accountholders) of such credit union. 103 STAT. 545 “(2) Maximum liability —The maximum liability of the Board, acting as liquidating agent or in any other capacity, to any person having a claim against the liquidating agent or the insured credit union for which such liquidating agent is appointed shall equal the amount such claimant would have received if the Board had liquidated the assets and liabilities of such credit union without exercising the Board’s authority under subsection (n) of this section. “(3) Additional payments authorized.— “(A) In general.—The Board may, in its discretion and in the interests of minimizing its losses, use its own resources to make additional payments or credit additional amounts to or with respect to or for the account of any claimant or category of claimants. The Board shall not be obligated, as a result of having made any such payment or credited any such amount to or with respect to or for the account of any claimant or category of claimants, to make payments to any other claimant or category or claimants. “(B) Manner of payment.—The Board may make the payments or credit the amounts specified in subparagraph (A) directly to the claimants or may make such payments or credit such amounts to an open insured credit union to induce the open insured credit union to accept liability for such claims. “(g) Limitation on court action.—Except as provided in this section, no court may take any action, except at the request of the Board of Directors by emulation or order, to restrain or affect the exercise of powers or functions of the Board as a conservator or a liquidating agent. “(h) Liability of directors and officers.—A director or officer of an insured credit union may be held personally liable for monetary damages in any civil action by, on behalf of, or at the request or direction of the Board, which action is prosecuted wholly or partially for the benefit of the Board— “(1) acting as conservator or liquidating agent of such insured credit union, “(2) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed by such liquidating agent or conservator, or “(3) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed in whole or in part by an insured credit union or its affiliate in connection with assistance provided under section 208, for gross negligence, including any similar conduct or conduct that demonstrates a greater disregard of a duty of care (than gross negligence) including intentional tortious conduct, as such terms are defined and determined under applicable State law. Nothing in this paragraph shall impair or affect any right, if any, of the Board under other applicable law. “(i) Damages.—In any proceeding related to any claim against an insured credit union’s director, officer, employee, agent, attorney, accountant, appraiser, or any other party employed by or providing services to an insured credit union, recoverable damages determined to result from the improvident or otherwise improper use or investment of any insured credit union’s assets shall include principal losses and appropriate interest.”; and 103 STAT. 546 (5) in subsection (k) (as so redesignated by paragraph (3) of this subsection) by striking out the 1st and 5th sentences. (b) Limitation on Court Action.—Section 206(h)(3) of the Federal Credit Union Act (12 U.S.C. 1786(h)(3)) is amended by adding at the end thereof the following sentence: “Except as provided in this paragraph, no court may take any action, except at the request of the Board by regulation or order, to restrain or affect the exercise of powers or functions of the Board as conservator.”.