BORROWING FOR BIF FROM BIF MEMBERS.

SEC. 105. BORROWING FOR BIF FROM BIF MEMBERS. Section 14 of the Federal Deposit Insurance Act (12 U.S.C. 1824) is amended by inserting after subsection (c) (as added by section 103 of this subtitle) the following new subsection: “(d) Borrowing for BIF From BIF Members.— “(1) Borrowing authority.— The Corporation may issue obligations to Bank Insurance Fund members, and may borrow from Bank Insurance Fund members and give security for any amount borrowed, and may pay interest on (and any redemption premium with respect to) any such obligation or amount to the extent— “(A) the proceeds of any such obligation or amount are used by the Corporation solely for purposes of carrying out the Corporation’s functions with respect to the Bank Insurance Fund; and “(B) the terms of the obligation or instrument limit the liability of the Corporation or the Bank Insurance Fund for the payment of interest and the repayment of principal to the amount which is equal to the amount of assessment income received by the Fund from assessments under section 7. “(2) Limitations on borrowing.— “(A) Applicability of public debt limit.— For purposes of the public debt limit established in section 3101(b) of title 31, United States Code, any obligation issued, or amount borrowed, by the Corporation under paragraph (1) shall be considered to be an obligation to which such limit applies. “(B) Applicability of fdic borrowing limit.— For purposes of the dollar amount limitation established in section 14(a) of the Federal Deposit Insurance Act (12 U.S.C. 1824(a)), any obligation issued, or amount borrowed, by the Corporation under paragraph (1) shall be considered to be an amount borrowed from the Treasury under such section. “(C) Interest rate limit.— The rate of interest payable in connection with any obligation issued, or amount borrowed, by the Corporation under paragraph (1) shall not exceed an amount determined by the Secretary of the Treasury, 105 STAT. 2240taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities. “(D) Obligations to be held only by bif members.— The terms of any obligation issued by the Corporation under paragraph (1) shall provide that the obligation will be valid only if held by a Bank Insurance Fund Member. “(3) Liability of bif.— Any obligation issued or amount borrowed under paragraph (1) shall be a liability of the Bank Insurance Fund. “(4) Terms and conditions.— Subject to paragraphs (1) and (2), the Corporation shall establish the terms and conditions for obligations issued or amounts borrowed under paragraph (1), including interest rates and terms to maturity. “(5) Investment by bif members.— “(A) Authority to invest.— Subject to subparagraph (B) and notwithstanding any other provision of Federal law or the law of any State, any Bank Insurance Fund member may purchase and hold for investment any obligation issued by the Corporation under paragraph (1) without limitation, other than any limitation the appropriate Federal banking agency may impose specifically with respect to such obligations. “(B) Investment only from capital and retained earnings.— Any Bank Insurance Fund member may purchase obligations or make loans to the Corporation under paragraph (1) only to the extent the purchase money or the money loaned is derived from the member’s capital or retained earnings. “(6) Accounting treatment.— In accounting for any investment in an obligation purchased from, or any loan made to, the Corporation for purposes of determining compliance with any capital standard and preparing any report required pursuant to section 7(a), the amount of such investment or loan shall be treated as an asset.”.