Text: S.828 — 115th Congress (2017-2018)All Information (Except Text)

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Introduced in Senate (04/05/2017)


115th CONGRESS
1st Session
S. 828


To amend the Federal Deposit Insurance Act to require the appropriate Federal banking agencies to treat certain municipal obligations as level 2B liquid assets, and for other purposes.


IN THE SENATE OF THE UNITED STATES

April 5 (legislative day, April 4), 2017

Mr. Rounds (for himself, Mr. Warner, Mr. Tester, Mr. Scott, Mr. Donnelly, Ms. Heitkamp, Mr. Cotton, Mr. Tillis, Mr. Van Hollen, Mr. Kennedy, and Mr. Schumer) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs


A BILL

To amend the Federal Deposit Insurance Act to require the appropriate Federal banking agencies to treat certain municipal obligations as level 2B liquid assets, 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. Treatment of certain municipal obligations.

(a) In general.—Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended—

(1) by moving subsection (z) so that it appears after subsection (y); and

(2) by adding at the end the following:

“(aa) Treatment of certain municipal obligations.—

“(1) DEFINITIONS.—In this subsection—

“(A) the term ‘investment grade’, with respect to an obligation, has the meaning given the term in section 1.2 of title 12, Code of Federal Regulations, or any successor thereto;

“(B) the term ‘liquid and readily-marketable’ has the meaning given the term in section 249.3 of title 12, Code of Federal Regulations, or any successor thereto; and

“(C) the term ‘municipal obligation’ means an obligation of—

“(i) a State or any political subdivision thereof; or

“(ii) any agency or instrumentality of a State or any political subdivision thereof.

“(2) MUNICIPAL OBLIGATIONS.—For purposes of the final rule entitled ‘Liquidity Coverage Ratio: Liquidity Risk Measurement Standards’ (79 Fed. Reg. 61439 (October 10, 2014)), the final rule entitled ‘Liquidity Coverage Ratio: Treatment of U.S. Municipal Securities as High-Quality Liquid Assets’ (81 Fed. Reg. 21223 (April 11, 2016)), and any other regulation that incorporates a definition of the term ‘high-quality liquid asset’ or another substantially similar term, the appropriate Federal banking agencies shall treat a municipal obligation as a high-quality liquid asset that is a level 2B liquid asset if that obligation is, as of the date of calculation—

“(A) liquid and readily-marketable; and

“(B) investment grade.”.

(b) Amendment to liquidity coverage ratio regulations.—Not later than 90 days after the date of enactment of this Act, the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Comptroller of the Currency shall amend the final rule entitled “Liquidity Coverage Ratio: Liquidity Risk Measurement Standards” (79 Fed. Reg. 61439 (October 10, 2014)) and the final rule entitled “Liquidity Coverage Ratio: Treatment of U.S. Municipal Securities as High-Quality Liquid Assets” (81 Fed. Reg. 21223 (April 11, 2016)) to implement the amendments made by this Act.


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