S. 828

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.

Latest
Raw Text PDF XML

II

115th CONGRESS

1st Session

S. 828

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.

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.