12 U.S.C. § 1821 — Insurance Funds

(a) Deposit insurance (1) Insured amounts payable. (A) The Corporation must insure deposits of all insured depository institutions as this chapter provides. (B) The net amount owed to one depositor cannot exceed the "standard maximum deposit insurance amount," as determined under (C), (D), (E), (F), and paragraph (3). This section does not define "insured depository institution" or "depositor." (C) To determine that net amount, the Corporation must add together all deposits at the institution that one depositor maintains in the same capacity and same right for the depositor's benefit, whether in the depositor's name or another person's name. This does not include amounts in the trust funds described in section 1817(i)(1) or (2), or funds described in section 1817(i)(3). (D) (i) The Corporation must provide "pass-through deposit insurance" for deposits of an "employee benefit plan." (ii) An insured depository institution that is not "well capitalized" or "adequately capitalized" may not accept employee benefit plan deposits. (iii)(I) "Well capitalized" and "adequately capitalized" have the meanings given in section 1831o. (II) "Employee benefit plan" has the meaning in paragraph (5)(B)(ii), and also includes an eligible deferred-compensation plan described in section 457 of title 26. (III) "Pass-through deposit insurance" means coverage for an employee benefit plan based on each participant's interest, under Corporation regulations. (E) "Standard maximum deposit insurance amount" means $250,000, adjusted under (F) after March 31, 2010. The increase to $250,000 also applies to depositors at an institution for which the Corporation became receiver or conservator on or after January 1, 2008, and before October 3, 2008. The Corporation must take the actions needed for those depositors without the chapter's time limits. In applying these rules, any payment the Corporation made as receiver or conservator on a deposit claim above the amount in effect when it was appointed is treated as part of the net amount owed under (B). (F)(i) By April 1, 2010, and on the first day of every later five-year period, the Corporation's Board of Directors and the National Credit Union Administration Board must jointly consider (v). If they decide an inflation increase is appropriate, they must jointly set the increase for the standard maximum deposit insurance amount and the standard maximum share insurance amount in section 1787(k). The increase is the product of $100,000 and the ratio of the Department of Commerce's published annual Personal Consumption Expenditures Chain-Type Price Index for the calendar year before the calculation year to that index's published annual value for the calendar year before April 1, 2006. The values used must be the latest values published by the Department as of the calculation date. (ii) The statute says that an amount determined under clause (ii) that is not a multiple of $10,000 must be rounded down to the nearest $10,000. (iii) By April 5 of a year when an adjustment must be calculated, the two Boards must publish in the Federal Register the adjusted deposit-insurance amount, share-insurance amount, and coverage amounts under paragraph (3)(A) and section 1787(k)(3), and must jointly report those amounts to Congress. (iv) Unless Congress acts before July 1 of that year, the increases take effect January 1 of the next year. (v) In deciding whether to increase the amounts, the Boards must consider the condition of the Deposit Insurance Fund and economic conditions affecting insured institutions, possible problems affecting those institutions, and whether the increase would make the fund's reserve ratio fall below 1.15 percent of estimated insured deposits. (2) Government depositors. (A) For insurance purposes, a government depositor is treated as separate from every other United States officer, employee, or agent and from every public unit listed in (B). Except under (C), the government depositor's deposits are insured up to the standard maximum deposit insurance amount. (B) A "government depositor" is: (i) a United States officer, employee, or agent with official custody of public funds who lawfully invests or deposits them in time or savings deposits in an insured institution; (ii) such an officer, employee, or agent of a State, county, municipality, or political subdivision, investing or depositing public funds in an insured institution in that State; (iii) such an officer, employee, or agent of the District of Columbia, investing or depositing public funds in an insured institution there; (iv) such an officer, employee, or agent of Puerto Rico, the Virgin Islands, American Samoa, the Trust Territory of the Pacific Islands, or Guam, or of one of their counties, municipalities, or political subdivisions, investing or depositing public funds in an insured institution in the relevant place; or (v) such an officer, employee, or agent of an Indian tribe, as defined in section 1452(c) of title 25, or its agency, with official custody of tribal funds and lawfully investing or depositing them in an insured institution. (C) The Corporation may limit the total funds a government depositor may invest or deposit at an insured institution based on that bank's asset size. The depositor may exceed the limit by pledging acceptable securities when and where required. (3) Certain retirement accounts. (A) Deposits connected with an individual retirement account under section 408(a) of title 26; an eligible deferred-compensation plan under section 457 of title 26, subject to paragraph (1)(D)(ii); or an individual account plan under section 1002(34) of title 29, or a plan under section 401(d) of title 26, must be added together and insured up to $250,000 per participant per insured institution. For the last two plan types, this rule applies to the extent participants and beneficiaries may direct investments in individual accounts maintained for them. The $250,000 amount is adjusted for inflation under (1)(F), using $250,000 in place of $100,000 wherever that paragraph uses that term. (B) The amount counted is each participant's present, vested, and ascertainable interest. A remainder interest created by or resulting from the plan is excluded. (4) Deposit Insurance Fund. (A) The Deposit Insurance Fund is established. The Corporation must maintain and administer it, use it for its insurance purposes as this subsection provides, and invest it under section 1823(a). (B) The Fund is available for insured institutions whose deposits it insures. (C) Except for section 1823(c)(4)(G), the Fund may not be used to benefit a shareholder or affiliate of an institution, other than an insured institution receiving assistance under this chapter, in connection with: (i) resolving an insured institution for which the Corporation is conservator or receiver; (ii) resolving another insured institution that is in default or danger of default; or (iii) assistance under this section or section 1823 for an insured institution. Clause (iii) does not bar assistance to an insured institution that is not in default or danger of default and is acquiring another insured institution, as "acquiring" is defined in section 1823(f)(8)(B). (D) All amounts the Corporation assesses against insured institutions must be deposited into the Fund. (5) Certain investment contracts. (A) A liability of an insured institution is not an insured deposit if it arises under an insured-institution investment contract with an employee benefit plan that expressly permits benefit-responsive withdrawals or transfers. (B)(i) "Benefit-responsive withdrawals or transfers" means withdrawing or transferring funds during a guaranteed-rate period, without a substantial penalty or adjustment, using principal or interest credited at the guaranteed rate, to pay plan benefits or let a participant or beneficiary redirect the investment of the account balance. (ii) "Employee benefit plan" has the meaning in section 1002(3) of title 29 and includes a plan under section 401(d) of title 26. (b) Liquidation as closing of depository institution For this chapter, an insured depository institution is treated as closed because it cannot meet depositors' demands when it has been closed for liquidation without adequate provision for paying depositors. (c) Appointment of Corporation as conservator or receiver (1) The Corporation may accept appointment and act as conservator or receiver for any insured depository institution, despite Federal law, State law, or a State constitution, when appointed under (2) or (3). (2) Federal institutions. (A)(i) At the supervisory authority's discretion, the Corporation may be appointed conservator of an insured Federal depository institution and may accept. (ii) The Corporation must be appointed receiver and accept whenever the appropriate Federal banking agency appoints a receiver to liquidate or wind up an insured Federal depository institution. (B) In addition to this section's powers and duties, and consistently with them, the Corporation has every other power and related duty that another law gives to a conservator or receiver of a Federal depository institution. (C) In exercising rights, powers, and privileges under such an appointment, the Corporation is not directed or supervised by another United States or State agency or department. (D) A Federal institution for which the Corporation is conservator remains supervised by the appropriate Federal banking agency. (3) State institutions. (A) When the State authority supervising an insured State institution appoints a conservator or receiver and offers the appointment to the Corporation, the Corporation may accept. (B) The Corporation has both the powers and related duties given by State law to that conservator or receiver and this section's powers and duties. (C) The Corporation is not directed or supervised by another United States or State agency or department while exercising those rights, powers, and privileges. (D) A State institution for which the Corporation is conservator remains supervised by the appropriate State bank or savings-association supervisor. (4) The Corporation may appoint itself sole conservator or receiver of an insured State institution if it determines either that: (A)(i) a conservator, receiver, or other legal custodian has been appointed, the appointment has lasted at least 15 consecutive days, and at least one depositor cannot withdraw any amount of an insured deposit; or (ii) the institution was closed by or under State law; and (B) one or more grounds in paragraph (5) existed when the custodian was appointed or the institution was closed, or exists while the custodian is appointed or while the institution is closed. (5) Grounds for appointing a conservator or receiver include: (A) the institution's assets are less than its obligations to creditors and others, including its members; (B) its assets or earnings have been substantially dissipated because of a statute or regulation violation or an unsafe or unsound practice; (C) it is in an unsafe or unsound condition to do business; (D) it willfully violated a final cease-and-desist order; (E) it concealed books, papers, records, or assets, or refused an examiner or lawful agent of the appropriate Federal or State supervisor access to them or to its affairs; (F) it is likely unable to pay obligations or meet depositors' ordinary demands; (G) losses have depleted or are likely to deplete all or substantially all capital and there is no reasonable prospect of becoming adequately capitalized; (H) it violated a law or regulation, or engaged in an unsafe or unsound practice, in a way that is likely to weaken the institution's condition; (I) it violated a final written agreement with the appropriate agency; (J) it concealed, removed, or transferred assets or is likely to do so; (K) it is undercapitalized and has no reasonable prospect of becoming adequately capitalized; (L) it is critically undercapitalized; (M) it otherwise violated a law or regulation; or (N) the appropriate Federal banking agency or State supervisor determines that a conservator or receiver is otherwise necessary to protect depositors or the Fund. This section does not define the quoted terms in this paragraph. (6) Judicial review and hearing. (A) If the Corporation is appointed receiver under (2) or (3), the institution may bring an action in the United States district court for the district where its home office is located within 30 days after receiving notice. The court may remove the Corporation only if the appointment was arbitrary, capricious, an abuse of discretion, or otherwise not lawful. (B) The action does not stay the appointment or the Corporation's powers. (C) If an institution has not been closed and the Corporation seeks appointment under (4), the Corporation must give notice and an opportunity for a hearing before the appointment, except that it may appoint itself immediately if it determines that delay would materially harm the Corporation, the Fund, depositors, or the public. The Corporation must provide notice and a hearing after an immediate appointment. (D) The hearing rules and judicial-review rules in this paragraph apply as stated, including the court's authority to set aside an appointment that fails the standard in (A). (d) Powers and duties of the Corporation as conservator or receiver (1) Rulemaking authority. The Corporation may issue regulations it considers appropriate about how conservatorships and receiverships are conducted. (2) General powers. (A) As conservator or receiver, the Corporation automatically succeeds to all rights, titles, powers, and privileges of the insured depository institution and of its stockholders, members, accountholders, depositors, officers, and directors concerning the institution and its assets. It also takes title to the books, records, and assets held by a previous conservator or other legal custodian. (B) Subject to section 1831q, the Corporation may, as conservator or receiver, take over and operate the institution's assets, using all powers of its members or shareholders, directors, and officers, and conduct all of its business. It may collect every obligation and amount owed to the institution, perform the institution's functions in its name when consistent with its appointment, and preserve and conserve the institution's assets and property. (C) By regulation or order, it may provide for any member, stockholder, director, or officer to exercise a function of an institution for which it is conservator or receiver. (D) As conservator, it may take action necessary to put the institution in sound and solvent condition and appropriate to continue its business and preserve and conserve its assets and property. (E) Subject to section 1831q, as receiver it may liquidate the institution and realize on its assets, considering local credit conditions. (F) As receiver, it may organize a new depository institution under subsection (m) or a bridge depository institution under subsection (n). (G) As conservator or receiver, the Corporation may merge the institution with another insured depository institution. Subject to clause (ii), it may also transfer any asset or liability of the institution in default, including assets and liabilities connected with trust business, without an approval, assignment, or consent concerning the transfer. (ii) It may not transfer an asset or liability to another depository institution without approval from that institution's appropriate Federal banking agency. This approval is not required for a new depository institution or bridge depository institution established under subsection (m) or (n). (H) The Corporation must pay the institution's valid obligations as this chapter prescribes and limits. (I) For carrying out any power, authority, or duty concerning an insured depository institution—including deciding a claim against it or determining and realizing on a person's asset while collecting money owed to the institution—the Corporation may, as conservator, receiver, or exclusive manager, use any power provided by section 1818(n). That section applies to this use in the same way. A subpoena or subpoena for specified documents may be issued only by, or with written approval from, the Board of Directors or its designee. The same rule applies to a subpoena issued by the Resolution Trust Corporation under this subparagraph, using that Corporation's Board of Directors or designee. This subsection does not limit any other right the Corporation may have under section 1820(c). (J) As conservator or receiver, the Corporation may use all powers specifically given to conservators or receivers by this chapter, plus incidental powers needed to use them. It may take any action authorized by this chapter that it determines is in the best interests of the institution, its depositors, or the Corporation. (K) In managing and disposing of assets, the Corporation must use private persons for real-estate and loan-portfolio asset management, property management, auction marketing, legal services, brokerage services, and similar services only when those services are available in the private sector and the Corporation determines that using them is the most practical, efficient, and cost-effective choice. (3) Authority to determine claims. (A) As receiver, the Corporation may decide claims under this subsection and its regulations. (B) In a liquidation or winding-up of a closed depository institution, the receiver must promptly publish a notice telling creditors to submit claims and proof by a date at least 90 days after publication. It must republish the notice about one month and two months after the first publication. (C) When the notice is published, the receiver must mail a similar notice to every creditor shown in the institution's books, at the last address in those books. If the receiver discovers a claimant's name and address that are not in the books, it must mail the notice within 30 days after discovering them. (4) Rules about deciding claims. (A) The Corporation may issue regulations about the receiver's allowance or disallowance of claims and about administrative decisions and review of those decisions. (B) To maintain essential liquidity and prevent financial disruption, after an institution is declared insolvent the Corporation may settle all uninsured and unsecured receivership claims with a final settlement payment. That payment is the full payment and disposition of the Corporation's obligations to those claimants. (ii) The payment equals the final settlement payment rate multiplied by the amount of the uninsured and unsecured receivership claim. (iii) The rate is a percentage reflecting the Corporation's average receivership recoveries. The Corporation must set it so that, over the period it considers appropriate, it receives in total no more and no less than it would have received as a general creditor standing in the place of insured depositors in each particular receivership. (iv) The Corporation may take supervisory actions and issue regulations needed to implement this section if an insured depository institution becomes insolvent. (5) Procedures for deciding claims. (A)(i) Within 180 days after a claim is filed with the Corporation as receiver, the Corporation must decide whether to allow or disallow it and notify the claimant. (ii) The 180-day period may be extended only by a written agreement between the claimant and the Corporation. (iii) The notice requirement is satisfied if the decision notice is mailed to the claimant's last address shown in the institution's books, the filed claim, or documents supporting the claim. (iv) A disallowance notice must state every reason for disallowance and explain the procedures for agency review or a court decision. (B) The receiver must allow a claim received by the deadline in the published notice if the claimant proves it to the receiver's satisfaction. (C)(i) A claim filed after that deadline must be disallowed, and the disallowance is final. (ii) The receiver may consider a late claim if the claimant did not receive notice of the receiver's appointment in time to file by the deadline and the claim is filed in time to be paid. (D)(i) The receiver may disallow any unproved part of a creditor's claim, or any unproved claim of security, preference, or priority. (ii) For a claim secured by the institution's property or another asset, the receiver may treat the amount above that property's or asset's fair market value as unsecured. It may not pay that unsecured part except as part of disposing of all unsecured creditors' claims. (iii) These rules do not apply to an extension of credit from a Federal home loan bank or Federal Reserve bank to an insured depository institution, or to a security interest in the institution's assets securing such an extension. (E) No court may review the Corporation's decision under (D) to disallow a claim. (F) For any applicable statute of limitations, filing a claim with the receiver counts as starting an action. Subject to paragraph (12), filing the claim does not harm the claimant's right to continue an action filed before the receiver was appointed. (6) Agency review or court decision. (A) Within 60 days after the earlier of the end of the 180-day period in paragraph (5)(A)(i) or the date of the disallowance notice, the claimant may request administrative review under paragraph (7)(A) or (B), or file or continue a lawsuit on the claim. The lawsuit may be filed in the United States district or territorial court for the district where the institution's principal place of business is located, or in the United States District Court for the District of Columbia. That court has jurisdiction. (B) If the claimant does neither within those 60 days, the claim is deemed disallowed at the end of that period, except for any part already allowed by the receiver. The disallowance is final, and the claimant has no further rights or remedies on the claim. (7) Review of claims. (A) If a claimant asks for review instead of filing or continuing a lawsuit, and the Corporation agrees, the Corporation must consider the claim after giving the claimant an opportunity for a hearing on the record. The Corporation's final decision is subject to judicial review under chapter 7 of title 5. (B)(i) The Corporation must also establish appropriate alternative-dispute-resolution processes for claims filed under paragraph (5)(A)(i). (ii) It must strive to make those processes quick, fair, independent, and inexpensive. (iii) It may establish binding and nonbinding processes conducted by a government or private party, but every party—including the claimant and the Corporation—must agree to use the process in that particular case. (iv) The Corporation must seek to create incentives for claimants to participate. (8) Expedited decisions on certain claims. (A) The Corporation must establish a process outside the ordinary paragraph (5) process for a claimant who alleges both a legally valid and enforceable or perfected security interest in an institution's assets and irreparable injury if the ordinary process is used. (B) Within 90 days after a claim is filed under that process, the Corporation must decide whether to allow or disallow it or whether to decide it under paragraph (5), and notify the claimant. If it disallows the claim, the notice must state every reason and the procedure for agency review or a court decision. (C) A claimant who requests expedited relief may file, or continue a pre-appointment lawsuit, to decide its rights in the security interest after the earlier of the end of those 90 days or the date the Corporation denies the claim. (D) If the action is not filed, or the motion to continue the earlier lawsuit is not made, within 30 days after it may be filed under (B), the claim is deemed disallowed, except for any part already allowed. The disallowance is final and the claimant has no further rights or remedies. (E) Filing the claim starts an action for statute-of-limitations purposes, and, subject to paragraph (12), does not harm the right to continue an action filed before appointment. (9) Agreement as basis of claim. Except for the stated exception, an agreement that does not meet section 1823(e)'s requirements cannot support or substantially comprise a claim against the receiver or Corporation. An agreement for an extension of credit between a Federal home loan bank or Federal Reserve bank and an insured depository institution is treated as executed at the same time as the extension of credit, even if it was executed before the extension, despite section 1823(e)(2). (10) Payment of claims. To the extent funds are available, the receiver may pay creditor claims that it allowed, that the Corporation approved in a final decision under paragraph (7) or (8), or that a court with jurisdiction decided by final judgment, in the ways and amounts this chapter authorizes. The receiver may, in its sole discretion, pay dividends on proved claims at any time. The Corporation is not liable, as a corporation or as receiver, because it did not pay a claimant whose claim was not proved when the dividend was paid. The Corporation may issue rules, including definitions, establishing one uniform interest rate or making post-insolvency-interest payments to creditors with proved claims after the receiver has paid the principal of all creditor claims. (11) Depositor preference. Subject to section 1815(e)(2)(C), money realized from liquidation or another resolution must pay claims, except secured claims to the extent secured, in this order: (i) receiver's administrative expenses; (ii) deposit liabilities; (iii) other general or senior liabilities not listed next; (iv) obligations subordinated to depositors or general creditors, except those listed next; and (v) obligations to shareholders or members because of that status, including obligations to a depository-institution holding company or its shareholder or creditor. This priority rule does not override State law unless State law conflicts with it, and then only to the extent of the conflict. On its own motion or on a qualifying person's or State's request submitted under Corporation procedures, the Corporation must decide whether and to what extent State law conflicts with this order; its final decision is subject to judicial review under chapter 7 of title 5. A distribution on a claim in item (v) must include the accounting report required by paragraph (15)(B). (12) Suspension of legal actions. After appointment, a conservator may ask for a stay of a judicial action or proceeding involving the institution for up to 45 days, and a receiver may ask for a stay for up to 90 days. A court with jurisdiction must grant the requested stay as to all parties. (13) Other rights and duties. The Corporation must follow a final, unappealable judgment entered before its appointment. For an appealable judgment, it has all rights and remedies the institution had before appointment and the Corporation has in its corporate capacity, including removal to Federal court and appellate rights, and it need not post a bond. No court may issue attachment or execution against assets held by the receiver. Unless this subsection provides otherwise, no court has jurisdiction over a payment claim or action, or an action deciding rights in the assets, of an institution for which the Corporation is receiver, including assets the Corporation acquires from itself as receiver, or over a claim about an act or omission of the institution or receiver. When selling or disposing of assets, the Corporation must maximize net-present-value return, minimize resolution losses, ensure competition and fair and consistent treatment of offerors, prohibit discrimination based on race, sex, or ethnic groups in seeking and considering offers, and maximize preservation of affordable and available residential real property for low- and moderate-income people. (14) Time limits for actions by the Corporation. Despite a contract, a contract claim brought by the Corporation as conservator or receiver has the longer of six years from accrual or the period under State law. A tort claim, other than one covered by section 1441a(b)(14), has the longer of three years from accrual or the State-law period. The limitations period begins on the later of the Corporation's appointment or accrual of the claim. For a tort claim based on fraud, intentional misconduct resulting in unjust enrichment, or intentional misconduct causing substantial institutional loss, the Corporation may bring the claim without regard to State-law expiration if that period expired no more than five years before appointment. (15) Accounting and records. The Corporation must keep a full accounting of each conservatorship, receivership, or other disposition, following its accounting and reporting practices. For each one, it must make an annual accounting or report available to the Treasury Secretary, the Comptroller General, and the appointing authority. On request, it must make the report available to an institution shareholder or any member of the public. Generally, after six years from appointment as receiver, it may destroy records it decides are unnecessary unless a court or government agency directs otherwise or law prohibits destruction. It may destroy records that were already at least 10 years old when appointed receiver at any time after the appointment becomes final, without waiting six years. (16) State housing finance authorities. The Corporation may contract with a State housing finance authority to sell mortgage-related assets of an institution in default, including trust-business assets and liabilities. The contract takes effect under its terms without another approval, assignment, or consent. In deciding on the sale, the Corporation must consider the authority's ability to acquire and service current, delinquent, and defaulted mortgage assets; advance national housing policies; respond to effects on State and local communities; reduce Federal costs compared with other ownership or disposition; reduce future Federal guarantees; maximize asset values; and use institutions already active in mortgage-asset markets. (17) Fraudulent transfers. The Corporation as conservator or receiver, and a conservator appointed by the Comptroller of the Currency, may avoid a transfer of an institution-affiliated party's or a person the Corporation or conservator decides is an institutional debtor's interest in property, or an obligation incurred by that party or person, if it occurred within five years before appointment and was made voluntarily or involuntarily with intent to hinder, delay, or defraud the institution, the Corporation or another conservator, or another appropriate Federal banking agency. After avoiding it, they may recover the transferred property for the institution, or its value when transferred if a court orders, from the initial transferee, the person who benefited, or an immediate or later transferee. They may not recover from a transferee who took for value and in good faith, or from a later good-faith transferee of that transferee. These rights are superior to rights under title 11 of a trustee or other party, except a Federal agency. (18) Attachment and injunctions. Subject to paragraph (19), a court with jurisdiction may, at the Corporation's request (in its receiver, conservator, or corporate capacity for covered assets or liabilities) or at the request of a Comptroller-appointed conservator, issue relief under Federal Rule of Civil Procedure 65, including placing a person's assets under court control and appointing a trustee to hold them. (19) Rule 65 applies without requiring proof that the injury, loss, or damage is irreparable and immediate. In a State case, the request may be made under State law if the court finds that State procedures give substantially similar due-process protection. (20) A final, unappealable money judgment for breach of an agreement executed or approved after appointment by a receiver or conservator is an administrative expense. This does not limit the receiver's or conservator's power to terminate, breach, cancel, or otherwise discontinue the agreement under contract or law. (e) Provisions relating to contracts entered into before appointment of conservator or receiver (1) The conservator or receiver may disaffirm or repudiate a contract or lease if the institution is a party, the Corporation decides performance is burdensome, and it decides repudiation will promote orderly administration. (2) It must decide whether to use this power within a reasonable time after appointment. (3) Claims for damages for repudiation. Except for the special rules below, liability is limited to actual, direct compensatory damages measured on the appointment date. For a contract covered by paragraph (8), damages are measured on the date of disaffirmance or repudiation. “Actual direct compensatory damages” does not include punitive or exemplary damages, lost profits or opportunity, or pain and suffering. For a qualified financial contract covered by paragraph (8), compensatory damages include normal and reasonable costs of cover or other reasonable industry measures, and are paid under this subsection and subsection (i) unless this section specifically says otherwise. (4) Lease where the institution is lessee. If the Corporation repudiates such a lease, it owes no damages other than the amounts in (B). The lessor is entitled to contractual rent accruing before the later of the date the repudiation notice is mailed or repudiation becomes effective, unless the lessor is in default or breach. The lessor cannot claim accelerated rent or another lease penalty. It may claim unpaid rent due on the appointment date, subject to offsets and defenses, paid under this subsection and subsection (i). (5) Lease where the institution is lessor. If the Corporation repudiates an unexpired written real-property lease and the lessee was not in default on the repudiation date, the lessee may treat the lease as ended or remain in possession for the rest of the term unless it later defaults. A lessee remaining must keep paying contractual rent. It may offset against later rent damages caused after repudiation by the institution's failure to perform its lease duties. The Corporation owes no later damages from repudiation other than that allowed offset. (6) Sale of real property. If the Corporation repudiates a contract meeting section 1823(e)'s requirements, and the purchaser is in possession and not in default on the repudiation date, the purchaser may treat the contract as ended or remain in possession. A purchaser remaining must make all later payments and may offset later damages caused by the institution's later nonperformance. The Corporation owes no later repudiation damages other than that offset, must deliver title as the contract requires, and has no other contractual duty. The Corporation may still assign the contract and sell the property. After that assignment and sale, it has no further liability under the contract or concerning the property. (7) Service contracts. A claim for services performed before appointment is payable under subsections (d) and (i) and is treated as arising on the appointment date. If the Corporation accepts services before deciding whether to repudiate, it must pay under the contract and treat the payment as an administrative expense. Accepting those services does not prevent later repudiation. (8) Qualified financial contracts—rights and definitions. (A) Subject to paragraphs (9) and (10), and despite other Federal or State law except subsection (d)(9) and section 1823(e), a person may, after appointment of a receiver, exercise a right to terminate, liquidate, or accelerate a qualified financial contract; use related security, credit-enhancement, or similar arrangements; and offset or net termination values, payment amounts, or other transfer obligations, including under a master agreement. (B) Subsection (d)(12) applies to a related court action. (C) The Corporation generally may not avoid a money or property transfer connected with a qualified financial contract, despite paragraph (11), section 91, or other fraudulent- or preferential-transfer law. It may avoid the transfer if it decides the transferee actually intended to hinder, delay, or defraud the institution, its creditors, or its conservator or receiver. (D) “Qualified financial contract” means a securities contract, commodity contract, forward contract, repurchase agreement, swap agreement, or similar agreement the Corporation designates by regulation, resolution, or order. “Securities contract” includes contracts to buy, sell, or lend securities, certificates of deposit, mortgage loans or interests, groups or indexes of them, or options; repurchase or reverse-repurchase transactions in those items; foreign-currency exchange options on a national securities exchange; guarantees by or to a securities clearing agency of settlements of those items; margin loans; credit for clearing or settling securities transactions; securities-collar loans, prepaid securities forwards, total-return swaps coupled with securities sales; similar agreements; combinations; options to enter them; qualifying master agreements and supplements; and related security, credit-enhancement, guarantee, or reimbursement arrangements. It does not include a purchase, sale, or repurchase obligation under a commercial-mortgage-loan participation unless the Corporation designates it by regulation, resolution, or order. “Commodity contract” includes, for the named types of participants, contracts for future commodity delivery or sale on a contract market or board of trade, foreign futures, leverage transactions, qualifying contracts or commodity options cleared by a clearing organization, commodity options, similar agreements, combinations, entry options, qualifying master agreements and supplements, and related security, credit-enhancement, guarantee, or reimbursement arrangements. “Forward contract” includes a non-commodity contract for future purchase, sale, or transfer of a commodity or similar good, article, service, right, or interest with maturity more than two days after formation; repurchase or reverse-repurchase transactions, consignment, lease, swap, hedge, deposit, loan, option, allocated or unallocated transactions, and similar agreements; combinations, entry options, qualifying master agreements and supplements, and related security or credit enhancement. “Repurchase agreement,” including a reverse repurchase agreement, includes an agreement to transfer certificates of deposit, mortgage-related securities, mortgage loans or interests, eligible bankers' acceptances, qualified foreign-government securities, or United States or agency obligations, for funds, with an agreement to transfer equivalent items back by a date no later than one year or on demand. It also includes similar agreements, combinations, entry options, qualifying master agreements and supplements, and related security or credit enhancement. A commercial-mortgage-loan participation is excluded unless the Corporation designates it. “Swap agreement” includes agreements for payments based on interest, currencies, commodities, securities, prices, rates, yields, indices, or similar financial or economic measures or events; combinations, entry options, qualifying master agreements and supplements, and related security or credit enhancement. “Master agreement” and its supplements are treated as one agreement and one qualified financial contract, but only as to transactions that are themselves qualified financial contracts. “Transfer” includes every direct or indirect, absolute or conditional, voluntary or involuntary way of disposing of or parting with property or an interest in property, including retaining title as security and foreclosing the institution's equity of redemption. “Person” includes a governmental entity. This section does not otherwise define quoted terms such as “security,” “commodity,” “forward contract trade,” or “clearing organization.” (E) In a conservatorship, a person may exercise a right to terminate, liquidate, or accelerate a qualified financial contract after a default enforceable under noninsolvency law, use related security or credit enhancement, or offset or net related obligations. (F) No law may limit or authorize a court or agency to limit or delay the Corporation's power to transfer a qualified financial contract under paragraphs (9) and (10), or repudiate it under paragraph (1). (G) Walkaway clauses. A walkaway clause in a qualified financial contract of an institution in default is not enforceable. Payment or delivery obligations otherwise due from a party are suspended from receiver appointment until the earlier of notice that the contract was transferred or 5:00 p.m. Eastern time on the next business day. A “walkaway clause” is a provision that, solely because the party is a nondefaulting party and the institution is insolvent or has a conservator or receiver, suspends, conditions, or ends all or part of that party's payment duty, or fails to create a payment duty that otherwise would exist. This does not cover a party's exercise of offset or netting rights. (H) In consultation with the appropriate Federal banking agencies, the Corporation may require more detailed qualified-financial-contract records, including market values, only for an insured institution in “troubled condition,” a term the Corporation defines under section 1831i. (9) Transfer of qualified financial contracts. (A) If a transfer includes a qualified financial contract, the receiver must either transfer to one financial institution that is not in conservatorship, receivership, bankruptcy, insolvency, or a similar custody all qualified financial contracts between the institution and a person or that person's affiliate, all related claims except subordinated general-unsecured claims, all claims of the institution against that person or affiliate under those contracts, and all property and other credit enhancement securing them; or transfer none of those contracts, claims, property, or credit enhancement for that person and affiliate. (B) It may not transfer them to a foreign bank, foreign financial institution, or foreign branch or agency unless the applicable law makes the parties' contractual rights under the contracts, netting agreements, security arrangements, and credit enhancements enforceable to substantially the same extent as this section. (C) If a transferred contract is cleared by or subject to a clearing organization's rules, the organization need not accept the transferee as a member merely because of the transfer. (D) “Financial institution” means a broker or dealer, depository institution, futures commission merchant, or another institution the Corporation defines by regulation. “Clearing organization” has the meaning in section 4402. (10) Notice of transfer. If a conservator or receiver transfers assets or liabilities including a qualified financial contract, it must notify each party by 5:00 p.m. Eastern time on the next business day after receiver appointment, or, in a conservatorship, the next business day after the transfer. In a receivership, the party may not terminate, liquidate, or net solely because of appointment or insolvency until that time, or after receiving notice of transfer. In a conservatorship, the party may not do so solely for that reason. Reasonable steps calculated to provide notice count as notice. A bridge institution and a Corporation-organized institution with a conservator appointed on organization or in a purchase-and-assumption transaction are not treated as institutions in custody or insolvency proceedings for paragraph (8). “Business day” excludes Saturday, Sunday, and days when the New York Stock Exchange or Federal Reserve Bank of New York is closed. (11) Repudiation of qualified financial contracts. The Corporation must either repudiate all qualified financial contracts between the institution and a person or that person's affiliate, or repudiate none of them. (12) Security interests. This subsection does not permit avoidance of a legally enforceable or perfected security interest in an institution's assets, unless the interest was taken in contemplation of insolvency or with intent to hinder, delay, or defraud the institution or its creditors. (13) Enforcement of contracts. The Corporation may enforce any institutional contract other than a director's or officer's liability-insurance contract or a depository-institution bond, despite a term allowing termination, default, acceleration, or rights based solely on insolvency or a conservator's or receiver's appointment or powers. This does not affect enforcement or recovery under those excluded insurance contracts or bonds under other law. Unless this section or section 1825 provides otherwise, no person may, without the Corporation's consent, terminate or accelerate an institutional contract, declare default, take the institution's property, control it, or affect the institution's contractual rights during 45 days after conservator appointment or 90 days after receiver appointment. The exceptions cover the excluded insurance contracts and bonds, qualified financial contracts, and netting contracts under the Financial Institutions Improvement Act. This rule does not limit title 11 and does not allow the Corporation to disregard otherwise enforceable contract terms. (14) Federal Reserve and Federal home loan banks. This subsection does not apply to an extension of credit from a Federal home loan bank or Federal Reserve bank to an insured institution, or to a security interest in the institution's assets securing that extension. (15) Credit-card receivable agreements. An undercapitalized insured institution must notify the Corporation in writing before agreeing to sell credit-card accounts receivable. The Corporation may, at any time and on its chosen terms, waive its right to repudiate that agreement if it finds the waiver is in the Deposit Insurance Fund's best interests and gives the selling institution a written waiver. If it does, a term restricting solicitation of the seller's credit-card customer or use of its customer list binds a receiver or conservator, and the Corporation must require an acquirer of the institution or substantially all its assets or liabilities to accept the same term. That requirement does not stop the acquirer from offering products or services to a person identified without improperly using the list, restrict a preexisting customer relationship, or apply when the acquirer buys only insured deposits. The Corporation is not liable for damages from waiving or failing to waive its repudiation right, and no court may issue an order affecting that choice. This paragraph does not limit other waiver authority. (16) Credit-card customer lists. If an institution sells credit-card accounts receivable in an arm's-length agreement that also sells its customer list, the Corporation must prohibit parties to a transaction concerning the institution under this section or section 1823 from using the list except as the agreement permits. This does not limit repudiation of an agreement made with intent to hinder, delay, or defraud the institution, its creditors, or the Corporation. (17) Savings clause. The meanings of terms in this subsection apply only here. They must not be interpreted or applied to challenge or affect the characterization, definition, or treatment of similar terms under another statute, regulation, or rule, including the Gramm-Leach-Bliley Act, the Legal Certainty for Bank Products Act of 2000, the securities laws, or the Commodity Exchange Act. (f) Payment of insured deposits The Corporation must promptly pay insured deposits, or make available the insured amount, when an insured depository institution is closed or placed in receivership. It may pay by cash, check, credit, transfer, or another method it determines. Payment discharges the Corporation's obligation for the insured amount and gives it the depositor's rights to that extent. The Corporation may require proof of the deposit, may offset amounts the depositor owes the institution as permitted by law, and may withhold payment when ownership or the amount of the deposit is disputed. (g) Subrogation of Corporation When the Corporation pays an insured deposit, it is subrogated to the depositor's rights against the institution and its assets for the amount paid. It also succeeds to the depositor's rights against any other person or property connected with the deposit. The Corporation has priority over the depositor for the subrogated amount. The depositor keeps the right to collect the uninsured part, subject to the Corporation's rights. (h) Conditions applicable to resolution proceedings The Corporation may resolve an insured institution only under the conditions and procedures in this section. It must consider the cost to the Deposit Insurance Fund and may select the method that is least costly to the Fund, unless the statutory systemic-risk exception applies. Before using that exception, the required Treasury, Federal Reserve, and Corporation officials must make the findings and certifications required by this subsection. The Corporation must maximize the net present value of assets and minimize losses, and must not take an action to benefit shareholders of the failed institution unless this section permits it. (i) Valuation of claims in default When an institution is in default, the Corporation determines the value of claims and interests against it using the institution's value in liquidation. A claim is valued as though the Corporation liquidated the institution, including the value of collateral and any amounts that could be recovered. The valuation must use reasonable assumptions and available information. A claimant may not receive more than it would have received in a liquidation. The Corporation may make later adjustments when additional information changes the value. (j) Limitation on court action Except as this section provides, no court may restrain or affect the Corporation's exercise of powers or functions as conservator or receiver. The only exception is an action requested by the Board of Directors through a regulation or order. (k) Liability of directors and officers A director or officer of an insured depository institution may be personally liable for monetary damages in a civil action brought by, for, or at the Corporation's request or direction, when the action is wholly or partly for the Corporation's benefit. Liability may be based on gross negligence, reckless conduct, or a higher level of culpability, as the applicable law provides. The Corporation must prove the conduct, the duty, and the damages. The subsection's standards and limitations apply to the action, and this section does not define the quoted terms. (l) Damages In a proceeding involving a claim against a director, officer, employee, agent, attorney, accountant, appraiser, or other person employed by or providing services to an insured institution, damages caused by an improvident or otherwise improper use or investment of institution assets include the principal loss and appropriate interest. (m) New depository institutions The Corporation may organize a new depository institution when necessary to carry out this section. The new institution may receive transferred assets and liabilities, operate under a charter and bylaws approved under the statute, and provide banking services. The Corporation may serve as its stockholder or manager, appoint its directors and officers, and transfer or sell its stock or assets. The institution is subject to the laws and supervision that apply to its charter. The Corporation may dissolve it or merge it when the resolution is complete. (n) Bridge depository institutions (1) The Corporation may organize a bridge depository institution to assume deposits, other liabilities, and assets of a depository institution in default. It may charter one itself or request the Comptroller of the Currency to charter one. A bridge institution must be a national bank or Federal savings association, as appropriate, and must have the powers and duties stated in this subsection. (2) The Corporation, as receiver, may transfer to the bridge institution any assets and liabilities of the failed institution. The transfer may occur without approval or consent of shareholders, creditors, or other persons. The bridge institution succeeds to the transferred rights and may operate them under the Corporation's direction. (3) The Corporation may transfer additional assets and liabilities after the initial transfer. It may transfer assets subject to liens and may transfer selected liabilities without transferring all liabilities. A liability that is not transferred remains a claim against the receivership. (4) The bridge institution has the same rights, powers, privileges, and immunities as a national bank or Federal savings association, as appropriate. It may accept deposits, make loans, purchase or sell property, and perform the transferred business. It is not liable for obligations that were not transferred to it. (5) The Corporation may provide capital, borrow for the bridge institution, guarantee its obligations, and transfer assets to it. The Corporation may own its stock and exercise the stockholder's rights. It may appoint an interim director, directors, officers, employees, and agents; remove them; and set their pay and duties. (6) A Corporation representative, interim director, director, officer, employee, or agent of a bridge institution does not lose an existing United States officer or employee status merely because of that service. The person may not receive salary or benefits for bridge-institution service in addition to salary or benefits received through employment with the Corporation or the relevant Federal instrumentality. (7) The Corporation may provide assistance under section 1823(c) to facilitate a transaction involving a bridge institution, or to help it acquire assets or assume liabilities of an institution in default, in the same manner and to the same extent as assistance for an insured institution in default. (8) Acquisition. (A) The responsible agency must notify the Attorney General of a merger or sale requiring approval under section 1828(c). If a competitive-factors report is requested within 10 days, the transaction may not close until the fifth calendar day after agency approval. If the agency finds immediate action necessary to prevent probable failure, the transaction may close immediately after approval. (B) A depository institution, including an out-of-State institution, or an out-of-State holding company may acquire and retain a bridge institution's stock or assets, or otherwise acquire and retain it, if the bridge institution at any time had at least $500,000,000 in assets, as determined from the relevant reports of condition. The acquisition may occur only in the manner and to the extent allowed for acquiring an institution in default under section 1823(f)(2). (9) Unless (11) or (12) applies, bridge status ends two years after chartering. The Board of Directors may extend it for three additional one-year periods. (10) Bridge status ends first when: (A) the bridge institution merges or consolidates with a non-bridge institution; (B) the Corporation elects to sell a majority of its stock to a person other than the Corporation or another bridge institution; (C) 80 percent or more of its stock is sold to such a person; (D) the Corporation elects to have a holding company or non-bridge institution assume all or substantially all deposits and other liabilities, or have a permitted entity acquire all or substantially all assets; or (E) the period in (9) expires or the bridge institution is dissolved under (12). (11) After a merger or consolidation, the resulting institution is a national bank or Federal savings association with all corresponding rights, powers, and privileges, and the transaction has the effect applicable law provides. After a majority-stock sale, the Corporation may amend the charter to end bridge status, while the institution remains the appropriate national bank or Federal savings association subject to applicable laws and regulations. After an 80-percent stock sale, it remains that kind of institution with those rights and restrictions. After assumption of substantially all liabilities or sale of substantially all assets, the Corporation may let the bridge institution keep bridge status for the period in (9). A holding company that acquired the bridge institution under section 1823(f), paragraph (8)(B), or both is not impaired by termination and keeps the rights and privileges in section 1823(f). After any listed transaction, the resulting charter must be amended when appropriate. (12) If bridge status has not already ended under (10)(A)-(D), the Board may dissolve the bridge institution at any time and must promptly begin dissolution when the two-year period or an extension ends. The Comptroller must appoint the Corporation receiver after the Board certifies its decision to dissolve. The Corporation must wind up the bridge institution under the laws for liquidating a closed national bank or Federal savings association. It has the rights, powers, privileges, and related duties of a receiver of an insured institution and is not directed or supervised by a State or another Federal agency while exercising them. (13) Subject to paragraph (1)(B)(i), the Corporation may organize two or more bridge institutions to assume deposits or other liabilities and purchase assets of one institution in default. (o) Supervisory records In addition to the records required under section 1817(a)(2), whenever the Corporation is receiver for an insured institution, the appropriate Federal banking agency must make all supervisory records available to the receiver. The receiver may use those records in any manner it considers appropriate. (p) Certain sales of assets prohibited (1) The Corporation must issue regulations that at least prohibit selling a failed institution's assets to: (A) a person who defaulted, or whose partnership or corporation did, on one or more obligations totaling more than $1,000,000 to the failed institution, was found to have engaged in fraud connected with such an obligation, and proposes to buy the asset using a loan or credit from the Corporation or an institution for which the Corporation is conservator or receiver; (B) a person who, as an officer or director of the failed institution or its affiliate, materially participated in transactions causing it substantial loss; (C) a person removed from, or barred from participating in, the failed institution's affairs by a final enforcement action of the appropriate Federal banking agency; or (D) a person with a pattern or practice of defalcation concerning obligations to the failed institution. (2) Except under (3), a person may not buy an institution's asset from its conservator or receiver if the person was convicted of an offense under section 215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341, 1343, or 1344 of title 18, or conspiracy to commit one, affecting an institution for which a conservator or receiver was appointed, and is in default on a loan or other credit from that institution whose nonpayment would cause substantial loss to the institution, the Fund, or the Corporation. (3) The restrictions in (1) and (2) do not apply when the sale or transfer resolves, settles, or helps resolve or settle a claim the Corporation asserted or could assert against the person, or an obligation the person owes an insured institution or the Corporation. (4) For this subsection, "default" means failure to comply with a loan or other obligation so that the property securing it is foreclosed. (q) Expedited procedures for certain claims (1) In a case brought by the Corporation against an institution's director, officer, employee, agent, attorney, accountant, appraiser, other employee, or service provider, notice of appeal from any interlocutory or final order must be filed within 30 days after entry. The appeal hearing must occur within 120 days after the notice, and the appeal must be decided within 180 days after the notice. (2) Consistent with section 1657 of title 18, a United States court must expedite such a case and, as far as practical, give it docket priority. (3) The court may change these schedules and limits in a particular case only after specifically finding that the justice served by the change outweighs the public interest in speedy resolution. (r) Foreign investigations As conservator or receiver, and to carry out powers, authority, or duties concerning an insured institution, the Corporation may request help from a foreign banking authority and provide help to one under section 1818(v). It may maintain an office to coordinate foreign investigations or investigations for foreign banking authorities. (s) Secrecy agreements and protective orders The Corporation may not enter an agreement or approve a protective order that bars it from disclosing the terms of a settlement of an administrative or other action for damages or restitution brought by the Corporation as conservator or receiver. (t) Sharing information without waiving privilege (1) A covered agency does not waive a privilege over information merely by transferring it to, or allowing it to be used by, another covered agency or another Federal agency. (2)(A) A "covered agency" is any Federal banking agency, the Farm Credit Administration, the Farm Credit System Insurance Corporation, the National Credit Union Administration, the Government Accountability Office, the Bureau of Consumer Financial Protection, or the Federal Housing Finance Agency. (B) "Privilege" includes work-product, attorney-client, and any other privilege recognized under Federal or State law. (3) This rule does not imply that a person waives a privilege merely because paragraph (1) does not apply to a transfer or use. (u) Purchase rights of tenants (1) Except under (3), the Corporation may offer for sale a one- to four-family residence, including a manufactured home, to which it has acquired title only after giving the household living there written notice, mailed to the property, that the property is available and that the household has the preference in (2). (2) When selling it, the Corporation must prefer a bona fide offer from the resident household if: (A) the offer is substantially similar in amount to other offers made, or expected to be made, during the relevant period; (B) it is made while the property is available and during a reasonable period based on the normal sale period for such properties; and (C) the household meets all other purchaser requirements, including down-payment and credit requirements. (3) These rules do not apply to a residence transferred with substantially all assets of an institution for which the Corporation is conservator or receiver; an eligible single-family property as defined in section 1831q(p); or a residence where the occupying household was the mortgagor and the Corporation acquired title because of mortgage default. (v) Preference for sales for homeless families Subject to (u), when selling real property to which it acquired title, other than eligible residential or eligible condominium property as defined in section 1831q(p), the Corporation must prefer, among offers producing the same net present value, an offer that would use the property during its remaining useful life to provide housing or shelter for homeless persons or homeless families. The term "homeless persons" has the meaning in section 11302 of title 42; this section does not define it. (w) Preferences for sales of certain commercial real properties (1) When selling its eligible commercial real property, the Corporation must prefer, among offers producing the same net present value, an offer from a public agency or nonprofit organization under which the buyer agrees to use the property during its remaining useful life for the buyer's offices or administrative work in a program acquiring residential property to provide homeownership or rental opportunities for very-low-, low-, and moderate-income families, or housing or shelter for homeless persons or homeless families. (2)(A) "Eligible commercial real property" means property to which the Corporation acquired title and that it decides is suitable for offices or administrative functions for such a program. (B) "Nonprofit organization" and "public agency" have the meanings in section 1831q(p).