110 HR 5723 IH: To amend the Federal Home Loan Bank Act to allow Federal
U.S. House of Representatives
2008-04-08
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EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the
Emergency Student Loan Market Liquidity Act
.
2.Emergency student
loan market liquidityThe
Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is amended—
(1)by redesignating
section 30 as section 31; and
(2)by
inserting after section 29, the following new section:
30.
(a)Such part of the
assets of each Federal home loan bank (except reserves and amounts provided for
in subsection (g) of section 11) as are not required for advances to members,
may be invested in student loan-related securities in addition to the other
investments described in subsection (h) of such section.
(b)For purposes of section 10(a)(3), the
following shall be considered eligible collateral in addition to the other
categories of eligible collateral described in such section:
(1)Student loan-related securities.
(2)Student loans.
(c)Notwithstanding
section 10(a)(2), any Federal home loan bank may make secured long-term
advances upon sufficient collateral for purposes of providing funds to any
member for financing the origination of student loans or the purchase or
financing of student loan-related securities.
(d)For purposes of this section, the following
definitions shall apply:
(1)Student
loan-related securityThe term student loan-related
security
means a security that—
(A)is rated in 1 of
the 3 highest rating categories (without regard to any refinement or gradation
of such rating category by a numerical modifier or otherwise) by at least one
nationally recognized statistical rating organization; and
(B)is described in at
least 1 of the clauses:
(i)Represents an
interest in student loans.
(ii)Is a bond, note
or other obligation payable from and secured by an interest in student
loans.
(iii)Is a bond, note
or other obligation that—
(I)is part of an
issue of securities issued for the purpose of providing funds to purchase or
originate student loans; and
(II)will be payable
from and secured by an interest in such student loans.
(2)Interest in
student loansThe term interest in student loans
includes ownership rights in, or certificates of interest or participation
interests in, such student loans or the promissory notes evidencing such
student loans and rights designated to assure servicing of such promissory
notes, or the receipt or timely receipt of amounts payable and under such
promissory notes or the timely distribution thereof to the holders of such
interest.
(3)The term student
loan
means any loan made under subtitle B of title IV of the Higher
Education Act of 1965 (whether to a student, the parents of a student, or a
consolidating borrower).
(e)Temporary nature
of relief
(1)Except as provided in
paragraph (2), this section shall be effective for investments and advances
made between February 1, 2008, and the end of the 2-year period beginning on
the date of the enactment of the Emergency Student Loan Market Liquidity
Act.
(2)Notwithstanding
the expiration of the effective period of this section—
(A)any investment by any Federal home loan
bank under subsection (a) in any student loan-related security shall remain an
authorized investment of such bank through the maturity of such security;
and
(B)any student loan-related securities or
student loans held by any Federal home loan bank as collateral under subsection
(b) for an advance to a member under subsection (c) may continue to be held by
the bank as security until the advance matures or is otherwise repaid or
extinguished.
.