[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2847 Introduced in Senate (IS)]
110th CONGRESS
2d Session
S. 2847
To amend the Federal Home Loan Bank Act to allow Federal home loan
banks to invest surplus funds in student loan securities and make
advances for student loan financing, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 10, 2008
Mr. Kerry 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 Home Loan Bank Act to allow Federal home loan
banks to invest surplus funds in student loan securities and make
advances for student loan financing, 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. SHORT TITLE.
This Act may be cited as the ``Emergency Student Loan Market
Liquidity Act''.
SEC. 2. EMERGENCY STUDENT LOAN MARKET LIQUIDITY.
The 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:
``SEC. 30. EMERGENCY AUTHORITY.
``(a) Investment of Surplus.--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) Collateral.--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) Long-Term Advances.--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) Definitions.--For purposes of this section, the following
definitions shall apply:
``(1) Student loan-related security.--The 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 following
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 loans.--The 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) Student loan.--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) Effective period.--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) Exception.--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.''.
<all>