§ 347b. Advances to individual member banks on time or demand notes; maturities; time notes secured by mortgage loans covering one-to-four family residences
(a)
In general
Any Federal Reserve bank, under rules and regulations prescribed by the Board of Governors of the Federal Reserve System, may make advances to any member bank on its time or demand notes having maturities of not more than four months and which are secured to the satisfaction of such Federal Reserve bank.
Notwithstanding the foregoing, any Federal Reserve bank, under rules and regulations prescribed by the Board of Governors of the Federal Reserve System, may make advances to any member bank on its time notes having such maturities as the Board may prescribe and which are secured by mortgage loans covering a one-to-four family residence. Such advances shall bear interest at a rate equal to the lowest discount rate in effect at such Federal Reserve bank on the date of such note.
(b)
Limitations on advances
(1)
Limitation on extended periods
Except as provided in paragraph (2), no advances to any undercapitalized depository institution by any Federal Reserve bank under this section may be outstanding for more than 60 days in any 120-day period.
(2)
Viability exception
(A)
In general
If—
(i)
the head of the appropriate Federal banking agency certifies in advance in writing to the Federal Reserve bank that any depository institution is viable; or
(ii)
the Board conducts an examination of any depository institution and the Chairman of the Board certifies in writing to the Federal Reserve bank that the institution is viable,
the limitation contained in paragraph (1) shall not apply during the 60-day period beginning on the date such certification is received.
(B)
Extensions of period
The 60-day period may be extended for additional 60-day periods upon receipt by the Federal Reserve bank of additional written certifications under subparagraph (A) with respect to each such additional period.
(C)
Authority to issue a certificate of viability may not be delegated
The authority of the head of any agency to issue a written certification of viability under this paragraph may not be delegated to any other person.
(D)
Extended advances subject to paragraph (3)
Notwithstanding paragraph (1), an undercapitalized depository institution which does not have a certificate of viability in effect under this paragraph may have advances outstanding for more than 60 days in any 120-day period if the Board elects to treat—
(3)
Advances to critically undercapitalized depository institutions
(A)
Liability for increased loss
Notwithstanding any other provision of this section, if—
(i)
in the case of any critically undercapitalized depository institution—
(ii)
after the end of that 5-day period, the Deposit Insurance Fund of the Federal Deposit Insurance Corporation incurs a loss exceeding the loss that the Corporation would have incurred if it had liquidated that institution as of the end of that period,
the Board shall, subject to the limitations in subparagraph (B), be liable to the Federal Deposit Insurance Corporation for the excess loss, without regard to the terms of the advance or any collateral pledged to secure the advance.
(B)
Limitation on excess loss
The liability of the Board under subparagraph (A) shall not exceed the lesser of the following:
(4)
No obligation to make advances
A Federal Reserve bank shall have no obligation to make, increase, renew, or extend any advance or discount under this chapter to any depository institution.
(5)
Definitions
(A)
Appropriate Federal banking agency
The term “appropriate Federal banking agency” has the same meaning as in section
1813 of this title.
(B)
Critically undercapitalized
The term “critically undercapitalized” has the same meaning as in section
1831o of this title.
(C)
Depository institution
The term “depository institution” has the same meaning as in section
1813 of this title.
(D)
Undercapitalized depository institution
The term “undercapitalized depository institution” means any depository institution which—