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1 H.R. 4302, Congressional Accountability for Emergency Lending Programs Act of 2017 1 (September 18, 2018)

handle is hein.congrec/cbocaelp0001 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE U COST ESTIMATE September 18, 2018 H.R. 4302 Congressional Accountability for Emergency Lending Programs Act of 2017 As ordered reported by the House Financial Services Committee on November 14, 2017 H.R. 4302 would amend the Federal Reserve's authority under section 13(3) of the Federal Reserve Act to create and use certain lending facilities. Under current law, the Federal Reserve has broad discretion to make loans to banks and nonbanks under unusual and exigent circumstances. Such lending requires the approval of the Secretary of the Treasury and at least five members of the Board of Governors of the Federal Reserve, must have broad-based participant eligibility, and cannot be made to insolvent firms. In 2008, the Federal Reserve exercised its section 13(3) authority to create new lending facilities to provide liquidity in the context of the financial crisis. That lending resulted in interest earnings for the Federal Reserve that increased its remittances to the Treasury, which are recorded in the budget as revenues. H.R. 4302 would make a number of changes to the Federal Reserve's Section 13(3) lending authority: Limit eligibility to firms predominantly engaged in financial activities, Require that emergency lending be used only for circumstances that pose a threat to the financial stability of the United States, Require approval of the Secretary of the Treasury and two-thirds of the members of the Federal Open Market Committee for emergency lending, Prohibit the Federal Reserve from accepting equity capital as collateral for emergency lending and require the Federal Reserve to issue a rule with standards for collateral taken against emergency lending, Add, as a condition of emergency lending, that all federal banking regulators with jurisdiction over a borrower to certify that the borrower is not insolvent.

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