General rule
section 1821(e) of this titlesection 5390(c) of this titlesection 4617 of this titlesection 1787(c) of this titlesection 78eee(b)(2) of title 15section 561(b)(2) of title 11Notwithstanding any other provision of State or Federal law (other than , , , , or any order authorized under ), the covered contractual payment obligations and the covered contractual payment entitlements between any 2 financial institutions shall be terminated, liquidated, accelerated, and netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract (except as provided in ).
Limitation on obligation to make payment
The only obligation, if any, of a financial institution to make payment with respect to covered contractual payment obligations to another financial institution shall be equal to its net obligation to such other financial institution, and no such obligation shall exist if there is no net obligation.
Limitation on right to receive payment
The only right, if any, of a financial institution to receive payments with respect to covered contractual payment entitlements from another financial institution shall be equal to its net entitlement with respect to such other financial institution, and no such right shall exist if there is no net entitlement.
Payment of net entitlement of failed financial institution
The net entitlement of any failed financial institution, if any, shall be paid to the failed financial institution in accordance with, and subject to the conditions of, the applicable netting contract.
Effectiveness notwithstanding status as financial institution
This section shall be given effect notwithstanding that a financial institution is a failed financial institution.
Enforceability of security agreements
section 561(b)(2) of title 11section 1821(e) of this titlesection 1787(c) of this titlesection 78eee(b)(2) of title 15The provisions of any security agreement or arrangement or other credit enhancement related to one or more netting contracts between any 2 financial institutions shall be enforceable in accordance with their terms (except as provided in ), and shall not be stayed, avoided, or otherwise limited by any State or Federal law (other than , , and ).
Pub. L. 102–242, title IV, § 403105 Stat. 2374Pub. L. 109–8, title IX, § 906(b)119 Stat. 168Pub. L. 109–390, § 4(a)120 Stat. 2695Pub. L. 111–203, title II, § 211(c)124 Stat. 1514(, , ; , , ; , , ; , , .)
Editorial Notes
Amendments
Pub. L. 111–203section 5390(c) of this titlesection 4617 of this titlesection 1821(e) of this title2010—Subsec. (a). inserted “, ,” after “,”.
Pub. L. 109–3902006—Subsec. (a). struck out “paragraphs (8)(E), (8)(F), and (10)(B) of” before “section 1821(e)” and “section 1787(c)” and inserted “terminated, liquidated, accelerated, and” after “institutions shall be”.
Pub. L. 109–390, § 4(a)(1)Subsec. (f). , struck out “paragraphs (8)(E), (8)(F), and (10)(B) of” before “section 1821(e)” and “section 1787(c)”.
Pub. L. 109–8, § 906(b)(1)2005—Subsec. (a). , added subsec. (a) and struck out heading and text of former subsec. (a). Text read as follows: “Notwithstanding any other provision of law, the covered contractual payment obligations and the covered contractual payment entitlements between any 2 financial institutions shall be netted in accordance with, and subject to the conditions of, the terms of any applicable netting contract.”
Pub. L. 109–8, § 906(b)(2)Subsec. (f). , added subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Pub. L. 111–203section 4 of Pub. L. 111–203section 5301 of this titleAmendment by effective 1 day after , except as otherwise provided, see , set out as an Effective Date note under .
Effective Date of 2006 Amendment
Pub. L. 109–390section 7 of Pub. L. 109–390section 101 of Title 11Amendment by not applicable to any cases commenced under Title 11, Bankruptcy, or to appointments made under any Federal or State law, before , see , set out as a note under .
Effective Date of 2005 Amendment
Pub. L. 109–8section 1501 of Pub. L. 109–8section 101 of Title 11Amendment by effective 180 days after , and not applicable with respect to cases commenced under Title 11, Bankruptcy, before such effective date, except as otherwise provided, see , set out as a note under .