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124 STAT. 1608 PUBLIC LAW 111–203—JULY 21, 2010

(b) INTERSTATE BANK MERGERS.—Section 44(b)(4)(B) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1831u(b)(4)(B)) is amended
by striking ‘‘will continue to be adequately capitalized and ade-
quately managed’’ and inserting ‘‘will be well capitalized and well
managed’’.
12 USC 1831u (c) EFFECTIVE DATE.—The amendments made by this section
note. shall take effect on the transfer date.

SEC. 608. ENHANCING EXISTING RESTRICTIONS ON BANK TRANS-
ACTIONS WITH AFFILIATES.
(a) AFFILIATE TRANSACTIONS.—Section 23A of the Federal
Reserve Act (12 U.S.C. 371c) is amended—
(1) in subsection (b)—
(A) in paragraph (1), by striking subparagraph (D)
and inserting the following:
‘‘(D) any investment fund with respect to which a
member bank or affiliate thereof is an investment adviser;
and’’; and
(B) in paragraph (7)—
(i) in subparagraph (A), by inserting before the
semicolon at the end the following: ‘‘, including a pur-
chase of assets subject to an agreement to repurchase’’;
(ii) in subparagraph (C), by striking ‘‘, including
assets subject to an agreement to repurchase,’’;
(iii) in subparagraph (D)—
(I) by inserting ‘‘or other debt obligations’’ after
‘‘acceptance of securities’’; and
(II) by striking ‘‘or’’ at the end; and
(iv) by adding at the end the following:
‘‘(F) a transaction with an affiliate that involves the
borrowing or lending of securities, to the extent that the
transaction causes a member bank or a subsidiary to have
credit exposure to the affiliate; or
‘‘(G) a derivative transaction, as defined in paragraph
(3) of section 5200(b) of the Revised Statutes of the United
States (12 U.S.C. 84(b)), with an affiliate, to the extent
that the transaction causes a member bank or a subsidiary
to have credit exposure to the affiliate;’’;
(2) in subsection (c)—
(A) in paragraph (1)—
(i) in the matter preceding subparagraph (A), by
striking ‘‘subsidiary’’ and all that follows through ‘‘time
of the transaction’’ and inserting ‘‘subsidiary, and any
credit exposure of a member bank or a subsidiary
to an affiliate resulting from a securities borrowing
or lending transaction, or a derivative transaction,
shall be secured at all times’’; and
(ii) in each of subparagraphs (A) through (D), by
striking ‘‘or letter of credit’’ and inserting ‘‘letter of
credit, or credit exposure’’;
(B) by striking paragraph (2);
(C) by redesignating paragraphs (3) through (5) as
paragraphs (2) through (4), respectively;
(D) in paragraph (2), as so redesignated, by inserting

LAWS before the period at the end ‘‘, or credit exposure to an affiliate resulting from a securities borrowing or lending transaction, or derivative transaction’’; andPUBLIC with on anorris VerDate Nov 24 2008 12:15 Aug 04, 2010 Jkt 089139 PO 00203 Frm 00234 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL203.111 APPS06 PsN: PUBL203