103 STAT. 1832 PUBLIC LAW 101-206—DEC. 7, 1989
Public Law 101-206
101st Congress
An Act
n 7 1 qSQ ^° amend provisions of the National Consumer Cooperative Bank Act relating to the
'-—'- payment of interest on and the redemption of class A notes issued by the National
[H.R. 3720] Consumer Cooperative Bank.
Be it enacted by the Senate and House of Representatives of the
National United States of America in Congress assembled, Consumer
Cooperative SECTION 1. SHORT TITLE.
Bank
Amendments of This Act may be cited as the "National Consumer Cooperative
1989. Bank Amendments of 1989".
12 use 3001
note. SEC. 2. AMENDMENTS RELATING TO CLASS A NOTES.
Section 104(c) of the National Consumer Cooperative Bank Act (12
U.S.C. 3014(c)) is amended—
(1) by striking out the first 2 sentences and inserting the
following: "The holder of class A notes shall be entitled to
interest at a rate or rates determined by the Secretary of the
Treasury, taking into consideration the current average yield
on outstanding marketable obligations of the United States of
comparable terms and conditions as of the last day of the month
preceding each issuance of such class A notes to the Secretary of
the Treasury, except that, until October 1, 1990, interest pay
ments shall not exceed 25 percent of gross revenues for the year,
less necessary operating expenses including a reserve for pos
sible losses. From time to time, the Bank may, with the ap
proval of the Secretary of the Treasury and consistent with the
terms of this Act, issue replacement class A notes upon terms
and conditions to be agreed upon by the Bank and the Sec
retary, bearing interest as provided in this subsection (c), in
substitution for those class A notes previously issued."; and
(2) by adding at the end the following: "All class A notes shall
be redeemed by the Bank no later than October 31, 2020.".
Approved December 7, 1989.
LEGISLATIVE HISTORY—H.R. 3720:
CONGRESSIONAL RECORD, Vol. 135 (1989):
Nov. 20, considered and passed House.
Nov. 21, considered and passed Senate.
Brief
The National Consumer Cooperative Bank Act was amended to modify provisions relating to class A notes issued by the bank. The amendment changed the interest rate calculation method and allowed the bank to issue replacement notes under certain conditions. Additionally, it mandated that all class A notes be redeemed by October 31, 2020. This legislation aimed to reform the existing system for paying interest on and redeeming these specific type of notes issued by the National Consumer Cooperative Bank.
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Purpose
The primary objective of Public Law 101-206 is to amend provisions of the National Consumer Cooperative Bank Act relating to the payment of interest on and the redemption of class A notes issued by the National Consumer Cooperative Bank. This legislation aims to modify existing laws governing the Bank’s operations, specifically with regards to the issuance, interest payments, and eventual redemption of these class A notes.
Key Provisions
The amendments introduced by this Act can be summarized as follows:
– Interest Payment Reform: The law changes the manner in which interest on class A notes is determined. It specifies that the holder shall receive interest at a rate or rates set by the Secretary of the Treasury, based on market conditions.
– Redemption Deadline: All class A notes are required to be redeemed by the Bank no later than October 31, 2020. This provision establishes a clear timeline for the redemption of these financial instruments.
Industry Impact
The amendments proposed in Public Law 101-206 are expected to have significant implications for the operations and management of the National Consumer Cooperative Bank.
– Financial Planning: The introduction of a fixed deadline for the redemption of class A notes forces the Bank to plan its finances more effectively. This could lead to better financial decision-making, ensuring that sufficient funds are allocated towards note redemption while maintaining operational efficiency.
Updates/Amendments
Public Law 101-206 updates specific provisions within the National Consumer Cooperative Bank Act as follows:
– Section 104(c) Modification: The amendments modify Section 104(c) of the Act to better align with changing market conditions and regulatory requirements. Specifically, it adjusts how interest rates on class A notes are set and ensures that these payments remain consistent with the Bank’s operating costs.
– Regulatory Oversight: The Secretary of the Treasury’s approval for certain financial decisions, such as issuing replacement class A notes, underscores the importance of regulatory oversight in managing the Bank’s activities.
