Enforceability of Certain Agreements Between the Department of the Treasury and the Government Sponsored Enterprises

Department of Justice, Office of Legal Counsel: Enforceability of Certain Agreements Between the Department of the Treasury and the Government Sponsored Enterprises, (September 26, 2008) (added 10/02/08)

  • “Under the Agreements, following a payment default by a GSE with respect to any Holders, and in the event Treasury fails to perform its obligations to either of the GSEs in respect of any draw on the Commitments, those Holders may file claims in the United States Court of Federal Claims for relief requiring Treasury to pay the relevant GSE a specified amount (called “the Demand Amount”) in the form of liquidated damages. After consultation with the Civil Division of the Department of Justice, we conclude that the United States Court of Federal Claims generally would have jurisdiction under the Tucker Act to entertain claims brought by the Holders for liquidated damages, payable to a GSE, according to the terms of the Agreements, if Treasury failed to perform its obligation under the Agreements to fund the Commitment in the event of a payment default by the GSE to the Holders.”
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