1. Treatment of certain municipal obligations (a) In general Section 18 of the Federal Deposit Insurance Act ( 12 U.S.C. 1828 ) is amended— (1) by moving subsection (z) so that it appears after subsection (y); and (2) by adding at the end the following: (aa) Treatment of certain municipal obligations (1) Definitions In this subsection— (A) the term investment grade , with respect to an obligation, has the meaning given the term in section 1.2 of title 12, Code of Federal Regulations, or any successor thereto; (B) the term liquid and readily-marketable has the meaning given the term in section 249.3 of title 12, Code of Federal Regulations, or any successor thereto; and (C) the term municipal obligation means an obligation of— (i) a State or any political subdivision thereof; or (ii) any agency or instrumentality of a State or any political subdivision thereof. (2) Municipal obligations For purposes of the final rule entitled Liquidity Coverage Ratio: Liquidity Risk Measurement Standards (79 Fed. Reg. 61439 (October 10, 2014)), the final rule entitled Liquidity Coverage Ratio: Treatment of U.S. Municipal Securities as High-Quality Liquid Assets (81 Fed. Reg. 21223 (April 11, 2016)), and any other regulation that incorporates a definition of the term high-quality liquid asset or another substantially similar term, the appropriate Federal banking agencies shall treat a municipal obligation as a high-quality liquid asset that is a level 2B liquid asset if that obligation is, as of the date of calculation— (A) liquid and readily-marketable