Credit Accounting Reform Act of 1985

Credit Accounting Reform Act of 1985 - Amends the Federal Financing Bank Act of 1973 to require any Federal agency which makes a direct loan or guarantees any obligation after October 1, 1986, to transmit to the Federal Financing Bank the loan obligation or guarantee obligation and such information concerning the borrower as the Bank needs in order to sell the obligation or to reinsure the guarantee. Authorizes the Bank to disclose such information to the extent necessary to sell the obligation or to reinsure the guarantee.

Directs the Bank, within 90 days after an agency has made a direct loan, to sell the resulting obligation to the highest bidder at a public auction. Permits the Bank to sell such an obligation through pooled participation arrangements only to the extent that such arrangements permit the proper allocation of subsidy costs to the appropriate budget account. Requires the bank to make a bid based on the Bank's estimate of the present value of the obligation being sold at each auction, and to purchase any obligation for which it submits the highest bid. Declares that such obligations shall be sold without recourse to the Government and with no Government guarantee.

Directs the Bank, within 90 days after an agency guarantees any obligation, to purchase reinsurance for such guarantee from the lowest bidder at a public auction. Requires the Bank to make a bid at each such auction based on the Bank's estimate of the expected defaults on the obligation, and to reinsure a guarantee for which it submits the lowest bid. Entitles any reinsurer of such a guarantee to receive any premiums, fees, or other consideration that the borrower is required to pay for the guarantee.

Requires the Bank, after October 1, 1986, to maintain assets with a market value equal to the value of its liabilities. Provides a permanent appropriation to the Bank of the amount by which its liabilities exceed its assets at the close of any fiscal year. Requires such amount to be included in the unified budget. Requires the Bank to transfer to the Treasury the amount by which its assets exceed its revenues at the close of any fiscal year. Requires such surplus amount to be treated as an on-budget miscellaneous receipt for Federal budgetary purposes.

Directs the Bank to: (1) collect a fee for its costs of acting as agent for an agency in selling an obligation or reinsuring a guarantee; (2) formulate standard contracts to be used by agencies when making or guarantying loans; (3) manage its portfolio so as to minimize credit and interest rate risks: (4) invest funds and maintain reserves to cover its contingent liabilities; and (5) report to the Congress annually on all loans purchased and reinsurance contracts issued by the Bank.

Requires that the amount of any subsidy for a direct loan (the excess of the amount loaned over the price at which the loan is sold) or a loan guarantee (the cost of reinsurance) made by an agency is to be treated as an outlay of such agency for Federal budgetary purposes. Permits an agency to make a direct loan or guarantee an obligation after October 1, 1986, only to the extent that an appropriation has been made to the agency for the subsidy.

Declares that this Act does not change the responsibility for servicing direct loans or obligation guarantees made by an agency. Includes obligations sold by the Bank as securities that are exempt from the securities laws.

Amends the Congressional Budget and Impoundment Control Act of 1974 to revise the definition of "budget authority" to include the subsidy amount for any authority to guarantee the repayment of indebtedness.

Amends the Government Corporation Control Act to: (1) include the Bank as a wholly owned Government corporation for purposes of such Act; and (2) require the Controller General to audit the Bank on a calendar year basis.