# Financial Institutions Reform, Recovery, and Enforcement Act of 1989

Note: This is the original legislation as it was initially enacted. Any subsequent amendments hosted on Wikisource may be listed using What Links Here.
An Act To reform, recapitalize, and consolidate the Federal deposit insurance system, to enhance the regulatory and enforcement powers of Federal financial institutions regulatory agencies, and for other purposes.
    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

### Section 1. Short Title; Table of Contents.

    (a) SHORT TITLE.—
       This Act may be cited as the ``Financial Institutions Reform, Recovery, and Enforcement Act of 1989´´.
    (b) TABLE OF CONTENTS.—
       TITLE I — PURPOSES
          Sec. 101. Purposes.
       TITLE II — FEDERAL DEPOSIT INSURANCE CORPORATION
          Sec. 201. Depository institutions.
          Sec. 202. Duties of Federal Deposit Insurance Corporation.
          Sec. 203. FDIC Board members.
          Sec. 204. Definitions.
          Sec. 205. Insured savings associations.
          Sec. 206. Application process; insurance fees.
          Sec. 207. Insurability factors.
          Sec. 208. Assessments.
          Sec. 209. Corporate powers of the FDIC.
          Sec. 210. Administration of Corporation.
          Sec. 211. Insurance funds.
          Sec. 212. Conservatorship and receivership powers of the Corporation.
          Sec. 213. New banks.
          Sec. 214. Bridge banks.
          Sec. 215. FSLIC Resolution Fund.
          Sec. 216. Amendments to section 12.
          Sec. 217. Amendments to section 13.
          Sec. 218. FDIC borrowing authority.
          Sec. 219. Exemption from taxation; limitation on borrowing.
          Sec. 220. Reports.
          Sec. 221. Regulations governing insured depository institutions.
          Sec. 222. Activities of savings associations.
          Sec. 223. Nondiscrimination.
          Sec. 224. Brokered deposits.
          Sec. 225. Contracts between depository institutions and persons providing goods, products, or services.
          Sec. 226. Savings association insurance fund industry advisory committee established.
       TITLE III — SAVINGS ASSOCIATIONS
          Sec. 301. Amendment to Home Owners' Loan Act of 1933.
          Sec. 302. Savings provisions.
          Sec. 303. Qualified thrift lender test.
          Sec. 304. Transitional rule for certain transactions with affiliates.
          Sec. 305. Transitional rules regarding certain loans and effective dates.
          Sec. 306. Amendment of additional powers of Director.
          Sec. 307. Amendment to title 31, United States Code.
          Sec. 308. Preserving minority ownership of minority financial institutions.
       TITLE IV — TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY
          Sec. 401. FSLIC and Federal Home Loan Bank Board abolished.
          Sec. 402. Continuation and coordination of certain regulations.
          Sec. 403. Determination of transferred functions and employees.
          Sec. 404. Rights of employees of abolished agencies.
          Sec. 405. Division of property and facilities.
          Sec. 406. Report.
          Sec. 407. Repeals.
       TITLE V — FINANCING FOR THRIFT RESOLUTIONS
          Subtitle A — Oversight Board and Resolution Trust Corporation
             Sec. 501. Oversight Board and Resolution Trust Corporation established.
          Subtitle B — Resolution Funding Corporation
             Sec. 511. Resolution Funding Corporation established.
             Sec. 512. Financing Corporation.
       TITLE VI — THRIFT ACQUISITION ENHANCEMENT PROVISIONS
          Sec. 601. Acquisition of thrift institutions by bank holding companies.
          Sec. 602. Technical amendments to the Bank Holding Company Act.
          Sec. 603. Passive investments by companies controlling certain nonbank banks.
          Sec. 604. Purchase of minority interest in undercapitalized savings associations by other savings and loan holding companies allowed.
       TITLE VII — FEDERAL HOME LOAN BANK SYSTEM REFORMS
          Subtitle A — Federal Home Loan Bank Act Amendments
             Sec. 701. Definitions.
             Sec. 702. Federal Housing Finance Board established.
             Sec. 703. Termination of the Federal Home Loan Bank Board.
             Sec. 704. Eligibility for membership.
             Sec. 705. Repeal of provision relating to rate of interest on deposits.
             Sec. 706. Capital stock.
             Sec. 707. Election of Bank directors.
             Sec. 708. Repeal of provisions relating to certain powers of the Federal Home Loan Bank Board.
             Sec. 709. Powers and duties of Banks.
             Sec. 710. Eligibility of borrowers to secure advances.
             Sec. 711. Administrative expenses.
             Sec. 712. Nonadministrative expenses.
             Sec. 713. Federal Savings and Loan Insurance Corporation Industry Advisory Committee.
             Sec. 714. Advances.
             Sec. 715. Amendments relating to withdrawal from Federal Home Loan Bank membership.
             Sec. 716. Repeal of provisions relating to lawful contract rate.
             Sec. 717. Bank stock and obligations.
             Sec. 718. Thrift Advisory Council.
             Sec. 719. Examination of members.
             Sec. 720. Liquidity.
             Sec. 721. Affordable housing.
             Sec. 722. Transferred employees of Federal Home Loan Banks and joint offices.
             Sec. 723. Transitional provisions.
             Sec. 724. Federal Home Loan Bank reserves.
             Sec. 725. Special account.
          Subtitle B — Federal Home Loan Mortgage Corporation
             Sec. 731. Federal Home Loan Mortgage Corporation.
          Subtitle C — Technical and Conforming Amendments
             Sec. 741. Repeal of limitation of obligation for administrative expenses.
             Sec. 742. Amendment of title 5, United States Code.
             Sec. 743. Amendment of Balanced Budget and Emergency Deficit Control Act provisions.
             Sec. 744. Conforming amendments to financial institution related Acts.
       TITLE VIII — BANK CONSERVATION ACT AMENDMENTS
          Sec. 801. Definitions.
          Sec. 802. Appointment of conservator.
          Sec. 803. Examinations.
          Sec. 804. Termination of conservatorship.
          Sec. 805. Conservator; powers and duties.
          Sec. 806. Liability protection.
          Sec. 807. Rules and regulations.
          Sec. 808. Repeals.
       TITLE IX — REGULATORY ENFORCEMENT AUTHORITY AND CRIMINAL ENHANCEMENTS
          Subtitle A — Expanded Enforcement Powers, Increased Penalties, and Improved Accountability
             Sec. 901. Institution-affiliated parties of a depository institution subject to administrative enforcement orders; substitution of `depository institution' for `bank' in enforcement provisions.
             Sec. 902. Amendments to cease and desist authority with respect to restitution, restrictions on specific activities, grounds for issuance of a temporary order, and incomplete or inaccurate records.
             Sec. 903. Merger of removal and prohibition authority.
             Sec. 904. Industrywide application of removal, suspension, and prohibition orders.
             Sec. 905. Enforcement proceedings allowed after separation from service.
             Sec. 906. Expansion of removal powers for state criminal proceedings.
             Sec. 907. Amendments to expand and increase civil money penalties.
             Sec. 908. Clarification of criminal penalty provisions for violation of certain orders.
             Sec. 909. Supervisory records.
             Sec. 910. Increased penalty for participation by convicted individuals.
             Sec. 911. Amendments to various provisions of law relating to reports.
             Sec. 912. Authority of the FDIC to take enforcement action against savings associations.
             Sec. 913. Public disclosure of enforcement actions required.
             Sec. 914. Agency disapproval of directors and senior executive officers of certain depository institutions.
             Sec. 915. Clarification of NCUA's authority to conduct compliance investigations.
             Sec. 916. Improved administrative hearings and procedures.
             Sec. 917. Task force study of delegation of enforcement actions.
             Sec. 918. Annual report to Congress.
             Sec. 919. Credit union audit requirements.
             Sec. 920. Technical amendments relating to administrative and judicial review.
          Subtitle B — Termination of Deposit Insurance
             Sec. 926. Revision of procedures for termination of FDIC deposit insurance.
          Subtitle C — Improving Early Detection of Misconduct and Encouraging Informants
             Sec. 931. Information required to be made available to outside auditors.
             Sec. 932. Depository institution employee protection remedy.
             Sec. 933. Reward for information leading to recoveries or civil penalties.
          Subtitle D — Right to Financial Privacy Act Amendments
             Sec. 941. Definitions.
             Sec. 942. Additional exceptions.
             Sec. 943. Prohibition.
             Sec. 944. Miscellaneous provisions.
          Subtitle E — Civil Penalties for Violations Involving Financial Institutions
             Sec. 951. Civil penalties.
          Subtitle F — Criminal Law and Procedure
             Sec. 961. Increased criminal penalties for certain financial institution offenses.
             Sec. 962. Miscellaneous revisions to title 18.
             Sec. 963. Civil and criminal forfeiture.
             Sec. 964. Grand jury secrecy.
             Sec. 965. Criminal Division Fraud Section regional office.
             Sec. 966. Department of Justice appropriation authorization.
             Sec. 967. Authorization of additional appropriations for the judiciary.
             Sec. 968. Racketeer influenced and corrupt organizations.
       TITLE X — STUDIES OF FEDERAL DEPOSIT INSURANCE, BANKING SERVICES, AND THE SAFETY AND SOUNDNESS OF GOVERNMENT-SPONSORED ENTERPRISES
          Sec. 1001. Study of Federal deposit insurance system.
          Sec. 1002. Survey of bank fees and services.
          Sec. 1003. General Accounting Office study.
          Sec. 1004. Study regarding capital requirements for government-sponsored enterprises.
       TITLE XI — REAL ESTATE APPRAISAL REFORM AMENDMENTS
          Sec. 1101. Purpose.
          Sec. 1102. Establishment of Appraisal Subcommittee of the Federal Financial Institutions Examination Council.
          Sec. 1103. Functions of Appraisal Subcommittee.
          Sec. 1104. Chairperson of Appraisal Subcommittee; term of Chairperson; meetings.
          Sec. 1105. Officers and staff.
          Sec. 1106. Powers of Appraisal Subcommittee.
          Sec. 1107. Procedures for establishing appraisal standards and requiring the use of certified and licensed appraisers.
          Sec. 1108. Startup funding.
          Sec. 1109. Roster of State certified or licensed appraisers; authority to collect and transmit fees.
          Sec. 1110. Functions of the Federal financial institutions regulatory agencies relating to appraisal standards.
          Sec. 1111. Time for proposal and adoption of standards.
          Sec. 1112. Functions of the Federal financial institutions regulatory agencies relating to appraiser qualifications.
          Sec. 1113. Transactions requiring the services of a State certified appraiser.
          Sec. 1114. Transactions requiring the services of a State licensed appraiser.
          Sec. 1115. Time for proposal and adoption of rules.
          Sec. 1116. Certification and licensing requirements.
          Sec. 1117. Establishment of State appraiser certifying and licensing agencies.
          Sec. 1118. Monitoring of State appraiser certifying and licensing agencies.
          Sec. 1119. Recognition of State certified and licensed appraisers for purposes of this title.
          Sec. 1120. Violations in obtaining and performing appraisals in federally related transactions.
          Sec. 1121. Definitions.
          Sec. 1122. Miscellaneous provisions.
       TITLE XII — MISCELLANEOUS PROVISIONS
          Sec. 1201. GAO study of credit union system.
          Sec. 1202. OCC employment provision.
          Sec. 1203. NCUA employment provision.
          Sec. 1204. Expansion of use of underutilized minority banks, women's banks, and low-income credit unions.
          Sec. 1205. Credit standards advisory committee.
          Sec. 1206. Comparability in compensation schedules.
          Sec. 1207. Study by Secretary of the Treasury.
          Sec. 1208. Expenditure of taxpayer money only for deposit insurance purposes.
          Sec. 1209. Amendment to section 5373 of title 5, United States Code.
          Sec. 1210. Farm Credit Administration and Farm Credit System Insurance Corporation employment provision.
          Sec. 1211. Fair lending oversight and enforcement.
          Sec. 1212. Amendment to the Community Reinvestment Act of 1977.
          Sec. 1213. Comptroller General audit and access to records.
          Sec. 1214. Amendment related to the Hart-Scott-Rodino Act.
          Sec. 1215. Capital and accounting standards.
          Sec. 1216. Equal opportunity.
          Sec. 1217. NCUA powers as liquidating agent and conservator.
          Sec. 1218. Risk management training.
          Sec. 1219. Cross-marketing restrictions.
          Sec. 1220. Separability of provisions.
       TITLE XIII — PARTICIPATION BY STATE HOUSING FINANCE AUTHORITIES AND NONPROFIT ENTITIES
          Sec. 1301. Definitions.
          Sec. 1302. Authorization for State housing finance agencies and nonprofit entities to purchase mortgage-related assets.
       TITLE XIV — TAX PROVISIONS
          Sec. 1401. Early termination of special reorganization rules for financial institutions.
          Sec. 1402. Tax exemption for Resolution Trust Corporation and Resolution Funding Corporation.
          Sec. 1403. Annual reports on transactions in which Federal financial assistance provided.
          Sec. 1404. Studies of relationship between public debt and activities of Government-sponsored enterprises.
Approved August 9, 1989.

## Legislative History

* H.R. 1278, (S. 744)
   * HOUSE REPORTS:
   ** No. 101-54, Parts I, III & VII, (Comm. on Banking, Finance and Urban Affairs)
   ** No. 101-54, Part II, (Comm. on Ways and Means)
   ** No. 101-54, Part IV, (Comm. on Rules)
   ** No. 101-54, Part V, (Comm. on the Judiciary)
   ** No. 101-54, Part VI, (Comm. on Government Operations)
   ** No. 101-209 (Comm. of Conference)
   ** No. 101-222 (Comm. of Conference)
   * CONGRESSIONAL RECORD, Vol. 135 (1989):
   ** , considered and passed Senate.
   ** , considered and passed House.
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