79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–577 

COMMUNITY BANK REPORTING RELIEF ACT 

FEBRUARY 23, 2018.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. HENSARLING, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

[To accompany H.R. 4725] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 4725) to amend the Federal Deposit Insurance Act to require short form call reports for certain depository institutions, 

having considered the same, report favorably thereon without 

amendment and recommend that the bill do pass. 

PURPOSE AND SUMMARY

Introduced by Representative Randy Hultgren on December 21, 

2017, H.R. 4725, the ‘‘Community Bank Reporting Relief Act’’ 

amends the Federal Deposit Insurance Act to require the appropriate federal banking agencies (the Comptroller of the Currency 

(OCC), Board of Governors of the Federal Reserve System (Federal 

Reserve), or Federal Deposit Insurance Corporation (FDIC)) to 

issue regulations that allow for reduced reporting requirements for 

depository institutions—with less than $5 billion in consolidated 

assets and that meet such other criteria as agencies deem appropriate—when they make the first and third report of condition for 

a year. 

BACKGROUND AND NEED FOR LEGISLATION

All national banks, state member banks, insured state nonmember banks, and savings associations are required—on a recurring basis—to file Consolidated Reports of Condition and Income, 

or ‘‘Call Reports,’’ with the Federal Financial Institutions Examination Council (FFIEC) on the last day of each quarter. The FFIEC 

is a formal interagency body empowered to prescribe uniform prinVerDate Sep 11 2014 04:08 Feb 24, 2018 Jkt 079006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\HR577.XXX HR577
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1 Call reports can be publicly accessed at https://cdr.ffiec.gov/public/. 

ciples, standards, and report forms for federal examination of financial institutions. Banking regulators including the OCC, the 

Federal Reserve, and the FDIC are FFIEC member agencies. 

Call reports are a primary source of data for banking regulators 

and the public 1 related to banks’ financial conditions. The FFIEC 

requires banks to report data on various aspects of their operations 

and must use a standard format so it can be easily compared to 

other banks. The Call report collects basic financial data of commercial banks in the form of a balance sheet, an income statement, 

and supporting schedules. For example, the Report of Condition 

schedule provides details on assets, liabilities, and capital accounts. 

The Report of Income schedule provides details on income and expenses. In addition, Call reports are the source of the most current 

statistical data available to the financial regulators to identify 

areas of focus for both on-site examinations and off-site monitoring, 

and are used to calculate deposit insurance assessments and semiannual assessment fees. 

The Call report form contains hundreds of individual items, but 

the specific reporting requirements depend upon the size of the financial institution, the nature of its activities, and whether it has 

any foreign offices. 

Smaller financial institutions argue that requirements to report 

hundreds of data points on a semi-annual basis are highly burdensome, as the reporting forms themselves contain many items that 

do not apply to smaller institutions. In the past year, the federal 

regulators have shown a willingness to streamline Call reports; 

however some institutions believe that the federal regulators need 

to extend additional regulatory relief to small institutions. 

For example, in a June 2017 report issued by the Treasury Department pursuant to the President’s Executive Order from February 3, 2017, entitled, ‘‘A Financial System That Creates Economic Opportunities—Banks and Credit Unions,’’ which informs 

the Administration’s perspective on regulating the financial system, the Treasury Department stated: 

Currently, the bank Call Report form is over 80 pages 

and contains a substantial amount of data fields which are 

not applicable to community banks and their business 

model. The regulators have already taken steps to simplify 

Call Reports for smaller banks (those with under $1 billion 

in assets), but further changes are needed. Treasury recommends that the regulators continue to streamline current regulatory reporting requirements for all community 

financial institutions. 

HEARINGS

The Committee on Financial Services held a hearing examining 

matters relating to H.R. 4725 on April 26, 2017 and April 28, 2017. 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

January 18, 2018 and ordered H.R. 4725 to be reported favorably 

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by a recorded vote of 55 yeas to 0 nays (Record vote no. FC–143), 

a quorum being present. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. The sole recorded 

vote was on a motion by Chairman Hensarling to report the bill favorably to the House without amendment. The motion was agreed 

to by a recorded vote of 55 yeas to 0 nays (Record vote no. FC–143), 

a quorum being present. 

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Insert graphic folio 4 HR577.001
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COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the findings and recommendations of the Committee based on oversight activities under clause 2(b)(1) of rule X 

of the Rules of the House of Representatives, are incorporated in 

the descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee states that H.R. 4725 would 

allow a reduced reporting requirement for depository institutions 

meeting certain criteria when making the first and third report of 

condition for a year. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, February 13, 2018. 

Hon. JEB HENSARLING, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4725, the Community 

Bank Reporting Relief Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Sarah Puro. 

Sincerely, 

KEITH HALL, Director. 

Enclosure. 

H.R. 4725—Community Bank Reporting Relief Act 

H.R. 4725 would permit banks and credit unions with assets of 

less than $5 billion to reduce, from quarterly to semiannually, the 

number of times each year they must file information about their 

balance sheets with federal regulators. Those institutions account 

for about 95 percent of financial institutions but hold roughly 10 

percent of industry assets. The bill would require the federal banking regulators to write regulations to implement the provision. 

6 

Using information from those regulators, CBO expects that the 

provisions of H.R. 4725 would not significantly affect the risk that 

the affected institutions would fail. As a result, CBO estimates that 

enacting the bill would not significantly affect outlays of the Federal Deposit Insurance Corporation (FDIC) or the National Credit 

Union Administration (NCUA), which incur costs when banks or 

credit unions fail. Costs incurred by those entities are recorded in 

the budget as direct spending. 

Additional regulations developed under H.R. 4725 could impose 

costs on the FDIC, the NCUA, the Office of the Comptroller of the 

Currency (OCC), and the Federal Reserve. However, CBO estimates that the cost to complete the regulations would not be significant. Administrative costs incurred by the FDIC, the NCUA, 

and the OCC are recorded in the budget as increases in direct 

spending, but those agencies are authorized to collect premiums 

and fees from insured depository institutions to cover administrative expenses. Thus, CBO expects that the net effect on direct 

spending would be negligible. Administrative costs to the Federal 

Reserve are reflected in the federal budget as a reduction in remittances to the Treasury (which are recorded in the budget as revenues). 

Because enacting H.R. 4725 could affect direct spending and revenues, pay-as-you-go procedures apply. However as discussed 

above, any such impacts would not be significant. 

CBO estimates that enacting H.R. 4725 would not increase net 

direct spending or on-budget deficits in any of the four consecutive 

10-year periods beginning in 2028. 

H.R. 4725 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. 

The CBO staff contacts for this estimate are Sarah Puro (for federal costs) and Nathaniel Frentz (for revenues). The estimate was 

approved by H. Samuel Papenfuss, Deputy Assistant Director for 

Budget Analysis. 

FEDERAL MANDATES STATEMENT

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995. 

The Committee has determined that the bill does not contain 

Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental 

mandate on State, local, or tribal governments. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

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EARMARK IDENTIFICATION

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

DUPLICATION OF FEDERAL PROGRAMS

In compliance with clause 3(c)(5) of rule XIII of the Rules of the 

House of Representatives, the Committee states that no provision 

of the bill establishes or reauthorizes: (1) a program of the Federal 

Government known to be duplicative of another Federal program; 

(2) a program included in any report from the Government Accountability Office to Congress pursuant to section 21 of Public 

Law 111–139; or (3) a program related to a program identified in 

the most recent Catalog of Federal Domestic Assistance, published 

pursuant to the Federal Program Information Act (Pub. L. No. 95– 

220, as amended by Pub. L. No. 98–169). 

DISCLOSURE OF DIRECTED RULEMAKING

Pursuant to section 3(i) of H. Res. 5, (115th Congress), the following statement is made concerning directed rulemakings: The 

Committee estimates that the bill requires one directed 

rulemakings within the meaning of such section. 

The rulemaking directs the FDIC, the NCUA, the OCC, and the 

Federal Reserve to issue regulations to reduce, from quarterly to 

semiannually, the number of times each year banks and credit 

unions with assets of less than $5 billion must file information 

about their balance sheets with federal regulators. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

This section cites H.R. 4725 as the ‘‘Community Bank Reporting 

Relief Act.’’ 

Section 2. Short form call reports 

This section amends the Federal Deposit Insurance Act to direct 

federal banking agencies to issue regulations that allow a reduced 

reporting requirement for depository institutions with less than 

$5,000,000,000 in total consolidated assets, and satisfying other criteria the appropriate Federal banking agencies determine appropriate. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

8 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

FEDERAL DEPOSIT INSURANCE ACT 

* * * * * * * 

SEC. 7. (a)(1) Each insured State nonmember bank and each foreign bank having an insured branch which is not a Federal branch 

shall make to the Corporation reports of condition which shall be 

in such form and shall contain such information as the Board of 

Directors may require. Such reports shall be made to the Corporation on the dates selected as provided in paragraph (3) of this subsection and the deposit liabilities shall be reported therein in accordance with and pursuant to paragraphs (4) and (5) of this subsection. The Board of Directors may call for additional reports of 

condition on dates to be fixed by it and may call for such other reports as the Board may from time to time require. Any such bank 

which (A) maintains procedures reasonably adapted to avoid any 

inadvertent error and, unintentionally and as a result of such an 

error, fails to make or publish any report required under this paragraph, within the period of time specified by the Corporation, or 

submits or publishes any false or misleading report or information, 

or (B) inadvertently transmits or publishes any report which is 

minimally late, shall be subject to a penalty of not more than 

$2,000 for each day during which such failure continues or such 

false or misleading information is not corrected. Such bank shall 

have the burden of proving that an error was inadvertent and that 

a report was inadvertently transmitted or published late. Any such 

bank which fails to make or publish any report required under this 

paragraph, within the period of time specified by the Corporation, 

or submits or publishes any false or misleading report or information, in a manner not described in the 2nd preceding sentence shall 

be subject to a penalty of not more than $20,000 for each day during which such failure continues or such false or misleading information is not corrected. Notwithstanding the preceding sentence, if 

any such bank knowingly or with reckless disregard for the accuracy of any information or report described in such sentence submits or publishes any false or misleading report or information, the 

Corporation may assess a penalty of not more than $1,000,000 or 

1 percent of total assets of such bank, whichever is less, per day 

for each day during which such failure continues or such false or 

misleading information is not corrected. Any penalty imposed 

under any of the 4 preceding sentences shall be assessed and collected by the Corporation in the manner provided in subparagraphs 

(E), (F), (G), and (I) of section 8(i)(2) (for penalties imposed under 

such section) and any such assessment (including the determination of the amount of the penalty) shall be subject to the provisions 

of such section. Any such bank against which any penalty is assessed under this subsection shall be afforded an agency hearing 

if such bank submits a request for such hearing within 20 days 

9 

after the issuance of the notice of assessment. Section 8(h) shall 

apply to any proceeding under this paragraph. 

(2)(A) The Corporation and, with respect to any State depository 

institution, any appropriate State bank supervisor for such institution, shall have access to reports of examination made by, and reports of condition made to, the Comptroller of the Currency, the 

Federal Housing Finance Agency, any Federal home loan bank, or 

any Federal Reserve bank and to all revisions of reports of condition made to any of them, and they shall promptly advise the Corporation of any revisons or changes in respect to deposit liabilities 

made or required to be made in any report of condition. The Corporation may accept any report made by or to any commission, 

board, or authority having supervision of a depository institution, 

and may furnish to the Comptroller of the Currency, to the Federal 

Housing Finance Agency, to any Federal home loan bank, to any 

Federal Reserve bank, and to any such commission, board, or authority, reports of examinations made on behalf of, and reports of 

condition made to, the Corporation. 

(B) ADDITIONAL REPORTS.—The Board of Directors may from 

time to time require any insured depository institution to file 

such additional reports as the Corporation, after consultation 

with the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, as appropriate, may 

deem advisable for insurance purposes. 

(C) DATA SHARING WITH OTHER AGENCIES AND PERSONS.—In 

addition to reports of examination, reports of condition, and 

other reports required to be regularly provided to the Corporation (with respect to all insured depository institutions, including a depository institution for which the Corporation has been 

appointed conservator or receiver) or an appropriate State 

bank supervisor (with respect to a State depository institution) 

under subparagraph (A) or (B), a Federal banking agency may, 

in the discretion of the agency, furnish any report of examination or other confidential supervisory information concerning 

any depository institution or other entity examined by such 

agency under authority of any Federal law, to— 

(i) any other Federal or State agency or authority with 

supervisory or regulatory authority over the depository institution or other entity; 

(ii) any officer, director, or receiver of such depository institution or entity; and 

(iii) any other person that the Federal banking agency 

determines to be appropriate. 

(3) Each insured depository institution shall make to the appropriate Federal banking agency 4 reports of condition annually upon 

dates which shall be selected by the Chairman of the Board of Directors, the Comptroller of the Currency, and the Chairman of the 

Board of Governors of the Federal Reserve System. The dates selected shall be the same for all insured depository institutions, except that when any of said reporting dates is a nonbusiness day for 

any depository institution, the preceding business day shall be its 

reporting date. Such reports of condition shall be the basis for the 

certified statements to be filed pursuant to subsection (c). The deposit liabilities shall be reported in said reports of condition in accordance with and pursuant to paragraphs (4) and (5) of this subVerDate Sep 11 2014 04:08 Feb 24, 2018 Jkt 079006 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\HR577.XXX HR577
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section, and such other information shall be reported therein as 

may be required by the respective agencies. Each said report of 

condition shall contain a declaration by the president, a vice president, the cashier or the treasurer, or by any other officer designated by the board of directors or trustees of the reporting depository institution to make such declaration, that the report is true 

and correct to the best of his knowledge and belief. The correctness 

of said report of conditions shall be attested by the signatures of 

at least two directors or trustees of the reporting depository institution other than the officer making such declaration, with a declaration that the report has been examined by them and to the best 

of their knowledge and belief is true and correct. At the time of 

making said reports of condition each insured depository institution 

shall furnish to the Corporation a copy thereof containing such 

signed declaration and attestations. Nothing herein shall preclude 

any of the foregoing agencies from requiring the banks or savings 

associations under its jurisdiction to make additional reports of 

condition at any time. 

(4) In the reports of condition required to be made by paragraph 

(3) of this subsection, each insured depository institution shall report the total amount of the liability of the depository institution 

for deposits in the main office and in any branch located in any 

State of the United States, the District of Columbia, any Territory 

of the United States, Puerto Rico, Guam, American Samoa, the 

Trust Territory of the Pacific Islands, or the Virgin Islands, according to the definition of the term ‘‘deposit’’ in and pursuant to subsection (1) of section 3 of this Act, without any deduction for indebtedness of depositors or creditors or any deduction for cash 

items in the process of collection drawn on others than the reporting depository institution: Provided, That the depository institution 

in reporting such deposits may (i) subtract from the deposit balance 

due to any depository institution the deposit balance due from the 

same depository institution (other than trust funds deposited by either depository institution) and any cash items in the process of 

collection due from or due to such depository institutions shall be 

included in determining such net balance, except that balances of 

time deposits of any depository institution and any balances standing to the credit of private depository institutions, of depository institutions in foreign countries, of foreign branches of other American depository institutions, and of American branches of foreign 

banks shall be reported gross without any such subtraction, and (ii) 

exclude any deposits received in any office of the depository institution for deposit in any other office of the depository institution: And 

provided further, That outstanding drafts (including advices and 

authorizations to charge depository institution’s balance in another 

depository institution) drawn in the regular course of business by 

the reporting depository institution on depository institutions need 

not be reported as deposit liabilities. The amount of trust funds 

held in the depository institution’s own trust department, which 

the reporting depository institution keeps segregated and apart 

from its general assets and does not use in the conduct of its business, shall not be included in the total deposits in such reports, but 

shall be separately stated in such reports. Deposits which are accumulated for the payment of personal loans and are assigned or 

pledged to assure payment of loans at maturity shall not be inVerDate Sep 11 2014 04:08 Feb 24, 2018 Jkt 079006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\HR577.XXX HR577
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cluded in the total deposits in such reports, but shall be deducted 

from the loans for which such deposits are assigned or pledged to 

assure repayment. 

(5) The deposits to be reported on such reports of condition shall 

be segregated between (i) time and savings deposits and (ii) demand deposits. For this purpose, the time and savings deposits 

shall consist of time certificates of deposit, time deposits-open account and savings deposits; and demand deposits shall consist of 

all deposits other than time and savings deposits. 

(6) LIFELINE ACCOUNT DEPOSITS.—In the reports of condition 

required to be reported under this subsection, the deposits in 

lifeline accounts (as defined in section 232(a)(3)(D) of the Bank 

Enterprise Act of 1991) shall be reported separately. 

(7) The Board of Directors, after consultation with the Comptroller of the Currency and the Board of Governors of the Federal 

Reserve System, may by regulation define the terms ‘‘cash items’’ 

and ‘‘process of collection’’, and shall classify deposits as 

‘‘time,’’‘‘savings,’’ and ‘‘demand’’ deposits, for the purposes of this 

section. 

(8) In respect of any report required or authorized to be supplied 

or published pursuant to this subsection or any other provision of 

law, the Board of Directors or the Comptroller of the Currency, as 

the case may be, may differentiate between domestic banks and 

foreign banks to such extent as, in their judgment, may be reasonably required to avoid hardship and can be done without substantial compromise of insurance risk or supervisory and regulatory effectiveness. 

(9) DATA COLLECTIONS.—In addition to or in connection with 

any other report required under this subsection, the Corporation shall take such action as may be necessary to ensure 

that— 

(A) each insured depository institution maintains; and 

(B) the Corporation receives on a regular basis from 

such institution, 

information on the total amount of all insured deposits, preferred deposits, and uninsured deposits at the institution. In 

prescribing reporting and other requirements for the collection 

of actual and accurate information pursuant to this paragraph, 

the Corporation shall minimize the regulatory burden imposed 

upon insured depository institutions that are well capitalized 

(as defined in section 38) while taking into account the benefit 

of the information to the Corporation, including the use of the 

information to enable the Corporation to more accurately determine the total amount of insured deposits in each insured 

depository institution for purposes of compliance with this Act. 

(10) A Federal banking agency may not, by regulation or otherwise, designate, or require an insured institution or an affiliate to designate, a corporation as highly leveraged or a transaction with a corporation as a highly leveraged transaction 

solely because such corporation is or has been a debtor or 

bankrupt under title 11, United States Code, if, after confirmation of a plan of reorganization, such corporation would not 

otherwise be highly leveraged. 

(11) STREAMLINING REPORTS OF CONDITION.— 

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(A) REVIEW OF INFORMATION AND SCHEDULES.—Before 

the end of the 1-year period beginning on the date of enactment of the Financial Services Regulatory Relief Act of 

2006 and before the end of each 5-year period thereafter, 

each Federal banking agency shall, in conjunction with the 

other relevant Federal banking agencies, review the information and schedules that are required to be filed by an 

insured depository institution in a report of condition required under paragraph (3). 

(B) REDUCTION OR ELIMINATION OF INFORMATION FOUND

TO BE UNNECESSARY.—After completing the review required by subparagraph (A), a Federal banking agency, in 

conjunction with the other relevant Federal banking agencies, shall reduce or eliminate any requirement to file information or schedules under paragraph (3) (other than information or schedules that are otherwise required by law) 

if the agency determines that the continued collection of 

such information or schedules is no longer necessary or appropriate. 

(12) SHORT FORM REPORTING.— 

(A) IN GENERAL.—The appropriate Federal banking agencies shall issue regulations that allow for a reduced reporting requirement for a covered depository institution when 

the institution makes the first and third report of condition 

for a year, as required under paragraph (3). 

(B) DEFINITION.—In this paragraph, the term ‘‘covered 

depository institution’’ means an insured depository institution that— 

(i) has less than $5,000,000,000 in total consolidated 

assets; and 

(ii) satisfies such other criteria as the appropriate 

Federal banking agencies determine appropriate. 

(b) ASSESSMENTS.— 

(1) RISK-BASED ASSESSMENT SYSTEM.— 

(A) RISK-BASED ASSESSMENT SYSTEM REQUIRED.—The 

Board of Directors shall, by regulation, establish a riskbased assessment system for insured depository institutions. 

(B) PRIVATE REINSURANCE AUTHORIZED.—In carrying out 

this paragraph, the Corporation may— 

(i) obtain private reinsurance covering not more 

than 10 percent of any loss the Corporation incurs 

with respect to an insured depository institution; and 

(ii) base that institution’s assessment (in whole or in 

part) on the cost of the reinsurance. 

(C) RISK-BASED ASSESSMENT SYSTEM DEFINED.—For purposes of this paragraph, the term ‘‘risk-based assessment 

system’’ means a system for calculating a depository institution’s assessment based on— 

(i) the probability that the Deposit Insurance Fund 

will incur a loss with respect to the institution, taking 

into consideration the risks attributable to— 

(I) different categories and concentrations of assets; 

13 

(II) different categories and concentrations of liabilities, both insured and uninsured, contingent 

and noncontingent; and 

(III) any other factors the Corporation determines are relevant to assessing such probability; 

(ii) the likely amount of any such loss; and 

(iii) the revenue needs of the Deposit Insurance 

Fund. 

(D) SEPARATE ASSESSMENT SYSTEMS.—The Board of Directors may establish separate risk-based assessment systems for large and small members of the Deposit Insurance Fund. 

(E) INFORMATION CONCERNING RISK OF LOSS AND ECONOMIC CONDITIONS.— 

(i) SOURCES OF INFORMATION.—For purposes of determining risk of losses at insured depository institutions and economic conditions generally affecting depository institutions, the Corporation shall collect information, as appropriate, from all sources the Board 

of Directors considers appropriate, including reports of 

condition, inspection reports, and other information 

from all Federal banking agencies, any information 

available from State bank supervisors, State insurance 

and securities regulators, the Securities and Exchange 

Commission (including information described in section 35), the Secretary of the Treasury, the Commodity 

Futures Trading Commission, the Farm Credit Administration, the Federal Trade Commission, any Federal 

reserve bank or Federal home loan bank, and other 

regulators of financial institutions, and any information available from private economic, credit, or business analysts. 

(ii) CONSULTATION WITH FEDERAL BANKING AGEN- CIES.— 

(I) IN GENERAL.—Except as provided in subclause (II), in assessing the risk of loss to the Deposit Insurance Fund with respect to any insured 

depository institution, the Corporation shall consult with the appropriate Federal banking agency 

of such institution. 

(II) TREATMENT ON AGGREGATE BASIS.—In the 

case of insured depository institutions that are 

well capitalized (as defined in section 38) and, in 

the most recent examination, were found to be 

well managed, the consultation under subclause 

(I) concerning the assessment of the risk of loss 

posed by such institutions may be made on an aggregate basis. 

(iii) RULE OF CONSTRUCTION.—No provision of this 

paragraph shall be construed as providing any new 

authority for the Corporation to require submission of 

information by insured depository institutions to the 

Corporation. 

(F) MODIFICATIONS TO THE RISK-BASED ASSESSMENT SYSTEM ALLOWED ONLY AFTER NOTICE AND COMMENT.—In reVerDate Sep 11 2014 04:08 Feb 24, 2018 Jkt 079006 PO 00000 Frm 00013 Fmt 6659 Sfmt 6601 E:\HR\OC\HR577.XXX HR577
14 

vising or modifying the risk-based assessment system at 

any time after the date of the enactment of the Federal 

Deposit Insurance Reform Act of 2005, the Board of Directors may implement such revisions or modification in final 

form only after notice and opportunity for comment. 

(2) SETTING ASSESSMENTS.— (A) IN GENERAL.—The Board of Directors shall set assessments for insured depository institutions in such 

amounts as the Board of Directors may determine to be 

necessary or appropriate, subject to subparagraph (D). 

(B) FACTORS TO BE CONSIDERED.—In setting assessments 

under subparagraph (A), the Board of Directors shall consider the following factors: 

(i) The estimated operating expenses of the Deposit 

Insurance Fund. 

(ii) The estimated case resolution expenses and income of the Deposit Insurance Fund. 

(iii) The projected effects of the payment of assessments on the capital and earnings of insured depository institutions. 

(iv) The risk factors and other factors taken into account pursuant to paragraph (1) under the risk-based 

assessment system, including the requirement under 

such paragraph to maintain a risk-based system. 

(v) Any other factors the Board of Directors may determine to be appropriate. 

(D) NOTICE OF ASSESSMENTS.—The Corporation shall notify each insured depository institution of that institution’s 

assessment. 

(E) BANK ENTERPRISE ACT REQUIREMENT.—The Corporation shall design the risk-based assessment system so that, 

insofar as the system bases assessments, directly or indirectly, on deposits, the portion of the deposits of any insured depository institution which are attributable to lifeline accounts established in accordance with the Bank Enterprise Act of 1991 shall be subject to assessment at a 

rate determined in accordance with such Act. 

(3) DESIGNATED RESERVE RATIO.— (A) ESTABLISHMENT.— (i) IN GENERAL.—Before the beginning of each calendar year, the Board of Directors shall designate the 

reserve ratio applicable with respect to the Deposit Insurance Fund and publish the reserve ratio so designated. 

(ii) RULEMAKING REQUIREMENT.—Any change to the 

designated reserve ratio shall be made by the Board of 

Directors by regulation after notice and opportunity 

for comment. 

(B) MINIMUM RESERVE RATIO.—The reserve ratio designated by the Board of Directors for any year may not be 

less than 1.35 percent of estimated insured deposits, or the 

comparable percentage of the assessment base set forth in 

paragraph (2)(C). 

(C) FACTORS.—In designating a reserve ratio for any 

year, the Board of Directors shall— 

15 

(i) take into account the risk of losses to the Deposit 

Insurance Fund in such year and future years, including historic experience and potential and estimated 

losses from insured depository institutions; 

(ii) take into account economic conditions generally 

affecting insured depository institutions so as to allow 

the designated reserve ratio to increase during more 

favorable economic conditions and to decrease during 

less favorable economic conditions, notwithstanding 

the increased risks of loss that may exist during such 

less favorable conditions, as determined to be appropriate by the Board of Directors; 

(iii) seek to prevent sharp swings in the assessment 

rates for insured depository institutions; and 

(iv) take into account such other factors as the 

Board of Directors may determine to be appropriate, 

consistent with the requirements of this subparagraph. 

(D) PUBLICATION OF PROPOSED CHANGE IN RATIO.—In soliciting comment on any proposed change in the designated 

reserve ratio in accordance with subparagraph (A), the 

Board of Directors shall include in the published proposal 

a thorough analysis of the data and projections on which 

the proposal is based. 

(E) DIF RESTORATION PLANS.— 

(i) IN GENERAL.—Whenever— 

(I) the Corporation projects that the reserve 

ratio of the Deposit Insurance Fund will, within 6 

months of such determination, fall below the minimum amount specified in subparagraph (B)(ii) for 

the designated reserve ratio; or 

(II) the reserve ratio of the Deposit Insurance 

Fund actually falls below the minimum amount 

specified in subparagraph (B)(ii) for the designated reserve ratio without any determination 

under subclause (I) having been made, 

the Corporation shall establish and implement a Deposit Insurance Fund restoration plan within 90 days 

that meets the requirements of clause (ii) and such 

other conditions as the Corporation determines to be 

appropriate. 

(ii) REQUIREMENTS OF RESTORATION PLAN.—A Deposit Insurance Fund restoration plan meets the requirements of this clause if the plan provides that the 

reserve ratio of the Fund will meet or exceed the minimum amount specified in subparagraph (B)(ii) for the 

designated reserve ratio before the end of the 8-year 

period beginning upon the implementation of the plan 

(or such longer period as the Corporation may determine to be necessary due to extraordinary circumstances). 

(iii) RESTRICTION ON ASSESSMENT CREDITS.—As part 

of any restoration plan under this subparagraph, the 

Corporation may elect to restrict the application of asVerDate Sep 11 2014 04:08 Feb 24, 2018 Jkt 079006 PO 00000 Frm 00015 Fmt 6659 Sfmt 6601 E:\HR\OC\HR577.XXX HR577
16 

sessment credits provided under subsection (e)(3) for 

any period that the plan is in effect. 

(iv) LIMITATION ON RESTRICTION.—Notwithstanding 

clause (iii), while any restoration plan under this subparagraph is in effect, the Corporation shall apply 

credits provided to an insured depository institution 

under subsection (e)(3) against any assessment imposed on the institution for any assessment period in 

an amount equal to the lesser of— 

(I) the amount of the assessment; or 

(II) the amount equal to 3 basis points of the institution’s assessment base. 

(v) TRANSPARENCY.—Not more than 30 days after 

the Corporation establishes and implements a restoration plan under clause (i), the Corporation shall publish in the Federal Register a detailed analysis of the 

factors considered and the basis for the actions taken 

with regard to the plan. 

(4) DEPOSITORY INSTITUTION REQUIRED TO MAINTAIN ASSESSMENT-RELATED RECORDS.—Each insured depository institution 

shall maintain all records that the Corporation may require for 

verifying the correctness of any assessment on the insured depository institution under this subsection until the later of— 

(A) the end of the 3-year period beginning on the due 

date of the assessment; or 

(B) in the case of a dispute between the insured depository institution and the Corporation with respect to such 

assessment, the date of a final determination of any such 

dispute. 

(5) EMERGENCY SPECIAL ASSESSMENTS.—In addition to the 

other assessments imposed on insured depository institutions 

under this subsection, the Corporation may impose 1 or more 

special assessments on insured depository institutions in an 

amount determined by the Corporation if the amount of any 

such assessment is necessary— 

(A) to provide sufficient assessment income to repay 

amounts borrowed from the Secretary of the Treasury 

under section 14(a) in accordance with the repayment 

schedule in effect under section 14(c) during the period 

with respect to which such assessment is imposed; 

(B) to provide sufficient assessment income to repay obligations issued to and other amounts borrowed from insured depository institutions under section 14(d); or 

(C) for any other purpose that the Corporation may 

deem necessary. 

(6) COMMUNITY ENTERPRISE CREDITS.—The Corporation shall 

allow a credit against any semiannual assessment to any insured depository institution which satisfies the requirements of 

the Community Enterprise Assessment Credit Board under 

section 233(a)(1) of the Bank Enterprise Act of 1991 in the 

amount determined by such Board by regulation. 

(c) CERTIFIED STATEMENTS; PAYMENTS.— (1) CERTIFIED STATEMENTS REQUIRED.— 

(A) IN GENERAL.—Each insured depository institution 

shall file with the Corporation a certified statement conVerDate Sep 11 2014 04:08 Feb 24, 2018 Jkt 079006 PO 00000 Frm 00016 Fmt 6659 Sfmt 6601 E:\HR\OC\HR577.XXX HR577
17 

taining such information as the Corporation may require 

for determining the institution’s assessment. 

(B) FORM OF CERTIFICATION.—The certified statement required under subparagraph (A) shall— 

(i) be in such form and set forth such supporting information as the Board of Directors shall prescribe; 

and 

(ii) be certified by the president of the depository institution or any other officer designated by its board 

of directors or trustees that to the best of his or her 

knowledge and belief, the statement is true, correct 

and complete, and in accordance with this Act and 

regulations issued hereunder. 

(2) PAYMENTS REQUIRED.— 

(A) IN GENERAL.—Each insured depository institution 

shall pay to the Corporation the assessment imposed 

under subsection (b). 

(B) FORM OF PAYMENT.—The payments required under 

subparagraph (A) shall be made in such manner and at 

such time or times as the Board of Directors shall prescribe by regulation. 

(3) NEWLY INSURED INSTITUTIONS.—To facilitate the administration of this section, the Board of Directors may waive the 

requirements of paragraphs (1) and (2) for the initial assessment period in which a depository institution becomes insured. 

(4) PENALTY FOR FAILURE TO MAKE ACCURATE CERTIFIED

STATEMENT.— (A) FIRST TIER.—Any insured depository institution 

which— 

(i) maintains procedures reasonably adapted to 

avoid any inadvertent error and, unintentionally and 

as a result of such an error, fails to submit the certified statement under paragraph (1) within the period 

of time required under paragraph (1) or submits a 

false or misleading certified statement; or 

(ii) submits the statement at a time which is minimally after the time required in such paragraph, 

shall be subject to a penalty of not more than $2,000 for 

each day during which such failure continues or such false 

and misleading information is not corrected. The institution shall have the burden of proving that an error was inadvertent or that a statement was inadvertently submitted 

late. 

(B) SECOND TIER.—Any insured depository institution 

which fails to submit the certified statement under paragraph (1) within the period of time required under paragraph (1) or submits a false or misleading certified statement in a manner not described in subparagraph (A) shall 

be subject to a penalty of not more than $20,000 for each 

day during which such failure continues or such false and 

misleading information is not corrected. 

(C) THIRD TIER.—Notwithstanding subparagraphs (A) 

and (B), if any insured depository institution knowingly or 

with reckless disregard for the accuracy of any certified 

statement described in paragraph (1) submits a false or 

18 

misleading certified statement under paragraph (1), the 

Corporation may assess a penalty of not more than 

$1,000,000 or not more than 1 percent of the total assets 

of the institution, whichever is less, per day for each day 

during which the failure continues or the false or misleading information in such statement is not corrected. 

(D) ASSESSMENT PROCEDURE.—Any penalty imposed 

under this paragraph shall be assessed and collected by 

the Corporation in the manner provided in subparagraphs 

(E), (F), (G), and (I) of section 8(i)(2) (for penalties imposed 

under such section) and any such assessment (including 

the determination of the amount of the penalty) shall be 

subject to the provisions of such section. 

(E) HEARING.—Any insured depository institution 

against which any penalty is assessed under this paragraph shall be afforded an agency hearing if the institution submits a request for such hearing within 20 days 

after the issuance of the notice of the assessment. Section 

8(h) shall apply to any proceeding under this subparagraph. 

(d) CORPORATION EXEMPT FROM APPORTIONMENT.—Notwithstanding any other provision of law, amounts received pursuant to 

any assessment under this section and any other amounts received 

by the Corporation shall not be subject to apportionment for the 

purposes of chapter 15 of title 31, United States Code, or under any 

other authority. 

(e) REFUNDS, DIVIDENDS, AND CREDITS.— 

(1) REFUNDS OF OVERPAYMENTS.—In the case of any payment 

of an assessment by an insured depository institution in excess 

of the amount due to the Corporation, the Corporation may— 

(A) refund the amount of the excess payment to the insured depository institution; or 

(B) credit such excess amount toward the payment of 

subsequent assessments until such credit is exhausted. 

(2) DIVIDENDS FROM EXCESS AMOUNTS IN DEPOSIT INSURANCE

FUND.— 

(A) RESERVE RATIO IN EXCESS OF 1.5 PERCENT OF ESTIMATED INSURED DEPOSITS.—If, at the end of a calendar 

year, the reserve ratio of the Deposit Insurance Fund exceeds 1.5 percent of estimated insured deposits, the Corporation shall declare the amount in the Fund in excess of 

the amount required to maintain the reserve ratio at 1.5 

percent of estimated insured deposits, as dividends to be 

paid to insured depository institutions. 

(B) LIMITATION.—The Board of Directors may, in its sole 

discretion, suspend or limit the declaration of payment of 

dividends under subparagraph (A). 

(C) NOTICE AND OPPORTUNITY FOR COMMENT.—The Corporation shall prescribe, by regulation, after notice and opportunity for comment, the method for the declaration, calculation, distribution, and payment of dividends under this 

paragraph 

(3) ONE-TIME CREDIT BASED ON TOTAL ASSESSMENT BASE AT

YEAR-END 1996.— 

19 

(A) IN GENERAL.—Before the end of the 270-day period 

beginning on the date of the enactment of the Federal Deposit Insurance Reform Act of 2005, the Board of Directors 

shall, by regulation after notice and opportunity for comment, provide for a credit to each eligible insured depository institution (or a successor insured depository institution), based on the assessment base of the institution on 

December 31, 1996, as compared to the combined aggregate assessment base of all eligible insured depository institutions, taking into account such factors as the Board of 

Directors may determine to be appropriate. 

(B) CREDIT LIMIT.—The aggregate amount of credits 

available under subparagraph (A) to all eligible insured 

depository institutions shall equal the amount that the 

Corporation could collect if the Corporation imposed an assessment of 10.5 basis points on the combined assessment 

base of the Bank Insurance Fund and the Savings Association Insurance Fund as of December 31, 2001. 

(C) ELIGIBLE INSURED DEPOSITORY INSTITUTION DEFINED.—For purposes of this paragraph, the term ‘‘eligible 

insured depository institution’’ means any insured depository institution that— 

(i) was in existence on December 31, 1996, and paid 

a deposit insurance assessment prior to that date; or 

(ii) is a successor to any insured depository institution described in clause (i). 

(D) APPLICATION OF CREDITS.— (i) IN GENERAL.—Subject to clause (ii), the amount of 

a credit to any eligible insured depository institution 

under this paragraph shall be applied by the Corporation, subject to subsection (b)(3)(E), to the assessments 

imposed on such institution under subsection (b) that 

become due for assessment periods beginning after the 

effective date of regulations prescribed under subparagraph (A). 

(ii) TEMPORARY RESTRICTION ON USE OF CREDITS.— The amount of a credit to any eligible insured depository institution under this paragraph may not be applied to more than 90 percent of the assessments imposed on such institution under subsection (b) that become due for assessment periods beginning in fiscal 

years 2008, 2009, and 2010. 

(iii) REGULATIONS.—The regulations prescribed 

under subparagraph (A) shall establish the qualifications and procedures governing the application of assessment credits pursuant to clause (i). 

(E) LIMITATION ON AMOUNT OF CREDIT FOR CERTAIN DE- POSITORY INSTITUTIONS.—In the case of an insured depository institution that exhibits financial, operational, or compliance weaknesses ranging from moderately severe to unsatisfactory, or is not adequately capitalized (as defined in 

section 38) at the beginning of an assessment period, the 

amount of any credit allowed under this paragraph against 

the assessment on that depository institution for such period may not exceed the amount calculated by applying to 

20 

that depository institution the average assessment rate on 

all insured depository institutions for such assessment period. 

(F) SUCCESSOR DEFINED.—The Corporation shall define 

the term ‘‘successor’’ for purposes of this paragraph, by 

regulation, and may consider any factors as the Board may 

deem appropriate. 

(4) ADMINISTRATIVE REVIEW.— (A) IN GENERAL.—The regulations prescribed under 

paragraphs (2) and (3) shall include provisions allowing an 

insured depository institution a reasonable opportunity to 

challenge administratively the amount of the credit or dividend determined under paragraph (2) or (3) for such institution. 

(B) ADMINISTRATIVE REVIEW.—Any review under subparagraph (A) of any determination of the Corporation 

under paragraph (2) or (3) shall be final and not subject 

to judicial review. 

(f) Any insured depository institution which fails to make any report of condition under subsection (a) of this section or to file any 

certified statement required to be filed by it in connection with determining the amount of any assessment payable by the depository 

institution to the Corporation may be compelled to make such report or file such statement by mandatory injunction or other appropriate remedy in a suit brought for such purpose by the Corporation against the depository institution and any officer or officers 

thereof in any court of the United States of competent jurisdiction 

in the District or Territory in which such depository institution is 

located. 

(g) ASSESSMENT ACTIONS.— 

(1) IN GENERAL.—The Corporation, in any court of competent 

jurisdiction, shall be entitled to recover from any insured depository institution the amount of any unpaid assessment lawfully payable by such insured depository institution. 

(2) STATUTE OF LIMITATIONS.—The following provisions shall 

apply to actions relating to assessments, notwithstanding any 

other provision in Federal law, or the law of any State: 

(A) Any action by an insured depository institution to recover from the Corporation the overpaid amount of any assessment shall be brought within 3 years after the date 

the assessment payment was due, subject to the exception 

in subparagraph (E). 

(B) Any action by the Corporation to recover from an insured depository institution the underpaid amount of any 

assessment shall be brought within 3 years after the date 

the assessment payment was due, subject to the exceptions 

in subparagraphs (C) and (E). 

(C) If an insured depository institution has made a false 

or fraudulent statement with intent to evade any or all of 

its assessment, the Corporation shall have until 3 years 

after the date of discovery of the false or fraudulent statement in which to bring an action to recover the underpaid 

amount. 

(D) Except as provided in subparagraph (C), assessment 

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21 

quired to be maintained pursuant to subsection (b)(4) shall 

be considered conclusive and not subject to change. 

(E) Any action for the underpaid or overpaid amount of 

any assessment that became due before the amendment to 

this subsection under the Federal Deposit Insurance Reform Act of 2005 took effect shall be subject to the statute 

of limitations for assessments in effect at the time the assessment became due. 

(h) Should any national member bank or any insured national 

nonmember bank fail to make any report of condition under subsection (a) of this section or to file any certified statement required 

to be filed by such bank under any provision of this section, or fail 

to pay any assessment required to be paid by such bank under any 

provision of this Act, and should the bank not correct such failure 

within thirty days after written notice has been given by the Corporation to an officer of the bank, citing this subsection, and stating that the bank has failed to make any report of condition under 

subsection (a) of this section or to file or pay as required by law, 

all the rights, privileges, and franchises of the bank granted to it 

under the National Bank Act, as amended, the Federal Reserve 

Act, as amended, or this Act, shall be thereby forfeited. Whether 

or not the penalty provided in this subsection has been incurred 

shall be determined and adjudged in the manner provided in the 

sixth paragraph of section 2 of the Federal Reserve Act, as amended. The remedies provided in this subsection and in the two preceding subsections shall not be construed as limiting any other 

remedies against any insured depository institution, but shall be in 

addition thereto. 

(i) INSURANCE OF TRUST FUNDS.— 

(1) IN GENERAL.—Trust funds held on deposit by an insured 

depository institution in a fiduciary capacity as trustee pursuant to any irrevocable trust established pursuant to any statute or written trust agreement shall be insured in an amount 

not to exceed the standard maximum deposit insurance 

amount (as determined under section 11(a)(1)) for each trust 

estate. 

(2) INTERBANK DEPOSITS.—Trust funds described in paragraph (1) which are deposited by the fiduciary depository institution in another insured depository institution shall be similarly insured to the fiduciary depository institution according 

to the trust estates represented. 

(3) BANK DEPOSIT FINANCIAL ASSISTANCE PROGRAM.—Notwithstanding paragraph (1), funds deposited by an insured depository institution pursuant to the Bank Deposit Financial 

Assistance Program of the Department of Energy shall be separately insured in an amount not to exceed the standard maximum deposit insurance amount (as determined under section 

11(a)(1)) for each insured depository institution depositing such 

funds. 

(4) REGULATIONS.—The Board of Directors may prescribe 

such regulations as may be necessary to clarify the insurance 

coverage under this subsection and to prescribe the manner of 

reporting and depositing such trust funds. 

(j)(1) No person, acting directly or indirectly or through or in concert with one or more other persons, shall acquire control of any 

22 

insured depository institution through a purchase, assignment, 

transfer, pledge, or other disposition of voting stock of such insured 

depository institution unless the appropriate Federal banking agency has been given sixty days’ prior written notice of such proposed 

acquisition and within that time period the agency has not issued 

a notice disapproving the proposed acquisition or, in the discretion 

of the agency, extending for an additional 30 days the period during which such a disapproval may issue.The period for disapproval 

under the preceding sentence may be extended not to exceed 2 additional times for not more than 45 days each time if— 

(A) the agency determines that any acquiring party has not 

furnished all the information required under paragraph (6); 

(B) in the agency’s judgment, any material information submitted is substantially inaccurate; 

(C) the agency has been unable to complete the investigation 

of an acquiring party under paragraph (2)(B) because of any 

delay caused by, or the inadequate cooperation of, such acquiring party; or 

(D) the agency determines that additional time is needed— 

(i) to investigate and determine that no acquiring party 

has a record of failing to comply with the requirements of 

subchapter II of chapter 53 of title 31, United States Code; 

or 

(ii) to analyze the safety and soundness of any plans or 

proposals described in paragraph (6)(E) or the future prospects of the institution. 

An acquisition may be made prior to expiration of the disapproval 

period if the agency issues written notice of its intent not to disapprove the action. 

(2)(A) NOTICE TO STATE AGENCY.—Upon receiving any notice 

under this subsection, the appropriate Federal banking agency 

shall forward a copy thereof to the appropriate State depository institution supervisory agency if the depository institution the voting 

shares of which are sought to be acquired is a State depository institution, and shall allow thirty days within which the views and 

recommendations of such State depository institution supervisory 

agency may be submitted. The appropriate Federal banking agency 

shall give due consideration to the views and recommendations of 

such State agency in determining whether to disapprove any proposed acquisition. Notwithstanding the provisions of this paragraph, if the appropriate Federal banking agency determines that 

it must act immediately upon any notice of a proposed acquisition 

in order to prevent the probable default of the depository institution involved in the proposed acquisition, such Federal banking 

agency may dispense with the requirements of this paragraph or, 

if a copy of the notice is forwarded to the State depository institution supervisory agency, such Federal banking agency may request 

that the views and recommendations of such State depository institution supervisory agency be submitted immediately in any form or 

by any means acceptable to such Federal banking agency. 

(B) INVESTIGATION OF PRINCIPALS REQUIRED.—Upon receiving 

any notice under this subsection, the appropriate Federal banking 

agency shall— 

(i) conduct an investigation of the competence, experience, 

integrity, and financial ability of each person named in a notice 

23 

of a proposed acquisition as a person by whom or for whom 

such acquisition is to be made; and 

(ii) make an independent determination of the accuracy and 

completeness of any information described in paragraph (6) 

with respect to such person. 

(C) REPORT.—The appropriate Federal banking agency shall prepare a written report of any investigation under subparagraph (B) 

which shall contain, at a minimum, a summary of the results of 

such investigation. The agency shall retain such written report as 

a record of the agency. 

(D) PUBLIC COMMENT.—Upon receiving notice of a proposed acquisition, the appropriate Federal banking agency shall, unless 

such agency determines that an emergency exists, within a reasonable period of time— 

(i) publish the name of the insured depository institution 

proposed to be acquired and the name of each person identified 

in such notice as a person by whom or for whom such acquisition is to be made; and 

(ii) solicit public comment on such proposed acquisition, particularly from persons in the geographic area where the bank 

proposed to be acquired is located, before final consideration of 

such notice by the agency, 

unless the agency determines in writing that such disclosure or solicitation would seriously threaten the safety or soundness of such 

bank. 

(3) Within three days after its decision to disapprove any proposed acquisition, the appropriate Federal banking agency shall notify the acquiring party in writing of the disapproval. Such notice 

shall provide a statement of the basis for the disapproval. 

(4) Within ten days of receipt of such notice of disapproval, the 

acquiring party may request an agency hearing on the proposed acquisition. In such hearing all issues shall be determined on the 

record pursuant to section 554 of title 5, United States Code. The 

length of the hearing shall be determined by the appropriate Federal banking agency. At the conclusion thereof, the appropriate 

Federal banking agency shall by order approve or disapprove the 

proposed acquisition on the basis of the record made at such hearing. 

(5) Any person whose proposed acquisition is disapproved after 

agency hearings under this subsection may obtain review by the 

United States court of appeals for the circuit in which the home office of the bank to be acquired is located, or the United States 

Court of Appeals for the District of Columbia Circuit, by filing a 

notice of appeal in such court within ten days from the date of such 

order, and simultaneously sending a copy of such notice by registered or certified mail to the appropriate Federal banking agency. 

The appropriate Federal banking agency shall promptly certify and 

file in such court the record upon which the disapproval was based. 

The findings of the appropriate Federal banking agency shall be set 

aside if found to be arbitrary or capricious or if found to violate 

procedures established by this subsection. 

(6) Except as otherwise provided by regulation of the appropriate 

Federal banking agency, a notice filed pursuant to this subsection 

shall contain the following information: 

24 

(A) The identity, personal history, business background and 

experience of each person by whom or on whose behalf the acquisition is to be made, including his material business activities and affiliations during the past five years, and a description of any material pending legal or administrative proceedings in which he is a party and any criminal indictment 

or conviction of such person by a State or Federal court. 

(B) A statement of the assets and liabilities of each person 

by whom or on whose behalf the acquisition is to be made, as 

of the end of the fiscal year for each of five fiscal years immediately preceding the date of the notice, together with related 

statements of income and source and application of funds for 

each of the fiscal years then concluded, all prepared in accordance with generally accepted accounting principles consistently 

applied, and an interim statement of the assets and liabilities 

for each such person, together with related statements of income and source and application of funds, as of a date not 

more than ninety days prior to the date of the filing of the notice. 

(C) The terms and conditions of the proposed acquisition and 

the manner in which the acquisition is to be made. 

(D) The identity, source and amount of the funds or other 

consideration used or to be used in making the acquisition, and 

if any part of these funds or other consideration has been or 

is to be borrowed or otherwise obtained for the purpose of making the acquisition, a description of the transaction, the names 

of the parties, and any arrangements, agreements, or understandings with such persons. 

(E) Any plans or proposals which any acquiring party making the acquisition may have to liquidate the bank, to sell its 

assets or merge it with any company or to make any other 

major change in its business or corporate structure or management. 

(F) The identification of any person employed, retained, or to 

be compensated by the acquiring party, or by any person on his 

behalf, to make solicitations or recommendations to stockholders for the purpose of assisting in the acquisition, and a 

brief description of the terms of such employment, retainer, or 

arrangement for compensation. 

(G) Copies of all invitations or tenders or advertisements 

making a tender offer to stockholders for purchase of their 

stock to be used in connection with the proposed acquisition. 

(H) Any additional relevant information in such form as the 

appropriate Federal banking agency may require by regulation 

or by specific request in connection with any particular notice. 

(7) The appropriate Federal banking agency may disapprove any 

proposed acquisition if— 

(A) the proposed acquisition of control would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business 

of banking in any part of the United States; 

(B) the effect of the proposed acquisition of control in any 

section of the country may be substantially to lessen competition or to tend to create a monopoly or the proposed acquisition 

of control would in any other manner be in restraint of trade, 

25 

and the anticompetitive effects of the proposed acquisition of 

control are not clearly outweighed in the public interest by the 

probable effect of the transaction in meeting the convenience 

and needs of the community to be served; 

(C) either the financial condition of any acquiring person or 

the future prospects of the institution is such as might jeopardize the financial stability of the bank or prejudice the interests of the depositors of the bank; 

(D) the competence, experience, or integrity of any acquiring 

person or of any of the proposed management personnel indicates that it would not be in the interest of the depositors of 

the bank, or in the interest of the public to permit such person 

to control the bank; 

(E) any acquiring person neglects, fails, or refuses to furnish 

the appropriate Federal banking agency all the information required by the appropriate Federal banking agency; or 

(F) the appropriate Federal banking agency determines that 

the proposed transaction would result in an adverse effect on 

the Deposit Insurance Fund. 

(8) For the purposes of this subsection, the term— 

(A) ‘‘person’’ means an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization, or any other form of 

entity not specifically listed herein; and 

(B) ‘‘control’’ means the power, directly or indirectly, to direct 

the management or policies of an insured depository institution 

or to vote 25 per centum or more of any class of voting securities of an insured depository institution. 

(9) REPORTING OF STOCK LOANS.— 

(A) REPORT REQUIRED.—Any foreign bank, or any affiliate thereof, that has credit outstanding to any person or 

group of persons which is secured, directly or indirectly, by 

shares of an insured depository institution shall file a consolidated report with the appropriate Federal banking 

agency for such insured depository institution if the extensions of credit by the foreign bank or any affiliate thereof, 

in the aggregate, are secured, directly or indirectly, by 25 

percent or more of any class of shares of the same insured 

depository institution. 

(B) DEFINITIONS.—For purposes of this paragraph, the 

following definitions shall apply: 

(i) FOREIGN BANK.—The terms ‘‘foreign bank’’ and 

‘‘affiliate’’ have the same meanings as in section 1 of 

the International Banking Act of 1978. 

(ii) CREDIT OUTSTANDING.—The term ‘‘credit outstanding’’ includes— 

(I) any loan or extension of credit, 

(II) the issuance of a guarantee, acceptance, or 

letter of credit, including an endorsement or 

standby letter of credit, and 

(III) any other type of transaction that extends 

credit or financing to the person or group of persons. 

26 

(iii) GROUP OF PERSONS.—The term ‘‘group of persons’’ includes any number of persons that the foreign 

bank or any affiliate thereof reasonably believes— 

(I) are acting together, in concert, or with one 

another to acquire or control shares of the same 

insured depository institution, including an acquisition of shares of the same insured depository institution at approximately the same time under 

substantially the same terms; or 

(II) have made, or propose to make, a joint filing 

under section 13 of the Securities Exchange Act of 

1934 regarding ownership of the shares of the 

same insured depository institution. 

(C) INCLUSION OF SHARES HELD BY THE FINANCIAL INSTITUTION.—Any shares of the insured depository institution 

held by the foreign bank or any affiliate thereof as principal shall be included in the calculation of the number of 

shares in which the foreign bank or any affiliate thereof 

has a security interest for purposes of subparagraph (A). 

(D) REPORT REQUIREMENTS.— 

(i) TIMING OF REPORT.—The report required under 

this paragraph shall be a consolidated report on behalf 

of the foreign bank and all affiliates thereof, and shall 

be filed in writing within 30 days of the date on which 

the foreign bank or affiliate thereof first believes that 

the security for any outstanding credit consists of 25 

percent or more of any class of shares of an insured 

depository institution. 

(ii) CONTENT OF REPORT.—The report under this 

paragraph shall indicate the number and percentage 

of shares securing each applicable extension of credit, 

the identity of the borrower, and the number of shares 

held as principal by the foreign bank and any affiliate 

thereof. 

(iii) COPY TO OTHER AGENCIES.—A copy of any report 

under this paragraph shall be filed with the appropriate Federal banking agency for the foreign bank or 

any affiliate thereof (if other than the agency receiving 

the report under this paragraph). 

(iv) OTHER INFORMATION.—Each appropriate Federal 

banking agency may require any additional information necessary to carry out the agency’s supervisory responsibilities. 

(E) EXCEPTIONS.— 

(i) EXCEPTION WHERE INFORMATION PROVIDED BY

BORROWER.—Notwithstanding subparagraph (A), a foreign bank or any affiliate thereof shall not be required 

to report a transaction under this paragraph if the 

person or group of persons referred to in such subparagraph has disclosed the amount borrowed from 

such foreign bank or any affiliate thereof and the security interest of the foreign bank or any affiliate thereof 

to the appropriate Federal banking agency for the insured depository institution in connection with a notice filed under this subsection, an application filed 

27 

under the Bank Holding Company Act of 1956, section 

10 of the Home Owners’ Loan Act, or any other application filed with the appropriate Federal banking 

agency for the insured depository institution as a substitute for a notice under this subsection, such as an 

application for deposit insurance, membership in the 

Federal Reserve System, or a national bank charter. 

(ii) EXCEPTION FOR SHARES OWNED FOR MORE THAN

1 YEAR.—Notwithstanding subparagraph (A), a foreign 

bank and any affiliate thereof shall not be required to 

report a transaction involving— 

(I) a person or group of persons that has been 

the owner or owners of record of the stock for a 

period of 1 year or more; or 

(II) stock issued by a newly chartered bank before the bank’s opening. 

(10) The reports required by paragraph (9) of this subsection 

shall contain such of the information referred to in paragraph (6) 

of this subsection, and such other relevant information, as the appropriate Federal banking agency may require by regulation or by 

specific request in connection with any particular report. 

(11) The Federal banking agency receiving a notice or report filed 

pursuant to paragraph (1) or (9) shall immediately furnish to the 

other Federal banking agencies a copy of such notice or report. 

(12) Whenever such a change in control occurs, each insured depository institution shall report promptly to the appropriate Federal banking agency any changes or replacement of its chief executive officer or of any director occurring in the next twelve-month 

period, including in its report a statement of the past and current 

business and professional affiliations of the new chief executive officer or directors. 

(13) The appropriate Federal banking agencies are authorized to 

issue rules and regulations to carry out this subsection. 

(14) Within two years after the effective date of the Change in 

Bank Control Act of 1978, and each year thereafter in each appropriate Federal banking agency’s annual report to the Congress, the 

appropriate Federal banking agency shall report to the Congress 

the results of the administration of this subsection, and make any 

recommendations as to changes in the law which in the opinion of 

the appropriate Federal banking agency would be desirable. 

(15) INVESTIGATIVE AND ENFORCEMENT AUTHORITY.— 

(A) INVESTIGATIONS.—The appropriate Federal banking 

agency may exercise any authority vested in such agency 

under section 8(n) in the course of conducting any investigation 

under paragraph (2)(B) or any other investigation which the 

agency, in its discretion, determines is necessary to determine 

whether any person has filed inaccurate, incomplete, or misleading information under this subsection or otherwise is violating, has violated, or is about to violate any provision of this 

subsection or any regulation prescribed under this subsection. 

(B) ENFORCEMENT.—Whenever it appears to the appropriate 

Federal banking agency that any person is violating, has violated, or is about to violate any provision of this subsection or 

any regulation prescribed under this subsection, the agency 

may, in its discretion, apply to the appropriate district court of 

28 

the United States or the United States court of any territory 

for— 

(i) a temporary or permanent injunction or restraining 

order enjoining such person from violating this subsection 

or any regulation prescribed under this subsection; or 

(ii) such other equitable relief as may be necessary to 

prevent any such violation (including divestiture). 

(C) JURISDICTION.— (i) The district courts of the United States and the 

United States courts in any territory shall have the same 

jurisdiction and power in connection with any exercise of 

any authority by the appropriate Federal banking agency 

under subparagraph (A) as such courts have under section 

8(n). 

(ii) The district courts of the United States and the 

United States courts of any territory shall have jurisdiction and power to issue any injunction or restraining order 

or grant any equitable relief described in subparagraph 

(B). When appropriate, any injunction, order, or other equitable relief granted under this paragraph shall be granted without requiring the posting of any bond. The resignation, termination of employment or participation, divestiture of control, or separation of or by an institution-affiliated party (including a separation caused by the closing of 

a depository institution) shall not affect the jurisdiction 

and authority of the appropriate Federal banking agency 

to issue any notice and proceed under this subsection 

against any such party, if such notice is served before the 

end of the 6-year period beginning on the date such party 

ceased to be such a party with respect to such depository 

institution (whether such date occurs before, on, or after 

the date of the enactment of this sentence). 

(16) CIVIL MONEY PENALTY.— (A) FIRST TIER.—Any person who violates any provision 

of this subsection, or any regulation or order issued by the 

appropriate Federal banking agency under this subsection, 

shall forfeit and pay a civil penalty of not more than 

$5,000 for each day during which such violation continues. 

(B) SECOND TIER.—Notwithstanding subparagraph (A), 

any person who— 

(i)(I) commits any violation described in any clause 

of subparagraph (A); 

(II) recklessly engages in an unsafe or unsound 

practice in conducting the affairs of a depository institution; or 

(III) breaches any fiduciary duty; 

(ii) which violation, practice, or breach— 

(I) is part of a pattern of misconduct; 

(II) causes or is likely to cause more than a 

minimal loss to such institution; or 

(III) results in pecuniary gain or other benefit to 

such person, 

shall forfeit and pay a civil penalty of not more than 

$25,000 for each day during which such violation, practice, 

or breach continues. 

29 

(C) THIRD TIER.—Notwithstanding subparagraphs (A) 

and (B), any person who— 

(i) knowingly— 

(I) commits any violation described in any 

clause of subparagraph (A); 

(II) engages in any unsafe or unsound practice 

in conducting the affairs of a depository institution; or 

(III) breaches any fiduciary duty; and 

(ii) knowingly or recklessly causes a substantial loss 

to such institution or a substantial pecuniary gain or 

other benefit to such person by reason of such violation, practice, or breach, 

shall forfeit and pay a civil penalty in an amount not to 

exceed the applicable maximum amount determined under 

subparagraph (D) for each day during which such violation, practice, or breach continues. 

(D) MAXIMUM AMOUNTS OF PENALTIES FOR ANY VIOLATION DESCRIBED IN SUBPARAGRAPH (C).—The maximum 

daily amount of any civil penalty which may be assessed 

pursuant to subparagraph (C) for any violation, practice, 

or breach described in such subparagraph is— 

(i) in the case of any person other than a depository 

institution, an amount to not exceed $1,000,000; and 

(ii) in the case of a depository institution, an amount 

not to exceed the lesser of— 

(I) $1,000,000; or 

(II) 1 percent of the total assets of such institution. 

(E) ASSESSMENT; ETC.—Any penalty imposed under subparagraph (A), (B), or (C) shall be assessed and collected 

by the appropriate Federal banking agency in the manner 

provided in subparagraphs (E), (F), (G), and (I) of section 

8(i)(2) for penalties imposed (under such section) and any 

such assessment shall be subject to the provisions of such 

section. 

(F) HEARING.—The depository institution or other person 

against whom any penalty is assessed under this paragraph shall be afforded an agency hearing if such institution or other person submits a request for such hearing 

within 20 days after the issuance of the notice of assessment. Section 8(h) shall apply to any proceeding under this 

paragraph. 

(G) DISBURSEMENT.—All penalties collected under authority of this paragraph shall be deposited into the Treasury. 

(17) EXCEPTIONS.—This subsection shall not apply with respect to a transaction which is subject to— 

(A) section 3 of the Bank Holding Company Act of 1956; 

(B) section 18(c) of this Act; or 

(C) section 10 of the Home Owners’ Loan Act. 

(18) APPLICABILITY OF CHANGE IN CONTROL PROVISIONS TO

OTHER INSTITUTIONS.—For purposes of this subsection, the 

term ‘‘insured depository institution’’ includes— 

(A) any depository institution holding company; and 

30 

(B) any other company which controls an insured depository institution and is not a depository institution holding 

company. 

(k) The appropriate Federal banking agencies are authorized to 

issue rules and regulations, including definitions of terms, to require the reporting and public disclosure of information by a bank 

or any executive officer or prinicipal shareholder thereof concerning 

extensions of credit by the bank to any of its executive officers or 

principal shareholders, or the related interests of such persons. 

(l) DESIGNATION OF FUND MEMBERSHIP FOR NEWLY INSURED DEPOSITORY INSTITUTIONS; DEFINITIONS.—For purposes of this section: 

(1) BANK INSURANCE FUND.—Any institution which— 

(A) becomes an insured depository institution; and 

(B) does not become a Savings Association Insurance 

Fund member pursuant to paragraph (2), 

shall be a Bank Insurance Fund member. 

(2) SAVINGS ASSOCIATION INSURANCE FUND.—Any savings association, other than any Federal savings bank chartered pursuant to section 5(o) of the Home Owners’ Loan Act, which becomes an insured depository institution shall be a Savings Association Insurance Fund member. 

(3) TRANSITION PROVISION.— 

(A) BANK INSURANCE FUND.—Any depository institution 

the deposits of which were insured by the Federal Deposit 

Insurance Corporation on the day before the date of the 

enactment of the Financial Institutions Reform, Recovery, 

and Enforcement Act of 1989, including— 

(i) any Federal savings bank chartered pursuant to 

section 5(o) of the Home Owners’ Loan Act; and 

(ii) any cooperative bank, 

shall be a Bank Insurance Fund member as of such date 

of enactment. 

(B) SAVINGS ASSOCIATION INSURANCE FUND.—Any savings association which is an insured depository institution 

by operation of section 4(a)(2) shall be a Savings Association Insurance Fund member as of the date of the enactment of the Financial Institutions Reform, Recovery, and 

Enforcement Act of 1989. 

(4) BANK INSURANCE FUND MEMBER.—The term ‘‘Bank Insurance Fund member’’ means any depository institution the deposits of which are insured by the Bank Insurance Fund. 

(5) SAVINGS ASSOCIATION INSURANCE FUND MEMBER.—The 

term ‘‘Savings Association Insurance Fund member’’ means 

any depository institution the deposits of which are insured by 

the Savings Association Insurance Fund. 

(6) BANK INSURANCE FUND RESERVE RATIO.—The term ‘‘Bank 

Insurance Fund reserve ratio’’ means the ratio of the net worth 

of the Bank Insurance Fund to the value of the aggregate estimated insured deposits held in all Bank Insurance Fund members. 

(7) SAVINGS ASSOCIATION INSURANCE FUND RESERVE RATIO.— 

The term ‘‘Savings Association Insurance Fund reserve ratio’’ 

means the ratio of the net worth of the Savings Association Insurance Fund to the value of the aggregate estimated insured 

31 

deposits held in all Savings Association Insurance Fund members. 

(m) SECONDARY RESERVE OFFSETS AGAINST PREMIUMS.— (1) OFFSETS IN CALENDAR YEARS BEGINNING BEFORE 1993.— Subject to the maximum amount limitation contained in paragraph (2) and notwithstanding any other provision of law, any 

insured savings association may offset such association’s pro 

rata share of the statutorily prescribed amount against any 

premium assessed against such association under subsection 

(b) of this section for any calendar year beginning before 1993. 

(2) ANNUAL MAXIMUM AMOUNT LIMITATION.—The amount of 

any offset allowed for any savings association under paragraph 

(1) for any calendar year beginning before 1993 shall not exceed an amount which is equal to 20 percent of such association’s pro rata share of the statutorily prescribed amount (as 

computed for such calendar year). 

(3) OFFSETS IN CALENDAR YEARS BEGINNING AFTER 1992.— 

Notwithstanding any other provision of law, a savings association may offset such association’s pro rata share of the statutorily prescribed amount against any premium assessed 

against such association under subsection (b) for any calendar 

year beginning after 1992. 

(4) TRANSFERABILITY.—No right, title, or interest of any insured depository institution in or with respect to its pro rata 

share of the secondary reserve shall be assignable or transferable whether by operation of law or otherwise, except to the extent that the Corporation may provide for transfer of such pro 

rata share in cases of merger or consolidation, transfer of bulk 

assets or assumption of liabilities, and similar transactions, as 

defined by the Corporation for purposes of this paragraph. 

(5) PRO RATA DISTRIBUTION ON TERMINATION OF INSURED STATUS.—If— 

(A) the status of any savings association as an insured 

depository institution is terminated pursuant to any provision of section 8 or the insurance of accounts of any such 

institution is otherwise terminated; 

(B) a receiver or other legal custodian is appointed for 

the purpose of liquidation or winding up the affairs of any 

savings association; or 

(C) the Corporation makes a determination that for the 

purposes of this subsection any savings association has 

otherwise gone into liquidation, 

the Corporation shall pay in cash to such institution its pro 

rata share of the secondary reserve, in accordance with such 

terms and conditions as the Corporation may prescribe, or, at 

the option of the Corporation, the Corporation may apply the 

whole or any part of the amount which would otherwise be 

paid in cash toward the payment of any indebtedness or obligation, whether matured or not, of such institution to the Corporation, existing or arising before such payment in cash. Such 

payment or such application need not be made to the extent 

that the provisions of the exception in paragraph (4) are applicable. 

(6) STATUTORILY PRESCRIBED AMOUNT DEFINED.—For purposes of this subsection, the term ‘‘statutorily prescribed 

32 

amount’’ means, with respect to any calendar year which ends 

after the date of the enactment of the Financial Institutions 

Reform, Recovery, and Enforcement Act of 1989— 

(A) $823,705,000, minus 

(B) the sum of— 

(i) the aggregate amount of offsets made before such 

date of enactment by all insured institutions under 

section 404(e)(2) of the National Housing Act (as in effect before such date of enactment); and 

(ii) the aggregate amount of offsets made by all savings associations under this subsection before the beginning of such calendar year. 

(7) SAVINGS ASSOCIATION’S PRO RATA AMOUNT.—For purposes 

of this subsection, any savings association’s pro rata share of 

the statutorily prescribed amount is the percentage which is 

equal to such association’s share of the secondary reserve as 

determined under section 404(e) of the National Housing Act 

on the day before the date on which the Federal Savings and 

Loan Insurance Corporation ceased to recognize the secondary 

reserve (as such Act was in effect on the day before such date). 

(8) YEAR OF ENACTMENT RULE.—With respect to the calendar 

year in which the Financial Institutions Reform, Recovery, and 

Enforcement Act of 1989 is enacted, the Corporation shall 

make such adjustments as may be necessary— 

(A) in the computation of the statutorily prescribed 

amount which shall be applicable for the remainder of 

such calendar year after taking into account the aggregate 

amount of offsets by all insured institutions under section 

404(e)(2) of the National Housing Act (as in effect before 

the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989) after the beginning of such calendar year and before such date of enactment; and 

(B) in the computation of the maximum amount of any 

savings association’s offset for such calendar year under 

paragraph (1) after taking into account— 

(i) the amount of any offset by such savings association under section 404(e)(2) of the National Housing 

Act (as in effect before such date of enactment) after 

the beginning of such calendar year and before such 

date of enactment; and 

(ii) the change of such association’s premium year 

from the 1-year period applicable under section 404(b) 

of the National Housing Act (as in effect before such 

date of enactment) to a calendar year basis. 

(n) COLLECTIONS ON BEHALF OF THE COMPTROLLER OF THE CURRENCY.—When requested by the Comptroller of the Currency, the 

Corporation shall collect on behalf of the Comptroller assessments 

on Federal savings associations levied by the Comptroller under 

section 9 of the Home Owners’ Loan Act. The Corporation shall be 

reimbursed for its actual costs for the collection of such assessVerDate Sep 11 2014 04:08 Feb 24, 2018 Jkt 079006 PO 00000 Frm 00032 Fmt 6659 Sfmt 6601 E:\HR\OC\HR577.XXX HR577
33 

ments. Any such assessments by the Comptroller shall be in addition to any amounts assessed by the Corporation. 

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