I

104TH CONGRESS

1ST SESSION H. R. 1475

To merge the Bank Insurance Fund and the Savings Association Insurance

Fund, to require savings associations to continue to pay assessments

to the Financing Corporation, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 7, 1995

Mr. LAFALCE introduced the following bill; which was referred to the

Committee on Banking and Financial Services

A BILL

To merge the Bank Insurance Fund and the Savings Association Insurance Fund, to require savings associations

to continue to pay assessments to the Financing Corporation, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Deposit Insurance

5 Fund Merger Act of 1995’’.

6 SEC. 2. MERGER OF FDIC INSURANCE FUNDS.

7 (a) IN GENERAL.—Section 11(a) of the Federal De8 posit Insurance Act (12 U.S.C. 1821(a)) is amended—
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1 (1) by striking paragraphs (5) and (6) and in2 serting the following new paragraph:

3 ‘‘(5) DEPOSIT INSURANCE FUND.—

4 ‘‘(A) ESTABLISHMENT.—There is hereby

5 established a fund to be known as the deposit

6 insurance fund.

7 ‘‘(B) TRANSFER TO FUND.—On the date

8 of the enactment of the Deposit Insurance

9 Fund Merger Act of 1995, the Bank Insurance

10 Fund and the Savings Association Insurance

11 Fund shall be abolished and all assets and li12 abilities of each such fund shall be transferred

13 to the deposit insurance fund.

14 ‘‘(C) USES.—The deposit insurance fund

15 shall be available to the Corporation for use

16 with respect to insured depository institutions.

17 ‘‘(D) DEPOSITS.—All amounts assessed

18 against insured depository institutions under

19 this Act shall be deposited in the deposit insur20 ance fund.

21 ‘‘(6) ACCOUNTING REQUIREMENTS.—

22 ‘‘(A) ACCOUNTING FOR USE OF FACILITIES

23 AND RESOURCES.—The Corporation shall keep

24 a full and complete accounting of all costs and

25 expenses associated with the use of any facility
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1 or resource used in the course of conducting su2 pervisory, regulatory, conservatorship, receiver3 ship, or liquidation functions with respect to in4 sured depository institutions.

5 ‘‘(B) ACCOUNTING FOR HOLDING AND

6 MANAGING ASSETS AND LIABILITIES.—The Cor7 poration shall keep a full and complete account8 ing of all costs and expenses associated with the

9 holding and management of any asset or liabil10 ity belonging to insured depository institutions

11 in conservatorship or receivership.

12 ‘‘(C) ACCOUNTING FOR DISPOSITION OF

13 ASSETS AND LIABILITIES.—The Corporation

14 shall keep a full and complete accounting of all

15 expenses and receipts associated with the dis16 position of any asset or liability belonging to in17 sured depository institutions in conservatorship

18 or receivership.’’;

19 (2) by striking subparagraph (A) of paragraph

20 (4); and

21 (3) by striking paragraph (7) and redesignating

22 paragraph (8) as paragraph (7).

23 (b) ASSESSMENTS OF FORMER BIF MEMBERS

24 CAPPED AT RATES APPLICABLE BEFORE MERGER OF

25 FUNDS.—Section 7(b)(2) of the Federal Deposit Insur-
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1 ance Act (12 U.S.C. 1817(b)(2)) is amended by inserting

2 after subparagraph (G) the following new subparagraphs:

3 ‘‘(H) REDUCED ASSESSMENT RATES CON4 TINUE TO APPLY TO FORMER BIF MEMBERS.—

5 Until the deposit insurance fund first meets or

6 exceeds the designated reserve ratio, the aver7 age assessment rates applicable under the risk8 based assessment system for any semiannual

9 period with respect to insured depository insti10 tutions which were Bank Insurance Fund mem11 bers on the day before the date of the enact12 ment of the Deposit Insurance Fund Merger

13 Act of 1995 shall not exceed the greater of—

14 ‘‘(i) the average of the assessment

15 rates which would be applicable to such in16 stitutions under this section for any semi17 annual period if the amendments made by

18 such Act had not been enacted; or

19 ‘‘(ii) 6 basis points.

20 ‘‘(I) SCHEDULE FOR MEETING DES21 IGNATED RESERVE RATIO.—Notwithstanding

22 paragraph (3), upon the enactment of the De23 posit Insurance Fund Merger Act of 1995, the

24 Corporation shall prescribe a schedule in the

25 manner provided in paragraph (3)(B) which
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1 culminates in a reserve ratio that is equal to or

2 greater than the designated reserve ratio not

3 later than 5 years after the date of the enact4 ment of such Act.’’.

5 (c) REPEAL OF CONVERSION MORATORIUM, EXIT

6 FEE, AND ‘‘OAKAR BANK’’ PROVISIONS.—Section 5(d) of

7 the Federal Deposit Insurance Act (12 U.S.C. 1815(d))

8 is amended by striking paragraphs (2) and (3).

9 (D) TECHNICAL AND CONFORMING AMENDMENTS.—

10 (1) Section 5(d)(1) of the Federal Deposit In11 surance Act (12 U.S.C. 1815(d)(1)) is amended by

12 striking ‘‘Bank Insurance Fund and the Savings As13 sociation Insurance Fund’’ and inserting ‘‘deposit

14 insurance fund’’.

15 (2) Section 7(b) of the Federal Deposit Insur16 ance Act (12 U.S.C. 1817(b)) is amended—

17 (A) in paragraph (1)(D), by striking

18 ‘‘each’’ and inserting ‘‘the’’;

19 (B) in paragraph (2)(A)(i)(I), by striking

20 ‘‘each’’ and inserting ‘‘the’’;

21 (C) in paragraph (2)(A)(iii), by striking ‘‘a

22 deposit’’ and inserting ‘‘the deposit’’;

23 (D) in paragraph (2)(A)(iv), by striking

24 ‘‘each’’ and inserting ‘‘the’’;
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1 (E) by striking subparagraph (B) of para2 graph (2);

3 (F) in paragraph (2)(C), by striking

4 ‘‘each’’ and inserting ‘‘the’’;

5 (G) by striking subparagraphs (E) and (F)

6 of paragraph (2);

7 (H) in paragraph (2)(G), by striking ‘‘a

8 deposit’’ and inserting ‘‘the deposit’’;

9 (I) in paragraph (3)(A), by striking ‘‘any

10 deposit’’ and inserting ‘‘the deposit’’;

11 (J) in paragraph (3)(C), by striking every12 thing after ‘‘subparagraph (B)’’ the 1st time

13 such term appears and inserting a period.

14 (K) by striking subparagraph (D) of para15 graph (3);

16 (L) in paragraph (6)(A)(ii), by striking

17 ‘‘Bank Insurance Fund members’’ and inserting

18 ‘‘insured depository institutions’’; and

19 (M) by striking subparagraph (B) of para20 graph (6).

21 (3) Section 7 of the Federal Deposit Insurance

22 Act (12 U.S.C. 1817) is amended by striking sub23 section (l).

24 (4) Section 11(f)(1) of the Federal Deposit In25 surance Act (12 U.S.C. 1821(f)(1)) is amended by
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1 striking ‘‘, except that—’’ and all that follows

2 through the period at the end and inserting a period.

3 (5) Section 11(i)(3) of the Federal Deposit In4 surance Act (12 U.S.C. 1821(i)(3)) is amended by

5 striking subparagraph (B) and by redesignating sub6 paragraph (C) as subparagraph (B).

7 (6) Section 11A(a) of the Federal Deposit In8 surance Act (12 U.S.C. 1821A(a)) is amended—

9 (A) in paragraph (2)(B), by striking ‘‘Sav10 ings Association Insurance Fund’’ and inserting

11 ‘‘deposit insurance fund’’; and

12 (B) in paragraph (3), by striking ‘‘Bank

13 Insurance Fund, the Savings Association Insur14 ance Fund,’’ and inserting ‘‘deposit insurance

15 fund’’.

16 (7) Section 13 of the Federal Deposit Insurance

17 Act (12 U.S.C. 1823) is amended—

18 (A) in subsection (a)(1) by striking ‘‘Bank

19 Insurance Fund, Savings Association Insurance

20 Fund,’’ and inserting ‘‘deposit insurance fund’’;

21 (B) by striking paragraph (11) of sub22 section (c);

23 (C) in subsection (k)(4)(B)(ii), by striking

24 ‘‘Savings Association Insurance Fund member’’

25 and inserting ‘‘savings association’’; and
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1 (D) in subsection (k)(5)(A), by striking

2 ‘‘Savings Association Insurance Fund mem3 bers’’ and inserting ‘‘savings associations’’.

4 (8) Section 14 of the Federal Deposit Insurance

5 Act (12 U.S.C. 1824) is amended—

6 (A) in subsection (a), by striking ‘‘Bank

7 Insurance Fund or the Savings Association In8 surance Fund’’ and inserting ‘‘deposit insur9 ance fund’’;

10 (B) in subsection (a), by striking ‘‘Bank

11 Insurance Fund or Savings Association Insur12 ance Fund’’ and inserting ‘‘deposit insurance

13 fund’’;

14 (C) in subsection (c), by striking para15 graph (3); and

16 (D) in subsection (d)—

17 (i) by striking ‘‘Bank Insurance Fund

18 members’’ each place such term appears

19 and inserting ‘‘insured depository institu20 tions’’;

21 (ii) by striking ‘‘Bank Insurance

22 Fund member’’ each place such term ap23 pears and inserting ‘‘insured depository in24 stitution’’; and
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1 (iii) by striking ‘‘Bank Insurance

2 Fund’’ each place such term appears

3 (other than in connection with a term re4 ferred to in clause (i) or (ii)) and inserting

5 ‘‘deposit insurance fund’’.

6 (9) Section 15(c)(5) of the Federal Deposit In7 surance Act (12 U.S.C. 1825(c)(5)) is amended—

8 (A) by striking ‘‘Bank Insurance Fund or

9 Savings Association Insurance Fund, respec10 tively,’’ each place such term appears and in11 serting ‘‘deposit insurance fund’’; and

12 (B) by striking ‘‘Bank Insurance Fund or

13 the Savings Association Insurance Fund, re14 spectively,’’ each place such term appears and

15 inserting ‘‘deposit insurance fund’’.

16 (10) Section 17 of the Federal Deposit Insur17 ance Act (12 U.S.C. 1827) is amended by striking

18 ‘‘Bank Insurance Fund, Savings Association Insur19 ance Fund,’’ each place such term appears and in20 serting ‘‘deposit insurance fund’’.

21 (11) Section 18(m)(3) of the Federal Deposit

22 Insurance Act (12 U.S.C. 1828(m)(3)) is amend23 ed—

24 (A) in subparagraph (A)—
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1 (i) by inserting ‘‘of an insured savings

2 association or a subsidiary of any such as3 sociation’’ after ‘‘specific activity’’;

4 (ii) by striking ‘‘Savings Association

5 Insurance Fund.’’ and inserting ‘‘deposit

6 insurance fund.’’; and

7 (iii) by striking ‘‘that Savings Asso8 ciation Insurance Fund member’’ and in9 serting ‘‘such savings association’’; and

10 (B) in subparagraph (C), by striking ‘‘Sav11 ings Association Insurance Fund or the Bank

12 Insurance Fund’’ and inserting ‘‘deposit insur13 ance fund’’.

14 (12) Section 31 of the Federal Deposit Insur15 ance Act (12 U.S.C. 1831h) is amended—

16 (A) in subsection (a), by striking ‘‘Insur17 ance Fund’’; and

18 (B) in subsection (b)(2), by striking ‘‘Sav19 ings Association Insurance Fund members’’ and

20 inserting ‘‘savings associations’’.

21 (13) Section 38(o)(1)(B) of the Federal Deposit

22 Insurance Act (12 U.S.C. 1831o(o)(1)(B)) is amend23 ed by striking ‘‘Savings Association Insurance

24 Fund’’ and inserting ‘‘deposit insurance fund’’.
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1 SEC. 3. PAYMENT OF FICO COSTS BY FORMER SAIF MEM2 BERS AND THEIR SUCCESSORS.

3 (a) IN GENERAL.—Section 21(f)(2) of the Federal

4 Home Loan Bank Act (12 U.S.C. 1441(f)(2)) is amend5 ed—

6 (1) in the provision preceding subparagraph

7 (A)—

8 (A) by striking ‘‘each Savings Association

9 Insurance Fund member’’ and inserting ‘‘each

10 designated insured depository institution’’; and

11 (B) by striking ‘‘such members’’ and in12 serting ‘‘such institutions’’; and

13 (2) in subparagraph (A), by striking ‘‘Savings

14 Association Insurance Fund members’’ and inserting

15 ‘‘insured depository institutions’’.

16 (b) DESIGNATED INSURED DEPOSITORY INSTITU17 TION DEFINED.—Section 21(f) of the Federal Home Loan

18 Bank Act (12 U.S.C. 1441(f)) is amended by adding at

19 the end the following new paragraph:

20 ‘‘(4) DESIGNATED INSURED DEPOSITORY INSTI21 TUTION DEFINED.—For purposes of paragraph (2),

22 the term ‘designated insured depository institu23 tion’—

24 ‘‘(A) means any insured depository institu25 tion which, as of January 1, 1995, or at any

26 time after such date, was a Savings Association
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1 Insurance Fund member under the Federal De2 posit Insurance Act (as in effect on the day be3 fore the date of the enactment of the Deposit

4 Insurance Fund Merger Act of 1995), including

5 any Savings Association Insurance Fund mem6 ber referred to in section 5(d)(2)(G) of such

7 Act (as in effect on such day);

8 ‘‘(B) includes, in the case of any insured

9 depository institution which, as of January 1,

10 1995, or at any time after such date, was a

11 Bank Insurance Fund member which had de12 posits which were treated, under section 5(d)(3)

13 of the Federal Deposit Insurance Act (as in ef14 fect on the day before the date of the enact15 ment of the Deposit Insurance Fund Merger

16 Act of 1995), as deposits which were insured by

17 the Savings Association Insurance Fund, the

18 adjusted attributable deposit amount with re19 spect to such member as determined under sec20 tion 5(e)(3)(C) of such Act (as in effect on such

21 day) (and such section, as in effect on such

22 day, shall continue to apply with respect to the

23 determination of the adjusted attributable de24 posit amount of such institution for purposes of

25 this subsection); and
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1 ‘‘(C) includes any other insured depository

2 institution which acquires (as defined in section

3 13(f)(8)(B) of the Federal Deposit Insurance

4 Act) such insured depository institution or is

5 otherwise a successor in interest to such institu6 tion.’’.

7 SEC. 4. 1-TIME SPECIAL SAIF CAPITALIZATION ASSESS8 MENT.

9 Section 7(b) of the Federal Deposit Insurance Act

10 (12 U.S.C. 1817(b)) is amended by inserting after para11 graph (7) the following new paragraph:

12 ‘‘(8) SPECIAL 1-TIME ASSESSMENT TO RECAPI13 TALIZE SAIF.—

14 ‘‘(A) IN GENERAL.—The Corporation may,

15 in the discretion of the Board of Directors, im16 pose a special assessment on—

17 ‘‘(i) each insured depository institu18 tion which, as of January 1, 1995, or at

19 any time after such date, was a Savings

20 Association Insurance Fund member under

21 the Federal Deposit Insurance Act (as in

22 effect on the day before the date of the en23 actment of the Deposit Insurance Fund

24 Merger Act of 1995); and
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1 ‘‘(ii) any other insured depository in2 stitution which acquires (as defined in sec3 tion 13(f)(8)(B) of the Federal Deposit In4 surance Act) such insured depository insti5 tution or is otherwise a successor in inter6 est to such institution,

7 in an amount not greater than 0.40 percent of

8 the assessment base, as of January 1, 1995, on

9 which assessments are imposed under the risk10 based assessment system established pursuant

11 to paragraph (1).

12 ‘‘(B) DEPOSIT OF ASSESSMENT IN SAIF.—

13 The proceeds of any assessment imposed under

14 subparagraph (A) shall be deposited in the Sav15 ings Association Insurance Fund.

16 ‘‘(C) IMPOSITION OVER PERIOD OF

17 YEARS.—The assessment authorized under sub18 paragraph (A) may be imposed incrementally

19 over such period of years as the Board of Di20 rectors may determine to be appropriate, except

21 the larger percentage of any such incremental

22 assessment shall be allocated to the first year of

23 the effective period for such assessment.

24 ‘‘(D) ABATEMENT FOR TROUBLED INSTI25 TUTIONS.—The Board of Directors may abate
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1 any portion of any assessment under this para2 graph in the case of any undercapitalized insti3 tution or any institution which would become

4 undercapitalized as a result of the imposition of

5 such assessment.’’.

Æ