I

104TH CONGRESS

1ST SESSION H. R. 1481

To clarify the regulatory authority of the Federal Deposit Insurance Corporation with respect to deposit insurance fund management, 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 clarify the regulatory authority of the Federal Deposit

Insurance Corporation with respect to deposit insurance

fund management, 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 ‘‘Federal Deposit Insur5 ance Corporation Regulatory Flexibility Act of 1995’’.

6 SEC. 2. ADMINISTRATION OF FICO ASSESSMENTS BY FDIC.

7 Section 21(f)(2) of the Federal Home Loan Bank Act

8 (12 U.S.C. 1441(f)(2)) is amended by striking ‘‘the Fi9 nancing Corporation, with the approval of the Board of
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1 Directors of the Federal Deposit Insurance Corporation’’

2 and inserting ‘‘the Board of Directors of the Federal De3 posit Insurance Corporation, after consultation with the

4 Financing Corporation,’’.

5 SEC. 3. AVAILABILITY OF RTC FUNDS FOR DEPOSIT INSUR6 ANCE PURPOSES.

7 Section 11(a) of the Federal Deposit Insurance Act

8 (12 U.S.C. 1821(a)) is amended—

9 (1) by adding at the end the following new

10 paragraph:

11 ‘‘(9) AVAILABILITY OF RTC FUNDING.—

12 ‘‘(A) IN GENERAL.—The Secretary of the

13 Treasury shall provide, out of funds appro14 priated to the Resolution Trust Corporation

15 under section 21A(i)(3) of the Federal Home

16 Loan Bank Act and not needed by the Resolu17 tion Trust Corporation, to the Corporation, at

18 the request of the Board of Directors, such

19 amounts as the Board of Directors requests for

20 any of the following purposes:

21 ‘‘(i) To cover the interest payments,

22 issuance costs, and custodial fees on obli23 gations issued by the Financing Corpora24 tion.
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1 ‘‘(ii) To make deposits in the Savings

2 Association Insurance Fund of such

3 amounts as may be needed to carry out the

4 purposes of this Act.

5 ‘‘(iii) To satisfy claims against the

6 Federal Government arising from changes

7 in the statutory treatment of supervisory

8 goodwill (on the books of the Corporation

9 as of the date of the enactment of Finan10 cial Institutions Reform, Recovery, and

11 Enforcement Act of 1989) pursuant to sec12 tion 5(t) of the Home Owners’ Loan Act.

13 ‘‘(B) RETURN TO TREASURY.—If the ag14 gregate amount of funds transferred to the Cor15 poration under subparagraph (A) exceeds the

16 amount necessary to carry out the purposes of

17 such subparagraph, such excess amounts shall

18 be deposited in the general fund of the Treas19 ury.’’.

20 SEC. 4. LIMITED FDIC AUTHORITY TO TEMPORARILY

21 TRANSFER FUNDS BETWEEN THE BIF AND

22 SAIF.

23 Section 11(a)(4) of the Federal Deposit Insurance

24 Act (12 U.S.C. 1821(a)) is amended by adding at the end

25 the following new subparagraph:
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1 ‘‘(C) TRANSFER OF FUNDS.—Notwith2 standing subparagraph (A), the Corporation

3 may transfer, for such period of time and under

4 such conditions as the Corporation determines

5 to be appropriate, an amount not to exceed the

6 amount equal to .03 percent of the assessment

7 base of any deposit insurance fund from such

8 fund to another deposit insurance fund to the

9 extent necessary to achieve or maintain the des10 ignated reserve ratio of the fund to which such

11 assets are transferred.’’.

12 SEC. 5. 1-TIME SPECIAL SAIF CAPITALIZATION ASSESS13 MENT.

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

15 (12 U.S.C. 1817(b)) is amended by adding at the end the

16 following new paragraph:

17 ‘‘(8) SPECIAL 1-TIME ASSESSMENT TO RECAPI18 TALIZE SAIF.—

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

20 in the discretion of the Board of Directors, im21 pose a special assessment on each Savings As22 sociation Insurance Fund member in an

23 amount not greater than 0.40 percent of the as24 sessment base, as of January 1, 1995, on which

25 assessments are imposed under the risk-based
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1 assessment system established pursuant to

2 paragraph (1).

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

4 The proceeds of any assessment imposed under

5 subparagraph (A) shall be deposited in the Sav6 ings Association Insurance Fund.

7 ‘‘(C) IMPOSITION OVER PERIOD OF

8 YEARS.—The assessment authorized under sub9 paragraph (A) may be imposed incrementally

10 over such period of years as the Board of Di11 rectors may determine to be appropriate, except

12 the larger percentage of any such incremental

13 assessment shall be allocated to the first year of

14 the effective period for such assessment.

15 ‘‘(D) ABATEMENT FOR TROUBLED INSTI16 TUTIONS.—The Board of Directors may abate

17 any portion of any assessment under this para18 graph in the case of any undercapitalized insti19 tution or any institution which would become

20 undercapitalized as a result of the imposition of

21 such assessment.’’.
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1 SEC. 6. ESTABLISHMENT OF DESIGNATED RESERVE RATIO

2 AS A FLOOR RATHER THAN A TARGET.

3 (a) Section 7(b)(2)(A)(iv) of the Federal Deposit In4 surance Act (12 U.S.C. 1817(b)(2)(A)(iv)) is amended to

5 read as follows:

6 ‘‘(iv) ESTABLISHMENT OF DES7 IGNATED RESERVE RATIO.—The Board of

8 Directors shall establish the designated re9 serve ratio for each insurance fund in ac10 cordance with the following:

11 ‘‘(I) The designated reserve ratio

12 of any insurance fund shall be not less

13 than 1.25 percent of the estimated in14 sured deposits of members of such

15 fund.

16 ‘‘(II) The ratio of any insurance

17 fund shall be established at an

18 amount which the Board of Directors

19 determines will provide for an appro20 priate amount of reserves against

21 losses which may reasonably be ex22 pected to be incurred by the fund

23 without resulting in an excessive

24 buildup in the fund.’’.

25 (b) REDUCTION IN ASSESSMENT RATE IF DES26 IGNATED RESERVE RATIO IS MET.—Section 7(b)(2)(A)
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1 of the Federal Deposit Insurance Act (12 U.S.C.

2 1817(b)(2)(A)) is amended by adding at the end the fol3 lowing new clause:

4 ‘‘(v) CLARIFICATION OF AUTHORITY

5 TO REDUCE ASSESSMENTS AMOUNTS.—The

6 authority of the Board of Directors to set

7 semiannual assessments to maintain the

8 reserve ratio of any insurance fund at the

9 designated reserve ratio includes the au10 thority to reduce such assessments by any

11 appropriate amount if the reserve ratio of

12 such fund is equal to or greater than the

13 minimum designated reserve ratio of such

14 fund.’’.

15 SEC. 7. CLARIFICATION ON USE OF INSURANCE FUND AS16 SESSMENTS.

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

18 (12 U.S.C. 1817(b)) is amended by adding at the end the

19 following new paragraph:

20 ‘‘(8) USE OF INSURANCE ASSESSMENTS.—

21 Amounts received by the Corporation pursuant to

22 assessments on insured depository institution under

23 this subsection shall be used primarily for insurance

24 fund purposes and shall not be unduly diverted to

25 other uses.’’.
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1 SEC. 8. CLARIFICATION THAT CERTAIN INSTITUTIONS IN2 SURED BY THE SAIF ARE SUBJECT TO FICO

3 ASSESSMENTS.

4 Section 21(f)(2) of the Federal Home Loan Bank Act

5 (12 U.S.C. 1441(f)(2)) is amended by inserting after

6 ‘‘Savings Association Insurance Fund member’’ the fol7 lowing: ‘‘, including any Savings Association Insurance

8 Fund member referred to in section 5(d)(2)(G) of the Fed9 eral Deposit Insurance Act and, in the case of any Bank

10 Insurance Fund member which has deposits which are

11 treated (under section 5(d)(3) of such Act) as deposits

12 which are insured by the Savings Association Insurance

13 Fund, the adjusted attributable deposit amount with re14 spect to such member as determined under subparagraph

15 (C) of section 5(e)(3) of such Act for purposes of subpara16 graph (B)(i) of such section,’’.

17 SEC. 9. REPEAL OF MINIMUM SAIF ASSESSMENT RULE.

18 Section 7(b)(2) of the Federal Deposit Insurance Act

19 (12 U.S.C. 1817(b)(2)) is amended by striking subpara20 graph (E).

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