II 

109TH CONGRESS 

1ST SESSION S. 1562 

To provide for the merger of the bank and savings association deposit insurance funds, to modernize and improve the safety and fairness of the 

Federal deposit insurance system, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 29, 2005 

Mr. ENZI (for himself, Mr. JOHNSON, Mr. ALLARD, and Mr. HAGEL) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To provide for the merger of the bank and savings association deposit insurance funds, to modernize and improve 

the safety and fairness of the Federal deposit insurance 

system, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Safe and Fair Deposit Insurance Act of 2005’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 
2 

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Sec. 2. Definitions. 

TITLE I—MERGER OF THE DEPOSIT INSURANCE FUNDS 

Sec. 101. Short title. 

Sec. 102. Merger of BIF and SAIF. 

Sec. 103. Establishment of the Deposit Insurance Fund. 

Sec. 104. Technical and conforming amendments to the Federal Deposit Insurance Act. 

Sec. 105. Other technical and conforming amendments. 

Sec. 106. Effective date. 

TITLE II—DEPOSIT INSURANCE MODERNIZATION AND 

IMPROVEMENT 

Sec. 201. Short title. 

Sec. 202. Increase in Federal insurance coverage. 

Sec. 203. Designated reserve ratio. 

Sec. 204. Assessment credits and dividends. 

Sec. 205. Regulations required. 

Sec. 206. Studies of potential changes to the Federal deposit insurance system. 

Sec. 207. Effective date. 

1 SEC. 2. DEFINITIONS. 

2 In this Act— 

3 (1) the term ‘‘Administration’’ means the Na4 tional Credit Union Administration; 

5 (2) the term ‘‘Board’’ means the Board of Di6 rectors of the Federal Deposit Insurance Corpora7 tion (other than in connection with the National 

8 Credit Union Administration Board); 

9 (3) the term ‘‘Corporation’’ means the Federal 

10 Deposit Insurance Corporation; 

11 (4) the term ‘‘designated reserve ratio’’ means 

12 the reserve ratio designated by the Board under sec13 tion 7(b)(3) of the Federal Deposit Insurance Act, 

14 as amended by this Act; 
3 

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1 (5) the terms ‘‘Fund’’ and ‘‘Deposit Insurance 

2 Fund’’ mean the Deposit Insurance Fund estab3 lished under section 11(a)(4) of the Federal Deposit 

4 Insurance Act, as amended by this Act; 

5 (6) the term ‘‘insured depository institution’’ 

6 has the same meaning as in section 3 of the Federal 

7 Deposit Insurance Act; and 

8 (7) the term ‘‘reserve ratio’’ means the ratio of 

9 the fund balance of the Deposit Insurance Fund to 

10 the aggregate estimated amount of deposits insured 

11 by the Fund. 

12 TITLE I—MERGER OF THE 

13 DEPOSIT INSURANCE FUNDS 

14 SEC. 101. SHORT TITLE. 

15 This title may be cited as the ‘‘Insurance Funds 

16 Merger Act of 2005’’. 

17 SEC. 102. MERGER OF BIF AND SAIF. 

18 (a) IN GENERAL.— 

19 (1) MERGER.—The Bank Insurance Fund and 

20 the Savings Association Insurance Fund shall be 

21 merged into the Deposit Insurance Fund. 

22 (2) DISPOSITION OF ASSETS AND LIABIL23 ITIES.—All assets and liabilities of the Bank Insur24 ance Fund and the Savings Association Insurance 
4 

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1 Fund shall be transferred to the Deposit Insurance 

2 Fund. 

3 (3) NO SEPARATE EXISTENCE.—The separate 

4 existence of the Bank Insurance Fund and the Sav5 ings Association Insurance Fund shall cease on the 

6 effective date of the merger thereof under this sec7 tion. 

8 (b) REPEAL OF OUTDATED MERGER PROVISION.— 

9 Section 2704 of the Deposit Insurance Funds Act of 1996 

10 (12 U.S.C. 1821 note) is repealed. 

11 SEC. 103. ESTABLISHMENT OF THE DEPOSIT INSURANCE 

12 FUND. 

13 (a) IN GENERAL.—Section 11(a)(4) of the Federal 

14 Deposit Insurance Act (12 U.S.C. 1821(a)(4)) is amend15 ed— 

16 (1) by redesignating subparagraph (B) as sub17 paragraph (C); 

18 (2) by striking subparagraph (A) and inserting 

19 the following: 

20 ‘‘(A) ESTABLISHMENT.—There is estab21 lished the Deposit Insurance Fund, which the 

22 Corporation shall— 

23 ‘‘(i) maintain and administer; 
5 

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1 ‘‘(ii) use to carry out its insurance 

2 purposes, in the manner provided by this 

3 subsection; and 

4 ‘‘(iii) invest in accordance with section 

5 13(a). 

6 ‘‘(B) USES.—The Deposit Insurance Fund 

7 shall be available to the Corporation for use 

8 with respect to Deposit Insurance Fund mem9 bers.’’; 

10 (3) by striking ‘‘(4) GENERAL PROVISIONS RE11 LATING TO FUNDS.—’’ and inserting the following: 

12 ‘‘(4) ESTABLISHMENT OF THE DEPOSIT INSUR13 ANCE FUND.—’’; 

14 (4) in subparagraph (C), as redesignated by 

15 paragraph (1) of this subsection, by striking ‘‘Bank 

16 Insurance Fund and the Savings Association Insur17 ance Fund’’ and inserting ‘‘Deposit Insurance 

18 Fund’’; and 

19 (5) by adding at the end the following: 

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

21 against insured depository institutions by the 

22 Corporation shall be deposited in the Deposit 

23 Insurance Fund.’’. 

24 (b) MERGER-RELATED AMENDMENTS TO THE FED25 ERAL DEPOSIT INSURANCE ACT.— 
6 

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1 (1) DEFINITIONS.—Section 3(y) of the Federal 

2 Deposit Insurance Act (12 U.S.C. 1813(y)) is 

3 amended to read as follows: 

4 ‘‘(y) DEFINITIONS RELATING TO THE DEPOSIT IN5 SURANCE FUND.— 

6 ‘‘(1) DEPOSIT INSURANCE FUND.—The terms 

7 ‘Deposit Insurance Fund’ and ‘Fund’ mean the fund 

8 established under section 11(a)(4).’’. 

9 (2) ASSESSMENTS.—Section 7 of the Federal 

10 Deposit Insurance Act (12 U.S.C. 1817) is amend11 ed— 

12 (A) by striking subsection (l); 

13 (B) by redesignating subsections (m) and 

14 (n) as subsections (l) and (m), respectively; and 

15 (C) in subsection (b), by striking para16 graph (2) and inserting the following: 

17 ‘‘(2) ASSESSMENTS.— 

18 ‘‘(A) IN GENERAL.—Each insured deposi19 tory institution shall pay assessments to the 

20 Corporation in such amounts and at such time 

21 or times as the Board of Directors may require. 

22 ‘‘(B) FACTORS TO BE CONSIDERED.—In 

23 setting assessments for insured depository insti24 tutions, the Board of Directors shall consider— 
7 

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1 ‘‘(i) the estimated operating expenses 

2 of the Deposit Insurance Fund; 

3 ‘‘(ii) the estimated case resolution ex4 penditures and income of the Deposit In5 surance Fund; 

6 ‘‘(iii) the projected effects of assess7 ments on the earnings and capital of in8 sured depository institutions; 

9 ‘‘(iv) the need to maintain a risk10 based assessment system under paragraph 

11 (1); and 

12 ‘‘(v) any other factors that the Board 

13 of Directors may determine to be appro14 priate. 

15 ‘‘(C) NOTICE OF ASSESSMENTS.—The Cor16 poration shall notify each insured depository in17 stitution of assessments charged to that institu18 tion. 

19 ‘‘(D) NEWLY INSURED INSTITUTIONS.—To 

20 facilitate the administration of this section, the 

21 Board of Directors may waive the requirements 

22 of paragraphs (1) and (2) for any assessment 

23 period in which a depository institution becomes 

24 insured.’’. 
8 

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1 (3) REPEAL OF SEPARATE FUNDS PROVI2 SIONS.—Section 11(a) of the Federal Deposit Insur3 ance Act (12 U.S.C. 1821(a)) is amended— 

4 (A) by striking paragraphs (5), (6), and 

5 (7); and 

6 (B) by redesignating paragraph (8) as 

7 paragraph (5). 

8 SEC. 104. TECHNICAL AND CONFORMING AMENDMENTS TO 

9 THE FEDERAL DEPOSIT INSURANCE ACT. 

10 The Federal Deposit Insurance Act (12 U.S.C. 1811 

11 et seq.) is amended— 

12 (1) in section 3(a)(1) (12 U.S.C. 1813(a)(1)), 

13 by striking subparagraph (B) and inserting the fol14 lowing: 

15 ‘‘(B) includes any former savings associa16 tion.’’; 

17 (2) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), 

18 by striking ‘‘the Bank Insurance Fund or the Sav19 ings Association Insurance Fund;’’ and inserting 

20 ‘‘the Deposit Insurance Fund,’’; 

21 (3) in section 5(c)(4), by striking ‘‘deposit in22 surance fund’’ and inserting ‘‘Deposit Insurance 

23 Fund’’; 

24 (4) in section 5(d) (12 U.S.C. 1815(d)), by 

25 striking paragraphs (2) and (3); 
9 

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1 (5) in section 5(d)(1) (12 U.S.C. 1815(d)(1))— 

2 (A) in subparagraph (A), by striking ‘‘re3 serve ratios in the Bank Insurance Fund and 

4 the Savings Association Insurance Fund as re5 quired by section 7’’ and inserting ‘‘the reserve 

6 ratio of the Deposit Insurance Fund’’; 

7 (B) by striking subparagraph (B) and in8 serting the following: 

9 ‘‘(2) FEE CREDITED TO THE DEPOSIT INSUR10 ANCE FUND.—The fee paid by the depository insti11 tution under paragraph (1) shall be credited to the 

12 Deposit Insurance Fund.’’; 

13 (C) by striking ‘‘INSTITUTIONS.—’’ and all 

14 that follows through ‘‘GENERAL.—’’ and insert15 ing ‘‘INSTITUTIONS.—’’; and 

16 (D) by redesignating subparagraph (C) as 

17 paragraph (3) and moving the margin 2 ems to 

18 the left; 

19 (6) in section 5(e) (12 U.S.C. 1815(e))— 

20 (A) in paragraph (5)(A), by striking 

21 ‘‘Bank Insurance Fund or the Savings Associa22 tion Insurance Fund’’ and inserting ‘‘Deposit 

23 Insurance Fund’’; 

24 (B) by striking paragraph (6); and 
10 

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1 (C) by redesignating paragraphs (7), (8), 

2 and (9) as paragraphs (6), (7), and (8), respec3 tively; 

4 (7) in section 6(5) (12 U.S.C. 1816(5)), by 

5 striking ‘‘Bank Insurance Fund or the Savings As6 sociation Insurance Fund’’ and inserting ‘‘Deposit 

7 Insurance Fund’’; 

8 (8) in section 7(a)(3) (12 U.S.C. 1817(a)(3))— 

9 (A) by striking ‘‘in July’’; and 

10 (B) by striking ‘‘in January’’; 

11 (9) in section 7(b) (12 U.S.C. 1817(b))— 

12 (A) in paragraph (1)— 

13 (i) in subparagraph (B)(ii), by strik14 ing ‘‘institution’s semiannual assessment’’ 

15 and inserting ‘‘assessments for that insti16 tution under subsection (b)’’; and 

17 (ii) in subparagraph (C)— 

18 (I) by striking ‘‘a depository in19 stitution’s semiannual assessment’’ 

20 and inserting ‘‘assessments for a de21 pository institution under subsection 

22 (b)’’; and 

23 (II) by striking ‘‘deposit insur24 ance fund’’ each place that term ap-
11 

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1 pears and inserting ‘‘Deposit Insur2 ance Fund’’; 

3 (B) in paragraph (1)(D), by striking ‘‘each 

4 deposit insurance fund’’ and inserting ‘‘the De5 posit Insurance Fund’’; 

6 (C) by striking paragraph (4) and redesig7 nating paragraphs (5) through (7) as para8 graphs (4) through (6), respectively; 

9 (D) in paragraph (5), as so redesignated— 

10 (i) by striking ‘‘any such assessment’’ 

11 and inserting ‘‘any such assessment is nec12 essary’’; 

13 (ii) by striking subparagraph (B); 

14 (iii) in subparagraph (A)— 

15 (I) by striking ‘‘(A) is nec16 essary—’’; 

17 (II) by striking ‘‘Bank Insurance 

18 Fund members’’ and inserting ‘‘in19 sured depository institutions’’; and 

20 (III) by redesignating clauses (i), 

21 (ii), and (iii) as subparagraphs (A), 

22 (B), and (C), respectively, and moving 

23 the margins 2 ems to the left; and 

24 (iv) in subparagraph (C) (as redesig25 nated)— 
12 

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1 (I) by inserting ‘‘that’’ before 

2 ‘‘the Corporation’’; and 

3 (II) by striking ‘‘; and’’ and in4 serting a period; and 

5 (E) in paragraph (6), as so redesignated, 

6 by striking ‘‘semiannual assessment’’ and in7 serting ‘‘assessment under subsection (b)’’; 

8 (10) in section 7(c) (12 U.S.C. 1817(c))— 

9 (A) in paragraph (1), by striking ‘‘institu10 tion’s semiannual assessment’’ and inserting 

11 ‘‘assessments for that institution under sub12 section (b)’’; 

13 (B) by striking paragraphs (2) and (3); 

14 and 

15 (C) by redesignating paragraph (4) as 

16 paragraph (2); and 

17 (11) in section 7(j)(7)(F) (12 U.S.C. 

18 1817(j)(7)(F)), by striking ‘‘Bank Insurance Fund 

19 or the Savings Association Insurance Fund’’ and in20 serting ‘‘Deposit Insurance Fund’’; 

21 (12) in section 8 (12 U.S.C. 1818)— 

22 (A) in subsection (p), by striking ‘‘semi23 annual’’; 

24 (B) in subsection (q), by striking ‘‘semi25 annual’’ and inserting ‘‘assessment’’; and 
13 

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1 (C) in subsection (t)(2)(C), by striking 

2 ‘‘deposit insurance fund’’ and inserting ‘‘De3 posit Insurance Fund’’; 

4 (13) in section 11 (12 U.S.C. 1821), by striking 

5 ‘‘deposit insurance fund’’ each place that term ap6 pears and inserting ‘‘Deposit Insurance Fund’’; 

7 (14) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), 

8 by striking ‘‘, except that—’’ and all that follows 

9 through the end of the paragraph and inserting a 

10 period; 

11 (15) in section 11(i)(3) (12 U.S.C. 

12 1821(i)(3))— 

13 (A) by striking subparagraph (B); 

14 (B) by redesignating subparagraph (C) as 

15 subparagraph (B); and 

16 (C) in subparagraph (B) (as redesignated), 

17 by striking ‘‘subparagraphs (A) and (B)’’ and 

18 inserting ‘‘subparagraph (A)’’; 

19 (16) in section 11(p)(2)(B) (12 U.S.C. 

20 1821(p)(2)(B)), by striking ‘‘institution, any’’ and 

21 inserting ‘‘institution, the’’; 

22 (17) in section 12(f)(4)(E)(iv) (12 U.S.C. 

23 1822(f)(4)(E)(iv)), by striking ‘‘Federal deposit in24 surance funds’’ and inserting ‘‘the Deposit Insur-
14 

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1 ance Fund, or any predecessor deposit insurance 

2 fund’’; 

3 (18) in section 13 (12 U.S.C. 1823)— 

4 (A) by striking ‘‘deposit insurance fund’’ 

5 each place that term appears and inserting 

6 ‘‘Deposit Insurance Fund’’; 

7 (B) in subsection (a)(1), by striking ‘‘Bank 

8 Insurance Fund, the Savings Association Insur9 ance Fund,’’ and inserting ‘‘Deposit Insurance 

10 Fund’’; 

11 (C) in subsection (c)(4)(E)— 

12 (i) in the subparagraph heading, by 

13 striking ‘‘FUNDS’’ and inserting ‘‘FUND’’; 

14 and 

15 (ii) in clause (i), by striking ‘‘any in16 surance fund’’ and inserting ‘‘the Deposit 

17 Insurance Fund’’; 

18 (D) in subsection (c)(4)(G)(ii)— 

19 (i) by striking ‘‘appropriate insurance 

20 fund’’ and inserting ‘‘Deposit Insurance 

21 Fund’’; 

22 (ii) by striking ‘‘the members of the 

23 insurance fund (of which such institution 

24 is a member)’’ and inserting ‘‘insured de25 pository institutions’’; 
15 

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1 (iii) by striking ‘‘each member’s’’ and 

2 inserting ‘‘each insured depository institu3 tion’s’’; 

4 (iv) by striking ‘‘the member’s’’ each 

5 place that term appears and inserting ‘‘the 

6 institution’s’’; and 

7 (v) in subclause (II), by striking 

8 ‘‘semiannual’’ and inserting ‘‘applicable as9 sessment’’; 

10 (E) in subsection (c), by striking para11 graph (11); 

12 (F) in subsection (h), by striking ‘‘Bank 

13 Insurance Fund’’ and inserting ‘‘Deposit Insur14 ance Fund’’; 

15 (G) in subsection (k)(4)(B)(i), by striking 

16 ‘‘Savings Association Insurance Fund member’’ 

17 and inserting ‘‘savings association’’; 

18 (H) in subsection (k)(5)— 

19 (i) in subparagraph (A), by striking 

20 ‘‘Savings Association Insurance Fund 

21 members’’ and inserting ‘‘savings associa22 tions’’; 

23 (ii) by striking ‘‘member’s’’ each place 

24 that term appears and inserting ‘‘savings 

25 association’s’’; and 
16 

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1 (iii) by striking ‘‘member’’ each place 

2 that term appears and inserting ‘‘savings 

3 association’’; 

4 (19) in section 14(a) (12 U.S.C. 1824(a)), in 

5 the 5th sentence— 

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

7 the Savings Association Insurance Fund’’ and 

8 inserting ‘‘Deposit Insurance Fund’’; and 

9 (B) by striking ‘‘each such fund’’ and in10 serting ‘‘the Deposit Insurance Fund’’; 

11 (20) in section 14(b) (12 U.S.C. 1824(b)), by 

12 striking ‘‘Bank Insurance Fund or Savings Associa13 tion Insurance Fund’’ and inserting ‘‘Deposit Insur14 ance Fund’’; 

15 (21) in section 14(c) (12 U.S.C. 1824(c))— 

16 (A) in paragraph (2)(A), by striking ‘‘(7)’’ 

17 and inserting ‘‘(6)’’; and 

18 (B) by striking paragraph (3); 

19 (22) in section 14(d) (12 U.S.C. 1824(d))— 

20 (A) by striking ‘‘Bank Insurance Fund 

21 member’’ each place that term appears and in22 serting ‘‘insured depository institution’’; 

23 (B) by striking ‘‘Bank Insurance Fund 

24 members’’ each place that term appears and in25 serting ‘‘insured depository institutions’’; 
17 

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1 (C) by striking ‘‘Bank Insurance Fund’’ 

2 each place that term appears (other than in 

3 connection with a reference to a Bank Insur4 ance Fund member or members) and inserting 

5 ‘‘Deposit Insurance Fund’’; 

6 (D) by striking the subsection heading and 

7 inserting the following: 

8 ‘‘(d) BORROWING FOR THE DEPOSIT INSURANCE

9 FUND FROM INSURED DEPOSITORY INSTITUTIONS.—’’; 

10 (E) in paragraph (3), in the paragraph 

11 heading, by striking ‘‘BIF’’ and inserting ‘‘THE

12 DEPOSIT INSURANCE FUND’’; and 

13 (F) in paragraph (5), in the paragraph 

14 heading, by striking ‘‘BIF MEMBERS’’ and in15 serting ‘‘INSURED DEPOSITORY INSTITUTIONS’’; 

16 (23) in section 14 (12 U.S.C. 1824) by adding 

17 at the end the following: 

18 ‘‘(e) BORROWING FOR THE DEPOSIT INSURANCE

19 FUND FROM FEDERAL HOME LOAN BANKS.— 

20 ‘‘(1) IN GENERAL.—The Corporation may bor21 row from the Federal home loan banks, with the 

22 concurrence of the Federal Housing Finance Board, 

23 such funds as the Corporation considers necessary 

24 for the use of the Deposit Insurance Fund. 
18 

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1 ‘‘(2) TERMS AND CONDITIONS.—Any loan from 

2 any Federal home loan bank under paragraph (1) to 

3 the Deposit Insurance Fund shall— 

4 ‘‘(A) bear a rate of interest of not less 

5 than the current marginal cost of funds to that 

6 bank, taking into account the maturities in7 volved; 

8 ‘‘(B) be adequately secured, as determined 

9 by the Federal Housing Finance Board; and 

10 ‘‘(C) be a direct liability of the Deposit In11 surance Fund.’’; 

12 (24) in section 15(c)(5) (12 U.S.C. 

13 1825(c)(5))— 

14 (A) by striking ‘‘the Bank Insurance Fund 

15 or Savings Association Insurance Fund, respec16 tively’’ each place that term appears and insert17 ing ‘‘the Deposit Insurance Fund’’; and 

18 (B) in subparagraph (B), by striking ‘‘the 

19 Bank Insurance Fund or the Savings Associa20 tion Insurance Fund, respectively’’ and insert21 ing ‘‘the Deposit Insurance Fund’’; 

22 (25) in section 17(a) (12 U.S.C. 1827(a))— 

23 (A) in the subsection heading, by striking 

24 ‘‘BIF, SAIF,’’ and inserting ‘‘THE DEPOSIT IN25 SURANCE FUND’’; and 
19 

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1 (B) in paragraph (1)— 

2 (i) by striking ‘‘the Bank Insurance 

3 Fund, the Savings Association Insurance 

4 Fund,’’ each place that term appears and 

5 inserting ‘‘the Deposit Insurance Fund’’; 

6 and 

7 (ii) in subparagraph (D), by striking 

8 ‘‘each insurance fund’’ and inserting ‘‘the 

9 Fund’’; 

10 (26) in section 17(d) (12 U.S.C. 1827(d)), by 

11 striking ‘‘, the Bank Insurance Fund, the Savings 

12 Association Insurance Fund,’’ each place that term 

13 appears and inserting ‘‘the Deposit Insurance 

14 Fund’’; 

15 (27) in section 18(m) (12 U.S.C. 1828(m))— 

16 (A) in paragraph (2), in the matter pre17 ceding subparagraph (A), by striking the colon 

18 and inserting a dash; 

19 (B) in paragraph (3)(A)— 

20 (i) by striking ‘‘poses a serious threat 

21 to the Savings Association Insurance 

22 Fund’’ and inserting ‘‘of an insured sav23 ings association poses a serious threat to 

24 the Deposit Insurance Fund’’; and 
20 

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1 (ii) by striking ‘‘Savings Association 

2 Insurance Fund member’’ and inserting 

3 ‘‘insured savings association’’; and 

4 (C) in paragraph (3)(C), by striking ‘‘Sav5 ings Association Insurance Fund or the Bank 

6 Insurance Fund’’ and inserting ‘‘Deposit Insur7 ance Fund’’; 

8 (28) in section 18(o) (12 U.S.C. 1828(o)), by 

9 striking ‘‘deposit insurance funds’’ and ‘‘deposit in10 surance fund’’ each place those terms appear and in11 serting ‘‘Deposit Insurance Fund’’; 

12 (29) in section 18(p) (12 U.S.C. 1828(p)), by 

13 striking ‘‘deposit insurance funds’’ and inserting 

14 ‘‘Deposit Insurance Fund’’; 

15 (30) in section 24 (12 U.S.C. 1831a)— 

16 (A) in subsections (a)(1) and (d)(1)(A), by 

17 striking ‘‘appropriate deposit insurance fund’’ 

18 each place that term appears and inserting 

19 ‘‘Deposit Insurance Fund’’; 

20 (B) in subsection (e)(2)(A), by striking 

21 ‘‘risk to’’ and all that follows through the pe22 riod and inserting ‘‘risk to the Deposit Insur23 ance Fund.’’; and 

24 (C) in subsections (e)(2)(B)(ii) and 

25 (f)(6)(B), by striking ‘‘the insurance fund of 
21 

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1 which such bank is a member’’ each place that 

2 term appears and inserting ‘‘the Deposit Insur3 ance Fund’’; 

4 (31) in section 28 (12 U.S.C. 1831e), by strik5 ing ‘‘affected deposit insurance fund’’ each place 

6 that term appears and inserting ‘‘Deposit Insurance 

7 Fund’’; 

8 (32) by striking section 31 (12 U.S.C. 1831h); 

9 (33) in section 36(i)(3) (12 U.S.C. 

10 1831m(i)(3)), by striking ‘‘affected deposit insur11 ance fund’’ and inserting ‘‘Deposit Insurance 

12 Fund’’; 

13 (34) in section 37(a)(1)(C) (12 U.S.C. 

14 1831n(a)(1)(C)), by striking ‘‘insurance funds’’ and 

15 inserting ‘‘Deposit Insurance Fund’’; 

16 (35) in section 38 (12 U.S.C. 1831o), by strik17 ing ‘‘the deposit insurance fund’’ each place that 

18 term appears and inserting ‘‘the Deposit Insurance 

19 Fund’’; 

20 (36) in section 38(a) (12 U.S.C. 1831o(a)), in 

21 the subsection heading, by striking ‘‘FUNDS’’ and in22 serting ‘‘FUND’’; 

23 (37) in section 38(k) (12 U.S.C. 1831o(k))— 
22 

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1 (A) in paragraph (1), by striking ‘‘a de2 posit insurance fund’’ and inserting ‘‘the De3 posit Insurance Fund’’; 

4 (B) in paragraph (2), by striking ‘‘A de5 posit insurance fund’’ and inserting ‘‘The De6 posit Insurance Fund’’; and 

7 (C) in paragraphs (2)(A) and (3)(B), by 

8 striking ‘‘the deposit insurance fund’s outlays’’ 

9 each place that term appears and inserting ‘‘the 

10 outlays of the Deposit Insurance Fund’’; and 

11 (38) in section 38(o) (12 U.S.C. 1831o(o))— 

12 (A) by striking ‘‘ASSOCIATIONS.—’’ and all 

13 that follows through ‘‘Subsections (e)(2)’’ in 

14 paragraph (2) and inserting ‘‘ASSOCIATIONS.— 

15 Subsections (e)(2)’’; 

16 (B) by redesignating subparagraphs (A), 

17 (B), and (C) as paragraphs (1), (2), and (3), 

18 respectively, and moving the margins 2 ems to 

19 the left; and 

20 (C) in paragraph (1) (as so redesignated), 

21 by redesignating clauses (i) and (ii) as subpara22 graphs (A) and (B), respectively, and moving 

23 the margins 2 ems to the left. 
23 

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1 SEC. 105. OTHER TECHNICAL AND CONFORMING AMEND2 MENTS. 

3 (a) SECTION 5136 OF THE REVISED STATUTES.— 

4 The paragraph designated the ‘‘Eleventh’’ of section 5136 

5 of the Revised Statutes of the United States (12 U.S.C. 

6 24) is amended in the 5th sentence, by striking ‘‘affected 

7 deposit insurance fund’’ and inserting ‘‘Deposit Insurance 

8 Fund’’. 

9 (b) INVESTMENTS PROMOTING PUBLIC WELFARE; 

10 LIMITATIONS ON AGGREGATE INVESTMENTS.—The 23d 

11 undesignated paragraph of section 9 of the Federal Re12 serve Act (12 U.S.C. 338a) is amended in the 4th sen13 tence, by striking ‘‘affected deposit insurance fund’’ and 

14 inserting ‘‘Deposit Insurance Fund’’. 

15 (c) ADVANCES TO CRITICALLY UNDERCAPITALIZED

16 DEPOSITORY INSTITUTIONS.—Section 10B(b)(3)(A)(ii) of 

17 the Federal Reserve Act (12 U.S.C. 347b(b)(3)(A)(ii)) is 

18 amended by striking ‘‘any deposit insurance fund in’’ and 

19 inserting ‘‘the Deposit Insurance Fund of’’. 

20 (d) AMENDMENTS TO THE BALANCED BUDGET AND

21 EMERGENCY DEFICIT CONTROL ACT OF 1985.—Section 

22 255(g)(1)(A) of the Balanced Budget and Emergency 

23 Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is 

24 amended— 

25 (1) by striking ‘‘Bank Insurance Fund’’ and in26 serting ‘‘Deposit Insurance Fund’’; and 
24 

•S 1562 IS

1 (2) by striking ‘‘Federal Deposit Insurance Cor2 poration, Savings Association Insurance Fund;’’. 

3 (e) AMENDMENTS TO THE FEDERAL HOME LOAN

4 BANK ACT.—The Federal Home Loan Bank Act (12 

5 U.S.C. 1421 et seq.) is amended— 

6 (1) in section 11(k) (12 U.S.C. 1431(k))— 

7 (A) in the subsection heading, by striking 

8 ‘‘SAIF’’ and inserting ‘‘THE DEPOSIT INSUR9 ANCE FUND’’; and 

10 (B) by striking ‘‘Savings Association In11 surance Fund’’ each place that term appears 

12 and inserting ‘‘Deposit Insurance Fund’’; 

13 (2) in section 21 (12 U.S.C. 1441)— 

14 (A) in subsection (f)(2), by striking ‘‘, ex15 cept that’’ and all that follows through the end 

16 of the paragraph and inserting a period; and 

17 (B) in subsection (k), by striking para18 graph (4); 

19 (3) in section 21A(b)(4)(B) (12 U.S.C. 

20 1441a(b)(4)(B)), by striking ‘‘affected deposit insur21 ance fund’’ and inserting ‘‘Deposit Insurance 

22 Fund’’; and 

23 (4) in section 21B(k) (12 U.S.C. 1441b(k)) by 

24 inserting before the colon ‘‘, the following definitions 

25 shall apply’’. 
25 

•S 1562 IS

1 (f) AMENDMENTS TO THE HOME OWNERS’ LOAN

2 ACT.—The Home Owners’ Loan Act (12 U.S.C. 1461 et 

3 seq.) is amended— 

4 (1) in section 5 (12 U.S.C. 1464)— 

5 (A) in subsection (c)(6), by striking ‘‘As 

6 used in this subsection—’’ and inserting ‘‘For 

7 purposes of this subsection, the following defini8 tions shall apply:’’; 

9 (B) in subsection (o)(1), by striking ‘‘that 

10 is a Bank Insurance Fund member’’; 

11 (C) in subsection (o)(2)(A), by striking ‘‘a 

12 Bank Insurance Fund member until such time 

13 as it changes its status to a Savings Association 

14 Insurance Fund member’’ and inserting ‘‘in15 sured by the Deposit Insurance Fund’’; 

16 (D) in subsection (t)(5)(D)(iii)(II), by 

17 striking ‘‘affected deposit insurance fund’’ and 

18 inserting ‘‘Deposit Insurance Fund’’; 

19 (E) in subsection (t)(7)(C)(i)(I), by strik20 ing ‘‘affected deposit insurance fund’’ and in21 serting ‘‘Deposit Insurance Fund’’; and 

22 (F) in subsection (v)(2)(A)(i), by striking 

23 ‘‘the Savings Association Insurance Fund’’ and 

24 inserting ‘‘or the Deposit Insurance Fund’’; and 

25 (2) in section 10 (12 U.S.C. 1467a)— 
26 

•S 1562 IS

1 (A) in subsection (c)(6)(D), by striking 

2 ‘‘this title’’ and inserting ‘‘this Act’’; 

3 (B) in subsection (e)(1)(B), by striking 

4 ‘‘Savings Association Insurance Fund or Bank 

5 Insurance Fund’’ and inserting ‘‘Deposit Insur6 ance Fund’’; 

7 (C) in subsection (e)(2), by striking ‘‘Sav8 ings Association Insurance Fund or the Bank 

9 Insurance Fund’’ and inserting ‘‘Deposit Insur10 ance Fund’’; 

11 (D) in subsection (e)(4)(B), by striking 

12 ‘‘subsection (1)’’ and inserting ‘‘subsection (l)’’; 

13 (E) in subsection (g)(3)(A), by striking 

14 ‘‘(5) of this section’’ and inserting ‘‘(5) of this 

15 subsection’’; 

16 (F) in subsection (i), by redesignating 

17 paragraph (5) as paragraph (4); 

18 (G) in subsection (m)(3), by striking sub19 paragraph (E), and by redesignating subpara20 graphs (F), (G), and (H) as subparagraphs 

21 (E), (F), and (G), respectively; 

22 (H) in subsection (m)(7)(A), by striking 

23 ‘‘during period’’ and inserting ‘‘during the pe24 riod’’; and 
27 

•S 1562 IS

1 (I) in subsection (o)(3)(D), by striking 

2 ‘‘sections 5(s) and (t) of this Act’’ and inserting 

3 ‘‘subsections (s) and (t) of section 5’’. 

4 (g) AMENDMENTS TO THE NATIONAL HOUSING

5 ACT.—The National Housing Act (12 U.S.C. 1701 et 

6 seq.) is amended— 

7 (1) in section 317(b)(1)(B) (12 U.S.C. 

8 1723i(b)(1)(B)), by striking ‘‘Bank Insurance Fund 

9 for banks or through the Savings Association Insur10 ance Fund for savings associations’’ and inserting 

11 ‘‘Deposit Insurance Fund’’; and 

12 (2) in section 536(b)(1)(B)(ii) (12 U.S.C. 

13 1735f–14(b)(1)(B)(ii)), by striking ‘‘Bank Insurance 

14 Fund for banks and through the Savings Association 

15 Insurance Fund for savings associations’’ and insert16 ing ‘‘Deposit Insurance Fund’’. 

17 (h) AMENDMENTS TO THE FINANCIAL INSTITUTIONS

18 REFORM, RECOVERY, AND ENFORCEMENT ACT OF

19 1989.—The Financial Institutions Reform, Recovery, and 

20 Enforcement Act of 1989 (12 U.S.C. 1811 note) is 

21 amended— 

22 (1) in section 951(b)(3)(B) (12 U.S.C. 

23 1833a(b)(3)(B)), by striking ‘‘Bank Insurance 

24 Fund, the Savings Association Insurance Fund,’’ 
28 

•S 1562 IS

1 and inserting ‘‘Deposit Insurance Fund (or any 

2 predecessor deposit insurance fund)’’; and 

3 (2) in section 1112(c)(1)(B) (12 U.S.C. 

4 3341(c)(1)(B)), by striking ‘‘Bank Insurance Fund, 

5 the Savings Association Insurance Fund,’’ and in6 serting ‘‘Deposit Insurance Fund’’. 

7 (i) AMENDMENT TO THE BANK HOLDING COMPANY

8 ACT OF 1956.—The Bank Holding Company Act of 1956 

9 (12 U.S.C. 1841 et seq.) is amended— 

10 (1) in section 2(j)(2) (12 U.S.C. 1841(j)(2)), by 

11 striking ‘‘Savings Association Insurance Fund’’ and 

12 inserting ‘‘Deposit Insurance Fund’’; and 

13 (2) in section 3(d)(1)(D)(iii) (12 U.S.C. 

14 1842(d)(1)(D)(iii)), by striking ‘‘appropriate deposit 

15 insurance fund’’ and inserting ‘‘Deposit Insurance 

16 Fund’’. 

17 (j) AMENDMENTS TO THE GRAMM-LEACH-BLILEY

18 ACT.—Section 114 of the Gramm-Leach-Bliley Act (12 

19 U.S.C. 1828a) is amended by striking ‘‘any Federal de20 posit insurance fund’’, in subsection (a)(1)(B), paragraphs 

21 (2)(B) and (4)(B) of subsection (b), and subsection 

22 (c)(1)(B), each place that term appears and inserting ‘‘the 

23 Deposit Insurance Fund’’. 
29 

•S 1562 IS

1 SEC. 106. EFFECTIVE DATE. 

2 This title and the amendments made by this title 

3 shall become effective on the first day of the first calendar 

4 quarter that begins more than 90 days after the date of 

5 enactment of this Act. 

6 TITLE II—DEPOSIT INSURANCE 

7 MODERNIZATION AND IM8 PROVEMENT 

9 SEC. 201. SHORT TITLE. 

10 This title may be cited as the ‘‘Deposit Insurance Re11 form Act of 2005’’. 

12 SEC. 202. INCREASE IN FEDERAL INSURANCE COVERAGE. 

13 (a) INSURED DEPOSITORY INSTITUTIONS.— 

14 (1) IN GENERAL.—Section 11(a)(1) of the Fed15 eral Deposit Insurance Act (12 U.S.C. 1821(a)(1)) 

16 is amended— 

17 (A) by striking subparagraph (B) and in18 serting the following: 

19 ‘‘(B) NET AMOUNT OF INSURED DEPOS20 ITS.—The net amount of deposit insurance pay21 able to any depositor at an insured depository 

22 institution shall not exceed the standard max23 imum deposit insurance amount, as determined 

24 in accordance with paragraph (3) and subpara25 graphs (C), (D), (E), and (F) of this para26 graph.’’; and 
30 

•S 1562 IS

1 (B) by striking subparagraph (D) and in2 serting the following: 

3 ‘‘(D) COVERAGE FOR CERTAIN EMPLOYEE

4 BENEFIT PLAN DEPOSITS.— 

5 ‘‘(i) PASS-THROUGH INSURANCE.— 

6 The Corporation shall provide pass7 through deposit insurance for the deposits 

8 of any employee benefit plan. 

9 ‘‘(ii) PROHIBITION ON ACCEPTANCE

10 OF BENEFIT PLAN DEPOSITS.—An insured 

11 depository institution that is not well cap12 italized or adequately capitalized may not 

13 accept employee benefit plan deposits. 

14 ‘‘(iii) DEFINITIONS.—For purposes of 

15 this subparagraph, the following definitions 

16 shall apply: 

17 ‘‘(I) CAPITAL STANDARDS.—The 

18 terms ‘well capitalized’ and ‘ade19 quately capitalized’ have the same 

20 meanings as in section 38. 

21 ‘‘(II) EMPLOYEE BENEFIT

22 PLAN.—The term ‘employee benefit 

23 plan’ has the same meaning as in 

24 paragraph (5)(B)(ii), and includes any 

25 eligible deferred compensation plan 
31 

•S 1562 IS

1 described in section 457 of the Inter2 nal Revenue Code of 1986. 

3 ‘‘(III) PASS-THROUGH DEPOSIT

4 INSURANCE.—The term ‘pass-through 

5 deposit insurance’ means, with respect 

6 to an employee benefit plan, deposit 

7 insurance coverage provided on a pro 

8 rata basis to the participants in the 

9 plan, in accordance with the interests 

10 of each participant. 

11 ‘‘(E) STANDARD MAXIMUM DEPOSIT IN12 SURANCE AMOUNT DEFINED.—For purposes of 

13 this paragraph, the term ‘standard maximum 

14 deposit insurance amount’ means, until the end 

15 of the 5-year period beginning on the date of 

16 enactment of the Deposit Insurance Reform Act 

17 of 2005, $100,000. 

18 ‘‘(F) INFLATION ADJUSTMENT.— 

19 ‘‘(i) IN GENERAL.—As of January 1, 

20 2010, and as of the 1st day of each 5-year 

21 period thereafter, the standard maximum 

22 deposit insurance amount payable to any 

23 depositor at an insured depository institu24 tion shall be increased by the product of— 

25 ‘‘(I) $100,000; and 
32 

•S 1562 IS

1 ‘‘(II) the ratio of the value of the 

2 Personal Consumption Expenditures 

3 Chain-Type Index (or any successor 

4 index thereto), published by the De5 partment of Commerce, for December 

6 31 of the year preceding the year in 

7 which the adjustment is calculated 

8 under this clause, to the value of such 

9 index for December 31 of the year 

10 preceding the effective date of the In11 surance Funds Merger Act of 2005. 

12 ‘‘(ii) LIMITATION ON ADJUST13 MENTS.—If the application of clause (i) 

14 would result in any decrease in the stand15 ard maximum deposit insurance amount in 

16 effect on the date of the adjustment under 

17 clause (i), the standard maximum deposit 

18 insurance amount shall remain unchanged 

19 until the next scheduled 5-year adjustment 

20 that does not result in any such decrease. 

21 ‘‘(iii) ROUNDING.—If the amount de22 termined under clause (ii) for any period is 

23 not a multiple of $10,000, the amount so 

24 determined shall be rounded to the nearest 

25 $10,000. 
33 

•S 1562 IS

1 ‘‘(iv) PUBLICATION.—Not later than 

2 January 1, 2010, and not later than April 

3 1 of the 1st year of each subsequent 5-year 

4 period referred to in clause (i), the Board 

5 of Directors shall publish in the Federal 

6 Register the standard maximum deposit in7 surance amount and the amount of deposit 

8 insurance coverage under paragraph (3)(A) 

9 that may be due to any depositor at an in10 sured depository institution during the ap11 plicable 5-year period.’’. 

12 (2) DEPOSIT INSURANCE FOR RETIREMENT AC13 COUNTS.—Section 11(a)(3)(A) of the Federal De14 posit Insurance Act (12 U.S.C. 1821(a)(3)(A)) is 

15 amended— 

16 (A) by striking ‘‘$100,000’’ and inserting 

17 ‘‘$250,000’’; and 

18 (B) by inserting before the period at the 

19 end the following: ‘‘which amount shall be sub20 ject to inflation adjustments in the same man21 ner as under paragraph (1)(F) with respect to 

22 the standard maximum deposit insurance 

23 amount, except that ‘$250,000’ shall be sub24 stituted for the amount specified in clause (i) of 
34 

•S 1562 IS

1 paragraph (1)(F) for purposes of this subpara2 graph’’. 

3 (3) DEPOSIT INSURANCE FOR MUNICIPAL DE4 POSITS.—Section 11(a)(2)(A) of the Federal Deposit 

5 Insurance Act (12 U.S.C. 1821(a)(2)(A)) is amend6 ed in the matter following clause (v)— 

7 (A) by striking ‘‘$100,000’’ the first place 

8 that term appears and inserting ‘‘the standard 

9 maximum deposit insurance amount’’; 

10 (B) by striking ‘‘in an amount not to ex11 ceed $100,000 per account’’ the second place 

12 that term appears; and 

13 (C) by inserting before the period at the 

14 end the following: ‘‘, which amount shall be 

15 subject to inflation adjustments in the same 

16 manner as under paragraph (1)(F)’’. 

17 (4) TECHNICAL AND CONFORMING AMENDMENT

18 RELATING TO INSURANCE OF TRUST FUNDS.—Sec19 tion 7(i) of the Federal Deposit Insurance Act (12 

20 U.S.C. 1817(i)) is amended in each of paragraphs 

21 (1) and (3), by striking ‘‘$100,000’’ each place it 

22 appears and inserting ‘‘the standard maximum de23 posit insurance amount (as determined under section 

24 11(a)(1))’’. 
35 

•S 1562 IS

1 (5) OTHER TECHNICAL AND CONFORMING

2 AMENDMENTS.—The Federal Deposit Insurance Act 

3 (12 U.S.C. 1811 et seq.) is amended— 

4 (A) in section 11(m)(6) (12 U.S.C. 

5 1821(m)(6)), by striking ‘‘$100,000’’ and in6 serting ‘‘an amount equal to the standard max7 imum deposit insurance amount (as determined 

8 under subsection (a)(1))’’; 

9 (B) in section 18 (12 U.S.C. 1828), by 

10 striking subsection (a) and inserting the fol11 lowing: 

12 ‘‘(a) INSURANCE LOGO.— 

13 ‘‘(1) INSURED DEPOSITORY INSTITUTIONS.— 

14 Each insured depository institution shall display at 

15 each place of business maintained by that institution 

16 a sign or signs relating to the insurance of the de17 posits of the institution, in accordance with regula18 tions to be prescribed by the Corporation. 

19 ‘‘(2) REGULATIONS.—The Corporation shall 

20 prescribe regulations to carry out this subsection, in21 cluding regulations governing the substance of signs 

22 required by paragraph (1) and the manner of dis23 play or use of such signs. 

24 ‘‘(3) PENALTIES.—For each day that an in25 sured depository institution continues to violate this 
36 

•S 1562 IS

1 subsection or any regulation issued under this sub2 section, it shall be subject to a penalty of not more 

3 than $100, which the Corporation may recover for 

4 its use.’’; and 

5 (C) in section 43(d) (12 U.S.C. 1831t(d)), 

6 by striking ‘‘$100,000’’ and inserting ‘‘an 

7 amount equal to the standard maximum deposit 

8 insurance amount (as determined under section 

9 11(a)(1))’’. 

10 (b) INSURED CREDIT UNIONS.— 

11 (1) IN GENERAL.—Section 207(k) of the Fed12 eral Credit Union Act (12 U.S.C. 1787(k)) is 

13 amended— 

14 (A) by striking ‘‘(k)(1)’’ and all that fol15 lows through the end of paragraph (1) and in16 serting the following: 

17 ‘‘(k) INSURED AMOUNTS PAYABLE.— 

18 ‘‘(1) NET INSURED AMOUNT.— 

19 ‘‘(A) IN GENERAL.—Subject to the provi20 sions of paragraph (2), the net amount of share 

21 insurance payable to any member at an insured 

22 credit union shall not exceed the total amount 

23 of the shares or deposits in the name of the 

24 member (after deducting offsets), less any part 

25 thereof which is in excess of the standard max-
37 

•S 1562 IS

1 imum share insurance amount, as determined 

2 in accordance with this paragraph and para3 graphs (5) and (6), and consistent with actions 

4 taken by the Federal Deposit Insurance Cor5 poration under section 11(a) of the Federal De6 posit Insurance Act. 

7 ‘‘(B) AGGREGATION.—Determination of 

8 the net amount of share insurance under sub9 paragraph (A), shall be in accordance with such 

10 regulations as the Board may prescribe, and, in 

11 determining the amount payable to any mem12 ber, there shall be added together all accounts 

13 in the credit union maintained by that member 

14 for that member’s own benefit, either in the 

15 member’s own name or in the names of others. 

16 ‘‘(C) AUTHORITY TO DEFINE THE EXTENT

17 OF COVERAGE.—The Board may define, with 

18 such classifications and exceptions as it may 

19 prescribe, the extent of the share insurance cov20 erage provided for member accounts, including 

21 member accounts in the name of a minor, in 

22 trust, or in joint tenancy.’’; and 

23 (B) by adding at the end the following: 

24 ‘‘(4) COVERAGE FOR CERTAIN EMPLOYEE BEN25 EFIT PLAN DEPOSITS.— 
38 

•S 1562 IS

1 ‘‘(A) PASS-THROUGH INSURANCE.—The 

2 Administration shall provide pass-through share 

3 insurance for the deposits or shares of any em4 ployee benefit plan, subject to subparagraph 

5 (B). 

6 ‘‘(B) PROHIBITION ON ACCEPTANCE OF

7 DEPOSITS.—An insured credit union that is not 

8 well capitalized or adequately capitalized may 

9 not accept employee benefit plan deposits. 

10 ‘‘(C) DEFINITIONS.—For purposes of this 

11 paragraph, the following definitions shall apply: 

12 ‘‘(i) CAPITAL STANDARDS.—The 

13 terms ‘well capitalized’ and ‘adequately 

14 capitalized’ have the same meanings as in 

15 section 216(c), as added by section 301 of 

16 the Credit Union Membership Access Act 

17 (Public Law 105–219, 112 Stat. 931). 

18 ‘‘(ii) EMPLOYEE BENEFIT PLAN.— 

19 The term ‘employee benefit plan’— 

20 ‘‘(I) has the meaning given to 

21 such term in section 3(3) of the Em22 ployee Retirement Income Security 

23 Act of 1974; 
39 

•S 1562 IS

1 ‘‘(II) includes any plan described 

2 in section 401(d) of the Internal Rev3 enue Code of 1986; and 

4 ‘‘(III) includes any eligible de5 ferred compensation plan described in 

6 section 457 of the Internal Revenue 

7 Code of 1986. 

8 ‘‘(iii) PASS-THROUGH SHARE INSUR9 ANCE.—The term ‘pass-through share in10 surance’ means, with respect to an em11 ployee benefit plan, insurance coverage 

12 provided on a pro rata basis to the partici13 pants in the plan, in accordance with the 

14 interest of each participant. 

15 ‘‘(5) STANDARD MAXIMUM SHARE INSURANCE

16 AMOUNT DEFINED.—For purposes of this sub17 section, the term ‘standard maximum share insur18 ance amount’ means, until the end of the 270-day 

19 period beginning on the date of enactment of the 

20 Deposit Insurance Reform Act of 2005, $100,000. 

21 ‘‘(6) INFLATION ADJUSTMENT.— 

22 ‘‘(A) IN GENERAL.—As of January 1, 

23 2010, and as of the 1st day of each subsequent 

24 5-year period, the standard maximum share in25 surance amount payable to any member of an 
40 

•S 1562 IS

1 insured credit union shall be increased by the 

2 product of— 

3 ‘‘(i) $100,000; and 

4 ‘‘(ii) the ratio of the value of the Per5 sonal Consumption Expenditures Chain6 Type Index (or any successor index there7 to), published by the Department of Com8 merce, as in effect on the date of the ad9 justment under this clause. 

10 ‘‘(B) LIMITATION ON ADJUSTMENTS.—If 

11 the application of subparagraph (A) would re12 sult in any decrease in the standard maximum 

13 share insurance amount in effect on the date of 

14 the adjustment under clause (i), the standard 

15 maximum share insurance amount shall remain 

16 unchanged until the next scheduled 5-year ad17 justment that does not result in any such de18 crease. 

19 ‘‘(C) ROUNDING.—If the amount deter20 mined under subparagraph (B) for any period 

21 is not a multiple of $10,000, the amount so de22 termined shall be rounded to the nearest 

23 $10,000. 

24 ‘‘(D) PUBLICATION.—Not later than Janu25 ary 31 of the 1st year of each 5-year period re-
41 

•S 1562 IS

1 ferred to in subparagraph (A), the Board shall 

2 publish in the Federal Register the standard 

3 maximum share insurance amount and the 

4 amount of share insurance coverage under 

5 paragraph (3) that may be due to any member 

6 at an insured credit union during that 5-year 

7 period.’’; and 

8 (C) in paragraph (3), by striking 

9 ‘‘$100,000 per account’’ and inserting the fol10 lowing: ‘‘$250,000 per account, which amount 

11 shall be subject to inflation adjustments in the 

12 same manner as under paragraph (6) with re13 spect to the standard maximum share insurance 

14 amount (as determined under paragraph (5), 

15 except that ‘$250,000’ shall be substituted for 

16 the amount specified in paragraph (5)(A)(i) for 

17 purposes of this paragraph).’’. 

18 (2) TECHNICAL AMENDMENT.—Section 202(h) 

19 of the Federal Credit Union Act (12 U.S.C. 

20 1782(h)) is amended by striking ‘‘207(c)(1)’’ and in21 serting ‘‘207(k)’’. 

22 (c) EFFECTIVE DATE.—Except as otherwise specifi23 cally provided in this section or the amendments made by 

24 this section, this section and such amendments shall be25 come effective on the effective date of the regulations re-
42 

•S 1562 IS

1 quired under section 205(a)(2), relating to the implemen2 tation of deposit insurance increases under this section. 

3 SEC. 203. DESIGNATED RESERVE RATIO. 

4 (a) IN GENERAL.— 

5 (1) AMENDMENT TO SECTION 7.—Section 

6 7(b)(3) of the Federal Deposit Insurance Act (12 

7 U.S.C. 1817(b)(3)) is amended to read as follows: 

8 ‘‘(3) DESIGNATED RESERVE RATIO.— 

9 ‘‘(A) ACTION BY THE BOARD.— 

10 ‘‘(i) IN GENERAL.—Before the begin11 ning of each calendar year, the Board of 

12 Directors shall, subject to clause (ii)— 

13 ‘‘(I) designate the reserve ratio 

14 applicable to the Deposit Insurance 

15 Fund for that year; and 

16 ‘‘(II) publish the reserve ratio so 

17 designated. 

18 ‘‘(ii) RULEMAKING.—Any change to 

19 the designated reserve ratio for any cal20 endar year shall be made pursuant to sec21 tion 553 of title 5, United States Code. 

22 ‘‘(B) RANGE.—The reserve ratio des23 ignated by the Board of Directors for any 

24 year— 
43 

•S 1562 IS

1 ‘‘(i) may not exceed 1.50 percent of 

2 aggregate estimated insured deposits; and 

3 ‘‘(ii) may not be less than 1.0 percent 

4 of aggregate estimated insured deposits. 

5 ‘‘(C) FACTORS.—In designating a reserve 

6 ratio for any year, the Board of Directors 

7 shall— 

8 ‘‘(i) take into account the risk of 

9 losses to the Deposit Insurance Fund in 

10 that year and in future years; 

11 ‘‘(ii) take into account economic con12 ditions generally affecting insured deposi13 tory institutions, to provide for an increase 

14 in the designated reserve ratio during more 

15 favorable economic conditions and to pro16 vide for a decrease in the designated re17 serve ratio during less favorable economic 

18 conditions, notwithstanding the increased 

19 risks of loss that may exist during such 

20 less favorable conditions, as determined to 

21 be appropriate by the Board; 

22 ‘‘(iii) seek to prevent sharp swings in 

23 the assessment rates for insured depository 

24 institutions; and 
44 

•S 1562 IS

1 ‘‘(iv) take into account such other fac2 tors as the Board of Directors may deter3 mine to be appropriate, consistent with the 

4 requirements of this subparagraph.’’. 

5 (2) TECHNICAL AND CONFORMING AMEND6 MENTS.—Section 3(y) of the Federal Deposit Insur7 ance Act (12 U.S.C. 1813), as added by this Act, is 

8 amended by adding at the end the following: 

9 ‘‘(2) RESERVE RATIO.—The term ‘reserve ratio’ 

10 means the ratio of the fund balance of the Deposit 

11 Insurance Fund to aggregate estimated insured de12 posits held in all insured depository institutions. 

13 ‘‘(3) DESIGNATED RESERVE RATIO.—The term 

14 ‘designated reserve ratio’ means the reserve ratio 

15 designated by the Board of Directors under section 

16 7(b)(3).’’. 

17 (3) EFFECTIVE DATE.—Subject to paragraph 

18 (4), this subsection and the amendments made by 

19 this subsection shall become effective on the effective 

20 date of the regulations required under section 

21 205(a)(1), relating to designation of the reserve 

22 ratio by the Board. 

23 (4) DESIGNATION OF INITIAL RESERVE RATIO

24 FOR DEPOSIT INSURANCE FUND.—During the period 

25 beginning on the effective date of the merger of the 
45 

•S 1562 IS

1 deposit insurance funds under section 102, and end2 ing on the effective date of final regulations desig3 nating the reserve ratio, as required by section 

4 205(a)(1), the designated reserve ratio of the De5 posit Insurance Fund shall continue to be deter6 mined pursuant to section 7(b)(2)(A)(iv), as in ef7 fect on the day before the effective date of the merg8 er under section 102. 

9 (b) REQUIREMENTS APPLICABLE TO ANY MODIFICA10 TION OF THE RISK-BASED ASSESSMENT SYSTEM.—Sec11 tion 7(b)(1) of the Federal Deposit Insurance Act (12 

12 U.S.C. 1817(b)(1)) is amended by adding at the end the 

13 following: 

14 ‘‘(E) REQUIREMENTS APPLICABLE TO ANY

15 MODIFICATION OF THE RISK-BASED ASSESS16 MENT SYSTEM.— 

17 ‘‘(i) IN GENERAL.—In revising or 

18 modifying the risk-based assessment sys19 tem at any time after the date of enact20 ment of the Deposit Insurance Reform Act 

21 of 2005, the Board of Directors— 

22 ‘‘(I) may not make any change to 

23 the information collected from or re24 quired to be retained by insured de25 pository institutions solely for pur-
46 

•S 1562 IS

1 poses of the assessment risk classifica2 tion, as defined by regulations of the 

3 Board, if the change would result in 

4 the imposition of an overall greater 

5 regulatory or reporting burden on in6 sured depository institutions than was 

7 the case before that date of enact8 ment; and 

9 ‘‘(II) may implement any such 

10 revision or modification in final form 

11 only after notice and opportunity for 

12 comment. 

13 ‘‘(ii) RULE OF CONSTRUCTION.—An 

14 increase in an assessment rate or a revi15 sion of the assessment base shall not be 

16 considered to be a revision or modification 

17 resulting in greater regulatory or reporting 

18 burden for purposes of this subpara19 graph.’’. 

20 SEC. 204. ASSESSMENT CREDITS AND DIVIDENDS. 

21 (a) IN GENERAL.—Section 7(e) of the Federal De22 posit Insurance Act (12 U.S.C. 1817(e)) is amended to 

23 read as follows: 

24 ‘‘(e) CREDITS AND DIVIDENDS.— 
47 

•S 1562 IS

1 ‘‘(1) ONE-TIME CREDIT BASED ON TOTAL AS2 SESSMENT BASE AT YEAR-END 1996.— 

3 ‘‘(A) IN GENERAL.—The Board of Direc4 tors shall, by regulation, provide for a credit to 

5 each insured depository institution that was in 

6 existence on December 31, 1996, and that had 

7 paid a deposit insurance assessment prior to 

8 that date (or a successor insured depository in9 stitution), based on the assessment base of the 

10 institution on that date, as compared to the 

11 combined aggregate assessment base of all such 

12 institutions, taking into account such factors as 

13 the Board may determine to be appropriate. 

14 ‘‘(B) CREDIT LIMIT.—The aggregate 

15 amount of credits available under subparagraph 

16 (A) to all insured depository institutions that 

17 are eligible for the credit shall not exceed the 

18 amount that the Corporation could collect if it 

19 imposed an assessment of 9 basis points on the 

20 combined assessment base of the Bank Insur21 ance Fund and the Savings Association Insur22 ance Fund as of December 31, 2001. 

23 ‘‘(C) APPLICATION OF CREDITS.—The 

24 amount of a credit to any insured depository in25 stitution under this paragraph may be applied 
48 

•S 1562 IS

1 by the Corporation to those portions of the as2 sessments under subsection (b) applicable to 

3 that institution which become due for assess4 ment periods beginning after the effective date 

5 of regulations required by subparagraph (A). 

6 ‘‘(D) CHALLENGES TO CREDIT

7 AMOUNTS.—The regulations required by sub8 paragraph (A) shall include provisions allowing 

9 an insured depository institution a reasonable 

10 opportunity to challenge administratively the 

11 amount of its credit under this paragraph. The 

12 determination of the Corporation of the amount 

13 of the credit following such challenge shall be 

14 final, and not subject to judicial review. 

15 ‘‘(2) ASSESSMENT CREDITS.— 

16 ‘‘(A) AUTHORITY.—The Board of Direc17 tors shall, by regulation, establish the qualifica18 tions and procedures under which the Corpora19 tion would apply assessment credits for the as20 sessment periods beginning on or after the first 

21 assessment period to which a credit under para22 graph (1) applies. 

23 ‘‘(B) CRITERIA FOR DETERMINATION.—In 

24 determining whether to provide assessment 

25 credits under this paragraph and in what 
49 

•S 1562 IS

1 amounts, the Board of Directors shall take into 

2 account the factors for setting assessments 

3 under subsection (b)(2) and the factors for des4 ignating the reserve ratio under subsection 

5 (b)(3). 

6 ‘‘(3) DIVIDENDS.— 

7 ‘‘(A) RESERVE RATIO IN EXCESS OF 1.50

8 PERCENT OF ESTIMATED INSURED DEPOSITS.— 

9 The Corporation shall provide cash dividends to 

10 insured depository institutions in accordance 

11 with this paragraph if the reserve ratio of the 

12 Deposit Insurance Fund exceeds the maximum 

13 amount established under subsection 

14 (b)(3)(B)(i), to the extent of that excess 

15 amount. 

16 ‘‘(B) AMOUNT EQUAL TO OR IN EXCESS OF

17 1.40 PERCENT OF ESTIMATED INSURED DEPOS18 ITS AND NOT MORE THAN 1.50 PERCENT.—The 

19 Corporation shall provide cash dividends to in20 sured depository institutions in accordance with 

21 this paragraph if the reserve ratio of the De22 posit Insurance Fund equals or exceeds 1.40 

23 and is not more than 1.50 percent, and that 

24 amount shall equal 50 percent of the amount in 

25 excess of the amount required to maintain the 
50 

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1 reserve ratio at 1.40 percent of the estimated 

2 insured deposits. 

3 ‘‘(C) LIMITATION.—The Board of Direc4 tors may suspend or limit dividends paid under 

5 this paragraph if the Board determines in writ6 ing that— 

7 ‘‘(i) a significant risk of losses to the 

8 Deposit Insurance Fund exists over the 

9 next one-year period; and 

10 ‘‘(ii) it is likely that such losses will be 

11 sufficiently high as to justify a finding by 

12 the Board that the reserve ratio should 

13 temporarily exceed the maximum amount 

14 established under subsection (b)(3)(B)(i). 

15 ‘‘(D) CONSIDERATIONS.—In making a de16 termination under subparagraph (B), the Board 

17 shall consider— 

18 ‘‘(i) national and regional conditions 

19 and their impact on insured depository in20 stitutions; 

21 ‘‘(ii) potential problems affecting in22 sured depository institutions or a specific 

23 group or type of depository institution; 

24 ‘‘(iii) the degree to which the contin25 gent liability of the Corporation for antici-
51 

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1 pated failures of insured institutions ade2 quately addresses concerns over funding 

3 levels in the Deposit Insurance Fund; and 

4 ‘‘(iv) any other factors that the Board 

5 determines is appropriate. 

6 ‘‘(E) REPORT TO CONGRESS.— 

7 ‘‘(i) SUBMISSION.—Any determination 

8 under subparagraph (B) shall be submitted 

9 to the Committee on Banking, Housing, 

10 and Urban Affairs of the Senate and the 

11 Committee on Financial Services of the 

12 House of Representatives, not later than 

13 270 days after making such determination. 

14 ‘‘(ii) CONTENT.—The report sub15 mitted under clause (i) shall include— 

16 ‘‘(I) a complete explanation for 

17 the determination; and 

18 ‘‘(II) a discussion of the factors 

19 required to be considered under sub20 paragraph (C). 

21 ‘‘(F) REVIEW OF DETERMINATION.— 

22 ‘‘(i) ANNUAL REVIEW.—A determina23 tion to suspend or limit dividends under 

24 subparagraph (B) shall be reviewed by the 

25 Board of Directors annually. 
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1 ‘‘(ii) ACTION BY BOARD.—Based on 

2 each annual review under clause (i), the 

3 Board of Directors shall either renew or 

4 remove a determination to suspend or limit 

5 dividends under subparagraph (B), or shall 

6 make a new determination in accordance 

7 with this paragraph. Unless justified under 

8 the terms of the renewal or new determina9 tion, any amount as is in the Fund in ex10 cess of the amount required to maintain 

11 the reserve ratio at the maximum amount 

12 established under subsection (b)(3)(B)(i) 

13 shall be paid as dividends to insured depos14 itory institutions in accordance with this 

15 paragraph.’’. 

16 (b) EFFECTIVE DATE.—The amendments made by 

17 this section shall become effective on the effective date of 

18 the regulations required to be issued under section 

19 205(a)(2), relating to implementation of the one-time as20 sessment credit. 

21 SEC. 205. REGULATIONS REQUIRED. 

22 (a) IN GENERAL.—Not later than 270 days after the 

23 date of enactment of this Act, the Board shall issue final 

24 regulations, in accordance with section 553 of chapter 5 

25 of title 5, United States Code— 
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1 (1) designating the reserve ratio for the Deposit 

2 Insurance Fund in accordance with section 7(b)(3) 

3 of the Federal Deposit Insurance Act, as amended 

4 by section 203 of this Act, which regulations shall 

5 become effective not later than 90 days after the 

6 date of their publication in final form; 

7 (2) implementing increases in deposit insurance 

8 coverage in accordance with the amendments made 

9 by section 202, which regulations shall become effec10 tive not later than 90 days after the date of their 

11 publication in final form; 

12 (3) implementing the one-time assessment cred13 it to certain insured depository institutions in ac14 cordance with section 7(e)(2) of the Federal Deposit 

15 Insurance Act, as amended by section 204 of this 

16 Act; 

17 (4) establishing the qualifications and proce18 dures under which the Corporation may provide on19 going assessment credits, under section 7(e)(3) of 

20 the Federal Deposit Insurance Act, as amended by 

21 section 204 of this Act; and 

22 (5) providing for assessments under section 7 of 

23 the Federal Deposit Insurance Act, as amended by 

24 this Act, which regulations shall become effective on 
54 

•S 1562 IS

1 the effective date of the regulations required by 

2 paragraph (3). 

3 (b) SAVINGS CLAUSE.— 

4 (1) IN GENERAL.—Nothing in this Act or the 

5 amendments made by this Act shall be construed to 

6 affect the authority of the Corporation with regard 

7 to the setting or collection of deposit insurance as8 sessments prior to the effective date of any regula9 tions required under subsection (a). 

10 (2) PRESERVATION OF MINIMUM ASSESSMENT

11 PROVISION.—Subparagraph (E) of section 7(b)(2) of 

12 the Federal Deposit Insurance Act (12 U.S.C. 

13 1817(b)(2)), as in effect on the day before the effec14 tive date of title I of this Act, shall continue to apply 

15 with respect to deposit insurance assessments im16 posed prior to the effective date of the regulations 

17 required under subsection (a)(5) of this section. 

18 SEC. 206. STUDIES OF POTENTIAL CHANGES TO THE FED19 ERAL DEPOSIT INSURANCE SYSTEM. 

20 (a) STUDY AND REPORT BY FDIC AND NCUA.— 

21 (1) STUDY.—The Board of Directors of the 

22 Federal Deposit Insurance Corporation and the Na23 tional Credit Union Administration Board shall each 

24 conduct a study of— 
55 

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1 (A) the feasibility of increasing the limit 

2 on deposit insurance for deposits of municipali3 ties and other units of general local govern4 ment, and the potential benefits and the poten5 tial adverse consequences that may result from 

6 any such increase; and 

7 (B) the feasibility of establishing a vol8 untary deposit insurance system for deposits in 

9 excess of the maximum amount of deposit in10 surance for any depositor, and the potential 

11 benefits and the potential adverse consequences 

12 that may result from the establishment of any 

13 such system. 

14 (2) REPORT.—Not later than 1 year after the 

15 date of enactment of this Act, the Board of Direc16 tors of the Federal Deposit Insurance Corporation 

17 and the National Credit Union Administration 

18 Board shall each submit a report to the Congress on 

19 the study required under paragraph (1), containing 

20 the findings and conclusions of the reporting agency, 

21 together with such recommendations for legislative 

22 or administrative changes as the agency may deter23 mine to be appropriate. 

24 (b) STUDY AND REPORT REGARDING APPROPRIATE

25 RESERVE RATIO.— 
56 

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1 (1) STUDY.—The Corporation shall conduct a 

2 study on the feasibility of using actual deposits rath3 er than estimated insured deposits in calculating the 

4 reserve ratio of the Deposit Insurance Fund. 

5 (2) REPORT.—Not later than 1 year after the 

6 date of enactment of this Act, the Board shall sub7 mit a report to Congress on the results of the study 

8 required under paragraph (1), together with such 

9 recommendations for legislative or administrative ac10 tions as may be determined to be appropriate. 

11 SEC. 207. EFFECTIVE DATE. 

12 Except as otherwise specifically provided in this title, 

13 this title and the amendments made by this title shall be14 come effective on the date of enactment of this Act. 

Æ