I

103D CONGRESS

1ST SESSION H. R. 2911

To authorize the President to establish an advisory commission to study

the merger of the BIF and SAIF funds and the implications for the

banking and thrift industries of such a merger.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 6, 1993

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

Committee on Banking, Finance and Urban Affairs

A BILL

To authorize the President to establish an advisory commission to study the merger of the BIF and SAIF funds

and the implications for the banking and thrift industries

of such a merger.

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

3 SENSE OF THE CONGRESS

4 SECTION 1. It is the sense of the Congress that—

5 (1) while there have been massive governmental

6 efforts and expenditure of funds to complete the res7 olution of the thrift crisis and despite improvement

8 in the condition of most segments of the thrift in-
2

HR 2911 IH

1 dustry, there is a risk that the structure of the de2 posit insurance funds since FIRREA could under3 mine even the healthiest segments of the thrift in4 dustry by impeding their ability to compete and pre5 cipitating another costly crisis in that industry. The

6 structural issues involve—

7 (a) the presence of two separate insurance

8 funds, the BIF and SAIF funds;

9 (b) the projected, substantial disparity in

10 deposit insurance premiums to be paid by BIF

11 and SAIF members and the potential for a

12 competitive imbalance;

13 (c) the presence of a designated reserve

14 ratio of 1.25 percent of insured deposits for

15 BIF and SAIF funds; and

16 (d) the effect which existing debt obliga17 tions have on the ability of the SAIF fund to

18 accumulate reserves and to become fiscally

19 sound.

20 (2) to ensure the continued availability of hous21 ing credit and to avoid another costly crisis in the

22 thrift industry as a result of some of these struc23 tural impediments involving the FIRREA-mandated

24 separate fund concept, an Advisory Commission

25 shall be formed to advise the President and the Con-
3

HR 2911 IH

1 gress on the viability of merging or maintaining the

2 separation of the deposit insurance funds and the

3 impact of such action on the health of the BIF and

4 SAIF funds, the confidence of depositors in the fed5 eral deposit insurance system, and the regulation of

6 and competitive balance between banks and thrifts.

7 ESTABLISHMENT OF AN ADVISORY COMMISSION

8 SEC. 2. There is hereby established an Advisory Com9 mission to be known as the Advisory Commission on BIF

10 and SAIF funds (thereafter referred to as the ‘‘Advisory

11 Commission’’).

12 (a) MEMBERSHIP OF THE ADVISORY COMMISSION.—

13 (1) NUMBER AND APPOINTMENT.—The Advi14 sory Commission shall be composed of 7 members

15 appointed no later than ninety days after the date

16 of the enactment of this Act. The members shall be

17 appointed as follows:

18 (A) Two citizens of the United States ap19 pointed by the President.

20 (B) One citizen of the United States ap21 pointed by the President pro tempore of the

22 Senate upon the recommendation of the major23 ity leader of the Senate.

24 (C) One citizen of the United States ap25 pointed by the President pro tempore of the
4

HR 2911 IH

1 Senate upon the recommendation of the minor2 ity leader of the Senate.

3 (D) One citizen of the United States ap4 pointed by the Speaker of the House upon the

5 recommendation of the majority leader of the

6 House of Representatives.

7 (E) One citizen of the United States ap8 pointed by the Speaker of the House upon the

9 recommendation of the minority leader of the

10 House of Representatives.

11 (F) The Secretary of the Treasury or his

12 designate.

13 (2) ADDITIONAL QUALIFICATIONS.—

14 (A) IN GENERAL.—Members of the Advi15 sory Commission who are appointed under any

16 subparagraph of paragraph (1) shall be ap17 pointed from among individuals who are spe18 cially qualified to serve on the Advisory Com19 mission by virtue of their education, training, or

20 experience.

21 (B) LIMITATION.—Of the total number of

22 members of the Advisory Commission who are

23 described in subparagraph (A), not more than

24 one such member may be, at the time of any

25 such member’s appointment and during any
5

HR 2911 IH

1 such member’s service on the Advisory Commis2 sion—

3 (i) a director, officer, or employee of

4 any savings association;

5 (ii) a director, officer, or employee of

6 any bank; or

7 (iii) a director, officer, employee or

8 agent of any consumer organization.

9 (3) TERMS.—Members shall be appointed for

10 the life of the Advisory Commission.

11 (4) CHAIRPERSON.—The chairperson of the Ad12 visory Commission shall be the Secretary of the

13 Treasury or his designate.

14 (5) QUORUM.—A majority of the members of

15 the Advisory Commission shall constitute a quorum

16 for the transaction of business.

17 (6) VOTING.—Each member of the Advisory

18 Commission shall be entitled to 1 vote, which shall

19 be equal to the vote of every other member of the

20 Advisory Commission.

21 (7) VACANCIES.—No vacancy on the Advisory

22 Commission shall affect the powers of the Advisory

23 Commission and any such vacancy shall be filled in

24 the manner in which the original appointment was

25 made.
6

HR 2911 IH

1 (8) COMPENSATION AND EXPENSES.—

2 (A) NO BASIC PAY.—Except as provided in

3 subparagraph (B), members of the Advisory

4 Commission shall receive no additional pay, al5 lowances, or benefits by reason of their service

6 on the Advisory Commission.

7 (B) PER DIEM AND TRAVEL EXPENSES.—

8 Members of the Advisory Commission who are

9 appointed from among private citizens of the

10 United States may be allowed travel expenses,

11 including per diem, in lieu of substance, as au12 thorized by law for persons serving intermit13 tently in the government service to the extent

14 that funds are available for such purposes.

15 (9) MEETINGS.—The Advisory Commission

16 shall meet at the call of the Chairperson or a major17 ity of the members.

18 (b) FUNCTIONS OF THE ADVISORY COMMISSION.—

19 (1) CONTENTS AND SPECIFIC RECOMMENDA20 TIONS.—The Advisory Commission shall conduct an

21 investigation and evaluation of and shall report and

22 make recommendations on the future status of the

23 deposit insurance system.
7

HR 2911 IH

1 (2) ISSUES TO BE CONSIDERED.—Pursuant to

2 its responsibilities under this section the Advisory

3 Commission shall consider the following issues:

4 (A) An analysis of whether a deposit insur5 ance premium disparity between banks and

6 thrifts is likely and the competitive impact

7 thereof.

8 (B) The practical justification for main9 taining two separate Federal deposit funds.

10 (C) The impact on the soundness of the

11 Federal deposit insurance system by the con12 tinuation of a separate insurance fund for

13 banks and savings associations.

14 (D) Whether a merger of the Bank Insur15 ance Fund and Savings Association Insurance

16 Fund can be accomplished in a manner which

17 is equitable and the legal and structural impedi18 ments which need to be addressed in such a

19 merger.

20 (E) The timing of a merger of the two

21 funds, should such occur.

22 (F) Whether the designated ratio of re23 serves of 1.25 per centum of insured deposits,

24 which must now be held by each deposit insur-
8

HR 2911 IH

1 ance fund, is appropriate in light of current and

2 future needs and considerations.

3 (G) The impact of any remaining regu4 latory differences between banks and thrifts on

5 the soundness of a merged fund.

6 (H) The impact of a fund merger on a

7 consolidation of the bank and thrift regulatory

8 agencies.

9 (3) FINAL REPORT.—

10 (A) REPORT REQUIRED.—Not later than

11 the end of the one-year period beginning on the

12 date of the enactment of this Act, the Advisory

13 Commission shall submit to the President, the

14 Committee on Banking, Finance and Urban Af15 fairs of the House of Representatives, and the

16 Committee on Banking, Housing and Urban

17 Affairs of the Senate, a final report which con18 tains a detailed statement of the findings and

19 conclusions of the Advisory Board, including

20 such recommendations for administrative and

21 legislative action as the Advisory Commission

22 determines to be appropriate.

23 (B) MAJORITY VOTE.—A recommendation

24 may be made by the Advisory Commission to

25 the President and to the Congress only if it is
9

HR 2911 IH

1 adopted by a majority of the members of the

2 Advisory Commission.

3 (C) ADDITIONAL, DISSENTING, AND SUP4 PLEMENTAL VIEWS.—The report required

5 under subparagraph (A) shall contain any addi6 tional, dissenting, or supplemental views of any

7 member of the Advisory Commission.

8 (c) POWERS OF THE ADVISORY BOARD.—

9 (1) HEARINGS.—The Advisory Commission may

10 hold such hearings and sit and act at such times and

11 places as the Advisory Commission may find advis12 able.

13 (2) RULES AND REGULATIONS.—The Advisory

14 Commission may adopt such rules and regulations

15 as may be necessary to establish its procedures and

16 to govern the manner of operations, organizations,

17 and personnel.

18 (3) ASSISTANCE FROM FEDERAL AGENCIES.—

19 (A) INFORMATION.—The Advisory Com20 mission may request from the head of any Fed21 eral agency or instrumentality such information

22 as the Advisory Commission may require for

23 the purpose of this section. Each such agency

24 or instrumentality shall furnish such informa25 tion to the Advisory Commission upon request
10

HR 2911 IH

1 made by the Chairperson of the Advisory Com2 mission.

3 (B) ADMINISTRATIVE SUPPORT SERVICES

4 AND PERSONNEL.—Upon request of the Chair5 person of the Advisory Commission, the head of

6 any Federal agency or instrumentality shall, to

7 the extent possible and subject to the discretion

8 of such head—

9 (i) make any of the facilities and serv10 ices of such agency or instrumentality

11 available to the Advisory Commission; and

12 (ii) detail any of the personnel of such

13 agency or instrumentality to the Advisory

14 Commission, on a nonreimbursable basis,

15 to assist the Advisory Commission in car16 rying out its duties under this section, ex17 cept that any expenses of the Advisory

18 Commission incurred under this clause

19 shall be subject to the limitation on total

20 expenses set forth in subsection (d)(2).

21 (4) MAILS.—The Advisory Commission may use

22 the United States mails in the same manner and

23 under the same conditions as other Federal agencies.

24 (5) CONTRACTING.—The Advisory Commission

25 may, to such extent and in such amounts as pro-
11

HR 2911 IH

1 vided in advance in appropriation Acts, enter into

2 contracts with State agencies, private firms, institu3 tions, and individuals for the purpose of conducting

4 research or surveys necessary to enable the Advisory

5 Commission to discharge its duties under this sec6 tion, subject to the limitation on total expenses set

7 forth in subsection (d)(2).

8 (6) STAFF.—

9 (A) IN GENERAL.—Subject to such rules

10 and regulations as may be adopted by the Advi11 sory Commission and the limitation on total ex12 penses set forth in subsection (e)(2), the Chair13 person of the Advisory Commission may ap14 point, terminate, and fix the compensation of

15 an executive director and such additional staff

16 as the Chairperson deems advisable to assist

17 the Advisory Commission.

18 (B) PAY RATES.—Individuals appointed

19 under subparagraph (A) may be paid at rates

20 not to exceed a rate equal to the maximum rate

21 for GS–18 of the General Schedule under sec22 tion 5332 of title 5, United States Code.

23 (C) CERTAIN PROVISIONS OF TITLE 5,

24 UNITED STATES CODE, NOT APPLICABLE.—Ap-
12

HR 2911 IH

1 pointments may be made under subparagraph

2 (A) without regard to—

3 (i) provisions of title 5, United States

4 Code, concerning appointments in the com5 petitive service, and

6 (ii) provisions of chapter 51 and sub7 chapter III of chapter 53 of such title, or

8 of any other provision of law relating to

9 number, classification, and General Sched10 ule rates.

11 (7) ADVISORY COMMITTEE.—The Advisory

12 Commission shall be considered an advisory commit13 tee under the Federal Advisory Committee Act.

14 (d) EXPENSES OF ADVISORY BOARD.—

15 (1) IN GENERAL.—Any expense of the Advisory

16 Commission shall be paid from such funds as may

17 be available to the Secretary of the Treasury.

18 (2) LIMITATION.—The total expenses of the

19 Advisory Commission shall not exceed $500,000.

20 (3) GAO AUDIT.—Prior to the termination of

21 the Advisory Commission pursuant to subsection (f),

22 the Comptroller General of the United States shall

23 conduct an audit of the financial books and records

24 of the Advisory Commission to determine that the

25 limitation on expenses under paragraph (2) has not
13

HR 2911 IH

1 been exceeded, and shall include its determination in

2 an opinion to be included in the report of the Advi3 sory Commission.

4 (e) TERMINATION OF THE ADVISORY COMMISSION.—

5 The Advisory Commission shall cease to exist on the date

6 that is thirty days after the date on which the Advisory

7 Commission submits the report required under subsection

8 (b)(3).

Æ