I

103D CONGRESS

1ST SESSION H. R. 405

To require public disclosure of examination reports of certain failed depository

institutions.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 5, 1993

Mr. STARK introduced the following bill; which was referred to the Committee

on Banking, Finance and Urban Affairs

A BILL

To require public disclosure of examination reports of certain

failed depository institutions.

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 ‘‘Bank and Thrift Dis5 closure Act of 1993’’.

6 SEC. 2. PUBLIC AVAILABILITY OF EXAMINATION INFORMA7 TION.

8 (a) IN GENERAL.—Each appropriate banking agency

9 shall make available to the public copies of reports of all

10 examinations of each failed depository institution that re-
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1 ceived funds, as defined in section 6, or of a holding com2 pany of such institution, that was performed by that bank3 ing agency or its predecessor, during the 5-year period

4 preceding the transfer, failure, or receipt of funds. Each

5 appropriate banking agency other than the National Cred6 it Union Administration Board shall consult with the Fed7 eral Deposit Insurance Corporation or the Resolution

8 Trust Corporation prior to making such reports available

9 to the public.

10 (b) DELAY OF PUBLICATION.—

11 (1) THREATS TO SAFETY OR SOUNDNESS OF

12 INSTITUTION.—If the appropriate banking agency

13 makes a determination in writing that release of an

14 examination report would seriously threaten the

15 safety or soundness of an insured depository institu16 tion, such agency may initially delay release of the

17 examination report for a reasonable period of time,

18 not to exceed 12 months from the date of the trans19 fer, failure, or receipt of funds described in section

20 6. Such determination may be renewed on an annual

21 basis.

22 (2) ONGOING INVESTIGATIONS.—If the appro23 priate banking agency or the Resolution Trust Cor24 poration determines in writing that release of a por25 tion of an examination report would hinder an ongo-
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1 ing investigation of alleged negligence, or of other

2 activity that would give rise to either administrative

3 or civil proceedings, the portion of the examination

4 report directly pertaining to the alleged negligence

5 or other activity, may be withheld from release dur6 ing the investigation, until a notice of charges is is7 sued, a complaint is filed, or for a period not to ex8 ceed 24 months from the date of the transfer, fail9 ure, or receipt of funds described in section 6,

10 whichever is earlier.

11 (3) DELAY PENDING CRIMINAL INVESTIGA12 TION.—If the appropriate banking agency and the

13 Attorney General of the United States or the attor14 ney general of a State, in the case of a State-char15 tered depository institution, jointly determine that

16 release of a portion of an examination report would

17 hinder an ongoing investigation of alleged criminal

18 activity, the portion of the examination report di19 rectly pertaining to the alleged crime may be with20 held from release until the termination of such in21 vestigation, the issuance of an indictment, or for a

22 period of not to exceed 5 years from the date of the

23 transfer, failure or receipt of funds described in sec24 tion 6, whichever is earlier. The Attorney General of

25 the United States or the attorney general of a State
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1 shall provide the Comptroller General of the United

2 States with access to information regarding any

3 such criminal investigation, and shall identify any

4 law enforcement agencies or resources assigned to

5 the investigation.

6 (c) EXCLUSION OF OPEN INSTITUTIONS.—

7 (1) OPEN INSTITUTIONS.—This section shall

8 not apply to any open insured depository institution

9 and shall not be construed to require disclosure to

10 the public of any report of examination of any open

11 insured depository institution.

12 (2) AFFILIATED SOLVENT INSTITUTIONS.—In

13 connection with the release of an examination report

14 of a holding company of a failed institution, nothing

15 in this section shall be construed as requiring the re16 lease of any examination report information regard17 ing any solvent depository institution that is also a

18 subsidiary of such holding company.

19 SEC. 3. PROHIBITION OF CONFIDENTIAL SETTLEMENTS.

20 Notwithstanding any other provision of law or any

21 rule, regulation, or order issued thereunder, all agree22 ments or settlements of claims between the Resolution

23 Trust Corporation or the Federal Deposit Insurance Cor24 poration and any other party, where such agreement or
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1 claim relates to an institution described in section 6 shall

2 be made available to the public.

3 SEC. 4. APPLICABILITY.

4 The requirements of section 2 shall apply—

5 (1) to any insured depository institution that

6 has had its assets or liabilities, or any part thereof,

7 transferred to the FSLIC Resolution Fund or the

8 Resolution Trust Corporation;

9 (2) to any member of the Bank Insurance Fund

10 that has failed and received funds, if during either

11 the fiscal year in which the institution failed or the

12 fiscal year in which the institution received funds, as

13 defined in section 6, the Bank Insurance Fund—

14 (A) had outstanding loans, or had other15 wise received funds, from the Department of

16 the Treasury, the Federal Financing Bank, or

17 any Federal Reserve bank; or

18 (B) had a negative fund balance;

19 (3) to any member of the Savings Association

20 Insurance Fund that has failed and received funds,

21 if during either the fiscal year in which the institu22 tion failed or the fiscal year in which the institution

23 received funds, as defined in section 6, the Savings

24 Association Insurance Fund—
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1 (A) had outstanding loans, or had other2 wise received funds, from the Department of

3 the Treasury, the Federal Financing Bank, or

4 any Federal Reserve bank; or

5 (B) had a negative fund balance; and

6 (4) to any insured credit union that has failed

7 and received funds, if during either the fiscal year

8 in which the credit union failed or the fiscal year in

9 which the credit union received funds, as defined in

10 section 6, the National Credit Union Share Insur11 ance Fund—

12 (A) had outstanding loans, or had other13 wise received funds, from the Department of

14 the Treasury, the Federal Financing Bank, or

15 any Federal Reserve Bank; or

16 (B) had a negative fund balance.

17 SEC. 5. REMOVAL OF CUSTOMER INFORMATION FROM EX18 AMINATION REPORTS.

19 In making available reports of examinations under

20 section 2, the appropriate Federal banking agency shall

21 excise the following information:

22 (1) NONINSTITUTION-AFFILIATED PARTIES.—

23 The names and all other identifying information for

24 all persons who are not institution-affiliated parties

25 of an insured depository institution.
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1 (2) INSTITUTION-AFFILIATED PARTIES.—The

2 names and any information related to an institu3 tion-affiliated party that is not relevant to the rela4 tionship between the insured depository institution

5 and the institution-affiliated party.

6 (3) OPEN INSTITUTIONS.—The names and all

7 other identifying information pertaining to open in8 sured depository institutions.

9 (4) EXAMINERS.—Any reference to the examin10 ers and other banking agency employees involved in

11 the examination of the insured depository institu12 tion.

13 (5) WHISTLEBLOWERS.—All references to per14 sons or entities that have provided information in

15 confidence to a banking agency which may be uti16 lized to pursue a civil or criminal action.

17 SEC. 6. DEFINITIONS.

18 For purposes of this section—

19 (1) an insured depository institution has

20 ‘‘failed’’ if the Federal Deposit Insurance Corpora21 tion, Resolution Trust Corporation, or National

22 Credit Union Administration Board—

23 (A) has been appointed as receiver or liq24 uidator for such institution; or
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1 (B) has exercised the power to provide as2 sistance under section 13(c)(2) of the Federal

3 Deposit Insurance Act or the analogous powers

4 under section 21A of the Federal Home Loan

5 Bank Act.

6 (2) an insured depository institution has ‘‘re7 ceived funds’’ if the institution, its holding company,

8 or an acquiring institution receives cash or other val9 uable consideration from the National Credit Union

10 Administration Board, the Resolution Trust Cor11 poration, the Federal Deposit Insurance Corpora12 tion, or any Federal Reserve bank that lends for

13 more than 30 days while the insured depository in14 stitution is critically undercapitalized within the 1-

15 year period prior to the failure of the insured deposi16 tory institution whether in the form of a loan, a pay17 ment to depositors or other creditors, the assump18 tion of liabilities, or otherwise;

19 (3) the term ‘‘insured depository institution’’

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

21 Deposit Insurance Act, except that such term in22 cludes an insured credit union, as defined in section

23 101 of the Federal Credit Union Act; and

24 (4) the term ‘‘appropriate banking agency’’

25 means the Federal Deposit Insurance Corporation,
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1 the Board of Governors of the Federal Reserve Sys2 tem, the Comptroller of the Currency, the Office of

3 Thrift Supervision, or the National Credit Union

4 Administration Board, and, in the case of a State5 chartered depository institution, the appropriate

6 State depository institution regulatory agency.

7 SEC. 7. ADDITIONAL DISCLOSURES BY FDIC, NCUA, AND

8 RTC.

9 (a) BORROWERS.—Not later than 6 months after

10 being appointed receiver or liquidator for any failed insti11 tution that received funds, as defined in section 6, the

12 Federal Deposit Insurance Corporation, National Credit

13 Union Administration, or the Resolution Trust Corpora14 tion, as appropriate, shall make available to the public the

15 name and loan balance of any borrower who—

16 (1) was an executive officer, director, or prin17 cipal shareholder of the institution, or a related in18 terest of any such person, as such terms are defined

19 in section 22(h) of the Federal Reserve Act; and

20 (2) at the time that the receiver was appointed,

21 was more than 90 days delinquent on a loan.

22 (b) TRANSACTIONS.—Not later than 12 months after

23 being appointed receiver or liquidator for any failed insti24 tution that received funds, as defined in section 6, the

25 Federal Deposit Insurance Corporation, the National
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1 Credit Union Administration Board, or the Resolution

2 Trust Corporation shall make available, and update peri3 odically thereafter, a list of pending and settled lawsuits

4 brought by such agency involving transactions (other than

5 those listed in subsection (a)) that caused a material loss

6 to such institution or to the deposit insurance fund.

7 SEC. 8. GAO AUDITS.

8 The Comptroller General shall selectively audit exam9 ination reports made available to the public by the appro10 priate Federal banking agencies under section 2, and dis11 closures made by the Federal Deposit Insurance Corpora12 tion, National Credit Union Administration, and Resolu13 tion Trust Corporation under section 7, to assess compli14 ance with the requirements of those sections. The Comp15 troller General shall determine the nature, scope, terms,

16 and conditions of audits conducted under this section.

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