II

103D CONGRESS

1ST SESSION S. 1419

To provide for regional equity in funding the resolution of failed savings

associations, and for other purposes.

IN THE SENATE OF THE UNITED STATES

AUGUST 6 (legislative day, JUNE 30), 1993

Mr. GRASSLEY introduced the following bill; which was read twice and referred

to the Committee on Banking, Housing, and Urban Affairs

A BILL

To provide for regional equity in funding the resolution of

failed savings associations, 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. AMENDMENT TO FEDERAL HOME LOAN BANK

4 ACT.

5 Section 21A of the Federal Home Loan Bank Act

6 (12 U.S.C. 1441a) is amended by adding at the end the

7 following new subsection:

8 ‘‘(w) STATE CONTRIBUTIONS.—

9 ‘‘(1) CUMULATIVE DETERMINATIONS OF STATE

10 RESOLUTION COSTS.—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraph (B), not later than 90 days after

3 the end of each calendar year beginning with

4 calendar year 1993, the Corporation shall de5 termine the aggregate of the amounts expended

6 during the period beginning on January 1,

7 1989, and ending at the end of each such cal8 endar year, in providing assistance for case res9 olutions and other assistance with respect to all

10 institutions that were State savings associations

11 on or after January 1, 1989, and—

12 ‘‘(i) were then insured by the Federal

13 Savings and Loan Insurance Corporation;

14 or

15 ‘‘(ii) are members of the Savings As16 sociation Insurance Fund.

17 ‘‘(B) CALENDAR YEAR 1993.—The Cor18 poration shall make the determination described

19 in subparagraph (A) with respect to amounts

20 expended during calendar year 1993 on the

21 later of the date which is 90 days after the end

22 of such calendar year, or the date of the enact23 ment of this subsection.

24 ‘‘(C) EXPENDITURES BY ANY FDIC, FSLIC

25 RESOLUTION FUND, AND OTHER APPLICABLE
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1 AGENCIES TAKEN INTO ACCOUNT.—In making

2 the determination under subparagraph (A) of

3 the amount of assistance for case resolutions

4 and other assistance with respect to institutions

5 described in such subparagraph, assistance pro6 vided by the Federal Savings and Loan Insur7 ance Corporation, the FSLIC Resolution Fund,

8 the Federal Deposit Insurance Corporation, the

9 Federal Home Loan Bank Board, any Federal

10 home loan bank, and any other appropriate

11 Federal agency shall be taken into account by

12 the Corporation.

13 ‘‘(2) CUMULATIVE APPORTIONMENTS OF STATE

14 RESOLUTION COSTS AMONG THE STATES.—After de15 termining the amount for a period under paragraph

16 (1), the Corporation shall apportion that amount

17 among the States according to the amounts ex18 pended during such period in providing assistance

19 for case resolutions and other assistance with re20 spect to all institutions described in paragraph (1)

21 located in each respective State.

22 ‘‘(3) CONTRIBUTIONS REQUIRED FROM HIGH

23 RISK STATES.—Each high risk State shall pay the

24 Corporation an amount equal to—

25 ‘‘(A) the product of—
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1 ‘‘(i) the current State percentage

2 share of State resolution costs, minus 2

3 times the State percentage share of 1980

4 State deposits; and

5 ‘‘(ii) 25 percent of the aggregate

6 amount currently determined by the Cor7 poration under paragraph (1); minus

8 ‘‘(B) the aggregate of the amounts pre9 viously paid by the State under this paragraph,

10 minus the aggregate of the rebates (if any) paid

11 to the State under paragraph (8).

12 ‘‘(4) HIGH RISK STATES.—A State is a high

13 risk State for purposes of this subsection if—

14 ‘‘(A) the current State percentage share of

15 State resolution costs; exceeds

16 ‘‘(B) 2 times the State percentage share of

17 1980 State deposits.

18 ‘‘(5) CURRENT STATE PERCENTAGE SHARE OF

19 STATE RESOLUTION COSTS.—For purposes of this

20 subsection, the term ‘current State percentage share

21 of State resolution costs’ means—

22 ‘‘(A) the amount apportioned to the State

23 under paragraph (2) based on the determina24 tion made under paragraph (1) for the period

25 beginning on January 1, 1989, and ending at
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1 the end of the most recent calendar year; di2 vided by

3 ‘‘(B) the amount determined under para4 graph (1) with respect to the State for the pe5 riod beginning on January 1, 1989, and ending

6 at the end of the most recent calendar year.

7 ‘‘(6) STATE PERCENTAGE SHARE OF 1980

8 STATE DEPOSITS.—For purposes of this subsection,

9 the term ‘State percentage share of 1980 State de10 posits’ means—

11 ‘‘(A) the amount of deposits in 1980 in in12 stitutions described in paragraph (1) located in

13 the State; divided by

14 ‘‘(B) the total deposits in 1980 in all insti15 tutions described in paragraph (1).

16 ‘‘(7) CONTRIBUTION PAYMENT TERMS.—

17 ‘‘(A) IN GENERAL.—Except as provided in

18 subparagraph (B), the contribution currently

19 required of any State under paragraph (3) shall

20 be due at the end of the 6-month period begin21 ning on the date the Corporation makes its cur22 rent apportionment to the State under para23 graph (2).

24 ‘‘(B) MULTIYEAR AGREEMENTS.—If the

25 contribution currently required of any State
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1 under paragraph (3) exceeds $1,000,000,000,

2 such State may enter into an agreement with

3 the Corporation to pay such amount, with inter4 est accruing in accordance with section 3717(a)

5 of title 31, United States Code, over the 4-year

6 period beginning on the date on which such

7 contribution would otherwise be due under sub8 paragraph (A), and such State shall be treated

9 as meeting the requirements of this subsection

10 so long as such State is in compliance with the

11 terms of such agreement.

12 ‘‘(8) CONTRIBUTION REBATES.—If, with re13 spect to a State, the result of the calculation de14 scribed in paragraph (3)(B) exceeds the result of the

15 calculation described in paragraph (3)(A), the Cor16 poration shall rebate such excess amount to the

17 State, with interest accruing in accordance with sec18 tion 3717(a) of title 31, United States Code.

19 ‘‘(9) TERMINATION OF INSURANCE IF STATE

20 FAILS TO PAY REQUIRED CONTRIBUTIONS.—

21 ‘‘(A) IN GENERAL.—If any State fails to

22 pay the contribution required of such State

23 under paragraph (3)—
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1 ‘‘(i) the Corporation shall notify the

2 Federal Deposit Insurance Corporation of

3 such failure; and

4 ‘‘(ii) the Federal Deposit Insurance

5 Corporation shall terminate, subject to

6 paragraphs (2)(B) and (6) of section 8(a)

7 of the Federal Deposit Insurance Act, the

8 deposit insurance for State depository in9 stitutions (as defined in section 3(c)(5) of

10 the Federal Deposit Insurance Act) located

11 in such State at the end of the 6-month

12 period beginning on the date the contribu13 tion was due under paragraph (7).

14 ‘‘(B) TRANSITION.—The insured deposits

15 of each depositor at any State depository insti16 tution the insured status of which is terminated

17 pursuant to subparagraph (A) shall continue to

18 be insured on a temporary basis in the manner

19 provided in section 8(a)(7) of the Federal De20 posit Insurance Act.

21 ‘‘(10) RESTORATION OF INSURANCE.—Para22 graph (9) shall cease to apply with respect to State

23 depository institutions located in any State described

24 in such paragraph after the date on which the Cor25 poration notifies the Federal Deposit Insurance Cor-
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1 poration that such State has paid all of the contribu2 tions required of the State under this subsection, to3 gether with any interest accrued on such amount in

4 accordance with section 3717(a) of title 31, United

5 States Code.’’.

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