II

106TH CONGRESS

2D SESSION S. 2293

To amend the Federal Deposit Insurance Act and the Federal Home Loan

Bank Act to provide for the payment of Financing Corporation interest

obligations from balances in the deposit insurance funds in excess of

an established ratio and, after such obligations are satisfied, to provide

for rebates to insured depository institutions of such excess reserves.

IN THE SENATE OF THE UNITED STATES

MARCH 27, 2000

Mr. SANTORUM (for himself, Mr. EDWARDS, Mr. HELMS, Mr. MURKOWSKI,

and Mrs. HUTCHISON) introduced the following bill; which was read twice

and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To amend the Federal Deposit Insurance Act and the Federal Home Loan Bank Act to provide for the payment

of Financing Corporation interest obligations from balances in the deposit insurance funds in excess of an

established ratio and, after such obligations are satisfied,

to provide for rebates to insured depository institutions

of such excess reserves.

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

2 This Act may be cited as the ‘‘Deposit Insurance

3 Fairness and Economic Opportunity Act’’.

4 SEC. 2. USE OF EXCESS DEPOSIT FUND RESERVES TO PAY

5 FICO INTEREST OBLIGATIONS AND MAKE RE6 BATES.

7 (a) IN GENERAL.—Section 7(b)(2) of the Federal

8 Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended

9 by inserting after subparagraph (C) the following:

10 ‘‘(D) USE OF EXCESS DEPOSIT INSURANCE

11 FUNDS INITIALLY TO PAY FICO INTEREST OBLI12 GATIONS AND THEN FOR OTHER PURPOSES.—

13 Notwithstanding subsection (e)(2), beginning

14 January 1, 2001, and annually thereafter, if

15 the funds in both the Bank Insurance Fund

16 and the Savings Association Insurance Fund,

17 respectively, exceed 1.40 percent of the total es18 timated deposits insured by each of the respec19 tive Funds (or such higher percentage as may

20 have been established as the designated reserve

21 ratio for the respective Fund pursuant to sub22 paragraph (A)(iv)(II)), the Board of Directors

23 shall transfer such excess amounts as follows:

24 ‘‘(i) YEARS 2001 THROUGH 2017.—In

25 years 2001 through 2017, to the Financ26 ing Corporation in such amount as is nec-
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1 essary to pay, for such year, the interest

2 payments, issuance costs, and custodial

3 fees described in section 21(f) of the Fed4 eral Home Loan Bank Act with regard to

5 obligations issued by the Financing Cor6 poration.

7 ‘‘(ii) YEARS AFTER 2017.—In years

8 beginning after December 31, 2017—

9 ‘‘(I) to the Financing Corpora10 tion for the purposes described in

11 clause (i); and

12 ‘‘(II) if the amount required to

13 be transferred under this subpara14 graph exceeds the amount required by

15 the Financing Corporation for the

16 purposes described in clause (i), to in17 sured depository institutions, the allo18 cation of which is to be made on such

19 basis as the Board of Directors deter20 mines to be appropriate, taking into

21 account the factors considered under

22 the risk-based assessment system, ex23 cept that no amount may be paid

24 under this subclause to any insured
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1 depository institution described in

2 subparagraph (A)(v).’’.

3 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

4 (1) FEDERAL HOME LOAN BANK ACT.—Section

5 21(f) of the Federal Home Loan Bank Act (12

6 U.S.C. 1441) is amended—

7 (A) by redesignating paragraphs (2) and

8 (3) as paragraphs (3) and (4), respectively;

9 (B) by inserting after paragraph (1) the

10 following:

11 ‘‘(2) EXCESS DEPOSIT INSURANCE FUND BAL12 ANCES.—In addition to the amounts obtained pursu13 ant to paragraph (1), the Financing Corporation

14 shall have available the amounts transferred by the

15 Board of Directors of the Federal Deposit Insurance

16 Corporation pursuant to section 7(b)(2)(D) of the

17 Federal Deposit Insurance Act.’’;

18 (C) in paragraph (3) (as redesignated), by

19 striking ‘‘In addition to the amounts obtained

20 pursuant to paragraph (1),’’ and inserting ‘‘To

21 the extent that the amounts available under

22 paragraphs (1) and (2) are insufficient to cover

23 the amount of interest payments, issuance

24 costs, and custodial fees,’’; and
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1 (D) in paragraph (4) (as redesignated), by

2 striking ‘‘(1) and (2)’’ and inserting ‘‘(1), (2),

3 and (3)’’.

4 (2) DEPOSIT INSURANCE FUNDS ACT OF 1996.—

5 Section 2703(c)(2) of the Deposit Insurance Funds

6 Act of 1996 (12 U.S.C. 1441 note) is amended—

7 (A) by striking ‘‘21(f)(2)’’ and inserting

8 ‘‘21(f)(3)’’; and

9 (B) by inserting ‘‘and redesignated by sec10 tion 2(b)(1)(A) of the Deposit Insurance Fair11 ness and Economic Opportunity Act’’ after ‘‘as

12 amended by subsection (a)’’.

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