II 

108TH CONGRESS 

1ST SESSION S. 229

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 

JANUARY 29, 2003

Mr. JOHNSON (for himself, Mr. HAGEL, Mr. REED, Mr. ENZI, Ms. 

STABENOW, and Mr. ALLARD) 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 2003’’. 

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

7 this Act is as follows:
2

•S 229 IS 

Sec. 1. Short title; table of contents. 

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. Credits based on past contributions to Deposit Insurance Fund. 

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

•S 229 IS 

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 2003’’. 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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 term 

7 ‘Deposit Insurance Fund’ means the fund estab8 lished 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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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

•S 229 IS 

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)’’ and 

14 inserting ‘‘ASSOCIATIONS.—Subsections (e)(2)’’; 

15 (B) by redesignating subparagraphs (A), 

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

17 respectively, and moving the margins 2 ems to 

18 the left; and 

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

20 by redesignating clauses (i) and (ii) as subpara21 graphs (A) and (B), respectively, and moving 

22 the margins 2 ems to the left. 
23

•S 229 IS 

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 229 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 229 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 229 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 229 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 229 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 229 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 after the 90-day period beginning on 

5 the date of 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 2003’’. 

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 229 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 229 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 interest 

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—

15 ‘‘(i) until the end of the 270-day pe16 riod beginning on the date of enactment of 

17 the Deposit Insurance Reform Act of 

18 2003, $100,000; and 

19 ‘‘(ii) after the end of the period re20 ferred to in clause (i), $130,000, to be ad21 justed as provided in subparagraph (F). 

22 ‘‘(F) INFLATION ADJUSTMENT.—

23 ‘‘(i) IN GENERAL.—As of July 1, 

24 2005, and as of the 1st day of each 5-year 

25 period thereafter, the standard maximum 
32

•S 229 IS 

1 deposit insurance amount payable to any 

2 depositor at an insured depository institu3 tion shall be increased by the product of—

4 ‘‘(I) $130,000; and 

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

6 Personal Consumption Expenditures 

7 Chain-Type Index (or any successor 

8 index thereto), published by the De9 partment of Commerce, for December 

10 31 of the year preceding the year in 

11 which the adjustment is calculated 

12 under this clause, to the value of such 

13 index for December 31 of the year 

14 preceding the effective date of the In15 surance Funds Merger Act of 2003.

16 ‘‘(ii) LIMITATION ON ADJUST17 MENTS.—If the application of clause (i) 

18 would result in any decrease in the stand19 ard maximum deposit insurance amount in 

20 effect on the date of the adjustment under 

21 clause (i), the standard maximum deposit 

22 insurance amount shall remain unchanged 

23 until the next scheduled 5-year adjustment 

24 that does not result in any such decrease. 
33

•S 229 IS 

1 ‘‘(iii) ROUNDING.—If the amount de2 termined under clause (ii) for any period is 

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

4 determined shall be rounded to the nearest 

5 $10,000. 

6 ‘‘(iv) PUBLICATION.—Not later than 

7 April 1, 2005, and not later than April 1 

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

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

10 of Directors shall publish in the Federal 

11 Register the standard maximum deposit in12 surance amount and the amount of deposit 

13 insurance coverage under paragraph (3)(A) 

14 that may be due to any depositor at an in15 sured depository institution during the ap16 plicable 5-year period.’’. 

17 (2) DEPOSIT INSURANCE FOR RETIREMENT AC18 COUNTS.—Section 11(a)(3)(A) of the Federal De19 posit Insurance Act (12 U.S.C. 1821(a)(3)(A)) is 

20 amended—

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

22 ‘‘$250,000’’; and 

23 (B) by inserting before the period at the 

24 end the following: ‘‘which amount shall be sub25 ject to inflation adjustments in the same man-
34

•S 229 IS 

1 ner as under paragraph (1)(F) with respect to 

2 the standard maximum deposit insurance 

3 amount, except that ‘$250,000’ shall be sub4 stituted for the amount specified in clause (i) of 

5 paragraph (1)(F) for purposes of this subpara6 graph’’. 

7 (3) DEPOSIT INSURANCE FOR MUNICIPAL DE8 POSITS.—Section 11(a)(2) of the Federal Deposit 

9 Insurance Act (12 U.S.C. 1821(a)(2)) is amended—

10 (A) in subparagraph (A)—

11 (i) in the matter following clause (v), 

12 by striking ‘‘shall be insured in an 

13 amount’’ and all that follows through the 

14 period; and 

15 (ii) by striking the semicolon at the 

16 end of clause (v) and inserting a period; 

17 (B) by striking ‘‘(2)(A) Notwithstanding’’ 

18 and all that follows through ‘‘a depositor who 

19 is—’’ and inserting the following: 

20 ‘‘(2) MUNICIPAL DEPOSITORS.—

21 ‘‘(A) IN GENERAL.—Notwithstanding any 

22 limitation in this Act or in any other provision 

23 of law relating to the amount of deposit insur24 ance available to any one depositor—
35

•S 229 IS 

1 ‘‘(i) a municipal depositor in a custo2 dial capacity referred to in any of clauses 

3 (ii) through (v) of subparagraph (C) shall, 

4 for the purpose of determining the amount 

5 of insured deposits under this subsection, 

6 be deemed to be a depositor in such custo7 dial capacity separate and distinct from 

8 any other officer, employee, or agent of the 

9 United States or any public unit referred 

10 to in any of those clauses (ii) through (v) 

11 of subparagraph (C); and 

12 ‘‘(ii) the deposits of a municipal de13 positor shall be insured—

14 ‘‘(I) in an amount equal to the 

15 standard maximum deposit insurance 

16 amount (as determined under para17 graph (1)); or 

18 ‘‘(II) only in the case of an in19 State municipal depositor, in an 

20 amount equal to the lesser of—

21 ‘‘(aa) $5,000,000; or 

22 ‘‘(bb) the sum of the stand23 ard maximum deposit insurance 

24 amount and 80 percent of the 

25 amount of any deposits in excess
36

•S 229 IS 

1 of the standard maximum deposit 

2 insurance amount. 

3 ‘‘(B) IN-STATE.—In this paragraph, a mu4 nicipal depositor is an ‘in-State municipal de5 positor’ if the depositor is located in the same 

6 State as the office or branch of the insured de7 pository institution at which the deposits of 

8 that depositor are held. 

9 ‘‘(C) MUNICIPAL DEPOSITOR.—In this 

10 paragraph, the term ‘municipal depositor’ 

11 means a depositor that is—’’; 

12 (C) by striking ‘‘(B) The’’ and inserting 

13 the following: 

14 ‘‘(D) AUTHORITY TO LIMIT DEPOSITS.—

15 The’’; and 

16 (D) by striking ‘‘depositor referred to in 

17 subparagraph (A) of this paragraph’’ each place 

18 that term appears and inserting ‘‘municipal de19 positor’’. 

20 (4) TECHNICAL AND CONFORMING AMENDMENT

21 RELATING TO INSURANCE OF TRUST FUNDS.—Sec22 tion 7(i) of the Federal Deposit Insurance Act (12 

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

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

25 appears and inserting ‘‘the standard maximum de-
37

•S 229 IS 

1 posit insurance amount (as determined under section 

2 11(a)(1))’’. 

3 (5) OTHER TECHNICAL AND CONFORMING

4 AMENDMENTS.—The Federal Deposit Insurance Act 

5 (12 U.S.C. 1811 et seq.) is amended—

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

7 1821(m)(6)), by striking ‘‘$100,000’’ and in8 serting ‘‘an amount equal to the standard max9 imum deposit insurance amount (as determined 

10 under subsection (a)(1))’’; 

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

12 striking subsection (a) and inserting the fol13 lowing: 

14 ‘‘(a) INSURANCE LOGO.—

15 ‘‘(1) INSURED DEPOSITORY INSTITUTIONS.—

16 Each insured depository institution shall display at 

17 each place of business maintained by that institution

18 a sign or signs relating to the insurance of the de19 posits of the institution, in accordance with regula20 tions to be prescribed by the Corporation. 

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

22 prescribe regulations to carry out this subsection, in23 cluding regulations governing the substance of signs 

24 required by paragraph (1) and the manner of dis25 play or use of such signs. 
38

•S 229 IS 

1 ‘‘(3) PENALTIES.—For each day that an in2 sured depository institution continues to violate this 

3 subsection or any regulation issued under this sub4 section, it shall be subject to a penalty of not more 

5 than $100, which the Corporation may recover for 

6 its use.’’; and 

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

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

9 amount equal to the standard maximum deposit 

10 insurance amount (as determined under section 

11 11(a)(1))’’. 

12 (b) INSURED CREDIT UNIONS.—

13 (1) IN GENERAL.—Section 207(k) of the Fed14 eral Credit Union Act (12 U.S.C. 1787(k)) is 

15 amended—

16 (A) by striking ‘‘(k)(1)’’ and all that fol17 lows through the end of paragraph (1) and in18 serting the following: 

19 ‘‘(k) INSURED AMOUNTS PAYABLE.—

20 ‘‘(1) NET INSURED AMOUNT.—

21 ‘‘(A) IN GENERAL.—Subject to the provi22 sions of paragraph (2), the net amount of share 

23 insurance payable to any member at an insured 

24 credit union shall not exceed the total amount 

25 of the shares or deposits in the name of the 
39

•S 229 IS 

1 member (after deducting offsets), less any part 

2 thereof which is in excess of the standard max3 imum share insurance amount, as determined 

4 in accordance with this paragraph and para5 graphs (5) and (6), and consistent with actions 

6 taken by the Federal Deposit Insurance Cor7 poration under section 11(a) of the Federal De8 posit Insurance Act. 

9 ‘‘(B) AGGREGATION.—Determination of 

10 the net amount of share insurance under sub11 paragraph (A), shall be in accordance with such 

12 regulations as the Board may prescribe, and, in 

13 determining the amount payable to any mem14 ber, there shall be added together all accounts 

15 in the credit union maintained by that member 

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

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

18 ‘‘(C) AUTHORITY TO DEFINE THE EXTENT

19 OF COVERAGE.—The Board may define, with 

20 such classifications and exceptions as it may 

21 prescribe, the extent of the share insurance cov22 erage provided for member accounts, including 

23 member accounts in the name of a minor, in 

24 trust, or in joint tenancy.’’; 

25 (B) in paragraph (2)—
40

•S 229 IS 

1 (i) in subparagraph (A)—

2 (I) in clauses (i) through (v), by 

3 moving the margins 4 ems to the left; 

4 (II) in the matter following 

5 clause (v), by striking ‘‘his account’’ 

6 and all that follows through the pe7 riod; and 

8 (III) by striking the semicolon at 

9 the end of clause (v) and inserting a 

10 period; 

11 (ii) by striking ‘‘(2)(A) Notwith12 standing’’ and all that follows through ‘‘a 

13 depositor or member who is—’’ and insert14 ing the following: 

15 ‘‘(2) MUNICIPAL DEPOSITORS OR MEMBERS.—

16 ‘‘(A) IN GENERAL.—Notwithstanding any 

17 limitation in this Act or in any other provision 

18 of law relating to the amount of insurance 

19 available to any one depositor or member, de20 posits or shares of a municipal depositor or 

21 member shall be insured—

22 ‘‘(i) in an amount equal to the stand23 ard maximum share insurance amount (as 

24 determined under paragraph (5)); or
41

•S 229 IS 

1 ‘‘(ii) only in the case of an in-State 

2 municipal depositor or member, in an 

3 amount equal to the lesser of—

4 ‘‘(I) $5,000,000; or 

5 ‘‘(II) the sum of the standard 

6 maximum share insurance amount 

7 and 80 percent of the amount of any 

8 deposits or shares in excess of the 

9 standard maximum share insurance 

10 amount. 

11 ‘‘(B) IN-STATE.—In this paragraph, a mu12 nicipal depositor or member is an ‘in-State mu13 nicipal depositor or member’ if the depositor or 

14 member is located in the same State as the of15 fice or branch of the insured credit union at 

16 which the deposits or shares of that depositor 

17 or member are held. 

18 ‘‘(C) MUNICIPAL DEPOSITOR OR MEM19 BER—In this paragraph, the term ‘municipal 

20 depositor or member’ means a depositor or 

21 member that is—’’; 

22 (iii) by striking ‘‘(B) The’’ and insert23 ing the following: 

24 ‘‘(D) AUTHORITY TO LIMIT DEPOSITS.—

25 The’’; and 
42

•S 229 IS 

1 (iv) by striking ‘‘depositor or member 

2 referred to in subparagraph (A)’’ and in3 serting ‘‘municipal depositor or member’’; 

4 (C) by adding at the end the following: 

5 ‘‘(4) COVERAGE FOR CERTAIN EMPLOYEE BEN6 EFIT PLAN DEPOSITS.—

7 ‘‘(A) PASS-THROUGH INSURANCE.—The 

8 Administration shall provide pass-through share 

9 insurance for the deposits or shares of any em10 ployee benefit plan, subject to subparagraph 

11 (B). 

12 ‘‘(B) PROHIBITION ON ACCEPTANCE OF

13 DEPOSITS.—An insured credit union that is not 

14 well capitalized or adequately capitalized may 

15 not accept employee benefit plan deposits.

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

17 paragraph, the following definitions shall apply: 

18 ‘‘(i) CAPITAL STANDARDS.—The 

19 terms ‘well capitalized’ and ‘adequately 

20 capitalized’ have the same meanings as in 

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

22 the Credit Union Membership Access Act 

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

24 ‘‘(ii) EMPLOYEE BENEFIT PLAN.—

25 The term ‘employee benefit plan’—
43

•S 229 IS 

1 ‘‘(I) has the meaning given to 

2 such term in section 3(3) of the Em3 ployee Retirement Income Security 

4 Act of 1974; 

5 ‘‘(II) includes any plan described 

6 in section 401(d) of the Internal Rev7 enue Code of 1986; and 

8 ‘‘(III) includes any eligible de9 ferred compensation plan described in 

10 section 457 of the Internal Revenue 

11 Code of 1986. 

12 ‘‘(iii) PASS-THROUGH SHARE INSUR13 ANCE.—The term ‘pass-through share in14 surance’ means, with respect to an em15 ployee benefit plan, insurance coverage 

16 provided on a pro rata basis to the partici17 pants in the plan, in accordance with the 

18 interest of each participant. 

19 ‘‘(5) STANDARD MAXIMUM SHARE INSURANCE

20 AMOUNT DEFINED.—For purposes of this sub21 section, the term ‘standard maximum share insur22 ance amount’ means—

23 ‘‘(A) until the end of the 270-day period 

24 beginning on the date of enactment of the De-
44

•S 229 IS 

1 posit Insurance Reform Act of 2003, $100,000; 

2 and 

3 ‘‘(B) after the end of the period referred to 

4 in subparagraph (A), $130,000, adjusted as 

5 provided in paragraph (6). 

6 ‘‘(6) INFLATION ADJUSTMENT.—

7 ‘‘(A) IN GENERAL.—As of January 1, 

8 2005, and as of the 1st day of each subsequent 

9 5-year period, the standard maximum share in10 surance amount payable to any member of an 

11 insured credit union shall be increased by the 

12 product of—

13 ‘‘(i) $130,000; and 

14 ‘‘(ii) the ratio of the value of the Per15 sonal Consumption Expenditures Chain16 Type Index (or any successor index there17 to), published by the Department of Com18 merce, as in effect on the date of the ad19 justment under this clause. 

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

21 the application of subparagraph (A) would re22 sult in any decrease in the standard maximum 

23 share insurance amount in effect on the date of 

24 the adjustment under clause (i), the standard 

25 maximum share insurance amount shall remain 
45

•S 229 IS 

1 unchanged until the next scheduled 5-year ad2 justment that does not result in any such de3 crease. 

4 ‘‘(C) ROUNDING.—If the amount deter5 mined under subparagraph (B) for any period 

6 is not a multiple of $10,000, the amount so de7 termined shall be rounded to the nearest 

8 $10,000. 

9 ‘‘(D) PUBLICATION.—Not later than Janu10 ary 31 of the 1st year of each 5-year period re11 ferred to in subparagraph (A), the Board shall 

12 publish in the Federal Register the standard 

13 maximum share insurance amount and the 

14 amount of share insurance coverage under 

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

16 at an insured credit union during that 5-year 

17 period.’’; and 

18 (D) in paragraph (3), by striking 

19 ‘‘$100,000 per account’’ and inserting the fol20 lowing: ‘‘$250,000 per account, which amount 

21 shall be subject to inflation adjustments in the 

22 same manner as under paragraph (6) with re23 spect to the standard maximum share insurance 

24 amount (as determined under paragraph (5), 

25 except that ‘$250,000’ shall be substituted for 
46

•S 229 IS 

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

2 purposes of this paragraph).’’. 

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

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

5 1782(h)) is amended by striking ‘‘207(c)(1)’’ and in6 serting ‘‘207(k)’’. 

7 (c) EFFECTIVE DATE.—This section and the amend8 ments made by this section shall become effective on the 

9 effective date of the regulations required under section 

10 205(a)(2), relating to the implementation of deposit insur11 ance increases under this section. 

12 SEC. 203. DESIGNATED RESERVE RATIO. 

13 (a) IN GENERAL.—

14 (1) AMENDMENT TO SECTION 7.—Section 

15 7(b)(3) of the Federal Deposit Insurance Act (12 

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

17 ‘‘(3) DESIGNATED RESERVE RATIO.—

18 ‘‘(A) ACTION BY THE BOARD.—

19 ‘‘(i) IN GENERAL.—Before the begin20 ning of each calendar year, the Board of 

21 Directors shall, subject to clause (ii)—

22 ‘‘(I) designate the reserve ratio 

23 applicable to the Deposit Insurance 

24 Fund for that year; and
47

•S 229 IS 

1 ‘‘(II) publish the reserve ratio so 

2 designated. 

3 ‘‘(ii) RULEMAKING.—Any change to 

4 the designated reserve ratio for any cal5 endar year shall be made pursuant to sec6 tion 553 of title 5, United States Code. 

7 ‘‘(B) RANGE.—The reserve ratio des8 ignated by the Board of Directors for any 

9 year—

10 ‘‘(i) may not exceed 1.5 percent of ag11 gregate estimated insured deposits; and 

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

13 of aggregate estimated insured deposits.

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

15 ratio for any year, the Board of Directors 

16 shall—

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

18 losses to the Deposit Insurance Fund in 

19 that year and in future years; 

20 ‘‘(ii) take into account economic con21 ditions generally affecting insured deposi22 tory institutions, to provide for an increase 

23 in the designated reserve ratio during more 

24 favorable economic conditions and to pro25 vide for a decrease in the designated re-
48

•S 229 IS 

1 serve ratio during less favorable economic 

2 conditions, notwithstanding the increased 

3 risks of loss that may exist during such 

4 less favorable conditions, as determined to 

5 be appropriate by the Board; 

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

7 the assessment rates for insured depository 

8 institutions; and 

9 ‘‘(iv) take into account such other fac10 tors as the Board of Directors may deter11 mine to be appropriate, consistent with the 

12 requirements of this subparagraph.’’. 

13 (2) TECHNICAL AND CONFORMING AMEND14 MENTS.—Section 3(y) of the Federal Deposit Insur15 ance Act (12 U.S.C. 1813) (as amended by this Act) 

16 is amended by adding at the end the following: 

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

18 means the ratio of the fund balance of the Deposit 

19 Insurance Fund to aggregate estimated insured de20 posits held in all insured depository institutions. 

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

22 ‘designated reserve ratio’ means the reserve ratio 

23 designated by the Board of Directors under section 

24 7(b)(3).’’. 
49

•S 229 IS 

1 (3) EFFECTIVE DATE.—Subject to paragraph 

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

3 this subsection shall become effective on the effective 

4 date of the regulations required under section 

5 205(a)(1), relating to designation of the reserve 

6 ratio by the Board. 

7 (4) DESIGNATION OF INITIAL RESERVE RATIO

8 FOR DEPOSIT INSURANCE FUND.—During the period 

9 beginning on the effective date of the merger of the 

10 deposit insurance funds under section 102, and end11 ing on the effective date of final regulations desig12 nating the reserve ratio, as required by section 

13 205(a)(1), the designated reserve ratio of the De14 posit Insurance Fund shall continue to be deter15 mined pursuant to section 7(b)(2)(A)(iv), as in ef16 fect on the day before the effective date of the merg17 er under section 102. 

18 (b) REQUIREMENTS APPLICABLE TO ANY MODIFICA19 TION OF THE RISK-BASED ASSESSMENT SYSTEM.—Sec20 tion 7(b)(1) of the Federal Deposit Insurance Act (12 

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

22 following: 

23 ‘‘(E) REQUIREMENTS APPLICABLE TO ANY

24 MODIFICATION OF THE RISK-BASED ASSESS25 MENT SYSTEM.—
50

•S 229 IS 

1 ‘‘(i) IN GENERAL.—In revising or 

2 modifying the risk-based assessment sys3 tem at any time after the date of enact4 ment of the Deposit Insurance Reform Act 

5 of 2003, the Board of Directors—

6 ‘‘(I) may not make any change to 

7 the information collected from or re8 quired to be retained by insured de9 pository institutions solely for pur10 poses of the assessment risk classifica11 tion, as defined by regulations of the 

12 Board, if the change would result in 

13 the imposition of an overall greater 

14 regulatory or reporting burden on in15 sured depository institutions than was 

16 the case before that date of enact17 ment; and 

18 ‘‘(II) may implement any such 

19 revision or modification in final form 

20 only after notice and opportunity for 

21 comment. 

22 ‘‘(ii) RULE OF CONSTRUCTION.—An 

23 increase in an assessment rate or a revi24 sion of the assessment base shall not be 

25 considered to be a revision or modification 
51

•S 229 IS 

1 resulting in greater regulatory or reporting 

2 burden for purposes of this subpara3 graph.’’. 

4 SEC. 204. CREDITS BASED ON PAST CONTRIBUTIONS TO DE5 POSIT INSURANCE FUND. 

6 (a) IN GENERAL.—Section 7(e) of the Federal De7 posit Insurance Act (12 U.S.C. 1817(e)) is amended to 

8 read as follows: 

9 ‘‘(e) REFUNDS AND CREDITS.—

10 ‘‘(1) REFUNDS OF OVERPAYMENTS.—In the 

11 case of any payment of an assessment by an insured 

12 depository institution in excess of the amount due to 

13 the Corporation, the Corporation may—

14 ‘‘(A) refund the amount of the excess pay15 ment to the insured depository institution; or 

16 ‘‘(B) credit such excess amount toward the 

17 payment of subsequent semiannual assessments 

18 until such credit is exhausted. 

19 ‘‘(2) ONE-TIME CREDIT BASED ON TOTAL AS20 SESSMENT BASE AT YEAR-END 1996.—

21 ‘‘(A) IN GENERAL.—The Board of Direc22 tors shall, by regulation, provide for a credit to 

23 each insured depository institution that was in 

24 existence on December 31, 1996, and that had 

25 paid a deposit insurance assessment prior to
52

•S 229 IS 

1 that date (or a successor insured depository in2 stitution), based on the assessment base of the 

3 institution on that date, as compared to the 

4 combined aggregate assessment base of all such 

5 institutions, taking into account such factors as 

6 the Board may determine to be appropriate. 

7 ‘‘(B) CREDIT LIMIT.—The aggregate 

8 amount of credits available under subparagraph 

9 (A) to all insured depository institutions that 

10 are eligible for the credit shall not exceed the 

11 amount that the Corporation could collect if it 

12 imposed an assessment of 9 basis points on the 

13 combined assessment base of the Bank Insur14 ance Fund and the Savings Association Insur15 ance Fund as of December 31, 2001. 

16 ‘‘(C) APPLICATION OF CREDITS.—The 

17 amount of a credit to any insured depository in18 stitution under this paragraph may be applied 

19 by the Corporation to those portions of the as20 sessments under subsection (b) applicable to 

21 that institution which become due for assess22 ment periods beginning after the effective date 

23 of regulations required by subparagraph (A). 

24 ‘‘(D) CHALLENGES TO CREDIT

25 AMOUNTS.—The regulations required by sub-
53

•S 229 IS 

1 paragraph (A) shall include provisions allowing 

2 an insured depository institution a reasonable 

3 opportunity to challenge administratively the 

4 amount of its credit under this paragraph. The 

5 determination of the Corporation of the amount 

6 of the credit following such challenge shall be 

7 final, and not subject to judicial review. 

8 ‘‘(3) ASSESSMENT CREDITS.—

9 ‘‘(A) AUTHORITY.—The Board of Direc10 tors shall, by regulation, establish the qualifica11 tions and procedures under which the Corpora12 tion would apply assessment credits for the as13 sessment periods beginning on or after the first 

14 assessment period to which a credit under para15 graph (2) applies. 

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

17 determining whether to provide assessment 

18 credits under this paragraph and in what 

19 amounts, the Board of Directors shall take into 

20 account the factors for setting assessments 

21 under subsection (b)(2) and the factors for des22 ignating the reserve ratio under subsection 

23 (b)(3). 

24 ‘‘(C) CASH PAYMENTS.—The Corporation 

25 may, in its sole discretion, elect to provide cash 
54

•S 229 IS 

1 payments in lieu of assessment credits under 

2 this paragraph, but only if the reserve ratio of 

3 the Deposit Insurance Fund would remain at 

4 more than 1.5 percent of aggregate estimated 

5 insured deposits after any such payment.’’. 

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

7 this section shall become effective on the effective date of 

8 the regulations required to be issued under section 

9 205(a)(3), relating to implementation of the one-time as10 sessment credit. 

11 SEC. 205. REGULATIONS REQUIRED. 

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

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

14 regulations, in accordance with section 553 of chapter 5 

15 of title 5, United States Code—

16 (1) designating the reserve ratio for the Deposit 

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

18 of the Federal Deposit Insurance Act, as amended 

19 by section 203 of this Act, which regulations shall 

20 become effective not later than 90 days after the 

21 date of their publication in final form; 

22 (2) implementing increases in deposit insurance 

23 coverage in accordance with the amendments made 

24 by section 202, which regulations shall become effec-
55

•S 229 IS 

1 tive not later than 90 days after the date of their 

2 publication in final form; 

3 (3) implementing the one-time assessment cred4 it to certain insured depository institutions in ac5 cordance with section 7(e)(2) of the Federal Deposit 

6 Insurance Act, as amended by section 204 of this 

7 Act; 

8 (4) establishing the qualifications and proce9 dures under which the Corporation would apply as10 sessment credits, as required by section 7(e)(3) of 

11 the Federal Deposit Insurance Act, as amended by 

12 section 204 of this Act; and 

13 (5) providing for assessments under section 7 of 

14 the Federal Deposit Insurance Act, as amended by

15 this Act, which regulations shall become effective on 

16 the effective date of the regulations required by 

17 paragraph (3). 

18 (b) SAVINGS CLAUSE.—

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

20 amendments made by this Act shall be construed to 

21 affect the authority of the Corporation with regard 

22 to the setting or collection of deposit insurance as23 sessments prior to the effective date of any regula24 tions required under subsection (a). 
56

•S 229 IS 

1 (2) PRESERVATION OF MINIMUM ASSESSMENT

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

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

4 1817(b)(2)), as in effect on the day before the effec5 tive date of title I of this Act, shall continue to apply 

6 with respect to deposit insurance assessments im7 posed prior to the effective date of the regulations 

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

9 SEC. 206. STUDIES OF POTENTIAL CHANGES TO THE FED10 ERAL DEPOSIT INSURANCE SYSTEM. 

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

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

13 Federal Deposit Insurance Corporation and the Na14 tional Credit Union Administration Board shall each 

15 conduct a study of—

16 (A) the feasibility of increasing the limit 

17 on deposit insurance for deposits of municipali18 ties and other units of general local govern19 ment, and the potential benefits and the poten20 tial adverse consequences that may result from 

21 any such increase; and 

22 (B) the feasibility of establishing a vol23 untary deposit insurance system for deposits in 

24 excess of the maximum amount of deposit in25 surance for any depositor, and the potential 
57

•S 229 IS 

1 benefits and the potential adverse consequences 

2 that may result from the establishment of any 

3 such system. 

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

5 date of enactment of this Act, the Board of Direc6 tors of the Federal Deposit Insurance Corporation 

7 and the National Credit Union Administration 

8 Board shall each submit a report to the Congress on 

9 the study required under paragraph (1), containing 

10 the findings and conclusions of the reporting agency, 

11 together with such recommendations for legislative 

12 or administrative changes as the agency may deter13 mine to be appropriate. 

14 (b) STUDY AND REPORT REGARDING APPROPRIATE

15 RESERVE RATIO.—

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

17 study on the feasibility of using actual deposits rath18 er than estimated insured deposits in calculating the 

19 reserve ratio of the Deposit Insurance Fund. 

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

21 date of enactment of this Act, the Board shall sub22 mit a report to Congress on the results of the study 

23 required under paragraph (1), together with such 

24 recommendations for legislative or administrative ac25 tions as may be determined to be appropriate. 
58

•S 229 IS 

1 SEC. 207. EFFECTIVE DATE. 

2 Except as otherwise specifically provided in this title, 

3 this title and the amendments made by this title shall be4 come effective on the date of enactment of this Act.

Æ