IIB 

108TH CONGRESS 

1ST SESSION H. R. 522

IN THE SENATE OF THE UNITED STATES 

APRIL 3, 2003

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT

To reform 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,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Federal Deposit Insurance Reform Act of 2003’’. 

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

5 this Act is as follows:

Sec. 1. Short title; table of contents. 

Sec. 2. Merging the BIF and SAIF. 

Sec. 3. Increase in deposit insurance coverage. 

Sec. 4. Setting assessments and repeal of special rules relating to minimum 

assessments and free deposit insurance. 

Sec. 5. Replacement of fixed designated reserve ratio with reserve range. 

Sec. 6. Requirements applicable to the risk-based assessment system. 

Sec. 7. Refunds, dividends, and credits from Deposit Insurance Fund. 

Sec. 8. Deposit Insurance Fund restoration plans. 

Sec. 9. Regulations required. 

Sec. 10. Studies of FDIC structure and expenses and certain activities and further possible changes to deposit insurance system. 

Sec. 11. Bi-annual FDIC survey and report on increasing the deposit base by 

encouraging use of depository institutions by the unbanked. 

Sec. 12. Technical and conforming amendments to the Federal Deposit Insurance Act relating to the merger of the BIF and SAIF. 

Sec. 13. Other technical and conforming amendments relating to the merger of 

the BIF and SAIF.

6 SEC. 2. MERGING THE BIF AND SAIF. 

7 (a) IN GENERAL.—

8 (1) MERGER.—The Bank Insurance Fund and 

9 the Savings Association Insurance Fund shall be 

10 merged into the Deposit Insurance Fund. 

11 (2) DISPOSITION OF ASSETS AND LIABIL12 ITIES.—All assets and liabilities of the Bank Insur13 ance Fund and the Savings Association Insurance 

14 Fund shall be transferred to the Deposit Insurance 

15 Fund. 

16 (3) NO SEPARATE EXISTENCE.—The separate 

17 existence of the Bank Insurance Fund and the Sav-
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1 ings Association Insurance Fund shall cease on the 

2 effective date of the merger thereof under this sec3 tion. 

4 (b) REPEAL OF OUTDATED MERGER PROVISION.—

5 Section 2704 of the Deposit Insurance Funds Act of 1996 

6 (12 U.S.C. 1821 note) is repealed. 

7 (c) EFFECTIVE DATE.—This section shall take effect 

8 on the first day of the first calendar quarter that begins 

9 after the end of the 90-day period beginning on the date 

10 of the enactment of this Act. 

11 SEC. 3. INCREASE IN DEPOSIT INSURANCE COVERAGE. 

12 (a) IN GENERAL.—Section 11(a)(1) of the Federal 

13 Deposit Insurance Act (12 U.S.C. 1821(a)(1)) is amend14 ed—

15 (1) by striking subparagraph (B) and inserting 

16 the following new subparagraph: 

17 ‘‘(B) NET AMOUNT OF INSURED DE18 POSIT.—The net amount due to any depositor 

19 at an insured depository institution shall not 

20 exceed the standard maximum deposit insur21 ance amount as determined in accordance with 

22 subparagraphs (C), (D), (E) and (F) and para23 graph (3).’’; and 

24 (2) by adding at the end the following new sub25 paragraphs: 
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1 ‘‘(E) STANDARD MAXIMUM DEPOSIT IN2 SURANCE AMOUNT DEFINED.—For purposes of 

3 this Act, the term ‘standard maximum deposit 

4 insurance amount’ means—

5 ‘‘(i) until the effective date of final 

6 regulations prescribed pursuant to section 

7 9(a)(2) of the Federal Deposit Insurance 

8 Reform Act of 2003, $100,000; and 

9 ‘‘(ii) on and after such effective date, 

10 $130,000, adjusted as provided under sub11 paragraph (F). 

12 ‘‘(F) INFLATION ADJUSTMENT.—

13 ‘‘(i) IN GENERAL.—By April 1 of 

14 2005, and the 1st day of each subsequent 

15 5-year period, the Board of Directors and 

16 the National Credit Union Administration 

17 Board shall jointly prescribe the amount 

18 by which the standard maximum deposit 

19 insurance amount and the standard max20 imum share insurance amount (as defined 

21 in section 207(k) of the Federal Credit 

22 Union Act) applicable to any depositor at 

23 an insured depository institution shall be 

24 increased by calculating the product of—

25 ‘‘(I) $130,000; and 
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1 ‘‘(II) the ratio of the value of the 

2 Personal Consumption Expenditures

3 Chain-Type Index (or any successor 

4 index thereto), published by the De5 partment of Commerce, as of Decem6 ber 31 of the year preceding the year 

7 in which the adjustment is calculated 

8 under this clause, to the value of such 

9 index as of the date this subpara10 graph takes effect. 

11 ‘‘(ii) ROUNDING.—If the amount de12 termined under clause (ii) for any period is 

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

14 determined shall be rounded to the nearest 

15 $10,000. 

16 ‘‘(iii) PUBLICATION AND REPORT TO

17 THE CONGRESS.—Not later than April 5 of 

18 any calendar year in which an adjustment 

19 is required to be calculated under clause (i) 

20 to the standard maximum deposit insur21 ance amount and the standard maximum 

22 share insurance amount under such clause, 

23 the Board of Directors and the National 

24 Credit Union Administration Board 

25 shall—
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1 ‘‘(I) publish in the Federal Reg2 ister the standard maximum deposit 

3 insurance amount, the standard max4 imum share insurance amount, and 

5 the amount of coverage under para6 graph (3)(A) and section 207(k)(3) of 

7 the Federal Credit Union Act, as so 

8 calculated; and 

9 ‘‘(II) jointly submit a report to 

10 the Congress containing the amounts 

11 described in subclause (I). 

12 ‘‘(iv) 6-MONTH IMPLEMENTATION PE13 RIOD.—Unless an Act of Congress enacted 

14 before July 1 of the calendar year in which 

15 an adjustment is required to be calculated 

16 under clause (i) provides otherwise, the in17 crease in the standard maximum deposit 

18 insurance amount and the standard max19 imum share insurance amount shall take 

20 effect on January 1 of the year imme21 diately succeeding such calendar year.’’. 

22 (b) COVERAGE FOR CERTAIN EMPLOYEE BENEFIT

23 PLAN DEPOSITS.—Section 11(a)(1)(D) of the Federal De24 posit Insurance Act (12 U.S.C. 1821(a)(1)(D)) is amend25 ed to read as follows: 
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1 ‘‘(D) COVERAGE FOR CERTAIN EMPLOYEE

2 BENEFIT PLAN DEPOSITS.—

3 ‘‘(i) PASS-THROUGH INSURANCE.—

4 The Corporation shall provide pass5 through deposit insurance for the deposits 

6 of any employee benefit plan. 

7 ‘‘(ii) PROHIBITION ON ACCEPTANCE

8 OF BENEFIT PLAN DEPOSITS.—An insured 

9 depository institution that is not well cap10 italized or adequately capitalized may not 

11 accept employee benefit plan deposits. 

12 ‘‘(iii) DEFINITIONS.—For purposes of 

13 this subparagraph, the following definitions 

14 shall apply: 

15 ‘‘(I) CAPITAL STANDARDS.—The 

16 terms ‘well capitalized’ and ‘ade17 quately capitalized’ have the same 

18 meanings as in section 38. 

19 ‘‘(II) EMPLOYEE BENEFIT

20 PLAN.—The term ‘employee benefit 

21 plan’ has the same meaning as in 

22 paragraph (8)(B)(ii), and includes any 

23 eligible deferred compensation plan 

24 described in section 457 of the Inter25 nal Revenue Code of 1986. 
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1 ‘‘(III) PASS-THROUGH DEPOSIT

2 INSURANCE.—The term ‘pass-through 

3 deposit insurance’ means, with respect 

4 to an employee benefit plan, deposit 

5 insurance coverage provided on a pro 

6 rata basis to the participants in the 

7 plan, in accordance with the interest 

8 of each participant.’’. 

9 (c) DOUBLING OF DEPOSIT INSURANCE FOR CER10 TAIN RETIREMENT ACCOUNTS.—Section 11(a)(3)(A) of 

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

12 1821(a)(3)(A)) is amended by striking ‘‘$100,000’’ and 

13 inserting ‘‘2 times the standard maximum deposit insur14 ance amount (as determined under paragraph (1))’’. 

15 (d) INCREASED INSURANCE COVERAGE FOR MUNIC16 IPAL DEPOSITS.—Section 11(a)(2) of the Federal Deposit 

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

18 (1) in subparagraph (A)—

19 (A) by moving the margins of clauses (i) 

20 through (v) 4 ems to the right; 

21 (B) by striking, in the matter following 

22 clause (v), ‘‘such depositor shall’’ and all that 

23 follows through the period; and 

24 (C) by striking the semicolon at the end of 

25 clause (v) and inserting a period;
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1 (2) by striking ‘‘(2)(A) Notwithstanding’’ and 

2 all that follows through ‘‘a depositor who is—’’ and 

3 inserting the following: 

4 ‘‘(2) MUNICIPAL DEPOSITORS.—

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

6 limitation in this Act or in any other provision 

7 of law relating to the amount of deposit insur8 ance available to any 1 depositor—

9 ‘‘(i) a municipal depositor shall, for 

10 the purpose of determining the amount of 

11 insured deposits under this subsection, be 

12 deemed to be a depositor separate and dis13 tinct from any other officer, employee, or 

14 agent of the United States or any public 

15 unit referred to in subparagraph (E); and 

16 ‘‘(ii) except as provided in subpara17 graph (B), the deposits of a municipal de18 positor shall be insured in an amount 

19 equal to the standard maximum deposit in20 surance amount (as determined under 

21 paragraph (1)). 

22 ‘‘(B) IN-STATE MUNICIPAL DEPOSITORS.—

23 In the case of the deposits of an in-State mu24 nicipal depositor described in clause (ii), (iii), 

25 (iv), or (v) of subparagraph (E) at an insured 
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1 depository institution, such deposits shall be in2 sured in an amount not to exceed the lesser 

3 of—

4 ‘‘(i) $2,000,000; or 

5 ‘‘(ii) the sum of the standard max6 imum deposit insurance amount and 80 

7 percent of the amount of any deposits in 

8 excess of the standard maximum deposit 

9 insurance amount. 

10 ‘‘(C) MUNICIPAL DEPOSIT PARITY.—No 

11 State may deny to insured depository institu12 tions within its jurisdiction the authority to ac13 cept deposits insured under this paragraph, or 

14 prohibit the making of such deposits in such in15 stitutions by any in-State municipal depositor. 

16 ‘‘(D) IN-STATE MUNICIPAL DEPOSITOR DE17 FINED.—For purposes of this paragraph, the 

18 term ‘in-State municipal depositor’ means a 

19 municipal depositor that is located in the same 

20 State as the office or branch of the insured de21 pository institution at which the deposits of 

22 that depositor are held. 

23 ‘‘(E) MUNICIPAL DEPOSITOR.—In this 

24 paragraph, the term ‘municipal depositor’ 

25 means a depositor that is—’’; 
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1 (3) by striking ‘‘(B) The’’ and inserting the fol2 lowing: 

3 ‘‘(F) AUTHORITY TO LIMIT DEPOSITS.—

4 The’’; and 

5 (4) by striking ‘‘depositor referred to in sub6 paragraph (A) of this paragraph’’ each place such 

7 term appears and inserting ‘‘municipal depositor’’. 

8 (e) TECHNICAL AND CONFORMING AMENDMENT RE9 LATING TO INSURANCE OF TRUST FUNDS.—Paragraphs 

10 (1) and (3) of section 7(i) of the Federal Deposit Insur11 ance Act (12 U.S.C. 1817(i)) are each amended by strik12 ing ‘‘$100,000’’ and inserting ‘‘the standard maximum de13 posit insurance amount (as determined under section 

14 11(a)(1))’’. 

15 (f) OTHER TECHNICAL AND CONFORMING AMEND16 MENTS.—

17 (1) Section 11(m)(6) of the Federal Deposit In18 surance Act (12 U.S.C. 1821(m)(6)) is amended by 

19 striking ‘‘$100,000’’ and inserting ‘‘an amount equal 

20 to the standard maximum deposit insurance 

21 amount’’. 

22 (2) Subsection (a) of section 18 of the Federal 

23 Deposit Insurance Act (12 U.S.C. 1828(a)) is 

24 amended to read as follows: 

25 ‘‘(a) INSURANCE LOGO.—
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1 ‘‘(1) INSURED DEPOSITORY INSTITUTIONS.—

2 ‘‘(A) IN GENERAL.—Each insured deposi3 tory institution shall display at each place of 

4 business maintained by that institution a sign 

5 or signs relating to the insurance of the depos6 its of the institution, in accordance with regula7 tions to be prescribed by the Corporation. 

8 ‘‘(B) STATEMENT TO BE INCLUDED.—

9 Each sign required under subparagraph (A) 

10 shall include a statement that insured deposits 

11 are backed by the full faith and credit of the 

12 United States Government. 

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

14 prescribe regulations to carry out this subsection, in15 cluding regulations governing the substance of signs 

16 required by paragraph (1) and the manner of dis17 play or use of such signs. 

18 ‘‘(3) PENALTIES.—For each day that an in19 sured depository institution continues to violate this 

20 subsection or any regulation issued under this sub21 section, it shall be subject to a penalty of not more 

22 than $100, which the Corporation may recover for 

23 its use.’’. 

24 (3) Section 43(d) of the Federal Deposit Insur25 ance Act (12 U.S.C. 1831t(d)) is amended by strik-
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1 ing ‘‘$100,000’’ and inserting ‘‘an amount equal to 

2 the standard maximum deposit insurance amount’’.

3 (4) Section 6 of the International Banking Act 

4 of 1978 (12 U.S.C. 3104) is amended—

5 (A) by striking ‘‘$100,000’’ each place 

6 such term appears and inserting ‘‘an amount 

7 equal to the standard maximum deposit insur8 ance amount’’; and 

9 (B) by adding at the end the following new 

10 subsection: 

11 ‘‘(e) STANDARD MAXIMUM DEPOSIT INSURANCE

12 AMOUNT DEFINED.—For purposes of this section, the 

13 term ‘standard maximum deposit insurance amount’ 

14 means the amount of the maximum amount of deposit in15 surance as determined under section 11(a)(1) of the Fed16 eral Deposit Insurance Act.’’. 

17 (g) CONFORMING CHANGE TO CREDIT UNION SHARE

18 INSURANCE FUND.—

19 (1) IN GENERAL.—Section 207(k) of the Fed20 eral Credit Union Act (12 U.S.C. 1787(k)) is 

21 amended—

22 (A) by striking ‘‘(k)(1)’’ and all that fol23 lows through the end of paragraph (1) and in24 serting the following: 

25 ‘‘(k) INSURED AMOUNTS PAYABLE.—
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1 ‘‘(1) NET INSURED AMOUNT.—

2 ‘‘(A) IN GENERAL.—Subject to the provi3 sions of paragraph (2), the net amount of share 

4 insurance payable to any member at an insured 

5 credit union shall not exceed the total amount 

6 of the shares or deposits in the name of the 

7 member (after deducting offsets), less any part 

8 thereof which is in excess of the standard max9 imum share insurance amount, as determined 

10 in accordance with this paragraph and para11 graphs (5) and (6), and consistently with ac12 tions taken by the Federal Deposit Insurance 

13 Corporation under section 11(a) of the Federal 

14 Deposit Insurance Act. 

15 ‘‘(B) AGGREGATION.—Determination of 

16 the net amount of share insurance under sub17 paragraph (A), shall be in accordance with such 

18 regulations as the Board may prescribe, and, in 

19 determining the amount payable to any mem20 ber, there shall be added together all accounts 

21 in the credit union maintained by that member 

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

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

24 ‘‘(C) AUTHORITY TO DEFINE THE EXTENT

25 OF COVERAGE.—The Board may define, with 
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1 such classifications and exceptions as it may 

2 prescribe, the extent of the share insurance cov3 erage provided for member accounts, including 

4 member accounts in the name of a minor, in 

5 trust, or in joint tenancy.’’; 

6 (B) in paragraph (2)—

7 (i) in subparagraph (A)—

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

9 moving the margins 4 ems to the 

10 right; 

11 (II) in the matter following 

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

13 and all that follows through the pe14 riod; and 

15 (III) by striking the semicolon at 

16 the end of clause (v) and inserting a 

17 period; 

18 (ii) by striking ‘‘(2)(A) Notwith19 standing’’ and all that follows through ‘‘a 

20 depositor or member who is—’’ and insert21 ing the following: 

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

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

24 limitation in this Act or in any other provision 

25 of law relating to the amount of insurance 
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1 available to any 1 depositor or member, depos2 its or shares of a municipal depositor or mem3 ber shall be insured in an amount equal to the 

4 standard maximum share insurance amount (as 

5 determined under paragraph (5)), except as 

6 provided in subparagraph (B). 

7 ‘‘(B) IN-STATE MUNICIPAL DEPOSITORS.—

8 In the case of the deposits of an in-State mu9 nicipal depositor described in clause (ii), (iii), 

10 (iv), or (v) of subparagraph (E) at an insured 

11 credit union, such deposits shall be insured in 

12 an amount equal to the lesser of—

13 ‘‘(i) $2,000,000; or 

14 ‘‘(ii) the sum of the standard max15 imum deposit insurance amount and 80 

16 percent of the amount of any deposits in 

17 excess of the standard maximum deposit 

18 insurance amount. 

19 ‘‘(C) RULE OF CONSTRUCTION.—No provi20 sion of this paragraph shall be construed as au21 thorizing an insured credit union to accept the 

22 deposits of a municipal depositor in an amount 

23 greater than such credit union is authorized to 

24 accept under any other provision of Federal or 

25 State law. 
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1 ‘‘(D) IN-STATE MUNICIPAL DEPOSITOR DE2 FINED.—For purposes of this paragraph, the 

3 term ‘in-State municipal depositor’ means a 

4 municipal depositor that is located in the same

5 State as the office or branch of the insured 

6 credit union at which the deposits of that de7 positor are held. 

8 ‘‘(E) MUNICIPAL DEPOSITOR.—In this 

9 paragraph, the term ‘municipal depositor’ 

10 means a depositor that is—’’; 

11 (iii) by striking ‘‘(B) The’’ and insert12 ing the following: 

13 ‘‘(F) AUTHORITY TO LIMIT DEPOSITS.—

14 The’’; and 

15 (iv) by striking ‘‘depositor or member 

16 referred to in subparagraph (A)’’ and in17 serting ‘‘municipal depositor or member’’; 

18 and 

19 (C) by adding at the end the following new 

20 paragraphs: 

21 ‘‘(4) COVERAGE FOR CERTAIN EMPLOYEE BEN22 EFIT PLAN DEPOSITS.—

23 ‘‘(A) PASS-THROUGH INSURANCE.—The 

24 Administration shall provide pass-through share 
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1 insurance for the deposits or shares of any em2 ployee benefit plan. 

3 ‘‘(B) PROHIBITION ON ACCEPTANCE OF

4 DEPOSITS.—An insured credit union that is not 

5 well capitalized or adequately capitalized may 

6 not accept employee benefit plan deposits. 

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

8 paragraph, the following definitions shall apply: 

9 ‘‘(i) CAPITAL STANDARDS.—The 

10 terms ‘well capitalized’ and ‘adequately 

11 capitalized’ have the same meanings as in 

12 section 216(c). 

13 ‘‘(ii) EMPLOYEE BENEFIT PLAN.—

14 The term ‘employee benefit plan’—

15 ‘‘(I) has the meaning given to 

16 such term in section 3(3) of the Em17 ployee Retirement Income Security 

18 Act of 1974; 

19 ‘‘(II) includes any plan described 

20 in section 401(d) of the Internal Rev21 enue Code of 1986; and 

22 ‘‘(III) includes any eligible de23 ferred compensation plan described in 

24 section 457 of the Internal Revenue 

25 Code of 1986. 
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1 ‘‘(iii) PASS-THROUGH SHARE INSUR2 ANCE.—The term ‘pass-through share in3 surance’ means, with respect to an em4 ployee benefit plan, insurance coverage 

5 provided on a pro rata basis to the partici6 pants in the plan, in accordance with the 

7 interest of each participant. 

8 ‘‘(D) RULE OF CONSTRUCTION.—No provi9 sion of this paragraph shall be construed as au10 thorizing an insured credit union to accept the 

11 deposits of an employee benefit plan in an 

12 amount greater than such credit union is au13 thorized to accept under any other provision of 

14 Federal or State law. 

15 ‘‘(5) STANDARD MAXIMUM SHARE INSURANCE

16 AMOUNT DEFINED.—For purposes of this Act, the 

17 term ‘standard maximum share insurance amount’ 

18 means—

19 ‘‘(A) until the effective date of final regula20 tions prescribed pursuant to section 9(a)(2) of 

21 the Federal Deposit Insurance Reform Act of 

22 2003, $100,000; and 

23 ‘‘(B) on and after such effective date, 

24 $130,000, adjusted as provided under section 
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1 11(a)(1)(F) of the Federal Deposit Insurance 

2 Act.’’. 

3 (2) DOUBLING OF SHARE INSURANCE FOR CER4 TAIN RETIREMENT ACCOUNTS.—Section 207(k)(3) 

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

6 1787(k)(3)) is amended by striking ‘‘$100,000’’ and 

7 inserting ‘‘2 times the standard maximum share in8 surance amount (as determined under paragraph 

9 (1))’’. 

10 (h) EFFECTIVE DATE.—This section and the amend11 ments made by this section shall take effect on the date 

12 the final regulations required under section 9(a)(2) take 

13 effect. 

14 SEC. 4. SETTING ASSESSMENTS AND REPEAL OF SPECIAL 

15 RULES RELATING TO MINIMUM ASSESS16 MENTS AND FREE DEPOSIT INSURANCE. 

17 (a) SETTING ASSESSMENTS.—Section 7(b)(2) of the 

18 Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is 

19 amended—

20 (1) by striking subparagraphs (A) and (B) and 

21 inserting the following new subparagraphs: 

22 ‘‘(A) IN GENERAL.—The Board of Direc23 tors shall set assessments for insured depository 

24 institutions in such amounts as the Board of 
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1 Directors may determine to be necessary or ap2 propriate, subject to subparagraph (D). 

3 ‘‘(B) FACTORS TO BE CONSIDERED.—In 

4 setting assessments under subparagraph (A), 

5 the Board of Directors shall consider the fol6 lowing factors: 

7 ‘‘(i) The estimated operating expenses 

8 of the Deposit Insurance Fund.

9 ‘‘(ii) The estimated case resolution ex10 penses and income of the Deposit Insur11 ance Fund. 

12 ‘‘(iii) The projected effects of the pay13 ment of assessments on the capital and 

14 earnings of insured depository institutions. 

15 ‘‘(iv) the risk factors and other factors 

16 taken into account pursuant to paragraph 

17 (1) under the risk-based assessment sys18 tem, including the requirement under such 

19 paragraph to maintain a risk-based sys20 tem. 

21 ‘‘(v) Any other factors the Board of 

22 Directors may determine to be appro23 priate.’’; and 

24 (2) by inserting after subparagraph (C) the fol25 lowing new subparagraph: 
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1 ‘‘(D) BASE RATE FOR ASSESSMENTS.—

2 ‘‘(i) IN GENERAL.—In setting assess3 ment rates pursuant to subparagraph (A), 

4 the Board of Directors shall establish a 

5 base rate of not more than 1 basis point 

6 (exclusive of any credit or dividend) for 

7 those insured depository institutions in the 

8 lowest-risk category under the risk-based 

9 assessment system established pursuant to 

10 paragraph (1). No insured depository insti11 tution shall be barred from the lowest-risk 

12 category solely because of size. 

13 ‘‘(ii) SUSPENSION.—Clause (i) shall 

14 not apply during any period in which the 

15 reserve ratio of the Deposit Insurance 

16 Fund is less than the amount which is 

17 equal to 1.15 percent of the aggregate esti18 mated insured deposits.’’. 

19 (b) ASSESSMENT RECORDKEEPING PERIOD SHORT20 ENED.—Paragraph (5) of section 7(b) of the Federal De21 posit Insurance Act (12 U.S.C. 1817(b)) is amended to 

22 read as follows: 

23 ‘‘(5) DEPOSITORY INSTITUTION REQUIRED TO

24 MAINTAIN ASSESSMENT-RELATED RECORDS.—Each 

25 insured depository institution shall maintain all 
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1 records that the Corporation may require for 

2 verifying the correctness of any assessment on the 

3 insured depository institution under this subsection 

4 until the later of—

5 ‘‘(A) the end of the 3-year period begin6 ning on the due date of the assessment; or 

7 ‘‘(B) in the case of a dispute between the 

8 insured depository institution and the Corpora9 tion with respect to such assessment, the date 

10 of a final determination of any such dispute.’’. 

11 (c) INCREASE IN FEES FOR LATE ASSESSMENT PAY12 MENTS.—Subsection (h) of section 18 of the Federal De13 posit Insurance Act (12 U.S.C. 1828(h)) is amended to 

14 read as follows: 

15 ‘‘(h) PENALTY FOR FAILURE TO TIMELY PAY AS16 SESSMENTS.—

17 ‘‘(1) IN GENERAL.—Any insured depository in18 stitution which fails or refuses to pay any assess19 ment shall be subject to a penalty in an amount not 

20 more than 1 percent of the amount of the assess21 ment due for each day that such violation continues. 

22 ‘‘(2) EXCEPTION IN CASE OF DISPUTE.—Para23 graph (1) shall not apply if—

24 ‘‘(A) the failure to pay an assessment is 

25 due to a dispute between the insured depository 
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1 institution and the Corporation over the 

2 amount of such assessment; and 

3 ‘‘(B) the insured depository institution de4 posits security satisfactory to the Corporation 

5 for payment upon final determination of the 

6 issue. 

7 ‘‘(3) AUTHORITY TO MODIFY OR REMIT PEN8 ALTY.—The Corporation, in the sole discretion of 

9 the Corporation, may compromise, modify or remit 

10 any penalty which the Corporation may assess or 

11 has already assessed under paragraph (1) upon a 

12 finding that good cause prevented the timely pay13 ment of an assessment.’’. 

14 (d) ASSESSMENTS FOR LIFELINE ACCOUNTS.—

15 (1) IN GENERAL.—Section 232 of the Federal 

16 Deposit Insurance Corporation Improvement Act of 

17 1991 (12 U.S.C. 1834) is amended by striking sub18 section (c). 

19 (2) CLARIFICATION OF RATE APPLICABLE TO

20 DEPOSITS ATTRIBUTABLE TO LIFELINE AC21 COUNTS.—Section 7(b)(2)(H) of the Federal Deposit 

22 Insurance Act (12 U.S.C. 1817(b)(2)(H)) is amend23 ed by striking ‘‘at a rate determined in accordance 

with such Act’’ and inserting ‘‘at 1 24 ⁄2 the assessment 
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1 rate otherwise applicable for such insured depository 

2 institution’’. 

3 (3) REGULATIONS.—Section 232(a)(1) of the 

4 Federal Deposit Insurance Corporation Improvement 

5 Act of 1991 (12 U.S.C. 1834(a)(1)) is amended by 

6 striking ‘‘Board of Governors of the Federal Reserve 

7 System, and the’’. 

8 (e) TECHNICAL AND CONFORMING AMENDMENTS.—

9 (1) Paragraph (3) of section 7(a) of the Fed10 eral Deposit Insurance Act (12 U.S.C. 1817(a)(3)) 

11 is amended by striking the 3d sentence and inserting 

12 the following: ‘‘Such reports of condition shall be the 

13 basis for the certified statements to be filed pursu14 ant to subsection (c).’’. 

15 (2) Subparagraphs (B)(ii) and (C) of section 

16 7(b)(1) of the Federal Deposit Insurance Act (12 

17 U.S.C. 1817(b)(1)) are each amended by striking 

18 ‘‘semiannual’’ where such term appears in each such 

19 subparagraph. 

20 (3) Section 7(b)(2) of the Federal Deposit In21 surance Act (12 U.S.C. 1817(b)(2)) is amended—

22 (A) by striking subparagraphs (E), (F), 

23 and (G); 

24 (B) in subparagraph (C), by striking 

25 ‘‘semiannual’’; and 
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1 (C) by redesignating subparagraph (H) (as 

2 amended by subsection (e)(2) of this section) as 

3 subparagraph (E). 

4 (4) Section 7(b) of the Federal Deposit Insur5 ance Act (12 U.S.C. 1817(b)) is amended by strik6 ing paragraph (4) and redesignating paragraphs (5) 

7 (as amended by subsection (b) of this section), (6), 

8 and (7) as paragraphs (4), (5), and (6) respectively. 

9 (5) Section 7(c) of the Federal Deposit Insur10 ance Act (12 U.S.C. 1817(c)) is amended—

11 (A) in paragraph (1)(A), by striking 

12 ‘‘semiannual’’; 

13 (B) in paragraph (2)(A), by striking 

14 ‘‘semiannual’’; and 

15 (C) in paragraph (3), by striking ‘‘semi16 annual period’’ and inserting ‘‘initial assess17 ment period’’. 

18 (6) Section 8(p) of the Federal Deposit Insur19 ance Act (12 U.S.C. 1818(p)) is amended by strik20 ing ‘‘semiannual’’. 

21 (7) Section 8(q) of the Federal Deposit Insur22 ance Act (12 U.S.C. 1818(q)) is amended by strik23 ing ‘‘semiannual period’’ and inserting ‘‘assessment 

24 period’’. 
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1 (8) Section 13(c)(4)(G)(ii)(II) of the Federal 

2 Deposit Insurance Act (12 U.S.C. 

3 1823(c)(4)(G)(ii)(II)) is amended by striking ‘‘semi4 annual period’’ and inserting ‘‘assessment period’’. 

5 (9) Section 232(a) of the Federal Deposit In6 surance Corporation Improvement Act of 1991 (12 

7 U.S.C. 1834(a)) is amended—

8 (A) in the matter preceding subparagraph 

9 (A) of paragraph (2), by striking ‘‘the Board 

10 and’’; 

11 (B) in subparagraph (J) of paragraph (2), 

12 by striking ‘‘the Board’’ and inserting ‘‘the 

13 Corporation’’; 

14 (C) by striking subparagraph (A) of para15 graph (3) and inserting the following new sub16 paragraph: 

17 ‘‘(A) CORPORATION.—The term ‘Corpora18 tion’ means the Federal Deposit Insurance Cor19 poration.’’; and 

20 (D) in subparagraph (C) of paragraph (3), 

21 by striking ‘‘Board’’ and inserting ‘‘Corpora22 tion’’. 

23 (f) EFFECTIVE DATE.—This section and the amend24 ments made by this section shall take effect on the date 
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1 that the final regulations required under section 9(a)(5) 

2 take effect. 

3 SEC. 5. REPLACEMENT OF FIXED DESIGNATED RESERVE 

4 RATIO WITH RESERVE RANGE. 

5 (a) IN GENERAL.—Section 7(b)(3) of the Federal 

6 Deposit Insurance Act (12 U.S.C. 1817(b)(3)) is amended 

7 to read as follows: 

8 ‘‘(3) DESIGNATED RESERVE RATIO.—

9 ‘‘(A) ESTABLISHMENT.—

10 ‘‘(i) IN GENERAL.—The Board of Di11 rectors shall designate, by regulation after 

12 notice and opportunity for comment, the 

13 reserve ratio applicable with respect to the 

14 Deposit Insurance Fund. 

15 ‘‘(ii) NOT LESS THAN ANNUAL REDE16 TERMINATION.—A determination under 

17 clause (i) shall be made by the Board of 

18 Directors at least before the beginning of 

19 each calendar year, for such calendar year, 

20 and at such other times as the Board of 

21 Directors may determine to be appropriate. 

22 ‘‘(B) RANGE.—The reserve ratio des23 ignated by the Board of Directors for any 

24 year—
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1 ‘‘(i) may not exceed 1.4 percent of es2 timated insured deposits; and 

3 ‘‘(ii) may not be less than 1.15 per4 cent of estimated insured deposits.

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

6 ratio for any year, the Board of Directors 

7 shall—

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

9 losses to the Deposit Insurance Fund in 

10 such year and future years, including his11 toric experience and potential and esti12 mated losses from insured depository insti13 tutions;

14 ‘‘(ii) take into account economic con15 ditions generally affecting insured deposi16 tory institutions so as to allow the des17 ignated reserve ratio to increase during 

18 more favorable economic conditions and to 

19 decrease during less favorable economic 

20 conditions, notwithstanding the increased 

21 risks of loss that may exist during such 

22 less favorable conditions, as determined to 

23 be appropriate by the Board of Directors; 
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1 ‘‘(iii) seek to prevent sharp swings in 

2 the assessment rates for insured depository 

3 institutions; and 

4 ‘‘(iv) take into account such other fac5 tors as the Board of Directors may deter6 mine to be appropriate, consistent with the 

7 requirements of this subparagraph. 

8 ‘‘(D) PUBLICATION OF PROPOSED CHANGE

9 IN RATIO.—In soliciting comment on any pro10 posed change in the designated reserve ratio in 

11 accordance with subparagraph (A), the Board 

12 of Directors shall include in the published pro13 posal a thorough analysis of the data and pro14 jections on which the proposal is based.’’. 

15 (b) TECHNICAL AND CONFORMING AMENDMENT.—

16 Section 3(y) of the Federal Deposit Insurance Act (12 

17 U.S.C. 1813(y)) is amended—

18 (1) by striking ‘‘(y) The term’’ and inserting 

19 ‘‘(y) DEFINITIONS RELATING TO DEPOSIT INSUR20 ANCE FUND.—

21 ‘‘(1) DEPOSIT INSURANCE FUND.—The term’’; 

22 and 

23 (2) by inserting after paragraph (1) (as so des24 ignated by paragraph (1) of this subsection) the fol25 lowing new paragraph: 
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1 ‘‘(2) DESIGNATED RESERVE RATIO.—The term 

2 ‘designated reserve ratio’ means the reserve ratio 

3 designated by the Board of Directors in accordance 

4 with section 7(b)(3).’’. 

5 (c) EFFECTIVE DATE.—This section and the amend6 ments made by this section shall take effect on the date 

7 that the final regulations required under section 9(a)(1) 

8 take effect. 

9 SEC. 6. REQUIREMENTS APPLICABLE TO THE RISK-BASED 

10 ASSESSMENT SYSTEM. 

11 Section 7(b)(1) of the Federal Deposit Insurance Act 

12 (12 U.S.C. 1817(b)(1)) is amended by adding at the end 

13 the following new subparagraphs: 

14 ‘‘(E) INFORMATION CONCERNING RISK OF

15 LOSS AND ECONOMIC CONDITIONS.—

16 ‘‘(i) SOURCES OF INFORMATION.—For 

17 purposes of determining risk of losses at 

18 insured depository institutions and eco19 nomic conditions generally affecting depos20 itory institutions, the Corporation shall col21 lect information, as appropriate, from all 

22 sources the Board of Directors considers 

23 appropriate, such as reports of condition, 

24 inspection reports, and other information 

25 from all Federal banking agencies, any in-
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1 formation available from State bank super2 visors, State insurance and securities regu3 lators, the Securities and Exchange Com4 mission (including information described in 

5 section 35), the Secretary of the Treasury, 

6 the Commodity Futures Trading Commis7 sion, the Farm Credit Administration, the 

8 Federal Trade Commission, any Federal 

9 reserve bank or Federal home loan bank, 

10 and other regulators of financial institu11 tions, and any information available from 

12 credit rating entities, and other private 

13 economic or business analysts. 

14 ‘‘(ii) CONSULTATION WITH FEDERAL

15 BANKING AGENCIES.—

16 ‘‘(I) IN GENERAL.—Except as 

17 provided in subclause (II), in assess18 ing the risk of loss to the Deposit In19 surance Fund with respect to any in20 sured depository institution, the Cor21 poration shall consult with the appro22 priate Federal banking agency of such 

23 institution. 

24 ‘‘(II) TREATMENT ON AGGRE25 GATE BASIS.—In the case of insured 
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1 depository institutions that are well 

2 capitalized (as defined in section 38) 

3 and, in the most recent examination, 

4 were found to be well managed, the 

5 consultation under subclause (I) con6 cerning the assessment of the risk of 

7 loss posed by such institutions may be 

8 made on an aggregate basis. 

9 ‘‘(iii) RULE OF CONSTRUCTION.—No 

10 provision of this paragraph shall be con11 strued as providing any new authority for 

12 the Corporation to require submission of

13 information by insured depository institu14 tions to the Corporation. 

15 ‘‘(F) MODIFICATIONS TO THE RISK-BASED

16 ASSESSMENT SYSTEM ALLOWED ONLY AFTER

17 NOTICE AND COMMENT.—In revising or modi18 fying the risk-based assessment system at any 

19 time after the date of the enactment of the 

20 Federal Deposit Insurance Reform Act of 2003, 

21 the Board of Directors may implement such re22 visions or modification in final form only after 

23 notice and opportunity for comment.’’. 
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1 SEC. 7. REFUNDS, DIVIDENDS, AND CREDITS FROM DE2 POSIT INSURANCE FUND. 

3 (a) IN GENERAL.—Subsection (e) of section 7 of the 

4 Federal Deposit Insurance Act (12 U.S.C. 1817(e)) is 

5 amended to read as follows: 

6 ‘‘(e) REFUNDS, DIVIDENDS, AND CREDITS.—

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

8 case of any payment of an assessment by an insured 

9 depository institution in excess of the amount due to 

10 the Corporation, the Corporation may—

11 ‘‘(A) refund the amount of the excess pay12 ment to the insured depository institution; or 

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

14 payment of subsequent assessments until such 

15 credit is exhausted. 

16 ‘‘(2) DIVIDENDS FROM EXCESS AMOUNTS IN

17 DEPOSIT INSURANCE FUND.—

18 ‘‘(A) RESERVE RATIO IN EXCESS OF 1.4

19 PERCENT OF ESTIMATED INSURED DEPOSITS.—

20 Whenever the reserve ratio of the Deposit In21 surance Fund exceeds 1.4 percent of estimated 

22 insured deposits, the Corporation shall declare 

23 the amount in the Fund in excess of the 

24 amount required to maintain the reserve ratio 

25 at 1.4 percent of estimated insured deposits, as 
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1 dividends to be paid to insured depository insti2 tutions. 

3 ‘‘(B) RESERVE RATIO EQUAL TO OR IN EX4 CESS OF 1.35 PERCENT OF ESTIMATED INSURED

5 DEPOSITS AND NOT MORE THAN 1.4 PER6 CENT.—Whenever the reserve ratio of the De7 posit Insurance Fund equals or exceeds 1.35 

8 percent of estimated insured deposits and is not 

9 more than 1.4 percent of such deposits, the 

10 Corporation shall declare the amount in the 

11 Fund that is equal to 50 percent of the amount 

12 in excess of the amount required to maintain 

13 the reserve ratio at 1.35 percent of the esti14 mated insured deposits as dividends to be paid 

15 to insured depository institutions. 

16 ‘‘(C) BASIS FOR DISTRIBUTION OF DIVI17 DENDS.—

18 ‘‘(i) IN GENERAL.—Solely for the pur19 poses of dividend distribution under this 

20 paragraph and credit distribution under 

21 paragraph (3)(B), the Corporation shall 

22 determine each insured depository institu23 tion’s relative contribution to the Deposit 

24 Insurance Fund (or any predecessor de25 posit insurance fund) for calculating such 
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1 institution’s share of any dividend or credit 

2 declared under this paragraph or para3 graph (3)(B), taking into account the fac4 tors described in clause (ii). 

5 ‘‘(ii) FACTORS FOR DISTRIBUTION.—

6 In implementing this paragraph and para7 graph (3)(B) in accordance with regula8 tions, the Corporation shall take into ac9 count the following factors: 

10 ‘‘(I) The ratio of the assessment 

11 base of an insured depository institu12 tion (including any predecessor) on 

13 December 31, 1996, to the assessment 

14 base of all eligible insured depository 

15 institutions on that date. 

16 ‘‘(II) The total amount of assess17 ments paid on or after January 1, 

18 1997, by an insured depository insti19 tution (including any predecessor) to 

20 the Deposit Insurance Fund (and any 

21 predecessor deposit insurance fund). 

22 ‘‘(III) That portion of assess23 ments paid by an insured depository 

24 institution (including any predecessor) 
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1 that reflects higher levels of risk as2 sumed by such institution. 

3 ‘‘(IV) Such other factors as the 

4 Corporation may determine to be ap5 propriate. 

6 ‘‘(D) NOTICE AND OPPORTUNITY FOR

7 COMMENT.—The Corporation shall prescribe by 

8 regulation, after notice and opportunity for 

9 comment, the method for the calculation, dec10 laration, and payment of dividends under this 

11 paragraph. 

12 ‘‘(3) CREDIT POOL.—

13 ‘‘(A) ONE-TIME CREDIT BASED ON TOTAL

14 ASSESSMENT BASE AT YEAR-END 1996.—

15 ‘‘(i) IN GENERAL.—Before the end of 

16 the 270-day period beginning on the date 

17 of the enactment of the Federal Deposit 

18 Insurance Reform Act of 2003, the Board 

19 of Directors shall, by regulation, provide 

20 for a credit to each eligible insured deposi21 tory institution, based on the assessment 

22 base of the institution (including any pred23 ecessor institution) on December 31, 1996, 

24 as compared to the combined aggregate as25 sessment base of all eligible insured deposi-
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1 tory institutions, taking into account such 

2 factors as the Board of Directors may de3 termine to be appropriate. 

4 ‘‘(ii) CREDIT LIMIT.—The aggregate 

5 amount of credits available under clause (i) 

6 to all eligible insured depository institu7 tions shall equal the amount that the Cor8 poration could collect if the Corporation 

9 imposed an assessment of 12 basis points 

10 on the combined assessment base of the 

11 Bank Insurance Fund and the Savings As12 sociation Insurance Fund as of December 

13 31, 2001. 

14 ‘‘(iii) ELIGIBLE INSURED DEPOSITORY

15 INSTITUTION DEFINED.—For purposes of 

16 this paragraph, the term ‘eligible insured 

17 depository institution’ means any insured 

18 depository institution that—

19 ‘‘(I) was in existence on Decem20 ber 31, 1996, and paid a deposit in21 surance assessment prior to that date; 

22 or 

23 ‘‘(II) is a successor to any in24 sured depository institution described 

25 in subclause (II). 
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1 ‘‘(iv) APPLICATION OF CREDITS.—

2 ‘‘(I) IN GENERAL.—The amount 

3 of a credit to any eligible insured de4 pository institution under this para5 graph shall be applied by the Corpora6 tion, subject to subsection (b)(3)(e), 

7 to the assessments imposed on such 

8 institution under subsection (b) that 

9 become due for assessment periods be10 ginning after the effective date of reg11 ulations prescribed under clause (i). 

12 ‘‘(II) REGULATIONS.—The regu13 lations prescribed under clause (i) 

14 shall establish the qualifications and 

15 procedures governing the application 

16 of assessment credits pursuant to sub17 clause (I). 

18 ‘‘(v) LIMITATION ON AMOUNT OF

19 CREDIT FOR CERTAIN DEPOSITORY INSTI20 TUTIONS.—In the case of an insured de21 pository institution that exhibits financial, 

22 operational, or compliance weaknesses 

23 ranging from moderately severe to unsatis24 factory, or is not adequately capitalized (as 

25 defined in section 38) at the beginning of 
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1 an assessment period, the amount of any 

2 credit allowed under this paragraph 

3 against the assessment on that depository 

4 institution for such period may not exceed 

5 the amount calculated by applying to that 

6 depository institution the average assess7 ment rate on all insured depository institu8 tions for such assessment period. 

9 ‘‘(vi) PREDECESSOR DEFINED.—For 

10 purposes of this paragraph, the term ‘pred11 ecessor’, when used with respect to any in12 sured depository institution, includes any 

13 other insured depository institution ac14 quired by or merged with such insured de15 pository institution. 

16 ‘‘(B) ON-GOING CREDIT POOL.—

17 ‘‘(i) IN GENERAL.—In addition to the 

18 credit provided pursuant to subparagraph 

19 (A) and subject to the limitation contained 

20 in clause (v) of such subparagraph, the 

21 Corporation shall, by regulation, establish 

22 an on-going system of credits to be applied 

23 against future assessments under sub24 section (b)(1) on the same basis as the 
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1 dividends provided under paragraph 

2 (2)(C). 

3 ‘‘(ii) LIMITATION ON CREDITS UNDER

4 CERTAIN CIRCUMSTANCES.—No credits 

5 may be awarded by the Corporation under 

6 this subparagraph during any period in 

7 which—

8 ‘‘(I) the reserve ratio of the De9 posit Insurance Fund is less than the 

10 designated reserve ratio of such Fund; 

11 or 

12 ‘‘(II) the reserve ratio of the 

13 Fund is less than 1.25 percent of the 

14 amount of estimated insured deposits.

15 ‘‘(iii) CRITERIA FOR DETERMINA16 TION.—In determining the amounts of any 

17 assessment credits under this subpara18 graph, the Board of Directors shall take 

19 into account the factors for designating the 

20 reserve ratio under subsection (b)(3) and 

21 the factors for setting assessments under 

22 subsection (b)(2)(B). 

23 ‘‘(4) ADMINISTRATIVE REVIEW.—

24 ‘‘(A) IN GENERAL.—The regulations pre25 scribed under paragraph (2)(D) and subpara-
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1 graphs (A) and (B) of paragraph (3) shall in2 clude provisions allowing an insured depository 

3 institution a reasonable opportunity to chal4 lenge administratively the amount of the credit 

5 or dividend determined under paragraph (2) or 

6 (3) for such institution. 

7 ‘‘(B) ADMINISTRATIVE REVIEW.—Any re8 view under subparagraph (A) of any determina9 tion of the Corporation under paragraph (2) or 

10 (3) shall be final and not subject to judicial re11 view.’’. 

12 (b) DEFINITION OF RESERVE RATIO.—Section 3(y) 

13 of the Federal Deposit Insurance Act (12 U.S.C. 1813(y)) 

14 (as amended by section 5(b) of this Act) is amended by 

15 adding at the end the following new paragraph: 

16 ‘‘(3) RESERVE RATIO.—The term ‘reserve 

17 ratio’, when used with regard to the Deposit Insur18 ance Fund other than in connection with a reference 

19 to the designated reserve ratio, means the ratio of 

20 the net worth of the Deposit Insurance Fund to the 

21 value of the aggregate estimated insured deposits.’’. 

22 SEC. 8. DEPOSIT INSURANCE FUND RESTORATION PLANS. 

23 Section 7(b)(3) of the Federal Deposit Insurance Act 

24 (12 U.S.C. 1817(b)(3)) (as amended by section 5(a) of 
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1 this Act) is amended by adding at the end the following 

2 new subparagraph: 

3 ‘‘(E) DIF RESTORATION PLANS.—

4 ‘‘(i) IN GENERAL.—Whenever—

5 ‘‘(I) the Corporation projects 

6 that the reserve ratio of the Deposit 

7 Insurance Fund will, within 6 months 

8 of such determination, fall below the 

9 minimum amount specified in sub10 paragraph (B)(ii) for the designated 

11 reserve ratio; or 

12 ‘‘(II) the reserve ratio of the De13 posit Insurance Fund actually falls 

14 below the minimum amount specified 

15 in subparagraph (B)(ii) for the des16 ignated reserve ratio without any de17 termination under subclause (I) hav18 ing been made, 

19 the Corporation shall establish and imple20 ment a Deposit Insurance Fund restora21 tion plan within 90 days that meets the re22 quirements of clause (ii) and such other 

23 conditions as the Corporation determines 

24 to be appropriate. 
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1 ‘‘(ii) REQUIREMENTS OF RESTORA2 TION PLAN.—A Deposit Insurance Fund 

3 restoration plan meets the requirements of 

4 this clause if the plan provides that the re5 serve ratio of the Fund will meet or exceed 

6 the minimum amount specified in subpara7 graph (B)(ii) for the designated reserve 

8 ratio before the end of the 10-year period 

9 beginning upon the implementation of the 

10 plan.

11 ‘‘(iii) RESTRICTION ON ASSESSMENT

12 CREDITS.—As part of any restoration plan 

13 under this subparagraph, the Corporation 

14 may elect to restrict the application of as15 sessment credits provided under subsection 

16 (e)(3) for any period that the plan is in ef17 fect. 

18 ‘‘(iv) LIMITATION ON RESTRICTION.—

19 Notwithstanding clause (iii), while any res20 toration plan under this subparagraph is in 

21 effect, the Corporation shall apply credits 

22 provided to an insured depository institu23 tion under subsection (e)(3) against any 

24 assessment imposed on the institution for 
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1 any assessment period in an amount equal 

2 to the lesser of—

3 ‘‘(I) the amount of the assess4 ment; or 

5 ‘‘(II) the amount equal to 3 basis 

6 points of the institution’s assessment 

7 base. 

8 ‘‘(v) TRANSPARENCY.—Not more than 

9 30 days after the Corporation establishes 

10 and implements a restoration plan under 

11 clause (i), the Corporation shall publish in 

12 the Federal Register a detailed analysis of 

13 the factors considered and the basis for the 

14 actions taken with regard to the plan.’’.

15 SEC. 9. REGULATIONS REQUIRED. 

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

17 date of the enactment of this Act, the Board of Directors 

18 of the Federal Deposit Insurance Corporation shall pre19 scribe final regulations, after notice and opportunity for 

20 comment—

21 (1) designating the reserve ratio for the Deposit 

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

23 of the Federal Deposit Insurance Act (as amended 

24 by section 5 of this Act); 
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1 (2) implementing increases in deposit insurance 

2 coverage in accordance with the amendments made 

3 by section 3 of this Act; 

4 (3) implementing the dividend requirement 

5 under section 7(e)(2) of the Federal Deposit Insur6 ance Act (as amended by section 7 of this Act). 

7 (4) implementing the 1-time assessment credit 

8 to certain insured depository institutions in accord9 ance with section 7(e)(3) of the Federal Deposit In10 surance Act, as amended by section 7 of this Act, 

11 including the qualifications and procedures under 

12 which the Corporation would apply assessment cred13 its; and 

14 (5) providing for assessments under section 

15 7(b) of the Federal Deposit Insurance Act, as 

16 amended by this Act. 

17 (b) RULE OF CONSTRUCTION.—No provision of this 

18 Act or any amendment made by this Act shall be con19 strued as affecting the authority of the Corporation to set 

20 or collect deposit insurance assessments before the effec21 tive date of the final regulations prescribed under sub22 section (a).
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1 SEC. 10. STUDIES OF FDIC STRUCTURE AND EXPENSES AND 

2 CERTAIN ACTIVITIES AND FURTHER POS3 SIBLE CHANGES TO DEPOSIT INSURANCE 

4 SYSTEM. 

5 (a) STUDY BY COMPTROLLER GENERAL.—

6 (1) STUDY REQUIRED.—The Comptroller Gen7 eral shall conduct a study of the following issues: 

8 (A) The efficiency and effectiveness of the 

9 administration of the prompt corrective action 

10 program under section 38 of the Federal De11 posit Insurance Act by the Federal banking 

12 agencies (as defined in section 3 of such Act), 

13 including the degree of effectiveness of such 

14 agencies in identifying troubled depository insti15 tutions and taking effective action with respect 

16 to such institutions, and the degree of accuracy 

17 of the risk assessments made by the Corpora18 tion. 

19 (B) The appropriateness of the organiza20 tional structure of the Federal Deposit Insur21 ance Corporation for the mission of the Cor22 poration taking into account—

23 (i) the current size and complexity of 

24 the business of insured depository institu25 tions (as such term is defined in section 3 

26 of the Federal Deposit Insurance Act); 
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1 (ii) the extent to which the organiza2 tional structure contributes to or reduces 

3 operational inefficiencies that increase 

4 operational costs; and 

5 (iii) the effectiveness of internal con6 trols. 

7 (2) REPORT TO THE CONGRESS.—The Comp8 troller General shall submit a report to the Congress 

9 before the end of the 1-year period beginning on the 

10 date of the enactment of this Act containing the 

11 findings and conclusions of the Comptroller General 

12 with respect to the study required under paragraph 

13 (1) together with such recommendations for legisla14 tive or administrative action as the Comptroller Gen15 eral may determine to be appropriate. 

16 (b) INTERNAL STUDY BY THE FDIC.—

17 (1) STUDY REQUIRED.—Concurrently with the 

18 study required to be conducted by the Comptroller 

19 General under subsection (a), the Federal Deposit 

20 Insurance Corporation shall conduct an internal 

21 study of the same conditions and factors included in 

22 the study under subsection (a). 

23 (2) REPORT TO THE CONGRESS.—The Federal 

24 Deposit Insurance Corporation shall submit a report 

25 to the Congress before the end of the 1-year period 
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1 beginning on the date of the enactment of this Act 

2 containing the findings and conclusions of the Cor3 poration with respect to the study required under 

4 paragraph (1) together with such recommendations 

5 for legislative or administrative action as the Board 

6 of Directors of the Corporation may determine to be 

7 appropriate. 

8 (c) STUDY OF FURTHER POSSIBLE CHANGES TO DE9 POSIT INSURANCE SYSTEM.—

10 (1) STUDY REQUIRED.—The Board of Directors 

11 of the Federal Deposit Insurance Corporation and 

12 the National Credit Union Administration Board 

13 shall each conduct a study of the following: 

14 (A) The feasibility of establishing a vol15 untary deposit insurance system for deposits in 

16 excess of the maximum amount of deposit in17 surance for any depositor and the potential ben18 efits and the potential adverse consequences 

19 that may result from the establishment of any 

20 such system.

21 (B) The feasibility of privatizing all deposit 

22 insurance at insured depository institutions and 

23 insured credit unions. 

24 (2) REPORT.—Before the end of the 1-year pe25 riod beginning on the date of the enactment of this 
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1 Act, the Board of Directors of the Federal Deposit 

2 Insurance Corporation and the National Credit 

3 Union Administration Board shall each submit a re4 port to the Congress on the study required under 

5 paragraph (1) containing the findings and conclu6 sions of the reporting agency together with such rec7 ommendations for legislative or administrative 

8 changes as the agency may determine to be appro9 priate. 

10 (d) STUDY REGARDING APPROPRIATE DEPOSIT

11 BASE IN DESIGNATING RESERVE RATIO.—

12 (1) STUDY REQUIRED.—The Federal Deposit 

13 Insurance Corporation shall conduct a study of the 

14 feasibility of using actual domestic deposits rather 

15 than estimated insured deposits in calculating the 

16 reserve ratio of the Deposit Insurance Fund and 

17 designating a reserve ratio for such Fund. 

18 (2) REPORT.—The Federal Deposit Insurance 

19 Corporation shall submit a report to the Congress 

20 before the end of the 1-year period beginning on the 

21 date of the enactment of this Act containing the 

22 findings and conclusions of the Corporation with re23 spect to the study required under paragraph (1) to24 gether with such recommendations for legislative or 
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1 administrative action as the Board of Directors of 

2 the Corporation may determine to be appropriate. 

3 (e) STUDY OF RESERVE METHODOLOGY AND AC4 COUNTING FOR LOSS.—

5 (1) STUDY REQUIRED.—The Federal Deposit 

6 Insurance Corporation, in consultation with the 

7 Comptroller General, shall conduct a study of the re8 serve methodology and loss accounting used by the 

9 Corporation during the period beginning on January 

10 1, 1992, and ending December 31, 2002, with re11 spect to insured depository institutions in a troubled 

12 condition (as defined in the regulations prescribed 

13 pursuant to section 32(f) of the Federal Deposit In14 surance Act). 

15 (2) FACTORS TO BE INCLUDED.—In conducting 

16 the study pursuant to paragraph (1), the Federal 

17 Deposit Insurance Corporation shall—

18 (A) consider the overall effectiveness and 

19 accuracy of the methodology used by the Cor20 poration for establishing and maintaining re21 serves and estimating and accounting for losses 

22 at insured depository institutions, during the 

23 period described in such paragraph;
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1 (B) consider the appropriateness and reli2 ability of information and criteria used by the 

3 Corporation in determining—

4 (i) whether an insured depository in5 stitution was in a troubled condition; and 

6 (ii) the amount of any loss anticipated 

7 at such institution; 

8 (C) analyze the actual historical loss expe9 rience over the period described in paragraph 

10 (1) and the causes of the exceptionally high 

11 rate of losses experienced by the Corporation in 

12 the final 3 years of that period; and 

13 (D) rate the efforts of the Corporation to 

14 reduce losses in such 3-year period to minimally 

15 acceptable levels and to historical levels. 

16 (3) REPORT REQUIRED.—The Board of Direc17 tors of the Federal Deposit Insurance Corporation 

18 shall submit a report to the Congress before the end 

19 of the 6-month period beginning on the date of the 

20 enactment of this Act, containing the findings and 

21 conclusions of the Corporation, in consultation with 

22 the Comptroller General, with respect to the study 

23 required under paragraph (1), together with such 

24 recommendations for legislative or administrative ac-
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1 tion as the Board of Directors may determine to be 

2 appropriate.

3 SEC. 11. BI-ANNUAL FDIC SURVEY AND REPORT ON IN4 CREASING THE DEPOSIT BASE BY ENCOUR5 AGING USE OF DEPOSITORY INSTITUTIONS 

6 BY THE UNBANKED. 

7 The Federal Deposit Insurance Act (12 U.S.C. 1811 

8 et seq.) is amended by adding at the end the following 

9 new section: 

10 ‘‘SEC. 49. BI-ANNUAL FDIC SURVEY AND REPORT ON EN11 COURAGING USE OF DEPOSITORY INSTITU12 TIONS BY THE UNBANKED. 

13 ‘‘(a) SURVEY REQUIRED.—

14 ‘‘(1) IN GENERAL.—The Corporation shall con15 duct a bi-annual survey on efforts by insured deposi16 tory institutions to bring those individuals and fami17 lies who have rarely, if ever, held a checking ac18 count, a savings account or other type of transaction 

19 or check cashing account at an insured depository 

20 institution (hereafter in this section referred to as 

21 the ‘unbanked’) into the conventional finance sys22 tem. 

23 ‘‘(2) FACTORS AND QUESTIONS TO CON24 SIDER.—In conducting the survey, the Corporation 
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HR 522 RFS 

1 shall take the following factors and questions into 

2 account:

3 ‘‘(A) To what extent do insured depository 

4 institutions promote financial education and fi5 nancial literacy outreach? 

6 ‘‘(B) Which financial education efforts ap7 pear to be the most effective in bringing 

8 ‘unbanked’ individuals and families into the 

9 conventional finance system? 

10 ‘‘(C) What efforts are insured institutions 

11 making at converting ‘unbanked’ money order, 

12 wire transfer, and international remittance cus13 tomers into conventional account holders? 

14 ‘‘(D) What cultural, language and identi15 fication issues as well as transaction costs ap16 pear to most prevent ‘unbanked’ individuals 

17 from establishing conventional accounts? 

18 ‘‘(E) What is a fair estimate of the size 

19 and worth of the ‘unbanked’ market in the 

20 United States? 

21 ‘‘(b) REPORTS.—The Chairperson of the Board of 

22 Directors shall submit a bi-annual report to the Com23 mittee on Financial Services of the House of Representa24 tives and the Committee on Banking, Housing, and Urban 

25 Affairs of the Senate containing the Corporation’s findings 
55

HR 522 RFS 

1 and conclusions with respect to the survey conducted pur2 suant to subsection (a), together with such recommenda3 tions for legislative or administrative action as the Chair4 person may determine to be appropriate.’’. 

5 SEC. 12. TECHNICAL AND CONFORMING AMENDMENTS TO 

6 THE FEDERAL DEPOSIT INSURANCE ACT RE7 LATING TO THE MERGER OF THE BIF AND 

8 SAIF. 

9 (a) IN GENERAL.—The Federal Deposit Insurance 

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

11 (1) in section 3 (12 U.S.C. 1813)—

12 (A) by striking subparagraph (B) of sub13 section (a)(1) and inserting the following new 

14 subparagraph: 

15 ‘‘(B) includes any former savings associa16 tion.’’; and 

17 (B) by striking paragraph (1) of sub18 section (y) (as so designated by section 5(b) of 

19 this Act) and inserting the following new para20 graph: 

21 ‘‘(1) DEPOSIT INSURANCE FUND.—The term 

22 ‘Deposit Insurance Fund’ means the Deposit Insur23 ance Fund established under section 11(a)(4).’’; 

24 (2) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), 

25 by striking ‘‘the Bank Insurance Fund or the Sav-
56

HR 522 RFS 

1 ings Association Insurance Fund,’’ and inserting 

2 ‘‘the Deposit Insurance Fund,’’; 

3 (3) in section 5(c)(4), by striking ‘‘deposit in4 surance fund’’ and inserting ‘‘Deposit Insurance 

5 Fund’’; 

6 (4) in section 5(d) (12 U.S.C. 1815(d)), by 

7 striking paragraphs (2) and (3) (and any funds re8 sulting from the application of such paragraph (2) 

9 prior to its repeal shall be deposited into the general 

10 fund of the Deposit Insurance Fund); 

11 (5) in section 5(d)(1) (12 U.S.C. 1815(d)(1))—

12 (A) in subparagraph (A), by striking ‘‘re13 serve ratios in the Bank Insurance Fund and 

14 the Savings Association Insurance Fund as re15 quired by section 7’’ and inserting ‘‘the reserve 

16 ratio of the Deposit Insurance Fund’’; 

17 (B) by striking subparagraph (B) and in18 serting the following: 

19 ‘‘(2) FEE CREDITED TO THE DEPOSIT INSUR20 ANCE FUND.—The fee paid by the depository insti21 tution under paragraph (1) shall be credited to the 

22 Deposit Insurance Fund.’’; 

23 (C) by striking ‘‘(1) UNINSURED INSTITU24 TIONS.—’’; and 
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HR 522 RFS 

1 (D) by redesignating subparagraphs (A) 

2 and (C) as paragraphs (1) and (3), respectively, 

3 and moving the left margins 2 ems to the left; 

4 (6) in section 5(e) (12 U.S.C. 1815(e))—

5 (A) in paragraph (5)(A), by striking 

6 ‘‘Bank Insurance Fund or the Savings Associa7 tion Insurance Fund’’ and inserting ‘‘Deposit 

8 Insurance Fund’’; 

9 (B) by striking paragraph (6); and 

10 (C) by redesignating paragraphs (7), (8), 

11 and (9) as paragraphs (6), (7), and (8), respec12 tively; 

13 (7) in section 6(5) (12 U.S.C. 1816(5)), by 

14 striking ‘‘Bank Insurance Fund or the Savings As15 sociation Insurance Fund’’ and inserting ‘‘Deposit 

16 Insurance Fund’’; 

17 (8) in section 7(b) (12 U.S.C. 1817(b))—

18 (A) in paragraph (1)(C), by striking ‘‘de19 posit insurance fund’’ each place that term ap20 pears and inserting ‘‘Deposit Insurance Fund’’; 

21 (B) in paragraph (1)(D), by striking ‘‘each 

22 deposit insurance fund’’ and inserting ‘‘the De23 posit Insurance Fund’’; and 

24 (C) in paragraph (5) (as so redesignated 

25 by section 4(e)(4) of this Act)—
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HR 522 RFS 

1 (i) by striking ‘‘any such assessment’’ 

2 and inserting ‘‘any such assessment is nec3 essary’’; 

4 (ii) by striking subparagraph (B);

5 (iii) in subparagraph (A)—

6 (I) by striking ‘‘(A) is nec7 essary—’’; 

8 (II) by striking ‘‘Bank Insurance 

9 Fund members’’ and inserting ‘‘in10 sured depository institutions’’; and 

11 (III) by redesignating clauses (i), 

12 (ii), and (iii) as subparagraphs (A), 

13 (B), and (C), respectively, and moving 

14 the margins 2 ems to the left; and 

15 (iv) in subparagraph (C) (as so redes16 ignated)—

17 (I) by inserting ‘‘that’’ before 

18 ‘‘the Corporation’’; and 

19 (II) by striking ‘‘; and’’ and in20 serting a period; 

21 (9) in section 7(j)(7)(F) (12 U.S.C. 

22 1817(j)(7)(F)), by striking ‘‘Bank Insurance Fund 

23 or the Savings Association Insurance Fund’’ and in24 serting ‘‘Deposit Insurance Fund’’; 
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HR 522 RFS 

1 (10) in section 8(t)(2)(C) (12 U.S.C. 

2 1818(t)(2)(C)), by striking ‘‘deposit insurance fund’’ 

3 and inserting ‘‘Deposit Insurance Fund’’; 

4 (11) in section 11 (12 U.S.C. 1821)—

5 (A) by striking ‘‘deposit insurance fund’’ 

6 each place that term appears and inserting 

7 ‘‘Deposit Insurance Fund’’; 

8 (B) by striking paragraph (4) of sub9 section (a) and inserting the following new 

10 paragraph: 

11 ‘‘(4) DEPOSIT INSURANCE FUND.—

12 ‘‘(A) ESTABLISHMENT.—There is estab13 lished the Deposit Insurance Fund, which the 

14 Corporation shall—

15 ‘‘(i) maintain and administer; 

16 ‘‘(ii) use to carry out its insurance 

17 purposes, in the manner provided by this 

18 subsection; and 

19 ‘‘(iii) invest in accordance with section 

20 13(a). 

21 ‘‘(B) USES.—The Deposit Insurance Fund 

22 shall be available to the Corporation for use 

23 with respect to insured depository institutions 

24 the deposits of which are insured by the De25 posit Insurance Fund. 
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HR 522 RFS 

1 ‘‘(C) LIMITATION ON USE.—Notwith2 standing any provision of law other than section 

3 13(c)(4)(G), the Deposit Insurance Fund shall 

4 not be used in any manner to benefit any share5 holder or affiliate (other than an insured depos6 itory institution that receives assistance in ac7 cordance with the provisions of this Act) of—

8 ‘‘(i) any insured depository institution 

9 for which the Corporation has been ap10 pointed conservator or receiver, in connec11 tion with any type of resolution by the 

12 Corporation; 

13 ‘‘(ii) any other insured depository in14 stitution in default or in danger of default, 

15 in connection with any type of resolution 

16 by the Corporation; or 

17 ‘‘(iii) any insured depository institu18 tion, in connection with the provision of as19 sistance under this section or section 13 

20 with respect to such institution, except 

21 that this clause shall not prohibit any as22 sistance to any insured depository institu23 tion that is not in default, or that is not 

24 in danger of default, that is acquiring (as 
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HR 522 RFS 

1 defined in section 13(f)(8)(B)) another in2 sured depository institution. 

3 ‘‘(D) DEPOSITS.—All amounts assessed 

4 against insured depository institutions by the 

5 Corporation shall be deposited into the Deposit 

6 Insurance Fund.’’; 

7 (C) by striking paragraphs (5), (6), and 

8 (7) of subsection (a); and 

9 (D) by redesignating paragraph (8) of sub10 section (a) as paragraph (5); 

11 (12) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), 

12 by striking ‘‘, except that—’’ and all that follows 

13 through the end of the paragraph and inserting a 

14 period; 

15 (13) in section 11(i)(3) (12 U.S.C. 

16 1821(i)(3))—

17 (A) by striking subparagraph (B); 

18 (B) by redesignating subparagraph (C) as 

19 subparagraph (B); and 

20 (C) in subparagraph (B) (as so redesig21 nated), by striking ‘‘subparagraphs (A) and 

22 (B)’’ and inserting ‘‘subparagraph (A)’’; 

23 (14) in section 11(p)(2)(B) (12 U.S.C. 

24 1821(p)(2)(B)), by striking ‘‘institution, any’’ and 

25 inserting ‘‘institution, the’’; 
62

HR 522 RFS 

1 (15) in section 11A(a) (12 U.S.C. 1821a(a))—

2 (A) in paragraph (2), by striking ‘‘LIABIL3 ITIES.—’’ and all that follows through ‘‘Except’’ 

4 and inserting ‘‘LIABILITIES.—Except’’; 

5 (B) by striking paragraph (2)(B); and 

6 (C) in paragraph (3), by striking ‘‘the 

7 Bank Insurance Fund, the Savings Association

8 Insurance Fund,’’ and inserting ‘‘the Deposit 

9 Insurance Fund’’; 

10 (16) in section 11A(b) (12 U.S.C. 1821a(b)), 

11 by striking paragraph (4); 

12 (17) in section 11A(f) (12 U.S.C. 1821a(f)), by 

13 striking ‘‘Savings Association Insurance Fund’’ and 

14 inserting ‘‘Deposit Insurance Fund’’; 

15 (18) in section 12(f)(4)(E)(iv) (12 U.S.C. 

16 1822(f)(4)(E)(iv)), by striking ‘‘Federal deposit in17 surance funds’’ and inserting ‘‘the Deposit Insur18 ance Fund (or any predecessor deposit insurance 

19 fund)’’; 

20 (19) in section 13 (12 U.S.C. 1823)—

21 (A) by striking ‘‘deposit insurance fund’’ 

22 each place that term appears and inserting 

23 ‘‘Deposit Insurance Fund’’; 

24 (B) in subsection (a)(1), by striking ‘‘Bank 

25 Insurance Fund, the Savings Association Insur-
63

HR 522 RFS 

1 ance Fund,’’ and inserting ‘‘Deposit Insurance 

2 Fund’’; 

3 (C) in subsection (c)(4)(E)—

4 (i) in the subparagraph heading, by 

5 striking ‘‘FUNDS’’ and inserting ‘‘FUND’’; 

6 and 

7 (ii) in clause (i), by striking ‘‘any in8 surance fund’’ and inserting ‘‘the Deposit 

9 Insurance Fund’’; 

10 (D) in subsection (c)(4)(G)(ii)—

11 (i) by striking ‘‘appropriate insurance 

12 fund’’ and inserting ‘‘Deposit Insurance 

13 Fund’’; 

14 (ii) by striking ‘‘the members of the 

15 insurance fund (of which such institution 

16 is a member)’’ and inserting ‘‘insured de17 pository institutions’’; 

18 (iii) by striking ‘‘each member’s’’ and 

19 inserting ‘‘each insured depository institu20 tion’s’’; and 

21 (iv) by striking ‘‘the member’s’’ each 

22 place that term appears and inserting ‘‘the 

23 institution’s’’; 

24 (E) in subsection (c), by striking para25 graph (11); 
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HR 522 RFS 

1 (F) in subsection (h), by striking ‘‘Bank 

2 Insurance Fund’’ and inserting ‘‘Deposit Insur3 ance Fund’’;

4 (G) in subsection (k)(4)(B)(i), by striking 

5 ‘‘Savings Association Insurance Fund member’’ 

6 and inserting ‘‘savings association’’; and 

7 (H) in subsection (k)(5)(A), by striking 

8 ‘‘Savings Association Insurance Fund mem9 bers’’ and inserting ‘‘savings associations’’; 

10 (20) in section 14(a) (12 U.S.C. 1824(a)), in 

11 the 5th sentence—

12 (A) by striking ‘‘Bank Insurance Fund or 

13 the Savings Association Insurance Fund’’ and 

14 inserting ‘‘Deposit Insurance Fund’’; and 

15 (B) by striking ‘‘each such fund’’ and in16 serting ‘‘the Deposit Insurance Fund’’; 

17 (21) in section 14(b) (12 U.S.C. 1824(b)), by 

18 striking ‘‘Bank Insurance Fund or Savings Associa19 tion Insurance Fund’’ and inserting ‘‘Deposit Insur20 ance Fund’’; 

21 (22) in section 14(c) (12 U.S.C. 1824(c)), by 

22 striking paragraph (3); 

23 (23) in section 14(d) (12 U.S.C. 1824(d))—
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HR 522 RFS 

1 (A) by striking ‘‘Bank Insurance Fund 

2 member’’ each place that term appears and in3 serting ‘‘insured depository institution’’; 

4 (B) by striking ‘‘Bank Insurance Fund 

5 members’’ each place that term appears and in6 serting ‘‘insured depository institutions’’; 

7 (C) by striking ‘‘Bank Insurance Fund’’ 

8 each place that term appears (other than in 

9 connection with a reference to a term amended 

10 by subparagraph (A) or (B) of this paragraph) 

11 and inserting ‘‘Deposit Insurance Fund’’; 

12 (D) by striking the subsection heading and 

13 inserting the following: 

14 ‘‘(d) BORROWING FOR THE DEPOSIT INSURANCE

15 FUND FROM INSURED DEPOSITORY INSTITUTIONS.—’’; 

16 (E) in paragraph (3), in the paragraph 

17 heading, by striking ‘‘BIF’’ and inserting ‘‘THE

18 DEPOSIT INSURANCE FUND’’; and 

19 (F) in paragraph (5), in the paragraph 

20 heading, by striking ‘‘BIF MEMBERS’’ and in21 serting ‘‘INSURED DEPOSITORY INSTITUTIONS’’; 

22 (24) in section 14 (12 U.S.C. 1824), by adding 

23 at the end the following new subsection: 

24 ‘‘(e) BORROWING FOR THE DEPOSIT INSURANCE

25 FUND FROM FEDERAL HOME LOAN BANKS.—
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HR 522 RFS 

1 ‘‘(1) IN GENERAL.—The Corporation may bor2 row from the Federal home loan banks, with the 

3 concurrence of the Federal Housing Finance Board, 

4 such funds as the Corporation considers necessary 

5 for the use of the Deposit Insurance Fund. 

6 ‘‘(2) TERMS AND CONDITIONS.—Any loan from 

7 any Federal home loan bank under paragraph (1) to 

8 the Deposit Insurance Fund shall—

9 ‘‘(A) bear a rate of interest of not less 

10 than the current marginal cost of funds to that 

11 bank, taking into account the maturities in12 volved; 

13 ‘‘(B) be adequately secured, as determined 

14 by the Federal Housing Finance Board; 

15 ‘‘(C) be a direct liability of the Deposit In16 surance Fund; and 

17 ‘‘(D) be subject to the limitations of sec18 tion 15(c).’’; 

19 (25) in section 15(c)(5) (12 U.S.C. 

20 1825(c)(5))—

21 (A) by striking ‘‘the Bank Insurance Fund 

22 or Savings Association Insurance Fund, respec23 tively’’ each place that term appears and insert24 ing ‘‘the Deposit Insurance Fund’’; and 
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HR 522 RFS 

1 (B) in subparagraph (B), by striking ‘‘the 

2 Bank Insurance Fund or the Savings Associa3 tion Insurance Fund, respectively’’ and insert4 ing ‘‘the Deposit Insurance Fund’’; 

5 (26) in section 17(a) (12 U.S.C. 1827(a))—

6 (A) in the subsection heading, by striking 

7 ‘‘BIF, SAIF,’’ and inserting ‘‘THE DEPOSIT IN8 SURANCE FUND’’; and 

9 (B) in paragraph (1)—

10 (i) by striking ‘‘the Bank Insurance 

11 Fund, the Savings Association Insurance 

12 Fund,’’ each place that term appears and 

13 inserting ‘‘the Deposit Insurance Fund’’; 

14 and 

15 (ii) in subparagraph (D), by striking 

16 ‘‘each insurance fund’’ and inserting ‘‘the 

17 Deposit Insurance Fund’’; 

18 (27) in section 17(d) (12 U.S.C. 1827(d)), by 

19 striking ‘‘, the Bank Insurance Fund, the Savings 

20 Association Insurance Fund,’’ each place that term 

21 appears and inserting ‘‘the Deposit Insurance 

22 Fund’’; 

23 (28) in section 18(m)(3) (12 U.S.C. 

24 1828(m)(3))—
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HR 522 RFS 

1 (A) by striking ‘‘Savings Association In2 surance Fund’’ in the 1st sentence of subpara3 graph (A) and inserting ‘‘Deposit Insurance 

4 Fund’’; 

5 (B) by striking ‘‘Savings Association In6 surance Fund member’’ in the last sentence of 

7 subparagraph (A) and inserting ‘‘savings asso8 ciation’’; and 

9 (C) by striking ‘‘Savings Association Insur10 ance Fund or the Bank Insurance Fund’’ in 

11 subparagraph (C) and inserting ‘‘Deposit Insur12 ance Fund’’; 

13 (29) in section 18(o) (12 U.S.C. 1828(o)), by 

14 striking ‘‘deposit insurance funds’’ and ‘‘deposit in15 surance fund’’ each place those terms appear and in16 serting ‘‘Deposit Insurance Fund’’; 

17 (30) in section 18(p) (12 U.S.C. 1828(p)), by 

18 striking ‘‘deposit insurance funds’’ and inserting 

19 ‘‘Deposit Insurance Fund’’; 

20 (31) in section 24 (12 U.S.C. 1831a)—

21 (A) in subsections (a)(1) and (d)(1)(A), by 

22 striking ‘‘appropriate deposit insurance fund’’ 

23 each place that term appears and inserting 

24 ‘‘Deposit Insurance Fund’’; 
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HR 522 RFS 

1 (B) in subsection (e)(2)(A), by striking 

2 ‘‘risk to’’ and all that follows through the pe3 riod and inserting ‘‘risk to the Deposit Insur4 ance Fund.’’; and

5 (C) in subsections (e)(2)(B)(ii) and 

6 (f)(6)(B), by striking ‘‘the insurance fund of 

7 which such bank is a member’’ each place that 

8 term appears and inserting ‘‘the Deposit Insur9 ance Fund’’; 

10 (32) in section 28 (12 U.S.C. 1831e), by strik11 ing ‘‘affected deposit insurance fund’’ each place 

12 that term appears and inserting ‘‘Deposit Insurance 

13 Fund’’; 

14 (33) by striking section 31 (12 U.S.C. 1831h); 

15 (34) in section 36(i)(3) (12 U.S.C. 

16 1831m(i)(3)), by striking ‘‘affected deposit insur17 ance fund’’ and inserting ‘‘Deposit Insurance 

18 Fund’’; 

19 (35) in section 37(a)(1)(C) (12 U.S.C. 

20 1831n(a)(1)(C)), by striking ‘‘insurance funds’’ and 

21 inserting ‘‘Deposit Insurance Fund’’; 

22 (36) in section 38 (12 U.S.C. 1831o), by strik23 ing ‘‘the deposit insurance fund’’ each place that 

24 term appears and inserting ‘‘the Deposit Insurance 

25 Fund’’; 
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HR 522 RFS 

1 (37) in section 38(a) (12 U.S.C. 1831o(a)), in 

2 the subsection heading, by striking ‘‘FUNDS’’ and in3 serting ‘‘FUND’’; 

4 (38) in section 38(k) (12 U.S.C. 1831o(k))—

5 (A) in paragraph (1), by striking ‘‘a de6 posit insurance fund’’ and inserting ‘‘the De7 posit Insurance Fund’’; 

8 (B) in paragraph (2), by striking ‘‘A de9 posit insurance fund’’ and inserting ‘‘The De10 posit Insurance Fund’’; and 

11 (C) in paragraphs (2)(A) and (3)(B), by 

12 striking ‘‘the deposit insurance fund’s outlays’’ 

13 each place that term appears and inserting ‘‘the 

14 outlays of the Deposit Insurance Fund’’; and 

15 (39) in section 38(o) (12 U.S.C. 1831o(o))—

16 (A) by striking ‘‘ASSOCIATIONS.—’’ and all 

17 that follows through ‘‘Subsections (e)(2)’’ and 

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

19 (B) by redesignating subparagraphs (A), 

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

21 respectively, and moving the margins 2 ems to 

22 the left; and 

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

24 by redesignating clauses (i) and (ii) as subpara-
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HR 522 RFS 

1 graphs (A) and (B), respectively, and moving 

2 the margins 2 ems to the left. 

3 (b) EFFECTIVE DATE.—This section and the amend4 ments made by this section shall take effect on the first 

5 day of the first calendar quarter that begins after the end 

6 of the 90-day period beginning on the date of the enact7 ment of this Act. 

8 SEC. 13. OTHER TECHNICAL AND CONFORMING AMEND9 MENTS RELATING TO THE MERGER OF THE 

10 BIF AND SAIF. 

11 (a) SECTION 5136 OF THE REVISED STATUTES.—

12 The paragraph designated the ‘‘Eleventh’’ of section 5136 

13 of the Revised Statutes of the United States (12 U.S.C. 

14 24) is amended in the 5th sentence, by striking ‘‘affected 

15 deposit insurance fund’’ and inserting ‘‘Deposit Insurance 

16 Fund’’. 

17 (b) INVESTMENTS PROMOTING PUBLIC WELFARE; 

18 LIMITATIONS ON AGGREGATE INVESTMENTS.—The 23d 

19 undesignated paragraph of section 9 of the Federal Re20 serve Act (12 U.S.C. 338a) is amended in the 4th sen21 tence, by striking ‘‘affected deposit insurance fund’’ and 

22 inserting ‘‘Deposit Insurance Fund’’. 

23 (c) ADVANCES TO CRITICALLY UNDERCAPITALIZED

24 DEPOSITORY INSTITUTIONS.—Section 10B(b)(3)(A)(ii) of 

25 the Federal Reserve Act (12 U.S.C. 347b(b)(3)(A)(ii)) is 
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HR 522 RFS 

1 amended by striking ‘‘any deposit insurance fund in’’ and 

2 inserting ‘‘the Deposit Insurance Fund of’’. 

3 (d) AMENDMENTS TO THE BALANCED BUDGET AND

4 EMERGENCY DEFICIT CONTROL ACT OF 1985.—Section 

5 255(g)(1)(A) of the Balanced Budget and Emergency 

6 Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is 

7 amended—

8 (1) by striking ‘‘Bank Insurance Fund’’ and in9 serting ‘‘Deposit Insurance Fund’’; and 

10 (2) by striking ‘‘Federal Deposit Insurance Cor11 poration, Savings Association Insurance Fund (51–

12 4066–0–3–373);’’. 

13 (e) AMENDMENTS TO THE FEDERAL HOME LOAN

14 BANK ACT.—The Federal Home Loan Bank Act (12 

15 U.S.C. 1421 et seq.) is amended—

16 (1) in section 11(k) (12 U.S.C. 1431(k))—

17 (A) in the subsection heading, by striking 

18 ‘‘SAIF’’ and inserting ‘‘THE DEPOSIT INSUR19 ANCE FUND’’; and 

20 (B) by striking ‘‘Savings Association In21 surance Fund’’ each place such term appears 

22 and inserting ‘‘Deposit Insurance Fund’’; 

23 (2) in section 21 (12 U.S.C. 1441)—
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HR 522 RFS 

1 (A) in subsection (f)(2), by striking ‘‘, ex2 cept that’’ and all that follows through the end 

3 of the paragraph and inserting a period; and 

4 (B) in subsection (k), by striking para5 graph (4); 

6 (3) in section 21A(b)(4)(B) (12 U.S.C. 

7 1441a(b)(4)(B)), by striking ‘‘affected deposit insur8 ance fund’’ and inserting ‘‘Deposit Insurance 

9 Fund’’; 

10 (4) in section 21A(b)(6)(B) (12 U.S.C. 

11 1441a(b)(6)(B))—

12 (A) in the subparagraph heading, by strik13 ing ‘‘SAIF-INSURED BANKS’’ and inserting 

14 ‘‘CHARTER CONVERSIONS’’; and 

15 (B) by striking ‘‘Savings Association In16 surance Fund member’’ and inserting ‘‘savings 

17 association’’; 

18 (5) in section 21A(b)(10)(A)(iv)(II) (12 U.S.C. 

19 1441a(b)(10)(A)(iv)(II)), by striking ‘‘Savings Asso20 ciation Insurance Fund’’ and inserting ‘‘Deposit In21 surance Fund’’; 

22 (6) in section 21A(n)(6)(E)(iv) (12 U.S.C. 

23 1441(n)(6)(E)(iv)), by striking ‘‘Federal deposit in24 surance funds’’ and inserting ‘‘the Deposit Insur25 ance Fund’’; 
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HR 522 RFS 

1 (7) in section 21B(e) (12 U.S.C. 1441b(e))—

2 (A) in paragraph (5), by inserting ‘‘as of 

3 the date of funding’’ after ‘‘Savings Association 

4 Insurance Fund members’’ each place that term 

5 appears; and 

6 (B) by striking paragraphs (7) and (8); 

7 and

8 (8) in section 21B(k) (12 U.S.C. 1441b(k))—

9 (A) by inserting before the colon ‘‘, the fol10 lowing definitions shall apply’’; 

11 (B) by striking paragraph (8); and 

12 (C) by redesignating paragraphs (9) and 

13 (10) as paragraphs (8) and (9), respectively. 

14 (f) AMENDMENTS TO THE HOME OWNERS’ LOAN

15 ACT.—The Home Owners’ Loan Act (12 U.S.C. 1461 et 

16 seq.) is amended—

17 (1) in section 5 (12 U.S.C. 1464)—

18 (A) in subsection (c)(5)(A), by striking 

19 ‘‘that is a member of the Bank Insurance 

20 Fund’’;

21 (B) in subsection (c)(6), by striking ‘‘As 

22 used in this subsection—’’ and inserting ‘‘For 

23 purposes of this subsection, the following defini24 tions shall apply:’’; 
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HR 522 RFS 

1 (C) in subsection (o)(1), by striking ‘‘that 

2 is a Bank Insurance Fund member’’; 

3 (D) in subsection (o)(2)(A), by striking ‘‘a 

4 Bank Insurance Fund member until such time 

5 as it changes its status to a Savings Association 

6 Insurance Fund member’’ and inserting ‘‘in7 sured by the Deposit Insurance Fund’’; 

8 (E) in subsection (t)(5)(D)(iii)(II), by 

9 striking ‘‘affected deposit insurance fund’’ and 

10 inserting ‘‘Deposit Insurance Fund’’; 

11 (F) in subsection (t)(7)(C)(i)(I), by strik12 ing ‘‘affected deposit insurance fund’’ and in13 serting ‘‘Deposit Insurance Fund’’; and 

14 (G) in subsection (v)(2)(A)(i), by striking 

15 ‘‘the Savings Association Insurance Fund’’ and 

16 inserting ‘‘or the Deposit Insurance Fund’’; and 

17 (2) in section 10 (12 U.S.C. 1467a)—

18 (A) in subsection (c)(6)(D), by striking 

19 ‘‘this title’’ and inserting ‘‘this Act’’; 

20 (B) in subsection (e)(1)(B), by striking 

21 ‘‘Savings Association Insurance Fund or Bank 

22 Insurance Fund’’ and inserting ‘‘Deposit Insur23 ance Fund’’; 

24 (C) in subsection (e)(2), by striking ‘‘Sav25 ings Association Insurance Fund or the Bank 
76

HR 522 RFS 

1 Insurance Fund’’ and inserting ‘‘Deposit Insur2 ance Fund’’; 

3 (D) in subsection (e)(4)(B), by striking 

4 ‘‘subsection (1)’’ and inserting ‘‘subsection (l)’’; 

5 (E) in subsection (g)(3)(A), by striking 

6 ‘‘(5) of this section’’ and inserting ‘‘(5) of this 

7 subsection’’; 

8 (F) in subsection (i), by redesignating 

9 paragraph (5) as paragraph (4); 

10 (G) in subsection (m)(3), by striking sub11 paragraph (E) and by redesignating subpara12 graphs (F), (G), and (H) as subparagraphs 

13 (E), (F), and (G), respectively; 

14 (H) in subsection (m)(7)(A), by striking 

15 ‘‘during period’’ and inserting ‘‘during the pe16 riod’’; and 

17 (I) in subsection (o)(3)(D), by striking 

18 ‘‘sections 5(s) and (t) of this Act’’ and inserting 

19 ‘‘subsections (s) and (t) of section 5’’. 

20 (g) AMENDMENTS TO THE NATIONAL HOUSING

21 ACT.—The National Housing Act (12 U.S.C. 1701 et 

22 seq.) is amended—

23 (1) in section 317(b)(1)(B) (12 U.S.C. 

24 1723i(b)(1)(B)), by striking ‘‘Bank Insurance Fund 

25 for banks or through the Savings Association Insur-
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HR 522 RFS 

1 ance Fund for savings associations’’ and inserting 

2 ‘‘Deposit Insurance Fund’’; and 

3 (2) in section 536(b)(1)(B)(ii) (12 U.S.C. 

4 1735f–14(b)(1)(B)(ii)), by striking ‘‘Bank Insurance 

5 Fund for banks and through the Savings Association 

6 Insurance Fund for savings associations’’ and insert7 ing ‘‘Deposit Insurance Fund’’. 

8 (h) AMENDMENTS TO THE FINANCIAL INSTITUTIONS

9 REFORM, RECOVERY, AND ENFORCEMENT ACT OF

10 1989.—The Financial Institutions Reform, Recovery, and 

11 Enforcement Act of 1989 (12 U.S.C. 1811 note) is 

12 amended—

13 (1) in section 951(b)(3)(B) (12 U.S.C. 

14 1833a(b)(3)(B)), by inserting ‘‘and after the merger 

15 of such funds, the Deposit Insurance Fund,’’ after 

16 ‘‘the Savings Association Insurance Fund,’’; and 

17 (2) in section 1112(c)(1)(B) (12 U.S.C. 

18 3341(c)(1)(B)), by striking ‘‘Bank Insurance Fund, 

19 the Savings Association Insurance Fund,’’ and in20 serting ‘‘Deposit Insurance Fund’’. 

21 (i) AMENDMENT TO THE BANK HOLDING COMPANY

22 ACT OF 1956.—The Bank Holding Company Act of 1956 

23 (12 U.S.C. 1841 et seq.) is amended— 
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HR 522 RFS 

1 (1) in section 2(j)(2) (12 U.S.C. 1841(j)(2)), by 

2 striking ‘‘Savings Association Insurance Fund’’ and 

3 inserting ‘‘Deposit Insurance Fund’’; and 

4 (2) in section 3(d)(1)(D)(iii) (12 U.S.C. 

5 1842(d)(1)(D)(iii)), by striking ‘‘appropriate deposit 

6 insurance fund’’ and inserting ‘‘Deposit Insurance 

7 Fund’’. 

8 (j) AMENDMENTS TO THE GRAMM-LEACH-BLILEY

9 ACT.—Section 114 of the Gramm-Leach-Bliley Act (12 

10 U.S.C. 1828a) is amended by striking ‘‘any Federal de11 posit insurance fund’’ in subsection (a)(1)(B), paragraphs 

12 (2)(B) and (4)(B) of subsection (b), and subsection 

13 (c)(1)(B), each place that term appears and inserting ‘‘the 

14 Deposit Insurance Fund’’. 

15 (k) EFFECTIVE DATE.—This section and the amend16 ments made by this section shall take effect on the first 

17 day of the first calendar quarter that begins after the end 

18 of the 90-day period beginning on the date of the enact19 ment of this Act.

Passed the House of Representatives April 2, 2003. 

Attest: JEFF TRANDAHL, 

Clerk.