IB 

Union Calendar No. 31

108TH CONGRESS 

1ST SESSION H. R. 522

[Report No. 108–50] 

To reform the Federal deposit insurance system, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 4, 2003

Mr. BACHUS (for himself, Mr. OXLEY, Mr. FRANK of Massachusetts, Mr. 

LEACH, Mr. KANJORSKI, Mr. BEREUTER, Ms. WATERS, Mr. ROYCE, Mrs. 

MALONEY, Mr. NEY, Mr. FORD, Mr. GILLMOR, Mr. GONZALEZ, Mr. 

LATOURETTE, Mr. HINOJOSA, Mr. JONES of North Carolina, Mrs. 

MCCARTHY of New York, Mrs. BIGGERT, Mr. DAVIS of Alabama, Mr. 

GREEN of Wisconsin, Mr. GRIJALVA, Mr. GARY G. MILLER of California, 

Ms. HART, Mr. TIBERI, Mr. RENZI, Mr. SIMMONS, Mr. UPTON, and Mr. 

BEAUPREZ) introduced the following bill; which was referred to the Committee on Financial Services 

MARCH 27, 2003

Additional sponsors: Mr. BURR, Mr. SOUDER, Mr. CRAMER, Mr. ADERHOLT, 

Mr. ROGERS of Alabama, Mr. NETHERCUTT, Mr. UDALL of Colorado, 

Mr. OSBORNE, Mr. EMANUEL, Ms. EDDIE BERNICE JOHNSON of Texas, 

Mr. BACA, Mr. BONNER, Mr. KING of New York, Mrs. CAPITO, Ms. HARRIS, Mr. BARTLETT of Maryland, Mr. MANZULLO, Mr. TANCREDO, Mr. 

MCINNIS, Mr. EVERETT, Mr. BAIRD, Mr. BOSWELL, Mr. TIAHRT, Mr. 

MORAN of Kansas, Mr. GOODLATTE, Mr. HOLDEN, Mr. MCGOVERN, Mr. 

TAUZIN, Mr. WELDON of Pennsylvania, and Mr. COMBEST

MARCH 27, 2003

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 
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[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on February 4, 2003] 

A BILL

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,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

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

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

7 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.

8 SEC. 2. MERGING THE BIF AND SAIF. 

9 (a) IN GENERAL.—
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1 (1) MERGER.—The Bank Insurance Fund and 

2 the Savings Association Insurance Fund shall be 

3 merged into the Deposit Insurance Fund. 

4 (2) DISPOSITION OF ASSETS AND LIABILITIES.—

5 All assets and liabilities of the Bank Insurance Fund 

6 and the Savings Association Insurance Fund shall be 

7 transferred to the Deposit Insurance Fund. 

8 (3) NO SEPARATE EXISTENCE.—The separate ex9 istence of the Bank Insurance Fund and the Savings 

10 Association Insurance Fund shall cease on the effec11 tive date of the merger thereof under this section. 

12 (b) REPEAL OF OUTDATED MERGER PROVISION.—Sec13 tion 2704 of the Deposit Insurance Funds Act of 1996 (12 

14 U.S.C. 1821 note) is repealed. 

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

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

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

18 of the enactment of this Act. 

19 SEC. 3. INCREASE IN DEPOSIT INSURANCE COVERAGE. 

20 (a) IN GENERAL.—Section 11(a)(1) of the Federal De21 posit Insurance Act (12 U.S.C. 1821(a)(1)) is amended—

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

23 the following new subparagraph: 

24 ‘‘(B) NET AMOUNT OF INSURED DEPOSIT.—

25 The net amount due to any depositor at an in-
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1 sured depository institution shall not exceed the 

2 standard maximum deposit insurance amount as 

3 determined in accordance with subparagraphs 

4 (C), (D), (E) and (F) and paragraph (3).’’; and 

5 (2) by adding at the end the following new sub6 paragraphs: 

7 ‘‘(E) STANDARD MAXIMUM DEPOSIT INSUR8 ANCE AMOUNT DEFINED.—For purposes of this 

9 Act, the term ‘standard maximum deposit insur10 ance amount’ means—

11 ‘‘(i) until the effective date of final reg12 ulations prescribed pursuant to section 

13 9(a)(2) of the Federal Deposit Insurance 

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

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

16 $130,000, adjusted as provided under sub17 paragraph (F). 

18 ‘‘(F) INFLATION ADJUSTMENT.—

19 ‘‘(i) IN GENERAL.—By April 1 of 

20 2005, and the 1st day of each subsequent 5-

21 year period, the Board of Directors and the 

22 National Credit Union Administration 

23 Board shall jointly prescribe the amount by 

24 which the standard maximum deposit in25 surance amount and the standard max-
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1 imum share insurance amount (as defined 

2 in section 207(k) of the Federal Credit 

3 Union Act) applicable to any depositor at 

4 an insured depository institution shall be 

5 increased by calculating the product of—

6 ‘‘(I) $130,000; and 

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

8 Personal Consumption Expenditures

9 Chain-Type Index (or any successor 

10 index thereto), published by the De11 partment of Commerce, as of December 

12 31 of the year preceding the year in 

13 which the adjustment is calculated 

14 under this clause, to the value of such 

15 index as of the date this subparagraph 

16 takes effect. 

17 ‘‘(ii) ROUNDING.—If the amount deter18 mined under clause (ii) for any period is 

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

20 determined shall be rounded to the nearest 

21 $10,000. 

22 ‘‘(iii) PUBLICATION AND REPORT TO

23 THE CONGRESS.—Not later than April 5 of 

24 any calendar year in which an adjustment 

25 is required to be calculated under clause (i) 
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1 to the standard maximum deposit insurance 

2 amount and the standard maximum share 

3 insurance amount under such clause, the 

4 Board of Directors and the National Credit 

5 Union Administration Board shall—

6 ‘‘(I) publish in the Federal Reg7 ister the standard maximum deposit 

8 insurance amount, the standard max9 imum share insurance amount, and 

10 the amount of coverage under para11 graph (3)(A) and section 207(k)(3) of 

12 the Federal Credit Union Act, as so 

13 calculated; and 

14 ‘‘(II) jointly submit a report to 

15 the Congress containing the amounts 

16 described in subclause (I). 

17 ‘‘(iv) 6-MONTH IMPLEMENTATION PE18 RIOD.—Unless an Act of Congress enacted 

19 before July 1 of the calendar year in which 

20 an adjustment is required to be calculated 

21 under clause (i) provides otherwise, the in22 crease in the standard maximum deposit 

23 insurance amount and the standard max24 imum share insurance amount shall take ef-
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1 fect on January 1 of the year immediately 

2 succeeding such calendar year.’’. 

3 (b) COVERAGE FOR CERTAIN EMPLOYEE BENEFIT

4 PLAN DEPOSITS.—Section 11(a)(1)(D) of the Federal De5 posit Insurance Act (12 U.S.C. 1821(a)(1)(D)) is amended 

6 to read as follows: 

7 ‘‘(D) COVERAGE FOR CERTAIN EMPLOYEE

8 BENEFIT PLAN DEPOSITS.—

9 ‘‘(i) PASS-THROUGH INSURANCE.—The 

10 Corporation shall provide pass-through de11 posit insurance for the deposits of any em12 ployee benefit plan. 

13 ‘‘(ii) PROHIBITION ON ACCEPTANCE OF

14 BENEFIT PLAN DEPOSITS.—An insured de15 pository institution that is not well capital16 ized or adequately capitalized may not ac17 cept employee benefit plan deposits. 

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

19 this subparagraph, the following definitions 

20 shall apply: 

21 ‘‘(I) CAPITAL STANDARDS.—The 

22 terms ‘well capitalized’ and ‘ade23 quately capitalized’ have the same 

24 meanings as in section 38. 
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1 ‘‘(II) EMPLOYEE BENEFIT

2 PLAN.—The term ‘employee benefit 

3 plan’ has the same meaning as in 

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

5 eligible deferred compensation plan de6 scribed in section 457 of the Internal 

7 Revenue Code of 1986. 

8 ‘‘(III) PASS-THROUGH DEPOSIT

9 INSURANCE.—The term ‘pass-through 

10 deposit insurance’ means, with respect 

11 to an employee benefit plan, deposit 

12 insurance coverage provided on a pro 

13 rata basis to the participants in the 

14 plan, in accordance with the interest of 

15 each participant.’’. 

16 (c) DOUBLING OF DEPOSIT INSURANCE FOR CERTAIN

17 RETIREMENT ACCOUNTS.—Section 11(a)(3)(A) of the Fed18 eral Deposit Insurance Act (12 U.S.C. 1821(a)(3)(A)) is 

19 amended by striking ‘‘$100,000’’ and inserting ‘‘2 times the 

20 standard maximum deposit insurance amount (as deter21 mined under paragraph (1))’’. 

22 (d) INCREASED INSURANCE COVERAGE FOR MUNIC23 IPAL DEPOSITS.—Section 11(a)(2) of the Federal Deposit 

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

25 (1) in subparagraph (A)—
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1 (A) by moving the margins of clauses (i) 

2 through (v) 4 ems to the right; 

3 (B) by striking, in the matter following 

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

5 follows through the period; and 

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

7 clause (v) and inserting a period;

8 (2) by striking ‘‘(2)(A) Notwithstanding’’ and all 

9 that follows through ‘‘a depositor who is—’’ and in10 serting the following: 

11 ‘‘(2) MUNICIPAL DEPOSITORS.—

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

13 limitation in this Act or in any other provision 

14 of law relating to the amount of deposit insur15 ance available to any 1 depositor—

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

17 the purpose of determining the amount of 

18 insured deposits under this subsection, be 

19 deemed to be a depositor separate and dis20 tinct from any other officer, employee, or 

21 agent of the United States or any public 

22 unit referred to in subparagraph (E); and 

23 ‘‘(ii) except as provided in subpara24 graph (B), the deposits of a municipal de25 positor shall be insured in an amount equal 
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1 to the standard maximum deposit insurance 

2 amount (as determined under paragraph 

3 (1)). 

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

5 In the case of the deposits of an in-State munic6 ipal depositor described in clause (ii), (iii), (iv), 

7 or (v) of subparagraph (E) at an insured deposi8 tory institution, such deposits shall be insured in 

9 an amount not to exceed the lesser of—

10 ‘‘(i) $2,000,000; or 

11 ‘‘(ii) the sum of the standard max12 imum deposit insurance amount and 80 

13 percent of the amount of any deposits in ex14 cess of the standard maximum deposit in15 surance amount. 

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

17 State may deny to insured depository institu18 tions within its jurisdiction the authority to ac19 cept deposits insured under this paragraph, or 

20 prohibit the making of such deposits in such in21 stitutions by any in-State municipal depositor. 

22 ‘‘(D) IN-STATE MUNICIPAL DEPOSITOR DE23 FINED.—For purposes of this paragraph, the 

24 term ‘in-State municipal depositor’ means a mu25 nicipal depositor that is located in the same 
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1 State as the office or branch of the insured de2 pository institution at which the deposits of that 

3 depositor are held. 

4 ‘‘(E) MUNICIPAL DEPOSITOR.—In this 

5 paragraph, the term ‘municipal depositor’ means 

6 a depositor that is—’’; 

7 (3) by striking ‘‘(B) The’’ and inserting the fol8 lowing: 

9 ‘‘(F) AUTHORITY TO LIMIT DEPOSITS.—

10 The’’; and 

11 (4) by striking ‘‘depositor referred to in subpara12 graph (A) of this paragraph’’ each place such term 

13 appears and inserting ‘‘municipal depositor’’. 

14 (e) TECHNICAL AND CONFORMING AMENDMENT RE15 LATING TO INSURANCE OF TRUST FUNDS.—Paragraphs (1) 

16 and (3) of section 7(i) of the Federal Deposit Insurance Act 

17 (12 U.S.C. 1817(i)) are each amended by striking 

18 ‘‘$100,000’’ and inserting ‘‘the standard maximum deposit 

19 insurance amount (as determined under section 11(a)(1))’’. 

20 (f) OTHER TECHNICAL AND CONFORMING AMEND21 MENTS.—

22 (1) Section 11(m)(6) of the Federal Deposit In23 surance Act (12 U.S.C. 1821(m)(6)) is amended by 

24 striking ‘‘$100,000’’ and inserting ‘‘an amount equal 
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1 to the standard maximum deposit insurance 

2 amount’’. 

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

4 Deposit Insurance Act (12 U.S.C. 1828(a)) is amend5 ed to read as follows: 

6 ‘‘(a) INSURANCE LOGO.—

7 ‘‘(1) INSURED DEPOSITORY INSTITUTIONS.—

8 ‘‘(A) IN GENERAL.—Each insured deposi9 tory institution shall display at each place of 

10 business maintained by that institution a sign 

11 or signs relating to the insurance of the deposits 

12 of the institution, in accordance with regulations 

13 to be prescribed by the Corporation. 

14 ‘‘(B) STATEMENT TO BE INCLUDED.—Each 

15 sign required under subparagraph (A) shall in16 clude a statement that insured deposits are 

17 backed by the full faith and credit of the United 

18 States Government. 

19 ‘‘(2) REGULATIONS.—The Corporation shall pre20 scribe regulations to carry out this subsection, includ21 ing regulations governing the substance of signs re22 quired by paragraph (1) and the manner of display 

23 or use of such signs. 

24 ‘‘(3) PENALTIES.—For each day that an insured 

25 depository institution continues to violate this sub-
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1 section or any regulation issued under this subsection, 

2 it shall be subject to a penalty of not more than $100, 

3 which the Corporation may recover for its use.’’. 

4 (3) Section 43(d) of the Federal Deposit Insur5 ance Act (12 U.S.C. 1831t(d)) is amended by striking 

6 ‘‘$100,000’’ and inserting ‘‘an amount equal to the 

7 standard maximum deposit insurance amount’’.

8 (4) Section 6 of the International Banking Act 

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

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

11 term appears and inserting ‘‘an amount equal to 

12 the standard maximum deposit insurance 

13 amount’’; and 

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

15 subsection: 

16 ‘‘(e) STANDARD MAXIMUM DEPOSIT INSURANCE

17 AMOUNT DEFINED.—For purposes of this section, the term 

18 ‘standard maximum deposit insurance amount’ means the 

19 amount of the maximum amount of deposit insurance as 

20 determined under section 11(a)(1) of the Federal Deposit 

21 Insurance Act.’’. 

22 (g) CONFORMING CHANGE TO CREDIT UNION SHARE

23 INSURANCE FUND.—

24 (1) IN GENERAL.—Section 207(k) of the Federal 

25 Credit Union Act (12 U.S.C. 1787(k)) is amended—
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1 (A) by striking ‘‘(k)(1)’’ and all that follows 

2 through the end of paragraph (1) and inserting 

3 the following: 

4 ‘‘(k) INSURED AMOUNTS PAYABLE.—

5 ‘‘(1) NET INSURED AMOUNT.—

6 ‘‘(A) IN GENERAL.—Subject to the provi7 sions of paragraph (2), the net amount of share 

8 insurance payable to any member at an insured 

9 credit union shall not exceed the total amount of 

10 the shares or deposits in the name of the member 

11 (after deducting offsets), less any part thereof 

12 which is in excess of the standard maximum 

13 share insurance amount, as determined in ac14 cordance with this paragraph and paragraphs 

15 (5) and (6), and consistently with actions taken 

16 by the Federal Deposit Insurance Corporation 

17 under section 11(a) of the Federal Deposit Insur18 ance Act. 

19 ‘‘(B) AGGREGATION.—Determination of the 

20 net amount of share insurance under subpara21 graph (A), shall be in accordance with such regu22 lations as the Board may prescribe, and, in de23 termining the amount payable to any member, 

24 there shall be added together all accounts in the 

25 credit union maintained by that member for that 
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1 member’s own benefit, either in the member’s 

2 own name or in the names of others. 

3 ‘‘(C) AUTHORITY TO DEFINE THE EXTENT

4 OF COVERAGE.—The Board may define, with 

5 such classifications and exceptions as it may 

6 prescribe, the extent of the share insurance cov7 erage provided for member accounts, including 

8 member accounts in the name of a minor, in 

9 trust, or in joint tenancy.’’; 

10 (B) in paragraph (2)—

11 (i) in subparagraph (A)—

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

13 moving the margins 4 ems to the right; 

14 (II) in the matter following clause 

15 (v), by striking ‘‘his account’’ and all 

16 that follows through the period; and 

17 (III) by striking the semicolon at 

18 the end of clause (v) and inserting a 

19 period; 

20 (ii) by striking ‘‘(2)(A) Notwith21 standing’’ and all that follows through ‘‘a 

22 depositor or member who is—’’ and insert23 ing the following: 

24 ‘‘(2) MUNICIPAL DEPOSITORS OR MEMBERS.—
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1 ‘‘(A) IN GENERAL.—Notwithstanding any 

2 limitation in this Act or in any other provision 

3 of law relating to the amount of insurance avail4 able to any 1 depositor or member, deposits or 

5 shares of a municipal depositor or member shall 

6 be insured in an amount equal to the standard 

7 maximum share insurance amount (as deter8 mined under paragraph (5)), except as provided 

9 in subparagraph (B). 

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

11 In the case of the deposits of an in-State munic12 ipal depositor described in clause (ii), (iii), (iv), 

13 or (v) of subparagraph (E) at an insured credit 

14 union, such deposits shall be insured in an 

15 amount equal to the lesser of—

16 ‘‘(i) $2,000,000; or 

17 ‘‘(ii) the sum of the standard max18 imum deposit insurance amount and 80 

19 percent of the amount of any deposits in ex20 cess of the standard maximum deposit in21 surance amount. 

22 ‘‘(C) RULE OF CONSTRUCTION.—No provi23 sion of this paragraph shall be construed as au24 thorizing an insured credit union to accept the 

25 deposits of a municipal depositor in an amount 
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1 greater than such credit union is authorized to 

2 accept under any other provision of Federal or 

3 State law. 

4 ‘‘(D) IN-STATE MUNICIPAL DEPOSITOR DE5 FINED.—For purposes of this paragraph, the 

6 term ‘in-State municipal depositor’ means a mu7 nicipal depositor that is located in the same

8 State as the office or branch of the insured credit 

9 union at which the deposits of that depositor are 

10 held. 

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

12 paragraph, the term ‘municipal depositor’ means 

13 a depositor that is—’’; 

14 (iii) by striking ‘‘(B) The’’ and insert15 ing the following: 

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

17 The’’; and 

18 (iv) by striking ‘‘depositor or member 

19 referred to in subparagraph (A)’’ and in20 serting ‘‘municipal depositor or member’’; 

21 and 

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

23 paragraphs: 

24 ‘‘(4) COVERAGE FOR CERTAIN EMPLOYEE BEN25 EFIT PLAN DEPOSITS.—
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1 ‘‘(A) PASS-THROUGH INSURANCE.—The Ad2 ministration shall provide pass-through share in3 surance for the deposits or shares of any em4 ployee benefit plan. 

5 ‘‘(B) PROHIBITION ON ACCEPTANCE OF DE6 POSITS.—An insured credit union that is not 

7 well capitalized or adequately capitalized may 

8 not accept employee benefit plan deposits. 

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

10 paragraph, the following definitions shall apply: 

11 ‘‘(i) CAPITAL STANDARDS.—The terms 

12 ‘well capitalized’ and ‘adequately capital13 ized’ have the same meanings as in section 

14 216(c). 

15 ‘‘(ii) EMPLOYEE BENEFIT PLAN.—The 

16 term ‘employee benefit plan’—

17 ‘‘(I) has the meaning given to 

18 such term in section 3(3) of the Em19 ployee Retirement Income Security Act 

20 of 1974; 

21 ‘‘(II) includes any plan described 

22 in section 401(d) of the Internal Rev23 enue Code of 1986; and 

24 ‘‘(III) includes any eligible de25 ferred compensation plan described in 
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1 section 457 of the Internal Revenue 

2 Code of 1986. 

3 ‘‘(iii) PASS-THROUGH SHARE INSUR4 ANCE.—The term ‘pass-through share insur5 ance’ means, with respect to an employee 

6 benefit plan, insurance coverage provided 

7 on a pro rata basis to the participants in 

8 the plan, in accordance with the interest of 

9 each participant. 

10 ‘‘(D) RULE OF CONSTRUCTION.—No provi11 sion of this paragraph shall be construed as au12 thorizing an insured credit union to accept the 

13 deposits of an employee benefit plan in an 

14 amount greater than such credit union is author15 ized to accept under any other provision of Fed16 eral or State law. 

17 ‘‘(5) STANDARD MAXIMUM SHARE INSURANCE

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

19 term ‘standard maximum share insurance amount’ 

20 means—

21 ‘‘(A) until the effective date of final regula22 tions prescribed pursuant to section 9(a)(2) of 

23 the Federal Deposit Insurance Reform Act of 

24 2003, $100,000; and 
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1 ‘‘(B) on and after such effective date, 

2 $130,000, adjusted as provided under section 

3 11(a)(1)(F) of the Federal Deposit Insurance 

4 Act.’’. 

5 (2) DOUBLING OF SHARE INSURANCE FOR CER6 TAIN RETIREMENT ACCOUNTS.—Section 207(k)(3) of 

7 the Federal Credit Union Act (12 U.S.C. 1787(k)(3)) 

8 is amended by striking ‘‘$100,000’’ and inserting ‘‘2 

9 times the standard maximum share insurance 

10 amount (as determined under paragraph (1))’’. 

11 (h) EFFECTIVE DATE.—This section and the amend12 ments made by this section shall take effect on the date the 

13 final regulations required under section 9(a)(2) take 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 Directors 

23 shall set assessments for insured depository insti24 tutions in such amounts as the Board of Direc-
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1 tors may determine to be necessary or appro2 priate, subject to subparagraph (D). 

3 ‘‘(B) FACTORS TO BE CONSIDERED.—In set4 ting assessments under subparagraph (A), the 

5 Board of Directors shall consider the following 

6 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 Insurance 

11 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 system, 

18 including the requirement under such para19 graph to maintain a risk-based system. 

20 ‘‘(v) Any other factors the Board of Di21 rectors may determine to be appropriate.’’; 

22 and 

23 (2) by inserting after subparagraph (C) the fol24 lowing new subparagraph: 

25 ‘‘(D) BASE RATE FOR ASSESSMENTS.—
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1 ‘‘(i) IN GENERAL.—In setting assess2 ment rates pursuant to subparagraph (A), 

3 the Board of Directors shall establish a base 

4 rate of not more than 1 basis point (exclu5 sive of any credit or dividend) for those in6 sured depository institutions in the lowest7 risk category under the risk-based assess8 ment system established pursuant to para9 graph (1). No insured depository institution 

10 shall be barred from the lowest-risk category 

11 solely because of size. 

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

13 not apply during any period in which the 

14 reserve ratio of the Deposit Insurance Fund 

15 is less than the amount which is equal to 

16 1.15 percent of the aggregate estimated in17 sured deposits.’’. 

18 (b) ASSESSMENT RECORDKEEPING PERIOD SHORT19 ENED.—Paragraph (5) of section 7(b) of the Federal De20 posit Insurance Act (12 U.S.C. 1817(b)) is amended to read 

21 as follows: 

22 ‘‘(5) DEPOSITORY INSTITUTION REQUIRED TO

23 MAINTAIN ASSESSMENT-RELATED RECORDS.—Each 

24 insured depository institution shall maintain all 

25 records that the Corporation may require for 
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1 verifying the correctness of any assessment on the in2 sured depository institution under this subsection 

3 until the later of—

4 ‘‘(A) the end of the 3-year period beginning 

5 on the due date of the assessment; or 

6 ‘‘(B) in the case of a dispute between the in7 sured depository institution and the Corporation 

8 with respect to such assessment, the date of a 

9 final determination of any such dispute.’’. 

10 (c) INCREASE IN FEES FOR LATE ASSESSMENT PAY11 MENTS.—Subsection (h) of section 18 of the Federal Deposit 

12 Insurance Act (12 U.S.C. 1828(h)) is amended to read as 

13 follows: 

14 ‘‘(h) PENALTY FOR FAILURE TO TIMELY PAY ASSESS15 MENTS.—

16 ‘‘(1) IN GENERAL.—Any insured depository in17 stitution which fails or refuses to pay any assessment 

18 shall be subject to a penalty in an amount not more 

19 than 1 percent of the amount of the assessment due 

20 for each day that such violation continues. 

21 ‘‘(2) EXCEPTION IN CASE OF DISPUTE.—Para22 graph (1) shall not apply if—

23 ‘‘(A) the failure to pay an assessment is due 

24 to a dispute between the insured depository insti-
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1 tution and the Corporation over the amount of 

2 such assessment; and 

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

5 payment upon final determination of the issue. 

6 ‘‘(3) AUTHORITY TO MODIFY OR REMIT PEN7 ALTY.—The Corporation, in the sole discretion of the 

8 Corporation, may compromise, modify or remit any 

9 penalty which the Corporation may assess or has al10 ready assessed under paragraph (1) upon a finding 

11 that good cause prevented the timely payment of an 

12 assessment.’’. 

13 (d) ASSESSMENTS FOR LIFELINE ACCOUNTS.—

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

15 Deposit Insurance Corporation Improvement Act of 

16 1991 (12 U.S.C. 1834) is amended by striking sub17 section (c). 

18 (2) CLARIFICATION OF RATE APPLICABLE TO DE19 POSITS ATTRIBUTABLE TO LIFELINE ACCOUNTS.—Sec20 tion 7(b)(2)(H) of the Federal Deposit Insurance Act 

21 (12 U.S.C. 1817(b)(2)(H)) is amended by striking ‘‘at 

22 a rate determined in accordance with such Act’’ and 

inserting ‘‘at 1 23 ⁄2 the assessment rate otherwise appli24 cable for such insured depository institution’’. 
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1 (3) REGULATIONS.—Section 232(a)(1) of the 

2 Federal Deposit Insurance Corporation Improvement 

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

4 striking ‘‘Board of Governors of the Federal Reserve 

5 System, and the’’. 

6 (e) TECHNICAL AND CONFORMING AMENDMENTS.—

7 (1) Paragraph (3) of section 7(a) of the Federal 

8 Deposit Insurance Act (12 U.S.C. 1817(a)(3)) is 

9 amended by striking the 3d sentence and inserting the

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

11 basis for the certified statements to be filed pursuant 

12 to subsection (c).’’. 

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

14 7(b)(1) of the Federal Deposit Insurance Act (12 

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

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

17 subparagraph. 

18 (3) Section 7(b)(2) of the Federal Deposit Insur19 ance Act (12 U.S.C. 1817(b)(2)) is amended—

20 (A) by striking subparagraphs (E), (F), and 

21 (G); 

22 (B) in subparagraph (C), by striking ‘‘semi23 annual’’; 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 Insurance 

5 Act (12 U.S.C. 1817(b)) is amended by striking para6 graph (4) and redesignating paragraphs (5) (as 

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

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

9 (5) Section 7(c) of the Federal Deposit Insurance 

10 Act (12 U.S.C. 1817(c)) is amended—

11 (A) in paragraph (1)(A), by striking ‘‘semi12 annual’’; 

13 (B) in paragraph (2)(A), by striking ‘‘semi14 annual’’; and 

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

17 period’’. 

18 (6) Section 8(p) of the Federal Deposit Insur19 ance Act (12 U.S.C. 1818(p)) is amended by striking 

20 ‘‘semiannual’’. 

21 (7) Section 8(q) of the Federal Deposit Insurance 

22 Act (12 U.S.C. 1818(q)) is amended by striking 

23 ‘‘semiannual period’’ and inserting ‘‘assessment pe24 riod’’. 
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1 (8) Section 13(c)(4)(G)(ii)(II) of the Federal De2 posit Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)(II)) 

3 is amended by striking ‘‘semiannual period’’ and in4 serting ‘‘assessment period’’. 

5 (9) Section 232(a) of the Federal Deposit Insur6 ance 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 Cor13 poration’’; 

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 that 
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1 the final regulations required under section 9(a)(5) take ef2 fect. 

3 SEC. 5. REPLACEMENT OF FIXED DESIGNATED RESERVE 

4 RATIO WITH RESERVE RANGE. 

5 (a) IN GENERAL.—Section 7(b)(3) of the Federal De6 posit Insurance Act (12 U.S.C. 1817(b)(3)) is amended to 

7 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 re13 serve 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 Di18 rectors at least before the beginning of each 

19 calendar year, for such calendar year, and 

20 at such other times as the Board of Direc21 tors may determine to be appropriate. 

22 ‘‘(B) RANGE.—The reserve ratio designated 

23 by the Board of Directors for any year—

24 ‘‘(i) may not exceed 1.4 percent of esti25 mated insured deposits; and 
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1 ‘‘(ii) may not be less than 1.15 percent 

2 of estimated insured deposits.

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

4 ratio for any year, the Board of Directors 

5 shall—

6 ‘‘(i) take into account the risk of losses 

7 to the Deposit Insurance Fund in such year 

8 and future years, including historic experi9 ence and potential and estimated losses 

10 from insured depository institutions;

11 ‘‘(ii) take into account economic condi12 tions generally affecting insured depository 

13 institutions so as to allow the designated re14 serve ratio to increase during more favor15 able economic conditions and to decrease 

16 during less favorable economic conditions, 

17 notwithstanding the increased risks of loss 

18 that may exist during such less favorable 

19 conditions, as determined to be appropriate 

20 by the Board of Directors; 

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

22 the assessment rates for insured depository 

23 institutions; and 

24 ‘‘(iv) take into account such other fac25 tors as the Board of Directors may deter-
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1 mine to be appropriate, consistent with the 

2 requirements of this subparagraph. 

3 ‘‘(D) PUBLICATION OF PROPOSED CHANGE

4 IN RATIO.—In soliciting comment on any pro5 posed change in the designated reserve ratio in 

6 accordance with subparagraph (A), the Board of 

7 Directors shall include in the published proposal 

8 a thorough analysis of the data and projections 

9 on which the proposal is based.’’. 

10 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec11 tion 3(y) of the Federal Deposit Insurance Act (12 U.S.C. 

12 1813(y)) is amended—

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

14 ‘‘(y) DEFINITIONS RELATING TO DEPOSIT INSURANCE

15 FUND.—

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

17 and 

18 (2) by inserting after paragraph (1) (as so des19 ignated by paragraph (1) of this subsection) the fol20 lowing new paragraph: 

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

22 ‘designated reserve ratio’ means the reserve ratio des23 ignated by the Board of Directors in accordance with 

24 section 7(b)(3).’’. 
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1 (c) EFFECTIVE DATE.—This section and the amend2 ments made by this section shall take effect on the date that 

3 the final regulations required under section 9(a)(1) take ef4 fect. 

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

6 ASSESSMENT SYSTEM. 

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

8 (12 U.S.C. 1817(b)(1)) is amended by adding at the end 

9 the following new subparagraphs: 

10 ‘‘(E) INFORMATION CONCERNING RISK OF

11 LOSS AND ECONOMIC CONDITIONS.—

12 ‘‘(i) SOURCES OF INFORMATION.—For 

13 purposes of determining risk of losses at in14 sured depository institutions and economic 

15 conditions generally affecting depository in16 stitutions, the Corporation shall collect in17 formation, as appropriate, from all sources 

18 the Board of Directors considers appro19 priate, such as reports of condition, inspec20 tion reports, and other information from all 

21 Federal banking agencies, any information 

22 available from State bank supervisors, State 

23 insurance and securities regulators, the Se24 curities and Exchange Commission (includ25 ing information described in section 35), 
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1 the Secretary of the Treasury, the Com2 modity Futures Trading Commission, the 

3 Farm Credit Administration, the Federal 

4 Trade Commission, any Federal reserve 

5 bank or Federal home loan bank, and other 

6 regulators of financial institutions, and any 

7 information available from credit rating en8 tities, and other private economic or busi9 ness analysts. 

10 ‘‘(ii) CONSULTATION WITH FEDERAL

11 BANKING AGENCIES.—

12 ‘‘(I) IN GENERAL.—Except as pro13 vided in subclause (II), in assessing the 

14 risk of loss to the Deposit Insurance 

15 Fund with respect to any insured de16 pository institution, the Corporation 

17 shall consult with the appropriate Fed18 eral banking agency of such institu19 tion. 

20 ‘‘(II) TREATMENT ON AGGREGATE

21 BASIS.—In the case of insured deposi22 tory institutions that are well capital23 ized (as defined in section 38) and, in 

24 the most recent examination, were 

25 found to be well managed, the consulta-
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1 tion under subclause (I) concerning the 

2 assessment of the risk of loss posed by 

3 such institutions may be made on an 

4 aggregate basis. 

5 ‘‘(iii) RULE OF CONSTRUCTION.—No 

6 provision of this paragraph shall be con7 strued as providing any new authority for 

8 the Corporation to require submission of in9 formation by insured depository institutions 

10 to the Corporation. 

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

12 ASSESSMENT SYSTEM ALLOWED ONLY AFTER NO13 TICE AND COMMENT.—In revising or modifying 

14 the risk-based assessment system at any time 

15 after the date of the enactment of the Federal De16 posit Insurance Reform Act of 2003, the Board 

17 of Directors may implement such revisions or 

18 modification in final form only after notice and 

19 opportunity for comment.’’. 

20 SEC. 7. REFUNDS, DIVIDENDS, AND CREDITS FROM DE21 POSIT INSURANCE FUND. 

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

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

24 amended to read as follows: 

25 ‘‘(e) REFUNDS, DIVIDENDS, AND CREDITS.—
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1 ‘‘(1) REFUNDS OF OVERPAYMENTS.—In the case 

2 of any payment of an assessment by an insured de3 pository institution in excess of the amount due to the 

4 Corporation, the Corporation may—

5 ‘‘(A) refund the amount of the excess pay6 ment to the insured depository institution; or 

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

8 payment of subsequent assessments until such 

9 credit is exhausted. 

10 ‘‘(2) DIVIDENDS FROM EXCESS AMOUNTS IN DE11 POSIT INSURANCE FUND.—

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

13 PERCENT OF ESTIMATED INSURED DEPOSITS.—

14 Whenever the reserve ratio of the Deposit Insur15 ance Fund exceeds 1.4 percent of estimated in16 sured deposits, the Corporation shall declare the 

17 amount in the Fund in excess of the amount re18 quired to maintain the reserve ratio at 1.4 per19 cent of estimated insured deposits, as dividends 

20 to be paid to insured depository institutions. 

21 ‘‘(B) RESERVE RATIO EQUAL TO OR IN EX22 CESS OF 1.35 PERCENT OF ESTIMATED INSURED

23 DEPOSITS AND NOT MORE THAN 1.4 PERCENT.—

24 Whenever the reserve ratio of the Deposit Insur25 ance Fund equals or exceeds 1.35 percent of esti-
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1 mated insured deposits and is not more than 1.4 

2 percent of such deposits, the Corporation shall 

3 declare the amount in the Fund that is equal to 

4 50 percent of the amount in excess of the amount 

5 required to maintain the reserve ratio at 1.35 

6 percent of the estimated insured deposits as divi7 dends to be paid to insured depository institu8 tions. 

9 ‘‘(C) BASIS FOR DISTRIBUTION OF DIVI10 DENDS.—

11 ‘‘(i) IN GENERAL.—Solely for the pur12 poses of dividend distribution under this 

13 paragraph and credit distribution under 

14 paragraph (3)(B), the Corporation shall de15 termine each insured depository institu16 tion’s relative contribution to the Deposit 

17 Insurance Fund (or any predecessor deposit 

18 insurance fund) for calculating such insti19 tution’s share of any dividend or credit de20 clared under this paragraph or paragraph 

21 (3)(B), taking into account the factors de22 scribed in clause (ii). 

23 ‘‘(ii) FACTORS FOR DISTRIBUTION.—In 

24 implementing this paragraph and para25 graph (3)(B) in accordance with regula-
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1 tions, the Corporation shall take into ac2 count the following factors: 

3 ‘‘(I) The ratio of the assessment 

4 base of an insured depository institu5 tion (including any predecessor) on 

6 December 31, 1996, to the assessment 

7 base of all eligible insured depository 

8 institutions on that date. 

9 ‘‘(II) The total amount of assess10 ments paid on or after January 1, 

11 1997, by an insured depository institu12 tion (including any predecessor) to the 

13 Deposit Insurance Fund (and any 

14 predecessor deposit insurance fund). 

15 ‘‘(III) That portion of assessments 

16 paid by an insured depository institu17 tion (including any predecessor) that 

18 reflects higher levels of risk assumed by 

19 such institution. 

20 ‘‘(IV) Such other factors as the 

21 Corporation may determine to be ap22 propriate. 

23 ‘‘(D) NOTICE AND OPPORTUNITY FOR COM24 MENT.—The Corporation shall prescribe by regu25 lation, after notice and opportunity for com-
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1 ment, the method for the calculation, declaration, 

2 and payment of dividends under this paragraph. 

3 ‘‘(3) CREDIT POOL.—

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

5 ASSESSMENT BASE AT YEAR-END 1996.—

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

7 the 270-day period beginning on the date of 

8 the enactment of the Federal Deposit Insur9 ance Reform Act of 2003, the Board of Di10 rectors shall, by regulation, provide for a 

11 credit to each eligible insured depository in12 stitution, based on the assessment base of 

13 the institution (including any predecessor 

14 institution) on December 31, 1996, as com15 pared to the combined aggregate assessment 

16 base of all eligible insured depository insti17 tutions, taking into account such factors as 

18 the Board of Directors may determine to be 

19 appropriate. 

20 ‘‘(ii) CREDIT LIMIT.—The aggregate 

21 amount of credits available under clause (i) 

22 to all eligible insured depository institu23 tions shall equal the amount that the Cor24 poration could collect if the Corporation im25 posed an assessment of 12 basis points on 
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1 the combined assessment base of the Bank 

2 Insurance Fund and the Savings Associa3 tion Insurance Fund as of December 31, 

4 2001. 

5 ‘‘(iii) ELIGIBLE INSURED DEPOSITORY

6 INSTITUTION DEFINED.—For purposes of 

7 this paragraph, the term ‘eligible insured 

8 depository institution’ means any insured 

9 depository institution that—

10 ‘‘(I) was in existence on December 

11 31, 1996, and paid a deposit insurance 

12 assessment prior to that date; or 

13 ‘‘(II) is a successor to any insured 

14 depository institution described in sub15 clause (II). 

16 ‘‘(iv) APPLICATION OF CREDITS.—

17 ‘‘(I) IN GENERAL.—The amount of 

18 a credit to any eligible insured deposi19 tory institution under this paragraph 

20 shall be applied by the Corporation, 

21 subject to subsection (b)(3)(e), to the 

22 assessments imposed on such institu23 tion under subsection (b) that become 

24 due for assessment periods beginning 
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1 after the effective date of regulations 

2 prescribed under clause (i). 

3 ‘‘(II) REGULATIONS.—The regula4 tions prescribed under clause (i) shall 

5 establish the qualifications and proce6 dures governing the application of as7 sessment credits pursuant to subclause 

8 (I). 

9 ‘‘(v) LIMITATION ON AMOUNT OF CRED10 IT FOR CERTAIN DEPOSITORY INSTITU11 TIONS.—In the case of an insured deposi12 tory institution that exhibits financial, 

13 operational, or compliance weaknesses rang14 ing from moderately severe to unsatisfac15 tory, or is not adequately capitalized (as de16 fined in section 38) at the beginning of an 

17 assessment period, the amount of any credit 

18 allowed under this paragraph against the 

19 assessment on that depository institution 

20 for such period may not exceed the amount 

21 calculated by applying to that depository 

22 institution the average assessment rate on 

23 all insured depository institutions for such 

24 assessment period. 
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1 ‘‘(vi) PREDECESSOR DEFINED.—For 

2 purposes of this paragraph, the term ‘prede3 cessor’, when used with respect to any in4 sured depository institution, includes any 

5 other insured depository institution ac6 quired by or merged with such insured de7 pository institution. 

8 ‘‘(B) ON-GOING CREDIT POOL.—

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

10 credit provided pursuant to subparagraph 

11 (A) and subject to the limitation contained 

12 in clause (v) of such subparagraph, the Cor13 poration shall, by regulation, establish an 

14 on-going system of credits to be applied 

15 against future assessments under subsection 

16 (b)(1) on the same basis as the dividends 

17 provided under paragraph (2)(C). 

18 ‘‘(ii) LIMITATION ON CREDITS UNDER

19 CERTAIN CIRCUMSTANCES.—No credits may 

20 be awarded by the Corporation under this 

21 subparagraph during any period in 

22 which—

23 ‘‘(I) the reserve ratio of the De24 posit Insurance Fund is less than the 
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1 designated reserve ratio of such Fund; 

2 or 

3 ‘‘(II) the reserve ratio of the Fund 

4 is less than 1.25 percent of the amount 

5 of estimated insured deposits.

6 ‘‘(iii) CRITERIA FOR DETERMINA7 TION.—In determining the amounts of any 

8 assessment credits under this subparagraph, 

9 the Board of Directors shall take into ac10 count the factors for designating the reserve 

11 ratio under subsection (b)(3) and the factors 

12 for setting assessments under subsection 

13 (b)(2)(B). 

14 ‘‘(4) ADMINISTRATIVE REVIEW.—

15 ‘‘(A) IN GENERAL.—The regulations pre16 scribed under paragraph (2)(D) and subpara17 graphs (A) and (B) of paragraph (3) shall in18 clude provisions allowing an insured depository 

19 institution a reasonable opportunity to challenge 

20 administratively the amount of the credit or div21 idend determined under paragraph (2) or (3) for 

22 such institution. 

23 ‘‘(B) ADMINISTRATIVE REVIEW.—Any re24 view under subparagraph (A) of any determina25 tion of the Corporation under paragraph (2) or 
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1 (3) shall be final and not subject to judicial re2 view.’’. 

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

4 the Federal Deposit Insurance Act (12 U.S.C. 1813(y)) (as 

5 amended by section 5(b) of this Act) is amended by adding 

6 at the end the following new paragraph: 

7 ‘‘(3) RESERVE RATIO.—The term ‘reserve ratio’, 

8 when used with regard to the Deposit Insurance Fund 

9 other than in connection with a reference to the des10 ignated reserve ratio, means the ratio of the net worth 

11 of the Deposit Insurance Fund to the value of the ag12 gregate estimated insured deposits.’’. 

13 SEC. 8. DEPOSIT INSURANCE FUND RESTORATION PLANS. 

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

15 (12 U.S.C. 1817(b)(3)) (as amended by section 5(a) of this 

16 Act) is amended by adding at the end the following new 

17 subparagraph: 

18 ‘‘(E) DIF RESTORATION PLANS.—

19 ‘‘(i) IN GENERAL.—Whenever—

20 ‘‘(I) the Corporation projects that 

21 the reserve ratio of the Deposit Insur22 ance Fund will, within 6 months of 

23 such determination, fall below the min24 imum amount specified in subpara-
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1 graph (B)(ii) for the designated reserve 

2 ratio; or 

3 ‘‘(II) the reserve ratio of the De4 posit Insurance Fund actually falls 

5 below the minimum amount specified 

6 in subparagraph (B)(ii) for the des7 ignated reserve ratio without any de8 termination under subclause (I) having 

9 been made, 

10 the Corporation shall establish and imple11 ment a Deposit Insurance Fund restoration 

12 plan within 90 days that meets the require13 ments of clause (ii) and such other condi14 tions as the Corporation determines to be 

15 appropriate. 

16 ‘‘(ii) REQUIREMENTS OF RESTORATION

17 PLAN.—A Deposit Insurance Fund restora18 tion plan meets the requirements of this 

19 clause if the plan provides that the reserve 

20 ratio of the Fund will meet or exceed the 

21 minimum amount specified in subpara22 graph (B)(ii) for the designated reserve 

23 ratio before the end of the 10-year period be24 ginning upon the implementation of the 

25 plan.
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1 ‘‘(iii) RESTRICTION ON ASSESSMENT

2 CREDITS.—As part of any restoration plan 

3 under this subparagraph, the Corporation 

4 may elect to restrict the application of as5 sessment credits provided under subsection 

6 (e)(3) for any period that the plan is in ef7 fect. 

8 ‘‘(iv) LIMITATION ON RESTRICTION.—

9 Notwithstanding clause (iii), while any res10 toration plan under this subparagraph is in 

11 effect, the Corporation shall apply credits 

12 provided to an insured depository institu13 tion under subsection (e)(3) against any as14 sessment imposed on the institution for any 

15 assessment period in an amount equal to 

16 the lesser of—

17 ‘‘(I) the amount of the assessment; 

18 or 

19 ‘‘(II) the amount equal to 3 basis 

20 points of the institution’s assessment 

21 base. 

22 ‘‘(v) TRANSPARENCY.—Not more than 

23 30 days after the Corporation establishes 

24 and implements a restoration plan under 

25 clause (i), the Corporation shall publish in 
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1 the Federal Register a detailed analysis of 

2 the factors considered and the basis for the 

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

4 SEC. 9. REGULATIONS REQUIRED. 

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

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

7 of the Federal Deposit Insurance Corporation shall pre8 scribe final regulations, after notice and opportunity for 

9 comment—

10 (1) designating the reserve ratio for the Deposit 

11 Insurance Fund in accordance with section 7(b)(3) of 

12 the Federal Deposit Insurance Act (as amended by 

13 section 5 of this Act); 

14 (2) implementing increases in deposit insurance 

15 coverage in accordance with the amendments made by 

16 section 3 of this Act; 

17 (3) implementing the dividend requirement 

18 under section 7(e)(2) of the Federal Deposit Insurance 

19 Act (as amended by section 7 of this Act). 

20 (4) implementing the 1-time assessment credit to 

21 certain insured depository institutions in accordance 

22 with section 7(e)(3) of the Federal Deposit Insurance 

23 Act, as amended by section 7 of this Act, including 

24 the qualifications and procedures under which the 

25 Corporation would apply assessment credits; and 
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1 (5) providing for assessments under section 7(b) 

2 of the Federal Deposit Insurance Act, as amended by 

3 this Act. 

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

5 Act or any amendment made by this Act shall be construed 

6 as affecting the authority of the Corporation to set or collect 

7 deposit insurance assessments before the effective date of the 

8 final regulations prescribed under subsection (a).

9 SEC. 10. STUDIES OF FDIC STRUCTURE AND EXPENSES AND 

10 CERTAIN ACTIVITIES AND FURTHER POS11 SIBLE CHANGES TO DEPOSIT INSURANCE 

12 SYSTEM. 

13 (a) STUDY BY COMPTROLLER GENERAL.—

14 (1) STUDY REQUIRED.—The Comptroller General 

15 shall conduct a study of the following issues: 

16 (A) The efficiency and effectiveness of the 

17 administration of the prompt corrective action 

18 program under section 38 of the Federal Deposit 

19 Insurance Act by the Federal banking agencies 

20 (as defined in section 3 of such Act), including 

21 the degree of effectiveness of such agencies in 

22 identifying troubled depository institutions and 

23 taking effective action with respect to such insti24 tutions, and the degree of accuracy of the risk as25 sessments made by the Corporation. 
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1 (B) The appropriateness of the organiza2 tional structure of the Federal Deposit Insurance 

3 Corporation for the mission of the Corporation 

4 taking into account—

5 (i) the current size and complexity of 

6 the business of insured depository institu7 tions (as such term is defined in section 3 

8 of the Federal Deposit Insurance Act); 

9 (ii) the extent to which the organiza10 tional structure contributes to or reduces 

11 operational inefficiencies that increase oper12 ational costs; and 

13 (iii) the effectiveness of internal con14 trols. 

15 (2) REPORT TO THE CONGRESS.—The Comp16 troller General shall submit a report to the Congress 

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

18 date of the enactment of this Act containing the find19 ings and conclusions of the Comptroller General with 

20 respect to the study required under paragraph (1) to21 gether with such recommendations for legislative or 

22 administrative action as the Comptroller General 

23 may determine to be appropriate. 

24 (b) INTERNAL STUDY BY THE FDIC.—
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1 (1) STUDY REQUIRED.—Concurrently with the 

2 study required to be conducted by the Comptroller 

3 General under subsection (a), the Federal Deposit In4 surance Corporation shall conduct an internal study 

5 of the same conditions and factors included in the 

6 study under subsection (a). 

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

8 Deposit Insurance Corporation shall submit a report 

9 to the Congress before the end of the 1-year period be10 ginning on the date of the enactment of this Act con11 taining the findings and conclusions of the Corpora12 tion with respect to the study required under para13 graph (1) together with such recommendations for leg14 islative or administrative action as the Board of Di15 rectors of the Corporation may determine to be appro16 priate. 

17 (c) STUDY OF FURTHER POSSIBLE CHANGES TO DE18 POSIT INSURANCE SYSTEM.—

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

20 of the Federal Deposit Insurance Corporation and the 

21 National Credit Union Administration Board shall 

22 each conduct a study of the following: 

23 (A) The feasibility of establishing a vol24 untary deposit insurance system for deposits in 

25 excess of the maximum amount of deposit insur-
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1 ance for any depositor and the potential benefits 

2 and the potential adverse consequences that may 

3 result from the establishment of any such system.

4 (B) The feasibility of privatizing all deposit 

5 insurance at insured depository institutions and 

6 insured credit unions. 

7 (2) REPORT.—Before the end of the 1-year pe8 riod beginning on the date of the enactment of this 

9 Act, the Board of Directors of the Federal Deposit In10 surance Corporation and the National Credit Union 

11 Administration Board shall each submit a report to 

12 the Congress on the study required under paragraph 

13 (1) containing the findings and conclusions of the re14 porting agency together with such recommendations 

15 for legislative or administrative changes as the agency 

16 may determine to be appropriate. 

17 (d) STUDY REGARDING APPROPRIATE DEPOSIT BASE

18 IN DESIGNATING RESERVE RATIO.—

19 (1) STUDY REQUIRED.—The Federal Deposit In20 surance Corporation shall conduct a study of the fea21 sibility of using actual domestic deposits rather than 

22 estimated insured deposits in calculating the reserve 

23 ratio of the Deposit Insurance Fund and designating 

24 a reserve ratio for such Fund. 
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1 (2) REPORT.—The Federal Deposit Insurance 

2 Corporation shall submit a report to the Congress be3 fore the end of the 1-year period beginning on the 

4 date of the enactment of this Act containing the find5 ings and conclusions of the Corporation with respect 

6 to the study required under paragraph (1) together 

7 with such recommendations for legislative or adminis8 trative action as the Board of Directors of the Cor9 poration may determine to be appropriate. 

10 (e) STUDY OF RESERVE METHODOLOGY AND AC11 COUNTING FOR LOSS.—

12 (1) STUDY REQUIRED.—The Federal Deposit In13 surance Corporation, in consultation with the Comp14 troller General, shall conduct a study of the reserve 

15 methodology and loss accounting used by the Corpora16 tion during the period beginning on January 1, 1992, 

17 and ending December 31, 2002, with respect to in18 sured depository institutions in a troubled condition 

19 (as defined in the regulations prescribed pursuant to 

20 section 32(f) of the Federal Deposit Insurance Act). 

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

22 the study pursuant to paragraph (1), the Federal De23 posit Insurance Corporation shall—

24 (A) consider the overall effectiveness and ac25 curacy of the methodology used by the Corpora-
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1 tion for establishing and maintaining reserves 

2 and estimating and accounting for losses at in3 sured depository institutions, during the period 

4 described in such paragraph;

5 (B) consider the appropriateness and reli6 ability of information and criteria used by the 

7 Corporation in determining—

8 (i) whether an insured depository in9 stitution was in a troubled condition; and 

10 (ii) the amount of any loss anticipated 

11 at such institution; 

12 (C) analyze the actual historical loss experi13 ence over the period described in paragraph (1) 

14 and the causes of the exceptionally high rate of 

15 losses experienced by the Corporation in the final 

16 3 years of that period; and 

17 (D) rate the efforts of the Corporation to re18 duce losses in such 3-year period to minimally 

19 acceptable levels and to historical levels. 

20 (3) REPORT REQUIRED.—The Board of Directors 

21 of the Federal Deposit Insurance Corporation shall 

22 submit a report to the Congress before the end of the 

23 6-month period beginning on the date of the enact24 ment of this Act, containing the findings and conclu25 sions of the Corporation, in consultation with the 
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1 Comptroller General, with respect to the study re2 quired under paragraph (1), together with such rec3 ommendations for legislative or administrative action 

4 as the Board of Directors may determine to be appro5 priate.

6 SEC. 11. BI-ANNUAL FDIC SURVEY AND REPORT ON IN7 CREASING THE DEPOSIT BASE BY ENCOUR8 AGING USE OF DEPOSITORY INSTITUTIONS 

9 BY THE UNBANKED. 

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

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

12 section: 

13 ‘‘SEC. 49. BI-ANNUAL FDIC SURVEY AND REPORT ON EN14 COURAGING USE OF DEPOSITORY INSTITU15 TIONS BY THE UNBANKED. 

16 ‘‘(a) SURVEY REQUIRED.—

17 ‘‘(1) IN GENERAL.—The Corporation shall con18 duct a bi-annual survey on efforts by insured deposi19 tory institutions to bring those individuals and fami20 lies who have rarely, if ever, held a checking account, 

21 a savings account or other type of transaction or 

22 check cashing account at an insured depository insti23 tution (hereafter in this section referred to as the 

24 ‘unbanked’) into the conventional finance system. 
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1 ‘‘(2) FACTORS AND QUESTIONS TO CONSIDER.—

2 In conducting the survey, the Corporation shall take 

3 the following factors and questions into account:

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

5 institutions promote financial education and fi6 nancial literacy outreach? 

7 ‘‘(B) Which financial education efforts ap8 pear to be the most effective in bringing 

9 ‘unbanked’ individuals and families into the 

10 conventional finance system? 

11 ‘‘(C) What efforts are insured institutions 

12 making at converting ‘unbanked’ money order, 

13 wire transfer, and international remittance cus14 tomers into conventional account holders? 

15 ‘‘(D) What cultural, language and identi16 fication issues as well as transaction costs ap17 pear to most prevent ‘unbanked’ individuals 

18 from establishing conventional accounts? 

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

20 worth of the ‘unbanked’ market in the United 

21 States? 

22 ‘‘(b) REPORTS.—The Chairperson of the Board of Di23 rectors shall submit a bi-annual report to the Committee 

24 on Financial Services of the House of Representatives and 

25 the Committee on Banking, Housing, and Urban Affairs 
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1 of the Senate containing the Corporation’s findings and 

2 conclusions with respect to the survey conducted pursuant 

3 to subsection (a), together with such recommendations for 

4 legislative or administrative action as the Chairperson may 

5 determine to be appropriate.’’. 

6 SEC. 12. TECHNICAL AND CONFORMING AMENDMENTS TO 

7 THE FEDERAL DEPOSIT INSURANCE ACT RE8 LATING TO THE MERGER OF THE BIF AND 

9 SAIF. 

10 (a) IN GENERAL.—The Federal Deposit Insurance Act 

11 (12 U.S.C. 1811 et seq.) is amended—

12 (1) in section 3 (12 U.S.C. 1813)—

13 (A) by striking subparagraph (B) of sub14 section (a)(1) and inserting the following new 

15 subparagraph: 

16 ‘‘(B) includes any former savings associa17 tion.’’; and 

18 (B) by striking paragraph (1) of subsection 

19 (y) (as so designated by section 5(b) of this Act) 

20 and inserting the following new paragraph: 

21 ‘‘(1) DEPOSIT INSURANCE FUND.—The term ‘De22 posit Insurance Fund’ means the Deposit Insurance 

23 Fund established under section 11(a)(4).’’; 

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

25 striking ‘‘the Bank Insurance Fund or the Savings 
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1 Association Insurance Fund,’’ and inserting ‘‘the De2 posit Insurance Fund,’’; 

3 (3) in section 5(c)(4), by striking ‘‘deposit insur4 ance fund’’ and inserting ‘‘Deposit Insurance Fund’’; 

5 (4) in section 5(d) (12 U.S.C. 1815(d)), by strik6 ing paragraphs (2) and (3) (and any funds resulting 

7 from the application of such paragraph (2) prior to 

8 its repeal shall be deposited into the general fund of 

9 the Deposit Insurance Fund); 

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

11 (A) in subparagraph (A), by striking ‘‘re12 serve ratios in the Bank Insurance Fund and the 

13 Savings Association Insurance Fund as required 

14 by section 7’’ and inserting ‘‘the reserve ratio of 

15 the Deposit Insurance Fund’’; 

16 (B) by striking subparagraph (B) and in17 serting the following: 

18 ‘‘(2) FEE CREDITED TO THE DEPOSIT INSUR19 ANCE FUND.—The fee paid by the depository institu20 tion under paragraph (1) shall be credited to the De21 posit Insurance Fund.’’; 

22 (C) by striking ‘‘(1) UNINSURED INSTITU23 TIONS.—’’; and 
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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 ‘‘Bank 

6 Insurance Fund or the Savings Association In7 surance Fund’’ and inserting ‘‘Deposit Insurance 

8 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 strik14 ing ‘‘Bank Insurance Fund or the Savings Associa15 tion Insurance Fund’’ and inserting ‘‘Deposit Insur16 ance 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 by 

25 section 4(e)(4) of this Act)—
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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 ‘‘the 

18 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 or 

23 the Savings Association Insurance Fund’’ and insert24 ing ‘‘Deposit Insurance Fund’’; 
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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 ‘‘De7 posit Insurance Fund’’; 

8 (B) by striking paragraph (4) of subsection 

9 (a) and inserting the following new paragraph: 

10 ‘‘(4) DEPOSIT INSURANCE FUND.—

11 ‘‘(A) ESTABLISHMENT.—There is estab12 lished the Deposit Insurance Fund, which the 

13 Corporation shall—

14 ‘‘(i) maintain and administer; 

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

16 purposes, in the manner provided by this 

17 subsection; and 

18 ‘‘(iii) invest in accordance with section 

19 13(a). 

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

21 shall be available to the Corporation for use with 

22 respect to insured depository institutions the de23 posits of which are insured by the Deposit Insur24 ance Fund. 
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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 deposi6 tory 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 Cor12 poration; 

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 that 

21 this clause shall not prohibit any assistance 

22 to any insured depository institution that is 

23 not in default, or that is not in danger of 

24 default, that is acquiring (as defined in sec-
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1 tion 13(f)(8)(B)) another insured depository 

2 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 (7) 

8 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 pe14 riod; 

15 (13) in section 11(i)(3) (12 U.S.C. 1821(i)(3))—

16 (A) by striking subparagraph (B); 

17 (B) by redesignating subparagraph (C) as 

18 subparagraph (B); and 

19 (C) in subparagraph (B) (as so redesig20 nated), by striking ‘‘subparagraphs (A) and (B)’’ 

21 and inserting ‘‘subparagraph (A)’’; 

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

23 1821(p)(2)(B)), by striking ‘‘institution, any’’ and 

24 inserting ‘‘institution, the’’; 

25 (15) in section 11A(a) (12 U.S.C. 1821a(a))—
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1 (A) in paragraph (2), by striking ‘‘LIABIL2 ITIES.—’’ and all that follows through ‘‘Except’’ 

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

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

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

6 Bank Insurance Fund, the Savings Association

7 Insurance Fund,’’ and inserting ‘‘the Deposit In8 surance Fund’’; 

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

10 striking paragraph (4); 

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

12 striking ‘‘Savings Association Insurance Fund’’ and 

13 inserting ‘‘Deposit Insurance Fund’’; 

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

15 1822(f)(4)(E)(iv)), by striking ‘‘Federal deposit insur16 ance funds’’ and inserting ‘‘the Deposit Insurance 

17 Fund (or any predecessor deposit insurance fund)’’; 

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

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

20 each place that term appears and inserting ‘‘De21 posit Insurance Fund’’; 

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

23 Insurance Fund, the Savings Association Insur24 ance Fund,’’ and inserting ‘‘Deposit Insurance 

25 Fund’’; 
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1 (C) in subsection (c)(4)(E)—

2 (i) in the subparagraph heading, by 

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

4 and 

5 (ii) in clause (i), by striking ‘‘any in6 surance fund’’ and inserting ‘‘the Deposit 

7 Insurance Fund’’; 

8 (D) in subsection (c)(4)(G)(ii)—

9 (i) by striking ‘‘appropriate insurance 

10 fund’’ and inserting ‘‘Deposit Insurance 

11 Fund’’; 

12 (ii) by striking ‘‘the members of the in13 surance fund (of which such institution is a 

14 member)’’ and inserting ‘‘insured depository 

15 institutions’’; 

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

17 inserting ‘‘each insured depository institu18 tion’s’’; and 

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

20 place that term appears and inserting ‘‘the 

21 institution’s’’; 

22 (E) in subsection (c), by striking paragraph 

23 (11); 
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1 (F) in subsection (h), by striking ‘‘Bank In2 surance Fund’’ and inserting ‘‘Deposit Insurance 

3 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 members’’ 

9 and inserting ‘‘savings associations’’; 

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

11 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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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 con9 nection with a reference to a term amended by 

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

11 inserting ‘‘Deposit Insurance Fund’’; 

12 (D) by striking the subsection heading and 

13 inserting the following: 

14 ‘‘(d) BORROWING FOR THE DEPOSIT INSURANCE FUND

15 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 insert21 ing ‘‘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 FUND

25 FROM FEDERAL HOME LOAN BANKS.—
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1 ‘‘(1) IN GENERAL.—The Corporation may bor2 row from the Federal home loan banks, with the con3 currence of the Federal Housing Finance Board, such 

4 funds as the Corporation considers necessary for the 

5 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 than 

10 the current marginal cost of funds to that bank, 

11 taking into account the maturities involved; 

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

13 by the Federal Housing Finance Board; 

14 ‘‘(C) be a direct liability of the Deposit In15 surance Fund; and 

16 ‘‘(D) be subject to the limitations of section 

17 15(c).’’; 

18 (25) in section 15(c)(5) (12 U.S.C. 1825(c)(5))—

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

20 or Savings Association Insurance Fund, respec21 tively’’ each place that term appears and insert22 ing ‘‘the Deposit Insurance Fund’’; and 

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

24 Bank Insurance Fund or the Savings Associa-
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1 tion Insurance Fund, respectively’’ and inserting 

2 ‘‘the Deposit Insurance Fund’’; 

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

4 (A) in the subsection heading, by striking 

5 ‘‘BIF, SAIF,’’ and inserting ‘‘THE DEPOSIT IN6 SURANCE FUND’’; and 

7 (B) in paragraph (1)—

8 (i) by striking ‘‘the Bank Insurance 

9 Fund, the Savings Association Insurance 

10 Fund,’’ each place that term appears and 

11 inserting ‘‘the Deposit Insurance Fund’’; 

12 and 

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

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

15 Deposit Insurance Fund’’; 

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

17 striking ‘‘, the Bank Insurance Fund, the Savings As18 sociation Insurance Fund,’’ each place that term ap19 pears and inserting ‘‘the Deposit Insurance Fund’’; 

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

21 1828(m)(3))—

22 (A) by striking ‘‘Savings Association Insur23 ance Fund’’ in the 1st sentence of subparagraph 

24 (A) and inserting ‘‘Deposit Insurance Fund’’; 
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1 (B) by striking ‘‘Savings Association Insur2 ance Fund member’’ in the last sentence of sub3 paragraph (A) and inserting ‘‘savings associa4 tion’’; and 

5 (C) by striking ‘‘Savings Association Insur6 ance Fund or the Bank Insurance Fund’’ in sub7 paragraph (C) and inserting ‘‘Deposit Insurance 

8 Fund’’; 

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

10 striking ‘‘deposit insurance funds’’ and ‘‘deposit in11 surance fund’’ each place those terms appear and in12 serting ‘‘Deposit Insurance Fund’’; 

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

14 striking ‘‘deposit insurance funds’’ and inserting ‘‘De15 posit Insurance Fund’’; 

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

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

18 striking ‘‘appropriate deposit insurance fund’’ 

19 each place that term appears and inserting ‘‘De20 posit Insurance Fund’’; 

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

22 ‘‘risk to’’ and all that follows through the period 

23 and inserting ‘‘risk to the Deposit Insurance 

24 Fund.’’; and
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1 (C) in subsections (e)(2)(B)(ii) and 

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

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

4 term appears and inserting ‘‘the Deposit Insur5 ance Fund’’; 

6 (32) in section 28 (12 U.S.C. 1831e), by striking 

7 ‘‘affected deposit insurance fund’’ each place that 

8 term appears and inserting ‘‘Deposit Insurance 

9 Fund’’; 

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

11 (34) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)), 

12 by striking ‘‘affected deposit insurance fund’’ and in13 serting ‘‘Deposit Insurance Fund’’; 

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

15 1831n(a)(1)(C)), by striking ‘‘insurance funds’’ and 

16 inserting ‘‘Deposit Insurance Fund’’; 

17 (36) in section 38 (12 U.S.C. 1831o), by striking 

18 ‘‘the deposit insurance fund’’ each place that term ap19 pears and inserting ‘‘the Deposit Insurance Fund’’; 

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

21 the subsection heading, by striking ‘‘FUNDS’’ and in22 serting ‘‘FUND’’; 

23 (38) in section 38(k) (12 U.S.C. 1831o(k))—
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1 (A) in paragraph (1), by striking ‘‘a de2 posit insurance fund’’ and inserting ‘‘the Deposit 

3 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 (39) 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 in14 serting ‘‘ASSOCIATIONS.—Subsections (e)(2)’’; 

15 (B) by redesignating subparagraphs (A), 

16 (B), and (C) as paragraphs (1), (2), and (3), re17 spectively, and moving the margins 2 ems to the 

18 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 the 

22 margins 2 ems to the left. 

23 (b) EFFECTIVE DATE.—This section and the amend24 ments made by this section shall take effect on the first day 

25 of the first calendar quarter that begins after the end of 
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1 the 90-day period beginning on the date of the enactment 

2 of this Act. 

3 SEC. 13. OTHER TECHNICAL AND CONFORMING AMEND4 MENTS RELATING TO THE MERGER OF THE 

5 BIF AND SAIF. 

6 (a) SECTION 5136 OF THE REVISED STATUTES.—The 

7 paragraph designated the ‘‘Eleventh’’ of section 5136 of the 

8 Revised Statutes of the United States (12 U.S.C. 24) is 

9 amended in the 5th sentence, by striking ‘‘affected deposit 

10 insurance fund’’ and inserting ‘‘Deposit Insurance Fund’’. 

11 (b) INVESTMENTS PROMOTING PUBLIC WELFARE; LIM12 ITATIONS ON AGGREGATE INVESTMENTS.—The 23d undes13 ignated paragraph of section 9 of the Federal Reserve Act 

14 (12 U.S.C. 338a) is amended in the 4th sentence, by strik15 ing ‘‘affected deposit insurance fund’’ and inserting ‘‘De16 posit Insurance Fund’’. 

17 (c) ADVANCES TO CRITICALLY UNDERCAPITALIZED

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

19 the Federal Reserve Act (12 U.S.C. 347b(b)(3)(A)(ii)) is 

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

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

22 (d) AMENDMENTS TO THE BALANCED BUDGET AND

23 EMERGENCY DEFICIT CONTROL ACT OF 1985.—Section 

24 255(g)(1)(A) of the Balanced Budget and Emergency Def-
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1 icit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is amend2 ed—

3 (1) by striking ‘‘Bank Insurance Fund’’ and in4 serting ‘‘Deposit Insurance Fund’’; and 

5 (2) by striking ‘‘Federal Deposit Insurance Cor6 poration, Savings Association Insurance Fund (51–

7 4066–0–3–373);’’. 

8 (e) AMENDMENTS TO THE FEDERAL HOME LOAN

9 BANK ACT.—The Federal Home Loan Bank Act (12 U.S.C. 

10 1421 et seq.) is amended—

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

12 (A) in the subsection heading, by striking 

13 ‘‘SAIF’’ and inserting ‘‘THE DEPOSIT INSUR14 ANCE FUND’’; and 

15 (B) by striking ‘‘Savings Association Insur16 ance Fund’’ each place such term appears and 

17 inserting ‘‘Deposit Insurance Fund’’; 

18 (2) in section 21 (12 U.S.C. 1441)—

19 (A) in subsection (f)(2), by striking ‘‘, ex20 cept that’’ and all that follows through the end 

21 of the paragraph and inserting a period; and 

22 (B) in subsection (k), by striking paragraph 

23 (4); 
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1 (3) in section 21A(b)(4)(B) (12 U.S.C. 

2 1441a(b)(4)(B)), by striking ‘‘affected deposit insur3 ance fund’’ and inserting ‘‘Deposit Insurance Fund’’; 

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

5 1441a(b)(6)(B))—

6 (A) in the subparagraph heading, by strik7 ing ‘‘SAIF-INSURED BANKS’’ and inserting 

8 ‘‘CHARTER CONVERSIONS’’; and 

9 (B) by striking ‘‘Savings Association Insur10 ance Fund member’’ and inserting ‘‘savings as11 sociation’’; 

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

13 1441a(b)(10)(A)(iv)(II)), by striking ‘‘Savings Asso14 ciation Insurance Fund’’ and inserting ‘‘Deposit In15 surance Fund’’; 

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

17 1441(n)(6)(E)(iv)), by striking ‘‘Federal deposit in18 surance funds’’ and inserting ‘‘the Deposit Insurance 

19 Fund’’; 

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

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

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

23 Insurance Fund members’’ each place that term 

24 appears; and 

25 (B) by striking paragraphs (7) and (8); and
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1 (8) in section 21B(k) (12 U.S.C. 1441b(k))—

2 (A) by inserting before the colon ‘‘, the fol3 lowing definitions shall apply’’; 

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

5 (C) by redesignating paragraphs (9) and 

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

7 (f) AMENDMENTS TO THE HOME OWNERS’ LOAN

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

9 seq.) is amended—

10 (1) in section 5 (12 U.S.C. 1464)—

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

12 ‘‘that is a member of the Bank Insurance Fund’’;

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

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

15 purposes of this subsection, the following defini16 tions shall apply:’’; 

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

18 a Bank Insurance Fund member’’; 

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

20 Bank Insurance Fund member until such time 

21 as it changes its status to a Savings Association 

22 Insurance Fund member’’ and inserting ‘‘insured 

23 by the Deposit Insurance Fund’’; 
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1 (E) in subsection (t)(5)(D)(iii)(II), by strik2 ing ‘‘affected deposit insurance fund’’ and insert3 ing ‘‘Deposit Insurance Fund’’; 

4 (F) in subsection (t)(7)(C)(i)(I), by striking 

5 ‘‘affected deposit insurance fund’’ and inserting 

6 ‘‘Deposit Insurance Fund’’; and 

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

8 ‘‘the Savings Association Insurance Fund’’ and 

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

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

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

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

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

14 ‘‘Savings Association Insurance Fund or Bank 

15 Insurance Fund’’ and inserting ‘‘Deposit Insur16 ance Fund’’; 

17 (C) in subsection (e)(2), by striking ‘‘Sav18 ings Association Insurance Fund or the Bank 

19 Insurance Fund’’ and inserting ‘‘Deposit Insur20 ance Fund’’; 

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

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

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

24 of this section’’ and inserting ‘‘(5) of this sub25 section’’; 
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1 (F) in subsection (i), by redesignating para2 graph (5) as paragraph (4); 

3 (G) in subsection (m)(3), by striking sub4 paragraph (E) and by redesignating subpara5 graphs (F), (G), and (H) as subparagraphs (E), 

6 (F), and (G), respectively; 

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

8 ‘‘during period’’ and inserting ‘‘during the pe9 riod’’; and 

10 (I) in subsection (o)(3)(D), by striking ‘‘sec11 tions 5(s) and (t) of this Act’’ and inserting 

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

13 (g) AMENDMENTS TO THE NATIONAL HOUSING ACT.—

14 The National Housing Act (12 U.S.C. 1701 et seq.) is 

15 amended—

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

17 1723i(b)(1)(B)), by striking ‘‘Bank Insurance Fund 

18 for banks or through the Savings Association Insur19 ance Fund for savings associations’’ and inserting 

20 ‘‘Deposit Insurance Fund’’; and 

21 (2) in section 536(b)(1)(B)(ii) (12 U.S.C. 1735f–

22 14(b)(1)(B)(ii)), by striking ‘‘Bank Insurance Fund 

23 for banks and through the Savings Association Insur24 ance Fund for savings associations’’ and inserting 

25 ‘‘Deposit Insurance Fund’’. 
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1 (h) AMENDMENTS TO THE FINANCIAL INSTITUTIONS

2 REFORM, RECOVERY, AND ENFORCEMENT ACT OF 1989.—

3 The Financial Institutions Reform, Recovery, and Enforce4 ment Act of 1989 (12 U.S.C. 1811 note) is amended—

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

6 1833a(b)(3)(B)), by inserting ‘‘and after the merger of 

7 such funds, the Deposit Insurance Fund,’’ after ‘‘the 

8 Savings Association Insurance Fund,’’; and 

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

10 3341(c)(1)(B)), by striking ‘‘Bank Insurance Fund, 

11 the Savings Association Insurance Fund,’’ and insert12 ing ‘‘Deposit Insurance Fund’’. 

13 (i) AMENDMENT TO THE BANK HOLDING COMPANY

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

15 (12 U.S.C. 1841 et seq.) is amended— 

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

17 striking ‘‘Savings Association Insurance Fund’’ and 

18 inserting ‘‘Deposit Insurance Fund’’; and 

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

20 1842(d)(1)(D)(iii)), by striking ‘‘appropriate deposit 

21 insurance fund’’ and inserting ‘‘Deposit Insurance 

22 Fund’’. 

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

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

25 U.S.C. 1828a) is amended by striking ‘‘any Federal deposit 
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1 insurance fund’’ in subsection (a)(1)(B), paragraphs (2)(B) 

2 and (4)(B) of subsection (b), and subsection (c)(1)(B), each 

3 place that term appears and inserting ‘‘the Deposit Insur4 ance Fund’’. 

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

7 of the first calendar quarter that begins after the end of 

8 the 90-day period beginning on the date of the enactment 

9 of this Act.
Union Calendar No. 31

108TH CONGRESS 

1ST SESSION H. R. 522

[Report No. 108–50] 

A BILL

To reform the Federal deposit insurance system, 

and for other purposes. 

MARCH 27, 2003

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, 

and ordered to be printed