I 

111TH CONGRESS 

1ST SESSION H. R. 2897 

To amend the Federal Deposit Insurance Act to return a sense of fairness 

and accountability to the deposit insurance premium assessment process, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 16, 2009 

Mr. GUTIERREZ (for himself, Mr. KANJORSKI, Mr. CAPUANO, Ms. MOORE of 

Wisconsin, and Ms. LEE of California) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To amend the Federal Deposit Insurance Act to return a 

sense of fairness and accountability to the deposit insurance premium assessment process, 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. 

4 This Act may be cited as the ‘‘Bank Accountability 

5 and Risk Assessment Act of 2009’’. 

6 SEC. 2. FINDINGS AND PURPOSE. 

7 (a) FINDINGS.—Congress makes the following find8 ings: 


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1 (1) The unprecedented Government intervention 

2 into the financial markets in 2008 was required by 

3 a threat to our Nation’s economy from large, com4 plex, and deeply inter-connected financial institu5 tions, many of which were on the verge of failing. 

6 (2) The necessary Government intervention in 

7 the financial system placed hundreds of billions of 

8 taxpayer dollars at risk. 

9 (3) Many of the financial institutions involved 

10 in the crisis were so large and their dealings so 

11 intertwined that their failures could have led to the 

12 collapse of America’s financial system. 

13 (4) The scale of the banking system crisis put 

14 severe strains on the Deposit Insurance Fund of the 

15 Federal Deposit Insurance Corporation. 

16 (5) The depository institutions that present a 

17 systemic risk to the financial system would over18 whelm the resources of the Deposit Insurance Fund 

19 if one or more of them were to fail. 

20 (6) Without a substantial increase in the De21 posit Insurance Fund, depository institutions that 

22 are deemed ‘‘too-big-to-fail’’ will remain potential 

23 threats to the health of the entire financial system 

24 and possibly place U.S. taxpayer dollars at risk. 


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1 (7) It is inherently unfair to require the finan2 cial institutions that are too small to be systemic 

3 risks, or that do not become involved in the most 

4 risky, questionable, and harmful financial practices, 

5 to share the financial responsibility for the failures 

6 of these ‘‘too-big-to-fail’’ institutions. 

7 (8) Large depository institutions whose failure 

8 may threaten the safety and soundness of the entire 

9 financial system should be assessed premiums based 

10 on their potential risk to the system, not just on the 

11 deposits they hold. 

12 (9) The Deposit Insurance Fund should be in13 sulated against potential financial crises, the finan14 cial institutions that cause a crisis in the future 

15 must be held accountable, and U.S. taxpayer dollars 

16 should not be placed at risk. 

17 (b) PURPOSE.—The purpose of this Act is to main18 tain the safety and soundness of the U.S. banking system 

19 by ensuring that the Federal Deposit Insurance Corpora20 tions’ Deposit Insurance Fund is adequately capitalized 

21 to respond to the failures of large depository institutions 

22 that would otherwise threaten our financial system and 

23 to return a sense of fairness and accountability to the de24 posit insurance premium assessment process. 


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1 SEC. 3. ACCOUNTING FOR ACTUAL RISK TO THE DEPOSIT 

2 INSURANCE FUND. 

3 (a) Section 7(b)(1)(C) of the Federal Deposit Insur4 ance Act is amended to read as follows: 

5 ‘‘(C) ‘RISK-BASED ASSESSMENT SYSTEM’ 

6 DEFINED.—For purposes of this paragraph, the 

7 term ‘risk-based assessment system’ means a 

8 system for calculating a depository institution’s 

9 assessment based on— 

10 ‘‘(i) the probability that the Deposit 

11 Insurance Fund will incur a loss with re12 spect to the institution; 

13 ‘‘(ii) the likely amount of any such 

14 loss; 

15 ‘‘(iii) the risks to the Deposit Insur16 ance Fund attributable to such depository 

17 institution and its affiliates, taking into ac18 count— 

19 ‘‘(I) the amount, different cat20 egories, and concentrations of assets 

21 of the insured depository institution 

22 and its affiliates, including both on23 balance sheet and off-balance sheet 

24 assets; 

25 ‘‘(II) the amount, different cat26 egories, and concentrations of liabilVerDate Nov 24 2008 05:03 Jun 18, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2897.IH H2897

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1 ities, both insured and uninsured, con2 tingent and noncontingent, including 

3 both on-balance sheet and off-balance 

4 sheet liabilities, of the insured deposi5 tory institution and its affiliates; and 

6 ‘‘(III) any other factors the Cor7 poration determines are relevant to 

8 assessing the risks; and 

9 ‘‘(iv) the revenue needs of the Deposit 

10 Insurance Fund.’’. 

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

12 Act is further amended by redesignating subparagraphs 

13 (E) and (F) as subparagraphs (F) and (G), respectively, 

14 and by adding the following new subparagraph (E): 

15 ‘‘(E) SYSTEMIC RISK PREMIUM.— 

16 ‘‘(i) In addition to any annual assess17 ment imposed under paragraph (2) or spe18 cial assessment imposed under paragraph 

19 (5), the Board of Directors shall impose a 

20 systemic risk assessment, at least annually, 

21 on all systemically important depository in22 stitutions. For purposes of the subpara23 graph, ‘systemically important depository 

24 institution’ shall mean an insured deposi25 tory institution that is designated as sysVerDate Nov 24 2008 05:03 Jun 18, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2897.IH H2897

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1 temically important by the Corporation, in 

2 consultation with the Secretary of the 

3 Treasury and the Board of Governors of 

4 the Federal Reserve System, or that is an 

5 affiliate of a depository institution holding 

6 company or, in the case of an industrial 

7 loan company, controlling parent company 

8 designated as systemically important by 

9 the Corporation, in consultation with the 

10 Secretary of the Treasury and the Board 

11 of Governors of the Federal Reserve Sys12 tem. 

13 ‘‘(ii) In designating an insured deposi14 tory institution, depository institution hold15 ing company, or controlling parent com16 pany as systemically important, the Cor17 poration shall take into account: 

18 ‘‘(I) the amount, different cat19 egories, and concentrations of assets 

20 of the entity and its affiliates, includ21 ing both on-balance sheet and off-bal22 ance sheet assets; 

23 ‘‘(II) the amount, different cat24 egories, and concentrations of liabil25 ities, both insured and uninsured, conVerDate Nov 24 2008 05:03 Jun 18, 2009 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2897.IH H2897

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1 tingent and noncontingent, including 

2 both on-balance sheet and off-balance 

3 sheet liabilities, of the entity and its 

4 affiliates; 

5 ‘‘(III) the activities of the entity 

6 and its affiliates; 

7 ‘‘(IV) the relevant market share 

8 of the entity and its affiliates; and 

9 ‘‘(V) the potential adverse effects 

10 on economic conditions and financial 

11 stability, in the event any of the 

12 grounds in (c)(5) were to exist with 

13 respect to such entity.’’. 

14 (c) Section 7(b)(2) of the Federal Deposit Insurance 

15 Act is amended by striking paragraph (D) and by redesig16 nating subparagraph (C) as subparagraph (D). 

17 SEC. 4. CREATING A RISK-FOCUSED ASSESSMENT BASE. 

18 Section 7(b)(2), as amended, is further amended by 

19 adding the following new subparagraph (C): 

20 ‘‘(C) ASSESSMENT BASE.—The assessment 

21 of any insured depository institution imposed 

22 under this subsection shall be an amount equal 

23 to the product of— 

24 ‘‘(i) an assessment rate established by 

25 the Corporation; and 


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1 ‘‘(ii) the amount of the insured depos2 itory institution’s average total assets dur3 ing the assessment period minus the 

4 amount of the insured depository institu5 tion’s average tangible equity during the 

6 assesssment period.’’. 

Æ 


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