I
104TH CONGRESS
1ST SESSION
H. R. 1477
To merge the Bank Insurance Fund and the Savings Association Insurance
Fund, to improve funding for the Financing Corporation, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 7, 1995
Mr. LAFALCE introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
To merge the Bank Insurance Fund and the Savings Asso-
ciation Insurance Fund, to improve funding for the Fi-
nancing Corporation, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Deposit Insurance
Fund Merger Act of 1995’’.
SEC. 2. MERGER OF FDIC INSURANCE FUNDS.
(a) IN GENERAL.—Section 11(a) of the Federal De-
posit Insurance Act (12 U.S.C. 1821(a)) is amended—
(1) by striking paragraphs (5) and (6) and in-
serting the following new paragraph:
‘‘(5) DEPOSIT INSURANCE FUND.—
‘‘(A) ESTABLISHMENT.—There is hereby
established a fund to be known as the deposit
insurance fund.
‘‘(B) TRANSFER TO FUND.—On the date
of the enactment of the Deposit Insurance
Fund Merger Act of 1995, the Bank Insurance
Fund and the Savings Association Insurance
Fund shall be abolished and all assets and li-
abilities of each such fund shall be transferred
to the deposit insurance fund.
‘‘(C) USES.—The deposit insurance fund
shall be available to the Corporation for use
with respect to insured depository institutions.
‘‘(D) DEPOSITS.—All amounts assessed
against insured depository institutions under
this Act shall be deposited in the deposit insur-
ance fund.
‘‘(6) ACCOUNTING REQUIREMENTS.—
‘‘(A) ACCOUNTING FOR USE OF FACILITIES
AND RESOURCES.—The Corporation shall keep
a full and complete accounting of all costs and
expenses associated with the use of any facility
or resource used in the course of conducting su-
pervisory, regulatory, conservatorship, receiver-
ship, or liquidation functions with respect to in-
sured depository institutions.
‘‘(B) ACCOUNTING
FOR
HOLDING
AND
MANAGING ASSETS AND LIABILITIES.—The Cor-
poration shall keep a full and complete account-
ing of all costs and expenses associated with the
holding and management of any asset or liabil-
ity belonging to insured depository institutions
in conservatorship or receivership.
‘‘(C) ACCOUNTING
FOR
DISPOSITION
OF
ASSETS
AND
LIABILITIES.—The Corporation
shall keep a full and complete accounting of all
expenses and receipts associated with the dis-
position of any asset or liability belonging to in-
sured depository institutions in conservatorship
or receivership.’’;
(2) by striking subparagraph (A) of paragraph
(4); and
(3) by striking paragraph (7) and redesignating
paragraph (8) as paragraph (7).
(b) ASSESSMENTS
OF
FORMER
BIF MEMBERS
CAPPED AT RATES APPLICABLE BEFORE MERGER OF
FUNDS.—Section 7(b)(2) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1817(b)(2)) is amended by inserting
after subparagraph (G) the following new subparagraphs:
‘‘(H) REDUCED ASSESSMENT RATES CON-
TINUE TO APPLY TO FORMER BIF MEMBERS.—
Until the deposit insurance fund first meets or
exceeds the designated reserve ratio, the aver-
age assessment rates applicable under the risk-
based assessment system for any semiannual
period with respect to insured depository insti-
tutions which were Bank Insurance Fund mem-
bers on the day before the date of the enact-
ment of the Deposit Insurance Fund Merger
Act of 1995 shall not exceed the greater of—
‘‘(i) the average of the assessment
rates which would be applicable to such in-
stitutions under this section for any semi-
annual period if the amendments made by
such Act had not been enacted; or
‘‘(ii) 6 basis points.
‘‘(I) 
SCHEDULE
FOR
MEETING
DES-
IGNATED
RESERVE
RATIO.—Notwithstanding
paragraph (3), upon the enactment of the De-
posit Insurance Fund Merger Act of 1995, the
Corporation shall prescribe a schedule in the
manner provided in paragraph (3)(B) which
culminates in a reserve ratio that is equal to or
greater than the designated reserve ratio not
later than 5 years after the date of the enact-
ment of such Act.’’.
(c) REPEAL OF CONVERSION MORATORIUM, EXIT
FEE, AND ‘‘OAKAR BANK’’ PROVISIONS.—Section 5(d) of
the Federal Deposit Insurance Act (12 U.S.C. 1815(d))
is amended by striking paragraphs (2) and (3).
(d) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 5(d)(1) of the Federal Deposit In-
surance Act (12 U.S.C. 1815(d)(1)) is amended by
striking ‘‘Bank Insurance Fund and the Savings As-
sociation Insurance Fund’’ and inserting ‘‘deposit
insurance fund’’.
(2) Section 7(b) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1817(b)) is amended—
(A) in paragraph (1)(D), by striking
‘‘each’’ and inserting ‘‘the’’;
(B) in paragraph (2)(A)(i)(I), by striking
‘‘each’’ and inserting ‘‘the’’;
(C) in paragraph (2)(A)(iii), by striking ‘‘a
deposit’’ and inserting ‘‘the deposit’’;
(D) in paragraph (2)(A)(iv), by striking
‘‘each’’ and inserting ‘‘the’’;
(E) by striking subparagraph (B) of para-
graph (2);
(F) in paragraph (2)(C), by striking
‘‘each’’ and inserting ‘‘the’’;
(G) by striking subparagraphs (E) and (F)
of paragraph (2);
(H) in paragraph (2)(G), by striking ‘‘a
deposit’’ and inserting ‘‘the deposit’’;
(I) in paragraph (3)(A), by striking ‘‘any
deposit’’ and inserting ‘‘the deposit’’;
(J) by striking subparagraphs (C) and (D)
of paragraph (3);
(K) in paragraph (6)(A)(ii), by striking
‘‘Bank Insurance Fund members’’ and inserting
‘‘insured depository institutions’’; and
(L) by striking subparagraph (B) of para-
graph (6).
(3) Section 7 of the Federal Deposit Insurance
Act (12 U.S.C. 1817) is amended by striking sub-
section (l).
(4) Section 11(f)(1) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(f)(1)) is amended by
striking ‘‘, except that—’’ and all that follows
through the period at the end and inserting a period.
(5) Section 11(i)(3) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(i)(3)) is amended by
striking subparagraph (B) and by redesignating sub-
paragraph (C) as subparagraph (B).
(6) Section 11A(a) of the Federal Deposit In-
surance Act (12 U.S.C. 1821A(a)) is amended—
(A) in paragraph (2)(B), by striking ‘‘Sav-
ings Association Insurance Fund’’ and inserting
‘‘deposit insurance fund’’; and
(B) in paragraph (3), by striking ‘‘Bank
Insurance Fund, the Savings Association Insur-
ance Fund,’’ and inserting ‘‘deposit insurance
fund’’.
(7) Section 13 of the Federal Deposit Insurance
Act (12 U.S.C. 1823) is amended—
(A) in subsection (a)(1) by striking ‘‘Bank
Insurance Fund, Savings Association Insurance
Fund,’’ and inserting ‘‘deposit insurance fund’’;
(B) by striking paragraph (11) of sub-
section (c);
(C) in subsection (k)(4)(B)(ii), by striking
‘‘Savings Association Insurance Fund member’’
and inserting ‘‘savings association’’; and
(D) in subsection (k)(5)(A), by striking
‘‘Savings Association Insurance Fund mem-
bers’’ and inserting ‘‘savings associations’’.
(8) Section 14 of the Federal Deposit Insurance
Act (12 U.S.C. 1824) is amended—
(A) in subsection (a), by striking ‘‘Bank
Insurance Fund or the Savings Association In-
surance Fund’’ and inserting ‘‘deposit insur-
ance fund’’;
(B) in subsection (a), by striking ‘‘Bank
Insurance Fund or Savings Association Insur-
ance Fund’’ and inserting ‘‘deposit insurance
fund’’;
(C) in subsection (c), by striking para-
graph (3); and
(D) in subsection (d)—
(i) by striking ‘‘Bank Insurance Fund
members’’ each place such term appears
and inserting ‘‘insured depository institu-
tions’’;
(ii) by striking ‘‘Bank Insurance
Fund member’’ each place such term ap-
pears and inserting ‘‘insured depository in-
stitution’’; and
(iii) by striking ‘‘Bank Insurance
Fund’’ each place such term appears
(other than in connection with a term re-
ferred to in clause (i) or (ii)) and inserting
‘‘deposit insurance fund’’.
(9) Section 15(c)(5) of the Federal Deposit In-
surance Act (12 U.S.C. 1825(c)(5)) is amended—
(A) by striking ‘‘Bank Insurance Fund or
Savings Association Insurance Fund, respec-
tively,’’ each place such term appears and in-
serting ‘‘deposit insurance fund’’; and
(B) by striking ‘‘Bank Insurance Fund or
the Savings Association Insurance Fund, re-
spectively,’’ each place such term appears and
inserting ‘‘deposit insurance fund’’.
(10) Section 17 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1827) is amended by striking
‘‘Bank Insurance Fund, Savings Association Insur-
ance Fund,’’ each place such term appears and in-
serting ‘‘deposit insurance fund’’.
(11) Section 18(m)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(m)(3)) is amend-
ed—
(A) in subparagraph (A)—
(i) by inserting ‘‘of an insured savings
association or a subsidiary of any such as-
sociation’’ after ‘‘specific activity’’;
(ii) by striking ‘‘Savings Association
Insurance Fund.’’ and inserting ‘‘deposit
insurance fund.’’; and
(iii) by striking ‘‘that Savings Asso-
ciation Insurance Fund member’’ and in-
serting ‘‘such savings association’’; and
(B) in subparagraph (C), by striking ‘‘Sav-
ings Association Insurance Fund or the Bank
Insurance Fund’’ and inserting ‘‘deposit insur-
ance fund’’.
(12) Section 31 of the Federal Deposit Insur-
ance Act (12 U.S.C. 1831h) is amended—
(A) in subsection (a), by striking ‘‘Insur-
ance Fund’’; and
(B) in subsection (b)(2), by striking ‘‘Sav-
ings Association Insurance Fund members’’ and
inserting ‘‘savings associations’’.
(13) Section 38(o)(1)(B) of the Federal Deposit
Insurance Act (12 U.S.C. 1831o(o)(1)(B)) is amend-
ed by striking ‘‘Savings Association Insurance
Fund’’ and inserting ‘‘deposit insurance fund’’.
SEC. 3. FICO PAYMENTS BY ALL FDIC-INSURED DEPOSI-
TORY INSTITUTIONS.
Section 21(f)(2) of the Federal Home Loan Bank Act
(12 U.S.C. 1441(f)(2)) is amended—
(1) in the portion of such paragraph preceding
subparagraph (A)—
(A) by striking ‘‘each Savings Association
Insurance Fund member’’ and inserting ‘‘each
insured depository institution (as defined in sec-
tion 3(c)(2) of the Federal Deposit Insurance
Act); and
(B) by striking ‘‘such member’’ and insert-
ing ‘‘such institution’’; and
(2) in subparagraph (A), by striking ‘‘Savings
Association Insurance Fund members’’ and inserting
‘‘insured depository institutions’’.
SEC. 4. 1-TIME SPECIAL SAIF CAPITALIZATION ASSESS-
MENT.
Section 7(b) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(b)) is amended by inserting after para-
graph (7) the following new paragraph:
‘‘(8) SPECIAL 1-TIME ASSESSMENT TO RECAPI-
TALIZE SAIF.—
‘‘(A) IN GENERAL.—The Corporation may,
in the discretion of the Board of Directors, im-
pose a special assessment on—
‘‘(i) each insured depository institu-
tion which, as of January 1, 1995, or at
any time after such date, was a Savings
Association Insurance Fund member under
the Federal Deposit Insurance Act (as in
effect on the day before the date of the en-
actment of the Deposit Insurance Fund
Merger Act of 1995); and
‘‘(ii) any other insured depository in-
stitution which acquires (as defined in sec-
tion 13(f)(8)(B) of the Federal Deposit In-
surance Act) such insured depository insti-
tution or is otherwise a successor in inter-
est to such institution,
in an amount not greater than 0.40 percent of
the assessment base, as of January 1, 1995, on
which assessments are imposed under the risk-
based assessment system established pursuant
to paragraph (1).
‘‘(B) DEPOSIT OF ASSESSMENT IN SAIF.—
The proceeds of any assessment imposed under
subparagraph (A) shall be deposited in the Sav-
ings Association Insurance Fund.
‘‘(C) 
IMPOSITION
OVER
PERIOD
OF
YEARS.—The assessment authorized under sub-
paragraph (A) may be imposed incrementally
over such period of years as the Board of Di-
rectors may determine to be appropriate, except
the larger percentage of any such incremental
assessment shall be allocated to the first year of
the effective period for such assessment.
‘‘(D) ABATEMENT FOR TROUBLED INSTI-
TUTIONS.—The Board of Directors may abate
any portion of any assessment under this para-
graph in the case of any undercapitalized insti-
tution or any institution which would become
undercapitalized as a result of the imposition of
such assessment.’’.
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