I 
112TH CONGRESS 
1ST SESSION H. R. 2056 
To instruct the Inspector General of the Federal Deposit Insurance Corpora-
tion to study the impact of insured depository institution failures, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 31, 2011 
Mr. WESTMORELAND (for himself, Mr. DAVID SCOTT of Georgia, Mr. BROUN 
of Georgia, Mr. GARY G. MILLER of California, Mr. POSEY, Mr. 
MARCHANT, and Mr. MACK) introduced the following bill; which was re-
ferred to the Committee on Financial Services 
A BILL 
To instruct the Inspector General of the Federal Deposit 
Insurance Corporation to study the impact of insured 
depository institution failures, 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. INSPECTOR GENERAL STUDY. 
(a) STUDY.—The Inspector General of the Federal 
Deposit Insurance Corporation (FDIC) shall conduct a 
comprehensive study on the impact of the failure of in-
sured depository institutions. 
(b) DEFINITIONS.—For purposes of this Act— 
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(1) the term ‘‘insured depository institution’’ 
has the meaning given such term in section 3(c) of 
the Federal Deposit Insurance Act (12 U.S.C. 
1813(c)); 
(2) the term ‘‘private equity company’’ has the 
meaning given the terms ‘‘hedge fund’’ and ‘‘private 
equity fund’’ in section 13(h)(2) of the Bank Hold-
ing Company Act of 1956 (12 U.S.C. 1851(h)(2)); 
and 
(3) the term ‘‘paper-loss’’ means any write 
down on an asset held by an insured depository in-
stitution that causes such institution to raise more 
capital in order to cover the write down. 
(c) MATTERS TO BE STUDIED.—In conducting the 
study under this section, the Inspector General shall ad-
dress the following: 
(1) LOSS-SHARING
AGREEMENTS.—The effect 
of loss-sharing agreements (LSAs), including— 
(A) The impact of loss-sharing on the in-
sured depository institutions that survive and 
the borrowers of insured depository institutions 
that fail, including— 
(i) the impact on the rate of loan 
modifications and adjustments; 
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(ii) whether more types of loans (such 
as commercial, residential, or small busi-
ness loans) could be modified with fewer 
LSAs, or if LSAs could be phased out alto-
gether; 
(iii) the impact on current borrowers 
seeking loan modification from an acquir-
ing institution with an LSA; 
(iv) the impact on the availability of 
credit; and 
(v) the impact on loans with participa-
tion agreements outstanding with other in-
sured depository institutions; 
(B) The effect of FDIC policies and proce-
dures regarding maturing LSAs, including— 
(i) any impact LSAs may have on 
continuing weakness in the real estate 
market; and 
(ii) the likelihood that banks will sell 
off assets to take advantage of LSAs be-
fore such agreements are no longer avail-
able; and 
(C) Methods of ensuring the orderly end of 
expiring LSAs to prevent any adverse impact 
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(A) the impact of FDIC policies on the pri-
vate capitalization of insured depository institu-
tions, especially in States where more than 10 
such insitutions have failed since 2008; 
(B) whether the FDIC fairly and consist-
ently applies capital standards when an insured 
depository institution is successful in raising 
private capital; and 
(C) whether the FDIC steers potential in-
vestors away from insured depository institu-
tions that may be in danger of being placed in 
receivership or conservatorship. 
(6) PRIVATE EQUITY COMPANIES.—The FDIC’s 
handling of potential investment from private equity 
companies in insured depository institutions, includ-
ing— 
(A) the number of insured depository insti-
tutions that have been approved to receive pri-
vate equity investment by the FDIC; 
(B) the number of insured depository insti-
tutions that have been rejected from receiving 
private equity investment by the FDIC; and 
(C) the reasons for rejection of private eq-
uity investment when such rejection occurs. 
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(d) REPORT.—Not later than one year after the date 
of the enactment of this Act, the Inspector General shall 
submit to Congress a report— 
(1) on the results of the study conducted pursu-
ant to this section; and 
(2) any recommendations based on such study. 
SEC. 2. FUNDING. 
The FDIC shall make available from the portion of 
the FDIC budget allocated to management expenses, sums 
allowing the FDIC Inspector General to complete this 
study. 
Æ 
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