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103D CONGRESS
1ST SESSION
H. R. 2911
To authorize the President to establish an advisory commission to study
the merger of the BIF and SAIF funds and the implications for the
banking and thrift industries of such a merger.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 6, 1993
Mr. DREIER introduced the following bill; which was referred to the
Committee on Banking, Finance and Urban Affairs
A BILL
To authorize the President to establish an advisory commis-
sion to study the merger of the BIF and SAIF funds
and the implications for the banking and thrift industries
of such a merger.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SENSE OF THE CONGRESS
SECTION 1. It is the sense of the Congress that—
(1) while there have been massive governmental
efforts and expenditure of funds to complete the res-
olution of the thrift crisis and despite improvement
in the condition of most segments of the thrift in-
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dustry, there is a risk that the structure of the de-
posit insurance funds since FIRREA could under-
mine even the healthiest segments of the thrift in-
dustry by impeding their ability to compete and pre-
cipitating another costly crisis in that industry. The
structural issues involve—
(a) the presence of two separate insurance
funds, the BIF and SAIF funds;
(b) the projected, substantial disparity in
deposit insurance premiums to be paid by BIF
and SAIF members and the potential for a
competitive imbalance;
(c) the presence of a designated reserve
ratio of 1.25 percent of insured deposits for
BIF and SAIF funds; and
(d) the effect which existing debt obliga-
tions have on the ability of the SAIF fund to
accumulate reserves and to become fiscally
sound.
(2) to ensure the continued availability of hous-
ing credit and to avoid another costly crisis in the
thrift industry as a result of some of these struc-
tural impediments involving the FIRREA-mandated
separate fund concept, an Advisory Commission
shall be formed to advise the President and the Con-
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gress on the viability of merging or maintaining the
separation of the deposit insurance funds and the
impact of such action on the health of the BIF and
SAIF funds, the confidence of depositors in the fed-
eral deposit insurance system, and the regulation of
and competitive balance between banks and thrifts.
ESTABLISHMENT OF AN ADVISORY COMMISSION
SEC. 2. There is hereby established an Advisory Com-
mission to be known as the Advisory Commission on BIF
and SAIF funds (thereafter referred to as the ‘‘Advisory
Commission’’).
(a) MEMBERSHIP OF THE ADVISORY COMMISSION.—
(1) NUMBER AND APPOINTMENT.—The Advi-
sory Commission shall be composed of 7 members
appointed no later than ninety days after the date
of the enactment of this Act. The members shall be
appointed as follows:
(A) Two citizens of the United States ap-
pointed by the President.
(B) One citizen of the United States ap-
pointed by the President pro tempore of the
Senate upon the recommendation of the major-
ity leader of the Senate.
(C) One citizen of the United States ap-
pointed by the President pro tempore of the
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Senate upon the recommendation of the minor-
ity leader of the Senate.
(D) One citizen of the United States ap-
pointed by the Speaker of the House upon the
recommendation of the majority leader of the
House of Representatives.
(E) One citizen of the United States ap-
pointed by the Speaker of the House upon the
recommendation of the minority leader of the
House of Representatives.
(F) The Secretary of the Treasury or his
designate.
(2) ADDITIONAL QUALIFICATIONS.—
(A) IN GENERAL.—Members of the Advi-
sory Commission who are appointed under any
subparagraph of paragraph (1) shall be ap-
pointed from among individuals who are spe-
cially qualified to serve on the Advisory Com-
mission by virtue of their education, training, or
experience.
(B) LIMITATION.—Of the total number of
members of the Advisory Commission who are
described in subparagraph (A), not more than
one such member may be, at the time of any
such member’s appointment and during any
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such member’s service on the Advisory Commis-
sion—
(i) a director, officer, or employee of
any savings association;
(ii) a director, officer, or employee of
any bank; or
(iii) a director, officer, employee or
agent of any consumer organization.
(3) TERMS.—Members shall be appointed for
the life of the Advisory Commission.
(4) CHAIRPERSON.—The chairperson of the Ad-
visory Commission shall be the Secretary of the
Treasury or his designate.
(5) QUORUM.—A majority of the members of
the Advisory Commission shall constitute a quorum
for the transaction of business.
(6) VOTING.—Each member of the Advisory
Commission shall be entitled to 1 vote, which shall
be equal to the vote of every other member of the
Advisory Commission.
(7) VACANCIES.—No vacancy on the Advisory
Commission shall affect the powers of the Advisory
Commission and any such vacancy shall be filled in
the manner in which the original appointment was
made.
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(8) COMPENSATION AND EXPENSES.—
(A) NO BASIC PAY.—Except as provided in
subparagraph (B), members of the Advisory
Commission shall receive no additional pay, al-
lowances, or benefits by reason of their service
on the Advisory Commission.
(B) PER DIEM AND TRAVEL EXPENSES.—
Members of the Advisory Commission who are
appointed from among private citizens of the
United States may be allowed travel expenses,
including per diem, in lieu of substance, as au-
thorized by law for persons serving intermit-
tently in the government service to the extent
that funds are available for such purposes.
(9) MEETINGS.—The Advisory Commission
shall meet at the call of the Chairperson or a major-
ity of the members.
(b) FUNCTIONS OF THE ADVISORY COMMISSION.—
(1) CONTENTS
AND
SPECIFIC
RECOMMENDA-
TIONS.—The Advisory Commission shall conduct an
investigation and evaluation of and shall report and
make recommendations on the future status of the
deposit insurance system.
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(2) ISSUES TO BE CONSIDERED.—Pursuant to
its responsibilities under this section the Advisory
Commission shall consider the following issues:
(A) An analysis of whether a deposit insur-
ance premium disparity between banks and
thrifts is likely and the competitive impact
thereof.
(B) The practical justification for main-
taining two separate Federal deposit funds.
(C) The impact on the soundness of the
Federal deposit insurance system by the con-
tinuation of a separate insurance fund for
banks and savings associations.
(D) Whether a merger of the Bank Insur-
ance Fund and Savings Association Insurance
Fund can be accomplished in a manner which
is equitable and the legal and structural impedi-
ments which need to be addressed in such a
merger.
(E) The timing of a merger of the two
funds, should such occur.
(F) Whether the designated ratio of re-
serves of 1.25 per centum of insured deposits,
which must now be held by each deposit insur-
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ance fund, is appropriate in light of current and
future needs and considerations.
(G) The impact of any remaining regu-
latory differences between banks and thrifts on
the soundness of a merged fund.
(H) The impact of a fund merger on a
consolidation of the bank and thrift regulatory
agencies.
(3) FINAL REPORT.—
(A) REPORT REQUIRED.—Not later than
the end of the one-year period beginning on the
date of the enactment of this Act, the Advisory
Commission shall submit to the President, the
Committee on Banking, Finance and Urban Af-
fairs of the House of Representatives, and the
Committee on Banking, Housing and Urban
Affairs of the Senate, a final report which con-
tains a detailed statement of the findings and
conclusions of the Advisory Board, including
such recommendations for administrative and
legislative action as the Advisory Commission
determines to be appropriate.
(B) MAJORITY VOTE.—A recommendation
may be made by the Advisory Commission to
the President and to the Congress only if it is