423 
standard maximum share insurance amount (as 
determined under paragraph (5)), except as 
provided in subparagraph (B). 
‘‘(B) IN-STATE MUNICIPAL DEPOSITORS.— 
In the case of the deposits of an in-State mu-
nicipal depositor described in clause (ii), (iii), 
(iv), or (v) of subparagraph (E) at an insured 
credit union, such deposits shall be insured in 
an amount equal to the lesser of— 
‘‘(i) $2,000,000; or 
‘‘(ii) the sum of the standard max-
imum deposit insurance amount and 80 
percent of the amount of any deposits in 
excess of the standard maximum deposit 
insurance amount. 
‘‘(C) RULE OF CONSTRUCTION.—No provi-
sion of this paragraph shall be construed as au-
thorizing an insured credit union to accept the 
deposits of a municipal depositor in an amount 
greater than such credit union is authorized to 
accept under any other provision of Federal or 
State law. 
‘‘(D) IN-STATE MUNICIPAL DEPOSITOR DE-
FINED.—For purposes of this paragraph, the 
term ‘in-State municipal depositor’ means a
424 
municipal depositor that is located in the same 
State as the office or branch of the insured 
credit union at which the deposits of that de-
positor are held. 
‘‘(E) MUNICIPAL
DEPOSITOR.—In this 
paragraph, the term ‘municipal depositor’ 
means a depositor that is—’’; 
(iii) by striking ‘‘(B) The’’ and insert-
ing the following: 
‘‘(F) AUTHORITY
TO
LIMIT
DEPOSITS.— 
The’’; and 
(iv) by striking ‘‘depositor or member 
referred to in subparagraph (A)’’ and in-
serting ‘‘municipal depositor or member’’; 
and 
(C) by adding at the end the following new 
paragraphs: 
‘‘(4) COVERAGE FOR CERTAIN EMPLOYEE BEN-
EFIT PLAN DEPOSITS.— 
‘‘(A) PASS-THROUGH
INSURANCE.—The 
Administration shall provide pass-through share 
insurance for the deposits or shares of any em-
ployee benefit plan. 
‘‘(B) PROHIBITION
ON
ACCEPTANCE
OF 
DEPOSITS.—An insured credit union that is not
425 
well capitalized or adequately capitalized may 
not accept employee benefit plan deposits. 
‘‘(C) DEFINITIONS.—For purposes of this 
paragraph, the following definitions shall apply: 
‘‘(i) 
CAPITAL
STANDARDS.—The 
terms ‘well capitalized’ and ‘adequately 
capitalized’ have the same meanings as in 
section 216(c). 
‘‘(ii) EMPLOYEE
BENEFIT
PLAN.— 
The term ‘employee benefit plan’— 
‘‘(I) has the meaning given to 
such term in section 3(3) of the Em-
ployee Retirement Income Security 
Act of 1974; 
‘‘(II) includes any plan described 
in section 401(d) of the Internal Rev-
enue Code of 1986; and 
‘‘(III) includes any eligible de-
ferred compensation plan described in 
section 457 of the Internal Revenue 
Code of 1986. 
‘‘(iii) PASS-THROUGH
SHARE
INSUR-
ANCE.—The term ‘pass-through share in-
surance’ means, with respect to an em-
ployee benefit plan, insurance coverage
426 
provided on a pro rata basis to the partici-
pants in the plan, in accordance with the 
interest of each participant. 
‘‘(D) RULE OF CONSTRUCTION.—No provi-
sion of this paragraph shall be construed as au-
thorizing an insured credit union to accept the 
deposits of an employee benefit plan in an 
amount greater than such credit union is au-
thorized to accept under any other provision of 
Federal or State law. 
‘‘(5) STANDARD MAXIMUM SHARE INSURANCE 
AMOUNT DEFINED.—For purposes of this Act, the 
term ‘standard maximum share insurance amount’ 
means— 
‘‘(A) until the effective date of final regula-
tions prescribed pursuant to section 4009(a)(2) 
of the Federal Deposit Insurance Reform Act of 
2005, $100,000; and 
‘‘(B) on and after such effective date, 
$130,000, adjusted as provided under section 
11(a)(1)(F) of the Federal Deposit Insurance 
Act.’’. 
(2) DOUBLING OF SHARE INSURANCE FOR CER-
TAIN
RETIREMENT
ACCOUNTS.—Section 207(k)(3) 
of the Federal Credit Union Act (12 U.S.C.
427 
1787(k)(3)) is amended by striking ‘‘$100,000’’ and 
inserting ‘‘2 times the standard maximum share in-
surance amount (as determined under paragraph 
(1))’’. 
(h) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect on the date 
the final regulations required under section 4009(a)(2) 
take effect. 
SEC. 4004. SETTING ASSESSMENTS AND REPEAL OF SPE-
CIAL RULES RELATING TO MINIMUM ASSESS-
MENTS AND FREE DEPOSIT INSURANCE. 
(a) SETTING ASSESSMENTS.—Section 7(b)(2) of the 
Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is 
amended— 
(1) by striking subparagraphs (A) and (B) and 
inserting the following new subparagraphs: 
‘‘(A) IN GENERAL.—The Board of Direc-
tors shall set assessments for insured depository 
institutions in such amounts as the Board of 
Directors may determine to be necessary or ap-
propriate, subject to subparagraph (D). 
‘‘(B) FACTORS
TO
BE
CONSIDERED.—In 
setting assessments under subparagraph (A), 
the Board of Directors shall consider the fol-
lowing factors:
428 
‘‘(i) The estimated operating expenses 
of the Deposit Insurance Fund. 
‘‘(ii) The estimated case resolution ex-
penses and income of the Deposit Insur-
ance Fund. 
‘‘(iii) The projected effects of the pay-
ment of assessments on the capital and 
earnings of insured depository institutions. 
‘‘(iv) the risk factors and other factors 
taken into account pursuant to paragraph 
(1) under the risk-based assessment sys-
tem, including the requirement under such 
paragraph to maintain a risk-based sys-
tem. 
‘‘(v) Any other factors the Board of 
Directors may determine to be appro-
priate.’’; and 
(2) by inserting after subparagraph (C) the fol-
lowing new subparagraph: 
‘‘(D) BASE RATE FOR ASSESSMENTS.— 
‘‘(i) IN GENERAL.—In setting assess-
ment rates pursuant to subparagraph (A), 
the Board of Directors shall establish a 
base rate of not more than 1 basis point 
(exclusive of any credit or dividend) for
429 
those insured depository institutions in the 
lowest-risk category under the risk-based 
assessment system established pursuant to 
paragraph (1). No insured depository insti-
tution shall be barred from the lowest-risk 
category solely because of size. 
‘‘(ii) SUSPENSION.—Clause (i) shall 
not apply during any period in which the 
reserve ratio of the Deposit Insurance 
Fund is less than the amount which is 
equal to 1.15 percent of the aggregate esti-
mated insured deposits.’’. 
(b) ASSESSMENT RECORDKEEPING PERIOD SHORT-
ENED.—Paragraph (5) of section 7(b) of the Federal De-
posit Insurance Act (12 U.S.C. 1817(b)) is amended to 
read as follows: 
‘‘(5) DEPOSITORY INSTITUTION REQUIRED TO 
MAINTAIN
ASSESSMENT-RELATED
RECORDS.—Each 
insured depository institution shall maintain all 
records that the Corporation may require for 
verifying the correctness of any assessment on the 
insured depository institution under this subsection 
until the later of— 
‘‘(A) the end of the 3-year period begin-
ning on the due date of the assessment; or
430 
‘‘(B) in the case of a dispute between the 
insured depository institution and the Corpora-
tion with respect to such assessment, the date 
of a final determination of any such dispute.’’. 
(c) INCREASE IN FEES FOR LATE ASSESSMENT PAY-
MENTS.—Subsection (h) of section 18 of the Federal De-
posit Insurance Act (12 U.S.C. 1828(h)) is amended to 
read as follows: 
‘‘(h) PENALTY FOR FAILURE TO TIMELY PAY AS-
SESSMENTS.— 
‘‘(1) IN GENERAL.—Subject to paragraph (3), 
any insured depository institution which fails or re-
fuses to pay any assessment shall be subject to a 
penalty in an amount not more than 1 percent of 
the amount of the assessment due for each day that 
such violation continues. 
‘‘(2) EXCEPTION IN CASE OF DISPUTE.—Para-
graph (1) shall not apply if— 
‘‘(A) the failure to pay an assessment is 
due to a dispute between the insured depository 
institution and the Corporation over the 
amount of such assessment; and 
‘‘(B) the insured depository institution de-
posits security satisfactory to the Corporation
431 
for payment upon final determination of the 
issue. 
‘‘(3) SPECIAL RULE FOR SMALL ASSESSMENT 
AMOUNTS.—If the amount of the assessment which 
an insured depository institution fails or refuses to 
pay is less than $10,000 at the time of such failure 
or refusal, the amount of any penalty to which such 
institution is subject under paragraph (1) shall not 
exceed $100 for each day that such violation con-
tinues. 
‘‘(4) AUTHORITY TO MODIFY OR REMIT PEN-
ALTY.—The Corporation, in the sole discretion of 
the Corporation, may compromise, modify or remit 
any penalty which the Corporation may assess or 
has already assessed under paragraph (1) upon a 
finding that good cause prevented the timely pay-
ment of an assessment.’’. 
(d) ASSESSMENTS FOR LIFELINE ACCOUNTS.— 
(1) IN GENERAL.—Section 232 of the Federal 
Deposit Insurance Corporation Improvement Act of 
1991 (12 U.S.C. 1834) is amended by striking sub-
section (c). 
(2) CLARIFICATION OF RATE APPLICABLE TO 
DEPOSITS
ATTRIBUTABLE
TO
LIFELINE
AC-
COUNTS.—Section 7(b)(2)(H) of the Federal Deposit
432 
Insurance Act (12 U.S.C. 1817(b)(2)(H)) is amend-
ed by striking ‘‘at a rate determined in accordance 
with such Act’’ and inserting ‘‘at 1⁄2 the assessment 
rate otherwise applicable for such insured depository 
institution’’. 
(3) REGULATIONS.—Section 232(a)(1) of the 
Federal Deposit Insurance Corporation Improvement 
Act of 1991 (12 U.S.C. 1834(a)(1)) is amended by 
striking ‘‘Board of Governors of the Federal Reserve 
System, and the’’. 
(e) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) Paragraph (3) of section 7(a) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1817(a)(3)) 
is amended by striking the 3d sentence and inserting 
the following: ‘‘Such reports of condition shall be the 
basis for the certified statements to be filed pursu-
ant to subsection (c).’’. 
(2) Subparagraphs (B)(ii) and (C) of section 
7(b)(1) of the Federal Deposit Insurance Act (12 
U.S.C. 1817(b)(1)) are each amended by striking 
‘‘semiannual’’ where such term appears in each such 
subparagraph. 
(3) Section 7(b)(2) of the Federal Deposit In-
surance Act (12 U.S.C. 1817(b)(2)) is amended—
433 
(A) by striking subparagraphs (E), (F), 
and (G); 
(B) in subparagraph (C), by striking 
‘‘semiannual’’; and 
(C) by redesignating subparagraph (H) (as 
amended by subsection (e)(2) of this section) as 
subparagraph (E). 
(4) Section 7(b) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1817(b)) is amended by strik-
ing paragraph (4) and redesignating paragraphs (5) 
(as amended by subsection (b) of this section), (6), 
and (7) as paragraphs (4), (5), and (6) respectively. 
(5) Section 7(c) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1817(c)) is amended— 
(A) in paragraph (1)(A), by striking 
‘‘semiannual’’; 
(B) in paragraph (2)(A), by striking 
‘‘semiannual’’; and 
(C) in paragraph (3), by striking ‘‘semi-
annual period’’ and inserting ‘‘initial assess-
ment period’’. 
(6) Section 8(p) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1818(p)) is amended by strik-
ing ‘‘semiannual’’.
434 
(7) Section 8(q) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1818(q)) is amended by strik-
ing ‘‘semiannual period’’ and inserting ‘‘assessment 
period’’. 
(8) Section 13(c)(4)(G)(ii)(II) of the Federal 
Deposit 
Insurance 
Act 
(12 
U.S.C. 
1823(c)(4)(G)(ii)(II)) is amended by striking ‘‘semi-
annual period’’ and inserting ‘‘assessment period’’. 
(9) Section 232(a) of the Federal Deposit In-
surance Corporation Improvement Act of 1991 (12 
U.S.C. 1834(a)) is amended— 
(A) in the matter preceding subparagraph 
(A) of paragraph (2), by striking ‘‘the Board 
and’’; 
(B) in subparagraph (J) of paragraph (2), 
by striking ‘‘the Board’’ and inserting ‘‘the 
Corporation’’; 
(C) by striking subparagraph (A) of para-
graph (3) and inserting the following new sub-
paragraph: 
‘‘(A) CORPORATION.—The term ‘Corpora-
tion’ means the Federal Deposit Insurance Cor-
poration.’’; and
435 
(D) in subparagraph (C) of paragraph (3), 
by striking ‘‘Board’’ and inserting ‘‘Corpora-
tion’’. 
(f) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect on the date 
that the final regulations required under section 
4009(a)(5) take effect. 
SEC. 4005. REPLACEMENT OF FIXED DESIGNATED RESERVE 
RATIO WITH RESERVE RANGE. 
(a) IN GENERAL.—Section 7(b)(3) of the Federal 
Deposit Insurance Act (12 U.S.C. 1817(b)(3)) is amended 
to read as follows: 
‘‘(3) DESIGNATED RESERVE RATIO.— 
‘‘(A) ESTABLISHMENT.— 
‘‘(i) IN GENERAL.—The Board of Di-
rectors shall designate, by regulation after 
notice and opportunity for comment, the 
reserve ratio applicable with respect to the 
Deposit Insurance Fund. 
‘‘(ii) NOT LESS THAN ANNUAL REDE-
TERMINATION.—A 
determination 
under 
clause (i) shall be made by the Board of 
Directors at least before the beginning of 
each calendar year, for such calendar year,
436 
and at such other times as the Board of 
Directors may determine to be appropriate. 
‘‘(B) RANGE.—The reserve ratio des-
ignated by the Board of Directors for any 
year— 
‘‘(i) may not exceed 1.4 percent of es-
timated insured deposits; and 
‘‘(ii) may not be less than 1.15 per-
cent of estimated insured deposits. 
‘‘(C) FACTORS.—In designating a reserve 
ratio for any year, the Board of Directors 
shall— 
‘‘(i) take into account the risk of 
losses to the Deposit Insurance Fund in 
such year and future years, including his-
toric experience and potential and esti-
mated losses from insured depository insti-
tutions; 
‘‘(ii) take into account economic con-
ditions generally affecting insured deposi-
tory institutions so as to allow the des-
ignated reserve ratio to increase during 
more favorable economic conditions and to 
decrease during less favorable economic 
conditions, notwithstanding the increased
437 
risks of loss that may exist during such 
less favorable conditions, as determined to 
be appropriate by the Board of Directors; 
‘‘(iii) seek to prevent sharp swings in 
the assessment rates for insured depository 
institutions; and 
‘‘(iv) take into account such other fac-
tors as the Board of Directors may deter-
mine to be appropriate, consistent with the 
requirements of this subparagraph. 
‘‘(D) PUBLICATION OF PROPOSED CHANGE 
IN RATIO.—In soliciting comment on any pro-
posed change in the designated reserve ratio in 
accordance with subparagraph (A), the Board 
of Directors shall include in the published pro-
posal a thorough analysis of the data and pro-
jections on which the proposal is based.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENT.— 
Section 3(y) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(y)) is amended— 
(1) by striking ‘‘(y) The term’’ and inserting(y) 
Definitions Relating to Deposit Insurance Fund.— 
‘‘(1) DEPOSIT INSURANCE FUND.—The term’’; 
and
438 
(2) by inserting after paragraph (1) (as so des-
ignated by paragraph (1) of this subsection) the fol-
lowing new paragraph: 
‘‘(2) DESIGNATED RESERVE RATIO.—The term 
‘designated reserve ratio’ means the reserve ratio 
designated by the Board of Directors in accordance 
with section 7(b)(3).’’. 
(c) EFFECTIVE DATE.—This section and the amend-
ments made by this section shall take effect on the date 
that the final regulations required under section 
4009(a)(1) take effect. 
SEC. 4006. REQUIREMENTS APPLICABLE TO THE RISK- 
BASED ASSESSMENT SYSTEM. 
Section 7(b)(1) of the Federal Deposit Insurance Act 
(12 U.S.C. 1817(b)(1)) is amended by adding at the end 
the following new subparagraphs: 
‘‘(E) INFORMATION CONCERNING RISK OF 
LOSS AND ECONOMIC CONDITIONS.— 
‘‘(i) SOURCES OF INFORMATION.—For 
purposes of determining risk of losses at 
insured depository institutions and eco-
nomic conditions generally affecting depos-
itory institutions, the Corporation shall col-
lect information, as appropriate, from all 
sources the Board of Directors considers
439 
appropriate, such as reports of condition, 
inspection reports, and other information 
from all Federal banking agencies, any in-
formation available from State bank super-
visors, State insurance and securities regu-
lators, the Securities and Exchange Com-
mission (including information described in 
section 35), the Secretary of the Treasury, 
the Commodity Futures Trading Commis-
sion, the Farm Credit Administration, the 
Federal Trade Commission, any Federal 
reserve bank or Federal home loan bank, 
and other regulators of financial institu-
tions, and any information available from 
credit rating entities, and other private 
economic or business analysts. 
‘‘(ii) CONSULTATION WITH FEDERAL 
BANKING AGENCIES.— 
‘‘(I) IN
GENERAL.—Except as 
provided in subclause (II), in assess-
ing the risk of loss to the Deposit In-
surance Fund with respect to any in-
sured depository institution, the Cor-
poration shall consult with the appro-
440 
priate Federal banking agency of such 
institution. 
‘‘(II) TREATMENT
ON
AGGRE-
GATE BASIS.—In the case of insured 
depository institutions that are well 
capitalized (as defined in section 38) 
and, in the most recent examination, 
were found to be well managed, the 
consultation under subclause (I) con-
cerning the assessment of the risk of 
loss posed by such institutions may be 
made on an aggregate basis. 
‘‘(iii) RULE OF CONSTRUCTION.—No 
provision of this paragraph shall be con-
strued as providing any new authority for 
the Corporation to require submission of 
information by insured depository institu-
tions to the Corporation. 
‘‘(F) MODIFICATIONS TO THE RISK-BASED 
ASSESSMENT
SYSTEM
ALLOWED
ONLY
AFTER 
NOTICE AND COMMENT.—In revising or modi-
fying the risk-based assessment system at any 
time after the date of the enactment of the 
Federal Deposit Insurance Reform Act of 2005, 
the Board of Directors may implement such re-
441 
visions or modification in final form only after 
notice and opportunity for comment.’’. 
SEC. 4007. REFUNDS, DIVIDENDS, AND CREDITS FROM DE-
POSIT INSURANCE FUND. 
(a) IN GENERAL.—Subsection (e) of section 7 of the 
Federal Deposit Insurance Act (12 U.S.C. 1817(e)) is 
amended to read as follows: 
‘‘(e) REFUNDS, DIVIDENDS, AND CREDITS.— 
‘‘(1) REFUNDS
OF
OVERPAYMENTS.—In the 
case of any payment of an assessment by an insured 
depository institution in excess of the amount due to 
the Corporation, the Corporation may— 
‘‘(A) refund the amount of the excess pay-
ment to the insured depository institution; or 
‘‘(B) credit such excess amount toward the 
payment of subsequent assessments until such 
credit is exhausted. 
‘‘(2) DIVIDENDS
FROM
EXCESS
AMOUNTS
IN 
DEPOSIT INSURANCE FUND.— 
‘‘(A) RESERVE RATIO IN EXCESS OF 1.4 
PERCENT OF ESTIMATED INSURED DEPOSITS.— 
Whenever the reserve ratio of the Deposit In-
surance Fund exceeds 1.4 percent of estimated 
insured deposits, the Corporation shall declare 
the amount in the Fund in excess of the
442 
amount required to maintain the reserve ratio 
at 1.4 percent of estimated insured deposits, as 
dividends to be paid to insured depository insti-
tutions. 
‘‘(B) RESERVE RATIO EQUAL TO OR IN EX-
CESS OF 1.35 PERCENT OF ESTIMATED INSURED 
DEPOSITS
AND
NOT
MORE
THAN
1.4
PER-
CENT.—Whenever the reserve ratio of the De-
posit Insurance Fund equals or exceeds 1.35 
percent of estimated insured deposits and is not 
more than 1.4 percent of such deposits, the 
Corporation shall declare the amount in the 
Fund that is equal to 50 percent of the amount 
in excess of the amount required to maintain 
the reserve ratio at 1.35 percent of the esti-
mated insured deposits as dividends to be paid 
to insured depository institutions. 
‘‘(C) BASIS FOR DISTRIBUTION OF DIVI-
DENDS.— 
‘‘(i) IN GENERAL.—Solely for the pur-
poses of dividend distribution under this 
paragraph and credit distribution under 
paragraph (3)(B), the Corporation shall 
determine each insured depository institu-
tion’s relative contribution to the Deposit
443 
Insurance Fund (or any predecessor de-
posit insurance fund) for calculating such 
institution’s share of any dividend or credit 
declared under this paragraph or para-
graph (3)(B), taking into account the fac-
tors described in clause (ii). 
‘‘(ii) FACTORS FOR DISTRIBUTION.— 
In implementing this paragraph and para-
graph (3)(B) in accordance with regula-
tions, the Corporation shall take into ac-
count the following factors: 
‘‘(I) The ratio of the assessment 
base of an insured depository institu-
tion (including any predecessor) on 
December 31, 1996, to the assessment 
base of all eligible insured depository 
institutions on that date. 
‘‘(II) The total amount of assess-
ments paid on or after January 1, 
1997, by an insured depository insti-
tution (including any predecessor) to 
the Deposit Insurance Fund (and any 
predecessor deposit insurance fund). 
‘‘(III) That portion of assess-
ments paid by an insured depository
444 
institution (including any predecessor) 
that reflects higher levels of risk as-
sumed by such institution. 
‘‘(IV) Such other factors as the 
Corporation may determine to be ap-
propriate. 
‘‘(D) NOTICE
AND
OPPORTUNITY
FOR 
COMMENT.—The Corporation shall prescribe by 
regulation, after notice and opportunity for 
comment, the method for the calculation, dec-
laration, and payment of dividends under this 
paragraph. 
‘‘(3) CREDIT POOL.— 
‘‘(A) ONE-TIME CREDIT BASED ON TOTAL 
ASSESSMENT BASE AT YEAR-END 1996.— 
‘‘(i) IN GENERAL.—Before the end of 
the 270-day period beginning on the date 
of the enactment of the Federal Deposit 
Insurance Reform Act of 2005, the Board 
of Directors shall, by regulation, provide 
for a credit to each eligible insured deposi-
tory institution, based on the assessment 
base of the institution (including any pred-
ecessor institution) on December 31, 1996, 
as compared to the combined aggregate as-
445 
sessment base of all eligible insured deposi-
tory institutions, taking into account such 
factors as the Board of Directors may de-
termine to be appropriate. 
‘‘(ii) CREDIT LIMIT.—The aggregate 
amount of credits available under clause (i) 
to all eligible insured depository institu-
tions shall equal the amount that the Cor-
poration could collect if the Corporation 
imposed an assessment of 12 basis points 
on the combined assessment base of the 
Bank Insurance Fund and the Savings As-
sociation Insurance Fund as of December 
31, 2001. 
‘‘(iii) ELIGIBLE INSURED DEPOSITORY 
INSTITUTION DEFINED.—For purposes of 
this paragraph, the term ‘eligible insured 
depository institution’ means any insured 
depository institution that— 
‘‘(I) was in existence on Decem-
ber 31, 1996, and paid a deposit in-
surance assessment prior to that date; 
or
446 
‘‘(II) is a successor to any in-
sured depository institution described 
in subclause (I). 
‘‘(iv) APPLICATION OF CREDITS.— 
‘‘(I) IN GENERAL.—The amount 
of a credit to any eligible insured de-
pository institution under this para-
graph shall be applied by the Corpora-
tion, subject to subsection (b)(3)(E), 
to the assessments imposed on such 
institution under subsection (b) that 
become due for assessment periods be-
ginning after the effective date of reg-
ulations prescribed under clause (i). 
‘‘(II) REGULATIONS.—The regu-
lations prescribed under clause (i) 
shall establish the qualifications and 
procedures governing the application 
of assessment credits pursuant to sub-
clause (I). 
‘‘(v) LIMITATION
ON
AMOUNT
OF 
CREDIT FOR CERTAIN DEPOSITORY INSTI-
TUTIONS.—In the case of an insured de-
pository institution that exhibits financial, 
operational, 
or 
compliance 
weaknesses
447 
ranging from moderately severe to unsatis-
factory, or is not adequately capitalized (as 
defined in section 38) at the beginning of 
an assessment period, the amount of any 
credit 
allowed 
under 
this 
paragraph 
against the assessment on that depository 
institution for such period may not exceed 
the amount calculated by applying to that 
depository institution the average assess-
ment rate on all insured depository institu-
tions for such assessment period. 
‘‘(vi) PREDECESSOR
DEFINED.—For 
purposes of this paragraph, the term ‘pred-
ecessor’, when used with respect to any in-
sured depository institution, includes any 
other insured depository institution ac-
quired by or merged with such insured de-
pository institution. 
‘‘(B) ON-GOING CREDIT POOL.— 
‘‘(i) IN GENERAL.—In addition to the 
credit provided pursuant to subparagraph 
(A) and subject to the limitation contained 
in clause (v) of such subparagraph, the 
Corporation shall, by regulation, establish 
an on-going system of credits to be applied
448 
against future assessments under sub-
section (b)(1) on the same basis as the 
dividends 
provided 
under 
paragraph 
(2)(C). 
‘‘(ii) LIMITATION ON CREDITS UNDER 
CERTAIN
CIRCUMSTANCES.—No 
credits 
may be awarded by the Corporation under 
this subparagraph during any period in 
which— 
‘‘(I) the reserve ratio of the De-
posit Insurance Fund is less than the 
designated reserve ratio of such Fund; 
or 
‘‘(II) the reserve ratio of the 
Fund is less than 1.25 percent of the 
amount of estimated insured deposits. 
‘‘(iii) CRITERIA
FOR
DETERMINA-
TION.—In determining the amounts of any 
assessment credits under this subpara-
graph, the Board of Directors shall take 
into account the factors for designating the 
reserve ratio under subsection (b)(3) and 
the factors for setting assessments under 
subsection (b)(2)(B). 
‘‘(4) ADMINISTRATIVE REVIEW.—
449 
‘‘(A) IN GENERAL.—The regulations pre-
scribed under paragraph (2)(D) and subpara-
graphs (A) and (B) of paragraph (3) shall in-
clude provisions allowing an insured depository 
institution a reasonable opportunity to chal-
lenge administratively the amount of the credit 
or dividend determined under paragraph (2) or 
(3) for such institution. 
‘‘(B) ADMINISTRATIVE REVIEW.—Any re-
view under subparagraph (A) of any determina-
tion of the Corporation under paragraph (2) or 
(3) shall be final and not subject to judicial re-
view.’’. 
(b) DEFINITION OF RESERVE RATIO.—Section 3(y) 
of the Federal Deposit Insurance Act (12 U.S.C. 1813(y)) 
(as amended by section 4005(b) of this subtitle) is amend-
ed by adding at the end the following new paragraph: 
‘‘(3) RESERVE
RATIO.—The term ‘reserve 
ratio’, when used with regard to the Deposit Insur-
ance Fund other than in connection with a reference 
to the designated reserve ratio, means the ratio of 
the net worth of the Deposit Insurance Fund to the 
value of the aggregate estimated insured deposits.’’.
450 
SEC. 4008. DEPOSIT INSURANCE FUND RESTORATION 
PLANS. 
Section 7(b)(3) of the Federal Deposit Insurance Act 
(12 U.S.C. 1817(b)(3)) (as amended by section 4005(a) 
of this subtitle) is amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(E) DIF RESTORATION PLANS.— 
‘‘(i) IN GENERAL.—Whenever— 
‘‘(I) the Corporation projects 
that the reserve ratio of the Deposit 
Insurance Fund will, within 6 months 
of such determination, fall below the 
minimum amount specified in sub-
paragraph (B)(ii) for the designated 
reserve ratio; or 
‘‘(II) the reserve ratio of the De-
posit Insurance Fund actually falls 
below the minimum amount specified 
in subparagraph (B)(ii) for the des-
ignated reserve ratio without any de-
termination under subclause (I) hav-
ing been made, 
the Corporation shall establish and imple-
ment a Deposit Insurance Fund restora-
tion plan within 90 days that meets the re-
quirements of clause (ii) and such other
451 
conditions as the Corporation determines 
to be appropriate. 
‘‘(ii) REQUIREMENTS
OF
RESTORA-
TION
PLAN.—A Deposit Insurance Fund 
restoration plan meets the requirements of 
this clause if the plan provides that the re-
serve ratio of the Fund will meet or exceed 
the minimum amount specified in subpara-
graph (B)(ii) for the designated reserve 
ratio before the end of the 10-year period 
beginning upon the implementation of the 
plan. 
‘‘(iii) RESTRICTION
ON
ASSESSMENT 
CREDITS.—As part of any restoration plan 
under this subparagraph, the Corporation 
may elect to restrict the application of as-
sessment credits provided under subsection 
(e)(3) for any period that the plan is in ef-
fect. 
‘‘(iv) LIMITATION ON RESTRICTION.— 
Notwithstanding clause (iii), while any res-
toration plan under this subparagraph is in 
effect, the Corporation shall apply credits 
provided to an insured depository institu-
tion under subsection (e)(3) against any
452 
assessment imposed on the institution for 
any assessment period in an amount equal 
to the lesser of— 
‘‘(I) the amount of the assess-
ment; or 
‘‘(II) the amount equal to 3 basis 
points of the institution’s assessment 
base. 
‘‘(v) TRANSPARENCY.—Not more than 
30 days after the Corporation establishes 
and implements a restoration plan under 
clause (i), the Corporation shall publish in 
the Federal Register a detailed analysis of 
the factors considered and the basis for the 
actions taken with regard to the plan.’’. 
SEC. 4009. REGULATIONS REQUIRED. 
(a) IN GENERAL.—Not later than 270 days after the 
date of the enactment of this Act, the Board of Directors 
of the Federal Deposit Insurance Corporation shall pre-
scribe final regulations, after notice and opportunity for 
comment— 
(1) designating the reserve ratio for the Deposit 
Insurance Fund in accordance with section 7(b)(3) 
of the Federal Deposit Insurance Act (as amended 
by section 4005 of this subtitle);