I
104TH CONGRESS
1ST SESSION
H. R. 1470
To provide for sufficient funding to cover the costs of the Financing Corpora-
tion, to provide funds to carry out the purposes of the Savings Associa-
tion Insurance Fund, 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 provide for sufficient funding to cover the costs of the
Financing Corporation, to provide funds to carry out
the purposes of the Savings Association Insurance Fund,
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 ‘‘Financing Corporation
and Savings Association Insurance Fund Reform Act of
1995’’.
SEC. 2. PAYMENT OF INTEREST EARNED ON RTC FUNDS TO
FICO.
(a) IN GENERAL.—Subsection (i) of section 21A of
the Federal Home Loan Bank Act (12 U.S.C. 1441a(i))
is amended by adding at the end the following new para-
graph:
‘‘(7) TRUST
FUND
FOR
UNEXPENDED
RTC
FUNDING.—
‘‘(A) IN GENERAL.—The Secretary of the
Treasury shall transfer that portion of the
amounts appropriated under paragraph (3)
which are available to the Corporation but have
not been paid to the Corporation to the Federal
Deposit Insurance Corporation for deposit in a
trust fund to be managed by the Federal De-
posit Insurance Corporation.
‘‘(B) INVESTMENT.—The Board of Direc-
tors of the Federal Deposit Insurance Corpora-
tion shall invest such portion of the trust fund
established under subparagraph (A) as, in the
judgment of the Board of Directors, is not re-
quired to meet the short-term requirements of
the Resolution Trust Corporation or the Sav-
ings Association Insurance Fund.
‘‘(C) INTEREST.—Interest earned on in-
vestments of the trust fund shall be paid to the
Financing Corporation to meet interest pay-
ments, issuance costs, and custodial fees on ob-
ligations issued by the Financing Corporation.
‘‘(D) AVAILABILITY OF TRUST FUND PRIN-
CIPAL AS BACKSTOP FOR SAIF.—The balance in
the trust fund shall be available to the Federal
Deposit Insurance Corporation to cover losses
incurred, or reasonably anticipated to be in-
curred, by the Savings Association Insurance
Fund until the reserve ration of the Savings As-
sociation Insurance Fund first meets or exceeds
the applicable designated reserve ratio.
‘‘(E) RETURN OF UNEXPENDED PRINCIPAL
TO TREASURY.—After the maturity and full re-
payment of all obligations issued by the Financ-
ing Corporation under section 21, any remain-
ing balance in the trust fund shall be returned
to the general fund of the Treasury and the
trust fund shall be abolished.’’.
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 21A(i)(5) of the Federal Home
Loan Bank Act (12 U.S.C. 1441a(i)(5)) is
amended—
(A) by striking ‘‘or to meet the require-
ments of section 11(a)(6)(F) of the Federal De-
posit Insurance Act’’; and
(B) by striking ‘‘general fund of the Treas-
ury’’ and inserting ‘‘trust fund established pur-
suant to paragraph (7)(A)’’.
(2) Section 11(a)(6) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(a)(6)) is amended by
striking subparagraph (F).
(3) Section 11(a)(6)(K) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(a)(6)(K)) is amend-
ed by striking ‘‘or (F)’’.
SEC. 3. CLARIFICATION OF EXISTING LAW.
(a) CONGRESSIONAL DECLARATION.—The Congress
declares as follows:
(1) The Financing Corporation was established
pursuant to the amendments made by title III of the
Competitive Equality Banking Act of 1987 for the
sole purpose of providing additional funding to the
Federal Savings and Loan Insurance Corporation to
meet the deposit insurance obligations of the Cor-
poration with respect to savings associations.
(2) The interest payments, issuance costs, and
custodial fees on obligations issued by the Financing
Corporation are paid, pursuant to section 21 of the
pose a special assessment on each Savings As-
sociation Insurance Fund member in an
amount not greater than 0.40 percent of the as-
sessment 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.’’.
SEC. 5. REPEAL OF MINIMUM SAIF ASSESSMENT RULE.
Section 7(b)(2) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(b)(2)) is amended by striking subpara-
graph (E).
SEC. 6. LIMIT ON DIFFERENTIAL BETWEEN ASSESSMENT
RATES IMPOSED ON FORMER BIF MEMBERS
AND FORMER SAIF MEMBERS.
Section 7(b)(2) of the Federal Deposit Insurance Act
(12 U.S.C. 1817(b)(2)) is amended by inserting after
paragraph (G) the following new subparagraph:
‘‘(H) CAP
ON
DIFFERENTIAL
BETWEEN
FORMER BIF AND SAIF MEMBERS.—The aver-
age assessment rate under the risk-based as-
sessment system for insured depository institu-
tions which, as of December 31, 1994, were
Savings Association Insurance Fund members,
including the special assessment under para-
graph (9), shall not exceed the average assess-
ment rate under the risk-based assessment sys-
tem for insured depository institutions which,
as of December 31, 1994, were Bank Insurance
Fund members by more than 9 basis points.’’.
Æ