I
105TH CONGRESS
2D SESSION
H. R. 4808
To amend the Federal Deposit Insurance Act to permit an affiliation between
a depository institution and the holding company successor to the Stu-
dent Loan Marketing Association under certain circumstances and sub-
ject to certain conditions.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 12, 1998
Mr. SNOWBARGER (for himself, Mr. KANJORSKI, and Mr. DAVIS of Virginia)
introduced the following bill; which was referred to the Committee on
Banking and Financial Services
A BILL
To amend the Federal Deposit Insurance Act to permit an
affiliation between a depository institution and the hold-
ing company successor to the Student Loan Marketing
Association under certain circumstances and subject to
certain conditions.
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 ‘‘Depository Institution-
GSE Affiliation Act of 1998’’.
SEC. 2. CERTAIN AFFILIATION PERMITTED.
Section 18(s) of the Federal Deposit Insurance Act
(12 U.S.C. 1828(s)) is amended—
(1) by redesignating paragraph (4) as para-
graph (5); and
(2) by inserting after paragraph (3) the follow-
ing new paragraph:
‘‘(4) STUDENT LOANS.—
‘‘(A) IN GENERAL.—This subsection shall
not apply to any arrangement between the
Holding Company (or any subsidiary of the
Holding Company other than the Student Loan
Marketing Association) and a depository insti-
tution, if the Secretary approves the affiliation
and determines that—
‘‘(i) the reorganization of such Asso-
ciation in accordance with section 440 of
the Higher Education Act of 1965, as
amended, will not be adversely affected by
the arrangement;
‘‘(ii) the dissolution of the Association
pursuant to such reorganization will occur
before the end of the 2-year period begin-
ning on the date on which such arrange-
ment is consummated or on such earlier
date as the Secretary deems appropriate:
Provided, That the Secretary may extend
this period for not more than 1 year at a
time if the Secretary determines that such
extension is in the public interest and is
appropriate to achieve an orderly reorga-
nization of the Association or to prevent
market disruptions in connection with such
reorganization, but no such extensions
shall in the aggregate exceed 2 years;
‘‘(iii) the Association will not purchase
or extend credit to, or guarantee or provide
credit enhancement to, any obligation of
the depository institution;
‘‘(iv) the operations of the Association
will be separate from the operations of the
depository institution; and
‘‘(v) until the ‘dissolution date’ (as
that term is defined in section 440 of the
Higher Education Act of 1965, as amend-
ed) has occurred, such depository institu-
tion will not use the trade name or service
mark ‘Sallie Mae’ in connection with any
product or service it offers if the appro-
priate Federal banking agency for such de-
pository institution determines that—
‘‘(i) the value of such portfolio on the
date of the enactment of this subsection; or
‘‘(ii) the value of such portfolio on the
date 
such 
an 
arrangement 
is 
con-
summated. The term ‘investment portfolio’
shall mean all investments shown on the
consolidated balance sheet of the Associa-
tion other than—
‘‘(I) any instrument or assets de-
scribed in section 439(d) of the High-
er Education Act of 1965, as amend-
ed;
‘‘(II) any direct noncallable obli-
gations of the United States or any
agency thereof for which the full faith
and credit of the United States is
pledged; or
‘‘(III) cash or cash equivalents.
‘‘(D) ENFORCEMENT.—The terms and
conditions imposed under subparagraph (B)
may be enforced by the Secretary in accordance
with section 440 of the Higher Education Act
of 1965.
‘‘(E) DEFINITIONS.—For purposes of this
paragraph, 
the 
following 
definition 
shall
apply—
‘‘(i) ASSOCIATION; 
HOLDING
COM-
PANY.—Notwithstanding any provision in
section 3, the terms ‘Association’ and
‘Holding Company’ have the same mean-
ings as in section 440(i) of the Higher
Education Act of 1965.
‘‘(ii) SECRETARY.—The term ‘Sec-
retary’ means the Secretary of the Treas-
ury.’’.
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