To instruct the Inspector General of the Federal Deposit Insurance Corporation to study the impact of insured depository institution failures, and for other purposes.

Bill: 112-hr-2056
Sponsor: Rep. Westmoreland, Lynn A. [R-GA-3]
Introduced: 2011-05-31 in the House
Policy area: Finance and Financial Sector
Subjects: Accounting and auditing
Administrative law and regulatory procedures
Bank accounts, deposits, capital
Banking and financial institutions regulation
Bankruptcy
Congressional oversight
Consumer credit
Credit and credit markets
Federal Deposit Insurance Corporation (FDIC)
Financial services and investments
Government studies and investigations
Real estate business

Summary:
action_date: 2011-05-31
text: 
Instructs the Inspector General of the Federal Deposit Insurance Corporation (FDIC) to study the impact of the failure of insured depository institutions.
 
Requires the study to detail: (1) the impact of loss-sharing agreements (LSAs) on the insured depository institutions that survive and the borrowers of insured depository institutions that fail; (2) the effect of FDIC policies and procedures regarding maturing LSAs; (3) the methods of ensuring the orderly end of expiring LSAs to prevent any adverse impact on borrowing, the real estate industry, and the Depositors Insurance Fund; (4) the significance of certain paper losses; (5) the success of FDIC field examiners in implementing specified FDIC guidelines regarding workouts of commercial real estate loans; (6) the application and impact of consent orders and cease and desist orders; (7) the application and impact of FDIC policies; and (8) the FDIC's handling of potential investment from private equity companies in insured depository institutions.

action_date: 2011-07-26
text: 
(Sec. 1) Directs the Inspector General (IG) of the Federal Deposit Insurance Corporation (FDIC) to study the impact of the failure of insured depository institutions.
 
Prescribes study details, including: (1) the impact of loss-sharing agreements (LSAs) upon the insured depository institutions that survive and the borrowers of those insured depository institutions that fail; (2) FDIC policies and procedures for monitoring LSAs, including those designed to ensure that institutions are not imprudently selling assets at a depressed value; (3) FDIC policies and procedures for terminating LSAs and mitigating the risk of acquiring institutions having substantial assets remaining in their portfolio when the LSAs are due to expire; (4) methods of ensuring the orderly end of expiring LSAs to prevent adverse impacts upon either borrowing, the real estate industry, or the Depositors Insurance Fund; (5) the significance of paper assets; (6) the number of insured depository institutions placed into either receivership or conservatorship due to asset write-downs; and (7) the policies and procedures for evaluating the adequacy of an insured depository institution's allowance for loan and lease losses.
 
 Requires the study also tocover: (1) examiners' policies and procedures for evaluating appraised values of property securing real estate loans, (2) examiners' implementation of specified FDIC guidelines, (3) factors examiners use to assess the adequacy of capital at insured depository institutions, (4) the factors used by the FDIC in evaluating applications of private capital investors to acquire insured depository institutions in receivership, and (5) the extent to which policies and procedures associated with the evaluation of potential private investments in insured depository institutions are followed.
 
Requires such study also to address: (1) the success of FDIC field examiners in implementing specified FDIC guidelines governing workouts of commercial real estate loans, (2) the application and impact of consent orders and cease and desist orders, (3) the application and impact of FDIC policies, and (4) the FDIC's handling of potential investment from private equity companies in insured depository institutions.
 
Requires the Inspectors General of the U.S. Treasury and of the Federal Reserve System to provide any material requested by the IG order to implement this Act.
 
(Sec. 3) Directs the Comptroller General (GAO) to study: (1) the causes of bank failures in states with 10 or more failures since 2008; (2) the procyclical impact of fair value accounting standards; (3) the causes and potential solutions for the &quot;vicious cycle&quot; of loan write downs, raising capital, and failures; (4) the impact of bank failures upon the community; and (5) the feasibility and overall impact of LSAs.

action_date: 2011-07-28
text: 

(This measure has not been amended since it was reported to the House on July 26, 2011. The summary of that version is repeated here.)

 
(Sec. 1) Directs the Inspector General (IG) of the Federal Deposit Insurance Corporation (FDIC) to study the impact of the failure of insured depository institutions.
 
Prescribes study details, including: (1) the impact of loss-sharing agreements (LSAs) upon the insured depository institutions that survive and the borrowers of those insured depository institutions that fail; (2) FDIC policies and procedures for monitoring LSAs, including those designed to ensure that institutions are not imprudently selling assets at a depressed value; (3) FDIC policies and procedures for terminating LSAs and mitigating the risk of acquiring institutions having substantial assets remaining in their portfolio when the LSAs are due to expire; (4) methods of ensuring the orderly end of expiring LSAs to prevent adverse impacts upon either borrowing, the real estate industry, or the Depositors Insurance Fund; (5) the significance of paper assets; (6) the number of insured depository institutions placed into either receivership or conservatorship due to asset write-downs; and (7) the policies and procedures for evaluating the adequacy of an insured depository institution's allowance for loan and lease losses.
 
 Requires the study also to cover: (1) examiners' policies and procedures for evaluating appraised values of property securing real estate loans, (2) examiners' implementation of specified FDIC guidelines, (3) factors examiners use to assess the adequacy of capital at insured depository institutions, (4) the factors used by the FDIC in evaluating applications of private capital investors to acquire insured depository institutions in receivership, and (5) the extent to which policies and procedures associated with the evaluation of potential private investments in insured depository institutions are followed.
 
Requires such study also to address: (1) the success of FDIC field examiners in implementing specified FDIC guidelines governing workouts of commercial real estate loans, (2) the application and impact of consent orders and cease and desist orders, (3) the application and impact of FDIC policies, and (4) the FDIC's handling of potential investment from private equity companies in insured depository institutions.
 
Requires the Inspectors General of the U.S. Treasury and of the Federal Reserve System to provide any material requested by the IG order to implement this Act.
 
(Sec. 3) Directs the Comptroller General (GAO) to study: (1) the causes of bank failures in states with 10 or more failures since 2008; (2) the procyclical impact of fair value accounting standards; (3) the causes and potential solutions for the &quot;vicious cycle&quot; of loan write downs, raising capital, and failures; (4) the impact of bank failures upon the community; and (5) the feasibility and overall impact of LSAs.

action_date: 2011-11-17
text: 
(Sec. 1) Directs the Inspector General (IG) of the Federal Deposit Insurance Corporation (FDIC) to study the impact of the failure of insured depository institutions. 
 
Prescribes study details, including: (1) the impact of loss-sharing agreements (LSAs) upon the insured depository institutions that survive and the borrowers of those insured depository institutions that fail; (2) FDIC policies and procedures for monitoring LSAs, including those designed to ensure that institutions are not imprudently selling assets at a depressed value; (3) FDIC policies and procedures for terminating LSAs and mitigating the risk of acquiring institutions having substantial assets remaining in their portfolio when the LSAs are due to expire; (4) methods of ensuring the orderly end of expiring LSAs to prevent adverse impacts upon either borrowing, the real estate industry, or the Depositors Insurance Fund; and (5) the significance of losses.
 
 Specifies as factors in the significance of losses: (1) the number of insured depository institutions placed into receivership or conservatorship due to significant losses arising from loans for which payments of principal, interest, and fees were current; (2) the impact of such losses on the ability of insured depository institutions to raise additional capital; (3) the effect of changes in the application of fair value accounting standards on insured depository institutions, specifically the degree to which fair value accounting standards have led to regulatory action against banks; (4) whether field examiners are using appropriate appraisal procedures for losses arising from loans for which all payments were current; and (5) whether the application of appraisals leads to immediate write downs on the value of the underlying asset.
 
Requires the study also to cover: (1) examiners' policies and procedures for evaluating appraised values of property securing real estate loans, (2) examiners' implementation of specified FDIC guidelines, (3) factors examiners use to assess the adequacy of capital at insured depository institutions, (4) the factors used by the FDIC in evaluating applications of private capital investors to acquire insured depository institutions in receivership, and (5) the extent to which policies and procedures associated with the evaluation of potential private investments in insured depository institutions are followed.
 
Requires the study also to address: (1) the success of FDIC field examiners in implementing specified FDIC guidelines governing workouts of commercial real estate loans, (2) the application and impact of consent orders and cease and desist orders, (3) the application and impact of FDIC policies, and (4) the FDIC's handling of potential investment from private equity companies in insured depository institutions.
 
Requires the Inspectors General of the U.S. Treasury and of the Federal Reserve System to provide any material requested by the IG order to implement this Act.
 
(Sec. 2) Directs the IG and the Comptroller General to appear before certain congressional committees to discuss the outcomes and impact of federal regulations upon bank examinations and failures.
 
(Sec. 3) Directs the Comptroller General (GAO) to study: (1) the causes of bank failures in states with 10 or more failures since 2008; (2) the procyclical impact of fair value accounting standards; (3) the causes and potential solutions for the "vicious cycle" of loan write downs, raising capital, and failures; (4) the impact of bank failures upon the community; and (5) the feasibility and overall impact of LSAs.

action_date: 2012-01-03
text: 
(Sec. 1) Directs the Inspector General (IG) of the Federal Deposit Insurance Corporation (FDIC) to study the impact of the failure of insured depository institutions.
 
Prescribes study details, including: (1) the impact of loss-sharing agreements (LSAs) upon the insured depository institutions that survive and the borrowers of those insured depository institutions that fail; (2) FDIC policies and procedures for monitoring LSAs, including those designed to ensure that institutions are not imprudently selling assets at a depressed value; (3) FDIC policies and procedures for terminating LSAs and mitigating the risk of acquiring institutions having substantial assets remaining in their portfolio when the LSAs are due to expire; (4) methods of ensuring the orderly end of expiring LSAs to prevent adverse impacts upon either borrowing, the real estate industry, or the Depositors Insurance Fund; (5) the significance of losses; and (6) the number of insured depository institutions placed into either receivership or conservatorship due to significant losses arising from loans for which all payments of principal, interest, and fees (payments) were current, under the contract.
 
Requires the study to examine: (1) the impact of significant losses arising from loans for which all payments were current on the ability of insured depository institutions to raise additional capital; (2) the degree to which fair value accounting rules and other accounting standards have led to regulatory action against banks; and (3) whether field examiners use appropriate appraisal procedures with respect to losses arising from loans for which all payments were current and whether the application of appraisals leads to immediate write downs on the value of the underlying asset.
 
Requires the study also to cover: (1) the policies and procedures for evaluating the adequacy of an insured depository institution's allowance for loan and lease losses, (2) examiners' policies and procedures for evaluating appraised values of property securing real estate loans, (3) examiners' implementation of specified FDIC guidelines, (4) factors examiners use to assess the adequacy of capital at insured depository institutions, (5) the factors used by the FDIC in evaluating applications of private capital investors to acquire insured depository institutions in receivership, and (6) the extent to which policies and procedures associated with the evaluation of potential private investments in insured depository institutions are followed.
 
Requires such study also to address: (1) the success of FDIC field examiners in implementing specified FDIC guidelines governing workouts of commercial real estate loans, (2) the application and impact of consent orders and cease and desist orders, (3) the application and impact of FDIC policies, and (4) the FDIC's handling of potential investment from private equity companies in insured depository institutions.
 
Requires the Inspectors General of the U.S. Treasury and of the Federal Reserve System to provide any material requested by the IG order to implement this Act.
 
(Sec. 2) Directs the FDIC IG and the Comptroller General (GAO) to appear before certain congressional committees within 150 days after publication of the study required by this Act to discuss the outcomes and impact of federal regulations on bank examinations and failures.
 
(Sec. 3) Directs the GAO to study: (1) the causes of bank failures in states with 10 or more failures since 2008; (2) the procyclical impact of fair value accounting standards; (3) the causes and potential solutions for the &quot;vicious cycle&quot; of loan write downs, raising capital, and failures; (4) the impact of bank failures upon the community; and (5) the feasibility and overall impact of LSAs.


Legislative actions:
action_date: 2012-01-03
text: Became Public Law No: 112-88.
action_date: 2012-01-03
text: Became Public Law No: 112-88.
action_date: 2012-01-03
text: Signed by President.
action_date: 2012-01-03
text: Signed by President.
action_date: 2011-12-23
text: Presented to President.
action_date: 2011-12-23
text: Presented to President.
action_date: 2011-12-20
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2011-12-20
text: On motion that the House suspend the rules and agree to the Senate amendments Agreed to by voice vote. (text as House agreed to Senate amendments: CR 12/19/2011 H9933-9934)
action_date: 2011-12-20
text: Resolving differences -- House actions: On motion that the House suspend the rules and agree to the Senate amendments Agreed to by voice vote.(text as House agreed to Senate amendments: CR 12/19/2011 H9933-9934)
action_date: 2011-12-20
text: Considered as unfinished business. (consideration: CR H9999)
action_date: 2011-12-19
text: At the conclusion of debate, the chair put the question on the motion to suspend the rules. Mr. Westmoreland objected to the vote on the grounds that a quorum was not present. Further proceedings on the motion were postponed. The point of no quorum was withdrawn.
action_date: 2011-12-19
text: DEBATE - The House proceeded with forty minutes of debate on agreeing to the Senate amendments to H.R. 2056.
action_date: 2011-12-19
text: Mr. Westmoreland moved that the House suspend the rules and agree to the Senate amendments. (consideration: CR H9933-9936)
action_date: 2011-11-18
text: Message on Senate action sent to the House.
action_date: 2011-11-17
text: Passed Senate with amendments by Unanimous Consent. (text: CR S7777)
action_date: 2011-11-17
text: Passed/agreed to in Senate: Passed Senate with amendments by Unanimous Consent.(text: CR S7777)
action_date: 2011-11-17
text: Measure laid before Senate by unanimous consent. (consideration: CR S7777)
action_date: 2011-11-17
text: Senate Committee on Banking, Housing, and Urban Affairs discharged by Unanimous Consent.
action_date: 2011-11-17
text: Senate Committee on Banking, Housing, and Urban Affairs discharged by Unanimous Consent.
action_date: 2011-07-29
text: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
action_date: 2011-07-28
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2011-07-28
text: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR 7/26/2011 H5541-5542)
action_date: 2011-07-28
text: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.(text: CR 7/26/2011 H5541-5542)
action_date: 2011-07-28
text: Considered as unfinished business. (consideration: CR H5729)
action_date: 2011-07-26
text: At the conclusion of debate, the chair put the question on the motion to suspend the rules. Mr. Westmoreland objected to the vote on the grounds that a quorum was not present. Further proceedings on the motion were postponed. The point of no quorum was withdrawn.
action_date: 2011-07-26
text: DEBATE - The House proceeded with forty minutes of debate on H.R. 2056.
action_date: 2011-07-26
text: Mr. Westmoreland moved to suspend the rules and pass the bill, as amended.
action_date: 2011-07-26
text: Considered under suspension of the rules. (consideration: CR H5541-5543)
action_date: 2011-07-26
text: Placed on the Union Calendar, Calendar No. 120.
action_date: 2011-07-26
text: Reported (Amended) by the Committee on Financial Services. H. Rept. 112-182.
action_date: 2011-07-26
text: Reported (Amended) by the Committee on Financial Services. H. Rept. 112-182.
action_date: 2011-07-20
text: Subcommittee on Financial Institutions and Consumer Credit Discharged.
action_date: 2011-07-20
text: Ordered to be Reported (Amended) by Voice Vote.
action_date: 2011-07-20
text: Committee Consideration and Mark-up Session Held.
action_date: 2011-07-19
text: Referred to the Subcommittee on Financial Institutions and Consumer Credit.
action_date: 2011-07-08
text: Hearings Held by the Subcommittee on Financial Institutions and Consumer Credit Prior to Referral.
action_date: 2011-05-31
text: Referred to the House Committee on Financial Services.
action_date: 2011-05-31
text: Introduced in House
action_date: 2011-05-31
text: Introduced in House

Enacted as: number: 112-88