H.R. 2056 (112th): To instruct the Inspector General of the Federal Deposit Insurance Corporation to study the impact of insured depository institution failures, and for other purposes.

Introduced:
May 31, 2011 (112th Congress, 2011–2013)
Sponsor:
Rep. Lynn Westmoreland [R-GA3]
Status:
Signed by the President
Slip Law:
This bill became Pub.L. 112-88.

The bill’s title was written by the bill’s sponsor. H.R. stands for House of Representatives bill.

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Status

This bill was enacted after being signed by the President on January 3, 2012.

Progress
Introduced May 31, 2011
Referred to Committee May 31, 2011
Reported by Committee Jul 20, 2011
Passed House Jul 28, 2011
Passed Senate with Changes Nov 17, 2011
Passed Senate Dec 20, 2011
Signed by the President Jan 03, 2012
Cosponsors
13 cosponsors (9R, 4D) (show)
Committees

House Financial Services

Senate Banking, Housing, and Urban Affairs

The committee chair determines whether a bill will move past the committee stage.

Summary

No summaries available.

Text

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Last updated Jan 01, 2012.
4 pages

Primary Source

View on THOMAS (The Library of Congress)

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GovTrack’s Bill Summary

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Library of Congress Summary

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.

1/3/2012--Public Law.
Section 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.
Section 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.
Section 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 "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.

House Republican Conference Summary

The summary below was written by the House Republican Conference, which is the caucus of Republicans in the House of Representatives.

This summary can be found at http://www.gop.gov/bill/112/1/hr2056.

Summary

H.R. 2056 would require the Inspector General of the Federal Deposit Insurance Corporation (FDIC) to study the impact of the failure of insured depository institutions.  Specifically, H.R. 2056 would require 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 and 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. 

The bill would require the FDIC make available from the portion of the FDIC budget allocated to management expenses, sums allowing the FDIC Inspector General to complete this study.

Cost

At press time, the Congressional Budget Office has not produced a score for H.R. 2560.

House Democratic Caucus Summary

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So, yes, we display the House Republican Conference’s summaries when available even if we do not have a Democratic summary available. That’s because we feel it is better to give you as much information as possible, even if we cannot provide every viewpoint.

We’ll be looking for a source of summaries from the other side in the meanwhile.

The bill contains the following citations to other parts of U.S. law:

United States Code

The United States Code is the compilation of permanent laws enacted by Congress. Temporary and other non-permanent laws do not appear in the United States Code. (About half of the United States Code is the law itself, called positive law. The other half is merely a compilation of the laws but has no legal significance.)