H.R. 2123 (104th): Savings Association Insurance Fund Capitalization Act of 1995

104th Congress, 1995–1996. Text as of Jul 27, 1995 (Introduced).

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HR 2123 IH

104th CONGRESS

1st Session

H. R. 2123

To accelerate capitalization of the Savings Association Insurance Fund, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

July 27, 1995

Mr. FLAKE introduced the following bill; which was referred to the Committee on Banking and Financial Services


A BILL

To accelerate capitalization of the Savings Association Insurance Fund, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Savings Association Insurance Fund Capitalization Act of 1995’.

    (b) TABLE OF CONTENTS- The table of contents for this Act is as follows:

      Sec. 1. Short title; table of contents.

      Sec. 2. Purposes.

      Sec. 3. Special assessment; access to loss funds.

      Sec. 4. Payment of FICO carrying costs from interest earned on deposit insurance funds.

      Sec. 5. Proportional sharing of Financing Corporation assessments to cover interest shortfall.

      Sec. 6. Rebate of amounts in any deposit insurance fund in excess of the fund’s designated reserve.

      Sec. 7. Merger of deposit insurance funds 12 months after recapitalization of SAIF.

      Sec. 8. Study by banking agencies on conversions to a unified charter.

SEC. 2. PURPOSES.

    The purposes of this Act are as follows:

      (1) To accelerate capitalization of the Savings Association Insurance Fund.

      (2) To provide that interest earned on deposit insurance funds shall be available to cover the remaining debt servicing costs of the Financing Corporation.

      (3) To distribute among all insured depository institutions any shortfall which exists after the applying the interest earned on the deposit insurance funds to the remaining debt servicing costs of the Financing Corporation.

      (4) To provide for refunds of amounts in the deposit insurance funds in excess of the designated reserve ratio.

      (5) To merge the Bank Insurance Fund and the Savings Association Insurance Fund 12 months after the date on which the Savings Association Insurance Fund becomes fully capitalized.

      (6) To require a study of the feasibility of merging bank and thrift charters and recommendations and proposals for achieving such merger.

SEC. 3. SPECIAL ASSESSMENT; ACCESS TO LOSS FUNDS.

    (a) SPECIAL ASSESSMENT- Section 7(b)(6) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(6)) is amended--

      (1) by redesignating clauses (i), (ii), and (iii) of subparagraph (A) as subclauses (I), (II), and (III), respectively;

      (2) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;

      (3) by moving the left margin of such clauses and subclauses (as so redesignated) 2 ems to the right;

      (4) by striking ‘SPECIAL ASSESSMENTS- In addition to’ and inserting ‘SPECIAL ASSESSMENTS-

        ‘(A) IN GENERAL- In addition to’; and

      (5) by adding at the end the following new subparagraph:

        ‘(B) SINGLE ADDITIONAL SPECIAL ASSESSMENT WITH RESPECT TO CERTAIN ACCOUNTS-

          ‘(i) IN GENERAL- Before the end of the 120-day period beginning on the date of the enactment of the Savings Association Insurance Fund Capitalization Act of 1995, the Corporation shall impose a single special assessment on--

            ‘(I) each Savings Association Insurance Fund member (including any Savings Association Insurance Fund member referred to in section 5(d)(2)(G)); and

            ‘(II) each Bank Insurance Fund member which has deposits which are treated, under section 5(d)(3), as deposits which are insured by the Savings Association Insurance Fund,

          in an amount equal to such percentage of the assessment base on which assessments are imposed under the risk-based assessment system established pursuant to paragraph (1) (or, in the case of an institution described in subclause (II), the adjusted attributable deposit amount determined under subparagraph (C) of section 5(d)(3) for purposes of subparagraph (B)(i) of such section) as of December 31, 1994, as may be necessary in order for the reserve ratio of the Savings Association Insurance Fund to meet or exceed the designated reserve ratio.

          ‘(ii) DEPOSIT OF ASSESSMENT- The proceeds of any assessment imposed under clause (i) shall be deposited in the Savings Association Insurance Fund.’.

    (b) MODIFICATIONS OF CONDITIONS FOR SAIF ACCESS TO RTC LOSS FUNDS- Section 11(a)(6)(F) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(6)(F)) is amended--

      (1) in that portion of such section which appears before clause (i), by striking ‘2-year period’ and inserting ‘before the merger of the Bank Insurance Fund and the Savings Association Insurance Fund pursuant to section 7 of the Savings Association Insurance Fund Capitalization Act of 1995’;

      (2) by striking clauses (ii) and (iii); and

      (3) by redesignating clauses (iv) through (viii) as clauses (ii) through (vi), respectively.

SEC. 4. PAYMENT OF FICO CARRYING COSTS FROM INTEREST EARNED ON DEPOSIT INSURANCE FUNDS.

    (a) IN GENERAL- Section 11(a) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is amended by adding at the end the following new paragraph:

      ‘(9) AVAILABILITY OF INTEREST FOR FICO CARRYING COSTS-

        ‘(A) IN GENERAL- Interest earned on the balance in any deposit insurance fund maintained by the Corporation (other than the FSLIC Resolution Fund) shall be available for transfer to the Financing Corporation for purposes of section 21(f)(1) of the Federal Home Loan Bank Act.

        ‘(B) AMOUNT OF INTEREST PROPORTIONAL TO AMOUNT OF INSURED DEPOSITS- The amount of interest paid to the Financing Corporation from any insurance fund pursuant to subparagraph (A) shall bear the same proportion to the total amount of interest paid pursuant to such subparagraph as the amount of deposits insured by such insurance fund bears to the total amount of insured deposits, as determined by the Corporation on the basis of the most recent certified statements submitted to the Corporation pursuant to section 7(c)(1) and such other information as the Corporation may consider appropriate.

        ‘(C) PAYMENT BY CORPORATION- Upon receiving notice from the Financing Corporation of the amount needed for purposes of section 21(f) of the Federal Home Loan Bank Act, the Corporation shall pay such amount from the interest earned on the balances in the deposit insurance funds in accordance with subparagraph (B), to the extent available.’.

    (b) CONFORMING AMENDMENT TO FEDERAL HOME LOAN BANK ACT- Section 21(f)(1) of the Federal Home Loan Bank Act (12 U.S.C. 1441(f)(1)) is amended to read as follows:

      ‘(1) INTEREST EARNED ON INSURED DEPOSIT FUNDS- The interest earned on the balance in any deposit insurance fund maintained by the Federal Deposit Insurance Corporation (other than the FSLIC Resolution Fund) as provided in section 11(a)(9) of the Federal Deposit Insurance Act.’.

SEC. 5. PROPORTIONAL SHARING OF FINANCING CORPORATION ASSESSMENTS TO COVER INTEREST SHORTFALL.

    (a) IN GENERAL- Section 21(f)(2) of the Federal Home Loan Bank Act (12 U.S.C. 1441(f)(2)) is amended to read as follows:

      ‘(2) ASSESSMENT AUTHORITY-

        ‘(A) IN GENERAL- If the amount of interest earned on the balance in any deposit insurance fund referred to in paragraph (1) is less than such insurance fund’s proportional share of the amount of interest payments, issuance costs, and custodial fees under section 11(a)(9)(B) of the Federal Deposit Insurance Act, the Financing Corporation, with the approval of the Board of Directors of the Federal Deposit Insurance Corporation, shall assess against each member of such fund an assessment (in the same manner as assessments are assessed against such members by the Federal Deposit Insurance Corporation under section 7 of the Federal Deposit Insurance Act).

        ‘(B) MAXIMUM AMOUNT OF ASSESSMENT- No assessment under subparagraph (A) with respect to members of a deposit insurance fund maintained by the Federal Deposit Insurance Corporation may exceed the amount authorized to be assessed against members of such fund pursuant to section 7 of the Federal Deposit Insurance Act.

        ‘(C) PRIORITY- The Financing Corporation shall have first priority to make the assessment authorized under subparagraph (A).’.

    (b) TECHNICAL AND CONFORMING AMENDMENT TO THE FEDERAL DEPOSIT INSURANCE ACT- Section 7(b)(2)(D) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(D)) is amended by striking ‘Savings Association Insurance Fund members’ and inserting ‘members of a deposit insurance fund’.

    (c) TECHNICAL AND CONFORMING AMENDMENT TO THE FEDERAL HOME LOAN BANK ACT- Section 21(k) of the Federal Home Loan Bank Act (12 U.S.C. 1441(k)) is amended--

      (1) by striking paragraph (1); and

      (2) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively.

SEC. 6. REBATE OF AMOUNTS IN ANY DEPOSIT INSURANCE FUND IN EXCESS OF THE FUND’S DESIGNATED RESERVE.

    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-

      ‘(1) 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 payment to the insured depository institution; or

        ‘(B) credit such excess amount toward the payment of subsequent semiannual assessments until such credit is exhausted.

      ‘(2) BALANCE IN INSURANCE FUND IN EXCESS OF DESIGNATED RESERVE- The amount by which the actual reserves in any insurance fund exceed the balance required to meet the designated reserve applicable with respect to such fund shall be refunded to members of the fund by the Corporation on such basis as the Board of Directors determines to be appropriate, taking into account the factors considered under the risk-based assessment system.’.

SEC. 7. MERGER OF DEPOSIT INSURANCE FUNDS 12 MONTHS AFTER RECAPITALIZATION OF SAIF.

    (a) IN GENERAL- Effective at the end of the 12-month period beginning on the date on which the Savings Association Insurance Fund first achieves the designated reserve ratio applicable with respect to such fund under section 7(b) of the Federal Deposit Insurance Act, the Federal Deposit Insurance Corporation shall--

      (1) merge the Bank Insurance Fund and the Savings Association Insurance Fund into 1 deposit insurance fund; and

      (2) publish a notice of such merger in the Federal Register at the time such merger becomes effective.

    (b) TECHNICAL AND CONFORMING AMENDMENTS-

      (1) Section 11(a)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(5)) is amended to read as follows:

      ‘(5) DEPOSIT INSURANCE FUND-

        ‘(A) ESTABLISHMENT- There is established a fund to be known as the deposit insurance fund which shall--

          ‘(i) be maintained and administered by the Corporation; and

          ‘(ii) initially consist of the assets and liabilities of the Bank Insurance Fund and Savings Association Insurance Fund which have been merged by the Corporation into the deposit insurance fund pursuant to section 7(a) of the Savings Association Insurance Fund Capitalization Act of 1995.

        ‘(B) USES- The deposit insurance fund shall be available to the Corporation for use with respect to insured depository institutions.

        ‘(C) DEPOSITS- All amounts assessed against insured depository institutions by the Corporation shall be deposited into the deposit insurance fund.’.

      (2) Section 11(a) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is amended by striking paragraphs 4(A), (6), and (7).

      (3) Section 7 of the Federal Deposit Insurance Act (12 U.S.C. 1817) is amended by striking subsection (l).

      (4) Section 7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended--

        (A) by striking subparagraphs (B), (F), and (G);

        (B) in clauses (i) and (iv) of subparagraph (A), by striking ‘each deposit insurance fund’ and inserting ‘the deposit insurance fund’;

        (C) in subparagraph (A)(iii), by striking ‘a deposit insurance fund’ and inserting ‘the deposit insurance fund’; and

        (D) by inserting after subparagraph (E) the following new subparagraph:

        ‘(F) RESERVE RATIO DEFINED- For purposes of this subsection, the term ‘reserve ratio’ means the ratio of the net worth of the deposit insurance fund to the value of the aggregate estimated insured deposits held in all insured depository institutions.’.

      (5) Section 7(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(3)) is amended--

        (A) in subparagraph (A) by striking ‘any deposit insurance fund’ and inserting ‘the deposit insurance fund’; and

        (B) by striking subparagraphs (C) and (D).

      (6) Subparagraph (A) of section 7(b)(6) of the Federal Deposit Insurance Act (as so redesignated by section 3(a) of this Act) is amended--

        (A) in clause (i) (as so redesignated)--

          (i) by inserting ‘or’ after the semicolon at the end of subclause (I);

          (ii) by striking subclause (II); and

          (iii) by striking ‘; and’ at the end of subclause (III) and inserting a period; and

        (B) by striking clause (ii) (as so redesignated).

      (7) Section 7 of the Federal Deposit Insurance Act (12 U.S.C. 1817) is amended by striking subsection (l).

      (8) Section 11(a)(4)(B) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(4)(B)) is amended by striking ‘Bank Insurance Fund and the Savings Association Insurance Fund’ and inserting ‘deposit insurance fund’.

      (9) Paragraph (1) of section 11(f) of the Federal Deposit Insurance Act (12 U.S.C. 1821(f)) is amended by striking ‘depositor, except that--’ and all that follows through the period at the end of the paragraph and inserting ‘depositor.’.

      (10) Section 11(i)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1821(i)(3)) is amended--

        (A) by striking subparagraph (B); and

        (B) in subparagraph (C), by striking ‘subparagraphs (A) and (B)’ and inserting ‘subparagraph (A)’.

      (11) Section 11A(a)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1821a(a)(3)) is amended by striking ‘Bank Insurance Fund, the Savings Association Insurance Fund,’ and inserting ‘deposit insurance fund’.

      (12) Section 11A(f) of the Federal Deposit Insurance Act (12 U.S.C. 1821a(f)) is amended by striking ‘Savings Association Insurance Fund’ and inserting ‘deposit insurance fund’.

      (13) Section 13(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1823(a)(1)) is amended by striking ‘Bank Insurance Fund, Savings Association Insurance Fund,’ and inserting ‘deposit insurance fund’.

      (14) Section 13(c)(4)(G) of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)) is amended--

        (A) in clause (ii)--

          (i) by striking ‘appropriate insurance fund’ and inserting ‘depository insurance fund’;

          (ii) by striking ‘the members of the insurance fund (of which such institution is a member)’ and inserting ‘insured depository institutions’;

          (iii) by striking ‘each member’s’ and inserting ‘each insured depository institution’s’; and

          (iv) by striking ‘the member’s’ and inserting ‘the institution’s’.

      (15) Section 13(c) of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is amended by striking paragraph (11).

      (16) Section 13(h) of the Federal Deposit Insurance Act (12 U.S.C. 1823(h)) is amended by striking ‘Bank Insurance Fund’ and inserting ‘deposit insurance fund’.

      (17) Section 13(k)(4)(B)(i) of the Federal Deposit Insurance Act (12 U.S.C. 1823(k)(4)(B)(i)) is amended by striking ‘Savings Association Insurance Fund member’ and inserting ‘savings association’.

      (18) Section 13(k)(5)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1823(k)(5)(A)) is amended by striking ‘Savings Association Insurance Fund members’ and inserting ‘savings associations’.

      (19) The penultimate sentence of section 14(a) of the Federal Deposit Insurance Act (12 U.S.C. 1824(a)) is amended--

        (A) by striking ‘Bank Insurance Fund or the Savings Association Insurance Fund’ and inserting ‘depository institution fund’; and

        (B) by striking ‘each such fund’ and inserting ‘the fund’.

      (20) The 1st sentence of section 14(b) of the Federal Deposit Insurance Act (12 U.S.C. 1824(b)) is amended by striking ‘Bank Insurance Fund or Savings Association Insurance Fund’ and inserting ‘deposit insurance fund’.

      (21) Section 14(c) of the Federal Deposit Insurance Act (12 U.S.C. 1824(c)) is amended by striking paragraph (3).

      (22) Section 14 of the Federal Deposit Insurance Act (12 U.S.C. 1824) is amended by striking subsection (d).

      (23) Section 15(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 1825(c)(5)) is amended--

        (A) by striking ‘Bank Insurance Fund or Savings Association Insurance Fund, respectively,’ and inserting ‘deposit insurance fund’;

        (B) by striking ‘Bank Insurance Fund or Savings Association Insurance Fund, respectively;’ and inserting ‘deposit insurance fund;’; and

        (C) by striking ‘Bank Insurance Fund or the Savings Association Insurance Fund, respectively,’ and inserting ‘deposit insurance fund,’.

      (24) Section 17(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1827(a)(1)) is amended by striking ‘Bank Insurance Fund, the Savings Association Insurance Fund,’ each place such term appears and inserting ‘deposit insurance fund’.

      (25) Section 17(d) of the Federal Deposit Insurance Act (12 U.S.C. 1827(d)) is amended by striking ‘Bank Insurance Fund, the Savings Association Insurance Fund,’ each place such term appears and inserting ‘deposit insurance fund’.

      (26) The heading for section 17(a) of the Federal Deposit Insurance Act (12 U.S.C. 1827(a)) is amended by striking ‘BIF, SAIF,’ and inserting ‘THE DEPOSIT INSURANCE FUND’.

      (27) Section 18(m)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1828(m)(3)) is amended--

        (A) in subparagraph (A)--

          (i) by striking ‘Savings Association Insurance Fund.’ and inserting ‘deposit insurance fund.’; and

          (ii) by striking ‘Savings Association Insurance Fund member’ and inserting ‘insured savings association’; and

        (B) in subparagraph (C), by striking ‘Savings Association Insurance Fund or the Bank Insurance Fund’ and inserting ‘deposit insurance fund’.

      (28) Subsections (a)(1) and (d)(1)(A) of section 24 of the Federal Deposit Insurance Act (12 U.S.C. 1831a) are each amended by striking ‘appropriate’.

      (29) Section 24(e)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1831a(e)(2)) is amended--

        (A) in subparagraph (A), by striking ‘of which such banks are members’; and

        (B) in subparagraph (B)(ii), by striking ‘of which such bank is a member’.

      (30) Section 24(f)(6)(B) of the Federal Deposit Insurance Act (12 U.S.C. 1831a(f)(6)(B)) is amended by striking ‘of which such bank is a member’.

      (31) Section 28 of the Federal Deposit Insurance Act (12 U.S.C. 1831e) is amended by striking ‘affected deposit insurance fund’ each place such term appears and inserting ‘deposit insurance fund’.

      (32) Section 31(a) of the Federal Deposit Insurance Act (12 U.S.C. 1831h(a)) is amended by striking ‘Insurance Fund’.

      (33) The heading for section 31 of the Federal Deposit Insurance Act (12 U.S.C. 1831h) is amended by striking ‘insurance fund’.

      (34) Section 31(b)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1831h(b)(1)) is amended by striking ‘insured depository institutions that are Savings Association Insurance Fund members’ and inserting ‘insured savings associations’.

      (35) Section 31(f)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1831h(f)(1)) is amended by striking ‘insured financial institutions that are members of the Savings Association Insurance Fund’ and inserting ‘insured savings associations’.

      (36) Section 36(i)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1831m(i)(3)) is amended by striking ‘affected’.

      (37) Section 38(o)(1)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1831o(o)(1)(A)) is amended by striking ‘Savings Association Insurance Fund’ and inserting ‘deposit insurance fund’.

    (c) EFFECTIVE DATE OF AMENDMENTS- The amendments made by subsection (b) shall take effect as of the end of the 12-month period described in subsection (a).

SEC. 8. STUDY BY BANKING AGENCIES ON CONVERSIONS TO A UNIFIED CHARTER.

    (a) STUDY REQUIRED- Before the end of the 12-month period beginning on the date of the enactment of this Act, the Federal banking agencies (as defined in section 3(z) of the Federal Deposit Insurance Act) shall jointly--

      (1) conduct a study on--

        (A) the consolidation of national bank and savings association charters into a unified charter for depository institutions; and

        (B) the most feasible means for the conversion of national banks and savings associations into depository institutions with a unified charter;

      (2) identify any difficulties or problems which may arise in connection with such conversions; and

      (3) develop proposals and recommendations for the establishment of a unified charter and the implementation of such conversions to a unified charter.

    (b) REPORT TO CONGRESS-

      (1) REPORT REQUIRED- Before the end of the 12-month period described in subsection (a), the agencies referred to in such subsection shall submit a joint report to the Congress on the findings and conclusions of the agencies with respect to the study conducted in accordance with subsection (a).

      (2) CONTENTS- The report submitted to the Congress pursuant to paragraph (1) shall contain such recommendations and proposals for legislative or administrative action as the agencies referred to in subsection (a) may determine to be appropriate.