[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2363 Introduced in House (IH)]


104th CONGRESS
  1st Session
                                H. R. 2363

   To provide for adequate funding for the Financing Corporation, to 
 provide for the merger of the deposit insurance funds, to provide for 
   the conversion of Federal savings associations into banks and the 
   treatment of State savings associations as banks for purposes of 
Federal banking law, to abolish the position of Director of the Office 
             of Thrift Supervision, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 19, 1995

Mrs. Roukema (for herself, Mr. Leach, Mr. McCollum, Mr. Roth, Mr. Baker 
 of Louisiana, Mr. Bachus, Mr. Vento, Mr. Flake, Mr. Royce, Mr. Lucas, 
  Mr. Weller, Mr. Metcalf, and Mr. Watts of Oklahoma) introduced the 
  following bill; which was referred to the Committee on Banking and 
Financial Services, and in addition to the Committee on Ways and Means, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of 
                        the committee concerned

_______________________________________________________________________

                                 A BILL


 
   To provide for adequate funding for the Financing Corporation, to 
 provide for the merger of the deposit insurance funds, to provide for 
   the conversion of Federal savings associations into banks and the 
   treatment of State savings associations as banks for purposes of 
Federal banking law, to abolish the position of Director of the Office 
             of Thrift Supervision, 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 ``Thrift Charter 
Conversion Act of 1995''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

  TITLE I--BANK INSURANCE FUND AND SAVINGS ASSOCIATION INSURANCE FUND

Sec. 101. Special assessment.
Sec. 102. Assessments on insured depository institutions.
Sec. 103. Merger of bank insurance fund and savings association 
                            insurance fund after recapitalization of 
                            SAIF.
Sec. 104. Refund of amounts in deposit insurance fund in excess of 
                            designated reserve amount.
Sec. 105. Assessments authorized only if needed to maintain the reserve 
                            ratio of a deposit insurance fund.
           TITLE II--STATUS OF BANKS AND SAVINGS ASSOCIATIONS

Sec. 201. Termination of Federal savings associations; treatment of 
                            State savings associations as banks for 
                            purposes of Federal banking law.
Sec. 202. Treatment of certain activities and affiliations of bank 
                            holding companies resulting from this Act.
Sec. 203. Transition provisions for activities of savings associations 
                            which convert into or become treated as 
                            banks.
Sec. 204. Registration of bank holding companies resulting from 
                            conversions of savings associations to 
                            banks or treatment of savings associations 
                            as banks.
Sec. 205. Additional transition provisions and special rules.
Sec. 206. Technical and conforming amendments.
Sec. 207. References to savings associations and State banks in Federal 
                            law.
Sec. 208. Repeal of Home Owners' Loan Act.
Sec. 209. Effective date; definitions.
       TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

Sec. 301. Office of Thrift Supervision abolished.
Sec. 302. Determination of transferred functions and employees.
Sec. 303. Savings provisions.
Sec. 304. References in Federal law to Director of the Office of Thrift 
                            Supervision.
Sec. 305. Reconfiguration of board of directors of FDIC as a result of 
                            removal of Director of the Office of Thrift 
                            Supervision.
                 TITLE IV--LOAN LOSS RESERVE TREATMENT

Sec. 401. Repeal of special thrift bad debt reserve method.

  TITLE I--BANK INSURANCE FUND AND SAVINGS ASSOCIATION INSURANCE FUND

SEC. 101. 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.--The Corporation shall 
                        impose, on the basis of such factors as the 
                        Board of Directors considers to be appropriate, 
                        a single special assessment on the institutions 
                        described in the following subclauses (other 
                        than institutions exempt under subparagraph 
                        (C):
                                    ``(I) Each Savings Association 
                                Insurance Fund member (including any 
                                Savings Association Insurance Fund 
                                member referred to in section 
                                5(d)(2)(G)).
                                    ``(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.
                            ``(ii) Amount of assessment.--The 
                        assessment imposed under clause (i) shall be in 
                        an amount equal to such percentage of the 
                        Savings Association Insurance Fund assessment 
                        base of the institutions subject to such 
                        assessment 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 March 31, 1995, 
as the Board of Directors determines, in the Board of Directors' 
discretion, to be necessary in order for the reserve ratio of the 
Savings Association Insurance Fund to meet the designated reserve ratio 
on the 1st business day of January, 1996.
                            ``(iii) Deposit of assessment.--
                        Notwithstanding any other provision of law, the 
                        proceeds of any assessment imposed under clause 
                        (i) shall be deposited in the Savings 
                        Association Insurance Fund.
                            ``(iv) Date payment due.--The special 
                        assessment imposed under this subparagraph 
                        shall be--
                                    ``(I) due on the 1st business day 
                                of January, 1996; and
                                    ``(II) paid to the Corporation on 
                                the later of the due date or such other 
                                date as the Corporation may prescribe 
                                which may not be later than the end of 
                                the 60-day period beginning on the date 
                                of the Thrift Charter Conversion Act of 
                                1995.
                    ``(C) Special rules for certain undercapitalized 
                institutions.--
                            ``(i) In general.--The Board of Directors 
                        may exempt any insured depository institution 
                        from the payment of the assessment imposed 
                        under subparagraph (B)(i) if the exemption 
                        would reduce risk to the Savings Association 
                        Insurance Fund.
                            ``(ii) Continuation of prior assessment 
                        rate.--Notwithstanding paragraph (2) or any 
                        other provision of this subsection, the 
                        semiannual assessment rate applicable under 
                        paragraph (2) during the period beginning on 
                        January 1, 1996, and ending on December 31, 
                        1999, with respect to any insured depository 
                        institution which receives an exemption under 
                        clause (i) shall be the semiannual assessment 
                        rate applicable to Savings Association 
                        Insurance Fund members under paragraph (2) as 
                        of June 30, 1995.
                            ``(iii) Special rule for oakar banks.--If 
                        an insured depository institution to which 
                        clause (ii) applies is an institution described 
                        in subparagraph (B)(i)(II), section 5(d)(3), as 
                        in effect on September 13, 1995, shall continue 
                        to apply with respect to such institution for 
                        purposes of clause (ii) without regard to the 
                        repeal of such section by section 102(c) of the 
                        Thrift Charter Conversion Act of 1995.
                            ``(iv) Deposit of assessment.--Assessments 
                        imposed under paragraph (2) in accordance with 
                        clause (i) on depository institutions to which 
                        such clause applies shall be deposited--
                                    ``(I) in the Savings Association 
                                Insurance Fund until such fund is 
                                merged into the deposit insurance fund 
                                pursuant to section 103(a)(2) of the 
                                Thrift Charter Conversion Act of 1995; 
                                and
                                    ``(II) after such merger, in the 
                                deposit insurance fund.
                    ``(D) Pro rata payment of special assessment by 
                exempt institutions authorized.--In the case of any 
                depository institution which receives an exemption 
                under subparagraph (C)(i) from the special assessment 
                imposed under subparagraph (B), subparagraph (C)(ii) 
                shall cease to apply with respect to such institution 
                as of the date on which the institution makes a payment 
                to the Corporation, on such terms as the Board of 
                Directors may prescribe, in an amount equal to the 
                product of--
                            ``(i) 12.5 percent of the product of--
                                    ``(I) the Savings Association 
                                Insurance Fund assessment base of the 
                                institution which would have been used 
                                in the calculation of the amount of 
                                such special assessment if the 
                                institution had not received the 
                                exemption from such assessment; and
                                    ``(II) the percentage rate 
                                calculated by the Board of Directors 
                                under subparagraph (B)(ii) for use in 
                                determining the amount of the special 
                                assessment for depository institutions 
                                which did not receive an exemption 
                                under subparagraph (C); and
                            ``(ii) the whole number of full semiannual 
                        periods which begin after the date of such 
                        payment and end before January 1, 2000.''.

SEC. 102. ASSESSMENTS ON INSURED DEPOSITORY INSTITUTIONS.

    (a) Financing Corporation Assessments on All FDIC-Insured 
Depository Institutions.--Section 21(f) of the Federal Home Loan Bank 
Act (12 U.S.C. 1441(f)(2)) is amended--
            (1) in the portion of paragraph (2) which precedes 
        subparagraph (A)--
                    (A) by striking ``each Savings Association 
                Insurance Fund member'' and inserting ``each insured 
                depository institution (as defined in section 3(c)(2) 
                of the Federal Deposit Insurance Act)''; and
                    (B) by striking ``such members'' and inserting 
                ``such institutions''; and
            (2) in paragraph (2)(A), by striking ``Savings Association 
        Insurance Fund members'' and inserting ``insured depository 
        institutions''.
    (b) Assessment Rates for SAIF Members May Not Be Less Than 
Assessment Rates for BIF Members.--Section 7(b)(2)(F) of the Federal 
Deposit Insurance Act (12 U.S.C. 1817(b)(2)(F)) is amended--
            (1) by striking ``and'' at the end of clause (i);
            (2) by striking the period at the end of clause (ii) and 
        inserting ``; and''; and
            (3) by adding at the end the following new clause:
                            ``(iii) notwithstanding any other provision 
                        of this subsection, assessment rates for 
                        Savings Association Insurance Fund members may 
                        not be less than assessment rates for Bank 
                        Insurance Fund members.''.
    (c) Repeal of Exit Moratorium and Oakar Bank Provisions.--Effective 
January 1, 1998, section 5(d) of the Federal Deposit Insurance Act (12 
U.S.C. 1815(d)) is amended by striking paragraphs (2) and (3).
    (d) Technical and Conforming Amendments.--
            (1) 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''.
            (2) Section 21(k) of the Federal Home Loan Bank Act (12 
        U.S.C. 1441(k)) is amended--
                    (A) by striking paragraph (1); and
                    (B) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively.
            (3) Section 7(b)(2)(A) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1817(b)(2)(A)) is amended by adding at the end the 
        following new clause:
                            ``(v) Coordination with section 21 of 
                        federal home loan bank act.--No provision of 
                        this subparagraph limiting the amount of 
                        assessments for purposes of this subsection 
                        shall be construed as limiting the amount of 
                        assessments which may be imposed by the 
                        Financing Corporation under section 21(f)(2) of 
                        the Federal Home Loan Bank Act.''.
    (e) Effective Date.--The amendments made by subsections (a), (b), 
and (d) shall take effect on January 1, 1996.

SEC. 103. MERGER OF BANK INSURANCE FUND AND SAVINGS ASSOCIATION 
              INSURANCE FUND AFTER RECAPITALIZATION OF SAIF.

    (a) Establishment of Deposit Insurance Fund.--
            (1) In general.--Effective January 1, 1998, 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 103(a)(2) of 
                        the Thrift Charter Conversion Act of 1995, 
                        other than any assets of the Savings 
                        Association Insurance Fund which have been 
                        deposited in the special reserve of the deposit 
                        insurance fund pursuant to section 103(b)(2) of 
                        such Act.
                    ``(B) Uses.--The deposit insurance fund shall be 
                available to the Corporation for use in carrying out 
                the insurance purposes of the Corporation in accordance 
                with this Act 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) Merger by corporation.--Except with respect to any 
        assets of the Savings Association Insurance Fund which are 
        required to be deposited in the special reserve of the deposit 
        insurance fund pursuant to subsection (b)(2), the Corporation 
        shall merge the Bank Insurance Fund and the Savings Association 
        Insurance Fund on January 1, 1998, into the deposit insurance 
        fund established by the amendment made by paragraph (1).
    (b) Establishment of Special Reserve of the Deposit Insurance 
Fund.--
            (1) In general.--Effective January 1, 1998, section 
        11(a)(6) is amended to read as follows:
            ``(6) Special reserve of the deposit insurance fund.--
                    ``(A) In general.--There is established a fund to 
                be known as the special reserve of the deposit 
                insurance fund which shall--
                            ``(i) be maintained and administered by the 
                        Corporation; and
                            ``(ii) initially consist of amounts 
                        deposited in the special reserve pursuant 
to section 103(b)(2) of the Thrift Charter Conversion Act of 1995.
                    ``(B) Emergency use of special reserve.--
                            ``(i) Use authorized.--Subject to clause 
                        (ii) and notwithstanding subparagraph (C), the 
                        Corporation may, in the sole discretion of the 
                        Board of Directors, transfer amounts from the 
                        special reserve for deposit in the deposit 
                        insurance fund for use in accordance with 
                        paragraph (5)(B).
                            ``(ii) Conditions on transfer.--The Board 
                        of Directors may authorize a transfer under 
                        clause (i) only if--
                                    ``(I) the Board of Directors 
                                determines that the reserve ratio of 
                                the deposit insurance fund is less than 
                                50 percent of the designated reserve 
                                ratio; and
                                    ``(II) the Board of Directors finds 
                                that the reserve ratio of the deposit 
                                insurance will likely be less than the 
                                designated reserve ratio of the fund 
                                for each of the 4 calendar quarters 
                                beginning after the date of such 
                                determination.
                    ``(C) No refunds or other uses authorized.--Except 
                as provided in subparagraph (B), the Corporation may 
                not make any payment from the special reserve, make any 
                refund or provide any credit to any insured depository 
                institution with respect to any amount in the special 
                reserve, or use any amount in the special reserve for 
                any other purpose (including the use of any such amount 
                as security for the repayment of any obligation of the 
                Corporation).
                    ``(D) Exclusion of special reserve in calculating 
                the reserve ratio.--No amount in the special reserve 
                may be taken into account in calculating the reserve 
                ratio of the deposit insurance fund under section 7.''.
            (2) Transfer and deposit by corporation.--If, at the time 
        of the merger of the Bank Insurance Fund and the Savings 
        Association Insurance Fund pursuant to subsection (a)(2), the 
        reserve ratio of the Savings Association Insurance Fund exceeds 
        the designated reserve ratio, the Corporation shall transfer 
        from such fund to the special reserve of the deposit insurance 
        fund established by the amendment made by paragraph (1) an 
        amount equal to the amount which causes the reserve ratio of 
        the Savings Association Insurance Fund to exceed the designated 
        reserve ratio.
    (c) Technical and Conforming Amendments.--
            (1) Section 3(y) of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(y)) is amended by striking ``Bank Insurance Fund or 
        the Savings Association Insurance Fund, as appropriate'' and 
        inserting ``the deposit insurance fund established under 
        section 11(a)(5)''.
            (2) Section 11(a) of the Federal Deposit Insurance Act (12 
        U.S.C. 1821(a)) is amended by striking paragraphs 4(A) and (7).
            (3) Section 5(d)(1) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1815(d)(1)) is amended--
                    (A) in subparagraph (A), by striking ``reserve 
                ratios'' and all that follows through the period and 
                inserting ``the reserve ratio of the deposit insurance 
                fund.'';
                    (B) by striking subparagraph (B); and
                    (C) by redesignating subparagraph (C) as 
                subparagraph (B).
            (4) Section 7 of the Federal Deposit Insurance Act (12 
        U.S.C. 1817) is amended by striking subsection (l).
            (5) 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 
                aggregate estimated insured deposits held in all 
                insured depository institutions.''.
            (6) 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).
            (7) Subparagraph (A) of section 7(b)(6) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1817(b)(6)) (as so 
        redesignated by section 101 of this subtitle) is amended--
                    (A) in clause (i)--
                            (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).
            (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, the Savings Association Insurance Fund,'' and inserting 
        ``deposit insurance fund, the special reserve of the 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 ``deposit 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) 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 
                ``deposit insurance fund''; and
                    (B) by striking ``each such fund'' and inserting 
                ``the fund''.
            (20) 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 ``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 of the Federal Deposit Insurance Act (12 
        U.S.C. 1831h(a)) is hereby repealed.
            (33) Section 36(i)(3) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1831m(i)(3)) is amended by striking ``affected''.
            (34) Section 38 of the Federal Deposit Insurance Act (12 
        U.S.C. 1831o) is amended by striking subsection (o).
            (35) Section 21B(f)(2)(C)(ii) of the Federal Home Loan Bank 
        Act (12 U.S.C. 1441b(f)(2)(C)(ii)) is amended by striking ``to 
        Savings Association Insurance Fund members'' where such term 
        appears in subclauses (I) and (II) and inserting ``to insured 
        depository institutions which were Savings Association 
        Insurance Fund members as of the date of the enactment of the 
        Thrift Charter Conversion Act of 1995''.
    (d) Effective Date of Amendments.--The amendments made by 
subsection (c) shall take effect on January 1, 1998.

SEC. 104. REFUND OF AMOUNTS IN DEPOSIT INSURANCE FUND IN EXCESS OF 
              DESIGNATED RESERVE AMOUNT.

    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.--
                    ``(A) In general.--Subject to subparagraph (B), if 
                as of the end of any semiannual period the amount of 
                the actual reserves in the Bank Insurance Fund (until 
                the merger of such fund into the deposit insurance fund 
                pursuant to section 103(a)(2) of the Thrift Charter 
                Conversion Act of 1995) or the deposit insurance fund 
                (after the establishment of such fund under section 
                103(a)(1) of such Act) exceeds the balance required to 
                meet the designated reserve applicable with respect to 
                such fund, such excess amount 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.
                    ``(B) Refund not to exceed previous semiannual 
                assessment.--The amount of any refund under this 
                paragraph to any member of a deposit insurance fund for 
                any semiannual period may not exceed the total amount 
                of assessments paid by such member to the insurance 
                fund with respect to such period.''.

SEC. 105. ASSESSMENTS AUTHORIZED ONLY IF NEEDED TO MAINTAIN THE RESERVE 
              RATIO OF A DEPOSIT INSURANCE FUND.

    (a) In General.--Section 7(b)(2)(A)(i) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(b)(2)(A)(i)) is amended in the portion of 
such section preceding subclause (I) by inserting ``when necessary, and 
only to the extent necessary'' after ``insured depository 
institutions''.
    (b) Limitation on Assessment.--Section 7(b)(2)(A)(iii) of the 
Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)(iii)) is amended 
to read as follows:
                            ``(iii) Limitation on assessment.--The 
                        Board of Directors shall not set semiannual 
                        assessments with respect to a deposit insurance 
                        fund in excess of the amount needed--
                                    ``(I) to maintain the reserve ratio 
                                of the fund at the designated reserve 
                                ratio; or
                                    ``(II) if the reserve ratio is less 
                                than the designated reserve ratio, to 
                                increase the reserve ratio to the 
                                designated reserve ratio.''.

           TITLE II--STATUS OF BANKS AND SAVINGS ASSOCIATIONS

SEC. 201. TERMINATION OF FEDERAL SAVINGS ASSOCIATIONS; TREATMENT OF 
              STATE SAVINGS ASSOCIATIONS AS BANKS FOR PURPOSES OF 
              FEDERAL BANKING LAW.

    (a) Termination of Federal Savings Association Charters.--
            (1) In general.--Each Federal savings association shall--
                    (A) convert to a national bank charter;
                    (B) convert to a State depository institution 
                charter; or
                    (C) surrender the charter of such savings 
                association and liquidate the institution.
            (2) Conversion to national bank by operation of law.--If 
        any Federal savings association has not taken any action 
        required under paragraph (1) as of January 1, 1998, the savings 
        association shall--
                    (A) become a national bank on such date by 
                operation of law;
                    (B) immediately file articles of association and an 
                organizational certificate with the Comptroller of the 
                Currency in accordance with sections 5133, 5134, 5135 
                of the Revised Statutes of the United States; and
                    (C) cease to exist as a Federal savings association 
                as of such date.
            (3) Prohibition on new charters of federal savings 
        associations.--The Director of the Office of Thrift Supervision 
        may not grant any charter for a Federal savings association 
        after the date of the enactment of this Act.
    (b) Treatment of State Savings Associations as Banks For Purposes 
of Federal Banking Law.--
            (1) Amendments to federal deposit insurance act.--Section 3 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813) is 
        amended--
                    (A) by striking paragraph (2) of subsection (a) and 
                inserting the following new paragraph:
            ``(2) State bank.--The term `State bank' means any bank, 
        banking association, trust company, savings bank, industrial 
        bank (or similar depository institution which the Board of 
        Directors finds to be operating substantially in the same 
        manner as an industrial bank), building and loan association, 
        savings and loan association, homestead association, 
        cooperative bank, or other banking institution--
                    ``(A) which is engaged in the business of receiving 
                deposits, other than trust funds (as defined in this 
                section); and
                    ``(B) which--
                            ``(i) is incorporated under the laws of any 
                        State;
                            ``(ii) is organized and operating according 
                        to the laws of the State in which such 
                        institution is chartered or organized; or
                            ``(iii) is operating under the Code of Law 
                        for the District of Columbia (except a national 
                        bank).''; and
                    (B) in subsection (q)--
                            (i) by inserting ``and'' after the 
                        semicolon at the end of paragraph (2);
                            (ii) by striking ``; and'' at the end of 
                        paragraph (3) and inserting a period; and
                            (iii) by striking paragraph (4).
            (2) Amendments to the bank holding company act of 1956.--
        Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841) is amended--
                    (A) by striking subparagraph (E) of subsection 
                (a)(5); and
                    (B) by striking subparagraphs (B) and (J) of 
                subsection (c)(2).
            (3) Amendments to the federal reserve act.--The 2d and 3d 
        paragraphs of the 1st section of the Federal Reserve Act (12 
        U.S.C. 221) are each amended by inserting ``(as defined in 
        section 3(a)(2) of the Federal Deposit Insurance Act)'' after 
        ``State bank''.

SEC. 202. TREATMENT OF CERTAIN ACTIVITIES AND AFFILIATIONS OF BANK 
              HOLDING COMPANIES RESULTING FROM THIS ACT.

    Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) 
is amended by adding at the end the following new subsection:
    ``(k) Treatment of Companies Resulting From Savings and Loan 
Holding Companies.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section or any other provision of Federal law including 
        sections 20 and 32 of the Banking Act of 1933, a qualified bank 
        holding company may continue, after such company becomes a bank 
        holding company--
                    ``(A) to maintain or enter into any nonbanking 
                affiliation which such company was authorized to 
                maintain or enter into as of September 13, 1995; and
                    ``(B) to engage, directly or through any affiliate 
                described in subparagraph (A) which is not a bank, in 
                any activity in which such company or any affiliate 
                described in subparagraph (A) was authorized to engage 
                as of September 13, 1995,
        if the requirements of paragraph (3) are met.
            ``(2) Qualified bank holding company defined.--For purposes 
        of this subsection, the term `qualified bank holding company' 
        means--
                    ``(A) any company which--
                            ``(i) as of September 13, 1995, is a 
                        savings and loan holding company and is not a 
                        bank holding company; and
                            ``(ii) becomes a bank holding company after 
                        such date; and
                    ``(B) any bank holding company which--
                            ``(i) as of September 13, 1995--
                                    ``(I) is a savings and loan holding 
                                company; and
                                    ``(II) is exempt from this Act 
                                pursuant to an order issued by the 
                                Board under subsection (d); and
                            ``(ii) after such date, loses the exemption 
                        under subsection (d).
            ``(3) Prerequisites for continuation of grandfathered 
        activities and affiliations.--This subsection shall cease to 
        apply with respect to a qualified bank holding company if, at 
        any time after such company becomes a bank holding company 
        company or, in the case of a qualified bank holding company 
        described in paragraph (2)(B), loses such company's exemption 
        under subsection (d)--
                    ``(A) any insured depository institution controlled 
                by such company which, as of the day before the company 
                becomes a bank holding company, was subject to the 
                requirements contained in section 10(m) of the Home 
                Owners' Loan Act, as in effect on such date, (and 
                regulations in effect on such date under such section) 
                for treatment as a qualified thrift lender under such 
                section fails to meet such requirements;
                    ``(B) any insured depository institution controlled 
                by such company fails to comply with any limitation or 
                restriction on the type or amounts of loans or 
                investments of the institution to which such 
                institution was subject as of the date of the enactment 
                of the Thrift Charter Conversion Act of 1995; or
                    ``(C) the company or any subsidiary of the company 
                acquires more than 5 percent of the shares or assets of 
                any insured depository institution after September 13, 
                1995.
            ``(4) Nontransferable.--This subsection shall not apply 
        with respect to any qualified bank holding company if, after 
        September 13, 1995, any person acquires, directly or 
        indirectly, control of the company or the company is the 
        subject of any merger, consolidation, or other similar 
        transaction.
            ``(5) Prohibition on certain insured depository 
        institutions identifying themselves as national banks.--
                    ``(A) In general.--Notwithstanding the requirement 
                of section 5134 of the Revised Statutes of the United 
                States--
                            ``(i) the name of an insured depository 
                        institution subsidiary of a qualified bank 
                        holding company which--
                                    ``(I) as of the date of the 
                                enactment of the Thrift Charter 
                                Conversion Act of 1995, is a savings 
                                and loan holding company described in 
                                section 10(c)(3) of the Home Owners' 
                                Loan Act (as in effect on such date); 
                                and
                                    ``(II) is subject to the 
                                restrictions contained in paragraph 
                                (3),
                        may not include the term `national'; and
                            ``(ii) such insured depository institution 
                        may not be identified as a national bank on any 
                        sign displayed by the institution or in any 
                        advertisement or other publication of the 
                        institution.
                    ``(B) Depository institution not liable for 
                fraudulent misrepresentation for not representing 
                itself as a national bank.--An insured depository 
                institution which is subject to subparagraph (A) shall 
                not be liable for any civil or criminal penalty under 
                any Federal or State consumer protection law, or in any 
                criminal or civil action, for fraudulently 
                misrepresenting the nature of the charter of the 
                institution, for falsely advertising the status of the 
                institution, for making a false statement with respect 
                to the status of the institution, or for any similar 
                offense by reason of the institution's compliance with 
                such subparagraph.
            ``(6) Enforcement.--In addition to any other power of the 
        Board, the Board may enforce compliance with the provisions of 
        this subsection with respect to any qualified bank holding 
        company and any bank controlled by such company under section 8 
        of the Federal Deposit Insurance Act.''.

SEC. 203. TRANSITION PROVISIONS FOR ACTIVITIES OF SAVINGS ASSOCIATIONS 
              WHICH CONVERT INTO OR BECOME TREATED AS BANKS.

    (a) In General.--Notwithstanding any other provision of Federal 
law, any insured depository institution which, as of September 13, 
1995, is a savings association (as defined in section 3(b) of the 
Federal Deposit Insurance Act (as in effect on such date)) and after 
such date converts to a national or State bank charter or becomes 
treated as a State bank pursuant to the amendment made by section 
201(b) may continue to engage, directly or indirectly, in any activity 
in which such institution was lawfully engaged as of such date during 
the 2-year period beginning on the effective date of such conversion or 
the effective date of such amendments, as the case may be.
    (b) Two 1-Year Extensions Authorized.--The 2-year period described 
in subsection (a) with respect to any insured depository institution 
may be extended for such institution not to exceed 2 additional times 
for not more than 1 year each time if the appropriate Federal banking 
agency determines that such extension is necessary to avert substantial 
loss to the institution and is otherwise consistent with the safety and 
soundness of the institution.

SEC. 204. REGISTRATION OF BANK HOLDING COMPANIES RESULTING FROM 
              CONVERSIONS OF SAVINGS ASSOCIATIONS TO BANKS OR TREATMENT 
              OF SAVINGS ASSOCIATIONS AS BANKS.

    Section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842) 
is amended by adding at the end the following new subsection:
    ``(h) Registration of Certain Bank Holding Companies.--A company 
which, as of September 13, 1995, is a savings and loan holding company 
(as defined in section 10(a)(1)(D) of Home Owners' Loan Act (as in 
effect on such date) and is not a bank holding company shall not be 
required to obtain the approval of the Board under subsection (a) to 
become a bank holding company after September 13, 1995, as a result of 
the conversion of any insured depository institution subsidiary of such 
company into a bank or by virtue of the treatment of any insured 
depository institution subsidiary of such company as a bank pursuant to 
the amendments made by the Thrift Charter Conversion Act of 1995, if 
such company--
            ``(1) registers as a bank holding company with the Board in 
        accordance with section 5(a); and
            ``(2) does not acquire, directly or indirectly, ownership 
        or control of any additional insured depository institution or 
        other company in connection with such conversion or 
        treatment.''.

SEC. 205. ADDITIONAL TRANSITION PROVISIONS AND SPECIAL RULES.

    (a) Conversion of Mutual Savings Associations Into National 
Banks.--
            (1) In general.--Notwithstanding the paragraph designated 
        the ``Third'' of section 5134 of the Revised Statutes of the 
        United States and subject to regulations prescribed by the 
        Comptroller of the Currency under subparagraph (B), any savings 
        association which is organized in mutual form as of the date of 
        the enactment of this Act and at all times thereafter may 
        organize as a national bank in mutual form.
            (2) Applicability of capital stock requirements.--The 
        Comptroller of the Currency shall prescribe regulations 
        regarding the manner in which requirements of title LXII of the 
        Revised Statutes of the United States with respect to capital 
        stock, and limitations imposed on national banks under such 
        title based on capital stock, shall apply to national banks 
        organized in mutual form pursuant to subparagraph (A).
            (3) Rule of construction.--No provision of this subsection 
        shall be construed as authorizing any national bank to be 
        organized in mutual form, or to convert to a mutual form, other 
        than a mutual national bank resulting from the conversion of a 
        savings association described in subparagraph (A).
            (4) Conversion to stock national bank.--Subject to such 
        regulations as the Comptroller of the Currency may prescribe 
        for the protection of depositors' rights and for any other 
        purpose the Comptroller of the Currency may consider 
        appropriate, any national bank which is organized in mutual 
        form pursuant to paragraph (1) may reorganize as a stock 
        national bank.
    (b) Membership in Federal Home Loan Banks.--Any insured depository 
institution which--
            (1) as of the date of the enactment of this Act, is a 
        Federal savings association which, pursuant to section 6(e) of 
        the Federal Home Loan Bank Act, may not voluntarily withdraw 
        from membership in a Federal home loan bank; and
            (2) after such date ceases to be a Federal savings 
        association,
shall continue to be subject to the prohibition under such section on 
voluntary withdrawal from such membership after such institution ceases 
to be a Federal savings association.
    (c) Branches.--
            (1) In general.--Notwithstanding any provision of the 
        Federal Deposit Insurance Act, the Bank Holding Company Act of 
        1956, or any other Federal or State law, any depository 
        institution which--
                    (A) as of the date of the enactment of this Act, is 
                a savings association; and
                    (B) becomes a bank before January 1, 1998, or, 
                pursuant to the amendments made by this subsection, is 
                treated as a bank as of such date under the Federal 
                Deposit Insurance Act,
        and any depository institution or bank holding company which 
        acquires such depository institution, may continue, after the 
        depository institution becomes or commences to be treated as a 
        bank, to operate any branch which the savings association 
        operated as a branch on September 13, 1995.
            (2) No additional branches.--Paragraph (1) shall not be 
        construed as authorizing the establishment, acquisition, or 
        operation of any additional branch of a depository institution 
        in any State by virtue of the operation by such institution of 
        a branch in such State pursuant to such paragraph except to the 
        extent such establishment, acquisition, or operation is 
        permitted under the Federal Deposit Insurance Act, Bank Holding 
        Company Act of 1956, and any other applicable Federal or State 
        law without regard to such branch.
    (d) Transition Provision Relating to Limitations on Loans to 1 
Borrower.--Section 5200 of the Revised Statutes of the United States 
(12 U.S.C. 84) is amended by adding at the end the following new 
subsection:
    ``(e) Transition Provision for Savings Associations Converting to 
National Banks.--In the case of any depository institution which, as of 
September 13, 1995, is a savings association (as defined in section 
3(b) of the Federal Deposit Insurance Act (as in effect on such date)) 
and becomes a national bank on or before January 1, 1998, any loan, or 
legally binding commitment to make a loan, made or entered into by such 
institution which is outstanding on the date the institution becomes a 
national bank may continue to be held without regard to any limitation 
contained in this section during the 3-year period beginning on such 
date.''.

SEC. 206. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Amendments to the Federal Deposit Insurance Act.--
            (1) Section 3(z) of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(z)) is amended by striking ``, the Director of the 
        Office of Thrift Supervision,''.
            (2) Section 8(b) of the Federal Deposit Insurance Act (12 
        U.S.C. 1818(b)) is amended by striking paragraph (9).
            (3) Section 13 of the Federal Deposit Insurance Act (12 
        U.S.C. 1823) is amended by striking subsection (k).
            (4) Subsections (c)(2) and (i)(2) of section 18 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1828) are each 
        amended--
                    (A) in subparagraph (B), by inserting ``and'' after 
                the semicolon;
                    (B) in subparagraph (C), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking subparagraph (D).
            (5) Section 18 of the Federal Deposit Insurance Act (12 
        U.S.C. 1828) is amended by striking subsection (m).
            (6) The Federal Deposit Insurance Act (12 U.S.C. 1811 et 
        seq.) is amended by striking section 28.
    (b) Amendments to the Bank Holding Company Act of 1956.--
            (1) Section 2 of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1841) is amended by striking subsections (i) and (j).
            (2) Section 4(c)(8) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843(c)(8)) is amended by striking the sentence 
        preceding the penultimate sentence.
            (3) Section 4(f) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843(f)) is amended--
                    (A) in paragraph (2)(A)(i), by striking ``or an 
                insured institution'' and all that follows through ``of 
                this subsection)'';
                    (B) in paragraph (2)(A)(ii)--
                            (i) by striking ``or a savings 
                        association'' where such term appears in the 
                        portion of such paragraph which precedes 
                        subclause (I));
                            (ii) by inserting ``and'' at the end of 
                        subclause (VI);
                            (iii) by striking subclauses (VIII), (IX), 
                        and (X); and
                            (iv) by striking ``(V), and (VIII)'', where 
                        such term appears in the portion of such 
                        paragraph which appears after the end of 
                        subclause (VII), and inserting ``and (V)''; and
                    (C) by striking paragraphs (10), (11), (12), and 
                (13).
            (4) Section 4(i) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843(i)) is amended--
                    (A) by striking paragraphs (1) and (2); and
                    (B) in paragraph (3)(A), by striking ``any Federal 
                savings association'' and all that follows through the 
                period at the end of such paragraph and inserting 
                ``such association was authorized to engage under this 
                section as of September 15, 1995.''.
    (c) Other Technical and Conforming Amendments.--
            (1) Section 804(a) of the Alternative Mortgage Transaction 
        Parity Act of 1982 (12 U.S.C. 3803) is amended--
                    (A) in paragraph (1), by inserting ``(as such term 
                is defined in section 3(a) of the Federal Deposit 
                Insurance Act)'' after ``with respect to banks'';
                    (B) by inserting ``and'' after the semicolon at the 
                end of paragraph (1);
                    (C) by striking ``; and'' at the end of paragraph 
                (2) and inserting a period; and
                    (D) by striking paragraph (3).
            (2) Section 205 of the Depository Institution Management 
        Interlocks Act (12 U.S.C. 3204) is amended--
                    (A) in the portion of paragraph (8)(A) which 
                precedes clause (i), by striking ``diversified 
                savings'' and all that follows through ``with respect 
                to'' and inserting ``A depository institution holding 
                company which, as of September 13, 1995, and at all 
                times thereafter, is a diversified savings and loan 
                holding company (as defined in section 10(1)(F) of Home 
                Owners' Loan Act, as such section is in effect on such 
                date) with respect to''; and
                    (B) by striking paragraph (9).
            (3) Section 19(b)(1)(A) of the Federal Reserve Act (12 
        U.S.C. 461(b)(1)(A)) is amended--
                    (A) by inserting ``and'' after the semicolon at the 
                end of clause (v); and
                    (B) by striking clause (vi).

SEC. 207. REFERENCES TO SAVINGS ASSOCIATIONS AND STATE BANKS IN FEDERAL 
              LAW.

    Effective January 1, 1998, any reference in any Federal banking law 
to--
            (1) the term ``savings association'' shall be deemed to be 
        a reference to a bank as defined in section 3(a) of the Federal 
        Deposit Insurance Act; and
            (2) the term ``State bank'' shall be deemed to include any 
        depository institution included in the definition of such term 
        in section 3(a)(2) of such Act.

SEC. 208. REPEAL OF HOME OWNERS' LOAN ACT.

    Effective January 1, 1998, the Home Owners' Loan Act (12 U.S.C. 
1461 et seq.) is hereby repealed.

SEC. 209. EFFECTIVE DATE; DEFINITIONS.

    (a) Effective Date.--The amendments made by this title shall take 
effect on January 1, 1998.
    (b) Definitions.--For purposes of this title, the terms 
``appropriate Federal banking agency'', ``bank holding company'', 
``depository institution'', ``Federal savings association'', ``insured 
depository institution'', ``savings association'', and ``State bank'' 
have the same meanings as in section 3 of the Federal Deposit Insurance 
Act (as in effect on the date of the enactment of this Act).

       TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

SEC. 301. OFFICE OF THRIFT SUPERVISION ABOLISHED.

    Effective January 1, 1998, the Office of Thrift Supervision and the 
position of Director of the Office of Thrift Supervision are hereby 
abolished.

SEC. 302. DETERMINATION OF TRANSFERRED FUNCTIONS AND EMPLOYEES.

    (a) All Office of Thrift Supervision Employees Shall Be 
Transferred.--All employees of the Office of Thrift Supervision shall 
be identified for transfer under subsection (b) to the Office of the 
Comptroller of the Currency, the Federal Deposit Insurance Corporation, 
or the Board of Governors of the Federal Reserve System.
    (b) Functions and Employees Transferred.--
            (1) In general.--The Director of the Office of Thrift 
        Supervision, the Comptroller of the Currency, the Chairperson 
        of the Federal Deposit Insurance Corporation, and the Chairman 
        of the Board of Governors of the Federal Reserve System shall 
        jointly determine the functions or activities of the Office of 
        Thrift Supervision, and the number of employees of such Office 
        necessary to perform or support such functions or activities, 
        which are transferred from the Office to the Office of the 
        Comptroller of the Currency, the Federal Deposit Insurance 
        Corporation, or the Board of Governors of the Federal Reserve 
        System, as the case may be.
            (2) Allocation of employees.--The Comptroller of the 
        Currency, the Chairperson of the Federal Deposit Insurance 
        Corporation, and the Chairman of the Board of Governors of the 
        Federal Reserve System shall allocate the employees of the 
        Office of Thrift Supervision consistent with the number 
        determined pursuant to paragraph (1) in a manner which such 
        Comptroller, Chairperson, and Chairman, in their sole 
        discretion, deem equitable, except that, within work units, the 
        agency preferences of individual employees shall be 
        accommodated as far as possible.
    (c) Disposition of Affairs.--
            (1) In general.--In winding up the affairs of the Office of 
        Thrift Supervision, the Director of the Office of Thrift 
        Supervision shall consult and cooperate with the Comptroller of 
        the Currency, the Federal Deposit Insurance Corporation, and 
        the Board of Governors of the Federal Reserve System, as the 
        case may be, to facilitate the orderly transfer of the 
        functions to such Comptroller, Corporation, or Board.
            (2) Continuing authority of director of the office of 
        thrift supervision.--Except as provided in paragraph (1), no 
        provision of this subtitle shall be construed as affecting the 
        authority vested in the Director of the Office of Thrift 
        Supervision before the date of enactment of this Act which is 
        necessary to carry out the duties of the position until the 
        date upon which the position of Director of the Office of 
        Thrift Supervision is abolished.
            (3) Continuation of agency services.--Any agency, 
        department, or other instrumentality of the United States, or 
        any successor to any such agency, department, or 
        instrumentality, which was providing support services to the 
        Director of the Office of Thrift Supervision on the day before 
        the date such position is abolished shall--
                    (A) continue to provide such services on a 
                reimbursable basis, in accordance with the terms of the 
                arrangement pursuant to which such services were 
                provided until the arrangement is modified or 
                terminated in accordance with such terms, except that 
                effective January 1, 1998, the Comptroller of the 
                Currency, the Federal Deposit Insurance Corporation, or 
                the Board of Governors of the Federal Reserve System, 
                as the case may be, shall be substituted for the 
                Director of the Office of Thrift Supervision as a party 
                to the arrangement; and
                    (B) consult with the Comptroller, the Corporation, 
                or the Board to coordinate and facilitate a prompt and 
                reasonable transition.
    (d) Transfer of Property.--Effective January 1, 1998, all property 
of the Office of Thrift Supervision shall be transferred to the 
Comptroller of the Currency, the Federal Deposit Insurance Corporation, 
or the Board of Governors of the Federal Reserve System, as determined 
in accordance with subsections (a) and (b).

SEC. 303. SAVINGS PROVISIONS.

    (a) Existing Rights, Duties, and Obligations Not Affected.--No 
provision of this title shall be construed as affecting the validity of 
any right, duty, or obligation of the United States, the Director of 
the Office of Thrift Supervision, or any person, which existed on the 
day before the date upon which the position of Director of the Office 
of Thrift Supervision and the Office of Thrift Supervision are 
abolished.
    (b) Continuation of Suits.--No action or other proceeding commenced 
by or against the Director of the Office of Thrift Supervision shall 
abate by reason of enactment of this Act, except that, effective 
January 1, 1998, the Comptroller of the Currency, the Federal Deposit 
Insurance Corporation, or the Board of Governors of the Federal Reserve 
System, as the case may be, shall be substituted as a party to any such 
action or proceeding.
    (c) Continuation of Administrative Rules.--All orders, resolutions, 
determinations, regulations, interpretative rules, other 
interpretations, guidelines, procedures, supervisory and enforcement 
actions, and other advisory material (other than any regulation to 
which section 3(f) of the Home Owners' Loan Act (as in effect on 
September 13, 1995) applies) which--
            (1) have been issued, made, prescribed, or permitted to 
        become effective by the Office of Thrift Supervision, and
            (2) are in effect on December 31, 1996, (or become 
        effective after such date pursuant to the terms of the order, 
        resolution, determination, rule, other interpretation, 
        guideline, procedure, supervisory or enforcement action, and 
        other advisory material, as in effect on such date), shall--
                    (A) continue in effect according to the terms of 
                such orders, resolutions, determinations, regulations, 
                interpretative rules, other interpretations, 
                guidelines, procedures, supervisory or enforcement 
                actions, or other advisory material;
                    (B) be administered by the Comptroller of the 
                Currency, the Federal Deposit Insurance Corporation, or 
                the Board of Governors of the Federal Reserve System; 
                and
                    (C) be enforceable by or against the Comptroller of 
                the Currency, the Federal Deposit Insurance 
                Corporation, or the Board of Governors of the Federal 
                Reserve System until modified, terminated, set aside, 
                or superseded in accordance with applicable law by the 
                Comptroller, Corporation, or Board, by any court of 
                competent jurisdiction, or by operation of law.
    (d) Treatment of References in Adjustable Rate Mortgages Issued 
Before FIRREA.--
            (1) References in prior law.--For purposes of section 
        402(e) of Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (12 U.S.C. 1437 note), any reference in 
        such section to--
                    (A) the Director of the Office of Thrift 
                Supervision shall be deemed to be a reference to the 
                Secretary of the Treasury; and
                    (B) a Savings Association Insurance Fund member 
                shall be deemed to be a reference to an insured 
                depository institution (as defined in section 3 of the 
                Federal Deposit Insurance Act).
    (e) Treatment of References in Adjustable Rate Mortgage Instruments 
Issued After FIRREA.--
            (1) In general.--For purposes of adjustable rate mortgage 
        instruments that are in effect as of the date of enactment of 
        this Act, any reference in the instrument to the Director of 
        the Office of Thrift Supervision or Savings Association 
        Insurance Fund members shall be treated as a reference to the 
        Secretary of the Treasury or insured depository institutions 
        (as defined in section 3 of the Federal Deposit Insurance Act), 
        as appropriate.
            (2) Substitution for indexes.--If any index used to 
        calculate the applicable interest rate on any adjustable rate 
        mortgage instrument is no longer calculated and made available 
        as a direct or indirect result of the enactment of this Act, 
        any index--
                    (A) made available by the Secretary of the 
                Treasury; or
                    (B) determined by the Secretary of the Treasury, 
                pursuant to paragraph (4), to be substantially similar 
                to the index which is no longer calculated or made 
                available,
        may be substituted by the holder of any such adjustable rate 
        mortgage instrument upon notice to the borrower.
            (3) Agency action required to provide continued 
        availability of indexes.--Promptly after the enactment of this 
        subsection, the Secretary of the Treasury, the Chairperson of 
        the Federal Deposit Insurance Corporation, and the Comptroller 
        of the Currency shall take such action as may be necessary to 
        assure that the indexes prepared by the Director of the Office 
        of Thrift Supervision immediately prior to the enactment of 
        this subsection and used to calculate the interest rate on 
        adjustable rate mortgage instruments continue to be available.
            (4) Requirements relating to substitute indexes.--If any 
        agency can no longer make available an index pursuant to 
        paragraph (3), an index that is substantially similar to such 
        index may be substituted for such index for purposes of 
        paragraph (2) if the Secretary of the Treasury determines, 
        after notice and opportunity for comment, that--
                    (A) the new index is based upon data substantially 
                similar to that of the original index; and
                    (B) the substitution of the new index will result 
                in an interest rate substantially similar to the rate 
                in effect at the time the original index became 
                unavailable.

SEC. 304. REFERENCES IN FEDERAL LAW TO DIRECTOR OF THE OFFICE OF THRIFT 
              SUPERVISION.

    Any reference in any Federal law to the Director of the Office of 
Thrift Supervision or the Office of Thrift Supervision shall be deemed 
to be a reference to the appropriate Federal banking agency (as defined 
in section 3(q) of the Federal Deposit Insurance Act).

SEC. 305. RECONFIGURATION OF BOARD OF DIRECTORS OF FDIC AS A RESULT OF 
              REMOVAL OF DIRECTOR OF THE OFFICE OF THRIFT SUPERVISION.

    (a) In General.--Section 2(a)(1) of the Federal Deposit Insurance 
Act (12 U.S.C. 1812(a)(1)) is amended to read as follows:
            ``(1) In general.--The management of the Corporation shall 
        be vested in a Board of Directors consisting of 3 members--
                    ``(A) 1 of whom shall be the Comptroller of the 
                Currency; and
                    ``(B) 2 of whom shall be appointed by the 
                President, by and with the advice and consent of the 
                Senate, from among individuals who are citizens of the 
                United States.''.
    (b) Technical and Conforming Amendments.--
            (1) Section 2(a)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1812(a)(2)) is amended--
                    (A) by striking ``February 28, 1993'' and inserting 
                ``January 1, 1998''; and
                    (B) by striking ``3'' and inserting ``2''.
            (2) Section 2(d)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1812(d)(2)) is amended--
                    (A) by striking ``or the office of Director of the 
                Office of Thrift Supervision'';
                    (B) by striking ``or such Director'';
                    (C) by striking ``or the Acting Director of the 
                Office of Thrift Supervision, as the case may be''; and
                    (D) by striking ``or Director''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall take effect on January 1, 1998.
    (d) Designation of Abolished Position.--Unless there is a vacancy 
in the position of an appointed member of the Board of Directors as of 
January 1, 1998, the President, consistent with the requirements of 
section 2(a)(2) of the Federal Deposit Insurance Act, shall designate 
which of the 3 positions of appointed member of such Board of Directors 
shall be abolished pursuant to the amendment made by subsection (a).

                 TITLE IV--LOAN LOSS RESERVE TREATMENT

SEC. 401. REPEAL OF SPECIAL THRIFT BAD DEBT RESERVE METHOD.

    (a) General Rule.--Section 593 of the Internal Revenue Code of 1986 
(relating to reserves for losses on loans) is hereby repealed.
    (b) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        apply to taxable years beginning after December 31, 1995.
            (2) Amendment treated as change in method of accounting.--
        In the case of any taxpayer who is required by reason of the 
        amendment made by this section to change his method of 
        computing reserves for bad debts--
                    (A) such change shall be treated as a change in a 
                method of accounting,
                    (B) such change shall be treated as initiated by 
                the taxpayer,
                    (C) such change shall be treated as having been 
                made with the consent of the Secretary, and
                    (D) the net adjustments which are required by 
                section 481 of the Internal Revenue Code of 1986 as a 
                result of the initial change in method of accounting 
                for bad debts required by this section shall be treated 
                as zero.
            (3) Transitional rule for small thrifts taking deduction 
        allowable under section 585.--
                    (A) In general.--In the case of an organization 
                that--
                            (i) on the effective date of the amendment 
                        made by this section is an association or bank 
                        referred to by section 593(a)(1) of the 
                        Internal Revenue Code of 1986 (as in effect 
                        prior to the amendment made by this section),
                            (ii) is a bank to which section 585 
                        applies, and
                            (iii) elects to compute a reasonable 
                        addition to a reserve for bad debts under 
                        section 585 in lieu of any deduction under 
                        section 168(a),
                then the reserve at the beginning of the first taxable 
                year beginning after December 31, 1995, and the base 
                year amount for purposes of section 585(b)(2)(B) shall 
                be equal to the amount computed under section 
                585(b)(2)(A) as of the end of the last taxable year 
                beginning before January 1, 1996.
                    (B) Treatment of beginning reserve amount.--Such 
                beginning reserve amount--
                            (i) shall not be deductible in the year of 
                        the initial change of method, and
                            (ii) shall not be included in gross income 
                        if the bank no longer computes a reasonable 
                        addition to a reserve for bad debts under 
                        section 585 for any reason.
                The Secretary shall prescribe such regulations as may 
                be necessary or appropriate to carry out the purposes 
                of this subsection.
    (c) Clerical Amendment.--The table of sections for part 1 of 
subchapter H of chapter 1 of the Internal Revenue Code of 1986 is 
amended by striking the item relating to section 593.
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