[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1562 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 1562

 To provide for the merger of the bank and savings association deposit 
 insurance funds, to modernize and improve the safety and fairness of 
     the Federal deposit insurance system, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 29, 2005

    Mr. Enzi (for himself, Mr. Johnson, Mr. Allard, and Mr. Hagel) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To provide for the merger of the bank and savings association deposit 
 insurance funds, to modernize and improve the safety and fairness of 
     the Federal deposit insurance system, 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 ``Safe and Fair 
Deposit Insurance Act of 2005''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
             TITLE I--MERGER OF THE DEPOSIT INSURANCE FUNDS

Sec. 101. Short title.
Sec. 102. Merger of BIF and SAIF.
Sec. 103. Establishment of the Deposit Insurance Fund.
Sec. 104. Technical and conforming amendments to the Federal Deposit 
                            Insurance Act.
Sec. 105. Other technical and conforming amendments.
Sec. 106. Effective date.
       TITLE II--DEPOSIT INSURANCE MODERNIZATION AND IMPROVEMENT

Sec. 201. Short title.
Sec. 202. Increase in Federal insurance coverage.
Sec. 203. Designated reserve ratio.
Sec. 204. Assessment credits and dividends.
Sec. 205. Regulations required.
Sec. 206. Studies of potential changes to the Federal deposit insurance 
                            system.
Sec. 207. Effective date.

SEC. 2. DEFINITIONS.

    In this Act--
            (1) the term ``Administration'' means the National Credit 
        Union Administration;
            (2) the term ``Board'' means the Board of Directors of the 
        Federal Deposit Insurance Corporation (other than in connection 
        with the National Credit Union Administration Board);
            (3) the term ``Corporation'' means the Federal Deposit 
        Insurance Corporation;
            (4) the term ``designated reserve ratio'' means the reserve 
        ratio designated by the Board under section 7(b)(3) of the 
        Federal Deposit Insurance Act, as amended by this Act;
            (5) the terms ``Fund'' and ``Deposit Insurance Fund'' mean 
        the Deposit Insurance Fund established under section 11(a)(4) 
        of the Federal Deposit Insurance Act, as amended by this Act;
            (6) the term ``insured depository institution'' has the 
        same meaning as in section 3 of the Federal Deposit Insurance 
        Act; and
            (7) the term ``reserve ratio'' means the ratio of the fund 
        balance of the Deposit Insurance Fund to the aggregate 
        estimated amount of deposits insured by the Fund.

             TITLE I--MERGER OF THE DEPOSIT INSURANCE FUNDS

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Insurance Funds Merger Act of 
2005''.

SEC. 102. MERGER OF BIF AND SAIF.

    (a) In General.--
            (1) Merger.--The Bank Insurance Fund and the Savings 
        Association Insurance Fund shall be merged into the Deposit 
        Insurance Fund.
            (2) Disposition of assets and liabilities.--All assets and 
        liabilities of the Bank Insurance Fund and the Savings 
        Association Insurance Fund shall be transferred to the Deposit 
        Insurance Fund.
            (3) No separate existence.--The separate existence of the 
        Bank Insurance Fund and the Savings Association Insurance Fund 
        shall cease on the effective date of the merger thereof under 
        this section.
    (b) Repeal of Outdated Merger Provision.--Section 2704 of the 
Deposit Insurance Funds Act of 1996 (12 U.S.C. 1821 note) is repealed.

SEC. 103. ESTABLISHMENT OF THE DEPOSIT INSURANCE FUND.

    (a) In General.--Section 11(a)(4) of the Federal Deposit Insurance 
Act (12 U.S.C. 1821(a)(4)) is amended--
            (1) by redesignating subparagraph (B) as subparagraph (C);
            (2) by striking subparagraph (A) and inserting the 
        following:
                    ``(A) Establishment.--There is established the 
                Deposit Insurance Fund, which the Corporation shall--
                            ``(i) maintain and administer;
                            ``(ii) use to carry out its insurance 
                        purposes, in the manner provided by this 
                        subsection; and
                            ``(iii) invest in accordance with section 
                        13(a).
                    ``(B) Uses.--The Deposit Insurance Fund shall be 
                available to the Corporation for use with respect to 
                Deposit Insurance Fund members.'';
            (3) by striking ``(4) General provisions relating to 
        funds.--'' and inserting the following:
            ``(4) Establishment of the deposit insurance fund.--'';
            (4) in subparagraph (C), as redesignated by paragraph (1) 
        of this subsection, by striking ``Bank Insurance Fund and the 
        Savings Association Insurance Fund'' and inserting ``Deposit 
        Insurance Fund''; and
            (5) by adding at the end the following:
                    ``(D) Deposits.--All amounts assessed against 
                insured depository institutions by the Corporation 
                shall be deposited in the Deposit Insurance Fund.''.
    (b) Merger-Related Amendments to the Federal Deposit Insurance 
Act.--
            (1) Definitions.--Section 3(y) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(y)) is amended to read as 
        follows:
    ``(y) Definitions Relating to the Deposit Insurance Fund.--
            ``(1) Deposit insurance fund.--The terms `Deposit Insurance 
        Fund' and `Fund' mean the fund established under section 
        11(a)(4).''.
            (2) Assessments.--Section 7 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1817) is amended--
                    (A) by striking subsection (l);
                    (B) by redesignating subsections (m) and (n) as 
                subsections (l) and (m), respectively; and
                    (C) in subsection (b), by striking paragraph (2) 
                and inserting the following:
            ``(2) Assessments.--
                    ``(A) In general.--Each insured depository 
                institution shall pay assessments to the Corporation in 
                such amounts and at such time or times as the Board of 
                Directors may require.
                    ``(B) Factors to be considered.--In setting 
                assessments for insured depository institutions, the 
                Board of Directors shall consider--
                            ``(i) the estimated operating expenses of 
                        the Deposit Insurance Fund;
                            ``(ii) the estimated case resolution 
                        expenditures and income of the Deposit 
                        Insurance Fund;
                            ``(iii) the projected effects of 
                        assessments on the earnings and capital of 
                        insured depository institutions;
                            ``(iv) the need to maintain a risk-based 
                        assessment system under paragraph (1); and
                            ``(v) any other factors that the Board of 
                        Directors may determine to be appropriate.
                    ``(C) Notice of assessments.--The Corporation shall 
                notify each insured depository institution of 
                assessments charged to that institution.
                    ``(D) Newly insured institutions.--To facilitate 
                the administration of this section, the Board of 
                Directors may waive the requirements of paragraphs (1) 
                and (2) for any assessment period in which a depository 
                institution becomes insured.''.
            (3) Repeal of separate funds provisions.--Section 11(a) of 
        the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is 
        amended--
                    (A) by striking paragraphs (5), (6), and (7); and
                    (B) by redesignating paragraph (8) as paragraph 
                (5).

SEC. 104. TECHNICAL AND CONFORMING AMENDMENTS TO THE FEDERAL DEPOSIT 
              INSURANCE ACT.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended--
            (1) in section 3(a)(1) (12 U.S.C. 1813(a)(1)), by striking 
        subparagraph (B) and inserting the following:
                    ``(B) includes any former savings association.'';
            (2) in section 5(b)(5) (12 U.S.C. 1815(b)(5)), by striking 
        ``the Bank Insurance Fund or the Savings Association Insurance 
        Fund;'' and inserting ``the Deposit Insurance Fund,'';
            (3) in section 5(c)(4), by striking ``deposit insurance 
        fund'' and inserting ``Deposit Insurance Fund'';
            (4) in section 5(d) (12 U.S.C. 1815(d)), by striking 
        paragraphs (2) and (3);
            (5) in section 5(d)(1) (12 U.S.C. 1815(d)(1))--
                    (A) in subparagraph (A), by striking ``reserve 
                ratios in the Bank Insurance Fund and the Savings 
                Association Insurance Fund as required by section 7'' 
                and inserting ``the reserve ratio of the Deposit 
                Insurance Fund'';
                    (B) by striking subparagraph (B) and inserting the 
                following:
            ``(2) Fee credited to the deposit insurance fund.--The fee 
        paid by the depository institution under paragraph (1) shall be 
        credited to the Deposit Insurance Fund.'';
                    (C) by striking ``institutions.--'' and all that 
                follows through ``general.--'' and inserting 
                ``institutions.--''; and
                    (D) by redesignating subparagraph (C) as paragraph 
                (3) and moving the margin 2 ems to the left;
            (6) in section 5(e) (12 U.S.C. 1815(e))--
                    (A) in paragraph (5)(A), by striking ``Bank 
                Insurance Fund or the Savings Association Insurance 
                Fund'' and inserting ``Deposit Insurance Fund'';
                    (B) by striking paragraph (6); and
                    (C) by redesignating paragraphs (7), (8), and (9) 
                as paragraphs (6), (7), and (8), respectively;
            (7) in section 6(5) (12 U.S.C. 1816(5)), by striking ``Bank 
        Insurance Fund or the Savings Association Insurance Fund'' and 
        inserting ``Deposit Insurance Fund'';
            (8) in section 7(a)(3) (12 U.S.C. 1817(a)(3))--
                    (A) by striking ``in July''; and
                    (B) by striking ``in January'';
            (9) in section 7(b) (12 U.S.C. 1817(b))--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B)(ii), by striking 
                        ``institution's semiannual assessment'' and 
                        inserting ``assessments for that institution 
                        under subsection (b)''; and
                            (ii) in subparagraph (C)--
                                    (I) by striking ``a depository 
                                institution's semiannual assessment'' 
                                and inserting ``assessments for a 
                                depository institution under subsection 
                                (b)''; and
                                    (II) by striking ``deposit 
                                insurance fund'' each place that term 
                                appears and inserting ``Deposit 
                                Insurance Fund'';
                    (B) in paragraph (1)(D), by striking ``each deposit 
                insurance fund'' and inserting ``the Deposit Insurance 
                Fund'';
                    (C) by striking paragraph (4) and redesignating 
                paragraphs (5) through (7) as paragraphs (4) through 
                (6), respectively;
                    (D) in paragraph (5), as so redesignated--
                            (i) by striking ``any such assessment'' and 
                        inserting ``any such assessment is necessary'';
                            (ii) by striking subparagraph (B);
                            (iii) in subparagraph (A)--
                                    (I) by striking ``(A) is 
                                necessary--'';
                                    (II) by striking ``Bank Insurance 
                                Fund members'' and inserting ``insured 
                                depository institutions''; and
                                    (III) by redesignating clauses (i), 
                                (ii), and (iii) as subparagraphs (A), 
                                (B), and (C), respectively, and moving 
                                the margins 2 ems to the left; and
                            (iv) in subparagraph (C) (as 
                        redesignated)--
                                    (I) by inserting ``that'' before 
                                ``the Corporation''; and
                                    (II) by striking ``; and'' and 
                                inserting a period; and
                    (E) in paragraph (6), as so redesignated, by 
                striking ``semiannual assessment'' and inserting 
                ``assessment under subsection (b)'';
            (10) in section 7(c) (12 U.S.C. 1817(c))--
                    (A) in paragraph (1), by striking ``institution's 
                semiannual assessment'' and inserting ``assessments for 
                that institution under subsection (b)'';
                    (B) by striking paragraphs (2) and (3); and
                    (C) by redesignating paragraph (4) as paragraph 
                (2); and
            (11) in section 7(j)(7)(F) (12 U.S.C. 1817(j)(7)(F)), by 
        striking ``Bank Insurance Fund or the Savings Association 
        Insurance Fund'' and inserting ``Deposit Insurance Fund'';
            (12) in section 8 (12 U.S.C. 1818)--
                    (A) in subsection (p), by striking ``semiannual'';
                    (B) in subsection (q), by striking ``semiannual'' 
                and inserting ``assessment''; and
                    (C) in subsection (t)(2)(C), by striking ``deposit 
                insurance fund'' and inserting ``Deposit Insurance 
                Fund'';
            (13) in section 11 (12 U.S.C. 1821), by striking ``deposit 
        insurance fund'' each place that term appears and inserting 
        ``Deposit Insurance Fund'';
            (14) in section 11(f)(1) (12 U.S.C. 1821(f)(1)), by 
        striking ``, except that--'' and all that follows through the 
        end of the paragraph and inserting a period;
            (15) in section 11(i)(3) (12 U.S.C. 1821(i)(3))--
                    (A) by striking subparagraph (B);
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B); and
                    (C) in subparagraph (B) (as redesignated), by 
                striking ``subparagraphs (A) and (B)'' and inserting 
                ``subparagraph (A)'';
            (16) in section 11(p)(2)(B) (12 U.S.C. 1821(p)(2)(B)), by 
        striking ``institution, any'' and inserting ``institution, 
        the'';
            (17) in section 12(f)(4)(E)(iv) (12 U.S.C. 
        1822(f)(4)(E)(iv)), by striking ``Federal deposit insurance 
        funds'' and inserting ``the Deposit Insurance Fund, or any 
        predecessor deposit insurance fund'';
            (18) in section 13 (12 U.S.C. 1823)--
                    (A) by striking ``deposit insurance fund'' each 
                place that term appears and inserting ``Deposit 
                Insurance Fund'';
                    (B) in subsection (a)(1), by striking ``Bank 
                Insurance Fund, the Savings Association Insurance 
                Fund,'' and inserting ``Deposit Insurance Fund'';
                    (C) in subsection (c)(4)(E)--
                            (i) in the subparagraph heading, by 
                        striking ``funds'' and inserting ``fund''; and
                            (ii) in clause (i), by striking ``any 
                        insurance fund'' and inserting ``the Deposit 
                        Insurance Fund'';
                    (D) in subsection (c)(4)(G)(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'';
                            (iv) by striking ``the member's'' each 
                        place that term appears and inserting ``the 
                        institution's''; and
                            (v) in subclause (II), by striking 
                        ``semiannual'' and inserting ``applicable 
                        assessment'';
                    (E) in subsection (c), by striking paragraph (11);
                    (F) in subsection (h), by striking ``Bank Insurance 
                Fund'' and inserting ``Deposit Insurance Fund'';
                    (G) in subsection (k)(4)(B)(i), by striking 
                ``Savings Association Insurance Fund member'' and 
                inserting ``savings association'';
                    (H) in subsection (k)(5)--
                            (i) in subparagraph (A), by striking 
                        ``Savings Association Insurance Fund members'' 
                        and inserting ``savings associations'';
                            (ii) by striking ``member's'' each place 
                        that term appears and inserting ``savings 
                        association's''; and
                            (iii) by striking ``member'' each place 
                        that term appears and inserting ``savings 
                        association'';
            (19) in section 14(a) (12 U.S.C. 1824(a)), in the 5th 
        sentence--
                    (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 Deposit Insurance Fund'';
            (20) in section 14(b) (12 U.S.C. 1824(b)), by striking 
        ``Bank Insurance Fund or Savings Association Insurance Fund'' 
        and inserting ``Deposit Insurance Fund'';
            (21) in section 14(c) (12 U.S.C. 1824(c))--
                    (A) in paragraph (2)(A), by striking ``(7)'' and 
                inserting ``(6)''; and
                    (B) by striking paragraph (3);
            (22) in section 14(d) (12 U.S.C. 1824(d))--
                    (A) by striking ``Bank Insurance Fund member'' each 
                place that term appears and inserting ``insured 
                depository institution'';
                    (B) by striking ``Bank Insurance Fund members'' 
                each place that term appears and inserting ``insured 
                depository institutions'';
                    (C) by striking ``Bank Insurance Fund'' each place 
                that term appears (other than in connection with a 
                reference to a Bank Insurance Fund member or members) 
                and inserting ``Deposit Insurance Fund'';
                    (D) by striking the subsection heading and 
                inserting the following:
    ``(d) Borrowing for the Deposit Insurance Fund From Insured 
Depository Institutions.--'';
                    (E) in paragraph (3), in the paragraph heading, by 
                striking ``bif'' and inserting ``the deposit insurance 
                fund''; and
                    (F) in paragraph (5), in the paragraph heading, by 
                striking ``bif members'' and inserting ``insured 
                depository institutions'';
            (23) in section 14 (12 U.S.C. 1824) by adding at the end 
        the following:
    ``(e) Borrowing for the Deposit Insurance Fund From Federal Home 
Loan Banks.--
            ``(1) In general.--The Corporation may borrow from the 
        Federal home loan banks, with the concurrence of the Federal 
        Housing Finance Board, such funds as the Corporation considers 
        necessary for the use of the Deposit Insurance Fund.
            ``(2) Terms and conditions.--Any loan from any Federal home 
        loan bank under paragraph (1) to the Deposit Insurance Fund 
        shall--
                    ``(A) bear a rate of interest of not less than the 
                current marginal cost of funds to that bank, taking 
                into account the maturities involved;
                    ``(B) be adequately secured, as determined by the 
                Federal Housing Finance Board; and
                    ``(C) be a direct liability of the Deposit 
                Insurance Fund.'';
            (24) in section 15(c)(5) (12 U.S.C. 1825(c)(5))--
                    (A) by striking ``the Bank Insurance Fund or 
                Savings Association Insurance Fund, respectively'' each 
                place that term appears and inserting ``the Deposit 
                Insurance Fund''; and
                    (B) in subparagraph (B), by striking ``the Bank 
                Insurance Fund or the Savings Association Insurance 
                Fund, respectively'' and inserting ``the Deposit 
                Insurance Fund'';
            (25) in section 17(a) (12 U.S.C. 1827(a))--
                    (A) in the subsection heading, by striking ``BIF, 
                SAIF,'' and inserting ``the Deposit Insurance Fund''; 
                and
                    (B) in paragraph (1)--
                            (i) by striking ``the Bank Insurance Fund, 
                        the Savings Association Insurance Fund,'' each 
                        place that term appears and inserting ``the 
                        Deposit Insurance Fund''; and
                            (ii) in subparagraph (D), by striking 
                        ``each insurance fund'' and inserting ``the 
                        Fund'';
            (26) in section 17(d) (12 U.S.C. 1827(d)), by striking ``, 
        the Bank Insurance Fund, the Savings Association Insurance 
        Fund,'' each place that term appears and inserting ``the 
        Deposit Insurance Fund'';
            (27) in section 18(m) (12 U.S.C. 1828(m))--
                    (A) in paragraph (2), in the matter preceding 
                subparagraph (A), by striking the colon and inserting a 
                dash;
                    (B) in paragraph (3)(A)--
                            (i) by striking ``poses a serious threat to 
                        the Savings Association Insurance Fund'' and 
                        inserting ``of an insured savings association 
                        poses a serious threat to the Deposit Insurance 
                        Fund''; and
                            (ii) by striking ``Savings Association 
                        Insurance Fund member'' and inserting ``insured 
                        savings association''; and
                    (C) in paragraph (3)(C), by striking ``Savings 
                Association Insurance Fund or the Bank Insurance Fund'' 
                and inserting ``Deposit Insurance Fund'';
            (28) in section 18(o) (12 U.S.C. 1828(o)), by striking 
        ``deposit insurance funds'' and ``deposit insurance fund'' each 
        place those terms appear and inserting ``Deposit Insurance 
        Fund'';
            (29) in section 18(p) (12 U.S.C. 1828(p)), by striking 
        ``deposit insurance funds'' and inserting ``Deposit Insurance 
        Fund'';
            (30) in section 24 (12 U.S.C. 1831a)--
                    (A) in subsections (a)(1) and (d)(1)(A), by 
                striking ``appropriate deposit insurance fund'' each 
                place that term appears and inserting ``Deposit 
                Insurance Fund'';
                    (B) in subsection (e)(2)(A), by striking ``risk 
                to'' and all that follows through the period and 
                inserting ``risk to the Deposit Insurance Fund.''; and
                    (C) in subsections (e)(2)(B)(ii) and (f)(6)(B), by 
                striking ``the insurance fund of which such bank is a 
                member'' each place that term appears and inserting 
                ``the Deposit Insurance Fund'';
            (31) in section 28 (12 U.S.C. 1831e), by striking 
        ``affected deposit insurance fund'' each place that term 
        appears and inserting ``Deposit Insurance Fund'';
            (32) by striking section 31 (12 U.S.C. 1831h);
            (33) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)), by 
        striking ``affected deposit insurance fund'' and inserting 
        ``Deposit Insurance Fund'';
            (34) in section 37(a)(1)(C) (12 U.S.C. 1831n(a)(1)(C)), by 
        striking ``insurance funds'' and inserting ``Deposit Insurance 
        Fund'';
            (35) in section 38 (12 U.S.C. 1831o), by striking ``the 
        deposit insurance fund'' each place that term appears and 
        inserting ``the Deposit Insurance Fund'';
            (36) in section 38(a) (12 U.S.C. 1831o(a)), in the 
        subsection heading, by striking ``Funds'' and inserting 
        ``Fund'';
            (37) in section 38(k) (12 U.S.C. 1831o(k))--
                    (A) in paragraph (1), by striking ``a deposit 
                insurance fund'' and inserting ``the Deposit Insurance 
                Fund'';
                    (B) in paragraph (2), by striking ``A deposit 
                insurance fund'' and inserting ``The Deposit Insurance 
                Fund''; and
                    (C) in paragraphs (2)(A) and (3)(B), by striking 
                ``the deposit insurance fund's outlays'' each place 
                that term appears and inserting ``the outlays of the 
                Deposit Insurance Fund''; and
            (38) in section 38(o) (12 U.S.C. 1831o(o))--
                    (A) by striking ``Associations.--'' and all that 
                follows through ``Subsections (e)(2)'' in paragraph (2) 
                and inserting ``Associations.--Subsections (e)(2)'';
                    (B) by redesignating subparagraphs (A), (B), and 
                (C) as paragraphs (1), (2), and (3), respectively, and 
                moving the margins 2 ems to the left; and
                    (C) in paragraph (1) (as so redesignated), by 
                redesignating clauses (i) and (ii) as subparagraphs (A) 
                and (B), respectively, and moving the margins 2 ems to 
                the left.

SEC. 105. OTHER TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Section 5136 of the Revised Statutes.--The paragraph designated 
the ``Eleventh'' of section 5136 of the Revised Statutes of the United 
States (12 U.S.C. 24) is amended in the 5th sentence, by striking 
``affected deposit insurance fund'' and inserting ``Deposit Insurance 
Fund''.
    (b) Investments Promoting Public Welfare; Limitations on Aggregate 
Investments.--The 23d undesignated paragraph of section 9 of the 
Federal Reserve Act (12 U.S.C. 338a) is amended in the 4th sentence, by 
striking ``affected deposit insurance fund'' and inserting ``Deposit 
Insurance Fund''.
    (c) Advances to Critically Undercapitalized Depository 
Institutions.--Section 10B(b)(3)(A)(ii) of the Federal Reserve Act (12 
U.S.C. 347b(b)(3)(A)(ii)) is amended by striking ``any deposit 
insurance fund in'' and inserting ``the Deposit Insurance Fund of''.
    (d) Amendments to the Balanced Budget and Emergency Deficit Control 
Act of 1985.--Section 255(g)(1)(A) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 (2 U.S.C. 905(g)(1)(A)) is amended--
            (1) by striking ``Bank Insurance Fund'' and inserting 
        ``Deposit Insurance Fund''; and
            (2) by striking ``Federal Deposit Insurance Corporation, 
        Savings Association Insurance Fund;''.
    (e) Amendments to the Federal Home Loan Bank Act.--The Federal Home 
Loan Bank Act (12 U.S.C. 1421 et seq.) is amended--
            (1) in section 11(k) (12 U.S.C. 1431(k))--
                    (A) in the subsection heading, by striking ``SAIF'' 
                and inserting ``the Deposit Insurance Fund''; and
                    (B) by striking ``Savings Association Insurance 
                Fund'' each place that term appears and inserting 
                ``Deposit Insurance Fund'';
            (2) in section 21 (12 U.S.C. 1441)--
                    (A) in subsection (f)(2), by striking ``, except 
                that'' and all that follows through the end of the 
                paragraph and inserting a period; and
                    (B) in subsection (k), by striking paragraph (4);
            (3) in section 21A(b)(4)(B) (12 U.S.C. 1441a(b)(4)(B)), by 
        striking ``affected deposit insurance fund'' and inserting 
        ``Deposit Insurance Fund''; and
            (4) in section 21B(k) (12 U.S.C. 1441b(k)) by inserting 
        before the colon ``, the following definitions shall apply''.
    (f) Amendments to the Home Owners' Loan Act.--The Home Owners' Loan 
Act (12 U.S.C. 1461 et seq.) is amended--
            (1) in section 5 (12 U.S.C. 1464)--
                    (A) in subsection (c)(6), by striking ``As used in 
                this subsection--'' and inserting ``For purposes of 
                this subsection, the following definitions shall 
                apply:'';
                    (B) in subsection (o)(1), by striking ``that is a 
                Bank Insurance Fund member'';
                    (C) in subsection (o)(2)(A), by striking ``a Bank 
                Insurance Fund member until such time as it changes its 
                status to a Savings Association Insurance Fund member'' 
                and inserting ``insured by the Deposit Insurance 
                Fund'';
                    (D) in subsection (t)(5)(D)(iii)(II), by striking 
                ``affected deposit insurance fund'' and inserting 
                ``Deposit Insurance Fund'';
                    (E) in subsection (t)(7)(C)(i)(I), by striking 
                ``affected deposit insurance fund'' and inserting 
                ``Deposit Insurance Fund''; and
                    (F) in subsection (v)(2)(A)(i), by striking ``the 
                Savings Association Insurance Fund'' and inserting ``or 
                the Deposit Insurance Fund''; and
            (2) in section 10 (12 U.S.C. 1467a)--
                    (A) in subsection (c)(6)(D), by striking ``this 
                title'' and inserting ``this Act'';
                    (B) in subsection (e)(1)(B), by striking ``Savings 
                Association Insurance Fund or Bank Insurance Fund'' and 
                inserting ``Deposit Insurance Fund'';
                    (C) in subsection (e)(2), by striking ``Savings 
                Association Insurance Fund or the Bank Insurance Fund'' 
                and inserting ``Deposit Insurance Fund'';
                    (D) in subsection (e)(4)(B), by striking 
                ``subsection (1)'' and inserting ``subsection (l)'';
                    (E) in subsection (g)(3)(A), by striking ``(5) of 
                this section'' and inserting ``(5) of this 
                subsection'';
                    (F) in subsection (i), by redesignating paragraph 
                (5) as paragraph (4);
                    (G) in subsection (m)(3), by striking subparagraph 
                (E), and by redesignating subparagraphs (F), (G), and 
                (H) as subparagraphs (E), (F), and (G), respectively;
                    (H) in subsection (m)(7)(A), by striking ``during 
                period'' and inserting ``during the period''; and
                    (I) in subsection (o)(3)(D), by striking ``sections 
                5(s) and (t) of this Act'' and inserting ``subsections 
                (s) and (t) of section 5''.
    (g) Amendments to the National Housing Act.--The National Housing 
Act (12 U.S.C. 1701 et seq.) is amended--
            (1) in section 317(b)(1)(B) (12 U.S.C. 1723i(b)(1)(B)), by 
        striking ``Bank Insurance Fund for banks or through the Savings 
        Association Insurance Fund for savings associations'' and 
        inserting ``Deposit Insurance Fund''; and
            (2) in section 536(b)(1)(B)(ii) (12 U.S.C. 1735f-
        14(b)(1)(B)(ii)), by striking ``Bank Insurance Fund for banks 
        and through the Savings Association Insurance Fund for savings 
        associations'' and inserting ``Deposit Insurance Fund''.
    (h) Amendments to the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989.--The Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (12 U.S.C. 1811 note) is amended--
            (1) in section 951(b)(3)(B) (12 U.S.C. 1833a(b)(3)(B)), by 
        striking ``Bank Insurance Fund, the Savings Association 
        Insurance Fund,'' and inserting ``Deposit Insurance Fund (or 
        any predecessor deposit insurance fund)''; and
            (2) in section 1112(c)(1)(B) (12 U.S.C. 3341(c)(1)(B)), by 
        striking ``Bank Insurance Fund, the Savings Association 
        Insurance Fund,'' and inserting ``Deposit Insurance Fund''.
    (i) Amendment to the Bank Holding Company Act of 1956.--The Bank 
Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended--
            (1) in section 2(j)(2) (12 U.S.C. 1841(j)(2)), by striking 
        ``Savings Association Insurance Fund'' and inserting ``Deposit 
        Insurance Fund''; and
            (2) in section 3(d)(1)(D)(iii) (12 U.S.C. 
        1842(d)(1)(D)(iii)), by striking ``appropriate deposit 
        insurance fund'' and inserting ``Deposit Insurance Fund''.
    (j) Amendments to the Gramm-Leach-Bliley Act.--Section 114 of the 
Gramm-Leach-Bliley Act (12 U.S.C. 1828a) is amended by striking ``any 
Federal deposit insurance fund'', in subsection (a)(1)(B), paragraphs 
(2)(B) and (4)(B) of subsection (b), and subsection (c)(1)(B), each 
place that term appears and inserting ``the Deposit Insurance Fund''.

SEC. 106. EFFECTIVE DATE.

    This title and the amendments made by this title shall become 
effective on the first day of the first calendar quarter that begins 
more than 90 days after the date of enactment of this Act.

       TITLE II--DEPOSIT INSURANCE MODERNIZATION AND IMPROVEMENT

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Deposit Insurance Reform Act of 
2005''.

SEC. 202. INCREASE IN FEDERAL INSURANCE COVERAGE.

    (a) Insured Depository Institutions.--
            (1) In general.--Section 11(a)(1) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1821(a)(1)) is amended--
                    (A) by striking subparagraph (B) and inserting the 
                following:
                    ``(B) Net amount of insured deposits.--The net 
                amount of deposit insurance payable to any depositor at 
                an insured depository institution shall not exceed the 
                standard maximum deposit insurance amount, as 
                determined in accordance with paragraph (3) and 
                subparagraphs (C), (D), (E), and (F) of this 
                paragraph.''; and
                    (B) by striking subparagraph (D) and inserting the 
                following:
                    ``(D) Coverage for certain employee benefit plan 
                deposits.--
                            ``(i) Pass-through insurance.--The 
                        Corporation shall provide pass-through deposit 
                        insurance for the deposits of any employee 
                        benefit plan.
                            ``(ii) Prohibition on acceptance of benefit 
                        plan deposits.--An insured depository 
                        institution that is not well capitalized or 
                        adequately capitalized may not accept employee 
                        benefit plan deposits.
                            ``(iii) Definitions.--For purposes of this 
                        subparagraph, the following definitions shall 
                        apply:
                                    ``(I) Capital standards.--The terms 
                                `well capitalized' and `adequately 
                                capitalized' have the same meanings as 
                                in section 38.
                                    ``(II) Employee benefit plan.--The 
                                term `employee benefit plan' has the 
                                same meaning as in paragraph 
                                (5)(B)(ii), and includes any eligible 
                                deferred compensation plan described in 
                                section 457 of the Internal Revenue 
                                Code of 1986.
                                    ``(III) Pass-through deposit 
                                insurance.--The term `pass-through 
                                deposit insurance' means, with respect 
                                to an employee benefit plan, deposit 
                                insurance coverage provided on a pro 
                                rata basis to the participants in the 
                                plan, in accordance with the interests 
                                of each participant.
                    ``(E) Standard maximum deposit insurance amount 
                defined.--For purposes of this paragraph, the term 
                `standard maximum deposit insurance amount' means, 
                until the end of the 5-year period beginning on the 
                date of enactment of the Deposit Insurance Reform Act 
                of 2005, $100,000.
                    ``(F) Inflation adjustment.--
                            ``(i) In general.--As of January 1, 2010, 
                        and as of the 1st day of each 5-year period 
                        thereafter, the standard maximum deposit 
                        insurance amount payable to any depositor at an 
                        insured depository institution shall be 
                        increased by the product of--
                                    ``(I) $100,000; and
                                    ``(II) the ratio of the value of 
                                the Personal Consumption Expenditures 
                                Chain-Type Index (or any successor 
                                index thereto), published by the 
                                Department of Commerce, for December 31 
                                of the year preceding the year in which 
                                the adjustment is calculated under this 
                                clause, to the value of such index for 
                                December 31 of the year preceding the 
                                effective date of the Insurance Funds 
                                Merger Act of 2005.
                            ``(ii) Limitation on adjustments.--If the 
                        application of clause (i) would result in any 
                        decrease in the standard maximum deposit 
                        insurance amount in effect on the date of the 
                        adjustment under clause (i), the standard 
                        maximum deposit insurance amount shall remain 
                        unchanged until the next scheduled 5-year 
                        adjustment that does not result in any such 
                        decrease.
                            ``(iii) Rounding.--If the amount determined 
                        under clause (ii) for any period is not a 
                        multiple of $10,000, the amount so determined 
                        shall be rounded to the nearest $10,000.
                            ``(iv) Publication.--Not later than January 
                        1, 2010, and not later than April 1 of the 1st 
                        year of each subsequent 5-year period referred 
                        to in clause (i), the Board of Directors shall 
                        publish in the Federal Register the standard 
                        maximum deposit insurance amount and the amount 
                        of deposit insurance coverage under paragraph 
                        (3)(A) that may be due to any depositor at an 
                        insured depository institution during the 
                        applicable 5-year period.''.
            (2) Deposit insurance for retirement accounts.--Section 
        11(a)(3)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
        1821(a)(3)(A)) is amended--
                    (A) by striking ``$100,000'' and inserting 
                ``$250,000''; and
                    (B) by inserting before the period at the end the 
                following: ``which amount shall be subject to inflation 
                adjustments in the same manner as under paragraph 
                (1)(F) with respect to the standard maximum deposit 
                insurance amount, except that `$250,000' shall be 
                substituted for the amount specified in clause (i) of 
                paragraph (1)(F) for purposes of this subparagraph''.
            (3) Deposit insurance for municipal deposits.--Section 
        11(a)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
        1821(a)(2)(A)) is amended in the matter following clause (v)--
                    (A) by striking ``$100,000'' the first place that 
                term appears and inserting ``the standard maximum 
                deposit insurance amount'';
                    (B) by striking ``in an amount not to exceed 
                $100,000 per account'' the second place that term 
                appears; and
                    (C) by inserting before the period at the end the 
                following: ``, which amount shall be subject to 
                inflation adjustments in the same manner as under 
                paragraph (1)(F)''.
            (4) Technical and conforming amendment relating to 
        insurance of trust funds.--Section 7(i) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1817(i)) is amended in each of 
        paragraphs (1) and (3), by striking ``$100,000'' each place it 
        appears and inserting ``the standard maximum deposit insurance 
        amount (as determined under section 11(a)(1))''.
            (5) Other technical and conforming amendments.--The Federal 
        Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended--
                    (A) in section 11(m)(6) (12 U.S.C. 1821(m)(6)), by 
                striking ``$100,000'' and inserting ``an amount equal 
                to the standard maximum deposit insurance amount (as 
                determined under subsection (a)(1))'';
                    (B) in section 18 (12 U.S.C. 1828), by striking 
                subsection (a) and inserting the following:
    ``(a) Insurance Logo.--
            ``(1) Insured depository institutions.--Each insured 
        depository institution shall display at each place of business 
        maintained by that institution a sign or signs relating to the 
        insurance of the deposits of the institution, in accordance 
        with regulations to be prescribed by the Corporation.
            ``(2) Regulations.--The Corporation shall prescribe 
        regulations to carry out this subsection, including regulations 
        governing the substance of signs required by paragraph (1) and 
        the manner of display or use of such signs.
            ``(3) Penalties.--For each day that an insured depository 
        institution continues to violate this subsection or any 
        regulation issued under this subsection, it shall be subject to 
        a penalty of not more than $100, which the Corporation may 
        recover for its use.''; and
                    (C) in section 43(d) (12 U.S.C. 1831t(d)), by 
                striking ``$100,000'' and inserting ``an amount equal 
                to the standard maximum deposit insurance amount (as 
                determined under section 11(a)(1))''.
    (b) Insured Credit Unions.--
            (1) In general.--Section 207(k) of the Federal Credit Union 
        Act (12 U.S.C. 1787(k)) is amended--
                    (A) by striking ``(k)(1)'' and all that follows 
                through the end of paragraph (1) and inserting the 
                following:
    ``(k) Insured Amounts Payable.--
            ``(1) Net insured amount.--
                    ``(A) In general.--Subject to the provisions of 
                paragraph (2), the net amount of share insurance 
                payable to any member at an insured credit union shall 
                not exceed the total amount of the shares or deposits 
                in the name of the member (after deducting offsets), 
                less any part thereof which is in excess of the 
                standard maximum share insurance amount, as determined 
                in accordance with this paragraph and paragraphs (5) 
                and (6), and consistent with actions taken by the 
                Federal Deposit Insurance Corporation under section 
                11(a) of the Federal Deposit Insurance Act.
                    ``(B) Aggregation.--Determination of the net amount 
                of share insurance under subparagraph (A), shall be in 
                accordance with such regulations as the Board may 
                prescribe, and, in determining the amount payable to 
                any member, there shall be added together all accounts 
                in the credit union maintained by that member for that 
                member's own benefit, either in the member's own name 
                or in the names of others.
                    ``(C) Authority to define the extent of coverage.--
                The Board may define, with such classifications and 
                exceptions as it may prescribe, the extent of the share 
                insurance coverage provided for member accounts, 
                including member accounts in the name of a minor, in 
                trust, or in joint tenancy.''; and
                    (B) by adding at the end the following:
            ``(4) Coverage for certain employee benefit plan 
        deposits.--
                    ``(A) Pass-through insurance.--The Administration 
                shall provide pass-through share insurance for the 
                deposits or shares of any employee benefit plan, 
                subject to subparagraph (B).
                    ``(B) Prohibition on acceptance of deposits.--An 
                insured credit union that is not well capitalized or 
                adequately capitalized may not accept employee benefit 
                plan deposits.
                    ``(C) Definitions.--For purposes of this paragraph, 
                the following definitions shall apply:
                            ``(i) Capital standards.--The terms `well 
                        capitalized' and `adequately capitalized' have 
                        the same meanings as in section 216(c), as 
                        added by section 301 of the Credit Union 
                        Membership Access Act (Public Law 105-219, 112 
                        Stat. 931).
                            ``(ii) Employee benefit plan.--The term 
                        `employee benefit plan'--
                                    ``(I) has the meaning given to such 
                                term in section 3(3) of the Employee 
                                Retirement Income Security Act of 1974;
                                    ``(II) includes any plan described 
                                in section 401(d) of the Internal 
                                Revenue Code of 1986; and
                                    ``(III) includes any eligible 
                                deferred compensation plan described in 
                                section 457 of the Internal Revenue 
                                Code of 1986.
                            ``(iii) Pass-through share insurance.--The 
                        term `pass-through share insurance' means, with 
                        respect to an employee benefit plan, insurance 
                        coverage provided on a pro rata basis to the 
                        participants in the plan, in accordance with 
                        the interest of each participant.
            ``(5) Standard maximum share insurance amount defined.--For 
        purposes of this subsection, the term `standard maximum share 
        insurance amount' means, until the end of the 270-day period 
        beginning on the date of enactment of the Deposit Insurance 
        Reform Act of 2005, $100,000.
            ``(6) Inflation adjustment.--
                    ``(A) In general.--As of January 1, 2010, and as of 
                the 1st day of each subsequent 5-year period, the 
                standard maximum share insurance amount payable to any 
                member of an insured credit union shall be increased by 
                the product of--
                            ``(i) $100,000; and
                            ``(ii) the ratio of the value of the 
                        Personal Consumption Expenditures Chain-Type 
                        Index (or any successor index thereto), 
                        published by the Department of Commerce, as in 
                        effect on the date of the adjustment under this 
                        clause.
                    ``(B) Limitation on adjustments.--If the 
                application of subparagraph (A) would result in any 
                decrease in the standard maximum share insurance amount 
                in effect on the date of the adjustment under clause 
                (i), the standard maximum share insurance amount shall 
                remain unchanged until the next scheduled 5-year 
                adjustment that does not result in any such decrease.
                    ``(C) Rounding.--If the amount determined under 
                subparagraph (B) for any period is not a multiple of 
                $10,000, the amount so determined shall be rounded to 
                the nearest $10,000.
                    ``(D) Publication.--Not later than January 31 of 
                the 1st year of each 5-year period referred to in 
                subparagraph (A), the Board shall publish in the 
                Federal Register the standard maximum share insurance 
                amount and the amount of share insurance coverage under 
                paragraph (3) that may be due to any member at an 
                insured credit union during that 5-year period.''; and
                    (C) in paragraph (3), by striking ``$100,000 per 
                account'' and inserting the following: ``$250,000 per 
                account, which amount shall be subject to inflation 
                adjustments in the same manner as under paragraph (6) 
                with respect to the standard maximum share insurance 
                amount (as determined under paragraph (5), except that 
                `$250,000' shall be substituted for the amount 
                specified in paragraph (5)(A)(i) for purposes of this 
                paragraph).''.
            (2) Technical amendment.--Section 202(h) of the Federal 
        Credit Union Act (12 U.S.C. 1782(h)) is amended by striking 
        ``207(c)(1)'' and inserting ``207(k)''.
    (c) Effective Date.--Except as otherwise specifically provided in 
this section or the amendments made by this section, this section and 
such amendments shall become effective on the effective date of the 
regulations required under section 205(a)(2), relating to the 
implementation of deposit insurance increases under this section.

SEC. 203. DESIGNATED RESERVE RATIO.

    (a) In General.--
            (1) Amendment to section 7.--Section 7(b)(3) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1817(b)(3)) is amended to read 
        as follows:
            ``(3) Designated reserve ratio.--
                    ``(A) Action by the board.--
                            ``(i) In general.--Before the beginning of 
                        each calendar year, the Board of Directors 
                        shall, subject to clause (ii)--
                                    ``(I) designate the reserve ratio 
                                applicable to the Deposit Insurance 
                                Fund for that year; and
                                    ``(II) publish the reserve ratio so 
                                designated.
                            ``(ii) Rulemaking.--Any change to the 
                        designated reserve ratio for any calendar year 
                        shall be made pursuant to section 553 of title 
                        5, United States Code.
                    ``(B) Range.--The reserve ratio designated by the 
                Board of Directors for any year--
                            ``(i) may not exceed 1.50 percent of 
                        aggregate estimated insured deposits; and
                            ``(ii) may not be less than 1.0 percent of 
                        aggregate estimated insured deposits.
                    ``(C) Factors.--In designating a reserve ratio for 
                any year, the Board of Directors shall--
                            ``(i) take into account the risk of losses 
                        to the Deposit Insurance Fund in that year and 
                        in future years;
                            ``(ii) take into account economic 
                        conditions generally affecting insured 
                        depository institutions, to provide for an 
                        increase in the designated reserve ratio during 
                        more favorable economic conditions and to 
                        provide for a decrease in the designated 
                        reserve ratio during less favorable economic 
                        conditions, notwithstanding the increased risks 
                        of loss that may exist during such less 
                        favorable conditions, as determined to be 
                        appropriate by the Board;
                            ``(iii) seek to prevent sharp swings in the 
                        assessment rates for insured depository 
                        institutions; and
                            ``(iv) take into account such other factors 
                        as the Board of Directors may determine to be 
                        appropriate, consistent with the requirements 
                        of this subparagraph.''.
            (2) Technical and conforming amendments.--Section 3(y) of 
        the Federal Deposit Insurance Act (12 U.S.C. 1813), as added by 
        this Act, is amended by adding at the end the following:
            ``(2) Reserve ratio.--The term `reserve ratio' means the 
        ratio of the fund balance of the Deposit Insurance Fund to 
        aggregate estimated insured deposits held in all insured 
        depository institutions.
            ``(3) Designated reserve ratio.--The term `designated 
        reserve ratio' means the reserve ratio designated by the Board 
        of Directors under section 7(b)(3).''.
            (3) Effective date.--Subject to paragraph (4), this 
        subsection and the amendments made by this subsection shall 
        become effective on the effective date of the regulations 
        required under section 205(a)(1), relating to designation of 
        the reserve ratio by the Board.
            (4) Designation of initial reserve ratio for deposit 
        insurance fund.--During the period beginning on the effective 
        date of the merger of the deposit insurance funds under section 
        102, and ending on the effective date of final regulations 
        designating the reserve ratio, as required by section 
        205(a)(1), the designated reserve ratio of the Deposit 
        Insurance Fund shall continue to be determined pursuant to 
        section 7(b)(2)(A)(iv), as in effect on the day before the 
        effective date of the merger under section 102.
    (b) Requirements Applicable to Any Modification of the Risk-Based 
Assessment System.--Section 7(b)(1) of the Federal Deposit Insurance 
Act (12 U.S.C. 1817(b)(1)) is amended by adding at the end the 
following:
                    ``(E) Requirements applicable to any modification 
                of the risk-based assessment system.--
                            ``(i) In general.--In revising or modifying 
                        the risk-based assessment system at any time 
                        after the date of enactment of the Deposit 
                        Insurance Reform Act of 2005, the Board of 
                        Directors--
                                    ``(I) may not make any change to 
                                the information collected from or 
                                required to be retained by insured 
                                depository institutions solely for 
                                purposes of the assessment risk 
                                classification, as defined by 
                                regulations of the Board, if the change 
                                would result in the imposition of an 
                                overall greater regulatory or reporting 
                                burden on insured depository 
                                institutions than was the case before 
                                that date of enactment; and
                                    ``(II) may implement any such 
                                revision or modification in final form 
                                only after notice and opportunity for 
                                comment.
                            ``(ii) Rule of construction.--An increase 
                        in an assessment rate or a revision of the 
                        assessment base shall not be considered to be a 
                        revision or modification resulting in greater 
                        regulatory or reporting burden for purposes of 
                        this subparagraph.''.

SEC. 204. ASSESSMENT CREDITS AND DIVIDENDS.

    (a) In General.--Section 7(e) of the Federal Deposit Insurance Act 
(12 U.S.C. 1817(e)) is amended to read as follows:
    ``(e) Credits and Dividends.--
            ``(1) One-time credit based on total assessment base at 
        year-end 1996.--
                    ``(A) In general.--The Board of Directors shall, by 
                regulation, provide for a credit to each insured 
                depository institution that was in existence on 
                December 31, 1996, and that had paid a deposit 
                insurance assessment prior to that date (or a successor 
                insured depository institution), based on the 
                assessment base of the institution on that date, as 
                compared to the combined aggregate assessment base of 
                all such institutions, taking into account such factors 
                as the Board may determine to be appropriate.
                    ``(B) Credit limit.--The aggregate amount of 
                credits available under subparagraph (A) to all insured 
                depository institutions that are eligible for the 
                credit shall not exceed the amount that the Corporation 
                could collect if it imposed an assessment of 9 basis 
                points on the combined assessment base of the Bank 
                Insurance Fund and the Savings Association Insurance 
                Fund as of December 31, 2001.
                    ``(C) Application of credits.--The amount of a 
                credit to any insured depository institution under this 
                paragraph may be applied by the Corporation to those 
                portions of the assessments under subsection (b) 
                applicable to that institution which become due for 
                assessment periods beginning after the effective date 
                of regulations required by subparagraph (A).
                    ``(D) Challenges to credit amounts.--The 
                regulations required by subparagraph (A) shall include 
                provisions allowing an insured depository institution a 
                reasonable opportunity to challenge administratively 
                the amount of its credit under this paragraph. The 
                determination of the Corporation of the amount of the 
                credit following such challenge shall be final, and not 
                subject to judicial review.
            ``(2) Assessment credits.--
                    ``(A) Authority.--The Board of Directors shall, by 
                regulation, establish the qualifications and procedures 
                under which the Corporation would apply assessment 
                credits for the assessment periods beginning on or 
                after the first assessment period to which a credit 
                under paragraph (1) applies.
                    ``(B) Criteria for determination.--In determining 
                whether to provide assessment credits under this 
                paragraph and in what amounts, the Board of Directors 
                shall take into account the factors for setting 
                assessments under subsection (b)(2) and the factors for 
                designating the reserve ratio under subsection (b)(3).
            ``(3) Dividends.--
                    ``(A) Reserve ratio in excess of 1.50 percent of 
                estimated insured deposits.--The Corporation shall 
                provide cash dividends to insured depository 
                institutions in accordance with this paragraph if the 
                reserve ratio of the Deposit Insurance Fund exceeds the 
                maximum amount established under subsection 
                (b)(3)(B)(i), to the extent of that excess amount.
                    ``(B) Amount equal to or in excess of 1.40 percent 
                of estimated insured deposits and not more than 1.50 
                percent.--The Corporation shall provide cash dividends 
                to insured depository institutions in accordance with 
                this paragraph if the reserve ratio of the Deposit 
                Insurance Fund equals or exceeds 1.40 and is not more 
                than 1.50 percent, and that amount shall equal 50 
                percent of the amount in excess of the amount required 
                to maintain the reserve ratio at 1.40 percent of the 
                estimated insured deposits.
                    ``(C) Limitation.--The Board of Directors may 
                suspend or limit dividends paid under this paragraph if 
                the Board determines in writing that--
                            ``(i) a significant risk of losses to the 
                        Deposit Insurance Fund exists over the next 
                        one-year period; and
                            ``(ii) it is likely that such losses will 
                        be sufficiently high as to justify a finding by 
                        the Board that the reserve ratio should 
                        temporarily exceed the maximum amount 
                        established under subsection (b)(3)(B)(i).
                    ``(D) Considerations.--In making a determination 
                under subparagraph (B), the Board shall consider--
                            ``(i) national and regional conditions and 
                        their impact on insured depository 
                        institutions;
                            ``(ii) potential problems affecting insured 
                        depository institutions or a specific group or 
                        type of depository institution;
                            ``(iii) the degree to which the contingent 
                        liability of the Corporation for anticipated 
                        failures of insured institutions adequately 
                        addresses concerns over funding levels in the 
                        Deposit Insurance Fund; and
                            ``(iv) any other factors that the Board 
                        determines is appropriate.
                    ``(E) Report to congress.--
                            ``(i) Submission.--Any determination under 
                        subparagraph (B) shall be submitted to the 
                        Committee on Banking, Housing, and Urban 
                        Affairs of the Senate and the Committee on 
                        Financial Services of the House of 
                        Representatives, not later than 270 days after 
                        making such determination.
                            ``(ii) Content.--The report submitted under 
                        clause (i) shall include--
                                    ``(I) a complete explanation for 
                                the determination; and
                                    ``(II) a discussion of the factors 
                                required to be considered under 
                                subparagraph (C).
                    ``(F) Review of determination.--
                            ``(i) Annual review.--A determination to 
                        suspend or limit dividends under subparagraph 
                        (B) shall be reviewed by the Board of Directors 
                        annually.
                            ``(ii) Action by board.--Based on each 
                        annual review under clause (i), the Board of 
                        Directors shall either renew or remove a 
                        determination to suspend or limit dividends 
                        under subparagraph (B), or shall make a new 
                        determination in accordance with this 
                        paragraph. Unless justified under the terms of 
                        the renewal or new determination, any amount as 
                        is in the Fund in excess of the amount required 
                        to maintain the reserve ratio at the maximum 
                        amount established under subsection 
                        (b)(3)(B)(i) shall be paid as dividends to 
                        insured depository institutions in accordance 
                        with this paragraph.''.
    (b) Effective Date.--The amendments made by this section shall 
become effective on the effective date of the regulations required to 
be issued under section 205(a)(2), relating to implementation of the 
one-time assessment credit.

SEC. 205. REGULATIONS REQUIRED.

    (a) In General.--Not later than 270 days after the date of 
enactment of this Act, the Board shall issue final regulations, in 
accordance with section 553 of chapter 5 of title 5, United States 
Code--
            (1) designating the reserve ratio for the Deposit Insurance 
        Fund in accordance with section 7(b)(3) of the Federal Deposit 
        Insurance Act, as amended by section 203 of this Act, which 
        regulations shall become effective not later than 90 days after 
        the date of their publication in final form;
            (2) implementing increases in deposit insurance coverage in 
        accordance with the amendments made by section 202, which 
        regulations shall become effective not later than 90 days after 
        the date of their publication in final form;
            (3) implementing the one-time assessment credit to certain 
        insured depository institutions in accordance with section 
        7(e)(2) of the Federal Deposit Insurance Act, as amended by 
        section 204 of this Act;
            (4) establishing the qualifications and procedures under 
        which the Corporation may provide ongoing assessment credits, 
        under section 7(e)(3) of the Federal Deposit Insurance Act, as 
        amended by section 204 of this Act; and
            (5) providing for assessments under section 7 of the 
        Federal Deposit Insurance Act, as amended by this Act, which 
        regulations shall become effective on the effective date of the 
        regulations required by paragraph (3).
    (b) Savings Clause.--
            (1) In general.--Nothing in this Act or the amendments made 
        by this Act shall be construed to affect the authority of the 
        Corporation with regard to the setting or collection of deposit 
        insurance assessments prior to the effective date of any 
        regulations required under subsection (a).
            (2) Preservation of minimum assessment provision.--
        Subparagraph (E) of section 7(b)(2) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1817(b)(2)), as in effect on the day 
        before the effective date of title I of this Act, shall 
        continue to apply with respect to deposit insurance assessments 
        imposed prior to the effective date of the regulations required 
        under subsection (a)(5) of this section.

SEC. 206. STUDIES OF POTENTIAL CHANGES TO THE FEDERAL DEPOSIT INSURANCE 
              SYSTEM.

    (a) Study and Report by FDIC and NCUA.--
            (1) Study.--The Board of Directors of the Federal Deposit 
        Insurance Corporation and the National Credit Union 
        Administration Board shall each conduct a study of--
                    (A) the feasibility of increasing the limit on 
                deposit insurance for deposits of municipalities and 
                other units of general local government, and the 
                potential benefits and the potential adverse 
                consequences that may result from any such increase; 
                and
                    (B) the feasibility of establishing a voluntary 
                deposit insurance system for deposits in excess of the 
                maximum amount of deposit insurance for any depositor, 
                and the potential benefits and the potential adverse 
                consequences that may result from the establishment of 
                any such system.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Board of Directors of the Federal 
        Deposit Insurance Corporation and the National Credit Union 
        Administration Board shall each submit a report to the Congress 
        on the study required under paragraph (1), containing the 
        findings and conclusions of the reporting agency, together with 
        such recommendations for legislative or administrative changes 
        as the agency may determine to be appropriate.
    (b) Study and Report Regarding Appropriate Reserve Ratio.--
            (1) Study.--The Corporation shall conduct a study on the 
        feasibility of using actual deposits rather than estimated 
        insured deposits in calculating the reserve ratio of the 
        Deposit Insurance Fund.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Board shall submit a report to 
        Congress on the results of the study required under paragraph 
        (1), together with such recommendations for legislative or 
        administrative actions as may be determined to be appropriate.

SEC. 207. EFFECTIVE DATE.

    Except as otherwise specifically provided in this title, this title 
and the amendments made by this title shall become effective on the 
date of enactment of this Act.
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