[Congressional Record (Bound Edition), Volume 151 (2005), Part 6]
[House]
[Pages 8592-8610]
[From the U.S. Government Publishing Office, www.gpo.gov]




              FEDERAL DEPOSIT INSURANCE REFORM ACT OF 2005

  The SPEAKER pro tempore. Pursuant to House Resolution 255 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the State of the Union for the consideration of the bill, H.R. 1185.

                              {time}  1417


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 1185) to reform the Federal deposit insurance system, and for 
other purposes, with Mr. Bass in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from Ohio (Mr. Oxley) and the 
gentlewoman from New York (Mrs. Maloney) each will control 30 minutes.
  The Chair recognizes the gentleman from Ohio (Mr. Oxley).
  Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I rise in support of H.R. 1185, the Federal Deposit 
Insurance Reform Act of 2005. This bipartisan legislation preserves the 
value of insured deposits at America's banks, thrifts and credit 
unions, advances the national priority of enhancing retirement security 
for all Americans, and ensures that the benefits and costs of deposit 
insurance are allocated equitably and fairly among financial 
institutions.
  Federal deposit insurance was first established in 1934 during the 
Great Depression and has served for over 70 years as a source of 
stability in the banking system and a valued safety net for depositors. 
Deposits in banks and savings associations are covered either by the 
Bank Insurance Fund or the Savings Association Insurance Fund, while 
the deposits of America's 85 million credit union members are insured 
by the National Credit Union Share Insurance Fund.
  Federal deposit insurance serves as a guarantee to depositors in U.S. 
depository institutions that up to $100,000 will be available to them 
in the event that their institution should ever fail. It both protects 
depositors from a sudden and unforeseen loss of wealth and insulates 
the economy from the consequences of a loss of liquidity in the banking 
system.
  Shortly after I became chairman of the newly formed Committee on 
Financial Services in the 107th Congress, the FDIC, the Federal agency 
responsible for administering the deposit insurance program, 
recommended a number of reforms to the system to address structural 
imbalances that had emerged since the last major overhaul of deposit 
insurance following the savings and loan crisis of the late 1980s and 
early 1990s.
  The gentleman from Alabama (Mr. Bachus), the chairman of the 
Subcommittee on Financial Institutions and Consumer Credit, got to work 
holding extensive hearings and drafting comprehensive legislation 
incorporating the FDIC's recommendations

[[Page 8593]]

and making other needed changes to the system. The legislation that 
resulted from the efforts of the gentleman from Alabama passed the 
House with well over 400 votes in the 107th Congress and by an even 
larger margin in the 108th.
  With the other body having twice failed to act on the legislation 
approved overwhelmingly by this House, we are back this year with high 
hopes that the third time will truly be the charm in enacting this 
critically important legislation. The reasons for reforming the deposit 
insurance system remain every bit as compelling today as they were 
almost 4 years ago when we first began to climb this mountain.
  By merging the BIF and the SAIF into a single deposit insurance fund, 
H.R. 1185 will create administrative efficiencies and promote 
fundamental fairness in the system. By giving the FDIC more flexible 
tools for managing the insurance funds according to changing economic 
conditions, while at the same time ensuring that funds are returned to 
the industry in the form of rebates and credits when circumstances 
warrant, H.R. 1185 will promote economic stability and address the 
system's current bias toward charging excessive premiums at ``down'' 
points in the business cycle. All of these reforms command broad 
consensus among banking regulators and in the banking industry, as well 
as in the House.
  On the issue of deposit insurance coverage levels, which have now 
gone a record 25 years without being adjusted for inflation, the 
legislation of the gentleman from Alabama provides for incremental 
increases that promote retirement security and help to keep municipal 
deposits in the communities where they originated to serve as a funding 
source for loans and other development initiatives.
  All of us recognize that the increased coverage levels prescribed in 
the House bill are what have blocked its progress in the other body, 
and I have therefore indicated that I am willing to entertain 
compromise on that issue if it is the price of achieving the other 
important reforms contained in this legislation.
  That said, it should also be noted that H.R. 1185's increase in base 
deposit insurance coverage from $100,000 to $130,000 hardly constitutes 
a radical expansion of the deposit insurance safety net. If coverage 
had merely kept pace with inflation since 1980 when coverage was last 
updated, it would now be well over $200,000. Even going all the way 
back to the $40,000 coverage amount in effect in 1974 and indexing for 
inflation from that level yields a coverage level well above $140,000.
  Let me conclude by commending Chairman Bachus for his leadership and 
persistence in pursuing this legislation over the course of three 
Congresses. I also want to thank our committee's ranking member, the 
gentleman from Massachusetts (Mr. Frank), who has championed several of 
the specific reforms contained in this bill and has acted throughout 
the process in a spirit of bipartisan cooperation that has become the 
hallmark of our committee's work in recent years.
  Mr. Chairman, I reserve the balance of my time.
  Mrs. MALONEY. Mr. Chairman, I yield myself such time as I may 
consume.
  I rise in strong support of the Federal Deposit Insurance Reform Act 
of 2005. This is a strong bipartisan effort. I commend the leadership 
of Chairman Oxley and Ranking Member Frank, as well as Subcommittee 
Chair Bachus and Ranking Member Sanders. This will be, hopefully, the 
third time that this Congress has passed this legislation. It has 
enjoyed broad bipartisan support.
  Federal deposit insurance, established during the Great Depression to 
restore confidence in the Nation's troubled banking system, has served 
our country well; but no system is perfect, and Congress has 
periodically revised our deposit insurance laws in response to changing 
economic and industry conditions. There is a growing consensus 
triggered in part by recommendations by the Federal Deposit Insurance 
Corporation, FDIC, that deposit insurance is overdue for needed 
structural reform.
  H.R. 1185 would merge the Bank Insurance Fund, BIF, and the Savings 
Association Insurance Fund, SAIF, into a single fund covering all banks 
and thrifts; increase per-account coverage levels from $100,000 to 
$130,000; and adjust that coverage for inflation every 5 years 
beginning in 2007; and double the $130,000 coverage amount in the case 
of certain retirement accounts, including IRAs and 401(k)s. Providing 
$260,000 in deposit insurance coverage for retirement accounts is 
critically important in an era when many Americans have accumulated 
retirement nest eggs that far exceed $100,000, and when, according to 
FDIC estimates, there is more than $200 billion in IRA accounts alone 
in this Nation's banking system.
  Several high-profile bank failures in recent years have given many 
Americans a rude awakening as they discover that amounts in their 
retirement accounts above the $100,000 coverage limit are uninsured.
  The bill also raises coverage levels on in-state, municipal or public 
deposits. This will have the effect of encouraging local government 
agencies to keep more of their deposits in the local communities where 
the funds were generated, thus promoting economic growth in those 
areas.
  Finally, the bill fully implements a provision enacted more than a 
decade ago to give banks a discount on their deposit insurance premiums 
for deposits attributable to so-called basic banking accounts which 
provide a financial lifeline for low-income families that are currently 
without bank coverage.
  This has strong bipartisan support. This legislation passed this body 
last year with a vote of 411 to 11, and this year's effort likewise 
enjoys very strong bipartisan support.
  Mr. Chairman, I reserve the balance of my time.
  Mr. BACHUS. Mr. Chairman, I yield such time as he may consume to the 
gentleman from Ohio (Mr. Gillmor).
  Mr. GILLMOR. I thank the gentleman for yielding me this time.
  Mr. Chairman, as an original cosponsor of H.R. 1185, I am 
particularly pleased to see that this important measure again 
incorporates a measure that I introduced in February, H.R. 544, the 
Municipal Deposit Insurance Protection Act of 2005. Currently, towns, 
counties and school districts are faced with a hard choice when 
deciding where to place their deposits. Local officials care about 
their communities, and they would like to foster economic development 
by putting their funds in local banks. However, without the guarantee 
of FDIC coverage, they are often forced instead to put their deposits 
in out-of-state institutions.
  This bill increases coverage for local government deposits equal to 
the lesser of $2 million or $130,000 plus 80 percent of the amount of 
deposits in excess of the new standard. Providing this essential 
coverage will help local communities keep public moneys in their 
neighborhood, improving the economic climate by enabling local banks to 
offer more loans for cars, homes, education, and other community needs.
  In 2002, the FDIC closed a bank in my district, the Oakwood Deposit 
Bank. Local municipalities and other public entities that held deposits 
at that institution were put at risk due to the $100,000 FDIC coverage. 
This risk is too high for many communities in this country, and it can 
have a devastating effect on local budgets. The community in Oakwood is 
still feeling the effects of this failure. The village was forced to 
miss a Federal loan payment for its sewers and was forced to lay off 
municipal employees, all because of the funds it lost. Wayne Trace 
local school district and Paulding County Hospital were also harmed by 
this lack of coverage.
  This legislation will enable local government funds to be retained in 
the local area from which they came. It will help the economy of those 
areas by being used for installment loans, mortgages, and small 
business loans.
  Again, I want to commend Chairman Oxley and Chairman Bachus for 
bringing up this important bill, and I look forward to its passage.
  Mrs. MALONEY. Mr. Chairman, I yield such time as he may consume to

[[Page 8594]]

the gentleman from New York (Mr. Meeks).
  Mr. MEEKS of New York. Mr. Chairman, I would like to recognize, 
first, Chairman Oxley and Ranking Member Frank for their work to bring 
this overdue bill to the floor of the House. This is not the first time 
that this bill has passed through committee with broad bipartisan 
support, but hopefully this time we can work with the other body to 
make this law.
  The financial services industry is one of the driving engines of our 
economy, and the banking industry in particular is not only a key 
source of financing for consumer purchases like homes and cars or 
business purchases such as equipment and facilities. It is also the 
means by which the Federal Reserve implements monetary policy to 
stabilize our economy. Considering the vital role that banks, both big 
and small, play in our economy, it is equally important to make certain 
that the Federal insurance which backs these institutions is operating 
under the most efficient rules.
  H.R. 1185 will merge the Bank Insurance Fund and the Savings 
Association Insurance Fund into one strong fund. It will increase 
deposit insurance on individual accounts from $100,000 to $130,000, 
increases coverage on certain retirement accounts to $260,000, and 
increases coverage on in-state municipal deposits to $2 million.
  One of its most important aspects is that it provides for a 50 
percent discount in the assessment rate for deposits attributable to 
lifeline deposit accounts, something, and I take my hat off to her, 
that the gentlewoman from the great State of California (Ms. Waters) 
has been working on for many, many years in support of people who are 
traditionally unbanked.
  Lastly, let me thank the gentleman from Alabama (Mr. Bachus) and the 
gentlewoman from Oregon (Ms. Hooley), who introduced the bill, and 
encourage Members from both sides of the aisle to vote ``yes'' on final 
passage.

                              {time}  1430

  Mr. BACHUS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, there are several things about this bill that I am not 
sure have been discussed or are as widely known by the Members, but the 
first thing I would say is that the legislation is supported by all the 
federal bank regulators. It is also supported by all the industry 
groups. And it does several things. It addresses inefficiencies in the 
present system and deficiencies in the present system.
  As far as deficiencies in the present system, one of the greatest is 
the fact that we have two different funds. The Savings Association 
Insurance Fund and the Bank Insurance Fund. All the Federal regulators 
have recommended combining those funds from the administrative cost 
savings and also because we do not want a situation where some of our 
institutions are paying certain basis points where others are not. We 
want more equity there so it gives no advantage for our thrifts over 
our banks or our banks over our thrifts.
  Another problem we have had increasingly is the problem of free 
riders. Since 1996, there have been no assessments of the banks for the 
Federal insurance, and as a result of that, we have had several large 
brokerage firms which have never paid into the fund, and what they are 
doing is setting up affiliate banks, six or eight or nine affiliate 
banks, and they are advertising $800,000 or $900,000 worth of federally 
insured deposits. In other words, people can deposit $800,000 or 
$900,000 into to their fund, and it is federally insured. This really 
is an inequity because they have never paid into the system and they 
are offering that something that smaller banks and other banks that do 
not set up these affiliates or string of affiliates and can only offer 
$100,000 of coverage; and, in fact, those banks or thrifts that are 
only offering $100,000 worth of coverage are actually paying and have 
paid for coverage for some of the large brokerage firms.
  And the Federal Reserve, the FDIC, and the industry have said that 
this ought to be corrected, and we do that in this bill. We do that in 
two ways. One is by requiring that everyone pay a minimum amount; 
number two, we increase the coverage; and number three, we allow more 
flexibility in when the premiums are charged. Right now when the bank 
reserves fall below 1.25 percent, the Federal Reserve actually has to 
start charging a premium, and then if the situation is not rectified 
within a year, they have to then start charging 23 basis points, and 
they have little discretion in this matter. The bank regulators and the 
industry have recommended that what we do as opposed to having a hard 
number that we give a range, or a discretionary range, and we have done 
that at 1.15 to 1.4.
  What this allows to happen is, if we think about it, there are no 
premiums being charged, and then all of a sudden we go into a recession 
and we start charging a premium, or 23 basis points, it actually can 
worsen the recession, and at the time when banks ought to be lending 
money, suddenly they are having to pay these premiums. The time to fund 
the insurance program and the insurance reserve is in good times.
  So what we have done in this bill is allow them to build up a reserve 
in the good times, and then when we come into a recessionary period and 
bank reserves start dropping, they have some discretion in not 
instituting a 23-basis-point charge on the banks. And policymakers and 
all the Federal bank regulators believe that this will not only 
strengthen the funds, but it will take away a bias against a down cycle 
that could actually make a down economic cycle worse.
  One of the things that is being debated, and the gentleman I am going 
to yield to next is going to be in opposition to the coverage increase, 
is the coverage increase. When we consider increasing the coverage, 
there have been two arguments against that. One was a ``moral hazard'' 
argument. The FDIC, in response to some people saying that if we raise 
the coverage, it will be a moral hazard, actually commissioned a study 
and appointed the vice chairman of the Federal Reserve, Alan Blinder, 
as the chairman of that study commission, and they came back and said 
because these are risk-based premiums, there is absolutely no validity 
to the moral hazard argument.
  If we think about it this way, what this is, is an insurance, and 
bank depositors pay a premium on their deposits for insurance coverage. 
And to argue that if that coverage is increased from $100,000 to 
$130,000 suddenly would cause reckless behavior, it would almost be 
like arguing that if I had automobile insurance and I had $100,000 
worth of automobile insurance on my automobile, and I raised that to 
$200,000 of insurance coverage that I would suddenly start driving more 
recklessly or be more prone to have accidents, and we know that when 
people insure, whether it is a deposit, an automobile, or a home, they 
are not any more apt to act in a reckless nature. So that argument has 
been shot down pretty uniformly.
  A second argument against it is that we do not need to increase it. 
But one of our last bank failures was a bank in Chicago, a medium-sized 
bank. And what we found, because we had not raised the coverage levels 
above $100,000 since 1980, we found over 700 customers of that bank 
lost a substantial amount of their deposits, and the reason they did 
that, if we think about what depositors do, we had several hundred of 
them that had an IRA account with that bank, and they had an IRA that 
was over $100,000, and they basically lost everything above $100,000. 
And one lady that was quoted in the Chicago Tribune said, The loss I 
sustained is going to be the difference between my having a retirement 
where I will not have to struggle, and now, basically having a bare 
bones retirement where I will have to struggle to make ends meet.
  We have another situation that we talked about in committee, and that 
was the fact that today many people are selling and buying houses, and 
when they do, they put the proceeds of that sale or the purchase price 
for that sale in a bank account. In 1980 the average price of a home 
was around $100,000. Today it is several times that

[[Page 8595]]

amount. So imagine that if one is closing on a house, they sell their 
house, they get a $400,000 or $300,000 check or even a $200,000 check 
for that house, and most Americans put their savings in a house, they 
go down to their bank and they deposit that check and the bank happens 
to fail.
  And every once in a while, a bank does fail like the one in Chicago. 
In that case, they had 12 people that had deposited the proceeds from 
the sale of their homes in the weeks before and they lost all of that 
money above $100,000. Some would say and some have said in opposing 
coverage increase that what Americans ought to do is when they sell a 
home, if they sell a home for $300,000, they ought to ask the closing 
attorney to write three $100,000 checks and they ought to deposit that 
in three different banks, or, if they are going to purchase a house, 
they ought to go to three different institutions and deposit that money 
in three different institutions, and then when they show up at the 
closing, they ought to write three different checks.
  We know as a practical matter, Mr. Chairman, that people are not 
going to do that, and we should not ask them to do that. What we ought 
to do is raise coverage levels to reflect realities today.
  The last time that coverage was increased in 1980, if we increased it 
for inflation today, it would be well over $180,000. Instead, we are 
only increasing it to $100,000 as a compromise. If we went back to not 
1980 but we went back to 1974, which was the time before that that it 
was increased $40,000, and if we had adjusted it in 1980, it would be 
over $200,000. If we disregarded that increase and went back to 1974, 
it would be $180,000. So we are actually playing catchup here, and we 
have used that smaller number in an attempt to compromise with those 
who objected to increasing it at all.
  I will say this: This bill passed with 111 votes the first time it 
was up, I think, but, anyway, I will get those statistics later, but I 
think it had 18 ``no'' votes the first time, 11 ``no'' votes the second 
time.
  Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  I appreciate the gentleman from Alabama's letting us butt into his 
conversation.
  I want to speak in favor of the bill. It is an example of the things 
that we do that are not controversial and are not exciting to a lot of 
people but are, in fact, very important for the proper functioning of 
the economy. This is an upgrading and an updating of the deposit 
insurance system. It is widely supported by financial institutions. 
There is a difference of opinion on one aspect, the coverage increase, 
but I will say that, while I support the bill as written and support 
the coverage increase, it is my hope that however that winds up, it 
will not lead to the demise of the bill. The bill is an important piece 
of legislation for improving the functioning of the banking system.
  I just also want to point out two things: There is a mistaken 
assumption abroad that somehow things have gotten so poisonous here 
that nothing ever happens. There are issues on which we disagree 
vehemently, but the fact that this bill is coming forward from the 
Committee on Financial Services with overwhelming support from the 
committee, disagreement on one specific point, is a refutation, that I 
think people ought to know that, no, it is not the case that we have 
been so embittered towards each other that we cannot function. This 
bill comes forward with support on both sides.
  It also, as was noted by the gentleman from New York who spoke 
earlier, contains a section that what we call lifeline banking. And not 
all banks in the world were having parties when that was included, but 
it is an important point to be made here. It is our job to pass 
legislation and to do things that help the financial system function. 
Banks are good institutions. They perform useful roles in our society. 
But there are also needs that individuals have, particularly lower 
income individuals, that are not going to be automatically taken care 
of by even the best functioning market, and our job, in part, is to 
advance measures that help the institutions function but at the same 
time provide a degree of fairness, a kind of minimum support, for 
people who will not automatically benefit from the general going 
forward.
  This bill is an example of that, and I want to say that the inclusion 
of this lifeline provision is very important. I appreciate the 
majority's accommodating the concern that people had, the gentlewoman 
from California (Ms. Waters), who pushed hardest for this; so I hope 
that this package will go forward as an example that even at times that 
are very contentious, we can work together on legislation that bridges 
some gaps and advances the system.

                              {time}  1445

  Mr. FRANK of Massachusetts. Mr. Chairman, I reserve the balance of my 
time.
  Mr. BACHUS. Mr. Chairman, I yield 5 minutes to the gentleman from 
California (Mr. Rohrabacher), who is in opposition to the bill.
  Mr. ROHRABACHER. Mr. Chairman, I rise in opposition to H.R. 1185, but 
I appreciate all the hard work that the gentleman from Alabama (Mr. 
Bachus) and the gentleman from Massachusetts (Mr. Frank) have done on 
this bill. I understand that they are very sincere in their efforts, 
but I have a strong philosophical opposition to what this bill 
represents and what it is all about.
  Let me note that if section 3 were taken out of this legislation, I 
could support the bill; but the heart of this bill is section 3, which 
is a 30 percent increase in the Federal deposit insurance rate. What we 
are talking about here is increasing Federal deposit insurance, the 
taxpayers' guaranteeing private accounts in private banks from $100,000 
to $130,000; for savings accounts I think it goes up to $240,000, 
$250,000, or is it $260,000; as well as $1 million, I believe, for 
community-type savings accounts.
  But the most important factor here is this: this system was set up to 
protect the little guy. It was set up to protect average Americans who 
are not saving hundreds of thousands of dollars, so that they could 
save $10,000, $20,000, $30,000 and not worry about having a bank 
default and close up on them and then losing that money.
  What has happened is a perversion of that basic premise. What has 
happened now is the taxpayers, the average person out there working is 
protecting the rich guy. We have the little guys now with their tax 
dollars protecting the rich guys who, at $100,000 in an account, and 
now they want to make it $130,000 in an account are protected by the 
taxpayers. It is not just one account, however. There are multiple 
accounts that these rich people use, so we are not just protecting 
$130,000. We are protecting $130,000 times 10 or 20, where they can 
place it in various banks. What we end up doing is having the little 
guy protecting the rich people in this society.
  And there is a downside to having this protection. Not only is it not 
fair, but the downside is people who invest their money, when it is 
guaranteed, will be less cautious about where they put their money. We 
have just heard from the gentleman from Alabama (Mr. Bachus) about the 
people who lost their money in a bank. Well, those people should have 
paid closer attention to that bank. The fact is that we are encouraging 
people to be frivolous where they are putting their money because we 
are guaranteeing it as taxpayers.
  This is exactly what led to the savings and loan debacle in the 
1980s. In 1980, before Ronald Reagan was elected President, this went 
from the early 1970s, from $10,000, to 1980 when they jumped it to 
$100,000 protection. All of a sudden, people could then invest with 
these multiple accounts, millions of dollars protected by the 
taxpayers.
  So what happened? What happened is, we have millions, billions of 
dollars now in our system being invested in the most irresponsible way. 
Because the banks and the savings and loans themselves, no matter what, 
they ended up paying more interest than they should have. The bad 
institutions were bringing down the good institutions, and the public 
was protected from any bad decision they made. We

[[Page 8596]]

ended up with a debacle, a financial debacle created by this increase 
in 1980 that ended up by the mid-1980s costing us tens of billions, 
maybe even $100 billion of the American taxpayers' money.
  We do not need this kind of irresponsibility. That is not what this 
program started out as. It has been perverted to be that now. Section 3 
is just that kind of perversion, where we end up now increasing it 
precipitously from $100,000 to $130,000. It should be basically back in 
the arena of the average American taxpayer instead of protecting the 
rich.
  So with that said, I can remember personally, just to note, I 
remember during the mid-1980s when I worked in the White House, a 
friend of mine from the Reagan administration was in charge of one of 
those institutions, savings and loans, and he was being attacked 
because he was not giving out enough loans to various people and 
various institutions that would be guaranteed. He was not giving out 
these guaranteed loans, and I called him up, I said, Well what is the 
matter? Are you not part of the team? We want to have a strong economy. 
He said, Dana, we are being put behind the eight ball. Every one of 
these things that we are giving out has a government guarantee because 
of this deposit insurance, and it is going to take us right down the 
road to economic hell.
  Well, that is exactly what happened, and we should not be going in 
that direction anymore. We should be doing a reversal, making the 
system more responsible, asking people to be more responsible with 
their money and where they put it and not having the middle-class 
taxpayer subsidizing rich people by guaranteeing wherever they would 
want to put their money.
  I oppose the amendment, and I will be proposing an amendment later 
on.
  Mr. FRANK of Massachusetts. Mr. Chairman, before I yield, I just 
would say sometimes we have debates about where does wealth begin and 
what is middle class, et cetera. I guess I would differ with the 
gentleman from California that if you have $100,000 in the bank, you 
are a little guy, but if you have $130,000, you are rich. I think that 
unduly compresses the middle class. I think much more is being made, 
frankly, over $30,000 than is deserved.
  Mr. Chairman, I yield 3 minutes to the gentlewoman from Oregon (Ms. 
Hooley).
  Ms. HOOLEY. Mr. Chairman, I thank the gentleman from Massachusetts 
for yielding me this time. I would also like to thank the gentleman 
from Ohio (Chairman Oxley) for his work. In addition, I would like to 
thank the gentleman from Alabama (Mr. Bachus) whose bill we have before 
us today who has done a tremendous job and recognize his staff for all 
of their hard work.
  The FDIC reform bill is truly a bipartisan piece of legislation that 
continues the bipartisan working style of the Committee on Financial 
Services that has allowed the committee to be extraordinarily 
productive.
  The FDIC Reform Act of 2005 contains needed reforms that will bring 
the deposit insurance system into the 21st century by enhancing the 
value of our insured deposits, improving retirement security for all 
Americans, and ensuring that the value, cost, and benefit of deposit 
insurance is shared equally.
  Most importantly, H.R. 1185 gives flexibility of the FDIC to manage 
the deposit insurance according to risk and economic conditions. No 
longer will we ask financial institutions to pay higher insurance 
premiums when banks can least afford to pay them and when funds are 
most needed for lending to jump-start our economic growth.
  H.R. 1185 updates the deposit insurance coverage levels for the first 
time in 25 years. I agree with my ranking member who said we are making 
a much bigger deal out of the $30,000.
  H.R. 1185 also updates deposit insurance coverage levels for the 
first time, as I said, in 25 years. It increases the maximum coverage 
from $100,000 to $130,000, doubles the amount of coverage for 
retirement funds to enhance the retirement security of our senior 
citizens and those planning for retirement, and indexes for inflation 
every 5 years as a way of preserving the value of the deposit insurance 
safety net. H.R. 1185 also increases coverage limits for in-state 
municipal deposits to $2 million or 80 percent of any deposits over 
$130,000, whichever is less.
  By extending municipal deposit coverage, this bill not only protects 
taxpayers from potential consequences of a failure of local financial 
institutions but promotes community development by encouraging local 
government agencies to keep their funds on deposit with a local 
financial institution, thereby making the funds available for lending 
back to the community. So it makes a lot of sense when we look at our 
small local banks.
  Finally, this bill takes the needed step of merging FDIC's Bank 
Insurance Fund and the Savings Association Insurance Fund, eliminating 
potential disparities in the premiums paid by banks and thrifts, and 
reducing the administrative burden of operating two separate insurance 
funds.
  This legislation will give Americans an even more stable and secure 
insurance system for deposits in their banks, thrifts, and credit 
unions. These needed reforms will bring the deposit insurance system 
into the 21st century by enhancing the value of our insured deposits, 
improving retirement security for all Americans, and ensuring that the 
value, cost, and benefit of deposit insurance is shared equally.
  I urge my colleagues to support the FDIC Reform Act of 2005.
  Mr. BACHUS. Mr. Chairman, I yield myself all remaining time.
  There are several things I think we need to say to correct the 
record. One was it was said by the gentleman in opposition that this 
was taxpayer guaranteed; and, in fact, these deposits are insured not 
by the taxpayer, but by the BIF and SAIF funds; and it is the 
depository that insures his own accounts. And for the taxpayer to pay 
one red cent, all assets of every federally insured financial 
institution would have to be exhausted before the taxpayer would have 
to pay one cent. In other words, all the assets of all of the federally 
insured banks and savings associations would have to be paid.
  And in that regard, I am sure the gentleman from California would 
agree that if that moment ever came, we would be, we would probably be 
in dire straights, and I certainly never anticipate that happening. It 
has never happened in the history of our country. The savings and loans 
were exhausted, not the banks. The BIF account has never been 
exhausted; the savings and loan account thing was exhausted because of 
failures of savings and loans.
  And if we say, as the gentleman said, that the reason why all the 
savings and loans failed is because we increased coverage from $100,000 
to $130,000, we did that for the banks and the credit unions at the 
same time. No credit unions failed; very few banks failed. In some 
States, no institutions failed, where in States like California, Texas, 
where you had weak regulation, weak oversight, several failed; or you 
had the oil patch in Texas where many of them failed.
  In fact, the cost to the taxpayer would have been greater had the 
first $100,000 of accounts not been insured. It would have been a much 
greater loss. Thank goodness the first $100,000 of accounts were 
insured. If we had another failure today, $130,000 would be insured, 
and we would have insurance for it. So to say that insurance coverage 
is taxpayer funded, the taxpayer is not funding this. If the taxpayer 
were funding it, his analogy would be right.
  And the last thing that he says, and he has said this, is that this 
was the cause of the savings and loans to fail. This has been looked at 
by this Congress, it has been looked at by the FDIC, it has been looked 
at by the Federal Reserve and, actually, I am going to introduce this. 
This is about 20 different reasons that government reports have causes 
for the failures of the S&Ls and on that list of 20, nowhere does it 
say because of an increase in coverage. In fact, the FBI submitted what 
they thought were the reasons, the FDIC submitted what they thought 
were the reasons, all the bank regulators, and nowhere on any of those 
lists do we find increase in coverage. In fact, what you do find is one 
study showed that taxpayer exposure was less because the funds were 
insured up to $100,000.

[[Page 8597]]

  Mr. Chairman, I will just simply close by saying that all the Federal 
bank regulators say that this legislation will strengthen and reform 
our Federal guarantee program for bank deposits and by saying that 
today, if you sell a house for $120,000 or $140,000 or $160,000 or 
$200,000 and you deposit the proceeds in your bank account, you are 
probably not a rich person by definition. If you decide to buy a house 
and you put $150,000 in the bank or transfer it or get a loan from a 
bank and you deposit it in your account, you lose that, you certainly 
would not be defined as rich. And if you have a 401(k) and you happen 
to have over $100,000 in it, that does not make you a rich person. In 
fact, that represents, for many people, their entire savings is a 
401(k); and, increasingly, those accounts are running over $100,000.

                              {time}  1500

  That is why the AARP and the Securities Investment Institute both 
endorsed this legislation.
  Mr. Chairman, I yield back the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 3 minutes to the 
gentlewoman from New York (Mrs. Maloney).
  Mrs. MALONEY. Mr. Chairman, I thank the gentleman for yielding the 
time and for his leadership as a whole.
  Mr. Chairman, I am very supportive of this outstanding bipartisan 
bill. I am supportive of the overwhelming majority of the provisions in 
it. It is long past due to merge the BIF and SAIF insurance funds, and 
additionally, eliminating the 23 basis point clip, and providing a new 
premium system that takes into account the past contributions of 
institutions are major steps forward.
  The bill includes a mechanism for determining credits for past 
contributions to the insurance funds that is based on an amendment that 
I cosponsored with former Representative Bereuter. This is a very, very 
important provision as a matter of fairness to institutions that 
recapitalized the funds, and I thank very much the gentleman from 
Alabama (Mr. Bachus) for including this balanced and important 
amendment in the base legislation.
  Despite the many very positive parts of this bill, I believe the 
immediate 30 percent increase in insurance coverage in the bill is a 
serious mistake. This coverage increase to $130,000 is opposed by many 
Federal financial service regulators, including Alan Greenspan. I would 
like to place in the Record his comments in opposition, and state that 
I support the bill overwhelming, but this provision I am opposed to.
  I thank the leadership and the ranking member for working in a 
balanced way to move this important legislation forward.
  Mr. FRANK of Massachusetts. Mr. Chairman, in a very impressive 
display of bipartisanship, I am now going to yield some of our time to 
the manager of the bill for the majority.
  Mr. Chairman, I yield such time as he may consume to the gentleman 
from Alabama (Mr. Bachus) as long as he does not talk about the 
Rohrabacher amendment.
  Mr. BACHUS. Mr. Chairman, I had one glaring oversight in this entire 
debate concerning the bill. And that is the fact that the gentlewoman 
from Oregon (Ms. Hooley) who really played a monumental part in this 
legislation over the past 2 or 3 years and actually was the original 
cosponsor of this legislation has not been recognized.
  I would like to commend her for her fine work on this bill. And I 
guess it is a credit to her and her personality, despite that oversight 
she did not call attention to my omission. And so I commend the 
gentlewoman from Oregon (Ms. Hooley). She is an outstanding Member of 
this body. And in this legislation, she deserves a lot of credit for 
its passage and its support.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, I thank the gentleman from Alabama (Mr. Bachus) for his 
great graciousness in what he had to say. And let me say in deference 
to the chairman of the committee, the gentleman from Ohio (Mr. Oxley) a 
great baseball leader, if you notice, I yielded to the gentleman from 
Alabama (Mr. Bachus), who then came back to this side to thank us.
  If you're scoring this, it is 3 to 6 to 3, I believe is the 
appropriate scoring.
  Mr. PAUL. Mr. Chairman, H.R. 1185, the Federal Deposit Insurance 
Reform Act, expands the federal government's unconstitutional control 
over the financial services industry and raises taxes on all financial 
institutions. Furthermore, this legislation could increase the 
possibility of future bank failures. Therefore, I must oppose this 
bill.
  I primarily object to the provisions in H.R. 1185 which may increase 
the premiums assessed on participating financial institutions. These 
``premiums,'' which are actually taxes, are the premier sources of 
funds for the Deposit Insurance Fund. This fund is used to bail out 
banks who experience difficulties meeting their commitments to their 
depositors. Thus, the deposit insurance system transfers liability for 
poor management decisions from those who made the decisions, to their 
competitors. This system punishes those financial institutions which 
follow sound practices, as they are forced to absorb the losses of 
their competitors. This also compounds the moral hazard problem created 
whenever government socializes business losses.
  In the event of a severe banking crisis, Congress will likely 
transfer funds from the general revenue into the Deposit Insurance 
Fund, which could make all taxpayers liable for the mistakes of a few. 
Of course, such a bailout would require separate authorization from 
Congress, but can anyone imagine Congress saying ``No'' to banking 
lobbyists pleading for relief from the costs of bailing out their 
weaker competitors?
  Government subsidies lead to government control, as regulations are 
imposed on the recipients of the subsidies in order to address the 
moral hazard problem. This is certainly the case in banking, which is 
one of the most heavily regulated industries in America. However, as 
George Kaufman, the John Smith Professor of Banking and Finance at 
Loyola University in Chicago, and co-chair of the Shadow Financial 
Regulatory Committee, pointed out in a study for the CATO Institutes, 
the FDIC's history of poor management exacerbated the banking crisis of 
the eighties and nineties. Professor Kaufman properly identifies a key 
reason for the FDIC's poor track record in protecting individual 
depositors: regulators have incentives to downplay or even cover-up 
problems in the financial system such as banking facilities. Banking 
failures are black marks on the regulators' records. In addition, 
regulators may be subject to political pressure to delay imposing 
sanctions on failing institutions, thus increasing the magnitude of the 
loss.
  Immediately after a problem in the banking industry comes to light, 
the media and Congress will inevitably blame it on regulators who were 
``asleep at the switch.'' Yet, most politicians continue to believe 
that giving the very regulators whose incompetence (or worst) either 
caused or contributed to the problem will somehow prevent future 
crises!
  The presence of deposit insurance and government regulations removes 
incentives for individuals to act on their own to protect their 
deposits or even inquire as to the health of their financial 
institutions. After all, why should individuals be concerned with the 
health of their financial institutions when the federal government is 
insuring banks following sound practices and has insured their 
deposits?
  Finally, I would remind my colleagues that the federal deposit 
insurance program lacks constitutional authority. Congress's only 
mandate in the area of money, and banking is to maintain the value of 
the money. Unfortunately, Congress abdicated its responsibility over 
monetary policy with the passage of the Federal Reserve Act of 1913, 
which allows the federal government to erode the value of the currency 
at the will of the central bank. Congress's embrace of fiat money is 
directly responsible for the instability in the banking system that 
created the justification for deposit insurance.
  In conclusion, Mr. Speaker, H.R. 1185 imposes new taxes on financial 
institutions, forces sound institutions to pay for the mistakes of 
their reckless competitors, increases the chances of taxpayers being 
forced to bail out unsound financial institutions, reduces individual 
depositors' incentives to take action to protect their deposits, and 
exceeds Congress's constitutional authority. I therefore urge my 
colleagues to reject this bill. Instead of extending this federal 
program, Congress should work to prevent the crises which justify 
government programs like deposit insurance, by fulfilling our 
constitutional responsibility to pursue sound monetary policies.
  Mr. HENSARLING. Mr. Chairman, I rise today in support of H.R. 1185, 
the Federal Deposit Insurance Reform Act of 2005. As a

[[Page 8598]]

member of the Financial Services Committee, I want to thank Chairman 
Oxley and Subcommittee Chairman Bachus for their work on this 
legislation and for acting quickly in this new Congress to address this 
matter of importance to banks and depositors alike.
  This legislation, which passed by a vote of 411-11 in the 108th 
Congress, will help to create a more stable, fair, and secure banking 
system. By combining the Banking Insurance Fund and the Savings 
Association Insurance Fund into one single fund, the risk that a couple 
of large institutions could fail and impair each fund is greatly 
reduced. Merging these funds will help to increase fairness in our 
banking system by eliminating the possibility that two institutions of 
similar sizes could essentially be paying different premiums. 
Furthermore, the merged fund will make reporting and accounting less 
burdensome for both the institutions and the FDIC.
  Our deposit insurance system plays a vital role in our economic 
security. This legislation will give the FDIC the necessary flexibility 
to respond to varying economic conditions, allowing them to properly 
price premiums to reflect risk. By eliminating the 23 basis point 
premium ``rate cliff' required under current law, more institutions 
will have more capital to invest in our economy.
  Although I support the majority of provisions of H.R. 1185, I do want 
to take this time to express my concerns with Section 3 of this 
legislation. This section of the bill would increase a financial 
institution's insurance limit for individual accounts from $100,000 to 
$130,000. Section 3 also doubles the coverage for retirement accounts 
to $260,000 and increases the coverage limit for municipal accounts to 
$2 million or 80 percent of any deposits over $130,000. I believe that 
arbitrarily increasing these limits will unnecessarily expose American 
taxpayers to the increased hazards associated with shifting risk from 
private institutions to the federal government. Further, such a 
provision is likely to decrease a depositor's concern for the financial 
well being of their bank while at the same time diminishing market 
discipline. It is my hope that these factors are given full 
consideration should H.R. 1185 be considered in conference with the 
Senate.
  Mr. Chairman, FDIC Chairman Powell stated in his testimony to the 
Financial Services Committee on March 17, 2005, that H.R. 1185 gives 
Congress an ``opportunity to remedy flaws in the deposit insurance 
system before those flaws cause actual damage either to the banking 
industry or our economy as a whole.'' As a member of that committee, I 
am glad to see this body act so expeditiously on this legislation, and 
I urge my colleagues to vote for H.R. 1185.
  Mr. CANTOR. Mr. Chairman, I rise today to speak in favor of the 
Federal Deposit Insurance Reform Act. This important piece of 
legislation modernizes the insurance funds on which Americans depend.
  The current amount of deposit insurance coverage has been the same 
since 1980, so it is important that we make these necessary increases 
to keep up with inflation and encourage people to save. This bill 
raises the coverage on savings and retirement accounts and gives 
reassurance to investors saving for their future.
  Increasing the amount of deposit insurance coverage will benefit all 
banks, small and large, by providing more certainty to the investment 
community. It is important that we give every American peace of mind 
when placing their money in our savings system.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield back the balance of 
my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill shall be considered by sections as an 
original bill for purpose of amendment, and each section is considered 
read.
  During consideration of the bill for amendment, the Chair may accord 
priority in recognition to a Member offering an amendment that he has 
printed in the designated place in the Congressional Record. Those 
amendments will be considered read.
  The Clerk will designate section 1.
  The text of section 1 is as follows:

                               H.R. 1185

       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 ``Federal 
     Deposit Insurance Reform 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. Merging the BIF and SAIF.
Sec. 3. Increase in deposit insurance coverage.
Sec. 4. Setting assessments and repeal of special rules relating to 
              minimum assessments and free deposit insurance.
Sec. 5. Replacement of fixed designated reserve ratio with reserve 
              range.
Sec. 6. Requirements applicable to the risk-based assessment system.
Sec. 7. Refunds, dividends, and credits from Deposit Insurance Fund.
Sec. 8. Deposit Insurance Fund restoration plans.
Sec. 9. Regulations required.
Sec. 10. Studies of FDIC structure and expenses and certain activities 
              and further possible changes to deposit insurance system.
Sec. 11. Bi-annual FDIC survey and report on increasing the deposit 
              base by encouraging use of depository institutions by the 
              unbanked.
Sec. 12. Technical and conforming amendments to the Federal Deposit 
              Insurance Act relating to the merger of the BIF and SAIF.
Sec. 13. Other technical and conforming amendments relating to the 
              merger of the BIF and SAIF.

  The CHAIRMAN. Are there any amendments to section 1?
  If not, the Clerk will designate section 2.
  The text of section 2 is as follows:

     SEC. 2. MERGING THE 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.
       (c) Effective Date.--This section shall take effect on the 
     first day of the first calendar quarter that begins after the 
     end of the 90-day period beginning on the date of the 
     enactment of this Act.

  Mr. OXLEY. Mr. Chairman, I ask unanimous consent that the remainder 
of the committee amendment in the nature of a substitute be printed in 
the Record and open to amendment at any point.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Ohio?
  There was no objection.
  The text of the remainder of the committee amendment in the nature of 
a substitute is as follows:

     SEC. 3. INCREASE IN DEPOSIT INSURANCE COVERAGE.

       (a) In General.--Section 11(a)(1) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(a)(1)) is amended--
       (1) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) Net amount of insured deposit.--The net amount due to 
     any depositor at an insured depository institution shall not 
     exceed the standard maximum deposit insurance amount as 
     determined in accordance with subparagraphs (C), (D), (E) and 
     (F) and paragraph (3).''; and
       (2) by adding at the end the following new subparagraphs:
       ``(E) Standard maximum deposit insurance amount defined.--
     For purposes of this Act, the term `standard maximum deposit 
     insurance amount' means--
       ``(i) until the effective date of final regulations 
     prescribed pursuant to section 9(a)(2) of the Federal Deposit 
     Insurance Reform Act of 2005, $100,000; and
       ``(ii) on and after such effective date, $130,000, adjusted 
     as provided under subparagraph (F).
       ``(F) Inflation adjustment.--
       ``(i) In general.--By April 1 of 2007, and the 1st day of 
     each subsequent 5-year period, the Board of Directors and the 
     National Credit Union Administration Board shall jointly 
     prescribe the amount by which the standard maximum deposit 
     insurance amount and the standard maximum share insurance 
     amount (as defined in section 207(k) of the Federal Credit 
     Union Act) applicable to any depositor at an insured 
     depository institution shall be increased by calculating the 
     product of--

       ``(I) $130,000; 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 of 
     December 31 of the year preceding the year in which the 
     adjustment is calculated under this clause, to the value of 
     such index as of the date this subparagraph takes effect.

       ``(ii) 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.
       ``(iii) Publication and report to the congress.--Not later 
     than April 5 of any calendar year in which an adjustment is 
     required to be

[[Page 8599]]

     calculated under clause (i) to the standard maximum deposit 
     insurance amount and the standard maximum share insurance 
     amount under such clause, the Board of Directors and the 
     National Credit Union Administration Board shall--

       ``(I) publish in the Federal Register the standard maximum 
     deposit insurance amount, the standard maximum share 
     insurance amount, and the amount of coverage under paragraph 
     (3)(A) and section 207(k)(3) of the Federal Credit Union Act, 
     as so calculated; and
       ``(II) jointly submit a report to the Congress containing 
     the amounts described in subclause (I).

       ``(iv) 6-month implementation period.--Unless an Act of 
     Congress enacted before July 1 of the calendar year in which 
     an adjustment is required to be calculated under clause (i) 
     provides otherwise, the increase in the standard maximum 
     deposit insurance amount and the standard maximum share 
     insurance amount shall take effect on January 1 of the year 
     immediately succeeding such calendar year.''.
       (b) Coverage for Certain Employee Benefit Plan Deposits.--
     Section 11(a)(1)(D) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(a)(1)(D)) is amended to read as follows:
       ``(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 (8)(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 interest of each participant.''.

       (c) Doubling of Deposit Insurance for Certain Retirement 
     Accounts.--Section 11(a)(3)(A) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(a)(3)(A)) is amended by 
     striking ``$100,000'' and inserting ``2 times the standard 
     maximum deposit insurance amount (as determined under 
     paragraph (1))''.
       (d) Increased Insurance Coverage for Municipal Deposits.--
     Section 11(a)(2) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(a)(2)) is amended--
       (1) in subparagraph (A)--
       (A) by moving the margins of clauses (i) through (v) 4 ems 
     to the right;
       (B) by striking, in the matter following clause (v), ``such 
     depositor shall'' and all that follows through the period; 
     and
       (C) by striking the semicolon at the end of clause (v) and 
     inserting a period;
       (2) by striking ``(2)(A) Notwithstanding'' and all that 
     follows through ``a depositor who is--'' and inserting the 
     following:
       ``(2) Municipal depositors.--
       ``(A) In general.--Notwithstanding any limitation in this 
     Act or in any other provision of law relating to the amount 
     of deposit insurance available to any 1 depositor--
       ``(i) a municipal depositor shall, for the purpose of 
     determining the amount of insured deposits under this 
     subsection, be deemed to be a depositor separate and distinct 
     from any other officer, employee, or agent of the United 
     States or any public unit referred to in subparagraph (E); 
     and
       ``(ii) except as provided in subparagraph (B), the deposits 
     of a municipal depositor shall be insured in an amount equal 
     to the standard maximum deposit insurance amount (as 
     determined under paragraph (1)).
       ``(B) In-state municipal depositors.--In the case of the 
     deposits of an in-State municipal depositor described in 
     clause (ii), (iii), (iv), or (v) of subparagraph (E) at an 
     insured depository institution, such deposits shall be 
     insured in an amount not to exceed the lesser of--
       ``(i) $2,000,000; or
       ``(ii) the sum of the standard maximum deposit insurance 
     amount and 80 percent of the amount of any deposits in excess 
     of the standard maximum deposit insurance amount.
       ``(C) Municipal deposit parity.--No State may deny to 
     insured depository institutions within its jurisdiction the 
     authority to accept deposits insured under this paragraph, or 
     prohibit the making of such deposits in such institutions by 
     any in-State municipal depositor.
       ``(D) In-state municipal depositor defined.--For purposes 
     of this paragraph, the term `in-State municipal depositor' 
     means a municipal depositor that is located in the same State 
     as the office or branch of the insured depository institution 
     at which the deposits of that depositor are held.
       ``(E) Municipal depositor.--In this paragraph, the term 
     `municipal depositor' means a depositor that is--'';
       (3) by striking ``(B) The'' and inserting the following:
       ``(F) Authority to limit deposits.--The''; and
       (4) by striking ``depositor referred to in subparagraph (A) 
     of this paragraph'' each place such term appears and 
     inserting ``municipal depositor''.
       (e) Technical and Conforming Amendment Relating to 
     Insurance of Trust Funds.--Paragraphs (1) and (3) of section 
     7(i) of the Federal Deposit Insurance Act (12 U.S.C. 1817(i)) 
     are each amended by striking ``$100,000'' and inserting ``the 
     standard maximum deposit insurance amount (as determined 
     under section 11(a)(1))''.
       (f) Other Technical and Conforming Amendments.--
       (1) Section 11(m)(6) of the Federal Deposit Insurance Act 
     (12 U.S.C. 1821(m)(6)) is amended by striking ``$100,000'' 
     and inserting ``an amount equal to the standard maximum 
     deposit insurance amount''.
       (2) Subsection (a) of section 18 of the Federal Deposit 
     Insurance Act (12 U.S.C. 1828(a)) is amended to read as 
     follows:
       ``(a) Insurance Logo.--
       ``(1) Insured depository institutions.--
       ``(A) In general.--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.
       ``(B) Statement to be included.--Each sign required under 
     subparagraph (A) shall include a statement that insured 
     deposits are backed by the full faith and credit of the 
     United States Government.
       ``(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.''.
       (3) Section 43(d) of the Federal Deposit Insurance Act (12 
     U.S.C. 1831t(d)) is amended by striking ``$100,000'' and 
     inserting ``an amount equal to the standard maximum deposit 
     insurance amount''.
       (4) Section 6 of the International Banking Act of 1978 (12 
     U.S.C. 3104) is amended--
       (A) by striking ``$100,000'' each place such term appears 
     and inserting ``an amount equal to the standard maximum 
     deposit insurance amount''; and
       (B) by adding at the end the following new subsection:
       ``(e) Standard Maximum Deposit Insurance Amount Defined.--
     For purposes of this section, the term `standard maximum 
     deposit insurance amount' means the amount of the maximum 
     amount of deposit insurance as determined under section 
     11(a)(1) of the Federal Deposit Insurance Act.''.
       (g) Conforming Change to Credit Union Share Insurance 
     Fund.--
       (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 consistently 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.'';
       (B) in paragraph (2)--
       (i) in subparagraph (A)--

       (I) in clauses (i) through (v), by moving the margins 4 ems 
     to the right;
       (II) in the matter following clause (v), by striking ``his 
     account'' and all that follows through the period; and
       (III) by striking the semicolon at the end of clause (v) 
     and inserting a period;

       (ii) by striking ``(2)(A) Notwithstanding'' and all that 
     follows through ``a depositor or member who is--'' and 
     inserting the following:
       ``(2) Municipal depositors or members.--
       ``(A) In general.--Notwithstanding any limitation in this 
     Act or in any other provision of law relating to the amount 
     of insurance available to any 1 depositor or member, deposits 
     or shares of a municipal depositor or member shall be insured 
     in an amount equal to the standard maximum share insurance 
     amount (as determined under paragraph (5)), except as 
     provided in subparagraph (B).

[[Page 8600]]

       ``(B) In-state municipal depositors.--In the case of the 
     deposits of an in-State municipal depositor described in 
     clause (ii), (iii), (iv), or (v) of subparagraph (E) at an 
     insured credit union, such deposits shall be insured in an 
     amount equal to the lesser of--
       ``(i) $2,000,000; or
       ``(ii) the sum of the standard maximum deposit insurance 
     amount and 80 percent of the amount of any deposits in excess 
     of the standard maximum deposit insurance amount.
       ``(C) Rule of construction.--No provision of this paragraph 
     shall be construed as authorizing an insured credit union to 
     accept the deposits of a municipal depositor in an amount 
     greater than such credit union is authorized to accept under 
     any other provision of Federal or State law.
       ``(D) In-state municipal depositor defined.--For purposes 
     of this paragraph, the term `in-State municipal depositor' 
     means a municipal depositor that is located in the same State 
     as the office or branch of the insured credit union at which 
     the deposits of that depositor are held.
       ``(E) Municipal depositor.--In this paragraph, the term 
     `municipal depositor' means a depositor that is--'';
       (iii) by striking ``(B) The'' and inserting the following:
       ``(F) Authority to limit deposits.--The''; and
       (iv) by striking ``depositor or member referred to in 
     subparagraph (A)'' and inserting ``municipal depositor or 
     member''; and
       (C) by adding at the end the following new paragraphs:
       ``(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.
       ``(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).
       ``(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.
       ``(D) Rule of construction.--No provision of this paragraph 
     shall be construed as authorizing an insured credit union to 
     accept the deposits of an employee benefit plan in an amount 
     greater than such credit union is authorized to accept under 
     any other provision of Federal or State law.
       ``(5) Standard maximum share insurance amount defined.--For 
     purposes of this Act, the term `standard maximum share 
     insurance amount' means--
       ``(A) until the effective date of final regulations 
     prescribed pursuant to section 9(a)(2) of the Federal Deposit 
     Insurance Reform Act of 2005, $100,000; and
       ``(B) on and after such effective date, $130,000, adjusted 
     as provided under section 11(a)(1)(F) of the Federal Deposit 
     Insurance Act.''.
       (2) Doubling of share insurance for certain retirement 
     accounts.--Section 207(k)(3) of the Federal Credit Union Act 
     (12 U.S.C. 1787(k)(3)) is amended by striking ``$100,000'' 
     and inserting ``2 times the standard maximum share insurance 
     amount (as determined under paragraph (1))''.
       (h) Effective Date.--This section and the amendments made 
     by this section shall take effect on the date the final 
     regulations required under section 9(a)(2) take effect.

     SEC. 4. SETTING ASSESSMENTS AND REPEAL OF SPECIAL RULES 
                   RELATING TO MINIMUM ASSESSMENTS AND FREE 
                   DEPOSIT INSURANCE.

       (a) Setting Assessments.--Section 7(b)(2) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended--
       (1) by striking subparagraphs (A) and (B) and inserting the 
     following new subparagraphs:
       ``(A) In general.--The Board of Directors shall set 
     assessments for insured depository institutions in such 
     amounts as the Board of Directors may determine to be 
     necessary or appropriate, subject to subparagraph (D).
       ``(B) Factors to be considered.--In setting assessments 
     under subparagraph (A), the Board of Directors shall consider 
     the following factors:
       ``(i) The estimated operating expenses of the Deposit 
     Insurance Fund.
       ``(ii) The estimated case resolution expenses and income of 
     the Deposit Insurance Fund.
       ``(iii) The projected effects of the payment of assessments 
     on the capital and earnings of insured depository 
     institutions.
       ``(iv) the risk factors and other factors taken into 
     account pursuant to paragraph (1) under the risk-based 
     assessment system, including the requirement under such 
     paragraph to maintain a risk-based system.
       ``(v) Any other factors the Board of Directors may 
     determine to be appropriate.''; and
       (2) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) Base rate for assessments.--
       ``(i) In general.--In setting assessment rates pursuant to 
     subparagraph (A), the Board of Directors shall establish a 
     base rate of not more than 1 basis point (exclusive of any 
     credit or dividend) for those insured depository institutions 
     in the lowest-risk category under the risk-based assessment 
     system established pursuant to paragraph (1). No insured 
     depository institution shall be barred from the lowest-risk 
     category solely because of size.
       ``(ii) Suspension.--Clause (i) shall not apply during any 
     period in which the reserve ratio of the Deposit Insurance 
     Fund is less than the amount which is equal to 1.15 percent 
     of the aggregate estimated insured deposits.''.
       (b) Assessment Recordkeeping Period Shortened.--Paragraph 
     (5) of section 7(b) of the Federal Deposit Insurance Act (12 
     U.S.C. 1817(b)) is amended to read as follows:
       ``(5) Depository institution required to maintain 
     assessment-related records.--Each insured depository 
     institution shall maintain all records that the Corporation 
     may require for verifying the correctness of any assessment 
     on the insured depository institution under this subsection 
     until the later of--
       ``(A) the end of the 3-year period beginning on the due 
     date of the assessment; or
       ``(B) in the case of a dispute between the insured 
     depository institution and the Corporation with respect to 
     such assessment, the date of a final determination of any 
     such dispute.''.
       (c) Increase in Fees for Late Assessment Payments.--
     Subsection (h) of section 18 of the Federal Deposit Insurance 
     Act (12 U.S.C. 1828(h)) is amended to read as follows:
       ``(h) Penalty for Failure to Timely Pay Assessments.--
       ``(1) In general.--Subject to paragraph (3), any insured 
     depository institution which fails or refuses to pay any 
     assessment shall be subject to a penalty in an amount not 
     more than 1 percent of the amount of the assessment due for 
     each day that such violation continues.
       ``(2) Exception in case of dispute.--Paragraph (1) shall 
     not apply if--
       ``(A) the failure to pay an assessment is due to a dispute 
     between the insured depository institution and the 
     Corporation over the amount of such assessment; and
       ``(B) the insured depository institution deposits security 
     satisfactory to the Corporation for payment upon final 
     determination of the issue.
       ``(3) Special rule for small assessment amounts.--If the 
     amount of the assessment which an insured depository 
     institution fails or refuses to pay is less than $10,000 at 
     the time of such failure or refusal, the amount of any 
     penalty to which such institution is subject under paragraph 
     (1) shall not exceed $100 for each day that such violation 
     continues.
       ``(4) Authority to modify or remit penalty.--The 
     Corporation, in the sole discretion of the Corporation, may 
     compromise, modify or remit any penalty which the Corporation 
     may assess or has already assessed under paragraph (1) upon a 
     finding that good cause prevented the timely payment of an 
     assessment.''.
       (d) Assessments for Lifeline Accounts.--
       (1) In general.--Section 232 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991 (12 U.S.C. 
     1834) is amended by striking subsection (c).
       (2) Clarification of rate applicable to deposits 
     attributable to lifeline accounts.--Section 7(b)(2)(H) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)(H)) is 
     amended by striking ``at a rate determined in accordance with 
     such Act'' and inserting ``at \1/2\ the assessment rate 
     otherwise applicable for such insured depository 
     institution''.
       (3) Regulations.--Section 232(a)(1) of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991 (12 U.S.C. 
     1834(a)(1)) is amended by striking ``Board of Governors of 
     the Federal Reserve System, and the''.
       (e) Technical and Conforming Amendments.--
       (1) Paragraph (3) of section 7(a) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1817(a)(3)) is amended by striking 
     the 3d sentence and inserting the following: ``Such reports 
     of condition shall be the basis for the certified statements 
     to be filed pursuant to subsection (c).''.
       (2) Subparagraphs (B)(ii) and (C) of section 7(b)(1) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1817(b)(1)) are each 
     amended by striking ``semiannual'' where such term appears in 
     each such subparagraph.
       (3) Section 7(b)(2) of the Federal Deposit Insurance Act 
     (12 U.S.C. 1817(b)(2)) is amended--
       (A) by striking subparagraphs (E), (F), and (G);
       (B) in subparagraph (C), by striking ``semiannual''; and
       (C) by redesignating subparagraph (H) (as amended by 
     subsection (e)(2) of this section) as subparagraph (E).
       (4) Section 7(b) of the Federal Deposit Insurance Act (12 
     U.S.C. 1817(b)) is amended by striking paragraph (4) and 
     redesignating paragraphs (5) (as amended by subsection (b) of 
     this section), (6), and (7) as paragraphs (4), (5), and (6) 
     respectively.
       (5) Section 7(c) of the Federal Deposit Insurance Act (12 
     U.S.C. 1817(c)) is amended--
       (A) in paragraph (1)(A), by striking ``semiannual'';
       (B) in paragraph (2)(A), by striking ``semiannual''; and
       (C) in paragraph (3), by striking ``semiannual period'' and 
     inserting ``initial assessment period''.
       (6) Section 8(p) of the Federal Deposit Insurance Act (12 
     U.S.C. 1818(p)) is amended by striking ``semiannual''.

[[Page 8601]]

       (7) Section 8(q) of the Federal Deposit Insurance Act (12 
     U.S.C. 1818(q)) is amended by striking ``semiannual period'' 
     and inserting ``assessment period''.
       (8) Section 13(c)(4)(G)(ii)(II) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)(II)) is amended by 
     striking ``semiannual period'' and inserting ``assessment 
     period''.
       (9) Section 232(a) of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 (12 U.S.C. 1834(a)) is 
     amended--
       (A) in the matter preceding subparagraph (A) of paragraph 
     (2), by striking ``the Board and'';
       (B) in subparagraph (J) of paragraph (2), by striking ``the 
     Board'' and inserting ``the Corporation'';
       (C) by striking subparagraph (A) of paragraph (3) and 
     inserting the following new subparagraph:
       ``(A) Corporation.--The term `Corporation' means the 
     Federal Deposit Insurance Corporation.''; and
       (D) in subparagraph (C) of paragraph (3), by striking 
     ``Board'' and inserting ``Corporation''.
       (f) Effective Date.--This section and the amendments made 
     by this section shall take effect on the date that the final 
     regulations required under section 9(a)(5) take effect.

     SEC. 5. REPLACEMENT OF FIXED DESIGNATED RESERVE RATIO WITH 
                   RESERVE RANGE.

       (a) In General.--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) Establishment.--
       ``(i) In general.--The Board of Directors shall designate, 
     by regulation after notice and opportunity for comment, the 
     reserve ratio applicable with respect to the Deposit 
     Insurance Fund.
       ``(ii) Not less than annual redetermination.--A 
     determination under clause (i) shall be made by the Board of 
     Directors at least before the beginning of each calendar 
     year, for such calendar year, and at such other times as the 
     Board of Directors may determine to be appropriate.
       ``(B) Range.--The reserve ratio designated by the Board of 
     Directors for any year--
       ``(i) may not exceed 1.4 percent of estimated insured 
     deposits; and
       ``(ii) may not be less than 1.15 percent of 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 such year and future years, including 
     historic experience and potential and estimated losses from 
     insured depository institutions;
       ``(ii) take into account economic conditions generally 
     affecting insured depository institutions so as to allow the 
     designated reserve ratio to increase during more favorable 
     economic conditions and to decrease 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 of Directors;
       ``(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.
       ``(D) Publication of proposed change in ratio.--In 
     soliciting comment on any proposed change in the designated 
     reserve ratio in accordance with subparagraph (A), the Board 
     of Directors shall include in the published proposal a 
     thorough analysis of the data and projections on which the 
     proposal is based.''.
       (b) Technical and Conforming Amendment.--Section 3(y) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813(y)) is 
     amended--
       (1) by striking ``(y) The term'' and inserting(y) 
     Definitions Relating to Deposit Insurance Fund.--
       ``(1) Deposit insurance fund.--The term''; and
       (2) by inserting after paragraph (1) (as so designated by 
     paragraph (1) of this subsection) the following new 
     paragraph:
       ``(2) Designated reserve ratio.--The term `designated 
     reserve ratio' means the reserve ratio designated by the 
     Board of Directors in accordance with section 7(b)(3).''.
       (c) Effective Date.--This section and the amendments made 
     by this section shall take effect on the date that the final 
     regulations required under section 9(a)(1) take effect.

     SEC. 6. REQUIREMENTS APPLICABLE TO 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 new subparagraphs:
       ``(E) Information concerning risk of loss and economic 
     conditions.--
       ``(i) Sources of information.--For purposes of determining 
     risk of losses at insured depository institutions and 
     economic conditions generally affecting depository 
     institutions, the Corporation shall collect information, as 
     appropriate, from all sources the Board of Directors 
     considers appropriate, such as reports of condition, 
     inspection reports, and other information from all Federal 
     banking agencies, any information available from State bank 
     supervisors, State insurance and securities regulators, the 
     Securities and Exchange Commission (including information 
     described in section 35), the Secretary of the Treasury, the 
     Commodity Futures Trading Commission, the Farm Credit 
     Administration, the Federal Trade Commission, any Federal 
     reserve bank or Federal home loan bank, and other regulators 
     of financial institutions, and any information available from 
     credit rating entities, and other private economic or 
     business analysts.
       ``(ii) Consultation with federal banking agencies.--

       ``(I) In general.--Except as provided in subclause (II), in 
     assessing the risk of loss to the Deposit Insurance Fund with 
     respect to any insured depository institution, the 
     Corporation shall consult with the appropriate Federal 
     banking agency of such institution.
       ``(II) Treatment on aggregate basis.--In the case of 
     insured depository institutions that are well capitalized (as 
     defined in section 38) and, in the most recent examination, 
     were found to be well managed, the consultation under 
     subclause (I) concerning the assessment of the risk of loss 
     posed by such institutions may be made on an aggregate basis.

       ``(iii) Rule of construction.--No provision of this 
     paragraph shall be construed as providing any new authority 
     for the Corporation to require submission of information by 
     insured depository institutions to the Corporation.
       ``(F) Modifications to the risk-based assessment system 
     allowed only after notice and comment.--In revising or 
     modifying the risk-based assessment system at any time after 
     the date of the enactment of the Federal Deposit Insurance 
     Reform Act of 2005, the Board of Directors may implement such 
     revisions or modification in final form only after notice and 
     opportunity for comment.''.

     SEC. 7. REFUNDS, DIVIDENDS, AND CREDITS FROM DEPOSIT 
                   INSURANCE FUND.

       (a) In General.--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, Dividends, and Credits.--
       ``(1) Refunds of 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 assessments until such credit is exhausted.
       ``(2) Dividends from excess amounts in deposit insurance 
     fund.--
       ``(A) Reserve ratio in excess of 1.4 percent of estimated 
     insured deposits.--Whenever the reserve ratio of the Deposit 
     Insurance Fund exceeds 1.4 percent of estimated insured 
     deposits, the Corporation shall declare the amount in the 
     Fund in excess of the amount required to maintain the reserve 
     ratio at 1.4 percent of estimated insured deposits, as 
     dividends to be paid to insured depository institutions.
       ``(B) Reserve ratio equal to or in excess of 1.35 percent 
     of estimated insured deposits and not more than 1.4 
     percent.--Whenever the reserve ratio of the Deposit Insurance 
     Fund equals or exceeds 1.35 percent of estimated insured 
     deposits and is not more than 1.4 percent of such deposits, 
     the Corporation shall declare the amount in the Fund that is 
     equal to 50 percent of the amount in excess of the amount 
     required to maintain the reserve ratio at 1.35 percent of the 
     estimated insured deposits as dividends to be paid to insured 
     depository institutions.
       ``(C) Basis for distribution of dividends.--
       ``(i) In general.--Solely for the purposes of dividend 
     distribution under this paragraph and credit distribution 
     under paragraph (3)(B), the Corporation shall determine each 
     insured depository institution's relative contribution to the 
     Deposit Insurance Fund (or any predecessor deposit insurance 
     fund) for calculating such institution's share of any 
     dividend or credit declared under this paragraph or paragraph 
     (3)(B), taking into account the factors described in clause 
     (ii).
       ``(ii) Factors for distribution.--In implementing this 
     paragraph and paragraph (3)(B) in accordance with 
     regulations, the Corporation shall take into account the 
     following factors:

       ``(I) The ratio of the assessment base of an insured 
     depository institution (including any predecessor) on 
     December 31, 1996, to the assessment base of all eligible 
     insured depository institutions on that date.
       ``(II) The total amount of assessments paid on or after 
     January 1, 1997, by an insured depository institution 
     (including any predecessor) to the Deposit Insurance Fund 
     (and any predecessor deposit insurance fund).
       ``(III) That portion of assessments paid by an insured 
     depository institution (including any predecessor) that 
     reflects higher levels of risk assumed by such institution.
       ``(IV) Such other factors as the Corporation may determine 
     to be appropriate.

       ``(D) Notice and opportunity for comment.--The Corporation 
     shall prescribe by regulation, after notice and opportunity 
     for comment, the method for the calculation, declaration, and 
     payment of dividends under this paragraph.
       ``(3) Credit pool.--
       ``(A) One-time credit based on total assessment base at 
     year-end 1996.--
       ``(i) In general.--Before the end of the 270-day period 
     beginning on the date of the enactment of the Federal Deposit 
     Insurance Reform Act of 2005, the Board of Directors shall, 
     by regulation, provide for a credit to each eligible insured 
     depository institution, based on the assessment base of the 
     institution (including any predecessor institution) on 
     December 31, 1996, as compared to the combined aggregate 
     assessment base of all eligible insured depository 
     institutions, taking into account such factors as the

[[Page 8602]]

     Board of Directors may determine to be appropriate.
       ``(ii) Credit limit.--The aggregate amount of credits 
     available under clause (i) to all eligible insured depository 
     institutions shall equal the amount that the Corporation 
     could collect if the Corporation imposed an assessment of 12 
     basis points on the combined assessment base of the Bank 
     Insurance Fund and the Savings Association Insurance Fund as 
     of December 31, 2001.
       ``(iii) Eligible insured depository institution defined.--
     For purposes of this paragraph, the term `eligible insured 
     depository institution' means any insured depository 
     institution that--

       ``(I) was in existence on December 31, 1996, and paid a 
     deposit insurance assessment prior to that date; or
       ``(II) is a successor to any insured depository institution 
     described in subclause (I).

       ``(iv) Application of credits.--

       ``(I) In general.--The amount of a credit to any eligible 
     insured depository institution under this paragraph shall be 
     applied by the Corporation, subject to subsection (b)(3)(E), 
     to the assessments imposed on such institution under 
     subsection (b) that become due for assessment periods 
     beginning after the effective date of regulations prescribed 
     under clause (i).
       ``(II) Regulations.--The regulations prescribed under 
     clause (i) shall establish the qualifications and procedures 
     governing the application of assessment credits pursuant to 
     subclause (I).

       ``(v) Limitation on amount of credit for certain depository 
     institutions.--In the case of an insured depository 
     institution that exhibits financial, operational, or 
     compliance weaknesses ranging from moderately severe to 
     unsatisfactory, or is not adequately capitalized (as defined 
     in section 38) at the beginning of an assessment period, the 
     amount of any credit allowed under this paragraph against the 
     assessment on that depository institution for such period may 
     not exceed the amount calculated by applying to that 
     depository institution the average assessment rate on all 
     insured depository institutions for such assessment period.
       ``(vi) Predecessor defined.--For purposes of this 
     paragraph, the term `predecessor', when used with respect to 
     any insured depository institution, includes any other 
     insured depository institution acquired by or merged with 
     such insured depository institution.
       ``(B) On-going credit pool.--
       ``(i) In general.--In addition to the credit provided 
     pursuant to subparagraph (A) and subject to the limitation 
     contained in clause (v) of such subparagraph, the Corporation 
     shall, by regulation, establish an on-going system of credits 
     to be applied against future assessments under subsection 
     (b)(1) on the same basis as the dividends provided under 
     paragraph (2)(C).
       ``(ii) Limitation on credits under certain circumstances.--
     No credits may be awarded by the Corporation under this 
     subparagraph during any period in which--

       ``(I) the reserve ratio of the Deposit Insurance Fund is 
     less than the designated reserve ratio of such Fund; or
       ``(II) the reserve ratio of the Fund is less than 1.25 
     percent of the amount of estimated insured deposits.

       ``(iii) Criteria for determination.--In determining the 
     amounts of any assessment credits under this subparagraph, 
     the Board of Directors shall take into account the factors 
     for designating the reserve ratio under subsection (b)(3) and 
     the factors for setting assessments under subsection 
     (b)(2)(B).
       ``(4) Administrative review.--
       ``(A) In general.--The regulations prescribed under 
     paragraph (2)(D) and subparagraphs (A) and (B) of paragraph 
     (3) shall include provisions allowing an insured depository 
     institution a reasonable opportunity to challenge 
     administratively the amount of the credit or dividend 
     determined under paragraph (2) or (3) for such institution.
       ``(B) Administrative review.--Any review under subparagraph 
     (A) of any determination of the Corporation under paragraph 
     (2) or (3) shall be final and not subject to judicial 
     review.''.
       (b) Definition of Reserve Ratio.--Section 3(y) of the 
     Federal Deposit Insurance Act (12 U.S.C. 1813(y)) (as amended 
     by section 5(b) of this Act) is amended by adding at the end 
     the following new paragraph:
       ``(3) Reserve ratio.--The term `reserve ratio', when used 
     with regard to the Deposit Insurance Fund other than in 
     connection with a reference to the designated reserve ratio, 
     means the ratio of the net worth of the Deposit Insurance 
     Fund to the value of the aggregate estimated insured 
     deposits.''.

     SEC. 8. DEPOSIT INSURANCE FUND RESTORATION PLANS.

       Section 7(b)(3) of the Federal Deposit Insurance Act (12 
     U.S.C. 1817(b)(3)) (as amended by section 5(a) of this Act) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(E) Dif restoration plans.--
       ``(i) In general.--Whenever--

       ``(I) the Corporation projects that the reserve ratio of 
     the Deposit Insurance Fund will, within 6 months of such 
     determination, fall below the minimum amount specified in 
     subparagraph (B)(ii) for the designated reserve ratio; or
       ``(II) the reserve ratio of the Deposit Insurance Fund 
     actually falls below the minimum amount specified in 
     subparagraph (B)(ii) for the designated reserve ratio without 
     any determination under subclause (I) having been made,

     the Corporation shall establish and implement a Deposit 
     Insurance Fund restoration plan within 90 days that meets the 
     requirements of clause (ii) and such other conditions as the 
     Corporation determines to be appropriate.
       ``(ii) Requirements of restoration plan.--A Deposit 
     Insurance Fund restoration plan meets the requirements of 
     this clause if the plan provides that the reserve ratio of 
     the Fund will meet or exceed the minimum amount specified in 
     subparagraph (B)(ii) for the designated reserve ratio before 
     the end of the 10-year period beginning upon the 
     implementation of the plan.
       ``(iii) Restriction on assessment credits.--As part of any 
     restoration plan under this subparagraph, the Corporation may 
     elect to restrict the application of assessment credits 
     provided under subsection (e)(3) for any period that the plan 
     is in effect.
       ``(iv) Limitation on restriction.--Notwithstanding clause 
     (iii), while any restoration plan under this subparagraph is 
     in effect, the Corporation shall apply credits provided to an 
     insured depository institution under subsection (e)(3) 
     against any assessment imposed on the institution for any 
     assessment period in an amount equal to the lesser of--

       ``(I) the amount of the assessment; or
       ``(II) the amount equal to 3 basis points of the 
     institution's assessment base.

       ``(v) Transparency.--Not more than 30 days after the 
     Corporation establishes and implements a restoration plan 
     under clause (i), the Corporation shall publish in the 
     Federal Register a detailed analysis of the factors 
     considered and the basis for the actions taken with regard to 
     the plan.''.

     SEC. 9. REGULATIONS REQUIRED.

       (a) In General.--Not later than 270 days after the date of 
     the enactment of this Act, the Board of Directors of the 
     Federal Deposit Insurance Corporation shall prescribe final 
     regulations, after notice and opportunity for comment--
       (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 5 of this Act);
       (2) implementing increases in deposit insurance coverage in 
     accordance with the amendments made by section 3 of this Act;
       (3) implementing the dividend requirement under section 
     7(e)(2) of the Federal Deposit Insurance Act (as amended by 
     section 7 of this Act);
       (4) implementing the 1-time assessment credit to certain 
     insured depository institutions in accordance with section 
     7(e)(3) of the Federal Deposit Insurance Act, as amended by 
     section 7 of this Act, including the qualifications and 
     procedures under which the Corporation would apply assessment 
     credits; and
       (5) providing for assessments under section 7(b) of the 
     Federal Deposit Insurance Act, as amended by this Act.
       (b) Rule of Construction.--No provision of this Act or any 
     amendment made by this Act shall be construed as affecting 
     the authority of the Corporation to set or collect deposit 
     insurance assessments before the effective date of the final 
     regulations prescribed under subsection (a).

     SEC. 10. STUDIES OF FDIC STRUCTURE AND EXPENSES AND CERTAIN 
                   ACTIVITIES AND FURTHER POSSIBLE CHANGES TO 
                   DEPOSIT INSURANCE SYSTEM.

       (a) Study by Comptroller General.--
       (1) Study required.--The Comptroller General shall conduct 
     a study of the following issues:
       (A) The efficiency and effectiveness of the administration 
     of the prompt corrective action program under section 38 of 
     the Federal Deposit Insurance Act by the Federal banking 
     agencies (as defined in section 3 of such Act), including the 
     degree of effectiveness of such agencies in identifying 
     troubled depository institutions and taking effective action 
     with respect to such institutions, and the degree of accuracy 
     of the risk assessments made by the Corporation.
       (B) The appropriateness of the organizational structure of 
     the Federal Deposit Insurance Corporation for the mission of 
     the Corporation taking into account--
       (i) the current size and complexity of the business of 
     insured depository institutions (as such term is defined in 
     section 3 of the Federal Deposit Insurance Act);
       (ii) the extent to which the organizational structure 
     contributes to or reduces operational inefficiencies that 
     increase operational costs; and
       (iii) the effectiveness of internal controls.
       (2) Report to the congress.--The Comptroller General shall 
     submit a report to the Congress before the end of the 1-year 
     period beginning on the date of the enactment of this Act 
     containing the findings and conclusions of the Comptroller 
     General with respect to the study required under paragraph 
     (1) together with such recommendations for legislative or 
     administrative action as the Comptroller General may 
     determine to be appropriate.
       (b) Study of Further Possible Changes to Deposit Insurance 
     System.--
       (1) Study required.--The Board of Directors of the Federal 
     Deposit Insurance Corporation and the National Credit Union 
     Administration Board shall each conduct a study of the 
     following:
       (A) 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.
       (B) The feasibility of privatizing all deposit insurance at 
     insured depository institutions and insured credit unions.
       (2) Report.--Before the end of the 1-year period beginning 
     on the date of the enactment of

[[Page 8603]]

     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.
       (c) Study Regarding Appropriate Deposit Base in Designating 
     Reserve Ratio.--
       (1) Study required.--The Federal Deposit Insurance 
     Corporation shall conduct a study of the feasibility of using 
     actual domestic deposits rather than estimated insured 
     deposits in calculating the reserve ratio of the Deposit 
     Insurance Fund and designating a reserve ratio for such Fund.
       (2) Report.--The Federal Deposit Insurance Corporation 
     shall submit a report to the Congress before the end of the 
     1-year period beginning on the date of the enactment of this 
     Act containing the findings and conclusions of the 
     Corporation with respect to the study required under 
     paragraph (1) together with such recommendations for 
     legislative or administrative action as the Board of 
     Directors of the Corporation may determine to be appropriate.
       (d) Study of Reserve Methodology and Accounting for Loss.--
       (1) Study required.--The Federal Deposit Insurance 
     Corporation shall conduct a study of the reserve methodology 
     and loss accounting used by the Corporation during the period 
     beginning on January 1, 1992, and ending December 31, 2004, 
     with respect to insured depository institutions in a troubled 
     condition (as defined in the regulations prescribed pursuant 
     to section 32(f) of the Federal Deposit Insurance Act). The 
     Corporation shall obtain comments on the design of the study 
     from the Comptroller General.
       (2) Factors to be included.--In conducting the study 
     pursuant to paragraph (1), the Federal Deposit Insurance 
     Corporation shall--
       (A) consider the overall effectiveness and accuracy of the 
     methodology used by the Corporation for establishing and 
     maintaining reserves and estimating and accounting for losses 
     at insured depository institutions, during the period 
     described in such paragraph;
       (B) consider the appropriateness and reliability of 
     information and criteria used by the Corporation in 
     determining--
       (i) whether an insured depository institution was in a 
     troubled condition; and
       (ii) the amount of any loss anticipated at such 
     institution;
       (C) analyze the actual historical loss experience over the 
     period described in paragraph (1) and the causes of the 
     exceptionally high rate of losses experienced by the 
     Corporation in the final 3 years of that period; and
       (D) rate the efforts of the Corporation to reduce losses in 
     such 3-year period to minimally acceptable levels and to 
     historical levels.
       (3) Report required.--The Board of Directors of the Federal 
     Deposit Insurance Corporation shall submit a report to the 
     Congress before the end of the 6-month period beginning on 
     the date of the enactment of this Act, containing the 
     findings and conclusions of the Corporation with respect to 
     the study required under paragraph (1), together with such 
     recommendations for legislative or administrative action as 
     the Board of Directors may determine to be appropriate. 
     Before submitting the report to Congress, the Board of 
     Directors shall provide a draft of the report to the 
     Comptroller General for comment.

     SEC. 11. BI-ANNUAL FDIC SURVEY AND REPORT ON INCREASING THE 
                   DEPOSIT BASE BY ENCOURAGING USE OF DEPOSITORY 
                   INSTITUTIONS BY THE UNBANKED.

       The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) 
     is amended by adding at the end the following new section:

     ``SEC. 49. BI-ANNUAL FDIC SURVEY AND REPORT ON ENCOURAGING 
                   USE OF DEPOSITORY INSTITUTIONS BY THE UNBANKED.

       ``(a) Survey Required.--
       ``(1) In general.--The Corporation shall conduct a bi-
     annual survey on efforts by insured depository institutions 
     to bring those individuals and families who have rarely, if 
     ever, held a checking account, a savings account or other 
     type of transaction or check cashing account at an insured 
     depository institution (hereafter in this section referred to 
     as the `unbanked') into the conventional finance system.
       ``(2) Factors and questions to consider.--In conducting the 
     survey, the Corporation shall take the following factors and 
     questions into account:
       ``(A) To what extent do insured depository institutions 
     promote financial education and financial literacy outreach?
       ``(B) Which financial education efforts appear to be the 
     most effective in bringing `unbanked' individuals and 
     families into the conventional finance system?
       ``(C) What efforts are insured institutions making at 
     converting `unbanked' money order, wire transfer, and 
     international remittance customers into conventional account 
     holders?
       ``(D) What cultural, language and identification issues as 
     well as transaction costs appear to most prevent `unbanked' 
     individuals from establishing conventional accounts?
       ``(E) What is a fair estimate of the size and worth of the 
     `unbanked' market in the United States?
       ``(b) Reports.--The Chairperson of the Board of Directors 
     shall submit a bi-annual report to the Committee on Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate containing 
     the Corporation's findings and conclusions with respect to 
     the survey conducted pursuant to subsection (a), together 
     with such recommendations for legislative or administrative 
     action as the Chairperson may determine to be appropriate.''.

     SEC. 12. TECHNICAL AND CONFORMING AMENDMENTS TO THE FEDERAL 
                   DEPOSIT INSURANCE ACT RELATING TO THE MERGER OF 
                   THE BIF AND SAIF.

       (a) In General.--The Federal Deposit Insurance Act (12 
     U.S.C. 1811 et seq.) is amended--
       (1) in section 3 (12 U.S.C. 1813)--
       (A) by striking subparagraph (B) of subsection (a)(1) and 
     inserting the following new subparagraph:
       ``(B) includes any former savings association.''; and
       (B) by striking paragraph (1) of subsection (y) (as so 
     designated by section 5(b) of this Act) and inserting the 
     following new paragraph:
       ``(1) Deposit insurance fund.--The term `Deposit Insurance 
     Fund' means the Deposit Insurance Fund established under 
     section 11(a)(4).'';
       (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) (and any funds resulting from the 
     application of such paragraph (2) prior to its repeal shall 
     be deposited into the general fund of the Deposit Insurance 
     Fund);
       (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 ``(1) Uninsured institutions.--''; and
       (D) by redesignating subparagraphs (A) and (C) as 
     paragraphs (1) and (3), respectively, and moving the left 
     margins 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(b) (12 U.S.C. 1817(b))--
       (A) in paragraph (1)(C), 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''; and
       (C) in paragraph (5) (as so redesignated by section 4(e)(4) 
     of this Act)--
       (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 so redesignated)--

       (I) by inserting ``that'' before ``the Corporation''; and
       (II) by striking ``; and'' and inserting a period;

       (9) 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'';
       (10) in section 8(t)(2)(C) (12 U.S.C. 1818(t)(2)(C)), by 
     striking ``deposit insurance fund'' and inserting ``Deposit 
     Insurance Fund'';
       (11) in section 11 (12 U.S.C. 1821)--
       (A) by striking ``deposit insurance fund'' each place that 
     term appears and inserting ``Deposit Insurance Fund'';
       (B) by striking paragraph (4) of subsection (a) and 
     inserting the following new paragraph:
       ``(4) Deposit insurance fund.--
       ``(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 insured depository 
     institutions the deposits of which are insured by the Deposit 
     Insurance Fund.
       ``(C) Limitation on use.--Notwithstanding any provision of 
     law other than section

[[Page 8604]]

     13(c)(4)(G), the Deposit Insurance Fund shall not be used in 
     any manner to benefit any shareholder or affiliate (other 
     than an insured depository institution that receives 
     assistance in accordance with the provisions of this Act) 
     of--
       ``(i) any insured depository institution for which the 
     Corporation has been appointed conservator or receiver, in 
     connection with any type of resolution by the Corporation;
       ``(ii) any other insured depository institution in default 
     or in danger of default, in connection with any type of 
     resolution by the Corporation; or
       ``(iii) any insured depository institution, in connection 
     with the provision of assistance under this section or 
     section 13 with respect to such institution, except that this 
     clause shall not prohibit any assistance to any insured 
     depository institution that is not in default, or that is not 
     in danger of default, that is acquiring (as defined in 
     section 13(f)(8)(B)) another insured depository institution.
       ``(D) Deposits.--All amounts assessed against insured 
     depository institutions by the Corporation shall be deposited 
     into the Deposit Insurance Fund.'';
       (C) by striking paragraphs (5), (6), and (7) of subsection 
     (a); and
       (D) by redesignating paragraph (8) of subsection (a) as 
     paragraph (5);
       (12) 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;
       (13) 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 so redesignated), by striking 
     ``subparagraphs (A) and (B)'' and inserting ``subparagraph 
     (A)'';
       (14) in section 11(p)(2)(B) (12 U.S.C. 1821(p)(2)(B)), by 
     striking ``institution, any'' and inserting ``institution, 
     the'';
       (15) in section 11A(a) (12 U.S.C. 1821a(a))--
       (A) in paragraph (2), by striking ``liabilities.--'' and 
     all that follows through ``Except'' and inserting 
     ``liabilities.--Except'';
       (B) by striking paragraph (2)(B); and
       (C) in paragraph (3), by striking ``the Bank Insurance 
     Fund, the Savings Association Insurance Fund,'' and inserting 
     ``the Deposit Insurance Fund'';
       (16) in section 11A(b) (12 U.S.C. 1821a(b)), by striking 
     paragraph (4);
       (17) in section 11A(f) (12 U.S.C. 1821a(f)), by striking 
     ``Savings Association Insurance Fund'' and inserting 
     ``Deposit Insurance Fund'';
       (18) 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)'';
       (19) 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''; and
       (iv) by striking ``the member's'' each place that term 
     appears and inserting ``the institution's'';
       (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''; and
       (H) in subsection (k)(5)(A), by striking ``Savings 
     Association Insurance Fund members'' and inserting ``savings 
     associations'';
       (20) 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'';
       (21) 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'';
       (22) in section 14(c) (12 U.S.C. 1824(c)), by striking 
     paragraph (3);
       (23) 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 
     term amended by subparagraph (A) or (B) of this paragraph) 
     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'';
       (24) in section 14 (12 U.S.C. 1824), by adding at the end 
     the following new subsection:
       ``(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;
       ``(C) be a direct liability of the Deposit Insurance Fund; 
     and
       ``(D) be subject to the limitations of section 15(c).'';
       (25) 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'';
       (26) 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 Deposit Insurance Fund'';
       (27) 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'';
       (28) in section 18(m)(3) (12 U.S.C. 1828(m)(3))--
       (A) by striking ``Savings Association Insurance Fund'' in 
     the 1st sentence of subparagraph (A) and inserting ``Deposit 
     Insurance Fund'';
       (B) by striking ``Savings Association Insurance Fund 
     member'' in the last sentence of subparagraph (A) and 
     inserting ``savings association''; and
       (C) by striking ``Savings Association Insurance Fund or the 
     Bank Insurance Fund'' in subparagraph (C) and inserting 
     ``Deposit Insurance Fund'';
       (29) 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'';
       (30) in section 18(p) (12 U.S.C. 1828(p)), by striking 
     ``deposit insurance funds'' and inserting ``Deposit Insurance 
     Fund'';
       (31) 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'';
       (32) in section 28 (12 U.S.C. 1831e), by striking 
     ``affected deposit insurance fund'' each place that term 
     appears and inserting ``Deposit Insurance Fund'';
       (33) by striking section 31 (12 U.S.C. 1831h);
       (34) in section 36(i)(3) (12 U.S.C. 1831m(i)(3)), by 
     striking ``affected deposit insurance fund'' and inserting 
     ``Deposit Insurance Fund'';
       (35) in section 37(a)(1)(C) (12 U.S.C. 1831n(a)(1)(C)), by 
     striking ``insurance funds'' and inserting ``Deposit 
     Insurance Fund'';
       (36) 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'';
       (37) in section 38(a) (12 U.S.C. 1831o(a)), in the 
     subsection heading, by striking ``Funds'' and inserting 
     ``Fund'';
       (38) 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
       (39) in section 38(o) (12 U.S.C. 1831o(o))--
       (A) by striking ``Associations.--'' and all that follows 
     through ``Subsections (e)(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.

[[Page 8605]]

       (b) Effective Date.--This section and the amendments made 
     by this section shall take effect on the first day of the 
     first calendar quarter that begins after the end of the 90-
     day period beginning on the date of the enactment of this 
     Act.

     SEC. 13. OTHER TECHNICAL AND CONFORMING AMENDMENTS RELATING 
                   TO THE MERGER OF THE BIF AND SAIF.

       (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 (51-4066-0-3-373);''.
       (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 such 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'';
       (4) in section 21A(b)(6)(B) (12 U.S.C. 1441a(b)(6)(B))--
       (A) in the subparagraph heading, by striking ``Saif-insured 
     banks'' and inserting ``Charter Conversions''; and
       (B) by striking ``Savings Association Insurance Fund 
     member'' and inserting ``savings association'';
       (5) in section 21A(b)(10)(A)(iv)(II) (12 U.S.C. 
     1441a(b)(10)(A)(iv)(II)), by striking ``Savings Association 
     Insurance Fund'' and inserting ``Deposit Insurance Fund'';
       (6) in section 21A(n)(6)(E)(iv) (12 U.S.C. 
     1441(n)(6)(E)(iv)), by striking ``Federal deposit insurance 
     funds'' and inserting ``the Deposit Insurance Fund'';
       (7) in section 21B(e) (12 U.S.C. 1441b(e))--
       (A) in paragraph (5), by inserting ``as of the date of 
     funding'' after ``Savings Association Insurance Fund 
     members'' each place that term appears; and
       (B) by striking paragraphs (7) and (8); and
       (8) in section 21B(k) (12 U.S.C. 1441b(k))--
       (A) by inserting before the colon ``, the following 
     definitions shall apply'';
       (B) by striking paragraph (8); and
       (C) by redesignating paragraphs (9) and (10) as paragraphs 
     (8) and (9), respectively.
       (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)(5)(A), by striking ``that is a member 
     of the Bank Insurance Fund'';
       (B) in subsection (c)(6), by striking ``As used in this 
     subsection--'' and inserting ``For purposes of this 
     subsection, the following definitions shall apply:'';
       (C) in subsection (o)(1), by striking ``that is a Bank 
     Insurance Fund member'';
       (D) 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'';
       (E) in subsection (t)(5)(D)(iii)(II), by striking 
     ``affected deposit insurance fund'' and inserting ``Deposit 
     Insurance Fund'';
       (F) in subsection (t)(7)(C)(i)(I), by striking ``affected 
     deposit insurance fund'' and inserting ``Deposit Insurance 
     Fund''; and
       (G) 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 
     inserting ``and after the merger of such funds, the Deposit 
     Insurance Fund,'' after ``the Savings Association 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''.
       (k) Effective Date.--This section and the amendments made 
     by this section shall take effect on the first day of the 
     first calendar quarter that begins after the end of the 90-
     day period beginning on the date of the enactment of this 
     Act.


                   Amendment Offered by Mrs. Maloney

  Mrs. MALONEY. Mr. Chairman, I offer an amendment.
  The Clerk read as follows:

       Amendment offered by Mrs. Maloney:
       Page 4, line 8, strike ``For purposes'' and insert ``Except 
     as provided in subparagraph (G), for purposes''.
       Page 4, line 15, insert ``with respect to any qualified 
     insured depository institution'' before the comma at the end.
       Page 7, line 2, strike the closing quotation marks and the 
     2nd period.
       Page 7, after line 2, insert the following new 
     subparagraph:
       ``(G) Conditions for increased deposit insurance 
     coverage.--
       ``(i) In general.--For purposes of subparagraph (E)(ii), an 
     insured depository institution shall be treated as a 
     qualified insured depository institution only if--

       ``(I) in the process of posting credits and debits against 
     a checking account used primarily for personal, family, or 
     household purposes after the close of any business day, the 
     depository institution credits all deposits to the account 
     before debiting any check drawn on the account and presented 
     to the depository institution for payment; and
       ``(II) the depository institution imposes no fee for paying 
     any check drawn on an account in spite of a lack of 
     sufficient funds in the account to pay such check or any 
     similar activity (commonly referred to as `bounce 
     protection') unless the accountholder has affirmatively 
     requested such service.

       ``(ii) Nonqualified insured depository institutions.--The 
     standard maximum insurance amount applicable to any insured 
     depository institution that is not a qualified insured 
     depository institution shall be the amount described in 
     subparagraph (E)(i) without regard to the effective date 
     referred to in such subparagraph or any adjustment under 
     subparagraph (F).''.

  Mrs. MALONEY (during the reading). Mr. Chairman, I ask unanimous 
consent that the amendment be considered as read and printed in the 
Record.
  The CHAIRMAN. Is there objection to the request of the gentlewoman 
from New York?
  There was no objection.
  Mrs. MALONEY. Mr. Chairman, first of all, I would like to thank the 
gentleman from Massachusetts (Mr. Frank) our ranking member, and the

[[Page 8606]]

gentleman from Ohio (Mr. Oxley), our chairman, for working in a 
bipartisan way for truly the grand goal of safety and soundness in our 
financial systems and keeping them competitive in the world financial 
market.
  My amendment is one that I am going to offer and withdraw, because 
the chairman has generously offered to work with me in committee under 
a separate introduced bill to pass the intent of this. And what my 
amendment would do is that it would prevent banks from charging 
customers bounced check fees when the money is already there in the 
bank, and when it is simply a matter of which journal entry the bank 
makes first.
  We did have a hearing on this earlier in the Committee on Financial 
Services. And some of the banks' representatives testified that many 
banks do this already. So this amendment would simply require all banks 
to do so consistently and prevent abuses.
  In other words, if money is there, but it has been deposited, then 
you cannot withdraw that money, the deposited money should be credited 
before the money is withdrawn from the bank.
  My amendment would also prevent banks from charging customers for 
overdraft protection when the customer has not requested this service. 
Again, this is simple and fair and straightforward. And sometimes, in 
some cases in some banks, the overdraft protection costs more than the 
overdraft penalty.
  So it would really prevent hidden charges and fees for services 
customers have not even asked for, in this case, financial 
institutions. So I have been assured that by the parliamentarian that 
my amendment would be immune from a point of order. The Committee on 
Rules accepted it.
  But I will be withdrawing it with the consideration of the chairman 
to fully discuss this in committee, and I yield to the gentleman from 
Ohio (Mr. Oxley) our chairman, and I thank you for working in a 
bipartisan way on this and so many other issues.
  Mr. OXLEY. Mr. Chairman, will the gentlewoman yield?
  Mrs. MALONEY. I yield to the gentleman from Ohio.
  Mr. OXLEY. Mr. Chairman, I thank the gentlewoman for yielding, and I 
appreciate her cooperation in this area. I think all of us recognize 
some of the potential issues that are inherent in passage of Check 21.
  It is also important to notice that about 1 percent of the checks 
today are being truncated, so we are early into the process here. It is 
also important to note that under the provision of Check 21, the Fed is 
empowered should they see an imbalance between the deposits and 
withdrawals to not only draw attention to it, but to deal with it.
  The study, of course, will not be completed for about 2 years. And as 
a result I think it is important for the committee, as we have 
discussed before and I discussed with the ranking member, to have the 
committee continue to monitor the situation, and we would do so, and to 
that end, I would indicate to my friend, the gentlewoman from New York 
(Mrs. Maloney) that we would plan to hold an oversight hearing on that 
specific issue. I will be glad to work with the gentlewoman from New 
York (Mrs. Maloney) as far as the potential witnesses are concerned.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentlewoman yield?
  Mrs. MALONEY. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, I thank the gentlewoman 
from New York (Mrs. Maloney). She has been very much in the forefront 
overseeing this issue. Along with her, I and others have written some 
letters to the Federal Reserve. We have been staying very much on top 
of this.
  The gentlewoman has been performing a real service, and I appreciate 
the cooperation of the chairman. I look forward to our being able to 
work together to make sure that consumers are protected.
  Mrs. MALONEY. Mr. Chairman, I ask unanimous consent to withdraw the 
amendment.
  The CHAIRMAN. Is there objection to the request of the gentlewoman 
from New York?
  There was no objection.


                  Amendment Offered by Mr. Rohrabacher

  Mr. ROHRABACHER. Mr. Chairman, I offer an amendment.
  The Clerk read as follows:

       Amendment offered by Mr. Rohrabacher:
       Strike section 3 of the bill (and redesignate the 
     subsequent sections and any cross reference to any such 
     section and conform the table of contents accordingly).

  Mr. ROHRABACHER. Mr. Chairman, let me reiterate that I do this with 
great respect to the gentleman from Alabama (Mr. Bachus) and the 
gentleman from Ohio (Mr. Oxley) and the gentleman from Massachusetts 
(Mr. Frank) who put a great deal of time and effort into this bill and 
this legislation.
  I have a fundamental philosophical disagreement about Federal Deposit 
Insurance. But I have no doubt that they have worked hard to try to 
produce some good legislation here.
  With that said, I offer this amendment on behalf of myself and the 
gentlewoman from New York (Mrs. Maloney). The Rohrabacher-Maloney 
amendment would strike out section 3, keeping the Federal Deposit 
Insurance at its current level of $100,000 per account.
  Let me note the argument was made earlier that simply by raising 
insurance, for example, from $100,000 to $130,000, would that, we were 
asked, make people more irresponsible if it was car insurance, and you 
just increased the car insurance from $100,000 to $130,000? The answer 
is, yes, if someone else was paying for the car insurance.
  If somebody gave whatever it is, if the Federal Government ends up 
coming in and saying, if all else fails, do not worry, you are going to 
get paid off, because we are going to pay it, the taxpayers will pay it 
in the end, if this whole system fails we are there. Yeah, people who 
ended up not having to take that responsibility off their shoulders, 
the institutions might be a little less responsible, and, of course, 
the individuals themselves might be less responsible in picking out 
where to put their money.
  This bill also increases to $260,000 retirement accounts, the deposit 
insurance for that, and $2 million per account for municipalities. 
Well, this, as I say right in the beginning, the FDIC was supposed to 
be for the little guy. And, again, there has been the argument that the 
gentleman from Massachusetts (Mr. Frank) gave, well, $100,000 or 
$130,000 these days is the little guy. Well, that is if you are 
counting one account. Everybody involved in this knows that we are 
taking about multiple accounts.
  Now we are talking about multiple accounts of $130,000 per account, 
and, yeah, someone who has 10 accounts at $130,000 is someone who I 
would catalog as rich. But, I just say this much, yes, if someone has 
$1.3 million in various accounts that are going to be ultimately 
guaranteed by the Federal Government, and the question is, where does 
this money come from? Does it come from, yes, the banks and the savings 
and loans?
  Well, it comes, yes, from the banks and savings and loans. But, what 
is important is, the ultimate guarantor is the Federal Government, 
otherwise we would not be talking about that.
  But, when we put the taxpayers on the ultimate hook, will it ever 
happen? Well, it has happened, and I have seen it happen, and you have 
seen it happen. And this bill may or may not make that less likely. In 
fact, when you combine the deposit insurances, and put them together, 
yes it might add some strength to the system, but it also means that if 
the system collapses, it collapses big time, big time collapse; not 
just medium time collapse, but a big time collapse.
  So could it happen? Yes, it could happen. I think that things like 
this happen, like the savings and loan debacle, because fundamental 
principles are ignored. And the fundamental principles are people 
should be responsible for their own money, and that institutions should 
be responsible.
  If they commit acts or they are charging too much or their expenses 
are too high, or they are not competent enough, people should not be 
placing their money in that institution simply

[[Page 8607]]

because there is a guarantee, there is a deposit guarantee, which is 
what we have now.
  By ignoring these fundamental principles, you have less 
responsibility on the part of the depositor and less responsibility on 
the part of the financial institution. So here we are, faced with a 
major jump in the deposit insurance. What are we going to do?
  I think it is about time to reexamine the fundamental issue of 
whether or not we should be guaranteeing this deposit insurance in the 
first place. And I will say, as I have said before, I watched this 
happen during the Reagan administration. In 1980, they dramatically 
increased the deposit insurance, and do not tell me that there have not 
been people, well known economists suggesting that that was a major 
cause of the savings and loan debacle, they are.
  Because, even today Alan Greenspan, Milton Friedman and others oppose 
this increase in the deposit insurance for that very reason, because 
they have seen that this makes the system more vulnerable, and we 
should not be doing that.
  With that, I would suggest that I would hope that people could vote 
for my amendment to strike section 3 out, which would then increase 
that.

                              {time}  1515

  Mr. FRANK of Massachusetts. Mr. Chairman, I move to strike the last 
word.
  Mr. Chairman, the gentleman from California (Mr. Rohrabacher) simply 
multiplies his mathematical difficulty. He said, well, when I said if 
you have $100,000 under his calculations, you are a little guy but if 
you have 130,000 you are rich. He says, but what if you have 10 times 
$130,000? The answer is, well, what if you have 10 times 100,000? 
Thirty percent is still 30 percent.
  So the fact is that he is ascribing to a 30 percent increase a 
qualitative impact that simply will not stand up to analysis. He says, 
well, you can have 10 accounts and you would have 1.3 million. Yes, and 
you could have 10 accounts and have 1 million.
  So the difference is really quite small. I must say even when the 
gentleman from Alabama (Mr. Bachus), with whom I agree here, talked 
about this will save people, $30,000 is not going to make a big 
difference one way or the other. I believe it is a step in the right 
direction.
  First of all, understand that much of the argument for this comes 
from smaller institutions who fear the negative competitive effect of 
the doctrine of ``too big to fail.'' By the way, the large institutions 
are on the whole not for this. The large institutions feel that if 
people are worried about a bank failure affecting their accounts, if 
they have more than the insured amount they will put it in the largest 
possible institution to the detriment of smaller institutions. I do not 
think it is a good thing for there to be that kind of competitive 
pressure exercised against smaller banks. That is why they are very 
strong advocates of this.
  Mr. OXLEY. Mr. Chairman, will the gentleman yield?
  Mr. FRANK of Massachusetts. I yield to the gentleman from Ohio.
  Mr. OXLEY. Mr. Chairman, it occurred to me as I was listening to my 
friend from California, we could go back to the old days of giving out 
toasters for deposits. I would say that the system we have now, I have 
not heard of toaster promotion for a long time, mercifully, but it 
certainly seems to me that the consumer, saver, investor is a lot more 
sophisticated than they ever were and they will not be lured by toaster 
opportunities as opposed to depositing it into an institution where 
they feel comfortable that their deposit is indeed insured.
  Mr. FRANK of Massachusetts. I thank the gentleman.
  The other thing I want to do is to disagree very strongly with the 
gentleman from California (Mr. Rohrabacher) on the causality of the 
savings and loan crisis.
  I do not believe, having served here at the time, and I have seen 
very few analyses that said the deposit insurance issue was effective, 
it increased the cost but it was not the cause of the failure. And 
those are really two quite distinct things.
  The causes of the failure I believe were two. First of all, we 
imprudently loosened substantially what savings and loans, thrift 
institutions could invest their money in. So they became invested in 
things that were much less insured. They were not just doing houses; 
they were doing a lot of open land, et cetera.
  Secondly, this Congress in 1981 passed tax legislation that greatly 
inflated the value of real estate and then in 1986 undid it. If you 
wanted a dictionary example of going from one extreme to another, it 
was the treatment of real property and real estate in the 1981, 1986 
tax act. So we kind of baited and switched people.
  In the 1981 act we gave, I say ``we'' because I voted against the 
1981 act. I vote for the 1986 act, but Congress gave people incentive 
to invest in real estate. And because of the tax advantages, it made 
sense to buy an empty building and not have anybody in there in some 
cases literally because of the tax advantages. But in 1986 we 
rationalized the Tax Code, but we did it too rapidly and there were 
people caught in the middle. I believe those were the two major causes.
  I agree that increasing deposit insurance raised the cost of it, but 
I do not think it is causal. Just to go back, I think, frankly, it is 
the least sophisticated saver who we protect by raising this rate.
  The gentleman said correctly, you can open 10 accounts, 12 accounts, 
13 accounts; but more sophisticated people unfortunately, the deposit 
insurance limit is not very effective against them; but there are 
people of less sophistication, less ability to be mobile, and they are 
the ones who do it. I do not think if your life savings is $130,000 you 
are rich. And I think trying to protect the least sophisticated people 
that way and to preserve against unfair competitive pressures on 
smaller institutions justifies the bill.
  Mr. ROHRABACHER. Mr. Chairman, will the gentleman yield?
  Mr. FRANK of Massachusetts. I yield to the gentleman from California.
  Mr. ROHRABACHER. If that is the criteria we are using, why do we not 
then limit it to one account because the less sophisticated people will 
not have multiple accounts.
  Mr. FRANK of Massachusetts. May I ask the gentleman a question. Did 
someone keep the gentleman from offering that amendment? Why did the 
gentleman not offer that amendment? It is the gentleman's amendment. Is 
the gentleman criticizing me for his amendment?
  If the gentleman thinks his amendment should be different, make it 
different.
  Mr. ROHRABACHER. Would the gentleman support that one?
  Mr. FRANK of Massachusetts. Well, we will deal with this one; and 
when the gentleman brings that amendment up, we will deal with that 
one.
  I want to make it very clear. I did not stop the gentleman from 
offering any amendment he wanted to.
  Mr. ROHRABACHER. I thank the gentleman very much.
  Mr. BACHUS. Mr. Chairman, I move to strike the requisite number of 
words.
  Mr. Chairman, one thing the gentleman from California (Mr. 
Rohrabacher) mentioned and I would like to say in his defense: he has 
triplets at home, so I think we ought to have a lot of patience for the 
gentleman. They are very young. One-year-old triplets.
  Mr. FRANK of Massachusetts. Mr. Chairman, will the gentleman yield?
  Mr. BACHUS. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, I think we would all agree 
that that would certainly justify at least three accounts. One for each 
child.
  Mr. BACHUS. Second, the gentleman did mention the fact that we do 
have a provision in here covering municipal deposits or government 
deposits and that is for $2 million. The reason we did that is not to 
protect the big guy or the rich guy.
  The reason we did that is from time to time a school system or a city 
or a county or a governmental retirement system will put $2 million or 
$1.5 million in a bank and it is really not practical for them to go 
around and put

[[Page 8608]]

$100,000 in each bank. And that is basically as a result of the 
American Association of School Boards and others saying not only do we 
want to deposit more than that, but in several States, particularly the 
Farm Belt, there is only one hometown institution. And the school board 
or the government or the city or the fire district wants to deposit 
their money in their own hometown. And that is to allow that.
  Mr. OXLEY. Mr. Chairman, will the gentleman yield?
  Mr. BACHUS. I yield to the gentleman from Ohio.
  Mr. OXLEY. Mr. Chairman, the gentleman raises an excellent point. Our 
good colleague, the gentleman from Ohio (Mr. Gillmor), this is his 
contribution to this legislation, because as he shares the district 
that is next to mine, a number of small communities that have exceeded 
that amount of $100,000, they are under a fiduciary responsibility to 
have that money protected by the FDIC. And what it has done, of course, 
is drive some of that money out of the small communities and into 
larger communities so you cannot put that money to use in the 
community.
  So I want to associate myself with the gentleman's remarks. I am glad 
the gentleman brought that issue up because it is a very important part 
of this legislation.
  Mr. BACHUS. Mr. Chairman, I have two counties, one is Bibb County, 
one is Shelby County. The school board in those counties is forced to 
take about 96 percent of their money and deposit it out of county 
because there are only two hometown institutions, and they would like 
to deposit in those, as long as those are rated A institutions, and 
again I say that they are paying a premium on their deposits for this 
coverage.
  The second thing I would say is if the gentleman will go back to 
1980, what you had is we deregulated the savings and loans. We made 
tremendous changes in their mission. And at that time they had 30-year 
mortgages. They had loaned out money at 4 percent, 4.5 percent, 5 
percent. From 1979 to 1981, the interest rates increased, the Federal 
Reserve continued to increase the interest rate because of inflation, 
which the gentleman from Massachusetts (Mr. Frank) mentioned, and they 
drove the interest rate up above 20 percent. The prime rate was 21 
percent.
  So the savings and loans were having to borrow money at 21 percent 
and had loaned it out at 4 and 5 percent; and predictably, particularly 
in Texas where the price of oil fell, the savings and loans in Texas 
started failing one right after the other. And as I said earlier, if it 
were this increase from 40 to 100,000, you would have expected to see 
it show up in the banks; you would expect it to show up throughout the 
Nation.
  I do not think the people in Texas where most of the first failures 
occurred, Louisiana, I do not think they were engaged in any more 
fraudulent conduct or reckless behavior except that what they were 
doing, that was a boom economy in Texas and property values shot up, 
and there was a bubble and they came back down.
  But during all of that, the bank fund did not fail. And as I have 
said before, before one dollar of taxpayer money comes out of this 
account, it requires the funds to be exhausted. It, second, requires 
the banks, their assets to be liquidated, and only at that point would 
the taxpayer step in. That would be a heck of a depression. And I think 
that would be a depression made only worse if school boards, 
governments lost their deposits, if people lost their 401(k)s, if they 
lost any of their savings above $100,000, businesses who had accounts. 
And some of those might be rich people, the guy that owns the small 
business and has $400,000 or $600,000 deposited or a contracting 
company that has just been paid on a contract.
  I think it would make the recession or depression or economic shock 
that much worse. I believe that this legislation is sound legislation 
and should be supported.
  Mrs. MALONEY. Mr. Chairman, I rise in support of the amendment.
  I believe the immediate 30 percent increase in insurance coverage in 
the bill is a serious mistake. The coverage increase to $130,000 is 
opposed by most of the Federal financial service regulators.
  Proponents of the increased coverage argue that it poses no risk to 
the insurance system, but the regulators who oppose this increase are 
the very officials whose job it is to protect the safety and soundness 
of the financial system. The almost unanimous opposition to increased 
coverage by the regulators is a very powerful message.
  I would like to really quote some of these regulators. Alan Greenspan 
has come out very strongly opposed to it. He said, ``It is unlikely 
that increased coverage, even by indexing, would add to the stability 
of the banking system today.''
  The Undersecretary of the Treasury for Domestic Monetary Policy, 
Peter Fisher, said, ``Increasing the overall coverage limit would 
weaken market discipline and further increase the level of risk to the 
FDIC and to taxpayers.''
  Mr. Chairman, I would like to put in the Record quotes from the 
Comptroller of the Currency, the Director of the Office of Thrift 
Supervision, and the Congressional Budget Office, all raising questions 
and in opposition to this raise.
  Another argument put forth by proponents of coverage increases is 
that inflation has eroded deposit insurance. I do not believe that this 
argument matches the actual situation of the banking industry. The fact 
is that only 2 percent of insured accounts have more than $100,000 
according to the Federal Reserve.
  Mr. Chairman, at the appropriate time I would like to place this 
study into the Record.
  The same Federal Reserve study put the average account balance at 
$6,000 across America. Any way you look at it, the increase in coverage 
will benefit very few depositors.
  Proponents of increasing coverage also contend that because insurance 
premiums are paid by banks, increasing coverage does not cost 
taxpayers. While I concede the point, I think we also have to remember 
that behind the Federal deposit insurance funds is the full faith and 
credit of the United States Government.
  Since I joined the Committee on Financial Services in 1993 at the 
close of the S&L crisis, I have been committed as all of my colleagues 
are on both sides of the aisle to protecting the safety and soundness 
of the banking system.

                              {time}  1530

  While I concede and agree with my colleagues that the causes of the 
S&L failures were many, the fact is that standing behind the insurance 
system are our constituent taxpayers. The bailout we voted for was 
constituent taxpayer dollars to bail out the S&L.
  No matter what the reasons are for a future bank failure or a string 
of failures, there could be many reasons for them, by raising the 
insurance coverage, we increase the potential liability of the 
government and, thereby, the American taxpayer.
  I also believe that raising the coverage may encourage the concept of 
moral hazard. Institutions will be encouraged to engage in riskier 
behavior to boost earnings if they know that failure is ensured by the 
Federal Government.
  I would also like to place in the Record a letter to Members of 
Congress from The Financial Services Roundtable, which very strongly 
supports the underlying bill, which is a fine piece of work that has 
passed this body two times previously, but also raises many concerns 
about raising the limit to $130,000.
  The material that I referred to previously I will insert into the 
Record at this point.

                            The Financial Services Roundtable,

                                   Washington, DC, April 22, 2005.
     Hon. Barney Frank,
     House of Representatives,
     Washington, DC.
       Dear Barney: I would like to commend you on your leadership 
     and continued efforts on deposit insurance reform. An 
     effective deposit insurance system is critical to the economy 
     and maintaining public confidence in the U.S. banking system. 
     The Roundtable

[[Page 8609]]

     is committed to working with the Financial Services Committee 
     to develop reasonable, responsible deposit insurance reform 
     legislation that the Roundtable and the industry can support.
       The Roundtable supports the passage of H.R. 1185, the 
     ``Federal Deposit Insurance Reform Act of 2005.'' We also 
     support the adoption of the ``Managers Amendment.''
       The Financial Services Roundtable, a national association 
     representing 100 of the largest integrated financial services 
     companies that together constitute nearly 70 percent of the 
     deposit insurance assessment base, believe that H.R. 1185 
     will help assure a sound deposit insurance system. In 
     particular, we believe a major improvement to the bill was a 
     provision that stated no insured depository institution shall 
     be barred from the lowest-risk category solely because of 
     size.
       Further, the Roundtable supports: Merging the Bank 
     Insurance Fund (``BIF'') and the Savings Association 
     Insurance Fund (``SAIF''). A combined BIF/SAIF would be 
     stronger and more resilient. The provision in your bill that 
     caps the FDIC's assessment authority at 1 basis point for 
     those institutions in the lowest-risk category. The bill's 
     study of the effectiveness of the prompt corrective action 
     program, and a strong system of credits and rebates such as 
     you have in your legislation.
       We remain concerned about provisions in the bill that would 
     increase deposit insurance coverage limits. Our members 
     believe that raising coverage limits could weaken market 
     discipline and increase risk to the FDIC, all insured 
     institutions, and ultimately American taxpayers. Federal 
     Reserve Board Chairman Alan Greenspan has stated there is no 
     evidence that an increase in coverage levels would promote 
     competition or materially improve the ability of financial 
     institutions to obtain funds. As Chairman Greenspan noted, 
     the evidence in recent years shows that financial 
     institutions of all sizes have not experienced difficulty in 
     obtaining funding from insured or uninsured deposits. For 
     those customers with substantial deposits, ample 
     opportunities exist to obtain FDIC coverage equal to several 
     multiples of $100,000. Since the FDIC is in good shape 
     financially, there is no need to grant the FDIC additional 
     authority to levy deposit insurance premiums.
       Thank you again for your leadership on deposit insurance 
     reform and your consideration of the Roundtable's views on 
     this important matter. We look forward to working with you as 
     this legislation moves through the legislative process. If 
     you or your staff have any questions or would like to discuss 
     these issues further, please call Irving Daniels or me at 
     (202) 289-4322.
           Best regards,
                                                   Steve Bartlett,
     President and CEO.
                                  ____


 Keep Deposit Insurance Safe and Sound Support the Rohrabacher-Maloney 
                         Amendment to H.R. 1185

       ``It is unlikely that increased coverage, even by indexing, 
     would add measurably to the stability of the banking system 
     today.''--Federal Reserve Board Chairman Alan Greenspan
       ``Increasing the overall coverage limit could weaken market 
     discipline and further increase the level of risk to the FDIC 
     and taxpayers.''--Undersecretary of Treasury for Domestic 
     Monetary Policy Peter Fisher
       ``We see no compelling evidence that increased coverage 
     levels would offer depositors substantial benefits.''--
     Comptroller of the Currency John D. Hawke, Jr.
       ``Increasing the current insurance coverage level to 
     $130,000 would incur significant costs for insured 
     institutions since premiums would necessarily be increased.
       The benefits of an increase are unclear. I have heard from 
     many of our institutions that they see no merit to bumping up 
     the current limit for standard accounts. In their view, 
     projected increases in insured deposits would not lead to a 
     substantive increase in new accounts.''--Director of the 
     Office of Thrift Supervision James E. Gilleran
       ``CBO estimates H.R. 522 would increase the net cost of 
     resolving failed financial institutions by $2.1 billion over 
     the next ten years.''--Congressional Budget Office Cost 
     Estimate

  The Acting CHAIRMAN (Mr. Gingrey). The question is on the amendment 
offered by the gentleman from California (Mr. Rohrabacher).
  The amendment was rejected.
  The Acting CHAIRMAN. Are there any other amendments?
  If not, the question is on the committee amendment in the nature of a 
substitute.
  The committee amendment in the nature of a substitute was agreed to.
  The Acting CHAIRMAN. Accordingly, under the rule, the Committee will 
now rise.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Putnam) having assumed the Chair, Mr. Gingrey, Acting Chairman of the 
Committee of the Whole House on the State of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 1185) to 
reform the Federal deposit insurance system, and for other purposes, 
pursuant to House Resolution 255, he reported the bill back to the 
House with an amendment adopted by the Committee of the Whole.
  The Acting CHAIRMAN. Under the rule, the previous question is 
ordered.
  The question is on the committee amendment in the nature of a 
substitute.
  The committee amendment in the nature of a substitute was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time and was 
read the third time.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. OXLEY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. There will be a 5-minute vote after this 
vote on the motion to suspend.
  The vote was taken by electronic device, and there were--yeas 413, 
nays 10, not voting 10, as follows:

                             [Roll No. 157]

                               YEAS--413

     Abercrombie
     Ackerman
     Aderholt
     Akin
     Alexander
     Allen
     Andrews
     Baca
     Bachus
     Baird
     Baker
     Baldwin
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bass
     Bean
     Beauprez
     Becerra
     Berkley
     Berman
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blackburn
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonner
     Bono
     Boozman
     Boren
     Boswell
     Boucher
     Boustany
     Boyd
     Bradley (NH)
     Brady (PA)
     Brady (TX)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Burgess
     Burton (IN)
     Butterfield
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Capps
     Capuano
     Cardin
     Cardoza
     Carnahan
     Carson
     Carter
     Case
     Castle
     Chabot
     Chandler
     Chocola
     Clay
     Cleaver
     Clyburn
     Coble
     Cole (OK)
     Conaway
     Conyers
     Costa
     Costello
     Cox
     Cramer
     Crenshaw
     Crowley
     Cubin
     Cuellar
     Culberson
     Cummings
     Cunningham
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (KY)
     Davis (TN)
     Davis, Tom
     Deal (GA)
     DeGette
     Delahunt
     DeLauro
     DeLay
     Dent
     Dicks
     Dingell
     Doggett
     Doolittle
     Doyle
     Dreier
     Duncan
     Edwards
     Ehlers
     Emanuel
     Emerson
     Engel
     English (PA)
     Eshoo
     Etheridge
     Evans
     Everett
     Farr
     Fattah
     Feeney
     Ferguson
     Filner
     Fitzpatrick (PA)
     Foley
     Forbes
     Ford
     Fortenberry
     Fossella
     Foxx
     Frank (MA)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green (WI)
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Gutknecht
     Hall
     Harman
     Harris
     Hart
     Hastings (FL)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herseth
     Higgins
     Hinchey
     Hinojosa
     Hobson
     Hoekstra
     Holden
     Holt
     Honda
     Hooley
     Hostettler
     Hoyer
     Hulshof
     Hunter
     Hyde
     Inglis (SC)
     Inslee
     Israel
     Issa
     Istook
     Jackson (IL)
     Jefferson
     Jenkins
     Jindal
     Johnson (CT)
     Johnson (IL)
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Keller
     Kelly
     Kennedy (MN)
     Kennedy (RI)
     Kildee
     Kilpatrick (MI)
     Kind
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     Kucinich
     Kuhl (NY)
     LaHood
     Langevin
     Lantos
     Larsen (WA)
     Latham
     LaTourette
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lofgren, Zoe
     Lowey
     Lucas
     Lungren, Daniel E.
     Lynch
     Mack
     Maloney
     Manzullo
     Marchant
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy
     McCaul (TX)
     McCollum (MN)
     McCotter
     McCrery
     McDermott
     McGovern
     McHenry
     McHugh
     McIntyre
     McKeon
     McKinney
     McMorris
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Menendez
     Mica
     Michaud
     Millender-McDonald
     Miller (FL)
     Miller (MI)
     Miller (NC)
     Miller, Gary
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Musgrave
     Myrick
     Nadler
     Napolitano
     Neal (MA)
     Neugebauer

[[Page 8610]]


Ney
Northup
Norwood
Nunes
Nussle
Oberstar
Obey
Olver
Ortiz
Osborne
Otter
Owens
Oxley
Pallone
Pascrell
Pastor
Payne
Pearce
Pelosi
Pence
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Pombo
Pomeroy
Porter
Price (GA)
Price (NC)
Pryce (OH)
Putnam
Radanovich
Rahall
Ramstad
Rangel
Regula
Rehberg
Reichert
Renzi
Reyes
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Ros-Lehtinen
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Ryan (WI)
Ryun (KS)
Sabo
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Saxton
Schakowsky
Schiff
Schwartz (PA)
Schwarz (MI)
Scott (GA)
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shuster
Simmons
Simpson
Skelton
Slaughter
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Sodrel
Solis
Souder
Spratt
Stearns
Strickland
Stupak
Sullivan
Sweeney
Tancredo
Tanner
Tauscher
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Tiahrt
Tiberi
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Upton
Van Hollen
Velazquez
Visclosky
Walden (OR)
Walsh
Wamp
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Westmoreland
Wexler
Whitfield
Wicker
Wilson (NM)
Wilson (SC)
Wolf
Woolsey
Wu
Wynn
Young (AK)
Young (FL)

                                NAYS--10

     Cooper
     Davis, Jo Ann
     DeFazio
     Flake
     Paul
     Rohrabacher
     Royce
     Sanders
     Stark
     Taylor (MS)

                             NOT VOTING--10

     Brown (OH)
     Diaz-Balart, L.
     Diaz-Balart, M.
     Drake
     Franks (AZ)
     Hastings (WA)
     Herger
     Jackson-Lee (TX)
     Larson (CT)
     Scott (VA)

                              {time}  1558

  Mrs. JO ANN DAVIS of Virginia and Mr. STARK changed their vote from 
``yea'' to ``nay.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. HERGER. Mr. Speaker, on rollcall No. 157 I was unavoidably 
detained. Had I been present, I would have voted ``yea.''
  Mrs. DRAKE. Mr. Speaker, on rollcall No. 157, I regret that I was 
unable to return quickly enough for this vote. I was at the Pentagon 
for an awards presentation for an environmental award presented to a 
Command at Naval Base Norfolk. Had I been present, I would have voted 
``yea.''

                          ____________________