[House Report 105-249]
[From the U.S. Government Publishing Office]



105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    105-249
_______________________________________________________________________


 
      THRIFT DEPOSITOR PROTECTION OVERSIGHT BOARD ABOLISHMENT ACT

                                _______
                                

 September 17, 1997.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

   Mr. Leach, from the Committee on Banking and Financial Services, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 2343]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Banking and Financial Services, to whom was 
referred the bill (H.R. 2343) to abolish the Thrift Depositor 
Protection Oversight Board, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.
  The amendment is as follows:
  Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Thrift Depositor Protection Oversight 
Board Abolishment Act''.

SEC. 2. ABOLISHMENT OF THE THRIFT DEPOSITOR PROTECTION OVERSIGHT BOARD.

  (a) In General.--Effective at the end of the 3-month period beginning 
on the date of enactment of this Act, the Thrift Depositor Protection 
Oversight Board established under section 21A of the Federal Home Loan 
Bank Act (hereafter in this section referred to as the ``Oversight 
Board'') is hereby abolished.
  (b) Disposition of Affairs.--
          (1) Power of chairperson.--Effective on the date of the 
        enactment of this Act, the Chairperson of the Oversight Board 
        (or the designee of the Chairperson) may exercise on behalf of 
        the Oversight Board any power of the Oversight Board necessary 
        to settle and conclude the affairs of the Oversight Board.
          (2) Availability of funds.--Funds available to the Oversight 
        Board shall be available to the Chairperson of the Oversight 
        Board to pay expenses incurred in carrying out the requirements 
        of paragraph (1).
  (c) Savings Provision.--
          (1) Existing rights, duties, and obligations not affected.--
        No provision of this Act shall be construed as affecting the 
        validity of any right, duty, or obligation of the United 
        States, the Oversight Board, the Resolution Trust Corporation, 
        or any other person which--
                  (A) arises under or pursuant to the Federal Home Loan 
                Bank Act, or any other provision of law applicable with 
                respect to the Oversight Board; and
                  (B) existed on the day before the abolishment of the 
                Oversight Board in accordance with subsection (a).
          (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Oversight Board with respect to any 
        function of the Oversight Board shall abate by reason of the 
        enactment of this Act.
          (3) Liabilities.--
                  (A) In general.--All liabilities arising out of the 
                operation of the Oversight Board between August 9, 
                1989, and the end of the 3-month period beginning on 
                the date of enactment of this Act shall remain the 
                direct liabilities of the United States.
                  (B) No substitution.--The Secretary of the Treasury 
                shall not be substituted for the Oversight Board as a 
                party to any such action or proceeding.
          (4) Continuations of orders, resolutions, determinations, and 
        regulations pertaining to the resolution funding corporation.--
                  (A) In general.--All orders, resolutions, 
                determinations, and regulations regarding the 
                Resolution Funding Corporation which--
                          (i) have been issued, made, and prescribed, 
                        or allowed to become effective by the Oversight 
                        Board, or by a court of competent jurisdiction, 
                        in the performance of functions which are 
                        transferred by this Act; and
                          (ii) are in effect at the end of the 3-month 
                        period beginning on the date of the enactment 
                        of this Act,
                shall continue in effect according to the terms of such 
                orders, resolutions, determinations, and regulations 
                until modified, terminated, set aside, or superseded in 
                accordance with applicable law.
                  (B) Enforceability of orders, resolutions, 
                determinations, and regulations before transfer.--
                Before the effective date of the transfer of the 
                authority and duties of the Resolution Funding 
                Corporation to the Secretary of the Treasury under 
                section 3, all orders, resolutions, determinations, and 
                regulations pertaining to the Resolution Funding 
                Corporation shall be enforceable by and against the 
                United States.
                  (C) Enforceability of orders, resolutions, 
                determinations, and regulations after transfer.--On and 
                after the effective date of the transfer of the 
                authority and duties of the Resolution Funding 
                Corporation to the Secretary of the Treasury, all 
                orders, resolutions, determinations, and regulations 
                pertaining to the Resolution Funding Corporation shall 
                be enforceable by and against the Secretary of the 
                Treasury.

SEC. 3. TRANSFER OF THRIFT DEPOSITOR PROTECTION OVERSIGHT BOARD 
                    AUTHORITY AND DUTIES OF RESOLUTION FUNDING 
                    CORPORATION TO THE SECRETARY OF THE TREASURY.

  The authority and duties of the Thrift Depositor Protection Oversight 
Board under sections 21A(a)(6)(I) and 21B of the Federal Home Loan Bank 
Act are hereby transferred to the Secretary of the Treasury (or the 
designee of the Secretary) as of the end of the 3-month period 
beginning on the date of enactment of this Act.

SEC. 4. MEMBERSHIP OF THE AFFORDABLE HOUSING ADVISORY BOARD.

  Effective on the date of enactment of this Act, section 14(b)(2) of 
the Resolution Trust Corporation Completion Act (12 U.S.C. 1831q note) 
is amended--
          (1) by striking subparagraph (C); and
          (2) by redesignating subparagraphs (D) and (E) as 
        subparagraphs (C) and (D), respectively.

SEC. 5. TIME OF MEETINGS OF THE AFFORDABLE HOUSING ADVISORY BOARD.

  (a) In General.--Section 14(b)(6)(A) of the Resolution Trust 
Corporation Completion Act (12 U.S.C. 1831q note) is amended--
          (1) by striking ``4 times a year, or more frequently if 
        requested by the Thrift Depositor Protection Oversight Board 
        or'' and inserting ``2 times a year or at the request of''; and
          (2) by striking the 2d sentence.
  (b) Clerical Amendment.--The heading for section 14(b)(6)(A) of the 
Resolution Trust Corporation Completion Act (12 U.S.C. 1831q note) is 
amended by striking ``and location''.

                          Purpose and Summary

    As its title suggests, the purpose of H.R. 2343, the Thrift 
Depositor Protection Oversight Board Abolishment Act (the Act), 
is to abolish the Thrift Depositor Protection Oversight Board 
(the Oversight Board). The Oversight Board is no longer needed 
given that its primary responsibilities of overseeing the 
Resolution Trust Corporation (RTC) was extinguished with the 
sunsetting of the RTC on December 31, 1995.
    The Oversight Board was first created in the Financial 
Institutions Reform, Recovery, and Enforcement Act (FIRREA) in 
1989. FIRREA was the federal government's response to the 
massive financial crisis of the savings and loan industry and 
its insolvent insurance fund, the Federal Savings and Loan 
Insurance Corporation. With the enactment of FIRREA, the 
Resolution Trust Corporation was created to close or sell the 
failed institutions transferred to it by the industry's new 
regulator, the Office of Thrift Supervision (OTS). Further, the 
RTC was tasked with selling the assets of failed thrifts. 
FIRREA also established the Resolution Funding Corporation 
(REFCorp), a mixed-ownership government corporation, for the 
purpose of providing financing for the RTC. The Oversight Board 
was created to oversee the RTC and its use of taxpayer funds, 
as well as the direct activities of REFCorp. The Oversight 
Board was charged with reviewing the RTC's overall strategies, 
policies, and goals and continuing to approve the RTC's 
financial plans, budgets, and financing requests. In addition, 
the Oversight Board was responsible for reviewing how effective 
the RTC managed and disposed of its enormous asset caseload, 
and for ensuring that the RTC was formulating and implementing 
policies responsive to various goals, such as closing insolvent 
thrifts at the least possible cost.
    With the termination of the RTC on December 31, 1995, the 
Oversight Board's remaining programmatic responsibilities are: 
(1) oversight of the REFCorp; and (2) through fiscal year 1998 
(October 1998), a non-voting membership on the Affordable 
Housing Advisory Board. The Affordable Housing Advisory Board, 
chaired by the designee of the Secretary of HUD, advises the 
FDIC on policies and programs related to the provision of 
affordable housing property, and sunsets on September 30, 1998. 
In addition, as long as the Oversight Board remains in 
existence, it has continuing administrative and reporting 
functions that will continue until the year 2030 when the last 
REFCorp bond matures.
    The Oversight Board's remaining programmatic tasks are 
formal and routine. However, as a separate governmental unit, 
the Oversight Board must generate all the regularly mandated 
agency filings in the course of performing its oversight of 
REFCorp. The legislation would transfer the REFCorp oversight 
responsibilities to the Secretary of the Treasury, and the 
Affordable Housing Advisory Board would be restructured to 
eliminate the non-voting seat held by the Oversight Board. 
Elimination of the Board could save over $250,000 a year in 
personnel and overhead costs for each of the remaining 33 years 
of the Board's life. In addition, H.R. 2343 would reduce the 
number of meetings the Affordable Housing Advisory Board must 
hold each year from four to two and delete the statutory 
requirement of having these meetings throughout the United 
States.

                  Legislative Background and Hearings

    Representative Leach introduced H.R. 2343 at the request of 
the Treasury Department on July 31, 1997. The full Committee 
held a hearing on H.R. 2343 on September 9, 1997. Testifying 
before the Committee was John Hawke, Treasury Under Secretary 
for Domestic Finance.

                   Committee Consideration and Votes

    On September 9, 1997, the Committee met in open session to 
mark up H.R. 2343, ``The Thrift Depositor Protection Oversight 
Board Abolishment Act.'' The Committee considered one amendment 
to the bill, accepting it by voice vote.
    The Committee then favorably reported H.R. 2343, and 
amended, to the full House by voice vote with a quorum present.

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings and recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(d) of rule XI of the Rules of the House of 
Representatives.

                        Constitutional Authority

    In compliance with clause 2(l)(4) of rule XI of the Rules 
of the House of Representatives, the constitutional authority 
for Congress to enact this legislation is derived from the 
interstate commerce clause (Clause 3, Section 8, Article I); 
the power ``to coin money'' and ``regulate the value thereof'' 
provided for in Clause 5, Section 8, Article I; the power to 
borrow money on the credit of the United States under Clause 2, 
Section 8, Article I; and the power to tax and spend for the 
general welfare of the United States under Clause 1, Section 8, 
Article 1.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                    Congressional Accountability Act

    The reporting requirement under section 102(b)(3) of the 
Congressional Accountability Act (P.L. 104-1) is inapplicable 
because this legislation does not relate to terms and 
conditions of employment or access to public services or 
accommodations.

    Congressional Budget Office Cost Estimate and Unfunded Mandates 
                                Analysis

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 17, 1997.
Hon. James A. Leach,
Chairman, Committee on Banking and Financial Services, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2343, a bill to 
terminate the Thrift Depositor Protection Oversight Board, and 
for other purposes.
    If you wish further details on these estimates, we will be 
pleased to provide them. The CBO staff contact is Mary 
Maginniss.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosures.

H.R. 2343--A bill to terminate the Thrift Depositor Protection 
        Oversight Board and for other purposes

    H.R. 2343 would dissolve the Thrift Depositor Protection 
Oversight Board and transfer its remaining responsibilities to 
the Department of the Treasury. The bill would also reduce from 
four to two the number of annual meetings the Affordable 
Housing Advisory Board must hold each year. CBO estimates that 
enacting H.R. 2343 would result in savings of about $250,000 
annually. Because the bill would affect direct spending, pay-
as-you-go procedures would apply. H.R. 2343 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform act and would not affect the budgets 
of state, local, or tribal governments.
    Current law requires the Oversight Board to monitor the 
operations and to provide funding for the Resolution Trust 
Corporation (RTC). The RTC was a temporary agency established 
to resolve thrift failures beginning in 1989. In late 1995 the 
RTC was dissolved and its remaining assets transferred to the 
Federal Deposit Insurance Corporation. The Oversight Board now 
retains responsibility for only two functions. The first is to 
oversee operations of the Resolution Funding Corporation 
(REFCORP), which issued bonds totaling $30 billion from 1989 to 
1991 as part of RTC's initial funding. Second, the Oversight 
Board also retains a nonvoting membership, through the end of 
1998, on the Affordable Housing Advisory Board. By terminating 
the Oversight Board, the bill would eliminate the annual costs 
for the one employee of the board who prepares periodic reports 
required of all distinct entities of the government and 
performs other routine functions.
    Based on information from the Treasury, transferring the 
statutory responsibilities of the Oversight Board to the 
Treasury would result in savings of about $250,000 annually and 
no significant additional cost to the Treasury. Because the 
Board has authority to pay its expenses without further 
appropriation, enacting the bill would reduce direct spending 
by an estimated $250,000 annually. Spending by the Treasury to 
carry out the routine functions of the Oversight Board would be 
subject to appropriation, and is expected to be minimal in any 
case. Reducing the number of times the Affordable Housing 
Advisory Board must meet annually is not expected to result in 
any significant savings.
    The CBO staff contact for this estimate is Mary Maginniss. 
This estimate was approved by Paul N. Van de Water, Assistant 
Director for Budget Analysis.

                      Section-by-Section Analysis

                         section 1. short title

    Section 1 designates the bill as the ``Thrift Depositor 
Protection Oversight Board Abolishment Act.''

  section 2. abolishment of the thrift depositor protection oversight 
                                 board

    Section 2 gives the Chairperson of the Oversight Board the 
power to settle an conclude the affairs of the Oversight Board. 
These powers include the ability to pay expenses incurred in 
carrying out the closing. This section also allows the 
Secretary of the Treasury to continue all orders, resolutions, 
determinations, and regulations pertaining to the Resolution 
Funding Corporation. In addition, the enforceability of orders, 
resolutions, determinations and regulations is transferred to 
the Secretary of the Treasury.

  section 3. transfer of thrift depositor protection oversight board 
authority and duties of resolution funding corporation to the secretary 
                            of the treasury

    Section 3 transfers all authority and duties of the Thrift 
Depositor Protection Oversight Board to the Secretary of the 
Treasury three months after the date of enactment.

     section 4. membership of the affordable housing advisory board

    Section 4 eliminates the Chairperson of the Thrift 
Depositor Protection Oversight Board as a member of the 
Affordable Housing Advisory Board.

  section 5. time of meetings of the affordable housing advisory board

    Section 5 amends the Congressional meeting mandates of the 
Affordable Housing Advisory Board to reduce the number of 
required annual meetings from four to two, and also eliminates 
the requirement for the Board to meet in different locations 
throughout the United States.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

     SECTION 14 OF THE RESOLUTION TRUST CORPORATION COMPLETION ACT

SEC. 14. CHANGES AFFECTING BOTH RTC AND FDIC AFFORDABLE HOUSING 
                    PROGRAMS.

  (a) * * *
          * * * * * * *
  (b) Affordable Housing Advisory Board.--
          (1) * * *
          (2) Membership.--The Advisory Board shall consist 
        of--
                  (A) the Secretary of Housing and Urban 
                Development;
                  (B) the Chairperson of the Board of Directors 
                of the Federal Deposit Insurance Corporation 
                (or the Chairperson's delegate), who shall be a 
                nonvoting member;
                  [(C) the Chairperson of the Thrift Depositor 
                Protection Oversight Board (or the 
                Chairperson's delegate), who shall be a 
                nonvoting member;]
                  [(D)] (C) 4 persons appointed by the 
                Secretary of Housing and Urban Development not 
                later than the expiration of the 90-day period 
                beginning on the date of the enactment of this 
                Act, who represent the interests of individuals 
                and organizations involved in using the 
                affordable housing programs (including 
                nonprofit organizations, public agencies, and 
                for-profit organizations that purchase 
                properties under the affordable housing 
                programs, organizations that provide technical 
                assistance regarding the affordable housing 
                programs, and organizations that represent the 
                interest of low- and moderate-income families); 
                and
                  [(E)] (D) 2 persons who are members of the 
                National Housing Advisory Board pursuant to 
                section 21A(d)(2)(B)(ii) of the Federal Home 
                Loan Bank Act (as in effect before the 
                effective date of the repeal under subsection 
                (c)(2)), who shall be appointed by such Board 
                before such effective date.
          * * * * * * *
          (6) Meetings.--
                  (A) Timing [and location].--The Advisory 
                Board shall meet [4 times a year, or more 
                frequently if requested by the Thrift Depositor 
                Protection Oversight Board or] 2 times a year 
                or at the request of the Board of Directors of 
                the Federal Deposit Insurance Corporation. [In 
                each year, the Advisory Board shall conduct 
                such meetings at various locations in different 
                regions of the United States in which 
                substantial residential property assets of the 
                Federal Deposit Insurance Corporation or the 
                Resolution Trust Corporation are located.] The 
                first meeting of the Advisory Board shall take 
                place not later than the expiration of the 90-
                day period beginning on the date of the 
                enactment of this Act.
                  (B) Advice.--The Advisory Board shall submit 
                information and advice resulting from each 
                meeting, in such form as the Board considers 
                appropriate, to the Thrift Depositor Protection 
                Oversight Board and the Board of Directors of 
                the Federal Deposit Insurance Corporation.
          * * * * * * *

                                
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