[House Report 108-50]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     108-50

======================================================================



 
              FEDERAL DEPOSIT INSURANCE REFORM ACT OF 2003

                                _______
                                

 March 27, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Oxley, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                   SUPPLEMENTAL AND DISSENTING VIEWS

                        [To accompany H.R. 522]

  The Committee on Financial Services, to whom was referred the 
bill (H.R. 522) to reform the Federal deposit insurance system, 
and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     1
Purpose and Summary..............................................    20
Background and Need for Legislation..............................    20
Hearings.........................................................    23
Committee Consideration..........................................    23
Committee Votes..................................................    23
Committee Oversight Findings.....................................    23
Performance Goals and Objectives.................................    24
New Budget Authority, Entitlement Authority, and Tax Expenditures    24
Committee Cost Estimate..........................................    24
Congressional Budget Office Cost Estimate........................24, 31
Federal Mandates Statement.......................................    31
Constitutional Authority Statement...............................    31
Applicability to Legislative Branch..............................    32
Section-by-Section Analysis......................................    32
Changes in Existing Law Made by the Bill, as Reported............    38
Supplemental and Dissenting Views..............................120, 121

                               Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Federal Deposit 
Insurance Reform Act of 2003''.
  (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.

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.

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 2003, $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 2005, 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 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).
                  ``(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 2003, $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.--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) 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''.
          (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 2003, 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 2003, 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 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 (II).
                          ``(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) Internal Study by the FDIC.--
          (1) Study required.--Concurrently with the study required to 
        be conducted by the Comptroller General under subsection (a), 
        the Federal Deposit Insurance Corporation shall conduct an 
        internal study of the same conditions and factors included in 
        the study under subsection (a).
          (2) Report to the congress.--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.
  (c) 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 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.
  (d) 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.
  (e) Study of Reserve Methodology and Accounting for Loss.--
          (1) Study required.--The Federal Deposit Insurance 
        Corporation, in consultation with the Comptroller General, 
        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, 2002, 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).
          (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, in consultation with the 
        Comptroller General, 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.

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 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.
  (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.

                          Purpose and Summary

    H.R. 522, the Federal Deposit Insurance Reform Act of 2003, 
will preserve the value of insured deposits at insured 
depository institutions, advance the national priority of 
enhancing retirement security for all Americans, and ensure 
that the value, benefit and costs of deposit insurance are 
allocated equitably and fairly.
    The bill merges the Bank Insurance Fund (BIF) and the 
Savings Association Insurance Fund (SAIF); increases the 
standard maximum deposit insurance limit from $100,000 to 
$130,000, and indexes it every 5 years for inflation; doubles 
the new coverage level for certain retirement accounts; and 
increases the coverage amount for in-State municipal deposits. 
Federally chartered credit unions are provided with parity in 
general standard maximum deposit insurance coverage, coverage 
for retirement accounts and municipal deposits.
    H.R. 522 removes legal constraints on the authority of the 
Federal Deposit Insurance Corporation (FDIC) to charge risk-
based premium assessments, so that all insured depository 
institutions pay for the value and benefit of deposit insurance 
fairly and equitably.
    The legislation authorizes the FDIC to set the ratio of 
reserves to estimated insured deposits within a range of 1.15 
to 1.40 percent, replacing the 1.25 percent ``hard target'' 
mandated by current law.
    The bill also returns assessments in the form of refunds, 
credits, and dividends to insured depository institutions. 
Dividends are provided to qualified insured depository 
institutions whenever specified reserve ratios are exceeded.
    Finally, the legislation directs the FDIC to study its 
administrative and managerial processes and alternative means 
for administering the deposit insurance system. These studies 
will ensure that the deposit insurance fund and the overall 
deposit insurance system are managed and operated as 
efficiently and as effectively as possible.

                  Background and Need for Legislation

    Federal deposit insurance was created by Congress in 1934 
and significantly modified in 1989 and 1991 in response to the 
savings and loan and bank crises. All banks and savings 
associations are required to carry Federal deposit insurance.
    The National Credit Union Share Insurance Fund (NCUSIF) was 
created in 1970. This fund insures ``share'' accounts at credit 
unions and is administered by the National Credit Union 
Administration (NCUA). All Federally chartered credit unions 
must belong to NCUSIF; membership is optional for State 
chartered credit unions.
    Deposit insurance makes deposits safe by assuring 
depositors that up to $100,000 will be available to them to 
cover their deposits even if their insured depository 
institution fails. It protects depositors from a sudden and 
unforeseen loss of wealth. It also protects the economy due to 
a loss of liquidity in the financial services system.
    Currently, the FDIC provides deposit insurance through two 
funds, the BIF and the SAIF. These funds are maintained in the 
U.S. Treasury and both earn interest income from investment in 
non-marketable Treasury securities.
    The Federal deposit insurance system has served the Nation 
well for the last 69 years--public confidence and stability in 
the Nation's banking system were preserved through one of the 
largest banking crises since the Federally insured deposit 
system originated. During the crisis of the 1980's and the 
1990's, the FDIC and the Resolution Trust Corporation (RTC) 
resolved 2,362 failures of insured depository institutions 
involving more than $700 billion in assets, with no bank runs, 
no panics, no disruptions to the financial markets, and no 
debilitating impact on overall economic activity.
    After conducting a comprehensive study of the overall 
deposit insurance system, the FDIC published a report in April 
2001 (Keeping the Promise: Recommendations for Deposit 
Insurance Reform, April 2001), that identified 4 structural 
deficiencies that warranted legislative consideration:
    (1) Deposit insurance is provided by two insurance funds at 
potentially different prices;
    (2) Under current law, deposit insurance cannot be priced 
effectively to reflect risk;
    (3) Deposit insurance premiums are highest at the wrong 
point in the business cycle; and
    (4) The value of insurance coverage does not keep pace with 
inflation.
    Hearings before the Subcommittee on Financial Institutions 
and Consumer Credit during the 107th Congress yielded a broad 
consensus among the Bush Administration, the Federal and State 
banking and thrift regulators, and industry and consumer groups 
that the deposit insurance system could be improved and 
strengthened to make it more responsive to the cyclical nature 
of lending and deposit taking activities and the post-Gramm-
Leach-Bliley financial and economic environment.
    Merging the BIF and the SAIF eliminates potential 
disparities in bank and thrift risk-based premium assessments 
and the administrative burden of maintaining and operating two 
separate funds.
    Current law limits the ability of the FDIC to assess 
premiums on depository institutions above amounts needed to 
achieve and maintain the existing ratio of reserves to 
estimated insured deposits at 1.25 percent. Currently over 90 
percent of the industry does not pay for deposit insurance, and 
more than 900 institutions that were chartered within the last 
6 years have never paid any premiums. Current law also limits 
the FDIC's ability to charge riskier institutions, new 
entrants, and institutions growing at excessive rates 
appropriate premiums based on the risks they present to the 
fund. The current premium restrictions require safer 
institutions to subsidize riskier institutions unnecessarily, 
and new entrants and institutions that undergo significant 
growth are allowed to avoid paying premiums.
    Further, the current system's ``pro-cyclical'' bias results 
in sharply higher premiums being assessed at ``down'' points in 
the economic cycle, when banks can least afford to pay them and 
the economy could most benefit from additional liquidity in the 
banking system.
    These inequities are addressed in H.R. 522 by giving the 
FDIC greater discretion to identify the relative risks all 
institutions present to the deposit insurance fund and set 
appropriate risk-based premiums. With this authority, the FDIC 
can better manage the insurance fund relative to industry and 
economic cyclicality.
    The current deposit insurance system's emphasis on 
maintaining the 1.25 percent designated reserve ratio (DRR) and 
the requirement that a 23 basis point premium be assessed 
whenever the DRR drops and remains below this level for a year 
is pro-cyclical and creates the potential for volatile premium 
swings. This problem would also more than likely result in the 
industry paying high premiums when both banks and the economy 
could least afford it, and it could sustain and deepen an 
economic downturn.
    The legislation gives the FDIC the discretion to set the 
DRR within a range of 1.15 to 1.40 percent, addressing the 
system's volatility and avoiding sharp premium swings. This 
flexibility gives the FDIC better tools with which to manage 
the deposit insurance fund during various economic 
environments.
    The Committee found that the overall value of basic 
insurance coverage had eroded over the last 23 years. If 
coverage had kept pace with inflation since 1980, when levels 
were last adjusted, it would now be at more than $200,000; and 
if it were adjusted for the $40,000 coverage level in effect in 
1974 and indexed for inflation from that point forward, the 
level would be more than $140,000. The Committee believes that 
increasing the maximum standard deposit insurance amount to 
$130,000 is a modest step and indexing the new amount every 5 
years appropriately restores and maintains the value of deposit 
insurance coverage.
    The current deposit insurance scheme provides inadequate 
protection for in-State municipal deposits and certain 
retirement account deposits. The legislation doubles the 
coverage limit for insured retirement account deposits in order 
to enhance the retirement security of senior citizens and those 
planning for retirement. Coverage limits for in-State municipal 
deposits are also significantly expanded to ensure that more 
municipal deposits can be kept in local financial institutions 
and used to meet local credit needs.
    In sum, this legislation will respond to these issues by:
     preserving the value of insured deposits at 
insured depository institutions;
     strengthening the Nation's insured depository 
institutions, especially small banks, thrifts, and credit 
unions;
     ensuring that the Federal deposit insurance system 
does not harm the ability of insured depository institutions to 
meet the Nation's credit needs at all stages of the economic 
cycle;
     ensuring that the Federal deposit insurance system 
remains strong and complements the Federal and State regulatory 
structure that helps to maintain the safety and soundness of 
the Nation's banks, thrifts, and credit unions;
     advancing the national priority of enhancing 
retirement security for all Americans;
     ensuring that the value, benefit and costs of 
deposit insurance are allocated equitably and fairly; and,
     modernizing the Federal deposit insurance system 
by merging the BIF with the SAIF and reinforcing the risk-based 
nature of the system.

                                Hearings

    The Committee on Financial Services held a legislative 
hearing on H.R. 522, the Federal Deposit Insurance Reform Act 
of 2003, on March 4, 2003, at which the Chairman of the Federal 
Deposit Insurance Corporation, Donald E. Powell, testified.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 13, 2003 and ordered H.R. 522 reported to the House with 
a favorable recommendation, with an amendment, by a voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. No 
record votes were taken with in conjunction with the 
consideration of this legislation. A motion by Mr. Oxley to 
report the bill to the House with a favorable recommendation 
was agreed to by a voice vote.
    The following amendments were considered:
          An amendment in the nature of a substitute by Mr. 
        Oxley, no. 1, making technical changes and clarifying 
        several provisions to the bill, was agreed to by a 
        voice vote, as amended.
          An amendment to the amendment in the nature of a 
        substitute offered by Mr. Ose, no. 1a, maintaining 
        coverage at $100,000 per account and striking the 
        inflation adjustment, part 1 (consisting of paragraphs 
        1 and 4), was not agreed to by a voice vote and part 2 
        (consisting of paragraphs 2, 3, 5, and 6), tripling 
        coverage for retirement account from the base, was not 
        agreed to by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute offered by Mr. Meeks of New York, no. 1b, 
        requiring a reduction in dividends and credits for 
        depository institutions that substantially dilute fund 
        reserves, was withdrawn.
          An amendment to the amendment in the nature of a 
        substitute offered by Mr. Gonzalez, no. 1c, requiring a 
        bi-annual FDIC survey and report on the unbanked, was 
        agreed to by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute offered by Mr. Royce, no. 1d, striking 
        increase in deposit coverage, was not agreed to by a 
        voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee made findings that are 
reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    The bill will improve the deposit insurance system while 
keeping it well-funded, as well as reflect more accurately the 
risks to the fund that are imposed by institutions. As a 
result, the fund will be less susceptible to problems caused by 
changes in the economy and will better serve depository 
institutions and depositors.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of budget authority, entitlement authority, or 
tax expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 1974 
for H.R. 3717 in the 107th Congress and reprinted below as the 
Committee's cost estimate.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974 for H.R. 
3717 in the 107th Congress and reprinted below as the 
Committee's cost estimate. The Committee further estimates that 
the estimated cost to the Federal government for fiscal year 
2008 will be the same in both budget authority and outlays as 
fiscal year 2007.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 3717--Federal Deposit Insurance Reform Act of 2002

    Summary: H.R. 3717 would amend provisions of banking and 
credit union law to reform the deposit insurance system. 
Specifically, the bill would increase insurance coverage for 
insured accounts from $100,000 per account to $130,000 for most 
accounts (with higher levels of coverage for retirement 
accounts and municipal deposits). Over time, the coverage limit 
for insured deposits would increase to account for inflation. 
Those provisions of the bill would affect deposits held by 
banks and thrifts, which are insured by the Federal Deposit 
Insurance Corporation (FDIC), as well as those held by credit 
unions, which are insured by the National Credit Union 
Administration (NCUA). In addition, the bill would merge the 
Bank Insurance Fund (BIF) and the Savings Association Insurance 
Fund (SAIF) to create a new Deposit Insurance Fund (DIF), to 
pay the claims of depositors of failed banks and thrifts. 
Finally, H.R. 3717 would amend the conditions under which banks 
and thrifts would pay insurance premiums to the FDIC, which 
administers the funds.
    CBO estimates that H.R. 3717 would increase both the costs 
of resolving failed financial institutions and the income from 
premiums paid by financial institutions. During the 2003-2012 
period, the additional premiums that would be collected under 
the bill would more than offset the added spending. On balance, 
CBO estimates that H.R. 3717 would reduce net direct spending 
by $700 million over the 2003-2012 period. Because H.R. 3717 
would affect direct spending, pay-as-you-go procedures would 
apply.
    H.R. 3717 contains an intergovernmental mandate as defined 
in the Unfunded Mandates Reform Act (UMRA), but CBO estimates 
that the costs, if any, to comply with the requirement would 
not exceed the threshold established in UMRA ($58 million in 
2002, adjusted annually for inflation).
    The bill also contains private-sector mandates as defined 
by UMRA. CBO estimates that the direct cost of those mandates 
would be well above the annual threshold specified in UMRA 
($115 million in 2002, adjusted annually for inflation), but we 
do not have sufficient information to provide a precise 
estimate of the aggregate cost.
    Estimated cost to the Federal Government: The estimate 
budgetary impact of H.R. 3717 is shown in the following table. 
The costs of this legislation fall within budget function 370 
(commerce and housing credit).

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year in millions of dollars--
                                                          ------------------------------------------------------
                                                              2003       2004       2005       2006       2007
----------------------------------------------------------------------------------------------------------------
                                                 DIRECT SPENDING

FDIC and NCUA spending under current law:
    Estimated budget authority...........................        -31        -33        -34        -35        -36
    Estimated outlays....................................      1,662      1,337      1,544      1,746      1,694
Proposed changes to FDIC spending:
    Estimated budget authority...........................          0          0          0          0          0
    Estimated outlays....................................     -1,000       -400          0        -50        200
Proposed changes to NCUA spending:
    Estimated budget authority...........................          0          0          0          0          0
    Estimated outlays....................................       -500         25         25       -125         25
Total changes under H.R. 3717:
    Estimated budget authority...........................          0          0          0          0          0
    Estimated outlays....................................     -1,500       -375         25       -175        225
FDIC and NCUA spending under H.R. 3717:
    Estimated budget authority...........................        -31        -33        -34        -35        -36
    Estimated outlays....................................        162        962      1,569      1,571      1,919
----------------------------------------------------------------------------------------------------------------

Basis of estimate

    Two federal agencies are primarily responsible for the 
deposit insurance system. The FDIC insures the deposits in 
banks with the BIF and the deposits of thrifts with the SAIF. 
The National Credit Union Administration insures the deposits 
in credit unions (referred to as shares) with the Share 
Insurance Fund. When a financial institution fails, the FDIC 
and the NCUA use the insurance funds to reimburse the insured 
depositors of the failed institution. These agencies then sell 
the assets of the failed institution and deposit any money 
recovered into the insurance funds. CBO estimates that H.R. 
3717 would increase both the cost of resolving failed banks and 
the premiums paid by financial institutions. Over the 2003-2012 
period, we estimate that the added premiums paid by financial 
institutions would more than offset the increase in outlays to 
resolve failed financial institutions. Adding these effects 
together, we estimate that enacting H.R. 3717 would result in a 
net decrease in direct spending of about $700 million over the 
2003-2012 period. The major components of this estimate are 
explained below.

            Increase in the cost of resolving failed financial 
                    institutions
    H.R. 3717 would increase deposit insurance coverage from 
$100,000 to $130,000 for most accounts, and to $260,000 for 
employee benefit plans. Coverage for in-state municipal 
deposits would be the lesser of $5 million or 80 percent of any 
deposits above $130,000. Such increases would apply to deposits 
held by credit unions as well as banks and thrifts. In 
addition, the bill would require the FDIC and NCUA to increase 
deposit insurance coverage every five years beginning January 
1, 2006, to account for inflation. (According to committee 
staff, the intent of section 3 of H.R. 3717 is to increase 
deposit insurance coverage in 2006 and 2011 to account for 
inflation. Despite a drafting error in this section, CBO 
assumes that such increases would occur.)
    By 2003, we expect that insured deposits will total more 
than $3.2 trillion under current law. Based on information from 
the FDIC and the experience of past increases in deposit 
insurance coverage, CBO estimates that H.R. 3717 would increase 
the deposits insured by the FDIC by about $325 billion--or 
around 10 percent. CBO estimates that about $33 billion of that 
amount would result from new deposits attracted to banks and 
thrifts as a result of the expanded coverage, an increase of 
about 1 percent. We expect that the assets of failed banks and 
thrifts would increase correspondingly--by about 1 percent. In 
2003, we expect assets of failed banks and thrifts to be $3.65 
billion under current law; such assets would increase slightly 
under the bill.
    By insuring deposits that are currently uninsured, the bill 
would increase the liability of the FDIC and NCUA without 
significantly increasing the assets of institutions that will 
fail in the future. Under current law, we expect the FDIC's net 
losses on failed institutions to total about $12.6 billion over 
the 2003-2012 period. (We project that gross losses of $51.0 
billion would be offset, in part, by recoveries of $38.4 
billion from disposition of the institutions' assets.) Based on 
historical patterns of losses from failed institutions, CBO 
estimates that increasing insured deposits by about 10 percent 
would increase losses by about 10 percent over the long term. 
But over the next 10 years outlays would grow more rapidly 
because disposal of the assets of failed banks often takes many 
years. As a result, CBO estimates H.R. 3717 would increase the 
FDIC's net outlays to resolve failed banks and thrifts by about 
$2.7 billion over the 2003-2012 period. Similarly, we estimate 
that enacting H.R. 3717 would increase NCUA's net outlays to 
resolve failed credit unions by about $100 million over the 
2003-2012 period.
    By increasing deposit insurance coverage, H.R. 3717 could 
reduce incentives of depositors to monitor the behavior of 
financial institutions. Over the long term, this could lead to 
increased risk-taking by those institutions and ultimately to 
higher losses. On the other hand, if the DIF incurs larger 
losses to resolve failed banks and thrifts, H.R. 3717 would 
give the FDIC the flexibility to set premiums so as to restore 
the balances in the fund over a few years, thus allowing the 
agency to recover from large losses without imperiling other 
institutions. This new authority could reduce future losses. 
CBO has no basis for estimating the magnitude of either of 
these effects. We expect, however, that any changes in the 
costs of resolving failed institutions would eventually be 
borne by banks and thrifts through premiums.

            Increase in premiums paid to the FDIC by financial 
                    institutions
    Several provisions of H.R. 3717 would affect the total 
amount of premiums collected by the FDIC. Increasing the size 
of insured accounts would lead to increased collections. 
Considered separately, merging the BIF and SAIF and providing 
the FDIC with increased discretion to set regulations for 
premium assessments would tend to reduce collections relative 
to CBO's baseline assumptions. Finally, establishing credits 
that certain institutions could use to pay the FDIC assessments 
in lieu of cash would also reduce collections.
    The amount of additional premiums that banks and thrifts 
would pay through the combined effects of all these provisions 
of H.R. 3717 would depend on the DIF's balance in each year, 
which in turn would depend on the costs of resolving failed 
institutions. To estimate the effects of the bill's provisions 
on premium collections, CBO considered several thousand 
scenarios of the magnitude and timing of possible losses to the 
FDIC and resulting premiums collected under the bill. Because 
the fund balance in any given year depends on the losses of all 
prior years, each scenario included an estimate of losses over 
the entire 2003-2012 period. Applying a probability 
distribution to those loss scenarios, CBO estimated premium 
income to the government under H.R. 3717 reflecting the wide 
range of uncertainty about future costs of resolving failed 
financial institutions.
    Overall, CBO estimates that the net effect of these 
provisions on deposit insurance premiums would be an increase 
in collections of about $2.8 billion over the next 10 years, 
slightly more than our projected increase in the FDIC's costs 
to resolve failed financial institutions. (We estimate that the 
FDIC will collect about $12 billion in premiums from members 
over the 2003-2012 period under current law.) Each of the 
bill's provisions that would have an impact on premium 
assessments is described below.
    Increasing Deposit Insurance Coverage. Expanding deposit 
insurance coverage would result in increased premiums for the 
FDIC because premiums are based on the amount of insured 
deposits. CBO estimates that the increase in coverage would 
raise the amount of insured deposits by about 10 percent. But 
the bill would also give the FDIC more discretion in assessing 
premiums, which CBO expects would offset part of the impact of 
the increased coverage.
    Increasing the FDIC's Regulatory Discretion. Under current 
law, the FDIC determines when to assess insurance premiums by 
calculating a figure known as the designated reserve ratio 
(DRR) for the BIF and SAIF. The DRR represents the ratio of the 
fund's balances to total insured deposits. Under current law, 
the FDIC is required to assess premiums so as to maintain the 
DRR at all times, but under the bill, the agency would be 
authorized to establish a restoration plan of up to three years 
to gradually collect sufficient premiums to maintain the DRR at 
the desired level.
    Designated Reserve Ratio (DRR). The DRR is statutorily set 
at 1.25 percent of insured deposits. If the reserve ratio of 
either fund falls below that point, the FDIC assesses 
institutions that are covered by that fund until the reserve 
ratio reaches at least 1.25 percent. H.R. 3717 would eliminate 
the requirement that the DRR be 1.25 percent for the FDIC's 
insurance funds and, instead, allow the FDIC the discretion to 
set the DRR between 1.15 percent and 1.4 percent, inclusive. 
The bill would require the FDIC to set the DRR at least 
annually and at other times as it deems appropriate. The bill 
also would require the board of directors of the FDIC to 
consider increasing the DRR during more favorable economic 
conditions and reducing the DRR during less favorable economic 
conditions, notwithstanding the risk of loss that may occur 
under such conditions.
    Based on the actions of the NCUA when it was given 
discretion to set such a ratio, CBO expects that the FDIC would 
set the DRR at 1.25 percent for 2003 and adjust it annually as 
conditions warrant. To maintain stability in the banking 
system, we expect the FDIC would set the DRR within a 
relatively narrow range around 1.25 percent, except under 
extreme conditions. In fact, the bill would require the FDIC to 
return some collections (referred to in the bill as dividends) 
if the reserve ratio of the DIF exceeds 1.35 percent. In this 
event, the FDIC would be required to refund half of the amount 
in the fund that is above the amount necessary to maintain 1.35 
percent. If the DRR were to exceed 1.4 percent, the FDIC would 
be required to refund enough to institutions to reduce the 
ratio below 1.4 percent.
    Restoration Plans. Under current law, the FDIC must charge 
assessments to return the funds to a level above the DRR within 
one year. H.R. 3717 could delay some of those assessments by 
allowing the FDIC to return the fund to a level above the DRR 
within three years.
    If the FDIC projects that the reserve ratio of the DIF will 
fall below the DRR, H.R. 3717 would require it to establish a 
restoration plan to return the reserve ratio to the DRR within 
three years. If the FDIC projects that the reserve ratio of the 
DIF will fall below 1 percent, H.R. 3717 would require the FDIC 
to establish a restoration plan to return the reserve ratio to 
1 percent within two years and return the reserve ratio to the 
DRR within three years thereafter. The flexibility to set 
restoration plans would reduce the assessment income of the 
FDIC because it could take up to five years to return to the 
DRR, and government collections would be below baseline levels 
during this period. On the other hand, this provision of H.R. 
3717 might provide the FDIC the discretion necessary to recover 
from a large loss in the fund without imperiling other 
institutions.
    Allowing the FDIC discretion over when premiums are charged 
would reduce total collections below the level that would be 
experienced without that discretion. However, CBO estimates 
that such reductions would be more than offset by the premium 
increases resulting from the increase in deposit insurance 
coverage.
    Merging BIF and SAIF. H.R. 3717 would require the FDIC to 
merge the Bank Insurance Fund and the Savings Association 
Insurance Fund and create a new Deposit Insurance Fund. By 
2003, CBO expects the net worth of the combined fund will be 
about $42 billion. By itself, merging the funds would delay the 
collection of premiums on institutions insured by the BIF. 
Although the BIF is much larger than the SAIF, the reserve 
ratio of the BIF is lower--1.26 percent--due to rapid growth in 
insured deposits and the costs of recent bank failures. Under 
current law, we expect the FDIC to begin charging fees to 
institutions insured by the BIF in 2003. The reserve ratio of 
the combined fund would be about 1.3 percent, and in the 
absence of other changes made by the bill, the FDIC would not 
have to assess higher premiums in 2003 to maintain the reserve 
ratio at the designated level.
    Credits for Future Assessments. The bill would require the 
FDIC to provide certain banks and thrifts with credits against 
future assessments, based on their payments to the BIF or SAIF 
prior to 1997. CBO expects that the use of those credits would 
reduce the amount of future collections by the DIF.
    Under the bill, credits would equal 12 basis points (0.12 
percent) of the combined assessment base of the BIF and SAIF as 
of December 31, 2001. Based on information from the FDIC, CBO 
estimates that the credits would total nearly $5.4 billion. The 
credits would be allocated to each institution based on their 
market share as of December 31, 1996. Institutions established 
after that date would be ineligible for credits against their 
future assessments. The bill would prohibit institutions from 
using credits whenever the reserve ratio of the fund is less 
that the DRR or when the DRR is less than 1.25 percent.
    H.R. 3717 also would limit the use of credits by 
institutions that are not well capitalized, or that exhibit 
financial, operational, or compliance weaknesses that range 
from moderately severe to unsatisfactory. Under the bill, such 
institutions could use no more in credits than the average 
assessment on all depository institutions for that period. In 
addition, because the least risky institutions (i.e., those 
that are well capitalized and do not exhibit those weaknesses) 
would be assessed no more than one basis point, their use of 
credits would be effectively constrained. Hence, CBO estimates 
that more than half of the credits would not be used during the 
2003-2012 period and would be available to reduce collections 
by the FDIC in subsequent years.

            Increase in premiums paid to NCUA by financial institutions
    Under current law, credit unions must pay the NCUA 1 
percent of their net change in deposits each year. The NCUA 
provides rebates to credit unions if the balance in the share 
insurance fund exceeds 1.3 percent of insured deposits. CBO 
estimates that the NCUA will collect net premiums of about $2.4 
billion from its members over the 2003-2012 period.
    Based on information from the NCUA, CBO expects that H.R. 
3717 would extend insurance coverage to about $38 billion in 
currently uninsured deposits in 2003 and that the higher 
insurance levels would attract another $4 billion in new 
deposits that year. Because these added amounts would reduce 
the ratio of insured deposits to fund balances below 1.3 
percent in 2003, H.R. 3717 would reduce the amount of the 
rebate that the NCUA would otherwise provide that year.
    CBO estimates that, under the bill, the net premiums 
collected by the NCUA would increase by $700 million over the 
2003-2012 period. About $500 million of that amount would be 
realized in 2003. The premiums collected for the expanded 
insurance coverage would more than offset the estimated 
additional costs to the NCUA of $100 million over the next 10 
years.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays that are subject to pay-as-you-go procedures 
are shown in the following table. For the purposes of enforcing 
pay-as-you-go procedures, only the effects through fiscal year 
2006 are counted.
    Section 252 of the Balanced Budget and Emergency Deficit 
Control Act exempts from pay-as-you-go procedures any changes 
in outlays resulting from the ``full funding of, and 
continuation of, the deposit insurance guarantee commitment in 
effect under current estimates.'' Increasing deposit insurance 
coverage is not part of the current guarantee commitment, and 
changing the premiums paid by banks and thrifts is not the type 
of change necessary for the continuation of the current 
guarantee commitment. Hence, CBO believes that the pay-as-you-
go exemption for deposit insurance would not apply to H.R. 
3717.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          By fiscal year, in millions of dollars--
                                                                   -------------------------------------------------------------------------------------
                                                                     2002     2003      2004    2005    2006    2007   2008   2009   2010   2011    2012
--------------------------------------------------------------------------------------------------------------------------------------------------------
Changes in outlays................................................      0     -1,500     -375     25     -175    225    325    325    275     -50    225
Changes in receipts...............................................                                  Not applicable
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Estimated impact on state, local, and tribal governments: 
H.R. 3717 would preempt certain state laws regarding statutes 
of limitations by shortening the time allowed for insured 
depository institutions or the FDIC to file claims related to 
overpayments or late payments of assessments. Such a preemption 
would be an intergovernmental mandate as defined in UMRA. 
Because the mandate imposes no duty on states that would result 
in additional spending, CBO estimates that the costs of 
complying with the mandate would not exceed the threshold 
established in UMRA ($58 million in 2002, adjusted annually for 
inflation).
    Estimated impact on the private sector: H.R. 3717 contains 
private-sector mandates as defined by UMRA. CBO estimates that 
the direct cost of those mandates would be well above the 
annual threshold established by UMRA for private-sector 
mandates ($115 million in 2002, adjusted annually for 
inflation). We do not have sufficient information to provide a 
precise estimate of the aggregate cost because of uncertainties 
about how certain regulations would be implemented.

            Banks and savings associations
    Commercial banks and savings associations must have federal 
deposit insurance. CBO, therefore, considers changes in the 
federal deposit insurance system that increase requirements on 
those institutions to be private-sector mandates under UMRA. 
Specifically, the bill would increase federal insurance 
coverage for insured depository accounts. That increase in 
coverage would require banks and savings associations to pay 
more in deposit insurance premiums.
    H.R. 3717 also would change the conditions under which 
banks and savings associations would pay insurance premiums to 
the FDIC. Under current law, banks and savings associations in 
the lowest risk category do not have to pay any deposit 
insurance premiums when their deposit insurance fund (BIF or 
SAIF) is above the designated reserve ratio of 1.25 percent of 
insured deposits. The bill would require that all banks and 
savings associations pay premiums for deposit insurance 
regardless of the reserve ratio. In addition, the bill would 
authorize the FDIC to charge fees to banks and thrifts that 
increase their net deposits more rapidly than the FDIC 
determines to be appropriate. The FDIC has indicated that 
determining the criteria for deciding whether growth is 
inappropriate would be difficult. At this time, CBO has no 
basis for estimating the amount of such fees.
    CBO estimates that, as a result of the increased deposit 
insurance coverage and the requirement that all banks and 
savings associations pay deposit insurance premiums regardless 
of the reserve ratio, those institutions would have to pay an 
additional $1 billion in premiums in fiscal year 2003. The 
additional premium payments would total about $2.1 billion over 
the first five years the mandate is in effect.

            Credit unions
    Because the bill would increase the coverage of insured 
accounts for federally insured credit unions, those credit 
unions would pay higher premiums. CBO estimates that those 
institutions would pay an additional $500 million in fiscal 
year 2003. The additional premium payments would total about 
$600 million for the first five years the increased coverage is 
in effect.
    Estimate prepared by: Federal costs: Mark Hadley and Judith 
Ruud; impact on state, local, and tribal governments: Susan 
Sieg Tompkins; impact on the private sector: Judith Ruud.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the cost estimate provided by the 
Congressional Budget Office pursuant to section 402 of the 
Congressional Budget Act of 1974 was not timely submitted to 
the Committee. The Chairman of the Committee will cause such 
estimate to be printed in the Congressional Record when it is 
available.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act for H.R. 3717 in the 107th Congress and reprinted as the 
Committee's cost estimate.

                      Advisory Committee Statement

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

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
defense and general welfare of the United States), and clause 3 
(relating to the power to regulate foreign and interstate 
commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short Title; Table of contents

    This section establishes the short title of the bill, the 
``Federal Deposit Insurance Reform Act of 2003,'' and provides 
a table of contents.

Section 2. Merging the BIF and SAIF

    This section amends provisions of the Federal Deposit 
Insurance Act to merge the Bank Insurance Fund and the Savings 
Association Insurance Fund. The section transfers each fund's 
respective assets and liabilities into a newly created Deposit 
Insurance Fund (DIF).
    The section gives the FDIC at least 90 days after the bill 
is enacted to complete the merger of the BIF and SAIF. The 
effective date of the merger would be the first day of the next 
calendar quarter after the grace period elapses. For example, 
assuming the bill is enacted on March 10 the FDIC would have 
until June 8 to complete the merger, and all transactions would 
become operationally effective as of July 1.

Section 3. Increase in deposit insurance coverage

    This section provides for a higher level of deposit 
insurance coverage and an inflation index for general 
depositors, individual retirement accounts, and municipalities. 
Further, it expands coverage to employee benefit plans. Credit 
unions are provided with complete parity in coverage with other 
insured depository institutions.
    The section also eliminates the $100,000 deposit insurance 
limit on accounts at insured depository institutions and 
replaces it with a new standard maximum deposit insurance limit 
of $130,000.
    The section further provides that, beginning January 1, 
2006, the new standard maximum deposit insurance limit would be 
subject to a 5 year cost of living adjustment, calculated 
according to the Personal Consumption Expenditures Chain-Type 
Index (PCE) published by the Department of Commerce and rounded 
to the nearest $10,000. The FDIC and National Credit Union 
Administration (NCUA) Boards of Directors are required to 
publish the new standard maximum deposit insurance amount in 
the Federal Register and provide a corresponding report to 
Congress within 6 months of the new calculation. Also, the five 
year inflation-adjusted standard maximum amount would 
automatically increase unless a Congressional act provides 
otherwise. The new standard amount would take effect on January 
1 of the year immediately succeeding the calendar year in which 
the new amount is calculated.
    The section also requires institutions to provide pass 
through coverage for employee benefit plans. However, 
institutions that are not well-capitalized or adequately-
capitalized may not accept employee benefit plan deposits.
    The section also doubles the new standard maximum deposit 
insurance limit for certain retirement accounts to $260,000.
    Finally, this section increases coverage for in-State 
municipal deposits to the lesser of $2 million or the sum of 
the new standard coverage amount plus 80 percent of the amount 
of deposits in excess of the new standard, and provides that no 
State may deny to insured depository institutions within its 
jurisdiction the authority to accept insured in-State municipal 
deposits, or prohibit the making of such deposits in such 
institutions by any in-State municipal depositor.

Section 4. Setting assessments and repeal of special rules relating to 
        minimum assessments and free deposit insurance

    This section allows the FDIC Board to set assessments in 
such amounts as it may determine to be necessary or appropriate 
in order to maintain the reserve ratio at the designated 
reserve ratio. This provision also eliminates the existing 
restrictions on the FDIC's authority to levy assessments on any 
institution above amounts needed to achieve and maintain the 
existing DRR of 1.25 percent. In effect, the minimum statutory 
rate (23 basis point cliff rate) is eliminated.
    This section establishes a 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 
FDIC's risk-based assessment system. This section also provides 
that no depository institution will be barred from the lowest-
risk category solely because of size. The one basis point rate 
does not apply during any period in which the DIF's reserve 
ratio is less than 1.15 percent of aggregate insured deposits.
    In testimony before the Subcommittee on Financial 
Institutions, FDIC Chairman Donald Powell stated that:

          Using the current system as a starting point, I 
        believe that the FDIC should consider additional 
        objective financial indicators, based upon the kinds of 
        information that banks and thrifts already report, to 
        distinguish and price for risk more accurately within 
        the existing least-risk (1A) category. The sample 
        ``scorecard'' included in the FDIC's April 2001 report 
        represents the right kind of approach. (Hearing before 
        the Subcommittee on Financial Institutions and Consumer 
        Credit, Viewpoints of the FDIC and Select Industry 
        Experts on Deposit Insurance Reform, Oct. 17, 2001, 
        Serial no. 107-47, p. 5.)

    This scorecard example showed the lowest-risk category, 
1A+, contained approximately 42 percent of all banks. The 
Committee looked to these examples, and the distribution of 
banks (including size, charter, and governance) within each of 
the 1A subcategories, as a basis for this provision. This 
section provides a necessary balance between the expanded 
authority and discretion of the FDIC to charge all institutions 
premiums and assuring that top-rated institutions are not 
excessively charged.
    The Committee envisions that this rate will be the starting 
point or base premium for the risk-based assessment schedule to 
be developed by the FDIC (with higher premiums associated with 
higher risk categories being set relative to this base rate). 
Nothing in this provision precludes the FDIC from providing 
credits or dividends should the fund be at sufficient levels to 
warrant such an action.
    The section also requires insured depository institutions 
to maintain all records that the FDIC may require for verifying 
the accuracy of any assessment for 3 years or, in the case of 
disputed assessments, until the dispute has been resolved, and 
increases fees for late assessment payments from $100 to 1 
percent of assessments per day.
    This section also provides for a 50 percent discount in the 
assessment rate for deposits attributable to ``lifeline'' 
deposit accounts and repeals section 232 of the Federal Deposit 
Insurance Corporation Improvement Act of 1991 that required 
that credits for such accounts be funded from congressional 
appropriations.
    The bill repeals a number of provisions requiring the FDIC 
to set premiums on a semi-annual basis, replacing them with a 
provision granting the FDIC greater flexibility in the timing 
of those evaluations, so long as they are done at least once in 
a 12 month period. In granting this flexibility, the Committee 
intends that the FDIC should make these changes, absent 
extraordinary circumstances, in a manner that provides insured 
depository institutions with sufficient lead time to make 
reasonable budget preparations.

Section 5. Replacement of fixed designated reserve ratio with reserve 
        range

    This section eliminates the current 1.25 percent ``hard 
target'' DRR and provides the FDIC Board with the discretion to 
set the DRR within a range of 1.15 to 1.40 percent for any 
given year, using the following criteria as a basis for making 
these determinations:
    (1) Present and future risk of losses to the deposit 
insurance fund;
    (2) Economic conditions; and
    (3) Any other factors the Board may determine to be 
appropriate.
    The more flexible range for setting the DRR is designed to 
prevent sharp swings in the assessment rates for insured 
depository institutions. In designating the reserve ratio, the 
FDIC must follow notice-and-comment rulemaking procedures, and 
is required to publish a thorough analysis of the data and 
projections on which the proposed DRR is based.

Section 6. Requirements applicable to the risk-based assessment system

    This section directs the FDIC to collect information from 
all appropriate sources in determining risk of losses to the 
DIF. This provision does not authorize the FDIC to impose 
additional recordkeeping requirements on insured depository 
institutions.
    The FDIC is required to consult with the appropriate 
Federal banking agency in assessing the risk of loss to the DIF 
with respect to any insured depository institution. This risk 
of loss evaluation may be done on an aggregate basis for 
institutions that are determined to be well-capitalized and 
well-managed.
    The FDIC is also required to provide notice and opportunity 
for comment prior to revising or modifying the risk-based 
assessment system.

Section 7. Refunds, dividends, and credits from Deposit Insurance Fund

    This section provides for refunds or credits of any 
assessment payment that was made by an insured depository 
institution in excess of the amount due the FDIC.
    The section specifies two circumstances under which the 
FDIC is required to pay dividends to insured depository 
institutions: (1) whenever the reserve ratio of the DIF equals 
or exceeds 1.35 percent of estimated insured deposits and is 
less than or equal to 1.4 percent of such deposits, the FDIC is 
required to pay dividends equal to 50 percent of the amount in 
excess of what is required to maintain the reserve ratio at 
1.35 percent; and (2) whenever the reserve ratio of the DIF 
exceeds 1.4 percent of estimated insured deposits, the FDIC is 
required to pay dividends in the amount of the excess of what 
is necessary to maintain the ratio at 1.4 percent.
    The requirement that when the DIF exceeds 1.35 percent and 
is less than or equal to 1.4 percent, the FDIC must provide a 
cash dividend equal to one-half the difference between the 
actual fund balance and the fund balance required to maintain a 
reserve ratio of 1.35 percent is intended to slow the fund's 
growth automatically as it approaches its upper limit and 
return dividends to institutions that could be used for lending 
and to provide other financial services in their communities.
    The section also provides for a transitional credit of 12 
basis points of the total assessment base as of December 31, 
2001 (or about $5.4 billion) to eligible insured depository 
institutions based on their respective share or percentage of 
total industry insured deposits held as of December 31, 1996. 
Eligible insured depository institutions had to be in existence 
at December 31, 1996, or be a successor to such an institution, 
and paid a deposit insurance assessment prior to that date.
    In addition to the transitional credit, this section 
directs the FDIC to promulgate regulations establishing an 
ongoing system of credits to be applied against future premium 
assessments. Such credits will not be awarded, however, during 
any period in which (1) the reserve ratio of the DIF is less 
than the DRR; or (2) the reserve ratio is less than 1.25 
percent of estimated insured deposits. In determining the 
amount of any ongoing assessment credits, the FDIC is required 
to consider the factors for designating the reserve ratio and 
setting assessments outlined elsewhere in the statute.
    For purposes of allocating dividends and credits, the FDIC 
is required to determine each insured depository institution's 
relative contribution to the DIF (or any predecessor deposit 
insurance fund), taking into account the institution's share of 
the assessment base as of December 31, 1996; the total amount 
of deposit insurance assessments paid by the institution after 
December 31, 1996; that portion of assessments paid by an 
institution that reflects higher levels of risk assumed by the 
institution; and such other factors as the FDIC deems 
appropriate. The FDIC's calculation, declaration and payment of 
dividends are made subject to notice-and-comment rulemaking.
    For any insured depository institution that exhibits 
financial, operational or compliance weaknesses ranging from 
moderately severe to unsatisfactory at the beginning of the 
assessment period, credits may not exceed the amount equal to 
the average assessment on all insured depository institutions.
    In promulgating regulations establishing a system for 
dividends and credits, the FDIC is required to include 
provisions allowing insured depository institutions a 
reasonable opportunity to challenge administratively the amount 
of their dividends or credits.
    Nothing in this section precludes the FDIC from providing 
credits, over and above the mandated dividend requirement, 
should it so choose.
    The Committee intends that the FDIC, in determining the 
appropriate distribution of dividends or ongoing credits, weigh 
a number of factors in its rulemaking process. The calculation 
should recognize past contributions to the deposit insurance 
funds by incorporating the ratio determined for an institution 
in the calculation of the institution's one-time credit based 
on total assessment base at year-end 1996, as well as the 
actual assessments paid since that time. In establishing the 
dividend and credit systems, the FDIC should also take into 
account and make adjustments that reflect the higher risk 
profiles of some institutions so that they are not rewarded for 
riskier behavior. The FDIC is given the discretion to 
incorporate additional factors, through the rulemaking process, 
as it deems appropriate.
    Initially, the Committee anticipates that the FDIC will 
establish a dividend account or similar mechanism for each 
insured depository institution. It is contemplated that when a 
dividend is declared, each institution would receive the same 
proportion of the total dividend declared as its dividend 
account bears to the sum of all institutions' dividend accounts 
for that declaration. As an example of how this might work 
under such a scenario, the calculation of an institution's 
dividend account could be based on the balance in the fund 
multiplied by the institution's 1996 assessment base ratio 
(described above). In addition, after reducing the amount of 
assessments paid to account for an institution's higher risk 
profile, and after considering other factors, the Corporation 
would incorporate the remainder in the calculation of the 
dividend account. In sum, it is the Committee's intent that the 
FDIC create and implement a robust system of dividends and 
ongoing credits based upon the various factors set forth in the 
bill.

Section 8. Deposit Insurance Fund restoration plans

    Whenever the reserve ratio falls or is projected to fall 
below the low end of the range within which the FDIC is 
authorized to set the DRR, the FDIC is required, within 90 
days, to establish and implement a plan for restoring the DIF 
to that level within ten years. While such a restoration plan 
is in effect, the FDIC has the authority to restrict the use of 
assessment credits by insured depository institutions, but is 
required to apply to an institution's assessment an amount that 
is the lesser of the institution's assessment or 3 basis points 
of an institution's assessment base. The FDIC must publish the 
details of its restoration plan in the Federal Register within 
30 days of its implementation.

Section 9. Regulations required

    This section provides that the FDIC has 270 days after the 
date of enactment to prescribe final regulations, after notice 
and opportunity for public comment, establishing the DRR, 
implementing increases in deposit insurance coverage, 
implementing the dividend requirement and the one time 
assessment credit, and providing for premium assessments under 
the amended Act.

Section 10. Studies of FDIC structure and expenses and certain 
        activities and further possible changes to deposit insurance 
        system

    This section provides that within one year of enactment, 
reports must be submitted to Congress on the following issues:
    (1) The efficiency and effectiveness of the administration 
of the prompt corrective action (PCA) program, including the 
degree of effectiveness of the Federal banking agencies in 
identifying troubled depository institutions and the degree of 
accuracy of the risk assessments made by the FDIC;
    (2) The appropriateness of the FDIC's organizational 
structure for the mission of the FDIC, to take into account the 
current size and complexity of the business of insured 
depository institutions; the extent to which the organizational 
structure contributes to or reduces operational inefficiencies 
that increase operational costs; and the effectiveness of 
internal controls;
    (3) The feasibility of establishing a voluntary deposit 
insurance system for deposits in excess of the maximum amount 
of deposit insurance for any depositor;
    (4) The feasibility of privatizing all deposit insurance at 
insured depository institutions and insured credit unions; and,
    (5) The feasibility of using actual domestic deposits 
rather than estimated insured deposits in calculating the DIF's 
reserve ratio and the DRR.
    Finally, the section directs the FDIC (in consultation with 
the GAO) to conduct a study of the reserve methodology and loss 
accounting for insured depository institutions in a troubled 
condition over the period January 1, 1992 through December 31, 
2002, and report its findings and conclusions to Congress 
within 6 months of the date of enactment.

Section 11. Bi-annual FDIC survey and report on increasing the deposit 
        base by encouraging use of depository institutions by the 
        unbanked

    This section requires the FDIC to conduct a bi-annual 
survey on efforts by insured depository institutions to bring 
the ``unbanked'' into the conventional finance system, and 
report its findings and conclusions to the House Committee on 
Financial Services and the Senate Committee on Banking, Housing 
and Urban Affairs, together with any recommendations for 
legislative or administrative action.

Section 12. Technical and Conforming Amendments to the Federal Deposit 
        Insurance Act relating to the merger of the BIF and SAIF

    This section makes numerous amendments to ensure the 
technical conformity of the Federal Deposit Insurance Reform 
Act to various provisions in the Federal Deposit Insurance Act 
and other banking laws, to include the authority of the DIF to 
borrow from insured depository institutions and the Federal 
Home Loan Banks.
    In particular, this section repeals section 5(d)(2) of the 
Federal Deposit Insurance Act, dealing with exit fees collected 
from institutions leaving the Savings Association Insurance 
Fund (SAIF). The Committee intends that those funds be returned 
to the DIF upon the repeal of this provision.

Section 13. Other Technical and Conforming Amendments relating to the 
        merger of the BIF and SAIF

    This section ensures the technical conformity of the 
Federal Deposit Insurance Reform Act to various provisions in 
the Federal Deposit Insurance Act and other banking laws. Most 
notably, amendments conform the Federal Deposit Insurance 
Reform Act to the Balanced Budget and Emergency Control Act of 
1985.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) 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 2704 OF THE DEPOSIT INSURANCE FUNDS ACT OF 1996


[SEC. 2704. MERGER OF BIF AND SAIF.

  [(a) In General.--
          [(1) Merger.--The Bank Insurance Fund and the Savings 
        Association Insurance Fund shall be merged into the 
        Deposit Insurance Fund established by section 11(a)(4) 
        of the Federal Deposit Insurance Act, as amended by 
        this section.
          [(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.
  [(c) Effective Date.--This section and the amendments made by 
this section shall become effective on January 1, 1999, if no 
insured depository institution is a savings association on that 
date.
  [(d) Technical and Conforming Amendments.--
          [(1) Deposit insurance fund.--Section 11(a)(4) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1821(a)(4)) is 
        amended--
                  [(A) by redesignating subparagraph (B) as 
                subparagraph (C);
                  [(B) by striking subparagraph (A) and 
                inserting the following:
                  [``(A) Establishment.--There is established 
                the Deposit Insurance Fund, which the 
                Corporation shall--
                          [``(i) maintain and administer;
                          [``(ii) use to carry out its 
                        insurance purposes in the manner 
                        provided by this subsection; and
                          [``(iii) invest in accordance with 
                        section 13(a).
                  [``(B) Uses.--The Deposit Insurance Fund 
                shall be available to the Corporation for use 
                with respect to Deposit Insurance Fund 
                members.''; and
                  [(C) by striking ``(4) General provisions 
                relating to funds.--'' and inserting the 
                following:
          [``(4) Establishment of the deposit insurance 
        fund.--''.
          [(2) Other references.--Section 11(a)(4)(C) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1821(a)(4)(C), 
        as redesignated by paragraph (1) of this subsection) is 
        amended by striking ``Bank Insurance Fund and the 
        Savings Association Insurance Fund'' and inserting 
        ``Deposit Insurance Fund''.
          [(3) Deposits into fund.--Section 11(a)(4) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1821(a)(4)) is 
        amended by adding at the end the following new 
        subparagraph:
                  [``(D) Deposits.--All amounts assessed 
                against insured depository institutions by the 
                Corporation shall be deposited in the Deposit 
                Insurance Fund.''.
          [(5) Federal home loan bank act.--Section 
        21B(f)(2)(C)(ii) of the Federal Home Loan Bank Act (12 
        U.S.C. 1441b(f)(2)(C)(ii)) is amended--
                  [(A) in subclause (I), by striking ``to 
                Savings Associations Insurance Fund members'' 
                and inserting ``to insured depository 
                institutions, and their successors, which were 
                Savings Association Insurance Fund members on 
                September 1, 1995''; and
                  [(B) in subclause (II), by striking ``to 
                Savings Associations Insurance Fund members'' 
                and inserting ``to insured depository 
                institutions, and their successors, which were 
                Savings Association Insurance Fund members on 
                September 1, 1995''.
          [(6) Repeals.--
                  [(A) Section 3.--Section 3(y) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813(y)) is 
                amended to read as follows:
  [``(y) Definitions Relating to the Deposit Insurance Fund.--
          [``(1) Deposit insurance fund.--The term `Deposit 
        Insurance Fund' means the fund established under 
        section 11(a)(4).
          [``(2) Reserve ratio.--The term `reserve ratio' means 
        the ratio of the net worth of the Deposit Insurance 
        Fund to aggregate estimated insured deposits held in 
        all insured depository institutions.
          [``(3) Designated reserve ratio.--The designated 
        reserve ratio of the Deposit Insurance Fund for each 
        year shall be--
                  [``(A) 1.25 percent of estimated insured 
                deposits; or
                  [``(B) a higher percentage of estimated 
                insured deposits that the Board of Directors 
                determines to be justified for that year by 
                circumstances raising a significant risk of 
                substantial future losses to the fund.''
                  [(B) Section 7.--Section 7 of the Federal 
                Deposit Insurance Act (12 U.S.C. 1817) is 
                amended--
                          [(i) by striking subsection (l);
                          [(ii) by redesignating subsections 
                        (m) and (n) as subsections (l) and (m), 
                        respectively;
                          [(iii) in subsection (b)(2), by 
                        striking subparagraphs (B) and (F), and 
                        by redesignating subparagraphs (C), 
                        (E), (G), and (H) as subparagraphs (B) 
                        through (E), respectively.
                  [(C) Section 11.--Section 11(a) of the 
                Federal Deposit Insurance Act (12 U.S.C. 
                1821(a)) is amended--
                          [(i) by striking paragraphs (5), (6), 
                        and (7); and
                          [(ii) by redesignating paragraph (8) 
                        as paragraph (5).''.
          [(7) 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''.
          [(8) 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''.
          [(9) 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''.
          [(10) 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--
                  [(A) by striking ``Bank Insurance Fund'' and 
                inserting ``Deposit Insurance Fund''; and
                  [(B) by striking ``Federal Deposit Insurance 
                Corporation, Savings Association Insurance 
                Fund;''.
          [(11) Further amendments to the federal home loan 
        bank act.--The Federal Home Loan Bank Act (12 U.S.C. 
        1421 et seq.) is amended--
                  [(A) in section 11(k) (12 U.S.C. 1431(k))--
                          [(i) in the subsection heading, by 
                        striking ``SAIF'' and inserting ``the 
                        Deposit Insurance Fund''; and
                          [(ii) by striking ``Savings 
                        Association Insurance Fund'' each place 
                        such term appears and inserting 
                        ``Deposit Insurance Fund'';
                  [(B) 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'';
                  [(C) in section 21A(b)(6)(B) (12 U.S.C. 
                1441a(b)(6)(B))--
                          [(i) in the subparagraph heading, by 
                        striking ``SAIF-insured banks'' and 
                        inserting ``Charter conversions''; and
                          [(ii) by striking ``Savings 
                        Association Insurance Fund member'' and 
                        inserting ``savings association'';
                  [(D) 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'';
                  [(E) in section 21B(e) (12 U.S.C. 1441b(e))--
                          [(i) in paragraph (5), by inserting 
                        ``as of the date of funding'' after 
                        ``Savings Association Insurance Fund 
                        members'' each place such term appears;
                          [(ii) by striking paragraph (7); and
                          [(iii) by redesignating paragraph (8) 
                        as paragraph (7); and
                  [(F) in section 21B(k) (12 U.S.C. 1441b(k))--
                          [(i) by striking paragraph (8); and
                          [(ii) by redesignating paragraphs (9) 
                        and (10) as paragraphs (8) and (9), 
                        respectively.
          [(12) Amendments to the home owners' loan act.--The 
        Home Owners' Loan Act (12 U.S.C. 1461 et seq.) is 
        amended--
                  [(A) in section 5--
                          [(i) in subsection (c)(5)(A), by 
                        striking ``that is a member of the Bank 
                        Insurance Fund'';
                          [(ii) in subsection (c)(6), by 
                        striking ``As used in this subsection--
                        '' and inserting ``For purposes of this 
                        subsection, the following definitions 
                        shall apply:'';
                          [(iii) in subsection (o)(1), by 
                        striking ``that is a Bank Insurance 
                        Fund member'';
                          [(iv) 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'';
                          [(v) in subsection 
                        (t)(5)(D)(iii)(II), by striking 
                        ``affected deposit insurance fund'' and 
                        inserting ``Deposit Insurance Fund'';
                          [(vi) in subsection (t)(7)(C)(i)(I), 
                        by striking ``affected deposit 
                        insurance fund'' and inserting 
                        ``Deposit Insurance Fund''; and
                          [(vii) in subsection (v)(2)(A)(i), by 
                        striking ``, the Savings Association 
                        Insurance Fund'' and inserting ``or the 
                        Deposit Insurance Fund''; and
                  [(B) in section 10--
                          [(i) in subsection 
                        (e)(1)(A)(iii)(VII), by adding ``or'' 
                        at the end;
                          [(ii) in subsection (e)(1)(A)(iv), by 
                        adding ``and'' at the end;
                          [(iii) in subsection (e)(1)(B), by 
                        striking ``Savings Association 
                        Insurance Fund or Bank Insurance Fund'' 
                        and inserting ``Deposit Insurance 
                        Fund'';
                          [(iv) in subsection (e)(2), by 
                        striking ``Savings Association 
                        Insurance Fund or the Bank Insurance 
                        Fund'' and inserting ``Deposit 
                        Insurance Fund''; and
                          [(v) in subsection (m)(3), by 
                        striking subparagraph (E), and by 
                        redesignating subparagraphs (F), (G), 
                        and (H) as subparagraphs (E), (F), and 
                        (G), respectively.
          [(13) Amendments to the national housing act.--The 
        National Housing Act (12 U.S.C. 1701 et seq.) is 
        amended--
                  [(A) 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
                  [(B) in section 526(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''.
          [(14) Further amendments to the federal deposit 
        insurance act.--The Federal Deposit Insurance Act (12 
        U.S.C. 1811 et seq.) is amended--
                  [(A) in section 3(a)(1) (12 U.S.C. 
                1813(a)(1)), by striking subparagraph (B) and 
                inserting the following:
                  [``(B) includes any former savings 
                association.'';
                  [(B) 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 ``Deposit Insurance 
                Fund,'';
                  [(C) in section 5(d) (12 U.S.C. 1815(d)), by 
                striking paragraphs (2) and (3);
                  [(D) in section 5(d)(1) (12 U.S.C. 
                1815(d)(1))--
                          [(i) in subparagraph (A), by striking 
                        ``reserve ratios in the Bank Insurance 
                        Fund and the Savings Association 
                        Insurance Fund'' and inserting ``the 
                        reserve ratio of the Deposit Insurance 
                        Fund'';
                          [(ii) 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.'';
                          [(iii) by striking ``(1) Uninsured 
                        institutions.--''; and
                          [(iv) by redesignating subparagraphs 
                        (A) and (C) as paragraphs (1) and (3), 
                        respectively, and moving the margins 2 
                        ems to the left;
                  [(E) in section 5(e) (12 U.S.C. 1815(e))--
                          [(i) in paragraph (5)(A), by striking 
                        ``Bank Insurance Fund or the Savings 
                        Association Insurance Fund'' and 
                        inserting ``Deposit Insurance Fund'';
                          [(ii) by striking paragraph (6); and
                          [(iii) by redesignating paragraphs 
                        (7), (8), and (9) as paragraphs (6), 
                        (7), and (8), respectively;
                  [(F) 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'';
                  [(G) in section 7(b) (12 U.S.C. 1817(b))--
                          [(i) in paragraph (1)(D), by striking 
                        ``each deposit insurance fund'' and 
                        inserting ``the Deposit Insurance 
                        Fund'';
                          [(ii) in clauses (i)(I) and (iv) of 
                        paragraph (2)(A), by striking ``each 
                        deposit insurance fund'' each place 
                        such term appears and inserting ``the 
                        Deposit Insurance Fund'';
                          [(iii) in paragraph (2)(A)(iii), by 
                        striking ``a deposit insurance fund'' 
                        and inserting ``the Deposit Insurance 
                        Fund'';
                          [(iv) by striking clause (iv) of 
                        paragraph (2)(A);
                          [(v) in paragraph (2)(C) (as 
                        redesignated by paragraph (6)(B) of 
                        this subsection)--
                                  [(I) by striking ``any 
                                deposit insurance fund'' and 
                                inserting ``the Deposit 
                                Insurance Fund''; and
                                  [(II) by striking ``that 
                                fund'' each place such term 
                                appears and inserting ``the 
                                Deposit Insurance Fund'';
                          [(vi) in paragraph (2)(D) (as 
                        redesignated by paragraph (6)(B) of 
                        this subsection)--
                                  [(I) in the subparagraph 
                                heading, by striking ``funds 
                                achieve'' and inserting ``fund 
                                achieves''; and
                                  [(II) by striking ``a deposit 
                                insurance fund'' and inserting 
                                ``the Deposit Insurance Fund'';
                          [(vii) in paragraph (3)--
                                  [(I) in the paragraph 
                                heading, by striking ``funds'' 
                                and inserting ``fund'';
                                  [(II) by striking ``members 
                                of that fund'' where such term 
                                appears in the portion of 
                                subparagraph (A) which precedes 
                                clause (i) of such subparagraph 
                                and inserting ``insured 
                                depository institutions'';
                                  [(III) by striking ``that 
                                fund'' each place such term 
                                appears (other than in 
                                connection with term amended in 
                                subclause (II) of this clause) 
                                and inserting ``the Deposit 
                                Insurance Fund'';
                                  [(IV) in subparagraph (A), by 
                                striking ``Except as provided 
                                in paragraph (2)(F), if'' and 
                                inserting ``If'';
                                  [(V) in subparagraph (A), by 
                                striking ``any deposit 
                                insurance fund'' and inserting 
                                ``the Deposit Insurance Fund''; 
                                and
                                  [(VI) by striking 
                                subparagraphs (C) and (D) and 
                                inserting the following:
                  [``(C) Amending schedule.--The Corporation 
                may, by regulation, amend a schedule prescribed 
                under subparagraph (B).''; and
                          [(viii) in paragraph (6)--
                                  [(I) by striking ``any such 
                                assessment'' and inserting 
                                ``any such assessment is 
                                necessary'';
                                  [(II) by striking ``(A) is 
                                necessary--'';
                                  [(III) by striking 
                                subparagraph (B);
                                  [(IV) by redesignating 
                                clauses (i), (ii), and (iii) as 
                                subparagraphs (A), (B), and 
                                (C), respectively, and moving 
                                the margins 2 ems to the left; 
                                and
                                  [(V) in subparagraph (C) (as 
                                redesignated), by striking ``; 
                                and'' and inserting a period;
                  [(H) 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;
                  [(I) in section 11(i)(3) (12 U.S.C. 
                1821(i)(3))--
                          [(i) by striking subparagraph (B);
                          [(ii) by redesignating subparagraph 
                        (C) as subparagraph (B); and
                          [(iii) in subparagraph (B) (as 
                        redesignated), by striking 
                        ``subparagraphs (A) and (B)'' and 
                        inserting ``subparagraph (A)'';
                  [(J) in section 11A(a) (12 U.S.C. 1821a(a))--
                          [(i) in paragraph (2), by striking 
                        ``liabilities.--'' and all that follows 
                        through ``Except'' and inserting 
                        ``liabilities.--Except'';
                          [(ii) by striking paragraph (2)(B); 
                        and
                          [(iii) in paragraph (3), by striking 
                        ``the Bank Insurance Fund, the Savings 
                        Association Insurance Fund,'' and 
                        inserting ``the Deposit Insurance 
                        Fund'';
                  [(K) in section 11A(b) (12 U.S.C. 1821a(b)), 
                by striking paragraph (4);
                  [(L) in section 11A(f) (12 U.S.C. 1821a(f)), 
                by striking ``Savings Association Insurance 
                Fund'' and inserting ``Deposit Insurance 
                Fund'';
                  [(M) in section 13 (12 U.S.C. 1823)--
                          [(i) in subsection (a)(1), by 
                        striking ``Bank Insurance Fund, the 
                        Savings Association Insurance Fund,'' 
                        and inserting ``Deposit Insurance Fund, 
                        the Special Reserve of the Deposit 
                        Insurance Fund,'';
                          [(ii) 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'';
                          [(iii) 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 such term 
                                appears and inserting ``the 
                                institution's'';
                          [(iv) in subsection (c), by striking 
                        paragraph (11);
                          [(v) in subsection (h), by striking 
                        ``Bank Insurance Fund'' and inserting 
                        ``Deposit Insurance Fund'';
                          [(vi) in subsection (k)(4)(B)(i), by 
                        striking ``Savings Association 
                        Insurance Fund'' and inserting 
                        ``Deposit Insurance Fund''; and
                          [(vii) in subsection (k)(5)(A), by 
                        striking ``Savings Association 
                        Insurance Fund'' and inserting 
                        ``Deposit Insurance Fund'';
                  [(N) in section 14(a) (12 U.S.C. 1824(a)) in 
                the 5th sentence--
                          [(i) by striking ``Bank Insurance 
                        Fund or the Savings Association 
                        Insurance Fund'' and inserting 
                        ``Deposit Insurance Fund''; and
                          [(ii) by striking ``each such fund'' 
                        and inserting ``the Deposit Insurance 
                        Fund'';
                  [(O) 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'';
                  [(P) in section 14(c) (12 U.S.C. 1824(c)), by 
                striking paragraph (3);
                  [(Q) in section 14(d) (12 U.S.C. 1824(d))--
                          [(i) by striking ``BIF'' each place 
                        such term appears and inserting 
                        ``DIF''; and
                          [(ii) by striking ``Bank Insurance 
                        Fund'' each place such term appears and 
                        inserting ``Deposit Insurance Fund'';
                  [(R) in section 15(c)(5) (12 U.S.C. 
                1825(c)(5))--
                          [(i) by striking ``the Bank Insurance 
                        Fund or Savings Association Insurance 
                        Fund, respectively'' each place such 
                        term appears and inserting ``the 
                        Deposit Insurance Fund''; and
                          [(ii) in subparagraph (B), by 
                        striking ``the Bank Insurance Fund or 
                        the Savings Association Insurance Fund, 
                        respectively'' and inserting ``the 
                        Deposit Insurance Fund'';
                  [(S) in section 17(a) (12 U.S.C. 1827(a))--
                          [(i) in the subsection heading, by 
                        striking ``BIF, SAIF,'' and inserting 
                        ``the Deposit Insurance Fund''; and
                          [(ii) in paragraph (1), by striking 
                        ``the Bank Insurance Fund, the Savings 
                        Association Insurance Fund,'' each 
                        place such term appears and inserting 
                        ``the Deposit Insurance Fund'';
                  [(T) in section 17(d) (12 U.S.C. 1827(d)), by 
                striking ``the Bank Insurance Fund, the Savings 
                Association Insurance Fund,'' each place such 
                term appears and inserting ``the Deposit 
                Insurance Fund'';
                  [(U) in section 18(m)(3) (12 U.S.C. 
                1828(m)(3))--
                          [(i) by striking ``Savings 
                        Association Insurance Fund'' each place 
                        such term appears and inserting 
                        ``Deposit Insurance Fund''; and
                          [(ii) in subparagraph (C), by 
                        striking ``or the Bank Insurance 
                        Fund'';
                  [(V) in section 18(p) (12 U.S.C. 1828(p)), by 
                striking ``deposit insurance funds'' and 
                inserting ``Deposit Insurance Fund'';
                  [(W) in section 24 (12 U.S.C. 1831a) in 
                subsections (a)(1) and (d)(1)(A), by striking 
                ``appropriate deposit insurance fund'' each 
                place such term appears and inserting ``Deposit 
                Insurance Fund'';
                  [(X) in section 28 (12 U.S.C. 1831e), by 
                striking ``affected deposit insurance fund'' 
                each place such term appears and inserting 
                ``Deposit Insurance Fund'';
                  [(Y) by striking section 31 (12 U.S.C. 
                1831h);
                  [(Z) in section 36(i)(3) (12 U.S.C. 
                1831m(i)(3)) by striking ``affected deposit 
                insurance fund'' and inserting ``Deposit 
                Insurance Fund'';
                  [(AA) in section 38(a) (12 U.S.C. 1831o(a)) 
                in the subsection heading, by striking 
                ``Funds'' and inserting ``Fund'';
                  [(BB) in section 38(k) (12 U.S.C. 1831o(k))--
                          [(i) in paragraph (1), by striking 
                        ``a deposit insurance fund'' and 
                        inserting ``the Deposit Insurance 
                        Fund''; and
                          [(ii) in paragraph (2)(A)--
                                  [(I) by striking ``A deposit 
                                insurance fund'' and inserting 
                                ``The Deposit Insurance Fund''; 
                                and
                                  [(II) by striking ``the 
                                deposit insurance fund's 
                                outlays'' and inserting ``the 
                                outlays of the Deposit 
                                Insurance Fund''; and
                  [(CC) in section 38(o) (12 U.S.C. 1831o(o))--
                          [(i) by striking ``Associations.--'' 
                        and all that follows through 
                        ``Subsections (e)(2)'' and inserting 
                        ``Associations.--Subsections (e)(2)'';
                          [(ii) by redesignating subparagraphs 
                        (A), (B), and (C) as paragraphs (1), 
                        (2), and (3), respectively, and moving 
                        the margins 2 ems to the left; and
                          [(iii) in paragraph (1) (as 
                        redesignated), by redesignating clauses 
                        (i) and (ii) as subparagraphs (A) and 
                        (B), respectively, and moving the 
                        margins 2 ems to the left.
          [(15) Amendments to the financial institutions 
        reform, recovery, and enforcement act of 1989.--The 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act is amended--
                  [(A) in section 951(b)(3)(B) (12 U.S.C. 
                1833a(b)(3)(B)), by striking ``Bank Insurance 
                Fund, the Savings Association Insurance Fund,'' 
                and inserting ``Deposit Insurance Fund''; and
                  [(B) 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''.
          [(16) Amendment to the bank enterprise act of 1991.--
        Section 232(a)(1) of the Bank Enterprise Act of 1991 
        (12 U.S.C. 1834(a)(1)) is amended by striking ``section 
        7(b)(2)(H)'' and inserting ``section 7(b)(2)(G)''.
          [(17) Amendment to the bank holding company act of 
        1956.--Section 2(j)(2) of the Bank Holding Company Act 
        of 1956 (12 U.S.C. 1841(j)(2)) is amended by striking 
        ``Savings Association Insurance Fund'' and inserting 
        ``Deposit Insurance Fund''.]
                              ----------                              


FEDERAL DEPOSIT INSURANCE ACT

           *       *       *       *       *       *       *


  Sec. 3. As used in this Act--
  (a) Definitions of Bank and Related Terms.--
          (1) Bank.--The term ``bank''--
                  (A)  * * *
                  [(B) includes any former savings association 
                that--
                          [(i) has converted from a savings 
                        association charter; and
                          [(ii) is a Savings Association 
                        Insurance Fund member.]
                  (B) includes any former savings association.

           *       *       *       *       *       *       *

  [(y) The term ``deposit insurance fund'' means the Bank 
Insurance Fund or the Savings Association Insurance Fund, as 
appropriate.]
  (y) Definitions Relating to Deposit Insurance Fund.--
          (1) Deposit insurance fund.--The term ``Deposit 
        Insurance Fund'' means the Deposit Insurance Fund 
        established under section 11(a)(4).
          (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).
          (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. 5. DEPOSIT INSURANCE.

  (a)  * * *
  (b) Subject to the provisions of this Act and to such terms 
and conditions as the Board of Directors may impose, any branch 
of a foreign bank, upon application by the bank to the 
Corporation, and examination by the Corporation of the branch, 
and approval by the Board of Directors, may become an insured 
branch. Before approving any such application, the Board of 
Directors shall give consideration to--
          (1)  * * *

           *       *       *       *       *       *       *

          (5) the risk presented to [the Bank Insurance Fund or 
        the Savings Association Insurance Fund,] the Deposit 
        Insurance Fund,

           *       *       *       *       *       *       *

  (c)(1)  * * *

           *       *       *       *       *       *       *

  (4) The purpose of the surety bonds and pledges of assets 
required under this subsection is to provide protection to the 
[deposit insurance fund] Deposit Insurance Fund against the 
risks entailed in insuring the domestic deposits of a foreign 
bank whose activities, assets, and personnel are in large part 
outside the jurisdiction of the United States. In the 
implementation of its authority under this subsection, however, 
the Corporation shall endeavor to avoid imposing requirements 
on such banks which would unnecessarily place them at a 
competitive disadvantage in relation to domestically 
incorporated banks.

           *       *       *       *       *       *       *

  (d) Insurance Fees.--
          [(1) Uninsured institutions.--]
          [(A)] (1) In general.--Any institution that becomes 
        insured by the Corporation, and any noninsured branch 
        that becomes insured by the Corporation, shall pay the 
        Corporation any fee which the Corporation may by 
        regulation prescribe, after giving due consideration to 
        the need to establish and maintain [reserve ratios in 
        the Bank Insurance Fund and the Savings Association 
        Insurance Fund as required by section 7] the reserve 
        ratio of the Deposit Insurance Fund.
                  [(B) Fee credited to appropriate fund.--The 
                fee paid by the depository institution shall be 
                credited to the Bank Insurance Fund if the 
                depository institution becomes a Bank Insurance 
                Fund member, and to the Savings Association 
                Insurance Fund if the depository institution 
                becomes a Savings Association Insurance Fund 
                member.]
          (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)] (3) Exception for certain depository 
        institutions.--Any depository institution that becomes 
        an insured depository institution by operation of 
        section 4(a) shall not pay any fee.
          [(2) Conversions.--
                  [(A) In general.--
                          [(i) Prior approval required.--No 
                        insured depository institution may 
                        participate in a conversion transaction 
                        without the prior approval of the 
                        Corporation.
                          [(ii) 5-year moratorium on 
                        conversions.--Except as provided in 
                        subparagraph (C), the Corporation may 
                        not approve any conversion transaction 
                        before the later of the end of the 5-
                        year period beginning on the date of 
                        the enactment of the Financial 
                        Institutions Reform, Recovery, and 
                        Enforcement Act of 1989 or the date on 
                        which the Savings Association Insurance 
                        Fund first meets or exceeds the 
                        designated reserve ratio for such fund.
                  [(B) Conversion defined.--For purposes of 
                this paragraph, the term ``conversion 
                transaction'' means--
                          [(i) the change of status of an 
                        insured depository institution from a 
                        Bank Insurance Fund member to a Savings 
                        Association Insurance Fund member or 
                        from a Savings Association Insurance 
                        Fund member to a Bank Insurance Fund 
                        member;
                          [(ii) the merger or consolidation of 
                        a Bank Insurance Fund member with a 
                        Savings Association Insurance Fund 
                        member;
                          [(iii) the assumption of any 
                        liability by--
                                  [(I) any Bank Insurance Fund 
                                member to pay any deposits of a 
                                Savings Association Insurance 
                                Fund member; or
                                  [(II) any Savings Association 
                                Insurance Fund member to pay 
                                any deposits of a Bank 
                                Insurance Fund member;
                          [(iv) the transfer of assets of--
                                  [(I) any Bank Insurance Fund 
                                member to any Savings 
                                Association Insurance Fund 
                                member in consideration of the 
                                assumption of liabilities for 
                                any portion of the deposits of 
                                such Bank Insurance Fund 
                                member; or
                                  [(II) any Savings Association 
                                Insurance Fund member to any 
                                Bank Insurance Fund member in 
                                consideration of the assumption 
                                of liabilities for any portion 
                                of the deposits of such Savings 
                                Association Insurance Fund 
                                member; and
                          [(v) the transfer of deposits--
                                  [(I) from a Bank Insurance 
                                Fund member to a Savings 
                                Association Insurance Fund 
                                member; or
                                  [(II) from a Savings 
                                Association Insurance Fund 
                                member to a Bank Insurance Fund 
                                member;
                        in a transaction in which the deposit 
                        is received from a depositor at an 
                        insured depository institution for 
                        which a receiver has been appointed and 
                        the receiving insured depository 
                        institution is acting as agent for the 
                        Corporation in connection with the 
                        payment of such deposit to the 
                        depositor at the institution for which 
                        a receiver has been appointed.
                  [(C) Approval during moratorium.--The 
                Corporation may approve a conversion 
                transaction at any time if--
                          [(i) the conversion transaction 
                        affects an insubstantial portion, as 
                        determined by the Corporation, of the 
                        total deposits of each depository 
                        institution participating in the 
                        conversion transaction;
                          [(ii) the conversion occurs in 
                        connection with the acquisition of a 
                        Savings Association Insurance Fund 
                        member in default or in danger of 
                        default, and the Corporation determines 
                        that the estimated financial benefits 
                        to the Savings Association Insurance 
                        Fund or Resolution Trust Corporation 
                        equal or exceed the Corporation's 
                        estimate of loss of assessment income 
                        to such insurance fund over the 
                        remaining balance of the moratorium 
                        period established by subparagraph (A), 
                        and the Resolution Trust Corporation 
                        concurs in the Corporation's 
                        determination; or
                          [(iii) the conversion occurs in 
                        connection with the acquisition of a 
                        Bank Insurance Fund member in default 
                        or in danger of default and the 
                        Corporation determines that the 
                        estimated financial benefits to the 
                        Bank Insurance Fund equal or exceed the 
                        Corporation's estimate of the loss of 
                        assessment income to the insurance fund 
                        over the remaining balance of the 
                        moratorium period established by 
                        subparagraph (A).
                  [(D) Certain transfers deemed to affect 
                insubstantial portion of total deposits.--For 
                purposes of subparagraph (C)(i), any conversion 
                transaction shall be deemed to affect an 
                insubstantial portion of the total deposits of 
                an insured depository institution, to the 
                extent the aggregate amount of the total 
                deposits transferred in such transaction and in 
                all conversion transactions occurring after the 
                date of the enactment of the Financial 
                Institutions Reform, Recovery, and Enforcement 
                Act of 1989 does not exceed 35 percent of the 
                lesser of--
                          [(i) the amount which is equal to the 
                        sum of--
                                  [(I) the total deposits of 
                                such insured depository 
                                institution on May 1, 1989; and
                                  [(II) the total amount of net 
                                interest credited to the 
                                depository institution's 
                                deposits during the period 
                                beginning on May 1, 1989, and 
                                ending on the date of the 
                                transfer of deposits in 
                                connection with such 
                                transaction; or
                          [(ii) the amount which is equal to 
                        the total deposits of such insured 
                        depository institution on the date of 
                        the transfer of deposits in connection 
                        with such transaction.
                  [(E) Exit and entrance fees.--Each insured 
                depository institution participating in a 
                conversion transaction shall pay--
                          [(i) in the case of a conversion 
                        transaction in which the resulting or 
                        acquiring depository institution is not 
                        a Savings Association Insurance Fund 
                        member, an exit fee (in an amount to be 
                        determined and assessed in accordance 
                        with subparagraph (F)) which--
                                  [(I) shall be deposited in 
                                the Savings Association 
                                Insurance Fund; or
                                  [(II) shall be paid to the 
                                Financing Corporation, if the 
                                Secretary of the Treasury 
                                determines that the Financing 
                                Corporation has exhausted all 
                                other sources of funding for 
                                interest payments on the 
                                obligations of the Financing 
                                Corporation and orders that 
                                such fees be paid to the 
                                Financing Corporation;
                          [(ii) in the case of a conversion 
                        transaction in which the resulting or 
                        acquiring depository institution is not 
                        a Bank Insurance Fund member, an exit 
                        fee in an amount to be determined by 
                        the Corporation (and assessed in 
                        accordance with subparagraph (F)(ii)) 
                        which shall be deposited in the Bank 
                        Insurance Fund; and
                          [(iii) an entrance fee in an amount 
                        to be determined by the Corporation 
                        (and assessed in accordance with 
                        subparagraph (F)(ii)), except that--
                                  [(I) in the case of a 
                                conversion transaction in which 
                                the resulting or acquiring 
                                depository institution is a 
                                Bank Insurance Fund member, the 
                                fee shall be the approximate 
                                amount which the Corporation 
                                calculates as necessary to 
                                prevent dilution of the Bank 
                                Insurance Fund, and shall be 
                                paid to the Bank Insurance 
                                Fund; and
                                  [(II) in the case of a 
                                conversion transaction in which 
                                the resulting or acquiring 
                                depository institution is a 
                                Savings Association Insurance 
                                Fund member, the fee shall be 
                                the approximate amount which 
                                the Corporation calculates as 
                                necessary to prevent dilution 
                                of the Savings Association 
                                Insurance Fund, and shall be 
                                paid to the Savings Association 
                                Insurance Fund.
                  [(F) Assessment of exit and entrance fees.--
                          [(i) Determination of amount of exit 
                        fees.--
                                  [(I) Conversions before 
                                january 1, 1997.--In the case 
                                of any exit fee assessed under 
                                subparagraph (E)(i) for any 
                                conversion transaction 
                                consummated before January 1, 
                                1997, the amount of such fee 
                                shall be determined jointly by 
                                the Corporation and the 
                                Secretary of the Treasury.
                                  [(II) Assessments after 
                                december, 31, 1996.--In the 
                                case of any exit fee assessed 
                                under subparagraph (E)(i) for 
                                any conversion transaction 
                                consummated after December 31, 
                                1996, the amount of such fee 
                                shall be determined by the 
                                Corporation.
                          [(ii) Procedures.--The Corporation 
                        shall prescribe, by regulation, 
                        procedures for assessing any exit or 
                        entrance fee under subparagraph (E).
                  [(G) Charter conversion of saif members.--
                This subsection shall not be construed as 
                prohibiting any savings association which is a 
                Savings Association Insurance Fund member from 
                converting to a bank charter during the period 
                described in subparagraph (A)(ii) if the 
                resulting bank remains a Savings Association 
                Insurance Fund member.
          [(3) Optional conversions subject to special rules on 
        deposit insurance payments.--
                  [(A) Conversions allowed.--Notwithstanding 
                paragraph (2)(A), and subject to the 
                requirements of this paragraph, any insured 
                depository institution may participate in a 
                transaction described in clause (ii), (iii), or 
                (iv) of paragraph (2)(B) if the transaction is 
                approved by the responsible agency under 
                section 18(c)(2).
                  [(B) Assessments on deposits attributable to 
                former depository institution.--
                          [(i) Assessments by saif.--In the 
                        case of any acquiring, assuming, or 
                        resulting depository institution which 
                        is a Bank Insurance Fund member, that 
                        portion of the deposits of such member 
                        for any semiannual period which is 
                        equal to the adjusted attributable 
                        deposit amount (determined under 
                        subparagraph (C) with respect to the 
                        transaction) shall be treated as 
                        deposits which are insured by the 
                        Savings Association Insurance Fund.
                          [(ii) Assessments by bif.--In the 
                        case of any acquiring, assuming, or 
                        resulting depository institution which 
                        is a Savings Association Insurance Fund 
                        member, that portion of the deposits of 
                        such member for any semiannual period 
                        which is equal to the adjusted 
                        attributable deposit amount (determined 
                        under subparagraph (C) with respect to 
                        the transaction) shall be treated as 
                        deposits which are insured by the Bank 
                        Insurance Fund.
                  [(C) Determination of adjusted attributable 
                deposit amount.--Except as provided in 
                subparagraph (K), the adjusted attributable 
                deposit amount which shall be taken into 
                account for purposes of determining the amount 
                of the assessment under subparagraph (B) for 
                any semiannual period by any acquiring, 
                assuming, or resulting depository institution 
                in connection with a transaction under 
                subparagraph (A) is the amount which is equal 
                to the sum of--
                          [(i) the amount of any deposits 
                        acquired by the institution in 
                        connection with the transaction (as 
                        determined at the time of such 
                        transaction);
                          [(ii) the total of the amounts 
                        determined under clause (iii) for 
                        semiannual periods preceding the 
                        semiannual period for which the 
                        determination is being made under this 
                        subparagraph; and
                          [(iii) the amount by which the sum of 
                        the amounts described in clauses (i) 
                        and (ii) would have increased during 
                        the preceding semiannual period (other 
                        than any semiannual period beginning 
                        before the date of such transaction) if 
                        such increase occurred at a rate equal 
                        to the annual rate of growth of 
                        deposits of the acquiring, assuming, or 
                        resulting depository institution minus 
                        the amount of any deposits acquired 
                        through the acquisition, in whole or in 
                        part, of another insured depository 
                        institution.
                  [(D) Deposit of assessment.--That portion of 
                any assessment under section 7 which--
                          [(i) is determined in accordance with 
                        subparagraph (B)(i) shall be deposited 
                        in the Savings Association Insurance 
                        Fund; and
                          [(ii) is determined in accordance 
                        with subparagraph (B)(ii) shall be 
                        deposited in the Bank Insurance Fund.
                  [(E) Conditions for approval, generally.--
                          [(i) Information required.--An 
                        application to engage in any 
                        transaction under this paragraph shall 
                        contain such information relating to 
                        the factors to be considered for 
                        approval as the responsible agency may 
                        require, by regulation or by specific 
                        request, in connection with any 
                        particular application.
                          [(ii) No transfer of deposit 
                        insurance permitted.--This paragraph 
                        shall not be construed as authorizing 
                        transactions which result in the 
                        transfer of any insured depository 
                        institution's Federal deposit insurance 
                        from 1 Federal deposit insurance fund 
                        to the other Federal deposit insurance 
                        fund.
                          [(iii) Capital requirements.--A 
                        transaction described in this paragraph 
                        shall not be approved under section 
                        18(c)(2) unless the acquiring, 
                        assuming, or resulting depository 
                        institution will meet all applicable 
                        capital requirements upon consummation 
                        of the transaction.
                  [(F) Certain interstate transactions.--A Bank 
                Insurance Fund member which is a subsidiary of 
                a bank holding company may not be the 
                acquiring, assuming, or resulting depository 
                institution in a transaction under subparagraph 
                (A) unless the transaction would comply with 
                the requirements of section 3(d) of the Bank 
                Holding Company Act of 1956 if, at the time of 
                such transaction, the Savings Association 
                Insurance Fund member involved in such 
                transaction was a State bank that the bank 
                holding company was applying to acquire.
                  [(G) Allocation of costs in event of 
                default.--If any acquiring, assuming, or 
                resulting depository institution is in default 
                or danger of default at any time before this 
                paragraph ceases to apply, any loss incurred by 
                the Corporation shall be allocated between the 
                Bank Insurance Fund and the Savings Association 
                Insurance Fund, in amounts reflecting the 
                amount of insured deposits of such acquiring, 
                assuming, or resulting depository institution 
                assessed by the Bank Insurance Fund and the 
                Savings Association Insurance Fund, 
                respectively, under subparagraph (B).
                  [(H) Subsequent approval of conversion 
                transaction.--This paragraph shall cease to 
                apply if--
                          [(i) after the end of the moratorium 
                        period established by paragraph (2)(A), 
                        the Corporation approves an application 
                        by any acquiring, assuming, or 
                        resulting depository institution to 
                        treat the transaction described in 
                        subparagraph (A) as a conversion 
                        transaction; and
                          [(ii) the acquiring, assuming, or 
                        resulting depository institution pays 
                        the amount of any exit and entrance fee 
                        assessed by the Corporation under 
                        subparagraph (E) of paragraph (2) with 
                        respect to such transaction.
                  [(I) Acquiring, assuming, or resulting 
                depository institution defined.--For purposes 
                of this paragraph, the term ``acquiring, 
                assuming, or resulting depository institution'' 
                means any insured depository institution 
                which--
                          [(i) results from any transaction 
                        described in paragraph (2)(B)(ii) and 
                        approved under this paragraph;
                          [(ii) in connection with a 
                        transaction described in paragraph 
                        (2)(B)(iii) and approved under this 
                        paragraph, assumes any liability to pay 
                        deposits of another insured depository 
                        institution; or
                          [(iii) in connection with a 
                        transaction described in paragraph 
                        (2)(B)(iv) and approved under this 
                        paragraph, acquires assets from any 
                        insured depository institution in 
                        consideration of the assumption of 
                        liability for any deposits of such 
                        institution.
                  [(K) Adjustment of adjusted attributable 
                deposit amount.--The amount determined under 
                subparagraph (C)(i) for deposits acquired by 
                March 31, 1995, shall be reduced by 20 percent 
                for purposes of computing the adjusted 
                attributable deposit amount for the payment of 
                any assessment for any semiannual period that 
                begins after the date of the enactment of the 
                Deposit Insurance Funds Act of 1996 (other than 
                the special assessment imposed under section 
                2702(a) of such Act), for a Bank Insurance Fund 
                member bank that, as of June 30, 1995--
                          [(i) had an adjusted attributable 
                        deposit amount that was less than 50 
                        percent of the total deposits of that 
                        member bank; or
                          [(ii)(I) had an adjusted attributable 
                        deposit amount equal to less than 75 
                        percent of the total assessable 
                        deposits of that member bank;
                          [(II) had total assessable deposits 
                        greater than $5,000,000,000; and
                          [(III) was owned or controlled by a 
                        bank holding company that owned or 
                        controlled insured depository 
                        institutions having an aggregate amount 
                        of deposits insured or treated as 
                        insured by the Bank Insurance Fund 
                        greater than the aggregate amount of 
                        deposits insured or treated as insured 
                        by the Savings Association Insurance 
                        Fund.]
  (e) Liability of Commonly Controlled Depository 
Institutions.--
          (1)  * * *

           *       *       *       *       *       *       *

          (5) Waiver authority.--
                  (A) In general.--The Corporation, in its 
                discretion, may exempt any insured depository 
                institution from the provisions of this 
                subsection if the Corporation determines that 
                such exemption is in the best interests of the 
                [Bank Insurance Fund or the Savings Association 
                Insurance Fund] Deposit Insurance Fund.

           *       *       *       *       *       *       *

          [(6) 5-year transition rule.--During the 5-year 
        period beginning on the date of the enactment of the 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989--
                  [(A) no Savings Association Insurance Fund 
                member shall have any liability to the 
                Corporation under this subsection arising out 
                of assistance provided by the Corporation or 
                any loss incurred by the Corporation as a 
                result of the default of a Bank Insurance Fund 
                member which was acquired by such Savings 
                Association Insurance Fund member or any 
                affiliate of such member before the date of the 
                enactment of such Act; and
                  [(B) no Bank Insurance Fund member shall have 
                such liability with respect to assistance 
                provided by or loss incurred by the Corporation 
                as a result of the default of a Savings 
                Association Insurance Fund member which was 
                acquired by such Bank Insurance Fund member or 
                any affiliate of such member before the date of 
                the enactment of such Act.]
          [(7)] (6) Exclusion for institutions acquired in debt 
        collections.--Any depository institution shall not be 
        treated as commonly controlled, for purposes of this 
        subsection, during the 5-year period beginning on the 
        date of an acquisition described in subparagraph (A) or 
        such longer period as the Corporation  may determine 
        after written application by the acquirer, if--
                  (A)  * * *

           *       *       *       *       *       *       *

          [(8)] (7) Exception for certain fslic assisted 
        institutions.--No depository institution shall have any 
        liability to the Corporation under this subsection as 
        the result of the default of, or assistance provided 
        with respect to, an insured depository institution 
        which is an affiliate of such depository institution 
        if--
                  (A)  * * *

           *       *       *       *       *       *       *

          [(9)] (8) Commonly controlled defined.--For purposes 
        of this subsection, depository institutions are 
        commonly controlled if--
                  (A)  * * *

           *       *       *       *       *       *       *


SEC. 6. FACTORS TO BE CONSIDERED.

  The factors that are required, under section 4, to be 
considered in connection with, and enumerated in, any 
certificate issued pursuant to section 4 and that are required, 
under section 5, to be considered by the Board of Directors in 
connection with any determination by such Board pursuant to 
section 5 are the following:
          (1)  * * *

           *       *       *       *       *       *       *

          (5) The risk presented by such depository institution 
        to the [Bank Insurance Fund or the Savings Association 
        Insurance Fund] Deposit Insurance Fund.

           *       *       *       *       *       *       *

  Sec. 7. (a)(1)  * * *

           *       *       *       *       *       *       *

  (3) Each insured depository institution shall make to the 
appropriate Federal banking agency 4 reports of condition 
annually upon dates which shall be selected by the Chairman of 
the Board of Directors, the Comptroller of the Currency, the 
Chairman of the Board of Governors of the Federal Reserve 
System, and the Director of the Office of Thrift Supervision. 
The dates selected shall be the same for all insured depository 
institutions, except that when any of said reporting dates is a 
nonbusiness day for any depository institution, the preceding 
business day shall be its reporting date. [Two dates shall be 
selected within the semiannual period of January to June 
inclusive, and the reports on such dates shall be the basis for 
the certified statement to be filed in July pursuant to 
subsection (c) of this section, and two dates shall be selected 
within the semiannual period of July to December inclusive, and 
the reports on such dates shall be the basis for the certified 
statement to be filed in January pursuant to subsection (c) of 
this section.] Such reports of condition shall be the basis for 
the certified statements to be filed pursuant to subsection 
(c). The deposit liabilities shall be reported in said reports 
of condition in accordance with and pursuant to paragraphs (4) 
and (5) of this subsection, and such other information shall be 
reported therein as may be required by the respective agencies. 
Each said report of condition shall contain a declaration by 
the president, a vice president, the cashier or the treasurer, 
or by any other officer designated by the board of directors or 
trustees of the reporting depository institution to make such 
declaration, that the report is true and correct to the best of 
his knowledge and belief. The correctness of said report of 
conditions shall be attested by the signatures of at least two 
directors or trustees of the reporting depository institution 
other than the officer making such declaration, with a 
declaration that the report has been examined by them and to 
the best of their knowledge and belief is true and correct. At 
the time of making said reports of condition each insured 
depository institution shall furnish to the Corporation a copy 
thereof containing such signed declaration and attestations. 
Nothing herein shall preclude any of the foregoing agencies 
from requiring the banks or savings associations under its 
jurisdiction to make additional reports of condition at any 
time.

           *       *       *       *       *       *       *

  (b) Assessments.--
          (1) Risk-based assessment system.--
                  (A)  * * *
                  (B)  Private reinsurance authorized.--In 
                carrying out this paragraph, the Corporation 
                may--
                          (i)  * * *
                          (ii) base that institution's 
                        [semiannual] assessment (in whole or in 
                        part) on the cost of the reinsurance.
                  (C) Risk-based assessment system defined.--
                For purposes of this paragraph, the term 
                ``risk-based assessment system'' means a system 
                for calculating a depository institution's 
                [semiannual] assessment based on--
                          (i) the probability that the [deposit 
                        insurance fund] Deposit Insurance Fund 
                        will incur a loss with respect to the 
                        institution, taking into consideration 
                        the risks attributable to--
                                  (I)  * * *

           *       *       *       *       *       *       *

                          (iii) the revenue needs of the 
                        [deposit insurance fund] Deposit 
                        Insurance Fund.
                  (D) Separate assessment systems.--The Board 
                of Directors may establish separate risk-based 
                assessment systems for large and small members 
                of [each deposit insurance fund] the Deposit 
                Insurance Fund.
                  (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 2003, the Board of 
                Directors may implement such revisions or 
                modification in final form only after notice 
                and opportunity for comment.
          (2) Setting assessments.--
                  [(A) Achieving and maintaining designated 
                reserve ratio.--
                          [(i) In general.--The Board of 
                        Directors shall set semiannual 
                        assessments for insured depository 
                        institutions when necessary, and only 
                        to the extent necessary--
                                  [(I) to maintain the reserve 
                                ratio of each deposit insurance 
                                fund at the designated reserve 
                                ratio; or
                                  [(II) if the reserve ratio is 
                                less than the designated 
                                reserve ratio, to increase the 
                                reserve ratio to the designated 
                                reserve ratio as provided in 
                                paragraph (3).
                          [(ii) Factors to be considered.--In 
                        carrying out clause (i), the Board of 
                        Directors shall consider the deposit 
                        insurance fund's--
                                  [(I) expected operating 
                                expenses,
                                  [(II) case resolution 
                                expenditures and income,
                                  [(III) the effect of 
                                assessments on members' 
                                earnings and capital, and
                                  [(IV) any other factors that 
                                the Board of Directors may deem 
                                appropriate.
                          [(iii) Limitation on assessment.--
                        Except as provided in clause (v), the 
                        Board of Directors shall not set 
                        semiannual assessments with respect to 
                        a deposit insurance fund in excess of 
                        the amount needed--
                                  [(I) to maintain the reserve 
                                ratio of the fund at the 
                                designated reserve ratio; or
                                  [(II) if the reserve ratio is 
                                less than the designated 
                                reserve ratio, to increase the 
                                reserve ratio to the designated 
                                reserve ratio.
                          [(iv) Designated reserve ratio 
                        defined.--The designated reserve ratio 
                        of each deposit insurance fund for each 
                        year shall be--
                                  [(I) 1.25 percent of 
                                estimated insured deposits; or
                                  [(II) a higher percentage of 
                                estimated insured deposits that 
                                the Board of Directors 
                                determines to be justified for 
                                that year by circumstances 
                                raising a significant risk of 
                                substantial future losses to 
                                the fund.
                          [(v) Exception to limitation on 
                        assessments.--The Board of Directors 
                        may set semiannual assessments in 
                        excess of the amount permitted under 
                        clauses (i) and (iii) with respect to 
                        insured depository institutions that 
                        exhibit financial, operational, or 
                        compliance weaknesses ranging from 
                        moderately severe to unsatisfactory, or 
                        are not well capitalized, as that term 
                        is defined in section 38.
                  [(B) Independent treatment of funds.--The 
                Board of Directors shall--
                          [(i) set semiannual assessments for 
                        members of each deposit insurance fund 
                        independently from semiannual 
                        assessments for members of any other 
                        deposit insurance fund; and
                          [(ii) set the designated reserve 
                        ratio of each deposit insurance fund 
                        independently from the designated 
                        reserve ratio of any other deposit 
                        insurance fund.]
                  (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.
                  (C) Notice of assessments.--The Corporation 
                shall notify each insured depository 
                institution of that institution's [semiannual] 
                assessment.
                  (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.
                  [(E) Minimum assessments.--The Corporation 
                shall design the risk-based assessment system 
                for any deposit insurance fund so that, if the 
                Corporation has borrowings outstanding under 
                section 14 on behalf of that fund or the 
                reserve ratio of that fund remains below the 
                designated reserve ratio, the total amount 
                raised by semiannual assessments on members of 
                that fund shall be not less than the total 
                amount that would have been raised if--
                          [(i) section 7(b) as in effect on 
                        July 15, 1991 remained in effect;
                          [(ii) the assessment rate in effect 
                        on July 15, 1991 remained in effect; 
                        and
                          [(iii) notwithstanding any other 
                        provision of this subsection, during 
                        the period beginning on the date of 
                        enactment of the Deposit Insurance 
                        Funds Act of 1996, and ending on 
                        December 31, 1998, the assessment rate 
                        for a Savings Association Insurance 
                        Fund member may not be less than the 
                        assessment rate for a Bank Insurance 
                        Fund member that poses a comparable 
                        risk to the deposit insurance fund.
                  [(F) Transition rule for savings association 
                insurance fund.--With respect to the Savings 
                Association Insurance Fund, during the period 
                beginning on the effective date of the 
                amendments made by section 302(a) of the 
                Federal Deposit Insurance Corporation 
                Improvement Act of 1991 and ending on December 
                31, 1997--
                          [(i) subparagraph (A)(i)(II) shall 
                        apply as if such subparagraph did not 
                        include ``as provided in paragraph 
                        (3)''; and
                          [(ii) subparagraph (E) shall be 
                        applied by substituting ``if section 
                        7(b) as in effect on July 15, 1991 
                        remained in effect.'' for ``if--'' and 
                        all that follows through clause (ii).
                  [(G) Special rule until the insurance funds 
                achieve the designated reserve ratio.--Until a 
                deposit insurance fund achieves the designated 
                reserve ratio, the Corporation may limit the 
                maximum assessment on insured depository 
                institutions under the risk-based assessment 
                system authorized under paragraph (1) to not 
                less than 10 basis points above the average 
                assessment on insured depository institutions 
                under that system.]
                  [(H)] (E) Bank enterprise act requirement.--
                The Corporation shall design the risk-based 
                assessment system so that, insofar as the 
                system bases assessments, directly or 
                indirectly, on deposits, the portion of the 
                deposits of any insured depository institution 
                which are attributable to lifeline accounts 
                established in accordance with the Bank 
                Enterprise Act of 1991 shall be subject to 
                assessment [at a rate determined in accordance 
                with such Act] at \1/2\ the assessment rate 
                otherwise applicable for such insured 
                depository institution.
          [(3)  Special rule for recapitalizing 
        undercapitalized funds.--
                  [(A) In general.--Except as provided in 
                paragraph (2)(F), if the reserve ratio of any 
                deposit insurance fund is less than the 
                designated reserve ratio under paragraph 
                (2)(A)(iv), the Board of Directors shall set 
                semiannual assessment rates for members of that 
                fund--
                          [(i) that are sufficient to increase 
                        the reserve ratio for that fund to the 
                        designated reserve ratio not later than 
                        1 year after such rates are set; or
                          [(ii) in accordance with a schedule 
                        promulgated by the Corporation under 
                        subparagraph (B).
                  [(B) Recapitalization schedules.--For 
                purposes of subparagraph (A)(ii), the 
                Corporation shall by regulation promulgate a 
                schedule that specifies, at semiannual 
                intervals, target reserve ratios for that fund, 
                culminating in a reserve ratio that is equal to 
                the designated reserve ratio not later than 15 
                years after the date on which the schedule is 
                implemented.
                  [(C) Amending schedule.--The Corporation may, 
                by regulation, amend a schedule promulgated 
                under subparagraph (B) and such amendment may 
                extend the date specified in subparagraph (B) 
                to such later date as the Corporation 
                determines will, over time, maximize the amount 
                of semiannual assessments received by the 
                Savings Association Insurance Fund, net of 
                insurance losses incurred by the Fund.
                  [(D) Application to saif members.--This 
                paragraph shall become applicable to Savings 
                Association Insurance Fund members on January 
                1, 1998.
          [(4) Semiannual period defined.--For purposes of this 
        section, the term ``semiannual period'' means a period 
        beginning on January 1 of any calendar year and ending 
        on June 30 of the same year, or a period beginning on 
        July 1 of any calendar year and ending on December 31 
        of the same year.
          [(5) Records to be maintained.--Each insured 
        depository institution shall maintain all records that 
        the Corporation may require for verifying the 
        correctness of the institution's semiannual 
        assessments. No insured depository institution shall be 
        required to retain those records for that purpose for a 
        period of more than 5 years from the date of the filing 
        of any certified statement, except that when there is a 
        dispute between the insured depository institution and 
        the Corporation over the amount of any assessment, the 
        depository institution shall retain the records until 
        final determination of the issue.]
          (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.
                  (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.
          (4) 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.
          [(6)] (5) Emergency special assessments.--In addition 
        to the other assessments imposed on insured depository 
        institutions under this subsection, the Corporation may 
        impose 1 or more special assessments on insured 
        depository institutions in an amount determined by the 
        Corporation if the amount of [any such assessment] any 
        such assessment is necessary--
                  [(A) is necessary--]
                  [(i)] (A) to provide sufficient assessment 
                income to repay amounts borrowed from the 
                Secretary of the Treasury under section 14(a) 
                in accordance with the repayment schedule in 
                effect under section 14(c) during the period 
                with respect to which such assessment is 
                imposed;
                  [(ii)] (B) to provide sufficient assessment 
                income to repay obligations issued to and other 
                amounts borrowed from [Bank Insurance Fund 
                members] insured depository institutions under 
                section 14(d); or
                  [(iii)] (C) for any other purpose that the 
                Corporation may deem necessary[; and].
                  [(B) is allocated between Bank Insurance Fund 
                members and Savings Association Insurance Fund 
                members in amounts which reflect the degree to 
                which the proceeds of the amounts borrowed are 
                to be used for the benefit of the respective 
                insurance funds.]
          [(7)] (6) Community enterprise credits.--The 
        Corporation shall allow a credit against any semiannual 
        assessment to any insured depository institution which 
        satisfies the requirements of the Community Enterprise 
        Assessment Credit Board under section 233(a)(1) of the 
        Bank Enterprise Act of 1991 in the amount determined by 
        such Board by regulation.
  (c) Certified Statements; Payments.--
          (1) Certified statements required.--
                  (A) In general.--Each insured depository 
                institution shall file with the Corporation a 
                certified statement containing such information 
                as the Corporation may require for determining 
                the institution's [semiannual] assessment.

           *       *       *       *       *       *       *

          (2) Payments required.--
                  (A) In general.--Each insured depository 
                institution shall pay to the Corporation the 
                [semiannual] assessment imposed under 
                subsection (b).

           *       *       *       *       *       *       *

          (3) Newly insured institutions.--To facilitate the 
        administration of this section, the Board of Directors 
        may waive the requirements of paragraphs (1) and (2) 
        for the [semiannual period] initial assessment period 
        in which a depository institution becomes insured.

           *       *       *       *       *       *       *

  [(e) Refunds.--
          [(1) Overpayments.--In the case of any payment of an 
        assessment by an insured depository institution in 
        excess of the amount due to the Corporation, the 
        Corporation may--
                  [(A) refund the amount of the excess payment 
                to the insured depository institution; or
                  [(B) credit such excess amount toward the 
                payment of subsequent semiannual assessments 
                until such credit is exhausted.
          [(2) Balance in insurance fund in excess of 
        designated reserve.--
                  [(A) In general.--Subject to subparagraphs 
                (B) and (C), if, as of the end of any 
                semiannual assessment period beginning after 
                the date of the enactment of the Deposit 
                Insurance Funds Act of 1996, the amount of the 
                actual reserves in--
                          [(i) the Bank Insurance Fund (until 
                        the merger of such fund into the 
                        Deposit Insurance Fund pursuant to 
                        section 2704 of the Deposit Insurance 
                        Funds Act of 1996); or
                          [(ii) the Deposit Insurance Fund 
                        (after the establishment of such fund),

                exceeds the balance required to meet the 
                designated reserve ratio applicable with 
                respect to such fund, such excess amount shall 
                be refunded to insured depository institutions 
                by the Corporation on such basis as the Board 
                of Directors determines to be appropriate, 
                taking into account the factors considered 
                under the risk-based assessment system.
                  [(B) Refund not to exceed previous semiannual 
                assessment.--The amount of any refund under 
                this paragraph to any member of a deposit 
                insurance fund for any semiannual assessment 
                period may not exceed the total amount of 
                assessments paid by such member to the 
                insurance fund with respect to such period.
                  [(C) Refund limitation for certain 
                institutions.--No refund may be made under this 
                paragraph with respect to the amount of any 
                assessment paid for any semiannual assessment 
                period by any insured depository institution 
                described in clause (v) of subsection 
                (b)(2)(A).]
  (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 2003, 
                        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 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 (II).
                          (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.

           *       *       *       *       *       *       *

  (i) Insurance of Trust Funds.--
          (1) In general.--Trust funds held on deposit by an 
        insured depository institution in a fiduciary capacity 
        as trustee pursuant to any irrevocable trust 
        established pursuant to any statute or written trust 
        agreement shall be insured in an amount not to exceed 
        [$100,000] the standard maximum deposit insurance 
        amount (as determined under section 11(a)(1)) for each 
        trust estate.

           *       *       *       *       *       *       *

          (3) Bank deposit financial assistance program.--
        Notwithstanding paragraph (1), funds deposited by an 
        insured depository institution pursuant to the Bank 
        Deposit Financial Assistance Program of the Department 
        of Energy shall be separately insured in an amount not 
        to exceed [$100,000] the standard maximum deposit 
        insurance amount (as determined under section 11(a)(1)) 
        for each insured depository institution depositing such 
        funds.

           *       *       *       *       *       *       *

  (j)(1)  * * *

           *       *       *       *       *       *       *

  (7) The appropriate Federal banking agency may disapprove any 
proposed acquisition if--
          (A)  * * *

           *       *       *       *       *       *       *

          (F) the appropriate Federal banking agency determines 
        that the proposed transaction would result in an 
        adverse effect on the [Bank Insurance Fund or the 
        Savings Association Insurance Fund] Deposit Insurance 
        Fund.

           *       *       *       *       *       *       *

  Sec. 8. (a)  * * *

           *       *       *       *       *       *       *

  (p) Notwithstanding any other provision of law, whenever the 
Board of Directors shall determine that an insured depository 
institution is not engaged in the business of receiving 
deposits, other than trust funds as herein defined, the 
Corporation shall notify the depository institution that its 
insured status will terminate at the expiration of the first 
full [semiannual] assessment period following such notice. A 
finding by the Board of Directors that a depository institution 
is not engaged in the business of receiving deposits, other 
than such trust funds, shall be conclusive. The Board of 
Directors shall prescribe the notice to be given by the 
depository institution of such termination and the Corporation 
may publish notice thereof. Upon the termination of the insured 
status of any such depository institution, its deposits shall 
thereupon cease to be insured and the depository institution 
shall thereafter be relieved of all future obligations to the 
Corporation, including the obligation to pay future 
assessments.
  (q) Whenever the liabilities of an insured depository 
institution for deposits shall have been assumed by another 
insured depository institution or depository institutions, 
whether by way of merger, consolidation, or other statutory 
assumption, or pursuant to contract (1) the insured status of 
the depository institution whose liabilities are so assumed 
shall terminate on the date of receipt by the Corporation of 
satisfactory evidence of such assumption; (2) the separate 
insurance of all deposits so assumed shall terminate at the end 
of six months from the date such assumption takes effect or, in 
the case of any time deposit, the earliest maturity date after 
the six-month period. Where the deposits of an insured 
depository institution are assumed by a newly insured 
depository institution, the depository institution whose 
deposits are assumed shall not be required to pay any 
assessment with respect to the deposits which have been so 
assumed after the [semiannual period] assessment period in 
which the assumption takes effect.

           *       *       *       *       *       *       *

  (t) Authority of FDIC To Take Enforcement Action Against 
Insured Depository Institutions and Institution-Affiliated 
Parties.--
          (1)  * * *
          (2) FDIC's authority to act if appropriate federal 
        banking agency fails to follow recommendation.--If the 
        appropriate Federal banking agency does not, before the 
        end of the 60-day period beginning on the date on which 
        the agency receives the recommendation under paragraph 
        (1), take the enforcement action recommended by the 
        Corporation or provide a plan acceptable to the 
        Corporation for responding to the Corporation's 
        concerns, the Corporation may take the recommended 
        enforcement action if the Board of Directors 
        determines, upon a vote of its members, that--
                  (A)  * * *

           *       *       *       *       *       *       *

                  (C) the conduct or threatened conduct 
                (including any acts or omissions) poses a risk 
                to the [deposit insurance fund] Deposit 
                Insurance Fund, or may prejudice the interests 
                of the institution's depositors.

           *       *       *       *       *       *       *

  Sec. 11. (a) Deposit Insurance.--
          (1) Insured amounts payable.--
                  (A)  * * *
                  [(B) Net amount of insured deposit.--The net 
                amount due to any depositor at an insured 
                depository institution shall not exceed 
                $100,000 as determined in accordance with 
                subparagraphs (C) and (D).]
                  (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).

           *       *       *       *       *       *       *

                  [(D) Coverage on pro rata or ``pass-through'' 
                basis.--
                          [(i) In general.--Except as provided 
                        in clause (ii), for the purpose of 
                        determining the amount of insurance due 
                        under subparagraph (B), the Corporation 
                        shall provide deposit insurance 
                        coverage with respect to deposits 
                        accepted by any insured depository 
                        institution on a pro rata or ``pass-
                        through'' basis to a participant in or 
                        beneficiary of an employee benefit plan 
                        (as defined in section 
                        11(a)(8)(B)(ii)), including any 
                        eligible deferred compensation plan 
                        described in section 457 of the 
                        Internal Revenue Code of 1986.
                          [(ii) Exception.--After the end of 
                        the 1-year period beginning on the date 
                        of the enactment of the Federal Deposit 
                        Insurance Corporation Improvement Act 
                        of 1991, the Corporation shall not 
                        provide insurance coverage on a pro 
                        rata or ``pass-through'' basis pursuant 
                        to clause (i) with respect to deposits 
                        accepted by any insured depository 
                        institution which, at the time such 
                        deposits are accepted, may not accept 
                        brokered deposits under section 29.
                          [(iii) Coverage under certain 
                        circumstances.--Clause (ii) shall not 
                        apply with respect to any deposit 
                        accepted by an insured depository 
                        institution described in such clause 
                        if, at the time the deposit is 
                        accepted--
                                  [(I) the institution meets 
                                each applicable capital 
                                standard; and
                                  [(II) the depositor receives 
                                a written statement from the 
                                institution that such deposits 
                                at such institution are 
                                eligible for insurance coverage 
                                on a pro rata or ``pass-
                                through'' basis.]
                  (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.
                  (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 2003, $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 2005, 
                        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 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.
  [(2)(A) Notwithstanding any limitation in this Act or in any 
other provision of law relating to the amount of deposit 
insurance available for the account of any one depositor, in 
the case of a depositor who is--]
          (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--
                          (i) an officer, employee, or agent of 
                        the United States having official 
                        custody of public funds and lawfully 
                        investing or depositing the same in 
                        time and savings deposits in an insured 
                        depository institution;
                          (ii) an officer, employee, or agent 
                        of any State of the United States, or 
                        of any county, municipality, or 
                        political subdivision thereof having 
                        official custody of public funds and 
                        lawfully investing or depositing the 
                        same in time and savings deposits in an 
                        insured depository institution in such 
                        State;
                          (iii) an officer, employee, or agent 
                        of the District of Columbia having 
                        official custody of public funds and 
                        lawfully investing or depositing the 
                        same in time and savings deposits in an 
                        insured depository institution in the 
                        District of Columbia;
                          (iv) an officer, employee, or agent 
                        of the Commonwealth of Puerto Rico, of 
                        the Virgin Islands, of American Samoa, 
                        of the Trust Territory of the Pacific 
                        Islands, or of Guam, or of any county, 
                        municipality, or political subdivision 
                        thereof having official custody of 
                        public funds and lawfully investing or 
                        depositing the same in time and savings 
                        deposits in an insured depository 
                        institution in the Commonwealth of 
                        Puerto Rico, the Virgin Islands, 
                        American Samoa, the Trust Territory of 
                        the Pacific Islands, or Guam, 
                        respectively; or
                          (v) an officer, employee, or agent of 
                        any Indian tribe (as defined in section 
                        3(c) of the Indian Financing Act of 
                        1974) or agency thereof having official 
                        custody of tribal funds and lawfully 
                        investing or depositing the same in 
                        time and savings deposits in an insured 
                        depository institution[;].
[such depositor shall, for the purpose of determining the 
amount of insured deposits under this subsection, be deemed a 
depositor in such custodial capacity separate and distinct from 
any other officer, employee, or agent of the United States or 
any public unit referred to in clause (ii), (iii), (iv), or (v) 
and the deposit of any such depositor shall be insured in an 
amount not to exceed $100,000 per account in an amount not to 
exceed $100,000 per account.]
  [(B) The]
                  (F) Authority to limit deposits.--The 
                Corporation may limit the aggregate amount of 
                funds that may be invested or deposited in 
                deposits in any insured depository institution 
                by any [depositor referred to in subparagraph 
                (A) of this paragraph] municipal depositor on 
                the basis of the size of any such bank in terms 
                of its assets: Provided, however, such 
                limitation may be exceeded by the pledging of 
                acceptable securities to the [depositor 
                referred to in subparagraph (A) of this 
                paragraph] municipal depositor when and where 
                required.
          (3) Certain retirement accounts.--
                  (A) In general.--Notwithstanding any 
                limitation in this Act relating to the amount 
                of deposit insurance available for the account 
                of any 1 depositor, deposits in an insured 
                depository institution made in connection 
                with--
                          (i)  * * *

           *       *       *       *       *       *       *

                shall be aggregated and insured in an amount 
                not to exceed [$100,000] 2 times the standard 
                maximum deposit insurance amount (as determined 
                under paragraph (1)) per participant per 
                insured depository institution.

           *       *       *       *       *       *       *

          [(4) General provisions relating to funds.--
                  [(A) Maintenance and use of funds.--The Bank 
                Insurance Fund established under paragraph (5) 
                and the Savings Association Insurance Fund 
                established under paragraph (6) shall each be--
                          [(i) maintained and administered by 
                        the Corporation;
                          [(ii) maintained separately and not 
                        commingled; and
                          [(iii) used by the Corporation to 
                        carry out its insurance purposes in the 
                        manner provided in this subsection.
                  [(B) Limitation on use.--Notwithstanding any 
                provision of law other than section 
                13(c)(4)(G), the Bank Insurance Fund and the 
                Savings Association 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 
                        or the Resolution Trust Corporation has 
                        been appointed conservator or receiver, 
                        in connection with any type of 
                        resolution by the Corporation or the 
                        Resolution Trust 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 the 
                        Resolution Trust 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.
          [(5) Bank insurance fund.--
                  [(A) Establishment.--There is established a 
                fund to be known as the Bank Insurance Fund.
                  [(B) Transfer to fund.--On the date of the 
                enactment of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989, the 
                Permanent Insurance Fund shall be dissolved and 
                all assets and liabilities of the Permanent 
                Insurance Fund shall be transferred to the Bank 
                Insurance Fund.
                  [(C) Uses.--The Bank Insurance Fund shall be 
                available to the Corporation for use with 
                respect to Bank Insurance Fund members.
                  [(D) Deposits.--All amounts assessed against 
                Bank Insurance Fund members by the Corporation 
                shall be deposited into the Bank Insurance 
                Fund.
          [(6) Savings association insurance fund.--
                  [(A) Establishment.--There is established a 
                fund to be known as the Savings Association 
                Insurance Fund.
                  [(B) Uses.--The Savings Association Insurance 
                Fund shall be available to the Corporation for 
                use with respect to Savings Association 
                Insurance Fund members.
                  [(C) Deposits.--All amounts assessed against 
                Savings Association Insurance Fund members 
                which are not required for the Financing 
                Corporation, the Resolution Funding 
                Corporation, or the FSLIC Resolution Fund shall 
                be deposited in the Savings Association 
                Insurance Fund.
                  [(D) Treasury payments to fund.--To the 
                extent of the availability of amounts provided 
                in appropriation Acts and subject to 
                subparagraphs (E) and (G), the Secretary of the 
                Treasury shall pay to the Savings Association 
                Insurance Fund such amounts as may be needed to 
                pay losses incurred by the Fund in fiscal years 
                1994 through 1998.
                  [(E) Certification conditions on availability 
                of funding.--No amount appropriated for 
                payments by the Secretary of the Treasury in 
                accordance with subparagraph (D) for any fiscal 
                year may be expended unless the Chairperson of 
                the Board of Directors certifies to the 
                Congress, at any time before the beginning of 
                or during such fiscal year, that--
                          [(i) such amount is needed to pay for 
                        losses which have been incurred or can 
                        reasonably be expected to be incurred 
                        by the Savings Association Insurance 
                        Fund;
                          [(ii) the Board of Directors has 
                        determined that--
                                  [(I) Savings Association 
                                Insurance Fund members, in the 
                                aggregate, are unable to pay 
                                additional semiannual 
                                assessments under section 7(b) 
                                at the assessment rates which 
                                would be required in order to 
                                cover, from such additional 
                                assessments, losses which have 
                                been incurred or can reasonably 
                                be expected to be incurred by 
                                the Fund without adversely 
                                affecting the ability of such 
                                members to raise and maintain 
                                capital or to maintain the 
                                members' assessment base; and
                                  [(II) an increase in the 
                                assessment rates for Savings 
                                Association Insurance Fund 
                                members to cover such losses 
                                could reasonably be expected to 
                                result in greater losses to the 
                                Government;
                          [(iii) the Board of Directors has 
                        determined that--
                                  [(I) Savings Association 
                                Insurance Fund members, in the 
                                aggregate, are unable to pay 
                                additional semiannual 
                                assessments under section 7(b) 
                                at the assessment rates which 
                                would be required in order to 
                                meet the repayment schedule 
                                required under section 14(c) 
                                for any amount borrowed under 
                                section 14(a) to cover losses 
                                which have been incurred or can 
                                reasonably be expected to be 
                                incurred by the Fund without 
                                adversely affecting the ability 
                                of such members to raise and 
                                maintain capital or to maintain 
                                the members' assessment base; 
                                and
                                  [(II) an increase in the 
                                assessment rates for Savings 
                                Association Insurance Fund 
                                members to meet any such 
                                repayment schedule could 
                                reasonably be expected to 
                                result in greater losses to the 
                                Government;
                          [(iv) as of the date of 
                        certification, the Corporation has in 
                        effect procedures designed to ensure 
                        that the activities of the Savings 
                        Association Insurance Fund and the 
                        affairs of any Savings Association 
                        Insurance Fund member for which a 
                        conservator or receiver has been 
                        appointed are conducted in an efficient 
                        manner and the Corporation is in 
                        compliance with such procedures;
                          [(v) with respect to the most recent 
                        audit of the Savings Association 
                        Insurance Fund by the Comptroller 
                        General of the United States before the 
                        date of the certification--
                                  [(I) the Corporation has 
                                taken or is taking appropriate 
                                action to implement any 
                                recommendation made by the 
                                Comptroller General; or
                                  [(II) no corrective action is 
                                necessary or appropriate;
                          [(vi) the Corporation has provided 
                        for the appointment of a chief 
                        financial officer who--
                                  [(I) does not have other 
                                operating responsibilities;
                                  [(II) will report directly to 
                                the Chairperson of the 
                                Corporation; and
                                  [(III) will have such 
                                authority and duties of chief 
                                financial officers under 
                                section 902 of title 31, United 
                                States Code, as the Board of 
                                Directors of the Corporation 
                                determines to be appropriate 
                                with respect to the 
                                Corporation;
                          [(vii) the Corporation has provided 
                        for the appointment of a senior officer 
                        whose responsibilities shall include 
                        setting uniform standards for 
                        contracting and contracting enforcement 
                        in connection with the administration 
                        of the Fund;
                          [(viii) the Corporation is 
                        implementing the minority outreach 
                        provisions mandated by section 1216 of 
                        the Financial Institutions Reform, 
                        Recovery, and Enforcement Act of 1989;
                          [(ix) the Corporation has provided 
                        for the appointment of a senior 
                        attorney, at the assistant general 
                        counsel level or above, responsible for 
                        professional liability cases; and
                          [(x) the Corporation has improved the 
                        management of legal services by--
                                  [(I) utilizing staff counsel 
                                when such utilization would 
                                provide the same level of 
                                quality in legal services as 
                                the use of outside counsel at 
                                the same or a lower estimated 
                                cost; and
                                  [(II) employing outside 
                                counsel only if the use of 
                                outside counsel would provide 
                                the most practicable, 
                                efficient, and cost-effective 
                                resolution to the action and 
                                only under a negotiated fee, 
                                contingent fee, or 
                                competitively bid fee 
                                agreement.
                  [(F) Availability of rtc funding.--At any 
                time before the end of the 2-year period 
                beginning on the date of the termination of the 
                Resolution Trust Corporation, the Secretary of 
                the Treasury shall provide, out of funds 
                appropriated to the Resolution Trust 
                Corporation pursuant to section 21A(i)(3) of 
                the Federal Home Loan Bank Act and not expended 
                by the Resolution Trust Corporation, to the 
                Savings Association Insurance Fund, for any 
                year such amounts as are needed by the Fund and 
                are not needed by the Resolution Trust 
                Corporation, if the Chairperson of the Board of 
                Directors has certified to the Congress that--
                          [(i) such amount is needed to pay for 
                        losses which have been incurred or can 
                        reasonably be expected to be incurred 
                        by the Savings Association Insurance 
                        Fund;
                          [(ii) the Board of Directors has 
                        determined that--
                                  [(I) Savings Association 
                                Insurance Fund members, in the 
                                aggregate, are unable to pay 
                                additional semiannual 
                                assessments under section 7(b) 
                                at the assessment rates which 
                                would be required in order to 
                                cover, from such additional 
                                assessments, losses which have 
                                been incurred or can reasonably 
                                be expected to be incurred by 
                                the Savings Association 
                                Insurance Fund without 
                                adversely affecting the ability 
                                of such members to raise and 
                                maintain capital or to maintain 
                                the members' assessment base; 
                                and
                                  [(II) an increase in the 
                                assessment rates for Savings 
                                Association Insurance Fund 
                                members to cover such losses 
                                could reasonably be expected to 
                                result in greater losses to the 
                                Government;
                          [(iii) the Board of Directors has 
                        determined that--
                                  [(I) Savings Association 
                                Insurance Fund members, in the 
                                aggregate, are unable to pay 
                                additional semiannual 
                                assessments under section 7(b) 
                                at the assessment rates which 
                                would be required in order to 
                                meet the repayment schedule 
                                required under section 14(c) 
                                for any amount borrowed under 
                                section 14(a) to cover losses 
                                which have been incurred or can 
                                reasonably be expected to be 
                                incurred by the Savings 
                                Association Insurance Fund 
                                without adversely affecting the 
                                ability of such members to 
                                raise and maintain capital or 
                                to maintain such members' 
                                assessment base; and
                                  [(II) an increase in the 
                                assessment rates for Savings 
                                Association Insurance Fund 
                                members to meet any such 
                                repayment schedule could 
                                reasonably be expected to 
                                result in greater losses to the 
                                Government;
                          [(iv) the Corporation has provided 
                        for the appointment of a chief 
                        financial officer who--
                                  [(I) does not have other 
                                operating responsibilities;
                                  [(II) will report directly to 
                                the Chairperson of the 
                                Corporation; and
                                  [(III) will have such 
                                authority and duties of chief 
                                financial officers under 
                                section 902 of title 31, United 
                                States Code, as the Board of 
                                Directors of the Corporation 
                                determines to be appropriate 
                                with respect to the 
                                Corporation;
                          [(v) the Corporation has provided for 
                        the appointment of a senior officer 
                        whose responsibilities shall include 
                        setting uniform standards for 
                        contracting and contracting enforcement 
                        in connection with the administration 
                        of the Fund;
                          [(vi) the Corporation is implementing 
                        the minority outreach provisions 
                        mandated by section 1216 of the 
                        Financial Institutions Reform, 
                        Recovery, and Enforcement Act of 1989;
                          [(vii) the Corporation has provided 
                        for the appointment of a senior 
                        attorney, at the assistant general 
                        counsel level or above, responsible for 
                        professional liability cases; and
                          [(viii) the Corporation has improved 
                        the management of legal services by--
                                  [(I) utilizing staff counsel 
                                when such utilization would 
                                provide the same level of 
                                quality in legal services as 
                                the use of outside counsel at 
                                the same or a lower estimated 
                                cost; and
                                  [(II) employing outside 
                                counsel only if the use of 
                                outside counsel would provide 
                                the most practicable, 
                                efficient, and cost-effective 
                                resolution to the action and 
                                only under a negotiated fee, 
                                contingent fee, or 
                                competitively bid fee 
                                agreement.
                  [(G) Exception to subparagraph (d).--
                Notwithstanding subparagraph (D), no payment 
                may be made pursuant to such subparagraphs 
                after the Savings Association Insurance Fund 
                achieves a reserve ratio of 1.25 percent.
                  [(H) Appearance upon request.--The Secretary 
                of the Treasury and the Chairperson of the 
                Board of Directors of the Federal Deposit 
                Insurance Corporation shall appear before the 
                Committee on Banking, Finance and Urban Affairs 
                of the House of Representatives or the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate, upon the request of the 
                chairman of the committee, to report on any 
                certification made to the Congress under 
                subparagraph (E) or (F).
                  [(I) Borrowing authority.--
                          [(i) 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 Savings 
                        Association Insurance Fund.
                          [(ii) Terms and conditions.--Any loan 
                        from any Federal home loan bank under 
                        clause (i) to the Savings Association 
                        Insurance Fund shall--
                                  [(I) bear a rate of interest 
                                of not less than such bank's 
                                current marginal cost of funds, 
                                taking into account the 
                                maturities involved;
                                  [(II) be adequately secured, 
                                as determined by the Federal 
                                Housing Finance Board;
                                  [(III) be a direct liability 
                                of such Fund; and
                                  [(IV) be subject to the 
                                limitations of section 15(c).
                  [(J) Authorization of appropriations.--
                Subject to subparagraph (E), there are 
                authorized to be appropriated to the Secretary 
                of the Treasury, such sums as may be necessary 
                to carry out the provisions of subparagraph (D) 
                for fiscal years 1994 through 1998, except that 
                the aggregate amount appropriated pursuant to 
                this authorization may not exceed 
                $8,000,000,000.
                  [(K) Return to treasury.--If the aggregate 
                amount of funds transferred to the Savings 
                Association Insurance Fund under subparagraph 
                (D) or (F) exceeds the amount needed to cover 
                losses incurred by the Fund, such excess amount 
                shall be deposited in the general fund of the 
                Treasury.
          [(7) Provisions applicable to maintenance of 
        accounts.--
                  [(A) Corporation's authority.--Any provision 
                of this Act forbidding the commingling of the 
                Bank Insurance Fund with the Savings 
                Association Insurance Fund, or requiring the 
                separate maintenance of the Bank Insurance Fund 
                and the Savings Association Insurance Fund, is 
                not intended--
                          [(i) to limit or impair the authority 
                        of the Corporation to use the same 
                        facilities and resources in the course 
                        of conducting supervisory, regulatory, 
                        conservatorship, receivership, or 
                        liquidation functions with respect to 
                        banks and savings associations, or to 
                        integrate such functions; or
                          [(ii) to limit or impair the 
                        Corporation's power to combine assets 
                        or liabilities belonging to banks and 
                        savings associations in conservatorship 
                        or receivership for managerial 
                        purposes, or to limit or impair the 
                        Corporation's power to dispose of such 
                        assets or liabilities on an aggregate 
                        basis.
                  [(B) Accounting requirements.--
                          [(i) Accounting for use of facilities 
                        and resources.--The Corporation shall 
                        keep a full and complete accounting of 
                        all costs and expenses associated with 
                        the use of any facility or resource 
                        used in the course of any function 
                        specified in subparagraph (A)(i) and 
                        shall allocate, in the manner provided 
                        in subparagraph (C), any such costs and 
                        expenses incurred by the Corporation--
                                  [(I) with respect to Bank 
                                Insurance Fund members to the 
                                Bank Insurance Fund; and
                                  [(II) with respect to Savings 
                                Association Insurance Fund 
                                members to the Savings 
                                Association Insurance Fund.
                          [(ii) Accounting for holding and 
                        managing assets and liabilities.--The 
                        Corporation shall keep a full and 
                        complete accounting of all costs and 
                        expenses associated with the holding 
                        and management of any asset or 
                        liability specified in subparagraph 
                        (A)(ii).
                          [(iii) Accounting for disposition of 
                        assets and liabilities.--The 
                        Corporation shall keep a full and 
                        complete accounting of all expenses and 
                        receipts associated with the 
                        disposition of any asset or liability 
                        specified in subparagraph (A)(ii).
                          [(iv) Allocation of cost, expenses 
                        and receipts.--The Corporation shall 
                        allocate any cost, expense, and receipt 
                        described in clause (ii) or clause 
                        (iii) which is associated with any 
                        asset or liability belonging to--
                                  [(I) any Bank Insurance Fund 
                                member to the Bank Insurance 
                                Fund; and
                                  [(II) any Savings Association 
                                Insurance Fund member to the 
                                Savings Association Insurance 
                                Fund.
                  [(C) Allocation of administrative expenses.--
                Any personnel, administrative, or other 
                overhead expense of the Corporation shall be 
                allocated--
                          [(i) fully to the Bank Insurance 
                        Fund, if the expense was incurred 
                        directly as a result of the 
                        Corporation's responsibilities solely 
                        with respect to Bank Insurance Fund 
                        members;
                          [(ii) fully to the Savings 
                        Association Insurance Fund, if the 
                        expense was incurred directly as a 
                        result of the Corporation's 
                        responsibilities solely with respect to 
                        Savings Association Insurance Fund 
                        members;
                          [(iii) between the Bank Insurance 
                        Fund and the Savings Association 
                        Insurance Fund, in amounts reflecting 
                        the relative degree to which the 
                        expense was incurred as a result of the 
                        activities of Bank Insurance Fund and 
                        Savings Association Insurance Fund 
                        members; or
                          [(iv) between the Bank Insurance Fund 
                        and the Savings Association Insurance 
                        Fund, in amounts reflecting the 
                        relative total assets as of the end of 
                        the preceding calendar year of Bank 
                        Insurance Fund members and Savings 
                        Association Insurance Fund members, to 
                        the extent that the Board of Directors 
                        is unable to make a determination under 
                        clause (i), (ii), or (iii).]
          (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 
                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.
          [(8)] (5) Certain investment contracts not treated as 
        insured deposits.--
                  (A)  * * *

           *       *       *       *       *       *       *

  (c) Appointment of Corporation as Conservator or Receiver.--
          (1)  * * *

           *       *       *       *       *       *       *

          (5) Grounds for appointing conservator or receiver.--
        The grounds for appointing a conservator or receiver 
        (which may be the Corporation) for any insured 
        depository institution are as follows:
                  (A)  * * *

           *       *       *       *       *       *       *

                  (H) Violations of law.--Any violation of any 
                law or regulation, or any unsafe or unsound 
                practice or condition that is likely to--
                          (i)  * * *

           *       *       *       *       *       *       *

                          (iii) otherwise seriously prejudice 
                        the interests of the institution's 
                        depositors or the [deposit insurance 
                        fund] Deposit Insurance Fund.

           *       *       *       *       *       *       *

          (10) Corporation may appoint itself as conservator or 
        receiver for insured depository institution to prevent 
        loss to [deposit insurance fund] deposit insurance 
        fund.--The Board of Directors may appoint the 
        Corporation as sole conservator or receiver of an 
        insured depository institution, after consultation with 
        the appropriate Federal banking agency and the 
        appropriate State supervisor (if any), if the Board of 
        Directors determines that--
                  (A)  * * *
                  (B) the appointment is necessary to reduce--
                          (i) the risk that the [deposit 
                        insurance fund] Deposit Insurance Fund 
                        would incur a loss with respect to the 
                        insured depository institution, or
                          (ii) any loss that the [deposit 
                        insurance fund] Deposit Insurance Fund 
                        is expected to incur with respect to 
                        that institution.

           *       *       *       *       *       *       *

  (e) Provisions Relating to Contracts Entered Into Before 
Appointment of Conservator or Receiver.--
          (1)  * * *

           *       *       *       *       *       *       *

          (14) Selling credit card accounts receivable.--
                  (A)  * * *
                  (B) Waiver by corporation.--The Corporation 
                may at any time, in its sole discretion and 
                upon such terms as it may prescribe, waive its 
                right to repudiate an agreement to sell credit 
                card accounts receivable if the Corporation--
                          (i) determines that the waiver is in 
                        the best interests of the [deposit 
                        insurance fund] Deposit Insurance Fund; 
                        and
                          (ii) provides a written waiver to the 
                        selling institution.

           *       *       *       *       *       *       *

  (f) Payment of Insured Deposits.--
          (1) In general.--In case of the liquidation of, or 
        other closing or winding up of the affairs of, any 
        insured depository institution, payment of the insured 
        deposits in such institution shall be made by the 
        Corporation as soon as possible, subject to the 
        provisions of subsection (g), either by cash or by 
        making available to each depositor a transferred 
        deposit in a new insured depository institution in the 
        same community or in another insured depository 
        institution in an amount equal to the insured deposit 
        of such depositor, [except that--
                  [(A) all payments made pursuant to this 
                section on account of a closed Bank Insurance 
                Fund member shall be made only from the Bank 
                Insurance Fund, and
                  [(B) all payments made pursuant to this 
                section on account of a closed Savings 
                Association Insurance Fund member shall be made 
                only from the Savings Association Insurance 
                Fund.].

           *       *       *       *       *       *       *

  (i) Valuation of Claims in Default.--
          (1)  * * *

           *       *       *       *       *       *       *

          (3) Additional payments authorized.--
                  (A)  * * *
                  [(B) Source of funds.--If the depository 
                institution in default is a Bank Insurance Fund 
                member, the Corporation may only make such 
                payments out of funds held in the Bank 
                Insurance Fund. If the depository institution 
                in default is a Savings Association Insurance 
                Fund member, the Corporation may only make such 
                payments out of funds held in the Savings 
                Association Insurance Fund.]
                  [(C)] (B) Manner of payment.--The Corporation 
                may make the payments or credit the amounts 
                specified in [subparagraphs (A) and (B)] 
                subparagraph (A) directly to the claimants or 
                may make such payments or credit such amounts 
                to an open insured depository institution to 
                induce such institution to accept liability for 
                such claims.

           *       *       *       *       *       *       *

  (m) New Banks.--
          (1)  * * *

           *       *       *       *       *       *       *

          (6) New deposits.--The new bank may, with the 
        approval of the Corporation, accept new deposits which 
        shall be subject to withdrawal on demand and which, 
        except where the new bank is the only bank in the 
        community, shall not exceed [$100,000] an amount equal 
        to the standard maximum deposit insurance amount from 
        any depositor.

           *       *       *       *       *       *       *

  (p) Certain Sales of Assets Prohibited.--
          (1)  * * *
          (2) Convicted debtors.--Except as provided in 
        paragraph (3), any person who--
                  (A)  * * *
                  (B) is in default on any loan or other 
                extension of credit from such insured 
                depository institution which, if not paid, will 
                cause substantial loss to the [institution, any 
                deposit insurance fund] institution, the 
                Deposit Insurance Fund, the Corporation, the 
                FSLIC Resolution Fund, or the Resolution Trust 
                Corporation,

           *       *       *       *       *       *       *


SEC. 11A. FSLIC RESOLUTION FUND.

  (a) Established.--
          (1)  * * *
          (2) Transfer of fslic assets and [liabilities.--
                  [(A) In general.--Except] liabilities.--
                Except as provided in section 21A of the 
                Federal Home Loan Bank Act, all assets and 
                liabilities of the Federal Savings and Loan 
                Insurance Corporation on the day before the 
                date of the enactment of the Financial 
                Institutions Reform, Recovery, and Enforcement 
                Act of 1989 shall be transferred to the FSLIC 
                Resolution Fund.
                  [(B) Additional claims on assets.--The FSLIC 
                Resolution Fund shall pay to the Savings 
                Association Insurance Fund such amounts as are 
                needed for administrative and supervisory 
                expenses from the date of enactment of the 
                Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989 through September 30, 
                1992.]
          (3) Separate holding.--Assets and liabilities 
        transferred to the FSLIC Resolution Fund shall be the 
        assets and liabilities of the Fund and not of the 
        Corporation and shall not be consolidated with the 
        assets and liabilities of [the Bank Insurance Fund, the 
        Savings Association Insurance Fund,] the Deposit 
        Insurance Fund or the Corporation for accounting, 
        reporting, or any other purpose.

           *       *       *       *       *       *       *

  (b) Source of Funds.--The FSLIC Resolution Fund shall be 
funded from the following sources to the extent funds are 
needed in the listed priority:
          (1)  * * *

           *       *       *       *       *       *       *

          [(4) During the period beginning on the date of the 
        enactment of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989 and ending on 
        December 31, 1992, amounts assessed against Savings 
        Association Insurance Fund members by the Corporation 
        pursuant to section 7 which are not required by the 
        Financing Corporation pursuant to section 21 of the 
        Federal Home Loan Bank Act or by the Resolution Funding 
        Corporation pursuant to section 21B of the Federal Home 
        Loan Bank Act.]

           *       *       *       *       *       *       *

  (f) Dissolution.--The FSLIC Resolution Fund shall be 
dissolved upon satisfaction of all debts and liabilities and 
sale of all assets. Upon dissolution any remaining funds shall 
be paid into the Treasury. Any administrative facilities and 
supplies, including offices and office supplies, shall be 
transferred to the Corporation for use by and to be held as 
assets of the [Savings Association Insurance Fund] Deposit 
Insurance Fund.

           *       *       *       *       *       *       *

  Sec. 12. (a)  * * *

           *       *       *       *       *       *       *

  (f) Conflict of Interest.--
          (1)  * * *

           *       *       *       *       *       *       *

          (4) Disapproval of contractors.--
                  (A)  * * *

           *       *       *       *       *       *       *

                  (E) Prohibition required in certain cases.--
                The standards established under subparagraph 
                (A) shall require the Corporation to prohibit 
                any person who has--
                          (i)  * * *

           *       *       *       *       *       *       *

                          (iv) caused a substantial loss to 
                        [Federal deposit insurance funds] the 
                        Deposit Insurance Fund (or any 
                        predecessor deposit insurance fund);
                from performing any service on behalf of the 
                Corporation.

           *       *       *       *       *       *       *

  Sec. 13. (a) Investment of Corporation's Funds.--
          (1) Authority.--Funds held in the [Bank Insurance 
        Fund, the Savings Association Insurance Fund,] Deposit 
        Insurance Fund or the FSLIC Resolution Fund, that are 
        not otherwise employed shall be invested in obligations 
        of the United States or in obligations guaranteed as to 
        principal and interest by the United States.

           *       *       *       *       *       *       *

  (c)(1)  * * *

           *       *       *       *       *       *       *

          (4) Least-cost resolution required.--
                  (A) In general.--Notwithstanding any other 
                provision of this Act, the Corporation may not 
                exercise any authority under this subsection or 
                subsection (d), (f), (h), (i), or (k) with 
                respect to any insured depository institution 
                unless--
                          (i)  * * *
                          (ii) the total amount of the 
                        expenditures by the Corporation and 
                        obligations incurred by the Corporation 
                        (including any immediate and long-term 
                        obligation of the Corporation and any 
                        direct or contingent liability for 
                        future payment by the Corporation) in 
                        connection with the exercise of any 
                        such authority with respect to such 
                        institution is the least costly to the 
                        [deposit insurance fund] Deposit 
                        Insurance Fund of all possible methods 
                        for meeting the Corporation's 
                        obligation under this section.
                  (B) Determining least costly approach.--In 
                determining how to satisfy the Corporation's 
                obligations to an institution's insured 
                depositors at the least possible cost to the 
                [deposit insurance fund] Deposit Insurance 
                Fund, the Corporation shall comply with the 
                following provisions:
                          (i)  * * *
                          (ii) Foregone tax revenues.--Federal 
                        tax revenues that the Government would 
                        forego as the result of a proposed 
                        transaction, to the extent reasonably 
                        ascertainable, shall be treated as if 
                        they were revenues foregone by the 
                        [deposit insurance fund] Deposit 
                        Insurance Fund.

           *       *       *       *       *       *       *

                  (E) Deposit insurance [funds] fund available 
                for intended purpose only.--
                          (i) In general.--After December 31, 
                        1994, or at such earlier time as the 
                        Corporation determines to be 
                        appropriate, the Corporation may not 
                        take any action, directly or 
                        indirectly, with respect to any insured 
                        depository institution that would have 
                        the effect of increasing losses to [any 
                        insurance fund] the Deposit Insurance 
                        Fund by protecting--
                                  (I)  * * *

           *       *       *       *       *       *       *

                  (G) Systemic risk.--
                          (i)  * * *
                          (ii) Repayment of loss.--The 
                        Corporation shall recover the loss to 
                        the [appropriate insurance fund] 
                        Deposit Insurance Fund arising from any 
                        action taken or assistance provided 
                        with respect to an insured depository 
                        institution under clause (i) 
                        expeditiously from 1 or more emergency 
                        special assessments on [the members of 
                        the insurance fund (of which such 
                        institution is a member)] insured 
                        depository institutions equal to the 
                        product of--
                                  (I) an assessment rate 
                                established by the Corporation; 
                                and
                                  (II) the amount of [each 
                                member's] each insured 
                                depository institution's 
                                average total assets during the 
                                [semiannual period] assessment 
                                period, minus the sum of the 
                                amount of the [member's] 
                                institution's average total 
                                tangible equity and the amount 
                                of the [member's] institution's 
                                average total subordinated 
                                debt.

           *       *       *       *       *       *       *

  [(11) Payments made under this subsection shall be made--
          [(A) from the Bank Insurance Fund in the case of 
        payments to or on behalf of a member of such Fund; or
          [(B) from the Savings Association Insurance Fund or 
        from funds made available by the Resolution Trust 
        Corporation in the case of payments to or on behalf of 
        any Savings Association Insurance Fund member.]

           *       *       *       *       *       *       *

  (h) The powers conferred on the Board of Directors and the 
Corporation by this section to take action to reopen an insured 
depository institution in default or to avert the default of an 
insured depository institution may be used with respect to an 
insured branch of a foreign bank if, in the judgment of the 
Board of Directors, the public interest in avoiding the closing 
of such branch substantially outweighs any additional risk of 
loss to the [Bank Insurance Fund] Deposit Insurance Fund which 
the exercise of such powers would entail.

           *       *       *       *       *       *       *

  (k) Emergency Acquisitions.--
          (1)  * * *

           *       *       *       *       *       *       *

          (4) Branching provisions.--
                  (A)  * * *
                  (B) Restrictions.--
                          (i) In general.--Notwithstanding 
                        subparagraph (A), if--
                                  (I) * * *

           *       *       *       *       *       *       *

                        such savings association shall be 
                        subject to the conditions upon which a 
                        bank may retain, operate, and establish 
                        branches in the State in which the 
                        [Savings Association Insurance Fund 
                        member] savings association is located.

           *       *       *       *       *       *       *

          (5) Assistance before appointment of conservator or 
        receiver.--
                  (A) Assistance proposals.--The Corporation 
                shall consider proposals by [Savings 
                Association Insurance Fund members] savings 
                associations for assistance pursuant to 
                subsection (c) before grounds exist for 
                appointment of a conservator or receiver for 
                such member under the following circumstances:
                          (i)  * * *

           *       *       *       *       *       *       *


SEC. 14. BORROWING AUTHORITY.

  (a) Borrowing From Treasury.--The Corporation is authorized 
to borrow from the Treasury, and the Secretary of the Treasury 
is authorized and directed to loan to the Corporation on such 
terms as may be fixed by the Corporation and the Secretary, 
such funds as in the judgment of the Board of Directors of the 
Corporation are from time to time required for insurance 
purposes, not exceeding in the aggregate $30,000,000,000 
outstanding at any one time, subject to the approval of the 
Secretary of the Treasury: Provided, That the rate of interest 
to be charged in connection with any loan made pursuant to this 
subsection shall not be less than an amount determined by the 
Secretary of the Treasury, taking into consideration current 
market yields on outstanding marketable obligations of the 
United States of comparable maturities. For such purpose the 
Secretary of the Treasury is authorized to use as a public-debt 
transaction the proceeds of the sale of any securities 
hereafter issued under the Second Liberty Bond Act, as amended, 
and the purposes for which securities may be issued under the 
Second Liberty Bond Act, as amended, are extended to include 
such loans. Any such loan shall be used by the Corporation 
solely in carrying out its functions with respect to such 
insurance. All loans and repayments under this subsection shall 
be treated as public-debt transactions of the United States. 
The Corporation may employ any funds obtained under this 
section for purposes of the [Bank Insurance Fund or the Savings 
Association Insurance Fund] Deposit Insurance Fund and the 
borrowing shall become a liability of [each such fund] the 
Deposit Insurance Fund to the extent funds are employed 
therefor. There are hereby appropriated to the Secretary, for 
fiscal year 1989 and each fiscal year thereafter, such sums as 
may be necessary to carry out this subsection.
  (b) Borrowing From Federal Financing Bank.--The Corporation 
is authorized to issue and sell the Corporation's obligations, 
on behalf of the [Bank Insurance Fund or Savings Association 
Insurance Fund] Deposit Insurance Fund, to the Federal 
Financing Bank established by the Federal Financing Bank Act of 
1973. The Federal Financing Bank is authorized to purchase and 
sell the Corporation's obligations on terms and conditions 
determined by the Federal Financing Bank. Any such borrowings 
shall be obligations subject to the obligation limitation of 
section 15(c) of this Act. This subsection does not affect the 
eligibility of any other entity to borrow from the Federal 
Financing Bank.
  (c) Repayment Schedules Required for any Borrowing.--
          (1)  * * *

           *       *       *       *       *       *       *

          [(3) Industry repayment.--
                  [(A) BIF member payments.--No agreement or 
                repayment schedule under paragraph (1) shall 
                require any payment by a Bank Insurance Fund 
                member for funds obtained under subsection (a) 
                for purposes of the Savings Association Fund.
                  [(B) SAIF member payments.--No agreement or 
                repayment schedule under paragraph (1) shall 
                require any payment by a Savings Association 
                Insurance Fund member for funds obtained under 
                subsection (a) for purposes of the Bank 
                Insurance Fund.]
  [(d) Borrowing for BIF From BIF Members.--]
  (d) Borrowing for the Deposit Insurance Fund From Insured 
Depository Institutions.--
          (1) Borrowing authority.--The Corporation may issue 
        obligations to [Bank Insurance Fund members] insured 
        depository institutions, and may borrow from [Bank 
        Insurance Fund members] insured depository institutions 
        and give security for any amount borrowed, and may pay 
        interest on (and any redemption premium with respect 
        to) any such obligation or amount to the extent--
                  (A) the proceeds of any such obligation or 
                amount are used by the Corporation solely for 
                purposes of carrying out the Corporation's 
                functions with respect to the [Bank Insurance 
                Fund] Deposit Insurance Fund; and
                  (B) the terms of the obligation or instrument 
                limit the liability of the Corporation or the 
                [Bank Insurance Fund] Deposit Insurance Fund 
                for the payment of interest and the repayment 
                of principal to the amount which is equal to 
                the amount of assessment income received by the 
                Fund from assessments under section 7.
          (2) Limitations on borrowing.--
                  (A) Applicability of public debt limit.--For 
                purposes of the public debt limit established 
                in section 3101(b) of title 31, United States 
                Code, any obligation issued, or amount 
                borrowed, by the Corporation under paragraph 
                (1) shall be considered to be an obligation to 
                which such limit applies.
                  (B) Applicability of fdic borrowing limit.--
                For purposes of the dollar amount limitation 
                established in section 14(a) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1824(a)), any 
                obligation issued, or amount borrowed, by the 
                Corporation under paragraph (1) shall be 
                considered to be an amount borrowed from the 
                Treasury under such section.
                  (C) Interest rate limit.--The rate of 
                interest payable in connection with any 
                obligation issued, or amount borrowed, by the 
                Corporation under paragraph (1) shall not 
                exceed an amount determined by the Secretary of 
                the Treasury, taking into consideration current 
                market yields on outstanding marketable 
                obligations of the United States of comparable 
                maturities.
                  (D) Obligations to be held only by bif 
                members.--The terms of any obligation issued by 
                the Corporation under paragraph (1) shall 
                provide that the obligation will be valid only 
                if held by a [Bank Insurance Fund member] 
                insured depository institution.
          (3) Liability of [bif] the deposit insurance fund.--
        Any obligation issued or amount borrowed under 
        paragraph (1) shall be a liability of the [Bank 
        Insurance Fund] Deposit Insurance Fund.
          (4) Terms and conditions.--Subject to paragraphs (1) 
        and (2), the Corporation shall establish the terms and 
        conditions for obligations issued or amounts borrowed 
        under paragraph (1), including interest rates and terms 
        to maturity.
          (5) Investment by [bif members] insured depository 
        institutions.--
                  (A) Authority to invest.--Subject to 
                subparagraph (B) and notwithstanding any other 
                provision of Federal law or the law of any 
                State, any [Bank Insurance Fund member] insured 
                depository institution may purchase and hold 
                for investment any obligation issued by the 
                Corporation under paragraph (1) without 
                limitation, other than any limitation the 
                appropriate Federal banking agency may impose 
                specifically with respect to such obligations.
                  (B) Investment only from capital and retained 
                earnings.--Any [Bank Insurance Fund member] 
                insured depository institution may purchase 
                obligations or make loans to the Corporation 
                under paragraph (1) only to the extent the 
                purchase money or the money loaned is derived 
                from the member's capital or retained earnings.
          (6) Accounting treatment.--In accounting for any 
        investment in an obligation purchased from, or any loan 
        made to, the Corporation for purposes of determining 
        compliance with any capital standard and preparing any 
        report required pursuant to section 7(a), the amount of 
        such investment or loan shall be treated as an asset.
  (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).
  Sec. 15. (a)  * * *

           *       *       *       *       *       *       *

  (c) Limitation on Borrowing.--
          (1)  * * *

           *       *       *       *       *       *       *

          (5) Maximum amount limitation on outstanding 
        obligations.--Notwithstanding any other provisions of 
        this Act, the Corporation may not issue or incur any 
        obligation, if, after issuing or incurring the 
        obligation, the aggregate amount of obligations of [the 
        Bank Insurance Fund or Savings Association Insurance 
        Fund, respectively] the Deposit Insurance Fund, 
        outstanding would exceed the sum of--
                  (A) the amount of cash or the equivalent of 
                cash held by [the Bank Insurance Fund or 
                Savings Association Insurance Fund, 
                respectively] the Deposit Insurance Fund;
                  (B) the amount which is equal to 90 percent 
                of the Corporation's estimate of the fair 
                market value of assets held by [the Bank 
                Insurance Fund or the Savings Association 
                Insurance Fund, respectively] the Deposit 
                Insurance Fund, other than assets described in 
                subparagraph (A); and
                  (C) the total of the amounts authorized to be 
                borrowed from the Secretary of the Treasury 
                pursuant to section 14(a).

           *       *       *       *       *       *       *

  Sec. 17. (a) Annual Reports on [BIF, SAIF,] the Deposit 
Insurance Fund and the FSLIC Resolution Fund.--
          (1) In general.--The Corporation shall annually 
        submit a full report of its operations, activities, 
        budget, receipts, and expenditures for the preceding 
        12-month period. The report shall include, with respect 
        to [the Bank Insurance Fund, the Savings Association 
        Insurance Fund,] the Deposit Insurance Fund and the 
        FSLIC Resolution Fund, an analysis by the Corporation 
        of--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) the exposure of [each insurance fund] the 
                Deposit Insurance Fund to changes in those 
                economic factors most likely to affect the 
                condition of that fund;
                  (E) a current estimate of the resources 
                needed for [the Bank Insurance Fund, the 
                Savings Association Insurance Fund,] the 
                Deposit Insurance Fund or the FSLIC Resolution 
                Fund to achieve the purposes of this Act; and
                  (F) any findings, conclusions, and 
                recommendations for legislative and 
                administrative actions considered appropriate 
                to future resolution activities by the 
                Corporation.

           *       *       *       *       *       *       *

  (d) Audit.--
          (1) Audit required.--The Comptroller General shall 
        audit annually the financial transactions of the 
        Corporation, [the Bank Insurance Fund, the Savings 
        Association Insurance Fund,] the Deposit Insurance Fund 
        and the FSLIC Resolution Fund in accordance with 
        generally accepted government auditing standards.
          (2) Access to books and records.--All books, records, 
        accounts, reports, files, and property belonging to or 
        used by the Corporation, [the Bank Insurance Fund, the 
        Savings Association Insurance Fund,] the Deposit 
        Insurance Fund and the FSLIC Resolution Fund, or by an 
        independent certified public accountant retained to 
        audit the Fund's financial statements, shall be made 
        available to the Comptroller General.

           *       *       *       *       *       *       *

  Sec. 18. [(a) Insurance Logo.--
          [(1) Insured savings associations.--Each insured 
        savings association shall display at each place of 
        business maintained by such association a sign 
        containing only the following items:
                  [(A) A statement that insured deposits are 
                backed by the full faith and credit of the 
                United States Government.
                  [(B) A statement that deposits are federally 
                insured to $100,000.
                  [(C) The symbol of an eagle.
        The sign shall not contain any reference to a 
        Government agency and shall accord each item 
        substantially equal prominence.
          [(2) Insured banks.--Not later than 30 days after the 
        date of enactment of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989, each insured 
        bank shall display at each place of business maintained 
        by such bank one of the following:
                  [(A) The sign required to be displayed by 
                insured banks under regulations prescribed by 
                the Corporation in effect on January 1, 1989.
                  [(B) The sign prescribed under paragraph (1).
          [(3) Regulations.--The Corporation shall prescribe 
        regulations to carry out the purposes of this 
        subsection, including regulations governing the manner 
        of display or use of such signs, except that the size 
        of the sign prescribed under paragraph (1) shall be 
        similar to that prescribed under paragraph (2)(A). 
        Initial regulations under this subsection shall be 
        prescribed on the date of enactment of the Financial 
        Institutions Recovery, Reform, and Enforcement Act of 
        1989. For each day an insured depository institution 
        continues to violate any provisions of this subsection 
        or any lawful provisions of said regulations, it shall 
        be subject to a penalty of not more than $100, which 
        the Corporation may recover for its use.]
  (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.

           *       *       *       *       *       *       *

  [(h) Any insured depository institution which willfully fails 
or refuses to file any certified statement or pay any 
assessment required under this Act shall be subject to a 
penalty of not more than $100 for each day that such violations 
continue, which penalty the Corporation may recover for its 
use: Provided, That this subsection shall not be applicable 
under the circumstances stated in the proviso of subsection (b) 
of this section.]
  (h) Penalty for Failure to Timely Pay Assessments.--
          (1) In general.--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) 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.

           *       *       *       *       *       *       *

  (m) Activities of Savings Associations and Their 
Subsidiaries.--
          (1)  * * *

           *       *       *       *       *       *       *

          (3) Activities incompatible with deposit insurance.--
                  (A) In general.--The Corporation may 
                determine by regulation or order that any 
                specific activity poses a serious threat to the 
                [Savings Association Insurance Fund] Deposit 
                Insurance Fund. Prior to adopting any such 
                regulation, the Corporation shall consult with 
                the Director of the Office of Thrift 
                Supervision and shall provide appropriate State 
                supervisors the opportunity to comment thereon, 
                and the Corporation shall specifically take 
                such comments into consideration. Any such 
                regulation shall be issued in accordance with 
                section 553 of title 5, United States Code. If 
                the Board of Directors makes such a 
                determination with respect to an activity, the 
                Corporation shall have authority to order that 
                no [Savings Association Insurance Fund member] 
                savings association may engage in the activity 
                directly.

           *       *       *       *       *       *       *

                  (C) Additional authority of fdic to prevent 
                serious risks to insurance fund.--
                Notwithstanding subparagraph (A), the 
                Corporation may prescribe and enforce such 
                regulations and issue such orders as the 
                Corporation determines to be necessary to 
                prevent actions or practices of savings 
                associations that pose a serious threat to the 
                [Savings Association Insurance Fund or the Bank 
                Insurance Fund] Deposit Insurance Fund.

           *       *       *       *       *       *       *

  (o) Real Estate Lending.--
          (1)  * * *
          (2) Standards.--
                  (A) Criteria.--In prescribing standards under 
                paragraph (1), the agencies shall consider--
                          (i) the risk posed to the [deposit 
                        insurance funds] Deposit Insurance Fund 
                        by such extensions of credit;

           *       *       *       *       *       *       *

                  (B) Variations permitted.--In prescribing 
                standards under paragraph (1), the appropriate 
                Federal banking agencies may differentiate 
                among types of loans--
                          (i) as may be required by Federal 
                        statute;
                          (ii) as may be warranted, based on 
                        the risk to the [deposit insurance 
                        fund] Deposit Insurance Fund; or

           *       *       *       *       *       *       *

  (p) Periodic Review of Capital Standards.--Each appropriate 
Federal banking agency shall, in consultation with the other 
Federal banking agencies, biennially review its capital 
standards for insured depository institutions to determine 
whether those standards require sufficient capital to 
facilitate prompt corrective action to prevent or minimize loss 
to the [deposit insurance funds] Deposit Insurance Fund, 
consistent with section 38.

           *       *       *       *       *       *       *


SEC. 24. ACTIVITIES OF INSURED STATE BANKS.

  (a) Permissible activities.--
          (1) In general.--After the end of the 1-year period 
        beginning on the date of the enactment of the Federal 
        Deposit Insurance Corporation Improvement Act of 1991, 
        an insured State bank may not engage as principal in 
        any type of activity that is not permissible for a 
        national bank unless--
                  (A) the Corporation has determined that the 
                activity would pose no significant risk to the 
                [appropriate deposit insurance fund] Deposit 
                Insurance Fund; and
                  (B) the State bank is, and continues to be, 
                in compliance with applicable capital standards 
                prescribed by the appropriate Federal banking 
                agency.

           *       *       *       *       *       *       *

  (d) Subsidiaries of Insured State Banks.--
          (1) In general.--After the end of the 1-year period 
        beginning on the date of the enactment of the Federal 
        Deposit Insurance Corporation Improvement Act of 1991, 
        a subsidiary of an insured State bank may not engage as 
        principal in any type of activity that is not 
        permissible for a subsidiary of a national bank 
        unless--
                  (A) the Corporation has determined that the 
                activity poses no significant risk to the 
                [appropriate deposit insurance fund] Deposit 
                Insurance Fund; and

           *       *       *       *       *       *       *

  (e) Savings Bank Life Insurance.--
          (1)  * * *
          (2) FDIC finding and action regarding risk.--
                  (A) Finding.--Before the end of the 1-year 
                period beginning on the date of the enactment 
                of the Federal Deposit Insurance Corporation 
                Improvement Act of 1991, the Corporation shall 
                make a finding whether savings bank life 
                insurance activities of insured banks pose or 
                may pose any significant [risk to the insurance 
                fund of which such banks are members.] risk to 
                the Deposit Insurance Fund.
                  (B) Actions.--
                          (i)  * * *
                          (ii) Authorized actions.--Actions the 
                        Corporation may take under this 
                        subparagraph include requiring the 
                        modification, suspension, or 
                        termination of insurance activities 
                        conducted by any insured bank if the 
                        Corporation finds that the activities 
                        pose a significant risk to any insured 
                        bank described in paragraph (1)(A) or 
                        to [the insurance fund of which such 
                        bank is a member] the Deposit Insurance 
                        Fund.
  (f) Common and Preferred Stock Investment.--
          (1)  * * *

           *       *       *       *       *       *       *

          (6) Notice and approval.--An insured State bank may 
        only engage in any investment pursuant to paragraph (2) 
        if--
                  (A) the bank has filed a 1-time notice of the 
                bank's intention to acquire and retain 
                investments described in paragraph (1); and
                  (B) the Corporation has determined, within 60 
                days of receiving such notice, that acquiring 
                or retaining such investments does not pose a 
                significant risk to [the insurance fund of 
                which such bank is a member] the Deposit 
                Insurance Fund.

           *       *       *       *       *       *       *


SEC. 28. ACTIVITIES OF SAVINGS ASSOCIATIONS.

  (a) In General.--On and after January 1, 1990, a savings 
association chartered under State law may not engage as 
principal in any type of activity, or in any activity in an 
amount, that is not permissible for a Federal savings 
association unless--
          (1) the Corporation has determined that the activity 
        would pose no significant risk to the [affected deposit 
        insurance fund] Deposit Insurance Fund; and

           *       *       *       *       *       *       *

  (b) Differences of Magnitude Between State and Federal 
Powers.--Notwithstanding subsection (a)(1), if an activity 
(other than an activity described in section 5(c)(2)(B) of the 
Home Owners' Loan Act) is permissible for a Federal savings 
association, a savings association chartered under State law 
may engage as principal in that activity in an amount greater 
than the amount permissible for a Federal savings association 
if--
          (1) the Corporation has not determined that engaging 
        in that amount of the activity poses any significant 
        risk to the [affected deposit insurance fund] Deposit 
        Insurance Fund; and

           *       *       *       *       *       *       *

  (c) Equity Investments by State Savings Associations.--
          (1)  * * *
          (2) Exception for service corporations.--Paragraph 
        (1) does not prohibit a savings association from 
        acquiring or retaining shares of one or more service 
        corporations if--
                  (A) the Corporation has determined that no 
                significant risk to the [affected deposit 
                insurance fund] Deposit Insurance Fund is posed 
                by--
                          (i)  * * *

           *       *       *       *       *       *       *


[SEC. 31. SAVINGS ASSOCIATION INSURANCE FUND INDUSTRY ADVISORY 
                    COMMITTEE.

  [(a) Establishment.--There is hereby established the Savings 
Association Insurance Fund Industry Advisory Committee 
(hereinafter referred to in this section as the ``Committee'').
  [(b) Membership.--The Committee shall consist of 18 members, 
appointed as follows:
          [(1) 1 member elected from each Federal home loan 
        bank district (by the members of the board of directors 
        of each such bank who were elected by the members of 
        such bank) from among individuals residing therein who 
        are officers of insured depository institutions that 
        are Savings Association Insurance Fund members.
          [(2) 6 members appointed by the Corporation from 
        among individuals who shall represent the public 
        interest.
  [(c) Vacancies.--Any vacancy on the Committee shall be filled 
in the same manner in which the original appointment was made.
  [(d) Pay and Expenses.--Members of the Committee shall serve 
without pay, but each member shall be reimbursed, in such 
manner as the Corporation shall prescribe by regulation, for 
expenses incurred in connection with attendance of such members 
at meetings of the Committee.
  [(e) Terms.--Members shall be appointed or elected for terms 
of 1 year.
  [(f) Authority of the Committee.--The Committee may select 
its Chairperson, Vice Chairperson, and Secretary, and adopt 
methods of procedure, and shall have power--
          [(1) to confer with the Board of Directors on general 
        and special business conditions and regulatory and 
        other matters affecting insured financial institutions 
        that are members of the Savings Association Insurance 
        Fund; and
          [(2) to request information, and to make 
        recommendations, with respect to matters within the 
        jurisdiction of the Corporation.
  [(g) Meetings.--The Committee shall meet 4 times each year, 
and more frequently if requested by the Corporation.
  [(h) Reports.--The Committee shall submit a semiannual 
written report to the Committee on Banking, Finance and Urban 
Affairs of the House and to the Committee on Banking, Housing, 
and Urban Affairs of the Senate. Such report shall describe the 
activities of the Committee for such semiannual period and 
contain such recommendations as the Committee considers 
appropriate.
  [(i) Provision of Staff and Other Resources.--The Corporation 
shall provide the Committee with the use of such resources, 
including staff, as the Committee reasonably shall require to 
carry out its duties, including the preparation and submission 
of reports to Congress, under this section.
  [(j) Federal Advisory Committee Act Does Not Apply.--The 
Federal Advisory Committee Act shall not apply to the 
Committee.
  [(k) Sunset.--The Committee shall cease to exist 10 years 
after the enactment of this section.]

           *       *       *       *       *       *       *


SEC. 36. EARLY IDENTIFICATION OF NEEDED IMPROVEMENTS IN FINANCIAL 
                    MANAGEMENT.

  (a)  * * *

           *       *       *       *       *       *       *

  (i) Requirements for Insured Subsidiaries of Holding 
Companies.--
          (1)  * * *

           *       *       *       *       *       *       *

          (3) Applicability based on risk to fund.--The 
        appropriate Federal banking agency may require an 
        institution with total assets in excess of 
        $9,000,000,000 to comply with this section, 
        notwithstanding the exemption provided by this 
        subsection, if it determines that such exemption would 
        create a significant risk to the [affected deposit 
        insurance fund] Deposit Insurance Fund if applied to 
        that institution.

           *       *       *       *       *       *       *


SEC. 37. ACCOUNTING OBJECTIVES, STANDARDS, AND REQUIREMENTS.

  (a) In General.--
          (1) Objectives.--Accounting principles applicable to 
        reports or statements required to be filed with Federal 
        banking agencies by insured depository institutions 
        should--
                  (A)  * * *

           *       *       *       *       *       *       *

                  (C) facilitate prompt corrective action to 
                resolve the institutions at the least cost to 
                the [insurance funds] Deposit Insurance Fund.

           *       *       *       *       *       *       *


SEC. 38. PROMPT CORRECTIVE ACTION.

  (a) Resolving Problems To Protect Deposit Insurance [Funds] 
Fund.--
          (1) Purpose.--The purpose of this section is to 
        resolve the problems of insured depository institutions 
        at the least possible long-term loss to [the deposit 
        insurance fund] the Deposit Insurance Fund.

           *       *       *       *       *       *       *

  (k) Review Required When Deposit Insurance Fund Incurs 
Material Loss.--
          (1) In general.--If [a deposit insurance fund] the 
        Deposit Insurance Fund incurs a material loss with 
        respect to an insured depository institution on or 
        after July 1, 1993, the inspector general of the 
        appropriate Federal banking agency shall--
                  (A) make a written report to that agency 
                reviewing the agency's supervision of the 
                institution (including the agency's 
                implementation of this section), which shall--
                          (i) ascertain why the institution's 
                        problems resulted in a material loss to 
                        [the deposit insurance fund] the 
                        Deposit Insurance Fund; and
                          (ii) make recommendations for 
                        preventing any such loss in the future; 
                        and

           *       *       *       *       *       *       *

          (2) Material loss incurred.--For purposes of this 
        subsection:
                  (A) Loss incurred.--[A deposit insurance 
                fund] The Deposit Insurance Fund incurs a loss 
                with respect to an insured depository 
                institution--
                          (i) if the Corporation provides any 
                        assistance under section 13(c) with 
                        respect to that institution; and--
                                  (I)  * * *

           *       *       *       *       *       *       *

                          (ii) if the Corporation is appointed 
                        receiver of the institution, and it is 
                        or becomes apparent that the present 
                        value of [the deposit insurance fund's 
                        outlays] the outlays of the Deposit 
                        Insurance Fund with respect to that 
                        institution will exceed the present 
                        value of receivership dividends or 
                        other payments on the claims held by 
                        the Corporation.

           *       *       *       *       *       *       *

          (3) Deadline for report.--The inspector general of 
        the appropriate Federal banking agency shall comply 
        with paragraph (1) expeditiously, and in any event 
        (except with respect to paragraph (1)(B)(iv)) as 
        follows:
                  (A)  * * *
                  (B) If the institution is described in 
                paragraph (2)(A)(ii), during the 6-month period 
                beginning on the date on which it becomes 
                apparent that the present value of [the deposit 
                insurance fund's outlays] the outlays of the 
                Deposit Insurance Fund with respect to that 
                institution will exceed the present value of 
                receivership dividends or other payments on the 
                claims held by the Corporation.

           *       *       *       *       *       *       *

  (o) Transition Rules for Savings [Associations.--
          [(1) RTC's role does not diminish care required of 
        ots.-- 
                  [(A) In general.--In implementing this 
                section, the appropriate Federal banking agency 
                (and, to the extent applicable, the 
                Corporation) shall exercise the same care as if 
                the Savings Association Insurance Fund (rather 
                than the Resolution Trust Corporation) bore the 
                cost of resolving the problems of insured 
                savings associations described in clauses (i) 
                and (ii)(II) of section 21A(b)(3)(A) of the 
                Federal Home Loan Bank Act.
                  [(B) Reports.--Subparagraph (A) does not 
                require reports under subsection (k).
          [(2) Additional flexibility for certain savings 
        associations.--Subsections (e)(2)] Associations.--
        Subsections (e)(2), (f), and (h) shall not apply before 
        July 1, 1994, to any insured savings association if--
          [(A)] (1) before the date of enactment of the Federal 
        Deposit Insurance Corporation Improvement Act of 1991--
                  [(i)] (A) the savings association had 
                submitted a plan meeting the requirements of 
                section 5(t)(6)(A)(ii) of the Home Owners' Loan 
                Act; and
                  [(ii)] (B) the Director of the Office of 
                Thrift Supervision had accepted the plan;
          [(B)] (2) the plan remains in effect; and
          [(C)] (3) the savings association remains in 
        compliance with the plan or is operating under a 
        written agreement with the appropriate Federal banking 
        agency.

           *       *       *       *       *       *       *


SEC. 43. DEPOSITORY INSTITUTIONS LACKING FEDERAL DEPOSIT INSURANCE.

  (a)  * * *

           *       *       *       *       *       *       *

  (d) Exceptions for Institutions Not Receiving Retail 
Deposits.--The Federal Trade Commission may, by regulation or 
order, make exceptions to subsection (b) for any depository 
institution that, within the United States, does not receive 
initial deposits of less than [$100,000] an amount equal to the 
standard maximum deposit insurance amount from individuals who 
are citizens or residents of the United States, other than 
money received in connection with any draft or similar 
instrument issued to transmit money.

           *       *       *       *       *       *       *


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.
                              ----------                              


           SECTION 6 OF THE INTERNATIONAL BANKING ACT OF 1978

                         INSURANCE OF DEPOSITS

  Sec. 6. (a)  * * *
  (b) No foreign bank may establish or operate a Federal branch 
which receives deposits of less than [$100,000] an amount equal 
to the standard maximum deposit insurance amount unless the 
branch is an insured branch as defined in section 3(s) of the 
Federal Deposit Insurance Act, or unless the Comptroller 
determines by order or regulation that the branch is not 
engaged in domestic retail deposit activities requiring deposit 
insurance protection, taking account of the size and nature of 
depositors and deposit accounts.
  (c)(1) After the date of enactment of this Act no foreign 
bank may establish a branch, and after one year following such 
date no foreign bank may operate a branch, in any State in 
which the deposits of a bank organized and existing under the 
laws of that State would be required to be insured, unless the 
branch is an insured branch as defined in section 3(s) of the 
Federal Deposit Insurance Act, or unless the branch will not 
thereafter accept deposits of less than [$100,000] an amount 
equal to the standard maximum deposit insurance amount or 
unless the Federal Deposit Insurance Corporation determines by 
order or regulation that the branch is not engaged in domestic 
retail deposit activities requiring deposit insurance 
protection, taking account of the size and nature of depositors 
and deposit accounts.

           *       *       *       *       *       *       *

  (d) Retail Deposit-Taking by Foreign Banks.--
          (1) in general.--After the date of enactment of this 
        subsection, notwithstanding any other provision of this 
        Act or any provision of the Federal Deposit Insurance 
        Act, in order to accept or maintain domestic retail 
        deposit accounts having balances of less than 
        [$100,000] an amount equal to the standard maximum 
        deposit insurance amount, and requiring deposit 
        insurance protection, a foreign bank shall--
                  (A)  * * *

           *       *       *       *       *       *       *

          (2) Exception.--Domestic retail deposit accounts with 
        balances of less than [$100,000] an amount equal to the 
        standard maximum deposit insurance amount that require 
        deposit insurance protection may be accepted or 
        maintained in a branch of a foreign bank only if such 
        branch was an insured branch on the date of the 
        enactment of this 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.
                              ----------                              


              SECTION 207 OF THE FEDERAL CREDIT UNION ACT

                          payment of insurance

  Sec. 207. (a)  * * *

           *       *       *       *       *       *       *

  [(k)(1) Subject to the provisions of paragraph (2), for the 
purposes of this subsection, the term ``insured account'' means 
the total amount of the account in the member's name (after 
deducting offsets) less any part thereof which is in excess of 
$100,000. Such amount shall be determined according to such 
regulations as the Board may prescribe, and, in determining the 
amount due to any member, there shall be added together all 
accounts in the credit union maintained by him for his own 
benefit either in his own name or in the names of others. The 
Board may define, with such classifications and exceptions as 
it may prescribe, the extent of the insurance coverage provided 
for member accounts, including member accounts in the name of a 
minor, in trust, or in joint tenancy.]
  (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.
  [(2)(A) Notwithstanding any limitation in this Act or in any 
other provision of law relating to the amount of insurance 
available for the account of any one depositor or member, in 
the case of a depositor or member who is--]
          (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).
                  (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--
                          (i) an officer, employee, or agent of 
                        the United States having official 
                        custody of public funds and lawfully 
                        investing the same in a credit union 
                        insured in accordance with this title;
                          (ii) an officer, employee, or agent 
                        of any State of the United States, or 
                        of any county, municipality, or 
                        political subdivision thereof having 
                        official custody of public funds and 
                        lawfully investing the same in a credit 
                        union insured in accordance with this 
                        title in such State;
                          (iii) an officer, employee, or agent 
                        of the District of Columbia having 
                        official custody of public funds and 
                        lawfully investing the same in a credit 
                        union insured in accordance with this 
                        title in the District of Columbia;
                          (iv) an officer, employee, or agent 
                        of the Commonwealth of Puerto Rico, of 
                        the Panama Canal Zone, or of any 
                        territory or possession of the United 
                        States, or of any county, municipality, 
                        or political subdivision thereof having 
                        official custody of public funds and 
                        lawfully investing the same in a credit 
                        union insured in accordance with this 
                        title in the Commonwealth of Puerto 
                        Rico, the Panama Canal Zone, or any 
                        such territory or possession, 
                        respectively; or
                          (v) an officer, employee, or agent of 
                        any Indian tribe (as defined in section 
                        3(c) of the Indian Financing Act of 
                        1974) or agency thereof having official 
                        custody of tribal funds and lawfully 
                        investing the same in a credit union 
                        insured in accordance with this 
                        title[;].
[his account shall be insured in an amount not to exceed 
$100,000 per account.]
  [(B) The]
                  (F) Authority to limit deposits.--The Board 
                may limit the aggregate amount of funds that 
                may be invested or deposited in any credit 
                union insured in accordance with this title by 
                any [depositor or member referred to in 
                subparagraph (A)] municipal depositor or member 
                on the basis of the size of any such credit 
                union in terms of its assets.
  (3) Notwithstanding any limitation in this title or in any 
other provision of law relating to the amount of insurance 
available for the account of any one depositor or member, funds 
invested in a credit union insured in accordance with this 
title pursuant to a pension or profit-sharing plan described in 
section 401(d) of the Internal Revenue Code of 1954, as 
amended, and funds invested in such an insured credit union in 
the form of individual retirement accounts as described in 
section 408(a) of the Internal Revenue Code of 1954, as 
amended, shall be insured in the amount of [$100,000] 2 times 
the standard maximum share insurance amount (as determined 
under paragraph (1)) per account. As to any plan qualifying 
under section 401(d) or section 408(a) of the Internal Revenue 
Code of 1954, the term ``per account'' means the present vested 
and ascertainable interest of each beneficiary under the plan, 
excluding any remainder interest created by, or as a result of, 
the plan.
          (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 2003, $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.

           *       *       *       *       *       *       *

                              ----------                              


 SECTION 232 OF THE FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT 
                              ACT OF 1991

SEC. 232. REDUCED ASSESSMENT RATE FOR DEPOSITS ATTRIBUTABLE TO LIFELINE 
                    ACCOUNTS.

  (a) Qualification of Lifeline Accounts by Federal Reserve 
Board.--
          (1) In general.--The [Board of Governors of the 
        Federal Reserve System, and the] Federal Deposit 
        Insurance Corporation shall establish minimum 
        requirements for accounts providing basic transaction 
        services for consumers at insured depository 
        institutions in order for such accounts to qualify as 
        lifeline accounts for purposes of this section and 
        section 7(b)(2)(G) of the Federal Deposit Insurance 
        Act.
          (2) Factors to be considered.--In determining the 
        minimum requirements under paragraph (1) for lifeline 
        accounts at insured depository institutions, [the Board 
        and] the Corporation shall consider the following 
        factors:
                  (A)  * * *

           *       *       *       *       *       *       *

                  (J) Such other factors as [the Board] the 
                Corporation may determine to be appropriate.
          (3) Definitions.--For purposes of this subsection--
                  [(A) Board.--The term ``Board'' means the 
                Board of Governors of the Federal Reserve 
                System.]
                  (A) Corporation.--The term ``Corporation'' 
                means the Federal Deposit Insurance 
                Corporation.

           *       *       *       *       *       *       *

                  (C) Lifeline account.--The term ``lifeline 
                account'' means any transaction account (as 
                defined in section 19(b)(1)(C) of the Federal 
                Reserve Act) which meets the minimum 
                requirements established by the [Board] 
                Corporation under this subsection.

           *       *       *       *       *       *       *

  [(c) Availability of Funds.--The provisions of this section 
shall not take effect until appropriations are specifically 
provided in advance. There are hereby authorized to be 
appropriated such sums as may be necessary to carry out the 
provisions of this section.]
                              ----------                              


       SECTION 5136 OF THE REVISED STATUTES OF THE UNITED STATES

  Sec. 5136. Upon duly making and filing articles of 
association and an organization certificate, the association 
shall become, as from the date of the execution of its 
organization certificate, a body corporate, and as such, and in 
the name designated in the organization certificate, it shall 
have power--
  First. To adopt and use a corporate seal.

           *       *       *       *       *       *       *

          Eleventh. To make investments designed primarily to 
        promote the public welfare, including the welfare of 
        low- and moderate-income communities or families (such 
        as by providing housing, services, or jobs). A national 
        banking association may make such investments directly 
        or by purchasing interests in an entity primarily 
        engaged in making such investments. An association 
        shall not make any such investment if the investment 
        would expose the association to unlimited liability. 
        The Comptroller of the Currency shall limit an 
        association's investments in any 1 project and an 
        association's aggregate investments under this 
        paragraph. An association's aggregate investments under 
        this paragraph shall not exceed an amount equal to the 
        sum of 5 percent of the association's capital stock 
        actually paid in and unimpaired and 5 percent of the 
        association's unimpaired surplus fund, unless the 
        Comptroller determines by order that the higher amount 
        will pose no significant risk to the [affected deposit 
        insurance fund] Deposit Insurance Fund, and the 
        association is adequately capitalized. In no case shall 
        an association's aggregate investments under this 
        paragraph exceed an amount equal to the sum of 10 
        percent of the association's capital stock actually 
        paid in and unimpaired and 10 percent of the 
        association's unimpaired surplus fund.

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL RESERVE ACT

           *       *       *       *       *       *       *


                        state banks as members.

  Sec. 9. Any bank incorporated by special law of any State, or 
organized under the general laws of any State or of the United 
States, including Morris Plan banks and other incorporated 
banking institutions engaged in similar business, desiring to 
become a member of the Federal Reserve System, may make 
application to the Board of Governors of the Federal Reserve 
System, under such rules and regulations as it may prescribe, 
for the right to subscribe to the stock of the Federal reserve 
bank organized within the district in which the applying bank 
is located. Such application shall be for the same amount of 
stock that the applying bank would be required to subscribe to 
as a national bank. For the purposes of membership of any such 
bank the terms ``capital'' and ``capital stock'' shall include 
the amount of outstanding capital notes and debentures legally 
issued by the applying bank and purchased by the Reconstruction 
Finance Corporation. The Board of Governors of the Federal 
Reserve System, subject to the provisions of this Act and to 
such conditions as it may prescribe pursuant thereto may permit 
the applying bank to become a stockholder of such Federal 
reserve bank.

           *       *       *       *       *       *       *

          State member banks may make investments designed 
        primarily to promote the public welfare, including the 
        welfare of low- and moderate-income communities or 
        families (such as by providing housing, services, or 
        jobs), to the extent permissible under State law, and 
        subject to such restrictions and requirements as the 
        Board of Governors of the Federal Reserve System may 
        prescribe by regulation or order. A bank shall not make 
        any such investment if the investment would expose the 
        bank to unlimited liability. The Board shall limit a 
        bank's investments in any 1 project and bank's 
        aggregate investments under this paragraph. A bank's 
        aggregate investments under this paragraph shall not 
        exceed an amount equal to the sum of 5 percent of the 
        bank's capital stock actually paid in and unimpaired 
        and 5 percent of the bank's unimpaired surplus fund, 
        unless the Board determines by order that the higher 
        amount will pose no significant risk to the [affected 
        deposit insurance fund] Deposit Insurance Fund, and the 
        bank is adequately capitalized. In no case shall a 
        bank's aggregate investments under this paragraph 
        exceed an amount equal to the sum of 10 percent of the 
        bank's capital stock actually paid in and unimpaired 
        and 10 percent of the bank's unimpaired surplus fund.

           *       *       *       *       *       *       *

  Sec. 10B. (a)  * * *
  (b) Limitations on Advances.--
          (1)  * * *

           *       *       *       *       *       *       *

          (3) Advances to critically undercapitalized 
        depository institutions.--
                  (A) Liability for increased loss.--
                Notwithstanding any other provision of this 
                section, if--
                          (i)  * * *
                          (ii) after the end of that 5-day 
                        period, [any deposit insurance fund in] 
                        the Deposit Insurance Fund of the 
                        Federal Deposit Insurance Corporation 
                        incurs a loss exceeding the loss that 
                        the Corporation would have incurred if 
                        it had liquidated that institution as 
                        of the end of that period,

           *       *       *       *       *       *       *

                              ----------                              


SECTION 255 OF THE BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 
                                  1985

SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

  (a)  * * *

           *       *       *       *       *       *       *

  (g) Other Programs and Activities.--
          (1)(A) The following budget accounts and activities 
        shall be exempt from reduction under any order issued 
        under this part:
                  Activities resulting from private donations, 
                bequests, or voluntary contributions to the 
                Government;
                  Activities financed by voluntary payments to 
                the Government for goods or services to be 
                provided for such payments;

           *       *       *       *       *       *       *

                  Federal Deposit Insurance Corporation, [Bank 
                Insurance Fund] Deposit Insurance Fund (51-
                4064-0-3-373);

           *       *       *       *       *       *       *

                  [Federal Deposit Insurance Corporation, 
                Savings Association Insurance Fund (51-4066-0-
                3-373);]

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL HOME LOAN BANK ACT

           *       *       *       *       *       *       *


                   GENERAL POWERS AND DUTIES OF BANKS

  Sec. 11. (a)  * * *

           *       *       *       *       *       *       *

(k) Bank Loans to [SAIF] the Deposit Insurance Fund.--
          (1) Loans authorized.--Subject to paragraph (3), the 
        Federal Home Loan Banks may, upon the request of the 
        Federal Deposit Insurance Corporation, make loans to 
        such Corporation for the use of the [Savings 
        Association Insurance Fund] Deposit Insurance Fund.
          (2) Liability of the fund.--Any loan by a Federal 
        Home Loan Bank pursuant to paragraph (1) shall be a 
        direct liability of the [Savings Association Insurance 
        Fund] Deposit Insurance Fund.
          * * * * * * *

SEC. 21. FINANCING CORPORATION.

  (a)  * * *
          * * * * * * *
  (f) Sources of Funds for Interest Payments; Financing 
Corporation Assessment Authority.--The Financing Corporation 
shall obtain funds for anticipated interest payments, issuance 
costs, and custodial fees on obligations issued hereunder from 
the following sources:
          (1)  * * *
          (2) New assessment authority.--In addition to the 
        amounts obtained pursuant to paragraph (1), the 
        Financing Corporation, with the approval of the Board 
        of Directors of the Federal Deposit Insurance 
        Corporation, shall assess against each insured 
        depository institution an assessment (in the same 
        manner as assessments are assessed against such 
        institutions by the Federal Deposit Insurance 
        Corporation under section 7 of the Federal Deposit 
        Insurance Act)[, except that--
                  [(A) the assessments imposed on insured 
                depository institutions with respect to any 
                BIF-assessable deposit shall be assessed at a 
                rate equal to \1/5\ of the rate of the 
                assessments imposed on insured depository 
                institutions with respect to any SAIF-
                assessable deposit; and
                  [(B) no limitation under clause (i) or (iii) 
                of section 7(b)(2)(A) of the Federal Deposit 
                Insurance Act shall apply for purposes of this 
                paragraph].
          * * * * * * *
  (k) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1)  * * *
          * * * * * * *
          [(4) Deposit terms.--
                  [(A) BIF-assessable deposits.--The term 
                ``BIF-assessable deposit'' means a deposit that 
                is subject to assessment for purposes of the 
                Bank Insurance Fund under the Federal Deposit 
                Insurance Act (including a deposit that is 
                treated as a deposit insured by the Bank 
                Insurance Fund under section 5(d)(3) of the 
                Federal Deposit Insurance Act).
                  [(B) SAIF-assessable deposit.--The term 
                ``SAIF-assessable deposit'' has the meaning 
                given to such term in section 2710 of the 
                Deposit Insurance Funds Act of 1996.]
          * * * * * * *

SEC. 21A. THRIFT DEPOSITOR PROTECTION OVERSIGHT BOARD AND RESOLUTION 
                    TRUST CORPORATION.

  (a)  * * *
  (b) Resolution Trust Corporation Established.--
          (1)  * * *
          * * * * * * *
          (4) Conservatorship, receivership, and assistance 
        powers.--
                  (A)  * * *
                  (B) Manner of application of least-cost 
                resolution.--For purposes of applying section 
                13(c)(4) of the Federal Deposit Insurance Act 
                to the Corporation under subparagraph (A), the 
                Corporation shall be treated as the [affected 
                deposit insurance fund] Deposit Insurance Fund.
          * * * * * * *
          (6) Continuation of rtc receivership or 
        conservatorship.--
                  (A)  * * *
                  (B) [SAIF-insured banks] Charter 
                conversions.--Notwithstanding any other 
                provision of Federal or State law, if the 
                Federal Deposit Insurance Corporation is 
                appointed as conservator or receiver for any 
                [Savings Association Insurance Fund member] 
                savings association that has converted to a 
                bank charter and otherwise meets the criteria 
                in paragraph (3)(A) or (6)(A), the Federal 
                Deposit Insurance Corporation may tender such 
                appointment to the Corporation, and the 
                Corporation shall accept such appointment, if 
                the Corporation is authorized to accept such 
                appointment under this section.
          * * * * * * *
          (10) Special powers.--
                  (A) In general.--In addition to the powers of 
                the Corporation described in paragraph (9), the 
                Corporation shall have the following powers:
                          (i)  * * *
          * * * * * * *
                          (iv) Organization of savings 
                        associations.--The Corporation may 
                        organize 1 or more Federal savings 
                        associations--
                                  (I)  * * *
                                  (II) the deposits of which, 
                                if any, shall be insured by the 
                                Federal Deposit Insurance 
                                Corporation through the 
                                [Savings Association Insurance 
                                Fund] Deposit Insurance Fund, 
                                and
          * * * * * * *
  (n) Conflict of Interest.--
          (1)  * * *
          * * * * * * *
          (6) Disapproval of contractors.--
                  (A)  * * *
          * * * * * * *
                  (E) Prohibition required in certain cases.--
                The standards established under subparagraph 
                (A) shall require the Corporation to prohibit 
                any person who has--
                          (i)  * * *
          * * * * * * *
                          (iv) caused a substantial loss to 
                        [Federal deposit insurance funds] the 
                        Deposit Insurance Fund,
          * * * * * * *

SEC. 21B. RESOLUTION FUNDING CORPORATION ESTABLISHED.

  (a)  * * *
          * * * * * * *
  (e) Capitalization of Funding Corporation, etc.--
          (1)  * * *
          * * * * * * *
          (5) Pro rata distribution of amounts required to be 
        invested in excess of $1,000,000,000.--Of any amount 
        which the Thrift Depositor Protection Oversight Board 
        may require the Federal Home Loan Banks to invest in 
        capital stock of the Funding Corporation under this 
        subsection in excess of the $1,000,000,000 amount 
        referred to in paragraph (4), the amount which each 
        Federal Home Loan Bank (or any successor to such Bank) 
        shall invest shall be determined by the Thrift 
        Depositor Protection Oversight Board by multiplying the 
        excess amount by the percentage arrived at by 
        dividing--
                  (A) the sum of the total assets (as of the 
                most recent December 31) held by all Savings 
                Association Insurance Fund members as of the 
                date of funding which are members of such Bank; 
                by
                  (B) the sum of the total assets (as of such 
                date) held by all Savings Association Insurance 
                Fund members as of the date of funding which 
                are members of a Federal Home Loan Bank.
          * * * * * * *
          [(7) Additional sources.--If each Federal Home Loan 
        Bank has exhausted the amount applicable with respect 
        to the Bank under paragraph (3) after purchases under 
        paragraphs (4), (5), and (6), the amounts necessary to 
        provide additional funding for the Funding Corporation 
        Principal Fund shall be obtained from the following 
        sources:
                  [(A) Assessments.--The Funding Corporation, 
                with the approval of the Board of Directors of 
                the Federal Deposit Insurance Corporation, 
                shall assess against each Savings Association 
                Insurance Fund member an assessment (in the 
                same manner as assessments are assessed against 
                such members by the Federal Deposit Insurance 
                Corporation pursuant to section 7 of the 
                Federal Deposit Insurance Act) except that--
                          [(i) the maximum amount of the 
                        aggregate amount assessed shall be the 
                        amount of additional funds necessary to 
                        fund the Funding Corporation Principal 
                        Fund;
                          [(ii) the sum of--
                                  [(I) the amount assessed 
                                under this subparagraph; and
                                  [(II) the amount assessed by 
                                the Financing Corporation under 
                                section 21;
                        shall not exceed the amount authorized 
                        to be assessed against Savings 
                        Association Insurance Fund members 
                        pursuant to section 7 of the Federal 
                        Deposit Insurance Act;
                          [(iii) the Financing Corporation 
                        shall have first priority to make the 
                        assessment; and
                          [(iv) the amount of the applicable 
                        assessment determined under such 
                        section 7 shall be reduced by the sum 
                        described in clause (ii) of this 
                        subparagraph.
                  [(B) Receivership proceeds.--To the extent 
                the amounts available pursuant to subparagraph 
                (A) are insufficient to fund the Funding 
                Corporation Principal Fund, the Federal Deposit 
                Insurance Corporation shall transfer amounts to 
                the Funding Corporation from the liquidating 
                dividends and payments made on claims received 
                by the FSLIC Resolution Fund from 
                receiverships.
          [(8) Transfer to rtc.--The Funding Corporation shall 
        transfer to the Resolution Trust Corporation 
        $1,200,000,000 in fiscal year 1989.]
          * * * * * * *
  (k) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1)  * * *
          * * * * * * *
          [(8) Savings association insurance fund member.--The 
        term ``Savings Association Insurance Fund member'' 
        means a Savings Association Insurance member as such 
        term is defined by section 7(l) of the Federal Deposit 
        Insurance Act.]
          [(9)] (8) Secretary.--The term ``Secretary'' means 
        the Secretary of the Treasury.
          [(10)] (9) Undivided profits.--The term ``undivided 
        profits'' means earnings retained after dividends have 
        been paid minus the sum of--
                  (A) that portion required to be added to 
                reserves maintained pursuant to the first 2 
                sentences of section 16; and
                  (B) the dollar amounts held by the respective 
                Federal Home Loan Banks in special dividend 
                stabilization reserves on December 31, 1985, as 
                determined by the table set forth in section 
                21(d)(7).
          * * * * * * *
                              ----------                              


                         HOME OWNERS' LOAN ACT

          * * * * * * *

SEC. 5. FEDERAL SAVINGS ASSOCIATIONS.

  (a)  * * *
          * * * * * * *
  (c) Loans and Investments.--To the extent specified in 
regulations of the Director, a Federal savings association may 
invest in, sell, or otherwise deal in the following loans and 
other investments:
          (1)  * * *
          * * * * * * *
          (5) Transition rule for savings associations 
        acquiring banks.--
                  (A) In general.--If, under section 5(d)(3) of 
                the Federal Deposit Insurance Act, a savings 
                association acquires all or substantially all 
                of the assets of a bank [that is a member of 
                the Bank Insurance Fund], the Director may 
                permit the savings association to retain any 
                such asset during the 2-year period beginning 
                on the date of the acquisition.
          * * * * * * *
          (6) Definitions.--[As used in this subsection--] For 
        purposes of this subsection, the following definitions 
        shall apply:
                  (A)  * * *
          * * * * * * *
  (o) Conversion of State Savings Banks.--(1) Subject to the 
provisions of this subsection and under regulations of the 
Director, the Director may authorize the conversion of a State-
chartered savings bank [that is a Bank Insurance Fund member] 
into a Federal savings bank, if such conversion is not in 
contravention of State law, and provide for the organization, 
incorporation, operation, examination, and regulation of such 
institution.
  (2)(A) Any Federal savings bank chartered pursuant to this 
subsection shall continue to be [a Bank Insurance Fund member 
until such time as it changes its status to a Savings 
Association Insurance Fund member] insured by the Deposit 
Insurance Fund.
          * * * * * * *
  (t) Capital Standards.--
          (1)  * * *
          * * * * * * *
          (5) Separate capitalization required for certain 
        subsidiaries.--
                  (A)  * * *
          * * * * * * *
                  (D) Transition rule.--
                          (i)  * * *
          * * * * * * *
                          (iii) Agency discretion to prescribe 
                        greater percentage.--Subject to clauses 
                        (iv), (v), and (vi), the Director may 
                        prescribe by order, with respect to a 
                        particular qualified savings 
                        association, an applicable percentage 
                        greater than that provided in clause 
                        (ii) if the Director determines, in the 
                        Director's sole discretion, that the 
                        use of the greater percentage, under 
                        the circumstances--
                                  (I) would not constitute an 
                                unsafe or unsound practice;
                                  (II) would not increase the 
                                risk to the [affected deposit 
                                insurance fund] Deposit 
                                Insurance Fund; and
          * * * * * * *
          (7) Exemption from certain sanctions.--
                  (A)  * * *
          * * * * * * *
                  (C) Standards for approval or disapproval.--
                          (i) Approval.--The Director may 
                        approve an application for an exemption 
                        if the Director determines that--
                                  (I) such exemption would pose 
                                no significant risk to the 
                                [affected deposit insurance 
                                fund] Deposit Insurance Fund;
          * * * * * * *
  (v) Reports of Condition.--
          (1)  * * *
          (2) Public disclosure.--
                  (A) Reports required under paragraph (1) and 
                all information contained therein shall be 
                available to the public upon request, unless 
                the Director determines--
                          (i) that a particular item or 
                        classification of information should 
                        not be made public in order to protect 
                        the safety or soundness of the 
                        institution concerned or institutions 
                        concerned, [the Savings Association 
                        Insurance Fund] or the Deposit 
                        Insurance Fund; or
          * * * * * * *

SEC. 10. REGULATION OF HOLDING COMPANIES.

  (a)  * * *
          * * * * * * *
  (c) Holding Company Activities.--
          (1)  * * *
          * * * * * * *
          (6) Special provisions relating to certain companies 
        affected by 1987 amendments.--
                  (A)  * * *
          * * * * * * *
                  (D) Order by Director to terminate 
                subparagraph (b) activity.--Any activity 
                described in subparagraph (B) may also be 
                terminated by the Director, after opportunity 
                for hearing, if the Director determines, having 
                due regard for the purposes of this [title] 
                Act, that such action is necessary to prevent 
                conflicts of interest or unsound practices or 
                is in the public interest.
          * * * * * * *
  (e) Acquisitions.--
          (1) In general.--It shall be unlawful for--
                  (A)  * * *
                  (B) any other company, without the prior 
                written approval of the Director, directly or 
                indirectly, or through one or more subsidiaries 
                or through one or more transactions, to acquire 
                the control of one or more savings 
                associations, except that such approval shall 
                not be required in connection with the control 
                of a savings association, (i) acquired by 
                devise under the terms of a will creating a 
                trust which is excluded from the definition of 
                ``savings and loan holding company'' under 
                subsection (a) of this section, (ii) acquired 
                in connection with a reorganization in which a 
                person or group of persons, having had control 
                of a savings association for more than 3 years, 
                vests control of that association in a newly 
                formed holding company subject to the control 
                of the same person or group of persons, or 
                (iii) acquired by a bank holding company that 
                is registered under, and subject to, the Bank 
                Holding Company Act of 1956, or any company 
                controlled by such bank holding company. The 
                Director shall approve an acquisition of a 
                savings association under this subparagraph 
                unless the Director finds the financial and 
                managerial resources and future prospects of 
                the company and association involved to be such 
                that the acquisition would be detrimental to 
                the association or the insurance risk of the 
                [Savings Association Insurance Fund or Bank 
                Insurance Fund] Deposit Insurance Fund, and 
                shall render a decision within 90 days after 
                submission to the Director of the complete 
                record on the application.
          * * * * * * *
          (2) Factors to be considered.--The Director shall not 
        approve any acquisition under subparagraph (A)(i) or 
        (A)(ii), or of more than one savings association under 
        subparagraph (B) of paragraph (1) of this subsection, 
        any acquisition of stock in connection with a qualified 
        stock issuance, any acquisition under paragraph (4)(A), 
        or any transaction under section 13(k) of the Federal 
        Deposit Insurance Act, except in accordance with this 
        paragraph. In every case, the Director shall take into 
        consideration the financial and managerial resources 
        and future prospects of the company and association 
        involved, the effect of the acquisition on the 
        association, the insurance risk to the [Savings 
        Association Insurance Fund or the Bank Insurance Fund] 
        Deposit Insurance Fund, and the convenience and needs 
        of the community to be served, and shall render a 
        decision within 90 days after submission to the 
        Director of the complete record on the application. 
        Consideration of the managerial resources of a company 
        or savings association shall include consideration of 
        the competence, experience, and integrity of the 
        officers, directors, and principal shareholders of the 
        company or association. Before approving any such 
        acquisition, except a transaction under section 13(k) 
        of the Federal Deposit Insurance Act, the Director 
        shall request from the Attorney General and consider 
        any report rendered within 30 days on the competitive 
        factors involved. The Director shall not approve any 
        proposed acquisition--
                  (A) * * *
          * * * * * * *
          (4) Acquisitions by certain individuals.--
                  (A)  * * *
                  (B) Treatment of certain holding companies.--
                If any individual referred to in subparagraph 
                (A) controls more than 1 savings and loan 
                holding company or more than 1 savings 
                association, any savings and loan holding 
                company controlled by such individual shall be 
                subject to the activities limitations contained 
                in subsection (c) to the same extent such 
                limitations apply to multiple savings and loan 
                holding companies, unless all or all but 1 of 
                the savings associations (including any 
                institution deemed to be a savings association 
                under subsection [(1)] (l) of this section) 
                controlled directly or indirectly by such 
                individual was acquired pursuant to an 
                acquisition described in subclause (I) or (II) 
                of subsection (c)(3)(B)(i).
          * * * * * * *
  (g) Administration and Enforcement.--
          (1)  * * *
          * * * * * * *
          (3) Proceedings.--(A) In any proceeding under 
        subsection (a)(2)(D) or under paragraph (5) of this 
        [section] subsection, the Director may administer oaths 
        and affirmations, take or cause to be taken 
        depositions, and issue subpenas. The Director may make 
        regulations with respect to any such proceedings. The 
        attendance of witnesses and the production of documents 
        provided for in this paragraph may be required from any 
        place in any State or in any territory at any 
        designated place where such proceeding is being 
        conducted. Any party to such proceedings may apply to 
        the United States District Court for the District of 
        Columbia, or the United States district court for the 
        judicial district or the United States court in any 
        territory in which such proceeding is being conducted, 
        or where the witness resides or carries on business, 
        for enforcement of any subpena issued pursuant to this 
        paragraph, and such courts shall have jurisdiction and 
        power to order and require compliance therewith. 
        Witnesses subpenaed under this section shall be paid 
        the same fees and mileage that are paid witnesses in 
        the district courts of the United States.
          * * * * * * *
  (i) Penalties.--
          (1)  * * *
          * * * * * * *
          [(5)] (4) Notice under this section after separation 
        from service.--The resignation, termination of 
        employment or participation, or separation of an 
        institution-affiliated party (within the meaning of 
        section 3(u) of the Federal Deposit Insurance Act) with 
        respect to a savings and loan holding company or 
        subsidiary thereof (including a separation caused by 
        the deregistration of such a company or such a 
        subsidiary) shall not affect the jurisdiction and 
        authority of the Director to issue any notice and 
        proceed under this section against any such party, if 
        such notice is served before the end of the 6-year 
        period beginning on the date such party ceased to be 
        such a party with respect to such holding company or 
        its subsidiary (whether such date occurs before, on, or 
        after the date of the enactment of this paragraph).
          * * * * * * *
  (m) Qualified Thrift Lender Test.--
          (1)  * * *
          * * * * * * *
          (3) Failure to become and remain a qualified thrift 
        lender.--
                  (A)  * * *
          * * * * * * *
                  [(E) Deposit insurance assessments.--Any bank 
                chartered as a result of the requirements of 
                this section shall be obligated until December 
                31, 1993, to pay to the Savings Association 
                Insurance Fund the assessments assessed on 
                savings associations under the Federal Deposit 
                Insurance Act. Such association shall also be 
                assessed, on the date of its change of status 
                from a Savings Association Insurance Fund 
                member, the exit fee and entrance fee provided 
                in section 5(d) of the Federal Deposit 
                Insurance Act. Such institution shall not be 
                obligated to pay the assessments assessed on 
                banks under the Federal Deposit Insurance Act 
                until--
                          [(i) December 31, 1993, or
                          [(ii) the institution's change of 
                        status from a Savings Association 
                        Insurance Fund member to a Bank 
                        Insurance Fund member,
                whichever is later.]
                  [(F)] (E) Exemption for specialized savings 
                associations serving certain military 
                personnel.--Subparagraph (A) shall not apply to 
                a savings association subsidiary of a savings 
                and loan holding company if at least 90 percent 
                of the customers of the savings and loan 
                holding company and its subsidiaries and 
                affiliates are active or former members in the 
                United States military services or the widows, 
                widowers, divorced spouses, or current or 
                former dependents of such members.
                  [(G)] (F) Exemption for certain federal 
                savings associations.--This paragraph shall not 
                apply to any Federal savings association in 
                existence as a Federal savings association on 
                the date of enactment of the Financial 
                Institutions Reform, Recovery, and Enforcement 
                Act of 1989--
                          (i) that was chartered before October 
                        15, 1982, as a savings bank or a 
                        cooperative bank under State law; or
                          (ii) that acquired its principal 
                        assets from an association that was 
                        chartered before October 15, 1982, as a 
                        savings bank or a cooperative bank 
                        under State law.
                  [(H)] (G) No circumvention of exit 
                moratorium.--Subparagraph (A) of this paragraph 
                shall not be construed as permitting any 
                insured depository institution to engage in any 
                conversion transaction prohibited under section 
                5(d) of the Federal Deposit Insurance Act.
          * * * * * * *
          (7) Transitional rule for certain savings 
        associations.--
                  (A) In general.--If any Federal savings 
                association in existence as a Federal savings 
                association on the date of enactment of the 
                Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989--
                          (i) that was chartered as a savings 
                        bank or a cooperative bank under State 
                        law before October 15, 1982; or
                          (ii) that acquired its principal 
                        assets from an association that was 
                        chartered before October 15, 1982, as a 
                        savings bank or a cooperative bank 
                        under State law,
                meets the requirements of subparagraph (B), 
                such savings association shall be treated as a 
                qualified thrift lender [during period] during 
                the period ending on September 30, 1995.
          * * * * * * *
  (o) Mutual Holding Companies.--
          (1)  * * *
          * * * * * * *
          (3) Notice to the director; disapproval period.--
                  (A)  * * *
          * * * * * * *
                  (D) Retention of capital assets.--In 
                connection with the transaction described in 
                paragraph (1), a savings association may, 
                subject to the approval of the Director, retain 
                capital assets at the holding company level to 
                the extent that such capital exceeds the 
                association's capital requirement established 
                by the Director pursuant to [sections 5 (s) and 
                (t) of this Act] subsections (s) and (t) of 
                section 5.
          * * * * * * *
                              ----------                              


                          NATIONAL HOUSING ACT

          * * * * * * *

               TITLE III--NATIONAL MORTGAGE ASSOCIATIONS

          * * * * * * *
                 civil money penalties against issuers
      Sec. 317. (a)  * * *
      (b) Violations for Which a Penalty May Be Imposed.--
          (1) Violations.--The violations by an issuer or a 
        custodian for which the Secretary may impose a civil 
        money penalty under subsection (a) are the following:
                  (A)  * * *
                  (B) Failure to segregate cash flow from 
                pooled mortgages or to deposit either principal 
                and interest funds or escrow funds into special 
                accounts with a depository institution whose 
                accounts are insured by the National Credit 
                Union Administration or by the Federal Deposit 
                Insurance Corporation through the [Bank 
                Insurance Fund for banks or through the Savings 
                Association Insurance Fund for savings 
                associations] Deposit Insurance Fund.
          * * * * * * *

                         TITLE V--MISCELLANEOUS

          * * * * * * *

SEC. 536. CIVIL MONEY PENALTIES AGAINST MORTGAGEES, LENDERS, AND OTHER 
                    PARTICIPANTS IN FHA PROGRAMS.

      (a)  * * *
      (b) Violations for Which a Penalty May Be Imposed.--
          (1) Violations.--The Secretary may impose a civil 
        money penalty under subsection (a) for any knowing and 
        material violation by a mortgagee or lender, as 
        follows:
                  (A)  * * *
                  (B) Failure of a nonsupervised mortgagee, as 
                defined by the Secretary--
                          (i)  * * *
                          (ii) to deposit these funds in a 
                        special account with a depository 
                        institution whose accounts are insured 
                        by the Federal Deposit Insurance 
                        Corporation through the [Bank Insurance 
                        Fund for banks and through the Savings 
                        Association Insurance Fund for savings 
                        associations] Deposit Insurance Fund, 
                        or by the National Credit Union 
                        Administration.
          * * * * * * *
                              ----------                              


  FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT OF 1989

          * * * * * * *

  TITLE IX--REGULATORY ENFORCEMENT AUTHORITY AND CRIMINAL ENHANCEMENTS

           * * * * * * *

    Subtitle E--Civil Penalties For Violations Involving Financial 
                              Institutions

SEC. 951. CIVIL PENALTIES.

  (a)  * * *
  (b) Maximum Amount of Penalty.--
          (1)  * * *
          * * * * * * *
          (3) Special rule for violations creating gain or 
        loss.--(A)  * * *
          (B) As used in this paragraph, the term ``person'' 
        includes the Bank Insurance Fund, the Savings 
        Association Insurance Fund, and after the merger of 
        such funds, the Deposit Insurance Fund, and the 
        National Credit Union Share Insurance Fund.
          * * * * * * *

           TITLE XI--REAL ESTATE APPRAISAL REFORM AMENDMENTS

          * * * * * * *

SEC. 1112. FUNCTIONS OF THE FEDERAL FINANCIAL INSTITUTIONS REGULATORY 
                    AGENCIES RELATING TO APPRAISER QUALIFICATIONS.

  (a)  * * *
          * * * * * * *
  (c) GAO Study of Appraisals in Connection With Real Estate 
Related Financial Transactions Below the Threshold Level.--
          (1) GAO studies.--The Comptroller General of the 
        United States may conduct, under such conditions as the 
        Comptroller General determines appropriate, studies on 
        the adequacy and quality of appraisals or evaluations 
        conducted in connection with real estate related 
        financial transactions below the threshold level 
        established under subsection (b), taking into account--
                  (A)  * * *
                  (B) the possibility of losses to the [Bank 
                Insurance Fund, the Savings Association 
                Insurance Fund,] Deposit Insurance Fund or the 
                National Credit Union Share Insurance Fund;
          * * * * * * *
                              ----------                              


                    BANK HOLDING COMPANY ACT OF 1956

          * * * * * * *

                              definitions

  Sec. 2. (a)  * * *
          * * * * * * *
  (j) Definition of Savings Associations and Related Term.--The 
term ``savings association'' or ``insured institution'' means--
          (1) any Federal savings association or Federal 
        savings bank;
          (2) any building and loan association, savings and 
        loan association, homestead association, or cooperative 
        bank if such association or cooperative bank is a 
        member of the [Savings Association Insurance Fund] 
        Deposit Insurance Fund; and
          * * * * * * *

                  acquisition of bank shares or assets

  Sec. 3. (a)  * * *
          * * * * * * *
  (d) Interstate Banking.--
          (1) Approvals authorized.--
                  (A)  * * *
          * * * * * * *
                  (D) Effect on state contingency laws.--No 
                provision of this subsection shall be construed 
                as affecting the applicability of a State law 
                that makes an acquisition of a bank contingent 
                upon a requirement to hold a portion of such 
                bank's assets available for call by a State-
                sponsored housing entity established pursuant 
                to State law, if--
                          (i)  * * *
          * * * * * * *
                          (iii) the Federal Deposit Insurance 
                        Corporation has not determined that 
                        compliance with such State law would 
                        result in an unacceptable risk to the 
                        [appropriate deposit insurance fund] 
                        Deposit Insurance Fund; and
          * * * * * * *
                              ----------                              


               SECTION 114 OF THE GRAMM-LEACH-BLILEY ACT

SEC. 114. PRUDENTIAL SAFEGUARDS.

  (a) Comptroller of the Currency.--
          (1) In general.--The Comptroller of the Currency may, 
        by regulation or order, impose restrictions or 
        requirements on relationships or transactions between a 
        national bank and a subsidiary of the national bank 
        that the Comptroller finds are--
                  (A)  * * *
                  (B) appropriate to avoid any significant risk 
                to the safety and soundness of insured 
                depository institutions or [any Federal deposit 
                insurance fund] the Deposit Insurance Fund or 
                other adverse effects, such as undue 
                concentration of resources, decreased or unfair 
                competition, conflicts of interests, or unsound 
                banking practices.
          * * * * * * *
  (b) Board of Governors of the Federal Reserve System.--
          (1)  * * *
          (2) Finding.--The Board of Governors of the Federal 
        Reserve System may exercise authority under paragraph 
        (1) if the Board finds that the exercise of such 
        authority is--
                  (A)  * * *
                  (B) appropriate to prevent an evasion of any 
                provision of law referred to in subparagraph 
                (A) or to avoid any significant risk to the 
                safety and soundness of depository institutions 
                or [any Federal deposit insurance fund] the 
                Deposit Insurance Fund or other adverse 
                effects, such as undue concentration of 
                resources, decreased or unfair competition, 
                conflicts of interests, or unsound banking 
                practices.
          * * * * * * *
          (4) Foreign banks.--The Board may, by regulation or 
        order, impose restrictions or requirements on 
        relationships or transactions between a branch, agency, 
        or commercial lending company of a foreign bank in the 
        United States and any affiliate in the United States of 
        such foreign bank that the Board finds are--
                  (A)  * * *
                  (B) appropriate to prevent an evasion of any 
                provision of law referred to in subparagraph 
                (A) or to avoid any significant risk to the 
                safety and soundness of depository institutions 
                or [any Federal deposit insurance fund] the 
                Deposit Insurance Fund or other adverse 
                effects, such as undue concentration of 
                resources, decreased or unfair competition, 
                conflicts of interests, or unsound banking 
                practices.
  (c) Federal Deposit Insurance Corporation.--
          (1) In general.--The Federal Deposit Insurance 
        Corporation may, by regulation or order, impose 
        restrictions or requirements on relationships or 
        transactions between a State nonmember bank (as defined 
        in section 3 of the Federal Deposit Insurance Act) and 
        a subsidiary of the State nonmember bank that the 
        Corporation finds are--
                  (A)  * * *
                  (B) appropriate to avoid any significant risk 
                to the safety and soundness of depository 
                institutions or [any Federal deposit insurance 
                fund] the Deposit Insurance Fund or other 
                adverse effects, such as undue concentration of 
                resources, decreased or unfair competition, 
                conflicts of interests, or unsound banking 
                practices.
          * * * * * * *

                           SUPPLEMENTAL VIEWS

    Section 4 of H.R. 522 contains a provision, originally 
authored by Congresswoman Waters, that gives depository 
institutions a 50 percent credit toward their premiums for 
deposits held in lifeline banking accounts. These are accounts 
intended for persons who might otherwise not be able to afford 
access to basic banking services, such as free or low-cost 
checking and savings accounts. This is a vital provision that, 
for the first time, implements a provision of the Bank 
Enterprise Act enacted in 1991, giving financial institutions 
an incentive to provide low-cost basic banking services to 
consumers who might not otherwise have access to them. The 
inclusion of the lifeline account credit was critical to our 
support of the favorable reporting of H.R. 522, and we are 
strongly committed to do all that is necessary to retain it in 
the bill throughout the legislative process.

                                   Barney Frank.
                                   Maxine Waters.

                            DISSENTING VIEWS

    H.R. 522, 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. 522 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 that 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 Institute, 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 failures. 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' 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' embrace of fiat money is 
directly responsible for the instability in the banking system 
that created the justification for deposit insurance.
    In conclusion, H.R. 522 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.
                                                          Ron Paul.

                                
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