[House Report 118-614]
[From the U.S. Government Publishing Office]


118th Congress   }                                       {      Report
                        HOUSE OF REPRESENTATIVES
 2d Session      }                                       {      118-614

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



 
                SYSTEMIC RISK AUTHORITY TRANSPARENCY ACT

                                _______
                                

 July 30, 2024.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 4116]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 4116) to amend the Federal Deposit Insurance Act 
to require reports on the use of the systemic risk authority 
applicable to winding up a failed insured depository 
institution, and for other purposes, having considered the 
same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     3
Background and Need for Legislation..............................     4
Related Hearings.................................................     4
Committee Consideration..........................................     4
Committee Votes..................................................     5
Committee Oversight Findings.....................................     7
Performance Goals and Objectives.................................     7
Congressional Budget Office Estimates............................     7
New Budget Authority, Entitlement Authority, and Tax Expenditures     8
Federal Mandates Statement.......................................     8
Advisory Committee Statement.....................................     8
Applicability to Legislative Branch..............................     9
Earmark Identification...........................................     9
Duplication of Federal Programs..................................     9
Section-by-Section Analysis of the Legislation...................     9
Changes in Existing Law Made by the Bill, as Reported............     9

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

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Systemic Risk Authority Transparency 
Act''.

SEC. 2. BANK FAILURE TRANSPARENCY RELATED TO SYSTEMIC RISK EXCEPTION.

  (a) GAO Review.--Section 13(c)(4)(G)(iv) of the Federal Deposit 
Insurance Act (12 U.S.C. 1823(c)(4)(G)(iv)) is amended to read as 
follows:
                          ``(iv) GAO review.--
                                  ``(I) In general.--The Comptroller 
                                General of the United States shall, not 
                                later than later than 60 days after a 
                                determination is made under clause (i), 
                                and again 180 days thereafter, review 
                                and report to the Congress on the 
                                determination under clause (i), 
                                including--
                                          ``(aa) the basis for the 
                                        determination;
                                          ``(bb) the purpose for which 
                                        any action was taken pursuant 
                                        to such clause;
                                          ``(cc) the likely effect of 
                                        the determination and such 
                                        action on the incentives and 
                                        conduct of insured depository 
                                        institutions and uninsured 
                                        depositors;
                                          ``(dd) any mismanagement by 
                                        the executives and board of the 
                                        insured depository institution 
                                        that contributed to the failure 
                                        of the insured depository 
                                        institution;
                                          ``(ee) a review of the 
                                        compensation practices of the 
                                        insured depository institution;
                                          ``(ff) any supervisory or 
                                        regulatory shortcomings with 
                                        respect to the appropriate 
                                        Federal banking agency of the 
                                        insured depository institution;
                                          ``(gg) any actions taken by 
                                        the Federal banking regulators, 
                                        Financial Stability Oversight 
                                        Council, Treasury Department, 
                                        and other relevant financial 
                                        regulators in relation to the 
                                        failure of the insured 
                                        depository institution; and
                                          ``(hh) any additional 
                                        relevant entities or activities 
                                        that may have contributed to 
                                        the failure of the insured 
                                        depository institution, 
                                        including with respect to 
                                        auditing, accounting, credit 
                                        rating agencies, investment 
                                        bank underwriters, and 
                                        emergency liquidity options 
                                        such as loans from the Federal 
                                        reserve banks or advances 
                                        through the Federal Home Loan 
                                        Bank system.
                                  ``(II) Rule of construction.--Nothing 
                                in this clause or a report issued 
                                pursuant to this clause may be 
                                construed to limit the authority of a 
                                Federal agency to enforce violations of 
                                Federal statutes, rules, or orders.''.
  (b) Appropriate Federal Banking Agency Report.--Section 13(c) of the 
Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is amended by adding 
at the end the following:
          ``(12) Appropriate federal banking agency report.--
                  ``(A) In general.--The appropriate Federal banking 
                agency of an insured depository institution about which 
                a determination is made under paragraph (4)(G)(i) 
                shall, not later than 90 days after the date of such 
                determination, and again 210 days thereafter, submit a 
                report to the Congress that discloses the following:
                          ``(i) Subject to such redactions as the 
                        appropriate Federal banking agency determines 
                        appropriate of personally identifiable 
                        information about customers and other financial 
                        institutions (as such term is defined under 
                        section 11(e)(9)(D)), all--
                                  ``(I) reports of examination and 
                                inspection that relate to the failed 
                                insured depository institution in the 
                                previous 3-year period;
                                  ``(II) formal communications of a 
                                material supervisory determination 
                                conveyed to the failed insured 
                                depository institution in the previous 
                                3-year period; and
                                  ``(III) any additional exam reports 
                                and correspondence that the appropriate 
                                Federal banking agency determines may 
                                be relevant to the failure of the 
                                insured depository institution.
                          ``(ii) An examination of any mismanagement by 
                        the executives and board of the insured 
                        depository institution that contributed to the 
                        failure of the insured depository institution.
                          ``(iii) Any supervisory or regulatory 
                        shortcomings by such appropriate Federal 
                        banking agency with respect to the insured 
                        depository institution.
                          ``(iv) Any dynamics that the appropriate 
                        Federal banking agency determines may have 
                        contributed to the failure of the insured 
                        depository institution.
                          ``(v) Any supervisory, regulatory, and 
                        legislative recommendations such appropriate 
                        Federal banking agency may have to improve the 
                        safety and soundness of similarly situated 
                        insured depository institutions, the banking 
                        system, and financial stability.
                  ``(B) Protection of sensitive information.--
                          ``(i) Effect on privilege.--The provision of 
                        any information by a Federal banking agency 
                        under this paragraph may not be construed as--
                                  ``(I) waiving, destroying, or 
                                otherwise affecting any privilege 
                                applicable to the information; or
                                  ``(II) waiving any exemption 
                                applicable to the information under 
                                section 552 of title 5 United States 
                                Code (commonly known as the `Freedom of 
                                Information Act').
                          ``(ii) Transparency.--
                                  ``(I) In general.--A Federal banking 
                                agency shall publish materials 
                                contained in a report required under 
                                subparagraph (A) to the fullest extent 
                                possible to promote transparency.
                                  ``(II) Consultation on omitting 
                                materials.--If a Federal banking agency 
                                determines particular materials 
                                described under subclause (I) should 
                                not be published, the Federal banking 
                                agency shall consult with the chair and 
                                ranking member of the Committee on 
                                Financial Services of the House of 
                                Representatives and the chair and 
                                ranking member of the Committee on 
                                Banking, Housing, and Urban Affairs of 
                                the Senate.
                                  ``(III) Omitting materials.--If, 
                                after the consultation required under 
                                subclause (II), the Federal banking 
                                agency determines there is a 
                                substantial public interest in not 
                                publishing such materials, the Federal 
                                banking agency shall provide those 
                                materials to the Committee on Financial 
                                Services of the House of 
                                Representatives and the Committee on 
                                Banking, Housing, and Urban Affairs of 
                                the Senate with a written explanation 
                                describing the reasons for not 
                                publishing those materials.
                          ``(iii) Privilege.--For purposes of this 
                        subparagraph, the term `privilege' includes any 
                        work-product, attorney-client, or other 
                        privilege recognized under Federal or State 
                        law.
                  ``(C) Report extension.--A Federal banking agency may 
                extend a deadline described under subparagraph (A) for 
                an additional 60 days, if the Federal banking agency--
                          ``(i) faces ongoing circumstances that 
                        require the Federal banking agency to 
                        prioritize activities to promote stability of 
                        the U.S. banking system; and
                          ``(ii) notifies the Congress of such 
                        extension and the reasons for such extension.
                  ``(D) Consolidated reports.--A Federal banking agency 
                may consolidate multiple reports required under this 
                paragraph so long as the individual reports being 
                consolidated all meet the timing requirements under 
                this paragraph.
                  ``(E) Rule of construction.--Nothing in this 
                paragraph or reports or materials provided pursuant to 
                this paragraph may be construed to limit the authority 
                of a Federal agency to enforce violations of Federal 
                statutes, rules, or orders.''.

                          Purpose and Summary

    Introduced on June 14, 2023, by Representative Al Green, 
H.R. 4116, the Systemic Risk Authority Transparency Act, would 
increase transparency from the Federal banking agencies and the 
Secretary of the Treasury when they invoke the systemic risk 
exception to the Federal Deposit Insurance Act's (FDI Act) 
least-cost resolution mandate for resolving failed banks. The 
bill would require the Comptroller General of the United States 
(GAO) to issue a report to Congress on the use of the systemic 
risk exception. The GAO report would include an analysis of the 
basis and purpose of the use of the exception, the effect of 
the exception, executive compensation and any mismanagement at 
the failed bank, the supervision of the bank, other actions 
taken by any regulators, and any other contributing factors. 
The GAO report would be required within 60 days of the 
exception, and a follow-up report would be required within 180 
days of the exception.
    In addition, the legislation would require similar 
reporting by the failed bank's primary Federal banking agency 
within 90 days of the use of the exception and again within 270 
days of the exception. The appropriate Federal banking agency 
report would be required to include--with redactions to protect 
personally identifiable information--reports of examination or 
inspection and similar communications that conveyed supervisory 
findings to the bank during the three years preceding the 
failure.

                  Background and Need for Legislation

    In March 2023, the Federal Deposit Insurance Corporation, 
the Federal Reserve Board, and the Treasury Secretary, in 
consultation with the President, invoked the systemic risk 
exception to the FDI Act's least-cost resolution mandate to 
protect uninsured depositors at Silicon Valley Bank and 
Signature Bank. Both banks had a significant concentration of 
uninsured depositors and failed rapidly over a several-day 
period in early March. Since their use of the systemic risk 
exception, the Federal banking agencies and Treasury have been 
less than forthcoming in their disclosures to Congress. Indeed, 
the Federal Reserve Vice Chair for Supervision issued a self-
serving report on the Silicon Valley Bank failure rather than 
promptly responding fulsomely to Congressional requests.
    H.R. 4116 would increase the transparency surrounding the 
use of the systemic risk exception. While Committee Republican 
staff remain concerned that requiring reporting by the same 
Federal banking agencies who approved the use the systemic risk 
exception provides an opportunity for self-serving reports, 
Democrats have sought to ameliorate this by timing the GAO 
report to be issued first, thereby limiting the ability of the 
Federal banking agencies to set the narrative.

                                Hearing

    Pursuant to clause 3(c)(6) of rule XIII, the following 
hearing was used to develop H.R. 4116: The Committee on 
Financial Services held a hearing on March 29, 2023, titled 
``The Federal Regulators' Response to Recent Bank Failures.''
    Pursuant to clause 3(c)(6) of rule XIII, the following 
hearing was used to develop H.R. 4116: The Subcommittee on 
Financial Institutions and Monetary Policy of the Committee on 
Financial Services held a hearing on May 10, 2023, titled 
``Federal Responses to Recent Bank Failures.''
    Pursuant to clause 3(c)(6) of rule XIII, the following 
hearing was used to develop H.R. 4116: The Subcommittee on 
Financial Institutions and Monetary Policy and Subcommittee on 
Oversight and Investigations of the Committee on Financial 
Services held a joint hearing on May 17, 2023, titled 
``Continued Oversight Over Regional Bank Failures.''

                        Committee Consideration

    The Committee on Financial Services met in open session on 
April 17, 2024, and ordered H.R. 4116 to be reported favorably 
to the House as amended by a recorded vote of 50 ayes to 0 nays 
(Record vote no. FC-136), a quorum being present. Before the 
question was called to order the bill favorably reported, the 
Committee adopted an amendment in the nature of a substitute 
offered by Mr. Green by 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 order to report legislation and amendments thereto. H.R. 
4116 was ordered reported favorably to the House as amended by 
a recorded vote of 50 ayes to 0 nays (Record vote no. FC-136), 
a quorum being present.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee, based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the goal of H.R. 4116 is to increase 
transparency from the Federal banking agencies and the 
Secretary of the Treasury when they invoke the systemic risk 
exception to the Federal Deposit Insurance Act's (FDI Act) 
least-cost resolution mandate for resolving failed banks.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    H.R. 4116 would require several federal agencies to report 
to the Congress if federal banking regulators invoke an 
emergency determination known as the systemic risk exception. 
Systemic risk is the possibility that the failure of a 
financial business, market, or product could trigger severe 
financial instability in the economy. The bill would require 
the Federal Deposit Insurance Corporation (FDIC), the Federal 
Reserve, the Government Accountability Office (GAO), and the 
Office of the Comptroller of the Currency (OCC) to submit 
information about bank supervision, regulation, management, and 
recommendations to improve the safety and soundness of the 
industry.
    Enacting H.R. 4116 would increase administrative costs for 
those agencies to meet the additional reporting requirements. 
CBO estimates that the total cost across all four agencies 
would be less than $500,000 over the 2024-2034 period. The 
budgetary treatment for those four agencies is described below:
           The operating costs for the FDIC and the OCC 
        are classified as direct spending. The OCC collects 
        fees from financial institutions to offset its 
        operating costs; those fees are recorded as offsetting 
        receipts, that is, as reductions in direct spending. 
        CBO estimates that enacting the bill would, on net, 
        increase direct spending by less than $500,000 over the 
        2024-2034 period.
           Costs incurred by the Federal Reserve reduce 
        remittances to the Treasury, which are recorded in the 
        budget as revenues. CBO estimates that enacting H.R. 
        4116 would decrease revenues by less than $500,000 over 
        the 2024-2034 period.
           GAO's funding is provided in annual 
        appropriation acts. CBO estimates that implementing the 
        bill would cost less than $500,000 over the 2024-2029 
        period; any related spending would be subject to the 
        availability of appropriated funds.
    If federal financial regulators increase annual fees to 
offset the costs of implementing the bill, H.R. 4116 would 
increase the costs of an existing private-sector mandate on 
entities required to pay those fees. CBO estimates that the 
incremental cost of the mandate would be small and would fall 
well below the annual threshold established in the Unfunded 
Mandates Reform Act (UMRA) for private-sector mandates ($200 
million in 2024, adjusted annually for inflation).
    The bill contains no intergovernmental mandates as defined 
in UMRA.
    The CBO staff contacts for this estimate are Julia Aman 
(for the Federal Deposit Insurance Company and the Office of 
the Comptroller of the Currency), Nathaniel Frentz (for the 
Federal Reserve), and Rachel Austin (for mandates). The 
estimate was reviewed by H. Samuel Papenfuss, Deputy Director 
of Budget Analysis.
                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

              New Budget Authority, Entitlement Authority,
                          and Tax Expenditures

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee adopts as its own the 
estimate of new 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 
1973.

                       Federal Mandates Statement

    Pursuant to section 423 of the Unfunded Mandates Reform 
Act, the Committee adopts as its own the estimate of the 
Federal mandates prepared by the Director of the Congressional 
Budget Office.

                      Advisory Committee Statement

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

                  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.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
Federal program, including any program that was included in a 
report to Congress pursuant to section 21 of the Public Law 
111-139 or the most recent Catalog of Federal Domestic 
Assistance.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section cites H.R. 4116 as the ``Systemic Risk 
Authority Transparency Act''.

Section 2. Bank failure transparency related to systemic risk exception

    This section amends section 13(c) of the Federal Deposit 
Insurance Act to require that the Comptroller General of the 
United States reviews and reports to Congress on the exercise 
of the systemic risk exception to the Federal Deposit Insurance 
Corporation's least cost resolution mandate for resolving 
failed insured depository institutions. An initial report is 
due within 60 days after a determination, and a follow-up 
report is due within 180 days of a determination.
    This section also requires that the appropriate Federal 
banking agency of an insured deposit institution about which a 
determination is made also submit a report to Congress within 
90 days of the determination, as well as a follow-up report 
within 210 days of the determination. The Federal banking 
agency report is required to include reports of examination and 
other supervisory information about the failed insured 
depository institution, as well as an assessment of the Federal 
banking agency's supervision of the failed insured depository 
institution.

         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 italics, and existing law in which no 
change is proposed is shown in roman):

                     FEDERAL DEPOSIT INSURANCE ACT



           *       *       *       *       *       *       *
  Sec. 13. (a) Investment of Corporation's Funds.--
          (1) Authority.--Funds held in the 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.
          (2) Limitation.--The Corporation shall not sell or 
        purchase any obligations described in paragraph (1) for 
        its own account, at any one time aggregating in excess 
        of $100,000, without the approval of the Secretary of 
        the Treasury. The Secretary may approve a transaction 
        or class of transactions subject to the provisions of 
        this paragraph under such conditions as the Secretary 
        may determine.
  (b) The depository accounts of the Corporation shall be kept 
with the Treasurer of the United States, or, with the approval 
of the Secretary of the Treasury, with a Federal Reserve bank, 
or with a depository institution designated as a depositary or 
fiscal agent of the United States: Provided, That the Secretary 
of the Treasury may waive the requirements of this subsection 
under such conditions as he may determine: And provided 
further, That this subsection shall not apply to the 
establishment and maintenance in any depository institution for 
temporary purposes of depository accounts not in excess of 
$50,000 in any one depository institution, or to the 
establishment and maintenance in any depository institution of 
any depository accounts to facilitate the payment of insured 
desposits, or the making of loans to, or the purchase of assets 
of, insured depository institutions. When designated for that 
purpose by the Secretary of the Treasury, the Corporation shall 
be a depositary of public moneys, except receipts from customs, 
under such regulations as may be prescribed by the said 
Secretary, and may also be employed as a financial agent of the 
Government. It shall perform all such reasonable duties as 
depositary of public moneys and financial agent of the 
Government as may be required of it.
  (c)(1) The Corporation is authorized, in its sole discretion 
and upon such terms and conditions as the Board of Directors 
may prescribe, to make loans to, to make deposits in, to 
purchase the assets or securities of, to assume the liabilities 
of, or to make contributions to, any insured depository 
institution--
          (A) if such action is taken to prevent the default of 
        such insured depository institution;
          (B) if, with respect to an insured bank in default, 
        such action is taken to restore such insured bank to 
        normal operation; or
          (C) if, when severe financial conditions exist which 
        threaten the stability of a significant number of 
        insured depository institutions or of insured 
        depository institutions possessing significant 
        financial resources, such action is taken in order to 
        lessen the risk to the Corporation posed by such 
        insured depository institution under such threat of 
        instability.
  (2)(A) In order to facilitate a merger or consolidation of 
another insured depository institution described in 
subparagraph (B) with another insured depository institution or 
the sale of any or all of the assets of such insured depository 
institution or the assumption of any or all of such insured 
depository institution's liabilities by another insured 
depository institution, or the acquisition of the stock of such 
insured depository institution, the Corporation is authorized, 
in its sole discretion and upon such terms and conditions as 
the Board of Directors may prescribe--
          (i) to purchase any such assets or assume any such 
        liabilities;
          (ii) to make loans or contributions to, or deposits 
        in, or purchase the securities of, such insured 
        institution or the company which controls or will 
        acquire control of such insured institution;
          (iii) to guarantee such insured institution or the 
        company which controls or will acquire control of such 
        insured institution against loss by reason of such 
        insured institution's merging or consolidating with or 
        assuming the liabilities and purchasing the assets of 
        such insured depository institution or by reason of 
        such company acquiring control of such insured 
        depository institution; or
          (iv) to take any combination of the actions referred 
        to in subparagraphs (i) through (iii).
  (B) For the purpose of subparagraph (A), the insured 
depository institution must be an insured depository 
institution--
          (i) which is in default;
          (ii) which, in the judgment of the Board of 
        Directors, is in danger of default; or
          (iii) which, when severe financial conditions exist 
        which threaten the stability of a significant number of 
        insured depository institutions or of insured 
        depository institutions possessing significant 
        financial resources, is determined by the Corporation, 
        in its sole discretion, to require assistance under 
        subparagraph (A) in order to lessen the risk to the 
        Corporation posed by such insured depository 
        institution under such threat of instability.
          (C) Any action to which the Corporation is or becomes 
        a party by acquiring any asset or exercising any other 
        authority set forth in this section shall be stayed for 
        a period of 60 days at the request of the Corporation.
  (3) The Corporation may provide any person acquiring control 
of, merging with, consolidating with or acquiring the assets of 
an insured depository institution under subsection (f) or (k) 
of this section with such financial assistance as it could 
provide an insured institution under this subsection.
          (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) the Corporation determines that 
                        the exercise of such authority is 
                        necessary to meet the obligation of the 
                        Corporation to provide insurance 
                        coverage for the insured deposits in 
                        such institution; and
                          (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 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, the Corporation shall 
                comply with the following provisions:
                          (i) Present-value analysis; 
                        documentation required.--The 
                        Corporation shall--
                                  (I) evaluate alternatives on 
                                a present-value basis, using a 
                                realistic discount rate;
                                  (II) document that evaluation 
                                and the assumptions on which 
                                the evaluation is based, 
                                including any assumptions with 
                                regard to interest rates, asset 
                                recovery rates, asset holding 
                                costs, and payment of 
                                contingent liabilities; and
                                  (III) retain the 
                                documentation for not less than 
                                5 years.
                          (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.
                  (C) Time of determination.--
                          (i) General rule.--For purposes of 
                        this subsection, the determination of 
                        the costs of providing any assistance 
                        under paragraph (1) or (2) or any other 
                        provision of this section with respect 
                        to any depository institution shall be 
                        made as of the date on which the 
                        Corporation makes the determination to 
                        provide such assistance to the 
                        institution under this section.
                          (ii) Rule for liquidations.--For 
                        purposes of this subsection, the 
                        determination of the costs of 
                        liquidation of any depository 
                        institution shall be made as of the 
                        earliest of--
                                  (I) the date on which a 
                                conservator is appointed for 
                                such institution;
                                  (II) the date on which a 
                                receiver is appointed for such 
                                institution; or
                                  (III) the date on which the 
                                Corporation makes any 
                                determination to provide any 
                                assistance under this section 
                                with respect to such 
                                institution.
                  (D) Liquidation costs.--In determining the 
                cost of liquidating any depository institution 
                for the purpose of comparing the costs under 
                subparagraph (A) (with respect to such 
                institution), the amount of such cost may not 
                exceed the amount which is equal to the sum of 
                the insured deposits of such institution as of 
                the earliest of the dates described in 
                subparagraph (C), minus the present value of 
                the total net amount the Corporation reasonably 
                expects to receive from the disposition of the 
                assets of such institution in connection with 
                such liquidation.
                  (E) Deposit insurance 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 the 
                        Deposit Insurance Fund by protecting--
                                  (I) depositors for more than 
                                the insured portion of deposits 
                                (determined without regard to 
                                whether such institution is 
                                liquidated); or
                                  (II) creditors other than 
                                depositors.
                          (ii) Deadline for regulations.--The 
                        Corporation shall prescribe regulations 
                        to implement clause (i) not later than 
                        January 1, 1994, and the regulations 
                        shall take effect not later than 
                        January 1, 1995.
                          (iii) Purchase and assumption 
                        transactions.--No provision of this 
                        subparagraph shall be construed as 
                        prohibiting the Corporation from 
                        allowing any person who acquires any 
                        assets or assumes any liabilities of 
                        any insured depository institution for 
                        which the Corporation has been 
                        appointed conservator or receiver to 
                        acquire uninsured deposit liabilities 
                        of such institution so long as the 
                        insurance fund does not incur any loss 
                        with respect to such deposit 
                        liabilities in an amount greater than 
                        the loss which would have been incurred 
                        with respect to such liabilities if the 
                        institution had been liquidated.
                  (F) Discretionary determinations.--Any 
                determination which the Corporation may make 
                under this paragraph shall be made in the sole 
                discretion of the Corporation.
                  (G) Systemic risk.--
                          (i) Emergency determination by 
                        secretary of the treasury.--
                        Notwithstanding subparagraphs (A) and 
                        (E), if, upon the written 
                        recommendation of the Board of 
                        Directors (upon a vote of not less than 
                        two-thirds of the members of the Board 
                        of Directors) and the Board of 
                        Governors of the Federal Reserve System 
                        (upon a vote of not less than two-
                        thirds of the members of such Board), 
                        the Secretary of the Treasury (in 
                        consultation with the President) 
                        determines that--
                                  (I) the Corporation's 
                                compliance with subparagraphs 
                                (A) and (E) with respect to an 
                                insured depository institution 
                                for which the Corporation has 
                                been appointed receiver would 
                                have serious adverse effects on 
                                economic conditions or 
                                financial stability; and
                                  (II) any action or assistance 
                                under this subparagraph would 
                                avoid or mitigate such adverse 
                                effects,
                        the Corporation may take other action 
                        or provide assistance under this 
                        section for the purpose of winding up 
                        the insured depository institution for 
                        which the Corporation has been 
                        appointed receiver as necessary to 
                        avoid or mitigate such effects.
                          (ii) Repayment of loss.--
                                  (I) In general.--The 
                                Corporation shall recover the 
                                loss to the Deposit Insurance 
                                Fund arising from any action 
                                taken or assistance provided 
                                with respect to an insured 
                                depository institution under 
                                clause (i) from 1 or more 
                                special assessments on insured 
                                depository institutions, 
                                depository institution holding 
                                companies (with the concurrence 
                                of the Secretary of the 
                                Treasury with respect to 
                                holding companies), or both, as 
                                the Corporation determines to 
                                be appropriate.
                                  (II) Treatment of depository 
                                institution holding 
                                companies.--For purposes of 
                                this clause, sections 7(c)(2) 
                                and 18(h) shall apply to 
                                depository institution holding 
                                companies as if they were 
                                insured depository 
                                institutions.
                                  (III) Regulations.--The 
                                Corporation shall prescribe 
                                such regulations as it deems 
                                necessary to implement this 
                                clause. In prescribing such 
                                regulations, defining terms, 
                                and setting the appropriate 
                                assessment rate or rates, the 
                                Corporation shall establish 
                                rates sufficient to cover the 
                                losses incurred as a result of 
                                the actions of the Corporation 
                                under clause (i) and shall 
                                consider: the types of entities 
                                that benefit from any action 
                                taken or assistance provided 
                                under this subparagraph; 
                                economic conditions, the 
                                effects on the industry, and 
                                such other factors as the 
                                Corporation deems appropriate 
                                and relevant to the action 
                                taken or the assistance 
                                provided. Any funds so 
                                collected that exceed actual 
                                losses shall be placed in the 
                                Deposit Insurance Fund.
                          (iii) Documentation required.--The 
                        Secretary of the Treasury shall--
                                  (I) document any 
                                determination under clause (i); 
                                and
                                  (II) retain the documentation 
                                for review under clause (iv).
                          [(iv) GAO review.--The Comptroller 
                        General of the United States shall 
                        review and report to the Congress on 
                        any determination under clause (i), 
                        including--
                                  [(I) the basis for the 
                                determination;
                                  [(II) the purpose for which 
                                any action was taken pursuant 
                                to such clause; and
                                  [(III) the likely effect of 
                                the determination and such 
                                action on the incentives and 
                                conduct of insured depository 
                                institutions and uninsured 
                                depositors.]
                          (iv) GAO review.--
                                  (I) In general.--The 
                                Comptroller General of the 
                                United States shall, not later 
                                than later than 60 days after a 
                                determination is made under 
                                clause (i), and again 180 days 
                                thereafter, review and report 
                                to the Congress on the 
                                determination under clause (i), 
                                including--
                                          (aa) the basis for 
                                        the determination;
                                          (bb) the purpose for 
                                        which any action was 
                                        taken pursuant to such 
                                        clause;
                                          (cc) the likely 
                                        effect of the 
                                        determination and such 
                                        action on the 
                                        incentives and conduct 
                                        of insured depository 
                                        institutions and 
                                        uninsured depositors;
                                          (dd) any 
                                        mismanagement by the 
                                        executives and board of 
                                        the insured depository 
                                        institution that 
                                        contributed to the 
                                        failure of the insured 
                                        depository institution;
                                          (ee) a review of the 
                                        compensation practices 
                                        of the insured 
                                        depository institution;
                                          (ff) any supervisory 
                                        or regulatory 
                                        shortcomings with 
                                        respect to the 
                                        appropriate Federal 
                                        banking agency of the 
                                        insured depository 
                                        institution;
                                          (gg) any actions 
                                        taken by the Federal 
                                        banking regulators, 
                                        Financial Stability 
                                        Oversight Council, 
                                        Treasury Department, 
                                        and other relevant 
                                        financial regulators in 
                                        relation to the failure 
                                        of the insured 
                                        depository institution; 
                                        and
                                          (hh) any additional 
                                        relevant entities or 
                                        activities that may 
                                        have contributed to the 
                                        failure of the insured 
                                        depository institution, 
                                        including with respect 
                                        to auditing, 
                                        accounting, credit 
                                        rating agencies, 
                                        investment bank 
                                        underwriters, and 
                                        emergency liquidity 
                                        options such as loans 
                                        from the Federal 
                                        reserve banks or 
                                        advances through the 
                                        Federal Home Loan Bank 
                                        system.
                                  (II) Rule of construction.--
                                Nothing in this clause or a 
                                report issued pursuant to this 
                                clause may be construed to 
                                limit the authority of a 
                                Federal agency to enforce 
                                violations of Federal statutes, 
                                rules, or orders.
                          (v) Notice.--
                                  (I) In general.--Not later 
                                than 3 days after making a 
                                determination under clause (i), 
                                the Secretary of the Treasury 
                                shall provide written notice of 
                                any determination under clause 
                                (i) to the Committee on 
                                Banking, Housing, and Urban 
                                Affairs of the Senate and the 
                                Committee on Banking, Finance 
                                and Urban Affairs of the House 
                                of Representatives.
                                  (II) Description of basis of 
                                determination.--The notice 
                                under subclause (I) shall 
                                include a description of the 
                                basis for any determination 
                                under clause (i).
                          (H) Rule of construction.--No 
                        provision of law shall be construed as 
                        permitting the Corporation to take any 
                        action prohibited by paragraph (4) 
                        unless such provision expressly 
                        provides, by direct reference to this 
                        paragraph, that this paragraph shall 
                        not apply with respect to such action.
  (5) The Corporation may not use its authority under this 
subsection to purchase the voting or common stock of an insured 
depository institution. Nothing in the preceding sentence shall 
be construed to limit the ability of the Corporation to enter 
into and enforce covenants and agreements that it determines to 
be necessary to protect its financial interest.
  (6)(A) During any period in which an insured depository 
institution has received assistance under this subsection and 
such assistance is still outstanding, such insured depository 
institution may defer the payment of any State or local tax 
which is determined on the basis of the deposits held by such 
insured depository institution or of the interest or dividends 
paid on such deposits.
  (B) When such insured depository institution no longer has 
any outstanding assistance, such insured depository institution 
shall pay all taxes which were deferred under subparagraph (A). 
Such payments shall be made in accordance with a payment plan 
established by the Corporation, after consultation with the 
applicable State and local taxing authorities.
  (7) The transfer of any assets or liabilities associated with 
any trust business of an insured depository institution in 
default under subparagraph (2)(A) shall be effective without 
any State or Federal approval, assignment, or consent with 
respect thereto.
          (8) Assistance before appointment of conservator or 
        receiver.--
                  (A) In general.--Subject to the least-cost 
                provisions of paragraph (4), the Corporation 
                shall consider providing direct financial 
                assistance under this section for depository 
                institutions before the appointment of a 
                conservator or receiver for such institution 
                only under the following circumstances:
                          (i) Troubled condition criteria.--The 
                        Corporation determines--
                                  (I) grounds for the 
                                appointment of a conservator or 
                                receiver exist or likely will 
                                exist in the future unless the 
                                depository institution's 
                                capital levels are increased; 
                                and
                                  (II) it is unlikely that the 
                                institution can meet all 
                                currently applicable capital 
                                standards without assistance.
                          (ii) Other criteria.--The depository 
                        institution meets the following 
                        criteria:
                                  (I) The appropriate Federal 
                                banking agency and the 
                                Corporation have determined 
                                that, during such period of 
                                time preceding the date of such 
                                determination as the agency or 
                                the Corporation considers to be 
                                relevant, the institution's 
                                management has been competent 
                                and has complied with 
                                applicable laws, rules, and 
                                supervisory directives and 
                                orders.
                                  (II) The institution's 
                                management did not engage in 
                                any insider dealing, 
                                speculative practice, or other 
                                abusive activity.
                  (B) Public disclosure.--Any determination 
                under this paragraph to provide assistance 
                under this section shall be made in writing and 
                published in the Federal Register.
  (9) Any assistance provided under this subsection may be in 
subordination to the rights of depositors and other creditors.
  (10) In its annual report to the Congress, the Corporation 
shall report the total amount it has saved, or estimates it has 
saved, by exercising the authority provided in this subsection.
          (11) Unenforceability of certain agreements.--No 
        provision contained in any existing or future 
        standstill, confidentiality, or other agreement that, 
        directly or indirectly--
                  (A) affects, restricts, or limits the ability 
                of any person to offer to acquire or acquire,
                  (B) prohibits any person from offering to 
                acquire or acquiring, or
                  (C) prohibits any person from using any 
                previously disclosed information in connection 
                with any such offer to acquire or acquisition 
                of,
        all or part of any insured depository institution, 
        including any liabilities, assets, or interest therein, 
        in connection with any transaction in which the 
        Corporation exercises its authority under section 11 or 
        13, shall be enforceable against or impose any 
        liability on such person, as such enforcement or 
        liability shall be contrary to public policy.
          (12) Appropriate federal banking agency report.--
                  (A) In general.--The appropriate Federal 
                banking agency of an insured depository 
                institution about which a determination is made 
                under paragraph (4)(G)(i) shall, not later than 
                90 days after the date of such determination, 
                and again 210 days thereafter, submit a report 
                to the Congress that discloses the following:
                          (i) Subject to such redactions as the 
                        appropriate Federal banking agency 
                        determines appropriate of personally 
                        identifiable information about 
                        customers and other financial 
                        institutions (as such term is defined 
                        under section 11(e)(9)(D)), all--
                                  (I) reports of examination 
                                and inspection that relate to 
                                the failed insured depository 
                                institution in the previous 3-
                                year period;
                                  (II) formal communications of 
                                a material supervisory 
                                determination conveyed to the 
                                failed insured depository 
                                institution in the previous 3-
                                year period; and
                                  (III) any additional exam 
                                reports and correspondence that 
                                the appropriate Federal banking 
                                agency determines may be 
                                relevant to the failure of the 
                                insured depository institution.
                          (ii) An examination of any 
                        mismanagement by the executives and 
                        board of the insured depository 
                        institution that contributed to the 
                        failure of the insured depository 
                        institution.
                          (iii) Any supervisory or regulatory 
                        shortcomings by such appropriate 
                        Federal banking agency with respect to 
                        the insured depository institution.
                          (iv) Any dynamics that the 
                        appropriate Federal banking agency 
                        determines may have contributed to the 
                        failure of the insured depository 
                        institution.
                          (v) Any supervisory, regulatory, and 
                        legislative recommendations such 
                        appropriate Federal banking agency may 
                        have to improve the safety and 
                        soundness of similarly situated insured 
                        depository institutions, the banking 
                        system, and financial stability.
                  (B) Protection of sensitive information.--
                          (i) Effect on privilege.--The 
                        provision of any information by a 
                        Federal banking agency under this 
                        paragraph may not be construed as--
                                  (I) waiving, destroying, or 
                                otherwise affecting any 
                                privilege applicable to the 
                                information; or
                                  (II) waiving any exemption 
                                applicable to the information 
                                under section 552 of title 5 
                                United States Code (commonly 
                                known as the ``Freedom of 
                                Information Act'').
                          (ii) Transparency.--
                                  (I) In general.--A Federal 
                                banking agency shall publish 
                                materials contained in a report 
                                required under subparagraph (A) 
                                to the fullest extent possible 
                                to promote transparency.
                                  (II) Consultation on omitting 
                                materials.--If a Federal 
                                banking agency determines 
                                particular materials described 
                                under subclause (I) should not 
                                be published, the Federal 
                                banking agency shall consult 
                                with the chair and ranking 
                                member of the Committee on 
                                Financial Services of the House 
                                of Representatives and the 
                                chair and ranking member of the 
                                Committee on Banking, Housing, 
                                and Urban Affairs of the 
                                Senate.
                                  (III) Omitting materials.--
                                If, after the consultation 
                                required under subclause (II), 
                                the Federal banking agency 
                                determines there is a 
                                substantial public interest in 
                                not publishing such materials, 
                                the Federal banking agency 
                                shall provide those materials 
                                to the Committee on Financial 
                                Services of the House of 
                                Representatives and the 
                                Committee on Banking, Housing, 
                                and Urban Affairs of the Senate 
                                with a written explanation 
                                describing the reasons for not 
                                publishing those materials.
                          (iii) Privilege.--For purposes of 
                        this subparagraph, the term 
                        ``privilege'' includes any work-
                        product, attorney-client, or other 
                        privilege recognized under Federal or 
                        State law.
                  (C) Report extension.--A Federal banking 
                agency may extend a deadline described under 
                subparagraph (A) for an additional 60 days, if 
                the Federal banking agency--
                          (i) faces ongoing circumstances that 
                        require the Federal banking agency to 
                        prioritize activities to promote 
                        stability of the U.S. banking system; 
                        and
                          (ii) notifies the Congress of such 
                        extension and the reasons for such 
                        extension.
                  (D) Consolidated reports.--A Federal banking 
                agency may consolidate multiple reports 
                required under this paragraph so long as the 
                individual reports being consolidated all meet 
                the timing requirements under this paragraph.
                  (E) Rule of construction.--Nothing in this 
                paragraph or reports or materials provided 
                pursuant to this paragraph may be construed to 
                limit the authority of a Federal agency to 
                enforce violations of Federal statutes, rules, 
                or orders.
  (d) Sale of Assets to Corporation.--
          (1) In general.-Any conservator, receiver, or 
        liquidator appointed for any insured depository 
        institution in default, including the Corporation 
        acting in such capacity, shall be entitled to offer the 
        assets of such depository institutions for sale to the 
        Corporation or as security for loans from the 
        Corporation.
          (2) Proceeds.--The proceeds of every sale or loan of 
        assets to the Corporation shall be utilized for the 
        same purposes and in the same manner as other funds 
        realized from the liquidation of the assets of such 
        depository institutions.
          (3) Rights and powers of corporation.--
                  (A) In general.--With respect to any asset 
                acquired or liability assumed pursuant to this 
                section, the Corporation shall have all of the 
                rights, powers, privileges, and authorities of 
                the Corporation as receiver under sections 11 
                and 15(b).
                  (B) Rule of construction.--Such rights, 
                powers, privileges, and authorities shall be in 
                addition to and not in derogation of any 
                rights, powers, privileges, and authorities 
                otherwise applicable to the Corporation.
                  (C) Fiduciary responsibility.--In exercising 
                any right, power, privilege, or authority 
                described in subparagraph (A), the Corporation 
                shall continue to be subject to the fiduciary 
                duties and obligations of the Corporation as 
                receiver to claimants against the insured 
                depository institution in receivership.
                  (D) Disposition of assets.--In exercising any 
                right, power, privilege, or authority described 
                in subparagraph (A) regarding the sale or 
                disposition of assets sold to the Corporation 
                pursuant to paragraph (1), the Corporation 
                shall conduct its operations in a manner 
                which--
                          (i) maximizes the net present value 
                        return from the sale or disposition of 
                        such assets;
                          (ii) minimizes the amount of any loss 
                        realized in the resolution of cases;
                          (iii) ensures adequate competition 
                        and fair and consistent treatment of 
                        offerors;
                          (iv) prohibits discrimination on the 
                        basis of race, sex, or ethnic groups in 
                        the solicitation and consideration of 
                        offers; and
                          (v) maximizes the preservation of the 
                        availability and affordability of 
                        residential real property for low- and 
                        moderate-income individuals.
          (4) Loans.--The Corporation, in its discretion, may 
        make loans on the security of or may purchase and 
        liquidate or sell any part of the assets of an insured 
        depository institution which is now or may hereafter be 
        in default.
  (e) Agreements Against Interests of Corporation.--
          (1) In general.--No agreement which tends to diminish 
        or defeat the interest of the Corporation in any asset 
        acquired by it under this section or section 11, either 
        as security for a loan or by purchase or as receiver of 
        any insured depository institution, shall be valid 
        against the Corporation unless such agreement--
                  (A) is in writing,
                  (B) was executed by the depository 
                institution and any person claiming an adverse 
                interest thereunder, including the obligor, 
                contemporaneously with the acquisition of the 
                asset by the depository institution,
                  (C) was approved by the board of directors of 
                the depository institution or its loan 
                committee, which approval shall be reflected in 
                the minutes of said board or committee, and
                  (D) has been, continuously, from the time of 
                its execution, an official record of the 
                depository institution.
          (2) Exemptions from contemporaneous execution 
        requirement.--An agreement to provide for the lawful 
        collateralization of--
                  (A) deposits of, or other credit extension 
                by, a Federal, State, or local governmental 
                entity, or of any depositor referred to in 
                section 11(a)(2), including an agreement to 
                provide collateral in lieu of a surety bond;
                  (B) bankruptcy estate funds pursuant to 
                section 345(b)(2) of title 11, United States 
                Code;
                  (C) extensions of credit, including any 
                overdraft, from a Federal reserve bank or 
                Federal home loan bank; or
                  (D) one or more qualified financial 
                contracts, as defined in section 11(e)(8)(D),
        shall not be deemed invalid pursuant to paragraph 
        (1)(B) solely because such agreement was not executed 
        contemporaneously with the acquisition of the 
        collateral or because of pledges, delivery, or 
        substitution of the collateral made in accordance with 
        such agreement.
  (f) Assisted Emergency Interstate Acquisitions.--(1) This 
subsection shall apply only to an acquisition of an insured 
bank or a holding company by an out-of-State bank savings 
association or out-of-State holding company for which the 
Corporation provides assistance under subsection (c).
  (2)(A) Whenever an insured bank with total assets of 
$500,000,000 or more (as determined from its most recent report 
of condition) is in default, the Corporation, as receiver, may, 
in its discretion and upon such terms and conditions as the 
Corporation may determine, arrange the sale of assets of the 
closed bank and the assumption of the liabilities of the closed 
bank, including the sale of such assets to and the assumption 
of such liabilities by an insured depository institution 
located in the State where the closed bank was chartered but 
established by an out-of-State bank or holding company. Where 
otherwise lawfully required, a transaction under this 
subsection must be approved by the primary Federal or State 
supervisor of all parties thereto.
  (B)(i) Before making a determination to take any action under 
subparagraph (A), the Corporation shall consult the State bank 
supervisor of the State in which the insured bank in default 
was chartered.
  (ii) The State bank supervisor shall be given a reasonable 
opportunity, and in no event less than forty-eight hours, to 
object to the use of the provisions of this paragraph. Such 
notice may be provided by the Corporation prior to its 
appointment as receiver, but in anticipation of an impending 
appointment.
  (iii) If the State supervisor objects during such period, the 
Corporation may use the authority of this paragraph only by a 
vote of 75 percent of the Board of Directors. The Board of 
Directors shall provide to the State supervisor, as soon as 
practicable, a written certification of its determination.
  (3) Emergency Interstate Acquisitions of Insured Banks in 
Danger of Default.--
          (A) Acquisition of insured banks in danger of 
        default.--One or more out-of-State banks or out-of-
        State holding companies may acquire and retain all or 
        part of the shares or assets of, or otherwise acquire 
        and retain--
                  (i) an insured bank in danger of default 
                which has total assets of $500,000,000 or more; 
                or
                  (ii) 2 or more affiliated insured banks in 
                danger of default which have aggregate total 
                assets of $500,000,000 or more, if the 
                aggregate total assets of such banks is equal 
                to or greater than 33 percent of the aggregate 
                total assets of all affiliated insured banks.
          (B) Acquisition of a holding company or other bank 
        affiliate.--If one or more out-of-State banks or out-
        of-State holding companies acquire 1 or more affiliated 
        insured banks under subparagraph (A) the aggregate 
        total assets of which is equal to or greater than 33 
        percent of the aggregate total assets of all affiliated 
        insured banks, any such out-of-State bank or out-of-
        State holding company may also, as part of the same 
        transaction, acquire and retain the shares or assets 
        of, or otherwise acquire and retain--
                  (i) the holding company which controls the 
                affiliated insured banks so acquired; or
                  (ii) any other affiliated insured bank.
          (C) Request for assistance by corporate board of 
        directors.--The Corporation may assist an acquisition 
        or merger authorized under subparagraph (A) only if the 
        board of directors or trustees of each insured bank in 
        danger of default which is being acquired has requested 
        in writing that the Corporation assist the acquisition 
        or merger.
          (D) Certain acquisitions authorized after assistance 
        is provided.--Notwithstanding paragraph (1), if--
                  (i) at any time after the date of the 
                enactment of the Financial Institutions 
                Emergency Acquisitions Amendments of 1987, the 
                Corporation provides any assistance under 
                subsection (c) to an insured bank; and
                  (ii) at the time such assistance is granted, 
                the insured bank, the holding company which 
                controls the insured bank (if any), or any 
                affiliated insured bank is eligible to be 
                acquired by an out-of-State bank or out-of-
                State holding company under this paragraph,
        the insured bank, the holding company, and such other 
        affiliated insured bank shall remain eligible, subject 
        to such terms and conditions as the Corporation (in the 
        Corporation's discretion) may impose, to be acquired by 
        an out-of-State bank or out-of-State holding company 
        under this paragraph as long as any portion of such 
        assistance remains outstanding.
          (E) State bank supervisor approval.--The Corporation 
        may take no final action in connection with any 
        acquisition under this paragraph unless the State bank 
        supervisor of the State in which the bank in danger of 
        default is located approves the acquisition.
          (F) Other requirements not affected.--This paragraph 
        does not affect any other requirement under Federal or 
        State law for regulatory approval of an acquisition 
        under this paragraph.
          (G) Acquisition may be conditioned on receipt of 
        consideration for corporation's assistance.--Any 
        acquisition described in subparagraph (D) may be 
        conditioned on the receipt of such consideration for 
        the Corporation's assistance as the Board of Directors 
        deems appropriate.
  (4)(A) Acquisitions Not Subject to Certain Other Laws.--
Section 3(d) of the Bank Holding Company Act of 1956, any 
provision of State law, and section 408(e)(3) of the National 
Housing Act shall not apply to prohibit any acquisition under 
paragraph (2) or (3), except that an out-of-State bank may make 
such an acquisition only if such ownership is otherwise 
specifically authorized.
  (B) Any subsidiary created by operation of this subsection 
may retain and operate any existing branch or branches of the 
institution merged with or acquired under paragraph (2) or (3), 
but otherwise shall be subject to the conditions upon which a 
national bank may establish and operate branches in the State 
in which such insured institution is located.
  (C) No insured institution acquired under this subsection 
shall after it is acquired move its principal office or any 
branch office which it would be prohibited from moving if the 
institution were a national bank.
  (D) Subsequent Nonemergency Interstate Acquisitions Subject 
to State Law.--
          (i) In general.--Any out-of-State bank holding 
        company which acquires control of an insured bank in 
        any State under paragraph (2) or (3) may acquire any 
        other insured bank and establish branches in such State 
        to the same extent as a bank holding company whose 
        insured bank subsidiaries' operations are principally 
        conducted in such State may acquire any other insured 
        bank or establish branches.
          (ii) Delayed date of applicability.--Clause (i) shall 
        not apply with respect to any out-of-State bank holding 
        company referred to in such clause before the earlier 
        of--
                  (I) the end of the 2-year period beginning on 
                the date the acquisition referred to in such 
                clause with respect to such company is 
                consummated; or
                  (II) the end of any period established under 
                State law during which such out-of-State bank 
                holding company may not be treated as a bank 
                holding company whose insured bank 
                subsidiaries' operations are principally 
                conducted in such State for purposes of 
                acquiring other insured banks or establishing 
                bank branches.
          (iii) Determination of principally conducted.--For 
        purposes of this subparagraph, the State in which the 
        operations of a holding company's insured bank 
        subsidiaries are principally conducted is the State 
        determined under section 3(d) of the Bank Holding 
        Company Act of 1956 with respect to such holding 
        company.
  (E) Certain State Interstate Banking Laws Inapplicable.--Any 
holding company which acquires control of any insured bank or 
holding company under paragraph (2) or (3) or subparagraph (D) 
of this paragraph shall not, by reason of such acquisition, be 
required under the law of any State to divest any other insured 
bank or be prevented from acquiring any other bank or holding 
company.
  (5) In determining whether to arrange a sale of assets and 
assumption of liabilities or an acquisition or a merger under 
the authority of paragraph (2) or (3), the Corporation may 
solicit such offers or proposals as are practicable from any 
prospective purchasers or merger partners it determines, in its 
sole discretion, are both qualified and capable of acquiring 
the assets and liabilities of the bank in default or the bank 
in danger of default.
  (6)(A) If, after receiving offers, the offer presenting the 
lowest expense to the Corporation, that is in a form and with 
conditions acceptable to the Corporation (hereinafter referred 
to as the ``lowest acceptable offer''), is from an offeror that 
is not an existing in-State bank of the same type as the bank 
that is in default or is in danger of default (or, where the 
bank is an insured bank other than a mutual savings bank, the 
lowest acceptable offer is not from an in-State holding 
company), the Corporation shall permit the offeror which made 
the initial lowest acceptable offer and each offeror who made 
an offer the estimated cost of which to the Corporation was 
within 15 per centum or $15,000,000, whichever is less, of the 
initial lowest acceptable offer to submit a new offer.
  (B) In considering authorizations under this subsection, the 
Corporation shall give consideration to the need to minimize 
the cost of financial assistance and to the maintenance of 
specialized depository institutions. The Corporation shall 
authorize transactions under this subsection considering the 
following priorities:
          (i) First, between depository institutions of the 
        same type within the same State.
          (ii) Second, between depository institutions of the 
        same type--
                  (I) in different States which by statute 
                specifically authorize such acquisitions; or
                  (II) in the absence of such statutes, in 
                different States which are contiguous.
          (iii) Third, between depository institutions of the 
        same type in different States other than the States 
        described in clause (ii).
          (iv) Fourth, between depository institutions of 
        different types in the same State.
          (v) Fifth, between depository institutions of 
        different types--
                  (I) in different States which by statute 
                specifically authorize such acquisitions; or
                  (II) in the absence of such statutes, in 
                different States which are contiguous.
          (vi) Sixth, between depository institutions of 
        different types in different States other than the 
        States described in clause (v).
  (C) Minority Bank Priority.--In the case of a minority-
controlled bank, the Corporation shall seek an offer from other 
minority-controlled banks before proceeding with the bidding 
priorities set forth in subparagraph (B).
  (D) In determining the cost of offers and reoffers, the 
Corporation's calculations and estimations shall be 
determinative. The Corporation may set reasonable time limits 
on offers and reoffers.
  (7) No sale may be made under the provisions of paragraph (2) 
or (3)--
          (A) which would result in a monopoly, or which would 
        be in furtherance of any combination or conspiracy to 
        monopolize or to attempt to monopolize the business of 
        banking in any part of the United States;
          (B) whose effect in any section of the country may be 
        substantially to lessen competition, or to tend to 
        create a monopoly, or which in any other manner would 
        be in restraint of trade, unless the Corporation finds 
        that the anticompetitive effects of the proposed 
        transactions are clearly outweighed in the public 
        interest by the probable effect of the transaction in 
        meeting the convenience and needs of the community to 
        be served; or
          (C) if in the opinion of the Corporation the 
        acquisition threatens the safety and soundness of the 
        acquirer or does not result in the future viability of 
        the resulting depository institution.
  (8) As used in this subsection--
          (A) the term ``in-State depository institution or in-
        State holding company'' means an existing insured 
        depository institution currently operating in the State 
        in which the bank in default or the bank in danger of 
        default is chartered or a company that is operating an 
        insured depository institution subsidiary in the State 
        in which the bank in default or the bank in danger of 
        default is chartered;
          (B) the term ``acquire'' means to acquire, directly 
        or indirectly, ownership or control through--
                  (i) an acquisition of shares;
                  (ii) an acquisition of assets or assumption 
                of liabilities;
                  (iii) a merger or consolidation; or
                  (iv) any similar transaction;
          (C) the term ``affiliated insured bank'' means--
                  (i) when used in connection with a reference 
                to a holding company, an insured bank which is 
                a subsidiary of such holding company; and
                  (ii) when used in connection with a reference 
                to 2 or more insured banks, insured banks which 
                are subsidiaries of the same holding company; 
                and
          (D) the term ``subsidiary'' has the meaning given to 
        such term in section 2(d) of the Bank Holding Company 
        Act of 1956.
  (9) No Assistance Authorized for Certain Subsidiaries of 
Holding Companies.--
          (A) In general.--The Corporation shall not provide 
        any assistance to a subsidiary, other than a subsidiary 
        that is an insured depository institution, of a holding 
        company in connection with any acquisition under this 
        subsection.
          (B) Intermediate holding company permitted.--This 
        paragraph does not prohibit an intermediate holding 
        company or an affiliate of an insured depository 
        institution from being a conduit for assistance 
        ultimately intended for an insured bank.
  (10) Annual Report.--
          (A) Required.--In its annual report to Congress the 
        Corporation shall include a report on the acquisitions 
        under this subsection during the preceding year.
          (B) Contents.--The report required under subparagraph 
        (A) shall contain the following information:
                  (i) The number of acquisitions under this 
                subsection.
                  (ii) A brief description of each such 
                acquisition and the circumstances under which 
                such acquisition occurred.
  (11) Determination of Total Assets.--For purposes of this 
subsection, the total assets of any insured bank shall be 
determined on the basis of the most recent report of condition 
of such bank which is available at the time of such 
determination.
          (12) Acquisition of minority bank by minority bank 
        holding company without regard to asset size.--
                  (A) In general.--For the purpose of ensuring 
                continued minority control of a minority-
                controlled bank, paragraphs (2) and (3) shall 
                apply with respect to the acquisition of a 
                minority-controlled bank by an out-of-State 
                minority-controlled depository institution or 
                depository institution holding company without 
                regard to the fact that the total assets of 
                such minority-controlled bank are less than 
                $500,000,000.
                  (B) Definitions.--For purposes of this 
                paragraph:
                          (i) Minority bank.--The term 
                        ``minority bank'' means any depository 
                        institution described in clause (i), 
                        (ii), or (iii) of section 19(b)(1)(A) 
                        of the Federal Reserve Act--
                                  (I) more than 50 percent of 
                                the ownership or control of 
                                which is held by one or more 
                                minority individuals; and
                                  (II) more than 50 percent of 
                                the net profit or loss of which 
                                accrues to minority 
                                individuals.
                          (ii) Minority.--The term ``minority'' 
                        means any Black American, Native 
                        American, Hispanic American, or Asian 
                        American.
  (g) Prior to July 1, 1951, the Corporation shall pay out of 
its capital account to the Secretary of the Treasury an amount 
equal to 2 per centum simple interest per annum on amounts 
advanced to the Corporation on stock subscriptions by the 
Secretary of the Treasury and the Federal Reserve banks, from 
the time of such advances until the amounts thereof were 
repaid. The amount payable hereunder shall be paid in two equal 
installments, the first installment to be paid prior to 
December 31, 1950.
  (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 Deposit Insurance Fund which the exercise of such 
powers would entail.
  (j) Loan Loss Amortization for Certain Banks.--
          (1) Eligibility.--The appropriate Federal banking 
        agency shall permit an agricultural bank to take the 
        actions referred to in paragraph (2) if it finds that--
                  (A) there is no evidence that fraud or 
                criminal abuse on the part of the bank led to 
                the losses referred to in paragraph (2); and
                  (B) the agricultural bank has a plan to 
                restore its capital, not later than the close 
                of the amortization period established under 
                paragraph (2), to a level prescribed by the 
                appropriate Federal banking agency.
          (2) Seven-year loss amortization.--(A) Any loss on 
        any qualified agricultural loan that an agricultural 
        bank would otherwise be required to show on its annual 
        financial statement for any year between December 31, 
        1983, and January 1, 1992, may be amortized on its 
        financial statements over a period of not to exceed 7 
        years, as provided in regulations issued by the 
        appropriate Federal banking agency.
          (B) An agricultural bank may reappraise any real 
        estate or other property, real or personal, that it 
        acquired coincident to the making of a qualified 
        agricultural loan and that it owned on January 1, 1983, 
        and any such additional property that it acquires prior 
        to January 1, 1992. Any loss that such bank would 
        otherwise be required to show on its annual financial 
        statements as the result of any such reappraisal may be 
        amortized on its financial statements over a period of 
        not to exceed 7 years, as provided in regulations 
        issued by the appropriate Federal banking agency.
          (3) Regulations.--Not later than 90 days after the 
        date of enactment of this subsection, the appropriate 
        Federal banking agency shall issue regulations 
        implementing this subsection with respect to banks that 
        it supervises, including regulations implementing the 
        capital restoration requirement of paragraph (1)(B).
          (4) Definitions.--As used in this subsection--
                  (A) the term ``agricultural bank'' means a 
                bank--
                          (i) the deposits of which are insured 
                        by the Federal Deposit Insurance 
                        Corporation;
                          (ii) which is located in an area the 
                        economy of which is dependent on 
                        agriculture;
                          (iii) which has assets of 
                        $100,000,000 or less; and
                          (iv) which has--
                                  (I) at least 25 percent of 
                                its total loans in qualified 
                                agricultural loans; or
                                  (II) fewer than 25 percent of 
                                its total loans in qualified 
                                agricultural loans but which 
                                the appropriate Federal banking 
                                agency or State bank 
                                commissioner recommends to the 
                                Corporation for eligibility 
                                under this section, or which 
                                the Corporation, on its motion, 
                                deems eligible; and
                  (B) the term ``qualified agricultural loan'' 
                means a loan made to finance the production of 
                agricultural products or livestock in the 
                United States, a loan secured by farmland or 
                farm machinery, or such other category of loans 
                as the appropriate Federal banking agency may 
                deem eligible.
          (5) Maintenance of portfolio.--As a condition of 
        eligibility under this subsection, the agricultural 
        bank must agree to maintain in its loan portfolio a 
        percentage of agricultural loans which is not lower 
        than the percentage of such loans in its loan portfolio 
        on January 1, 1986.
  (k) Emergency Acquisitions.--
          (1) In general.--
                  (A) Acquisitions authorized.--
                          (i) Transactions described.--
                        Notwithstanding any provision of State 
                        law, upon determining that severe 
                        financial conditions threaten the 
                        stability of a significant number of 
                        savings associations, or of savings 
                        associations possessing significant 
                        financial resources, the Corporation, 
                        in its discretion and if it determines 
                        such authorization would lessen the 
                        risk to the Corporation, may 
                        authorize--
                                  (I) a savings association 
                                that is eligible for assistance 
                                pursuant to subsection (c) to 
                                merge or consolidate with, or 
                                to transfer its assets and 
                                liabilities to, any other 
                                savings association or any 
                                insured bank,
                                  (II) any other savings 
                                association to acquire control 
                                of such savings association, or
                                  (III) any company to acquire 
                                control of such savings 
                                association or to acquire the 
                                assets or assume the 
                                liabilities thereof.
                        The Corporation may not authorize any 
                        transaction under this subsection 
                        unless the Corporation determines that 
                        the authorization will not present a 
                        substantial risk to the safety or 
                        soundness of the savings association to 
                        be acquired or any acquiring entity.
                          (ii) Terms of transactions.--Mergers, 
                        consolidations, transfers, and 
                        acquisitions under this subsection 
                        shall be on such terms as the 
                        Corporation shall provide.
                          (iii) Approval by appropriate 
                        agency.--Where otherwise required by 
                        law, transactions under this subsection 
                        must be approved by the appropriate 
                        Federal banking agency of every party 
                        thereto.
                          (iv) Acquisitions by savings 
                        associations.--Any Federal savings 
                        association that acquires another 
                        savings association pursuant to clause 
                        (i) may, with the concurrence of the 
                        Comptroller of the Currency, hold that 
                        savings association as a subsidiary 
                        notwithstanding the percentage 
                        limitations of section 5(c)(4)(B) of 
                        the Home Owners' Loan Act.S
                          (v) Dual service.--Dual service by a 
                        management official that would 
                        otherwise be prohibited under the 
                        Depository Institution Management 
                        Interlocks Act may, with the approval 
                        of the Corporation, continue for up to 
                        10 years.
                          (vi) Continued applicability of 
                        certain state restrictions.--Nothing in 
                        this subsection overrides or supersedes 
                        State laws restricting or limiting the 
                        activities of a savings association on 
                        behalf of another entity.
                  (B) Consultation with state official.--
                          (i) Consultation required.--Before 
                        making a determination to take any 
                        action under subparagraph (A), the 
                        Corporation shall consult the State 
                        official having jurisdiction of the 
                        acquired institution.
                          (ii) Period for state response.--The 
                        official shall be given a reasonable 
                        opportunity, and in no event less than 
                        48 hours, to object to the use of the 
                        provisions of this paragraph. Such 
                        notice may be provided by the 
                        Corporation prior to its appointment as 
                        receiver, but in anticipation of an 
                        impending appointment.
                          (iii) Approval over objection of 
                        state official.--If the official 
                        objects during such period, the 
                        Corporation may use the authority of 
                        this paragraph only by a vote of 75 
                        percent or more of the voting members 
                        of the Board of Directors. The 
                        Corporation shall provide to the 
                        official, as soon as practicable, a 
                        written certification of its 
                        determination.
          (2) Solicitation of offers.--
                  (A) In general.--In considering 
                authorizations under this subsection, the 
                Corporation may solicit such offers or 
                proposals as are practicable from any 
                prospective purchasers or merger partners it 
                determines, in its sole discretion, are both 
                qualified and capable of acquiring the assets 
                and liabilities of the savings association.
                  (B) Minority-controlled institutions.--In the 
                case of a minority-controlled depository 
                institution, the Corporation shall seek an 
                offer from other minority-controlled depository 
                institutions before seeking an offer from other 
                persons or entities.
          (3) Determination of costs.--In determining the cost 
        of offers under this subsection, the Corporation's 
        calculations and estimations shall be determinative. 
        The Corporation may set reasonable time limits on 
        offers.
          (4) Branching provisions.--
                  (A) In general.--If a merger, consolidation, 
                transfer, or acquisition under this subsection 
                involves a savings association eligible for 
                assistance and a bank or bank holding company, 
                a savings association may retain and operate 
                any existing branch or branches or any other 
                existing facilities. If the savings association 
                continues to exist as a separate entity, it may 
                establish and operate new branches to the same 
                extent as any savings association that is not 
                affiliated with a bank holding company and the 
                home office of which is located in the same 
                State.
                  (B) Restrictions.--
                          (i) In general.--Notwithstanding 
                        subparagraph (A), if--
                                  (I) a savings association 
                                described in such subparagraph 
                                does not have its home office 
                                in the State of the bank 
                                holding company bank 
                                subsidiary, and
                                  (II) such association does 
                                not qualify as a domestic 
                                building and loan association 
                                under section 7701(a)(19) of 
                                the Internal Revenue Code of 
                                1986, or does not meet the 
                                asset composition test imposed 
                                by subparagraph (C) of that 
                                section on institutions seeking 
                                so to qualify,
                        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 is located.
                          (ii) Transition period.--The 
                        Corporation, for good cause shown, may 
                        allow a savings association up to 2 
                        years to comply with the requirements 
                        of clause (i).
          (5) Assistance before appointment of conservator or 
        receiver.--
                  (A) Assistance proposals.--The Corporation 
                shall consider proposals by 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) Troubled condition criteria.--The 
                        Corporation determines--
                                  (I) that grounds for 
                                appointment of a conservator or 
                                receiver exist or likely will 
                                exist in the future unless the 
                                member's tangible capital is 
                                increased;
                                  (II) that it is unlikely that 
                                the member can achieve positive 
                                tangible capital without 
                                assistance; and
                                  (III) that providing 
                                assistance pursuant to the 
                                member's proposal would be 
                                likely to lessen the risk to 
                                the Corporation.
                          (ii) Other criteria.--The member 
                        meets the following criteria:
                                  (I) Before enactment of the 
                                Financial Institutions Reform, 
                                Recovery, and Enforcement Act 
                                of 1989, the member was solvent 
                                under applicable regulatory 
                                accounting principles but had 
                                negative tangible capital.
                                  (II) The member's negative 
                                tangible capital position is 
                                substantially attributable to 
                                its participation in 
                                acquisition and merger 
                                transactions that were 
                                instituted by the Federal Home 
                                Loan Bank Board or the Federal 
                                Savings and Loan Insurance 
                                Corporation for supervisory 
                                reasons.
                                  (III) The member is a 
                                qualified thrift lender (as 
                                defined in section 10(m) of the 
                                Home Owners' Loan Act) or would 
                                be a qualified thrift lender if 
                                commercial real estate owned 
                                and nonperforming commercial 
                                loans acquired in acquisition 
                                and merger transactions that 
                                were instituted by the Federal 
                                Home Loan Bank Board or the 
                                Federal Savings and Loan 
                                Insurance Corporation for 
                                supervisory reasons were 
                                excluded from the member's 
                                total assets.
                                  (IV) The appropriate Federal 
                                banking agency has determined 
                                that the member's management is 
                                competent and has complied with 
                                applicable laws, rules, and 
                                supervisory directives and 
                                orders.
                                  (V) The member's management 
                                did not engage in insider 
                                dealing or speculative 
                                practices or other activities 
                                that jeopardized the member's 
                                safety and soundness or 
                                contributed to its impaired 
                                capital position.
                                  (VI) The member's offices are 
                                located in an economically 
                                depressed region.
                  (B) Corporation consideration of assistance 
                proposal.--If a member meets the requirements 
                of clauses (i) and (ii) of subparagraph (A), 
                the Corporation shall consider providing direct 
                financial assistance.
                  (C) Economically depressed region defined.--
                For purposes of this paragraph, the term 
                ``economically depressed region'' means any 
                geographical region which the Corporation 
                determines by regulation to be a region within 
                which real estate values have suffered serious 
                decline due to severe economic conditions, such 
                as a decline in energy or agricultural values 
                or prices.

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