Clerk session vote number: 399
Description: FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991
Bill summary: Federal Deposit Insurance Corporation Improvement Act of 1991 -
Title I: Safety and Soundness- Subtitle A: Deposit Insurance Funds
- Amends the Federal Deposit Insurance Act to increase from $5,000,000,000 to $30,000,000,000 the amount of credit available from the Treasury to the Federal Deposit Insurance Corporation (FDIC). Sets maximum limits upon the outstanding obligations of the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF). Directs the Comptroller General
to report quarterly to certain congressional committees regarding FDIC compliance with such obligation limitations. Mandates a repayment schedule as a prerequisite to any such borrowing. Requires the Secretary of the Treasury to submit a copy of such schedule to certain congressional committees and to consult with them regarding repayment terms.
Authorizes the FDIC to impose special assessments upon insured depository institutions (in addition to existing assessments) if emergency assessments are required and if they are allocated between the BIF and SAIF according to their respective needs. Sets forth guidelines the BIF must follow when borrowing from its members.
Subtitle B: Supervisory Reforms
- Prescribes guidelines for: (1) mandatory annual on-site examinations of all insured depository institutions; and (2) fiscal status reports from all insured depository institutions (except for certain small-sized insured depository institutions). Sets forth guidelines for assessments to cover FDIC costs of conducting examinations of insured depository institutions and their affiliates. Outlines the application procedure for deposit insurance.
Requires the FDIC to study and report to the Congress on ways to streamline Federal banking regulatory requirements.
Subtitle C: Accounting Reforms
- Mandates that: (1) the accounting principles applicable to all insured depository institutions be uniform and consistent with generally accepted accounting principles; (2) each appropriate Federal banking agency implement certain accounting principles (maintaining uniform accounting standards to use in determining compliance with statutory requirements of insured depository institutions); and (3) each appropriate Federal banking agency report annually to certain congressional committees on any differences between its accounting or capital standards and those used by other agencies.
Requires each insured depository institution to include in its annual status report the total number and aggregate dollar amount of its outstanding loans to specified small businesses and farms. Exempts certain small-sized depository institutions from this requirement.
Amends the Federal Deposit Insurance Act to require that certain-sized large institutions engaged in interstate banking submit reports of financial conditions, including specified aspects of loan data for each State in which such institutions maintain branches.
Subtitle D: Prompt Regulatory Action
- Requires each appropriate Federal banking agency and the FDIC to prescribe regulations for implementation of a prompt regulatory action system which includes: (1) uniform standards; (2) minimum capital requirements; (3) deadlines for submission and review of capital restoration plans; (4) standards for safety and soundness; and (5) asset growth guidelines. Sets capital distribution restrictions for any insured depository institution which does not meet all currently applicable capital standards after making such distribution. Requires undercapitalized depository institutions to submit capital restoration plans with specified contents. Sets forth regulatory guidelines and restrictions for depository institutions according to risk categories (including the appointment of conservators or receivers for national banks and Federal savings associations not in compliance with statutory capital standards).
Authorizes the FDIC Board of Directors to appoint the FDIC as sole conservator or receiver of an insured depository institution (after consultation with the appropriate Federal or State agency) after a determination that specified risk conditions have been met.
Subtitle E: Least-Cost Resolution
- Mandates that FDIC assistance to troubled insured depository institutions be in accord with prescribed least-cost resolution guidelines to ensure that such assistance is the least costly of all possible methods to the affected deposit insurance fund. Mandates an annual General Accounting Office (GAO) audit of the FDIC and the Resolution Trust Corporation to determine compliance with such least-cost approach. Sets forth procedural guidelines with respect to: (1) creditors' claims; (2) data collection; (3) financial services industry impact analyses before resolution of a troubled insured depository institution; and (4) financial assistance prior to appointment of a receiver of conservator.
Amends the Federal Reserve Act to set forth limitations on advances by a Federal Reserve bank to an undercapitalized depository institution.
Amends the Federal Deposit Insurance Act to direct the FDIC upon providing assistance to a troubled institution to: (1) remove its board of directors; and (2) treat shareholders' claims with regard to such institution as if the institution were closed.
Subtitle F: Federal Insurance for State Chartered Depository Institutions
- Uniform Depositor Protection Act of 1991 - Sets a deadline by which State depository institutions or credit unions must obtain deposit insurance as a prerequisite to accepting deposits.
Subtitle G: Technical Corrections
- Amends the Federal Deposit Insurance Act to: (1) grant the FDIC all rights, powers, and duties to implement its duties with respect to the assets and liabilities of the Federal Savings and Loan Insurance Corporation (FSLIC) Resolution Fund; and (2) declare the FDIC successor to the FSLIC as conservator or receiver of certain depository institutions.
Title II: Regulatory Improvement - Subtitle A: Regulation of Foreign Banks
- Foreign Bank Supervision Enhancement Act of 1991 - Amends the International Banking Act of 1978 to prohibit a foreign bank from establishing any branch or agency in the United States without prior approval of the Board of Governors of the Federal Reserve System (the Board). Outlines approval and termination procedures. Authorizes the Board to examine each branch or agency of a foreign bank or foreign entities engaged in lending practices. Mandates annual on-site examinations of such entities and outlines a coordinated examination procedure with the Comptroller of the Currency and the FDIC. Prohibits foreign banks from establishing representative offices without the Board's prior approval.
Amends the Federal Deposit Insurance Act to require a financial institution to file a consolidated report with the appropriate Federal banking agency if the credit it extends (currently, if the loan or loans it makes) to an insured depository institution is secured by 25 percent or more of any class of shares of an insured depository institution.
Amends the International Banking Act of 1978 to authorize the Board, the Comptroller of the Currency, the FDIC, and the Director of the Office of Thrift Supervision to disclose to their foreign counterparts information obtained in the course of exercising supervisory or examination authority, subject to confidentiality requirements. Sets forth a civil money penalty schedule for violations of such Act by a foreign bank.
Amends the Bank Holding Company Act of 1956 to declare that consideration of a bank's managerial resources by the Board includes the competence, experience, and integrity of its officers, directors, and principal shareholders.
Subtitle B: Customer and Consumer Provisions
- Sets a deadline by which each appropriate Federal banking agency must submit to certain congressional committees recommendations with respect to reducing paperwork and improving the administration and enforcement of the Community Reinvestment Act of 1977. Directs GAO to study and report to the Congress on the examination processes used by Federal banking agencies to evaluate compliance with the Community Reinvestment Act of 1977.
Amends the Community Reinvestment Act of 1977 to require the appropriate Federal financial supervisory agency to consider and give credit for capital investment, loan participation, and other ventures undertaken by nonminority-owned and nonwomen-owned financial institutions with minority-and women-owned financial institutions and with low-income credit unions that help meet the credit needs of their local communities.
Amends the Equal Credit Opportunity Act to require specified Federal agencies to: (1) refer to the Attorney General any cases in which there is reason to believe that a pattern or practice of credit discrimination exists with respect to credit application denials or discouragement; and (2) notify the Secretary of Housing and Urban Development of those cases in which there is reason to believe that a violation of the Fair Housing Act has occurred.
Prohibits any appropriate Federal banking agency from requiring an institution to engage in data collection to fulfill Fair Housing Act requirements (other than under the Home Mortgage Disclosure Act).
Requires the Secretary of the Treasury and the head of each appropriate Federal banking agency to review and report to the Congress on laws and regulations which might adversely affect the capital position and profitability of insured depository institutions.
Amends the Expedited Funds Availability Act with respect to funds held beyond statutory schedules to mandate a one-year interval between required notices to the depositor.
Amends the Electronic Fund Transfer Act to proscribe: (1) any preauthorized electronic fund transfer from a consumer's account on the basis of any form of check negotiation by a consumer; or (2) treatment of any provision contained in a check received by a depository institution and negotiated by a consumer as constituting an electronic funds transfer authorization.
Amends the Expedited Funds Availability Act to make permanent the four-business days waiting period before a depositor may withdraw funds deposited at an automated teller machine owned or operated by a depository institution other than his own.
Amends the Federal Deposit Insurance Act to set forth notification and policy guidelines to be followed by an insured depository institution with respect to advance notice of branch closures.
Subtitle C: Bank Enterprise Act
- Bank Enterprise Act of 1991 - Directs the Board and the FDIC to establish minimum requirements according to prescribed criteria so that certain accounts providing basic consumer transaction services at insured depository institutions may qualify as lifeline accounts. Amends the Federal Deposit Insurance Act to provide that an insured depository institution's assessment rate with respect to such lifeline accounts shall be one-half the maximum rate. Sets forth assessment procedures.
Directs the Community Enterprise Assessment Credit Board (established by this Act) to issue guidelines according to specified criteria to determine community enterprise assessment credits for: (1) eligible insured depository institutions providing financial assistance to low- and moderate-income clients in distressed communities; (2) small business developers; and (3) nonprofit developers. Establishes the Community Enterprise Assessment Credit Board to establish procedures for accepting and considering applications by insured depository institutions for such assessment credits. Outlines the criteria under which an insured depository institution shall be treated as either a community development organization or a bank. Sets forth criteria for community development banks, organizations and corporations (thus making entities which meet such criteria eligible for specified insurance premium credits).
Title III: Federal Deposit Insurance Reform - Subtitle A: Activities
- Amends the Federal Deposit Insurance Act to authorize the FDIC to impose additional restrictions on certain troubled institutions with respect to: (1) the acceptance of brokered deposits; and (2) the acceptance, renewal, or rollover of funds obtained through any deposit broker. Prohibits a troubled institution from soliciting deposits by offering interest rates significantly higher than prevailing rates offered by other insured depository institutions on comparable deposits.
Sets an interim maximum assessment rate for BIF members until a risk-based assessment system has been established by the Board of Directors according to criteria prescribed by this Act. Directs the Board of Directors to analyze and report to the Congress the impact of a risk-based assessment system upon specified aspects of mortgage lending. Sets limitations upon insured State banks and their subsidiaries with respect to activities that are impermissible for national banks, including insurance underwriting and equity investments. Retains savings bank life insurance activities by certain insured banks in New York, Connecticut, or Massachusetts.
Prohibits an insured State bank, except in certain States, from acquiring or retaining any equity investment of a type or in an amount that is not permissible for a national bank. Authorizes the FDIC to require investment divestiture by an insured State bank if it determines that such investment will have an adverse effect on the safety and soundness of the bank.
Directs the FDIC to study, and consequently address, any risks posed to insurance funds by equity investments of insured banks.
Requires the appropriate Federal banking agencies to: (1) adopt joint uniform regulations prescribing standards for loans or extensions of credit by insured depository institutions that are secured by unimproved real estate or are made to finance construction; and (2) develop a system to monitor interest rate risk and adjust risk-based capital standards to reflect interest rate risk. Prescribes guidelines for the FDIC to take enforcement action against insured depository institutions and institution-affiliated parties. (Currently the FDIC is authorized to take such actions only against savings associations.)
Subtitle B: Coverage
- Treats as uninsured deposits bank investment contracts between an insured depository institution and an employee benefit plan that permit benefit-responsive withdrawals or transfers without penalty. Excludes such uninsured deposits from the assessment base of insured depository institutions. Sets a maximum ceiling for insured deposits at $100,000.00. Directs the FDIC to provide deposit insurance coverage for deposits accepted on a pass-through basis to employee benefit plan participants or beneficiaries. Terminates such coverage by a specified deadline if the depository institution has not met specified minimum capitalization requirements. Declares that certain self-directed individual retirement accounts shall be aggregated and insured up to $100,000 per participant per insured depository institution. Includes within such maximum coverage certain trust funds and interbank deposits by a fiduciary depository institution.
Requires the FDIC to study and report to the Congress on the cost and feasibility of tracking insured and uninsured deposits of any individual, and the exposure of the Federal Government with respect to all insured depository institutions. Requires the Federal Reserve Board to report to the FDIC the results of a survey conducted as part of such cost-benefit analysis regarding the ownership, dollar amount, and type of deposits held by individuals, including the type of financial institutions in which the deposit accounts are held.
Proscribes payments on foreign deposits by a Federal entity.
Amends the Federal Deposit Insurance Act and the Federal Credit Union Act to establish civil penalties for failure by an insured depository institution to make accurate certified statements of its assessment base, or of the amount of deposit insurance premium due.
Subtitle C: Demonstration Project and Studies
- Directs the FDIC to study and report to the Congress on the feasibility of: (1) authorizing insured depository institutions to offer both insured and uninsured deposit accounts to customers; and (2) establishing a private reinsurance system.
Subtitle D: Credit Unions
- Amends the Federal Credit Union Act to authorize the National Credit Union Administration Board to appoint itself as liquidating agency of any federally insured State credit union upon a determination that it is insolvent or bankrupt.
Subtitle E: FDIC Property Disposition
- Amends the Federal Deposit Insurance Act to establish the parameters for a three-year FDIC affordable housing program for very low-income, low-income, and moderate-income families (including single-family, multi-family, and condominium properties).
Directs the FDIC to establish an Affordable Housing Program Office to implement this Act. Directs the Secretary of Housing and Urban Development (HUD) to include in the HUD annual report to the Congress a detailed description of activities undertaken to implement this program.
Directs the FDIC and the RTC to coordinate with one another in carrying out their responsibilities under this program.
Title IV: Miscellaneous Provisions - Subtitle A: Payment System Risk Reduction
- Sets forth general netting rules and parameters to ensure that covered contractual payment obligations and entitlements between any two financial institutions or financial clearinghouses are netted pursuant to the conditions of applicable netting contracts.
Subtitle B: Right to Financial Privacy Act of 1978
- Amends the Right to Financial Privacy Act of 1978 to authorize a Federal entity to transfer to the Department of Justice financial institution records for use in certain civil actions or criminal forfeiture actions regardless of whether such actions are also directed at a customer of the institution. States that such transfer does not constitute a waiver of any privilege pertaining to such records.
Subtitle C: Final Settlement Payment Procedure
- Amends the Federal Deposit Insurance Act to authorize the FDIC to settle uninsured and unsecured claims on an institution in receivership with a final settlement payment which must reflect an average of the FDIC's receivership recovery experience.
Subtitle D: Miscellaneous Committees, Studies, and Reports
- Establishes the Commission on the Thrift Industry to investigate and report to the President and certain congressional committees on the future status of the thrift industry. Terminates the Commission after submission of such report.
Establishes the Bank Insurance Fund Advisory Committee to submit an annual report to certain congressional committees regarding business conditions and regulatory matters affecting BIF members.
Requires the Federal Reserve Board, the FDIC, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, and the National Credit Union Administration to report to the Congress the results of a jointly conducted feasibility study on: (1) assessing Federal Reserve banks an amount equal to imputed earnings on reserves held at such banks by insured depository institutions; and (2) the likely effects of such assessments upon the Federal banking and insurance fund system.
Establishes the Depository Institutions Reform Advisory Committee to report to the President, each House of Congress, the SEC and each appropriate Federal banking agency, on: (1) the current regulatory and supervisory scheme for financial institutions; (2) ways to ensure the safe and sound operation of depository institutions; and (3) ways to minimize losses to the deposit insurance funds. Terminates the Committee after submission of its report.
Directs the Comptroller General to report to the Congress by a specified deadline regarding the effects of requiring insured depository institutions to cash Federal Government checks in areas with a disproportionately high Federal worker client base.
Amends the Federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to provide that the Federal Advisory Committee Act does not apply to the Credit Standards Advisory Board (thus giving such Board permanent status).
Subtitle E: Utilization of Private Sector
- Amends the Federal Deposit Insurance Act to direct the FDIC to utilize private sector resources if it determines that such course is beneficial in implementing its responsibilities. Requires the FDIC to present a semiannual status report to the Congress which includes specified information with respect to its assets and liabilities, and the assets and liabilities of institutions for which it is conservator or receiver.
Requires the FDIC and the Resolution Trust Corporation to implement procedures to: (1) minimize payments for legal, accounting, and investment banking services; and (2) provide diverse geographical representation of such services.
Subtitle F: Emergency Assistance for Rhode Island
- Directs the Secretary of the Treasury to guarantee the repayment of a specified amount borrowed by the State of Rhode Island (or the Depositors Economic Protection Corporation) in order to expedite the repayment of depositors at State-chartered banks and credit unions in receivership, and to facilitate the resolution of such receiverships. Sets forth guarantee terms.
Subtitle G: Qualified Thrift Lender Test Improvements
- Qualified Thrift Lender Reform Act of 1991 - Amends the Home Owners' Loan Act to provide that a savings association shall have the status of a qualified thrift lender if its qualified thrift investments continue to equal or exceed 70 percent of its portfolio assets on a monthly average basis in nine out of every 12 months. Increases from ten percent to 20 percent the amount of liquid assets which are excludable from a savings association's portfolio assets when determining the asset base against which qualified thrift investments are calculated. Modifies the definition of qualified thrift assets to include additional investments. Increases from five percent to ten percent the maximum percentage of allowable consumer loans.
Subtitle H: Prohibition on Entering Secrecy Agreements and Protective Orders
- Amends the Federal Deposit Insurance Act to prohibit the FDIC from entering into any agreement or approving any protective order which prohibits it from disclosing the settlement terms in an action for damages or restitution brought by it as conservator or receiver of an insured depository institution.
Subtitle I: Establishment of Capital Standard Requirement
- Mandates that Federal banking regulatory agencies establish minimum capital standards at least equal to the minimum capital requirements under all international accords on capital standards for financial institutions to which the United States has agreed.
Subtitle J: Bank and Thrift Employee Provisions
- Directs the FDIC in its capacity as a successor of a failed depository institution to: (1) continue group health plan coverage for the former employees of such institution in the same manner as the institution was obligated to provide such coverage; and (2) require any successor institution to continue to provide such health plan coverage in a like manner.
Subtitle K: Severability
- Sets forth severability provisions.
Subtitle L: Sense of the House of Representatives on the Credit Crisis
- Expresses the sense of the House of Representatives that immediate and coordinated action should be taken by the Congress and the President to arrest the credit crisis, and that efforts should be undertaken to: (1) remove barriers to pension funds seeking to invest in real estate; (3) consider the impact of risk-based capital standards on commercial and residential real estate; (4) end market-to-market liquidation appraisals; (5) encourage loan renewals; (6) communicate the supervisory policy to bank examiners in the field; and (7) modify the passive loss rules and encourage loan restructures.
Title V: Depository Institutions Conversions
- Amends the Federal Deposit Insurance Act to authorize any insured depository institution to participate in specified conversion transactions with the prior written approval of the responsible regulatory agency. Sets forth guidelines for assessments on deposits of the former depository institution (i.e., conversion). Permits certain interstate conversion transactions. Mandates expedited approval procedures with respect to an application by a State non-member insured bank to acquire another insured depository institution. Provides for allocation of insurance losses between the BIF and the SAIF in the event the depository institution resulting from the conversion transaction goes into or appears in danger of going into default.
Amends the Home Owners' Loan Act, the Bank Holding Company Act of 1956, and Federal banking law with respect to national banks to authorize bank mergers, consolidations and other acquisitions by Federal savings associations, national banks, and certain companies which control banks but are not statutorily treated as bank holding companies.
Title II (sic): Bank Reforms - Subtitle A: Nationwide Banking and Branching
- Amends the Bank Holding Company Act of 1956 to authorize interstate acquisitions and banking by a bank holding company or by a foreign bank. Preempts State law which prohibits such acquisitions under certain conditions.
Amends Federal banking law with respect to national banks to permit interstate branching by such banks (subject to election by each State of whether to permit or prohibit interstate branching within its borders).
Amends the Federal Deposit Insurance Act to authorize interstate branching by State banks (subject to election by each State of whether to permit or prohibit such interstate branching).
Amends the International Banking Act of 1978 to authorize interstate banking operations by foreign banks. Permits such banks which have a domestic subsidiary within the United States to establish Federal and State branches and agencies outside the home State.
Amends the Bank Holding Company Act of 1956 to permit a bank holding company to consolidate subsidiary banks located in more than one State into a single bank (subject to State branching prohibitions). Establishes minimum capital requirements as a prerequisite to interstate banking and branching activities.
Amends the Community Reinvestment Act of 1977 to mandate State-by-State evaluations by the appropriate Federal financial supervisory agency of the entire interstate institution's record of performance under the Act.
Proscribes interstate branching undertaken primarily for the purpose of deposit production. Mandates interstate branching guidelines to ensure that each interstate branch meets the credit needs of its community and market area.
Amends Federal banking law with respect to national banks to authorize State visitorial powers with respect to Federal depository institutions and credit unions for tax compliance purposes.
Subtitle B: Bank Insurance Sales Reform
- Amends the Bank Holding Company Act of 1956 to prohibit interstate insurance activities by bank subsidiaries of holding companies unless such activities in the nonchartering State are specifically authorized by its statutory language and not merely by implication. Permits the continuation of prior interstate insurance activities under specified circumstances.
Amends Federal banking law with respect to national banks to permit them to engage in insurance sales and solicitation activities in certain small-sized towns according to prescribed guidelines. Sets restrictions upon certain premium payment guarantees and title insurance activities by a national bank in such towns.
Subtitle C: Bank Real Estate Reform
- Amends the Bank Holding Act of 1956 to preclude real estate activities from being deemed so closely related to banking as to be a proper incident thereto.
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Bill titles: To require the least-cost resolution of insured depository institutions, to improve supervision and examinations, to provide additional resources to the Bank Insurance Fund, and for other purposes.
Links for more info on the vote: congress.gov