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115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-577
======================================================================
COMMUNITY BANK REPORTING RELIEF ACT
_______
February 23, 2018.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 4725]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 4725) to amend the Federal Deposit Insurance Act
to require short form call reports for certain depository
institutions, having considered the same, report favorably
thereon without amendment and recommend that the bill do pass.
Purpose and Summary
Introduced by Representative Randy Hultgren on December 21,
2017, H.R. 4725, the ``Community Bank Reporting Relief Act''
amends the Federal Deposit Insurance Act to require the
appropriate federal banking agencies (the Comptroller of the
Currency (OCC), Board of Governors of the Federal Reserve
System (Federal Reserve), or Federal Deposit Insurance
Corporation (FDIC)) to issue regulations that allow for reduced
reporting requirements for depository institutions--with less
than $5 billion in consolidated assets and that meet such other
criteria as agencies deem appropriate--when they make the first
and third report of condition for a year.
Background and Need for Legislation
All national banks, state member banks, insured state
nonmember banks, and savings associations are required--on a
recurring basis--to file Consolidated Reports of Condition and
Income, or ``Call Reports,'' with the Federal Financial
Institutions Examination Council (FFIEC) on the last day of
each quarter. The FFIEC is a formal interagency body empowered
to prescribe uniform principles, standards, and report forms
for federal examination of financial institutions. Banking
regulators including the OCC, the Federal Reserve, and the FDIC
are FFIEC member agencies.
Call reports are a primary source of data for banking
regulators and the public\1\ related to banks' financial
conditions. The FFIEC requires banks to report data on various
aspects of their operations and must use a standard format so
it can be easily compared to other banks. The Call report
collects basic financial data of commercial banks in the form
of a balance sheet, an income statement, and supporting
schedules. For example, the Report of Condition schedule
provides details on assets, liabilities, and capital accounts.
The Report of Income schedule provides details on income and
expenses. In addition, Call reports are the source of the most
current statistical data available to the financial regulators
to identify areas of focus for both on-site examinations and
off-site monitoring, and are used to calculate deposit
insurance assessments and semiannual assessment fees.
---------------------------------------------------------------------------
\1\Call reports can be publicly accessed at https://cdr.ffiec.gov/
public/.
---------------------------------------------------------------------------
The Call report form contains hundreds of individual items,
but the specific reporting requirements depend upon the size of
the financial institution, the nature of its activities, and
whether it has any foreign offices.
Smaller financial institutions argue that requirements to
report hundreds of data points on a semi-annual basis are
highly burdensome, as the reporting forms themselves contain
many items that do not apply to smaller institutions. In the
past year, the federal regulators have shown a willingness to
streamline Call reports; however some institutions believe that
the federal regulators need to extend additional regulatory
relief to small institutions.
For example, in a June 2017 report issued by the Treasury
Department pursuant to the President's Executive Order from
February 3, 2017, entitled, ``A Financial System That Creates
Economic Opportunities--Banks and Credit Unions,'' which
informs the Administration's perspective on regulating the
financial system, the Treasury Department stated:
Currently, the bank Call Report form is over 80 pages
and contains a substantial amount of data fields which
are not applicable to community banks and their
business model. The regulators have already taken steps
to simplify Call Reports for smaller banks (those with
under $1 billion in assets), but further changes are
needed. Treasury recommends that the regulators
continue to streamline current regulatory reporting
requirements for all community financial institutions.
Hearings
The Committee on Financial Services held a hearing
examining matters relating to H.R. 4725 on April 26, 2017 and
April 28, 2017.
Committee Consideration
The Committee on Financial Services met in open session on
January 18, 2018 and ordered H.R. 4725 to be reported favorably
by a recorded vote of 55 yeas to 0 nays (Record vote no. FC-
143), a quorum being present.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole recorded vote was on a motion by Chairman Hensarling to
report the bill favorably to the House without amendment. The
motion was agreed to by a recorded vote of 55 yeas to 0 nays
(Record vote no. FC-143), a quorum being present.
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 Committee states that H.R. 4725
would allow a reduced reporting requirement for depository
institutions meeting certain criteria when making the first and
third report of condition for a year.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of 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 1974.
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:
U.S. Congress,
Congressional Budget Office,
Washington, DC, February 13, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4725, the
Community Bank Reporting Relief Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sarah Puro.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 4725--Community Bank Reporting Relief Act
H.R. 4725 would permit banks and credit unions with assets
of less than $5 billion to reduce, from quarterly to
semiannually, the number of times each year they must file
information about their balance sheets with federal regulators.
Those institutions account for about 95 percent of financial
institutions but hold roughly 10 percent of industry assets.
The bill would require the federal banking regulators to write
regulations to implement the provision.
Using information from those regulators, CBO expects that
the provisions of H.R. 4725 would not significantly affect the
risk that the affected institutions would fail. As a result,
CBO estimates that enacting the bill would not significantly
affect outlays of the Federal Deposit Insurance Corporation
(FDIC) or the National Credit Union Administration (NCUA),
which incur costs when banks or credit unions fail. Costs
incurred by those entities are recorded in the budget as direct
spending.
Additional regulations developed under H.R. 4725 could
impose costs on the FDIC, the NCUA, the Office of the
Comptroller of the Currency (OCC), and the Federal Reserve.
However, CBO estimates that the cost to complete the
regulations would not be significant. Administrative costs
incurred by the FDIC, the NCUA, and the OCC are recorded in the
budget as increases in direct spending, but those agencies are
authorized to collect premiums and fees from insured depository
institutions to cover administrative expenses. Thus, CBO
expects that the net effect on direct spending would be
negligible. Administrative costs to the Federal Reserve are
reflected in the federal budget as a reduction in remittances
to the Treasury (which are recorded in the budget as revenues).
Because enacting H.R. 4725 could affect direct spending and
revenues, pay-as-you-go procedures apply. However as discussed
above, any such impacts would not be significant.
CBO estimates that enacting H.R. 4725 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
H.R. 4725 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contacts for this estimate are Sarah Puro
(for federal costs) and Nathaniel Frentz (for revenues). The
estimate was approved by H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
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 the 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
In compliance with 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: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, (115th Congress),
the following statement is made concerning directed
rulemakings: The Committee estimates that the bill requires one
directed rulemakings within the meaning of such section.
The rulemaking directs the FDIC, the NCUA, the OCC, and the
Federal Reserve to issue regulations to reduce, from quarterly
to semiannually, the number of times each year banks and credit
unions with assets of less than $5 billion must file
information about their balance sheets with federal regulators.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section cites H.R. 4725 as the ``Community Bank
Reporting Relief Act.''
Section 2. Short form call reports
This section amends the Federal Deposit Insurance Act to
direct federal banking agencies to issue regulations that allow
a reduced reporting requirement for depository institutions
with less than $5,000,000,000 in total consolidated assets, and
satisfying other criteria the appropriate Federal banking
agencies determine appropriate.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic and existing law in which no change
is proposed is shown in roman):
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 (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
FEDERAL DEPOSIT INSURANCE ACT
* * * * * * *
Sec. 7. (a)(1) Each insured State nonmember bank and each
foreign bank having an insured branch which is not a Federal
branch shall make to the Corporation reports of condition which
shall be in such form and shall contain such information as the
Board of Directors may require. Such reports shall be made to
the Corporation on the dates selected as provided in paragraph
(3) of this subsection and the deposit liabilities shall be
reported therein in accordance with and pursuant to paragraphs
(4) and (5) of this subsection. The Board of Directors may call
for additional reports of condition on dates to be fixed by it
and may call for such other reports as the Board may from time
to time require. Any such bank which (A) maintains procedures
reasonably adapted to avoid any inadvertent error and,
unintentionally and as a result of such an error, fails to make
or publish any report required under this paragraph, within the
period of time specified by the Corporation, or submits or
publishes any false or misleading report or information, or (B)
inadvertently transmits or publishes any report which is
minimally late, shall be subject to a penalty of not more than
$2,000 for each day during which such failure continues or such
false or misleading information is not corrected. Such bank
shall have the burden of proving that an error was inadvertent
and that a report was inadvertently transmitted or published
late. Any such bank which fails to make or publish any report
required under this paragraph, within the period of time
specified by the Corporation, or submits or publishes any false
or misleading report or information, in a manner not described
in the 2nd preceding sentence shall be subject to a penalty of
not more than $20,000 for each day during which such failure
continues or such false or misleading information is not
corrected. Notwithstanding the preceding sentence, if any such
bank knowingly or with reckless disregard for the accuracy of
any information or report described in such sentence submits or
publishes any false or misleading report or information, the
Corporation may assess a penalty of not more than $1,000,000 or
1 percent of total assets of such bank, whichever is less, per
day for each day during which such failure continues or such
false or misleading information is not corrected. Any penalty
imposed under any of the 4 preceding sentences shall be
assessed and collected by the Corporation in the manner
provided in subparagraphs (E), (F), (G), and (I) of section
8(i)(2) (for penalties imposed under such section) and any such
assessment (including the determination of the amount of the
penalty) shall be subject to the provisions of such section.
Any such bank against which any penalty is assessed under this
subsection shall be afforded an agency hearing if such bank
submits a request for such hearing within 20 days after the
issuance of the notice of assessment. Section 8(h) shall apply
to any proceeding under this paragraph.
(2)(A) The Corporation and, with respect to any State
depository institution, any appropriate State bank supervisor
for such institution, shall have access to reports of
examination made by, and reports of condition made to, the
Comptroller of the Currency, the Federal Housing Finance
Agency, any Federal home loan bank, or any Federal Reserve bank
and to all revisions of reports of condition made to any of
them, and they shall promptly advise the Corporation of any
revisons or changes in respect to deposit liabilities made or
required to be made in any report of condition. The Corporation
may accept any report made by or to any commission, board, or
authority having supervision of a depository institution, and
may furnish to the Comptroller of the Currency, to the Federal
Housing Finance Agency, to any Federal home loan bank, to any
Federal Reserve bank, and to any such commission, board, or
authority, reports of examinations made on behalf of, and
reports of condition made to, the Corporation.
(B) Additional reports.--The Board of Directors may
from time to time require any insured depository
institution to file such additional reports as the
Corporation, after consultation with the Comptroller of
the Currency and the Board of Governors of the Federal
Reserve System, as appropriate, may deem advisable for
insurance purposes.
(C) Data sharing with other agencies and persons.--In
addition to reports of examination, reports of
condition, and other reports required to be regularly
provided to the Corporation (with respect to all
insured depository institutions, including a depository
institution for which the Corporation has been
appointed conservator or receiver) or an appropriate
State bank supervisor (with respect to a State
depository institution) under subparagraph (A) or (B),
a Federal banking agency may, in the discretion of the
agency, furnish any report of examination or other
confidential supervisory information concerning any
depository institution or other entity examined by such
agency under authority of any Federal law, to--
(i) any other Federal or State agency or
authority with supervisory or regulatory
authority over the depository institution or
other entity;
(ii) any officer, director, or receiver of
such depository institution or entity; and
(iii) any other person that the Federal
banking agency determines to be appropriate.
(3) Each insured depository institution shall make to the
appropriate Federal banking agency 4 reports of condition
annually upon dates which shall be selected by the Chairman of
the Board of Directors, the Comptroller of the Currency, and
the Chairman of the Board of Governors of the Federal Reserve
System. The dates selected shall be the same for all insured
depository institutions, except that when any of said reporting
dates is a nonbusiness day for any depository institution, the
preceding business day shall be its reporting date. Such
reports of condition shall be the basis for the certified
statements to be filed pursuant to subsection (c). The deposit
liabilities shall be reported in said reports of condition in
accordance with and pursuant to paragraphs (4) and (5) of this
subsection, and such other information shall be reported
therein as may be required by the respective agencies. Each
said report of condition shall contain a declaration by the
president, a vice president, the cashier or the treasurer, or
by any other officer designated by the board of directors or
trustees of the reporting depository institution to make such
declaration, that the report is true and correct to the best of
his knowledge and belief. The correctness of said report of
conditions shall be attested by the signatures of at least two
directors or trustees of the reporting depository institution
other than the officer making such declaration, with a
declaration that the report has been examined by them and to
the best of their knowledge and belief is true and correct. At
the time of making said reports of condition each insured
depository institution shall furnish to the Corporation a copy
thereof containing such signed declaration and attestations.
Nothing herein shall preclude any of the foregoing agencies
from requiring the banks or savings associations under its
jurisdiction to make additional reports of condition at any
time.
(4) In the reports of condition required to be made by
paragraph (3) of this subsection, each insured depository
institution shall report the total amount of the liability of
the depository institution for deposits in the main office and
in any branch located in any State of the United States, the
District of Columbia, any Territory of the United States,
Puerto Rico, Guam, American Samoa, the Trust Territory of the
Pacific Islands, or the Virgin Islands, according to the
definition of the term ``deposit'' in and pursuant to
subsection (1) of section 3 of this Act, without any deduction
for indebtedness of depositors or creditors or any deduction
for cash items in the process of collection drawn on others
than the reporting depository institution: Provided, That the
depository institution in reporting such deposits may (i)
subtract from the deposit balance due to any depository
institution the deposit balance due from the same depository
institution (other than trust funds deposited by either
depository institution) and any cash items in the process of
collection due from or due to such depository institutions
shall be included in determining such net balance, except that
balances of time deposits of any depository institution and any
balances standing to the credit of private depository
institutions, of depository institutions in foreign countries,
of foreign branches of other American depository institutions,
and of American branches of foreign banks shall be reported
gross without any such subtraction, and (ii) exclude any
deposits received in any office of the depository institution
for deposit in any other office of the depository institution:
And provided further, That outstanding drafts (including
advices and authorizations to charge depository institution's
balance in another depository institution) drawn in the regular
course of business by the reporting depository institution on
depository institutions need not be reported as deposit
liabilities. The amount of trust funds held in the depository
institution's own trust department, which the reporting
depository institution keeps segregated and apart from its
general assets and does not use in the conduct of its business,
shall not be included in the total deposits in such reports,
but shall be separately stated in such reports. Deposits which
are accumulated for the payment of personal loans and are
assigned or pledged to assure payment of loans at maturity
shall not be included in the total deposits in such reports,
but shall be deducted from the loans for which such deposits
are assigned or pledged to assure repayment.
(5) The deposits to be reported on such reports of condition
shall be segregated between (i) time and savings deposits and
(ii) demand deposits. For this purpose, the time and savings
deposits shall consist of time certificates of deposit, time
deposits-open account and savings deposits; and demand deposits
shall consist of all deposits other than time and savings
deposits.
(6) Lifeline account deposits.--In the reports of
condition required to be reported under this
subsection, the deposits in lifeline accounts (as
defined in section 232(a)(3)(D) of the Bank Enterprise
Act of 1991) shall be reported separately.
(7) The Board of Directors, after consultation with the
Comptroller of the Currency and the Board of Governors of the
Federal Reserve System, may by regulation define the terms
``cash items'' and ``process of collection'', and shall
classify deposits as ``time,''``savings,'' and ``demand''
deposits, for the purposes of this section.
(8) In respect of any report required or authorized to be
supplied or published pursuant to this subsection or any other
provision of law, the Board of Directors or the Comptroller of
the Currency, as the case may be, may differentiate between
domestic banks and foreign banks to such extent as, in their
judgment, may be reasonably required to avoid hardship and can
be done without substantial compromise of insurance risk or
supervisory and regulatory effectiveness.
(9) Data collections.--In addition to or in
connection with any other report required under this
subsection, the Corporation shall take such action as
may be necessary to ensure that--
(A) each insured depository institution
maintains; and
(B) the Corporation receives on a regular
basis from such institution,
information on the total amount of all insured
deposits, preferred deposits, and uninsured deposits at
the institution. In prescribing reporting and other
requirements for the collection of actual and accurate
information pursuant to this paragraph, the Corporation
shall minimize the regulatory burden imposed upon
insured depository institutions that are well
capitalized (as defined in section 38) while taking
into account the benefit of the information to the
Corporation, including the use of the information to
enable the Corporation to more accurately determine the
total amount of insured deposits in each insured
depository institution for purposes of compliance with
this Act.
(10) A Federal banking agency may not, by regulation
or otherwise, designate, or require an insured
institution or an affiliate to designate, a corporation
as highly leveraged or a transaction with a corporation
as a highly leveraged transaction solely because such
corporation is or has been a debtor or bankrupt under
title 11, United States Code, if, after confirmation of
a plan of reorganization, such corporation would not
otherwise be highly leveraged.
(11) Streamlining reports of condition.--
(A) Review of information and schedules.--
Before the end of the 1-year period beginning
on the date of enactment of the Financial
Services Regulatory Relief Act of 2006 and
before the end of each 5-year period
thereafter, each Federal banking agency shall,
in conjunction with the other relevant Federal
banking agencies, review the information and
schedules that are required to be filed by an
insured depository institution in a report of
condition required under paragraph (3).
(B) Reduction or elimination of information
found to be unnecessary.--After completing the
review required by subparagraph (A), a Federal
banking agency, in conjunction with the other
relevant Federal banking agencies, shall reduce
or eliminate any requirement to file
information or schedules under paragraph (3)
(other than information or schedules that are
otherwise required by law) if the agency
determines that the continued collection of
such information or schedules is no longer
necessary or appropriate.
(12) Short form reporting.--
(A) In general.--The appropriate Federal
banking agencies shall issue regulations that
allow for a reduced reporting requirement for a
covered depository institution when the
institution makes the first and third report of
condition for a year, as required under
paragraph (3).
(B) Definition.--In this paragraph, the term
``covered depository institution'' means an
insured depository institution that--
(i) has less than $5,000,000,000 in
total consolidated assets; and
(ii) satisfies such other criteria as
the appropriate Federal banking
agencies determine appropriate.
(b) Assessments.--
(1) Risk-based assessment system.--
(A) Risk-based assessment system required.--
The Board of Directors shall, by regulation,
establish a risk-based assessment system for
insured depository institutions.
(B) Private reinsurance authorized.--In
carrying out this paragraph, the Corporation
may--
(i) obtain private reinsurance
covering not more than 10 percent of
any loss the Corporation incurs with
respect to an insured depository
institution; and
(ii) base that institution's
assessment (in whole or in part) on the
cost of the reinsurance.
(C) Risk-based assessment system defined.--
For purposes of this paragraph, the term
``risk-based assessment system'' means a system
for calculating a depository institution's
assessment based on--
(i) the probability that the Deposit
Insurance Fund will incur a loss with
respect to the institution, taking into
consideration the risks attributable
to--
(I) different categories and
concentrations of assets;
(II) different categories and
concentrations of liabilities,
both insured and uninsured,
contingent and noncontingent;
and
(III) any other factors the
Corporation determines are
relevant to assessing such
probability;
(ii) the likely amount of any such
loss; and
(iii) the revenue needs of the
Deposit Insurance Fund.
(D) Separate assessment systems.--The Board
of Directors may establish separate risk-based
assessment systems for large and small members
of the Deposit Insurance Fund.
(E) Information concerning risk of loss and
economic conditions.--
(i) Sources of information.--For
purposes of determining risk of losses
at insured depository institutions and
economic conditions generally affecting
depository institutions, the
Corporation shall collect information,
as appropriate, from all sources the
Board of Directors considers
appropriate, including reports of
condition, inspection reports, and
other information from all Federal
banking agencies, any information
available from State bank supervisors,
State insurance and securities
regulators, the Securities and Exchange
Commission (including information
described in section 35), the Secretary
of the Treasury, the Commodity Futures
Trading Commission, the Farm Credit
Administration, the Federal Trade
Commission, any Federal reserve bank or
Federal home loan bank, and other
regulators of financial institutions,
and any information available from
private economic, credit, or business
analysts.
(ii) Consultation with federal
banking agencies.--
(I) In general.--Except as
provided in subclause (II), in
assessing the risk of loss to
the Deposit Insurance Fund with
respect to any insured
depository institution, the
Corporation shall consult with
the appropriate Federal banking
agency of such institution.
(II) Treatment on aggregate
basis.--In the case of insured
depository institutions that
are well capitalized (as
defined in section 38) and, in
the most recent examination,
were found to be well managed,
the consultation under
subclause (I) concerning the
assessment of the risk of loss
posed by such institutions may
be made on an aggregate basis.
(iii) Rule of construction.--No
provision of this paragraph shall be
construed as providing any new
authority for the Corporation to
require submission of information by
insured depository institutions to the
Corporation.
(F) Modifications to the risk-based
assessment system allowed only after notice and
comment.--In revising or modifying the risk-
based assessment system at any time after the
date of the enactment of the Federal Deposit
Insurance Reform Act of 2005, the Board of
Directors may implement such revisions or
modification in final form only after notice
and opportunity for comment.
(2) Setting assessments.--
(A) In general.--The Board of Directors shall
set assessments for insured depository
institutions in such amounts as the Board of
Directors may determine to be necessary or
appropriate, subject to subparagraph (D).
(B) Factors to be considered.--In setting
assessments under subparagraph (A), the Board
of Directors shall consider the following
factors:
(i) The estimated operating expenses
of the Deposit Insurance Fund.
(ii) The estimated case resolution
expenses and income of the Deposit
Insurance Fund.
(iii) The projected effects of the
payment of assessments on the capital
and earnings of insured depository
institutions.
(iv) The risk factors and other
factors taken into account pursuant to
paragraph (1) under the risk-based
assessment system, including the
requirement under such paragraph to
maintain a risk-based system.
(v) Any other factors the Board of
Directors may determine to be
appropriate.
(D) Notice of assessments.--The Corporation
shall notify each insured depository
institution of that institution's assessment.
(E) Bank enterprise act requirement.--The
Corporation shall design the risk-based
assessment system so that, insofar as the
system bases assessments, directly or
indirectly, on deposits, the portion of the
deposits of any insured depository institution
which are attributable to lifeline accounts
established in accordance with the Bank
Enterprise Act of 1991 shall be subject to
assessment at a rate determined in accordance
with such Act.
(3) Designated reserve ratio.--
(A) Establishment.--
(i) In general.--Before the beginning
of each calendar year, the Board of
Directors shall designate the reserve
ratio applicable with respect to the
Deposit Insurance Fund and publish the
reserve ratio so designated.
(ii) Rulemaking requirement.--Any
change to the designated reserve ratio
shall be made by the Board of Directors
by regulation after notice and
opportunity for comment.
(B) Minimum reserve ratio.--The reserve ratio
designated by the Board of Directors for any
year may not be less than 1.35 percent of
estimated insured deposits, or the comparable
percentage of the assessment base set forth in
paragraph (2)(C).
(C) Factors.--In designating a reserve ratio
for any year, the Board of Directors shall--
(i) take into account the risk of
losses to the Deposit Insurance Fund in
such year and future years, including
historic experience and potential and
estimated losses from insured
depository institutions;
(ii) take into account economic
conditions generally affecting insured
depository institutions so as to allow
the designated reserve ratio to
increase during more favorable economic
conditions and to decrease during less
favorable economic conditions,
notwithstanding the increased risks of
loss that may exist during such less
favorable conditions, as determined to
be appropriate by the Board of
Directors;
(iii) seek to prevent sharp swings in
the assessment rates for insured
depository institutions; and
(iv) take into account such other
factors as the Board of Directors may
determine to be appropriate, consistent
with the requirements of this
subparagraph.
(D) Publication of proposed change in
ratio.--In soliciting comment on any proposed
change in the designated reserve ratio in
accordance with subparagraph (A), the Board of
Directors shall include in the published
proposal a thorough analysis of the data and
projections on which the proposal is based.
(E) DIF restoration plans.--
(i) In general.--Whenever--
(I) the Corporation projects
that the reserve ratio of the
Deposit Insurance Fund will,
within 6 months of such
determination, fall below the
minimum amount specified in
subparagraph (B)(ii) for the
designated reserve ratio; or
(II) the reserve ratio of the
Deposit Insurance Fund actually
falls below the minimum amount
specified in subparagraph
(B)(ii) for the designated
reserve ratio without any
determination under subclause
(I) having been made,
the Corporation shall establish and
implement a Deposit Insurance Fund
restoration plan within 90 days that
meets the requirements of clause (ii)
and such other conditions as the
Corporation determines to be
appropriate.
(ii) Requirements of restoration
plan.--A Deposit Insurance Fund
restoration plan meets the requirements
of this clause if the plan provides
that the reserve ratio of the Fund will
meet or exceed the minimum amount
specified in subparagraph (B)(ii) for
the designated reserve ratio before the
end of the 8-year period beginning upon
the implementation of the plan (or such
longer period as the Corporation may
determine to be necessary due to
extraordinary circumstances).
(iii) Restriction on assessment
credits.--As part of any restoration
plan under this subparagraph, the
Corporation may elect to restrict the
application of assessment credits
provided under subsection (e)(3) for
any period that the plan is in effect.
(iv) Limitation on restriction.--
Notwithstanding clause (iii), while any
restoration plan under this
subparagraph is in effect, the
Corporation shall apply credits
provided to an insured depository
institution under subsection (e)(3)
against any assessment imposed on the
institution for any assessment period
in an amount equal to the lesser of--
(I) the amount of the
assessment; or
(II) the amount equal to 3
basis points of the
institution's assessment base.
(v) Transparency.--Not more than 30
days after the Corporation establishes
and implements a restoration plan under
clause (i), the Corporation shall
publish in the Federal Register a
detailed analysis of the factors
considered and the basis for the
actions taken with regard to the plan.
(4) Depository institution required to maintain
assessment-related records.--Each insured depository
institution shall maintain all records that the
Corporation may require for verifying the correctness
of any assessment on the insured depository institution
under this subsection until the later of--
(A) the end of the 3-year period beginning on
the due date of the assessment; or
(B) in the case of a dispute between the
insured depository institution and the
Corporation with respect to such assessment,
the date of a final determination of any such
dispute.
(5) Emergency special assessments.--In addition to
the other assessments imposed on insured depository
institutions under this subsection, the Corporation may
impose 1 or more special assessments on insured
depository institutions in an amount determined by the
Corporation if the amount of any such assessment is
necessary--
(A) to provide sufficient assessment income
to repay amounts borrowed from the Secretary of
the Treasury under section 14(a) in accordance
with the repayment schedule in effect under
section 14(c) during the period with respect to
which such assessment is imposed;
(B) to provide sufficient assessment income
to repay obligations issued to and other
amounts borrowed from insured depository
institutions under section 14(d); or
(C) for any other purpose that the
Corporation may deem necessary.
(6) Community enterprise credits.--The Corporation
shall allow a credit against any semiannual assessment
to any insured depository institution which satisfies
the requirements of the Community Enterprise Assessment
Credit Board under section 233(a)(1) of the Bank
Enterprise Act of 1991 in the amount determined by such
Board by regulation.
(c) Certified Statements; Payments.--
(1) Certified statements required.--
(A) In general.--Each insured depository
institution shall file with the Corporation a
certified statement containing such information
as the Corporation may require for determining
the institution's assessment.
(B) Form of certification.--The certified
statement required under subparagraph (A)
shall--
(i) be in such form and set forth
such supporting information as the
Board of Directors shall prescribe; and
(ii) be certified by the president of
the depository institution or any other
officer designated by its board of
directors or trustees that to the best
of his or her knowledge and belief, the
statement is true, correct and
complete, and in accordance with this
Act and regulations issued hereunder.
(2) Payments required.--
(A) In general.--Each insured depository
institution shall pay to the Corporation the
assessment imposed under subsection (b).
(B) Form of payment.--The payments required
under subparagraph (A) shall be made in such
manner and at such time or times as the Board
of Directors shall prescribe by regulation.
(3) Newly insured institutions.--To facilitate the
administration of this section, the Board of Directors
may waive the requirements of paragraphs (1) and (2)
for the initial assessment period in which a depository
institution becomes insured.
(4) Penalty for failure to make accurate certified
statement.--
(A) First tier.--Any insured depository
institution which--
(i) maintains procedures reasonably
adapted to avoid any inadvertent error
and, unintentionally and as a result of
such an error, fails to submit the
certified statement under paragraph (1)
within the period of time required
under paragraph (1) or submits a false
or misleading certified statement; or
(ii) submits the statement at a time
which is minimally after the time
required in such paragraph,
shall be subject to a penalty of not more than
$2,000 for each day during which such failure
continues or such false and misleading
information is not corrected. The institution
shall have the burden of proving that an error
was inadvertent or that a statement was
inadvertently submitted late.
(B) Second tier.--Any insured depository
institution which fails to submit the certified
statement under paragraph (1) within the period
of time required under paragraph (1) or submits
a false or misleading certified statement in a
manner not described in subparagraph (A) shall
be subject to a penalty of not more than
$20,000 for each day during which such failure
continues or such false and misleading
information is not corrected.
(C) Third tier.--Notwithstanding
subparagraphs (A) and (B), if any insured
depository institution knowingly or with
reckless disregard for the accuracy of any
certified statement described in paragraph (1)
submits a false or misleading certified
statement under paragraph (1), the Corporation
may assess a penalty of not more than
$1,000,000 or not more than 1 percent of the
total assets of the institution, whichever is
less, per day for each day during which the
failure continues or the false or misleading
information in such statement is not corrected.
(D) Assessment procedure.--Any penalty
imposed under this paragraph shall be assessed
and collected by the Corporation in the manner
provided in subparagraphs (E), (F), (G), and
(I) of section 8(i)(2) (for penalties imposed
under such section) and any such assessment
(including the determination of the amount of
the penalty) shall be subject to the provisions
of such section.
(E) Hearing.--Any insured depository
institution against which any penalty is
assessed under this paragraph shall be afforded
an agency hearing if the institution submits a
request for such hearing within 20 days after
the issuance of the notice of the assessment.
Section 8(h) shall apply to any proceeding
under this subparagraph.
(d) Corporation Exempt From Apportionment.--Notwithstanding
any other provision of law, amounts received pursuant to any
assessment under this section and any other amounts received by
the Corporation shall not be subject to apportionment for the
purposes of chapter 15 of title 31, United States Code, or
under any other authority.
(e) Refunds, Dividends, and Credits.--
(1) Refunds of overpayments.--In the case of any
payment of an assessment by an insured depository
institution in excess of the amount due to the
Corporation, the Corporation may--
(A) refund the amount of the excess payment
to the insured depository institution; or
(B) credit such excess amount toward the
payment of subsequent assessments until such
credit is exhausted.
(2) Dividends from excess amounts in deposit
insurance fund.--
(A) Reserve ratio in excess of 1.5 percent of
estimated insured deposits.--If, at the end of
a calendar year, the reserve ratio of the
Deposit Insurance Fund exceeds 1.5 percent of
estimated insured deposits, the Corporation
shall declare the amount in the Fund in excess
of the amount required to maintain the reserve
ratio at 1.5 percent of estimated insured
deposits, as dividends to be paid to insured
depository institutions.
(B) Limitation.--The Board of Directors may,
in its sole discretion, suspend or limit the
declaration of payment of dividends under
subparagraph (A).
(C) Notice and opportunity for comment.--The
Corporation shall prescribe, by regulation,
after notice and opportunity for comment, the
method for the declaration, calculation,
distribution, and payment of dividends under
this paragraph
(3) One-time credit based on total assessment base at
year-end 1996.--
(A) In general.--Before the end of the 270-
day period beginning on the date of the
enactment of the Federal Deposit Insurance
Reform Act of 2005, the Board of Directors
shall, by regulation after notice and
opportunity for comment, provide for a credit
to each eligible insured depository institution
(or a successor insured depository
institution), based on the assessment base of
the institution on December 31, 1996, as
compared to the combined aggregate assessment
base of all eligible insured depository
institutions, taking into account such factors
as the Board of Directors may determine to be
appropriate.
(B) Credit limit.--The aggregate amount of
credits available under subparagraph (A) to all
eligible insured depository institutions shall
equal the amount that the Corporation could
collect if the Corporation imposed an
assessment of 10.5 basis points on the combined
assessment base of the Bank Insurance Fund and
the Savings Association Insurance Fund as of
December 31, 2001.
(C) Eligible insured depository institution
defined.--For purposes of this paragraph, the
term ``eligible insured depository
institution'' means any insured depository
institution that--
(i) was in existence on December 31,
1996, and paid a deposit insurance
assessment prior to that date; or
(ii) is a successor to any insured
depository institution described in
clause (i).
(D) Application of credits.--
(i) In general.--Subject to clause
(ii), the amount of a credit to any
eligible insured depository institution
under this paragraph shall be applied
by the Corporation, subject to
subsection (b)(3)(E), to the
assessments imposed on such institution
under subsection (b) that become due
for assessment periods beginning after
the effective date of regulations
prescribed under subparagraph (A).
(ii) Temporary restriction on use of
credits.--The amount of a credit to any
eligible insured depository institution
under this paragraph may not be applied
to more than 90 percent of the
assessments imposed on such institution
under subsection (b) that become due
for assessment periods beginning in
fiscal years 2008, 2009, and 2010.
(iii) Regulations.--The regulations
prescribed under subparagraph (A) shall
establish the qualifications and
procedures governing the application of
assessment credits pursuant to clause
(i).
(E) Limitation on amount of credit for
certain depository institutions.--In the case
of an insured depository institution that
exhibits financial, operational, or compliance
weaknesses ranging from moderately severe to
unsatisfactory, or is not adequately
capitalized (as defined in section 38) at the
beginning of an assessment period, the amount
of any credit allowed under this paragraph
against the assessment on that depository
institution for such period may not exceed the
amount calculated by applying to that
depository institution the average assessment
rate on all insured depository institutions for
such assessment period.
(F) Successor defined.--The Corporation shall
define the term ``successor'' for purposes of
this paragraph, by regulation, and may consider
any factors as the Board may deem appropriate.
(4) Administrative review.--
(A) In general.--The regulations prescribed
under paragraphs (2) and (3) shall include
provisions allowing an insured depository
institution a reasonable opportunity to
challenge administratively the amount of the
credit or dividend determined under paragraph
(2) or (3) for such institution.
(B) Administrative review.--Any review under
subparagraph (A) of any determination of the
Corporation under paragraph (2) or (3) shall be
final and not subject to judicial review.
(f) Any insured depository institution which fails to make
any report of condition under subsection (a) of this section or
to file any certified statement required to be filed by it in
connection with determining the amount of any assessment
payable by the depository institution to the Corporation may be
compelled to make such report or file such statement by
mandatory injunction or other appropriate remedy in a suit
brought for such purpose by the Corporation against the
depository institution and any officer or officers thereof in
any court of the United States of competent jurisdiction in the
District or Territory in which such depository institution is
located.
(g) Assessment Actions.--
(1) In general.--The Corporation, in any court of
competent jurisdiction, shall be entitled to recover
from any insured depository institution the amount of
any unpaid assessment lawfully payable by such insured
depository institution.
(2) Statute of limitations.--The following provisions
shall apply to actions relating to assessments,
notwithstanding any other provision in Federal law, or
the law of any State:
(A) Any action by an insured depository
institution to recover from the Corporation the
overpaid amount of any assessment shall be
brought within 3 years after the date the
assessment payment was due, subject to the
exception in subparagraph (E).
(B) Any action by the Corporation to recover
from an insured depository institution the
underpaid amount of any assessment shall be
brought within 3 years after the date the
assessment payment was due, subject to the
exceptions in subparagraphs (C) and (E).
(C) If an insured depository institution has
made a false or fraudulent statement with
intent to evade any or all of its assessment,
the Corporation shall have until 3 years after
the date of discovery of the false or
fraudulent statement in which to bring an
action to recover the underpaid amount.
(D) Except as provided in subparagraph (C),
assessment deposit information contained in
records no longer required to be maintained
pursuant to subsection (b)(4) shall be
considered conclusive and not subject to
change.
(E) Any action for the underpaid or overpaid
amount of any assessment that became due before
the amendment to this subsection under the
Federal Deposit Insurance Reform Act of 2005
took effect shall be subject to the statute of
limitations for assessments in effect at the
time the assessment became due.
(h) Should any national member bank or any insured national
nonmember bank fail to make any report of condition under
subsection (a) of this section or to file any certified
statement required to be filed by such bank under any provision
of this section, or fail to pay any assessment required to be
paid by such bank under any provision of this Act, and should
the bank not correct such failure within thirty days after
written notice has been given by the Corporation to an officer
of the bank, citing this subsection, and stating that the bank
has failed to make any report of condition under subsection (a)
of this section or to file or pay as required by law, all the
rights, privileges, and franchises of the bank granted to it
under the National Bank Act, as amended, the Federal Reserve
Act, as amended, or this Act, shall be thereby forfeited.
Whether or not the penalty provided in this subsection has been
incurred shall be determined and adjudged in the manner
provided in the sixth paragraph of section 2 of the Federal
Reserve Act, as amended. The remedies provided in this
subsection and in the two preceding subsections shall not be
construed as limiting any other remedies against any insured
depository institution, but shall be in addition thereto.
(i) Insurance of Trust Funds.--
(1) In general.--Trust funds held on deposit by an
insured depository institution in a fiduciary capacity
as trustee pursuant to any irrevocable trust
established pursuant to any statute or written trust
agreement shall be insured in an amount not to exceed
the standard maximum deposit insurance amount (as
determined under section 11(a)(1)) for each trust
estate.
(2) Interbank deposits.--Trust funds described in
paragraph (1) which are deposited by the fiduciary
depository institution in another insured depository
institution shall be similarly insured to the fiduciary
depository institution according to the trust estates
represented.
(3) Bank deposit financial assistance program.--
Notwithstanding paragraph (1), funds deposited by an
insured depository institution pursuant to the Bank
Deposit Financial Assistance Program of the Department
of Energy shall be separately insured in an amount not
to exceed the standard maximum deposit insurance amount
(as determined under section 11(a)(1)) for each insured
depository institution depositing such funds.
(4) Regulations.--The Board of Directors may
prescribe such regulations as may be necessary to
clarify the insurance coverage under this subsection
and to prescribe the manner of reporting and depositing
such trust funds.
(j)(1) No person, acting directly or indirectly or through or
in concert with one or more other persons, shall acquire
control of any insured depository institution through a
purchase, assignment, transfer, pledge, or other disposition of
voting stock of such insured depository institution unless the
appropriate Federal banking agency has been given sixty days'
prior written notice of such proposed acquisition and within
that time period the agency has not issued a notice
disapproving the proposed acquisition or, in the discretion of
the agency, extending for an additional 30 days the period
during which such a disapproval may issue.The period for
disapproval under the preceding sentence may be extended not to
exceed 2 additional times for not more than 45 days each time
if--
(A) the agency determines that any acquiring party
has not furnished all the information required under
paragraph (6);
(B) in the agency's judgment, any material
information submitted is substantially inaccurate;
(C) the agency has been unable to complete the
investigation of an acquiring party under paragraph
(2)(B) because of any delay caused by, or the
inadequate cooperation of, such acquiring party; or
(D) the agency determines that additional time is
needed--
(i) to investigate and determine that no
acquiring party has a record of failing to
comply with the requirements of subchapter II
of chapter 53 of title 31, United States Code;
or
(ii) to analyze the safety and soundness of
any plans or proposals described in paragraph
(6)(E) or the future prospects of the
institution.
An acquisition may be made prior to expiration of the
disapproval period if the agency issues written notice of its
intent not to disapprove the action.
(2)(A) Notice to State Agency.--Upon receiving any notice
under this subsection, the appropriate Federal banking agency
shall forward a copy thereof to the appropriate State
depository institution supervisory agency if the depository
institution the voting shares of which are sought to be
acquired is a State depository institution, and shall allow
thirty days within which the views and recommendations of such
State depository institution supervisory agency may be
submitted. The appropriate Federal banking agency shall give
due consideration to the views and recommendations of such
State agency in determining whether to disapprove any proposed
acquisition. Notwithstanding the provisions of this paragraph,
if the appropriate Federal banking agency determines that it
must act immediately upon any notice of a proposed acquisition
in order to prevent the probable default of the depository
institution involved in the proposed acquisition, such Federal
banking agency may dispense with the requirements of this
paragraph or, if a copy of the notice is forwarded to the State
depository institution supervisory agency, such Federal banking
agency may request that the views and recommendations of such
State depository institution supervisory agency be submitted
immediately in any form or by any means acceptable to such
Federal banking agency.
(B) Investigation of Principals Required.--Upon receiving any
notice under this subsection, the appropriate Federal banking
agency shall--
(i) conduct an investigation of the competence,
experience, integrity, and financial ability of each
person named in a notice of a proposed acquisition as a
person by whom or for whom such acquisition is to be
made; and
(ii) make an independent determination of the
accuracy and completeness of any information described
in paragraph (6) with respect to such person.
(C) Report.--The appropriate Federal banking agency shall
prepare a written report of any investigation under
subparagraph (B) which shall contain, at a minimum, a summary
of the results of such investigation. The agency shall retain
such written report as a record of the agency.
(D) Public Comment.--Upon receiving notice of a proposed
acquisition, the appropriate Federal banking agency shall,
unless such agency determines that an emergency exists, within
a reasonable period of time--
(i) publish the name of the insured depository
institution proposed to be acquired and the name of
each person identified in such notice as a person by
whom or for whom such acquisition is to be made; and
(ii) solicit public comment on such proposed
acquisition, particularly from persons in the
geographic area where the bank proposed to be acquired
is located, before final consideration of such notice
by the agency,
unless the agency determines in writing that such disclosure or
solicitation would seriously threaten the safety or soundness
of such bank.
(3) Within three days after its decision to disapprove any
proposed acquisition, the appropriate Federal banking agency
shall notify the acquiring party in writing of the disapproval.
Such notice shall provide a statement of the basis for the
disapproval.
(4) Within ten days of receipt of such notice of disapproval,
the acquiring party may request an agency hearing on the
proposed acquisition. In such hearing all issues shall be
determined on the record pursuant to section 554 of title 5,
United States Code. The length of the hearing shall be
determined by the appropriate Federal banking agency. At the
conclusion thereof, the appropriate Federal banking agency
shall by order approve or disapprove the proposed acquisition
on the basis of the record made at such hearing.
(5) Any person whose proposed acquisition is disapproved
after agency hearings under this subsection may obtain review
by the United States court of appeals for the circuit in which
the home office of the bank to be acquired is located, or the
United States Court of Appeals for the District of Columbia
Circuit, by filing a notice of appeal in such court within ten
days from the date of such order, and simultaneously sending a
copy of such notice by registered or certified mail to the
appropriate Federal banking agency. The appropriate Federal
banking agency shall promptly certify and file in such court
the record upon which the disapproval was based. The findings
of the appropriate Federal banking agency shall be set aside if
found to be arbitrary or capricious or if found to violate
procedures established by this subsection.
(6) Except as otherwise provided by regulation of the
appropriate Federal banking agency, a notice filed pursuant to
this subsection shall contain the following information:
(A) The identity, personal history, business
background and experience of each person by whom or on
whose behalf the acquisition is to be made, including
his material business activities and affiliations
during the past five years, and a description of any
material pending legal or administrative proceedings in
which he is a party and any criminal indictment or
conviction of such person by a State or Federal court.
(B) A statement of the assets and liabilities of each
person by whom or on whose behalf the acquisition is to
be made, as of the end of the fiscal year for each of
five fiscal years immediately preceding the date of the
notice, together with related statements of income and
source and application of funds for each of the fiscal
years then concluded, all prepared in accordance with
generally accepted accounting principles consistently
applied, and an interim statement of the assets and
liabilities for each such person, together with related
statements of income and source and application of
funds, as of a date not more than ninety days prior to
the date of the filing of the notice.
(C) The terms and conditions of the proposed
acquisition and the manner in which the acquisition is
to be made.
(D) The identity, source and amount of the funds or
other consideration used or to be used in making the
acquisition, and if any part of these funds or other
consideration has been or is to be borrowed or
otherwise obtained for the purpose of making the
acquisition, a description of the transaction, the
names of the parties, and any arrangements, agreements,
or understandings with such persons.
(E) Any plans or proposals which any acquiring party
making the acquisition may have to liquidate the bank,
to sell its assets or merge it with any company or to
make any other major change in its business or
corporate structure or management.
(F) The identification of any person employed,
retained, or to be compensated by the acquiring party,
or by any person on his behalf, to make solicitations
or recommendations to stockholders for the purpose of
assisting in the acquisition, and a brief description
of the terms of such employment, retainer, or
arrangement for compensation.
(G) Copies of all invitations or tenders or
advertisements making a tender offer to stockholders
for purchase of their stock to be used in connection
with the proposed acquisition.
(H) Any additional relevant information in such form
as the appropriate Federal banking agency may require
by regulation or by specific request in connection with
any particular notice.
(7) The appropriate Federal banking agency may disapprove any
proposed acquisition if--
(A) the proposed acquisition of control would result
in a monopoly or 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) the effect of the proposed acquisition of control
in any section of the country may be substantially to
lessen competition or to tend to create a monopoly or
the proposed acquisition of control would in any other
manner be in restraint of trade, and the
anticompetitive effects of the proposed acquisition of
control are not 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;
(C) either the financial condition of any acquiring
person or the future prospects of the institution is
such as might jeopardize the financial stability of the
bank or prejudice the interests of the depositors of
the bank;
(D) the competence, experience, or integrity of any
acquiring person or of any of the proposed management
personnel indicates that it would not be in the
interest of the depositors of the bank, or in the
interest of the public to permit such person to control
the bank;
(E) any acquiring person neglects, fails, or refuses
to furnish the appropriate Federal banking agency all
the information required by the appropriate Federal
banking agency; or
(F) the appropriate Federal banking agency determines
that the proposed transaction would result in an
adverse effect on the Deposit Insurance Fund.
(8) For the purposes of this subsection, the term--
(A) ``person'' means an individual or a corporation,
partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated
organization, or any other form of entity not
specifically listed herein; and
(B) ``control'' means the power, directly or
indirectly, to direct the management or policies of an
insured depository institution or to vote 25 per centum
or more of any class of voting securities of an insured
depository institution.
(9) Reporting of stock loans.--
(A) Report required.--Any foreign bank, or
any affiliate thereof, that has credit
outstanding to any person or group of persons
which is secured, directly or indirectly, by
shares of an insured depository institution
shall file a consolidated report with the
appropriate Federal banking agency for such
insured depository institution if the
extensions of credit by the foreign bank or any
affiliate thereof, in the aggregate, are
secured, directly or indirectly, by 25 percent
or more of any class of shares of the same
insured depository institution.
(B) Definitions.--For purposes of this
paragraph, the following definitions shall
apply:
(i) Foreign bank.--The terms
``foreign bank'' and ``affiliate'' have
the same meanings as in section 1 of
the International Banking Act of 1978.
(ii) Credit outstanding.--The term
``credit outstanding'' includes--
(I) any loan or extension of
credit,
(II) the issuance of a
guarantee, acceptance, or
letter of credit, including an
endorsement or standby letter
of credit, and
(III) any other type of
transaction that extends credit
or financing to the person or
group of persons.
(iii) Group of persons.--The term
``group of persons'' includes any
number of persons that the foreign bank
or any affiliate thereof reasonably
believes--
(I) are acting together, in
concert, or with one another to
acquire or control shares of
the same insured depository
institution, including an
acquisition of shares of the
same insured depository
institution at approximately
the same time under
substantially the same terms;
or
(II) have made, or propose to
make, a joint filing under
section 13 of the Securities
Exchange Act of 1934 regarding
ownership of the shares of the
same insured depository
institution.
(C) Inclusion of shares held by the financial
institution.--Any shares of the insured
depository institution held by the foreign bank
or any affiliate thereof as principal shall be
included in the calculation of the number of
shares in which the foreign bank or any
affiliate thereof has a security interest for
purposes of subparagraph (A).
(D) Report requirements.--
(i) Timing of report.--The report
required under this paragraph shall be
a consolidated report on behalf of the
foreign bank and all affiliates
thereof, and shall be filed in writing
within 30 days of the date on which the
foreign bank or affiliate thereof first
believes that the security for any
outstanding credit consists of 25
percent or more of any class of shares
of an insured depository institution.
(ii) Content of report.--The report
under this paragraph shall indicate the
number and percentage of shares
securing each applicable extension of
credit, the identity of the borrower,
and the number of shares held as
principal by the foreign bank and any
affiliate thereof.
(iii) Copy to other agencies.--A copy
of any report under this paragraph
shall be filed with the appropriate
Federal banking agency for the foreign
bank or any affiliate thereof (if other
than the agency receiving the report
under this paragraph).
(iv) Other information.--Each
appropriate Federal banking agency may
require any additional information
necessary to carry out the agency's
supervisory responsibilities.
(E) Exceptions.--
(i) Exception where information
provided by borrower.--Notwithstanding
subparagraph (A), a foreign bank or any
affiliate thereof shall not be required
to report a transaction under this
paragraph if the person or group of
persons referred to in such
subparagraph has disclosed the amount
borrowed from such foreign bank or any
affiliate thereof and the security
interest of the foreign bank or any
affiliate thereof to the appropriate
Federal banking agency for the insured
depository institution in connection
with a notice filed under this
subsection, an application filed under
the Bank Holding Company Act of 1956,
section 10 of the Home Owners' Loan
Act, or any other application filed
with the appropriate Federal banking
agency for the insured depository
institution as a substitute for a
notice under this subsection, such as
an application for deposit insurance,
membership in the Federal Reserve
System, or a national bank charter.
(ii) Exception for shares owned for
more than 1 year.--Notwithstanding
subparagraph (A), a foreign bank and
any affiliate thereof shall not be
required to report a transaction
involving--
(I) a person or group of
persons that has been the owner
or owners of record of the
stock for a period of 1 year or
more; or
(II) stock issued by a newly
chartered bank before the
bank's opening.
(10) The reports required by paragraph (9) of this subsection
shall contain such of the information referred to in paragraph
(6) of this subsection, and such other relevant information, as
the appropriate Federal banking agency may require by
regulation or by specific request in connection with any
particular report.
(11) The Federal banking agency receiving a notice or report
filed pursuant to paragraph (1) or (9) shall immediately
furnish to the other Federal banking agencies a copy of such
notice or report.
(12) Whenever such a change in control occurs, each insured
depository institution shall report promptly to the appropriate
Federal banking agency any changes or replacement of its chief
executive officer or of any director occurring in the next
twelve-month period, including in its report a statement of the
past and current business and professional affiliations of the
new chief executive officer or directors.
(13) The appropriate Federal banking agencies are authorized
to issue rules and regulations to carry out this subsection.
(14) Within two years after the effective date of the Change
in Bank Control Act of 1978, and each year thereafter in each
appropriate Federal banking agency's annual report to the
Congress, the appropriate Federal banking agency shall report
to the Congress the results of the administration of this
subsection, and make any recommendations as to changes in the
law which in the opinion of the appropriate Federal banking
agency would be desirable.
(15) Investigative and Enforcement Authority.--
(A) Investigations.--The appropriate Federal banking
agency may exercise any authority vested in such agency
under section 8(n) in the course of conducting any
investigation under paragraph (2)(B) or any other
investigation which the agency, in its discretion,
determines is necessary to determine whether any person
has filed inaccurate, incomplete, or misleading
information under this subsection or otherwise is
violating, has violated, or is about to violate any
provision of this subsection or any regulation
prescribed under this subsection.
(B) Enforcement.--Whenever it appears to the
appropriate Federal banking agency that any person is
violating, has violated, or is about to violate any
provision of this subsection or any regulation
prescribed under this subsection, the agency may, in
its discretion, apply to the appropriate district court
of the United States or the United States court of any
territory for--
(i) a temporary or permanent injunction or
restraining order enjoining such person from
violating this subsection or any regulation
prescribed under this subsection; or
(ii) such other equitable relief as may be
necessary to prevent any such violation
(including divestiture).
(C) Jurisdiction.--
(i) The district courts of the United States
and the United States courts in any territory
shall have the same jurisdiction and power in
connection with any exercise of any authority
by the appropriate Federal banking agency under
subparagraph (A) as such courts have under
section 8(n).
(ii) The district courts of the United States
and the United States courts of any territory
shall have jurisdiction and power to issue any
injunction or restraining order or grant any
equitable relief described in subparagraph (B).
When appropriate, any injunction, order, or
other equitable relief granted under this
paragraph shall be granted without requiring
the posting of any bond. The resignation,
termination of employment or participation,
divestiture of control, or separation of or by
an institution-affiliated party (including a
separation caused by the closing of a
depository institution) shall not affect the
jurisdiction and authority of the appropriate
Federal banking agency to issue any notice and
proceed under this subsection against any such
party, if such notice is served before the end
of the 6-year period beginning on the date such
party ceased to be such a party with respect to
such depository institution (whether such date
occurs before, on, or after the date of the
enactment of this sentence).
(16) Civil money penalty.--
(A) First tier.--Any person who violates any
provision of this subsection, or any regulation
or order issued by the appropriate Federal
banking agency under this subsection, shall
forfeit and pay a civil penalty of not more
than $5,000 for each day during which such
violation continues.
(B) Second tier.--Notwithstanding
subparagraph (A), any person who--
(i)(I) commits any violation
described in any clause of subparagraph
(A);
(II) recklessly engages in an unsafe
or unsound practice in conducting the
affairs of a depository institution; or
(III) breaches any fiduciary duty;
(ii) which violation, practice, or
breach--
(I) is part of a pattern of
misconduct;
(II) causes or is likely to
cause more than a minimal loss
to such institution; or
(III) results in pecuniary
gain or other benefit to such
person,
shall forfeit and pay a civil penalty of not
more than $25,000 for each day during which
such violation, practice, or breach continues.
(C) Third tier.--Notwithstanding
subparagraphs (A) and (B), any person who--
(i) knowingly--
(I) commits any violation
described in any clause of
subparagraph (A);
(II) engages in any unsafe or
unsound practice in conducting
the affairs of a depository
institution; or
(III) breaches any fiduciary
duty; and
(ii) knowingly or recklessly causes a
substantial loss to such institution or
a substantial pecuniary gain or other
benefit to such person by reason of
such violation, practice, or breach,
shall forfeit and pay a civil penalty in an
amount not to exceed the applicable maximum
amount determined under subparagraph (D) for
each day during which such violation, practice,
or breach continues.
(D) Maximum amounts of penalties for any
violation described in subparagraph (c).--The
maximum daily amount of any civil penalty which
may be assessed pursuant to subparagraph (C)
for any violation, practice, or breach
described in such subparagraph is--
(i) in the case of any person other
than a depository institution, an
amount to not exceed $1,000,000; and
(ii) in the case of a depository
institution, an amount not to exceed
the lesser of--
(I) $1,000,000; or
(II) 1 percent of the total
assets of such institution.
(E) Assessment; etc.--Any penalty imposed
under subparagraph (A), (B), or (C) shall be
assessed and collected by the appropriate
Federal banking agency in the manner provided
in subparagraphs (E), (F), (G), and (I) of
section 8(i)(2) for penalties imposed (under
such section) and any such assessment shall be
subject to the provisions of such section.
(F) Hearing.--The depository institution or
other person against whom any penalty is
assessed under this paragraph shall be afforded
an agency hearing if such institution or other
person submits a request for such hearing
within 20 days after the issuance of the notice
of assessment. Section 8(h) shall apply to any
proceeding under this paragraph.
(G) Disbursement.--All penalties collected
under authority of this paragraph shall be
deposited into the Treasury.
(17) Exceptions.--This subsection shall not apply
with respect to a transaction which is subject to--
(A) section 3 of the Bank Holding Company Act
of 1956;
(B) section 18(c) of this Act; or
(C) section 10 of the Home Owners' Loan Act.
(18) Applicability of change in control provisions to
other institutions.--For purposes of this subsection,
the term ``insured depository institution'' includes--
(A) any depository institution holding
company; and
(B) any other company which controls an
insured depository institution and is not a
depository institution holding company.
(k) The appropriate Federal banking agencies are authorized
to issue rules and regulations, including definitions of terms,
to require the reporting and public disclosure of information
by a bank or any executive officer or prinicipal shareholder
thereof concerning extensions of credit by the bank to any of
its executive officers or principal shareholders, or the
related interests of such persons.
(l) Designation of Fund Membership for Newly Insured
Depository Institutions; Definitions.--For purposes of this
section:
(1) Bank insurance fund.--Any institution which--
(A) becomes an insured depository
institution; and
(B) does not become a Savings Association
Insurance Fund member pursuant to paragraph
(2),
shall be a Bank Insurance Fund member.
(2) Savings association insurance fund.--Any savings
association, other than any Federal savings bank
chartered pursuant to section 5(o) of the Home Owners'
Loan Act, which becomes an insured depository
institution shall be a Savings Association Insurance
Fund member.
(3) Transition provision.--
(A) Bank insurance fund.--Any depository
institution the deposits of which were insured
by the Federal Deposit Insurance Corporation on
the day before the date of the enactment of the
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, including--
(i) any Federal savings bank
chartered pursuant to section 5(o) of
the Home Owners' Loan Act; and
(ii) any cooperative bank,
shall be a Bank Insurance Fund member as of
such date of enactment.
(B) Savings association insurance fund.--Any
savings association which is an insured
depository institution by operation of section
4(a)(2) shall be a Savings Association
Insurance Fund member as of the date of the
enactment of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989.
(4) Bank insurance fund member.--The term ``Bank
Insurance Fund member'' means any depository
institution the deposits of which are insured by the
Bank Insurance Fund.
(5) Savings association insurance fund member.--The
term ``Savings Association Insurance Fund member''
means any depository institution the deposits of which
are insured by the Savings Association Insurance Fund.
(6) Bank insurance fund reserve ratio.--The term
``Bank Insurance Fund reserve ratio'' means the ratio
of the net worth of the Bank Insurance Fund to the
value of the aggregate estimated insured deposits held
in all Bank Insurance Fund members.
(7) Savings association insurance fund reserve
ratio.--The term ``Savings Association Insurance Fund
reserve ratio'' means the ratio of the net worth of the
Savings Association Insurance Fund to the value of the
aggregate estimated insured deposits held in all
Savings Association Insurance Fund members.
(m) Secondary Reserve Offsets Against Premiums.--
(1) Offsets in calendar years beginning before
1993.--Subject to the maximum amount limitation
contained in paragraph (2) and notwithstanding any
other provision of law, any insured savings association
may offset such association's pro rata share of the
statutorily prescribed amount against any premium
assessed against such association under subsection (b)
of this section for any calendar year beginning before
1993.
(2) Annual maximum amount limitation.--The amount of
any offset allowed for any savings association under
paragraph (1) for any calendar year beginning before
1993 shall not exceed an amount which is equal to 20
percent of such association's pro rata share of the
statutorily prescribed amount (as computed for such
calendar year).
(3) Offsets in calendar years beginning after 1992.--
Notwithstanding any other provision of law, a savings
association may offset such association's pro rata
share of the statutorily prescribed amount against any
premium assessed against such association under
subsection (b) for any calendar year beginning after
1992.
(4) Transferability.--No right, title, or interest of
any insured depository institution in or with respect
to its pro rata share of the secondary reserve shall be
assignable or transferable whether by operation of law
or otherwise, except to the extent that the Corporation
may provide for transfer of such pro rata share in
cases of merger or consolidation, transfer of bulk
assets or assumption of liabilities, and similar
transactions, as defined by the Corporation for
purposes of this paragraph.
(5) Pro rata distribution on termination of insured
status.--If--
(A) the status of any savings association as
an insured depository institution is terminated
pursuant to any provision of section 8 or the
insurance of accounts of any such institution
is otherwise terminated;
(B) a receiver or other legal custodian is
appointed for the purpose of liquidation or
winding up the affairs of any savings
association; or
(C) the Corporation makes a determination
that for the purposes of this subsection any
savings association has otherwise gone into
liquidation,
the Corporation shall pay in cash to such institution
its pro rata share of the secondary reserve, in
accordance with such terms and conditions as the
Corporation may prescribe, or, at the option of the
Corporation, the Corporation may apply the whole or any
part of the amount which would otherwise be paid in
cash toward the payment of any indebtedness or
obligation, whether matured or not, of such institution
to the Corporation, existing or arising before such
payment in cash. Such payment or such application need
not be made to the extent that the provisions of the
exception in paragraph (4) are applicable.
(6) Statutorily prescribed amount defined.--For
purposes of this subsection, the term ``statutorily
prescribed amount'' means, with respect to any calendar
year which ends after the date of the enactment of the
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989--
(A) $823,705,000, minus
(B) the sum of--
(i) the aggregate amount of offsets
made before such date of enactment by
all insured institutions under section
404(e)(2) of the National Housing Act
(as in effect before such date of
enactment); and
(ii) the aggregate amount of offsets
made by all savings associations under
this subsection before the beginning of
such calendar year.
(7) Savings association's pro rata amount.--For
purposes of this subsection, any savings association's
pro rata share of the statutorily prescribed amount is
the percentage which is equal to such association's
share of the secondary reserve as determined under
section 404(e) of the National Housing Act on the day
before the date on which the Federal Savings and Loan
Insurance Corporation ceased to recognize the secondary
reserve (as such Act was in effect on the day before
such date).
(8) Year of enactment rule.--With respect to the
calendar year in which the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 is
enacted, the Corporation shall make such adjustments as
may be necessary--
(A) in the computation of the statutorily
prescribed amount which shall be applicable for
the remainder of such calendar year after
taking into account the aggregate amount of
offsets by all insured institutions under
section 404(e)(2) of the National Housing Act
(as in effect before the date of the enactment
of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989) after the
beginning of such calendar year and before such
date of enactment; and
(B) in the computation of the maximum amount
of any savings association's offset for such
calendar year under paragraph (1) after taking
into account--
(i) the amount of any offset by such
savings association under section
404(e)(2) of the National Housing Act
(as in effect before such date of
enactment) after the beginning of such
calendar year and before such date of
enactment; and
(ii) the change of such association's
premium year from the 1-year period
applicable under section 404(b) of the
National Housing Act (as in effect
before such date of enactment) to a
calendar year basis.
(n) Collections on Behalf of the Comptroller of the
Currency.--When requested by the Comptroller of the Currency,
the Corporation shall collect on behalf of the Comptroller
assessments on Federal savings associations levied by the
Comptroller under section 9 of the Home Owners' Loan Act. The
Corporation shall be reimbursed for its actual costs for the
collection of such assessments. Any such assessments by the
Comptroller shall be in addition to any amounts assessed by the
Corporation.
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