[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2497 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 2497
To amend the Federal Deposit Insurance Act to convert certain insured
State banks into national banks.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 26, 2023
Mr. Vance introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Federal Deposit Insurance Act to convert certain insured
State banks into national banks.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Bank Failure Prevention Act''.
SEC. 2. CONVERSION OF INSURED STATE BANK WITH TOTAL CONSOLIDATED ASSETS
EQUAL TO OR GREATER THAN $100,000,000,000 INTO A NATIONAL
BANK.
(a) In General.--Section 24 of Federal Deposit Insurance Act (12
U.S.C. 1831a) is amended by adding at the end the following:
``(k) Automatic Conversion to a National Banking Association.--
``(1) Definitions.--In this subsection:
``(A) Average total consolidated assets.--The term
`average total consolidated assets' means the average
of total consolidated assets for the four most recent
calendar quarters or, if the insured State bank has not
reported total consolidated assets for each of the four
most recent calendar quarters, the total consolidated
assets for the most recent calendar quarter or average
of the most recent calendar quarters, as applicable.
``(B) Covered insured state bank.--The term
``covered insured State bank'' means an insured State
bank with average total consolidated assets equal to or
greater than $100,000,000,000.
``(2) Conversion.--
``(A) In general.--By operation of law, a covered
insured State bank shall convert to and become a
national banking association on the date that is 180
days after the end of the quarter in which the insured
State bank became a covered insured State bank. The
Comptroller of the Currency shall issue a certificate
of organization to the association on such date. The
requirements and restrictions on the conversion of a
State Bank or Savings Association contained in Section
5154 of the Revised Statutes of the United States (12
U.S.C. 35) do not apply to conversions under this
section. A covered insured State bank may continue to
operate any branch or agency that the covered insured
State bank operated on the date on which the
Comptroller of the Currency issues the certificate of
organization. The Comptroller of the Currency may, in
the Comptroller's discretion and subject to such terms
and conditions as the Comptroller may prescribe, permit
such covered insured State bank to retain and carry at
a value determined by the Comptroller such of the
assets of such converting bank as do not conform to the
legal requirements relative to assets acquired and held
by national banking associations. The Comptroller of
the Currency may extend or accelerate any compliance
date of this section if the Comptroller determines that
such extension or acceleration is appropriate. In
determining whether an extension or acceleration is
appropriate, the Comptroller will consider the effect
of the modification on financial stability, the period
of time for which the modification would be necessary
to facilitate compliance with this section, and the
actions the covered insured State bank is taking to
come into compliance with this section.
``(B) Rights and duties.--When the covered insured
State bank has received its certificate of organization
from the Comptroller of the Currency, such bank shall
be considered a national bank and supervised and
regulated as such, and the bank and all its
stockholders, officers, and employees shall have the
same powers and privileges and shall be subject to the
same duties, liabilities, and regulations, in all
respects, as shall have been prescribed by the Federal
Reserve Act (12 U.S.C. 221 et seq.) and the National
Banking Act for associations originally organized as
national banking associations.
``(C) Notice.--A covered insured State bank shall
submit a notice to the Comptroller of the Currency and
the appropriate Federal banking agency within 60 days
of becoming a covered insured State bank. The notice
shall contain--
``(i) the date on which the insured State
bank became a covered insured State bank;
``(ii) the date on which the covered
insured State bank will convert to a national
banking association; and
``(iii) the name to be assumed by such
association following conversion, which shall
include the word `national'.
``(3) Transitions.--
``(A) No transition for certain insured state
banks.--An insured State bank that would be a covered
insured State bank immediately prior to December 31,
2023, shall be considered to have become a covered
insured State bank on January 1, 2024.
``(B) Orderly transition.--Following receipt of the
notice under subsection (k)(2)(C), the appropriate
Federal banking agency shall provide to the Comptroller
of the Currency the covered insured State bank's
reports of condition and other relevant financial and
supervisory information, as requested by the
Comptroller.
``(4) Rulemaking.--The Comptroller of the Currency, after
consulting with the Board of Governors of the Federal Reserve
System and the Federal Deposit Insurance Corporation, shall
issue rules to carry out this section that--
``(A) establish streamlined standards and
procedures that clearly identify required documentation
and timelines for compliance with applicable law; and
``(B) require a covered insured State bank
automatically converting under subsection (k)(2) to
identify activities and investments, whether conducted
by the covered insured State bank or its affiliates,
that--
``(i) do not conform to the requirements
for activities and investments of a national
bank; and
``(ii) are held by the covered insured
State bank or its affiliates on the date on
which the covered State bank submits the notice
pursuant to subsection (k)(2)(A);
``(C) establish--
``(i) a transition process for bringing the
activities and investments described in
paragraph (B) into conformance with the
requirements for a national bank under
applicable law; and
``(ii) procedures for allowing the covered
insured State bank to submit to the Comptroller
of the Currency an application to continue to
hold activities and investments described in
paragraph (B) after conversion, which may be
approved or denied by the Comptroller in his
discretion; and
``(D) the Comptroller of the Currency determines
necessary in the interests of safety and soundness.''.
(b) Effective Date.--The amendments made by this section shall take
effect on December 31, 2023.
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