Bill summaries are authored by CRS.

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Conference report filed in House (11/27/1991)

Federal Deposit Insurance Corporation Improvement Act of 1991 - Title I: Safety and Soundness - Subtitle A: Deposit Insurance Funds - Amends the Federal Deposit Insurance Act (FDIA) to increase from $5,000,000,000 to $30,000,000,000 the amount of credit available from the Treasury to the Federal Deposit Insurance Corporation (FDIC). Sets maximum limits upon the outstanding obligations of the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF). Directs the Comptroller General to report quarterly to certain congressional committees regarding FDIC compliance with such obligation limitations. Mandates a repayment schedule as a prerequisite to any such borrowing. Requires the Secretary of the Treasury to submit a copy of such schedule to certain congressional committees and to consult with them regarding repayment terms.

Authorizes the FDIC to impose special assessments upon insured depository institutions (in addition to existing assessments) if emergency assessments are required and if they are allocated between the BIF members and SAIF members according to their respective needs.

Modifies recapitalization guidelines for the BIF. Sets forth borrowing guidelines the BIF must follow when borrowing from its members.

Subtitle B: Supervisory Reforms - Requires annual on-site examinations of all insured depository institutions except certain Government-controlled institutions. Subjects certain small-sized, well-capitalized institutions to requirements for examinations every 18 months instead of every 12 months.

Requires each Federal banking agency, acting through the Federal Financial Institutions Examination Council, to establish an examination improvement program.

Requires annual fiscal status reports from all insured depository institutions (except certain small-sized insured depository institutions). Prescribes guidelines for preparation of such reports.

Sets forth guidelines for assessments to cover FDIC costs of conducting examinations of insured depository institutions and their affiliates.

Sets forth an examination and supervisory fees schedule which may be imposed by Federal regulatory agencies upon national banks and savings associations.

Outlines the application procedure for deposit insurance.

Subtitle C: Accounting Reforms - Mandates that: (1) the accounting principles applicable to all insured depository institutions be uniform and consistent with generally accepted accounting principles; (2) each appropriate Federal banking agency implement certain accounting principles (maintaining uniform accounting standards to use in determining compliance with statutory requirements of insured depository institutions); and (3) each appropriate Federal banking agency report annually to certain congressional committees on any differences between its accounting or capital standards and those used by other agencies.

Directs Federal regulatory agencies to prescribe regulations requiring insured depository institutions to submit information annually on small businesses and small farm lending in their reports of condition.

Amends the FDIA to set forth property disposition standards for the FDIC in its corporate, conservator, or receiver capacity.

Subtitle D: Prompt Regulatory Action - Mandates that each appropriate Federal banking agency: (1) take prompt corrective action to resolve the problems of insured depository institutions by prescribing or rescinding, as appropriate, specified capitalization measures established according to statutory guidelines (including capital restoration plan requirements); and (2) prescribe safety and soundness standards for operation and management of such institutions and depository institution holding companies.

Provides additional grounds for appointing depository institution conservators and receivers to facilitate prompt regulatory action.

Subtitle E: Least-Cost Resolution - Amends the FDIA to require the FDIC to implement a least-cost resolution approach according to designated guidelines to ensure that its obligations to insured depositors are honored using the least possible long-term cost to the deposit insurance fund.

Authorizes the Secretary of the Treasury to make emergency advances to the FDIC if it is determined that in certain circumstances such least-cost resolution approach would have serious adverse effects on economic conditions or financial stability. Outlines the emergency advance procedures. Mandates an annual General Accounting Office (GAO) audit of the FDIC and the Resolution Trust Corporation (RTC) to determine compliance with such least-cost approach. Sets forth procedural guidelines with respect to: (1) creditors' claims; (2) data collection; (3) financial services industry impact analyses before resolution of a troubled insured depository institution; and (4) financial assistance prior to appointment of a receiver or conservator.

Amends the Federal Reserve Act to impose limitations upon advances by any Federal Reserve bank to an undercapitalized depository institution. Authorizes the Board to examine depository institutions and their affiliates regarding advances made to them.

Expresses the sense of the Congress that Federal banking agencies should facilitate early resolution of troubled insured depository institutions if it would have the least possible long-term cost to the deposit insurance fund. Directs the FDIC to report to the Congress an analysis of the effect of early resolution on the deposit insurance funds.

Subtitle F: Federal Insurance for State Chartered Depository Institutions - Amends the FDIA to: (1) require independent annual audits of private deposit insurers which disclose specified aspects of the insurer's business plan and ongoing accounting principles; and (2) require depository institutions lacking Federal deposit insurance to disclose to their customers (according to Federal Trade Commission-prescribed guidelines) the non-federally insured status of their accounts.

Subtitle G: Technical Corrections and Clarifications - Amends the FDIA to: (1) grant the FDIC all rights, powers, and duties to implement its duties with respect to the assets and liabilities of the Federal Savings and Loan Insurance Corporation (FSLIC) Resolution Fund; and (2) declare the FDIC successor to the FSLIC as conservator or receiver of certain depository institutions.

Title II: Regulatory Improvement - Subtitle A: Regulation of Foreign Banks - Foreign Bank Supervision Enhancement Act of 1991 - Amends the International Banking Act of 1978 to prohibit a foreign bank from establishing any branch or agency in the United States without prior approval of the Board of Governors of the Federal Reserve System (the Board). Outlines approval and termination procedures. Authorizes the Board to examine each branch or agency of a foreign bank or foreign entities engaged in lending practices. Mandates annual on-site examinations of such entities and outlines a coordinated examination procedure with the Comptroller of the Currency and the FDIC. Prohibits foreign banks from establishing representative offices without the Board's prior approval.

Amends the FDIA to require a financial institution to file a consolidated report with the appropriate Federal banking agency if the credit it extends (currently, if the loan or loans it makes) to any person or group is secured by 25 percent or more of any class of shares of an insured depository institution.

Amends the International Banking Act of 1978 to authorize the Board, the Comptroller of the Currency, the FDIC, and the Director of the Office of Thrift Supervision to disclose to their foreign counterparts information obtained in the course of exercising supervisory or examination authority, subject to confidentiality requirements. Sets forth a civil money penalty schedule for violations of such Act by a foreign bank.

Amends the Bank Holding Company Act of 1956 and the Home Owners' Loan Act to declare that consideration of a bank's managerial resources by the Board includes the competence, experience, and integrity of its officers, directors, and principal shareholders.

Amends the Home Mortgage Disclosure Act of 1975, and certain related consumer protection statutes, to subject foreign bank branches and agencies in the United States to the same supervisory and enforcement agencies as apply to their domesitc counterparts.

Amends the International Banking Act of 1978 to establish criminal penalties for its violation. Requires foreign banks that seek to engage in retail deposit-taking for accounts of under $100,000 to: (1) establish one or more banking subsidiaries in the U.S. for that purpose; and (2) obtain Federal deposit insurance for such subsidiaries.

Requires the Federal Reserve Board and the Secretary of the Treasury to report to certain congressional committees on: (1) foreign bank capital equivalency guidelines; and (2) possible subsidiary requirements for foreign banks.

Subtitle B: Customer and Consumer Provisions - Requires the Federal Financial Institutions Examination Council to report to the Congress on possible modification of the regulatory burden imposed upon insured depository institutions.

Amends the Equal Credit Opportunity Act to require specified Federal agencies to: (1) refer to the Attorney General any cases in which there is reason to believe that a pattern or practice of credit discrimination exists with respect to credit application denials or discouragement; and (2) notify the Secretary of Housing and Urban Development of those cases in which there is reason to believe that a violation of the Fair Housing Act has occurred.

Amends the Expedited Funds Availability Act to make permanent the four-business days waiting period before a depositor may withdraw funds deposited at an automated teller machine owned or operated by a depository institution other than his own.

Amends the FDIA to set forth notification and policy guidelines to be followed by an insured depository institution with respect to advance notice of branch closures.

Subtitle C: Bank Enterprise Act - Bank Enterprise Act of 1991 - Directs the Board and the FDIC to establish minimum requirements according to prescribed criteria so that certain accounts providing basic consumer transaction services at insured depository institutions may qualify as lifeline accounts. Amends the FDIA to provide that an insured depository institution's assessment rate with respect to such lifeline accounts shall be one-half the maximum rate. Sets forth assessment procedures

Creates a Community Enterprise Assessment Credit Board which shall determine whether insured depository institutions may receive assessment credits for increases in: (1) loans and other financial assistance provided for low- and moderate-income persons or enterprises in distressed communities; and (2) deposits accepted from persons domiciled in such communities.

Sets forth requirements for insured depository institutions to meet to be treated as community development organizations.

Subtitle D: FDIC Property Disposition - Amends the FDIA to establish the parameters for a three-year FDIC affordable housing program for very low-income, low-income, and moderate-income families (including single-family, multi-family, and condominium properties).

Authorizes appropriations.

Directs the FDIC to establish an Affordable Housing Program Office to implement this Act. Directs the Secretary of Housing and Urban Development (HUD) to include in the HUD annual report to the Congress a detailed description of activities undertaken to implement this program.

Directs the FDIC and the RTC to coordinate with one another in carrying out their responsibilities under this program.

Subtitle E: Whistleblower Protections - Amends the FDIA to establish additional whistleblower protections for employees of: (1) troubled depository institutions; (2) Federal bank regulatory agencies; and (3) the RTC, Oversight Board, and RTC contractors.

Subtitle F: Truth in Savings - Truth in Savings Act - Sets forth requirements for depository institutions to: (1) disclose interest rates, terms of account, and specified information about certain accounts; (2) maintain account schedules; and (3) distribute account schedules to certain persons. Provides for Federal Reserve Board regulations, administrative enforcement of this Act, and civil penalties for its violation.

Title III: Regulatory Improvement - Subtitle A: Activities - Prohibits an insured depository institution from accepting funds through a deposit broker for deposit accounts that are not well capitalized. Restricts the interest rate paid on brokered deposits. Prescribes deposit broker notification and recordkeeping procedures.

Requires the FDIC to implement a risk-based assessment system according to prescribed guidelines.

Sets limitations upon insured State banks and their subsidiaries with respect to activities that are impermissible for national banks, including insurance underwriting. Retains savings bank life insurance activities by certain insured banks in New York, Connecticut, or Massachusetts.

Prohibits an insured State bank, except in certain States, from acquiring or retaining any equity investment of a type or in an amount that is not permissible for a national bank. Permits such acquisition of certain types of depository institutions or business liability insurance companies. Authorizes the FDIC to require investment divestiture by an insured State bank if it determines that such investment will have an adverse effect on the safety and soundness of the bank.

Directs the appropriate Federal banking agencies to adopt uniform regulations prescribing standards for extensions of credit that are: (1) secured by liens on real estate; or (2) made for the purpose of financing real estate construction projects.

Amends the FDIA with respect to: (1) capital standards and interest rate risk; (2) safeguarads against insider abuse; (3) FDIC back-up enforcement authority; and (4) interbank liabilities.

Subtitle B: Coverage - Treats as uninsured deposits bank investment contracts between an insured depository institution and an employee benefit plan that permit benefit-responsive withdrawals or transfers without penalty. Excludes such uninsured deposits from the assessment base of insured depository institutions. Sets a maximum ceiling for insured deposits at $100,000,000. Directs the FDIC to provide deposit insurance coverage for deposits accepted on a pass-through basis to employee benefit plan participants or beneficiaries. Terminates such coverage by a specified deadline if the depository institution has not met specified minimum capitalization requirements. Declares that certain self-directed individual retirement accounts shall be aggregated and insured up to $100,00 per participant per insured depository institution. Includes within such maximum coverage certain trust funds and interbank deposits by a fiduciary depository institution.

Requires the FDIC to study and report to the Congress on the cost and feasibility of tracking insured and uninsured deposits of any individual, and the exposure of the Federal Government with respect to all insured depository institutions. Requires the Federal Reserve Board to report to the FDIC the results of a survey conducted as part of such cost-benefit analysis regarding the ownership, dollar amount, and type of deposits held by individuals, including the type of financial institutions in which the deposit accounts are held.

Proscribes payments on foreign deposits by a Federal entity.

Amends the FDIA and the Federal Credit Union Act to establish civil penalties for failure by an insured depository institution to make accurate certified statements of its assessment base, or of the amount of deposit insurance premium due.

Subtitle C: Demonstration Project and Studies - Directs the FDIC to study and report to the Congress on the feasibility of: (1) authorizing insured depository institutions to offer both insured and uninsured deposit accounts to customers; and (2) establishing a private reinsurance system.

Title IV: Miscellaneous Provisions - Subtitle A: Payment System Risk Reduction - Sets forth general netting rules and parameters to ensure that covered contractual payment obligations and entitlements between any two financial institutions or financial clearinghouses are netted pursuant to the conditions of applicable netting contracts.

Subtitle B: Right to Financial Privacy Act of 1978 - Amends the Right to Financial Privacy Act of 1978 to authorize a Federal entity to transfer to the Department of Justice financial records for use in certain civil actions or criminal forfeiture actions regardless of whether such actions are also directed at a customer of the institution. States that such transfer does not constitute a waiver of any privilege pertaining to such records.

Subtitle C: Final Settlement Payment Procedure - Amends the FDIA to authorize the FDIC to settle uninsured and unsecured claims on an institution in receivership with a final settlement payment which must reflect an average of the FDIC's receivership recovery experience.

Subtitle D: Miscellaneous Committees, Studies, and Reports - Requires the Federal Reserve Board, the FDIC, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, and the National Credit Union Administration to report to the Congress the results of a jointly conducted feasibility study on: (1) assessing Federal Reserve banks an amount equal to imputed earnings on reserves held at such banks by insured depository institutions; and (2) the likely effects of such assessments upon the Federal banking and insurance fund system.

Amends the Federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to provide that the Federal Advisory Committee Act does not apply to the Credit Standards Advisory Board (thus giving such Board permanent status).

Subtitle E: Utilization of Private Sector - Amends the FDIA to direct the FDIC to utilize private sector resources if it determines that such course is beneficial in implementing its responsibilities. Requires the FDIC to present a semiannual status report to the Congress which includes specified information with respect to its assets and liabilities, and the assets and liabilities of institutions for which it is conservator or receiver.

Subtitle F: Emergency Assistance for Rhode Island - Directs the Secretary of the Treasury to guarantee the repayment of a specified amount borrowed by the State of Rhode Island (or the Depositors Economic Protection Corporation) in order to expedite the repayment of depositors at State-chartered banks and credit unions in receivership, and to facilitate the resolution of such receiverships. Sets forth guarantee terms.

Subtitle G: Qualified Thrift Lender Test Improvements - Qualified Thrift Lender Reform Act of 1991 - Amends the Home Owners' Loan Act to provide that a savings association shall have the status of a qualified thrift lender if its qualified thrift investments continue to equal or exceed 65 percent of its portfolio assets on a monthly average basis in nine out of every 12 months. Increases from ten percent to 20 percent the amount of liquid assets which are excludable from a savings association's portfolio assets when determining the asset base against which qualified thrift investments are calculated. Modifies the definition of qualified thrift assets to include additional investments. Increases from five percent to ten percent the maximum percentage of allowable consumer loans.

Subtitle H: Prohibition on Entering Secrecy Agreements and Protective Orders - Amends the FDIA to prohibit the FDIC from entering into any agreement or approving any protective order which prohibits it from disclosing the settlement terms in an action for damages or restitution brought by it as conservator or receiver of an insured depository institution.

Subtitle I: Bank and Thrift Employee Provisions - Directs the FDIC in its capacity as a successor of a failed depository institution to: (1) continue group health plan coverage to the former employees of such institution in the same manner as the institution was obligated to provide such coverage; and (2) require any successor institution to continue to provide such health plan coverage in a like manner.

Subtitle J: Sense of the House of Representatives on the Credit Crisis - Expresses the sense of the House of Representatives that immediate and coordinated action should be taken by the Congress and the President to arrest the credit crisis, and that efforts should be undertaken to: (1) remove barriers to pension funds seeking to invest in real estate; (2) remove arbitrary obstacles to private forms of credit enhancement; (3) consider the impact of risk-based capital standards on commercial and residential real estate; (4) end market-to-market liquidation-based appraisals; (5) encourage loan renewals; (6) communicate the supervisory policy to bank examiners in the field; and (7) modify the passive loss rules and encourage loan restructures.

Subtitle K: Acquisition of Insolvent Savings Associations - Amends the Bank Holding Company Act to authorize certain federally chartered savings associations which were acquired by a bank holding company without Federal assistance to continue their prior insurance agency activities if such activities were permissible for Federal savings associations.

Subtitle L: Creditability of Service - Amends Federal administrative law to grant specified Federal retirement coverage to certain Federal employees whose job transfer was pursuant to a Presidential appointment.

Subtitle M: Other Miscellaneous Provisions - Amends the Home Owners' Loan Act to require any person who was obligated to provide services to a depository institution in RTC conservatorship or receivership to continue to provide such services to any person to whom the RTC transfers the right to receive them, unless the refusal to do so is based on the transferee's failure to comply with any material term or condition of the original obligation.

Amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to prohibit the Appraisal Subcommittee from setting qualifications or experience requirements for the States in licensing real estate appraisers (including a de minimis standard). Delays the effective date for the mandatory use of State certified and State licensed appraisers from July 1, 1991, to December 31, 1992. Directs the Office of Management and Budget to study the need to establish de minimis levels for commercial real estate.

Amends the FDIA to preclude a Federal banking agency from requiring an insured institution to designate a corporation (or a a transaction with it) as highly leveraged solely because the corporation has been a debtor or adjudged bankrupt if, after confirmation of a reorganization plan, the corporation would not otherwise be highly leveraged.

Mandates that Federal banking regulatory agencies determine, with respect to specified purchased mortgage servicing rights, the amount of readily marketable purchased mortgage servicing rights that may be included in calculating an insured depository institution's tangible capital, risk-based capital, or leverage limit.

Declares that the limitations period for a private cause of action shall be the one in effect in the jurisdiction in which the action was commenced as of June 19, 1991 (thus extending the period to bring an action for securities fraud). Provides for the reinstatement and refiling of certain actions which were dismissed as time barred after such date but would have been timely filed under applicable laws of the jurisdiction. (Reverses the effect of a particular Supreme Court decision.)

Directs the Federal Reserve Board to collect and publish annually information on the availability of credit to small businesses.

Declares that certain charitable or religious organization deposits of the Freedom National Bank of New York shall be considered to have been insured as of the date of the bank's closure by the Office of the Comptroller of the Currency.

Subtitle N: Severability - Sets forth severability provisions.

Title V: Depository Institution Conversions - Amends the FDIA to authorize any insured depository institution to participate in certain mergers and acquisitions during the five year conversion moratorium which began August 9, 1989, with the prior written approval of the responsible regulatory agency. Sets forth guidelines for assessments on deposits of the former depository institution (i.e., before conversion). Permits certain interstate conversion transactions. Mandates expedited approval procedures with respect to an application by a State non-member insured bank to acquire another insured depository institution. Allocates insurance losses between the BIF and the SAIF in the event the depository institution resulting from the conversion transaction goes into default.

Amends the Home Owners' Loan Act, the Bank Holding Company Act of 1956, and Federal banking law regarding national banks to authorize bank mergers, consolidations and other acquisitions by Federal savings associations and national banks.