FDIC BOARD MEMBERS.

SEC. 203. FDIC BOARD MEMBERS. (a) In General.—Section 2 of the Federal Deposit Insurance Act is amended to read as follows: “SEC. 2. MANAGEMENT. “(a) Board of Directors.— “(1) In general.— The management of the Corporation shall be vested in a Board of Directors consisting of 5 members— “(A) 1 of whom shall be the Comptroller of the Currency; “(B) 1 of whom shall be the Director of the Office of Thrift Supervision; and “(C) 3 of whom shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who are citizens of the United States. “(2) Political affiliation.—After February 28, 1993, not more than 3 of the members of the Board of Directors may be members of the same political party. “(b) Chairperson and Vice Chairperson.— “(1) Chairperson.—1 of the appointed members shall be designated by the President, by and with the advice and consent of the Senate, to serve as Chairperson of the Board of Directors for a term of 5 years. “(2) Vice chairperson.—1 of the appointed members shall be designated by the President, by and with the advice and consent of the Senate, to serve as Vice Chairperson of the Board of Directors. “(3) Acting chairperson.—In the event of a vacancy in the position of Chairperson of the Board of Directors or during the absence or disability of the Chairperson, the Vice Chairperson shall act as Chairperson. “(c) Terms.— “(1) Appointed members.—Each appointed member shall be appointed for a term of 6 years. “(2) Interim appointments.—Any member appointed to fill a vacancy occurring before the expiration of the term for which such member’s predecessor was appointed shall be appointed only for the remainder of such term. “(3) Continuation of service.—The Chairperson, Vice Chairperson, and each appointed member may continue to serve after the expiration of the term of office to which such member was appointed until a successor has been appointed and qualified. “(d) Vacancy.— “(1) In general.—Any vacancy on the Board of Directors shall be filled in the manner in which the original appointment was made. 103 STAT. 189 “(2) Acting officials may serve.—In the event of a vacancy in the office of the Comptroller of the Currency or the office of Director of the Office of Thrift Supervision and pending the appointment of a successor, or during the absence or disability of the Comptroller or such Director, the acting Comptroller of the Currency or the acting Director of the Office of Thrift Supervision, as the case may be, shall be a member of the Board of Directors in the place of the Comptroller or Director. “(e) Ineligibility for Other Offices.— “(1) Postservice restriction.— “(A) In general.—No member of the Board of Directors may hold any office, position, or employment in any insured depository institution or any depository institution holding company during— “(i) the time such member is in office; and “(ii) the 2-year period beginning on the date such member ceases to serve on the Board of Directors. “(B) Exception for members who serve full term.—The limitation contained in subparagraph (A)(ii) shall not apply to any member who has ceased to serve on the Board of Directors after serving the full term for which such member was appointed. “(2) Restriction during service.— No member of the Board of Directors may— “(A) be an officer or director of any insured depository institution, depository institution holding company, Federal Reserve bank, or Federal home loan bank; or “(B) hold stock in any insured depository institution or depository institution holding company. “(3) Certification.—Upon taking office, each member of the Board of Directors shall certify under oath that such member has complied with this subsection and such certification shall be Filed with the secretary of the Board of Directors.”. (b) Transition Provision.— (1) Chairperson.—Notwithstanding any provision of section 2 of the Federal Deposit Insurance Act, the Chairman of the Board of Directors of the Federal Deposit Insurance Corporation on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 may continue to serve as the Chairperson until the end of the term to which such Chairman was appointed. (2) Members.—Notwithstanding any provision of section 2 of the Federal Deposit Insurance Act, the appointed member of the Board of Directors of the Federal Deposit Insurance Corporation on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 who is not the Chairman shall continue to serve in office until the earlier of— (A) the end of the term to which such member was appointed; or (B) February 28, 1993, except that such member may continue to serve after the end of such term until a successor has been appointed and qualified. (3) Appointments before march i, 1993.—Notwithstanding any provision of section 2 of the Federal Deposit Insurance Act, the term of any member appointed to the Board of Directors of the Federal Deposit Insurance Corporation before February 28, 103 STAT. 1901993 (including the term of any Chairperson), shall end on such date. SEC. 204. DEFINITIONS. (a) Definitions of Bank and Related Terms.—Section 3(a) of the Federal Deposit Insurance Act (12 U.S.C. 1813(a)) is amended to read as follows: “(a) Definitions of Bank and Related Terms.— “(1) Bank.—The term ‘bank’— “(A) means any national bank, State bank, and District bank, and any Federal branch and insured branch; “(B) includes any former savings association that— “(i) has converted from a savings association charter; and “(ii) is a Savings Association Insurance Fund member. “(2) State bank.—The term ‘State bank’ means any bank, banking association, trust company, savings bank, industrial bank (or similar depository institution which the Board of Directors finds to be operating substantially in the same manner as an industrial bank), or other banking institution which— “(A) is engaged in the business of receiving deposits, other than trust funds (as defined in this section); and “(B) is incorporated under the laws of any State or which is operating under the Code of Law for the District of Columbia (except a national bank), including any cooperative bank or other unincorporated bank the deposits of which were insured by the Corporation on the day before the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. “(3) State.—The term ‘State’ means 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, the Virgin Islands, and the Northern Mariana Islands. “(4) District bank.—The term ‘District bank’ means any State bank operating under the Code of Law of the District of Columbia. (b) Definition of Savings Associations and Related Terms.—Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813(b)) is amended to read as follows: “(b) Definition of Savings Associations and Related Terms.— “(1) Savings association.—The term ‘savings association’ means— “(A) any Federal savings association; “(B) any State savings association; and “(C) any corporation (other than a bank) that the Board of Directors and the Director of the Office of Thrift Supervision jointly determine to be operating in substantially the same manner as a savings association. “(2) Federal savings association.—The term ‘Federal savings association’ means any Federal savings association or Federal savings bank which is chartered under section 5 of the Home Owners’ Loan Act. “(3) State savings association.—The term ‘State savings association’ means— 103 STAT. 191 “(A) any building and loan association, savings and loan association, or homestead association; or “(B) any cooperative bank (other than a cooperative bank which is a State bank as defined in subsection (a)(2)), which is organized and operating according to the laws of the State (as defined in subsection (a)(3)) in which it is chartered or organized.”. (c) Definitions Relating to Depository Institutions.—Section 3(c) of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)) is amended to read as follows: “(c) Definitions Relating to Depository Institutions.— “(1) Depository institution.—The term ‘depository institution’ means any bank or savings association. “(2) Insured depository institution.—The term ‘insured depository institution’ means any bank or savings association the deposits of which are insured by the Corporation pursuant to this Act. “(3) Institutions included for certain purposes.—The term ‘insured depository institution’ includes any uninsured branch or agency of a foreign bank or a commercial lending company owned or controlled by a foreign bank for purposes of section 8 of this Act. “(4) Federal depository institution.—The term ‘Federal depository institution’ means any national bank, any Federal savings association, and any Federal branch. “(5) State depository institution.—The term ‘State depository institution’ means any State bank, any State savings association, and any insured branch which is not a Federal branch.”. (d) Definitions Relating to Member Banks.—Section 3(d) of the Federal Deposit Insurance (12 U.S.C. 1813(d)) is amended to read as follows: “(d) Definitions Relating to Member Banks.— “(1) National member bank —The term ‘national member bank’ means any national bank which is a member of the Federal Reserve System. “(2) State member bank.—The term ‘State member bank’ means any State bank which is a member of the Federal Reserve System.”. (e) Definitions Relating to Nonmember Banks.—Section 3(e) of the Federal Deposit Insurance Act (12 U.S.C. 1813(e)) is amended to read as follows: “(e) Definitions Relating to Nonmember Banks.— “(1) National nonmember bank.—The term ‘national nonmember bank’ means any national bank which— “(A) is Located in any territory of the United States, Puerto Rico, Guam, American Samoa, the Virgin Islands, or the Northern Mariana Islands; and “(B) is not a member of the Federal Reserve System. “(2) State nonmember bank.—The term ‘State nonmember bank’ means any State bank which is not a member of the Federal Reserve System.”. (f) Additional Amendments to Definitions.—Section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813) is amended— (1) in subsection (j), by inserting “or savings association” after “of a bank”; (2) in subsection (1)— 103 STAT. 192 (A) by inserting “or savings association” after “a bank”, “the bank”, “another bank”, “receiving bank”, and “such bank” each place such terms appear; (B) by inserting “or savings association’s” after the word “bank’s” each place such term appears; (C) in paragraph (5), by inserting “, Director of the Office of Thrift Supervision,” after “Comptroller of the Currency”; and (D) in paragraph (5)(A), by striking out “and the Virgin Islands” and inserting in lieu thereof “the Virgin Islands, and the Northern Mariana Islands”; (3) in subsection (m)— (A) in paragraph (1)— (i) by striking out “the bank” and inserting in lieu thereof “the depository institution”; and (ii) by inserting “of the Northern Mariana Islands,” after “Virgin Islands,”; and (B) in paragraph (2), by striking out “ther” and inserting in lieu thereof “term”; (4) by striking out subsection (q) and inserting in lieu thereof the following: “(q) Appropriate Federal Banking Agency.—The term ‘appropriate Federal banking agency’ means— “(1) the Comptroller of the Currency, in the case of any national banking association, any District bank, or any Federal branch or agency of a foreign bank; “(2) the Board of Governors of the Federal Reserve System, in the case of— “(A) any State member insured bank (except a District bank), “(B) any branch or agency of a foreign bank with respect to any provision of the Federal Reserve Act which is made applicable under the International Banking Act of 1978, “(C) any foreign bank which does not operate an insured branch, “(D) any agency or commercial lending company other than a Federal agency, “(E) supervisory or regulatory proceedings arising from the authority given to the Board of Governors under section 7(c)(1) of the International Banking Act of 1978, including such proceedings under the Depository Institutions Supervisory Act, and “(F) any bank holding company and any subsidiary of a bank holding company (other than a bank); “(3) the Federal Deposit Insurance Corporation in the case of a State nonmember insured bank (except a District bank), or a foreign bank having an insured branch; and “(4) the Director of the Office of Thrift Supervision in the case of any savings association or any savings and loan holding company. Under the rule set forth in this subsection, more than one agency may be an appropriate Federal banking agency with respect to any given institution.”; and (5) by striking out subsection (t) and inserting in lieu thereof the following new subsection: “(t) Includes, Including.— 103 STAT. 193 “(1) In general,—The terms ‘includes’ and ‘including’ shall not be construed more restrictively than the ordinary usage of such terms so as to exclude any other thing not referred to or described. “(2) Rule of construction.—Paragraph (1) shall not be construed as creating any inference that the term ‘includes’ or ‘including’ in any other provision of Federal law may be deemed to exclude any other thing not referred to or described.”; (6) by adding at the end thereof the following new subsections: “(u) Institution-Affiliated Party.—The term ‘institution-affiliated party’ means— “(1) any director, officer, employee, or controlling stockholder (other than a bank holding company) of, or agent for, an insured depository institution; “(2) any other person who has filed or is required to file a change-in-control notice with the appropriate Federal banking agency under section 7(j); “(3) any shareholder (other than a bank holding company), consultant, joint venture partner, and any other person as determined by the appropriate Federal banking agency (by regulation or case-by-case) who participates in the conduct of the affairs of an insured depository institution; and “(4) any independent contractor (including any attorney, appraiser, or accountant) who knowingly or recklessly participates in— “(A) any violation of any law or regulation; “(B) any breach of fiduciary duty; or “(C) any unsafe or unsound practice, which caused or is likely to cause more than a minimal financial loss to, or a significant adverse effect on, the insured depository institution. “(v) Violation.—The term ‘violation’ includes any action (alone or with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation. “(w) Definitions Relating to Holding Companies.— “(1) Depository institution holding company.—The term ‘depository institution holding company’ means a bank holding company or a savings and loan holding company. “(2) Bank holding company.—The term ‘bank holding company’ has the meaning given to such term in section 2 of the Bank Holding Company Act of 1956. “(3) Savings and loan holding company.—The term ‘savings and loan holding company’ has the meaning given to such term in section 10 of the Home Owners’ Loan Act. “(4) Subsidiary.—The term ‘subsidiary’— “(A) means any company which is owned or controlled directly or indirectly by another company; and “(B) includes any service corporation owned in whole or in part by an insured depository institution or any subsidiary of such a service corporation. “(5) Control.—The term ‘control’ has the meaning given to such term in section 2 of the Bank Holding Company Act of 1956. “(6) Affiliate.—The term ‘affiliate’ has the meaning given to such term in section 2(k) of the Bank Holding Company Act of 1956. “(x) Definitions Relating to Default.— 103 STAT. 194 “(1) Default.—The term ‘default’ means, with respect to an insured depository institution, any adjudication or other official determination by any court of competent jurisdiction, the appropriate Federal banking agency, or other public authority pursuant to which a conservator, receiver, or other legal custodian is appointed for an insured depository institution or, in the case of a foreign bank having an insured branch, for such branch. “(2) In danger of default.—The term ‘in danger of default’ means an insured depository institution with respect to which (or in the case of a foreign bank having an insured branch, with respect to such insured branch) the appropriate Federal banking agency or State chartering authority has advised the Corporation (or, if the appropriate Federal banking agency is the Corporation, the Corporation has determined) that— “(A) in the opinion of such agency or authority— “(i) the depository institution or insured branch is not likely to be able to meet the demands of the institution’s or branch’s depositors or pay the institution’s or branch’s obligations in the normal course of business; and “(ii) there is no reasonable prospect that the depository institution or insured branch will be able to meet such demands or pay such obligations without Federal assistance; or “(B) in the opinion of such agency or authority— “(i) the depository institution or insured branch has incurred or is likely to incur losses that will deplete all or substantially all of its capital; and “(ii) there is no reasonable prospect that the capital of the depository institution or insured branch will be replenished without Federal assistance”. SEC. 205. INSURED SAVINGS ASSOCIATIONS. Section 4 of the Federal Deposit Insurance Act (12 U.S.C. 1814) is amended— (1) in subsection (a)— (A) by striking out “(a) Every bank” and inserting in lieu thereof the following: “(a) Continuation of Insurance.— “(1) Banks.—Each bank”; and (B) by adding at the end thereof the following new paragraph: “(2) Savings associations.—Each savings association the accounts of which were insured by the Federal Savings and Loan Insurance Corporation on the day before the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, shall be, without application or approval, an insured depository institution.”; (2) in subsection (b)— (A) by inserting after the 1st sentence the following new sentences: “Any application or notice for membership or to commence or resume business shall be promptly provided by the appropriate Federal banking agency to the Corporation and the Corporation shall have a reasonable period of time to provide comments on such application or notice. Any comments submitted by the Corporation to the appro-103 STAT. 195priate Federal banking agency shall be considered by such agency.”; (B) by striking out the penultimate and the last sentences; and (C) by striking out “(b) Every national bank” and inserting in lieu thereof “(b) Certification by Other Banking Agencies.—Every national bank”; and (3) by striking out subsection (c) and inserting in lieu thereof the following new subsections: “(c) Continuation of Insurance After Conversion.—Subject to section 5(d)— “(1) any State depository institution which results from the conversion of any insured Federal depository institution; and “(2) any Federal depository institution which results from the conversion of any insured State depository institution, shall continue as an insured depository institution. “(d) Continuation of Insurance After Merger or Consolidation.—Any State depository institution or any Federal depository institution which results from the merger or consolidation of insured depository institutions, or from the merger or consolidation of a noninsured depository institution with an insured depository institution, shall continue as an insured depository institution.”. SEC. 206. APPLICATION PROCESS; INSURANCE FEES. (a) In General.—Section 5 of the Federal Deposit Insurance Act (12 U.S.C. 1815) is amended— (1) by striking out “(a) Subject to the provisions of this Act, any” and inserting in lieu thereof the following: “(a) Application for Insurance.— “(1) National and state nonmember banks; state savings associations.—Any”; (2) in the 1st sentence of subsection (a)(1) (as so redesignated by paragraph (1) of this subsection), by striking out the comma after “State nonmember bank” and inserting in lieu thereof “and State savings association,”; and (3) in the 2nd sentence of subsection (a)(1) (as so redesignated by paragraph (1) of this subsection!— (A) by striking out the comma after “State nonmember bank” and inserting in lieu thereof “and State savings association,”; (B) by striking out the comma after “such bank” and inserting in lieu thereof “or savings association,”; and (C) by inserting “or savings association, and, in the case of an application by a State savings association, the Corporation snail notify the Director of the Office of Thrift Supervision of the Corporation’s approval of such application” before the period at the end; (4) by adding at the end of subsection (a) the following new paragraphs: “(2) Federal savings associations.—Any Federal savings association shall become an insured depository institution upon— “(A) application to the Corporation; and “(B) receipt by the Corporation of a certificate issued to the Corporation by the Director which meets the requirements of paragraph (4), unless insurance is denied by the Board of Directors. 103 STAT. 196 “(3) Interim federal savings associations.—In the case of any interim Federal savings association which is chartered by the Director of the Office of Thrift Supervision and will not open for business, such association shall be an insured depository institution upon the issuance of such association’s charter by the Director. “(4) Certificate requirements.—Any certificate issued to the Corporation under paragraph (2) shall state that the Federal savings association is authorized to transact business as a savings association and that consideration has been given to the factors enumerated in section 6. “(5) Review requirements.—In reviewing any certificate and application referred to in paragraph (2), the Board of Directors shall consider the factors described in paragraphs (1), (2), (3), (4), and (5) of section 6 in determining whether to deny insurance. “(6) ) Notice of denial of application.—If the Board of Directors, after giving due deference to the determination of the Director of the Office of Thrift Supervision with respect to such factors, does not concur in the determination of the Director, the Board of Directors shall promptly notify the Director that insurance has been denied, giving specific reasons in writing for the Corporation’s determination with reference to the factors described in paragraphs (1), (2), (3), (4), and (5) of section 6, and no insurance shall be granted. “(7) Voting requirements.—The authority of the Board of Directors to make any determination to deny insurance under this subsection may not be delegated by the Board of Directors and any such determination may be made only upon a vote of % of all members of the Board of Directors (excluding the Director of the Office of Thrift Supervision).”; (5) in subsection (b)(4), by inserting “and fitness” after character; (6) in subsection (b)— (A) by redesignating paragraphs (5), (6), and (7) as paragraphs (6), (7), and (8), respectively; and (B) by inserting after paragraph (4) the following: “(5) the risk presented to the Bank Insurance Fund or the Savings Association Insurance Fund;”; and (7) by adding at the end thereof the following new subsections: ‘(d) Insurance Fees.— “(1) Uninsured institutions.— “(A) In general.—Any institution that becomes insured by the Corporation, and any noninsured branch that becomes insured by the Corporation, shall pay the Corporation any fee which the Corporation may by regulation prescribe, after giving due consideration to the need to establish and maintain reserve ratios in the Bank Insurance Fund and the Savings Association Insurance Fund as required by section 7. “(B) Fee credited to appropriate fund.—The fee paid by the depository institution shall be credited to the Bank Insurance Fund if the depository institution becomes a Bank Insurance Fund member, and to the Savings Association Insurance Fund if the depository institution becomes a Savings Association Insurance Fund member. “(C) Exception for certain depository institutions.—Any depository institution that becomes an insured deposi-103 STAT. 197tory institution by operation of section 4(a) shall not pay any fee. “(2) Conversions.— “(A) In general.— “(i) Prior approval required.—No insured depository institution may participate in a conversion transaction without the prior approval of the Corporation. “(ii) 5-year moratorium on conversions.—Except as provided in subparagraph (C), the Corporation may not approve any conversion transaction before the end of the 5-year period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. “(B) Conversion defined.—For purposes of this paragraph, the term ‘conversion transaction’ means— “(i) the change of status of an insured depository institution from a Bank Insurance Fund member to a Savings Association Insurance Fund member or from a Savings Association Insurance Fund member to a Bank Insurance Fund member; “(ii) the merger or consolidation of a Bank Insurance Fund member with a Savings Association Insurance Fund member; “(iii) the assumption of any liability by— “(I) any Bank Insurance Fund member to pay any deposits of a Savings Association Insurance Fund member; or “(II) any Savings Association Insurance Fund member to pay any deposits of a Bank Insurance Fund member; “(iv) the transfer of assets of— “(I) any Bank Insurance Fund member to any Savings Association Insurance Fund member in consideration of the assumption of liabilities for any portion of the deposits of such Bank Insurance Fund member; or “(II) any Savings Association Insurance Fund member to any Bank Insurance Fund member in consideration of the assumption of liabilities for any portion of the deposits of such Savings Association Insurance Fund member. “(C) Approval during moratorium.—The Corporation may approve a conversion transaction at any time if— “(i) the conversion transaction affects an insubstantial portion, as determined by the Corporation, of the total deposits of each depository institution participating in the conversion transaction; “(ii) the conversion occurs in connection with the acquisition of a Savings Association Insurance Fund member in default or in danger of default, and the Corporation determines that the estimated financial benefits to the Savings Association Insurance Fund or Resolution Trust Corporation equal or exceed the Corporation’s estimate of loss of assessment income to such insurance fund over the remaining balance of the 5-year period referred to in subparagraph (A), and the 103 STAT. 198Resolution Trust Corporation concurs in the Corporation’s determination; or “(iii) the conversion occurs in connection with the acquisition of a Bank Insurance Fund member in default or in danger of default and the Corporation determines that the estimated financial benefits to the Bank Insurance Fund equal or exceed the Corporation’s estimate of the loss of assessment income to the insurance fund over the remaining balance of the 5-year period referred to in subparagraph (A). “(D) Certain transfers deemed to affect insubstantial portion of total deposits.—For purposes of subparagraph (C)(i), any conversion transaction shall be deemed to affect an insubstantial portion of the total deposits of an insured depository institution, to the extent the aggregate amount of the total deposits transferred in such transaction and in all conversion transactions occurring after the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 does not exceed 35 percent of the lesser of— “(i) the amount which is equal to the sum of— “(I) the total deposits of such insured depository institution on May 1, 1989; and “(II) the total amount of net interest credited to the depository institution’s deposits during the period beginning on May 1, 1989, and ending on the date of the transfer of deposits in connection with such transaction; or “(ii) the amount which is equal to the total deposits of such insured depository institution on the date of the transfer of deposits in connection with such transaction. “(E) Exit and entrance fees.—Each insured depository institution participating in a conversion transaction shall pay— “(i) in the case of a conversion transaction in which the resulting or acquiring depository institution is not a Savings Association Insurance Fund member, an exit fee (in an amount to be determined and assessed in accordance with subparagraph (F)) which— “(I) shall be deposited in the Savings Association Insurance Fund; or “(II) shall be paid to the Financing Corporation, if the Secretary of the Treasury determines that the Financing Corporation has exhausted all other sources of funding for interest payments on the obligations of the Financing Corporation and orders that such fees be paid to the Financing Corporation; “(ii) in the case of a conversion transaction in which the resulting or acquiring depository institution is not a Bank Insurance Fund member, an exit fee in an amount to be determined by the Corporation (and assessed in accordance with subparagraph (F)(ii)) which shall be deposited in the Bank Insurance Fund; and 103 STAT. 199 “(iii) an entrance fee in an amount to be determined by the Corporation (and assessed in accordance with subparagraph (F)(ii)), except that— “(I) in the case of a conversion transaction in which the resulting or acquiring depository institution is a Bank Insurance Fund member, the fee shall be the approximate amount which the Corporation calculates as necessary to prevent dilution of the Bank Insurance Fund, and shall be paid to the Bank Insurance Fund; and “(II) in the case of a conversion transaction in which the resulting or acquiring depository institution is a Savings Association Insurance Fund member, the fee shall be the approximate amount which the Corporation calculates as necessary to prevent dilution of the Savings Association Insurance Fund, and shall be paid to the Savings Association Insurance Fund. “(F) Assessment of exit and entrance fees.— “(i) Determination of amount of exit fees.— “(I) Conversions before January i, 1997.—In the case of any exit fee assessed under subparagraph (E)(i) for any conversion transaction consummated before January 1, 1997, the amount of such fee shall be determined jointly by the Corporation and the Secretary of the Treasury. “(II) Assessments after December, 31, 1996.—In the case of any exit fee assessed under subparagraph (E)(i) for any conversion transaction consummated after December 31, 1996, the amount of such fee shall be determined by the Corporation. “(ii) Procedures.—The Corporation shall prescribe, by regulation, procedures for assessing any exit or entrance fee under subparagraph (E). “(G) Charter conversion of saif members.—This subsection shall not be construed as prohibiting any savings association which is a Savings Association Insurance Fund member from converting to a bank charter during the period described in subparagraph (A)(ii) if the resulting bank remains a Savings Association Insurance Fund member. “(3) Optional conversion through merger.— “(A) In general.—Notwithstanding paragraph (2)(A), any bank holding company that controls any savings association may merge or consolidate the assets and liabilities of such savings association with, or transfer such assets and liabilities to, any subsidiary bank which is a Bank Insurance Fund member with the approval of the appropriate Federal banking agency and the Board of Governors of the Federal Reserve System. “(B) Assessments by saif on deposits attributable to former savings association.—That portion of the average assessment base of any subsidiary bank referred to in subparagraph (A) for any semiannual period which is equal to the adjusted attributable deposit amount (determined under subparagraph (C) with respect to the transaction described in subparagraph (A)) shall— 103 STAT. 200 “(i) be subject to assessment at the assessment rate applicable under section 7 for Savings Association Insurance Fund members; “(ii) shall not be taken into account for purposes of any assessment under section 7 for Bank Insurance Fund members; and “(iii) shall be treated as deposits which are insured by the Savings Association Insurance Fund. “(C) Determination of adjusted attributable deposit amount.—The adjusted attributable deposit amount which shall be taken into account by any bank subsidiary referred to in subparagraph (A) for purposes of determining the amount of the assessment under subparagraph (B)(i) for any semiannual period is the amount which is equal to the sum of— “(i) the amount of any deposits acquired by such bank subsidiary in connection with any transaction described in subparagraph (A) (as determined at the time of such transaction); “(ii) the total of the amounts determined under clause (iii) for semiannual periods preceding the semiannual period for which the determination is being made under this subparagraph; and “(iii) the amount by which the sum of the amounts described in clauses (i) and (ii) would have increased during the preceding semiannual period (other than any semiannual period beginning before the date of such transaction) if such increase occurred at a rate equal to the greater of— “(I) an annual rate of 7 percent; or “(II) the annual rate of growth of deposits of such subsidiary bank minus the amount of any deposits acquired through the acquisition, in whole or in part, of a Bank Insurance Fund member during such semiannual period. “(D) Deposit of assessment.—The amount of the assessment referred to in subparagraph (B)(i) shall be deposited in the Savings Association Insurance Fund. “(E) Conditions for federal reserve board approval.—The Board of Governors of the Federal Reserve System may not approve any application by any bank holding company to engage in any transaction described in subparagraph (A) unless such Board determines that— “(i) the amount which is equal to the aggregate amount of the total assets of all depository institution subsidiaries of such bank holding company is not less than the amount which is equal to 200 percent of the total assets of the savings association (at the time of the proposed transaction); “(ii) the bank holding company and all bank subsidiaries of such holding company will meet all applicable capital standards upon consummation of the proposed transaction; “(iii) the transaction is not in substance the acquisition of any Bank Insurance Fund member bank by any Savings Association Insurance Fund member; “(iv) in the case of any transaction which occurs— 103 STAT. 201 “(I) during the 1-year period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the savings association had tangible capital of less than 4 percent during the preceding quarter; and “(II) during the 1-year period beginning after the end of the 1-year period referred to in subclause (1), the savings association had tangible capital of less than 5 percent during the preceding quarter; and “(v) the transaction would comply with the requirements of section 3(d) of the Bank Holding Company Act of 1956 if, at the time of such transaction, the savings association were a State bank which the bank holding company was applying to acquire. “(F) Allocation of costs in event of default.—If any subsidiary bank referred to in subparagraph (A) is in default or danger of default at any time before this paragraph ceases to apply, any loss incurred by the Corporation shall be allocated between the Bank Insurance Fund and the Savings Association Insurance Fund, in amounts reflecting the amount of insured deposits of such bank subsidiary (other than the adjusted attributable deposit amount) which is insured by the Bank Insurance Fund and the adjusted attributable deposit amount which is insured by the Savings Association Insurance Fund pursuant to subparagraph (B)(iii)- “(G) Subsequent approval of conversion transaction.—This paragraph shall cease to apply if— “(i) after the end of the 5-year period referred to in paragraph (2)(A), the Corporation approves an application by the bank described in subparagraph (A) to treat the transaction described in subparagraph (A) as a conversion transaction; and “(ii) such bank pays the amount of any exit and entrance fee assessed by the Corporation under paragraph (2)(E) with respect to such transaction. “(e) Liability of Commonly Controlled Depository Institutions.— “(1) In general.— “(A) Liability established.—Any insured depository institution shall be liable for any loss incurred by the Corporation, or any loss which the Corporation reasonably anticipates incurring, after the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 in connection with— “(i) the default of a commonly controlled insured depository institution; or “(ii) any assistance provided by the Corporation to any commonly controlled insured depository institution in danger of default. “(B) Payment upon notice.—An insured depository institution shall pay the amount of any liability to the Corporation under subparagraph (A) upon receipt of written notice by the Corporation in accordance with this subsection. “(C) Notice required to be provided within 2 years of loss.—No insured depository institution shall be liable to 103 STAT. 202the Corporation under subparagraph (A) if written notice with respect to such liability is not received by such institution before the end of the 2-year period beginning on the date the Corporation incurred the loss. “(2) Amount of compensation; procedures.— “(A) Use of estimates.—When an insured depository institution is in default or requires assistance to prevent default, the Corporation shall— “(i) in good faith, estimate the amount of the loss the Corporation will incur from such default or assistance; “(ii) if, with respect to such insured depository institution, there is more than 1 commonly controlled insured depository institution, estimate the amount of each such commonly controlled depository institution’s share of such liability; and “(iii) advise each commonly controlled depository institution of the Corporation’s estimate of the amount of such institution’s liability for such losses. “(B) Procedures; immediate payment.—The Corporation, after consultation with the appropriate Federal banking agency and the appropriate State chartering agency, shall— “(i) on a case-by-case basis, establish the procedures and schedule under which any insured depository institution shall reimburse the Corporation for such institution’s liability under paragraph (1) in connection with any commonly controlled insured depository institution; or “(ii) require any insured depository institution to make immediate payment of the amount of such institution’s liability under paragraph (1) in connection with any commonly controlled insured depository institution. “(C) Priority.—The liability of any insured depository institution under this subsection shall have priority with respect to other obligations and liabilities as follows: “(i) Superiority.—The liability shall be superior to the following obligations and liabilities of the depository institution: “(I) Any obligation to shareholders arising as a result of their status as shareholders (including any depository institution holding company or any shareholder or creditor of such company). “(II) Any obligation or liability owed to any affiliate of the depository institution (including any other insured depository institution), other than any secured obligation which was secured as of May 1, 1989. “(ii) Subordination.—The liability shall be subordinate in right and payment to the following obligations and liabilities of the depository institution: “(I) Any deposit liability (which is not a liability described in clause (i)(II). “(II) Any secured obligation, other than any obligation owed to any affiliate of the depository institution (including any other insured depository institution) which was secured after May 1, 1989. 103 STAT. 203 “(III) Any other general or senior liability (which is not a liability described in clause (i)). “(IV) Any obligation subordinated to depositors or other general creditors (which is not an obligation described in clause (i)). “(D) Adjustment of estimated payment.— “(i) Overpayment.—If the amount of compensation estimated by and paid to the Corporation by 1 or more such commonly controlled depository institutions is greater than the actual loss incurred by the Corporation, the Corporation shall reimburse each such commonly controlled depository institution its pro rata share of any overpayment. “(ii) Underpayment.—If the amount of compensation estimated by and paid to the Corporation by 1 or more such commonly controlled depository institutions is less than the actual loss incurred by the Corporation, the Corporation shall redetermine in its discretion the liability of each such commonly controlled depository institution to the Corporation and shall require each such commonly controlled depository institution to make payment of any additional liability to the Corporation. “(3) Review.— “(A) Judicial.—Actions of the Corporation shall be reviewable pursuant to chapter 7 of title 5, United States Code. “(B) Administrative.—The Corporation shall prescribe regulations and establish administrative procedures which provide for a hearing on the record for the review of— “(i) the amount of any loss incurred by the Corporation in connection with any insured depository institution; “(ii) the liability of individual commonly controlled depository institutions for the amount of such loss; and “(iii) the schedule of payments to be made by such commonly controlled depository institutions. “(4) Limitation on rights of private parties.—To the extent the exercise of any right or power of any person would impair the ability of any insured depository institution to perform such institution’s obligations under this subsection— “(i) the obligations of such insured depository institution shall supersede such right or power; and “(ii) no court may give effect to such right or power with respect to such insured depository institution. “(5) Waiver authority.— “(A) In general.—The Corporation, in its discretion, may exempt any insured depository institution from the provisions of this subsection if the Corporation determines that such exemption is in the best interests of the Bank Insurance Fund or the Savings Association Insurance Fund. “(B) Condition.—During the period any exemption granted to any insured depository institution under subparagraph (A) or (C) is in effect, such insured depository institution and all other insured depository institution affiliates of such depository institution shall comply fully 103 STAT. 204with the restrictions of sections 23A and 23B of the Federal Reserve Act without regard to section 23A(d)(1). “(C) Limited partnerships.— “(i) In general.—The Corporation may, in its discretion, exempt any limited partnership and any affiliate of any limited partnership (other than any insured depository institution which is a majority owned subsidiary of such partnership) from the provisions of this subsection if such limited partnership or affiliate has filed a registration statement with the Securities and Exchange Commission on or before April 10, 1989, indicating that as of the date of such filing such partnership intended to acquire 1 or more insured depository institutions. “(ii) Review and notice.—Within 10 business days after the date of submission of any request for an exemption under this subparagraph together with such information as shall be reasonably requested by the Corporation, the Corporation shall make a determination on the request and shall so advise the applicant. “(6) 5-year transition rule.—During the 5-year period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989— “(A) no Savings Association Insurance Fund member shall have any liability to the Corporation under this subsection arising out of assistance provided by the Corporation or any loss incurred by the Corporation as a result of the default of a Bank Insurance Fund member which was acquired by such Savings Association Insurance Fund member or any affiliate of such member before the date of the enactment of such Act; and “(B) no Bank Insurance Fund member shall have such liability with respect to assistance provided by or loss incurred by the Corporation as a result of the default of a Savings Association Insurance Fund member which was acquired by such Bank Insurance Fund member or any affiliate of such member before the date of the enactment of such Act. “(7) Exclusion for institutions acquired in debt collections.—Any depository institution shall not be treated as commonly controlled, for purposes of this subsection, during the 5-year period beginning on the date of an acquisition described in subparagraph (A) or such longer period as the Corporation may determine after written application by the acquirer, if— “(A) 1 depository institution controls another by virtue of ownership of voting shares acquired in securing or collecting a debt previously contracted in good faith; and “(B) during the period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and ending upon the expiration of the exclusion, the controlling bank and all other insured depository institution affiliates of such controlling bank comply fully with the restrictions of sections 23A and 23B of the Federal Reserve Act, without regard to section 23A(d)(1) of such Act, in transactions with the acquired insured depository institution. 103 STAT. 205 “(8) Exception for certain fslic assisted institutions.— No depository institution shall have any liability to the Corporation under this subsection as the result of the default of, or assistance provided with respect to, an insured depository institution which is an affiliate of such depository institution if— “(A) such affiliate was receiving cash payments from the Federal Savings and Loan Insurance Corporation under an assistance agreement or note entered into before the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989; “(B) the Federal Savings and Loan Insurance Corporation, or such other entity which has succeeded to the payment obligations of such Corporation with respect to such assistance agreement or note, is unable to continue such payments; and “(C) such affiliate— “(i) is in default or in need of assistance solely as a result of the failure to meet the payment obligations referred to in subparagraph (B); and “(ii) is not otherwise in breach of the terms of any assistance agreement or note which would authorize the Federal Savings and Loan Insurance Corporation or such other successor entity, pursuant to the terms of such assistance agreement or note, to refuse to make such payments. “(9) Commonly controlled defined.— For purposes of this subsection, depository institutions are commonly controlled if— “(A) such institutions are controlled by the same depository institution holding company (including any company required to file reports pursuant to section 4(f)(6) of the Bank Holding Company Act of 1956); or “(B) 1 depository institution is controlled by another depository institution.”. (b) Newly Insured Thrift Provision.—Any insured depository institution (as defined in section 3(c)(2) of the Federal Deposit Insurance Act, as added by section 204(c) of this Act)— (1) which was an insured institution (as defined in section 401(a) of the National Housing Act, as in effect before the date of the enactment of this Act) on the day before the date of the enactmen t of this Act; (2) the board of directors of which determined, before April 1, 1987, to terminate such association’s status as an insured institution (as so defined) as evidenced in sworn minutes of the board of directors meeting held before such date; (3) had insured deposits of less than $11,000,000 on April 1, 1987; and (4) was an insured institution (as so defined) for less than 1 year as of April 1, 1987, may cease to be a Savings Association Insurance Fund member and become a Bank Insurance Fund member at any time during the 2-year period beginning on the date of the enactment of this Act without the approval of the Federal Deposit Insurance Corporation under section 5(d)(2) of the Federal Deposit Insurance Act (as added by subsection (a) of this section) and without incurring any liability for any exit or entrance fee imposed under such section 5(d)(2). 103 STAT. 206 SEC. 207. INSURABILITY FACTORS. Section 6 of the Federal Deposit Insurance Act (12 U.S.C. 1816) is amended to read as follows: “SEC. 6. FACTORS TO BE CONSIDERED. “The factors that are required, under section 4, to be considered in connection with, and enumerated in, any certificate issued pursuant to section 4 and that are required, under section 5, to be considered by the Board of Directors in connection with any determination by such Board pursuant to section 5 are the following: “(1) The financial history and condition of the depository institution. “(2) The adequacy of the depository institution’s capital structure. “(3) The future earnings prospects of the depository institution. “(4) The general character and fitness of the management of the depository institution. “(5) The risk presented by such depository institution to the Bank Insurance Fund or the Savings Association Insurance Fund. “(6) The convenience and needs of the community to be served by such depository institution. “(7) Whether the depository institution’s corporate powers are consistent with the purposes of this Act.”. SEC. 208. ASSESSMENTS. Section 7 of the Federal Deposit Insurance Act (12 U.S.C. 1817) is amended— (1) in subsection (a)(2)— (A) by inserting “, the Director of the Office of Thrift Supervision, the Federal Housing Finance Board, any Federal home loan bank,” after “Comptroller of the Currency” each place such term appears (except after “Comptroller of the Currency,”); (B) by inserting “the Director of the Office of Thrift Supervision, the Federal Housing Finance Board, any Federal home loan bank,” after “Comptroller of the Currency,”; (C) by striking out “either” in the 1st sentence and inserting in lieu thereof “any”; (D) in the last sentence of subparagraph (A), by inserting “or savings associations” after “banks”; (E) by striking out “State nonmember bank (except a District bank)” and inserting in lieu thereof “depository institution”; and (F) by striking out subparagraph (B) and inserting the following: “(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 agreement with the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Director of the Office of Thrift Supervision, as appropriate, may deem advisable for insurance purposes.”; (2) in subsection (a)(3)— 103 STAT. 207 (A) by striking out “Each insured State nonmember bank” and all that follows through ‘four reports” and inserting the following: “Each insured depository institution shall make to the appropriate Federal banking agency 4 reports”; (B) by striking out “bank” each place such term appears in the 2nd, 5th, and 6th sentences and inserting in lieu thereof “depository institution”; (C) by striking out “insured national, District” and all that follows through “member bank” in the 7th sentence and inserting in lieu thereof “insured depository institution”; and (D) by inserting “or savings associations” after “banks” in the last sentence; (3) in subsection (a)(4), by striking out “bank”, “bank’s”, and “banks” each place such terms appear (except in “foreign bank”) and inserting in lieu thereof “;depository institution”, “depository institution’s”, and “depository institutions”, respectively; (4) by striking out paragraphs (1) and (2) of subsection (b) and inserting the following: “(1) Assessment rates.— “(A) Annual assessment rates prescribed.— “(i) The Corporation shall set assessment rates for insured depository institutions annually. “(ii) The Corporation shall fix the annual assessment rate of Bank Insurance Fund members independently from the annual assessment rate for Savings Association Insurance Fund members. “(iii) The Corporation shall, by September 30 of each year, announce the assessment rates for the succeeding calendar year. “(B) Designated reserve ratio defined.— “(i) The designated reserve ratio of the Bank Insurance Fund for each year shall be— “(I) 1.25 percent of estimated insured deposits; or “(II) such higher percentage of estimated insured deposits, not exceeding 1.50 percent, as the Board of Directors determines for that year to be justified by circumstances that raise a significant risk of substantial future losses to the Bank Insurance Fund. “(ii) The designated reserve ratio of the Savings Association Insurance Fund for each year shall be— “(I) 1.25 percent of estimated insured deposits; or “(II) such higher percentage of estimated insured deposits, not exceeding 1.50 percent, as the Board of Directors determines for that year to be justified by circumstances that raise a significant risk of substantial future losses to the Savings Association Insurance Fund. “(iii) The Board of Directors shall— “(I) maintain reserves in the Bank Insurance Fund received pursuant to clause (i)(II) as Supplemental Reserves in the Bank Insurance Fund; “(II) allocate each calendar quarter to an Earnings Participation Account in the Bank Insurance103 STAT. 208Fund the investment income earned by the Bank Insurance Fund on such Supplemental Reserves in the preceding calendar quarter; “(III) distribute such Earnings Participation Account at the conclusion of each calendar year to Bank Insurance Fund members; and “(IV) distribute such Supplemental Reserves to Bank Insurance Fund members if and to the extent the Corporation determines that such Supplemental Reserves are not needed to satisfy the projected designated reserve ratio for the next succeeding calendar year. “(iv) The Board of Directors shall— “(I) maintain reserves in the Savings Association Insurance Fund received pursuant to clause (ii)(ID as Supplemental Reserves in the Savings Association Insurance Fund; “(II) allocate each calendar quarter to an Earnings Participation Account in the Savings Association Insurance Fund the investment income earned by the Savings Association Insurance Fund on such Supplemental Reserves in the preceding calendar quarter; “(III) distribute such Earnings Participation Account at the conclusion of each calendar year to Savings Association Insurance Fund members; and “(IV) distribute such Supplemental Reserves to Savings Association Insurance Fund members if and to the extent the Corporation determines that such Supplemental Reserves are not needed to satisfy the projected designated reserve ratio for the next succeeding calendar year. “(C) Assessment rate for bank insurance fund members.—The annual assessment rate for Bank Insurance Fund members shall be— “(i) until December 31, 1989, Via of 1 percent; “(ii) from January 1, 1990, through December 31, 1990, 0.12 percent; “(iii) on and after January 1, 1991, 0.15 percent; “(iv) on January 1 of a calendar year in which the reserve ratio of the Bank Insurance Fund is expected to be less than the designated reserve ratio by determination of the Board of Directors, such rate determined by the Board of Directors to be appropriate to restore the reserve ratio to the designated reserve ratio within a reasonable period of time, after taking into consideration the expected operating expenses, case resolution expenditures, and investment income of the Bank Insurance Fund, and the impact on insured bank earnings and capitalization, except that— “(I) from the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 until the earlier of January 1, 1995, or January 1 of the calendar year in which the Bank Insurance Fund reserve ratio is expected to first attain the designated reserve ratio, the rate shall be as specified in clauses (i), (ii), and (iii) of 103 STAT. 209this subparagraph so long as the Bank Insurance Fund reserve ratio is increasing on a calendar year basis; “(II) the rate shall not exceed 0.325 percent; and “(III) the increase in the rate in any 1 year shall not exceed 0.075 percent; and “(v) sufficient to ensure that for each member in each year the assessment shall not be less than $1,000. “(D) Assessment rate for savings association insurance fund members.—The annual assessment rate for Savings Association Insurance Fund members shall be— “(i) until December 31, 1990, 0.208 percent; “(ii) from January 1, 1991, through December 31, 1993, 0.23 percent; “(iii) from January 1, 1994, through December 31, 1997, 0.18 percent; “(iv) on and after January 1, 1998, 0.15 percent; “(v) on January 1 of a calendar year in which the reserve ratio of the Savings Association Insurance Fund is expected to be less than the designated reserve ratio by determination of the Board of Directors, such rate determined by the Board of Directors to be appropriate to restore the reserve ratio to the designated reserve ratio within a reasonable period of time, after taking into consideration the expected expenses and income of the Savings Association Insurance Fund, and the effect on insured savings association earnings and capitalization, except that— “(I) from the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 through December 31, 1994, the rate shall be as specified in clauses (i), (ii), and (iii) above; “(II) the rate shall not exceed 0.325 percent; and “(III) the increase in the rate in any one year shall not exceed 0.075 percent; and “(vi) sufficient to ensure that for each member in each year the assessment shall not be less than $1,000. “(E) Financing corporation and funding corporation assessments.—Notwithstanding any other provision of this paragraph, amounts assessed by the Financing Corporation and the Funding Corporation under sections 21 and 21B, respectively, of the Federal Home Loan Bank Act against Savings Association Insurance Fund members, shall be subtracted from the amounts authorized to be assessed by the Corporation under this paragraph. “(F) Special rule to allow continuing assessments by THE FINANCING CORPORATION AND THE FUNDING CORPORATION DURING PREMIUM YEAR ADJUSTMENTS.—In Order to ensure that the Financing Corporation and the Resolution Funding Corporation obtain sufficient funds for interest payments on obligations of such corporations, the Corporation, in coordination with the Financing Corporation and the Secretary of the Treasury, may prescribe such regulations as may be necessary to allow the Financing Corporation and the Resolution Funding Corporation to impose assessments against Savings Association Insurance 103 STAT. 210Fund members pursuant to sections 21 and 21B, respectively, of the Federal Home Loan Bank Act during the period required to change such members’ premium year from the 1-year period applicable under section 404(b) 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) to a calendar year basis. “(2) Assessment procedures.— “(A) Semiannual assessments.—Except as provided in subsection (c)(2)— “(i) the semiannual assessment due from any Bank Insurance Fund member for any semiannual period shall be equal to the product of— “(I) Va the annual assessment rate applicable to such Bank Insurance Fund member; and “(II) such Bank Insurance Fund member’s average assessment base for the immediately preceding semiannual period; and “(ii) the semiannual assessment due from any Savings Association Insurance Fund member for any semiannual period shall be equal to the product of— “(I) ½ the annual assessment rate applicable to such Savings Association Insurance Fund member; and “(II) such Savings Association Insurance Fund member’s average assessment base for the immediately preceding semiannual period. “(B) Definition.—For purposes of this section, the term ‘semiannual period’ means a period beginning on January 1 of any calendar year and ending on June 30 of the same year, or a period beginning on July 1 of any calendar year and ending on December 31 of the same year.”; (5) by amending subsection (d) to read as follows: “(d) Assessment Credits.— “(1) In general.— “(A) By September 30 of each calendar year, the Corporation shall prescribe and publish the aggregate amount to be credited to insured depository institutions in the succeeding calendar year. “(B) Each insured depository institution shall be notified by the Corporation of the percentage by which the assessment rate should be reduced in computing its net premium. “(C) Any outstanding obligations owed to the Corporation by an individual insured depository institution shall be deducted from any assessment credit to be credited to such depository institution. “(2) Assessment credit for insured banks.— “(A) Credit barred.—The Board of Directors shall not prescribe an assessment credit to Bank Insurance Fund members if the Board of Directors determines that the Bank Insurance Fund reserve ratio is expected to be equal to or less than the designated reserve ratio in the coming year after taking into consideration such Fund’s expected expenses and income. “(B) Credit authorized.—If the Board of Directors determines, after taking into consideration the Bank Insurance Fund’s expected operating expenses, case resolution expenditures, investment income, and assessment income, 103 STAT. 211that the Bank Insurance Fund reserve ratio is expected to exceed the designated reserve ratio in the succeeding year, the Board of Directors shall prescribe an assessment credit to Bank Insurance Fund members in such succeeding calendar year equal to the lesser of— “(i) the amount necessary to reduce the Bank Insurance Fund reserve ratio to the designated reserve ratio; or “(ii) 100 percent of the net assessment income to be received from Bank Insurance Fund members in such succeeding year. “(3) Assessment credit for insured savings associations.— “(A) Credit barred.—The Board of Directors shall not prescribe an assessment credit to Savings Association Insurance Fund members if the Board of Directors determines that the Savings Association Insurance Fund reserve ratio is expected to be equal to or less than the designated reserve ratio in the coming year after taking into consideration such Fund’s expected expenses and income. “(B) Credit authorized.— If the Board of Directors determines, after taking into consideration the Savings Association Insurance Fund’s expected expenses and income, that the Savings Association Insurance Fund reserve ratio is expected to exceed the designated reserve ratio in the succeeding year, the Board of Directors shall prescribe an assessment credit to Savings Association Insurance Fund members in such succeeding calendar year equal to the lesser of— “(i) the amount necessary to reduce the Savings Association Insurance Fund reserve ratio to the designated reserve ratio; or “(ii) 100 percent of the net assessment income to be received from Savings Association Insurance Fund members in such succeeding year. “(4) Net assessment income defined.—For purposes of this subsection— “(A) In general.—The term ‘net assessment income’ means— “(i) with respect to the Bank Insurance Fund, the Bank Insurance Fund net assessment income (as defined in subparagraph (B)); and “(ii) with respect to the Savings Association Insurance Fund, the Savings Association Insurance Fund net assessment income (as defined in subparagraph (C)). “(B) Bank insurance fund net assessment income.— “(i) In general.—The term ‘Bank Insurance Fund net assessment income’ means— “(I) the total assessments which become due during the calendar year with respect to members of such Fund, minus “(II) the sum of the amount of the operating costs and expenses described in clause (ii) and the amount by which the Bank Insurance Fund’s insurance costs described in clause (iii) exceed its investment income for the calendar year. “(ii) Operating cost and expenses.—For the purposes of this subparagraph, the operating costs and 103 STAT. 212expenses to be deducted from assessments include the operating costs and expenses of— “(I) the Corporation for the calendar year directly attributable to the Bank Insurance Fund; and “(II) the Bank Insurance Fund. “(iii) Insurance costs.—For purposes of this subparagraph, the insurance costs include— “(I) additions to the Bank Insurance Fund’s reserve to provide for insurance losses during the calendar year, excluding any adjustments to such reserve which result in a reduction of such reserve; and “(II) the insurance losses sustained in such calendar year. “(C) Savings association insurance fund net assessment income.— “(i) In general.—The term ‘Savings Association Insurance Fund net assessment income’ means— “(I) the total assessments which become due during the calendar year with respect to members of such Fund, minus “(II) the sum of the amount of the operating costs and expenses described in clause (ii) and the amount by which the Savings Association Insurance Fund’s insurance costs described in clause (iii) exceed its investment income for the calendar year. “(ii) Operating cost and expenses.—For purposes of this subparagraph, the operating costs and expenses to be deducted from assessments include the operating costs and expenses of— “(I) the Corporation for the calendar year directly attributable to the Savings Association Insurance Fund; and “(II) the Savings Association Insurance Fund. “(iii) Insurance costs.—For the purposes of this subparagraph, the insurance costs include— “(I) additions to the Savings Association Insurance Fund’s reserve to provide for insurance losses during the calendar year, excluding any adjustments to such reserve which result in a reduction of such reserve; and “(II) the insurance losses sustained in such calendar year. “(5) Investment income defined.—For purposes of this subsection, the term ‘investment income’ means— “(A) for the Bank Insurance Fund, interest, dividends, and net market gains earned on investments of the Bank Insurance Fund; and “(B) for the Savings Association Insurance Fund, interest, dividends, and net market gains earned on investments of the Savings Association Insurance Fund.”. (6) in paragraphs (3), (4), (5), (6), (7), and (8) of subsection (b), by striking out “bank”, “bank’s”, and “banks” each place such term appears (except where “foreign” precedes any of such terms) and inserting in lieu thereof “depository institution”, 103 STAT. 213“depository institution’s”, and “depository institutions”, respectively; (7) in subsections (c), (e), (f), (g), and (i), by striking out “bank” each place such term appears and inserting in lieu thereof “depository institution”; (8) in subsection (j)(1). by striking out the last sentence; (9) in subsection (j)(2)(A)— (A) by striking out “failure” and inserting in lieu thereof “default”; and (B) by striking out “bank” each place such term appears and inserting in lieu thereof “depository institution”; (10) in subsection (j)(2)(D), by inserting “unless such agency determines that an emergency exists,” after “shall,”; (11) in subsection (j)(7)— (A) by striking out “or” at the end of subparagraph (D); (B) by striking out the period at the end of subparagraph (E) and inserting in lieu thereof “; or”; and (C) by adding at the end thereof the following new subparagraph: “(F) the appropriate Federal banking agency determines that the proposed transaction would result in an adverse effect on the Bank Insurance Fund or the Savings Association Insurance Fund.”; (12) by amending subsection (j)(17) to read as follows: “(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.”; (13) by adding at the end of subsection (j) the following new paragraph: “(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.”; (14) by adding at the end thereof the following new subsection: “(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 103 STAT. 214enactment 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 value of the net worth of the Savings Association Insurance Fund to the value of the aggregate estimated insured deposits held in ail Savings Association Insurance Fund members.”; (15) by adding after the subsection added by paragraph (14) of this section the following new subsections: “(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 thinning 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 103 STAT. 215extent 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 savings association 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 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 103 STAT. 216date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989) after the banning 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 Director of the Office of Thrift Supervision.—When requested by the Director of the Office of Thrift Supervision, the Corporation shall collect on behalf of the Director assessments on savings associations levied by the Director 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 Director shall be in addition to any amounts assessed by the Corporation, the Financing Corporation, and the Resolution Funding Corporation.”. SEC. 209. CORPORATE POWERS OF THE FDIC. Section 9 of the Federal Deposit Insurance Act (12 U.S.C. 1819) is amended— (1) by striking out “bank” and “banks” each place such terms appear (except in the last sentence of the paragraph designated the “Fourth”) and inserting in lieu thereof “depository institution” and “depository institutions”, respectively; and (2) by striking out “Upon the date” and inserting the following: “(a) In General.—Upon the date”; (3) by amending the paragraph designated the “Fourth” to read as follows: “Fourth. To sue and be sued, and complain and defend, in any court of law or equity. State or Federal.”; and (4) by adding at the end thereof the following new subsection: “(b) Agency Authority.— “(1) Status.—The Corporation, in any capacity, shall be an agency of the United States for purposes of section 1345 of title 28, United States Code, without regard to whether the Corporation commenced the action. “(2) Federal court jurisdiction.— “(A) In general.—Except as provided in subparagraph (D), all suits of a civil nature at common law or in equity to which the Corporation, in any capacity, is a party shall be deemed to arise under the laws of the United States. “(B) Removal.—Except as provided in subparagraph (D), the Corporation may, without bond or security, remove any action, suit, or proceeding from a State court to the appropriate United States district court. 103 STAT. 217 “(C) Appeal of remand.—The Corporation may appeal any order of remand entered by any United States district court. “(D) State actions.—Except as provided in subparagraph (E), any action— “(i) to which the Corporation, in the Corporation’s capacity as receiver of a State insured depository institution by the exclusive appointment by State authorities, is a party other than as a plaintiff; “(ii) which involves only the preclosing rights against the State insured depository institution, or obligations owing to, depositors, creditors, or stockholders by the State insured depository institution; and “(iii) in which only the interpretation of the law of such State is necessary, shall not be deemed to arise under the laws of the United States. “(E) Rule of construction.—Subparagraph (D) shall not be construed as limiting the right of the Corporation to invoke the jurisdiction of any United States district court in any action described in such subparagraph if the institution of which the Corporation has been appointed receiver could have invoked the jurisdiction of such court. “(3) Service of process.—The Board of Directors shall designate agents upon whom service of process may be made in any State, territory, or jurisdiction in which any insured depository institution is located. “(4) Bonds or fees.—The Corporation shall not be required to post any bond to pursue any appeal and shall not be subject to payments of any filing fees in United States district courts or courts of appeal.”. SEC. 210. ADMINISTRATION of corporation. (a) Examination Authority.—Section 10(b) of the Federal Deposit Insurance Act (12 U.S.C. 1820(b)) is amended to read as follows: “(b) Examinations.— “(1) Appointment of examiners and claims agents.—The Board of Directors shall appoint examiners and claim agents. “(2) Regular examinations.—Any examiner appointed under paragraph (1) shall have power, on behalf of the Corporation, to examine— “(A) any insured State nonmember bank (except a District bank) or insured State branch of any foreign bank; “(B) any savings association, State nonmember bank, or State branch of a foreign bank, or other depository institution which files an application with the Corporation to become an insured depository institution; and “(C) any insured depository institution in default, whenever the Board of Directors determines an examination of any such depository institution is necessary. “(3) Special examination of any insured depository institution.—In addition to the examinations authorized under paragraph (2), any examiner appointed under paragraph (1) shall have power, on behalf of the Corporation, to make any special examination of any insured depository institution whenever the Board of Directors determines a special examination of 103 STAT. 218any such depository institution is necessary to determine the condition of such depository institution for insurance purposes. “(4) Examination of affiliates.— “(A) In general.—In making any examination under paragraph (2) or (3), any examiner appointed under paragraph (1) shall have power, on behalf of the Corporation, to make such examinations of the affairs of any affiliate of any insured depository institution as may be necessary to disclose fully— “(i) the relationship between such insured depository institution and any such affiliate; and “(ii) the effect of such relationship on the insured depository institution. “(B) Commitment by foreign banks to allow examinations of affiliates.—No branch or depository institution subsidiary of a foreign bank may become an insured depository institution unless such foreign bank submits a written binding commitment to the Board of Directors to permit any examination of any affiliate of such branch or depository institution subsidiary pursuant to subparagraph (A) to the extent determined by the Board of Directors to be necessary to carry out the purposes of this Act. “(5) Power and duty of examiners.—Each examiner appointed under paragraph (1) shall— “(A) have power to make a thorough examination of any insured depository institution or affiliate under paragraph (2), (3), or (4); and “(B) shall make a full and detailed report of condition of any insured depository institution or affiliate examined to the Corporation. “(6) Power of claim agents.—Each claim agent appointed under paragraph (1) shall have power to investigate and examine all claims for insured deposits.”. (b) Technical and Conforming Amendments.— (1) Section 10(c) of the Federal Deposit Insurance Act (12 U.S.C. 1820(c)) is amended by striking out “, State nonmember banks or other institutions” and inserting in lieu thereof “and any State nonmember bank, savings association, or other institution”. (2) Section 10 of the Federal Deposit Insurance Act (12 U.S.C. 1820) is amended by striking out subsection (d). SEC. 211. INSURANCE FUNDS. Section 11(a) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is amended— (1) by striking out paragraph (1) and inserting the following: “(1) The Corporation shall insure the deposits of all insured depository institutions as provided in this Act. The maximum amount of the insured deposit of any depositor shall be $100,000.”; (2) in paragraph (2)(B), by striking out “time and savings”; and (3) by adding at the end the following new paragraphs: “(4) General provision relating to funds.—The Bank Insurance Fund established under paragraph (5) and the Savings Association Insurance Fund established under paragraph (6) shall each be— “(A) maintained and administered by the Corporation; 103 STAT. 219 “(B) maintained separately and not commingled; and “(C) used by the Corporation to carry out its insurance purposes in the manner provided in this subsection. “(5) Bank insurance fund.— “(A) Establishment—There is established a fund to be known as the Bank Insurance Fund. “(B) Transfer to fund.—On the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the Permanent Insurance Fund shall be dissolved and all assets and liabilities of the Permanent Insurance Fund shall be transferred to the Bank Insurance Fund. “(C) Uses —The Bank Insurance Fund shall be available to the Corporation for use with respect to Bank Insurance Fund members. “(D) Deposits.—All amounts assessed against Bank Insurance Fund members by the Corporation shall be deposited into the Bank Insurance Fund. “(6) Savings association insurance fund.— “(A) Establishment.—There is established a fund to be known as the Savings Association Insurance Fund. “(B) Uses.—The Savings Association Insurance Fund shall be available to the Corporation for use with respect to Savings Association Insurance Fund members. “(C) Deposits.—All amounts assessed against Savings Association Insurance Fund members which are not required for the Financing Corporation, the Resolution Funding Corporation, or the FSLIC Resolution Fund shall be deposited in the Savings Association Insurance Fund. “(D) Availability of funds for administrative expenses.— “(i) In general.—The FSLIC Resolution Fund shall deposit in the Savings Association Insurance Fund such amounts as the Corporation determines are needed during the period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and ending on September 30, 1991, to pay the administrative and supervisory expenses of such Fund. “(ii) Priority.—The Savings Association Insurance Fund shall have priority over other obligations of the FSLIC Resolution Fund with respect to such amounts. “(E) Treasury payments to fund.—To provide sufficient funding for the Savings Association Insurance Fund to carry out the purposes of this Act, the Secretary of the Treasury shall pay to such Fund, for each of the fiscal years 1992 through 1999, the amount, if any, by which $2,000,000,000 exceeds the amount deposited in such Fund (during such fiscal year) pursuant to subparagraph (C). “(F) Treasury payments to maintain net worth of fund.—The Secretary of the Treasury shall pay to the Savings Association Insurance Fund, for each fiscal year described in the following table, any additional amount which may be necessary, as determined by the Corporation and the Secretary of the Treasury to ensure that such Fund has the minimum net worth referred to in such table throughout each such fiscal year: 103 STAT. 220 “For the fiscal year beginning October 1 of: The amount of minimum net worth (in billions): 1991 0.0 1992 1.0 1993 2.1 1994 3.2 1995 4.3 1996 5.4 1997 6.5 1998 7.6 1999 8.8 “(G) Exception to subparagraphs (E) and (F).—Notwithstanding subparagraphs (E) and (F), no payment may be made pursuant to such subparagraphs after the Savings Association Insurance Fund achieves a reserve ratio of 1.25 percent. “(H) Discretionary rtc payments.— If amounts available to the Savings Association Insurance Fund for purposes other than the payment of administrative expenses are insufficient for the Savings Association Insurance Fund to carry out the purposes of this Act, the Corporation may request the Resolution Trust Corporation to provide, and the Oversight Board of the Resolution Trust Corporation (in the discretion of the Oversight Board) may pay, such amount as may be needed for such purposes. “(I) Borrowing authority.— “(i) In general —The Corporation may borrow from the Federal home loan banks, with the concurrence of the Federal Housing Finance Board, such funds as the Corporation considers necessary for the use of the Savings Association Insurance Fund. “(ii) Terms and conditions.—Any loan from any Federal home loan bank under clause (i) to the Savings Association Insurance Fund shall— “(I) bear a rate of interest of not less than such bank’s current marginal cost of funds, taking into account the maturities involved; “(II) be adequately secured, as determined by the Federal Housing Finance Board; “(III) be a direct liability of such Fund; and “(IV) be subject to the limitations of section 15(c). “(J) Authorization of appropriations.—There are authorized to be appropriated to the Secretary of the Treasury, such sums as may be necessary to carry out the provisions of this paragraph, except that— “(i) the annual amount appropriated under subparagraph (F) shall not exceed $2,000,000,000 in either fiscal year 1991 or fiscal year 1992; and “(ii) the cumulative amount appropriated under subparagraph (F) for fiscal years 1991 through 1999 shall not exceed $16,000,000,000. “(7) Provisions applicable to maintenance of accounts.— “(A) Corporation’s authority.—Any provision of this Act forbidding the commingling of the Bank Insurance Fund with the Savings Association Insurance Fund, or requiring the separate maintenance of the Bank Insurance Fund and the Savings Association Insurance Fund, is not intended— 103 STAT. 221 “(i) to limit or impair the authority of the Corporation to use the same facilities and resources in the course of conducting supervisory, regulatory, conservatorship, receivership, or liquidation functions with respect to banks and savings associations, or to integrate such functions; or “(ii) to limit or impair the Corporation’s power to combine assets or liabilities belonging to banks and savings associations in conservatorship or receivership for managerial purposes, or to limit or impair the Corporation’s power to dispose of such assets or liabilities on an aggregate basis. “(B) Accounting requirements.— “(i) Accounting for use of facilities and resources.—The Corporation shall keep a full and complete accounting of all costs and expenses associated with the use of airy facility or resource used in the course of any function specified in subparagraph (A)(i) and shall allocate, in the manner provided in subparagraph (C), any such costs and expenses incurred by the Corporation— “(I) with respect to Bank Insurance Fund members to the Bank Insurance Fund; and “(II) with respect to Savings Association Insurance Fund members to the Savings Association Insurance Fund. “(ii) Accounting for holding and managing assets and liabilities.—The Corporation shall keep a full and complete accounting of all costs and expenses associated with the holding management of any asset or liability specified in subparagraph (A)(ii). “(iii) Accounting for disposition of assets and liabilities.—The Corporation shall keep a full and complete accounting of all expenses and receipts associated with the disposition of any asset or liability specified in subparagraph (A)(ii). “(iv) Allocation of cost, expenses and receipts —The Corporation shall allocate any cost, expense, and receipt described in clause (ii) or clause (iii) which is associated with any asset or liability belonging to— “(I) any Bank Insurance Fund member to the Bank Insurance Fund; and “(II) any Savings Association Insurance Fund member to the Savings Association Insurance Fund. “(C) Allocation of administrative expenses.—Any personnel, administrative, or other overhead expense of the Corporation shall be allocated— “(i) fully to the Bank Insurance Fund, if the expense was incurred directly as a result of the Corporation’s responsibilities solely with respect to Bank Insurance Fund members; “(ii) fully to the Savings Association insurance Fund, if the expense was incurred directly as a result of the Corporation’s responsibilities solely with respect to Savings Association Insurance Fund members; 103 STAT. 222 “(iii) between the Bank Insurance Fund and the Savings Association Insurance Fund, in amounts reflecting the relative degree to which the expense was incurred as a result of the activities of Bank Insurance Fund and Savings Association Insurance Fund members; or “(iv) between the Bank Insurance Fund and the Savings Association Insurance Fund, in amounts reflecting the relative total assets as of the end of the preceding calendar year of Bank Insurance Fund members and Savings Association Insurance Fund members, to the extent that the Board of Directors is unable to make a determination under clause (i), (ii), or (iii).”. SEC. 212. CONSERVATORSHIP AND RECEIVERSHIP POWERS OF THE CORPORATION. (a) Basic Authorities.—Section 11 of the Federal Deposit Insurance Act (12 U.S.C. 1821) is amended by striking out subsections (c) through (j) and inserting the following new subsections: “(c) Appointment of Corporation as Conservator or Receiver.— “(1) In general.—Notwithstanding any other provision of Federal law, the law of any State, or the constitution of any State, the Corporation may accept appointment and act as conservator or receiver for any insured depository institution upon appointment in the manner provided in paragraph (2) or (3). “(2) Federal depository institutions.— “(A) Appointment.— “(i) Conservator.—The Corporation may, at the discretion of the supervisory authority, be appointed conservator of any insured Federal depository institution or District bank and the Corporation may accept such appointment. “(ii) Receiver.—The Corporation shall be appointed receiver, and shall accept such appointment, whenever a receiver is appointed for the purpose of liquidation or winding up the affairs of an insured Federal depository institution or District bank by the appropriate Federal banking agency, notwithstanding any other provision of Federal law (other than section 21A of the Federal Home Loan Bank Act) or the code of law for the District of Columbia. “(B) Additional powers.—In addition to and not in derogation of the powers conferred and the duties imposed by this section on the Corporation as conservator or receiver, the Corporation, to the extent not inconsistent with such powers and duties, shall have any other power conferred on or any duty (which is related to the exercise of such power) imposed on a conservator or receiver for any Federal depository institution under any other provision of law. “(C) Corporation not subject to any other agency.—When acting as conservator or receiver pursuant to an appointment described in subparagraph (A), the Corporation shall not be subject to the direction or supervision of any other agency or department of the United States or any103 STAT. 223State In the exercise of the Corporation’s rights, powers, and privileges. “(D) Depository institution in conservatorship subject to banking agency supervision.—Notwithstanding subparagraph (C), any Federal depository institution for which the Corporation has been appointed conservator shall remain subject to the supervision of the appropriate Federal banking agency. “(3) Insured state depository institutions— “(A) Appointment by appropriate state supervisor.—Whenever the authority having supervision of any insured State depository institution (other than a District depository institution) appoints a conservator or receiver for such institution and tenders appointment to the Corporation, the Corporation may accept such appointment. “(B) Additional powers —In addition to the powers conferred and the duties related to the exercise of such powers imposed by State law on any conservator or receiver appointed under the law of such State for an insured State depository institution, the Corporation, as conservator or receiver pursuant to an appointment described in subparagraph (A), shall have the powers conferred and the duties imposed by this section on the Corporation as conservator or receiver. “(C) Corporation not subject to any other agency.—When acting as conservator or receiver pursuant to an appointment described in subparagraph (A), the Corporation shall not be subject to the direction or supervision of any other agency or department of the United States or any State in the exercise of its rights, powers, and privileges. “(D) Depository institution in conservatorship subject to banking agency supervision.—Notwithstanding subparagraph (C), any insured State depository institution for which the Corporation has been appointed conservator shall remain subject to the supervision of the appropriate State bank or savings association supervisor. “(4) Appointment of corporation by the corporation.—Except as otherwise provided in section 21A of the Federal Home Loan Bank Act and notwithstanding any other provision of Federal law, the law of any State, or the constitution of any State, the Corporation may appoint itself as sole conservator or receiver of any insured State depository institution if— “(A) the Corporation determines— “(i) that— “(I) a conservator, receiver, or other legal custodian has been appointed for such institution; “(II) such institution has been subject to the appointment of any such conservator, receiver, or custodian for a period of at least 15 consecutive days; and “(III) 1 or more of the depositors in such institution is unable to withdraw any amount of any insured deposit; or “(ii) that such institution has been closed by or under the laws of any State; and “(B) the Corporation determines that 1 or more of the grounds specified in paragraph (5)— 103 STAT. 224 “(i) existed with respect to such institution at the time— “(I) the conservator, receiver, or other legal custodian was appointed; or “(II) such institution was closed; or “(ii) exist at any time— “(I) during the appointment of the conservator, receiver, or other legal custodian; or “(II) while such institution is closed. “(5) Grounds for paragraph (4) appointment.—The grounds referred to in paragraph (4KB) for the appointment of the Corporation as conservator or receiver for any insured State depository institution are as follows: “(A) Insolvency in that the assets of the institution are less than the institution’s obligations to its creditors and others, including members of the institution. “(B) Substantial dissipation of assets or earnings due to— “(i) any violation of any law or regulation; or “(ii) any unsafe or unsound practice. “(C) An unsafe or unsound condition to transact business, including substantially insufficient capital or otherwise. “(D) Any willful violation of a cease-and-desist order which has become final. “(E) Any concealment of books, papers, records, or assets of the institution or any refusal to submit books, papers, records, or affairs of the institution for inspection to any examiner or to any lawful agent of the appropriate Federal banking agency or State bank or savings association supervisor. “(F) The likelihood that the institution will not be able to meet the demands of its depositors or pay its obligations in the normal course of business. “(G) The incurrence or likely incurrence of losses by the institution that will deplete all or substantially all of its capital with no reasonable prospect for the replenishment of the capital of the institution without Federal assistance. “(H) Any violation of any law or regulation, or an unsafe or unsound practice or condition which is likely to cause insolvency or substantial dissipation of assets or earnings, or is likely to weaken the condition of the institution or otherwise seriously prejudice the interests of its depositors. “(6) Appointment by director of the office of thrift supervision.— “(A) Conservator.—The Corporation or the Resolution Trust Corporation may, at the discretion of the Director of the Office of Thrift Supervision, be appointed conservator and the Corporation may accept any such appointment. “(B) Receiver.—Whenever the Director of the Office of Thrift Supervision appoints a receiver under the provisions of section 5(d)(2)(C) of the Home Owner’s Loan Act for the purpose of liquidation or winding up any savings association’s affairs— “(i) during the 3-year period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the Resolution Trust Corporation shall be appointed; and 103 STAT. 225 “(ii) after the end of the 3-year period referred to in clause (i), the Corporation shall be appointed. “(7) Judicial review.—If the Corporation appoints itself as conservator or receiver under paragraph (4), the insured State depository institution may, within 30 days thereafter, bring an action in the United States district court for the judicial district in which the home office of such institution is located, or in the United States District Court for the District of Columbia, for an order requiring the Corporation to remove itself as such conservator or receiver, and the court shall, upon the merits, dismiss such action or direct the Corporation to remove itself as such conservator or receiver. “(8) Replacement of conservator of state depository institution.— “(A) In general.—In the case of any insured State depository institution for which the Corporation appointed itself as conservator pursuant to paragraph (4), the Corporation may, without any requirement of notice, hearing, or other action, replace itself as conservator with itself as receiver of such institution. “(B) Replacement treated as removal of incumbent.—The replacement of a conservator with a receiver under subparagraph (A) shall be treated as the removal of the Corporation as conservator. “(C) Right of review of original appointment not affected.—The replacement of a conservator with a receiver under subparagraph (A) shall not affect any right of the insured State depository institution to obtain review, pursuant to paragraph (7), of the original appointment of the conservator. “(9) Additional powers—In any case in which the Corporation is appointed conservator or receiver pursuant to paragraph (4) or (6)— “(A) the provisions of this section shall be applicable to the Corporation, as conservator or receiver of any insured State depository institution in the same manner and to the same extent as if such institution were a Federal depository institution for which the Corporation had been appointed conservator or receiver; and “(B) the Corporation as receiver of any insured State depository institution may— “(i) liquidate such institution in an orderly manner; and “(ii) make such other disposition of any matter concerning such institution as the Corporation determines is in the best interests of the institution, the depositors of such institution, and the Corporation. “(d) Powers and Duties of Corporation as Conservator or Receiver.— “(1) Rulemaking authority of corporation.—The Corporation may prescribe such regulations as the Corporation determines to be appropriate regarding the conduct of conservatorships or receiverships. “(2) General powers.— “(A) Successor to institution.—The Corporation shall, as conservator or receiver, and by operation of law, succeed to— 103 STAT. 226 “(i) all rights, titles, powers, and privileges of the insured depository institution, and of any stockholder, member, accountholder, depositor, officer, or director of such institution with respect to the institution and the assets of the institution; and “(ii) title to the books, records, and assets of any previous conservator or other legal custodian of such institution. “(B) Operate the institution.—The Corporation may, as conservator or receiver— “(i) take over the assets of and operate the insured depository institution with all the powers of the members or shareholders, the directors, and the officers of the institution and conduct all business of the institution; “(ii) collect all obligations and money due the institution; “(iii) perform all functions of the institution in the name of the institution which is consistent with the appointment as conservator or receiver; and “(iv) preserve and conserve the assets and property of such institution. “(C) Functions of institution’s officers, directors, and shareholders.—The Corporation may, by regulation or order, provide for the exercise of any function by any member or stockholder, director, or officer of any insured depository institution for which the Corporation has been appointed conservator or receiver. “(D) Powers as conservator.—The Corporation may, as conservator, take such action as may be— “(i) necessary to put the insured depository institution in a sound and solvent condition; and “(ii) appropriate to carry on the business of the institution and preserve and conserve the assets and property of the institution. “(E) Additional powers as receiver.—The Corporation may, as receiver, place the insured depository institution in liquidation and proceed to realize upon the assets of the institution, having due regard to the conditions of credit in the locality. “(F) Organization of new institutions.—The Corporation may, as receiver— “(i) with respect to savings associations and by application to the Director of the Office of Thrift Supervision, organize a new Federal savings association to take over such assets or such liabilities as the Corporation may determine to be appropriate; and “(ii) with respect to any insured bank, organize a new national bank under subsection (m) or a bridge bank under subsection (n). “(G) Merger; Transfer of assets and liabilities.— “(i) In general.—The Corporation may, as conservator or receiver— “(I) merge the insured depository institution with another insured depository institution; or “(II) subject to clause (ii), transfer any asset or liability of the institution in default (including 103 STAT. 227assets and liabilities associated with any trust business) without any approval, assignment, or consent with respect to such transfer. “(ii) Approval by appropriate federal banking agency.—No transfer described in clause (i)(II) may be made to another depository institution (other than a new bank or a bridge bank established pursuant to subsection (m) or (n)) without the approval of the appropriate Federal banking agency for such institution. “(H) Payment of valid obligations.—The Corporation, as conservator or receiver, shall pay all valid obligations of the insured depository institution in accordance with the prescriptions and limitations of this Act. “(I) Incidental powers.—The Corporation may, as conservator or receiver— “(i) exercise all powers and authorities specifically granted to conservators or receivers, respectively, under this Act and such incidental powers as shall be necessary to carry out such powers; and “(ii) take any action authorized by this Act, which the Corporation determines is in the best interests of the depository institution, its depositors, or the Corporation. “(3) Authority of receiver to determine claims.— “(A) In general.—The Corporation may, as receiver, determine claims in accordance with the requirements of this subsection and regulations prescribed under paragraph (4)(A). “(B) Notice requirements.—The receiver, in any case involving the liquidation or winding up of the affairs of a closed depository institution, shall— “(i) promptly publish a notice to the depository institution’s creditors to present their claims, together with proof, to the receiver by a date specified in the notice which shall be not less than 90 days after the publication of such notice; and “(ii) republish such notice approximately 1 month and 2 months, respectively, after the publication under clause (i). “(C) Mailing required.—The receiver shall mail a notice similar to the notice published under subparagraph (B)(i) at the time of such publication to any creditor shown on the institution’s books— “(i) at the creditor’s last address appearing in such books; or “(ii) upon discovery of the name and address of a claimant not appearing on the institution’s books within 30 days after the discovery of such name and address. “(4) Rulemaking authority relating to determination of claims—The Corporation may prescribe regulations regarding the allowance or disallowance of claims by the receiver and providing for administrative determination of claims and review of such determination. “(5) Procedures for determination of claims.— “(A) Determination period.— “(i) In general.—Before the end of the 180-day period beginning on the date any claim against a 103 STAT. 228depository institution is filed with the Corporation as receiver, the Corporation shall determine whether to allow or disallow the claim and shall notify the claimant of any determination with respect to such claim. “(ii) Extension of time.—The period described in clause (i) may be extended by a written agreement between the claimant and the Corporation. “(iii) Mailing of notice sufficient.—The requirements of clause (i) shall be deemed to be satisfied if the notice of any determination with respect to any claim is mailed to the last address of the claimant which appears— “(I) on the depository institution’s books; “(II) in the claim filed by the claimant; or “(III) in documents submitted in proof of the claim. “(iv) Contents of notice of disallowance.—If any claim filed under clause (i) is disallowed, the notice to the claimant shall contain— “(I) a statement of each reason for the disallowance; and “(II) the procedures available for obtaining agency review of the determination to disallow the claim or judicial determination of the claim. “(B) Allowance of proven claims.—The receiver shall allow any claim received on or before the date specified in the notice published under paragraph (3)(B)(i) by the receiver from any claimant which is proved to the satisfaction of the receiver. “(C) Disallowance of claims filed after end of filing period.— “(i) In general.—Except as provided in clause (ii), claims filed after the date specified in the notice published under paragraph (3)(B)(i) shall be disallowed and such disallowance shall be final. “(ii) Certain exceptions.—Clause (i) shall not apply with respect to any claim filed by any claimant after the date specified in the notice published under paragraph (3)(B)(i) and such claim may be considered by the receiver if— “(I) the claimant did not receive notice of the appointment of the receiver in time to file such claim before such date; and “(II) such claim is filed in time to permit payment of such claim. “(D) Authority to disallow claims.—The receiver may disallow any portion of any claim by a creditor or claim of security, preference, or priority which is not proved to the satisfaction of the receiver. “(E) No judicial review of determination pursuant to subparagraph (d).—No court may review the Corporation’s determination pursuant to subparagraph (D) to disallow a claim. “(F) Legal effect of filing.— “(i) Statute of limitation tolled.—For purposes of any applicable statute of limitations, the filing of a 103 STAT. 229claim with the receiver shall constitute a commencement of an action. “(ii) No prejudice to other actions.—Subject to paragraph (12), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the receiver. “(6) Provision for agency review or judicial determination OF CLAIMS.— “(A) In general.—Before the end of the 60-day period beginning on the earlier of— “(i) the end of the period described in paragraph (5)(A)(i) with respect to any claim against a depository institution for which the Corporation is receiver; or “(ii) the date of any notice of disallowance of such claim pursuant to paragraph (5)(A)(i), the claimant may request administrative review of the claim in accordance with subparagraph (A) or (B) of paragraph (7) or file suit on such claim (or continue an action commenced before the appointment of the receiver) in the district or territorial court of the United States for the district within which the depository institution’s principal place of business is located or the United States District Court for the District of Columbia (and such court shall have jurisdiction to hear such claim). “(B) Statute of limitations.—If any claimant fails to— “(i) request administrative review of any claim in accordance with subparagraph (A) or (B) of paragraph (7k or “(ii) file suit on such claim (or continue an action commenced before the appointment of the receiver), before the end of the 60-day period described in subparagraph (A), the claim shall be deemed to be disallowed (other than any portion of such claim which was allowed by the receiver) as of the end of such period, such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim. “(7) Review of claims.— “(A) Administrative hearing.—If any claimant requests review under this subparagraph in lieu of filing or continuing any action under paragraph (6) and the Corporation agrees to such request, the Corporation shall consider the claim after opportunity for a hearing on the record. The final determination of the Corporation with respect to such claim shall be subject to judicial review under chapter 7 of title 5, United States Code. “(B) Other review procedures.— “(i) In general.—The Corporation shall also establish such alternative dispute resolution processes as may be appropriate for the resolution of claims filed under paragraph (5)(A)(i). “(ii) Criteria.—In establishing alternative dispute resolution processes, the Corporation shall strive for procedures which are expeditious, fair, independent, and low cost. “(iii) Voluntary binding or nonbinding procedures.—The Corporation may establish both binding 103 STAT. 230and nonbinding processes, which may be conducted by any government or private party, but all parties, including the claimant and the Corporation, must agree to the use of the process in a particular case. “(iv) Consideration of incentives.—The Corporation shall seek to develop incentives for claimants to participate in the alternative dispute resolution process. “(8) Expedited determination of claims.— “(A) Establishment required.—The Corporation shall establish a procedure for expedited relief outside of the routine claims process established under paragraph (5) for claimants who— “(i) allege the existence of legally valid and enforceable or perfected security interests in assets of any depository institution for which the Corporation has been appointed receiver; and “(ii) allege that irreparable injury will occur if the routine claims procedure is followed. “(B) Determination period.—Before the end of the 90-day period beginning on the date any claim is filed in accordance with the procedures established pursuant to subparagraph (A), the Corporation shall— “(i) determine— “(I) whether to allow or disallow such claim; or “(II) whether such claim should be determined pursuant to the procedures established pursuant to paragraph (5); and “(ii) notify the claimant of the determination, and if the claim is disallowed, a statement of each reason for the disallowance and the procedure for obtaining agency review or judicial determination. “(C) Period for filing or renewing suit.—Any claimant who files a request for expedited relief shall be permitted to file a suit, or to continue a suit filed before the appointment of the receiver, seeking a determination of the claimant’s rights with respect to such security interest after the earlier of— “(i) the end of the 90-day period beginning on the date of the filing of a request for expedited relief; or “(ii) the date the Corporation denies the claim. “(D) Statute of limitations.—If an action described in subparagraph (C) is not filed, or the motion to renew a previously filed suit is not made, before the end of the 30-day period beginning on the date on which such action or motion may be filed in accordance with subparagraph (B), the claim shall be deemed to be disallowed as of the end of such period (other than any portion of such claim which was allowed by the receiver), such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim. “(E) Legal effect of filing.— “(i) Statute of limitation tolled.—For purposes of any applicable statute of limitations, the filing of a claim with the receiver shall constitute a commencement of an action. 103 STAT. 231 “(ii) No prejudice to other actions.—Subject to paragraph (12), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the receiver. “(9) Agreement as basis of claim.— “(A) Requirements.—Except as provided in subparagraph (B), any agreement which does not meet the requirements set forth in section 13(e) shall not form the basis of, or substantially comprise, a claim against the receiver or the Corporation. “(B) Exception to contemporaneous execution requirement.—Notwithstanding section 13(e)(2), any agreement relating to an extension of credit between a Federal home loan bank or Federal Reserve bank and any insured depository institution which was executed before the extension of credit by such bank to such institution shall be treated as having been executed contemporaneously with such extension of credit for purposes of subparagraph (A). “(10) Payment of claims.— “(A) In general.—The receiver may, in the receiver’s discretion and to the extent funds are available, pay creditor claims which are allowed by the receiver, approved by the Corporation pursuant to a final determination pursuant to paragraph (7) or (8), or determined by the final judgment of any court of competent jurisdiction in such manner and amounts as are authorized under this Act. “(B) Payment of dividends on claims.—The receiver may, in the receiver’s sole discretion, pay dividends on proved claims at any time, and no liability shall attach to the Corporation (in such Corporation’s corporate capacity or as receiver), by reason of any such payment, for failure to pay dividends to a claimant whose claim is not proved at the time of any such payment. “(11) Distribution of assets.— “(A) Subrogated claims; claims of uninsured depositors and other creditors.—The receiver shall— “(i) retain for the account of the Corporation such portion of the amounts realized from any liquidation as the Corporation may be entitled to receive in connection with the subrogation of the claims of depositors; and “(ii) pay to depositors and other creditors the net amounts available for distribution to them. “(B) Distribution to shareholders of amounts remaining AFTER PAYMENT OF ALL OTHER CLAIMS AND EXPENSES.—In any case in which funds remain after all depositors, creditors, other claimants, and administrative expenses are paid, the receiver shall distribute such funds to the depository institution’s shareholders or members together with the accounting report required under paragraph (14)(C). “(12) Suspension of legal actions.— “(A) In general.—After the appointment of a conservator or receiver for an insured depository institution, the conservator or receiver may request a stay for a period not to exceed— “(i) 45 days, in the case of any conservator; and 103 STAT. 232 “(ii) 90 days, in the case of any receiver, in any judicial action or proceeding to which such institution is or becomes a party. “(B) Grant of stay by all courts required.—Upon receipt of a request by any conservator or receiver pursuant to subparagraph (A) for a stay of any judicial action or proceeding in any court with jurisdiction of such action or proceeding, the court shall grant such stay as to all parties. “(13) Additional rights and duties.— “(A) Prior final adjudication.—The Corporation shall abide by any final unappealable judgment of any court of competent jurisdiction which was rendered before the appointment of the Corporation as conservator or receiver. “(B) Rights and remedies of conservator or receiver.—In the event of any appealable judgment, the Corporation as conservator or receiver shall— “(i) have all the rights and remedies available to the insured depository institution (before the appointment of such conservator or receiver) and the Corporation in its corporate capacity, including removal to Federal court and all appellate rights; and “(ii) not be required to post any bond in order to pursue such remedies. “(C) No attachment or execution.—No attachment or execution may issue by any court upon assets in the possession of the receiver. “(D) Limitation on judicial review.—Except as otherwise provided in this subsection, no court shall have jurisdiction over— “(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of any depository institution for which the Corporation has been appointed receiver, including assets which the Corporation may acquire from itself as such receiver; or “(ii) any claim relating to any act or omission of such institution or the Corporation as receiver. “(14) Statute of limitations for actions brought by conservator or receiver.— “(A) In general.—Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the Corporation as conservator or receiver shall be— “(i) in the case of any contract claim, the longer of— “(I) the 6-year period beginning on the date the claim accrues; or “(II) the period applicable under State law; and “(ii) in the case of any tort claim, the longer of— “(I) the 3-year period beginning on the date the claim accrues; or “(II) the period applicable under State law. “(B) Determination of the date on which a claim accrues.—For purposes of subparagraph (A), the date on which the statute of limitation begins to run on any claim described in such subparagraph shall be the later of— “(i) the date of the appointment of the Corporation as conservator or receiver; or 103 STAT. 233 “(ii) the date on which the cause of action accrues. “(15) Accounting and recordkeeping requirements.— “(A) In general —The Corporation as conservator or receiver shall, consistent with the accounting and reporting practices and procedures established by the Corporation, maintain a full accounting of each conservatorship and receivership or other disposition of institutions in default. “(B) Annual accounting or report.—With respect to each conservatorship or receivership to which the Corporation was appointed, the Corporation shall make an annual accounting or report, as appropriate, available to the Secretary of the Treasury, the Comptroller General of the United States, and the authority which appointed the Corporation as conservator or receiver. “(C) Availability of reports.—Any report prepared pursuant to subparagraph (B) shall be made available by the Corporation upon request to any shareholder of the depository institution for which the Corporation was appointed conservator or receiver or any other member of the public. “(D) Recordkeeping requirement.—After the end of the 6-year period beginning on the date the Corporation is appointed as receiver of an insured depository institution, the Corporation may destroy any records of such institution which the Corporation, in the Corporation’s discretion, determines to be unnecessary unless directed not to do so by a court of competent jurisdiction or governmental agency, or prohibited by law. “(16) Contracts with state housing finance authorities.— “(A) In general.—The Corporation may enter into contracts with any State housing finance authority for the sale of mortgage-related assets (as such terms are defined in section 1301 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989) of any depository institution in default (including assets and liabilities associated with any trust business), such contracts to be effective in accordance with their terms without any further approval, assignment, or consent with respect thereto. “(B) Factors to consider.—In evaluating the disposition of mortgage related assets to any State housing finance authority the Corporation shall consider— “(i) the State housing finance authority’s ability to acquire and service current, delinquent, and defaulted mortgage related assets; “(ii) the State housing finance authority’s ability to further national housing policies; “(iii) the State housing finance authority’s sensitivity to the impact of the sale of mortgage related assets upon the State and local communities; “(iv) the costs to the Federal Government associated with alternative ownership or dispositions of the mortgage related assets; “(v) the minimization of future guaranties which may be required of the Federal Government; “(vi) the maximization of mortgage related asset values; and 103 STAT. 234 “(vii) the utilization of institutions currently established in mortgage related asset market activities. “(e) Provisions Relating to Contracts Entered Into Before Appointment of Conservator or Receiver.— “(1) Authority to repudiate contracts.—In addition to any other rights a conservator or receiver may have, the conservator or receiver for any insured depository institution may disaffirm or repudiate any contract or lease— “(A) to which such institution is a party; “(B) the performance of which the conservator or receiver, in the conservator’s or receiver’s discretion, determines to be burdensome; and “(C) the disaffirmance or repudiation of which the conservator or receiver determines, in the conservator’s or receiver’s discretion, will promote the orderly administration of the institution’s affairs. “(2) Timing of repudiation.—The conservator or receiver appointed for any insured depository institution in accordance with subsection (c) shall determine whether or not to exercise the rights of repudiation under this subsection within a reasonable period following such appointment. “(3) Claims for damages for repudiation.— “(A) In general.—Except as otherwise provided in subparagraph (C) and paragraphs (4), (5), and (6), the liability of the conservator or receiver for the disaffirmance or repudiation of any contract pursuant to paragraph (1) shall be— “(i) limited to actual direct compensatory damages; and “(ii) determined as of— “(I) the date of the appointment of the conservator or receiver; or “(II) in the case of any contract or agreement referred to in paragraph (8), the date of the disaffirmance or repudiation of such contract or agreement. “(B) No liability for other damages.—For purposes Of subparagraph (A), the term ‘actual direct compensatory damages’ does not include— “(i) punitive or exemplary damages; “(ii) damages for lost profits or opportunity; or “(iii) damages for pain and suffering. “(C) Measure of damages for repudiation of financial contracts.—In the case of any qualified financial contract or agreement to which paragraph (8) applies, compensatory damages shall be— “(i) deemed to include normal and reasonable costs of cover or other reasonable measures of damages utilized in the industries for such contract and agreement claims; and “(ii) paid in accordance with this subsection and subsection (k) except as otherwise specifically provided in this section. “(4) Leases under which the institution is the lessee.— “(A) In general.—If the conservator or receiver disaffirms or repudiates a lease under which the insured depository institution was the lessee, the conservator or 103 STAT. 235receiver shall not be liable for any damages (other than damages determined pursuant to subparagraph (B)) for the disaffirmance or repudiation of such lease. “(B) Payments of rent.—Notwithstanding subparagraph (A), the lessor under a lease to which such subparagraph applies shall— “(i) be entitled to the contractual rent accruing before the later of the date— “(I) the notice of disaffirmance or repudiation is mailed; or “(II) the disaffirmance or repudiation becomes effective, unless the lessor is in default or breach of the terms of the lease; “(ii) have no claim for damages under any acceleration clause or other penalty provision in the lease; and “(iii) have a claim for any unpaid rent, subject to all appropriate offsets and defenses, due as of the date of the appointment which shall be paid in accordance with this subsection and subsection (k). “(5) Leases under which the institution is the lessor— “(A) In general.—If the conservator or receiver repudiates an unexpired written lease of real property of the insured depository institution under which the institution is the lessor and the lessee is not, as of the date of such repudiation, in default, the lessee under such lease may either— “(i) treat the lease as terminated by such repudiation; or “(ii) remain in possession of the leasehold interest for the balance of the term of the lease unless the lessee defaults under the terms of the lease after the date of such repudiation. “(B) Provisions applicable to lessee remaining in possession.— If any lessee under a lease described in subparagraph (A) remains in possession of a leasehold interest pursuant to clause (ii) of such subparagraph— “(i) the lessee— “(I) shall continue to pay the contractual rent pursuant to the terms of the lease after the date of the repudiation of such lease; “(II) may offset against any rent payment which accrues after the date of the repudiation of the lease, any damages which accrue after such date due to the nonperformance of any obligation of the insured depository Institution under the lease after such date; and “(ii) the conservator or receiver shall not be liable to the Lessee for any damages arising after such date as a result of the repudiation other than the amount of any offset allowed under clause (i)(II). “(6) Contracts for the sale of real property.— “(A) In general.—If the conservator or receiver repudiates any contract (which meets the requirements of each paragraph of section 13(e)) for the sale of real property and the purchaser of such real property under such contract is 103 STAT. 236in possession and is not, as of the date of such repudiation, in default, such purchaser may either— “(i) treat the contract as terminated by such repudiation; or “(ii) remain in possession of such real property. “(B) Provisions applicable to purchaser remaining in possession.—If any purchaser of real property under any contract described in subparagraph (A) remains in possession of such property pursuant to clause (ii) of such subparagraph— “(i) the purchaser— “(I) shall continue to make all payments due under the contract after the date of the repudiation of the contract; and “(II) may offset against any such payments any damages which accrue after such date due to the nonperformance (after such date) of any obligation of the depository institution under the contract; and “(ii) the conservator or receiver shall— “(I) not be liable to the purchaser for any damages arising after such date as a result of the repudiation other than the amount of any offset allowed under clause (i)(I); “(II) deliver title to the purchaser in accordance with the provisions of the contract; and “(III) have no obligation under the contract other than the performance required under subclause (II). “(C) Assignment and sale allowed.— “(i) In general.—No provision of this paragraph shall be construed as limiting the right of the conservator or receiver to assign the contract described in subparagraph (A) and sell the property subject to the contract and the provisions of this paragraph. “(ii) No liability after assignment and sale.—If an assignment and sale described in clause (i) is consummated, the conservator or receiver shall have no further liability under the contract described in subparagraph (A) or with respect to the real property which was the subject of such contract. “(7) Provisions applicable to service contracts.— “(A) Services performed before appointment.—In the case of any contract for services between any person and any insured depository institution for which the Corporation has been appointed conservator or receiver, any claim of such person for services performed before the appointment of the conservator or the receiver shall be— “(i) a claim to be paid in accordance with subsections (d) and (i); and “(ii) deemed to have arisen as of the date the conservator or receiver was appointed. “(B) Services performed after appointment and prior to repudiation.—If, in the case of any contract for services described in subparagraph (A), the conservator or receiver accepts performance by the other person before the conservator or receiver makes any determination to exercise 103 STAT. 237the right of repudiation of such contract under this section— “(i) the other party shall be paid under the terms of the contract for the services performed; and “(ii) the amount of such payment shall be treated as an administrative expense of the conservatorship or receivership. “(C) Acceptance of performance no bar to subsequent repudiation.—The acceptance by any conservator or receiver of services referred to in subparagraph (B) in connection with a contract described in such subparagraph shall not affect the right of the conservator or receiver to repudiate such contract under this section at any time after such performance. “(8) Certain qualified financial contracts.— “(A) Rights of parties to contracts.—Subject to paragraph (10) of this subsection and notwithstanding any other provision of this Act (other than subsections (d)(9) and (i)(4)(I) of this section and section 13(e)), any other Federal law, or the law of any State, no person shall be stayed or prohibited from exercising— “(i) any right to cause the termination or liquidation of any qualified financial contract with an insured depository institution which arises upon the appointment of the Corporation as receiver for such institution at any time after such appointment; “(ii) any right under any security arrangement relating to any contract or agreement described in clause (i); or “(iii) any right to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with 1 or more contracts and agreements described in clause (i), including any master agreement for such contracts or agreements. “(B) Applicability of other provisions.—Subsection (d)(12) shall apply in the case of any judicial action or proceeding brought against any receiver referred to in subparagraph (A), or the insured depository institution for which such receiver was appointed, by any party to a contract or agreement described in subparagraph (A)(i) with such institution. “(C) Certain transfers not avoidable.— “(i) In general.—Notwithstanding paragraph (11), the Corporation, whether acting as such or as conservator or receiver of an insured depository institution, may not avoid any transfer of money or other property in connection with any qualified financial contract with an insured depository institution. “(ii) Exception for certain transfers.—Clause (i) shall not apply to any transfer of money or other property in connection with any qualified financial contract with an insured depository institution if the Corporation determines that the transferee had actual intent to hinder, delay, or defraud such institution, the creditors of such institution, or any conservator or receiver appointed for such institution. 103 STAT. 238 “(D) Certain contracts and agreements defined.—For purposes of this subsection— “(i) Qualified financial contract.—The term ‘qualified financial contract’ means any securities contract, commodity contract, forward contract, repurchase agreement, swap agreement, and any similar agreement that the Corporation determines by regulation to be a qualified financial contract for purposes of this paragraph. “(ii) Securities contract.—The term ‘securities contract’— “(I) has the meaning given to such term in section 741(7) of title 11, United States Code, except that the term ‘security’ (as used in such section) shall be deemed to include any mortgage loan, any mortgage-related security (as defined in section 3(a)(41) of the Securities Exchange Act of 1934), and any interest in any mortgage loan or mortgage-related security; and “(II) does not include any participation in a commercial mortgage loan unless the Corporation determines by regulation, resolution, or order to include any such participation within the meaning of such term. “(iii) Commodity contract.—The term ‘commodity contract’ has the meaning given to such term in section 761(4) of title 11, United States Code. “(iv) Forward contract.—The term ‘forward contract’ has the meaning given to such term in section 101(24) of title 11, United States Code. “(v) Repurchase agreement.—The term ‘repurchase agreement’— “(I) has the meaning given to such term in section 101(41) of title 11, the United States Code, except that the items (as described in such section) which may be subject to any such agreement shall be deemed to include mortgage-related securities (as such term is defined in section 3(a)(41) of the Securities Exchange Act of 1934, any mortgage loan, and any interest in any mortgage loan; and “(II) does not include any participation in a commercial mortgage loan unless the Corporation determines by emulation, resolution, or order to include any such participation within the meaning of such term. “(vi) Swap agreement.—The term ‘swap agreement’— “(I) means any agreement, including the terms and conditions incorporated by reference in any such agreement, which is a rate swap agreement, basis swap, commodity swap, forward rate agreement, interest rate future, interest rate option purchased, forward foreign exchange agreement, rate cap agreement, rate floor agreement, rate collar agreement, currency swap agreement, cross-currency rate swap agreement, currency future, or 103 STAT. 239currency option purchased or any other similar agreement, and “(II) includes any combination of such agreements and any option to enter into any such agreement. “(vii) Treatment of master agreement as 1 swap agreement.—Any master agreement for any agreements described in clause (vi)® together with all supplements to such master agreement shall be treated as 1 swap agreement. “(viii) Transfer.—The term ‘transfer’ has the meaning given to such term in section 101(50) of title 11, United States Code. “(E) Certain protections in event of appointment of conservator.—Notwithstanding any other provision of this Act (other than paragraph (12) of this subsection, subsections (d)(9) and (i)(4)(I) of this section, and section 13(e) of this Act), any other Federal law, or the law of any State, no person shall be stayed or prohibited from exercising— “(i) any right such person has to cause the termination, liquidation, or acceleration of any qualified financial contract with a depository institution in a conservatorship based upon a default under such financial contract which is enforceable under applicable noninsolvency law; “(ii) any right under any security arrangement relating to such qualified financial contracts; or “(iii) any right to offset or net out any termination values, payment amounts, or other transfer obligations arising under or in connection with such qualified financial contracts. “(9) Transfer of qualified financial contracts.—In making any transfer of assets or liabilities of a depository institution in default which includes any qualified financial contract, the conservator or receiver for such depository institution shall either— “(A) transfer to 1 depository institution (other than a depositor institution in default)— “(i) all qualified financial contracts between— “(I) any person or any affiliate of such person; and “(II) the depository institution in default; “(ii) all claims of such person or any affiliate of such person against such depository institution under any such contract (other than any claim which, under the terms of any such contract, is subordinated to the claims of general unsecured creditors of such institution); “(iii) all claims of such depository institution against such person or any affiliate of such person under any such contract; and “(iv) all property securing any claim described in clause (ii) or (iii) under any such contract; or “(B) transfer none of the financial contracts, claims, or property referred to in subparagraph (A) (with respect to such person and any affiliate of such person). “(10) Notification of transfer— 103 STAT. 240 “(A) In general.—If— “(i) the conservator or receiver for an insured depository institution in default makes any transfer of the assets and liabilities of such institution; and “(ii) the transfer includes any qualified financial contract, the conservator or receiver shall use such conservator’s or receiver’s best efforts to notify any person who is a party to any such contract of such transfer by 12:00, noon (local time) on the business day following such transfer. “(B) Business day defined.—For purposes of this paragraph, the term ‘business day’ means any day other than any Saturday, Sunday, or any day on which either the New York Stock Exchange or the Federal Reserve Bank of New York is closed. “(11) Certain security interests not avoidable.—No provision of this subsection shall be construed as permitting the avoidance of any legally enforceable or perfected security interest in any of the assets of any depository institution except where such an interest is taken in contemplation of the institution’s insolvency or with the intent to hinder, delay, or defraud the institution or the creditors of such institution. “(12) Authority to enforce contracts.— “(A) In general.—The conservator or receiver may enforce any contract, other than a director’s or officer’s liability insurance contract or a depository institution bond, entered into by the depository institution notwithstanding any provision of the contract providing for termination, default, acceleration, or exercise of rights upon, or solely by reason of, insolvency or the appointment of a conservator or receiver. “(B) Certain rights not affected.—No provision of this paragraph may be construed as impairing or affecting any right of the conservator or receiver to enforce or recover under a directors or officers liability insurance contract or depository institution bond under other applicable law. “(13) Exception for federal reserve and federal home loan banks.—No provision of this subsection shall apply with respect to— “(A) any extension of credit from any Federal home loan bank or Federal Reserve bank to any insured depository institution; or “(B) any security interest in the assets of the institution securing any such extension of credit. “(f) Payment of Insured Deposits.— “(1) In general.—In case of the liquidation of, or other closing or winding up of the affairs of, any insured depository institution, payment of the insured deposits in such institution shall be made by the Corporation as soon as possible, subject to the provisions of subsection (g), either by cash or by making available to each depositor a transferred deposit in a new insured depository institution in the same community or in another insured depository institution in an amount equal to the insured deposit of such depositor, except that— “(A) all payments made pursuant to this section on account of a closed Bank Insurance Fund member shall be made only from the Bank Insurance Fund, and 103 STAT. 241 “(B) all payments made pursuant to this section on account of a closed Savings Association Insurance Fund member shall be made only from the Savings Association Insurance Fund. “(2) Proof of claims.—The Corporation, in its discretion, may require proof of claims to be filed and may approve or reject such claims for insured deposits. “(3) Resolution of disputes.— “(A) Resolutions in accordance to corporation regulations.—In the case of any disputed claim relating to any insured deposit or any determination of insurance coverage with respect to any deposit, the Corporation may resolve such disputed claim in accordance with regulations prescribed by the Corporation establishing procedures for resolving such claims. “(B) Adjudication of claims.—If the Corporation has not prescribed regulations establishing procedures for resolving disputed claims, the Corporation may require the final determination of a court of competent jurisdiction before paying any such claim. “(4) Review of corporation’s determination.—Final determination made by the Corporation shall be reviewable in accordance with chapter 7 of title 5, United States Code, by the United States Court of Appeals for the District of Columbia or the court of appeals for the Federal judicial circuit where the principal place of business of the depository institution is located. “(5) Statute of limitations.—Any request for review of a final determination by the Corporation shall be filed with the appropriate circuit court of appeals not later than 60 days after such determination is ordered. “(g) Subrogation of corporation.— “(1) In general.—Notwithstanding any other provision of Federal law, the law of any State, or the constitution of any State, the Corporation, upon the payment to any depositor as provided in subsection (f) in connection with any insured depository institution or insured branch described in such subsection or the assumption of any deposit in such institution or branch by another insured depository institution pursuant to this section or section 13, shall be subrogated to all rights of the depositor against such institution or branch to the extent of such payment or assumption. “(2) Dividends on subrogated amounts.—The subrogation of the Corporation under paragraph (1) with respect to any insured depository institution shall include the right on the part of the Corporation to receive the same dividends from the proceeds of the assets of such institution and recoveries on account of stockholders’ liability as would have been payable to the depositor on a claim for the insured deposit, but such depositor shall retain such claim for any uninsured or unassumed portion of the deposit. “(3) Waiver of certain claims.—With respect to any bank which closes after May 25, 1938, the Corporation shall waive, in favor only of any person against whom stockholders’ individual liability may be asserted, any claim on account of such liability in excess of the liability, if any, to the bank or its creditors, for the amount unpaid upon such stock in such bank; but any such 103 STAT. 242waiver shall be effected in such manner and on such terms and conditions as will not increase recoveries or dividends on account of claims to which the Corporation is not subrogated. “(4) Applicability of state law.—If the Corporation is appointed pursuant to subsection (c)(3), or determines not to invoke the authority conferred in subsection (c)(4), the rights of depositors and other creditors of any State depository institution shall be determined in accordance with the applicable provisions of State law. “(h) Conditions Applicable To Liquidation Proceedings.— “(1) Consideration of local economic impact required.—The Corporation shall fully consider the adverse economic impact on local communities, including businesses and farms, of actions to be taken by it during the administration and liquidation of loans of a depository institution in default. “(2) Actions to alleviate adverse economic impact to be considered.—The actions which the Corporation shall consider include the release of proceeds from the sale of products and services for family living and business expenses and shortening the undue length of the decisionmaking process for the acceptance of offers of settlement contingent upon third party financing. “(3) Guidelines required.—The Corporation shall adopt and publish procedures and guidelines to minimize adverse economic effects caused by its actions on individual debtors in the community. “(i) Valuation of Claims in Default.— “(1) In general.—Notwithstanding any other provision of Federal law or the law of any State and regardless of the method which the Corporation determines to utilize with respect to an insured depository institution in default or in danger of default, including transactions authorized under subsection (n) and section 13(c), this subsection shall govern the rights of the creditors (other than insured depositors) of such institution. “(2) Maximum liability.—The maximum liability of the Corporation, acting as receiver or in any other capacity, to any person having a claim against the receiver or the insured depository institution for which such receiver is appointed shall equal the amount such claimant would have received if the Corporation had liquidated the assets and liabilities of such institution without exercising the Corporation’s authority under subsection (n) of this section or section 13. “(3) Additional payments authorized.— “(A) In general.—The Corporation may, in its discretion and in the interests of minimizing its losses, use its own resources to make additional payments or credit additional amounts to or with respect to or for the account of any claimant or category of claimants. The Corporation shall not be obligated, as a result of having made any such payment or credited any such amount to or with respect to or for the account of any claimant or category of claimants, to make payments to any other claimant or category or claimants. “(B) Source of funds.—If the depository institution in default is a Bank Insurance Fund member, the Corporation may only make such payments out of funds held in the Bank Insurance Fund. If the depository institution in de-103 STAT. 243fault is a Savings Association Insurance Fund member, the Corporation may only make such payments out of funds held in the Savings Association Insurance Fund. “(C) Manner of payment.—The Corporation may make the payments or credit the amounts specified in subparagraphs (A) and (B) directly to the claimants or may make such payments or credit such amounts to an open insured depository institution to induce such institution to accept liability for such claims. “(j) Limitation on court action.—Except as provided in this section, no court may take any action, except at the request of the Board of Directors by regulation or order, to restrain or affect the exercise of powers or functions of the Corporation as a conservator or a receiver. “(k) Liability of directors and officers.—A director or officer of an insured depository institution may be held personally liable for monetary damages in any civil action by, on behalf of, or at the request or direction of the Corporation, which action is prosecuted wholly or partially for the benefit of the Corporation— “(1) acting as conservator or receiver of such institution. “(2) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed by such receiver or conservator, or “(3) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed in whole or in part by an insured depository institution or its affiliate in connection with assistance provided under section 13, for gross negligence, including any similar conduct or conduct that demonstrates a greater disregard of a duty of care (than gross negligence) including intentional tortious conduct, as such terms are defined and determined under applicable State law. Nothing in this paragraph shall impair or affect any right of the Corporation under other applicable law. “(l) Damages.—In any proceeding related to any claim against an insured depository institution’s director, officer, employee, agent, attorney, accountant, appraiser, or any other party employed by or providing services to an insured depository institution, recoverable damages determined to result from the improvident or otherwise improper use or investment of any insured depository institution’s assets shall include principal losses and appropriate interest.”. SEC. 213. NEW BANKS. Section 11 of the Federal Deposit Insurance Act (12 U.S.C. 1821) is amended by inserting after subsection (1) (as added by section 212) the following new subsection: “(m) New Banks.— “(1) Organization authorized.—As soon as possible after the default of an insured bank, the Corporation, if it finds that it is advisable and in the interest of the depositors of the insured bank in default or the public shall organize a new national bank in the same community as the bank in default to assume the insured deposits of such bank in default and otherwise to perform temporarily the functions hereinafter provided for. “(2) Articles of association.—The articles of association and the organization certificate of the new bank shall be executed by representatives designated by the Corporation. 103 STAT. 244 “(3) Capital stock.—No capital stock need be paid in by the Corporation. “(4) Executive officer.—The new bank shall not have a board of directors, but shall be managed by an executive officer appointed by the Board of Directors of the Corporation who shall be subject to its directions. “(5) Subject to laws relating to national banks.—In all other respects the new bank shall be organized in accordance with the then existing provisions of law relating to the organization of national banking associations. “(6) New deposits,—The new bank may, with the approval of the Corporation, accept new deposits which shall be subject to withdrawal on demand and which, except where the new bank is the only bank in the community, shall not exceed $100,000 from any depositor. “(7) Insured status.—The new bank, without application to or approval by the Corporation, shall be an insured depository institution and shall maintain on deposit with the Federal Reserve bank of its district reserves in the amount required by law for member banks, but it shall not be required to subscribe for stock of the Federal Reserve bank. “(8) Investments.—Funds of the new bank shall be kept on hand in cash, invested in obligations of the United States or obligations guaranteed as to principal and interest by the United States, or deposited with the Corporation, any Federal Reserve bank, or, to the extent of the insurance coverage on any such deposit, an insured depository institution. “(9) Conduct of business.—The new bank, unless otherwise authorized by the Comptroller of the Currency, shall transact business only as authorized by this Act and as may be incidental to its organization. “(10) Exempt status.—Notwithstanding any other provision of Federal or State law, the new bank, its franchise, property, and income shall be exempt from all taxation now or hereafter imposed by the United States, by any territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority. “(11) Transfer of deposits.—(A) Upon the organization of a new bank, the Corporation shall promptly make available to it an amount equal to the estimated insured deposits of such bank in default plus the estimated amount of the expenses of operating the new bank, and shall determine as soon as possible the amount due each depositor for the depositor’s insured deposit in the bank in default, and the total expenses of operation of the new bank. “(B) Upon such determination, the amounts so estimated and made available shall be adjusted to conform to the amounts so determined. “(12) Earnings.—Earnings of the new bank shall be paid over or credited to the Corporation in such adjustment. “(13) Losses.—If any new bank, during the period it continues its status as such, sustains any losses with respect to which it is not effectively protected except by reason of being an insured bank, the Corporation shall furnish to it additional funds in the amount of such losses. 103 STAT. 245 “(14) Payment of insured deposits.—(A) The new bank shall assume as transferred deposits the payment of the insured deposits of such bank in default to each of its depositors. “(B) Of the amounts so made available, the Corporation shall transfer to the new bank, in cash, such sums as may be necessary to enable it to meet its expenses of operation and immediate cash demands on such transferred deposits, and the remainder of such amounts shall be subject to withdrawal by the new bank on demand. “(15) Issuance of stock.—(A) Whenever in the judgment of the Board of Directors it is desirable to do so, the Corporation shall cause capital stock of the new bank to be offered for sale on such terms and conditions as the Board of Directors shall deem advisable in an amount sufficient, in the opinion of the Board of Directors, to make possible the conduct of the business of the new bank on a sound basis, but in no event less than that required by section 5138 of the Revised Statutes for the organization of a national bank in the place where such new bank is located. “(B) The stockholders of the insured bank in default shall be given the first opportunity to purchase any shares of common stock so offered. “(16) Issuance of certificate.—Upon proof that an adequate amount of capital stock in the new bank has been subscribed and paid for in cash, the Comptroller of the Currency shall require the articles of association and the organization certificate to be amended to conform to the requirements for the organization of a national bank, and thereafter, when the requirements of law with respect to the organization of a national bank have been complied with, the Comptroller of the Currency shall issue to the bank a certificate of authority to commence business, and thereupon the bank shall cease to have the status of a new bank, shall be managed by directors elected by its own shareholders, may exercise all the powers granted by law, and shall be subject to all provisions of law relating to national banks. Such bank shall thereafter be an insured national bank, without certification to or approval by the Corporation. “(17) Transfer to other institution.—If the capital stock of the new bank is not offered for sale, or if an adequate amount of capital for such new bank is not subscribed and paid for, the Board of Directors may offer to transfer its business to any insured depository institution in the same community which will take over its assets, assume its liabilities, and pay to the Corporation for such business such amount as the Board of Directors may deem adequate; or the Board of Directors in its discretion may change the location of the new bank to the office of the Corporation or to some other place or may at any time wind up its affairs as herein provided. “(18) Winding up.—Unless the capital stock of the new bank is sold or its assets are taken over and its liabilities are assumed by an insured depository institution as above provided within 2 years after the date of its organization, the Corporation shall wind up the affairs of such bank, after giving such notice, if any, as the Comptroller of the Currency may require, and shall certify to the Comptroller of the Currency the termination of 103 STAT. 246the new bank. Thereafter the Corporation shall be liable for the obligations of such bank and shall be the owner of its assets. “(19) Applicability of certain laws.—The provisions of sections 5220 and 5221 of the Revised Statutes shall not apply to a new bank under this subsection.”. SEC. 214. BRIDGE BANKS. Section 11 of the Federal Deposit Insurance Act (12 U.S.C. 1821) is amended by inserting after subsection (m) (as added by section 213) the following new subsection: “(n) Bridge Banks.— “(1) Organization.— “(A) Purpose.—When 1 or more insured banks are in default, or when the Corporation anticipates that 1 or more insured banks may become in default, the Corporation may, in its discretion, organize, and the Office of the Comptroller of the Currency shall charter, 1 or more national banks with respect thereto with the powers and attributes of national banking associations, subject to the provisions of this subsection, to be referred to as bridge banks. “(B) Authorities.—Upon the granting of a charter to a bridge bank, the bridge bank may— “(i) assume such deposits of such insured bank or banks that is or are in default or in danger of default as the Corporation may, in its discretion, determine to be appropriate, except that if any insured deposits of a bank are assumed, all insured deposits of that bank shall be assumed by the bridge bank or another insured depository institution; “(ii) assume such other liabilities (including liabilities associated with any trust business) of such insured bank or banks that is or are in default or in danger of default as the Corporation may, in its discretion, determine to be appropriate; “(iii) purchase such assets (including assets associated with any trust business) of such insured bank or banks that is or are in default or In danger of default as the Corporation may, in its discretion, determine to be appropriate; and “(iv) perform any other temporary function which the Corporation may, in its discretion, prescribe in accordance with this Act. “(C) Articles of association.—The articles of association and organization certificate of a bridge bank as approved by the Corporation shall be executed by 3 representatives designated by the Corporation. “(D) Interim directors.—A bridge bank shall have an interim board of directors consisting of not fewer than 5 nor more than 10 members appointed by the Corporation. “(E) National bank.—A bridge bank shall be organized as a national bank. “(2) Chartering.— “(A) Conditions.—A national bank may be chartered by the Comptroller of the Currency as a bridge bank only if the Board of Directors determines that— “(i) the amount which is reasonably necessary to operate such bridge bank will not exceed the amount 103 STAT. 247which is reasonably necessary to save the cost of liquidating, including paying the insured accounts of, 1 or more insured banks in default or in danger of default with respect to which the bridge bank is chartered; “(ii) the continued operation of such insured bank or banks in default or in danger of default with respect to which the bridge bank is chartered is essential to provide adequate banking services in the community where each such bank in default or in danger of default is located; or “(iii) the continued operation of such insured bank or banks in default or in danger of default with respect to which the bridge bank is chartered is in the best interest of the depositors of such bank or banks in default or in danger of default or the public. “(B) Insured national bank.—A bridge bank shall be an insured bank from the time it is chartered as a national bank. “(C) Bridge bank treated as being in default for certain purposes.—A bridge bank shall be treated as an insured bank in default at such times and for such purposes as the Corporation may, in its discretion, determine. “(D) Management.—A bridge bank, upon the granting of its charter, shall be under the management of a board of directors consisting of not fewer than 5 nor more than 10 members appointed by the Corporation. “(E) Bylaws.—The board of directors of a bridge bank shall adopt such bylaws as may be approved by the Corporation. “(3) Transfer of assets and liabilities.— “(A) In general.— “(i) Transfer upon grant of charter—Upon the granting of a charter to a bridge bank pursuant to this subsection, the Corporation, as receiver, or any other receiver appointed with respect to any insured bank in default with respect to which the bridge bank is chartered may transfer any assets and liabilities of such bank in default to the bridge bank in accordance with paragraph (1). “(ii) Subsequent transfers.—At any time after a charter is granted to a bridge bank, the Corporation, as receiver, or any other receiver appointed with respect to an insured bank in default may transfer any assets and liabilities of such insured bank in default as the Corporation may, in its discretion, determine to be appropriate in accordance with paragraph (1). “(iii) Treatment of trust business.—For purposes of this paragraph, the trust business, including fiduciary appointments, of any insured bank in default is included among its assets and liabilities. “(iv) Effective without approval —The transfer of any assets or liabilities, including those associated with any trust business, of an insured bank in default transferred to a bridge bank shall be effective without any further approval under Federal or State law, assignment, or consent with respect thereto. 103 STAT. 248 “(B) Intent of congress regarding continuing operations.—It is the intent of the Congress that, in order to prevent unnecessary hardship or losses to the customers of any insured bank in default with respect to which a bridge bank is chartered, especially creditworthy farmers, small businesses, and households, the Corporation should— “(i) continue to honor commitments made by the bank in default to creditworthy customers, and “(ii) not interrupt or terminate adequately secured loans which are transferred under subparagraph (A) and are being repaid by the debtor in accordance with the terms of the loan instrument. “(4) Powers of bridge banks.—Each bridge bank chartered under this subsection shall have all corporate powers of, and be subject to the same provisions of law as, a national bank, except that— “(A) the Corporation may— “(i) remove the interim directors and directors of a bridge bank; “(ii) fix the compensation of members of the interim board of directors and the board of directors and senior management, as determined by the Corporation in its discretion, of a bridge bank; and “(iii) waive any requirement established under section 5145, 5146, 5147, 5148, or 5149 of the Revised Statutes (relating to directors of national banks) or section 31 of the Banking Act of 1933 which would otherwise be applicable with respect to directors of a bridge bank by operation of paragraph (2)(B); “(B) the Corporation may indemnify the representatives for purposes of paragraph (1)(B) and the interim directors, directors, officers, employees, and agents of a bridge bank on such terms as the Corporation determines to be appropriate; “(C) no requirement under section 5138 of the Revised Statutes or any other provision of law relating to the capital of a national bank shall apply with respect to a bridge bank; “(D) the Comptroller of the Currency may establish a limitation on the extent to which any person may become indebted to a bridge bank without regard to the amount of the bridge bank’s capital or surplus; “(E)(i) the board of directors of a bridge bank shall elect a chairperson who may also serve in the position of chief executive officer, except that such person shall not serve either as chairperson or as chief executive officer without the prior approval of the Corporation; “(ii) the board of directors of a bridge bank may appoint a chief executive officer who is not also the chairperson, except that such person shall not serve as chief executive officer without the prior approval of the Corporation; “(F) a bridge bank shall not be required to purchase stock of any Federal Reserve bank; “(G) the Comptroller of the Currency shall waive any requirement for a fidelity bond with respect to a bridge bank at the request of the Corporation; 103 STAT. 249 “(H) any judicial action to which a bridge bank becomes a party by virtue of its acquisition of any assets or assumption of any liabilities of a bank in default shall be stayed from further proceedings for a period of up to 45 days at the request of the bridge bank; “(I) no agreement which tends to diminish or defeat the right, title or interest of a bridge bank in any asset of an insured bank in default acquired by it shall be valid against the bridge bank unless such agreement— “(i) is in writing, “(ii) was executed by such insured bank in default and the person or persons claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by such insured bank in default, “(iii) was approved by the board of directors of such insured bank in default or its loan committee, which approval shall be reflected in the minutes of said board or committee, and “(iv) has been, continuously from the time of its execution, an official record of such insured bank in default; “(J) notwithstanding section 13(e)(2), any agreement relating to an extension of credit between a Federal home loan bank or Federal Reserve bank and any insured depository institution which was executed before the extension of credit by such bank to such depository institution shall be treated as having been executed contemporaneously with such extension of credit for purposes of subparagraph (I); and “(K) except with the prior approval of the Corporation, a bridge bank may not, in any transaction or series of transactions, issue capital stock or be a party to any merger, consolidation, disposition of assets or liabilities, sale or exchange of capital stock, or similar transaction, or change its charter. “(5) Capital.— “(A) No capital required.—The Corporation shall not be required to— “(i) issue any capital stock on behalf of a bridge bank chartered under this subsection; or “(ii) purchase any capital stock of a bridge bank, except that notwithstanding any other provision of Federal or State law, the Corporation may purchase and retain capital stock of a bridge bank in such amounts and on such terms as the Corporation, in its discretion, determines to be appropriate. “(B) Operating funds in lieu of capital.—Upon the organization of a bridge bank, and thereafter, as the Board of Directors may, in its discretion, determine to be necessary or advisable, the Corporation may make available to the bridge bank, upon such terms and conditions and in such form and amounts as the Corporation may in its discretion determine, funds for the operation of the bridge bank in lieu of capital. “(C) Authority to issue capital stock.—Whenever the Board of Directors determines it is advisable to do so, the 103 STAT. 250Corporation shall cause capital stock of a bridge bank to be issued and offered for sale in such amounts and on such terms and conditions as the Corporation may, in its discretion, determine. “(6) No federal status.— “(A) Agency status.—A bridge bank is not an agency, establishment, or instrumentality of the United States. “(B) Employee status.—Representatives for purposes of paragraph (1)(B), interim directors, directors, officers, employees, or agents of a bridge bank are pot, solely by virtue of service in any such capacity, officers or employees of the United States. Any employee of the Corporation or of any Federal instrumentality who serves at the request of the Corporation as a representative for purposes of paragraph (1)(B), interim director, director, officer, employee, or agent of a bridge bank shall not— “(i) solely by virtue of service in any such capacity lose any existing status as an officer or employee of the United States for purposes of title 5, United States Code, or any other provision of law, or “(ii) receive any salary or benefits for service in any such capacity with respect to a bridge bank in addition to such salary or benefits as are obtained through employment with the Corporation or such Federal instrumentality. “(7) Assistance authorized.—The Corporation may, in its discretion, provide assistance under section 13(c) to facilitate any transaction described in clause (i), (ii), or (iii) of paragraph (10)(A) with respect to any bridge bank in the same manner and to the same extent as such assistance may be provided under such section with respect to an insured bank in default, or to facilitate a bridge bank’s acquisition of any assets or the assumption of any liabilities of an insured bank in default. “(8) Acquisition.— “(A) In general.—The responsible agency shall notify the Attorney General of any transaction involving the merger or sale of a bridge bank requiring approval under section 18(c) and if a report on competitive factors is requested within 10 days, such transaction may not be consummated before the 5th calendar day after the date of approval by the responsible agency with respect thereto. If the responsible agency has found that it must act immediately to prevent the probable failure of 1 of the banks involved, the preceding sentence does not apply and the transaction may be consummated immediately upon approval by the agency. “(B) By out-of-state holding company.—Any depository institution, including an out-of-State depository institution, or any out-of-State depository institution holding company may acquire and retain the capital stock or assets of, or otherwise acquire and retain a bridge bank if the bridge bank at any time had assets aggregating $500,000,000 or more, as determined by the Corporation on the basis of the bridge bank’s reports of condition or on the basis of the last available reports of condition of any insured bank in default, which institution has been acquired, or whose assets have been acquired, by the bridge bank. The acquiring 103 STAT. 251entity may acquire the bridge bank only in the same manner and to the same extent as such entity may acquire an insured bank in default under section 13(f)(2). “(9) Duration of bridge bank.—Subject to paragraphs (11) and (13), the status of a bridge bank as such shall terminate at the end of the 2-year period following the date it was granted a charter. The Board of Directors may, in its discretion, extend the status of the bridge bank as such for 3 additional 1-year periods. “(10) Termination of bridge bank status —The status of any bridge bank as such shall terminate upon the earliest of— “(A) the merger or consolidation of the bridge bank with a depository institution that is not a bridge bank; “(B) at the election of the Corporation, the sale of a majority of the capital stock of the bridge bank to an entity other than the Corporation and other than another bridge bank; “(C) the sale of 80 percent, or more, of the capital stock of the bridge bank to an entity other than the Corporation and other than another bridge bank; “(D) at the election of the Corporation, either the assumption of all or substantially all of the deposits and other liabilities of the bridge bank by a depository institution holding company or a depository institution that is not a bridge bank, or the acquisition of all or substantially all of the assets of the bridge bank by a depository institution holding company, a depository institution that is not a bridge bank, or other entity as permitted under applicable law; and “(E) the expiration of the period provided in paragraph (9), or the earlier dissolution of the bridge bank as provided in paragraph (12). “(11) Effect of termination events.— “(A) Merger or consolidation.—A bridge bank that participates in a merger or consolidation as provided in paragraph (10)(A) shall be for all purposes a national bank with all the rights, powers, and privileges thereof, and such merger or consolidation shall be conducted in accordance with, and shall have the effect provided in, the provisions of applicable law. “(B) Charter conversion.—Following the sale of a majority of the capital stock of the bridge bank as provided in paragraph (10)(B), the Corporation may amend the charter of the bridge bank to reflect the termination of the status of the bridge bank as such, whereupon the bank shall remain a national bank, with all of the rights, powers, and privileges thereof, subject to all laws and regulations applicable thereto. “(C) Sale of stock.—Following the sale of 80 percent or more of the capital stock of a bridge bank as provided in paragraph (10)(C), the bank shall remain a national bank, with all of the rights, powers, and privileges thereof, subject to all laws and regulations applicable thereto. “(D) Assumption of liabilities and sale of assets.—Following the assumption of all or substantially all of the liabilities of the bridge bank, or the sale of all or substantially all of the assets of the bridge bank, as provided in 103 STAT. 252paragraph (10)(D), at the election of the Corporation the bridge bank may retain its status as such for the period provided in paragraph (8). “(E) Effect on holding companies.—A depository institution holding company acquiring a bridge bank under section 13(f), paragraph (8)(B) (or any predecessor provision), or both provisions, shall not be impaired or adversely affected by the termination of the status of a bridge bank as a result of subparagraph (A), (B), (C), or (D) of paragraph (10), and shall be entitled to the rights and privileges provided in section 13(f). “(F) Amendments to charter.—Following the consummation of a transaction described in subparagraph (A), (B), (C), or (D) of paragraph (10), the charter of the resulting institution shall be amended to reflect the termination of bridge bank status, if appropriate. “(12) Dissolution of bridge bank.— “(A) In general.—Notwithstanding any other provision of State or Federal law, if the bridge bank’s status as such has not previously been terminated by the occurrence of an event specified in subparagraphs (A), (B), (C), or (D) of paragraph (10)— “(i) the Board of Directors may, in its discretion, dissolve a bridge bank in accordance with this paragraph at any time; and “(ii) the Board of Directors shall promptly commence dissolution proceedings in accordance with this paragraph upon the expiration of the 2-year period following the date the bridge bank was chartered, or any extension thereof, as provided in paragraph (9). “(B) Procedures.—The Comptroller of the Currency shall appoint the Corporation receiver for a bridge bank upon certification by the Board of Directors to the Comptroller of the Currency of its determination to dissolve the bridge bank. The Corporation as such receiver shall wind up the affairs of the bridge bank in conformity with the provisions of law relating to the liquidation of closed national banks. With respect to any such bridge bank, the Corporation as such receiver shall have all the rights, powers, and privileges and shall perform the duties related to the exercise of such rights, powers, or privileges granted by law to a receiver of any insured depository institution and notwithstanding any other provision of law in the exercise of such rights, powers, and privileges the Corporation shall not be subject to the direction or supervision of any State agency or other Federal agency. “(13) Multiple bridge banks.—Subject to paragraph (1)(B)(i), the Corporation may, in the Corporation’s discretion, organize 2 or more bridge banks under this subsection to assume any deposits of, assume any other liabilities of, and purchase any assets of a single bank in default.”. SEC. 215. FSLIC RESOLUTION FUND. The Federal Deposit Insurance Act is amended by inserting after section 11 the following: 103 STAT. 253 “SEC. 11A. FSLIC RESOLUTION FUND. “(a) Established.— “(1) In general.—There is established a separate fund to be designated as the FSLIC Resolution Fund which shall be managed by the Corporation and separately maintained and not commingled. “(2) Transfer of fslic assets and liabilities.— “(A) In general.—Except as provided in section 21A of the Federal Home Loan Bank Act, all assets and liabilities of the Federal Savings and Loan Insurance Corporation on the day before the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 shall be transferred to the FSLIC Resolution Fund. “(B) Additional claims on assets.—The FSLIC Resolution Fund shall pay to the Savings Association Insurance Fund such amounts as are needed for administrative and supervisory expenses from the date of enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 through September 30, 1991. “(3) Separate holding.—Assets and liabilities transferred to the FSLIC Resolution Fund shall be the assets and liabilities of the Fund and not of the Corporation and shall not be consolidated with the assets and liabilities of the Bank Insurance Fund, the Savings Association Insurance Fund, or the Corporation for accounting, reporting, or any other purpose. “(b) Source of Funds.—The FSLIC Resolution Fund shall be funded from the following sources to the extent funds are needed in the listed priority: “(1) Income earned on assets of the FSLIC Resolution Fund. “(2) Liquidating dividends and payments made on claims received by the FSLIC Resolution Fund from receiverships to the extent such funds are not required by the Resolution Funding Corporation pursuant to section 21B of the Federal Home Loan Bank Act or the Financing Corporation pursuant to section 21 of such Act. “(3) Amounts borrowed by the Financing Corporation pursuant to section 21 of the Federal Home Loan Bank Act. “(4) During the period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and ending on December 31, 1991, amounts assessed against Savings Association Insurance Fund members by the Corporation pursuant to section 7 which are not required by the Financing Corporation pursuant to section 21 of the Federal Home Loan Bank Act or by the Resolution Funding Corporation pursuant to section 21B of the Federal Home Loan Bank Act. “(c) Treasury Backup.— “(1) In general.—If the funds described in subsections (a) and (b) are insufficient to satisfy the liabilities of the FSLIC Resolution Fund, the Secretary of the Treasury shall pay to the Fund such amounts as may be necessary, as determined by the Corporation and the Secretary, for FSLIC Resolution Fund purposes. “(2) Authorization of appropriations.—There are authorized to be appropriated to the Secretary of the Treasury, 103 STAT. 254without fiscal year limitation, such sums as may be necessary to carry out this section. “(d) Legal Proceedings.—Any judgment resulting from a proceeding to which the Federal Savings and Loan Insurance Corporation was a party prior to its dissolution or which is initiated against the Corporation with respect to the Federal Savings and Loan Insurance Corporation or with respect to the FSLIC Resolution Fund shall be limited to the assets of the FSLIC Resolution Fund. “(e) Transfer of Net Proceeds From Sale of RTC Assets.—The FSLIC Resolution Fund shall transfer to the Resolution Funding Corporation any net proceeds from the sale of assets acquired from the Resolution Trust Corporation upon the termination of such Corporation pursuant to section 21A of the Federal Home Loan Bank Act. “(f) Dissolution.—The FSLIC Resolution Fund shall be dissolved upon satisfaction of all debts and liabilities and sale of all assets. Upon dissolution any remaining funds shall be paid into the Treasury. Any administrative facilities and supplies, including offices and office supplies, shall be transferred to the Corporation for use by and to be held as assets of the Savings Association Insurance Fund.”. SEC. 216. AMENDMENTS TO SECTION 12. Section 12 of the Federal Deposit Insurance Act (12 U.S.C. 1822) is amended— (1) by striking out “closed bank” each place it appears and inserting in lieu thereof “depository institution in default”; (2) by striking out subsection (a) and inserting the following: “(a) Bond Not Required; Agents; Fee.—The Corporation as receiver of an insured depository institution or branch of a foreign bank shall not be required to furnish bond and may appoint an agent or agents to assist it in its duties as such receiver. All fees, compensation, and expenses of liquidation and administration shall be fixed by the Corporation, and may be paid by it out of funds coming into its possession as such receiver.”; and (3) in subsection (d)— (A) by striking out “as a stockholder of the depository institution in default, or of any liability of such depositor”; and (B) by striking out “such bank” and inserting in lieu thereof “such depository institution”. SEC. 217. AMENDMENTS TO SECTION 13. Section 13 of the Federal Deposit Insurance Act (12 U.S.C. 1823) is amended— (1) by striking out subsection (a) and inserting the following: “(a) Investment of Corporation’s Funds.— “(1) Authority.—Funds held in the Bank Insurance Fund, the Savings Association Insurance Fund, or the FSLIC Resolution Fund, that are not otherwise employed shall be invested in obligations of the United States or in obligations guaranteed as to principal and interest by the United States. “(2) Limitation.—The Corporation shall not sell or purchase any obligations described in paragraph (1) for its own account, at any one time aggregating in excess of $100,000, without the approval of the Secretary of the Treasury. The Secretary may approve a transaction or class of transactions subject to the 103 STAT. 255 “(3) visions of this paragraph under such conditions as the Secretary may determine.”; (2) in subsection (b)— (A) by striking out “banking and checking” and “banking or checking” each place such terms appear and inserting in lieu thereof “depository”; (B) by striking out “bank” (except “Federal Reserve bank”) each place such term appears and inserting in lieu thereof “depository institution”; (3) in subsection (c)— (A) by striking out “closing” or “closed” each place such terms appear and inserting in lieu thereof “default” or “in default”, (B) by striking out “an” before “closed insured bank” each place such terms appear and inserting in lieu thereof “a”; (C) by striking out “in default insured depository institution” each place such term appears and inserting in lieu thereof “insured depository institution in default”; (D) in paragraph (2)(A)— (i) by striking out “such insured institution” and “an insured depository institution” and inserting in lieu thereof “such other insured depository institution” and “another insured depository institution”, respectively; (ii) by inserting “any or all of the” after “the sale of”; and (iii) by striking out “and the assumption” and inserting in lieu thereof “or the assumption of any or all”; (E) by adding at the end of paragraph (2) the following: “(C) Any action to which the Corporation is or becomes a party by acquiring any asset or exercising any other authority set forth in this section shall be stayed for a period of 60 days at the request of the Corporation.”; (F) in paragraph (3), by striking out “section 13(f) of this Act” and inserting in lieu thereof “subsection (f) or (k) of this section”; (G) in paragraph (4)— (i) by striking out “banking” and inserting in lieu thereof “depository”; and (ii) by inserting at the end of subparagraph (A) the following: “In calculating the cost of assistance, the Corporation shall include (i) the immediate and long-term obligations of the Corporation with respect to such assistance, including contingent liabilities, and (ii) the Federal tax revenues foregone by the Government, to the extent reasonably ascertainable.”; and (H) by striking out paragraph (8); (I) by redesignating paragraphs (6) and (7) as paragraphs (7) and (8), respectively; and (J) by inserting after paragraph (5) the following: “(6) The transfer of any assets or liabilities associated with any trust business of an insured depository institution in default under subparagraph (2)(A) shall be effective without any State or Federal approval, assignment, or consent with respect thereto.”; and (K) by adding at the end the following: “(9) Payments made under this subsection shall be made— 103 STAT. 256 “(A) from the Bank Insurance Fund in the case of payments to or on behalf of a member of such Fund; or “(B) from the Savings Association Insurance Fund or from funds made available by the Resolution Trust Corporation in the case of payments to or on behalf of any Savings Association Insurance Fund member.”; (4) by striking out subsections (d) and (e) and inserting the following: “(d) Sale of Assets to Corporation.— “(1) In general.—Any conservator, receiver, or liquidator appointed for any insured depository institution in default, including the Corporation acting in such capacity, shall be entitled to offer the assets of such depository institutions for sale to the Corporation or as security for loans from the Corporation. “(2) Proceeds.—The proceeds of every sale or loan of assets to the Corporation shall be utilized for the same purposes and in the same manner as other funds realized from the liquidation of the assets of such depository institutions. “(3) Rights and powers of corporation.— “(A) In general.—With respect to any asset acquired or liability assumed pursuant to this section, the Corporation shall have all of the rights, powers, privileges, and authorities of the Corporation as receiver under sections 11 and 15(b). “(B) Rule of construction.—Such rights, powers, privileges, and authorities shall be in addition to and not in derogation of any rights, powers, privileges, and authorities otherwise applicable to the Corporation. “(C) Fiduciary responsibility.—In exercising any right, power, privilege, or authority described in subparagraph (A), the Corporation shall continue to be subject to the fiduciary duties and obligations of the Corporation as receiver to claimants against the insured depository institution in receivership. “(4) Loans.—The Corporation, in its discretion, may make loans on the security of or may purchase and liquidate or sell any part of the assets of an insured depository institution which is now or may hereafter be in default. “(e) Agreements Against Interests of Corporation.—No agreement which tends to diminish or defeat the interest of the Corporation in any asset acquired by it under this section or section 11, either as security for a loan or by purchase or as receiver of any insured depository institution, shall be valid against the Corporation unless such agreement— “(1) is in writing, “(2) was executed by the depository institution and any person claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the depository institution, “(3) was approved by the board of directors of the depository institution or its loan committee, which approval shall be reflected in the minutes of said board or committee, and “(4) has been, continuously, from the time of its execution, an official record of the depository institution.”; (5) in subsection (f)— 103 STAT. 257 (A) by striking out “closed” and “closing” each place such terms appear (except in “closed bank”) and inserting in lieu thereof “in default” or “default”, respectively; (B) by striking out “closed bank” and inserting in lieu thereof “bank in default”; (C) in paragraph (1), by inserting “savings association” after “out-of-state bank”; (D) in paragraph (2)(B)(iii), by striking out “a unanimous vote” and inserting in lieu thereof “a vote of 75 percent of”; (E) by striking out “the constitution of any State,”; (F) in paragraph (6)(A), by inserting “the offeror which made the initial lowest acceptable offer and” after “the Corporation shall permit”; (G) by adding at the end of paragraph (7) the following: “(C) if in the opinion of the Corporation the acquisition threatens the safety and soundness of the acquirer or does not result in the future viability of the resulting depository institution”; (H) in paragraph (8), by striking out subparagraphs (A), (B), and (D) and redesignating paragraphs (C), (E), (F), and (G) as subparagraphs (A), (B), (C), and (D), respectively; (I) in paragraph (9)— (i) in the paragraph heading, by striking out “NONBANK” and inserting in lieu thereof “CERTAIN”; (ii) in paragraph (9)(A), by inserting “, other than a subsidiary that is an insured depository institution,” after “subsidiary” and by striking out “which is not an insured bank”; and (iii) in paragraph (9)(B), by inserting “or an affiliate of an insured depository institution” after “intermediate holding company”; and (J) by adding at the end thereof the following new paragraph: “(12) Acquisition of minority bank by minority bank holding company without regard to asset size.— “(A) In general.—For the purpose of ensuring continued minority control of a minority controlled bank, paragraphs (2) and (3) shall apply with respect to the acquisition of a minority-controlled bank by an out-of-State minority-controlled depository institution or depository institution holding company without regard to the fact that the total assets of such minority-controlled bank is less than $500,000,000. “(B) Definitions.—For purposes of this paragraph: “(i) Minority bank.—The term ‘minority bank’ means any depository institution described in clause (i), (ii), or (iii) of section 19(b)(1)(A) of the Federal Reserve Act— “(I) more than 50 percent of the ownership or control of which is held by one or more minority individuals; and “(II) more than 50 percent of the net profit or loss of which accrues to minority individuals. “(ii) Minority.—The term ‘rpinority’ means any Black American, Native American, Hispanic American, or Asian American.”; 103 STAT. 258 (6) in subsection (h), by striking out “a closed insured depository institution”, “closing”, and “insurance fund” and inserting in lieu thereof “an insured depository institution in default”, “default”, and “Bank Insurance Fund”, respectively; (7) in subsection (i)— (A) by inserting “depository” before “institution” each place such term appears; (B) in paragraph (1)(C)— (i) by striking out “corporation” and inserting in lieu thereof “Corporation”; (ii) by striking out “chartered bank” and inserting in lieu thereof “chartered depository institution”; (iii) by inserting “, a savings association,” after “State member bank”; and (iv) by inserting “or the Director of the Office of Thrift Supervision” after “Federal Reserve System”; (C) in paragraph (2), by striking out “or insured or guaranteed under State law”; and (D) by striking out paragraphs (10) and (12); and (8) by adding at the end thereof the following: “(k) Emergency Acquisitions.— “(1) In general.— “(A) Acquisitions authorized.— “(i) Transactions described.—Notwithstanding any provision of State law, upon determining that severe financial conditions threaten the stability of a significant number of savings associations, or of savings associations possessing significant financial resources, the Corporation, in its discretion and if it determines such authorization would lessen the risk to the Corporation, may authorize— “(I) a savings association that is eligible for assistance pursuant to subsection (c) to merge or consolidate with, or to transfer its assets and liabilities to, any other savings association or any insured bank, “(II) any other savings association to acquire control of such savings association, or “(III) any company to acquire control of such savings association or to acquire the assets or assume the liabilities thereof. The Corporation may not authorize any transaction under this subsection unless the Corporation determines that the authorization will not present a substantial risk to the safety or soundness of the savings association to be acquired or any acquiring entity. “(ii) Terms of transactions.—Mergers, consolidations, transfers, and acquisitions under this subsection shall be on such terms as the Corporation shall provide. “(iii) Approval by appropriate agency.—Where otherwise required by law, transactions under this subsection must be approved by the appropriate Federal banking agency or every party thereto. “(iv) Acquisitions by savings associations.—Any Federal savings association that acquires another savings association pursuant to clause (i) may, with the concurrence of the Director of the Office of Thrift 103 STAT. 259Supervision, hold that savings association as a subsidiary notwithstanding the percentage limitations of section 5(c)(4)(B) of the Home Owners’ Loan Act. “(v) Dual service.—Dual service by a management official that would otherwise be prohibited under the Depository Institution Management Interlocks Act may, with the approval of the Corporation, continue for up to 10 years. “(vi) Continued applicability of certain state restrictions.—Nothing in this subsection overrides or supersedes State laws restricting or limiting the activities of a savings association on behalf of another entity. “(B) Consultation with state official.— “(i) Consultation required.—Before making a determination to take any action under subparagraph (A), the Corporation shall consult the State official having jurisdiction of the acquired institution. “(ii) Period for state response.—The official shall be given a reasonable opportunity, and in no event less than 48 hours, to object to the use of the provisions of this paragraph. Such notice may be provided by the Corporation prior to its appointment as receiver, but in anticipation of an impending appointment. “(iii) Approval over objection of state official.—If the official objects during such period, the Corporation may use the authority of this paragraph only by a vote of 75 percent or more of the voting members of the Board of Directors. The Corporation shall provide to the official, as soon as practicable, a written certification of its determination. “(2) Solicitation of offers.— “(A) In general.—In considering authorizations under this subsection, the Corporation may solicit such offers or proposals as are practicable from any prospective purchasers or merger partners it determines, in its sole discretion, are both qualified and capable of acquiring the assets and liabilities of the savings association. “(B) Minority-controlled institutions.—In the case of a minority-controlled depository institution, the Corporation shall seek an offer from other minority-controlled depository institutions before seeking an offer from other persons or entities. “(3) Determination of costs.—In determining the cost of offers under this subsection, the Corporation’s calculations and estimations shall be determinative. The Corporation may set reasonable time limits on offers. “(4) Branching provisions.— “(A) In general.—If a merger, consolidation, transfer, or acquisition under this subsection involves a savings association eligible for assistance and a bank or bank holding company, a savings association may retain and operate any existing branch or branches or any other existing facilities. If the savings association continues to exist as a separate entity, it may establish and operate new branches to the same extent as any savings association that is not affiliated with a bank holding company and the home office of which is located in the same State. 103 STAT. 260 “(B) Restrictions.— “(i) In general.—Notwithstanding subparagraph (A), if— “(I) a savings association described in such subparagraph does not have its home office in the State of the bank holding company bank subsidiary, and “(II) such association does not qualify as a domestic building and loan association under section 7701(a)(19) of the Internal Revenue Code of 1986, or does not meet the asset composition test imposed by subparagraph (C) of that section on institutions seeking so to qualify, such savings association shall be subject to the conditions upon which a bank may retain, operate, and establish branches in the State in which the Savings Association Insurance Fund member is located. “(ii) Transition period.—The Corporation, for good cause shown, may allow a savings association up to 2 years to comply with the requirements of clause (i). “(5) Assistance before appointment of conservator or receiver.— “(A) Assistance proposals.—The Corporation shall consider proposals by Savings Association Insurance Fund members for assistance pursuant to subsection (c) before grounds exist for appointment of a conservator or receiver for such member under the following circumstances: “(i) Troubled condition criteria.—The Corporation determines— “(I) that grounds for appointment of a conservator or receiver exist or likely will exist in the future unless the member’s tangible capital is increased; “(II) that it is unlikely that the member can achieve positive tangible capital without assistance; and “(III) that providing assistance pursuant to the member’s proposal would be likely to lessen the risk to the Corporation. “(ii) Other criteria.—The member meets the following criteria: “(I) Before enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the member was solvent under applicable regulatory accounting principles but had negative tangible capital. “(II) The member’s negative tangible capital position is substantially attributable to its participation in acquisition and merger transactions that were instituted by the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation for supervisory reasons. “(III) The member is a qualified thrift lender (as defined in section 10(m) of the Home Owners’ Loan Act) or would be a qualified thrift lender if commercial real estate owned and nonperforming commercial loans acquired in acquisition and 103 STAT. 261merger transactions that were instituted by the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation for supervisory reasons were excluded from the member’s total assets. “(IV) The appropriate Federal banking agency has determined that the member’s management is competent and has complied with applicable laws, rules, and supervisory directives and orders. “(V) The member’s management did not engage in insider dealing or speculative practices or other activities that jeopardized the member’s safety and soundness or contributed to its impaired capital position. “(VI) The member’s offices are located in an economically depressed region. “(B) Corporation consideration of assistance proposal.—If a member meets the requirements of clauses (i) and (ii) of subparagraph (A), the Corporation shall consider providing direct financial assistance. “(C) Economically depressed region defined.—For purposes of this paragraph, the term ‘economically depressed region’ means any geographical region which the Corporation determines by regulation to be a region within which real estate values have suffered serious decline due to severe economic conditions, such as a decline in energy or agricultural values or prices.”. SEC. 218. FDIC BORROWING AUTHORITY. Section 14 of the Federal Deposit Insurance Act (12 U.S.C. 1824) is amended— (1) by striking out “$3,000,000,000 outstanding at any one time” and inserting in lieu thereof “$5,000,000,000 outstanding at any one time, subject to the approval of the Secretary of the Treasury”; and (2) by adding at the end the following: “The Corporation may employ such funds for purposes of the Bank Insurance Fund or the Savings Association Insurance Fund and the borrowing shall become a liability of each such fund to the extent funds are employed therefor. There are hereby appropriated to the Secretary, for fiscal year 1989 and each fiscal year thereafter, such sums as may be necessary to carry out this section.”; and (3) by striking out “the current average rate on outstanding marketable and nonmarketable obligations of the United States as of the last day of the month preceding the making of such loan” and inserting in lieu thereof the following: “an amount determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturities”. SEC. 219. EXEMPTION FROM TAXATION; LIMITATION ON BORROWING. Section 15 of the Federal Deposit Insurance Act (12 U.S.C. 1825) is amended— (1) by inserting “(a) General Rule.—” before “All”; and (2) by adding at the end the following new subsections: “(b) Other Exemptions.—When acting as a receiver, the following provisions shall apply with respect to the Corporation: 103 STAT. 262 “(1) The Corporation including its franchise, its capital, reserves, and surplus, and its income, shall be exempt from all taxation imposed by any State, county, municipality, or local taxing authority, except that any real property of the Corporation shall be subject to State, territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed, except that, notwithstanding the failure of any person to challenge an assessment under State law of such property’s value, such value, and the tax thereon, shall be determined as of the period for which such tax is imposed. “(2) No property of the Corporation shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the Corporation, nor shall any involuntary lien attach to the property or the Corporation. “(3) The Corporation shall not be liable for any amounts in the nature of penalties or fines, including those arising from the failure of any person to pay any real property, personal property, probate, or recording tax or any recording or filing fees when due. This subsection shall not apply with respect to any tax imposed (or other amount arising) under the Internal Revenue Code of 1986. “(c) Limitation on Borrowing.— “(1) Cost estimate for outstanding obligations liabilities.—As soon as practicable after the date of enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the Corporation shall estimate the aggregate cost to the Corporation for all outstanding obligations and guarantees of the Corporation which were issued, and all outstanding liabilities which were incurred, by the Corporation before such date. “(2) Estimate of notes and other obligations required.—Before issuing an obligation or making a guarantee, the Corporation shall estimate the cost of such obligations or guarantees. “(3) Inclusion of estimates in financial statements.—The Corporation shall— “(A) reflect in its financial statements the estimates made by the Corporation under paragraphs (1) and (2) of the aggregate amount of the costs to the Corporation for outstanding obligations and other liabilities, and “(B) make such adjustments as are appropriate in the estimate of such aggregate amount not less frequently than quarterly. “(4) Estimate of other assets required—The Corporation shall— “(A) estimate the market value of assets held by it as a result of case resolution activities, with a reduction for expenses expected to be incurred by the Corporation in connection with the management and sale of such assets; “(B) reflect the amounts so estimated in its financial statements; and “(C) make such adjustments as are appropriate of such market value not less than quarterly. “(5) Minimum net worth required.—The Corporation may not issue any note or similar obligation, and may not incur any liability under a guarantee or similar obligation, with respect to either the Bank Insurance Fund or the Savings Association Insurance Fund if, after reduction for the estimated cost of the 103 STAT. 263obligation or guarantee, the net worth of the affected insurance fund would be less than 10 percent of assets. “(6) Exception.—With the prior approval of the Secretary of the Treasury, the Corporation may issue or incur up to $5,000,000,000 in the aggregate of additional liabilities in excess of the limitations of paragraph (5). The amount which the Corporation may borrow from the Treasury under section 14 of this Act shall be reduced by the amount of additional liabilities issued or incurred under this paragraph. “(7) Net worth and asset valuation.—For the purpose of paragraph (5)— “(A) the assets of the Bank Insurance Fund or the Savings Association Insurance Fund shall be calculated based on the most recent audit of such Fund by the Comptroller General of the United States, subject to any adjustments described in paragraph (3) or (4) and taking into account any subsequent transactions; and “(B) the net worth of the Bank Insurance Fund or the Savings Association Insurance Fund shall be calculated based on the most recent audit of such Fund by the Comptroller General of the United States, subject to any adjustments described in paragraphs (3) and (4) and taking into account any subsequent transactions. “(d) Full Faith and Credit.—The full faith and credit of the United States is pledged to the payment of any obligation issued after the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 by the Corporation, with respect to both principal and interest, if— “(1) the principal amount of such obligation is stated in the obligation; and “(2) the term to maturity or the date of maturity of such obligation is stated in the obligation.”. SEC. 220. REPORTS. (a) In General.—Section 17 of the Federal Deposit Insurance Act (12 U.S.C. 1827) is amended— (1) by striking out subsection (a) and inserting the following: “(a) Annual Reports on BIF, SAIF, and the FSLIC Resolution Fund.— “(1) In general.—The Corporation shall annually submit a full report of its operations, activities, budget, receipts, and expenditures for the preceding 12-month period. The report shall include, with respect to the Bank Insurance Fund, the Savings Association Insurance Fund, and the FSLIC Resolution Fund, an analysis by the Corporation of— “(A) the current financial condition of each such fund; “(B) the purpose, effect, and estimated cost of each resolution action taken for an insured depository institution during the preceding year; “(C) the extent to which the actual costs of assistance provided to, or for the benefit of, an insured depository institution during the preceding year exceeded the estimated costs of such assistance reported in a previous year under paragraph (A); “(D) the exposure of each insurance fund to changes in those economic factors most likely to affect the condition of that fund; 103 STAT. 264 “(E) a current estimate of the resources needed for the Bank Insurance Fund, the Savings Association Insurance Fund, or the FSLIC Resolution Fund to achieve the purposes of this Act; and “(F) any findings, conclusions, and recommendations for legislative and administrative actions considered appropriate to future resolution activities by the Corporation. “(2) Manner of submission.—Such report shall be submitted to the President of the Senate and the Speaker of the House of Representatives, who shall cause the same to be printed for the information of Congress, and the President as soon as practicable after the first day of January each year.”; (2) by redesignating subsections (b), (c), and (d) as (e), (I), and (g), respectively; and (3) by inserting after subsection (a) the following new subsections: “(b) Quarterly Reports to Treasury.— “(1) Financial operating plans and forecasts.—Before the beginning of each fiscal quarter, the Corporation shall provide to the Secretary of the Treasury a copy of the Corporation’s financial operating plans and forecasts. “(2) Financial condition and reports of operations.—As soon as practicable after the end of each fiscal quarter, the Corporation shall submit to the Secretary of the Treasury a copy of the report of the Corporation’s financial condition as of the end of such fiscal quarter and the results of the Corporation’s operations during such fiscal quarter. “(3) Items to be included.—The plans, forecasts, and reports required under this subsection shall reflect the estimates required to be made under section 15(b) of the liabilities and obligations of the Corporation described in such section. “(4) Rule of construction.—The requirement to provide plans, forecasts, and reports to the Secretary of the Treasury under this subsection may not be construed as implying any obligation on the part of the Corporation to obtain the consent or approval of such Secretary with respect to such plans, forecasts, and reports. “(c) Reports to OMB.— “(1) Financial information.—The Corporation shall continue to provide to the Director of the Office of Management and Budget financial information consistent with that contained in the reports that were being provided to the Director immediately prior to the effective date of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. “(2) Financial operating plans and forecasts.—The Corporation shall also provide to the Director copies of the Corporation’s financial operating plans and forecasts as prepared by the Corporation in the ordinary course of its operations, and copies of the quarterly reports of the Corporation s financial condition and results of operations as prepared by the Corporation in the ordinary course of its operations. “(3) Rule of construction.—This subsection may not be construed as implying any obligation on the part of the Corporation to consult with or obtain the consent or approval of the Director with respect to any reports, plans, forecasts, or other information referred to in paragraph (1) or (2) or any jurisdic-103 STAT. 265tion or oversight over the affairs or operations of the Corporation. “(d) Audit.— “(1) Audit required.—The Comptroller General shall audit annually the financial transactions of the Corporation, the Bank Insurance Fund, the Savings Association Insurance Fund, and the FSLIC Resolution Fund in accordance with generally accepted government auditing standards. “(2) Access to books and records.—All books, records, accounts, reports, files, and property belonging to or used by the Corporation, the Bank Insurance Fund, the Savings Association Insurance Fund, and the FSLIC Resolution Fund, or by an independent certified public accountant retained to audit the Fund’s financial statements, shall be made available to the Comptroller General.”. (b) Specific Reports.— (1) Risk-based assessments.— (A) Report required.—The Federal Deposit Insurance Corporation shall study the establishment of premium assessment categories related to types of risk to the insurance funds and shall report its recommendations to the Congress not later than January 1, 1991. If the Corporation should recommend the establishment of such a risk-based assessment plan, it shall also provide a timetable and plan for implementation. (B) Congressional response.—Not later than 180 days after receipt by the Congress of the report required under subparagraph (A) and the accompanying plan and timetable, the Congress shall make a recommendation to the Chairperson of the Board of Directors regarding the disposition of such plan and timetable. (2) Study of deposit insurance pass-through.—Not later than 6 months after the date of enactment of this Act, the Federal Deposit Insurance Corporation shall transmit to the Congress a report containing its findings and recommendations relating to the pass-through of deposit insurance either to individual investors in unit investment trust funds or to individual participants in pension or to profit sharing plans qualified under section 401 of the Internal Revenue Code of 1986. Such report shall also contain the Corporation’s assessment of the potential effects of broadening deposit insurance coverage on the safety of the insurance funds and the operation of capital markets. (3) Report on directors’ and officers’ liability insurance.— (A) Study.—The Federal Deposit Insurance Corporation shall, together with the Secretary of the Treasury and the Attorney General, conduct a comprehensive study of directors’ and officers’ liability insurance and depository institution bonds, and the availability of such insurance for directors and officers of insured depository institutions. The study shall include— (i) consideration of State laws limiting liability for directors and officers; (ii) the effect of contractual provisions limiting insurance coverage when an institution is placed in receivership or conservatorship; 103 STAT. 266 (iii) provisions limiting coverage when a claim is made by the Federal Deposit Insurance Corporation; and (iii) provisions limiting claims made by one insured against another insured. In addition, the study shall consider the need for such insurance or bonds and the effect any change in any of the above noted conditions or terms may have on the future availability of such insurance, and the ability of depository institutions to attract qualified officers and directors. (B) Report.—Not later than 6 months after the date of enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the Federal Deposit Insurance Corporation, together with the Secretary of the Treasury and the Attorney General, shall report the findings from the study under subparagraph (A) to the Congress, together with legislative recommendations, if appropriate. SEC. 221. REGULATIONS GOVERNING INSURED DEPOSITORY INSTITUTIONS. Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended— (1) by striking out “(a)” and the 1st 2 sentences of subsection (a) and inserting the following: “(a) Insurance Logo.— “(1) Insured savings associations.—Each insured savings association shall display at each place of business maintained by such association a sign containing only the following items: “(A) A statement that insured deposits are backed by the full faith and credit of the United States Government. “(B) A statement that deposits are federally insured to $100,000. “(C) The symbol of an eagle. The sign shall not contain any reference to a Government agency and shall accord each item substantially equal prominence. “(2) Insured banks.—Not later than 30 days after the date of enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, each insured bank shall display at each place of business maintained by such bank one of the following: “(A) The sign required to be displayed by insured banks under regulations prescribed by the Corporation in effect on January 1, 1989. “(B) The sign prescribed under paragraph (1). “(3) Regulations.—The Corporation shall prescribe regulations to carry out the purposes of this subsection, including regulations governing the manner of display or use of such signs, except that the size of the sign prescribed under paragraph (1) shall be similar to that prescribed under paragraph (2)(A). Initial regulations under this subsection shall be prescribed on the date of enactment of the Financial Institutions Recovery, Reform, and Enforcement Act of 1989.”; (2) in subsection (c)— (A) in paragraph (2), by striking out subparagraph (C) and inserting the following: 103 STAT. 267 “(C) the Corporation if the acquiring, assuming, or resulting bank is to be a State nonmember insured bank (except a District bank or a savings bank supervised by the Director of the Office of Thrift Supervision); and “(D) the Director of the Office of Thrift Supervision if the acquiring, assuming, or resulting institution is to be a savings association.”; (B) by striking out paragraph (12); (C) in paragraphs (3), (4), (6), (7), and (9), by inserting after the word “bank” or “banks” each time it appears, the words “or savings association” or “or savings associations”, respectively; and (D) in paragraph (3), by striking out “failure” and inserting in lieu thereof “default”; (3) in subsection (i)(2)— (A) by striking out “insured bank” and inserting in lieu thereof “insured Federal depository institution”; (B) by striking out “insured State bank” and inserting in lieu thereof “insured State depository institution”; (C) by striking out the period at the end of subpargraph (C) and inserting in lieu thereof “; and”; (D) by inserting after subparagraph (C) the following new subparagraph: “(D) the Director of the Office of Thrift Supervision if the resulting institution is to be an insured State savings association.”; (E) in paragraph (4)(D), by inserting “and fitness” after “character”; and (F) by striking out paragraph (5); and (4) by adding at the end the following: “(m) Activities of Savings Associations and Their Subsidiaries.— “(1) Procedures.— When an insured savings association establishes or acquires a subsidiary or when an insured savings association elects to conduct any new activity through a subsidiary that the insured savings association controls, the insured savings association— “(A) shall notify the Corporation and the Director of the Office of Thrift Supervision not less than 30 days prior to the establishment, or acquisition, of any such subsidiary, and not less than 30 days prior to the commencement of any such activity, and in either case shall provide at that time such information as each such agency may, by regulation, require; and “(B) shall conduct the activities of the subsidiary in accordance with regulations and orders of the Director of the Office of Thrift Supervision. “(2) Enforcement powers.—With respect to any subsidiary of an insured savings association: “(A) the Corporation and the Director of the Office of Thrift Supervision shall each have, with respect to such subsidiary, the respective powers that each has with respect to the insured savings association pursuant to this section or section 8; and “(B) the Director of the Office of Thrift Supervision may determine, after notice and opportunity for hearing, that the continuation by the insured savings association of its 103 STAT. 268ownership or control of, or its relationship to, the subsidiary— “(i) constitutes a serious risk to the safety, soundness, or stability of the insured savings association, or “(ii) is inconsistent with sound banking principles or with the purposes of this Act. Upon making any such determination, the Corporation or the Director of the Office of Thrift Supervision shall have authority to order the insured savings association to divest itself of control of the subsidiary. The Director of the Office of Thrift Supervision may take any other corrective measures with respect to the subsidiary, including the authority to require the subsidiary to terminate the activities or operations posing such risks, as the Director may deem appropriate. “(3) Activities incompatible with deposit insurance.— “(A) In general.—The Corporation may determine by regulation or order that any specific activity poses a serious threat to the Savings Association Insurance Fund. Prior to adopting any such regulation, the Corporation shall consult with the Director of the Office of Thrift Supervision and shall provide appropriate State supervisors the opportunity o comment thereon, and the Corporation shall specifically take such comments into consideration. Any such regulation shall be issued in accordance with section 553 of title 5, United States Code. If the Board of Directors makes such a determination with respect to an activity, the Corporation shall have authority to order that no Savings Association Insurance Fund member may engage in the activity directly. “(B) Authority of director.—This section does not limit the authority of the Office of Thrift Supervision to issue regulations to promote safety and soundness or to enforce compliance with other applicable laws. “(C) Additional authority of fdic to prevent serious risks to insurance fund.—Notwithstanding subparagraph (A), the Corporation may prescribe and enforce such regulations and issue such orders as the Corporation determines to be necessary to prevent actions or practices of savings associations that pose a serious threat to the Savings Association Insurance Fund or the Bank Insurance Fund. “(4) ‘Subsidiary’ defined.—As used in this subsection, the term ‘subsidiary’ does not include an insured depository institution. “(5) Applicability to certain savings banks.—Subparagraphs (A) and (B) of paragraph (1) of this subsection do not apply to— “(A) any Federal savings bank that was chartered prior to October 15, 1982, as a savings bank under State law, or “(B) a savings association that acquired its principal assets from an institution that was chartered prior to October 15, 1982, as a savings bank under State law. “(n) Calculation of Capital.—No appropriate Federal banking agency shall allow any insured depository institution to include an unidentifiable intangible asset in its calculation of compliance with the appropriate capital standard, if such unidentifiable intangible 103 STAT. 269asset was acquired after April 12, 1989, except to the extent permitted under section 5(t) of the Home Owners’ Loan Act.” SEC. 222. ACTIVITIES OF SAVINGS ASSOCIATIONS. The Federal Deposit Insurance Act is amended by adding at the end the following new section: “SEC. 28. ACTIVITIES OF SAVINGS ASSOCIATIONS. “(a) In General.—On and after January 1, 1990, a savings association chartered under State law may not engage as principal in any type of activity, or in any activity in an amount, that is not permissible for a Federal savings association unless— “(1) the Corporation has determined that the activity would pose no significant risk to the affected deposit insurance fund; and “(2) the savings association is and continues to be in compliance with the fully phased-in capital standards prescribed under section 5(t) of the Home Owners’ Loan Act. “(b) Differences of Magnitude Between State and Federal Powers.—Notwithstanding subsection (a)(I), if an activity (other than an activity described in section 5(c)(2)(B) of the Home Owners’ Loan Act) is permissible for a Federal savings association, a savings association chartered under State law may engage as principal in that activity in an amount greater than the amount permissible for a Federal savings association if— “(1) the Corporation has not determined that engaging in that amount of the activity poses any significant risk to the affected deposit insurance fund; and “(2) the savings association chartered under State law is and continues to be in compliance with the fully phased-in capital standards prescribed under section 5(t) of the Home Owners’ Loan Act. “(c) Equity Investments by State Savings Associations.— “(1) In general.—Notwithstanding subsections (a) and (b), a savings association chartered under State law may not directly acquire or retain any equity investment of a type or in an amount that is not permissible for a Federal savings association. “(2) Exception for service corporations.—Paragraph (1) does not prohibit a savings association from acquiring or retaining shares of one or more service corporations if— “(A) the Corporation has determined that no significant risk to the affected deposit insurance fund is posed by— “(i) the amount that the association proposes to acquire or retain, or “(ii) the activities in which the service corporation engages; and “(B) the savings association is and continues to be in compliance with the fully phased-in capital standards prescribed under section 5(t) of the Home Owners’ Loan Act. “(3) Transition rule.— “(A) In general.—The Corporation shall require any savings association to divest any equity investment the retention of which is not permissible under paragraph (1) or (2) as quickly as can be prudently done, and in any event not later than July 1, 1994. 103 STAT. 270 “(B) Treatment of noncompliance during divestment.—With respect to any equity investment held by any savings association on May 1, 1989, the savings association shall be deemed not to be in violation of the prohibition in paragraph (1) or (2) on retaining such investment so long as the savings association complies with any applicable requirement established by the Corporation pursuant to subparagraph (A) for divesting such investments. “(d) Corporate Debt Securities Not of Investment Grade.— “(1) In general.—No savings association may, directly or through a subsidiary, acquire or retain any corporate debt security not of investment grade. “(2) Exception for securities held by qualified affiliate.—Paragraph (1) shall not apply with respect to any corporate debt security not of investment grade which is acquired and retained by any qualified affiliate of a savings association. “(3) Transition rule.— “(A) In general.—The Corporation shall require any savings association or any subsidiary of any savings association to divest any corporate debt security not of investment grade the retention of which is not permissible under paragraph (1) as quickly as can be prudently done, and in any event not later than July 1, 1994. “(B) Treatment of noncompliance during divestment.—With respect to any corporate debt security not of investment grade held by any savings association or subsidiary on the date of enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the savings association or subsidiary shall be deemed not to be in violation of the prohibition in paragraph (1) on retaining such investment so long as the association or subsidiary complies with any applicable requirement established by the Corporation pursuant to subparagraph (A) for divesting such securities. “(4) Definitions.—For purposes of this section— “(A) Investment grade.—Any corporate debt security is not of ‘investment grade’ unless that security, when acquired by the savings association or subsidiary, was rated in one of the 4 highest rating categories by at least one nationally recognized statistical rating organization. “(B) Qualified affiliate —The term ‘qualified affiliate’ means— “(i) in the case of a stock savings association, an affiliate other than a subsidiary or an insured depository institution; and “(ii) in the case of a mutual savings association, a subsidiary other than an insured depository institution, so long as all of the savings association’s investments in and extensions of credit to the subsidiary are deducted from the savings association’s capital. “(C) Certain securities not included.—The term ‘corporate debt security not of investment grade’ does not include any obligation issued or guaranteed by a corporation that may be held by a Federal savings association without limitation as to percentage of assets under subparagraphs (D), (E), or (F) of section 5(c)(1) of the Home Owners’ Loan Act. 103 STAT. 271 “(e) Transfer of Corporate Debt Security not of Investment Grade in Exchange for a Qualified Note.— “(1) Acquisition of note.—Notwithstanding subsections (a), (b), and (c) of section 5 of the Home Owners’ Loan Act and any other provision of Federal or State law governing extensions of credit by savings associations, any insured savings association, and any subsidiary of any insured savings association, that, on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, holds any corporate debt security not of investment grade may acquire a qualified note in exchange for the transfer of such security to— “(A) any holding company which controls 80 percent or more of the shares of such insured savings association; or “(B) any company other than an insured savings association, or any subsidiary of any insured savings association, 80 percent or more of the shares of which are controlled by such holding company, if the conditions of paragraph (2) are met. “(2) Conditions for exchange of security for qualified note.—The conditions of this paragraph are met if— “(A) the insured savings association was in compliance with applicable capital requirements on December 31, 1988, and the insured savings association after such date— “(i) remains in compliance with applicable capital requirements; or “(ii) adopts and complies with a capital plan acceptable to the Director of the Office of Thrift Supervision; “(B) the company to which the corporate debt security not of investment grade is transferred is not a bank holding company, an insured savings association, or a direct or indirect subsidiary of such holding company or insured savings association; “(C) before the end of the 90-day period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, the insured savings association notifies the Director of the Office of Thrift Supervision of such association’s intention to transfer the corporate debt security not of investment grade to the savings and loan holding company or the subsidiary of such holding company; “(D) the transfer of the corporate debt security not of investment grade is completed— “(i) before the end of the 1-year period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, in the case of an insured savings association that, as of such date, is controlled by a savings and loan holding company; or “(ii) before the end of the 2-year period beginning on such date, in the case of a savings association that is not, as of such date, a subsidiary of a savings and loan holding company; “(E) the insured savings association receives in exchange for the corporate debt security not of investment grade the fair market value of such security; “(F) the Director of the Office of Thrift Supervision has— “(i) approved the transaction; and 103 STAT. 272 “(ii) determined that the transfer represents a complete and effective divestiture of the corporate debt security not of investment grade and is in compliance with the provisions of this subsection; and “(G) any gain on the sale of the corporate debt security not of investment grade is recognized, and included for applicable regulatory capital requirements, by the insured savings association only at such time and to the extent that the insured savings association receives payment of principal on the note in cash in excess of the fair market value of the transferred corporate debt security not of investment grade as carried on the accounts of the insured savings association immediately prior to the transfer. “(3) Qualified note defined.—The term ‘qualified note’ means any note that— “(A) is at all times fully secured by the corporate debt security not of investment grade transferred in exchange for the note, or by other collateral of at least equivalent value that is acceptable to the Director of the Office of Thrift Supervision; “(B) contains provisions acceptable to the Director of the Office of Thrift Supervision that would— “(i) prevent any action to encumber or impair the value of the collateral referred to in subparagraph (A); and “(ii) allow the sale of the corporate debt security not of investment grade if the proceeds of the sale are reinvested in assets of equivalent value; “(C) is on market terms, including interest rate, which must in all cases be above the insured savings association’s borrowing rate for similar term funds; “(D) is fully repayable over a period of time not to exceed 5 years from the date of transfer; “(E) is repaid with annual principal payments at least as large as would be necessary to repay the note within 5 years if it were on a level payment amortization schedule and the interest rate for the first year of repayment were fixed throughout the amortization period; “(F) is fully guaranteed by each holding company of the insured savings association that acquires such note; and “(G) is repaid in full in cash in accordance with its terms and this subsection. “(4) Failure to repay on schedule.—The exemption provided by this subsection from subsections (a), (b), and (c) of section 11 of the Home Owners’ Loan Act any other applicable provision of Federal or State law shall terminate immediately if the insured savings association or any affiliate of such association fails to comply with the terms of the qualified note or this subsection. “(f) Determinations.—The Corporation shall make determinations under this section by regulation or order. “(g) Activity Defined.—For purposes of subsections (a) and (b)— “(1) In general.—The term ‘activity’ includes acquiring or retaining any investment. “(2) Divestiture of certain assets.—Notwithstanding paragraph (1), subsections (a) and (b) shall not be construed to require a savings association to divest itself of any assets ac-103 STAT. 273quired before the date of enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. “(h) Disclosures by Uninsured Savings Associations.— “(1) In general.—Any savings association the deposits of which are not insured by the Corporation under this Act shall disclose clearly and conspicuously in periodic statements of account and in all advertising that the savings association’s deposits are ‘not federally insured’. “(2) Manner and content.—The Corporation may, by regulation or order, prescribe the manner and content of the disclosure. “(3) Enforcement.—Compliance with the requirements of this subsection, and any regulation prescribed or order issued under this subsection, shall be enforced under section 8 in the same manner and to the same extent as if the savings association were an insured State nonmember bank. “(i) Other Authority Not Affected.—This section may not be construed as limiting— “(1) any other authority of the Corporation; or “(2) any authority of the Director of the Office of Thrift Supervision or of a State to impose more stringent restrictions.”. SEC 223. NONDISCRIMINATION. Section 22 of the Federal Deposit Insurance Act (12 U.S.C. 1830) is amended to read as follows: “SEC. 22. NONDISCRIMINATION. “It is not the purpose of this Act to discriminate in any manner against State nonmember banks or State savings associations and in favor of national or member banks or Federal savings associations, respectively. It is the purpose of this Act to provide all banks and savings associations with the same opportunity to obtain and enjoy the benefits of this Act.”.