REVISION OF PROCEDURES FOR TERMINATION OF FDIC DEPOSIT INSURANCE.

SEC. 926. REVISION OF PROCEDURES FOR TERMINATION OF FDIC DEPOSIT INSURANCE. Section 8(a) of the Federal Deposit Insurance Act (12 U.S.C. 1818(a)) is amended— 103 STAT. 489 (1) by striking out “(a) Any insured bank” and all that follows through the period at the end of the 4th sentence and inserting in lieu thereof the following: “(a) Termination of Insurance.— “(1) Voluntary termination.—Any insured depository institution which is not— “(A) a national member bank; “(B) a State member bank; “(C) a Federal branch; “(D) a Federal savings association; or “(E) an insured branch which is required to be insured under subsection (a) or (b) of section 6 of the International Banking Act of 1978, may terminate such depository institution’s status as an insured depository institution if such insured institution provides written notice to the Corporation of the institution’s intent to terminate such status not less than 90 days before the effective date of such termination. “(2) Involuntary termination.— “(A) Notice to primary regulator.—If the Board of Directors determines that— “(i) an insured depository institution or the directors or trustees of an insured depository institution have engaged or are engaging in unsafe or unsound practices in conducting the business of the depository institution; “(ii) an insured depository institution is in an unsafe or unsound condition to continue operations as an insured institution; or “(iii) an insured depository institution or the directors or trustees of the insured institution have violated any applicable law, regulation, order, condition imposed in writing by the Corporation in connection with the approval of any application or other request by the insured depository institution, or written agreement entered into between the insured depository institution and the Corporation, the Board of Directors shall notify the appropriate Federal banking agency with respect to such institution (if other than the Corporation) or the State banking supervisor of such institution (if the Corporation is the appropriate Federal banking agency) of the Board’s determination and the facts and circumstances on which such determination is based for the purpose of securing the correction of such practice, condition, or violation. Such notice shall be given to the appropriate Federal banking agency not less than 30 days before the notice required by subparagraph (B), except that this period for notice to the appropriate Federal banking agency may be reduced or eliminated with the agreement of such agency. “(B) Notice of intention to terminate insurance.—If, after giving the notice required under subparagraph (A) with respect to an insured depository institution, the Board of Directors determines that any unsafe or unsound practice or condition or any violation specified in such notice requires the termination of the insured status of the insured depository institution, the Board shall— 103 STAT. 490 “(i) serve written notice to the insured depository institution of the Board’s intention to terminate the insured status of the institution; “(ii) provide the insured depository institution with a statement of the charges on the basis of which the determination to terminate such institution’s insured status was made (or a copy of the notice under subparagraph (A)); and “(iii) notify the insured depository institution of the date (not less than 30 days after notice under this subparagraph) and place for a hearing before the Board of Directors (or any person designated by the Board) with respect to the termination of the institution’s insured status. “(3) Hearing; termination.—If, on the basis of the evidence presented at a hearing before the Board of Directors (or any person designated by the Board for such purpose), in which all issues shall be determined on the record pursuant to section 554 of title 5, United States Code, and the written findings of the Board of Directors (or such person) with respect to such evidence (which shall be conclusive), the Board of Directors finds that any unsafe or unsound practice or condition or any violation specified in the notice to an insured depository institution under subparagraph (B) has been established, the Board of Directors may issue an order terminating the insured status of such depository institution effective as of a date subsequent to such finding.”; (2) by striking out “Unless the” and inserting in lieu thereof the following: “(4) Appearance; consent to termination.—Unless the”; (3) by striking out “Any insured” and all that follows through “status” the 1st place such term appears and inserting in lieu thereof the following: “(5) Judicial review.—Any insured depository institution whose insured status”; (4) by striking out “The Corporation may publish” and inserting in lieu thereof the following: “(6) Publication of notice of termination.—The Corporation may publish”; (5) by striking out “After the termination of the insured status” and inserting in lieu thereof the following: “(7) Temporary insurance of deposits insured as of termination.—After the termination of the insured status”; (6) in paragraph (7) (as so designated by the amendment made by paragraph (5) of this section)— (A) by striking out “of two years” the 1st place such term appears and inserting in lieu thereof “of at least 6 months or up to 2 years, within the discretion of the Board of Directors”; (B) by striking out “of two years” the 2nd place such term appears and inserting in lieu thereof “the period referred to in the 1st sentence”; and (C) by striking out “of two years” the 3rd place such term appears; (7) by adding at the end the following new paragraphs: “(8) Temporary suspension of insurance.— 103 STAT. 491 “(A) In general.—If the Board of Directors initiates a termination proceeding under paragraph (2), and the Board of Directors, after consultation with the appropriate Federal banking agency, finds that an insured depository institution (other than a savings association to which subparagraph (B) applies) has no tangible capital under the capital guidelines or regulations of the appropriate Federal banking agency, the Corporation may issue a temporary order suspending deposit insurance on all deposits received by the institution. “(B) Special rule for certain savings institutions.— “(i) Certain goodwill included in tangible capital.—In determining the tangible capital of a savings association for purposes of this paragraph, the Board of Directors shall include goodwill to the extent it is considered a component of capital under section 5(t) of the Home Owners’ Loan Act. Any savings association which would be subject to a suspension order under subparagraph (A) but for the operation of this subparagraph, shall be considered by the Corporation to be a special supervisory association’. “(ii) Suspension order.—The Corporation may issue a temporary order suspending deposit insurance on all deposits received by a special supervisory association whenever the Board of Directors determines that— “(I) the capital of such association, as computed utilizing applicable accounting standards, has suffered a material decline; “(II) that such association (or its directors or officers) is engaging in an unsafe or unsound practice in conducting the business of the association; “(III) that such association is in an unsafe or unsound condition to continue operating as an insured association; or “(IV) that such association (or its directors or officers) has violated any applicable law, rule, regulation, or order, or any condition imposed in writing by a Federal banking agency, or any written agreement including a capital improvement plan entered into with any Federal banking agency, or that the association has failed to enter into a capital improvement plan which is acceptable to the Corporation within the time period set forth in section 5(t) of the Home Owners’ Loan Act. Nothing in this paragraph limits the right of the Corporation or the Director of the Office of Thrift Supervision to enforce a contractual provision which authorizes the Corporation or the Director of the Office of Thrift Supervision, as a successor to the Federal Savings and Loan Insurance Corporation or the Federal Home Loan Bank Board, to require a savings association to write down or amortize goodwill at a faster rate than otherwise required under this Act or under applicable accounting standards. “(C) Effective period of temporary order—Any order issued under subparagraph (A) shall become effective not earlier than 10 days from the date of service upon the 103 STAT. 492institution and, unless set aside, limited, or suspended by a court in proceedings authorized hereunder, such temporary order shall remain effective and enforceable until an order of the Board under paragraph (3) becomes final or until the Corporation dismisses the proceedings under paragraph (3). “(D) Judicial review.—Before the close of the 10-day period beginning on the date any temporary order has been served upon an insured depository institution under subparagraph (A), such institution may apply to the United States District Court for the District of Columbia, or the United States district court for the judicial district in which the home office of the institution is located, for an injunction setting aside, limiting, or suspending the enforcement, operation, or effectiveness of such order, and such court shall have jurisdiction to issue such injunction. “(E) Continuation of insurance for prior deposits.—The insured deposits of each depositor in such depository institution on the effective date of the order issued under this paragraph, minus all subsequent withdrawals from any deposits of such depositor, shall continue to be insured, subject to the administrative proceedings as provided in this Act. “(F) Publication of order.—The depository institution shall give notice of such order to each of its depositors in such manner and at such times as the Board of Directors may find to be necessary and may order for the protection of depositors. “(G) Notice by corporation.—If the Corporation determines that the depository institution has not substantially complied with the notice to depositors required by the Board of Directors, the Corporation may provide such notice in such manner as the Board of Directors may find to be necessary and appropriate. “(H) Lack of notice.—Notwithstanding subparagraph (A), any deposit made after the effective date of a suspension order issued under this paragraph shall remain insured to the extent that the depositor establishes that— “(i) such deposit consists of additions made by automatic deposit the depositor was unable to prevent; or “(ii) such depositor did not have actual knowledge of the suspension of insurance. “(9) Final decisions to terminate insurance.—Any decision by the Board of Directors to— “(A) issue a temporary order terminating deposit insurance; or “(B) issue a final order terminating deposit insurance (other than under subsection (p) or (q)); shall be made by the Board of Directors and may not be delegated. “(10) Low- to moderate-income housing lender.—In making any determination regarding the termination of insurance of a solvent savings association, the Corporation may consider the extent of the association’s low- to moderate-income housing loans.”.