RISK-BASED ASSESSMENTS.

SEC. 302. RISK-BASED ASSESSMENTS. (a) Risk-Based Assessment System.— Section 7(b) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)) is amended to read as follows: “(b) Assessments.— “(1) Risk-based assessment system.— “(A) Risk-based assessment system required.— The Board of Directors shall, by regulation, establish a risk-based assessment system for insured depository institutions. “(B) Private reinsurance authorized.— In carrying out this paragraph, the Corporation may— “(i) obtain private reinsurance covering not more than 10 percent of any loss the Corporation incurs with . respect to an insured depository institution; and “(ii) base that institution’s semiannual assessment (in whole or in part) on the cost of the reinsurance. “(C) Risk-based assessment system defined.— For purposes of this paragraph, the term ‘risk-based assessment system’ means a system for calculating a depository institution’s semiannual assessment based on— “(i) the probability that the deposit insurance fund will incur a loss with respect to the institution, taking into consideration the risks attributable to— “(I) different categories and concentrations of assets; “(II) different categories and concentrations of liabilities, both insured and uninsured, contingent and noncontingent; and 105 STAT. 2346 “(III) any other factors the Corporation determines are relevant to assessing such probability; “(ii) the likely amount of any such loss; and “(iii) the revenue needs of the deposit insurance fund. “(D) Separate assessment systems.— The Board of Directors may establish separate risk-based assessment systems for large and small members of each deposit insurance fund. “(2) Setting assessments.— “(A) Achieving and maintaining designated reserve ratio.— “(i) In general.— The Board of Directors shall set semiannual assessments for insured depository institutions— “(I) to maintain the reserve ratio of each deposit insurance fund at the designated reserve ratio; or “(II) if the reserve ratio is less than the designated reserve ratio, to increase the reserve ratio to the designated reserve ratio as provided in paragraph (3). “(ii) Factors to be considered.— In carrying out clause (i), the Board of Directors shall consider the deposit insurance fund’s— “(I) expected operating expenses, “(II) case resolution expenditures and income, “(III) the effect of assessments on members’ earnings and capital, and “(IV) any other factors that the Board of Directors may deem appropriate. “(iii) Minimum assessment.— The semiannual assessment for each member of a deposit insurance fund shall be not less than $1,000. “(iv) Designated reserve ratio defined.— The designated reserve ratio of each deposit insurance fund for each year shall be— “(I) 1.25 percent of estimated insured deposits; or “(II) a higher percentage of estimated insured deposits that the Board of Directors determines to be justified for that year by circumstances raising a significant risk of substantial future losses to the fund. “(B) Independent treatment of funds.— The Board of Directors shall— “(i) set semiannual assessments for members of each deposit insurance fund independently from semiannual assessments for members of any other deposit insurance fund; and “(ii) set the designated reserve ratio of each deposit insurance fund independently from the designated reserve ratio of any other deposit insurance fund. “(C) Notice of assessments.— The Corporation shall notify each insured depository institution of that institution’s semiannual assessment. “(D) Priority of financing corporation and funding corporation assessments.— Notwithstanding any other provision of this paragraph, amounts assessed by the Financing Corporation under section 21 of the Federal 105 STAT. 2347Home 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. “(E) Minimum assessments.— The Corporation shall design the risk-based assessment system for any deposit insurance fund so that, if the Corporation has borrowings outstanding under section 14 on behalf of that fund or the reserve ratio of that fund remains below the designated reserve ratio, the total amount raised by semiannual assessments on members of that fund shall be not less than the total amount that would have been raised if— “(i) section 7(b) as in effect on July 15, 1991 remained in effect; and “(ii) the assessment rate in effect on July 15, 1991 remained in effect. “(F) Transition rule for savings association insurance fund.— With respect to the Savings Association Insurance Fund, during the period beginning on the effective date of the amendments made by section 302(a) of the Federal Deposit Insurance Corporation Improvement Act of 1991 and ending on December 31, 1997— “(i) subparagraph (A)(i)(II) shall apply as if such subparagraph did not include ‘as provided in paragraph (3)’; and “(ii) subparagraph (E) shall be applied by substituting ‘if section 7(b) as in effect on July 15, 1991 remained in effect.’ for ‘if—’ and all that follows through clause (ii). “(G) Special rule until the insurance funds achieve the designated reserve ratio.— Until a deposit insurance fund achieves the designated reserve ratio, the Corporation may limit the maximum assessment on insured depository institutions under the risk-based assessment system authorized under paragraph (1) to not less than 10 basis points above the average assessment on insured depository institutions under that system. “(3) Special rule for recapitalizing undercapitalized funds.— “(A) In general.— Except as provided in paragraph (2)(F), if the reserve ratio of any deposit insurance fund is less than the designated reserve ratio under paragraph (2)(A)(iv), the Board of Directors shall set semiannual assessment rates for members of that fund— “(i) that are sufficient to increase the reserve ratio for that fund to the designated reserve ratio not later than 1 year after such rates are set; or “(ii) in accordance with a schedule promulgated by the Corporation under subparagraph (B). “(B) Recapitalization schedules.— For purposes of subparagraph (A)(ii), the Corporation shall by regulation promulgate a schedule that specifies, at semiannual intervals, target reserve ratios for that fund, culminating in a reserve ratio that is equal to the designated reserve ratio not later than 15 years after the date on which the schedule is implemented. 105 STAT. 2348 “(C) Amending schedule.— The Corporation may, by regulation, amend a schedule promulgated under subparagraph (B), but such amendments may not extend the date specified in subparagraph (B). “(D) Application to saif members.— This paragraph shall become applicable to Savings Association Insurance Fund members on January 1, 1998. “(4) Semiannual period defined.— 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) Records to be maintained.— Each insured depository institution shall maintain all records that the Corporation may require for verifying the correctness of the institution’s semi-annual assessments. No insured depository institution shall be required to retain those records for that purpose for a period of more than 5 years from the date of the filing of any certified statement, except that when there is a dispute between the insured depository institution and the Corporation over the amount of any assessment, the depository institution shall retain the records until final determination of the issue.”. (b) Certified Statements and Payment Procedures.— Section 7(c) of the Federal Deposit Insurance Act (12 U.S.C. 1817(c)) is amended to read as follows: “(c) Certified Statements; Payments.— “(1) Certified statements required.— “(A) In general.— Each insured depository institution shall file with the Corporation a certified statement containing such information as the Corporation may require for determining the institution’s semiannual assessment. “(B) Form of certification.— The certified statement required under subparagraph (A) shall— “(i) be in such form and set forth such supporting information as the Board of Directors shall prescribe; and “(ii) be certified by the president of the depository institution or any other officer designated by its board of directors or trustees that to the best of his or her knowledge and belief, the statement is true, correct and complete, and in accordance with this Act and regulations issued hereunder. “(2) Payments required.— “(A) In general.— Each insured depository institution shall pay to the Corporation the semiannual assessment imposed under subsection (b). “(B) Form of payment.— The payments required under subparagraph (A) shall be made in such manner and at such time or times as the Board of Directors shall prescribe by regulation. “(3) Newly insured institutions.— To facilitate the administration of this section, the Board of Directors may waive the requirements of paragraphs (1) and (2) for the semiannual period in which a depository institution becomes insured.”. (c) Regulations.— To implement the risk-based assessment system required under section 7(b) of the Federal Deposit Insurance 105 STAT. 2349Act (as amended by subsection (a)), the Federal Deposit Insurance Corporation shall— (1) provide notice of proposed regulations in the Federal Register, not later than December 31, 1992, with an opportunity for comment on the proposal of not less than 120 days; and (2) promulgate final regulations not later than July 1, 1993. (d) Authority To Prescribe Regulations and Definitions.— Section 10 of the Federal Deposit Insurance Act (12 U.S.C. 1820) is amended by adding at the end the following: “(f) Authority To Prescribe Regulations and Definitions.— Except to the extent that authority under this Act is conferred on any of the Federal banking agencies other than the Corporation, the Corporation may— “(1) prescribe regulations to carry out this Act; and “(2) by regulation define terms as necessary to carry out this Act.”. (e) Conforming Amendments.— The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended— (1) in section 5(d)(3)(B)— (A) by striking “average assessment base” and inserting “deposits”; and (B) by striking “shall—” and all that follows through “(iii) shall be treated” and inserting “shall be treated”; (2) in section 7(a)(5) by striking “and for the computation of assessments provided in subsection (b) of this section”, (3) in section 7 by amending subsection (d) to read as follows: “(d) Corporation Exempt From Apportionment.— Notwithstanding any other provision of law, amounts received pursuant to any assessment under this section and any other amounts received by the Corporation shall not be subject to apportionment for the purposes of chapter 15 of title 31, United States Code, or under any other authority.”; and (4) in the last sentence of section 8(q) by striking “upon” and inserting “with respect to”. (f) Transition to New Assessment System.— To carry out the amendments made by this section, the Corporation may promulgate regulations governing the transition from the assessment system in effect on the date of enactment of this Act to the assessment system required under the amendments made by this section. (g) Effective Date of Amendments.— The amendments made by this section shall become effective on the earlier of— (1) 180 days after the date on which final regulations promulgated in accordance with subsection (c) become effective; or (2) January 1, 1994.