MERGERS AND ACQUISITIONS OF INSURED DEPOSITORY INSTITUTIONS DURING CONVERSION MORATORIUM.

SEC. 501. MERGERS AND ACQUISITIONS OF INSURED DEPOSITORY INSTITUTIONS DURING CONVERSION MORATORIUM. (a) In General.— Section 5(d)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1815(d)(3)) is amended to read as follows: “(3) Optional conversions subject to special rules on deposit insurance payments.— “(A) Conversions allowed.— “(i) In general.— Notwithstanding paragraph (2)(A) and subject to the requirements of this paragraph, any insured depository institution may participate in a transaction described in clause (ii), (iii), or (iv) of paragraph (2)(B) with the prior written approval of the responsible agency under section 18(c)(2). “(ii) Holding company subsidiaries.— If, in connection with any transaction referred to in clause (i), the acquiring, assuming, or resulting depository institution is a Bank Insurance Fund member which is a subsidiary of a bank holding company, the prior written approval of the Board shall be required for such transaction in addition to the approval of any agency referred to in clause (i). “(B) Assessments on deposits attributable to former depository institution.— “(i) Assessments by saif.— In the case of any acquiring, assuming, or resulting depository institution which is a Bank Insurance Fund member, that portion of the average assessment base of such member for any semiannual period which is equal to the adjusted attributable deposit amount (determined under subparagraph (C) with respect to the transaction) shall— 105 STAT. 2389 “(I) be subject to assessment at the assessment rate applicable under section 7 for Savings Association Insurance Fund members; “(II) not be taken into account for purposes of any assessment under section 7 for Bank Insurance Fund members; and “(III) be treated as deposits which are insured by the Savings Association Insurance Fund. “(ii) Assessments by bif.— In the case of any acquiring, assuming, or resulting depository institution which is a Savings Association Insurance Fund member, that portion of the average assessment base of such member for any semiannual period which is equal to the adjusted attributable deposit amount (determined under subparagraph (C) with respect to the transaction) shall— “(I) be subject to assessment at the assessment rate applicable under section 7 for Bank Insurance Fund members; “(II) not be taken into account for purposes of any assessment under section 7 for Savings Association Insurance Fund members; and “(III) be treated as deposits which are insured by the Bank Insurance Fund. “(C) Determination of adjusted attributable deposit amount.— The adjusted attributable deposit amount which shall be taken into account for purposes of determining the amount of the assessment under subparagraph (B) for any semiannual period by any acquiring, assuming, or resulting depository institution in connection with a transaction under subparagraph (A) is the amount which is equal to the sum of— “(i) the amount of any deposits acquired by the institution in connection with the transaction (as determined at the time of such transaction); “(ii) the total of the amounts determined under clause (iii) for semiannual periods preceding the semi-annual 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 annual rate of growth of deposits of the acquiring, assuming, or resulting depository institution minus the amount of any deposits acquired through the acquisition, in whole or in part, of another insured depository institution. “(D) Deposit of assessment.— That portion of any assessment under section 7 which— “(i) is determined in accordance with subparagraph (B)(i) shall be deposited in the Savings Association Insurance Fund; and “(ii) is determined in accordance with subparagraph (B)(ii) shall be deposited in the Bank Insurance Fund. “(E) Conditions for approval, generally.— 105 STAT. 2390 “(i) Factors to be considered; approval process.— In reviewing any application for a proposed transaction under subparagraph (A), the responsible agency (and, in the event the acquiring, assuming, or resulting depository institution is a Bank Insurance Fund member which is a subsidiary of a bank holding company, the Board) shall follow the procedures and consider the factors set forth in section 18(c). “(ii) Information required.— An application to engage in any transaction under this paragraph shall contain such information relating to the factors to be considered for approval as the responsible agency or Board may require, by regulation or by specific request, in connection with any particular application. “(iii) No transfer of deposit insurance permitted.— This paragraph shall not be construed as authorizing transactions which result in the transfer of any insured depository institution’s Federal deposit insurance from 1 Federal deposit insurance fund to the other Federal deposit insurance fund. “(iv) Minimum capital.— The responsible agency, and the appropriate Federal banking agency for any depository institution holding company, shall disapprove any application for any transaction under this paragraph unless each such agency determines that the acquiring, assuming, or resulting depository institution, and any depository institution holding company which controls such institution, will meet all applicable capital requirements upon consummation of the transaction. “(F) Certain interstate transactions.— The Board may not approve any transaction under subparagraph (A) in which the acquiring, assuming, or resulting depository institution is a Bank Insurance Fund member which is a subsidiary of a bank holding company unless the Board determines that 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 Insurance Fund member involved in such transaction was a State bank that the bank holding company was applying to acquire. “(G) Expedited approval of acquisitions.— “(i) In general.— Any application by a State nonmember insured bank to acquire another insured depository institution that is required to be filed with the Corporation by subparagraph (A) or any other applicable law or regulation shall be approved or disapproved in writing by the Corporation before the end of the 60-day period beginning on the date such application is filed with the Corporation. “(ii) Extensions of period.— The period for approval or disapproval referred to in clause (i) may be extended for an additional 30-day period if the Corporation determines that— “(I) an applicant has not furnished all of the information required to be submitted; or 105 STAT. 2391 “(II) in the Corporation’s judgment, any material information submitted is substantially inaccurate or incomplete. “(H) Allocation of costs in event of default.— If any acquiring, assuming, or resulting depository institution 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 acquiring, assuming, or resulting depository institution assessed by the Bank Insurance Fund and the Savings Association Insurance Fund, respectively, under subparagraph (B). “(I) 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 any acquiring, assuming, or resulting depository institution to treat the transaction described in subparagraph (A) as a conversion transaction; and “(ii) the acquiring, assuming, or resulting depository institution pays the amount of any exit and entrance fee assessed by the Corporation under subparagraph (E) of paragraph (2) with respect to such transaction. “(J) Acquiring, assuming, or resulting depository institution defined.— For purposes of this paragraph, the term ‘acquiring, assuming, or resulting depository institution’ means any insured depository institution which— “(i) results from any transaction described in paragraph (2)(B)(ii) and approved under this paragraph; “(ii) in connection with a transaction described in paragraph (2)(B)(iii) and approved under this paragraph, assumes any liability to pay deposits of another insured depository institution; or “(iii) in connection with a transaction described in paragraph (2)(B)(iv) and approved under this paragraph, acquires assets from any insured depository institution in consideration of the assumption of liability for any deposits of such institution.”. (b) Effective Date.— The amendment made by subsection (a) to section 5(d)(3)(C) of the Federal Deposit Insurance Act shall apply with respect to semiannual periods beginning after the date of the enactment of this Act. (c) Transition Rule for Savings Associations Acquiring Banks.— Section 5(c) of the Home Owners’ Loan Act (12 U.S.C. 1464(c)) is amended— (1) by redesignating paragraph (5) as paragraph (6); and (2) by inserting after paragraph (4) the following new paragraph: “(5) Transition rule for savings associations acquiring banks.— “(A) In general.— If, under section 5(d)(3) of the Federal Deposit Insurance Act, a savings association acquires all or substantially all of the assets of a bank that is a member of the Bank Insurance Fund, the Director may permit the 105 STAT. 2392savings association to retain any such asset during the 2-year period beginning on the date of the acquisition. “(B) Extension.— The Director may extend the 2-year period described in subparagraph (A) for not more than 1 year at a time and not more than 2 years in the aggregate, if the Director determines that the extension is consistent with the purposes of this Act.”.