FINANCING CORPORATION FUNDING.

SEC. 2703. FINANCING CORPORATION FUNDING. (a) In General.— Section 21 of the Federal Home Loan Bank Act (12 U.S.C. 1441) is amended— (1) in subsection (f)(2)— (A) in the matter immediately preceding subparagraph (A)— (i) by striking “To the extent the amounts available pursuant to paragraph (1) are insufficient to cover the amount of interest payments, issuance costs, and custodial fees,” and inserting “In addition to the amounts obtained pursuant to paragraph (1),”; (ii) by striking “Savings Association Insurance Fund member” and inserting “insured depository institution”; and (iii) by striking “members” and inserting “institutions”; and (B) by striking “, except that—” and all that follows through the end of the paragraph and inserting “, except that— “(A) the assessments imposed on insured depository institutions with respect to any BIF-assessable deposit shall be assessed at a rate equal to 14 of the rate of the assessments imposed on insured depository institutions with respect to any SAIF-assessable deposit; and “(B) no limitation under clause (i) or (iii) of section 7(b)(2)(A) of the Federal Deposit Insurance Act shall apply for purposes of this paragraph.”; and (2) in subsection (k)— (A) by striking “section—” and inserting “section, the following definitions shall apply:”; (B) by striking paragraph (1); (C) by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively; and (D) by adding at the end the following new paragraphs: “(3) Insured depository institution.— The term ‘insured depository institution’ has the same meaning as in section 3 of the Federal Deposit Insurance Act “(4) Deposit terms.— “(A) BIF-assessable deposits.— The term ‘BIF-assessable deposit’ means a deposit that is subject to assessment for purposes of the Bank Insurance Fund under the Federal Deposit Insurance Act (including a deposit that is treated as a deposit insured by the Bank Insurance Fund under section 5(d)(3) of the Federal Deposit Insurance Act). “(B) SAIF-assessable deposit.— The term ‘SAIF-assessable deposit’ has the meaning given to such term in section 2710 of the Deposit Insurance Funds Act of 1996”. (b) Conforming Amendment.— Section 7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended by striking subparagraph (D). (c) Effective Date.— (1) In general.— Subsections (a) and (c) and the amendments made by such subsections shall apply with respect to semiannual periods which begin after December 31, 1996. (2) Termination of certain assessment rates.— Subparagraph (A) of section 21(f)(2) of the Federal Home Loan 110 STAT. 3009–486Bank Act (as amended by subsection (a)) shall not apply after the earlier of— (A) December 31, 1999; or (B) the date as of which the last savings association ceases to exist. (d) Prohibition on Deposit Shifting.— (1) In general.— Effective as of the date of the enactment of this Act and ending on the date provided in subsection (c)(2) of this section, the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Board of Governors of the Federal Reserve System, and the Director of the Office of Thrift Supervision shall take appropriate actions, including enforcement actions, denial of applications, or imposition of entrance and exit fees as if such transactions qualified as conversion transactions pursuant to section 5(d) of the Federal Deposit Insurance Act, to prevent insured depository institutions and depository institution holding companies from facilitating or encouraging the shifting of deposits from SAIF-assessable deposits to BIF-assessable deposits (as defined in section 21(k) of the Federal Home Loan Bank Act) for the purpose of evading the assessments imposed on insured depository institutions with respect to SAIF-assessable deposits under section 7(b) of the Federal Deposit Insurance Act and section 21(f)(2) of the Federal Home Loan Bank Act. (2) Regulations.— The Board of Directors of the Federal Deposit Insurance Corporation may issue regulations, including regulations defining terms used in paragraph (1), to prevent the shifting of deposits described in such paragraph. (3) Rule of construction.— No provision of this subsection shall be construed as prohibiting conduct or activity of any insured depository institution which— (A) is undertaken in the ordinary course of business of such depository institution; and (B) is not directed towards the depositors of an insured depository institution affiliate (as defined in section 2(k) of the Bank Holding Company Act of 1956) of such depository institution.