REFUNDS, DIVIDENDS, AND CREDITS FROM DEPOSIT INSURANCE FUND.

SEC. 2107. REFUNDS, DIVIDENDS, AND CREDITS FROM DEPOSIT INSURANCE FUND.(a) In General.—Subsection (e) of section 7 of the Federal Deposit Insurance Act (12 U.S.C. 1817(e)) is amended to read as follows:“(e) Refunds, Dividends, and Credits.—“(1) Refunds of overpayments.—In the case of any payment of an assessment by an insured depository institution in excess of the amount due to the Corporation, the Corporation may—“(A) refund the amount of the excess payment to the insured depository institution; or“(B) credit such excess amount toward the payment of subsequent assessments until such credit is exhausted.“(2) Dividends from excess amounts in deposit insurance fund.—“(A) Reserve ratio in excess of 1.5 percent of estimated insured deposits.—If, at the end of a calendar year, the reserve ratio of the Deposit Insurance Fund exceeds 1.5 percent of estimated insured deposits, the Corporation shall declare the amount in the Fund in excess of the amount required to maintain the reserve ratio at 1.5 percent of estimated insured deposits, as dividends to be paid to insured depository institutions.“(B) Reserve ratio equal to or in excess of 1.35 percent of estimated insured deposits and not more than 1.5 percent.—If, at the end of a calendar year, the reserve ratio of the Deposit Insurance Fund equals or exceeds 1.35 percent of estimated insured deposits and is not more than 1.5 percent of such deposits, the Corporation shall declare the amount in the Fund that is equal to 50 percent of the amount in excess of the amount required to maintain the reserve ratio at 1.35 percent of the estimated insured deposits as dividends to be paid to insured depository institutions.“(C) Basis for distribution of dividends.—“(i) In general.—Solely for the purposes of dividend distribution under this paragraph, the Corporation shall determine each insured depository institution’s relative contribution to the Deposit Insurance Fund (or any predecessor deposit insurance fund) for calculating such institution’s share of any dividend declared under this paragraph, taking into account the factors described in clause (ii).“(ii) Factors for distribution.—In implementing this paragraph in accordance with regulations, the Corporation shall take into account the following factors:“(I) The ratio of the assessment base of an insured depository institution (including any predecessor) on December 31, 1996, to the assessment base of all eligible insured depository institutions on that date.120 STAT. 17“(II) The total amount of assessments paid on or after January 1, 1997, by an insured depository institution (including any predecessor) to the Deposit Insurance Fund (and any predecessor deposit insurance fund).“(III) That portion of assessments paid by an insured depository institution (including any predecessor) that reflects higher levels of risk assumed by such institution.“(IV) Such other factors as the Corporation may determine to be appropriate.“(D) Notice and opportunity for comment.—The Corporation shall prescribe by regulation, after notice and opportunity for comment, the method for the calculation, declaration, and payment of dividends under this paragraph.“(E) Limitation.—The Board of Directors may suspend or limit dividends paid under subparagraph (B), if the Board determines in writing that—“(i) a significant risk of losses to the Deposit Insurance Fund exists over the next 1-year period; and“(ii) it is likely that such losses will be sufficiently high as to justify a finding by the Board that the reserve ratio should temporarily be allowed—“(I) to grow without requiring dividends under subparagraph (B); or“(II) to exceed the maximum amount established under subsection (b)(3)(B)(i).“(F) Considerations.—In making a determination under subparagraph (E), the Board shall consider—“(i) national and regional conditions and their impact on insured depository institutions;“(ii) potential problems affecting insured depository institutions or a specific group or type of depository institution;“(iii) the degree to which the contingent liability of the Corporation for anticipated failures of insured institutions adequately addresses concerns over funding levels in the Deposit Insurance Fund; and“(iv) any other factors that the Board determines are appropriate.“(G) Review of determination.—“(i) Annual review.—A determination to suspend or limit dividends under subparagraph (E) shall be reviewed by the Board of Directors annually.“(ii) Action by board.—Based on each annual review under clause (i), the Board of Directors shall either renew or remove a determination to suspend or limit dividends under subparagraph (E), or shall make a new determination in accordance with this paragraph. Unless justified under the terms of the renewal or new determination, the Corporation shall be required to provide cash dividends under subparagraph (A) or (B), as appropriate.“(3) One-time credit based on total assessment base at year-end 1996.—120 STAT. 18“(A) In general.—Before the end of the 270-day period beginning on the date of the enactment of the Federal Deposit Insurance Reform Act of 2005, the Board of Directors shall, by regulation after notice and opportunity for comment, provide for a credit to each eligible insured depository institution (or a successor insured depository institution), based on the assessment base of the institution on December 31, 1996, as compared to the combined aggregate assessment base of all eligible insured depository institutions, taking into account such factors as the Board of Directors may determine to be appropriate.“(B) Credit limit.—The aggregate amount of credits available under subparagraph (A) to all eligible insured depository institutions shall equal the amount that the Corporation could collect if the Corporation imposed an assessment of 10.5 basis points on the combined assessment base of the Bank Insurance Fund and the Savings Association Insurance Fund as of December 31, 2001.“(C) Eligible insured depository institution defined.—For purposes of this paragraph, the term ‘eligible insured depository institution’ means any insured depository institution that—“(i) was in existence on December 31, 1996, and paid a deposit insurance assessment prior to that date; or“(ii) is a successor to any insured depository institution described in clause (i).“(D) Application of credits.—“(i) In general.—Subject to clause (ii), the amount of a credit to any eligible insured depository institution under this paragraph shall be applied by the Corporation, subject to subsection (b)(3)(E), to the assessments imposed on such institution under subsection (b) that become due for assessment periods beginning after the effective date of regulations prescribed under subparagraph (A).“(ii) Temporary restriction on use of credits.—The amount of a credit to any eligible insured depository institution under this paragraph may not be applied to more than 90 percent of the assessments imposed on such institution under subsection (b) that become due for assessment periods beginning in fiscal years 2008, 2009, and 2010.“(iii) Regulations.—The regulations prescribed under subparagraph (A) shall establish the qualifications and procedures governing the application of assessment credits pursuant to clause (i).“(E) Limitation on amount of credit for certain depository institutions.—In the case of an insured depository institution that exhibits financial, operational, or compliance weaknesses ranging from moderately severe to unsatisfactory, or is not adequately capitalized (as defined in section 38) at the beginning of an assessment period, the amount of any credit allowed under this paragraph against the assessment on that depository institution for such period may not exceed the amount calculated by applying to that depository institution the average 120 STAT. 19 assessment rate on all insured depository institutions for such assessment period.“(F) Successor defined.—The Corporation shall define the term ‘successor’ for purposes of this paragraph, by regulation, and may consider any factors as the Board may deem appropriate.“(4) Administrative review.—“(A) In general.—The regulations prescribed under paragraphs (2)(D) and (3) shall include provisions allowing an insured depository institution a reasonable opportunity to challenge administratively the amount of the credit or dividend determined under paragraph (2) or (3) for such institution.“(B) Administrative review.—Any review under subparagraph (A) of any determination of the Corporation under paragraph (2) or (3) shall be final and not subject to judicial review.”.(b) Definition of Reserve Ratio.—Section 3(y) of the Federal Deposit Insurance Act (12 U.S.C. 1813(y)) (as amended by section 2105(b) of this subtitle) is amended by adding at the end the following new paragraph:“(3) Reserve ratio.—The term ‘reserve ratio’, when used with regard to the Deposit Insurance Fund other than in connection with a reference to the designated reserve ratio, means the ratio of the net worth of the Deposit Insurance Fund to the value of the aggregate estimated insured deposits.”.