4000 - Advisory Opinions
"Sasser" Banks May Display Either Bank Sign or Savings Association Sign But Not Both
July 19, 1991
Valerie J. Best, Counsel
I am writing in response to your inquiry concerning a savings association that converts to a bank charter pursuant to 12 USC 1815(d)(2)(G) (the "Sasser Amendment"). You ask whether such an institution may display a bank (FDIC) sign.
The Sasser Amendment provides that, notwithstanding the moratorium on insurance fund conversion transactions imposed by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"), any savings association which is a Savings Association Insurance Fund ("SAIF") member may convert its charter to a bank charter if the resulting bank remains a SAIF member. 12 USC 1815(d)(2)(G). Absent the Sasser Amendment, a bank becomes a member of the Bank Insurance Fund ("BIF") as required by 12 USC 1817(l) (1), (2).
The Federal Deposit Insurance ("FDI") Act provides that each "insured bank" shall display one of the following: (i) the bank (FDIC) sign; (ii) the savings association (American Eagle) sign. 12 USC 1828(a)(2). The phrase "insured bank" is defined to mean any "bank" the deposits of which are insured in accordance with the provisions of the FDI Act. 12 USC 1813(h). The term "bank" is, in turn, specifically defined to include any former savings association that (i) has converted from a savings association charter; and (ii) is a SAIF member. 12 USC 1813(a).
Based on the statutory definitions outlined above, any former savings association that (i) has converted from a savings association charter to a bank charter, and (ii) is a SAIF-member, is a "bank" for purposes of applying 12 USC 1828(a) and, consequently, may display either the bank sign or the savings association sign.
Please be advised that FDIC regulations implementing 12 USC 1828(a) are set forth at 12 CFR Part 328. A former savings association that converts to a bank charter and retains its SAIF membership pursuant to the Sasser Amendment is subject to all of the requirements set forth in 12 CFR Part 328 that apply to banks. Not only must such an institution comply with section 328.2 (display of signs), but it must also comply with section 328.3 (official advertising statement must be displayed in advertising). You may also be interested to know that a bank may display either the bank sign or the savings association sign, but it may not display both. See 135 Cong. Rec. S4280-81 (daily ed. April 19, 1989) (statement of Sen. Roth).