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8000 - Miscellaneous Statutes and Regulations


FEDERAL DEPOSIT INSURANCE
CORPORATION IMPROVEMENT ACT OF 1991

AN ACT

To require the least-cost resolution of insured depository institutions, to improve supervision and examinations, to provide additional resources to the Bank Insurance Fund, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "Federal Deposit Insurance Corporation Improvement Act of 1991".

[Codified to 12 U.S.C. 1811 note]

[Source:  Section 1 of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2236), effective December 19, 1991]

TITLE I—SAFETY AND SOUNDNESS


Subtitle B--Supervisory Reforms

SEC. 111. IMPROVED EXAMINATIONS.

(c)  TRANSITION RULE.--Notwithstanding section 10(d) of the Federal Deposit Insurance Act (as added by subsection (a)), during the period beginning on the date of enactment of this Act and ending on December 31, 1993, a full-scope, on-site examination of an insured depository institution is not required more often than once during every 18-month period, unless--

(1)  the institution, when most recently examined, was found to be in a less than satisfactory condition; or

(2)  1 or more persons acquired control of the institution.

[Codified to 12 U.S.C. 1820 note]

[Source:  Section 111(c) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2241), effective December 19, 1991]

(d)  EXAMINATION IMPROVEMENT PROGRAM.--

(1)  IN GENERAL.--The appropriate Federal banking agencies, acting through the Federal Financial Institutions Examination Council, shall each establish a comparable examination improvement program that meets the requirements of paragraph (2).

(2)  REQUIREMENTS.--An examination improvement program meets the requirements of this paragraph if, under the program, the agency is required--

(A)  to periodically review the organization and training of the staff of the agency who are responsible for conducting examinations of insured depository institutions and to make such improvements as the agency determines to be appropriate to ensure frequent, objective, and thorough examinations of such institutions; and

(B)  to increase the number of examiners, supervisors, and other individuals employed by the agency in connection with conducting or supervising examinations of insured depository institutions to the extent necessary to ensure frequent, objective, and thorough examinations of such institutions.

[Codified to 12 U.S.C. 3305 note]


[Source:  Section 111(d) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2241), effective December 19, 1991]


Subtitle C--Accounting Reforms

SEC. 122. SMALL BUSINESS AND SMALL FARM LOAN INFORMATION.

(a)  IN GENERAL.--Before the end of the 180-day period beginning on the date of the enactment of this Act, the appropriate Federal banking agency shall prescribe regulations requiring insured depository institutions to annually submit information on small businesses and small farm lending in their reports of condition.

[Codified to 12 U.S.C. 1817 note]

[Source:  Section 122(a) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2251), effective December 19, 1991]

(b)  CREDIT AVAILABILITY.--The regulations prescribed under subsection (a) shall require insured depository institutions to submit such information as the agency may need to assess the availability of credit to small businesses and small farms.

[Codified to 12 U.S.C. 1817 note]

[Source:  Section 122(b) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2251), effective December 19, 1991]

(d)  CONTENTS.--The information required under subsection (a) may include information regarding the following:

(1)  The total number and aggregate dollar amount of commercial loans and commercial mortgage loans to small businesses.

(2)  Charge-offs, interest, and interest fee income on commercial loans and commercial mortgage loans to small businesses.

(3)  Agricultural loans to small farms.

[Codified to 12 U.S.C. 1817 note]

[Source:  Section 122(d) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2251), effective December 19, 1991]


Subtitle E--Least-Cost Resolution

SEC. 143. EARLY RESOLUTION.

(a)  IN GENERAL.--It is the sense of the Congress that the Federal banking agencies should facilitate early resolution of troubled insured depository institutions whenever feasible if early resolution would have the least possible long-term cost to the deposit insurance fund, consistent with the least-cost and prompt corrective action provisions of the Federal Deposit Insurance Act.

[Codified to 12 U.S.C. 1823 note]

[Source:  Section 143(a) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2281), effective December 19, 1991]


(b)  GENERAL PRINCIPLES.--In encouraging the Federal banking agencies to pursue early resolution strategies, the Congress contemplates that any resolution transaction under section 13(c) of that Act would observe the following general principles:

(1)  COMPETITIVE NEGOTIATION.--The transaction should be negotiated competitively, taking into account the value of expediting the process.

(2)  RESULTING INSTITUTION ADEQUATELY CAPITALIZED.--Any insured depository institution created or assisted in the transaction (hereafter the "resulting institution") and any institution acquiring the troubled institution should meet all applicable minimum capital standards.

(3)  SUBSTANTIAL PRIVATE INVESTMENT.--The transaction should involve substantial private investment.

(4)  CONCESSIONS.--Preexisting owners and debtholders of any troubled institution or its holding company should make substantial concessions.

(5)  QUALIFIED MANAGEMENT.--Directors and senior management of the resulting institution should be qualified to perform their duties, and should not include individuals substantially responsible for the troubled institution's problems.

(6)  FDIC'S PARTICIPATION.--The transaction should give the Federal Deposit Insurance Corporation an opportunity to participate in the success of the resulting institution.

(7)  STRUCTURE OF TRANSACTION.--The transaction should, insofar as practical, be structured so that--

(A)  the Federal Deposit Insurance Corporation--

(i)  does not acquire a significant proportion of the troubled institution's problem assets;

(ii)  succeeds to the interests of the troubled institution's preexisting owners and debtholders in proportion to the assistance the Corporation provides; and

(iii)  limits the Corporation's assistance in term and amount; and

(B)  new investors share risk with the Corporation.

[Codified to 12 U.S.C. 1823 note]

[Source:  Section 143(b) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2281), effective December 19, 1991]

(c)  REPORT.--Two years after the date of enactment of this Act, the Federal Deposit Insurance Corporation shall submit a report to Congress analyzing the effect of early resolution on the deposit insurance funds.

[Codified to 12 U.S.C. 1823 note]

[Source:  Section 143(c) of title I of the Act of December 19, 1991 (Pub. L. No. 102--242; 105 Stat. 2282), effective December 19, 1991]


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