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United States · Bill · HR

H.R. 6 (102nd)

Financial Institutions Safety and Consumer Choice Act of 1991

openUnited States· United States Congress· EN

Introduced

3 January 1991

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Status

See S. 543 for further action.

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7 February 2024

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Summary

Deposit Insurance and Regulatory Reform Act of 1991 - Title I: Purposes - Sets forth purposes of this Act. Title II: Strengthening Deposit Insurance Funds - Amends the Federal Deposit Insurance Act to provide that the assessment base for any insured depository institution shall include foreign as well as domestic deposits (and any obligations which would constitute deposits), except those deposited in a foreign branch of a foreign bank. Authorizes the Federal Deposit Insurance Corporation (FDIC) to set annual assessment rates on foreign deposits independently of any other assessment rates. Directs the FDIC to: (1) establish assessment categories for insurance fund members based upon types and degree of risk posed by the activities of such members; and (2) establish separate rates for such categories. Revises deposit insurance application and approval procedures. Provides that an insured bank which is a member of the Federal Reserve System or an insured State bank which is converted into a national member bank shall continue as an insured bank. Mandates that a credit union representative be seated on the FDIC Board of Directors. Requires such Board to conduct annual reserve-to-asset ratio reviews. Limits FDIC waivers of the prohibitions on brokered deposits to 60 days per waiver (and no more than one waiver in any six-month period). Title III: Improved Capital and Accounting Requirements - Requires that the accounting principles applicable to insured depository institutions be uniform and consistent with generally accepted accounting principles. Authorizes the Federal Depository Institutions Regulatory Agency (FDIRA) (established by this Act) or the FDIC to prescribe accounting principles if either agency determines that the application of any generally accepted accounting principle is inconsistent with the objectives of this Act. Requires the FDIRA to: (1) review and modify, if appropriate, accounting procedures used by insured depository institutions; (2) prescribe regulations which require all assets and liabilities of insured depository institutions to be included in financial statements; (3) prescribe regulations which require all assets and liabilities to be accounted for, if appropriate, at fair market value; and (4) establish uniform requirements for independent audits of insured depository institutions. Mandates an annual on-site examination of each insured depository institution by either the FDIRA, the FDIC, or the appropriate State banking supervisor. Requires the FDIRA and the FDIC each to establish a comparable examination improvement program. Requires independent annual audits of insured depository institutions and institutions applying for insurance (including annual reports on assertions in reports of management responsibilities). Title IV: Deposit Insurance Reform - Requires the FDIC to prescribe regulations limiting deposit insurance of any one person in all insured depository institutions at any one time to $100,000. Exempts certain retirement accounts from this limitation. Requires the FDIC to present to the Congress a detailed implementation report, and to complete final regulations by a specified deadline. Prohibits the FDIC from determining insurance coverage on a pro rata or pass-through basis. Prescribes guidelines under which the FDIC must satisfy obligations to insured depositors at the least cost to the affected deposit insurance fund. Directs the Comptroller General to annually audit FDIC compliance with such guidelines. Revises the procedure for determining claims against a depository institution in receivership. Provides that if a secured creditor's claim against a depository institution in receivership exceeds the market value of the collateral, the receiver may treat the portion which exceeds the market value as an unsecured claim against the institution. Requires that each insured depository institution submit to the FDIC on a regular basis an accurate accounting of the total amount of all insured deposits, preferred deposits, and uninsured deposits. Title V: Early Intervention and Provisions Relating to Conservators and Receivers - Prohibits an insured depository institution from making any capital distribution if that would result in its undercapitalization. Requires the FDIRA and the FDIC to monitor closely the condition of any undercapitalized insured depository institution, and the capital restoration plans and restrictions to which the institution is subject. Sets forth general guidelines for capital restoration plans. Prescribes actions to be taken, including conservatorship or receivership, with respect to undercapitalized institutions that fail to submit or implement a plan. Title VI: Source of Strength - Makes affiliates of an insured depository institution liable to the FDIC for losses incurred by an insurance fund, or for losses which the FDIC reasonably anticipates will be incurred by an insurance fund in default related assistance. Title VII: Limitations on Risky Activities - Authorizes the FDIC, by regulation, to restrict any activity of an insured depository institution that poses a significant risk to any insurance fund. (Currently only savings associations are subject to such restrictions.) Precludes an insured State bank from engaging as principal in any activity that is impermissible for a national bank if the FDIRA has determined that its proposed conduct would be inconsistent with this Act. Places parallel restrictions upon the activities of subsidiaries of insured State banks, State credit unions, and upon equity investments by State depository institutions and credit unions. Prohibits a depository institution from acquiring or retaining any corporate debt security that is not investment grade. Directs the FDIC to require depository institutions and credit unions to divest themselves of equity investments or debt securities which are impermissible for a national bank or are not of investment grade. Title VIII -(Reserved) Title IX - (Reserved) Title X: Single Regulatory Agency - Subtitle A: Federal Depository Institutions Regulatory Agency - Establishes the Federal Depository Institutions Regulatory Agency as an independent establishment in the executive branch. Vests management of the Agency in a Board of Directors appointed by the President with the advice and consent of the Senate. Prohibits Board members from serving in offices of other depository institutions. Transfers to the FDIRA: (1) all functions of the Comptroller of the Currency relating to national banks; (2) all functions of the Board of Governors of the Federal Reserve System relating to Federal Reserve System banks, bank holding companies, their subsidiaries and affiliates; (3) all functions of the Director of the Office of Thrift Supervision relating to savings associations and savings and loan holding companies (including their subsidiaries and affiliates); (4) all functions of the National Credit Union Administration; and (5) all functions of the FDIC relating to regulation of State nonmember banks. Establishes within the FDIRA the "consumer division" to conduct separate on-site examinations of each insured depository institution, in conjunction with regular on-site examination, to determine the extent to which the institution complies with consumer protection regulations and community reinvestment laws. Lists additional responsibilities. Requires the Board of Directors of the FDIRA, the Board of Directors of the FDIC, the Board of Governors of the Federal Reserve System, and the Federal Housing Finance Board to meet: (1) at least once each calendar quarter to discuss the condition of the financial service industry and economic trends; and (2) on an emergency basis as needed. Subtitle B: Transfer of National Credit Union Share Insurance Fund to FDIC - Establishes the Credit Union Share Insurance Fund and transfers to it all assets and liabilities (including credit union deposits) of the National Credit Union Share Insurance Fund. Abolishes the latter. Provides that: (1) the Credit Union Share Insurance Fund shall be available to the FDIC for use with respect to the Fund members; (2) all amounts assessed against such members shall be deposited into the Fund; (3) any credit union which becomes an insured depository institution shall be a Fund member; and (4) each credit union member of the National Credit Union Share Insurance Fund is automatically, without application, an insured depository institution under the new Fund. Subtitle C: Abolition of Federal Banking Agencies - Abolishes: (1) the Office of the Comptroller of the Currency and the position of Comptroller of the Currency; (2) the Office of Thrift Supervision; (3) the National Credit Union Administration and its Board. Amends the Federal Reserve Act to require the approval of both the FDIC and the FDIRA for advances made to individual member banks by a Federal Reserve bank for deposit insurance fund purposes. Requires the FDIRA to submit periodic reports to the Congress on progress in the consolidation of the depository institution regulatory functions within the Agency, and the transition from a multiagency regulatory stucture to a single agency structure. Title XI: Consumer Provisions - Subtitle A: Truth in Savings - Truth in Savings Act - States that a depository institution may refer only to the annual percentage yield when it advertises or solicits accounts. Requires a depository institution to state the following information clearly and conspicuously: (1) the annual percentage yield and the period such yield is in effect; (2) all minimum initial deposit, minimum balance, and time requirements for earning such yield; (3) fees or other conditions that could reduce the yield; and (4) any interest penalty for early withdrawal. Authorizes the FDIRA to exempt advertisements, announcements, or solicitations made by any broadcast or electronic medium or outdoor advertising displays not on the premises of a depository institution from such disclosure requirements if disclosure would be unnecessarily burdensome. Prohibits any depository institution from advertising an account as a free or no-cost account if: (1) there are minimum balance or limited transaction requirements to avoid fees; or (2) there is any service fee, transaction fee, or similar charge imposed for such account. Prohibits any institution from making any advertisement, announcement, or solicitation that is inaccurate or misleading or that misrepresents its deposit contracts. Requires each depository institution to maintain a schedule, written in clear and plain language, of fees, charges, interest rates, and terms and conditions such as minimum balance and time requirements applicable to each class of accounts offered. Requires that such schedule be disclosed to potential customers and requesting individuals and mailed to account holders. Requires that account holders receive 30 days' advance notice of any change to be made in any term or condition required to be disclosed in the schedule if the change might reduce the yield or adversely affect any account holder. Directs the Agency to require modified disclosure requirements concerning the annual yield on variable rate accounts, multiple rate accounts, guaranteed-rate accounts that mature in less than one year, and accounts for which the interest rate is not guaranteed. Mandates that a depository institution clearly and conspicuously disclose on periodic statements to account holders: (1) the annual percentage yield; (2) the amount of interest earned; and (3) any fees or charges imposed. Sets forth payment of interest rules for depository institutions and credit unions. Directs the Board to provide for public notice and comment on, and to publish, model forms and clauses for common disclosures required by this Act. Provides for administrative enforcement of this Act and the civil liability of a depository institution that fails to comply with its requirements. Sets forth limitations on such liability and factors to be considered by the court in determining class action awards. Provides that an institution may not be held liable for a violation if the institution demonstrates that the violation was not intentional and resulted from a bona fide error. Establishes U.S. district court jurisdiction and a one-year statute of limitations for actions brought under this Act. Directs the FDIRA to provide for the similar regulation of credit unions. Subtitle B: Fair Lending Enforcement - Amends the Equal Credit Opportunity Act to require banking regulatory agencies to refer to the Attorney General any creditors appearing to violate such Act. Requires notice to the Secretary of Housing and Urban Development of alleged violations of the Fair Housing Act (but only if the matter is not referred to the Attorney General). Subtitle C: Access to Financial Services - Financial Services Access Act - Requires each depository institution to offer at least one basic financial services account with specified characteristics. Requires: (1) a depository institution which cashes checks for customers in the ordinary course of business to cash government checks under certain circumstances; (2) the FDIRA to prescribe regulations to establish a customer registration program in connection with the government check cashing services program; and (3) each depository institution to post a conspicuous notice in up to three languages informing the public in each location where deposits are accepted that basic financial services accounts and government check cashing services are available. Subtitle D: Notice of Branch Closures by Bank and Thrift Institutions - Bank and Thrift Branch Closure Act of 1991 - Requires any national or District bank which proposes to close any of its branches to provide written notice of such action to the FDIRA and to its customers in accordance with specified guidelines. Amends the Home Owners' Loan Act to require any Federal savings association which proposes to close any of its branches to provide written notice of such action to the FDIRA and to its customers in accordance with specified guidelines. Subtitle E: Community Reinvestment Act Examination Requirements - Amends the Community Reinvestment Act of 1977 to require the FDIRA to publish in a newspaper of general circulation in the community in which an insured depository institution is located that: (1) such institution is under routine examination for its record in meeting the low- and moderate-income credit needs of the community; and (2) public comment is solicited regarding such record. Requires that the public portion of the FDIRA's written evaluation of such institution be made available at all its offices and branches and at all public depositories in each community in the institution's service area. Requires each FDIRA regional office to maintain a public file containing the two most recent evaluations of each insured depository institution in the region.

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