Federal Deposit Insurance Improvements Act of 1985

Summary

Federal Deposit Insurance Improvements Act of 1985 - Amends the Federal Deposit Insurance Act to make technical revisions to definitions. Provides that deposits owed to a federally insured depository institution or owned or placed by a Federal agency shall not be eligible for insurance by the Federal Deposit Insurance Corporation (FDIC). Requires the FDIC, in deciding whether to decline to insure a national or State bank that becomes a member of the Federal Reserve System, to base its decision only on such bank's financial and managerial resources. Eliminates as insurance assessment base deductions specified percentages of a bank's adjusted demand deposits and adjusted time and savings deposits. Directs the FDIC to allocate annual assessment credits to insured banks on the basis of the risks each such bank may present to the Permanent Insurance Fund. Eliminates a requirement that the FDIC Board of Directors provide an insured institution and its supervisory authority up to 120 days to correct any violation of law or any unsound or unsafe practice or condition before terminating the bank's insured status. Declares that a temporary cease and desist order issued by the appropriate Federal banking agency may place limitations on the activities or functions of an insured bank or its directors, officers, employees, agents and other persons participating in bank affairs or may bar any such person from conducting bank affairs. Authorizes a Federal banking agency that has removed a person from office at one insured bank to prohibit such person from participating in the affairs of any insured bank without the agency's prior written approval. Authorizes such an agency to proceed against any person who has acted as an officer or director of an insured bank during the year preceding the date on which the agency institutes proceedings against such person or bank. Provides that the FDIC shall have enforcement powers over any insured bank or any insured branch of a foreign bank. Requires the FDIC to notify the appropriate Federal banking agency of its intent to initiate enforcement proceedings involving a national bank, district bank, insured Federal branch, State member bank, or an insured Federal savings bank or any director or officer or other person participating in the conduct of the bank's affairs. Allows the FDIC to proceed unless such agency takes corrective actions within a specified time. Provides for a six-month continuation of the insurance of deposits of an institution insured by the Federal Savings and Loan Insurance Corporation that are assumed by an FDIC-insured bank. Authorizes the FDIC Board to set reasonable fees for examining or investigating insured banks and bank affiliates (as redefined by this Act to include subsidiaries of insured banks). Sets forth the order of payment of unsecured claims against the estate of a closed bank or branch by the FDIC as receiver of such bank or branch. Subrogates the FDIC to the rights of any depositor of any closed insured bank or any closed insured branch of a foreign bank to the extent of the deposit payments made to such depositor. Eliminates provisions that require new banks (organized by the FDIC to assume the insured deposits of closed banks) to: (1) accept as new deposits only demand deposits aggregating not more than $100,000; and (2) maintain funds in cash, invested in Government or federally-guaranteed obligations, or deposited with the FDIC, a Federal Reserve bank, or an insured bank. Provides that, so long as an executive officer appointed by the FDIC Board has authority to manage such a new bank, such bank shall not be subject to any limitations imposed by law that restrict the activities of a national bank by measuring the amount of investment that the bank may devote to such activities by the amount of the bank's capitalization. Permits the business of such a new bank that has assumed the insured deposits of a closed bank with total assets of $500,000,000 or more to be acquired by, or transferred to, an insured depository institution located in the State where the closed bank was chartered but established by an out-of-State bank or holding company. Deletes the requirement that the stockholders of the closed bank be provided the first opportunity to purchase common stock of the new bank. Extends from two to five years the period within which the stock of a new bank must be sold or its assets acquired. Permits the FDIC to waive its right to receive unclaimed deposits transferred to a new bank or to another insured bank from a closed bank. Authorizes the FDIC to purchase the voting or common stock of an insured bank in order to provide emergency assistance to such bank. Exempts any insured bank: (1) while receiving assistance under an emergency assistance agreement, from any State or local taxes that are determined on the basis of the bank's deposits; and (2) which has received emergency assistance to increase its capital or net worth and which has a net worth exceeding one-half of one percent of assets, from any Federal, State, or local law limiting the authority of the bank to continue operations because of the level of the bank's capital, net worth, surplus fund, or guarantee. Authorizes the merger or acquisition of any insured bank with $500,000,000 or more in total assets if such bank is in danger of closing or has emergency assistance outstanding. Sets forth the conditions under which a representation or warranty made to a borrower by a bank in connection with the investment of the proceeds of a loan shall be valid against the assets of a closed bank acquired by the FDIC. Eliminates the requirement that one Federal banking agency request reports from the other banking agencies when evaluating bank mergers. Requires a State nonmember insured bank to notify the FDIC (current law requires FDIC approval) concerning moving any domestic branch or establishing and operating a new domestic branch. Amends the Garn-St Germain Depository Institutions Act of 1982 to repeal the termination dates of specified emergency assistance provisions.

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• Introduced in Senate

  summary · EN · 26 March 1985

  Open at official source

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