Title I: FSLIC Recapitalization - Federal Savings and Loan Insurance Corporation Recapitalization Act of 1987 - Amends the Federal Home Loan Bank Act to require the Federal Home Loan Bank Board (FHLBB) to charter the Financing Corporation. Requires the Corporation to be under the management of a Directorate consisting of the Director of the Office of Finance of the Federal Home Loan Banks (Banks) and two other members selected by the Chairman of the Board from presidents of the Banks.
Empowers the Corporation to borrow, to issue stock to Banks, to invest in Federal Savings and Loan Insurance Corporation (FSLIC) securities, to issue obligations the proceeds of which shall be invested in the FSLIC, and to make semiannual assessments of insured institutions and to provide for the issuance costs, interest, and custodian fees of such obligations. Limits the aggregate amount of such obligations that may be outstanding at any time. Provides that such obligations shall be treated by the Securities and Exchange Commission as exempt securities, shall be tax-exempt (excluding interest), and shall not be guaranteed by the FSLIC, the Banks, or the United States.
Requires each Bank to invest in nonvoting capital stock of the Corporation. Requires the Chairman and the Directorate to ensure minority participation in public offerings. Sets annual limits on net new borrowing by the Corporation. Sets forth a formula for determining the prorated portion of funds to be invested by each Bank. Restricts dividend payments by a Bank for which other Banks must invest its required amount.
Limits the use and disposition of Corporation assets not invested in the FSLIC. Requires the Corporation to submit to specified congressional committees quarterly reports on its activities, financial condition, income, and expenditures.
Creates a Federal Savings and Loan Insurance Corporation Industry Advisory Committee. Directs the Committee to: (1) review, and confer with the FHLBB regarding quarterly reports and budgets on the activities, receipts, and expenditures of the FSLIC; and (2) submit an annual report to specified congressional committee chairmen on its activities and its reports and recommendations to the FHLBB and the FSLIC.
Terminates the Committee and the Corporation as soon as practicable after the earlier of: (1) the date by which all FSLIC stock purchased by the Corporation has been retired; or (2) December 31, 2026.
Amends the Government Corporations Control Act to establish the Corporation as a mixed-ownership Government corporation.
Amends the National Housing Act to authorize the FSLIC to issue nonredeemable capital certificates and redeemable nonvoting capital stock which shall be sold only to the Corporation, shall pay no dividends, and the proceeds of which shall be considered part of the FSLIC's primary reserve. Directs the FSLIC to establish and maintain an equity return account until all such certificates and stock have been paid off and retired. Sets forth formulae for calculating the FSLIC's annual contributions to such account beginning in 1997 based on the fraction of the aggregate amount of all accounts of all insured members equal to FSLIC reserves. Authorizes the FSLIC to invest amounts accumulated in such account as it determines appropriate. Directs the FSLIC to use only amounts accumulated in such account to pay off and retire its stock. Provides that certain statutorily prescribed suspensions or reductions of FSLIC premiums based on the FSLIC's primary and secondary reserve levels shall not apply as long as shares of its capital stock are outstanding. Reduces the total premiums paid by an insured institution to the FSLIC by the amount of any assessments paid to the Corporation during the same period.
Amends the Federal Home Loan Bank Act to allow the FHLBB to authorize a Bank to declare and pay dividends out of its undivided profits or legal reserves, only after such Bank has reduced all other reserves to zero, if: (1) the Bank incurs a charge-off or expense related to its investment in the Corporation; and (2) the FHLBB determines that there is an extraordinary need for such Bank's member institutions to receive dividends.
Amends the National Housing Act to prescribe limitations on special assessments by the FSLIC to cover losses and expenses for 1987 through 1991.
Title II: Thrift Forbearance; Regulatory Reform; Congressional Oversight - Thrift Institution Forbearance, Regulatory Reform, and Congressional Oversight Act - Amends the Home Owners' Loan Act of 1933, the National Housing Act, and the Federal Home Loan Bank Act to require member institutions having a net worth of .5 percent or more to be granted capital forbearance if: (1) the institution's weak capital condition resulted from losses recognized on, the nonperforming status of, or the failure of borrowers to remain in compliance with the repayment terms of loans, or participation in loans: (a) adversely affected by economic conditions in a designated economically depressed region; or (b) made by a minority institution, provided that 50 percent of such institution's loan assets are minority loans and at least 50 percent of such institution's originated loans are construction or permanent loans for family residents; (2) the institution's weak capital condition is not the result of imprudent operating practices; and (3) the institution submits a plan to increase capital and agrees to submit regular reports on its progress in meeting its goals under the plan. Provides an additional requirement (that the institution has reasonable prospects of returning to a satisfactory capital level) for institutions having a net worth of less than .5 percent.
Amends the Federal Home Loan Bank Act to allow the Federal Home Loan Bank Board (FHLBB) or the Federal Savings and Loan Insurance Corporation (FSLIC) to exercise its authority to purchase capital certificates in any institution which is eligible for capital forbearance.
Amends the Home Owners' Loan Act of 1933 to direct the FHLBB to prescribe guidelines to determine the types and amounts of fees an association may record as income. Requires the use of generally accepted accounting principles (GAAP) for: (1) determining when to reappraise upon foreclosure; and (2) establishing a loan loss reserve. Allows an association to restructure its troubled debt if that restructuring complies with Statement of Financial Accounting Standards Numbered 5 and 15. Permits any amount which an association holds as a general loss reserve or as a specific loss reserve for assets classified as "doubtful" to be treated as capital for purposes of determining regulatory capital or regulatory net worth. Modifies the asset classification into four categories: (1) Other Assets Especially Mentioned; (2) Substandard; (3) Doubtful; and (4) Loss. Directs the FHLBB and the FSLIC to prescribe uniform accounting standards to be used by all associations for the purpose of determining compliance with FHLBB or FSLIC rules and regulations. Amends the National Housing Act to make such accounting principles apply to federally-insured State-chartered thrift institutions.
Directs the FHLBB to submit a report to specified congressional committees containing new guidelines with respect to the approval process for renegotiated loans.
Directs the FHLBB to establish a review and appeal procedure under which any association, insured institution, or member may obtain a review by the principal supervisory agent of any determination made by an examiner, employee, or agent of the FHLBB, the FSLIC, or the Federal Home Loan Bank. Provides for the appointment of a panel of independent arbiters.
Directs the FHLBB to study the feasibility of establishing an asset holding corporation to relieve thrift institutions of the burden of carrying and maintaining troubled real estate assets. Requires the FHLBB to submit a report to specified congressional committees containing the findings and conclusions of the FHLBB with respect to such study.
Establishes congressional oversight responsibilities with respect to the panel of independent arbiters.
Requires the FHLBB to submit reports to specified congressional committees regarding: (1) its plans and goals for the year; (2) its existing manpower and talent; and (3) its projected manpower and talent needs for the year.
Directs the FHLBB to submit quarterly reports to specified congressional committees on FHLBB, FSLIC, Federal Asset Disposition Association, and Federal home loan bank district activities.
Requires the FHLBB to submit a report to specified congressional committees containing guidelines: (1) for the employment of outside accountants, attorneys, conservators, and consultants; (2) for notice and disapproval procedures for applications to the FHLBB; and (3) to prevent the dumping of assets over which it has direct or indirect control.
Directs the Secretary of the Treasury to consult with the FHLBB and the FSLIC on methods for increasing the use of underutilized minority thrift institutions as depositaries or financial agents of Federal agencies.
Title III: General Provisions - Amends the Federal Home Loan Bank Act to allow the Financing Corporation, with the approval of the FHLBB, to assess an exit fee on any institution which ceases to be insured by the FSLIC.
Directs the Comptroller General to conduct annual audits of the Federal Asset Disposition Association.
Amends the Garn-St Germain Depository Institutions Act of 1982 to repeal specified sunset provisions (Permanently extending Title I (Deposit Insurance Flexibility Act) and Title II (Net Worth Certificate Act) of such Act).
Extends forbearance measures provided in the acquisition of troubled thrift institutions provided the acquiring or resulting institution shows that any failure to meet a specified requirement, restriction, or limitation is attributable to the assets or liabilities acquired or assumed.
Expresses the sense of the Congress to reaffirm the security of funds deposited in federally-insured depository institutions.
Directs the FHLBB to study the effect of direct investment activities on insured activities. Requires the FHLBB to submit reports to specified congressional committees containing the findings and conclusions of the FHLBB with respect to such study and proposed regulations.
Title IV - Expedited Funds Availability Act - Requires the Board of Governors of the Federal Reserve System to begin to develop an expedited funds availability system which shall be implemented no later than three years and 90 days after enactment of this Act. Provides that such system shall require that funds deposited in an account of a depository institution by local and in-state checks be available for withdrawal the business day after deposit and that funds deposited by all other checks be available on the fourth business day after deposit. Requires the Board to reduce the established time period for the availability of nonlocal check to as short a time as possible and equal to the average check processing time under an improved check clearing system. Allows the Board to adjust the time period for certain local checks in special circumstances. Allows a time period extension of one business day for deposits made in institutions in noncontiguous States or territories and by checks drawn on institutions not located in the same State or territory. Lists considerations for the Board in establishing such system which include providing for the automated return of unpaid checks, a uniform endorsement standard, and direct notification of nonpayment. Directs the Board to report to the Congress every six months on its actions to implement such system and within two years after enactment of this Act on the effects of temporary schedules for funds availability established under this Act.
Establishes specific time limits for funds availability for various types of deposits. Provides for next day availability for cash, the cash portion of a deposit, wire transfers, checks of $100 or less, checks drawn on in-state branches of the receiving depository institution or branches located in the same check processing region, U.S. Treasury checks endorsed only by the payee, State and local treasury checks endorsed only by the payee and deposited in special envelopes at manned branches, cashier's checks, certified checks, teller's checks, and depository checks endorsed only by the payee and deposited in special envelopes at manned branches.
Sets forth a schedule, to be terminated upon implementation of the expedited funds availability system, providing that: (1) checks drawn on local originating depository institutions shall be available on the third business day after deposit during the one-year period beginning 90 days after enactment of this Act and on the second business day after deposit during the subsequent two years; and (2) checks drawn on nonlocal originating depository institutions shall be available for withdrawal on the seventh business day after deposit.
Authorizes the Board to make certain adjustments in such time limits.
Sets forth time limit exceptions and special time limits which shall apply: (1) to new accounts, deposits by checks in excess of $5,000, checks redeposited after being returned, repeated overdrafts, and foreign checks; and (2) under specified emergency conditions.
Authorizes the Board to suspend the applicability of this Act to any classification of checks directly associated with an unacceptable level of losses due to check-related fraud. Requires the Board to transmit a report justifying any suspension to specified congressional committees.
Provides that the availability schedules required by this Act shall not apply to a depository institution which has reasonable cause to believe that a check is uncollectible from the originating deposity institution. Prohibits basing such a determination on any class of checks or persons. Requires any depository instituion which claims such reasonable cause to provide immediate written notice to the depositor of such cause and a statement of the day the funds desposited will be available for withdrawal. Requires depository institutions to retain records of each such notice given. Prohibits the assessment of any overdraft fee in cases where notice was not given to the depositor and the amount of the check is collected from the originating depository institution.
Prohibits any depository institution from freezing funds in an account because other funds deposited in such account by check are not yet available for withdrawal pursuant to this Act.
Directs each institution to inform employees of, and ensure employee compliance with, the requirements of this Act.
Provides that State laws providing for shorter time periods for the availability of funds deposited in a State-chartered institution shall supersede this Act and shall apply to all federally-insured depository institutions located in such State.
Requires interest to accrue on funds deposited in an interest-bearing account of an institution beginning on the business day on which the institution receives provisional credit for such funds. Exempts from such interest requirement: (1) funds deposited by a check which is returned unpaid; and (2) accounts at a credit union which begins the computation of interest or dividends at a later date with respect to all funds and provides notice of such interest payment policy.
Requires a depository institution to meet specified disclosure requirements concerning its general policy on the availability for withdrawal of funds deposited by check. Authorizes the Board to publish model disclosure forms and clauses for common transactions.
Reduces from six years to one year the limitation on the time period in which the Department of the Treasury can reclaim from the presenting depository institution or other endorsers amounts paid on Treasury checks that have been paid over forged or unauthorized endorsements. Allows the United States to bring a civil action to enforce any liability of an endorser, transferor, depository, or fiscal agent on a forged or unauthorized signature or endorsement on, or any change in, a check or warrant issued by the Secretary of the Treasury, the U.S. Postal Service, or any disbursing official or agent within one year after the check or warrant is presented for payment (or within four years if the United States gives an endorser written notice of a claim).
Declares that this Act supersedes State law, including the Uniform Commercial Code, except as specified earlier.
Sets forth provisions governing: (1) the administrative enforcement of this Act; and (2) the civil liability of institutions that fail to comply with this Act.
Requires the Board to study and report to the Congress on the feasibility of modernizing and accelerating the check payment system through the development of an electronic clearinghouse process utilizing existing telecommunications technology to avoid the necessity of actual presentment of the paper instrument to a payor institution before such institution is charged for the item.
Became Public Law No: 100-86.
Introduced in House
Introduced in House
Referred to House Committee on Banking, Finance and Urban Affairs.
Referred to Subcommittee on Financial Institutions Supervision, Regulation and Insurance.
For Further Action See H.R.27.
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