Depository Institution Examination Improvement Act of 1987

Depository Institution Examination Improvement Act of 1987 - Redesignates the Financial Institutions Examination Council as the Depository Institutions Examination Council. Directs the Council to prepare guidelines for the Federal depository institutions regulatory agencies to ensure adequate compensation for living and travel expenses for any Federal examiner who is temporarily assigned outside of a regular region of employment.

Provides that the estimated expenditures and receipts of the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (FDIC), the Federal Home Loan Bank Board (FHLBB), the Federal Savings and Loan Insurance Corporation (FSLIC), and the National Credit Union Administration (NCUA) included in the annual Federal budget submitted to the Congress by the President shall be submitted to the President before October 16 of each year and included in the President's budget without change. Exempts such entities from fiscal, budget, appropriation, and fund apportionment requirements. Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) to exempt funds of such entities from reduction under any sequestration order.

Provides that the number of employees of a Federal depository institutions regulatory agency shall not be subject to any limitation imposed by any executive branch officer outside such agency.

Subjects the FHLBB, the Federal Home Loan Banks, the FSLIC, and the NCUA to audits by the Comptroller General. Establishes the FSLIC as a mixed-ownership Government corporation (currently listed as a wholly-owned Government corporation). Repeals specified authority of the Secretary of the Treasury to approve bank examiner appointments and bank examination assessments by, and to appoint staff of, the Comptroller of the Currency.

Directs the Council to: (1) develop a proposal for consolidating all Federal examiner training programs in one school to be established and conducted by the Council; and (2) report to specified congressional committees on its findings, legislative recommendations, and the savings to the regulatory agencies that would result from such consolidation.

Requires the Council to: (1) study the feasibility of establishing a graduate degree program in financial management analysis for officers and employees of the regulatory agencies and the State depository institutions supervisory agencies (State agencies); and (2) report to specified congressional committees on its findings, legislative recommendations, the cost of establishing and conducting the program, and on the approval or disapproval by each regulatory agency of the Council's proposal for such program.

Requires the Council to establish minimum requirements for examinations of depository institutions by State agencies in order for such an examination to be acceptable for purposes of Federal law. Prohibits such requirements from exceeding the minimum standards in effect for Federal examiners. Directs the Council: (1) at least annually, to request each State agency which examines institutions subject to Federal examination to allow the Council to review its examination methods; (2) to notify a State agency if its examination methods do not satisfy such minimum requirements and allow the agency not more than three years to cure any deficiency; and (3) to notify each Federal regulatory agency if a State agency refuses to allow a review of its examination methods or fails to remedy any deficiency in its methods. Prohibits any Federal regulatory agency or any regional bank, branch, or other office of such Federal agency from relying on any report of examination by a State agency for which such a notice has been received to fulfill an examination requirement under Federal law. Permits the Council to limit the scope of a notice to: (1) a separate branch or department of a State agency which has authority to conduct examinations; or (2) a State agency's capacity to examine a particular type of depository institution. Requires the FDIC, FHLBB, FSLIC, and the NCUA Board to accept any report of examination made by a State agency which meets the minimum requirements as determined by the Council, or to notify the State agency of the reason for such entity's refusal to accept such agency report.

Requires a demonstration project to be conducted under which the Federal Reserve Board and the FDIC, if they elect to participate, and the Office of the Comptroller of the Currency, the NCUA, the FHLBB, and the FSLIC shall establish and implement a system to provide employees compensation, including benefits, comparable to that received by their counterparts in the private sector. Requires each agency's compensation system to provide that: (1) covered positions will be classified by pay bands created by modifying the classes or grades currently applicable to such positions; (2) employees shall be evaluated using peer comparison and ranking; (3) each employee's basic pay rate shall be reviewed annually and shall be adjusted to prevent any increase in the deficiency between such rate and the pay for a comparable private sector position, if the employee's performance is rated at the fully successful level or higher; and (4) performance-recognition bonuses, recruitment and retention allowances, and differentials to compensate for regional differences in costs of living shall be awarded where appropriate.

Directs each agency to provide for the preparation of reports on: (1) any deficiency in the overall average level of compensation provided for agency positions as compared to the overall average level of compensation generally provided for comparable positions in the private sector; and (2) the percentage by which basic pay for all agency positions must be increased each year to eliminate any increase in such deficiency. Requires each agency head to institute such increase and permits each agency to further increase pay rates to eliminate the entire deficiency.

Prohibits any reduction in an employee's basic pay rate by reason of the establishment of such demonstration project.

Requires the Office of Personnel Management to: (1) provide that the demonstration project shall be evaluated annually by a contractor; and (2) report the contractor's findings to specified congressional committees. Requires the Comptroller General, within four years after the date on which the project commences, to submit to such committees a final report on such project, including any recommendations for appropriate legislative or other action.