Deposit Insurance Reform, Regulatory Modernization, and Taxpayer Protection Act of 1994

TABLE OF CONTENTS:

Title I: 100 Percent Cross-Guarantees

Subtitle A: Definitions

Subtitle B: Cross-Guarantee Process

Subtitle C: Powers and Duties of the CGRC

Subtitle D: Miscellaneous Provisions

Subtitle E: Transition to 100 Percent Cross-Guarantee Process

Title II: Amendments to Other Banking Laws

Title III: Amendments to Title 11, United States Code

Subtitle A: Amendments to chapter 1 of Title 11

Subtitle B: Amendments to chapter 3 of Title 11

Subtitle C: Amendments to chapter 5 of Title 11

Subtitle D: Amendments to chapter 11 of Title 11

Title IV: Amendment to Title 28, United States Code

Deposit Insurance Reform, Regulatory Modernization, and Taxpayer Protection Act of 1994 - Title I: 100 Percent Cross-Guarantees - Subtitle A: Definitions - Sets forth definitions relating to depository institutions, non- depository guarantors, affiliates, financial terms, and funds.

Subtitle B: Cross-Guarantee Process - Sets forth a cross-guarantee mechanism whose purpose is to: (1) protect the full amount of deposits by prohibiting depository institutions from operating without a cross-guarantee contract issued by syndicates of guarantors; (2) charge risk-sensitive premiums for the guarantees provided; (3) establish a self-regulating system with stop-loss mechanisms; and (4) regulate the cross-guarantee marketplace only to the extent of maintaining its soundness and viability (but not the solvency of any individual depository institution regardless of its size).

(Sec. 113) Includes a stop-loss limit for losses of a guaranteed party as a direct guarantor of other guaranteed parties. Requires the cross-guarantor's contract obligations to be independent of the obligations of any other party under the contract.

Prohibits direct guarantors under any cross-guarantee or stop-loss contract from obtaining collateral for cross-guarantee obligations. Sets forth the requirements for: (1) cross-guarantee contracts; (2) stop-loss contracts; (3) direct guarantors; and (4) cross-guarantee and stop-loss syndicates.

(Sec. 119) Declares that any action arising under a cross-guarantee or stop-loss contract shall be deemed to arise under Federal law. Confers original jurisdiction upon the Federal district courts for any action arising under such contracts.

Subtitle C: Powers and Duties of the CGRC - Establishes the Cross Guarantee Regulation Corporation (CGRC) to enforce, regulate, and approve the cross-guarantee process. Outlines the CGRC approval process for cross- guarantee, stop-loss, and group cross-guarantee contracts.

(Sec. 124) Requires the CGRC to establish and maintain a central electronic repository for cross-guarantee, stop-loss, and group cross-guarantee syndicate contracts. Mandates that the repository files be directly accessible to any direct guarantor, guaranteed party, syndicate agent, and other eligible persons.

(Sec. 125) Prohibits closed loop situations (i.e., a group of institutions guarantee each other without sharing such risk with outside guarantors) unless at least one cross-guarantee or stop-loss contract is a contract in each closed loop that exists in the system. Cites conditions under which the CGRC must appoint itself conservator or receiver for a depository institution guaranteed under a cross-guarantee contract.

(Sec. 126) Confers upon the Secretary of the Treasury oversight powers over the CRGC.

(Sec. 128) Establishes a CGRC-administered cross-guarantee backup fund to pay for any loss incurred by a depositor in connection with an insured deposit at a depository institution. States that deposits in any guaranteed depository institution shall be insured against loss to the same extent as deposits are insured against loss by the CGRC if the CGRC cannot recover adequate funds to pay for any loss due to the appointment of a receiver under this Act.

Subtitle D: Miscellaneous Provisions - Requires the CGRC to ensure that all deposit-taking institutions, with specified exceptions, comply with all Federal and State licensing and regulatory requirements.

(Sec. 132) Requires the Board of Governors of the Federal Reserve System to submit annual status reports to certain congressional committees regarding losses incurred as a result of lending within the cross-guarantee system.

(Sec. 133) Permits a cross-guarantee company or banking office to advertise that deposits and certain other liabilities under an CGRC-approved cross-guarantee contract are fully guaranteed against loss.

Subtitle E: Transition to 100 Percent Cross-Guarantee Process - Sets forth a conversion schedule to implement an eight-year transition period for the cross-guarantee system, effectuated when a specified minimum number of CGRC-approved cross-guarantee contracts and total assets are approved. Requires the Federal Deposit Insurance Corporation (FDIC) to immediately appoint a conservator or receiver for any depository institution which has not complied with such schedule.

(Sec.144) Sets forth a schedule to fund the cross-guarantee backup fund through the merger of existing deposit insurance funds and the subsequent transfer of their respective funds to the cross-guarantee backup fund.

(Sec. 145) Prescribes guidelines for severance pay and related benefits for former State and Federal banking agency employees.

(Sec. 146) Abolishes: (1) the Federal Financial Institutions Examination Council; and (2) the Federal Deposit Insurance Corporation.

Title II: Amendments to Other Banking Laws - Amends Federal banking laws to conform with the provisions of this Act, including amendments relating to: (1) national banks; (2) Federal Reserve System member banks; (3) savings associations; (4) savings and loan holding companies; (5) the FDIC; and (6) other Federal banking laws.

Title III: Amendments to Title 11, United States Code - Amends Federal bankruptcy law to conform with this Act.

Title IV: Amendment to Title 28, United States Code - Amends the Federal judicial code to conform its venue provisions with this Act.