Regulatory Flexibility and Expanded Powers Act of 1981

Regulatory Flexibility and Expanded Powers Act of 1981 - Title I: Financially Distressed Depository Institutions - Amends the Federal Deposit Insurance Act to permit the Federal Deposit Insurance Corporation, whenever severe financial conditions exist which threaten the stability of a significant number of insured banks, to make loans to, purchase the assets of, or make deposits in any insured bank if it is probable such action will substantially reduce the risk of loss or avert a threatened loss to the Corporation.

Permits the Corporation to make loans to reduce the risk of loss or avert a threatened loss to the Corporation, to an insured bank or an association or bank insured by the Federal Savings and Loan Insurance Corporation.

Includes any lending costs for the calendar year within the definition of the "net assessment income" of the Corporation.

Amends the Bank Holding Company Act of 1956 to permit the Board of Governors of the Federal Reserve to waiver certain notice and hearing requirements concerning interests in nonbanking organizations if the Board finds that an emergency exists.

Includes within the definitions of "thrift institution" a Federal stock savings bank or savings and loan association organized under the Home Owners' Loan Act.

Permits a bank holding company, as a result of a transaction to be accomplished under the Federal Deposit Insurance Act, to acquire shares or assets of another bank located outside of the State in which the operations of such bank holding company's subsidiaries are located.

Amends the Home Owners' Loan Act to permit the Federal Home Loan Bank Board to authorize (or in the case of a Federal association, require) the conversion, on an equitable basis, of a mutual savings and loan association or mutual savings bank into a Federal stock savings and loan association or Federal stock savings bank, or charter a Federal stock savings and loan association or Federal stock savings bank to acquire the assets of, or merge with such a mutual institution.

Amends the National Housing Act to permit the Federal Savings and Loan Insurance Corporation, when severe financial conditions exist which threaten the stability of a significant number of insured institutions, to make loans to, make deposits in, purchase the assets or securities or assume the liabilities of, or make a contribution to, such insured institution.

Authorizes the Corporation, in the event that a Federal savings and loan association is in default, to organize a new Federal association to take over its assets.

Permits an insured institution that is eligible for assistance under the National Housing Act, during severe financial conditions, to merge or consolidate with, or to transfer its assets and liabilities to, another insured institution.

Amends the Federal Home Loan Bank Act to suspend temporarily, during severe financial conditions, the requirement that a portion of net earnings be set aside semiannually by each Federal Home Loan Bank and permit each such bank to declare and pay dividends out of undivided profits.

Amends the National Housing Act to prohibit interest on loans from the Federal Home Loan Banks from being less than their current marginal costs of funds. Limits the borrowing authority of the Federal Savings and Loan Insurance Corporation for the purpose of insuring loans.

Permits the Corporation, in times of extraordinary financial conditions, to terminate distribution of shares of the secondary reserve and utilize such reserve on the same basis as the primary reserve.

Amends the Federal Credit Union Act to authorize the Secretary of the Treasury to lend amounts as are authorized in advance in appropriation Acts the National Credit Union Share Insurance Fund. Authorizes such Fund to borrow from the National Credit Union Administration Central Liquidity Facility.

Authorizes the merger or consolidation of an insured credit union which is insolvent or is in danger of insolvency with any other insured credit union.

Authorizes the National Credit Union Administration Central Liquidity Facility to advance funds to the National Credit Union Share Insurance Fund.

Amends the Federal Deposit Insurance Act to permit the Federal Deposit Insurance Corporation, whenever an insured bank is closed and the Corporation is appointed receiver, to sell assets of the closed bank to, and arrange for the assumption of the liabilities of, the closed bank by an insured depository institution located in the same State but owned by an out-of-State bank or bank holding company.

Title II: Lending, Investment, and Operating Authority of Federal Mutual Savings Banks - Amends the Home Owners' Loan Act to permit an association which was formerly organized as a savings bank under State law to continue to carry on any activities it was engaged in immediately prior to conversion to a Federal Savings and Loan Association.

Permits Federal mutual savings banks to accept demand deposits from any source whatever.

Increases to ten percent of the assets of an association the amount of which such association may invest in or make loans to a service corporation.

Requires the Federal Deposit Insurance Corporation to indemnify the Federal Savings and Loan Insurance Corporation against any losses incurred which arise out of losses incurred by a bank which converts into a Federal mutual savings bank or a Federal stock savings bank.

Permits a Federal mutual savings bank to carry on all activities which are authorized to bank holding companies under the Bank Holding Company Act of 1956 or elsewhere.