To amend the Federal Deposit Insurance Act to provide for the return of excess amounts in Federal deposit insurance funds to financial institutions for use in their communities, with such distributions allocated according to the historical basis of contributions made to the funds by such institutions.

April 11, 2003

Mr. SANTORUM introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

To amend the Federal Deposit Insurance Act to provide for the return of excess amounts in Federal deposit insurance funds to financial institutions for use in their communities, with such distributions allocated according to the historical basis of contributions made to the funds by such institutions.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Deposit Insurance Fairness and Economic Opportunity Act'.

SEC. 2. DIVIDEND OF EXCESS DEPOSIT INSURANCE FUNDS TO INSURED DEPOSITORY INSTITUTIONS.

Section 7(b)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2)) is amended by inserting after subparagraph (C) the following:

`(D) DIVIDEND OF EXCESS DEPOSIT INSURANCE FUNDS-

`(i) IN GENERAL- Notwithstanding subsection (e)(2), the Board of Directors shall distribute any excess amounts described in clause (ii) to insured depository institutions insured by the Bank Insurance Fund or the Savings Association Insurance Fund, as applicable, in the form of a dividend, the allocation of which shall be made in accordance with clause (iii).

`(ii) DIVIDEND DISTRIBUTION CRITERIA- Excess amounts shall be distributed as dividends in accordance with this subparagraph to the extent that--

`(I) the amount of funds in the Bank Insurance Fund exceeds 1.40 percent of the total estimated deposits insured by that Fund; and

`(II) the amount of funds in the Savings Association Insurance Fund exceeds 1.40 percent of the total estimated deposits insured by that Fund.

`(iii) BASIS FOR DISTRIBUTION OF DIVIDEND-

`(I) IN GENERAL- Solely for the purpose of dividend distribution under this subparagraph, the Corporation shall determine the relative contribution of each insured depository institution to the Bank Insurance Fund and the Savings Association Insurance Fund, as applicable, for calculating the share of the institution of any dividend determined under this subparagraph, taking into account the factors described in subclause (II).

`(II) FACTORS FOR DISTRIBUTION- In implementing this subparagraph, the Corporation shall take into account with respect to an insured depository institution (including any predecessor thereto)--

`(aa) the ratio of the assessment base of the insured depository institution on December 31, 1996, that is attributable to a particular insurance fund, to the assessment base attributable to that insurance fund of all eligible insured depository institutions on that date;

`(bb) the total amount of assessments paid on or after January 1, 1997, by the insured depository institution to that insurance fund;

`(cc) that portion of assessments paid by the insured depository institution that reflects higher levels of risk assumed by such institution; and

`(dd) such other factors as the Corporation may determine to be appropriate.

`(iv) RULE OF CONSTRUCTION- For purposes of this subparagraph, references to the `Bank Insurance Fund' and the `Savings Association Insurance Fund' shall include any successor to such fund or funds.'.

SEC. 3. REGULATIONS.

The Federal Deposit Insurance Corporation shall promulgate such regulations as may be necessary to carry out section 7(b)(2)(D) of the Federal Deposit Insurance Act, as added by this Act.

END