,,ib ,union ,calendar ,no4 #djf #aaith ,,congress #b;d ,session ,h4 ,r4 #feef ,report ,no4 #aai-dge ,,in ,,the ,,house ,,of ,,representatives ,december #aj1 #bjbe,mr4 ,lynch introduced the following bill2 which was referred to the ,committee on ,financial ,services ,february #b1 #bjbf;,additional sponsor3 ,mr4 ,gottheimer ,february #b1 #bjbf,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed,strike out all after the enacting clause and insert the part printed in italic,for text of introduced bill1 see copy of bill as introduced on ,december #aj1 #bjbe ,a ,,bill ,to prohibit the use of certain concentration limit exceptions with respect to mergers involving a failed bank unless the applicable agency determines such use is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,failing ,bank ,acquisition ,fairness ,act4 #b4 ,concentration limit exceptions only available to avoid serious adverse economic or financial effects 7a7 ,concentration limits with respect to deposits 7#a7 ,federal ,deposit ,insurance ,act ,the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahaa et seq47 is amended-- 7,a7 in section #ah7;c77#ac7-- 7i7 by amending subparagraph 7,b7 to read as follows3 7,b7 ,subparagraph 7,a7 shall not apply to an interstate merger transaction if-- 7i7 such interstate merger transaction involves #a or more insured depository institutions in default or in danger of default and the responsible agency determines1 based on clear and convincing evidence1 that consummation of the proposed interstate merger transaction is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and the ,corporation has not received any qualified bid from a company that is not subject to the prohibition in subparagraph 7,a72 or 7ii7 the ,corporation provides assistance under section #ac to facilitate such interstate merger transaction and the responsible agency determines1 based on clear and convincing evidence1 that consummation of the proposed interstate merger transaction is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and the ,corporation has not received any qualified bid from a company that is not subject to the prohibition in subparagraph 7,a74 2 and 7ii7 in subparagraph 7,c7-- 7,i7 in clause 7i71 by striking and at the end2 7,,ii7 in clause 7ii71 by striking the period at the end and inserting a semicolon2 and 7,,iii7 by adding at the end the following3 7iii7 the term qualified bid means an application1 proposed application1 or bid from a company where-- 7,i7 if applicable1 the company1 any affiliate insured depository institution1 and any affiliate depository institution holding company is well capitalized and well managed1 as of the date of the application1 proposed application1 or bid2 and 7,,ii7 upon consummation of the transaction1 the resulting insured depository institution is well capitalized2 7iv7 the term well capitalized-- 7,i7 with respect to an insured depository institution1 has the meaning given such term in section #ch7;b7 7#ab ,u4,s4,c4 #ahcao7b772 7,,ii7 with respect to a bank holding company1 has the meaning given such term in section #b7o77#a77;,b7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahda7o77#a77;,b772 7,,iii7 with respect to a savings and loan holding company1 has the meaning given such term in section #bch4b of title #ab1 ,code of ,federal ,regulations2 and 7,,iv7 with respect to a company that is not an insured depository institution1 bank holding company1 or savings and loan holding company1 means maintaining equity capital that the ,corporation determines is commensurate with the capital maintained by an insured depository institution that is well capitalized2 and 7v7 the term well managed has the meaning given such term in section #b7o77#i7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahda7o77#i774 2 and 7,b7 in section #dd1 by amending subsection 7e7 to read as follows3 7e7 ,exception for ,banks in ,default or in ,danger of ,default 7#a7 ,general exception ,the responsible agency may1 without regard to paragraph 7#a71 7#c71 7#d71 or 7#e7 of subsection 7b7 or paragraph 7#b71 7#d71 or 7#e7 of subsection 7a71 approve an application under subsection 7a77#a7 for approval of a merger transaction if-- 7,a7 the merger transaction involves #a or more banks in default or in danger of default2 or 7,b7 the ,corporation provides assistance under section #ac7;c7 to facilitate such merger transaction4 7#b7 ,concentration limit exception ,the responsible agency may1 without regard to subsection 7b77#b71 approve an application under subsection 7a77#a7 for approval of a merger transaction if-- 7,a7 the merger transaction involves #a or more banks in default or in danger of default and the responsible agency determines1 based on clear and convincing evidence1 that consummation of the proposed interstate merger transaction is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and the ,corporation has not received any qualified bid from another institution that is not subject to the prohibition in subsection 7b77#b72 or 7,b7 the ,corporation provides assistance under section #ac7;c7 to facilitate such merger transaction and the responsible agency determines1 based on clear and convincing evidence1 that consummation of the proposed interstate merger transaction is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and the ,corporation has not received any qualified bid from another institution that is not subject to the prohibition in subsection 7b77#b74 7#c7 ,qualified bid defined ,in this subsection1 the term qualified bid has the meaning given that term in section #ah7;c77#ac77;,c74 4 7#b7 ,bank ,holding ,company ,act of #aief ,the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahda et seq47 is amended-- 7,a7 in section #c7;d71 by amending paragraph 7#e7 to read as follows3 7#e7 ,exception for banks in default or in danger of default 7,a7 ,general exception ,the ,board may1 without regard to subparagraph 7,b7 or 7,d7 of paragraph 7#a7 or paragraph 7#c71 approve an application pursuant to paragraph 7#a77;,a7 if-- 7i7 the application is for an acquisition of #a or more banks in default or in danger of default2 or 7ii7 the application is for an acquisition with respect to which assistance is provided under section #ac7;c7 of the ,federal ,deposit ,insurance ,act4 7,b7 ,concentration limit exception ,the ,board may1 without regard to paragraph 7#b71 approve an application pursuant to paragraph 7#a77;,a7 if-- 7i7 the application is for the acquisition of #a or more banks in default or in danger of default and the ,board determines1 based on clear and convincing evidence1 that consummation of the proposed acquisition is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and the ,corporation has not received any qualified bid from another institution that is not subject to the prohibition in paragraph 7#b72 or 7ii7 the application is for an acquisition with respect to which assistance is provided under section #ac7;c7 of the ,federal ,deposit ,insurance ,act and the ,board determines1 based on clear and convincing evidence1 that consummation of the proposed acquisition is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and the ,corporation has not received any qualified bid from another institution that is not subject to the prohibition in paragraph 7#b74 7,c7 ,qualified bid defined ,in this paragraph1 the term qualified bid has the meaning given that term in section #ah7;c77#ac77;,c7 of the ,federal ,deposit ,insurance ,act4 2 and 7,b7 in section #d7;i77#h71 by amending subsection 7,b7 to read as follows3 7,b7 ,exception ,subparagraph 7,a7 shall not apply to an acquisition if-- 7i7 such acquisition involves an insured depository institution in default or in danger of default and the ,board determines1 based on clear and convincing evidence1 that consummation of the proposed acquisition is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and the ,corporation has not received any qualified bid 7as defined in section #ah7;c77#ac77;,c7 of the ,federal ,deposit ,insurance ,act7 from another institution that is not subject to the prohibition in paragraph 7#b72 or 7ii7 the ,federal ,deposit ,insurance ,corporation provides assistance under section #ac of the ,federal ,deposit ,insurance ,act to facilitate such acquisition and the ,board determines1 based on clear and convincing evidence1 that consummation of the proposed acquisition is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and the ,corporation has not received any qualified bid 7as defined in section #ah7;c77#ac77;,c7 of the ,federal ,deposit ,insurance ,act7 from another institution that is not subject to the prohibition in paragraph 7#b74 4 7b7 ,concentration limit with respect to consolidated liabilities ,section #ad7;c7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #aheb7;c77 is amended-- 7#a7 by redesignating paragraphs 7#a71 7#b71 and 7#c7 as subparagraphs 7,a71 7,b71 and 7,c71 respectively2 7#b7 by striking ,with the and inserting the following3 7#a7 ,in general ,with the 2 and 7#c7 by adding at the end the following3 7#b7 ,limitation ,the ,board may provide written consent for an acquisition described in paragraph 7#a77;,a7 or in paragraph 7#a77;,b7 only if the ,board determines1 based on clear and convincing evidence1 that consummation of the proposed acquisition is necessary to prevent significant economic disruption or significant adverse effects on financial stability1 and the ,corporation has not received any qualified bid 7as defined in section #ah7;c77#ac77;,c7 of the ,federal ,deposit ,insurance ,act7 from another institution that is not subject to the prohibition in subsection 7b74 4 #c4 ,congressional notification and justification for waivers 7a7 ,in general ,whenever the ,board of ,governors of the ,federal ,reserve ,system1 the ,comptroller of the ,currency1 or the ,federal ,deposit ,insurance ,corporation waives a concentration limit under section #ah7;c77#ac77;,b7 or section #dd7;e7 of the ,federal ,deposit ,insurance ,act or under section #c7;d77#e71 section #d7;i77#h77;,b71 or section #ad7;c77#b7 of the ,bank ,holding ,company ,act of #aief1 in connection with the acquisition of a bank or insured depository institution in default or in danger of default1 or in connection with an acquisition with respect to which the ,federal ,deposit ,insurance ,corporation provides assistance under section #ac of the ,federal ,deposit ,insurance ,act1 the waiving agency and the ,federal ,deposit ,insurance ,corporation1 jointly1 shall1 not later than #cj days after such waiver1 submit a written report to the ,committee on ,financial ,services of the ,house of ,representatives and the ,committee on ,banking1 ,housing1 and ,urban ,affairs in the ,senate containing-- 7#a7 a justification for the waiver1 including an analysis of why it was necessary to prevent significant economic disruption or significant adverse effects on financial stability2 7#b7 a description of alternative bids or outcomes considered1 including efforts to solicit and encourage bids from entities that would not require a waiver2 7#c7 an explanation of why alternative bids were not selected1 if applicable2 and 7#d7 any recommendations for legislative or regulatory changes to improve competition in future insured depository institution resolutions4 7b7 ,public disclosure ,the waiving agency submitting a report under subsection 7a7 and the ,federal ,deposit ,insurance ,corporation shall make the report publicly available on their respective websites1 subject to redactions for confidential supervisory information and any other information described under section #eeb7;b7 of title #e1 ,united ,states ,code4 #d4 ,limitation on considering bad faith bids in least cost determination ,section #ac7;c77#d7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbc7;c77#d77 is amended by adding at the end the following3 7,i7 ,limitation on considering bad faith bids ,in making a determination under this paragraph of whether an exercise of authority is the least costly to the ,deposit ,insurance ,fund1 the ,corporation may not consider any application1 proposed application1 or bid from a company1 if such application1 proposed application1 or bid would result in violation of-- 7i7 section #ah7;c77#ac7 or #dd7;b77#b72 or 7ii7 section #c7;d77#b71 #d7;i77#h71 or #ad of the ,bank ,holding ,company ,act of #aief4 4 ,february #b1 #bjbf,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed