Federal Deposit Insurance Corporation Improvement Act of 1991
{{Short description|Banking Law in United States}}
{{Infobox U.S. legislation
| shorttitle = Federal Deposit Insurance Corporation Improvement Act of 1991
| othershorttitles = {{unbulleted list|Foreign Bank Supervision Enhancement Act of 1991|Qualified Thrift Lender Reform Act of 1991|Truth in Savings Act}}
| longtitle = An Act to reform Federal deposit insurance, protect the deposit insurance funds, recapitalize the Bank Insurance Fund, improve supervision and regulation of insured depository institutions, and for other purposes.
| colloquialacronym =
| nickname = Bank Enterprise Act of 1991
| enacted by = 102nd
| effective date = December 19, 1991
| public law url = http://www.gpo.gov/fdsys/pkg/STATUTE-105/pdf/STATUTE-105-Pg2236.pdf
| cite public law = 102-242
| cite statutes at large = {{usstat|105|2236}}
| acts amended =
| acts repealed =
| title amended = 12 U.S.C.: Banks and Banking
| sections created =
| sections amended = {{Usc-title-chap|12|16}} § 1811
| leghisturl = http://thomas.loc.gov/cgi-bin/bdquery/z?d102:SN00543:@@@R
| introducedin = Senate
| introducedbill = {{USBill|102|S.|543}}
| introducedby = Donald W. Riegle Jr. (D-MI)
| introduceddate = March 5, 1991
| committees = Senate Banking, Housing, and Urban Affairs
| passedbody1 = Senate
| passeddate1 = November 21, 1991
| passedvote1 = passed voice vote
| passedbody2 = House
| passedas2 =
| passeddate2 = November 23, 1991
| passedvote2 = passed voice vote
| conferencedate = November 27, 1991
| passedbody3 = House
| passeddate3 = November 27, 1991
| passedvote3 = agreed voice vote
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| agreedvote4 =
| passedbody4 = Senate
| passeddate4 = November 27, 1991
| passedvote4 = [http://www.govtrack.us/congress/votes/102-1991/s279 68-15]
| signedpresident = George H. W. Bush
| signeddate = December 19, 1991
| unsignedpresident =
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| amendments = Dodd–Frank Wall Street Reform and Consumer Protection Act
Economic Growth, Regulatory Relief and Consumer Protection Act
| SCOTUS cases =
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The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA, {{uspl|102|242}}), passed during the savings and loan crisis in the United States, strengthened the power of the Federal Deposit Insurance Corporation.
It allowed the FDIC to borrow directly from the Treasury department and mandated that the FDIC resolve failed banks using the least costly method available. It also ordered the FDIC to assess insurance premiums according to risk and created new capital requirements.
Prompt Corrective Action
Title I, § 131(a), Prompt Corrective Action, mandates progressive penalties against banks that exhibit progressively deteriorating capital ratios. At the lower extreme, a critically undercapitalized Federal Deposit Insurance Corporation (FDIC)-regulated institution (i.e., one with a ratio of total capital / assets below 2%) is required to be taken into receivership by the FDIC in order to minimize long-term losses to the FDIC.{{cite web|url=https://www.law.cornell.edu/uscode/text/12/1831o-|title=US Code Title 12, 1831o, Prompt Corrective Action}} The motivation behind the law is to provide incentives for banks to address problems while they are still small enough to be manageable. Spong (2000, pages 90–95) summarizes the details (http://www.kansascityfed.org/publicat/bankingregulation/RegsBook2000.pdf).
In an interview on Bill Moyers Journal broadcast April 3, 2009, former bank regulator William K. Black asserted that federal officials were ignoring the PCA law requiring them to put insolvent banks into receivership.{{cite web|url=https://www.pbs.org/moyers/journal/04032009/profile.html|title=Transcript, Bill Moyers Journal|website=PBS |date=April 3, 2009}} The PCA law applies only to institutions insured by the FDIC and therefore would not affect, for better or worse, companies such as AIG.
See also
References
{{Reflist}}
External links
- [https://www.govinfo.gov/content/pkg/COMPS-10658/uslm/COMPS-10658.xml Federal Deposit Insurance Corporation Improvement Act of 1991] as amended ([https://www.govinfo.gov/content/pkg/COMPS-10658/pdf/COMPS-10658.pdf PDF]/[https://www.govinfo.gov/app/details/COMPS-10658/ details]) in the GPO [https://www.govinfo.gov/help/comps Statute Compilations collection]
- [https://www.law.cornell.edu/uscode/text/12/1831o- US Code Title 12, 1831o], Prompt Corrective Action
- William K. Black comments on PCA [https://www.pbs.org/moyers/journal/blog/2009/04/william_k_black_on_the_prompt.html]
{{Presidency of George H. W. Bush}}
{{Bank regulation in the United States}}
{{Federal Reserve System}}
{{Authority control}}
Category:102nd United States Congress
Category:United States federal banking legislation
Category:Federal Deposit Insurance Corporation
Category:Savings and loan crisis
Category:1991 in American politics
Category:1991 in economic history
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