What This Bill Does
This bill would change rules for the Federal Deposit Insurance Corporation (the government agency that protects bank deposits). It would let the FDIC terminate insurance at certain large banks if those banks refuse to provide banking services to companies that have contracts with the federal government. The bill applies only to banks with more than $50 billion in total assets.
Who It Affects
- Large banks (those with over $50 billion in total assets)
- Companies that have contracts with the federal government
- The Federal Deposit Insurance Corporation
- Customers whose deposits are at banks that lose FDIC insurance
Key Provisions
- The FDIC Board of Directors can issue a notice to terminate insurance at a bank if that bank refuses to provide banking services to a federal contractor (Sec. 2(x)(2)(A))
- The bank gets a hearing before the FDIC can terminate its insurance, following the same rules used for other insurance termination hearings (Sec. 2(x)(2)(B))
- A "contractor" must have a federal government contract, must have followed all laws and rules in doing that contract work, and must meet normal banking credit standards (Sec. 2(x)(1)(A))
- When a bank loses FDIC insurance under this rule, its customer deposits are treated according to existing insurance rules (Sec. 2(x)(3))
What Changes
If this bill becomes law, the FDIC gains new power to take away insurance from large banks that deny services to federal contractors. Banks would lose this protection if they refuse service to qualifying federal contractors.
Important Definitions
- "Contractor": A company with a federal government contract that has followed all laws in doing that work and meets normal banking credit standards
- "Covered institution": A bank insured by the FDIC with more than $50 billion in total consolidated assets
Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 583
To amend the Federal Deposit Insurance Act to permit the Federal Deposit
Insurance Corporation to terminate the insured status of a depository
institution that refuses to provide services to certain Federal contractors,
and for other purposes.
IN THE SENATE OF THE UNITED STATES
MARCH 1, 2023
Mr. RUBIO (for himself, Mr. CRUZ, Mr. CRAMER, Mr. COTTON, Mrs. BLACK-
BURN, and Mr. SCOTT of Florida) introduced the following bill; which was
read twice and referred to the Committee on Banking, Housing, and
Urban Affairs
A BILL
To amend the Federal Deposit Insurance Act to permit the
Federal Deposit Insurance Corporation to terminate the
insured status of a depository institution that refuses
to provide services to certain Federal contractors, and
for other purposes.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘Financial Defense for
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Industrial Contractors Act of 2023’’ or the ‘‘FDIC Act
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of 2023’’.
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•S 583 IS
SEC. 2. TERMINATION OF INSURANCE.
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Section 8 of the Federal Deposit Insurance Act (12
2
U.S.C. 1818) is amended—
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(1) in subsection (a)(3), by inserting ‘‘or (x)’’
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after ‘‘subsection (w)’’; and
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(2) by adding at the end the following:
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‘‘(x) TERMINATION
OF INSURANCE RELATING
TO
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DENIAL OF SERVICES TO FEDERAL CONTRACTORS.—
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‘‘(1) DEFINITIONS.—In this subsection—
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‘‘(A) the term ‘contractor’ means an entity
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that—
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‘‘(i) is a party to a contract with the
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Federal Government;
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‘‘(ii) has complied with all applicable
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laws and regulations in fulfilling the re-
15
sponsibilities of the entity with respect to
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the contract described in clause (i); and
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‘‘(iii) satisfies traditional underwriting
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and credit standards with respect to the
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banking service sought by the entity under
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paragraph (2); and
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‘‘(B) the term ‘covered institution’ means
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an insured depository institution that has more
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than $50,000,000,000 in total consolidated as-
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sets.
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•S 583 IS
‘‘(2)
NOTICE
OF
TERMINATION;
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PRETERMINATION HEARING.—If a covered institu-
2
tion refuses to provide a banking service sought by
3
a contractor, the Board of Directors shall—
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‘‘(A) issue to the insured depository insti-
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tution a notice of its intention to terminate the
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insured status of the insured depository institu-
7
tion; and
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‘‘(B) schedule a hearing on the matter,
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which shall be conducted in all respects as a
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termination hearing pursuant to paragraphs (3)
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through (5) of subsection (a).
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‘‘(3) TEMPORARY INSURANCE OF PREVIOUSLY
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INSURED DEPOSITS.—Upon termination of the in-
14
sured status of any depository institution pursuant
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to paragraph (2), the deposits of such depository in-
16
stitution shall be treated in accordance with sub-
17
section (a)(7).’’.
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Æ
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