Independent and Community Bank Shareholders Protection Act

II 116TH CONGRESS 1ST SESSION S. 1297 To amend the Federal Deposit Insurance Act to provide shareholders of certain depository institutions a cause of action for assets seized by an appropriate Federal banking agency. IN THE SENATE OF THE UNITED STATES MAY 2, 2019 Mr. MORAN (for himself and Mr. ROBERTS) introduced the following bill; which was read twice and referred to the Committee on Banking, Hous- ing, and Urban Affairs A BILL To amend the Federal Deposit Insurance Act to provide shareholders of certain depository institutions a cause of action for assets seized by an appropriate Federal banking agency. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Independent and Com- 4 munity Bank Shareholders Protection Act’’. 5 VerDate Sep 11 2014 03:13 May 07, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1297.IS S1297 kjohnson on DSK79L0C42 with BILLS 2 •S 1297 IS SEC. 2. SHAREHOLDER CLAIMS. 1 (a) IN GENERAL.—Section 11(d) of the Federal De- 2 posit Insurance Act (12 U.S.C. 1821(d)) is amended by 3 adding at the end the following: 4 ‘‘(21) SHAREHOLDER CLAIMS FOR JUST COM- 5 PENSATION.— 6 ‘‘(A) DEFINITION.—In this paragraph, the 7 term ‘covered institution’ means a depository 8 institution— 9 ‘‘(i) for which the Corporation has ap- 10 pointed a conservator or receiver; and 11 ‘‘(ii) that has total assets of less than 12 $15,000,000 as of the date on which the 13 institution enters conservatorship or receiv- 14 ership. 15 ‘‘(B) CLAIMS AUTHORIZED.— 16 ‘‘(i) IN GENERAL.—A shareholder of a 17 covered institution may file a claim with 18 the Corporation for just compensation to 19 be paid by the Corporation to the share- 20 holder. 21 ‘‘(ii) HOLDING COMPANIES.—A share- 22 holder of a depository institution holding 23 company may file a claim authorized by 24 this subparagraph on behalf of such com- 25 pany with respect to a covered institution. 26 VerDate Sep 11 2014 03:13 May 07, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1297.IS S1297 kjohnson on DSK79L0C42 with BILLS 3 •S 1297 IS ‘‘(C) AMOUNT TO BE PAID.—Just com- 1 pensation shall be paid to a shareholder for a 2 claim under this paragraph in an amount equal 3 to the pro-rata share of the shareholder of the 4 net worth of the covered institution according 5 to generally accepted accounting principles de- 6 termined as of the date on which the covered 7 institution enters conservatorship or receiver- 8 ship, whichever occurs first. 9 ‘‘(D) LIMITATION ON PAYMENT OF 10 CLAIMS.—The Corporation shall not pay a 11 claim under subparagraph (B) if— 12 ‘‘(i) the covered institution is deter- 13 mined by the final judgment of a court of 14 competent jurisdiction to have been insol- 15 vent as of the date on which the Corpora- 16 tion was appointed conservator or receiver; 17 or 18 ‘‘(ii) the administrative expenses of 19 the Corporation arising from the appoint- 20 ment of a conservator or receiver for the 21 covered institution exceed available funds 22 from the covered institution, any deposit li- 23 ability of the institution, any other general 24 or senior liability of the institution and any 25 VerDate Sep 11 2014 03:13 May 07, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1297.IS S1297 kjohnson on DSK79L0C42 with BILLS 4 •S 1297 IS obligation subordinated to depositors or 1 general credits exceed the available funds 2 from the covered institution. 3 ‘‘(E) STATUTE OF LIMITATIONS.— 4 ‘‘(i) IN GENERAL.—Except as pro- 5 vided in clause (ii), the applicable statute 6 of limitations with regard to a claim 7 brought by a shareholder under subpara- 8 graph (B) shall be 90 days beginning on 9 the date that a conservator or receiver is 10 appointed for the covered institution pur- 11 suant to this Act. 12 ‘‘(ii) CLAIMS ARISING FROM PRIOR AC- 13 TIONS.—The applicable statute of limita- 14 tions with regard to a claim brought by a 15 shareholder under subparagraph (B) for a 16 covered institution for which a conservator 17 or receiver was appointed before the date 18 of enactment of this paragraph shall be 90 19 days beginning on the date of enactment of 20 this paragraph. 21 ‘‘(F) SAVINGS ASSOCIATION SHARE- 22 HOLDERS.—The rights provided to a share- 23 holder under subparagraph (B), shall apply in 24 the same manner and to the same extent to— 25 VerDate Sep 11 2014 03:13 May 07, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1297.IS S1297 kjohnson on DSK79L0C42 with BILLS 5 •S 1297 IS ‘‘(i) a shareholder of a savings asso- 1 ciation for which the Office of Thrift Su- 2 pervision or the Office of the Comptroller 3 of the Currency appointed a conservator or 4 receiver; and 5 ‘‘(ii) a shareholder of a savings and 6 loan holding company on behalf of such 7 holding company with respect to a savings 8 association for which the Office of Thrift 9 Supervision or the Office of the Comp- 10 troller of the Currency appointed a conser- 11 vator or receiver. 12 ‘‘(G) SPECIAL RULES.— 13 ‘‘(i) PRIOR CLAIMS.—A shareholder 14 shall not be precluded from filing a claim 15 under this paragraph if a claim with re- 16 spect to the same conservatorship or re- 17 ceivership has been previously adjudicated 18 before a court of competent jurisdiction. 19 ‘‘(ii) UNITED STATES COURT OF FED- 20 ERAL CLAIMS.—A shareholder may seek 21 review of a denial by the Corporation of a 22 claim filed under this paragraph in the 23 United States Court of Federal Claims.’’. 24 Æ VerDate Sep 11 2014 03:13 May 07, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S1297.IS S1297 kjohnson on DSK79L0C42 with BILLS