Independent and Community Bank Shareholders Protection Act

I 116TH CONGRESS 1ST SESSION H. R. 4267 To amend the Federal Deposit Insurance Act with respect to shareholder claims arising from the appointment of a conservator or receiver for certain depository institutions, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 10, 2019 Mr. WATKINS (for himself and Ms. DAVIDS of Kansas) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Federal Deposit Insurance Act with respect to shareholder claims arising from the appointment of a conservator or receiver for certain depository institu- tions, 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, 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 03:15 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4267.IH H4267 kjohnson on DSK79L0C42 with BILLS 2 •HR 4267 IH 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) CLAIMS AUTHORIZED.— 7 ‘‘(i) IN GENERAL.—A shareholder of a 8 covered institution may file a claim with 9 the Corporation for just compensation to 10 be paid by the Corporation to the share- 11 holder. 12 ‘‘(ii) HOLDING COMPANIES.—A share- 13 holder of a depository institution holding 14 company may file a claim authorized by 15 this subparagraph on behalf of such com- 16 pany with respect to a covered institution. 17 ‘‘(B) AMOUNT TO BE PAID.—Just com- 18 pensation shall be paid to a shareholder in an 19 amount equal to the pro-rata share of the 20 shareholder of the net worth of the covered in- 21 stitution according to generally accepted ac- 22 counting principles determined as of the date 23 on which the covered institution enters con- 24 servatorship or receivership, whichever occurs 25 first. 26 VerDate Sep 11 2014 03:15 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4267.IH H4267 kjohnson on DSK79L0C42 with BILLS 3 •HR 4267 IH ‘‘(C) LIMITATION ON PAYMENT OF 1 CLAIMS.—The Corporation shall not pay a 2 claim under subparagraph (A) if— 3 ‘‘(i) the covered institution is deter- 4 mined by the final judgment of a court of 5 competent jurisdiction to have been insol- 6 vent as of the date on which control of the 7 covered institution passed from its share- 8 holders to the Corporation; or 9 ‘‘(ii) the administrative expenses of 10 the Corporation arising from the appoint- 11 ment of a conservator or receiver for the 12 covered institution exceed available funds 13 from the covered institution. 14 ‘‘(D) STATUTE OF LIMITATIONS.—The ap- 15 plicable statute of limitations with regard to a 16 claim brought by a shareholder under subpara- 17 graph (A) shall be 90 days beginning on the 18 date that a conservator or receiver is appointed 19 for the covered institution pursuant to this Act. 20 ‘‘(E) COVERED INSTITUTION DEFINED.— 21 In this paragraph, the term ‘covered institution’ 22 means a depository institution— 23 ‘‘(i) for which the Corporation has ap- 24 pointed a conservator or receiver; and 25 VerDate Sep 11 2014 03:15 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4267.IH H4267 kjohnson on DSK79L0C42 with BILLS 4 •HR 4267 IH ‘‘(ii) that has total assets of less than 1 $15,000,000,000 as of the date on which 2 the institution enters conservatorship or 3 receivership.’’. 4 (b) SAVINGS ASSOCIATION SHAREHOLDERS.—The 5 rights provided to a shareholder under section 11(d)(21) 6 of the Federal Deposit Insurance Act, as added by this 7 Act, shall apply in the same manner and to the same ex- 8 tent to— 9 (1) a shareholder of a savings association for 10 which the Office of Thrift Supervision appointed a 11 conservator or receiver; and 12 (2) a shareholder of a savings and loan holding 13 company on behalf of such holding company with re- 14 spect to a savings association for which the Office 15 appointed a conservator or receiver. 16 (c) SPECIAL RULES.— 17 (1) STATUTE OF LIMITATIONS FOR CLAIMS 18 ARISING FROM ACTIONS PRIOR TO THIS ACT.—The 19 statute of limitations for a claim filed under this 20 Act, or an amendment made by this Act, with re- 21 spect to the appointment of a conservator or receiver 22 for a covered institution or savings association oc- 23 curring prior to the date of enactment of this Act 24 VerDate Sep 11 2014 03:15 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4267.IH H4267 kjohnson on DSK79L0C42 with BILLS 5 •HR 4267 IH shall be 90 days beginning on such date of enact- 1 ment. 2 (2) PRIOR CLAIMS.—A shareholder shall not be 3 precluded from filing a claim under this Act, or an 4 amendment made by this Act, if a claim with respect 5 to the same conservatorship or receivership has been 6 previously adjudicated before a court of competent 7 jurisdiction. 8 (3) UNITED STATES COURT OF FEDERAL 9 CLAIMS.—A shareholder may seek review of a denial 10 by the Federal Deposit Insurance Corporation of a 11 claim filed under this Act in the United States Court 12 of Federal Claims. 13 (d) DEFINITIONS.—In this section: 14 (1) COVERED INSTITUTION.—The term ‘‘cov- 15 ered institution’’ has the meaning given that term in 16 section 11(d)(21) of the Federal Deposit Insurance 17 Act (as added by this Act). 18 (2) SAVINGS ASSOCIATION.—The term ‘‘savings 19 association’’ has the meaning given that term in sec- 20 tion 3 of the Federal Deposit Insurance Act (12 21 U.S.C. 1813). 22 (3) SAVINGS AND LOAN HOLDING COMPANY.— 23 The term ‘‘savings and loan holding company’’ has 24 VerDate Sep 11 2014 03:15 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4267.IH H4267 kjohnson on DSK79L0C42 with BILLS 6 •HR 4267 IH the meaning given that term in section 10 of the 1 Home Owners’ Loan Act (12 U.S.C. 1467a). 2 Æ VerDate Sep 11 2014 03:15 Sep 11, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H4267.IH H4267 kjohnson on DSK79L0C42 with BILLS