Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (P.L. 101-73)
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (P.L. 101-73)
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H.R. 1278, Enrolled Bill
One Hundred First Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the third day of January, one thousand nine hundred and eighty-nine
An Act
To reform, recapitalize, and consolidate the Federal deposit insurance system, to enhance the regulatory and enforcement powers of Federal financial institutions regulatory agencies, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.--This Act may be cited as the 'Financial Institutions Reform, Recovery, and Enforcement Act of 1989'.
(b) TABLE OF CONTENTS.--
Sec. 1401. Early termination of special reorganization rules for financial institutions.
Sec. 1402. Tax exemption for Resolution Trust Corporation and Resolution Funding Corporation.
Sec. 1403. Annual reports on transactions in which Federal financial assistance provided.
Sec. 1404. Studies of relationship between public debt and activities of Government-sponsored enterprises.
SEC. 1401. EARLY TERMINATION OF SPECIAL REORGANIZATION RULES FOR FINANCIAL INSTITUTIONS.
(a) GENERAL RULE.--
(1) REORGANIZATIONS.--Subparagraph (D) of section 368(a)(3) of the Internal Revenue Code of 1986 (as amended by section 4012 of the Technical and Miscellaneous Revenue Act of 1988) is amended to read as follows:
'(D) AGENCY RECEIVERSHIP PROCEEDINGS WHICH INVOLVE FINANCIAL INSTITUTIONS.--For purposes of subparagraphs (A) and (B), in the case of a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution referred to in section 581 or 591, the agency shall be treated as a court.'
(2) NET OPERATING LOSS RULES.--The last sentence of section 382(l)(5)(F) of such Code (as so amended) is amended by striking 'after December 31, 1989' and inserting 'on or after May 10, 1989'.
(3) FINANCIAL ASSISTANCE.--
(A) Section 597 of such Code (as so amended) is amended to read as follows:
'(a) GENERAL RULE.--The treatment for purposes of this chapter of any transaction in which Federal financial assistance is provided with respect to a bank or domestic building and loan association shall be determined under regulations prescribed by the Secretary.
'(b) PRINCIPLES USED IN PRESCRIBING REGULATIONS.--
'(1) TREATMENT OF TAXABLE ASSET ACQUISITIONS.--In the case of any acquisition of assets to which section 381(a) does not apply, the regulations prescribed under subsection (a) shall--
'(A) provide that Federal financial assistance shall be properly taken into account by the institution from which the assets were acquired, and
'(B) provide the proper method of allocating basis among the assets so acquired (including rights to receive Federal financial assistance).
'(2) OTHER TRANSACTIONS.--In the case of any transaction not described in paragraph (1), the regulations prescribed under subsection (a) shall provide for the proper treatment of Federal financial assistance and appropriate adjustments to basis or other tax attributes to reflect such treatment.
'(3) DENIAL OF DOUBLE BENEFIT.--No regulations prescribed under this section shall permit the utilization of any deduction (or other tax benefit) if such amount was in effect reimbursed by nontaxable Federal financial assistance.
'(c) FEDERAL FINANCIAL ASSISTANCE.--The purposes of this section, the term 'Federal financial assistance' means--
'(1) any money or other property provided with respect to a domestic building and loan association by the Federal Savings and Loan Insurance Corporation or the Resolution Trust Corporation pursuant to section 406(f) of the National Housing Act or section 21A of the Federal Home Loan Bank Act (or under any other similar provision of law), and
'(2) any money or other property provided with respect to a bank or domestic building and loan association by the Federal Deposit Insurance Corporation pursuant to section 11(f) or 13(c) of the Federal Deposit Insurance Act (or under any other similar provision of law),
regardless of whether any note or other instrument is issued in exchange therefor.
'(d) DOMESTIC BUILDING AND LOAN ASSOCIATION.--For purposes of this section, the term 'domestic building and loan association' has the meaning given such term by section 7701(a)(19) without regard to subparagraph (C) thereof.'
(C) The table of sections for part II of subchapter H of chapter 1 of such Code is amended by striking the item relating to section 597 and inserting the following:
(b) TECHNICAL AMENDMENTS.--
(1) Section 904 of the Tax Reform Act of 1986 (other than subsection (c)(2)(B) thereof) is hereby repealed and the Internal Revenue Code of 1986 shall be applied as if the amendments made by such section had not been enacted.
(2) The last sentence of paragraph (3) of section 4012(c) of the Technical and Miscellaneous Revenue Act of 1988 is amended to read as follows:
'In the case of any bank or any institution treated as a domestic building and loan association for purposes of section 597 of the 1986 Code by reason of the amendment made by subsection (b)(2)(B), the amendments made by this subsection shall also apply to any transfer before January 1, 1989, to which the amendments made by subsection (b)(2) apply.'
(3) The last sentence of section 593(e)(1) of such Code is amended to read as follows:
'This paragraph shall not apply to any transaction to which section 381 applies, or to any distribution to the Federal Savings and Loan Insurance Corporation (or any successor thereof) or the Federal Deposit Insurance Corporation in redemption of an interest in an association, if such interest was originally received by any such entity in exchange for assistance provided under a provision of law referred to in section 597(c).'.
(c) EFFECTIVE DATES.--
(1) SUBSECTION (a)(1).--The amendment made by subsection (a)(1) shall apply to acquisitions on or after May 10, 1989.
(2) SUBSECTION (a)(2).--The amendment made by subsection (a)(2) shall apply to transactions on or after May 10, 1989.
(3) SUBSECTION (a)(3).--
(A) IN GENERAL.--The amendments made by subsection (a)(3) shall apply to any amount received or accrued by the financial institution on or after May 10, 1989, except that such amendments shall not apply to transfers on or after such date pursuant to an acquisition to which the amendment made by subsection (a)(1) does not apply.
(B) INTERIM RULE.--In the case of any payment pursuant to a transaction on or after May 10, 1989, and before the date on which the Secretary of the Treasury (or his delegate) takes action in exercise of his regulatory authority under section 597 of the Internal Revenue Code of 1986 (as amended by subsection (a)(3)), the taxpayer may rely on the legislative history for the amendments made by subsection (a)(3) in determining the proper treatment of such payment.
(4) SUBSECTION (b)(1).--The provisions of subsection (b)(1) shall take effect on the date of the enactment of the Tax Reform Act of 1986.
(5) SUBSECTION (b)(2).--The amendment made by subsection (b)(2) shall take effect on the date of the enactment of the Technical and Miscellaneous Revenue Act of 1988.
(6) SUBSECTION (b)(3).--The amendment made by subsection (b)(3) shall take effect on the date of the enactment of this Act.
(7) CLARIFICATION OF PRIOR LAW.--Any reference to the Federal Savings and Loan Insurance Corporation in section 597 of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act) shall be treated as including a reference to the Resolution Trust Corporation and the FSLIC Resolution Fund.
(a) GENERAL RULE.--Subsection (l) of section 501 of the Internal Revenue Code of 1986 (relating to government corporations exempt under subsection (c)(1)) is amended to read as follows:
'(l) GOVERNMENT CORPORATIONS EXEMPT UNDER SUBSECTION (c)(1).--For purposes of subsection (c)(1), the following organizations are described in this subsection:
'(1) The Central Liquidity Facility established under title III of the Federal Credit Union Act (12 U.S.C. 1795 et seq.).
'(2) The Resolution Trust Corporation established under section 21A of the Federal Home Loan Bank Act.
'(3) The Resolution Funding Corporation established under section 21B of the Federal Home Loan Bank Act.'
(b) EFFECTIVE DATE.--The amendment made by subsection (a) shall take effect on the date of the enactment of this Act.
SEC. 1403. ANNUAL REPORTS ON TRANSACTIONS IN WHICH FEDERAL FINANCIAL ASSISTANCE PROVIDED.
(a) IN GENERAL.--The Secretary of the Treasury or his delegate shall submit to the Senate and to the Committee on Ways and Means of the House of Representatives annual reports on--
(1)(A) the transactions which occur during the year for which the report is made and with respect to which Federal financial assistance is provided;
(B) the aggregate amount of Federal financial assistance provided with respect to such transactions; and
(C) any tax benefits available by reason of such transactions; and
(2) the aggregate amount of Federal financial assistance provided during such year, and the aggregate tax benefits utilized during such year, which are attributable to such transactions in prior years.
(b) DEFINITION.--For purposes of this section, the term 'Federal financial assistance' means any assistance to which section 597 of the Internal Revenue Code of 1986 applies.
SEC. 1404. STUDIES OF RELATIONSHIP BETWEEN PUBLIC DEBT AND ACTIVITIES OF GOVERNMENT-SPONSORED ENTERPRISES.
(a) IN GENERAL.--In order to better manage the bonded indebtedness of the United States, the Secretary shall conduct 2 annual studies to assess the financial safety and soundness of the activities of all Government-sponsored enterprises and the impact of their operations on Federal borrowing.
(b) ACCESS TO RELEVANT INFORMATION.--
(1) INFORMATION FROM GSE's.--Each Government-sponsored enterprise shall provide full and prompt access to the Secretary to its books and records, and shall promptly provide any other information requested by the Secretary.
(2) INFORMATION FROM SUPERVISORY AGENCIES.--In conducting the studies under this section, the Secretary may request information from, or the assistance of, any Federal department or agency authorized by law to supervise the activities of any Government-sponsored enterprise.
(3) CONFIDENTIALITY OF INFORMATION.--
(A) IN GENERAL.--The Secretary shall determine and maintain the confidentiality of any book, record, or information made available under this subsection in a manner generally consistent with the level of confidentiality established for the material by the Government-sponsored enterprise involved.
(B) EXEMPTION FROM PUBLIC DISCLOSURE REQUIREMENTS.--The Department of the Treasury shall be exempt from section 552 of title 5, United States Code, with respect to any book, record, or information made available under this subsection and determined by the Secretary to be confidential under subparagraph (A).
(C) PENALTY FOR UNAUTHORIZED DISCLOSURE.--Any officer or employee of the Department of the Treasury shall be subject to the penalties set forth in section 1906 of title 18, United States Code, if--
(i) by virtue of his employment or official position, he has possession of or access to any book, record, or information made available under this subsection and determined by the Secretary to be confidential under subparagraph (A); and
(ii) he discloses the material in any manner other than--
(I) to an officer or employee of the Department of the Treasury; or
(II) pursuant to the exceptions set forth in such section 1906.
(d) REPORTS TO CONGRESS.--The Secretary shall submit to the Congress--
(1) by May 15, 1990, a report setting forth the results of the 1st annual study conducted under this section; and
(2) by May 15, 1991, a report setting forth the results of the 2nd annual study conducted under this section.
(e) DEFINITIONS.--For purposes of this section:
(1) GOVERNMENT-SPONSORED ENTERPRISE.--The term 'Government-sponsored enterprise' means--
(A) the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank System, the Farm Credit Banks, the Banks for Cooperatives, the Federal Agricultural Mortgage Corporation, the Student Loan Marketing Association, the College Construction Loan Insurance Association, and any of their affiliated or member institutions; and
(B) any other Government-sponsored enterprise, as designated by the Secretary.
(2) SECRETARY.--The term 'Secretary' means the Secretary of the Treasury or his delegate.
Vice President of the United States and President of the Senate.
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- LanguageEnglish
