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1997 Annual Report

Legislation Enacted

Although Congress did not enact comprehensive banking legislation in 1997, lawmakers approved measures addressing interstate banking for state-chartered banks and giving federal regulators flexibility in enforcing certain regulations within disaster areas. Congress also approved Fiscal Year 1998 appropriations for the FDIC Office of Inspector General (OIG).

Interstate Branching

The Riegle-Neal Amendments Act of 1997 (Public Law 105-24) was enacted on July 3, 1997. The Act amends the Federal Deposit Insurance Act to change the law applicable to branches of out-of-state state-chartered banks. Prior to the Act, host state law applied.

 

Division of     Supervision Examiner Glen Bakken wades in front of his Grand Forks, ND, home after record flooding in April graphic
Division of Supervision Examiner Glen Bakken wades in front of his Grand Forks, ND, home after record flooding in April. The Depository Institutions Disaster Relief Act of 1997 provides temporary regulatory relief for financial institutions in flooded areas of the Dakotas and other areas where a major disaster has occurred.

Under the new law, home state law applies to the extent that federal law preempts host state law for branches of out-of-state national banks. The Act also clarifies what law governs permissible activities. A branch of an out-of-state state-chartered bank may conduct in the host state those activities that are permissible either for a bank chartered in the host state, or for a branch of an out-of-state national bank.

Depository Institutions Disaster Relief

The Depository Institutions Disaster Relief
Act of 1997 (Public Law 105-18) was enacted as part of an emergency supplemental appropriations bill on June 12. The
Act provides temporary regulatory relief
for financial institutions in flooded areas of Minnesota and the Dakotas and in other
areas where a major disaster has occurred.
 

The Act gives to federal financial institution regulatory agencies greater flexibility to waive or limit the application of the Truth in Lending Act, the Expedited Funds Availability Act, and certain prompt corrective action provisions of the Federal Deposit Insurance Act. The authority for the temporary provisions ends in either 1998 or 1999.

Appropriations

Congress appropriated funds for the activities of the FDIC OIG as part of the Fiscal Year 1998 Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act of 1998 (Public Law 105-65) enacted October 27,1997. The Act designates nearly $34.4 million from the Bank Insurance Fund, the Savings Association Insurance Fund and the FSLIC Resolution Fund for necessary expenses of the OIG in Fiscal Year 1998.

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