The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
OF HQS« LhD T, CBOHLSZ, CHAlRfcAk, FEbEKAL DEPOSIT IISOKAMC1 CORPORATION, Oh I* ft« 12447 BEFORE THE COMMITTEE 0 BACKING AND CURRENCY OF THE B00S1 OF REPRESENTATIVES, MONLAI 11, 1958. blurt year tide Committee tad the Senate Banking and Committee held extensive hearings and gave careful consideration to the revisions of the law necessary to enable the Federal Deposit Insurance Corporation to discharge its duties efficiently. Az a result, Title I. of the Banking Act of 1935 was enacted, providing for the powers and duties of the Corporation, both as insurer and as receiver of national banks. We do not understand that this Committee intends in any way to change any of the provisions of the law governing the operation of the Corporation which were enacted last year* However, several sec- tions of the pending bill i n so >?orded ae possibly to create uncertainty on the question of whether the powers of the Corporation are being changed or diminished by implication, Ihile the enactment of the bill in its present form might be held not to affect rights and powers of the Corporation, the determination of this question involves a question of statutory construction which can readily be avoided by the insertion of a provision specifically stuting that the bill shall not in any way affect or diminish the Corporation'& po?ere. Section 1 Section 1 of the bill unuer consideration provides that the Comptroller of the Currency in fixing salaries of employees who are now or hereafter may be under bli direction by virtue of any provision of law and vrhosa ©alaries are payable from funds under his control and supervision derived fross assessments levied, by him or &£ otherwise provided by law, may apportion their salaries among various funds where services are rendered in connection with more than on© administrative division or branch of the duties imposed by law upon him in any capacity* The attention of the committee is called to paragraph (l) of subsection (m) of Section 1£B of the Feaeral Reserve Act, as amended, which provides that the Corporation as receiver of a closed national bank "shall have the right to appoint agent© to assist it in its duties as such receiver and that all fees, compensations, and expenees of liquidation and administration thereof shall be fixed by the Corporation, subject to the approval of the Comptroller of the Currency, and may be paid by it out of funds coming into its possession && such receiver,H It is not cleer whether the draftsman of section 1 of the pending bill intended that it should apply to the receivership activities of the Federal Deposit Insurance Corporation, In the pending bill no specific reference is made to Section U S of the Federal Reserve Actt However, the enactment of this section as an amendment to the existing statutes pertaining; to national bank liquidations might be construed to imply the repeal or modification of those provisions of paragraph (l), subsection (m) of Section 1£B v?hich give the Corporation the right to employ agents and fix their compensation« Thie vrould serve only to deprive the Corporation of rights now given to it by Cttpgrtit to appoint agents to assist it in its duties as receiver and to fix the fees, compensation and expenses of such employees. Because of the provision in subsection (m) of Section 12B of the Federal Reserve Act, giving the Comptroller of the Currency the right to approve any fees, compensation or expenses so fixed by the Corporation if receiver of & national bank, kli office already h;:e full authority to protect the interest in national bank receiverships of all creditors other than the Corporation, Section 4 Section 4 of the bill under consideration provides that whenever all the assets of an association which has been placed in the hand© of a receiver shall hav® been distributed b^ the Comptroller of the Currency in accordance with the provisions of Section 5236 of the Revised Statutes of the United States, the Comptroller of the Currency may call a meeting of shareholders of the association to vote upon the question of whether the receiver shall continue to wind up the affairs of the association or an agent shall be elected for that purpose* In lines 11 to 14 on page 9 of H. R. 1£447, reference is niude to the distribution of the assets of the association in the hands of a receiver *by the Comptroller (of the Currency) in accordance with the provisions of Section 5256 of the Revised Statutes of the United States11 and to the payment in full of all claims "by the said Comptroller,* Paragraphs three and four, subsection (L) of Section 1£B of the Feaeral Reserve Act, as amended, now provide that whenever any injured national bank shall have been closed by action of its board of directors, or by the Comptroller of the Currency, &s the case may be, an account of inability to meet the demands of lti oiiitors, the Comptroller of the Currency shall appoint the Corporation receiver for such closed bank, and no other person shall be appointed receiver of such closed bank. It is further provided that it shall be the duty of the Corporation as such receiver to realize upon the assets of such closed bank and to wind up the affairs of such closed bank* The Corporation if specifically directed to retain for its own account such portion of the amounts realised frost such liquidation as it shall be entitled to receive on account of its subrogation to the claims of depositors, and to pay the depositors and other creditors the net amounts available for distribution to them. With respect to such closed bank, the Corporation, as receiver, is given all the rights, powers, and privileges now possessed by or hereafter granted by law to a receiver of an insolvent national bank* Section 4 of H. R. 1£447 can be construed E S superseding the above-raentioned provisions of subsection (L) of Section 1£B of the Federal He serve Act. We have no objections to any of the provisions of the pending bill insofar as they apply to receiverships contracted for by the Comptroiler of the Currency prior to January 1, 19*4» However, as previously stated, we are mire that neither tliis Committee xior the Comptroller of the Currency intends to affect the existing powers of the Federal Deposit Insurance Corporation as receiver of national banks which fail subsequent to January 1, 19:*4, it also believe that it is not the desire of this Coasaittee to leave its intention in thig respect subject to any doubt. It is therefore respectfully suggested that the Committee write into the bill a clause to the effect that nothing therein contained shall alter or affect in aisy manner the existing powers of the Federal Deposit Insurance Corporation M receiver of a national bank. It is also suggested that following the words "notwithstanding any other provisions of law,* in line 10, pig* If there be inserted the words, "and except as herein otherwise provided,* in order that the suggested clause excepting the Corporation might be given full affect, "le hftft not d&MMMitf the provisions of the second paragraph of Section 1, commencing with line 4 on page 2 of the pending bill, as »e understand the Comsaittes has already determined that this paragraph shall be stricken. The Corporation would recommend against the enactment of this provision M drawn and if uie Coaaittee intend© to give further consideration to ths paragraph the Corporation desires an opportunity to present iti objections at at A further hearing.
@FedFRASER