Bill Summary
This bill, known as the "Financial Defense for Industrial Contractors Act" or the "FDIC Act," would amend the Federal Deposit Insurance Act to allow the Federal Deposit Insurance Corporation (FDIC) to terminate the insured status of a depository institution if it refuses to provide services to certain federal contractors. This means that if a bank or other depository institution refuses to offer services such as loans or accounts to contractors who are working for the federal government, the FDIC would have the power to terminate their insurance protection. The bill also includes provisions for a pre-termination hearing and temporary insurance of previously insured deposits. The purpose of this bill is to ensure that contractors who have fulfilled their responsibilities under federal contracts are not unfairly denied banking services.
Possible Impacts
1. This legislation could affect people who work for federal contractors as they could potentially be denied banking services from certain insured depository institutions.
2. It could also affect the banking industry, specifically those institutions with more than $50,000,000,000 in total consolidated assets, as they could potentially lose their insured status if they refuse to provide services to federal contractors.
3. The pretermination hearing process outlined in the legislation could also affect individuals who have deposits in a depository institution that is at risk of losing its insured status. They may have to temporarily deal with the uncertainty of their deposits being insured and potentially have to switch banks if the institution ultimately loses its insured status.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3298 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
2d Session
S. 3298
To amend the Federal Deposit Insurance Act to permit the Federal
Deposit Insurance Corporation to terminate the insured status of a
depository institution that refuses to provide services to certain
Federal contractors, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 13, 2020
Mr. Rubio (for himself, Mr. Cramer, Mr. Cotton, and Mrs. Blackburn)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Federal Deposit Insurance Act to permit the Federal
Deposit Insurance Corporation to terminate the insured status of a
depository institution that refuses to provide services to certain
Federal contractors, 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.
This Act may be cited as the ``Financial Defense for Industrial
Contractors Act'' or the ``FDIC Act''.
SEC. 2. TERMINATION OF INSURANCE.
Section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) is
amended--
(1) in subsection (a)(3), by inserting ``or (x)'' after
``subsection (w)''; and
(2) by adding at the end the following:
``(x) Termination of Insurance Relating to Denial of Services to
Federal Contractors.--
``(1) Definitions.--In this subsection--
``(A) the term `contractor' means an entity that--
``(i) is a party to a contract with the
Federal Government;
``(ii) has complied with all applicable
laws and regulations in fulfilling the
responsibilities of the entity with respect to
the contract described in clause (i); and
``(iii) satisfies traditional underwriting
and credit standards with respect to the
banking service sought by the entity under
paragraph (2); and
``(B) the term `covered institution' means an
insured depository institution that has more than
$50,000,000,000 in total consolidated assets.
``(2) Notice of termination; pretermination hearing.-- If a
covered institution refuses to provide a banking service sought
by a contractor, the Board of Directors shall--
``(A) issue to the insured depository institution a
notice of its intention to terminate the insured status
of the insured depository institution; and
``(B) schedule a hearing on the matter, which shall
be conducted in all respects as a termination hearing
pursuant to paragraphs (3) through (5) of subsection
(a).
``(3) Temporary insurance of previously insured deposits.--
Upon termination of the insured status of any depository
institution pursuant to paragraph (2), the deposits of such
depository institution shall be treated in accordance with
subsection (a)(7).''.
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