- 4 -
insures the deposit liabilities of participating savings
associations; e.g., Community Federal Savings Bank (Community).
Each financial institution that participates in the FDIC’s
insurance program is generally assessed a semiannual charge
(premium) equal to its liability for deposits multiplied by the
applicable rate set forth in 12 U.S.C. sec. 1817(b)(1)(C) or (D)
(1994). Any amount assessed against a participant in the BIF is
deposited into the BIF and is available to the FDIC for use with
respect to any BIF participant. Any amount assessed against a
participant in the SAIF is deposited into the SAIF and is
available to the FDIC for use with respect to any SAIF
participant.
Community is a failed savings association. On October 16,
1990, Metrobank submitted to the FDIC a bid to consummate a
transaction (transaction) under which Metrobank would acquire a
portion of Community’s assets and assume a portion of Community’s
deposit liabilities. Because Community and Metrobank each
insured its deposit liabilities through a different FDIC fund,
and Metrobank had agreed to assume Community’s deposit
liabilities, which would be insured after the transaction by the
BIF instead of the SAIF, the transaction was a conversion
transaction under 12 U.S.C. sec. 1815(d)(2)(B)(iv) (1994).
Section 1815(d)(2)(B) of title 12 defines a "conversion
transaction" as:
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011