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Congress anticipated that SAIF participants would try to
convert to BIF participants in order to escape the higher SAIF
premiums and regulatory costs. Thus, Congress included in FIRREA
certain control measures to prevent an exodus from the SAIF. See
12 U.S.C. sec. 1815(d)(2)(E) and (F) (1994). First, FIRREA
required that entrance and exit fees be paid to the respective
funds as to a conversion transaction between a BIF participant
and a SAIF participant. See 12 U.S.C. sec. 1815(d)(2)(E) (1994).
A higher exit fee was placed on financial institutions leaving
the SAIF for the BIF in order to discourage SAIF-insured
institutions from insuring their deposits with the BIF. See 12
U.S.C. sec. 1815(d)(2)(F) (1994). Second, FIRREA imposed a 5-
year moratorium beginning on August 9, 1989, to replace the
expired CEBA moratorium.6 See 12 U.S.C. sec. 1815(d)(2)(A)(ii)
(1994). Under the FIRREA moratorium, SAIF-insured institutions
were generally unable to enter into conversion transactions,
which essentially prevented them from converting to BIF-insured
institutions and essentially ensured mandatory SAIF participation
for savings associations during the moratorium’s duration.
FIRREA imposed two relevant exceptions to the moratorium.
First, the FDIC could allow certain conversion transactions
involving the acquisition of a depository institution that was in
6 Congress later extended the 5-year FIRREA moratorium,
which was in effect during the relevant years.
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