Bill > HR6547

This bill, titled the "Least Cost Exception Act," amends the Federal Deposit Insurance Act to create an exception to the requirement that the Federal Deposit Insurance Corporation (FDIC) must resolve failing banks in the least costly way to the Deposit Insurance Fund (DIF), which is the fund used to protect depositors. Specifically, the bill allows the FDIC, at its discretion, to choose an alternative resolution method that is not the least costly if it determines that this alternative meets certain requirements and that the potential additional risks to the DIF are outweighed by the benefits of preventing further concentration of the U.S. banking system among global systemically important banking organizations (G-SIBs), which are very large, interconnected financial institutions whose failure could destabilize the global economy. The bill outlines specific conditions for this exception, including that the chosen alternative must be the least costly among options that do not involve a G-SIB and do not exceed the cost of simply liquidating the bank, and that the difference in cost compared to a "covered alternative" (the least costly resolution involving a G-SIB) must be within a maximum cost limit set by the FDIC. If another entity purchases the failing bank's assets or assumes its liabilities, they must agree to make payments to the FDIC over at least five years, calculated to cover the cost difference. The FDIC must also report to Congress on any such exception chosen.

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https://www.congress.gov/bill/119th-congress/house-bill/6547/all-info