the Board of Directors may apply to any judge or clerk of any court of the United States within the jurisdiction of which such hearing, examination, or investigation is carried on, or where such person resides or carries on business, to issue a subpena commanding each person to whom it is directed to attend and give testimony or for the taking of his deposition and to produce books, records, or other papers relevant or material to such hearing, examination, or investigation at a time and place and before a person therein specified." Recommendation The second sentence of subsection (c), relating to the application for assistance from courts of the United States in compelling witnesses to testify and produce books and records in connection with any hearing, examination, or investigation under the Federal Deposit Insurance Act, should be amended by substituting the word "Corporation" for the words "Board of Directors". Reason This amendment would eliminate any requirement that the Board of Directors must itself act in seeking the aid of United States courts and would permit officers or employees of the Corporation actually on the scene of the hearing to apply directly to these courts for such assistance. Obviously it would be impractical and unnecessary to require the Board of Directors to formally act in these matters. The necessity for compulsory testimony or production of evidence might occur suddenly and unexpectedly and under circumstances where the assistance of the court, unless immediately available, would be of little value. 103. IMMUNITY FROM PROSECUTION Existing law The last sentence of subsection (d) of section 10 of the Federal Deposit Insurance Act, as amended (12 U. S. C. 1820 (d)): "No person shall be excused from attending and testifying or from producing books, records, or other papers in obedience to a subpena issued under the authority of this Act on the ground that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to penalty or forfeiture; but no individual shall be prosecuted or subject to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled to testify or produce evidence, documentary or otherwise, after having claimed his privilege against self-incrimination, except that such individual so testifying shall not be exempt from prosecution and punishment for perjury committed in so testifying." Recommendation The last sentence of subsection (d) of section 10 which grants immunity from prosecution to persons compelled to testify or produce documentary evidence should be deleted. Reason It is believed that the slight benefits resulting from requiring persons to testify or to produce records in connection with hearings under the act, do not warrant a grant of immunity from Federal prosecution to such persons who might otherwise, in the best interest of the public, be prosecuted for their criminal acts. With the removal of the immunity from prosecution now contained in this section the witness is entitled to resort to the constitutional safeguards against compulsory self-incriminating testimony. Nevertheless, he may be tried for criminal acts where the prosecution is based upon evidence discovered elsewhere. Existing law 104. CERTIFICATION OF RECORDS Subsection (g) of section 10 of the Federal Deposit Insurance Act, as amended (12 U. S. C. 1820 (g)): "The Corporation may cause any and all records, papers, or documents kept by it or in its possession or custody to be photographed or microphotographed or otherwise reproduced upon film, which photographic film shall comply with the minimum standards of quality approved for permanent photographic records by the National Bureau of Standards. Such photographs, microphotographs, or photographic film or copies thereof shall be deemed to be an original record for all purposes, including introduction in evidence in all State and Federal courts or administrative agencies and shall be admissible to prove any act, transaction, occurrence, or event therein recorded. Such photographs, microphotographs, or reproductions shall be preserved in such manner as the Board of Directors of the Corporation shall prescribe and the original records, papers, or documents may be destroyed or otherwise disposed of as the Board shall direct." Recommendation Subsection (g) of section 10 should be amended by adding a provision that copies of original records, papers, or documents kept by the Corporation or in its possession or custody, may be introduced in evidence upon certification by the Secretary of the Corporation, over the Corporation's seal, that the copies are true and correct copies of the originals. Reason This change would do away with the burdensome task presently required to authenticate copies of records for introduction in evidence under rule 44 of the Federal Rules of Civil Procedure. This rule, in addition to requiring attestation by the officer having the legal custody of the record, requires that such attestation be accompanied by a certificate made by one of the specified public officers having a seal to the effect that the attesting officer has custody of the record. Under this amendment copies of the Corporation's records would be admissible in evidence simply upon certification by the Secretary of the Corporation that they are true and correct copies of the originals. The amendment would not be in conflict with rule 44 which provides, in paragraph (c) thereof, that the rule does not prevent the proof of official records by any method authorized by any applicable statute. This amendment would also clarify the present subsection 10 (g) which makes such copies admissible in evidence but fails to prescribe the manner for authenticating copies of such records by the Secretary of the Corporation. Existing law 105. DEPOSIT INSURANCE FUND Subsection (a) of section 11 of the Federal Deposit Insurance Act, as amended (12 U. S. C. 1821 (a)): "The Temporary Federal Deposit Insurance Fund and the Fund For Mutuals heretofore created pursuant to the provisions of section 12B of the Federal Reserve Act, as amended, are hereby consolidated into a Permanent Insurance Fund for insuring deposits, and the assets therein shall be held by the Corporation for the uses and purposes of the Corporation: Provided, That the obligations to and rights of the Corporation, depositors, banks, and other persons arising out of any event or transaction prior to the effective date of this amendment shall remain unimpaired. On and after August 23, 1935, the Corporation shall insure the deposits of all insured banks as provided in this Act: Provided further, That the insurance shall apply only to deposits of insured banks which have been made available since March 10, 1933, for withdrawal in the usual course of the banking business: Provided further, That if any insured bank shall, without the consent of the Corporation, release or modify restrictions on or deferments of deposits which had not been made available for withdrawal in the usual course of the banking business on or before August 23, 1935, such deposits shall not be insured. The maximum amount of the insured deposit of any depositor shall be $10,000: And provided further, That in the case of banks closing prior to the effective date of this amendment, the maximum amount of the insured deposit of any depositor shall be $5,000." Recommendation Subsection (a) of section 11 should be amended to provide only that the assets of the Corporation shall be held in a deposit insurance fund for insuring deposits and for other uses and purposes of the Corporation, and that the maximum amount of the insured deposit of any depositor shall be $10,000. Reason The provisions of this subsection other than those relating to the insurance fund and the maximum amount of the insured deposit of any depositor are obsolete. The words "permanent insurance fund" were used in the 1935 amendments of the act presumably to distinguish the fund from the temporary Federal deposit insurance fund existing before such amendments. The recommended "deposit insurance fund" is considered more appropriate. 106. LIABILITY OF CORPORATION FOR INSURED DEPOSITS Existing law Subsections (b) and (f) of section 11 of the Federal Deposit Insurance Act, as amended (12 U. S. C. 1821 (b) and (f)): "(b) For the purposes of this Act an insured bank shall be deemed to have been closed on account of inability to meet the demands of its depositors in any case in which it has been closed for the purpose of liquidation without adequate provision being made for payment of its depositors. "(f) Whenever an insured bank shall have been closed on account of inability to meet the demands of its depositors, payment of the insured deposits in such bank shall be made by the Corporation as soon as possible, subject to the provisions of subsection (g) of this section either (1) by cash or (2) by making available to each depositor a transferred deposit in a new bank in the same community or in another insured bank in an amount equal to the insured deposit of such depositor: Provided, That the Corporation, in its discretion, may require proof of claims to be filed before paying the insured deposits, and that in any case where the Corporation is not satisfied as to the validity of a claim for an insured deposit, it may require the final determination by a court of competent jurisdiction before paying such claim." Recommendation Subsection (b) of section 11 should be amended to provide that an insured bank shall be deemed to have been closed on account of inability to meet the demands of its depositors in any case in which it. has been closed without adequate provision being made for the payment of insured deposits. Subsection (f) of section 11 should be amended by deleting the proviso clause therefrom and transferring it to a new subsection (h). A new subsection (g) should be added to section 11 to provide that in the event that pursuant to State or Federal law the control of any insured bank is assumed by a receiver, conservator, or other statutory authority without adequate provision being made for the payment. of the insured deposits, thereupon the Corporation shall promptly pay to depositors their insured deposits as herein provided, and upon such payment the Corporation shall be subrogated, in accordance with the provision of subsection (i) (subsection (g) of existing law), to the rights of such depositors to the extent of such payment. A new subsection (h) should be added to section 11 to include the present proviso clause of subsection (f) of section 11 and a provision that for the purpose of discharging its insurance obligation the Corporation shall have access to all books and records of the insured bank. Subsection (g) of section 11 should be redesignated subsection (i). Reason The existing law matures the Corporation's liability for payment. of insured deposits when an insured bank has been closed for liquidation without adequate provision being made for payment of its depositors. The recommended amendment would assure depositors of the payment of their insured deposits whenever an insured bank has been closed for any reason, or, while open, has been placed under the control of a receiver, conservator, or other statutory authority, without adequate provision being made for the payment of its insured deposits. This will prevent the postponement of the payment of insured deposits by action of a bank supervisory authority in closing an insured bank or placing it in conservatorship for indefinite periods for purposes other than liquidation. Access by the Corporation to the books and records of an insured bank is essential for the purpose of discharging the insurance obligation of the Corporation. 83668-56-10 107. ADDITIONAL LIABILITY OF NATIONAL BANK STOCKHOLDERS Existing law Subsection (d) of section 11 of the Federal Deposit Insurance Act, as amended (12 U. S. C. 1821 (d)): "Notwithstanding any other provision of law, it shall be the duty of the Corporation as such receiver to cause notice to be given, by advertisement in such newspapers as it may direct, to all persons having claims against such closed bank pursuant to section 5235 of the Revised Statutes (U. S. C. title 12, sec. 193); to realize upon the assets of such closed bank, having due regard to the condition of credit in the locality; to enforce the individual liability of the stockholders and directors thereof; and to wind up the affairs of such closed bank in conformity with the provisions of law relating to the liquidation of closed national banks, except as herein otherwise provided. The Corporation as such receiver shall pay to itself for its own account such portion of the amounts realized from such liquidation as it shall be entitled to receive on account of its subrogation to the claims of depositors, and it shall pay to depositors and other creditors the net amounts available for distribution to them. The Corporation as such receiver, however, may, in its discretion, pay dividends on proved claims at any time after the expiration of the period of advertisement made pursuant to the aforesaid section of the Revised Statutes, and no liability shall attach to the Corporation itself or as such receiver by reason of any such payment for failure to pay dividends to a claimant whose claim is not proved at the time of any such payment. With respect to any such closed bank, the Corporation as such receiver shall have all the rights, powers, and privileges now possessed by or hereafter granted by law to a receiver of a national bank or District bank and notwithstanding any other provision of law in the exercise of such rights, powers, and privileges the Corporation shall not be subject to the direction or supervision of the Secretary of the Treasury or the Comptroller of the Currency." Recommendation The first sentence of subsection (d) of section 11 should be amended to delete the reference to individual liability of stockholders of national banks. Reason The additional liability of stockholders of national banks has been terminated. 108. NEW NATIONAL BANK ORGANIZED TO ASSUME DEPOSITS Existing law Subsections (h) to (1), inclusive, of section 11 of the Federal Deposit Insurance Act, as amended (12 U. S. C. 1821 (h) to (1)) : "As soon as possible after the closing of an insured bank, the Corporation, if it finds that it is advisable and in the interest of the depositors of the closed bank or the public, shall organize a new national bank to assume the insured deposits of such closed bank and otherwise to perform temporarily the functions hereinafter provided for. The new bank shall have its place of business in the same community as the closed bank. |