H.R. 6547 — Least Cost Exception Act

This section amends the Federal Deposit Insurance Act to establish a least-cost resolution exception permitting the Federal Deposit Insurance Corporation (FDIC), in its discretion, to select an alternative resolution method for a failing insured depository institution that is not the least costly to the Deposit Insurance Fund (DIF)—if the FDIC and the Federal Reserve Board, after consulting the Treasury Secretary, determine the potential additional DIF risks are outweighed by benefits of limiting further U.S. banking system concentration in global systemically important banking organizations (GSIBs, i.e., global systemically important bank holding companies and affiliates, as defined in regulations). The exception applies only if (1) the alternative is the least costly among options not involving a GSIB transaction and not exceeding liquidation costs; (2) its cost exceeds the least-cost GSIB-involved option (covered alternative) by less than a maximum threshold set case-by-case via FDIC rule required within one year of enactment; and (3) if involving asset purchase or deposit assumption by another party, that party pays a DIF assessment over at least five years based on FDIC criteria (also via rule within one year), factoring in a realistic discount rate and the cost difference. The FDIC must report to the House Financial Services and Senate Banking Committees within 30 days of selection, analyzing the cost difference versus the least-cost option; all cost determinations follow existing statutory methods. A rule of construction clarifies that an existing statutory provision on certain exceptions does not apply to these amendments. (As background, the least-cost requirement generally mandates FDIC resolutions minimize DIF losses from bank failures; this exception prioritizes competition policy for medium-sized banks while imposing safeguards.)