Depository Institutions Acquisition Act of 1985

Depository Institutions Acquisition Act of 1985 - Amends the Bank Holding Company Act of 1956 to permit a State to authorize an out-of-State bank holding company to acquire interest in, or voting shares or assets of, a bank in such State: (1) without restriction; or (2) on the basis of the location of the other State involved or reciprocal treatment by such other State.

Provides that where a State has enacted a law allowing such an acquisition (with specified exceptions), and such acquisition has been implemented, such State shall, beginning the later of July 1, 1990, or two years after enactment of this Act, permit such acquisitions without regard to the location of the other States involved. Permits such State to require out-of-State bank holding companies that control banks within the State to comply with reporting, examination, and other requirements applicable to bank holding companies located within the State.

Amends the Federal Deposit Insurance Act to prohibit a Federal Deposit Insurance Corporation-insured bank from establishing or maintaining branches outside the State in which the bank is chartered and maintains the largest number of its branches, unless such branch was established before the date of enactment of this Act.

Prohibits the Federal Reserve Board from approving an interstate acquisition that would result in: (1) an undue concentration of resources in the provision of banking services nationally or in any State or region of the United States; (2) the merger of a bank holding company and a banking organization both among the 25 largest banking organizations in the United States in terms of total domestic deposits; (3) the applicant bank holding company controlling more than two-and-a-half percent of the total domestic deposits in depository institutions, unless the target bank is a de nova institution or a bank with less than $100,000,000 in total assets; or (4) a single banking organization or depository institution holding company controlling a percentage of the total assets or deposits in all State depository institutions which exceeds the limit established by State statute. Waives such prohibition if the Comptroller of the Currency or the appropriate State bank supervisory authority certifies to the Board that the proposed acquisition is necessary in order to prevent a bank failure or to permit a bank (or successor) to resume operations after failing.

Permits the Board to impose additional financial and managerial requirements on interstate bank holding companies as necessary to assure the stability of the banking system.

Prohibits the Board from approving an interstate acquisition if: (1) the financial performance and condition of the applicant bank holding company are unsatisfactory according to the inspection report; and (2) the acquisition would threaten the safety or soundness of the institutions involved.

Directs the Federal Financial Institutions Examination Council to recommend to all Federal banking agencies any changes needed in the method and frequency of examinations for depository institutions and holding companies involved in interstate acquisitions.

Prohibits the Board from approving an interstate acquisition unless the Board determines that the acquisition is likely to result in: (1) reduced rates and fees for existing services; (2) new or improved community services; (3) increased operating efficiency; or (4) greater convenience.

Amends the National Housing Act to permit a State to authorize an out-of-State savings and loan holding company to acquire control of an insured or uninsured institution in such State: (1) without restriction; or (2) on the basis of the location of the other State involved or reciprocal treatment by such other State. Provides that where a State has enacted a law allowing such an acquisition (with specified exceptions), and such acquisition has been implemented, such State shall, beginning the later of July 1, 1990, or two years after enactment of this Act, permit such acquisitions without regard to the location of the other States involved.

Amends the Garn-St Germain Depository Institutions Act of 1982 to extend the Deposit Insurance Flexibility Act for three years.

Amends the Federal Deposit Insurance Act to eliminate asset level requirements under interstate emergency bank acquisition provisions.