Depository Institution Examination Improvement Act of 1986

Depository Institution Examination Improvement Act of 1986 - Redesignates the Financial Institution Examination Council as the Depository Institutions Examination Council. Directs the Council to: (1) divide the continental United States into regions approximating the districts of the Federal depository institutions regulatory agencies; (2) study and report to such regulatory agencies annually on the amounts of compensation and benefits provided to private sector accountants, auditors, and other representatives of financial service industries in each region who perform functions similar to those performed by Federal examiners; and (3) prepare guidelines for such agencies which would ensure adequate compensation for living and travel expenses for any Federal examiner who is temporarily assigned outside of his or her regular region of employment. Requires such report to be considered in the establishment and approval of Federal examiner compensation.

Repeals provisions requiring the Secretary of the Treasury's approval of examiners appointed by the Comptroller of the Currency.

Provides that specified civil service laws concerning employment and retention, performance, pay and allowances, and retirement shall not apply to any Federal depository institutions regulatory agency or any officer or employee thereof. Defines such an agency as the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (FDIC), the Federal Home Loan Bank Board (FHLBB), the Federal Savings and Loan Insurance Corporation (FSLIC), and the National Credit Union Administration (NCUA). Provides that the estimated expenditures and receipts of such entities (excluding the Federal Reserve Board) included in the annual Federal budget submitted to the Congress by the President shall be submitted to the President before October 16 of each year and included in the President's budget without change. Exempts such entities from fiscal, budget, appropriation, and fund apportionment requirements.

Amends the Balanced Budget and Emergency Deficit Control Act (Gramm-Rudman-Hollings Act) to exempt from reduction under any sequestration order: (1) assessment funds of the Comptroller of the Currency; (2) the FDIC; (3) the FHLBB; (4) the FHLBB revolving fund; (5) the FSLIC fund of the FHLBB; and (6) the central liquidity facility, the credit union share insurance fund, and the operating fund of the NCUA.

Provides that the pay and number of employees of a regulatory agency shall not be subject to any limitation imposed by any executive branch officer outside such agency.

Directs the Council to study and report to each regulatory agency on proposals for retirement, disability, and other appropriate benefit programs for agency employees and dependents. Requires each agency, within 18 months after enactment of this Act, to establish a retirement and disability program or to consider modifying any existing program on the basis of the Council's recommendations. Permits each agency to establish other employee benefit programs. Provides for the transfer of accrued employee and employer contributions and interest therein from the Civil Service Retirement and Disability Fund to the agency employee retirement and disability program.

Subjects the FHLBB, the Federal Home Loan Banks, the FSLIC, and the NCUA to audits by the Comptroller General. Establishes the FSLIC as a mixed-ownership Government corporation (currently listed as a wholly owned Government corporation). Repeals specified authority of the Treasury to approve actions and appoint staff of the Comptroller of the Currency.

Directs the Council to: (1) develop a proposal for consolidating all Federal examiner training programs in one school to be established and conducted by the Council; and (2) report to specified congressional committees on its findings, legislative recommendations, and the savings to the regulatory agencies that would result from such consolidation.

Requires the Council to: (1) study the feasibility of establishing a graduate degree program in financial management analysis for officers and employees of the regulatory agencies and the State depository institutions' supervisory agencies (State agencies); and (2) report to specified Congressional committees on its findings, legislative recommendations, the cost of establishing and conducting the program, and on the approval or disapproval by each regulatory agency of the Council's proposal for such program.

Requires the Council to establish minimum requirements for examinations of depository institutions by State agencies in order for such an examination to be acceptable for purposes of Federal law. Prohibits such requirements from exceeding the minimum standards in effect for Federal examiners. Directs the Council: (1) at least annually, to request each State agency which examines institutions subject to Federal examination to allow the Council to review its examination methods; (2) to notify a State agency if its examination methods do not satisfy such minimum requirements and allow the agency not more than three years to cure any deficiency; and (3) to notify each Federal regulatory agency if a State agency refuses to allow a review of its examination methods or fails to remedy any deficiency in its methods. Prohibits any Federal regulatory agency or any regional bank, branch, or other office of such Federal agency from relying on any report of examination by a State agency for which such a notice has been received to fulfill an examination requirement under Federal law. Permits the Council to limit the scope of a notice to: (1) a separate branch or department of a State agency which has authority to conduct examinations; or (2) a State agency's capacity to examine a particular type of depository institution. Requires the FDIC, the FHLBB, the FSLIC, and the NCUA Board to accept any report of examination made by a State agency which meets the minimum requirements as determined by the Council, unless any such entity determines that the State agency does not meet such minimum requirements and notifies the State agency of the reason for such entity's refusal to accept such agency report.