[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2955 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2955

  To stimulate the economy by encouraging bank and thrift institution 
   lending to small- and medium-sized businesses and to consumers by 
reducing and standardizing the leverage limit capital standard for safe 
       and sound depository institutions, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 6, 1993

 Mr. Kennedy introduced the following bill; which was referred to the 
            Committee on Banking, Finance and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
  To stimulate the economy by encouraging bank and thrift institution 
   lending to small- and medium-sized businesses and to consumers by 
reducing and standardizing the leverage limit capital standard for safe 
       and sound depository institutions, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Business and Consumer Lending 
Stimulus Act''.

SEC. 2. REDUCTION AND STANDARDIZATION OF LEVERAGE LIMIT CAPITAL 
              STANDARD APPLICABLE TO QUALIFIED DEPOSITORY INSTITUTIONS.

    (a) In General.--In the case of any adequately capitalized insured 
depository institution, the appropriate Federal banking agency may not 
impose or enforce, during the 18-month period beginning on the date of 
the enactment of this Act, any leverage limit with respect to such 
depository institution which requires a ratio of tangible equity to 
total assets greater than 3 percent.
    (b) Exception.--Subsection (a) shall not apply with respect to an 
insured depository institution which the appropriate Federal banking 
agency determines--
            (1) lacks sufficient loan loss reserves; or
            (2) is operating in an unsafe or unsound manner.
    (c) Definitions.--For purposes of this section--
            (1) Adequately capitalized.--Subject to subsection (d), the 
        term ``adequately capitalized'' has the meaning given to such 
        term in section 38(b)(1)(B) of the Federal Deposit Insurance 
        Act, as implemented by each appropriate Federal banking agency 
        by regulation.
            (2) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency'' has the meaning given to 
        such term in section 3(q) of the Federal Deposit Insurance Act.
            (3) Insured depository institution.--The term ``insured 
        depository institution'' has the meaning given such term in 
        section 3(c)(2) of the Federal Deposit Insurance Act.
            (4) Leverage limit.--The term ``leverage limit'' means the 
        capital standard relating to the minimum ratio of tangible 
        capital to total assets established by the appropriate Federal 
        banking agency pursuant to section 38(c)(1)(A)(i) of the 
        Federal Deposit Insurance Act.
    (d) Determination of Adequacy of Capital.--Any determination by any 
appropriate Federal banking agency with regard to the capital adequacy 
of any insured depository institution for purposes of this Act shall be 
made without regard to any requirement in section 38 of the Federal 
Deposit Insurance Act, or any regulation prescribed under such section, 
relating to a leverage limit.

SEC. 3. REGULATION OF REAL ESTATE LENDING.

    Subsection (o) of section 18 of the Federal Deposit Insurance Act 
(12 U.S.C. 1828(o)) (as added by section 304 of the Federal Insurance 
Corporation Improvement Act of 1991) is amended--
            (1) by redesignating paragraph (4) as paragraph (5); and
            (2) by inserting new paragraph (4) as follows:
            ``(4) Consideration of impact of standards.--In prescribing 
        standards under paragraph (1), the appropriate Federal banking 
        agencies shall, consistent with safety and soundness,--
                    ``(A) consider the impact that such standards have 
                on the availability of credit for small business, 
                residential, and agricultural purposes, and on low- and 
                moderate-income communities; and
                    ``(B) minimize the negative impact that these 
                standards have on the availability of credit for such 
                purposes and in such areas.''.

SEC. 4. REAL ESTATE APPRAISAL AMENDMENT.

    Section 1122 of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 3351) is amended--
            (1) by redesignating subsections (b), (c), (d), and (e) as 
        subsections (c), (d), (e), and (f), respectively;
            (2) by adding the following new subsection (b):
    ``(b) Reciprocity.--The Appraisal Subcommittee shall encourage the 
States to develop reciprocity agreements among the States so as to 
readily authorize appraisers licensed or certified in 1 State and in 
good standing with such State's appraiser certifying or licensing 
agency to perform appraisals in any other State to the same extent as 
appraisers certified or licensed by such other State.''; and
            (3) by adding at the end of subsection (a)(3) the following 
        new sentence: ``A State appraiser certifying or licensing 
        agency shall not impose excessive fees or burdensome 
        requirements for temporary practice under this subsection, as 
        determined by the Appraisal Subcommittee.''.

SEC. 5. REPORT ON CAPITAL STANDARDS AND THEIR IMPACT ON THE ECONOMY.

    (a) Study.--
            (1) In general.--Before the end of the 90-day period 
        beginning on the date of the enactment of this Act, the 
        Secretary of the Treasury, after consultation with the Federal 
        banking agencies, shall report to the Committee on Banking, 
        Finance and Urban Affairs of the House of Representatives and 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate on the effect that the implementation of risk based 
        capital standards, including the Basle international capital 
        standards, is having on--
                    (A) the safety and soundness of insured depository 
                institutions;
                    (B) the availability of credit, particularly to 
                individuals and small businesses; and
                    (C) economic growth.
            (2) Recommendations.--The report shall contain any 
        recommendations with respect to capital standards that the 
        Secretary of the Treasury may determine to be appropriate.
    (b) Definitions.--For purposes of this section, the terms ``Federal 
banking agency'' and ``insured depository institution'' have the same 
meanings as in section 3 of the Federal Deposit Insurance Act.

SEC. 6. REGULATORY APPEALS PROCESS.

    (a) In General.--Before the end of the 180-day period beginning on 
the date of the enactment of this Act, each appropriate Federal banking 
agency and the National Credit Union Administration shall establish an 
independent appellate process within the agency which shall be 
responsible for reviewing material supervisory determinations made at 
insured depository institutions or credit unions supervised by the 
agency.
    (b) Review Process.--In establishing the independent appellate 
process required under subsection (a), each agency referred to in such 
subsection shall take such action as may be appropriate to ensure 
that--
            (1) any appeal of a supervisory determination from any 
        insured depository institution or credit union, or any officer, 
        director, employee or other representative of any insured 
        depository institution or credit union, be heard and decided 
        expeditiously;
            (2) appropriate safeguards exist for protecting the 
        appellant from retaliation by agency examiners; and
            (3) the ruling agency officer have the authority, where 
        appropriate and as justice so requires, to stay the supervisory 
        determination pending completion of the appellate process.
    (c) Appeals by Borrowers.--
            (1) In general.--The appeals process established pursuant 
        to subsection (a) shall provide for an appeal of the 
        cancellation of a loan, a reduction in or the cancellation of a 
        line of credit, or a change in any terms or condition of a loan 
        or other extension of credit which is substantially adverse to 
        the borrower or recipient by any borrower or recipient of 
        credit from an insured depository institution who was in full 
        compliance with the terms of the loan or extension of credit at 
        the time of such action.
            (2) Agency request to lender or creditor.--In reviewing any 
        appeal, the appropriate Federal banking agency may only request 
        a lender or other creditor to state the reasons for, or a 
        reconsideration of, the decision to take any action described 
        in paragraph (1).
    (d) Comment Period.--Each agency referred to in subsection (a) 
shall provide public notice and opportunity for comment on proposed 
guidelines for an appellate process not later than 90 days after 
enactment of this Act.
    (e) Definitions.--For purposes of this section--
            (1) Agency.--The term ``agency'' means the appropriate 
        Federal banking agency and the National Credit Union 
        Administration.
            (2) Insured depository institution; appropriate federal 
        banking agency.--The terms ``insured depository institution'' 
        and ``appropriate Federal banking agency'' have the meanings 
        given to such terms in section 3 of the Federal Deposit 
        Insurance Act.
            (3) Material supervisory determination.--The term 
        ``material supervisory determination'' includes determinations 
        relating to ratings on examinations of insured depository 
        institutions, the adequacy of loan loss reserve provisions by 
        such institutions, and loan classifications on loans 
        significant to the institution.
            (4) Small business.--The term ``small business'' has the 
        meaning given to such term by the Administrator of the Small 
        Business Administration.

SEC. 7. STERILE RESERVES STUDIES.

    (a) Federal Reserve Study.--Before the end of the 90-day period 
beginning on the date of the enactment of this Act, the Board of 
Governors of the Federal Reserve System, in consultation with the 
Federal Deposit Insurance Corporation, shall study and report to 
Congress on--
            (1) the necessity, for monetary policy purposes, of 
        continuing to require insured depository institutions to 
        maintain sterile reserves;
            (2) the appropriateness of paying insured depository 
        institutions with a market rate of interest on sterile 
        reserves, or in the alternative, providing payment of this 
        interest into the appropriate deposit insurance fund;
            (3) the monetary impact that the failure to pay interest on 
        sterile reserves has had on insured depository institutions, 
        including an estimate of the total dollar amount of interest 
        and potential income lost by insured depository institutions;
            (4) the degree to which the failure to pay interest on 
        sterile reserves has impacted upon economic growth; and
            (5) the impact that failure to pay interest on sterile 
        reserves has had on the ability of the banking industry to 
        compete with nonbanking providers of financial services and 
        with foreign banks.
    (b) Budgetary Impact Study.--No later than 90 days after enactment 
of this Act, the Office of Management and Budget and the Congressional 
Budget Office, in consultation with the Senate and House Committees on 
the Budget, shall jointly study and report to Congress on the budgetary 
impact of--
            (1) paying insured depository institutions a market rate of 
        interest on sterile reserves; and
            (2) paying such interest into the respective deposit 
        insurance funds.
    (c) Definition.--For purposes of this section, the term ``insured 
depository institution'' has the same meaning as in section 3 of the 
Federal Deposit Insurance Act.

SEC. 8. CREDIT CARD ACCOUNTS RECEIVABLE SALES.

    Section 11(e) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(e)) is amended by adding at the end the following new paragraphs:
            ``(14) Selling credit card accounts receivable.--
                    ``(A) Notification required.--An undercapitalized 
                insured depository institution (as defined in section 
                38) shall notify the Corporation in writing before 
                entering into an agreement to sell credit card accounts 
                receivable.
                    ``(B) Waiver by corporation.--The Corporation may 
                at any time, in the Corporation's sole discretion and 
                upon such terms as the Corporation may prescribe, waive 
                the Corporation's right to repudiate an agreement to 
                sell credit card accounts receivable if the 
                Corporation--
                            ``(i) determines that the waiver is in the 
                        best interests of the affected deposit 
                        insurance fund; and
                            ``(ii) provides a written waiver to the 
                        selling institution.
                    ``(C) Effect of waiver on successors.--
                            ``(i) In general.--If, under subparagraph 
                        (B), the Corporation has waived its right to 
                        repudiate an agreement to sell credit card 
                        accounts receivable--
                                    ``(I) any provision of the 
                                agreement that restricts solicitation 
                                of a credit card customer of the 
                                selling institution, or the use of a 
                                credit card customer list of the 
                                institution, shall bind any receiver or 
                                conservator of the institution; and
                                    ``(II) the Corporation shall 
                                require any acquirer of the selling 
                                institution, or of substantially all of 
                                the selling institution's assets or 
                                liabilities, to agree to be bound by a 
                                provision described in subclause (I) as 
                                if the acquirer were the selling 
                                institution.
                            ``(ii) Exception.--Clause (i)(II) shall not 
                        be applied so as to--
                                    ``(I) restrict the acquirer's 
                                authority to offer any product or 
                                service to any person identified 
                                without using a list of the selling 
                                institution's customers in violation of 
                                the agreement;
                                    ``(II) require the acquirer to 
                                restrict any preexisting relationship 
                                between the acquirer and a customer; or
                                    ``(III) apply to any transaction in 
                                which the acquirer acquires only 
                                insured deposits.
                    ``(D) Waiver not actionable.--The Corporation shall 
                not be liable, in any capacity, to any person for 
                damages resulting from waiving or failing to waive the 
                Corporation's right under this section to repudiate any 
                contract or lease, including an agreement to sell 
                credit card accounts receivable. No court may issue an 
                order affecting any such waiver or failure to waive.
                    ``(E) Other authority not affected.--This paragraph 
                shall not be construed as limiting any other authority 
                of the Corporation to waive the Corporation's right 
                under this section to repudiate an agreement or lease.
            ``(15) Certain credit card customer lists protected.--
                    ``(A) In general.--If any insured depository 
                institution sells credit card accounts receivable under 
                an agreement negotiated at arm's length that provides 
                for the sale of the institution's credit card customer 
                list, the Corporation shall prohibit any party to a 
                transaction with respect to the institution under this 
                section or section 13 from using the list except as 
                permitted under the agreement.
                    ``(B) Fraudulent transactions excluded.--
                Subparagraph (A) shall not be construed as limiting the 
                Corporation's authority to repudiate any agreement 
                entered into with the intent to hinder, delay, or 
                defraud the institution, the institution's creditors, 
                or the Corporation.''.

SEC. 9. COORDINATED EXAMINATIONS.

    Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 
1820(d)) (as amended by section 301 of this Act) is amended by adding 
at the end the following new paragraph:
            ``(7) Coordinated examinations.--Each appropriate Federal 
        banking agency shall, to the extent practicable--
                    ``(A) coordinate all examinations to be conducted 
                by that agency at an insured depository institution; 
                and
                    ``(B) work with other appropriate Federal banking 
                agencies and appropriate State bank supervisors to 
                coordinate examinations to be conducted at an insured 
                depository institution,
        so as to minimize the disruptive effects of such examinations 
        on the operations of the institution.''.

SEC. 10. STREAMLINED LENDING PROCESS FOR CONSUMER BENEFIT.

    (a) Federal Reserve Study.--Before the end of the 1-year period 
beginning on the date of the enactment of this Act, the Board of 
Governors of the Federal Reserve System and the Secretary of Housing 
and Urban Development shall jointly conduct a study and report to 
Congress on ways to streamline the credit-granting process.
    (b) Focus.--In carrying out subsection (a), the Board of Governors 
of the Federal Reserve System and the Secretary of Housing and Urban 
Development shall--
            (1) identify ways to streamline the home mortgage, small 
        business and consumer lending processes so as to--
                    (A) reduce consumer inconvenience, cost and time 
                delays; and
                    (B) minimize cost and burdens on insured depository 
                institutions and credit unions without compromising the 
                effectiveness of any provision of law relating to 
                consumer protection;
            (2) take such regulatory action, as appropriate, to meet 
        the objectives of paragraph (1); and
            (3) provide Congress with legislative recommendations on 
        changes necessary to carry out the purposes of this section.
    (c) Comment.--In carrying out the objectives of this section, the 
Board shall solicit comments from other Federal banking agencies, 
consumer groups, insured depository institutions, credit unions, and 
other interested parties.
    (d) Definition.--For purposes of this section, the term ``insured 
depository institution'' has the meaning given to such term in section 
3 of the Federal Deposit Insurance Act.

SEC. 11. REPORTING ON LOANS TO SMALL BUSINESSES, MINORITY-OWNED 
              BUSINESSES, AND START-UP ENTERPRISES.

    Section 122 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 1817 nt.) is amended by adding at 
the end the following new subsection:
    ``(d) Reports on Loans to Small Businesses, Minority-Owned 
Businesses, and Start-Up Businesses.--The information required to be 
submitted by insured depository institutions under subsection (a) shall 
include the following for the period covered by the report:
            ``(1) The total number of loans the principal on which does 
        not exceed $1,000,000.
            ``(2) The total number of loans to small businesses (as 
        defined in regulations prescribed by the Administrator of the 
        Small Business Administration).
            ``(3) The total number of loans to minority-owned 
        businesses (as defined in section 21A(r)(4)(A) of the Federal 
        Home Loan Bank Act).
            ``(4) The total number of loans to businesses which have 
        been incorporated, or otherwise been in existence, for less 
        than 2 years.''.

SEC. 12. ACCELERATING THE EFFECTIVE DATE OF THE SISTER THRIFT EXEMPTION 
              FOR WELL CAPITALIZED INSTITUTIONS.

    Section 11(a)(2) of the Home Owners' Loan Act (12 U.S.C. 
1468(a)(2)) is amended by adding at the end the following new 
subparagraph:
            ``(C) Transition rule for well capitalized savings 
        associations.--
                    ``(i) In general.--Effective on and after the date 
                of enactment of this bill, every savings association 
                that is well capitalized (as defined in section 38 of 
                the Federal Deposit Insurance Act) without including 
                goodwill in calculating core capital shall be treated 
                as a bank for purposes of section 23A(d)(1) and section 
                23B of the Federal Reserve Act.
                    ``(ii) Liability of commonly controlled depository 
                institutions.--Any savings association that engages 
                under clause (i) in a transaction that would not 
                otherwise be permissible under this subsection, and any 
                affiliated insured bank that is commonly controlled (as 
                defined in section 5(e)(9) of the Federal Deposit 
                Insurance Act), shall be subject to subsection (e) of 
                section 5 of the Federal Deposit Insurance Act as if 
                paragraph (6) of that subsection did not apply.''.

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HR 2955 IH----2