[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3129 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 3129

To allow interstate banking through acquisitions of existing banks, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 23, 1993

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

_______________________________________________________________________

                                 A BILL


 
To allow interstate banking through acquisitions of existing banks, 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 ``Interstate Bank Consolidation Act of 
1993''.

SEC. 2. CONVERSION OF BANKS TO BRANCHES.

    (a) In General.--Section 3 of the Bank Holding Company Act of 1956 
(12 U.S.C. 1842) is amended by adding at the end the following new 
subsection:
    ``(h) Interstate Combinations.--
            ``(1) In general.--
                    ``(A) Combinations authorized.--Subject to 
                paragraphs (6) and (7), on or after June 1, 1995, a 
                bank holding company having subsidiary banks located in 
                more than 1 State may combine 2 or more of such banks 
                into a single, resulting bank by means of a merger, 
                consolidation, or other transaction.
                    ``(B) Surrender of charter after combination.--On 
                the date on which a combination authorized by this 
                paragraph becomes effective, the charters of the banks 
                (other than that of the resulting bank) that have been 
                combined in accordance with subparagraph (A) into the 
                resulting bank shall be surrendered to the regulatory 
                authority that issued the charters.
                    ``(C) Effect of state prohibition of 
                combinations.--If, during the period beginning on June 
                1, 1995, and ending on the expiration of 3 years after 
                the date of enactment of the Interstate Bank 
                Consolidation Act of 1993, a combination authorized by 
                subparagraph (A) is completed in a host State that 
                elects to prohibit interstate combinations under 
                paragraph (6), the host State may require such branch 
                to be promptly converted back into a bank as the bank 
                existed prior to such combination.
                    ``(D) No combinations within state in contravention 
                of state law.--This paragraph shall not be construed as 
                authorizing the merger, consolidation, or other 
                combination of 2 or more banks which are located within 
                a State if the law of such State prohibits such 
                combination of banks located within such State.
            ``(2) Applicability.--A combination under paragraph (1) may 
        only be carried out through a merger, consolidation, or other 
        transaction that is undertaken--
                    ``(A) by a bank holding company that is adequately 
                capitalized; or
                    ``(B) subject to all other provisions of this 
                subsection, by a bank holding company that is 
                critically undercapitalized if--
                            ``(i) the transaction is approved as part 
                        of a capital restoration plan required under 
                        section 38 of the Federal Deposit Insurance 
                        Act;
                            ``(ii) such plan contains not less than 1 
                        element in addition to the transaction; and
                            ``(iii) the transaction will result in a 
                        demonstrable and material improvement in the 
                        financial condition of the bank holding 
                        company.
            ``(3) Activities of the resulting bank.--
                    ``(A) Additional branches.--Following any 
                combination under paragraph (1), the resulting bank may 
                establish, acquire, and operate additional branches at 
                any location where the resulting bank or a combined 
                bank could have established or acquired and operated a 
                branch under the applicable Federal or State law if the 
                bank had not been a party to such combination.
                    ``(B) Intrastate branching.--Except as expressly 
                provided in this subsection, no provision of this 
                subsection shall be construed as amending, repealing, 
                or superseding, either expressly or by implication, any 
                Federal or State law relating to the establishment, 
                acquisition, or operation of intrastate branches by 
                national or State banks.
                    ``(C) Conditions.--Before granting approval to an 
                application for a combination under paragraph (1), the 
                appropriate Federal banking agency shall consider each 
                bank's rating under the Community Reinvestment Act of 
                1977 and the views of the appropriate State bank 
                regulatory authorities regarding each bank's compliance 
                with applicable State community reinvestment laws.
                    ``(D) Imposition of shares tax by host states.--In 
                order to assure that an out-of-State bank contributes a 
                fair share to a host State's revenues, if any branch of 
                an out-of-State bank established pursuant to paragraph 
                (1) or subparagraph (A) of this paragraph continues in 
                operation, a proportionate amount of the value of the 
                shares of the out-of-State bank may be subject to any 
                bank shares tax levied or imposed by any host State or 
                any political subdivision of such State based upon an 
                allocation of net income, capital or net worth, and 
                other factors employed in computing such value pursuant 
                to an allocation method adopted by the host State's 
                taxing authorities, if such method does not 
                unconstitutionally discriminate against out-of-State 
                banks or bank holding companies.
            ``(4) Activities of branches.--A State bank that 
        establishes any branch in a host State in accordance with 
        paragraph (1) or (3)(A) may not conduct any activity at such 
        branch that is not permitted for banks chartered by the host 
        State.
            ``(5) Applicable law.--
                    ``(A) In general.--
                            ``(i) National bank branches.--Any branch 
                        of a national bank that is established as the 
                        result of a combination in accordance with 
                        paragraph (1) or paragraph (3)(A) shall be 
                        subject to the laws of the host State with 
                        respect to intrastate branching, consumer 
                        protection, fair lending, and community 
                        reinvestment as if the branch were a branch of 
                        a national bank the main office of which is in 
                        that State.
                            ``(ii) State bank branches.--Any branch of 
                        a State bank that is established as the result 
                        of a combination in accordance with paragraph 
                        (1) or paragraph (3)(A) shall be subject to the 
                        laws of the host State with respect to 
                        intrastate branching, consumer protection, fair 
                        lending, and community reinvestment as if the 
                        branch were a branch of a bank which is 
                        chartered under the laws of such State and has 
                        offices only in such State.
                    ``(B) Filing requirement.--
                            ``(i) In general.--A host State may require 
                        any out-of-State bank that wishes to establish 
                        a branch within the host State as a result of a 
                        combination authorized by paragraph (1) to 
                        comply with filing requirements that--
                                    ``(I) are not discriminatory in 
                                nature; and
                                    ``(II) are similar in their effect 
                                to those that are imposed on an out-of-
                                State corporation which is not engaged 
                                in the business of banking and seeks to 
                                engage in business in the host State.
                            ``(ii) Failure to comply.--The host State 
                        may preclude any bank referred to in clause (i) 
                        from establishing or operating a branch within 
                        the host State as the result of a combination 
                        authorized by paragraph (1) if that bank or its 
                        branch materially fails to comply with the 
                        filing requirements established by the host 
                        State.
            ``(6) State election to prohibit interstate combinations.--
        Paragraph (1) shall not apply to a bank which is located in a 
        State that has enacted, during the period beginning on January 
        1, 1990, and ending 3 years after the date of enactment of the 
        Interstate Bank Consolidation Act of 1993, a law that--
                    ``(A) applies equally to all national banks and 
                State banks; and
                    ``(B) expressly prohibits interstate branching or 
                the interstate combinations otherwise authorized under 
                paragraph (1) with respect to banks located in such 
                State.
            ``(7) State election to permit interstate combinations.--
                    ``(A) Combinations prior to june 1, 1995.--
                            ``(i) In general.--A combination under 
                        paragraph (1) may be undertaken before June 1, 
                        1995, if each of the States in which the banks 
                        that are to be combined into a single, 
                        resulting bank are located either has in effect 
                        on the date of enactment of this subsection or 
                        enacts prior to June 1, 1995, a law expressly 
                        permitting interstate combinations by national 
                        and State banks.
                            ``(ii) Additional conditions.--Subject to 
                        clause (iii), a State described in clause (i) 
                        may impose other conditions on a branch of a 
                        resulting bank located in that State if--
                                    ``(I) the conditions do not 
                                discriminate or have the effect of 
                                discriminating against out-of-State 
                                banks or bank holding companies; and
                                    ``(II) the imposition of the 
                                conditions is not preempted by Federal 
                                law regarding the same subject.
                            ``(iii) Conditions not applicable to 
                        combinations after may 31, 1995.--No condition 
                        otherwise permitted under clause (ii) may be 
                        imposed by any State on a branch of a bank 
                        resulting from a merger, consolidation, or 
                        other transaction authorized under paragraph 
                        (1) which is consummated after May 31, 1995.
                    ``(B) Combinations after june 1, 1993.--A State 
                that originally elected to prohibit interstate 
                combinations as described in paragraph (6) may elect at 
                any later time to permit interstate combinations 
                authorized under paragraph (1) if such State enacts a 
                law expressly permitting interstate combinations by all 
                national and State banks.
            ``(8) Limitations.--No provision of paragraph (1) shall be 
        construed as affecting the applicability of any Federal or 
        State antitrust law that does not discriminate against, and 
        does not have the effect of discriminating against, out-of-
        State banks or bank holding companies.
            ``(9) Reservation of certain rights to states.--No 
        provision of this subsection shall be construed as limiting in 
        any way the right of a State to--
                    ``(A) determine the authority of State banks 
                chartered by that State to establish and maintain 
                branches; or
                    ``(B) supervise, regulate, and examine State banks 
                chartered by that State.
            ``(10) Definitions.--For purposes of this subsection--
                    ``(A) Adequately capitalized.--The term `adequately 
                capitalized' has the meaning given to such term by 
                section 38 of the Federal Deposit Insurance Act.
                    ``(B) Appropriate federal banking agency.--The term 
                `appropriate Federal banking agency' has the meaning 
                given to such term in section 3 of the Federal Deposit 
                Insurance Act.
                    ``(C) Combined bank.--The term `combined bank' 
                means any bank participating in a combination under 
                paragraph (1), other than a resulting bank.
                    ``(D) Critically undercapitalized.--The term 
                `critically undercapitalized' has the meaning given to 
                such term in section 38 of the Federal Deposit 
                Insurance Act.
                    ``(E) Host state.--The term `host State' means the 
                State in which a bank establishes or maintains a branch 
                other than--
                            ``(i) in the case of a State bank, the 
                        State under the laws of which the bank is 
                        chartered; and
                            ``(ii) in the case of a national bank, the 
                        State in which the bank has its main office and 
                        is engaging in the business of banking.
                    ``(F) Insured depository institution.--The term 
                `insured depository institution' has the meaning given 
                to such term in section 3 of the Federal Deposit 
                Insurance Act.
                    ``(G) Out-of-state bank.--The term `out-of State 
                bank', when used in connection with a reference to a 
                State, means--
                            ``(i) in the case of a State bank, a bank 
                        that is not chartered under the laws of such 
                        State; and
                            ``(ii) in the case of a national bank, a 
                        bank which does not have its main office in 
                        such State.
                    ``(H) Resulting bank.--The term `resulting bank' 
                means a banking subsidiary of a bank holding company 
                that has resulted from a transaction under paragraph 
                (1) involving the combination of 2 or more subsidiary 
                banks of the bank holding company located in 2 or more 
                States.
                    ``(I) State bank.--The term `State bank' has the 
                meaning given to such term in section 3(a) of the 
                Federal Deposit Insurance Act.
            ``(11) Rule for determining domicile of a bank.--For 
        purposes of this subsection, a bank shall be deemed to be 
        located--
                    ``(A) in the case of a State bank, in the State in 
                which the bank is chartered; and
                    ``(B) in the case of a national bank, the State in 
                which the bank's main office is located.''.
    (b) Taxation.--
            (1) State franchise or other nonproperty taxes.--The 
        amendments made by this section shall not be construed as, in 
        any way, affecting, limiting, impairing, or precluding the 
        right of any State or political subdivision of a State to 
        impose a nondiscriminatory franchise tax or other nonproperty 
        tax instead of a franchise tax as provided by section 3124 of 
        title 31, United States Code.
            (2) State methods of taxation.--No provision of this 
        section shall be construed as--
                    (A) prohibiting or restricting any State or 
                political subdivision of a State from applying any tax 
                or method of taxation to a State bank or a national 
                bank or any branch of any such bank when such tax or 
                tax method is otherwise permitted by or permissible 
                under either the Constitution of the United States or 
                any other Federal law; or
                    (B) allowing any State or political subdivision of 
                a State to apply any tax or method of taxation to a 
                State bank or national bank or branch thereof when such 
                tax or tax method is otherwise prohibited or restricted 
                by either the Constitution of the United States or any 
                other Federal law.
    (c) Conforming Amendment to the National Bank Act.--Section 5155(c) 
of the Revised Statutes (12 U.S.C. 36(c)) is amended in the first 
sentence by striking ``A national banking association'' and inserting 
``Except as provided in section 3(h) of the Bank Holding Company Act of 
1956, a national banking association''.

SEC. 3. AMENDMENTS TO FEDERAL DEPOSIT INSURANCE ACT AND THE ACT 
              ENTITLED ``AN ACT TO PROVIDE FOR THE CONSOLIDATION OF 
              NATIONAL BANKING ASSOCIATIONS''.

    (a) Federal Deposit Insurance Act Amendments.--Section 18(d) of the 
Federal Deposit Insurance Act (12 U.S.C. 1828(d)) is amended--
            (1) in the first sentence of paragraph (1), by striking 
        ``No State'' and inserting ``Except as provided in section 3(h) 
        of the Bank Holding Company Act of 1956, no State'';
            (2) by adding at the end the following new paragraphs:
            ``(3) Coordination of examination authority.--
                    ``(A) In general.--The State bank supervisor of a 
                host State may examine a branch of an out-of-State 
                State bank that resulted from a combination under 
                section 3(h) of the Bank Holding Company Act of 1956 of 
                such bank with a bank in the host State for the purpose 
                of determining compliance with host State laws 
                regarding banking, taxation, community reinvestment, 
                fair lending, consumer protection, and permissible 
                activities and to ensure that the activities of the 
                branch--
                            ``(i) are conducted in a manner that is 
                        consistent with sound banking principles; and
                            ``(ii) do not constitute a serious risk to 
                        the safety and sound operation of the branch.
                    ``(B) Enforcement.--If the State bank supervisor of 
                a host State determines that there has been a violation 
                of the law of the host State concerning the activities 
                being conducted by the branch of a State bank or that 
                such branch is being operated in a manner not 
                consistent with sound banking principles or in an 
                unsafe and unsound manner, the State bank supervisor 
                may undertake such enforcement actions and proceedings 
                as would be permitted under the law of the host State 
                if the branch in question were a State bank chartered 
                by such State.
                    ``(C) Cooperative agreement.--The State bank 
                supervisors of 2 or more States may enter into 
                cooperative agreements to facilitate State regulatory 
                supervision of State banks, including cooperative 
                agreements relating to the coordination of examinations 
                and joint participation in examinations.
                    ``(D) Federal regulatory authority.--
                            ``(i) Interstate agreements.--No provision 
                        of this subsection shall be construed as 
                        limiting in any way the authority of the 
                        appropriate Federal banking agency to examine 
                        any bank or branch of a bank for which the 
                        agency is the appropriate Federal banking 
                        agency.
                            ``(ii) Review of interstate agreements.--If 
                        the appropriate Federal banking agency 
                        determines that the States have failed to reach 
                        an agreement under subparagraph (C), or that 
                        such an agreement fails to adequately protect 
                        the Federal Deposit Insurance Fund, the 
                        appropriate Federal banking agency shall not 
                        defer to State examinations of the out-of-State 
                        branches.
            ``(4) Definitions.--For purposes of this subsection--
                    ``(A) Host state.--The term `host State' means the 
                State in which a State bank establishes or maintains a 
                branch other than the State under the laws of which the 
                bank is chartered.
                    ``(B) Out-of-state bank.--The term `out-of State 
                bank', when used in connection with a reference to a 
                State, means--
                            ``(i) in the case of a State bank, a bank 
                        that is not chartered under the laws of such 
                        State; and
                            ``(ii) in the case of a national bank, a 
                        bank which does not have its main office in 
                        such State.''.
    (b) National Banking Associations.--The Act entitled ``An Act To 
provide for the consolidation of national banking associations'' and 
approved November 7, 1918 (12 U.S.C. 215 et seq.) is amended--
            (1) in the 1st sentence of subsection (a) of the 1st 
        section, by inserting ``, or in any State in which a bank 
        involved in an interstate acquisition or interstate combination 
        authorized by section 3(h) of the Bank Holding Company Act of 
        1956 is located,'' after ``located in the same State'';
            (2) by inserting before the period at the end of subsection 
        (d) of the 1st section ``, except that the applicability of 
        State law to an interstate acquisition or interstate 
        combination undertaken in accordance with section 3(h) of the 
        Bank Holding Company Act of 1956 shall be determined in 
        accordance with the provisions of such sections'';
            (3) in the 1st sentence of section 2(a), by inserting ``or 
        in any State in which a bank involved in an interstate 
        combination authorized by section 3(h) of the Bank Holding 
        Company Act of 1956 is located,'' after ``located within the 
        same State,'';
            (4) in the 6th sentence of section 2(d), by inserting 
        before the period ``, except that the applicability of State 
        law to the transaction undertaken pursuant to section 3(h) of 
        the Bank Holding Company Act of 1956 shall be determined in 
        accordance with the provisions of such section 3(h)''; and
            (5) in paragraph (4) of section 3, by inserting ``or within 
        any State in which a bank involved in an interstate combination 
        authorized by section 3(h) of the Bank Holding Company Act of 
        1956 is located,'' after ``within the same State,''.

SEC. 4. COMMUNITY REINVESTMENT ACT EVALUATION OF BANKS WITH INTERSTATE 
              BRANCHES.

    (a) In General.--Section 807 of the Community Reinvestment Act of 
1977 (12 U.S.C. 2906) is amended by adding at the end the following 
subsections:
    ``(d) Institutions With Interstate Branches.--
            ``(1) State-by-state evaluation.--In the case of a 
        regulated financial institution that maintains domestic 
        branches in 2 or more States, the appropriate Federal financial 
        supervisory agency shall prepare--
                    ``(A) a written evaluation of the entire 
                institution's record of performance under this title in 
                accordance with the requirements of subsections (a), 
                (b), and (c); and
                    ``(B) for each State in which the institution 
                maintains 1 or more domestic branches, a separate 
                written evaluation of the institution's record of 
                performance within such State under this title, in 
                accordance with the requirements of subsections (a), 
                (b), and (c).
            ``(2) Multistate metropolitan areas.--
                    ``(A) In general.--In the case of a regulated 
                financial institution that maintains domestic branches 
                in 2 or more States within a multistate metropolitan 
                area, the appropriate Federal financial supervisory 
                agency may prepare a separate written evaluation of the 
                institution's record of performance within such 
                metropolitan area under this title, in accordance with 
                the requirements of subsections (a), (b), and (c).
                    ``(B) Adjustment of scope of evaluation.--If an 
                appropriate Federal financial institution supervisory 
                agency prepares a written evaluation pursuant to 
                subparagraph (A), the scope of the written evaluation 
                required under paragraph (1)(B) shall be adjusted 
                accordingly.
            ``(3) Content of state level evaluation.--A written 
        evaluation prepared pursuant to paragraph (1)(B) of this 
        subsection shall--
                    ``(A) present the information required by 
                subparagraphs (A) and (B) of subsection (b)(1) of this 
                section separately for each metropolitan area in which 
                the institution maintains 1 or more domestic branch 
                offices and separately for the remainder of the 
                nonmetropolitan area of the State if the institution 
                maintains 1 or more domestic branch offices in such 
                area; and
                    ``(B) describe how the Federal financial 
                supervisory agency has performed the examination of the 
                institution, including a list of the individual 
                branches examined.
            ``(4) Definitions.--For purposes of this section:
                    ``(A) Domestic branch.--The term `domestic branch' 
                means any branch office or other facility of a 
                regulated financial institution which accepts deposits 
                in any State.
                    ``(B) Metropolitan area.--The term `metropolitan 
                area' means--
                            ``(i) any primary metropolitan statistical 
                        area, metropolitan statistical area, or 
                        consolidated metropolitan statistical area as 
                        defined by the Director of the Office of 
                        Management and Budget, with a population of 
                        250,000 or more; and
                            ``(ii) any other area identified by the 
                        appropriate Federal financial supervisory 
                        agency.
                    ``(C) State.--The term `State' has the meaning 
                given to such term in section 3(a) of the Federal 
                Deposit Insurance Act.''.
    (b) Separate Presentation.--Section 807(b) of the Community 
Reinvestment Act of 1977 (12 U.S.C. 2906(b)(1)) is amended by adding at 
the end the following new paragraph:
            ``(3) Breakdown by metropolitan areas.--The information 
        required to be included in the public section of the written 
        evaluation pursuant to subparagraphs (A) and (B) of paragraph 
        (1) shall be presented separately for each metropolitan area in 
        which an insured depository institution maintains 1 or more 
        domestic branch offices.''.

SEC. 5. STATE TAX COMPLIANCE.

    Section 5240 of the Revised Statutes is amended by inserting after 
subparagraph (B) (12 U.S.C. 484) following the 5th undesignated 
paragraph the following new subparagraph:
            ``(C) Notwithstanding subparagraph (A), lawfully authorized 
        auditors, examiners, and other representatives acting on behalf 
        of any State agency charged with the administration and 
        collection of taxes imposed by such State or any political 
        subdivision of such State, may, to the extent necessary, review 
        the books, records, and accounts of a Federal depository 
        institution (as defined in section 3(c)(4) of the Federal 
        Deposit Insurance Act) which has its main office or any branch 
        located in that State to determine any State or local tax 
        liability and to ensure compliance with the tax laws of the 
        State or political subdivision.''.

SEC. 6. USE OF NAMES IN HOST STATE BY BANK HOLDING COMPANIES.

    Section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842) 
is amended by inserting after subsection (h) (as added by section 2 of 
this Act) the following new subsection:
    ``(i) Use of Names in Host State.--
            ``(1) In general.--A bank holding company that seeks, 
        directly or indirectly, to consolidate banks under subsection 
        (h) shall provide the Board with the name or names under which 
        the branches of the resulting bank will operate in the host 
        State of each such branch.
            ``(2) Prohibition against same or similar names.--A bank 
        holding company may not operate a branch of a bank in a host 
        State if the proposed name of the bank is--
                    ``(A) identical or deceptively similar to a name 
                being used by an existing bank or bank holding company 
                in the host State; or
                    ``(B) is likely to cause the public to be confused, 
                deceived, or mistaken, due to a similarity or identity 
                of names.
            ``(3) Subsequent use of same or similar name.--
                    ``(A) In general.--Upon application by any person 
                adversely affected, the Board shall revoke permission 
                of a bank holding company to operate a branch in a host 
                State if--
                            ``(i) the bank holding company uses or 
                        changes the name of, or uses an additional name 
                        for, any branch of any bank subsidiary of such 
                        company in the host State; and
                            ``(ii) the new or additional name is 
                        described in subparagraph (A) or (B) of 
                        paragraph (2).
                    ``(B) Other remedies unaffected.--Subparagraph (A) 
                shall not be construed as precluding any adversely 
                affected person from pursuing any available legal or 
                administrative remedies.
            ``(4) Host state defined.--For purposes of this subsection, 
        the term `host State' means any State in which a bank holding 
        company operates a branch of a bank which resulted from a 
        consolidation under subsection (h) other than the State in 
        which the operations of the bank holding company's banking 
        subsidiaries were principally conducted on the later of July 1, 
        1996, or the date on which the company became a bank holding 
        company.''.

                                 <all>

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