[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3474 Engrossed Amendment Senate (EAS)]

103d CONGRESS

  2d Session

                               H. R. 3474

_______________________________________________________________________

                               AMENDMENT
  
  
  
  
  
  
  
  

                  In the Senate of the United States,

                         March 17 (legislative day, February 22), 1994.
      Resolved, That the bill from the House of Representatives (H.R. 
3474) entitled ``An Act to reduce administrative requirements for 
insured depository institutions to the extent consistent with safe and 
sound banking practices, to facilitate the establishment of community 
development financial institutions, and for other purposes'', do pass 
with the following

                               AMENDMENT:

            Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Community 
Development, Credit Enhancement, and Regulatory Improvement Act of 
1994''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

         TITLE I--COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION

 Subtitle A--Community Development Banking and Financial Institutions 
                                  Act

Sec. 101. Short title.
Sec. 102. Findings and purposes.
Sec. 103. Definitions.
Sec. 104. Establishment of national fund for community development 
                            banking.
Sec. 105. Applications for assistance.
Sec. 106. Community partnerships.
Sec. 107. Selection of institutions.
Sec. 108. Assistance provided by the Fund.
Sec. 109. Community development training.
Sec. 110. Encouragement of private entities.
Sec. 111. Clearinghouse function.
Sec. 112. Recordkeeping, reports, and audits.
Sec. 113. Investment of receipts and proceeds.
Sec. 114. Inspector General.
Sec. 115. Capitalization assistance to enhance liquidity.
Sec. 116. Community development revolving loan fund for credit unions.
Sec. 117. Regulations.
Sec. 118. Authorization of appropriations.

            Subtitle B--Home Ownership and Equity Protection

Sec. 151. Consumer protections for high cost mortgages.
Sec. 152. Civil liability.
Sec. 153. Reverse mortgage disclosure.
Sec. 154. Regulations; effective date.

               TITLE II--SMALL BUSINESS CAPITAL FORMATION

             Subtitle A--Small Business Loan Securitization

Sec. 201. Short title.
Sec. 202. Small business related security.
Sec. 203. Applicability of margin requirements.
Sec. 204. Borrowing in the course of business.
Sec. 205. Small business related securities as collateral.
Sec. 206. Investment by depository institutions.
Sec. 207. Preemption of State law.
Sec. 208. Insured depository institution capital requirements for 
                            transfers of small business obligations.
Sec. 209. Transactions in small business related securities by employee 
                            benefit plans.
Sec. 210. Sense of the Senate on taxation of small business loan 
                            investment conduits.

             Subtitle B--Small Business Capital Enhancement

Sec. 251. Findings and purposes.
Sec. 252. Definitions.
Sec. 253. Approving States for participation.
Sec. 254. Participation agreements.
Sec. 255. Terms of participation agreements.
Sec. 256. Reports.
Sec. 257. Reimbursement by the Secretary.
Sec. 258. Reimbursement to the Secretary.
Sec. 259. Regulations.
Sec. 260. Authorization of appropriations.

       TITLE III--PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT

Sec. 301. Incorporated definitions.
Sec. 302. Administrative consideration of burden with new regulations.
Sec. 303. Streamlining of regulatory requirements.
Sec. 304. Elimination of duplicative filings.
Sec. 305. Coordinated and unified examinations.
Sec. 306. Eighteen-month examination rule for certain small 
                            institutions.
Sec. 307. Call report simplification.
Sec. 308. Repeal of publication requirements.
Sec. 309. Regulatory appeals process.
Sec. 310. Electronic filing of currency transaction reports.
Sec. 311. Bank Secrecy Act publication requirements.
Sec. 312. Exemption of business loans from Real Estate Settlement 
                            Procedures Act requirements.
Sec. 313. Flexibility in choosing boards of directors.
Sec. 314. Holding company audit requirements.
Sec. 315. State regulation of real estate appraisals.
Sec. 316. Acceleration of effective date for interaffiliate 
                            transactions.
Sec. 317. Collateralization of public deposits.
Sec. 318. Elimination of stock valuation provision.
Sec. 319. Expedited procedures for forming a bank holding company.
Sec. 320. Exemption of certain holding company formations from 
                            registration under the Securities Act of 
                            1933.
Sec. 321. Reduction of post-approval waiting period for bank holding 
                            company acquisitions.
Sec. 322. Reduction of post-approval waiting period for bank mergers.
Sec. 323. Bankers' banks.
Sec. 324. Bank Service Corporation Act amendment.
Sec. 325. Merger transaction reports.
Sec. 326. Credit card accounts receivable sales.
Sec. 327. Limiting potential liability on foreign accounts.
Sec. 328. Amendments to outdated dividend provisions.
Sec. 329. Elimination of duplicative disclosures for home equity loans.
Sec. 330. Report on capital standards and their impact on the economy.
Sec. 331. Studies on the impact of the payment of interest on reserves.
Sec. 332. Study and report on streamlined lending process for consumer 
                            benefit.
Sec. 333. Repeal of outdated charter requirement for national banks.
Sec. 334. Inclusion of Comptroller of the Currency; clarification of 
                            revised statutes.
Sec. 335. Commemoration of 1995 Special Olympic World Games.
Sec. 336. Exemption for business accounts.
Sec. 337. Board discretion regarding check-related fraud.
Sec. 338. Civil liability under truth in savings.
Sec. 339. Insider lending.
Sec. 340. Revisions of standards.
Sec. 341. Alternative rules for radio advertising of consumer leases.
Sec. 342. Deposit broker registration.
Sec. 343. Extension of management interlocks grandfather clause.
Sec. 344. Clarification of provision relating to administrative 
                            autonomy.
Sec. 345. Consumer surveys and report.
Sec. 346. Simplified disclosure for existing depositors.
Sec. 347. Commercial mortgage related securities.
Sec. 348. Offset of costs of certain programs.

                       TITLE IV--MONEY LAUNDERING

Sec. 401. Short title.
Sec. 402. Reform of CTR exemption requirements to reduce number and 
                            size of reports consistent with effective 
                            law enforcement.
Sec. 403. Single designee for reporting of suspicious transactions.
Sec. 404. Improvement of identification of money laundering schemes.
Sec. 405. Negotiable instruments drawn on foreign banks subject to 
                            recordkeeping and reporting requirements.
Sec. 406. Imposition of civil money penalties by appropriate Federal 
                            banking agencies.
Sec. 407. Uniform State licensing and regulation of check cashing, 
                            currency exchange, and money transmitting 
                            businesses.
Sec. 408. Registration of money transmitting businesses to promote 
                            effective law enforcement.
Sec. 409. Criminal and civil penalty for structuring domestic and 
                            international transactions.
Sec. 410. GAO study of chasiers' checks.

               TITLE V--FAIR TRADE IN FINANCIAL SERVICES

Sec. 501. Short title.
Sec. 502. Effectuating the principle of national treatment for banking 
                            organizations.
Sec. 503. Effectuating the principle of national treatment for 
                            securities organizations.
Sec. 504. Effectuating the principle of national treatment for insurers 
                            and reinsurers.
Sec. 505. Financial interdependence study.
Sec. 506. Federal Reserve report on the Foreign Bank Supervision 
                            Enhancement Act of 1991.
Sec. 507. Conforming amendments.

               TITLE VI--NATIONAL FLOOD INSURANCE REFORM

Sec. 601. Short title.
Sec. 602. Congressional findings.
Sec. 603. Definition.

                        Subtitle A--Definitions

Sec. 611. Flood Disaster Protection Act of 1973.
Sec. 612. National Flood Insurance Act of 1968.

           Subtitle B--Compliance and Increased Participation

Sec. 621. Expanded flood insurance purchase requirements.
Sec. 622. Excrow of flood insurance payments.
Sec. 623. Notice requirements.
Sec. 624. Placement of flood insurance by regulated lending 
                            institution, Federal agency lender, or 
                            servicer.
Sec. 625. Standard flood hazard determination forms.
Sec. 626. Examination regarding compliance by regulated lending 
                            institutions.
Sec. 627. Penalties and corrective actions for failure to require flood 
                            insurance, escrow, or notify.
Sec. 628. Financial institutions examination council.
Sec. 629. Conforming amendment.

Subtitle C--Ratings and Incentives for Community Floodplain Management 
                                Programs

Sec. 631. Community rating system and incentives for community 
                            floodplain management.
Sec. 632. Funding.
Sec. 633. Reasonable fees.

           Subtitle D--Mitigation of Flood and Erosion Risks

Sec. 641. Mitigation assistance in Federal insurance administration.
Sec. 642. Authorization of national flood and erosion mitigation funds 
                            under section 1362.
Sec. 643. State and community mitigation assistance program.
Sec. 644. Repeal of program for purchase of certain insured properties.
Sec. 645. Termination of erosion threatened structures program.
Sec. 646. Congressional findings and declaration of purchase under the 
                            National Flood Insurance Act of 1968.

                 Subtitle E--Flood Insurance Task Force

Sec. 651. Flood insurance interagency task force.

                  Subtitle F--Miscellaneous Provisions

Sec. 661. Maximum flood insurance coverage amounts.
Sec. 662. Additional coverage for compliance with land use and control 
                            measures.
Sec. 663. Flood insurance program arrangements with private insurance 
                            entities.
Sec. 664. Updating of flood insurance rate maps.
Sec. 665. Evaluation of erosion hazards.
Sec. 666. Coordination of flood insurance rate map revisions and 
                            updates with coastal zone management 
                            programs.
Sec. 667. Technical Mapping Advisory Council.
Sec. 668. Funding for increased administrative and operational 
                            responsibilities.
Sec. 669. Separate account for National Flood Insurance Fund.
Sec. 670. Nonwaiver of flood purchase requirement for recipients of 
                            Federal disaster assistance.
Sec. 671. Insurance waiting period.
Sec. 672. Agricultural structures.
Sec. 673. Implementation review by the director.
Sec. 674. Regulations.
Sec. 675. Prohibited flood disaster assistance.

                     TITLE VII--GENERAL PROVISIONS

Sec. 701. Study of effect of the Northern spotted owl on small business 
                            concerns.
Sec. 702. Negative information about consumer.
Sec. 703. United Nations resolutions concerning Jerusalem.
Sec. 704. Amendment to the Federal Reserve Act.
Sec. 705. Oversight hearings.
Sec. 706. Insurance transfer agreement.

         TITLE I--COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION

 Subtitle A--Community Development Banking and Financial Institutions 
                                  Act

SEC. 101. SHORT TITLE.

    This subtitle may be cited as the ``Community Development Banking 
and Financial Institutions Act of 1994''.

SEC. 102. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) many of the Nation's urban, rural, and Native American 
        communities face critical social and economic problems arising 
        in part from the lack of economic growth, people living in 
        poverty, and the lack of employment and other opportunities;
            (2) the restoration and maintenance of the economies of 
        these communities will require coordinated development 
        strategies, intensive supportive services, and increased access 
        to equity investments and loans for development activities, 
        including investment in businesses, housing, commercial real 
        estate, human development, and other activities that promote 
        the long-term economic and social viability of the community; 
        and
            (3) community development financial institutions have 
        proven their ability to identify and respond to community needs 
        for equity investments, loans, and development services.
    (b) Purpose.--The purpose of this subtitle is to create a Community 
Development Financial Institutions Fund that will promote economic 
revitalization and community development through a program of 
investment in and assistance to community development financial 
institutions, including enhancing the liquidity of community 
development financial institutions.

SEC. 103. DEFINITIONS.

    For purposes of this subtitle, the following definitions shall 
apply:
            (1) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency'' has the same meaning as 
        in section 3 of the Federal Deposit Insurance Act, and also 
        includes the National Credit Union Administration Board with 
        respect to insured credit unions.
            (2) Affiliate.--The term ``affiliate'' has the same meaning 
        as in section 2(k) of the Bank Holding Company Act of 1956.
            (3) Community development financial institution.--
                    (A) In general.--The term ``community development 
                financial institution'' means a person (other than an 
                individual) that--
                            (i) has a primary mission of promoting 
                        community development;
                            (ii) serves an investment area or targeted 
                        population;
                            (iii) directly, through an affiliate, or 
                        through a community partnership, provides 
                        development services and equity investments or 
                        loans;
                            (iv) maintains, through representation on 
                        its governing board or otherwise, 
                        accountability to residents of its investment 
                        area or targeted population; and
                            (v) is not an agency or instrumentality of 
                        the United States, or of any State or political 
                        subdivision of a State.
                    (B) Qualification of affiliates.--A subsidiary may 
                only qualify as a community development financial 
                institution if its parent company and the subsidiaries 
                thereof (on a consolidated basis) also qualify as 
                community development financial institutions.
            (4) Community partner.--The term ``community partner'' 
        means a person (other than an individual) that provides loans, 
        equity investments, or development services, including a 
        depository institution holding company, an insured depository 
        institution, an insured credit union, a nonprofit organization, 
        a State or local government agency, a quasi-governmental 
        entity, and an investment company authorized to operate 
        pursuant to the Small Business Investment Act of 1958.
            (5) Community partnership.--The term ``community 
        partnership'' means an agreement between a community 
        development financial institution and a community partner to 
        provide development services and loans or equity investments to 
        an investment area or targeted population.
            (6) Depository institution holding company.--The term 
        ``depository institution holding company'' has the same meaning 
        as in section 3 of the Federal Deposit Insurance Act.
            (7) Development services.--The term ``development 
        services'' means activities that promote community development 
        and are integral to lending or investment activities, 
        including--
                    (A) business planning;
                    (B) financial and credit counseling; and
                    (C) marketing and management assistance.
            (8) Insured community development financial institution.--
        The term ``insured community development financial 
        institution'' means any community development financial 
        institution that is an insured depository institution or an 
        insured credit union.
            (9) Insured credit union.--The term ``insured credit 
        union'' has the same meaning as in section 101(7) of the 
        Federal Credit Union Act.
            (10) Insured depository institution.--The term ``insured 
        depository institution'' has the same meaning as in section 3 
        of the Federal Deposit Insurance Act.
            (11) Investment area.--The term ``investment area'' means a 
        geographic area that--
                    (A)(i) meets objective criteria of economic 
                distress developed by the Community Development 
                Financial Institutions Fund, which may include the 
                percentage of low-income families or the extent of 
                poverty, the rate of unemployment or underemployment, 
                lag in population growth, and extent of blight and 
                disinvestment; and
                    (ii) has significant unmet needs for loans or 
                equity investments;
                    (B) is located in an empowerment zone or enterprise 
                community designated under section 1391 of the Internal 
                Revenue Code of 1986;
                    (C) is located on an Indian reservation, as defined 
                in section 3(d) of the Indian Financing Act of 1974 or 
                section 4(10) of the Indian Child Welfare Act of 1978; 
                or
                    (D) is located in an area which is not a 
                metropolitan statistical area and which has experienced 
                a decrease in population of not less than 10 percent 
                (as determined in the most recent decennial census) 
                between 1980 and 1990.
            (12) Low-income.--The term ``low-income'' means having an 
        income, adjusted for family size, of not more than--
                    (A) for metropolitan areas, 80 percent of the area 
                median income; and
                    (B) for nonmetropolitan areas, the greater of--
                            (i) 80 percent of the area median income; 
                        or
                            (ii) 80 percent of the statewide 
                        nonmetropolitan area median income.
            (13) Parent company.--The term ``parent company'' means any 
        company that directly or indirectly controls another company.
            (14) Subsidiary.--The term ``subsidiary'' has the same 
        meaning as in section 3 of the Federal Deposit Insurance Act, 
        except that a community development financial institution that 
        is a corporation shall not be considered to be a subsidiary of 
        any insured depository institution or depository institution 
        holding company that controls less than 25 percent of any class 
        of the voting shares of such corporation, and does not 
        otherwise control in any manner the election of a majority of 
        the directors of the corporation.
            (15) Targeted population.--The term ``targeted population'' 
        means low-income persons or persons who otherwise lack adequate 
        access to loans or equity investments.

SEC. 104. ESTABLISHMENT OF NATIONAL FUND FOR COMMUNITY DEVELOPMENT 
              BANKING.

    (a) Establishment.--
            (1) In general.--There is established a corporation to be 
        known as the Community Development Financial Institutions Fund 
        (hereafter in this subtitle referred to as the ``Fund'') that 
        shall have the duties and responsibilities specified by this 
        subtitle. The Fund shall have succession until dissolved. The 
        offices of the Fund shall be in Washington, D.C. The Fund shall 
        not be affiliated with or be within any other agency or 
        department of the Federal Government.
            (2) Wholly owned government corporation.--The Fund shall be 
        a wholly owned Government corporation in the executive branch 
        and shall be treated in all respects as an agency of the United 
        States, except as otherwise provided in this subtitle.
    (b) Management of Fund.--
            (1) Appointment of administrator and deputy 
        administrator.--The management of the Fund shall be vested in 
        an Administrator, who shall be appointed by the President, by 
        and with the advice and consent of the Senate. The 
        Administrator shall not engage in any other business or 
        employment during service as the Administrator. The President 
        may appoint a Deputy Administrator by and with the advice and 
        consent of the Senate. The Deputy Administrator shall serve as 
        the acting Administrator of the Fund during the absence or 
        disability of the Administrator or in the event of a vacancy in 
        the office of the Administrator.
            (2) Chief financial officer.--The Administrator shall 
        appoint a chief financial officer who shall oversee the 
        financial management activities of the Fund.
            (3) Other officers.--The Administrator may appoint such 
        other officers and employees of the Fund as the Administrator 
        determines to be necessary or appropriate.
    (c) General Powers.--In carrying out the functions of the Fund, the 
Administrator--
            (1) shall have all necessary and proper authority to carry 
        out this subtitle;
            (2) shall have the power to adopt, alter, and use a 
        corporate seal for the Fund, which shall be judicially noticed;
            (3) may adopt, amend, and repeal bylaws, rules, and 
        regulations governing the manner in which business of the Fund 
        may be conducted and such rules and regulations as may be 
        necessary or appropriate to implement this subtitle;
            (4) may enter into, perform, and enforce such agreements, 
        contracts, and transactions as may be deemed necessary or 
        appropriate to the conduct of activities authorized under this 
        subtitle;
            (5) may determine the character of and necessity for 
        expenditures of the Fund and the manner in which they shall be 
        incurred, allowed, and paid;
            (6) may utilize or employ the services of personnel of any 
        agency or instrumentality of the United States with the consent 
        of the agency or instrumentality concerned on a reimbursable or 
        nonreimbursable basis; and
            (7) may execute all instruments necessary or appropriate in 
        the exercise of any of the functions of the Fund under this 
        subtitle and may delegate to the officers of the Fund such of 
        the powers and responsibilities of the Administrator as the 
        Administrator deems necessary or appropriate for the 
        administration of the Fund.
    (d) Advisory Board.--
            (1) Establishment.--The Administrator shall establish an 
        advisory board to be known as the Community Development 
        Advisory Board (hereafter in this subtitle referred to as the 
        ``Board'') in accordance with the provisions of the Federal 
        Advisory Committee Act.
            (2) Membership.--
                    (A) In general.--The Board shall consist of 5 
                private citizens who, collectively--
                            (i) represent community groups whose 
                        constituencies include targeted populations or 
                        residents of investment areas;
                            (ii) represent local or regional government 
                        interests;
                            (iii) have expertise in the operations and 
                        activities of insured depository institutions; 
                        and
                            (iv) have expertise in community 
                        development and lending.
                    (B) Representation.--Each of the categories 
                described in clauses (i) through (iv) of subparagraph 
                (A) shall be represented by not less than 1 member of 
                the Board.
            (3) Board function.--It shall be the function of the Board 
        to advise the Administrator on the policies of the Fund. The 
        Board shall not advise the Administrator on the granting or 
        denial of any particular application.
            (4) Terms of members.--
                    (A) In general.--Each member of the Board shall 
                serve for a term of 4 years.
                    (B) Vacancies.--Any member appointed to fill a 
                vacancy occurring prior to the expiration of the term 
                for which the previous member was appointed shall be 
                appointed for the remainder of such term. Members may 
                continue to serve following the expiration of their 
                terms until a successor is appointed and qualified.
            (5) Chairperson.--The Administrator shall appoint a 
        chairperson from among the members of the Board.
            (6) Meetings.--The Board shall meet at least annually and 
        at such other times as requested by the Administrator or the 
        chairperson. A majority of the members of the Board shall 
        constitute a quorum.
            (7) Reimbursement for expenses.--The members of the Board 
        may receive reimbursement for travel, per diem, and other 
        necessary expenses incurred in the performance of their duties, 
        in accordance with the Federal Advisory Committee Act.
            (8) Costs and expenses.--The Fund shall provide to the 
        Board all necessary staff and facilities.
    (e) Conforming Amendments.--Section 9101(3) of title 31, United 
States Code, is amended--
            (1) by redesignating subparagraphs (B) through (M) as 
        subparagraphs (C) through (N), respectively; and
            (2) by inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) the Community Development Financial 
                Institutions Fund;''.
    (f) Government Corporation Control Act Exemption.--Section 9107(b) 
of title 31, United States Code, shall not apply to deposits of the 
Fund made pursuant to section 108.
    (g) Limitation of Fund and Federal Liability.--The liability of the 
Fund and the United States Government arising out of any investment in 
a community development financial institution in accordance with this 
subtitle shall be limited to the amount of the investment. The Fund 
shall be exempt from any assessments and other liabilities that may be 
imposed on controlling or principal shareholders by any Federal law or 
the law of any State, Territory, or the District of Columbia.
    (h) Prohibition on Issuance of Securities.--The Fund may not issue 
stock, bonds, debentures, notes, or other securities.
    (i) Compensation.--Title 5, United States Code, is amended--
            (1) in section 5314, by adding at the end the following:
            ``Administrator of the Community Development Financial 
        Institutions Fund.''; and
            (2) in section 5315, by adding at the end the following:
            ``Deputy Administrator of the Community Development 
        Financial Institutions Fund.''.
    (j) Assisted Institutions Not United States Instrumentalities.--A 
community development financial institution or other organization that 
receives assistance pursuant to this subtitle shall not be deemed to be 
an agency, department, or instrumentality of the United States.

SEC. 105. APPLICATIONS FOR ASSISTANCE.

    (a) Form and Procedures.--An application for assistance under this 
subtitle shall be submitted in such form and in accordance with such 
procedures as the Fund shall establish.
    (b) Minimum Requirements.--Except as provided in sections 106 and 
115, the Fund shall require an application--
            (1) to establish that the applicant is, or will be, a 
        community development financial institution;
            (2) to include a comprehensive strategic plan for the 
        organization that contains--
                    (A) a business plan of not less than 5 years in 
                duration that demonstrates that the applicant will be 
                properly managed and will have the capacity to operate 
                a community development financial institution that will 
                not be dependent upon assistance from the Fund for 
                continued viability;
                    (B) an analysis of the needs of the investment area 
                or targeted population and a strategy for how the 
                applicant will attempt to meet those needs;
                    (C) a plan to coordinate use of assistance from the 
                Fund with existing Federal, State, local, and tribal 
                government assistance programs, and private sector 
                financial services;
                    (D) an explanation of how the proposed activities 
                of the applicant are consistent with existing economic, 
                community, and housing development plans adopted by or 
                applicable to an investment area; and
                    (E) a description of how the applicant will 
                coordinate with community organizations and financial 
                institutions which will provide equity investments, 
                loans, secondary markets, or other services to 
                investment areas or targeted populations;
            (3) to include a detailed description of the applicant's 
        plans and likely sources of funds to match the amount of 
        assistance requested from the Fund;
            (4) in the case of an applicant that has previously 
        received assistance under this subtitle, to demonstrate that 
        the applicant--
                    (A) has substantially met its performance goals and 
                otherwise carried out its responsibilities under this 
                subtitle and the assistance agreement; and
                    (B) will expand its operations into a new 
                investment area or to serve a new targeted population, 
                offer more services, or increase the volume of its 
                business;
            (5) in the case of an applicant with a prior history of 
        serving investment areas or targeted populations, to 
        demonstrate that the applicant--
                    (A) has a record of success in serving investment 
                areas or targeted populations;
                    (B) will expand its operations into a new 
                investment area or to serve a new targeted population, 
                offer more services, or increase the volume of its 
                current business; and
            (6) to include such other information as the Fund deems 
        appropriate.
    (c) Exception.--
            (1) In general.--Notwithstanding subsection (b)(1), in the 
        case of a State in which there is no existing community 
        development financial institution in operation on the date of 
        enactment of this Act, an applicant may be an agency or 
        instrumentality of a State government if--
                    (A) such an entity has a primary mission of 
                promoting community development;
                    (B) any assistance received is used to establish a 
                community development financial institution;
                    (C) there is no nongovernment entity within the 
                State that possesses the capacity to become a community 
                development financial institution;
                    (D) no other agency or instrumentality of the same 
                State has received assistance; and
                    (E) assistance received will not reduce the amount 
                of State funds that otherwise would be appropriated to 
                such an entity.
            (2) Majority ownership.--An agency or instrumentality 
        eligible to apply pursuant to paragraph (1) may own a majority 
        of the voting stock of a community development financial 
        institution if it demonstrates that there is a lack of 
        nonpublic sources of capital available to establish a community 
        development financial institution.
            (3) Amount of assistance.--No State agency or 
        instrumentality and a community development financial 
        institution, a majority of the shares of which are owned by 
        such an agency or instrumentality pursuant to this subsection, 
        may cumulatively receive assistance exceeding the amount set 
        forth under section 108(d)(1).
    (d) Preapplication Outreach Program.--The Fund may operate an 
outreach program to identify and provide information to potential 
applicants.

SEC. 106. COMMUNITY PARTNERSHIPS.

    (a) Application.--An application for assistance may be filed 
jointly by a community development financial institution and a 
community partner to carry out a community partnership.
    (b) Application Requirements.--The Fund shall require a community 
partnership application--
            (1) to meet the minimum requirements established for 
        community development financial institutions under section 
        105(b), except that the criteria specified in paragraphs (1) 
        and (2)(A) of section 105(b) shall not apply to the community 
        partner;
            (2) to describe how each coapplicant will participate in 
        carrying out the community partnership and how the partnership 
        will enhance activities serving the investment area or targeted 
        population; and
            (3) to demonstrate that the community partnership 
        activities are consistent with the strategic plan submitted by 
        the community development financial institution coapplicant.
    (c) Selection Criteria.--The Fund shall consider a community 
partnership application based on the selection criteria set out in 
section 107.
    (d) Limitation on Distribution of Assistance.--Assistance provided 
upon approval of an application under this section shall be distributed 
only to the community development financial institution coapplicant, 
and shall not be used to fund any activities carried out directly by 
the community partner or an affiliate thereof.
    (e) Other Requirements and Limitations.--All other requirements and 
limitations imposed by this subtitle on a community development 
financial institution assisted under this subtitle shall apply (in the 
manner that the Fund determines to be appropriate) to assistance 
provided to carry out community partnerships. The Fund may establish 
additional guidelines and restrictions on the use of Federal funds to 
carry out community partnerships.

SEC. 107. SELECTION OF INSTITUTIONS.

    (a) Selection Criteria.--Except as provided in section 115, the 
Fund shall, in its sole discretion, select applicants for assistance 
based on--
            (1) the likelihood of success of the applicant in meeting 
        the goals of its comprehensive strategic plan;
            (2) the experience and background of the proposed 
        management team;
            (3) the extent of need for equity investments, loans, and 
        development services within the investment areas or targeted 
        populations;
            (4) the extent of economic distress within the investment 
        areas or the extent of need within the targeted populations, as 
        those factors are measured by objective criteria;
            (5) the extent to which the applicant will concentrate its 
        activities on serving its investment areas or targeted 
        populations;
            (6) the amount of firm commitments to meet or exceed the 
        matching requirements and the likely success of the plan for 
        raising the balance of the match;
            (7) the extent to which the proposed activities will expand 
        economic opportunities within the investment areas or the 
        targeted populations;
            (8) whether the applicant is, or will become, an insured 
        depository institution or an insured credit union;
            (9) whether the applicant is, or will be, located--
                    (A) in an empowerment zone or enterprise community 
                designated under section 1391 of the Internal Revenue 
                Code of 1986;
                    (B) on an Indian reservation, as defined in section 
                3(d) of the Indian Financing Act of 1974 or section 
                4(10) of the Indian Child Welfare Act of 1978; or
                    (C) in a community that has experienced a sudden 
                and significant loss in total employment since the 1990 
                census or a major dislocation in its primary employment 
                base.
            (10) the extent to which the applicant will increase its 
        resources through coordination with other institutions or 
        participation in a secondary market;
            (11) in the case of an applicant with a prior history of 
        serving investment areas or targeted populations, the extent of 
        success in serving them; and
            (12) other factors (such as the extent to which the 
        applicant has strong ties to the community that it will serve) 
        deemed to be appropriate by the Fund.
    (b) Geographic Diversity.--The Fund shall assist a geographically 
diverse group of applicants, including an appropriate mix of applicants 
from urban, rural, and Native American communities.

SEC. 108. ASSISTANCE PROVIDED BY THE FUND.

    (a) Forms of Assistance.--
            (1) In general.--The Fund may provide--
                    (A) financial assistance through equity 
                investments, deposits, credit union shares, loans, and 
                grants; and
                    (B) technical assistance--
                            (i) directly;
                            (ii) through grants; or
                            (iii) by contracting with organizations 
                        that possess expertise in community 
                        development, without regard to whether the 
                        organizations receive or are eligible to 
                        receive assistance under this subtitle.
            (2) Equity investments.--The Fund shall not own more than 
        50 percent of the equity of a community development financial 
        institution and may not control the operations of such 
        institution. The Fund may hold only transferable, nonvoting 
        equity investments. Such equity investments may provide for 
        convertibility to voting stock upon transfer by the Fund.
            (3) Deposits.--Deposits made pursuant to this section in an 
        insured community development financial institution shall not 
        be subject to any requirement for collateral or security.
            (4) Limitations on obligations.--Direct loan obligations 
        may be incurred by the Fund only to the extent that 
        appropriations of budget authority to cover their costs, as 
        defined in section 502 of the Congressional Budget Act of 1974, 
        are made in advance.
    (b) Uses of Financial Assistance.--
            (1) In general.--Financial assistance made available under 
        this subtitle may be used by assisted institutions to serve 
        investment areas or targeted populations by developing or 
        supporting--
                    (A) commercial facilities that promote 
                revitalization, community stability, or job creation or 
                retention;
                    (B) businesses that--
                            (i) provide jobs for low-income people or 
                        are owned by low-income people; or
                            (ii) enhance the availability of products 
                        and services to low-income people;
                    (C) community facilities;
                    (D) the provision of basic financial services;
                    (E) housing that is principally affordable to low-
                income people, except that assistance used to 
                facilitate homeownership opportunities shall only be 
                used for activities and lending products that serve 
                low-income people and are not provided by other lenders 
                in the area; and
                    (F) other businesses and activities deemed 
                appropriate by the Fund.
            (2) Limitations.--No assistance made available under this 
        subtitle may be expended by a community development financial 
        institution (or an organization receiving assistance under 
        section 115) to pay any person to influence or attempt to 
        influence any agency, elected official, officer, or employee of 
        a State or local government in connection with the making, 
        award, extension, continuation, renewal, amendment, or 
        modification of any State or local government contract, grant, 
        loan, or cooperative agreement (as such terms are defined in 
        section 1352 of title 31, United States Code).
    (c) Uses of Technical Assistance.--Technical assistance may be used 
for activities that enhance the capacity of a community development 
financial institution, such as training of management and other 
personnel and development of programs and investment or loan products.
    (d) Amount of Assistance.--
            (1) In general.--The Fund may provide not more than 
        $5,000,000 of assistance, in the aggregate, during any 3-year 
        period to any 1 community development financial institution and 
        its affiliates.
            (2) Exception.--Notwithstanding the limitations in 
        paragraph (1), in the case of an existing community development 
        financial institution that proposes to serve an investment area 
        or targeted population outside of any State and outside of any 
        metropolitan area presently served by the institution, the Fund 
        may provide not more than $7,500,000 of assistance to a 
        community development financial institution and its affiliates, 
        in the aggregate, during any 3-year period, of which not less 
        than $2,500,000 shall be used to establish affiliates to serve 
        the new investment area or targeted population.
            (3) Timing of assistance.--Assistance may be provided as 
        described in paragraphs (1) and (2) in a lump sum or over a 
        period of time, as determined by the Fund.
    (e) Matching Requirements.--
            (1) In general.--Assistance other than technical assistance 
        shall be matched with funds from sources other than the Federal 
        Government on the basis of not less than one dollar for each 
        dollar provided by the Fund. Such matching funds shall be at 
        least comparable in form and value to assistance provided by 
        the Fund. The Fund shall provide no assistance (other than 
        technical assistance) until a community development financial 
        institution has secured firm commitments for the matching funds 
        required.
            (2) Exception.--In the case of an applicant with severe 
        constraints on available sources of matching funds, the Fund 
        may permit an applicant to comply with the matching 
        requirements of paragraph (1) by--
                    (A) reducing such matching requirement by 50 
                percent;
                    (B) permitting such applicant to satisfy not more 
                than 60 percent of the matching requirement through use 
                of assistance made available pursuant to--
                            (i) section 106 of the Housing and 
                        Community Development Act of 1974;
                            (ii) section 623(c)(1) of the Community 
                        Economic Development Act of 1981; or
                            (iii) section 310B(c) of the Consolidated 
                        Farm and Rural Development Act; or
                    (C) permitting an applicant to provide matching 
                funds in a form to be determined at the discretion of 
                the Fund if such applicant--
                            (i) has total assets of less than $100,000;
                            (ii) serves nonmetropolitan areas; and
                            (iii) is not requesting more than $25,000 
                        in assistance.
            (3) Limitation.--Not more than 25 percent of the total 
        funds disbursed in any fiscal year by the Fund may be matched 
        as authorized under paragraph (2).
            (4) Construction of ``federal funds''.--For purposes of 
        this subsection, notwithstanding section 105(a)(9) of the 
        Housing and Community Development Act of 1974, funds provided 
        pursuant to such Act shall be considered to be Federal funds, 
        except as provided in paragraph (2)(B).
    (f) Terms and Conditions.--
            (1) Soundness of unregulated institutions.--The Fund 
        shall--
                    (A) ensure, to the maximum extent practicable, that 
                each community development financial institution (other 
                than an insured community development financial 
                institution or depository institution holding company) 
                assisted under this subtitle is financially and 
                managerially sound and maintains appropriate internal 
                controls; and
                    (B) require such institution to submit, not less 
                than once during each 18-month period, a statement of 
                financial condition audited by an independent certified 
                public accountant as part of the report required by 
                section 112(a)(4).
            (2) Consultation with the appropriate banking regulator.--
        Prior to providing assistance to an insured community 
        development financial institution, the Fund shall consult with 
        the appropriate Federal banking agency.
            (3) Assistance agreement.--
                    (A) In general.--Before providing any assistance 
                under this subtitle, the Fund and each community 
                development financial institution to be assisted shall 
                enter into an agreement that requires the institution 
                to comply with performance goals and abide by other 
                terms and conditions pertinent to assistance received 
                under this subtitle.
                    (B) Performance goals.--Performance goals shall be 
                negotiated between the Fund and each community 
                development financial institution receiving assistance 
                based upon the strategic plan submitted pursuant to 
                section 105(b)(2). Such goals may be modified with the 
                consent of the parties, or as provided in subparagraph 
                (C). Performance goals for insured community 
                development financial institutions shall be determined 
                in consultation with the appropriate Federal banking 
                agency.
                    (C) Sanctions.--The agreement shall provide that, 
                in the event of fraud, mismanagement, noncompliance 
                with this subtitle, or noncompliance with the terms of 
                the agreement, the Fund, in its discretion, may--
                            (i) revoke approval of the application;
                            (ii) terminate or reduce future assistance;
                            (iii) require repayment of assistance;
                            (iv) require changes to the performance 
                        goals imposed pursuant to subparagraph (B);
                            (v) bar an applicant from reapplying for 
                        assistance from the Fund;
                            (vi) require changes to the strategic plan 
                        submitted pursuant to section 105(b)(2); and
                            (vii) take such other actions as the Fund 
                        deems appropriate.
                    (D) Insured community development financial 
                institutions.--In the case of an insured community 
                development financial institution, the Fund shall 
                notify the appropriate Federal banking agency not less 
                than 15 days before imposing sanctions pursuant to this 
                paragraph and shall not impose such sanctions if the 
                agency disapproves, with an explanation in writing, 
                during that 15-day period.
                    (E) Native american institutions.--In the case of a 
                community development financial institution which 
                serves an investment area described in paragraph 
                (11)(C) of section 103, or an Indian tribe, as defined 
                in section 4 of the Indian Self-Determination and 
                Education Assistance Act, the Fund shall consult with 
                the applicable tribal government in evaluating the 
                institution's compliance with the performance goals 
                established pursuant to subparagraph (B).
    (g) Authority To Sell Equity Investments and Loans.--The Fund may, 
at any time, sell its equity investments and loans, but the Fund shall 
retain the power to enforce limitations on assistance entered into in 
accordance with the requirements of this subtitle until the performance 
goals related to the investment or loan have been met.
    (h) No Authority To Limit Supervision and Regulation.--Nothing in 
this subtitle shall affect any authority of the appropriate Federal 
banking agency to supervise and regulate any institution or company.

SEC. 109. COMMUNITY DEVELOPMENT TRAINING.

    (a) In General.--The Fund may operate a training program to 
increase the capacity and expertise of community development financial 
institutions and other members of the financial services industry to 
undertake community development activities (hereafter in this subtitle 
referred to as the ``training program'').
    (b) Program Activities.--The training program shall provide 
educational programs to assist community development financial 
institutions and other members of the financial services industry in 
developing lending and investment products, underwriting and servicing 
loans, managing equity investments, and implementing development 
services targeted to areas of economic distress, low-income persons, 
and persons who lack adequate access to loans and equity investments.
    (c) Participation.--The training program shall be made available to 
community development financial institutions and other members of the 
financial services industry that serve or seek to serve areas of 
economic distress, low-income persons, and persons who lack adequate 
access to loans and equity investments.
    (d) Contracting.--The Fund may offer the training described in this 
section directly or through a contract with other organizations. The 
Fund may contract to provide the training with organizations that 
possess special expertise in community development, without regard to 
whether the organizations receive or are eligible to receive assistance 
under this subtitle.
    (e) Fees.--The Fund, as it deems appropriate, may charge fees for 
participation in training services to offset the cost of providing the 
services.

SEC. 110. ENCOURAGEMENT OF PRIVATE ENTITIES.

    The Fund may facilitate the organization of corporations in which 
the Federal Government has no ownership interest that will complement 
the activities of the Fund in carrying out the purpose of this 
subtitle. The purpose of any such entity shall be to assist community 
development financial institutions in a manner that is complementary to 
the activities of the Fund under this subtitle. Any such entity shall 
be managed exclusively by persons not employed by the Federal 
Government or any agency or instrumentality thereof.

SEC. 111. CLEARINGHOUSE FUNCTION.

    (a) Establishment.--The Fund may establish and maintain an 
information clearinghouse in coordination with other Federal 
departments or agencies and community development financial 
institutions to--
            (1) collect, compile, and analyze information pertinent to 
        community development financial institutions that will assist 
        in creating, developing, expanding, and preserving these 
        institutions; and
            (2) provide information on financial, technical, and 
        management assistance, data on the activities of community 
        development financial institutions, regulations, and other 
        information that may promote the purposes of this subtitle.
    (b) Costs.--The cost of maintaining the clearinghouse shall be 
shared equally by the Fund and each department or agency involved in 
maintaining the clearinghouse.

SEC. 112. RECORDKEEPING, REPORTS, AND AUDITS.

    (a) Recordkeeping.--
            (1) In general.--A community development financial 
        institution receiving assistance from the Fund shall keep such 
        records, for such periods as may be prescribed, as may be 
        necessary to disclose the manner in which any assistance under 
        this subtitle is used and to demonstrate compliance with the 
        requirements of this subtitle.
            (2) User profile information.--The Fund shall require each 
        community development financial institution receiving 
        assistance under this subtitle to compile and maintain data on 
        the gender, race, ethnicity, national origin, and other 
        pertinent information concerning individuals that utilize the 
        services of the assisted institution to ensure that targeted 
        populations and low-income residents of investment areas are 
        adequately served.
            (3) Access to records.--The Fund shall have access on 
        demand, for the purpose of determining compliance with this 
        subtitle, to any records of a community development financial 
        institution that receives assistance from the Fund.
            (4) Review.--Not less than annually, the Fund shall review 
        the progress of each assisted community development financial 
        institution in carrying out its strategic plan, meeting its 
        performance goals, and satisfying the terms and conditions of 
        its assistance agreement.
            (5) Reporting.--
                    (A) Annual reports.--The Fund shall require each 
                community development financial institution receiving 
                assistance under this subtitle to submit an annual 
                report to the Fund on its activities, its financial 
                condition, and its success in meeting performance 
                goals, in satisfying the terms and conditions of its 
                assistance agreement, and in complying with other 
                requirements of this subtitle in such form and manner 
                as the Fund shall specify.
                    (B) Availability of reports.--The Fund, after 
                deleting or redacting any material, as appropriate to 
                protect privacy or proprietary interests, shall make 
                such reports available for public inspection.
    (b) Annual Report by the Fund.--The Fund shall conduct an annual 
evaluation of the activities carried out by the Fund and the community 
development financial institutions assisted pursuant to this subtitle, 
and shall submit a report of its findings to the President and the 
Congress not later than 120 days after the end of each fiscal year of 
the Fund. The report shall include financial statements audited in 
accordance with subsection (d).
    (c) Studies.--
            (1) Optional studies.--The Fund may conduct such studies as 
        the Fund determines necessary to further the purpose of this 
        subtitle and to facilitate investment in distressed 
        communities. The findings of any studies conducted pursuant to 
        this paragraph shall be included in the report required by 
        subsection (b).
            (2) Native american lending study.--
                    (A) Study.--The Fund shall conduct a study on 
                lending and investment practices on Indian reservations 
                and other land held in trust by the United States 
                Government. Such study shall--
                            (i) identify barriers to private financing 
                        on such lands; and
                            (ii) identify the impact of such barriers 
                        on access to capital and credit for Native 
                        American populations.
                    (B) Consultation with private sector.--In 
                conducting the study under subparagraph (A), the Fund 
                shall consult with tribal governments, private 
                citizens, and organizations that possess expertise in 
                lending and community development issues confronted by 
                Native American populations.
                    (C) Report.--Not later than 18 months after the 
                date of enactment of this Act, the Fund shall submit a 
                report to the President and the Congress that--
                            (i) contains the findings of the study 
                        conducted under subparagraph (A);
                            (ii) recommends any necessary statutory and 
                        regulatory changes to existing Federal 
                        programs; and
                            (iii) makes policy recommendations for 
                        community development financial institutions, 
                        insured depository institutions, secondary 
                        market institutions, and other private sector 
                        capital institutions to better serve such 
                        populations.
            (3) Investment, governance, and role of fund.--Thirty 
        months after the appointment and qualification of the 
        Administrator, the Comptroller General shall submit to the 
        President and the Congress a study evaluating the structure, 
        governance, and performance of the Fund.
    (d) Examination and Audit.--The financial statements of the Fund 
shall be audited in accordance with section 9105 of title 31, United 
States Code, except that audits required by section 9105(a) of such 
title shall be performed annually.

SEC. 113. INVESTMENT OF RECEIPTS AND PROCEEDS.

    (a) Establishment of Account.--Any dividends on equity investments 
and proceeds from the disposition of investments, deposits, or credit 
union shares that are received by the Fund as a result of assistance 
provided pursuant to section 108, and any fees received pursuant to 
section 109(e) shall be deposited and accredited to an account of the 
Fund in the United States Treasury (hereafter in this section referred 
to as ``the account'') established to carry out the purpose of this 
subtitle.
    (b) Investments.--Upon request of the Administrator, the Secretary 
of the Treasury shall invest amounts deposited in the account in public 
debt securities with maturities suitable to the needs of the Fund, as 
determined by the Administrator, and bearing interest at rates 
determined by the Secretary of the Treasury, comparable to current 
market yields on outstanding marketable obligations of the United 
States of similar maturities.
    (c) Availability.--Amounts deposited into the account and interest 
earned on such amounts pursuant to this section shall be available to 
the Fund until expended.

SEC. 114. INSPECTOR GENERAL.

    (a) Establishment.--Section 11 of the Inspector General Act of 1978 
(5 U.S.C. App. 11) is amended--
            (1) in paragraph (1), by inserting ``; the Administrator of 
        the Community Development Financial Institutions Fund;'' before 
        ``and the chief''; and
            (2) in paragraph (2), by inserting ``the Community 
        Development Financial Institutions Fund,'' after ``the Agency 
        for International Development,''.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary for the operation of the 
Office of Inspector General established by the amendments made by 
subsection (a).

SEC. 115. CAPITALIZATION ASSISTANCE TO ENHANCE LIQUIDITY.

    (a) Assistance.--
            (1) In general.--The Fund may provide assistance for the 
        purpose of providing capital to organizations that will 
        purchase loans or otherwise enhance the liquidity of community 
        development financial institutions if--
                    (A) the primary purpose of such organizations is to 
                promote community development; and
                    (B) any assistance received is matched with funds--
                            (i) from sources other than the Federal 
                        Government;
                            (ii) on the basis of not less than $1 for 
                        each dollar provided by the Fund; and
                            (iii) that are comparable in form and value 
                        to the assistance provided by the Fund.
            (2) Limitation on other assistance.--An organization that 
        receives assistance under this section may not receive other 
        financial or technical assistance under this subtitle.
    (b) Selection.--The selection of organizations to receive 
assistance under this section shall be at the discretion of the Fund 
and in accordance with criteria established by the Fund. In 
establishing such criteria, the Fund shall take into account the 
criteria contained in sections 105(b) and 107, as appropriate.
    (c) Amount of Assistance.--The Fund may provide a total of not more 
than $5,000,000 of assistance to an organization under this section 
during any 3-year period. Assistance may be provided in a lump sum or 
over a period of time, as determined by the Fund.
    (d) Audit and Report Requirements.--
            (1) In general.--Organizations that receive assistance from 
        the Fund in accordance with this section shall--
                    (A) submit to the Fund not less than once in every 
                18-month period, financial statements audited by an 
                independent certified public accountant;
                    (B) submit an annual report on its activities; and
                    (C) keep such records as may be necessary to 
                disclose the manner in which any assistance under this 
                section is used.
            (2) Access.--The Fund shall have access on demand, for the 
        purposes of determining compliance with this section, to any 
        records of such organizations.
    (e) Limitations on Liability.--
            (1) Liability of fund.--The liability of the Fund and the 
        United States Government arising out of the provision of 
        assistance to any organization in accordance with this section 
        shall be limited to the amount of such assistance. The Fund 
        shall be exempt from any assessments and any other liabilities 
        that may be imposed on controlling or principal shareholders by 
        any Federal law or the law of any State, territory, or the 
        District of Columbia.
            (2) Liability of government.--This section does not oblige 
        the Federal Government, either directly or indirectly, to 
        provide any funds to any organization assisted pursuant to this 
        section, or to honor, reimburse, or otherwise guarantee any 
        obligation or liability of such an organization. This section 
        shall not be construed to imply that any such organization or 
        any obligations or securities of any such organization are 
        backed by the full faith and credit of the United States.
    (f) Use of Proceeds.--Any proceeds from the sale of loans to an 
organization assisted under this section shall be used by the seller 
for community development purposes.

SEC. 116. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR CREDIT UNIONS.

    (a) Repeal.--Section 120 of the Federal Credit Union Act (12 U.S.C. 
1766) is amended by striking subsection (k).
    (b) Revolving Loan Fund.--The Federal Credit Union Act (12 U.S.C. 
1751 et seq.) is amended by inserting after section 129 the following 
new section:

``SEC. 130. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR CREDIT 
              UNIONS.

    ``(a) In General.--The Board may exercise the authority granted to 
it by the Community Development Credit Union Revolving Loan Fund 
Transfer Act, including any additional appropriation made or earnings 
accrued, subject only to this section and to regulations prescribed by 
the Board.
    ``(b) Investment.--The Board may invest any idle Fund moneys in 
United States Treasury securities. Any interest accrued on such 
securities shall become a part of the Fund.
    ``(c) Loans.--The Board may require that any loans made from the 
Fund be matched by increased shares in the borrower credit union.
    ``(d) Interest.--Interest earned by the Fund may be allocated by 
the Board for technical assistance to community development credit 
unions, subject to an appropriations Act.
    ``(e) Definition.--As used in this section, the term `Fund' means 
the Community Development Credit Union Revolving Loan Fund.''.

SEC. 117. REGULATIONS.

    Not later than 180 days after the appointment and qualification of 
the Administrator, the Fund shall issue such regulations as may be 
necessary to carry out this subtitle.

SEC. 118. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--To carry out this subtitle, there are authorized 
to be appropriated to the Fund, to remain available until expended--
            (1) $60,000,000 for fiscal year 1994;
            (2) $104,000,000 for fiscal year 1995;
            (3) $107,000,000 for fiscal year 1996; and
            (4) $111,000,000 for fiscal year 1997.
    (b) Administrative Expenses.--Of amounts authorized to be 
appropriated to the Fund--
            (1) not more than $5,500,000 may be used by the Fund in 
        each fiscal year to pay the administrative costs and expenses 
        of the Fund; and
            (2) not more than $50,000 may be used by the Fund in each 
        fiscal year to provide for administrative costs and expenses 
        described in section 104(d)(8).
    (c) Community Development Credit Union Revolving Loan Fund.--There 
are authorized to be appropriated for the purposes of the Community 
Development Credit Union Revolving Loan Fund--
            (1) $2,000,000 for fiscal year 1994;
            (2) $1,000,000 for fiscal year 1995;
            (3) $1,000,000 for fiscal year 1996; and
            (4) $1,000,000 for fiscal year 1997.
    (d) Capitalization Assistance.--Not more than 5 percent of the 
amounts authorized to be appropriated under subsection (a) may be used 
as provided in section 115.
    (e) Budgetary Treatment.--Amounts authorized to be appropriated 
under this section shall be subject to discretionary spending caps, as 
provided in section 601 of the Congressional Budget Act of 1974, and 
therefore shall reduce by an equal amount funds made available for 
other discretionary spending programs.

            Subtitle B--Home Ownership and Equity Protection

SEC. 151. CONSUMER PROTECTIONS FOR HIGH COST MORTGAGES.

    (a) Definition.--Section 103 of the Truth in Lending Act (15 U.S.C. 
1602) is amended by adding at the end the following new subsection:
    ``(aa)(1) A mortgage referred to in this subsection means a 
consumer credit transaction that is secured by the consumer's principal 
dwelling, other than a residential mortgage transaction, a reverse 
mortgage transaction, or a transaction under an open end credit plan, 
if--
            ``(A) the annual percentage rate at consummation of the 
        transaction will exceed by more than 10 percentage points the 
        rate of interest on Treasury securities having comparable 
        periods of maturity on the fifteenth day of the month 
        immediately preceding the month in which the loan is 
        consummated; or
            ``(B) the total points and fees payable by the consumer at 
        or before closing will exceed the greater of--
                    ``(i) 8 percent of the total loan amount; or
                    ``(ii) $400.
    ``(2) The amount specified in paragraph (1)(B)(ii) shall be 
adjusted annually on January 1 by the annual percentage change in the 
Consumer Price Index, as reported on June 1 of the year preceding such 
adjustment.
    ``(3) For purposes of paragraph (1)(B), points and fees shall 
include--
            ``(A) all items included in the finance charge except 
        interest and the time-price differential;
            ``(B) all compensation paid to mortgage brokers;
            ``(C) each of the charges listed in section 106(e) (except 
        an escrow for future payment of taxes), unless--
                    ``(i) the charge is reasonable;
                    ``(ii) the creditor receives no direct or indirect 
                compensation; and
                    ``(iii) the charge is paid to a third party 
                unaffiliated with the creditor; and
            ``(D) such other charges as the Board determines to be 
        appropriate.''.
    (b) Material Disclosures.--Section 103(u) of the Truth in Lending 
Act (15 U.S.C. 1602(u)) is amended--
            (1) by striking ``and the due dates'' and inserting ``the 
        due dates''; and
            (2) by inserting before the period ``, and the disclosures 
        required by section 129(a)''.
    (c) Definition of Creditor Clarified.--Section 103(f) of the Truth 
in Lending Act (15 U.S.C. 1602(f)) is amended by adding at the end the 
following: ``Any person who originates 2 or more mortgages referred to 
in subsection (aa) in any 12-month period or any person who originates 
1 or more such mortgages through a mortgage broker shall be considered 
to be a creditor for purposes of this title.''.
    (d) Disclosures Required and Certain Terms Prohibited.--The Truth 
in Lending Act (15 U.S.C. 1601 et seq.) is amended by inserting after 
section 128 the following new section:

``SEC. 129. REQUIREMENTS FOR CERTAIN MORTGAGES.

    ``(a) Disclosures.--
            ``(1) Specific disclosures.--In addition to other 
        disclosures required under this title, for each mortgage 
        referred to in section 103(aa), the creditor shall provide the 
        following disclosures in conspicuous type size:
                    ``(A) `You are not required to complete this 
                agreement merely because you have received these 
                disclosures or have signed a loan application.'
                    ``(B) `If you obtain this loan, the lender will 
                have a mortgage on your home. You could lose your home, 
                and any money you have put into it, if you do not meet 
                your obligations under the loan.'.
            ``(2) Annual percentage rate.--In addition to the 
        disclosures required under paragraph (1), the creditor shall 
        disclose--
                    ``(A) the annual percentage rate of the loan and 
                the amount of the regular monthly payment; or
                    ``(B) in the case of a variable rate loan, the 
                annual percentage rate of the loan, a statement that 
                the interest rate and monthly payment may increase, and 
                the amount of the maximum possible monthly payment.
    ``(b) Time of Disclosures.--
            ``(1) In general.--The disclosures required by this section 
        shall be given not less than 3 business days prior to 
        consummation of the transaction.
            ``(2) New disclosures required.--After providing the 
        disclosures required by this section, a creditor may not change 
        the terms of the loan if such changes make the disclosures 
        inaccurate, unless new disclosures are provided that meet the 
        requirements of this section.
            ``(3) Modifications.--The Board may, if it finds that such 
        action is necessary to permit homeowners to meet bona fide 
        personal financial emergencies, prescribe regulations 
        authorizing the modification or waiver of rights created under 
        this subsection, to the extent and under the circumstances set 
        forth in those regulations.
    ``(c) No Prepayment Penalty.--
            ``(1) In general.--Except as provided in paragraph (4), a 
        mortgage referred to in section 103(aa) may not contain terms 
        under which a consumer must pay a prepayment penalty for paying 
        all or part of the principal of the loan prior to the date on 
        which such principal is due. If the date of maturity of a 
        mortgage referred to in section 103(aa) is accelerated for any 
        reason, and the consumer is entitled to a rebate of interest, 
        computation of the rebate amount shall comply with paragraph 
        (2). No such mortgage shall provide for a default interest rate 
        that is higher than the interest rate provided by the note for 
        the loan prior to default.
            ``(2) Rebate computation.--For purposes of this subsection, 
        any method of computing rebates of interest that is less 
        favorable to the consumer than the actuarial method (as defined 
        in section 933 of the Housing and Community Development Act of 
        1992) using simple interest is a prepayment penalty.
            ``(3) Exception.--A mortgage referred to in section 103(aa) 
        may include terms under which a consumer is required to pay not 
        more than 1 month's interest as a penalty if the consumer 
        prepays the principal of the loan within 1 year of origination.
    ``(d) No Balloon Payments.--A mortgage referred to in section 
103(aa) having a term of less than 5 years may not include terms under 
which the aggregate amount of the regular periodic payments would not 
fully amortize the outstanding principal balance.
    ``(e) No Negative Amortization.--A mortgage referred to in section 
103(aa) may not include terms under which the outstanding principal 
balance will increase at any time over the course of the loan because 
the regular periodic payments do not cover the full amount of interest 
due.
    ``(f) No Prepaid Payments.--A mortgage referred to in section 
103(aa) may not include terms under which more than 2 periodic payments 
required under the loan are consolidated and paid in advance from the 
loan proceeds provided to the consumer.
    ``(g) Consequence of Failure To Comply.--Any mortgage that contains 
a provision prohibited by this section shall be deemed a failure to 
deliver the material disclosures required under this title, for the 
purpose of section 125.
    ``(h) Definition.--For purposes of this section, the term 
`affiliate' has the same meaning as in section 2(k) of the Bank Holding 
Company Act of 1956.
    ``(i) Discretionary Regulatory Authority of Board.--
            ``(1) Exemptions.--The Board may, by regulation or order, 
        exempt specific mortgage products or categories of mortgages 
        from any or all of the prohibitions specified in subsections 
        (c) through (f), if the Board finds that the exemption--
                    ``(A) is in the interest of the borrowing public; 
                and
                    ``(B) will apply only to products that maintain and 
                strengthen home ownership and equity protection.
            ``(2) Prohibitions.--The Board, by regulation or order, 
        shall prohibit acts or practices in connection with--
                    ``(A) mortgage loans that the Board finds to be 
                unfair, deceptive, or designed to evade the provisions 
                of this section; and
                    ``(B) refinancing of mortgage loans that the Board 
                finds to be associated with abusive lending practices, 
                or that are otherwise not in the interest of the 
                borrower.''.
    (e) Conforming Amendments.--
            (1) Table of sections.--The table of sections at the 
        beginning of chapter 2 of the Truth in Lending Act is amended 
        by striking the item relating to section 129 and inserting the 
        following:

``129. Requirements for certain mortgages.''.
            (2) Truth in lending act.--Section 105(a) of the Truth in 
        Lending Act (15 U.S.C. 1604(a)) is amended in the second 
        sentence, by striking ``These'' and inserting ``Except in the 
        case of a mortgage referred to in section 103(aa), these''.

SEC. 152. CIVIL LIABILITY.

    (a) Damages.--Section 130(a) of the Truth in Lending Act (15 U.S.C. 
1640(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (2)(B);
            (2) by striking the period at the end of paragraph (3) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (3) the following new 
        paragraph:
            ``(4) in the case of a failure to comply with any 
        requirement under section 129, an amount equal to the sum of 
        all finance charges and fees paid by the consumer, unless the 
        creditor demonstrates that the failure to comply is not 
        material.''.
    (b) State Attorney General Enforcement.--Section 130(e) of the 
Truth in Lending Act (15 U.S.C. 1640(e)) is amended by adding at the 
end the following: ``An action to enforce a violation of section 129 
may also be brought by the appropriate State attorney general in any 
appropriate United States district court, or any other court of 
competent jurisdiction, not later than 3 years after the date on which 
the violation occurs. The State attorney general shall provide prior 
written notice of any such civil action to the Federal agency 
responsible for enforcement under section 108 and shall provide the 
agency with a copy of the complaint. If prior notice is not feasible, 
the State attorney general shall provide notice to such agency 
immediately upon instituting the action. The Federal agency may--
            ``(1) intervene in the action;
            ``(2) upon intervening--
                    ``(A) remove the action to the appropriate United 
                States district court, if it was not originally brought 
                there; and
                    ``(B) be heard on all matters arising in the 
                action; and
            ``(3) file a petition for appeal.''.
    (c) Assignee Liability.--Section 131 of the Truth in Lending Act 
(15 U.S.C. 1641) is amended by adding at the end the following new 
subsection:
    ``(d) Rights Upon Assignment of Certain Mortgages.--
            ``(1) In general.--Any person who purchases or is otherwise 
        assigned a mortgage referred to in section 103(aa) shall be 
        subject to all claims and defenses with respect to that 
        mortgage that the consumer could assert against the creditor of 
        the mortgage, unless the purchaser or assignee demonstrates, by 
        a preponderance of the evidence, that a reasonable person 
        exercising ordinary due diligence, could not determine, based 
        on the loan documentation required by this title, that the 
        mortgage was in fact a mortgage referred to in section 103(aa). 
        The preceding sentence does not affect a consumer's rights 
        under sections 125, 130, or any other provision of this title.
            ``(2) Limitation on damages.--Notwithstanding any other 
        provision of law, relief provided as a result of any action 
        made permissible by paragraph (1) may not exceed--
                    ``(A) with respect to actions based upon a 
                violation of this title, the amount specified in 
                section 130; and
                    ``(B) with respect to all other causes of action, 
                the sum of--
                            ``(i) the amount of all remaining 
                        indebtedness; and
                            ``(ii) the total amount paid by the 
                        consumer in connection with the transaction.
            ``(3) Offset.--The amount of damages that may be awarded 
        under paragraph (2)(B) shall be reduced by the amount of any 
        damages awarded under paragraph (2)(A).
            ``(4) Notice.--Any person who sells or otherwise assigns a 
        mortgage referred to in section 103(aa) shall include a 
        prominent notice of the potential liability under this 
        subsection as determined by the Board.''.

SEC. 153. REVERSE MORTGAGE DISCLOSURE.

    (a) Definition of Reverse Mortgage.--Section 103 of the Truth in 
Lending Act (15 U.S.C. 1602) is amended by adding at the end the 
following new subsection:
    ``(bb) The term `reverse mortgage transaction' means a nonrecourse 
transaction in which a mortgage, deed of trust, or equivalent 
consensual security interest is created against the consumer's 
principal dwelling--
            ``(1) securing one or more advances; and
            ``(2) with respect to which the payment of any principal, 
        interest, and shared appreciation is due and payable (other 
        than in the case of default) only after--
                    ``(A) the transfer of the dwelling;
                    ``(B) the consumer ceases to occupy the dwelling as 
                a principal dwelling; or
                    ``(C) the death of the consumer.''.
    (b) Disclosure.--Chapter 2 of title I of the Truth in Lending Act 
(15 U.S.C. 1631 et seq.) is amended by adding at the end the following 
new section:

``SEC. 138. REVERSE MORTGAGES.

    ``(a) In General.--In addition to the disclosures required under 
this title, for each reverse mortgage, the creditor shall, not less 
than 3 days prior to consummation of the transaction, disclose to the 
consumer in conspicuous type a good faith estimate of the projected 
total cost of the mortgage to the consumer expressed as a table of 
annual interest rates. Each annual interest rate shall be based on a 
projected total future loan balance under a projected appreciation rate 
for the dwelling and a term for the mortgage. The disclosure shall 
include--
            ``(1) statements of the annual interest rates for not less 
        than 3 projected appreciation rates and not less than 3 loan 
        periods, as determined by the Board, including--
                    ``(A) a short-term reverse mortgage;
                    ``(B) a term equaling the actuarial life expectancy 
                of the consumer; and
                    ``(C) such longer term as the Board deems 
                appropriate; and
            ``(2) a statement that the consumer is not obligated to 
        complete the reverse mortgage transaction merely because the 
        consumer has received the disclosure required under this 
        section or has signed a loan application.
    ``(b) Projected Total Cost.--In determining the projected total 
cost of the mortgage to be disclosed to the consumer under subsection 
(a), the creditor shall take into account--
            ``(1) any shared appreciation that the lender will, by 
        contract, be entitled to receive;
            ``(2) all costs and charges to the consumer, including the 
        costs of any associated annuity that the consumer elects or is 
        required to purchase as part of the reverse mortgage 
        transaction;
            ``(3) all payments to and for the benefit of the consumer, 
        including, in the case in which an associated annuity is 
        purchased (whether or not required by the lender as a condition 
        of making the reverse mortgage), the annuity payments received 
        by the consumer and financed from the proceeds of the loan, 
        instead of the proceeds used to finance the annuity; and
            ``(4) any limitation on the liability of the consumer under 
        reverse mortgage transactions (such as nonrecourse limits and 
        equity conservation agreements).''.
    (c) Table of Sections.--The table of sections at the beginning of 
chapter 2 of the Truth in Lending Act is amended by inserting after the 
item relating to section 137 the following:

``138. Reverse mortgages.''.

SEC. 154. REGULATIONS; EFFECTIVE DATE.

    (a) Regulations.--Not later than 180 days after the date of 
enactment of this Act, the Board of Governors of the Federal Reserve 
System shall issue such regulations as may be necessary to carry out 
this subtitle.
    (b) Effective Date.--This subtitle, and the amendments made by this 
subtitle, shall apply to every mortgage referred to in section 103(aa) 
of the Truth in Lending Act (as added by section 151(a) of this Act) 
consummated on or after the date which is 60 days after the 
promulgation of final regulations under subsection (a).

               TITLE II--SMALL BUSINESS CAPITAL FORMATION

             Subtitle A--Small Business Loan Securitization

SEC. 201. SHORT TITLE.

    This subtitle may be cited as the ``Small Business Loan 
Securitization and Secondary Market Enhancement Act of 1994''.

SEC. 202. SMALL BUSINESS RELATED SECURITY.

    Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)) is amended by adding at the end the following new paragraph:
            ``(53)(A) The term `small business related security' means 
        a security that is rated in 1 of the 4 highest rating 
        categories by at least 1 nationally recognized statistical 
        rating organization, and either--
                    ``(i) represents an interest in 1 or more 
                promissory notes or leases of personal property 
                evidencing the obligation of a small business concern 
                and originated by an insured depository institution, 
                insured credit union, insurance company, or similar 
                institution which is supervised and examined by a 
                Federal or State authority, or a finance company or 
                leasing company; or
                    ``(ii) is secured by an interest in 1 or more 
                promissory notes or leases of personal property (with 
                or without recourse to the issuer or lessee) and 
                provides for payments of principal in relation to 
                payments, or reasonable projections of payments, on 
                notes or leases described in clause (i).
            ``(B) For purposes of this paragraph--
                    ``(i) an `interest in a promissory note or a lease 
                of personal property' includes ownership rights, 
                certificates of interest or participation in such notes 
                or leases, and rights designed to assure servicing of 
                such notes or leases, or the receipt or timely receipt 
                of amounts payable under such notes or leases;
                    ``(ii) the term `small business concern' has the 
                same meaning as in section 3 of the Small Business Act;
                    ``(iii) the term `insured depository institution' 
                has the same meaning as in section 3 of the Federal 
                Deposit Insurance Act; and
                    ``(iv) the term `insured credit union' has the same 
                meaning as in section 101 of the Federal Credit Union 
                Act.''.

SEC. 203. APPLICABILITY OF MARGIN REQUIREMENTS.

    Section 7(g) of the Securities Exchange Act of 1934 (15 U.S.C. 
78g(g)) is amended by inserting ``or a small business related 
security'' after ``mortgage related security''.

SEC. 204. BORROWING IN THE COURSE OF BUSINESS.

    Section 8(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78h(a)) is amended in the last sentence by inserting ``or a small 
business related security'' after ``mortgage related security''.

SEC. 205. SMALL BUSINESS RELATED SECURITIES AS COLLATERAL.

    Clause (ii) of section 11(d)(1) of the Securities Exchange Act of 
1934 (15 U.S.C. 78k(d)(1)) is amended by inserting ``or any small 
business related security'' after ``mortgage related security''.

SEC. 206. INVESTMENT BY DEPOSITORY INSTITUTIONS.

    (a) Home Owners' Loan Act Amendment.--Section 5(c)(1) of the Home 
Owners' Loan Act (12 U.S.C. 1464(c)(1)) is amended by adding at the end 
the following new subparagraph:
                    ``(S) Small business related securities.--
                Investments in small business related securities (as 
                defined in section 3(a)(53) of the Securities Exchange 
                Act of 1934), subject to such regulations as the 
                Director may prescribe, including regulations 
                concerning the minimum size of the issue (at the time 
                of the initial distribution), the minimum aggregate 
                sales price, or both.''.
    (b) Credit Unions.--Section 107(15) of the Federal Credit Union Act 
(12 U.S.C. 1757(15)) is amended--
            (1) in subparagraph (A), by striking ``or'' at the end;
            (2) in subparagraph (B), by inserting ``or'' at the end; 
        and
            (3) by adding at the end the following new subparagraph:
                    ``(C) are small business related securities (as 
                defined in section 3(a)(53) of the Securities Exchange 
                Act of 1934), subject to such regulations as the Board 
                may prescribe, including regulations prescribing the 
                minimum size of the issue (at the time of the initial 
                distribution), the minimum aggregate sales price, or 
                both;''.
    (c) National Banking Associations.--Section 5136 of the Revised 
Statutes (12 U.S.C. 24) is amended in the last sentence in the first 
full paragraph of paragraph Seventh, by striking ``or (B) are mortgage 
related securities'' and inserting the following: ``(B) are small 
business related securities (as defined in section 3(a)(53) of the 
Securities Exchange Act of 1934); or (C) are mortgage related 
securities''.

SEC. 207. PREEMPTION OF STATE LAW.

    (a) In General.--Section 106(a)(1) of the Secondary Mortgage Market 
Enhancement Act of 1984 (15 U.S.C. 77r-1(a)(1)) is amended--
            (1) by striking ``or'' at the end of subparagraph (B);
            (2) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (3) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) small business related securities (as defined 
                in section 3(a)(53) of the Securities Exchange Act of 
                1934), or''.
    (b) Obligations of the United States.--Section 106(a)(2) of the 
Secondary Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-
1(a)(2)) is amended--
            (1) by striking ``or'' at the end of subparagraph (B);
            (2) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (3) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) small business related securities (as defined 
                in section 3(a)(53) of the Securities Exchange Act of 
                1934), or''.
    (c) Preemption of State Laws.--Section 106(c) of the Secondary 
Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-1(c)) is 
amended--
            (1) in the first sentence, by striking ``or that'' and 
        inserting ``, that''; and
            (2) by inserting ``, or that are small business related 
        securities (as defined in section 3(a)(53) of the Securities 
        Exchange Act of 1934)'' before ``shall be exempt''.
    (d) Implementation.--Section 106 of the Secondary Mortgage Market 
Enhancement Act of 1984 (15 U.S.C. 77r-1) is amended by adding at the 
end the following new subsection:
    ``(d) Implementation.--
            ``(1) Limitation.--The provisions of subsections (a) and 
        (b) concerning small business related securities shall not 
        apply with respect to a particular person, trust, corporation, 
        partnership, association, business trust, or business entity or 
        class thereof in any State that, prior to the expiration of 7 
        years after the date of enactment of this subsection, enacts a 
        statute that specifically refers to this section and either 
        prohibits or provides for a more limited authority to purchase, 
        hold, or invest in such small business related securities by 
        any person, trust, corporation, partnership, association, 
        business trust, or business entity or class thereof than is 
        provided in this section. The enactment by any State of any 
        statute of the type described in the preceding sentence shall 
        not affect the validity of any contractual commitment to 
        purchase, hold, or invest that was made prior to such 
        enactment, and shall not require the sale or other disposition 
        of any small business related securities acquired prior to the 
        date of such enactment.
            ``(2) State registration or qualification requirements.--
        Any State may, not later than 7 years after the date of 
        enactment of this subsection, enact a statute that specifically 
        refers to this section and requires registration or 
        qualification of any small business related securities on terms 
        that differ from those applicable to any obligation issued by 
        the United States.''.

SEC. 208. INSURED DEPOSITORY INSTITUTION CAPITAL REQUIREMENTS FOR 
              TRANSFERS OF SMALL BUSINESS OBLIGATIONS.

    (a) Accounting Principles.--The accounting principles applicable to 
the transfer of a small business loan or a lease of personal property 
with recourse contained in reports or statements required to be filed 
with Federal banking agencies by a qualified insured depository 
institution shall be consistent with generally accepted accounting 
principles.
    (b) Capital and Reserve Requirements.--With respect to the transfer 
of a small business loan or lease of personal property with recourse 
that is a sale under generally accepted accounting principles, each 
qualified insured depository institution shall--
            (1) establish and maintain a reserve equal to an amount 
        sufficient to meet the reasonable estimated liability of the 
        institution under the recourse arrangement; and
            (2) include, for purposes of applicable capital standards 
        and other capital measures, only the amount of the retained 
        recourse in the risk-weighted assets of the institution.
    (c) Qualified Institutions Criteria.--An insured depository 
institution is a qualified insured depository institution for purposes 
of this section if, without regard to the accounting principles or 
capital requirements referred to in subsections (a) and (b), the 
institution is--
            (1) well capitalized; or
            (2) with the approval, by regulation or order, of the 
        appropriate Federal banking agency, adequately capitalized.
    (d) Aggregate Amount of Recourse.--The total outstanding amount of 
recourse retained by a qualified insured depository institution with 
respect to transfers of small business loans and leases of personal 
property under subsections (a) and (b) shall not exceed--
            (1) 15 percent of the risk-based capital of the 
        institution; or
            (2) such greater amount, as established by the appropriate 
        Federal banking agency by regulation or order.
    (e) Institutions That Cease To Be Qualified or Exceed Aggregate 
Limits.--If an insured depository institution ceases to be a qualified 
insured depository institution or exceeds the limits under subsection 
(d), this section shall remain applicable to any transfers of small 
business loans or leases of personal property that occurred during the 
time that the institution was qualified and did not exceed such limit.
    (f) Prompt Corrective Action Not Affected.--The capital of an 
insured depository institution shall be computed without regard to this 
section in determining whether the institution is adequately 
capitalized, undercapitalized, significantly undercapitalized, or 
critically undercapitalized under section 38 of the Federal Deposit 
Insurance Act.
    (g) Regulations Required.--Not later than 180 days after the date 
of the enactment of this Act each appropriate Federal banking agency 
shall promulgate final regulations implementing this section.
    (h) Alternative System Permitted.--
            (1) In general.--At the discretion of the appropriate 
        Federal banking agency, this section shall not apply if the 
        regulations of the agency provide that the aggregate amount of 
        capital and reserves required with respect to the transfer of 
        small business loans and leases of personal property with 
        recourse does not exceed the aggregate amount of capital and 
        reserves that would be required under subsection (b).
            (2) Existing transactions not affected.--Notwithstanding 
        paragraph (1), this section shall remain in effect with respect 
        to transfers of small business loans and leases of personal 
        property with recourse by qualified insured depository 
        institutions occurring before the effective date of regulations 
        referred to in paragraph (1).
    (i) Definitions.--For purposes of this section--
            (1) the term ``adequately capitalized'' has the same 
        meaning as in section 38(b) of the Federal Deposit Insurance 
        Act;
            (2) the term ``appropriate Federal banking agency'' has the 
        same meaning as in section 3 of the Federal Deposit Insurance 
        Act;
            (3) the term ``capital standards'' has the same meaning as 
        in section 38(c) of the Federal Deposit Insurance Act;
            (4) the term ``Federal banking agencies'' has the same 
        meaning as in section 3 of the Federal Deposit Insurance Act;
            (5) the term ``insured depository institution'' has the 
        same meaning as in section 3 of the Federal Deposit Insurance 
        Act;
            (6) the term ``other capital measures'' has the meaning as 
        in section 38(c) of the Federal Deposit Insurance Act;
            (7) the term ``recourse'' has the meaning given to such 
        term under generally accepted accounting principles;
            (8) the term ``small business'' means a business that meets 
        the criteria for a small business concern established by the 
        Small Business Administration under section 3(a) of the Small 
        Business Act; and
            (9) the term ``well capitalized'' has the same meaning as 
        in section 38(b) of the Federal Deposit Insurance Act.

SEC. 209. TRANSACTIONS IN SMALL BUSINESS RELATED SECURITIES BY EMPLOYEE 
              BENEFIT PLANS.

    (a) Prohibited Transaction Exemption.--The Secretary of Labor, in 
consultation with the Secretary of the Treasury, may exempt 
transactions involving small business related securities (as defined in 
section 3(a)(53) of the Securities Exchange Act of 1934, as added by 
section 202 of this Act) pursuant to section 408(a) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1108(a)) and section 
4975(c)(2) of the Internal Revenue Code of 1986.
    (b) Consideration of Exemption Requests.--The Secretary of Labor 
shall consider any request for exemption under subsection (a) within a 
reasonable period of time after receipt of such request.

SEC. 210. SENSE OF THE SENATE ON TAXATION OF SMALL BUSINESS LOAN 
              INVESTMENT CONDUITS.

    (a) Sense of the Senate.--It is the sense of the Senate that the 
taxation of a small business loan investment conduit and the holder of 
an interest therein should be similar to the taxation of a real estate 
mortgage investment conduit and the holder of an interest therein under 
the Internal Revenue Code of 1986, taking into account, as 
appropriate--
            (1) the purpose of facilitating the securitization of small 
        business loans and leases or personal property through the use 
        of small business loan investment conduits and the development 
        of a secondary market in small business loans and leases of 
        personal property;
            (2) differences in the nature of qualifying mortgages in a 
        real estate mortgage investment conduit and small business 
        loans and leases of personal property;
            (3) differences in the practices of participants in the 
        securitization of real estate mortgages in a real estate 
        mortgage investment conduit and the securitization of other 
        assets; and
            (4) such other tax policies as may be warranted.
    (b) Small Business Loan Investment Conduit Defined.--For purposes 
of this section, the term ``small business loan investment conduit'' 
means an entity substantially all of the assets of which consist of an 
interest in one or more promissory notes as leases of personal property 
evidencing obligations--
            (1) of a business that meets the criteria of a small 
        business concern established under section 3(a) of the Small 
        Business Act; and
            (2) that were originated by an insured depository 
        institution (as defined in section 3 of the Federal Deposit 
        Insurance Act), credit union, insurance company, or similar 
        institution which is supervised and examined by a Federal or 
        State authority, or a finance company or leasing company.

             Subtitle B--Small Business Capital Enhancement

SEC. 251. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) small business concerns are a vital part of the 
        economy, accounting for the majority of new jobs, new products, 
        and new services created in the United States;
            (2) adequate access to debt capital is a critical component 
        for small business development, productivity, expansion, and 
        success in the United States;
            (3) commercial banks are the most important suppliers of 
        debt capital to small business concerns in the United States;
            (4) commercial banks and other depository institutions have 
        various incentives to minimize their risk in financing small 
        business concerns;
            (5) as a result of such incentives, many small business 
        concerns with economically sound financing needs are unable to 
        obtain access to needed debt capital;
            (6) the small business capital access programs implemented 
        by certain States are a flexible and efficient tool to assist 
        financial institutions in providing access to needed debt 
        capital for many small business concerns in a manner consistent 
        with safety and soundness regulations;
            (7) a small business capital access program would 
        complement other programs which assist small business concerns 
        in obtaining access to capital; and
            (8) Federal policy can stimulate and accelerate efforts by 
        States to implement small business capital access programs by 
        providing an incentive to States, while leaving the 
        administration of such programs to each participating State.
    (b) Purposes.--By encouraging States to implement administratively 
efficient capital access programs that encourage commercial banks and 
other depository institutions to provide access to debt capital for a 
broad portfolio of small business concerns, and thereby promote a more 
efficient and effective debt market, the purposes of this subtitle 
are--
            (1) to promote economic opportunity and growth;
            (2) to create jobs;
            (3) to promote economic efficiency;
            (4) to enhance productivity; and
            (5) to spur innovation.

SEC. 252. DEFINITIONS.

    For purposes of this subtitle--
            (1) the term ``Secretary'' means the Secretary of Housing 
        and Urban Development;
            (2) the term ``appropriate Federal banking agency''--
                    (A) has the same meaning as in section 3 of the 
                Federal Deposit Insurance Act; and
                    (B) includes the National Credit Union 
                Administration Board in the case of any credit union 
                the deposits of which are insured in accordance with 
                the Federal Credit Union Act;
            (3) the term ``early loan'' means a loan enrolled at a time 
        when the aggregate covered amount of loans previously enrolled 
        under the Program by a particular participating financial 
        institution is less than $5,000,000;
            (4) the term ``enrolled loan'' means a loan made by a 
        participating financial institution that is enrolled by a 
        participating State in accordance with this subtitle;
            (5) the term ``financial institution'' means any federally 
        chartered or State-chartered commercial bank, savings 
        association, savings bank, or credit union;
            (6) the term ``participating financial institution'' means 
        any financial institution that has entered into a participation 
        agreement with a participating State in accordance with section 
        254;
            (7) the term ``participating State'' means any State that 
        has been approved for participation in the Program in 
        accordance with section 253;
            (8) the term ``passive real estate ownership'' means 
        ownership of real estate for the purpose of deriving income 
        from speculation, trade, or rental, except that such term shall 
        not include--
                    (A) the ownership of that portion of real estate 
                being used or intended to be used for the operation of 
                the business of the owner of the real estate (other 
                than the business of passive ownership of real estate); 
                or
                    (B) the ownership of real estate for the purpose of 
                construction or renovation, until the completion of the 
                construction or renovation phase;
            (9) the term ``Program'' means the Small Business Capital 
        Enhancement Program established under this subtitle;
            (10) the term ``reserve fund'' means a fund, established by 
        a participating State, earmarked for a particular participating 
        financial institution, for the purposes of--
                    (A) depositing all required premium charges paid by 
                the participating financial institution and by each 
                borrower receiving a loan under the Program from a 
                participating financial institution;
                    (B) depositing contributions made by the 
                participating State; and
                    (C) covering losses on enrolled loans by disbursing 
                accumulated funds; and
            (11) the term ``State'' means--
                    (A) a State of the United States;
                    (B) the District of Columbia;
                    (C) any political subdivision of a State of the 
                United States, which subdivision has a population in 
                excess of the population of the least populated State 
                of the United States; and
                    (D) any other political subdivision of a State of 
                the United States that the Secretary determines has the 
                capacity to participate in the program.

SEC. 253. APPROVING STATES FOR PARTICIPATION.

    (a) Application.--Any State may apply to the Secretary for approval 
to be a participating State under the Program and to be eligible for 
reimbursement by the Secretary pursuant to section 257.
    (b) Approval Criteria.--The Secretary shall approve a State to be a 
participating State, if--
            (1) a specific department or agency of the State has been 
        designated to implement the Program;
            (2) all legal actions necessary to enable such designated 
        department or agency to implement the Program have been 
        accomplished;
            (3) funds in the amount of at least $1 for every 2 people 
        residing in the State (as of the last decennial census for 
        which data have been released) are available and have been 
        legally committed to contributions by the State to reserve 
        funds, with such funds being available without time limit and 
        without requiring additional legal action, except that such 
        requirements shall not be construed to limit the authority of 
        the State to take action at a later time that results in the 
        termination of its obligation to enroll loans and make 
        contributions to reserve funds;
            (4) the State has prescribed a form of participation 
        agreement to be entered into between it and each participating 
        financial institution that is consistent with the requirements 
        and purposes of this subtitle; and
            (5) the State and the Secretary have executed a 
        reimbursement agreement that conforms to the requirements of 
        this subtitle.
    (c) Existing State Programs.--
            (1) In general.--A State that is not a participating State, 
        but that has its own capital access program providing portfolio 
        insurance for business loans (based on a separate loss reserve 
        fund for each financial institution), may apply at any time to 
        the Secretary to be approved to be a participating State. The 
        Secretary shall approve such State to be a participating State, 
        and to be eligible for reimbursements by the Secretary pursuant 
        to section 257, if the State--
                    (A) satisfies the requirements of subsections (a) 
                and (b); and
                    (B) certifies that each affected financial 
                institution has satisfied the requirements of section 
                254.
            (2) Applicable terms of participation.--
                    (A) Status of institutions.--If a State is approved 
                for participation under paragraph (1), each financial 
                institution with a participation agreement in effect 
                with the participating State shall immediately be 
                considered a participating financial institution. 
                Reimbursements may be made under section 237 in 
                connection with all contributions made to the reserve 
                fund by the State in connection with lending that 
                occurs on or after the date on which the Secretary 
                approves the State for participation.
                    (B) Effective date of participation.--If an amended 
                participation agreement that conforms with section 255 
                is required in order to secure participation approval 
                by the Secretary, contributions subject to 
                reimbursement under section 257 shall include only 
                those contributions made to a reserve fund with respect 
                to loans enrolled on or after the date that an amended 
                participation agreement between the participating State 
                and the participating financial institution becomes 
                effective.
                    (C) Use of accumulated reserve funds.--A State that 
                is approved for participation in accordance with this 
                subsection may continue to implement the program 
                utilizing the reserve funds accumulated under the State 
                program.
    (d) Prior Appropriations Requirement.--The Secretary shall not 
approve a State for participation in the Program until at least 
$50,000,000 has been appropriated to the Secretary (subject to an 
appropriations Act), without fiscal year limitation, for the purpose of 
making reimbursements pursuant to section 257.
    (e) Amendments to Agreements.--If a State that has been approved to 
be a participating State wishes to amend its form of participation 
agreement and continue to be a participating State, such State shall 
submit such amendment for review by the Secretary in accordance with 
subsection (b)(4). Any such amendment shall become effective only after 
it has been approved by the Secretary.

SEC. 254. PARTICIPATION AGREEMENTS.

    (a) In General.--A participating State may enter into a 
participation agreement with any financial institution determined by 
the participating State, after consultation with the appropriate 
Federal banking agency, to have sufficient commercial lending 
experience and financial and managerial capacity to participate in the 
Program. The determination by the State shall not be reviewable by the 
Secretary.
    (b) Participating Financial Institutions.--Upon entering into the 
participation agreement with the participating State, the financial 
institution shall become a participating financial institution eligible 
to enroll loans under the Program.

SEC. 255. TERMS OF PARTICIPATION AGREEMENTS.

    (a) In General.--The participation agreement to be entered into by 
a participating State and a participating financial institution shall 
include all provisions required by this section, and shall not include 
any provisions inconsistent with the provisions of this section.
    (b) Establishment of Separate Reserve Funds.--A separate reserve 
fund shall be established by the participating State for each 
participating financial institution. All funds credited to a reserve 
fund shall be the exclusive property of the participating State. Each 
reserve fund shall be an administrative account for the purposes of--
            (1) receiving all required premium charges to be paid by 
        the borrower and participating financial institution and 
        contributions by the participating State; and
            (2) disbursing funds, either to cover losses sustained by 
        the participating financial institution in connection with 
        loans made under the Program, or as contemplated by subsections 
        (d) and (r).
    (c) Investment Authority.--Subject to applicable State law, the 
participating State may invest, or cause to be invested, funds held in 
a reserve fund by establishing a deposit account at the participating 
financial institution in the name of the participating State. In the 
event that funds in the reserve fund are not deposited in such an 
account, such funds shall be invested in a form that the participating 
State determines is safe and liquid.
    (d) Earned Income and Interest.--Interest or income earned on the 
funds credited to a reserve fund shall be deemed to be part of the 
reserve fund, except that a participating State may, as further 
specified in the participation agreement, provide authority for the 
participating State to withdraw some or all of such interest or income 
earned.
    (e) Loan Terms and Conditions.--
            (1) In general.--A loan to be filed for enrollment under 
        the Program may be made with such interest rate, fees, and 
        other terms and conditions as agreed upon by the participating 
        financial institution and the borrower, consistent with 
        applicable law.
            (2) Lines of credit.--If a loan to be filed for enrollment 
        is in the form of a line of credit, the amount of the loan 
        shall be considered to be the maximum amount that can be drawn 
        by the borrower against the line of credit.
    (f) Enrollment Process.--
            (1) Filing.--
                    (A) In general.--A participating financial 
                institution shall file each loan made under the Program 
                for enrollment by completing and submitting to the 
                participating State a form prescribed by the 
                participating State.
                    (B) Form.--The form referred to in subparagraph (A) 
                shall include a representation by the participating 
                financial institution that it has complied with the 
                participation agreement in enrolling the loan with the 
                State.
                    (C) Premium charges.--Accompanying the completed 
                form shall be the nonrefundable premium charges paid by 
                the borrower and the participating financial 
                institution, or evidence that such premium charges have 
                been deposited into the deposit account containing the 
                reserve fund, if applicable.
                    (D) Submission.--The participation agreement shall 
                require that the items required by this subsection 
                shall be submitted to the participating State by the 
                participating financial institutions not later than 10 
                calendar days after a loan is made.
            (2) Enrollment by state.--Upon receipt by the participating 
        State of the filing submitted in accordance with paragraph (1), 
        the participating State shall promptly enroll the loan and make 
        a matching contribution to the reserve fund in accordance with 
        subsection (j), unless the information submitted indicates that 
        the participating financial institution has not complied with 
        the participation agreement in enrolling the loan.
    (g) Coverage Amount.--In filing a loan for enrollment under the 
Program, the participating financial institution may specify an amount 
to be covered under the Program that is less than the full amount of 
the loan.
    (h) Premium Charges.--
            (1) Minimum and maximum amounts.--The premium charges 
        payable to the reserve fund by the borrower and the 
        participating financial institution shall be prescribed by the 
        participating financial institution, within minimum and maximum 
        limits set forth in the participation agreement. The 
        participation agreement shall establish minimum and maximum 
        limits whereby the sum of the premium charges paid in 
        connection with a loan by the borrower and the participating 
        financial institution is not less than 3 percent nor more than 
        7 percent of the amount of the loan covered under the Program.
            (2) Allocation of premium charges.--The participation 
        agreement shall specify terms for allocating premium charges 
        between the borrower and the participating financial 
        institution. However, if the participating financial 
        institution is required to pay any of the premium charges, the 
        participation agreement shall authorize the participating 
        financial institution to recover from the borrower the cost of 
        the payment of the participating financial institution, in any 
        manner on which the participating financial institution and the 
        borrower agree.
    (i) Restrictions.--
            (1) Actions prohibited.--Except as provided in subsection 
        (h) and paragraph (2) of this subsection, the participating 
        State may not--
                    (A) impose any restrictions or requirements, 
                relating to the interest rate, fees, collateral, or 
                other business terms and conditions of the loan; or
                    (B) condition enrollment of a loan in the Program 
                on the review by the State of the risk or 
                creditworthiness of a loan.
            (2) Effect on other law.--Nothing in this subtitle shall 
        affect the applicability of any other law to the conduct by a 
        participating financial institution of its business.
    (j) State Contributions.--In enrolling a loan under the Program, 
the participating State shall contribute to the reserve fund an amount, 
as provided for in the participation agreement, which shall not be less 
than the sum of the amount of premium charges paid by the borrower and 
the participating financial institution.
    (k) Elements of Claims.--
            (1) Filing.--If a participating financial institution 
        charges off all or part of an enrolled loan, such participating 
        financial institution may file a claim for reimbursement with 
        the participating State by submitting a form that--
                    (A) includes the representation by the 
                participating financial institution that it is filing 
                the claim in accordance with the terms of the 
                applicable participation agreement; and
                    (B) contains such other information as may be 
                required by the participating State.
            (2) Timing.--Any claim filed under paragraph (1) shall be 
        filed contemporaneously with the action of the participating 
        financial institution to charge off all or part of an enrolled 
        loan. The participating financial institution shall determine 
        when and how much to charge off on an enrolled loan, in a 
        manner consistent with its usual method for making such 
        determinations on business loans that are not enrolled loans 
        under this subtitle.
    (l) Elements of Claims.--A claim filed by a participating financial 
institution may include the amount of principal charged off, not to 
exceed the covered amount of the loan. Such claim may also include 
accrued interest and out-of-pocket expenses, if and to the extent 
provided for under the participation agreement.
    (m) Payment of Claims.--
            (1) In general.--Except as provided in subsection (n) and 
        paragraph (2) of this subsection, upon receipt of a claim filed 
        in accordance with this section and the participation 
        agreement, the participating State shall promptly pay to the 
        participating financial institution, from funds in the reserve 
        fund, the full amount of the claim as submitted.
            (2) Insufficient reserve funds.--If there are insufficient 
        funds in the reserve fund to cover the entire amount of a claim 
        of a participating financial institution, the participating 
        State shall pay to the participating financial institution an 
        amount equal to the current balance in the reserve fund. If the 
        enrolled loan for which the claim has been filed--
                    (A) is not an early loan, such payment shall be 
                deemed fully to satisfy the claim, and the 
                participating financial institution shall have no other 
                or further right to receive any amount from the reserve 
                fund with respect to such claim; or
                    (B) is an early loan, such payment shall not be 
                deemed fully to satisfy the claim of the participating 
                financial institution, and at such time as the 
                remaining balance of the claim does not exceed 75 
                percent of the balance in the reserve fund, the 
                participating State shall, upon the request of the 
                participating financial institution, pay any remaining 
                amount of the claim.
    (n) Denial of Claims.--A participating State may deny a claim if a 
representation or warranty made by the participating financial 
institution to the participating State at the time that the loan was 
filed for enrollment or at the time that the claim was submitted was 
known by the participating financial institution to be false.
    (o) Subsequent Recovery of Claim Amount.--If, subsequent to payment 
of a claim by the participating State, a participating financial 
institution recovers from a borrower any amount for which payment of 
the claim was made, the participating financial institution shall 
promptly pay to the participating State for deposit into the reserve 
fund the amount recovered, less any expenses incurred by the 
institution in collection of such amount.
    (p) Participation Agreement Terms.--
            (1) In general.--In connection with the filing of a loan 
        for enrollment in the Program, the participation agreement--
                    (A) shall require the participating financial 
                institution to obtain an assurance from each borrower 
                that--
                            (i) the proceeds of the loan will be used 
                        for a business purpose;
                            (ii) the loan will not be used to finance 
                        passive real estate ownership; and
                            (iii) the borrower is not--
                                    (I) an executive officer, director, 
                                or principal shareholder of the 
                                participating financial institution;
                                    (II) a member of the immediate 
                                family of an executive officer, 
                                director, or principal shareholder of 
                                the participating financial 
                                institution; or
                                    (III) a related interest of any 
                                such executive officer, director, 
                                principal shareholder, or member of the 
                                immediate family;
                    (B) shall require the participating financial 
                institution to provide assurances to the participating 
                State that the loan has not been made in order to place 
                under the protection of the Program prior debt that is 
                not covered under the Program and that is or was owed 
                by the borrower to the participating financial 
                institution or to an affiliate of the participating 
                financial institution;
                    (C) may provide that if--
                            (i) a participating financial institution 
                        makes a loan to a borrower that is a 
                        refinancing of a loan previously made to the 
                        borrower by the participating financial 
                        institution or an affiliate of the 
                        participating financial institution;
                            (ii) such prior loan was not enrolled in 
                        the Program; and
                            (iii) additional or new financing is 
                        extended by the participating financial 
                        institution as part of the refinancing,
                the participating financial institution may file the 
                loan for enrollment, with the amount to be covered 
                under the Program not to exceed the amount of any 
                additional or new financing; and
                    (D) may include additional restrictions on the 
                eligibility of loans or borrowers that are not 
                inconsistent with the provisions and purposes of this 
                subtitle.
            (2) Definitions.--For purposes of this subsection, the 
        terms ``executive officer'', ``director'', ``principal 
        shareholder'', ``immediate family'', and ``related interest'' 
        refer to the same relationship to a participating financial 
        institution as the relationship described in part 215 of title 
        12 of the Code of Federal Regulations, or any successor to such 
        part.
    (q) Termination Clause.--In each participation agreement, the 
participating State shall reserve for itself the ability to terminate 
its obligation to enroll loans under the Program. Any such termination 
shall be prospective only, and shall not apply to amounts of loans 
enrolled under the Program prior to such termination.
    (r) Allowable Withdrawals From Fund.--
            The participation agreement may provide that, if, for any 
        consecutive period of not less than 24 months, the aggregate 
        outstanding balance of all enrolled loans for a participating 
        financial institution is continually less than the outstanding 
        balance in the reserve fund for that participating financial 
        institution, the participating State, in its discretion, may 
        withdraw an amount from the reserve fund to bring the balance 
        in the reserve fund down to the outstanding balance of all such 
        enrolled loans.
    (s) Grandfathered Provision.--
            (1) Special treatment of premium charges.--Notwithstanding 
        subsection (b) or (d), the participation agreement, if 
        explicitly authorized by a statute enacted by the State before 
        the date of enactment of this Act, may allow a participating 
        financial institution to treat the premium charges paid by the 
        participating financial institution and the borrower into the 
        reserve fund, and interest or income earned on funds in the 
        reserve fund that are deemed to be attributable to such premium 
        charges, as assets of the participating financial institution 
        for accounting purposes, subject to withdrawal by the 
        participating financial institution only--
                    (A) for the payment of claims approved by the 
                participating State in accordance with this section; 
                and
                    (B) upon the participating financial institution's 
                withdrawal from authority to make new loans under the 
                Program.
            (2) Payment of post-withdrawal claims.--After any 
        withdrawal of assets from the reserve fund pursuant to 
        paragraph (1)(B), any future claims filed by the participating 
        financial institution on loans remaining in its capital access 
        program portfolio shall only be paid from funds remaining in 
        the reserve fund to the extent that, in the aggregate, such 
        claims exceed the sum of the amount of such withdrawn assets, 
        and interest on that amount, imputed at the same rate as income 
        would have accrued had the amount not been withdrawn.
            (3) Conditions for terminating special authority.--If the 
        Secretary determines that the inclusion in a participation 
        agreement of the provisions authorized by this subsection is 
        resulting in the enrollment of loans under the Program that are 
        likely to have been made without assistance provided under this 
        subtitle, the Secretary may notify the participating State that 
        henceforth, the Secretary will only make reimbursements to the 
        State under section 257 with respect to a loan if the 
        participation agreement between the participating State and 
        each participating financial institution has been amended to 
        conform with this section, without exercise of the special 
        authority granted by this subsection.

SEC. 256. REPORTS.

    (a) Reserve Funds Report.--On or before the last day of each 
calendar quarter, a participating State shall submit to the Secretary a 
report of contributions to reserve funds made by the participating 
State during the previous calendar quarter. If the participating State 
has made contributions to one or more reserve funds during the previous 
quarter, the report shall--
            (1) indicate the total amount of such contributions;
            (2) indicate the amount of contributions which is subject 
        to reimbursement, which shall be equal to the total amount of 
        contributions, unless one of the limitations contained in 
        section 257 is applicable;
            (3) if one of the limitations in section 257 is applicable, 
        provide documentation of the applicability of such limitation 
        for each loan for which the limitation applies; and
            (4) include a certification by the participating State 
        that--
                    (A) the information provided in accordance with 
                paragraphs (1), (2), and (3) is accurate;
                    (B) funds in an amount meeting the minimum 
                requirements of section 253(b)(3) continue to be 
                available and legally committed to contributions by the 
                State to reserve funds, less any amount that has been 
                contributed by the State to reserve funds subsequent to 
                the State being approved for participation in the 
                Program;
                    (C) there has been no unapproved amendment to any 
                participation agreement or the form of participation 
                agreements; and
                    (D) the participating State is otherwise 
                implementing the Program in accordance with this 
                subtitle and regulations issued pursuant to section 
                259.
    (b) Annual Data.--Not later than March 31 of each year, each 
participating State shall submit to the Secretary annual data 
indicating the number of borrowers financed under the Program, the 
total amount of covered loans, and breakdowns by industry type, loan 
size, annual sales, and number of employees of the borrowers financed.
    (c) Form.--The reports and data filed pursuant to subsections (a) 
and (b) shall be in such form as the Secretary may require.

SEC. 257. REIMBURSEMENT BY THE SECRETARY.

    (a) Reimbursements.--Not later than 30 calendar days after 
receiving a report filed in compliance with section 256, the Secretary 
shall reimburse the participating State in an amount equal to 50 
percent of the amount of contributions by the participating State to 
the reserve funds that are subject to reimbursement by the Secretary 
pursuant to section 256 and this section. The Secretary shall reimburse 
participating States, as it receives reports pursuant to section 
256(a), until available funds are expended.
    (b) Size of Assisted Borrower.--The Secretary shall not provide any 
reimbursement to a participating State with respect to an enrolled loan 
made to a borrower that has 500 or more employees at the time that the 
loan is enrolled in the Program.
    (c) Three-Year Maximum.--The amount of reimbursement to be provided 
by the Secretary to a participating State over any 3-year period in 
connection with loans made to any single borrower or any group of 
borrowers among which a common enterprise exists shall not exceed 
$75,000. For purposes of this subsection, ``common enterprise'' shall 
have the same meaning as in part 32 of title 12 of the Code of Federal 
Regulations, or any successor to that part.
    (d) Loans Totaling Less Than $2,000,000.--In connection with a loan 
in which the covered amount of the loan plus the covered amount of all 
previous loans enrolled by a participating financial institution does 
not exceed $2,000,000, the amount of reimbursement by the Secretary to 
the participating State shall not exceed the lesser of--
            (1) 75 percent of the sum of the premium charges paid to 
        the reserve fund by the borrower and the participating 
        financial institution; or
            (2) 5.25 percent of the covered amount of the loan.
    (e) Loans Totaling More Than $2,000,000.--In connection with a loan 
in which the sum of the covered amounts of all previous loans enrolled 
by the participating financial institution in the Program equals or 
exceeds $2,000,000, the amount of reimbursement to be provided by the 
Secretary to the participating State shall not exceed the lesser of--
            (1) 50 percent of the sum of the premium charges paid by 
        the borrower and the participating financial institution; or
            (2) 3.5 percent of the covered amount of the loan.
    (f) Other Amounts.--In connection with the enrollment of a loan 
that will cause the aggregate covered amount of all enrolled loans to 
exceed $2,000,000, the amount of reimbursement by the Secretary to the 
participating State shall be determined--
            (1) by applying subsection (d) to the portion of the loan, 
        which when added to the aggregate covered amount of all 
        previously enrolled loans equals $2,000,000; and
            (2) by applying subsection (e) to the balance of the loan.

SEC. 258. REIMBURSEMENT TO THE SECRETARY.

    (a) In General.--If a participating State withdraws funds from a 
reserve fund pursuant to terms of the participation agreement permitted 
by subsection (d) or (r) of section 255, such participating State 
shall, not later than 15 calendar days after such withdrawal, submit to 
the Secretary an amount computed by multiplying the amount withdrawn by 
the appropriate factor, as determined under subsection (b).
    (b) Factor.--The appropriate factor shall be obtained by dividing 
the total amount of contributions that have been made by the 
participating State to all reserve funds which were subject to 
reimbursement--
            (1) by 2; and
            (2) by the total amount of contributions made by the 
        participating State to all reserve funds, including if 
        applicable, contributions that have been made by the State 
        prior to becoming a participating State if the State continued 
        its own capital access program in accordance with section 
        253(b).
    (c) Use of Reimbursements.--The Secretary may use funds reimbursed 
pursuant to this section to make reimbursements under section 257.

SEC. 259. REGULATIONS.

    The Secretary shall promulgate appropriate regulations to implement 
this subtitle.

SEC. 260. AUTHORIZATION OF APPROPRIATIONS.

    (a) Amount.--There are authorized to be appropriated to the 
Secretary $50,000,000 to carry out this subtitle.
    (b) Budgetary Treatment.--The amount authorized to be appropriated 
under subsection (a) shall be subject to discretionary spending caps, 
as provided in section 601 of the Congressional Budget Act of 1974, and 
therefore shall reduce by an equal amount funds made available for 
other discretionary spending programs.

       TITLE III--PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT

SEC. 301. INCORPORATED DEFINITIONS.

    Unless otherwise specifically provided in this title, for purposes 
of this title--
            (1) the terms ``appropriate Federal banking agency'', 
        ``Federal banking agencies'', and ``insured depository 
        institution'' have the same meanings as in section 3 of the 
        Federal Deposit Insurance Act; and
            (2) the term ``insured credit union'' has the same meaning 
        as in section 101 of the Federal Credit Union Act.

SEC. 302. ADMINISTRATIVE CONSIDERATION OF BURDEN WITH NEW REGULATIONS.

    In determining the effective date and administrative compliance 
requirements for new regulations that impose additional reporting, 
disclosure, or other requirements on insured depository institutions, 
each Federal banking agency shall consider, consistent with the 
principles of safety and soundness and the public interest--
            (1) any administrative burdens that such regulations would 
        place on depository institutions, including small depository 
        institutions, and customers of depository institutions; and
            (2) the benefits of such regulations.

SEC. 303. STREAMLINING OF REGULATORY REQUIREMENTS.

    (a) Review of Regulations; Regulatory Uniformity.--During the 2-
year period beginning on the date of enactment of this Act, each 
Federal banking agency shall, consistent with principles of safety and 
soundness and the public interest--
            (1) conduct a review of the regulations and written 
        policies of that agency--
                    (A) to streamline those regulations and policies in 
                order to improve efficiency, reduce unnecessary costs, 
                and eliminate unwarranted constraints on credit 
                availability; and
                    (B) to remove inconsistencies and outmoded and 
                duplicative requirements; and
            (2) work jointly with the other Federal banking agencies to 
        make uniform all regulations and guidelines implementing common 
        statutory or supervisory policies.
    (b) Report to Congress.--The Federal banking agencies shall submit 
a joint report to the Congress annually for 2 years following the date 
of enactment of this Act detailing the progress of the agencies in 
carrying out the requirements of subsection (a).

SEC. 304. ELIMINATION OF DUPLICATIVE FILINGS.

    The Federal banking agencies shall work jointly--
            (1) to eliminate, to the extent practicable, duplicative or 
        otherwise unnecessary requests for information in connection 
        with applications or notices to the agencies; and
            (2) to harmonize, to the extent practicable, any 
        inconsistent publication and public notice requirements.

SEC. 305. COORDINATED AND UNIFIED EXAMINATIONS.

    Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 
1820(d)) is amended by adding at the end the following new paragraph:
            ``(6) Coordinated examinations.--To minimize the disruptive 
        effects of examinations on the operations of insured depository 
        institutions--
                    ``(A) each appropriate Federal banking agency 
                shall, to the extent practicable and consistent with 
                safety and soundness principles and the public 
                interest--
                            ``(i) coordinate examinations to be 
                        conducted by that agency at an insured 
                        depository institution and its affiliates;
                            ``(ii) coordinate with the other 
                        appropriate Federal banking agencies in the 
                        conduct of such examinations; and
                            ``(iii) work to coordinate the conduct of 
                        all examinations made pursuant to this 
                        subsection with the appropriate State bank 
                        supervisor; and
                    ``(B) not later than 2 years after the date of 
                enactment of the Community Development, Credit 
                Enhancement, and Regulatory Improvement Act of 1993, 
                the Federal banking agencies shall jointly establish 
                and implement a system for determining which one of the 
                Federal banking agencies shall conduct a unified 
                examination of each insured depository institution and 
                its affiliates, as required by this subsection, on 
                behalf of all Federal banking agencies.''.

SEC. 306. EIGHTEEN-MONTH EXAMINATION RULE FOR CERTAIN SMALL 
              INSTITUTIONS.

    Section 10(d)(4) of the Federal Deposit Insurance Act (12 U.S.C. 
1820(d)(4)) is amended--
            (1) in subparagraph (A), by striking ``$100,000,000'' and 
        inserting ``$250,000,000'';
            (2) in subparagraph (C), by striking ``and its composite 
        condition was found to be outstanding;'' and inserting ``and 
        its composite condition--
                            ``(i) was found to be outstanding; or
                            ``(ii) in the case of an insured depository 
                        institution that has total assets of less than 
                        $175,000,000, was found to be outstanding or 
                        good;''.
            (3) by redesignating subparagraph (D) as subparagraph (E); 
        and
            (4) by inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(D) the insured institution is not currently 
                subject to a formal enforcement proceeding or order by 
                the Corporation or the appropriate Federal banking 
                agency; and''.

SEC. 307. CALL REPORT SIMPLIFICATION.

    (a) Modernization of Call Report Filing and Disclosure System.--In 
order to reduce the administrative requirements pertaining to bank 
reports of condition, savings association financial reports, and bank 
holding company consolidated and parent-only financial statements, and 
to improve the timeliness of such reports and statements, the Federal 
banking agencies shall--
            (1) work jointly to develop a system under which--
                    (A) insured depository institutions and their 
                affiliates may file such reports and statements 
                electronically; and
                    (B) the Federal banking agencies may make such 
                reports and statements available to the public 
                electronically; and
            (2) not later than 1 year after the date of enactment of 
        this Act, report to the Congress and make recommendations for 
        legislation that would enhance efficiency for filers and users 
        of such reports and statements.
    (b) Uniform Reports and Simplification of Instructions.--The 
Federal banking agencies shall, consistent with the principles of 
safety and soundness, work jointly--
            (1) to adopt a single form for the filing of core 
        information required to be submitted under Federal law to all 
        such agencies in the reports and statements referred to in 
        subsection (a); and
            (2) to simplify instructions accompanying such reports and 
        statements and to provide an index to the instructions that is 
        adequate to meet the needs of both filers and users.
    (c) Review of Call Report Schedule.--Each Federal banking agency 
shall--
            (1) review the information required by schedules 
        supplementing the core information referred to in subsection 
        (b); and
            (2) eliminate requirements that are not warranted for 
        reasons of safety and soundness or other public purposes.

SEC. 308. REPEAL OF PUBLICATION REQUIREMENTS.

    (a) Revised Statutes.--Section 5211 of the Revised Statutes (12 
U.S.C. 161) is amended--
            (1) in the fifth sentence of subsection (a), by striking 
        ``; and the statement of resources'' and all that follows 
        through ``as may be required by the Comptroller''; and
            (2) in subsection (c), by striking the fourth sentence.
    (b) FDIA.--Section 7(a)(1) of the Federal Deposit Insurance Act (12 
U.S.C. 1817(a)(1)) is amended by striking the fourth sentence.
    (c) Federal Reserve Act.--Section 9 of the Federal Reserve Act (12 
U.S.C. 324) is amended in the last sentence of the sixth undesignated 
paragraph, by striking ``and shall be published'' and all that follows 
through the end of the sentence and inserting a period.

SEC. 309. REGULATORY APPEALS PROCESS.

    (a) In General.--Not later than 180 days after the date of 
enactment of this Act, each appropriate Federal banking agency and the 
National Credit Union Administration Board shall establish an 
independent intra-agency appellate process. The process shall be 
available to review material supervisory determinations made at insured 
depository institutions or at insured credit unions that the agency 
supervises.
    (b) Review Process.--In establishing the independent appellate 
process under subsection (a), each agency shall ensure--
            (1) that any appeal of a material supervisory determination 
        by an insured depository institution or credit union is heard 
        and decided expeditiously; and
            (2) that appropriate safeguards exist for protecting the 
        appellant from retaliation by agency examiners.
    (c) Comment Period.--Not later than 90 days after the date of 
enactment of this Act, each appropriate Federal banking agency and the 
National Credit Union Administration shall provide public notice and 
opportunity for comment on proposed guidelines for the establishment of 
an appellate process under this section.
    (d) Definitions.--For purposes of this section--
            (1) the term ``material supervisory determinations'' 
        includes determinations relating to--
                    (A) examination ratings;
                    (B) the adequacy of loan loss reserve provisions; 
                and
                    (C) loan classifications on loans that are 
                significant to the institution; and
            (2) the term ``independent appellate process'' means a 
        review by an agency official who does not directly or 
        indirectly report to the agency official who made the material 
        supervisory determination under review.
    (e) Effect on Other Authority.--Nothing in this section shall 
affect the authority of an appropriate Federal banking agency or the 
National Credit Union Association Board to take enforcement or 
supervisory action against an institution.

SEC. 310. ELECTRONIC FILING OF CURRENCY TRANSACTION REPORTS.

    Section 123 of the Bank Secrecy Act (12 U.S.C. 1953) is amended by 
adding at the end the following new subsection:
    ``(c) Acceptance of Automated Records.--The Secretary shall permit 
an uninsured bank or financial institution to retain or maintain 
records referred to in subsection (a) in electronic or automated form, 
subject to terms and conditions established by the Secretary.''.

SEC. 311. BANK SECRECY ACT PUBLICATION REQUIREMENTS.

    Chapter 53 of title 31, United States Code, is amended by adding at 
the end the following new section:

``SEC. 5329. STAFF COMMENTARIES.

    ``The Secretary shall--
            ``(1) publish all written rulings interpreting this 
        chapter; and
            ``(2) annually issue a staff commentary on the regulations 
        issued under this chapter.''.

SEC. 312. EXEMPTION OF BUSINESS LOANS FROM REAL ESTATE SETTLEMENT 
              PROCEDURES ACT REQUIREMENTS.

    The Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 
et seq.) is amended by inserting after section 6 the following new 
section:

``SEC. 7. EXEMPTED TRANSACTIONS.

    ``This Act does not apply to credit transactions involving 
extensions of credit--
            ``(1) primarily for business, commercial, or agricultural 
        purposes; or
            ``(2) to government or governmental agencies or 
        instrumentalities.''.

SEC. 313. FLEXIBILITY IN CHOOSING BOARDS OF DIRECTORS.

    Section 5146 of the Revised Statutes (12 U.S.C. 72) is amended in 
the first sentence, by striking ``two thirds'' and inserting ``a 
majority''.

SEC. 314. HOLDING COMPANY AUDIT REQUIREMENTS.

    Section 36(i) of the Federal Deposit Insurance Act (12 U.S.C. 
1831m(i)) is amended by striking paragraph (2) and inserting the 
following:
            ``(2) the institution--
                    ``(A) has total assets, as of the beginning of such 
                fiscal year, of less than $5,000,000,000;
                    ``(B) has--
                            ``(i) total assets, as of the beginning of 
                        such fiscal year, of more than $5,000,000,000 
                        and less than $9,000,000,000; and
                            ``(ii) a CAMEL composite rating of 1 or 2 
                        under the Uniform Financial Institutions Rating 
                        System (or an equivalent rating by any such 
                        agency under a comparable rating system) as of 
                        the most recent examination of such institution 
                        by the Corporation or the appropriate Federal 
                        banking agency; or
                    ``(C)(i) has total assets, as of the beginning of 
                such fiscal year, of more than $9,000,000,000; and
                    ``(ii) has a CAMEL composite rating of 1 or 2 under 
                the Uniform Financial Institutions Rating System (or an 
                equivalent rating by any such agency under a comparable 
                rating system) as of the most recent examination of 
                such institution by the Corporation or the appropriate 
                Federal banking agency.
Notwithstanding paragraph (2)(C), in the case of an insured depository 
institution that the Corporation determines to be a large institution, 
the audit committee of the holding company of such an institution shall 
not include any large customers of the institution.
            ``(3) The appropriate Federal banking agency may require an 
        institution with total assets in excess of $9,000,000,000 to 
        comply with this section, notwithstanding the exception 
        provided by this subsection, if it determines that such 
        exemption will create a significant risk to the affected 
        deposit insurance fund if applied to that institution.''.

SEC. 315. STATE REGULATION OF REAL ESTATE APPRAISALS.

    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) through (e) as 
        subsections (c) through (f), respectively;
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b) Reciprocity.--The Appraisal Subcommittee shall encourage the 
States to develop reciprocity agreements that readily authorize 
appraisers who are licensed or certified in one State (and who are in 
good standing with their State appraiser certifying or licensing 
agency) to perform appraisals in other States.''; and
            (3) in subsection (a)--
                    (A) by redesignating paragraphs (1) through (3) as 
                subparagraphs (A) through (C);
                    (B) by striking ``A State'' and inserting the 
                following:
            ``(1) In general.--A State''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(2) Fees for temporary practice.--A State appraiser 
        certifying or licensing agency shall not impose excessive fees 
        or burdensome requirements, as determined by the Appraisal 
        Subcommittee, for temporary practice under this subsection.''.

SEC. 316. ACCELERATION OF EFFECTIVE DATE FOR INTERAFFILIATE 
              TRANSACTIONS.

    (a) Home Owners' Loan Act Amendment.--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.--A savings association 
                        that is well capitalized (as defined in section 
                        38 of the Federal Deposit Insurance Act), as 
                        determined 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.''.
    (b) Repeal Provision.--Effective on January 1, 1995, subparagraph 
(C) of section 11(a)(2) of the Home Owners' Loan Act (12 U.S.C. 
1468(a)(2)) (as added by subsection (a) of this section) is repealed.

SEC. 317. COLLATERALIZATION OF PUBLIC DEPOSITS.

    Section 13(e) of the Federal Deposit Insurance Act (12 U.S.C. 
1823(e)) is amended--
            (1) by redesignating paragraphs (1) through (4) as 
        subparagraphs (A) through (D), respectively;
            (2) by striking ``No agreement'' and inserting the 
        following:
            ``(1) In general.--No agreement''; and
            (3) by adding at the end the following new paragraph:
            ``(2) Public deposits.--An agreement to provide for the 
        lawful collateralization of deposits of a Federal, State, or 
        local governmental entity or of any depositor referred to in 
        section 11(a)(2) shall not be deemed to be invalid pursuant to 
        paragraph (1)(B) solely because such agreement was not executed 
        contemporaneously with the acquisition of the collateral or 
        with any changes in the collateral made in accordance with such 
        agreement.''.

SEC. 318. ELIMINATION OF STOCK VALUATION PROVISION.

    (a) In General.--Section 39(b) of the Federal Deposit Insurance Act 
(12 U.S.C. 1831p-1(b)), as added by section 132(a) of the Federal 
Deposit Insurance Corporation Improvements Act of 1991) is amended to 
read as follows:
    ``(b) Asset Quality, Earnings, and Stock Valuation Standards.--Each 
appropriate Federal banking agency shall, for all insured depository 
institutions and depository institution holding companies, prescribe 
standards relating to asset quality, earnings, and stock valuation that 
the agency determines to be appropriate.''.
    (b) Establishing Standards in Guidelines.--Section 39(d) of the 
Federal Deposit Insurance Act (12 U.S.C. 1831p-1(d)) is amended--
            (1) in the subsection heading, by striking ``by 
        Regulation''; and
            (2) in paragraph (1)--
                    (A) in the first sentence, by inserting ``or 
                guideline'' before the period; and
                    (B) in the second sentence, by inserting ``or 
                guidelines'' after ``Such regulations''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall be construed to have the same effective date as section 39 of the 
Federal Deposit Insurance Act, as provided in section 132(c) of the 
Federal Deposit Insurance Corporation Improvements Act of 1991.

SEC. 319. EXPEDITED PROCEDURES FOR FORMING A BANK HOLDING COMPANY.

    Section 3(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1842(a)) is amended--
            (1) in the second sentence, by striking ``or (B)'' and 
        inserting ``(B)''; and
            (2) in the second sentence, by inserting before the period 
        the following: ``; or (C) with 30 days prior notification to 
        the Board, the acquisition by a company of control of a bank in 
        a reorganization in which a person or group of persons 
        exchanges its shares of the bank for shares of a newly formed 
        bank holding company and receives, after the reorganization, 
        substantially the same proportional share interest in the 
        holding company as it held in the bank (except for changes in 
        shareholders' interests resulting from the exercise of 
        dissenting shareholders' rights under State or Federal law) if, 
        immediately following the acquisition, (i) the bank holding 
        company meets the capital and other financial standards 
        prescribed by the Board by regulation for such a bank holding 
        company; (ii) the bank is adequately capitalized (as defined in 
        section 38 of the Federal Deposit Insurance Act); and (iii) the 
        holding company does not engage in any activities other than 
        those of banking or managing and controlling banks''.

SEC. 320. EXEMPTION OF CERTAIN HOLDING COMPANY FORMATIONS FROM 
              REGISTRATION UNDER THE SECURITIES ACT OF 1933.

    Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended 
by adding at the end the following new paragraph:
            ``(7) transactions involving offers or sales of equity 
        securities, in connection with the acquisition of a bank by a 
        company under section 3(a) of the Bank Holding Company Act of 
        1956, if--
                    ``(A) the acquisition occurs solely as part of a 
                reorganization in which a person or group of persons 
                exchanges its shares of a bank for shares of a newly 
                formed bank holding company with no significant assets 
                other than securities of the bank and the existing 
                subsidiaries of the bank;
                    ``(B) the shareholders receive, after that 
                reorganization, substantially the same proportional 
                share interests in the bank holding company as they 
                held in the bank, except for changes in shareholders' 
                interests resulting from lawful elimination of 
                fractional interests and the exercise of dissenting 
                shareholders' rights under State or Federal law;
                    ``(C) the rights and interests of security holders 
                in the bank holding company are substantially the same 
                as those in the bank prior to the transaction, other 
                than as may be required by law; and
                    ``(D) the bank holding company has substantially 
                the same assets and liabilities as the bank had prior 
                to the transaction.''.

SEC. 321. REDUCTION OF POST-APPROVAL WAITING PERIOD FOR BANK HOLDING 
              COMPANY ACQUISITIONS.

    Section 11(b)(1) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1849(b)(1)) is amended by inserting before the period at the end of the 
fourth sentence the following: ``or, if the Board has not received any 
adverse comment from the Attorney General of the United States relating 
to competitive factors, such shorter period of time as may be 
prescribed by the Board with the concurrence of the Attorney General, 
but in no event less than 15 calendar days after the date of 
approval''.

SEC. 322. REDUCTION OF POST-APPROVAL WAITING PERIOD FOR BANK MERGERS.

    Section 18(c)(6) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(c)(6)) is amended by inserting before the period at the end of the 
last sentence the following: ``or, if the agency has not received any 
adverse comment from the Attorney General of the United States relating 
to competitive factors, such shorter period of time as may be 
prescribed by the agency with the concurrence of the Attorney General, 
but in no event less than 15 calendar days after the date of 
approval''.

SEC. 323. BANKERS' BANKS.

    (a) Ownership by Bankers' Banks.--
            (1) Paragraph Seventh of section 5136 of the Revised 
        Statutes (12 U.S.C. 24) is amended in the eleventh sentence--
                    (A) by inserting ``or depository institution 
                holding companies (as defined in section 3 of the 
                Federal Deposit Insurance Act)'' after ``(except to the 
                extent directors' qualifying shares are required by 
                law) by depository institutions''; and
                    (B) by striking ``services for other depository 
                institutions and their officers, directors and 
                employees'' and inserting the following: ``services to 
                or for other depository institutions and the officers, 
                directors, and employees of such institutions, and in 
                providing correspondent banking services at the request 
                of other depository institutions (also referred to as a 
                `banker's bank')''.
            (2) Section 5169(b)(1) of the Revised Statutes (12 U.S.C. 
        27(b)(1)) is amended--
                    (A) by inserting ``or depository institution 
                holding companies'' after ``(except to the extent 
                directors' qualifying shares are required by law) by 
                other depository institutions''; and
                    (B) by striking ``services for other depository 
                institutions and their officers, directors and 
                employees'' and inserting the following: ``services to 
                or for other depository institutions and the officers, 
                directors, and employees of such institutions, and in 
                providing correspondent banking services at the request 
                of other depository institutions (also referred to as a 
                `banker's bank')''.
    (b) Ownership by Savings Associations.--Section 5(c)(4) of the Home 
Owners' Loan Act (12 U.S.C. 1464(c)(4)) is amended by adding at the end 
the following new subparagraph:
                    ``(E) Bankers' Banks.--A Federal savings 
                association may purchase for its own account shares of 
                stock of a bankers' bank, described in Paragraph 
                Seventh of section 5136 of the Revised Statutes or in 
                section 5169(b) of the Revised Statutes, on the same 
                terms and conditions as a national bank may purchase 
                such shares.''.
    (c) Technical and Conforming Amendments.--
            (1) Bank holding company act.--Section 3(e) of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1842(e)) is amended by 
        striking the second sentence.
            (2) Management interlocks act.--Section 202(3)(D) of the 
        Depository Institution Management Interlocks Act (12 U.S.C. 
        3201(3)(D)) is amended by striking ``the voting securities'' 
        and all that follows through the end of the subparagraph and 
        inserting ``and is a bankers' bank, described in Paragraph 
        Seventh of section 5136 of the Revised Statutes; or''.
    (d) Lending Limit for Loans Secured by Securities.--Section 11(m) 
of the Federal Reserve Act (12 U.S.C. 248(m)) is amended by striking 
``10 percentum'' each place such term appears and inserting ``15 
percent''.

SEC. 324. BANK SERVICE CORPORATION ACT AMENDMENT.

    Section 5 of the Bank Service Corporation Act (12 U.S.C. 1865) is 
amended--
            (1) in subsection (a), by striking ``the prior approval 
        of'' and inserting ``prior notice, as determined by''; and
            (2) in subsection (c), by inserting ``or whether to approve 
        or disapprove any notice'' after ``approval''.

SEC. 325. MERGER TRANSACTION REPORTS.

    Section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(c)) is amended--
            (1) in paragraph (4)--
                    (A) in the first sentence--
                            (i) by striking ``General and the other 
                        two'' and inserting ``General, who shall 
                        promptly notify the other''; and
                            (ii) by inserting before the period ``of 
                        any such proposed transaction that raises a 
                        significant competitiveness issue''; and
                    (B) in the second sentence, by striking ``and the 
                other two banking agencies''; and
            (2) in paragraph (6), by striking ``and the other two 
        banking agencies''.

SEC. 326. 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 its sole discretion and upon such terms 
                as it may prescribe, waive its 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 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) does 
                        not--
                                    ``(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, in any capacity, be liable to any person for 
                damages resulting from the waiver of or failure 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 shall 
                issue any order affecting any such waiver or failure to 
                waive.
                    ``(E) Other authority not affected.--This paragraph 
                does not limit any other authority of the Corporation 
                to waive the Corporation's right to repudiate an 
                agreement or lease under this section.
            ``(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) does not limit 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. 327. LIMITING POTENTIAL LIABILITY ON FOREIGN ACCOUNTS.

    (a) Amendment to the Federal Reserve Act.--The Federal Reserve Act 
(12 U.S.C. 221 et seq.) is amended by inserting after section 25B the 
following new section:

``SEC. 25C. POTENTIAL LIABILITY ON FOREIGN ACCOUNTS.

    ``A member bank shall not be required to repay any deposit made at 
a foreign branch of the bank if the branch cannot repay the deposit due 
to--
            ``(1) an act of war, insurrection or civil strife; or
            ``(2) an action by a foreign government or instrumentality 
        (whether de jure or de facto) in the country in which the 
        branch is located,
unless the member bank has expressly agreed in writing to repay the 
deposit under those circumstances. The Board and the Comptroller of the 
Currency may jointly prescribe such regulations as they deem necessary 
to implement this section.''.
    (b) Conforming Amendments to the Federal Deposit Insurance Act.--
            (1) In general.--Section 18 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1828) is amended by adding at the end 
        the following new subsection:
    ``(q) Sovereign Risk.--Section 25C of the Federal Reserve Act shall 
apply to every nonmember insured bank in the same manner and to the 
same extent as if the nonmember insured bank were a member bank.''.
            (2) Conforming amendment.--Subparagraph (A) of section 
        3(l)(5) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(l)(5)) is amended to read as follows:
                    ``(A) any obligation of a depository institution 
                which is carried on the books and records of an office 
                of such bank or savings association located outside of 
                any State, unless--
                            ``(i) such obligation would be a deposit if 
                        it were carried on the books and records of the 
                        depository institution, and would be payable 
                        at, an office located in any State; and
                            ``(ii) the contract evidencing the 
                        obligation provides by express terms, and not 
                        by implication, for payment at an office of the 
                        depository institution located in any State; 
                        and''.
    (c) Existing Claims Not Affected--Section 25C of the Federal 
Reserve Act (as added by subsection (a)) shall not be applied 
retroactively and shall not be construed to affect or apply to any 
claim or cause of action addressed by that section arising from events 
or circumstances that occurred before the date of enactment of this 
Act.

SEC. 328. AMENDMENTS TO OUTDATED DIVIDEND PROVISIONS.

    (a) Withdrawal of Capital.--Section 5204 of the Revised Statutes 
(12 U.S.C. 56) is amended--
            (1) in the second sentence, by striking ``net profits then 
        on hand, deducting therefrom its losses and bad debts'' and 
        inserting ``undivided profits, subject to other applicable 
        provisions of law''; and
            (2) by striking the third sentence.
    (b) Declaration of Dividends.--Section 5199 of the Revised Statutes 
(12 U.S.C. 60) is amended--
            (1) in the first sentence, by striking ``net profits of the 
        association'' and inserting ``undivided profits of the 
        association, subject to the limitations in subsection (b),'';
            (2) by striking ``net profits'' each subsequent place such 
        term appears and inserting ``net income''; and
            (3) by striking subsection (c).

SEC. 329. ELIMINATION OF DUPLICATIVE DISCLOSURES FOR HOME EQUITY LOANS.

    Section 4(a) of the Real Estate Settlement Procedures Act (12 
U.S.C. 2603(a)) is amended by adding at the end the following: ``In the 
case of a federally related mortgage loan secured by a subordinate lien 
on residential property, disclosures made under section 127A(a) of the 
Truth in Lending Act may be used in lieu of the disclosures required 
under this section if--
            ``(1) the disclosures made pursuant to such section 127A(a) 
        contain all of the information that is required under this 
        section; and
            ``(2) the information is disclosed in a manner that is no 
        less conspicuous than is required under this section.''.

SEC. 330. REPORT ON CAPITAL STANDARDS AND THEIR IMPACT ON THE ECONOMY.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Secretary of the Treasury, after consultation with the 
Federal banking agencies, shall report to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Banking, 
Finance and Urban Affairs of the House of Representatives on the effect 
of the implementation of risk-based capital standards on--
            (1) the safety and soundness of insured depository 
        institutions; and
            (2) the availability of credit, particularly to consumers 
        and small business concerns.
    (b) Recommendations.--The report required by subsection (a) shall 
contain any recommendations that the Secretary of the Treasury 
considers relevant.

SEC. 331. STUDIES ON THE IMPACT OF THE PAYMENT OF INTEREST ON RESERVES.

    (a) Federal Reserve Study.--Not later than 180 days after the date 
of enactment of this Act, the Board of Governors of the Federal Reserve 
System, in consultation with the Federal Deposit Insurance Corporation, 
shall conduct a 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 a market rate of interest 
        to insured depository institutions on sterile reserves or, in 
        the alternative, providing for payment of such 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 the potential income lost by insured depository 
        institutions; and
            (4) the impact that the 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.--Not later than 180 days after the date 
of enactment of this Act, the Director of the Office of Management and 
Budget and the Director of the Congressional Budget Office, in 
consultation with the Committees on the Budget of the Senate and the 
House of Representatives, shall jointly conduct a study and report to 
the Congress on the budgetary impact of--
            (1) paying a market rate of interest to insured depository 
        institutions on sterile reserves; and
            (2) paying such interest into the respective deposit 
        insurance funds.

SEC. 332. STUDY AND REPORT ON STREAMLINED LENDING PROCESS FOR CONSUMER 
              BENEFIT.

    (a) Study.--During the 12-month period beginning on the date of 
enactment of this Act, the Board of Governors of the Federal Reserve 
System, the Comptroller of the Currency, and the Secretary of Housing 
and Urban Development shall conduct a study of ways to improve the home 
mortgage, small business, and consumer lending processes, consistent 
with the principles of safety and soundness, so as to--
            (1) reduce consumer burdens, inconvenience, cost, and 
        delay; and
            (2) minimize cost and burdens on insured depository 
        institutions, credit unions, and other lenders.
    (b) Comments.--In conducting the study under subsection (a), 
comments shall be solicited from consumer groups, insured depository 
institutions, other lenders, and any other interested parties.
    (c) Report.--Not later than 12 months after the date of enactment 
of this Act, the Board of Governors of the Federal Reserve System, the 
Comptroller of the Currency, and the Secretary of Housing and Urban 
Development shall submit a joint report to the Congress indicating any 
legislative changes necessary to improve the home mortgage, small 
business, and consumer lending processes and including a summary of 
comments received pursuant to subsection (b).

SEC. 333. REPEAL OF OUTDATED CHARTER REQUIREMENT FOR NATIONAL BANKS.

    Section 5170 of the Revised Statutes (12 U.S.C. 28) is repealed.

SEC. 334. INCLUSION OF COMPTROLLER OF THE CURRENCY; CLARIFICATION OF 
              REVISED STATUTES.

    (a) Public Law 93-425.--Section 111 of Public Law 93-495 (12 U.S.C. 
250) is amended by inserting ``the Comptroller of the Currency,'' after 
``Federal Deposit Insurance Corporation,''.
    (b) Revised Statutes.--
            (1) Section 5240.--The third paragraph of section 5240 of 
        the Revised Statutes (12 U.S.C. 482) is amended by inserting 
        ``or section 301(f)(1) of title 31, United States Code,'' after 
        ``provisions of this section''.
            (2) Section 324.--Section 324 of the Revised Statutes (12 
        U.S.C. 1) is amended by adding at the end the following: ``The 
        Comptroller of the Currency shall have the same authority over 
        matters within the jurisdiction of the Comptroller as the 
        Director of the Office of Thrift Supervision has over matters 
        within the Director's jurisdiction under section 3(b)(3) of the 
        Home Owners' Loan Act.''.
            (3) Section 5239.--Section 5239 of the Revised Statutes (12 
        U.S.C. 93) is amended by inserting at the end the following new 
        subsection:
    ``(d) Authority.--The Comptroller of the Currency may act in the 
Comptroller's own name and through the Comptroller's own attorneys in 
enforcing any provision of this title, regulations thereunder, or any 
other law or regulation, or in any action, suit, or proceeding to which 
the Comptroller of the Currency is a party.''.

SEC. 335. COMMEMORATION OF 1995 SPECIAL OLYMPIC WORLD GAMES.

    (a) Coin Specifications.--
            (1) One dollar silver coins.--
                    (A) Issuance.--The Secretary of the Treasury 
                (hereafter in this section referred to as the 
                ``Secretary'') shall issue not more than 800,000 $1 
                coins, which shall weigh 26.73 grams, have a diameter 
                of 1.500 inches, and shall contain 90 percent silver 
                and 10 percent copper.
                    (B) Design.--The design of the coins issued under 
                this section shall be emblematic of the 1995 Special 
                Olympics World Games. On each such coin there shall be 
                a designation of the value of the coin, an inscription 
                of the year ``1995'', and inscriptions of the words 
                ``Liberty'', ``In God We Trust'', ``United States of 
                America'', and ``E Pluribus Unum''.
            (2) Legal tender.--The coins issued under this section 
        shall be legal tender as provided in section 5103 of title 31, 
        United States Code.
            (3) Numismatic items.--For purposes of section 5132(a)(1) 
        of title 31, United States Code, all coins minted under this 
        section shall be considered to be numismatic items.
    (b) Sources of Bullion.--The Secretary shall obtain silver for the 
coins minted under this section only from stockpiles established under 
the Strategic and Critical Materials Stock Piling Act.
    (c) Selection of Design.--The design for the coins authorized by 
this section shall be selected by the Secretary after consultation with 
the 1995 Special Olympics World Games Organizing Committee, Inc. and 
the Commission of Fine Arts. As required by section 5135 of title 31, 
United States Code, the design shall also be reviewed by the Citizens 
Commemorative Coin Advisory Committee.
    (d) Issuance of the Coins.--
            (1) Quality of coins.--The coins authorized under this 
        section may be issued in uncirculated and proof qualities.
            (2) Mint facility.--Not more than 1 facility of the United 
        States Mint may be used to strike any particular quality of the 
        coins minted under this section.
            (3) Period for issuance.--The Secretary shall issue coins 
        minted under this Act during the period beginning on January 
        15, 1995, and ending on December 31, 1995.
    (e) Sale of the Coins.--
            (1) Sale price.--The coins issued under this section shall 
        be sold by the Secretary at a price equal to the sum of the 
        face value of the coins, the surcharge provided in paragraph 
        (4) with respect to such coins, and the cost of designing and 
        issuing such coins (including labor, materials, dies, use of 
        machinery, overhead expenses, marketing, and shipping).
            (2) Bulk sales.--The Secretary shall make bulk sales at a 
        reasonable discount.
            (3) Prepaid orders.--The Secretary shall accept prepaid 
        orders for the coins authorized under this section prior to the 
        issuance of such coins. Sales under this subsection shall be at 
        a reasonable discount.
            (4) Surcharge required.--All sales shall include a 
        surcharge of $10 per coin.
    (f) General Waiver of Procurement Regulations.--No provision of law 
governing procurement or public contracts shall be applicable to the 
procurement of goods or services necessary for carrying out the 
provisions of this section. Nothing in this subsection shall relieve 
any person entering into a contract under the authority of this section 
from complying with any law relating to equal employment opportunity.
    (g) Distribution of Surcharges.--The total surcharges collected by 
the Secretary from the sale of the coins issued under this section 
shall be promptly paid by the Secretary to the 1995 Special Olympics 
World Games Organizing Committee, Inc. Such amounts shall be used to--
            (1) provide a world class sporting event for athletes with 
        mental retardation;
            (2) demonstrate to a global audience the extraordinary 
        talents, dedication, and courage of persons with mental 
        retardation; and
            (3) underwrite the cost of staging and promoting the 1995 
        Special Olympics World Games.
    (h) Audits.--The Comptroller General of the United States shall 
have the right to examine such books, records, documents, and other 
data of the 1995 Special Olympics World Games Organizing Committee, 
Inc. as may be related to the expenditure of amounts paid under 
subsection (g).
    (i) Financial Assurances.--
            (1) No net cost to the government.--The Secretary shall 
        take all actions necessary to ensure that the issuance of the 
        coins authorized by this section shall result in no net cost to 
        the United States Government.
            (2) Adequate security for payment required.--No coin shall 
        be issued under this section unless the Secretary has 
        received--
                    (A) full payment therefore;
                    (B) security satisfactory to the Secretary to 
                indemnify the United States for full payment; or
                    (C) a guarantee of full payment satisfactory to the 
                Secretary from a depository institution whose deposits 
                are insured by the Federal Deposit Insurance 
                Corporation or the National Credit Union Administration 
                Board.

SEC. 336. EXEMPTION FOR BUSINESS ACCOUNTS.

    Section 274(1) of the Truth in Savings Act (12 U.S.C. 4313(1)) is 
amended to read as follows:
            ``(1) Account.--The term `account' means any account 
        intended for use by and generally used by consumers primarily 
        for personal, family, or household purposes that is offered by 
        a depository institution into which a consumer deposits funds, 
        including demand accounts, time accounts, negotiable order of 
        withdrawal accounts, and share draft accounts.''.

SEC. 337. BOARD DISCRETION REGARDING CHECK-RELATED FRAUD.

    Section 604(e) of the Expedited Funds Availability Act (12 U.S.C. 
4003(e)) is amended by adding at the end the following new paragraph:
            ``(4) Prevention of check-related losses.--
                    ``(A) In general.--The Board may, by regulation or 
                order, extend the 1-business-day period specified in 
                section 603(b)(1), regarding availability of funds 
                deposited by local checks, to 2 business days if the 
                Board determines that--
                            ``(i) there is a pattern of significant 
                        increases in check-related losses at depository 
                        institutions attributable to the provisions of 
                        this title; and
                            ``(ii) such action is necessary to diminish 
                        the volume of such check-related losses.
                    ``(B) Limitation on other authority.--The authority 
                of the Board under paragraph (1) shall not apply to the 
                applicability of section 603(b)(1) or the time period 
                specified therein.''.

SEC. 338. CIVIL LIABILITY UNDER TRUTH IN SAVINGS.

    Section 271(a)(2)(A) of the Truth in Savings Act (12 U.S.C. 
4310(a)(2)(A)) is amended by inserting ``(other than an action based on 
a violation of section 263)'' after ``individual action''.

SEC. 339. INSIDER LENDING.

    (a) Loans To Executive Officers By Member Banks.--Section 22(g)(2) 
of the Federal Reserve Act (12 U.S.C. 375a(g)(2)) is amended by 
striking ``With the specific prior approval of its board of directors, 
a member'' and inserting ``A member''.
    (b) Extensions of Credit To Executive Officers, Directors, and 
Principal Shareholders of Member Banks.--Section 22(h)(8) of the 
Federal Reserve Act (12 U.S.C. 375b(h)(8)) is amended--
            (1) by striking ``Member Bank.--For'' and inserting the 
        following: ``Member Bank.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), for''; and
            (2) by adding at the end the following:
                    ``(B) Exception.--The Board shall have the 
                authority by regulation to suspend the applicability of 
                any or all of this subsection, except for the 
                provisions of paragraph (2), with respect to any 
                individual who is a director or an executive officer of 
                a subsidiary of the company that controls the member 
                bank, if the Board finds that such individual does not 
                actually participate in major policymaking functions of 
                the member bank.''.

SEC. 340. REVISIONS OF STANDARDS.

    Section 305(b)(1) of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 1828 note) is amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) in subparagraph (B), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(C) take into account the size and activities of 
                the institutions and do not cause undue reporting 
                burdens.''.

SEC. 341. ALTERNATIVE RULES FOR RADIO ADVERTISING OF CONSUMER LEASES.

    Section 184 of the Truth in Lending Act (15 U.S.C. 1667c) is 
amended--
            (1) by redesignating subsection (b) as subsection (c); and
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b)  Radio Advertisements.--
            ``(1) In general.--An advertisement by radio broadcast to 
        aid, promote, or assist, directly or indirectly, any consumer 
        lease shall be deemed to be in compliance with the requirements 
        of subsection (a) if such advertisement clearly and 
        conspicuously--
                    ``(A) states the information required by paragraphs 
                (1) and (2) of subsection (a);
                    ``(B) states the number, amounts, due dates, or 
                periods of scheduled payments, and the total of such 
                payments under the lease; and
                    ``(C) includes--
                            ``(i) a referral to--
                                    ``(I) a toll-free telephone number 
                                established in accordance with 
                                paragraph (2) that may be used by 
                                consumers to obtain the information 
                                required under subsection (a); or
                                    ``(II) a written advertisement 
                                that--
                                            ``(aa) appears in a 
                                        publication in general 
                                        circulation in the community 
                                        served by the radio station on 
                                        which such advertisement is 
                                        broadcast during the period 
                                        beginning 3 days before any 
                                        such broadcast and ending 10 
                                        days after such broadcast; and
                                            ``(bb) includes the 
                                        information required to be 
                                        disclosed under subsection (a); 
                                        and
                            ``(ii) the name and dates of any 
                        publication referred to in clause (i)(II); and
                    ``(D) includes any other information which the 
                Board determines necessary to carry out this chapter.
            ``(2) Establishment of toll-free number.--
                    ``(A) In general.--In the case of a radio broadcast 
                advertisement described in paragraph (1) that includes 
                a referral to a toll-free telephone number, the lessor 
                who offers the consumer lease shall--
                            ``(i) establish such a toll-free telephone 
                        number not later than the date on which the 
                        advertisement including the referral is 
                        broadcast;
                            ``(ii) maintain such telephone number for 
                        not less than 10 days, beginning on the date of 
                        any such broadcast; and
                            ``(iii) provide the information required 
                        under subsection (a) with respect to the lease 
                        to any person who calls such number.
                    ``(B) Form of information.--The information 
                required to be provided under subparagraph (A)(iii) 
                shall be provided orally or, if requested by the 
                consumer, in written form.
            ``(3) No effect on other law.--Nothing in this subsection 
        shall affect the requirements of Federal law as such 
        requirements apply to advertisement by any other medium.''.

SEC. 342. DEPOSIT BROKER REGISTRATION.

    Section 29(g)(3) of the Federal Deposit Insurance Act (12 U.S.C. 
1831f(g)(3)) is amended--
            (1) by inserting ``that is not well capitalized'' after 
        ``includes any insured depository institution'';
            (2) by striking ``of any insured depository'' and inserting 
        ``of such'';
            (3) by striking ``(with respect to such deposits)''; and
            (4) by striking ``having the same type of charter''.

SEC. 343. EXTENSION OF MANAGEMENT INTERLOCKS GRANDFATHER CLAUSE.

    Subsections (a) and (b) of section 206 of the Depository 
Institution Management Interlocks Act (12 U.S.C. 3205) are each amended 
by striking ``15 years'' and inserting ``20 years''.

SEC. 344. CLARIFICATION OF PROVISION RELATING TO ADMINISTRATIVE 
              AUTONOMY.

    Section 3(b)(3) of the Home Owners' Loan Act (12 U.S.C. 1462a) is 
amended by striking everything after ``Director'' and inserting in lieu 
thereof ``(including agency rulemaking proceedings and enforcement 
actions) unless otherwise specifically provided by law.''.

SEC. 345. CONSUMER SURVEYS AND REPORT.

    (a) Surveys.--Not later than 6 months after the date of enactment 
of this Act, the Federal banking agencies (as defined in section 3 of 
the Federal Deposit Insurance Act) and the Secretary of Housing and 
Urban Development shall jointly conduct an objective and statistically 
valid survey of financial services consumers to determine the general 
public awareness of, perceived benefits to consumers of, and 
effectiveness of the Federal banking laws under which the Federal 
banking agencies and the Department of Housing and Urban Development 
operate that are intended for the protection of such consumers, 
including--
            (1) the Expedited Funds Availability Act;
            (2) the Truth in Lending Act;
            (3) the Truth in Savings Act;
            (4) the Real Estate Settlement Procedures Act of 1974;
            (5) the Home Mortgage Disclosure Act of 1975;
            (6) the Equal Credit Opportunity Act;
            (7) the Community Reinvestment Act of 1977;
            (8) the Home Equity Loan Consumer Protection Act;
            (9) the Fair Credit and Charge Card Disclosure Act; and
            (10) the rules and regulations promulgated under those 
        banking laws.
    (b) Consultation.--In developing such a survey, the Federal banking 
agencies and the Secretary of Housing and Urban Development shall 
consult with consumer groups, insured depository institutions, other 
lenders, and any other interested parties.
    (c) Information for Surveyed Consumers.--The survey shall provide 
for distribution to participating consumers a summary explanation of 
the Federal banking law being surveyed and how each is currently being 
implemented.
    (d) Report.--Not later than 60 days after completion of its survey 
under subsection (a), the Federal banking agencies and the Secretary of 
Housing and Urban Development shall jointly submit a report of the 
results of their survey to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Banking, Finance and Urban 
Affairs of the House of Representatives.

SEC. 346. SIMPLIFIED DISCLOSURE FOR EXISTING DEPOSITORS.

    (a) In General.--Section 43(b)(3) of the Federal Deposit Insurance 
Act (12 U.S.C. 1831t(b)(3)) is amended to read as follows:
            ``(3) Acknowledgement of disclosure.--
                    ``(A) New depositors.--With respect to any 
                depositor who was not a depositor at the depository 
                institution before June 19, 1994, receive any deposit 
                for the account of such depositor only if the depositor 
                has signed a written acknowledgement that--
                            ``(i) the institution is not federally 
                        insured; and
                            ``(ii) if the institution fails, the 
                        Federal Government does not guarantee that the 
                        depositor will get back the depositor's money.
                    ``(B) Current depositors.--Receive any deposit 
                after the effective date of this paragraph for the 
                account of any depositor who was a depositor before 
                June 19, 1994, only if--
                            ``(i) the depositor has signed a written 
                        acknowledgement described in subparagraph (A); 
                        or
                            ``(ii) the institution has complied with 
                        the provisions of subparagraph (C) which are 
                        applicable as of the date of the deposit.
                    ``(C) Alternative provision of notice to current 
                depositors.--
                            ``(i) In general.--Transmit to each 
                        depositor who was a depositor before June 19, 
                        1994, and has not signed a written 
                        acknowledgement described in subparagraph (A)--
                                    ``(I) a card containing the 
                                information described in clauses (i) 
                                and (ii) of subparagraph (A), and a 
                                line for the signature of the 
                                depositor; and
                                    ``(II) accompanying materials 
                                requesting the depositor to sign the 
                                card, and return the signed card to the 
                                institution.
                            ``(ii) Manner and timing of notice.--
                                    ``(I) First notice.--Make the 
                                transmission described in clause (i) 
                                via first class mail within 90 days 
                                after June 19, 1994.
                                    ``(II) Second notice.--Make a 2d 
                                transmission described in clause (i) 
                                via first class mail not less than 30 
                                days and not more than 45 days after a 
                                transmission to the depositor in 
                                accordance with subclause (I), if the 
                                institution has not, by the date of 
                                such mailing, received from the 
                                depositor a card referred to in clause 
                                (i)(I) which has been signed by the 
                                depositor.
                                    ``(III) Third notice.--Make a 3d 
                                transmission described in clause (i) 
                                via first class mail not less than 30 
                                days and not more than 45 days after a 
                                transmission to the depositor in 
                                accordance with subclause (II), if the 
                                institution has not, by the date of 
                                such mailing, received from the 
                                depositor a card referred to in clause 
                                (i)(I) which has been signed by the 
                                depositor.''.
    (b) Effective Date.--Section 43(b)(3) of the Federal Deposit 
Insurance Act, as amended by subsection (a), shall take effect in 
accordance with section 151(a)(2)(D) of the Federal Deposit Insurance 
Corporation Improvement Act of 1991.

SEC. 347. COMMERCIAL MORTGAGE RELATED SECURITIES.

    (a) In General.--Section 3(a)(41)(A)(i) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c(a)(41)(A)(i)) is amended --
            (1) by striking ``or on a residential'' and inserting ``on 
        a residential''; and
            (2) by inserting before the semicolon ``, or on one or more 
        parcels of real estate upon which is located one or more 
        commercial structures''.
    (b) Amendment to the Revised Statutes.--Paragraph Seventh of 
section 5136 of the Revised Statutes (12 U.S.C. 24) is amended in the 
twelfth sentence, by striking ``(15 U.S.C. 78c(a)(41))), subject to 
such regulations'' and inserting ``(15 U.S.C. 78c(a)(41)). The 
exception provided for the securities described in subparagraphs (A), 
(B), and (C) shall be subject to such regulations''.
    (c) Regulations.--Not later than 1 year after the date of enactment 
of this Act, the Comptroller of the Currency shall promulgate final 
regulations, in accordance with the thirteenth sentence of Paragraph 
Seventh of section 5136 of the Revised Statutes (as amended by 
subsection (b)), to carry out the amendments made by this section.
    (d) Effective Date.--The amendments made by this section shall 
become effective upon the date of promulgation of final regulations 
under subsection (c).
    (e) State Opt Out.--Notwithstanding the amendments made by this 
section, a note that is directly secured by a first lien on one or more 
parcels of real estate upon which is located one or more commercial 
structures shall not be considered to be a mortgage related security 
under section 3(a)(41) of the Securities Exchange Act of 1934 in any 
State that, prior to the expiration of 7 years after the date of 
enactment of this Act, enacts a statute that specifically refers to 
this section and either prohibits or provides for a more limited 
authority to purchase, hold, or invest in such securities by any 
person, trust, corporation, partnership, association, business trust, 
or business entity or class thereof than is provided by the amendments 
made by this subsection. The enactment by any State of any statute of 
the type described in the preceding sentence shall not affect the 
validity of any contractual commitment to purchase, hold, or invest 
that was made prior thereto, and shall not require the sale or other 
disposition of any securities acquired prior thereto.

SEC. 348. OFFSET OF COSTS OF CERTAIN PROGRAMS.

    (a) HUD Multifamily Housing Disposition Process.--
            (1) Findings.--The Congress finds that--
                    (A) the portfolio of multifamily housing project 
                mortgages insured by the FHA is severely troubled and 
                at risk of default, requiring the Secretary to increase 
                loss reserves from $5,500,000,000 in 1991 to 
                $11,900,000,000 in 1992 to cover estimated future 
                losses;
                    (B) the inventory of multifamily housing projects 
                owned by the Secretary has more than tripled since 
                1989, and, by the end of 1993, may exceed 75,000 units;
                    (C) the cost to the Federal Government of owning 
                and maintaining multifamily housing projects escalated 
                to approximately $250,000,000 in fiscal year 1992;
                    (D) the inventory of multifamily housing projects 
                subject to mortgages held by the Secretary has 
                increased dramatically, to more than 2,400 mortgages, 
                and approximately half of these mortgages, with over 
                230,000 units, are delinquent;
                    (E) the inventory of insured and formerly insured 
                multifamily housing projects is rapidly deteriorating, 
                endangering tenants and neighborhoods;
                    (F) over 5 million families today have a critical 
                need for housing that is affordable and habitable; and
                    (G) the current statutory framework governing the 
                disposition of multifamily housing projects effectively 
                impedes the Government's ability to dispose of 
                properties, protect tenants, and ensure that projects 
                are maintained over time.
            (2) Management and disposition of multifamily housing 
        projects.--Section 203 of the Housing and Community Development 
        Amendments of 1978 (12 U.S.C. 1701z-11) is amended to read as 
        follows:

``SEC. 203. MANAGEMENT AND DISPOSITION OF MULTIFAMILY HOUSING PROJECTS.

    ``(a) Goals.--The Secretary of Housing and Urban Development (in 
this section referred to as the `Secretary') shall manage or dispose of 
multifamily housing projects that are owned by the Secretary or that 
are subject to a mortgage held by the Secretary in a manner that--
            ``(1) is consistent with the National Housing Act and this 
        section;
            ``(2) will protect the financial interests of the Federal 
        Government; and
            ``(3) will, in the least costly fashion among reasonable 
        available alternatives, further the goals of--
                    ``(A) preserving housing so that it can remain 
                available to and affordable by low-income persons;
                    ``(B) preserving and revitalizing residential 
                neighborhoods;
                    ``(C) maintaining existing housing stock in a 
                decent, safe, and sanitary condition;
                    ``(D) minimizing the involuntary displacement of 
                tenants;
                    ``(E) maintaining housing for the purpose of 
                providing rental housing, cooperative housing, and 
                homeownership opportunities for low-income persons; and
                    ``(F) minimizing the need to demolish multifamily 
                housing projects.
The Secretary, in determining the manner in which a project is to be 
managed or disposed of, may balance competing goals relating to 
individual projects in a manner that will further the purposes of this 
section.
    ``(b) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Multifamily housing project.--The term `multifamily 
        housing project' means any multifamily rental housing project 
        which is, or prior to acquisition by the Secretary was, 
        assisted or insured under the National Housing Act, or was 
        subject to a loan under section 202 of the Housing Act of 1959.
            ``(2) Subsidized project.--The term `subsidized project' 
        means a multifamily housing project receiving any of the 
        following types of assistance immediately prior to the 
        assignment of the mortgage on such project to, or the 
        acquisition of such mortgage by, the Secretary:
                    ``(A) Below market interest rate mortgage insurance 
                under the proviso of section 221(d)(5) of the National 
                Housing Act.
                    ``(B) Interest reduction payments made in 
                connection with mortgages insured under section 236 of 
                the National Housing Act.
                    ``(C) Direct loans made under section 202 of the 
                Housing Act of 1959.
                    ``(D) Assistance in the form of--
                            ``(i) rent supplement payments under 
                        section 101 of the Housing and Urban 
                        Development Act of 1965;
                            ``(ii) housing assistance payments made 
                        under section 23 of the United States Housing 
                        Act of 1937 (as in effect before January 1, 
                        1975); or
                            ``(iii) housing assistance payments made 
                        under section 8 of the United States Housing 
                        Act of 1937 (excluding payments made for 
                        tenant-based assistance under section 8),
                if (except for purposes of section 183(c) of the 
                Housing and Community Development Act of 1987) such 
                assistance payments are made to more than 50 percent of 
                the units in the project.
            ``(3) Formerly subsidized project.--The term `formerly 
        subsidized project' means a multifamily housing project owned 
        by the Secretary that was a subsidized project immediately 
        prior to its acquisition by the Secretary.
            ``(4) Unsubsidized project.--The term `unsubsidized 
        project' means a multifamily housing project owned by the 
        Secretary that is not a subsidized project or a formerly 
        subsidized project.
    ``(c) Management or Disposition of Property.--
            ``(1) Disposition to purchasers.--The Secretary is 
        authorized, in carrying out this section, to dispose of a 
        multifamily housing project owned by the Secretary on a 
        negotiated, competitive bid, or other basis, on such terms as 
        the Secretary deems appropriate considering the low-income 
        character of the project and the requirements of subsection 
        (a), to a purchaser determined by the Secretary to be capable 
        of--
                    ``(A) satisfying the conditions of the disposition;
                    ``(B) implementing a sound financial and physical 
                management program that is designed to enable the 
                project to meet anticipated operating and repair 
                expenses to ensure that the project will remain in 
                decent, safe, and sanitary condition;
                    ``(C) responding to the needs of the tenants and 
                working cooperatively with tenant organizations;
                    ``(D) providing adequate organizational staff and 
                financial resources to the project; and
                    ``(E) meeting such other requirements as the 
                Secretary may determine.
            ``(2) Contracting for management services.--The Secretary 
        is authorized, in carrying out this section--
                    ``(A) to contract for management services for a 
                multifamily housing project that is owned by the 
                Secretary (or for which the Secretary is mortgagee in 
                possession), on a negotiated, competitive bid, or other 
                basis at a price determined by the Secretary to be 
                reasonable, with a manager the Secretary has determined 
                is capable of--
                            ``(i) implementing a sound financial and 
                        physical management program that is designed to 
                        enable the project to meet anticipated 
                        operating and maintenance expenses to ensure 
                        that the project will remain in decent, safe, 
                        and sanitary condition;
                            ``(ii) responding to the needs of the 
                        tenants and working cooperatively with tenant 
                        organizations;
                            ``(iii) providing adequate organizational, 
                        staff, and other resources to implement a 
                        management program determined by the Secretary; 
                        and
                            ``(iv) meeting such other requirements as 
                        the Secretary may determine; and
                    ``(B) to require the owner of a multifamily housing 
                project that is subject to a mortgage held by the 
                Secretary to contract for management services for the 
                project in the manner described in subparagraph (A).
    ``(d) Maintenance of Housing Projects.--
            ``(1) Housing projects owned by the secretary.--In the case 
        of multifamily housing projects that are owned by the Secretary 
        (or for which the Secretary is mortgagee in possession), the 
        Secretary shall--
                    ``(A) to the greatest extent possible, maintain all 
                such occupied projects in a decent, safe, and sanitary 
                condition;
                    ``(B) to the greatest extent possible, maintain 
                full occupancy in all such projects; and
                    ``(C) maintain all such projects for purposes of 
                providing rental or cooperative housing.
            ``(2) Housing projects subject to a mortgage held by the 
        secretary.--In the case of any multifamily housing project that 
        is subject to a mortgage held by the Secretary, the Secretary 
        shall require the owner of the project to carry out the 
        requirements of paragraph (1).
    ``(e) Required Assistance.--In carrying out the goal specified in 
subsection (a)(3)(A), the Secretary shall take not less than one of the 
following actions:
            ``(1) Contract with owner.--Enter into contracts under 
        section 8 of the United States Housing Act of 1937, to the 
        extent budget authority is available, with owners of 
        multifamily housing projects that are acquired by a purchaser 
        other than the Secretary at foreclosure or after sale by the 
        Secretary.
                    ``(A) Subsidized or formerly subsidized projects 
                receiving certain assistance.--In the case of a 
                subsidized or formerly subsidized project referred to 
                in subparagraphs (A) through (C) of subsection (b)(2)--
                            ``(i) the contract shall be sufficient to 
                        assist at least all units covered by an 
                        assistance contract under any of the 
                        authorities referred to in subsection (b)(2)(D) 
                        before acquisition, unless the Secretary acts 
                        pursuant to the provisions of subparagraph (C);
                            ``(ii) in the case of units requiring 
                        project-based rental assistance pursuant to 
                        this paragraph that are occupied by families 
                        who are not eligible for assistance under 
                        section 8, a contract under this subparagraph 
                        shall also provide that when a vacancy occurs, 
                        the owner shall lease the available unit to a 
                        family eligible for assistance under section 8; 
                        and
                            ``(iii) the Secretary shall take actions to 
                        ensure the availability and affordability, as 
                        defined in paragraph (3)(B), for the remaining 
                        useful life of the project, as defined by the 
                        Secretary, of any unit located in any project 
                        referred to in subparagraphs (A) through (C) of 
                        subsection (b)(2) that does not otherwise 
                        receive project-based assistance under this 
                        subparagraph. To carry out this clause, the 
                        Secretary may require purchasers to establish 
                        use or rent restrictions maintaining 
                        affordability, as defined in paragraph (3)(B).
                    ``(B) Subsidized or formerly subsidized projects 
                receiving other assistance.--In the case of a 
                subsidized or formerly subsidized project referred to 
                in subsection (b)(2)(D)--
                            ``(i) the contract shall be sufficient to 
                        assist at least all units in the project that 
                        are covered, or were covered immediately before 
                        foreclosure on or acquisition of the project by 
                        the Secretary, by an assistance contract under 
                        any of the authorities referred to in such 
                        subsection, unless the Secretary acts pursuant 
                        to provisions of subparagraph (C); and
                            ``(ii) in the case of units requiring 
                        project-based rental assistance pursuant to 
                        this paragraph that are occupied by families 
                        who are not eligible for assistance under 
                        section 8, a contract under this paragraph 
                        shall also provide that when a vacancy occurs, 
                        the owner shall lease the available unit to a 
                        family eligible for assistance under section 8.
                    ``(C) Exceptions to subparagraphs (a) and (b).--In 
                lieu of providing project-based assistance under 
                subparagraph (A) or (B), the Secretary may require 
                certain units in unsubsidized projects to contain use 
                restrictions providing that such units will be 
                available to and affordable by very low-income families 
                for the remaining useful life of the project, as 
                defined by the Secretary, if--
                            ``(i) the Secretary matches any reduction 
                        in units otherwise required to be assisted with 
                        project-based assistance under subparagraph (A) 
                        or (B) with at least an equivalent increase in 
                        units made affordable to very low-income 
                        persons within unsubsidized projects;
                            ``(ii) low-income tenants residing in units 
                        otherwise requiring project-based assistance 
                        under subparagraph (A) or (B) upon disposition 
                        receive section 8 tenant-based assistance; and
                            ``(iii) the units described in clause (i) 
                        are located within the same market area.
                    ``(D) Contract requirements for unsubsidized 
                projects.--Notwithstanding actions taken pursuant to 
                subparagraph (C), in unsubsidized projects, the 
                contract shall at least be sufficient to provide--
                            ``(i) project-based rental assistance for 
                        all units that are covered or were covered 
                        immediately before foreclosure or acquisition 
                        by an assistance contract under--
                                    ``(I) section 8(b)(2) of the United 
                                States Housing Act of 1937 (as such 
                                section existed before October 1, 1983) 
                                (new construction and substantial 
                                rehabilitation); section 8(b) of such 
                                Act (property disposition); section 
                                8(d)(2) of such Act (project-based 
                                certificates); section 8(e)(2) of such 
                                Act (moderate rehabilitation); section 
                                23 of such Act (as in effect before 
                                January 1, 1975); or section 101 of the 
                                Housing and Urban Development Act of 
                                1965 (rent supplements); or
                                    ``(II) section 8 of the United 
                                States Housing Act of 1937, following 
                                conversion from section 101 of the 
                                Housing and Urban Development Act of 
                                1965; and
                            ``(ii) tenant-based assistance under 
                        section 8 of the United States Housing Act of 
                        1937 for tenants currently residing in units 
                        that were covered by an assistance contract 
                        under the Loan Management Set-Aside program 
                        under section 8(b) of the United States Housing 
                        Act of 1937 immediately before foreclosure or 
                        acquisition of the project by the Secretary.
            ``(2) Annual contribution contracts.--In the case of 
        multifamily housing projects that are acquired by a purchaser 
        other than the Secretary at foreclosure or after sale by the 
        Secretary, enter into annual contribution contracts with public 
        housing agencies to provide tenant-based assistance under 
        section 8 of the United States Housing Act of 1937 to all low-
        income families who are eligible for such assistance on the 
        date that the project is acquired by the purchaser. The 
        Secretary shall take action under this paragraph only after 
        making a determination that there is available in the area an 
        adequate supply of habitable affordable housing for low-income 
        families. Actions taken pursuant to this paragraph may be taken 
        in connection with not more than 10 percent of the aggregate 
        number of units in subsidized or formerly subsidized projects 
        disposed of by the Secretary annually.
            ``(3) Other assistance.--
                    ``(A) In general.--In accordance with the authority 
                provided under the National Housing Act, reduce the 
                selling price, apply use or rent restrictions on 
                certain units, or provide other financial assistance to 
                the owners of multifamily housing projects that are 
                acquired by a purchaser other than the Secretary at 
                foreclosure, or after sale by the Secretary, on terms 
                which will ensure that--
                            ``(i) at least those units otherwise 
                        required to receive project-based section 8 
                        assistance pursuant to subparagraphs (A), (B), 
                        or (D) of paragraph (1) are available to and 
                        affordable by low-income persons; and
                            ``(ii) for the remaining useful life of the 
                        project, as defined by the Secretary, there 
                        shall be in force such use or rent restrictions 
                        as the Secretary may prescribe.
                    ``(B) Definition.--A unit shall be considered 
                affordable under this paragraph if--
                            ``(i) for very low-income tenants, the rent 
                        for such unit does not exceed 30 percent of 50 
                        percent of the area median income, as 
                        determined by the Secretary, with adjustments 
                        for family size; and
                            ``(ii) for low-income tenants other than 
                        very low-income tenants, the rent for such unit 
                        does not exceed 30 percent of 80 percent of the 
                        area median income, as determined by the 
                        Secretary, with adjustments for family size.
                    ``(C) Very low-income tenants.--The Secretary shall 
                provide assistance under section 8 of the United States 
                Housing Act of 1937 to any very low-income tenant 
                currently residing in a unit otherwise required to 
                receive project-based assistance under section 8, 
                pursuant to subparagraph (A), (B), or (D) of paragraph 
                (1), if the rents charged such tenants as a result of 
                actions taken pursuant to this paragraph exceed the 
                amount payable as rent under section 3(a) of the United 
                States Housing Act of 1937.
            ``(4) Transfer for use under other programs of the 
        secretary.--
                    ``(A) In general.--Enter into an agreement 
                providing for the transfer of a multifamily housing 
                project--
                            ``(i) to a public housing agency for use of 
                        the project as public housing; or
                            ``(ii) to an owner or another appropriate 
                        entity for use of the project under section 202 
                        of the Housing Act of 1959 or under section 811 
                        of the Cranston-Gonzalez National Affordable 
                        Housing Act.
                    ``(B) Requirements for agreement.--The agreement 
                described in subparagraph (A) shall--
                            ``(i) contain such terms, conditions, and 
                        limitations as the Secretary determines 
                        appropriate, including requirements to assure 
                        use of the project under the public housing, 
                        section 202, and section 811 programs; and
                            ``(ii) ensure that no current tenant will 
                        be displaced as a result of actions taken under 
                        this paragraph.
    ``(f) Other Assistance.--In addition to the actions authorized by 
subsection (e), the Secretary may take any of the following actions:
            ``(1) Short-term loans.--Provide short-term loans to 
        facilitate the sale of multifamily housing projects to 
        nonprofit organizations or to public agencies if--
                    ``(A) authority for such loans is provided in 
                advance in an appropriations Act;
                    ``(B) such loans are for a term of not more than 5 
                years;
                    ``(C) the Secretary is presented with satisfactory 
                documentation, evidencing a commitment of permanent 
                financing to replace such short-term loan, from a 
                lender who meets standards set forth by the Secretary; 
                and
                    ``(D) the terms of such loans are consistent with 
                prevailing practices in the marketplace or the 
                provision of such loans results in no cost to the 
                Government, as defined in section 502 of the 
                Congressional Budget Act.
            ``(2) Tenant-based assistance.--In connection with projects 
        referred to in subsection (e), make available tenant-based 
        assistance under section 8 of the United States Housing Act of 
        1937 to very low-income families (as defined in section 3(b)(2) 
        of the United States Housing Act of 1937) that do not otherwise 
        qualify for project-based assistance.
            ``(3) Alternative uses.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, and subject to notice to and comment 
                from existing tenants, allow not more than--
                            ``(i) 5 percent of the total number of 
                        units in multifamily housing projects that are 
                        disposed of by the Secretary during any 1-year 
                        period to be made available for uses other than 
                        rental or cooperative uses, including low-
                        income homeownership opportunities, or in any 
                        particular project, community space, office 
                        space for tenant or housing-related service 
                        providers or security programs, or small 
                        business uses, if such uses benefit the tenants 
                        of the project; and
                            ``(ii) 5 percent of the total number of 
                        units in multifamily housing projects that are 
                        disposed of by the Secretary during any 1-year 
                        period to be used in any manner, if the 
                        Secretary and the unit of general local 
                        government or area-wide governing body 
                        determine that such use will further fair 
                        housing, community development, or neighborhood 
                        revitalization goals.
                    ``(B) Displacement protection.--The Secretary shall 
                make available tenant-based rental assistance under 
                section 8 of the United States Housing Act of 1937 to 
                any tenant displaced as a result of actions taken by 
                the Secretary pursuant to subparagraph (A), and the 
                Secretary shall take such actions as the Secretary 
                determines necessary to ensure the successful use of 
                any tenant-based assistance.
    ``(g) Authorization of Use or Rent Restrictions in Unsubsidized 
Projects.--In carrying out the goals specified in subsection (a), the 
Secretary may require certain units in unsubsidized projects to contain 
use or rent restrictions providing that such units will be available to 
and affordable by very low-income persons for the remaining useful life 
of the property, as defined by the Secretary.
    ``(h) Contract Requirements.--
            ``(1) Contract term.--
                    ``(A) In general.--Contracts for project-based 
                rental assistance under section 8 of the United States 
                Housing Act of 1937 provided pursuant to this section 
                shall be for a term of not more than 15 years; and
                    ``(B) Contract term of less than 15 years.--
                Notwithstanding subparagraph (A), to the extent that 
                units receive project-based assistance for a contract 
                term of less than 15 years, the Secretary shall require 
                that rents charged to tenants for such units not exceed 
                the amount payable for rent under section 3(a) of the 
                United States Housing Act of 1937 for a period of at 
                least 15 years.
            ``(2) Contract rent.--
                    ``(A) In general.--The Secretary shall set contract 
                rents for section 8 project-based rental contracts 
                issued under this section at levels that, in 
                conjunction with other resources available to the 
                purchaser, provide for the necessary costs of 
                rehabilitation of such project and do not exceed the 
                percentage of the existing housing fair market rents 
                for the area (as determined by the Secretary under 
                section 8(c) of the United States Housing Act of 1937) 
                as the Secretary may prescribe.
                    ``(B) Up-front grants and loans.--If such an 
                approach is determined to be more cost-effective, the 
                Secretary may utilize the budget authority provided for 
                project-based section 8 contracts issued under this 
                section to--
                            ``(i) provide project-based section 8 
                        rental assistance; and
                            ``(ii)(I) provide up-front grants for the 
                        necessary cost of rehabilitation; or
                            ``(II) pay for any cost to the Government, 
                        as defined in section 502 of the Congressional 
                        Budget Act, for loans made pursuant to 
                        subsection (f)(1).
    ``(i) Disposition Plan.--
            ``(1) In general.--Prior to the sale of a multifamily 
        housing project that is owned by the Secretary, the Secretary 
        shall develop a disposition plan for the project that specifies 
        the minimum terms and conditions of the Secretary for 
        disposition of the project, the initial sales price that is 
        acceptable to the Secretary, and the assistance that the 
        Secretary plans to make available to a prospective purchaser in 
        accordance with this section. The initial sales price shall 
        reflect the intended use of the property after sale.
            ``(2) Community and tenant input into disposition plans and 
        sales.--
                    ``(A) In general.--In carrying out this section, 
                the Secretary shall develop procedures to obtain 
                appropriate and timely input into disposition plans 
                from officials of the unit of general local government 
                affected, the community in which the project is 
                situated, and the tenants of the project.
                    ``(B) Tenant organizations.--The Secretary shall 
                develop procedures to facilitate, where feasible and 
                appropriate, the sale of multifamily housing projects 
                to existing tenant organizations with demonstrated 
                capacity or to public or nonprofit entities which 
                represent or are affiliated with existing tenant 
                organizations.
                    ``(C) Technical assistance.--
                            ``(i) Use of funds.--To carry out the 
                        procedures developed under subparagraphs (A) 
                        and (B), the Secretary is authorized to provide 
                        technical assistance, directly or indirectly, 
                        and to use amounts appropriated for technical 
                        assistance under the Emergency Low Income 
                        Housing Preservation Act of 1987, the Low-
                        Income Housing Preservation and Resident 
                        Homeownership Act of 1990, subtitle B of title 
                        IV of the Cranston-Gonzalez National Affordable 
                        Housing Act, or under this section for the 
                        provision of technical assistance under this 
                        section.
                            ``(ii) Source of funds.--Recipients of 
                        technical assistance funding under the 
                        Emergency Low Income Housing Preservation Act 
                        of 1987, the Low-Income Housing Preservation 
                        and Resident Homeownership Act of 1990, 
                        subtitle B of title IV of the Cranston-Gonzalez 
                        National Affordable Housing Act, or under this 
                        section shall be permitted to provide technical 
                        assistance to the extent of such funding under 
                        any of such programs or under this section, 
                        notwithstanding the source of funding.
    ``(j) Right of First Refusal.--
            ``(1) Procedure.--
                    ``(A) Notification by secretary of the acquisition 
                of title.--Not later than 30 days after acquiring title 
                to a project, the Secretary shall notify the unit of 
                general local government and the State agency or 
                agencies designated by the Governor of the acquisition 
                of such title.
                    ``(B) Expression of interest.--Not later than 45 
                days after receiving notification from the Secretary 
                under subparagraph (A), the unit of general local 
                government or designated State agency may submit to the 
                Secretary a preliminary expression of interest in the 
                project. The Secretary may take such actions as may be 
                necessary to require the unit of general local 
                government or designated State agency to substantiate 
                such interest.
                    ``(C) Timely expression of interest.--If the unit 
                of general local government or designated State agency 
                has expressed interest in the project before the 
                expiration of the 45-day period referred to in 
                subparagraph (B), and has substantiated such interest 
                if requested, the Secretary, upon approval of a 
                disposition plan for a project, shall notify the unit 
                of general local government and designated State agency 
                of the terms and conditions of the disposition plan and 
                give the unit of general local government or designated 
                State agency not more than 90 days after the date of 
                such notification to make an offer to purchase the 
                project.
                    ``(D) No timely expression of interest.--If the 
                unit of general local government or designated State 
                agency does not express interest before the expiration 
                of the 45-day period referred to in subparagraph (B), 
                or does not substantiate an expressed interest if 
                requested, the Secretary, upon approval of a 
                disposition plan, may offer the project for sale to any 
                interested person or entity.
            ``(2) Acceptance of offers.--Where the Secretary has given 
        the unit of general local government or designated State agency 
        90 days to make an offer to purchase the project, the Secretary 
        shall accept an offer that complies with the terms and 
        conditions of the disposition plan. The Secretary may accept an 
        offer that does not comply with the terms and conditions of the 
        disposition plan if the Secretary determines that the offer 
        will further the goals specified in subsection (a) by actions 
        that include extension of the duration of low-income 
        affordability restrictions or otherwise restructuring the 
        transaction in a manner that enhances the long-term 
        affordability for low-income persons. The Secretary shall, in 
        particular, have discretion to reduce the initial sales price 
        in exchange for the extension of low-income affordability 
        restrictions beyond the period of assistance contemplated by 
        the attachment of assistance pursuant to subsection (e). If the 
        Secretary and the unit of general local government or 
        designated State agency cannot reach agreement within 90 days, 
        the Secretary may offer the project for sale to the general 
        public.
            ``(3) Purchase by unit of general local government or 
        designated state agency.--Notwithstanding any other provision 
        of law, a unit of general local government (including a public 
        housing agency) or designated State agency may purchase a 
        subsidized or formerly subsidized project in accordance with 
        this subsection.
            ``(4) Applicability.--This subsection shall apply to 
        projects that are acquired on or after the effective date of 
        this subsection. With respect to projects acquired before such 
        effective date, the Secretary may apply--
                    ``(A) the requirements of paragraphs (2) and (3) of 
                section 203(e) as such paragraphs existed immediately 
                before the effective date of this subsection; or
                    ``(B) the requirements of paragraphs (1) and (2) of 
                this subsection, if the Secretary gives the unit of 
                general local government or designated State agency--
                            ``(i) 45 days to express interest in the 
                        project; and
                            ``(ii) if the unit of general local 
                        government or designated State agency expresses 
                        interest in the project before the expiration 
                        of the 45-day period, and substantiates such 
                        interest if requested, 90 days from the date of 
                        notification of the terms and conditions of the 
                        disposition plan to make an offer to purchase 
                        the project.
    ``(k) Displacement of Tenants and Relocation Assistance.--
            ``(1) In general.--Whenever tenants will be displaced as a 
        result of the disposition of, or repairs to, a multifamily 
        housing project that is owned by the Secretary (or for which 
        the Secretary is mortgagee in possession), the Secretary shall 
        identify tenants who will be displaced, and shall notify all 
        such tenants of their pending displacement and of any 
        relocation assistance which may be available. In the case of a 
        multifamily housing project that is not owned by the Secretary 
        (and for which the Secretary is not mortgagee in possession), 
        the Secretary shall require the owner of the project to carry 
        out the requirements of this paragraph.
            ``(2) Rights of displaced tenants.--The Secretary shall 
        assure for any such tenant (who continues to meet applicable 
        qualification standards) the right--
                    ``(A) to return, whenever possible, to a repaired 
                unit;
                    ``(B) to occupy a unit in another multifamily 
                housing project owned by the Secretary;
                    ``(C) to obtain housing assistance under the United 
                States Housing Act of 1937; or
                    ``(D) to receive any other available relocation 
                assistance as the Secretary determines to be 
                appropriate.
    ``(l) Mortgage and Project Sales.--
            ``(1) In general.--The Secretary may not approve the sale 
        of any loan or mortgage held by the Secretary (including any 
        loan or mortgage owned by the Government National Mortgage 
        Association) on any subsidized project or formerly subsidized 
        project, unless such sale is made as part of a transaction that 
        will ensure that such project will continue to operate at least 
        until the maturity date of such loan or mortgage, in a manner 
        that will provide rental housing on terms at least as 
        advantageous to existing and future tenants as the terms 
        required by the program under which the loan or mortgage was 
        made or insured prior to the assignment of the loan or mortgage 
        on such project to the Secretary.
            ``(2) Sale of certain projects.--The Secretary may not 
        approve the sale of any subsidized project--
                    ``(A) that is subject to a mortgage held by the 
                Secretary; or
                    ``(B) if the sale transaction involves the 
                provision of any additional subsidy funds by the 
                Secretary or a recasting of the mortgage, unless such 
                sale is made as part of a transaction that will ensure 
                that such project will continue to operate at least 
                until the maturity date of the loan or mortgage, in a 
                manner that will provide rental housing on terms at 
                least as advantageous to existing and future tenants as 
                the terms required by the program under which the loan 
                or mortgage was made or insured prior to the proposed 
                sale of the project.
            ``(3) Mortgage sales to state and local governments.--
        Notwithstanding any provision of law that may require 
        competitive sales or bidding, the Secretary may carry out 
        negotiated sales of subsidized or formerly subsidized mortgages 
        held by the Secretary, without the competitive selection of 
        purchasers or intermediaries, to units of general local 
        government or State agencies, or groups of investors that 
        include at least one such unit of general local government or 
        State agency, if the negotiations are conducted with such 
        agencies, except that--
                    ``(A) the terms of any such sale shall include the 
                agreement of the purchasing agency or unit of local 
                government or State agency to act as mortgagee or owner 
                of a beneficial interest in such mortgages, in a manner 
                consistent with maintaining the projects that are 
                subject to such mortgages for occupancy by the general 
                tenant group intended to be served by the applicable 
                mortgage insurance program, including, to the extent 
                the Secretary determines appropriate, authorizing such 
                unit of local government or State agency to enforce the 
                provisions of any regulatory agreement or other program 
                requirements applicable to the related projects; and
                    ``(B) the sales prices for such mortgages shall be, 
                in the determination of the Secretary, the best prices 
                that may be obtained for such mortgages from a unit of 
                general local government or State agency, consistent 
                with the expectation and intention that the projects 
                financed will be retained for use under the applicable 
                mortgage insurance program for the life of the initial 
                mortgage insurance contract.
            ``(4) Sale of mortgages covering unsubsidized projects.--
        Notwithstanding any other provision of law, the Secretary may 
        sell mortgages held on unsubsidized projects on such terms and 
        conditions as the Secretary may prescribe.
    ``(m) Report to Congress.--Not later than June 1 of each year, the 
Secretary shall submit to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Banking, Finance and Urban 
Affairs of the House of Representatives, a report describing the status 
of multifamily housing projects owned by or subject to mortgages held 
by the Secretary, which report shall include--
            ``(1) the name, address, and size of each project;
            ``(2) the nature and date of assignment;
            ``(3) the status of the mortgage;
            ``(4) the physical condition of the project;
            ``(5) an occupancy profile of the project, including the 
        income, family size, and race of current residents as well as 
        the rents paid by such residents;
            ``(6) the proportion of units in a project that are vacant;
            ``(7) the date on which the Secretary became mortgagee in 
        possession;
            ``(8) the date and conditions of any foreclosure sale;
            ``(9) the date of acquisition by the Secretary;
            ``(10) the date and conditions of any property disposition 
        sale;
            ``(11) a description of actions undertaken pursuant to this 
        section, including--
                    ``(A) a comparison of results between actions taken 
                after enactment of the Housing and Community 
                Development Act of 1993 and actions taken in years 
                prior to such enactment;
                    ``(B) a description of any impediments to the 
                disposition or management of multifamily housing 
                projects, together with a recommendation of proposed 
                legislative or regulatory changes designed to 
                ameliorate such impediments;
                    ``(C) a description of actions taken to restructure 
                or commence foreclosure on delinquent multifamily 
                mortgages held by the Department; and
                    ``(D) a description of actions taken to monitor and 
                prevent the default of multifamily housing mortgages 
                held by the Federal Housing Administration;
            ``(12) a description of any of the functions performed in 
        connection with this section that are contracted out to public 
        or private entities or to States, including--
                    ``(A) the costs associated with such delegation;
                    ``(B) the implications of contracting out or 
                delegating such functions for current Department field 
                or regional personnel, including anticipated personnel 
                or work load reductions;
                    ``(C) necessary oversight required by Department 
                personnel, including anticipated personnel hours 
                devoted to such oversight;
                    ``(D) a description of any authority granted to 
                such public or private entities or States in 
                conjunction with the functions that have been delegated 
                or contracted out or that are not otherwise available 
                for use by Department personnel; and
                    ``(E) the extent to which such public or private 
                entities or States include tenants of multifamily 
                housing projects in the disposition planning for such 
                projects;
            ``(13) a description of the activities carried out under 
        subsection (j) during the preceding year; and
            ``(14) a description and assessment of the rules, 
        guidelines, and practices governing the Department's management 
        of multifamily housing projects that are owned by the Secretary 
        (or for which the Secretary is mortgagee in possession) as well 
        as the steps that the Secretary has taken or plans to take to 
        improve the management performance of the Department.''.
            (3) Effective date.--The Secretary shall, by notice 
        published in the Federal Register, which shall take effect upon 
        publication, establish such requirements as may be necessary to 
        implement the amendments made by this subsection. The notice 
        shall invite public comments, and the Secretary shall issue 
        final regulations based on the initial notice, taking into 
        account any public comments received.
    (b) Repeal of the National Small Business Tree Planting Program.--
Section 24 of the Small Business Act (15 U.S.C. 651) is repealed.

                       TITLE IV--MONEY LAUNDERING

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Money Laundering Suppression Act 
of 1994''.

SEC. 402. REFORM OF CTR EXEMPTION REQUIREMENTS TO REDUCE NUMBER AND 
              SIZE OF REPORTS CONSISTENT WITH EFFECTIVE LAW 
              ENFORCEMENT.

    (a) In General.--Section 5313 of title 31, United States Code, is 
amended by adding at the end the following new subsections:
    ``(d) Mandatory Exemptions From Reporting Requirements.--
            ``(1) In general.--The Secretary of the Treasury shall 
        exempt, pursuant to section 5318(a)(5), a depository 
        institution from the reporting requirements of subsection (a) 
        (and regulations prescribed under such subsection) with respect 
        to transactions between the depository institution and the 
        following categories of entities:
                    ``(A) Another depository institution.
                    ``(B) A department or agency of the United States, 
                any State, or any political subdivision of any State, 
                including any entity established under the laws of the 
                United States, any State, or any political subdivision 
                of any State, or under an interstate compact between 2 
                or more States, which exercises governmental authority 
                on behalf of the United States, the State, or the 
                political subdivision.
                    ``(C) Any business or category of business the 
                reports on which have little or no value for law 
                enforcement purposes.
            ``(2) Notice of exemption.--The Secretary of the Treasury 
        shall publish in the Federal Register at such times as the 
        Secretary determines to be appropriate (but not less frequently 
        than once during each year) a list of all the entities whose 
        transactions with a depository institution are exempt under 
        this subsection from the reporting requirements of subsection 
        (a) (and regulations prescribed under such subsection).
    ``(e) Discretionary Exemptions From Reporting Requirements.--
            ``(1) In general.--The Secretary of the Treasury may 
        exempt, pursuant to section 5318(a)(5), a depository 
        institution from the reporting requirements of subsection (a) 
        (and regulations prescribed under such subsection) with respect 
        to transactions between the depository institution and a 
        qualified business customer of the institution on the basis of 
        information submitted to the Secretary by the institution in 
        accordance with procedures which the Secretary shall establish.
            ``(2) Qualified business customer defined.--For purposes of 
        this subsection, the term `qualified business customer' means a 
        business which--
                    ``(A) maintains a transaction account (as defined 
                in section 19(b)(1)(C) of the Federal Reserve Act) at 
                the depository institution;
                    ``(B) frequently engages in transactions with the 
                depository institution which are subject to the 
                reporting requirements of subsection (a) (and 
                regulations prescribed under such subsection); and
                    ``(C) meets criteria which the Secretary determines 
                are sufficient to ensure that the purposes of this 
                subchapter are carried out without requiring a report 
                with respect to such transactions.
            ``(3) Criteria for exemption.--The Secretary of the 
        Treasury shall establish, by regulation, the criteria for 
        granting and maintaining an exemption under paragraph (1).
            ``(4) Guidelines.--
                    ``(A) In general.--The Secretary of the Treasury 
                shall establish guidelines for depository institutions 
                to follow in selecting customers for an exemption under 
                this subsection.
                    ``(B) Contents.--The guidelines may include a 
                description of the types of businesses or an 
                itemization of specific businesses for which no 
                exemption will be granted under this subsection to any 
                depository institution.
            ``(5) Annual review.--The Secretary of the Treasury shall 
        prescribe regulations requiring each depository institution 
        to--
                    ``(A) review, at least once during each year, the 
                qualified business customers of such institution with 
                respect to whom an exemption has been granted under 
                this subsection; and
                    ``(B) upon the completion of such review, resubmit 
                information about such customers, with such 
                modifications as the institution determines to be 
                appropriate, to the Secretary for the Secretary's 
                approval.
            ``(6) 2-year phase-in provision.--During the 2-year period 
        beginning on the date of enactment of the Money Laundering 
        Suppression Act of 1994, this subsection shall be applied by 
        the Secretary on the basis of such criteria as the Secretary 
        determines to be appropriate to achieve an orderly 
        implementation of the requirements of this subsection.
    ``(f) Provisions Applicable to Mandatory and Discretionary 
Exemptions.--
            ``(1) Limitation on liability of depository institutions.--
        No depository institution shall be subject to any penalty which 
        may be imposed under this subchapter for the failure of the 
        institution to file a report with respect to a transaction with 
        a customer for whom an exemption has been granted under 
        subsection (d) or (e), unless the institution--
                    ``(A) knowingly files false or incomplete 
                information to the Secretary with respect to the 
                transaction or the customer engaging in the 
                transaction; or
                    ``(B) has reason to believe at the time the 
                exemption is granted or the transaction is entered into 
                that the customer or the transaction does not meet the 
                criteria established for granting such exemption.
            ``(2) Coordination with other provisions.--Any exemption 
        granted by the Secretary of the Treasury under section 5318(a) 
        in accordance with this section, and any transaction which is 
        subject to such exemption, shall be subject to any other 
        provision of law applicable to such exemption, including--
                    ``(A) the authority of the Secretary, under section 
                5318(a)(5), to revoke such exemption at any time; and
                    ``(B) any requirement to report, or any authority 
                to require a report on, any possible violation of any 
                law or regulation or any suspected criminal activity.
    ``(g) Depository Institution Defined.--For purposes of this 
section, the term `depository institution' has the meaning given to 
such term in section 19(b)(1)(A) of the Federal Reserve Act.''.
    (b) Report Reduction Goal; Reports.--
            (1) In general.--In implementing the amendment made by 
        subsection (a), the Secretary of the Treasury shall seek to 
        reduce, within a reasonable period of time, the number of 
        reports required to be filed in the aggregate by depository 
        institutions pursuant to section 5313(a) of title 31, United 
        States Code, by not less than 30 percent of the number filed 
        during the year preceding the date of enactment of this Act.
            (2) Interim report.--The Secretary of the Treasury shall 
        submit a report to the Congress not later than the end of the 
        180-day period beginning on the date of enactment of this Act 
        on the progress made by the Secretary in implementing the 
        amendment made by subsection (a).
            (3) Annual report.--The Secretary of the Treasury shall 
        submit an annual report to the Congress after the end of each 
        of the first 5 calendar years which begin after the date of 
        enactment of this Act on the extent to which the Secretary has 
        reduced the overall number of currency transaction reports 
        required to be filed with the Secretary pursuant to section 
        5313(a) of title 31, United States Code, consistently with the 
        purposes of such section and effective law enforcement.
    (c) Streamlined Currency Transaction Reports.--The Secretary of the 
Treasury shall take such action as may be appropriate to redesign the 
format of reports required to be filed by any financial institution (as 
defined in section 5312(a)(2) of title 31, United States Code) under 
section 5313(a) of title 31, United States Code, to eliminate the need 
to report information which has little or no value for law enforcement 
purposes and reduce the time and effort required to prepare such report 
for filing by any such financial institution under such section.

SEC. 403. SINGLE DESIGNEE FOR REPORTING OF SUSPICIOUS TRANSACTIONS.

    (a) In General.--Section 5318(g) of title 31, United States Code, 
is amended by adding at the end the following new paragraph:
            ``(4) Single designee for reporting suspicious 
        transactions.--
                    ``(A) In general.--In requiring reports under 
                paragraph (1) of suspicious transactions, the Secretary 
                of the Treasury shall designate, to the extent 
                practicable and appropriate, a single officer or agency 
                of the United States to whom such reports shall be 
                made.
                    ``(B) Duty of designee.--The officer or agency of 
                the United States designated by the Secretary of the 
                Treasury pursuant to subparagraph (A) shall refer any 
                report of a suspicious transaction to the appropriate 
                law enforcement or supervisory agency.
                    ``(C) Coordination with other reporting 
                requirements.--Subparagraph (A) shall not be construed 
                as precluding any supervisory agency for any financial 
                institution from requiring the financial institution to 
                submit any information or report to the agency or 
                another agency pursuant to any provision of law other 
                than this subsection.
                    ``(D) Reports.--
                            ``(i) Reports required.--The Secretary of 
                        the Treasury shall submit an annual report to 
                        the Congress at the times required under clause 
                        (ii) on the number of suspicious transactions 
                        reported to the officer or agency designated 
                        under subparagraph (A) during the period 
                        covered by the report and the disposition of 
                        such reports.
                            ``(ii) Time for submitting reports.--The 
                        first report required under clause (i) shall be 
                        filed before the end of the 1-year period 
                        beginning on the date of enactment of the Money 
                        Laundering Suppression Act of 1994, and each 
                        subsequent report shall be filed, not later 
                        than 90 days after the end of each of the 5 
                        calendar years which begin after such date of 
                        enactment.''.
    (b) Designation Required To Be Made Expeditiously.--The initial 
designation of an officer or agency of the United States pursuant to 
the amendment made by subsection (a) shall be made before the end of 
the 180-day period beginning on the date of enactment of this Act.

SEC. 404. IMPROVEMENT OF IDENTIFICATION OF MONEY LAUNDERING SCHEMES.

    (a) Enhanced Training, Examinations, and Referrals by Banking 
Agencies.--Before the end of the 6-month period beginning on the date 
of enactment of this Act, each appropriate Federal banking agency 
shall, in consultation with the Secretary of the Treasury and other 
appropriate law enforcement agencies--
            (1) review and enhance training and examination procedures 
        to improve the identification of money laundering schemes 
        involving depository institutions; and
            (2) review and enhance procedures for referring cases to 
        any other appropriate law enforcement agency.
    (b) Improved Reporting of Criminal Schemes by Law Enforcement 
Agencies.--The Secretary of the Treasury and each appropriate law 
enforcement agency shall, on a regular basis, provide information 
regarding money laundering schemes and activities involving depository 
institutions to each appropriate Federal banking agency to enhance the 
agency's ability to examine for and identify money laundering.
    (c) Report to Congress.--Not later than 1 year after the date of 
enactment of this Act, the Federal banking agencies shall jointly 
submit a report to the Congress on the progress made in carrying out 
subsection (a) and the usefulness of information received pursuant to 
subsection (b).
    (d) Definitions.--The terms ``appropriate Federal banking agency'' 
and ``Federal banking agencies'' have the same meanings as in section 3 
of the Federal Deposit Insurance Act.

SEC. 405. NEGOTIABLE INSTRUMENTS DRAWN ON FOREIGN BANKS SUBJECT TO 
              RECORDKEEPING AND REPORTING REQUIREMENTS.

    Section 5312(a)(3) of title 31, United States Code, is amended--
            (1) by striking ``and'' at the end of subparagraph (A);
            (2) by striking the period at the end of subparagraph (B) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(C) as the Secretary of the Treasury shall 
                provide by regulation for purposes of section 5316, 
                checks, drafts, notes, money orders, and other similar 
                instruments which are drawn on or by a foreign 
                financial institution and are not in bearer form.''.

SEC. 406. IMPOSITION OF CIVIL MONEY PENALTIES BY APPROPRIATE FEDERAL 
              BANKING AGENCIES.

    Section 5321 of title 31, United States Code, is amended by adding 
at the end the following new subsection:
    ``(e) Delegation of Assessment Authority to Banking Agencies.--
            ``(1) In general.--The Secretary of the Treasury shall 
        delegate, in accordance with section 5318(a)(1), and subject to 
        such terms and conditions as the Secretary may impose in 
        accordance with paragraph (3), any authority of the Secretary 
        to assess a civil money penalty under this section on 
        depository institutions to the appropriate Federal banking 
        agencies.
            ``(2) Authority of agencies.--Subject to any term or 
        condition imposed by the Secretary of the Treasury under 
        paragraph (3), the provisions of this section shall apply to an 
        appropriate Federal banking agency to which is delegated any 
        authority of the Secretary under this section in the same 
        manner such provisions apply to the Secretary.
            ``(3) Terms and conditions.--
                    ``(A) In general.--The Secretary of the Treasury 
                shall prescribe by regulation the terms and conditions 
                which shall apply to any delegation under paragraph 
                (1).
                    ``(B) Maximum dollar amount.--The terms and 
                conditions authorized under subparagraph (A) may 
                include, in the Secretary's sole discretion, a 
                limitation on the amount of any civil penalty which may 
                be assessed by an appropriate Federal banking agency 
                pursuant to a delegation under paragraph (1).
            ``(4) Definitions.--For purposes of this subsection, the 
        terms `depository institution' and `Federal banking agencies' 
        have the same meanings as in section 3 of the Federal Deposit 
        Insurance Act.''.

SEC. 407. UNIFORM STATE LICENSING AND REGULATION OF CHECK CASHING, 
              CURRENCY EXCHANGE, AND MONEY TRANSMITTING BUSINESSES.

    (a) Uniform Laws and Enforcement.--For purposes of preventing money 
laundering and protecting the payment system from fraud and abuse, it 
is the sense of the Congress that the several States should--
            (1) establish uniform laws for licensing and regulating 
        businesses which--
                    (A) provide check cashing, currency exchange, or 
                money transmitting or remittance services, or issue or 
                redeem money orders, travelers' checks, and other 
                similar instruments; and
                    (B) are not depository institutions (as defined in 
                section 19(b)(1)(A) of the Federal Reserve Act); and
            (2) provide sufficient resources to the appropriate State 
        agency to enforce such laws and regulations prescribed pursuant 
        to such laws.
    (b) Model Statute.--It is the sense of the Congress that the 
several States should develop, through the auspices of the National 
Conference of Commissioners on Uniform State Laws, the American Law 
Institute, or such other forum as the States may determine to be 
appropriate, a model statute to carry out the goals described in 
subsection (a) which would include the following:
            (1) Licensing requirements.--A requirement that any 
        business described in subsection (a)(1) be licensed and 
        regulated by an appropriate State agency in order to engage in 
        any such activity within the State.
            (2) Licensing standards.--A requirement that--
                    (A) in order for any business described in 
                subsection (a)(1) to be licensed in the State, the 
                appropriate State agency shall review and approve--
                            (i) the business record and the capital 
                        adequacy of the business seeking the license; 
                        and
                            (ii) the competence, experience, integrity, 
                        and financial ability of any individual who--
                                    (I) is a director, officer, or 
                                supervisory employee of such business; 
                                or
                                    (II) owns or controls such 
                                business; and
                    (B) any record, on the part of any business seeking 
                the license or any person referred to in subparagraph 
                (A)(ii), of--
                            (i) any criminal activity;
                            (ii) any fraud or other act of personal 
                        dishonesty;
                            (iii) any act, omission, or practice which 
                        constitutes a breach of a fiduciary duty; or
                            (iv) any suspension or removal, by any 
                        agency or department of the United States or 
                        any State, from participation in the conduct of 
                        any federally or State licensed or regulated 
                        business;
                may be grounds for the denial of any such license by 
                the appropriate State agency.
            (3) Procedures to ensure compliance with federal cash 
        transaction reporting requirements.--A civil or criminal 
        penalty for operating any business referred to in paragraph (1) 
        without establishing and complying with appropriate procedures 
        to ensure compliance with subchapter II of chapter 53 of title 
        31, United States Code (relating to records and reports on 
        monetary instruments transactions).
            (4) Criminal penalties for operation of business without a 
        license.--A criminal penalty for operating any business 
        referred to in paragraph (1) without a license within the State 
        after the end of an appropriate transition period beginning on 
        the date of enactment of such model statute by the State.
    (c) Study Required.--The Secretary of the Treasury shall conduct a 
study of--
            (1) the progress made by the several States in developing 
        and enacting a model statute which--
                    (A) meets the requirements of subsection (b); and
                    (B) furthers the goals of--
                            (i) preventing money laundering by 
                        businesses which are required to be licensed 
                        under any such model statute; and
                            (ii) protecting the payment system, 
                        including the receipt, payment, collection, and 
                        clearing of checks, from fraud and abuse by 
                        such businesses; and
            (2) the adequacy of--
                    (A) the activity of the several States in enforcing 
                the requirements of such statute; and
                    (B) the resources made available to the appropriate 
                State agencies for such enforcement activity.
    (d) Report Required.--Before the end of the 3-year period beginning 
on the date of enactment of this Act and by the end of each of the 
first two 1-year periods beginning after the end of such 3-year period, 
the Secretary of the Treasury shall submit a report to the Congress 
containing the findings and recommendations of the Secretary in 
connection with the study under subsection (c), together with such 
recommendations for legislative and administrative action as the 
Secretary may determine to be appropriate.
    (e) Recommendations in Cases of Inadequate Regulation and 
Enforcement by States.--If the Secretary of the Treasury determines 
that any State has been unable--
            (1) to enact a statute which meets the requirements 
        described in subsection (b);
            (2) to undertake adequate activity to enforce such statute; 
        or
            (3) to make adequate resources available to the appropriate 
        State agency for such enforcement activity;
the report submitted pursuant to subsection (d) shall contain 
recommendations designed to facilitate enactment and enforcement of 
such a statute.
    (f) Federal Funding Study.--
            (1) Study required.--The Secretary of the Treasury shall 
        conduct a study to identify possible available sources of 
        Federal funding to cover costs to the States to implement this 
        section.
            (2) Report.--The Secretary of the Treasury shall submit a 
        report to the Congress on the study conducted pursuant to 
        paragraph (1) before the end of the 18-month period beginning 
        on the date of enactment of this Act.

SEC. 408. REGISTRATION OF MONEY TRANSMITTING BUSINESSES TO PROMOTE 
              EFFECTIVE LAW ENFORCEMENT.

    (a) Findings and Purposes.--
            (1) Findings.--The Congress finds the following:
                    (A) Money transmitting businesses are subject to 
                the recordkeeping and reporting requirements of 
                subchapter II of chapter 53 of title 31, United States 
                Code.
                    (B) Money transmitting businesses are largely 
                unregulated businesses and are frequently used in 
                sophisticated schemes to--
                            (i) transfer large amounts of money which 
                        are the proceeds of unlawful enterprises; and
                            (ii) evade the requirements of subchapter 
                        II of chapter 53 of title 31, United States 
                        Code, the Internal Revenue Code of 1986, and 
                        other laws of the United States.
                    (C) Information on the identity of money 
                transmitting businesses and the names of the persons 
                who own or control, or are officers or employees of, a 
                money transmitting business would have a high degree of 
                usefulness in criminal, tax, or regulatory 
                investigations and proceedings.
            (2) Purpose.--It is the purpose of this section to 
        establish a registration requirement for businesses engaged in 
        providing check cashing, currency exchange, or money 
        transmitting or remittance services, or issuing or redeeming 
        money orders, travelers' checks, and other similar instruments 
        to assist the Secretary of the Treasury, the Attorney General, 
        and other supervisory and law enforcement agencies to 
        effectively enforce the criminal, tax, and regulatory laws and 
        prevent such money transmitting businesses from engaging in 
        illegal activities.
    (b) In General.--Subchapter II of chapter 53 of title 31, United 
States Code, is amended by adding at the end the following new section:
``Sec. 5329. Registration of money transmitting businesses
    ``(a) Registration With Secretary of the Treasury Required.--
            ``(1) In general.--Any person who owns or controls a money 
        transmitting business which is not a depository institution (as 
        defined in section 19(b)(1)(A) of the Federal Reserve Act) 
        shall register the business (whether or not the business is 
        licensed as a money transmitting business in any State) with 
        the Secretary of the Treasury before the end of the 180-day 
        period beginning on the later of--
                    ``(A) the date of enactment of this section; or
                    ``(B) the date the business is established.
            ``(2) Form and manner of registration.--Subject to the 
        requirements of subsection (b), the Secretary of the Treasury 
        shall prescribe, in regulations, the form and manner for 
        registering a money transmitting business pursuant to paragraph 
        (1).
            ``(3) Businesses remain subject to state law.--This section 
        shall not be construed as superseding any requirement of State 
        law relating to money transmitting businesses operating in such 
        State.
            ``(4) False and incomplete information.--The filing of 
        false or materially incomplete information in connection with 
        the registration of a money transmitting business shall be 
        considered as a failure to comply with the requirements of this 
        subsection.
    ``(b) Contents of Registration.--The registration of a money 
transmitting business under subsection (a) shall include the following 
information:
            ``(1) The name and location of the business.
            ``(2) The name and address of each person who--
                    ``(A) owns or controls the business;
                    ``(B) is a director or officer of the business; or
                    ``(C) otherwise participates in the conduct of the 
                affairs of the business.
            ``(3) The name and address of any depository institution at 
        which the business maintains a transaction account (as defined 
        in section 19(b)(1)(C) of the Federal Reserve Act).
            ``(4) An estimate of the volume of business to be reported 
        annually.
            ``(5) Such other information as the Secretary of the 
        Treasury may require.
    ``(c) Agents of Money Transmitting Businesses.--
            ``(1) Maintenance of lists of agents of money transmitting 
        businesses.--Pursuant to regulations which the Secretary of the 
        Treasury shall prescribe, each money transmitting business 
        shall--
                    ``(A) maintain a list containing the names and 
                addresses of all persons authorized to act as an agent 
                for such business in connection with activities 
                described in subsection (d)(1)(A) and such other 
                information about such agents as the Secretary may 
                require; and
                    ``(B) make the list and other information available 
                on request to any appropriate law enforcement agency.
            ``(2) Treatment of agent as money transmitting business.--
        The Secretary of the Treasury shall prescribe regulations 
        establishing, on the basis of such criteria as the Secretary 
        determines to be appropriate, a threshold point for treating an 
        agent of a money transmitting business as a money transmitting 
        business for purposes of this section.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Money transmitting business.--The term `money 
        transmitting business' means any business other than the United 
        States Postal Service which--
                    ``(A) provides check cashing, currency exchange, or 
                money transmitting or remittance services, or issues or 
                redeems money orders, travelers' checks, and other 
                similar instruments;
                    ``(B) is required to file reports under section 
                5313; and
                    ``(C) is not a depository institution (as defined 
                in section 19(b)(1)(A) of the Federal Reserve Act).
            ``(2) Money transmitting service.--The term `money 
        transmitting service' includes accepting currency or funds 
        denominated in the currency of any country and transmitting the 
        currency or funds, or the value of the currency or funds, by 
        any means through a financial agency or institution, a Federal 
        reserve bank or other facility of the Board of Governors of the 
        Federal Reserve System, or an electronic funds transfer 
        network.
    ``(e) Civil Penalty for Failure To Comply With Registration 
Requirements.--
            ``(1) In general.--Any person who fails to comply with the 
        money transmitting business registration requirements under 
        subsection (a) or regulations prescribed under such subsection 
        shall be liable to the United States for a civil penalty of 
        $5,000 for each such violation.
            ``(2) Continuing violation.--Each day a violation described 
        in paragraph (1) continues shall constitute a separate 
        violation for purposes of such paragraph.
            ``(3) Assessments.--Any penalty imposed under this 
        subsection shall be assessed and collected by the Secretary of 
        the Treasury in the manner provided in section 5321 and any 
        such assessment shall be subject to the provisions of such 
        section.''.
    (c) Criminal Penalty for Failure To Comply With Registration 
Requirements.--Section 1960(b)(1) of title 18, United States Code, is 
amended to read as follows:
            ``(1) the term `illegal money transmitting business' means 
        a money transmitting business which affects interstate or 
        foreign commerce in any manner or degree and--
                    ``(A) is intentionally operated without an 
                appropriate money transmitting license in a State where 
                such operation is punishable as a misdemeanor or a 
                felony under State law; or
                    ``(B) fails to comply with the money transmitting 
                business registration requirements under section 5329 
                of title 31, United States Code, or regulations 
                prescribed under such section;''.
    (d) Civil Forfeiture.--Section 981(a)(1)(A) of title 18, United 
States Code, is amended by striking ``or of section 1956 or 1957 of 
this title,'' and inserting ``, of section 1956, 1957, or 1960 of this 
title,''.
    (e) Clerical Amendment.--The table of sections for chapter 53 of 
title 31, United States Code, is amended by inserting after the item 
relating to section 5328 the following new item:

``5329. Registration of money transmitting businesses.''.

SEC. 409. CRIMINAL AND CIVIL PENALTY FOR STRUCTURING DOMESTIC AND 
              INTERNATIONAL TRANSACTIONS.

    (a) Criminal Penalty.--Section 5324 of title 31, United States 
Code, is amended by adding at the end the following new subsection:
    ``(c) Criminal Penalty.--
            ``(1) In general.--Whoever violates this section shall be 
        fined in accordance with title 18, United States Code, 
        imprisoned for not more than 5 years, or both.
            ``(2) Enhanced penalty for aggravated cases.--Whoever 
        violates this section while violating another law of the United 
        States or as part of a pattern of any illegal activity 
        involving more than $100,000 in a 12-month period shall be 
        fined twice the amount provided in subsection (b)(3) or (c)(3) 
        (as the case may be) of section 3571 of title 18, United States 
        Code, imprisoned for not more than 10 years, or both.''.
    (b) Amendment Relating to Civil Penalty.--Section 5321(a)(4)(A) of 
title 31, United States Code, is amended by striking ``willfully''.
    (c) Technical and Conforming Amendment.--Subsections (a) and (b) of 
section 5322 of title 31, United States Code, are amended by inserting 
``or 5324'' after ``section 5315'' each place such term appears.

SEC. 410. GAO STUDY OF CASHIERS' CHECKS.

    (a) Study Required.--The Comptroller General of the United States 
shall conduct a study to determine--
            (1) the extent to which the practice of issuing of 
        cashiers' checks by financial institutions is vulnerable to 
        money laundering schemes;
            (2) the extent to which additional recordkeeping 
        requirements should be imposed on financial institutions which 
        issue cashiers' checks; and
            (3) such other factors relating to the use and regulation 
        of cashiers' checks as the Comptroller General determines to be 
        appropriate.
    (b) Report Required.--Before the end of the 180-day period 
beginning on the date of enactment of this Act, the Comptroller General 
shall submit a report to the Congress containing--
            (1) the findings and conclusions in connection with the 
        study conducted pursuant to subsection (a); and
            (2) such recommendations for legislative and administrative 
        action as the Comptroller General may determine to be 
        appropriate.

               TITLE V--FAIR TRADE IN FINANCIAL SERVICES

SEC. 501. SHORT TITLE.

    This title may be cited as the ``Fair Trade in Financial Services 
Act of 1994''.

SEC. 502. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT FOR BANKING 
              ORGANIZATIONS.

    The International Banking Act of 1978 (12 U.S.C. 3101 et seq.) is 
amended by adding at the end the following new section:

``SEC. 18. NATIONAL TREATMENT.

    ``(a) Purpose.--The purpose of this section is to encourage foreign 
countries to accord national treatment to United States banking 
organizations that operate or seek to operate in those countries.
    ``(b) Identifying Countries That Deny National Treatment to United 
States Banks or Bank Holding Companies.--The Secretary shall identify 
the extent to which foreign countries deny national treatment to United 
States banking organizations--
            ``(1) according to the most recent report under section 
        3602 of the Omnibus Trade and Competitiveness Act of 1988 (or 
        update thereof); or
            ``(2) based on more recent information that the Secretary 
        deems appropriate.
    ``(c) Determining Whether Denial of National Treatment Has 
Significant Adverse Effect.--
            ``(1) In general.--The Secretary shall determine whether 
        the denial of national treatment to United States banking 
        organizations by a foreign country identified under subsection 
        (b) has a significant adverse effect on such organizations.
            ``(2) Factors to be considered.--In determining whether and 
        to what extent a foreign country denies national treatment to 
        United States banking organizations, and in determining the 
        effect of any such denial on such banking organizations, the 
        Secretary shall consider appropriate factors, including--
                    ``(A) the size of the foreign country's markets for 
                the financial services involved, and the extent to 
                which United States banking organizations operate or 
                seek to operate in those markets;
                    ``(B) the extent to which United States banking 
                organizations may participate in developing 
                regulations, guidelines, or other policies regarding 
                new products, services, and markets in the foreign 
                country;
                    ``(C) the extent to which the foreign country 
                issues written regulations, guidelines, or other 
                policies applicable to United States banking 
                organizations operating or seeking to operate in the 
                foreign country that are--
                            ``(i) prescribed after adequate notice and 
                        opportunity for comment;
                            ``(ii) readily available to the public; and
                            ``(iii) prescribed in accordance with 
                        objective standards that effectively prevent 
                        arbitrary and capricious determinations;
                    ``(D) the extent to which United States banking 
                organizations may offer foreign exchange services in 
                the foreign country; and
                    ``(E) the effects of the regulatory policies of the 
                foreign country on--
                            ``(i) the lending policies of the central 
                        bank of that country;
                            ``(ii) capital requirements applicable in 
                        that country;
                            ``(iii) the regulation of deposit interest 
                        rates by that country;
                            ``(iv) restrictions on the operation and 
                        establishment of branches in that country; and
                            ``(v) restrictions on access to automated 
                        teller machine networks in that country.
    ``(d) Publication of Determination.--
            ``(1) In general.--If the Secretary determines under 
        subsection (c) that the denial of national treatment to United 
        States banking organizations by a foreign country has a 
        significant adverse effect on such organizations, the 
        Secretary--
                    ``(A) may, after initiating negotiations in 
                accordance with subsection (g), and after consultation 
                in accordance with subsection (i), publish that 
                determination in the Federal Register;
                    ``(B) shall, not less frequently than annually, in 
                consultation with any department or agency that the 
                Secretary deems appropriate, review each such 
                determination to determine whether it should be 
                rescinded; and
                    ``(C) shall inform State bank supervisors of the 
                publication of that determination.
            ``(2) Exception for countries that are parties to certain 
        agreements governing financial services.--Paragraph (1) shall 
        not apply to a foreign country to the extent that any authority 
        under that paragraph would permit action to be taken that would 
        be inconsistent with a bilateral or multilateral agreement 
        (including any dispute resolution procedures contained in such 
        agreement) that governs financial services that--
                    (A) the President entered into with that country; 
                and
                    (B) the Senate and House of Representatives 
                approved;
        before the date of enactment of this section.
    ``(e) Sanctions.--
            ``(1) Action by secretary of treasury.--
                    ``(A) In general.--The Secretary may, after 
                consultation in accordance with subsection (i), 
                recommend to the appropriate Federal banking agency 
                that such agency deny or suspend consideration of a 
                request for authorization filed after the date of 
                publication of a determination under subsection (d)(1) 
                by a person of a foreign country listed in such 
                publication if the Secretary determines that--
                            ``(i) such action would assist the United 
                        States in negotiations to eliminate 
                        discrimination against United States banking 
                        organizations;
                            ``(ii) negotiations undertaken pursuant to 
                        subsection (g) are not likely to result in an 
                        agreement that eliminates the denial of 
                        national treatment; or
                            ``(iii) the country has not adequately 
                        adhered to an agreement reached as a result of 
                        negotiations undertaken pursuant to subsection 
                        (g).
                    ``(B) Exercise of authority.--The authority of 
                subparagraph (A) shall be exercised according to the 
                specific direction (if any) of the President.
                    ``(C) Compliance exceptions.--The appropriate 
                Federal banking agency shall comply with the 
                recommendation of the Secretary made under subparagraph 
                (A), unless the agency determines, in writing, and 
                transmits such determination to the Secretary and to 
                the Congress, that such recommendation--
                            ``(i) would likely result in a serious 
                        impairment to the safe and sound operation of 
                        the United States banking system; or
                            ``(ii) would compromise the ability of a 
                        Federal banking agency to resolve a failing or 
                        failed financial institution because a foreign 
                        banking institution otherwise barred by an 
                        action under subparagraph (A) represents the 
                        only bona fide reasonable offer available to 
                        the Federal banking agency.
            ``(2) No affect on certain agreements.--The exercise of 
        authority under this subsection does not affect any obligation 
        of the United States to pursue dispute resolution procedures 
        pursuant to any international agreement governing financial 
        services, approved by the House of Representatives and the 
        Senate, with respect to a dispute arising out of any obligation 
        under that agreement.
    ``(f) Exemptions From Sanctions.--
            ``(1) In general.--Subsection (e) does not apply to the 
        subsidiaries in the United States of a person of a foreign 
        country if the Secretary determines that the banking laws and 
        regulations of the foreign country, as actually applied, meet 
        or exceed--
                    ``(A) the standards for treatment of subsidiaries 
                of United States banking organizations contained in the 
                Second Banking Directive, and in any amendment to the 
                Second Banking Directive, if the Secretary determines 
                that such amendment--
                            ``(i) does not restrict any operation, 
                        activity, or authority to expand any operation 
                        or activity, permitted under those standards, 
                        of any subsidiary in the foreign country of any 
                        such bank or bank holding company; or
                            ``(ii) is in accordance with national 
                        treatment of subsidiaries of such banking 
                        organizations; or
                    ``(B) any set of standards that, taken as a whole, 
                is no less favorable to United States banking 
                organizations than the standards referred to in 
                subparagraph (A).
            ``(2) Standards for exercise of discretion.--In exercising 
        any discretion under this subsection, the Secretary shall 
        consider, with respect to a bank, foreign bank, branch, agency, 
        commercial lending company, or other affiliated entity that is 
        a person of a foreign country and that is operating in the 
        United States--
                    ``(A) the extent to which the foreign country is 
                progressing toward according national treatment to 
                United States banking organizations; and
                    ``(B) whether the foreign country permits United 
                States banking organizations to expand their activities 
                in that country, even if that country determined that 
                the United States did not accord national treatment to 
                the banking organizations of that country.
    ``(g) Negotiations.--
            ``(1) In general.--The Secretary--
                    ``(A) shall initiate negotiations with any foreign 
                country with respect to which a determination made 
                under subsection (c)(1) is in effect; and
                    ``(B) may initiate negotiations with any foreign 
                country which denies national treatment to United 
                States banking organizations to ensure that the foreign 
                country accords national treatment to such 
                organizations.
            ``(2) Exceptions.--Paragraph (1) does not require the 
        Secretary to initiate negotiations with a foreign country if 
        the Secretary--
                    ``(A) determines that the negotiations--
                            ``(i) would be so unlikely to result in 
                        progress toward according national treatment to 
                        United States banking organizations as to be a 
                        waste of effort; or
                            ``(ii) would impair the economic interests 
                        of the United States; and
                    ``(B) gives written notice of that determination to 
                the chairperson and the ranking minority member of the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate and of the Committee on Banking, Finance and 
                Urban Affairs of the House of Representatives.
    ``(h) Report.--
            ``(1) Contents of report.--Not later than December 1, 1994, 
        and biennially thereafter, the Secretary shall submit to the 
        Congress a report that--
                    ``(A) specifies the foreign countries identified 
                under subsection (b);
                    ``(B) if a determination is published under 
                subsection (d)(1) with respect to the foreign country, 
                provides the reasons therefor;
                    ``(C) if the Secretary has not made or has 
                rescinded such a determination with respect to the 
                foreign country, provides the reasons therefor;
                    ``(D) describes the results of any negotiations 
                conducted under subsection (g)(1) with the foreign 
                country; and
                    ``(E) discusses the effectiveness of this section 
                in achieving the purpose of this section.
            ``(2) Submission of report.--The report required by 
        paragraph (1) may be submitted as part of a report or update 
        submitted under section 3602 of the Omnibus Trade and 
        Competitiveness Act of 1988.
    ``(i) Consultation.--Consultation in accordance with this 
subsection means consultation with the Secretary of State, the 
Secretary of Commerce, the United States Trade Representative, and the 
appropriate Federal banking agency.
    ``(j) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Appropriate federal banking agency.--The term 
        `appropriate Federal banking agency'--
                    ``(A) in the case of a noninsured State bank or 
                branch and a representative office of a foreign bank, 
                means the Board of Governors of the Federal Reserve 
                System; and
                    ``(B) in any other case, has the same meaning as in 
                section 3 of the Federal Deposit Insurance Act.
            ``(2) Banking organization.--The term `banking 
        organization' means--
                    ``(A) a depository institution, as defined in 
                section 3 of the Federal Deposit Insurance Act, 
                including a branch or subsidiary thereof;
                    ``(B) a bank holding company, as defined in section 
                2 of the Bank Holding Company Act of 1956;
                    ``(C) any company required to file information 
                pursuant to section 4(f)(6) of the Bank Holding Company 
                Act of 1956;
                    ``(D) a savings and loan holding company, as 
                defined in section 10(a)(1)(D) of the Home Owners' Loan 
                Act; and
                    ``(E) any nonbank financial entity, the primary 
                purpose of which is to provide credit or financing, 
                regardless of whether such entity accepts deposits.
            ``(3) National treatment.--A foreign country accords 
        `national treatment' to United States banking organizations if 
        it offers them the same competitive opportunities (including 
        effective market access) as are available to its domestic 
        banking organizations in like circumstances.
            ``(4) Person of a foreign country.--The term `person of a 
        foreign country' means--
                    ``(A) a person organized under the laws of the 
                foreign country;
                    ``(B) a person that has its principal place of 
                business in the foreign country;
                    ``(C) an individual who is--
                            ``(i) a citizen of the foreign country, or
                            ``(ii) domiciled in the foreign country; 
                        and
                    ``(D) a person that is directly or indirectly 
                controlled by a person or persons described in 
                subparagraph (A) or (B), or by an individual or 
                individuals described in subparagraph (C).
            ``(5) Request for authorization.--The term `request for 
        authorization'--
                    ``(A) means an application, registration, notice, 
                or other request to commence a financial service or 
                establish a financial services office that is required 
                under title LXII of the Revised Statutes, the 
                International Banking Act of 1978, the Federal Reserve 
                Act, the Home Owners' Loan Act, or the Bank Holding 
                Company Act of 1956; and
                    ``(B) does not include any such request by a 
                company described in section 2(h)(2) of the Bank 
                Holding Company Act of 1956.
            ``(6) Second banking directive.--The term `Second Banking 
        Directive' means the Second Council Directive of December 15, 
        1989, on the Coordination of Laws, Regulations, and 
        Administrative Provisions Relating to the Taking Up and Pursuit 
        of the Business of Credit Institutions and Amending Directive 
        77/780/EEC (89/646/EEC).
            ``(7) Secretary.--The term `Secretary' means the Secretary 
        of the Treasury.''.

SEC. 503. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT FOR 
              SECURITIES ORGANIZATIONS.

    (a) Purpose.--The purpose of this section is to encourage foreign 
countries to accord national treatment to United States securities 
organizations that operate or seek to operate in those countries.
    (b) Identifying Countries That Deny National Treatment to United 
States Securities Organizations.--The Secretary shall identify whether 
and to what extent foreign countries deny national treatment to United 
States securities organizations--
            (1) according to the most recent report under section 3602 
        of the Omnibus Trade and Competitiveness Act of 1988 (or update 
        thereof); or
            (2) based upon more recent information that the Secretary 
        deems appropriate.
    (c) Determining Whether Denial of National Treatment Has 
Significant Adverse Effect.--The Secretary shall determine whether the 
denial of national treatment to United States securities organizations 
by a foreign country identified under subsection (b) has a significant 
adverse effect on such organizations.
    (d) Publication of Determination.--
            (1) In general.--If the Secretary determines under 
        subsection (c) that the denial of national treatment to United 
        States securities organizations by a foreign country has a 
        significant adverse effect on such organizations, the 
        Secretary--
                    (A) may, after initiating negotiations in 
                accordance with subsection (f), and after consultation 
                in accordance with subsection (h), publish that 
                determination in the Federal Register; and
                    (B) shall, not less frequently than annually, in 
                consultation with any department or agency that the 
                Secretary deems appropriate, review each such 
                determination to determine whether it should be 
                rescinded.
            (2) Exception for countries that are parties to certain 
        agreements governing financial services.--Paragraph (1) shall 
        not apply to a foreign country to the extent that any authority 
        under that paragraph would permit action to be taken that would 
        be inconsistent with a bilateral or multilateral agreement 
        (including any dispute resolution procedures contained in such 
        agreement) that governs financial services that--
            (A) the President entered into with that country; and
            (B) the Senate and House of Representatives approved;
before the date of enactment of this section.
    (e) Sanctions.--
            (1) Action by secretary of treasury.--
                    (A) In general.--The Secretary may, after 
                consultation in accordance with subsection (h), 
                recommend to the Commission that the Commission deny or 
                suspend consideration of a request for authorization 
                filed after the date of publication of a determination 
                under subsection (d)(1) by a person of a foreign 
                country listed in such publication if the Secretary 
                determines that--
                            (i) such action would assist the United 
                        States in negotiations to eliminate 
                        discrimination against United States securities 
                        organizations;
                            (ii) negotiations undertaken pursuant to 
                        subsection (f) are not likely to result in an 
                        agreement that eliminates the denial of 
                        national treatment; or
                            (iii) the country has not adequately 
                        adhered to an agreement reached as a result of 
                        negotiations undertaken pursuant to subsection 
                        (f).
                    (B) Exercise of authority.--The authority of 
                subparagraph (A) shall be exercised according to the 
                specific direction (if any) of the President.
                    (C) Commission action.--The Commission shall deny 
                or suspend consideration of a request for authorization 
                in accordance with the recommendation of the Secretary 
                made under subparagraph (A), unless such recommendation 
                would likely result in a serious adverse impact on--
                            (i) the maintenance of fair and orderly 
                        securities markets; or
                            (ii) the protection of investors.
                    (D) Authority upon denial of authorization.--
                            (i) In general.--In connection with the 
                        denial of a request for authorization under 
                        subparagraph (A), the Commission may order--
                                    (I) disposition of any controlling 
                                interest referred to in subsection 
                                (i)(9)(B)(i);
                                    (II) closure of any office referred 
                                to in subsection (i)(9)(B)(ii); or
                                    (III) termination of any advisory 
                                relationship referred to in 
                                subparagraphs (C) and (D) of subsection 
                                (i)(9).
                            (ii) Penalty for noncompliance.--The 
                        Commission may revoke the underlying 
                        registration under Federal securities laws of 
                        any person who fails to comply with an order 
                        issued under clause (i).
            (2) Notice required to file requests for authorization.--
                    (A) In general.--If a determination is published 
                under subsection (d)(1) with respect to a foreign 
                country, no person of that foreign country may file a 
                request for authorization unless such person files 
                notice of such request simultaneously with the 
                Commission and the Secretary, not less than 90 days in 
                advance of the action that is the subject of the 
                request, in such form and containing such information 
                as the Commission may prescribe by rule.
                    (B) Notifying secretary.--The Commission shall 
                promptly notify the Secretary of any notice received 
                under subparagraph (A).
                    (C) Extending 90-day period.--The Commission may, 
                by order, extend for an additional 180 days the period 
                during which the Commission may consider a notice 
                received under subparagraph (A).
            (3) Standards for exercise of discretion.--In exercising 
        any discretion under this subsection, the Secretary shall 
        consider, with respect to a securities organization that is 
        controlled, directly or indirectly, by a person of a foreign 
        country--
                    (A) the extent to which the foreign country is 
                progressing toward according national treatment to 
                United States securities organizations; and
                    (B) whether the foreign country permits United 
                States securities organizations to expand their 
                activities in that country, even if that country 
                determined that the United States did not accord 
                national treatment to securities organizations of that 
                country.
    (f) Negotiations.--
            (1) In general.--The Secretary--
                    (A) shall initiate negotiations with any foreign 
                country with respect to which a determination under 
                subsection (c)(1) is in effect; and
                    (B) may initiate negotiations with any foreign 
                country which denies national treatment to United 
                States securities organizations to ensure that the 
                foreign country accords national treatment to such 
                organizations.
            (2) Exceptions.--Paragraph (1) does not require the 
        Secretary to initiate negotiations with a foreign country if 
        the Secretary--
                    (A) determines that the negotiations--
                            (i) would be so unlikely to result in 
                        progress toward according national treatment to 
                        United States securities organizations as to be 
                        a waste of effort; or
                            (ii) would impair the economic interests of 
                        the United States; and
                    (B) gives written notice of that determination to 
                the chairperson and the ranking minority member of the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate and of the Committee of Energy and Commerce of 
                the House of Representatives.
    (g) Report.--
            (1) Contents of report.--Not later than December 1, 1994, 
        and biennially thereafter, the Secretary shall submit to the 
        Congress a report that--
                    (A) specifies the foreign countries identified 
                under subsection (b);
                    (B) if a determination is published under 
                subsection (d)(1) with respect to the foreign country, 
                provides the reasons therefor;
                    (C) if the Secretary has not made, or has 
                rescinded, a determination under subsection (d)(1) with 
                respect to the foreign country, provides the reasons 
                therefor;
                    (D) describes the results of any negotiations 
                conducted under subsection (f)(1) with the foreign 
                country; and
                    (E) discusses the effectiveness of this section in 
                achieving the purpose of this section.
            (2) Submission of report.--The report required by paragraph 
        (1) may be submitted as part of a report or update submitted 
        under section 3602 of the Omnibus Trade and Competitiveness Act 
        of 1988.
    (h) Consultation.--Consultation in accordance with this subsection 
means consultation with the Secretary of State, the Secretary of 
Commerce, the United States Trade Representative, and the Commission.
    (i) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Broker.--The term ``broker'' has the same meaning as in 
        section 3(a)(4) of the Securities Exchange Act of 1934.
            (2) Commission.--The term ``Commission'' means the 
        Securities and Exchange Commission.
            (3) Control.--The terms ``directly or indirectly controlled 
        by'' and ``controlled, directly or indirectly'' shall have the 
        meanings given to such terms in rules or regulations issued by 
        the Secretary of the Treasury, not later than 6 months after 
        the date of enactment of this Act, after consultation with the 
        Commission.
            (4) Dealer.--The term ``dealer'' has the same meaning as in 
        section 3(a)(5) of the Securities Exchange Act of 1934.
            (5) Investment adviser.--The term ``investment adviser'' 
        has the same meaning as in section 202(a)(11) of the Investment 
        Advisers Act of 1940.
            (6) Investment company.--The term ``investment company'' 
        has the same meaning as in section 3 of the Investment Company 
        Act of 1940.
            (7) National treatment.--A foreign country accords 
        ``national treatment'' to United States securities 
        organizations if it offers them the same competitive 
        opportunities (including effective market access) as are 
        available to its domestic securities organizations in like 
        circumstances.
            (8) Person of a foreign country.--The term ``person of a 
        foreign country'' means--
                    (A) a person organized under the laws of the 
                foreign country;
                    (B) a person that has its principal place of 
                business in the foreign country;
                    (C) an individual who is--
                            (i) a citizen of the foreign country; or
                            (ii) domiciled in the foreign country;
                    (D) a person that is directly or indirectly 
                controlled by one or more persons described in 
                subparagraph (A), (B), or (C); and
                    (E) an investment company, an investment adviser of 
                which is a person described in any of subparagraphs (A) 
                through (D).
            (9) Request for authorization.--The term ``request for 
        authorization'' means--
                    (A) an application to register under section 15(b), 
                15B, or 15C of the Securities Exchange Act of 1934, or 
                section 203(c) of the Investment Advisers Act of 1940, 
                including an application to succeed to the business of 
                a registered entity;
                    (B) an amendment to a registration statement 
                referred to in subparagraph (A) that reflects--
                            (i) the acquisition of control of the 
                        registered entity; or
                            (ii) the addition of a United States office 
                        by the registered entity;
                    (C) a registration statement filed by an investment 
                company under section 8(b) of the Investment Company 
                Act of 1940, if a person of a foreign country will 
                serve as an investment adviser to the investment 
                company; and
                    (D) an amendment to an investment company 
                registration statement filed under section 8(b) of the 
                Investment Company Act of 1940 that reflects the 
                retention of a person of a foreign country as an 
                investment adviser.
            (10) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (11) Securities organization.--The term ``securities 
        organization'' means a broker, a dealer, an investment company, 
        or an investment adviser.

SEC. 504. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT FOR INSURERS 
              AND REINSURERS.

    (a) Purpose.--The purpose of this section is to encourage foreign 
countries to accord national treatment to United States insurers and 
reinsurers that operate or seek to operate in those countries.
    (b) Identifying Countries That Deny National Treatment To United 
States Insurers or Reinsurers.--The President or the President's 
designee shall identify whether and to what extent foreign countries 
deny national treatment to United States insurers or reinsurers--
            (1) according to the most recent report under section 3602 
        of the Omnibus Trade and Competitiveness Act of 1988 (or update 
        thereof); or
            (2) based on more recent information that the President 
        deems appropriate.
    (c) Determining Whether Denial of National Treatment Has 
Significant Adverse Effect.--
            (1) In General.--The President shall determine whether the 
        denial of national treatment to United States insurers or 
        reinsurers by a foreign country identified under subsection (b) 
        has a significant adverse effect on such organizations.
            (2) Factors To Be Considered.--In determining whether and 
        to what extent a foreign country denies national treatment to 
        United States insurers or reinsurers, and in determining the 
        effect of any such denial on such insurers or reinsurers, the 
        President shall consider appropriate factors, including--
                    (A) the size of the foreign country's markets for 
                the financial services involved, and the extent to 
                which United States insurers or reinsurers operate or 
                seek to operate in those markets;
                    (B) the extent to which United States insurers or 
                reinsurers may participate in developing regulations, 
                guidelines, or other policies regarding new products, 
                services, and markets in the foreign country;
                    (C) the extent to which the foreign country issues 
                written regulations, guidelines, or other policies 
                applicable to United States insurers or reinsurers 
                operating or seeking to operate in the foreign country 
                that are--
                            (i) prescribed after adequate notice and 
                        opportunity for comment;
                            (ii) readily available to the public; and
                            (iii) prescribed in accordance with 
                        objective standards that effectively prevent 
                        arbitrary and capricious determinations;
                    (D) the effects of the regulatory policies of the 
                foreign country on--
                            (i) the licensing policies of the insurance 
                        regulator of that country;
                            (ii) capital requirements applicable in 
                        that country;
                            (iii) restrictions on acquisitions or joint 
                        ventures and operations thereof by insurers or 
                        reinsurers in that country; and
                            (iv) restrictions on the operation and 
                        establishment of branches in that country.
    (d) Publication of Determination.--
            (1) In General.--If the President determines under 
        subsection (c) that the denial of national treatment to United 
        States insurers or reinsurers by a foreign country has a 
        significant adverse effect on such organizations, the 
        President--
                    (A) may, after initiating negotiations in 
                accordance with subsection (f) publish that 
                determination in the Federal Register;
                    (B) shall, not less frequently than annually, in 
                consultation with any department or agency that the 
                President deems appropriate, review each such 
                determination to determine whether it should be 
                rescinded; and
                    (C) shall inform State insurance commissioners of 
                the publication of that determination.
            (2) Exception for Countries That Are Parties To Certain 
        Agreements Governing Financial Services.--Paragraph (1) shall 
        not apply to a foreign country to the extent that any authority 
        under that paragraph would permit action to be taken that would 
        be inconsistent with a bilateral or multilateral agreement 
        including any dispute resolution procedures contained in such 
        agreement that governs financial services, including insurance, 
        that--
                    (A) the President entered into with that country; 
                and
                    (B) the Senate and the House of Representatives 
                approved;
        before the date of enactment of this section.
    (e) Sanctions.--
            (1) Actions by the President.--
                    (A) In General.--The President may recommend to the 
                State insurance commissioners that they deny a foreign 
                insurer's or reinsurer's request for authorization 
                which is filed after the date of publication of a 
                determination under subsection (d)(1) by a person of a 
                foreign country listed in such publication if the 
                President determines that--
                            (i) such action would assist the United 
                        States in negotiations to eliminate 
                        discrimination against United States insurers 
                        or reinsurers;
                            (ii) negotiations undertaken pursuant to 
                        subsection (f) are not likely to result in an 
                        agreement that eliminates the denial of 
                        national treatment; or
                            (iii) the country has not adequately 
                        adhered to an agreement reached as a result of 
                        negotiations undertaken pursuant to subsection 
                        (f).
                    (B) Exercise of Authority.--If the President 
                delegates his authority under section 504(b), the 
                designee's authority under subparagraph (A) shall be 
                exercised according to the specific direction (if any) 
                of the President.
                    (C) Compliance Exceptions.--If the State insurance 
                commissioners do not act within 90 days on the 
                President's recommendations in subsection (A), or if 
                the President determines that the procedure outlined in 
                subsection (A) is either inappropriate or impractical 
                to achieve the purpose of this section, the President 
                may take such action as he or she considers necessary 
                and appropriate to encourage foreign countries to 
                accord national treatment to United States insurers and 
                reinsurers that operate or seek to operate in those 
                countries.
            (2) Standards for Exercise of Discretion.--In exercising 
        any discretion under subsection (e), the President shall 
        consider, with respect to an insurer or reinsurer, branch, or 
        other affiliated entity that is a person of a foreign country 
        and is operating in the United States--
                    (A) the extent to which the foreign country is 
                progressing toward according national treatment to 
                United States insurers or reinsurers; and
                    (B) whether the foreign country permits United 
                States insurers or reinsurers to expand their 
                activities in that country, even if that country 
                determined that the United States did not accord 
                national treatment to the insurers or reinsurers of 
                that country.
    (f) Negotiations.--
            (1) In General.--The President--
                    (A) shall initiate negotiations with any foreign 
                country with respect to which a determination made 
                under subsection (c)(1) is in effect; and
                    (B) may initiate negotiations with any foreign 
                country which denies national treatment to United 
                States insurers or reinsurers to ensure that the 
                foreign country accords national treatment to such 
                insurers or reinsurers.
            (2) Exceptions.--Paragraph (1) does not require the 
        President to initiate negotiations with a foreign country if 
        the President--
                    (A) determines that the negotiations--
                            (i) would be so unlikely to result in 
                        progress toward according national treatment to 
                        United States insurers or reinsurers as to be a 
                        waste of effort; or
                            (ii) would impair the economic interests of 
                        the United States; and
                    (B) gives written notice of that determination to 
                the chairperson and the ranking minority member of the 
                appropriate Senate and House committees.
    (g) Report.--
            (1) Contents of report.--Not later than December 1, 1994, 
        and biennially thereafter, the President shall submit to the 
        Congress a report that--
                    (A) specifies the foreign countries identified 
                under subsection (b);
                    (B) if a determination is published under 
                subsection (d)(1) with respect to the foreign country, 
                provides the reasons therefor;
                    (C) if the President has not made or has rescinded 
                such a determination with respect to the foreign 
                country, provides the reasons therefor;
                    (D) describes the results of any negotiations 
                conducted under subsection (g)(1) with the foreign 
                country; and
                    (E) discusses the effectiveness of this section in 
                achieving the purpose of this section.
            (2) Submission of report.--The report required by paragraph 
        (1) may be submitted as part of a report or update submitted 
        under section 3602 of the Omnibus Trade and Competitiveness Act 
        of 1988.
    (h) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Insurer.--The term ``insurer'' means a party to a 
        contract of insurance who assumes the risk and undertakes to 
        indemnify the insured, or pay a certain sum on the happening of 
        a specified contingency.
            (2) National treatment.--A foreign country accords 
        ``national treatment'' to United States insurers and reinsurers 
        if it offers them the same competitive opportunities (including 
        effective market access) as are available to its domestic 
        insurers or reinsurers.
            (3) Person of a foreign country.--The term ``person of a 
        foreign country'' means--
                    (A) a person organized under the laws of the 
                foreign country;
                    (B) a person that has its principal place of 
                business in the foreign country;
                    (C) an individual who is--
                            (i) a citizen of the foreign country, or
                            (ii) domiciled in the foreign country; and
                    (D) a person that is directly or indirectly 
                controlled by a person or persons described in 
                subparagraph (A) or (B), or by an individual or 
                individuals described in subparagraph (C).
            (4) President.--The term ``President'' means the President 
        of the United States or the President's designee.
            (5) Reinsurer.--The term ``reinsurer'' means an insurer 
        which contracts to indemnify a ceding insurer for all or part 
        of a risk originally undertaken by the ceding insurer.
            (6) Request for authorization.--The term ``request for 
        authorization'' means--
                    (A) an application, registration, notice, or other 
                request to commence engaging in the business of 
                insurance in a State; or
                    (B) an application, registration, notice, or other 
                request for renewal of authorization to engage in the 
                business of insurance in a State.

SEC. 505. FINANCIAL INTERDEPENDENCE STUDY.

    Subtitle G of title III of the Omnibus Trade and Competitiveness 
Act of 1988 (22 U.S.C. 5351 et seq.) is amended by adding at the end 
the following new section:

``SEC. 3605. FINANCIAL INTERDEPENDENCE STUDY.

    ``(a) Investigation Required.--The Secretary, in consultation and 
coordination with the Securities and Exchange Commission, the Federal 
banking agencies, and any other appropriate Federal department or 
agency designated by the Secretary, shall conduct an investigation to 
determine--
            ``(1) the extent of the interdependence of the financial 
        services sectors of the United States and foreign countries--
                    ``(A) whose financial services institutions provide 
                financial services in the United States; or
                    ``(B) whose persons have substantial ownership 
                interests in United States financial services 
                institutions; and
            ``(2) the economic, strategic, and other consequences of 
        that interdependence for the United States.
    ``(b) Report.--
            ``(1) Report required.--Not later than 3 years after the 
        date of enactment of this section, the Secretary shall submit a 
        report on the results of the investigation under subsection (a) 
        to the President, the Congress, the Securities and Exchange 
        Commission, the Federal banking agencies, and any other 
        appropriate Federal agency or department, as designated by the 
        Secretary.
            ``(2) Contents of report.--The report required under 
        paragraph (1) shall--
                    ``(A) describe the activities and estimate the 
                scope of financial services activities conducted by 
                United States financial services institutions in 
                foreign markets (differentiated according to major 
                foreign markets);
                    ``(B) describe the activities and estimate the 
                scope of financial services activities conducted by 
                foreign financial services institutions in the United 
                States (differentiated according to the most 
                significant home countries or groups of home 
                countries);
                    ``(C) estimate the number of jobs created in the 
                United States by financial services activities 
                conducted by foreign financial services institutions 
                and the number of jobs created in foreign countries by 
                financial service activities conducted by United States 
                financial services institutions;
                    ``(D) estimate the additional jobs and revenues 
                (both foreign and domestic) that would be created by 
                the activities of United States financial services 
                institutions in foreign countries if those countries 
                offered such institutions the same competitive 
                opportunities (including effective market access) as 
                are available to the domestic financial services 
                institutions of those countries;
                    ``(E) describe the extent to which foreign 
                financial services institutions discriminate against 
                United States persons in procurement, employment, the 
                provision of credit or other financial services, or 
                otherwise;
                    ``(F) describe the extent to which foreign 
                financial services institutions and other persons from 
                foreign countries purchase or otherwise facilitate the 
                marketing from the United States of government and 
                private debt instruments and private equity 
                instruments;
                    ``(G) describe how the interdependence of the 
                financial services sectors of the United States and 
                foreign countries affects the autonomy and 
                effectiveness of United States monetary policy;
                    ``(H) describe the extent to which United States 
                companies rely on financing by or through foreign 
                financial services institutions and the consequences of 
                such reliance (including disclosure of proprietary 
                information) for the industrial competitiveness and 
                national security of the United States;
                    ``(I) describe the extent to which foreign 
                financial services institutions, in purchasing high 
                technology products such as computers and 
                telecommunications equipment, favor manufacturers from 
                their home countries over United States manufacturers; 
                and
                    ``(J) contain other appropriate information 
                relating to the results of the investigation required 
                by subsection (a).
    ``(c) Definitions.--For purposes of this section the following 
definitions shall apply:
            ``(1) Depository institution and depository institution 
        holding company.--The terms `depository institution' and 
        `depository institution holding company' have the same meanings 
        as in section 3 of the Federal Deposit Insurance Act.
            ``(2) Federal banking agencies.--The term `Federal banking 
        agencies' has the same meaning as in section 3 of the Federal 
        Deposit Insurance Act.
            ``(3) Financial services institution.--The term `financial 
        services institution' means--
                    ``(A) a broker, dealer, underwriter, clearing 
                agency, transfer agent, or information processor with 
                respect to securities, including government and 
                municipal securities;
                    ``(B) an investment company, investment manager, 
                investment adviser, indenture trustee, or any 
                depository institution, insurance company, or other 
                organization operating as a fiduciary, trustee, 
                underwriter, or other financial services provider;
                    ``(C) any depository institution or depository 
                institution holding company; and
                    ``(D) any other entity providing financial 
                services.
            ``(4) Secretary.--The term `Secretary' means the Secretary 
        of the Treasury.''.

SEC. 506. FEDERAL RESERVE REPORT ON THE FOREIGN BANK SUPERVISION 
              ENHANCEMENT ACT OF 1991.

    The Federal Reserve shall submit to the House and Senate Banking 
Committees within 60 days of enactment of this legislation a report on 
the Foreign Bank Supervision Enhancement Act of 1991 including:
            (a) the number of applicants received and from what 
        countries;
            (b) the number of applications approved and from what 
        countries;
            (c) the amount of time taken on each application between 
        receipt and approval or rejection of the application;
            (d) other agencies involved in the approval process, how 
        much time is taken by those agencies, and any problems 
        encountered with these agencies;
            (e) coordination of processing applications and length of 
        time for processing between the regional bank's and the Federal 
        Reserve Board's staffs;
            (f) efforts to define consolidated home country supervision 
        on an international basis, and
            (g) suggestions for streamlining the process.

SEC. 507. CONFORMING AMENDMENTS.

    (a) Reports on Foreign Treatment of United States Financial 
Institutions.--Section 3602 of the Omnibus Trade and Competitiveness 
Act of 1988 (22 U.S.C. 5352) is amended--
            (1) in the first sentence, by inserting ``with updates on 
        significant developments every 2 years following submission of 
        the 1994 report,'' before ``the Secretary of the Treasury''; 
        and
            (2) by adding at the end the following: ``For purposes of 
        this section, a foreign country denies national treatment to 
        United States entities unless the foreign country offers such 
        entities the same competitive opportunities (including 
        effective market access) as are available to the domestic 
        entities of the foreign country.''.
    (b) Negotiations To Promote Fair Trade in Financial Services.--
Section 3603(a)(1) of the Omnibus Trade and Competitiveness Act of 1988 
(22 U.S.C. 5353(a)(1)) is amended by inserting ``effective'' before 
``access''.
    (c) Primary Dealers in Government Debt Instruments.--Section 
3502(b)(1) of the Omnibus Trade and Competitiveness Act of 1988 (22 
U.S.C. 5342(b)(1)) is amended--
            (1) by striking ``does not accord to'' and inserting ``does 
        not offer''; and
            (2) by striking ``as such country accords to'' and 
        inserting ``(including effective market access) as are 
        available to''.
    (d) Conforming Amendments to the Securities Exchange Act of 1934.--
            (1) Section 15.--Section 15(b)(1) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78o(b)(1)) is amended by adding 
        at the end the following: ``The Commission may suspend 
        consideration, deny registration, issue an order, or revoke 
        registration, as provided in section 403(e)(1) of the Fair 
        Trade in Financial Services Act of 1994.''.
            (2) Section 15b.--Section 15B(a)(2) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78o-4(a)(2)) is amended by 
        adding at the end the following: ``The Commission may suspend 
        consideration, deny registration, issue an order, or revoke 
        registration, as provided in section 403(e)(1) of the Fair 
        Trade in Financial Services Act of 1994.''.
            (3) Section 15c.--Section 15C(a)(2) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78o-5(a)(2)) is amended by 
        adding at the end the following: ``The Commission may suspend 
        consideration, deny registration, issue an order, or revoke 
        registration, as provided in section 403(e)(1) of the Fair 
        Trade in Financial Services Act of 1994.''.
    (e) Conforming Amendment to the Investment Company Act of 1940.--
Section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8) is 
amended by adding at the end the following new subsection:
    ``(g) The Commission may suspend consideration, deny registration, 
issue an order, or revoke registration, as provided in section 
403(e)(1) of the Fair Trade in Financial Services Act of 1994.''.
    (f) Conforming Amendment to the Investment Advisers Act of 1940.--
Section 203(c)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 
(c)(2)) is amended by adding at the end the following: ``The Commission 
may suspend consideration, deny registration, issue an order, or revoke 
registration, as provided in section 403(e)(1) of the Fair Trade in 
Financial Services Act of 1994.''.

               TITLE VI--NATIONAL FLOOD INSURANCE REFORM

SEC. 601. SHORT TITLE.

    This title may be cited as the ``National Flood Insurance Reform 
Act of 1994''.

SEC. 602. CONGRESSIONAL FINDINGS.

    The Congress finds that--
            (1) the 4 principal objectives of the National Flood 
        Insurance Program are to limit increasing flood control and 
        disaster relief expenditures, to provide a prefunded mechanism 
        to more fully indemnify victims of flood-related disasters, to 
        limit unwise development in floodplains, and to provide 
        affordable Federal flood insurance for structures located in 
        areas of special flood hazards;
            (2) since 1968, the National Flood Insurance Program has 
        reduced the need for taxpayer funded disaster assistance and 
        has been a factor in motivating local government mitigation 
        efforts.
            (3) repetitively damaged properties represent a substantial 
        problem for the National Flood Insurance Program, with over 40 
        percent of all flood insurance claims made on properties that 
        have been damaged more than once;
            (4) the problem of erosion warrants greater analysis;
            (5) reforms in the National Flood Insurance Program are 
        essential to increase participation in the Program, make the 
        Program more actuarially sound, decrease the risk of losses to 
        the United States Treasury, and address the problem of 
        properties repetitively damaged by floods;
            (6) a Federal flood insurance program that combines 
        predisaster mitigation efforts together with an insurance and 
        compliance program will reduce the physical and economic 
        effects of flood-related damage on the Federal Government, 
        State and local governments, and individuals;
            (7) requiring regulated lending institutions, government 
        agencies, and government-sponsored enterprises to make sure 
        that flood insurance coverage is purchased on all properties in 
        areas of special flood hazards in participating communities 
        will increase compliance with the program, and increase the 
        pool of funds, thereby decreasing the impact on the National 
        Flood Insurance Fund of individual flood events;
            (8) incentives in the form of reduced premium rates for 
        flood insurance under the National Flood Insurance Program 
        should be provided in communities that have adopted and 
        enforced exemplary or particularly effective measures for 
        comprehensive floodplain management; and
            (9) these community-based, individual mitigation, and loss 
        prevention methods and incentives should be incorporated into 
        the National Flood Insurance Program.

SEC. 603. DEFINITION.

    As used in this title, the term ``Director'' means the Director of 
the Federal Emergency Management Agency.

                        Subtitle A--Definitions

SEC. 611. FLOOD DISASTER PROTECTION ACT OF 1973.

    (a) In General.--Section 3(a) of the Flood Disaster Protection Act 
of 1973 (42 U.S.C. 4003(a)) is amended--
            (1) by striking paragraph (5) and inserting the following 
        new paragraph:
            ``(5) `Federal entity for lending regulation' means the 
        Board of Governors of the Federal Reserve System, the Federal 
        Deposit Insurance Corporation, the Comptroller of the Currency, 
        the Office of Thrift Supervision, the National Credit Union 
        Administration Board, and the Farm Credit Administration, and 
        with respect to a particular regulated lending institution 
        means the entity primarily responsible for the supervision of 
        the institution;'';
            (2) in paragraph (6), by striking the period at the end and 
        inserting a semicolon; and
            (3) by inserting after paragraph (6) the following new 
        paragraphs:
            ``(7) `regulated lending institution' means a bank, savings 
        association, credit union, farm credit bank, Federal land bank 
        association, production credit association, or similar 
        institution subject to the supervision of a Federal entity for 
        lending regulation;
            ``(8) `Federal agency lender' means the Federal Housing 
        Administration, the Farmers Home Administration, the Small 
        Business Administration, and the Veterans' Administration, when 
        such agency makes loans secured by improved real estate or a 
        manufactured home; and
            ``(9) `servicer' means a person who receives any scheduled 
        periodic payments from a borrower pursuant to the terms of any 
        loan secured by a lien on real property, and who makes the 
        payments of principal and interest and such other payments with 
        respect to the amounts received from the borrower as may be 
        required.''.
    (b) Conforming Amendments.--
            (1) Requirements to purchase flood insurance.--Section 
        102(b) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
        4012a(b)) is amended by striking ``(b) Each Federal 
        instrumentality responsible for the supervision, approval, 
        regulation, or insuring of banks, savings and loan 
        associations, or similar institutions shall by regulation 
        direct such institutions'' and inserting the following:
    ``(b) Flood Insurance Purchase Requirements.--Each Federal entity 
for lending regulation shall by regulation direct regulated lending 
institutions''.
            (2) Effect of nonparticipation in flood insurance 
        program.--Section 202(b) of the Flood Disaster Protection Act 
        of 1973 (42 U.S.C. 4106(b)) is amended by striking ``Federal 
        instrumentality described in such section shall by regulation 
        require the institutions'' and inserting ``Federal entity for 
        lending regulation (with respect to regulated lending 
        institutions)''.

SEC. 612. NATIONAL FLOOD INSURANCE ACT OF 1968.

    (a) In General.--Section 1370(a) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4121(a)) is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) in paragraph (6), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(7) the term `Federal entity for lending regulation' 
        means the Board of Governors of the Federal Reserve System, the 
        Federal Deposit Insurance Corporation, the Comptroller of the 
        Currency, the Office of Thrift Supervision, and the National 
        Credit Union Administration Board, and with respect to a 
        particular regulated lending institution, means the entity 
        primarily responsible for the supervision of the institution;
            ``(8) the term `regulated lending institution' means a 
        bank, savings association, credit union, farm credit bank, 
        Federal land bank association, production credit association, 
        or similar institution subject to the supervision of a Federal 
        entity for lending regulation;
            ``(9) the term `Federal agency lender' means the Federal 
        Housing Administration, the Farmers Home Administration, the 
        Small Business Administration, and the Veterans' 
        Administration, when such agency makes loans secured by 
        improved real estate or a manufactured home;
            ``(10) the term `natural and beneficial floodplain 
        functions' means--
                    ``(A) the functions associated with the natural or 
                relatively undisturbed floodplain that moderate 
                flooding, retain flood waters, reduce erosion and 
                sedimentation, mitigate the effects of waves and storm 
                surge from storms; and
                    ``(B) ancillary beneficial functions, including 
                maintenance of water quality, and recharge of ground 
                water
        that reduce flood related damage;
            ``(11) the term `erosion control measures' means a 
        community's efforts to control erosion through nonstructural 
        and structural projects;
            ``(12) the term `repetitive loss structure' means an 
        insured property that has incurred flood-related damage on 2 
        occasions during a 10-year period ending on the date of the 
        event for which a second claim is made, in which the cost of 
        repair, on the average, equaled or exceeded 25 percent of the 
        value of the structure at the time of each flood event;
            ``(13) the term `cost of compliance with land use and 
        control measures' means--
                    ``(A) the cost of elevating or floodproofing a 
                structure so that the structure is in compliance with 
                the minimum performance standards adopted by the State 
                or community pursuant to section 1315 of the National 
                Flood Insurance Act of 1968, or
                    ``(B) the cost of relocation or demolition of the 
                structure if the Director demonstrates that the 
                structure will collapse or subside as a result of 
                erosion within 30 years based on State erosion data;
            ``(14) the term `servicer' means any person who receives 
        any scheduled periodic payments from a borrower pursuant to the 
        terms of any loan secured by a lien on real property, and who 
        makes the payments of principal and interest and such other 
        payments with respect to the amounts received from the borrower 
        as may be required.''.
    (b) Conforming Amendment.--Section 1322(d) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4029(d)) is amended by striking 
``federally supervised, approved, regulated or insured financial 
institution'' and inserting ``regulated lending institution''.

           Subtitle B--Compliance and Increased Participation

SEC. 621. EXPANDED FLOOD INSURANCE PURCHASE REQUIREMENTS.

    (a) In General.--Section 102(b) of the Flood Disaster Protection 
Act of 1973 (42 U.S.C. 4012a(b)), as amended by section 611(b)(1), is 
amended--
            (1) by striking ``Each Federal entity'' and inserting the 
        following:
            ``(1) In general.--Each Federal entity'';
            (2) by inserting before ``shall by regulation'' the 
        following: ``(after consultation and coordination with the 
        Federal Financial Institutions Examination Council established 
        under the Federal Financial Institutions Examination Council 
        Act of 1974)''; and
            (3) by adding at the end the following new paragraphs:
            ``(2) Procedures implemented by fnma, fhlmc, and famc.--The 
        Federal National Mortgage Association, the Federal Home Loan 
        Mortgage Corporation, and the Federal Agricultural Mortgage 
        Corporation shall implement procedures reasonably designed to 
        assure that each loan that is--
                    ``(A) secured by improved real estate or a 
                manufactured home located in an area that has been 
                identified at the time of the origination of the loan 
                by the Director as an area of special flood hazards and 
                in which flood insurance is available under the 
                National Flood Insurance Act of 1968; and
                    ``(B) purchased by any such entity;
        is covered for the term of the loan by flood insurance in the 
        amount provided in paragraph (1).
            ``(3) Procedures implemented by federal agency lenders.--
        Each Federal agency lender shall implement procedures 
        reasonably designed to assure that all property--
                    ``(A) that secures loans that the Federal agency 
                lender makes, increases, extends, or renews; and
                    ``(B) that is improved by real estate or a 
                manufactured home located in an area that has been 
                identified at the time of the origination of the loan 
                by the Director as an area of special flood hazards and 
                in which flood insurance is available under the 
                National Flood Insurance Act of 1968;
        is covered for the term of the loan by flood insurance in the 
        amount provided in paragraph (1).
            ``(4) Definition.--For purposes of this section property 
        improved by real estate means insurable improvements on that 
        property.''.
    (b) Effective Date.--The provisions of this section shall apply to 
all transactions occurring after the expiration of the 1-year period 
beginning on the date of enactment of this title.

SEC. 622. ESCROW OF FLOOD INSURANCE PAYMENTS.

    (a) In General.--Section 102 of the Flood Disaster Protection Act 
of 1973 (42 U.S.C. 4012a) is amended by adding at the end the following 
new subsection:
    ``(d) Escrow of Flood Insurance Payments.--
            ``(1) By regulated lending institutions.--Each Federal 
        entity for lending regulation, after consultation and 
        coordination with the Federal Financial Institutions 
        Examination Council, shall by regulation require that, if a 
        regulated lending institution requires the escrowing of taxes, 
        insurance premiums, fees, or any other charges for a loan 
        secured by residential real estate or manufactured homes, all 
        charges for flood insurance under this title for the property 
        shall be paid by the borrower to the institution for the 
        duration of the period during which the regulated lending 
        institution maintains an escrow account. Upon receipt of a 
        notice from the Director or the provider of the insurance that 
        insurance premiums, fees, or other charges are due, the 
        institution shall pay from the escrow account to the provider 
        of the insurance the amount of insurance premiums, fees, or 
        other charges owed.
            ``(2) By federal agency lenders.--If a Federal agency 
        lender requires the escrowing of taxes, insurance premiums, 
        fees, or any other charges, then any charges for flood 
        insurance under this title for the residential real estate or 
        the manufactured home shall be paid by the borrower to the 
        Federal agency lender for the duration of the period during 
        which the Federal agency lender maintains an escrow account. 
        Upon receipt of a notice from the Director or the provider of 
        the insurance that insurance premiums, fees, or other charges 
        are due, the Federal agency lender shall pay from the escrow 
        account to the provider of the insurance the amount of 
        insurance premiums, fees or other charges owed.
            ``(3) Applicability of real estate settlement procedures 
        act.--Escrow accounts used to collect flood insurance premiums, 
        fees, or other charges under this subsection shall be subject 
        to the provisions of section 10 of the Real Estate Settlement 
        Procedures Act of 1974.''.
    (b) Applicability.--Section 102(d) of the Flood Disaster Protection 
Act of 1973, as added by subsection (a), shall apply with respect to 
any loan made, increased, extended, or renewed after the expiration of 
the 1-year period beginning on the date of enactment of this title.

SEC. 623. NOTICE REQUIREMENTS.

    Section 1364 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4104a) is amended to read as follows:

``SEC. 1364. NOTICE REQUIREMENTS.

    ``(a) Lending Institutions.--Each Federal entity for lending 
regulation, after consultation and coordination with the Federal 
Financial Institutions Examination Council, shall by regulation require 
that before a regulated lending institution makes, increases, extends, 
or renews a loan secured by improved real estate or a manufactured home 
located in an area that has been identified by the Director as an area 
of special flood hazards, the institution shall notify the borrower of 
the special flood hazards and of the need to purchase and maintain 
flood insurance.
    ``(b) Federal Agency Lenders.--Before a Federal agency lender 
makes, increases, extends, or renews a loan secured by improved real 
estate or a manufactured home located in an area that has been 
identified by the Director as an area of special flood hazards, the 
Federal agency lender shall notify the borrower of the special flood 
hazards and of the need to purchase and maintain flood insurance.
    ``(c) Participating Communities.--The Director shall by regulation 
require each participating community, upon receiving the semiannual 
list prepared by the Director of all revisions to and updates of flood 
insurance rate maps made during the preceding 6 months, to determine 
whether any properties in their community have been affected, and to 
provide annual notice by mail, notice by publication, notice on tax 
assessments, or notice by other reasonable method, to regulated lending 
institutions that are known to lend in the community, and to the owners 
of all properties newly determined to be, or no longer to be, in an 
area of special flood hazards, of the flood insurance purchase 
requirements under section 102(b).
    ``(d) Contents of Notice.--Notification required by this section 
shall include a warning, in a form to be established by the Director, 
stating that the real estate or manufactured home securing the loan is 
located in an area of special flood hazards, a description of the flood 
insurance purchase requirements under section 102(b), a statement that 
flood insurance coverage may be purchased under the National Flood 
Insurance Program and may also be available from private insurers, and 
any other information that the Director considers necessary to carry 
out the purposes of the National Flood Insurance Program.''.

SEC. 624. PLACEMENT OF FLOOD INSURANCE BY REGULATED LENDING 
              INSTITUTION, FEDERAL AGENCY LENDER, OR SERVICER.

    (a) Required Actions by Lender.--Section 102 of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a), as amended by section 622(a), 
is amended by adding at the end the following new subsection:
    ``(e) Required Actions by Lender.--
            ``(1) Notification to borrower of lack of coverage.--If, at 
        the time of origination or at any other time during the term of 
        a loan secured by improved real estate or by a manufactured 
        home located in an area that has been identified by the 
        Director as an area of special flood hazards and in which flood 
        insurance is available under this title, a regulated lending 
        institution, Federal agency lender, or servicer determines that 
        the building or manufactured home and any personal property 
        securing the loan held or serviced by the regulated lending 
        institution, Federal agency lender, or servicer is not covered 
        by flood insurance, in an amount not less than the amount 
        required by subsection (b)(1), the regulated lending 
        institution, Federal agency lender, or servicer shall notify 
        the borrower, in a form to be established by the Director, that 
        the borrower should obtain, at the borrower's expense, an 
        amount of flood insurance that is not less than the amount 
        required by subsection (b)(1), for the term of the loan. If, 
        not later than 45 days after receiving such notification, the 
        borrower fails to purchase such flood insurance, the regulated 
        lending institution, Federal agency lender, or servicer shall 
        purchase the insurance on behalf of the borrower and may charge 
        the borrower for the cost of premiums and fees incurred by the 
        regulated lending institution, Federal agency lender, or 
        servicer in purchasing the insurance.
            ``(2) Review.--
                    ``(A) By the director.--A borrower may request, 
                based upon the submission of supporting technical data, 
                that the Director review a determination that the 
                improved real estate or manufactured home securing the 
                loan is located in an area of special flood hazards. 
                Not later than 45 days after the Director receives the 
                request, the Director shall review the determination 
                and provide the borrower with a letter stating whether 
                or not the property is in an area of special flood 
                hazards. The determination of the Director shall be 
                final. If the Director fails to respond to a request 
                within 45 days, the property shall be deemed not to be 
                located in an area having special flood hazards.
                    ``(B) Insurance not required.--If a person is 
                provided by the borrower with a letter issued by the 
                Director pursuant to subparagraph (A) during the 
                preceding 1-year period, stating that the property is 
                not in an area of special flood hazards, such person 
                shall have no obligation under this title to require 
                the purchase of flood insurance on the property.''.
    (b) Applicability.--
            (1) In general.--Except as provided in paragraph (2), 
        section 102(e) of the Flood Disaster Protection Act of 1973, as 
        added by subsection (a), shall apply to all loans outstanding 
        on or after the date of enactment of this title.
            (2) Loans regulated by the farm credit administration.--
        With respect to loans held by institutions regulated by the 
        Farm Credit Administration, section 102(e) of the Flood 
        Disaster Protection Act of 1973, as added by subsection (a), 
        shall apply only to loans originating on or after the date of 
        enactment of this title.

SEC. 625. STANDARD FLOOD HAZARD DETERMINATION FORMS.

    (a) In General.--Chapter III of the National Flood Insurance Act of 
1968 (42 U.S.C. 4101 et seq.) is amended by adding at the end the 
following new section:

``SEC. 1365. STANDARD FLOOD HAZARD DETERMINATION FORMS.

    ``(a) Development.--The Director, in consultation with the Federal 
entities for lending regulation, and after notice and comment, shall 
develop a standard flood hazard determination form (hereafter in this 
section referred to as the `determination form') for use in connection 
with loans secured by improved real estate or a manufactured home 
located in an area of special flood hazards and in which flood 
insurance is available under this title. The determination form may be 
maintained in a printed, computerized, or electronic manner.
    ``(b) Design and Contents.--The determination form shall state 
whether the property is in an area of special flood hazards, the risk 
premium rate classification established for the special flood hazard 
area in which the property is located, the complete map and panel 
numbers for the property, and the date of the map used for the 
determination. If the complete map and panel numbers for the property 
are not available because the property is not located in a community 
that is participating in the National Flood Insurance Program or 
because no map exists for the relevant area, the determination form 
shall so state.
    ``(c) Required Use.--Each Federal entity for lending regulation 
shall by regulation require the use of the determination form by 
regulated lending institutions. Each Federal agency lender shall by 
regulation provide for the use of the determination form. The Federal 
National Mortgage Association, the Federal Home Loan Mortgage 
Corporation, and the Federal Agricultural Mortgage Corporation shall 
require use of the determination form by any person from whom they 
purchase loans.
    ``(d) Guarantees Regarding Information.--In recording information 
on a determination form, a person may rely on information provided by a 
third party to the extent that the third party guarantees the accuracy 
of the information.
    ``(e) Reliance on Previous Determination.--A person or institution 
increasing, extending, renewing, or purchasing a loan may rely on a 
previous determination as to whether property is in a special flood 
hazard area, if the previous determination was made not more than 5 
years before the date of the transaction, and the basis for the 
previous determination has been set forth on a determination form.''.
    (b) Applicability.--Section 1365 of the National Flood Insurance 
Act of 1968, as added by subsection (a), shall apply to all loans 
originated on or after the expiration of the 6-month period beginning 
on the date the standard flood hazard determination form is finalized 
by the Director.

SEC. 626. EXAMINATIONS REGARDING COMPLIANCE BY REGULATED LENDING 
              INSTITUTIONS.

    (a) Amendment to Federal Deposit Insurance Act.--Section 10 of the 
Federal Deposit Insurance Act (12 U.S.C. 1820) is amended by adding at 
the end the following new subsection:
    ``(h) Flood Hazard Insurance Compliance by Insured Depository 
Institutions Required.--
            ``(1) Examinations.--The appropriate Federal banking agency 
        shall, during each scheduled on-site examination required by 
        this section, determine whether the insured depository 
        institution is complying with the requirements of the National 
        Flood Insurance Program.
            ``(2) Report.--Not later than 1 year after the date of 
        enactment of the National Flood Insurance Reform Act of 1994, 
        and biannually thereafter for the next 4 years, each 
        appropriate Federal banking agency shall submit a report to 
        Congress on compliance by insured depository institutions with 
        the requirements of the National Flood Insurance Program. The 
        report shall include a description of the methods used to 
        determine compliance, the number of institutions examined 
        during the reporting year, a listing and total number of 
        institutions found to be in noncompliance, actions taken to 
        correct incidents of noncompliance, and an analysis of 
        compliance, including a discussion of any trends, patterns, and 
        problems, and recommendations regarding reasonable actions to 
        improve the efficiency of the examinations processes.''.
    (b) Amendment to the Federal Credit Union Act.--Section 204 of the 
Federal Credit Union Act (12 U.S.C. 1784) is amended by adding at the 
end the following new subsection:
    ``(e) Flood Hazard Insurance Compliance by Insured Credit Unions 
Required.--
            ``(1) Examination.--The Board shall, during each 
        examination conducted under this section, determine whether the 
        insured credit union is complying with the requirements of the 
        National Flood Insurance Program.
            ``(2) Report.--Not later than 1 year after the date of 
        enactment of the National Flood Insurance Reform Act of 1994, 
        and biannually thereafter for the next 4 years, the Board shall 
        submit a report to Congress on compliance by insured credit 
        unions with the requirements of the National Flood Insurance 
        Program. The report shall include a description of the methods 
        used to determine compliance, the number of insured credit 
        unions examined during the reporting year, a listing and total 
        number of insured credit unions found to be in noncompliance, 
        actions taken to correct incidents of noncompliance, and an 
        analysis of compliance, including a discussion of any trends, 
        patterns, and problems, and recommendations regarding 
        reasonable actions to improve the efficiency of the 
        examinations processes.''.

SEC. 627. PENALTIES AND CORRECTIVE ACTIONS FOR FAILURE TO REQUIRE FLOOD 
              INSURANCE, ESCROW, OR NOTIFY.

    Section 102 of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a), as amended by sections 622 and 624, is amended by adding at the 
end the following new subsections:
    ``(f) Civil Penalties.--
            ``(1) In general.--A regulated lending institution that is 
        found to have a pattern or practice of violating this section 
        may be assessed a civil penalty by the appropriate Federal 
        entity for lending regulation of not more than $350 for each 
        such violation. A penalty under this subsection may be issued 
        only after notice and an opportunity for a hearing on the 
        record.
            ``(2) Total amount.--The total amount of penalties assessed 
        under this subsection against a single regulated lending 
        institution for any calendar year may not exceed $100,000.
            ``(3) Sales or transfers.--The subsequent sale or other 
        transfer of a loan by a regulated lending institution that has 
        committed a violation of this section shall not affect the 
        liability of the transferring institution with respect to any 
        penalty under this subsection. An institution shall not be 
        liable for a violation relating to a loan committed by another 
        institution that previously held the loan.
            ``(4) 3-year limit.--No penalty may be imposed under this 
        subsection after the expiration of the 3-year period beginning 
        on the date of the occurrence of the violation.
    ``(g) Additional Actions.--If a Federal entity for lending 
regulation determines--
            ``(1) that a regulated lending institution has demonstrated 
        a pattern and practice of noncompliance in violation of the 
        regulations issued pursuant to subsection (b) or subsection (d) 
        or the notice requirements under section 1364 of the National 
        Flood Insurance Act of 1968; and
            ``(2) that the regulated lending institution has not 
        demonstrated measurable improvement in compliance despite the 
        issuance of penalties under subsection (f);
the agency may require the regulated lending institution to take such 
remedial actions as are necessary to ensure that the regulated lending 
institution is in satisfactory compliance with the requirements of the 
National Flood Insurance Program.''.

SEC. 628. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.

    Section 1006 of the Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3305) is amended by adding at the end 
the following new subsection:
    ``(g) Flood Insurance.--The Council shall consult with and assist 
the Federal entities for lending regulation, as such term is defined in 
section 1370(a)(7) of the National Flood Insurance Act of 1968, in 
developing and coordinating uniform standards and requirements for use 
by regulated lending institutions under the National Flood Insurance 
Program.''.

SEC. 629. CONFORMING AMENDMENT.

    The section heading for section 102 of the Flood Disaster 
Protection Act of 1973 (42 U.S.C. 4012a) is amended to read as follows:

   ``flood insurance purchase and compliance requirements and escrow 
                              accounts''.

Subtitle C--Ratings and Incentives for Community Floodplain Management 
                                Programs

SEC. 631. COMMUNITY RATING SYSTEM AND INCENTIVES FOR COMMUNITY 
              FLOODPLAIN MANAGEMENT.

    (a) Requirement for Participation in Flood Insurance Program.--
Section 1315 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4022) is amended--
            (1) by striking the section heading and inserting the 
        following:

``SEC. 1315. STATE AND LOCAL LAND USE CONTROLS.'';

            (2) by striking ``After December'' and inserting the 
        following:
    ``(a) Requirement for Participation in Flood Insurance Program.--
After December''; and
            (3) by adding at the end the following new subsection:
    ``(b) Community Rating System and Incentives for Community 
Floodplain Management.--
            ``(1) Authority and goals.--The Director shall carry out a 
        community rating system program to evaluate the measures 
        adopted by communities voluntarily participating in the 
        community rating system, to provide incentives for measures to 
        reduce the risk of flood or erosion damage that exceed the 
        criteria set forth in section 1361, to encourage adoption of 
        more effective measures to protect natural and beneficial 
        floodplain functions, floodplain and erosion management, and to 
        promote the reduction of Federal flood insurance losses.
            ``(2) Incentives.--The program shall provide incentives in 
        the form of credits on premium rates for flood insurance 
        coverage in communities that the Director determines have 
        adopted and enforced measures to reduce the risk of flood and 
        erosion damage that exceed the criteria set forth in section 
        1361. In providing incentives under this paragraph, the 
        Director may provide for credits to flood insurance premium 
        rates in communities that the Director determines have--
                    ``(A) implemented measures to protect natural and 
                beneficial floodplain functions; and
                    ``(B) adopted erosion control measures.
            ``(3) Credits.--The credits on premium rates for flood 
        insurance coverage shall be based on the estimated reduction in 
        flood and erosion damage risks resulting from the measures 
        adopted by the community under this program. If a community has 
        received mitigation assistance under section 1366, the credits 
        shall be phased-in as determined by the Director.''.
    (b) Reports.--Two years after the date of enactment of this title 
and biannually thereafter, the Director shall submit a report to the 
Congress regarding the program under section 1315(a) of the National 
Flood Insurance Act of 1968. Each report shall include an analysis of 
the cost-effectiveness and other accomplishments and shortcomings of 
the program and any recommendations of the Director for legislation 
regarding the program.

SEC. 632. FUNDING.

    Section 1310(a) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4017(a)) is amended--
            (1) in paragraph (4), by striking ``and'' at the end;
            (2) in paragraph (5), by striking the period at the end and 
        inserting a semicolon; and
            (3) by adding after paragraph (5) the following new 
        paragraph:
            ``(6) for carrying out the program under section 
        1315(b);''.

SEC. 633. REASONABLE FEES.

    A lender may charge a borrower a reasonable fee for making a flood 
insurance determination.

           Subtitle D--Mitigation of Flood and Erosion Risks

SEC. 641. MITIGATION ASSISTANCE IN FEDERAL INSURANCE ADMINISTRATION.

    Section 1105(a) of the Housing and Urban Development Act of 1968 
(42 U.S.C. 4129) is amended--
            (1) by striking ``(a) There is hereby'' and inserting the 
        following:
    ``(a) Establishment.--There is hereby''; and
            (2) by striking subsection (b) and inserting the following:
    ``(b) Coordination of Mitigation Activities.--The Director shall 
coordinate all mitigation activities, including the administration of 
the program for mitigation assistance under section 1367. These 
activities shall include the development and implementation of various 
mitigation activities and techniques, the provision of advice and 
assistance regarding mitigation to States, communities, and 
individuals, including planning assistance under section 1367(d), 
coordination with other Federal flood and erosion mitigation efforts, 
and coordination with State and local governments and public and 
private agencies and organizations for collection and dissemination of 
information regarding erosion.''.

SEC. 642. AUTHORIZATION OF NATIONAL FLOOD AND EROSION MITIGATION FUNDS 
              UNDER SECTION 1362.

    Chapter III of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101 et seq.), as amended by section 625, is amended by adding at the 
end the following new section:

``SEC. 1366. NATIONAL FLOOD AND EROSION MITIGATION PROGRAM.

    ``(a) Expenditures.--For flood and erosion mitigation activities 
authorized under section 1367, the Director may expend from the 
National Flood Insurance Fund--
            ``(1) up to $10,000,000 in the fiscal year ending September 
        30, 1994;
            ``(2) up to $15,000,000 in the fiscal year ending September 
        30, 1995;
            ``(3) up to $20,000,000 in the fiscal year ending September 
        30, 1996;
            ``(4) up to $20,000,000 in each fiscal year thereafter; and
            ``(5) any amounts recaptured under section 1367(i).
    ``(b) Report.--Not later than 1 year after the date of enactment of 
the National Flood Insurance Reform Act of 1994 and biannually 
thereafter, the Director shall submit a report to the Congress 
describing the status of flood and erosion mitigation activities 
carried out with funds authorized under this section.''.

SEC. 643. STATE AND COMMUNITY MITIGATION ASSISTANCE PROGRAM.

    (a) In General.--Chapter III of the National Flood Insurance Act of 
1968 (42 U.S.C. 4101 et seq.), as amended by sections 625 and 642, is 
amended by adding at the end the following new section:

``SEC. 1367. STATE AND COMMUNITY MITIGATION ASSISTANCE.

    ``(a) Authority.--The Director shall develop and implement a 
financial assistance program with amounts made available under section 
1366 to States and communities for planning and activities designed to 
reduce the risk of flood and erosion damage to insured structures and 
to protect natural and beneficial floodplain functions.
    ``(b) Mitigation Plan Requirement.--To be eligible to receive 
financial mitigation assistance, a State or community shall develop, 
and have approved by the Director, a flood and erosion risk mitigation 
plan (hereafter in this section referred to as a `mitigation plan'), 
that is consistent with the criteria established by the Director under 
section 1361. The mitigation plan shall include a comprehensive 
strategy for mitigation activities adopted by the State or community 
following a public hearing.
    ``(c) Notification of Approval.--Not later than 120 days after the 
submission of a mitigation plan, the Director shall notify the State or 
community submitting the plan of the Director's approval or disapproval 
of the plan. If the Director does not approve a plan, the Director 
shall notify the State or community in writing of the reasons for such 
disapproval.
    ``(d) Planning Assistance.--
            ``(1) In general.--The Director shall make planning 
        assistance available to States and communities for developing 
        mitigation plans.
            ``(2) Funding.--From any amounts made available for use 
        under section 1366 of the National Flood Insurance Act of 1968 
        in any fiscal year, the Director may use not more than 
        $1,500,000 to provide planning assistance grants to States or 
        communities to develop mitigation plans under this subsection.
            ``(3) Limitations.--
                    ``(A) Timing.--A grant for planning assistance may 
                be awarded to a State or community once every 5 years 
                and each grant may cover a period of 1 to 3 years.
                    ``(B) Amount.--A grant for planning assistance may 
                not exceed--
                            ``(i) $150,000, to any State; or
                            ``(ii) $50,000, to any community.
                    ``(C) Geographic.--Not more than $300,000 may be 
                awarded to any 1 State and all communities located in 
                that State for planning assistance in each fiscal year.
    ``(e) Eligible Mitigation Activities.--The Director shall determine 
eligibility for assistance under this section for mitigation activities 
that shall be technically feasible and cost-effective. These activities 
may include--
            ``(1) elevation, relocation, demolition, or floodproofing 
        of structures;
            ``(2) the construction, repair, or restoration of levees, 
        seawalls, and other structures that reduce the risk of flood 
        damage;
            ``(3) erosion control measures including beach nourishment;
            ``(4) acquisition by States and communities of property 
        substantially damaged by flood for public use as the Director 
        determines is consistent with sound land management and use in 
        such area; and
            ``(5) the provision of technical assistance by States to 
        communities and individuals to conduct eligible mitigation 
        activities.
    ``(f) Limitations on Mitigation Assistance.--
            ``(1) Amount.--The amount of mitigation assistance provided 
        under subsection (e) may not exceed in any 5-year period--
                    ``(A) $10,000,000, to any State; or
                    ``(B) $3,300,000, to any community.
            ``(2) Geographic.--Not more than $20,000,000 may be awarded 
        to any 1 State and all communities located in that State for 
        mitigation assistance in any 5-year period.
    ``(g) Matching Requirement.--The Director may provide mitigation 
assistance to a State or community in an amount not to exceed 3 times 
the amount that the State or community certifies, as the Director shall 
require, that the State or community will contribute from other funds 
to carry out mitigation planning under subsection (d) and eligible 
activities under subsection (e).
    ``(h) Oversight of Mitigation Plans.--The Director shall conduct 
oversight of recipients of mitigation assistance to ensure that the 
mitigation assistance is used in compliance with approved plans.
    ``(i) Recapture.--If the Director determines that a State or 
community that has received mitigation assistance has not carried out 
the mitigation activities as set forth in the mitigation plan, the 
Director shall recapture any unexpended amounts and deposit the amounts 
in the Fund.
    ``(j) Definition of Community.--For purposes of this section, the 
term `community' means a political subdivision that has zoning and 
building code jurisdiction over a particular area of special flood 
hazards, and that is participating in the National Flood Insurance 
Program.
    ``(k) Preferences for Mitigation Grants to Communities.--
            ``(1) Cost-Benefificial Plans.--In providing mitigation 
        grants to communities under this section, the Director shall 
        give preference to communities with mitigation plans that are 
        the most cost-beneficial to the Flood Insurance Fund.
            ``(2) Additional Criteria.--Subject to paragraph (1), the 
        Director will also give preference to communities that--
                    ``(A) have the highest rates of participation by 
                property owners in the Federal flood insurance program;
                    ``(B) have qualified for credits on premium rates 
                under section 1315(b); and
                    ``(C) have experienced repetitive losses that have 
                been most costly to the Fund.''.
    (b) Regulations.--Not later than 6 months after date of enactment 
of this title, the Director shall issue regulations implementing 
section 1367 of the National Flood Insurance Act of 1968, as added by 
subsection (a).

SEC. 644. REPEAL OF PROGRAM FOR PURCHASE OF CERTAIN INSURED PROPERTIES.

    (a) Repeal.--Section 1362 of the National Flood Insurance Act of 
1968 (42 U.S.C. 4103) is repealed.
    (b) Transition.--Notwithstanding the repeal under subsection (a), 
the Director may continue to purchase property under subsections (a) 
and (b) of section 1362 of the National Flood Insurance Act of 1968, as 
such section existed immediately before the date of enactment of this 
title, for a period of 1 year beginning on the date of enactment of 
this title.

SEC. 645. TERMINATION OF EROSION THREATENED STRUCTURES PROGRAM.

    (a) In General.--Section 1306 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4013) is amended by striking subsection (c).
    (b) Transition.--The Director may pay amounts under flood insurance 
contracts for demolition or relocation of structures as provided in 
section 1306(c) of the National Flood Insurance Act of 1968 (as in 
effect immediately before the date of enactment of this title) only 
during the 1-year period beginning on the date of enactment of this 
title.

SEC. 646. CONGRESSIONAL FINDINGS AND DECLARATION OF PURPOSE UNDER THE 
              NATIONAL FLOOD INSURANCE ACT OF 1968.

    Section 1302 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4001) is amended by striking subsection (g).

                 Subtitle E--Flood Insurance Task Force

SEC. 651. FLOOD INSURANCE INTERAGENCY TASK FORCE.

    (a) Establishment.--There is established an interagency task force 
to be known as the Flood Insurance Task Force (hereafter in this title 
referred to as the ``Task Force'').
    (b) Membership.--
            (1) In general.--The Task Force shall consist of 13 
        members, who shall be the designees of--
                    (A) the Director;
                    (B) the Federal Housing Commissioner;
                    (C) the Secretary of Veterans Affairs;
                    (D) the Administrator of the Farmers Home 
                Administration;
                    (E) the Administrator of the Small Business 
                Administration;
                    (F) each member of the Federal Financial 
                Institutions Examination Council;
                    (G) the chairman of the Board of Directors of the 
                Federal Home Loan Mortgage Corporation;
                    (H) the chairman of the Board of Directors of the 
                Federal National Mortgage Association; and
                    (I) the chairman of the Federal Agricultural 
                Mortgage Corporation.
            (2) Qualifications.--Members of the Task Force shall be 
        designated for membership on the Task Force by reason of 
        demonstrated knowledge and competence regarding the National 
        Flood Insurance Program.
    (c) Duties.--The Task Force shall--
            (1) make recommendations to the head of each Federal agency 
        and corporation referred to under subsection (b)(1) regarding 
        the establishment or adoption of standardized enforcement 
        procedures among such agencies and corporations responsible for 
        enforcing compliance with the requirements under the National 
        Flood Insurance Program to ensure the fullest possible 
        compliance with such requirements;
            (2) study the extent to which Federal agencies and the 
        secondary mortgage market can provide assistance in ensuring 
        compliance with the requirements under the National Flood 
        Insurance Program;
            (3) study the extent to which existing programs of Federal 
        agencies and corporations for compliance with the requirements 
        under the National Flood Insurance Program can serve as a model 
        for other Federal agencies responsible for enforcing 
        compliance, and submit to the Congress a report describing the 
        study and any conclusions;
            (4) study--
                    (A) the extent to which the flood insurance premium 
                rate structure could be revised to--
                            (i) minimize existing premium rate 
                        subsidies;
                            (ii) reduce or eliminate disaster 
                        assistance payments in high-risk erosion areas;
                            (iii) incorporate premium rate adjustments 
                        for erosion hazards; and
                            (iv) account for catastrophic loss events; 
                        and
                    (B) how changes in the premium rate structure could 
                potentially impact other Federal disaster assistance 
                programs;
            (5) propose strategies to establish an actuarial-based 
        premium structure to account for all insurable risks identified 
        under the National Flood Insurance Act of 1968, as amended by 
        this title; and
            (6) develop guidelines regarding enforcement and compliance 
        procedures, based on the studies and findings of the Task Force 
        and publishing the guidelines in a usable format.
    (d) Reports.--Not later than 2 years after the date of enactment of 
this title, the Task Force shall transmit to the Congress a report 
describing its studies and any conclusions.
    (e) Compensation.--Members of the Task Force shall receive no 
additional compensation by reason of their service on the Task Force.
    (f) Chairperson.--The Director shall select 1 member to serve as 
the chairperson of the Task Force (hereafter in this section referred 
to as the ``Chairperson'').
    (g) Meetings and Action.--The Task Force shall meet at the call of 
the Chairperson or a majority of the members of the Task Force and may 
take action by a vote of the majority of the members. The Federal 
Insurance Administrator shall coordinate and call the initial meeting 
of the Task Force.
    (h) Officers.--The Chairperson may appoint officers to carry out 
the duties of the Task Force under subsection (c).
    (i) Staff of Federal Agencies.--Upon the request of the 
Chairperson, the head of any of the Federal agencies and corporations 
referred to in subsection (b)(1) may detail, on a nonreimbursable 
basis, any of the personnel of the agency to the Task Force to assist 
the Task Force in carrying out its duties under this title.
    (j) Powers.--In carrying out this section, the Task Force may hold 
hearings, sit and act at times and places, take testimony, receive 
evidence and assistance, provide information, and conduct research as 
the Task Force considers appropriate.
    (k) Termination.--The Task Force shall terminate 2 years after the 
date on which all members of the Task Force have been designated under 
subsection (b)(1).

                  Subtitle F--Miscellaneous Provisions

SEC. 661. MAXIMUM FLOOD INSURANCE COVERAGE AMOUNTS.

    (a) In General.--Section 1306(b) of the National Flood Insurance 
Act of 1968 (42 U.S.C. 4013(b)) is amended--
            (1) in paragraph (1)(A)--
                    (A) by inserting ``and'' at the end of clause (i); 
                and
                    (B) by striking clause (iii);
            (2) by striking subparagraph (B) of paragraph (1) and 
        inserting the following new subparagraph:
                    ``(B) in the case of any nonresidential property, 
                including churches--
                            ``(i) $100,000 aggregate liability for each 
                        structure; and
                            ``(ii) $100,000 aggregate liability for any 
                        contents related to each structure;'';
            (3) by striking subparagraph (C) of paragraph (1);
            (4) in paragraph (2), by striking ``so as to enable'' and 
        all that follows through the end of the paragraph and inserting 
        ``up to an amount, including the limits specified in clause (i) 
        of paragraph (1)(A), of $250,000 multiplied by the number of 
        dwelling units in the building;'';
            (5) in paragraph (3), by striking ``so as to enable'' and 
        all that follows through the end of the paragraph and inserting 
        ``up to an amount of $90,000 for any single-family dwelling and 
        $240,000 for any residential structure containing more than one 
        dwelling unit;''; and
            (6) by striking paragraph (4) and inserting the following 
        new paragraph:
            ``(4) in the case of any nonresidential property, including 
        churches, additional flood insurance in excess of the limits 
        specified in clauses (i) and (ii) of paragraph (1)(B) shall be 
        made available to every insured upon renewal and every 
        applicant for insurance up to an amount of $2,400,000 for each 
        structure and $2,400,000 for any contents related to each 
        structure; and''.
    (b) Actuarial Risk Premiums on Repetitive Loss Structures.--Section 
1306(b) of the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) 
is amended--
            (1) in paragraph (5), by striking ``and'' at the end; and
            (2) by striking paragraph (6) and inserting the following 
        new paragraph:
            ``(6) upon determining that a property is a repetitive loss 
        structure, and after making a payment to the insured under 
        section 1304(e), the Director shall charge the applicable risk 
        premium rate for flood insurance based on consideration of the 
        risk involved and accepted actuarial principles under section 
        1307(a)(1), except that the Director may not increase the 
        premium rate above the level authorized in paragraph (7); 
        and''.
    (c) Annual 10-Percent Premium Rate Increase Cap.--Section 1306(b) 
of the National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is 
amended by adding at the end the following:
            ``(7) the Director may not increase the premium rate 
        applied to a structure in any 12-month period by more than 10 
        percent over the rate previously applied to that structure 
        during the preceding 12-month period.''.
    (d) Conforming Amendments.--Section 1306(b)(5) of the National 
Flood Insurance Act of 1968 (42 U.S.C. 4013(b)(5)) is amended--
            (1) by striking ``(A), (B), or (C)'' and inserting ``(A) or 
        (B)''; and
            (2) by striking ``(1)(C),''.

SEC. 662. ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND USE AND CONTROL 
              MEASURES.-

    (a) In General.--Section 1304 of the National Flood Insurance Act 
of 1968 (42 U.S.C. 4011) is amended--
            (1) by redesignating subsection (b) as subsection (c); and
            (2) by inserting after subsection (a) the following new 
        subsection:
    ``(b) The national flood insurance program established pursuant to 
subsection (a) shall enable the purchase of insurance to cover the cost 
of compliance with land use and control measures for--
            ``(1) properties that are repetitive loss structures;
            ``(2) properties that have flood damage in which the cost 
        of repairs equals or exceeds 50 percent of the value of the 
        structure at the time of the flood event; and
            ``(3) properties that have sustained flood damage on 
        multiple occasions, if the Director determines that it is cost-
        effective and in the best interests of the National Flood 
        Insurance Fund to require compliance with the land use and 
        control measures.
The Director shall impose a surcharge on each insured of not more than 
$50 per policy to provide cost of compliance coverage in accordance 
with the provisions of this subsection.''.
    (b) Applicability.--The provisions of subsection (a) shall apply 
only to structures that sustain flood-related damage after the date of 
enactment of this title.

SEC. 663. FLOOD INSURANCE PROGRAM ARRANGEMENTS WITH PRIVATE INSURANCE 
              ENTITIES.

    Section 1345(b) of the National Flood Insurance Act of 1968 (42 
U.S.C. 4081(b)) is amended by striking the period at the end and 
inserting the following: ``and without regard to the provisions of the 
Federal Advisory Committee Act.''.

SEC. 664. UPDATING OF FLOOD INSURANCE RATE MAPS.

    Section 1360 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4101) is amended by adding at the end the following new subsections:
    ``(e) Assessment of Need To Update Areas.--
            ``(1) Periodic assessments.--Not less than once during each 
        5-year period (the first such period beginning on the date of 
        enactment of the National Flood Insurance Reform Act of 1994), 
        or more often as the Director determines necessary, the 
        Director shall assess the need to revise and update each flood 
        insurance rate map, based on an analysis of all natural hazards 
        affecting flood risks.
            ``(2) Upon request.--Upon the request of a State or 
        community stating that a flood insurance rate map needs 
        revision or updating, the Director shall review and update the 
        flood insurance rate map for the State or community. The 
        Director may require the State or community to pay a portion of 
        the cost of updating the map.
    ``(f) Availability.--To promote compliance with the requirements of 
this title, the Director shall make flood insurance rate maps and 
related information available free of charge to Federal agencies and to 
State agencies directly responsible for coordinating the National Flood 
Insurance Program and to appropriate representatives of communities 
participating in the National Flood Insurance Program, and at a 
reasonable cost to all other persons pursuant to section 1310.
    ``(g) Notification.--The Director shall publish in the Federal 
Register or by other comparable method, notice of each revision to or 
update of a flood insurance rate map, issued in the form of a Letter of 
Map Amendment or Letter of Map Revision. Each map revision or update 
shall become effective upon publication. Such comparable methods shall 
include all pertinent information, provide for regular and frequent 
distribution, and be at least as accessible to map users as the Federal 
Register. Notices published in the Federal Register, or otherwise, 
shall also include information on how to obtain copies of the revisions 
or updates.
    ``(h) Availability.--On March 1 and October 1 of each year, the 
Director shall publish separately and make available in their entirety 
within a compendium, all revisions to and updates of flood insurance 
rate maps and all Letters of Map Amendment and Letters of Map Revision 
that were published in the Federal Register or distributed through 
other comparable methods during the preceding 6 months, free of charge, 
to Federal agencies, States, and communities participating in the 
National Flood Insurance Program pursuant to section 1310 and at cost 
to all other persons.''.

SEC. 665. EVALUATION OF EROSION HAZARDS.

    (a) In General.--As soon as practicable and not later than 2 years 
after the date of enactment of this Act, the Director shall submit to 
Congress a report--
            (1) listing all communities that are likely to be 
        identified as having an erosion hazard areas;
            (2) estimating the amount of flood insurance claims 
        attributable to erosion;
            (3) assessing the full economic impact of erosion on the 
        National Flood Insurance Fund;
            (4) measuring the costs and benefits of expenditures 
        necessary from the National Flood Insurance Fund to complete 
        mapping of erosion hazard areas.
    (b) Authorization To Map Erosion Hazard Areas.--In developing an 
estimate of the amount of flood insurance claims attributable to 
erosion pursuant to subsection (a), the Director is authorized to map a 
statistically valid and representative number of communities with 
erosion hazard areas throughout the United States, including coastal, 
Great Lakes and riverine areas.
    (c) Economic Impact Study.--The report required under subsection 
(a)--
            (1) shall assess the economic impact of--
                    (A) erosion on communities likely to be identified 
                as having erosion hazard areas; and
                    (B) the denial of flood insurance and the 
                establishment of actuarial rates in communities likely 
                to be identified as having erosion hazard areas;
            (2) shall be prepared by an independent private sector 
        firm;
            (3) provide for consultation with a statistically valid and 
        representative number of communities likely to be identified as 
        having erosion hazard areas; and
            (4) address all significant economic factors, including the 
        impact on--
                    (A) the value of residential and commercial 
                properties in communities with erosion hazards;
                    (B) community tax revenues due to potential changes 
                in property values or commercial activity;
                    (C) employment, including the potential loss or 
                gain of existing and new jobs in the community;
                    (D) existing businesses and future economic 
                development; and
                    (E) the estimated cost of Federal and State 
                disaster assistance to flood victims.
    (d) Cost and Benefits of Mapping.--The report required under 
subsection (a), shall--
            (1) measure the costs and benefits of mapping erosion 
        hazard areas based upon the Director's estimate of the actual 
        and prospective amount of flood insurance claims attributable 
        to erosion. If the Director determines that the savings to the 
        National Flood Insurance Fund will exceed the cost of mapping 
        erosion hazard areas, the Director shall assess whether the 
        expenditures to map erosion hazard areas is the most cost-
        beneficial use of flood insurance premiums in light of 
        alternative uses of those funds, including--
                    (A) funding the mitigation assistance program under 
                section 1367 of the National Flood Insurance Act of 
                1968 (as added by section 643 of this Act);
                    (B) funding additional coverage for compliance with 
                land use and control measures under section 1304(b) of 
                the National Flood Insurance Act of 1968 (as added by 
                section 662 of this Act); and
                    (C) revising and updating flood insurance rate maps 
                under section 1360(e) of the National Flood Insurance 
                Act of 1968 (as added by section 664 of this Act).
            (2) measure the costs and benefits of mapping erosion, 
        other than those directly related to the financial condition of 
        the National Flood Insurance Program, and the cost of not 
        mapping erosion.
    (e) Definition.--For purposes of this section the term ``erosion 
hazard area'' means, based on erosion rate information and other 
historical data available, an area where erosion or avulsion is likely 
to result in damage to or loss of buildings and infrasturcture within a 
60-year period.
    (f) Authorization of Appropriation.--There are authorized to be 
appropriated to the Director $5,000,000 to carry out this section.

SEC. 666. COORDINATION OF FLOOD INSURANCE RATE MAP REVISIONS AND 
              UPDATES WITH COASTAL ZONE MANAGEMENT PROGRAMS.

    In General.--In the implementation of revisions to and updates of 
flood insurance rate maps, the Director shall consult and share 
information with the Under Secretary of Commerce for Oceans and 
Atmosphere and representatives from State coastal zone management 
programs.

SEC. 667. TECHNICAL MAPPING ADVISORY COUNCIL.

    (a) Establishment.--There is established a council to be known as 
the Technical Mapping Advisory Council (hereafter in this section 
referred to as the ``Council'').
    (b) Membership.--
            (1) In general.--The Council shall consist of the Director, 
        or the Director's designee, and 12 additional members to be 
        appointed by the Director or his designee, and shall include--
                    (A) the Under Secretary of Commerce for Oceans and 
                Atmosphere (or his or her designee);
                    (B) a member of recognized surveying and mapping 
                professional associations and organizations;
                    (C) a member of recognized professional engineering 
                associations and organizations;
                    (D) a member of recognized professional 
                associations or organizations representing flood hazard 
                determination firms;
                    (E) a representative of the United States Geologic 
                Survey;
                    (F) a representative of State geologic survey 
                programs;
                    (G) a representative of State national flood 
                insurance coordination offices;
                    (H) a representative of the Federal National 
                Mortgage Association and the Federal Home Loan Mortgage 
                Corporation; and
                    (I) a representative of a regulated lending 
                institution.
            (2) Qualifications.--Members of the Council shall be 
        appointed based on their demonstrated knowledge and competence 
        regarding surveying, cartography, remote sensing, geographic 
        information systems, or the technical aspects of preparing and 
        using flood insurance rate maps.
    (c) Duties.--The Council shall--
            (1) make recommendations to the Director on how to improve 
        in a cost-effective manner the accuracy, general quality, ease 
        of use, and distribution and dissemination of flood insurance 
        rate maps;
            (2) recommend to the Director mapping standards and 
        guidelines for flood insurance rate maps; and
            (3) transmit an annual report to the Director describing--
                    (A) the activities of the Council;
                    (B) an evaluation of the status and performance of 
                flood insurance rate maps and mapping activities to 
                revise and update flood insurance rate maps, as 
                established by the amendments made under section 664; 
                and
                    (C) a summary of recommendations made by the 
                Council to the Director.
    (d) Chairperson.--The members of the Council shall elect 1 member 
to serve as the chairperson of the Council (hereafter in this section 
referred to as the ``Chairperson'').
    (e) Coordination.--To ensure that the Council's recommendations are 
consistent to the maximum extent practicable with national digital 
spatial data collection and management standards, the Chairperson shall 
consult with the Chairperson of the Federal Geographic Data Committee 
(established pursuant to OMB Circular A-16).
    (f) Compensation.--Members of the Council shall receive no 
additional compensation by reason of their service on the Council.
    (g) Meetings and Actions.--
            (1) In general.--The Council shall meet not less than twice 
        each year at the request of the Chairperson or a majority of 
        its members and may take action by a vote of the majority of 
        the members.
            (2) Initial meeting.--The Director, or a person designated 
        by the Director, shall request and coordinate the initial 
        meeting of the Council.
    (h) Officers.--The Chairperson may appoint officers to assist in 
carrying out the duties of the Council under subsection (c).
    (i) Staff of the Federal Emergency Management Agency.--Upon the 
request of the Chairperson, the Director may detail, on a 
nonreimbursable basis, personnel of the Federal Emergency Management 
Agency to assist the Council in carrying out its duties.
    (j) Powers.--In carrying out this section, the Council may hold 
hearings, receive evidence and assistance, provide information, and 
conduct research as it considers appropriate.
    (k) Termination.--The Council shall terminate 5 years after the 
date on which all members of the Council have been appointed under 
subsection (b)(1).

SEC. 668. FUNDING FOR INCREASED ADMINISTRATIVE AND OPERATIONAL 
              RESPONSIBILITIES.

    (a) Availability of Fund.--Section 1310(a) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4017(a)), as amended by section 632, 
is amended in the matter preceding paragraph (1), by inserting 
``(except as otherwise provided)'' after ``without fiscal year 
limitation''.
    (b) Credits of Fund.--Section 1310(b) of the National Flood 
Insurance Act of 1968 (42 U.S.C. 4017(b)) is amended--
            (1) in paragraph (5), by striking ``and'' at the end;
            (2) by redesignating paragraph (6) as paragraph (7); and
            (3) by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) any penalties collected under section 102(f) of the 
        Flood Disaster Protection Act of 1973; and''.

SEC. 669. SEPARATE ACCOUNT FOR NATIONAL FLOOD INSURANCE FUND.

    Section 1310(a) of the National Flood Insurance Act (42 U.S.C. 
4017(a)) is amended by inserting before ``which shall be available'' 
the following: ``which shall be maintained in the Treasury as an 
account separate from any other funds available to the Director, and''.

SEC. 670. NONWAIVER OF FLOOD PURCHASE REQUIREMENT FOR RECIPIENTS OF 
              FEDERAL DISASTER ASSISTANCE.

    Section 311(b) of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C. 5154(b)) is amended by adding at 
the end the following: ``The requirements of this subsection may not be 
waived under section 301.''.

SEC. 671. INSURANCE WAITING PERIOD.

    Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4014) is amended by adding at the end the following new subsection:
    ``(e)(1) The Director shall establish a waiting period of not less 
than 10 days from the presentment of payment of a premium for the 
initial purchase of flood insurance under this title. Flood insurance 
coverage shall not be available with respect to any claim for damage 
incurred during such waiting period.
    ``(2) This subsection shall not apply to the initial purchase of 
flood insurance under this title when the purchase of insurance is in 
connection with the making, increasing, extension, or renewal of a 
loan.''.

SEC. 672. AGRICULTURAL STRUCTURES.

    Section 1361 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4102) is amended by adding at the end the following new subsection:
    ``(d) Agricultural Structures.--
            ``(1) Exemption from floodway activity restrictions.--
        Notwithstanding any other provision of law, the adequate land 
        use and control measures adopted in an area (or subdivision 
        thereof) pursuant to section 1315(a) may provide, at the 
        discretion of the appropriate State or local authority, for the 
        repair and restoration to pre-damaged conditions of an 
        agricultural structure that--
                    ``(A) is a repetitive loss structure; or
                    ``(B) has incurred flood-related damage to the 
                extent that the cost of restoring the structure to its 
                pre-damaged condition would equal or exceed 50 percent 
                of the market value of the structure before the damage 
                occurred.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) the term `agricultural structure' means any 
                structure used exclusively in connection with the 
                production, harvesting, storage, raising, or drying of 
                agricultural commodities; and
                    ``(B) the term `agricultural commodities' means 
                agricultural commodities and livestock.''.

SEC. 673. IMPLEMENTATION REVIEW BY THE DIRECTOR.

    Section 1320 of the National Flood Insurance Act of 1968 (42 U.S.C. 
4027) is amended--
            (1) by striking ``The Director'' and inserting ``(a) In 
        General.--The Director''; and
            (2) by adding at the end the following new subsection:
    ``(b) Effects of Flood Insurance Program.--The Director shall 
include, as part of the biennial report submitted under subsection (a), 
a chapter reporting on the effects on the flood insurance program 
observed through implementation of requirements under the National 
Flood Insurance Reform Act of 1994.''.

SEC. 674. REGULATIONS.

    The Director and the head of any appropriate Federal agency may 
each issue any regulations necessary to carry out the applicable 
provisions of this title and the applicable amendments made by this 
title.

SEC. 675. PROHIBITED FLOOD DISASTER ASSISTANCE.

    (a) General Prohibition.--Notwithstanding any other provision of 
law, no Federal disaster relief assistance made available in a flood 
disaster area may be used to make a payment (including any loan 
assistance payment) to a person for repair, replacement, or restoration 
for damage to any personal, residential, or commercial property if that 
person at any time has received flood disaster assistance that was 
conditional on the person first having obtained flood insurance under 
applicable Federal law and subsequently having failed to obtain and 
maintain flood insurance as required under applicable Federal law on 
such property.
    (b) Amendment to the Flood Disaster Protection Act of 1973.--
Section 102(a) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a(a)) is amended--
            (1) by striking ``, during the anticipated economic or 
        useful life of the project,''; and
            (2) by adding at the end the following: ``The requirement 
        of maintaining flood insurance shall apply during the life of 
        the property, regardless of transfer of ownership of such 
        property.''.
    (c) Definition.--For purposes of this section, the term ``flood 
disaster area'' means an area with respect to which--
            (1) the Secretary of Agriculture finds, or has found, to 
        have been substantially affected by a natural disaster in the 
        United States pursuant to section 321(a) of the Consolidated 
        Farm and Rural Development Act (7 U.S.C. 1961(a)); or
            (2) the President declares, or has declared, the existence 
        of a major disaster or emergency pursuant to the Robert T. 
        Stafford Disaster Relief and Emergency Assistance Act (42 
        U.S.C. 5121 et seq.), as a result of flood conditions existing 
        in or affecting that area.
    (d) Effective Date.--The amendments made by this section shall 
apply to disasters declared after the date of enactment of the National 
Flood Insurance Reform Act of 1994.

                     TITLE VII--GENERAL PROVISIONS

SEC. 701. STUDY OF EFFECT OF THE NORTHERN SPOTTED OWL ON SMALL BUSINESS 
              CONCERNS.

    (a) Definitions.--For purposes of this section--
            (1) the term ``Administrator'' means the Administrator of 
        the Small Business Administration; and
            (2) the term ``small business concerns'' has the same 
        meaning as in section 3 of the Small Business Act.
    (b) Business Study.--The Administrator in consultation with the 
Secretary of the Interior shall conduct a study that analyzes--
            (1) the nature and extent of economic losses to small 
        business concerns in the forest products industry that have 
        occurred as a result of the designation of the Northern spotted 
        owl as a threatened species pursuant to section 4 of the 
        Endangered Species Act of 1973, or that are reasonably likely 
        to occur in the future;
            (2) the ability of small business concerns to recoup the 
        fair market value of equipment and other property employed in 
        the harvest and processing of timber prior to the listing of 
        the Northern spotted owl as a threatened species; and
            (3) the ability of small business concerns in the affected 
        area to offer alternative products or services for which there 
        is a ready or likely suitable market.
    (c) Report.--
            (1) In general.--Not later than 6 months after the date of 
        enactment of this section, the Administrator and the Secretary 
        of the Interior shall submit a report of the results of the 
        study conducted under subsection (c) to the President and to 
        the relevant committees of the Senate and the House of 
        Representatives.
            (2) Options.--The report shall include options for Congress 
        and the President for compensating small business concerns for 
        economic losses and for promoting business transition and 
        diversification.
            (3) Consultation.--In preparing the report, the 
        Administrator and the Secretary of the Interior shall consult 
        with small business concerns in the forest products industry, 
        and shall solicit comments from the public.

SEC. 702. NEGATIVE INFORMATION ABOUT CONSUMER.

    Section 609(a) of the Fair Credit Reporting Act (15 U.S.C. 
1681g(a)) is amended by adding after paragraph (3) the following:
            ``(4) The dates, original payees, and amounts of any checks 
        upon which is based any negative information about the consumer 
        included in the file at the time of the disclosure.''.

SEC. 703. UNITED NATIONS RESOLUTIONS CONCERNING JERUSALEM.

    (a) Findings.--The Congress finds that--
            (1) for three thousand years Jerusalem has been the focal 
        point of jewish religious devotion;
            (2) Jerusalem is also considered a holy city by the members 
        of other religious faiths;
            (3) the once thriving Jewish community of the historic Old 
        City of Jerusalem was driven out by force during the 1948 Arab-
        Israeli War;
            (4) from 1948 to 1967, Jerusalem was a divided city and 
        Israeli citizens of all faiths as well as Jewish citizens of 
        all states were denied access to holy sites in the area 
        controlled by Jordan;
            (5) in 1967, Jerusalem was reunited during the conflict 
        known as the Six Day War;
            (6) since 1967, Jerusalem has been a united city 
        administered by Israel and persons of all religious faiths have 
        been guaranteed full access to holy sites within the city;
            (7) in 1990, the United States Senate and House of 
        Representatives overwhelmingly adopted Senate Concurrent 
        Resolution 106 and House Concurrent Resolution 290 declaring 
        that Jerusalem, the capital of Israel, ``must remain an 
        undivided city'';
            (8) the Vice President has stated the Administration's 
        intention not to ``forget the meaning of Jerusalem'';
            (9) the Secretary of State recently reiterated United 
        States opposition to attempts in the United Nations to refer to 
        Jerusalem as ``occupied territory'';
            (10) it is reported that the United Nations Security 
        Council may consider a resolution condemning the Hebron 
        massacre but which also refers to Jerusalem as ``occupied'' 
        territory.
    (b) Sense of Congress.--Therefore, it is the sense of the Congress 
that--
            (1) the Administration should be commended for its efforts 
        not to ``forget the meaning of Jerusalem'' and to oppose 
        attempts in the United Nations to refer to Jerusalem as 
        ``occupied'' territory;
            (2) sacrificing core principles for short term objectives 
        will ultimately retard, not advance, the peace process;
            (3) the United States should exercise its veto in the 
        United Nations Security Council on any Security Council 
        resolution that states or implies that Jerusalem is 
        ``occupied'' territory.

SEC. 704. AMENDMENT TO THE FEDERAL RESERVE ACT.

    Section 11.--Section 11 of the Federal Reserve Act (12 U.S.C. 248) 
is amended by inserting at the end thereof the following new 
subsection:
    ``(p) Authority.--The Board of Governors of the Federal Reserve 
System and the Federal Open Market Committee may each act in the 
Board's or the Committee's own name and through the Board's or the 
Committee's own attorneys in enforcing any provision of this title, 
regulations thereunder, or any other law or regulation, or in any 
action, suit, or proceeding to which the Board of Governors of the 
Federal Reserve System or the Federal Open Market Committee is a 
party.''.

SEC. 705. OVERSIGHT HEARINGS.

    It is the sense of the Senate that--
            (a) Congress has a constitutional obligation to conduct 
        oversight of matters relating to the operations of the 
        Government, including matters related to any governmental 
        investigations which may, from time to time, be undertaken.
            (b) the Majority Leader and the Republican Leader should 
        meet and determine the appropriate timetable, procedures, and 
        forum for appropriate Congressional oversight, including 
        hearings on all matters related to ``Madison Guaranty Savings 
        and Loan Association (`MGS&L'), Whitewater Development 
        Corporation and Capital Management Services Inc. (`CMS').''.
            (c) no witness called to testify at these hearings shall be 
        granted immunity under sections 6002 and 6005 of title 18, 
        United States Code, over the objection of Special Counsel 
        Robert B. Fiske, Jr.
            (d) the hearings should be structured and sequenced in such 
        a manner that in the judgment of the Leaders they would not 
        interfere with the ongoing investigation of Special Counsel 
        Robert B. Fiske, Jr.

SEC. 706. INSURANCE TRANSFER AGREEMENT.

    (a) Sense of Senate.--It is the sense of the Senate that no insurer 
shall enter into a transfer agreement or transfer a contract of 
insurance pursuant to a transfer agreement unless the transferring 
insurer has first provided or caused to be provided to each 
policyholder of the insurer affected by the agreement a notice of the 
intent of the insurer to transfer the contract of insurance held by 
such policyholder.
    (b) Form of Notice.--The notice shall be sent by first-class mail, 
addressed to the last known address of the policyholder or to the 
address to which premium notices or other policy documents are sent or, 
with respect to home service business, by personal delivery with 
acknowledged receipt. A notice of intent to transfer shall also be sent 
to the transferring insurer's agent or broker of record on the affected 
policy.
    (c) Content of Notice.--The notice required by subsection (a) shall 
state or provide--
            (1) the date the intended transfer and novation of the 
        contract of insurance of the policyholder is proposed to take 
        place and become effective;
            (2) the name, address, and telephone number of the 
        transferring insurer and the assuming insurer under the 
        proposed transfer agreement;
            (3) that the transfer and novation of the insurance 
        contract of the policyholder cannot take effect without the 
        written consent of the policyholder, except as provided in 
        section 5 of this Act;
            (4) the procedures and any time limitation for consenting 
        to the transfer and novation;
            (5) a summary informing the policyholder regarding any 
        adverse effect that the policyholder might experience as a 
        result of consenting to the transfer and novation;
            (6) a statement that, without the written consent of the 
        policyholder, the transferring insurer will remain as the 
        insurance company of the policyholder or beneficiary, except as 
        provided in section 5 of this Act;
            (7) a statement that the assuming insurer is licensed to 
        write the type of business being transferred in the State where 
        the policyholder resides, or is otherwise authorized, under 
        applicable law, to assume such business;
            (8) the name, address, and telephone number of the person 
        designated by the transferring insurer as the person for 
        receiving the written consent of the policyholder affected by 
        the proposed transfer and novation;
            (9) the address and telephone number of the chief insurance 
        regulatory official of the State in which the policyholder 
        resides;
            (10) financial data for the transferring insurer and the 
        assuming insurer involved in the proposed transfer agreement, 
        including--
                    (A)(i) the ratings, together with enough 
                information to understand where the ratings fall within 
                the range of rating categories of each rating agency, 
                for the last 5 years, if available, or if not available 
                for 5 years, for such lesser period as is available, 
                from each nationally recognized insurance company 
                rating organization that has rated the insurer, 
                including an explanation of the meaning of each rating 
                category of each rating organization;
                    (ii) if ratings are unavailable for any year of the 
                5-year period, a disclosure of this fact; and
                    (iii) a statement that any or all of the above 
                insurance company rating organization reports may be 
                obtained at no cost by writing or calling an address or 
                phone number listed in the statement;
                    (B) a balance sheet as of December 31 for each of 
                the 3 years immediately preceding the notice, if 
                available, or for such lesser period as is available, 
                and as of the date of the most recent quarterly 
                statement;
                    (C) a copy of the Management's Discussion and 
                Analysis that was filed as a supplement to the annual 
                statement of the preceding year; and
                    (D) an explanation of the reason for the proposed 
                transfer signed by the highest executive official of 
                the transferring insurer and the assuming insurer;
            (11) a statement setting forth the financial condition of 
        the transferring insurer and of the assuming insurer under the 
        proposed transfer agreement, and the effect the transaction 
        will have on the financial condition of each such insurer;
            (12) an opinion by a disinterested third-party expert, such 
        as an actuary, finding that the transfer is fair and in the 
        best interests of the policyholders affected by the transfer, 
        and a statement that the report on which the opinion is based 
        is available at no cost by writing or calling an address and 
        phone number listed in the statement.

            Attest:






                                                             Secretary.

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