[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 597 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 597

To institute management reforms and eliminate conflicts-of-interest on 
 boards of directors of depository institutions and depository holding 
                   companies, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 26, 1993

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

_______________________________________________________________________

                                 A BILL


 
To institute management reforms and eliminate conflicts-of-interest on 
 boards of directors of depository institutions and depository holding 
                   companies, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This act may be cited as the ``Management and Conflict of Interest 
Reform Amendments of 1993''.

SEC. 2. DEFINITIONS.

    (a) Section 202 of the Depository Institution Management Interlocks 
Act (12 U.S.C. 3201) is amended--
            (1) by amending paragraph (1) to read as follows:
            ``(1) the term `depository institution' means a commercial 
        bank, a foreign bank, a savings bank, a trust company, a 
        savings association, a building and loan association, a 
        homestead association, a cooperative bank, an industrial bank, 
        or a credit union;'';
            (2) in paragraph (5), by striking ``and'';
            (3) in paragraph (6), by striking the period and inserting 
        ``; and''; and
            (4) by adding at the end the following:
            ``(7) the term `outside counsel' means any individual who 
        is not a full time employee of the depository institution or 
        depository holding company and who receives compensation, 
        either directly or through a law firm, partnership, or 
        corporation, for legal services or advice rendered to the 
        depository institution or depository holding company or any of 
        its subsidiaries, affiliates, or holding companies;
            ``(8) the term `outside accountant' means any individual 
        who is not a full time employee of the depository institution 
        or depository holding company and who receives compensation, 
        either directly or through an accounting firm, partnership, or 
        corporation, for accounting services or advice rendered to the 
        depository institution or any of its subsidiaries, affiliates, 
        or holding companies;
            ``(9) the term `outside director' means an individual who 
        is a member of the board of directors who is not an employee or 
        officer with management functions of either the depository 
        institution or depository holding company, or any of its 
        subsidiaries, affiliates, or holding companies; and
            ``(10) the term `control' has the meaning given to such 
        term in section 2 of the Bank Holding Company Act of 1956 for 
        bank holding companies and section 10(a)(2) of the Home Owners' 
        Loan Act for savings and loan holding companies.''.
    (b) Section 207(2) of the Depository Institution Management 
Interlocks Act (12 U.S.C. 3206(2)) is amended to read as follows:
            ``(2) the Board of Governors of the Federal Reserve System 
        with respect to State banks which are members of the Federal 
        Reserve System, foreign banks, and bank holding companies,''.

SEC. 3. DUAL SERVICE OF OUTSIDE COUNSEL AND ACCOUNTANTS ON BOARD OF 
              DIRECTORS PROHIBITED.

    The Depository Institution Management Interlocks Act (12 U.S.C. 
3201 et seq.) is amended by adding at the end the following new 
section:

``SEC. 211. DUAL SERVICE OF OUTSIDE COUNSEL AND ACCOUNTANTS ON BOARD OF 
              DIRECTORS PROHIBITED.

    ``No individual who is an outside counsel or outside accountant of 
a depository institution or a depository holding company may serve as a 
member of board of directors of that depository institution or 
depository holding company or any of its subsidiaries, affiliates, or 
holding companies.''.

SEC. 4. OWNERSHIP DISCLOSURES TO BOARD OF DIRECTORS.

    The Depository Institution Management Interlocks Act (12 U.S.C. 
3201 et seq.) (as amended by this act) is amended by adding at the end 
the following new section:

``SEC. 212. OWNERSHIP DISCLOSURES TO BOARD OF DIRECTORS.

    ``Not less than once each calendar year each depository institution 
and depository holding company shall provide to each member of its 
board of directors, and to each member of the board of directors of any 
depository institution or depository holding company it controls, a 
list of the names and principal places of business of each individual 
or company which directly or indirectly owns, controls, or has power to 
vote 5 per centum or more of any class of voting securities of the 
depository institution or depository holding company, and such other 
information as the appropriate Federal depository institutions 
regulatory agency shall prescribe by regulation.''.

SEC. 5. CHANGE IN CONTROL DISCLOSURES TO BOARD OF DIRECTORS.

    The Depository Institution Management Interlocks Act (12 U.S.C. 
3201 et seq.) (as amended by this act) is amended by adding at the end 
the following new section:

``SEC. 213. CHANGE IN CONTROL DISCLOSURES TO BOARD OF DIRECTORS.

    ``Each depository institution and depository holding company shall 
provide to each member of its board of directors, and to each member of 
the board of directors of any depository institution or depository 
holding company it controls, with notice of any proposed change in 
control of the parent depository institution or depository holding 
company. Such notice shall contain such information as the appropriate 
Federal depository institutions regulatory agency of the parent 
depository institution or depository holding company shall prescribe by 
regulation.''.

SEC. 6. BOARD OF DIRECTORS CONTROL BY OUTSIDE DIRECTORS.

    The Depository Institution Management Interlocks Act (12 U.S.C. 
3201 et seq.) (as amended by this act) is amended by adding at the end 
the following new section:

``SEC. 214. BOARD OF DIRECTORS CONTROL BY OUTSIDE DIRECTORS.

    ``A majority of the voting members of the board of directors of 
each depository institution and each depository holding company shall 
be outside directors.''.

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