[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 810 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                 S. 810

To amend the Bank Holding Company Act of 1956, the Revised Statutes of 
the United States, and the Federal Deposit Insurance Act to provide for 
interstate banking, to permit savings associations to branch interstate 
     to the extent authorized by State law, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES



               April 22 (legislative day, April 19), 1993

   Mr. Ford introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To amend the Bank Holding Company Act of 1956, the Revised Statutes of 
the United States, and the Federal Deposit Insurance Act to provide for 
interstate banking, to permit savings associations to branch interstate 
     to the extent authorized by State law, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Interstate Banking Act of 1993''.

SEC. 2. INTERSTATE BANKING.

    (a) In General.--Section 3(d) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1842(d)) is amended to read as follows:
    ``(d) Interstate Acquisitions.--
            ``(1) Acquisition of existing banks.--Beginning 1 year 
        after the date of enactment of the Interstate Banking Act of 
        1993, the Board may approve an application under this section 
        to permit a bank holding company that is adequately capitalized 
        and adequately managed to acquire, directly or indirectly, any 
        voting shares of, interest in, or all or substantially all of 
        the assets of an existing bank located outside of the State in 
        which the operations of such bank holding company's banking 
        subsidiaries were principally conducted on July 1, 1966, or the 
        date on which such company became a bank holding company, 
        whichever is later. For purposes of this section, the State in 
        which the operations of a bank holding company's banking 
        subsidiaries are principally conducted is that State in which 
        total deposits of all such banking subsidiaries are largest.
            ``(2) Existing banks.--For purposes of paragraph (1), a 
        bank that does not open for business and has been chartered 
        solely for the purpose of acquiring any voting shares of, 
        interest in, or all or substantially all of the assets of an 
        existing bank shall be deemed to be an existing bank and to 
        have been in existence for the same period of time as the bank 
        to be acquired.
            ``(3) Community reinvestment compliance.--In determining 
        whether to approve an application under paragraph (1), the 
        Board shall consider the applicant's record of compliance with 
        applicable Federal and State community reinvestment laws.
            ``(4) State law.--A transaction approved under paragraph 
        (1) may occur without regard to whether such transaction is 
        permitted under the law of the State in which the bank to be 
        acquired is located.
            ``(5) Concentration and other limits.--
                    ``(A) In general.--The Board may not approve an 
                application under paragraph (1) if--
                            ``(i) the applicant controls, or upon 
                        completion of the acquisition would control, 
                        more than 10 percent of insured depository 
                        institution assets of the United States, as 
                        determined under regulations of the Board;
                            ``(ii) the applicant controls, or upon 
                        completion of the acquisition would control, 25 
                        percent or more of the insured depository 
                        institution deposits in the State in which the 
                        institution to be acquired is located, as 
                        determined under regulations of the Board, 
                        except that a State may waive the applicability 
                        of this subparagraph; or
                            ``(iii) the acquisition will result in the 
                        applicant directly or indirectly controlling a 
                        bank that has been in existence for a shorter 
                        period of time than is prescribed by the law of 
                        the State in which such bank is located in 
                        effect on the date the application is filed 
                        with the Board, only if such State law does not 
                        prescribe a period of more than 5 years.
                    ``(B) No effect on antitrust laws.--Nothing in this 
                paragraph shall be construed to affect the 
                applicability of Federal or State antitrust laws that 
                do not discriminate or have the effect of 
                discriminating against out-of-State banks or bank 
                holding companies.
            ``(6) Definitions.--For purposes of this subsection--
                    ``(A) the term `adequately capitalized' has the 
                same meaning as in section 38 of the Federal Deposit 
                Insurance Act; and
                    ``(B) the term `insured depository institution' has 
                the same meaning as in section 3 of the Federal Deposit 
                Insurance Act.''.

SEC. 3. CONVERSION OF BANKS TO BRANCHES.

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

SEC. 4. AMENDMENTS TO FEDERAL DEPOSIT INSURANCE ACT AND THE ACT 
              ENTITLED ``AN ACT TO PROVIDE FOR THE CONSOLIDATION OF 
              NATIONAL BANKING ASSOCIATIONS''.

    (a) Federal Deposit Insurance Act Amendments.--Section 18(d) of the 
Federal Deposit Insurance Act (12 U.S.C. 1828(d)) is amended--
            (1) in the first sentence of paragraph (1), by striking 
        ``No State'' and inserting ``Except as provided in section 3(h) 
        of the Bank Holding Company Act of 1956, no State'';
            (2) by adding at the end of section 18(d) the following:
            ``(3) Coordination of examination authority.--
                    ``(A) In general.--A host State bank supervisory or 
                regulatory authority may examine a branch established 
                in the host State by a bank chartered by a State other 
                than that host State that resulted from a combination 
                effected under section 3(h) of the Bank Holding Company 
                Act of 1956 for the purpose of determining compliance 
                with host State laws regarding banking, community 
                reinvestment, fair lending, consumer protection, and 
                permissible activities and to ensure that the 
                activities of the branch--
                            ``(i) are conducted in a manner that is 
                        consistent with sound banking principles; and
                            ``(ii) do not constitute a serious risk to 
                        the safety and sound operation of the branch.
                    ``(B) Enforcement.--In the event that a host State 
                bank supervisory or regulatory authority determines 
                that there is a violation of the law of the host State 
                concerning the activities being conducted by the branch 
                of a State bank or that such branch is being operated 
                in a manner not consistent with sound banking 
                principles or in an unsafe and unsound manner, such 
                host State bank supervisory or regulatory authority may 
                undertake such enforcement actions and proceedings as 
                would be permitted under the law of the host State as 
                if the branch in question were a bank chartered by that 
                host State.
                    ``(C) Cooperative agreement.--The State bank 
                supervisory or regulatory authorities from 1 or more 
                States are authorized to enter into cooperative 
                agreements to facilitate State regulatory supervision 
                of State-chartered banks, including cooperative 
                agreements relating to the coordination of examinations 
                and joint participation in examinations.
                    ``(D) Federal regulatory authority.--
                            ``(i) Interstate agreements.--Nothing in 
                        this subsection limits in any way the authority 
                        of the appropriate Federal banking agency to 
                        examine any bank or branch of a bank for which 
                        the agency is the appropriate Federal banking 
                        agency.
                            ``(ii) Review of interstate agreements.--If 
                        the appropriate Federal banking agency 
                        determines that the States have failed to reach 
                        an agreement under subparagraph (C), or that 
                        such an agreement fails to adequately protect 
                        the Federal Deposit Insurance Fund, the 
                        appropriate Federal banking agency shall not 
                        defer to State examinations of the out-of-State 
                        branches.
            ``(4) Definition.--For purposes of this subsection, the 
        term `host State' means the State in which a bank establishes 
        or maintains a branch, other than the State in which the bank 
        is chartered and is engaged in the business of banking.''.
    (b) National Banking Associations.--The Act entitled ``An act to 
provide for the consolidation of national banking associations'', 
approved November 7, 1918, (12 U.S.C. 215 et seq.) is amended--
            (1) in the first sentence of subsection (a) of the first 
        section, by inserting after ``located in the same State'' the 
        following: ``, or in any State in which a bank involved in an 
        interstate acquisition or interstate combination authorized by 
        section 3(d)(1) or 3(h) of the Bank Holding Company Act of 1956 
        is located,'';
            (2) by inserting before the period at the end of subsection 
        (d) of the first section ``, except that the applicability of 
        State law to an interstate acquisition or interstate 
        combination undertaken in accordance with section 3(d)(1) or 
        3(h) of the Bank Holding Company Act of 1956 shall be 
        determined in accordance with the provisions of those 
        sections'';
            (3) in the first sentence of section 2(a), by inserting 
        after ``located within the same State,'' the following: ``or in 
        any State in which a bank involved in an interstate acquisition 
        or interstate combination authorized by section 3(d)(1) or 3(h) 
        of the Bank Holding Company Act of 1956 is located,'';
            (4) in the sixth sentence of section 2(d), by inserting 
        before the period ``, except that the applicability of State 
        law to the transaction undertaken pursuant to section 3(d)(1) 
        or 3(h) of the Bank Holding Company Act of 1956 shall be 
        determined in accordance with the provisions of those 
        sections''; and
            (5) in paragraph (4) of section 3, by inserting after 
        ``within the same State'' the following: ``, or within any 
        State in which a bank involved in an interstate acquisition or 
        interstate combination authorized by section 3(d)(1) or 3(h) of 
        the Bank Holding Company Act of 1956 is located,''.

SEC. 5. ESTABLISHMENT OF NEW INTERSTATE BRANCHES BY NATIONAL AND STATE 
              BANKS.

    (a) Establishment of New Interstate Branches by State Banks.--
Section 18(d) of the Federal Deposit Insurance Act (12 U.S.C. 1828(d)), 
as amended by section 4(a), is further amended by adding at the end the 
following:
            ``(5) Establishment of new interstate branches.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, a host State may, expressly by 
                statute and not merely by implication, permit all out-
                of-State national or State banks that are adequately 
                capitalized and adequately managed to establish a 
                branch in the host State other than by merger, 
                consolidation, or other similar transaction. Such 
                branch shall be operated in accordance with section 
                3(h) of the Bank Holding Company Act of 1956 and the 
                provisions of that section shall apply to the branch as 
                if the branch resulted from a combination effected in 
                accordance with paragraph (1) of that section.
                    ``(B) Definition.--For purposes of this paragraph, 
                the term `host State' means the State in which a bank 
                establishes a branch under subparagraph (A).''.
    (b) Establishment of New Interstate Branches by National Banks.--
Section 5155 of the Revised Statutes (12 U.S.C. 36) is amended--
            (1) by redesignating subsections (d) through (h) as 
        subsections (e) through (i), respectively; and
            (2) by inserting after subsection (c) the following:
    ``(d) Interstate Branching by National Banks.--
            ``(1) Approvals authorized.--Notwithstanding any other 
        provision of law, the Comptroller of the Currency may approve 
        an application under this section for a national bank to 
        establish a branch in a State other than the State in which its 
        principal place of business is located if the host State 
        expressly permits, by statute and not merely by implication, 
        all out-of-State national banks that are adequately capitalized 
        and adequately managed to establish such a branch. Such branch 
        shall be operated in accordance with section 3(h) of the Bank 
        Holding Company Act of 1956, and the provisions of that section 
        shall apply to the branch as if the branch resulted from a 
        combination effected in accordance with paragraph (1) of that 
        section.
            ``(2) Definition.--For purposes of this subsection, the 
        term `host State' means the State in which a national bank 
        establishes a branch under paragraph (1).''.

SEC. 6. COMMUNITY REINVESTMENT ACT EVALUATION OF BANKS WITH INTERSTATE 
              BRANCHES.

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

SEC. 7. STATE TAX COMPLIANCE.

    Section 5240 of the Revised Statutes (12 U.S.C. 484) is amended by 
adding after subparagraph (B) the following new subparagraph:
            ``(C) Notwithstanding subparagraph (A), lawfully authorized 
        auditors, examiners, and other representatives acting on behalf 
        of the State agency or agencies charged with the administration 
        and collection of taxes imposed by a State or political 
        subdivision thereof, may, to the extent necessary, review the 
        books, records, and accounts of a depository institution, 
        chartered under Federal law and located in that State, to 
        determine any State or local tax liability and to ensure 
        compliance with the tax laws of the State or political 
        subdivision thereof.''.

SEC. 8. INTERSTATE BRANCHING BY FEDERAL SAVINGS ASSOCIATIONS.

    (a) In General.--Section 5(r) of the Home Owners' Loan Act (12 
U.S.C. 1464(r)) is amended by adding at the end the following new 
paragraph:
            ``(4) Approval of director required.--
                    ``(A) In general.--No Federal savings association 
                described in paragraph (1) may establish, acquire, or 
                operate a branch outside such association's home State 
                without the prior written approval of the Director.
                    ``(B) Limitations on the director's authority.--The 
                Director may not approve the establishment, 
                acquisition, or operation of any branch of any Federal 
                savings association in any State other than such 
                association's home State, unless--
                            ``(i) the establishment, acquisition or 
                        operation of such branch would, if the Federal 
                        savings association were a savings association 
                        chartered by the home State of the Federal 
                        savings association, be expressly permitted 
                        under both the law of the State in which such 
                        branch is to be located and the law of the home 
                        State of the Federal savings association, by 
                        statutory language to that effect and not 
                        merely by implication;
                            ``(ii) the establishment, acquisition or 
                        operation of the branch is carried out in 
                        accordance with all requirements, conditions, 
                        and limitations established under or pursuant 
                        to the law of the State in which the branch is 
                        (or is proposed to be) located; and
                            ``(iii) such association is an adequately 
                        capitalized depository institution (as defined 
                        under section 38 of the Federal Deposit 
                        Insurance Act) which maintains capital that 
                        exceeds the required minimum ratio for each 
                        relevant capital measure.
                    ``(C) Home state defined.--For purposes of this 
                paragraph, the term `home State' means the State in 
                which the home office of the Federal savings 
                association is located.''.
    (b) Technical and Conforming Amendment.--Section 5(r)(3) of the 
Home Owners' Loan Act (12 U.S.C. 1464(r)(3)) is amended by striking 
``this subsection'' and inserting ``paragraph (1)''.
    (c) Applicability.--Section 5(r)(4) of the Home Owners' Loan Act 
(as added by subsection(a)) shall not apply to the establishment, 
acquisition, or operation of a branch of a Federal savings association 
approved by the Director of the Office of Thrift Supervision on or 
before June 30, 1993.

                                 <all>

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