[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1415 Introduced in Senate (IS)]







104th CONGRESS
  1st Session
                                S. 1415

        Entitled the ``Thrift Charter Conversion Act of 1995''.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 15, 1995

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

_______________________________________________________________________

                                 A BILL


 
        Entitled the ``Thrift Charter Conversion Act of 1995''.

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

SECTION 1. SHORT TITLE, TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Thrift Charter 
Conversion Act of 1995''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title, table of contents.
           TITLE I--STATUS OF BANKS AND SAVINGS ASSOCIATIONS

Sec. 101. Termination of Federal savings associations; treatment of 
                            State savings associations as banks for 
                            purposes of Federal banking law.
Sec. 102. Treatment of certain activities and affiliations of bank 
                            holding companies resulting from this Act.
Sec. 103. Transition provisions for activities of savings associations 
                            which convert into or become treated as 
                            banks.
Sec. 104. Registration of bank holding companies resulting from 
                            conversions of savings associations to 
                            banks or treatment of savings associations 
                            as banks.
Sec. 105. Additional transition provisions and special rules.
Sec. 106. Technical and conforming amendments.
Sec. 107. References to savings associations and State banks in Federal 
                            law.
Sec. 108. Repeal of Home Owners' Loan Act.
Sec. 109. Effective date; definitions.
        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

Sec. 201. Office of Thrift Supervision abolished.
Sec. 202. Determination of transferred functions and employees.
Sec. 203. Savings provisions.
Sec. 204. Cost of funds indexes.
Sec. 205. References in Federal law to Director of the Office of Thrift 
                            Supervision.
Sec. 206. Reconfiguration of board of directors of FDIC as a result of 
                            removal of Director of the Office of Thrift 
                            Supervision.
                  TITLE III--PRIVATE DEPOSIT INSURANCE

Sec. 301. Deposit insurance study.

           TITLE I--STATUS OF BANKS AND SAVINGS ASSOCIATIONS

SEC. 101. TERMINATION OF FEDERAL SAVINGS ASSOCIATIONS; TREATMENT OF 
              STATE SAVINGS ASSOCIATIONS AS BANKS FOR PURPOSES OF 
              FEDERAL BANKING LAW.

    (a) Termination of Federal Savings Association Charters.--
            (1) In general.--Each Federal savings association shall--
                    (A) convert to a national bank charter;
                    (B) convert to a State depository institution 
                charter; or
                    (C) surrender the charter of such savings 
                association and liquidate the institution.
            (2) Conversion to national bank by operation of law.--If 
        any Federal savings association has not taken any action 
        required under paragraph (1) as of January 1, 1998, the savings 
        association shall--
                    (A) become a national bank on such date by 
                operation of law;
                    (B) immediately file articles of association and an 
                organizational certificate with the Comptroller of the 
                Currency in accordance with sections 5133, 5134, and 
                5135 of the Revised Statutes of the United States; and
                    (C) cease to exist as a Federal savings association 
                as of such date.
            (3) Prohibition on new charters of federal savings 
        associations.--The Director of the Office of Thrift Supervision 
        may not grant any charter for a Federal savings association for 
        which an application was received after the date of the 
        enactment of this Act.
    (b) Treatment of State Savings Associations as Banks for Purposes 
of Federal Banking Law.--
            (1) Amendments to federal deposit insurance act.--Section 3 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813) is 
        amended--
                    (A) by striking paragraph (2) of subsection (a) and 
                inserting the following new paragraph:
            ``(2) State bank.--
                    ``(A) In general.--The term `State bank' means any 
                bank, banking association, trust company, savings bank, 
                industrial bank (or similar depository institution 
                which the Board of Directors finds to be operating 
                substantially in the same manner as an industrial 
                bank), building and loan association, savings and loan 
                association, homestead association, cooperative bank, 
                or other banking institution--
                            ``(i) which is engaged in the business of 
                        receiving deposits, other than trust funds (as 
                        defined in this section); and
                            ``(ii) which--
                                    ``(I) is incorporated under the 
                                laws of any State;
                                    ``(II) is organized and operating 
                                according to the laws of the State in 
                                which such institution is chartered or 
                                organized; or
                                    ``(III) is operating under the Code 
                                of Law for the District of Columbia 
                                (except a national bank).
                    ``(B) Certain insured banks included.--The term 
                `State bank' includes any cooperative bank or other 
                unincorporated bank the deposits of which were insured 
                by the Corporation on the day before the date of the 
                enactment of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989.
                    ``(C) Certain uninsured banks excluded.--The term 
                `State bank' does not include any cooperative bank or 
                other unincorporated bank the deposits of which were 
                not insured by the Corporation on the day before the 
                date of the enactment of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989.''; and
                    (B) in subsection (q)--
                            (i) by inserting ``and'' after the 
                        semicolon at the end of paragraph (2);
                            (ii) by striking ``; and'' at the end of 
                        paragraph (3) and inserting a period; and
                            (iii) by striking paragraph (4).
            (2) Amendments to the bank holding company act of 1956.--
        Section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841) is amended--
                    (A) by striking subparagraph (E) of subsection 
                (a)(5); and
                    (B) by striking subparagraphs (B) and (J) of 
                subsection (c)(2).
            (3) Amendments to the federal reserve act.--The 2d and 3d 
        paragraphs of the 1st section of the Federal Reserve Act (12 
        U.S.C. 221) are each amended by inserting ``(as defined in 
        section 3(a)(2) of the Federal Deposit Insurance Act)'' after 
        ``State bank''.
    (c) Comparability of Regulation for State-Chartered Depository 
Institutions.--
            (1) Review of state supervision.--The Corporation shall 
        maintain procedures for reviewing, under standards the Board of 
        Directors shall prescribe in regulations, the manner in which 
        State depository institutions are regulated by a State for the 
        purpose of ensuring that State savings associations are no less 
        rigorously regulated by a State than State banks.
            (2) Inadequate state regulation.--If, in connection with a 
        review of State regulation of State depository institutions 
        pursuant to paragraph (1), the Corporation determines that a 
        State regulates savings associations chartered by such State 
        less rigorously than the State regulates banks chartered by 
        such State, the Corporation may take such action under section 
        8(a) of the Federal Deposit Insurance Act as the Corporation 
        determines to be appropriate with respect to savings 
        associations chartered by such State which shall be effective 
        no later than the end of the 1-year period beginning on the 
        date of such determination.
            (3) Definitions.--The following definitions shall apply for 
        purposes of this subsection:
                    (A) State bank.--The term ``State bank'' has the 
                same meaning as in section 3(a)(2) of the Federal 
                Deposit Insurance Act (as in effect on the date of the 
                enactment of the Thrift Charter Conversion Act of 
                1995).
                    (B) State savings association.--The term ``State 
                savings association'' has the same meaning as in 
                section 3(b)(2) of the Federal Deposit Insurance Act 
                (as in effect on the date of the enactment of the 
                Thrift Charter Conversion Act of 1995).
                    (C) State depository institution.--The term ``State 
                depository institution'' has the same meaning as in 
                section 3(c)(5) of the Federal Deposit Insurance Act.

SEC. 102. TREATMENT OF CERTAIN ACTIVITIES AND AFFILIATIONS OF BANK 
              HOLDING COMPANIES RESULTING FROM THIS ACT.

    Section 4 of the Bank Holding Company Act of 1956 (12 U.S.C. 1843) 
is amended by adding at the end the following new subsection:
    ``(k) Treatment of Companies Resulting From Savings and Loan 
Holding Companies.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section (other than paragraph (5)) or any other provision 
        of Federal law including sections 20 and 32 of the Banking Act 
        of 1933, a qualified bank holding company may, after such 
        company becomes a bank holding company--
                    ``(A) maintain or enter into any nonbanking 
                affiliation which such company was authorized to 
                maintain or enter into as of September 22, 1995, or was 
                authorized to maintain following a merger of insured 
                depository institution subsidiaries pursuant to an 
                application filed no later than such date; and
                    ``(B) engage, directly or through any affiliate 
                described in subparagraph (A) which is not a bank, in 
                any activity in which such company or any affiliate 
                described in subparagraph (A) was authorized to engage 
                as of September 22, 1995, or in which such company was 
                authorized to engage following a merger of insured 
                depository institution subsidiaries pursuant to an 
                application filed no later than such date,
        if the requirements of paragraph (4) are met.
            ``(2) Qualified bank holding company defined.--For purposes 
        of this subsection, the term `qualified bank holding company' 
        means--
                    ``(A) any company which--
                            ``(i) as of September 13, 1995, is a 
                        savings and loan holding company and is not a 
                        bank holding company; and
                            ``(ii) becomes a bank holding company after 
                        such date,
                or any subsidiary of such company; and
                    ``(B) any bank holding company which as of 
                September 13, 1995--
                            ``(i) is a savings and loan holding 
                        company; and
                            ``(ii) is exempt from this section pursuant 
                        to an order issued by the Board under 
                        subsection (d).
            ``(3) No loss of subsection (d) exemption.--No qualified 
        bank holding company described in paragraph (2)(B) shall lose 
        the grounds for the exemption under subsection (d) because a 
        savings association which such company controlled, directly or 
        indirectly, as of September 13, 1995, becomes a bank after such 
        date so long as such bank continues to meet the requirements of 
        subparagraphs (A) and (B) of paragraph (4).
            ``(4) Prerequisites for continuation of grandfathered 
        activities and affiliations.--This subsection shall cease to 
        apply with respect to a qualified bank holding company if, at 
        any time after such company first meets the definition of a 
        qualified bank holding company--
                    ``(A) any insured depository institution controlled 
                by such company which, as of the day before the company 
                first meets the definition of a qualified bank holding 
                company--
                            ``(i) was subject to the requirements 
                        contained in section 10(m) of the Home Owners' 
                        Loan Act, as in effect on such date, (and 
                        regulations in effect on such date under such 
                        section) for treatment as a qualified thrift 
                        lender under such section; and
                            ``(ii) was not a savings association 
                        described in section 10(m)(3)(F) of such Act, 
                        as in effect on such date,
                fails to meet any requirement of such section;
                    ``(B) any insured depository institution controlled 
                by such company fails to comply with any limitation or 
                restriction on the type or amounts of loans or 
                investments of the institution to which such 
                institution was subject as of the date of the enactment 
                of the Thrift Charter Conversion Act of 1995, other 
                than any limitation relating to qualified thrift 
                investments under section 10(m) of the Home Owners' 
                Loan Act, as in effect on such date; or
                    ``(C) the company or any subsidiary of the company 
                acquires more than 5 percent of the shares or assets of 
                any bank or any savings association (as defined in 
                section 3 of the Federal Deposit Insurance Act, as in 
                effect on the date of the enactment of the Thrift 
                Charter Conversion Act of 1995) after September 13, 
                1995.
            ``(5) Nontransferable.--This subsection shall not apply 
        with respect to any qualified bank holding company if, after 
        September 13, 1995--
                    ``(A) any person not under common control with such 
                company acquires, directly or indirectly, control of 
                the company; or
                    ``(B) the company is the subject of any merger, 
                consolidation, or other similar transaction as a result 
                of which a person not under common control with such 
                company acquires, directly or indirectly, control of 
                such company.
            ``(6) Enforcement.--In addition to any other power of the 
        Board, the Board may enforce compliance with the provisions of 
        this subsection with respect to any qualified bank holding 
        company and any bank controlled by such company under section 8 
        of the Federal Deposit Insurance Act.''.

SEC. 103. TRANSITION PROVISIONS FOR ACTIVITIES OF SAVINGS ASSOCIATIONS 
              WHICH CONVERT INTO OR BECOME TREATED AS BANKS.

    (a) In General.--Notwithstanding any other provision of Federal 
law, any insured depository institution which, as of September 13, 
1995, is a savings association (as defined in section 3(b) of the 
Federal Deposit Insurance Act (as in effect on such date)) and after 
such date converts to a national or State bank charter or becomes 
treated as a State bank pursuant to the amendment made by section 
101(b) may continue to engage, directly or indirectly, in any activity 
in which such institution was lawfully engaged as of such date during 
the 2-year period beginning on the effective date of such conversion or 
the effective date of such amendments, as the case may be.
    (b) 2 1-Year Extensions Authorized.--The 2-year period described in 
subsection (a) with respect to any insured depository institution may 
be extended for such institution not to exceed 2 additional times for 
not more than 1 year each time if the appropriate Federal banking 
agency determines that such extension is necessary to avert substantial 
loss to the institution and is otherwise consistent with the safety and 
soundness of the institution.

SEC. 104. REGISTRATION OF BANK HOLDING COMPANIES RESULTING FROM 
              CONVERSIONS OF SAVINGS ASSOCIATIONS TO BANKS OR TREATMENT 
              OF SAVINGS ASSOCIATIONS AS BANKS.

    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 subsections:
    ``(h) Registration of Certain Bank Holding Companies.--A company 
which, as of September 13, 1995, is a savings and loan holding company 
(as defined in section 10(a)(1)(D) of Home Owners' Loan Act (as in 
effect on such date) and is not a bank holding company shall not be 
required to obtain the approval of the Board under subsection (a) to 
become a bank holding company after September 13, 1995, as a result of 
the conversion of any insured depository institution subsidiary of such 
company into a bank or by virtue of the treatment of any insured 
depository institution subsidiary of such company as a bank pursuant to 
the amendments made by the Thrift Charter Conversion Act of 1995, if 
such company--
            ``(1) registers as a bank holding company with the Board in 
        accordance with section 5(a); and
            ``(2) does not acquire, directly or indirectly, ownership 
        or control of any additional insured depository institution or 
        other company in connection with such conversion or treatment.
    ``(i) Regulation of Qualified Bank Holding Companies.--The Board 
shall regulate qualified bank holding companies (as defined in section 
4(k)(2)) in a manner consistent with--
            ``(1) the regulation of such companies by the Director of 
        the Office of Thrift Supervision before the date of the 
        enactment of the Thrift Charter Conversion Act of 1995; and
            ``(2) the safety and soundness of insured depository 
        institution subsidiaries of such companies.''.

SEC. 105. ADDITIONAL TRANSITION PROVISIONS AND SPECIAL RULES.

    (a) Mutual National Banks Authorized; Conversion of Mutual Savings 
Associations Into National Banks.--
            (1) In general.--Chapter one of title LXII of the Revised 
        Statutes of the United States (12 U.S.C. 21 et seq.) is amended 
        by inserting after section 5133 the following new section:

``SEC. 5133A. MUTUAL NATIONAL BANKS.

    ``(a) In General.--Notwithstanding the paragraph designated the 
``Third'' of section 5134, the Comptroller of the Currency may charter 
national banks organized in the mutual form either de novo or through a 
conversion of any stock national or State bank (as defined in section 3 
of the Federal Deposit Insurance Act) or any State mutual bank or 
credit union, subject to regulations prescribed by the Comptroller of 
the Currency in accordance with this section.
    ``(b) Regulations.--
            ``(1) Transition rules.--National banks organized in the 
        mutual form shall be subject to the regulations of the Director 
        of the Office of Thrift Supervision governing corporate 
        organization, governance, and conversion of mutual 
        institutions, as in effect on September 13, 1995, including 
        parts 543, 544, 546, 563b, and 563c of chapter V of title 12 of 
        the Code of Federal Regulations (as in effect on such date), 
        during the 3-year period beginning on the date of the enactment 
        of the Thrift Charter Conversion Act of 1995.
            ``(2) Regulations of the comptroller.--The Comptroller of 
        the Currency shall prescribe appropriate regulations for 
        national banks organized in the mutual form, effective as of 
        the end of the 3-year period referred to in paragraph (1).
            ``(3) Applicability of capital stock requirements.--The 
        Comptroller of the Currency shall prescribe regulations 
        regarding the manner in which requirements of title LXII of the 
        Revised Statutes of the United States with respect to capital 
        stock, and limitations imposed on national banks under such 
        title based on capital stock, shall apply to national banks 
        organized in mutual form pursuant to subsection (a).
    ``(c) Conversions.--
            ``(1) Conversion to stock national bank.--Subject to such 
        regulations as the Comptroller of the Currency may prescribe 
        for the protection of depositors' rights and for any other 
        purpose the Comptroller of the Currency may consider 
        appropriate, any national bank which is organized in mutual 
        form pursuant to paragraph (1) may reorganize as a stock 
        national bank.
            ``(2) Conversions to state banks.--Any national mutual bank 
        may convert to a State bank charter in accordance with 
        regulations prescribed by the Comptroller of the Currency and 
        applicable State law.''.
            (2) Mutual bank holding companies.--Subsection (g) of 
        section 3 of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1842(g)) is amended to read as follows:
    ``(g) Mutual Bank Holding Companies.--
            ``(1) In general.--A national mutual bank may reorganize so 
        as to become a holding company by--
                    ``(A) chartering an interim national bank, the 
                stock of which is to be wholly owned, except as 
                otherwise provided in this section, by the national 
                mutual bank; and
                    ``(B) transferring the substantial part of the 
                national mutual bank's assets and liabilities, 
                including all of the bank's insured liabilities, to the 
                interim national bank.
            ``(2) Directors and certain account holders' approval of 
        plan required.--A reorganization is not authorized under this 
        subsection unless--
                    ``(A) a plan providing for such reorganization has 
                been approved by a majority of the board of directors 
                of the national mutual bank; and
                    ``(B) in the case of a national mutual bank in 
                which holders of accounts and obligors exercise voting 
                rights, such plan has been submitted to and approved by 
                a majority of such individuals at a meeting held at the 
                call of the directors in accordance with the procedures 
                prescribed by the bank's charter and bylaws.
            ``(3) Notice to the board; disapproval period.--
                    ``(A) Notice required.--
                            ``(i) In general.--At least 60 days before 
                        taking any action described in paragraph (1), a 
                        national mutual bank seeking to establish a 
                        mutual holding company shall provide written 
                        notice to the Board.
                            ``(ii) Contents of notice.--The notice 
                        shall contain such relevant information as the 
                        Board shall require by regulation or by 
                        specific request in connection with any 
                        particular notice.
                    ``(B) Transaction allowed if not disapproved.--
                Unless the Board within such 60-day notice period 
                disapproves the proposed holding company formation, or 
                extends for another 30 days the period during which 
                such disapproval may be issued, the national mutual 
                bank providing such notice may proceed with the 
                transaction, if the requirements of paragraph (2) have 
                been met.
                    ``(C) Grounds for disapproval.--The Board may 
                disapprove any proposed holding company formation only 
                if--
                            ``(i) such disapproval is necessary to 
                        prevent unsafe or unsound practices;
                            ``(ii) the financial or management 
                        resources of the national mutual bank involved 
                        warrant disapproval;
                            ``(iii) the national mutual bank fails to 
                        furnish the information required under 
                        subparagraph (A); or
                            ``(iv) the national mutual bank fails to 
                        comply with the requirement of paragraph (2).
                    ``(D) Retention of capital assets.--In connection 
                with the transaction described in paragraph (1), a 
                national mutual bank may, subject to the approval of 
                the Board, retain capital assets at the holding company 
                level to the extent that the capital retained at the 
                holding company is in excess of the amount of capital 
                required in order for the interim national bank to meet 
                all relevant capital standards established by the 
                Comptroller of the Currency for national banks.
            ``(4) Ownership.--
                    ``(A) In general.--Persons having ownership rights 
                in the national mutual bank under section 5133A of the 
                Revised Statutes of the United States (including 
                paragraph 575.5 of chapter V of title 12 of the Code of 
                Federal Regulations, as in effect on September 13, 
                1995, and applicable to national mutual banks pursuant 
to such section) or State law shall have the same ownership rights with 
respect to the mutual holding company.
                    ``(B) Holders of certain accounts.--Holders of 
                savings, demand, or other accounts of--
                            ``(i) a national bank chartered as part of 
                        a transaction described in paragraph (1); or
                            ``(ii) a mutual bank acquired pursuant to 
                        paragraph (5)(B),
                shall have the same ownership rights with respect to 
                the mutual holding company as persons described in 
                subparagraph (A) of this paragraph.
            ``(5) Permitted activities.--A mutual holding company may 
        engage only in the following activities:
                    ``(A) Investing in the stock of a national or State 
                bank.
                    ``(B) Acquiring a mutual bank through the merger of 
                such bank into a national bank subsidiary of such 
                holding company or an interim national bank subsidiary 
                of such holding company.
                    ``(C) Subject to paragraph (6), merging with or 
                acquiring another holding company, one of whose 
                subsidiaries is a national mutual bank.
                    ``(D) Investing in a corporation the capital stock 
                of which is available for purchase by a national mutual 
                bank under Federal law or under the law of any State 
                where the home office of any subsidiary bank is 
                located.
                    ``(E) Engaging in the activities permitted under 
                section 4(c).
            ``(6) Limitations on certain activities of acquired holding 
        companies.--
                    ``(A) New activities.--If a mutual holding company 
                acquires or merges with another holding company under 
                paragraph (5)(C), the holding company acquired or the 
                holding company resulting from such merger or 
                acquisition may only invest in assets and engage in 
                activities which are authorized under paragraph (5).
                    ``(B) Grace period for divesting prohibited assets 
                or discontinuing prohibited activities.--Not later than 
                2 years following a merger or acquisition described in 
                paragraph (5)(C), the acquired holding company or the 
                holding company resulting from such merger or 
                acquisition shall--
                            ``(i) dispose of any asset which is an 
                        asset in which a mutual holding company may not 
                        invest under paragraph (5); and
                            ``(ii) cease any activity which is an 
                        activity in which a mutual holding company may 
                        not engage under paragraph (5).
            ``(7) Chartering and other requirements.--
                    ``(A) In general.--A mutual holding company shall 
                be chartered by the Board and shall be subject to such 
                regulations as the Board may prescribe.
                    ``(B) Other requirements.--Unless the context 
                otherwise requires, a mutual holding company shall be 
                subject to the other requirements of this Act regarding 
                regulation of holding companies.
            ``(8) Capital improvement.--
                    ``(A) Pledge of stock of savings association 
                subsidiary.--This section shall not prohibit a mutual 
                holding company from pledging all or a portion of the 
                stock of a national bank chartered as part of a 
                transaction described in paragraph (1) to raise capital 
                for such bank.
                    ``(B) Issuance of nonvoting shares.--No provision 
                of this Act shall be construed as prohibiting a 
                national bank chartered as part of a transaction 
                described in paragraph (1) from issuing any nonvoting 
                shares or less than 50 percent of the voting shares of 
                such bank to any person other than the mutual holding 
                company.
            ``(9) Insolvency and liquidation.--
                    ``(A) In general.--Notwithstanding any provision of 
                law, upon--
                            ``(i) the default of any national bank--
                                    ``(I) the stock of which is owned 
                                by any mutual holding company; and
                                    ``(II) which was chartered in a 
                                transaction described in paragraph (1);
                            ``(ii) the default of a mutual holding 
                        company; or
                            ``(iii) a foreclosure on a pledge by a 
                        mutual holding company described in paragraph 
                        (8)(A), a trustee shall be appointed receiver 
of such mutual holding company and such trustee shall have the 
authority to liquidate the assets of, and satisfy the liabilities of, 
such mutual holding company pursuant to title 11, United States Code.
                    ``(B) Distribution of net proceeds.--Except as 
                provided in subparagraph (C), the net proceeds of any 
                liquidation of any mutual holding company pursuant to 
                subparagraph (A) shall be transferred to persons who 
                hold ownership interests in such mutual holding 
                company.
                    ``(C) Recovery by corporation.--If the Corporation 
                incurs a loss as a result of the default of any insured 
                depository institution subsidiary of a mutual holding 
                company which is liquidated pursuant to subparagraph 
                (A), the Corporation shall succeed to the ownership 
                interests of the depositors of such depository 
                institution in the mutual holding company, to the 
                extent of the Corporation's loss.
            ``(10) State mutual bank holding company.--
                    ``(A) In general.--Notwithstanding any provision of 
                Federal law, a State bank operating in mutual form may 
                reorganize so as to form a holding company under State 
                law.
                    ``(B) Regulation of state mutual holding company.--
                A corporation organized as a holding company in 
                accordance with subparagraph (A) shall be regulated on 
                the same terms and be subject to the same limitations 
                as any other holding company which controls a bank.
            ``(11) Regulations.--
                    ``(A) Transition rules.--Mutual bank holding 
                companies organized under this subsection shall be 
                subject to the regulations of the Director of the 
                Office of Thrift Supervision governing corporate 
                organization, governance, and conversion of mutual 
                institutions, as in effect on September 13, 1995, 
                including part 575 of chapter V of title 12 of the Code 
                of Federal Regulations (as in effect on such date), 
                during the 3-year period beginning on the date of the 
                enactment of the Thrift Charter Conversion Act of 1995.
                    ``(B) Regulations of the board.--The Board shall 
                prescribe appropriate regulations for mutual holding 
                companies, effective at the end of the 3-year period 
                referred to in subparagraph (A).
            ``(12) No change of control.--Any 2d stage conversion of a 
        mutual holding company to full stock form shall not be deemed 
        to be a change of control if, in connection with such 
        conversion, no company, directly or indirectly, acquires 
        control of such mutual holding company or any successor to such 
        company.
            ``(13) Definitions.--For purposes of this subsection--
                    ``(A) Mutual holding company.--The term `mutual 
                holding company' means a corporation organized as a 
                holding company under this subsection.
                    ``(B) Default.--The term `default' means an 
                adjudication or other official determination of a court 
                of competent jurisdiction or other public authority 
                pursuant to which a conservator, receiver, or other 
                legal custodian is appointed.
                    ``(C) National mutual bank.--The term `national 
                mutual bank' means a national bank organized in mutual 
                form under section 5133A of the Revised Statutes of the 
                United States.''.
            (3) Limitation on federal regulation of state banks.--
        Except as otherwise provided in Federal law, the Comptroller of 
        the Currency, Board of Governors of the Federal Reserve System, 
        and Federal Deposit Insurance Corporation may not adopt or 
        enforce any regulation which contravenes the corporate 
        governance rules prescribed by State law or regulation for 
        State banks unless the Comptroller, Board, or Corporation finds 
        that such Federal regulation is necessary to assure the safety 
        and soundness of such State banks.
            (4) Conversions of mutual savings associations to mutual 
        national banks by operation of law.--Notwithstanding any other 
        provision of Federal or State law, any savings association (as 
        defined in section 3 of the Federal Deposit Insurance Act (as 
        in effect on September 13, 1995)) which is organized in mutual 
        form as of the date of the enactment of this Act may become a 
        national mutual bank by operation of law if the association--
                    (A) files the articles of association and 
                organization certificate with the Comptroller of the 
                Currency before January 1, 1998, in accordance with 
                chapter one of title LXII of the Revised Statutes of 
                the United States; and
                    (B) provides such other document or information as 
                the Comptroller of the Currency may prescribe in 
                regulations consistent with this section and section 
                5133A of the Revised Statutes of the United States (as 
                added by paragraph (1) of this subsection).
    (b) Membership in Federal Home Loan Banks.--Any insured depository 
institution which--
            (1) as of the date of the enactment of this Act, is a 
        Federal savings association which, pursuant to section 6(e) of 
        the Federal Home Loan Bank Act, may not voluntarily withdraw 
        from membership in a Federal home loan bank; and
            (2) after such date converts from a Federal savings 
        association to a national bank,
shall continue to be subject to the prohibition under such section on 
voluntary withdrawal from such membership as though such bank were 
still a Federal savings association until the bank ceases to be a 
national bank.
    (c) Branches.--
            (1) In general.--Notwithstanding any provision of the 
        Federal Deposit Insurance Act, the Bank Holding Company Act of 
        1956, or any other Federal or State law, any depository 
        institution which--
                    (A) as of the date of the enactment of this Act, is 
                a savings association; and
                    (B) becomes a bank before January 1, 1998, or, 
                pursuant to the amendments made by this subsection, is 
                treated as a bank as of such date under the Federal 
                Deposit Insurance Act,
        and any depository institution or bank holding company which 
        acquires such depository institution, may continue, after the 
        depository institution becomes or commences to be treated as a 
        bank, to operate any branch or agency which the savings 
        association was operating as a branch or agency or was in the 
        process of establishing as a branch or agency on September 13, 
        1995.
            (2) No additional branches.--Paragraph (1) shall not be 
        construed as authorizing the establishment, acquisition, or 
        operation of any additional branch of a depository institution, 
        or the conversion of any agency to a branch, in any State by 
        virtue of the operation by such institution of a branch or 
        agency in such State pursuant to such paragraph except to the 
        extent such establishment, acquisition, operation, or 
        conversion is permitted under the Federal Deposit Insurance 
        Act, Bank Holding Company Act of 1956, and any other applicable 
        Federal or State law without regard to such branch or agency.
            (3) Establishing a branch or agency.--For purposes of 
        paragraph (1), a savings association shall be treated as having 
        been in the process of establishing a branch or agency as of 
        September 13, 1995, if, as of such date, the savings 
        association--
                    (A) had received approval from the Director of the 
                Office of Thrift Supervision to establish such branch 
                or agency;
                    (B) had pending with the Director of the Office of 
                Thrift Supervision an application or notice to 
                establish such branch or agency;
                    (C) had a legal and contractual obligation to 
                establish such branch or agency;
                    (D) had received authority from the appropriate 
                Federal banking agency to establish such branch in 
                connection with the assumption of liabilities or an 
                acquisition of an insured depository institution 
                pursuant to subsection (f) or (k) of section 13 of the 
                Federal Deposit Insurance Act or such 408(m) of the 
                National Housing Act (as in effect before the date of 
                the enactment of the Financial Institutions Reform, 
                Recovery, and Enforcement Act of 1989); or
                    (E) in the case of a well capitalized depository 
                institution, is able to demonstrate to the appropriate 
                Federal banking agency that the savings association--
                            (i) had made a significant financial 
                        commitment; and
                            (ii) had taken legally binding action or 
                        incurred a contractual obligation,
                in furtherance of the establishment of such branch or 
                agency.
    (d) Transition Provision Relating to Limitations on Loans to 1 
Borrower.--Section 5200 of the Revised Statutes of the United States 
(12 U.S.C. 84) is amended by adding at the end the following new 
subsection:
    ``(e) Transition Provision for Savings Associations Converting to 
National Banks.--In the case of any depository institution which, as of 
September 13, 1995, is a savings association (as defined in section 
3(b) of the Federal Deposit Insurance Act (as in effect on such date)) 
and becomes a national bank on or before January 1, 1998, any loan, or 
legally binding commitment to make a loan, made or entered into by such 
institution which is outstanding on the date the institution becomes a 
national bank may continue to be held without regard to any limitation 
contained in this section during the 3-year period beginning on such 
date.''.
    (e) Rights and Authority of Banks Resulting From Conversions of 
Savings Associations.--
            (1) In general.--Upon conversion of a savings association 
        to a national or State bank in accordance with this Act and the 
        amendments made by this Act or other provisions of law--
                    (A) the national or State bank shall succeed to all 
                rights, benefits, privileges, powers and franchises, 
                and be subject to all the obligations, duties, 
                restrictions, and disabilities, of such savings 
                association under any contract, agreement, document, or 
                instrument in effect at the time of such conversion to 
                which such savings association was a party; and
                    (B) any reference to the savings association in any 
                such contract, agreement, document, or instrument shall 
                be deemed to be a reference to such national or State 
                bank.
            (2) Treatment of bank or savings association.--If the 
        application of paragraph (1) with respect to any national or 
        State bank referred to in such paragraph would--
                    (A) be inconsistent or in conflict with any 
                contract, agreement, document, or instrument described 
                in such paragraph;
                    (B) constitute a default under the contract, 
                agreement, document, or instrument;
                    (C) cause such national or State bank to be in 
                default or breach under any provision of the contract, 
                agreement, document, or instrument,
        the national or State bank shall be deemed to be, and treated 
        as, a savings association for purposes of the contract, 
        agreement, document, or instrument.
    (f) Transfer and Grandfather of Mutual Holding Companies.--
            (1) Supervision and regulation of mutual holding 
        companies.--
                    (A) In general.--The supervision and regulation of 
                any mutual holding company in existence as of the date 
                of the enactment of this Act is hereby transferred to 
                the Board of Governors of the Federal Reserve System.
                    (B) Transition rules.--Mutual bank holding 
                companies described in subparagraph (A) shall be 
                subject to the regulations of the Director of the 
                Office of Thrift Supervision, as in effect on September 
13, 1995, including part 575 of chapter V of title 12 of the Code of 
Federal Regulations (as in effect on such date), during the 3-year 
period beginning on the date of the enactment of the Thrift Charter 
Conversion Act of 1995.
            (2) Grandfather of existing federal mutual holding 
        companies.--
                    (A) In general.--Any Federal mutual holding company 
                in existence as of the date of the enactment of this 
                Act shall be subject to section 4(k) of the Bank 
                Holding Company Act of 1956 (as added by section 102 of 
                this Act).
                    (B) Treatment under 4(k).--Any treatment of a 
                Federal mutual holding company under section 4(k) shall 
                not be construed as a change in control unless, as a 
                result of the transaction, the holding company no 
                longer controls the entity.

SEC. 106. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Amendments to the Federal Deposit Insurance Act.--
            (1) Section 3(z) of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(z)) is amended by striking ``, the Director of the 
        Office of Thrift Supervision,''.
            (2) Section 8(b) of the Federal Deposit Insurance Act (12 
        U.S.C. 1818(b)) is amended by striking paragraph (9).
            (3) Section 13 of the Federal Deposit Insurance Act (12 
        U.S.C. 1823) is amended by striking subsection (k).
            (4) Subsections (c)(2) and (i)(2) of section 18 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1828) are each 
        amended--
                    (A) in subparagraph (B), by inserting ``and'' after 
                the semicolon;
                    (B) in subparagraph (C), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking subparagraph (D).
            (5) Section 18 of the Federal Deposit Insurance Act (12 
        U.S.C. 1828) is amended by striking subsection (m).
            (6) The Federal Deposit Insurance Act (12 U.S.C. 1811 et 
        seq.) is amended by striking section 28.
    (b) Amendments to the Bank Holding Company Act of 1956.--
            (1) Section 2 of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1841) is amended by striking subsections (i) and (j).
            (2) Section 4(c)(8) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843(c)(8)) is amended by striking the sentence 
        preceding the penultimate sentence.
            (3) Section 4(f) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843(f)) is amended--
                    (A) in paragraph (2)(A)(i), by striking ``or an 
                insured institution'' and all that follows through ``of 
                this subsection)'';
                    (B) in paragraph (2)(A)(ii)--
                            (i) by striking ``or a savings 
                        association'' where such term appears in the 
                        portion of such paragraph which precedes 
                        subclause (I);
                            (ii) by inserting ``and'' at the end of 
                        subclause (VI);
                            (iii) by striking subclauses (VIII), (IX), 
                        and (X); and
                            (iv) by striking ``(V), and (VIII)'', where 
                        such term appears in the portion of such 
                        paragraph which appears after the end of 
                        subclause (VII), and inserting ``and (V)''; and
                    (C) by striking paragraphs (10), (11), (12), and 
                (13).
            (4) Section 4(i) of the Bank Holding Company Act of 1956 
        (12 U.S.C. 1843(i)) is amended--
                    (A) by striking paragraphs (1) and (2); and
                    (B) in paragraph (3)(A), by striking ``any Federal 
                savings association'' and all that follows through the 
                period at the end of such paragraph and inserting 
                ``such association was authorized to engage under this 
                section as of September 15, 1995.''.
    (c) Other Technical and Conforming Amendments.--
            (1) Section 804(a) of the Alternative Mortgage Transaction 
        Parity Act of 1982 (12 U.S.C. 3803) is amended--
                    (A) in the portion of such subsection which 
                precedes paragraph (1)--
                            (i) by striking ``, and other nonfederally 
                        chartered housing creditors,''; and
                            (ii) by inserting ``and in order to permit 
                        other nonfederally chartered housing creditors 
                        to make, purchase, and enforce alternative 
                        mortgage transactions,'' after ``enforcing 
                        alternative mortgage transactions, ''; and
                    (B) in paragraph (1), by inserting ``(as such term 
                is defined in section 3(a) of the Federal Deposit 
                Insurance Act)'' after ``with respect to banks''.
            (2) Section 205 of the Depository Institution Management 
        Interlocks Act (12 U.S.C. 3204) is amended--
                    (A) in the portion of paragraph (8)(A) which 
                precedes clause (i), by striking ``diversified 
                savings'' and all that follows through ``with respect 
                to'' and inserting ``depository institution holding 
                company which, as of September 13, 1995, and at all 
                times thereafter, satisfies the consolidated net worth 
                and consolidated net earnings requirements for a 
                diversified savings and loan holding company (as set 
                forth in section 10(1)(F) of Home Owners' Loan Act, as 
                such section is in effect on such date, and in 
                regulations in effect on such date, which shall be 
                applicable for purposes of this paragraph without 
                regard to the fact that a depository institution 
                subsidiary of such holding company has ceased to be a 
                savings association after September 13, 1995) with 
                respect to''; and
                    (B) by striking paragraph (9).
            (3) Section 19(b)(1)(A) of the Federal Reserve Act (12 
        U.S.C. 461(b)(1)(A)) is amended--
                    (A) by inserting ``and'' after the semicolon at the 
                end of clause (v); and
                    (B) by striking clause (vi).
            (4) Subparagraphs (A), (B), and (C) of section 10(e)(5) of 
        the Federal Home Loan Bank Act (12 U.S.C. 1430(e)(5)) are each 
        amended by inserting before the period at the end ``(as such 
        section is in effect on September 13, 1995)''.

SEC. 107. REFERENCES TO SAVINGS ASSOCIATIONS AND STATE BANKS IN FEDERAL 
              LAW.

    Effective January 1, 1998, any reference in any Federal banking law 
to--
            (1) the term ``savings association'' shall be deemed to be 
        a reference to a bank as defined in section 3(a) of the Federal 
        Deposit Insurance Act; and
            (2) the term ``State bank'' shall be deemed to include any 
        depository institution included in the definition of such term 
        in section 3(a)(2) of such Act.

SEC. 108. REPEAL OF HOME OWNERS' LOAN ACT.

    Effective January 1, 1998, the Home Owners' Loan Act (12 U.S.C. 
1461 et seq.) is hereby repealed.

SEC. 109. EFFECTIVE DATE; DEFINITIONS.

    (a) Effective Date.--The amendments made by this title shall take 
effect on January 1, 1998.
    (b) Definitions.--For purposes of this title, the terms 
``appropriate Federal banking agency'', ``bank holding company'', 
``depository institution'', ``Federal savings association'', ``insured 
depository institution'', ``savings association'', and ``State bank'' 
have the same meanings as in section 3 of the Federal Deposit Insurance 
Act (as in effect on the date of the enactment of this Act).

        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

SEC. 201. OFFICE OF THRIFT SUPERVISION ABOLISHED.

    Effective January 1, 1998, the Office of Thrift Supervision and the 
position of Director of the Office of Thrift Supervision are hereby 
abolished.

SEC. 202. DETERMINATION OF TRANSFERRED FUNCTIONS AND EMPLOYEES.

    (a) All Office of Thrift Supervision Employees Shall Be 
Transferred.--All employees of the Office of Thrift Supervision shall 
be identified for transfer under subsection (b) to the Office of the 
Comptroller of the Currency, the Federal Deposit Insurance Corporation, 
or the Board of Governors of the Federal Reserve System.
    (b) Functions and Employees Transferred.--
            (1) In general.--The Director of the Office of Thrift 
        Supervision, the Comptroller of the Currency, the Chairperson 
        of the Federal Deposit Insurance Corporation, and the Chairman 
        of the Board of Governors of the Federal Reserve System shall 
        jointly determine the functions or activities of the Office of 
        Thrift Supervision, and the number of employees of such Office 
        necessary to perform or support such functions or activities, 
        which are transferred from the Office to the Office of the 
        Comptroller of the Currency, the Federal Deposit Insurance 
        Corporation, or the Board of Governors of the Federal Reserve 
        System, as the case may be.
            (2) Allocation of employees.--The Comptroller of the 
        Currency, the Chairperson of the Federal Deposit Insurance 
        Corporation, and the Chairman of the Board of Governors of the 
        Federal Reserve System shall allocate the employees of the 
        Office of Thrift Supervision consistent with the number 
        determined pursuant to paragraph (1) in a manner which such 
        Comptroller, Chairperson, and Chairman, in their sole 
        discretion, deem equitable, except that, within work units, the 
        agency preferences of individual employees shall be 
        accommodated as far as possible.
    (c) Disposition of Affairs.--
            (1) In general.--In winding up the affairs of the Office of 
        Thrift Supervision, the Director of the Office of Thrift 
        Supervision shall consult and cooperate with the Comptroller of 
        the Currency, the Federal Deposit Insurance Corporation, and 
        the Board of Governors of the Federal Reserve System, as the 
        case may be, to facilitate the orderly transfer of the 
        functions to such Comptroller, Corporation, or Board.
            (2) Continuing authority of director of the office of 
        thrift supervision.--Except as provided in paragraph (1), no 
        provision of this subtitle shall be construed as affecting the 
        authority vested in the Director of the Office of Thrift 
        Supervision before the date of enactment of this Act which is 
        necessary to carry out the duties of the position until the 
date upon which the position of Director of the Office of Thrift 
Supervision is abolished.
            (3) Continuation of agency services.--Any agency, 
        department, or other instrumentality of the United States, or 
        any successor to any such agency, department, or 
        instrumentality, which was providing support services to the 
        Director of the Office of Thrift Supervision on the day before 
        the date such position is abolished shall--
                    (A) continue to provide such services on a 
                reimbursable basis, in accordance with the terms of the 
                arrangement pursuant to which such services were 
                provided until the arrangement is modified or 
                terminated in accordance with such terms, except that 
                effective January 1, 1998, the Comptroller of the 
                Currency, the Federal Deposit Insurance Corporation, or 
                the Board of Governors of the Federal Reserve System, 
                as the case may be, shall be substituted for the 
                Director of the Office of Thrift Supervision as a party 
                to the arrangement; and
                    (B) consult with the Comptroller, the Corporation, 
                or the Board to coordinate and facilitate a prompt and 
                reasonable transition.
    (d) Transfer of Property.--Effective January 1, 1998, all property 
of the Office of Thrift Supervision shall be transferred to the 
Comptroller of the Currency, the Federal Deposit Insurance Corporation, 
or the Board of Governors of the Federal Reserve System, as determined 
in accordance with subsections (a) and (b).

SEC. 203. SAVINGS PROVISIONS.

    (a) Existing Rights, Duties, and Obligations Not Affected.--No 
provision of this title shall be construed as affecting the validity of 
any right, duty, or obligation of the United States, the Director of 
the Office of Thrift Supervision, or any person, which existed on the 
day before the date upon which the position of Director of the Office 
of Thrift Supervision and the Office of Thrift Supervision are 
abolished.
    (b) Continuation of Suits.--No action or other proceeding commenced 
by or against the Director of the Office of Thrift Supervision shall 
abate by reason of enactment of this Act, except that, effective 
January 1, 1998, the Comptroller of the Currency, the Federal Deposit 
Insurance Corporation, or the Board of Governors of the Federal Reserve 
System, as the case may be, shall be substituted as a party to any such 
action or proceeding.
    (c) Continuation of Administrative Rules.--All orders, resolutions, 
determinations, regulations, interpretative rules, other 
interpretations, guidelines, procedures, supervisory and enforcement 
actions, and other advisory material (other than any regulation 
implementing or prescribed pursuant to section 3(f) of the Home Owners' 
Loan Act (as in effect on September 13, 1995)) which--
            (1) have been issued, made, prescribed, or permitted to 
        become effective by the Office of Thrift Supervision, and
            (2) are in effect on December 31, 1997 (or become effective 
        after such date pursuant to the terms of the order, resolution, 
        determination, rule, other interpretation, guideline, 
        procedure, supervisory or enforcement action, and other 
        advisory material, as in effect on such date), shall--
                    (A) continue in effect according to the terms of 
                such orders, resolutions, determinations, regulations, 
                interpretative rules, other interpretations, 
                guidelines, procedures, supervisory or enforcement 
                actions, or other advisory material;
                    (B) be administered by the Comptroller of the 
                Currency, the Federal Deposit Insurance Corporation, or 
                the Board of Governors of the Federal Reserve System; 
                and
                    (C) be enforceable by or against the Comptroller of 
                the Currency, the Federal Deposit Insurance 
                Corporation, or the Board of Governors of the Federal 
                Reserve System until modified, terminated, set aside, 
                or superseded in accordance with applicable law by the 
                Comptroller, Corporation, or Board, by any court of 
                competent jurisdiction, or by operation of law.
    (d) Treatment of References in Adjustable Rate Mortgages Issued 
Before FIRREA.--
            (1) References in prior law.--For purposes of section 
        402(e) of Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (12 U.S.C. 1437 note), any reference in 
        such section to--
                    (A) the Director of the Office of Thrift 
                Supervision shall be deemed to be a reference to the 
                Secretary of the Treasury; and
                    (B) a Savings Association Insurance Fund member 
                shall be deemed to be a reference to an insured 
                depository institution (as defined in section 3 of the 
                Federal Deposit Insurance Act).
    (e) Treatment of References in Adjustable Rate Mortgage Instruments 
Issued After FIRREA.--
            (1) In general.--For purposes of adjustable rate mortgage 
        instruments that are in effect as of the date of enactment of 
        this Act, any reference in the instrument to the Director of 
        the Office of Thrift Supervision or Savings Association 
        Insurance Fund members shall be treated as a reference to the 
        Secretary of the Treasury or insured depository institutions 
        (as defined in section 3 of the Federal Deposit Insurance Act), 
        as appropriate.
            (2) Substitution for indexes.--If any index used to 
        calculate the applicable interest rate on any adjustable rate 
        mortgage instrument is no longer calculated and made available 
        as a direct or indirect result of the enactment of this Act, 
        any index--
                    (A) made available by the Secretary of the 
                Treasury; or
                    (B) determined by the Secretary of the Treasury, 
                pursuant to paragraph (4), to be substantially similar 
                to the index which is no longer calculated or made 
                available,
        may be substituted by the holder of any such adjustable rate 
        mortgage instrument upon notice to the borrower.
            (3) Agency action required to provide continued 
        availability of indexes.--Promptly after the enactment of this 
subsection, the Secretary of the Treasury, the Chairperson of the 
Federal Deposit Insurance Corporation, and the Comptroller of the 
Currency shall take such action as may be necessary to assure that the 
indexes prepared by the Director of the Office of Thrift Supervision 
immediately before the enactment of this subsection and used to 
calculate the interest rate on adjustable rate mortgage instruments 
continue to be available.
            (4) Requirements relating to substitute indexes.--If any 
        agency can no longer make available an index pursuant to 
        paragraph (3), an index that is substantially similar to such 
        index may be substituted for such index for purposes of 
        paragraph (2) if the Secretary of the Treasury determines, 
        after notice and opportunity for comment, that--
                    (A) the new index is based upon data substantially 
                similar to that of the original index; and
                    (B) the substitution of the new index will result 
                in an interest rate substantially similar to the rate 
                in effect at the time the original index became 
                unavailable.

SEC. 204. COST OF FUNDS INDEXES.

    (a) Cost of Funds Index Defined.--The term ``cost of funds index'' 
means any index that is published by a Federal home loan bank and is 
based, in whole or in part, upon the cost of funds of such bank's 
members.
    (b) Calculations Based on Type of Charter and Insurance Fund 
Membership of Members.--If any cost of funds index includes data based 
on charter type, insurance fund membership, or other similar 
characteristics of members of a Federal home loan bank, such index 
shall be calculated after the date of the enactment of this Act using 
data only from insured depository institutions which were bank members 
and whose data was included in such index on or before such date of 
enactment.
    (c) Acquisition of Data.--
            (1) In general.--Each insured depository institution the 
        data from which is required to compile a cost of funds index in 
        accordance with subsection (b) shall provide to the Federal 
        home loan bank which maintains the index such information as 
        may be necessary, and in such form as may be appropriate, for 
        the bank to calculate and publish the index.
            (2) Enforcement by banking agencies.--Each appropriate 
        Federal banking agency shall take such action as may be 
        necessary to ensure that insured depository institutions which 
        are required to provide information to any Federal home loan 
        bank under paragraph (1) furnish such information on a timely 
        basis and in the form required by the bank.
            (3) Treatment of institutions.--Notwithstanding any other 
        provision of law, an insured depository institution which 
        furnishes information to a Federal home loan bank pursuant to 
        this section for use in compiling a cost of funds index shall 
        not be deemed to control, directly or indirectly, such index.
    (d) Certain Data Excluded.--Notwithstanding subsections (b) and 
(c), no cost of funds index shall include any data from any insured 
depository institution which results from the merger, consolidation, or 
other combination of a member of a Federal home loan bank with a 
nonmember of any such bank if--
            (1) the total assets of the nonmember exceed the total 
        assets of the bank member at the time of such merger, 
        consolidation, or other combination; or
            (2) in the case of a merger, consolidation, or other merger 
        in which a member of a Federal home loan bank is the resulting 
        insured depository institution, the combined ratio of the 
        average amount of single-family loan balances to average total 
        assets of all insured depository institutions involved in such 
        merger, consolidation, or other combination for the 12-month 
        period ending on the date of such transaction is less than 70 
        percent.
    (e) Other Definitions.--For purposes of this section, the terms 
``appropriate Federal banking agency'' and ``insured depository 
institution'' have the same meanings as in section 3 of the Federal 
Deposit Insurance Act.

SEC. 205. REFERENCES IN FEDERAL LAW TO DIRECTOR OF THE OFFICE OF THRIFT 
              SUPERVISION.

    Effective January 1, 1998, any reference in any Federal law to the 
Director of the Office of Thrift Supervision or the Office of Thrift 
Supervision shall be deemed to be a reference to the appropriate 
Federal banking agency (as defined in section 3(q) of the Federal 
Deposit Insurance Act).

SEC. 206. RECONFIGURATION OF BOARD OF DIRECTORS OF FDIC AS A RESULT OF 
              REMOVAL OF DIRECTOR OF THE OFFICE OF THRIFT SUPERVISION.

    (a) In General.--Section 2(a)(1) of the Federal Deposit Insurance 
Act (12 U.S.C. 1812(a)(1)) is amended to read as follows:
            ``(1) In general.--The management of the Corporation shall 
        be vested in a Board of Directors consisting of 5 members--
                    ``(A) 1 of whom shall be the Comptroller of the 
                Currency; and
                    ``(B) 4 of whom shall be appointed by the 
                President, by and with the advice and consent of the 
                Senate, from among individuals who are citizens of the 
                United States, 1 of whom shall have State bank 
                supervisory experience.''.
    (b) Technical and Conforming Amendments.--
            (1) Section 2(d)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1812(d)(2)) is amended--
                    (A) by striking ``or the office of Director of the 
                Office of Thrift Supervision'';
                    (B) by striking ``or such Director'';
                    (C) by striking ``or the Acting Director of the 
                Office of Thrift Supervision, as the case may be''; and
                    (D) by striking ``or Director''.
            (2) Section 2(f)(2) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1812(f)(2)) is amended by striking ``or of the 
        Office of Thrift Supervision''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall take effect on January 1, 1998.

                  TITLE III--PRIVATE DEPOSIT INSURANCE

SEC. 301. DEPOSIT INSURANCE STUDY.

    (a) In General.--The Secretary of the Treasury shall conduct a 
study of the feasibility of converting the Federal Deposit Insurance 
Corporation (hereafter in this section referred to as the 
``Corporation'') into a self-funded deposit insurance system.
    (b) Contents.--The study required by subsection (a) shall examine 
and evaluate the following:
            (1) Savings or costs to the Federal Government if the 
        Corporation becomes self-funded and operates independently of 
        the Federal Government.
            (2) The time necessary to convert the Corporation to a 
        self-funded entity and factors that would affect the timing of 
        such a conversion.
            (3) The composition of the administrative body of a self-
        funded deposit insurance system.
            (4) The appropriate level of insurance to protect small 
        depositors.
            (5) Re-insurance.
            (6) The feasibility of more than one of such entities 
        existing.
            (7) The ``too big to fail'' doctrine and the appropriate 
        role of deposit insurance, if any, in covering systemic risk.
            (8) Industry capital necessary to a self-funding deposit 
        insurance fund.
            (9) Supervision of financial institutions by the Federal 
        banking supervisory agencies, consistent with early 
        intervention and prompt corrective action provisions of the 
        Federal Deposit Insurance Act.
            (10) The effect of a self-funded deposit insurance system 
        on the supervision of financial institutions.
            (11) Increased risks, if any, to the payment system from a 
        self-funded system.
            (12) The type of financial institutions whose liabilities 
        should be covered by deposit insurance.
            (13) The projected effect such a fund could have on 
        consumers and consumer protection laws.
    (c) Consultation.--In conducting the study required by this 
section, the Secretary of the Treasury shall consult with--
            (1) the Board of Governors of the Federal Reserve System:
            (2) the Office of the Comptroller of the Currency:
            (3) the National Credit Union Administration:
            (4) the Office of Management and Budget;
            (5) the Federal Deposit Insurance Corporation;
            (6) individuals from the private sector with expertise in 
        deposit insurance; and
            (7) individuals from the financial services industry.
    (d) Report to the Congress.--Not later than 18 months after the 
date of the enactment of this Act, the Secretary shall submit to the 
Congress a report containing a detailed statement of findings made and 
conclusions drawn from the study conducted under this section, 
including such recommendations for administrative and legislative 
action as the Secretary determines to be appropriate.
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              S 1415 IS----2
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