[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3116 Enrolled Bill (ENR)]

        H.R.3116

                       One Hundred Fifth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-
                                  eight


                                 An Act


 
  To address the Year 2000 computer problems with regard to financial 
institutions, to extend examination parity to the Director of the Office 
of Thrift Supervision and the National Credit Union Administration, 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 ``Examination Parity and Year 2000 
Readiness for Financial Institutions Act''.

SEC. 2. YEAR 2000 READINESS FOR FINANCIAL INSTITUTIONS.

    (a) Findings.--The Congress finds that--
        (1) the Year 2000 computer problem poses a serious challenge to 
    the American economy, including the Nation's banking and financial 
    services industries;
        (2) thousands of banks, savings associations, and credit unions 
    rely heavily on internal information technology and computer 
    systems, as well as outside service providers, for mission-critical 
    functions, such as check clearing, direct deposit, accounting, 
    automated teller machine networks, credit card processing, and data 
    exchanges with domestic and international borrowers, customers, and 
    other financial institutions; and
        (3) Federal financial regulatory agencies must have sufficient 
    examination authority to ensure that the safety and soundness of 
    the Nation's financial institutions will not be at risk.
    (b) Definitions.--For purposes of this section--
        (1) the terms ``depository institution'' and ``Federal banking 
    agency'' have the same meanings as in section 3 of the Federal 
    Deposit Insurance Act;
        (2) the term ``Federal home loan bank'' has the same meaning as 
    in section 2 of the Federal Home Loan Bank Act;
        (3) the term ``Federal reserve bank'' means a reserve bank 
    established under the Federal Reserve Act;
        (4) the term ``insured credit union'' has the same meaning as 
    in section 101 of the Federal Credit Union Act; and
        (5) the term ``Year 2000 computer problem'' means, with respect 
    to information technology, any problem which prevents such 
    technology from accurately processing, calculating, comparing, or 
    sequencing date or time data--
            (A) from, into, or between--
                (i) the 20th and 21st centuries; or
                (ii) the years 1999 and 2000; or
            (B) with regard to leap year calculations.
    (c) Seminars and Model Approaches to Year 2000 Computer Problem.--
        (1) Seminars.--
            (A) In general.--Each Federal banking agency and the 
        National Credit Union Administration Board shall offer seminars 
        to all depository institutions and insured credit unions under 
        the jurisdiction of such agency on the implication of the Year 
        2000 computer problem for--
                (i) the safe and sound operations of such depository 
            institutions and credit unions; and
                (ii) transactions with other financial institutions, 
            including Federal reserve banks and Federal home loan 
            banks.
            (B) Content and schedule.--The content and schedule of 
        seminars offered pursuant to subparagraph (A) shall be 
        determined by each Federal banking agency and the National 
        Credit Union Administration Board taking into account the 
        resources and examination priorities of such agency.
        (2) Model approaches.--
            (A) In general.--Each Federal banking agency and the 
        National Credit Union Administration Board shall make available 
        to each depository institution and insured credit union under 
        the jurisdiction of such agency model approaches to common Year 
        2000 computer problems, such as model approaches with regard to 
        project management, vendor contracts, testing regimes, and 
        business continuity planning.
            (B) Variety of approaches.--In developing model approaches 
        to the Year 2000 computer problem pursuant to subparagraph (A), 
        each Federal banking agency and the National Credit Union 
        Administration Board shall take into account the need to 
        develop a variety of approaches to correspond to the variety of 
        depository institutions or credit unions within the 
        jurisdiction of the agency.
        (3) Cooperation.--In carrying out this section, the Federal 
    banking agencies and the National Credit Union Administration Board 
    may cooperate and coordinate their activities with each other, the 
    Financial Institutions Examination Council, and appropriate 
    organizations representing depository institutions and credit 
    unions.

SEC. 3. REGULATION AND EXAMINATION OF SERVICE PROVIDERS.

    (a) Regulation and Examination of Savings Association Service 
Companies.--
        (1) Amendment to home owners' loan act.--Section 5(d) of the 
    Home Owners' Loan Act (12 U.S.C. 1464(d)) is amended by adding at 
    the end the following:
        ``(7) Regulation and examination of savings association service 
    companies, subsidiaries, and service providers.--
            ``(A) General examination and regulatory authority.--A 
        service company or subsidiary that is owned in whole or in part 
        by a savings association shall be subject to examination and 
        regulation by the Director to the same extent as that savings 
        association.
            ``(B) Examination by other banking agencies.--The Director 
        may authorize any other Federal banking agency that supervises 
        any other owner of part of the service company or subsidiary to 
        perform an examination described in subparagraph (A).
            ``(C) Applicability of section 8 of the federal deposit 
        insurance act.--A service company or subsidiary that is owned 
        in whole or in part by a saving association shall be subject to 
        the provisions of section 8 of the Federal Deposit Insurance 
        Act as if the service company or subsidiary were an insured 
        depository institution. In any such case, the Director shall be 
        deemed to be the appropriate Federal banking agency, pursuant 
        to section 3(q) of the Federal Deposit Insurance Act.
            ``(D) Service performed by contract or otherwise.--
        Notwithstanding subparagraph (A), if a savings association, a 
        subsidiary thereof, or any savings and loan affiliate or 
        entity, as identified by section 8(b)(9) of the Federal Deposit 
        Insurance Act, that is regularly examined or subject to 
        examination by the Director, causes to be performed for itself, 
        by contract or otherwise, any service authorized under this Act 
        or, in the case of a State savings association, any applicable 
        State law, whether on or off its premises--
                ``(i) such performance shall be subject to regulation 
            and examination by the Director to the same extent as if 
            such services were being performed by the savings 
            association on its own premises; and
                ``(ii) the savings association shall notify the 
            Director of the existence of the service relationship not 
            later than 30 days after the earlier of--

                    ``(I) the date on which the contract is entered 
                into; or
                    ``(II) the date on which the performance of the 
                service is initiated.

            ``(E) Administration by the director.--The Director may 
        issue such regulations and orders, including those issued 
        pursuant to section 8 of the Federal Deposit Insurance Act, as 
        may be necessary to enable the Director to administer and carry 
        out this paragraph and to prevent evasion of this paragraph.
        ``(8) Definitions.--For purposes of this section--
            ``(A) the term `service company' means--
                ``(i) any corporation--

                    ``(I) that is organized to perform services 
                authorized by this Act or, in the case of a corporation 
                owned in part by a State savings association, 
                authorized by applicable State law; and
                    ``(II) all of the capital stock of which is owned 
                by 1 or more insured savings associations; and

                ``(ii) any limited liability company--

                    ``(I) that is organized to perform services 
                authorized by this Act or, in the case of a company, 1 
                of the members of which is a State savings association, 
                authorized by applicable State law; and
                    ``(II) all of the members of which are 1 or more 
                insured savings associations;

            ``(B) the term `limited liability company' means any 
        company, partnership, trust, or similar business entity 
        organized under the law of a State (as defined in section 3 of 
        the Federal Deposit Insurance Act) that provides that a member 
        or manager of such company is not personally liable for a debt, 
        obligation, or liability of the company solely by reason of 
        being, or acting as, a member or manager of such company; and
            ``(C) the terms `State savings association' and 
        `subsidiary' have the same meanings as in section 3 of the 
        Federal Deposit Insurance Act.''.
        (2) Conforming amendments to section 8 of the federal deposit 
    insurance act.--Section 8 of the Federal Deposit Insurance Act (12 
    U.S.C. 1818) is amended--
            (A) in subsection (b)(9), by striking ``to any service 
        corporation of a savings association and to any subsidiary of 
        such service corporation'';
            (B) in subsection (e)(7)(A)(ii), by striking ``(b)(8)'' and 
        inserting ``(b)(9)''; and
            (C) in subsection (j)(2), by striking ``(b)(8)'' and 
        inserting ``(b)(9)''.
    (b) Regulation and Examination of Service Providers for Credit 
Unions.--Title II of the Federal Credit Union Act (12 U.S.C. 1781 et 
seq.) is amended by inserting after section 206 the following new 
section:

``SEC. 206A. REGULATION AND EXAMINATION OF CREDIT UNION ORGANIZATIONS 
              AND SERVICE PROVIDERS.

    ``(a) Regulation and Examination of Credit Union Organizations.--
        ``(1) General examination and regulatory authority.--A credit 
    union organization shall be subject to examination and regulation 
    by the Board to the same extent as that insured credit union.
        ``(2) Examination by other banking agencies.--The Board may 
    authorize to make an examination of a credit union organization in 
    accordance with paragraph (1)--
            ``(A) any Federal regulator agency that supervises any 
        activity of a credit union organization; or
            ``(B) any Federal banking agency that supervises any other 
        person who maintains an ownership interest in a credit union 
        organization.
    ``(b) Applicability of Section 206.--A credit union organization 
shall be subject to the provisions of section 206 as if the credit 
union organization were an insured credit union.
    ``(c) Service Performed by Contract or Otherwise.--Notwithstanding 
subsection (a), if an insured credit union or a credit union 
organization that is regularly examined or subject to examination by 
the Board, causes to be performed for itself, by contract or otherwise, 
any service authorized under this Act, or in the case of a State credit 
union, any applicable State law, whether on or off its premises--
        ``(1) such performance shall be subject to regulation and 
    examination by the Board to the same extent as if such services 
    were being performed by the insured credit union or credit union 
    organization itself on its own premises; and
        ``(2) the insured credit union or credit union organization 
    shall notify the Board of the existence of the service relationship 
    not later than 30 days after the earlier of--
            ``(A) the date on which the contract is entered into; or
            ``(B) the date on which the performance of the service is 
        initiated.
    ``(d) Administration by the Board.--The Board may issue such 
regulations and orders as may be necessary to enable the Board to 
administer and carry out this section and to prevent evasion of this 
section.
    ``(e) Definitions.--For purposes of this section--
        ``(1) the term `credit union organization' means any entity 
    that--
            ``(A) is not a credit union;
            ``(B) is an entity in which an insured credit union may 
        lawfully hold an ownership interest or investment; and
            ``(C) is owned in whole or in part by an insured credit 
        union; and
        ``(2) the term `Federal banking agency' has the same meaning as 
    in section 3 of the Federal Deposit Insurance Act.
    ``(f) Expiration of Authority.--This section and all powers and 
authority of the Board under this section shall cease to be effective 
as of December 31, 2001.''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.