[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3116 Reported in House (RH)]






                                                 Union Calendar No. 238
105th CONGRESS
  2d Session
                                H. R. 3116

                          [Report No. 105-417]

  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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 28, 1998

  Mr. Leach (for himself, Mr. Castle, Mr. Bachus, Mr. Baker, and Mrs. 
   Roukema) introduced the following bill; which was referred to the 
              Committee on Banking and Financial Services

                           February 24, 1998

               Additional sponsor: Mr. Lazio of New York

                           February 24, 1998

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on January 
                               28, 1998]

_______________________________________________________________________

                                 A BILL


 
  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; DEFINITION.

    (a) Short Title.--This Act may be cited as the ``Examination Parity 
and Year 2000 Readiness for Financial Institutions Act''.
    (b) Year 2000 Computer Problem Defined.--For purposes of this Act, 
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--
            (1) from, into, or between--
                    (A) the 20th and 21st centuries; or
                    (B) the years 1999 and 2000; or
            (2) with regard to leap year calculations.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (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.
            (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.

SEC. 3. SEMINARS AND MODEL APPROACHES TO YEAR 2000 COMPUTER PROBLEM.

    (a) Seminars.--
            (1) In general.--Each Federal banking agency and the 
        National Credit Union Administration Board shall offer seminars 
        to all depository institutions and credit unions under the 
        jurisdiction of such agency on the implication of the Year 2000 
        computer problem for--
                    (A) the safe and sound operations of such 
                depository institutions and credit unions; and
                    (B) transactions with other financial institutions, 
                including Federal reserve banks and Federal home loan 
                banks.
            (2) Content and schedule.--The content and schedule of 
        seminars offered pursuant to paragraph (1) 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.
    (b) Model Approaches.--
            (1) In general.--Each Federal banking agency and the 
        National Credit Union Administration Board shall make available 
        to all depository institutions and credit unions 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.
            (2) Variety of approaches.--In developing model approaches 
        to the Year 2000 computer problem pursuant to paragraph (1), 
        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.
    (c) Cooperation.--In carrying out this section, the Federal banking 
agencies and the National Credit Union Administration Board may 
cooperate and coordinate activities with each other, the Financial 
Institutions Examination Council, and appropriate organizations 
representing depository institutions or credit unions.
    (d) Federal Banking Agency Defined.--For purposes of this section, 
the term ``Federal banking agency'' has the meaning given to such term 
in section 3(z) of the Federal Deposit Insurance Act.

SEC. 4. REGULATION AND EXAMINATION OF SERVICE CORPORATIONS CONTROLLED 
              BY SAVINGS ASSOCIATIONS AND SERVICE PROVIDERS.

    Section 5(d) of the Home Owners' Loan Act (12 U.S.C. 1464(d)) is 
amended by adding at the end the following new paragraph:
            ``(7) Regulation and examination of service corporations, 
        subsidiaries, and service providers.--
                    ``(A) General examination and regulatory 
                authority.--
                            ``(i) In general.--A service corporation 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 such savings association.
                            ``(ii) Examination by other banking 
                        agencies.--The Director may authorize any other 
                        Federal banking agency that supervises any 
                        other person who maintains an ownership 
                        interest in the service corporation or 
                        subsidiary to make an examination of the 
                        corporation or subsidiary for purposes of 
                        clause (i).
                    ``(B) Applicability of section 8 of the federal 
                deposit insurance act.--
                            ``(i) In general.--A service corporation or 
                        subsidiary that is owned in whole or in part by 
                        a savings association shall be subject to the 
                        provisions of section 8 of the Federal Deposit 
                        Insurance Act as if the service corporation or 
                        subsidiary were an insured depository 
                        institution.
                            ``(ii) Appropriate federal banking 
                        agency.--For purposes of clause (i), the 
                        Director shall be the appropriate Federal 
                        banking agency with regard to a service 
                        corporation or subsidiary described in such 
                        clause.
                    ``(C) Service performed by contract or otherwise.--
                Notwithstanding subparagraph (A), if a savings 
                association or subsidiary, or any savings and loan 
                holding company, affiliate, or entity referred to in 
                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 services authorized under 
                this Act or 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 itself on 
                        its own premises; and
                            ``(ii) the savings association, service 
                        corporation, subsidiary, holding company, 
                        affiliate, or entity shall notify the Director 
                        of the existence of the service relationship 
                        before the end of the 30-day period beginning 
                        on 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.
                    ``(D) Administration by the director.--The Director 
                may prescribe such regulations and issue such orders, 
                including regulations prescribed or orders issued 
                pursuant to section 8 of the Federal Deposit Insurance 
                Act, as may be necessary to enable the Director to 
                administer and carry out the purposes of this paragraph 
                and prevent evasions of this paragraph.''.

SEC. 5. REGULATION AND EXAMINATION OF CREDIT UNION ORGANIZATIONS AND 
              SERVICE PROVIDERS.

    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) General Examination and Regulatory Authority.--
            ``(1) In general.--A credit union organization shall be 
        subject to examination and regulation by the Board to the same 
        extent as an insured credit union.
            ``(2) Examination by other federal agencies.--The Board may 
        authorize--
                    ``(A) any Federal regulatory agency that supervises 
                any activity of a credit union organization; or
                    ``(B) any Federal banking agency (as defined in 
                section 3(z) of the Federal Deposit Insurance Act) that 
                supervises any other person who maintains an ownership 
                interest in a credit union organization,
        to make an examination of the credit union organization for 
        purposes of paragraph (1).
            ``(3) Credit union organization defined.--For purposes of 
        this section, 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.
    ``(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 services authorized under this Act or any applicable State law, 
whether on or off its premises--
            ``(1) the performance of such services 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 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 before the end of the 30-day period beginning on 
        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 prescribe such 
regulations and issue such orders as may be necessary to enable the 
Board to administer and carry out the purposes of this section and 
prevent evasions of this section.
    ``(e) Expiration of Authority.--This section, and all power and 
authority of the Board under this section, shall cease to be effective 
as of December 31, 2001.''.
                                     





                                                 Union Calendar No. 238

105th CONGRESS

  2d Session

                               H. R. 3116

                          [Report No. 105-417]

_______________________________________________________________________

                                 A BILL

  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.

_______________________________________________________________________

                           February 24, 1998

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed