[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4364 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4364

 To streamline the regulation of depository institutions, to safeguard 
confidential banking and credit union supervisory information, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 1998

Mrs. Roukema (for herself and Mr. Vento) introduced the following bill; 
 which was referred to the Committee on Banking and Financial Services

_______________________________________________________________________

                                 A BILL


 
 To streamline the regulation of depository institutions, to safeguard 
confidential banking and credit union supervisory information, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Depository 
Institution Regulatory Streamlining Act of 1998''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
                   TITLE I--IMPROVING MONETARY POLICY

Sec. 101. Payment of interest on reserve balances at Federal reserve 
                            banks.
Sec. 102. Amendments relating to savings and demand deposit accounts at 
                            depository institutions.
Sec. 103. Transfer of Federal reserve surpluses.
Sec. 104. Study of reserve ratios for deposit insurance funds.
    TITLE II--IMPROVING DEPOSITORY INSTITUTION MANAGEMENT PRACTICES

                       Subtitle A--National Banks

Sec. 201. Authority to allow more than 25 directors.
Sec. 202. Loans on or purchases by institutions of their own stock.
Sec. 203. Expedited procedures for certain reorganizations.
                    Subtitle B--Savings Associations

Sec. 211. Noncontrolling investments by savings association holding 
                            companies.
Sec. 212. Streamlining thrift service company investment requirements.
Sec. 213. Repeal of dividend notice requirement.
Sec. 214. Updating of authority for community development investments.
                     Subtitle C--Other Institutions

Sec. 221. Prohibition on accrual to insiders of economic benefits from 
                            credit union conversions.
    TITLE III--STREAMLINING FEDERAL BANKING AGENCY REQUIREMENTS AND 
          ELIMINATION OF UNNECESSARY OR OUTDATED REQUIREMENTS

Sec. 301. ``Plain English'' requirement for Federal banking agency 
                            rules.
Sec. 302. Call report simplification.
Sec. 303. Purchased mortgage service rights.
Sec. 304. Judicial review of receivership appointment.
Sec. 305. Elimination of outdated statutory minimum capital 
                            requirements.
Sec. 306. Elimination of individual branch capital requirements.
Sec. 307. Amendment to shareholder notice provisions relating to 
                            consolidations and mergers.
Sec. 308. Payment of interest in receiverships with surplus funds.
Sec. 309. Repeal of deposit broker notification and recordkeeping 
                            requirement.
Sec. 310. Allowances for certain extensions of credit to executive 
                            officers.
Sec. 311. Federal Reserve Act lending limits.
Sec. 312. Repeal of Bank Holding Company Act provision limiting savings 
                            bank life insurance.
                  TITLE IV--DISCLOSURE SIMPLIFICATION

Sec. 401. Alternative disclosure for variable rate, open-ended home 
                            secured credit.
Sec. 402. Alternative compliance methods for advertising credit terms.
             TITLE V--BANK EXAMINATION REPORT PRIVILEGE ACT

Sec. 501. Amendment to the Federal Deposit Insurance Act.
Sec. 502. Amendment to Federal Credit Union Act.
                    TITLE VI--TECHNICAL CORRECTIONS

Sec. 601. Technical correction relating to deposit insurance funds.
Sec. 602. Rules for continuation of deposit insurance for member banks 
                            converting charters.
Sec. 603. Waiver of citizenship requirement for national bank 
                            directors.
Sec. 604. Technical amendment to prohibition on Comptroller interests 
                            in national banks.
Sec. 605. Applicability of limitation to prior investments.

                   TITLE I--IMPROVING MONETARY POLICY

SEC. 101. PAYMENT OF INTEREST ON RESERVE BALANCES AT FEDERAL RESERVE 
              BANKS.

    (a) In General.--Section 19(b) of the Federal Reserve Act (12 
U.S.C. 461(b)) is amended by adding at the end the following new 
paragraph:
            ``(12) Earnings on reserves.--
                    ``(A) In general.--Balances maintained at a Federal 
                reserve bank by or on behalf of a depository 
                institution may receive earnings to be paid by the 
                Federal reserve bank at least once each calendar 
                quarter at a rate or rates not to exceed the general 
                level of short-term interest rates.
                    ``(B) Regulations relating to payments and 
                distribution.--The Board may prescribe regulations 
                concerning--
                            ``(i) the payment of earnings in accordance 
                        with this paragraph;
                            ``(ii) the distribution of such earnings to 
                        the depository institutions which maintain 
                        balances at such banks or on whose behalf such 
                        balances are maintained; and
                            ``(iii) the responsibilities of depository 
                        institutions, Federal home loan banks, and the 
                        National Credit Union Administration Central 
                        Liquidity Facility with respect to the 
                        crediting and distribution of earnings 
                        attributable to balances maintained, in 
                        accordance with subsection (c)(1)(B), in a 
                        Federal reserve bank by any such entity on 
                        behalf of depository institutions which are not 
                        member banks.''.
    (b) Authorization for Pass Through Reserves for Member Banks.--
Section 19(c)(1)(B) of the Federal Reserve Act (12 U.S.C. 461(c)(1)(B)) 
is amended by striking ``which is not a member bank''.
    (c) Technical and Conforming Amendments.--Section 19 of the Federal 
Reserve Act (12 U.S.C. 461) is amended--
            (1) in subsection (b)(4) (12 U.S.C. 461(b)(4)), by striking 
        subparagraph (C) and redesignating subparagraphs (D) and (E) as 
        subparagraphs (C) and (D), respectively; and
            (2) in subsection (c)(1)(A) (12 U.S.C. 461(c)(1)(A)), by 
        striking ``subsection (b)(4)(C)'' and inserting ``subsection 
        (b)''.

SEC. 102. AMENDMENTS RELATING TO SAVINGS AND DEMAND DEPOSIT ACCOUNTS AT 
              DEPOSITORY INSTITUTIONS.

    (a) Immediate Increase in the Number of Interaccount Transfers 
Allowed Each Month.--Section 2 of Public Law 93-100 (12 U.S.C. 1832) is 
amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively; and
            (2) by inserting after subsection (a) the following:
    ``(b) Interaccount Transfers.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, any depository institution may permit the owner of any 
        deposit or account on which interest or dividends are paid to 
        make up to 24 transfers per month, for any purpose, to another 
        account of the owner in the same institution.
            ``(2) Rule of construction.--Nothing in this subsection 
        shall be construed to prevent an account offered pursuant to 
        this subsection from being considered a transaction account (as 
        defined in section 19(b) of the Federal Reserve Act (12 U.S.C. 
        461(b)) for purposes of such Act.''.
    (b) Now Accounts Authorized for All Businesses After 2001.--
            (1) In general.--Effective on the date provided in 
        paragraph (3), section 2 of Public Law 93-100 (12 U.S.C. 
        1832(a)(2)) (as amended by subsection (a) of this section) is 
        amended to read as follows:

``SEC. 2. WITHDRAWALS BY NEGOTIABLE OR TRANSFERABLE INSTRUMENTS FOR 
              TRANSFERS TO THIRD PARTIES.

    ``Notwithstanding any other provision of law, any depository 
institution (as defined in section 3 of the Federal Deposit Insurance 
Act) may permit the owner of any deposit or account to make withdrawals 
from such deposit or account by negotiable or transferable instruments 
for the purpose of making payments to third parties.''.
            (2) Repeal of prohibition on payment of interest on demand 
        deposits.--
                    (A) Federal reserve act.--Section 19 of the Federal 
                Reserve Act (12 U.S.C. 371a) is amended by striking 
                subsection (i).
                    (B) Home owners' loan act.--The 1st sentence of 
                section 5(b)(1)(B) of the Home Owners' Loan Act (12 
                U.S.C. 1464(b)(1)(B)) is amended by striking ``savings 
                association may not--'' and all that follows through 
                ``(ii) permit any'' and inserting ``savings association 
                may not permit any''.
                    (C) Federal deposit insurance act.--Section 18 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1828) is 
                amended by striking subsection (g).
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on October 1, 2001.

SEC. 103. TRANSFER OF FEDERAL RESERVE SURPLUSES.

    (a) Payments From Dividends and Surplus of Federal Reserve Banks.--
Section 7(a)(3) of the Federal Reserve Act (12 U.S.C. 289(3)) is 
amended by striking ``fiscal years 1997 and 1998'' and inserting 
``fiscal years 1998 through 2003''.
    (b) Additional Transfers for Fiscal Years 1999 Through 2003.--
            (1) In general.--In addition to the amounts required to be 
        transferred from the surplus funds of the Federal reserve banks 
        pursuant to section 7(a)(3) of the Federal Reserve Act and 
        section 3002(b) of the Omnibus Budget Reconciliation Act of 
        1993, the Federal reserve banks shall transfer from such 
        surplus funds to the Board of Governors of the Federal Reserve 
        System for transfer to the Secretary of the Treasury for 
        deposit in the general fund of the Treasury, such sums as are 
        necessary to equal the net cost of section 101, as estimated by 
        the Office of Management and Budget.
            (2) Allocation by fed.--Of the total amount required to be 
        paid by the Federal reserve banks under paragraph (1) for 
        fiscal years 1999 through 2003, the Board of Governors of the 
        Federal Reserve System shall determine the amount each such 
        bank shall pay in such fiscal year.
            (3) Replenishment of surplus fund prohibited.--No Federal 
        reserve bank may replenish such bank's surplus fund by the 
        amount of any transfer by such bank under paragraph (1) during 
        the fiscal year for which such transfer is made.

SEC. 104. STUDY OF RESERVE RATIOS FOR DEPOSIT INSURANCE FUNDS.

    (a) Review and Recommendation.--The Board of Directors of the 
Federal Deposit Insurance Corporation, in consultation with the Board 
of Governors of the Federal Reserve System and the Secretary of the 
Treasury, shall--
            (1) conduct a study of the adequacy of the deposit 
        insurance funds, taking into account--
                    (A) expected operating expenses, case resolution 
                expenditures and income, and the effect of assessments 
                on members' earnings and capital;
                    (B) historical failure rates and loss experience;
                    (C) recent changes in the law, including statutory 
                changes requiring prompt corrective action, least-cost 
                resolutions, and risk-based assessment systems;
                    (D) the income of such funds from investments;
                    (E) the potential implication of the Year 2000 
                computer problem (as defined in section 2(b)(5) of the 
                Examination Parity and Year 2000 Readiness for 
                Financial Institutions Act) and industry consolidation; 
                and
                    (F) the historical experience of the Corporation in 
                providing rebates or credits from any deposit insurance 
                fund; and
            (2) recommend to the Congress--
                    (A) an appropriate range of reserve ratios between 
                the net worth of any deposit insurance fund and the 
                aggregate amount of insured deposits insured by such 
                fund; and
                    (B) an appropriate mechanism for rebating or 
                providing credit from any deposit insurance fund when 
                the balance of the fund exceeds any applicable reserve 
                ratio.
    (b) Report Required.--The Board of Directors of the Federal Deposit 
Insurance Corporation, in consultation with the Board of Governors of 
the Federal Reserve System and the Secretary of the Treasury, shall 
submit a report to the Congress before June 30, 1999, containing--
            (1) the findings and conclusions of the study required 
        under subsection (a)(1); and
            (2) the recommendations required under subsection (a)(2).

    TITLE II--IMPROVING DEPOSITORY INSTITUTION MANAGEMENT PRACTICES

                       Subtitle A--National Banks

SEC. 201. AUTHORITY TO ALLOW MORE THAN 25 DIRECTORS.

    Section 31 of the Banking Act of 1933 (12 U.S.C. 71a) is amended in 
the first sentence, by inserting before the period ``, except that the 
Comptroller of the Currency may, by regulation or order, exempt a 
national banking association from the 25-member limit established by 
this section''.

SEC. 202. LOANS ON OR PURCHASES BY INSTITUTIONS OF THEIR OWN STOCK.

    (a) Amendment to Revised Statutes.--Section 5201 of the Revised 
Statutes of the United States (12 U.S.C. 83) is amended to read as 
follows:

``SEC. 5201. LOANS BY BANK ON ITS OWN STOCK.

    ``(a) General Prohibition.--No national banking association shall 
make any loan or discount on the security of the shares of its own 
capital stock.
    ``(b) Exclusion.--For purposes of this section, an association 
shall not be deemed to be making a loan or discount on the security of 
the shares of its own capital stock if it acquires the stock to prevent 
loss upon a debt contracted for in good faith.''.
    (b) Amendment to Federal Deposit Insurance Act.--Section 18 of the 
Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by adding at 
the end the following new subsection:
    ``(t) Loans by Insured Institutions on Their Own Stock.--
            ``(1) General prohibition.--No insured depository 
        institution shall make any loan or discount on the security of 
        the shares of its own capital stock.
            ``(2) Exclusion.--For purposes of this subsection, an 
        insured depository institution shall not be deemed to be making 
        a loan or discount on the security of the shares of its own 
        capital stock if it acquires the stock to prevent loss upon a 
        debt contracted for in good faith.''.

SEC. 203. EXPEDITED PROCEDURES FOR CERTAIN REORGANIZATIONS.

    The National Bank Consolidation and Merger Act (12 U.S.C. 215 et 
seq.) is amended--
            (1) by redesignating section 5 as section 7; and
            (2) by inserting after section 4 the following new section:

``SEC. 5. EXPEDITED PROCEDURES FOR CERTAIN REORGANIZATIONS.

    ``(a) In General.--A national bank may, with the approval of the 
Comptroller, pursuant to regulations prescribed by the Comptroller, and 
upon the affirmative vote of the shareholders of such bank owning at 
least two-thirds of the outstanding capital stock of such bank, 
reorganize so as to become a subsidiary of a bank holding company or a 
company that will, upon consummation of such reorganization, become a 
bank holding company.
    ``(b) Reorganization Plan.--A reorganization authorized under 
subsection (a) shall be carried out in accordance with a reorganization 
plan that--
            ``(1) specifies the manner in which the reorganization 
        shall be carried out;
            ``(2) is approved by a majority of the entire board of 
        directors of the bank;
            ``(3) specifies--
                    ``(A) the amount of cash or securities of the bank 
                holding company, or both, or other consideration, to be 
                paid to the shareholders of the reorganizing bank in 
                exchange for their shares of stock of the bank;
                    ``(B) the date as of which the rights of each 
                shareholder to participate in such exchange will be 
                determined; and
                    ``(C) the manner in which the exchange will be 
                carried out; and
            ``(4) is submitted to the shareholders of the reorganizing 
        bank at a meeting to be held on the call of the directors in 
        accordance with the procedures prescribed in connection with a 
        merger of a national bank under section 3.
    ``(c) Applicability of Other Criteria.--In considering a 
reorganization plan under this section, the Comptroller shall--
            ``(1) require the national bank to provide notice to the 
        public in accordance with section 18(c)(3) of the Federal 
        Deposit Insurance Act; and
            ``(2) apply the same standards and the same criteria as are 
        applicable to a transaction under section 18(c) of the Federal 
        Deposit Insurance Act, other than the requirements of 
        paragraphs (4) and (6) of such section.
    ``(d) Rights of Dissenting Shareholders.--If, pursuant to this 
section, a reorganization plan has been approved by the shareholders 
and the Comptroller, any shareholder of the national bank who has voted 
against the reorganization at the meeting referred to in subsection 
(b)(4), or has given notice in writing at or before that meeting to the 
presiding officer that the shareholder dissents from the reorganization 
plan, shall be entitled to receive the value of the shares of the 
shareholder, as provided by section 3 for the merger of a national 
bank.
    ``(e) Effect of Reorganization.--The corporate existence of a 
national bank that reorganizes in accordance with this section shall 
not be deemed to have been affected in any way by reason of such 
reorganization.
    ``(f) Approval Under the Bank Holding Company Act of 1956.--
Notwithstanding the preceding provisions of this section, it shall be 
unlawful for any action to be taken that causes any company to become a 
bank holding company or any bank to become a subsidiary of a bank 
holding company, except with the prior approval of the Board of 
Governors of the Federal Reserve System pursuant to section 3 of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1842).''.

                    Subtitle B--Savings Associations

SEC. 211. NONCONTROLLING INVESTMENTS BY SAVINGS ASSOCIATION HOLDING 
              COMPANIES.

    Section 10(e)(1)(A)(iii) of the Home Owners' Loan Act (12 U.S.C. 
1467a(e)(1)(A)(iii) is amended--
            (1) by inserting ``, except with the prior written approval 
        of the Director,'' after ``or to retain'';
            (2) by striking ``subsidiary, or in'' and inserting 
        ``subsidiary. In''; and
            (3) by striking ``to so acquire or retain'' and inserting 
        ``it shall be unlawful, and the Director may not authorize such 
        a company, to acquire or retain''.

SEC. 212. STREAMLINING SAVINGS ASSOCIATION SERVICE COMPANY INVESTMENT 
              REQUIREMENTS.

    Section 5(c)(4)(B) of the Home Owners' Loan Act (12 U.S.C. 
1464(c)(4)(B)) is amended--
            (1) in the subparagraph heading, by striking 
        ``corporations'' and inserting ``companies''; and
            (2) in the first sentence, by striking ``corporation 
        organized'' and all that follows through ``such State.'' and 
        inserting ``company organized under the laws of any State, if 
        such company's entire capital stock is available for purchase 
        only by savings associations. For purposes of this 
        subparagraph, the term `company' includes any corporation and 
        any limited liability company (as defined in section 1(b)(7) of 
        the Bank Service Company Act).''.

SEC. 213. REPEAL OF DIVIDEND NOTICE REQUIREMENT.

    Section 10(f) of the Home Owners' Loan Act (12 U.S.C. 1467a(f)) is 
amended to read as follows:
    ``(f) [Repealed].''.

SEC. 214. UPDATING OF AUTHORITY FOR COMMUNITY DEVELOPMENT INVESTMENTS.

    Section 5(c) of the Home Owners' Loan Act (12 U.S.C. 1464(c)) is 
amended--
            (1) in paragraph (3), by striking subparagraph (A) and 
        redesignating subparagraphs (B) and (C) as subparagraphs (A) 
        and (B), respectively; and
            (2) by adding at the end the following new paragraph:
            ``(7) Community development investments.--
                    ``(A) In general.--Investments in real property and 
                obligations secured by liens on real property for the 
                primary purpose of promoting the public welfare, 
                including the welfare of low- and moderate-income 
                communities or families (including the provision of 
                housing, services, or jobs), are permitted, subject to 
                subparagraph (B).
                    ``(B) Limitations.--The aggregate amount of 
                investments of a savings association under subparagraph 
                (A) shall not exceed the sum of 5 percent of the 
                savings association's capital stock actually paid in 
                and unimpaired and 5 percent of the savings 
                association's unimpaired surplus fund, unless the 
                Director determines by order that a higher amount will 
                pose no significant risk to the affected deposit 
                insurance fund, and that the savings association is 
                adequately capitalized, in which case the aggregate 
                amount of such investments shall not exceed an amount 
                equal to the sum of 10 percent of the savings 
                association's capital stock actually paid in and 
                unimpaired and 10 percent of the savings association's 
                unimpaired surplus fund.''.

                     Subtitle C--Other Institutions

SEC. 221. PROHIBITION ON ACCRUAL TO INSIDERS OF ECONOMIC BENEFITS FROM 
              CREDIT UNION CONVERSIONS.

    Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is 
amended by adding at the end the following new subsection:
    ``(t) Prohibition on Economic Benefit From Conversion for Credit 
Union Officers, Directors, and Committee Members.--
            ``(1) In general.--An individual who is or, at any time 
        during the 5-year period preceding any conversion described in 
        paragraph (2), was a director, committee member, or senior 
        management official of an insured credit union described in 
        subparagraph (A) or (B) of such paragraph (in connection with 
        such conversion) may not receive any economic benefit as a 
        result of the conversion with regard to the shares or interests 
        of such director, member, or officer in the former insured 
        credit union or in any resulting insured depository 
        institution.
            ``(2) Covered conversions.--The following conversions are 
        described in this paragraph for purposes of paragraph (1):
                    ``(A) The conversion of an insured credit union 
                into an insured depository institution.
                    ``(B) The conversion from the mutual form to the 
                stock form of an insured depository institution which 
                resulted from a prior conversion of an insured credit 
                union into such insured depository institution.
            ``(3) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Insured credit union.--The term `insured 
                credit union' has the meaning given to such term in 
                section 101(7) of the Federal Credit Union Act.
                    ``(B) Senior management official.--The term `senior 
                management official' means a chief executive officer, 
                an assistant chief executive officer, a chief financial 
                officer, and any other senior executive officer (as 
                defined by the appropriate Federal banking agency 
                pursuant to section 32(f)).''.

    TITLE III--STREAMLINING FEDERAL BANKING AGENCY REQUIREMENTS AND 
          ELIMINATION OF UNNECESSARY OR OUTDATED REQUIREMENTS

SEC. 301. ``PLAIN ENGLISH'' REQUIREMENT FOR FEDERAL BANKING AGENCY 
              RULES.

    (a) In General.--Each Federal banking agency shall use plain 
English in all proposed and final rulemakings published by the agency 
in the Federal Register after January 1, 1999.
    (b) Report.--Not later than June 1, 2000, each Federal banking 
agency shall submit to the Congress a report that describes how the 
agency has complied with subsection (a).
    (c) Definitions.--For purposes of this section and section 302, the 
terms ``Federal banking agency'' and ``State bank supervisor'' have the 
meanings given such terms in section 3 of the Federal Deposit Insurance 
Act.

SEC. 302. CALL REPORT SIMPLIFICATION.

    (a) Modernization of Call Report Filing and Disclosure System.--In 
order to reduce the administrative requirements pertaining to bank 
reports of condition, savings association financial reports, and bank 
holding company consolidated and parent-only financial statements, and 
to improve the timeliness of such reports and statements, the Federal 
banking agencies (after consulting with State bank supervisors) shall--
            (1) work jointly to develop a system under which--
                    (A) insured depository institutions and their 
                affiliates may file such reports and statements 
                electronically; and
                    (B) the Federal banking agencies may make such 
                reports and statements available to the public 
                electronically; and
            (2) not later than July 1, 2000, report to the Congress and 
        make recommendations for legislation that would enhance 
        efficiency for filers and users of such reports and statements.
    (b) Uniform Reports and Simplification of Instructions.--The 
Federal banking agencies (after consulting with State bank supervisors) 
shall, consistent with the principles of safety and soundness, work 
jointly--
            (1) to adopt a single form for the filing of core 
        information required to be submitted under Federal law to all 
        such agencies in the reports and statements referred to in 
        subsection (a); and
            (2) to simplify instructions accompanying such reports and 
        statements and to provide an index to the instructions that is 
        adequate to meet the needs of both filers and users.
    (c) Review of Call Report Schedule.--Each Federal banking agency 
(after consulting with State bank supervisors) shall--
            (1) review the information required by schedules 
        supplementing the core information referred to in subsection 
        (b); and
            (2) eliminate requirements that are not warranted for 
        reasons of safety and soundness or other public purposes.

SEC. 303. PURCHASED MORTGAGE SERVICE RIGHTS.

    Section 475 of the Federal Depository Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 1828 note) is amended--
            (1) in subsection (a)(1), by inserting ``(or such other 
        percentage exceeding 90 percent but not exceeding 100 percent, 
        as may be determined under subsection (b))'' after ``90 
        percent''; and
            (2) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively, and by inserting after subsection 
        (a) the following new subsection:
    ``(b) Authority to Determine Percentage by Which to Discount Value 
of Servicing Rights.--
            ``(1) In general.--Notwithstanding subsection (a)(1), the 
        appropriate Federal banking agencies may allow readily 
        marketable purchased mortgage servicing rights to be valued at 
        more than 90 percent of their fair market value but at not more 
        than 100 percent of such value, if such agencies jointly make a 
        finding before the end of the 180-day period beginning on the 
        date of the enactment of the Depository Institution Regulatory 
        Streamlining Act of 1998 that such valuation would not have an 
        adverse affect on the deposit insurance funds or the safety and 
        soundness of insured depository institutions.
            ``(2) Joint rulemaking.--Any regulations prescribed 
        pursuant to paragraph (1) shall be prescribed jointly by the 
        Federal banking agencies.''.

SEC. 304. JUDICIAL REVIEW OF RECEIVERSHIP APPOINTMENTS.

    (a) Appointment for National Bank.--Section 2 of the National Bank 
Receivership Act (12 U.S.C. 191) is amended--
            (1) by inserting ``(a) Appointment of Receiver.--'' before 
        ``The Comptroller''; and
            (2) by adding at the end the following new subsection:
    ``(b) Judicial Review.--Within 30 days after the appointment under 
subsection (a) of a receiver for a national bank, the national bank may 
bring an action in the United States district court for the judicial 
district in which the home office of the bank is located, or in the 
United States District Court for the District of Columbia, for an order 
requiring the Comptroller to remove the receiver, and the court shall, 
on the merits, dismiss the action or direct the Comptroller to remove 
the receiver.''.
    (b) Appointment of Federal Deposit Insurance Corporation.--Section 
11(c)(7) of the Federal Deposit Insurance Act (12 U.S.C. 1811(c)(7)) is 
amended to read as follows:
            ``(7) Judicial review.--Within 30 days after the 
        Corporation is appointed as conservator or receiver for an 
        insured depository institution under paragraph (4), (9), or 
        (10), the institution may bring an action in the United States 
        district court for the judicial district in which the home 
        office of the institution is located, or in the United States 
        District Court for the District of Columbia, for an order 
        requiring the Corporation to be removed as the conservator or 
        receiver, and the court shall, on the merits, dismiss the 
        action or direct the Corporation to be removed as the 
        conservator or receiver.''.

SEC. 305. ELIMINATION OF OUTDATED STATUTORY MINIMUM CAPITAL 
              REQUIREMENTS.

    Section 5138 of the Revised Statutes of the United States (12 
U.S.C. 51) is repealed.

SEC. 306. ELIMINATION OF INDIVIDUAL BRANCH CAPITAL REQUIREMENTS.

    Section 5155(c) of the Revised Statutes of the United States (12 
U.S.C. 36(c)) is amended--
            (1) in the second sentence, by striking ``, without regard 
        to the capital requirements of this section,''; and
            (2) by striking the third sentence.

SEC. 307. AMENDMENT TO SHAREHOLDER NOTICE PROVISIONS RELATING TO 
              CONSOLIDATIONS AND MERGERS.

    (a) Section 2(a) of the Act of August 17, 1950, entitled ``An Act 
to provide for the conversion of national banking associations into and 
their merger or consolidation with State banks, and for other 
purposes.'' (12 U.S.C. 214a(a)) is amended by striking ``registered 
mail or by certified''.
    (b) Sections 2(a) and 3(a)(2) of the National Bank Consolidation 
and Merger Act (12 U.S.C. 215(a) and 215a(a)(2)) are each amended by 
striking ``certified or registered'' each place it appears.

SEC. 308. PAYMENT OF INTEREST IN RECEIVERSHIPS WITH SURPLUS FUNDS.

    Section 11(d)(10) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(d)(10)) is amended by adding at the end the following new 
subparagraph:
                    ``(C) Rulemaking authority of corporation.--The 
                Corporation may prescribe such rules, including 
                definitions of terms, as it deems appropriate to 
                establish the interest rate for or to make payments of 
                postinsolvency interest to creditors holding proven 
                claims against the receivership estates of insured 
                Federal or State depository institutions following 
                satisfaction by the receiver of the principal amount of 
                all creditor claims.''.

SEC. 309. REPEAL OF DEPOSIT BROKER NOTIFICATION AND RECORDKEEPING 
              REQUIREMENT.

    Section 29A of the Federal Deposit Insurance Act (12 U.S.C. 1831f-
1) is repealed.

SEC. 310. ALLOWANCES FOR CERTAIN EXTENSIONS OF CREDIT TO EXECUTIVE 
              OFFICERS.

    Section 22(g) of the Federal Reserve Act (12 U.S.C. 375a) is 
amended--
            (1) by redesignating paragraphs (6) through (10) as 
        paragraphs (8) through (12), respectively; and
            (2) by inserting after paragraph (5) the following new 
        paragraphs:
            ``(6) A member bank may extend to any executive officer of 
        the bank a home equity line of credit which does not exceed 
        $100,000 and is secured by a first lien on the primary 
        residence of the executive officer, to the extent that the 
        aggregate amount of such lien and all other outstanding 
        extensions of credit secured by liens on such primary residence 
        does not exceed the appraised value of such residence.
            ``(7) A member bank may extend credit to any executive 
        officer of the bank in an amount not to exceed the greater of--
                    ``(A) the amount which is the lesser of 2.5 percent 
                of the aggregate amount of capital and unimpaired 
                surplus of the bank or $100,000; or
                    ``(B) $25,000,
        if, at the time the credit is extended, the extension of credit 
        is secured by readily marketable assets that have a fair market 
        value of not less than twice the amount of credit extended.''.

SEC. 311. FEDERAL RESERVE ACT LENDING LIMITS.

    Section 11(m) of the Federal Reserve Act (12 U.S.C. 248(m)) is 
amended to read as follows:
    ``(m) [Repealed].''.

SEC. 312. REPEAL OF BANK HOLDING COMPANY ACT PROVISION LIMITING SAVINGS 
              BANK LIFE INSURANCE.

    Section 3(f) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1842(f)) is amended to read as follows:
    ``(f) [Repealed].''.

                  TITLE IV--DISCLOSURE SIMPLIFICATION

SEC. 401. ALTERNATIVE DISCLOSURE FOR VARIABLE RATE, OPEN-ENDED HOME 
              SECURED CREDIT.

    Section 127A(a)(2)(G) of the Truth in Lending Act (15 U.S.C. 1637a) 
is amended by inserting ``or, at the option of the creditor, a 
statement that periodic payments may substantially increase or 
decrease'' before the semicolon.

SEC. 402. ALTERNATIVE COMPLIANCE METHODS FOR ADVERTISING CREDIT TERMS.

    (a) Downpayment Amounts.--Section 144(d) of the Truth in Lending 
Act (15 U.S.C. 1664(d)) is amended--
            (1) by striking ``or the number of installments or the 
        period of repayment, then''; and
            (2) by inserting ``or'' before ``the dollar''.
    (b) Alternative Disclosures.--Chapter 3 of the Truth in Lending Act 
(15 U.S.C. 1661 et seq.) is amended by adding at the end the following 
new section:

``SEC. 148. ALTERNATIVE DISCLOSURES.

    ``(a) In General.--A radio or television advertisement to aid, 
promote, or assist, directly or indirectly, any extension of consumer 
credit may satisfy the disclosure requirements in sections 143, 144(d), 
147(a), or 147(e), by complying with all of the requirements in 
subsections (b) and (c) of this section.
    ``(b) Information To Be Disclosed.--A radio or television 
advertisement referred to in subsection (a) complies with this 
subsection if it clearly and conspicuously sets forth, in such form and 
manner as the Board may require--
            ``(1) the annual percentage rate of any finance charge, and 
        with respect to an open-end credit plan, the simple interest 
        rate or the periodic rate in addition to the annual percentage 
        rate;
            ``(2) whether the interest rate may vary;
            ``(3) if the advertisement states an introductory rate (or 
        states with respect to a variable-rate plan an initial rate 
        that is not based on the index and margin used to make later 
        rate adjustments)--
                    ``(A) with equal prominence, the annual percentage 
                rate that will be in effect after the introductory or 
                initial rate period expires (or for a variable-rate 
                plan, a reasonably current annual percentage rate that 
                would have been in effect using the index and margin); 
                and
                    ``(B) the period during which the introductory or 
                initial rate will remain in effect;
            ``(4) the amount of any annual fee for an open-end credit 
        plan;
            ``(5) a telephone number established in accordance with 
        subsection (c) that may be used by consumers to obtain all of 
        the information otherwise required to be disclosed pursuant to 
        sections 143 and 144(d), and subsections (a) and (e) of section 
        147; and
            ``(6) a statement that the consumer may use the telephone 
        number established in accordance with subsection (c) to obtain 
        further details about additional terms and costs associated 
        with the offer of credit.
    ``(c) Requirements for Telephone Numbers.--In the case of an 
advertisement described in subsection (b) that refers to a telephone 
number--
            ``(1) the creditor shall establish the telephone number for 
        a broadcast area not later than the date on which the 
        advertisement is first broadcast in that area;
            ``(2) the required information shall be available by 
        telephone for a broadcast area for a period of not less than 10 
        days following the date of the final broadcast of the 
        advertisement in that area;
            ``(3) the creditor shall provide all of the information 
        that is otherwise required pursuant to sections 143 and 144(d), 
        and subsections (a) and (e) of section 147 orally by telephone 
        or, if requested by the consumer, in written form; and
            ``(4) the consumer shall obtain the required information by 
        telephone without incurring any long-distance charges.''.

             TITLE V--BANK EXAMINATION REPORT PRIVILEGE ACT

SEC. 501. AMENDMENT TO THE FEDERAL DEPOSIT INSURANCE ACT.

    The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 
amended by adding at the end the following new section:

``SEC. 45. BANK SUPERVISORY PRIVILEGE.

    ``(a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Depository institution.--The term `depository 
        institution' includes--
                    ``(A) any institution which is treated in the same 
                manner as an insured depository institution under 
                paragraph (3), (4), (5), or (9) of section 8(b); and
                    ``(B) any subsidiary or other affiliate of an 
                insured depository institution or an institution 
                described in subparagraph (A).
            ``(2) Supervisory process.--The term `supervisory process' 
        means any activity engaged in by a Federal banking agency to 
        carry out the official responsibilities of the agency with 
        regard to the regulation or supervision of depository 
        institutions.
            ``(3) Confidential supervisory information.--The term 
        `confidential supervisory information' means any of the 
        following information, or any portion of any such information, 
        which is treated as, or considered to be, confidential 
        information by a Federal banking agency, regardless of the 
        medium in which the information is conveyed or stored:
                    ``(A) Any report of examination, inspection, 
                visitation, or investigation, and information prepared 
                or collected by a Federal banking agency in connection 
                with the supervisory process, including any computer 
                file, work paper, or similar document.
                    ``(B) Any correspondence of communication from a 
                Federal banking agency to a depository institution 
                arising from or relating to an examination, inspection, 
                visitation, or investigation by a Federal banking 
                agency.
                    ``(C) Any correspondence, communication, or 
                document, including any compliance and other reports, 
                created by a depository institution in response to any 
                request, inquiry, or directive from a Federal banking 
                agency in connection with any examination, inspection, 
                visitation, or investigation and provided to a Federal 
                banking agency, other than any book or record in the 
                possession of the depository institution routinely 
                prepared by the depository institution and maintained 
                in the ordinary course of business or any information 
                required to be made publicly available by any Federal 
                law or regulation.
                    ``(D) Any record of a Federal banking agency to the 
                extent it contains information derived from any report, 
                correspondence, communication or other information 
                described in subparagraph (A), (B), or (C).
    ``(b) Bank Supervisory Privilege.--
            ``(1) Privilege established.--
                    ``(A) In general.--All confidential supervisory 
                information shall be the property of the Federal 
                banking agency that created or requested the 
                information and shall be privileged from disclosure to 
                any other person.
                    ``(B) Prohibition on unauthorized disclosures.--No 
                person in possession of confidential supervisory 
                information may disclose such information, in whole or 
                in part, without the prior authorization of the Federal 
                banking agency that created or requested the 
                information, except for a disclosure made in published 
                statistical material that does not disclose, either 
                directly or when used in conjunction with publicly 
                available information, the affairs of any person.
                    ``(C) Agency waiver.--The Federal banking agency 
                may waive, in whole or in part, in the discretion of 
                the agency, any privilege established under this 
                paragraph.
            ``(2) Exception.--No provision of paragraph (1) shall be 
        construed as preventing access to confidential supervisory 
        information by duly authorized committees of the United States 
        Congress or the Comptroller General of the United States.
    ``(c) Treatment of State and Foreign Supervisory Information.--In 
any proceeding before a court of the United States, in which a person 
seeks to compel production or disclosure by a State bank supervisor, 
foreign bank regulatory or supervisory authority, Federal banking 
agency, or other person, of information or a document prepared or 
collected by a State bank supervisor or foreign bank regulatory or 
supervisory authority that would, had they been prepared or collected 
by a Federal banking agency, be confidential supervisory information 
for purposes of this section, the information or document shall be 
privileged to the same extent that the information and documents of 
Federal banking agencies are privileged under this Act.
    ``(d) Other Privileges Not Waived by Disclosure to Banking 
Agency.--The submission by a depository institution of any information 
to a Federal banking agency, a State bank supervisor, or a foreign 
banking authority for any purpose in the course of the supervisory 
process of such agency or supervisor shall not be construed as waiving, 
destroying, or otherwise affecting any privilege such institution may 
claim with respect to such information under Federal or State law.
    ``(e) Discovery and Disclosure of Information.--
            ``(1) Information available only from banking agency.--
                    ``(A) In general.--A person seeking discovery or 
                disclosure, in whole or in part, of confidential 
                supervisory information may not seek to obtain such 
                information through subpoena, discovery procedures, or 
                other process from any person, except that such 
                information may be sought in accordance with this 
                section from the Federal banking agency that created or 
                requested the information.
                    ``(B) Requests submitted to banking agency.--Any 
                request for discovery or disclosure of confidential 
                supervisory information shall be made to the Federal 
                banking agency that created or requested the 
                information, which shall determine within a reasonable 
                time period whether to disclose such information 
                pursuant to procedures and criteria established in 
                regulations.
            ``(2) Exclusive federal court jurisdiction over disputes.--
                    ``(A) In general.--Federal courts shall have 
                exclusive jurisdiction over actions or proceedings in 
                which any party seeks to compel disclosure of 
                confidential supervisory information.
                    ``(B) Judicial review.--Judicial review of the 
                final action of a Federal banking agency with regard to 
                the disposition of a request for confidential 
                supervisory information shall be before a district 
                court of the United States of competent jurisdiction, 
                subject to chapter 7 of part I of title 5, United 
                States Code.
                    ``(C) Right to appeal.--Any court order that 
                compels production of confidential supervisory 
                information may be immediately appealed by the Federal 
                banking agency and the order compelling production 
                shall be automatically stayed, pending the outcome of 
                such appeal.
    ``(f) Subpoenas.--
            ``(1) Authority to intervene.--In the case of any action or 
        proceeding to compel compliance with a subpoena, order, 
        discovery request, or other judicial or administrative process 
        with respect to any confidential supervisory information 
        relating to any depository institution, a Federal banking 
        agency and the depository institution may intervene in such 
        action or proceeding for the purpose of--
                    ``(A) enforcing the limitations established in 
                paragraph (1) of subsections (b) and (e);
                    ``(B) seeking the withdrawal of any compulsory 
                process with respect to such information; and
                    ``(C) registering appropriate objections with 
                respect to the action or proceeding to the extent the 
                action or proceeding relates to or involves such 
                information.
            ``(2) Right to appeal.--Any court order that compels 
        production of confidential supervisory information may be 
        immediately appealed by the Federal banking agency and the 
        order compelling production shall be automatically stayed, 
        pending the outcome of such appeal.
    ``(g) Regulations.--
            ``(1) Authority to prescribe.--Each Federal banking agency 
        may prescribe such regulations as the agency considers to be 
        appropriate, after consultation with the other Federal banking 
        agencies and the National Credit Union Administration Board, to 
        carry out the purposes of this section.
            ``(2) Authority to require notice.--Any regulations 
        prescribed by a Federal banking agency under paragraph (1) may 
        require any person in possession of confidential supervisory 
        information to notify the Federal banking agency whenever the 
        person is served with a subpoena, order, discovery request, or 
        other judicial or administrative process requiring the personal 
        attendance of such person as a witness or requiring the 
        production of such information in any proceeding.
    ``(h) Access in Accordance With Regulations and Orders.--
Notwithstanding any other provision of this section, the Federal 
banking agency may, without waiving any privilege, authorize access to 
confidential supervisory information for any appropriate governmental, 
law enforcement, or public purpose in accordance with agency 
regulations or orders.''.

SEC. 502. AMENDMENT TO THE FEDERAL CREDIT UNION ACT.

    Title II of the Federal Credit Union Act (12 U.S.C. 1781 et seq.) 
is amended by adding at the end the following new section:

``SEC. 215. CREDIT UNION SUPERVISORY PRIVILEGE.

    ``(a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Supervisory process.--The term `supervisory process' 
        means any activity engaged in by the Administration to carry 
        out the official responsibilities of the Administration with 
        regard to the regulation or supervision of credit unions.
            ``(2) Confidential supervisory information.--The term 
        `confidential supervisory information' means any of the 
        following information, or any portion of any such information, 
        which is treated as, or considered to be, confidential 
        information by the Administration, regardless of the medium in 
        which the information is conveyed or stored:
                    ``(A) Any report of examination, inspection, 
                visitation, or investigation, and information prepared 
                or collected by the Administration in connection with 
                the supervisory process, including any computer file, 
                work paper, or similar document.
                    ``(B) Any correspondence or communication from the 
                Administration to a credit union arising from or 
                relating to an examination, inspection, visitation, or 
                investigation by the Administration.
                    ``(C) Any correspondence, communication, or 
                document, including any compliance and other reports, 
                created by a credit union in response to any request, 
                inquiry, or directive from the Administration in 
                connection with any examination, inspection, 
                visitation, or investigation and provided to the 
                Administration, other than any book or record in the 
                possession of the credit union routinely prepared by 
                the credit union and maintained in the ordinary course 
                of business or any information required to be made 
                publicly available by any Federal law or regulation.
                    ``(D) Any record of the Administration to the 
                extent it contains information derived from any report, 
                correspondence, communication or other information 
                described in subparagraph (A), (B), or (C).
    ``(b) Credit Union Supervisory Privilege.--
            ``(1) Privilege established.--
                    ``(A) In general.--All confidential supervisory 
                information shall be the property of the Administration 
                and shall be privileged from disclosure to any other 
                person.
                    ``(B) Prohibition on unauthorized disclosures.--No 
                person in possession of confidential supervisory 
                information may disclose such information, in whole or 
                in part, without the prior authorization of the 
                Administration, except for a disclosure made in 
                published statistical material that does not disclose, 
                either directly or when used in conjunction with 
                publicly available information, the affairs of any 
                person.
                    ``(C) Agency waivers.--The Board may waive, in 
                whole or in part, in the discretion of the Board, any 
                privilege established under this paragraph.
            ``(2) Exception.--No provision of paragraph (1) shall be 
        construed as preventing access to confidential supervisory 
        information by duly authorized committees of the United States 
        Congress or the Comptroller General of the United States.
    ``(c) Other Privileges Not Waived by Disclosure to 
Administration.--The submission by a credit union of any information to 
the Administration or a State credit union supervisor for any purpose 
in the course of the supervisory process of the Administration or such 
supervisor shall not be construed as waiving, destroying, or otherwise 
affecting any privilege such institution may claim with respect to such 
information under Federal or State law.
    ``(d) Discovery and Disclosure of Information.--
            ``(1) Information available only from administration.--
                    ``(A) In general.--A person seeking discovery or 
                disclosure, in whole or in part, of confidential 
                supervisory information may not seek to obtain such 
                information through subpoena, discovery procedures, or 
                other process from any person, except that such 
                information may be sought in accordance with this 
                section from the Administration.
                    ``(B) Request submitted to administration.--Any 
                request for discovery or disclosure of confidential 
                supervisory information shall be made in the 
                Administration, which shall determine within a 
                reasonable time period whether to disclose such 
                information pursuant to procedures and criteria 
                established in regulations.
            ``(2) Exclusive federal court jurisdiction over disputes.--
                    ``(A) In general.--Federal courts shall have 
                exclusive jurisdiction over actions or proceedings in 
                which any party seeks to compel disclosure of 
                confidential supervisory information.
                    ``(B) Judicial review.--Judicial review of the 
                final action of the Administration with regard to the 
                disposition of a request for confidential supervisory 
                information shall be before a district court of the 
                United States of competent jurisdiction, subject to 
                chapter 7 of part I of title 5, United States Code.
                    ``(C) Right to appeal.--Any court order that 
                compels production of confidential supervisory 
                information may be immediately appealed by the 
                Administration and the order compelling production 
                shall be automatically stayed, pending the outcome of 
                such appeal.
    ``(e) Subpoenas.--
            ``(1) Authority to intervene.--In the case of any action or 
        proceeding to compel compliance with a subpoena, order, 
        discover request, or other judicial or administrative process 
        with respect to any confidential supervisory information 
        relating to any credit union, the Administration and the credit 
        union may intervene in such action or proceeding for the 
        purpose of--
                    ``(A) enforcing the limitations established in 
                paragraph (1) of subsections (b) and (d);
                    ``(B) seeking the withdrawal of any compulsory 
                process with respect to such information; and
                    ``(C) registering appropriate objections with 
                respect to the action or proceeding to the extent the 
                action or proceeding relates to or involves such 
                information.
            ``(2) Right to appeal.--Any court order that compels 
        production of confidential supervisory information may be 
        immediately appealed by the Administration and the order 
        compelling production shall be automatically stayed, pending 
        the outcome of such appeal.
    ``(f) Regulations.--
            ``(1) Authority to prescribe.--The Board may prescribe such 
        regulations as the Board considers to be appropriate, after 
        consultation with the Federal banking agencies (as defined in 
        section 3 of the Federal Deposit Insurance Act), to carry out 
        the purposes of this section.
            ``(2) Authority to require notice.--Any regulations 
        prescribed by the Administration under paragraph (1) may 
        require any person in possession of confidential supervisory 
        information to notify the Administration whenever the person is 
        served with a subpoena, order, discovery request, or other 
        judicial or administrative process requiring the personal 
        attendance of such person as a witness or requiring the 
        production of such information in any proceeding.
    ``(g) Access in Accordance With Regulations and Orders.--
Notwithstanding any other provision of this section, the Administration 
may, without waiving any privilege, authorize access to confidential 
supervisory information for any appropriate governmental, law 
enforcement, or public purpose in accordance with agency regulations or 
orders.''.

                    TITLE VI--TECHNICAL CORRECTIONS

SEC. 601. TECHNICAL CORRECTION RELATING TO DEPOSIT INSURANCE FUNDS.

    (a) In General.--Section 2707 of the Deposit Insurance Funds Act of 
1996 (12 U.S.C. 1821 note; Public Law 104-208; 110 Stat. 3009-496) is 
amended by striking ``7(b)(2)(C)'' and inserting ``7(b)(2)(E)''.
    (b) Effective Date.--The amendment made by subsection (a) shall be 
deemed to have the same effective date as section 2707 of the Deposit 
Insurance Funds Act of 1996.

SEC. 602. RULES FOR CONTINUATION OF DEPOSIT INSURANCE FOR MEMBER BANKS 
              CONVERTING CHARTERS.

    Section 8(o) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(o)) is amended in the second sentence, by striking ``subsection 
(d) of section 4'' and inserting ``subsection (c) or (d) of section 
4''.

SEC. 603. WAIVER OF CITIZENSHIP REQUIREMENT FOR NATIONAL BANK 
              DIRECTORS.

    Section 5146 of the Revised Statutes of the United States (12 
U.S.C. 72) is amended in the 1st sentence, by inserting before the 
period ``, and waive the requirement of citizenship in the case of not 
more than a minority of the total number of directors of a national 
bank which is an affiliate (as defined in section 3(w)(6) of the 
Federal Deposit Insurance Act) of a foreign bank''.

SEC. 604. TECHNICAL AMENDMENT TO PROHIBITION ON COMPTROLLER INTERESTS 
              IN NATIONAL BANKS.

    Section 329 of the Revised Statutes of the United States (12 U.S.C. 
11) is amended by striking ``to be interested in any association 
issuing national currency under the laws of the United States'' and 
inserting ``to hold an interest in any national bank''.

SEC. 605. APPLICABILITY OF LIMITATION TO PRIOR INVESTMENTS.

    (a) In General.--Section 18(s) of the Federal Deposit Insurance Act 
(12 U.S.C. 1828(s)) is amended by adding at the end the following new 
paragraph:
            ``(5) Certain investments.--Paragraph (1) shall not apply 
        to investments lawfully made before April 11, 1996, by a 
        depository institution in a Government-sponsored enterprise.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply as if such amendment had been included in the amendment made by 
section 2615(b) of the Economic Growth and Regulatory Paperwork 
Reduction Act of 1996 as of the effective date of such section.
                                 <all>