[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3171 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3171

  To help stabilize and restore the economy by providing for greater 
access to credit for the underbanked, the unbanked, and consumers with 
low credit scores through the establishment of bridging bank depository 
                 institutions, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 10, 2009

   Mr. Baca introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committee on 
   Ways and Means, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To help stabilize and restore the economy by providing for greater 
access to credit for the underbanked, the unbanked, and consumers with 
low credit scores through the establishment of bridging bank depository 
                 institutions, 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 ``Bridging Bank to Recovery Act of 
2009''.

SEC. 2. FINDINGS AND PURPOSES.

            (1) Findings.--The Congress finds that--
                    (A) the current financial crisis has had a 
                disproportionate impact on the underbanked, the 
                unbanked and consumers with credit scores at or below 
                660;
                    (B) the underbanked, the unbanked and consumers 
                with credit scores at or below 660 already have extreme 
                difficulty gaining access to comprehensive banking 
                services, including access to appropriate credit;
                    (C) the underbanked, the unbanked, consumers with 
                credit scores at or below 660 and the United States 
                economy would benefit from programs that provide a 
                means by which the underbanked, the unbanked and 
                consumers with credit scores at or below 660 could be 
                transitioned into mainstream banking;
                    (D) developing programs to assist consumers with 
                credit scores at or below 660 rehabilitate their credit 
                scores and gain a greater understanding of the credit 
                process would benefit this consumer group and assist in 
                stabilizing and restoring the United States economy;
                    (E) assisting consumers with credit scores at or 
                below 660 stay in their homes and avoid foreclosures 
                which would significantly reduce the number of 
                foreclosures and thereby assist in stabilizing and 
                restoring the current housing market;
                    (F) while many traditional banks have programs 
                targeted towards transitioning the underbanked and the 
                unbanked into mainstream banking, only a limited number 
                of banks have programs designed to assist consumers 
                with credit scores at or below 660;
                    (G) consumers with credit scores at or below 660 
                have substantially increased due to economic 
                conditions, and the capacity of these consumers to 
                manage their financial obligations has worsened;
                    (H) there is a need to create a financial 
                institution whose primary purpose is to assist the 
                underbanked, the unbanked and consumers with credit 
                scores at or below 660; and
                    (I) the new financial institution could become a 
                bridge by which the underbanked, the unbanked and 
                consumers with credit scores at or below 660 gain 
                greater access to credit and other financial services 
                and build or rebuild their credit history and credit 
                scores in order to become a more integral part of the 
                financial mainstream and contribute more to the 
                economic growth of the United States.
            (2) Purpose.--The purpose of this Act is to create a 
        bridging bank depository institution as a special purpose 
        financial institution primarily dedicated to serving the 
        underbanked and the unbanked consumers and consumers with 
        credit scores at or below 680, enabling those consumers to more 
        easily transition to or back to the financial mainstream 
        through a program of comprehensive banking services, including, 
        but not limited to, access to credit products, financial and 
        credit training, loan restructurings and other tailored 
        financial products and services designed to meet the needs of 
        such consumers.

SEC. 3. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Appropriate banking agency.--The term ``appropriate 
        banking agency'' means any appropriate Federal banking agency 
        and State bank supervisor (as such terms are defined in section 
        3 of the Federal Deposit Insurance Act) and, in the case of any 
        insured credit union, the National Credit Union Administration 
        Board.
            (2) Bridging bank depository institution.--
                    (A) In general.--The term ``bridging bank 
                depository institution'' means a de novo bank chartered 
                by the Comptroller of the Currency, a de novo savings 
                association chartered by the Director of the Office of 
                Thrift Supervision, a de novo insured credit union 
                chartered by the National Credit Union Administration 
                or a de novo bank chartered by a State bank supervisor 
                created pursuant to this Act that--
                            (i) has a primary mission of providing a 
                        comprehensive array of financial services to 
                        the underbanked, the unbanked and consumers 
                        with credit scores at or below 680 in order to 
                        provide a vehicle to transition consumers into 
                        the financial mainstream;
                            (ii) serves as a vehicle for providing 
                        access to credit products predominately to 
                        consumers with a credit score at or below 680;
                            (iii) provides financial and credit 
                        training, loan restructurings and other 
                        tailored financial products and services 
                        designed to meet their needs;
                            (iv) provides a full range of financial 
                        products and services (including, but not 
                        limited to, traditional retail products such as 
                        savings and debit products, credit products 
                        such as mortgage loans, automobile loans, 
                        credit cards and bill payment services as well 
                        as specialized services such as home repair, 
                        weatherization and energy efficient upgrades) 
                        to meet the needs of the underbanked, the 
                        unbanked and consumers with credit scores at or 
                        below 680;
                            (v) provides programs designed to assure 
                        financial literacy and product-based, 
                        individualized financial education such as 
                        budgeting, financial planning, the mortgage 
                        process and financial disclosures, the credit 
                        scoring process, communications with financial 
                        institutions and rights of obligations of 
                        borrowers and lenders;
                            (vi) provides savings and other deposits 
                        and deposit products to the underbanked, the 
                        unbanked, consumers with a credit score of 680 
                        or below and a broader range of customers the 
                        interest on which is free from Federal income 
                        tax; and
                            (vii) has limits placed on its profits 
                        equal to a 20 percent return on equity (on a 
                        generally accepted accounting principles basis) 
                        per annum, and returns excess profits to 
                        decrease the costs of loans and other financial 
                        products and services for the underbanked, the 
                        unbanked and consumers with credit scores at or 
                        below 680.
                    (B) Exceptions.--No entity may be treated as a 
                bridging bank depository institution for purposes of 
                this Act unless the entity is--
                            (i) is either an insured depository 
                        institution or an insured credit union; and
                            (ii) is a member of a Federal Reserve bank 
                        or is a depository institution (as defined in 
                        section 19(b)(1)(A) of the Federal Reserve 
                        Act).
            (3) Included terms.--The terms ``insured depository 
        institution'', ``national bank'', ``savings association'', and 
        ``State bank'' have the same meaning as in section 3 of the 
        Federal Deposit Insurance Act.
            (4) Insured credit union.--The term ``insured credit 
        union'' has the same meaning as in section 101(7) of the 
        Federal Credit Union Act.
            (5) Unbanked.--The term ``unbanked'' means individuals or 
        families who do not have an account with an insured depository 
        institution or an insured credit union or a transaction account 
        with a money market mutual fund or brokerage firm.
            (6) Underbanked.--The term ``underbanked'' means 
        individuals or families who have a deposit account with an 
        insured depository institution or an insured credit union and 
        have limited or no ability to access nondepository services 
        from insured depository institutions or insured credit unions.

SEC. 4. CHARTERING OF BRIDGING BANK DEPOSITORY INSTITUTIONS.

    (a) De Novo Bridging Bank.--Only de novo bridging bank depository 
institutions may be created pursuant to this Act. A de novo bridging 
bank depository institution may become a bridging bank depository 
institution by obtaining a charter as such from its appropriate banking 
agency.
    (b) Licensing Requirements.--Any person desiring to establish a 
bridging bank depository institution shall submit an application and 
obtain prior appropriate banking agency approval.
    (c) Scope.--This section describes the procedures and requirements 
governing appropriate banking agency review and approval of an 
application to establish a bridging bank depository institution.
    (d) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Control.--The term ``control'' has the same meaning as 
        in section 2 of the Bank Holding Company Act.
            (2) Final approval.--The term ``final approval'', in 
        connection with a bridging bank depository institution, means 
        the appropriate banking agency action issuing a charter 
        certificate and authorizing a bridging bank depository 
        institution to open for business.
            (3) Holding company.--The term ``holding company'' means 
        any company that controls or proposes to control a bridging 
        bank depository institution whether or not the company is a 
        bank holding company under the Bank Holding Company Act of 
        1956.
            (4) Organizing group.--The term ``organizing group'' or 
        ``organizer'' means 5 or more persons acting on their own 
        behalf who apply to the appropriate banking agency for a 
        bridging bank depository institution charter.
            (5) Preliminary approval.--The term ``preliminary 
        approval'' means a decision by the appropriate banking agency 
        permitting an organizing group to go forward with the 
        organization of the proposed bridging bank depository 
        institution.
            (6) Well capitalized.--The term ``well capitalized'', when 
        used in connection with a bridging bank depository institution 
        means the bridging bank depository institution--
                    (A) has a total risk-based capital ratio of 10 
                percent or greater;
                    (B) has a Tier 1 risk-based capital ratio of 6 
                percent or greater;
                    (C) has a leverage ratio of 5 percent or greater; 
                and
                    (D) is not subject to any written agreement, order, 
                capital directive or prompt corrective action directive 
                from an appropriate banking agency.
    (e) Statutory Requirements.--
            (1) In general.--The name of a proposed bridging bank 
        depository institution shall include the word ``bridge'' or 
        ``bridging''. In determining whether to approve an application 
        to establish a bridging bank depository institution, the 
        appropriate banking agency shall verify that the proposed 
        bridging bank depository institution has complied with the 
        requirements contained in this chapter, including the following 
        requirements. A bridging bank depository institution shall--
                    (A) draft and file articles of association, 
                articles of incorporation, or other appropriate 
                organizational documents with the appropriate banking 
                agency;
                    (B) draft and file an organization certificate 
                containing specified information with the appropriate 
                banking agency;
                    (C) ensure that all capital stock is paid in prior 
                to commencing business;
                    (D) have at least five elected directors; and
                    (E) submit to the appropriate banking agency for 
                approval a business plan which, among other things, 
                provides in reasonable detail evidence of the 
                knowledge, understanding and experience of the board of 
                directors of the bridging bank depository institution 
                and the senior management of the bridging bank 
                depository institution of the unique underwriting 
                requirements not typically adequately addressed by 
                analytics and processes used for underwriting 
                extensions of credit for consumers with credit scores 
                at or above 680 for initially extending credit to the 
                underbanked, the unbanked and consumers with credit 
                scores at or below 680, and ongoing account management 
                practices that take into account the attributes of 
                risks specific to a consumers group which has 
                derogatory events in its credit history and is likely 
                to have subsequent derogatory events in its efforts to 
                graduate to a credit band with a higher credit score 
                and better credit profile.
            (2) Community reinvestment act of 1977.--The appropriate 
        banking agency shall take into account a proposed bridging bank 
        depository institution's description of how it will meet its 
        Community Reinvestment Act of 1977 objectives in the same way 
        that a national bank is required to meet its Community 
        Reinvestment Act objectives.
            (3) Graduation program.--The appropriate banking agency 
        shall take into account a proposed bridging bank depository 
        institution's program to develop and implement a phased 
        approach to moving consumers with credit scores at or below 680 
        from their current credit score into higher bands of credit 
        scores and the implementation of specialized policies and 
        procedures, practices and technology to encourage and support 
        the success of the customer Graduation Program. The Graduation 
        Program shall include an education component which provides in 
        reasonable detail what a consumer shall do to move from 1 
        credit scoring band to a higher credit scoring band, including 
        providing opportunities for the consumer to develop a favorable 
        credit history with the bridging bank depository institution.
    (f) Policy.--
            (1) In general.--The marketplace is normally the best 
        regulator of economic activity, and competition within the 
        marketplace promotes efficiency and better customer service. 
        Accordingly, the appropriate banking agency's policy shall be 
        to approve proposals to establish bridging bank depository 
        institutions that have a reasonable chance of success and that 
        will be operated in a safe and sound manner. It shall not be 
        the policy of the appropriate banking agency to ensure that a 
        proposal to establish a bridging bank depository institution is 
        without risk to the organizers or to protect existing 
        institutions from healthy competition from a new bridging bank 
        depository institution.
            (2) Policy considerations.--In evaluating an application to 
        establish a bridging bank depository institution, the 
        appropriate banking agency shall consider whether the proposed 
        bridging bank depository institution--
                    (A) has organizers who are familiar with applicable 
                Federal and State banking laws and regulations, and the 
                credit and training needs of the underbanked, the 
                unbanked and consumers with credit scores at or below 
                680;
                    (B) has competent management, including a board of 
                directors, with ability and experience relevant to the 
                types of services to be provided, especially the 
                ability and experience to design and provide financial 
                services to the underbanked, the unbanked and consumers 
                with credit scores at or below 680;
                    (C) has minimum capital of at least $10,000,000 and 
                that is sufficient to support the projected volume and 
                type of banking business that focuses on the needs of 
                the underbanked, the unbanked and consumers with credit 
                scores at or below 680;
                    (D) can reasonably be expected to achieve and 
                maintain profitability within a reasonable time;
                    (E) will be operated in a safe and sound manner; 
                and
                    (F) will be well capitalized for the first three 
                years after opening for business.
    (g) Additional Factors.--The appropriate banking agency may also 
consider additional factors listed in section 6 of the Federal Deposit 
Insurance Act, including the risk to the Deposit Insurance Fund, and 
whether the proposed bridging bank depository institution's corporate 
powers are consistent with the purposes of the Federal Deposit 
Insurance Act and this Act.
    (h) Appropriate Banking Agency Evaluation.--The appropriate banking 
agency shall evaluate as a whole a proposed bridging bank depository 
institution's organizing group and its business plan or operating plan. 
An organizing group and its business plan or operating plan shall be 
stronger in markets where economic conditions are marginal or 
competition is intense.
    (i) Organizing Group.--
            (1) In general.--Strong organizing groups generally include 
        diverse business and financial interests and community 
        involvement. An organizing group shall have the experience, 
        competence, willingness, and ability to be active in directing 
        the proposed bridging bank depository institution's affairs in 
        a safe and sound manner. The bridging bank depository 
        institution's initial board of directors generally should be 
        comprised of many, if not all, of the organizers. The business 
        plan or operating plan and other information supplied in the 
        application shall demonstrate an organizing group's collective 
        ability to establish and operate a successful bridging bank 
        depository institution in the economic and competitive 
        conditions of the market to be served. Each organizer should be 
        knowledgeable about the business plan or operating plan.
            (2) Management selection.--The initial board of directors 
        shall select competent senior executive officers before the 
        appropriate banking agency may grant final approval. As a 
        condition of the charter approval, the appropriate banking 
        agency shall have the right to object to and preclude the 
        hiring of any officer, or the appointment or election of any 
        director, for a 2-year period from the date the bridging bank 
        depository institution commences business.
    (j) Financial Resources.--
            (1) Each organizer shall have a history of responsibility, 
        personal honesty, and integrity. Personal wealth is not a 
        prerequisite to become an organizer or director of a bridging 
        bank depository institution.
            (2) Any financial or other business arrangement, direct or 
        indirect, between the organizing group or other insider and the 
        proposed bridging bank depository institution shall be on 
        nonpreferential terms.
    (k) Organizational Expenses.--Organizers are expected to contribute 
time and expertise to the organization of the bridging bank depository 
institution. Organizers should not bill excessive charges to the 
bridging bank depository institution for professional and consulting 
services or unduly rely upon these fees as a source of income.
    (l) No Contingency Fees.--A proposed bridging bank depository 
institution shall not pay any fee that is contingent upon an 
appropriate banking agency decision. Organizational expenses for denied 
applications are the sole responsibility of the organizing group.
    (m) Business Plan or Operating Plan.--
            (1) In general.--
                    (A) Submission required.--Organizers of a proposed 
                bridging bank depository institution shall submit a 
                business plan or operating plan that adequately 
                addresses the appropriate statutory and policy 
                considerations. The plan shall reflect sound banking 
                principles and demonstrate realistic assessments of 
                risk in light of economic and competitive conditions in 
                the market for serving the underbanked, the unbanked 
                and consumers with credit scores at or below 680.
                    (B) Offsetting deficiencies.--The appropriate 
                banking agency shall offset deficiencies in 1 factor by 
                strengths in 1 or more other factors so long as the 
                ability to serve the underbanked, the unbanked and 
                consumers with credit scores at or below 680 is the 
                most important factor and entitled to the greatest 
                weight.
            (2) Earnings prospects.--The organizing group shall submit 
        pro forma balance sheets and income statements as part of the 
        business plan or operating plan.
            (3) Management.--
                    (A) Evaluation of managerial ability.--The 
                organizing group shall include in the business plan or 
                operating plan information sufficient to permit the 
                appropriate banking agency to evaluate the overall 
                management ability of the organizing group, especially 
                the ability to provide financial services to the 
                underbanked, the unbanked, and consumers with credit 
                scores at or below 680.
                    (B) Agency objection to proposed officer or 
                director.--The organizing group may not hire an officer 
                or elect or appoint a director if the appropriate 
                banking agency objects to that person at any time prior 
                to the date the bridging bank depository institution 
                commences business.
            (4) Capital.--A proposed bridging bank depository 
        institution shall have initial capital of at least $10,000,000.
            (5) Community service.--
                    (A) The business plan or operating plan shall 
                indicate the organizing group's knowledge of and plans 
                for serving the underbanked, the unbanked and consumers 
                with credit scores at or below 680. The organizing 
                group shall evaluate the banking needs of the 
                underbanked, the unbanked and consumers with credit 
                scores at or below 680. The business plan or operating 
                plan shall demonstrate how the proposed bridging bank 
                depository institution responds to those needs 
                consistent with the safe and sound operation of the 
                bridging bank depository institution.
                    (B) As part of its business plan or operating plan, 
                the organizing group shall submit a statement that 
                demonstrates its plans to achieve Community 
                Reinvestment Act objectives.
                    (C) Because community support is important to the 
                long-term success of a bridging bank depository 
                institution, the organizing group shall include plans 
                for attracting and maintaining community support.
            (6) Safety and soundness.--The business plan or operating 
        plan shall demonstrate that the organizing group is aware of, 
        and understands, Federal and State banking laws and 
        regulations, and safe and sound banking operations and 
        practices in the context of serving the needs of the 
        underbanked, the unbanked and consumers with credit scores at 
        or below 680.
            (7) Procedures.--
                    (A) Prefiling meeting.--The appropriate banking 
                agency shall require a prefiling meeting with the 
                organizers of a proposed bridging bank depository 
                institution before the organizers file an application.
                    (B) Business plan or operating plan.--An organizing 
                group shall file a business plan or operating plan that 
                addresses the requirements of the appropriate banking 
                agency.
                    (C) Contact person.--The organizing group shall 
                designate a contact person to represent the organizing 
                group in all contacts with the appropriate banking 
                agency. The contact person shall be an organizer and 
                proposed director of the new bridging bank depository 
                institution or another person approved by the 
                appropriate banking agency.
            (8) Decision notification.--The appropriate banking agency 
        shall notify the contact person in writing of its decision on 
        an application.
            (9) Activities.--
                    (A) Establishment.--Before the appropriate banking 
                agency grants final approval, a proposed bridging bank 
                depository institution shall be established as a legal 
                entity. A proposed bridging bank depository institution 
                may offer and sell securities prior to appropriate 
                banking agency preliminary approval of the proposed 
                bridging bank depository institution's charter 
                application, provided that the proposed bridging bank 
                depository institution has filed articles of 
                association, articles of incorporation, or other 
                appropriate organizational documents, an organization 
                certificate, and a completed charter application and 
                the proposed bridging bank depository institution 
                complies with the securities offering regulations of 
                the Comptroller of the Currency, 12, Code of Federal 
                Regulations, 16 and any applicable State securities 
                law.
                    (B) Election of board.--In addition, the organizing 
                group shall elect a board of directors.
                    (C) Public offering.--For all capital obtained 
                through a public offering a proposed bridging bank 
                depository institution shall use an offering circular 
                that complies with the securities offering regulations 
                of the Comptroller of the Currency, 12, Code of Federal 
                Regulations, 16 and any applicable State securities 
                law.
                    (D) Capital.--A bridging bank depository 
                institution in organization shall raise its capital 
                before it commences business. Preliminary approval 
                expires if a bridging bank depository institution in 
                organization does not raise the required capital within 
                12 months from the date the appropriate banking agency 
                grants preliminary approval. Approval expires if the 
                bridging bank depository institution does not commence 
                business within 18 months from the date the appropriate 
                banking agency grants preliminary approval.

SEC. 5. LIMITATION ON POWERS OF APPROPRIATE BANKING AGENCY.

    Notwithstanding any other law or regulation, no bridging bank 
depository institution may be required to use risk weights or other 
capital adequacy measures which make the bridging bank depository 
institution unable to properly price its products and services or 
otherwise serve the underbanked, the unbanked and consumers with credit 
scores at or below 680, and no banking authority may require the use of 
risk weights or capital adequacy measures for a bridging bank 
depository institution that makes the bridging bank depository 
institution uncompetitive, makes its products and services too 
expensive for the underbanked, the unbanked or consumers with a credit 
score at or below 680 or otherwise prevents the bridging bank 
depository institution from serving the underbanked, the unbanked and 
consumers with a credit score at or below 680. Neither the Federal 
Deposit Insurance Corporation nor the National Credit Union 
Administration Board shall discriminate in its insurance premium 
charges against bridging bank depository institutions and shall charge 
bridging bank depository institutions the same premium that it would 
otherwise charge a traditional community bank or traditional credit 
union, as appropriate, which does not serve the underbanked, the 
unbanked or consumers with a credit score at 680 or below.

SEC. 6. COORDINATION AND PROMOTION OF THE COMMUNITY REINVESTMENT ACT OF 
              1977.

    To strengthen the effectiveness of the Community Reinvestment Act 
of 1977 and to encourage financial institutions subject to the 
Community Reinvestment Act of 1977 to support the efforts of bridging 
bank depository institutions, the appropriate banking agencies shall 
grant the highest level of weighted Community Reinvestment Act of 1977 
credit to financial institutions subject to such Act in each case, as 
appropriate, under the lending test where a loan is made to a bridging 
bank depository institution, under the investment test where an 
investment is made in a bridging bank depository institution, under the 
service test where a service is provided to a bridging bank depository 
institution and under the community development test when a donation is 
made to a bridging bank depository institution.

SEC. 7. ADDITIONAL POWERS OF A BRIDGING BANK DEPOSITORY INSTITUTION.

    In addition to the powers granted herein and in any regulations 
issued by the appropriate banking agency, each bridging bank depository 
institution shall have all the powers otherwise applicable to a 
national bank, if the bridging bank depository institution is chartered 
by the Comptroller of the Currency, to a savings association, if the 
bridging bank depository institution is chartered by the Director of 
the Office of Thrift Supervision, to an insured credit union, if the 
bridging bank depository institution is chartered by the National 
Credit Union Administration, or to a State bank, if the bridging bank 
depository institution is chartered by a State bank supervisor, and, 
except as provided in this Act or in any regulations issued pursuant to 
the authority granted in section 106, shall be subject to the 
regulations otherwise applicable to such national bank, savings 
association, insured credit union or State bank, as the case may be.

SEC. 8. REPORTS TO THE CONGRESS.

    Before the expiration of the 120-day period beginning on the date 
of the first issuance of a charter pursuant to this Act, and annually 
thereafter, each appropriate Federal banking agency shall report to the 
appropriate committees of the Congress, with respect to each such 
period--
            (1) an overview of actions taken by each such Federal 
        banking agency in furtherance of the purposes of this Act;
            (2) an overview of actions taken by bridging bank 
        depository institutions to serve the needs of the underbanked, 
        the unbanked, and consumers with credit scores at or below 680;
            (3) a description of the impact of the exercise of such 
        authority on the financial system, supported, to the extent 
        possible, by specific data;
            (4) an analysis of the effectiveness of the Graduation 
        Program, including an analysis of any progress made from 1 
        credit scoring band to a higher credit scoring band and the 
        number of consumers who moved from 1 credit scoring band to a 
        higher credit scoring band;
            (5) a description of challenges that remain in the 
        financial system for the underbanked, the unbanked, and 
        consumers with a credit score of 680 or below; and
            (6) recommendations on additional actions that should be 
        taken to further the purposes of this Act.

SEC. 9. REGULATIONS.

    (a) Regulations Required.--Before the end of the 180-day period 
beginning on the date of the enactment of this Act, each appropriate 
Federal banking agency, after consultation with each other appropriate 
Federal banking agency, and public notice and an opportunity for 
comment, shall prescribe regulations to carry out the purposes and 
provisions of this chapter, including regulations for the chartering of 
bridging bank depository institutions and prescribing the form and 
content of any application to be filed with such appropriate Federal 
banking agency in connection therewith.
    (b) Effective Date of Regulations.--The regulations prescribed 
under subsection (a) shall take effect not later than 1 month after the 
publication in final form.
    (c) Expedited Consideration.--Each appropriate Federal banking 
agency with chartering authority shall expedite its consideration of 
applications for the chartering of bridging bank depository 
institutions. The Federal Deposit Insurance Corporation and the 
National Credit Union Administration Board shall expedite its 
consideration of applications for deposit insurance with respect to 
applications to form de novo bridging bank depository institutions. The 
Board of Governors of the Federal Reserve System shall expedite its 
consideration of membership to the Federal Reserve System by bridging 
bank depository institutions.

SEC. 10. CORRESPONDING CHANGES TO INTERNAL REVENUE CODE OF 1986.

    (a) The Internal Revenue Code of 1986 is amended by inserting after 
section 103 the following new section:
``Sec. 103A. Interest on bridging bank depository institution deposits
    ``Interest on savings and other interest bearing deposits paid by 
bridging bank depository institutions (within the meaning of the 
Bridging Bank to Recovery Act of 2009) shall be exempt from income 
taxation now or hereafter imposed by the United States or by any State, 
territorial, or local taxing authority.''.
    (b) Section 108 of the Internal Revenue Code of 1986 (relating to 
income from discharge of indebtedness) is amended by adding at the end 
the following new subsection:
    ``(l) Bridging Bank Depository Institutions.--
            ``(1) In general.--Notwithstanding section 61, income from 
        the discharge of indebtedness in connection with the 
        modification or repurchase of a subprime debt instrument shall 
        not be included in gross income if a bridging bank depository 
        institution (within the meaning of the Bridging Bank to 
        Recovery Act of 2009) is the beneficial owner of such subprime 
        debt instrument at the time of the modification or repurchase.
            ``(2) Subprime debt instrument.--For purposes of this 
        subsection, the term `subprime debt instrument' shall be 
        defined from time to time by the Financial Institutions 
        Examination Council.
            ``(3) Authority to prescribe regulations.--The Secretary 
        may prescribe such regulations as may be necessary or 
        appropriate for purposes of applying this subsection.''.
    (c) Section 1001 of the Internal Revenue Code of 1986 (relating to 
the determination of amount of and recognition of gain or loss) is 
amended by adding at the end the following new subsection:
    ``(f) Bridging Bank Depository Institutions.--
            ``(1) In general.--A modification of the terms of a 
        subprime debt instrument shall not result in a sale or other 
        disposition of property within the meaning of this section if a 
        bridging bank depository institution (within the meaning of the 
        Bridging Bank to Recovery Act of 2009) is the beneficial owner 
        of such subprime debt instrument at the time of the 
        modification.
            ``(2) Subprime debt instrument.--For purposes of this 
        subsection, the term `subprime debt instrument' shall be 
        defined from time to time by the Financial Institutions 
        Examination Council.''.
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