[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1233 Introduced in House (IH)]

114th CONGRESS
  1st Session
                                H. R. 1233

 To provide regulatory relief to community financial institutions, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 4, 2015

 Mr. Luetkemeyer introduced the following bill; which was referred to 
                  the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To provide regulatory relief to community financial 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 ``Community Lending Enhancement and 
Regulatory Relief Act of 2015'' or the ``CLEARR Act of 2015''.

SEC. 2. EXCEPTION TO ANNUAL PRIVACY NOTICE REQUIREMENT UNDER THE GRAMM-
              LEACH-BLILEY ACT.

    Section 503 of the Gramm-Leach-Bliley Act (15 U.S.C. 6803) is 
amended by adding at the end the following:
    ``(f) Exception to Annual Notice Requirement.--A financial 
institution that--
            ``(1) provides nonpublic personal information only in 
        accordance with the provisions of subsection (b)(2) or (e) of 
        section 502 or regulations prescribed under section 504(b), and
            ``(2) has not changed its policies and practices with 
        regard to disclosing nonpublic personal information from the 
        policies and practices that were disclosed in the most recent 
        disclosure sent to consumers in accordance with this section,
shall not be required to provide an annual disclosure under this 
section until such time as the financial institution fails to comply 
with any criteria described in paragraph (1) or (2).''.

SEC. 3. COMMUNITY BANK MORTGAGE SERVICING ASSET CAPITAL REQUIREMENTS 
              STUDY.

    (a) Definitions.--For purposes of this section:
            (1) Banking institution.--The term ``banking institution'' 
        means an insured depository institution, Federal credit union, 
        State credit union, bank holding company, or savings and loan 
        holding company.
            (2) Basel iii capital requirements.--The term ``Basel III 
        capital requirements'' means the Global Regulatory Framework 
        for More Resilient Banks and Banking Systems issued by the 
        Basel Committee on Banking Supervision on December 16, 2010, as 
        revised on June 1, 2011.
            (3) Federal banking agencies.--The term ``Federal banking 
        agencies'' means the Board of Governors of the Federal Reserve 
        System, the Office of the Comptroller of the Currency, the 
        Federal Deposit Insurance Corporation, and the National Credit 
        Union Administration.
            (4) Mortgage servicing asset.--The term ``mortgage 
        servicing asset'' means those assets that result from contracts 
        to service loans secured by real estate, where such loans are 
        owned by third parties.
            (5) NCUA capital requirements.--The term ``NCUA capital 
        requirements'' means the proposed rule of the National Credit 
        Union Administration titled ``Risk-Based Capital'' (80 Fed. 
        Reg. 4340; January 27, 2015).
            (6) Nonsystemic banking institution.--The term 
        ``nonsystemic banking institution'' means any banking 
        institution other than an institution identified by the 
        Financial Stability Board as a ``global systemically important 
        bank''.
            (7) Other definitions.--
                    (A) Banking definitions.--The terms ``bank holding 
                company'', ``insured depository institution'', and 
                ``savings and loan holding company'' have the meanings 
                given such terms, respectively, under section 3 of the 
                Federal Deposit Insurance Act (12 U.S.C. 1813).
                    (B) Credit union definitions.--The terms ``Federal 
                credit union'' and ``State credit union'' have the 
                meanings given such terms, respectively, under section 
                101 of the Federal Credit Union Act (12 U.S.C. 1752).
    (b) Study of the Appropriate Capital for Mortgage Servicing 
Assets.--
            (1) In general.--The Federal banking agencies shall, 
        jointly, conduct a study of the appropriate capital 
        requirements for mortgage servicing assets for nonsystemic 
        banking institutions.
            (2) Issues to be studied.--The study required by this 
        subsection shall include, with a specific focus on nonsystemic 
        banking institutions--
                    (A) the risk to banking institutions of holding 
                mortgage servicing assets;
                    (B) the history of the market for mortgage 
                servicing assets, including particularly the market for 
                such assets in the period of the financial crisis;
                    (C) the ability of banking institutions to 
                establish a value for their mortgage servicing assets 
                through periodic sales or other means;
                    (D) regulatory approaches to mortgage servicing 
                assets in addition to capital requirements that could 
                be used to address concerns about the value of and 
                ability to sell mortgage servicing assets;
                    (E) the impact of imposing the Basel III capital 
                requirements and the NCUA capital requirements on 
                nonsystemic banking institutions on their ability to 
                compete in the mortgage servicing business, including 
                the need for economies of scale to compete in that 
                business, and on their ability to provide service to 
                consumers to whom they have made a mortgage loan;
                    (F) an analysis of what the mortgage servicing 
                marketplace would look like if the Basel III capital 
                requirements and the NCUA capital requirements on 
                mortgage servicing assets were fully implemented;
                    (G) the significance of problems with mortgage 
                servicing assets, if any, in banking institution 
                failures and problem banking institutions, including 
                specifically identifying failed banking institutions 
                where mortgage servicing assets contributed to the 
                failure; and
                    (H) an analysis of the relevance of the Basel III 
                capital requirements and the NCUA capital requirements 
                on mortgage servicing assets to the banking systems of 
                other significant developed countries.
            (3) Report to congress.--Not later than the end of the 1-
        year period beginning on the date of the enactment of this Act, 
        the Federal banking agencies shall issue a report to the 
        Committee on Banking, Housing, and Urban Affairs of the Senate 
        and the Committee on Financial Services of the House of 
        Representatives containing--
                    (A) the results of the study required under 
                paragraph (1); and
                    (B) any analysis on the specific issue of mortgage 
                servicing assets undertaken by the Federal banking 
                agencies prior to finalizing regulations implementing 
                the Basel III capital requirements and the NCUA capital 
                requirements.
    (c) Delay of Rulemaking.--
            (1) Rules on mortgage servicing assets.--Notwithstanding 
        any other provision of law, no regulation to implement the 
        Basel III capital requirements or the NCUA capital requirements 
        with respect to mortgage servicing assets for nonsystemic 
        banking institutions shall take effect before the end of the 6-
        month period beginning on the date the report is issued under 
        subsection (b)(3).
            (2) Final rule requirements.--Before any final rule is 
        issued by a Federal banking agency with respect to capital 
        requirements on mortgage servicing assets for nonsystemic 
        banking institutions, the Federal banking agency shall--
                    (A) if the related proposed rule was issued before 
                the date on which the report is issued under subsection 
                (b)(3), issue a new proposed rule for public comment; 
                and
                    (B) consider regulatory approaches to mortgage 
                servicing assets that could address concerns about the 
                value of and ability to sell mortgage servicing assets.

SEC. 4. COMMUNITY INSTITUTION MORTGAGE RELIEF.

    (a) Exemption From Escrow Requirements for Loans Held by Small 
Creditors.--Section 129D(c) of the Truth in Lending Act (15 U.S.C. 
1639d(c)), as added by section 1461(a) of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act, is amended--
            (1) by redesignating paragraphs (1), (2), (3), and (4) as 
        subparagraphs (A), (B), (C), and (D) and moving such 
        subparagraphs 2 ems to the right;
            (2) by striking ``The Board'' and inserting the following:
            ``(1) In general.--The Board''; and
            (3) by adding at the end the following new paragraph:
    ``(2) Treatment of Loans Held by Smaller Creditors.--The Board 
shall, by regulation, exempt from the requirements of subsection (a) 
any loan secured by a first lien on a consumer's principle dwelling, if 
such loan is held by a creditor with assets of $10,000,000,000 or 
less.''.
    (b) Modification to Exemption for Small Servicers of Mortgage 
Loans.--Section 6 of the Real Estate Settlement Procedures Act of 1974 
(12 U.S.C. 2605) is amended by adding at the end the following:
    ``(n) Small Servicer Exemption.--The Bureau shall, by regulation, 
provide exemptions to, or adjustments for, the provisions of this 
section for servicers that annually service 20,000 or fewer mortgage 
loans, in order to reduce regulatory burdens while appropriately 
balancing consumer protections.''.

SEC. 5. ACCESS TO AFFORDABLE MORTGAGES.

    (a) Exemption From Property Appraisal Requirements for Lower-Cost 
Dwellings.--Section 129H of the Truth in Lending Act (15 U.S.C. 1639h) 
is amended by adding at the end the following new subsection:
    ``(g) Exemption for Higher-Risk Mortgages.--This section shall not 
apply to a higher-risk mortgage loan of $250,000 or less if such loan 
appears on the balance sheet of the creditor of such loan for a period 
of not less than 3 years.''.
    (b) Exemption From Penalties for Failure To Report Appraisers.--
Paragraph (1) of section 129E(k) of the Truth in Lending Act (15 U.S.C. 
1639e(k)(1)) is amended by inserting after ``this section'' the 
following: ``, other than subsection (e),''.
    (c) Exemption From Appraisal Standard Requirements for Lower-Cost 
Dwellings.--Section 1110 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3339) is amended--
            (1) by striking ``Each Federal financial institutions 
        regulatory agency'' and inserting the following:
    ``(a) Real Estate Appraisals in Connection With Federally Related 
Transactions.--Each Federal financial institutions regulatory agency'';
            (2) by striking ``Each such agency or instrumentality'' and 
        inserting the following:
    ``(b) Additional Standards.--Each such agency or instrumentality 
described under subsection (a)''; and
            (3) by adding at the end the following new subsection:
    ``(c) Exception for Certain Higher-Risk Mortgage Loans.--Standards 
prescribed under this section shall not apply to a real estate 
appraisal or evaluation conducted in connection with a higher-risk 
mortgage loan (as defined in section 129H(f) of the Truth in Lending 
Act (15 U.S.C. 1639h(f))) of $250,000 or less if such loan appears on 
the balance sheet of the creditor of such loan for a period of not less 
than 3 years.''.

SEC. 6. SHORT FORM CALL REPORT AND EXAMINATION CYCLE.

    (a) In General.--Section 7(a) of the Federal Deposit Insurance Act 
(12 U.S.C. 1817(a)) is amended by adding at the end the following:
            ``(12) Short form reporting.--
                    ``(A) In general.--The appropriate Federal banking 
                agencies shall issue regulations allowing for a reduced 
                reporting requirement for covered depository 
                institutions when making the first and third report of 
                condition for a year, as required pursuant to paragraph 
                (3).
                    ``(B) Covered depository institution defined.--For 
                purposes of this paragraph, the term `covered 
                depository institution' means an insured depository 
                institution that--
                            ``(i) has a CAMELS composite rating of 1 or 
                        2 under the Uniform Financial Institutions 
                        Rating System (or an equivalent rating under a 
                        comparable rating system) as of the most recent 
                        examination of such institution; and
                            ``(ii) satisfies such other criteria as the 
                        appropriate Federal banking agencies determine 
                        appropriate.''.
    (b) Longer Examination Cycle.--Section 10(d) of the Federal Deposit 
Insurance Act (12 U.S.C. 1820(d)) is amended--
            (1) by redesignating paragraphs (5) through (10) as 
        paragraphs (6) through (11), respectively;
            (2) in each of paragraphs (8) and (9), as so redesignated, 
        by striking ``paragraph (6)'' and inserting ``paragraph (7)''; 
        and
            (3) by inserting after paragraph (4) the following:
            ``(5) 24-month rule for certain institutions.--With respect 
        to an insured depository institution and notwithstanding 
        paragraph (4), paragraphs (1), (2), and (3) shall apply with 
        `24-month' substituted for `12-month' if the insured depository 
        institution--
                    ``(A) meets the requirements under subparagraphs 
                (B) through (D) of paragraph (4); and
                    ``(B) is a covered depository institution, as 
                defined under section 7(a)(12)(B).''.

SEC. 7. COORDINATION AMONG FINANCIAL INSTITUTIONS.

    Chapter 53 of title 31, United States Code, is amended--
            (1) by inserting after section 5332 the following new 
        section:
``Sec. 5333. Coordination among financial institutions
    ``(a) In General.--In the case of an entry received via an 
automated clearing house, no receiving depository financial institution 
shall be required to verify that the entry is not a prohibited 
transaction, if the originating depository financial institution has 
warranted, pursuant to the automated clearing house rules governing 
such entry or otherwise, that the originating depository financial 
institution has complied with the sanctions programs administered by 
the Office of Foreign Assets Control in connection with such entry.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Automated clearing house.--The term `automated 
        clearing house' means a funds transfer system governed by rules 
        which provide for the interbank clearing of electronic entries 
        for participating depository financial institutions.
            ``(2) Depository financial institution.--The term 
        `depository financial institution' means--
                    ``(A) any insured depository institution, as such 
                term is defined under section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813);
                    ``(B) any depository institution which is eligible 
                to apply to become an insured depository institution 
                under section 5 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1815);
                    ``(C) any insured credit union, as defined in 
                section 101 of the Federal Credit Union Act (12 U.S.C. 
                1752); and
                    ``(D) any credit union which is eligible to apply 
                to become an insured credit union pursuant to section 
                201 of the Federal Credit Union Act (12 U.S.C. 1781).
            ``(3) Entry.--The term `entry' means an order to request 
        for the transfer of funds through an automated clearing house.
            ``(4) Originating depository financial institution.--The 
        term `originating depository financial institution' means a 
        depository financial institution that transmits entries via an 
        automated clearing house for transmittal to a receiving 
        depository financial institution.
            ``(5) Prohibited transaction.--The term `prohibited 
        transaction' means a funds transfer originated on behalf of a 
        person to or from whom funds transfers are restricted by a 
        sanctions program administered by the Office of Foreign Assets 
        Control, including persons appearing on the list of specially 
        designated nationals and blocked persons maintained by the 
        Office of Foreign Assets Control.
            ``(6) Receiving depository financial institution.--The term 
        `receiving depository financial institution' means a depository 
        financial institution that receives entries via an automated 
        clearing house from an originating depository financial 
        institution for debit or credit to the accounts of its 
        customers.''; and
            (2) in the table of contents for such chapter by inserting 
        after the item relating to section 5332 the following new item:

``5333. Coordination among financial institutions.''.

SEC. 8. CHANGES REQUIRED TO SMALL BANK HOLDING COMPANY POLICY STATEMENT 
              ON ASSESSMENT OF FINANCIAL AND MANAGERIAL FACTORS.

    Before the end of the 6-month period beginning on the date of the 
enactment of this Act, the Board of Governors of the Federal Reserve 
System shall revise the Small Bank Holding Company Policy Statement on 
Assessment of Financial and Managerial Factors (12 C.F.R. part 225--
appendix C) to raise the consolidated asset threshold under such policy 
statement from $1,000,000,000 (as adjusted by Public Law 113-250) to 
$5,000,000,000.

SEC. 9. SAFE HARBOR FOR CERTAIN LOANS HELD ON PORTFOLIO.

    (a) In General.--Section 129C of the Truth in Lending Act (15 
U.S.C. 1639c) is amended by adding at the end the following:
    ``(j) Safe Harbor for Certain Loans Held on Portfolio.--
            ``(1) Safe harbor for creditors that are depository 
        institutions.--
                    ``(A) In general.--A creditor that is a depository 
                institution shall not be subject to suit for failure to 
                comply with subsection (a), (c)(1), or (f)(2) of this 
                section or section 129H with respect to a residential 
                mortgage loan, and the banking regulators shall treat 
                such loan as a qualified mortgage, if--
                            ``(i) the creditor has, since the 
                        origination of the loan, held the loan on the 
                        balance sheet of the creditor; and
                            ``(ii) all prepayment penalties with 
                        respect to the loan comply with the limitations 
                        described under subsection (c)(3).
                    ``(B) Exception for certain transfers.--In the case 
                of a depository institution that transfers a loan 
                originated by that institution to another depository 
                institution by reason of the bankruptcy or failure of 
                the originating depository institution or the purchase 
                of the originating depository institution, the 
                depository institution transferring such loan shall be 
                deemed to have complied with the requirement under 
                subparagraph (A)(i).
            ``(2) Safe harbor for mortgage originators.--A mortgage 
        originator shall not be subject to suit for a violation of 
        section 129B(c)(3)(B) for steering a consumer to a residential 
        mortgage loan if--
                    ``(A) the creditor of such loan is a depository 
                institution and has informed the mortgage originator 
                that the creditor intends to hold the loan on the 
                balance sheet of the creditor for the life of the loan; 
                and
                    ``(B) the mortgage originator informs the consumer 
                that the creditor intends to hold the loan on the 
                balance sheet of the creditor for the life of the loan.
            ``(3) Definitions.--For purposes of this subsection:
                    ``(A) Banking regulators.--The term `banking 
                regulators' means the Federal banking agencies, the 
                Bureau, and the National Credit Union Administration.
                    ``(B) Depository institution.--The term `depository 
                institution' has the meaning given that term under 
                section 19(b)(1) of the Federal Reserve Act (12 U.S.C. 
                505(b)(1)).
                    ``(C) Federal banking agencies.--The term `Federal 
                banking agencies' has the meaning given that term under 
                section 3 of the Federal Deposit Insurance Act.''.
    (b) Rule of Construction.--Nothing in the amendment made by this 
section may be construed as preventing a balloon loan from qualifying 
for the safe harbor provided under section 129C(j) of the Truth in 
Lending Act if the balloon loan otherwise meets all of the requirements 
under such subsection (j), regardless of whether the balloon loan meets 
the requirements described under clauses (i) through (iv) of section 
129C(b)(2)(E) of such Act.
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