[Congressional Record Volume 140, Number 32 (Monday, March 21, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 21, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
      COMMUNITY DEVELOPMENT BANKING AND FINANCIAL INSTITUTIONS ACT

  The text of the bill [H.R. 3474] to reduce administrative 
requirements for insured depository institutions to the extent 
consistent with safe and sound banking practices, to facilitate the 
establishment of community development financial institutions, and for 
other purposes, as passed by the Senate on March 17, 1994, is as 
follows:

                               H.R. 3474

       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 ``Community 
     Development, Credit Enhancement, and Regulatory Improvement 
     Act of 1994''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:
    Sec. 1. Short title; table of contents.............................

         TITLE I--COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION

 Subtitle A--Community Development Banking and Financial Institutions 
                                  Act

Sec. 101. Short title.
Sec. 102. Findings and purposes.
Sec. 103. Definitions.
Sec. 104. Establishment of national fund for community development 
              banking.
Sec. 105. Applications for assistance.
Sec. 106. Community partnerships.
Sec. 107. Selection of institutions.
Sec. 108. Assistance provided by the Fund.
Sec. 109. Community development training.
Sec. 110. Encouragement of private entities.
Sec. 111. Clearinghouse function.
Sec. 112. Recordkeeping, reports, and audits.
Sec. 113. Investment of receipts and proceeds.
Sec. 114. Inspector General.
Sec. 115. Capitalization assistance to enhance liquidity.
Sec. 116. Community development revolving loan fund for credit unions.
Sec. 117. Regulations.
Sec. 118. Authorization of appropriations.

            Subtitle B--Home Ownership and Equity Protection

Sec. 151. Consumer protections for high cost mortgages.
Sec. 152. Civil liability.
Sec. 153. Reverse mortgage disclosure.
Sec. 154. Regulations; effective date.

               TITLE II--SMALL BUSINESS CAPITAL FORMATION

             Subtitle A--Small Business Loan Securitization

Sec. 201. Short title.
Sec. 202. Small business related security.
Sec. 203. Applicability of margin requirements.
Sec. 204. Borrowing in the course of business.
Sec. 205. Small business related securities as collateral.
Sec. 206. Investment by depository institutions.
Sec. 207. Preemption of State law.
Sec. 208. Insured depository institution capital requirements for 
              transfers of small business obligations.
Sec. 209. Transactions in small business related securities by employee 
              benefit plans.
Sec. 210. Sense of the Senate on taxation of small business loan 
              investment conduits.

             Subtitle B--Small Business Capital Enhancement

Sec. 251. Findings and purposes.
Sec. 252. Definitions.
Sec. 253. Approving States for participation.
Sec. 254. Participation agreements.
Sec. 255. Terms of participation agreements.
Sec. 256. Reports.
Sec. 257. Reimbursement by the Secretary.
Sec. 258. Reimbursement to the Secretary.
Sec. 259. Regulations.
Sec. 260. Authorization of appropriations.

       TITLE III--PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT

Sec. 301. Incorporated definitions.
Sec. 302. Administrative consideration of burden with new regulations.
Sec. 303. Streamlining of regulatory requirements.
Sec. 304. Elimination of duplicative filings.
Sec. 305. Coordinated and unified examinations.
Sec. 306. Eighteen-month examination rule for certain small 
              institutions.
Sec. 307. Call report simplification.
Sec. 308. Repeal of publication requirements.
Sec. 309. Regulatory appeals process.
Sec. 310. Electronic filing of currency transaction reports.
Sec. 311. Bank Secrecy Act publication requirements.
Sec. 312. Exemption of business loans from Real Estate Settlement 
              Procedures Act requirements.
Sec. 313. Flexibility in choosing boards of directors.
Sec. 314. Holding company audit requirements.
Sec. 315. State regulation of real estate appraisals.
Sec. 316. Acceleration of effective date for interaffiliate 
              transactions.
Sec. 317. Collateralization of public deposits.
Sec. 318. Elimination of stock valuation provision.
Sec. 319. Expedited procedures for forming a bank holding company.
Sec. 320. Exemption of certain holding company formations from 
              registration under the Securities Act of 1933.
Sec. 321. Reduction of post-approval waiting period for bank holding 
              company acquisitions.
Sec. 322. Reduction of post-approval waiting period for bank mergers.
Sec. 323. Bankers' banks.
Sec. 324. Bank Service Corporation Act amendment.
Sec. 325. Merger transaction reports.
Sec. 326. Credit card accounts receivable sales.
Sec. 327. Limiting potential liability on foreign accounts.
Sec. 328. Amendments to outdated dividend provisions.
Sec. 329. Elimination of duplicative disclosures for home equity loans.
Sec. 330. Report on capital standards and their impact on the economy.
Sec. 331. Studies on the impact of the payment of interest on reserves.
Sec. 332. Study and report on streamlined lending process for consumer 
              benefit.
Sec. 333. Repeal of outdated charter requirement for national banks.
Sec. 334. Inclusion of Comptroller of the Currency; clarification of 
              revised statutes.
Sec. 335. Commemoration of 1995 Special Olympic World Games.
Sec. 336. Exemption for business accounts.
Sec. 337. Board discretion regarding check-related fraud.
Sec. 338. Civil liability under truth in savings.
Sec. 339. Insider lending.
Sec. 340. Revisions of standards.
Sec. 341. Alternative rules for radio advertising of consumer leases.
Sec. 342. Deposit broker registration.
Sec. 343. Extension of management interlocks grandfather clause.
Sec. 344. Clarification of provision relating to administrative 
              autonomy.
Sec. 345. Consumer surveys and report.
Sec. 346. Simplified disclosure for existing depositors.
Sec. 347. Commercial mortgage related securities.
Sec. 348. Offset of costs of certain programs.

                       TITLE IV--MONEY LAUNDERING

Sec. 401. Short title.
Sec. 402. Reform of CTR exemption requirements to reduce number and 
              size of reports consistent with effective law 
              enforcement.
Sec. 403. Single designee for reporting of suspicious transactions.
Sec. 404. Improvement of identification of money laundering schemes.
Sec. 405. Negotiable instruments drawn on foreign banks subject to 
              recordkeeping and reporting requirements.
Sec. 406. Imposition of civil money penalties by appropriate Federal 
              banking agencies.
Sec. 407. Uniform State licensing and regulation of check cashing, 
              currency exchange, and money transmitting businesses.
Sec. 408. Registration of money transmitting businesses to promote 
              effective law enforcement.
Sec. 409. Criminal and civil penalty for structuring domestic and 
              international transactions.
Sec. 410. GAO study of chasiers' checks.

               TITLE V--FAIR TRADE IN FINANCIAL SERVICES

Sec. 501. Short title.
Sec. 502. Effectuating the principle of national treatment for banking 
              organizations.
Sec. 503. Effectuating the principle of national treatment for 
              securities organizations.
Sec. 504. Effectuating the principle of national treatment for insurers 
              and reinsurers.
Sec. 505. Financial interdependence study.
Sec. 506. Federal Reserve report on the Foreign Bank Supervision 
              Enhancement Act of 1991.
Sec. 507. Conforming amendments.

               TITLE VI--NATIONAL FLOOD INSURANCE REFORM

Sec. 601. Short title.
Sec. 602. Congressional findings.
Sec. 603. Definition.

                        Subtitle A--Definitions

Sec. 611. Flood Disaster Protection Act of 1973.
Sec. 612. National Flood Insurance Act of 1968.

           Subtitle B--Compliance and Increased Participation

Sec. 621. Expanded flood insurance purchase requirements.
Sec. 622. Excrow of flood insurance payments.
Sec. 623. Notice requirements.
Sec. 624. Placement of flood insurance by regulated lending 
              institution, Federal agency lender, or servicer.
Sec. 625. Standard flood hazard determination forms.
Sec. 626. Examination regarding compliance by regulated lending 
              institutions.
Sec. 627. Penalties and corrective actions for failure to require flood 
              insurance, escrow, or notify.
Sec. 628. Financial institutions examination council.
Sec. 629. Conforming amendment.

Subtitle C--Ratings and Incentives for Community Floodplain Management 
                                Programs

Sec. 631. Community rating system and incentives for community 
              floodplain management.
Sec. 632. Funding.
Sec. 633. Reasonable fees.

           Subtitle D--Mitigation of Flood and Erosion Risks

Sec. 641. Mitigation assistance in Federal insurance administration.
Sec. 642. Authorization of national flood and erosion mitigation funds 
              under section 1362.
Sec. 643. State and community mitigation assistance program.
Sec. 644. Repeal of program for purchase of certain insured properties.
Sec. 645. Termination of erosion threatened structures program.
Sec. 646. Congressional findings and declaration of purchase under the 
              National Flood Insurance Act of 1968.

                 Subtitle E--Flood Insurance Task Force

Sec. 651. Flood insurance interagency task force.

                  Subtitle F--Miscellaneous Provisions

Sec. 661. Maximum flood insurance coverage amounts.
Sec. 662. Additional coverage for compliance with land use and control 
              measures.
Sec. 663. Flood insurance program arrangements with private insurance 
              entities.
Sec. 664. Updating of flood insurance rate maps.
Sec. 665. Evaluation of erosion hazards.
Sec. 666. Coordination of flood insurance rate map revisions and 
              updates with coastal zone management programs.
Sec. 667. Technical Mapping Advisory Council.
Sec. 668. Funding for increased administrative and operational 
              responsibilities.
Sec. 669. Separate account for National Flood Insurance Fund.
Sec. 670. Nonwaiver of flood purchase requirement for recipients of 
              Federal disaster assistance.
Sec. 671. Insurance waiting period.
Sec. 672. Agricultural structures.
Sec. 673. Implementation review by the director.
Sec. 674. Regulations.
Sec. 675. Prohibited flood disaster assistance.

                     TITLE VII--GENERAL PROVISIONS

Sec. 701. Study of effect of the Northern spotted owl on small business 
              concerns.
Sec. 702. Negative information about consumer.
Sec. 703. United Nations resolutions concerning Jerusalem.
Sec. 704. Amendment to the Federal Reserve Act.
Sec. 705. Oversight hearings.
Sec. 706. Insurance transfer agreement.
         TITLE I--COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION
 Subtitle A--Community Development Banking and Financial Institutions 
                                  Act

     SEC. 101. SHORT TITLE.

       This subtitle may be cited as the ``Community Development 
     Banking and Financial Institutions Act of 1994''.

     SEC. 102. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) many of the Nation's urban, rural, and Native American 
     communities face critical social and economic problems 
     arising in part from the lack of economic growth, people 
     living in poverty, and the lack of employment and other 
     opportunities;
       (2) the restoration and maintenance of the economies of 
     these communities will require coordinated development 
     strategies, intensive supportive services, and increased 
     access to equity investments and loans for development 
     activities, including investment in businesses, housing, 
     commercial real estate, human development, and other 
     activities that promote the long-term economic and social 
     viability of the community; and
       (3) community development financial institutions have 
     proven their ability to identify and respond to community 
     needs for equity investments, loans, and development 
     services.
       (b) Purpose.--The purpose of this subtitle is to create a 
     Community Development Financial Institutions Fund that will 
     promote economic revitalization and community development 
     through a program of investment in and assistance to 
     community development financial institutions, including 
     enhancing the liquidity of community development financial 
     institutions.

     SEC. 103. DEFINITIONS.

       For purposes of this subtitle, the following definitions 
     shall apply:
       (1) Appropriate federal banking agency.--The term 
     ``appropriate Federal banking agency'' has the same meaning 
     as in section 3 of the Federal Deposit Insurance Act, and 
     also includes the National Credit Union Administration Board 
     with respect to insured credit unions.
       (2) Affiliate.--The term ``affiliate'' has the same meaning 
     as in section 2(k) of the Bank Holding Company Act of 1956.
       (3) Community development financial institution.--
       (A) In general.--The term ``community development financial 
     institution'' means a person (other than an individual) 
     that--
       (i) has a primary mission of promoting community 
     development;
       (ii) serves an investment area or targeted population;
       (iii) directly, through an affiliate, or through a 
     community partnership, provides development services and 
     equity investments or loans;
       (iv) maintains, through representation on its governing 
     board or otherwise, accountability to residents of its 
     investment area or targeted population; and
       (v) is not an agency or instrumentality of the United 
     States, or of any State or political subdivision of a State.
       (B) Qualification of affiliates.--A subsidiary may only 
     qualify as a community development financial institution if 
     its parent company and the subsidiaries thereof (on a 
     consolidated basis) also qualify as community development 
     financial institutions.
       (4) Community partner.--The term ``community partner'' 
     means a person (other than an individual) that provides 
     loans, equity investments, or development services, including 
     a depository institution holding company, an insured 
     depository institution, an insured credit union, a nonprofit 
     organization, a State or local government agency, a quasi-
     governmental entity, and an investment company authorized to 
     operate pursuant to the Small Business Investment Act of 
     1958.
       (5) Community partnership.--The term ``community 
     partnership'' means an agreement between a community 
     development financial institution and a community partner to 
     provide development services and loans or equity investments 
     to an investment area or targeted population.
       (6) Depository institution holding company.--The term 
     ``depository institution holding company'' has the same 
     meaning as in section 3 of the Federal Deposit Insurance Act.
       (7) Development services.--The term ``development 
     services'' means activities that promote community 
     development and are integral to lending or investment 
     activities, including--
       (A) business planning;
       (B) financial and credit counseling; and
       (C) marketing and management assistance.
       (8) Insured community development financial institution.--
     The term ``insured community development financial 
     institution'' means any community development financial 
     institution that is an insured depository institution or an 
     insured credit union.
       (9) Insured credit union.--The term ``insured credit 
     union'' has the same meaning as in section 101(7) of the 
     Federal Credit Union Act.
       (10) Insured depository institution.--The term ``insured 
     depository institution'' has the same meaning as in section 3 
     of the Federal Deposit Insurance Act.
       (11) Investment area.--The term ``investment area'' means a 
     geographic area that--
       (A)(i) meets objective criteria of economic distress 
     developed by the Community Development Financial Institutions 
     Fund, which may include the percentage of low-income families 
     or the extent of poverty, the rate of unemployment or 
     underemployment, lag in population growth, and extent of 
     blight and disinvestment; and
       (ii) has significant unmet needs for loans or equity 
     investments;
       (B) is located in an empowerment zone or enterprise 
     community designated under section 1391 of the Internal 
     Revenue Code of 1986;
       (C) is located on an Indian reservation, as defined in 
     section 3(d) of the Indian Financing Act of 1974 or section 
     4(10) of the Indian Child Welfare Act of 1978; or
       (D) is located in an area which is not a metropolitan 
     statistical area and which has experienced a decrease in 
     population of not less than 10 percent (as determined in the 
     most recent decennial census) between 1980 and 1990.
       (12) Low-income.--The term ``low-income'' means having an 
     income, adjusted for family size, of not more than--
       (A) for metropolitan areas, 80 percent of the area median 
     income; and
       (B) for nonmetropolitan areas, the greater of--
       (i) 80 percent of the area median income; or
       (ii) 80 percent of the statewide nonmetropolitan area 
     median income.
       (13) Parent company.--The term ``parent company'' means any 
     company that directly or indirectly controls another company.
       (14) Subsidiary.--The term ``subsidiary'' has the same 
     meaning as in section 3 of the Federal Deposit Insurance Act, 
     except that a community development financial institution 
     that is a corporation shall not be considered to be a 
     subsidiary of any insured depository institution or 
     depository institution holding company that controls less 
     than 25 percent of any class of the voting shares of such 
     corporation, and does not otherwise control in any manner the 
     election of a majority of the directors of the corporation.
       (15) Targeted population.--The term ``targeted population'' 
     means low-income persons or persons who otherwise lack 
     adequate access to loans or equity investments.

     SEC. 104. ESTABLISHMENT OF NATIONAL FUND FOR COMMUNITY 
                   DEVELOPMENT BANKING.

       (a) Establishment.--
       (1) In general.--There is established a corporation to be 
     known as the Community Development Financial Institutions 
     Fund (hereafter in this subtitle referred to as the ``Fund'') 
     that shall have the duties and responsibilities specified by 
     this subtitle. The Fund shall have succession until 
     dissolved. The offices of the Fund shall be in Washington, 
     D.C. The Fund shall not be affiliated with or be within any 
     other agency or department of the Federal Government.
       (2) Wholly owned government corporation.--The Fund shall be 
     a wholly owned Government corporation in the executive branch 
     and shall be treated in all respects as an agency of the 
     United States, except as otherwise provided in this subtitle.
       (b) Management of Fund.--
       (1) Appointment of administrator and deputy 
     administrator.--The management of the Fund shall be vested in 
     an Administrator, who shall be appointed by the President, by 
     and with the advice and consent of the Senate. The 
     Administrator shall not engage in any other business or 
     employment during service as the Administrator. The President 
     may appoint a Deputy Administrator by and with the advice and 
     consent of the Senate. The Deputy Administrator shall serve 
     as the acting Administrator of the Fund during the absence or 
     disability of the Administrator or in the event of a vacancy 
     in the office of the Administrator.
       (2) Chief financial officer.--The Administrator shall 
     appoint a chief financial officer who shall oversee the 
     financial management activities of the Fund.
       (3) Other officers.--The Administrator may appoint such 
     other officers and employees of the Fund as the Administrator 
     determines to be necessary or appropriate.
       (c) General Powers.--In carrying out the functions of the 
     Fund, the Administrator--
       (1) shall have all necessary and proper authority to carry 
     out this subtitle;
       (2) shall have the power to adopt, alter, and use a 
     corporate seal for the Fund, which shall be judicially 
     noticed;
       (3) may adopt, amend, and repeal bylaws, rules, and 
     regulations governing the manner in which business of the 
     Fund may be conducted and such rules and regulations as may 
     be necessary or appropriate to implement this subtitle;
       (4) may enter into, perform, and enforce such agreements, 
     contracts, and transactions as may be deemed necessary or 
     appropriate to the conduct of activities authorized under 
     this subtitle;
       (5) may determine the character of and necessity for 
     expenditures of the Fund and the manner in which they shall 
     be incurred, allowed, and paid;
       (6) may utilize or employ the services of personnel of any 
     agency or instrumentality of the United States with the 
     consent of the agency or instrumentality concerned on a 
     reimbursable or nonreimbursable basis; and
       (7) may execute all instruments necessary or appropriate in 
     the exercise of any of the functions of the Fund under this 
     subtitle and may delegate to the officers of the Fund such of 
     the powers and responsibilities of the Administrator as the 
     Administrator deems necessary or appropriate for the 
     administration of the Fund.
       (d) Advisory Board.--
       (1) Establishment.--The Administrator shall establish an 
     advisory board to be known as the Community Development 
     Advisory Board (hereafter in this subtitle referred to as the 
     ``Board'') in accordance with the provisions of the Federal 
     Advisory Committee Act.
       (2) Membership.--
       (A) In general.--The Board shall consist of 5 private 
     citizens who, collectively--
       (i) represent community groups whose constituencies include 
     targeted populations or residents of investment areas;
       (ii) represent local or regional government interests;
       (iii) have expertise in the operations and activities of 
     insured depository institutions; and
       (iv) have expertise in community development and lending.
       (B) Representation.--Each of the categories described in 
     clauses (i) through (iv) of subparagraph (A) shall be 
     represented by not less than 1 member of the Board.
       (3) Board function.--It shall be the function of the Board 
     to advise the Administrator on the policies of the Fund. The 
     Board shall not advise the Administrator on the granting or 
     denial of any particular application.
       (4) Terms of members.--
       (A) In general.--Each member of the Board shall serve for a 
     term of 4 years.
       (B) Vacancies.--Any member appointed to fill a vacancy 
     occurring prior to the expiration of the term for which the 
     previous member was appointed shall be appointed for the 
     remainder of such term. Members may continue to serve 
     following the expiration of their terms until a successor is 
     appointed and qualified.
       (5) Chairperson.--The Administrator shall appoint a 
     chairperson from among the members of the Board.
       (6) Meetings.--The Board shall meet at least annually and 
     at such other times as requested by the Administrator or the 
     chairperson. A majority of the members of the Board shall 
     constitute a quorum.
       (7) Reimbursement for expenses.--The members of the Board 
     may receive reimbursement for travel, per diem, and other 
     necessary expenses incurred in the performance of their 
     duties, in accordance with the Federal Advisory Committee 
     Act.
       (8) Costs and expenses.--The Fund shall provide to the 
     Board all necessary staff and facilities.
       (e) Conforming Amendments.--Section 9101(3) of title 31, 
     United States Code, is amended--
       (1) by redesignating subparagraphs (B) through (M) as 
     subparagraphs (C) through (N), respectively; and
       (2) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) the Community Development Financial Institutions 
     Fund;''.
       (f) Government Corporation Control Act Exemption.--Section 
     9107(b) of title 31, United States Code, shall not apply to 
     deposits of the Fund made pursuant to section 108.
       (g) Limitation of Fund and Federal Liability.--The 
     liability of the Fund and the United States Government 
     arising out of any investment in a community development 
     financial institution in accordance with this subtitle shall 
     be limited to the amount of the investment. The Fund shall be 
     exempt from any assessments and other liabilities that may be 
     imposed on controlling or principal shareholders by any 
     Federal law or the law of any State, Territory, or the 
     District of Columbia.
       (h) Prohibition on Issuance of Securities.--The Fund may 
     not issue stock, bonds, debentures, notes, or other 
     securities.
       (i) Compensation.--Title 5, United States Code, is 
     amended--
       (1) in section 5314, by adding at the end the following:
       ``Administrator of the Community Development Financial 
     Institutions Fund.''; and
       (2) in section 5315, by adding at the end the following:
       ``Deputy Administrator of the Community Development 
     Financial Institutions Fund.''.
       (j) Assisted Institutions Not United States 
     Instrumentalities.--A community development financial 
     institution or other organization that receives assistance 
     pursuant to this subtitle shall not be deemed to be an 
     agency, department, or instrumentality of the United States.

     SEC. 105. APPLICATIONS FOR ASSISTANCE.

       (a) Form and Procedures.--An application for assistance 
     under this subtitle shall be submitted in such form and in 
     accordance with such procedures as the Fund shall establish.
       (b) Minimum Requirements.--Except as provided in sections 
     106 and 115, the Fund shall require an application--
       (1) to establish that the applicant is, or will be, a 
     community development financial institution;
       (2) to include a comprehensive strategic plan for the 
     organization that contains--
       (A) a business plan of not less than 5 years in duration 
     that demonstrates that the applicant will be properly managed 
     and will have the capacity to operate a community development 
     financial institution that will not be dependent upon 
     assistance from the Fund for continued viability;
       (B) an analysis of the needs of the investment area or 
     targeted population and a strategy for how the applicant will 
     attempt to meet those needs;
       (C) a plan to coordinate use of assistance from the Fund 
     with existing Federal, State, local, and tribal government 
     assistance programs, and private sector financial services;
       (D) an explanation of how the proposed activities of the 
     applicant are consistent with existing economic, community, 
     and housing development plans adopted by or applicable to an 
     investment area; and
       (E) a description of how the applicant will coordinate with 
     community organizations and financial institutions which will 
     provide equity investments, loans, secondary markets, or 
     other services to investment areas or targeted populations;
       (3) to include a detailed description of the applicant's 
     plans and likely sources of funds to match the amount of 
     assistance requested from the Fund;
       (4) in the case of an applicant that has previously 
     received assistance under this subtitle, to demonstrate that 
     the applicant--
       (A) has substantially met its performance goals and 
     otherwise carried out its responsibilities under this 
     subtitle and the assistance agreement; and
       (B) will expand its operations into a new investment area 
     or to serve a new targeted population, offer more services, 
     or increase the volume of its business;
       (5) in the case of an applicant with a prior history of 
     serving investment areas or targeted populations, to 
     demonstrate that the applicant--
       (A) has a record of success in serving investment areas or 
     targeted populations;
       (B) will expand its operations into a new investment area 
     or to serve a new targeted population, offer more services, 
     or increase the volume of its current business; and
       (6) to include such other information as the Fund deems 
     appropriate.
       (c) Exception.--
       (1) In general.--Notwithstanding subsection (b)(1), in the 
     case of a State in which there is no existing community 
     development financial institution in operation on the date of 
     enactment of this Act, an applicant may be an agency or 
     instrumentality of a State government if--
       (A) such an entity has a primary mission of promoting 
     community development;
       (B) any assistance received is used to establish a 
     community development financial institution;
       (C) there is no nongovernment entity within the State that 
     possesses the capacity to become a community development 
     financial institution;
       (D) no other agency or instrumentality of the same State 
     has received assistance; and
       (E) assistance received will not reduce the amount of State 
     funds that otherwise would be appropriated to such an entity.
       (2) Majority ownership.--An agency or instrumentality 
     eligible to apply pursuant to paragraph (1) may own a 
     majority of the voting stock of a community development 
     financial institution if it demonstrates that there is a lack 
     of nonpublic sources of capital available to establish a 
     community development financial institution.
       (3) Amount of assistance.--No State agency or 
     instrumentality and a community development financial 
     institution, a majority of the shares of which are owned by 
     such an agency or instrumentality pursuant to this 
     subsection, may cumulatively receive assistance exceeding the 
     amount set forth under section 108(d)(1).
       (d) Preapplication Outreach Program.--The Fund may operate 
     an outreach program to identify and provide information to 
     potential applicants.

     SEC. 106. COMMUNITY PARTNERSHIPS.

       (a) Application.--An application for assistance may be 
     filed jointly by a community development financial 
     institution and a community partner to carry out a community 
     partnership.
       (b) Application Requirements.--The Fund shall require a 
     community partnership application--
       (1) to meet the minimum requirements established for 
     community development financial institutions under section 
     105(b), except that the criteria specified in paragraphs (1) 
     and (2)(A) of section 105(b) shall not apply to the community 
     partner;
       (2) to describe how each coapplicant will participate in 
     carrying out the community partnership and how the 
     partnership will enhance activities serving the investment 
     area or targeted population; and
       (3) to demonstrate that the community partnership 
     activities are consistent with the strategic plan submitted 
     by the community development financial institution 
     coapplicant.
       (c) Selection Criteria.--The Fund shall consider a 
     community partnership application based on the selection 
     criteria set out in section 107.
       (d) Limitation on Distribution of Assistance.--Assistance 
     provided upon approval of an application under this section 
     shall be distributed only to the community development 
     financial institution coapplicant, and shall not be used to 
     fund any activities carried out directly by the community 
     partner or an affiliate thereof.
       (e) Other Requirements and Limitations.--All other 
     requirements and limitations imposed by this subtitle on a 
     community development financial institution assisted under 
     this subtitle shall apply (in the manner that the Fund 
     determines to be appropriate) to assistance provided to carry 
     out community partnerships. The Fund may establish additional 
     guidelines and restrictions on the use of Federal funds to 
     carry out community partnerships.

     SEC. 107. SELECTION OF INSTITUTIONS.

       (a) Selection Criteria.--Except as provided in section 115, 
     the Fund shall, in its sole discretion, select applicants for 
     assistance based on--
       (1) the likelihood of success of the applicant in meeting 
     the goals of its comprehensive strategic plan;
       (2) the experience and background of the proposed 
     management team;
       (3) the extent of need for equity investments, loans, and 
     development services within the investment areas or targeted 
     populations;
       (4) the extent of economic distress within the investment 
     areas or the extent of need within the targeted populations, 
     as those factors are measured by objective criteria;
       (5) the extent to which the applicant will concentrate its 
     activities on serving its investment areas or targeted 
     populations;
       (6) the amount of firm commitments to meet or exceed the 
     matching requirements and the likely success of the plan for 
     raising the balance of the match;
       (7) the extent to which the proposed activities will expand 
     economic opportunities within the investment areas or the 
     targeted populations;
       (8) whether the applicant is, or will become, an insured 
     depository institution or an insured credit union;
       (9) whether the applicant is, or will be, located--
       (A) in an empowerment zone or enterprise community 
     designated under section 1391 of the Internal Revenue Code of 
     1986;
       (B) on an Indian reservation, as defined in section 3(d) of 
     the Indian Financing Act of 1974 or section 4(10) of the 
     Indian Child Welfare Act of 1978; or
       (C) in a community that has experienced a sudden and 
     significant loss in total employment since the 1990 census or 
     a major dislocation in its primary employment base.
       (10) the extent to which the applicant will increase its 
     resources through coordination with other institutions or 
     participation in a secondary market;
       (11) in the case of an applicant with a prior history of 
     serving investment areas or targeted populations, the extent 
     of success in serving them; and
       (12) other factors (such as the extent to which the 
     applicant has strong ties to the community that it will 
     serve) deemed to be appropriate by the Fund.
       (b) Geographic Diversity.--The Fund shall assist a 
     geographically diverse group of applicants, including an 
     appropriate mix of applicants from urban, rural, and Native 
     American communities.

     SEC. 108. ASSISTANCE PROVIDED BY THE FUND.

       (a) Forms of Assistance.--
       (1) In general.--The Fund may provide--
       (A) financial assistance through equity investments, 
     deposits, credit union shares, loans, and grants; and
       (B) technical assistance--
       (i) directly;
       (ii) through grants; or
       (iii) by contracting with organizations that possess 
     expertise in community development, without regard to whether 
     the organizations receive or are eligible to receive 
     assistance under this subtitle.
       (2) Equity investments.--The Fund shall not own more than 
     50 percent of the equity of a community development financial 
     institution and may not control the operations of such 
     institution. The Fund may hold only transferable, nonvoting 
     equity investments. Such equity investments may provide for 
     convertibility to voting stock upon transfer by the Fund.
       (3) Deposits.--Deposits made pursuant to this section in an 
     insured community development financial institution shall not 
     be subject to any requirement for collateral or security.
       (4) Limitations on obligations.--Direct loan obligations 
     may be incurred by the Fund only to the extent that 
     appropriations of budget authority to cover their costs, as 
     defined in section 502 of the Congressional Budget Act of 
     1974, are made in advance.
       (b) Uses of Financial Assistance.--
       (1) In general.--Financial assistance made available under 
     this subtitle may be used by assisted institutions to serve 
     investment areas or targeted populations by developing or 
     supporting--
       (A) commercial facilities that promote revitalization, 
     community stability, or job creation or retention;
       (B) businesses that--
       (i) provide jobs for low-income people or are owned by low-
     income people; or
       (ii) enhance the availability of products and services to 
     low-income people;
       (C) community facilities;
       (D) the provision of basic financial services;
       (E) housing that is principally affordable to low-income 
     people, except that assistance used to facilitate 
     homeownership opportunities shall only be used for activities 
     and lending products that serve low-income people and are not 
     provided by other lenders in the area; and
       (F) other businesses and activities deemed appropriate by 
     the Fund.
       (2) Limitations.--No assistance made available under this 
     subtitle may be expended by a community development financial 
     institution (or an organization receiving assistance under 
     section 115) to pay any person to influence or attempt to 
     influence any agency, elected official, officer, or employee 
     of a State or local government in connection with the making, 
     award, extension, continuation, renewal, amendment, or 
     modification of any State or local government contract, 
     grant, loan, or cooperative agreement (as such terms are 
     defined in section 1352 of title 31, United States Code).
       (c) Uses of Technical Assistance.--Technical assistance may 
     be used for activities that enhance the capacity of a 
     community development financial institution, such as training 
     of management and other personnel and development of programs 
     and investment or loan products.
       (d) Amount of Assistance.--
       (1) In general.--The Fund may provide not more than 
     $5,000,000 of assistance, in the aggregate, during any 3-year 
     period to any 1 community development financial institution 
     and its affiliates.
       (2) Exception.--Notwithstanding the limitations in 
     paragraph (1), in the case of an existing community 
     development financial institution that proposes to serve an 
     investment area or targeted population outside of any State 
     and outside of any metropolitan area presently served by the 
     institution, the Fund may provide not more than $7,500,000 of 
     assistance to a community development financial institution 
     and its affiliates, in the aggregate, during any 3-year 
     period, of which not less than $2,500,000 shall be used to 
     establish affiliates to serve the new investment area or 
     targeted population.
       (3) Timing of assistance.--Assistance may be provided as 
     described in paragraphs (1) and (2) in a lump sum or over a 
     period of time, as determined by the Fund.
       (e) Matching Requirements.--
       (1) In general.--Assistance other than technical assistance 
     shall be matched with funds from sources other than the 
     Federal Government on the basis of not less than one dollar 
     for each dollar provided by the Fund. Such matching funds 
     shall be at least comparable in form and value to assistance 
     provided by the Fund. The Fund shall provide no assistance 
     (other than technical assistance) until a community 
     development financial institution has secured firm 
     commitments for the matching funds required.
       (2) Exception.--In the case of an applicant with severe 
     constraints on available sources of matching funds, the Fund 
     may permit an applicant to comply with the matching 
     requirements of paragraph (1) by--
       (A) reducing such matching requirement by 50 percent;
       (B) permitting such applicant to satisfy not more than 60 
     percent of the matching requirement through use of assistance 
     made available pursuant to--
       (i) section 106 of the Housing and Community Development 
     Act of 1974;
       (ii) section 623(c)(1) of the Community Economic 
     Development Act of 1981; or
       (iii) section 310B(c) of the Consolidated Farm and Rural 
     Development Act; or
       (C) permitting an applicant to provide matching funds in a 
     form to be determined at the discretion of the Fund if such 
     applicant--
       (i) has total assets of less than $100,000;
       (ii) serves nonmetropolitan areas; and
       (iii) is not requesting more than $25,000 in assistance.
       (3) Limitation.--Not more than 25 percent of the total 
     funds disbursed in any fiscal year by the Fund may be matched 
     as authorized under paragraph (2).
       (4) Construction of ``federal funds''.--For purposes of 
     this subsection, notwithstanding section 105(a)(9) of the 
     Housing and Community Development Act of 1974, funds provided 
     pursuant to such Act shall be considered to be Federal funds, 
     except as provided in paragraph (2)(B).
       (f) Terms and Conditions.--
       (1) Soundness of unregulated institutions.--The Fund 
     shall--
       (A) ensure, to the maximum extent practicable, that each 
     community development financial institution (other than an 
     insured community development financial institution or 
     depository institution holding company) assisted under this 
     subtitle is financially and managerially sound and maintains 
     appropriate internal controls; and
       (B) require such institution to submit, not less than once 
     during each 18-month period, a statement of financial 
     condition audited by an independent certified public 
     accountant as part of the report required by section 
     112(a)(4).
       (2) Consultation with the appropriate banking regulator.--
     Prior to providing assistance to an insured community 
     development financial institution, the Fund shall consult 
     with the appropriate Federal banking agency.
       (3) Assistance agreement.--
       (A) In general.--Before providing any assistance under this 
     subtitle, the Fund and each community development financial 
     institution to be assisted shall enter into an agreement that 
     requires the institution to comply with performance goals and 
     abide by other terms and conditions pertinent to assistance 
     received under this subtitle.
       (B) Performance goals.--Performance goals shall be 
     negotiated between the Fund and each community development 
     financial institution receiving assistance based upon the 
     strategic plan submitted pursuant to section 105(b)(2). Such 
     goals may be modified with the consent of the parties, or as 
     provided in subparagraph (C). Performance goals for insured 
     community development financial institutions shall be 
     determined in consultation with the appropriate Federal 
     banking agency.
       (C) Sanctions.--The agreement shall provide that, in the 
     event of fraud, mismanagement, noncompliance with this 
     subtitle, or noncompliance with the terms of the agreement, 
     the Fund, in its discretion, may--
       (i) revoke approval of the application;
       (ii) terminate or reduce future assistance;
       (iii) require repayment of assistance;
       (iv) require changes to the performance goals imposed 
     pursuant to subparagraph (B);
       (v) bar an applicant from reapplying for assistance from 
     the Fund;
       (vi) require changes to the strategic plan submitted 
     pursuant to section 105(b)(2); and
       (vii) take such other actions as the Fund deems 
     appropriate.
       (D) Insured community development financial institutions.--
     In the case of an insured community development financial 
     institution, the Fund shall notify the appropriate Federal 
     banking agency not less than 15 days before imposing 
     sanctions pursuant to this paragraph and shall not impose 
     such sanctions if the agency disapproves, with an explanation 
     in writing, during that 15-day period.
       (E) Native american institutions.--In the case of a 
     community development financial institution which serves an 
     investment area described in paragraph (11)(C) of section 
     103, or an Indian tribe, as defined in section 4 of the 
     Indian Self-Determination and Education Assistance Act, the 
     Fund shall consult with the applicable tribal government in 
     evaluating the institution's compliance with the performance 
     goals established pursuant to subparagraph (B).
       (g) Authority To Sell Equity Investments and Loans.--The 
     Fund may, at any time, sell its equity investments and loans, 
     but the Fund shall retain the power to enforce limitations on 
     assistance entered into in accordance with the requirements 
     of this subtitle until the performance goals related to the 
     investment or loan have been met.
       (h) No Authority To Limit Supervision and Regulation.--
     Nothing in this subtitle shall affect any authority of the 
     appropriate Federal banking agency to supervise and regulate 
     any institution or company.

     SEC. 109. COMMUNITY DEVELOPMENT TRAINING.

       (a) In General.--The Fund may operate a training program to 
     increase the capacity and expertise of community development 
     financial institutions and other members of the financial 
     services industry to undertake community development 
     activities (hereafter in this subtitle referred to as the 
     ``training program'').
       (b) Program Activities.--The training program shall provide 
     educational programs to assist community development 
     financial institutions and other members of the financial 
     services industry in developing lending and investment 
     products, underwriting and servicing loans, managing equity 
     investments, and implementing development services targeted 
     to areas of economic distress, low-income persons, and 
     persons who lack adequate access to loans and equity 
     investments.
       (c) Participation.--The training program shall be made 
     available to community development financial institutions and 
     other members of the financial services industry that serve 
     or seek to serve areas of economic distress, low-income 
     persons, and persons who lack adequate access to loans and 
     equity investments.
       (d) Contracting.--The Fund may offer the training described 
     in this section directly or through a contract with other 
     organizations. The Fund may contract to provide the training 
     with organizations that possess special expertise in 
     community development, without regard to whether the 
     organizations receive or are eligible to receive assistance 
     under this subtitle.
       (e) Fees.--The Fund, as it deems appropriate, may charge 
     fees for participation in training services to offset the 
     cost of providing the services.

     SEC. 110. ENCOURAGEMENT OF PRIVATE ENTITIES.

       The Fund may facilitate the organization of corporations in 
     which the Federal Government has no ownership interest that 
     will complement the activities of the Fund in carrying out 
     the purpose of this subtitle. The purpose of any such entity 
     shall be to assist community development financial 
     institutions in a manner that is complementary to the 
     activities of the Fund under this subtitle. Any such entity 
     shall be managed exclusively by persons not employed by the 
     Federal Government or any agency or instrumentality thereof.

     SEC. 111. CLEARINGHOUSE FUNCTION.

       (a) Establishment.--The Fund may establish and maintain an 
     information clearinghouse in coordination with other Federal 
     departments or agencies and community development financial 
     institutions to--
       (1) collect, compile, and analyze information pertinent to 
     community development financial institutions that will assist 
     in creating, developing, expanding, and preserving these 
     institutions; and
       (2) provide information on financial, technical, and 
     management assistance, data on the activities of community 
     development financial institutions, regulations, and other 
     information that may promote the purposes of this subtitle.
       (b) Costs.--The cost of maintaining the clearinghouse shall 
     be shared equally by the Fund and each department or agency 
     involved in maintaining the clearinghouse.

     SEC. 112. RECORDKEEPING, REPORTS, AND AUDITS.

       (a) Recordkeeping.--
       (1) In general.--A community development financial 
     institution receiving assistance from the Fund shall keep 
     such records, for such periods as may be prescribed, as may 
     be necessary to disclose the manner in which any assistance 
     under this subtitle is used and to demonstrate compliance 
     with the requirements of this subtitle.
       (2) User profile information.--The Fund shall require each 
     community development financial institution receiving 
     assistance under this subtitle to compile and maintain data 
     on the gender, race, ethnicity, national origin, and other 
     pertinent information concerning individuals that utilize the 
     services of the assisted institution to ensure that targeted 
     populations and low-income residents of investment areas are 
     adequately served.
       (3) Access to records.--The Fund shall have access on 
     demand, for the purpose of determining compliance with this 
     subtitle, to any records of a community development financial 
     institution that receives assistance from the Fund.
       (4) Review.--Not less than annually, the Fund shall review 
     the progress of each assisted community development financial 
     institution in carrying out its strategic plan, meeting its 
     performance goals, and satisfying the terms and conditions of 
     its assistance agreement.
       (5) Reporting.--
       (A) Annual reports.--The Fund shall require each community 
     development financial institution receiving assistance under 
     this subtitle to submit an annual report to the Fund on its 
     activities, its financial condition, and its success in 
     meeting performance goals, in satisfying the terms and 
     conditions of its assistance agreement, and in complying with 
     other requirements of this subtitle in such form and manner 
     as the Fund shall specify.
       (B) Availability of reports.--The Fund, after deleting or 
     redacting any material, as appropriate to protect privacy or 
     proprietary interests, shall make such reports available for 
     public inspection.
       (b) Annual Report by the Fund.--The Fund shall conduct an 
     annual evaluation of the activities carried out by the Fund 
     and the community development financial institutions assisted 
     pursuant to this subtitle, and shall submit a report of its 
     findings to the President and the Congress not later than 120 
     days after the end of each fiscal year of the Fund. The 
     report shall include financial statements audited in 
     accordance with subsection (d).
       (c) Studies.--
       (1) Optional studies.--The Fund may conduct such studies as 
     the Fund determines necessary to further the purpose of this 
     subtitle and to facilitate investment in distressed 
     communities. The findings of any studies conducted pursuant 
     to this paragraph shall be included in the report required by 
     subsection (b).
       (2) Native american lending study.--
       (A) Study.--The Fund shall conduct a study on lending and 
     investment practices on Indian reservations and other land 
     held in trust by the United States Government. Such study 
     shall--
       (i) identify barriers to private financing on such lands; 
     and
       (ii) identify the impact of such barriers on access to 
     capital and credit for Native American populations.
       (B) Consultation with private sector.--In conducting the 
     study under subparagraph (A), the Fund shall consult with 
     tribal governments, private citizens, and organizations that 
     possess expertise in lending and community development issues 
     confronted by Native American populations.
       (C) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Fund shall submit a report to the 
     President and the Congress that--
       (i) contains the findings of the study conducted under 
     subparagraph (A);
       (ii) recommends any necessary statutory and regulatory 
     changes to existing Federal programs; and
       (iii) makes policy recommendations for community 
     development financial institutions, insured depository 
     institutions, secondary market institutions, and other 
     private sector capital institutions to better serve such 
     populations.
       (3) Investment, governance, and role of fund.--Thirty 
     months after the appointment and qualification of the 
     Administrator, the Comptroller General shall submit to the 
     President and the Congress a study evaluating the structure, 
     governance, and performance of the Fund.
       (d) Examination and Audit.--The financial statements of the 
     Fund shall be audited in accordance with section 9105 of 
     title 31, United States Code, except that audits required by 
     section 9105(a) of such title shall be performed annually.

     SEC. 113. INVESTMENT OF RECEIPTS AND PROCEEDS.

       (a) Establishment of Account.--Any dividends on equity 
     investments and proceeds from the disposition of investments, 
     deposits, or credit union shares that are received by the 
     Fund as a result of assistance provided pursuant to section 
     108, and any fees received pursuant to section 109(e) shall 
     be deposited and accredited to an account of the Fund in the 
     United States Treasury (hereafter in this section referred to 
     as ``the account'') established to carry out the purpose of 
     this subtitle.
       (b) Investments.--Upon request of the Administrator, the 
     Secretary of the Treasury shall invest amounts deposited in 
     the account in public debt securities with maturities 
     suitable to the needs of the Fund, as determined by the 
     Administrator, and bearing interest at rates determined by 
     the Secretary of the Treasury, comparable to current market 
     yields on outstanding marketable obligations of the United 
     States of similar maturities.
       (c) Availability.--Amounts deposited into the account and 
     interest earned on such amounts pursuant to this section 
     shall be available to the Fund until expended.

     SEC. 114. INSPECTOR GENERAL.

       (a) Establishment.--Section 11 of the Inspector General Act 
     of 1978 (5 U.S.C. App. 11) is amended--
       (1) in paragraph (1), by inserting ``; the Administrator of 
     the Community Development Financial Institutions Fund;'' 
     before ``and the chief''; and
       (2) in paragraph (2), by inserting ``the Community 
     Development Financial Institutions Fund,'' after ``the Agency 
     for International Development,''.
       (b) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary for the 
     operation of the Office of Inspector General established by 
     the amendments made by subsection (a).

     SEC. 115. CAPITALIZATION ASSISTANCE TO ENHANCE LIQUIDITY.

       (a) Assistance.--
       (1) In general.--The Fund may provide assistance for the 
     purpose of providing capital to organizations that will 
     purchase loans or otherwise enhance the liquidity of 
     community development financial institutions if--
       (A) the primary purpose of such organizations is to promote 
     community development; and
       (B) any assistance received is matched with funds--
       (i) from sources other than the Federal Government;
       (ii) on the basis of not less than $1 for each dollar 
     provided by the Fund; and
       (iii) that are comparable in form and value to the 
     assistance provided by the Fund.
       (2) Limitation on other assistance.--An organization that 
     receives assistance under this section may not receive other 
     financial or technical assistance under this subtitle.
       (b) Selection.--The selection of organizations to receive 
     assistance under this section shall be at the discretion of 
     the Fund and in accordance with criteria established by the 
     Fund. In establishing such criteria, the Fund shall take into 
     account the criteria contained in sections 105(b) and 107, as 
     appropriate.
       (c) Amount of Assistance.--The Fund may provide a total of 
     not more than $5,000,000 of assistance to an organization 
     under this section during any 3-year period. Assistance may 
     be provided in a lump sum or over a period of time, as 
     determined by the Fund.
       (d) Audit and Report Requirements.--
       (1) In general.--Organizations that receive assistance from 
     the Fund in accordance with this section shall--
       (A) submit to the Fund not less than once in every 18-month 
     period, financial statements audited by an independent 
     certified public accountant;
       (B) submit an annual report on its activities; and
       (C) keep such records as may be necessary to disclose the 
     manner in which any assistance under this section is used.
       (2) Access.--The Fund shall have access on demand, for the 
     purposes of determining compliance with this section, to any 
     records of such organizations.
       (e) Limitations on Liability.--
       (1) Liability of fund.--The liability of the Fund and the 
     United States Government arising out of the provision of 
     assistance to any organization in accordance with this 
     section shall be limited to the amount of such assistance. 
     The Fund shall be exempt from any assessments and any other 
     liabilities that may be imposed on controlling or principal 
     shareholders by any Federal law or the law of any State, 
     territory, or the District of Columbia.
       (2) Liability of government.--This section does not oblige 
     the Federal Government, either directly or indirectly, to 
     provide any funds to any organization assisted pursuant to 
     this section, or to honor, reimburse, or otherwise guarantee 
     any obligation or liability of such an organization. This 
     section shall not be construed to imply that any such 
     organization or any obligations or securities of any such 
     organization are backed by the full faith and credit of the 
     United States.
       (f) Use of Proceeds.--Any proceeds from the sale of loans 
     to an organization assisted under this section shall be used 
     by the seller for community development purposes.

     SEC. 116. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR 
                   CREDIT UNIONS.

       (a) Repeal.--Section 120 of the Federal Credit Union Act 
     (12 U.S.C. 1766) is amended by striking subsection (k).
       (b) Revolving Loan Fund.--The Federal Credit Union Act (12 
     U.S.C. 1751 et seq.) is amended by inserting after section 
     129 the following new section:

     ``SEC. 130. COMMUNITY DEVELOPMENT REVOLVING LOAN FUND FOR 
                   CREDIT UNIONS.

       ``(a) In General.--The Board may exercise the authority 
     granted to it by the Community Development Credit Union 
     Revolving Loan Fund Transfer Act, including any additional 
     appropriation made or earnings accrued, subject only to this 
     section and to regulations prescribed by the Board.
       ``(b) Investment.--The Board may invest any idle Fund 
     moneys in United States Treasury securities. Any interest 
     accrued on such securities shall become a part of the Fund.
       ``(c) Loans.--The Board may require that any loans made 
     from the Fund be matched by increased shares in the borrower 
     credit union.
       ``(d) Interest.--Interest earned by the Fund may be 
     allocated by the Board for technical assistance to community 
     development credit unions, subject to an appropriations Act.
       ``(e) Definition.--As used in this section, the term `Fund' 
     means the Community Development Credit Union Revolving Loan 
     Fund.''.

     SEC. 117. REGULATIONS.

       Not later than 180 days after the appointment and 
     qualification of the Administrator, the Fund shall issue such 
     regulations as may be necessary to carry out this subtitle.

     SEC. 118. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--To carry out this subtitle, there are 
     authorized to be appropriated to the Fund, to remain 
     available until expended--
       (1) $60,000,000 for fiscal year 1994;
       (2) $104,000,000 for fiscal year 1995;
       (3) $107,000,000 for fiscal year 1996; and
       (4) $111,000,000 for fiscal year 1997.
       (b) Administrative Expenses.--Of amounts authorized to be 
     appropriated to the Fund--
       (1) not more than $5,500,000 may be used by the Fund in 
     each fiscal year to pay the administrative costs and expenses 
     of the Fund; and
       (2) not more than $50,000 may be used by the Fund in each 
     fiscal year to provide for administrative costs and expenses 
     described in section 104(d)(8).
       (c) Community Development Credit Union Revolving Loan 
     Fund.--There are authorized to be appropriated for the 
     purposes of the Community Development Credit Union Revolving 
     Loan Fund--
       (1) $2,000,000 for fiscal year 1994;
       (2) $1,000,000 for fiscal year 1995;
       (3) $1,000,000 for fiscal year 1996; and
       (4) $1,000,000 for fiscal year 1997.
       (d) Capitalization Assistance.--Not more than 5 percent of 
     the amounts authorized to be appropriated under subsection 
     (a) may be used as provided in section 115.
       (e) Budgetary Treatment.--Amounts authorized to be 
     appropriated under this section shall be subject to 
     discretionary spending caps, as provided in section 601 of 
     the Congressional Budget Act of 1974, and therefore shall 
     reduce by an equal amount funds made available for other 
     discretionary spending programs.
            Subtitle B--Home Ownership and Equity Protection

     SEC. 151. CONSUMER PROTECTIONS FOR HIGH COST MORTGAGES.

       (a) Definition.--Section 103 of the Truth in Lending Act 
     (15 U.S.C. 1602) is amended by adding at the end the 
     following new subsection:
       ``(aa)(1) A mortgage referred to in this subsection means a 
     consumer credit transaction that is secured by the consumer's 
     principal dwelling, other than a residential mortgage 
     transaction, a reverse mortgage transaction, or a transaction 
     under an open end credit plan, if--
       ``(A) the annual percentage rate at consummation of the 
     transaction will exceed by more than 10 percentage points the 
     rate of interest on Treasury securities having comparable 
     periods of maturity on the fifteenth day of the month 
     immediately preceding the month in which the loan is 
     consummated; or
       ``(B) the total points and fees payable by the consumer at 
     or before closing will exceed the greater of--
       ``(i) 8 percent of the total loan amount; or
       ``(ii) $400.
       ``(2) The amount specified in paragraph (1)(B)(ii) shall be 
     adjusted annually on January 1 by the annual percentage 
     change in the Consumer Price Index, as reported on June 1 of 
     the year preceding such adjustment.
       ``(3) For purposes of paragraph (1)(B), points and fees 
     shall include--
       ``(A) all items included in the finance charge except 
     interest and the time-price differential;
       ``(B) all compensation paid to mortgage brokers;
       ``(C) each of the charges listed in section 106(e) (except 
     an escrow for future payment of taxes), unless--
       ``(i) the charge is reasonable;
       ``(ii) the creditor receives no direct or indirect 
     compensation; and
       ``(iii) the charge is paid to a third party unaffiliated 
     with the creditor; and
       ``(D) such other charges as the Board determines to be 
     appropriate.''.
       (b) Material Disclosures.--Section 103(u) of the Truth in 
     Lending Act (15 U.S.C. 1602(u)) is amended--
       (1) by striking ``and the due dates'' and inserting ``the 
     due dates''; and
       (2) by inserting before the period ``, and the disclosures 
     required by section 129(a)''.
       (c) Definition of Creditor Clarified.--Section 103(f) of 
     the Truth in Lending Act (15 U.S.C. 1602(f)) is amended by 
     adding at the end the following: ``Any person who originates 
     2 or more mortgages referred to in subsection (aa) in any 12-
     month period or any person who originates 1 or more such 
     mortgages through a mortgage broker shall be considered to be 
     a creditor for purposes of this title.''.
       (d) Disclosures Required and Certain Terms Prohibited.--The 
     Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by 
     inserting after section 128 the following new section:

     ``SEC. 129. REQUIREMENTS FOR CERTAIN MORTGAGES.

       ``(a) Disclosures.--
       ``(1) Specific disclosures.--In addition to other 
     disclosures required under this title, for each mortgage 
     referred to in section 103(aa), the creditor shall provide 
     the following disclosures in conspicuous type size:
       ``(A) `You are not required to complete this agreement 
     merely because you have received these disclosures or have 
     signed a loan application.'
       ``(B) `If you obtain this loan, the lender will have a 
     mortgage on your home. You could lose your home, and any 
     money you have put into it, if you do not meet your 
     obligations under the loan.'.
       ``(2) Annual percentage rate.--In addition to the 
     disclosures required under paragraph (1), the creditor shall 
     disclose--
       ``(A) the annual percentage rate of the loan and the amount 
     of the regular monthly payment; or
       ``(B) in the case of a variable rate loan, the annual 
     percentage rate of the loan, a statement that the interest 
     rate and monthly payment may increase, and the amount of the 
     maximum possible monthly payment.
       ``(b) Time of Disclosures.--
       ``(1) In general.--The disclosures required by this section 
     shall be given not less than 3 business days prior to 
     consummation of the transaction.
       ``(2) New disclosures required.--After providing the 
     disclosures required by this section, a creditor may not 
     change the terms of the loan if such changes make the 
     disclosures inaccurate, unless new disclosures are provided 
     that meet the requirements of this section.
       ``(3) Modifications.--The Board may, if it finds that such 
     action is necessary to permit homeowners to meet bona fide 
     personal financial emergencies, prescribe regulations 
     authorizing the modification or waiver of rights created 
     under this subsection, to the extent and under the 
     circumstances set forth in those regulations.
       ``(c) No Prepayment Penalty.--
       ``(1) In general.--Except as provided in paragraph (4), a 
     mortgage referred to in section 103(aa) may not contain terms 
     under which a consumer must pay a prepayment penalty for 
     paying all or part of the principal of the loan prior to the 
     date on which such principal is due. If the date of maturity 
     of a mortgage referred to in section 103(aa) is accelerated 
     for any reason, and the consumer is entitled to a rebate of 
     interest, computation of the rebate amount shall comply with 
     paragraph (2). No such mortgage shall provide for a default 
     interest rate that is higher than the interest rate provided 
     by the note for the loan prior to default.
       ``(2) Rebate computation.--For purposes of this subsection, 
     any method of computing rebates of interest that is less 
     favorable to the consumer than the actuarial method (as 
     defined in section 933 of the Housing and Community 
     Development Act of 1992) using simple interest is a 
     prepayment penalty.
       ``(3) Exception.--A mortgage referred to in section 103(aa) 
     may include terms under which a consumer is required to pay 
     not more than 1 month's interest as a penalty if the consumer 
     prepays the principal of the loan within 1 year of 
     origination.
       ``(d) No Balloon Payments.--A mortgage referred to in 
     section 103(aa) having a term of less than 5 years may not 
     include terms under which the aggregate amount of the regular 
     periodic payments would not fully amortize the outstanding 
     principal balance.
       ``(e) No Negative Amortization.--A mortgage referred to in 
     section 103(aa) may not include terms under which the 
     outstanding principal balance will increase at any time over 
     the course of the loan because the regular periodic payments 
     do not cover the full amount of interest due.
       ``(f) No Prepaid Payments.--A mortgage referred to in 
     section 103(aa) may not include terms under which more than 2 
     periodic payments required under the loan are consolidated 
     and paid in advance from the loan proceeds provided to the 
     consumer.
       ``(g) Consequence of Failure To Comply.--Any mortgage that 
     contains a provision prohibited by this section shall be 
     deemed a failure to deliver the material disclosures required 
     under this title, for the purpose of section 125.
       ``(h) Definition.--For purposes of this section, the term 
     `affiliate' has the same meaning as in section 2(k) of the 
     Bank Holding Company Act of 1956.
       ``(i) Discretionary Regulatory Authority of Board.--
       ``(1) Exemptions.--The Board may, by regulation or order, 
     exempt specific mortgage products or categories of mortgages 
     from any or all of the prohibitions specified in subsections 
     (c) through (f), if the Board finds that the exemption--
       ``(A) is in the interest of the borrowing public; and
       ``(B) will apply only to products that maintain and 
     strengthen home ownership and equity protection.
       ``(2) Prohibitions.--The Board, by regulation or order, 
     shall prohibit acts or practices in connection with--
       ``(A) mortgage loans that the Board finds to be unfair, 
     deceptive, or designed to evade the provisions of this 
     section; and
       ``(B) refinancing of mortgage loans that the Board finds to 
     be associated with abusive lending practices, or that are 
     otherwise not in the interest of the borrower.''.
       (e) Conforming Amendments.--
       (1) Table of sections.--The table of sections at the 
     beginning of chapter 2 of the Truth in Lending Act is amended 
     by striking the item relating to section 129 and inserting 
     the following:
       ``129. Requirements for certain mortgages.''.
       (2) Truth in lending act.--Section 105(a) of the Truth in 
     Lending Act (15 U.S.C. 1604(a)) is amended in the second 
     sentence, by striking ``These'' and inserting ``Except in the 
     case of a mortgage referred to in section 103(aa), these''.

     SEC. 152. CIVIL LIABILITY.

       (a) Damages.--Section 130(a) of the Truth in Lending Act 
     (15 U.S.C. 1640(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (2)(B);
       (2) by striking the period at the end of paragraph (3) and 
     inserting ``; and''; and
       (3) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) in the case of a failure to comply with any 
     requirement under section 129, an amount equal to the sum of 
     all finance charges and fees paid by the consumer, unless the 
     creditor demonstrates that the failure to comply is not 
     material.''.
       (b) State Attorney General Enforcement.--Section 130(e) of 
     the Truth in Lending Act (15 U.S.C. 1640(e)) is amended by 
     adding at the end the following: ``An action to enforce a 
     violation of section 129 may also be brought by the 
     appropriate State attorney general in any appropriate United 
     States district court, or any other court of competent 
     jurisdiction, not later than 3 years after the date on which 
     the violation occurs. The State attorney general shall 
     provide prior written notice of any such civil action to the 
     Federal agency responsible for enforcement under section 108 
     and shall provide the agency with a copy of the complaint. If 
     prior notice is not feasible, the State attorney general 
     shall provide notice to such agency immediately upon 
     instituting the action. The Federal agency may--
       ``(1) intervene in the action;
       ``(2) upon intervening--
       ``(A) remove the action to the appropriate United States 
     district court, if it was not originally brought there; and
       ``(B) be heard on all matters arising in the action; and
       ``(3) file a petition for appeal.''.
       (c) Assignee Liability.--Section 131 of the Truth in 
     Lending Act (15 U.S.C. 1641) is amended by adding at the end 
     the following new subsection:
       ``(d) Rights Upon Assignment of Certain Mortgages.--
       ``(1) In general.--Any person who purchases or is otherwise 
     assigned a mortgage referred to in section 103(aa) shall be 
     subject to all claims and defenses with respect to that 
     mortgage that the consumer could assert against the creditor 
     of the mortgage, unless the purchaser or assignee 
     demonstrates, by a preponderance of the evidence, that a 
     reasonable person exercising ordinary due diligence, could 
     not determine, based on the loan documentation required by 
     this title, that the mortgage was in fact a mortgage referred 
     to in section 103(aa). The preceding sentence does not affect 
     a consumer's rights under sections 125, 130, or any other 
     provision of this title.
       ``(2) Limitation on damages.--Notwithstanding any other 
     provision of law, relief provided as a result of any action 
     made permissible by paragraph (1) may not exceed--
       ``(A) with respect to actions based upon a violation of 
     this title, the amount specified in section 130; and
       ``(B) with respect to all other causes of action, the sum 
     of--
       ``(i) the amount of all remaining indebtedness; and
       ``(ii) the total amount paid by the consumer in connection 
     with the transaction.
       ``(3) Offset.--The amount of damages that may be awarded 
     under paragraph (2)(B) shall be reduced by the amount of any 
     damages awarded under paragraph (2)(A).
       ``(4) Notice.--Any person who sells or otherwise assigns a 
     mortgage referred to in section 103(aa) shall include a 
     prominent notice of the potential liability under this 
     subsection as determined by the Board.''.

     SEC. 153. REVERSE MORTGAGE DISCLOSURE.

       (a) Definition of Reverse Mortgage.--Section 103 of the 
     Truth in Lending Act (15 U.S.C. 1602) is amended by adding at 
     the end the following new subsection:
       ``(bb) The term `reverse mortgage transaction' means a 
     nonrecourse transaction in which a mortgage, deed of trust, 
     or equivalent consensual security interest is created against 
     the consumer's principal dwelling--
       ``(1) securing one or more advances; and
       ``(2) with respect to which the payment of any principal, 
     interest, and shared appreciation is due and payable (other 
     than in the case of default) only after--
       ``(A) the transfer of the dwelling;
       ``(B) the consumer ceases to occupy the dwelling as a 
     principal dwelling; or
       ``(C) the death of the consumer.''.
       (b) Disclosure.--Chapter 2 of title I of the Truth in 
     Lending Act (15 U.S.C. 1631 et seq.) is amended by adding at 
     the end the following new section:

     ``SEC. 138. REVERSE MORTGAGES.

       ``(a) In General.--In addition to the disclosures required 
     under this title, for each reverse mortgage, the creditor 
     shall, not less than 3 days prior to consummation of the 
     transaction, disclose to the consumer in conspicuous type a 
     good faith estimate of the projected total cost of the 
     mortgage to the consumer expressed as a table of annual 
     interest rates. Each annual interest rate shall be based on a 
     projected total future loan balance under a projected 
     appreciation rate for the dwelling and a term for the 
     mortgage. The disclosure shall include--
       ``(1) statements of the annual interest rates for not less 
     than 3 projected appreciation rates and not less than 3 loan 
     periods, as determined by the Board, including--
       ``(A) a short-term reverse mortgage;
       ``(B) a term equaling the actuarial life expectancy of the 
     consumer; and
       ``(C) such longer term as the Board deems appropriate; and
       ``(2) a statement that the consumer is not obligated to 
     complete the reverse mortgage transaction merely because the 
     consumer has received the disclosure required under this 
     section or has signed a loan application.
       ``(b) Projected Total Cost.--In determining the projected 
     total cost of the mortgage to be disclosed to the consumer 
     under subsection (a), the creditor shall take into account--
       ``(1) any shared appreciation that the lender will, by 
     contract, be entitled to receive;
       ``(2) all costs and charges to the consumer, including the 
     costs of any associated annuity that the consumer elects or 
     is required to purchase as part of the reverse mortgage 
     transaction;
       ``(3) all payments to and for the benefit of the consumer, 
     including, in the case in which an associated annuity is 
     purchased (whether or not required by the lender as a 
     condition of making the reverse mortgage), the annuity 
     payments received by the consumer and financed from the 
     proceeds of the loan, instead of the proceeds used to finance 
     the annuity; and
       ``(4) any limitation on the liability of the consumer under 
     reverse mortgage transactions (such as nonrecourse limits and 
     equity conservation agreements).''.
       (c) Table of Sections.--The table of sections at the 
     beginning of chapter 2 of the Truth in Lending Act is amended 
     by inserting after the item relating to section 137 the 
     following:
       ``138. Reverse mortgages.''.

     SEC. 154. REGULATIONS; EFFECTIVE DATE.

       (a) Regulations.--Not later than 180 days after the date of 
     enactment of this Act, the Board of Governors of the Federal 
     Reserve System shall issue such regulations as may be 
     necessary to carry out this subtitle.
       (b) Effective Date.--This subtitle, and the amendments made 
     by this subtitle, shall apply to every mortgage referred to 
     in section 103(aa) of the Truth in Lending Act (as added by 
     section 151(a) of this Act) consummated on or after the date 
     which is 60 days after the promulgation of final regulations 
     under subsection (a).
               TITLE II--SMALL BUSINESS CAPITAL FORMATION
             Subtitle A--Small Business Loan Securitization

     SEC. 201. SHORT TITLE.

       This subtitle may be cited as the ``Small Business Loan 
     Securitization and Secondary Market Enhancement Act of 
     1994''.

     SEC. 202. SMALL BUSINESS RELATED SECURITY.

       Section 3(a) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)) is amended by adding at the end the following 
     new paragraph:
       ``(53)(A) The term `small business related security' means 
     a security that is rated in 1 of the 4 highest rating 
     categories by at least 1 nationally recognized statistical 
     rating organization, and either--
       ``(i) represents an interest in 1 or more promissory notes 
     or leases of personal property evidencing the obligation of a 
     small business concern and originated by an insured 
     depository institution, insured credit union, insurance 
     company, or similar institution which is supervised and 
     examined by a Federal or State authority, or a finance 
     company or leasing company; or
       ``(ii) is secured by an interest in 1 or more promissory 
     notes or leases of personal property (with or without 
     recourse to the issuer or lessee) and provides for payments 
     of principal in relation to payments, or reasonable 
     projections of payments, on notes or leases described in 
     clause (i).
       ``(B) For purposes of this paragraph--
       ``(i) an `interest in a promissory note or a lease of 
     personal property' includes ownership rights, certificates of 
     interest or participation in such notes or leases, and rights 
     designed to assure servicing of such notes or leases, or the 
     receipt or timely receipt of amounts payable under such notes 
     or leases;
       ``(ii) the term `small business concern' has the same 
     meaning as in section 3 of the Small Business Act;
       ``(iii) the term `insured depository institution' has the 
     same meaning as in section 3 of the Federal Deposit Insurance 
     Act; and
       ``(iv) the term `insured credit union' has the same meaning 
     as in section 101 of the Federal Credit Union Act.''.

     SEC. 203. APPLICABILITY OF MARGIN REQUIREMENTS.

       Section 7(g) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78g(g)) is amended by inserting ``or a small business 
     related security'' after ``mortgage related security''.

     SEC. 204. BORROWING IN THE COURSE OF BUSINESS.

       Section 8(a) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78h(a)) is amended in the last sentence by inserting 
     ``or a small business related security'' after ``mortgage 
     related security''.

     SEC. 205. SMALL BUSINESS RELATED SECURITIES AS COLLATERAL.

       Clause (ii) of section 11(d)(1) of the Securities Exchange 
     Act of 1934 (15 U.S.C. 78k(d)(1)) is amended by inserting 
     ``or any small business related security'' after ``mortgage 
     related security''.

     SEC. 206. INVESTMENT BY DEPOSITORY INSTITUTIONS.

       (a) Home Owners' Loan Act Amendment.--Section 5(c)(1) of 
     the Home Owners' Loan Act (12 U.S.C. 1464(c)(1)) is amended 
     by adding at the end the following new subparagraph:
       ``(S) Small business related securities.--Investments in 
     small business related securities (as defined in section 
     3(a)(53) of the Securities Exchange Act of 1934), subject to 
     such regulations as the Director may prescribe, including 
     regulations concerning the minimum size of the issue (at the 
     time of the initial distribution), the minimum aggregate 
     sales price, or both.''.
       (b) Credit Unions.--Section 107(15) of the Federal Credit 
     Union Act (12 U.S.C. 1757(15)) is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by inserting ``or'' at the end; 
     and
       (3) by adding at the end the following new subparagraph:
       ``(C) are small business related securities (as defined in 
     section 3(a)(53) of the Securities Exchange Act of 1934), 
     subject to such regulations as the Board may prescribe, 
     including regulations prescribing the minimum size of the 
     issue (at the time of the initial distribution), the minimum 
     aggregate sales price, or both;''.
       (c) National Banking Associations.--Section 5136 of the 
     Revised Statutes (12 U.S.C. 24) is amended in the last 
     sentence in the first full paragraph of paragraph Seventh, by 
     striking ``or (B) are mortgage related securities'' and 
     inserting the following: ``(B) are small business related 
     securities (as defined in section 3(a)(53) of the Securities 
     Exchange Act of 1934); or (C) are mortgage related 
     securities''.

     SEC. 207. PREEMPTION OF STATE LAW.

       (a) In General.--Section 106(a)(1) of the Secondary 
     Mortgage Market Enhancement Act of 1984 (15 U.S.C. 77r-
     1(a)(1)) is amended--
       (1) by striking ``or'' at the end of subparagraph (B);
       (2) by redesignating subparagraph (C) as subparagraph (D); 
     and
       (3) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) small business related securities (as defined in 
     section 3(a)(53) of the Securities Exchange Act of 1934), 
     or''.
       (b) Obligations of the United States.--Section 106(a)(2) of 
     the Secondary Mortgage Market Enhancement Act of 1984 (15 
     U.S.C. 77r-1(a)(2)) is amended--
       (1) by striking ``or'' at the end of subparagraph (B);
       (2) by redesignating subparagraph (C) as subparagraph (D); 
     and
       (3) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) small business related securities (as defined in 
     section 3(a)(53) of the Securities Exchange Act of 1934), 
     or''.
       (c) Preemption of State Laws.--Section 106(c) of the 
     Secondary Mortgage Market Enhancement Act of 1984 (15 U.S.C. 
     77r-1(c)) is amended--
       (1) in the first sentence, by striking ``or that'' and 
     inserting ``, that''; and
       (2) by inserting ``, or that are small business related 
     securities (as defined in section 3(a)(53) of the Securities 
     Exchange Act of 1934)'' before ``shall be exempt''.
       (d) Implementation.--Section 106 of the Secondary Mortgage 
     Market Enhancement Act of 1984 (15 U.S.C. 77r-1) is amended 
     by adding at the end the following new subsection:
       ``(d) Implementation.--
       ``(1) Limitation.--The provisions of subsections (a) and 
     (b) concerning small business related securities shall not 
     apply with respect to a particular person, trust, 
     corporation, partnership, association, business trust, or 
     business entity or class thereof in any State that, prior to 
     the expiration of 7 years after the date of enactment of this 
     subsection, enacts a statute that specifically refers to this 
     section and either prohibits or provides for a more limited 
     authority to purchase, hold, or invest in such small business 
     related securities by any person, trust, corporation, 
     partnership, association, business trust, or business entity 
     or class thereof than is provided in this section. The 
     enactment by any State of any statute of the type described 
     in the preceding sentence shall not affect the validity of 
     any contractual commitment to purchase, hold, or invest that 
     was made prior to such enactment, and shall not require the 
     sale or other disposition of any small business related 
     securities acquired prior to the date of such enactment.
       ``(2) State registration or qualification requirements.--
     Any State may, not later than 7 years after the date of 
     enactment of this subsection, enact a statute that 
     specifically refers to this section and requires registration 
     or qualification of any small business related securities on 
     terms that differ from those applicable to any obligation 
     issued by the United States.''.

     SEC. 208. INSURED DEPOSITORY INSTITUTION CAPITAL REQUIREMENTS 
                   FOR TRANSFERS OF SMALL BUSINESS OBLIGATIONS.

       (a) Accounting Principles.--The accounting principles 
     applicable to the transfer of a small business loan or a 
     lease of personal property with recourse contained in reports 
     or statements required to be filed with Federal banking 
     agencies by a qualified insured depository institution shall 
     be consistent with generally accepted accounting principles.
       (b) Capital and Reserve Requirements.--With respect to the 
     transfer of a small business loan or lease of personal 
     property with recourse that is a sale under generally 
     accepted accounting principles, each qualified insured 
     depository institution shall--
       (1) establish and maintain a reserve equal to an amount 
     sufficient to meet the reasonable estimated liability of the 
     institution under the recourse arrangement; and
       (2) include, for purposes of applicable capital standards 
     and other capital measures, only the amount of the retained 
     recourse in the risk-weighted assets of the institution.
       (c) Qualified Institutions Criteria.--An insured depository 
     institution is a qualified insured depository institution for 
     purposes of this section if, without regard to the accounting 
     principles or capital requirements referred to in subsections 
     (a) and (b), the institution is--
       (1) well capitalized; or
       (2) with the approval, by regulation or order, of the 
     appropriate Federal banking agency, adequately capitalized.
       (d) Aggregate Amount of Recourse.--The total outstanding 
     amount of recourse retained by a qualified insured depository 
     institution with respect to transfers of small business loans 
     and leases of personal property under subsections (a) and (b) 
     shall not exceed--
       (1) 15 percent of the risk-based capital of the 
     institution; or
       (2) such greater amount, as established by the appropriate 
     Federal banking agency by regulation or order.
       (e) Institutions That Cease To Be Qualified or Exceed 
     Aggregate Limits.--If an insured depository institution 
     ceases to be a qualified insured depository institution or 
     exceeds the limits under subsection (d), this section shall 
     remain applicable to any transfers of small business loans or 
     leases of personal property that occurred during the time 
     that the institution was qualified and did not exceed such 
     limit.
       (f) Prompt Corrective Action Not Affected.--The capital of 
     an insured depository institution shall be computed without 
     regard to this section in determining whether the institution 
     is adequately capitalized, undercapitalized, significantly 
     undercapitalized, or critically undercapitalized under 
     section 38 of the Federal Deposit Insurance Act.
       (g) Regulations Required.--Not later than 180 days after 
     the date of the enactment of this Act each appropriate 
     Federal banking agency shall promulgate final regulations 
     implementing this section.
       (h) Alternative System Permitted.--
       (1) In general.--At the discretion of the appropriate 
     Federal banking agency, this section shall not apply if the 
     regulations of the agency provide that the aggregate amount 
     of capital and reserves required with respect to the transfer 
     of small business loans and leases of personal property with 
     recourse does not exceed the aggregate amount of capital and 
     reserves that would be required under subsection (b).
       (2) Existing transactions not affected.--Notwithstanding 
     paragraph (1), this section shall remain in effect with 
     respect to transfers of small business loans and leases of 
     personal property with recourse by qualified insured 
     depository institutions occurring before the effective date 
     of regulations referred to in paragraph (1).
       (i) Definitions.--For purposes of this section--
       (1) the term ``adequately capitalized'' has the same 
     meaning as in section 38(b) of the Federal Deposit Insurance 
     Act;
       (2) the term ``appropriate Federal banking agency'' has the 
     same meaning as in section 3 of the Federal Deposit Insurance 
     Act;
       (3) the term ``capital standards'' has the same meaning as 
     in section 38(c) of the Federal Deposit Insurance Act;
       (4) the term ``Federal banking agencies'' has the same 
     meaning as in section 3 of the Federal Deposit Insurance Act;
       (5) the term ``insured depository institution'' has the 
     same meaning as in section 3 of the Federal Deposit Insurance 
     Act;
       (6) the term ``other capital measures'' has the meaning as 
     in section 38(c) of the Federal Deposit Insurance Act;
       (7) the term ``recourse'' has the meaning given to such 
     term under generally accepted accounting principles;
       (8) the term ``small business'' means a business that meets 
     the criteria for a small business concern established by the 
     Small Business Administration under section 3(a) of the Small 
     Business Act; and
       (9) the term ``well capitalized'' has the same meaning as 
     in section 38(b) of the Federal Deposit Insurance Act.

     SEC. 209. TRANSACTIONS IN SMALL BUSINESS RELATED SECURITIES 
                   BY EMPLOYEE BENEFIT PLANS.

       (a) Prohibited Transaction Exemption.--The Secretary of 
     Labor, in consultation with the Secretary of the Treasury, 
     may exempt transactions involving small business related 
     securities (as defined in section 3(a)(53) of the Securities 
     Exchange Act of 1934, as added by section 202 of this Act) 
     pursuant to section 408(a) of the Employee Retirement Income 
     Security Act of 1974 (29 U.S.C. 1108(a)) and section 
     4975(c)(2) of the Internal Revenue Code of 1986.
       (b) Consideration of Exemption Requests.--The Secretary of 
     Labor shall consider any request for exemption under 
     subsection (a) within a reasonable period of time after 
     receipt of such request.

     SEC. 210. SENSE OF THE SENATE ON TAXATION OF SMALL BUSINESS 
                   LOAN INVESTMENT CONDUITS.

       (a) Sense of the Senate.--It is the sense of the Senate 
     that the taxation of a small business loan investment conduit 
     and the holder of an interest therein should be similar to 
     the taxation of a real estate mortgage investment conduit and 
     the holder of an interest therein under the Internal Revenue 
     Code of 1986, taking into account, as appropriate--
       (1) the purpose of facilitating the securitization of small 
     business loans and leases or personal property through the 
     use of small business loan investment conduits and the 
     development of a secondary market in small business loans and 
     leases of personal property;
       (2) differences in the nature of qualifying mortgages in a 
     real estate mortgage investment conduit and small business 
     loans and leases of personal property;
       (3) differences in the practices of participants in the 
     securitization of real estate mortgages in a real estate 
     mortgage investment conduit and the securitization of other 
     assets; and
       (4) such other tax policies as may be warranted.
       (b) Small Business Loan Investment Conduit Defined.--For 
     purposes of this section, the term ``small business loan 
     investment conduit'' means an entity substantially all of the 
     assets of which consist of an interest in one or more 
     promissory notes as leases of personal property evidencing 
     obligations--
       (1) of a business that meets the criteria of a small 
     business concern established under section 3(a) of the Small 
     Business Act; and
       (2) that were originated by an insured depository 
     institution (as defined in section 3 of the Federal Deposit 
     Insurance Act), credit union, insurance company, or similar 
     institution which is supervised and examined by a Federal or 
     State authority, or a finance company or leasing company.
             Subtitle B--Small Business Capital Enhancement

     SEC. 251. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) small business concerns are a vital part of the 
     economy, accounting for the majority of new jobs, new 
     products, and new services created in the United States;
       (2) adequate access to debt capital is a critical component 
     for small business development, productivity, expansion, and 
     success in the United States;
       (3) commercial banks are the most important suppliers of 
     debt capital to small business concerns in the United States;
       (4) commercial banks and other depository institutions have 
     various incentives to minimize their risk in financing small 
     business concerns;
       (5) as a result of such incentives, many small business 
     concerns with economically sound financing needs are unable 
     to obtain access to needed debt capital;
       (6) the small business capital access programs implemented 
     by certain States are a flexible and efficient tool to assist 
     financial institutions in providing access to needed debt 
     capital for many small business concerns in a manner 
     consistent with safety and soundness regulations;
       (7) a small business capital access program would 
     complement other programs which assist small business 
     concerns in obtaining access to capital; and
       (8) Federal policy can stimulate and accelerate efforts by 
     States to implement small business capital access programs by 
     providing an incentive to States, while leaving the 
     administration of such programs to each participating State.
       (b) Purposes.--By encouraging States to implement 
     administratively efficient capital access programs that 
     encourage commercial banks and other depository institutions 
     to provide access to debt capital for a broad portfolio of 
     small business concerns, and thereby promote a more efficient 
     and effective debt market, the purposes of this subtitle 
     are--
       (1) to promote economic opportunity and growth;
       (2) to create jobs;
       (3) to promote economic efficiency;
       (4) to enhance productivity; and
       (5) to spur innovation.

     SEC. 252. DEFINITIONS.

       For purposes of this subtitle--
       (1) the term ``Secretary'' means the Secretary of Housing 
     and Urban Development;
       (2) the term ``appropriate Federal banking agency''--
       (A) has the same meaning as in section 3 of the Federal 
     Deposit Insurance Act; and
       (B) includes the National Credit Union Administration Board 
     in the case of any credit union the deposits of which are 
     insured in accordance with the Federal Credit Union Act;
       (3) the term ``early loan'' means a loan enrolled at a time 
     when the aggregate covered amount of loans previously 
     enrolled under the Program by a particular participating 
     financial institution is less than $5,000,000;
       (4) the term ``enrolled loan'' means a loan made by a 
     participating financial institution that is enrolled by a 
     participating State in accordance with this subtitle;
       (5) the term ``financial institution'' means any federally 
     chartered or State-chartered commercial bank, savings 
     association, savings bank, or credit union;
       (6) the term ``participating financial institution'' means 
     any financial institution that has entered into a 
     participation agreement with a participating State in 
     accordance with section 254;
       (7) the term ``participating State'' means any State that 
     has been approved for participation in the Program in 
     accordance with section 253;
       (8) the term ``passive real estate ownership'' means 
     ownership of real estate for the purpose of deriving income 
     from speculation, trade, or rental, except that such term 
     shall not include--
       (A) the ownership of that portion of real estate being used 
     or intended to be used for the operation of the business of 
     the owner of the real estate (other than the business of 
     passive ownership of real estate); or
       (B) the ownership of real estate for the purpose of 
     construction or renovation, until the completion of the 
     construction or renovation phase;
       (9) the term ``Program'' means the Small Business Capital 
     Enhancement Program established under this subtitle;
       (10) the term ``reserve fund'' means a fund, established by 
     a participating State, earmarked for a particular 
     participating financial institution, for the purposes of--
       (A) depositing all required premium charges paid by the 
     participating financial institution and by each borrower 
     receiving a loan under the Program from a participating 
     financial institution;
       (B) depositing contributions made by the participating 
     State; and
       (C) covering losses on enrolled loans by disbursing 
     accumulated funds; and
       (11) the term ``State'' means--
       (A) a State of the United States;
       (B) the District of Columbia;
       (C) any political subdivision of a State of the United 
     States, which subdivision has a population in excess of the 
     population of the least populated State of the United States; 
     and
       (D) any other political subdivision of a State of the 
     United States that the Secretary determines has the capacity 
     to participate in the program.

     SEC. 253. APPROVING STATES FOR PARTICIPATION.

       (a) Application.--Any State may apply to the Secretary for 
     approval to be a participating State under the Program and to 
     be eligible for reimbursement by the Secretary pursuant to 
     section 257.
       (b) Approval Criteria.--The Secretary shall approve a State 
     to be a participating State, if--
       (1) a specific department or agency of the State has been 
     designated to implement the Program;
       (2) all legal actions necessary to enable such designated 
     department or agency to implement the Program have been 
     accomplished;
       (3) funds in the amount of at least $1 for every 2 people 
     residing in the State (as of the last decennial census for 
     which data have been released) are available and have been 
     legally committed to contributions by the State to reserve 
     funds, with such funds being available without time limit and 
     without requiring additional legal action, except that such 
     requirements shall not be construed to limit the authority of 
     the State to take action at a later time that results in the 
     termination of its obligation to enroll loans and make 
     contributions to reserve funds;
       (4) the State has prescribed a form of participation 
     agreement to be entered into between it and each 
     participating financial institution that is consistent with 
     the requirements and purposes of this subtitle; and
       (5) the State and the Secretary have executed a 
     reimbursement agreement that conforms to the requirements of 
     this subtitle.
       (c) Existing State Programs.--
       (1) In general.--A State that is not a participating State, 
     but that has its own capital access program providing 
     portfolio insurance for business loans (based on a separate 
     loss reserve fund for each financial institution), may apply 
     at any time to the Secretary to be approved to be a 
     participating State. The Secretary shall approve such State 
     to be a participating State, and to be eligible for 
     reimbursements by the Secretary pursuant to section 257, if 
     the State--
       (A) satisfies the requirements of subsections (a) and (b); 
     and
       (B) certifies that each affected financial institution has 
     satisfied the requirements of section 254.
       (2) Applicable terms of participation.--
       (A) Status of institutions.--If a State is approved for 
     participation under paragraph (1), each financial institution 
     with a participation agreement in effect with the 
     participating State shall immediately be considered a 
     participating financial institution. Reimbursements may be 
     made under section 237 in connection with all contributions 
     made to the reserve fund by the State in connection with 
     lending that occurs on or after the date on which the 
     Secretary approves the State for participation.
       (B) Effective date of participation.--If an amended 
     participation agreement that conforms with section 255 is 
     required in order to secure participation approval by the 
     Secretary, contributions subject to reimbursement under 
     section 257 shall include only those contributions made to a 
     reserve fund with respect to loans enrolled on or after the 
     date that an amended participation agreement between the 
     participating State and the participating financial 
     institution becomes effective.
       (C) Use of accumulated reserve funds.--A State that is 
     approved for participation in accordance with this subsection 
     may continue to implement the program utilizing the reserve 
     funds accumulated under the State program.
       (d) Prior Appropriations Requirement.--The Secretary shall 
     not approve a State for participation in the Program until at 
     least $50,000,000 has been appropriated to the Secretary 
     (subject to an appropriations Act), without fiscal year 
     limitation, for the purpose of making reimbursements pursuant 
     to section 257.
       (e) Amendments to Agreements.--If a State that has been 
     approved to be a participating State wishes to amend its form 
     of participation agreement and continue to be a participating 
     State, such State shall submit such amendment for review by 
     the Secretary in accordance with subsection (b)(4). Any such 
     amendment shall become effective only after it has been 
     approved by the Secretary.

     SEC. 254. PARTICIPATION AGREEMENTS.

       (a) In General.--A participating State may enter into a 
     participation agreement with any financial institution 
     determined by the participating State, after consultation 
     with the appropriate Federal banking agency, to have 
     sufficient commercial lending experience and financial and 
     managerial capacity to participate in the Program. The 
     determination by the State shall not be reviewable by the 
     Secretary.
       (b) Participating Financial Institutions.--Upon entering 
     into the participation agreement with the participating 
     State, the financial institution shall become a participating 
     financial institution eligible to enroll loans under the 
     Program.

     SEC. 255. TERMS OF PARTICIPATION AGREEMENTS.

       (a) In General.--The participation agreement to be entered 
     into by a participating State and a participating financial 
     institution shall include all provisions required by this 
     section, and shall not include any provisions inconsistent 
     with the provisions of this section.
       (b) Establishment of Separate Reserve Funds.--A separate 
     reserve fund shall be established by the participating State 
     for each participating financial institution. All funds 
     credited to a reserve fund shall be the exclusive property of 
     the participating State. Each reserve fund shall be an 
     administrative account for the purposes of--
       (1) receiving all required premium charges to be paid by 
     the borrower and participating financial institution and 
     contributions by the participating State; and
       (2) disbursing funds, either to cover losses sustained by 
     the participating financial institution in connection with 
     loans made under the Program, or as contemplated by 
     subsections (d) and (r).
       (c) Investment Authority.--Subject to applicable State law, 
     the participating State may invest, or cause to be invested, 
     funds held in a reserve fund by establishing a deposit 
     account at the participating financial institution in the 
     name of the participating State. In the event that funds in 
     the reserve fund are not deposited in such an account, such 
     funds shall be invested in a form that the participating 
     State determines is safe and liquid.
       (d) Earned Income and Interest.--Interest or income earned 
     on the funds credited to a reserve fund shall be deemed to be 
     part of the reserve fund, except that a participating State 
     may, as further specified in the participation agreement, 
     provide authority for the participating State to withdraw 
     some or all of such interest or income earned.
       (e) Loan Terms and Conditions.--
       (1) In general.--A loan to be filed for enrollment under 
     the Program may be made with such interest rate, fees, and 
     other terms and conditions as agreed upon by the 
     participating financial institution and the borrower, 
     consistent with applicable law.
       (2) Lines of credit.--If a loan to be filed for enrollment 
     is in the form of a line of credit, the amount of the loan 
     shall be considered to be the maximum amount that can be 
     drawn by the borrower against the line of credit.
       (f) Enrollment Process.--
       (1) Filing.--
       (A) In general.--A participating financial institution 
     shall file each loan made under the Program for enrollment by 
     completing and submitting to the participating State a form 
     prescribed by the participating State.
       (B) Form.--The form referred to in subparagraph (A) shall 
     include a representation by the participating financial 
     institution that it has complied with the participation 
     agreement in enrolling the loan with the State.
       (C) Premium charges.--Accompanying the completed form shall 
     be the nonrefundable premium charges paid by the borrower and 
     the participating financial institution, or evidence that 
     such premium charges have been deposited into the deposit 
     account containing the reserve fund, if applicable.
       (D) Submission.--The participation agreement shall require 
     that the items required by this subsection shall be submitted 
     to the participating State by the participating financial 
     institutions not later than 10 calendar days after a loan is 
     made.
       (2) Enrollment by state.--Upon receipt by the participating 
     State of the filing submitted in accordance with paragraph 
     (1), the participating State shall promptly enroll the loan 
     and make a matching contribution to the reserve fund in 
     accordance with subsection (j), unless the information 
     submitted indicates that the participating financial 
     institution has not complied with the participation agreement 
     in enrolling the loan.
       (g) Coverage Amount.--In filing a loan for enrollment under 
     the Program, the participating financial institution may 
     specify an amount to be covered under the Program that is 
     less than the full amount of the loan.
       (h) Premium Charges.--
       (1) Minimum and maximum amounts.--The premium charges 
     payable to the reserve fund by the borrower and the 
     participating financial institution shall be prescribed by 
     the participating financial institution, within minimum and 
     maximum limits set forth in the participation agreement. The 
     participation agreement shall establish minimum and maximum 
     limits whereby the sum of the premium charges paid in 
     connection with a loan by the borrower and the participating 
     financial institution is not less than 3 percent nor more 
     than 7 percent of the amount of the loan covered under the 
     Program.
       (2) Allocation of premium charges.--The participation 
     agreement shall specify terms for allocating premium charges 
     between the borrower and the participating financial 
     institution. However, if the participating financial 
     institution is required to pay any of the premium charges, 
     the participation agreement shall authorize the participating 
     financial institution to recover from the borrower the cost 
     of the payment of the participating financial institution, in 
     any manner on which the participating financial institution 
     and the borrower agree.
       (i) Restrictions.--
       (1) Actions prohibited.--Except as provided in subsection 
     (h) and paragraph (2) of this subsection, the participating 
     State may not--
       (A) impose any restrictions or requirements, relating to 
     the interest rate, fees, collateral, or other business terms 
     and conditions of the loan; or
       (B) condition enrollment of a loan in the Program on the 
     review by the State of the risk or creditworthiness of a 
     loan.
       (2) Effect on other law.--Nothing in this subtitle shall 
     affect the applicability of any other law to the conduct by a 
     participating financial institution of its business.
       (j) State Contributions.--In enrolling a loan under the 
     Program, the participating State shall contribute to the 
     reserve fund an amount, as provided for in the participation 
     agreement, which shall not be less than the sum of the amount 
     of premium charges paid by the borrower and the participating 
     financial institution.
       (k) Elements of Claims.--
       (1) Filing.--If a participating financial institution 
     charges off all or part of an enrolled loan, such 
     participating financial institution may file a claim for 
     reimbursement with the participating State by submitting a 
     form that--
       (A) includes the representation by the participating 
     financial institution that it is filing the claim in 
     accordance with the terms of the applicable participation 
     agreement; and
       (B) contains such other information as may be required by 
     the participating State.
       (2) Timing.--Any claim filed under paragraph (1) shall be 
     filed contemporaneously with the action of the participating 
     financial institution to charge off all or part of an 
     enrolled loan. The participating financial institution shall 
     determine when and how much to charge off on an enrolled 
     loan, in a manner consistent with its usual method for making 
     such determinations on business loans that are not enrolled 
     loans under this subtitle.
       (l) Elements of Claims.--A claim filed by a participating 
     financial institution may include the amount of principal 
     charged off, not to exceed the covered amount of the loan. 
     Such claim may also include accrued interest and out-of-
     pocket expenses, if and to the extent provided for under the 
     participation agreement.
       (m) Payment of Claims.--
       (1) In general.--Except as provided in subsection (n) and 
     paragraph (2) of this subsection, upon receipt of a claim 
     filed in accordance with this section and the participation 
     agreement, the participating State shall promptly pay to the 
     participating financial institution, from funds in the 
     reserve fund, the full amount of the claim as submitted.
       (2) Insufficient reserve funds.--If there are insufficient 
     funds in the reserve fund to cover the entire amount of a 
     claim of a participating financial institution, the 
     participating State shall pay to the participating financial 
     institution an amount equal to the current balance in the 
     reserve fund. If the enrolled loan for which the claim has 
     been filed--
       (A) is not an early loan, such payment shall be deemed 
     fully to satisfy the claim, and the participating financial 
     institution shall have no other or further right to receive 
     any amount from the reserve fund with respect to such claim; 
     or
       (B) is an early loan, such payment shall not be deemed 
     fully to satisfy the claim of the participating financial 
     institution, and at such time as the remaining balance of the 
     claim does not exceed 75 percent of the balance in the 
     reserve fund, the participating State shall, upon the request 
     of the participating financial institution, pay any remaining 
     amount of the claim.
       (n) Denial of Claims.--A participating State may deny a 
     claim if a representation or warranty made by the 
     participating financial institution to the participating 
     State at the time that the loan was filed for enrollment or 
     at the time that the claim was submitted was known by the 
     participating financial institution to be false.
       (o) Subsequent Recovery of Claim Amount.--If, subsequent to 
     payment of a claim by the participating State, a 
     participating financial institution recovers from a borrower 
     any amount for which payment of the claim was made, the 
     participating financial institution shall promptly pay to the 
     participating State for deposit into the reserve fund the 
     amount recovered, less any expenses incurred by the 
     institution in collection of such amount.
       (p) Participation Agreement Terms.--
       (1) In general.--In connection with the filing of a loan 
     for enrollment in the Program, the participation agreement--
       (A) shall require the participating financial institution 
     to obtain an assurance from each borrower that--
       (i) the proceeds of the loan will be used for a business 
     purpose;
       (ii) the loan will not be used to finance passive real 
     estate ownership; and
       (iii) the borrower is not--

       (I) an executive officer, director, or principal 
     shareholder of the participating financial institution;
       (II) a member of the immediate family of an executive 
     officer, director, or principal shareholder of the 
     participating financial institution; or
       (III) a related interest of any such executive officer, 
     director, principal shareholder, or member of the immediate 
     family;

       (B) shall require the participating financial institution 
     to provide assurances to the participating State that the 
     loan has not been made in order to place under the protection 
     of the Program prior debt that is not covered under the 
     Program and that is or was owed by the borrower to the 
     participating financial institution or to an affiliate of the 
     participating financial institution;
       (C) may provide that if--
       (i) a participating financial institution makes a loan to a 
     borrower that is a refinancing of a loan previously made to 
     the borrower by the participating financial institution or an 
     affiliate of the participating financial institution;
       (ii) such prior loan was not enrolled in the Program; and
       (iii) additional or new financing is extended by the 
     participating financial institution as part of the 
     refinancing,

     the participating financial institution may file the loan for 
     enrollment, with the amount to be covered under the Program 
     not to exceed the amount of any additional or new financing; 
     and
       (D) may include additional restrictions on the eligibility 
     of loans or borrowers that are not inconsistent with the 
     provisions and purposes of this subtitle.
       (2) Definitions.--For purposes of this subsection, the 
     terms ``executive officer'', ``director'', ``principal 
     shareholder'', ``immediate family'', and ``related interest'' 
     refer to the same relationship to a participating financial 
     institution as the relationship described in part 215 of 
     title 12 of the Code of Federal Regulations, or any successor 
     to such part.
       (q) Termination Clause.--In each participation agreement, 
     the participating State shall reserve for itself the ability 
     to terminate its obligation to enroll loans under the 
     Program. Any such termination shall be prospective only, and 
     shall not apply to amounts of loans enrolled under the 
     Program prior to such termination.
       (r) Allowable Withdrawals From Fund.--
       The participation agreement may provide that, if, for any 
     consecutive period of not less than 24 months, the aggregate 
     outstanding balance of all enrolled loans for a participating 
     financial institution is continually less than the 
     outstanding balance in the reserve fund for that 
     participating financial institution, the participating State, 
     in its discretion, may withdraw an amount from the reserve 
     fund to bring the balance in the reserve fund down to the 
     outstanding balance of all such enrolled loans.
       (s) Grandfathered Provision.--
       (1) Special treatment of premium charges.--Notwithstanding 
     subsection (b) or (d), the participation agreement, if 
     explicitly authorized by a statute enacted by the State 
     before the date of enactment of this Act, may allow a 
     participating financial institution to treat the premium 
     charges paid by the participating financial institution and 
     the borrower into the reserve fund, and interest or income 
     earned on funds in the reserve fund that are deemed to be 
     attributable to such premium charges, as assets of the 
     participating financial institution for accounting purposes, 
     subject to withdrawal by the participating financial 
     institution only--
       (A) for the payment of claims approved by the participating 
     State in accordance with this section; and
       (B) upon the participating financial institution's 
     withdrawal from authority to make new loans under the 
     Program.
       (2) Payment of post-withdrawal claims.--After any 
     withdrawal of assets from the reserve fund pursuant to 
     paragraph (1)(B), any future claims filed by the 
     participating financial institution on loans remaining in its 
     capital access program portfolio shall only be paid from 
     funds remaining in the reserve fund to the extent that, in 
     the aggregate, such claims exceed the sum of the amount of 
     such withdrawn assets, and interest on that amount, imputed 
     at the same rate as income would have accrued had the amount 
     not been withdrawn.
       (3) Conditions for terminating special authority.--If the 
     Secretary determines that the inclusion in a participation 
     agreement of the provisions authorized by this subsection is 
     resulting in the enrollment of loans under the Program that 
     are likely to have been made without assistance provided 
     under this subtitle, the Secretary may notify the 
     participating State that henceforth, the Secretary will only 
     make reimbursements to the State under section 257 with 
     respect to a loan if the participation agreement between the 
     participating State and each participating financial 
     institution has been amended to conform with this section, 
     without exercise of the special authority granted by this 
     subsection.

     SEC. 256. REPORTS.

       (a) Reserve Funds Report.--On or before the last day of 
     each calendar quarter, a participating State shall submit to 
     the Secretary a report of contributions to reserve funds made 
     by the participating State during the previous calendar 
     quarter. If the participating State has made contributions to 
     one or more reserve funds during the previous quarter, the 
     report shall--
       (1) indicate the total amount of such contributions;
       (2) indicate the amount of contributions which is subject 
     to reimbursement, which shall be equal to the total amount of 
     contributions, unless one of the limitations contained in 
     section 257 is applicable;
       (3) if one of the limitations in section 257 is applicable, 
     provide documentation of the applicability of such limitation 
     for each loan for which the limitation applies; and
       (4) include a certification by the participating State 
     that--
       (A) the information provided in accordance with paragraphs 
     (1), (2), and (3) is accurate;
       (B) funds in an amount meeting the minimum requirements of 
     section 253(b)(3) continue to be available and legally 
     committed to contributions by the State to reserve funds, 
     less any amount that has been contributed by the State to 
     reserve funds subsequent to the State being approved for 
     participation in the Program;
       (C) there has been no unapproved amendment to any 
     participation agreement or the form of participation 
     agreements; and
       (D) the participating State is otherwise implementing the 
     Program in accordance with this subtitle and regulations 
     issued pursuant to section 259.
       (b) Annual Data.--Not later than March 31 of each year, 
     each participating State shall submit to the Secretary annual 
     data indicating the number of borrowers financed under the 
     Program, the total amount of covered loans, and breakdowns by 
     industry type, loan size, annual sales, and number of 
     employees of the borrowers financed.
       (c) Form.--The reports and data filed pursuant to 
     subsections (a) and (b) shall be in such form as the 
     Secretary may require.

     SEC. 257. REIMBURSEMENT BY THE SECRETARY.

       (a) Reimbursements.--Not later than 30 calendar days after 
     receiving a report filed in compliance with section 256, the 
     Secretary shall reimburse the participating State in an 
     amount equal to 50 percent of the amount of contributions by 
     the participating State to the reserve funds that are subject 
     to reimbursement by the Secretary pursuant to section 256 and 
     this section. The Secretary shall reimburse participating 
     States, as it receives reports pursuant to section 256(a), 
     until available funds are expended.
       (b) Size of Assisted Borrower.--The Secretary shall not 
     provide any reimbursement to a participating State with 
     respect to an enrolled loan made to a borrower that has 500 
     or more employees at the time that the loan is enrolled in 
     the Program.
       (c) Three-Year Maximum.--The amount of reimbursement to be 
     provided by the Secretary to a participating State over any 
     3-year period in connection with loans made to any single 
     borrower or any group of borrowers among which a common 
     enterprise exists shall not exceed $75,000. For purposes of 
     this subsection, ``common enterprise'' shall have the same 
     meaning as in part 32 of title 12 of the Code of Federal 
     Regulations, or any successor to that part.
       (d) Loans Totaling Less Than $2,000,000.--In connection 
     with a loan in which the covered amount of the loan plus the 
     covered amount of all previous loans enrolled by a 
     participating financial institution does not exceed 
     $2,000,000, the amount of reimbursement by the Secretary to 
     the participating State shall not exceed the lesser of--
       (1) 75 percent of the sum of the premium charges paid to 
     the reserve fund by the borrower and the participating 
     financial institution; or
       (2) 5.25 percent of the covered amount of the loan.
       (e) Loans Totaling More Than $2,000,000.--In connection 
     with a loan in which the sum of the covered amounts of all 
     previous loans enrolled by the participating financial 
     institution in the Program equals or exceeds $2,000,000, the 
     amount of reimbursement to be provided by the Secretary to 
     the participating State shall not exceed the lesser of--
       (1) 50 percent of the sum of the premium charges paid by 
     the borrower and the participating financial institution; or
       (2) 3.5 percent of the covered amount of the loan.
       (f) Other Amounts.--In connection with the enrollment of a 
     loan that will cause the aggregate covered amount of all 
     enrolled loans to exceed $2,000,000, the amount of 
     reimbursement by the Secretary to the participating State 
     shall be determined--
       (1) by applying subsection (d) to the portion of the loan, 
     which when added to the aggregate covered amount of all 
     previously enrolled loans equals $2,000,000; and
       (2) by applying subsection (e) to the balance of the loan.

     SEC. 258. REIMBURSEMENT TO THE SECRETARY.

       (a) In General.--If a participating State withdraws funds 
     from a reserve fund pursuant to terms of the participation 
     agreement permitted by subsection (d) or (r) of section 255, 
     such participating State shall, not later than 15 calendar 
     days after such withdrawal, submit to the Secretary an amount 
     computed by multiplying the amount withdrawn by the 
     appropriate factor, as determined under subsection (b).
       (b) Factor.--The appropriate factor shall be obtained by 
     dividing the total amount of contributions that have been 
     made by the participating State to all reserve funds which 
     were subject to reimbursement--
       (1) by 2; and
       (2) by the total amount of contributions made by the 
     participating State to all reserve funds, including if 
     applicable, contributions that have been made by the State 
     prior to becoming a participating State if the State 
     continued its own capital access program in accordance with 
     section 253(b).
       (c) Use of Reimbursements.--The Secretary may use funds 
     reimbursed pursuant to this section to make reimbursements 
     under section 257.

     SEC. 259. REGULATIONS.

       The Secretary shall promulgate appropriate regulations to 
     implement this subtitle.

     SEC. 260. AUTHORIZATION OF APPROPRIATIONS.

       (a) Amount.--There are authorized to be appropriated to the 
     Secretary $50,000,000 to carry out this subtitle.
       (b) Budgetary Treatment.--The amount authorized to be 
     appropriated under subsection (a) shall be subject to 
     discretionary spending caps, as provided in section 601 of 
     the Congressional Budget Act of 1974, and therefore shall 
     reduce by an equal amount funds made available for other 
     discretionary spending programs.
       TITLE III--PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT

     SEC. 301. INCORPORATED DEFINITIONS.

       Unless otherwise specifically provided in this title, for 
     purposes of this title--
       (1) the terms ``appropriate Federal banking agency'', 
     ``Federal banking agencies'', and ``insured depository 
     institution'' have the same meanings as in section 3 of the 
     Federal Deposit Insurance Act; and
       (2) the term ``insured credit union'' has the same meaning 
     as in section 101 of the Federal Credit Union Act.

     SEC. 302. ADMINISTRATIVE CONSIDERATION OF BURDEN WITH NEW 
                   REGULATIONS.

       In determining the effective date and administrative 
     compliance requirements for new regulations that impose 
     additional reporting, disclosure, or other requirements on 
     insured depository institutions, each Federal banking agency 
     shall consider, consistent with the principles of safety and 
     soundness and the public interest--
       (1) any administrative burdens that such regulations would 
     place on depository institutions, including small depository 
     institutions, and customers of depository institutions; and
       (2) the benefits of such regulations.

     SEC. 303. STREAMLINING OF REGULATORY REQUIREMENTS.

       (a) Review of Regulations; Regulatory Uniformity.--During 
     the 2-year period beginning on the date of enactment of this 
     Act, each Federal banking agency shall, consistent with 
     principles of safety and soundness and the public interest--
       (1) conduct a review of the regulations and written 
     policies of that agency--
       (A) to streamline those regulations and policies in order 
     to improve efficiency, reduce unnecessary costs, and 
     eliminate unwarranted constraints on credit availability; and
       (B) to remove inconsistencies and outmoded and duplicative 
     requirements; and
       (2) work jointly with the other Federal banking agencies to 
     make uniform all regulations and guidelines implementing 
     common statutory or supervisory policies.
       (b) Report to Congress.--The Federal banking agencies shall 
     submit a joint report to the Congress annually for 2 years 
     following the date of enactment of this Act detailing the 
     progress of the agencies in carrying out the requirements of 
     subsection (a).

     SEC. 304. ELIMINATION OF DUPLICATIVE FILINGS.

       The Federal banking agencies shall work jointly--
       (1) to eliminate, to the extent practicable, duplicative or 
     otherwise unnecessary requests for information in connection 
     with applications or notices to the agencies; and
       (2) to harmonize, to the extent practicable, any 
     inconsistent publication and public notice requirements.

     SEC. 305. COORDINATED AND UNIFIED EXAMINATIONS.

       Section 10(d) of the Federal Deposit Insurance Act (12 
     U.S.C. 1820(d)) is amended by adding at the end the following 
     new paragraph:
       ``(6) Coordinated examinations.--To minimize the disruptive 
     effects of examinations on the operations of insured 
     depository institutions--
       ``(A) each appropriate Federal banking agency shall, to the 
     extent practicable and consistent with safety and soundness 
     principles and the public interest--
       ``(i) coordinate examinations to be conducted by that 
     agency at an insured depository institution and its 
     affiliates;
       ``(ii) coordinate with the other appropriate Federal 
     banking agencies in the conduct of such examinations; and
       ``(iii) work to coordinate the conduct of all examinations 
     made pursuant to this subsection with the appropriate State 
     bank supervisor; and
       ``(B) not later than 2 years after the date of enactment of 
     the Community Development, Credit Enhancement, and Regulatory 
     Improvement Act of 1993, the Federal banking agencies shall 
     jointly establish and implement a system for determining 
     which one of the Federal banking agencies shall conduct a 
     unified examination of each insured depository institution 
     and its affiliates, as required by this subsection, on behalf 
     of all Federal banking agencies.''.

     SEC. 306. EIGHTEEN-MONTH EXAMINATION RULE FOR CERTAIN SMALL 
                   INSTITUTIONS.

       Section 10(d)(4) of the Federal Deposit Insurance Act (12 
     U.S.C. 1820(d)(4)) is amended--
       (1) in subparagraph (A), by striking ``$100,000,000'' and 
     inserting ``$250,000,000'';
       (2) in subparagraph (C), by striking ``and its composite 
     condition was found to be outstanding;'' and inserting ``and 
     its composite condition--
       ``(i) was found to be outstanding; or
       ``(ii) in the case of an insured depository institution 
     that has total assets of less than $175,000,000, was found to 
     be outstanding or good;''.
       (3) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (4) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) the insured institution is not currently subject to a 
     formal enforcement proceeding or order by the Corporation or 
     the appropriate Federal banking agency; and''.

     SEC. 307. 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 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 1 year after the date of enactment of 
     this Act, 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 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 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. 308. REPEAL OF PUBLICATION REQUIREMENTS.

       (a) Revised Statutes.--Section 5211 of the Revised Statutes 
     (12 U.S.C. 161) is amended--
       (1) in the fifth sentence of subsection (a), by striking 
     ``; and the statement of resources'' and all that follows 
     through ``as may be required by the Comptroller''; and
       (2) in subsection (c), by striking the fourth sentence.
       (b) FDIA.--Section 7(a)(1) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1817(a)(1)) is amended by striking the fourth 
     sentence.
       (c) Federal Reserve Act.--Section 9 of the Federal Reserve 
     Act (12 U.S.C. 324) is amended in the last sentence of the 
     sixth undesignated paragraph, by striking ``and shall be 
     published'' and all that follows through the end of the 
     sentence and inserting a period.

     SEC. 309. REGULATORY APPEALS PROCESS.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, each appropriate Federal banking 
     agency and the National Credit Union Administration Board 
     shall establish an independent intra-agency appellate 
     process. The process shall be available to review material 
     supervisory determinations made at insured depository 
     institutions or at insured credit unions that the agency 
     supervises.
       (b) Review Process.--In establishing the independent 
     appellate process under subsection (a), each agency shall 
     ensure--
       (1) that any appeal of a material supervisory determination 
     by an insured depository institution or credit union is heard 
     and decided expeditiously; and
       (2) that appropriate safeguards exist for protecting the 
     appellant from retaliation by agency examiners.
       (c) Comment Period.--Not later than 90 days after the date 
     of enactment of this Act, each appropriate Federal banking 
     agency and the National Credit Union Administration shall 
     provide public notice and opportunity for comment on proposed 
     guidelines for the establishment of an appellate process 
     under this section.
       (d) Definitions.--For purposes of this section--
       (1) the term ``material supervisory determinations'' 
     includes determinations relating to--
       (A) examination ratings;
       (B) the adequacy of loan loss reserve provisions; and
       (C) loan classifications on loans that are significant to 
     the institution; and
       (2) the term ``independent appellate process'' means a 
     review by an agency official who does not directly or 
     indirectly report to the agency official who made the 
     material supervisory determination under review.
       (e) Effect on Other Authority.--Nothing in this section 
     shall affect the authority of an appropriate Federal banking 
     agency or the National Credit Union Association Board to take 
     enforcement or supervisory action against an institution.

     SEC. 310. ELECTRONIC FILING OF CURRENCY TRANSACTION REPORTS.

       Section 123 of the Bank Secrecy Act (12 U.S.C. 1953) is 
     amended by adding at the end the following new subsection:
       ``(c) Acceptance of Automated Records.--The Secretary shall 
     permit an uninsured bank or financial institution to retain 
     or maintain records referred to in subsection (a) in 
     electronic or automated form, subject to terms and conditions 
     established by the Secretary.''.

     SEC. 311. BANK SECRECY ACT PUBLICATION REQUIREMENTS.

       Chapter 53 of title 31, United States Code, is amended by 
     adding at the end the following new section:

     ``SEC. 5329. STAFF COMMENTARIES.

       ``The Secretary shall--
       ``(1) publish all written rulings interpreting this 
     chapter; and
       ``(2) annually issue a staff commentary on the regulations 
     issued under this chapter.''.

     SEC. 312. EXEMPTION OF BUSINESS LOANS FROM REAL ESTATE 
                   SETTLEMENT PROCEDURES ACT REQUIREMENTS.

       The Real Estate Settlement Procedures Act of 1974 (12 
     U.S.C. 2601 et seq.) is amended by inserting after section 6 
     the following new section:

     ``SEC. 7. EXEMPTED TRANSACTIONS.

       ``This Act does not apply to credit transactions involving 
     extensions of credit--
       ``(1) primarily for business, commercial, or agricultural 
     purposes; or
       ``(2) to government or governmental agencies or 
     instrumentalities.''.

     SEC. 313. FLEXIBILITY IN CHOOSING BOARDS OF DIRECTORS.

       Section 5146 of the Revised Statutes (12 U.S.C. 72) is 
     amended in the first sentence, by striking ``two thirds'' and 
     inserting ``a majority''.

     SEC. 314. HOLDING COMPANY AUDIT REQUIREMENTS.

       Section 36(i) of the Federal Deposit Insurance Act (12 
     U.S.C. 1831m(i)) is amended by striking paragraph (2) and 
     inserting the following:
       ``(2) the institution--
       ``(A) has total assets, as of the beginning of such fiscal 
     year, of less than $5,000,000,000;
       ``(B) has--
       ``(i) total assets, as of the beginning of such fiscal 
     year, of more than $5,000,000,000 and less than 
     $9,000,000,000; and
       ``(ii) a CAMEL composite rating of 1 or 2 under the Uniform 
     Financial Institutions Rating System (or an equivalent rating 
     by any such agency under a comparable rating system) as of 
     the most recent examination of such institution by the 
     Corporation or the appropriate Federal banking agency; or
       ``(C)(i) has total assets, as of the beginning of such 
     fiscal year, of more than $9,000,000,000; and
       ``(ii) has a CAMEL composite rating of 1 or 2 under the 
     Uniform Financial Institutions Rating System (or an 
     equivalent rating by any such agency under a comparable 
     rating system) as of the most recent examination of such 
     institution by the Corporation or the appropriate Federal 
     banking agency.

     Notwithstanding paragraph (2)(C), in the case of an insured 
     depository institution that the Corporation determines to be 
     a large institution, the audit committee of the holding 
     company of such an institution shall not include any large 
     customers of the institution.
       ``(3) The appropriate Federal banking agency may require an 
     institution with total assets in excess of $9,000,000,000 to 
     comply with this section, notwithstanding the exception 
     provided by this subsection, if it determines that such 
     exemption will create a significant risk to the affected 
     deposit insurance fund if applied to that institution.''.

     SEC. 315. STATE REGULATION OF REAL ESTATE APPRAISALS.

       Section 1122 of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is 
     amended--
       (1) by redesignating subsections (b) through (e) as 
     subsections (c) through (f), respectively;
       (2) by inserting after subsection (a) the following new 
     subsection:
       ``(b) Reciprocity.--The Appraisal Subcommittee shall 
     encourage the States to develop reciprocity agreements that 
     readily authorize appraisers who are licensed or certified in 
     one State (and who are in good standing with their State 
     appraiser certifying or licensing agency) to perform 
     appraisals in other States.''; and
       (3) in subsection (a)--
       (A) by redesignating paragraphs (1) through (3) as 
     subparagraphs (A) through (C);
       (B) by striking ``A State'' and inserting the following:
       ``(1) In general.--A State''; and
       (C) by adding at the end the following new paragraph:
       ``(2) Fees for temporary practice.--A State appraiser 
     certifying or licensing agency shall not impose excessive 
     fees or burdensome requirements, as determined by the 
     Appraisal Subcommittee, for temporary practice under this 
     subsection.''.

     SEC. 316. ACCELERATION OF EFFECTIVE DATE FOR INTERAFFILIATE 
                   TRANSACTIONS.

       (a) Home Owners' Loan Act Amendment.--Section 11(a)(2) of 
     the Home Owners' Loan Act (12 U.S.C. 1468(a)(2)) is amended 
     by adding at the end the following new subparagraph:
       ``(C) Transition rule for well capitalized savings 
     associations.--
       ``(i) In general.--A savings association that is well 
     capitalized (as defined in section 38 of the Federal Deposit 
     Insurance Act), as determined without including goodwill in 
     calculating core capital, shall be treated as a bank for 
     purposes of section 23A(d)(1) and section 23B of the Federal 
     Reserve Act.
       ``(ii) Liability of commonly controlled depository 
     institutions.--Any savings association that engages under 
     clause (i) in a transaction that would not otherwise be 
     permissible under this subsection, and any affiliated insured 
     bank that is commonly controlled (as defined in section 
     5(e)(9) of the Federal Deposit Insurance Act), shall be 
     subject to subsection (e) of section 5 of the Federal Deposit 
     Insurance Act as if paragraph (6) of that subsection did not 
     apply.''.
       (b) Repeal Provision.--Effective on January 1, 1995, 
     subparagraph (C) of section 11(a)(2) of the Home Owners' Loan 
     Act (12 U.S.C. 1468(a)(2)) (as added by subsection (a) of 
     this section) is repealed.

     SEC. 317. COLLATERALIZATION OF PUBLIC DEPOSITS.

       Section 13(e) of the Federal Deposit Insurance Act (12 
     U.S.C. 1823(e)) is amended--
       (1) by redesignating paragraphs (1) through (4) as 
     subparagraphs (A) through (D), respectively;
       (2) by striking ``No agreement'' and inserting the 
     following:
       ``(1) In general.--No agreement''; and
       (3) by adding at the end the following new paragraph:
       ``(2) Public deposits.--An agreement to provide for the 
     lawful collateralization of deposits of a Federal, State, or 
     local governmental entity or of any depositor referred to in 
     section 11(a)(2) shall not be deemed to be invalid pursuant 
     to paragraph (1)(B) solely because such agreement was not 
     executed contemporaneously with the acquisition of the 
     collateral or with any changes in the collateral made in 
     accordance with such agreement.''.

     SEC. 318. ELIMINATION OF STOCK VALUATION PROVISION.

       (a) In General.--Section 39(b) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1831p-1(b)), as added by section 
     132(a) of the Federal Deposit Insurance Corporation 
     Improvements Act of 1991) is amended to read as follows:
       ``(b) Asset Quality, Earnings, and Stock Valuation 
     Standards.--Each appropriate Federal banking agency shall, 
     for all insured depository institutions and depository 
     institution holding companies, prescribe standards relating 
     to asset quality, earnings, and stock valuation that the 
     agency determines to be appropriate.''.
       (b) Establishing Standards in Guidelines.--Section 39(d) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1831p-1(d)) is 
     amended--
       (1) in the subsection heading, by striking ``by 
     Regulation''; and
       (2) in paragraph (1)--
       (A) in the first sentence, by inserting ``or guideline'' 
     before the period; and
       (B) in the second sentence, by inserting ``or guidelines'' 
     after ``Such regulations''.
       (c) Effective Date.--The amendments made by subsections (a) 
     and (b) shall be construed to have the same effective date as 
     section 39 of the Federal Deposit Insurance Act, as provided 
     in section 132(c) of the Federal Deposit Insurance 
     Corporation Improvements Act of 1991.

     SEC. 319. EXPEDITED PROCEDURES FOR FORMING A BANK HOLDING 
                   COMPANY.

       Section 3(a) of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1842(a)) is amended--
       (1) in the second sentence, by striking ``or (B)'' and 
     inserting ``(B)''; and
       (2) in the second sentence, by inserting before the period 
     the following: ``; or (C) with 30 days prior notification to 
     the Board, the acquisition by a company of control of a bank 
     in a reorganization in which a person or group of persons 
     exchanges its shares of the bank for shares of a newly formed 
     bank holding company and receives, after the reorganization, 
     substantially the same proportional share interest in the 
     holding company as it held in the bank (except for changes in 
     shareholders' interests resulting from the exercise of 
     dissenting shareholders' rights under State or Federal law) 
     if, immediately following the acquisition, (i) the bank 
     holding company meets the capital and other financial 
     standards prescribed by the Board by regulation for such a 
     bank holding company; (ii) the bank is adequately capitalized 
     (as defined in section 38 of the Federal Deposit Insurance 
     Act); and (iii) the holding company does not engage in any 
     activities other than those of banking or managing and 
     controlling banks''.

     SEC. 320. EXEMPTION OF CERTAIN HOLDING COMPANY FORMATIONS 
                   FROM REGISTRATION UNDER THE SECURITIES ACT OF 
                   1933.

       Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is 
     amended by adding at the end the following new paragraph:
       ``(7) transactions involving offers or sales of equity 
     securities, in connection with the acquisition of a bank by a 
     company under section 3(a) of the Bank Holding Company Act of 
     1956, if--
       ``(A) the acquisition occurs solely as part of a 
     reorganization in which a person or group of persons 
     exchanges its shares of a bank for shares of a newly formed 
     bank holding company with no significant assets other than 
     securities of the bank and the existing subsidiaries of the 
     bank;
       ``(B) the shareholders receive, after that reorganization, 
     substantially the same proportional share interests in the 
     bank holding company as they held in the bank, except for 
     changes in shareholders' interests resulting from lawful 
     elimination of fractional interests and the exercise of 
     dissenting shareholders' rights under State or Federal law;
       ``(C) the rights and interests of security holders in the 
     bank holding company are substantially the same as those in 
     the bank prior to the transaction, other than as may be 
     required by law; and
       ``(D) the bank holding company has substantially the same 
     assets and liabilities as the bank had prior to the 
     transaction.''.

     SEC. 321. REDUCTION OF POST-APPROVAL WAITING PERIOD FOR BANK 
                   HOLDING COMPANY ACQUISITIONS.

       Section 11(b)(1) of the Bank Holding Company Act of 1956 
     (12 U.S.C. 1849(b)(1)) is amended by inserting before the 
     period at the end of the fourth sentence the following: ``or, 
     if the Board has not received any adverse comment from the 
     Attorney General of the United States relating to competitive 
     factors, such shorter period of time as may be prescribed by 
     the Board with the concurrence of the Attorney General, but 
     in no event less than 15 calendar days after the date of 
     approval''.

     SEC. 322. REDUCTION OF POST-APPROVAL WAITING PERIOD FOR BANK 
                   MERGERS.

       Section 18(c)(6) of the Federal Deposit Insurance Act (12 
     U.S.C. 1828(c)(6)) is amended by inserting before the period 
     at the end of the last sentence the following: ``or, if the 
     agency has not received any adverse comment from the Attorney 
     General of the United States relating to competitive factors, 
     such shorter period of time as may be prescribed by the 
     agency with the concurrence of the Attorney General, but in 
     no event less than 15 calendar days after the date of 
     approval''.

     SEC. 323. BANKERS' BANKS.

       (a) Ownership by Bankers' Banks.--
       (1) Paragraph Seventh of section 5136 of the Revised 
     Statutes (12 U.S.C. 24) is amended in the eleventh sentence--
       (A) by inserting ``or depository institution holding 
     companies (as defined in section 3 of the Federal Deposit 
     Insurance Act)'' after ``(except to the extent directors' 
     qualifying shares are required by law) by depository 
     institutions''; and
       (B) by striking ``services for other depository 
     institutions and their officers, directors and employees'' 
     and inserting the following: ``services to or for other 
     depository institutions and the officers, directors, and 
     employees of such institutions, and in providing 
     correspondent banking services at the request of other 
     depository institutions (also referred to as a `banker's 
     bank')''.
       (2) Section 5169(b)(1) of the Revised Statutes (12 U.S.C. 
     27(b)(1)) is amended--
       (A) by inserting ``or depository institution holding 
     companies'' after ``(except to the extent directors' 
     qualifying shares are required by law) by other depository 
     institutions''; and
       (B) by striking ``services for other depository 
     institutions and their officers, directors and employees'' 
     and inserting the following: ``services to or for other 
     depository institutions and the officers, directors, and 
     employees of such institutions, and in providing 
     correspondent banking services at the request of other 
     depository institutions (also referred to as a `banker's 
     bank')''.
       (b) Ownership by Savings Associations.--Section 5(c)(4) of 
     the Home Owners' Loan Act (12 U.S.C. 1464(c)(4)) is amended 
     by adding at the end the following new subparagraph:
       ``(E) Bankers' Banks.--A Federal savings association may 
     purchase for its own account shares of stock of a bankers' 
     bank, described in Paragraph Seventh of section 5136 of the 
     Revised Statutes or in section 5169(b) of the Revised 
     Statutes, on the same terms and conditions as a national bank 
     may purchase such shares.''.
       (c) Technical and Conforming Amendments.--
       (1) Bank holding company act.--Section 3(e) of the Bank 
     Holding Company Act of 1956 (12 U.S.C. 1842(e)) is amended by 
     striking the second sentence.
       (2) Management interlocks act.--Section 202(3)(D) of the 
     Depository Institution Management Interlocks Act (12 U.S.C. 
     3201(3)(D)) is amended by striking ``the voting securities'' 
     and all that follows through the end of the subparagraph and 
     inserting ``and is a bankers' bank, described in Paragraph 
     Seventh of section 5136 of the Revised Statutes; or''.
       (d) Lending Limit for Loans Secured by Securities.--Section 
     11(m) of the Federal Reserve Act (12 U.S.C. 248(m)) is 
     amended by striking ``10 percentum'' each place such term 
     appears and inserting ``15 percent''.

     SEC. 324. BANK SERVICE CORPORATION ACT AMENDMENT.

       Section 5 of the Bank Service Corporation Act (12 U.S.C. 
     1865) is amended--
       (1) in subsection (a), by striking ``the prior approval 
     of'' and inserting ``prior notice, as determined by''; and
       (2) in subsection (c), by inserting ``or whether to approve 
     or disapprove any notice'' after ``approval''.

     SEC. 325. MERGER TRANSACTION REPORTS.

       Section 18(c) of the Federal Deposit Insurance Act (12 
     U.S.C. 1828(c)) is amended--
       (1) in paragraph (4)--
       (A) in the first sentence--
       (i) by striking ``General and the other two'' and inserting 
     ``General, who shall promptly notify the other''; and
       (ii) by inserting before the period ``of any such proposed 
     transaction that raises a significant competitiveness 
     issue''; and
       (B) in the second sentence, by striking ``and the other two 
     banking agencies''; and
       (2) in paragraph (6), by striking ``and the other two 
     banking agencies''.

     SEC. 326. CREDIT CARD ACCOUNTS RECEIVABLE SALES.

       Section 11(e) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821(e)) is amended by adding at the end the following 
     new paragraphs:
       ``(14) Selling credit card accounts receivable.--
       ``(A) Notification required.--An undercapitalized insured 
     depository institution (as defined in section 38) shall 
     notify the Corporation in writing before entering into an 
     agreement to sell credit card accounts receivable.
       ``(B) Waiver by corporation.--The Corporation may at any 
     time, in its sole discretion and upon such terms as it may 
     prescribe, waive its right to repudiate an agreement to sell 
     credit card accounts receivable if the Corporation--
       ``(i) determines that the waiver is in the best interests 
     of the deposit insurance fund; and
       ``(ii) provides a written waiver to the selling 
     institution.
       ``(C) Effect of waiver on successors.--
       ``(i) In general.--If, under subparagraph (B), the 
     Corporation has waived its right to repudiate an agreement to 
     sell credit card accounts receivable--

       ``(I) any provision of the agreement that restricts 
     solicitation of a credit card customer of the selling 
     institution, or the use of a credit card customer list of the 
     institution, shall bind any receiver or conservator of the 
     institution; and
       ``(II) the Corporation shall require any acquirer of the 
     selling institution, or of substantially all of the selling 
     institution's assets or liabilities, to agree to be bound by 
     a provision described in subclause (I) as if the acquirer 
     were the selling institution.

       ``(ii) Exception.--Clause (i)(II) does not--

       ``(I) restrict the acquirer's authority to offer any 
     product or service to any person identified without using a 
     list of the selling institution's customers in violation of 
     the agreement;
       ``(II) require the acquirer to restrict any preexisting 
     relationship between the acquirer and a customer; or
       ``(III) apply to any transaction in which the acquirer 
     acquires only insured deposits.

       ``(D) Waiver not actionable.--The Corporation shall not, in 
     any capacity, be liable to any person for damages resulting 
     from the waiver of or failure to waive the Corporation's 
     right under this section to repudiate any contract or lease, 
     including an agreement to sell credit card accounts 
     receivable. No court shall issue any order affecting any such 
     waiver or failure to waive.
       ``(E) Other authority not affected.--This paragraph does 
     not limit any other authority of the Corporation to waive the 
     Corporation's right to repudiate an agreement or lease under 
     this section.
       ``(15) Certain credit card customer lists protected.--
       ``(A) In general.--If any insured depository institution 
     sells credit card accounts receivable under an agreement 
     negotiated at arm's length that provides for the sale of the 
     institution's credit card customer list, the Corporation 
     shall prohibit any party to a transaction with respect to the 
     institution under this section or section 13 from using the 
     list except as permitted under the agreement.
       ``(B) Fraudulent transactions excluded.--Subparagraph (A) 
     does not limit the Corporation's authority to repudiate any 
     agreement entered into with the intent to hinder, delay, or 
     defraud the institution, the institution's creditors, or the 
     Corporation.''.

     SEC. 327. LIMITING POTENTIAL LIABILITY ON FOREIGN ACCOUNTS.

       (a) Amendment to the Federal Reserve Act.--The Federal 
     Reserve Act (12 U.S.C. 221 et seq.) is amended by inserting 
     after section 25B the following new section:

     ``SEC. 25C. POTENTIAL LIABILITY ON FOREIGN ACCOUNTS.

       ``A member bank shall not be required to repay any deposit 
     made at a foreign branch of the bank if the branch cannot 
     repay the deposit due to--
       ``(1) an act of war, insurrection or civil strife; or
       ``(2) an action by a foreign government or instrumentality 
     (whether de jure or de facto) in the country in which the 
     branch is located,

     unless the member bank has expressly agreed in writing to 
     repay the deposit under those circumstances. The Board and 
     the Comptroller of the Currency may jointly prescribe such 
     regulations as they deem necessary to implement this 
     section.''.
       (b) Conforming Amendments to the Federal Deposit Insurance 
     Act.--
       (1) In general.--Section 18 of the Federal Deposit 
     Insurance Act (12 U.S.C. 1828) is amended by adding at the 
     end the following new subsection:
       ``(q) Sovereign Risk.--Section 25C of the Federal Reserve 
     Act shall apply to every nonmember insured bank in the same 
     manner and to the same extent as if the nonmember insured 
     bank were a member bank.''.
       (2) Conforming amendment.--Subparagraph (A) of section 
     3(l)(5) of the Federal Deposit Insurance Act (12 U.S.C. 
     1813(l)(5)) is amended to read as follows:
       ``(A) any obligation of a depository institution which is 
     carried on the books and records of an office of such bank or 
     savings association located outside of any State, unless--
       ``(i) such obligation would be a deposit if it were carried 
     on the books and records of the depository institution, and 
     would be payable at, an office located in any State; and
       ``(ii) the contract evidencing the obligation provides by 
     express terms, and not by implication, for payment at an 
     office of the depository institution located in any State; 
     and''.
       (c) Existing Claims Not Affected--Section 25C of the 
     Federal Reserve Act (as added by subsection (a)) shall not be 
     applied retroactively and shall not be construed to affect or 
     apply to any claim or cause of action addressed by that 
     section arising from events or circumstances that occurred 
     before the date of enactment of this Act.

     SEC. 328. AMENDMENTS TO OUTDATED DIVIDEND PROVISIONS.

       (a) Withdrawal of Capital.--Section 5204 of the Revised 
     Statutes (12 U.S.C. 56) is amended--
       (1) in the second sentence, by striking ``net profits then 
     on hand, deducting therefrom its losses and bad debts'' and 
     inserting ``undivided profits, subject to other applicable 
     provisions of law''; and
       (2) by striking the third sentence.
       (b) Declaration of Dividends.--Section 5199 of the Revised 
     Statutes (12 U.S.C. 60) is amended--
       (1) in the first sentence, by striking ``net profits of the 
     association'' and inserting ``undivided profits of the 
     association, subject to the limitations in subsection (b),'';
       (2) by striking ``net profits'' each subsequent place such 
     term appears and inserting ``net income''; and
       (3) by striking subsection (c).

     SEC. 329. ELIMINATION OF DUPLICATIVE DISCLOSURES FOR HOME 
                   EQUITY LOANS.

       Section 4(a) of the Real Estate Settlement Procedures Act 
     (12 U.S.C. 2603(a)) is amended by adding at the end the 
     following: ``In the case of a federally related mortgage loan 
     secured by a subordinate lien on residential property, 
     disclosures made under section 127A(a) of the Truth in 
     Lending Act may be used in lieu of the disclosures required 
     under this section if--
       ``(1) the disclosures made pursuant to such section 127A(a) 
     contain all of the information that is required under this 
     section; and
       ``(2) the information is disclosed in a manner that is no 
     less conspicuous than is required under this section.''.

     SEC. 330. REPORT ON CAPITAL STANDARDS AND THEIR IMPACT ON THE 
                   ECONOMY.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Treasury, after 
     consultation with the Federal banking agencies, shall report 
     to the Committee on Banking, Housing, and Urban Affairs of 
     the Senate and the Committee on Banking, Finance and Urban 
     Affairs of the House of Representatives on the effect of the 
     implementation of risk-based capital standards on--
       (1) the safety and soundness of insured depository 
     institutions; and
       (2) the availability of credit, particularly to consumers 
     and small business concerns.
       (b) Recommendations.--The report required by subsection (a) 
     shall contain any recommendations that the Secretary of the 
     Treasury considers relevant.

     SEC. 331. STUDIES ON THE IMPACT OF THE PAYMENT OF INTEREST ON 
                   RESERVES.

       (a) Federal Reserve Study.--Not later than 180 days after 
     the date of enactment of this Act, the Board of Governors of 
     the Federal Reserve System, in consultation with the Federal 
     Deposit Insurance Corporation, shall conduct a study and 
     report to Congress on--
       (1) the necessity, for monetary policy purposes, of 
     continuing to require insured depository institutions to 
     maintain sterile reserves;
       (2) the appropriateness of paying a market rate of interest 
     to insured depository institutions on sterile reserves or, in 
     the alternative, providing for payment of such interest into 
     the appropriate deposit insurance fund;
       (3) the monetary impact that the failure to pay interest on 
     sterile reserves has had on insured depository institutions, 
     including an estimate of the total dollar amount of interest 
     and the potential income lost by insured depository 
     institutions; and
       (4) the impact that the failure to pay interest on sterile 
     reserves has had on the ability of the banking industry to 
     compete with nonbanking providers of financial services and 
     with foreign banks.
       (b) Budgetary Impact Study.--Not later than 180 days after 
     the date of enactment of this Act, the Director of the Office 
     of Management and Budget and the Director of the 
     Congressional Budget Office, in consultation with the 
     Committees on the Budget of the Senate and the House of 
     Representatives, shall jointly conduct a study and report to 
     the Congress on the budgetary impact of--
       (1) paying a market rate of interest to insured depository 
     institutions on sterile reserves; and
       (2) paying such interest into the respective deposit 
     insurance funds.

     SEC. 332. STUDY AND REPORT ON STREAMLINED LENDING PROCESS FOR 
                   CONSUMER BENEFIT.

       (a) Study.--During the 12-month period beginning on the 
     date of enactment of this Act, the Board of Governors of the 
     Federal Reserve System, the Comptroller of the Currency, and 
     the Secretary of Housing and Urban Development shall conduct 
     a study of ways to improve the home mortgage, small business, 
     and consumer lending processes, consistent with the 
     principles of safety and soundness, so as to--
       (1) reduce consumer burdens, inconvenience, cost, and 
     delay; and
       (2) minimize cost and burdens on insured depository 
     institutions, credit unions, and other lenders.
       (b) Comments.--In conducting the study under subsection 
     (a), comments shall be solicited from consumer groups, 
     insured depository institutions, other lenders, and any other 
     interested parties.
       (c) Report.--Not later than 12 months after the date of 
     enactment of this Act, the Board of Governors of the Federal 
     Reserve System, the Comptroller of the Currency, and the 
     Secretary of Housing and Urban Development shall submit a 
     joint report to the Congress indicating any legislative 
     changes necessary to improve the home mortgage, small 
     business, and consumer lending processes and including a 
     summary of comments received pursuant to subsection (b).

     SEC. 333. REPEAL OF OUTDATED CHARTER REQUIREMENT FOR NATIONAL 
                   BANKS.

       Section 5170 of the Revised Statutes (12 U.S.C. 28) is 
     repealed.

     SEC. 334. INCLUSION OF COMPTROLLER OF THE CURRENCY; 
                   CLARIFICATION OF REVISED STATUTES.

       (a) Public Law 93-425.--Section 111 of Public Law 93-495 
     (12 U.S.C. 250) is amended by inserting ``the Comptroller of 
     the Currency,'' after ``Federal Deposit Insurance 
     Corporation,''.
       (b) Revised Statutes.--
       (1) Section 5240.--The third paragraph of section 5240 of 
     the Revised Statutes (12 U.S.C. 482) is amended by inserting 
     ``or section 301(f)(1) of title 31, United States Code,'' 
     after ``provisions of this section''.
       (2) Section 324.--Section 324 of the Revised Statutes (12 
     U.S.C. 1) is amended by adding at the end the following: 
     ``The Comptroller of the Currency shall have the same 
     authority over matters within the jurisdiction of the 
     Comptroller as the Director of the Office of Thrift 
     Supervision has over matters within the Director's 
     jurisdiction under section 3(b)(3) of the Home Owners' Loan 
     Act.''.
       (3) Section 5239.--Section 5239 of the Revised Statutes (12 
     U.S.C. 93) is amended by inserting at the end the following 
     new subsection:
       ``(d) Authority.--The Comptroller of the Currency may act 
     in the Comptroller's own name and through the Comptroller's 
     own attorneys in enforcing any provision of this title, 
     regulations thereunder, or any other law or regulation, or in 
     any action, suit, or proceeding to which the Comptroller of 
     the Currency is a party.''.

     SEC. 335. COMMEMORATION OF 1995 SPECIAL OLYMPIC WORLD GAMES.

       (a) Coin Specifications.--
       (1) One dollar silver coins.--
       (A) Issuance.--The Secretary of the Treasury (hereafter in 
     this section referred to as the ``Secretary'') shall issue 
     not more than 800,000 $1 coins, which shall weigh 26.73 
     grams, have a diameter of 1.500 inches, and shall contain 90 
     percent silver and 10 percent copper.
       (B) Design.--The design of the coins issued under this 
     section shall be emblematic of the 1995 Special Olympics 
     World Games. On each such coin there shall be a designation 
     of the value of the coin, an inscription of the year 
     ``1995'', and inscriptions of the words ``Liberty'', ``In God 
     We Trust'', ``United States of America'', and ``E Pluribus 
     Unum''.
       (2) Legal tender.--The coins issued under this section 
     shall be legal tender as provided in section 5103 of title 
     31, United States Code.
       (3) Numismatic items.--For purposes of section 5132(a)(1) 
     of title 31, United States Code, all coins minted under this 
     section shall be considered to be numismatic items.
       (b) Sources of Bullion.--The Secretary shall obtain silver 
     for the coins minted under this section only from stockpiles 
     established under the Strategic and Critical Materials Stock 
     Piling Act.
       (c) Selection of Design.--The design for the coins 
     authorized by this section shall be selected by the Secretary 
     after consultation with the 1995 Special Olympics World Games 
     Organizing Committee, Inc. and the Commission of Fine Arts. 
     As required by section 5135 of title 31, United States Code, 
     the design shall also be reviewed by the Citizens 
     Commemorative Coin Advisory Committee.
       (d) Issuance of the Coins.--
       (1) Quality of coins.--The coins authorized under this 
     section may be issued in uncirculated and proof qualities.
       (2) Mint facility.--Not more than 1 facility of the United 
     States Mint may be used to strike any particular quality of 
     the coins minted under this section.
       (3) Period for issuance.--The Secretary shall issue coins 
     minted under this Act during the period beginning on January 
     15, 1995, and ending on December 31, 1995.
       (e) Sale of the Coins.--
       (1) Sale price.--The coins issued under this section shall 
     be sold by the Secretary at a price equal to the sum of the 
     face value of the coins, the surcharge provided in paragraph 
     (4) with respect to such coins, and the cost of designing and 
     issuing such coins (including labor, materials, dies, use of 
     machinery, overhead expenses, marketing, and shipping).
       (2) Bulk sales.--The Secretary shall make bulk sales at a 
     reasonable discount.
       (3) Prepaid orders.--The Secretary shall accept prepaid 
     orders for the coins authorized under this section prior to 
     the issuance of such coins. Sales under this subsection shall 
     be at a reasonable discount.
       (4) Surcharge required.--All sales shall include a 
     surcharge of $10 per coin.
       (f) General Waiver of Procurement Regulations.--No 
     provision of law governing procurement or public contracts 
     shall be applicable to the procurement of goods or services 
     necessary for carrying out the provisions of this section. 
     Nothing in this subsection shall relieve any person entering 
     into a contract under the authority of this section from 
     complying with any law relating to equal employment 
     opportunity.
       (g) Distribution of Surcharges.--The total surcharges 
     collected by the Secretary from the sale of the coins issued 
     under this section shall be promptly paid by the Secretary to 
     the 1995 Special Olympics World Games Organizing Committee, 
     Inc. Such amounts shall be used to--
       (1) provide a world class sporting event for athletes with 
     mental retardation;
       (2) demonstrate to a global audience the extraordinary 
     talents, dedication, and courage of persons with mental 
     retardation; and
       (3) underwrite the cost of staging and promoting the 1995 
     Special Olympics World Games.
       (h) Audits.--The Comptroller General of the United States 
     shall have the right to examine such books, records, 
     documents, and other data of the 1995 Special Olympics World 
     Games Organizing Committee, Inc. as may be related to the 
     expenditure of amounts paid under subsection (g).
       (i) Financial Assurances.--
       (1) No net cost to the government.--The Secretary shall 
     take all actions necessary to ensure that the issuance of the 
     coins authorized by this section shall result in no net cost 
     to the United States Government.
       (2) Adequate security for payment required.--No coin shall 
     be issued under this section unless the Secretary has 
     received--
       (A) full payment therefore;
       (B) security satisfactory to the Secretary to indemnify the 
     United States for full payment; or
       (C) a guarantee of full payment satisfactory to the 
     Secretary from a depository institution whose deposits are 
     insured by the Federal Deposit Insurance Corporation or the 
     National Credit Union Administration Board.

     SEC. 336. EXEMPTION FOR BUSINESS ACCOUNTS.

       Section 274(1) of the Truth in Savings Act (12 U.S.C. 
     4313(1)) is amended to read as follows:
       ``(1) Account.--The term `account' means any account 
     intended for use by and generally used by consumers primarily 
     for personal, family, or household purposes that is offered 
     by a depository institution into which a consumer deposits 
     funds, including demand accounts, time accounts, negotiable 
     order of withdrawal accounts, and share draft accounts.''.

     SEC. 337. BOARD DISCRETION REGARDING CHECK-RELATED FRAUD.

       Section 604(e) of the Expedited Funds Availability Act (12 
     U.S.C. 4003(e)) is amended by adding at the end the following 
     new paragraph:
       ``(4) Prevention of check-related losses.--
       ``(A) In general.--The Board may, by regulation or order, 
     extend the 1-business-day period specified in section 
     603(b)(1), regarding availability of funds deposited by local 
     checks, to 2 business days if the Board determines that--
       ``(i) there is a pattern of significant increases in check-
     related losses at depository institutions attributable to the 
     provisions of this title; and
       ``(ii) such action is necessary to diminish the volume of 
     such check-related losses.
       ``(B) Limitation on other authority.--The authority of the 
     Board under paragraph (1) shall not apply to the 
     applicability of section 603(b)(1) or the time period 
     specified therein.''.

     SEC. 338. CIVIL LIABILITY UNDER TRUTH IN SAVINGS.

       Section 271(a)(2)(A) of the Truth in Savings Act (12 U.S.C. 
     4310(a)(2)(A)) is amended by inserting ``(other than an 
     action based on a violation of section 263)'' after 
     ``individual action''.

     SEC. 339. INSIDER LENDING.

       (a) Loans To Executive Officers By Member Banks.--Section 
     22(g)(2) of the Federal Reserve Act (12 U.S.C. 375a(g)(2)) is 
     amended by striking ``With the specific prior approval of its 
     board of directors, a member'' and inserting ``A member''.
       (b) Extensions of Credit To Executive Officers, Directors, 
     and Principal Shareholders of Member Banks.--Section 22(h)(8) 
     of the Federal Reserve Act (12 U.S.C. 375b(h)(8)) is 
     amended--
       (1) by striking ``Member Bank.--For'' and inserting the 
     following: ``Member Bank.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     for''; and
       (2) by adding at the end the following:
       ``(B) Exception.--The Board shall have the authority by 
     regulation to suspend the applicability of any or all of this 
     subsection, except for the provisions of paragraph (2), with 
     respect to any individual who is a director or an executive 
     officer of a subsidiary of the company that controls the 
     member bank, if the Board finds that such individual does not 
     actually participate in major policymaking functions of the 
     member bank.''.

     SEC. 340. REVISIONS OF STANDARDS.

       Section 305(b)(1) of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 (12 U.S.C. 1828 note) is 
     amended--
       (1) in subparagraph (A), by striking ``and'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(C) take into account the size and activities of the 
     institutions and do not cause undue reporting burdens.''.

     SEC. 341. ALTERNATIVE RULES FOR RADIO ADVERTISING OF CONSUMER 
                   LEASES.

       Section 184 of the Truth in Lending Act (15 U.S.C. 1667c) 
     is amended--
       (1) by redesignating subsection (b) as subsection (c); and
       (2) by inserting after subsection (a) the following new 
     subsection:
       ``(b)  Radio Advertisements.--
       ``(1) In general.--An advertisement by radio broadcast to 
     aid, promote, or assist, directly or indirectly, any consumer 
     lease shall be deemed to be in compliance with the 
     requirements of subsection (a) if such advertisement clearly 
     and conspicuously--
       ``(A) states the information required by paragraphs (1) and 
     (2) of subsection (a);
       ``(B) states the number, amounts, due dates, or periods of 
     scheduled payments, and the total of such payments under the 
     lease; and
       ``(C) includes--
       ``(i) a referral to--

       ``(I) a toll-free telephone number established in 
     accordance with paragraph (2) that may be used by consumers 
     to obtain the information required under subsection (a); or
       ``(II) a written advertisement that--

       ``(aa) appears in a publication in general circulation in 
     the community served by the radio station on which such 
     advertisement is broadcast during the period beginning 3 days 
     before any such broadcast and ending 10 days after such 
     broadcast; and
       ``(bb) includes the information required to be disclosed 
     under subsection (a); and
       ``(ii) the name and dates of any publication referred to in 
     clause (i)(II); and
       ``(D) includes any other information which the Board 
     determines necessary to carry out this chapter.
       ``(2) Establishment of toll-free number.--
       ``(A) In general.--In the case of a radio broadcast 
     advertisement described in paragraph (1) that includes a 
     referral to a toll-free telephone number, the lessor who 
     offers the consumer lease shall--
       ``(i) establish such a toll-free telephone number not later 
     than the date on which the advertisement including the 
     referral is broadcast;
       ``(ii) maintain such telephone number for not less than 10 
     days, beginning on the date of any such broadcast; and
       ``(iii) provide the information required under subsection 
     (a) with respect to the lease to any person who calls such 
     number.
       ``(B) Form of information.--The information required to be 
     provided under subparagraph (A)(iii) shall be provided orally 
     or, if requested by the consumer, in written form.
       ``(3) No effect on other law.--Nothing in this subsection 
     shall affect the requirements of Federal law as such 
     requirements apply to advertisement by any other medium.''.

     SEC. 342. DEPOSIT BROKER REGISTRATION.

       Section 29(g)(3) of the Federal Deposit Insurance Act (12 
     U.S.C. 1831f(g)(3)) is amended--
       (1) by inserting ``that is not well capitalized'' after 
     ``includes any insured depository institution'';
       (2) by striking ``of any insured depository'' and inserting 
     ``of such'';
       (3) by striking ``(with respect to such deposits)''; and
       (4) by striking ``having the same type of charter''.

     SEC. 343. EXTENSION OF MANAGEMENT INTERLOCKS GRANDFATHER 
                   CLAUSE.

       Subsections (a) and (b) of section 206 of the Depository 
     Institution Management Interlocks Act (12 U.S.C. 3205) are 
     each amended by striking ``15 years'' and inserting ``20 
     years''.

     SEC. 344. CLARIFICATION OF PROVISION RELATING TO 
                   ADMINISTRATIVE AUTONOMY.

       Section 3(b)(3) of the Home Owners' Loan Act (12 U.S.C. 
     1462a) is amended by striking everything after ``Director'' 
     and inserting in lieu thereof ``(including agency rulemaking 
     proceedings and enforcement actions) unless otherwise 
     specifically provided by law.''.

     SEC. 345. CONSUMER SURVEYS AND REPORT.

       (a) Surveys.--Not later than 6 months after the date of 
     enactment of this Act, the Federal banking agencies (as 
     defined in section 3 of the Federal Deposit Insurance Act) 
     and the Secretary of Housing and Urban Development shall 
     jointly conduct an objective and statistically valid survey 
     of financial services consumers to determine the general 
     public awareness of, perceived benefits to consumers of, and 
     effectiveness of the Federal banking laws under which the 
     Federal banking agencies and the Department of Housing and 
     Urban Development operate that are intended for the 
     protection of such consumers, including--
       (1) the Expedited Funds Availability Act;
       (2) the Truth in Lending Act;
       (3) the Truth in Savings Act;
       (4) the Real Estate Settlement Procedures Act of 1974;
       (5) the Home Mortgage Disclosure Act of 1975;
       (6) the Equal Credit Opportunity Act;
       (7) the Community Reinvestment Act of 1977;
       (8) the Home Equity Loan Consumer Protection Act;
       (9) the Fair Credit and Charge Card Disclosure Act; and
       (10) the rules and regulations promulgated under those 
     banking laws.
       (b) Consultation.--In developing such a survey, the Federal 
     banking agencies and the Secretary of Housing and Urban 
     Development shall consult with consumer groups, insured 
     depository institutions, other lenders, and any other 
     interested parties.
       (c) Information for Surveyed Consumers.--The survey shall 
     provide for distribution to participating consumers a summary 
     explanation of the Federal banking law being surveyed and how 
     each is currently being implemented.
       (d) Report.--Not later than 60 days after completion of its 
     survey under subsection (a), the Federal banking agencies and 
     the Secretary of Housing and Urban Development shall jointly 
     submit a report of the results of their survey to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Banking, Finance and Urban 
     Affairs of the House of Representatives.

     SEC. 346. SIMPLIFIED DISCLOSURE FOR EXISTING DEPOSITORS.

       (a) In General.--Section 43(b)(3) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1831t(b)(3)) is amended to read as 
     follows:
       ``(3) Acknowledgement of disclosure.--
       ``(A) New depositors.--With respect to any depositor who 
     was not a depositor at the depository institution before June 
     19, 1994, receive any deposit for the account of such 
     depositor only if the depositor has signed a written 
     acknowledgement that--
       ``(i) the institution is not federally insured; and
       ``(ii) if the institution fails, the Federal Government 
     does not guarantee that the depositor will get back the 
     depositor's money.
       ``(B) Current depositors.--Receive any deposit after the 
     effective date of this paragraph for the account of any 
     depositor who was a depositor before June 19, 1994, only if--
       ``(i) the depositor has signed a written acknowledgement 
     described in subparagraph (A); or
       ``(ii) the institution has complied with the provisions of 
     subparagraph (C) which are applicable as of the date of the 
     deposit.
       ``(C) Alternative provision of notice to current 
     depositors.--
       ``(i) In general.--Transmit to each depositor who was a 
     depositor before June 19, 1994, and has not signed a written 
     acknowledgement described in subparagraph (A)--

       ``(I) a card containing the information described in 
     clauses (i) and (ii) of subparagraph (A), and a line for the 
     signature of the depositor; and
       ``(II) accompanying materials requesting the depositor to 
     sign the card, and return the signed card to the institution.

       ``(ii) Manner and timing of notice.--

       ``(I) First notice.--Make the transmission described in 
     clause (i) via first class mail within 90 days after June 19, 
     1994.
       ``(II) Second notice.--Make a 2d transmission described in 
     clause (i) via first class mail not less than 30 days and not 
     more than 45 days after a transmission to the depositor in 
     accordance with subclause (I), if the institution has not, by 
     the date of such mailing, received from the depositor a card 
     referred to in clause (i)(I) which has been signed by the 
     depositor.
       ``(III) Third notice.--Make a 3d transmission described in 
     clause (i) via first class mail not less than 30 days and not 
     more than 45 days after a transmission to the depositor in 
     accordance with subclause (II), if the institution has not, 
     by the date of such mailing, received from the depositor a 
     card referred to in clause (i)(I) which has been signed by 
     the depositor.''.

       (b) Effective Date.--Section 43(b)(3) of the Federal 
     Deposit Insurance Act, as amended by subsection (a), shall 
     take effect in accordance with section 151(a)(2)(D) of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991.

     SEC. 347. COMMERCIAL MORTGAGE RELATED SECURITIES.

       (a) In General.--Section 3(a)(41)(A)(i) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78c(a)(41)(A)(i)) is amended 
     --
       (1) by striking ``or on a residential'' and inserting ``on 
     a residential''; and
       (2) by inserting before the semicolon ``, or on one or more 
     parcels of real estate upon which is located one or more 
     commercial structures''.
       (b) Amendment to the Revised Statutes.--Paragraph Seventh 
     of section 5136 of the Revised Statutes (12 U.S.C. 24) is 
     amended in the twelfth sentence, by striking ``(15 U.S.C. 
     78c(a)(41))), subject to such regulations'' and inserting 
     ``(15 U.S.C. 78c(a)(41)). The exception provided for the 
     securities described in subparagraphs (A), (B), and (C) shall 
     be subject to such regulations''.
       (c) Regulations.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller of the Currency shall 
     promulgate final regulations, in accordance with the 
     thirteenth sentence of Paragraph Seventh of section 5136 of 
     the Revised Statutes (as amended by subsection (b)), to carry 
     out the amendments made by this section.
       (d) Effective Date.--The amendments made by this section 
     shall become effective upon the date of promulgation of final 
     regulations under subsection (c).
       (e) State Opt Out.--Notwithstanding the amendments made by 
     this section, a note that is directly secured by a first lien 
     on one or more parcels of real estate upon which is located 
     one or more commercial structures shall not be considered to 
     be a mortgage related security under section 3(a)(41) of the 
     Securities Exchange Act of 1934 in any State that, prior to 
     the expiration of 7 years after the date of enactment of this 
     Act, enacts a statute that specifically refers to this 
     section and either prohibits or provides for a more limited 
     authority to purchase, hold, or invest in such securities by 
     any person, trust, corporation, partnership, association, 
     business trust, or business entity or class thereof than is 
     provided by the amendments made by this subsection. The 
     enactment by any State of any statute of the type described 
     in the preceding sentence shall not affect the validity of 
     any contractual commitment to purchase, hold, or invest that 
     was made prior thereto, and shall not require the sale or 
     other disposition of any securities acquired prior thereto.

     SEC. 348. OFFSET OF COSTS OF CERTAIN PROGRAMS.

       (a) HUD Multifamily Housing Disposition Process.--
       (1) Findings.--The Congress finds that--
       (A) the portfolio of multifamily housing project mortgages 
     insured by the FHA is severely troubled and at risk of 
     default, requiring the Secretary to increase loss reserves 
     from $5,500,000,000 in 1991 to $11,900,000,000 in 1992 to 
     cover estimated future losses;
       (B) the inventory of multifamily housing projects owned by 
     the Secretary has more than tripled since 1989, and, by the 
     end of 1993, may exceed 75,000 units;
       (C) the cost to the Federal Government of owning and 
     maintaining multifamily housing projects escalated to 
     approximately $250,000,000 in fiscal year 1992;
       (D) the inventory of multifamily housing projects subject 
     to mortgages held by the Secretary has increased 
     dramatically, to more than 2,400 mortgages, and approximately 
     half of these mortgages, with over 230,000 units, are 
     delinquent;
       (E) the inventory of insured and formerly insured 
     multifamily housing projects is rapidly deteriorating, 
     endangering tenants and neighborhoods;
       (F) over 5 million families today have a critical need for 
     housing that is affordable and habitable; and
       (G) the current statutory framework governing the 
     disposition of multifamily housing projects effectively 
     impedes the Government's ability to dispose of properties, 
     protect tenants, and ensure that projects are maintained over 
     time.
       (2) Management and disposition of multifamily housing 
     projects.--Section 203 of the Housing and Community 
     Development Amendments of 1978 (12 U.S.C. 1701z-11) is 
     amended to read as follows:

     ``SEC. 203. MANAGEMENT AND DISPOSITION OF MULTIFAMILY HOUSING 
                   PROJECTS.

       ``(a) Goals.--The Secretary of Housing and Urban 
     Development (in this section referred to as the `Secretary') 
     shall manage or dispose of multifamily housing projects that 
     are owned by the Secretary or that are subject to a mortgage 
     held by the Secretary in a manner that--
       ``(1) is consistent with the National Housing Act and this 
     section;
       ``(2) will protect the financial interests of the Federal 
     Government; and
       ``(3) will, in the least costly fashion among reasonable 
     available alternatives, further the goals of--
       ``(A) preserving housing so that it can remain available to 
     and affordable by low-income persons;
       ``(B) preserving and revitalizing residential 
     neighborhoods;
       ``(C) maintaining existing housing stock in a decent, safe, 
     and sanitary condition;
       ``(D) minimizing the involuntary displacement of tenants;
       ``(E) maintaining housing for the purpose of providing 
     rental housing, cooperative housing, and homeownership 
     opportunities for low-income persons; and
       ``(F) minimizing the need to demolish multifamily housing 
     projects.

     The Secretary, in determining the manner in which a project 
     is to be managed or disposed of, may balance competing goals 
     relating to individual projects in a manner that will further 
     the purposes of this section.
       ``(b) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Multifamily housing project.--The term `multifamily 
     housing project' means any multifamily rental housing project 
     which is, or prior to acquisition by the Secretary was, 
     assisted or insured under the National Housing Act, or was 
     subject to a loan under section 202 of the Housing Act of 
     1959.
       ``(2) Subsidized project.--The term `subsidized project' 
     means a multifamily housing project receiving any of the 
     following types of assistance immediately prior to the 
     assignment of the mortgage on such project to, or the 
     acquisition of such mortgage by, the Secretary:
       ``(A) Below market interest rate mortgage insurance under 
     the proviso of section 221(d)(5) of the National Housing Act.
       ``(B) Interest reduction payments made in connection with 
     mortgages insured under section 236 of the National Housing 
     Act.
       ``(C) Direct loans made under section 202 of the Housing 
     Act of 1959.
       ``(D) Assistance in the form of--
       ``(i) rent supplement payments under section 101 of the 
     Housing and Urban Development Act of 1965;
       ``(ii) housing assistance payments made under section 23 of 
     the United States Housing Act of 1937 (as in effect before 
     January 1, 1975); or
       ``(iii) housing assistance payments made under section 8 of 
     the United States Housing Act of 1937 (excluding payments 
     made for tenant-based assistance under section 8),

     if (except for purposes of section 183(c) of the Housing and 
     Community Development Act of 1987) such assistance payments 
     are made to more than 50 percent of the units in the project.
       ``(3) Formerly subsidized project.--The term `formerly 
     subsidized project' means a multifamily housing project owned 
     by the Secretary that was a subsidized project immediately 
     prior to its acquisition by the Secretary.
       ``(4) Unsubsidized project.--The term `unsubsidized 
     project' means a multifamily housing project owned by the 
     Secretary that is not a subsidized project or a formerly 
     subsidized project.
       ``(c) Management or Disposition of Property.--
       ``(1) Disposition to purchasers.--The Secretary is 
     authorized, in carrying out this section, to dispose of a 
     multifamily housing project owned by the Secretary on a 
     negotiated, competitive bid, or other basis, on such terms as 
     the Secretary deems appropriate considering the low-income 
     character of the project and the requirements of subsection 
     (a), to a purchaser determined by the Secretary to be capable 
     of--
       ``(A) satisfying the conditions of the disposition;
       ``(B) implementing a sound financial and physical 
     management program that is designed to enable the project to 
     meet anticipated operating and repair expenses to ensure that 
     the project will remain in decent, safe, and sanitary 
     condition;
       ``(C) responding to the needs of the tenants and working 
     cooperatively with tenant organizations;
       ``(D) providing adequate organizational staff and financial 
     resources to the project; and
       ``(E) meeting such other requirements as the Secretary may 
     determine.
       ``(2) Contracting for management services.--The Secretary 
     is authorized, in carrying out this section--
       ``(A) to contract for management services for a multifamily 
     housing project that is owned by the Secretary (or for which 
     the Secretary is mortgagee in possession), on a negotiated, 
     competitive bid, or other basis at a price determined by the 
     Secretary to be reasonable, with a manager the Secretary has 
     determined is capable of--
       ``(i) implementing a sound financial and physical 
     management program that is designed to enable the project to 
     meet anticipated operating and maintenance expenses to ensure 
     that the project will remain in decent, safe, and sanitary 
     condition;
       ``(ii) responding to the needs of the tenants and working 
     cooperatively with tenant organizations;
       ``(iii) providing adequate organizational, staff, and other 
     resources to implement a management program determined by the 
     Secretary; and
       ``(iv) meeting such other requirements as the Secretary may 
     determine; and
       ``(B) to require the owner of a multifamily housing project 
     that is subject to a mortgage held by the Secretary to 
     contract for management services for the project in the 
     manner described in subparagraph (A).
       ``(d) Maintenance of Housing Projects.--
       ``(1) Housing projects owned by the secretary.--In the case 
     of multifamily housing projects that are owned by the 
     Secretary (or for which the Secretary is mortgagee in 
     possession), the Secretary shall--
       ``(A) to the greatest extent possible, maintain all such 
     occupied projects in a decent, safe, and sanitary condition;
       ``(B) to the greatest extent possible, maintain full 
     occupancy in all such projects; and
       ``(C) maintain all such projects for purposes of providing 
     rental or cooperative housing.
       ``(2) Housing projects subject to a mortgage held by the 
     secretary.--In the case of any multifamily housing project 
     that is subject to a mortgage held by the Secretary, the 
     Secretary shall require the owner of the project to carry out 
     the requirements of paragraph (1).
       ``(e) Required Assistance.--In carrying out the goal 
     specified in subsection (a)(3)(A), the Secretary shall take 
     not less than one of the following actions:
       ``(1) Contract with owner.--Enter into contracts under 
     section 8 of the United States Housing Act of 1937, to the 
     extent budget authority is available, with owners of 
     multifamily housing projects that are acquired by a purchaser 
     other than the Secretary at foreclosure or after sale by the 
     Secretary.
       ``(A) Subsidized or formerly subsidized projects receiving 
     certain assistance.--In the case of a subsidized or formerly 
     subsidized project referred to in subparagraphs (A) through 
     (C) of subsection (b)(2)--
       ``(i) the contract shall be sufficient to assist at least 
     all units covered by an assistance contract under any of the 
     authorities referred to in subsection (b)(2)(D) before 
     acquisition, unless the Secretary acts pursuant to the 
     provisions of subparagraph (C);
       ``(ii) in the case of units requiring project-based rental 
     assistance pursuant to this paragraph that are occupied by 
     families who are not eligible for assistance under section 8, 
     a contract under this subparagraph shall also provide that 
     when a vacancy occurs, the owner shall lease the available 
     unit to a family eligible for assistance under section 8; and
       ``(iii) the Secretary shall take actions to ensure the 
     availability and affordability, as defined in paragraph 
     (3)(B), for the remaining useful life of the project, as 
     defined by the Secretary, of any unit located in any project 
     referred to in subparagraphs (A) through (C) of subsection 
     (b)(2) that does not otherwise receive project-based 
     assistance under this subparagraph. To carry out this clause, 
     the Secretary may require purchasers to establish use or rent 
     restrictions maintaining affordability, as defined in 
     paragraph (3)(B).
       ``(B) Subsidized or formerly subsidized projects receiving 
     other assistance.--In the case of a subsidized or formerly 
     subsidized project referred to in subsection (b)(2)(D)--
       ``(i) the contract shall be sufficient to assist at least 
     all units in the project that are covered, or were covered 
     immediately before foreclosure on or acquisition of the 
     project by the Secretary, by an assistance contract under any 
     of the authorities referred to in such subsection, unless the 
     Secretary acts pursuant to provisions of subparagraph (C); 
     and
       ``(ii) in the case of units requiring project-based rental 
     assistance pursuant to this paragraph that are occupied by 
     families who are not eligible for assistance under section 8, 
     a contract under this paragraph shall also provide that when 
     a vacancy occurs, the owner shall lease the available unit to 
     a family eligible for assistance under section 8.
       ``(C) Exceptions to subparagraphs (a) and (b).--In lieu of 
     providing project-based assistance under subparagraph (A) or 
     (B), the Secretary may require certain units in unsubsidized 
     projects to contain use restrictions providing that such 
     units will be available to and affordable by very low-income 
     families for the remaining useful life of the project, as 
     defined by the Secretary, if--
       ``(i) the Secretary matches any reduction in units 
     otherwise required to be assisted with project-based 
     assistance under subparagraph (A) or (B) with at least an 
     equivalent increase in units made affordable to very low-
     income persons within unsubsidized projects;
       ``(ii) low-income tenants residing in units otherwise 
     requiring project-based assistance under subparagraph (A) or 
     (B) upon disposition receive section 8 tenant-based 
     assistance; and
       ``(iii) the units described in clause (i) are located 
     within the same market area.
       ``(D) Contract requirements for unsubsidized projects.--
     Notwithstanding actions taken pursuant to subparagraph (C), 
     in unsubsidized projects, the contract shall at least be 
     sufficient to provide--
       ``(i) project-based rental assistance for all units that 
     are covered or were covered immediately before foreclosure or 
     acquisition by an assistance contract under--

       ``(I) section 8(b)(2) of the United States Housing Act of 
     1937 (as such section existed before October 1, 1983) (new 
     construction and substantial rehabilitation); section 8(b) of 
     such Act (property disposition); section 8(d)(2) of such Act 
     (project-based certificates); section 8(e)(2) of such Act 
     (moderate rehabilitation); section 23 of such Act (as in 
     effect before January 1, 1975); or section 101 of the Housing 
     and Urban Development Act of 1965 (rent supplements); or
       ``(II) section 8 of the United States Housing Act of 1937, 
     following conversion from section 101 of the Housing and 
     Urban Development Act of 1965; and

       ``(ii) tenant-based assistance under section 8 of the 
     United States Housing Act of 1937 for tenants currently 
     residing in units that were covered by an assistance contract 
     under the Loan Management Set-Aside program under section 
     8(b) of the United States Housing Act of 1937 immediately 
     before foreclosure or acquisition of the project by the 
     Secretary.
       ``(2) Annual contribution contracts.--In the case of 
     multifamily housing projects that are acquired by a purchaser 
     other than the Secretary at foreclosure or after sale by the 
     Secretary, enter into annual contribution contracts with 
     public housing agencies to provide tenant-based assistance 
     under section 8 of the United States Housing Act of 1937 to 
     all low-income families who are eligible for such assistance 
     on the date that the project is acquired by the purchaser. 
     The Secretary shall take action under this paragraph only 
     after making a determination that there is available in the 
     area an adequate supply of habitable affordable housing for 
     low-income families. Actions taken pursuant to this paragraph 
     may be taken in connection with not more than 10 percent of 
     the aggregate number of units in subsidized or formerly 
     subsidized projects disposed of by the Secretary annually.
       ``(3) Other assistance.--
       ``(A) In general.--In accordance with the authority 
     provided under the National Housing Act, reduce the selling 
     price, apply use or rent restrictions on certain units, or 
     provide other financial assistance to the owners of 
     multifamily housing projects that are acquired by a purchaser 
     other than the Secretary at foreclosure, or after sale by the 
     Secretary, on terms which will ensure that--
       ``(i) at least those units otherwise required to receive 
     project-based section 8 assistance pursuant to subparagraphs 
     (A), (B), or (D) of paragraph (1) are available to and 
     affordable by low-income persons; and
       ``(ii) for the remaining useful life of the project, as 
     defined by the Secretary, there shall be in force such use or 
     rent restrictions as the Secretary may prescribe.
       ``(B) Definition.--A unit shall be considered affordable 
     under this paragraph if--
       ``(i) for very low-income tenants, the rent for such unit 
     does not exceed 30 percent of 50 percent of the area median 
     income, as determined by the Secretary, with adjustments for 
     family size; and
       ``(ii) for low-income tenants other than very low-income 
     tenants, the rent for such unit does not exceed 30 percent of 
     80 percent of the area median income, as determined by the 
     Secretary, with adjustments for family size.
       ``(C) Very low-income tenants.--The Secretary shall provide 
     assistance under section 8 of the United States Housing Act 
     of 1937 to any very low-income tenant currently residing in a 
     unit otherwise required to receive project-based assistance 
     under section 8, pursuant to subparagraph (A), (B), or (D) of 
     paragraph (1), if the rents charged such tenants as a result 
     of actions taken pursuant to this paragraph exceed the amount 
     payable as rent under section 3(a) of the United States 
     Housing Act of 1937.
       ``(4) Transfer for use under other programs of the 
     secretary.--
       ``(A) In general.--Enter into an agreement providing for 
     the transfer of a multifamily housing project--
       ``(i) to a public housing agency for use of the project as 
     public housing; or
       ``(ii) to an owner or another appropriate entity for use of 
     the project under section 202 of the Housing Act of 1959 or 
     under section 811 of the Cranston-Gonzalez National 
     Affordable Housing Act.
       ``(B) Requirements for agreement.--The agreement described 
     in subparagraph (A) shall--
       ``(i) contain such terms, conditions, and limitations as 
     the Secretary determines appropriate, including requirements 
     to assure use of the project under the public housing, 
     section 202, and section 811 programs; and
       ``(ii) ensure that no current tenant will be displaced as a 
     result of actions taken under this paragraph.
       ``(f) Other Assistance.--In addition to the actions 
     authorized by subsection (e), the Secretary may take any of 
     the following actions:
       ``(1) Short-term loans.--Provide short-term loans to 
     facilitate the sale of multifamily housing projects to 
     nonprofit organizations or to public agencies if--
       ``(A) authority for such loans is provided in advance in an 
     appropriations Act;
       ``(B) such loans are for a term of not more than 5 years;
       ``(C) the Secretary is presented with satisfactory 
     documentation, evidencing a commitment of permanent financing 
     to replace such short-term loan, from a lender who meets 
     standards set forth by the Secretary; and
       ``(D) the terms of such loans are consistent with 
     prevailing practices in the marketplace or the provision of 
     such loans results in no cost to the Government, as defined 
     in section 502 of the Congressional Budget Act.
       ``(2) Tenant-based assistance.--In connection with projects 
     referred to in subsection (e), make available tenant-based 
     assistance under section 8 of the United States Housing Act 
     of 1937 to very low-income families (as defined in section 
     3(b)(2) of the United States Housing Act of 1937) that do not 
     otherwise qualify for project-based assistance.
       ``(3) Alternative uses.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, and subject to notice to and comment from existing 
     tenants, allow not more than--
       ``(i) 5 percent of the total number of units in multifamily 
     housing projects that are disposed of by the Secretary during 
     any 1-year period to be made available for uses other than 
     rental or cooperative uses, including low-income 
     homeownership opportunities, or in any particular project, 
     community space, office space for tenant or housing-related 
     service providers or security programs, or small business 
     uses, if such uses benefit the tenants of the project; and
       ``(ii) 5 percent of the total number of units in 
     multifamily housing projects that are disposed of by the 
     Secretary during any 1-year period to be used in any manner, 
     if the Secretary and the unit of general local government or 
     area-wide governing body determine that such use will further 
     fair housing, community development, or neighborhood 
     revitalization goals.
       ``(B) Displacement protection.--The Secretary shall make 
     available tenant-based rental assistance under section 8 of 
     the United States Housing Act of 1937 to any tenant displaced 
     as a result of actions taken by the Secretary pursuant to 
     subparagraph (A), and the Secretary shall take such actions 
     as the Secretary determines necessary to ensure the 
     successful use of any tenant-based assistance.
       ``(g) Authorization of Use or Rent Restrictions in 
     Unsubsidized Projects.--In carrying out the goals specified 
     in subsection (a), the Secretary may require certain units in 
     unsubsidized projects to contain use or rent restrictions 
     providing that such units will be available to and affordable 
     by very low-income persons for the remaining useful life of 
     the property, as defined by the Secretary.
       ``(h) Contract Requirements.--
       ``(1) Contract term.--
       ``(A) In general.--Contracts for project-based rental 
     assistance under section 8 of the United States Housing Act 
     of 1937 provided pursuant to this section shall be for a term 
     of not more than 15 years; and
       ``(B) Contract term of less than 15 years.--Notwithstanding 
     subparagraph (A), to the extent that units receive project-
     based assistance for a contract term of less than 15 years, 
     the Secretary shall require that rents charged to tenants for 
     such units not exceed the amount payable for rent under 
     section 3(a) of the United States Housing Act of 1937 for a 
     period of at least 15 years.
       ``(2) Contract rent.--
       ``(A) In general.--The Secretary shall set contract rents 
     for section 8 project-based rental contracts issued under 
     this section at levels that, in conjunction with other 
     resources available to the purchaser, provide for the 
     necessary costs of rehabilitation of such project and do not 
     exceed the percentage of the existing housing fair market 
     rents for the area (as determined by the Secretary under 
     section 8(c) of the United States Housing Act of 1937) as the 
     Secretary may prescribe.
       ``(B) Up-front grants and loans.--If such an approach is 
     determined to be more cost-effective, the Secretary may 
     utilize the budget authority provided for project-based 
     section 8 contracts issued under this section to--
       ``(i) provide project-based section 8 rental assistance; 
     and
       ``(ii)(I) provide up-front grants for the necessary cost of 
     rehabilitation; or
       ``(II) pay for any cost to the Government, as defined in 
     section 502 of the Congressional Budget Act, for loans made 
     pursuant to subsection (f)(1).
       ``(i) Disposition Plan.--
       ``(1) In general.--Prior to the sale of a multifamily 
     housing project that is owned by the Secretary, the Secretary 
     shall develop a disposition plan for the project that 
     specifies the minimum terms and conditions of the Secretary 
     for disposition of the project, the initial sales price that 
     is acceptable to the Secretary, and the assistance that the 
     Secretary plans to make available to a prospective purchaser 
     in accordance with this section. The initial sales price 
     shall reflect the intended use of the property after sale.
       ``(2) Community and tenant input into disposition plans and 
     sales.--
       ``(A) In general.--In carrying out this section, the 
     Secretary shall develop procedures to obtain appropriate and 
     timely input into disposition plans from officials of the 
     unit of general local government affected, the community in 
     which the project is situated, and the tenants of the 
     project.
       ``(B) Tenant organizations.--The Secretary shall develop 
     procedures to facilitate, where feasible and appropriate, the 
     sale of multifamily housing projects to existing tenant 
     organizations with demonstrated capacity or to public or 
     nonprofit entities which represent or are affiliated with 
     existing tenant organizations.
       ``(C) Technical assistance.--
       ``(i) Use of funds.--To carry out the procedures developed 
     under subparagraphs (A) and (B), the Secretary is authorized 
     to provide technical assistance, directly or indirectly, and 
     to use amounts appropriated for technical assistance under 
     the Emergency Low Income Housing Preservation Act of 1987, 
     the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990, subtitle B of title IV of the 
     Cranston-Gonzalez National Affordable Housing Act, or under 
     this section for the provision of technical assistance under 
     this section.
       ``(ii) Source of funds.--Recipients of technical assistance 
     funding under the Emergency Low Income Housing Preservation 
     Act of 1987, the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990, subtitle B of title IV of the 
     Cranston-Gonzalez National Affordable Housing Act, or under 
     this section shall be permitted to provide technical 
     assistance to the extent of such funding under any of such 
     programs or under this section, notwithstanding the source of 
     funding.
       ``(j) Right of First Refusal.--
       ``(1) Procedure.--
       ``(A) Notification by secretary of the acquisition of 
     title.--Not later than 30 days after acquiring title to a 
     project, the Secretary shall notify the unit of general local 
     government and the State agency or agencies designated by the 
     Governor of the acquisition of such title.
       ``(B) Expression of interest.--Not later than 45 days after 
     receiving notification from the Secretary under subparagraph 
     (A), the unit of general local government or designated State 
     agency may submit to the Secretary a preliminary expression 
     of interest in the project. The Secretary may take such 
     actions as may be necessary to require the unit of general 
     local government or designated State agency to substantiate 
     such interest.
       ``(C) Timely expression of interest.--If the unit of 
     general local government or designated State agency has 
     expressed interest in the project before the expiration of 
     the 45-day period referred to in subparagraph (B), and has 
     substantiated such interest if requested, the Secretary, upon 
     approval of a disposition plan for a project, shall notify 
     the unit of general local government and designated State 
     agency of the terms and conditions of the disposition plan 
     and give the unit of general local government or designated 
     State agency not more than 90 days after the date of such 
     notification to make an offer to purchase the project.
       ``(D) No timely expression of interest.--If the unit of 
     general local government or designated State agency does not 
     express interest before the expiration of the 45-day period 
     referred to in subparagraph (B), or does not substantiate an 
     expressed interest if requested, the Secretary, upon approval 
     of a disposition plan, may offer the project for sale to any 
     interested person or entity.
       ``(2) Acceptance of offers.--Where the Secretary has given 
     the unit of general local government or designated State 
     agency 90 days to make an offer to purchase the project, the 
     Secretary shall accept an offer that complies with the terms 
     and conditions of the disposition plan. The Secretary may 
     accept an offer that does not comply with the terms and 
     conditions of the disposition plan if the Secretary 
     determines that the offer will further the goals specified in 
     subsection (a) by actions that include extension of the 
     duration of low-income affordability restrictions or 
     otherwise restructuring the transaction in a manner that 
     enhances the long-term affordability for low-income persons. 
     The Secretary shall, in particular, have discretion to reduce 
     the initial sales price in exchange for the extension of low-
     income affordability restrictions beyond the period of 
     assistance contemplated by the attachment of assistance 
     pursuant to subsection (e). If the Secretary and the unit of 
     general local government or designated State agency cannot 
     reach agreement within 90 days, the Secretary may offer the 
     project for sale to the general public.
       ``(3) Purchase by unit of general local government or 
     designated state agency.--Notwithstanding any other provision 
     of law, a unit of general local government (including a 
     public housing agency) or designated State agency may 
     purchase a subsidized or formerly subsidized project in 
     accordance with this subsection.
       ``(4) Applicability.--This subsection shall apply to 
     projects that are acquired on or after the effective date of 
     this subsection. With respect to projects acquired before 
     such effective date, the Secretary may apply--
       ``(A) the requirements of paragraphs (2) and (3) of section 
     203(e) as such paragraphs existed immediately before the 
     effective date of this subsection; or
       ``(B) the requirements of paragraphs (1) and (2) of this 
     subsection, if the Secretary gives the unit of general local 
     government or designated State agency--
       ``(i) 45 days to express interest in the project; and
       ``(ii) if the unit of general local government or 
     designated State agency expresses interest in the project 
     before the expiration of the 45-day period, and substantiates 
     such interest if requested, 90 days from the date of 
     notification of the terms and conditions of the disposition 
     plan to make an offer to purchase the project.
       ``(k) Displacement of Tenants and Relocation Assistance.--
       ``(1) In general.--Whenever tenants will be displaced as a 
     result of the disposition of, or repairs to, a multifamily 
     housing project that is owned by the Secretary (or for which 
     the Secretary is mortgagee in possession), the Secretary 
     shall identify tenants who will be displaced, and shall 
     notify all such tenants of their pending displacement and of 
     any relocation assistance which may be available. In the case 
     of a multifamily housing project that is not owned by the 
     Secretary (and for which the Secretary is not mortgagee in 
     possession), the Secretary shall require the owner of the 
     project to carry out the requirements of this paragraph.
       ``(2) Rights of displaced tenants.--The Secretary shall 
     assure for any such tenant (who continues to meet applicable 
     qualification standards) the right--
       ``(A) to return, whenever possible, to a repaired unit;
       ``(B) to occupy a unit in another multifamily housing 
     project owned by the Secretary;
       ``(C) to obtain housing assistance under the United States 
     Housing Act of 1937; or
       ``(D) to receive any other available relocation assistance 
     as the Secretary determines to be appropriate.
       ``(l) Mortgage and Project Sales.--
       ``(1) In general.--The Secretary may not approve the sale 
     of any loan or mortgage held by the Secretary (including any 
     loan or mortgage owned by the Government National Mortgage 
     Association) on any subsidized project or formerly subsidized 
     project, unless such sale is made as part of a transaction 
     that will ensure that such project will continue to operate 
     at least until the maturity date of such loan or mortgage, in 
     a manner that will provide rental housing on terms at least 
     as advantageous to existing and future tenants as the terms 
     required by the program under which the loan or mortgage was 
     made or insured prior to the assignment of the loan or 
     mortgage on such project to the Secretary.
       ``(2) Sale of certain projects.--The Secretary may not 
     approve the sale of any subsidized project--
       ``(A) that is subject to a mortgage held by the Secretary; 
     or
       ``(B) if the sale transaction involves the provision of any 
     additional subsidy funds by the Secretary or a recasting of 
     the mortgage, unless such sale is made as part of a 
     transaction that will ensure that such project will continue 
     to operate at least until the maturity date of the loan or 
     mortgage, in a manner that will provide rental housing on 
     terms at least as advantageous to existing and future tenants 
     as the terms required by the program under which the loan or 
     mortgage was made or insured prior to the proposed sale of 
     the project.
       ``(3) Mortgage sales to state and local governments.--
     Notwithstanding any provision of law that may require 
     competitive sales or bidding, the Secretary may carry out 
     negotiated sales of subsidized or formerly subsidized 
     mortgages held by the Secretary, without the competitive 
     selection of purchasers or intermediaries, to units of 
     general local government or State agencies, or groups of 
     investors that include at least one such unit of general 
     local government or State agency, if the negotiations are 
     conducted with such agencies, except that--
       ``(A) the terms of any such sale shall include the 
     agreement of the purchasing agency or unit of local 
     government or State agency to act as mortgagee or owner of a 
     beneficial interest in such mortgages, in a manner consistent 
     with maintaining the projects that are subject to such 
     mortgages for occupancy by the general tenant group intended 
     to be served by the applicable mortgage insurance program, 
     including, to the extent the Secretary determines 
     appropriate, authorizing such unit of local government or 
     State agency to enforce the provisions of any regulatory 
     agreement or other program requirements applicable to the 
     related projects; and
       ``(B) the sales prices for such mortgages shall be, in the 
     determination of the Secretary, the best prices that may be 
     obtained for such mortgages from a unit of general local 
     government or State agency, consistent with the expectation 
     and intention that the projects financed will be retained for 
     use under the applicable mortgage insurance program for the 
     life of the initial mortgage insurance contract.
       ``(4) Sale of mortgages covering unsubsidized projects.--
     Notwithstanding any other provision of law, the Secretary may 
     sell mortgages held on unsubsidized projects on such terms 
     and conditions as the Secretary may prescribe.
       ``(m) Report to Congress.--Not later than June 1 of each 
     year, the Secretary shall submit to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Banking, Finance and Urban Affairs of the House of 
     Representatives, a report describing the status of 
     multifamily housing projects owned by or subject to mortgages 
     held by the Secretary, which report shall include--
       ``(1) the name, address, and size of each project;
       ``(2) the nature and date of assignment;
       ``(3) the status of the mortgage;
       ``(4) the physical condition of the project;
       ``(5) an occupancy profile of the project, including the 
     income, family size, and race of current residents as well as 
     the rents paid by such residents;
       ``(6) the proportion of units in a project that are vacant;
       ``(7) the date on which the Secretary became mortgagee in 
     possession;
       ``(8) the date and conditions of any foreclosure sale;
       ``(9) the date of acquisition by the Secretary;
       ``(10) the date and conditions of any property disposition 
     sale;
       ``(11) a description of actions undertaken pursuant to this 
     section, including--
       ``(A) a comparison of results between actions taken after 
     enactment of the Housing and Community Development Act of 
     1993 and actions taken in years prior to such enactment;
       ``(B) a description of any impediments to the disposition 
     or management of multifamily housing projects, together with 
     a recommendation of proposed legislative or regulatory 
     changes designed to ameliorate such impediments;
       ``(C) a description of actions taken to restructure or 
     commence foreclosure on delinquent multifamily mortgages held 
     by the Department; and
       ``(D) a description of actions taken to monitor and prevent 
     the default of multifamily housing mortgages held by the 
     Federal Housing Administration;
       ``(12) a description of any of the functions performed in 
     connection with this section that are contracted out to 
     public or private entities or to States, including--
       ``(A) the costs associated with such delegation;
       ``(B) the implications of contracting out or delegating 
     such functions for current Department field or regional 
     personnel, including anticipated personnel or work load 
     reductions;
       ``(C) necessary oversight required by Department personnel, 
     including anticipated personnel hours devoted to such 
     oversight;
       ``(D) a description of any authority granted to such public 
     or private entities or States in conjunction with the 
     functions that have been delegated or contracted out or that 
     are not otherwise available for use by Department personnel; 
     and
       ``(E) the extent to which such public or private entities 
     or States include tenants of multifamily housing projects in 
     the disposition planning for such projects;
       ``(13) a description of the activities carried out under 
     subsection (j) during the preceding year; and
       ``(14) a description and assessment of the rules, 
     guidelines, and practices governing the Department's 
     management of multifamily housing projects that are owned by 
     the Secretary (or for which the Secretary is mortgagee in 
     possession) as well as the steps that the Secretary has taken 
     or plans to take to improve the management performance of the 
     Department.''.
       (3) Effective date.--The Secretary shall, by notice 
     published in the Federal Register, which shall take effect 
     upon publication, establish such requirements as may be 
     necessary to implement the amendments made by this 
     subsection. The notice shall invite public comments, and the 
     Secretary shall issue final regulations based on the initial 
     notice, taking into account any public comments received.
       (b) Repeal of the National Small Business Tree Planting 
     Program.--Section 24 of the Small Business Act (15 U.S.C. 
     651) is repealed.
                       TITLE IV--MONEY LAUNDERING

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Money Laundering 
     Suppression Act of 1994''.

     SEC. 402. REFORM OF CTR EXEMPTION REQUIREMENTS TO REDUCE 
                   NUMBER AND SIZE OF REPORTS CONSISTENT WITH 
                   EFFECTIVE LAW ENFORCEMENT.

       (a) In General.--Section 5313 of title 31, United States 
     Code, is amended by adding at the end the following new 
     subsections:
       ``(d) Mandatory Exemptions From Reporting Requirements.--
       ``(1) In general.--The Secretary of the Treasury shall 
     exempt, pursuant to section 5318(a)(5), a depository 
     institution from the reporting requirements of subsection (a) 
     (and regulations prescribed under such subsection) with 
     respect to transactions between the depository institution 
     and the following categories of entities:
       ``(A) Another depository institution.
       ``(B) A department or agency of the United States, any 
     State, or any political subdivision of any State, including 
     any entity established under the laws of the United States, 
     any State, or any political subdivision of any State, or 
     under an interstate compact between 2 or more States, which 
     exercises governmental authority on behalf of the United 
     States, the State, or the political subdivision.
       ``(C) Any business or category of business the reports on 
     which have little or no value for law enforcement purposes.
       ``(2) Notice of exemption.--The Secretary of the Treasury 
     shall publish in the Federal Register at such times as the 
     Secretary determines to be appropriate (but not less 
     frequently than once during each year) a list of all the 
     entities whose transactions with a depository institution are 
     exempt under this subsection from the reporting requirements 
     of subsection (a) (and regulations prescribed under such 
     subsection).
       ``(e) Discretionary Exemptions From Reporting 
     Requirements.--
       ``(1) In general.--The Secretary of the Treasury may 
     exempt, pursuant to section 5318(a)(5), a depository 
     institution from the reporting requirements of subsection (a) 
     (and regulations prescribed under such subsection) with 
     respect to transactions between the depository institution 
     and a qualified business customer of the institution on the 
     basis of information submitted to the Secretary by the 
     institution in accordance with procedures which the Secretary 
     shall establish.
       ``(2) Qualified business customer defined.--For purposes of 
     this subsection, the term `qualified business customer' means 
     a business which--
       ``(A) maintains a transaction account (as defined in 
     section 19(b)(1)(C) of the Federal Reserve Act) at the 
     depository institution;
       ``(B) frequently engages in transactions with the 
     depository institution which are subject to the reporting 
     requirements of subsection (a) (and regulations prescribed 
     under such subsection); and
       ``(C) meets criteria which the Secretary determines are 
     sufficient to ensure that the purposes of this subchapter are 
     carried out without requiring a report with respect to such 
     transactions.
       ``(3) Criteria for exemption.--The Secretary of the 
     Treasury shall establish, by regulation, the criteria for 
     granting and maintaining an exemption under paragraph (1).
       ``(4) Guidelines.--
       ``(A) In general.--The Secretary of the Treasury shall 
     establish guidelines for depository institutions to follow in 
     selecting customers for an exemption under this subsection.
       ``(B) Contents.--The guidelines may include a description 
     of the types of businesses or an itemization of specific 
     businesses for which no exemption will be granted under this 
     subsection to any depository institution.
       ``(5) Annual review.--The Secretary of the Treasury shall 
     prescribe regulations requiring each depository institution 
     to--
       ``(A) review, at least once during each year, the qualified 
     business customers of such institution with respect to whom 
     an exemption has been granted under this subsection; and
       ``(B) upon the completion of such review, resubmit 
     information about such customers, with such modifications as 
     the institution determines to be appropriate, to the 
     Secretary for the Secretary's approval.
       ``(6) 2-year phase-in provision.--During the 2-year period 
     beginning on the date of enactment of the Money Laundering 
     Suppression Act of 1994, this subsection shall be applied by 
     the Secretary on the basis of such criteria as the Secretary 
     determines to be appropriate to achieve an orderly 
     implementation of the requirements of this subsection.
       ``(f) Provisions Applicable to Mandatory and Discretionary 
     Exemptions.--
       ``(1) Limitation on liability of depository institutions.--
     No depository institution shall be subject to any penalty 
     which may be imposed under this subchapter for the failure of 
     the institution to file a report with respect to a 
     transaction with a customer for whom an exemption has been 
     granted under subsection (d) or (e), unless the institution--
       ``(A) knowingly files false or incomplete information to 
     the Secretary with respect to the transaction or the customer 
     engaging in the transaction; or
       ``(B) has reason to believe at the time the exemption is 
     granted or the transaction is entered into that the customer 
     or the transaction does not meet the criteria established for 
     granting such exemption.
       ``(2) Coordination with other provisions.--Any exemption 
     granted by the Secretary of the Treasury under section 
     5318(a) in accordance with this section, and any transaction 
     which is subject to such exemption, shall be subject to any 
     other provision of law applicable to such exemption, 
     including--
       ``(A) the authority of the Secretary, under section 
     5318(a)(5), to revoke such exemption at any time; and
       ``(B) any requirement to report, or any authority to 
     require a report on, any possible violation of any law or 
     regulation or any suspected criminal activity.
       ``(g) Depository Institution Defined.--For purposes of this 
     section, the term `depository institution' has the meaning 
     given to such term in section 19(b)(1)(A) of the Federal 
     Reserve Act.''.
       (b) Report Reduction Goal; Reports.--
       (1) In general.--In implementing the amendment made by 
     subsection (a), the Secretary of the Treasury shall seek to 
     reduce, within a reasonable period of time, the number of 
     reports required to be filed in the aggregate by depository 
     institutions pursuant to section 5313(a) of title 31, United 
     States Code, by not less than 30 percent of the number filed 
     during the year preceding the date of enactment of this Act.
       (2) Interim report.--The Secretary of the Treasury shall 
     submit a report to the Congress not later than the end of the 
     180-day period beginning on the date of enactment of this Act 
     on the progress made by the Secretary in implementing the 
     amendment made by subsection (a).
       (3) Annual report.--The Secretary of the Treasury shall 
     submit an annual report to the Congress after the end of each 
     of the first 5 calendar years which begin after the date of 
     enactment of this Act on the extent to which the Secretary 
     has reduced the overall number of currency transaction 
     reports required to be filed with the Secretary pursuant to 
     section 5313(a) of title 31, United States Code, consistently 
     with the purposes of such section and effective law 
     enforcement.
       (c) Streamlined Currency Transaction Reports.--The 
     Secretary of the Treasury shall take such action as may be 
     appropriate to redesign the format of reports required to be 
     filed by any financial institution (as defined in section 
     5312(a)(2) of title 31, United States Code) under section 
     5313(a) of title 31, United States Code, to eliminate the 
     need to report information which has little or no value for 
     law enforcement purposes and reduce the time and effort 
     required to prepare such report for filing by any such 
     financial institution under such section.

     SEC. 403. SINGLE DESIGNEE FOR REPORTING OF SUSPICIOUS 
                   TRANSACTIONS.

       (a) In General.--Section 5318(g) of title 31, United States 
     Code, is amended by adding at the end the following new 
     paragraph:
       ``(4) Single designee for reporting suspicious 
     transactions.--
       ``(A) In general.--In requiring reports under paragraph (1) 
     of suspicious transactions, the Secretary of the Treasury 
     shall designate, to the extent practicable and appropriate, a 
     single officer or agency of the United States to whom such 
     reports shall be made.
       ``(B) Duty of designee.--The officer or agency of the 
     United States designated by the Secretary of the Treasury 
     pursuant to subparagraph (A) shall refer any report of a 
     suspicious transaction to the appropriate law enforcement or 
     supervisory agency.
       ``(C) Coordination with other reporting requirements.--
     Subparagraph (A) shall not be construed as precluding any 
     supervisory agency for any financial institution from 
     requiring the financial institution to submit any information 
     or report to the agency or another agency pursuant to any 
     provision of law other than this subsection.
       ``(D) Reports.--
       ``(i) Reports required.--The Secretary of the Treasury 
     shall submit an annual report to the Congress at the times 
     required under clause (ii) on the number of suspicious 
     transactions reported to the officer or agency designated 
     under subparagraph (A) during the period covered by the 
     report and the disposition of such reports.
       ``(ii) Time for submitting reports.--The first report 
     required under clause (i) shall be filed before the end of 
     the 1-year period beginning on the date of enactment of the 
     Money Laundering Suppression Act of 1994, and each subsequent 
     report shall be filed, not later than 90 days after the end 
     of each of the 5 calendar years which begin after such date 
     of enactment.''.
       (b) Designation Required To Be Made Expeditiously.--The 
     initial designation of an officer or agency of the United 
     States pursuant to the amendment made by subsection (a) shall 
     be made before the end of the 180-day period beginning on the 
     date of enactment of this Act.

     SEC. 404. IMPROVEMENT OF IDENTIFICATION OF MONEY LAUNDERING 
                   SCHEMES.

       (a) Enhanced Training, Examinations, and Referrals by 
     Banking Agencies.--Before the end of the 6-month period 
     beginning on the date of enactment of this Act, each 
     appropriate Federal banking agency shall, in consultation 
     with the Secretary of the Treasury and other appropriate law 
     enforcement agencies--
       (1) review and enhance training and examination procedures 
     to improve the identification of money laundering schemes 
     involving depository institutions; and
       (2) review and enhance procedures for referring cases to 
     any other appropriate law enforcement agency.
       (b) Improved Reporting of Criminal Schemes by Law 
     Enforcement Agencies.--The Secretary of the Treasury and each 
     appropriate law enforcement agency shall, on a regular basis, 
     provide information regarding money laundering schemes and 
     activities involving depository institutions to each 
     appropriate Federal banking agency to enhance the agency's 
     ability to examine for and identify money laundering.
       (c) Report to Congress.--Not later than 1 year after the 
     date of enactment of this Act, the Federal banking agencies 
     shall jointly submit a report to the Congress on the progress 
     made in carrying out subsection (a) and the usefulness of 
     information received pursuant to subsection (b).
       (d) Definitions.--The terms ``appropriate Federal banking 
     agency'' and ``Federal banking agencies'' have the same 
     meanings as in section 3 of the Federal Deposit Insurance 
     Act.

     SEC. 405. NEGOTIABLE INSTRUMENTS DRAWN ON FOREIGN BANKS 
                   SUBJECT TO RECORDKEEPING AND REPORTING 
                   REQUIREMENTS.

       Section 5312(a)(3) of title 31, United States Code, is 
     amended--
       (1) by striking ``and'' at the end of subparagraph (A);
       (2) by striking the period at the end of subparagraph (B) 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(C) as the Secretary of the Treasury shall provide by 
     regulation for purposes of section 5316, checks, drafts, 
     notes, money orders, and other similar instruments which are 
     drawn on or by a foreign financial institution and are not in 
     bearer form.''.

     SEC. 406. IMPOSITION OF CIVIL MONEY PENALTIES BY APPROPRIATE 
                   FEDERAL BANKING AGENCIES.

       Section 5321 of title 31, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(e) Delegation of Assessment Authority to Banking 
     Agencies.--
       ``(1) In general.--The Secretary of the Treasury shall 
     delegate, in accordance with section 5318(a)(1), and subject 
     to such terms and conditions as the Secretary may impose in 
     accordance with paragraph (3), any authority of the Secretary 
     to assess a civil money penalty under this section on 
     depository institutions to the appropriate Federal banking 
     agencies.
       ``(2) Authority of agencies.--Subject to any term or 
     condition imposed by the Secretary of the Treasury under 
     paragraph (3), the provisions of this section shall apply to 
     an appropriate Federal banking agency to which is delegated 
     any authority of the Secretary under this section in the same 
     manner such provisions apply to the Secretary.
       ``(3) Terms and conditions.--
       ``(A) In general.--The Secretary of the Treasury shall 
     prescribe by regulation the terms and conditions which shall 
     apply to any delegation under paragraph (1).
       ``(B) Maximum dollar amount.--The terms and conditions 
     authorized under subparagraph (A) may include, in the 
     Secretary's sole discretion, a limitation on the amount of 
     any civil penalty which may be assessed by an appropriate 
     Federal banking agency pursuant to a delegation under 
     paragraph (1).
       ``(4) Definitions.--For purposes of this subsection, the 
     terms `depository institution' and `Federal banking agencies' 
     have the same meanings as in section 3 of the Federal Deposit 
     Insurance Act.''.

     SEC. 407. UNIFORM STATE LICENSING AND REGULATION OF CHECK 
                   CASHING, CURRENCY EXCHANGE, AND MONEY 
                   TRANSMITTING BUSINESSES.

       (a) Uniform Laws and Enforcement.--For purposes of 
     preventing money laundering and protecting the payment system 
     from fraud and abuse, it is the sense of the Congress that 
     the several States should--
       (1) establish uniform laws for licensing and regulating 
     businesses which--
       (A) provide check cashing, currency exchange, or money 
     transmitting or remittance services, or issue or redeem money 
     orders, travelers' checks, and other similar instruments; and
       (B) are not depository institutions (as defined in section 
     19(b)(1)(A) of the Federal Reserve Act); and
       (2) provide sufficient resources to the appropriate State 
     agency to enforce such laws and regulations prescribed 
     pursuant to such laws.
       (b) Model Statute.--It is the sense of the Congress that 
     the several States should develop, through the auspices of 
     the National Conference of Commissioners on Uniform State 
     Laws, the American Law Institute, or such other forum as the 
     States may determine to be appropriate, a model statute to 
     carry out the goals described in subsection (a) which would 
     include the following:
       (1) Licensing requirements.--A requirement that any 
     business described in subsection (a)(1) be licensed and 
     regulated by an appropriate State agency in order to engage 
     in any such activity within the State.
       (2) Licensing standards.--A requirement that--
       (A) in order for any business described in subsection 
     (a)(1) to be licensed in the State, the appropriate State 
     agency shall review and approve--
       (i) the business record and the capital adequacy of the 
     business seeking the license; and
       (ii) the competence, experience, integrity, and financial 
     ability of any individual who--

       (I) is a director, officer, or supervisory employee of such 
     business; or
       (II) owns or controls such business; and

       (B) any record, on the part of any business seeking the 
     license or any person referred to in subparagraph (A)(ii), 
     of--
       (i) any criminal activity;
       (ii) any fraud or other act of personal dishonesty;
       (iii) any act, omission, or practice which constitutes a 
     breach of a fiduciary duty; or
       (iv) any suspension or removal, by any agency or department 
     of the United States or any State, from participation in the 
     conduct of any federally or State licensed or regulated 
     business;

     may be grounds for the denial of any such license by the 
     appropriate State agency.
       (3) Procedures to ensure compliance with federal cash 
     transaction reporting requirements.--A civil or criminal 
     penalty for operating any business referred to in paragraph 
     (1) without establishing and complying with appropriate 
     procedures to ensure compliance with subchapter II of chapter 
     53 of title 31, United States Code (relating to records and 
     reports on monetary instruments transactions).
       (4) Criminal penalties for operation of business without a 
     license.--A criminal penalty for operating any business 
     referred to in paragraph (1) without a license within the 
     State after the end of an appropriate transition period 
     beginning on the date of enactment of such model statute by 
     the State.
       (c) Study Required.--The Secretary of the Treasury shall 
     conduct a study of--
       (1) the progress made by the several States in developing 
     and enacting a model statute which--
       (A) meets the requirements of subsection (b); and
       (B) furthers the goals of--
       (i) preventing money laundering by businesses which are 
     required to be licensed under any such model statute; and
       (ii) protecting the payment system, including the receipt, 
     payment, collection, and clearing of checks, from fraud and 
     abuse by such businesses; and
       (2) the adequacy of--
       (A) the activity of the several States in enforcing the 
     requirements of such statute; and
       (B) the resources made available to the appropriate State 
     agencies for such enforcement activity.
       (d) Report Required.--Before the end of the 3-year period 
     beginning on the date of enactment of this Act and by the end 
     of each of the first two 1-year periods beginning after the 
     end of such 3-year period, the Secretary of the Treasury 
     shall submit a report to the Congress containing the findings 
     and recommendations of the Secretary in connection with the 
     study under subsection (c), together with such 
     recommendations for legislative and administrative action as 
     the Secretary may determine to be appropriate.
       (e) Recommendations in Cases of Inadequate Regulation and 
     Enforcement by States.--If the Secretary of the Treasury 
     determines that any State has been unable--
       (1) to enact a statute which meets the requirements 
     described in subsection (b);
       (2) to undertake adequate activity to enforce such statute; 
     or
       (3) to make adequate resources available to the appropriate 
     State agency for such enforcement activity;

     the report submitted pursuant to subsection (d) shall contain 
     recommendations designed to facilitate enactment and 
     enforcement of such a statute.
       (f) Federal Funding Study.--
       (1) Study required.--The Secretary of the Treasury shall 
     conduct a study to identify possible available sources of 
     Federal funding to cover costs to the States to implement 
     this section.
       (2) Report.--The Secretary of the Treasury shall submit a 
     report to the Congress on the study conducted pursuant to 
     paragraph (1) before the end of the 18-month period beginning 
     on the date of enactment of this Act.

     SEC. 408. REGISTRATION OF MONEY TRANSMITTING BUSINESSES TO 
                   PROMOTE EFFECTIVE LAW ENFORCEMENT.

       (a) Findings and Purposes.--
       (1) Findings.--The Congress finds the following:
       (A) Money transmitting businesses are subject to the 
     recordkeeping and reporting requirements of subchapter II of 
     chapter 53 of title 31, United States Code.
       (B) Money transmitting businesses are largely unregulated 
     businesses and are frequently used in sophisticated schemes 
     to--
       (i) transfer large amounts of money which are the proceeds 
     of unlawful enterprises; and
       (ii) evade the requirements of subchapter II of chapter 53 
     of title 31, United States Code, the Internal Revenue Code of 
     1986, and other laws of the United States.
       (C) Information on the identity of money transmitting 
     businesses and the names of the persons who own or control, 
     or are officers or employees of, a money transmitting 
     business would have a high degree of usefulness in criminal, 
     tax, or regulatory investigations and proceedings.
       (2) Purpose.--It is the purpose of this section to 
     establish a registration requirement for businesses engaged 
     in providing check cashing, currency exchange, or money 
     transmitting or remittance services, or issuing or redeeming 
     money orders, travelers' checks, and other similar 
     instruments to assist the Secretary of the Treasury, the 
     Attorney General, and other supervisory and law enforcement 
     agencies to effectively enforce the criminal, tax, and 
     regulatory laws and prevent such money transmitting 
     businesses from engaging in illegal activities.
       (b) In General.--Subchapter II of chapter 53 of title 31, 
     United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 5329. Registration of money transmitting businesses

       ``(a) Registration With Secretary of the Treasury 
     Required.--
       ``(1) In general.--Any person who owns or controls a money 
     transmitting business which is not a depository institution 
     (as defined in section 19(b)(1)(A) of the Federal Reserve 
     Act) shall register the business (whether or not the business 
     is licensed as a money transmitting business in any State) 
     with the Secretary of the Treasury before the end of the 180-
     day period beginning on the later of--
       ``(A) the date of enactment of this section; or
       ``(B) the date the business is established.
       ``(2) Form and manner of registration.--Subject to the 
     requirements of subsection (b), the Secretary of the Treasury 
     shall prescribe, in regulations, the form and manner for 
     registering a money transmitting business pursuant to 
     paragraph (1).
       ``(3) Businesses remain subject to state law.--This section 
     shall not be construed as superseding any requirement of 
     State law relating to money transmitting businesses operating 
     in such State.
       ``(4) False and incomplete information.--The filing of 
     false or materially incomplete information in connection with 
     the registration of a money transmitting business shall be 
     considered as a failure to comply with the requirements of 
     this subsection.
       ``(b) Contents of Registration.--The registration of a 
     money transmitting business under subsection (a) shall 
     include the following information:
       ``(1) The name and location of the business.
       ``(2) The name and address of each person who--
       ``(A) owns or controls the business;
       ``(B) is a director or officer of the business; or
       ``(C) otherwise participates in the conduct of the affairs 
     of the business.
       ``(3) The name and address of any depository institution at 
     which the business maintains a transaction account (as 
     defined in section 19(b)(1)(C) of the Federal Reserve Act).
       ``(4) An estimate of the volume of business to be reported 
     annually.
       ``(5) Such other information as the Secretary of the 
     Treasury may require.
       ``(c) Agents of Money Transmitting Businesses.--
       ``(1) Maintenance of lists of agents of money transmitting 
     businesses.--Pursuant to regulations which the Secretary of 
     the Treasury shall prescribe, each money transmitting 
     business shall--
       ``(A) maintain a list containing the names and addresses of 
     all persons authorized to act as an agent for such business 
     in connection with activities described in subsection 
     (d)(1)(A) and such other information about such agents as the 
     Secretary may require; and
       ``(B) make the list and other information available on 
     request to any appropriate law enforcement agency.
       ``(2) Treatment of agent as money transmitting business.--
     The Secretary of the Treasury shall prescribe regulations 
     establishing, on the basis of such criteria as the Secretary 
     determines to be appropriate, a threshold point for treating 
     an agent of a money transmitting business as a money 
     transmitting business for purposes of this section.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Money transmitting business.--The term `money 
     transmitting business' means any business other than the 
     United States Postal Service which--
       ``(A) provides check cashing, currency exchange, or money 
     transmitting or remittance services, or issues or redeems 
     money orders, travelers' checks, and other similar 
     instruments;
       ``(B) is required to file reports under section 5313; and
       ``(C) is not a depository institution (as defined in 
     section 19(b)(1)(A) of the Federal Reserve Act).
       ``(2) Money transmitting service.--The term `money 
     transmitting service' includes accepting currency or funds 
     denominated in the currency of any country and transmitting 
     the currency or funds, or the value of the currency or funds, 
     by any means through a financial agency or institution, a 
     Federal reserve bank or other facility of the Board of 
     Governors of the Federal Reserve System, or an electronic 
     funds transfer network.
       ``(e) Civil Penalty for Failure To Comply With Registration 
     Requirements.--
       ``(1) In general.--Any person who fails to comply with the 
     money transmitting business registration requirements under 
     subsection (a) or regulations prescribed under such 
     subsection shall be liable to the United States for a civil 
     penalty of $5,000 for each such violation.
       ``(2) Continuing violation.--Each day a violation described 
     in paragraph (1) continues shall constitute a separate 
     violation for purposes of such paragraph.
       ``(3) Assessments.--Any penalty imposed under this 
     subsection shall be assessed and collected by the Secretary 
     of the Treasury in the manner provided in section 5321 and 
     any such assessment shall be subject to the provisions of 
     such section.''.
       (c) Criminal Penalty for Failure To Comply With 
     Registration Requirements.--Section 1960(b)(1) of title 18, 
     United States Code, is amended to read as follows:
       ``(1) the term `illegal money transmitting business' means 
     a money transmitting business which affects interstate or 
     foreign commerce in any manner or degree and--
       ``(A) is intentionally operated without an appropriate 
     money transmitting license in a State where such operation is 
     punishable as a misdemeanor or a felony under State law; or
       ``(B) fails to comply with the money transmitting business 
     registration requirements under section 5329 of title 31, 
     United States Code, or regulations prescribed under such 
     section;''.
       (d) Civil Forfeiture.--Section 981(a)(1)(A) of title 18, 
     United States Code, is amended by striking ``or of section 
     1956 or 1957 of this title,'' and inserting ``, of section 
     1956, 1957, or 1960 of this title,''.
       (e) Clerical Amendment.--The table of sections for chapter 
     53 of title 31, United States Code, is amended by inserting 
     after the item relating to section 5328 the following new 
     item:
``5329. Registration of money transmitting businesses.''.

     SEC. 409. CRIMINAL AND CIVIL PENALTY FOR STRUCTURING DOMESTIC 
                   AND INTERNATIONAL TRANSACTIONS.

       (a) Criminal Penalty.--Section 5324 of title 31, United 
     States Code, is amended by adding at the end the following 
     new subsection:
       ``(c) Criminal Penalty.--
       ``(1) In general.--Whoever violates this section shall be 
     fined in accordance with title 18, United States Code, 
     imprisoned for not more than 5 years, or both.
       ``(2) Enhanced penalty for aggravated cases.--Whoever 
     violates this section while violating another law of the 
     United States or as part of a pattern of any illegal activity 
     involving more than $100,000 in a 12-month period shall be 
     fined twice the amount provided in subsection (b)(3) or 
     (c)(3) (as the case may be) of section 3571 of title 18, 
     United States Code, imprisoned for not more than 10 years, or 
     both.''.
       (b) Amendment Relating to Civil Penalty.--Section 
     5321(a)(4)(A) of title 31, United States Code, is amended by 
     striking ``willfully''.
       (c) Technical and Conforming Amendment.--Subsections (a) 
     and (b) of section 5322 of title 31, United States Code, are 
     amended by inserting ``or 5324'' after ``section 5315'' each 
     place such term appears.

     SEC. 410. GAO STUDY OF CASHIERS' CHECKS.

       (a) Study Required.--The Comptroller General of the United 
     States shall conduct a study to determine--
       (1) the extent to which the practice of issuing of 
     cashiers' checks by financial institutions is vulnerable to 
     money laundering schemes;
       (2) the extent to which additional recordkeeping 
     requirements should be imposed on financial institutions 
     which issue cashiers' checks; and
       (3) such other factors relating to the use and regulation 
     of cashiers' checks as the Comptroller General determines to 
     be appropriate.
       (b) Report Required.--Before the end of the 180-day period 
     beginning on the date of enactment of this Act, the 
     Comptroller General shall submit a report to the Congress 
     containing--
       (1) the findings and conclusions in connection with the 
     study conducted pursuant to subsection (a); and
       (2) such recommendations for legislative and administrative 
     action as the Comptroller General may determine to be 
     appropriate.
               TITLE V--FAIR TRADE IN FINANCIAL SERVICES

     SEC. 501. SHORT TITLE.

       This title may be cited as the ``Fair Trade in Financial 
     Services Act of 1994''.

     SEC. 502. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT 
                   FOR BANKING ORGANIZATIONS.

       The International Banking Act of 1978 (12 U.S.C. 3101 et 
     seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 18. NATIONAL TREATMENT.

       ``(a) Purpose.--The purpose of this section is to encourage 
     foreign countries to accord national treatment to United 
     States banking organizations that operate or seek to operate 
     in those countries.
       ``(b) Identifying Countries That Deny National Treatment to 
     United States Banks or Bank Holding Companies.--The Secretary 
     shall identify the extent to which foreign countries deny 
     national treatment to United States banking organizations--
       ``(1) according to the most recent report under section 
     3602 of the Omnibus Trade and Competitiveness Act of 1988 (or 
     update thereof); or
       ``(2) based on more recent information that the Secretary 
     deems appropriate.
       ``(c) Determining Whether Denial of National Treatment Has 
     Significant Adverse Effect.--
       ``(1) In general.--The Secretary shall determine whether 
     the denial of national treatment to United States banking 
     organizations by a foreign country identified under 
     subsection (b) has a significant adverse effect on such 
     organizations.
       ``(2) Factors to be considered.--In determining whether and 
     to what extent a foreign country denies national treatment to 
     United States banking organizations, and in determining the 
     effect of any such denial on such banking organizations, the 
     Secretary shall consider appropriate factors, including--
       ``(A) the size of the foreign country's markets for the 
     financial services involved, and the extent to which United 
     States banking organizations operate or seek to operate in 
     those markets;
       ``(B) the extent to which United States banking 
     organizations may participate in developing regulations, 
     guidelines, or other policies regarding new products, 
     services, and markets in the foreign country;
       ``(C) the extent to which the foreign country issues 
     written regulations, guidelines, or other policies applicable 
     to United States banking organizations operating or seeking 
     to operate in the foreign country that are--
       ``(i) prescribed after adequate notice and opportunity for 
     comment;
       ``(ii) readily available to the public; and
       ``(iii) prescribed in accordance with objective standards 
     that effectively prevent arbitrary and capricious 
     determinations;
       ``(D) the extent to which United States banking 
     organizations may offer foreign exchange services in the 
     foreign country; and
       ``(E) the effects of the regulatory policies of the foreign 
     country on--
       ``(i) the lending policies of the central bank of that 
     country;
       ``(ii) capital requirements applicable in that country;
       ``(iii) the regulation of deposit interest rates by that 
     country;
       ``(iv) restrictions on the operation and establishment of 
     branches in that country; and
       ``(v) restrictions on access to automated teller machine 
     networks in that country.
       ``(d) Publication of Determination.--
       ``(1) In general.--If the Secretary determines under 
     subsection (c) that the denial of national treatment to 
     United States banking organizations by a foreign country has 
     a significant adverse effect on such organizations, the 
     Secretary--
       ``(A) may, after initiating negotiations in accordance with 
     subsection (g), and after consultation in accordance with 
     subsection (i), publish that determination in the Federal 
     Register;
       ``(B) shall, not less frequently than annually, in 
     consultation with any department or agency that the Secretary 
     deems appropriate, review each such determination to 
     determine whether it should be rescinded; and
       ``(C) shall inform State bank supervisors of the 
     publication of that determination.
       ``(2) Exception for countries that are parties to certain 
     agreements governing financial services.--Paragraph (1) shall 
     not apply to a foreign country to the extent that any 
     authority under that paragraph would permit action to be 
     taken that would be inconsistent with a bilateral or 
     multilateral agreement (including any dispute resolution 
     procedures contained in such agreement) that governs 
     financial services that--
       (A) the President entered into with that country; and
       (B) the Senate and House of Representatives approved;

     before the date of enactment of this section.
       ``(e) Sanctions.--
       ``(1) Action by secretary of treasury.--
       ``(A) In general.--The Secretary may, after consultation in 
     accordance with subsection (i), recommend to the appropriate 
     Federal banking agency that such agency deny or suspend 
     consideration of a request for authorization filed after the 
     date of publication of a determination under subsection 
     (d)(1) by a person of a foreign country listed in such 
     publication if the Secretary determines that--
       ``(i) such action would assist the United States in 
     negotiations to eliminate discrimination against United 
     States banking organizations;
       ``(ii) negotiations undertaken pursuant to subsection (g) 
     are not likely to result in an agreement that eliminates the 
     denial of national treatment; or
       ``(iii) the country has not adequately adhered to an 
     agreement reached as a result of negotiations undertaken 
     pursuant to subsection (g).
       ``(B) Exercise of authority.--The authority of subparagraph 
     (A) shall be exercised according to the specific direction 
     (if any) of the President.
       ``(C) Compliance exceptions.--The appropriate Federal 
     banking agency shall comply with the recommendation of the 
     Secretary made under subparagraph (A), unless the agency 
     determines, in writing, and transmits such determination to 
     the Secretary and to the Congress, that such recommendation--
       ``(i) would likely result in a serious impairment to the 
     safe and sound operation of the United States banking system; 
     or
       ``(ii) would compromise the ability of a Federal banking 
     agency to resolve a failing or failed financial institution 
     because a foreign banking institution otherwise barred by an 
     action under subparagraph (A) represents the only bona fide 
     reasonable offer available to the Federal banking agency.
       ``(2) No affect on certain agreements.--The exercise of 
     authority under this subsection does not affect any 
     obligation of the United States to pursue dispute resolution 
     procedures pursuant to any international agreement governing 
     financial services, approved by the House of Representatives 
     and the Senate, with respect to a dispute arising out of any 
     obligation under that agreement.
       ``(f) Exemptions From Sanctions.--
       ``(1) In general.--Subsection (e) does not apply to the 
     subsidiaries in the United States of a person of a foreign 
     country if the Secretary determines that the banking laws and 
     regulations of the foreign country, as actually applied, meet 
     or exceed--
       ``(A) the standards for treatment of subsidiaries of United 
     States banking organizations contained in the Second Banking 
     Directive, and in any amendment to the Second Banking 
     Directive, if the Secretary determines that such amendment--
       ``(i) does not restrict any operation, activity, or 
     authority to expand any operation or activity, permitted 
     under those standards, of any subsidiary in the foreign 
     country of any such bank or bank holding company; or
       ``(ii) is in accordance with national treatment of 
     subsidiaries of such banking organizations; or
       ``(B) any set of standards that, taken as a whole, is no 
     less favorable to United States banking organizations than 
     the standards referred to in subparagraph (A).
       ``(2) Standards for exercise of discretion.--In exercising 
     any discretion under this subsection, the Secretary shall 
     consider, with respect to a bank, foreign bank, branch, 
     agency, commercial lending company, or other affiliated 
     entity that is a person of a foreign country and that is 
     operating in the United States--
       ``(A) the extent to which the foreign country is 
     progressing toward according national treatment to United 
     States banking organizations; and
       ``(B) whether the foreign country permits United States 
     banking organizations to expand their activities in that 
     country, even if that country determined that the United 
     States did not accord national treatment to the banking 
     organizations of that country.
       ``(g) Negotiations.--
       ``(1) In general.--The Secretary--
       ``(A) shall initiate negotiations with any foreign country 
     with respect to which a determination made under subsection 
     (c)(1) is in effect; and
       ``(B) may initiate negotiations with any foreign country 
     which denies national treatment to United States banking 
     organizations to ensure that the foreign country accords 
     national treatment to such organizations.
       ``(2) Exceptions.--Paragraph (1) does not require the 
     Secretary to initiate negotiations with a foreign country if 
     the Secretary--
       ``(A) determines that the negotiations--
       ``(i) would be so unlikely to result in progress toward 
     according national treatment to United States banking 
     organizations as to be a waste of effort; or
       ``(ii) would impair the economic interests of the United 
     States; and
       ``(B) gives written notice of that determination to the 
     chairperson and the ranking minority member of the Committee 
     on Banking, Housing, and Urban Affairs of the Senate and of 
     the Committee on Banking, Finance and Urban Affairs of the 
     House of Representatives.
       ``(h) Report.--
       ``(1) Contents of report.--Not later than December 1, 1994, 
     and biennially thereafter, the Secretary shall submit to the 
     Congress a report that--
       ``(A) specifies the foreign countries identified under 
     subsection (b);
       ``(B) if a determination is published under subsection 
     (d)(1) with respect to the foreign country, provides the 
     reasons therefor;
       ``(C) if the Secretary has not made or has rescinded such a 
     determination with respect to the foreign country, provides 
     the reasons therefor;
       ``(D) describes the results of any negotiations conducted 
     under subsection (g)(1) with the foreign country; and
       ``(E) discusses the effectiveness of this section in 
     achieving the purpose of this section.
       ``(2) Submission of report.--The report required by 
     paragraph (1) may be submitted as part of a report or update 
     submitted under section 3602 of the Omnibus Trade and 
     Competitiveness Act of 1988.
       ``(i) Consultation.--Consultation in accordance with this 
     subsection means consultation with the Secretary of State, 
     the Secretary of Commerce, the United States Trade 
     Representative, and the appropriate Federal banking agency.
       ``(j) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Appropriate federal banking agency.--The term 
     `appropriate Federal banking agency'--
       ``(A) in the case of a noninsured State bank or branch and 
     a representative office of a foreign bank, means the Board of 
     Governors of the Federal Reserve System; and
       ``(B) in any other case, has the same meaning as in section 
     3 of the Federal Deposit Insurance Act.
       ``(2) Banking organization.--The term `banking 
     organization' means--
       ``(A) a depository institution, as defined in section 3 of 
     the Federal Deposit Insurance Act, including a branch or 
     subsidiary thereof;
       ``(B) a bank holding company, as defined in section 2 of 
     the Bank Holding Company Act of 1956;
       ``(C) any company required to file information pursuant to 
     section 4(f)(6) of the Bank Holding Company Act of 1956;
       ``(D) a savings and loan holding company, as defined in 
     section 10(a)(1)(D) of the Home Owners' Loan Act; and
       ``(E) any nonbank financial entity, the primary purpose of 
     which is to provide credit or financing, regardless of 
     whether such entity accepts deposits.
       ``(3) National treatment.--A foreign country accords 
     `national treatment' to United States banking organizations 
     if it offers them the same competitive opportunities 
     (including effective market access) as are available to its 
     domestic banking organizations in like circumstances.
       ``(4) Person of a foreign country.--The term `person of a 
     foreign country' means--
       ``(A) a person organized under the laws of the foreign 
     country;
       ``(B) a person that has its principal place of business in 
     the foreign country;
       ``(C) an individual who is--
       ``(i) a citizen of the foreign country, or
       ``(ii) domiciled in the foreign country; and
       ``(D) a person that is directly or indirectly controlled by 
     a person or persons described in subparagraph (A) or (B), or 
     by an individual or individuals described in subparagraph 
     (C).
       ``(5) Request for authorization.--The term `request for 
     authorization'--
       ``(A) means an application, registration, notice, or other 
     request to commence a financial service or establish a 
     financial services office that is required under title LXII 
     of the Revised Statutes, the International Banking Act of 
     1978, the Federal Reserve Act, the Home Owners' Loan Act, or 
     the Bank Holding Company Act of 1956; and
       ``(B) does not include any such request by a company 
     described in section 2(h)(2) of the Bank Holding Company Act 
     of 1956.
       ``(6) Second banking directive.--The term `Second Banking 
     Directive' means the Second Council Directive of December 15, 
     1989, on the Coordination of Laws, Regulations, and 
     Administrative Provisions Relating to the Taking Up and 
     Pursuit of the Business of Credit Institutions and Amending 
     Directive 77/780/EEC (89/646/EEC).
       ``(7) Secretary.--The term `Secretary' means the Secretary 
     of the Treasury.''.

     SEC. 503. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT 
                   FOR SECURITIES ORGANIZATIONS.

       (a) Purpose.--The purpose of this section is to encourage 
     foreign countries to accord national treatment to United 
     States securities organizations that operate or seek to 
     operate in those countries.
       (b) Identifying Countries That Deny National Treatment to 
     United States Securities Organizations.--The Secretary shall 
     identify whether and to what extent foreign countries deny 
     national treatment to United States securities 
     organizations--
       (1) according to the most recent report under section 3602 
     of the Omnibus Trade and Competitiveness Act of 1988 (or 
     update thereof); or
       (2) based upon more recent information that the Secretary 
     deems appropriate.
       (c) Determining Whether Denial of National Treatment Has 
     Significant Adverse Effect.--The Secretary shall determine 
     whether the denial of national treatment to United States 
     securities organizations by a foreign country identified 
     under subsection (b) has a significant adverse effect on such 
     organizations.
       (d) Publication of Determination.--
       (1) In general.--If the Secretary determines under 
     subsection (c) that the denial of national treatment to 
     United States securities organizations by a foreign country 
     has a significant adverse effect on such organizations, the 
     Secretary--
       (A) may, after initiating negotiations in accordance with 
     subsection (f), and after consultation in accordance with 
     subsection (h), publish that determination in the Federal 
     Register; and
       (B) shall, not less frequently than annually, in 
     consultation with any department or agency that the Secretary 
     deems appropriate, review each such determination to 
     determine whether it should be rescinded.
       (2) Exception for countries that are parties to certain 
     agreements governing financial services.--Paragraph (1) shall 
     not apply to a foreign country to the extent that any 
     authority under that paragraph would permit action to be 
     taken that would be inconsistent with a bilateral or 
     multilateral agreement (including any dispute resolution 
     procedures contained in such agreement) that governs 
     financial services that--
       (A) the President entered into with that country; and
       (B) the Senate and House of Representatives approved;

     before the date of enactment of this section.
       (e) Sanctions.--
       (1) Action by secretary of treasury.--
       (A) In general.--The Secretary may, after consultation in 
     accordance with subsection (h), recommend to the Commission 
     that the Commission deny or suspend consideration of a 
     request for authorization filed after the date of publication 
     of a determination under subsection (d)(1) by a person of a 
     foreign country listed in such publication if the Secretary 
     determines that--
       (i) such action would assist the United States in 
     negotiations to eliminate discrimination against United 
     States securities organizations;
       (ii) negotiations undertaken pursuant to subsection (f) are 
     not likely to result in an agreement that eliminates the 
     denial of national treatment; or
       (iii) the country has not adequately adhered to an 
     agreement reached as a result of negotiations undertaken 
     pursuant to subsection (f).
       (B) Exercise of authority.--The authority of subparagraph 
     (A) shall be exercised according to the specific direction 
     (if any) of the President.
       (C) Commission action.--The Commission shall deny or 
     suspend consideration of a request for authorization in 
     accordance with the recommendation of the Secretary made 
     under subparagraph (A), unless such recommendation would 
     likely result in a serious adverse impact on--
       (i) the maintenance of fair and orderly securities markets; 
     or
       (ii) the protection of investors.
       (D) Authority upon denial of authorization.--
       (i) In general.--In connection with the denial of a request 
     for authorization under subparagraph (A), the Commission may 
     order--

       (I) disposition of any controlling interest referred to in 
     subsection (i)(9)(B)(i);
       (II) closure of any office referred to in subsection 
     (i)(9)(B)(ii); or
       (III) termination of any advisory relationship referred to 
     in subparagraphs (C) and (D) of subsection (i)(9).

       (ii) Penalty for noncompliance.--The Commission may revoke 
     the underlying registration under Federal securities laws of 
     any person who fails to comply with an order issued under 
     clause (i).
       (2) Notice required to file requests for authorization.--
       (A) In general.--If a determination is published under 
     subsection (d)(1) with respect to a foreign country, no 
     person of that foreign country may file a request for 
     authorization unless such person files notice of such request 
     simultaneously with the Commission and the Secretary, not 
     less than 90 days in advance of the action that is the 
     subject of the request, in such form and containing such 
     information as the Commission may prescribe by rule.
       (B) Notifying secretary.--The Commission shall promptly 
     notify the Secretary of any notice received under 
     subparagraph (A).
       (C) Extending 90-day period.--The Commission may, by order, 
     extend for an additional 180 days the period during which the 
     Commission may consider a notice received under subparagraph 
     (A).
       (3) Standards for exercise of discretion.--In exercising 
     any discretion under this subsection, the Secretary shall 
     consider, with respect to a securities organization that is 
     controlled, directly or indirectly, by a person of a foreign 
     country--
       (A) the extent to which the foreign country is progressing 
     toward according national treatment to United States 
     securities organizations; and
       (B) whether the foreign country permits United States 
     securities organizations to expand their activities in that 
     country, even if that country determined that the United 
     States did not accord national treatment to securities 
     organizations of that country.
       (f) Negotiations.--
       (1) In general.--The Secretary--
       (A) shall initiate negotiations with any foreign country 
     with respect to which a determination under subsection (c)(1) 
     is in effect; and
       (B) may initiate negotiations with any foreign country 
     which denies national treatment to United States securities 
     organizations to ensure that the foreign country accords 
     national treatment to such organizations.
       (2) Exceptions.--Paragraph (1) does not require the 
     Secretary to initiate negotiations with a foreign country if 
     the Secretary--
       (A) determines that the negotiations--
       (i) would be so unlikely to result in progress toward 
     according national treatment to United States securities 
     organizations as to be a waste of effort; or
       (ii) would impair the economic interests of the United 
     States; and
       (B) gives written notice of that determination to the 
     chairperson and the ranking minority member of the Committee 
     on Banking, Housing, and Urban Affairs of the Senate and of 
     the Committee of Energy and Commerce of the House of 
     Representatives.
       (g) Report.--
       (1) Contents of report.--Not later than December 1, 1994, 
     and biennially thereafter, the Secretary shall submit to the 
     Congress a report that--
       (A) specifies the foreign countries identified under 
     subsection (b);
       (B) if a determination is published under subsection (d)(1) 
     with respect to the foreign country, provides the reasons 
     therefor;
       (C) if the Secretary has not made, or has rescinded, a 
     determination under subsection (d)(1) with respect to the 
     foreign country, provides the reasons therefor;
       (D) describes the results of any negotiations conducted 
     under subsection (f)(1) with the foreign country; and
       (E) discusses the effectiveness of this section in 
     achieving the purpose of this section.
       (2) Submission of report.--The report required by paragraph 
     (1) may be submitted as part of a report or update submitted 
     under section 3602 of the Omnibus Trade and Competitiveness 
     Act of 1988.
       (h) Consultation.--Consultation in accordance with this 
     subsection means consultation with the Secretary of State, 
     the Secretary of Commerce, the United States Trade 
     Representative, and the Commission.
       (i) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Broker.--The term ``broker'' has the same meaning as in 
     section 3(a)(4) of the Securities Exchange Act of 1934.
       (2) Commission.--The term ``Commission'' means the 
     Securities and Exchange Commission.
       (3) Control.--The terms ``directly or indirectly controlled 
     by'' and ``controlled, directly or indirectly'' shall have 
     the meanings given to such terms in rules or regulations 
     issued by the Secretary of the Treasury, not later than 6 
     months after the date of enactment of this Act, after 
     consultation with the Commission.
       (4) Dealer.--The term ``dealer'' has the same meaning as in 
     section 3(a)(5) of the Securities Exchange Act of 1934.
       (5) Investment adviser.--The term ``investment adviser'' 
     has the same meaning as in section 202(a)(11) of the 
     Investment Advisers Act of 1940.
       (6) Investment company.--The term ``investment company'' 
     has the same meaning as in section 3 of the Investment 
     Company Act of 1940.
       (7) National treatment.--A foreign country accords 
     ``national treatment'' to United States securities 
     organizations if it offers them the same competitive 
     opportunities (including effective market access) as are 
     available to its domestic securities organizations in like 
     circumstances.
       (8) Person of a foreign country.--The term ``person of a 
     foreign country'' means--
       (A) a person organized under the laws of the foreign 
     country;
       (B) a person that has its principal place of business in 
     the foreign country;
       (C) an individual who is--
       (i) a citizen of the foreign country; or
       (ii) domiciled in the foreign country;
       (D) a person that is directly or indirectly controlled by 
     one or more persons described in subparagraph (A), (B), or 
     (C); and
       (E) an investment company, an investment adviser of which 
     is a person described in any of subparagraphs (A) through 
     (D).
       (9) Request for authorization.--The term ``request for 
     authorization'' means--
       (A) an application to register under section 15(b), 15B, or 
     15C of the Securities Exchange Act of 1934, or section 203(c) 
     of the Investment Advisers Act of 1940, including an 
     application to succeed to the business of a registered 
     entity;
       (B) an amendment to a registration statement referred to in 
     subparagraph (A) that reflects--
       (i) the acquisition of control of the registered entity; or
       (ii) the addition of a United States office by the 
     registered entity;
       (C) a registration statement filed by an investment company 
     under section 8(b) of the Investment Company Act of 1940, if 
     a person of a foreign country will serve as an investment 
     adviser to the investment company; and
       (D) an amendment to an investment company registration 
     statement filed under section 8(b) of the Investment Company 
     Act of 1940 that reflects the retention of a person of a 
     foreign country as an investment adviser.
       (10) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (11) Securities organization.--The term ``securities 
     organization'' means a broker, a dealer, an investment 
     company, or an investment adviser.

     SEC. 504. EFFECTUATING THE PRINCIPLE OF NATIONAL TREATMENT 
                   FOR INSURERS AND REINSURERS.

       (a) Purpose.--The purpose of this section is to encourage 
     foreign countries to accord national treatment to United 
     States insurers and reinsurers that operate or seek to 
     operate in those countries.
       (b) Identifying Countries That Deny National Treatment To 
     United States Insurers or Reinsurers.--The President or the 
     President's designee shall identify whether and to what 
     extent foreign countries deny national treatment to United 
     States insurers or reinsurers--
       (1) according to the most recent report under section 3602 
     of the Omnibus Trade and Competitiveness Act of 1988 (or 
     update thereof); or
       (2) based on more recent information that the President 
     deems appropriate.
       (c) Determining Whether Denial of National Treatment Has 
     Significant Adverse Effect.--
       (1) In General.--The President shall determine whether the 
     denial of national treatment to United States insurers or 
     reinsurers by a foreign country identified under subsection 
     (b) has a significant adverse effect on such organizations.
       (2) Factors To Be Considered.--In determining whether and 
     to what extent a foreign country denies national treatment to 
     United States insurers or reinsurers, and in determining the 
     effect of any such denial on such insurers or reinsurers, the 
     President shall consider appropriate factors, including--
       (A) the size of the foreign country's markets for the 
     financial services involved, and the extent to which United 
     States insurers or reinsurers operate or seek to operate in 
     those markets;
       (B) the extent to which United States insurers or 
     reinsurers may participate in developing regulations, 
     guidelines, or other policies regarding new products, 
     services, and markets in the foreign country;
       (C) the extent to which the foreign country issues written 
     regulations, guidelines, or other policies applicable to 
     United States insurers or reinsurers operating or seeking to 
     operate in the foreign country that are--
       (i) prescribed after adequate notice and opportunity for 
     comment;
       (ii) readily available to the public; and
       (iii) prescribed in accordance with objective standards 
     that effectively prevent arbitrary and capricious 
     determinations;
       (D) the effects of the regulatory policies of the foreign 
     country on--
       (i) the licensing policies of the insurance regulator of 
     that country;
       (ii) capital requirements applicable in that country;
       (iii) restrictions on acquisitions or joint ventures and 
     operations thereof by insurers or reinsurers in that country; 
     and
       (iv) restrictions on the operation and establishment of 
     branches in that country.
       (d) Publication of Determination.--
       (1) In General.--If the President determines under 
     subsection (c) that the denial of national treatment to 
     United States insurers or reinsurers by a foreign country has 
     a significant adverse effect on such organizations, the 
     President--
       (A) may, after initiating negotiations in accordance with 
     subsection (f) publish that determination in the Federal 
     Register;
       (B) shall, not less frequently than annually, in 
     consultation with any department or agency that the President 
     deems appropriate, review each such determination to 
     determine whether it should be rescinded; and
       (C) shall inform State insurance commissioners of the 
     publication of that determination.
       (2) Exception for Countries That Are Parties To Certain 
     Agreements Governing Financial Services.--Paragraph (1) shall 
     not apply to a foreign country to the extent that any 
     authority under that paragraph would permit action to be 
     taken that would be inconsistent with a bilateral or 
     multilateral agreement including any dispute resolution 
     procedures contained in such agreement that governs financial 
     services, including insurance, that--
       (A) the President entered into with that country; and
       (B) the Senate and the House of Representatives approved;

     before the date of enactment of this section.
       (e) Sanctions.--
       (1) Actions by the President.--
       (A) In General.--The President may recommend to the State 
     insurance commissioners that they deny a foreign insurer's or 
     reinsurer's request for authorization which is filed after 
     the date of publication of a determination under subsection 
     (d)(1) by a person of a foreign country listed in such 
     publication if the President determines that--
       (i) such action would assist the United States in 
     negotiations to eliminate discrimination against United 
     States insurers or reinsurers;
       (ii) negotiations undertaken pursuant to subsection (f) are 
     not likely to result in an agreement that eliminates the 
     denial of national treatment; or
       (iii) the country has not adequately adhered to an 
     agreement reached as a result of negotiations undertaken 
     pursuant to subsection (f).
       (B) Exercise of Authority.--If the President delegates his 
     authority under section 504(b), the designee's authority 
     under subparagraph (A) shall be exercised according to the 
     specific direction (if any) of the President.
       (C) Compliance Exceptions.--If the State insurance 
     commissioners do not act within 90 days on the President's 
     recommendations in subsection (A), or if the President 
     determines that the procedure outlined in subsection (A) is 
     either inappropriate or impractical to achieve the purpose of 
     this section, the President may take such action as he or she 
     considers necessary and appropriate to encourage foreign 
     countries to accord national treatment to United States 
     insurers and reinsurers that operate or seek to operate in 
     those countries.
       (2) Standards for Exercise of Discretion.--In exercising 
     any discretion under subsection (e), the President shall 
     consider, with respect to an insurer or reinsurer, branch, or 
     other affiliated entity that is a person of a foreign country 
     and is operating in the United States--
       (A) the extent to which the foreign country is progressing 
     toward according national treatment to United States insurers 
     or reinsurers; and
       (B) whether the foreign country permits United States 
     insurers or reinsurers to expand their activities in that 
     country, even if that country determined that the United 
     States did not accord national treatment to the insurers or 
     reinsurers of that country.
       (f) Negotiations.--
       (1) In General.--The President--
       (A) shall initiate negotiations with any foreign country 
     with respect to which a determination made under subsection 
     (c)(1) is in effect; and
       (B) may initiate negotiations with any foreign country 
     which denies national treatment to United States insurers or 
     reinsurers to ensure that the foreign country accords 
     national treatment to such insurers or reinsurers.
       (2) Exceptions.--Paragraph (1) does not require the 
     President to initiate negotiations with a foreign country if 
     the President--
       (A) determines that the negotiations--
       (i) would be so unlikely to result in progress toward 
     according national treatment to United States insurers or 
     reinsurers as to be a waste of effort; or
       (ii) would impair the economic interests of the United 
     States; and
       (B) gives written notice of that determination to the 
     chairperson and the ranking minority member of the 
     appropriate Senate and House committees.
       (g) Report.--
       (1) Contents of report.--Not later than December 1, 1994, 
     and biennially thereafter, the President shall submit to the 
     Congress a report that--
       (A) specifies the foreign countries identified under 
     subsection (b);
       (B) if a determination is published under subsection (d)(1) 
     with respect to the foreign country, provides the reasons 
     therefor;
       (C) if the President has not made or has rescinded such a 
     determination with respect to the foreign country, provides 
     the reasons therefor;
       (D) describes the results of any negotiations conducted 
     under subsection (g)(1) with the foreign country; and
       (E) discusses the effectiveness of this section in 
     achieving the purpose of this section.
       (2) Submission of report.--The report required by paragraph 
     (1) may be submitted as part of a report or update submitted 
     under section 3602 of the Omnibus Trade and Competitiveness 
     Act of 1988.
       (h) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Insurer.--The term ``insurer'' means a party to a 
     contract of insurance who assumes the risk and undertakes to 
     indemnify the insured, or pay a certain sum on the happening 
     of a specified contingency.
       (2) National treatment.--A foreign country accords 
     ``national treatment'' to United States insurers and 
     reinsurers if it offers them the same competitive 
     opportunities (including effective market access) as are 
     available to its domestic insurers or reinsurers.
       (3) Person of a foreign country.--The term ``person of a 
     foreign country'' means--
       (A) a person organized under the laws of the foreign 
     country;
       (B) a person that has its principal place of business in 
     the foreign country;
       (C) an individual who is--
       (i) a citizen of the foreign country, or
       (ii) domiciled in the foreign country; and
       (D) a person that is directly or indirectly controlled by a 
     person or persons described in subparagraph (A) or (B), or by 
     an individual or individuals described in subparagraph (C).
       (4) President.--The term ``President'' means the President 
     of the United States or the President's designee.
       (5) Reinsurer.--The term ``reinsurer'' means an insurer 
     which contracts to indemnify a ceding insurer for all or part 
     of a risk originally undertaken by the ceding insurer.
       (6) Request for authorization.--The term ``request for 
     authorization'' means--
       (A) an application, registration, notice, or other request 
     to commence engaging in the business of insurance in a State; 
     or
       (B) an application, registration, notice, or other request 
     for renewal of authorization to engage in the business of 
     insurance in a State.

     SEC. 505. FINANCIAL INTERDEPENDENCE STUDY.

       Subtitle G of title III of the Omnibus Trade and 
     Competitiveness Act of 1988 (22 U.S.C. 5351 et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 3605. FINANCIAL INTERDEPENDENCE STUDY.

       ``(a) Investigation Required.--The Secretary, in 
     consultation and coordination with the Securities and 
     Exchange Commission, the Federal banking agencies, and any 
     other appropriate Federal department or agency designated by 
     the Secretary, shall conduct an investigation to determine--
       ``(1) the extent of the interdependence of the financial 
     services sectors of the United States and foreign countries--
       ``(A) whose financial services institutions provide 
     financial services in the United States; or
       ``(B) whose persons have substantial ownership interests in 
     United States financial services institutions; and
       ``(2) the economic, strategic, and other consequences of 
     that interdependence for the United States.
       ``(b) Report.--
       ``(1) Report required.--Not later than 3 years after the 
     date of enactment of this section, the Secretary shall submit 
     a report on the results of the investigation under subsection 
     (a) to the President, the Congress, the Securities and 
     Exchange Commission, the Federal banking agencies, and any 
     other appropriate Federal agency or department, as designated 
     by the Secretary.
       ``(2) Contents of report.--The report required under 
     paragraph (1) shall--
       ``(A) describe the activities and estimate the scope of 
     financial services activities conducted by United States 
     financial services institutions in foreign markets 
     (differentiated according to major foreign markets);
       ``(B) describe the activities and estimate the scope of 
     financial services activities conducted by foreign financial 
     services institutions in the United States (differentiated 
     according to the most significant home countries or groups of 
     home countries);
       ``(C) estimate the number of jobs created in the United 
     States by financial services activities conducted by foreign 
     financial services institutions and the number of jobs 
     created in foreign countries by financial service activities 
     conducted by United States financial services institutions;
       ``(D) estimate the additional jobs and revenues (both 
     foreign and domestic) that would be created by the activities 
     of United States financial services institutions in foreign 
     countries if those countries offered such institutions the 
     same competitive opportunities (including effective market 
     access) as are available to the domestic financial services 
     institutions of those countries;
       ``(E) describe the extent to which foreign financial 
     services institutions discriminate against United States 
     persons in procurement, employment, the provision of credit 
     or other financial services, or otherwise;
       ``(F) describe the extent to which foreign financial 
     services institutions and other persons from foreign 
     countries purchase or otherwise facilitate the marketing from 
     the United States of government and private debt instruments 
     and private equity instruments;
       ``(G) describe how the interdependence of the financial 
     services sectors of the United States and foreign countries 
     affects the autonomy and effectiveness of United States 
     monetary policy;
       ``(H) describe the extent to which United States companies 
     rely on financing by or through foreign financial services 
     institutions and the consequences of such reliance (including 
     disclosure of proprietary information) for the industrial 
     competitiveness and national security of the United States;
       ``(I) describe the extent to which foreign financial 
     services institutions, in purchasing high technology products 
     such as computers and telecommunications equipment, favor 
     manufacturers from their home countries over United States 
     manufacturers; and
       ``(J) contain other appropriate information relating to the 
     results of the investigation required by subsection (a).
       ``(c) Definitions.--For purposes of this section the 
     following definitions shall apply:
       ``(1) Depository institution and depository institution 
     holding company.--The terms `depository institution' and 
     `depository institution holding company' have the same 
     meanings as in section 3 of the Federal Deposit Insurance 
     Act.
       ``(2) Federal banking agencies.--The term `Federal banking 
     agencies' has the same meaning as in section 3 of the Federal 
     Deposit Insurance Act.
       ``(3) Financial services institution.--The term `financial 
     services institution' means--
       ``(A) a broker, dealer, underwriter, clearing agency, 
     transfer agent, or information processor with respect to 
     securities, including government and municipal securities;
       ``(B) an investment company, investment manager, investment 
     adviser, indenture trustee, or any depository institution, 
     insurance company, or other organization operating as a 
     fiduciary, trustee, underwriter, or other financial services 
     provider;
       ``(C) any depository institution or depository institution 
     holding company; and
       ``(D) any other entity providing financial services.
       ``(4) Secretary.--The term `Secretary' means the Secretary 
     of the Treasury.''.

     SEC. 506. FEDERAL RESERVE REPORT ON THE FOREIGN BANK 
                   SUPERVISION ENHANCEMENT ACT OF 1991.

       The Federal Reserve shall submit to the House and Senate 
     Banking Committees within 60 days of enactment of this 
     legislation a report on the Foreign Bank Supervision 
     Enhancement Act of 1991 including:
       (a) the number of applicants received and from what 
     countries;
       (b) the number of applications approved and from what 
     countries;
       (c) the amount of time taken on each application between 
     receipt and approval or rejection of the application;
       (d) other agencies involved in the approval process, how 
     much time is taken by those agencies, and any problems 
     encountered with these agencies;
       (e) coordination of processing applications and length of 
     time for processing between the regional bank's and the 
     Federal Reserve Board's staffs;
       (f) efforts to define consolidated home country supervision 
     on an international basis, and
       (g) suggestions for streamlining the process.

     SEC. 507. CONFORMING AMENDMENTS.

       (a) Reports on Foreign Treatment of United States Financial 
     Institutions.--Section 3602 of the Omnibus Trade and 
     Competitiveness Act of 1988 (22 U.S.C. 5352) is amended--
       (1) in the first sentence, by inserting ``with updates on 
     significant developments every 2 years following submission 
     of the 1994 report,'' before ``the Secretary of the 
     Treasury''; and
       (2) by adding at the end the following: ``For purposes of 
     this section, a foreign country denies national treatment to 
     United States entities unless the foreign country offers such 
     entities the same competitive opportunities (including 
     effective market access) as are available to the domestic 
     entities of the foreign country.''.
       (b) Negotiations To Promote Fair Trade in Financial 
     Services.--Section 3603(a)(1) of the Omnibus Trade and 
     Competitiveness Act of 1988 (22 U.S.C. 5353(a)(1)) is amended 
     by inserting ``effective'' before ``access''.
       (c) Primary Dealers in Government Debt Instruments.--
     Section 3502(b)(1) of the Omnibus Trade and Competitiveness 
     Act of 1988 (22 U.S.C. 5342(b)(1)) is amended--
       (1) by striking ``does not accord to'' and inserting ``does 
     not offer''; and
       (2) by striking ``as such country accords to'' and 
     inserting ``(including effective market access) as are 
     available to''.
       (d) Conforming Amendments to the Securities Exchange Act of 
     1934.--
       (1) Section 15.--Section 15(b)(1) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78o(b)(1)) is amended by 
     adding at the end the following: ``The Commission may suspend 
     consideration, deny registration, issue an order, or revoke 
     registration, as provided in section 403(e)(1) of the Fair 
     Trade in Financial Services Act of 1994.''.
       (2) Section 15b.--Section 15B(a)(2) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78o-4(a)(2)) is amended by 
     adding at the end the following: ``The Commission may suspend 
     consideration, deny registration, issue an order, or revoke 
     registration, as provided in section 403(e)(1) of the Fair 
     Trade in Financial Services Act of 1994.''.
       (3) Section 15c.--Section 15C(a)(2) of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78o-5(a)(2)) is amended by 
     adding at the end the following: ``The Commission may suspend 
     consideration, deny registration, issue an order, or revoke 
     registration, as provided in section 403(e)(1) of the Fair 
     Trade in Financial Services Act of 1994.''.
       (e) Conforming Amendment to the Investment Company Act of 
     1940.--Section 8 of the Investment Company Act of 1940 (15 
     U.S.C. 80a-8) is amended by adding at the end the following 
     new subsection:
       ``(g) The Commission may suspend consideration, deny 
     registration, issue an order, or revoke registration, as 
     provided in section 403(e)(1) of the Fair Trade in Financial 
     Services Act of 1994.''.
       (f) Conforming Amendment to the Investment Advisers Act of 
     1940.--Section 203(c)(2) of the Investment Advisers Act of 
     1940 (15 U.S.C. (c)(2)) is amended by adding at the end the 
     following: ``The Commission may suspend consideration, deny 
     registration, issue an order, or revoke registration, as 
     provided in section 403(e)(1) of the Fair Trade in Financial 
     Services Act of 1994.''.
               TITLE VI--NATIONAL FLOOD INSURANCE REFORM

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``National Flood Insurance 
     Reform Act of 1994''.

     SEC. 602. CONGRESSIONAL FINDINGS.

       The Congress finds that--
       (1) the 4 principal objectives of the National Flood 
     Insurance Program are to limit increasing flood control and 
     disaster relief expenditures, to provide a prefunded 
     mechanism to more fully indemnify victims of flood-related 
     disasters, to limit unwise development in floodplains, and to 
     provide affordable Federal flood insurance for structures 
     located in areas of special flood hazards;
       (2) since 1968, the National Flood Insurance Program has 
     reduced the need for taxpayer funded disaster assistance and 
     has been a factor in motivating local government mitigation 
     efforts.
       (3) repetitively damaged properties represent a substantial 
     problem for the National Flood Insurance Program, with over 
     40 percent of all flood insurance claims made on properties 
     that have been damaged more than once;
       (4) the problem of erosion warrants greater analysis;
       (5) reforms in the National Flood Insurance Program are 
     essential to increase participation in the Program, make the 
     Program more actuarially sound, decrease the risk of losses 
     to the United States Treasury, and address the problem of 
     properties repetitively damaged by floods;
       (6) a Federal flood insurance program that combines 
     predisaster mitigation efforts together with an insurance and 
     compliance program will reduce the physical and economic 
     effects of flood-related damage on the Federal Government, 
     State and local governments, and individuals;
       (7) requiring regulated lending institutions, government 
     agencies, and government-sponsored enterprises to make sure 
     that flood insurance coverage is purchased on all properties 
     in areas of special flood hazards in participating 
     communities will increase compliance with the program, and 
     increase the pool of funds, thereby decreasing the impact on 
     the National Flood Insurance Fund of individual flood events;
       (8) incentives in the form of reduced premium rates for 
     flood insurance under the National Flood Insurance Program 
     should be provided in communities that have adopted and 
     enforced exemplary or particularly effective measures for 
     comprehensive floodplain management; and
       (9) these community-based, individual mitigation, and loss 
     prevention methods and incentives should be incorporated into 
     the National Flood Insurance Program.

     SEC. 603. DEFINITION.

       As used in this title, the term ``Director'' means the 
     Director of the Federal Emergency Management Agency.
                        Subtitle A--Definitions

     SEC. 611. FLOOD DISASTER PROTECTION ACT OF 1973.

       (a) In General.--Section 3(a) of the Flood Disaster 
     Protection Act of 1973 (42 U.S.C. 4003(a)) is amended--
       (1) by striking paragraph (5) and inserting the following 
     new paragraph:
       ``(5) `Federal entity for lending regulation' means the 
     Board of Governors of the Federal Reserve System, the Federal 
     Deposit Insurance Corporation, the Comptroller of the 
     Currency, the Office of Thrift Supervision, the National 
     Credit Union Administration Board, and the Farm Credit 
     Administration, and with respect to a particular regulated 
     lending institution means the entity primarily responsible 
     for the supervision of the institution;'';
       (2) in paragraph (6), by striking the period at the end and 
     inserting a semicolon; and
       (3) by inserting after paragraph (6) the following new 
     paragraphs:
       ``(7) `regulated lending institution' means a bank, savings 
     association, credit union, farm credit bank, Federal land 
     bank association, production credit association, or similar 
     institution subject to the supervision of a Federal entity 
     for lending regulation;
       ``(8) `Federal agency lender' means the Federal Housing 
     Administration, the Farmers Home Administration, the Small 
     Business Administration, and the Veterans' Administration, 
     when such agency makes loans secured by improved real estate 
     or a manufactured home; and
       ``(9) `servicer' means a person who receives any scheduled 
     periodic payments from a borrower pursuant to the terms of 
     any loan secured by a lien on real property, and who makes 
     the payments of principal and interest and such other 
     payments with respect to the amounts received from the 
     borrower as may be required.''.
       (b) Conforming Amendments.--
       (1) Requirements to purchase flood insurance.--Section 
     102(b) of the Flood Disaster Protection Act of 1973 (42 
     U.S.C. 4012a(b)) is amended by striking ``(b) Each Federal 
     instrumentality responsible for the supervision, approval, 
     regulation, or insuring of banks, savings and loan 
     associations, or similar institutions shall by regulation 
     direct such institutions'' and inserting the following:
       ``(b) Flood Insurance Purchase Requirements.--Each Federal 
     entity for lending regulation shall by regulation direct 
     regulated lending institutions''.
       (2) Effect of nonparticipation in flood insurance 
     program.--Section 202(b) of the Flood Disaster Protection Act 
     of 1973 (42 U.S.C. 4106(b)) is amended by striking ``Federal 
     instrumentality described in such section shall by regulation 
     require the institutions'' and inserting ``Federal entity for 
     lending regulation (with respect to regulated lending 
     institutions)''.

     SEC. 612. NATIONAL FLOOD INSURANCE ACT OF 1968.

       (a) In General.--Section 1370(a) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4121(a)) is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) in paragraph (6), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(7) the term `Federal entity for lending regulation' 
     means the Board of Governors of the Federal Reserve System, 
     the Federal Deposit Insurance Corporation, the Comptroller of 
     the Currency, the Office of Thrift Supervision, and the 
     National Credit Union Administration Board, and with respect 
     to a particular regulated lending institution, means the 
     entity primarily responsible for the supervision of the 
     institution;
       ``(8) the term `regulated lending institution' means a 
     bank, savings association, credit union, farm credit bank, 
     Federal land bank association, production credit association, 
     or similar institution subject to the supervision of a 
     Federal entity for lending regulation;
       ``(9) the term `Federal agency lender' means the Federal 
     Housing Administration, the Farmers Home Administration, the 
     Small Business Administration, and the Veterans' 
     Administration, when such agency makes loans secured by 
     improved real estate or a manufactured home;
       ``(10) the term `natural and beneficial floodplain 
     functions' means--
       ``(A) the functions associated with the natural or 
     relatively undisturbed floodplain that moderate flooding, 
     retain flood waters, reduce erosion and sedimentation, 
     mitigate the effects of waves and storm surge from storms; 
     and
       ``(B) ancillary beneficial functions, including maintenance 
     of water quality, and recharge of ground water

     that reduce flood related damage;
       ``(11) the term `erosion control measures' means a 
     community's efforts to control erosion through nonstructural 
     and structural projects;
       ``(12) the term `repetitive loss structure' means an 
     insured property that has incurred flood-related damage on 2 
     occasions during a 10-year period ending on the date of the 
     event for which a second claim is made, in which the cost of 
     repair, on the average, equaled or exceeded 25 percent of the 
     value of the structure at the time of each flood event;
       ``(13) the term `cost of compliance with land use and 
     control measures' means--
       ``(A) the cost of elevating or floodproofing a structure so 
     that the structure is in compliance with the minimum 
     performance standards adopted by the State or community 
     pursuant to section 1315 of the National Flood Insurance Act 
     of 1968, or
       ``(B) the cost of relocation or demolition of the structure 
     if the Director demonstrates that the structure will collapse 
     or subside as a result of erosion within 30 years based on 
     State erosion data;
       ``(14) the term `servicer' means any person who receives 
     any scheduled periodic payments from a borrower pursuant to 
     the terms of any loan secured by a lien on real property, and 
     who makes the payments of principal and interest and such 
     other payments with respect to the amounts received from the 
     borrower as may be required.''.
       (b) Conforming Amendment.--Section 1322(d) of the National 
     Flood Insurance Act of 1968 (42 U.S.C. 4029(d)) is amended by 
     striking ``federally supervised, approved, regulated or 
     insured financial institution'' and inserting ``regulated 
     lending institution''.
           Subtitle B--Compliance and Increased Participation

     SEC. 621. EXPANDED FLOOD INSURANCE PURCHASE REQUIREMENTS.

       (a) In General.--Section 102(b) of the Flood Disaster 
     Protection Act of 1973 (42 U.S.C. 4012a(b)), as amended by 
     section 611(b)(1), is amended--
       (1) by striking ``Each Federal entity'' and inserting the 
     following:
       ``(1) In general.--Each Federal entity'';
       (2) by inserting before ``shall by regulation'' the 
     following: ``(after consultation and coordination with the 
     Federal Financial Institutions Examination Council 
     established under the Federal Financial Institutions 
     Examination Council Act of 1974)''; and
       (3) by adding at the end the following new paragraphs:
       ``(2) Procedures implemented by fnma, fhlmc, and famc.--The 
     Federal National Mortgage Association, the Federal Home Loan 
     Mortgage Corporation, and the Federal Agricultural Mortgage 
     Corporation shall implement procedures reasonably designed to 
     assure that each loan that is--
       ``(A) secured by improved real estate or a manufactured 
     home located in an area that has been identified at the time 
     of the origination of the loan by the Director as an area of 
     special flood hazards and in which flood insurance is 
     available under the National Flood Insurance Act of 1968; and
       ``(B) purchased by any such entity;

     is covered for the term of the loan by flood insurance in the 
     amount provided in paragraph (1).
       ``(3) Procedures implemented by federal agency lenders.--
     Each Federal agency lender shall implement procedures 
     reasonably designed to assure that all property--
       ``(A) that secures loans that the Federal agency lender 
     makes, increases, extends, or renews; and
       ``(B) that is improved by real estate or a manufactured 
     home located in an area that has been identified at the time 
     of the origination of the loan by the Director as an area of 
     special flood hazards and in which flood insurance is 
     available under the National Flood Insurance Act of 1968;

     is covered for the term of the loan by flood insurance in the 
     amount provided in paragraph (1).
       ``(4) Definition.--For purposes of this section property 
     improved by real estate means insurable improvements on that 
     property.''.
       (b) Effective Date.--The provisions of this section shall 
     apply to all transactions occurring after the expiration of 
     the 1-year period beginning on the date of enactment of this 
     title.

     SEC. 622. ESCROW OF FLOOD INSURANCE PAYMENTS.

       (a) In General.--Section 102 of the Flood Disaster 
     Protection Act of 1973 (42 U.S.C. 4012a) is amended by adding 
     at the end the following new subsection:
       ``(d) Escrow of Flood Insurance Payments.--
       ``(1) By regulated lending institutions.--Each Federal 
     entity for lending regulation, after consultation and 
     coordination with the Federal Financial Institutions 
     Examination Council, shall by regulation require that, if a 
     regulated lending institution requires the escrowing of 
     taxes, insurance premiums, fees, or any other charges for a 
     loan secured by residential real estate or manufactured 
     homes, all charges for flood insurance under this title for 
     the property shall be paid by the borrower to the institution 
     for the duration of the period during which the regulated 
     lending institution maintains an escrow account. Upon receipt 
     of a notice from the Director or the provider of the 
     insurance that insurance premiums, fees, or other charges are 
     due, the institution shall pay from the escrow account to the 
     provider of the insurance the amount of insurance premiums, 
     fees, or other charges owed.
       ``(2) By federal agency lenders.--If a Federal agency 
     lender requires the escrowing of taxes, insurance premiums, 
     fees, or any other charges, then any charges for flood 
     insurance under this title for the residential real estate or 
     the manufactured home shall be paid by the borrower to the 
     Federal agency lender for the duration of the period during 
     which the Federal agency lender maintains an escrow account. 
     Upon receipt of a notice from the Director or the provider of 
     the insurance that insurance premiums, fees, or other charges 
     are due, the Federal agency lender shall pay from the escrow 
     account to the provider of the insurance the amount of 
     insurance premiums, fees or other charges owed.
       ``(3) Applicability of real estate settlement procedures 
     act.--Escrow accounts used to collect flood insurance 
     premiums, fees, or other charges under this subsection shall 
     be subject to the provisions of section 10 of the Real Estate 
     Settlement Procedures Act of 1974.''.
       (b) Applicability.--Section 102(d) of the Flood Disaster 
     Protection Act of 1973, as added by subsection (a), shall 
     apply with respect to any loan made, increased, extended, or 
     renewed after the expiration of the 1-year period beginning 
     on the date of enactment of this title.

     SEC. 623. NOTICE REQUIREMENTS.

       Section 1364 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4104a) is amended to read as follows:

     ``SEC. 1364. NOTICE REQUIREMENTS.

       ``(a) Lending Institutions.--Each Federal entity for 
     lending regulation, after consultation and coordination with 
     the Federal Financial Institutions Examination Council, shall 
     by regulation require that before a regulated lending 
     institution makes, increases, extends, or renews a loan 
     secured by improved real estate or a manufactured home 
     located in an area that has been identified by the Director 
     as an area of special flood hazards, the institution shall 
     notify the borrower of the special flood hazards and of the 
     need to purchase and maintain flood insurance.
       ``(b) Federal Agency Lenders.--Before a Federal agency 
     lender makes, increases, extends, or renews a loan secured by 
     improved real estate or a manufactured home located in an 
     area that has been identified by the Director as an area of 
     special flood hazards, the Federal agency lender shall notify 
     the borrower of the special flood hazards and of the need to 
     purchase and maintain flood insurance.
       ``(c) Participating Communities.--The Director shall by 
     regulation require each participating community, upon 
     receiving the semiannual list prepared by the Director of all 
     revisions to and updates of flood insurance rate maps made 
     during the preceding 6 months, to determine whether any 
     properties in their community have been affected, and to 
     provide annual notice by mail, notice by publication, notice 
     on tax assessments, or notice by other reasonable method, to 
     regulated lending institutions that are known to lend in the 
     community, and to the owners of all properties newly 
     determined to be, or no longer to be, in an area of special 
     flood hazards, of the flood insurance purchase requirements 
     under section 102(b).
       ``(d) Contents of Notice.--Notification required by this 
     section shall include a warning, in a form to be established 
     by the Director, stating that the real estate or manufactured 
     home securing the loan is located in an area of special flood 
     hazards, a description of the flood insurance purchase 
     requirements under section 102(b), a statement that flood 
     insurance coverage may be purchased under the National Flood 
     Insurance Program and may also be available from private 
     insurers, and any other information that the Director 
     considers necessary to carry out the purposes of the National 
     Flood Insurance Program.''.

     SEC. 624. PLACEMENT OF FLOOD INSURANCE BY REGULATED LENDING 
                   INSTITUTION, FEDERAL AGENCY LENDER, OR 
                   SERVICER.

       (a) Required Actions by Lender.--Section 102 of the Flood 
     Disaster Protection Act of 1973 (42 U.S.C. 4012a), as amended 
     by section 622(a), is amended by adding at the end the 
     following new subsection:
       ``(e) Required Actions by Lender.--
       ``(1) Notification to borrower of lack of coverage.--If, at 
     the time of origination or at any other time during the term 
     of a loan secured by improved real estate or by a 
     manufactured home located in an area that has been identified 
     by the Director as an area of special flood hazards and in 
     which flood insurance is available under this title, a 
     regulated lending institution, Federal agency lender, or 
     servicer determines that the building or manufactured home 
     and any personal property securing the loan held or serviced 
     by the regulated lending institution, Federal agency lender, 
     or servicer is not covered by flood insurance, in an amount 
     not less than the amount required by subsection (b)(1), the 
     regulated lending institution, Federal agency lender, or 
     servicer shall notify the borrower, in a form to be 
     established by the Director, that the borrower should obtain, 
     at the borrower's expense, an amount of flood insurance that 
     is not less than the amount required by subsection (b)(1), 
     for the term of the loan. If, not later than 45 days after 
     receiving such notification, the borrower fails to purchase 
     such flood insurance, the regulated lending institution, 
     Federal agency lender, or servicer shall purchase the 
     insurance on behalf of the borrower and may charge the 
     borrower for the cost of premiums and fees incurred by the 
     regulated lending institution, Federal agency lender, or 
     servicer in purchasing the insurance.
       ``(2) Review.--
       ``(A) By the director.--A borrower may request, based upon 
     the submission of supporting technical data, that the 
     Director review a determination that the improved real estate 
     or manufactured home securing the loan is located in an area 
     of special flood hazards. Not later than 45 days after the 
     Director receives the request, the Director shall review the 
     determination and provide the borrower with a letter stating 
     whether or not the property is in an area of special flood 
     hazards. The determination of the Director shall be final. If 
     the Director fails to respond to a request within 45 days, 
     the property shall be deemed not to be located in an area 
     having special flood hazards.
       ``(B) Insurance not required.--If a person is provided by 
     the borrower with a letter issued by the Director pursuant to 
     subparagraph (A) during the preceding 1-year period, stating 
     that the property is not in an area of special flood hazards, 
     such person shall have no obligation under this title to 
     require the purchase of flood insurance on the property.''.
       (b) Applicability.--
       (1) In general.--Except as provided in paragraph (2), 
     section 102(e) of the Flood Disaster Protection Act of 1973, 
     as added by subsection (a), shall apply to all loans 
     outstanding on or after the date of enactment of this title.
       (2) Loans regulated by the farm credit administration.--
     With respect to loans held by institutions regulated by the 
     Farm Credit Administration, section 102(e) of the Flood 
     Disaster Protection Act of 1973, as added by subsection (a), 
     shall apply only to loans originating on or after the date of 
     enactment of this title.

     SEC. 625. STANDARD FLOOD HAZARD DETERMINATION FORMS.

       (a) In General.--Chapter III of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4101 et seq.) is amended by 
     adding at the end the following new section:

     ``SEC. 1365. STANDARD FLOOD HAZARD DETERMINATION FORMS.

       ``(a) Development.--The Director, in consultation with the 
     Federal entities for lending regulation, and after notice and 
     comment, shall develop a standard flood hazard determination 
     form (hereafter in this section referred to as the 
     `determination form') for use in connection with loans 
     secured by improved real estate or a manufactured home 
     located in an area of special flood hazards and in which 
     flood insurance is available under this title. The 
     determination form may be maintained in a printed, 
     computerized, or electronic manner.
       ``(b) Design and Contents.--The determination form shall 
     state whether the property is in an area of special flood 
     hazards, the risk premium rate classification established for 
     the special flood hazard area in which the property is 
     located, the complete map and panel numbers for the property, 
     and the date of the map used for the determination. If the 
     complete map and panel numbers for the property are not 
     available because the property is not located in a community 
     that is participating in the National Flood Insurance Program 
     or because no map exists for the relevant area, the 
     determination form shall so state.
       ``(c) Required Use.--Each Federal entity for lending 
     regulation shall by regulation require the use of the 
     determination form by regulated lending institutions. Each 
     Federal agency lender shall by regulation provide for the use 
     of the determination form. The Federal National Mortgage 
     Association, the Federal Home Loan Mortgage Corporation, and 
     the Federal Agricultural Mortgage Corporation shall require 
     use of the determination form by any person from whom they 
     purchase loans.
       ``(d) Guarantees Regarding Information.--In recording 
     information on a determination form, a person may rely on 
     information provided by a third party to the extent that the 
     third party guarantees the accuracy of the information.
       ``(e) Reliance on Previous Determination.--A person or 
     institution increasing, extending, renewing, or purchasing a 
     loan may rely on a previous determination as to whether 
     property is in a special flood hazard area, if the previous 
     determination was made not more than 5 years before the date 
     of the transaction, and the basis for the previous 
     determination has been set forth on a determination form.''.
       (b) Applicability.--Section 1365 of the National Flood 
     Insurance Act of 1968, as added by subsection (a), shall 
     apply to all loans originated on or after the expiration of 
     the 6-month period beginning on the date the standard flood 
     hazard determination form is finalized by the Director.

     SEC. 626. EXAMINATIONS REGARDING COMPLIANCE BY REGULATED 
                   LENDING INSTITUTIONS.

       (a) Amendment to Federal Deposit Insurance Act.--Section 10 
     of the Federal Deposit Insurance Act (12 U.S.C. 1820) is 
     amended by adding at the end the following new subsection:
       ``(h) Flood Hazard Insurance Compliance by Insured 
     Depository Institutions Required.--
       ``(1) Examinations.--The appropriate Federal banking agency 
     shall, during each scheduled on-site examination required by 
     this section, determine whether the insured depository 
     institution is complying with the requirements of the 
     National Flood Insurance Program.
       ``(2) Report.--Not later than 1 year after the date of 
     enactment of the National Flood Insurance Reform Act of 1994, 
     and biannually thereafter for the next 4 years, each 
     appropriate Federal banking agency shall submit a report to 
     Congress on compliance by insured depository institutions 
     with the requirements of the National Flood Insurance 
     Program. The report shall include a description of the 
     methods used to determine compliance, the number of 
     institutions examined during the reporting year, a listing 
     and total number of institutions found to be in 
     noncompliance, actions taken to correct incidents of 
     noncompliance, and an analysis of compliance, including a 
     discussion of any trends, patterns, and problems, and 
     recommendations regarding reasonable actions to improve the 
     efficiency of the examinations processes.''.
       (b) Amendment to the Federal Credit Union Act.--Section 204 
     of the Federal Credit Union Act (12 U.S.C. 1784) is amended 
     by adding at the end the following new subsection:
       ``(e) Flood Hazard Insurance Compliance by Insured Credit 
     Unions Required.--
       ``(1) Examination.--The Board shall, during each 
     examination conducted under this section, determine whether 
     the insured credit union is complying with the requirements 
     of the National Flood Insurance Program.
       ``(2) Report.--Not later than 1 year after the date of 
     enactment of the National Flood Insurance Reform Act of 1994, 
     and biannually thereafter for the next 4 years, the Board 
     shall submit a report to Congress on compliance by insured 
     credit unions with the requirements of the National Flood 
     Insurance Program. The report shall include a description of 
     the methods used to determine compliance, the number of 
     insured credit unions examined during the reporting year, a 
     listing and total number of insured credit unions found to be 
     in noncompliance, actions taken to correct incidents of 
     noncompliance, and an analysis of compliance, including a 
     discussion of any trends, patterns, and problems, and 
     recommendations regarding reasonable actions to improve the 
     efficiency of the examinations processes.''.

     SEC. 627. PENALTIES AND CORRECTIVE ACTIONS FOR FAILURE TO 
                   REQUIRE FLOOD INSURANCE, ESCROW, OR NOTIFY.

       Section 102 of the Flood Disaster Protection Act of 1973 
     (42 U.S.C. 4012a), as amended by sections 622 and 624, is 
     amended by adding at the end the following new subsections:
       ``(f) Civil Penalties.--
       ``(1) In general.--A regulated lending institution that is 
     found to have a pattern or practice of violating this section 
     may be assessed a civil penalty by the appropriate Federal 
     entity for lending regulation of not more than $350 for each 
     such violation. A penalty under this subsection may be issued 
     only after notice and an opportunity for a hearing on the 
     record.
       ``(2) Total amount.--The total amount of penalties assessed 
     under this subsection against a single regulated lending 
     institution for any calendar year may not exceed $100,000.
       ``(3) Sales or transfers.--The subsequent sale or other 
     transfer of a loan by a regulated lending institution that 
     has committed a violation of this section shall not affect 
     the liability of the transferring institution with respect to 
     any penalty under this subsection. An institution shall not 
     be liable for a violation relating to a loan committed by 
     another institution that previously held the loan.
       ``(4) 3-year limit.--No penalty may be imposed under this 
     subsection after the expiration of the 3-year period 
     beginning on the date of the occurrence of the violation.
       ``(g) Additional Actions.--If a Federal entity for lending 
     regulation determines--
       ``(1) that a regulated lending institution has demonstrated 
     a pattern and practice of noncompliance in violation of the 
     regulations issued pursuant to subsection (b) or subsection 
     (d) or the notice requirements under section 1364 of the 
     National Flood Insurance Act of 1968; and
       ``(2) that the regulated lending institution has not 
     demonstrated measurable improvement in compliance despite the 
     issuance of penalties under subsection (f);

     the agency may require the regulated lending institution to 
     take such remedial actions as are necessary to ensure that 
     the regulated lending institution is in satisfactory 
     compliance with the requirements of the National Flood 
     Insurance Program.''.

     SEC. 628. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.

       Section 1006 of the Federal Financial Institutions 
     Examination Council Act of 1978 (12 U.S.C. 3305) is amended 
     by adding at the end the following new subsection:
       ``(g) Flood Insurance.--The Council shall consult with and 
     assist the Federal entities for lending regulation, as such 
     term is defined in section 1370(a)(7) of the National Flood 
     Insurance Act of 1968, in developing and coordinating uniform 
     standards and requirements for use by regulated lending 
     institutions under the National Flood Insurance Program.''.

     SEC. 629. CONFORMING AMENDMENT.

       The section heading for section 102 of the Flood Disaster 
     Protection Act of 1973 (42 U.S.C. 4012a) is amended to read 
     as follows:


   ``flood insurance purchase and compliance requirements and escrow 
                              accounts''.

Subtitle C--Ratings and Incentives for Community Floodplain Management 
                                Programs

     SEC. 631. COMMUNITY RATING SYSTEM AND INCENTIVES FOR 
                   COMMUNITY FLOODPLAIN MANAGEMENT.

       (a) Requirement for Participation in Flood Insurance 
     Program.--Section 1315 of the National Flood Insurance Act of 
     1968 (42 U.S.C. 4022) is amended--
       (1) by striking the section heading and inserting the 
     following:

     ``SEC. 1315. STATE AND LOCAL LAND USE CONTROLS.'';

       (2) by striking ``After December'' and inserting the 
     following:
       ``(a) Requirement for Participation in Flood Insurance 
     Program.--After December''; and
       (3) by adding at the end the following new subsection:
       ``(b) Community Rating System and Incentives for Community 
     Floodplain Management.--
       ``(1) Authority and goals.--The Director shall carry out a 
     community rating system program to evaluate the measures 
     adopted by communities voluntarily participating in the 
     community rating system, to provide incentives for measures 
     to reduce the risk of flood or erosion damage that exceed the 
     criteria set forth in section 1361, to encourage adoption of 
     more effective measures to protect natural and beneficial 
     floodplain functions, floodplain and erosion management, and 
     to promote the reduction of Federal flood insurance losses.
       ``(2) Incentives.--The program shall provide incentives in 
     the form of credits on premium rates for flood insurance 
     coverage in communities that the Director determines have 
     adopted and enforced measures to reduce the risk of flood and 
     erosion damage that exceed the criteria set forth in section 
     1361. In providing incentives under this paragraph, the 
     Director may provide for credits to flood insurance premium 
     rates in communities that the Director determines have--
       ``(A) implemented measures to protect natural and 
     beneficial floodplain functions; and
       ``(B) adopted erosion control measures.
       ``(3) Credits.--The credits on premium rates for flood 
     insurance coverage shall be based on the estimated reduction 
     in flood and erosion damage risks resulting from the measures 
     adopted by the community under this program. If a community 
     has received mitigation assistance under section 1366, the 
     credits shall be phased-in as determined by the Director.''.
       (b) Reports.--Two years after the date of enactment of this 
     title and biannually thereafter, the Director shall submit a 
     report to the Congress regarding the program under section 
     1315(a) of the National Flood Insurance Act of 1968. Each 
     report shall include an analysis of the cost-effectiveness 
     and other accomplishments and shortcomings of the program and 
     any recommendations of the Director for legislation regarding 
     the program.

     SEC. 632. FUNDING.

       Section 1310(a) of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4017(a)) is amended--
       (1) in paragraph (4), by striking ``and'' at the end;
       (2) in paragraph (5), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding after paragraph (5) the following new 
     paragraph:
       ``(6) for carrying out the program under section 
     1315(b);''.

     SEC. 633. REASONABLE FEES.

       A lender may charge a borrower a reasonable fee for making 
     a flood insurance determination.
           Subtitle D--Mitigation of Flood and Erosion Risks

     SEC. 641. MITIGATION ASSISTANCE IN FEDERAL INSURANCE 
                   ADMINISTRATION.

       Section 1105(a) of the Housing and Urban Development Act of 
     1968 (42 U.S.C. 4129) is amended--
       (1) by striking ``(a) There is hereby'' and inserting the 
     following:
       ``(a) Establishment.--There is hereby''; and
       (2) by striking subsection (b) and inserting the following:
       ``(b) Coordination of Mitigation Activities.--The Director 
     shall coordinate all mitigation activities, including the 
     administration of the program for mitigation assistance under 
     section 1367. These activities shall include the development 
     and implementation of various mitigation activities and 
     techniques, the provision of advice and assistance regarding 
     mitigation to States, communities, and individuals, including 
     planning assistance under section 1367(d), coordination with 
     other Federal flood and erosion mitigation efforts, and 
     coordination with State and local governments and public and 
     private agencies and organizations for collection and 
     dissemination of information regarding erosion.''.

     SEC. 642. AUTHORIZATION OF NATIONAL FLOOD AND EROSION 
                   MITIGATION FUNDS UNDER SECTION 1362.

       Chapter III of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4101 et seq.), as amended by section 625, is amended 
     by adding at the end the following new section:

     ``SEC. 1366. NATIONAL FLOOD AND EROSION MITIGATION PROGRAM.

       ``(a) Expenditures.--For flood and erosion mitigation 
     activities authorized under section 1367, the Director may 
     expend from the National Flood Insurance Fund--
       ``(1) up to $10,000,000 in the fiscal year ending September 
     30, 1994;
       ``(2) up to $15,000,000 in the fiscal year ending September 
     30, 1995;
       ``(3) up to $20,000,000 in the fiscal year ending September 
     30, 1996;
       ``(4) up to $20,000,000 in each fiscal year thereafter; and
       ``(5) any amounts recaptured under section 1367(i).
       ``(b) Report.--Not later than 1 year after the date of 
     enactment of the National Flood Insurance Reform Act of 1994 
     and biannually thereafter, the Director shall submit a report 
     to the Congress describing the status of flood and erosion 
     mitigation activities carried out with funds authorized under 
     this section.''.

     SEC. 643. STATE AND COMMUNITY MITIGATION ASSISTANCE PROGRAM.

       (a) In General.--Chapter III of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4101 et seq.), as amended by 
     sections 625 and 642, is amended by adding at the end the 
     following new section:

     ``SEC. 1367. STATE AND COMMUNITY MITIGATION ASSISTANCE.

       ``(a) Authority.--The Director shall develop and implement 
     a financial assistance program with amounts made available 
     under section 1366 to States and communities for planning and 
     activities designed to reduce the risk of flood and erosion 
     damage to insured structures and to protect natural and 
     beneficial floodplain functions.
       ``(b) Mitigation Plan Requirement.--To be eligible to 
     receive financial mitigation assistance, a State or community 
     shall develop, and have approved by the Director, a flood and 
     erosion risk mitigation plan (hereafter in this section 
     referred to as a `mitigation plan'), that is consistent with 
     the criteria established by the Director under section 1361. 
     The mitigation plan shall include a comprehensive strategy 
     for mitigation activities adopted by the State or community 
     following a public hearing.
       ``(c) Notification of Approval.--Not later than 120 days 
     after the submission of a mitigation plan, the Director shall 
     notify the State or community submitting the plan of the 
     Director's approval or disapproval of the plan. If the 
     Director does not approve a plan, the Director shall notify 
     the State or community in writing of the reasons for such 
     disapproval.
       ``(d) Planning Assistance.--
       ``(1) In general.--The Director shall make planning 
     assistance available to States and communities for developing 
     mitigation plans.
       ``(2) Funding.--From any amounts made available for use 
     under section 1366 of the National Flood Insurance Act of 
     1968 in any fiscal year, the Director may use not more than 
     $1,500,000 to provide planning assistance grants to States or 
     communities to develop mitigation plans under this 
     subsection.
       ``(3) Limitations.--
       ``(A) Timing.--A grant for planning assistance may be 
     awarded to a State or community once every 5 years and each 
     grant may cover a period of 1 to 3 years.
       ``(B) Amount.--A grant for planning assistance may not 
     exceed--
       ``(i) $150,000, to any State; or
       ``(ii) $50,000, to any community.
       ``(C) Geographic.--Not more than $300,000 may be awarded to 
     any 1 State and all communities located in that State for 
     planning assistance in each fiscal year.
       ``(e) Eligible Mitigation Activities.--The Director shall 
     determine eligibility for assistance under this section for 
     mitigation activities that shall be technically feasible and 
     cost-effective. These activities may include--
       ``(1) elevation, relocation, demolition, or floodproofing 
     of structures;
       ``(2) the construction, repair, or restoration of levees, 
     seawalls, and other structures that reduce the risk of flood 
     damage;
       ``(3) erosion control measures including beach nourishment;
       ``(4) acquisition by States and communities of property 
     substantially damaged by flood for public use as the Director 
     determines is consistent with sound land management and use 
     in such area; and
       ``(5) the provision of technical assistance by States to 
     communities and individuals to conduct eligible mitigation 
     activities.
       ``(f) Limitations on Mitigation Assistance.--
       ``(1) Amount.--The amount of mitigation assistance provided 
     under subsection (e) may not exceed in any 5-year period--
       ``(A) $10,000,000, to any State; or
       ``(B) $3,300,000, to any community.
       ``(2) Geographic.--Not more than $20,000,000 may be awarded 
     to any 1 State and all communities located in that State for 
     mitigation assistance in any 5-year period.
       ``(g) Matching Requirement.--The Director may provide 
     mitigation assistance to a State or community in an amount 
     not to exceed 3 times the amount that the State or community 
     certifies, as the Director shall require, that the State or 
     community will contribute from other funds to carry out 
     mitigation planning under subsection (d) and eligible 
     activities under subsection (e).
       ``(h) Oversight of Mitigation Plans.--The Director shall 
     conduct oversight of recipients of mitigation assistance to 
     ensure that the mitigation assistance is used in compliance 
     with approved plans.
       ``(i) Recapture.--If the Director determines that a State 
     or community that has received mitigation assistance has not 
     carried out the mitigation activities as set forth in the 
     mitigation plan, the Director shall recapture any unexpended 
     amounts and deposit the amounts in the Fund.
       ``(j) Definition of Community.--For purposes of this 
     section, the term `community' means a political subdivision 
     that has zoning and building code jurisdiction over a 
     particular area of special flood hazards, and that is 
     participating in the National Flood Insurance Program.
       ``(k) Preferences for Mitigation Grants to Communities.--
       ``(1) Cost-Benefificial Plans.--In providing mitigation 
     grants to communities under this section, the Director shall 
     give preference to communities with mitigation plans that are 
     the most cost-beneficial to the Flood Insurance Fund.
       ``(2) Additional Criteria.--Subject to paragraph (1), the 
     Director will also give preference to communities that--
       ``(A) have the highest rates of participation by property 
     owners in the Federal flood insurance program;
       ``(B) have qualified for credits on premium rates under 
     section 1315(b); and
       ``(C) have experienced repetitive losses that have been 
     most costly to the Fund.''.
       (b) Regulations.--Not later than 6 months after date of 
     enactment of this title, the Director shall issue regulations 
     implementing section 1367 of the National Flood Insurance Act 
     of 1968, as added by subsection (a).

     SEC. 644. REPEAL OF PROGRAM FOR PURCHASE OF CERTAIN INSURED 
                   PROPERTIES.

       (a) Repeal.--Section 1362 of the National Flood Insurance 
     Act of 1968 (42 U.S.C. 4103) is repealed.
       (b) Transition.--Notwithstanding the repeal under 
     subsection (a), the Director may continue to purchase 
     property under subsections (a) and (b) of section 1362 of the 
     National Flood Insurance Act of 1968, as such section existed 
     immediately before the date of enactment of this title, for a 
     period of 1 year beginning on the date of enactment of this 
     title.

     SEC. 645. TERMINATION OF EROSION THREATENED STRUCTURES 
                   PROGRAM.

       (a) In General.--Section 1306 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4013) is amended by striking 
     subsection (c).
       (b) Transition.--The Director may pay amounts under flood 
     insurance contracts for demolition or relocation of 
     structures as provided in section 1306(c) of the National 
     Flood Insurance Act of 1968 (as in effect immediately before 
     the date of enactment of this title) only during the 1-year 
     period beginning on the date of enactment of this title.

     SEC. 646. CONGRESSIONAL FINDINGS AND DECLARATION OF PURPOSE 
                   UNDER THE NATIONAL FLOOD INSURANCE ACT OF 1968.

       Section 1302 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4001) is amended by striking subsection (g).
                 Subtitle E--Flood Insurance Task Force

     SEC. 651. FLOOD INSURANCE INTERAGENCY TASK FORCE.

       (a) Establishment.--There is established an interagency 
     task force to be known as the Flood Insurance Task Force 
     (hereafter in this title referred to as the ``Task Force'').
       (b) Membership.--
       (1) In general.--The Task Force shall consist of 13 
     members, who shall be the designees of--
       (A) the Director;
       (B) the Federal Housing Commissioner;
       (C) the Secretary of Veterans Affairs;
       (D) the Administrator of the Farmers Home Administration;
       (E) the Administrator of the Small Business Administration;
       (F) each member of the Federal Financial Institutions 
     Examination Council;
       (G) the chairman of the Board of Directors of the Federal 
     Home Loan Mortgage Corporation;
       (H) the chairman of the Board of Directors of the Federal 
     National Mortgage Association; and
       (I) the chairman of the Federal Agricultural Mortgage 
     Corporation.
       (2) Qualifications.--Members of the Task Force shall be 
     designated for membership on the Task Force by reason of 
     demonstrated knowledge and competence regarding the National 
     Flood Insurance Program.
       (c) Duties.--The Task Force shall--
       (1) make recommendations to the head of each Federal agency 
     and corporation referred to under subsection (b)(1) regarding 
     the establishment or adoption of standardized enforcement 
     procedures among such agencies and corporations responsible 
     for enforcing compliance with the requirements under the 
     National Flood Insurance Program to ensure the fullest 
     possible compliance with such requirements;
       (2) study the extent to which Federal agencies and the 
     secondary mortgage market can provide assistance in ensuring 
     compliance with the requirements under the National Flood 
     Insurance Program;
       (3) study the extent to which existing programs of Federal 
     agencies and corporations for compliance with the 
     requirements under the National Flood Insurance Program can 
     serve as a model for other Federal agencies responsible for 
     enforcing compliance, and submit to the Congress a report 
     describing the study and any conclusions;
       (4) study--
       (A) the extent to which the flood insurance premium rate 
     structure could be revised to--
       (i) minimize existing premium rate subsidies;
       (ii) reduce or eliminate disaster assistance payments in 
     high-risk erosion areas;
       (iii) incorporate premium rate adjustments for erosion 
     hazards; and
       (iv) account for catastrophic loss events; and
       (B) how changes in the premium rate structure could 
     potentially impact other Federal disaster assistance 
     programs;
       (5) propose strategies to establish an actuarial-based 
     premium structure to account for all insurable risks 
     identified under the National Flood Insurance Act of 1968, as 
     amended by this title; and
       (6) develop guidelines regarding enforcement and compliance 
     procedures, based on the studies and findings of the Task 
     Force and publishing the guidelines in a usable format.
       (d) Reports.--Not later than 2 years after the date of 
     enactment of this title, the Task Force shall transmit to the 
     Congress a report describing its studies and any conclusions.
       (e) Compensation.--Members of the Task Force shall receive 
     no additional compensation by reason of their service on the 
     Task Force.
       (f) Chairperson.--The Director shall select 1 member to 
     serve as the chairperson of the Task Force (hereafter in this 
     section referred to as the ``Chairperson'').
       (g) Meetings and Action.--The Task Force shall meet at the 
     call of the Chairperson or a majority of the members of the 
     Task Force and may take action by a vote of the majority of 
     the members. The Federal Insurance Administrator shall 
     coordinate and call the initial meeting of the Task Force.
       (h) Officers.--The Chairperson may appoint officers to 
     carry out the duties of the Task Force under subsection (c).
       (i) Staff of Federal Agencies.--Upon the request of the 
     Chairperson, the head of any of the Federal agencies and 
     corporations referred to in subsection (b)(1) may detail, on 
     a nonreimbursable basis, any of the personnel of the agency 
     to the Task Force to assist the Task Force in carrying out 
     its duties under this title.
       (j) Powers.--In carrying out this section, the Task Force 
     may hold hearings, sit and act at times and places, take 
     testimony, receive evidence and assistance, provide 
     information, and conduct research as the Task Force considers 
     appropriate.
       (k) Termination.--The Task Force shall terminate 2 years 
     after the date on which all members of the Task Force have 
     been designated under subsection (b)(1).
                  Subtitle F--Miscellaneous Provisions

     SEC. 661. MAXIMUM FLOOD INSURANCE COVERAGE AMOUNTS.

       (a) In General.--Section 1306(b) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4013(b)) is amended--
       (1) in paragraph (1)(A)--
       (A) by inserting ``and'' at the end of clause (i); and
       (B) by striking clause (iii);
       (2) by striking subparagraph (B) of paragraph (1) and 
     inserting the following new subparagraph:
       ``(B) in the case of any nonresidential property, including 
     churches--
       ``(i) $100,000 aggregate liability for each structure; and
       ``(ii) $100,000 aggregate liability for any contents 
     related to each structure;'';
       (3) by striking subparagraph (C) of paragraph (1);
       (4) in paragraph (2), by striking ``so as to enable'' and 
     all that follows through the end of the paragraph and 
     inserting ``up to an amount, including the limits specified 
     in clause (i) of paragraph (1)(A), of $250,000 multiplied by 
     the number of dwelling units in the building;'';
       (5) in paragraph (3), by striking ``so as to enable'' and 
     all that follows through the end of the paragraph and 
     inserting ``up to an amount of $90,000 for any single-family 
     dwelling and $240,000 for any residential structure 
     containing more than one dwelling unit;''; and
       (6) by striking paragraph (4) and inserting the following 
     new paragraph:
       ``(4) in the case of any nonresidential property, including 
     churches, additional flood insurance in excess of the limits 
     specified in clauses (i) and (ii) of paragraph (1)(B) shall 
     be made available to every insured upon renewal and every 
     applicant for insurance up to an amount of $2,400,000 for 
     each structure and $2,400,000 for any contents related to 
     each structure; and''.
       (b) Actuarial Risk Premiums on Repetitive Loss 
     Structures.--Section 1306(b) of the National Flood Insurance 
     Act of 1968 (42 U.S.C. 4013(b)) is amended--
       (1) in paragraph (5), by striking ``and'' at the end; and
       (2) by striking paragraph (6) and inserting the following 
     new paragraph:
       ``(6) upon determining that a property is a repetitive loss 
     structure, and after making a payment to the insured under 
     section 1304(e), the Director shall charge the applicable 
     risk premium rate for flood insurance based on consideration 
     of the risk involved and accepted actuarial principles under 
     section 1307(a)(1), except that the Director may not increase 
     the premium rate above the level authorized in paragraph (7); 
     and''.
       (c) Annual 10-Percent Premium Rate Increase Cap.--Section 
     1306(b) of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4013(b)) is amended by adding at the end the 
     following:
       ``(7) the Director may not increase the premium rate 
     applied to a structure in any 12-month period by more than 10 
     percent over the rate previously applied to that structure 
     during the preceding 12-month period.''.
       (d) Conforming Amendments.--Section 1306(b)(5) of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)(5)) 
     is amended--
       (1) by striking ``(A), (B), or (C)'' and inserting ``(A) or 
     (B)''; and
       (2) by striking ``(1)(C),''.

     SEC. 662. ADDITIONAL COVERAGE FOR COMPLIANCE WITH LAND USE 
                   AND CONTROL MEASURES.-

       (a) In General.--Section 1304 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4011) is amended--
       (1) by redesignating subsection (b) as subsection (c); and
       (2) by inserting after subsection (a) the following new 
     subsection:
       ``(b) The national flood insurance program established 
     pursuant to subsection (a) shall enable the purchase of 
     insurance to cover the cost of compliance with land use and 
     control measures for--
       ``(1) properties that are repetitive loss structures;
       ``(2) properties that have flood damage in which the cost 
     of repairs equals or exceeds 50 percent of the value of the 
     structure at the time of the flood event; and
       ``(3) properties that have sustained flood damage on 
     multiple occasions, if the Director determines that it is 
     cost-effective and in the best interests of the National 
     Flood Insurance Fund to require compliance with the land use 
     and control measures.

     The Director shall impose a surcharge on each insured of not 
     more than $50 per policy to provide cost of compliance 
     coverage in accordance with the provisions of this 
     subsection.''.
       (b) Applicability.--The provisions of subsection (a) shall 
     apply only to structures that sustain flood-related damage 
     after the date of enactment of this title.

     SEC. 663. FLOOD INSURANCE PROGRAM ARRANGEMENTS WITH PRIVATE 
                   INSURANCE ENTITIES.

       Section 1345(b) of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4081(b)) is amended by striking the period at the 
     end and inserting the following: ``and without regard to the 
     provisions of the Federal Advisory Committee Act.''.

     SEC. 664. UPDATING OF FLOOD INSURANCE RATE MAPS.

       Section 1360 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4101) is amended by adding at the end the 
     following new subsections:
       ``(e) Assessment of Need To Update Areas.--
       ``(1) Periodic assessments.--Not less than once during each 
     5-year period (the first such period beginning on the date of 
     enactment of the National Flood Insurance Reform Act of 
     1994), or more often as the Director determines necessary, 
     the Director shall assess the need to revise and update each 
     flood insurance rate map, based on an analysis of all natural 
     hazards affecting flood risks.
       ``(2) Upon request.--Upon the request of a State or 
     community stating that a flood insurance rate map needs 
     revision or updating, the Director shall review and update 
     the flood insurance rate map for the State or community. The 
     Director may require the State or community to pay a portion 
     of the cost of updating the map.
       ``(f) Availability.--To promote compliance with the 
     requirements of this title, the Director shall make flood 
     insurance rate maps and related information available free of 
     charge to Federal agencies and to State agencies directly 
     responsible for coordinating the National Flood Insurance 
     Program and to appropriate representatives of communities 
     participating in the National Flood Insurance Program, and at 
     a reasonable cost to all other persons pursuant to section 
     1310.
       ``(g) Notification.--The Director shall publish in the 
     Federal Register or by other comparable method, notice of 
     each revision to or update of a flood insurance rate map, 
     issued in the form of a Letter of Map Amendment or Letter of 
     Map Revision. Each map revision or update shall become 
     effective upon publication. Such comparable methods shall 
     include all pertinent information, provide for regular and 
     frequent distribution, and be at least as accessible to map 
     users as the Federal Register. Notices published in the 
     Federal Register, or otherwise, shall also include 
     information on how to obtain copies of the revisions or 
     updates.
       ``(h) Availability.--On March 1 and October 1 of each year, 
     the Director shall publish separately and make available in 
     their entirety within a compendium, all revisions to and 
     updates of flood insurance rate maps and all Letters of Map 
     Amendment and Letters of Map Revision that were published in 
     the Federal Register or distributed through other comparable 
     methods during the preceding 6 months, free of charge, to 
     Federal agencies, States, and communities participating in 
     the National Flood Insurance Program pursuant to section 1310 
     and at cost to all other persons.''.

     SEC. 665. EVALUATION OF EROSION HAZARDS.

       (a) In General.--As soon as practicable and not later than 
     2 years after the date of enactment of this Act, the Director 
     shall submit to Congress a report--
       (1) listing all communities that are likely to be 
     identified as having an erosion hazard areas;
       (2) estimating the amount of flood insurance claims 
     attributable to erosion;
       (3) assessing the full economic impact of erosion on the 
     National Flood Insurance Fund;
       (4) measuring the costs and benefits of expenditures 
     necessary from the National Flood Insurance Fund to complete 
     mapping of erosion hazard areas.
       (b) Authorization To Map Erosion Hazard Areas.--In 
     developing an estimate of the amount of flood insurance 
     claims attributable to erosion pursuant to subsection (a), 
     the Director is authorized to map a statistically valid and 
     representative number of communities with erosion hazard 
     areas throughout the United States, including coastal, Great 
     Lakes and riverine areas.
       (c) Economic Impact Study.--The report required under 
     subsection (a)--
       (1) shall assess the economic impact of--
       (A) erosion on communities likely to be identified as 
     having erosion hazard areas; and
       (B) the denial of flood insurance and the establishment of 
     actuarial rates in communities likely to be identified as 
     having erosion hazard areas;
       (2) shall be prepared by an independent private sector 
     firm;
       (3) provide for consultation with a statistically valid and 
     representative number of communities likely to be identified 
     as having erosion hazard areas; and
       (4) address all significant economic factors, including the 
     impact on--
       (A) the value of residential and commercial properties in 
     communities with erosion hazards;
       (B) community tax revenues due to potential changes in 
     property values or commercial activity;
       (C) employment, including the potential loss or gain of 
     existing and new jobs in the community;
       (D) existing businesses and future economic development; 
     and
       (E) the estimated cost of Federal and State disaster 
     assistance to flood victims.
       (d) Cost and Benefits of Mapping.--The report required 
     under subsection (a), shall--
       (1) measure the costs and benefits of mapping erosion 
     hazard areas based upon the Director's estimate of the actual 
     and prospective amount of flood insurance claims attributable 
     to erosion. If the Director determines that the savings to 
     the National Flood Insurance Fund will exceed the cost of 
     mapping erosion hazard areas, the Director shall assess 
     whether the expenditures to map erosion hazard areas is the 
     most cost-beneficial use of flood insurance premiums in light 
     of alternative uses of those funds, including--
       (A) funding the mitigation assistance program under section 
     1367 of the National Flood Insurance Act of 1968 (as added by 
     section 643 of this Act);
       (B) funding additional coverage for compliance with land 
     use and control measures under section 1304(b) of the 
     National Flood Insurance Act of 1968 (as added by section 662 
     of this Act); and
       (C) revising and updating flood insurance rate maps under 
     section 1360(e) of the National Flood Insurance Act of 1968 
     (as added by section 664 of this Act).
       (2) measure the costs and benefits of mapping erosion, 
     other than those directly related to the financial condition 
     of the National Flood Insurance Program, and the cost of not 
     mapping erosion.
       (e) Definition.--For purposes of this section the term 
     ``erosion hazard area'' means, based on erosion rate 
     information and other historical data available, an area 
     where erosion or avulsion is likely to result in damage to or 
     loss of buildings and infrasturcture within a 60-year period.
       (f) Authorization of Appropriation.--There are authorized 
     to be appropriated to the Director $5,000,000 to carry out 
     this section.

     SEC. 666. COORDINATION OF FLOOD INSURANCE RATE MAP REVISIONS 
                   AND UPDATES WITH COASTAL ZONE MANAGEMENT 
                   PROGRAMS.

       In General.--In the implementation of revisions to and 
     updates of flood insurance rate maps, the Director shall 
     consult and share information with the Under Secretary of 
     Commerce for Oceans and Atmosphere and representatives from 
     State coastal zone management programs.

     SEC. 667. TECHNICAL MAPPING ADVISORY COUNCIL.

       (a) Establishment.--There is established a council to be 
     known as the Technical Mapping Advisory Council (hereafter in 
     this section referred to as the ``Council'').
       (b) Membership.--
       (1) In general.--The Council shall consist of the Director, 
     or the Director's designee, and 12 additional members to be 
     appointed by the Director or his designee, and shall 
     include--
       (A) the Under Secretary of Commerce for Oceans and 
     Atmosphere (or his or her designee);
       (B) a member of recognized surveying and mapping 
     professional associations and organizations;
       (C) a member of recognized professional engineering 
     associations and organizations;
       (D) a member of recognized professional associations or 
     organizations representing flood hazard determination firms;
       (E) a representative of the United States Geologic Survey;
       (F) a representative of State geologic survey programs;
       (G) a representative of State national flood insurance 
     coordination offices;
       (H) a representative of the Federal National Mortgage 
     Association and the Federal Home Loan Mortgage Corporation; 
     and
       (I) a representative of a regulated lending institution.
       (2) Qualifications.--Members of the Council shall be 
     appointed based on their demonstrated knowledge and 
     competence regarding surveying, cartography, remote sensing, 
     geographic information systems, or the technical aspects of 
     preparing and using flood insurance rate maps.
       (c) Duties.--The Council shall--
       (1) make recommendations to the Director on how to improve 
     in a cost-effective manner the accuracy, general quality, 
     ease of use, and distribution and dissemination of flood 
     insurance rate maps;
       (2) recommend to the Director mapping standards and 
     guidelines for flood insurance rate maps; and
       (3) transmit an annual report to the Director describing--
       (A) the activities of the Council;
       (B) an evaluation of the status and performance of flood 
     insurance rate maps and mapping activities to revise and 
     update flood insurance rate maps, as established by the 
     amendments made under section 664; and
       (C) a summary of recommendations made by the Council to the 
     Director.
       (d) Chairperson.--The members of the Council shall elect 1 
     member to serve as the chairperson of the Council (hereafter 
     in this section referred to as the ``Chairperson'').
       (e) Coordination.--To ensure that the Council's 
     recommendations are consistent to the maximum extent 
     practicable with national digital spatial data collection and 
     management standards, the Chairperson shall consult with the 
     Chairperson of the Federal Geographic Data Committee 
     (established pursuant to OMB Circular A-16).
       (f) Compensation.--Members of the Council shall receive no 
     additional compensation by reason of their service on the 
     Council.
       (g) Meetings and Actions.--
       (1) In general.--The Council shall meet not less than twice 
     each year at the request of the Chairperson or a majority of 
     its members and may take action by a vote of the majority of 
     the members.
       (2) Initial meeting.--The Director, or a person designated 
     by the Director, shall request and coordinate the initial 
     meeting of the Council.
       (h) Officers.--The Chairperson may appoint officers to 
     assist in carrying out the duties of the Council under 
     subsection (c).
       (i) Staff of the Federal Emergency Management Agency.--Upon 
     the request of the Chairperson, the Director may detail, on a 
     nonreimbursable basis, personnel of the Federal Emergency 
     Management Agency to assist the Council in carrying out its 
     duties.
       (j) Powers.--In carrying out this section, the Council may 
     hold hearings, receive evidence and assistance, provide 
     information, and conduct research as it considers 
     appropriate.
       (k) Termination.--The Council shall terminate 5 years after 
     the date on which all members of the Council have been 
     appointed under subsection (b)(1).

     SEC. 668. FUNDING FOR INCREASED ADMINISTRATIVE AND 
                   OPERATIONAL RESPONSIBILITIES.

       (a) Availability of Fund.--Section 1310(a) of the National 
     Flood Insurance Act of 1968 (42 U.S.C. 4017(a)), as amended 
     by section 632, is amended in the matter preceding paragraph 
     (1), by inserting ``(except as otherwise provided)'' after 
     ``without fiscal year limitation''.
       (b) Credits of Fund.--Section 1310(b) of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4017(b)) is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) by redesignating paragraph (6) as paragraph (7); and
       (3) by inserting after paragraph (5) the following new 
     paragraph:
       ``(6) any penalties collected under section 102(f) of the 
     Flood Disaster Protection Act of 1973; and''.

     SEC. 669. SEPARATE ACCOUNT FOR NATIONAL FLOOD INSURANCE FUND.

       Section 1310(a) of the National Flood Insurance Act (42 
     U.S.C. 4017(a)) is amended by inserting before ``which shall 
     be available'' the following: ``which shall be maintained in 
     the Treasury as an account separate from any other funds 
     available to the Director, and''.

     SEC. 670. NONWAIVER OF FLOOD PURCHASE REQUIREMENT FOR 
                   RECIPIENTS OF FEDERAL DISASTER ASSISTANCE.

       Section 311(b) of the Robert T. Stafford Disaster Relief 
     and Emergency Assistance Act (42 U.S.C. 5154(b)) is amended 
     by adding at the end the following: ``The requirements of 
     this subsection may not be waived under section 301.''.

     SEC. 671. INSURANCE WAITING PERIOD.

       Section 1308 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4014) is amended by adding at the end the 
     following new subsection:
       ``(e)(1) The Director shall establish a waiting period of 
     not less than 10 days from the presentment of payment of a 
     premium for the initial purchase of flood insurance under 
     this title. Flood insurance coverage shall not be available 
     with respect to any claim for damage incurred during such 
     waiting period.
       ``(2) This subsection shall not apply to the initial 
     purchase of flood insurance under this title when the 
     purchase of insurance is in connection with the making, 
     increasing, extension, or renewal of a loan.''.

     SEC. 672. AGRICULTURAL STRUCTURES.

       Section 1361 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4102) is amended by adding at the end the 
     following new subsection:
       ``(d) Agricultural Structures.--
       ``(1) Exemption from floodway activity restrictions.--
     Notwithstanding any other provision of law, the adequate land 
     use and control measures adopted in an area (or subdivision 
     thereof) pursuant to section 1315(a) may provide, at the 
     discretion of the appropriate State or local authority, for 
     the repair and restoration to pre-damaged conditions of an 
     agricultural structure that--
       ``(A) is a repetitive loss structure; or
       ``(B) has incurred flood-related damage to the extent that 
     the cost of restoring the structure to its pre-damaged 
     condition would equal or exceed 50 percent of the market 
     value of the structure before the damage occurred.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) the term `agricultural structure' means any structure 
     used exclusively in connection with the production, 
     harvesting, storage, raising, or drying of agricultural 
     commodities; and
       ``(B) the term `agricultural commodities' means 
     agricultural commodities and livestock.''.

     SEC. 673. IMPLEMENTATION REVIEW BY THE DIRECTOR.

       Section 1320 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4027) is amended--
       (1) by striking ``The Director'' and inserting ``(a) In 
     General.--The Director''; and
       (2) by adding at the end the following new subsection:
       ``(b) Effects of Flood Insurance Program.--The Director 
     shall include, as part of the biennial report submitted under 
     subsection (a), a chapter reporting on the effects on the 
     flood insurance program observed through implementation of 
     requirements under the National Flood Insurance Reform Act of 
     1994.''.

     SEC. 674. REGULATIONS.

       The Director and the head of any appropriate Federal agency 
     may each issue any regulations necessary to carry out the 
     applicable provisions of this title and the applicable 
     amendments made by this title.

     SEC. 675. PROHIBITED FLOOD DISASTER ASSISTANCE.

       (a) General Prohibition.--Notwithstanding any other 
     provision of law, no Federal disaster relief assistance made 
     available in a flood disaster area may be used to make a 
     payment (including any loan assistance payment) to a person 
     for repair, replacement, or restoration for damage to any 
     personal, residential, or commercial property if that person 
     at any time has received flood disaster assistance that was 
     conditional on the person first having obtained flood 
     insurance under applicable Federal law and subsequently 
     having failed to obtain and maintain flood insurance as 
     required under applicable Federal law on such property.
       (b) Amendment to the Flood Disaster Protection Act of 
     1973.--Section 102(a) of the Flood Disaster Protection Act of 
     1973 (42 U.S.C. 4012a(a)) is amended--
       (1) by striking ``, during the anticipated economic or 
     useful life of the project,''; and
       (2) by adding at the end the following: ``The requirement 
     of maintaining flood insurance shall apply during the life of 
     the property, regardless of transfer of ownership of such 
     property.''.
       (c) Definition.--For purposes of this section, the term 
     ``flood disaster area'' means an area with respect to which--
       (1) the Secretary of Agriculture finds, or has found, to 
     have been substantially affected by a natural disaster in the 
     United States pursuant to section 321(a) of the Consolidated 
     Farm and Rural Development Act (7 U.S.C. 1961(a)); or
       (2) the President declares, or has declared, the existence 
     of a major disaster or emergency pursuant to the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act (42 
     U.S.C. 5121 et seq.), as a result of flood conditions 
     existing in or affecting that area.
       (d) Effective Date.--The amendments made by this section 
     shall apply to disasters declared after the date of enactment 
     of the National Flood Insurance Reform Act of 1994.
                     TITLE VII--GENERAL PROVISIONS

     SEC. 701. STUDY OF EFFECT OF THE NORTHERN SPOTTED OWL ON 
                   SMALL BUSINESS CONCERNS.

       (a) Definitions.--For purposes of this section--
       (1) the term ``Administrator'' means the Administrator of 
     the Small Business Administration; and
       (2) the term ``small business concerns'' has the same 
     meaning as in section 3 of the Small Business Act.
       (b) Business Study.--The Administrator in consultation with 
     the Secretary of the Interior shall conduct a study that 
     analyzes--
       (1) the nature and extent of economic losses to small 
     business concerns in the forest products industry that have 
     occurred as a result of the designation of the Northern 
     spotted owl as a threatened species pursuant to section 4 of 
     the Endangered Species Act of 1973, or that are reasonably 
     likely to occur in the future;
       (2) the ability of small business concerns to recoup the 
     fair market value of equipment and other property employed in 
     the harvest and processing of timber prior to the listing of 
     the Northern spotted owl as a threatened species; and
       (3) the ability of small business concerns in the affected 
     area to offer alternative products or services for which 
     there is a ready or likely suitable market.
       (c) Report.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this section, the Administrator and the 
     Secretary of the Interior shall submit a report of the 
     results of the study conducted under subsection (c) to the 
     President and to the relevant committees of the Senate and 
     the House of Representatives.
       (2) Options.--The report shall include options for Congress 
     and the President for compensating small business concerns 
     for economic losses and for promoting business transition and 
     diversification.
       (3) Consultation.--In preparing the report, the 
     Administrator and the Secretary of the Interior shall consult 
     with small business concerns in the forest products industry, 
     and shall solicit comments from the public.

     SEC. 702. NEGATIVE INFORMATION ABOUT CONSUMER.

       Section 609(a) of the Fair Credit Reporting Act (15 U.S.C. 
     1681g(a)) is amended by adding after paragraph (3) the 
     following:
       ``(4) The dates, original payees, and amounts of any checks 
     upon which is based any negative information about the 
     consumer included in the file at the time of the 
     disclosure.''.

     SEC. 703. UNITED NATIONS RESOLUTIONS CONCERNING JERUSALEM.

       (a) Findings.--The Congress finds that--
       (1) for three thousand years Jerusalem has been the focal 
     point of jewish religious devotion;
       (2) Jerusalem is also considered a holy city by the members 
     of other religious faiths;
       (3) the once thriving Jewish community of the historic Old 
     City of Jerusalem was driven out by force during the 1948 
     Arab-Israeli War;
       (4) from 1948 to 1967, Jerusalem was a divided city and 
     Israeli citizens of all faiths as well as Jewish citizens of 
     all states were denied access to holy sites in the area 
     controlled by Jordan;
       (5) in 1967, Jerusalem was reunited during the conflict 
     known as the Six Day War;
       (6) since 1967, Jerusalem has been a united city 
     administered by Israel and persons of all religious faiths 
     have been guaranteed full access to holy sites within the 
     city;
       (7) in 1990, the United States Senate and House of 
     Representatives overwhelmingly adopted Senate Concurrent 
     Resolution 106 and House Concurrent Resolution 290 declaring 
     that Jerusalem, the capital of Israel, ``must remain an 
     undivided city'';
       (8) the Vice President has stated the Administration's 
     intention not to ``forget the meaning of Jerusalem'';
       (9) the Secretary of State recently reiterated United 
     States opposition to attempts in the United Nations to refer 
     to Jerusalem as ``occupied territory'';
       (10) it is reported that the United Nations Security 
     Council may consider a resolution condemning the Hebron 
     massacre but which also refers to Jerusalem as ``occupied'' 
     territory.
       (b) Sense of Congress.--Therefore, it is the sense of the 
     Congress that--
       (1) the Administration should be commended for its efforts 
     not to ``forget the meaning of Jerusalem'' and to oppose 
     attempts in the United Nations to refer to Jerusalem as 
     ``occupied'' territory;
       (2) sacrificing core principles for short term objectives 
     will ultimately retard, not advance, the peace process;
       (3) the United States should exercise its veto in the 
     United Nations Security Council on any Security Council 
     resolution that states or implies that Jerusalem is 
     ``occupied'' territory.

     SEC. 704. AMENDMENT TO THE FEDERAL RESERVE ACT.

       Section 11.--Section 11 of the Federal Reserve Act (12 
     U.S.C. 248) is amended by inserting at the end thereof the 
     following new subsection:
       ``(p) Authority.--The Board of Governors of the Federal 
     Reserve System and the Federal Open Market Committee may each 
     act in the Board's or the Committee's own name and through 
     the Board's or the Committee's own attorneys in enforcing any 
     provision of this title, regulations thereunder, or any other 
     law or regulation, or in any action, suit, or proceeding to 
     which the Board of Governors of the Federal Reserve System or 
     the Federal Open Market Committee is a party.''.

     SEC. 705. OVERSIGHT HEARINGS.

       It is the sense of the Senate that--
       (a) Congress has a constitutional obligation to conduct 
     oversight of matters relating to the operations of the 
     Government, including matters related to any governmental 
     investigations which may, from time to time, be undertaken.
       (b) the Majority Leader and the Republican Leader should 
     meet and determine the appropriate timetable, procedures, and 
     forum for appropriate Congressional oversight, including 
     hearings on all matters related to ``Madison Guaranty Savings 
     and Loan Association (`MGS&L'), Whitewater Development 
     Corporation and Capital Management Services Inc. (`CMS').''.
       (c) no witness called to testify at these hearings shall be 
     granted immunity under sections 6002 and 6005 of title 18, 
     United States Code, over the objection of Special Counsel 
     Robert B. Fiske, Jr.
       (d) the hearings should be structured and sequenced in such 
     a manner that in the judgment of the Leaders they would not 
     interfere with the ongoing investigation of Special Counsel 
     Robert B. Fiske, Jr.

     SEC. 706. INSURANCE TRANSFER AGREEMENT.

       (a) Sense of Senate.--It is the sense of the Senate that no 
     insurer shall enter into a transfer agreement or transfer a 
     contract of insurance pursuant to a transfer agreement unless 
     the transferring insurer has first provided or caused to be 
     provided to each policyholder of the insurer affected by the 
     agreement a notice of the intent of the insurer to transfer 
     the contract of insurance held by such policyholder.
       (b) Form of Notice.--The notice shall be sent by first-
     class mail, addressed to the last known address of the 
     policyholder or to the address to which premium notices or 
     other policy documents are sent or, with respect to home 
     service business, by personal delivery with acknowledged 
     receipt. A notice of intent to transfer shall also be sent to 
     the transferring insurer's agent or broker of record on the 
     affected policy.
       (c) Content of Notice.--The notice required by subsection 
     (a) shall state or provide--
       (1) the date the intended transfer and novation of the 
     contract of insurance of the policyholder is proposed to take 
     place and become effective;
       (2) the name, address, and telephone number of the 
     transferring insurer and the assuming insurer under the 
     proposed transfer agreement;
       (3) that the transfer and novation of the insurance 
     contract of the policyholder cannot take effect without the 
     written consent of the policyholder, except as provided in 
     section 5 of this Act;
       (4) the procedures and any time limitation for consenting 
     to the transfer and novation;
       (5) a summary informing the policyholder regarding any 
     adverse effect that the policyholder might experience as a 
     result of consenting to the transfer and novation;
       (6) a statement that, without the written consent of the 
     policyholder, the transferring insurer will remain as the 
     insurance company of the policyholder or beneficiary, except 
     as provided in section 5 of this Act;
       (7) a statement that the assuming insurer is licensed to 
     write the type of business being transferred in the State 
     where the policyholder resides, or is otherwise authorized, 
     under applicable law, to assume such business;
       (8) the name, address, and telephone number of the person 
     designated by the transferring insurer as the person for 
     receiving the written consent of the policyholder affected by 
     the proposed transfer and novation;
       (9) the address and telephone number of the chief insurance 
     regulatory official of the State in which the policyholder 
     resides;
       (10) financial data for the transferring insurer and the 
     assuming insurer involved in the proposed transfer agreement, 
     including--
       (A)(i) the ratings, together with enough information to 
     understand where the ratings fall within the range of rating 
     categories of each rating agency, for the last 5 years, if 
     available, or if not available for 5 years, for such lesser 
     period as is available, from each nationally recognized 
     insurance company rating organization that has rated the 
     insurer, including an explanation of the meaning of each 
     rating category of each rating organization;
       (ii) if ratings are unavailable for any year of the 5-year 
     period, a disclosure of this fact; and
       (iii) a statement that any or all of the above insurance 
     company rating organization reports may be obtained at no 
     cost by writing or calling an address or phone number listed 
     in the statement;
       (B) a balance sheet as of December 31 for each of the 3 
     years immediately preceding the notice, if available, or for 
     such lesser period as is available, and as of the date of the 
     most recent quarterly statement;
       (C) a copy of the Management's Discussion and Analysis that 
     was filed as a supplement to the annual statement of the 
     preceding year; and
       (D) an explanation of the reason for the proposed transfer 
     signed by the highest executive official of the transferring 
     insurer and the assuming insurer;
       (11) a statement setting forth the financial condition of 
     the transferring insurer and of the assuming insurer under 
     the proposed transfer agreement, and the effect the 
     transaction will have on the financial condition of each such 
     insurer;
       (12) an opinion by a disinterested third-party expert, such 
     as an actuary, finding that the transfer is fair and in the 
     best interests of the policyholders affected by the transfer, 
     and a statement that the report on which the opinion is based 
     is available at no cost by writing or calling an address and 
     phone number listed in the statement.

                          ____________________