[Congressional Record Volume 140, Number 104 (Tuesday, August 2, 1994)]
[House]
[Page H]
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[Congressional Record: August 2, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                     CONFERENCE REPORT ON H.R. 3474

  Mr. GONZALEZ submitted the following conference report and statement 
on 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:

                  Conference Report (H. Rept. 103-652)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to 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, having met, after full and free conference, 
     have agreed to recommend and do recommend to their respective 
     Houses as follows:
       That the House recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Riegle 
     Community Development 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. Training.
Sec. 110. Encouragement of private entities.
Sec. 111. Collection and compilation of information.
Sec. 112. Investment of receipts and proceeds.
Sec. 113. Capitalization assistance to enhance liquidity.
Sec. 114. Incentives for depository institution participation.
Sec. 115. Recordkeeping.
Sec. 116. Special provisions with respect to institutions that are 
              supervised by Federal banking agencies.
Sec. 117. Studies and reports; examination and audit.
Sec. 118. Inspector General.
Sec. 119. Enforcement.
Sec. 120. Community Development Revolving Loan Fund for credit unions.
Sec. 121. Authorization of appropriations.

            Subtitle B--Home Ownership and Equity Protection

Sec. 151. Short title.
Sec. 152. Consumer protections for certain mortgages.
Sec. 153. Civil liability.
Sec. 154. Reverse mortgage disclosure.
Sec. 155. Regulations.
Sec. 156. Applicability.
Sec. 157. Federal Reserve study.
Sec. 158. Hearings on home equity lending.

               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. Joint study on the impact of additional securities based on 
              pooled obligations.
Sec. 210. Consistent use of financial terminology.

             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 Fund.
Sec. 258. Reimbursement to the Fund.
Sec. 259. Regulations.
Sec. 260. Authorization of appropriations.
Sec. 261. Effective date.

       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, ombudsman, and alternative 
              dispute resolution.
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. Modification of regulatory provisions.
Sec. 319. Expedited procedures.
Sec. 320. Exemption of certain holding company formations from 
              registration under the Securities Act of 1933.
Sec. 321. Reduction of post-approval waiting periods for certain 
              acquisitions and mergers.
Sec. 322. Bankers' banks.
Sec. 323. Bank Service Corporation Act amendment.
Sec. 324. Merger transaction reports.
Sec. 325. Credit card accounts receivable sales.
Sec. 326. Limiting potential liability on foreign accounts.
Sec. 327. GAO reports.
Sec. 328. Study and report on capital standards and their impact on the 
              economy.
Sec. 329. Study on the impact of the payment of interest on reserves.
Sec. 330. Study and report on the consumer credit system.
Sec. 331. Clarification of provisions relating to administrative 
              autonomy.
Sec. 332. Exemption for business accounts.
Sec. 333. Study on check-related fraud.
Sec. 334. Insider lending.
Sec. 335. Revisions of standards.
Sec. 336. Alternative rules for radio advertising.
Sec. 337. Deposit broker registration.
Sec. 338. Amendments to the Depository Institution Management 
              Interlocks Act.
Sec. 339. Adverse information about consumers.
Sec. 340. Simplified disclosure for existing depositors.
Sec. 341. Feasibility study of data bank.
Sec. 342. Timely completion of CRA review.
Sec. 343. Time limit on agency consideration of completed applications.
Sec. 344. Waiver of right of rescission for certain refinancing 
              transactions.
Sec. 345. Clarification of RESPA disclosure requirements.
Sec. 346. Notice procedures for bank holding companies to seek approval 
              to engage in certain activities.
Sec. 347. Commercial mortgage related securities.
Sec. 348. Clarifying amendment relating to data collection.
Sec. 349. Guidelines for examinations.
Sec. 350. Revising regulatory requirements for transfers of all types 
              of assets with recourse.

                       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. Uniform Federal regulation of casinos.
Sec. 410. Authority to grant exemptions to States with effective 
              regulation and enforcement.
Sec. 411. Criminal and civil penalties for structuring domestic and 
              international transactions.
Sec. 412. GAO study of cashiers' checks.
Sec. 413. Technical amendments and corrections.

                TITLE V--NATIONAL FLOOD INSURANCE REFORM

Sec. 501. Short title.

                        Subtitle A--Definitions

Sec. 511. Flood Disaster Protection Act of 1973.
Sec. 512. National Flood Insurance Act of 1968.

           Subtitle B--Compliance and Increased Participation

Sec. 521. Nonwaiver of flood purchase requirement for recipients of 
              Federal disaster assistance.
Sec. 522. Expanded flood insurance purchase requirements.
Sec. 523. Escrow of flood insurance payments.
Sec. 524. Placement of flood insurance by lenders.
Sec. 525. Penalties for failure to require flood insurance or notify.
Sec. 526. Fees for determining applicability of flood insurance 
              purchase requirements.
Sec. 527. Notice requirements.
Sec. 528. Standard hazard determination forms.
Sec. 529. Examinations regarding compliance.
Sec. 530. Financial Institutions Examination Council.
Sec. 531. Clerical amendment.

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

Sec. 541. Community rating system and incentives for community 
              floodplain management.
Sec. 542. Funding.

                 Subtitle D--Mitigation of Flood Risks

Sec. 551. Repeal of flooded property purchase and loan program.
Sec. 552. Termination of erosion-threatened structures program.
Sec. 553. Mitigation assistance program.
Sec. 554. Establishment of National Flood Mitigation Fund.
Sec. 555. Additional coverage for compliance with land use and control 
              measures.

                        Subtitle E--Task Forces

Sec. 561. Flood Insurance Interagency Task Force.
Sec. 562. Task Force on Natural and Beneficial Functions of the 
              Floodplain.

                  Subtitle F--Miscellaneous Provisions

Sec. 571. Extension of flood insurance program.
Sec. 572. Limitation on premium increases.
Sec. 573. Maximum flood insurance coverage amounts.
Sec. 574. Flood insurance program arrangements with private insurance 
              entities.
Sec. 575. Updating of flood maps.
Sec. 576. Technical Mapping Advisory Council.
Sec. 577. Evaluation of erosion hazards.
Sec. 578. Study of economic effects of charging actuarially based 
              premium rates for pre-FIRM structures.
Sec. 579. Effective dates of policies.
Sec. 580. Agricultural structures.
Sec. 581. Implementation review by Director.
Sec. 582. Prohibited flood disaster assistance.
Sec. 583. Regulations.
Sec. 584. Relation to State and local laws.

                   TITLE VI--MISCELLANEOUS PROVISIONS

Sec. 601. Oversight hearings.
Sec. 602. Technical amendments to the Federal banking laws.
         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 to promote 
     economic revitalization and community development through 
     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) Administrator.--The term ``Administrator'' means the 
     Administrator of the Fund appointed under section 104(b).
       (2) 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.
       (3) Affiliate.--The term ``affiliate'' has the same meaning 
     as in section 2(k) of the Bank Holding Company Act of 1956.
       (4) Board.--The term ``Board'' means the Community 
     Development Advisory Board established under section 104(d).
       (5) 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) provides development services in conjunction with 
     equity investments or loans, directly or through a subsidiary 
     or affiliate;
       (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) Conditions for qualification of holding companies.--
       (i) Consolidated treatment.--A depository institution 
     holding company may qualify as a community development 
     financial institution only if the holding company and the 
     subsidiaries and affiliates of the holding company 
     collectively satisfy the requirements of subparagraph (A).
       (ii) Exclusion of subsidiary or affiliate for failure to 
     meet consolidated treatment rule.--No subsidiary or affiliate 
     of a depository institution holding company may qualify as a 
     community development financial institution if the holding 
     company and the subsidiaries and affiliates of the holding 
     company do not collectively meet the requirements of 
     subparagraph (A).
       (C) Conditions for subsidiaries.--No subsidiary of an 
     insured depository institution may qualify as a community 
     development financial institution if the insured depository 
     institution and its subsidiaries do not collectively meet the 
     requirements of subparagraph (A).
       (6) 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.
       (7) Community partnership.--The term ``community 
     partnership'' means an agreement between a community 
     development financial institution and a community partner to 
     provide development services, loans, or equity investments, 
     to an investment area or targeted population.
       (8) Depository institution holding company.--The term 
     ``depository institution holding company'' has the same 
     meaning as in section 3 of the Federal Deposit Insurance Act.
       (9) 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.
       (10) Fund.--The term ``Fund'' means the Community 
     Development Financial Institutions Fund established under 
     section 104(a).
       (11) Indian reservation.--The term ``Indian reservation'' 
     has the same meaning as in section 4(10) of the Indian Child 
     Welfare Act of 1978, and shall include land held by 
     incorporated Native groups, regional corporations, and 
     village corporations, as defined in or established pursuant 
     to the Alaska Native Claims Settlement Act, public domain 
     Indian allotments, and former Indian reservations in the 
     State of Oklahoma.
       (12) Indian tribe.--The term ``Indian tribe'' means any 
     Indian tribe, band, pueblo, nation, or other organized group 
     or community, including any Alaska Native village or regional 
     or village corporation, as defined in or established pursuant 
     to the Alaska Native Claims Settlement Act, which is 
     recognized as eligible for the special programs and services 
     provided by the United States to Indians because of their 
     status as Indians.
       (13) 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.
       (14) Insured credit union.--The term ``insured credit 
     union'' has the same meaning as in section 101(7) of the 
     Federal Credit Union Act.
       (15) Insured depository institution.--The term ``insured 
     depository institution'' has the same meaning as in section 3 
     of the Federal Deposit Insurance Act.
       (16) Investment area.--The term ``investment area'' means a 
     geographic area (or areas) including an Indian reservation 
     that--
       (A)(i) meets objective criteria of economic distress 
     developed by the Fund, which may include the percentage of 
     low-income families or the extent of poverty, the rate of 
     unemployment or underemployment, rural population 
     outmigration, lag in population growth, and extent of blight 
     and disinvestment; and
       (ii) has significant unmet needs for loans or equity 
     investments; or
       (B) encompasses or is located in an empowerment zone or 
     enterprise community designated under section 1391 of the 
     Internal Revenue Code of 1986.
       (17) 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.
       (18) State.--The term ``State'' has the same meaning as in 
     section 3 of the Federal Deposit Insurance Act.
       (19) 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.
       (20) Targeted population.--The term ``targeted population'' 
     means individuals, or an identifiable group of individuals, 
     including an Indian tribe, who--
       (A) are low-income persons; or
       (B) otherwise lack adequate access to loans or equity 
     investments.
       (21) Training program.--The term ``training program'' means 
     the training program operated by the Fund under section 109.

     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 that shall have the duties and responsibilities 
     specified by this subtitle and subtitle B of title II. 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.--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.
       (2) Chief financial officer.--The Administrator shall 
     appoint a chief financial officer, who shall have the 
     authority and functions of an agency Chief Financial Officer 
     under section 902 of title 31, United States Code. In the 
     event of a vacancy in the position of the Administrator or 
     during the absence or disability of the Administrator, the 
     chief financial officer shall perform the duties of the 
     position of Administrator.
       (3) Other officers and employees.--The Administrator may 
     appoint such other officers and employees of the Fund as the 
     Administrator determines to be necessary or appropriate.
       (4) Expedited hiring.--During the 2-year period beginning 
     on the date of enactment of this Act, the Administrator may--
       (A) appoint and terminate the individuals referred to in 
     paragraphs (2) and (3) without regard to the civil service 
     laws and regulations; and
       (B) fix the compensation of the individuals referred to in 
     paragraph (3) without regard to the provisions of chapter 51 
     and subchapter III of chapter 53 of title 5, United States 
     Code, relating to classification of positions and General 
     Schedule pay rates, except that the rate of pay for such 
     individuals may not exceed the rate payable for level V of 
     the Executive Schedule under section 5316 of such title.
       (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 and subtitle B of title II;
       (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 and 
     subtitle B of title II;
       (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 and subtitle B of title II;
       (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 subtitle B of title II 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.--There is established an advisory board 
     to the Fund to be known as the Community Development Advisory 
     Board, which shall be operated in accordance with the 
     provisions of the Federal Advisory Committee Act, except that 
     section 14 of that Act does not apply to the Board.
       (2) Membership.--The Board shall consist of 15 members, 
     including--
       (A) the Secretary of Agriculture or his or her designee;
       (B) the Secretary of Commerce or his or her designee;
       (C) the Secretary of Housing and Urban Development or his 
     or her designee;
       (D) the Secretary of the Interior or his or her designee;
       (E) the Secretary of the Treasury or his or her designee;
       (F) the Administrator of the Small Business Administration 
     or his or her designee; and
       (G) 9 private citizens, appointed by the President, who 
     shall be selected, to the maximum extent practicable, to 
     provide for national geographic representation and racial, 
     ethnic, and gender diversity, including--
       (i) 2 individuals who are officers of existing community 
     development financial institutions;
       (ii) 2 individuals who are officers of insured depository 
     institutions;
       (iii) 2 individuals who are officers of national consumer 
     or public interest organizations;
       (iv) 2 individuals who have expertise in community 
     development; and
       (v) 1 individual who has personal experience and 
     specialized expertise in the unique lending and community 
     development issues confronted by Indian tribes on Indian 
     reservations.
       (3) Chairperson.--The members of the Board specified in 
     paragraph (2)(G) shall select, by majority vote, a 
     chairperson of the Board, who shall serve for a term of 2 
     years.
       (4) Board function.--It shall be the function of the Board 
     to advise the Administrator on the policies of the Fund 
     regarding activities under this subtitle. The Board shall not 
     advise the Administrator on the granting or denial of any 
     particular application.
       (5) Terms of private members.--
       (A) In general.--Each member of the Board appointed under 
     paragraph (2)(G) 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.
       (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. Nothing in this subsection shall affect 
     the application of any Federal tax law.
       (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 
     in section 5313, by adding at the end the following:
       ``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.
       (k) Transition Period.--
       (1) In general.--During the transition period, the 
     Secretary of the Treasury may--
       (A) assist in the establishment of the administrative 
     functions of the Fund listed in paragraph (2); and
       (B) hire not more than 6 individuals to serve as employees 
     of the Fund during the transition period;
       (2) Continued service.--Individuals hired in accordance 
     with paragraph (1)(B) may continue to serve as employees of 
     the Fund after the transition period.
       (3) Administrative functions.--The administrative functions 
     referred to in paragraph (1)(A) shall be limited to--
       (A) establishing accounting, information, and recordkeeping 
     systems for the Fund; and
       (B) procuring office space, equipment, and supplies.
       (4) Expedited hiring.--During the transition period, the 
     Secretary of the Treasury may--
       (A) appoint and terminate the individuals referred to in 
     paragraph (1)(B) without regard to the civil service laws and 
     regulations; and
       (B) fix the compensation of the individuals referred to in 
     paragraph (1)(B) without regard to the provisions of chapter 
     51 and subchapter III of chapter 53 of title 5, United States 
     Code, relating to classification of positions and General 
     Schedule pay rates, except that the rate of pay for such 
     individuals may not exceed the rate payable for level V of 
     the Executive Schedule under section 5316 of such title.
       (5) Certain employees.--During the transition period, 
     employees of the Department of the Treasury may only comprise 
     less than one-half of the total number of individuals hired 
     in accordance with paragraph (1)(B).
       (6) Transition expenses.--Amounts previously appropriated 
     to the Department of the Treasury may be used to pay 
     obligations and expenses of the Fund incurred under this 
     section, and such amounts may be reimbursed by the Fund to 
     the Department of the Treasury from amounts appropriated to 
     the Fund for fiscal year 1995.
       (7) Definition.--For purposes of this subsection, the term 
     ``transition period'' means the period beginning on the date 
     of enactment of this Act and ending on the date on which the 
     Administrator is appointed.

     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 113, 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 as 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 or targeted population; 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 serve a new targeted population, offer more products or 
     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; and
       (B) will expand its operations into a new investment area 
     or to serve a new targeted population, offer more products or 
     services, or increase the volume of its current business; and
       (6) to include such other information as the Fund deems 
     appropriate.
       (c) Preapplication Outreach Program.--The Fund shall 
     provide an outreach program to identify and provide 
     information to potential applicants and may provide technical 
     assistance to potential applicants, but shall not assist in 
     the preparation of any application.

     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--
       (1) the community development financial institution 
     coapplicant--
       (A) meeting the minimum selection criteria described in 
     section 105; and
       (B) satisfying the selection criteria of section 107;
       (2) the extent to which the community partner coapplicant 
     will participate in carrying out the partnership;
       (3) the extent to which the community partnership will 
     enhance the likelihood of success of the community 
     development financial institution coapplicant's strategic 
     plan; and
       (4) the extent to which service to the investment area or 
     targeted population will be better performed by a partnership 
     as opposed to the individual community development financial 
     institution coapplicant.
       (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 or subsidiary 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 113, 
     the Fund shall, in its sole discretion, select community 
     development financial institution applicants meeting the 
     requirements of section 105 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 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 matching funds are derived from 
     private sources;
       (8) the extent to which the proposed activities will expand 
     economic opportunities within the investment areas or the 
     targeted populations;
       (9) whether the applicant is, or will become, an insured 
     community development financial institution;
       (10) the extent of support from the investment areas or 
     targeted populations;
       (11) the extent to which the applicant is, or will be, 
     community-owned or community-governed;
       (12) the extent to which the applicant will increase its 
     resources through coordination with other institutions or 
     participation in a secondary market;
       (13) 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
       (14) other factors deemed to be appropriate by the Fund.
       (b) Geographic Diversity.--In selecting applicants for 
     assistance, the Fund shall seek to fund a geographically 
     diverse group of applicants, which shall include applicants 
     from metropolitan, nonmetropolitan, and rural areas.

     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 finance, without regard to 
     whether the organizations receive or are eligible to receive 
     assistance under this subtitle.
       (2) Equity investments.--
       (A) Limitation on 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 in the 
     institution. Such equity investments may provide for 
     convertibility to voting stock upon transfer by the Fund.
       (B) Fund deemed not to control.--Notwithstanding any other 
     provision of law, the Fund shall not be deemed to control a 
     community development financial institution by reason of any 
     assistance provided under this subtitle for the purpose of 
     any other applicable law to the extent that the Fund complies 
     with subparagraph (A). Nothing in this subparagraph shall 
     affect the application of any Federal tax law.
       (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 cost, as 
     defined in section 502(5) 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 community development 
     financial 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 shall only be used for services and lending 
     products--
       (i) that serve low-income people; and
       (ii) that--

       (I) are not provided by other lenders in the area; or
       (II) complement the services and lending products provided 
     by other lenders that serve the investment area or targeted 
     population; 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 113) 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.--
       (1) Types of activities.--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.
       (2) Availability of technical assistance.--The Fund may 
     provide technical assistance, regardless of whether or not 
     the recipient also receives financial assistance under this 
     section.
       (d) Amount of Assistance.--
       (1) In general.--Except as provided in paragraph (2), 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 subsidiaries and 
     affiliates.
       (2) Exception.--The Fund may provide not more than 
     $3,750,000 of assistance in addition to the amount specified 
     in paragraph (1) during the same 3-year period to an existing 
     community development financial institution that proposes to 
     establish a subsidiary or affiliate for the purpose of 
     serving an investment area or targeted population outside of 
     any State and outside of any metropolitan area presently 
     served by the institution, if--
       (A) the subsidiary or affiliate--
       (i) would be a community development financial institution; 
     and
       (ii) independently--

       (I) meets the selection criteria described in section 105; 
     and

       (II) satisfies the selection criteria of section 107; and

       (B) no other application for assistance to serve the 
     investment area or targeted population has been submitted to 
     the Administrator within a reasonable period of time 
     preceding the date of receipt of the application at issue.
       (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; or
       (B) 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 or rural 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 government 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 Government funds.
       (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;
       (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 
     115(e)(1); and
       (C) require that all assistance granted under this section 
     is used by the community development financial institution or 
     community development partnership in a manner consistent with 
     the purposes of this subtitle.
       (2) 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) require changes to the performance goals imposed 
     pursuant to subparagraph (B);
       (ii) require changes to the strategic plan submitted 
     pursuant to section 105(b)(2);
       (iii) revoke approval of the application;
       (iv) reduce or terminate assistance;
       (v) require repayment of assistance;
       (vi) bar an applicant from reapplying for assistance from 
     the Fund; and
       (vii) take such other actions as the Fund deems 
     appropriate.
       (D) Consultation with tribal governments.--In reviewing the 
     performance of any assisted community development financial 
     institution, the investment area of which includes an Indian 
     reservation, or the targeted population of which includes an 
     Indian tribe, the Fund shall consult with, and seek input 
     from, any appropriate tribal government.
       (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. 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 finance 
     activities.
       (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 providing 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 program 
     described in this section directly or through a contract with 
     other organizations. The Fund may contract to provide the 
     training program through 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) Coordination.--The Fund shall coordinate with other 
     appropriate Federal departments or agencies that operate 
     similar training programs in order to prevent duplicative 
     efforts.
       (f) Regulatory Fee for Providing Training Services.--
       (1) General rule.--The Fund may, at the discretion of the 
     Administrator and in accordance with this subsection, assess 
     and collect regulatory fees solely to cover the costs of the 
     Fund in providing training services under a training program 
     operated in accordance with this section.
       (2) Persons subject to fee.--Fees may be assessed under 
     paragraph (1) only on persons who participate in the training 
     program.
       (3) Limitation on manner of collection.--Fees may be 
     assessed and collected under this subsection only in such 
     manner as may reasonably be expected to result in the 
     collection of an aggregate amount of fees during any fiscal 
     year which does not exceed the aggregate costs of the Fund 
     for such year in providing training services under a training 
     program operated in accordance with this section
       (4) Limitation on amount of fee.--The amount of any fee 
     assessed under this subsection on any person may not exceed 
     the amount which is reasonably based on the proportion of the 
     training services provided under a training program operated 
     in accordance with this section which relate to such person.

     SEC. 110. ENCOURAGEMENT OF PRIVATE ENTITIES.

       The Fund may facilitate the organization of corporations in 
     which the Federal Government has no ownership interest. 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, or by any State or local 
     government or any agency or instrumentality thereof.

     SEC. 111. COLLECTION AND COMPILATION OF INFORMATION.

       The Fund shall--
       (1) collect and compile information pertinent to community 
     development financial institutions that will assist in 
     creating, developing, expanding, and preserving such 
     institutions; and
       (2) make such information available to promote the purposes 
     of this subtitle.

     SEC. 112. 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 or 113, and any fees received pursuant to section 109(f) 
     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. 113. CAPITALIZATION ASSISTANCE TO ENHANCE LIQUIDITY.

       (a) Assistance.--
       (1) In general.--The Fund may provide assistance for the 
     purpose of providing capital to organizations to 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 one dollar 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.
       (3) Construction of federal government 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 
     Government funds.
       (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 or 
     its subsidiaries or affiliates 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.--Organizations that 
     receive assistance from the Fund in accordance with this 
     section shall--
       (1) submit to the Fund, not less than once in every 18-
     month period, financial statements audited by an independent 
     certified public accountant, as part of the report required 
     by paragraph (2);
       (2) submit an annual report on its activities; and
       (3) keep such records as may be necessary to disclose the 
     manner in which any assistance under this section is used.
       (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, or 
     territory. Nothing in this paragraph shall affect the 
     application of Federal tax law.
       (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 
     by an organization assisted under this section shall be used 
     by the seller for community development purposes.

     SEC. 114. INCENTIVES FOR DEPOSITORY INSTITUTION 
                   PARTICIPATION.

       (a) Function of Administrator.--
       (1) In general.--Of any funds appropriated pursuant to the 
     authorization in section 121(a), the funds made available for 
     use in carrying out this section in accordance with section 
     121(a)(4) shall be administered by the Administrator of the 
     Fund, in consultation with--
       (A) the Federal banking agencies (as defined in section 3 
     of the Federal Deposit Insurance Act) and the National Credit 
     Union Administration;
       (B) the individuals named pursuant to clauses (ii) and (iv) 
     of section 104(d)(2)(G); and
       (C) any other representatives of insured depository 
     institutions or other persons as the Administrator may 
     determine to be appropriate.
       (2) Applicability of bank enterprise act of 1991.--Subject 
     to subsection (b) and the consultation requirement of 
     paragraph (1)--
       (A) section 233 of the Bank Enterprise Act of 1991 shall be 
     applicable to the Administrator, for purposes of this 
     section, in the same manner and to the same extent that such 
     section is applicable to the Community Enterprise Assessment 
     Credit Board;
       (B) the Administrator shall, for purposes of carrying out 
     this section and section 233 of the Bank Enterprise Act of 
     1991--
       (i) have all powers and rights of the Community Enterprise 
     Assessment Credit Board under section 233 of the Bank 
     Enterprise Act of 1991 to administer and enforce any 
     provision of such section 233 which is applicable to the 
     Administrator under this section; and
       (ii) shall be subject to the same duties and restrictions 
     imposed on the Community Enterprise Assessment Credit Board; 
     and
       (C) the Administrator shall--
       (i) have all powers and rights of an appropriate Federal 
     banking agency under section 233(b)(2) of the Bank Enterprise 
     Act of 1991 to approve or disapprove the designation of 
     qualified distressed communities for purposes of this section 
     and provide information and assistance with respect to any 
     such designation; and
       (ii) shall be subject to the same duties imposed on the 
     appropriate Federal banking agencies under such section 
     233(b)(2).
       (3) Awards.--The Administrator shall determine the amount 
     of assessment credits, and shall make awards of those 
     credits.
       (4) Regulations and guidelines.--The Administrator may 
     prescribe such regulations and issue such guidelines as the 
     Administrator determines to be appropriate to carry out this 
     section.
       (5) Exceptions to applicability.--Notwithstanding 
     paragraphs (1) through (4) of this subsection, subsections 
     (a)(1) and (e)(2) of section 233 of the Bank Enterprise Act 
     of 1991, and any other provision of the Federal Deposit 
     Insurance Act relating to the Bank Enterprise Act of 1991, do 
     not apply to the Administrator for purposes of this subtitle.
       (b) Provisions Relating to Administration of This 
     Section.--
       (1) New lifeline accounts.--In applying section 233 of the 
     Bank Enterprise Act of 1991 for purposes of this section, the 
     Administrator shall treat the provision of new lifeline 
     accounts by an insured depository institution as an activity 
     which is qualified to be taken into account under section 
     233(a)(2)(A) of such Act.
       (2) Determination of assessment credit.--For the purpose of 
     this subtitle, section 233(a)(3) of the Bank Enterprise Act 
     of 1991 (12 U.S.C. 1834a(a)(3)) shall be applied by 
     substituting the following text:
       ``(3) Amount of assessment credit.--The amount of an 
     assessment credit which may be awarded to an insured 
     depository institution to carry out the qualified activities 
     of the institution or of the subsidiaries of the institution 
     pursuant to this section for any semiannual period shall be 
     equal to the sum of--
       ``(A) with respect to qualifying activities described in 
     paragraph (2)(A), the amount which is equal to--
       ``(i) 5 percent of the sum of the amounts determined under 
     such subparagraph, in the case of an institution which is not 
     a community development financial institution; or
       ``(ii) 15 percent of the sum of the amounts determined 
     under such subparagraph, in the case of an institution which 
     is a community development financial institution; and
       ``(B) with respect to qualifying activities described in 
     paragraph (2)(C), 15 percent of the amounts determined under 
     such subparagraph.''.
       (3) Adjustment of percentage.--Section 233(a)(5) of the 
     Bank Enterprise Act of 1991 shall be applied for purposes of 
     this section by--
       (A) substituting ``institutions which are community 
     development financial institutions'' for ``institutions which 
     meet the community development organization requirements 
     under section 234''; and
       (B) substituting ``institutions which are not community 
     development financial institutions'' for ``institutions which 
     do not meet such requirements''.
       (4) Designation of qdc.--Section 233(b)(2) of the Bank 
     Enterprise Act of 1991 shall be applied for purposes this 
     section without regard to subparagraph (A)(ii) of such 
     section 233(b)(2).
       (5) Operation on annual basis.--The Administrator may, in 
     the Administrator's discretion, apply section 233 of the Bank 
     Enterprise Act of 1991 for purposes of this section by 
     providing community enterprise assessment credits with 
     respect to annual periods rather than semiannual periods.
       (6) Outreach.--The Administrator shall ensure that 
     information about the Bank Enterprise Act of 1991 under this 
     section is widely disseminated to all interested parties.
       (7) Qualified activities.--For the purpose of this 
     subtitle, section 233(a)(2)(A) of the Bank Enterprise Act of 
     1991 shall be applied by inserting ``of the increase'' after 
     ``the amount''.
       (c) Technical and Conforming Amendments to the Bank 
     Enterprise Act of 1991.--
       (1) Assistance to cdfi may be taken into account as 
     qualifying activity.--Section 233(a)(2) of the Bank 
     Enterprise Act of 1991 (12 U.S.C. 1834a(a)(2)) is amended--
       (A) in the material preceding subparagraph (A), by striking 
     ``shall be eligible'' and inserting ``may apply for'';
       (B) in subparagraph (A), by striking ``financial 
     assistance'' and inserting ``assistance'';
       (C) by striking ``and'' at the end of subparagraph (A);
       (D) by striking the period at the end of subparagraph (B) 
     and inserting ``; and''; and
       (E) by adding at the end the following new subparagraph;
       ``(C) any increase during the period in the amount of new 
     equity investments in community development financial 
     institutions.''.
       (2) Additional assistance which may be considered as 
     qualifying activities.--Section 233(a)(4) of the Bank 
     Enterprise Act of 1991 (12 U.S.C. 1834a(a)(4)) is amended--
       (A) in the material preceding subparagraph (A), by striking 
     ``financial''; and
       (B) by adding at the end the following new subparagraphs:
       ``(L) Loans made for the purpose of developing or 
     supporting--
       ``(i) commercial facilities that enhance revitalization, 
     community stability, or job creation and retention efforts;
       ``(ii) business creation and expansion efforts that--

       ``(I) create or retain jobs for low-income people;
       ``(II) enhance the availability of products and services to 
     low-income people; or
       ``(III) create or retain businesses owned by low-income 
     people or residents of a targeted area;

       ``(iii) community facilities that provide benefits to low-
     income people or enhance community stability;
       ``(iv) home ownership opportunities that are affordable to 
     low-income households;
       ``(v) rental housing that is principally affordable to low-
     income households; and
       ``(vi) other activities deemed appropriate by the Board.
       ``(M) The provision of technical assistance to residents of 
     qualified distressed communities in managing their personal 
     finances through consumer education programs either sponsored 
     or offered by insured depository institutions.
       ``(N) The provision of technical assistance and consulting 
     services to newly formed small businesses located in 
     qualified distressed communities.
       ``(O) The provision of technical assistance to, or 
     servicing the loans of low- or moderate-income homeowners and 
     homeowners located in qualified distressed communities.''.
       (3) Restriction on adjustment of percentages.--Section 
     233(a)(5) of the Bank Enterprise Act of 1991 (12 U.S.C. 
     1834a(a)(5) is amended by striking ``paragraph (3)'' and 
     inserting ``paragraph(3)(A)''.
       (4) Credit limited to originations by institutions.--
     Section 233(a)(6) of the Bank Enterprise Act of 1991 (12 
     U.S.C. 1834a(a)(6)) is amended by striking ``Investments by 
     any insured depository institution in loans and securities'' 
     and inserting ``Loans, financial assistance, and equity 
     investments made by any insured depository institution''.
       (5) Quantitative analysis of technical assistance.--Section 
     233(a) of the Bank Enterprise Act of 1991 (12 U.S.C. 
     1834a(a)) is amended by adding at the end the following new 
     paragraph:
       ``(7) Quantitative analysis of technical assistance.--The 
     Board may establish guidelines for analyzing the technical 
     assistance described in subparagraphs (M), (N), and (O) of 
     paragraph (4) for the purpose of quantifying the results of 
     such assistance in determining the amount of any community 
     assessment credit under this subsection.''.
       (6) Prohibition on Double Funding for Same Activities.--
     Section 233 of the Bank Enterprise Act of 1991 (12 U.S.C. 
     1834a) is amended--
       (A) by redesignating subsection (g) as subsection (j); and
       (B) by inserting after subsection (f) the following new 
     subsection:
       ``(g) Prohibition on Double Funding for Same Activities.--
     No community development financial institution may receive a 
     community enterprise assessment credit if such institution, 
     either directly or through a community partnership--
       ``(1) has received assistance within the preceding 12-month 
     period, or has an application for assistance pending, under 
     section 105 of the Community Development Banking and 
     Financial Institutions Act of 1994; or
       ``(2) has ever received assistance, under section 108 of 
     the Community Development Banking and Financial Institutions 
     Act of 1994, for the same activity during the same semiannual 
     period for which the institution seeks a community enterprise 
     assessment credit under this section.''.
       (7) Additional administrative requirements.--Section 233 of 
     the Bank Enterprise Act of 1991 (12 U.S.C. 1834a) is amended 
     by inserting after subsection (g) (as added by paragraph (6) 
     of this subsection) the following new subsections:
       ``(h) Priority of Awards.--
       ``(1) Qualifying loans and services.--
       ``(A) In general.--If the amount of funds appropriated for 
     purposes of carrying out this section for any fiscal year are 
     insufficient to award the amount of assessment credits for 
     which insured depository institutions have applied and are 
     eligible under this section, the Board shall, in awarding 
     community enterprise assessment credits for qualifying 
     activities under subparagraphs (A) and (B) of subsection 
     (a)(2) for any semiannual period for which such appropriation 
     is available, determine which institutions shall receive an 
     award.
       ``(B) Priority for support of efforts of cdfi.--The Board 
     shall give priority to institutions that have supported the 
     efforts of community development financial institutions in 
     the qualified distressed community.
       ``(C) Other factors.--The Board may also consider the 
     following factors:
       ``(i) Degree of difficulty.--The degree of difficulty in 
     carrying out the activities that form the basis for the 
     institution's application.
       ``(ii) Community impact.--The extent to which the 
     activities that form the basis for the institution's 
     application have benefited the qualified distressed 
     community.
       ``(iii) Innovation.--The degree to which the activities 
     that form the basis for the institution's application have 
     incorporated innovative methods for meeting community needs.
       ``(iv) Leverage.--The leverage ratio between the dollar 
     amount of the activities that form the basis for the 
     institution's application and the amount of the assessment 
     credit calculated in accordance with this section for such 
     activities.
       ``(v) Size.--The amount of total assets of the institution.
       ``(vi) New entry.--Whether the institution had provided 
     financial services in the designated distressed community 
     before such semiannual period.
       ``(vii) Need for subsidy.--The degree to which the 
     qualified activity which forms the basis for the application 
     needs enhancement through an assessment credit.
       ``(viii) Extent of distress in community.--The degree of 
     poverty and unemployment in the designated distressed 
     community, the proportion of the total population of the 
     community which are low-income families and unrelated 
     individuals, and the extent of other adverse economic 
     conditions in such community.
       ``(2) Qualifying investments.--If the amount of funds 
     appropriated for purposes of carrying out this section for 
     any fiscal year are insufficient to award the amount of 
     assessment credits for which insured depository institutions 
     have applied and are eligible under this section, the Board 
     shall, in awarding community enterprise assessment credits 
     for qualifying activities under subsection (a)(2)(C) for any 
     semiannual period for which such appropriation is available, 
     determine which institutions shall receive an award based on 
     the leverage ratio between the dollar amount of the 
     activities that form the basis for the institution's 
     application and the amount of the assessment credit 
     calculated in accordance with this section for such 
     activities.
       ``(i) Determination of Amount of Assessment Credit.--
     Notwithstanding any other provision of this section, the 
     determination of the amount of any community enterprise 
     assessment credit under subsection (a)(3) for any insured 
     depository institution for any semiannual period shall be 
     made solely at the discretion of the Board. No insured 
     depository institution shall be awarded community enterprise 
     assessment credits for any semiannual period in excess of an 
     amount determined by the Board.''.
       (8) Additional definitions.--Subsection (j) of section 233 
     of the Bank Enterprise Act of 1991 (as redesignated by 
     paragraph (6) of this subsection) is amended by adding at the 
     end the following new paragraphs:
       ``(4) Community development financial institution.--The 
     term `community development financial institution' has the 
     same meaning as in section 103(5) of the Community 
     Development Banking and Financial Institutions Act of 1994.
       ``(5) Affiliate.--The term `affiliate' has the same meaning 
     as in section 2 of the Bank Holding Company Act of 1956.''.

     SEC. 115. RECORDKEEPING.

       (a) In General.--A community development financial 
     institution receiving assistance from the Fund shall keep 
     such records, for such periods as may be prescribed by the 
     Fund and necessary to disclose the manner in which any 
     assistance under this subtitle is used and to demonstrate 
     compliance with the requirements of this subtitle.
       (b) User Profile Information.--The Fund shall require each 
     community development financial institution or other 
     organization receiving assistance from the Fund to compile 
     such data, as is determined to be appropriate by the Fund, on 
     the gender, race, ethnicity, national origin, or 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.
       (c) 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 or other organization that receives assistance 
     from the Fund.
       (d) 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.
       (e) Reporting.--
       (1) 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.
       (2) Availability of reports.--The Fund, after deleting or 
     redacting any material as appropriate to protect privacy or 
     proprietary interests, shall make such reports submitted 
     under paragraph (1) available for public inspection.

     SEC. 116. SPECIAL PROVISIONS WITH RESPECT TO INSTITUTIONS 
                   THAT ARE SUPERVISED BY FEDERAL BANKING 
                   AGENCIES.

       (a) Consultation With Appropriate Agencies.--The Fund shall 
     consult with and consider the views of the appropriate 
     Federal banking agency prior to providing assistance under 
     this subtitle to--
       (1) an insured community development financial institution;
       (2) any community development financial institution that is 
     examined by or subject to the reporting requirements of an 
     appropriate Federal banking agency; or
       (3) any community development financial institution that 
     has as its community partner an institution that is examined 
     by or subject to the reporting requirements of an appropriate 
     Federal banking agency.
       (b) Requests for Information, Reports, or Records.--
       (1) In general.--Except as provided in paragraph (4), 
     notwithstanding any other provisions of this subtitle, prior 
     to directly requesting information from or imposing reporting 
     or recordkeeping requirements on an insured community 
     development financial institution or other institution that 
     is examined by or subject to the reporting requirements of an 
     appropriate Federal banking agency, the Fund shall consult 
     with the appropriate Federal banking agency to determine if 
     the information requested is available from or may be 
     obtained by such agency in the form, format, or detail 
     required by the Fund.
       (2) Timing of response from appropriate federal banking 
     agency.--If the information, reports, or records requested by 
     the Fund pursuant to paragraph (1) are not provided by the 
     appropriate Federal banking agency in less than 15 calendar 
     days after the date on which the material is requested, the 
     Fund may request the information from or impose the 
     recordkeeping or reporting requirements directly on such 
     institutions with notice to the appropriate Federal banking 
     agency.
       (3) Elimination of duplicative information and reporting 
     requirements.--The Fund shall use any information provided 
     the appropriate Federal banking agency under this section to 
     the extent practicable to eliminate duplicative requests for 
     information and reports from, and recordkeeping by an insured 
     community development financial institution or other 
     institution that is examined by or subject to the reporting 
     requirements of an appropriate Federal banking agency.
       (4) Exception.--Notwithstanding paragraphs (1) and (2), the 
     Fund may require an insured community development financial 
     institution or other institution that is examined by or 
     subject to the reporting requirements of an appropriate 
     Federal banking agency to provide information with respect to 
     the institution's implementation of its strategic plan or 
     compliance with the terms of its assistance agreement under 
     this subtitle, after providing notice to the appropriate 
     Federal banking agency.
       (c) Exclusion for Examination Reports.--Nothing in this 
     section shall be construed to permit the Fund to require an 
     insured community development financial institution or other 
     institution that is examined by or subject to the reporting 
     requirements of an appropriate Federal banking agency, to 
     obtain, maintain, or furnish an examination report of any 
     appropriate Federal banking agency or records contained in or 
     related to such a report.
       (d) Sharing of Information.--The Fund and the appropriate 
     Federal banking agency shall promptly notify each other of 
     material concerns about an insured community development 
     financial institution or other institution that is examined 
     by or subject to the reporting requirements of an appropriate 
     Federal banking agency, and share appropriate information 
     relating to such concerns.
       (e) Disclosure Prohibited.--Neither the Fund nor the 
     appropriate Federal banking agency shall disclose 
     confidential information obtained pursuant to this section 
     from any party without the written consent of that party.
       (f) Privilege Maintained.--The Fund, the appropriate 
     Federal banking agency, and any other party providing 
     information under this section shall not be deemed to have 
     waived any privilege applicable to any information or data, 
     or any portion thereof, by providing such information or data 
     to the other party or by permitting such data or information, 
     or any copies or portions thereof, to be used by the other 
     party.
       (g) Exceptions.--Nothing in this section shall authorize 
     the Fund or the appropriate Federal banking agency to 
     withhold information from the Congress or prevent it from 
     complying with a request for information from a Federal 
     department or agency in compliance with applicable law.
       (h) Sanctions.--
       (1) Notification.--The Fund shall notify the appropriate 
     Federal banking agency before imposing any sanction pursuant 
     to the authority in section 108(f)(2)(C) on an insured 
     community development financial institution or other 
     institution that is examined by or subject to the reporting 
     requirements of that agency.
       (2) Exceptions.--The Fund shall not impose a sanction 
     referred to in paragraph (1) if the appropriate Federal 
     banking agency, in writing, not later than 30 calendar days 
     after receiving notice from the Fund--
       (A) objects to the proposed sanction;
       (B) determines that the sanction would--
       (i) have a material adverse effect on the safety and 
     soundness of the institution; or
       (ii) impede or interfere with an enforcement action against 
     that institution by that agency;
       (C) proposes a comparable alternative action; and
       (D) specifically explains--
       (i) the basis for the determination under subparagraph (B) 
     and, if appropriate, provides documentation to support the 
     determination; and
       (ii) how the alternative action suggested pursuant to 
     subparagraph (C) would be as effective as the sanction 
     proposed by the Fund in securing compliance with this 
     subtitle and deterring future noncompliance.
       (i) Safety and Soundness Considerations.--The Fund and each 
     appropriate Federal banking agency shall cooperate and 
     respond to requests from each other and from other 
     appropriate Federal banking agencies in a manner that ensures 
     the safety and soundness of the insured community development 
     financial institution or other institution that is examined 
     by or subject to the reporting requirements of an appropriate 
     Federal banking agency.

     SEC. 117. STUDIES AND REPORTS; EXAMINATION AND AUDIT.

       (a) 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 and 
     other organizations 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 (f).
       (b) 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 subsection shall be included in the report required 
     by subsection (a).
       (c) Native American Lending Study.--
       (1) In general.--The Fund shall conduct a study on lending 
     and investment practices on Indian reservations and other 
     land held in trust by the United States. Such study shall--
       (A) identify barriers to private financing on such lands; 
     and
       (B) identify the impact of such barriers on access to 
     capital and credit for Native American populations.
       (2) Report.--Not later than 12 months after the date on 
     which the Administrator is appointed, the Fund shall submit a 
     report to the President and the Congress that--
       (A) contains the findings of the study conducted under 
     paragraph (1);
       (B) recommends any necessary statutory and regulatory 
     changes to existing Federal programs; and
       (C) 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.
       (d) Investment, Governance, and Role of Fund.--Thirty 
     months after the appointment and qualification of the 
     Administrator, the Comptroller General of the United States 
     shall submit to the President and the Congress a study 
     evaluating the structure, governance, and performance of the 
     Fund.
       (e) Consultation.--In the conduct of the studies required 
     under this section, the Fund shall consult, as appropriate, 
     with the Comptroller of the Currency, the Federal Deposit 
     Insurance Corporation, the Board of Governors of the Federal 
     Reserve System, the Federal Housing Finance Board, the Farm 
     Credit Administration, the Director of the Office of Thrift 
     Supervision, the National Credit Union Administration Board, 
     Indian tribal governments, community reinvestment 
     organizations, civil rights organizations, consumer 
     organizations, financial organizations, and such 
     representatives of agencies or other persons, at the 
     discretion of the Fund.
       (f) 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. 118. 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. 119. ENFORCEMENT.

       (a) Regulations.--
       (1) In general.--Not later than 180 days after the 
     appointment and qualification of the Administrator, the Fund 
     shall promulgate such regulations as may be necessary to 
     carry out this subtitle.
       (2) Regulations required.--The regulations promulgated 
     under paragraph (1) shall include regulations applicable to 
     community development financial institutions that are not 
     insured depository institutions to--
       (A) prevent conflicts of interest on the part of directors, 
     officers, and employees of community development financial 
     institutions as the Fund determines to be appropriate; and
       (B) establish such standards with respect to loans by a 
     community development financial institution to any director, 
     officer, or employee of such institution as the Fund 
     determines to be appropriate, including loan amount 
     limitations.
       (b) Administrative Enforcement.--The provisions of this 
     subtitle, and regulations prescribed and agreements entered 
     into under this subtitle, shall be enforced under section 8 
     of the Federal Deposit Insurance Act by the appropriate 
     Federal banking agency, in the case of an insured community 
     development financial institution. A violation of this 
     subtitle, or any regulation prescribed under or any agreement 
     entered into under this subtitle, shall be treated as a 
     violation of the Federal Deposit Insurance Act.
       (c) Criminal Provision.--Section 657 of title 18, United 
     States Code, is amended by inserting ``or any community 
     development financial institution receiving financial 
     assistance under the Riegle Community Development and 
     Regulatory Improvement Act of 1994,'' after ``small business 
     investment company,''.

     SEC. 120. 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. 121. AUTHORIZATION OF APPROPRIATIONS.

       (a) Fund Authorization.--
       (1) In general.--To carry out this subtitle, there are 
     authorized to be appropriated to the Fund, to remain 
     available until expended--
       (A) $60,000,000 for fiscal year 1995;
       (B) $104,000,000 for fiscal year 1996;
       (C) $107,000,000 for fiscal year 1997; and
       (D) $111,000,000 for fiscal year 1998;

     or such greater sums as may be necessary to carry out this 
     subtitle.
       (2) Administrative expenses.--
       (A) In general.--Of amounts authorized to be appropriated 
     to the Fund pursuant to this section, not more than 
     $5,550,000 may be used by the Fund in each fiscal year to pay 
     the administrative costs and expenses of the Fund. Costs 
     associated with the training program established under 
     section 109 and the technical assistance program established 
     under section 108 shall not be considered to be 
     administrative expenses for purposes of this paragraph.
       (B) Calculations.--The amounts referred to in paragraphs 
     (3) and (4) shall be calculated after subtracting the amount 
     referred to in subparagraph (A) of this paragraph from the 
     total amount appropriated to the Fund in accordance with 
     paragraph (1) in any fiscal year.
       (3) Capitalization assistance.--Not more than 5 percent of 
     the amounts authorized to be appropriated under paragraph (1) 
     may be used as provided in section 113.
       (4) Availability for funding section 114.--33\1/3\ percent 
     of the amounts appropriated to the Fund for any fiscal year 
     pursuant to the authorization in paragraph (1) shall be 
     available for use in carrying out section 114.
       (5) Support of community development financial 
     institutions.--The Administrator shall allocate funds 
     authorized under this section, to the maximum extent 
     practicable, for the support of community development 
     financial institutions.
       (b) 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) $4,000,000 for fiscal year 1995;
       (2) $2,000,000 for fiscal year 1996;
       (3) $2,000,000 for fiscal year 1997; and
       (4) $2,000,000 for fiscal year 1998.
       (c) 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. SHORT TITLE.

       This subtitle may be cited as the ``Home Ownership and 
     Equity Protection Act of 1994''.

     SEC. 152. CONSUMER PROTECTIONS FOR CERTAIN MORTGAGES.

       (a) Mortgage 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 
     yield on Treasury securities having comparable periods of 
     maturity on the fifteenth day of the month immediately 
     preceding the month in which the application for the 
     extension of credit is received by the creditor; 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)(A) After the 2-year period beginning on the effective 
     date of the regulations promulgated under section 155 of the 
     Riegle Community Development and Regulatory Improvement Act 
     of 1994, and no more frequently than biennially after the 
     first increase or decrease under this subparagraph, the Board 
     may by regulation increase or decrease the number of 
     percentage points specified in paragraph (1)(A), if the Board 
     determines that the increase or decrease is--
       ``(i) consistent with the consumer protections against 
     abusive lending provided by the amendments made by subtitle B 
     of title I of the Riegle Community Development and Regulatory 
     Improvement Act of 1994; and
       ``(ii) warranted by the need for credit.
       ``(B) An increase or decrease under subparagraph (A) may 
     not result in the number of percentage points referred to in 
     subparagraph (A) being--
       ``(i) less that 8 percentage points; or
       ``(ii) greater than 12 percentage points.
       ``(C) In determining whether to increase or decrease the 
     number of percentage points referred to in subparagraph (A), 
     the Board shall consult with representatives of consumers, 
     including low-income consumers, and lenders.
       ``(3) 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.
       ``(4) For purposes of paragraph (1)(B), points and fees 
     shall include--
       ``(A) all items included in the finance charge, except 
     interest or 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.
       ``(5) This subsection shall not be construed to limit the 
     rate of interest or the finance charge that a person may 
     charge a consumer for any extension of credit.''.
       (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) in the case of a credit transaction with a fixed rate 
     of interest, the annual percentage rate and the amount of the 
     regular monthly payment; or
       ``(B) in the case of any other credit transaction, the 
     annual percentage rate of the loan, the amount of the regular 
     monthly payment, a statement that the interest rate and 
     monthly payment may increase, and the amount of the maximum 
     monthly payment, based on the maximum interest rate allowed 
     pursuant to section 1204 of the Competitive Equality Banking 
     Act of 1987.
       ``(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.--
       ``(A) In general.--After providing the disclosures required 
     by this section, a creditor may not change the terms of the 
     extension of credit if such changes make the disclosures 
     inaccurate, unless new disclosures are provided that meet the 
     requirements of this section.
       ``(B) Telephone disclosure.--A creditor may provide new 
     disclosures pursuant to subparagraph (A) by telephone, if--
       ``(i) the change is initiated by the consumer; and
       ``(ii) at the consummation of the transaction under which 
     the credit is extended--

       ``(I) the creditor provides to the consumer the new 
     disclosures, in writing; and
       ``(II) the creditor and consumer certify in writing that 
     the new disclosures were provided by telephone, by not later 
     than 3 days prior to the date of consummation of the 
     transaction.

       ``(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.--
       ``(A) Limitation on terms.--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 before the date on which the principal is due.
       ``(B) Construction.--For purposes of this subsection, any 
     method of computing a refund of unearned scheduled interest 
     is a prepayment penalty if it is less favorable to the 
     consumer than the actuarial method (as that term is defined 
     in section 933(d) of the Housing and Community Development 
     Act of 1992).
       ``(2) Exception.--Notwithstanding paragraph (1), a mortgage 
     referred to in section 103(aa) may contain a prepayment 
     penalty (including terms calculating a refund by a method 
     that is not prohibited under section 933(b) of the Housing 
     and Community Development Act of 1992 for the transaction in 
     question) if--
       ``(A) at the time the mortgage is consummated--
       ``(i) the consumer is not liable for an amount of monthly 
     indebtedness payments (including the amount of credit 
     extended or to be extended under the transaction) that is 
     greater than 50 percent of the monthly gross income of the 
     consumer; and
       ``(ii) the income and expenses of the consumer are verified 
     by a financial statement signed by the consumer, by a credit 
     report, and in the case of employment income, by payment 
     records or by verification from the employer of the consumer 
     (which verification may be in the form of a copy of a pay 
     stub or other payment record supplied by the consumer);
       ``(B) the penalty applies only to a prepayment made with 
     amounts obtained by the consumer by means other than a 
     refinancing by the creditor under the mortgage, or an 
     affiliate of that creditor;
       ``(C) the penalty does not apply after the end of the 5-
     year period beginning on the date on which the mortgage is 
     consummated; and
       ``(D) the penalty is not prohibited under other applicable 
     law.
       ``(d) Limitations After Default.--A mortgage referred to in 
     section 103(aa) may not provide for an interest rate 
     applicable after default that is higher than the interest 
     rate that applies before default. If the date of maturity of 
     a mortgage referred to in subsection 103(aa) is accelerated 
     due to default and the consumer is entitled to a rebate of 
     interest, that rebate shall be computed by any method that is 
     not less favorable than the actuarial method (as that term is 
     defined in section 933(d) of the Housing and Community 
     Development Act of 1992).
       ``(e) 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.
       ``(f) 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.
       ``(g) 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.
       ``(h) Prohibition on Extending Credit Without Regard to 
     Payment Ability of Consumer.--A creditor shall not engage in 
     a pattern or practice of extending credit to consumers under 
     mortgages referred to in section 103(aa) based on the 
     consumers' collateral without regard to the consumers' 
     repayment ability, including the consumers' current and 
     expected income, current obligations, and employment.
       ``(i) Requirements for Payments Under Home Improvement 
     Contracts.--A creditor shall not make a payment to a 
     contractor under a home improvement contract from amounts 
     extended as credit under a mortgage referred to in section 
     103(aa), other than--
       ``(1) in the form of an instrument that is payable to the 
     consumer or jointly to the consumer and the contractor; or
       ``(2) at the election of the consumer, by a third party 
     escrow agent in accordance with terms established in a 
     written agreement signed by the consumer, the creditor, and 
     the contractor before the date of payment.
       ``(j) 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.
       ``(k) 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.
       ``(l) 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 (i), 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.--The Truth in Lending Act (15 
     U.S.C. 1601 et seq.) is amended--
       (A) in the second sentence of section 105(a), by striking 
     ``These'' and inserting ``Except in the case of a mortgage 
     referred to in section 103(aa), these'';
       (B) in section 111(a)(2), by inserting before the period 
     the following: ``, and such State-required disclosure may not 
     be made in lieu of the disclosures applicable to certain 
     mortgages under section 129''; and
       (C) in section 111(b)--
       (i) by striking ``This'' and inserting ``Except as provided 
     in section 129, this''; and
       (ii) by adding at the end the following: ``The provisions 
     of section 129 do not annul, alter, or affect the 
     applicability of the laws of any State or exempt any person 
     subject to the provisions of section 129 from complying with 
     the laws of any State, with respect to the requirements for 
     mortgages referred to in section 103(aa), except to the 
     extent that those State laws are inconsistent with any 
     provisions of section 129, and then only to the extent of the 
     inconsistency.''.

     SEC. 153. 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 documentation required by this 
     title, the itemization of the amount financed, and other 
     disclosure of disbursements that the mortgage was a mortgage 
     referred to in section 103(aa). The preceding sentence does 
     not affect rights of a consumer under subsection (a), (b), or 
     (c) of this section 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. 154. 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 or equity 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 credit extension 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 
     credit transaction 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 an application for the reverse 
     mortgage.
       ``(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 or equity 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) Home Equity Plan Exemption.--Section 137(b) of the 
     Truth in Lending Act (15 U.S.C. 1647(b)) is amended by adding 
     at the end the following:
     ``This subsection does not apply to reverse mortgage 
     transactions.''.
       (d) 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. 155. 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, and such regulations shall become effective on 
     the date on which disclosure regulations are required to 
     become effective under section 105(d) of the Truth in Lending 
     Act.

     SEC. 156. APPLICABILITY.

       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 152(a) of 
     this Act) consummated on or after the date on which 
     regulations issued under section 155 become effective.

     SEC. 157. FEDERAL RESERVE STUDY.

       During the period beginning 180 days after the date of 
     enactment of this Act and ending 2 years after that date of 
     enactment, the Board of Governors of the Federal Reserve 
     System shall conduct a study and submit to the Congress a 
     report, including recommendations for any appropriate 
     legislation, regarding--
       (1) whether a consumer engaging in an open end credit 
     transaction (as defined in section 103 of the Truth in 
     Lending Act) secured by the consumer's principal dwelling is 
     provided adequate protections under Federal law, including 
     section 127A of the Truth in Lending Act; and
       (2) whether a more appropriate interest rate index exists 
     for purposes of subparagraph (A) of section 103(aa)(1) of the 
     Truth in Lending Act (as added by section 152(a) of this Act) 
     than the yield on Treasury securities referred to in that 
     subparagraph.

     SEC. 158. HEARINGS ON HOME EQUITY LENDING.

       (a) Hearings.--Not less than once during the 3-year period 
     beginning on the date of enactment of this Act, and regularly 
     thereafter, the Board of Governors of the Federal Reserve 
     System, in consultation with the Consumer Advisory Council of 
     the Board, shall conduct a public hearing to examine the home 
     equity loan market and the adequacy of existing regulatory 
     and legislative provisions and the provisions of this 
     subtitle in protecting the interests of consumers, and low-
     income consumers in particular.
       (b) Participation.--In conducting hearings required by 
     subsection (a), the Board of Governors of the Federal Reserve 
     System shall solicit participation from consumers, 
     representatives of consumers, lenders, and other interested 
     parties.
               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' 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;
       ``(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 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. JOINT STUDY ON THE IMPACT OF ADDITIONAL SECURITIES 
                   BASED ON POOLED OBLIGATIONS.

       (a) Joint Study Required.--The Board and the Commission 
     shall conduct a joint study of the impact of the provisions 
     of this subtitle (including the amendments made by this 
     subtitle) on the credit and securities markets. Such study 
     shall evaluate--
       (1) the impact of the provisions of this subtitle on the 
     availability of credit for business and commercial 
     enterprises in general, and the availability of credit in 
     particular for--
       (A) businesses in low- and moderate-income areas;
       (B) businesses owned by women and minorities;
       (C) community development efforts;
       (D) community development financial institutions;
       (E) businesses in different geographical regions; and
       (F) a diversity of types of businesses;
       (2) the structure and operation of the markets that develop 
     for small business related securities and commercial mortgage 
     related securities, including the types of entities (such as 
     pension funds and insurance companies) that are significant 
     purchasers of such securities, the extent to which such 
     entities are sophisticated investors, the use of credit 
     enhancements in obtaining investment-grade ratings, any 
     conflicts of interest that arise in such markets, and any 
     adverse effects of such markets on commercial real estate 
     ventures, pension funds, or pension fund beneficiaries;
       (3) the extent to which the provisions of this subtitle 
     with regard to margin requirements, the number of eligible 
     investment rating categories, preemption of State law, and 
     the treatment of such securities as government securities for 
     the purpose of State investment limitations, affect the 
     structure and operation of such markets; and
       (4) in view of the findings made pursuant to paragraphs (2) 
     and (3), any additional suitability or disclosure 
     requirements or other investor protections that should be 
     required.
       (b) Reports.--
       (1) In general.--The Board and the Commission shall submit 
     to the Congress a report on the results of the study required 
     by subsection (a) before the end of--
       (A) the 2-year period beginning on the date of enactment of 
     this Act;
       (B) the 4-year period beginning on such date of enactment; 
     and
       (C) the 6-year period beginning on such date of enactment.
       (2) Contents of report.--Each report required under 
     paragraph (1) shall contain or be accompanied by such 
     recommendations for administrative or legislative action as 
     the Board and the Commission consider appropriate and may 
     include recommendations regarding the need to develop a 
     system for reporting additional information concerning 
     investments by the entities described in subsection (a)(2).
       (c) Definitions.--As used in this section--
       (1) the term ``Board'' means the Board of Governors of the 
     Federal Reserve System; and
       (2) the term ``Commission'' means the Securities and 
     Exchange Commission.

     SEC. 210. CONSISTENT USE OF FINANCIAL TERMINOLOGY.

       Not later than 2 years after the date of enactment of this 
     Act, the Financial Institutions Examination Council shall 
     report to the Congress on its recommendations for the use of 
     consistent financial terminology by depository institutions 
     for small business loans or leases of personal property which 
     are sold for the creation of small business related 
     securities (as defined in section 3(a)(53)(A) of the 
     Securities Exchange Act of 1934).
             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 ``Fund'' means the Community Development 
     Financial Institutions Fund established under section 104;
       (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 Fund determines has the capacity to 
     participate in the program.

     SEC. 253. APPROVING STATES FOR PARTICIPATION.

       (a) Application.--Any State may apply to the Fund for 
     approval to be a participating State under the Program and to 
     be eligible for reimbursement by the Fund pursuant to section 
     257.
       (b) Approval Criteria.--The Fund 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 Fund 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 Fund to be approved to be a participating 
     State. The Fund shall approve such State to be a 
     participating State, and to be eligible for reimbursements by 
     the Fund 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 Fund 
     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 
     Fund, 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 Fund shall not 
     approve a State for participation in the Program until at 
     least $50,000,000 has been appropriated to the Fund (subject 
     to an appropriations Act), without fiscal year limitation, 
     for the purpose of making reimbursements pursuant to section 
     257 and otherwise carrying out this subtitle.
       (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 Fund in accordance with subsection (b)(4). Any such 
     amendment shall become effective only after it has been 
     approved by the Fund.

     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 
     Fund.
       (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 
     Fund 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 Fund may notify the participating 
     State that henceforth, the Fund 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 Fund 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 Fund 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 Fund may 
     require.

     SEC. 257. REIMBURSEMENT BY THE FUND.

       (a) Reimbursements.--Not later than 30 calendar days after 
     receiving a report filed in compliance with section 256, the 
     Fund 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 Fund pursuant to section 256 and this 
     section. The Fund shall reimburse participating States, as it 
     receives reports pursuant to section 256(a), until available 
     funds are expended.
       (b) Size of Assisted Borrower.--The Fund 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 Fund 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 Fund 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 Fund 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 Fund 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 FUND.

       (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 Fund 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 Fund may use funds 
     reimbursed pursuant to this section to make reimbursements 
     under section 257.

     SEC. 259. REGULATIONS.

       The Fund shall promulgate appropriate regulations to 
     implement this subtitle.

     SEC. 260. AUTHORIZATION OF APPROPRIATIONS.

       (a) Amount.--There are authorized to be appropriated to the 
     Fund $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.

     SEC. 261. EFFECTIVE DATE.

       This subtitle shall become effective on January 6, 1996.
       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'', ``insured depository 
     institution'', and ``State bank supervisor'' 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.

       (a) Agency Considerations.--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.
       (b) Adequate Transition Period for New Regulations.--
       (1) In general.--New regulations and amendments to 
     regulations prescribed by a Federal banking agency which 
     impose additional reporting, disclosures, or other new 
     requirements on insured depository institutions shall take 
     effect on the first day of a calendar quarter which begins on 
     or after the date on which the regulations are published in 
     final form, unless--
       (A) the agency determines, for good cause published with 
     the regulation, that the regulation should become effective 
     before such time;
       (B) the regulation is issued by the Board of Governors of 
     the Federal Reserve System in connection with the 
     implementation of monetary policy; or
       (C) the regulation is required to take effect on a date 
     other than the date determined under this paragraph pursuant 
     to any other Act of Congress.
       (2) Early compliance.--Any person who is subject to a 
     regulation described in paragraph (1) may comply with the 
     regulation before the effective date of the regulation.

     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 the 
     principles of safety and soundness, statutory law and policy, 
     and the public interest--
       (1) conduct a review of the regulations and written 
     policies of that agency to--
       (A) streamline and modify those regulations and policies in 
     order to improve efficiency, reduce unnecessary costs, and 
     eliminate unwarranted constraints on credit availability;
       (B) remove inconsistencies and outmoded and duplicative 
     requirements; and
       (C) with respect to regulations prescribed pursuant to 
     section 18(o) of the Federal Deposit Insurance Act, consider 
     the impact that such standards have on the availability of 
     credit for small business, residential, and agricultural 
     purposes, and on low- and moderate-income communities;
       (2) work jointly with the other Federal banking agencies to 
     make uniform all regulations and guidelines implementing 
     common statutory or supervisory policies; and
       (3) submit a joint report to the Congress at the end of 
     such 2-year period detailing the progress of the agencies in 
     carrying out this subsection.
       (b) Review of Disclosures.--The Board of Governors of the 
     Federal Reserve System, in consultation with the consumer 
     advisory council to such Board, consumers, representatives of 
     consumers, lenders, and other interested persons, shall--
       (1) review the regulations and written policies of the 
     Board with respect to disclosures pursuant to the Truth in 
     Lending Act with regard to variable-rate mortgages in order 
     to simplify the disclosures, if necessary, and make the 
     disclosures more meaningful and comprehensible to consumers;
       (2) implement any necessary regulatory changes, consistent 
     with applicable law; and
       (3) not later than 2 years after completion of the review 
     required by paragraph (1), submit a report to the Congress on 
     the results of its actions taken in accordance with this 
     subsection and any recommended legislative actions.

     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.

       (a) In General.--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 paragraphs:
       ``(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 principles of safety 
     and soundness 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;
       ``(iii) work to coordinate with the appropriate State bank 
     supervisor--

       ``(I) the conduct of all examinations made pursuant to this 
     subsection; and
       ``(II) the number, types, and frequency of reports required 
     to be submitted to such agencies and supervisors by insured 
     depository institutions, and the type and amount of 
     information required to be included in such reports; and

       ``(iv) use copies of reports of examinations of insured 
     depository institutions made by any other Federal banking 
     agency or appropriate State bank supervisor to eliminate 
     duplicative requests for information; and
       ``(B) not later than 2 years after the date of enactment of 
     the Riegle Community Development and Regulatory Improvement 
     Act of 1994, the Federal banking agencies shall jointly 
     establish and implement a system for determining which one of 
     the Federal banking agencies shall be the lead agency 
     responsible for managing a unified examination of each 
     insured depository institution and its affiliates, as 
     required by this subsection.
       ``(7) Separate examinations permitted.--Notwithstanding 
     paragraph (6), each appropriate Federal banking agency may 
     conduct a separate examination in an emergency or under other 
     exigent circumstances, or when the agency believes that a 
     violation of law may have occurred.
       ``(8) Report.--At the time the system provided for in 
     paragraph (6) is established, the Federal banking agencies 
     shall submit a joint report describing the system 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. Thereafter, the 
     Federal banking agencies shall annually submit a joint 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 regarding the 
     progress of the agencies in implementing the system and 
     indicating areas in which enhancements to the system, 
     including legislature improvements, would be appropriate.''.
       (b) State Access to Federal Agency Reports.--The first 
     sentence of section 7(a)(2)(A) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1817(a)(2)(A)) is amended by 
     inserting ``and, with respect to any State depository 
     institution, any appropriate State bank supervisor for such 
     institution,'' after ``The Corporation''.

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

       (a) In General.--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'' and inserting 
     ``and its composite condition--
       ``(i) was found to be outstanding; or
       ``(ii) was found to be outstanding or good, in the case of 
     an insured depository institution that has total assets of 
     not more than $100,000,000;'';
       (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''.
       (b) Agency Discretion To Raise Asset Limit.--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:
       ``(8) Agencies authorized to increase maximum asset amount 
     of institutions for certain purposes.--At any time after the 
     end of the 2-year period beginning on the date of enactment 
     of the Riegle Community Development and Regulatory 
     Improvement Act of 1994, the appropriate Federal banking 
     agency, in the agency's discretion, may increase the maximum 
     amount limitation contained in paragraph (4)(C)(ii), by 
     regulation, from $100,000,000 to an amount not to exceed 
     $175,000,000 for purposes of such paragraph, if the agency 
     determines that the greater amount would be consistent with 
     the principles of safety and soundness for insured depository 
     institutions.''.

     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 5th 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 4th 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 4th 
     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 
     6th 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, OMBUDSMAN, AND 
                   ALTERNATIVE DISPUTE RESOLUTION.

       (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 that--
       (1) any appeal of a material supervisory determination by 
     an insured depository institution or insured credit union is 
     heard and decided expeditiously; and
       (2) 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 Board 
     shall provide public notice and opportunity for comment on 
     proposed guidelines for the establishment of an appellate 
     process under this section.
       (d) Agency Ombudsman.--
       (1) Establishment required.--Not later than 180 days after 
     the date of enactment of this Act, each Federal banking 
     agency and the National Credit Union Administration Board 
     shall appoint an ombudsman.
       (2) Duties of ombudsman.--The ombudsman appointed in 
     accordance with paragraph (1) for any agency shall--
       (A) act as a liaison between the agency and any affected 
     person with respect to any problem such party may have in 
     dealing with the agency resulting from the regulatory 
     activities of the agency; and
       (B) assure that safeguards exist to encourage complainants 
     to come forward and preserve confidentiality.
       (e) Alternative Dispute Resolution Pilot Program.--
       (1) In general.--Not later than 18 months after the date of 
     enactment of this Act, each Federal banking agency and the 
     National Credit Union Administration Board shall develop and 
     implement a pilot program for using alternative means of 
     dispute resolution of issues in controversy (hereafter in 
     this section referred to as the ``alternative dispute 
     resolution program'') that is consistent with the 
     requirements of subchapter IV of chapter 5 of title 5, United 
     States Code, if the parties to the dispute, including the 
     agency, agree to such proceeding.
       (2) Standards.--An alternative dispute resolution pilot 
     program developed under paragraph (1) shall--
       (A) be fair to all interested parties to a dispute;
       (B) resolve disputes expeditiously; and
       (C) be less costly than traditional means of dispute 
     resolution, including litigation.
       (3) Independent evaluation.--Not later than 18 months after 
     the date on which a pilot program is implemented under 
     paragraph (1), the Administrative Conference of the United 
     States shall submit to the Congress a report containing--
       (A) an evaluation of that pilot program;
       (B) the extent to which the pilot programs meet the 
     standards established under paragraph (2);
       (C) the extent to which parties to disputes were offered 
     alternative means of dispute resolution and the frequency 
     with which the parties, including the agencies, accepted or 
     declined to use such means; and
       (D) any recommendations of the Conference to improve the 
     alternative dispute resolution procedures of the Federal 
     banking agencies and the National Credit Union Administration 
     Board.
       (4) Implementation of program.--At any time after 
     completion of the evaluation under paragraph (3)(A), any 
     Federal banking agency and the National Credit Union 
     Administration Board may implement an alternative dispute 
     resolution program throughout the agency, taking into account 
     the results of that evaluation.
       (5) Coordination with existing agency adr programs.--
       (A) Evaluation required.--If any Federal banking agency or 
     the National Credit Union Administration maintains an 
     alternative dispute resolution program as of the date of 
     enactment of this Act under any other provision of law, the 
     Administrative Conference of the United States shall include 
     such program in the evaluation conducted under paragraph 
     (3)(A).
       (B) Multiple adr programs.--No provision of this section 
     shall be construed as precluding any Federal banking agency 
     or the National Credit Union Administration Board from 
     establishing more than 1 alternative means of dispute 
     resolution.
       (f) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Material supervisory determinations.--The term 
     ``material supervisory determinations''--
       (A) includes determinations relating to--
       (i) examination ratings;
       (ii) the adequacy of loan loss reserve provisions; and
       (iii) loan classifications on loans that are significant to 
     an institution; and
       (B) does not include a determination by a Federal banking 
     agency or the National Credit Union Administration Board to 
     appoint a conservator or receiver for an insured depository 
     institution or a liquidating agent for an insured credit 
     union, as the case may be, or a decision to take action 
     pursuant to section 38 of the Federal Deposit Insurance Act 
     or section 212 of the Federal Credit Union Act, as 
     appropriate.
       (2) Independent appellate process.--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.
       (3) Alternative means of dispute resolution.--The term 
     ``alternative means of dispute resolution'' has the meaning 
     given to such term in section 571 of title 5, United States 
     Code.
       (4) Issues in controversy.--The term ``issues in 
     controversy'' means--
       (A) any final agency decision involving any claim against 
     an insured depository institution or insured credit union for 
     which the agency has been appointed conservator or receiver 
     or for which a liquidating agent has been appointed, as the 
     case may be;
       (B) any final action taken by an agency in the agency's 
     capacity as conservator or receiver for an insured depository 
     institution or by the liquidating agent appointed for an 
     insured credit union; and
       (C) any other issue for which the appropriate Federal 
     banking agency or the National Credit Union Administration 
     Board determines that alternative means of dispute resolution 
     would be appropriate.
       (g) Effect on Other Authority.--Nothing in this section 
     shall affect the authority of an appropriate Federal banking 
     agency or the National Credit Union Administration Board to 
     take enforcement or supervisory action.

     SEC. 310. ELECTRONIC FILING OF CURRENCY TRANSACTION REPORTS.

       Section 123 of Public Law 91-508 (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.

       (a) 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. STAFF COMMENTARIES.

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

     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 1st sentence, by striking ``two thirds'' and 
     inserting ``a majority''.

     SEC. 314. HOLDING COMPANY AUDIT REQUIREMENTS.

       (a) In General.--Section 36(i) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1831m(i)) is amended--
       (1) by redesignating paragraph (1) as subparagraph (A) and 
     indenting appropriately;
       (2) by striking ``Except with respect'' and inserting the 
     following:
       ``(1) In general.--Except with respect''; and
       (3) by striking paragraph (2) and inserting the following:
       ``(B) the institution--
       ``(i) has total assets, as of the beginning of such fiscal 
     year, of less than $5,000,000,000; or
       ``(ii) has--

       ``(I) total assets, as of the beginning of such fiscal 
     year, of $5,000,000,000, or more; 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.

       ``(2) Large institutions.--For purposes of this subsection, 
     in the case of an insured depository institution described in 
     paragraph (1)(B)(ii) 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) Applicability based on risk to fund.--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 exemption provided by this 
     subsection, if it determines that such exemption would create 
     a significant risk to the affected deposit insurance fund if 
     applied to that institution.''.
       (b) Written Notice of Requirement for Audit of Quarterly 
     Reports.--Section 36(g)(2) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1831m(g)(2)) is amended by adding at the end 
     the following new subparagraph:
       ``(D) Notice to institution.--The Corporation shall 
     promptly notify an insured depository institution, in 
     writing, of a determination pursuant to subparagraph (A) to 
     require a review of such institution's quarterly financial 
     reports.''.

     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, and indent 
     appropriately;
       (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. MODIFICATION OF REGULATORY PROVISIONS.

       (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 
     Improvement Act of 1991) is amended to read as follows:
       ``(b) Asset Quality, Earnings, and Stock Valuation 
     Standards.--Each appropriate Federal banking agency shall 
     prescribe standards, by regulation or guideline, for all 
     insured depository institutions relating to asset quality, 
     earnings, and stock valuation that the agency determines to 
     be appropriate.''.
       (b) Establishing Standards.--Section 39(d) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1831p-1(d), as added by 
     section 132(a) of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991) is amended--
       (1) in the subsection heading, by striking ``by 
     Regulation''; and
       (2) in paragraph (1)--
       (A) in the 1st sentence, by inserting ``or guideline'' 
     before the period; and
       (B) in the 2d sentence, by inserting ``or guidelines'' 
     after ``Such regulations''.
       (c) Holding Companies Excluded From Scope of Standards.--
     Section 39 of the Federal Deposit Insurance Act (12 U.S.C. 
     1831p-1, as added by section 132(a) of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991) is amended--
       (1) in subsections (a), by striking ``and depository 
     institution holding companies''; and
       (2) in subsection (e)--
       (A) by striking ``or company'' each place such term 
     appears;
       (B) in paragraphs (1)(A) and (2), by striking ``or 
     depository institution holding company'';
       (C) in paragraph (1)(A)--
       (i) by striking ``or (b) the agency shall require'' and 
     inserting the following: ``or (b)--
       ``(i) if such standard is prescribed by regulation of the 
     agency, the agency shall require''; and
       (ii) by striking the period at the end and inserting the 
     following: ``; and
       ``(ii) if such standard is prescribed by guideline, the 
     agency may require the institution to submit a plan described 
     in clause (i).''; and
       (D) in paragraph (1)(C)(i), by striking ``and companies''.
       (d) Effective Date.--The amendments made by this section 
     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 
     Improvement Act of 1991.

     SEC. 319. EXPEDITED PROCEDURES.

       (a) Amendments to the Bank Holding Company Act.--The 2d 
     sentence of section 3(a) of the Bank Holding Company Act of 
     1956 (12 U.S.C. 1842(a)) is amended--
       (1) by striking ``or (B)'' and inserting ``(B)''; and
       (2) by inserting before the period the following: ``; or 
     (C) the acquisition, by a company, of control of a bank in a 
     reorganization in which a person or group of persons 
     exchanges their 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 they held in the bank 
     except for changes in shareholders' interests resulting from 
     the exercise of dissenting shareholders' rights under State 
     or Federal law if--
       ``(i) 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; and
       ``(II) the bank is adequately capitalized (as defined in 
     section 38 of the Federal Deposit Insurance Act);

       ``(ii) the holding company does not engage in any 
     activities other than those of managing and controlling banks 
     as a result of the reorganization;
       ``(iii) the company provides 30 days prior notice to the 
     Board and the Board does not object to such transaction 
     during such 30-day period; and
       ``(iv) the holding company will not acquire control of any 
     additional bank as a result of the reorganization.''.
       (b) Amendments to the Federal Deposit Insurance Act.--
     Section 5(d)(3) of the Federal Deposit Insurance Act (12 
     U.S.C. 1815(d)(3)) is amended--
       (1) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Conversions allowed.--Notwithstanding paragraph 
     (2)(A), and subject to the requirements of this paragraph, 
     any insured depository institution may participate in a 
     transaction described in clause (ii), (iii), or (iv) of 
     paragraph (2)(B) with the prior written approval of the 
     responsible agency under section 18(c)(2).'';
       (2) in subparagraph (E)--
       (A) in clause (i), by striking ``(and, in the event the 
     acquiring, assuming, or resulting depository institution is a 
     Bank Insurance Fund member which is a subsidiary of a bank 
     holding company, the Board)'';
       (B) in clause (ii), by striking ``or Board''; and
       (C) in clause (iv)--
       (i) by striking ``, and the appropriate Federal banking 
     agency for any depository institution holding company,'';
       (ii) by striking ``each''; and
       (iii) by striking ``, and any depository institution 
     holding company which controls such institution,'';
       (3) in subparagraph (F)--
       (A) by striking ``The Board'' and all that follows through 
     ``a Bank'' and inserting ``A Bank''; and
       (B) by striking ``unless the Board determines that'' and 
     inserting ``may not be the acquiring, assuming, or resulting 
     depository institution in a transaction under subparagraph 
     (A) unless''; and
       (4) by striking subparagraph (K).

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

       Section 3(a) of the Securities Act of 1933 (15 U.S.C. 
     77c(a)) is amended by adding at the end the following new 
     paragraph:
       ``(12) Any equity security issued in connection with the 
     acquisition by a holding company of a bank under section 3(a) 
     of the Bank Holding Company Act of 1956 or a savings 
     association under section 10(e) of the Home Owners' Loan Act, 
     if--
       ``(A) the acquisition occurs solely as part of a 
     reorganization in which security holders exchange their 
     shares of a bank or savings association for shares of a newly 
     formed holding company with no significant assets other than 
     securities of the bank or savings association and the 
     existing subsidiaries of the bank or savings association;
       ``(B) the security holders receive, after that 
     reorganization, substantially the same proportional share 
     interests in the holding company as they held in the bank or 
     savings association, except for nominal 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 
     holding company are substantially the same as those in the 
     bank or savings association prior to the transaction, other 
     than as may be required by law; and
       ``(D) the holding company has substantially the same assets 
     and liabilities, on a consolidated basis, as the bank or 
     savings association had prior to the transaction.

     For purposes of this paragraph, the term `savings 
     association' means a savings association (as defined in 
     section 3(b) of the Federal Deposit Insurance Act) the 
     deposits of which are insured by the Federal Deposit 
     Insurance Corporation.''.

     SEC. 321. REDUCTION OF POST-APPROVAL WAITING PERIODS FOR 
                   CERTAIN ACQUISITIONS AND MERGERS.

       (a) 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 4th 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''.
       (b) 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. 322. BANKERS' BANKS.

       (a) Ownership by Bankers' Banks.--
       (1) Section 5136.--Paragraph Seventh of section 5136 of the 
     Revised Statutes (12 U.S.C. 24) is amended in the 5th 
     proviso--
       (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, their holding companies, and the 
     officers, directors, and employees of such institutions and 
     companies, and in providing correspondent banking services at 
     the request of other depository institutions or their holding 
     companies (also referred to as a `banker's bank')''.
       (2) Section 5169.--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, their holding companies, and the 
     officers, directors, and employees of such institutions and 
     companies, and in providing correspondent banking services at 
     the request of other depository institutions or their holding 
     companies (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 2d 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'' 
     the first place such term appears 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. 323. 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. 324. MERGER TRANSACTION REPORTS.

       Section 18(c)(4) of the Federal Deposit Insurance Act (12 
     U.S.C. 1828(c)(4)) is amended by adding at the end the 
     following: ``Notwithstanding the preceding sentence, a 
     banking agency shall not be required to file a report 
     requested by the responsible agency under this paragraph if 
     such banking agency advises the responsible agency by the 
     applicable date under the preceding sentence that the report 
     is not necessary because none of the effects described in 
     paragraph (5) are likely to occur as a result of the 
     transaction.''.

     SEC. 325. 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. 326. 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) Exceptions From Repayment Requirement.--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.
       ``(b) Regulations.--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 inserting after 
     subsection (p) 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. 327. GAO REPORTS.

       Section 102(b)(1) of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991 (12 U.S.C. 1825 note) is 
     amended to read as follows:
       ``(1) Quarterly reporting.--Not later than 90 days after 
     the end of any calendar quarter in which the Federal Deposit 
     Insurance Corporation (hereafter in this section referred to 
     as the `Corporation') has any obligations pursuant to section 
     14 of the Federal Deposit Insurance Act outstanding, the 
     Comptroller General of the United States shall submit a 
     report on the Corporation's compliance at the end of that 
     quarter with section 15(c) of the Federal Deposit Insurance 
     Act 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. Such report shall be 
     included in the Comptroller General's audit report for that 
     year, as required by section 17 of the Federal Deposit 
     Insurance Act.''.

     SEC. 328. STUDY AND REPORT ON CAPITAL STANDARDS AND THEIR 
                   IMPACT ON THE ECONOMY.

       (a) In General.--The Secretary of the Treasury, in 
     consultation with the Federal banking agencies, shall conduct 
     a study of the effect that the implementation of risk-based 
     capital standards for depository institutions, including the 
     Basle international capital standards, is having on--
       (1) the safety and soundness of insured depository 
     institutions;
       (2) the availability of credit, particularly to individuals 
     and small businesses; and
       (3) economic growth.
       (b) Report.--
       (1) In general.--Before the end of the 1-year period 
     beginning on the date of enactment of this Act, the Secretary 
     of the Treasury shall submit a report to the Congress on the 
     findings and conclusions of the Secretary with respect to the 
     study conducted under subsection (a).
       (2) Recommendations.--The report shall contain any 
     recommendations with respect to capital standards that the 
     Secretary of the Treasury may determine to be appropriate.

     SEC. 329. STUDY 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 and the National Credit Union 
     Administration Board, shall conduct a study and report to the 
     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. 330. STUDY AND REPORT ON THE CONSUMER CREDIT SYSTEM.

       (a) Study.--The Secretary of the Treasury, in consultation 
     with the Board of Governors of the Federal Reserve System, 
     the Administrator of the Small Business Administration, the 
     Secretary of Housing and Urban Development, and the other 
     Federal banking agencies, shall conduct a study of the 
     process, including any Federal laws, by which credit is made 
     available for consumers and small businesses in order to 
     identify procedures, including any Federal laws, which have 
     the effect of--
       (1) reducing the amount of credit available for such 
     purposes or the number of persons eligible for such credit;
       (2) increasing the level of consumer inconvenience, cost, 
     and time delays in connection with the extension of consumer 
     and small business credit without corresponding benefit with 
     respect to the protection of consumers or small businesses or 
     the safety and soundness of insured depository institutions; 
     and
       (3) increasing costs and burdens on insured depository 
     institutions, insured credit unions, and other lenders 
     without corresponding benefit with respect to the protection 
     of consumers or small business concerns or to the safety and 
     soundness of insured institutions.
       (b) Report.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit a report to the Congress on the findings and 
     conclusions of the Secretary with respect to the study 
     conducted under subsection (a).
       (2) Recommendations.--The report required by paragraph (1) 
     shall contain any recommendations for administrative action 
     or statutory changes that the Secretary of the Treasury may 
     determine to be appropriate.
       (c) Public Participation.--In conducting the study required 
     by subsection (a), comments shall be solicited from 
     consumers, representatives of consumers, insured depository 
     institutions, insured credit unions, other lenders, and other 
     interested parties.

     SEC. 331. CLARIFICATION OF PROVISIONS RELATING TO 
                   ADMINISTRATIVE AUTONOMY.

       (a) Public Law 93-495.--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. The Secretary of the Treasury may not delay or prevent 
     the issuance of any rule or the promulgation of any 
     regulation by the Comptroller of the Currency.''.
       (3) Section 5239.--Section 5239 of the Revised Statutes (12 
     U.S.C. 93) is amended by adding 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.''.
       (c) Amendments to the Home Owners' Loan Act.--Section 3(b) 
     of the Home Owners' Loan Act (12 U.S.C. 1462a(b)) is 
     amended--
       (1) in paragraph (3), by striking ``unless otherwise 
     provided by law'' and inserting ``(including agency 
     enforcement actions) unless otherwise specifically provided 
     by law''; and
       (2) by adding at the end the following new paragraph:
       ``(4) Banking agency rulemaking.--The Secretary of the 
     Treasury may not delay or prevent the issuance of any rule or 
     the promulgation of any regulation by the Director.''.
       (d) Amendment to the Federal Reserve Act.--Section 11 of 
     the Federal Reserve Act (12 U.S.C. 248) is amended by adding 
     at the end the following new subsection:
       ``(p) Authority.--The Board may act in its own name and 
     through its own attorneys in enforcing any provision of this 
     title, regulations promulgated hereunder, or any other law or 
     regulation, or in any action, suit, or proceeding to which 
     the Board is a party and which involves the Board's 
     regulation or supervision of any bank, bank holding company 
     (as defined in section 2 of the Bank Holding Company Act of 
     1956), or other entity, or the administration of its 
     operations.''.
       (e) Amendment to the Federal Deposit Insurance Act.--
     Section 9(a) of the Federal Deposit Insurance Act (12 U.S.C. 
     1819(a)) is amended in paragraph Fourth, by inserting ``by 
     and through its own attorneys,'' after ``complain and 
     defend,''.

     SEC. 332. 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. 333. STUDY ON CHECK-RELATED FRAUD.

       (a) Study.--The Board of Governors of the Federal Reserve 
     System (hereafter in this section referred to as the 
     ``Board'') shall conduct a study on the advisability of 
     extending the 1-business-day period specified in section 
     603(b)(1) of the Expedited Funds Availability Act, regarding 
     availability of funds deposited by local checks, to 2 
     business days.
       (b) Considerations.--In conducting the study under 
     subsection (a), the Board shall consider--
       (1) whether there is a pattern of significant increases in 
     check-related losses at depository institutions attributable 
     to the provisions of the Expedited Funds Availability Act; 
     and
       (2) whether extension of the time period referred to in 
     subsection (a) is necessary to diminish the volume of any 
     such check-related losses.
       (c) Report to the Congress.--Not later than 2 years after 
     the date of enactment of this Act, the Board shall submit a 
     report to the Congress concerning the results of the study 
     conducted under this section and including any 
     recommendations for legislative action.

     SEC. 334. INSIDER LENDING.

       (a) Loans to Executive Officers by Member Banks.--Section 
     22(g)(2) of the Federal Reserve Act (12 U.S.C. 375a(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(8)) is amended--
       (1) by striking ``member bank.--For'' and inserting the 
     following: ``member bank.--
       ``(A) In general.--For''; and
       (2) by adding at the end the following:
       ``(B) Exception.--The Board may, by regulation, make 
     exceptions to subparagraph (A), except as that subparagraph 
     makes applicable paragraph (2), for an executive officer or 
     director of a subsidiary of a company that controls the 
     member bank, if that executive officer or director does not 
     have authority to participate, and does not participate, in 
     major policymaking functions of the member bank.''.

     SEC. 335. 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. 336. ALTERNATIVE RULES FOR RADIO ADVERTISING.

       (a) Amendment to the Truth in Lending Act.--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;
       ``(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 a period of 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 
     verbally 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 medium other than 
     radio broadcast.''.
       (b) Study of Advertising Rules.--Not later than 365 days 
     after the date of enactment of this Act, the Board of 
     Governors of the Federal Reserve System shall submit a report 
     to the Congress on--
       (1) the current rules applicable to credit advertising;
       (2) how such rules could be modified to increase consumer 
     benefit and decrease creditor costs; and
       (3) how such rules could be modified, if at all, for radio 
     advertisements without diminishing consumer protection.

     SEC. 337. 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 (as defined 
     in section 38)'' 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. 338. AMENDMENTS TO THE DEPOSITORY INSTITUTION MANAGEMENT 
                   INTERLOCKS ACT.

       (a) Management Exemption.--Section 206 of the Depository 
     Institution Management Interlocks Act (12 U.S.C. 3205) is 
     amended--
       (1) in subsections (a) and (b), by striking ``15 years 
     after the date of enactment of this title'' each place it 
     appears and inserting ``, subject to the requirements of 
     subsection (c), 20 years after the date of enactment of this 
     title''; and
       (2) by adding at the end the following new subsection:
       ``(c) Review of Existing Management Interlocks.--Upon the 
     timely filing of a submission by a person petitioning to 
     serve as a management official in more than 1 position 
     pursuant to subsection (a) or (b), each appropriate Federal 
     depository institutions regulatory agency shall, not later 
     than 6 months after the date of enactment of this Act--
       ``(1) review, on a case-by-case basis, the circumstances 
     under which such person has served as a management official 
     under the provisions of subsection (a) or (b); and
       ``(2) permit the management official to continue to serve 
     in such position only if--
       ``(A) such person has provided a resolution from the boards 
     of directors of each affected depository institution, 
     depository holding company, or company described in 
     subsection (b), certifying to the appropriate Federal 
     depository institutions regulatory agency for each of the 
     institutions involved that there is no other qualified 
     candidate from the community described in paragraph (1) or 
     (2) of section 203 who--
       ``(i) possesses the level of expertise necessary for such 
     service with respect to the affected depository institution, 
     depository holding company, or company described in 
     subsection (b); and
       ``(ii) is willing to serve as a management official at the 
     affected depository institution, depository holding company, 
     or company described in subsection (b); and
       ``(B) the appropriate Federal depository institutions 
     regulatory agency determines that continuation of service by 
     the management official does not produce an anticompetitive 
     effect with respect to each affected depository institution, 
     depository holding company, or company described in 
     subsection (b).''.
       (b) Amendments to Section 209.--Section 209 of the 
     Depository Institution Management Interlocks Act (12 U.S.C. 
     3207) is amended--
       (1) by striking ``Rules'' and inserting ``(a) In General.--
     Rules'';
       (2) by striking ``, including rules or regulations which 
     permit service by a management official which would otherwise 
     be prohibited by section 203 or section 204,''; and
       (3) by adding at the end the following new subsections:
       ``(b) Regulatory Standards.--An appropriate Federal 
     depository institution regulatory agency may permit, on a 
     case-by-case basis, service by a management official which 
     would otherwise be prohibited by section 203 or 204 only if--
       ``(1) the board of directors of the affected depository 
     institution, depository institution holding company, or 
     company described in section 206(b), provides a resolution to 
     the appropriate Federal depository institutions regulatory 
     agency certifying that there is no other candidate from the 
     community described in paragraph (1) or (2) of section 203 
     who--
       ``(A) possesses the level of expertise necessary for such 
     service with respect to the affected depository institution, 
     depository institution holding company, or company described 
     in section 206(b) and is not prohibited from service under 
     section 203 or 204; and
       ``(B) is willing to serve as a management official at the 
     affected depository institution, depository institution 
     holding company, or company described in section 206(b); and
       ``(2) the appropriate Federal depository institutions 
     regulatory agency determines that--
       ``(A) the management official is critical to the safe and 
     sound operations of the affected depository institution, 
     depository institution holding company, or company described 
     in section 206(b);
       ``(B) continuation of service by the management official 
     does not produce an anticompetitive effect with respect to 
     the affected depository institution, depository institution 
     holding company, or company described in section 206(b); and
       ``(C) the management official meets such additional 
     requirements as the agency may impose.
       ``(c) Limited Exception for Management Official Consignment 
     Program.--
       ``(1) In general.--Notwithstanding the requirements of 
     subsection (b), an appropriate Federal depository 
     institutions regulatory agency may establish a program to 
     permit, on a case-by-case basis, service by a management 
     official which would otherwise be prohibited by section 203 
     or 204, for a period of not more than 2 years, if the agency 
     determines that such service would--
       ``(A) improve the provision of credit to low- and moderate-
     income areas;
       ``(B) increase the competitive position of minority- and 
     woman-owned institutions; or
       ``(C) strengthen the management of newly chartered 
     institutions that are in an unsafe or unsound condition.
       ``(2) Extension of service period.--The appropriate Federal 
     depository institutions regulatory agency may extend the 2-
     year period referred to in paragraph (1) for one additional 
     period of not more than 2 years, subject to making a new 
     determination described in subparagraphs (A) through (C) of 
     paragraph (1).''.

     SEC. 339. ADVERSE INFORMATION ABOUT CONSUMERS.

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

     SEC. 340. 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 not later than September 12, 
     1994.
       ``(II) Second notice.--Make a second 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) which has been signed by the 
     depositor.
       ``(III) Third notice.--Make a third 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) 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. 341. FEASIBILITY STUDY OF DATA BANK.

       (a) In General.--Not later than 18 months after the date of 
     enactment of this Act, the Federal Financial Institutions 
     Examination Council shall--
       (1) study the feasibility, including the costs and benefits 
     to insured depository institutions, of establishing and 
     maintaining a data bank for reports submitted by any 
     depository institution to a Federal banking agency; and
       (2) report the results of such study to the Congress.
       (b) Additional Factors.--The study required under 
     subsection (a) shall consider the feasibility of--
       (1) permitting depository institutions to file reports 
     directly with the data bank; and
       (2) permitting Federal banking agencies, State bank 
     supervisors, and the public to obtain access to any 
     appropriate report on file with the data bank which such 
     agency or supervisor or the public is otherwise authorized to 
     receive.

     SEC. 342. TIMELY COMPLETION OF CRA REVIEW.

       The comprehensive regulatory review of the Community 
     Reinvestment Act of 1977 that, as of the date of enactment of 
     this Act, is being conducted by the Federal banking agencies, 
     shall be completed at the earliest practicable time.

     SEC. 343. TIME LIMIT ON AGENCY CONSIDERATION OF COMPLETED 
                   APPLICATIONS.

       (a) In General.--Each Federal banking agency shall take 
     final action on any application to the agency before the end 
     of the 1-year period beginning on the date on which a 
     completed application is received by the agency.
       (b) Waiver by Applicant Authorized.--Any person submitting 
     an application to a Federal banking agency may waive the 
     applicability of subsection (a) with respect to such 
     application at any time.

     SEC. 344. WAIVER OF RIGHT OF RESCISSION FOR CERTAIN 
                   REFINANCING TRANSACTIONS.

       Not later than 6 months after the date of enactment of this 
     Act, the Board of Governors of the Federal Reserve System, in 
     consultation with the consumer advisory council to such 
     Board, consumers, representatives of consumers, lenders, and 
     other interested parties, shall submit recommendations to the 
     Congress regarding whether a waiver or modification, at the 
     option of a consumer, of the right of rescission under 
     section 125 of the Truth in Lending Act with respect to 
     transactions which constitute a refinancing or consolidation 
     (with no new advances) of the principal balance then due, and 
     any accrued and unpaid finance charges of an existing 
     extension of credit by a different creditor secured by an 
     interest in the same property, would benefit consumers.

     SEC. 345. CLARIFICATION OF RESPA DISCLOSURE REQUIREMENTS.

       Section 6(a)(1)(B) of the Real Estate Settlement Procedures 
     Act of 1974 (12 U.S.C. 2605(a)(1)(B)) is amended--
       (1) by striking ``(B) for each of the most recent'' and 
     inserting ``(B) at the choice of the person making a 
     federally related mortgage loan--
       ``(i) for each of the most recent'';
       (2) by redesignating clauses (i) and (ii) as subclauses (I) 
     and (II), respectively, and indenting appropriately;
       (3) by striking ``and'' at the end of subclause (II) (as 
     redesignated by paragraph (2)) and inserting ``or''; and
       (4) by inserting after clause (i) (as redesignated by 
     paragraph (1)) the following new clause:
       ``(ii) a statement that the person making the loan has 
     previously assigned, sold, or transferred the servicing of 
     federally related mortgage loans; and''.

     SEC. 346. NOTICE PROCEDURES FOR BANK HOLDING COMPANIES TO 
                   SEEK APPROVAL TO ENGAGE IN CERTAIN ACTIVITIES.

       Section 4 of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1843) is amended--
       (1) by adding at the end the following new subsection:
       ``(j) Notice Procedures for Nonbanking Activities.--
       ``(1) General notice procedure.--
       ``(A) Notice requirement.--No bank holding company may 
     engage in any nonbanking activity or acquire or retain 
     ownership or control of the shares of a company engaged in 
     activities based on subsection (c)(8) or (a)(2) without 
     providing the Board with written notice of the proposed 
     transaction or activity at least 60 days before the 
     transaction or activity is proposed to occur or commence.
       ``(B) Contents of notice.--The notice submitted to the 
     Board shall contain such information as the Board shall 
     prescribe by regulation or by specific request in connection 
     with a particular notice.
       ``(C) Procedure for agency action.--
       ``(i) Notice of disapproval.--Any notice filed under this 
     subsection shall be deemed to be approved by the Board 
     unless, before the end of the 60-day period beginning on the 
     date the Board receives a complete notice under subparagraph 
     (A), the Board issues an order disapproving the transaction 
     or activity and setting forth the reasons for disapproval.
       ``(ii) Extension of period.--The Board may extend the 60-
     day period referred to in clause (i) for an additional 30 
     days. The Board may further extend the period with the 
     agreement of the bank holding company submitting the notice 
     pursuant to this subsection.
       ``(iii) Determination of period in case of public 
     hearing.--In the event a hearing is requested or the Board 
     determines that a hearing is warranted, the Board may extend 
     the notice period provided in this subsection for such time 
     as is reasonably necessary to conduct a hearing and to 
     evaluate the hearing record. Such extension shall not exceed 
     the 91-day period beginning on the date that the hearing 
     record is complete.
       ``(D) Approval before end of period.--
       ``(i) In general.--Any transaction or activity may commence 
     before the expiration of any period for disapproval 
     established under this paragraph if the Board issues a 
     written notice of approval.
       ``(ii) Shorter periods by regulation.--The Board may 
     prescribe regulations which provide for a shorter notice 
     period with respect to particular activities or transactions.
       ``(E) Extension of period.--In the case of any notice to 
     engage in, or to acquire or retain ownership or control of 
     shares of any company engaged in, any activity pursuant to 
     subsection (c)(8) or (a)(2) that has not been previously 
     approved by regulation, the Board may extend the notice 
     period under this subsection for an additional 90 days. The 
     Board may further extend the period with the agreement of the 
     bank holding company submitting the notice pursuant to this 
     subsection.
       ``(2) General standards for review.--
       ``(A) Criteria.--In connection with a notice under this 
     subsection, the Board shall consider whether performance of 
     the activity by a bank holding company or a subsidiary of 
     such company can reasonably be expected to produce benefits 
     to the public, such as greater convenience, increased 
     competition, or gains in efficiency, that outweigh possible 
     adverse effects, such as undue concentration of resources, 
     decreased or unfair competition, conflicts of interests, or 
     unsound banking practices.
       ``(B) Grounds for disapproval.--The Board may deny any 
     proposed transaction or activity for which notice has been 
     submitted pursuant to this subsection if the bank holding 
     company submitting such notice neglects, fails, or refuses to 
     furnish the Board all the information required by the Board.
       ``(C) Conditional action.--Nothing in this subsection 
     limits the authority of the Board to impose conditions in 
     connection with an action under this section.''; and
       (2) in subsection (c), by striking the penultimate 
     sentence.

     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. CLARIFYING AMENDMENT RELATING TO DATA COLLECTION.

       Section 7(a)(9) of the Federal Deposit Insurance Act (12 
     U.S.C. 1817(a)(9)) is amended by adding at the end the 
     following: ``In prescribing reporting and other requirements 
     for the collection of actual and accurate information 
     pursuant to this paragraph, the Corporation shall minimize 
     the regulatory burden imposed upon insured depository 
     institutions that are well capitalized (as defined in section 
     38) while taking into account the benefit of the information 
     to the Corporation, including the use of the information to 
     enable the Corporation to more accurately determine the total 
     amount of insured deposits in each insured depository 
     institution for purposes of compliance with this Act.''.

     SEC. 349. GUIDELINES FOR EXAMINATIONS.

       (a) Adequacy of State 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:
       ``(9) Standards for determining adequacy of state 
     examinations.--The Federal Financial Institutions Examination 
     Council shall issue guidelines establishing standards to be 
     used at the discretion of the appropriate Federal banking 
     agency for purposes of making a determination under paragraph 
     (3).''.
       (b) Effective Date of Initial Guidelines.--The initial 
     guidelines required to be issued pursuant to the amendment 
     made by subsection (a) shall become effective not later than 
     1 year after the date of enactment of this Act.

     SEC. 350. REVISING REGULATORY REQUIREMENTS FOR TRANSFERS OF 
                   ALL TYPES OF ASSETS WITH RECOURSE.

       (a) Review and Revision of Regulations.--
       (1) In general.--During the 180-day period beginning on the 
     date of enactment of this Act, each appropriate Federal 
     banking agency shall, consistent with the principles of 
     safety and soundness and the public interest--
       (A) review the agency's regulations and written policies 
     relating to transfers of assets with recourse by insured 
     depository institutions; and
       (B) in consultation with the other Federal banking 
     agencies, promulgate regulations that better reflect the 
     exposure of an insured depository institution to credit risk 
     from transfers of assets with recourse.
       (2) Regulations required.--Before the end of the 180-day 
     period beginning on the date of enactment of this Act, each 
     appropriate Federal banking agency shall prescribe the 
     regulations developed pursuant to paragraph (1)(B).
       (b) Regulations Required.--
       (1) In general.--After the end of the 180-day period 
     beginning on the date of enactment of this Act, the amount of 
     risk-based capital required to be maintained, under 
     regulations prescribed by the appropriate Federal banking 
     agency, by any insured depository institution with respect to 
     assets transferred with recourse by such institution may not 
     exceed the maximum amount of recourse for which such 
     institution is contractually liable under the recourse 
     agreement.
       (2) Exception for safety and soundness.--The appropriate 
     Federal banking agency may require any insured depository 
     institution to maintain risk-based capital in an amount 
     greater than the amount determined under paragraph (1), if 
     the agency determines, by regulation or order, that such 
     higher amount is necessary for safety and soundness reasons.
       (c) Coordination With Section 208(b).--This section shall 
     not be construed as superseding the applicability of section 
     208(b).
       (d) Definitions.--For purposes of this section, the terms 
     ``appropriate Federal banking agency'', ``Federal banking 
     agency'', and ``insured depository institution'' have the 
     same meanings as in section 3 of the Federal Deposit 
     Insurance Act.
                       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)(6), a depository 
     institution from the reporting requirements of subsection (a) 
     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.
       ``(C) 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 or any such State or political subdivision.
       ``(D) 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 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).
       ``(e) Discretionary Exemptions From Reporting 
     Requirements.--
       ``(1) In general.--The Secretary of the Treasury may 
     exempt, pursuant to section 5318(a)(6), a depository 
     institution from the reporting requirements of subsection (a) 
     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
       ``(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 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)(6), 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'--
       ``(1) has the meaning given to such term in section 
     19(b)(1)(A) of the Federal Reserve Act; and
       ``(2) includes--
       ``(A) any branch, agency, or commercial lending company (as 
     such terms are defined in section 1(b) of the International 
     Banking Act of 1978);
       ``(B) any corporation chartered under section 25A of the 
     Federal Reserve Act; and
       ``(C) any corporation having an agreement or undertaking 
     with the Board of Governors of the Federal Reserve System 
     under section 25 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 at least 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 filed with the Secretary pursuant to section 5313(a) 
     of title 31, United States Code, consistent 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--
       (1) redesign the format of reports required to be filed 
     under section 5313(a) of title 31, United States Code, by any 
     financial institution (as defined in section 5312(a)(2) of 
     such title) to eliminate the need to report information which 
     has little or no value for law enforcement purposes; and
       (2) 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 any 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 
     other applicable provision of law.''.
       (b) Reports.--
       (1) Reports required.--The Secretary of the Treasury shall 
     submit an annual report to the Congress at the times required 
     under paragraph (2) on the number of suspicious transactions 
     reported to the officer or agency designated under section 
     5318(g)(4)(A) of title 31, United States Code, during the 
     period covered by the report and the disposition of such 
     reports.
       (2) Time for submitting reports.--The 1st report required 
     under paragraph (1) 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 within 90 days after the end of each of the 5 
     calendar years which begin after such date of enactment.
       (c) 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 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 provide, on a 
     regular basis, information regarding money laundering schemes 
     and activities involving depository institutions to each 
     appropriate Federal banking agency in order to enhance each 
     agency's ability to examine for and identify money laundering 
     activity.
       (c) Report to Congress.--The Financial Institutions 
     Examination Council shall submit a report on the progress 
     made in carrying out subsection (a) and the usefulness of 
     information received pursuant to subsection (b) to the 
     Congress by the end of the 1-year period beginning on the 
     date of enactment of this Act.
       (d) Definition.--For purposes of this section, the term 
     ``appropriate Federal banking agency'' has the same meaning 
     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 (as defined in section 3 of the 
     Federal Deposit Insurance Act) to the appropriate Federal 
     banking agencies (as defined in such section 3).
       ``(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).''.

     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 
     5313(g) of title 31, United States Code); 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) Reporting requirements.--A requirement that any 
     business described in subsection (a)(1)--
       (A) disclose to the appropriate State agency the fees 
     charged to consumers for services described in subsection 
     (a)(1)(A); and
       (B) conspicuously disclose to the public, at each location 
     of such business, the fees charged to consumers for such 
     services.
       (4) 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).
       (5) 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 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.--Not later than the end of the 3-year 
     period beginning on the date of enactment of this Act and not 
     later than 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 to--
       (1) enact a statute which meets the requirements described 
     in subsection (b);
       (2) undertake adequate activity to enforce such statute; or
       (3) make adequate resources available to the appropriate 
     State agency for such enforcement activity,

     the report submitted pursuant to subsection (d) shall contain 
     recommendations of the Secretary which are designed to 
     facilitate the enactment and enforcement by the State 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 which will be incurred by the 
     States in carrying out the purposes of this section.
       (2) Report.--The Secretary of the Treasury shall submit a 
     report to the Congress on the study conducted pursuant to 
     paragraph (1) not later than 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 hereby 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 such subchapter II, 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. 5330. 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 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 not later 
     than the end of the 180-day period beginning on the later 
     of--
       ``(A) the date of enactment of the Money Laundering 
     Suppression Act of 1994; or
       ``(B) the date on which the business is established.
       ``(2) Form and manner of registration.--Subject to the 
     requirements of subsection (b), the Secretary of the Treasury 
     shall prescribe, by regulation, 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 subchapter.
       ``(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 in the coming 
     year (which shall be reported annually to the Secretary).
       ``(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, the 
     following definitions shall apply:
       ``(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 5313(g)).
       ``(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 any 
     requirement of this section or any regulation prescribed 
     under this section 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 5330 of title 31, 
     United States Code, or regulations prescribed under such 
     section;''.
       (d) 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 5329 (as added by section 
     311) the following new item:

``5330. Registration of money transmitting businesses.''.

     SEC. 409. UNIFORM FEDERAL REGULATION OF CASINOS.

       Section 5312(a)(2) of title 31, United States Code, is 
     amended--
       (1) by redesignating subparagraphs (X) and (Y) as 
     subparagraphs (Y) and (Z), respectively; and
       (2) by inserting after subparagraph (W) the following new 
     subparagraph:
       ``(X) a casino, gambling casino, or gaming establishment 
     with an annual gaming revenue of more than $1,000,000 which--
       ``(i) is licensed as a casino, gambling casino, or gaming 
     establishment under the laws of any State or any political 
     subdivision of any State; or
       ``(ii) is an Indian gaming operation conducted under or 
     pursuant to the Indian Gaming Regulatory Act other than an 
     operation which is limited to class I gaming (as defined in 
     section 4(6) of such Act);''.

     SEC. 410. AUTHORITY TO GRANT EXEMPTIONS TO STATES WITH 
                   EFFECTIVE REGULATION AND ENFORCEMENT.

       (a) In General.--Section 5318(a) of title 31, United States 
     Code, is amended--
       (1) by striking ``and'' at the end of paragraph (4);
       (2) by redesignating paragraph (5) as paragraph (6); and
       (3) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) exempt from the requirements of this subchapter any 
     class of transactions within any State if the Secretary 
     determines that--
       ``(A) under the laws of such State, that class of 
     transactions is subject to requirements substantially similar 
     to those imposed under this subchapter; and
       ``(B) there is adequate provision for the enforcement of 
     such requirements; and''.
       (b) Technical and Conforming Amendment.--The penultimate 
     sentence of section 5318(a)(6) of title 31, United States 
     Code (as so redesignated by the amendment made by subsection 
     (a) of this section) is amended by inserting ``under this 
     paragraph or paragraph (5)'' after ``exemption''.

     SEC. 411. CRIMINAL AND CIVIL PENALTIES 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 Amendments.--
       (1) 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.
       (2) The following sections are each amended by striking 
     ``section 5322 of title 31'' and inserting ``section 5322 or 
     5324 of title 31'' each place such term appears in such 
     sections:
       (A) Sections 8(g)(1)(A)(ii), 8(w)(1)(B), and 11(c)(5)(M) of 
     the Federal Deposit Insurance Act.
       (B) Sections 131(a)(2), 206(h)(1)(C), 206(i)(1)(A)(ii), and 
     206(v)(1)(B) of the Federal Credit Union Act.
       (C) Section 5239(d)(1)(B) of the Revised Statutes of the 
     United States (as redesignated by section 413(b)(2) of this 
     Act).
       (D) Section 5(w)(1)(B) of the Home Owners' Loan Act.
       (E) Sections 984(a), 986(a), and 1956(g) (the first place 
     it appears) of title 18, United States Code.

     SEC. 412. GAO STUDY OF CASHIERS' CHECKS.

       (a) Study Required.--The Comptroller General of the United 
     States shall conduct a study to--
       (1) determine the extent to which the practice of issuing 
     of cashiers' checks by financial institutions is vulnerable 
     to money laundering schemes;
       (2) determine the extent to which additional recordkeeping 
     requirements should be imposed on financial institutions 
     which issue cashiers' checks; and
       (3) analyze 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 6-month 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 of the Comptroller General 
     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.

     SEC. 413. TECHNICAL AMENDMENTS AND CORRECTIONS.

       (a) Title 31, U.S.C., Amendments.--
       (1) Section 5321(a)(5)(A) of title 31, United States Code, 
     is amended by inserting ``any violation of'' after 
     ``causing''.
       (2) Section 5324(a) of title 31, United States Code, is 
     amended--
       (A) by striking ``section 5313(a), section 5325, or the 
     regulations issued thereunder or section 5325 or regulations 
     prescribed under such section 5325'' each place such term 
     appears and inserting ``section 5313(a) or 5325 or any 
     regulation prescribed under any such section''; and
       (B) by striking ``with respect to such transaction''.
       (b) Amendments Relating to Title 31, U.S.C.--
       (1) Effective as of the date of enactment of the Annunzio-
     Wylie Anti-Money Laundering Act, section 1517(b) of such Act 
     is amended by striking ``5314'' and inserting ``5318''.
       (2) Section 5239 of the Revised Statutes of the United 
     States is amended by redesignating the 2d subsection (c) (as 
     added by section 1502(a) of the Annunzio-Wylie Anti-Money 
     Laundering Act) as subsection (d).
       (c) Title 18, U.S.C., Amendments.--
       (1) Section 1956 of title 18, United States Code, is 
     amended--
       (A) in subsection (a)(2)--
       (i) by inserting ``not more than'' before ``$500,000''; and
       (ii) by striking ``transfer.'' each place such term appears 
     and inserting ``transfer'';
       (B) in subsection (b)--
       (i) by inserting ``or (a)(3)'' after ``(a)(1)''; and
       (ii) by striking ``transfer.'' and inserting ``transfer'';
       (C) in subsection (c)(7)(B)(iii), by inserting a close 
     parenthesis after ``1978'';
       (D) in subsection (c)(7)(D), by striking ``section 9(c) of 
     the Food Stamp Act of 1977'' and inserting ``section 15 of 
     the Food Stamp Act of 1977'';
       (E) in subsection (c)(7)(E), by striking the period which 
     follows a period;
       (F) in subsection (e), by striking ``Environmental'' and 
     inserting ``Environmental''; and
       (G) by redesignating subsection (g), the second place it 
     appears, as subsection (h).
       (2) Section 1957(f)(1) of title 18, United States Code, is 
     amended by striking the comma which follows a comma.
       (d) Repeal of Obsolete Technical Correction to Section 1956 
     of Title 18, U.S.C.--Section 3557(2)(E) of Public Law 101-647 
     is repealed, effective on the date of enactment of such 
     Public Law.
                TITLE V--NATIONAL FLOOD INSURANCE REFORM

     SEC. 501. SHORT TITLE.

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

     SEC. 511. 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, 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) `Federal agency lender' means a Federal agency that 
     makes direct loans secured by improved real estate or a 
     mobile home, to the extent such agency acts in such capacity;
       ``(8) the term `improved real estate' means real estate 
     upon which a building is located;
       ``(9) `lender' means a regulated lending institution or 
     Federal agency lender;
       ``(10) `regulated lending institution' means any bank, 
     savings and loan 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; and
       ``(11) `servicer' means the person responsible for 
     receiving any scheduled periodic payments from a borrower 
     pursuant to the terms of a loan, including amounts for taxes, 
     insurance premiums, and other charges with respect to the 
     property securing the loan, and making the payments of 
     principal and interest and such other payments with respect 
     to the amounts received from the borrower as may be required 
     pursuant to the terms of the loan.''.
       (b) Conforming Amendment.--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 shall 
     by regulation require the regulated lending institutions 
     described in such section, and each Federal agency lender 
     shall issue regulations requiring the Federal agency 
     lender,''.

     SEC. 512. 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 inserting after paragraph (6) the following new 
     paragraphs:
       ``(7) the term `repetitive loss structure' means a 
     structure covered by a contract for flood insurance under 
     this title 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 such flood event;
       ``(8) the term `Federal agency lender' means a Federal 
     agency that makes direct loans secured by improved real 
     estate or a mobile home, to the extent such agency acts in 
     such capacity;
       ``(9) 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, the National 
     Credit Union Administration, 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;
       ``(10) the term `improved real estate' means real estate 
     upon which a building is located;
       ``(11) the term `lender' means a regulated lending 
     institution or Federal agency lender;
       ``(12) the term `natural and beneficial floodplain 
     functions' means--
       ``(A) the functions associated with the natural or 
     relatively undisturbed floodplain that (i) moderate flooding, 
     retain flood waters, reduce erosion and sedimentation, and 
     mitigate the effect of waves and storm surge from storms, and 
     (ii) reduce flood related damage; and
       ``(B) ancillary beneficial functions, including maintenance 
     of water quality and recharge of ground water, that reduce 
     flood related damage;
       ``(13) the term `regulated lending institution' means any 
     bank, savings and loan 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; and
       ``(14) the term `servicer' means the person responsible for 
     receiving any scheduled periodic payments from a borrower 
     pursuant to the terms of a loan, including amounts for taxes, 
     insurance premiums, and other charges with respect to the 
     property securing the loan, and making the payments of 
     principal and interest and such other payments with respect 
     to the amounts received from the borrower as may be required 
     pursuant to the terms of the loan.''.
       (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 or Federal agency lender''.
           Subtitle B--Compliance and Increased Participation

     SEC. 521. 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 new sentence: ``The 
     requirements of this subsection may not be waived under 
     section 301.''.

     SEC. 522. 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)) is amended to 
     read as follows:
       ``(b) Requirement for Mortgage Loans.--
       ``(1) Regulated lending institutions.--Each Federal entity 
     for lending regulation (after consultation and coordination 
     with the Financial Institutions Examination Council 
     established under the Federal Financial Institutions 
     Examination Council Act of 1974) shall by regulation direct 
     regulated lending institutions not to make, increase, extend, 
     or renew any loan secured by improved real estate or a mobile 
     home located or to be located in an area that has been 
     identified by the Director as an area having special flood 
     hazards and in which flood insurance has been made available 
     under the National Flood Insurance Act of 1968, unless the 
     building or mobile home and any personal property securing 
     such loan is covered for the term of the loan by flood 
     insurance in an amount at least equal to the outstanding 
     principal balance of the loan or the maximum limit of 
     coverage made available under the Act with respect to the 
     particular type of property, whichever is less.
       ``(2) Federal agency lenders.--A Federal agency lender may 
     not make, increase, extend, or renew any loan secured by 
     improved real estate or a mobile home located or to be 
     located in an area that has been identified by the Director 
     as an area having special flood hazards and in which flood 
     insurance has been made available under the National Flood 
     Insurance Act of 1968, unless the building or mobile home and 
     any personal property securing such loan is covered for the 
     term of the loan by flood insurance in the amount provided in 
     paragraph (1). Each Federal agency lender shall issue any 
     regulations necessary to carry out this paragraph. Such 
     regulations shall be consistent with and substantially 
     identical to the regulations issued under paragraph (1).
       ``(3) Government-sponsored enterprises for housing.--The 
     Federal National Mortgage Association and the Federal Home 
     Loan Mortgage Corporation shall implement procedures 
     reasonably designed to ensure that, for any loan that is--
       ``(A) secured by improved real estate or a mobile home 
     located in an area that has been identified, at the time of 
     the origination of the loan or at any time during the term of 
     the loan, by the Director as an area having special flood 
     hazards and in which flood insurance is available under the 
     National Flood Insurance Act of 1968, and
       ``(B) purchased by such entity,

     the building or mobile home and any personal property 
     securing the loan is covered for the term of the loan by 
     flood insurance in the amount provided in paragraph (1).
       ``(4) Applicability.--
       ``(A) Existing coverage.--Except as provided in 
     subparagraph (B), paragraph (1) shall apply on the date of 
     enactment of the Riegle Community Development and Regulatory 
     Improvement Act of 1994.
       ``(B) New coverage.--Paragraphs (2) and (3) shall apply 
     only 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 the Riegle Community Development 
     and Regulatory Improvement Act of 1994. Paragraph (1) shall 
     apply with respect to any loan made, increased, extended, or 
     renewed by any lender supervised by the Farm Credit 
     Administration only after the expiration of the period under 
     this subparagraph.
       ``(C) Continued effect of regulations.--Notwithstanding any 
     other provision of this subsection, the regulations to carry 
     out paragraph (1), as in effect immediately before the date 
     of enactment of the Riegle Community Development and 
     Regulatory Improvement Act of 1994, shall continue to apply 
     until the regulations issued to carry out paragraph (1) as 
     amended by section 522(a) of such Act take effect.''.
       (b) Exemption for Small Loans.--Section 102(c) of the Flood 
     Disaster Protection Act of 1973 (42 U.S.C. 4012a(c)) is 
     amended--
       (1) by striking ``(c) Notwithstanding'' and inserting the 
     following:
       ``(c) Exceptions to Purchase Requirements.--
       ``(1) State-owned property.--Notwithstanding''; and
       (2) by adding at the end the following new paragraph:
       ``(2) Small loans.--Notwithstanding any other provision of 
     this section, subsections (a) and (b) shall not apply to any 
     loan having--
       ``(A) an original outstanding principal balance of $5,000 
     or less; and
       ``(B) a repayment term of 1 year or less.''.

     SEC. 523. ESCROW OF FLOOD INSURANCE PAYMENTS.

       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) Regulated lending institutions.--Each Federal entity 
     for lending regulation (after consultation and coordination 
     with the 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 improved 
     real estate or a mobile home, then all premiums and fees for 
     flood insurance under the National Flood Insurance Act of 
     1968 for the real estate or mobile home shall be paid to the 
     regulated lending institution or other servicer for the loan 
     in a manner sufficient to make payments as due for the 
     duration of the loan. Upon receipt of the premiums, the 
     regulated lending institution or servicer of the loan shall 
     deposit the premiums in an escrow account on behalf of the 
     borrower. Upon receipt of a notice from the Director or the 
     provider of the insurance that insurance premiums are due, 
     the regulated lending institution or servicer shall pay from 
     the escrow account to the provider of the insurance the 
     amount of insurance premiums owed.
       ``(2) Federal agency lenders.--Each Federal agency lender 
     shall by regulation require and provide for escrow and 
     payment of any flood insurance premiums and fees relating to 
     residential improved real estate and mobile homes securing 
     loans made by the Federal agency lender under the 
     circumstances and in the manner provided under paragraph (1). 
     Any regulations issued under this paragraph shall be 
     consistent with and substantially identical to the 
     regulations issued under paragraph (1).
       ``(3) Applicability of respa.--Escrow accounts established 
     pursuant to this subsection shall be subject to the 
     provisions of section 10 of the Real Estate Settlement 
     Procedures Act of 1974.
       ``(4) Definition.--For purposes of this subsection, the 
     term `residential improved real estate' means improved real 
     estate for which the improvement is a residential building.
       ``(5) Applicability.--This subsection shall apply only 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 the Riegle Community Development and 
     Regulatory Improvement Act of 1994.''.

     SEC. 524. PLACEMENT OF FLOOD INSURANCE BY LENDERS.

       Section 102 of the Flood Disaster Protection Act of 1973 
     (42 U.S.C. 4012a), as amended by the preceding provisions of 
     this title, is further amended by adding at the end the 
     following new subsection:
       ``(e) Placement of Flood Insurance by Lender.--
       ``(1) Notification to borrower of lack of coverage.--If, at 
     the time of origination or at any time during the term of a 
     loan secured by improved real estate or by a mobile home 
     located in an area that has been identified by the Director 
     (at the time of the origination of the loan or at any time 
     during the term of the loan) as an area having special flood 
     hazards and in which flood insurance is available under the 
     National Flood Insurance Act of 1968, the lender or servicer 
     for the loan determines that the building or mobile home and 
     any personal property securing the loan is not covered by 
     flood insurance or is covered by such insurance in an amount 
     less than the amount required for the property pursuant to 
     paragraph (1), (2), or (3) of subsection (b), the lender or 
     servicer shall notify the borrower under the loan that the 
     borrower should obtain, at the borrower's expense, an amount 
     of flood insurance for the building or mobile home and such 
     personal property that is not less than the amount under 
     subsection (b)(1), for the term of the loan.
       ``(2) Purchase of coverage on behalf of borrower.--If the 
     borrower fails to purchase such flood insurance within 45 
     days after notification under paragraph (1), the lender or 
     servicer for the loan shall purchase the insurance on behalf 
     of the borrower and may charge the borrower for the cost of 
     premiums and fees incurred by the lender or servicer for the 
     loan in purchasing the insurance.
       ``(3) Review of determination regarding required 
     purchase.--
       ``(A) In general.--The borrower and lender for a loan 
     secured by improved real estate or a mobile home may jointly 
     request the Director to review a determination of whether the 
     building or mobile home is located in an area having special 
     flood hazards. Such request shall be supported by technical 
     information relating to the improved real estate or mobile 
     home. Not later than 45 days after the Director receives the 
     request, the Director shall review the determination and 
     provide to the borrower and the lender with a letter stating 
     whether or not the building or mobile home is in an area 
     having special flood hazards. The determination of the 
     Director shall be final.
       ``(B) Effect of determination.--Any person to whom a 
     borrower provides a letter issued by the Director pursuant to 
     subparagraph (A), stating that the building or mobile home 
     securing the loan of the borrower is not in an area having 
     special flood hazards, shall have no obligation under this 
     title to require the purchase of flood insurance for such 
     building or mobile home during the period determined by the 
     Director, which shall be specified in the letter and shall 
     begin on the date on which such letter is provided.
       ``(C) Effect of failure to respond.--If a request under 
     subparagraph (A) is made in connection with the origination 
     of a loan and the Director fails to provide a letter under 
     subparagraph (A) before the later of (i) the expiration of 
     the 45-day period under such subparagraph, or (ii) the 
     closing of the loan, no person shall have an obligation under 
     this title to require the purchase of flood insurance for the 
     building or mobile home securing the loan until such letter 
     is provided.
       ``(4) Applicability.--This subsection shall apply to all 
     loans outstanding on or after the date of enactment of the 
     Riegle Community Development and Regulatory Improvement Act 
     of 1994.''.

     SEC. 525. PENALTIES FOR FAILURE TO REQUIRE FLOOD INSURANCE OR 
                   NOTIFY.

       Section 102 of the Flood Disaster Protection Act of 1973 
     (42 U.S.C. 4012a), as amended by the preceding provisions of 
     this title, is further amended by adding at the end the 
     following new subsections:
       ``(f) Civil Monetary Penalties for Failure To Require Flood 
     Insurance or Notify.--
       ``(1) Civil monetary penalties against regulated lenders.--
     Any regulated lending institution that is found to have a 
     pattern or practice of committing violations under paragraph 
     (2) shall be assessed a civil penalty by the appropriate 
     Federal entity for lending regulation in the amount provided 
     under paragraph (5).
       ``(2) Lender violations.--The violations referred to in 
     paragraph (1) shall include--
       ``(A) making, increasing, extending, or renewing loans in 
     violation of--
       ``(i) the regulations issued pursuant to subsection (b) of 
     this section;
       ``(ii) the escrow requirements under subsection (d) of this 
     section; or
       ``(iii) the notice requirements under section 1364 of the 
     National Flood Insurance Act of 1968; or
       ``(B) failure to provide notice or purchase flood insurance 
     coverage in violation of subsection (e) of this section.
       ``(3) Civil monetary penalties against gse's.--
       ``(A) In general.--If the Federal National Mortgage 
     Association or the Federal Home Loan Mortgage Corporation is 
     found by the Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development to have a pattern or practice of purchasing loans 
     in violation of the procedures established pursuant to 
     subsection (b)(3), the Director of such Office shall assess a 
     civil penalty against such enterprise in the amount provided 
     under paragraph (5) of this subsection.
       ``(B) Definition.--For purposes of this subsection, the 
     term `enterprise' means the Federal National Mortgage 
     Association or the Federal Home Loan Mortgage Corporation.
       ``(4) Notice and hearing.--A penalty under this subsection 
     may be issued only after notice and an opportunity for a 
     hearing on the record.
       ``(5) Amount.--A civil monetary penalty under this 
     subsection may not exceed $350 for each violation under 
     paragraph (2) or paragraph (3). The total amount of penalties 
     assessed under this subsection against any single regulated 
     lending institution or enterprise during any calendar year 
     may not exceed $100,000.
       ``(6) Lender compliance.--Notwithstanding any State or 
     local law, for purposes of this subsection, any regulated 
     lending institution that purchases flood insurance or renews 
     a contract for flood insurance on behalf of or as an agent of 
     a borrower of a loan for which flood insurance is required 
     shall be considered to have complied with the regulations 
     issued under subsection (b).
       ``(7) Effect of transfer on liability.--Any sale or other 
     transfer of a loan by a regulated lending institution that 
     has committed a violation under paragraph (1), that occurs 
     subsequent to the violation, shall not affect the liability 
     of the transferring lender with respect to any penalty under 
     this subsection. A lender shall not be liable for any 
     violations relating to a loan committed by another regulated 
     lending institution that previously held the loan.
       ``(8) Deposit of penalties.--Any penalties collected under 
     this subsection shall be paid into the National Flood 
     Mitigation Fund under section 1367 of the National Flood 
     Insurance Act of 1968.
       ``(9) Additional penalties.--Any penalty under this 
     subsection shall be in addition to any civil remedy or 
     criminal penalty otherwise available.
       ``(10) Statute of limitations.--No penalty may be imposed 
     under this subsection after the expiration of the 4-year 
     period beginning on the date of the occurrence of the 
     violation for which the penalty is authorized under this 
     subsection.
       ``(g) Other Actions To Remedy Pattern of Noncompliance.--
       ``(1) Authority of federal entities for lending 
     regulation.--A Federal entity for lending regulation may 
     require a regulated lending institution to take such remedial 
     actions as are necessary to ensure that the regulated lending 
     institution complies with the requirements of the national 
     flood insurance program if the Federal agency for lending 
     regulation makes a determination under paragraph (2) 
     regarding the regulated lending institution.
       ``(2) Determination of violations.--A determination under 
     this paragraph shall be a finding that--
       ``(A) the regulated lending institution has engaged in a 
     pattern and practice of noncompliance in violation of the 
     regulations issued pursuant to subsection (b), (d), or (e) or 
     the notice requirements under section 1364 of the National 
     Flood Insurance Act of 1968; and
       ``(B) the regulated lending institution has not 
     demonstrated measurable improvement in compliance despite the 
     assessment of civil monetary penalties under subsection 
     (f).''.

     SEC. 526. FEES FOR DETERMINING APPLICABILITY OF FLOOD 
                   INSURANCE PURCHASE REQUIREMENTS.

       Section 102 of the Flood Disaster Protection Act of 1973 
     (42 U.S.C. 4012a) as amended by the preceding provisions of 
     this title, is further amended by adding at the end the 
     following new subsection:
       ``(h) Fee for Determining Location.--Notwithstanding any 
     other Federal or State law, any person who makes a loan 
     secured by improved real estate or a mobile home or any 
     servicer for such a loan may charge a reasonable fee for the 
     costs of determining whether the building or mobile home 
     securing the loan is located in an area having special flood 
     hazards, but only in accordance with the following 
     requirements:
       ``(1) Borrower fee.--The borrower under such a loan may be 
     charged the fee, but only if the determination--
       ``(A) is made pursuant to the making, increasing, 
     extending, or renewing of the loan that is initiated by the 
     borrower;
       ``(B) is made pursuant to a revision or updating under 
     section 1360(f) of the floodplain areas and flood-risk zones 
     or publication of a notice or compendia under subsection (h) 
     or (i) of section 1360 that affects the area in which the 
     improved real estate or mobile home securing the loan is 
     located or that, in the determination of the Director, may 
     reasonably be considered to require a determination under 
     this subsection; or
       ``(C) results in the purchase of flood insurance coverage 
     pursuant to the requirement under subsection (e)(2).
       ``(2) Purchaser or transferee fee.--The purchaser or 
     transferee of such a loan may be charged the fee in the case 
     of sale or transfer of the loan.''.

     SEC. 527. NOTICE REQUIREMENTS.

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


                         ``notice requirements

       ``Sec. 1364. (a) Notification of Special Flood Hazards.--
       ``(1) Regulated lending institutions.--Each Federal entity 
     for lending regulation (after consultation and coordination 
     with the Financial Institutions Examination Council) shall by 
     regulation require regulated lending institutions, as a 
     condition of making, increasing, extending, or renewing any 
     loan secured by improved real estate or a mobile home that 
     the regulated lending institution determines is located or is 
     to be located in an area that has been identified by the 
     Director under this title or the Flood Disaster Protection 
     Act of 1973 as an area having special flood hazards, to 
     notify the purchaser or lessee (or obtain satisfactory 
     assurances that the seller or lessor has notified the 
     purchaser or lessee) and the servicer of the loan of such 
     special flood hazards, in writing, a reasonable period in 
     advance of the signing of the purchase agreement, lease, or 
     other documents involved in the transaction. The regulations 
     shall also require that the regulated lending institution 
     retain a record of the receipt of the notices by the 
     purchaser or lessee and the servicer.
       ``(2) Federal agency lenders.--Each Federal agency lender 
     shall by regulation require notification in the manner 
     provided under paragraph (1) with respect to any loan that is 
     made by the Federal agency lender and secured by improved 
     real estate or a mobile home located or to be located in an 
     area that has been identified by the Director under this 
     title or the Flood Disaster Protection Act of 1973 as an area 
     having special flood hazards. Any regulations issued under 
     this paragraph shall be consistent with and substantially 
     identical to the regulations issued under paragraph (1).
       ``(3) Contents of notice.--Written notification required 
     under this subsection shall include--
       ``(A) a warning, in a form to be established by the 
     Director, stating that the building on the improved real 
     estate securing the loan is located, or the mobile home 
     securing the loan is or is to be located, in an area having 
     special flood hazards;
       ``(B) a description of the flood insurance purchase 
     requirements under section 102(b) of the Flood Disaster 
     Protection Act of 1973;
       ``(C) a statement that flood insurance coverage may be 
     purchased under the national flood insurance program and is 
     also available from private insurers; and
       ``(D) any other information that the Director considers 
     necessary to carry out the purposes of the national flood 
     insurance program.
       ``(b) Notification of Change of Servicer.--
       ``(1) Lending institutions.--Each Federal entity for 
     lending regulation (after consultation and coordination with 
     the Financial Institutions Examination Council) shall by 
     regulation require regulated lending institutions, in 
     connection with the making, increasing, extending, renewing, 
     selling, or transferring any loan described in subsection 
     (a)(1), to notify the Director (or the designee of the 
     Director) in writing during the term of the loan of the 
     servicer of the loan. Such institutions shall also notify the 
     Director (or such designee) of any change in the servicer of 
     the loan, not later than 60 days after the effective date of 
     such change. The regulations under this subsection shall 
     provide that upon any change in the servicing of a loan, the 
     duty to provide notification under this subsection shall 
     transfer to the transferee servicer of the loan.
       ``(2) Federal agency lenders.--Each Federal agency lender 
     shall by regulation provide for notification in the manner 
     provided under paragraph (1) with respect to any loan 
     described in subsection (a)(1) that is made by the Federal 
     agency lender. Any regulations issued under this paragraph 
     shall be consistent with and substantially identical to the 
     regulations issued under paragraph (1) of this subsection.
       ``(c) Notification of Expiration of Insurance.--The 
     Director (or the designee of the Director) shall, not less 
     than 45 days before the expiration of any contract for flood 
     insurance under this title, issue notice of such expiration 
     by first class mail to the owner of the property covered by 
     the contract, the servicer of any loan secured by the 
     property covered by the contract, and (if known to the 
     Director) the owner of the loan.''.

     SEC. 528. STANDARD HAZARD DETERMINATION FORMS.

       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:


                 ``standard hazard determination forms

       ``Sec. 1365. (a) Development.--The Director, in 
     consultation with representatives of the mortgage and lending 
     industry, the Federal entities for lending regulation, the 
     Federal agency lenders, and any other appropriate 
     individuals, shall develop a standard form for determining, 
     in the case of a loan secured by improved real estate or a 
     mobile home, whether the building or mobile home is located 
     in an area identified by the Director as an area having 
     special flood hazards and in which flood insurance under this 
     title is available. The form shall be established by 
     regulations issued not later than 270 days after the date of 
     enactment of the Riegle Community Development and Regulatory 
     Improvement Act of 1994.
       ``(b) Design and Contents.--
       ``(1) Purpose.--The form under subsection (a) shall be 
     designed to facilitate compliance with the flood insurance 
     purchase requirements of this title.
       ``(2) Contents.--The form shall require identification of 
     the type of flood-risk zone in which the building or mobile 
     home is located, the complete map and panel numbers for the 
     improved real estate or property on which the mobile home is 
     located, the community identification number and community 
     participation status (for purposes of the national flood 
     insurance program) of the community in which the improved 
     real estate or such property is located, and the date of the 
     map used for the determination, with respect to flood hazard 
     information on file with the Director. If the building or 
     mobile home is not located in an area having special flood 
     hazards the form shall require a statement to such effect and 
     shall indicate the complete map and panel numbers of the 
     improved real estate or property on which the mobile home is 
     located. If the complete map and panel numbers are not 
     available because the building or mobile home 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 form shall require a statement to such effect. The 
     form shall provide for inclusion or attachment of any 
     relevant documents indicating revisions or amendments to 
     maps.
       ``(c) Required Use.--The Federal entities for lending 
     regulation shall by regulation require the use of the form 
     under this section by regulated lending institutions. Each 
     Federal agency lender shall by regulation provide for the use 
     of the form with respect to any loan made by such Federal 
     agency lender. The Federal National Mortgage Association and 
     the Federal Home Loan Mortgage Corporation and the Government 
     National Mortgage Association shall require the use of the 
     form with respect to any loan purchased by such entities. A 
     lender or other person may comply with the requirement under 
     this subsection by using the form in a printed, computerized, 
     or electronic manner.
       ``(d) Guarantees Regarding Information.--In providing 
     information regarding special flood hazards on the form 
     developed under this section, any lender (or other person 
     required to use the form) who makes, increases, extends, or 
     renews a loan secured by improved real estate or a mobile 
     home may provide for the acquisition or determination of such 
     information to be made by a person other than such lender (or 
     other person), only to the extent such person guarantees the 
     accuracy of the information.
       ``(e) Reliance on Previous Determination.--Any person 
     increasing, extending, renewing, or purchasing a loan secured 
     by improved real estate or a mobile home may rely on a 
     previous determination of whether the building or mobile home 
     is located in an area having special flood hazards (and shall 
     not be liable for any error in such previous determination), 
     if the previous determination was made not more than 7 years 
     before the date of the transaction and the basis for the 
     previous determination has been set forth on a form under 
     this section, unless--
       ``(1) map revisions or updates pursuant to section 1360(f) 
     after such previous determination have resulted in the 
     building or mobile home being located in an area having 
     special flood hazards; or
       ``(2) the person contacts the Director to determine when 
     the most recent map revisions or updates affecting such 
     property occurred and such revisions and updates have 
     occurred after such previous determination.
       ``(f) Effective Date.--The regulations under this section 
     requiring use of the form established pursuant to this 
     section shall be issued together with the regulations 
     required under subsection (a) and shall take effect upon the 
     expiration of the 180-day period beginning on such 
     issuance.''.

     SEC. 529. EXAMINATIONS REGARDING COMPLIANCE.

       (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:
       ``(i) Flood Insurance Compliance by Insured Depository 
     Institutions.--
       ``(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.--
       ``(A) Requirement.--Not later than 1 year after the date of 
     enactment of the Riegle Community Development and Regulatory 
     Improvement Act of 1994 and biennially thereafter for the 
     next 4 years, each appropriate Federal banking agency shall 
     submit a report to the Congress on compliance by insured 
     depository institutions with the requirements of the national 
     flood insurance program.
       ``(B) Contents.--Each report submitted under this paragraph 
     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 not to be in compliance, 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 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 Insurance Compliance by Insured Credit 
     Unions.--
       ``(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.--
       ``(A) Requirement.--Not later than 1 year after the date of 
     enactment of the Riegle Community Development and Regulatory 
     Improvement Act of 1994 and biennially thereafter for the 
     next 4 years, the Board shall submit a report to the Congress 
     on compliance by insured credit unions with the requirements 
     of the national flood insurance program.
       ``(B) Contents.--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 not 
     to be in compliance, 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.''.
       (c) Amendment to Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992.--Section 1319B(a) of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4521(a)) is amended--
       (1) in paragraph (2), by striking ``and'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(4) a description of--
       ``(A) whether the procedures established by each enterprise 
     pursuant to section 102(b)(3) of the Flood Disaster 
     Protection Act of 1973 are adequate and being complied with, 
     and
       ``(B) the results and conclusions of any examination, as 
     determined necessary by the Director, to determine the 
     compliance of the enterprises with the requirements of 
     section 102(b)(3) of such Act, which shall include a 
     description of the methods used to determine compliance and 
     the types and sources of deficiencies (if any), and identify 
     any corrective measures that have been taken to remedy any 
     such deficiencies,

     except that the information described in this paragraph shall 
     be included only in each of the first, third, and fifth 
     annual reports under this subsection required to be submitted 
     after the expiration of the 1-year period beginning on the 
     date of enactment of the Riegle Community Development and 
     Regulatory Improvement Act of 1994.''.

     SEC. 530. 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) 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. 531. CLERICAL AMENDMENT.

       Section 102 of the Flood Disaster Protection Act of 1973 
     (42 U.S.C. 4012a) is amended by striking the section heading 
     and inserting the following new section heading:


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

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

     SEC. 541. COMMUNITY RATING SYSTEM AND INCENTIVES FOR 
                   COMMUNITY FLOODPLAIN MANAGEMENT.

       Section 1315 of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4022) is amended--
       (1) by striking ``After December'' and inserting the 
     following:
       ``(a) Requirement for Participation in Flood Insurance 
     Program.--
       ``(1) In general.--After December''; and
       (2) 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, under which communities 
     participate voluntarily--
       ``(A) to provide incentives for measures that reduce the 
     risk of flood or erosion damage that exceed the criteria set 
     forth in section 1361 and evaluate such measures;
       ``(B) to encourage adoption of more effective measures that 
     protect natural and beneficial floodplain functions;
       ``(C) to encourage floodplain and erosion management; and
       ``(D) 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 that 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 implemented measures that protect natural and beneficial 
     floodplain functions.
       ``(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 a manner, determined by the 
     Director, to recover the amount of such assistance provided 
     for the community.
       ``(4) Reports.--Not later than 2 years after the date of 
     enactment of the Riegle Community Development and Regulatory 
     Improvement Act of 1994 and not less than every 2 years 
     thereafter, the Director shall submit a report to the 
     Congress regarding the program under this subsection. Each 
     report shall include an analysis of the cost-effectiveness of 
     the program, any other accomplishments or shortcomings of the 
     program, and any recommendations of the Director for 
     legislation regarding the program.''.

     SEC. 542. 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);''.
                 Subtitle D--Mitigation of Flood Risks

     SEC. 551. REPEAL OF FLOODED PROPERTY PURCHASE AND LOAN 
                   PROGRAM.

       (a) Repeal.--Section 1362 of the National Flood Insurance 
     Act of 1968 (42 U.S.C. 4103) is hereby repealed.
       (b) Transition Phase.--Notwithstanding subsection (a), 
     during the 1-year period beginning on the date of enactment 
     of this Act, the Director of the Federal Emergency Management 
     Agency may enter into loan and purchase commitments as 
     provided under section 1362 of the National Flood Insurance 
     Act of 1968 (as in effect immediately before the enactment of 
     this Act).
       (c) Savings Provision.--Notwithstanding subsection (a), the 
     Director shall take any action necessary to comply with any 
     purchase or loan commitment entered into before the 
     expiration of the period referred to in subsection (b) 
     pursuant to authority under section 1362 of the National 
     Flood Insurance Act of 1968 or subsection (b).

     SEC. 552. 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 Phase.--Notwithstanding subsection (a), 
     during the 1-year period beginning on the date of enactment 
     of this Act, the Director of the Federal Emergency Management 
     Agency 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 enactment of this Act).
       (c) Savings Provision.--Notwithstanding subsection (a), the 
     Director shall take any action necessary to make payments 
     under flood insurance contracts pursuant to any commitments 
     made before the expiration of the period referred to in 
     subsection (b) pursuant to the authority under section 
     1306(c) of the National Flood Insurance Act of 1968 or 
     subsection (b).
       (d) Repeal of Findings Provision.--Section 1302 of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4001) is 
     amended by striking subsection (g).

     SEC. 553. 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 
     the preceding provisions of this title, is further amended by 
     adding at the end the following new section:


                        ``mitigation assistance

       ``Sec. 1366. (a) Authority.--The Director shall carry out a 
     program to provide financial assistance to States and 
     communities, using amounts made available from the National 
     Flood Mitigation Fund under section 1367, for planning and 
     carrying out activities designed to reduce the risk of flood 
     damage to structures covered under contracts for flood 
     insurance under this title. Such financial assistance shall 
     be made available to States and communities in the form of 
     grants under subsection (b) for planning assistance and in 
     the form of grants under this section for carrying out 
     mitigation activities.
       ``(b) Planning Assistance Grants.--
       ``(1) In general.--The Director may make grants under this 
     subsection to States and communities to assist in developing 
     mitigation plans under subsection (c).
       ``(2) Funding.--Of any amounts made available from the 
     National Flood Mitigation Fund for use under this section in 
     any fiscal year, the Director may use not more than 
     $1,500,000 to provide planning assistance grants under this 
     subsection.
       ``(3) Limitations.--
       ``(A) Timing.--A grant under this subsection may be awarded 
     to a State or community not more than once every 5 years and 
     each grant may cover a period of 1 to 3 years.
       ``(B) Single grantee amount.--A grant for planning 
     assistance may not exceed--
       ``(i) $150,000, to any State; or
       ``(ii) $50,000, to any community.
       ``(C) Cumulative state grant amount.--The sum of the 
     amounts of grants made under this subsection in any fiscal 
     year to any one State and all communities located in such 
     State may not exceed $300,000.
       ``(c) Eligibility for Mitigation Assistance.--To be 
     eligible to receive financial assistance under this section 
     for mitigation activities, a State or community shall 
     develop, and have approved by the Director, a flood risk 
     mitigation plan (in this section referred to as a `mitigation 
     plan'), that describes the mitigation activities to be 
     carried out with assistance provided under this section, is 
     consistent with the criteria established by the Director 
     under section 1361, and provides protection against flood 
     losses to structures for which contracts for flood insurance 
     are available under this title. The mitigation plan shall be 
     consistent with a comprehensive strategy for mitigation 
     activities for the area affected by the mitigation plan, that 
     has been adopted by the State or community following a public 
     hearing.
       ``(d) Notification of Approval and Grant Award.--
       ``(1) In general.--The Director shall notify a State or 
     community submitting a mitigation plan of the approval or 
     disapproval of the plan not later than 120 days after 
     submission of the plan.
       ``(2) Notification of disapproval.--If the Director does 
     not approve a mitigation plan submitted under this 
     subsection, the Director shall notify, in writing, the State 
     or community submitting the plan of the reasons for such 
     disapproval.
       ``(e) Eligible Mitigation Activities.--
       ``(1) Use of amounts.--Amounts provided under this section 
     (other than under subsection (b)) may be used only for 
     mitigation activities specified in a mitigation plan approved 
     by the Director under subsection (d). The Director shall 
     provide assistance under this section to the extent amounts 
     are available in the National Flood Mitigation Fund pursuant 
     to appropriation Acts, subject only to the absence of 
     approvable mitigation plans.
       ``(2) Determination of eligible plans.--The Director may 
     approve only mitigation plans that specify mitigation 
     activities that the Director determines are technically 
     feasible and cost-effective and only such plans that propose 
     activities that are cost-beneficial to the National Flood 
     Mitigation Fund.
       ``(3) Standard for approval.--The Director shall approve 
     mitigation plans meeting the requirements for approval under 
     paragraph (1) that will be most cost-beneficial to the 
     National Flood Mitigation Fund.
       ``(4) Priority.--The Director shall make every effort to 
     provide mitigation assistance under this section for 
     mitigation plans proposing activities for repetitive loss 
     structures and structures that have incurred substantial 
     damage.
       ``(5) Eligible activities.--The Director shall determine 
     whether mitigation activities described in a mitigation plan 
     submitted under subsection (d) comply with the requirements 
     under paragraph (1). Such activities may include--
       ``(A) demolition or relocation of any structure located on 
     land that is along the shore of a lake or other body of water 
     and is certified by an appropriate State or local land use 
     authority to be subject to imminent collapse or subsidence as 
     a result of erosion or flooding;
       ``(B) elevation, relocation, demolition, or floodproofing 
     of structures (including public structures) located in areas 
     having special flood hazards or other areas of flood risk;
       ``(C) acquisition by States and communities of properties 
     (including public properties) located in areas having special 
     flood hazards or other areas of flood risk and properties 
     substantially damaged by flood, for public use, as the 
     Director determines is consistent with sound land management 
     and use in such area;
       ``(D) minor physical mitigation efforts that do not 
     duplicate the flood prevention activities of other Federal 
     agencies and that lessen the frequency or severity of 
     flooding and decrease predicted flood damages, which shall 
     not include major flood control projects such as dikes, 
     levees, seawalls, groins, and jetties unless the Director 
     specifically determines in approving a mitigation plan that 
     such activities are the most cost-effective mitigation 
     activities for the National Flood Mitigation Fund;
       ``(E) beach nourishment activities;
       ``(F) the provision of technical assistance by States to 
     communities and individuals to conduct eligible mitigation 
     activities;
       ``(G) other activities that the Director considers 
     appropriate and specifies in regulation; and
       ``(H) other mitigation activities not described in 
     subparagraphs (A) through (F) or the regulations issued under 
     subparagraph (G), that are described in the mitigation plan 
     of a State or community.
       ``(f) Limitations on Amount of Assistance.--
       ``(1) Amount.--The sum of the amounts of mitigation 
     assistance provided under this section during any 5-year 
     period may not exceed--
       ``(A) $10,000,000, to any State; or
       ``(B) $3,300,000, to any community.
       ``(2) Geographic.--The sum of the amounts of mitigation 
     assistance provided under this section during any 5-year 
     period to any one State and all communities located in such 
     State may not exceed $20,000,000.
       ``(3) Waiver.--The Director may waive the dollar amount 
     limitations under paragraphs (1) and (2) for any State or 
     community for any 5-year period during which a major disaster 
     or emergency declared by the President (pursuant to the 
     Robert T. Stafford Disaster Relief and Emergency Assistance 
     Act) as a result of flood conditions is in effect with 
     respect to areas in the State or community.
       ``(g) Matching Requirement.--
       ``(1) In general.--The Director may not provide mitigation 
     assistance under this section to a State or community in an 
     amount exceeding 3 times the amount that the State or 
     community certifies, as the Director shall require, that the 
     State or community will contribute from non-Federal funds to 
     develop a mitigation plan under subsection (c) and to carry 
     out mitigation activities under the approved mitigation plan. 
     In no case shall any in-kind contribution by any State or 
     community exceed one-half of the amount of non-Federal funds 
     contributed by the State or community.
       ``(2) Non-federal funds.--For purposes of this subsection, 
     the term `non-Federal funds' includes State or local agency 
     funds, in-kind contributions, any salary paid to staff to 
     carry out the mitigation activities of the recipient, the 
     value of the time and services contributed by volunteers to 
     carry out such activities (at a rate determined by the 
     Director), and the value of any donated material or building 
     and the value of any lease on a building.
       ``(h) Oversight of Mitigation Plans.--The Director shall 
     conduct oversight of recipients of mitigation assistance 
     under this section to ensure that the assistance is used in 
     compliance with the approved mitigation plans of the 
     recipients and that matching funds certified under subsection 
     (g) are used in accordance with such certification.
       ``(i) Recapture.--
       ``(1) Noncompliance with plan.--If the Director determines 
     that a State or community that has received mitigation 
     assistance under this section 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 National Flood Mitigation Fund 
     under section 1367.
       ``(2) Failure to provide matching funds.--If the Director 
     determines that a State or community that has received 
     mitigation assistance under this section has not provided 
     matching funds in the amount certified under subsection (g), 
     the Director shall recapture any unexpended amounts of 
     mitigation assistance exceeding 3 times the amount of such 
     matching funds actually provided and deposit the amounts in 
     the National Flood Mitigation Fund under section 1367.
       ``(j) Reports.--Not later than 1 year after the date of 
     enactment of the Riegle Community Development and Regulatory 
     Improvement Act of 1994 and biennially thereafter, the 
     Director shall submit a report to the Congress describing the 
     status of mitigation activities carried out with assistance 
     provided under this section.
       ``(k) Definition of Community.--For purposes of this 
     section, the term `community' means--
       ``(1) a political subdivision that (A) has zoning and 
     building code jurisdiction over a particular area having 
     special flood hazards, and (B) is participating in the 
     national flood insurance program; or
       ``(2) a political subdivision of a State, or other 
     authority, that is designated to develop and administer a 
     mitigation plan by political subdivisions, all of which meet 
     the requirements of paragraph (1).''.
       (b) Regulations.--Not later than 6 months after date of 
     enactment of this Act, the Director of the Federal Emergency 
     Management Agency shall issue regulations to carry out 
     section 1366 of the National Flood Insurance Act of 1968, as 
     added by subsection (a).

     SEC. 554. ESTABLISHMENT OF NATIONAL FLOOD MITIGATION FUND.

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


                    ``national flood mitigation fund

       ``Sec. 1367. (a) Establishment and Availability.--The 
     Director shall establish in the Treasury of the United States 
     a fund to be known as the National Flood Mitigation Fund, 
     which shall be credited with amounts described in subsection 
     (b) and shall be available, to the extent provided in 
     appropriation Acts, for providing assistance under section 
     1366.
       ``(b) Credits.--The National Flood Mitigation Fund shall be 
     credited with--
       ``(1) amounts from the National Flood Insurance Fund, in 
     amounts not exceeding--
       ``(A) $10,000,000 in the fiscal year ending September 30, 
     1994;
       ``(B) $15,000,000 in the fiscal year ending September 30, 
     1995;
       ``(C) $20,000,000 in the fiscal year ending September 30, 
     1996; and
       ``(D) $20,000,000 in each fiscal year thereafter;
       ``(2) any penalties collected under section 102(f) of the 
     Flood Disaster Protection Act of 1973; and
       ``(3) any amounts recaptured under section 1366(i).
       ``(c) Investment.--If the Director determines that the 
     amounts in the National Flood Mitigation Fund are in excess 
     of amounts needed under subsection (a), the Director may 
     invest any excess amounts the Director determines advisable 
     in interest-bearing obligations issued or guaranteed by the 
     United States.
       ``(d) Report.--The Director shall submit a report to the 
     Congress not later than the expiration of the 1-year period 
     beginning on the date of enactment of this Act and not less 
     than once during each successive 2-year period thereafter. 
     The report shall describe the status of the Fund and any 
     activities carried out with amounts from the Fund.''.
       (b) National Flood Insurance Fund as Separate Account.--
     Section 1310(a) of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4017(a)) is amended--
       (1) in the matter preceding paragraph (1)--
       (A) by striking ``is authorized to'' and inserting 
     ``shall''; and
       (B) by inserting after ``which shall be'' the following: 
     ``an account separate from any other accounts or funds 
     available to the Director and shall be''; and
       (2) by adding after paragraph (6) (as added by the 
     preceding provisions of this title) the following new 
     paragraph:
       ``(7) for transfers to the National Flood Mitigation Fund, 
     but only to the extent provided in section 1367(b)(1); and''.

     SEC. 555. 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) Additional Coverage for Compliance With Land Use and 
     Control Measures.--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 established under section 1361 
     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 $75 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 properties that sustain flood-related damage 
     after the date of enactment of this Act.
                        Subtitle E--Task Forces

     SEC. 561. FLOOD INSURANCE INTERAGENCY TASK FORCE.

       (a) Establishment.--There is hereby established an 
     interagency task force to be known as the Flood Insurance 
     Task Force (in this section referred to as the ``Task 
     Force'').
       (b) Membership.--
       (1) In general.--The Task Force shall be composed of 10 
     members, who shall be the designees of--
       (A) the Federal Insurance Administrator;
       (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) the Chairman of the Board of Directors of the Farm 
     Credit Administration;
       (G) a designee of the Financial Institutions Examination 
     Council;
       (H) the Director of the Office of Federal Housing 
     Enterprise Oversight;
       (I) the chairman of the Board of Directors of the Federal 
     Home Loan Mortgage Corporation; and
       (J) the chairman of the Board of Directors of the Federal 
     National Mortgage Association.
       (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 carry out the following 
     duties:
       (1) Recommendations of standardized enforcement 
     procedures.--Make recommendations to the head of each Federal 
     agency and enterprise referred to under subsection (b)(1) 
     regarding 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 fullest 
     possible compliance with such requirements.
       (2) Study of compliance assistance.--Conduct a study of 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 and 
     submit to the Congress a report describing the study and any 
     conclusions.
       (3) Study of compliance model.--Conduct a study of 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) Recommendations for enforcement and compliance 
     procedures.--Develop recommendations regarding enforcement 
     and compliance procedures, based on the studies and findings 
     of the Task Force, and publish such recommendations.
       (5) Study of determination fees.--Conduct a study of--
       (A) the reasonableness of fees charged pursuant to 102(h) 
     of the Flood Disaster Protection Act of 1973 for costs of 
     determining whether the property securing a loan is located 
     in an area having special flood hazards; and
       (B) whether the fees charged pursuant to such section by 
     lenders and servicers are greater than the amounts paid by 
     such lenders and servicers to persons actually conducting 
     such determinations and the extent to which the fees exceed 
     such amounts.
       (d) Noncompensation.--Members of the Task Force shall 
     receive no additional pay by reason of their service on the 
     Task Force.
       (e) Chairperson.--The members of the Task Force shall elect 
     one member as chairperson of the Task Force.
       (f) Meetings and Action.--The Task Force shall meet at the 
     call of the chairman 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.
       (g) Officers.--The chairperson of the Task Force may 
     appoint any officers to carry out the duties of the Task 
     Force under subsection (c).
       (h) Staff of Federal Agencies.--Upon request of the 
     chairperson of the Task Force, the head of any of the Federal 
     agencies and entities referred to under subsection (b)(1) may 
     detail, on a nonreimbursable basis, any of the personnel of 
     such agency to the Task Force to assist the Task Force in 
     carrying out its duties under this section.
       (i) 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.
       (j) Termination.--The Task Force shall terminate upon the 
     expiration of the 24-month period beginning upon the 
     designation of the last member to be designated under 
     subsection (b)(1).

     SEC. 562. TASK FORCE ON NATURAL AND BENEFICIAL FUNCTIONS OF 
                   THE FLOODPLAIN.

       (a) Establishment.--There is hereby established an 
     interagency task force to be known as the Task Force on 
     Natural and Beneficial Functions of the Floodplain (in this 
     section referred to as the ``Task Force'').
       (b) Membership.--The Task Force shall be composed of 5 
     members, who shall be the designees of--
       (1) the Under Secretary of Commerce for Oceans and 
     Atmosphere;
       (2) the Director of the United States Fish and Wildlife 
     Service;
       (3) the Administrator of the Environmental Protection 
     Agency;
       (4) the Secretary of the Army, acting through the Chief of 
     Engineers; and
       (5) the Director of the Federal Emergency Management 
     Agency.
       (c) Duties.--The Task Force shall--
       (1) conduct a study to--
       (A) identify the natural and beneficial functions of the 
     floodplain that reduce flood-related losses; and
       (B) develop recommendations on how to reduce flood losses 
     by protecting the natural and beneficial functions of the 
     floodplain; and
       (2) make the information and recommendations under 
     subparagraphs (A) and (B) publicly available.
       (d) Noncompensation.--Members of the Task Force shall 
     receive no additional pay by reason of their service on the 
     Task Force.
       (e) Chairperson.--The members of the Task Force shall elect 
     one member as chairperson of the Task Force.
       (f) 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.
       (g) Officers.--The chairperson of the Task Force may 
     appoint any officers to carry out the duties of the Task 
     Force under subsection (c).
       (h) Staff of Federal Agencies.--Upon request of the 
     chairperson of the Task Force, the head of any of the Federal 
     agencies and entities referred to under subsection (b) may 
     detail, on a nonreimbursable basis, any of the personnel of 
     such agency to the Task Force to assist the Task Force in 
     carrying out its duties under this section.
       (i) 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.
       (j) Termination.--The Task Force shall terminate upon the 
     expiration of the 24-month period beginning upon the 
     designation of the last member to be designated under 
     subsection (b).
                  Subtitle F--Miscellaneous Provisions

     SEC. 571. EXTENSION OF FLOOD INSURANCE PROGRAM.

       (a) In General.--Section 1319 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4026) is amended by striking 
     ``September 30, 1995'' and inserting ``September 30, 1996''.
       (b) Emergency Implementation.--Section 1336(a) of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4056(a)) is 
     amended by striking ``September 30, 1995'' and inserting 
     ``September 30, 1996''.

     SEC. 572. LIMITATION ON PREMIUM INCREASES.

       (a) Property-Specific Limitation.--Section 1308 of the 
     National Flood Insurance Act of 1968 (42 U.S.C. 4013(b)) is 
     amended--
       (1) in subsection (c), by striking ``Notwithstanding any 
     other provision of this title'' and inserting ``Subject only 
     to the limitation under subsection (e)''; and
       (2) by inserting after subsection (d) the following new 
     subsection:
       ``(e) Annual Limitation on Premium Increases.--
     Notwithstanding any other provision of this title, the 
     chargeable risk premium rates for flood insurance under this 
     title for any properties within any single risk 
     classification may not be increased by an amount that would 
     result in the average of such rate increases for properties 
     within the risk classification during any 12-month period 
     exceeding 10 percent of the average of the risk premium rates 
     for properties within the risk classification upon the 
     commencement of such 12-month period.''.
       (b) Repeal of Program-Wide Limitation.--Subsection (d) of 
     section 541 of the Housing and Community Development Act of 
     1987 (42 U.S.C. 4015 note) is hereby repealed.

     SEC. 573. 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 as 
     follows:
       (1) Residential property.--In paragraph (2), by striking 
     ``an amount of $150,000 under the provisions of this clause'' 
     and inserting the following: ``a total amount (including such 
     limits specified in paragraph (1)(A)(i)) of $250,000''.
       (2) Residential property contents.--In paragraph (3), by 
     striking ``an amount of $50,000 under the provisions of this 
     clause'' and inserting the following: ``a total amount 
     (including such limits specified in paragraph (1)(A)(ii)) of 
     $100,000''.
       (3) Nonresidential property and contents.--By striking 
     paragraph (4) and inserting the following new paragraph:
       ``(4) in the case of any nonresidential property, including 
     churches, for which the risk premium rate is determined in 
     accordance with the provisions of section 1307(a)(1), 
     additional flood insurance in excess of the limits specified 
     in subparagraphs (B) and (C) of paragraph (1) shall be made 
     available to every insured upon renewal and every applicant 
     for insurance, in respect to any single structure, up to a 
     total amount (including such limit specified in subparagraph 
     (B) or (C) of paragraph (1), as applicable) of $500,000 for 
     each structure and $500,000 for any contents related to each 
     structure; and''.
       (b) Removal of Ceiling on Coverage Required.--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 
     inserting a period; and
       (2) by striking paragraph (6).

     SEC. 574. 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 (5 U.S.C. 
     App.).''.

     SEC. 575. UPDATING OF FLOOD 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) Review of Flood Maps.--Once during each 5-year period 
     (the 1st such period beginning on the date of enactment of 
     the Riegle Community Development and Regulatory Improvement 
     Act of 1994) or more often as the Director determines 
     necessary, the Director shall assess the need to revise and 
     update all floodplain areas and flood risk zones identified, 
     delineated, or established under this section, based on an 
     analysis of all natural hazards affecting flood risks.
       ``(f) Updating Flood Maps.--The Director shall revise and 
     update any floodplain areas and flood-risk zones--
       ``(1) upon the determination of the Director, according to 
     the assessment under subsection (e), that revision and 
     updating are necessary for the areas and zones; or
       ``(2) upon the request from any State or local government 
     stating that specific floodplain areas or flood-risk zones in 
     the State or locality need revision or updating, if 
     sufficient technical data justifying the request is submitted 
     and the unit of government making the request agrees to 
     provide funds in an amount determined by the Director, but 
     which may not exceed 50 percent of the cost of carrying out 
     the requested revision or update.
       ``(g) Availability of Flood Maps.--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 the Federal entities for lending 
     regulation, Federal agency lenders, State agencies directly 
     responsible for coordinating the national flood insurance 
     program, and appropriate representatives of communities 
     participating in the national flood insurance program, and at 
     a reasonable cost to all other persons. Any receipts 
     resulting from this subsection shall be deposited in the 
     National Flood Insurance Fund, pursuant to section 
     1310(b)(6).
       ``(h) Notification of Flood Map Changes.--The Director 
     shall cause notice to be published in the Federal Register 
     (or shall provide notice by another comparable method) of any 
     change to flood insurance map panels and any change to flood 
     insurance map panels issued in the form of a letter of map 
     amendment or a letter of map revision. Such notice shall be 
     published or otherwise provided not later than 30 days after 
     the map change or revision becomes effective. Notice by any 
     method other than publication in the Federal Register shall 
     include all pertinent information, provide for regular and 
     frequent distribution, and be at least as accessible to map 
     users as notice in the Federal Register. All notices under 
     this subsection shall include information on how to obtain 
     copies of the changes or revisions.
       ``(i) Compendia of Flood Map Changes.--Every 6 months, the 
     Director shall publish separately in their entirety within a 
     compendium, all changes and revisions to flood insurance map 
     panels and all letters of map amendment and letters of map 
     revision for which notice was published in the Federal 
     Register or otherwise provided during the preceding 6 months. 
     The Director shall make such compendia available, free of 
     charge, to Federal entities for lending regulation, Federal 
     agency lenders, and States and communities participating in 
     the national flood insurance program pursuant to section 1310 
     and at cost to all other parties. Any receipts resulting from 
     this subsection shall be deposited in the National Flood 
     Insurance Fund, pursuant to section 1310(b)(6).
       ``(j) Provision of Information.--In the implementation of 
     revisions to and updates of flood insurance rate maps, the 
     Director shall share information, to the extent appropriate, 
     with the Under Secretary of Commerce for Oceans and 
     Atmosphere and representatives from State coastal zone 
     management programs.''.

     SEC. 576. TECHNICAL MAPPING ADVISORY COUNCIL.

       (a) Establishment.--There is established a council to be 
     known as the Technical Mapping Advisory Council (in this 
     section referred to as the ``Council'').
       (b) Membership.--
       (1) In general.--The Council shall consist of the Director 
     of the Federal Emergency Management Agency (in this section 
     referred to as the ``Director''), or the Director's designee, 
     and 10 additional members to be appointed by the Director or 
     the designee of the Director, who shall be--
       (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 a regulated lending institution;
       (I) a representative of the Federal Home Loan Mortgage 
     Corporation; and
       (J) a representative of the Federal National Mortgage 
     Association.
       (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) submit an annual report to the Director that contains--
       (A) a description of 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 pursuant to 
     the amendment made by section 675; 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 (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 FEMA.--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. 577. EVALUATION OF EROSION HAZARDS.

       (a) Report Requirement.--The Director of the Federal 
     Emergency Management Agency (in this section referred to as 
     the ``Director'') shall submit a report under this section to 
     the Congress that--
       (1) lists all communities that are likely to be identified 
     as having erosion hazard areas;
       (2) estimates the amount of flood insurance claims under 
     the national flood insurance program that are attributable to 
     erosion;
       (3) states the amount of flood insurance claims under such 
     program that are attributable to claims under section 1306(c) 
     of the National Flood Insurance Act of 1968;
       (4) assesses the full economic impact of erosion on the 
     National Flood Insurance Fund; and
       (5) determines the costs and benefits of expenditures 
     necessary from the National Flood Insurance Fund to complete 
     mapping of erosion hazard areas.
       (b) Estimate of Flood Claims.--In developing the estimate 
     under subsection (a)(2)--
       (1) the Director may map a statistically valid and 
     representative number of communities with erosion hazard 
     areas throughout the United States, including coastal, Great 
     Lakes, and, if technologically feasible, riverine areas; and
       (2) the Director shall take into consideration the efforts 
     of State and local governments to assess, measure, and reduce 
     erosion hazards.
       (c) Economic Impact.--
       (1) In general.--The assessment under subsection (a)(4) 
     shall assess the economic impact of--
       (A) erosion on communities listed pursuant to subsection 
     (a)(1);
       (B) the denial of flood insurance for all structures in 
     communities listed pursuant to subsection (a)(1);
       (C) the denial of flood insurance for structures that are 
     newly constructed in whole in communities listed pursuant to 
     subsection (a)(1);
       (D) the establishment of (i) actuarial rates for existing 
     structures in communities listed pursuant to subsection 
     (a)(1), and (ii) actuarial rates for such structures in 
     connection with the denial of flood insurance as described in 
     subparagraph (C);
       (E) the establishment of actuarial rates for structures 
     newly constructed in whole in erosion hazard areas in 
     communities listed pursuant to subsection (a)(1);
       (F) the denial of flood insurance pursuant to existing 
     requirements for coverage under the national flood insurance 
     program;
       (G) erosion hazard assessment, measurement, and management 
     activities undertaken by State and local governments, 
     including building restrictions, beach nourishment, 
     construction of sea walls and levees, and other activities 
     that reduce the risk of damage due to erosion; and
       (H) the mapping and identifying of communities (or 
     subdivisions thereof) having erosion hazard areas.
       (2) Scope.--In assessing the economic impact of the 
     activities under subparagraphs (A) through (H) of paragraph 
     (1), the assessment under subsection (a)(4) shall address 
     such impact on 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;
       (E) the estimated cost of Federal and State disaster 
     assistance to flood victims; and
       (F) the mapping and identifying of communities (or 
     subdivisions thereof) having erosion hazard areas.
       (3) Preparation.--The assessment required under subsection 
     (a)(4) shall be conducted by a private independent entity 
     selected by the Director. The private entity shall consult 
     with a statistically valid and representative number of 
     communities listed pursuant to subsection (a)(1) in 
     conducting the assessment.
       (d) Costs and Benefits of Mapping.--The determination under 
     subsection (a)(5) shall--
       (1) determine 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;
       (2) if the Director determines that the savings to the 
     National Flood Insurance Fund will exceed the cost of mapping 
     erosion hazard areas, further assess whether using flood 
     insurance premiums for costs of mapping erosion hazard areas 
     is cost-beneficial compared to alternative uses of such 
     amounts, including--
       (A) funding the mitigation assistance program under section 
     1366 of the National Flood Insurance Act of 1968 (as added by 
     section 553 of this Act);
       (B) funding the program under section 1304(b) of the 
     National Flood Insurance Act of 1968 (as added by section 
     555(a) of this Act) that provides additional coverage under 
     the national flood insurance program for compliance with land 
     use and control measures; and
       (C) reviewing, revising, and updating flood insurance rate 
     maps under subsections (e) and (f) of section 1360 of the 
     National Flood Insurance Act of 1968 (as added by the 
     amendment made by section 575 of this Act);
       (3) if the Director determines under subsection (b)(1) that 
     mapping of riverine areas for erosion hazard areas is 
     technologically feasible, determine the costs and benefits of 
     conducting the mapping of erosion hazards in riverine areas 
     (A) separately from the mapping of other erosion hazard 
     areas, and (B) together with the mapping of other such areas;
       (4) if the Director determines that the savings to the 
     National Flood Insurance Fund will exceed the cost of mapping 
     erosion hazard areas in riverine areas, assess whether using 
     flood insurance premiums for costs of mapping erosion hazard 
     areas in riverine areas is cost-beneficial compared to 
     alternative uses of such amounts, including the uses under 
     subparagraphs (A) through (C) of paragraph (2); and
       (5) determine the costs and benefits of mapping erosion, 
     other than those directly related to the financial condition 
     of the National Flood Insurance Program, and the costs 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 infrastructure within a 60-year period.
       (f) Consultation.--In preparing the report under this 
     section, the Director shall consult with--
       (1) representatives from State coastal zone management 
     programs approved under section 306 of the Coastal Zone 
     Management Act of 1972;
       (2) the Administrator of the National Oceanic and 
     Atmospheric Administration; and
       (3) any other persons, officials, or entities that the 
     Director considers appropriate.
       (g) Submission.--The Director shall submit the report to 
     the Congress as soon as practicable, but not later than 2 
     years after the date of enactment of this Act.
       (h) Availability of National Flood Insurance Fund.--Section 
     1310(a) of the National Flood Insurance Act of 1968 (42 
     U.S.C. 4017(a)) is amended--
       (1) in the matter preceding paragraph (1), by inserting 
     ``(except as otherwise provided in this section)'' after 
     ``without fiscal year limitation''; and
       (2) by inserting after paragraph (7) (as added by the 
     preceding provisions of this title) the following new 
     paragraph:
       ``(8) for costs of preparing the report under section 577 
     of the Riegle Community Development and Regulatory 
     Improvement Act of 1994, except that the fund shall be 
     available for the purpose under this paragraph in an amount 
     not to exceed an aggregate of $5,000,000 over the 2-year 
     period beginning on the date of enactment of the Riegle 
     Community Development and Regulatory Improvement Act of 
     1994.''.

     SEC. 578. STUDY OF ECONOMIC EFFECTS OF CHARGING ACTUARIALLY 
                   BASED PREMIUM RATES FOR PRE-FIRM STRUCTURES.

       (a) Study.--The Director of the Federal Emergency 
     Management Agency (in this section referred to as the 
     ``Director'') shall conduct a study of the economic effects 
     that would result from increasing premium rates for flood 
     insurance coverage made available under the national flood 
     insurance program for pre-FIRM structures to the full 
     actuarial risk based premium rate determined under section 
     1307(a)(1) of the National Flood Insurance Act of 1968 for 
     the area in which the property is located. In conducting the 
     study, the Director shall--
       (1) determine each area that would be subject to such 
     increased premium rates; and
       (2) for each such area, determine--
       (A) the amount by which premium rates would be increased;
       (B) the number and types of properties affected and the 
     number and types of properties covered by flood insurance 
     under this title likely to cancel such insurance if the rate 
     increases were made;
       (C) the effects that the increased premium rates would have 
     on land values and property taxes; and
       (D) any other effects that the increased premium rates 
     would have on the economy and homeowners.
       (b) Definition of Pre-FIRM Structure.--For purposes of 
     subsection (a), the term ``pre-FIRM structure'' means a 
     structure that was not constructed or substantially improved 
     after the later of--
       (1) December 31, 1974; or
       (2) the effective date of the initial rate map published by 
     the Director under section 1360(a)(2) of the National Flood 
     Insurance Act of 1968 for the area in which such structure is 
     located.
       (c) Report.--The Director shall submit a report to the 
     Congress describing and explaining the findings of the study 
     conducted under this section. The report shall be submitted 
     not later than 12 months after the date of enactment of this 
     Act.

     SEC. 579. EFFECTIVE DATES OF POLICIES.

       (a) 30-Day Delay.--Section 1306 of the National Flood 
     Insurance Act of 1968 (42 U.S.C. 4013), as amended by the 
     preceding provisions of this title, is further amended by 
     adding at the end the following new subsection:
       ``(c) Effective Date of Policies.--
       ``(1) Waiting period.--Except as provided in paragraph (2), 
     coverage under a new contract for flood insurance coverage 
     under this title entered into after the date of enactment of 
     the Riegle Community Development and Regulatory Improvement 
     Act of 1994, and any modification to coverage under an 
     existing flood insurance contract made after such date, shall 
     become effective upon the expiration of the 30-day period 
     beginning on the date that all obligations for such coverage 
     (including completion of the application and payment of any 
     initial premiums owed) are satisfactorily completed.
       ``(2) Exception.--The provisions of paragraph (1) shall not 
     apply to--
       ``(A) the initial purchase of flood insurance coverage 
     under this title when the purchase of insurance is in 
     connection with the making, increasing, extension, or renewal 
     of a loan; or
       ``(B) the initial purchase of flood insurance coverage 
     pursuant to a revision or updating of floodplain areas or 
     flood-risk zones under section 1360(f), if such purchase 
     occurs during the 1-year period beginning upon publication of 
     notice of the revision or updating under section 1360(h).''.
       (b) Study.--The Director of the Federal Emergency 
     Management Agency shall conduct a study to determine the 
     appropriateness of existing requirements regarding the 
     effective date and time of coverage under flood insurance 
     contracts obtained through the national flood insurance 
     program. In conducting the study, the Director shall 
     determine whether any delay between the time of purchase of 
     flood insurance coverage and the time of initial 
     effectiveness of the coverage should differ for various 
     classes of properties (based upon the type of property, 
     location of the property, or any other factors related to the 
     property) or for various circumstances under which such 
     insurance was purchased. Not later than the expiration of the 
     6-month period beginning on the date of enactment of this 
     Act, the Director shall submit to the Congress a report on 
     the results of the study.

     SEC. 580. AGRICULTURAL STRUCTURES.

       Section 1315(a) of the National Flood Insurance Act of 1968 
     (42 U.S.C. 4022(a)), as amended by the preceding provisions 
     of this title, is further amended by adding at the end the 
     following new paragraph:
       ``(2) Agricultural structures.--
       ``(A) Activity restrictions.--Notwithstanding any other 
     provision of law, the adequate land use and control measures 
     required to be adopted in an area (or subdivision thereof) 
     pursuant to paragraph (1) may provide, at the discretion of 
     the appropriate State or local authority, for the repair and 
     restoration to predamaged conditions of an agricultural 
     structure that--
       ``(i) is a repetitive loss structure; or
       ``(ii) has incurred flood-related damage to the extent that 
     the cost of restoring the structure to its predamaged 
     condition would equal or exceed 50 percent of the market 
     value of the structure before the damage occurred.
       ``(B) Premium rates and coverage.--To the extent 
     applicable, an agricultural structure repaired or restored 
     pursuant to subparagraph (A) shall pay chargeable premium 
     rates established under section 1308 at the estimated risk 
     premium rates under section 1307(a)(1). If resources are 
     available, the Director shall provide technical assistance 
     and counseling, upon request of the owner of the structure, 
     regarding wet flood-proofing and other flood damage reduction 
     measures for agricultural structures. The Director shall not 
     be required to make flood insurance coverage available for 
     such an agricultural structure unless the structure is wet 
     flood-proofed through permanent or contingent measures 
     applied to the structure or its contents that prevent or 
     provide resistance to damage from flooding by allowing flood 
     waters to pass through the structure, as determined by the 
     Director.
       ``(C) Prohibition on disaster relief.--Notwithstanding any 
     other provision of law, any agricultural structure repaired 
     or restored pursuant to subparagraph (A) shall not be 
     eligible for disaster relief assistance under any program 
     administered by the Director or any other Federal agency.
       ``(D) Definitions.--For purposes of this paragraph--
       ``(i) the term `agricultural structure' means any structure 
     used exclusively in connection with the production, 
     harvesting, storage, raising, or drying of agricultural 
     commodities; and
       ``(ii) the term `agricultural commodities' means 
     agricultural commodities and livestock.''.

     SEC. 581. IMPLEMENTATION REVIEW BY 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 Riegle Community Development and 
     Regulatory Improvement Act of 1994.''.

     SEC. 582. 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) Transfer of Property.--
       (1) Duty to notify.--In the event of the transfer of any 
     property described in paragraph (3), the transferor shall, 
     not later than the date on which such transfer occurs, notify 
     the transferee in writing of the requirements to--
       (A) obtain flood insurance in accordance with applicable 
     Federal law with respect to such property, if the property is 
     not so insured as of the date on which the property is 
     transferred; and
       (B) maintain flood insurance in accordance with applicable 
     Federal law with respect to such property.

     Such written notification shall be contained in documents 
     evidencing the transfer of ownership of the property.
       (2) Failure to notify.--If a transferor described in 
     paragraph (1) fails to make a notification in accordance with 
     such paragraph and, subsequent to the transfer of the 
     property--
       (A) the transferee fails to obtain or maintain flood 
     insurance in accordance with applicable Federal law with 
     respect to the property,
       (B) the property is damaged by a flood disaster, and
       (C) Federal disaster relief assistance is provided for the 
     repair, replacement, or restoration of the property as a 
     result of such damage,

     the transferor shall be required to reimburse the Federal 
     Government in an amount equal to the amount of the Federal 
     disaster relief assistance provided with respect to the 
     property.
       (3) Property described.--For purposes of paragraph (1), a 
     property is described in this paragraph if it is personal, 
     commercial, or residential property for which Federal 
     disaster relief assistance made available in a flood disaster 
     area has been provided, prior to the date on which the 
     property is transferred, for repair, replacement, or 
     restoration of the property, if such assistance was 
     conditioned upon obtaining flood insurance in accordance with 
     applicable Federal law with respect to such property.
       (c) 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.''.
       (d) 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.
       (e) Effective Date.--This section and the amendments made 
     by this section shall apply to disasters declared after the 
     date of enactment of this Act.

     SEC. 583. REGULATIONS.

       The Director of the Federal Emergency Management Agency and 
     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. 584. RELATION TO STATE AND LOCAL LAWS.

       This title and the amendments made by this title may not be 
     construed to preempt, annul, alter, amend, or exempt any 
     person from compliance with any law, ordinance, or regulation 
     of any State or local government with respect to land use, 
     management, or control.
                      TITLE VI--GENERAL PROVISIONS

     SEC. 601. 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. 602. TECHNICAL AMENDMENTS TO THE FEDERAL BANKING LAWS.

       (a) Federal Deposit Insurance Act Amendments.--The Federal 
     Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended--
       (1) in section 3--
       (A) in subsection (i)(1), by striking ``(11)(h)'' and 
     inserting ``(11)(m)'';
       (B) in subsection (l)(4), by striking ``bank's or'' and 
     inserting ``a bank's or a''; and
       (C) in subsection (q)(2)(E), by striking ``Depository 
     Institutions Supervisory Act'' and inserting ``Financial 
     Institutions Supervisory Act of 1966''.
       (2) in section 5(b)(5), by striking the semicolon at the 
     end and inserting a comma;
       (3) in section 5(e)(4), by redesignating clauses (i) and 
     (ii) as subparagraphs (A) and (B) respectively, and indenting 
     appropriately;
       (4) in section 7(a)(3), by striking ``Chairman of the'' 
     before ``Director of the Office of Thrift Supervision'';
       (5) in section 7(b)(3)(C), by striking the first period at 
     the end;
       (6) in section 7(j)(2)(A), in the third sentence--
       (A) by striking ``this section (j)(2)'' and inserting 
     ``this paragraph''; and
       (B) by striking ``this subsection (j)(2)'' and inserting 
     ``this paragraph'';
       (7) in section 7(j)(7)(A), by striking ``monoplize'' and 
     inserting ``monopolize'';
       (8) in section 7(l)(7), by striking ``the ratio of the 
     value of'' and inserting ``the ratio of'';
       (9) in section 7(m)(5)(A) by striking ``savings association 
     institution'' and inserting ``such institution'';
       (10) in section 7(m)(7), by inserting ``the'' before 
     ``Federal'';
       (11) in section 8(a)(3), by striking ``subparagraph (B) of 
     this subsection'' and inserting ``paragraph (2)(B)'';
       (12) in section 8(a)(7)--
       (A) by inserting a comma after ``Board of Directors''; and
       (B) by striking ``the period the period'' and inserting 
     ``the period'';
       (13) in section 8(b)(4), by striking ``subparagraph (3)'' 
     and inserting ``paragraph (3)'';
       (14) in section 8(c)(2), by striking ``injuction'' and 
     inserting ``injunction'';
       (15) in section 8(g)(2), by striking ``depository 
     institution'' each place such term appears and inserting 
     ``bank'';
       (16) in section 8(o)--
       (A) in the second sentence, by striking ``subsection (b)'' 
     and inserting ``subsection (d)''; and
       (B) by striking ``board of directors'' each place such term 
     appears and inserting ``Board of Directors'';
       (17) in section 8(p), by striking ``banking'' each place 
     such term appears and inserting ``depository'';
       (18) in section 8(r)(2), by striking ``therof'' and 
     inserting ``thereof'';
       (19) in section 10(b)(1), by striking ``claim'' and 
     inserting ``claims'';
       (20) in section 10(b)(2)(B), by adding ``and'' at the end;
       (21) in the section heading for paragraph (4) of section 
     11(a), by striking ``Provisions'' and inserting 
     ``provisions'';
       (22) in section 11(d)(2)(B)(iii), by striking ``is'' and 
     inserting ``are'';
       (23) in section 11(d)(8)(B)(ii), by inserting ``provide'' 
     before ``a statement'';
       (24) in section 11(d)(14)(B), by striking ``statute of 
     limitation'' and inserting ``statute of limitations'';
       (25) in section 11(d)(16)(B)(iv), by striking 
     ``dispositions'' and inserting ``disposition'';
       (26) in section 11(e)(8)(D)(v)(I), by inserting a closing 
     parenthesis after ``1934'';
       (27) in section 11(e)(12)(B), by striking ``directors or 
     officers'' and inserting ``directors' or officers''';
       (28) in section 11(f)(3)(A), by striking ``to'' in the 
     heading and inserting ``with'';
       (29) in the second sentence of section 11(i)(3)(A), by 
     striking ``other claimant or category or claimants'' and 
     inserting ``other claimant or category of claimants'';
       (30) in section 11(n)(4)(E)(i), by adding ``and'' at the 
     end;
       (31) in section 11(n)(12)(A), by striking ``subparagraphs'' 
     and inserting ``subparagraph'';
       (32) in the second sentence of section 11(q)(1), by 
     striking ``decided'' and inserting ``held'';
       (33) in section 11(u)(3)(B), by striking ``subsection 
     (c)(9)'' and inserting ``section 40(p)'';
       (34) in section 13(c)(1)(B)--
       (A) by striking ``a in default insured bank'' and inserting 
     ``an insured bank in default''; and
       (B) by striking ``such in default insured bank'' and 
     inserting ``such insured bank'';
       (35) in section 13(c)(2)(A)--
       (A) by striking ``with an insured institution'' and 
     inserting ``with another insured depository institution''; 
     and
       (B) by striking ``by an insured institution'' and inserting 
     ``by another insured depository institution'';
       (36) in section 13(f)(2)(B)(i), by striking ``the in 
     default insured bank'' and inserting ``the insured bank in 
     default'';
       (37) in section 13(f)(2)(B)(iii), by striking ``of of'' and 
     inserting ``of'';
       (38) in section 13(f)(3), by striking ``closing'' in the 
     heading and inserting ``default'';
       (39) in section 13(f)(6)(A), by striking ``bank that has in 
     default'' and inserting ``bank that is in default'';
       (40) in section 13(f)(6)(B)(i), by striking the semicolon 
     at the end and inserting a period;
       (41) in section 13(f)(7)--
       (A) in subparagraph (A), by striking ``or'' at the end; and
       (B) in subparagraph (B), by striking the period at the end 
     and inserting ``; or'';
       (42) in section 13(f)(12)(A), by striking ``is less than'' 
     and inserting ``are less than'';
       (43) in section 15(c)(1), by striking ``obligations 
     liabilities'' in the heading and inserting ``obligations, 
     guarantees, and liabilities'';
       (44) in section 18(b), by striking ``, if such bank shall 
     deposit'' and inserting ``if the insured depository 
     institution deposits'';
       (45) in section 18(c)(1)(B), by inserting ``or'' at the 
     end;
       (46) in section 18(c)(4), by striking ``other two banking 
     agencies'' each place such term appears and inserting ``other 
     Federal banking agencies'';
       (47) in section 18(c)(6), by striking ``other two banking 
     agencies'' and inserting ``other Federal banking agencies'';
       (48) in section 18(c)(9), by striking ``with the following 
     information:'' and inserting ``with--'';
       (49) in section 18(f)--
       (A) by striking ``such bank'' and inserting ``such insured 
     depository institution''; and
       (B) by striking ``the bank'' and inserting ``the insured 
     depository institution'';
       (50) in section 18(k)(4)(A)(ii)(II), by striking ``or'' at 
     the end;
       (51) in section 20(a)(3), by inserting ``or'' at the end;
       (52) in section 21(c), by striking ``the bank'' and 
     inserting ``the insured depository institution'';
       (53) in section 21(d)(2), by striking ``the bank'' and 
     inserting ``the insured depository institution'';
       (54) in section 21(e), by striking ``the bank'' and 
     inserting ``the insured depository institution'';
       (55) in section 25(a), by striking ``the bank'' each place 
     it appears and inserting ``the insured depository 
     institution, insured branch, or bank'';
       (56) in section 28(c)(2)(A)(i) by striking ``, or'' and 
     inserting ``; or'';
       (57) in section 28(d)(4)(C), by striking ``subparagraphs'' 
     and inserting ``subparagraph'';
       (58) in section 28(e)(4), ``any other'' and inserting ``and 
     any other'';
       (59) in section 30(e)(1)(A), by striking ``venders'' and 
     inserting ``the vendors'';
       (60) in section 31(b)(1), by striking ``Board of 
     Directors'' and inserting ``board of directors'';
       (61) in section 33(c)(1), by striking the comma at the end 
     and inserting a semicolon;
       (62) in section 34(a)(1)(A)(iii)--
       (A) by striking ``sections'' and inserting ``section''; and
       (B) by striking ``and'' and inserting ``or'';
       (63) in section 34(a)(2), by adding a period at the end;
       (64) in section 38(f)(6), by striking ``Commission'' and 
     inserting ``Commission'';
       (65) in section 40(c)(4)(A), by striking ``subsections 
     (p)(12)(B) and (C)'' and inserting ``subparagraphs (B) and 
     (C) of subsection (p)(12)''; and
       (66) in section 40(d)(8)(A), by striking ``meeting'' and 
     inserting ``meeting the''.
       (b) Federal Home Loan Bank Act.--Section 21A of the Federal 
     Home Loan Bank Act (12 U.S.C. 1441a) is amended--
       (1) in subsection (a)(11), by striking ``a United States 
     District Court'' and inserting ``a United States district 
     court'';
       (2) in subsection (b)(11)(B)(iii), by striking the comma 
     after ``chapter 5'';
       (3) in subsection (b)(11)(E)(iv)(II), by striking 
     ``knowledgable'' and inserting ``knowledgeable'';
       (4) in subsection (b)(11)(G), by inserting ``Advisory 
     personnel.--'' before ``The Corporation shall'';
       (5) in subsection (r)(4), by striking ``subsection.--'' and 
     inserting ``subsection, the following definitions shall 
     apply:'';
       (6) in subsection (s)(2), by striking ``subsection--'' and 
     inserting ``subsection, the following definitions shall 
     apply:''; and
       (7) in subsection (u)(5), by striking ``subsection--'' and 
     inserting ``subsection, the following definitions shall 
     apply:''.
       (c) Resolution Trust Corporation Completion Act.--Section 
     21(a) of the Resolution Trust Corporation Completion Act (107 
     Stat. 2406) is amended--
       (1) by striking ``33(a)'' and inserting ``33'';
       (2) by striking ``1831j(a)'' and inserting ``1831j'';
       (3) in paragraph (1), by striking ``paragraph (1)'' and 
     inserting ``subsection (a)(1)''; and
       (4) in paragraph (2), by striking ``paragraph (2)'' and 
     inserting ``subsection (a)(2)''.
       (d) Federal Reserve Act.--Section 7(a) of the Federal 
     Reserve Act (12 U.S.C. 289) is amended--
       (1) in paragraph (1)(B), by inserting ``(A)'' after 
     ``subparagraph''; and
       (2) in paragraph (2), by striking ``subparagraph (A)'' and 
     inserting ``paragraph (1)(A)''.
       (e) Repeal of Provisions in the Revised Statutes.--The 
     following sections of the Revised Statutes are hereby 
     repealed:
       (1) Section 5170 (12 U.S.C. 28).
       (2) Section 5203 (12 U.S.C. 87).
       (3) Section 5206 (12 U.S.C. 88).
       (4) Section 5196 (12 U.S.C. 89).
       (5) Section 5158 (12 U.S.C. 102).
       (6) Section 5159 (12 U.S.C. 101a).
       (7) Section 5172 (12 U.S.C. 104).
       (8) Section 5173 (12 U.S.C. 107).
       (9) Section 5174 (12 U.S.C. 108).
       (10) Section 5182 (12 U.S.C. 109).
       (11) Section 5183 (12 U.S.C. 110).
       (12) Section 5195 (12 U.S.C. 123).
       (13) Section 5184 (12 U.S.C. 124).
       (14) Section 5226 (12 U.S.C. 131).
       (15) Section 5227 (12 U.S.C. 132).
       (16) Section 5228 (12 U.S.C. 133).
       (17) Section 5229 (12 U.S.C. 134).
       (18) Section 5230 (12 U.S.C. 137).
       (19) Section 5231 (12 U.S.C. 138).
       (20) Section 5232 (12 U.S.C. 135).
       (21) Section 5233 (12 U.S.C. 136).
       (22) Section 5185 (12 U.S.C. 151).
       (23) Section 5186 (12 U.S.C. 152).
       (24) Section 5160 (12 U.S.C. 168).
       (25) Section 5161 (12 U.S.C. 169).
       (26) Section 5162 (12 U.S.C. 170).
       (27) Section 5163 (12 U.S.C. 171).
       (28) Section 5164 (12 U.S.C. 172).
       (29) Section 5165 (12 U.S.C. 173).
       (30) Section 5166 (12 U.S.C. 174).
       (31) Section 5167 (12 U.S.C. 175).
       (32) Section 5222 (12 U.S.C. 183).
       (33) Section 5223 (12 U.S.C. 184).
       (34) Section 5224 (12 U.S.C. 185).
       (35) Section 5225 (12 U.S.C. 186).
       (36) Section 5237 (12 U.S.C. 195).
       (f) Repeal of Other Obsolete Provisions in Banking Laws.--
     The following provisions of law are hereby repealed:
       (1) Section 26 of the Federal Deposit Insurance Act (12 
     U.S.C. 1831c).
       (2) Section 12 of the Act entitled ``An Act To define and 
     fix the standard of value, to maintain the parity of all 
     forms of money issued or coined by the United States, to 
     refund the public debt, and for other purposes.'' and 
     approved March 14, 1900 (12 U.S.C. 101).
       (3) Section 3 of the Act entitled ``An Act To amend the 
     laws relating to the denominations of circulating notes by 
     national banks and to permit the issuance of notes of small 
     denominations, and for other purposes.'' and approved October 
     5, 1917 (12 U.S.C. 103).
       (4) The following sections of the Act entitled ``An Act 
     fixing the amount of United States notes, providing for a 
     redistribution of the national-bank currency, and for other 
     purposes.'' and approved June 20, 1874:
       (A) Section 5 (12 U.S.C. 105).
       (B) Section 3 (12 U.S.C. 121).
       (C) Section 8 (12 U.S.C. 126).
       (D) Section 4 (12 U.S.C. 176).
       (5) The following sections of the Act entitled ``An Act to 
     enable national-banking associations to extend their 
     corporate existence, and for other purposes.'' and approved 
     July 12, 1882:
       (A) Section 8 (12 U.S.C. 177).
       (B) Section 9 (12 U.S.C. 178).
       (6) The Act entitled ``An Act to amend the national bank 
     act in providing for the redemption of national bank notes 
     stolen from or lost by banks of issue.'' and approved July 
     28, 1892 (12 U.S.C. 125).
       (7) The Act entitled ``An Act authorizing the conversion of 
     national gold banks.'' and approved February 14, 1880 (12 
     U.S.C. 153).
       (g) Amendments to Other Laws.--
       (1) The 8th paragraph of the 4th undesignated paragraph of 
     section 4 of the Federal Reserve Act (12 U.S.C. 341) is 
     amended by striking ``Comptroller of the Currency'' and 
     inserting ``Secretary of the Treasury''.
       (2) Section 11(d) of the Federal Reserve Act (12 U.S.C. 
     248(d)) is amended--
       (A) by striking ``bureau under the charge of the 
     Comptroller of the Currency'' and inserting ``Secretary of 
     the Treasury''; and
       (B) by striking ``Comptroller'' and inserting ``Secretary 
     of the Treasury''.
       (3) The 1st sentence of the 8th undesignated paragraph of 
     section 16 of the Federal Reserve Act (12 U.S.C. 418) is 
     amended by striking ``the Comptroller of the Currency shall 
     under the direction of the Secretary of the Treasury,'' and 
     inserting ``the Secretary of the Treasury shall''.
       (4) The 9th undesignated paragraph of section 16 of the 
     Federal Reserve Act (12 U.S.C. 419) is amended to read as 
     follows:
       ``When such notes have been prepared, the notes shall be 
     delivered to the Board of Governors of the Federal Reserve 
     System subject to the order of the Secretary of the Treasury 
     for the delivery of such notes in accordance with this 
     Act.''.
       (5) The 10th undesignated paragraph of section 16 of the 
     Federal Reserve Act (12 U.S.C. 420) is amended--
       (A) by striking ``Comptroller of the Currency'' and 
     inserting ``Secretary of the Treasury''; and
       (B) by striking ``Federal Reserve Board'' and inserting 
     ``Board of Governors of the Federal Reserve System''.
       (6) The 11th undesignated paragraph of section 16 of the 
     Federal Reserve Act (12 U.S.C. 421) is amended to read as 
     follows:
       ``The Secretary of the Treasury may examine the plates, 
     dies, bed pieces, and other material used in the printing of 
     Federal Reserve notes and issue regulations relating to such 
     examinations.''.
       (7) The 6th undesignated paragraph of section 18 of the 
     Federal Reserve Act (38 Stat. 269) is amended--
       (A) by striking ``Comptroller of the Currency'' each place 
     it appears and inserting ``Secretary of the Treasury''; and
       (B) in the 7th sentence, by striking ``Comptroller'' and 
     inserting ``Secretary of the Treasury''.
       (8) The Act entitled ``An Act to provide for the redemption 
     of national-bank notes, Federal Reserve bank notes, and 
     Federal Reserve notes which cannot be identified as to the 
     bank of issue.'' and approved June 13, 1933, is amended--
       (A) in the 1st section (12 U.S.C. 121a)--
       (i) by striking ``whenever any national-bank notes, Federal 
     Reserve bank notes,'' and inserting ``whenever any Federal 
     Reserve bank notes''; and
       (ii) by striking ``, and the notes, other than Federal 
     Reserve notes, so redeemed shall be forwarded to the 
     Comptroller of the Currency for cancellation and 
     destruction''; and
       (B) in section 2 (12 U.S.C. 122a)--
       (i) by striking ``National-bank notes and''; and
       (ii) by striking ``national-bank notes and''.
       (9) The 1st section of the Act entitled ``An Act making 
     appropriations for sundry civil expenses of the Government 
     for the fiscal year ending June thirtieth, eighteen hundred 
     and seventy-six, and for other purposes.'' and approved March 
     3, 1875, is amended in the 1st paragraph which appears under 
     the heading ``national currency'' by striking ``Secretary of 
     the Treasury: Provided, That'' and all that follows through 
     the period and inserting ``Secretary of the Treasury.''.
       (10) The Act entitled ``An Act to simplify the accounts of 
     the Treasurer of the United States, and for other purposes.'' 
     and approved October 10, 1940 (12 U.S.C. 177a) is amended by 
     striking all after the enacting clause and inserting the 
     following: ``That the cost of transporting and redeeming 
     outstanding national bank notes and Federal Reserve bank 
     notes as may be presented to the Treasurer of the United 
     States for redemption shall be paid from the regular annual 
     appropriation for the Department of the Treasury.''.
       (11) Section 5234 of the Revised Statutes (12 U.S.C. 192) 
     is amended by striking ``has refused to pay its circulating 
     notes as therein mentioned, and''.
       (12) Section 5236 of the Revised Statutes (12 U.S.C. 194) 
     is amended by striking ``, after full provision has been 
     first made for refunding to the United States any deficiency 
     in redeeming the notes of such association''.
       (13) Section 5238 of the Revised Statutes (12 U.S.C. 196) 
     is amended by striking the 1st sentence.
       (14) Section 5119(b)(2) of title 31, United States Code, is 
     amended by adding at the end the following: ``The Secretary 
     shall not be required to reissue United States currency notes 
     upon redemption.''.
       (h) Amendments to Outdated Dividend Provisions.--
       (1) Withdrawal of capital.--Section 5204 of the Revised 
     Statutes (12 U.S.C. 56) is amended--
       (A) in the 2d 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
       (B) by striking the 3d sentence.
       (2) Declaration of dividends.--Section 5199 of the Revised 
     Statutes (12 U.S.C. 60) is amended--
       (A) in the 1st sentence, by striking ``net profits of the 
     association'' and inserting ``undivided profits of the 
     association, subject to the limitations in subsection (b),'';
       (B) by striking ``net profits'' each subsequent place such 
     term appears and inserting ``net income''; and
       (C) by striking subsection (c).
       (i) Clerical Amendments.--
       (1) The table of sections for chapter 1 of title LXII of 
     the Revised Statutes of the United States is amended--
       (A) by inserting after the item relating to section 5156 
     the following new item:

``5156A. Mergers, consolidations, and other acquisitions authorized.'';

     and
       (B) by striking the items relating to sections 5141 and 
     5151.
       (2) The table of sections for chapter 2 of title LXII of 
     the Revised Statutes of the United States is amended by 
     striking the item relating to each of the following sections:
       (A) Section 5158.
       (B) Section 5159.
       (C) Section 5160.
       (D) Section 5161.
       (E) Section 5162.
       (F) Section 5163.
       (G) Section 5164.
       (H) Section 5165.
       (I) Section 5166.
       (J) Section 5167.
       (K) Section 5170.
       (L) Section 5171.
       (M) Section 5172.
       (N) Section 5173.
       (O) Section 5174.
       (P) Section 5175.
       (Q) Section 5176.
       (R) Section 5177.
       (S) Section 5178.
       (T) Section 5179.
       (U) Section 5180.
       (V) Section 5181.
       (W) Section 5182.
       (X) Section 5183.
       (Y) Section 5184.
       (Z) Section 5185.
       (AA) Section 5186.
       (BB) Section 5187.
       (CC) Section 5188.
       (DD) Section 5189.
       (3) The table of sections for chapter 3 of title LXII of 
     the Revised Statutes of the United States is amended by 
     striking the item relating to each of the following sections:
       (A) Section 5193.
       (B) Section 5194.
       (C) Section 5195.
       (D) Section 5196.
       (E) Section 5202.
       (F) Section 5203.
       (G) Section 5206.
       (H) Section 5209.
       (I) Section 5212.
       (4) The table of sections for chapter 4 of title LXII of 
     the Revised Statutes of the United States is amended--
       (A) by inserting after the item relating to section 5239 
     the following new item:

``5239A. Regulatory authority.'';

     and
       (B) by striking the items relating to the following 
     sections:
       (i) Section 5222.
       (ii) Section 5223.
       (iii) Section 5224.
       (iv) Section 5225.
       (v) Section 5226.
       (vi) Section 5227.
       (vii) Section 5228.
       (viii) Section 5229.
       (ix) Section 5230.
       (x) Section 5231.
       (xi) Section 5232.
       (xii) Section 5233.
       (xiii) Section 5237.
       (xiv) Section 5243.
       And the Senate agree to the same.
     From the Committee on Banking, Finance and Urban Affairs, for 
     consideration of the House bill, and the Senate amendment 
     (except titles II and V), and modifications committed to 
     conference:
     Henry Gonzalez,
     Steve Neal,
     John J. LaFalce,
     Bruce F. Vento,
     Charles Schumer,
     Barney Frank,
     Paul E. Kanjorski,
     Joe Kennedy,
     Floyd H. Flake,
     Kweisi Mfume,
     Larry LaRocco,
     William Orton,
     Jim Bacchus,
     James Leach,
     Bill McCollum,
     Marge Roukema,
     Doug Bereuter,
     Tom Ridge,
     Toby Roth,
     Al McCandless,
     R.H. Baker,
     Jim Nussle,
     Provided, that for consideration of section 348(b) of the 
     Senate amendment, Mr. Klein is appointed in lieu of Mr. 
     LaFalce.
     Herb Klein,
     Provided, that for consideration of title VI of the Senate 
     amendment, Mr. Lazio is appointed in lieu of Mr. Ridge.
     Rick Lazio,
     From the Committee on Banking, Finance and Urban Affairs, for 
     consideration of title II of the Senate amendment and 
     modifications committed to conference:
     Henry Gonzalez,
     Steve Neal,
     John J. LaFalce,
     Bruce F. Vento,
     Charles Schumer,
     Barney Frank,
     Paul E. Kanjorski,
     Joe Kennedy,
     Floyd H. Flake,
     Kweisi Mfume,
     William Orton,
     Herb Klein,
     Nydia M. Velazquez,
     Jim Leach,
     Bill McCollum,
     Marge Roukema,
     Doug Bereuter,
     Tom Ridge,
     Toby Roth,
     Al McCandless,
     R.H. Baker,
     Jim Nussle,
     From the Committee on Banking, Finance and Urban Affairs, for 
     consideration of title V of the Senate amendment, and 
     modifications committed to conference:
     Henry Gonzalez,
     Steve Neal,
     John J. LaFalce,
     Charles Schumer,
     Barney Frank,
     Jim Leach,
     Doug Bereuter,
     Bill McCollum,
     As additional conferees from the Committee on Education and 
     Labor, for consideration of section 209 of the Senate 
     amendment, and modifications committed to conference:
     William D. Ford,
     Pat Williams,
     William L. Clay,
     Dale E. Kildee,
     George Miller,
     Bill Goodling,
     Marge Roukema,
     Harris W. Fawell,
     As additional conferees from the Committee on Energy and 
     Commerce, for consideration of sections 201-05, 207, 320 and 
     347 of the Senate amendment, and modifications committed to 
     conference:
     John D. Dingell,
     Edward Markey,
     Phil Sharp,
     Al Swift,
     Cardiss Collins,
     Rick Boucher,
     Thomas J. Manton,
     Richard H. Lehman,
     Lynn Schenk,
     Marjorie Margolies-Mezvinsky,
     Mike Synar,
     Ron Wyden
     Bill Richardson,
     John Bryant,
     Carlos J. Moorhead,
     Jack Fields,
     Tom Bliley,
     As additional conferees from the Committee on Energy and 
     Commerce for consideration of sections 503-05, 507 and 706 of 
     the Senate amendment, and modifications committed to 
     conference:
     John D. Dingell,
     Edward Markey,
     Cardiss Collins,
     E. Towns,
     Richard H. Lehman,
     Carlos J. Moorhead,
     As additional conferees from the Committee on Foreign 
     Affairs, for consideration of section 703 of the Senate 
     amendment, and modifications committed to conference:
     Lee H. Hamilton,
     Sam Gejdenson,
     As additional conferees from the Committee on the Judiciary, 
     for consideration of section 139 of the House bill, and 
     sections 325, 408 and 409 of the Senate amendment, and 
     modifications committed to conference:
     Charles E. Schumer,
     Don Edwards,
     John Conyers, Jr.
     Bill Hughes,
     As additional conferees from the Committee on Small Business, 
     for consideration of section 348(b) of the Senate amendment, 
     and modifications committed to conference:
     John J. LaFalce,
     Neal Smith,
     Jan Meyers,
     As additional conferees from the Committee on Ways and Means, 
     for consideration of sections 210 and 502-04 of the Senate 
     amendment, and modifications committed to conference:
     Dan Rostenkowski,
     Sam Gibbons,
     J.J. Pickle,
     C.B. Rangel,
     Pete Stark,
     Bill Archer,
     Phil Crane,
     Bill Thomas,
                                Managers on the Part of the House.

     Don Riegle,
     Paul Sarbanes,
     Christopher Dodd,
     From the Committee on Finance, for matters solely within the 
     Finance Committee's jurisdiction, including sections 209, 
     210, and 408 of the Senate amendment:
     Daniel Moynihan,
     Max Baucus,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the Senate to 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, submit the following joint statement to the House 
     and the Senate in explanation of the effect of the action 
     agreed upon by the managers and recommended in the 
     accompanying conference report:

         TITLE I--COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION

        Subtitle A--Community Development Financial Institutions


                           section by section

     Section 101. Short title
       The subtitle is called the Community Development Banking 
     and Financial Institutions Act of 1994.
     Section 102. Findings and purposes
       Section 102 articulates the findings of Congress regarding 
     the need to assist community development financial 
     institutions. The section also states the purposes of the 
     legislation.
     Section 103. Definitions
       The House and Senate bills contain many identical or 
     similar definitions. The Senate language was retained but 
     modifications were made to the terms ``community development 
     financial institution,'' ``Indian reservation'', ``investment 
     area'', and ``targeted population''. The House terms for 
     ``Indian tribe'' and ``state'' were retained. The new term 
     ``training program'' was added.
       Section 103(5) requires a community development financial 
     institution to have a primary mission of community 
     development, serve an ``investment area'' or ``targeted 
     population'', provide development services in conjunction 
     with loans or equity investments (directly or through a 
     subsidiary or affiliate), maintain community accountability, 
     and not be an agency or instrumentality of government. It is 
     the Conferees' intent that a depository institution holding 
     company may only qualify as a community development financial 
     institution if the holding company and its subsidiaries and 
     affiliates collectively satisfy the definition of community 
     development financial institution. Furthermore, no subsidiary 
     or affiliate of a depository institution holding company may 
     qualify as a community development financial institution 
     unless the holding company and its subsidiaries and 
     affiliates also collectively meet such requirements. The 
     Conferees also intend that no subsidiary of an insured 
     depository institution may qualify as a community development 
     financial institution unless the insured depository 
     institution and its subsidiaries collectively meet the 
     requirements of section 103(5).
       A community development financial institution is required 
     to serve an ``investment area'' or ``targeted population.'' 
     The Fund will be responsible for developing ``objective 
     criteria'' to be used to identify areas experiencing 
     ``economic distress'' as well as criteria for determining 
     ``unmet needs for loans and equity investments.'' In 
     assessing the extent of distress in an investment area, the 
     Fund shall take into account the unique characteristics of 
     rural, urban and Native American communities. It is the 
     Conferees' intent that the Fund develop separate criteria for 
     different types of communities which best capture the nature 
     of distress in those communities. For example, in many rural 
     communities, population out-migration is a good indicator of 
     economic distress. Areas receiving the Federal designation as 
     empowerment zones and enterprise communities will meet the 
     definition of investment area.
       The Conferees recognize that an overwhelming majority of 
     Indian reservations continue to be among the most disinvested 
     and poverty-stricken areas in the United States, and that, 
     many of these conditions are attributable to weak private 
     sector economies and lack of banking and financial services. 
     The Conferees assume that, in most cases, Indian reservations 
     will meet the criteria for designation as an ``investment 
     area'' by virtue of decades long neglect by the banking and 
     financial services industry.
       The Conferees find that certain groups or individuals lack 
     access to sources of debt and equity capital due to factors 
     that are unrelated to their credit worthiness. In determining 
     which groups or individuals qualify as a ``targeted 
     population'', the Conferees believe that the fund should 
     focus on low income persons and those who are otherwise 
     underserved by financial institutions (including those 
     historically denied access to financial services based on 
     their race, gender, ethnicity, or national origin), as stated 
     in the legislative language. The Conferees also intend that, 
     in accordance with Section 115, the Fund will require 
     assisted institutions to compile and maintain disaggregated 
     data to ensure that targeted populations are adequately 
     served and to demonstrate success in meeting their 
     performance goals.
     Section 104. Establishment of Fund
       Section 104 establishes the Community Development Financial 
     Institutions Fund to administer the programs authorized under 
     this Subtitle and Subtitle B of Title II. The Fund is a 
     wholly-owned government corporation managed by an 
     Administrator. The Administrator is appointed by the 
     President and confirmed by the Senate. A fifteen-member 
     advisory board is established to advise the Administrator on 
     the policies of the fund with respect to its activities under 
     this Subtitle. The board will operate in accordance with the 
     Federal Advisory Commission Act (excluding Section 14 of such 
     Act). The advisory board is composed of the Secretaries (or 
     their designees) of the Departments of Agriculture, Commerce, 
     Housing and Urban Development, Interior, and Treasury, the 
     Administrator (or his designee) of the Small Business 
     Administration, and nine private citizens (to be appointed by 
     the President) with community development finance or lending 
     experience.
       Section 104(k) provides for a transition period prior to 
     appointment of the Administrator. During the transition 
     period, the Secretary of Treasury is authorized to assist in 
     the establishment of the Fund's administrative functions and 
     to hire up to six individuals to serve as employs of the 
     Fund. During the transition period and for up to two years 
     following the date of enactment, Fund employs may be hired 
     without regard to civil service laws and regulations. This is 
     intended to permit the expedited hiring of employs for the 
     Fund, so that the Fund may be operational as soon as 
     possible.
     Section 105. Applications for assistance
       Section 105 describes the minimum elements that must be 
     part of an application for assistance. At a minimum, each 
     application submitted to the Fund must (1) establish that the 
     applicant is, or will be, a community development financial 
     institution; (2) include a comprehensive strategic plan; and 
     (3) include a detailed description of plans to secure 
     matching funds.
       The central component of the application is the 
     institution's comprehensive strategic plan. The plan is 
     intended to demonstrate an applicant's capacity to function 
     as a community development financial institution and be 
     financially viable (not be dependent on future assistance). 
     Furthermore, the plan should demonstrate an institution's 
     capacity to catalyze redevelopment. Such a demonstration 
     should include an assessment of the nature and extent of need 
     within the communities that will be served and an indication 
     of how the applicant will meet those needs.
       Section 105 directs the Fund to operate a pre-application 
     outreach program. The outreach activities may be used to 
     provide information and technical assistance to potential 
     applicants. However, the Fund may not assist in the 
     preparation of any application.
     Section 106. Community partnerships
       Section 106 permits community development financial 
     institutions to form ``community partnerships'' with other 
     organizations to carry out activities authorized under this 
     Subtitle. A ``community partner'' is an entity that provides 
     loans, equity investments, or development services and may 
     include (among others) depository institution holding 
     companies, insured depository institutions, insured credit 
     unions, non-profit organizations, state or local government 
     agencies, and investment companies authorized pursuant to 
     Small Business Investment Act of 1958.
       The Conferees' intent in creating community partnerships is 
     to leverage Federal resources and to encourage collaboration 
     between community development financial institutions and 
     other organizations. The Conferees believe it is critical for 
     the Fund to closely scrutinize the relationship between 
     community partners and community development financial 
     institutions. The Fund should ensure that the community 
     development financial institution is an active participant, 
     that it has a strong track record of promoting lending or 
     equity investments for community development purposes (if it 
     is an existing institution), and that the community partner 
     will enhance the service to investment areas or targeted 
     populations. Such scrutiny is necessary to ensure that 
     community development financial institutions that participate 
     in partnerships are (or will be) independent, self-
     sufficient, and not dependent on the resources of the 
     community partner for continued viability.
       Community partnerships are selected based on the extend (1) 
     that the community development financial institution co-
     applicant compares favorably with the criteria set forth 
     under Section 107; (2) that the community partner co-
     applicant participates in the partnership; (3) to which the 
     partnership will enhance the likelihood of success of the 
     community development financial institution in meeting its 
     performance goals; and (4) to which service to the investment 
     area or targeted population will be better performed or 
     enhanced by a partnership as opposed to the individual 
     community development financial institution co-applicant.
       The bill provides that a community partnership consist of 
     an agreement between a community development financial 
     institution and a community partner to provide development 
     services, loans or equity investments to an investment area 
     or targeted population. An application will specify the 
     functions that the community development financial 
     institution and the community partner will each perform to 
     achieve the partnerhip's goals. All federal assistance must 
     be distributed to the community development financial 
     institution and cannot be used for activities carried out 
     directly by the community partner. The Fund is required to 
     negotiate performance goals as part of its assistance 
     agreement which shall specify the duties required of each co-
     applicant. All other requirements and limitations imposed on 
     community development financial institutions shall be 
     applicable, in a manner that the Fund deems to be 
     appropriate, to community partnerships.
     Section 107. Selection of institutions
       The Conference Agreement describes criteria to be used by 
     the Fund to evaluate and select institutions for assistance. 
     The criteria enumerated accord favorable weight to applicants 
     with the specified attributes and are intended to provide 
     guidance to the Fund in considering competing applications. 
     The Fund is given discretion to consider additional criteria 
     and evaluate the relative importance of each criterion. In 
     granting assistance, the Fund must seek to select a 
     geographically diverse group of applicants serving 
     metropolitan, and rural areas from different regions of the 
     United States.
     Section 108. Assistance provided by the Fund
       Section 108(a) authorizes the Fund to provide financial 
     assistance through a variety of mechanisms including equity 
     investments, grants, loans, credit union shares, and 
     deposits. Although the Fund may provide assistance in the 
     form of equity investments, it is prohibited from holding 
     more than a 50-percent nonvoting interest in any community 
     development financial institution or controlling the 
     operation of any assisted institution. Section 108(b) 
     specifies the types of activities for which assisted 
     institutions may use Federal financial assistance. The Fund 
     is also authorized to provide technical assistance.
       The Conference Agreement prohibits any provision in the 
     subtitle from limiting the authority of the bank regulatory 
     agencies to supervise or regulate an insured institution or 
     holding company. This provision is intended to prevent any 
     interpretations of provisions in this Subtitle that would 
     alter or otherwise interfere with regulation of assisted 
     insured depository institutions and holding companies.
       Assisted institutions are prohibited from using Federal 
     assistance made available under this Subtitle for political 
     activities.
       The Conference Agreement limits to $5 million (in any 
     three-year period) the amount of assistance any community 
     development financial institution and its subsidiaries and 
     affiliates can receive. However, the Conference Agreement 
     creates an exception to the assistance limits for an 
     institution that proposes to establish a subsidiary or 
     affiliate for the purpose of serving an investment area or 
     targeted population in another state. An institution or its 
     affiliates or subsidiaries may be eligible to receive up to 
     $8.75 million (in any three year period) provided that not 
     less than $3.75 million of that assistance is used to 
     establish such a subsidiary or affiliate. The bill permits 
     institutions to receive up to such amounts only if they 
     propose to establish a subsidiary or affiliate in a new state 
     and such subsidiary or affiliate will not be located in a 
     metropolitan area currently served by the institution.
       The House bill, as introduced, would have provided greater 
     amounts of assistance for insured community development 
     financial institutions. The Conference Agreement does not 
     contain any such distinction. It is the intent of the 
     Conferees that insured and non-insured community development 
     financial institutions will be treated the same with respect 
     to the levels of assistance they are eligible to receive.
       The funding limitations discussed above are essential to 
     furthering the goal of this Subtitle to create a national 
     network of community development financial institutions. The 
     Conferees intend that the Fund will assist a variety of 
     different types of institutions that fall within the 
     definition of community development financial institution.
       Assisted institutions are required to provide matching 
     funds from sources other than the Federal government for all 
     assistance received. The Fund is given the discretion to 
     waive the matching requirements for not more than 25% of 
     funds dispersed by the Fund in any fiscal year for applicants 
     with ``severe constraints'' on matching sources.
       The Conferees recognize that retained earnings enable 
     community development financial institutions, like 
     conventional financial institutions, to increase their 
     ability to leverage new funds for the communities they serve 
     by building equity or net worth. For the purpose of meeting 
     the matching requirements of Section 108(e), it is the intent 
     of the Conferees that retained earnings of existing community 
     development financial institutions shall qualify as matching 
     resources. However, it is not the intent of the Conferees to 
     permit applicants to pledge future earnings to meet their 
     matching requirements. Furthermore, it is not the intent of 
     Congress to limit the amount of such retained earnings that 
     may used toward meeting the matching requirements. Start-up 
     or net worth financing shall not be treated as retained 
     earnings under this Subtitle.
       The Conferees believe that it is critical that all assisted 
     community development financial institutions be financially 
     and managerially sound. The Fund will be responsible for 
     developing standards of financial accountability for assisted 
     institutions that are not insured depository institutions or 
     depository institution holding companies. Prior to awarding 
     assistance or imposing sanctions on insured depository 
     institutions and depository institution holding companies, 
     the Fund will consult with the appropriate bank regulatory 
     agencies to ensure that any actions by the Fund will not 
     threaten the safety and soundness of such institutions.
       An institution selected for assistance will enter into an 
     agreement with the Fund specifying the terms and conditions 
     of assistance, including performance goals. Performance goals 
     will be negotiated between the Fund and an assisted 
     institution and will be based on the assessment of community 
     needs and plans for addressing the needs described in the 
     institution's strategic plan. The Fund should measure the 
     success of a community development financial institution in 
     achieving specific lending, investment and development 
     objectives against its performance goals.
       To facilitate the enforcement of conditions placed on 
     assistance, the Fund should structure the initial assistance 
     agreement so that the performance goals and other obligations 
     of the applicant will continue in effect even if the Fund 
     transfers its ownership or repayments rights to a third 
     party.
       The Fund may impose sanctions on a community development 
     financial institution for noncompliance with its assistance 
     agreement for fraud, mismanagement, and noncompliance with 
     this Subtitle.
     Section 109. Training
       Section 109 authorizes the Fund to 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 finance activities. The Fund may impose fees for 
     persons participating in the activities of the training 
     program. Such fees will be limited to the cost of providing 
     the service.
     Section 110. Encouragement of private entities
       Sectin 110 of the Conference Agreement permits the Fund to 
     assist in the establishment of private entities that 
     complement the activities of the Fund.
     Section 111. Collection and compilation of information
       Section 111 directs the Fund to collect, compile and make 
     information available that is pertinent to create, develop, 
     expand, and preserve community development financial 
     institutions.
     Section 112. Investment of receipts and proceeds
       Section 112 provides that any dividends from equity 
     investments and proceeds from disposition of loans, 
     investments, deposits, or credit union shares that are 
     received as a result of assistance provided pursuant to 
     Sections 108 and 113, and fees received pursuant to Section 
     109(f) shall be used to carry out the purposes of this 
     Subtitle.
     Section 113. Capitalization to enhance liquidity
       Section 113 permits the Fund to provide assistance for the 
     purpose of capitalizing organizations that purchase loans or 
     otherwise enhance the liquidity of community development 
     financial institutions. The Conference Agreement prescribes 
     requirements, limitations, and criteria for assistance.
     Section 114. Bank Enterprise Act
       The Section 114 program, which is based on the Bank 
     Enterprise Act, provides voluntary bank and thrift applicants 
     with incentives for private investment in targeted activities 
     within qualified distressed communities.
       Through the section 114 program, the Conferees hope to 
     immediately affect economically distressed communities 
     through infusion of private dollars into loans, services, 
     technical assistance and equity investments in community 
     development financial institutions. The Section 114 program 
     is geared to support the objectives of the community 
     development financial institution program both by increasing 
     the incentive rebates threefold for community development 
     financial institution related activities in qualified 
     activities and by creating a priority for equity investments 
     in community development financial institutions in the 
     application selection criteria. Bank and thrift applicants 
     will earn triple credit under the Section 114 program for 
     equity investments in community development financial 
     institutions and insured community development financial 
     institutions will earn triple credit for their activities in 
     qualified distressed communities. The Administrator of the 
     Fund is given broad discretion to administer both programs. 
     However, the Fund monies must be disbursed in the following 
     proportion--2/3 for the CDFI program and 1/3 for the Section 
     114 program.
       Section 114 is a ``results-driven'' program. It rewards 
     participating financial institutions for results--new lending 
     and investment of private dollars in economically underserved 
     urban and rural communities. The federal assistance is not an 
     entitlement. Nothing in Section 114 is intended to affect the 
     amount of deposit insurance assessment paid by an insured 
     depository institution. Applicants will be selected through 
     competition for limited federal dollars. The amount of 
     assistance is computed based on the weighted periodic 
     increases in loans, services, technical assistance, and 
     investment by the applicant bank or thrift.
       The Conferees believe that the qualified activities of 
     subsidiaries of insured depository institutions should be 
     eligible for assistance under Section 114. The Conferees do 
     not intend, however, that an insured depository can apply for 
     assistance for the purpose of capitalizing its subsidiaries 
     under Section 114. But, the Conferees recognize that the 
     weight of the capital and experience of the parent combined 
     with the innovative underwriting and investments of the 
     subsidiary are a potent combination for urban and rural 
     community revitalization. This, the Conferees believe it is 
     appropriate to permit activities carried out by such a 
     subsidiary to be used in determining the amount of assistance 
     an applicant is eligible to receive. The Conferees note that 
     such non-insured subsidiaries may not apply directly for 
     assistance under Section 114.
       The Section 114 program will strengthen federal support to 
     community development financial institution by attracting 
     private investment by traditional financial service 
     providers. The Conferees hope that Section 114 supported 
     investments in community development financial institutions 
     will be a catalyst for establishment of permanent private 
     banking relationships to ensure that CDFIs thrive for the 
     benefit of the people in the neighborhoods they serve.
       The Conferees believe that the community development 
     financial institution and Section 114 programs comport with 
     the President's goal to promote revitalization and build 
     long-term private market capacity for the delivery of 
     financial services and technical assistance--which is crucial 
     to sustaining revitalization--and empower residents of 
     underserved communities to realize homeownership and business 
     development opportunities.
       Support for community development financial institutions:
       Section 121(a)(5) states that the Administrator should 
     allocate appropriated funds, to the maximum extent 
     practicable, to support equity investment in community 
     development financial institutions. This Section acknowledges 
     the addition of equity investment in community development 
     financial institutions as a new qualifying activity for 
     purposes of receiving assistance under the Section 114 
     program.
       Awards:
       The application process, the targeting of bank and thrift 
     investment into certain qualifying activities in qualified 
     distressed communities and the selection criteria for ranking 
     applications provides sufficient parameters for the 
     Administrator to make awards on a competitive basis. Section 
     114 prohibits an institution from receiving assistance under 
     both the community development financial institution program 
     and Section 114. Award caps are included to ensure that 
     Section 114 assistance is distributed to maximize the benefit 
     to a greater number of underserved communities. However, the 
     Administrator is given the sole discretion for establishing 
     additional restrictions on the allocation of assistance and 
     for setting the amount of awards within the statutory 
     formula.
       Performance report:
       Section 117(d) requires the Comptroller General to report 
     to the President and the Congress, 30 months after the 
     appointment of the Administrator, on the structure, 
     governance and the performance of the Fund, which includes 
     review of the implementation of the Section 114 program for 
     certain investments in qualified distressed communities.
     Section 115. Recordkeeping
       The Conference Agreement prescribes recordkeeping 
     requirements for community development financial institutions 
     and others receiving assistance pursuant to this Subtitle. 
     Assisted institutions are required to compile pertinent data 
     on individuals that utilize their services. The Fund will 
     annually review the performance of each assisted community 
     development financial institution in achieving its 
     performance goals. Community development financial 
     institutions are required to submit an annual report on their 
     activities to the Fund, including an audited financial 
     statement.
     Section 116. Special provisions with respect to institutions 
         that are supervised by Federal banking agencies
       Section 116 addresses notice by the Fund to the appropriate 
     Federal banking agency (``AFBA'') regarding provision of 
     assistance, information requests, and the imposition of 
     sanctions on insured community development financial 
     institutions and other institutions that are examined by or 
     subject to the reporting requirements of an AFBA. This 
     section is intended to ease the regulatory burden on insured 
     community development financial institutions and other 
     institutions that are examined by or subject to the reporting 
     requirements of an AFBA by preventing overlapping and 
     duplicative requests for information, reports, and records.
       Subsection (a) requires the Fund to consult the AFBA before 
     providing assistance to an insured community development 
     financial institution. This consultation requirement also 
     covers an institution that is examined by or subject to the 
     reporting requirements of an AFBA and a community development 
     financial institution that has as a community partner an 
     institution that is examined by or subject to the reporting 
     requirements of an AFBA.
       Subsection (b) provides that, other than the information 
     that the Fund may require with respect to an institution's 
     implementation of its strategic plan or compliance with its 
     assistance agreement, the Fund and the AFBA must consult to 
     determine if the additional information needed by the Fund is 
     already available from or may be obtained by the AFBA in the 
     form, format, or detail required by the Fund. If the AFBA 
     does not provide the information within 15 days, the Fund may 
     access the information directly with notice to the AFBA.
       Subsection (c) clarifies that this Subtitle does not permit 
     the Fund to require an insured community development 
     financial institution or other institution that is examined 
     by or subject to the reporting requirement of the AFBA to 
     disclose the AFBA's report or examination or records 
     contained in or related to such report. Reports of 
     examination generally are deemed to be the property of the 
     AFBA that conducted the examination. However, as provided by 
     subsection (d), the AFBA is required to provide the Fund with 
     the appropriate information from examination reports relating 
     to any material concerns about an insured community 
     development financial institution or other institution 
     examined by or subject to the reporting requirements of the 
     AFBA.
       Subsection (e) prohibits the unauthorized disclosure of any 
     confidential information provided by the Fund to the AFBA or 
     by the AFBA to the Fund. Section (f) provides that neither 
     the Fund, the AFBA, nor any other party providing information 
     under this section will be deemed to have waived any 
     privilege that is applicable to the information that is 
     provided to or used by any party. Subsection (g) clarifies 
     that neither the Fund nor the AFBA is authorized to withhold 
     any information from Congress or another Federal department 
     or agency upon an appropriate request.
       Under the Senate-passed version of H.R. 3474, the Fund is 
     required to notify the AFBA before imposing any sanctions on 
     an insured community development financial institution. The 
     Fund may not impose the sanctions if the AFBA disapproves 
     within 15 days. The House passed version only required that 
     the Fund consult with the AFBA before imposing any sanction 
     on an insured community development financial institution.
       Subsection (h) of the Conference Agreement takes a 
     generally similar approach to the Senate version and extends 
     the time period within which the AFBA must disapprove a 
     sanction to 30 days. This extended period is intended to give 
     the AFBA and the Fund adequate time to consider appropriate 
     sanctions. If the AFBA objects to a proposed sanction with 
     the 30-day time period, it is required, among other things, 
     to propose comparable alternative action. Both parties are 
     expected to cooperate and take expeditious action to respond 
     to each other's requests in a manner that ensures the safety 
     and soundness of financial institutions.
     Section 117. Studies and reports; examination and audit
       Section 117 requires the Fund to annually evaluate and 
     report on the activities carried out by the Fund and 
     community development financial institutions and institutions 
     assisted pursuant to Sections 113 and 114. The performance 
     report will, among other things, analyze and compare the 
     overall leverage of Federal assistance provided pursuant to 
     Sections 108, 113 and 114 with private resources, and the 
     impact of the expenditure of such resources on ``investment 
     areas'', ``targeted populations'', and ``qualified distressed 
     communities''. The performance report should also describe 
     the Administrator's efforts to allocate, to the maximum 
     extent practicable, the funds authorized under section 121(a) 
     to support the activities of community development financial 
     institutions.
       The report will be submitted to the President and Congress 
     120 days after the end of each fiscal year. The Fund may 
     conduct other studies, as necessary, to facilitate investment 
     in distressed communities. The Fund is directed to conduct a 
     study on the impediments to lending and investment on Indian 
     reservations and other land held in trust by the United 
     States. The Comptroller General is directed to conduct a 
     study evaluating the structure, governance and performance of 
     the Fund.
     Section 118. Inspector General
       Section 118 creates an Inspector General of the Fund and 
     authorizes appropriation of such sums as necessary for the 
     operation of the Office of Inspector General.
     Section 119. Enforcement
       Section 119 directs the Fund to issue regulations within 
     180 days after appointment of the Administrator. Such 
     regulations should prevent conflicts of interest on the part 
     of directors, officers, and employees of community 
     development financial institutions that are not insured and 
     should establish standards with respect to loans by such 
     institution to their directors, officers, or employees. 
     Insured community development financial institutions must 
     adhere to conflict of interest and insider lending laws and 
     regulations that apply to insured depository institutions. 
     Section 119 states that the provisions of this Subtitle, and 
     regulations promulgated and agreements entered into under 
     this Subtitle will be enforced by the Fund in accordance with 
     Section 8 of the Federal Deposit Insurance Act (insured 
     community development financial institutions only) and that 
     Section 657 of title 18 of the United States Code will apply 
     to institutions receiving assistance pursuant to this 
     Subtitle.
     Section 120. Community Development Revolving Loan Fund for 
         credit unions
       Section 120 permits the Board of the National Credit Union 
     Administration to invest any idle funds of the Community 
     Development Credit Union Revolving Loan Fund in United States 
     Treasury securities and permits earned interest to become 
     part of the Fund. Section 120 permits the Board to require 
     any loans made by the Fund to be matched by increased shares 
     in the borrower credit union. Interest earned by the Fund may 
     be allocated by the Board for technical assistance to 
     community development credit unions, subject to 
     appropriations acts.
     Section 121. Authorizations
       Section 121 authorizes $382 million over four years or such 
     greater sums as may be provided by appropriations acts. Of 
     amounts authorized, $5,550,000 may be used for administrative 
     expenses. The Conference Agreement provides that costs 
     associated with the training and technical assistance are not 
     to be considered administrative expenses. After 
     administrative expenses are deducted, one-third of the funds 
     appropriated shall be used to carry out section 114. The 
     Community Development Credit Union Loan Fund is authorized at 
     $10 million over four years.
       Section 121(a) requires the Administrator to allocate, to 
     the maximum extent practicable, assistance appropriated 
     pursuant to this Section to benefit community development 
     financial institutions. Accordingly, in implementing this 
     Act, the Administrator should favor institutions that invest 
     in, or are, community development financial institutions. The 
     Conferees believe this requirement imposes an affirmative 
     responsibility on the Administrator to promote and provide 
     information on the availability of assistance pursuant to 
     Sections 108, 109, 113, and 114 to capitalize, enhance the 
     capacity and liquidity of, and promote investment in, 
     community development financial institutions.

                                TITLE I

              Subtitle B--Home Ownership Equity Protection

       Summary
       Subtitle B of Title I, entitled ``The Homeownership and 
     Equity Protection Act of 1994,'' addresses the problem of 
     ``Reserve Redlining.'' Redlining is the practice of denying 
     credit within certain geographic boundaries, often based on 
     race or ethnicity. The term ``reverse-redlining'' describes 
     the targeting of residents of the same communities for credit 
     on unfair terms. Considerable testimony before the Senate and 
     House Banking Committees has indicated that communities 
     lacking access to traditional lending institutions are being 
     victimized in this fashion by second mortgage lenders, home 
     improvement contractors, finance companies, and banks who 
     peddle high-rate, high-fee home equity loans to cash-poor 
     homeowners.
       Subtitle B is needed to address reverse redlining and to 
     protect borrowers who might enter into these transactions. 
     The legislation does not create a usury limit or prohibit 
     loans with high rates or high fees. At the same time, the 
     Conferees believe that these loan structures are potentially 
     dangerous when misused and warrant a heightened degree of 
     consumer protection in order to ensure that borrowers are not 
     victimized by abusive lending practices.
       The bill amends the Truth in Lending Act (TILA) to define a 
     class of non-purchase or non-construction loans with high 
     interest rates or up-front fees. To ensure that consumers 
     understand the terms of such loans and are protected from 
     high pressure sales tactics, the legislation requires 
     creditors making such loans to provide a special, streamlined 
     disclosure three days before consummation of the transaction, 
     in addition to the other disclosures required by the TILA. 
     The bill also restricts the use of certain loan terms such as 
     negative amortization and balloon payments that have proven 
     particularly problematic. Finally, the bill provides 
     increased civil liability for failure to comply with the 
     requirements for such loans and enables a borrower to assert 
     all claims and defenses against an assignee of the mortgage 
     that could be asserted against the originator.


                           section-by-section

     Section 151. Short title
       This subtitle is titled ``The Homeownership and Equity 
     Protection Act of 1994.''
     Section 152. Consumer protections for certain mortgages
       a. Definition
       Subsection (a) creates a special category of loans to be 
     covered by this legislation (Sec. 103(aa) loans). This 
     category is made up of closed-end loans secured by a 
     consumer's principal dwelling, but not obtained for purchase 
     or construction of the dwelling, in which:
       (1) the annual percentage rate is more than 10 percentage 
     points greater than the yield on a Treasury security of 
     comparable maturity; or
       (2) points and fees exceed the greater of 8% of the loan 
     amount or $400. This amount includes compensation paid to 
     brokers.
       The definition specifically excludes open end credit 
     transactions and reverse mortgage transactions.
       The points and fees trigger includes certain fees listed in 
     Section 106(e) of the TILA such as fees paid to a third party 
     for title examination, document preparation, credit reports, 
     notary services, and appraisal, unless the charges meet three 
     criteria. First, the charge must be reasonable. The Conferees 
     intend that this provision shall be interpreted consistently 
     with interpretations of the existing reasonableness standard 
     necessary to exclude such charges from the finance charge 
     under Regulation Z (Sec. 226.4(c)(7)). Second, the creditor 
     must not receive direct or indirect compensation for such 
     charges. Third, the fee must be paid to a third party 
     unaffiliated with the creditor. As such information is 
     readily available to the creditor, it is the creditor's 
     burden to establish that any such charge meets these three 
     criteria for exclusion. The Federal Reserve Board has 
     authority to include additional charges in calculating the 
     triggers, such as credit insurance premiums, if evidence 
     establishes that such charges are being used to circumvent or 
     evade the provisions of this legislation.
       The Federal Reserve Board is also provided authority to 
     adjust the 10% trigger between 8% and 12%. The Conferees are 
     concerned that the 10% level may not be appropriate, 
     particularly given changes in the credit markets. The 
     legislation states that the Board may adjust the 10% level no 
     sooner than two years after final regulations are promulgated 
     pursuant to Section 1555 and no more frequently than every 
     two years thereafter. To move the trigger, the Board must 
     make an express determination that the increase or decrease 
     is consistent with the consumer protections against abusive 
     lending contained in this legislation and that the change is 
     warranted by the need for credit. The conferees intend that 
     before making such a change, the Board will consult with 
     representatives of consumers, particularly low income 
     consumers, and lenders.
       The Conferees intend that nothing in this subsection be 
     construed to limit the finance charges or rates that may be 
     imposed on Sec. 103(aa) loans. The triggers in the 
     legislation are not intended as caps, but rather to ensure 
     that enhanced protections are provided to consumers who are 
     most vulnerable to abuse without impeding the flow of credit.
       At the same time, the fact that a loan does not meet the 
     trigger provisions of the legislation does not mean that it 
     is necessarily free of abusive terms or provisions. Loans 
     that do not meet the triggers will continue to be regulated 
     by other provisions of the TILA, as well as by other 
     applicable laws.
       b. Material disclosures
       Subsection (b) defines the specific disclosures required 
     for Sec. 103(aa) loans as ``material disclosures'', thereby 
     providing the consumer with a right of rescission (as with 
     other TILA disclosures) for up to three years in the event 
     that the required disclosures are not provided.
       c. Definition of ``creditor''
       Subsection (c) provides that a person who originates two or 
     more Sec. 103(aa) mortgages in a given year or originates 
     such a mortgage through a broker is a ``creditor'' and must 
     comply with the requirements of the TILA and this 
     legislation.
       d. Disclosure required and terms prohibited
       Subsection (d) amends the TILA by creating a new section, 
     Section 129, which delineates certain requirements for 
     Sec. 103(aa) mortgages.

                              Disclosures

       Prior to originating such a mortgage, a creditor must 
     conspicuously disclose that the consumer could lose his/her 
     home for failure to meet the loan obligations and is not 
     obligated to complete the agreement. The creditor must 
     disclose the annual percentage rate and the regular monthly 
     payment or, for a variable rate loan, the annual percentage 
     rate, monthly payment, and a statement that the interest rate 
     and monthly payment can increase. Variable rate transactions 
     must also indicate the maximum possible monthly payment 
     possible under the loan. The Competitive Equality Banking Act 
     of 1987 requires all variable rate transactions to include 
     interest rate caps (12 U.S.C. Sec. 3806). The Conferees 
     expect the maximum payment to be calculated based on the cap 
     in the transaction by assuming the maximum possible increases 
     in rates in the shortest possible time periods.
       The creditor must provide the required disclosures in 
     writing at least three days before consummation of the 
     transaction. Section 152 prohibits subsequent changes in the 
     loan terms that affect the APR or monthly payment unless 
     revised disclosures are provided in writing three days prior 
     to consummation. The Federal Reserve Board may modify or 
     waive the disclosures for bona fide emergencies.
       The legislation provides that revised disclosures may be 
     provided by telephone if the changes in loan terms are 
     initiated by the consumer and the parties certify in writing 
     at consummation that the telephone disclosures were provided 
     three days prior to closing.

                            Prohibited terms

       This subsection further mandates that Sec. 103(aa) loans 
     may not include the following terms: default interest rates 
     higher than the rate prior to default; balloon payments if 
     the loan term is shorter than 5 years; negative amortization; 
     prepaid payments of more than 2 periodic payments 
     consolidated and paid in advance from the loan proceeds; or 
     payment to a home improvement contractor other than in a form 
     payable to the consumer or jointly to the consumer and 
     contractor, or, at the election of the consumer, to an escrow 
     agent. The subsection also prohibits creditors from engaging 
     in a pattern or practice of extending mortgage credit to 
     consumers through Sec. 103(aa) loans unless they have given 
     consideration to a consumer's current or expected income, 
     current obligations, repayment capacity, or employment. These 
     underwriting factors are intended to be illustrative, and not 
     prescriptive or restrictive. Assessing the expected income of 
     an employed borrower, for example, would not be necessary. 
     Such an assessment, however, would be necessary for an 
     unemployed borrower.
       Finally, Sec. 103(aa) loans are prohibited from containing 
     prepayment penalties. Testimony before the Senate and House 
     Banking Committees indicated that consumers were often 
     trapped in abusive mortgages by outrageous terms that made it 
     prohibitively expensive to prepay their loans. The 
     legislation specifies that the term ``prepayment penalty'' 
     includes any refund of unearned scheduled interest that is 
     computed by a method that is less favorable than the 
     actuarial method, as defined in section 933(d) of the Housing 
     and Community Development Act of 1992. (The Conferees 
     recognize that some states have defined ``actuarial method'' 
     and intend that a creditor use a state definition where 
     applicable for purposes of computing a refund of unearned 
     scheduled interest provided that the refund would be equal 
     to, or greater than, one computed pursuant to section 933(d) 
     of the Housing and Community Development Act of 1992.) This 
     reference is not intended to be limiting, however, and common 
     forms of prepayment penalties such as percentages of 
     outstanding balance or number of months of interest are also 
     prohibited under the legislation.
       The subsection provides an exception from the prepayment 
     restrictions provided (1) that the consumer's total monthly 
     debt service under all obligations including the mortgage in 
     question does not exceed 50% of the consumer's monthly gross 
     income as verified through financial statements, a credit 
     report, payment records, or verification from an employer; 
     (2) that the penalty applies only to a prepayment made from 
     amounts obtained by a means other than a refinancing with the 
     same creditor; (3) that the penalty does not apply after 5 
     years following consummation of the loan; and (4) the penalty 
     is not otherwise prohibited under state law.
       Where the exception to the prepayment prohibition applies, 
     the bill does not limit the amount of a prepayment penalty. 
     The Conferees recognize, however, that some prepayment 
     penalties that are permissible under subtitle B may 
     nevertheless be prohibited by some other applicable law. The 
     bill is not intended to override these more restrictive laws.
       Inclusion of any of these prohibited terms in deemed a 
     failure to deliver ``material disclosures'' as required by 
     the TILA, thereby providing the borrower with rescission 
     rights under Sec. 125 of that Act.
       The subsection authorizes the Federal Reserve Board to 
     exempt specific mortgage products or categories of mortgage 
     products from these prohibitions if it makes an express 
     finding that the exemption is in the interest of the 
     borrowing public and will apply only to products that 
     maintain and strengthen home ownership and equity protection. 
     The Conferees are concerned, for instance, that some loans 
     under government programs and certain short-term ``bridge'' 
     construction loans may be inappropriately captured by this 
     legislation. In general, the Conferees intend that the Board 
     will not grant board exemptions, but rather weigh carefully 
     the potential for each such product to be used in the abusive 
     fashion which this legislation seeks to address and to assure 
     that the product is used to facilitate homeownership and 
     strengthen the homeowner's equity interest.
       At the same time, the Board is required to prohibit acts 
     and practices that it finds to be unfair, deceptive, or 
     designed to evade the section and with regard to refinancings 
     that it finds to be associated with abusive lending practices 
     or otherwise not in the interest of the borrower. The 
     Conferees recognize that new products and practices may be 
     developed to facilitate reverse redlining or to evade the 
     restrictions of this legislation. Since consumers are 
     unlikely to complain directly to the Board, the Board should 
     consult with its Consumer Advisory Council, consumer 
     representatives, lenders, state attorneys general, and the 
     Federal Trade Commission, which has jurisdiction over many of 
     the entities making the mortgages covered by this 
     legislation. In making any determination, the Board should 
     look to the standards employed for interpreting state unfair 
     and deceptive trade practices acts and the Federal Unfair and 
     Deceptive Practices Act (15 U.S.C. Sec. 45(a)(1)).
       This subsection also authorizes the Board to prohibit 
     abusive acts or practices in connection with refinancings. 
     Both the Senate and House Banking Committees heard testimony 
     concerning the use of refinancing as a tool to take advantage 
     of unsophisticated borrowers. Loans were ``flipped'' 
     repeatedly, spiraling up the loan balance and generating fee 
     income through the prepayment penalties on the original loan 
     and fees on the new loan. Such practices may be appropriate 
     matters for regulation under this subsection.
       e. Conforming amendments
       Subsection (e) clarifies that the provisions of this 
     subtitle preempt state law only where federal and state law 
     are inconsistent and only to the extent of an inconsistency. 
     The Conferees intend to allow states to enact more protective 
     provisions than those in this legislation. Many states, for 
     example, ban all prepayment penalties on mortgage loans. Such 
     a ban would remain in effect following enactment of this 
     legislation.
       Subsection (e) also specifies that states which are exempt 
     from portions of the TILA disclosure requirements are not 
     exempt from the requirements of this legislation.
     Section 153. Civil liability
       a. Damages
       Subsection (a) provides that, in addition to other 
     penalties available under the Act, a material failure to 
     comply with requirements imposed by the subtitle carries 
     potential civil liability in an amount equal to all finance 
     charges and fees paid by the consumer. The Conferees intend 
     the word ``material'' to reference a common legal standard, 
     not to reference ``material disclosures'' under TILA. Case 
     law under Sec. 130(c) may be used to evaluate materiality and 
     the reasonableness of the procedures for preventing errors 
     under this section. The Conferees intend that 
     miscalculations, computer malfunctions, and printing mistakes 
     shall not be deemed material if the creditor maintained 
     reasonable procedures to prevent such mistakes.
       b. State attorney general enforcement
       Subsection (b) allows a State attorney general to bring 
     actions in federal district court to enforce the provisions 
     of this subtitle for up to three years following violations. 
     The state must notify the appropriate Federal agency 
     responsible for enforcement and the agency will have the 
     right to intervene.
       c. Assignee liability
       Subsection (c) eliminates holder-in-due-course protections 
     for purchasers and assignees of Sec. 103(aa) mortgages. 
     Consumers maintain all claims and defenses in connection with 
     such mortgages against assignees that can be asserted against 
     creditors. With this provision, the Conferees intend to 
     ensure that the market polices itself in order to eliminate 
     abuses. Similar liability has been previously extended by the 
     FTC to consumer installment paper, including automobile 
     loans, without a significant impact on credit availability.
       To ensure that the assignee liability provision of this 
     bill does not reach beyond Sec. 103(aa) loans, the 
     legislation insulates an assignee from liability if the 
     assignee can demonstrate, by a preponderance of the evidence, 
     that a reasonable person, exercising ordinary due diligence, 
     could not determine from the loan documentation that the loan 
     was covered by this legislation. Such a determination would 
     require review of the documentation required by the TILA, 
     including, but not limited to, the disclosures required by 
     this legislation, as well as a disclosure of disbursements or 
     itemization of amounts financed. While this exception limits 
     the liability of an assignee under this subsection, it is not 
     intended to limit liability under other portions of the TILA 
     (including other subsections of Section 131) or other causes 
     of action.
       This section also limits the damages available under the 
     assignee liability language in the legislation. For TILA 
     violations, damages are limited to relief available under 
     Section 130. For all other causes of action, damages are 
     limited to the sum of all remaining indebtedness and the 
     total amount previously paid by the consumer in connection 
     with the transaction. The amount of damages awarded in the 
     latter instance must be reduced by any damages awarded under 
     the TILA. The Conferees intend to limit an assignee's 
     potential liability to all amounts previously paid and 
     currently owed by a consumer.
       To ensure that assignees are aware of their potential 
     liability, the legislation requires any party assigning a 
     Sec. 103(aa) mortgage to include a prominent notice of 
     potential liability.
     Section 154. Reverse mortgage disclosure
       a. Definition
       The Conferees are aware that many reverse mortgage 
     transactions could be covered by the definition created in 
     Section 152. Such transactions include significant up-front 
     costs, yet provide for only limited initial payments to the 
     consumer. However, the unique nature of reverse mortgages 
     makes them ill-suited for the triggers and associated 
     consumer protections established in this legislation. For 
     this reason, the legislation creates a statutory definition 
     of ``reverse mortgage transactions'' and exempts such 
     transactions from the legislation (see Section 152). Reverse 
     mortgage transactions are defined as non-recourse 
     transactions in which a security interest is taken against 
     the consumer's principal dwelling for the purpose of securing 
     one or more advances to the consumer, but requiring repayment 
     (other than in default) only after one of the following 
     occurrences: transfer of the dwelling; the consumer ceases to 
     occupy the dwelling as a principal dwelling; death of the 
     consumer.
       b. Disclosure
       While the Conferees believe that the protections provided 
     through Sections 152 and 153 are not appropriate for reverse 
     mortgages, they are concerned that consumers are not 
     currently receiving adequate information for such 
     transactions. Reverse mortgages are complex transactions that 
     have high up-front costs and are primarily designed for 
     elderly consumers who have substantial equity in their homes.
       To ensure that consumers are adequately informed about the 
     costs and risks associated with reverse mortgages, this 
     legislation creates a special disclosure for such 
     transactions. The duration of a reverse mortgage is 
     inherently uncertain at the time it is originated because it 
     is designed to terminate upon the death of the consumer, 
     transfer of the dwelling, or the consumer's ceasing to use 
     the dwelling as a primary residence. Likewise, many such 
     mortgages contain shared appreciation or shared equity 
     features which further lend uncertainty to the transaction. 
     The costs to a consumer and the payments that the consumer 
     will receive are estimable only based on assumptions 
     regarding factors such as life expectancy and appreciation in 
     the value of the dwelling.
       The disclosure required by this legislation must indicate 
     the cost of the transaction based on three loan terms (two 
     years, the consumer's life expectancy, and such longer period 
     as the Federal Reserve Board deems appropriate). Likewise, 
     the disclosure must indicate the cost of the transaction 
     assuming three appreciation rates for the dwelling. The 
     ``cost'' of the transaction shall be expressed as an annual 
     interest rate and include all payments made to and for the 
     consumer, all costs and charges to the consumer, the cost of 
     any annuity associated with the transaction, and any 
     limitation on the liability of the consumer.
       The Conferees intend the reverse mortgage disclosure to be 
     modeled after the matrix disclosure currently provided 
     through the Federal Housing Administration's Home Equity 
     Conversion Mortgage Program and required by Section 255 of 
     the National Housing Act. This disclosure will indicate how 
     certain variables impact the transaction. For instance, the 
     interest rate implicit in a reverse mortgage is reduced as 
     the consumer lives longer.
       c. Home equity plan exemption
       Section 154 also clarifies the inapplicability of Section 
     137(b) of the TILA to reverse mortgages. This provision is 
     not intended to substantively change current law, but rather 
     to codify current interpretation that Section 137(b) should 
     not be construed so as to prevent acceleration of a reverse 
     mortgage upon death of the consumer. The intent of Congress 
     in this area was first clarified in Section 520 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     1715(z)-20(j)) with respect to the Home Equity Conversion 
     Mortgage Program. This action affirms the exclusion for all 
     reverse mortgages.
     Section 155. Regulations
       This section requires the Federal Reserve Board to issue 
     regulations under the subtitle within 180 days of enactment 
     of the Act. The regulations will become effective according 
     to the schedule outlined in the TILA.
     Section 156. Applicability
       The provisions of this legislation will apply to mortgages 
     consummated after regulations promulgated pursuant to Section 
     155 become effective.
     Section 157. Federal Reserve study
       Section 157 requires the Federal Reserve Board to conduct a 
     study and submit a report to Congress regarding whether a 
     consumer engaging in an open end credit transaction is 
     provided adequate protections under Federal law, including 
     under Section 127(A) of the TILA. This legislation exempts 
     open end credit plans, such as home equity lines of credit. 
     Hearings on reverse redlining produced insufficient evidence 
     to establish whether there are significant numbers of abusive 
     home equity loan transactions in the open and credit market. 
     However, if the market changes, or the Board finds that open 
     end credit plans are being used to circumvent this 
     legislation, the Board has the authority to address abuses 
     under Section 152(d). The Board must complete the study 
     within 2 years and provide a report to Congress, along with 
     any legislative recommendations.
     Section 158. Hearings on home equity lending
       Section 158 requires the Federal Reserve Board to conduct 
     public hearings within 3 years and regularly thereafter to 
     examine the home equity loan market and the adequacy of 
     existing law and regulation in protecting consumers, 
     particularly low-income consumers. These products have 
     provided important liquidity to millions of consumers. By 
     their nature, however, they also place at risk the equity 
     that consumers have established in their homes. When problems 
     arise in the home equity loan market, they are profoundly 
     damaging.
       The Conferees believe that this legislation is an important 
     step to protect homeownership. Under this Conference 
     Agreement, they have given the Federal Reserve Board the 
     flexibility to address future problems before legislation is 
     necessary and before consumers have lost their homes. These 
     hearings will enable the Federal Reserve Board to develop a 
     better understanding of home equity lending and ensure that 
     regulatory policy responds to market developments in a timely 
     fashion.
       In conducting such hearings, the Federal Reserve Board 
     should solicit the participation of consumers (particularly 
     low income consumers), representatives of consumers, lenders, 
     regulators, and other interested parties. The Congressional 
     hearings that led to this legislation cast light on an entire 
     segment of the credit market which had been largely ignored. 
     Section 158 is designed to ensure that such aspects of the 
     credit markets are better understood in the future.

               TITLE II--SMALL BUSINESS CAPITAL FORMATION

       Subtitle A of Title II is intended to increase small 
     business access to capital by removing impediments in 
     existing law to the securitization of small business loans 
     and leases. Subtitle A builds on the framework for 
     securitization established by the Secondary Mortgage Market 
     Enhancement Act of 1984, known as SMMEA. SMMEA was enacted to 
     increase the flow of funds to the housing market by 
     facilitating the participation of the private sector in the 
     secondary mortgage market. To accomplish this, SMMEA amended 
     the Securities Exchange Act of 1934 (Exchange Act) to 
     facilitate the development of a forward trading market in 
     ``mortgage related securities'' and designated such 
     securities as ``legal investments'' for state and Federally 
     regulated financial institutions. Subtitle A of Title II 
     would create a similar framework for ``small business related 
     securities,'' with the goal of stimulating a similar flow of 
     funds to small businesses. It is the hope of the Conferees 
     that this improved access to capital will help create new 
     jobs and stimulate economic growth in the United States.
       The Conferees adopted sections 201 through 208 of the 
     Senate bill.
       Section 209 calls for the Board of Governors of the Federal 
     Reserve System (the Board) and the Securities Exchange 
     Commission (the Commission) to conduct a joint study of the 
     impact of the provisions of this title on the credit and 
     securities markets. The study will include an evaluation of 
     the impact of the amendments made by this subtitle and by 
     section 347 of this Act on the availability of credit for 
     businesses and commercial enterprises in general, and in 
     particular for businesses in low- and moderate-income areas, 
     businesses owned by women and minorities, community 
     development efforts, community development financial 
     institutions, different geographical regions, and a diversity 
     of types of businesses.
       The section 209 study will examine the structure and 
     operation of the markets that develop for small business 
     related securities and commercial real estate mortgage 
     related securities (as provided under section 347 of the 
     Act), including the types of entities, such as pension funds 
     and insurance companies, that are significant purchasers of 
     these securities. The study will also discuss any adverse 
     effects of these markets on commercial real estate ventures, 
     pension funds, or pension fund beneficiaries. Depending on 
     how these markets develop, the Board and the Commission shall 
     have flexibility to modify or supplement, as appropriate, the 
     issues to be addressed in the joint study. In keeping with 
     the findings of these reviews, the study may contain 
     recommendations for any additional suitability or disclosure 
     requirements or other investor protections that should be 
     required.
       The Board and the Commission will report to Congress on 
     their joint study every two years over a six-year period 
     beginning on the date of enactment of Subtitle A. These 
     reports are to be accompanied by recommendations to Congress 
     of administrative or legislative action as the Board and the 
     Commission deem appropriate.
       Section 210 calls for the Federal Financial Institutions 
     Examination Council (FFIEC) to study the need for the use of 
     consistent financial terminology by depository institutions 
     for small business loans or leases which are sold for the 
     creation of small business related securities. The results of 
     the study and any appropriate policy recommendations will be 
     reported to Congress within two years after the date of 
     enactment of this Act. The Conferees do not intend that small 
     business loans should have common terms and conditions. 
     Rather, the Conferees direct FFIEC to determine whether the 
     words used to describe loans and leases should have commonly 
     understood definitions and meanings. The Conferees further 
     intend that the FFIEC consult with the Commission to assure 
     that any recommendations do not conflict with the terminology 
     developed concerning securitization under the federal 
     securities laws.
       The Conferees did not agree to include in the Conference 
     Report section 209 as passed by the Senate. That section 
     provided that the Secretary of Labor, in consultation with 
     the Secretary of the Treasury, may exempt transactions 
     involving small business related securities from the 
     prohibited transactions provisions of the Employee Retirement 
     Income Security Act of 1974 (ERISA). Since the Secretary of 
     Labor already has the authority to issue either individual or 
     class exemptions for all types of securities, including those 
     provided for under section 347 of this Act, the Senate-passed 
     section 209 was unnecessary.
       Subtitle B of Title II provides for the use of $50 million 
     in Federal funds to encourage and expand Capital Access 
     Programs administered by States and certain localities. The 
     Conference Report substitutes the Community Development 
     Financial Institutions Fund, established under Section 104 of 
     the Conference Report, for the Department of Housing and 
     Urban Development as the program administrator. The Fund's 
     responsibilities with respect to the capital access program 
     are limited and similar to the Fund's assistance 
     responsibilities under Title I of the Conference Report.
       Second, the Conference Report extends the commencement date 
     of the capital access program from the date of the bill's 
     enactment to January 6, 1996. This change will afford those 
     States that have not established qualifying programs 
     additional time to act in order to benefit from the program's 
     assistance.
       The subtitle authorizes the appropriation of $50 million to 
     implement the program and requires the appropriation of this 
     amount without fiscal year limitation prior to the Fund's 
     approval of State or local jurisdictions as recipients of 
     assistance. The Conference Committee intends for funds 
     appropriated to the Fund to carry out the capital access 
     program to include an amount for program administrative 
     expenses. In light of the Fund's very limited 
     responsibilities under the program, the Committee expects the 
     Fund to administer the program with a lean staff that 
     minimizes its administrative expenses. Therefore, the 
     Committee expects only a small portion of the appropriated 
     amount to be needed for such expenses.

       TITLE III: PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT


                           section-by-section

     Section 301. Incorporated definitions
       The terms ``appropriated Federal banking agency,'' 
     ``Federal banking agencies,'' ``insured depository 
     institution,'' and ``insured credit union'' are defined to 
     have the same meanings as in the Federal Deposit Insurance 
     Act and the Federal Credit Union Act.
     Section 302. Administrative consideration of burden with new 
         regulations
       In setting the effective date of new regulations and 
     imposing new administrative compliance requirements, the 
     Federal banking agencies are directed to consider the burden 
     and benefits of those requirements for depository 
     institutions and their customers. The agencies should take 
     into account institution size and are specifically directed 
     to give consideration to small institutions.
       Section 302 also states that new regulations and amendments 
     to existing regulations that impose reporting, disclosure, 
     and other requirements on depository institutions shall take 
     effect on the first day of a calendar quarter. This effective 
     date requirement will provide insured depository institutions 
     with a consistent date for complying with Federal banking 
     regulations. Currently, regulations can become effective at 
     any time, requiring insured depository institutions to 
     constantly review and update their policies and procedures. 
     This process is burdensome and costly, especially to smaller 
     institutions. By having regulations generally take effect on 
     only four days each year, insured depository institutions 
     will be more regularly informed of new rules with which they 
     must comply and will be able to effectuate training, 
     software, and other operational modifications in a coherent 
     manner.
       Under this section, the requirements of the Administrative 
     Procedures Act will continue to apply, requiring a minimum of 
     thirty days between publication of a regulation and its 
     effective date. A banking agency may accelerate the effective 
     date for good cause and must publish the reasons for such a 
     determination with the regulation. Likewise, depository 
     institutions may comply with the regulation prior to its 
     effective date. This rule does not apply to regulations 
     issued by the Board of Governors of the Federal Reserve in 
     connection with the implementation of monetary policy.
     Section 303. Streamlining of regulatory requirements
       Each Federal banking agency must review and streamline its 
     regulations and written supervisory policies within 2 years, 
     removing regulatory inconsistencies, outmoded or duplicative 
     requirements and unwarranted constraints on credit 
     availability. Where agencies have adopted different 
     requirements in regulations or other general guidance to 
     banks implementing a common statutory scheme or supervisory 
     concern, the agencies must make their requirements uniform. 
     The agencies must report on their progress after one year and 
     again at the end of the two-year period for completing this 
     streamlining.
       In addition, section 303 requires the Federal Reserve Board 
     to review the regulations and policies regarding variable 
     rate mortgages in order to simplify the disclosures, if 
     necessary, and make the disclosures more comprehensible. The 
     Board must work with consumers in conducting this review and 
     report to Congress within two years with findings and any 
     legislative recommendations.
     Section 304. Elimination of duplicative filings
       The agencies must work together to eliminate, to the extent 
     possible, requests for duplicative and other unnecessary 
     information in connection with applications and notices. In 
     addition, the agencies are required to harmonize any 
     inconsistent publication and public notice requirements they 
     have adopted pursuant to regulatory authority.
     Section 305. Coordinated and unified examinations
       Section 305 requires the Federal banking agencies to 
     coordinate their examinations and, in two years, to jointly 
     develop and implement a system under which one of the federal 
     banking agencies will take the lead in managing a unified 
     examination of the insured institutions that it supervises 
     and the other insured banks, thrifts and other companies in 
     each banking organization. Upon establishment of the system, 
     the agencies are required to submit a joint report to 
     Congress, followed thereafter by annual reports.
       The goals of the system should be to eliminate unnecessary 
     examination overlap and to improve supervision and 
     accountability. The Conferees intend the system to reduce the 
     regulatory burden experienced by institutions that confront 
     multiple duplicative exams from the four agencies through 
     their national, regional and subregional offices. The 
     Conferees also intend the system to resolve disagreements 
     that arise among the different regulators in reviewing the 
     same loans, activities and practices of the organization. 
     Such duplication and disagreement undermine industry 
     confidence in federal regulation.
       Section 305 contemplates that the agencies will have the 
     discretion to create and modify the unified examination 
     system, as they agree. The requirement of a lead agency will 
     not preclude the assignment of adequately trained and 
     experienced examiners from the Federal banking agencies. 
     Rather, the unified examination system is intended to permit 
     the agencies to apply their resources more effectively, to 
     allocate examiners appropriately, to draw on the expertise of 
     all the agencies, and to promote safety and soundness. In 
     addition, requiring one of the agencies to take the lead in 
     managing the examination will provide a mechanism for 
     resolving disagreements and will promote agency 
     accountability.
       Section 305 permits each appropriate federal banking agency 
     to conduct a separate independent examination in an emergency 
     or other exigent circumstances, or when the agency believes 
     that a violation of law may have occurred. In these 
     instances, there is an explicit preservation of the agencies' 
     ability to individually pursue examinations in addition to 
     the agency designated by the established system.
     Section 306. 18 month examination rule for certain small 
         institutions
       Current law provides an on-site examination of an insured 
     depository institution every 12 months, except that the 
     examination cycle is extended to 18 months for an institution 
     with assets less than $100 million that (1) is well-
     capitalized; (2) is well managed and has an outstanding 
     composite condition (e.g., a CAMEL rating of ``1''); (3) has 
     not undergone a change of control within one year of its last 
     examination; and (4) is not subject to a formal enforcement 
     proceeding or order. Section 306 raises the asset threshold 
     for the extended 18-month cycle to $250 million for such 
     institutions.
       In addition, section 306 also broadens the exception to 
     institutions with a good composite condition (e.g., a CAMEL 
     rating of ``2'') and assets less than $100 million. After 2 
     years, the agencies may increase the $100 million level for 
     such institutions to an amount not to exceed $175 million if 
     the agency determines by regulation that the greater amount 
     would be consistent with principles of safety and soundness.
       Section 306 does not affect the existing discretion of the 
     agencies to examine an institution more frequently than is 
     required by statute.
     Section 307. Call report simplification
       To reduce the burden of filing and publishing reports of 
     condition, commonly referred to as call reports, this section 
     instructs the federal banking agencies to develop a system 
     under which an institution may file call report data by 
     electronic means. The section also provides that the agencies 
     make these reports available to the public electronically. In 
     addition, within one year the agencies must report to 
     Congress on any other measures that would make reporting and 
     dissemination more efficient.
       The agencies are required to work jointly to adopt a single 
     form for the filing of core information and to streamline the 
     schedules supplementing the core information by eliminating 
     requirements that are not warranted ``for reasons of safety 
     and soundness or other public purposes.'' The conferees 
     intended that information requested by the banking agencies 
     to determine an insured depository institution's semiannual 
     assessment be considered as ``warranted for reasons of safety 
     and soundness or other public purposes'' under section 
     307(c)(2).
       The Conferees intend section 307 to apply to reporting 
     pursuant to Federal banking laws. Reporting requirements 
     relating to disclosures under the Federal securities laws, 
     such as those required under the Securities Exchange Act of 
     1934, are not affected by section 307. These financial 
     statements should continue to be prepared in accordance with 
     generally accepted accounting principles and the Securities 
     and Exchange Commission's Regulation S-X, 17 C.F.R. Sec. 210.
     Section 308. Repeal of publication requirements
       This section repeals requirements in section 5211 of the 
     Revised Statutes, section 7(a)(1) of the Federal Deposit 
     Insurance Act and section 9 of the Federal Reserve Act for 
     newspaper publication by a bank of its reports of condition. 
     The section does not affect the public availability of this 
     information.
     Section 309. Regulatory appeals process, ombudsman, and 
         alternative dispute resolution
       This section requires each Federal banking agency and the 
     National Credit Union Administration Board (NCUA) to 
     establish an internal regulatory appeals process for insured 
     depository institutions within 6 months. The appeals process 
     must be available to review material supervisory 
     determinations and provide for expeditious review under 
     appropriate safeguards to protect the institution from 
     retaliation by agency examiners. The term ``material 
     supervisory determinations'' is defined to include 
     determinations relating to examination ratings, adequacy of 
     loan loss reserves, and significant loan classifications. The 
     appeals process does not affect the authority of the agencies 
     and the Board to take enforcement or supervisory action 
     against an institution.
       Section 309 also requires each banking agency and the NCUA 
     to appoint an ombudsman to act as liaison with respect to any 
     problem that any party may have in dealing with the agency. 
     The Conferees recognize that implementation of these 
     provisions could impose an undue burden on certain federal 
     agencies with limited staff and budgetary resources. 
     Specifically, the Conferees expect that the National Credit 
     Union Administration might meet the requirements by an 
     appropriate part-time employee. Nonetheless, the Conferees 
     intend that these provisions be carried out by each agency 
     identified in section 309.
       Some of the Federal banking agencies have in place 
     procedures to settle disputes between the agency and a 
     financial institution that may satisfy the requirements of 
     this provision. In addition, some agencies, for example, the 
     Comptroller of the Currency, may already have appointed an 
     ombudsman to hear appeals. Nothing in this section is 
     intended to interfere with such existing programs.
       Finally, the Conferees have included an alternative dispute 
     resolution (ADR) provision in this Act to encourage Federal 
     banking agencies and the NCUA to utilize the various methods 
     of ADR instead of litigation in resolving issues in 
     controversy. ADR has been used in the private sector for many 
     years and has proven to be quicker, less costly, and more 
     efficient than litigation in resolving disputes. The use of 
     ADR by all Federal banking agencies would save taxpayer money 
     and decrease the regulatory burden for insured depository 
     institutions and individuals who have claims with Federal 
     banking agencies.
       Section 309 requires only that each Federal banking agency 
     and the NCUA establish a pilot program to resolve claims 
     against insured depository institutions or credit unions for 
     which the agency has been appointed conservator or receiver, 
     claims involving any final action taken by a banking agency 
     in its capacity as conservator or receiver for an insured 
     depository institution, and any other issue which the agency 
     determines appropriate. The use of ADR must be agreed to by 
     all interested parties, including the agency itself. It is up 
     to each agency to decide whether to implement ADR agency-
     wide, based on the success and effectiveness of the pilot 
     program.
       This section provides each agency with discretion in 
     determining the method or methods of ADR it wishes to 
     utilize. ADR methods include, among other things, mediation, 
     fact finding, mini-trials, arbitration, and the utilization 
     of an ombudsman. This section also requires the 
     Administrative Conference of the United States to conduct an 
     independent evaluation of each pilot program.
     Section 310. Electronic filing of currency transaction 
         reports
       This section amends the Bank Secrecy Act to require the 
     Secretary of Treasury to permit financial institutions and 
     uninsured banks to maintain and submit electronically the 
     currency transaction reports (CTRs) and other records 
     currently required under the Act. The Secretary is authorized 
     to prescribe terms and conditions for electronic filing. 
     Electronic record-keeping and filing would remain optional 
     for banks.
     Section 311. Bank Secrecy Act publication requirements
       To ease the burden on institutions and promote compliance, 
     this section requires the Secretary of the Treasury to 
     publish all written rulings concerning money laundering 
     reporting or other requirements placed on banks under chapter 
     53 of title 31 of the U.S. Code. The Secretary must also 
     issue, on an annual basis, staff commentary to the 
     regulations implementing the chapter.
     Section 312. Exemption of business loans from Real Estate 
         Settlement Procedures Act requirements
       Section 312 amends the Real Estate Settlement Procedures 
     Act to exempt business purpose residential real estate loans 
     from coverage under the Act. The language of the amendment is 
     modeled after Sec. 226.3 of Regulation Z, the Truth in 
     Lending Act regulation. The Conferees intend the Department 
     of Housing and Urban Development, the agency responsible for 
     RESPA regulation, to use the Truth in Lending Act as a basis 
     for its regulations but also to retain discretion to define 
     what constitutes a transaction ``primarily for a business, 
     commercial or agricultural purpose'' for purposes of the 
     RESPA.
     Section 313. Flexibility in choosing boards of directors
       This section revises section 5146 of the Revised Statutes 
     to provide that a majority, instead of two-thirds, of the 
     board of directors of a national bank must reside in the area 
     in which the bank is located.
     Section 314. Holding company audit requirements
       This section amends section 36(i)(2) of the Federal Deposit 
     Insurance Act to allow insured depository institutions with 
     total assets of more than $9 billion and CAMEL ratings of 1 
     or 2 that are subsidiaries of holding companies to satisfy 
     the requirements of section 36 at the holding company level. 
     Further, when applying this new provision, if the FDIC 
     determines that an institution is a ``large institution,'' 
     the holding company's audit committee may not include any 
     large customers of the institution. Under this section, 
     services and functions comparable to those required by 
     section 36 must be provided at the holding company level, as 
     is required by section 36(i)(1).
       Under current law, section 36(i)(2) offered the holding 
     company option only to institutions with assets of less than 
     $5 billion or assets of between $5 billion and $9 billion and 
     a CAMEL rating of 1 or 2. Under the FDIC's guidelines 
     implementing section 36, services and functions are 
     considered ``comparable'' if the holding company has an audit 
     committee appropriate to its largest subsidiary institution, 
     and management's report on the effectiveness of internal 
     controls and compliance with designated laws is based on 
     information regarding the activities and operations of all 
     subsidiary institutions subject to section 36.
       With respect to larger institutions that would be eligible 
     under this section to satisfy the section 36 requirements at 
     the holding company level, the Conferees expect that services 
     and functions performed at the holding company level will be 
     comparable to those that would otherwise be performed at all 
     covered subsidiary institutions consistent with the FDIC's 
     existing guidelines. Similarly, the scope of the duties and 
     responsibilities of the holding company's audit committee 
     will include all such subsidiary institutions. Nothing in 
     these amendments should be construed as providing any basis 
     for weakening current guidelines relating to comparable 
     services and functions for holding companies under section 
     36(i).
       Notwithstanding the availability of the holding company 
     option to larger institutions, the section provides that a 
     Federal banking agency may require a subsidiary depository 
     institution with assets greater than $9 billion to comply 
     with the section 36 requirements, if the agency determines 
     that allowing the exemption would cause significant risk to 
     the deposit insurance system.
       The availability of an exemption under section 314 does not 
     alter or provide an exemption from any requirement of a 
     publicly held bank holding company or publicly held savings 
     and loan holding company (or publicly held institution that 
     does not have Federal insurance) to file audited financial 
     statements with the Securities and Exchange Commission under 
     the Federal securities laws or the rules and regulations 
     promulgated thereunder.
       Finally, section 314 requires the FDIC to notify an 
     institution in writing if the FDIC requires the institution 
     to have its quarterly reports reviewed by an independent 
     public accountant under section 36.
     Section 315. State regulation of real estate appraisals
       This section instructs the Federal Appraisal Subcommittee 
     of the Federal Financial Institutions Examination Council to 
     encourage the States to develop reciprocity agreements so 
     that appraisers licensed or certified by one State may 
     perform appraisals in other States. The amendment also 
     provides that a State agency may not impose excessive fees or 
     burdensome requirements on out-of-State appraisers engaged in 
     temporary practice in a State.
     Section 316. Acceleration of effective date for 
         interaffiliate transactions
       This provision accelerates the availability, for certain 
     well-capitalized thrifts, of the so-called ``sister bank'' 
     exemption for thrifts, which is not scheduled to become 
     effective until January 1, 1995. Currently, under this 
     exemption, transactions between banks that are 80% owned by 
     the same company are exempt from otherwise applicable 
     affiliate transaction restrictions. Under this provision, 
     well-capitalized thrifts that are 80% owned by the same 
     company would likewise be exempt from such affiliate 
     transaction restrictions, subject to the cross-guaranty 
     liability provisions of section 5(e)(6) of the Federal 
     Deposit Insurance Act that would otherwise not be effective 
     until August 9, 1994. This provision does not alter the 
     availability of this exemption for all other thrifts which is 
     scheduled to become effective on January 1, 1995.
     Section 317. Collateralization of public deposits
       Section 13(e) of the Federal Deposit Insurance Act permits 
     the FDIC to disavow a collateral agreement unless the 
     agreement is in writing, is approved by the bank's board of 
     directors, was executed contemporaneously with the 
     acquisition of the asset, and has been an official record of 
     the institution.
       A recent court decision, North Arkansas Medical Center v. 
     Barrett, 962 F.2d 780 (8th Cir. 1992), raised concerns among 
     various parties that are secured by collateral received from 
     an insured depository institution because the court upheld 
     the FDIC's authority to claim collateral which was not 
     pledged in strict compliance with section 13(e). To address 
     the concerns of secured parties, the FDIC issued a policy 
     statement in March 1993 indicating that it would not seek to 
     void a security interest solely because the security 
     agreement did not comply with the contemporaneous execution 
     requirement.
       Section 317 provides that in cases involving deposits made 
     by Federal, state or local government entities, the FDIC will 
     not invalidate a collateralization agreement solely because 
     the agreement was not executed contemporaneously with the 
     acquisition of the collateral or because changes were made in 
     the collateral in accordance with the agreement. This 
     codifies the FDIC policy statement with regard to securities 
     pledged for public deposits. The Conferees note that the 
     provision is not intended to affect the validity of the 
     FDIC's policy regarding the contemporaneous execution 
     requirement as it relates to other types of agreements with 
     insured depository institutions.
     Section 318. Modification of regulatory provisions
       This section amends section 39 of the Federal Deposit 
     Insurance Act to give the banking agencies greater 
     flexibility in implementing standards relating to asset 
     quality, earnings, and stock valuation. Under current law, 
     these standards must be implemented by regulation. When an 
     agency determines that an institution has violated a 
     standard, the agency must require the institution to submit a 
     plan indicating how the institution will correct the 
     deficiency. Section 318 permits the banking agencies to 
     implement these standards by either regulation or guideline. 
     When an agency implements these standards by guideline, the 
     agency can decide whether or not to compel institutions that 
     fail to meet the guideline to submit compliance plans. The 
     agency does not have this discretion when it acts by 
     regulation--the law requires the submission of a plan.
       Further, section 318 eliminates the requirement that 
     standards implemented pursuant to section 39 apply to 
     depository institution holding companies. The Conferees 
     intend these requirements to apply only to the depository 
     institutions.
     Section 319. Expedited procedures for forming a bank holding 
         company
       Section 319 replaces the formal application process 
     currently required under section 3 of the Bank Holding 
     Company Act with a simplified 30-day notice procedure in 
     cases in which the owners of a bank seek to reorganize their 
     ownership interests into a bank holding company structure. 
     This new procedure is available only for reorganizations in 
     which the shareholders of the bank will receive substantially 
     the same proportional share interest in the holding company 
     as they held in the bank (except for changes in shareholders' 
     interests resulting from the exercise of dissenting 
     shareholders' rights under state or Federal law); the bank 
     will be adequately or well capitalized immediately following 
     the reorganization; the bank holding company meets all of the 
     capital and other financial standards (including debt 
     requirements) prescribed by the Federal Reserve Board; and 
     the holding company does not engage in any activities other 
     than managing or controlling banks. This new notice procedure 
     would not apply to cases in which the shareholders seek to 
     acquire an additional bank or to engage in nonbanking 
     activities as part of the reorganization.
     Section 320. Exemption of certain holding company formations 
         from registration under the Securities Act of 1933
       Section 320 adds section 3(a)(12) to the Securities Act of 
     1933 to facilitate the establishment of holding company 
     structures for banks and savings associations. This section 
     provides an exemption from the registration requirements (but 
     not the anti-fraud provisions) of the Securities Act for 
     equity securities issued or exchanged in the context of a 
     reorganization of a bank or savings association into a 
     holding company structure.
       The exemption generally requires that, as part of the 
     reorganization, the security holders exchange their equity 
     securities of the bank or savings association for equity 
     securities of a newly formed holding company that will have 
     no significant assets other than the securities of the bank 
     or savings association and the existing subsidiaries of the 
     bank or savings association; the security holders receive 
     securities representing the same proportional interest in the 
     holding company as they held in the bank or savings 
     association before the transaction; the rights and interests 
     of security holders in the holding company are substantially 
     the same as those in the bank or savings association before 
     the transaction; and, after the reorganization, the holding 
     company has substantially the same assets and liabilities, on 
     a consolidated basis, that the bank or savings association 
     had before the transaction.
       These conditions are intended to ensure that the exemption 
     is available only where the transaction is for the sole 
     purpose of the formation of a holding company. The exemption 
     is not available for transactions which transfer corporate 
     control or substantially alter the proportional interests of 
     shareholders. These transactions would have to comply with 
     the registration provisions of the Securities Act. 
     Additionally, the exemption would not be available for a 
     holding company formed in connection with the concurrent 
     conversion from mutual to stock ownership.
       A newly formed holding company would be subject to the 
     registration requirements of section 5 of the Securities Act 
     for any subsequent offerings of securities for which another 
     exemption is not available. In this regard, the exemptions in 
     section 3(a)(2) and 3(a)(5) of the Securities Act are 
     inapplicable for securities issued by a holding company. The 
     registration, reporting, and other requirements under the 
     Securities Exchange Act of 1934 would be applicable if the 
     holding company applies for listing on a national securities 
     exchange or if it is required to register under section 12(g) 
     of the Act.
     Section 321. Reduction of post-approval waiting period for 
         certain acquisitions and mergers
       Section 321 reduces the 30-day post-approval waiting period 
     for mergers involving depository institutions and for certain 
     bank holding company acquisitions to a minimum of 15 days, 
     provided the Attorney General concurs and has not adversely 
     commented on the proposed merger prior to its approval.
     Section 322. Bankers' banks
       Under current law, national banks may purchase shares of an 
     insured bank, or the holding company of an insured bank, that 
     is entirely owned by insured depository institutions and is 
     engaged in providing services for such institutions (commonly 
     referred to as a bankers' bank). Through a bankers' bank, a 
     group of banks (in particular, small banks) can provide 
     services to themselves on a cost efficient basis that they 
     might otherwise have to purchase from correspondent banks.
       Section 322(a) authorizes national banks to invest in a 
     bankers' bank in which depository institution holding 
     companies are investors and permits bankers' banks to provide 
     services to such holding companies and their officers, 
     directors, and employees. Section 322(a) also permits 
     bankers' banks to provide correspondent banking services at 
     the request of other depository institutions or their holding 
     companies. Corresponding changes are also made to national 
     banking laws to permit the Comptroller to charter bankers' 
     banks that provide these services.
       Section 322(b) gives a Federal savings association the 
     authority to invest in a bankers' bank on the same terms and 
     conditions as a national bank.
       Section 322(d) increases the Federal Reserve Act limit on 
     the percentage of a member bank's, including a national 
     bank's, capital and surplus that may be represented by loans 
     secured by stocks. The current 10 percent limit is increased 
     to 15 percent.
     Section 323. Bank Service Corporation Act amendment
       This section replaces the ``prior approval'' requirement 
     for an investment in a bank service corporation with a 
     ``prior notice'' requirement. The ``Prior notice'' standard 
     of review has been applied in the past by the Federal banking 
     agencies for other types of bank investments in subsidiaries 
     and limited partnerships.
     Section 324. Merger transaction reports
       This section provides that a Federal banking agency does 
     not have to file a report on the competitive implications of 
     a merger if it notifies the banking agency with jurisdiction 
     that such a report is not necessary because the merger does 
     not raise competitiveness issues. This section does not 
     eliminate the requirement for the filing of a competitive 
     report by any appropriate Federal banking agency that finds 
     that there are competitive issues implicated by a particular 
     merger.
     Section 325. Credit card accounts receivable sales
       This section allows the FDIC to waive the right to 
     repudiate, at a later date, an institution's sale of its 
     credit card accounts receivable. The grant of a waiver is 
     totally within the discretion of the FDIC.
     Section 326. Limiting potential liability on foreign accounts
       This section amends the Federal Reserve Act and the Federal 
     Deposit Insurance Act to limit a domestic bank's liability 
     for deposits in a foreign branch in cases of a sovereign 
     action by that country or in cases of war, insurrection, or 
     civil strife.
     Section 327. GAO reports
       Section 327 reduces the reporting burden on the General 
     Accounting Office (GAO). The GAO is currently required to 
     report quarterly on the FDIC's compliance with its statutory 
     borrowing limits, whether or not the FDIC has borrowed any 
     money from the Treasury. This section restricts the reporting 
     requirements to those quarters for which the FDIC has 
     outstanding debt owed to the Treasury, the Federal Financing 
     Bank, or members of the Bank Insurance Fund.
     Section 328. Study and report on capital standards and their 
         impact on the economy
       This section requires the Secretary of the Treasury, in 
     consultation with the Federal banking agencies, to conduct a 
     study of the effect of risk-based capital standards on both 
     the safety and soundness of insured depository institutions, 
     economic growth, and the availability of credit, particularly 
     with respect to individuals and small business concerns. 
     Section 328 requires the Secretary, within one year, to 
     submit his findings and conclusions to Congress as well as 
     any recommendations that are deemed appropriate.
     Section 329. Studies on the impact of the payment of interest 
         on reserves
       Section 329 requires the Federal Reserve Board, in 
     consultation with the FDIC and the NCUA, to report to 
     Congress within six months on the monetary policy and banking 
     implications of payment and nonpayment of interest on sterile 
     reserves. Also within 6 months, the Office of Management and 
     Budget and the Congressional Budget Office, in consultation 
     with the Senate and House Budget Committees, must report on 
     the budgetary impact of the payment of interest on sterile 
     reserves to banks or to the deposit insurance funds.
     Section 330. Study and report on the consumer credit system
       This section requires the Secretary of the Treasury, in 
     consultation with the Federal Reserve Board, the 
     Administrator of the Small Business Administration, the 
     Secretary of the Department of Housing and Urban Development, 
     and the Federal banking agencies, to conduct a study of the 
     process by which credit is made available to consumers and 
     small businesses in order to identify procedures that reduce 
     the amount of credit available, increase inconvenience and 
     cost to consumers and business, or unnecessarily increase 
     inconvenience costs and burdens on lenders. As part of the 
     study, section 330 requires the Secretary to solicit comments 
     from consumers, representatives of consumers, lenders and 
     other interested parties. Within one year, the Secretary must 
     submit a report to Congress containing any recommendations 
     for administrative or statutory changes that are deemed 
     appropriate.
     Section 331. Clarification of provisions relating to 
         administrative autonomy
       Section 331 contains a number of provisions to clarify the 
     degree of autonomy of the Office of the Comptroller of the 
     Currency and the Office of Thrift Supervision as bureaus of 
     the Treasury Department. The OCC and the OTS are responsible 
     for supervising and regulating national banks and thrift 
     institutions, which hold nearly two-thirds of the total 
     assets in U.S. depository institutions, and must be impartial 
     and accountable in carrying out their responsibilities. 
     Section 331 provides for direct submission of testimony and 
     other statements to Congress without prior review by any 
     other agency; clarifies the status of the OCC chief counsel 
     as an employee reporting solely to the Comptroller; and 
     states that the Treasury Secretary will not intervene in any 
     matter or proceeding before the OCC or the OTS, including 
     enforcement proceedings, unless otherwise specifically 
     provided by law.
       With regard to rulemaking, section 331 provides that the 
     Secretary shall not delay or prevent the issuance of 
     regulations developed by the OTS or OCC. The Conferees do not 
     intend to preclude the Treasury Department and the respective 
     agencies from communicating during a rulemaking process 
     regarding the Treasury Department's policy goals and 
     objectives. However, regulations developed by the OCC and OTS 
     shall no longer be subject to a Treasury Department review or 
     clearance process that allows the Treasury to block, delay or 
     rewrite any OCC or OTS proposed or final regulation that the 
     Comptroller of the Currency or the Director of the OTS has 
     determined to issue. The bill does not alter the Treasury 
     Secretry's ability to express policy views to the Comptroller 
     of the Currency and to the Director of the OTS.
       Section 331 also provides the FDIC, the Federal Reserve 
     Board and the OCC with the authority to conduct litigation 
     through their own attorneys in enforcing the statutes 
     governing the institutions that they oversee.
       The provisions granting these agencies such independence 
     are exceptions to the longstanding policy of the federal 
     government that litigation in which the United States or an 
     agency or officer thereof is a party should be conducted by 
     the Attorney General (generally set forth in 28 U.S.C. 
     Sec. Sec. 515-519. The Conferees believe that this 
     exceptional grant of authority is most appropriately 
     exercised by the federal banking agencies where legal actions 
     are central to their ``core'' function of regulating and 
     supervising financial institutions. The Conferees expect 
     these banking agencies to refer to the Department of Justice, 
     or coordinate with the Department of Justice, any litigation 
     involving matters with governmentwide implications, such as 
     claims involving the Freedom of Information Act, the Privacy 
     Act, and the Federal Tort Claims Act.
       The Conferees intend to provide the Board of Governors of 
     the Federal Reserve System with authority to litigate in its 
     own name and through its own attorneys when it does so in its 
     capacity as a bank regulator, not in it other primary role as 
     the nation's monetary policy authority. The Board would, 
     therefore, have independent litigating authority similar to 
     that provided to the other federal bank regulators. The 
     phrase ``other entity'' as used in the amendment is intended 
     to cover individual and financial institutions, other than 
     banks and bank holding companies, which are regulated by the 
     Board, such as Edge Act corporations. In addition, the 
     authority granted with respect to ``the administration of its 
     operations'' should be construed to include only its internal 
     regulatory operations, such as personnel and contract 
     disputes, and not to include administrative matters unrelated 
     to bank regulatory activities, such as Freedom of Information 
     Act requests for monetary policy information.
     Section 332. Exemption for business accounts
       Section 332 defines the term ``account'' for purposes of 
     the Truth in Savings Act as an account used by consumers 
     primarily for personal, family, or household use. The 
     Conferees intend this section to provide a business purpose 
     exemption similar to that provided in the Truth in Lending 
     Act. Under this provision, accounts of unincorporated 
     businesses (i.e., generally, non-profit entities) are exempt 
     from coverage under the Truth in Savings Act.
     Section 333. Study on check related fraud
       Section 333 requires the Federal Reserve Board to conduct a 
     study regarding the advisability of extending to 2 business 
     days the 1 business day period governing the availability of 
     funds deposited by local checks under the Expedited Funds 
     Availability Act. The Conferees intend the Board to determine 
     whether there is a pattern of check related losses 
     attributable to the 1 day period and whether extending the 
     period to 2 days would significantly reduce these losses. The 
     Conferees believe that there is a lack of reliable evidence 
     indicating whether or not institutions are experiencing fraud 
     losses as a result of the check schedule mandated by the 
     Expedited Funds Availability Act. The Board is required to 
     submit a report to Congress within 2 years of enactment 
     containing its findings and any legislative recommendations.
     Section 334. Insider lending
       Section 334 amends the Federal Reserve Act to eliminate the 
     requirement that prior approval of the board of directors be 
     granted before an institution may make a loan to an executive 
     officer that is secured by a first lien on the officer's 
     residence. Such loans remain subject to the individual and 
     aggregate lending limits established under section 22(h) of 
     the Federal Reserve Act for loans to executive officers and 
     directors.
       Section 334 also enables the Federal Reserve Board, by 
     regulation, to make exceptions from the lending restrictions 
     placed on bank insiders for directors and officers of 
     subsidiaries of a company that controls a bank if those 
     persons do not have the authority to participate, and do not 
     participate, in the policy making functions of the bank. 
     However, the provisions under section 22(h)(2) that prohibit 
     banks from making loans to insiders on preferential terms are 
     not excepted with respect to bank loans to such directors and 
     officers.
       Under Regulation O, executive officers of nonbank 
     subsidiaries of a bank holding company are not subject to 
     certain insider lending restrictions provided the individual: 
     (a) is excluded from participation in major policymaking 
     functions of the member bank by resolutions of the boards of 
     directors of both the subsidiary and the member bank and (b) 
     does not actually participate in such major policy-making 
     functions. It is not the intent of the Conferees to affect 
     the exemptions that the Federal Reserve Board has already 
     extended to executive officers, but rather to allow the Board 
     the authority to provide appropriate treatment for directors.
     Section 335. Revision of standards
       Section 335 specifies that in considering revisions to the 
     risk-based capital standards, each Federal banking agency 
     shall ensure that the standards take into account the size 
     and activities of the institutions and not cause undue 
     reporting burdens.
     Section 336. Alternative rules for radio advertising
       Section 336 of Title III provides streamlined disclosures 
     for radio advertising of consumer leases. This alternative 
     enables radio advertisers to reduce the amount of information 
     that must be disclosed in an advertisement under the Consumer 
     Lease Act and instead permits additional information to be 
     disseminated to consumers through the use of a toll-free 
     telephone number referenced in an advertisement or through a 
     print advertisement.
       The Conference Agreement also requires the Federal Reserve 
     Board to submit a report to Congress, within one year from 
     the date of enactment, on the rules applicable to credit 
     advertising, how these rules could be modified to increase 
     consumer benefit and decrease creditor costs, and how these 
     rules could be modified for radio advertisements without 
     diminishing consumer protection.
       The Federal Reserve Board has begun considering whether and 
     how Regulation M, which implements the Consumer Lease Act, 
     should be simplified and clarified to permit an alternative 
     method for advertising disclosures. The Board should fully 
     review the comments of all interested parties and consider 
     promulgating a rule to streamline the disclosures for media 
     other than radio, such as television or print. Television 
     advertisements, for example, raise complex questions 
     regarding the content prominence, and duration of disclosures 
     necessary to simplify the process and to convey more 
     meaningful information to consumers. These issues are 
     properly considered in the context of a rulemaking proceeding 
     where a detailed record will be generated prior to any 
     action. Section 336 is not intended to interfere with the 
     Board's authority to conduct such a rulemaking.
     Section 337. Deposit broker registration
       This provision clarifies that insured depository 
     institutions that are well capitalized do not have to 
     register as deposit brokers.
     Section 338. Amendments to the Depository Institution 
         Management Interlocks Act
       This section amends section 206 of the Depository 
     Institution Management Interlocks Act by extending for an 
     additional 5 years the grandfathering authority for otherwise 
     prohibited management interlocks, subject to certain 
     restrictions. In particular, the Federal banking agencies are 
     directed to review, on a case-by-case basis (within 6 months 
     of the date of enactment of this Act), timely requests by 
     management officials who wish to continue to serve in dual 
     capacities pursuant to this grandfathering authority. In 
     determining whether to permit a management official to 
     continue to serve in a dual capacity, the agencies are 
     directed to consider the circumstances under which the person 
     has already served in such positions.
       The Federal banking agencies are directed to approve a 
     request for continuation of a previously grandfathered 
     management interlock under this provision only if: (i) the 
     management official has provided a resolution from the boards 
     of directors of each affected institution or company 
     certifying to each appropriate regulatory agency that there 
     are no other candidates available to serve who possess the 
     level of expertise necessary for such position, and (ii) the 
     agency determines that continuation of service by the 
     management official does not produce an anticompetitive 
     effect.
       The section also amends section 209 of the Interlocks Act 
     to repeal the Federal banking agencies' current exemption 
     authority and replace such authority with specific exemption 
     criteria similar to, but more restrictive than, that 
     applicable to the new grandfathering authority criteria 
     outlined above. Notwithstanding this more restrictive 
     exemption authority, the section includes a limited exception 
     for management official consignment programs established by 
     the Federal banking agencies.
       To date, the Federal banking agencies, generally, have used 
     their exemptive authority to assist depository institutions 
     that are particularly in need of management guidance and 
     expertise to operate in a safe and sound manner. The types of 
     institutions that have received case-by-case exemptions under 
     the agencies' previous exemptive authority include 
     institutions that are: (i) located in low-income or 
     economically depressed areas, (ii) owned by women or 
     minorities, (iii) new institutions that are just getting 
     organized, or (iv) troubled institutions that are in an 
     unsafe or unsound condition.
       The limited exception for management consignment programs 
     established by the Federal banking agencies will ensure that 
     the agencies may continue to grant case-by-case exemptions 
     from the prohibitions in the Interlocks Act consistent with 
     the objectives outlined above. Such exceptions may be granted 
     for up to two years, with one additional two year extension 
     at the option of the agency. Examples of exceptions 
     permissible under an agency management official consignment 
     program include improving the provision of credit to low- and 
     moderate-income areas, increasing the competitive position of 
     minority- and women-owned institutions, and strengthening he 
     management of newly chartered institutions or institutions 
     that are in an unsafe or unsound condition. The program would 
     be periodically monitored by each agency's Inspector General 
     to ensure it is not being used to evade the restrictions of 
     the Interlocks Act.
     Section 339. Adverse information about consumers
       This section amends the Fair Credit Reporting Act to 
     require a consumer reporting agency to make certain 
     disclosures when it maintains any information that has 
     resulted or may result in an ``adverse characterization'' of 
     a consumer because of one or more checks written on the 
     consumer's account. Specifically, the consumer reporting 
     agency must disclose to the consumer the dates, original 
     payees, and amount of any checks upon which any adverse 
     characterization of a consumer is based. This provision is 
     intended to address consumer complaints that some consumer 
     reporting agencies have not provided them with the basic 
     facts that led, for example, to an adverse characterization 
     that resulted in the denial of a check at a store or the 
     denial of an opportunity to open a deposit account. Without 
     knowing the basic facts upon which the adverse 
     characterization is based, a consumer cannot readily dispute 
     an incorrect characterization.
     Section 340. Simplified disclosures for existing depositors
       This section establishes alternative customer notice 
     procedures, in lieu of written customer acknowledgement, that 
     a depository institution is not Federally insured and that 
     customers may not get back their money if the institution 
     fails. The Conferees believe that the alternative notice 
     procedures are warranted for existing customers because many 
     such customers do not visit the institution and thus cannot 
     be asked to sign an acknowledgement in person, and some 
     customers who receive mailed notices and requests do not 
     respond. For existing depositors, institutions may either 
     obtain a written acknowledgement or comply with the 
     notification requirements specified in this section.
     Section 341. Feasibility study of data bank
       This section requires the Federal Financial Institutions 
     Examination Council to complete a study of the feasibility of 
     creating and maintaining a data bank for depository 
     institution reports. The study must be completed within 18 
     months of enactment of this Act.
     Section 342. Timely completion of CRA review
       Section 342 requires the Federal banking agencies to 
     complete their regulatory review of the Community 
     Reinvestment Act at the earliest practicable time.
     Section 343. Time limit on agency consideration of completed 
         applications
       This section requires each Federal banking agency to 
     complete action on an application to that agency within one 
     year of receipt of the completed application. The applicant 
     may waive the applicability of this section at any time. This 
     section is intended to apply prospectively only, and not to 
     any application that was filed with any Federal banking 
     agency prior to the date of enactment of this legislation.
     Section 344. Waiver of the right of rescission for certain 
         refinancing transactions
       Section 344 mandates a study by the Federal Reserve Board 
     regarding whether a waiver or modification of the right of 
     rescission with respect to loan transactions involving a 
     refinancing or consolidation of existing indebtedness by a 
     different creditor would benefit consumers. The provision 
     specifies that the Board must determine whether granting the 
     consumer the option to waive or modify the right of 
     rescission would benefit the consumer. In conducting the 
     study, the Board is to consult with consumers, 
     representatives of consumers, lenders, the Consumer Advisory 
     Council, and other interested parties.
     Section 345. Clarification of RESPA disclosure requirements
       Section 345 allows creditors to comply with the disclosure 
     requirement concerning assignment, transfer, or sale of 
     mortgages under the Real Estate Settlement Procedures Act 
     (RESPA) by providing a statement indicating that ``the person 
     making the loan has previously assigned, sold, or transferred 
     the servicing of federally related mortgage loans'' rather 
     than providing the more extensive disclosure currently 
     required under RESPA.
     Section 346. Notice procedures for bank holding companies to 
         seek approval to engage in certain activities
       Section 346 establishes a new notice procedure for bank 
     holding companies seeking to engage directly or through a 
     company in nonbanking activities permissible under section 
     4(c)(8) of the Bank Holding Company Act. This section 
     replaces the current application procedure with a 60-day 
     notice procedure, and permits proposals to be consummated 
     immediately if approved by the Federal Reserve Board at an 
     earlier time during this period. Section 346 also authorizes 
     the Board to prescribe shorter notice periods by regulation 
     for particular activities or transactions. This authority 
     would permit the Board to shorten or waive any notice in 
     cases, for example, involving the de novo conduct of routine 
     nonbanking activities previously approved by regulation.
       By substituting a notice procedure for the current 
     application requirement, section 346 is intended both to 
     simplify and expedite the approval process for nonbanking 
     activities and to reduce the information burden associated 
     with an application. Permitting the notice period to begin 
     upon the filing of a ``complete'' notice permits the Board to 
     obtain information needed to assess the statutory factors, 
     but should not unduly extend the process. Moreover, this 
     section limits the ability of the Board to extend the 
     processing period beyond the initial notice period.
       At the same time, section 346 preserves the Board's 
     authority to obtain any information that it needs to assess 
     fully the statutory factors raised by nonbanking proposals, 
     and authorizes the Board to object to any proposed 
     transaction or activity if the notificant neglects, fails, or 
     refuses to provide all the information required by the Board. 
     The Conferees intend that this section will not affect the 
     continuing ability of all interested parties, including 
     community groups and consumers, to provide comments on the 
     notice. Section 4(c)(8) requires the Board to consider 
     whether the activity will ``produce benefits to the public, 
     such as greater convenience, increased competition, or gains 
     in efficiency that outweight possible adverse effects.'' 
     Community groups and consumers may provide important 
     information for the board to consider in making such an 
     evaluation.
       This section is not intended to alter the Board's authority 
     to impose conditions on the conduct of nonbanking activities 
     or to change the standards applied by the Board in reviewing 
     proposed transactions or activities under section 4(c)(8).
     Section 347. Commercial mortgage related securities
       Section 347 amends the Secondary Mortgage Market 
     Enhancement Act of 1984 (SMMEA) by adding commercial real 
     estate to the definition of ``mortgage related security'' 
     under the Exchange Act. Section 347 confers upon commercial 
     mortgage related securities the benefits of SMMEA treatment 
     and removes certain impediments to trading and investing in 
     commercial real estate-mortgage-backed securities, including 
     eased margin requirements under the federal securities laws 
     and permission for depository institutions to purchase these 
     securities under conditions established by their regulators. 
     SMMEA's preemption of state legal investment and blue sky 
     laws would also apply to commercial mortgage related 
     securities. However, the states may override the legal 
     investment preemption by enacting a statute specifically 
     referring to this section within 7 years of the Act's 
     enactment.
       The Conferees note that Section 347 preserves the existing 
     authority of the Federal bank regulators to regulate bank 
     purchases of commercial mortgage related securities. As part 
     of their responsibility to ensure the safety and soundness of 
     insured depository institutions, the appropriate regulators 
     may limit or restrict bank purchases of investment 
     securities. This includes the authority to regulate insured 
     depository institutions' purchases for their own accounts for 
     mortgage related securities.
       Section 347 extends the definition of mortgage related 
     security to include certain loans secured by `one or more 
     parcels of real estate upon which is located one or more 
     commercial structure.' The Conferees wish to make clear that 
     this extended definition includes multi-family residential 
     loans secured by more than one parcel of real estate upon 
     which is located more than one structure.
     Section 348. Clarifying amendment relating to data collection
       Seciton 348 clarifies that compliance with section 7(a)(9) 
     of the Federal Deposit Insurance Act by the FDIC requires the 
     collection of actual and accurate information on the amount 
     of insured, uninsured and preferred deposits at each insured 
     depository institution. Estimates of this information are 
     inadequate and represent noncompliance with this legal 
     requirement. The FDIC is directed to begin immediate 
     compliance with section 7(a)(9), which has been in effect 
     since 1991. The FDIC is directed to minimize the regulatory 
     burden on well capitalized institutions in connection with 
     the reporting requirement; but in all cases, institutions are 
     obligated to report actual and accurate information on their 
     deposits, and not estimates.
     Section 349. Guidelines for Examinations
       Section 349 requires the FFIEC to issue guidelines 
     establishing standards regarding the adequacy of examinations 
     by State regulators for purposes of section 10(d) of the 
     Federal Deposit Insurance Act. Under section 10(d), a Federal 
     banking agency may conduct an annual on-site examination of 
     an institution in alternate 12 month periods, if the agency 
     determines that a state exam of that institution conducted 
     during the intervening period is adequate. The standards 
     developed by the FFICE are intended to be used solely at the 
     discretion of the Federal banking agencies.
     Section 350. Revising Regulatory Requirements for Transfers 
         of All Types of Assets with Recourse
       Section 350 addresses an anomalous provision of current 
     bank capital rules that requires more capital to be held for 
     some assets transferred with recourse than the amount at 
     risk. This creates an unnecessary disincentive to sell such 
     loans. This section requires all Federal banking agencies to 
     review their regulations and policies with respect to 
     transfers of assets with recourse, to consult with other 
     Federal banking agencies, and to issue new regulations within 
     180 days of the bill's date of enactment. After the 180 day 
     period, the amount of risk-based capital required to be held 
     by an insured depository institution with respect to an asset 
     transferred with recourse may not exceed the maximum amount 
     for recourse for which the institution is liable unless a 
     higher amount is determined to be necessary for that 
     institution's safety and soundness. Regulations issued by the 
     Federal banking agencies may permit institutions to hold less 
     capital than the amount at risk in appropriate situations. 
     This provision does not supersede the recourse provisions for 
     small business loans and leases with recourse under section 
     208(b).

                       TITLE IV--MONEY LAUNDERING


      BSA Reporting Requirements and Treasury's Exemption Program

       Section 402 of the Conference Report requires the Secretary 
     of the Treasury (Secretary) to seek to substantially reduce 
     the number of currency transaction reports (CTRs) filed by 
     depository institutions pursuant to the Bank Secrecy Act 
     (BSA). This reduction in CTR filings will be accomplished by 
     reforming the Department of the Treasury (Treasury) 
     procedures for exempting transactions between depository 
     institutions and their customers.
       The Conferees believe that reducing routine filings is 
     important because these reports are expensive for financial 
     institutions to file and for the Treasury to process, and 
     impede law enforcement by cluttering Treasury's CTR database. 
     Currently Treasury's database contains more than 50 million 
     CTRs, and the General Accounting Office (GAO) expects this 
     number to reach 92 million by 1996. However, IRS officials 
     estimate that CTR filings could be reduced by at least 30 
     percent by exempting routine transactions. This estimate is 
     the basis for the Conference Report's requirement that the 
     Secretary seek to reduce filings by 30 percent.
       Treasury currently has exemption procedures in place which 
     are designed to reduce routine filings, but even Treasury's 
     Assistant Secretary for Enforcement has characterized the 
     procedures as ``cumbersome and difficult to understand.'' Two 
     key factors have inhibited the widespread use of exemptions. 
     First, Treasury provides only guidelines regarding customer 
     exemptions. Banks that make wrong exemption determinations 
     based on these guidelines can be severely penalized. Last 
     year, two banks paid large penalties due to errors involving 
     exemptions. The current system does not provide banks with 
     strong incentives to exempt customers. One bank 
     representative informed the House Banking Committee during a 
     hearing that his institution once exempted more than 200 
     customers, but has since cut that list to only 17.
       Second, many banks have purchased automated CTR filing 
     systems. Under the current exemption procedures, these 
     systems make it more cost effective to file a report on all 
     transactions above $10,000 than to exempt a small number of 
     customers.
       The Conference Report establishes a two-tier system for 
     reforming exemption procedures. Mandatory exemptions shall be 
     designated by the Treasury and shall include transactions 
     which a depository institution has with (1) another 
     depository institution; (2) any U.S. government department or 
     agency, any State, or any political subdivision of a State; 
     (3) any entity established under Federal or State law that 
     exercises governmental authority on behalf of the Federal or 
     State government; or (4) any business or category of business 
     where the CTRs have little or no value for law enforcement 
     purposes. The Treasury is required to publish the mandatory 
     exemption list at least annually in the Federal Register.
       The discretionary exemption list shall include transactions 
     between a depository institution and its qualified business 
     customers. These customers must meet criteria which the 
     Secretary determines are sufficient to ensure that the 
     purposes of the BSA are carried out without requiring a 
     report with respect to such transactions. A discretionary 
     exemption shall be effective only after the depository 
     institution submits a list of its customers to the Treasury 
     and the Secretary approves the application of the exemption 
     to such customer. Depository institutions must annually 
     review their lists of customers and resubmit the lists for 
     the Secretary's approval. The Secretary is authorized to 
     phase in the discretionary exemption process over two years.
       The Conference Report also addresses the issue of banks' 
     liability relating to exemptions. Depository institutions 
     that have been granted either a mandatory or discretionary 
     exemption will receive a limited safe harbor from the penalty 
     provisions for failing to file a CTR.
       Implementing these provisions will make the CTR data base 
     more manageable and meaningful and will reduce the reporting 
     burden on depository institutions. Depository institutions, 
     however, will continue to be responsible for reporting on 
     suspicious activities where routine CTRs are no longer filed.
       Finally, the Conference Report directs the Secretary to 
     redesign the format of the CTRs to eliminate the need to 
     report information which has little or no law enforcement 
     purposes and to reduce the reporting burden on financial 
     institutions. The American Bankers Association testified 
     during a Senate Banking Committee hearing that:

       In 1993, the industry filed about 10.1 million currency 
     reports. The time for completing one of these reports runs 
     anywhere from 20 to 30 minutes. Based on those parameters, 
     financial institutions believe that it costs anywhere from 
     $3, which is the number we accept, to as high as $15, 
     depending on whether or not the filing is manual or done by 
     magnetic media.

     As mentioned above, there is also a cost associated with 
     processing the report once it arrives at Treasury. The 
     Conferees intend that the redesigned format will be less 
     costly to complete and process.


                  reporting of suspicious transactions

       Reporting suspicious currency transactions is a key 
     ingredient in the anti-money laundering effort. Permitting 
     depository institutions to exempt certain customers from 
     reporting requirements, as provided by section 402 of the 
     Conference Report, makes it even more critical that 
     depository institutions know their customers and report 
     suspicions of money laundering activity. One way for a 
     financial institution to do this is to check the box marked 
     ``suspicious transaction'' on the CTR form (these are 
     referred to as ``Suspicious CTRs''). Section 403 of the 
     Conference Report is intended to help law enforcement make 
     more effective use of these reports by establishing a central 
     collection point for them. Such a collection point is meant 
     to improve coordination among law enforcement agencies and 
     the agencies accountable for following up on each legitimate 
     report. The Conference Report also requires a report on the 
     disposition of Suspicious CTRs in order to give the Congress 
     an idea of how law enforcement uses these reports.
       The Conferees believe that Treasury has not capitalized on 
     the potential of suspicious transaction reporting. Reporting 
     suspicious transactions is not a requirement under Treasury's 
     regulations. Instead, it is covered in Administrative Ruling 
     88-1 dated June 22, 1988:

       Treasury encourages all financial institutions to be aware 
     of the possibility that their institutions may be misused by 
     those who intentionally structure transaction to evade the 
     reporting requirement or engage in transactions that may 
     involve illegal activity. (emphasis added)

       The Conferees have found that the use of central collection 
     for Suspicious CTRs would also be helpful to filers. 
     Currently, many financial institutions are asked to file the 
     same report with several different law enforcement agencies. 
     The institutions may also be asked to communicate the 
     information by telephone.
       The Conferees understand that there is some overlap between 
     the use of Suspicious CTRs and of Criminal Referral Forms 
     (CRF), which are employed to report many types of suspected 
     criminal activity at depository institutions. The GAO 
     addressed this issue in response to a question during a House 
     Banking Committee hearing:

       . . . there appears to be considerable duplication in the 
     system that could lead to a great deal of confusion . . . 
     [B]lanks can report suspected money laundering of currency 
     violations either with a Form 4789 (CTR) with the `suspicious 
     transactions' block checked, through a Criminal Referral 
     Form, or both. It is our understanding that a third form is 
     also being used for banks in the western part of the United 
     States. Finally, some banks are simply reporting their 
     suspicions on the phone to the local IRS office. Use of a 
     single form would not only reduce the duplication and 
     confusion, but could also lead to a better system of controls 
     to ensure that the information is acted on.

       The Conferees concur with GAO's recommendation that to the 
     extent practicable consistent with effective law enforcement, 
     a single form be established for bank and non-bank financial 
     institutions. Furthermore, if such a form is created, the 
     Conferees believe that a single collection point, similar to 
     the one mandated by this legislation for Suspicious CTRs, be 
     established to improve coordination among the law enforcement 
     agencies. The Conferees urge all law enforcement agencies to 
     enhance their cooperation in areas of overlapping 
     jurisdiction.


     identifying money laundering schemes during bank examinations

       Presently, bank examiners' anti-money laundering efforts 
     are primarily directed toward assuring compliance with BSA 
     reporting and recordkeeping requirements, although regulators 
     also are required to make a criminal referral when an 
     examiner discovers evidence of criminal behavior. The 
     Conference Report directs the Federal banking agencies to 
     enhance their training and examination procedures to improve 
     the identification of money laundering schemes.
       The Conferees note that the Federal Reserve has already 
     begun field testing procedures which direct examiners to look 
     for money laundering activities in a bank. For example, under 
     these procedures, the examiner is to take a sample of 
     individual or multiple cash transactions of less than 
     $10,000, and look for evidence of structured transactions, 
     evidence of ``concentration accounts'' (accounts which have 
     frequent cash deposits aggregating less than $10,000 on any 
     business day, and relatively few transfers of large amounts 
     out of the accounts, by check or wire), customers with 
     frequent cash transactions of less than $10,000 who have not 
     provided tax identification numbers, and customers with 
     frequent cash transactions who have provided either a foreign 
     address or post office box or have requested that the bank 
     hold monthly statements.
       In order to improve their methods of identifying money 
     laundering schemes, bank examiners will need up-to-date 
     information on common money laundering techniques. For this 
     reason, the Conference Report requires law enforcement to 
     regularly provide the Federal banking agencies with such 
     information. The Conferees intend law enforcement agencies to 
     share as much useful information as possible, consistent with 
     their clear responsibility to protect information about open 
     cases.
       The intent of this section is to make sure that examiners 
     are using the most effective means, through the examination 
     process, to identify and report on money laundering. The 
     section is not intended to make examiners into criminal 
     investigators. Its purpose is to focus supervisory efforts on 
     identifying money laundering schemes, rather than ensuring 
     that institutions are filling out forms correctly.


             negotiable instruments drawn on foreign banks

       Currently, the BSA requires a person who transports 
     currency or monetary instruments of greater than $10,000 into 
     or out of the United States to complete a Report of 
     International Transportation of Currency or Monetary 
     Instruments (CMIR). ``Monetary instruments'' is a term 
     defined by statute to include negotiable instruments (such as 
     checks, drafts, notes, and money orders) in bearer form. 
     Section 405 of the Conference Report expands the definition 
     of monetary instruments for the purpose of requiring CMIRs to 
     include checks, drafts, notes, money orders, and similar 
     instruments which are drawn on a foreign financial 
     institution, regardless of whether or not the instruments are 
     in bearer form.
       The Conferees' concern about these instruments stems from 
     reports by Treasury that they are frequently used in money 
     laundering schemes. At a House Banking Committee hearing in 
     July 1993, the Director of the Financial Crimes Enforcement 
     Network (FinCEN) specifically identified foreign bank drafts 
     as a money laundering tool. These drafts are U.S. dollar-
     denominated checks drawn by the foreign bank on its own 
     account at a U.S. bank and sold to customers like cashier's 
     checks. FinCEN has determined that a common money laundering 
     technique is to smuggle currency across the U.S. border and 
     present it to a bank in a foreign country which does not have 
     currency reporting requirements. The cash then can be 
     exchanged at the bank for a bank draft. Since no report is 
     currently required when the bank draft is brought into the 
     U.S. money launderers can successfully repatriate their 
     wealth without detection.
       Based on this information, FinCEN's Director recommended at 
     the July 1993 hearing that reporting requirements be imposed 
     on certain non-bearer foreign drawn instruments. Assistant 
     Secretary of the Treasury Ronald Noble reaffirmed this 
     position at a House Subcommittee on Financial Institutions 
     hearing in October 1993. The Customs Service, which would be 
     responsible for monitoring compliance with this requirement, 
     also agrees. In response to a letter from Chairman Gonzalez, 
     Customs stated that it sought legislation which would 
     ``define foreign issued bank drafts drawn on U.S. accounts as 
     reportable monetary instruments regardless of whether they 
     are in bearer form or not. These bank drafts would be subject 
     to filing under CMIR provisions.''
       It is the Conferees' intent that the Secretary avoid 
     unnecessary burdens on routine financial transactions of 
     foreign financial institutions. Specifically, the Conferees 
     intend that an exemption should be prescribed with regard to 
     CMIRs when the monetary instruments cross the border as part 
     of the interbank collection and reconciliation process. The 
     Conferees also believe that Treasury, in adopting regulations 
     under this section, should consider whether a foreign country 
     is participating in the Financial Action Task Force (FATF), 
     has implemented the FATF's recommendations for combatting 
     money laundering, and has appropriate currency record-keeping 
     or reporting requirements.


              imposition of civil penalties under the bsa

       The failure to file reports required by the BSA can result 
     in criminal and civil penalties, depending on the nature of 
     the violation. Criminal investigations are the responsibility 
     of IRS's Criminal Investigation Division. Civil penalties are 
     assessed by the Department of the Treasury's Office of 
     Financial Enforcement (OFE). Civil penalties can range from 
     $500 for negligent violations and from $25,000 to $100,000 
     per willful violation.
       OFE currently receives civil penalty referrals from Federal 
     banking agencies, the IRS, financial institutions and others. 
     OFE sends each referral to IRS's Criminal Investigative 
     Division to determine whether it should be handled as a 
     criminal investigation or whether such an investigation is 
     already underway. Once OFE receives clearances from IRS to 
     pursue a civil penalty case, the referral is categorized as 
     formal and assigned to a BSA specialist for processing. The 
     Assistant Secretary for Enforcement makes the final decision 
     to assess a penalty.
       In the past, OFE did not process BSA civil penalty cases in 
     a timely manner. In some instances, OFE was so slow that 
     cases had to be closed because the statute of limitations 
     expired. From 1985-1991, case processing times averaged 21 
     months, according to the GAO. While OFE's record has improved 
     substantially in the last few years, the Conferees believe 
     that it would be more efficient to allow the Federal banking 
     agencies to impose civil penalties directly.
       Section 406 of the Conference Report requires the Secretary 
     to delegate any authority to assess a civil money penalty on 
     depository institutions under the BSA to the appropriate 
     Federal banking agencies, subject to any term or condition 
     imposed by the Secretary. Because these agencies already 
     examine depository institutions for BSA compliance, the 
     authority to impose penalties flows naturally from their 
     current responsibilities. Furthermore, the Federal banking 
     agencies currently have penalty authority and experience 
     under other banking laws. OFE would still be able to oversee 
     the process and ensure that penalties are consistently 
     imposed. OFE would also continue to promulgate the 
     regulations under which any penalties would be imposed.
       The Assistant Secretary of the Treasury for Enforcement 
     testified before the House Subcommittee on Financial 
     Institutions that ``serious consideration should be given to 
     delegation of penalty assessment not only to the Federal 
     banking agencies, but also to IRS for the non-bank financial 
     institutions and to Customs for CMIR violators.'' The 
     Conferees fully support any additional delegations of civil 
     penalty enforcement authority if appropriate for Treasury to 
     do so, and if the result is a more efficient system.


                           money transmitters

       Sections 407 and 408 of the Conference Report address the 
     issue of money laundering at money transmitters. Money 
     transmitters are businesses other than depository 
     institutions that provide check cashing, currency exchange, 
     money transmitting or remittance services, or issue or 
     redeemed money orders, travelers' checks, or other similar 
     instruments. The Conferees believe that such businesses are 
     particularly vulnerable to money laundering schemes because 
     their level of BSA compliance is generally lower. At a 
     hearing before the House Subcommittee on Financial 
     Institutions, the Assistant Secretary of the Treasury for 
     Enforcement echoed this view:
       It is indisputable that as banks have become more active in 
     preventing and detection of money laundering, money 
     launderers have turned in droves to the financial services 
     offered by a variety of [money transmitters].
       The IRS' Examination Division is responsible for 
     identifying money transmitters, educating them about the 
     reporting requirements, and conducting compliance checks to 
     assess and enforce compliance with the BSA. However, there 
     are simply not enough IRS agents to supervise and identify 
     the tens of thousands of money transmitters nationwide.
       Section 407 of the Conference Report expresses the sense of 
     the Congress that states should develop and adopt uniform 
     laws to license and regulate money transmitting businesses. 
     The Conferees intend for these laws to cover only money 
     transmitting businesses outside of the regulated financial 
     sector. Therefore, section 407 is not meant to cover persons 
     or entities registered with, and regulated or examined by, 
     the Securities and Exchange Commission or the Commodity 
     Futures Trading Commission.
       Licensing and regulation of money transmitters have proven 
     to be effective anti-money laundering weapons in some states. 
     For example, during the House Banking Committee's July 1993 
     field hearing in San Antonio, Texas, the Texas Attorney 
     General testified that his state's enactment of a licensing 
     requirement on currency exchanges had significantly curtailed 
     those businesses' money laundering activity. In fact many of 
     the currency exchanges, known as casas de cambio along the 
     border, simply went out of business in order to avoid the 
     scrutiny of the licensing process. In testimony before the 
     Committee, the Assistant Secretary of the Treasury expressed 
     full agreement with Congress' recommendation to the states:
       State licensing and regulation [of money transmitters] is 
     essential to insure that these businesses are run to offer 
     legitimate financial services and that they not be purchased 
     or exploited for illegal purposes.
       The House version of the Money Laundering Suppression Act 
     of 1994 (H.R. 3235) included a provision reflecting Congress' 
     sense that the model statute should require an appropriate 
     State agency to review and approve the fee structure of 
     institutions covered by the statute before granting those 
     institutions a license. The Senate amendment did not include 
     any reference to the fees charged by these businesses. The 
     Conference Report replaces the House language with a 
     provision reflecting Congress' sense that the model statute 
     should require the businesses covered by the Statute to 
     display their fee structure at each business location and to 
     disclose the fee structure to an appropriate state agency.
       Section 408 of the Conference Report requires the operators 
     of money transmitting businesses to register with the 
     Secretary. This provision was strongly supported by the 
     Department of the Treasury in testimony before the Senate 
     Banking Committee. The Conferees intend for the registration 
     requirement to apply only to money transmitting businesses 
     outside of the regulated financial sector. Therefore, section 
     408 does not require the registration of persons or entities 
     registered with, and regulated or examined by, the Securities 
     and Exchange Commission or the Commodity Futures Trading 
     Commission.
       The purpose of the registration requirements is to promote 
     effective law enforcement by the Secretary and to encourage 
     business cooperation in that effort. The Conferees also 
     intend that the registration requirement be used as a way to 
     educate money transmitters about their responsibilities under 
     the BSA. To this end, the Conferees strongly urge the 
     Secretary to include information on SBA compliance as well as 
     the civil and criminal penalties for violating BSA 
     requirements in the registration packets sent to money 
     transmitters. The registration process should include an 
     acknowledgement by the owner of the business that he or she 
     has read and understands the information.
       The Conference Report also contains a provision authorizing 
     the Secretary to prescribe regulations that would require 
     money transmitting businesses to maintain lists containing 
     the names and addresses of their agents and make those lists 
     available to appropriate law enforcement agencies.
       Section 408 contains both civil and criminal penalties for 
     violating the registration requirement. Both the House and 
     Senate versions of the Money Laundering Suppression Act had 
     also contained a civil forfeiture provision. The Conferees 
     deleted the civil forfeiture provision so that the Attorney 
     General may complete a comprehensive review of civil 
     forfeiture policy.
       The Conferees recognize that the contents of both the 
     registration of a money transmitting business and the agent 
     list maintained by the business will include privileged and 
     confidential trade secrets, commercial, and financial 
     information. To assist the Secretary in the enforcement of 
     laws, yet not harm the competitive position of registrants by 
     exposing the registration and list information to 
     competitors, the Conferees intend that confidential 
     proprietary, or trade secret information provided by 
     registrants under section 408 shall only be disclosed subject 
     to applicable law.
       The Conferees also recognize that some of the data to be 
     contained in the registrations will have legitimate uses 
     outside of law enforcement. It is the Conferees' intent that 
     the Secretary make such information available to the public 
     in a manner which balances the need to protect confidential 
     business information and the need of the public to have 
     access to information about the businesses which serve it. 
     Accordingly, the Conferees expect the Secretary to make such 
     information available to the public in as much detail as 
     possible without revealing confidential information.
       The Conference Report also authorizes the Secretary to 
     prescribe regulations establishing a threshold beyond which 
     agents are treated as ``money transmitting businesses'' for 
     purposes of applying the registration requirements to such 
     agents. The intent of the Conferees is to eliminate the need 
     for all agents of money transmitting businesses to register 
     with the Secretary. Such massive registration of thousands of 
     agents would only create another needless and costly 
     administrative burden. This legislation is designed to reduce 
     unnecessary paperwork, not create additional administrative 
     burdens for law enforcement.


                             indian casinos

       The House version of the Money Laundering Suppression Act 
     of 1994 expanded the definition of a financial institution 
     subject to BSA reporting requirements to include casinos or 
     gaming establishments with an annual gaming revenue of more 
     than $1,000,000 which (1) are licensed as a casino or gaming 
     establishment under the laws of any State or any political 
     subdivision of any State; or (2) is an Indian gaming 
     operation conducted under or pursuant to the Indian Gaming 
     Regulatory Act, other than an operation which is limited to 
     class I gaming. The Conferees adopted this provision.
       The Conferees believe this expansion of the definition of 
     financial institution is necessary to eliminate confusion 
     about which currency reporting system applies to Indian 
     casinos. The confusion originated in 1988, when Congress 
     enacted the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et 
     seq. This Act governs gaming operations conducted on Indian 
     lands. Section 20(d)(1) of the Act provides that certain 
     provisions of the Internal Revenue Code, including section 
     6050I, shall apply to Indian gaming operations. As a result 
     of the Act, Indian casinos are presently subject only to the 
     limited currency reporting requirements under Section 6050I. 
     In comparison, the BSA mandates a comprehensive currency 
     reporting and detailed recordkeeping system with numerous 
     anti-money laundering safeguards.
       IRS recommended that Congress adopt a statutory amendment 
     to the BSA to specify that Indian Gaming operations are 
     subject to that law's requirements. IRS stated that the 
     comprehensive nature of the BSA would provide additional 
     safeguards to the tribes, while providing law enforcement the 
     paper trail necessary to conduct financial investigations.


                       bsa exemptions for states

       The BSA provides the Secretary with authority to 
     ``prescribe an appropriate exemption'' from its requirements 
     (31 U.S.C. 5318(a)(5)). In 1985, when Treasury established 
     regulations for casinos to comply with the BSA requirements, 
     the Secretary used this authority to grant an exemption to 
     casinos supervised by Nevada's Gaming Control Board (GCB). 
     This agreement was partly based on the GCB's pledge to 
     establish reporting and recordkeeping requirements similar to 
     those found in the BSA. Other state agencies have reportedly 
     expressed interest in a similar exemption.
       The House version of the Money Laundering Suppression Act 
     of 1994 contained a section which would have revoked all 
     exemptions granted to a State or political subdivision of a 
     State on behalf of any financial institution that would 
     otherwise be subject to the BSA. Furthermore, the House 
     version would have prohibited the granting of this type of 
     exemption in the future. The Conferees agreed to delete the 
     House language and replace it with a section that explicitly 
     permits the Secretary to exempt classes of transactions 
     within a State if the Secretary determines that those 
     transactions are subject to State requirements that are 
     substantially similar to BSA requirements, and that there is 
     adequate provision for enforcement of such requirements. This 
     provision does not limit Treasury's broad authority under 
     5318(a)(5) to grant exemptions to BSA requirements or repeal 
     any existing exemption under that section. However, the 
     Conferees do not expect the Secretary to grant an exemption 
     to a class of transactions within a State if that State's 
     requirements are not substantially similar to those of the 
     BSA.


 Criminal and Civil Penalty for Structuring Domestic and International 
                              Transactions

       Section 410 of the Conference Report was adopted in order 
     to correct the recent Supreme Court holding in Ratzlaf v. 
     U.S., U.S. Supreme Court No. 92-1196 (January 11, 1994). That 
     case held that the government must prove not only that the 
     defendant acted with the purpose of evading a financial 
     institution's reporting requirement under 31 U.S.C. 5324, but 
     also that the defendant knew his or her conduct to be 
     unlawful. The legislation amends 31 U.S.C. 5324 by adding a 
     criminal penalty and excepting section 5324 from the current 
     criminal penalty provision found in section 5322 of title 31. 
     Thus, a defendant is subject to the criminal penalty if he or 
     she engaged in the actions described in section 5324 for the 
     purpose of the evading the reporting requirement of section 
     5313(a), 5316, or 5325 of title 31 or the regulations 
     prescribed thereunder. This section restores the clear 
     Congressional intent that a defendant need only have the 
     intent to evade the reporting requirement as the sufficient 
     mens rea for the offense. The prosecution would need to prove 
     that there was an intent to evade the reporting requirement, 
     but would not need to prove that the defendant knew that 
     structuring was illegal. However, a person who innocently or 
     inadvertently structures or otherwise violates section 5324 
     would not be criminally liable.
       The civil penalty provisions of section 5321(a)(4)(A) of 
     title 31 are similarly amended so that civil penalties could 
     be imposed on persons who structure transactions with an 
     intent to evade reporting requirements, without a showing 
     that such person knew such structuring was unlawful.


                            cashier's checks

       The BSA currently does not require any reporting or 
     recordkeeping requirements for cashier's checks unless the 
     checks are purchased with currency. However, the Conferees 
     believe that these checks can be a very useful tool in a 
     money laundering scheme. For example, after a launderer 
     smurfs (i.e., structures his deposits in amounts less than 
     $10,000) his currency into a bank account, he or she can ask 
     the bank to issue a cashier's check for the amount in the 
     account. Since the cashier's check is actually drawn on the 
     bank's account, it will be difficult for an investigator to 
     make a connection between the cashier's check and the 
     withdrawal from the launderer's account.
       The Conference Report requires the Comptroller General to 
     study the extent to which cashier's checks are vulnerable to 
     money laundering schemes and the extent to which additional 
     recordkeeping requirements should be imposed on financial 
     institutions that issue cashier's checks. The Conferees 
     intend for the GAO to specifically address the issue of 
     whether it would be useful to require banks to make copies of 
     cashier's checks retrievable by customer name or account 
     rather than just chronologically as is generally the 
     practice. The Conferees also intend that GAO determine 
     whether the recordkeeping requirements scheduled to be 
     imposed on wire transfers may also be applicable for 
     cashier's checks. Both wire transfers and cashier's checks 
     can be used to disguise the illegitimate source of the money.

                        TITLE V--FLOOD INSURANCE

       The conferees believe this legislation contains important 
     reforms to improve the financial condition of the National 
     Flood Insurance Program (NFIP). First, this legislation will 
     improve compliance with the mandatory purchase requirements 
     of the NFIP by lenders and secondary market purchasers. 
     Improved program compliance will increase participation 
     nationwide by those individuals who have mortgaged homes or 
     businesses in special flood hazard areas but have not 
     purchased or maintained flood insurance coverage. Increasing 
     compliance and participation in the NFIP will provide added 
     income to the insurance fund and decrease the financial 
     impact of flooding to the federal government, to taxpayers, 
     and to citizens who are victims of floods.
       Next, this legislation creates a new supplementary 
     mitigation insurance program intended to reduce the number of 
     properties in the program that do not comply with current 
     flood protection standards. This will protect the NFIP by 
     reducing claims over time. This expanded coverage will be 
     used to rebuild repetitive and substantial loss properties up 
     to current building code standards. This will mean less risk 
     to the fund because the structure will be built up to a 
     building code designed to provide less risk of future flood 
     damage. In addition, the policy holder who rebuilds up to 
     code will be required to pay actuarial premiums to the flood 
     insurance fund.
       Also, this legislation codifies the current Community 
     Rating System Program (CRS) administered by FEMA. The CRS 
     program provides incentives, in the form of reduced premiums, 
     to communities who voluntarily adopt and enforce measures 
     that reduce the risk of flood damage that exceed the current 
     program criteria. If a community has utilized grants from the 
     new mitigation assistance grant program, then reductions in 
     premiums to the community will be phased in as those grants 
     are repaid to the mitigation grant program.
       This legislation creates mitigation assistance grants to 
     states and communities. These grants will be used for a wide 
     variety of eligible mitigation activities in order to reduce 
     the risk of flooding and therefore to reduce exposure to 
     flood damage of insured structures. Mitigation projects must 
     be cost-beneficial.
       This legislation also requires a study on the economic 
     impact of mapping erosion hazard areas: on the value of 
     residential and commercial properties, on changes in 
     community tax revenues, on employment, and existing and 
     future economic development. Other areas to be studied 
     include: the economic impact of identified erosion hazard 
     areas with regard to the denial of flood insurance; the 
     establishment of actuarial rates in erosion hazard areas; 
     determining the costs and benefits of mapping erosion hazard 
     areas; the economic effect of previous and current denials of 
     flood insurance; the economic impact of state and community 
     activities undertaken to reduce flood-related damage; and 
     determining the amount of flood insurance claims that are 
     attributable to erosion.

           Subtitle B--Compliance and Increased Participation

       The compliance provisions of Subtitle B are intended by the 
     Conferees to ensure that those who should have flood 
     insurance, pursuant to the mandatory purchase requirements of 
     existing law, obtain it and maintain it. Increasing 
     compliance and participation in the NFIP will provide added 
     income to the insurance fund and decrease the financial 
     impact of flooding to the federal government, and to citizens 
     who are victims of floods.
     Section 521. Nonwaiver of flood purchase requirements of 
         recipients of Federal disaster assistance
       The Conference Committee is concerned that federal agencies 
     have not fully implemented the mandatory purchase requirement 
     in the wake of flooding disasters. In some instances, federal 
     agencies providing relief in the wake of natural disasters 
     have waived the requirement that uninsured recipients 
     purchase flood insurance as a condition for obtaining 
     disaster assistance to repair or rebuild structures damaged 
     by flooding. Some recipients of federal disaster assistance 
     continue to remain uninsured, thereby increasing the chances 
     they will need federal disaster assistance, yet again, in the 
     future. It is the Committee's intent that the purchase 
     requirement not be waived for any purpose. Disaster 
     assistance for temporary housing and for purposes other than 
     repairing or rebuilding structures are not affected by this 
     provision.
     Section 522. Expanded flood insurance purchase requirements
       The Committee intends that compliance with the mandatory 
     purchase requirement will be the responsibility of the 
     primary lender and the secondary market purchaser, if any 
     (the Federal National Mortgage Association, the Federal Home 
     Loan Mortgage Corporation, and the Government National 
     Mortgage Association).
       The 1973 Act provides that flood insurance must be secured 
     at the time of origination, extension or renewal of a loan 
     secured by improved real estate or a mobile home in a special 
     flood hazard area that is made by a federal agency or by a 
     federally-regulated, -supervised or -insured financial 
     institution. This section clarifies the law to specify that 
     flood insurance is required for the life of the loan so long 
     as the underlying collateral is designated or determined to 
     be in a special flood hazard area. If a flood map revision 
     determines that a property is no longer in a special flood 
     hazard area, flood insurance is no longer required. It is the 
     Committee's view that flood insurance is required under 
     existing law if a re-mapping or review of the flood 
     designation subsequent to loan origination, extension, or 
     renewal results in the underlying collateral being designated 
     as located within a special flood hazard area. Although 
     disputed by some local officials, the Committee further 
     believes that current law requires lenders to maintain 
     coverage for the term of the loan. This section establishes a 
     mortgagor's or mortgage servicer's obligation to require the 
     purchase of flood insurance at origination, or at any time 
     thereafter during the life of the loan when the institution 
     determines that the improved property or mobile home is 
     located in an area having special flood hazards.
       For regulated lending institutions, which includes any 
     bank, savings and loan association, credit union, or similar 
     institution supervised, regulated or insured by a federal 
     entity for lending regulation, the Committee expects the 
     Federal Deposit Insurance Corporation, the Federal Reserve, 
     the Comptroller of the Currency, the Office of Thrift 
     Supervision, and the National Credit Union Administration, as 
     appropriate, to develop regulations which direct regulated 
     institutions not to make, increase, extend, or renew any loan 
     on a structure located in a special flood hazard area unless 
     flood insurance is purchased and maintained for the term of 
     the loan. Refinancing an existing loan should be considered 
     as the making of a new loan for purposes of the mandatory 
     flood insurance purchase requirements.
       Federal agency lenders, which include any federal agency 
     that makes direct loans secured by improved real estate, must 
     issue similar regulations.
       It is the view of the Conference Committee that the making, 
     increasing, extending or renewing of a loan serves as a 
     ``tripwire'' of sorts for compliance with the flood insurance 
     purchase requirements. In the modern mortgage marketplace, 
     this approach makes the compliance by lenders increasingly 
     more likely, as borrowers obtain new loans on existing 
     structures, for example, or refinance existing loans. At each 
     designated ``tripwire'' in the mortgage process, it is the 
     Committee's intent that the lender ensure that flood 
     insurance is purchased and maintained, where required.
       The Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation are required to implement 
     procedures reasonably designed to ensure that loans required 
     to have flood insurance at the time of origination or at any 
     time during the time of the mortgage are covered by flood 
     insurance for the term of the loan.
       This section provides an exemption from the mandatory 
     purchase requirements for any small loan that is made for 
     $5,000 or less with a repayment term of one year or less.
     Section 523. Escrow of flood insurance payments
       Section 523 requires the escrowing of flood insurance 
     premiums if the private lender, federal agency lender, or 
     other servicer of a mortgage is required to maintain an 
     escrow account for the loan for any other purpose. The 
     Committee is mindful that a major reason for the lack of 
     compliance with the NFIP is that many homeowners, believing 
     they will not be flooded, simply stop paying premiums on 
     their flood insurance policies. Requiring lenders to escrow 
     for flood insurance premiums will significantly improve 
     participation in the NFIP. At the same time, the Conference 
     Committee decided to limit this escrow requirement to 
     instances where a lender establishes an escrow account for a 
     loan for another purpose. Consequently, if a lender 
     terminates an escrow account for a loan, the lender is no 
     longer required to escrow flood insurance premiums. This 
     policy will balance the need to increase participation with 
     the Conference Committee's desire not to establish 
     significant new burdens on lenders and borrowers.
     Section 524. Placement of flood insurance by lenders
       Section 524 requires lenders and servicers to force-place 
     insurance which has not been purchased by a borrower who is 
     required by law to purchase such insurance. If a lender or 
     servicer determines that insurance must be purchased, the 
     borrower must be notified accordingly. If the borrower fails 
     to purchase insurance within 45 days, the lender shall do so 
     on behalf of the borrower. This provision is intended to 
     ensure that properties in special flood hazard areas are 
     covered by flood insurance, regardless of whether the area in 
     which the property is located is designated by the Director 
     of FEMA as a special flood hazard area before or after the 
     mortgage is originated. The most common and practical 
     situation in which this will occur is when a community or 
     area is re-mapped by FEMA, with the consequences that 
     properties which were not located in a special flood hazard 
     area at the time the mortgage was made are later identified, 
     as a result of re-mapping, to be in a special flood hazard 
     area.
       This requirement, which is effective for all loans 
     outstanding on or after the date of enactment of the 
     legislation, recognizes existing servicers as one of several 
     components in a renewed effort to ensure compliance with 
     purchase and maintenance of federal flood insurance. The 
     Committee has found that while some lenders purchase flood 
     insurance at the time of loan origination, this authority has 
     been used sparingly because of concerns raised by lenders 
     about its validity.
       It is the Committee's further understanding that there are 
     questions with regard to whether lending institutions have 
     the authority to force-place under the Flood Disaster 
     Protection Act of 1973 as it existed prior to the adoption of 
     this Act. Congress intended lenders to have such authority 
     under 1973 Act. That earlier Act was founded on the 
     understanding that the Director of FEMA would engage in 
     continual re-mapping as flood hazards were identified. 
     Because the effectiveness of federal flood insurance was and 
     is dependent upon the authority of lenders to require 
     borrowers to obtain necessary flood insurance, the coverage 
     of the borrower and the borrower's property from flood perils 
     is just as important whether the flood zone is identified 
     before or after the borrower has obtained a mortgage on the 
     property.
       Therefore, this provision reinforces the authority of 
     lenders and servicers to require a borrower whose improved 
     property is in a special flood hazard area to obtain 
     insurance at the borrower's expense at any time during the 
     loan, regardless of when the property is determined to be in 
     a special flood hazard area. This legislation makes it clear 
     that the institution may procure such insurance at the 
     borrower's expense if the borrower fails to obtain insurance 
     after due notice. The term ``servicer'' is broadly defined 
     and is derived from the Real Estate Settlement Procedures Act 
     (RESPA), and is intended to grant authority to those 
     institutions that are covered by the RESPA definition.
       It is the intention of the Conference Committee that the 
     length of time specified in a letter from the Director 
     resolving a contested determination reflect the likelihood 
     that the area in question will be scheduled for imminent re-
     mapping. Thus, the effective duration of a letter pertaining 
     to an area that has recently been re-mapped will be 
     substantially longer than for one which pertains to an area 
     that is scheduled to be re-mapped in the near future.
       It is the further intention of the Conference Committee 
     that the period under which the Director is required to reply 
     to a contested determination applies only to those requests 
     that are made in connection with the origination of a loan 
     and not a re-mapping or map revisions.
     Section 525. Penalties for failure to require flood insurance 
         or notify
       The penalty provided in this section for a pattern or 
     practice of noncompliance with flood insurance purchase or 
     notification requirements is $350 per loan, up to $100,000 
     annually for any single federally regulated or insured 
     lending institution, or GSE.
       Penalties may be assessed by the appropriate federal entity 
     for lending regulation, in the case of regulated lending 
     institutions or by the Director of the Office of Federal 
     Housing Enterprise Oversight with respect to GSE's. Penalties 
     should not be assessed unless a pattern or practice of 
     noncompliance is found by the regulator.
       To remedy patterns of noncompliance, the federal entities 
     for lending regulation, in the case of regulated lending 
     institutions, have broad authority to take such remedial 
     actions as are necessary if an institution has engaged in a 
     pattern or practice of noncompliance or has not demonstrated 
     measurable improvement in compliance following assessment of 
     civil money penalties.
       Penalties assessed under this section will be deposited in 
     the Mitigation Fund created by the Act.
     Section 527. Notice requirements
       Section 527's notice requirements are intended to increase 
     compliance with flood insurance purchase requirements. One of 
     the reasons for the low rate of compliance may be that 
     parties to the mortgage process--including borrowers, 
     lenders, lessees, servicers, and purchasers--often are not 
     sufficiently aware that a property that is security for a 
     mortgage is in a special flood hazard area. Section 627 
     establishes notice requirements that are intended to insure 
     that relevant parties are aware of their responsibilities 
     concerning obtaining and maintaining flood insurance.
     Section 528. Standard hazard determination forms
       The Conferees recognize and intend that the guarantees for 
     third party information in this provision are adequate to 
     protect the interests of the borrower and to ensure the 
     quality of the information provided by the third party. Since 
     the lender is relying on the guarantee in order to ensure 
     compliance with the mandatory flood insurance purchase 
     requirements, lenders have ample incentives to ensure that 
     the guarantees are adequate to protect the lender.

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

     Section 541. Community Rating System and Incentives For 
         Community Floodplain Management
       The Conferees further intend that the Director will phase 
     in the recovery of grants for mitigation activities so as to 
     encourage, and not discourage, the early implementation of 
     mitigation consistent with the need to maintain the strong 
     financial condition of the Fund.

           Subtitle D--Mitigation of Flood and Erosion Risks

     Section 553. State and community mitigation assistance
       The Committee intends that the FIA will make states and 
     communities aware of the mitigation grant program and provide 
     education and encouragement for them to participate in the 
     program.
       Eligible mitigation activities described in the Act are not 
     intended to be an exhaustive list. The Director of FEMA 
     should be flexible in funding various activities and take 
     into consideration regional differences, specific flooding 
     problems confronting a community, and the past history of 
     flood events.
       However, in order to be eligible for mitigation assistance, 
     activities must be technically feasible and cost-beneficial. 
     In order to ensure that the limited resources for mitigation 
     activities are used in a manner that maximizes the benefits 
     to the Fund, the Director must fund those activities that are 
     cost-beneficial to the Fund.
       Activities that may be worthy of funding include minor 
     physical mitigation efforts which do not duplicate the flood 
     prevention activities of other federal agencies and which 
     will lessen the frequency or severity of flooding and 
     decrease predicted flood damages. Minor physical changes can 
     reduce flooding, and losses, for whole groups of homes, and 
     even whole neighborhoods. In many cases it may be far more 
     cost-effective for the Mitigation Fund to pay for minor 
     physical changes which will protect a group of homes or a 
     neighborhood, than to pay to move or elevate each and every 
     home in that area. Examples of such minor physical mitigation 
     efforts would include: flood-proofing sewers; grading to 
     direct flood waters away from homes; and installing or 
     improving of flood gates, retention ponds, drain pipes, and 
     pumping stations. Specifically excluded from the list of 
     eligible mitigation activities are major flood control 
     activities funded by other agencies like constructing dikes, 
     levees, seawalls, groins and jetties unless they are deemed 
     to be among the most cost-effective means of reducing risk to 
     the Fund.
       The Committee intends that the activities of the Flooded 
     Property Purchased and Loan Program (Section 1362 of the 
     National Flood Insurance Act of 1968) a program which is 
     abolished under this Act, should continue to be funded 
     through mitigation assistance grants which this section 
     creates.
       The Conferees believe that the effectiveness of the current 
     Section 1362 program has been impeded by the Director's 
     inability, in connection with pending buyouts, to provide 
     communities with a list of policyholders within 30 days of a 
     request. Therefore, the Committee believes it is reasonable 
     to expect the FIA to provide this information within 30 days. 
     In addition, once a local community has submitted a buyout 
     request, the Committee believes that the FIA can evaluate the 
     proposal and if approved, begin appraising property within 90 
     days.
       No mitigation grant can be made to a state or community 
     without an approved mitigation plan. The FIA may provide 
     technical assistance as requested and make such suggestions 
     to the plan as to maximize the effect of flood reduction. The 
     legislation requires that mitigation activities be 
     technically feasible and cost-effective. More importantly, 
     the legislation requires the Director to approve only those 
     plans that are the most cost-beneficial to the Fund. The 
     National Flood Mitigation Fund may make grants to states and 
     communities for mitigation activities that benefit uninsured 
     properties. The Committee further recognizes that currently 
     uninsured properties that are floodproofed or elevated will 
     remain subject to the mandatory purchase requirements in the 
     future.
       The bill specifies the basic elements of a mitigation plan. 
     The plan of a community must be adopted by the appropriate 
     public body after at least one public hearing. The Committee 
     intends that the citizens of a community by involved in the 
     development of a mitigation plan. FEMA must coordinate the 
     program and have the final approval authority for mitigation 
     plans. Federal, state, and local officials and private 
     citizens are encouraged to participate in the program and to 
     be receptive to new approaches in reducing flood-related 
     losses.
       The conferees are further aware that new technologies may 
     provide feasible means of floodproofing residential 
     structures in flood-prone areas. The conferees expect FEMA to 
     be accommodating to the testing of such technologies, so long 
     as such testing is performed using uninhabited structures 
     that are dismantled after testing is complete.
       To the extent such technologies are shown to be equivalent 
     in effect to permanent elevation of a structure through use 
     of pilings or technologies permitted under current 
     regulations and practices, the conferees expect FEMA to 
     consider making flood insurance available for such structures 
     under the same terms and conditions as if structures were 
     permanently elevated. In determining if a technology is 
     equivalent in effect to permanent elevation of a structure, 
     the conferees expect that FEMA will review the extent to 
     which the new technology would provide levels of protection 
     of the structure from flood damage and levels of protection 
     for personal safety that are equivalent to levels provided by 
     permanent structural elevation through existing technologies, 
     as well as to the extent which levels of active human 
     maintenance involved in the new technology are equivalent to 
     those involved in permanent elevation of the structure 
     through existing technologies.
       The Conferees intend that planning assistance monies 
     provided in this section for development of mitigation plans 
     should be used to facilitate various aspects of the planning 
     process, including evaluation of alternatives. However, the 
     Conferees intend that while the identification of the level 
     of risk to which specific structures are exposed may be 
     included, these funds are not be used to develop new or 
     improved floodplain mapping.
     Section 555. Additional coverage for compliance with land use 
         and control measures
       It is the intent of the Committee that the Director provide 
     insurance coverage to cover the cost to repair and 
     reconstruct repetitive loss structures and substantially 
     damaged insured buildings, or otherwise mitigate future 
     hazards to those buildings to comply, with local building 
     codes and floodplain management.
       The Committee recognizes and appreciates the benefits of 
     mitigation insurance, and believes that this concept must be 
     embraced to ensure that flood risks are reduced and removed 
     when it is most cost-beneficial to do so. The Conferees 
     further recognize that inclusion of mitigation insurance in 
     the standard flood insurance policy is an excellent mechanism 
     to deliver funding to individuals to bring their flood-
     damaged structures into compliance with floodplain management 
     standards.
       This mandatory coverage will have a surcharge cap of $75. 
     This cap will not be subject to the 10% risk classification 
     cap established in this Act.

                 Subtitle E--Flood Insurance Task Force

     Section 562. Task Force on natural and beneficial functions 
         of the floodplain
       The Committee intends that the Director of FEMA, the 
     Undersecretary of Commerce for Oceans and Atmosphere, the 
     Director of the United States Fish and Wildlife Service, and 
     the Administrator of the Environmental Protection Agency, and 
     the Secretary of the Army, shall serve on a Task Force on the 
     National and Beneficial Functions of the Floodplain, which 
     shall identify the natural and beneficial functions that 
     reduce flood losses and make recommendations on how the 
     nation can further reduce flood losses through the protection 
     of the natural and beneficial functions of the floodplain.
       In addition, the Conferees expect that the study will 
     include a discussion of examples of the uses of natural 
     floodplain management to reduce flood losses, and the status 
     of, range of benefits associated with, and potential that may 
     exist for protecting relatively natural floodplain functions. 
     The study should also address tradeoffs and costs and 
     benefits associated with such floodplain management 
     approaches, the range of uses usually considered compatible 
     with the protection of such floodplain functions, and 
     benefits that may be associated with ancillary floodplain 
     functions, such as protecting water quality, recharging 
     groundwater, and provision of habitat that may accompany 
     protection of relatively undisturbed natural floodplains. In 
     addition, the study should consider the appropriate roles of 
     local, state, and federal government agencies and the private 
     sector in identifying, managing, and protecting such 
     floodplain functions, how such approaches may relate to other 
     approaches to reduce flood losses, and make recommendations 
     for administrative and legislative initiatives to best 
     utilize natural floodplain resources.
       The Task Force is also encouraged, to the extent 
     appropriate, to consult with other relevant departments and 
     agencies, such as the National Park Service Rivers and Trails 
     Program, state and local government officials, and the public 
     in preparing this study.

                  Subtitle F--Miscellaneous Provisions

     Section 575. Updating of flood maps
       It is the Conferees intention that FEMA recognize that the 
     mapping needs of all communities are to be fairly assessed in 
     the 5-year review process. Requests by states and local 
     communities to update maps does not effect FEMA's obligation 
     under this section to revise and update outdated maps.
     Section 577. Evaluation of erosion hazards
       It is the intent of the Conferees that the Director conduct 
     a study, through an independent entity, regarding the various 
     effects that erosion has on the NFIP, its policyholders, and 
     communities prone to erosion.
       This study shall examine three areas. The first area of the 
     report is designed to determine the amount of flood insurance 
     claims that are attributable to erosion. In developing the 
     data to make this determination, the Director may map a 
     statistically valid and representative number of communities 
     with erosion hazard areas throughout the United States, 
     including coastal, Great Lakes, and, if technologically 
     feasible, riverine areas.
       The second part of the study shall examine the economic 
     impact of proposals to change the Program by denying flood 
     insurance, or making flood insurance available at actuarial 
     rates in communities having erosion hazard areas. This 
     economic study is designed to assist Congress in determining 
     whether the NFIP needs to revise its treatment of structures 
     at risk of erosion. Specifically the study would address the 
     economic impact of erosion on communities, the denial of 
     flood insurance for structures in the identified communities, 
     the establishment of actuarial rates for existing structures, 
     the establishment of actuarial rates for existing structures 
     in connection with the denial of insurance, the establishment 
     of actuarial rates for new structures, the previous and 
     present denials of flood insurance, the erosion hazard 
     management activities undertaken by states and communities, 
     and the mapping and identifying of communities having erosion 
     hazard areas.
       The third area of the study will concentrate on whether the 
     costs of mapping erosion hazard areas exceed the benefits to 
     the Fund. In addition, the study will determine whether the 
     expenditure of insurance premiums to map erosion hazard zones 
     is the most cost-beneficial use of these funds to the 
     Program.
     Section 578. Study of economic effects on charging actuarial 
         based premium rates for pre-FIRM structures
       The bill requires FEMA to study the economic effects that 
     would result from increasing premium rates for flood 
     insurance coverage for pre-FIRM structures. The Committee is 
     concerned by information provided by FEMA which indicates 
     that the Program had a deficit of $668 million on pre-FIRM 
     structures from 1978-1992, which negated the $250 million 
     surplus the Program enjoyed on post-FIRM structures in the 
     same period. However, a recent GAO study found that 
     increasing the premiums for Pre-FIRM structures would cause 
     many policyholders to terminate flood insurance coverage and 
     thereby exacerbate the need for federal disaster assistance 
     when flooding occurs.
     Section 579. Effective date of policies
       Section 579 states that new contracts for flood insurance 
     entered into after the date of enactment shall not become 
     effective for 30 days. The Committee is concerned by 
     information that arose from the 1993 Midwest flooding that 
     suggests that some homeowners bought flood insurance only 
     when flooding was imminent. This section provides an 
     exemption by FEMA to the 30-day delay period in instances 
     regarding the initial purchase of flood insurance in 
     connection with the making, increasing, extending, or 
     renewing of a loan or when the insurance coverage is 
     purchased within one year of a re-mapping or map revision. 
     The bill also provides for a study regarding effective date 
     of coverage.
     Section 580. Agricultural structures
       It is the intent of the Conferees that Agricultural 
     structures that are substantially damaged by flood are exempt 
     from the building requirements under the Act provided that 
     they are assessed actuarial rates and are no longer eligible 
     for federal disaster assistance. In addition, the Director is 
     not required to make flood insurance available unless ``wet-
     floodproofing'' is incorporated in the reconstruction of the 
     structure.
     Section 582. Prohibited flood disaster assistance
       It is the intent of the Conferees that a structure that 
     received federal disaster assistance subsequent to a flooding 
     occurrence that was subject to the homeowner purchasing flood 
     insurance, shall not be eligible for federal disaster 
     assistance at any later date if the homeowner has let the 
     flood insurance policy lapse.
       Section 582 now makes it explicitly clear that once the 
     federal government provides flood disaster relief assistance 
     to repair or replace property that was not previously 
     insured, flood insurance must be maintained on the property 
     for the useful life of the property, regardless of the 
     transfer in ownership of the property.

                      TITLE VI--GENERAL PROVISIONS


                           Section-by-Section

     Section 601. Oversight hearings
       This section expresses the Sense of the Congress regarding 
     hearings on matters related to Whitewater Development 
     Corporation.
     Section 602. Additional technical amendments to the Federal 
         banking laws
       This section makes numerous technical changes to the 
     Federal banking statutes, including eliminating obsolete 
     statutes that govern the issuance, replacement, redemption 
     and failure to redeem circulating notes issued by national 
     banks. National banks no longer issue such notes. It also 
     repeals obsolete provisions of statutory law that govern the 
     deposit and return of U.S. bonds that back a national bank's 
     circulating notes, the issuance of post notes by national 
     banks, and the formation of banks to issue gold notes to 
     circulate as money. National banks no longer issue post or 
     gold notes.
       This section also repeals provisions of law that, among 
     other things, require banks to receive circulating notes 
     equal in value to the United States bonds deposited with the 
     Treasury, authorize specific denominations of circulating 
     notes and limit the amount of notes that a bank may 
     circulate, and authorize the Comptroller of the Currency to 
     require the printing of national charter numbers on all 
     national bank notes.
       Additionally, this section transfers authority for the 
     engraving and printing of Federal Reserve notes to the 
     Secretary of the Treasury from the Office of the Comptroller 
     of the Currency. The responsibility for printing currency is 
     no longer consistent with the OCC's duties as a regulator of 
     national banks and is, in fact, performed by other Treasury 
     bureaus. Accordingly, these functions are transferred to the 
     Secretary of the Treasury for appropriate delegation 
     elsewhere within the Treasury Department. In addition, this 
     section amends provisions of land to eliminate and simplify 
     language relating to the currency function.
       Section 602 also repeals section 5170 of the Revised 
     Statutes, an obsolete provision that requires national banks 
     to publish the OCC's certification to commence business. The 
     amendment to the Act of March 3, 1875 in section 602 has the 
     effect of repealing 12 U.S.C. Sec. 106, which authorizes the 
     Comptroller to require distinctive paper for the printing of 
     national bank notes. The other provisions of that Act 
     generally relate to appropriations and are not affected by 
     this legislation.
       The amendments made to sections 5199 and 5204 of the 
     Revised Statutes by this section delete outdated statutory 
     restrictions relating to national banks' dividend payments 
     and replaces the outdated term ``net profits'' with 
     ``undivided profits'' or ``net income'' as appropriate.
     From the Committee on Banking, Finance and Urban Affairs, for 
     consideration of the House bill, and the Senate amendment 
     (except titles II and V), and modifications committed to 
     conference:
     Henry Gonzalez,
     Steve Neal,
     John J. LaFalce,
     Bruce F. Vento,
     Charles Schumer,
     Barney Frank,
     Paul E. Kanjorski,
     Joe Kennedy,
     Floyd H. Flake,
     Kweisi Mfume,
     Larry LaRocco,
     William Orton,
     Jim Bacchus,
     James Leach,
     Bill McCollum,
     Marge Roukema,
     Doug Bereuter,
     Tom Ridge,
     Toby Roth,
     Al McCandless,
     R.H. Baker,
     Jim Nussle,
     Provided, that for consideration of section 348(b) of the 
     Senate amendment, Mr. Klein is appointed in lieu of Mr. 
     LaFalce.
     Herb Klein,
     Provided, that for consideration of title VI of the Senate 
     amendment, Mr. Lazio is appointed in lieu of Mr. Ridge.
     Rick Lazio,
     From the Committee on Banking, Finance and Urban Affairs, for 
     consideration of title II of the Senate amendment and 
     modifications committed to conference:
     Henry Gonzalez,
     Steve Neal,
     John J. LaFalce,
     Bruce F. Vento,
     Charles Schumer,
     Barney Frank,
     Paul E. Kanjorski,
     Joe Kennedy,
     Floyd H. Flake,
     Kweisi Mfume,
     William Orton,
     Herb Klein,
     Nydia M. Velazquez,
     Jim Leach,
     Bill McCollum,
     Marge Roukema,
     Doug Bereuter,
     Tom Ridge,
     Toby Roth,
     Al McCandless,
     R.H. Baker,
     Jim Nussle,
     From the Committee on Banking, Finance and Urban Affairs, for 
     consideration of title V of the Senate amendment, and 
     modifications committed to conference:
     Henry Gonzalez,
     Steve Neal,
     John J. LaFalce,
     Charles Schumer,
     Barney Frank,
     James Leach,
     Doug Bereuter,
     Bill McCollum,
     As additional conferees from the Committee on Education and 
     Labor, for consideration of section 209 of the Senate 
     amendment, and modifications committed to conference:
     William D. Ford,
     Pat Williams,
     William L. Clay,
     Dale E. Kildee,
     George Miller,
     Bill Goodling,
     Marge Roukema,
     Harris W. Fawell,
     As additional conferees from the Committee on Energy and 
     Commerce, for consideration of sections 201-05, 207, 320 and 
     347 of the Senate amendment, and modifications committed to 
     conference:
     John D. Dingell,
     Edward Markey,
     Phil Sharp,
     Al Swift,
     Cardiss Collins,
     Rick Boucher,
     Thomas J. Manton,
     Richard H. Lehman,
     Lynn Schenk,
     Marjorie Margolies-Mezvinsky,
     Mike Synar,
     Ron Wyden,
     Bill Richardson,
     John Bryant,
     Carlos J. Moorhead,
     Jack Fields,
     Tom Bliley,
     As additional conferees from the Committee on Energy and 
     Commerce for consideration of sections 503-05, 507 and 706 of 
     the Senate amendment, and modifications committed to 
     conference:
     John D. Dingell,
     Edward Markey,
     Cardiss Collins,
     E. Towns,
     Richard H. Lehman,
     Carlos J. Moorhead,
     As additional conferees from the Committee on Foreign 
     Affairs, for consideration of section 703 of the Senate 
     amendment, and modifications committed to conference:
     Lee H. Hamilton,
     Sam Gejdenson,
     As additional conferees from the Committee on the Judiciary, 
     for consideration of section 139 of the House bill, and 
     sections 325, 408 and 409 of the Senate amendment, and 
     modifications committed to conference:
     Charles E. Schumer,
     Don Edwards,
     John Conyers, Jr.,
     Bill Hughes,
     As additional conferees from the Committee on Small Business, 
     for consideration of section 348(b) of the Senate amendment, 
     and modifications committed to conference:
     John J. LaFalce,
     Neal Smith,
     Jan Meyers,
     As additional conferees from the Committee on Ways and Means, 
     for consideration of sections 210 and 502-04 of the Senate 
     amendment, and modifications committed to conference:
     Dan Rostenkowski,
     Sam Gibbons,
     J.J. Pickle,
     C.B. Rangel,
     Pete Stark,
     Bill Archer,
     Phil Crane,
     Bill Thomas,
                                Managers on the Part of the House.

     Don Riegle,
     Paul Sarbanes,
     Christopher Dodd,
     From the Committee on Finance, for matters solely within the 
     Finance Committee's jurisdiction, including sections 209, 
     210, and 408 of the Senate amendment:
     Daniel Moynihan,
     Max Baucus,
                               Managers on the Part of the Senate.

     

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