[Congressional Record Volume 143, Number 155 (Friday, November 7, 1997)]
[Senate]
[Pages S11982-S11989]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SHELBY (for himself, Mr. Mack, Mr. Faircloth, Mr. D'Amato, 
        Mr. Bryan, Mr. Grams, Mr. Kerry, Mr. Bennett, Mr. Gramm, Mr. 
        Hagel, Mr. Allard, Mr. Enzi, and Ms. Moseley-Braun):
  S. 1405. A bill to amend titles 17 and 18, United States Code, to 
provide greater copyright protection by amending copyright infringement 
provisions, and for other purposes; to the Committee on the Judiciary.


  the financial regulatory relief and economic efficiency act of 1997

  Mr. SHELBY. Mr. President, I rise today to introduce a bipartisan 
bill with my colleague from Florida, Senator Connie Mack, and 11 other 
original cosponsors from the Banking Committee. Entitled the 
``Financial Regulatory Relief and Economic Efficiency Act of 1997,'' 
the bill is designed to promote greater access to capital and credit 
for businesses and consumers, while ensuring the safety and soundness 
of our financial system.
  The acronym for the bill, FRREE, is actually indicative of the bill 
itself. If enacted, the bill would free valuable resources at financial 
institutions now being used to comply with the bureaucratic maze of 
current rules and regulations, and instead allow institutions to commit 
more of those resources to the business of lending. This is especially 
important, now that we are entering the 80th month of the current 
economic expansion. The 9 completed expansions since the end of World 
War II have averaged 50 months. Thus, many professional economists, 
businessmen, and academics worry how much longer the expansion of the 
current business cycle can go. Because this bill frees up resources 
that are inefficiently being used in the private sector, I believe this 
bill could have a substantial positive impact on extending the current 
business cycle as well as minimize any future economic downturn.
  One key provision would repeal an antiquated law that disallows banks 
to pay interest on business checking accounts. Due to sophisticated and 
expensive technology, big corporations can get around this problem by 
employing sweep accounts. However, smaller, family owned businesses 
cannot take advantage of this expensive technology and are forced to 
keep their money in noninterest bearing checking accounts. The Board of 
Governors of the Federal Reserve System, the Federal Deposit Insurance 
Corporation, the Office of the Comptroller of the Currency, and the 
Office of Thrift Supervision, concluded in their 1996 Joint Report, 
``Streamlining of Regulatory Requirements,'' that the statutory 
prohibition against paying interest on demand deposits no longer serves 
a public purpose. Today, the repeal also has the support of the Chamber 
of Commerce, the National Federation of Independent Business, and the 
American Farm Bureau Federation.
  The bill also allows the Federal Reserve to pay interest on reserve 
balances, thus reducing potential volatility in short-term lending 
rates. Given the historical importance of price stability, it is 
imperative we give the Federal Reserve this tool in order to better 
conduct monetary policy.
  In short, Mr. President, the bill repeals outdated laws that hinder 
the management practices of institutions; cuts bureaucratic red tape; 
eliminates unnecessary bookkeeping; increases funds available for 
residential mortgage lending; and eliminates unnecessary restrictions 
on the discounting, and bundling of financial services to consumers.
  The bill enjoys the overwhelming support of the Senate Banking 
Committee and the chairman of the committee, Chairman D'Amato, is 
committed to having hearings on this bill when we return early next 
year.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1405

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Financial 
     Regulatory Relief and Economic Efficiency Act of 1997''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

TITLE I--IMPROVING MONETARY POLICY AND FINANCIAL INSTITUTION MANAGEMENT 
                               PRACTICES

Sec. 101. Payment of interest on reserves at Federal reserve banks.
Sec. 102. Amendments relating to savings and demand deposit accounts at 
              depository institutions.
Sec. 103. Repeal of savings association liquidity provision.
Sec. 104. Repeal of dividend notice requirement.
Sec. 105. Thrift service companies.
Sec. 106. Elimination of thrift multistate multiple holding company 
              restrictions.
Sec. 107. Noncontrolling investments by savings association holding 
              companies.
Sec. 108. Repeal of deposit broker notification and recordkeeping 
              requirement.
Sec. 109. Uniform regulation of extensions of credit to executive 
              officers.
Sec. 110. Expedited procedures for certain reorganizations.
Sec. 111. National bank directors.
Sec. 112. Amendment to Bank Consolidation and Merger Act.
Sec. 113. Loans on or purchases by institutions of their own stock; 
              affiliations.
Sec. 114. Depository institution management interlocks.
Sec. 115. Purchased mortgage servicing rights.
Sec. 116. Cross marketing restriction; limited purpose bank relief.
Sec. 117. Divestiture requirement.
Sec. 118. Daylight overdrafts incurred by Federal home loan banks.
Sec. 119. Federal home loan bank governance amendments.
Sec. 120. Collateralization of advances to members.

           TITLE II--STREAMLINING ACTIVITIES OF INSTITUTIONS

Sec. 201. Updating of authority for community development investments.
Sec. 202. Acceptance of brokered deposits.
Sec. 203. Federal Reserve Act lending limits.
Sec. 204. Eliminate unnecessary restrictions on product marketing.
Sec. 205. Business purpose credit extensions.
Sec. 206. Affinity groups.
Sec. 207. Fair debt collection practices.
Sec. 208. Restriction on acquisitions of other insured depository 
              institutions.
Sec. 209. Mutual holding companies.
Sec. 210. Call report simplification.

                 TITLE III--STREAMLINING AGENCY ACTIONS

Sec. 301. Scheduled meetings of Affordable Housing Advisory Board.
Sec. 302. Elimination of duplicative disclosure of fair market value of 
              assets and liabilities.
Sec. 303. Payment of interest in receiverships with surplus funds.
Sec. 304. Repeal of reporting requirement on differences in accounting 
              standards.
Sec. 305. Agency review of competitive factors in Bank Merger Act 
              filings.
Sec. 306. Termination of the Thrift Depositor Protection Oversight 
              Board.

                  TITLE IV--DISCLOSURE SIMPLIFICATION

Sec. 401. Alternative compliance method for APR disclosure.
Sec. 402. Alternative compliance methods for advertising credit terms.

                         TITLE V--MISCELLANEOUS

Sec. 501. Positions of Board of Governors of Federal Reserve System on 
              the Executive Schedule.
Sec. 502. Consistent coverage for individuals enrolled in a health plan 
              administered by the Federal banking agencies.
Sec. 503. Federal Housing Finance Board.

                    TITLE VI--TECHNICAL CORRECTIONS

Sec. 601. Technical correction relating to deposit insurance funds.
Sec. 602. Rules for continuation of deposit insurance for member banks 
              converting charters.
Sec. 603. Amendments to the Revised Statutes.
Sec. 604. Conforming change to the International Banking Act.
TITLE I--IMPROVING MONETARY POLICY AND FINANCIAL INSTITUTION MANAGEMENT 
                               PRACTICES

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

       (a) In General.--Section 19(b) of the Federal Reserve Act 
     (12 U.S.C. 461(b)) is amended

[[Page S11983]]

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

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

       (a) NOW Accounts Authorized for All Businesses.--Section 2 
     of Public Law 93-100 (12 U.S.C. 1832) is amended to read as 
     follows:

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

       ``Notwithstanding any other provision of law, any 
     depository institution (as defined in section 3 of the 
     Federal Deposit Insurance Act) may permit the owner of any 
     deposit or account to make withdrawals from such deposit or 
     account by negotiable or transferable instruments for the 
     purpose of making payments to third parties.''.
       (b) Repeal of Prohibitions on Payment of Interest on Demand 
     Deposits.--
       (1) Federal reserve act.--Section 19 of the Federal Reserve 
     Act (12 U.S.C. 371a) is amended by striking subsection (i).
       (2) Home owners' loan act.--The first sentence of section 
     5(b)(1)(B) of the Home Owners' Loan Act (12 U.S.C. 
     1464(b)(1)(B)) is amended by striking ``savings association 
     may not--'' and all that follows through ``(ii) permit any'' 
     and inserting ``savings association may not permit any''.
       (3) Federal deposit insurance act.--Section 18 of the 
     Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by 
     striking subsection (g).

     SEC. 103. REPEAL OF SAVINGS ASSOCIATION LIQUIDITY PROVISION.

       (a) Repeal of Liquidity Provision.--Section 6 of the Home 
     Owners' Loan Act (12 U.S.C. 1465) is repealed.
       (b) Conforming Amendments.--
       (1) Section 5.--Section 5(c)(1)(M) of the Home Owners' Loan 
     Act (12 U.S.C. 1464(c)(1)(M)) is amended to read as follows:
       ``(M) Liquidity investments.--Investments identified by the 
     Director, including cash, funds on deposit at a Federal 
     reserve bank or a Federal home loan bank, or bankers' 
     acceptances.''.
       (2) Section 10.--Section 10(m)(4)(B)(iii) of the Home 
     Owners' Loan Act (12 U.S.C. 1467a(m)(4)(B)(iii)) is amended 
     by striking ``liquid assets'' and all that follows through 
     ``Loan Act,'' and inserting ``cash and marketable securities 
     identified by the Director,''.

     SEC. 104. REPEAL OF DIVIDEND NOTICE REQUIREMENT.

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

     SEC. 105. THRIFT SERVICE COMPANIES.

       (a) Streamlining Thrift Service Company Investment 
     Requirements.--Section 5(c)(4)(B) of the Home Owners' Loan 
     Act (12 U.S.C. 1464(c)(4)(B)) is amended--
       (1) in the subparagraph heading, by striking 
     ``corporations'' and inserting ``companies''; and
       (2) in the first sentence, by striking ``corporation 
     organized'' and all that follows through ``such State.'' and 
     inserting ``company, if such company engages or will engage 
     only in activities reasonably related to the activities of 
     financial institutions, as the Director may determine and 
     approve. For purposes of this subparagraph, the term 
     `company' includes any corporation and any limited liability 
     company (as defined in section 1(b)(7) of the Bank Service 
     Company Act).''.
       (b) Regulation and Examination of Service Providers.--
     Section 5(d) of the Home Owners' Loan Act (12 U.S.C. 1464(d)) 
     is amended by adding at the end the following new paragraphs:
       ``(7) Regulation and examination of savings association 
     service companies.--
       ``(A) Service performed by contract or otherwise.--If a 
     savings association, subsidiary, or any savings and loan 
     affiliate or entity, as identified by section 8(b)(9) of the 
     Federal Deposit Insurance Act, that is regularly examined or 
     subject to examination by the Director, causes to be 
     performed for itself, by contract or otherwise, any services 
     authorized under this Act or other applicable Federal law, 
     whether on or off its premises--
       ``(i) such performance shall be subject to regulation and 
     examination by the Director to the same extent as if such 
     services were being performed by the savings association on 
     its own premises;
       ``(ii) the Director may authorize any other Federal banking 
     agency (as defined in section 3 of the Federal Deposit 
     Insurance Act) that supervises such subsidiary, savings and 
     loan affiliate, or entity to perform an examination referred 
     to in clause (i); and
       ``(iii) the savings association shall notify the Director 
     of the existence of the service relationship not later than 
     30 days after the earlier of the date of the making of such 
     service contract or the date of initiation of the service.
       ``(B) Administration by the director.--The Director may 
     issue such regulations and orders, including those issued 
     pursuant to section 8 of the Federal Deposit Insurance Act, 
     as may be necessary to enable the Director to administer and 
     carry out this paragraph and to prevent evasion of this 
     paragraph.''.
       (c) Conforming Amendments to Section 8 of the Federal 
     Deposit Insurance Act.--Section 8 of the Federal Deposit 
     Insurance Act (12 U.S.C. 1818) is amended--
       (1) in subsection (b)(9), by striking ``to any service 
     corporation of a savings association and to any subsidiary of 
     such service corporation''; and
       (2) in subsection (e)(7)(A)(ii), by striking ``(b)(8)'' and 
     inserting ``(b)(9)''.

     SEC. 106. ELIMINATION OF THRIFT MULTISTATE MULTIPLE HOLDING 
                   COMPANY RESTRICTIONS.

       Section 10(e) of the Home Owners' Loan Act (12 U.S.C. 
     1467a(e)) is amended--
       (1) by striking paragraph (3); and
       (2) by redesignating paragraphs (4), (5), and (6) as 
     paragraphs (3), (4), and (5), respectively.

     SEC. 107. NONCONTROLLING INVESTMENTS BY SAVINGS ASSOCIATION 
                   HOLDING COMPANIES.

       Section 10(e)(1)(A)(iii) of the Home Owners' Loan Act (12 
     U.S.C. 1467a(e)(1)(A)(iii)) is amended--
       (1) by inserting ``, except with the prior approval of the 
     Director,'' after ``or to retain''; and
       (2) by striking ``to so acquire or retain'' and inserting 
     ``to acquire, by purchase or otherwise, or to retain''.

     SEC. 108. REPEAL OF DEPOSIT BROKER NOTIFICATION AND 
                   RECORDKEEPING REQUIREMENT.

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

     SEC. 109. UNIFORM REGULATION OF EXTENSIONS OF CREDIT TO 
                   EXECUTIVE OFFICERS.

       Section 22(g)(4) of the Federal Reserve Act (12 U.S.C. 
     375a(4)) is amended by striking ``member bank's appropriate 
     Federal banking agency'' and inserting ``Board''.

     SEC. 110. EXPEDITED PROCEDURES FOR CERTAIN REORGANIZATIONS.

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

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

       ``(a) In General.--A national banking association may, with 
     the approval of the Comptroller, pursuant to rules and 
     regulations promulgated by the Comptroller, and upon the 
     affirmative vote of the shareholders of such association 
     owning at least two-thirds of its capital stock outstanding, 
     reorganize so as to become a subsidiary of a bank holding 
     company or a company that will, upon consummation of such 
     reorganization, become a bank holding company.
       ``(b) Reorganization Plan.--A reorganization authorized 
     under subsection (a) shall be carried out in accordance with 
     a reorganization plan that--
       ``(1) specifies the manner in which the reorganization 
     shall be carried out;
       ``(2) is approved by a majority of the entire board of 
     directors of the association;
       ``(3) specifies--
       ``(A) the amount of cash or securities of the bank holding 
     company, or both, or other consideration, to be paid to the 
     shareholders of the reorganizing association in exchange for 
     their shares of stock of the association;
       ``(B) the date as of which the rights of each shareholder 
     to participate in such exchange will be determined; and
       ``(C) the manner in which the exchange will be carried out; 
     and
       ``(4) is submitted to the shareholders of the reorganizing 
     association at a meeting to be held on the call of the 
     directors in accordance with the procedures prescribed in 
     connection with a merger of a national bank under section 3.
       ``(c) Rights of Dissenting Shareholders.--If, pursuant to 
     this section, a reorganization plan has been approved by the 
     shareholders and the Comptroller, any shareholder of the 
     association who has voted

[[Page S11984]]

     against the reorganization at the meeting referred to in 
     subsection (b)(4), or has given notice in writing at or prior 
     to that meeting to the presiding officer that the shareholder 
     dissents from the reorganization plan, shall be entitled to 
     receive the value of his or her shares, as provided by 
     section 3 for the merger of a national bank.
       ``(d) Effect of Reorganization.--The corporate existence of 
     an association that reorganizes in accordance with this 
     section shall not be deemed to have been affected in any way 
     by reason of such reorganization.''.

     SEC. 111. NATIONAL BANK DIRECTORS.

       (a) Amendments to the Revised Statutes.--Section 5145 of 
     the Revised Statutes (12 U.S.C. 71) is amended--
       (1) by striking ``for one year'' and inserting ``for a 
     period of not more than 3 years,''; and
       (2) by adding at the end the following: ``In accordance 
     with regulations issued by the Comptroller of the Currency, 
     an association may adopt bylaws that provide for staggering 
     the terms of its directors.''.
       (b) Amendment to the Banking Act of 1933.--Section 31 of 
     the Banking Act of 1933 (12 U.S.C. 71a) is amended in the 
     first sentence, by inserting before the period ``, except 
     that the Comptroller of the Currency may, by regulation or 
     order, exempt a national banking association from the 25-
     member limit established by this section''.

     SEC. 112. AMENDMENT TO BANK CONSOLIDATION AND MERGER ACT.

       The National Bank Consolidation and Merger Act (12 U.S.C. 
     215 et seq.) is amended by inserting after section 5, as 
     added by section 110 of this Act, the following new section:

     ``SEC. 6. MERGERS AND CONSOLIDATIONS WITH SUBSIDIARIES AND 
                   NONBANK AFFILIATES.

       ``(a) In General.--Upon the approval of the Comptroller, a 
     national banking association may merge with 1 or more of its 
     subsidiaries or nonbank affiliates.
       ``(b) Scope.--Nothing in this section shall be construed--
       ``(1) to affect the applicability of section 18(c)(1) of 
     the Federal Deposit Insurance Act; or
       ``(2) to grant a national banking association any power or 
     authority that is not permissible for a national banking 
     association under other applicable provisions of law.
       ``(c) Regulations.--The Comptroller shall promulgate 
     regulations to implement this section.''.

     SEC. 113. LOANS ON OR PURCHASES BY INSTITUTIONS OF THEIR OWN 
                   STOCK; AFFILIATIONS.

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

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

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

     SEC. 114. DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS.

       Section 205(8) of the Depository Institution Management 
     Interlocks Act (12 U.S.C. 3204(8)) is amended by striking 
     ``director'' each place it appears and inserting ``management 
     official''.

     SEC. 115. PURCHASED MORTGAGE SERVICING RIGHTS.

       Section 475(a) of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991 (12 U.S.C. 1828 note) is amended--
       (1) by striking ``purchased'';
       (2) by striking ``rights'' each place it appears and 
     inserting ``assets''; and
       (3) by striking ``90'' and inserting ``100''.

     SEC. 116. CROSS MARKETING RESTRICTION; LIMITED PURPOSE BANK 
                   RELIEF.

       (a) Cross Marketing Restriction.--Section 4(f) of the Bank 
     Holding Company Act of 1956 (12 U.S.C. 1843(f)) is amended by 
     striking paragraph (3).
       (b) Daylight Overdrafts.--Section 4(f) of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1843(f)) is amended by 
     inserting after paragraph (2) the following:
       ``(3) Permissible overdrafts described.--For purposes of 
     paragraph (2)(C), an overdraft is described in this paragraph 
     if--
       ``(A) such overdraft results from an inadvertent computer 
     or accounting error that is beyond the control of both the 
     bank and the affiliate;
       ``(B) such overdraft--
       ``(i) is permitted or incurred on behalf of an affiliate 
     that is monitored by, reports to, and is recognized as a 
     primary dealer by the Federal Reserve Bank of New York; and
       ``(ii) is fully secured, as required by the Board, by 
     bonds, notes, or other obligations that are direct 
     obligations of the United States or on which the principal 
     and interest are fully guaranteed by the United States or by 
     securities and obligations eligible for settlement on the 
     Federal Reserve book entry system; or
       ``(C) such overdraft--
       ``(i) is permitted or incurred by, or on behalf of, an 
     affiliate that is engaged in activities that are so closely 
     related to banking, or managing or controlling banks, as to 
     be a proper incident thereto; and
       ``(ii) does not cause the bank to violate any provision of 
     section 23A or 23B of the Federal Reserve Act, either 
     directly, in the case of a bank that is a member of the 
     Federal Reserve System, or by virtue of section 18(j) of the 
     Federal Deposit Insurance Act, in the case of a bank that is 
     not a member of the Federal Reserve System.''.
       (c) Conforming Amendment.--Section 4(f)(2) of the Bank 
     Holding Company Act of 1956 (12 U.S.C. 1843(f)(2)) is amended 
     by striking ``Paragraph (1) shall cease to apply to any 
     company described in such paragraph if--'' and inserting 
     ``Subject to paragraph (3), a company described in paragraph 
     (1) shall no longer qualify for the exemption provided under 
     that paragraph
     if--''.
       (d) Activities Limitations.--Section 4(f)(2) of the Bank 
     Holding Company Act of 1956 (12 U.S.C. 1843(f)(2)) is amended 
     by striking subparagraph (B) and inserting the following:
       ``(B) any bank subsidiary of such company engages in any 
     activity in which the bank was not lawfully engaged as of 
     March 5, 1987;
       ``(C) any bank subsidiary of such company that--
       ``(i) accepts demand deposits or deposits that the 
     depositor may withdraw by check or similar means for payment 
     to third parties; and
       ``(ii) engages in the business of making commercial loans 
     (and, for purposes of this clause, loans made in the ordinary 
     course of a credit card operation shall not be treated as 
     commercial loans); or
       ``(D) after the date of enactment of the Competitive 
     Equality Amendments of 1987, any bank subsidiary of such 
     company permits any overdraft (including any intraday 
     overdraft), or incurs any such overdraft in the account of 
     the bank at a Federal reserve bank, on behalf of an 
     affiliate, other than an overdraft described in paragraph 
     (3).''.

     SEC. 117. DIVESTITURE REQUIREMENT.

       (a) In General.--Section 4(f)(4) of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1843(f)(4)) is amended to read 
     as follows:
       ``(4) Divestiture in case of loss of exemption.--If any 
     company described in paragraph (1) fails to qualify for the 
     exemption provided under such paragraph by operation of 
     paragraph (2), such exemption shall cease to apply to such 
     company and such company shall divest control of each bank it 
     controls before the end of the 180-day period beginning on 
     the date that the company receives notice from the Board that 
     the company has failed to continue to qualify for such 
     exemption, unless before the end of such 180-day period, the 
     company has--
       ``(A) either--
       ``(i) corrected the condition or ceased the activity that 
     caused the company to fail to continue to qualify for the 
     exemption; or
       ``(ii) submitted a plan to the Board for approval to cease 
     the activity or correct the condition in a timely manner 
     (which shall not exceed 1 year); and
       ``(B) implemented procedures that are reasonably adapted to 
     avoid the reoccurrence of such condition or activity.''.
       (b) Technical and Conforming Amendment.--Section 4(f)(2) of 
     the Bank Holding Company Act of 1956 (12 U.S.C. 1843(f)(2)) 
     is amended by striking ``Paragraph (1) shall cease to apply 
     to any company described in such paragraph if--'' and 
     inserting ``A company described in paragraph (1) shall no 
     longer qualify for the exemption provided under such 
     paragraph if--''.

     SEC. 118. DAYLIGHT OVERDRAFTS INCURRED BY FEDERAL HOME LOAN 
                   BANKS.

       The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended 
     by inserting after section 11A the following new section:

     ``SEC. 11B. DAYLIGHT OVERDRAFTS INCURRED BY FEDERAL HOME LOAN 
                   BANKS.

       ``(a) In General.--Any policy or regulation adopted by the 
     Board governing payment system risk or intraday credit 
     shall--
       ``(1) include--
       ``(A) the establishment of net debit caps appropriate to 
     the credit quality of each Federal Home Loan Bank; and
       ``(B) the imposition of normal fees for daylight 
     overdrafts, calculated in the same manner as fees for other 
     users; or
       ``(2) exempt Federal Home Loan Banks from such policy or 
     regulation.
       ``(b) Definition.--For purposes of this section, the term 
     `Federal Home Loan Bank' has the same meaning as in section 2 
     of the Federal Home Loan Bank Act.''.

     SEC. 119. FEDERAL HOME LOAN BANK GOVERNANCE AMENDMENTS.

       The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is 
     amended--
       (1) in section 7(i) (12 U.S.C. 1427(i)), by striking ``, 
     subject to the approval of the board'';
       (2) in section 12(a) (12 U.S.C. 1432(a))--

[[Page S11985]]

       (A) by striking ``, but, except'' and all that follows 
     through ``ten years'';
       (B) by striking ``and by its board of directors'' and all 
     that follows through ``enjoyed subject to the approval of the 
     Board'' and inserting ``and, by its board of directors, to 
     prescribe, amend, and repeal bylaws governing the manner in 
     which its affairs may be administered, consistent with this 
     Act''; and
       (C) by adding at the end the following: ``A Federal home 
     loan bank shall not be required to submit to the board of 
     directors of the bank for its approval, budget or business 
     plans, including annual operating and capital budgets, 
     strategic plans, or business plans.'';
       (3) in section 9 (12 U.S.C. 1429)--
       (A) in the second sentence, by striking ``with the approval 
     of the Board''; and
       (B) in the third sentence, by striking ``, subject to the 
     approval of the Board,'';
       (4) in section 10(a)(5) (12 U.S.C. 1430(a)(5))--
       (A) by striking ``and the Board''; and
       (B) by striking ``by the Board'' and inserting ``by the 
     Federal home loan bank''.
       (5) in section 10(c) (12 U.S.C. 1430(c)), by striking 
     ``Board'' and inserting ``Federal home loan bank'';
       (6) in section 10(d) (12 U.S.C. 1430(d))--
       (A) by striking ``and the approval of the Board''; and
       (B) by striking ``Subject to the approval of the Board, 
     any'' and inserting ``Any''; and
       (7) in section 16(a) (12 U.S.C. 1436(a)), by striking ``, 
     and then only with the approval of the Federal Housing 
     Finance Board''.

     SEC. 120. COLLATERALIZATION OF ADVANCES TO MEMBERS.

       Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C. 
     1430(a)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) Fully disbursed, whole first mortgages on improved 
     residential property that are not more than 90 days 
     delinquent, mortgages on improved residential property 
     insured or guaranteed by the United States Government or any 
     agency thereof, or securities representing a whole interest 
     in such mortgages.''; and
       (2) in paragraph (4), by striking ``If an advance'' and all 
     that follows through ``is appropriate.''.
           TITLE II--STREAMLINING ACTIVITIES OF INSTITUTIONS

     SEC. 201. UPDATING OF AUTHORITY FOR COMMUNITY DEVELOPMENT 
                   INVESTMENTS.

       Section 5(c)(3)(A) of the Home Owners' Loan Act (12 U.S.C. 
     1464(c)(3)(A)) is amended by striking ``located'' and all 
     that follows through ``1974'' and inserting ``for the primary 
     purpose of promoting the public welfare, including the 
     welfare of low- and moderate-income communities or families 
     (including the provision of housing, services, or jobs)''.

     SEC. 202. ACCEPTANCE OF BROKERED DEPOSITS.

       Section 29 of the Federal Deposit Insurance Act (12 U.S.C. 
     1831f) is amended--
       (1) by striking subsections (e) and (h);
       (2) by redesignating subsections (f) through (g) as 
     subsections (e) through (f), respectively;
       (3) in subsection (f), as redesignated, by striking 
     paragraph (3) and redesignating paragraph (4) as paragraph 
     (3); and
       (4) by adding at the end the following new subsection:
       ``(g) Deposit Solicitations Restricted.--
       ``(1) In general.--An insured depository institution may 
     not solicit deposits by offering rates of interest that are 
     significantly higher than the national rate of interest on 
     insured deposits, as established by the Corporation, if--
       ``(A) the institution is undercapitalized or adequately 
     capitalized, as those terms are defined in section 38; or
       ``(B) the Corporation has been appointed conservator for 
     the institution.
       ``(2) Exclusion.--Paragraph (1) does not apply to an 
     insured depository institution that is well capitalized, as 
     defined in section 38.''.

     SEC. 203. FEDERAL RESERVE ACT LENDING LIMITS.

       Section 11 of the Federal Reserve Act (12 U.S.C. 248) is 
     amended--
       (1) by striking subsection (m); and
       (2) by redesignating subsection (o) as subsection (m).

     SEC. 204. ELIMINATE UNNECESSARY RESTRICTIONS ON PRODUCT 
                   MARKETING.

       Section 106(b) of the Bank Holding Company Act Amendments 
     of 1970 (12 U.S.C. 1972) is amended--
       (1) by striking paragraph (1);
       (2) in paragraph (2)--
       (A) by striking ``(2)''; and
       (B) by redesignating subparagraphs (A) through (I) as 
     paragraphs (1) through (9), respectively;
       (3) in paragraph (6), as redesignated--
       (A) by redesignating clauses (i) through (ix) as 
     subparagraphs (A) through (I), respectively;
       (B) by striking ``clause (i)'' each place it appears and 
     inserting ``subparagraph (A)'';
       (C) in subparagraph (B), as redesignated--
       (i) by redesignating subclauses (I) and (II) as clauses (i) 
     and (ii), respectively;
       (ii) by striking ``(aa)'' each place it appears and 
     inserting ``(I)'';
       (iii) by striking ``(bb)'' each place it appears and 
     inserting ``(II)''; and
       (iv) by striking ``(cc)'' each place it appears and 
     inserting ``(III)'';
       (D) in subparagraph (C), as redesignated--
       (i) by striking ``clauses (i) and (ii)'' and inserting 
     ``subparagraphs (A) and (B)'';
       (ii) by redesignating subclauses (I) and (II) as clauses 
     (i) and (ii), respectively;
       (iii) in clause (i), as redesignated, by redesignating 
     items (aa) through (cc) as subclauses (I) through (III), 
     respectively; and
       (iv) by striking ``clause (iv)'' and inserting 
     ``subparagraph (D)'';
       (E) in subparagraph (D), as redesignated--
       (i) by striking ``clause (iii)'' each place it appears and 
     inserting ``subparagraph (C)'';
       (ii) by redesignating subclauses (I) and (II) as clauses 
     (i) and (ii), respectively:
       (iii) by striking ``(aa)'' and inserting ``(I)''; and
       (iv) by striking ``(bb)'' and inserting ``(II)''; and
       (F) in subparagraph (E), as redesignated--
       (i) by striking ``(ii) or (iii)'' and inserting ``(B), or 
     (C)''; and
       (ii) by redesignating subclauses (I) through (III) as 
     clauses (i) through (iii), respectively;
       (4) in paragraph (7), as redesignated--
       (A) by redesignating clauses (i) and (ii) as subparagraphs 
     (A) and (B), respectively; and
       (B) in subparagraph (A), as redesignated--
       (i) by redesignating paragraphs (1) through (4) as clauses 
     (i) through (iv), respectively;
       (ii) by striking ``(a)'' each place it appears and 
     inserting ``(I)'';
       (iii) by striking ``(b)'' each place it appears and 
     inserting ``(II)''; and
       (iv) by striking ``(c)'' each place it appears and 
     inserting ``(III)'';
       (5) by striking ``this paragraph'' each place it appears 
     and inserting ``this subsection''; and
       (6) by striking ``this subparagraph'' each place it appears 
     and inserting ``this paragraph''.

     SEC. 205. BUSINESS PURPOSE CREDIT EXTENSIONS.

       Section 4 of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1843) is amended by adding at the end the following 
     new subsection:
       ``(k) Business Purpose Credit Extensions.--
       ``(1) In general.--An institution referred to in section 
     2(c)(2)(F) or 4(f)(3) may engage in the provision of credit 
     card accounts for business purposes, including the issuance 
     of such accounts to small businesses.
       ``(2) Definition.--For purposes of this subsection, the 
     term `credit card' has the same meaning as in section 103 of 
     the Truth In Lending Act (15 U.S.C. 1602).''.

     SEC. 206. AFFINITY GROUPS.

       (a) Definitions.--For purposes of this section--
       (1) the term ``affinity group'' means any person, other 
     than an individual, that--
       (A) is established for a common objective or purpose;
       (B) is not established by 1 or more settlement service 
     providers for the principal purpose of endorsing the products 
     or services of a settlement service provider;
       (C) the common objective or purpose of which is not 
     principally the conduct of settlement services; and
       (D) does not consist of member organizations whose 
     principal business is providing settlement services; and
       (2) the terms ``person'', ``settlement services'', and 
     ``thing of value'' have the meanings given those terms in 
     section 3 of the Real Estate Settlement Procedures Act of 
     1974 (12 U.S.C. 2602).
       (b) Marketing Modernization.--Notwithstanding any other 
     provision of law, it shall not be unlawful to make a payment 
     or otherwise transfer any thing of value to an affinity group 
     for or in connection with an endorsement (written or oral), 
     either through an advertisement or through a communication 
     addressed to a consumer by name or by mailing address, of the 
     products or services of a settlement service provider, if 
     disclosure is clearly made at the time of the first written 
     communication with the consumer of the fact that a payment 
     has been made or may be made or any other thing of value may 
     accrue to the affinity group for the endorsement.

     SEC. 207. FAIR DEBT COLLECTION PRACTICES.

       (a) Exemption for Communications Involving Legal 
     Proceedings.--Section 803 of the Fair Debt Collection 
     Practices Act (15 U.S.C. 1692a) is amended--
       (1) in paragraph (2)--
       (A) by striking ``communication' means the'' and inserting 
     the following: ``communication'--
       ``(A) means the''; and
       (B) by striking the period at the end and inserting the 
     following: ``; and
       ``(B) does not include communications made pursuant to the 
     Federal Rules of Civil Procedure, in the case of a proceeding 
     in a State court, the rules of civil procedure available 
     under the laws of that State, or a nonjudicial foreclosure 
     proceeding.''; and
       (2) in paragraph (5)--
       (A) by striking ``debt' means any'' and inserting the 
     following: ``debt'--
       ``(A) means any'';
       (B) by striking the period at the end and inserting the 
     following: ``; and
       ``(B) does not include a draft drawn on a bank for a sum 
     certain, payable on demand and signed by the maker.''.
       (b) Collection Activity Following Initial Notice.--Section 
     809 of the Fair Debt Collection Practices Act (15 U.S.C. 
     1692(g)) is amended by adding at the end the following new 
     subsection:
       ``(d) Continuation During Period.--Collection activities 
     and communications may continue during the 30-day period 
     described in subsection (a) unless the consumer requests the 
     cessation of such activities.''.
       (c) Definition of ``Communication''.--Section 803 of the 
     Fair Debt Collection Practices Act (15 U.S.C. 1692a) is 
     amended--

[[Page S11986]]

       (1) by striking ``title--'' and inserting ``title, the 
     following definitions shall apply:''; and
       (2) in paragraph (2)--
       (A) by striking ``term `communication' means'' and 
     inserting ``term `communication'--
       ``(A) means'';
       (B) by striking the period at the end and inserting ``; and
       ``(B) does not include any communication made or action 
     taken to collect on loans made, insured, or guaranteed under 
     the Higher Education Act of 1965.''.

     SEC. 208. RESTRICTION ON ACQUISITIONS OF OTHER INSURED 
                   DEPOSITORY INSTITUTIONS.

       Section 4(f)(12) of the Bank Holding Company Act of 1956 
     (12 U.S.C. 1843(f)(12)) is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following new subparagraph:
       ``(C) in an acquisition in which the insured institution 
     has been found to be undercapitalized by the appropriate 
     Federal or State authority.''.

     SEC. 209. MUTUAL HOLDING COMPANIES.

       Section 10(o) of the Home Owners' Loan Act (12 U.S.C. 
     1467a(o)) is amended--
       (1) by striking paragraph (1) and inserting the following:
       ``(1) Reorganization.--A savings association operating in 
     mutual form may reorganize so as to become a holding 
     company--
       ``(A) by chartering a savings association, the stock of 
     which is to be wholly owned, except as otherwise provided in 
     this section, directly or indirectly by the mutual 
     association and by transferring the substantial part of its 
     assets and liabilities, by merger or otherwise, including all 
     of its insured liabilities, to the interim savings 
     association;
       ``(B) by converting to a stock association charter and 
     simultaneously forming a subsidiary stock holding company 
     that owns 100 percent of the voting stock of the converting 
     association; or
       ``(C) in any other manner approved by the Director, 
     including by the formation of a subsidiary stock holding 
     company, transferring assets and liabilities by merger or 
     otherwise to the subsidiary stock holding company, or through 
     the use of one or more interim institutions.'';
       (2) in paragraph (3)(D)--
       (A) by striking ``savings association'' and inserting ``the 
     mutual holding company or subsidiary stock holding company'';
       (B) by striking ``such capital'' and inserting ``the 
     capital of the association'';
       (C) by striking ``association's''; and
       (D) by inserting ``of the association'' before 
     ``established'';
       (3) in paragraph (5)--
       (A) by inserting ``or subsidiary stock holding company'' 
     before ``may engage'';
       (B) in subparagraph (A)--
       (i) by inserting ``or acquiring'' after ``Investing in''; 
     and
       (ii) by inserting ``, savings bank, or bank'' before the 
     period; and
       (C) in subparagraph (C), by inserting ``or bank'' before 
     the period;
       (4) by striking paragraph (7) and inserting the following:
       ``(7) Chartering and regulation.--
       ``(A) In general.--A mutual holding company shall be 
     chartered by the Director, and a subsidiary stock holding 
     company may be chartered under State law, and such holding 
     companies shall be subject to such regulations as the 
     Director may prescribe. Unless the context otherwise 
     requires, a mutual holding company shall be subject to the 
     other requirements of this section regarding regulation of 
     holding companies.
       ``(B) Conversion to state charter.--A mutual holding 
     company organized pursuant to paragraph (1) may convert its 
     charter to a State mutual holding company charter.
       ``(C) Conversion to federal charter.--Notwithstanding any 
     other provision of Federal law, a mutual holding company 
     organized under State law may convert its State mutual 
     holding company charter to a Federal mutual holding company 
     charter.'';
       (5) in paragraph (8)--
       (A) in subparagraph (A), by inserting ``or subsidiary stock 
     holding company'' after ``company''; and
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) Issuance of shares.--This section shall not prohibit 
     a savings association or subsidiary stock holding company 
     chartered as part of a transaction described in paragraph (1) 
     from--
       ``(i) issuing any nonvoting shares or less than 50 percent 
     of the voting share of such association or subsidiary stock 
     holding company to any person other than the mutual holding 
     company;
       ``(ii) issuing all of the voting shares of such association 
     to a subsidiary stock holding company, if more than 50 
     percent of the voting shares of the subsidiary stock holding 
     company are owned by the mutual holding company; and
       ``(iii) issuing to any person other than the mutual holding 
     company, in connection with the formation of the mutual 
     holding company or at a later date, a separate class of 
     voting shares, the rights and preferences of which are 
     identical to those of the class of voting shares issued to 
     the mutual holding company, except with respect to the 
     payment of dividends.
       ``(C) Mutual savings association.--In the case of a mutual 
     savings association in which holders of accounts or obligors 
     exercise voting rights, such holders of accounts or obligors 
     shall have the right to subscribe on a priority basis for 
     voting shares of the subsidiary stock holding company or 
     savings association chartered pursuant to paragraph (1), 
     pursuant to regulations of the Director, but only with 
     respect to the voting shares issued in connection with the 
     initial reorganization pursuant to paragraph (1). The 
     priority subscription rights applicable to voting shares 
     issued to the mutual holding company in connection with the 
     initial reorganization pursuant to paragraph (1) shall be 
     exercisable at such time as the shares are subsequently sold 
     by the subsidiary savings association or subsidiary stock 
     holding company.'';
       (6) in paragraph (9)(A)(i)(I), by inserting ``, directly or 
     indirectly,'' after ``owned''; and
       (7) in paragraph (10)--
       (A) by striking ``subsection--'' and inserting 
     ``subsection, the following definitions shall apply:''; and
       (B) by adding at the end the following:
       ``(D) Subsidiary stock holding company.--The term 
     `subsidiary stock holding company' means a stock holding 
     company organized under applicable State law, that is wholly-
     owned, except as otherwise provided in this section, by the 
     mutual holding company.''.

     SEC. 210. 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.
                 TITLE III--STREAMLINING AGENCY ACTIONS

     SEC. 301. SCHEDULED MEETINGS OF AFFORDABLE HOUSING ADVISORY 
                   BOARD.

       Section 14(b)(6)(A) of the Resolution Trust Corporation 
     Completion Act (12 U.S.C. 1831q note) is amended--
       (1) by striking ``4 times a year, or more frequently if 
     requested'' and inserting ``2 times a year, or as 
     requested''; and
       (2) by striking ``In each year'' and all that follows 
     through ``located.''.

     SEC. 302. ELIMINATION OF DUPLICATIVE DISCLOSURE OF FAIR 
                   MARKET VALUE OF ASSETS AND LIABILITIES.

       Section 37(a)(3) of the Federal Deposit Insurance Act (12 
     U.S.C. 1831n(a)(3)) is amended by striking subparagraph (D).

     SEC. 303. PAYMENT OF INTEREST IN RECEIVERSHIPS WITH SURPLUS 
                   FUNDS.

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

     SEC. 304. REPEAL OF REPORTING REQUIREMENT ON DIFFERENCES IN 
                   ACCOUNTING STANDARDS.

       Section 37 of the Federal Deposit Insurance Act (12 U.S.C. 
     1831n) is amended by striking subsection (c).

     SEC. 305. AGENCY REVIEW OF COMPETITIVE FACTORS IN BANK MERGER 
                   ACT FILINGS.

       (a) Report Required.--Section 18(c)(4) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1828(c)(4)) is amended by 
     striking ``request reports'' and all that follows through the 
     end of the paragraph and inserting the following: ``request a 
     report on the competitive factors involved from the Attorney 
     General. The report shall be furnished not later than 30 
     calendar days after the date on which it is requested, or not 
     later than 10 calendar days

[[Page S11987]]

     after such date if the requesting agency advises the Attorney 
     General that an emergency exists requiring expeditious 
     action.''.
       (b) Timing of Transaction.--Section 18(c)(6) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1828(c)(6)) is amended by 
     striking the third sentence and inserting the following: ``If 
     the agency has advised the Attorney General of the existence 
     of an emergency requiring expeditious action and has 
     requested a report on the competitive factors within 10 days, 
     the transaction may not be consummated before the fifth 
     calendar day after the date of approval by the agency.''.
       (c) Evaluation of Competitive Effect.--
       (1) Amendments to bank holding company act of 1956.--
     Section 3(c) of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1842(c)) is amended--
       (A) by adding at the end the following new paragraph:
       ``(6) Evaluation of competitive effect.--The Board may not 
     disapprove of a transaction pursuant to paragraph (1)(B) 
     unless the Board takes into account--
       ``(A) competition from institutions, other than depository 
     institutions (as defined in section 3 of the Federal Deposit 
     Insurance Act), that provide financial services;
       ``(B) efficiencies and cost savings that the transaction 
     may create;
       ``(C) deposits of the participants in the transaction that 
     are not derived from the relevant market;
       ``(D) the capacity of savings associations to make small 
     business loans;
       ``(E) lending by institutions other than depository 
     institutions to small businesses; and
       ``(F) such other factors as the Board deems relevant.''; 
     and
       (B) in paragraph (1), by striking ``restraint or trade'' 
     and inserting ``restraint of trade''.
       (2) Amendments to federal deposit insurance act.--Section 
     18(c)(5) of the Federal Deposit Insurance Act (12 U.S.C. 
     1828(c)(5)) is amended--
       (A) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively;
       (B) by inserting ``(A)'' after ``(5)'';
       (C) by striking ``In every case'' and inserting the 
     following:
       ``(B) In every case under this subsection''; and
       (D) by adding at the end the following:
       ``(C) The responsible agency may not disapprove of a 
     transaction pursuant to subparagraph (A), unless the agency 
     takes into account--
       ``(i) competition from institutions that provide financial 
     services;
       ``(ii) efficiencies and cost savings that the transaction 
     may create;
       ``(iii) deposits of the participants in the transaction 
     that are not derived from the relevant markets;
       ``(iv) the capacity of the institutions to make small 
     business loans;
       ``(v) lending by institutions other than depository 
     institutions to small businesses; and
       ``(vi) such other factors as the responsible agency deems 
     relevant.''.

     SEC. 306. TERMINATION OF THE THRIFT DEPOSITOR PROTECTION 
                   OVERSIGHT BOARD.

       (a) In General.--Effective 3 months after the date of 
     enactment of this Act, the Thrift Depositor Protection 
     Oversight Board established under section 21A of the Federal 
     Home Loan Bank Act (hereafter in this section referred to as 
     the ``Board'') is terminated.
       (b) Disposition of Affairs.--
       (1) In general.--Effective on the date of enactment of this 
     Act, the Chairman of the Board (or the designee of the 
     Chairman) may exercise on behalf of the Board any power of 
     the Board necessary to settle and conclude the affairs of the 
     Board.
       (2) Availability of funds.--Funds available to the Board 
     shall be available to the Chairman of the Board to pay 
     expenses incurred in carrying out paragraph (1).
       (c) Savings Provision.--
       (1) Existing rights, duties, and obligations not 
     affected.--Nothing in this Act affects the validity of any 
     right, duty, or obligation of the United States, the Board, 
     the Resolution Trust Corporation, or any other person, that--
       (A) arises under or pursuant to the Federal Home Loan Bank 
     Act, or any other provision of law applicable with respect to 
     the Board; and
       (B) existed on the day before the effective date of the 
     termination of the Board under this Act.
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Board with respect to any 
     function of the Board shall abate by reason of the enactment 
     of this Act.
       (3) Liabilities.--All liabilities arising out of the 
     operation of the Board during the period beginning on August 
     9, 1989, and ending on the date that is 3 months after the 
     date of enactment of this Act shall remain the direct 
     liabilities of the United States. The Secretary of the 
     Treasury shall not be substituted for the Board as a party to 
     any such action or proceeding.
       (4) Continuations of orders, resolutions, determinations, 
     and regulations pertaining to the resolution funding 
     corporation.--
       (A) In general.--Each order, resolution, determination, and 
     regulation regarding the Resolution Funding Corporation shall 
     continue in effect according to its terms until modified, 
     terminated, set aside, or superseded in accordance with 
     applicable law, if such order, resolution, determination, or 
     regulation--
       (i) was issued, made, and prescribed, or allowed to become 
     effective by the Board or by a court of competent 
     jurisdiction, in the performance of functions transferred by 
     this Act; and
       (ii) is in effect on the date that is 3 months after the 
     date of enactment of this Act.
       (B) Enforceability.--All orders, resolutions, 
     determinations, and regulations pertaining to the Resolution 
     Funding Corporation are enforceable by and against--
       (i) the United States prior to the effective date of the 
     transfer of responsibilities to the Secretary of the Treasury 
     under this Act; and
       (ii) the Secretary of the Treasury on and after the 
     effective date of the transfer of responsibilities to the 
     Secretary of the Treasury under this Act.
       (d) Transfer of Certain Resolution Funding Corporation 
     Responsibilities to Secretary of Treasury.--Effective 3 
     months after the date of enactment of this Act, the 
     authorities and duties of the Board under sections 
     21A(a)(6)(I) and 21B of the Federal Home Loan Bank Act are 
     transferred to the Secretary of the Treasury (or the designee 
     of the Secretary).
       (e) Membership of the Affordable Housing Advisory Board.--
     Effective on the date of enactment of this Act, section 
     14(b)(2) of the Resolution Trust Corporation Completion Act 
     (12 U.S.C. 1831q note) is amended by striking subparagraph 
     (C) and redesignating subparagraphs (D) and (E) as 
     subparagraphs (C) and (D), respectively.
                  TITLE IV--DISCLOSURE SIMPLIFICATION

     SEC. 401. ALTERNATIVE COMPLIANCE METHOD FOR APR DISCLOSURE.

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

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

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

     ``SEC. 148. ALTERNATIVE DISCLOSURES.

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

[[Page S11988]]

                         TITLE V--MISCELLANEOUS

     SEC. 501. POSITIONS OF BOARD OF GOVERNORS OF FEDERAL RESERVE 
                   SYSTEM ON THE EXECUTIVE SCHEDULE.

       (a) In General.--
       (1) Positions at level i of the executive schedule.--
     Section 5312 of title 5, United States Code, is amended by 
     adding at the end the following:
       ``Chairman, Board of Governors of the Federal Reserve 
     System.''.
       (2) Positions at level ii of the executive schedule.--
     Section 5313 of title 5, United States Code, is amended--
       (A) by striking ``Chairman, Board of Governors of the 
     Federal Reserve System.''; and
       (B) by adding at the end the following:
       ``Members, Board of Governors of the Federal Reserve 
     System.''.
       (3) Positions at level iii of the executive schedule.--
     Section 5314 of title 5, United States Code, is amended by 
     striking ``Members, Board of Governors of the Federal Reserve 
     System.''.
       (b) Effective Date.--This section and the amendments made 
     by this section shall take effect on the first day of the 
     first pay period for the Chairman and Members of the Board of 
     Governors of the Federal Reserve System beginning on or after 
     the date of enactment of this section.

     SEC. 502. CONSISTENT COVERAGE FOR INDIVIDUALS ENROLLED IN A 
                   HEALTH PLAN ADMINISTERED BY THE FEDERAL BANKING 
                   AGENCIES.

       (a) Enrollment in Chapter 89 Plan.--For purposes of chapter 
     89 of title 5, United States Code, any period of enrollment 
     shall be deemed to be a period of enrollment in a health 
     benefits plan under chapter 89 of such title, if such 
     enrollment is--
       (1) in a health benefits plan administered by the Federal 
     Deposit Insurance Corporation before the termination of such 
     plan on January 3, 1998; or
       (2) subject to subsection (c), in a health benefits plan 
     (not under chapter 89 of such title) with respect to which 
     the eligibility of any employees or retired employees of the 
     Board of Governors of the Federal Reserve System terminates 
     on January 3, 1998.
       (b) Enrollment; Continued Coverage.--
       (1) Enrollment.--Subject to subsection (c), any individual 
     who, on January 3, 1998, is enrolled in a health benefits 
     plan described in paragraph (1) or (2) of subsection (a) may 
     enroll in an approved health benefits plan under chapter 89 
     of title 5, United States Code, either as an individual or 
     for self and family, if, after taking into account the 
     provisions of subsection (a), such individual--
       (A) meets the requirements of that chapter 89 for 
     eligibility to become so enrolled as an employee, annuitant, 
     or former spouse (within the meaning of that chapter); or
       (B) would meet the requirements of that chapter 89 if, to 
     the extent such requirements involve either retirement system 
     under such title 5, such individual satisfies similar 
     requirements or provisions of the Retirement Plan for 
     Employees of the Federal Reserve System.
       (2) Determinations.--Any determination under paragraph 
     (1)(B) shall be made under guidelines established by the 
     Office of Personnel Management in consultation with the Board 
     of Governors of the Federal Reserve System.
       (3) Continued coverage.--Subject to subsection (c), any 
     individual who, on January 3, 1998, is entitled to continued 
     coverage under a health benefits plan described in paragraph 
     (1) or (2) of subsection (a) shall be deemed to be entitled 
     to continued coverage under section 8905a of title 5, United 
     States Code, but only for the same remaining period as would 
     have been allowable under the health benefits plan in which 
     such individual was enrolled on January 3, 1998, if--
       (A) the individual had remained enrolled in that plan; and
       (B) that plan did not terminate, or the eligibility of such 
     individual with respect to that plan did not terminate, as 
     described in subsection (a).
       (4) Comparable treatment.--Subject to subsection (c), any 
     individual (other than an individual under paragraph (3)) 
     who, on January 3, 1998, is covered under a health benefits 
     plan described in paragraph (1) or (2) of subsection (a) as 
     an unmarried dependent child, but who does not then qualify 
     for coverage under chapter 89 of title 5, United States Code, 
     as a family member (within the meaning of that chapter) shall 
     be deemed to be entitled to continued coverage under section 
     8905a of that title, to the same extent and in the same 
     manner as if such individual had, on January 3, 1998, ceased 
     to meet the requirements for being considered an unmarried 
     dependent child of an enrollee under such chapter.
       (5) Effective date.--Coverage under chapter 89 of title 5, 
     United States Code, pursuant to an enrollment under this 
     section shall become effective on January 4, 1998.
       (c) Eligibility for FEHBP Limited to Individuals Losing 
     Eligibility Under Former Health Plan.--Nothing in subsection 
     (a)(2) or any paragraph of subsection (b) (to the extent that 
     paragraph (2) relates to the plan described in subsection 
     (a)(2)) shall be considered to apply with respect to any 
     individual whose eligibility for coverage under the plan does 
     not involuntarily terminate on January 3, 1998.
       (d) Transfers to the Employees Health Benefits Fund.--The 
     Federal Deposit Insurance Corporation and the Board of 
     Governors of the Federal Reserve System shall transfer to the 
     Employees Health Benefits Fund, under section 8909 of title 
     5, United States Code, amounts determined by the Director of 
     the Office of Personnel Management, after consultation with 
     the Federal Deposit Insurance Corporation and the Board of 
     Governors of the Federal Reserve System, to be necessary to 
     reimburse the Fund for the cost of providing benefits under 
     this section not otherwise paid for by the individuals 
     covered by this section. The amounts so transferred shall be 
     held in the Fund and used by the Office of Personnel 
     Management in addition to amounts available under section 
     8906(g)(1) of title 5, United States Code.
       (e) Administration and Regulations.--The Office of 
     Personnel Management--
       (1) shall administer the provisions of this section to 
     provide for--
       (A) a period of notice and open enrollment for individuals 
     affected by this section; and
       (B) no lapse of health coverage for individuals who enroll 
     in a health benefits plan under chapter 89 of title 5, United 
     States Code, in accordance with this section; and
       (2) may prescribe regulations to implement this section.

     SEC. 503. FEDERAL HOUSING FINANCE BOARD.

       Section 2A(b)(2) of the Federal Home Loan Bank Act (12 
     U.S.C. 1422a(b)(2)) is amended--
       (1) by striking subparagraph (B); and
       (2) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively.
                    TITLE VI--TECHNICAL CORRECTIONS

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

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

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

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

     SEC. 603. AMENDMENTS TO THE REVISED STATUTES.

       (a) Waiver of Citizenship Requirement for National Bank 
     Directors.--Section 5146 of the Revised Statutes of the 
     United States (12 U.S.C. 72) is amended in the first 
     sentence, by inserting before the period ``, and waive the 
     requirement of citizenship in the case of not more than a 
     minority of the total number of directors''.
       (b) Technical Amendment to the Revised Statutes.--Section 
     329 of the Revised Statutes of the United States (12 U.S.C. 
     11) is amended by striking ``to be interested in any 
     association issuing national currency under the laws of the 
     United States'' and inserting ``to hold an interest in any 
     national bank''.
       (c) Repeal of Unnecessary Capital and Surplus 
     Requirement.--Section 5138 of the Revised Statutes of the 
     United States (12 U.S.C. 51) is repealed.

     SEC. 604. CONFORMING CHANGE TO THE INTERNATIONAL BANKING ACT.

       Section 4(b) of the International Banking Act of 1978 (12 
     U.S.C. 3102(b)) is amended in the second sentence, by 
     striking paragraph (1) and by redesignating paragraphs (2) 
     through (4) as paragraphs (1) through (3), respectively.
  Ms. MOSELEY-BRAUN. Mr. President, today, Senator Shelby and several 
of my other colleagues on the Banking Committee are introducing the 
Financial Regulatory Relief and Economic Efficiency Act of 1997. I am 
cosponsoring this legislation because I have long been committed to the 
process of reducing unnecessary regulatory burdens on financial 
institutions. Many of the provisions were drafted in consultation with 
the banking regulatory agencies and will remove duplicative, 
unnecessary restrictions that no longer make sense and are no longer 
appropriate, given this era of great change in the financial services 
industry. This bill will allow the banks to be more efficient and cost-
effective in their activities. It will also allow them to better meet 
the needs of the users of the system, the individuals, the communities, 
the businesses, the exporters, the farmers, and all those who depend on 
our financial system. We live in capital-scarce times and that means 
that it is imperative that our financial system provides capital to 
those who need it in the most cost-effective manner possible. We can be 
longer tolerate inefficiencies due to outmoded regulation.
  However, it is important to note that I do not support every 
provision of this bill, and in fact I have serious concerns about 
portions of it. I believe that certain sections of the bill will need 
to be changed significantly as it works its way through the Banking 
Committee and the Senate floor. That said, I want to be a part of this 
process, because I believe in the objectives of the bill: reducing 
unnecessary regulatory burden. Furthermore, I think the issue should be 
addressed in a bipartisan manner.

[[Page S11989]]

This type of effort needs to be a priority for Banking Committee and 
the Senate as a whole, and that is why I am an original cosponsor of 
the Financial Regulatory Relief and Economic Efficiency Act of 1997.
                                 ______