[Congressional Record Volume 144, Number 140 (Thursday, October 8, 1998)]
[House]
[Pages H10208-H10218]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       DEPOSITORY INSTITUTION REGULATORY STREAMLINING ACT OF 1998

  Mrs. ROUKEMA. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4364) to streamline the regulation of depository 
institutions, to safeguard confidential banking and credit union 
supervisory information, and for other purposes, as amended.
  The Clerk read as follows:

                               H.R. 4364

       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 ``Depository 
     Institution Regulatory Streamlining Act of 1998''.
       (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

Sec. 101. Payment of interest on reserve balances at Federal reserve 
              banks.
Sec. 102. Amendments relating to savings and demand deposit accounts at 
              depository institutions.

[[Page H10209]]

Sec. 103. Transfer of Federal reserve surpluses.
Sec. 104. Study of reserve ratios for deposit insurance funds.

    TITLE II--IMPROVING DEPOSITORY INSTITUTION MANAGEMENT PRACTICES

                       Subtitle A--National Banks

Sec. 201. Authority to allow more than 25 directors.
Sec. 202. Loans on or purchases by institutions of their own stock.
Sec. 203. Expedited procedures for certain reorganizations.

                    Subtitle B--Savings Associations

Sec. 211. Noncontrolling investments by savings association holding 
              companies.
Sec. 212. Streamlining thrift service company investment requirements.
Sec. 213. Repeal of dividend notice requirement.
Sec. 214. Updating of authority for community development investments.

                     Subtitle C--Other Institutions

Sec. 221. Prohibition on accrual to insiders of economic benefits from 
              credit union conversions.
Sec. 222. Amendments relating to limited purpose banks.
Sec. 223. Business purpose credit extensions.

    TITLE III--STREAMLINING FEDERAL BANKING AGENCY REQUIREMENTS AND 
          ELIMINATION OF UNNECESSARY OR OUTDATED REQUIREMENTS

Sec. 301. ``Plain English'' requirement for Federal banking agency 
              rules.
Sec. 302. Call report simplification.
Sec. 303. Purchased mortgage service rights.
Sec. 304. Judicial review of receivership appointment.
Sec. 305. Elimination of outdated statutory minimum capital 
              requirements.
Sec. 306. Elimination of individual branch capital requirements.
Sec. 307. Amendment to shareholder notice provisions relating to 
              consolidations and mergers.
Sec. 308. Payment of interest in receiverships with surplus funds.
Sec. 309. Repeal of deposit broker notification and recordkeeping 
              requirement.
Sec. 310. Allowances for certain extensions of credit to executive 
              officers.
Sec. 311. Federal Reserve Act lending limits.
Sec. 312. Repeal of Bank Holding Company Act provision limiting savings 
              bank life insurance.
Sec. 313. Amendment to section 5137 of the Revised Statutes of the 
              United States.

                  TITLE IV--DISCLOSURE SIMPLIFICATION

Sec. 401. Alternative disclosure for variable rate, open-ended home 
              secured credit.

             TITLE V--BANK EXAMINATION REPORT PRIVILEGE ACT

Sec. 501. Amendment to the Federal Deposit Insurance Act.
Sec. 502. Amendment to Federal Credit Union Act.

                    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. Waiver of citizenship requirement for national bank 
              directors.
Sec. 604. Technical amendment to prohibition on Comptroller interests 
              in national banks.
Sec. 605. Applicability of limitation to prior investments.

                    TITLE VII--SPECIAL RESERVE FUNDS

Sec. 701. Abolition of special reserve funds.

                   TITLE I--IMPROVING MONETARY POLICY

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

       (a) In General.--Section 19(b) of the Federal Reserve Act 
     (12 U.S.C. 461(b)) is amended 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 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) Immediate Increase in the Number of Interaccount 
     Transfers Allowed Each Month.--Section 2 of Public Law 93-100 
     (12 U.S.C. 1832) is amended--
       (1) by redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively; and
       (2) by inserting after subsection (a) the following:
       ``(b) Interaccount Transfers.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, any depository institution may permit the owner of any 
     deposit or account on which interest or dividends are paid to 
     make up to 24 transfers per month, for any purpose, to 
     another account of the owner in the same institution.
       ``(2) Rule of construction.--Nothing in this subsection 
     shall be construed to prevent an account offered pursuant to 
     this subsection from being considered a transaction account 
     (as defined in section 19(b) of the Federal Reserve Act (12 
     U.S.C. 461(b)) for purposes of such Act.''.
       (b) Now Accounts Authorized for All Businesses After 
     2004.--
       (1) In general.--Effective on the date provided in 
     paragraph (3), section 2 of Public Law 93-100 (12 U.S.C. 
     1832(a)(2)) (as amended by subsection (a) of this section) 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.''.
       (2) Repeal of prohibition on payment of interest on demand 
     deposits.--
       (A) Federal reserve act.--Section 19 of the Federal Reserve 
     Act (12 U.S.C. 371a) is amended by striking subsection (i).
       (B) Home owners' loan act.--The 1st 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''.
       (C) Federal deposit insurance act.--Section 18 of the 
     Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by 
     striking subsection (g).
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on October 1, 2004.

     SEC. 103. TRANSFER OF FEDERAL RESERVE SURPLUSES.

       (a) Payments From Dividends and Surplus of Federal Reserve 
     Banks.--Section 7(a)(3) of the Federal Reserve Act (12 U.S.C. 
     289(3)) is amended by striking ``fiscal years 1997 and 1998'' 
     and inserting ``fiscal years 1998 through 2003''.
       (b) Additional Transfers for Fiscal Years 1999 Through 
     2003.--
       (1) In general.--In addition to the amounts required to be 
     transferred from the surplus funds of the Federal reserve 
     banks pursuant to section 7(a)(3) of the Federal Reserve Act 
     and section 3002(b) of the Omnibus Budget Reconciliation Act 
     of 1993, the Federal reserve banks shall transfer from such 
     surplus funds to the Board of Governors of the Federal 
     Reserve System for transfer to the Secretary of the Treasury 
     for deposit in the general fund of the Treasury, such sums as 
     are necessary to equal the net cost of section 101, as 
     estimated by the Office of Management and Budget.
       (2) Allocation by fed.--Of the total amount required to be 
     paid by the Federal reserve banks under paragraph (1) for 
     fiscal years 1999 through 2003, the Board of Governors of the 
     Federal Reserve System shall determine the amount each such 
     bank shall pay in such fiscal year.
       (3) Replenishment of surplus fund prohibited.--No Federal 
     reserve bank may replenish such bank's surplus fund by the 
     amount of any transfer by such bank under paragraph (1) 
     during the fiscal year for which such transfer is made.

     SEC. 104. STUDY OF RESERVE RATIOS FOR DEPOSIT INSURANCE 
                   FUNDS.

       (a) Review and Recommendation.--The Board of Directors of 
     the Federal Deposit Insurance Corporation, in consultation 
     with the Board of Governors of the Federal Reserve System and 
     the Secretary of the Treasury, shall--
       (1) conduct a study of the adequacy of the deposit 
     insurance funds, taking into account--
       (A) expected operating expenses, case resolution 
     expenditures and income, and the effect of assessments on 
     members' earnings and capital;
       (B) historical failure rates and loss experience;
       (C) recent changes in the law, including statutory changes 
     requiring prompt corrective action, least-cost resolutions, 
     and risk-based assessment systems;

[[Page H10210]]

       (D) the income of such funds from investments;
       (E) the potential implication of the Year 2000 computer 
     problem (as defined in section 2(b)(5) of the Examination 
     Parity and Year 2000 Readiness for Financial Institutions 
     Act) and industry consolidation; and
       (F) the historical experience of the Corporation in 
     providing rebates or credits from any deposit insurance fund; 
     and
       (2) recommend to the Congress--
       (A) an appropriate range of reserve ratios between the net 
     worth of any deposit insurance fund and the aggregate amount 
     of insured deposits insured by such fund; and
       (B) an appropriate mechanism for rebating or providing 
     credit from any deposit insurance fund when the balance of 
     the fund exceeds any applicable reserve ratio.
       (b) Report Required.--The Board of Directors of the Federal 
     Deposit Insurance Corporation, in consultation with the Board 
     of Governors of the Federal Reserve System and the Secretary 
     of the Treasury, shall submit a report to the Congress before 
     June 30, 1999, containing--
       (1) the findings and conclusions of the study required 
     under subsection (a)(1); and
       (2) the recommendations required under subsection (a)(2).

    TITLE II--IMPROVING DEPOSITORY INSTITUTION MANAGEMENT PRACTICES

                       Subtitle A--National Banks

     SEC. 201. AUTHORITY TO ALLOW MORE THAN 25 DIRECTORS.

       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. 202. LOANS ON OR PURCHASES BY INSTITUTIONS OF THEIR OWN 
                   STOCK.

       (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.''.
       (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.''.

     SEC. 203. 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 bank may, with the approval 
     of the Comptroller, pursuant to regulations prescribed by the 
     Comptroller, and upon the affirmative vote of the 
     shareholders of such bank owning at least two-thirds of the 
     outstanding capital stock of such bank, 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 bank;
       ``(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 bank in exchange for their 
     shares of stock of the bank;
       ``(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 
     bank 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) Applicability of Other Criteria.--In considering a 
     reorganization plan under this section, the Comptroller 
     shall--
       ``(1) require the national bank to provide notice to the 
     public in accordance with section 18(c)(3) of the Federal 
     Deposit Insurance Act; and
       ``(2) apply the same standards and the same criteria as are 
     applicable to a transaction under section 18(c) of the 
     Federal Deposit Insurance Act, other than the requirements of 
     paragraphs (4) and (6) of such section.
       ``(d) 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 
     national bank who has voted against the reorganization at the 
     meeting referred to in subsection (b)(4), or has given notice 
     in writing at or before that meeting to the presiding officer 
     that the shareholder dissents from the reorganization plan, 
     shall be entitled to receive the value of the shares of the 
     shareholder, as provided by section 3 for the merger of a 
     national bank.
       ``(e) Effect of Reorganization.--The corporate existence of 
     a national bank that reorganizes in accordance with this 
     section shall not be deemed to have been affected in any way 
     by reason of such reorganization.
       ``(f) Approval Under the Bank Holding Company Act of 
     1956.--Notwithstanding the preceding provisions of this 
     section, it shall be unlawful for any action to be taken that 
     causes any company to become a bank holding company or any 
     bank to become a subsidiary of a bank holding company, except 
     with the prior approval of the Board of Governors of the 
     Federal Reserve System pursuant to section 3 of the Bank 
     Holding Company Act of 1956 (12 U.S.C. 1842).''.

                    Subtitle B--Savings Associations

     SEC. 211. 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 written approval 
     of the Director,'' after ``or to retain'';
       (2) by striking ``subsidiary, or in'' and inserting 
     ``subsidiary. In''; and
       (3) by striking ``to so acquire or retain'' and inserting 
     ``it shall be unlawful, and the Director may not authorize 
     such a company, to acquire or retain''.

     SEC. 212. STREAMLINING SAVINGS ASSOCIATION 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 organized under the laws of any State, if 
     such company's entire capital stock is available for purchase 
     only by savings associations. 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).''.

     SEC. 213. 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) [Repealed].''.

     SEC. 214. UPDATING OF AUTHORITY FOR COMMUNITY DEVELOPMENT 
                   INVESTMENTS.

       Section 5(c) of the Home Owners' Loan Act (12 U.S.C. 
     1464(c)) is amended--
       (1) in paragraph (3), by striking subparagraph (A) and 
     redesignating subparagraphs (B) and (C) as subparagraphs (A) 
     and (B), respectively; and
       (2) by adding at the end the following new paragraph:
       ``(7) Community development investments.--
       ``(A) In general.--Investments in real property and 
     obligations secured by liens on real property 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), are 
     permitted, subject to subparagraph (B).
       ``(B) Limitations.--The aggregate amount of investments of 
     a savings association under subparagraph (A) shall not exceed 
     the sum of 5 percent of the savings association's capital 
     stock actually paid in and unimpaired and 5 percent of the 
     savings association's unimpaired surplus fund, unless the 
     Director determines by order that a higher amount will pose 
     no significant risk to the affected deposit insurance fund, 
     and that the savings association is adequately capitalized, 
     in which case the aggregate amount of such investments shall 
     not exceed an amount equal to the sum of 10 percent of the 
     savings association's capital stock actually paid in and 
     unimpaired and 10 percent of the savings association's 
     unimpaired surplus fund.''.

                     Subtitle C--Other Institutions

     SEC. 221. PROHIBITION ON ACCRUAL TO INSIDERS OF ECONOMIC 
                   BENEFITS FROM CREDIT UNION CONVERSIONS.

       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) Prohibition on Economic Benefit From Conversion for 
     Credit Union Officers, Directors, and Committee Members.--
       ``(1) In general.--An individual who is or, at any time 
     during the 5-year period preceding any conversion described 
     in paragraph (2), was a director, committee member, or senior 
     management official of an insured credit union described in 
     subparagraph (A) or (B) of such paragraph (in connection with

[[Page H10211]]

     such conversion) may not receive any economic benefit as a 
     result of the conversion with regard to the shares or 
     interests of such director, member, or officer in the former 
     insured credit union or in any resulting insured depository 
     institution.
       ``(2) Covered conversions.--The following conversions are 
     described in this paragraph for purposes of paragraph (1):
       ``(A) The conversion of an insured credit union into an 
     insured depository institution.
       ``(B) The conversion from the mutual form to the stock form 
     of an insured depository institution which resulted from a 
     prior conversion of an insured credit union into such insured 
     depository institution.
       ``(3) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       ``(A) Insured credit union.--The term `insured credit 
     union' has the meaning given to such term in section 101(7) 
     of the Federal Credit Union Act.
       ``(B) Senior management official.--The term `senior 
     management official' means a chief executive officer, an 
     assistant chief executive officer, a chief financial officer, 
     and any other senior executive officer (as defined by the 
     appropriate Federal banking agency pursuant to section 
     32(f)).''.

     SEC. 222. AMENDMENTS RELATING TO LIMITED PURPOSE BANKS.

       Section 4(f) of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1843(f)) is amended--
       (1) in paragraph (2)(A)(ii)--
       (A) by striking ``and'' at the end of subclause (IX);
       (B) by inserting ``and'' after the semicolon at the end of 
     subclause (X); and
       (C) by inserting after subclause (X) the following new 
     subclause:

       ``(XI) assets that are derived from, or are incidental to, 
     activities in which institutions described in section 
     2(c)(2)(F) are permitted to engage,'';

       (2) in paragraph (2)--
       (A) 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--''; and
       (B) by striking subparagraph (B) and inserting the 
     following new subparagraphs:
       ``(B) any bank subsidiary of such company engages in any 
     activity in which the bank was not lawfully engaged as of 
     March 5, 1987, unless the bank is well managed and well 
     capitalized;
       ``(C) any bank subsidiary of such company both--
       ``(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; 
     or
       ``(D) after the date of the 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 such bank's 
     account at a Federal reserve bank, on behalf of an affiliate, 
     other than an overdraft described in paragraph (3).''; and
       (3) by striking paragraphs (3) and (4) and inserting the 
     following new paragraphs:
       ``(3) Permissible overdrafts described.--For purposes of 
     paragraph (2)(D), 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; or
       ``(B) such overdraft--
       ``(i) is permitted or incurred on behalf of an affiliate 
     which 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 which 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.
       ``(4) Divestiture in case of loss of exemption.--If any 
     company described in paragraph (1) fails to continue to 
     qualify for the exemption provided under such paragraph by 
     operation of paragraph (2), the company shall immediately 
     notify the Board that the company has failed to continue to 
     qualify for such exemption, and the 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) received approval from the Board of a plan to 
     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.''.

     SEC. 223. 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) which extends credit through credit 
     card accounts for qualified business purposes shall not be 
     treated as engaging in the business of making commercial 
     loans by reason of such extensions of credit.
       ``(2) Qualified business purpose.--
       ``(A) In general.--The Board shall prescribe regulations 
     defining the term `qualified business purposes' for purposes 
     of this subsection.
       ``(B) Certain business purposes excluded.--In defining the 
     term `qualified business purposes' under subparagraph (A), 
     the Board--
       ``(i) may not treat extensions of credit through a credit 
     card account for expenditures for capital improvements, 
     acquisitions of inventory, or other large acquisitions as a 
     qualified business purpose for credit card accounts; and
       ``(ii) may treat extensions of credit through a credit card 
     account for expenditures involving employee travel, 
     entertainment, and subsistence, purchases involving a small 
     number of items and low-dollar amounts, and other small 
     acquisitions as qualified business purposes for credit card 
     accounts.
       ``(3) Credit card defined.--For purposes of this 
     subsection, the term `credit card' has the same meaning as in 
     section 103 of the Truth In Lending Act.''.

    TITLE III--STREAMLINING FEDERAL BANKING AGENCY REQUIREMENTS AND 
          ELIMINATION OF UNNECESSARY OR OUTDATED REQUIREMENTS

     SEC. 301. ``PLAIN ENGLISH'' REQUIREMENT FOR FEDERAL BANKING 
                   AGENCY RULES.

       (a) In General.--Each Federal banking agency shall use 
     plain English in all proposed and final rulemakings published 
     by the agency in the Federal Register after January 1, 1999.
       (b) Report.--Not later than June 1, 2000, each Federal 
     banking agency shall submit to the Congress a report that 
     describes how the agency has complied with subsection (a).
       (c) Definitions.--For purposes of this section and section 
     302, the terms ``Federal banking agency'' and ``State bank 
     supervisor'' have the meanings given such terms in section 3 
     of the Federal Deposit Insurance Act.

     SEC. 302. 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 (after consulting with State bank 
     supervisors) 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 July 1, 2000, 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 (after consulting with State 
     bank supervisors) 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 (after consulting with State bank supervisors) 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. 303. PURCHASED MORTGAGE SERVICE RIGHTS.

       Section 475 of the Federal Depository Insurance Corporation 
     Improvement Act of 1991 (12 U.S.C. 1828 note) is amended--
       (1) in subsection (a)(1), by inserting ``(or such other 
     percentage exceeding 90 percent but not exceeding 100 
     percent, as may be determined under subsection (b))'' after 
     ``90 percent''; and
       (2) by redesignating subsections (b) and (c) as subsections 
     (c) and (d), respectively, and by inserting after subsection 
     (a) the following new subsection:
       ``(b) Authority to Determine Percentage by Which to 
     Discount Value of Servicing Rights.--
       ``(1) In general.--Notwithstanding subsection (a)(1), the 
     appropriate Federal banking agencies may allow readily 
     marketable purchased mortgage servicing rights to be valued 
     at more than 90 percent of their fair market value but at not 
     more than 100 percent of such value, if such agencies jointly 
     make a finding before the end of the 180-day period beginning 
     on the date of the enactment of the Depository Institution 
     Regulatory Streamlining Act of 1998 that such valuation would 
     not have an adverse affect on the deposit insurance funds or 
     the safety and soundness of insured depository institutions.

[[Page H10212]]

       ``(2) Joint rulemaking.--Any regulations prescribed 
     pursuant to paragraph (1) shall be prescribed jointly by the 
     Federal banking agencies.''.

     SEC. 304. JUDICIAL REVIEW OF RECEIVERSHIP APPOINTMENTS.

       (a) Appointment for National Bank.--Section 2 of the 
     National Bank Receivership Act (12 U.S.C. 191) is amended--
       (1) by inserting ``(a) Appointment of Receiver.--'' before 
     ``The Comptroller''; and
       (2) by adding at the end the following new subsection:
       ``(b) Judicial Review.--Within 30 days after the 
     appointment under subsection (a) of a receiver for a national 
     bank, the national bank may bring an action in the United 
     States district court for the judicial district in which the 
     home office of the bank is located, or in the United States 
     District Court for the District of Columbia, for an order 
     requiring the Comptroller to remove the receiver, and the 
     court shall, on the merits, dismiss the action or direct the 
     Comptroller to remove the receiver.''.
       (b) Appointment of Federal Deposit Insurance Corporation.--
     Section 11(c)(7) of the Federal Deposit Insurance Act (12 
     U.S.C. 1811(c)(7)) is amended to read as follows:
       ``(7) Judicial review.--Within 30 days after the 
     Corporation is appointed as conservator or receiver for an 
     insured depository institution under paragraph (4), (9), or 
     (10), the institution may bring an action in the United 
     States district court for the judicial district in which the 
     home office of the institution is located, or in the United 
     States District Court for the District of Columbia, for an 
     order requiring the Corporation to be removed as the 
     conservator or receiver, and the court shall, on the merits, 
     dismiss the action or direct the Corporation to be removed as 
     the conservator or receiver.''.

     SEC. 305. ELIMINATION OF OUTDATED STATUTORY MINIMUM CAPITAL 
                   REQUIREMENTS.

       Section 5138 of the Revised Statutes of the United States 
     (12 U.S.C. 51) is repealed.

     SEC. 306. ELIMINATION OF INDIVIDUAL BRANCH CAPITAL 
                   REQUIREMENTS.

       Section 5155(c) of the Revised Statutes of the United 
     States (12 U.S.C. 36(c)) is amended--
       (1) in the second sentence, by striking ``, without regard 
     to the capital requirements of this section,''; and
       (2) by striking the third sentence.

     SEC. 307. AMENDMENT TO SHAREHOLDER NOTICE PROVISIONS RELATING 
                   TO CONSOLIDATIONS AND MERGERS.

       (a) Section 2(a) of the Act of August 17, 1950, entitled 
     ``An Act to provide for the conversion of national banking 
     associations into and their merger or consolidation with 
     State banks, and for other purposes.'' (12 U.S.C. 214a(a)) is 
     amended by striking ``registered mail or by certified''.
       (b) Sections 2(a) and 3(a)(2) of the National Bank 
     Consolidation and Merger Act (12 U.S.C. 215(a) and 
     215a(a)(2)) are each amended by striking ``certified or 
     registered'' each place it appears.

     SEC. 308. 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. 309. 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. 310. ALLOWANCES FOR CERTAIN EXTENSIONS OF CREDIT TO 
                   EXECUTIVE OFFICERS.

       Section 22(g) of the Federal Reserve Act (12 U.S.C. 375a) 
     is amended--
       (1) by redesignating paragraphs (6) through (10) as 
     paragraphs (8) through (12), respectively;
       (2) by inserting after paragraph (5) the following new 
     paragraphs:
       ``(6) A member bank may extend to any executive officer of 
     the bank a home equity line of credit which does not exceed 
     $100,000 and is secured by a lien on the primary residence of 
     the executive officer, to the extent that the aggregate 
     amount of such lien and all other outstanding extensions of 
     credit secured by liens on such primary residence does not 
     exceed the appraised value of such residence.
       ``(7) A member bank may extend credit to any executive 
     officer of the bank in an amount not to exceed the greater 
     of--
       ``(A) the amount which is the lesser of 2.5 percent of the 
     aggregate amount of capital and unimpaired surplus of the 
     bank or $100,000; or
       ``(B) $25,000,

     if, at the time the credit is extended, the extension of 
     credit is secured by readily marketable assets that have a 
     fair market value of not less than twice the amount of credit 
     extended.''; and
       (3) in paragraph (8) (as so redesignated by paragraph (1) 
     of this section), by striking ``(3) and (4)'' and inserting 
     ``(3), (4), (6), and (7)''.

     SEC. 311. FEDERAL RESERVE ACT LENDING LIMITS.

       Section 11(m) of the Federal Reserve Act (12 U.S.C. 248(m)) 
     is amended to read as follows:
       ``(m) [Repealed].''.

     SEC. 312. REPEAL OF BANK HOLDING COMPANY ACT PROVISION 
                   LIMITING SAVINGS BANK LIFE INSURANCE.

       Section 3(f) of the Bank Holding Company Act of 1956 (12 
     U.S.C. 1842(f)) is amended to read as follows:
       ``(f) [Repealed].''.

     SEC. 313. AMENDMENT TO SECTION 5137 OF THE REVISED STATUTES 
                   OF THE UNITED STATES.

       (a) In General.--Section 5137 of the Revised Statutes of 
     the United States (12 U.S.C. 29) is amended by adding at the 
     end the following new subsection:
       ``(d) Additional Extension for Passive Investments in 
     Subsurface Rights and Interests.--
       ``(1) In General.--With respect to subsurface rights of 
     real estate, and interests in such rights, which a national 
     bank holds pursuant to the prior approval of the Comptroller 
     of the Currency under subsection (b), the national bank may 
     apply for, and the Comptroller of the Currency may approve, 
     possession by the bank of such rights and interests for an 
     additional period not to exceed 5 years if--
       ``(A) the national bank acquired the property pursuant to 
     the paragraphs designated the `Second', `Third', and `Fourth' 
     of subsection (a);
       ``(B) the national bank--
       ``(i) holds the rights or interest passively; and
       ``(ii) is not engaged in production, extraction, 
     exploration, or other active use of the rights or interests;
       ``(C) the national bank--
       ``(i) values the subsurface rights and interests in such 
     rights on the books of the bank for no more than a nominal 
     amount; and
       ``(i) separately discloses the aggregate amount of earnings 
     from the rights and interests in the annual financial 
     statements of the bank; and
       ``(D) the Comptroller of the Currency determines that the 
     possession of such rights and interests is not inconsistent 
     with the safety and soundness of the national bank.
       ``(2) Authority of comptroller of the currency to require 
     divestiture.--The Comptroller of the Currency may order, at 
     any time, a national bank which holds subsurface rights of 
     real estate, and interests in such rights, pursuant to 
     paragraph (1) to divest such rights and interests if the 
     Comptroller determines that continued ownership of such 
     rights or interests is detrimental to the national bank.''.
       (b) Technical Amendments to Redesignate Undesignated 
     Paragraphs as Subsections.--Section 5137 of the Revised 
     Statutes of the United States (12 U.S.C. 29) is amended--
       (1) in the 1st undesignated paragraph by striking ``5137. A 
     national banking association may purchase'' and inserting the 
     following:

     ``SEC. 5137. POWER TO HOLD REAL ESTATE.

       ``(a) In General.--A national banking association may 
     purchase'';
       (2) in the 3d undesignated paragraph, by striking ``For 
     real estate in the possession of a national banking 
     association upon application'' and inserting the following:
       ``(b) Extension of Divestment Period Authorized For 
     Ineligible Real Estate.--For real estate in the possession of 
     a national banking association upon application''; and
       (3) in the 4th undesignated paragraph, by striking 
     ``Notwithstanding the five-year holding limitation of this 
     section'' and inserting the following:
       ``(c) Extension of Holding Period Under Certain 
     Circumstances.--Notwithstanding the 5-year holding period 
     limitation contained in subsection (a)''.

                  TITLE IV--DISCLOSURE SIMPLIFICATION

     SEC. 401. ALTERNATIVE DISCLOSURE FOR VARIABLE RATE, OPEN-
                   ENDED HOME SECURED CREDIT.

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

             TITLE V--BANK EXAMINATION REPORT PRIVILEGE ACT

     SEC. 501. AMENDMENT TO THE FEDERAL DEPOSIT INSURANCE ACT.

       The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) 
     is amended by adding at the end the following new section:

     ``SEC. 45. BANK SUPERVISORY PRIVILEGE.

       ``(a) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Depository institution.--The term `depository 
     institution' includes--
       ``(A) any institution which is treated in the same manner 
     as an insured depository institution under paragraph (3), 
     (4), (5), or (9) of section 8(b); and
       ``(B) any subsidiary or other affiliate of an insured 
     depository institution or an institution described in 
     subparagraph (A).
       ``(2) Supervisory process.--The term `supervisory process' 
     means any activity engaged in by a Federal banking agency to 
     carry out the official responsibilities of the agency with 
     regard to the regulation or supervision of depository 
     institutions.
       ``(3) Confidential supervisory information.--Subject to 
     paragraph (4), the term

[[Page H10213]]

     `confidential supervisory information' means any of the 
     following information, or any portion of any such 
     information, which is treated as, or considered to be, 
     confidential information by a Federal banking agency, 
     regardless of the medium in which the information is conveyed 
     or stored:
       ``(A) Any report of examination, inspection, visitation, or 
     investigation, and information prepared or collected by a 
     Federal banking agency in connection with the supervisory 
     process, including any computer file, work paper, or similar 
     document.
       ``(B) Any correspondence of communication from a Federal 
     banking agency to a depository institution as part of an 
     examination, inspection, visitation, or investigation by a 
     Federal banking agency.
       ``(C) Any correspondence, communication, or document, 
     including any compliance and other reports, created by a 
     depository institution in response to any request, inquiry, 
     or directive from a Federal banking agency in connection with 
     any examination, inspection, visitation, or investigation and 
     provided to a Federal banking agency.
       ``(D) Any record of a Federal banking agency to the extent 
     it contains information derived from any report, 
     correspondence, communication or other information described 
     in subparagraph (A), (B), or (C).
       (4) Ordinary business records excluded.--The term 
     `confidential supervisory information' shall not include any 
     book or record in the possession of the depository 
     institution routinely prepared by the depository institution 
     and maintained in the ordinary course of business or any 
     information required to be made publicly available by any 
     Federal law or regulation.
       ``(b) Bank Supervisory Privilege.--
       ``(1) Privilege established.--
       ``(A) In general.--All confidential supervisory information 
     shall be the property of the Federal banking agency that 
     created or requested the information and shall be privileged 
     from disclosure to any other person.
       ``(B) Prohibition on unauthorized disclosures.--No person 
     in possession of confidential supervisory information may 
     disclose such information, in whole or in part, without the 
     prior authorization of the Federal banking agency that 
     created or requested the information, except for a disclosure 
     made in published statistical material that does not 
     disclose, either directly or when used in conjunction with 
     publicly available information, the affairs of any person.
       ``(C) Agency waiver.--The Federal banking agency may waive, 
     in whole or in part, in the discretion of the agency, any 
     privilege established under this paragraph.
       ``(2) Exception.--No provision of paragraph (1) shall be 
     construed as preventing access to confidential supervisory 
     information by duly authorized committees of the United 
     States Congress or the Comptroller General of the United 
     States.
       ``(c) Treatment of State and Foreign Supervisory 
     Information.--In any proceeding before a court of the United 
     States, in which a person seeks to compel production or 
     disclosure by a State bank supervisor, foreign bank 
     regulatory or supervisory authority, Federal banking agency, 
     or other person, of information or a document prepared or 
     collected by a State bank supervisor or foreign bank 
     regulatory or supervisory authority that would, had they been 
     prepared or collected by a Federal banking agency, be 
     confidential supervisory information for purposes of this 
     section, the information or document shall be privileged to 
     the same extent that the information and documents of Federal 
     banking agencies are privileged under this Act.
       ``(d) Other Privileges Not Waived by Disclosure to Banking 
     Agency.--The submission by a depository institution of any 
     information to a Federal banking agency, a State bank 
     supervisor, or a foreign banking authority for any purpose in 
     the course of the supervisory process of such agency or 
     supervisor shall not be construed as waiving, destroying, or 
     otherwise affecting any privilege such institution may claim 
     with respect to such information under Federal or State law.
       ``(e) Discovery and Disclosure of Information.--
       ``(1) Information available only from banking agency.--
       ``(A) In general.--A person seeking discovery or 
     disclosure, in whole or in part, of confidential supervisory 
     information may not seek to obtain such information through 
     subpoena, discovery procedures, or other process from any 
     person, except that such information may be sought in 
     accordance with this section from the Federal banking agency 
     that created or requested the information.
       ``(B) Requests submitted to banking agency.--Any request 
     for discovery or disclosure of confidential supervisory 
     information shall be made to the Federal banking agency that 
     created or requested the information, which shall determine 
     within a reasonable time period whether to disclose such 
     information pursuant to procedures and criteria established 
     in regulations.
       ``(2) Exclusive federal court jurisdiction over disputes.--
       ``(A) In general.--Federal courts shall have exclusive 
     jurisdiction over actions or proceedings in which any party 
     seeks to compel disclosure of confidential supervisory 
     information.
       ``(B) Judicial review.--Judicial review of the final action 
     of a Federal banking agency with regard to the disposition of 
     a request for confidential supervisory information shall be 
     before a district court of the United States of competent 
     jurisdiction, subject to chapter 7 of part I of title 5, 
     United States Code.
       ``(C) Right to appeal.--Any court order that compels 
     production of confidential supervisory information may be 
     immediately appealed by the Federal banking agency and the 
     order compelling production shall be automatically stayed, 
     pending the outcome of such appeal.
       ``(f) Subpoenas.--
       ``(1) Authority to intervene.--In the case of any action or 
     proceeding to compel compliance with a subpoena, order, 
     discovery request, or other judicial or administrative 
     process with respect to any confidential supervisory 
     information relating to any depository institution, a Federal 
     banking agency and the depository institution may intervene 
     in such action or proceeding for the purpose of--
       ``(A) enforcing the limitations established in paragraph 
     (1) of subsections (b) and (e);
       ``(B) seeking the withdrawal of any compulsory process with 
     respect to such information; and
       ``(C) registering appropriate objections with respect to 
     the action or proceeding to the extent the action or 
     proceeding relates to or involves such information.
       ``(2) Right to appeal.--Any court order that compels 
     production of confidential supervisory information may be 
     immediately appealed by the Federal banking agency and the 
     order compelling production shall be automatically stayed, 
     pending the outcome of such appeal.
       ``(g) Regulations.--
       ``(1) Authority to prescribe.--Each Federal banking agency 
     may prescribe such regulations as the agency considers to be 
     appropriate, after consultation with the other Federal 
     banking agencies and the National Credit Union Administration 
     Board, to carry out the purposes of this section.
       ``(2) Authority to require notice.--Any regulations 
     prescribed by a Federal banking agency under paragraph (1) 
     may require any person in possession of confidential 
     supervisory information to notify the Federal banking agency 
     whenever the person is served with a subpoena, order, 
     discovery request, or other judicial or administrative 
     process requiring the personal attendance of such person as a 
     witness or requiring the production of such information in 
     any proceeding.
       ``(h) Access in Accordance With Regulations and Orders.--
     Notwithstanding any other provision of this section, the 
     Federal banking agency may, without waiving any privilege, 
     authorize access to confidential supervisory information for 
     any appropriate governmental, law enforcement, or public 
     purpose in accordance with agency regulations or orders.''.

     SEC. 502. AMENDMENT TO THE FEDERAL CREDIT UNION ACT.

       Title II of the Federal Credit Union Act (12 U.S.C. 1781 et 
     seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 215. CREDIT UNION SUPERVISORY PRIVILEGE.

       ``(a) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Supervisory process.--The term `supervisory process' 
     means any activity engaged in by the Administration to carry 
     out the official responsibilities of the Administration with 
     regard to the regulation or supervision of credit unions.
       ``(2) Confidential supervisory information.--The term 
     `confidential supervisory information' means any of the 
     following information, or any portion of any such 
     information, which is treated as, or considered to be, 
     confidential information by the Administration, regardless of 
     the medium in which the information is conveyed or stored:
       ``(A) Any report of examination, inspection, visitation, or 
     investigation, and information prepared or collected by the 
     Administration in connection with the supervisory process, 
     including any computer file, work paper, or similar document.
       ``(B) Any correspondence or communication from the 
     Administration to a credit union arising from or relating to 
     an examination, inspection, visitation, or investigation by 
     the Administration.
       ``(C) Any correspondence, communication, or document, 
     including any compliance and other reports, created by a 
     credit union in response to any request, inquiry, or 
     directive from the Administration in connection with any 
     examination, inspection, visitation, or investigation and 
     provided to the Administration, other than any book or record 
     in the possession of the credit union routinely prepared by 
     the credit union and maintained in the ordinary course of 
     business or any information required to be made publicly 
     available by any Federal law or regulation.
       ``(D) Any record of the Administration to the extent it 
     contains information derived from any report, correspondence, 
     communication or other information described in subparagraph 
     (A), (B), or (C).
       ``(b) Credit Union Supervisory Privilege.--
       ``(1) Privilege established.--
       ``(A) In general.--All confidential supervisory information 
     shall be the property of the Administration and shall be 
     privileged from disclosure to any other person.
       ``(B) Prohibition on unauthorized disclosures.--No person 
     in possession of confidential supervisory information may 
     disclose

[[Page H10214]]

     such information, in whole or in part, without the prior 
     authorization of the Administration, except for a disclosure 
     made in published statistical material that does not 
     disclose, either directly or when used in conjunction with 
     publicly available information, the affairs of any person.
       ``(C) Agency waivers.--The Board may waive, in whole or in 
     part, in the discretion of the Board, any privilege 
     established under this paragraph.
       ``(2) Exception.--No provision of paragraph (1) shall be 
     construed as preventing access to confidential supervisory 
     information by duly authorized committees of the United 
     States Congress or the Comptroller General of the United 
     States.
       ``(c) Other Privileges Not Waived by Disclosure to 
     Administration.--The submission by a credit union of any 
     information to the Administration or a State credit union 
     supervisor for any purpose in the course of the supervisory 
     process of the Administration or such supervisor shall not be 
     construed as waiving, destroying, or otherwise affecting any 
     privilege such institution may claim with respect to such 
     information under Federal or State law.
       ``(d) Discovery and Disclosure of Information.--
       ``(1) Information available only from administration.--
       ``(A) In general.--A person seeking discovery or 
     disclosure, in whole or in part, of confidential supervisory 
     information may not seek to obtain such information through 
     subpoena, discovery procedures, or other process from any 
     person, except that such information may be sought in 
     accordance with this section from the Administration.
       ``(B) Request submitted to administration.--Any request for 
     discovery or disclosure of confidential supervisory 
     information shall be made in the Administration, which shall 
     determine within a reasonable time period whether to disclose 
     such information pursuant to procedures and criteria 
     established in regulations.
       ``(2) Exclusive federal court jurisdiction over disputes.--
       ``(A) In general.--Federal courts shall have exclusive 
     jurisdiction over actions or proceedings in which any party 
     seeks to compel disclosure of confidential supervisory 
     information.
       ``(B) Judicial review.--Judicial review of the final action 
     of the Administration with regard to the disposition of a 
     request for confidential supervisory information shall be 
     before a district court of the United States of competent 
     jurisdiction, subject to chapter 7 of part I of title 5, 
     United States Code.
       ``(C) Right to appeal.--Any court order that compels 
     production of confidential supervisory information may be 
     immediately appealed by the Administration and the order 
     compelling production shall be automatically stayed, pending 
     the outcome of such appeal.
       ``(e) Subpoenas.--
       ``(1) Authority to intervene.--In the case of any action or 
     proceeding to compel compliance with a subpoena, order, 
     discover request, or other judicial or administrative process 
     with respect to any confidential supervisory information 
     relating to any credit union, the Administration and the 
     credit union may intervene in such action or proceeding for 
     the purpose of--
       ``(A) enforcing the limitations established in paragraph 
     (1) of subsections (b) and (d);
       ``(B) seeking the withdrawal of any compulsory process with 
     respect to such information; and
       ``(C) registering appropriate objections with respect to 
     the action or proceeding to the extent the action or 
     proceeding relates to or involves such information.
       ``(2) Right to appeal.--Any court order that compels 
     production of confidential supervisory information may be 
     immediately appealed by the Administration and the order 
     compelling production shall be automatically stayed, pending 
     the outcome of such appeal.
       ``(f) Regulations.--
       ``(1) Authority to prescribe.--The Board may prescribe such 
     regulations as the Board considers to be appropriate, after 
     consultation with the Federal banking agencies (as defined in 
     section 3 of the Federal Deposit Insurance Act), to carry out 
     the purposes of this section.
       ``(2) Authority to require notice.--Any regulations 
     prescribed by the Administration under paragraph (1) may 
     require any person in possession of confidential supervisory 
     information to notify the Administration whenever the person 
     is served with a subpoena, order, discovery request, or other 
     judicial or administrative process requiring the personal 
     attendance of such person as a witness or requiring the 
     production of such information in any proceeding.
       ``(g) Access in Accordance With Regulations and Orders.--
     Notwithstanding any other provision of this section, the 
     Administration may, without waiving any privilege, authorize 
     access to confidential supervisory information for any 
     appropriate governmental, law enforcement, or public purpose 
     in accordance with agency regulations or orders.''.

                    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 (12 U.S.C. 1821 note; 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. 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 1st 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 of a national bank which is an 
     affiliate (as defined in section 3(w)(6) of the Federal 
     Deposit Insurance Act) of a foreign bank''.

     SEC. 604. TECHNICAL AMENDMENT TO PROHIBITION ON COMPTROLLER 
                   INTERESTS IN NATIONAL BANKS.

       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''.

     SEC. 605. APPLICABILITY OF LIMITATION TO PRIOR INVESTMENTS.

       (a) In General.--Section 18(s) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1828(s)) is amended by adding at the 
     end the following new paragraph:
       ``(5) Certain investments.--Paragraph (1) shall not apply 
     to investments lawfully made before April 11, 1996, by a 
     depository institution in a Government-sponsored 
     enterprise.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply as if such amendment had been included in the 
     amendment made by section 2615(b) of the Economic Growth and 
     Regulatory Paperwork Reduction Act of 1996 as of the 
     effective date of such section.

                    TITLE VII--SPECIAL RESERVE FUNDS

     SEC. 701. ABOLITION OF SPECIAL RESERVE FUNDS.

       (a) SAIF Special Reserve.--Section 11(a)(6) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1821(a)(6)) is amended by 
     striking subparagraph (L).
       (b) Special Reserve of the Deposit Insurance Fund.--Section 
     2704 of the Deposit Insurance Funds Act of 1996 is amended--
       (1) by striking subsection (b);
       (2) by striking paragraph (4) of subsection (d);
       (3) in subsection (d)(6)(C)(i), by striking ``(6) and (7)'' 
     and inserting ``(5), (6), and (7)''; and
       (4) in subsection (d)(6)(C)(ii), by striking ``(6)'' and 
     inserting ``(5)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply as if such amendments had been included in the 
     Deposit Insurance Funds Act of 1996 as of the date of the 
     enactment of such Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
New Jersey (Mrs. Roukema) and the gentleman from New York (Mr. LaFalce) 
each will control 20 minutes.
  The Chair recognizes the gentlewoman from New Jersey (Mrs. Roukema).
  Mrs. ROUKEMA. Mr. Speaker, I yield myself such time as I may consume.
  (Mrs. ROUKEMA asked and was given permission to revise and extend her 
remarks.)
  Mrs. ROUKEMA. Mr. Speaker, at this hour of the night I want to thank 
the Speaker and say to my colleagues here that we have a very important 
bill here that is somewhat complex but nevertheless we have strong 
bipartisan support for, and that is the reason we are here under 
suspension of the rules. We are considering tonight what has become a 
persistent issue with the Banking Committee and the Congress, namely 
legislation to relieve the regulatory burden on financial institutions 
and seeking ways to streamline the regulatory process. It is a very 
important issue.
  We talk a lot about deregulation but here is one way we can actually 
take some substantive action to deal with it. This Depository 
Institution Regulatory Streamlining Act of 1998 will provide important 
regulatory relief for financial institutions. I certainly want to thank 
the gentleman from Iowa (Mr. Leach) for his assistance. Without his 
support and strong leadership, we would not be here this evening. Also 
I want to acknowledge the work of the gentleman from New York (Mr. 
LaFalce) the ranking member of the full committee who is with us 
tonight, and also the ranking member of the subcommittee, the gentleman 
from Minnesota (Mr. Vento). We have had, as I stated, strong bipartisan 
support with significant reforms. The gentleman from Minnesota and I 
worked very hard to produce this bill at the subcommittee level, and I 
believe we have come

[[Page H10215]]

up with a good product. I regret that we do not have everything that we 
would have liked in this bill, but it is a significant step forward. 
Certainly the gentleman from Minnesota and I are intent on continuing 
our work together, and that there are other agreements on changes that 
we might be able to make in the future, namely at least in one respect 
and probably in others as well, but the one that I would single out 
here tonight is the debit card area, where next year I hope we can take 
some action. Indeed, we have a letter here which we have agreed, on a 
bipartisan basis, to send to the Federal Reserve regarding the customer 
notification issue, and we hopefully will be able to solve that 
problem.
  I also should mention not only the interest of the gentleman from 
Minnesota (Mr. Vento) the gentleman from New York (Mr. LaFalce), the 
gentleman from Iowa (Mr. Leach) and mine but also the gentleman from 
Wisconsin (Mr. Barrett), a strongly contributing member of our 
committee.
  I would like to point out that the subcommittee had the 
responsibility to assure that Federal banking laws and regulations in 
the supervisory system not only promote the safety and soundness of the 
banking system but in so doing it is important to recognize that we 
need to review on a regular basis the legal requirements that have been 
imposed to assure ourselves the continuing efficacy and reliability of 
the system. Clearly as we all know, and we see worldwide, financial 
markets and the banking industry are evolving at a tremendous pace, and 
as changes in the industry occur, old approaches may or may not be 
appropriate and new ones need to be advanced. That is what this bill is 
about.
  Because of the time here and because of the unanimity of opinion, we 
certainly do want to hear from our chairman the gentleman from Iowa 
(Mr. Leach), other members of the committee and certainly the gentleman 
from New York (Mr. LaFalce), I will only outline the major portions of 
the bill. It has a wide ranging number of subjects, but the five most 
important provisions or most singular provisions are as follows.
  Interest on the sterile reserves is the first major issue that we 
deal with. Without going into the details of it, the bill would 
authorize the Federal Reserve Board to pay interest on reserve 
balances, both required and excess reserve balances that are held at 
Federal Reserve banks. This is a significant change in banking law with 
very positive effects for both the banks and the Federal Reserve, and 
it will make it far easier to manage the economy. Without going into 
all the different aspects of it, I would simply point out that this 
provision is strongly supported by the Federal Reserve Board as well as 
by the banking industry.
  Our colleagues on the committee, both the gentleman from Washington 
(Mr. Metcalf), who is here this evening, we will be hearing from and 
the gentlewoman from New York (Mrs. Kelly) have been the prime 
advocates and leaders on this issue. I am sure we will be interested in 
hearing the gentleman from Washington's perspective on this and other 
portions of the bill.

                              {time}  0120

  The second issue is the interest on business checking. It is a major 
component of the bill. Financial institutions are currently prohibited 
by Federal statute from paying interest on business transaction 
accounts, and actually, as so often happens in these cases and other 
business aspects of our economy, financial institutions have 
circumvented the statutory provision in different ways and have 
demonstrated that it is really not a current provision that we should 
keep in place.
  So we are changing this outdated prohibition of interest on business 
checking and have provided a 6-year transition period for the 
elimination of the interest on business checking prohibition so that 
all parties can make adjustments to this proposal.
  This has been somewhat controversial but we think we have reached an 
accommodation that should satisfy all parties, and it should be noted 
that the National Federation of Independent Business, the Treasury 
Management Association and the U.S. Chamber of Commerce all support 
repeal of that provision.
  We also have in the bill the Bank Examination Report Privilege Act. 
Now that sounds like a lot but it establishes a privilege for 
correspondence, materials and information which regulators collect from 
banks and it is a very essential modification that should be, as far as 
we can tell and the way we have worked it out with all interested 
parties, including the American Bar Association, that it will bring us 
up to modern times and still not create a privilege for all documents 
which are turned over to the regulators.
  The gentleman from Florida (Mr. McCollum), a member of the committee, 
was very instrumental in helping us reach this conclusion. The SAIF 
special reserve fund, and the time is going on so I shall simply 
mention the SAIF special reserve fund which now is possible to adjust 
and repeal the special reserve fund because of the conditions, both in 
the BIF and the SAIF and the sound economy that we have, and suffice it 
to say that all parties are completely supportive of that provision.
  Of course, we like to hear this: The CBO has scored this provision 
and reported that there is no cost.
  I am going to conclude now, without going into the details of the 
CEBA banks, but suffice it to say that this makes an adjustment and a 
reform from a 1987 law and one that is included in H.R. 10 but it has 
the support of everyone on all sides. We think it is long overdue 
reform.
  Mr. Speaker, I reserve the balance of my time and would wait to hear 
the other Members.
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. LaFalce asked and was given permission to revise and extend his 
remarks.)
  Mr. LaFALCE. Mr. Speaker, I rise in support of H.R. 4364.
  Mr. Speaker, I reserve the balance of my time.
  Mrs. ROUKEMA. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Iowa (Mr. Leach), the chairman of the Committee on 
Banking and Financial Services.
  Mr. LEACH. Mr. Speaker, I thank the gentlewoman for yielding.
  Mr. Speaker, the principal beneficiaries of the Depository 
Institution Regulatory Streamlining Act are the Nation's small 
businesses and their customers. The bill, so ably put together by the 
Subcommittee on Financial Institutions and Consumer Credit, under the 
leadership of the gentlewoman from New Jersey (Mrs. Roukema) and the 
gentleman from Minnesota (Mr. Vento) will repeal overtime prohibitions 
in current law that bar banks from paying interest on business checking 
accounts.
  In addition, the bill authorizes financial institutions to establish 
on an interim basis 24-transaction-a-month money market accounts for 
businesses. In effect, this means that small businesses, which have 
fewer options in money management than their larger competitors, will 
be able to have their money work for them.
  The gentlewoman from New York (Mrs. Kelly) deserves special attention 
for her contributions in helping craft this important provision.
  Given the liquidity problems increasing in American banking, the 
above provisions will enable the principal providers of credit, to 
midsized American business, to more efficiently serve their customers.
  I would like also to call attention to one other provision of the 
bill and that involves the Federal Reserve Board being allowed for the 
first time to pay interest to depository institutions on the money they 
are required to keep on reserve with the Fed.
  This would appear on its face to be only fair. Banks should be 
treated as equitably as others and allowed to collect interest on their 
savings. A critical upshot of advancing this commonsense precept is 
that the Fed will be able to better manage monetary policy because 
disincentives for holding funds at the Fed will be reduced.
  This important provision has been advanced with great effectiveness 
over the past several Congresses by the gentleman from Washington (Mr. 
Metcalf) and he deserves enormous credit for introducing legislation in 
this regard and keeping it before the Committee on Banking, Housing, 
and Urban Affairs for such a long period of time.
  In closing, I would like to thank or note again the hard work in 
bringing this bill to the floor by our subcommittee chairman, the 
gentlewoman from

[[Page H10216]]

New Jersey (Mrs. Roukema), the ranking member of the full committee, 
the gentleman from New York (Mr. LaFalce), and the gentleman from 
Minnesota (Mr. Vento), and, of course, particularly to the gentleman 
from Washington (Mr. Metcalf), who has worked so tirelessly for the 
principles that are in this bill.
  Mrs. ROUKEMA. Mr. Speaker, I yield 4 minutes to the distinguished 
gentleman from Washington (Mr. Metcalf), a member of the committee.
  (Mr. METCALF asked and was given permission to revise and extend his 
remarks.)
  Mr. METCALF. Mr. Speaker, let me first thank the gentleman from Iowa 
(Mr. Leach), the chairman of the Committee on Banking, Housing, and 
Urban Affairs, the gentlewoman from New Jersey (Mrs. Roukema), the 
Chair of the Subcommittee on Financial Institutions and Consumer 
Credit, and the many members of the subcommittee.
  I also thank the committee for adopting my bill, the Small Business 
Banking Act of 1997, as a section of today's bill. This bill represents 
a culmination of bipartisan effort that many have worked diligently to 
achieve.
  Many people are unaware that small businesses are prohibited, by an 
outdated 60-year-old law that prevents them from earning interest on 
their business checking accounts. To address these problems, I have in 
both the 104th and 105th Congresses introduced legislation to simply 
allow, not mandate but to allow, the paying of interest on business 
checking accounts now prohibited under law.
  I have heard from hundreds of banks across the Nation. Given the late 
hour, I will just mention a few. A banker from Iowa wrote, ``There 
seems to be little reason to continue to prohibit interest-bearing 
checking accounts for businesses or corporations. Further, small 
community banks such as ourselves must either spend additional dollars 
to offer a sweep type of product or lose small business customers' 
accounts.''
  A banker from Wisconsin wrote, ``Small banks are now required to use 
creative repurchasing agreement accounting in an attempt to compete. 
Why are our customers being disadvantaged? Please level the playing 
field.''
  In expressing his support of this legislation, Federal Reserve 
Chairman Alan Greenspan wrote, ``It would eliminate a significant 
distortion in financial markets that places small businesses at a 
particular disadvantage. Moreover, it would assist us in our 
implementation of monetary policy. Permitting depository institutions 
to pay interest on demand deposits would eliminate a constraint that 
serves no purpose and imposes unnecessary costs on both businesses and 
depository institutions.''
  The U.S. Chamber of Commerce, the world's largest business 
federation, wrote in support of the bill, ``By allowing for more open 
competition, this legislation offers an important opportunity to small 
business owners to establish a more complete relationship with their 
financial service providers.''

                              {time}  0130

  The list goes on and on of those who support this legislation, 
including the National Federation of Independent Businesses, the Mutual 
Fund Company, T. Rowe Price, and America's Community Bankers.
  In conclusion, this is a chance to do something tangible to help 
every small business in every congressional district. America's small 
businesses cannot afford for Congress to further delay lifting this 
outdated and anticompetitive prohibition. I encourage my colleagues to 
support this legislation.
  Mr. Speaker, I yield back the balance of my time.
  Mr. LaFALCE. Mr. Speaker, how much time do I have remaining.
  The SPEAKER pro tempore (Mr. Blunt). The gentleman from New York (Mr. 
LaFalce) has 19\1/2\ minutes remaining.
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would be remiss if I did not congratulate everyone 
associated with this bill, most especially the chairman of the full 
committee, the chairman of the subcommittee, and the distinguished 
ranking member of the subcommittee the gentleman from Minnesota (Mr. 
Vento) also.
  I do want to single out that the chairman of the full committee, too. 
There were provisions within the subcommittee bill that was reported 
out of subcommittee that were ardently sought by Members of his own 
party, very adamantly opposed by ours.
  There were provisions in the bill, other provisions that were 
vehemently opposed by ours and some provisions that Members from our 
side wanted to add to the bill. I think he took a very judicious, 
prudential approach in producing in a bipartisan fashion a bill that 
everyone today could support and is deserving of passage, not only by 
this House, but by the Senate, and deserving of signature by the 
President of the United States. I hope that will come about.
  I thank the gentleman from Iowa (Mr. Leach) and the gentlewoman from 
New Jersey (Mrs. Roukema) for their cooperative attitude very much.
  Mr. Speaker, I yield back the balance of my time.
  Mrs. ROUKEMA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I do thank the ranking member for those kind words. It 
does show how we can be a standard for the rest of the Congress in our 
bipartisan efforts here. I again congratulate the chairman of the full 
committee. Mr. Speaker I have no further requests for time.
  Mr. BEREUTER. Mr. Speaker, this Member rises today in support of H.R. 
4364, the Financial Institution Regulatory Streamlining Act of 1998. 
This Member has a long history of initiating and supporting regulatory 
relief efforts and this bill is another substantial step toward this 
end.
  This Member would like to thank the distinguished gentlelady, [Mrs. 
Roukema] the Chairperson of the Banking Subcommittee on Financial 
Institutions Subcommittee from New Jersey, for introducing this bill 
and for her efforts in bringing H.R. 4364 to the House Floor. This 
Member would also like to express his appreciation to the distinguished 
gentleman from Iowa [Mr. Leach], the Chairman of the full Banking 
Committee, and the distinguished gentleman from New York [Mr. LaFalce], 
the Ranking Minority Member of the full Banking Committee, for their 
efforts in bringing this measure to the House Floor today.
  Before going into specific provisions of H.R. 4364, this Member 
believes that it is imperative to note that efforts directed toward 
regulatory burden-relief benefits both financial institutions and 
consumers. It allows financial institutions to conduct their business 
more efficiently as well as reducing the costs of banking to the 
consumer.
  This Member is supportive of H.R. 4364 for the following three 
reasons.
  1. H.R. 4364 would allow the Federal Reserve to pay interest on 
reserve balances maintained by depository institutions at Federal 
Reserve Banks at a rate no greater than the general level of short-term 
interest rates. This Member understands and appreciates the beneficial 
effect of this provision since it enhances the liquidity of depository 
institutions which in turn will positively impact the manner in which 
depository institutions conduct their lending practices.

  2. This measure also applauds the H.R. 4364 provision which would 
allow for the payment of interest on business checking accounts 
effective October 1, 2004. This provision, which is both pro-business 
and pro-commerce, eliminates an undue and unnecessary regulation.
  3. This Member would also like to highlight three under-recognized, 
but important parts of H.R. 4364 which will decrease the everyday 
regulatory burden on financial institutions.
  For instance, provision in H.R. 4364 would require Federal Banking 
Agencies to use plain English in all proposed and final rules published 
after January 1, 1999. This measure will help all financial 
institutions from confusing and perplexing rules.
  Furthermor, H.R. 4364 permits the Comptroller of the Currency to 
waive the current restriction on having no more than 25 directors serve 
on the board of national banks. It appears to this Member that there 
actually is no rationale to support the current regulatory limit of 25. 
This measure appropriately enhances the flexibility and freedom of a 
National Bank.
  One additional small, but consequential, provision of regulatory 
relief is the repeal of the Dividend Notice Requirement. Financial 
institutions are many times inundated with regulatory paperwork. This 
simple provision would eliminate the 30-day advance notice to the 
Office of Thrift Supervision of a dividend payment by a savings 
association to its savings and loan holding company.
  In closing, because of the above reasons and others, this Member 
would encourage the House to vote in support of H.R. 4364.
  Mr. METCALF. Mr. Speaker, let me first thank the Chairman of the 
Banking Committee

[[Page H10217]]

and also thanks to the Gentlelady from New Jersey, the Chair of the 
Financial Institutions Subcommittee, and the many members of the 
Subcommittee. I also thank the committee for adopting my bill--The 
Small Business Banking Act of 1997, as a major section of today's 
legislation. This Act now represents a culmination of bi-partisan 
effort that many have worked diligently to perfect.
  Many people are unaware that small businesses are prohibited by an 
outdated 60 year-old law that prevents them from earning interest on 
their business checking accounts. What's more ironic is that many banks 
are actually clamoring to have the choice to serve their business 
customers by offering interest on these accounts.
  To address these problems, I have, in both the 104th and 105th 
Congresses, introduced legislation to allow, not mandate, but to allow 
banks and savings institutions to pay interest on business checking 
accounts, which is now prohibited under law.
  By lifting the current prohibition against banks offering interest, 
the legislation would allow banks to give small businesses this 
critically needed option. It would also allow banks the opportunity to 
better address the business concerns of their local communities without 
having to undergo costly, cumbersome procedures.
  But don't take my word for it. Listen to some comments I have 
received from community banks across the nation:
  A banker from Iowa wrote: ``There seems little reason to continue to 
prohibit interest bearing checking accounts for businesses or 
corporations . . . Further, small community banks such as ourselves 
must either spend additional dollars to offer a sweep type of product 
or lose a small business customers' accounts.''
  A banker from Wisconsin wrote: ``Small banks are now required to use 
`creative repurchase agreement accounting' in an attempt to compete. 
Why are our customers being disadvantaged? Please level the playing 
field.''
  In expressing his support for the legislation, Federal Reserve 
Chairman Alan Greenspan wrote: ``It would eliminate a significant 
distortion in financial markets that places small businesses at a 
particular disadvantage. Moreover, it would assist us in our 
implementation of monetary policy . . . Permitting depository 
institutions to pay interest on demand deposits would eliminate a 
constraint that serves no purpose and imposes unnecessary costs on both 
businesses and depository institutions.''
  The U.S. Chamber of Commerce--the world's largest business 
federation--wrote in support of the bill: ``By allowing for more open 
competition, your legislation offers an important opportunity to small 
business owners to establish a more complete relationship with their 
financial service providers.''
  The list goes on of those who support this bill, including: The 
National Federation of Independent Businesses; T. Rowe Price, the 
mutual fund company; and America's Community Bankers.
  In closing, this is a chance to do something tangible to help every 
small business in every congressional district. America's small 
businesses cannot afford for Congress to further delay lifting this 
outdated and anti-competitive prohibition. I yield back the balance of 
my time.
  Mr. CASTLE. Mr. Speaker, I rise in support of H.R. 4364, which will 
provide some fair and needed relief from unnecessary regulations for 
many of our banks and other financial institutions. I want to thank 
Chairman Roukema of the financial institutions subcommittee for putting 
this bill together and to Chairman Leach of the full committee for 
helping to bring it to the floor this year.
  Balancing efforts to remove unnecessary regulations, improve 
competition and protect consumers is never easy, but I think this bill 
balances all those important goals and will contribute to strengthening 
the financial services industry and promote new products for consumers.
  I would like to comment in particular on sections 222 and 223 of the 
bill which I believe will promote competition and increase the quality 
of financial products available to consumers. These sections will lift 
some outdated restrictions from limited-purpose banks and allow these 
institutions to offer new products consistent with their charter; 
cross-market the financial products of their affiliates; offer business 
credit cards to their customers; and correct problems in a reasonable 
period of time in consultation with the Federal Reserve. These changes 
will increase the products available to consumers without unfairly 
affecting other financial service providers. This is consistent with 
the intent of the entire bill which seeks to help businesses and 
consumers while maintaining sound regulation.
  Again, I want to thank all the members involved for their cooperative 
efforts on this legislation, and I urge the House to approve H.R. 4364.
  Mrs. KELLY. Mr. Speaker, I thank the gentlewoman from New Jersey for 
yielding me time. Mr. Chairman, I rise today in strong support of H.R. 
4364, the Depository Institution Regulatory Streamlining Act. This 
legislation represents the tireless efforts of many of my colleagues, 
especially the gentleman from Washington, Mr. Metcalf.
  H.R. 4364 is a well balanced legislative package of financial 
services regulatory relief. I was pleased when provisions from my 
legislation, H.R. 4082, were included in this bill and know that these 
provisions will help banks better serve their customers.
  One of these provisions will allow banks to conduct ``24 sweeps'' in 
a given month for their commercial checking customers. Currently, banks 
are prohibited from paying interest on commercial checking accounts. 
These sweeps allow banks to move funds sitting in a commercial checking 
account into an interest bearing account daily after all transactions 
have occurred in the commercial account. The next morning the money 
would then be ``swept'' back into the commercial accounts, with 
interest. Currently, banks are only allowed to do this six times a 
month. Operation of additional sweeps each month would not affect the 
safety and soundness of banks and will allow banks to pay interest on 
commercial checking accounts.
  In my discussions with banks, I have found that complying with this 
provision would take minimal effort since we will only be increasing 
their ability to sweep from six times a month to 24. This initiative 
represents a real ``win-win'' for banks and businesses.
  I want to again thank the gentleman from Washington for his hard work 
on this bill, as well as the gentlewoman from New Jersey, Mrs. Roukema, 
the gentleman from Minnesota, Mr. Vento and the committee staff who 
worked so hard to make this bill a reality.
  Lastly, I am pleased with the bipartisan consensus we have achieved 
with this legislation and I ask my colleagues from both sides of the 
aisle to join me in support for House passage of H.R. 4364.
  Mr. VENTO. Mr. Speaker, I rise in support of H.R. 4364, the 
Depository Institution Regulatory Streamlining Act of 1998, legislation 
that I have worked on for many months and which I cosponsored at 
introduction.
  I am pleased that the anti-CRA amendment that forced the opposition 
of all the Democrats on the Financial Institutions Subcommittee has 
been removed because it would effectively exempt over 80% of financial 
institutions from CRA, I have remaining concerns.
  I am uncomfortable with the extension of the delay in allowing 
interest on business checking accounts, a sound public policy change 
that should really be effective as soon as possible, from three years 
to six years. However, because we were able to find an accommodation 
for a very minor notification provision for consumers about the debit 
cards they are now receiving as replacement cards for the ATM cards and 
the response to the F.T.C. concerns on broadcast disclosure I'm for the 
time supporting this process.
  I do want to note for all the Members of the House, that at the 
Financial Institutions Subcommittee, we worked well together to assure 
that we would not be condemned to repeat history on regulatory burden 
relief. I thank the gentlelady from New Jersey, Chairwoman Roukema, and 
her staff, for their work with us on this legislation. We crafted a 
balanced bill on which we held a comprehensive hearing. We worked with 
Members, the regulators and consumer and industry interests to advance 
a solid, yet basically non-controversial regulatory burden relief bill 
that did not adversely affect consumers, nor undercut some of the very 
laws that protect safety and soundness of our financial institutions.
  That is not to say that this bill is completely without controversy. 
Title I, which contains the provisions to allow interest on business 
checking, a big plus for small-and medium-sized businesses which are 
not sweep always able to take advantage of the so-called accounts, also 
allows the Federal Reserve Board to pay interest on sterile reserves. 
Obviously, that policy, path has a price and we chose in the bill to 
pay for the scoring by using the Fed surplus. How far past this House 
floor that these provisions will advance is not clear to me at this 
time.
  This bill provides for the elimination of the SAIF special reserves 
which in pulling off funds and reserving them from the Savings 
Association Insurance Fund could set up a differential premium and get 
us back in the BIF-SAIF ``situation'' that engulfed us in the last 
Congress. I support this provision that is supported by the FDIC.
  H.R. 4364 also provides some housecleaning type provisions for the 
banking regulators, bringing outdated statutes up to date, clarifying 
the meaning of changes made in previous laws, and providing technical 
corrections to many laws.
  Let me be clear, this bill is not about consumer burden relief which 
should have been in order. Indeed, our Financial Institutions 
Subcommittee held hearings on some timely topics including privacy 
issues, unsolicited loan checks and other provisions that could

[[Page H10218]]

have been added. Many Democratic Members, including myself, would have 
liked to include positive proactive legislation for consumers. For 
example, I would have like to increase the limit for the applicability 
for non-mortgage Truth In Lending Act coverage from $25,000 to $50,000 
so that consumers who buy a vehicle that costs more than $25,000 would 
be protected by TILA. These kinds of provisions, however, were held off 
in the spirit of pragmatism, trying to move a bill quickly and not to 
bog it down in controversy.
  Let me finally say, regulatory burden relief can generally be a good 
premise, but not if it breaches consumer protection OR safety and 
soundness boundaries. It cannot be an excuse for the lowest common 
denominator with regards to consumers, communities and safety and 
soundness. I supported working on this legislation so that we can 
maintain a non-partisan, non-controversial stance on some needed 
changes. There are unnecessarily changes, however, that were suggested.
  For example, there are provisions in the regulatory relief bill that 
has been pending in the other body and I do find very egregious. They 
are absent in this bill and I appreciate the willingness to work 
together on this bill without those sort of provisions. That is what 
has made this bill a suspension bill today. Because of our less 
controversial approach, we may well have facilitated the positive 
consideration of this legislation in the very limited window we have 
left.
  Mrs. ROUKEMA. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from New Jersey (Mrs. Roukema) that the House suspend the 
rules and pass the bill, H.R. 4364, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________