[Congressional Record Volume 152, Number 29 (Wednesday, March 8, 2006)]
[House]
[Pages H702-H722]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FINANCIAL SERVICES REGULATORY RELIEF ACT OF 2005
Mr. OXLEY. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 3505) to provide regulatory relief and improve productivity for
insured depository institutions, and for other purposes, as amended.
The Clerk read as follows:
H.R. 3505
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Financial
Services Regulatory Relief Act of 2005''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--NATIONAL BANK PROVISIONS
Sec. 101. National bank directors.
Sec. 102. Voting in shareholder elections.
Sec. 103. Simplifying dividend calculations for national banks.
Sec. 104. Repeal of obsolete limitation on removal authority of the
Comptroller of the Currency.
Sec. 105. Repeal of intrastate branch capital requirements.
Sec. 106. Clarification of waiver of publication requirements for bank
merger notices.
Sec. 107. Equal treatment for Federal agencies of foreign banks.
Sec. 108. Maintenance of a Federal branch and a Federal agency in the
same State.
Sec. 109. Business organization flexibility for national banks.
Sec. 110. Clarification of the main place of business of a national
bank.
Sec. 111. Capital equivalency deposits for Federal branches and
agencies of foreign banks.
Sec. 112. Enhancing the authority for national banks to make community
development investments.
TITLE II--SAVINGS ASSOCIATION PROVISIONS
Sec. 201. Parity for savings associations under the Securities Exchange
Act of 1934 and the Investment Advisers Act of 1940.
Sec. 202. Investments by Federal savings associations authorized to
promote the public welfare.
Sec. 203. Mergers and consolidations of Federal savings associations
with nondepository institution affiliates.
Sec. 204. Repeal of statutory dividend notice requirement for savings
association subsidiaries of savings and loan holding
companies.
Sec. 205. Modernizing statutory authority for trust ownership of
savings associations.
Sec. 206. Repeal of overlapping rules governing purchased mortgage
servicing rights.
Sec. 207. Restatement of authority for Federal savings associations to
invest in small business investment companies.
[[Page H703]]
Sec. 208. Removal of limitation on investments in auto loans.
Sec. 209. Selling and offering of deposit products.
Sec. 210. Funeral- and cemetery-related fiduciary services.
Sec. 211. Repeal of qualified thrift lender requirement with respect to
out-of-state branches.
Sec. 212. Small business and other commercial loans.
Sec. 213. Clarifying citizenship of Federal savings associations for
Federal court jurisdiction.
Sec. 214. Increase in limits on commercial real estate loans.
Sec. 215. Repeal of one limit on loans to one borrower.
Sec. 216. Savings association credit card banks.
Sec. 217. Interstate acquisitions by S&L holding companies.
Sec. 218. Business organization flexibility for federal savings
associations.
TITLE III--CREDIT UNION PROVISIONS
Sec. 301. Privately insured credit unions authorized to become members
of a Federal home loan bank.
Sec. 302. Leases of land on Federal facilities for credit unions.
Sec. 303. Investments in securities by Federal credit unions.
Sec. 304. Increase in general 12-year limitation of term of Federal
credit union loans to 15 years.
Sec. 305. Increase in 1 percent investment limit in credit union
service organizations.
Sec. 306. Member business loan exclusion for loans to nonprofit
religious organizations.
Sec. 307. Check cashing and money transfer services offered within the
field of membership.
Sec. 308. Voluntary mergers involving multiple common-bond credit
unions.
Sec. 309. Conversions involving common-bond credit unions.
Sec. 310. Credit union governance.
Sec. 311. Providing the National Credit Union Administration with
greater flexibility in responding to market conditions.
Sec. 312. Exemption from pre-merger notification requirement of the
Clayton Act.
Sec. 313. Treatment of credit unions as depository institutions under
securities laws.
Sec. 314. Clarification of definition of net worth under certain
circumstances for purposes of prompt corrective action.
Sec. 315. Amendments relating to nonfederally insured credit unions.
TITLE IV--DEPOSITORY INSTITUTION PROVISIONS
Sec. 401. Easing restrictions on interstate branching and mergers.
Sec. 402. Statute of limitations for judicial review of appointment of
a receiver for depository institutions.
Sec. 403. Reporting requirements relating to insider lending.
Sec. 404. Amendment to provide an inflation adjustment for the small
depository institution exception under the Depository
Institution Management Interlocks Act.
Sec. 405. Enhancing the safety and soundness of insured depository
institutions.
Sec. 406. Investments by insured savings associations in bank service
companies authorized.
Sec. 407. Cross guarantee authority.
Sec. 408. Golden parachute authority and nonbank holding companies.
Sec. 409. Amendments relating to change in bank control.
Sec. 410. Community reinvestment credit for esops and ewocs.
Sec. 411. Minority financial institutions.
TITLE V--DEPOSITORY INSTITUTION AFFILIATES PROVISIONS
Sec. 501. Clarification of cross marketing provision.
Sec. 502. Amendment to provide the Federal Reserve Board with
discretion concerning the imputation of control of shares
of a company by trustees.
Sec. 503. Eliminating geographic limits on thrift service companies.
Sec. 504. Clarification of scope of applicable rate provision.
Sec. 505. Savings associations acting as agents for affiliated
depository institutions.
Sec. 506. Credit card bank investments for the public welfare.
TITLE VI--BANKING AGENCY PROVISIONS
Sec. 601. Waiver of examination schedule in order to allocate examiner
resources.
Sec. 602. Interagency data sharing.
Sec. 603. Penalty for unauthorized participation by convicted
individual.
Sec. 604. Amendment permitting the destruction of old records of a
depository institution by the FDIC after the appointment
of the FDIC as receiver.
Sec. 605. Modernization of recordkeeping requirement.
Sec. 606. Streamlining reports of condition.
Sec. 607. Expansion of eligibility for 18-month examination schedule
for community banks.
Sec. 608. Short form reports of condition for certain community banks.
Sec. 609. Clarification of extent of suspension, removal, and
prohibition authority of Federal banking agencies in
cases of certain crimes by institution-affiliated
parties.
Sec. 610. Streamlining depository institution merger application
requirements.
Sec. 611. Inclusion of Director of the Office of Thrift Supervision in
list of banking agencies regarding insurance customer
protection regulations.
Sec. 612. Protection of confidential information received by Federal
banking regulators from foreign banking supervisors.
Sec. 613. Prohibition on participation by convicted individual.
Sec. 614. Clarification that notice after separation from service may
be made by an order.
Sec. 615. Enforcement against misrepresentations regarding FDIC deposit
insurance coverage.
Sec. 616. Changes required to small bank holding company policy
statement on assessment of financial and managerial
factors.
Sec. 617. Exception to annual privacy notice requirement under the
Gramm-Leach-Bliley Act.
Sec. 618. Biennial reports on the status of agency employment of
minorities and women.
Sec. 619. Coordination of State examination authority.
Sec. 620. Nonwaiver of privileges.
Sec. 621. Right to Financial Privacy Act of 1978 amendment.
Sec. 622. Deputy director; succession authority for Director of the
Office of Thrift Supervision.
Sec. 623. Limitation on scope of new agency guidelines.
TITLE VII--``BSA'' COMPLIANCE BURDEN REDUCTION
Sec. 701. Exception from currency transaction reports for seasoned
customers.
Sec. 702. Reduction in inconsistencies in monetary transaction
recordkeeping and reporting enforcement and examination
requirements.
Sec. 703. Additional reforms relating to monetary transaction and
recordkeeping requirements applicable to financial
institutions.
Sec. 704. Study by Comptroller General.
Sec. 705. Feasibility study required.
Sec. 706. Annual report by Secretary of the Treasury.
Sec. 707. Preservation of money services businesses.
TITLE VIII--CLERICAL AND TECHNICAL AMENDMENTS
Sec. 801. Clerical amendments to the Home Owners' Loan Act.
Sec. 802. Technical corrections to the Federal Credit Union Act.
Sec. 803. Other technical corrections.
Sec. 804. Repeal of obsolete provisions of the Bank Holding Company Act
of 1956.
TITLE IX--FAIR DEBT COLLECTION PRACTICES ACT AMENDMENTS
Sec. 901. Exception for certain bad check enforcement programs.
Sec. 902. Other amendments.
TITLE I--NATIONAL BANK PROVISIONS
SEC. 101. NATIONAL BANK DIRECTORS.
(a) In General.--Section 5146 of the Revised Statutes of
the United States (12 U.S.C. 72) is amended--
(1) by striking ``Sec. 5146. Every director must during''
and inserting the following:
``SEC. 5146. REQUIREMENTS FOR BANK DIRECTORS.
``(a) Residency Requirements.--Every director of a national
bank shall, during'';
(2) by striking ``total number of directors. Every director
must own in his or her own right'' and inserting ``total
number of directors.
``(b) Investment Requirement.--
``(1) In general.--Every director of a national bank shall
own, in his or her own right,''; and
(3) by adding at the end the following new paragraph:
``(2) Exception for subordinated debt in certain cases.--In
lieu of the requirements of paragraph (1) relating to the
ownership of capital stock in the national bank, the
Comptroller of the Currency may, by regulation or order,
permit an individual to serve as a director of a national
bank that has elected, or notifies the Comptroller of the
bank's intention to elect, to operate as a S corporation
pursuant to section 1362(a) of the Internal Revenue Code of
1986, if that individual holds debt of at least $1,000 issued
by the national bank that is subordinated to the interests of
depositors and other general creditors of the national
bank.''.
(b) Clerical Amendment.--The table of sections for chapter
one of title LXII of the Revised Statutes of the United
States (12 U.S.C. 21 et seq.) is amended by striking the item
relating to section 5146 and inserting the following new
item:
``5146. Requirements for bank directors.''.
SEC. 102. VOTING IN SHAREHOLDER ELECTIONS.
Section 5144 of the Revised Statutes of the United States
(12 U.S.C. 61) is amended--
(1) by striking ``or to cumulate'' and inserting ``or, if
so provided by the articles of association of the national
bank, to cumulate'';
(2) by striking the comma after ``his shares shall equal'';
and
(3) by adding at the end the following new sentence: ``The
Comptroller of the Currency may prescribe such regulations to
carry out the purposes of this section as the Comptroller
determines to be appropriate.''.
SEC. 103. SIMPLIFYING DIVIDEND CALCULATIONS FOR NATIONAL
BANKS.
(a) In General.--Section 5199 of the Revised Statutes of
the United States (12 U.S.C. 60) is amended to read as
follows:
[[Page H704]]
``SEC. 5199. NATIONAL BANK DIVIDENDS.
``(a) In General.--Subject to subsection (b), the directors
of any national bank may declare a dividend of so much of the
undivided profits of the bank as the directors judge to be
expedient.
``(b) Approval Required Under Certain Circumstances.--A
national bank may not declare and pay dividends in any year
in excess of an amount equal to the sum of the total of the
net income of the bank for that year and the retained net
income of the bank in the preceding two years, minus any
transfers required by the Comptroller of the Currency
(including any transfers required to be made to a fund for
the retirement of any preferred stock), unless the
Comptroller of the Currency approves the declaration and
payment of dividends in excess of such amount.''.
(b) Clerical Amendment.--The table of sections for chapter
three of title LXII of the Revised Statutes of the United
States is amended by striking the item relating to section
5199 and inserting the following new item:
``5199. National bank dividends.''.
SEC. 104. REPEAL OF OBSOLETE LIMITATION ON REMOVAL AUTHORITY
OF THE COMPTROLLER OF THE CURRENCY.
Section 8(e)(4) of the Federal Deposit Insurance Act (12
U.S.C. 1818(e)(4)) is amended by striking the 5th sentence.
SEC. 105. REPEAL OF INTRASTATE 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 2nd sentence, by striking ``, without regard to
the capital requirements of this section,''; and
(2) by striking the last sentence.
SEC. 106. CLARIFICATION OF WAIVER OF PUBLICATION REQUIREMENTS
FOR BANK MERGER NOTICES.
The last sentence of 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), respectively) are each amended by striking
``Publication of notice may be waived, in cases where the
Comptroller determines that an emergency exists justifying
such waiver, by unanimous action of the shareholders of the
association or State bank'' and inserting ``Publication of
notice may be waived if the Comptroller determines that an
emergency exists justifying such waiver or if the
shareholders of the association or State bank agree by
unanimous action to waive the publication requirement for
their respective institutions''.
SEC. 107. EQUAL TREATMENT FOR FEDERAL AGENCIES OF FOREIGN
BANKS.
The 1st sentence of section 4(d) of the International
Banking Act of 1978 (12 U.S.C. 3102(d)) is amended by
inserting ``from citizens or residents of the United States''
after ``deposits''.
SEC. 108. MAINTENANCE OF A FEDERAL BRANCH AND A FEDERAL
AGENCY IN THE SAME STATE.
Section 4(e) of the International Banking Act of 1978 (12
U.S.C. 3102(e)) is amended by inserting ``if the maintenance
of both an agency and a branch in the State is prohibited
under the law of such State'' before the period at the end.
SEC. 109. BUSINESS ORGANIZATION FLEXIBILITY FOR NATIONAL
BANKS.
(a) In General.--Chapter one of title LXII of the Revised
Statutes of the United States (12 U.S.C. 21 et seq.) is
amended by inserting after section 5136B the following new
section:
``SEC. 5136C. ALTERNATIVE BUSINESS ORGANIZATION.
``(a) In General.--The Comptroller of the Currency may
prescribe regulations--
``(1) to permit a national bank to be organized other than
as a body corporate; and
``(2) to provide requirements for the organizational
characteristics of a national bank organized and operating
other than as a body corporate, consistent with the safety
and soundness of the national bank.
``(b) Equal Treatment.--Except as provided in regulations
prescribed under subsection (a), a national bank that is
operating other than as a body corporate shall have the same
rights and privileges and shall be subject to the same
duties, restrictions, penalties, liabilities, conditions, and
limitations as a national bank that is organized as a body
corporate.''.
(b) Technical and Conforming Amendment.--Section 5136 of
the Revised Statutes of the United States (12 U.S.C. 24) is
amended, in the matter preceding the paragraph designated as
the ``First'', by inserting ``or other form of business
organization provided under regulations prescribed by the
Comptroller of the Currency under section 5136C'' after ``a
body corporate''.
(c) Clerical Amendment.--The table of sections for chapter
one of title LXII of the Revised Statutes of the United
States (12 U.S.C. 21 et seq.) is amended by inserting after
the item relating to section 5136B the following new item:
``5136C. Alternative business organization.''.
SEC. 110. CLARIFICATION OF THE MAIN PLACE OF BUSINESS OF A
NATIONAL BANK.
Title LXII of the Revised Statutes of the United States is
amended--
(1) in the paragraph designated the ``Second'' of section
5134 (12 U.S.C. 22), by striking ``The place where its
operations of discount and deposit are to be carried on'' and
inserting ``The place where the main office of the national
bank is, or is to be, located''; and
(2) in section 5190 (12 U.S.C. 81), by striking ``the place
specified in its organization certificate'' and inserting
``the main office of the national bank''.
SEC. 111. CAPITAL EQUIVALENCY DEPOSITS FOR FEDERAL BRANCHES
AND AGENCIES OF FOREIGN BANKS.
Section 4(g) of the International Banking Act of 1978 (12
U.S.C. 3102(g)) is amended to read as follows:
``(g) Capital Equivalency Deposit.--
``(1) In general.--Upon the opening of a Federal branch or
agency of a foreign bank in any State and thereafter, the
foreign bank, in addition to any deposit requirements imposed
under section 6, shall keep on deposit, in accordance with
such regulations as the Comptroller of the Currency may
prescribe in accordance with paragraph (2), dollar deposits,
investment securities, or other assets in such amounts as the
Comptroller of the Currency determines to be necessary for
the protection of depositors and other investors and to be
consistent with the principles of safety and soundness.
``(2) Limitation.--Notwithstanding paragraph (1),
regulations prescribed under such paragraph shall not permit
a foreign bank to keep assets on deposit in an amount that is
less than the amount required for a State licensed branch or
agency of a foreign bank under the laws and regulations of
the State in which the Federal agency or branch is
located.''.
SEC. 112. ENHANCING THE AUTHORITY FOR NATIONAL BANKS TO MAKE
COMMUNITY DEVELOPMENT INVESTMENTS.
The last sentence in the paragraph designated as the
``Eleventh.'' of section 5136 of the Revised Statutes of the
United States (12 U.S.C. 24) is amended by striking ``10
percent'' each place such term appears and inserting ``15
percent''.
TITLE II--SAVINGS ASSOCIATION PROVISIONS
SEC. 201. PARITY FOR SAVINGS ASSOCIATIONS UNDER THE
SECURITIES EXCHANGE ACT OF 1934 AND THE
INVESTMENT ADVISERS ACT OF 1940.
(a) Securities Exchange Act of 1934.--
(1) Definition of bank.--Section 3(a)(6) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)(6)) is amended--
(A) in subparagraph (A), by inserting ``or a Federal
savings association, as defined in section 2(5) of the Home
Owners' Loan Act'' after ``a banking institution organized
under the laws of the United States''; and
(B) in subparagraph (C)--
(i) by inserting ``or savings association as defined in
section 2(4) of the Home Owners' Loan Act,'' after ``banking
institution,''; and
(ii) by inserting ``or savings associations'' after
``having supervision over banks''.
(2) Include ots under the definition of appropriate
regulatory agency for certain purposes.--Section 3(a)(34) of
such Act (15 U.S.C. 78c(a)(34)) is amended--
(A) in subparagraph (A)--
(i) in clause (ii), by striking ``(i) or (iii)'' and
inserting ``(i), (iii), or (iv)'';
(ii) by striking ``and'' at the end of clause (iii);
(iii) by redesignating clause (iv) as clause (v); and
(iv) by inserting the following new clause after clause
(iii):
``(iv) the Director of the Office of Thrift Supervision, in
the case of a savings association (as defined in section 3(b)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(b))) the
deposits of which are insured by the Federal Deposit
Insurance Corporation, a subsidiary or a department or
division of any such savings association, or a savings and
loan holding company; and'';
(B) in subparagraph (B)--
(i) in clause (ii), by striking ``(i) or (iii)'' and
inserting ``(i), (iii), or (iv)'';
(ii) by striking ``and'' at the end of clause (iii);
(iii) by redesignating clause (iv) as clause (v); and
(iv) by inserting the following new clause after clause
(iii):
``(iv) the Director of the Office of Thrift Supervision, in
the case of a savings association (as defined in section 3(b)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(b))) the
deposits of which are insured by the Federal Deposit
Insurance Corporation, or a subsidiary of any such savings
association, or a savings and loan holding company; and'';
(C) in subparagraph (C)--
(i) in clause (ii), by striking ``(i) or (iii)'' and
inserting ``(i), (iii), or (iv)'';
(ii) by striking ``and'' at the end of clause (iii);
(iii) by redesignating clause (iv) as clause (v); and
(iv) by inserting the following new clause after clause
(iii):
``(iv) the Director of the Office of Thrift Supervision, in
the case of a savings association (as defined in section 3(b)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(b))) the
deposits of which are insured by the Federal Deposit
Insurance Corporation, a savings and loan holding company, or
a subsidiary of a savings and loan holding company when the
appropriate regulatory agency for such clearing agency is not
the Commission; and'';
(D) in subparagraph (D)--
(i) by striking ``and'' at the end of clause (ii);
(ii) by redesignating clause (iii) as clause (iv); and
(iii) by inserting the following new clause after clause
(ii):
``(iii) the Director of the Office of Thrift Supervision,
in the case of a savings association (as defined in section
3(b) of the Federal Deposit Insurance Act (12 U.S.C.
1813(b))) the deposits of which are insured by the Federal
Deposit Insurance Corporation; and'';
(E) in subparagraph (F)--
(i) by redesignating clauses (ii), (iii), and (iv) as
clauses (iii), (iv), and (v), respectively; and
(ii) by inserting the following new clause after clause
(i):
``(ii) the Director of the Office of Thrift Supervision, in
the case of a savings association (as defined in section 3(b)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(b))) the
deposits of which are insured by the Federal Deposit
Insurance Corporation; and'';
(F) by moving subparagraph (H) and inserting such
subparagraph after subparagraph (G); and
[[Page H705]]
(G) by adding at the end the following new sentence: ``As
used in this paragraph, the term `savings and loan holding
company' has the meaning given it in section 10(a) of the
Home Owners' Loan Act (12 U.S.C. 1467a(a)).''.
(b) Investment Advisers Act of 1940.--
(1) Definition of bank.--Section 202(a)(2) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(2)) is
amended--
(A) in subparagraph (A) by inserting ``or a Federal savings
association, as defined in section 2(5) of the Home Owners'
Loan Act'' after ``a banking institution organized under the
laws of the United States''; and
(B) in subparagraph (C)--
(i) by inserting ``, savings association as defined in
section 2(4) of the Home Owners' Loan Act,'' after ``banking
institution''; and
(ii) by inserting ``or savings associations'' after
``having supervision over banks''.
(2) Conforming amendments.--Subsections (a)(1)(A)(i),
(a)(1)(B), (a)(2), and (b) of section 210A of such Act (15
U.S.C. 80b-10a), as added by section 220 of the Gramm-Leach-
Bliley Act, are each amended by striking ``bank holding
company'' each place it occurs and inserting ``bank holding
company or savings and loan holding company''.
(c) Conforming Amendment to the Investment Company Act of
1940.--Section 10(c) of the Investment Company Act of 1940
(15 U.S.C. 80a-10(c)), as amended by section 213(c) of the
Gramm-Leach-Bliley Act, is amended by inserting after
``1956)'' the following: ``or any one savings and loan
holding company (together with its affiliates and
subsidiaries) (as such terms are defined in section 10 of the
Home Owners' Loan Act)''.
SEC. 202. INVESTMENTS BY FEDERAL SAVINGS ASSOCIATIONS
AUTHORIZED TO PROMOTE THE PUBLIC WELFARE.
(a) In General.--Section 5(c)(3) of the Home Owners' Loan
Act (12 U.S.C. 1464(c)) is amended by adding at the end the
following new subparagraph:
``(D) Direct investments to promote the public welfare.--
``(i) In general.--A Federal savings association may make
investments designed primarily to promote the public welfare,
including the welfare of low- and moderate-income communities
or families through the provision of housing, services, and
jobs.
``(ii) Direct investments or acquisition of interest in
other companies.--Investments under clause (i) may be made
directly or by purchasing interests in an entity primarily
engaged in making such investments.
``(iii) Prohibition on unlimited liability.--No investment
may be made under this subparagraph which would subject a
Federal savings association to unlimited liability to any
person.
``(iv) Single investment limitation to be established by
director.--Subject to clauses (v) and (vi), the Director
shall establish, by order or regulation, limits on--
``(I) the amount any savings association may invest in any
1 project; and
``(II) the aggregate amount of investment of any savings
association under this subparagraph.
``(v) Flexible aggregate investment limitation.--The
aggregate amount of investments of any savings association
under this subparagraph may not exceed an amount equal to 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, unless--
``(I) the Director determines that the savings association
is adequately capitalized; and
``(II) the Director determines, by order, that the
aggregate amount of investments in a higher amount than the
limit under this clause will pose no significant risk to the
affected deposit insurance fund.
``(vi) Maximum aggregate investment limitation.--
Notwithstanding clause (v), the aggregate amount of
investments of any savings association under this
subparagraph may not exceed an amount equal to the sum of 15
percent of the savings association's capital stock actually
paid in and unimpaired and 15 percent of the savings
association's unimpaired surplus.
``(vii) Investments not subject to other limitation on
quality of investments.--No obligation a Federal savings
association acquires or retains under this subparagraph shall
be taken into account for purposes of the limitation
contained in section 28(d) of the Federal Deposit Insurance
Act on the acquisition and retention of any corporate debt
security not of investment grade.''.
(b) Technical and Conforming Amendment.--Section 5(c)(3)(A)
of the Home Owners' Loan Act (12 U.S.C. 1464(c)(3)(A)) is
amended to read as follows:
``(A) [Repealed].''.
SEC. 203. MERGERS AND CONSOLIDATIONS OF FEDERAL SAVINGS
ASSOCIATIONS WITH NONDEPOSITORY INSTITUTION
AFFILIATES.
Section 5(d)(3) of the Home Owners' Loan Act (12 U.S.C.
1464(d)(3)) is amended--
(1) by redesignating subparagraph (B) as subparagraph (C);
and
(2) by inserting after subparagraph (A) the following new
subparagraph:
``(B) Mergers and consolidations with nondepository
institution affiliates.--
``(i) In general.--Upon the approval of the Director, a
Federal savings association may merge with any nondepository
institution affiliate of the savings association.
``(ii) Rule of construction.--No provision of clause (i)
shall be construed as--
``(I) affecting the applicability of section 18(c) of the
Federal Deposit Insurance Act; or
``(II) granting a Federal savings association any power or
any authority to engage in any activity that is not
authorized for a Federal savings association under any other
provision of this Act or any other provision of law.''.
SEC. 204. REPEAL OF STATUTORY DIVIDEND NOTICE REQUIREMENT FOR
SAVINGS ASSOCIATION SUBSIDIARIES OF SAVINGS AND
LOAN HOLDING COMPANIES.
Section 10(f) of the Home Owners' Loan Act (12 U.S.C.
1467a(f)) is amended to read as follows:
``(f) Declaration of Dividend.--The Director may--
``(1) require a savings association that is a subsidiary of
a savings and loan holding company to give prior notice to
the Director of the intent of the savings association to pay
a dividend on its guaranty, permanent, or other
nonwithdrawable stock; and
``(2) establish conditions on the payment of dividends by
such a savings association.''.
SEC. 205. MODERNIZING STATUTORY AUTHORITY FOR TRUST OWNERSHIP
OF SAVINGS ASSOCIATIONS.
(a) In General.--Section 10(a)(1)(C) of the Home Owners'
Loan Act (12 U.S.C. 1467a(a)(1)(C)) is amended--
(1) by striking ``trust,'' and inserting ``business
trust,''; and
(2) by inserting ``or any other trust unless by its terms
it must terminate within 25 years or not later than 21 years
and 10 months after the death of individuals living on the
effective date of the trust,'' after ``or similar
organization,''.
(b) Technical and Conforming Amendment.--Section 10(a)(3)
of the Home Owners' Loan Act (12 U.S.C. 1467a(a)(3)) is
amended--
(1) by striking ``does not include--'' and all that follows
through ``any company by virtue'' where such term appears in
subparagraph (A) and inserting ``does not include any company
by virtue'';
(2) by striking ``; and'' at the end of subparagraph (A)
and inserting a period; and
(3) by striking subparagraph (B).
SEC. 206. REPEAL OF OVERLAPPING RULES GOVERNING PURCHASED
MORTGAGE SERVICING RIGHTS.
Section 5(t) of the Home Owners' Loan Act (12 U.S.C.
1464(t)) is amended--
(1) by striking paragraph (4) and inserting the following
new paragraph:
``(4) [Repealed].''; and
(2) in paragraph (9)(A), by striking ``intangible assets,
plus'' and all that follows through the period at the end and
inserting ``intangible assets.''.
SEC. 207. RESTATEMENT OF AUTHORITY FOR FEDERAL SAVINGS
ASSOCIATIONS TO INVEST IN SMALL BUSINESS
INVESTMENT COMPANIES.
Subparagraph (D) of section 5(c)(4) of the Home Owners'
Loan Act (12 U.S.C. 1464(c)(4)) is amended to read as
follows:
``(D) Small business investment companies.--Any Federal
savings association may invest in 1 or more small business
investment companies, or in any entity established to invest
solely in small business investment companies formed under
the Small Business Investment Act of 1958, except that the
total amount of investments under this subparagraph may not
at any time exceed the amount equal to 5 percent of capital
and surplus of the savings association.''.
SEC. 208. REMOVAL OF LIMITATION ON INVESTMENTS IN AUTO LOANS.
(a) In General.--Section 5(c)(1) of the Home Owners' Loan
Act (12 U.S.C. 1464(c)(1)) is amended by adding at the end
the following new subparagraph:
``(V) Auto loans.--Loans and leases for motor vehicles
acquired for personal, family, or household purposes.''.
(b) Technical and Conforming Amendment Relating to
Qualified Thrift Investments.--Section 10(m)(4)(C)(ii) of the
Home Owners' Loan Act (12 U.S.C. 1467a(m)(4)(C)(ii)) is
amended by adding at the end the following new subclause:
``(VIII) Loans and leases for motor vehicles acquired for
personal, family, or household purposes.''.
SEC. 209. SELLING AND OFFERING OF DEPOSIT PRODUCTS.
Section 15(h) of the Securities Exchange Act of 1934 (15
U.S.C. 78o(h)) is amended by adding at the end the following
new paragraph:
``(4) Selling and offering of deposit products.--No law,
rule, regulation, or order, or other administrative action of
any State or political subdivision thereof shall directly or
indirectly require any individual who is an agent of 1
Federal savings association (as such term is defined in
section 2(5) of the Home Owners' Loan Act (12 U.S.C. 1462(5))
in selling or offering deposit (as such term is defined in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813(l)) products issued by such association to qualify or
register as a broker, dealer, associated person of a broker,
or associated person of a dealer, or to qualify or register
in any other similar status or capacity, if the individual
does not--
``(A) accept deposits or make withdrawals on behalf of any
customer of the association;
``(B) offer or sell a deposit product as an agent for
another entity that is not subject to supervision and
examination by a Federal banking agency (as defined in
section 3(z) of the Federal Deposit Insurance Act (12 U.S.C.
1813(z)), the National Credit Union Administration, or any
officer, agency, or other entity of any State which has
primary regulatory authority over State banks, State savings
associations, or State credit unions;
``(C) offer or sell a deposit product that is not an
insured deposit (as defined in section 3(m) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(m)));
``(D) offer or sell a deposit product which contains a
feature that makes it callable at the option of such Federal
savings association; or
[[Page H706]]
``(E) create a secondary market with respect to a deposit
product or otherwise add enhancements or features to such
product independent of those offered by the association.''.
SEC. 210. FUNERAL- AND CEMETERY-RELATED FIDUCIARY SERVICES.
Section 5(n) of the Home Owners' Loan Act (12 U.S.C.
1464(n)) is amended by adding at the end the following new
paragraph:
``(11) Funeral- and cemetery-related fiduciary services.--
``(A) In general.--A funeral director or cemetery operator,
when acting in such capacity, (or any other person in
connection with a contract or other agreement with a funeral
director or cemetery operator) may engage any Federal savings
association, regardless of where the association is located,
to act in any fiduciary capacity in which the savings
association has the right to act in accordance with this
section, including holding funds deposited in trust or escrow
by the funeral director or cemetery operator (or by such
other party), and the savings association may act in such
fiduciary capacity on behalf of the funeral director or
cemetery operator (or such other person).
``(B) Definitions.--For purposes of this paragraph, the
following definitions shall apply:
``(i) Cemetery.--The term `cemetery' means any land or
structure used, or intended to be used, for the interment of
human remains in any form.
``(ii) Cemetery operator.--The term `cemetery operator'
means any person who contracts or accepts payment for
merchandise, endowment, or perpetual care services in
connection with a cemetery.
``(iii) Funeral director.--The term `funeral director'
means any person who contracts or accepts payment to provide
or arrange--
``(I) services for the final disposition of human remains;
or
``(II) funeral services, property, or merchandise
(including cemetery services, property, or merchandise).''.
SEC. 211. REPEAL OF QUALIFIED THRIFT LENDER REQUIREMENT WITH
RESPECT TO OUT-OF-STATE BRANCHES.
Section 5(r)(1) of the Home Owners' Loan Act (12 U.S.C.
1464(r)(1)) is amended by striking the last sentence.
SEC. 212. SMALL BUSINESS AND OTHER COMMERCIAL LOANS.
(a) Elimination of Lending Limit on Small Business Loans.--
Section 5(c)(1) of the Home Owners' Loan Act (12 U.S.C.
1464(c)(1)) is amended by inserting after subparagraph (V)
(as added by section 208 of this title) the following new
subparagraph:
``(W) Small business loans.--Small business loans, as
defined in regulations which the Director shall prescribe.''.
(b) Increase in Lending Limit on Other Business Loans.--
Section 5(c)(2)(A) of the Home Owners' Loan Act (12 U.S.C.
1464(c)(2)(A)) is amended by striking ``, and amounts in
excess of 10 percent'' and all that follows through ``by the
Director''.
SEC. 213. CLARIFYING CITIZENSHIP OF FEDERAL SAVINGS
ASSOCIATIONS FOR FEDERAL COURT JURISDICTION.
Section 5 of the Home Owners' Loan Act (12 U.S.C. 1464) is
amended by adding at the end the following new subsection:
``(x) Home State Citizenship.--In determining whether a
Federal court has diversity jurisdiction over a case in which
a Federal savings association is a party, the Federal savings
association shall be considered to be a citizen only of the
States in which such savings association has its home office
and its principal place of business (if the principal place
of business is in a different State than the home office).''.
SEC. 214. INCREASE IN LIMITS ON COMMERCIAL REAL ESTATE LOANS.
Section 5(c)(2)(B)(i) of the Home Owners' Loan Act (12
U.S.C. 1464(c)(2)(B)(i)) is amended by striking ``400
percent'' and inserting ``500 percent''.
SEC. 215. REPEAL OF ONE LIMIT ON LOANS TO ONE BORROWER.
Subparagraph (A) of section 5(u)(2) of the Home Owners'
Loan Act (12 U.S.C. 1464(u)(2)(A)) is amended--
(1) by striking subclause (I) of clause (ii);
(2) by redesignating subclauses (II), (III), (IV), and (V)
of clause (ii) as subclauses (I), (II), (III), and (IV),
respectively;
(3) in clause (i)--
(A) by striking ``for any'' and inserting ``For any''; and
(B) by striking ``; or'' and inserting a period; and
(4) in clause (ii), by striking ``to develop domestic'' and
inserting ``To develop domestic''.
SEC. 216. SAVINGS ASSOCIATION CREDIT CARD BANKS.
Section 10(a)(1)(A) of the Home Owners' Loan Act (12 U.S.C.
1467a(a)(1)(A)) is amended by inserting ``and such term does
not include an institution described in section 2(c)(2)(F) of
the Bank Holding Company Act of 1956 for purposes of
subsections (a)(1)(E), (c)(3)(B)(i), (c)(9)(C)(i), and
(e)(3)'' before the period at the end.
SEC. 217. INTERSTATE ACQUISITIONS BY S&L HOLDING COMPANIES.
Section 10(e)(3) of the Home Owners' Loan Act (12 U.S.C.
1467a(e)(3)) is amended--
(1) by redesignating subparagraphs (A), (B), and (C) as
subparagraphs (B), (C), and (D), respectively; and
(2) by inserting before subparagraph (B) (as so
redesignated) the following new subparagraph:
``(A) such acquisition would be permissible under section
3(d) of the Bank Holding Company Act of 1956 if the savings
and loan holding company were a bank holding company and any
savings association to be acquired were a bank;''.
SEC. 218. BUSINESS ORGANIZATION FLEXIBILITY FOR FEDERAL
SAVINGS ASSOCIATIONS.
(a) In General.--Section 5 of the Home Owners' Loan Act (12
U.S.C. 1464) is amended by inserting after subsection (x) (as
added by section 213) following new subsection:
``(y) Alternative Business Organization.--
``(1) In general.--The Director may prescribe regulations
that--
``(A) permit a Federal savings association to be organized
other than as a corporation; and
``(B) provide requirements for the organizational
characteristics of a Federal savings association organized
and operating other than as a corporation, consistent with
the safety and soundness of the Federal savings association.
``(2) Equal treatment.--Except as otherwise provided in
regulations prescribed under subsection (1), a Federal
savings association that is operating other than as a
corporation shall have the same rights and privileges and
shall be subject to the same duties, restrictions, penalties,
liabilities, conditions, and limitations as a Federal savings
association that is organized as a corporation.''.
(b) Technical and Conforming Amendments.--
(1) Section 5(a)(1) of the Home Owners' Loan Act (12 U.S.C.
1464(a)(1)) is amended by striking ``organization,
incorporation,'' and inserting ``organization (as a
corporation or other form of business organization provided
under regulations prescribed by the Director under subsection
(x)),''.
(2) The last sentence of section 5(i)(1) of the Home
Owners' Loan Act (12 U.S.C. 1464(i)(1)) is amended by
striking ``incorporated'' and inserting ``organized''.
(3) Section 5(o)(1) of the Home Owners' Loan Act (12 U.S.C.
1464(a)(1)) is amended by striking ``organization,
incorporation,'' and inserting ``organization (as a
corporation or other form of business organization provided
under regulations prescribed by the Director under subsection
(x)),''.
TITLE III--CREDIT UNION PROVISIONS
SEC. 301. PRIVATELY INSURED CREDIT UNIONS AUTHORIZED TO
BECOME MEMBERS OF A FEDERAL HOME LOAN BANK.
(a) In General.--Section 4(a) of the Federal Home Loan Bank
Act (12 U.S.C. 1424(a)) is amended by adding at the end the
following new paragraph:
``(5) Certain privately insured credit unions.--
``(A) In general.--A credit union which has been
determined, in accordance with section 43(e)(1) of the
Federal Deposit Insurance Act and subject to the requirements
of subparagraph (B), to meet all eligibility requirements for
Federal deposit insurance shall be treated as an insured
depository institution for purposes of determining the
eligibility of such credit union for membership in a Federal
home loan bank under paragraphs (1), (2), and (3).
``(B) Certification by appropriate supervisor.--
``(i) In general.--For purposes of this paragraph and
subject to clause (ii), a credit union which lacks Federal
deposit insurance and which has applied for membership in a
Federal home loan bank may be treated as meeting all the
eligibility requirements for Federal deposit insurance only
if the appropriate supervisor of the State in which the
credit union is chartered has determined that the credit
union meets all the eligibility requirements for Federal
deposit insurance as of the date of the application for
membership.
``(ii) Certification deemed valid.--If, in the case of any
credit union to which clause (i) applies, the appropriate
supervisor of the State in which such credit union is
chartered fails to make a determination pursuant to such
clause by the end of the 6-month period beginning on the date
of the application, the credit union shall be deemed to have
met the requirements of clause (i).
``(C) Security interests of federal home loan bank not
avoidable.--Notwithstanding any provision of State law
authorizing a conservator or liquidating agent of a credit
union to repudiate contracts, no such provision shall apply
with respect to--
``(i) any extension of credit from any Federal home loan
bank to any credit union which is a member of any such bank
pursuant to this paragraph; or
``(ii) any security interest in the assets of such credit
union securing any such extension of credit.''.
(b) Copies of Audits of Private Insurers of Certain
Depository Institutions Required to Be Provided to
Supervisory Agencies.--Section 43(a)(2) of the Federal
Deposit Insurance Act (12 U.S.C. 1831t(a)(2)) is amended--
(1) by striking ``and'' at the end of subparagraph (A)(i);
(2) by striking the period at the end of clause (ii) of
subparagraph (A) and inserting a semicolon;
(3) by inserting the following new clauses at the end of
subparagraph (A):
``(iii) in the case of depository institutions described in
subsection (f)(2)(A) the deposits of which are insured by the
private insurer, the National Credit Union Administration,
not later than 7 days after that audit is completed; and
``(iv) in the case of depository institutions described in
subsection (f)(2)(A) the deposits of which are insured by the
private insurer which are members of a Federal home loan
bank, the Federal Housing Finance Board, not later than 7
days after that audit is completed.''; and
(4) by adding at the end the following new subparagraph:
``(C) Consultation.--The appropriate supervisory agency of
each State in which a private deposit insurer insures
deposits in an institution described in subsection (f)(2)(A)
which--
[[Page H707]]
``(i) lacks Federal deposit insurance; and
``(ii) has become a member of a Federal home loan bank,
shall provide the National Credit Union Administration, upon
request, with the results of any examination and reports
related thereto concerning the private deposit insurer to
which such agency may have in its possession.''.
SEC. 302. LEASES OF LAND ON FEDERAL FACILITIES FOR CREDIT
UNIONS.
(a) In General.--Section 124 of the Federal Credit Union
Act (12 U.S.C. 1770) is amended--
(1) by striking ``Upon application by any credit union''
and inserting ``Notwithstanding any other provision of law,
upon application by any credit union'';
(2) by inserting ``on lands reserved for the use of, and
under the exclusive or concurrent jurisdiction of, the United
States or'' after ``officer or agency of the United States
charged with the allotment of space'';
(3) by inserting ``lease land or'' after ``such officer or
agency may in his or its discretion''; and
(4) by inserting ``or the facility built on the lease
land'' after ``credit union to be served by the allotment of
space''.
(b) Clerical Amendment.--The heading for section 124 is
amended by inserting ``or federal land'' after ``buildings''.
SEC. 303. INVESTMENTS IN SECURITIES BY FEDERAL CREDIT UNIONS.
Section 107 of the Federal Credit Union Act (12 U.S.C.
1757) is amended--
(1) in the matter preceding paragraph (1) by striking ``A
Federal credit union'' and inserting ``(a) In General.--Any
Federal credit union''; and
(2) by adding at the end the following new subsection:
``(b) Additional Investment Authority.--
``(1) In general.--In addition to any investments otherwise
authorized, a Federal credit union may purchase and hold for
its own account such investment securities of investment
grade as the Board may authorize by regulation, subject to
such limitations and restrictions as the Board may prescribe
in the regulations.
``(2) Percentage limitations.--
``(A) Single obligor.--In no event may the total amount of
investment securities of any single obligor or maker held by
a Federal credit union for the credit union's own account
exceed at any time an amount equal to 10 percent of the net
worth of the credit union.
``(B) Aggregate investments.--In no event may the aggregate
amount of investment securities held by a Federal credit
union for the credit union's own account exceed at any time
an amount equal to 10 percent of the assets of the credit
union.
``(3) Investment security defined.--
``(A) In general.--For purposes of this subsection, the
term `investment security' means marketable obligations
evidencing the indebtedness of any person in the form of
bonds, notes, or debentures and other instruments commonly
referred to as investment securities.
``(B) Further definition by board.--The Board may further
define the term `investment security'.
``(4) Investment grade defined.--The term `investment
grade' means with respect to an investment security purchased
by a credit union for its own account, an investment security
that at the time of such purchase is rated in one of the 4
highest rating categories by at least 1 nationally recognized
statistical rating organization.
``(5) Clarification of prohibition on stock ownership.--No
provision of this subsection shall be construed as
authorizing a Federal credit union to purchase shares of
stock of any corporation for the credit union's own account,
except as otherwise permitted by law.''.
SEC. 304. INCREASE IN GENERAL 12-YEAR LIMITATION OF TERM OF
FEDERAL CREDIT UNION LOANS TO 15 YEARS.
Section 107(a)(5) of the Federal Credit Union Act (12
U.S.C. 1757(5)) (as so designated by section 303 of this
title) is amended--
(1) in the matter preceding subparagraph (A), by striking
``to make loans, the maturities of which shall not exceed
twelve years except as otherwise provided herein'' and
inserting ``to make loans, the maturities of which shall not
exceed 15 years or any longer maturity as the Board may
allow, in regulations, except as otherwise provided in this
Act'';
(2) in subparagraph (A)--
(A) by striking clause (ii);
(B) by redesignating clauses (iii) through (x) as clauses
(ii) through (ix), respectively; and
(C) by inserting ``and'' after the semicolon at the end of
clause (viii) (as so redesignated).
SEC. 305. INCREASE IN 1 PERCENT INVESTMENT LIMIT IN CREDIT
UNION SERVICE ORGANIZATIONS.
Section 107(a)(7)(I) of the Federal Credit Union Act (12
U.S.C. 1757(7)(I)) (as so designated by section 303 of this
title) is amended by striking ``up to 1 per centum of the
total paid'' and inserting ``up to 3 percent of the total
paid''.
SEC. 306. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS TO
NONPROFIT RELIGIOUS ORGANIZATIONS.
Section 107A(a) of the Federal Credit Union Act (12 U.S.C.
1757a(a)) is amended by inserting ``, excluding loans made to
nonprofit religious organizations,'' after ``total amount of
such loans''.
SEC. 307. CHECK CASHING AND MONEY TRANSFER SERVICES OFFERED
WITHIN THE FIELD OF MEMBERSHIP.
Paragraph (12) of section 107(a) of the Federal Credit
Union Act (12 U.S.C. 1757(12)) (as so designated by section
303 of this title) is amended to read as follows:
``(12) in accordance with regulations prescribed by the
Board--
``(A) to sell, to persons in the field of membership,
negotiable checks (including travelers checks), money orders,
and other similar money transfer instruments (including
international and domestic electronic fund transfers); and
``(B) to cash checks and money orders and receive
international and domestic electronic fund transfers for
persons in the field of membership for a fee;''.
SEC. 308. VOLUNTARY MERGERS INVOLVING MULTIPLE COMMON-BOND
CREDIT UNIONS.
Section 109(d)(2) of the Federal Credit Union Act (12
U.S.C. 1759(d)(2)) is amended--
(1) by striking ``or'' at the end of clause (ii) of
subparagraph (B);
(2) by striking the period at the end of subparagraph (C)
and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(D) a merger involving any such Federal credit union
approved by the Board on or after August 7, 1998.''.
SEC. 309. CONVERSIONS INVOLVING COMMON-BOND CREDIT UNIONS.
Section 109(g) of the Federal Credit Union Act (12 U.S.C.
1759(g)) is amended by inserting after paragraph (2) the
following new paragraph:
``(3) Criteria for continued membership of certain member
groups in community charter conversions.--In the case of a
voluntary conversion of a common-bond credit union described
in paragraph (1) or (2) of subsection (b) into a community
credit union described in subsection (b)(3), the Board shall
prescribe, by regulation, the criteria under which the Board
may determine that a member group or other portion of a
credit union's existing membership, that is located outside
the well-defined local community, neighborhood, or rural
district that shall constitute the community charter, can be
satisfactorily served by the credit union and remain within
the community credit union's field of membership.''.
SEC. 310. CREDIT UNION GOVERNANCE.
(a) Expulsion of Members for Just Cause.--Subsection (b) of
section 118 of the Federal Credit Union Act (12 U.S.C.
1764(b)) is amended to read as follows:
``(b) Policy and Actions of Boards of Directors of Federal
Credit Unions.--
``(1) Expulsion of members for nonparticipation or for just
cause.--The board of directors of a Federal credit union may,
by majority vote of a quorum of directors, adopt and enforce
a policy with respect to expulsion from membership, by a
majority vote of such board of directors, based on just
cause, including disruption of credit union operations, or on
nonparticipation by a member in the affairs of the credit
union.
``(2) Written notice of policy to members.--If a policy
described in paragraph (1) is adopted, written notice of the
policy as adopted and the effective date of such policy shall
be provided to--
``(A) each existing member of the credit union not less
than 30 days prior to the effective date of such policy; and
``(B) each new member prior to or upon applying for
membership.''.
(b) Term Limits Authorized for Board Members of Federal
Credit Unions.--Section 111(a) of the Federal Credit Union
Act (12 U.S.C. 1761(a)) is amended by adding at the end the
following new sentence: ``The bylaws of a Federal credit
union may limit the number of consecutive terms any person
may serve on the board of directors of such credit union.''.
(c) Reimbursement for Lost Wages Due to Service on Credit
Union Board not Treated as Compensation.--Section 111(c) of
the Federal Credit Union Act (12 U.S.C. 1761(c)) is amended
by inserting ``, including lost wages,'' after ``the
reimbursement of reasonable expenses''.
SEC. 311. PROVIDING THE NATIONAL CREDIT UNION ADMINISTRATION
WITH GREATER FLEXIBILITY IN RESPONDING TO
MARKET CONDITIONS.
Section 107(a)(5)(A)(v)(I) of the Federal Credit Union Act
(12 U.S.C. 1757(5)(A)(vi)(I)) (as so designated by section
303 and redesignated by section 304(2)(B) of this title) is
amended by striking ``six-month period and that prevailing
interest rate levels'' and inserting ``6-month period or that
prevailing interest rate levels''.
SEC. 312. EXEMPTION FROM PRE-MERGER NOTIFICATION REQUIREMENT
OF THE CLAYTON ACT.
Section 7A(c)(7) of the Clayton Act (15 U.S.C. 18a(c)(7))
is amended by inserting ``section 205(b)(3) of the Federal
Credit Union Act (12 U.S.C. 1785(b)(3)),'' before ``or
section 3''.
SEC. 313. TREATMENT OF CREDIT UNIONS AS DEPOSITORY
INSTITUTIONS UNDER SECURITIES LAWS.
(a) Definition of Bank Under the Securities Exchange Act of
1934.--Section 3(a)(6) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)(6)) (as amended by section 201(a)(1) of
this Act) is amended--
(1) by striking ``this title, and (D) a receiver'' and
inserting ``this title, (D) an insured credit union (as
defined in section 101(7) of the Federal Credit Union Act)
but only for purposes of paragraphs (4) and (5) of this
subsection and only for activities otherwise authorized by
applicable laws to which such credit unions are subject, and
(E) a receiver''; and
(2) in subparagraph (E) (as so redesignated by paragraph
(1) of this subsection) by striking ``(A), (B), or (C)'' and
inserting ``(A), (B), (C), or (D)''.
(b) Definition of Bank Under the Investment Advisers Act of
1940.--Section 202(a)(2) of the Investment Advisers Act of
1940 (15 U.S.C. 80b-2(a)(2)) (as amended by section 201(b)(1)
of this Act) is amended--
(1) by striking ``this title, and (D) a receiver'' and
inserting ``this title, (D) an insured credit
[[Page H708]]
union (as defined in section 101(7) of the Federal Credit
Union Act) but only for activities otherwise authorized by
applicable laws to which such credit unions are subject, and
(E) a receiver''; and
(2) in subparagraph (E) (as so redesignated by paragraph
(1) of this subsection) by striking ``(A), (B), or (C)'' and
inserting ``(A), (B), (C), or (D)''.
(c) Definition of Appropriate Federal Banking Agency.--
Section 210A(c) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-10a(c)) is amended by inserting ``and includes the
National Credit Union Administration Board, in the case of an
insured credit union (as defined in section 101(7) of the
Federal Credit Union Act)'' before the period at the end.
SEC. 314. CLARIFICATION OF DEFINITION OF NET WORTH UNDER
CERTAIN CIRCUMSTANCES FOR PURPOSES OF PROMPT
CORRECTIVE ACTION.
Subparagraph (A) of section 216(o)(2) of the Federal Credit
Union Act (12 U.S.C. 1790d(o)(2)(A)) is amended--
(1) by inserting ``the'' before ``retained earnings
balance''; and
(2) by inserting ``, together with any amounts that were
previously retained earnings of any other credit union with
which the credit union has combined'' before the semicolon at
the end.
SEC. 315. AMENDMENTS RELATING TO NONFEDERALLY INSURED CREDIT
UNIONS.
(a) In General.--Subsection (a) of section 43 of the
Federal Deposit Insurance Act (12 U.S.C. 1831t(a)) is amended
by adding at the end the following new paragraph:
``(3) Enforcement by appropriate state supervisor.--Any
appropriate State supervisor of a private deposit insurer,
and any appropriate State supervisor of a depository
institution which receives deposits that are insured by a
private deposit insurer, may examine and enforce compliance
with this subsection under the applicable regulatory
authority of such supervisor.''.
(b) Amendment Relating to Disclosures Required, Periodic
Statements and Account Records.--Section 43(b)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1831t(b)(1)) is
amended by striking ``or similar instrument evidencing a
deposit'' and inserting ``or share certificate''.
(c) Amendments Relating to Disclosures Required,
Advertising, Premises.-- Section 43(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C. 1831t(b)(2)) is amended to
read as follows:
``(2) Advertising; premises.--
``(A) In general.--Include clearly and conspicuously in all
advertising, except as provided in subparagraph (B); and at
each station or window where deposits are normally received,
its principal place of business and all its branches where it
accepts deposits or opens accounts (excluding automated
teller machines or point of sale terminals), and on its main
Internet page, a notice that the institution is not federally
insured.
``(B) Exceptions.--The following need not include a notice
that the institution is not federally insured:
``(i) Statements or reports of financial condition of the
depository institution that are required to be published or
posted by State or Federal law or regulation.
``(ii) Any sign, document, or other item that contains the
name of the depository institution, its logo, or its contact
information, but only if the sign, document, or item does not
include any information about the institution's products or
services or information otherwise promoting the institution.
``(iii) Small utilitarian items that do not mention deposit
products or insurance if inclusion of the notice would be
impractical.''.
(d) Amendments Relating to Acknowledgment of Disclosure.--
Section 43(b)(3) of the Federal Deposit Insurance Act (12
U.S.C. 1831t(b)(3)) is amended to read as follows:
``(3) Acknowledgment of disclosure.--
``(A) New depositors obtained other than through a
conversion or merger.--With respect to any depositor who was
not a depositor at the depository institution before the
effective date of the Financial Services Relief Act of 2005,
and who is not a depositor as described in subparagraph (B),
receive any deposit for the account of such depositor only if
the depositor has signed a written acknowledgement that--
``(i) the institution is not federally insured; and
``(ii) if the institution fails, the Federal Government
does not guarantee that the depositor will get back the
depositor's money.
``(B) New depositors obtained through a conversion or
merger.--With respect to a depositor at a federally insured
depository institution that converts to, or merges into, a
depository institution lacking federal insurance after the
effective date of the Financial Services Regulatory Relief
Act of 2005, receive any deposit for the account of such
depositor only if--
``(i) the depositor has signed a written acknowledgement
described in subparagraph (A); or
``(ii) the institution makes an attempt, as described in
subparagraph (D) and sent by mail no later than 45 days after
the effective date of the conversion or merger, to obtain the
acknowledgment.
``(C) Current depositors.--Receive any deposit after the
effective date of the Financial Services Regulatory Relief
Act of 2005 for the account of any depositor who was a
depositor on that date only if--
``(i) the depositor has signed a written acknowledgement
described in subparagraph (A); or
``(ii) the institution makes an attempt, as described in
subparagraph (D) and sent by mail no later than 45 days after
the effective date of the Financial Services Regulatory
Relief Act of 2005, to obtain the acknowledgment.
``(D) Alternative provision of notice to current depositors
and new depositors obtained through a conversion or merger.--
``(i) In general.--Transmit to each depositor who has not
signed a written acknowledgement described in subparagraph
(A)--
``(I) a conspicuous card containing the information
described in clauses (i) and (ii) of subparagraph (A), and a
line for the signature of the depositor; and
``(II) accompanying materials requesting the depositor to
sign the card, and return the signed card to the
institution.''.
(e) Repeal of Provision Prohibiting Nondepository
Institutions From Accepting Deposits.--Section 43 of the
Federal Deposit Insurance Act (12 U.S.C. 1831t) is amended--
(1) by striking subsection (e); and
(2) by redesignating subsections (f) and (g) as subsections
(e) and (f), respectively.
(f) Repeal of Provision Concerning Nondepository
Institutions Masquerading as Depository Institutions and
Clarification of Depository Institutions Covered by the
Statute.--Subsection (e)(2) (as so redesignated by subsection
(e) of this section) of section 43 of the Federal Deposit
Insurance Act (12 U.S.C. 1831t) is amended to read as
follows:
``(2) Depository institution.--The term `depository
institution'--
``(A) includes any entity described in section
19(b)(1)(A)(iv) of the Federal Reserve Act; and
``(B) does not include any national bank, State member
bank, or Federal branch.''.
(g) Repeal of FTC Authority to Enforce Independent Audit
Requirement; Concurrent State Enforcement.--Subsection (f)
(as so redesignated by subsection (e) of this section) of
section 43 of the Federal Deposit Insurance Act (12 U.S.C.
1831t) is amended to read as follows:
``(f) Enforcement.--
``(1) Limited ftc enforcement authority.--Compliance with
the requirements of subsections (b) and (c), and any
regulation prescribed or order issued under any such
subsection, shall be enforced under the Federal Trade
Commission Act by the Federal Trade Commission.
``(2) Broad state enforcement authority.--
``(A) In general.--Subject to subparagraph (C), an
appropriate State supervisor of a depository institution
lacking Federal deposit insurance may examine and enforce
compliance with the requirements of this section, and any
regulation prescribed under this section.
``(B) State powers.--For purposes of bringing any action to
enforce compliance with this section, no provision of this
section shall be construed as preventing an appropriate State
supervisor of a depository institution lacking Federal
deposit insurance from exercising any powers conferred on
such official by the laws of such State.
``(C) Limitation on state action while federal action
pending.--If the Federal Trade Commission has instituted an
enforcement action for a violation of this section, no
appropriate State supervisor may, during the pendency of such
action, bring an action under this section against any
defendant named in the complaint of the Commission for any
violation of this section that is alleged in that
complaint.''.
TITLE IV--DEPOSITORY INSTITUTION PROVISIONS
SEC. 401. EASING RESTRICTIONS ON INTERSTATE BRANCHING AND
MERGERS.
(a) De Novo Interstate Branches of National Banks.--
(1) In general.--Section 5155(g)(1) of the Revised Statutes
of the United States (12 U.S.C. 36(g)(1)) is amended by
striking ``maintain a branch if--'' and all that follows
through the end of subparagraph (B) and inserting ``maintain
a branch.''.
(2) Clerical amendment.--The heading for subsection (g) of
section 5155 of the Revised Statutes of the United States is
amended by striking ``State `Opt-in' Election to Permit''.
(b) De Novo Interstate Branches of State Nonmember Banks.--
(1) In general.--Section 18(d)(4)(A) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(d)(4)(A)) is amended by
striking ``maintain a branch if--'' and all that follows
through the end of clause (ii) and inserting ``maintain a
branch.''.
(2) Interstate branching by subsidiaries of commercial
firms prohibited.--Section 18(d)(3)) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(d)(3)) is amended by adding at
the end the following new subparagraph:
``(C) Interstate branching by subsidiaries of commercial
firms prohibited.--
``(i) In general.--If the appropriate State bank supervisor
of the home State of any industrial loan company, industrial
bank, or other institution described in section 2(c)(2)(H) of
the Bank Holding Company Act of 1956, or the appropriate
State bank supervisor of any host State with respect to such
company, bank, or institution, determines that such company,
bank, or institution is controlled, directly or indirectly,
by a commercial firm, such company, bank, or institution may
not acquire, establish, or operate a branch in such host
State.
``(ii) Commercial firm defined.--For purposes of this
subsection, the term `commercial firm' means any entity at
least 15 percent of the annual gross revenues of which on a
consolidated basis, including all affiliates of the entity,
were derived from engaging, on an on-going basis, in
activities that are not financial in nature or incidental to
a financial activity during at least 3 of the prior 4
calendar quarters.
``(iii) Grandfathered institutions.--Clause (i) shall not
apply with respect to any industrial loan company, industrial
bank, or other institution described in section 2(c)(2)(H) of
the Bank Holding Company Act of 1956--
[[Page H709]]
``(I) which became an insured depository institution before
October 1, 2003 or pursuant to an application for deposit
insurance which was approved by the Corporation before such
date; and
``(II) with respect to which there is no change in control,
directly or indirectly, of the company, bank, or institution
after September 30, 2003, that requires an application under
subsection (c), section 7(j), section 3 of the Bank Holding
Company Act of 1956, or section 10 of the Home Owners' Loan
Act.
``(iv) Transition provision.--Any divestiture required
under this subparagraph of a branch in a host State shall be
completed as quickly as is reasonably possible.
``(v) Corporate reorganizations permitted.--The acquisition
of direct or indirect control of the company, bank, or
institution referred to in clause (iii)(II) shall not be
treated as a `change in control' for purposes of such clause
if the company acquiring control is itself directly or
indirectly controlled by a company that was an affiliate of
such company, bank, or institution on the date referred to in
clause (iii)(II), and remained an affiliate at all times
after such date.''.
(3) Technical and conforming amendments.--Section 18(d)(4)
of the Federal Deposit Insurance Act (12 U.S.C. 1828(d)(4))
is amended--
(A) in subparagraph (A) by striking ``Subject to
subparagraph (B)'' and inserting ``Subject to subparagraph
(B) and paragraph (3)(C)''; and
(B) in subparagraphs (D) and (E), by striking ``The term''
and inserting ``For purposes of this subsection, the term''.
(4) Clerical amendment.--The heading for paragraph (4) of
section 18(d) of the Federal Deposit Insurance Act is amended
by striking ``State `opt-in' election to permit interstate''
and inserting ``Interstate''.
(c) De Novo Interstate Branches of State Member Banks.--The
3rd undesignated paragraph of section 9 of the Federal
Reserve Act (12 U.S.C. 321) is amended by adding at the end
the following new sentences: ``A State member bank may
establish and operate a de novo branch in a host State (as
such terms are defined in section 18(d) of the Federal
Deposit Insurance Act) on the same terms and conditions and
subject to the same limitations and restrictions as are
applicable to the establishment of a de novo branch of a
national bank in a host State under section 5155(g) of the
Revised Statutes of the United States or are applicable to an
insured State nonmember bank under section 18(d)(3) of the
Federal Deposit Insurance Act''. Such section 5155(g) shall
be applied for purposes of the preceding sentence by
substituting `Board of Governors of the Federal Reserve
System' for `Comptroller of the Currency' and `State member
bank' for `national bank'.''.
(d) Interstate Merger of Banks.--
(1) Merger of insured bank with another depository
institution or trust company.--Section 44(a)(1) of the
Federal Deposit Insurance Act (12 U.S.C. 1831u(a)(1)) is
amended--
(A) by striking ``Beginning on June 1, 1997, the'' and
inserting ``The''; and
(B) by striking ``insured banks with different home
States'' and inserting ``an insured bank and another insured
depository institution or trust company with a different home
State than the resulting insured bank''.
(2) National bank trust company merger with other trust
company.--Subsection (b) of section 4 of the National Bank
Consolidation and Merger Act (12 U.S.C. 215a-1(b)) is amended
to read as follows:
``(b) Merger of National Bank Trust Company With Another
Trust Company.--A national bank that is a trust company may
engage in a consolidation or merger under this Act with any
trust company with a different home State, under the same
terms and conditions that would apply if the trust companies
were located within the same State.''.
(e) Interstate Fiduciary Activity.--Section 18(d) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(d)) is amended
by adding at the end the following new paragraph:
``(5) Interstate fiduciary activity.--
``(A) Authority of state bank supervisor.--The State bank
supervisor of a State bank may approve an application by the
State bank, when not in contravention of home State or host
State law, to act as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee,
receiver, committee of estates of lunatics, or in any other
fiduciary capacity in a host State in which State banks or
other corporations which come into competition with national
banks are permitted to act under the laws of such host State.
``(B) Noncontravention of host state law.--Whenever the
laws of a host State authorize or permit the exercise of any
or all of the foregoing powers by State banks or other
corporations which compete with national banks, the granting
to and the exercise of such powers by a State bank as
provided in this paragraph shall not be deemed to be in
contravention of host State law within the meaning of this
paragraph.
``(C) State bank includes trust companies.--For purposes of
this paragraph, the term `State bank' includes any State-
chartered trust company (as defined in section 44(g)).
``(D) Other definitions.--For purposes of this paragraph,
the term `home State' and `host State' have the meanings
given such terms in section 44.''.
(f) Technical and Conforming Amendments.--
(1) Section 44 of the Federal Deposit Insurance Act (12
U.S.C. 1831u) is amended--
(A) in subsection (a)--
(i) by striking paragraph (4) and inserting the following
new paragraph:
``(4) Treatment of branches in connection with certain
interstate merger transactions.--In the case of an interstate
merger transaction which involves the acquisition of a branch
of an insured depository institution or trust company without
the acquisition of the insured depository institution or
trust company, the branch shall be treated, for purposes of
this section, as an insured depository institution or trust
company the home State of which is the State in which the
branch is located.''; and
(ii) by striking paragraphs (5) and (6) and inserting the
following new paragraph:
``(5) Applicability to industrial loan companies.--No
provision of this section shall be construed as authorizing
the approval of any transaction involving a industrial loan
company, industrial bank, or other institution described in
section 2(c)(2)(H) of the Bank Holding Company Act of 1956,
or the acquisition, establishment, or operation of a branch
by any such company, bank, or institution, that is not
allowed under section 18(d)(3).''.
(B) in subsection (b)--
(i) by striking ``bank'' each place such term appears in
paragraph (2)(B)(i) and inserting ``insured depository
institution'';
(ii) by striking ``banks'' where such term appears in
paragraph (2)(E) and inserting ``insured depository
institutions or trust companies'';
(iii) by striking ``bank affiliate'' each place such term
appears in that portion of paragraph (3) that precedes
subparagraph (A) and inserting ``insured depository
institution affiliate'';
(iv) by striking ``any bank'' where such term appears in
paragraph (3)(B) and inserting ``any insured depository
institution'';
(v) by striking ``bank'' where such term appears in
paragraph (4)(A) and inserting ``insured depository
institution and trust company''; and
(vi) by striking ``all banks'' where such term appears in
paragraph (5) and inserting ``all insured depository
institutions and trust companies'';
(C) in subsection (d)(1), by striking ``any bank'' and
inserting ``any insured depository institution or trust
company'';
(D) in subsection (e)--
(i) by striking ``1 or more banks'' and inserting ``1 or
more insured depository institutions''; and
(ii) by striking ``paragraph (2), (4), or (5)'' and
inserting ``paragraph (2)'';
(E) by striking clauses (i) and (ii) of subsection
(g)(4)(A) and inserting the following new clauses:
``(i) with respect to a national bank or Federal savings
association, the State in which the main office of the bank
or savings association is located; and
``(ii) with respect to a State bank, State savings
association, or State-chartered trust company, the State by
which the bank, savings association, or trust company is
chartered; and'';
(F) by striking paragraph (5) of subsection (g) and
inserting the following new paragraph:
``(5) Host state.--The term `host State' means--
``(A) with respect to a bank, a State, other than the home
State of the bank, in which the bank maintains, or seeks to
establish and maintain, a branch; and
``(B) with respect to a trust company and solely for
purposes of section 18(d)(5), a State, other than the home
State of the trust company, in which the trust company acts,
or seeks to act, in 1 or more fiduciary capacities.'';
(G) in subsection (g)(10), by striking ``section 18(c)(2)''
and inserting ``paragraph (1) or (2) of section 18(c), as
appropriate,''; and
(H) in subsection (g), by adding at the end the following
new paragraph:
``(12) Trust company.--The term `trust company' means--
``(A) any national bank;
``(B) any savings association; and
``(C) any bank, banking association, trust company, savings
bank, or other banking institution which is incorporated
under the laws of any State,
that is authorized to act in 1 or more fiduciary capacities
but is not engaged in the business of receiving deposits
other than trust funds (as defined in section 3(p)).''.
(2) Section 3(d) of the Bank Holding Company Act of 1956
(12 U.S.C. 1842(d)) is amended--
(A) in paragraph (1)--
(i) by striking subparagraphs (B) and (C); and
(ii) by redesignating subparagraph (D) as subparagraph (B);
and
(B) in paragraph (5), by striking ``subparagraph (B) or
(D)'' and inserting ``subparagraph (B)''.
(3) Subsection (c) of section 4 of the National Bank
Consolidation and Merger Act (12 U.S.C. 215a-1(c)) is amended
to read as follows:
``(c) Definitions.--For purposes of this section, the terms
`home State', `out-of-State bank', and `trust company' each
have the same meaning as in section 44(g) of the Federal
Deposit Insurance Act.''.
(g) Clerical Amendments.--
(1) The heading for section 44(b)(2)(E) of the Federal
Deposit Insurance Act (12 U.S.C. 1831u(b)(2)(E)) is amended
by striking ``banks'' and inserting ``insured depository
institutions and trust companies''.
(2) The heading for section 44(e) of the Federal Deposit
Insurance Act (12 U.S.C. 1831u(e)) is amended by striking
``Banks'' and inserting ``Insured Depository Institutions''.
SEC. 402. STATUTE OF LIMITATIONS FOR JUDICIAL REVIEW OF
APPOINTMENT OF A RECEIVER FOR DEPOSITORY
INSTITUTIONS.
(a) National Banks.--Section 2 of the National Bank
Receivership Act (12 U.S.C. 191) is amended--
(1) by striking ``SECTION 2. The Comptroller of the
Currency'' and inserting the following:
``SEC. 2. APPOINTMENT OF RECEIVER FOR A NATIONAL BANK.
``(a) In General.--The Comptroller of the Currency''; and
[[Page H710]]
(2) by adding at the end the following new subsection:
``(b) Judicial Review.--If the Comptroller of the Currency
appoints a receiver under subsection (a), the national bank
may, within 30 days thereafter, bring an action in the United
States district court for the judicial district in which the
home office of such bank is located, or in the United States
District Court for the District of Columbia, for an order
requiring the Comptroller of the Currency to remove the
receiver, and the court shall, upon the merits, dismiss such
action or direct the Comptroller of the Currency to remove
the receiver.''.
(b) Insured Depository Institutions.--Section 11(c)(7) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(c)(7)) is
amended to read as follows:
``(7) Judicial review.--If the Corporation is appointed
(including the appointment of the Corporation as receiver by
the Board of Directors) as conservator or receiver of a
depository institution under paragraph (4), (9), or (10), the
depository institution may, within 30 days thereafter, bring
an action in the United States district court for the
judicial district in which the home office of such depository
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
(regardless of how such appointment was made), and the court
shall, upon the merits, dismiss such action or direct the
Corporation to be removed as the conservator or receiver.''.
(c) Expansion of Period for Challenging the Appointment of
a Liquidating Agent.--Subparagraph (B) of section 207(a)(1)
of the Federal Credit Union Act (12 U.S.C. 1787(a)(1)) is
amended by striking ``10 days'' and inserting ``30 days''.
(d) Effective Date.--The amendments made by subsections
(a), (b), and (c) shall apply with respect to conservators,
receivers, or liquidating agents appointed on or after the
date of the enactment of this Act.
SEC. 403. REPORTING REQUIREMENTS RELATING TO INSIDER LENDING.
(a) Reporting Requirements Regarding Loans to Executive
Officers of Member Banks.--Section 22(g) of the Federal
Reserve Act (12 U.S.C. 375a) is amended--
(1) by striking paragraphs (6) and (9); and
(2) by redesignating paragraphs (7), (8), and (10) as
paragraphs (6), (7), and (8), respectively.
(b) Reporting Requirements Regarding Loans From
Correspondent Banks to Executive Officers and Shareholders of
Insured Banks.--Section 106(b)(2) of the Bank Holding Company
Act Amendments of 1970 (12 U.S.C. 1972(2)) is amended--
(1) by striking subparagraph (G); and
(2) by redesignating subparagraphs (H) and (I) as
subparagraphs (G) and (H), respectively.
SEC. 404. AMENDMENT TO PROVIDE AN INFLATION ADJUSTMENT FOR
THE SMALL DEPOSITORY INSTITUTION EXCEPTION
UNDER THE DEPOSITORY INSTITUTION MANAGEMENT
INTERLOCKS ACT.
Section 203(1) of the Depository Institution Management
Interlocks Act (12 U.S.C. 3202(1)) is amended by striking
``$20,000,000'' and inserting ``$100,000,000''.
SEC. 405. ENHANCING THE SAFETY AND SOUNDNESS OF INSURED
DEPOSITORY INSTITUTIONS.
(a) Clarification Relating to the Enforceability of
Agreements and Conditions.--The Federal Deposit Insurance Act
(12 U.S.C. 1811 et seq.) is amended by adding at the end the
following new section:
``SEC. 49. ENFORCEMENT OF AGREEMENTS.
``(a) In General.--Notwithstanding clause (i) or (ii) of
section 8(b)(6)(A) or section 38(e)(2)(E)(i), an appropriate
Federal banking agency may enforce, under section 8, the
terms of--
``(1) any condition imposed in writing by the agency on a
depository institution or an institution-affiliated party
(including a bank holding company) in connection with any
action on any application, notice, or other request
concerning a depository institution; or
``(2) any written agreement entered into between the agency
and an institution-affiliated party (including a bank holding
company).
``(b) Receiverships and Conservatorships.--After the
appointment of the Corporation as the receiver or conservator
for any insured depository institution, the Corporation may
enforce any condition or agreement described in paragraph (1)
or (2) of subsection (a) involving such institution or any
institution-affiliated party (including a bank holding
company), through an action brought in an appropriate United
States district court.''.
(b) Protection of Capital of Insured Depository
Institutions.--Paragraph (1) of section 18(u) of the Federal
Deposit Insurance Act (12 U.S.C. 1828(u)) is amended by
striking subparagraph (B) and by redesignating subparagraph
(C) as subparagraph (B).
SEC. 406. INVESTMENTS BY INSURED SAVINGS ASSOCIATIONS IN BANK
SERVICE COMPANIES AUTHORIZED.
(a) In General.--Sections 2 and 3 of the Bank Service
Company Act (12 U.S.C. 1862, 1863) are each amended by
striking ``insured bank'' each place such term appears and
inserting ``insured depository institution''.
(b) Technical and Conforming Amendments.--
(1) Section 1(b)(4) of the Bank Service Company Act (12
U.S.C. 1861(b)(4)) is amended--
(A) by inserting ``, except when such term appears in
connection with the term `insured depository institution',''
after ``means''; and
(B) by striking ``Federal Home Loan Bank Board'' and
inserting ``Director of the Office of Thrift Supervision''.
(2) Section 1(b) of the Bank Service Company Act (12 U.S.C.
1861(b)) is amended--
(A) by striking paragraph (5) and inserting the following
new paragraph:
``(5) Insured depository institution.--The term `insured
depository institution' has the meaning given the term in
section 3(c) of the Federal Deposit Insurance Act;'';
(B) by striking ``and'' at the end of paragraph (7);
(C) by striking the period at the end of paragraph (8) and
inserting ``; and''; and
(D) by adding at the end the following new paragraph:
``(9) the terms `State depository institution', `Federal
depository institution', `State savings association' and
`Federal savings association' have the meanings given the
terms in section 3 of the Federal Deposit Insurance Act.''.
(3) The 1st sentence of section 5(c)(4)(B) of the Home
Owners' Loan Act (12 U.S.C. 1464(c)(4)(B)) is amended by
striking ``by savings associations of such State and by
Federal associations'' and inserting ``by State and Federal
depository institutions''.
(4) Subparagraph (A)(ii) and subparagraph (B)(ii) of
section 1(b)(2) of the Bank Service Company Act (12 U.S.C.
1861(b)(2)) are each amended by striking ``insured banks''
and inserting ``insured depository institutions''.
(5) Section 1(b)(8) of the Bank Service Company Act (12
U.S.C. 1861(b)(8)) is further amended--
(A) by striking ``insured bank'' and inserting ``insured
depository institution'';
(B) by striking ``insured banks'' each place such term
appears and inserting ``insured depository institutions'';
and
(C) by striking ``the bank's'' and inserting ``the
depository institution's''.
(6) Section 2 of the Bank Service Company Act (12 U.S.C.
1862) is amended by inserting ``or savings associations,
other than the limitation on the amount of investment by a
Federal savings association contained in section 5(c)(4)(B)
of the Home Owners' Loan Act'' after ``relating to banks''.
(7) Section 4(b) of the Bank Service Company Act (12 U.S.C.
1864(b)) is amended by inserting ``as permissible under
subsection (c), (d), or (e) or'' after ``Except''.
(8) Section 4(c) of the Bank Service Company Act (12 U.S.C.
1864(c)) is amended by inserting ``or State savings
association'' after ``State bank'' each place such term
appears.
(9) Section 4(d) of the Bank Service Company Act (12 U.S.C.
1864(d)) is amended by inserting ``or Federal savings
association'' after ``national bank'' each place such term
appears.
(10) Section 4(e) of the Bank Service Company Act (12
U.S.C. 1864(e)) is amended to read as follows:
``(e) A bank service company may perform--
``(1) only those services that each depository institution
shareholder or member is otherwise authorized to perform
under any applicable Federal or State law; and
``(2) such services only at locations in a State in which
each such shareholder or member is authorized to perform such
services.''.
(11) Section 4(f) of the Bank Service Company Act (12
U.S.C. 1864(f)) is amended by inserting ``or savings
associations'' after ``location of banks''.
(12) Section 5 of the Bank Service Company Act (12 U.S.C.
1865) is amended--
(A) in subsection (a)--
(i) by striking ``insured bank'' and inserting ``insured
depository institution''; and
(ii) by striking ``bank's'' and inserting
``institution's'';
(B) in subsection (b)--
(i) by striking ``insured bank'' and inserting ``insured
depository institution'';
(ii) by inserting ``authorized only'' after ``performs any
service''; and
(iii) by inserting ``authorized only'' after ``perform any
activity''; and
(C) in subsection (c)--
(i) by striking ``the bank or banks'' and inserting ``any
depository institution''; and
(ii) by striking ``capability of the bank'' and inserting
``capability of the depository institution''.
(13) Section 7 of the Bank Service Company Act (12 U.S.C.
1867) is amended--
(A) in subsection (b), by striking ``insured bank'' and
inserting ``insured depository institution''; and
(B) in subsection (c)--
(i) by striking ``a bank'' each place such term appears and
inserting ``a depository institution''; and
(ii) by striking ``the bank'' each place such term appears
and inserting ``the depository institution''.
SEC. 407. CROSS GUARANTEE AUTHORITY.
Subparagraph (A) of section 5(e)(9) of the Federal Deposit
Insurance Act (12 U.S.C. 1815(e)(9)(A)) is amended to read as
follows:
``(A) such institutions are controlled by the same company;
or''.
SEC. 408. GOLDEN PARACHUTE AUTHORITY AND NONBANK HOLDING
COMPANIES.
Subsection (k) of section 18 of the Federal Deposit
Insurance Act (12 U.S.C. 1828(k)) is amended--
(1) in paragraph (2)(A), by striking ``or depository
institution holding company'' and inserting ``or covered
company'';
(2) by striking subparagraph (B) of paragraph (2) and
inserting the following new subparagraph:
``(B) Whether there is a reasonable basis to believe that
the institution-affiliated party is substantially responsible
for--
``(i) the insolvency of the depository institution or
covered company;
``(ii) the appointment of a conservator or receiver for the
depository institution; or
``(iii) the depository institution's troubled condition (as
defined in the regulations prescribed pursuant to section
32(f)).'';
[[Page H711]]
(3) in paragraph (2)(F), by striking ``depository
institution holding company'' and inserting ``covered
company,'';
(4) in paragraph (3) in the matter preceding subparagraph
(A), by striking ``depository institution holding company''
and inserting ``covered company'';
(5) in paragraph (3)(A), by striking ``holding company''
and inserting ``covered company'';
(6) in paragraph (4)(A)--
(A) by striking ``depository institution holding company''
each place such term appears and inserting ``covered
company''; and
(B) by striking ``holding company'' each place such term
appears (other than in connection with the term referred to
in subparagraph (A)) and inserting ``covered company'';
(7) in paragraph (5)(A), by striking ``depository
institution holding company'' and inserting ``covered
company'';
(8) in paragraph (5), by adding at the end the following
new subparagraph:
``(D) Covered company.--The term `covered company' means
any depository institution holding company (including any
company required to file a report under section 4(f)(6) of
the Bank Holding Company Act of 1956), or any other company
that controls an insured depository institution.''; and
(9) in paragraph (6)--
(A) by striking ``depository institution holding company''
and inserting ``covered company,''; and
(B) by striking ``or holding company'' and inserting ``or
covered company''.
SEC. 409. AMENDMENTS RELATING TO CHANGE IN BANK CONTROL.
Section 7(j) of the Federal Deposit Insurance Act (12
U.S.C. 1817(j)) is amended--
(1) in paragraph (1)(D)--
(A) by striking ``is needed to investigate'' and inserting
``is needed--
``(i) to investigate'';
(B) by striking ``United States Code.'' and inserting
``United States Code; or''; and
(C) by adding at the end the following new clause:
``(ii) to analyze the safety and soundness of any plans or
proposals described in paragraph (6)(E) or the future
prospects of the institution.''; and
(2) in paragraph (7)(C), by striking ``the financial
condition of any acquiring person'' and inserting ``either
the financial condition of any acquiring person or the future
prospects of the institution''.
SEC. 410. COMMUNITY REINVESTMENT CREDIT FOR ESOPS AND EWOCS.
Section 804 of the Community Reinvestment Act of 1977 (12
U.S.C. 2903) is amended by adding at the end the following
new subsection--
``(d) Establishment of Esops and Ewocs.--
``(1) In general.--In assessing and taking into account,
under subsection (a), the record of a financial institution,
the appropriate Federal financial supervisory agency shall
consider as a factor activities that support or enable the
establishment of employee stock ownership plans or eligible
worker-owned cooperatives, so long as the employer sponsoring
the plan or cooperative is at least 51 percent owned by
employees, including low to moderate income employees.
``(2) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Employee stock ownership plan.--The term `employee
stock ownership plan' has the same meaning as in section
4975(e)(7) of the Internal Revenue Code of 1986.
``(B) Eligible worker-owned cooperative.--The term
`eligible worker-owned cooperative' has the same meaning as
in section 1042(c)(2) of the Internal Revenue Code of
1986.''.
SEC. 411. MINORITY FINANCIAL INSTITUTIONS.
(a) In General.--The Federal Deposit Insurance Corporation
and the Office of Thrift Supervision shall provide such
technical assistance to minority financial institutions
affected by Hurricane Katrina, Hurricane Rita, and Hurricane
Wilma as may be appropriate to preserve the present number of
minority depository institutions and preserve the minority
character in cases involving mergers or acquisitions of a
minority depository institution consistent with section
308(a) of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
(b) Minority Financial Institution Defined.--For purposes
of this subsection, the term ``minority financial
institution'' has the same meaning as in section 308(b) of
the Financial Institutions Reform, Recovery, and Enforcement
Act of 1989.
TITLE V--DEPOSITORY INSTITUTION AFFILIATES PROVISIONS
SEC. 501. CLARIFICATION OF CROSS MARKETING PROVISION.
Section 4(n)(5) of the Bank Holding Company Act of 1956 (12
U.S.C. 1843(n)(5)) is amended--
(1) in subparagraph (B), by striking ``subsection
(k)(4)(I)'' and inserting ``subparagraph (H) or (I) of
subsection (k)(4)''; and
(2) by adding at the end the following new subparagraph:
``(C) Threshold of control.--Subparagraph (A) shall not
apply with respect to a company described or referred to in
clause (i) or (ii) of such subparagraph if the financial
holding company does not own or control 25 percent or more of
the total equity or any class of voting securities of such
company.''.
SEC. 502. AMENDMENT TO PROVIDE THE FEDERAL RESERVE BOARD WITH
DISCRETION CONCERNING THE IMPUTATION OF CONTROL
OF SHARES OF A COMPANY BY TRUSTEES.
Section 2(g)(2) of the Bank Holding Company Act of 1956 (12
U.S.C. 1841(g)(2)) is amended by inserting ``, unless the
Board determines that such treatment is not appropriate in
light of the facts and circumstances of the case and the
purposes of this Act'' before the period at the end.
SEC. 503. ELIMINATING GEOGRAPHIC LIMITS ON THRIFT SERVICE
COMPANIES.
(a) In General.--The 1st sentence of section 5(c)(4)(B) of
the Home Owners' Loan Act (12 U.S.C. 1464(c)(4)(B)) (as
amended by section 406(b)(3) of this Act) is amended--
(1) by striking ``corporation organized'' and all that
follows through ``is available for purchase'' and inserting
``company, if the entire capital of the company is available
for purchase''; and
(2) by striking ``having their home offices in such
State''.
(b) Technical Corrections.--
(1) The heading for subparagraph (B) of section 5(c)(4) of
the Home Owners' Loan Act (12 U.S.C. 1464(c)(4)(B)) is
amended by striking ``corporations'' and inserting
``companies''.
(2) The 2nd sentence of section 5(n)(1) of the Home Owners'
Loan Act (12 U.S.C. 1464(n)(1)) is amended by striking
``service corporations'' and inserting ``service companies''.
(3) Section 5(q)(1) of the Home Owners' Loan Act (12 U.S.C.
1464(q)(1)) is amended by striking ``service corporation''
each place such term appears in subparagraphs (A), (B), and
(C) and inserting ``service company''.
(4) Section 10(m)(4)(C)(iii)(II) of the Home Owners' Loan
Act (12 U.S.C. 1467a(m)(4)(C)(iii)(II)) is amended by
striking ``service corporation'' each place such term appears
and inserting ``service company''.
SEC. 504. CLARIFICATION OF SCOPE OF APPLICABLE RATE
PROVISION.
Section 44(f) of the Federal Deposit Insurance Act (12
U.S.C. 1831u(f)) is amended by adding at the end the
following new paragraphs:
``(3) Other lenders.--In the case of any other lender doing
business in the State described in paragraph (1), the maximum
interest rate or amount of interest, discount points, finance
charges, or other similar charges that may be charged, taken,
received, or reserved from time to time in any loan,
discount, or credit sale made, or upon any note, bill of
exchange, financing transaction, or other evidence of debt
issued to or acquired by any other lender shall be equal to
not more than the greater of the rates described in
subparagraph (A) or (B) of paragraph (1).
``(4) Other lender defined.--For purposes of paragraph (3),
the term `other lender' means any person engaged in the
business of selling or financing the sale of personal
property (and any services incidental to the sale of personal
property) in such State, except that, with regard to any
person or entity described in such paragraph, such term does
not include--
``(A) an insured depository institution; or
``(B) any person or entity engaged in the business of
providing a short-term cash advance to any consumer in
exchange for--
``(i) a consumer's personal check or share draft, in the
amount of the advance plus a fee, where presentment or
negotiation of such check or share draft is deferred by
agreement of the parties until a designated future date; or
``(ii) a consumer authorization to debit the consumer's
transaction account, in the amount of the advance plus a fee,
where such account will be debited on or after a designated
future date.''.
SEC. 505. SAVINGS ASSOCIATIONS ACTING AS AGENTS FOR
AFFILIATED DEPOSITORY INSTITUTIONS.
(a) In General.--Section 18(r) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(r)) is amended--
(1) in paragraph (1)--
(A) by striking ``bank subsidiary'' and inserting
``depository institution subsidiary''; and
(B) by striking ``bank holding company'' and inserting
``depository institution holding company'';
(2) in paragraph (2), by striking ``a bank acting'' and
inserting ``a depository institution acting'';
(3) in paragraphs (3) and (5), by striking ``or (6)'' each
place such term appears in each such paragraph; and
(4) by striking paragraph (6).
(b) Clerical Amendment.--The heading for section 18(r)(2)
of the Federal Deposit Insurance Act (12 U.S.C. 1828(r)) is
amended by striking ``Bank'' and inserting ``Depository
institution''.
SEC. 506. CREDIT CARD BANK INVESTMENTS FOR THE PUBLIC
WELFARE.
Section 2(c)(2)(F) of the Bank Holding Company Act of 1956
(12 U.S.C. 1841(c)(2)(F)) is amended--
(1) in clause (i), by striking ``engages only in credit
card operations;'' and inserting ``engages only in--
``(I) credit card operations; and
``(II) making investments designed primarily to promote the
public welfare, including the welfare of low- and moderate-
income communities or families (such as by providing housing,
services, or jobs), in the manner and to the extent permitted
for national banks under the paragraph designated the
`Eleventh' of section 5136 of the Revised Statutes of the
United States and regulations prescribed under such
paragraph, except that the last sentence of such paragraph
shall be applied for purposes of this subclause by
substituting `5 percent' for `15 percent' each place such
term appears; ''; and
(2) in clause (v), by inserting ``, other than making or
purchasing loans for the purposes described in and to the
extent permitted in clause (i)(II))'' before the period at
the end.
TITLE VI--BANKING AGENCY PROVISIONS
SEC. 601. WAIVER OF EXAMINATION SCHEDULE IN ORDER TO ALLOCATE
EXAMINER RESOURCES.
Section 10(d) of the Federal Deposit Insurance Act (12
U.S.C. 1820(d)) is amended--
(1) by redesignating paragraphs (5), (6), (7), (8), (9),
and (10) as paragraphs (6), (7), (8), (9), (10), and (11),
respectively;
[[Page H712]]
(2) by inserting after paragraph (4), the following new
paragraph:
``(5) Waiver of schedule when necessary to achieve safe and
sound allocation of examiner resources.--Notwithstanding
paragraphs (1), (2), (3), and (4), an appropriate Federal
banking agency may make adjustments in the examination cycle
for an insured depository institution if necessary to
allocate available resources of examiners in a manner that
provides for the safety and soundness of, and the effective
examination and supervision of, insured depository
institutions.''; and
(3) in paragraphs (8) and (9), as so redesignated, by
striking ``paragraph (6)'' and inserting ``paragraph (7)''.
SEC. 602. INTERAGENCY DATA SHARING.
(a) Federal Banking Agencies.--Section 7(a)(2) of the
Federal Deposit Insurance Act (12 U.S.C. 1817(a)(2)) is
amended by adding at the end the following new subparagraph:
``(C) Data sharing with other agencies and persons.--In
addition to reports of examination, reports of condition, and
other reports required to be regularly provided to the
Corporation (with respect to all insured depository
institutions, including a depository institution for which
the Corporation has been appointed conservator or receiver)
or an appropriate State bank supervisor (with respect to a
State depository institution) under subparagraph (A) or (B),
a Federal banking agency may, in the agency's discretion,
furnish any report of examination or other confidential
supervisory information concerning any depository institution
or other entity examined by such agency under authority of
any Federal law, to--
``(i) any other Federal or State agency or authority with
supervisory or regulatory authority over the depository
institution or other entity;
``(ii) any officer, director, or receiver of such
depository institution or entity; and
``(iii) any other person the Federal banking agency
determines to be appropriate.''.
(b) National Credit Union Administration.--Section 202(a)
of the Federal Credit Union Act (12 U.S.C. 1782(a)) is
amended by adding at the end the following new paragraph:
``(8) Data sharing with other agencies and persons.--In
addition to reports of examination, reports of condition, and
other reports required to be regularly provided to the Board
(with respect to all insured credit unions, including a
credit union for which the Corporation has been appointed
conservator or liquidating agent) or an appropriate State
commission, board, or authority having supervision of a
State-chartered credit union, the Board may, in the Board's
discretion, furnish any report of examination or other
confidential supervisory information concerning any credit
union or other entity examined by the Board under authority
of any Federal law, to--
``(A) any other Federal or State agency or authority with
supervisory or regulatory authority over the credit union or
other entity;
``(B) any officer, director, or receiver of such credit
union or entity; and
``(C) any other institution-affiliated party of such credit
union or entity the Board determines to be appropriate.''.
SEC. 603. PENALTY FOR UNAUTHORIZED PARTICIPATION BY CONVICTED
INDIVIDUAL.
Section 19 of the Federal Deposit Insurance Act (12 U.S.C.
1829) is amended by adding at the end the following new
subsection:
``(c) Noninsured Banks.--Subsections (a) and (b) shall
apply to a noninsured national bank and a noninsured State
member bank, and any agency or noninsured branch (as such
terms are defined in section 1(b) of the International
Banking Act of 1978) of a foreign bank as if such bank,
branch, or agency were an insured depository institution,
except such subsections shall be applied for purposes of this
subsection by substituting the agency determined under the
following paragraphs for `Corporation' each place such term
appears in such subsections:
``(1) The Comptroller of the Currency, in the case of a
noninsured national bank or any Federal agency or noninsured
Federal branch of a foreign bank.
``(2) The Board of Governors of the Federal Reserve System,
in the case of a noninsured State member bank or any State
agency or noninsured State branch of a foreign bank.''.
SEC. 604. AMENDMENT PERMITTING THE DESTRUCTION OF OLD RECORDS
OF A DEPOSITORY INSTITUTION BY THE FDIC AFTER
THE APPOINTMENT OF THE FDIC AS RECEIVER.
Section 11(d)(15)(D) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(d)(15)(D)) is amended--
(1) by striking ``Recordkeeping requirement.--After the end
of the 6-year period'' and inserting ``Recordkeeping
requirement.--
``(i) In general.--Except as provided in clause (ii), after
the end of the 6-year period'';
(2) by striking ``to be unnecessary'' and inserting ``are
unnecessary and not relevant to any pending or reasonably
probable future litigation''; and
(3) by adding at the end the following new clause:
``(ii) Old records.--In the case of records of an insured
depository institution which--
``(I) are at least 10 years old, as of the date the
Corporation is appointed as the receiver of such depository
institution; and
``(II) are unnecessary and not relevant to any pending or
reasonably probable future litigation, as provided in clause
(i),
the Corporation may destroy such records in accordance with
clause (i) any time after such appointment is final without
regard to the 6-year period of limitation contained in such
clause.''.
SEC. 605. MODERNIZATION OF RECORDKEEPING REQUIREMENT.
Subsection (f) of section 10 of the Federal Deposit
Insurance Act (12 U.S.C. 1820(f)) is amended to read as
follows:
``(f) Preservation of Agency Records.--
``(1) In general.--A Federal banking agency may cause any
and all records, papers, or documents kept by the agency or
in the possession or custody of the agency to be--
``(A) photographed or microphotographed or otherwise
reproduced upon film; or
``(B) preserved in any electronic medium or format which is
capable of--
``(i) being read or scanned by computer; and
``(ii) being reproduced from such electronic medium or
format by printing or any other form of reproduction of
electronically stored data.
``(2) Treatment as original records.--Any photographs,
microphotographs, or photographic film or copies thereof
described in paragraph (1)(A) or reproduction of
electronically stored data described in paragraph (1)(B)
shall be deemed to be an original record for all purposes,
including introduction in evidence in all State and Federal
courts or administrative agencies and shall be admissible to
prove any act, transaction, occurrence, or event therein
recorded.
``(3) Authority of the federal banking agencies.--Any
photographs, microphotographs, or photographic film or copies
thereof described in paragraph (1)(A) or reproduction of
electronically stored data described in paragraph (1)(B)
shall be preserved in such manner as the Federal banking
agency shall prescribe and the original records, papers, or
documents may be destroyed or otherwise disposed of as the
Federal banking agency may direct.''.
SEC. 606. STREAMLINING REPORTS OF CONDITION.
Section 7(a) of the Federal Deposit Insurance Act (12
U.S.C. 1817(a)) is amended by adding the following new
paragraph:
``(11) Streamlining reports of condition.--
``(A) Review of information and schedules.--Before the end
of the 1-year period beginning on the date of the enactment
of the Financial Services Regulatory Relief Act of 2005 and
before the end of each 5-year period thereafter, each Federal
banking agency shall, in consultation with the other relevant
Federal banking agencies, review the information and
schedules that are required to be filed by an insured
depository institution in a report of condition required
under paragraph (3).
``(B) Reduction or elimination of information found to be
unnecessary.--After completing the review required by
subparagraph (A), a Federal banking agency, in consultation
with the other relevant Federal banking agencies, shall
reduce or eliminate any requirement to file information or
schedules under paragraph (3) (other than information or
schedules that are otherwise required by law) if the agency
determines that the continued collection of such information
or schedules is no longer necessary or appropriate.''.
SEC. 607. EXPANSION OF ELIGIBILITY FOR 18-MONTH EXAMINATION
SCHEDULE FOR COMMUNITY BANKS.
Paragraph (4)(A) of section 10(d) of the Federal Deposit
Insurance Act (12 U.S.C. 1820(d)) is amended by striking
``$250,000,000'' and inserting ``$1,000,000,000''.
SEC. 608. SHORT FORM REPORTS OF CONDITION FOR CERTAIN
COMMUNITY BANKS.
(a) In General.--Section 7(a) of the Federal Deposit
Insurance Act (12 U.S.C. 1817(a)) is amended by inserting
after paragraph (11) (as added by section 606 of this title)
the following new paragraph:
``(12) Short form reports of condition for community
banks.--
``(A) In general.--With respect to reports of condition
required under paragraph (3) for each calendar quarter, an
insured depository institution described in subparagraphs
(A), (B), (C), and (D) of section 10(d)(4) may submit a short
form of any such report of condition in 2 nonsequential
quarters of any calendar year.
``(B) Short form defined.--The term `short form', when used
in connection with any report of condition required under
paragraph (3), means a report of condition in a format
established by the appropriate Federal banking agency, after
notice and opportunity for comment, that--
``(i) is significantly and materially less burdensome for
the insured depository institution to prepare than the format
of the report of condition required under paragraph (3); and
``(ii) provides sufficient material information for the
appropriate Federal banking agency to assure the maintenance
of the safe and sound condition of the depository institution
and safe and sound practices.''.
(b) Regulations.--Any regulation required to carry out the
amendment made by subsection (a) shall be published in final
form before the end of the 6-month period beginning on the
date of the enactment of this Act.
SEC. 609. CLARIFICATION OF EXTENT OF SUSPENSION, REMOVAL, AND
PROHIBITION AUTHORITY OF FEDERAL BANKING
AGENCIES IN CASES OF CERTAIN CRIMES BY
INSTITUTION-AFFILIATED PARTIES.
(a) Insured Depository Institutions.--
(1) In general.--Section 8(g)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(g)(1)) is amended--
(A) in subparagraph (A)--
(i) by striking ``is charged in any information,
indictment, or complaint, with the commission of or
participation in'' and inserting ``is the subject of any
information, indictment, or complaint, involving the
commission of or participation in'';
(ii) by striking ``may pose a threat to the interests of
the depository institution's depositors or may threaten to
impair public confidence in the depository institution,'' and
insert ``posed, poses, or may pose a threat to the interests
of the depositors of, or threatened, threatens, or may
threaten to impair public confidence in,
[[Page H713]]
any relevant depository institution (as defined in
subparagraph (E)),''; and
(iii) by striking ``affairs of the depository institution''
and inserting ``affairs of any depository institution'';
(B) in subparagraph (B)(i), by striking ``the depository
institution'' and inserting ``any depository institution that
the subject of the notice is affiliated with at the time the
notice is issued'';
(C) in subparagraph (C)(i)--
(i) by striking ``may pose a threat to the interests of the
depository institution's depositors or may threaten to impair
public confidence in the depository institution,'' and insert
``posed, poses, or may pose a threat to the interests of the
depositors of, or threatened, threatens, or may threaten to
impair public confidence in, and relevant depository
institution (as defined in subparagraph (E)),''; and
(ii) by striking ``affairs of the depository institution''
and inserting ``affairs of any depository institution'';
(D) in subparagraph (C)(ii), by striking ``affairs of the
depository institution'' and inserting ``affairs of any
depository institution'';
(E) in subparagraph (D)(i), by striking ``the depository
institution'' and inserting ``any depository institution that
the subject of the order is affiliated with at the time the
order is issued''; and
(F) by adding at the end the following new subparagraph:
``(E) Relevant depository institution.--For purposes of
this subsection, the term `relevant depository institution'
means any depository institution of which the party is or was
an institution-affiliated party at the time--
``(i) the information, indictment or complaint described in
subparagraph (A) was issued; or
``(ii) the notice is issued under subparagraph (A) or the
order is issued under subparagraph (C)(i).''.
(2) Clerical amendment.--The heading for section 8(g) of
the Federal Deposit Insurance Act (12 U.S.C. 1818(g)) is
amended to read as follows:
``(g) Suspension, Removal, and Prohibition From
Participation Orders in the Case of Certain Criminal
Offenses.--''.
(b) Insured Credit Unions.--
(1) In general.--Section 206(i)(1) of the Federal Credit
Union Act (12 U.S.C. 1786(i)(1)) is amended--
(A) in subparagraph (A), by striking ``the credit union''
each place such term appears and inserting ``any credit
union'';
(B) in subparagraph (B)(i), by inserting ``of which the
subject of the order is, or most recently was, an
institution-affiliated party'' before the period at the end;
(C) in subparagraph (C)--
(i) by striking ``the credit union'' each place such term
appears and inserting ``any credit union''; and
(ii) by striking ``the credit union's'' and inserting ``any
credit union's'';
(D) in subparagraph (D)(i), by striking ``upon such credit
union'' and inserting ``upon the credit union of which the
subject of the order is, or most recently was, an
institution-affiliated party''; and
(E) by adding at the end the following new subparagraph:
``(E) Continuation of authority.--The Board may issue an
order under this paragraph with respect to an individual who
is an institution-affiliated party at a credit union at the
time of an offense described in subparagraph (A) without
regard to--
``(i) whether such individual is an institution-affiliated
party at any credit union at the time the order is considered
or issued by the Board; or
``(ii) whether the credit union at which the individual was
an institution-affiliated party at the time of the offense
remains in existence at the time the order is considered or
issued by the Board.''.
(2) Clerical amendment.--Section 206(i) of the Federal
Credit Union Act (12 U.S.C. 1786(i)) is amended by striking
``(i)'' at the beginning and inserting the following new
subsection heading:
``(i) Suspension, Removal, and Prohibition From
Participation Orders in the Case of Certain Criminal
Offenses.--''.
SEC. 610. STREAMLINING DEPOSITORY INSTITUTION MERGER
APPLICATION REQUIREMENTS.
(a) In General.--Paragraph (4) of section 18(c) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is amended
to read as follows:
``(4) Reports on competitive factors.--
``(A) Request for report.--In the interests of uniform
standards and subject to subparagraph (B), the responsible
agency shall, before acting on any application for approval
of a merger transaction--
``(i) request a report on the competitive factors involved
from the Attorney General; and
``(ii) provide a copy of the request to the Corporation
(when the Corporation is not the responsible agency).
``(B) Concurrent consideration.--The responsible agency
shall not be required to make a request under subparagraph
(A) before acting on an application for approval of a merger
transaction if--
``(i) the agency finds that it must act immediately in
order to prevent the probable failure of a depository
institution involved in the transaction; or
``(ii) the transaction consists of a merger between an
insured depository institution and 1 or more affiliates of
the depository institution.
``(C) Furnishing of report.--The report requested under
subparagraph (A) shall be furnished by the Attorney General
to the responsible agency--
``(i) not more than 30 calendar days after the date on
which the Attorney General received the request; or
``(ii) not more than 10 calendar days after such date, if
the requesting agency advises the Attorney General that an
emergency exists requiring expeditious action.''.
(b) Technical and Conforming Amendment.--Section 18(c)(6)
of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)(6))
is amended--
(1) in the second sentence by striking ``banks or savings
associations involved'' and inserting the following:
``insured depository institutions involved, or if the
proposed merger transaction is solely between an insured
depository institution and 1 or more of affiliates of the
depository institution,'' and
(2) by striking the penultimate sentence and inserting the
following: ``If the agency has advised the Attorney General
under paragraph (4)(C)(ii) of the existence of an emergency
requiring expeditious action and has requested a report on
the competitive factors within 10 days, the transaction may
not be consummated before the fifth calendar day after the
date of approval by the agency.''.
SEC. 611. INCLUSION OF DIRECTOR OF THE OFFICE OF THRIFT
SUPERVISION IN LIST OF BANKING AGENCIES
REGARDING INSURANCE CUSTOMER PROTECTION
REGULATIONS.
Section 47(g)(2)(B)(i) of the Federal Deposit Insurance Act
(12 U.S.C. 1831x(g)(2)(B)(i)) is amended by inserting ``the
Director of the Office of Thrift Supervision,'' after
``Comptroller of the Currency,''.
SEC. 612. PROTECTION OF CONFIDENTIAL INFORMATION RECEIVED BY
FEDERAL BANKING REGULATORS FROM FOREIGN BANKING
SUPERVISORS.
Section 15 of the International Banking Act of 1978 (12
U.S.C. 3109) is amended by adding at the end the following
new subsection:
``(c) Confidential Information Received From Foreign
Supervisors.--
``(1) In general.--Except as provided in paragraph (3), a
Federal banking agency shall not be compelled to disclose
information received from a foreign regulatory or supervisory
authority if--
``(A) the Federal banking agency determines that the
foreign regulatory or supervisory authority has, in good
faith, determined and represented to such Federal banking
agency that public disclosure of the information would
violate the laws applicable to that foreign regulatory or
supervisory authority; and
``(B) the relevant Federal banking agency obtained such
information pursuant to--
``(i) such procedures as the Federal banking agency may
establish for use in connection with the administration and
enforcement of Federal banking laws; or
``(ii) a memorandum of understanding or other similar
arrangement between the Federal banking agency and the
foreign regulatory or supervisory authority.
``(2) Treatment under title 5, united states code.--For
purposes of section 552 of title 5, United States Code, this
subsection shall be treated as a statute described in
subsection (b)(3)(B) of such section.
``(3) Savings provision.--No provision of this section
shall be construed as--
``(A) authorizing any Federal banking agency to withhold
any information from any duly authorized committee of the
House of Representatives or the Senate; or
``(B) preventing any Federal banking agency from complying
with an order of a court of the United States in an action
commenced by the United States or such agency.
``(4) Federal banking agency defined.--For purposes of this
subsection, the term `Federal banking agency' means the
Board, the Comptroller, the Federal Deposit Insurance
Corporation, and the Director of the Office of Thrift
Supervision.''.
SEC. 613. PROHIBITION ON PARTICIPATION BY CONVICTED
INDIVIDUAL.
(a) Extension of Automatic Prohibition.--Section 19 of the
Federal Deposit Insurance Act (12 U.S.C. 1829) is amended by
inserting after subsection (c) (as added by section 603 of
this title) the following new subsections:
``(d) Bank Holding Companies.--Subsections (a) and (b)
shall apply to any company (other than a foreign bank) that
is a bank holding company and any organization organized and
operated under section 25A of the Federal Reserve Act or
operating under section 25 of the Federal Reserve Act as if
such bank holding company or organization were an insured
depository institution, except such subsections shall be
applied for purposes of this subsection by substituting
`Board of Governors of the Federal Reserve System' for
`Corporation' each place such term appears in such
subsections.
``(e) Savings and Loan Holding Companies.--Subsections (a)
and (b) shall apply to any savings and loan holding company
and any subsidiary (other than a savings association) of a
savings and loan holding company as if such savings and loan
holding company or subsidiary were an insured depository
institution, except such subsections shall be applied for
purposes of this subsection by substituting `Director of the
Office of Thrift Supervision' for `Corporation' each place
such term appears in such subsections.''.
(b) Enhanced Discretion to Remove Convicted Individuals.--
Section 8(e)(2)(A) of the Federal Deposit Insurance Act (12
U.S.C. 1818(e)(2)(A)) is amended--
(1) by striking ``or'' at the end of clause (ii);
(2) by striking the comma at the end of clause (iii) and
inserting ``; or''; and
(3) by adding at the end the following new clause:
``(iv) an institution-affiliated party of a subsidiary
(other than a bank) of a bank holding company has been
convicted of any criminal offense involving dishonesty or
a breach of trust, or has agreed to enter into a pretrial
diversion or similar program in connection with a
prosecution for such an offense,''.
[[Page H714]]
SEC. 614. CLARIFICATION THAT NOTICE AFTER SEPARATION FROM
SERVICE MAY BE MADE BY AN ORDER.
(a) In General.--Section 8(i)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(i)(3)) is amended by inserting
``or order'' after ``notice'' each place such term appears.
(b) Technical and Conforming Amendment.--The heading for
section 8(i)(3) of the Federal Deposit Insurance Act (12
U.S.C. 1818(i)(3)) is amended by inserting ``or Order'' after
``Notice''.
SEC. 615. ENFORCEMENT AGAINST MISREPRESENTATIONS REGARDING
FDIC DEPOSIT INSURANCE COVERAGE.
(a) In General.--Section 18(a) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(a)) is amended by adding at the
end the following new paragraph:
``(4) False advertising, misuse of fdic names, and
misrepresentation to indicate insured status.--
``(A) Prohibition on false advertising and misuse of fdic
names.--No person may--
``(i) use the terms `Federal Deposit', `Federal Deposit
Insurance', `Federal Deposit Insurance Corporation', any
combination of such terms, or the abbreviation `FDIC' as part
of the business name or firm name of any person, including
any corporation, partnership, business trust, association, or
other business entity; or
``(ii) use such terms or any other sign or symbol as part
of an advertisement, solicitation, or other document,
to represent, suggest or imply that any deposit liability,
obligation, certificate or share is insured or guaranteed by
the Federal Deposit Insurance Corporation, if such deposit
liability, obligation, certificate, or share is not insured
or guaranteed by the Corporation.
``(B) Prohibition on misrepresentations of insured
status.--No person may knowingly misrepresent--
``(i) that any deposit liability, obligation, certificate,
or share is federally insured, if such deposit liability,
obligation, certificate, or share is not insured by the
Corporation; or
``(ii) the extent to which or the manner in which any
deposit liability, obligation, certificate, or share is
insured by the Federal Deposit Insurance Corporation, if such
deposit liability, obligation, certificate, or share is not
insured by the Corporation to the extent or in the manner
represented.
``(C) Authority of fdic.--The Corporation shall have--
``(i) jurisdiction over any person that violates this
paragraph, or aids or abets the violation of this paragraph;
and
``(ii) for purposes of enforcing the requirements of this
paragraph with regard to any person--
``(I) the authority of the Corporation under section 10(c)
to conduct investigations; and
``(II) the enforcement authority of the Corporation under
subsections (b), (c), (d) and (i) of section 8,
as if such person were a state nonmember insured bank.
``(D) Other actions preserved.--No provision of this
paragraph shall be construed as barring any action otherwise
available, under the laws of the United States or any State,
to any Federal or State law enforcement agency or
individual.''.
(b) Enforcement Orders.--Section 8(c) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(c)) is amended by
adding at the end the following new paragraph:
``(4) False advertising or misuse of names to indicate
insured status.--
``(A) Temporary order.--
``(i) In general.--If a notice of charges served under
subsection (b)(1) of this section specifies on the basis of
particular facts that any person is engaged in conduct
described in section 18(a)(4), the Corporation may issue a
temporary order requiring--
``(I) the immediate cessation of any activity or practice
described, which gave rise to the notice of charges; and
``(II) affirmative action to prevent any further, or to
remedy any existing, violation.
``(ii) Effect of order.--Any temporary order issued under
this subparagraph shall take effect upon service.
``(B) Effective period of temporary order.--A temporary
order issued under subparagraph (A) shall remain effective
and enforceable, pending the completion of an administrative
proceeding pursuant to subsection (b)(1) in connection with
the notice of charges--
``(i) until such time as the Corporation shall dismiss the
charges specified in such notice; or
``(ii) if a cease-and-desist order is issued against such
person, until the effective date of such order.
``(C) Civil money penalties.--Violations of section
18(a)(4) shall be subject to civil money penalties as set
forth in subsection (i) in an amount not to exceed $1,000,000
for each day during which the violation occurs or
continues.''.
(c) Technical and Conforming Amendments.--
(1) Section 18(a)(3) of the Federal Deposit Insurance Act
(12 U.S.C. 1828(a)) is amended--
(A) in the 1st sentence by striking ``of this subsection''
and inserting ``of paragraphs (1) and (2)'';
(B) by striking the 2nd sentence; and
(C) in the 3rd sentence, by striking ``of this subsection''
and inserting ``of paragraphs (1) and (2)''.
(2) The heading for subsection (a) of section 18 of the
Federal Deposit Insurance Act (12 U.S.C. 1828(a)) is amended
by striking ``Insurance Logo.--'' and inserting
``Representations of Deposit Insurance.--''.
SEC. 616. CHANGES REQUIRED TO SMALL BANK HOLDING COMPANY
POLICY STATEMENT ON ASSESSMENT OF FINANCIAL AND
MANAGERIAL FACTORS.
(a) Small Bank Holding Company Policy Statement on
Assessment of Financial and Managerial Factors.--
(1) In general.--Before the end of the 6-month period
beginning on the date of the enactment of this Act, the Board
of Governors of the Federal Reserve System shall publish in
the Federal Register proposed revisions to the Small Bank
Holding Company Policy Statement on Assessment of Financial
and Managerial Factors (12 C.F.R. part 225--appendix C) that
provide that the policy shall apply to a bank holding company
which has pro forma consolidated assets of less than
$1,000,000,000 and that--
(A) is not engaged in any nonbanking activities involving
significant leverage; and
(B) does not have a significant amount of outstanding debt
that is held by the general public.
(2) Adjustment of amount.--The Board of Governors of the
Federal Reserve System shall annually adjust the dollar
amount referred to in paragraph (1) in the Small Bank Holding
Company Policy Statement on Assessment of Financial and
Managerial Factors by an amount equal to the percentage
increase, for the most recent year, in total assets held by
all insured depository institutions, as determined by the
Board.
(b) Increase in Debt-to-equity Ratio of Small Bank Holding
Company.--Before the end of the 6-month period beginning on
the date of the enactment of this Act, the Board of Governors
of the Federal Reserve System shall publish in the Federal
Register proposed revisions to the Small Bank Holding Company
Policy Statement on Assessment of Financial and Managerial
Factors (12 C.F.R. part 225--appendix C) such that the debt-
to-equity ratio allowable for a small bank holding company in
order to remain eligible to pay a corporate dividend and to
remain eligible for expedited processing procedures under
Regulation Y of the Board of Governors of the Federal Reserve
System would increase from 1:1 to 3:1.
SEC. 617. EXCEPTION TO ANNUAL PRIVACY NOTICE REQUIREMENT
UNDER THE GRAMM-LEACH-BLILEY ACT.
Section 503 of the Gramm-Leach-Bliley Act (15 U.S.C. 6803)
is amended by adding the following new subsections:
``(c) Exception to Annual Notice Requirement.--A financial
institution that--
``(1) provides nonpublic personal information only in
accordance with the provisions of subsection (b)(2) or (e) of
section 502 or regulations prescribed under section 504(b);
``(2) does not share information with affiliates under
section 603(d)(2)(A) of the Fair Credit Reporting Act; and
``(3) has not changed its policies and practices with
regard to disclosing nonpublic personal information from the
policies and practices that were disclosed in the most recent
disclosure sent to consumers in accordance with this
subsection,
shall not be required to provide an annual disclosure under
this subsection until such time as the financial institution
fails to comply with any criteria described in paragraph (1),
(2), or (3).
``(d) Exception to Notice Requirement.--A financial
institution shall not be required to provide any disclosure
under this section if--
``(1) the financial institution is licensed by a State and
is subject to existing regulation of consumer confidentiality
that prohibits disclosure of nonpublic personal information
without knowing and expressed consent of the consumer in the
form of laws, rules, or regulation of professional conduct or
ethics promulgated either by the court of highest appellate
authority or by the principal legislative body or regulatory
agency or body of any State of the United States, the
District of Columbia, any territory of the United States,
Puerto Rico, Guam, American Samoa, the Trust Territory of the
Pacific Islands, the Virgin Islands, or the Northern Mariana
Islands; or
``(2) the financial institution is licensed by a State and
becomes subject to future regulation of consumer
confidentiality that prohibits disclosure of nonpublic
personal information without knowing and expressed consent of
the consumer in the form of laws, rules, or regulation of
professional conduct or ethics promulgated either by the
court of highest appellate authority or by the principal
legislative body or regulatory agency or body of any State of
the United States, the District of Columbia, any territory of
the United States, Puerto Rico, Guam, American Samoa, the
Trust Territory of the Pacific Islands, the Virgin Islands,
or the Northern Mariana Islands.''.
SEC. 618. BIENNIAL REPORTS ON THE STATUS OF AGENCY EMPLOYMENT
OF MINORITIES AND WOMEN.
(a) In General.--Before December 31, 2005, and the end of
each 2-year period beginning after such date, each Federal
banking agency shall submit a report to the Congress on the
status of the employment by the agency of minority
individuals and women.
(b) Factors to Be Included.--The report shall include a
detailed assessment of each of the following:
(1) The extent of hiring of minority individuals and women
by the agency as of the time the report is prepared.
(2) The successes achieved and challenges faced by the
agency in operating minority and women outreach programs.
(3) Challenges the agency may face in finding qualified
minority individual and women applicants.
(4) Such other information, findings, and conclusions, and
recommendations for legislative or agency action, as the
agency may determine to be appropriate to include in the
report.
(c) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) Federal banking agency.--The term ``Federal banking
agency''--
[[Page H715]]
(A) has the same meaning as in section 3(z) of the Federal
Deposit Insurance Act; and
(B) includes the National Credit Union Administration.
(2) Minority.--The term ``minority'' has the same meaning
as in section 1204(c)(3) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989.
SEC. 619. COORDINATION OF STATE EXAMINATION AUTHORITY.
Section 10(h) of the Federal Deposit Insurance Act (12
U.S.C. 1820(h)) is amended to read as follows:
``(h) Coordination of Examination Authority.--
``(1) State bank supervisors of home and host states.--
``(A) Home state of bank.--The appropriate State bank
supervisor of the home State of an insured State bank has
authority to examine and supervise the bank.
``(B) Host state branches.--The State bank supervisor of
the home State of an insured State bank and any State bank
supervisor of an appropriate host State shall exercise their
respective authority to supervise and examine the branches of
the bank in a host State in accordance with the terms of any
applicable cooperative agreement between the home State bank
supervisor and the State bank supervisor of the relevant host
State.
``(C) Supervisory fees.--Except as expressly provided in a
cooperative agreement between the State bank supervisors of
the home State and any host State of an insured State bank,
only the State bank supervisor of the home State of an
insured State bank may levy or charge State supervisory fees
on the bank.
``(2) Host state examination.--
``(A) In general.--With respect to a branch operated in a
host State by an out-of-State insured State bank that
resulted from an interstate merger transaction approved under
section 44 or that was established in such State pursuant to
section 5155(g) of the Revised Statutes, the third
undesignated paragraph of section 9 of the Federal Reserve
Act or section 18(d)(4) of this Act, the appropriate State
bank supervisor of such host State may--
``(i) with written notice to the State bank supervisor of
the bank's home State and subject to the terms of any
applicable cooperative agreement with the State bank
supervisor of such home State, examine such branch for the
purpose of determining compliance with host State laws that
are applicable pursuant to section 24(j) of this Act,
including those that govern community reinvestment, fair
lending, and consumer protection; and
``(ii) if expressly permitted under and subject to the
terms of a cooperative agreement with the State bank
supervisor of the bank's home State or if such out-of-State
insured State bank has been determined to be in a troubled
condition by either the State bank supervisor of the bank's
home State or the bank's appropriate Federal banking agency,
participate in the examination of the bank by the State bank
supervisor of the bank's home State to ascertain that the
activities of the branch in such host State are not conducted
in an unsafe or unsound manner.
``(B) Notice of determination.--
``(i) In general.--The State bank supervisor of the home
State of an insured State bank should notify the State bank
supervisor of each host State of the bank if there has been a
final determination that the bank is in a troubled condition.
``(ii) Timing of notice.--The State bank supervisor of the
home State of an insured State bank should provide notice
under clause (i) as soon as reasonably possible but in all
cases within 15 business days after the State bank supervisor
has made such final determination or has received written
notification of such final determination.
``(3) Host state enforcement.--If the State bank supervisor
of a host State determines that a branch of an out-of-State
State insured State bank is violating any law of the host
State that is applicable to such branch pursuant to section
24(j) of this Act, including a law that governs community
reinvestment, fair lending, or consumer protection, the State
bank supervisor of the host State or, to the extent
authorized by the law of the host State, a host State law
enforcement officer may, with written notice to the State
bank supervisor of the bank's home State and subject to the
terms of any applicable cooperative agreement with the State
bank supervisor of the bank's home State, undertake such
enforcement actions and proceedings as would be permitted
under the law of the host State as if the branch were a bank
chartered by that host State.
``(4) Cooperative agreement.--
``(A) In general.--The State bank supervisors from 2 or
more States may enter into cooperative agreements to
facilitate State regulatory supervision of State banks,
including cooperative agreements relating to the coordination
of examinations and joint participation in examinations. For
purposes of this subsection (h), the term `cooperative
agreement' means a written agreement that is signed by the
home State bank supervisor and host State bank supervisor to
facilitate State regulatory supervision of State banks and
includes nationwide or multi-state cooperative agreements and
cooperative agreements solely between the home State and host
State.
``(B) Rule of construction.--Except for State bank
supervisors, no provision of this subsection relating to such
cooperative agreements shall be construed as limiting in any
way the authority of home and host State law enforcement
officers, regulatory supervisors, or other officials that
have not signed such cooperative agreements to enforce host
State laws that are applicable to a branch of an out-of-State
insured State bank located in the host State pursuant to
section 24(j) of this Act.
``(5) Federal regulatory authority.--No provision of this
subsection shall be construed as limiting in any way the
authority of any Federal banking agency.
``(6) State taxation authority not affected.--No provision
of this subsection (h) shall be construed as affecting the
authority of any State or political subdivision of any State
to adopt, apply, or administer any tax or method of taxation
to any bank, bank holding company, or foreign bank, or any
affiliate of any bank, bank holding company, or foreign bank,
to the extent such tax or tax method is otherwise permissible
by or under the Constitution of the United States or other
Federal law.
``(7) Definitions.--For purpose of this section, the
following definition shall apply:
``(A) Host state, home state, out-of-state bank.--The terms
`host State', `home State', and `out-of-State bank' have the
same meanings as in section 44(g).
``(B) State supervisory fees.--The term `State supervisory
fees' means assessments, examination fees, branch fees,
license fees, and all other fees that are levied or charged
by a State bank supervisor directly upon an insured State
bank or upon branches of an insured State bank.
``(C) Troubled condition.--Solely for purposes of
subparagraph (2)(B) of this subsection (h), an insured State
bank has been determined to be in `troubled condition' if the
bank--
``(i) has a composite rating, as determined in its most
recent report of examination, of 4 or 5 under the Uniform
Financial Institutions Ratings System (UFIRS); or
``(ii) is subject to a proceeding initiated by the
Corporation for termination or suspension of deposit
insurance; or
``(iii) is subject to a proceeding initiated by the State
bank supervisor of the bank's home State to vacate, revoke,
or terminate the charter of the bank, or to liquidate the
bank, or to appoint a receiver for the bank.
``(D) Final determination.--For the purposes of paragraph
(2)(B), the term `final determination' means the transmittal
of a report of examination to the bank or transmittal of
official notice of proceedings to the bank.''.
SEC. 620. NONWAIVER OF PRIVILEGES.
(a) Insured Depository Institutions.--Section 18 of the
Federal Deposit Insurance Act (12 U.S.C. 1828) is amended by
adding at the end the following new subsection:
``(x) Privileges not Affected by Disclosure to Banking
Agency or Supervisor.--
``(1) In general.--The submission by any person of any
information to any Federal banking agency, State bank
supervisor, or foreign banking authority for any purpose in
the course of any supervisory or regulatory process of such
agency, supervisor, or authority shall not be construed as
waiving, destroying, or otherwise affecting any privilege
such person may claim with respect to such information under
Federal or State law as to any person or entity other than
such agency, supervisor, or authority.
``(2) Rule of construction.--No provision of paragraph (1)
may be construed as implying or establishing that--
``(A) any person waives any privilege applicable to
information that is submitted or transferred under any
circumstance to which paragraph (1) does not apply; or
``(B) any person would waive any privilege applicable to
any information by submitting the information to any Federal
banking agency, State bank supervisor, or foreign banking
authority, but for this subsection.''.
(b) Insured Credit Unions.--Section 205 of the Federal
Credit Union Act (12 U.S.C. 1785) is amended by adding at the
end the following new subsection:
``(j) Privileges not Affected by Disclosure to Banking
Agency or Supervisor.--
``(1) In general.--The submission by any person of any
information to the Administration, any State credit union
supervisor, or foreign banking authority for any purpose in
the course of any supervisory or regulatory process of such
Board, supervisor, or authority shall not be construed as
waiving, destroying, or otherwise affecting any privilege
such person may claim with respect to such information under
Federal or State law as to any person or entity other than
such Board, supervisor, or authority.
``(2) Rule of construction.--No provision of paragraph (1)
may be construed as implying or establishing that--
``(A) any person waives any privilege applicable to
information that is submitted or transferred under any
circumstance to which paragraph (1) does not apply; or
``(B) any person would waive any privilege applicable to
any information by submitting the information to the
Administration, any State credit union supervisor, or foreign
banking authority, but for this subsection.''.
SEC. 621. RIGHT TO FINANCIAL PRIVACY ACT OF 1978 AMENDMENT.
Paragraph (1) of section 1101 of the Right to Financial
Privacy Act of 1978 (12 U.S.C. 3401) is amended by inserting
``(including any lender who advances funds on pledges of
personal property)'' after ``consumer finance institution''.
SEC. 622. DEPUTY DIRECTOR; SUCCESSION AUTHORITY FOR DIRECTOR
OF THE OFFICE OF THRIFT SUPERVISION.
(a) Establishment of Position of Deputy Director.--Section
3(c)(5) of the Home Owners' Loan Act (12 U.S.C. 1462a(c)(5))
is amended to read as follows:
``(5) Deputy director.--
``(A) In general.--The Secretary of the Treasury shall
appoint a Deputy Director and may appoint up to 3 additional
Deputy Directors.
``(B) First deputy director.--If the Secretary of the
Treasury appoints more than 1 Deputy Director of the Office,
the Secretary
[[Page H716]]
shall designate one such appointee as the First Deputy
Director.
``(C) Duties.--Each Deputy Director appointed under this
paragraph shall take an oath of office and perform such
duties as the Director shall direct.
``(D) Compensation and benefits.--The Director shall fix
the compensation and benefits for each Deputy Director in
accordance with this Act.''.
(b) Service of Deputy Director as Acting Director.--Section
3(c)(3) of the Home Owners' Loan Act (12 U.S.C. 1462a(c)(3))
is amended--
(1) by striking ``Vacancy.--A vacancy in the position of
Director'' and inserting ``Vacancy.--
``(A) In general.--A vacancy in the position of Director'';
and
(2) by adding at the end the following new subparagraphs:
``(B) Acting director.--
``(i) In general.--In the event of a vacancy in the
position of Director or during the absence or disability of
the Director, the Deputy Director shall serve as Acting
Director.
``(ii) Succession in case of 2 or more deputy directors.--
If there are 2 or more Deputy Directors serving at the time a
vacancy in the position of Director occurs or the absence or
disability of the Director commences, the First Deputy
Director shall serve as Acting Director under clause (i)
followed by such other Deputy Directors under any order of
succession the Director may establish.
``(iii) Authority of acting director.--Any Deputy Director,
while serving as Acting Director under this subparagraph,
shall be vested with all authority, duties, and privileges of
the Director under this Act and any other provision of
Federal law.''.
SEC. 623. LIMITATION ON SCOPE OF NEW AGENCY GUIDELINES.
(a) In General.--The provisions of the multi-agency
guidance Numbered 2003-1 issued by the Comptroller of the
Currency, the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, and the
Director of the Office of Thrift Supervision that relate to
minimum credit card payments and negative amortization--
(1) shall only apply to new credit card accounts
established by a creditor for a consumer after the date of
the enactment of this Act under an open end consumer credit
plan; and
(2) shall not apply to any outstanding balance on any
credit card account under an open end consumer credit plan as
of such date of enactment.
(b) Definitions.--For purposes of this section, the terms
``credit'', ``credit card'', ``creditor'', ``consumer'' and
``open end credit plan'' have the same meanings as in section
103 of the Truth in Lending Act.
(c) Sunset Provision.--This section shall not apply after
the end of the 3-year period beginning on the date of the
enactment of this Act .
TITLE VII--``BSA'' COMPLIANCE BURDEN REDUCTION
SEC. 701. EXCEPTION FROM CURRENCY TRANSACTION REPORTS FOR
SEASONED CUSTOMERS.
(a) Findings.--The Congress finds as follows:
(1) The completion of and filing of currency transaction
reports under section 5313 of title 31, United States Code,
poses a compliance burden on the financial industry.
(2) Due to the nature of the transactions or the persons
and entities conducting such transactions, certain such
reports as currently filed do not appear to be relevant to
the detection, deterrence, or investigation of financial
crimes, including money laundering and the financing of
terrorism.
(3) However, the data contained in such reports can provide
valuable context for the analysis of other data derived
pursuant to subchapter II of chapter 53 of title 31, United
States Code, as well as investigative data, which provides
invaluable and indispensable information supporting efforts
to combat money laundering and other financial crimes.
(4) An exemption from the reporting requirements for
certain currency transactions that are of little or no value
to ongoing efforts of law enforcement agencies, financial
regulatory agencies, and the financial services industry to
investigate, detect, or deter financial crimes would serve to
balance the burden placed on members of the financial
services industry with the compelling need to produce and
provide meaningful information to policy-makers, financial
regulators, law enforcement, and intelligence agencies.
(5) The Secretary of the Treasury has by regulation, and in
accordance with section 5313 of title 31, United States Code,
implemented a process by which institutions may seek
exemptions from filing certain currency transaction reports
based on appropriate circumstances; however, the existing
exemption process has not adequately balanced the burden on
the financial industry with the Government's need for data to
support its efforts in combating financial crime.
(6) The act of providing notice to the Secretary of the
Treasury of designations of exemption provides meaningful
information to law enforcement officials on exempt customers
and enables law enforcement to obtain account information
through appropriate legal process; the act of providing
notice of designations of exemption complements other
sections of title 31, United States Code, whereby law
enforcement can locate financial institutions with relevant
records relating to a person of investigative interest, such
as information requests made pursuant to regulations
implementing section 314(a) of the USA PATRIOT Act of 2001.
(7) A designation of exemption has no effect on
requirements for depository institutions to apply the full
range of anti-money laundering controls as set forth in
subchapter II of chapter 53 of title 31, United States Code,
including the requirement to apply the customer
identification program pursuant to Section 5326 of subchapter
II of chapter 53 of title 31, United States Code, and the
requirement to identify, monitor, and, if appropriate, report
suspicious activity in accordance with section 5318(g) of
title 31, United States Code.
(8) The Federal banking agencies and the Financial Crimes
Enforcement Network have recently provided guidance through
the Federal Financial Institutions Examination Council Bank
Secrecy Act/Anti-Money Laundering Examination Manual on
applying appropriate levels of due diligence and identifying
suspicious activity by the types of cash-intensive businesses
that generally will be subject to exemption.
(b) Seasoned Customer Exemption.--
(1) In general.--Section 5313(e) of title 31, United States
Code, is amended to read as follows:
``(e) Qualified Customer Exemption.--
``(1) In general.--The Secretary of the Treasury shall
prescribe regulations within 270 days of the enactment of the
Financial Services Regulatory Relief Act of 2005 that exempt
any depository institution from filing a report pursuant to
this section in a transaction for the payment, receipt, or
transfer of United States coins or currency (or other
monetary instruments the Secretary of the Treasury
prescribes) with a qualified customer of the depository
institution.
``(2) Qualified customer defined.--For purposes of this
section, the term `qualified customer', with respect to a
depository institution, has such meaning as the Secretary of
the Treasury shall prescribe, which shall include any person
that--
``(A) is incorporated or organized under the laws of the
United States or any State, including a sole proprietorship,
or is registered as and eligible to do business within the
United States or a State;
``(B) has maintained a deposit account with the depository
institution for at least 12 months; and
``(C) has engaged, using such account, in multiple currency
transactions that are subject to the reporting requirements
of subsection (a).
``(3) Regulations.--
``(A) In general.--The Secretary of the Treasury shall
prescribe regulations requiring a depository institution to
file a 1-time notice of designation of exemption for each
qualified customer of the depository institution.
``(B) Form and content of exemption notice.--The Secretary
shall by regulation prescribe the form, manner, content, and
timing of the qualified customer exemption notice; such
notice shall include information sufficient to identify the
qualified customer and its accounts.
``(C) Authority of secretary.--
``(i) In general.--The Secretary may suspend, reject or
revoke any qualified customer exemption notice, in accordance
with criteria prescribed by the Secretary by regulation.
``(ii) Conditions.--The Secretary may establish conditions,
in accordance with criteria prescribed by regulation, under
which exempt qualified customers of an insured depository
institution that is merged with or acquired by another
insured depository institution will continue to be treated as
designated exempt qualified customers of the surviving or
acquiring institution.''.
(c) 3-Year Review and Report.--Before the end of the 3-year
period beginning on the date of the enactment of this Act,
the Secretary of the Treasury, in consultation with the
Attorney General, the Secretary of the Department of Homeland
Security, the Federal banking agencies, the banking industry,
and such other persons as the Secretary deems appropriate,
shall evaluate the operations and effect of this provision
and make recommendations to Congress as to any legislative
action with respect to this provision as the Secretary may
determine to be appropriate.
SEC. 702. REDUCTION IN INCONSISTENCIES IN MONETARY
TRANSACTION RECORDKEEPING AND REPORTING
ENFORCEMENT AND EXAMINATION REQUIREMENTS.
(a) Sense of the Congress.--It is the sense of the Congress
that inconsistencies and redundancies among regulations
implementing monetary transaction recordkeeping and reporting
enforcement programs under section 8 of the Federal Deposit
Insurance Act, section 206(q) of the Federal Credit Union
Act, and chapter II of chapter 53 of title 31, United States
Code by the Secretary of the Treasury and the Federal banking
agencies--
(1) increase the difficulty depository institutions have in
complying with congressional intent in creating such
enforcement programs,
(2) reduce the transparency and clarity of the regulatory
regime;
(3) increase the potential for conflict among the various
regulations in the future; and
(4) contribute to the perception that various agencies
involved in the enforcement of the monetary transaction
recordkeeping and reporting requirements apply such
requirements inconsistently.
(b) Agency Coordination of Monetary Transaction
Recordkeeping and Reporting Requirements.--
(1) Enforcement programs.--
(A) Federal deposit insurance act.--Section 8(s) of the
Federal Deposit Insurance Act (12 U.S.C. 1818(s)) is amended
by adding at the end the following new paragraph:
``(4) Coordination on uniform requirements.--In prescribing
regulations under paragraph (1), the Federal banking
agencies, acting through the Financial Institutions
Examination Council, shall--
``(A) consult with each other, the National Credit Union
Administration Board, and the Secretary of the Treasury; and
[[Page H717]]
``(B) take such action as may be necessary to ensure that
the requirements for procedures established pursuant to such
regulations, and the examination standards for reviewing such
procedures, are congruent and reasonably uniform (taking into
account differences in the form and function of the
institutions subject to such requirements).''.
(B) Federal credit union act.--Section 206(q) of the
Federal Credit Union Act (12 U.S.C. 1786(q)) is amended by
adding at the end the following new paragraph:
``(4) Coordination on uniform requirements.--In prescribing
regulations under paragraph (1), the Board, acting through
the Financial Institutions Examination Council, shall--
``(A) consult with the Federal banking agencies and the
Secretary of the Treasury; and
``(B) take such action as may be necessary to ensure that
the requirements for procedures established pursuant to such
regulations, and the examination standards for reviewing such
procedures, are congruent and reasonably uniform (taking into
account differences in the form and function of the
institutions subject to such requirements).''.
(2) Examination standards and disputes.--Section 1006 of
the Federal Financial Institutions Examination Council Act of
1978 (12 U.S.C. 3305) is amended by adding at the end the
following new subsection:
``(h) Monetary Transaction Recordkeeping and Reporting
Requirements.--The Council and the Secretary of the Treasury
shall jointly establish--
``(1) uniform standards and principles applicable to the
examination of financial institutions to ensure compliance
with the requirements of subchapter II of chapter 53, United
States Code, sections 8(s) and 21 of the Federal Deposit
Insurance Act, and section 206(q) of the Federal Credit Union
Act; and
``(2) a clear policy statement on appropriate processes for
resolving examiner-institution disagreements concerning the
application of subchapter II of chapter 53, United States
Code, sections 8(s) and 21 of the Federal Deposit Insurance
Act, and section 206(q) of the Federal Credit Union Act to
financial institutions.''.
(3) Effective date.--The Federal banking agencies, the
National Credit Union Administration Board, the Financial
Institutions Examination Council, and the Secretary of the
Treasury shall commence the discussions and consultations
required under the amendments made by this subsection as soon
as practicable after the date of the enactment of this Act.
(c) Review of and Report on Additional Regulatory or
Legislative Changes.--
(1) Review required.--Before the end of the 6-month period
beginning on the date of the enactment of this Act, the
Secretary of the Treasury shall conduct a review of the
potential inconsistencies in, or redundancies among, the
regulations pertaining to the application of the requirements
of subchapter II of chapter 53, United States Code, sections
8(s) and 21 of the Federal Deposit Insurance Act, and section
206(q) of the Federal Credit Union Act to financial
institutions.
(2) Report to congress and the financial institutions
examination council.--Upon completion of the review under
paragraph (1), the Secretary of the Treasury shall promptly
submit a report on the findings and conclusions of the
Secretary with respect to the review to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate, together with such recommendations for legislative
and administrative actions as the Secretary may determine to
be appropriate, and shall transmit a copy of such report to
the members of the Financial Institutions Examination
Council.
(d) Reform of Application of Monetary Transaction
Recordkeeping and Reporting Requirements to Financial
Institutions.--Before the end of the 9-month period beginning
on the date of the submission of the report to Congress under
subsection (c)(2), the Secretary of the Treasury shall
prescribe regulations implementing appropriate changes to
regulations within the jurisdiction of the Secretary to
remedy redundancies or inconsistencies identified in the
review by, and included in the recommendations of, the
Secretary under subsection (c).
SEC. 703. ADDITIONAL REFORMS RELATING TO MONETARY TRANSACTION
AND RECORDKEEPING REQUIREMENTS APPLICABLE TO
FINANCIAL INSTITUTIONS.
(a) Notification of Officers and Directors of Financial
Institutions.--Before the end of the 6-month period beginning
on the date of the enactment of this Act, the Secretary of
the Treasury shall--
(1) review any regulation, guideline, or guidance of the
Secretary, any Federal banking agency, or the National Credit
Union Administration Board that serves as the basis for any
requirement to provide notice to any officer or director of a
depository institution of any suspicious activity report
submitted by the depository institution to the Secretary and
any such agency or Board;
(2) modify or eliminate any such requirement of the
Secretary that the Secretary determines is not necessary to
achieve the purposes of section 5318(g) of title 31, United
States Code; and
(3) make a recommendation to any Federal banking agency or
the National Credit Union Administration Board to modify or
eliminate any such requirement of such agency or Board that
the Secretary determines is not necessary to achieve the
purposes of section 5318(g) of title 31, United States Code.
(b) Elimination of Unnecessary Verification Requirements
Applicable to the Purchase of Financial Instruments.--Before
the end of the 9-month period beginning on the date of the
enactment of this Act, the Secretary of the Treasury shall--
(1) review all verification of customer identity
requirements as they relate to the purchases of monetary
instruments by customers of depository institutions,
including the regulations codified in section 103.29(a)(ii)
of title 31, Code of Federal Regulations; and
(2) modify or eliminate any customer identity requirement
related to the purchases of monetary instruments by customers
of depository institutions codified in section 103.29(a)(ii)
of title 31, Code of Federal Regulations, that the Secretary
determines is unnecessary.
(c) Elimination of Recurring Filings of Suspicious Activity
Reports on a Single Transaction.--Before the end of the 9-
month period beginning on the date of the enactment of this
Act, the Secretary of the Treasury, as appropriate, shall
prescribe regulations, or issue other forms of guidance, that
eliminate the need for depository institutions to file
recurring suspicious activity reports on the same transaction
unless there has been a subsequent change in any pattern of
activity involving any person who was connected with the
transaction.
(d) Electronic Acknowledgement of Certain Electronic
Filings.--Before the end of the 1-year period beginning on
the date of the enactment of this Act, the Director of the
Financial Crimes Enforcement Network shall put into effect a
system for promptly furnishing an electronic acknowledgement
of receipt to any institution that files a form with FinCEN
under subchapter II of chapter 53 of title 31, United States
Code, through the Network's electronic filing system.
SEC. 704. STUDY BY COMPTROLLER GENERAL.
(a) Study Required.--The Comptroller General of the United
States shall conduct a study on methods and practices which
would--
(1) reduce the overall number of currency transaction
reports filed with the Secretary of the Treasury under
section 5313(a) of title 31, United States Code, while
ensuring that the needs of the Secretary, the Financial
Crimes Enforcement Network, law enforcement agencies, and
financial institution regulatory agencies continue to be met;
(2) improve financial institution utilization of the
current exemption provisions; and
(3) mitigate the difficulties in the current implementation
of such exemption provisions that limit the utility of the
exemption process for financial institutions.
(b) Report.--Before the end of the 6-month period beginning
on the date of the enactment of this Act, the Comptroller
General shall submit a report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate on the
findings and conclusions of the Comptroller General with
respect to the study conducted under subsection (a) and such
recommendations for legislative and administrative action as
the Comptroller General may determine to be appropriate.
SEC. 705. FEASIBILITY STUDY REQUIRED.
(a) In General.--For the purpose of simplifying, and
increasing compliance with, the various recordkeeping and
reporting requirements under subchapter II of chapter 53 of
title 31, United States Code, chapter 2 of title I of Public
Law 91-508, and section 21 of the Federal Deposit Insurance
Act, and regulations prescribed under such provisions of law,
the Secretary of the Treasury (hereafter in this section
referred to as the ``Secretary'') shall conduct a study on
the feasibility of developing and implementing interfaces and
templates for use in electronic communications between
financial institutions (as defined in section 5312 of title
31, United States Code) and the Secretary, the Financial
Crimes Enforcement Network, and other Federal financial
institution regulatory agencies.
(b) Factors to Be Considered.--In conducting the study
required under subsection (a), the Secretary shall take into
account--
(1) any procedures required to be maintained by financial
institutions under regulations prescribed pursuant to section
5318(a)(2) of title 31 of the United States Code and the
manner in which the use of interfaces and templates which
might be developed could lessen the burden of complying with
such procedures; and
(2) any exemptions prescribed by the Secretary under
paragraph (5) or (6) of such section 5318(a) and the manner
in which interfaces and templates which might be developed
could be programmed to reflect any such exemption for a
financial institution, transaction, or class of transactions.
(c) Prototype and Report Required.--
(1) In general.--Before the end of the 1-year period
beginning on the date of the enactment of this Act, the
Secretary shall submit a report to the Congress containing a
detailed description of the findings and conclusions of the
Secretary in connection with the study required under
subsection (a), together with such recommendations for
legislative or administrative action as the Secretary may
determine to be appropriate.
(2) Prototype.--Any recommendation on the feasibility of
developing and implementing interfaces and templates for use
in electronic communications shall be accompanied by
prototypes of such interfaces and templates that demonstrate
such feasibility.
(d) Definitions.--For purposes of this section, the
following definitions shall apply:
(1) Interface.--The term ``interface'' means the point and
method of interaction between any 2 or more electronic data
storage and communication systems that permits and
facilitates active electronic communication between or among
the systems, including any procedures, codes, and protocols
that enable the systems to interact.
(2) Template.--The term ``template'' means a preestablished
layout model using word processing or other authoring
software that ensures that data entered into it will adhere
to a consistent format and content scheme when used by
[[Page H718]]
all parties engaged in electronic communications among each
other.
SEC. 706. ANNUAL REPORT BY SECRETARY OF THE TREASURY.
(a) Findings.--The Congress finds as follows:
(1) Financial institutions have too little information
about money laundering and terrorist financing compliance in
other markets.
(2) The current Financial Action Task Force designation
system does not adequately represent the progress countries
are making in combatting money laundering.
(3) Lack of information about the compliance of countries
with anti-money laundering standards exposes United States
financial markets to excessive risk.
(4) Failure to designate countries that fail to make
progress in combatting terrorist financing and money
laundering eliminates incentives for internal reform.
(5) The Secretary of the Treasury has an affirmative duty
to provide to financial institutions and examiners the best
possible information on compliance with anti-money laundering
and terrorist financing initiatives in other markets.
(b) Report.--Not later than March 1 of each year, the
Secretary of the Treasury shall submit to the Congress a
report that identifies the applicable standards of each
country against money laundering and states whether that
country is a country of primary money laundering concern
under section 5318A of title 31, United States Code. The
report shall include--
(1) information on the effectiveness of each country in
meeting its standards against money laundering;
(2) a determination of whether that the efforts of that
country to combat money laundering and terrorist financing
are adequate, improving, or inadequate; and
(3) the efforts made by the Secretary to provide to the
government of each such country of concern technical
assistance to cease the activities that were the basis for
the determination that the country was of primary money
laundering concern.
(c) Dissemination of Information in Report.--The Secretary
of the Treasury shall make available to the Federal Financial
Institutions Examination Council for incorporation into the
examination process, in consultation with Federal banking
agencies, and to financial institutions the information
contained in the report submitted under subsection (a). Such
information shall be made available to financial institutions
without cost.
(d) Definition.--For purposes of this section, the term
``financial institution'' has the meaning given that term in
section 5312(a)(2) of title 31, United States Code.
SEC. 707. PRESERVATION OF MONEY SERVICES BUSINESSES.
(a) Findings.--The Congress finds as follows:
(1) Title III of the USA PATRIOT ACT provided United States
law enforcement agencies with new tools to combat terrorist
financing and money laundering.
(2) The Financial Crimes Enforcement Network in the
Department of the Treasury (hereafter in this section
referred to as ``FinCEN'' ) has defined money services
businesses to include the following 5 distinct types of
financial services providers as well as the United States
Postal Service:
(A) Currency dealers or exchanges.
(B) Check cashing services.
(C) Issuers of travelers' checks, money orders, or stored
value cards.
(D) Sellers or redeemers of travelers' checks, money
orders, or stored value cards.
(E) Money transmitters.
(3) Money services businesses have had more difficulty in
obtaining and maintaining banking services since the passage
of the USA PATRIOT ACT.
(4) On March 30, 2005, FinCEN and the Federal banking
agencies (as defined in section 3 of the Federal Deposit
Insurance Act) issued a joint statement recognizing the
importance of ensuring that money services businesses that
comply with the law have reasonable access to banking
services.
(5) On April 26, 2005, FinCEN offered guidance to money
service businesses on obtaining and maintaining banking
services by identifying and explaining to money services
businesses the types of information and documentation they
are expected to have, and to provide to, depository
institutions when conducting banking business.
(6) At the same time, FinCEN and the Federal banking
agencies have issued joint guidance to depository
institutions to--
(A) clarify the requirements of subchapter II of chapter 53
of title 31, United States Code, and related provisions of
law; and
(B) set forth the minimum steps that depository
institutions should take when providing banking services to
money services businesses.
(7) It is in the interest of the United States and its
allies in the wars against terrorism and drugs to make
certain that the international transfer of funds is done in a
rules-based, formal, and transparent manner and that
individuals are not forced into utilizing informal
underground methods due to a lack of services.
(b) Sense of the Congress.--It is the sense of the Congress
that depository institutions and money services businesses
should follow the guidance offered by FinCEN for the purpose
of giving money services businesses full access to banking
services and ensuring that money services businesses remain
in the mainstream financial system and can be full players in
providing important financial services to their customers and
be fully cooperative in the fight against terrorist financing
and money laundering.
TITLE VIII--CLERICAL AND TECHNICAL AMENDMENTS
SEC. 801. CLERICAL AMENDMENTS TO THE HOME OWNERS' LOAN ACT.
(a) Amendment to Table of Contents.--The table of contents
in section 1 of the Home Owners' Loan Act (12 U.S.C. 1461) is
amended by striking the items relating to sections 5 and 6
and inserting the following new items:
``Sec. 5. Savings associations.
``Sec. 6. [Repealed.].''.
(b) Clerical Amendments to Headings.--
(1) The heading for section 4(a) of the Home Owners' Loan
Act (12 U.S.C. 1463(a)) is amended by striking ``(a) Federal
Savings Associations.--'' and inserting ``(a) General
Responsibilities of the Director.--''.
(2) The section heading for section 5 of the Home Owners'
Loan Act (12 U.S.C. 1464) is amended to read as follows:
``SEC. 5. SAVINGS ASSOCIATIONS.''.
SEC. 802. TECHNICAL CORRECTIONS TO THE FEDERAL CREDIT UNION
ACT.
The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is
amended as follows:
(1) In section 101(3), strike ``and'' after the semicolon.
(2) In section 101(5), strike the terms ``account account''
and ``account accounts'' each place any such term appears and
insert ``account''.
(3) In section 107(a)(5)(E) (as so designated by section
303 of this Act), strike the period at the end and insert a
semicolon.
(4) In paragraphs (6) and (7) of section 107(a) (as so
designated by section 303 of this Act), strike the period at
the end and insert a semicolon.
(5) In section 107(a)(7)(D) (as so designated by section
303 of this Act), strike ``the Federal Savings and Loan
Insurance Corporation or''.
(6) In section 107(a)(7)(E) (as so designated by section
303 of this Act), strike ``the Federal Home Loan Bank
Board,'' and insert ``the Federal Housing Finance Board,''.
(7) In section 107(a)(9) (as so designated by section 303
of this Act), strike ``subchapter III'' and insert ``title
III''.
(8) In section 107(a)(13) (as so designated by section 303
of this Act), strike the ``and'' after the semicolon at the
end.
(9) In section 109(c)(2)(A)(i), strike ``(12 U.S.C.
4703(16))''.
(10) In section 120(h), strike ``the Act approved July 30,
1947 (6 U.S.C., secs. 6-13),'' and insert ``chapter 93 of
title 31, United States Code,''.
(11) In section 201(b)(5), strike ``section 116 of''.
(12) In section 202(h)(3), strike ``section 207(c)(1)'' and
insert ``section 207(k)(1)''.
(13) In section 204(b), strike ``such others powers'' and
insert ``such other powers''.
(14) In section 206(e)(3)(D), strike ``and'' after the
semicolon at the end.
(15) In section 206(f)(1), strike ``subsection (e)(3)(B)''
and insert ``subsection (e)(3)''.
(16) In section 206(g)(7)(D), strike ``and subsection
(1)''.
(17) In section 206(t)(2)(B), insert ``regulations'' after
``as defined in''.
(18) In section 206(t)(2)(C), strike ``material affect''
and insert ``material effect''.
(19) In section 206(t)(4)(A)(ii)(II), strike ``or'' after
the semicolon at the end.
(20) In section 206A(a)(2)(A), strike ``regulator agency''
and insert ``regulatory agency''.
(21) In section 207(c)(5)(B)(i)(I), insert ``and'' after
the semicolon at the end.
(22) In the heading for subparagraph (A) of section
207(d)(3), strike ``to'' and insert ``with''.
(23) In section 207(f)(3)(A), strike ``category or
claimants'' and insert ``category of claimants''.
(24) In section 209(a)(8), strike the period at the end and
insert a semicolon.
(25) In section 216(n), insert ``any action'' before ``that
is required''.
(26) In section 304(b)(3), strike ``the affairs or such
credit union'' and insert ``the affairs of such credit
union''.
(27) In section 310, strike ``section 102(e)'' and insert
``section 102(d)''.
SEC. 803. OTHER TECHNICAL CORRECTIONS.
(a) Section 1306 of title 18, United States Code, is
amended by striking ``5136A'' and inserting ``5136B''.
(b) Section 5239 of the Revised Statutes of the United
States (12 U.S.C. 93) is amended by redesignating the second
of the 2 subsections designated as subsection (d) (as added
by section 331(b)(3) of the Riegle Community Development and
Regulatory Improvement Act of 1994) as subsection (e).
SEC. 804. REPEAL OF OBSOLETE PROVISIONS OF THE BANK HOLDING
COMPANY ACT OF 1956.
(a) In General.--Section 2 of the Bank Holding Company Act
of 1956 (12 U.S.C. 1841) is amended--
(1) in subsection (c)(2), by striking subparagraphs (I) and
(J); and
(2) by striking subsection (m) and inserting the following
new subsection:
``(m) [Repealed]''.
(b) Technical and Conforming Amendments.--Paragraphs (1)
and (2) of section 4(h) of the Bank Holding Company Act of
1956 (12 U.S.C. 1843(h)) are each amended by striking ``(G),
(H), (I), or (J) of section 2(c)(2)'' and inserting ``(G), or
(H) of section 2(c)(2)''.
TITLE IX--FAIR DEBT COLLECTION PRACTICES ACT AMENDMENTS
SEC. 901. EXCEPTION FOR CERTAIN BAD CHECK ENFORCEMENT
PROGRAMS.
(a) In General.--The Fair Debt Collection Practices Act (15
U.S.C. 1692 et seq.) is amended--
(1) by redesignating section 818 as section 819; and
(2) by inserting after section 817 the following new
section:
``Sec. 818. Exception for certain bad check enforcement
programs operated by private entities
``(a) In General.--If--
[[Page H719]]
``(1) a State or district attorney establishes, within the
jurisdiction of such State or district attorney and with
respect to alleged bad check violations that do not involve a
check described in subsection (c), a pretrial diversion
program for alleged bad check offenders who agree to
participate voluntarily in such program to avoid criminal
prosecution and are not described in subsection (b);
``(2) a private entity, that is subject to an
administrative support services contract with a State or
district attorney and operates under the direction,
supervision and control of such State or district attorney,
operates the pretrial diversion program described in
paragraph (1); and
``(3) in the course of performing duties delegated to it by
a State or district attorney under the contract, the private
entity referred to in paragraph (2)--
``(A) complies with the penal laws of the State;
``(B) conforms with the terms of the contract and
directives of the State or district attorney;
``(C) does not exercise independent prosecutorial
discretion;
``(D) contacts any alleged offender referred to in
paragraph (1) for purposes of participating in a program
referred to in such paragraph only--
``(i) as a result of any determination by the State or
district attorney that sufficient evidence of a bad check
violation under State law exists and that contact with the
alleged offender for purposes of participation in the program
is appropriate; or
``(ii) as otherwise permitted in response to evidence of a
bad check;
``(E) includes as part of an initial written communication
with an alleged offender a clear and conspicuous statement
that--
``(i) the alleged offender may dispute the validity of any
alleged bad check violation through a procedure established
and supervised by the State or district attorney, together
with an explanation of how such a dispute may be initiated;
and
``(ii) where the alleged offender knows, or has reasonable
cause to believe, that the alleged bad check violation is the
result of theft or forgery of the check, identity theft, or
other fraud that is not the result of the alleged offender's
conduct, the alleged offender may file a crime report with
the appropriate law enforcement agency and have further
contacts or restitution efforts suspended until the question
of the theft or forgery of the check, identity theft, or
other fraud has been resolved, together with clear
instructions on how to file such crime report; and
``(F) charges only fees in connection with services under
the contract that--
``(i) have been authorized by the contract with the State
or district attorney; and
``(ii) conform with the schedule of reasonable charges for
such services which shall be established by the National
District Attorney's Association, after consultation with the
Commission and representatives of interested business and
consumer organizations,
the private entity shall be treated as an officer of the
State and excluded from the definition of debt collector,
pursuant to the exception provided in section 803(6)(C), with
respect to the entity's operation of the program described in
paragraph (1) under the contract described in paragraph (2).
``(b) Certain Offenders Excluded.--An alleged bad check
offender is described in this subsection if a private entity
described in subsection (a)(2) can determine from available
records that such offender--
``(1) was convicted of a bad check offense in the 3 years
prior to issuing the bad check under consideration; or
``(2) participated in a pretrial diversion program in the
18 months prior to issuing the bad check under consideration.
``(c) Certain Checks Excluded.--A check is described in
this subsection if the check involves, or is subsequently
found to involve--
``(1) a postdated check presented in connection with a
payday loan, or other similar transaction, where the holder
of the check knew that the issuer had insufficient funds at
the time the check was made, drawn or delivered;
``(2) a stop payment order where the issuer acted in good
faith and with reasonable cause in stopping payment on the
check;
``(3) a check dishonored because of an adjustment to the
issuer's account by the financial institution holding such
account without providing notice to the person at the time
the check was made, drawn or delivered;
``(4) a check for partial payment of a debt where the
holder had previously accepted partial payment for such debt;
``(5) a check issued by a person who was not competent, or
was not of legal age, to enter into a legal contractual
obligation at the time the check was made, drawn or
delivered; or
``(6) a check issued to pay an obligation arising from a
transaction that was illegal in the jurisdiction of the State
or district attorney at the time the check was made, drawn or
delivered.
``(d) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) State or district attorney.--The term `State or
district attorney' means the chief elected or appointed
prosecuting attorney in a district, county (as defined in
section 2 of title 1, United States Code), municipality, or
comparable jurisdiction, including State attorneys general
who act as chief elected or appointed prosecuting attorneys
in a district, county (as so defined), municipality or
comparable jurisdiction, who may be referred to by a variety
of titles such as district attorneys, prosecuting attorneys,
commonwealth's attorneys, solicitors, county attorneys, and
state's attorneys, and who are responsible for the
prosecution of State crimes and violations of jurisdiction-
specific local ordinances.
``(2) Check.--The term `check' has the same meaning as in
section 3(6) of the Check Clearing for the 21st Century Act.
``(3) Bad check.--The term `bad check' means any check
that--
``(A) the issuer knew, or should have known, would not be
paid upon presentment because the issuer--
``(i) had no account with the drawee financial institution
at the time the check was made, drawn, or delivered;
``(ii) had closed the account upon with the check was made
or drawn prior to the time the check was made, drawn, or
delivered; or
``(iii) used a false or altered check, or false or altered
check account number; or
``(B) was refused payment by the financial institution or
other drawee for lack of sufficient funds and the issuer
failed to pay the full amount of the check, together with
reasonable costs as permitted by State law--
``(i) after receiving written notice from the holder of the
check that payment was refused by the drawee financial
institution to the extent that the timing and mode of
delivery of such written notice is in compliance with the
applicable State law for determining criminal liability for
bad check offenses; or
``(ii) in a case in which there are no applicable State law
requirements as described in clause (i), within 30 days of
receiving written notice, mailed to the issuer by certified
mail to the address printed on the check, or given at the
time the check was made, drawn or delivered or, otherwise, at
the address where the alleged offender resides or is found,
from the holder of the check that payment of 1 or more checks
was refused by the drawee financial institution.''.
(b) Clerical Amendment.--The table of sections for the Fair
Debt Collection Practices Act is amended--
(1) by redesignating the item relating to section 818 as
section 819; and
(2) by inserting after the item relating to section 817 the
following new item:
``818. Exception for certain bad check enforcement programs operated by
private entities.''.
SEC. 902. OTHER AMENDMENTS.
(a) Legal Pleadings.--Section 809 of the Fair Debt
Collection Practices Act (15 U.S.C. 1692g) is amended by
adding at the end the following new subsection:
``(d) Legal Pleadings.--A communication in the form of a
formal pleading in a civil action shall not be treated as an
initial communication for purposes of subsection (a).''.
(b) Notice Provisions.--Section 809 of the Fair Debt
Collection Practices Act (15 U.S.C. 1692g) is amended by
adding after subsection (d) (as added by subsection (a) of
this section) the following new subsection:
``(e) Notice Provisions.--The sending or delivery of any
form or notice which does not request the payment of a debt
and is expressly required by any other Federal or State law
or regulation, including the Internal Revenue Code of 1986,
title V of Gramm-Leach-Bliley Act, and any data security
breach notice and privacy law shall not be treated as a
communication in connection with debt collection. ''.
(c) Establishment of Right to Collect Within the First 30
Days.--Section 809(b) of the Fair Debt Collection Practices
Act (15 U.S.C. 1692g(b)) is amended by striking ``If the
consumer'' and inserting ``Collection activities and
communications may continue during any 30-day period referred
to in subsection (a). However, if the consumer''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Oxley), and the gentleman from Kansas (Mr. Moore) each will
control 20 minutes.
The Chair recognizes the gentleman from Ohio.
Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
Today the House will consider H.R. 3505, the Financial Services
Regulatory Relief Act of 2005. H.R. 3505 is intended to alter or
eliminate statutory banking provisions to lessen the growing regulatory
burden on insured depository institutions as well as make technical
corrections to current law.
The bill contains a broad range of constructive provisions that,
taken as a whole, will allow banks, thrifts, and credit unions to
devote more resources to the business of providing financial services
and less to compliance with outdated and unneeded regulations.
While effective regulation of the financial services industry is
central to the preservation of public trust, this legislation will
benefit consumers and the economy by lowering costs and improving
productivity. I want to congratulate Mr. Hensarling, the lead author of
the legislation, along with Mr. Moore, who both introduced H.R. 3505
last July.
The bill included virtually all of H.R. 1375, which passed the House
in 2004 by a vote of 392-25, plus a new title addressing Bank Secrecy
Act issues and over 20 other new sections. Mrs. Capito also deserves
recognition for her longstanding support of regulatory relief
legislation. Indeed, it was her legislation that passed in 2004.
Following H.R. 3505's introduction, Chairman Bachus held 2 days of
legislative hearings by the Financial Institution Subcommittee, with
witnesses
[[Page H720]]
from both Federal and State regulatory authorities, the banking thrift
and credit union industries, and the Financial Crimes Enforcement
Network. Last November, the Committee on Financial Services approved
H.R. 3505 by a vote of 67-0. The bill was sequentially referred to the
Committee on the Judiciary, which approved it last month by a voice
vote.
Mr. Speaker, the financial services industry is laboring under an
enormous regulatory burden. While many of the regulations are necessary
to protect consumers and meet other worthy public policy objectives, a
number are clearly burdensome. For this reason, shortly after I assumed
the chairmanship of the committee, I asked the financial regulators and
industry trade groups to give us their best advice on how we could ease
regulatory requirements faced by insured depositories. The goal was to
free depository institutions from unduly burdensome regulations so they
can better serve their customers and communities.
It was clear then, as it is today, that there also needs to be a
counterbalance to the significant compliance responsibilities placed on
depository institutions by the USA PATRIOT Act as well as other
government efforts to counterterrorist financing. Excessive regulation
affects all sectors of the financial services industry and presents the
greatest burden for smaller institutions. For small banks to continue
to serve their historic role as a financial lifeline for local
communities, they must be free to operate in a regulatory environment
that does not constrain them with arduous requirements.
H.R. 3505, for instance, includes the following provisions: national
banks could more easily operate as subchapter S corporations to avoid
double tax on a bank's earnings, as well as choose among different
forms of business organizations. Thrift institutions are given some of
the same investment, lending and business organization flexibility
available to banks. Credit unions would have wider options for
investments, lending, mergers and conversions. Regulators are given
more latitude in scheduling exams, sharing data, retaining records, and
streamlining reports of condition. And clerical and technical
amendments are made to several banking statutes.
The bill's title VII, Bank Secrecy Act Compliance Burden Reduction,
addresses financial institutions' concerns that some of the work they
are being asked to do in the fight against financial crimes is
unnecessary or duplicative.
I would like to thank former FinCEN Director Fox, Mr. Hensarling, and
Chairman Bachus, as well as Mr. Frank and Mr. Gutierrez, for their
efforts in creating this title which balances law enforcement's needs
with the industry's very real concerns about excessive burdens.
The first section of title VII focuses on reducing the number of
currency transaction reports, or CTRs, that must be filed by
institutions on transactions involving large sums of cash, reports that
can be extraordinarily useful to law enforcement but which often are
filed on obviously unremarkable transactions, such as a deposit by a
large discount store. It streamlines the process for exempting
institutions from reporting such transactions. Other sections of title
VII seek to eliminate inconsistencies or duplicative requirements in
conjunction with the filing of suspicious activity reports, or SARS.
Mr. Speaker, the financial services industry spends a great deal of
money every year complying with outdated and ineffective regulations.
That is money that could instead be lent for new homes, new cars, and
new projects, fueling job growth in local communities. The sooner we
enact this legislation, the sooner we will provide needed relief to
depository institutions and increase financial opportunities for both
consumers and businesses. So I urge Members to support passage of H.R.
3505.
Mr. Speaker, I reserve the balance of my time.
Mr. MOORE of Kansas. Mr. Speaker, I would like to thank Chairman
Oxley and Ranking Member Frank for supporting H.R. 3505 and ensuring
its consideration on the House floor today. I would also like to thank
Congressman Hensarling for working with me to introduce the Financial
Services Regulatory Relief Act. The Financial Services Committee has a
strong record of bipartisanship, and I am glad that has extended to
this bill. Regulatory relief should not be about Republicans or
Democrats; it should be about doing the right thing for the lenders in
our communities who play such an important part in expanding home
ownership and creating opportunities for businesses and for consumers.
Our committee passed this legislation November by a vote of 67-0, and
with this being the last year of his chairmanship, I wish to thank
particularly Chairman Mike Oxley for working across party lines and
forging the kind of consensus that led to a unanimous vote in our
committee. This is really the model for how Congress should operate and
demonstrates that bipartisan efforts on behalf of our constituents can
yield positive results. During the 108th Congress, the House passed a
very similar reg-relief bill by a vote of 392-25. I hope the House will
pass this bill by a similarly wide margin.
Mr. Speaker, small lenders in our communities particularly feel the
burden of duplicative and unnecessary regulations. Whenever Congress or
the regulatory agencies impose a new burden on industry, small
institutions must devote a large percentage of their staffs' time to
review the new law or regulation to determine if it can and how it will
affect them. Compliance with new laws and regulations, while necessary,
nearly always takes a large amount of time that businesses can't devote
to serving their customers and our constituents.
Strong regulation of our country's financial system is absolutely
essential, but Congress and the financial regulators have a
responsibility to strike the right balance in this area, and I believe
H.R. 3505 is an important step in the right direction. Since coming to
Congress, I have heard from many depository institutions in my district
and throughout Kansas. I have tried to address in H.R. 3505 some of the
concerns that I have heard about.
According to the Office of the State Bank Commissioner in Kansas,
assets for four State-chartered banks, thrifts and mortgage lenders
have reached an all-time high of approximately $29 billion. As these
businesses have prospered, so too have they faced increasing
requirements to comply with both old and new regulatory burdens,
including some created by the Bank Secrecy Act.
H.R. 3505, Mr. Speaker, seeks to provide relief from some of these
new burdens to our financial institutions in a way that preserves our
ability to effectively track terrorist financing and build upon our
successes in freezing the funds of terrorists. Representative
Hensarling and I, together with the bill's 39 bipartisan cosponsors and
67 supporters on the Financial Services Committee, agree that waging a
strong war on terror and providing some reg relief to our financial
institutions are not incompatible goals.
Additionally, Mr. Speaker, H.R. 3505 provides two new sections of reg
relief for our credit unions that were not included in the previous
version of this measure, H.R. 1375.
Mr. Speaker, I yield 4 minutes to the gentlewoman from New York (Mrs.
Maloney).
Mrs. MALONEY. Mr. Speaker, I thank the gentleman for yielding me this
time and for his leadership on this bill. I also congratulate the
leadership on both sides of the aisle, and I rise in strong support of
H.R. 3505. The Financial Services Committee passed it out in October.
This bill has a number of provisions that I strongly support and which
I have worked in a bipartisan way to get into this legislation.
As a representative from New York City, the financial center of the
United States, I am concerned about the burdens that regulation and
reporting requirements impose on our financial institutions,
particularly those that are not mega-institutions but are mid-sized and
smaller. I know that the vast majority of my colleagues on both sides
of the aisle share this concern, and we have worked together to address
it in this legislation.
Last year, we passed regulatory relief by an overwhelming majority in
the House but it failed in the Senate. I voted for that bill, although
I thought it could use some improvement, and this bill is improved by
the addition of
[[Page H721]]
several provisions dealing with issues that are of special concern to
me, such as the extraordinary burden of compliance under which our
financial institutions are required to operate.
Wherever I go in my district, smaller institutions tell me how hard
and costly it is to comply with the new requirements of the Bank
Secrecy Act, to file currency transaction reports, and to comply with
the new requirements of the PATRIOT Act Know Your Customer
requirements. They say these requirements in many cases are redundant
and are excessively burdensome. The burdens are particularly heavy for
smaller institutions.
I worked with Representative Renzi to develop the language in this
bill that eliminates unnecessary currency transaction reports so that
banks can focus on suspicious activity reports, or SARS, which are a
much more useful tool, according to law enforcement, to track money
laundering and terrorist financing.
This measure was proposed by the Treasury Department and law
enforcement. We heard from FinCEN, the lead agency on money laundering,
that the masses of useless CTRs being filed impeded law enforcement and
were often not even looked at. And the General Accounting Office, the
independent body that reviews government activities, confirmed that in
a report last year also supporting streamlining the process. The
banking regulators also expressed strong support for this proposal. OCC
and OTS both agreed with FinCEN that the CTR filing process had become
counterproductive in terms of national security.
This bill also includes other provisions relieving the unnecessary
burden on community banks, including increased commercial and small
business lending authority for Federal savings associations, regulation
of thrift trust activities in a manner comparable to bank trust
activities, and an exemption from annual privacy notice requirements
for financial institutions that do not share customer information.
This bill also contains regulatory relief for credit unions, taken
from the Credit Union Regulatory Improvement Act, which I have
cosponsored for several Congresses.
Mr. Speaker, I urge my colleagues to support this bill. I look
forward to the passage in this House and hopefully in the other body
also.
Mr. MOORE of Kansas. Mr. Speaker, I reserve the balance of my time.
Mr. OXLEY. Mr. Speaker, I now yield 2 minutes to the gentlewoman from
New York (Mrs. Kelly), the chairwoman of the Oversight Subcommittee.
Mrs. KELLY. Mr. Speaker, I rise today in strong support of H.R. 3505.
This bill contains many important items that will benefit banks, credit
unions, and, most importantly, the consumers in our country, making it
easier and cheaper to receive financial services.
{time} 1315
The bill also enhances our national security. Section 706 of the
bill, authored by myself and Mrs. Maloney of New York, will establish a
certification regime for foreign countries that clearly identifies to
taxpayers and financial institutions which countries are not enforcing
laws against money laundering and terrorist financing. This
certification regime will compel foreign nations to better enforce
their laws and seek technical assistance from the United States.
Our government has a duty to inform its citizens of risks in doing
business with countries that are not doing enough to protect their
financial institutions from money laundering and terror finance, Dubai
and the UAE, for instance. This bill gives our government a cost-free,
simple means to do it. I urge the House to join with me in passing this
bill.
Mr. MOORE of Kansas. Mr. Speaker, I reserve the balance of my time.
Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentleman from
Alabama (Mr. Bachus), the chairman of the Subcommittee on Financial
Institutions.
Mr. BACHUS. Mr. Speaker, let me say under Chairman Oxley's
leadership, this committee has been committed for almost 6 years with
freeing depository institutions of unduly and unnecessary burdensome
regulations.
When we started this quest, the burden on those institutions was
estimated at $25 billion a year. It is now $36 billion a year, and that
is despite the fact that we have passed two or three pieces of
legislation that have done away with some of these regulations.
Last year the House passed overwhelmingly similar legislation to this
legislation; it unfortunately died in the other body. The legislation
before us has a potential to save somewhere between $15 and $20
billion, and that is not to depository institutions; that is actually
money that will be available to loan to Americans to finance home
purchases, cars, property, or it will be available to pay greater
yields on their deposits. So this is a very good bill for America. It
will strengthen not only our financial institutions, but our economy.
I would like to commend the following people: Mrs. Maloney and Mr.
Renzi. Mrs. Maloney has already spoken about the importance of the
seasoned investor exemption where people who deal with banks on a daily
and weekly basis depositing money, where those banks will not have to
file unnecessary paperwork.
It will aid Bill Fox at FinCEN, who is in charge of preventing money
laundering and says that this provision will make it easier for law
enforcement, for the FBI and other agencies to track money laundering
and eliminate costly filings.
I would like to commend Mr. Ryun for some very strong provisions
helping our community and independent banks; and Mr. Kanjorski and Mr.
Royce.
Finally, I would say to Mr. Hensarling and Mr. Moore, you have done a
fine job on this bill, and I commend you and commend this product.
Mr. MOORE of Kansas. Mr. Speaker, I reserve the balance of my time.
Mr. OXLEY. Mr. Speaker, I yield 5 minutes to the gentleman from Texas
(Mr. Hensarling), the author of this legislation.
(Mr. HENSARLING asked and was given permission to revise and extend
his remarks.)
Mr. HENSARLING. Mr. Speaker, first, I want to thank Chairman Oxley
for his great commitment to this legislation and his critical
leadership in tackling this important topic lo these many years. And I
also want to thank Chairman Bachus for his outstanding leadership on
the subcommittee level. And finally, I want to thank the ranking member
(Mr. Frank of Massaschusetts) and the gentleman from Kansas (Mr. Moore)
for their bipartisan efforts in ensuring that we help reduce the
regulatory burden on our Nation's financial institutions.
With thoughtful regulatory relief, Congress can free up more capital
for small businesses and families. Excessive, redundant, costly
regulations can make credit more expensive and less accessible. These
regulations can keep Americans from obtaining their first mortgage,
buying their first car, financing a child's education, or starting a
small business that creates needed new jobs.
Mr. Speaker, we know that the Federal regulatory burden falls
particularly disproportionately on our smaller banks and credit unions.
For example, the total number of small community banks has declined by
almost a third in just one decade. Now, I am sure there are a number of
reasons for all of these consolidations and mergers that have taken
place, but from speaking to folks in my home State of Texas, certainly
the burden and cost of Federal regulation rank among the top reasons,
and certainly one of the top challenges to their continued
profitability and their continued viability.
Furthermore, since 1989, bank regulators have promulgated over 850
new regulations. That is about 50 new regulations a year. Can we really
expect our small, community-based financial institutions to keep up
with this pace? I do not believe we can, and I do not believe we
should.
This is worrisome because I believe it is these small, independent
financial institutions that continue to be the economic lifeblood of
many of our rural communities and a number of our inner-city
neighborhoods. Let me offer one example from my home congressional
district, First State Bank of Athens, Texas. This bank makes 50 to 75
charitable contributions each year to community groups in Henderson
County, Texas, the American Heart Association, Meals on Wheels,
Disabled
[[Page H722]]
American Veterans, and the East Texas Arboretum, to name a few. This
bank has funded a local employer, Texas Ragtime, that has 90 employees,
not to mention the jobs that they helped create at Nelson's Henderson
County Door and Futurematrix Medical Devices. Last year they made 503
small business loans and an additional 314 small agricultural loans.
Yet we need to know that with burdensome regulatory compliance, every
dollar they spend on regulatory compliance is a dollar they cannot
spend on Meals on Wheels or to create new jobs at Ragtime. The same is
true for every other small financial institution across our Nation. We
in Congress can never lose sight of this fact.
This same bank in Athens, Texas, like thousands across the Nation,
spends close to half a million dollars a year combined each year on BSA
compliance, Reg B, Reg E, Reg D, CRA, HMDA, HOEPA, Reg O, Reg X, and
Reg Z, just to name a few.
If Congress cannot determine a compelling reason for any existing
regulation in a modern marketplace, I believe we have a duty to modify
or eliminate that regulation.
Now, I am particularly pleased about the relief this bill offers for
currency transaction reports. Unfortunately, the environment we are in
today has led many banks to file their CTRs, cash transaction reports,
and their suspicious activity reports in a highly defensive manner.
Under this legislation I believe the majority of the 13 million-plus
CTRs filed annually would stop, saving many, many hours and many, many
thousands of dollars in savings in filling out these forms. This would
also, perhaps more importantly, allow our law enforcement officials to
better direct resources and help properly evaluate the suspicious
activity reports, and thus better fight crime and terrorist financing.
Mr. Speaker, finally, this bill has received rare unanimous support
when it was reported out of the Committee on Financial Services. It
represents the hard work of Members on both sides of the aisle. I do
believe that this bill will provide substantive regulatory relief for
our financial institutions, and that will put more money, more capital,
in the hands of those on the front lines of community lending and help
American families realize their dreams.
Mr. MOORE of Kansas. Mr. Speaker, I reserve the balance of my time.
Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentleman from Ohio
(Mr. Gillmor).
Mr. GILLMOR. Mr. Speaker, I thank my distinguished chairman for
yielding me this time, and I want to thank Chairman Oxley and Chairman
Bachus, as well as Mr. Hensarling and Mr. Frank, for their diligence on
this critical piece of legislation.
There is little doubt that our regulatory structure has contributed
to the United States becoming the model for the world when it comes to
financial services. But without the constant attention to the burdens
of outdated rules and regulations, our markets can be dragged down by
unnecessary costs.
I am pleased to see that the bill incorporates my compromise with
Ranking Member Frank regarding so-called industrial loan companies. It
remains my belief that these institutions need to be reined in, and
that the historic wall separating banking from commerce has to remain
strong. There is no reason to treat one type of financial institution,
an ILC, in a more favorable way than we treat other financial
institutions.
So I think if this bill reaches the President's desk, which I hope it
will, we have helped ensure that our depository institutions remain the
most efficient in the world.
Mr. MOORE of Kansas. Mr. Speaker, I yield myself the balance of my
time.
I want to thank Mr. Hensarling, who was not here when I thanked
Members, and I thank the gentleman for the opportunity to work with
him.
I also would like to thank the subcommittee chairman, Mr. Bachus, and
thank the chairman of the full committee, Chairman Oxley.
Mr. Speaker, I yield back the balance of my time.
Mr. OXLEY. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I again reiterate my thanks to the members of the
committee for a strong bipartisan vote and a very good effort. We are
encouraged now on the other side of the Capitol that they have had
their hearing, and Senator Crapo and others are working towards the
same goal as the House is, and we expect that bill to pass today.
I particularly thank the gentleman from Ohio (Mr. Gillmor) for
crafting a very key compromise amendment with the ranking member, the
gentleman from Massachusetts (Mr. Frank), dealing with the ILCs, one of
the tougher issues that the committee has had to deal with over some
time, and yet that compromise has stood the test of time, and I
congratulate particularly Mr. Gillmor and Mr. Frank for their diligence
on that.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore (Mr. Terry). The question is on the motion
offered by the gentleman from Ohio (Mr. Oxley) that the House suspend
the rules and pass the bill, H.R. 3505, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. OXLEY. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this question will
be postponed.
____________________