[Congressional Record Volume 152, Number 123 (Wednesday, September 27, 2006)]
[House]
[Pages H7604-H7605]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      FINANCIAL SERVICES REGULATORY RELIEF AMENDMENTS ACT OF 2006

  Mr. McHENRY. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 6072) to amend the Federal Deposit Insurance Act to provide 
further regulatory relief for depository institutions and clarify 
certain provisions of law applicable to such institutions, and for 
other purposes.
  The Clerk read as follows

                               H.R. 6072

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Financial Services 
     Regulatory Relief Amendments Act of 2006'' .

     SEC. 2. 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 Regulatory Relief 
     Amendments Act of 2006, 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 acknowledgment 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 
     Amendments Act of 2006, receive any deposit for the account 
     of such depositor only if--
       ``(i) the depositor has signed a written acknowledgment 
     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 
     Amendments Act of 2006 for the account of any depositor who 
     was a depositor on that date only if--
       ``(i) the depositor has signed a written acknowledgment 
     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 Amendments Act of 2006, 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 acknowledgment 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.''.

     SEC. 3. 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

[[Page H7605]]

     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.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
North Carolina (Mr. McHenry) and the gentleman from Massachusetts (Mr. 
Frank) each will control 20 minutes.
  The Chair recognizes the gentleman from North Carolina.


                             General Leave

  Mr. McHENRY. Madam Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on this legislation and to insert extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from North Carolina?
  There was no objection.
  Mr. McHENRY. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, H.R. 6072, the Financial Services Regulatory Relief 
Amendments Act of 2006, is similar to the previous legislation passed 
here in the House by a voice vote.
  I want to start by commending Chairman Oxley and Mr. Ross, a former 
member of the Financial Services Committee, for introducing this 
legislation.
  Like our previous legislation we considered a few moments ago here on 
the House floor, this is one of two provisions from H.R. 3505, the 
Financial Services Regulatory Relief Act of 2005, which passed this 
House last March by a 415-2 vote. This, too, makes minor changes to the 
underlying legislation that we passed previously, I should say.
  H.R. 6072 would make minor changes to section 43 of the Federal 
Deposit Insurance Act. In 1991, Congress directed the Federal Trade 
Commission to regulate private deposit insurance for credit unions. 
Federal law allows State-chartered credit unions to have private 
insurance, if the State legislature has sanctioned the use of private 
insurance. Eight States currently allow private insurance for credit 
unions, including the chairman of the Financial Services Committee, his 
home State of Ohio. For several years, the Appropriations Committee has 
barred the FTC from enforcing this law. That has changed now, and the 
FTC is moving forward with regulations. The agency has requested, 
however, that we make certain changes to the statute to make their 
enforcement more efficient. Credit unions support this as well because 
it would end years of uncertainty and lack of guidance from the Federal 
Government.
  I could go on in further description of the bill, but at this time I 
would be happy to hear from the ranking member of the Financial 
Services Committee.
  Mr. Speaker, I retain the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself such time as 
I may consume.
  The gentleman from North Carolina has explained one of the 
provisions. There is another provision, and it deals with the 
preemption of a provision in the article of the Constitution.
  Mr. Speaker, if we were talking about a provision that was statutory 
in the State of Arkansas or elsewhere, I would not be supportive of 
preemption. I do not think we should do what legislatures can do, but 
things have found their way into State Constitutions which it can be 
difficult to deal with it, and it does seem to me that this particular 
preemption that I understand is fairly widely supported in Arkansas, 
which would modify but not completely repeal restrictions on interest 
that can be charged, is a reasonable one. I think it would be allowed 
for reasonable transactions.
  It would not, and is so worded, is not to allow things that are now 
abusive like payday loans, and this will now go to the other body and 
the Senators from Arkansas who decided this.
  But it does seem to me that responding to this request from our 
colleagues to deal with something that is inappropriately, in my 
judgment, wedged in a Constitution because it is something that should 
be a matter of legislative policy, not constitutional, that it is okay.
  Let me say this: if after we were to do this, if the people of that 
State or any other State wanted to reassert a certain limitation by 
legislation, I would agree that would be their right. So I do agree 
that we should not deal with this constitutional problem, but if they 
were to decide they wanted to do it legislatively, I would then be 
prepared to modify this.

                              {time}  2000

  Mr. Speaker, I yield back the balance of my time.
  Mr. McHENRY. Mr. Speaker, before I close, I want to thank the FTC and 
the work of the Financial Services Committee on these provisions within 
this legislation. I urge my colleagues to support this bill, H.R. 6072
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Burgess). The question is on the motion 
offered by the gentleman from North Carolina (Mr. McHenry) that the 
House suspend the rules and pass the bill, H.R. 6072.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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