[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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