[Congressional Record Volume 154, Number 105 (Tuesday, June 24, 2008)]
[House]
[Pages H5979-H5984]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CREDIT UNION, BANK, AND THRIFT REGULATORY RELIEF ACT OF 2008
Mr. KANJORSKI. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 6312) to advance credit union efforts to promote economic
growth, modify credit union regulatory standards and reduce burdens, to
provide regulatory relief and improve productivity for insured
depository institutions, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 6312
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 ``Credit
Union, Bank, and Thrift Regulatory Relief Act of 2008''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--CREDIT UNIONS
Sec. 101. Investments in securities by Federal credit unions.
Sec. 102. Increase in investment limit in credit union service
organizations.
Sec. 103. Member business loan exclusion for loans to nonprofit
religious organizations.
Sec. 104. Authority of NCUA to establish longer maturities for certain
credit union loans.
Sec. 105. Providing the National Credit Union Administration with
greater flexibility in responding to market conditions.
Sec. 106. Conversions of certain credit unions to a community charter.
Sec. 107. Credit union participation in the SBA section 504 program.
Sec. 108. Amendments relating to credit union service to underserved
areas.
Sec. 109. Short-term payday loan alternatives within field of
membership.
Sec. 110. Credit union governance.
Sec. 111. Encouraging small business development in underserved urban
and rural communities.
TITLE II--SAVINGS ASSOCIATION PROVISIONS
Sec. 201. Restatement of authority for Federal savings associations to
invest in small business investment companies.
Sec. 202. Removal of limitation on investments in auto loans.
Sec. 203. Repeal of qualified thrift lender requirement with respect to
out-of-state branches.
Sec. 204. Small business and other commercial loans.
Sec. 205. Increase in limits on commercial real estate loans.
Sec. 206. Savings association credit card banks.
[[Page H5980]]
TITLE III--NOTICE PROVISIONS
Sec. 301. Exception to annual privacy notice requirement under the
Gramm-Leach-Bliley Act.
TITLE IV--BUSINESS CHECKING
Sec. 401. Short title.
Sec. 402. Interest-bearing transaction accounts authorized for all
businesses.
Sec. 403. Interest-bearing transaction accounts authorized.
Sec. 404. Rules of construction.
Sec. 405. Consumer banking costs assessment.
TITLE I--CREDIT UNIONS
SEC. 101. INVESTMENTS IN SECURITIES BY FEDERAL CREDIT UNIONS.
Section 107 of the Federal Credit Union Act (12 U.S.C.
1757) is amended--
(1) by striking ``A Federal credit union'' and inserting
``(a) In General.--A Federal credit union''; and
(2) by adding at the end the following new subsection:
``(b) Investment for the Credit Union's Own Account.--
``(1) In general.--In addition to the investments
authorized in subsection (a), 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. 102. INCREASE IN 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 redesignated by section 101(1)) is
amended by striking ``up to 1 per centum of the total paid''
and inserting ``up to 3 percent of the total paid''.
SEC. 103. 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. 104. AUTHORITY OF NCUA TO ESTABLISH LONGER MATURITIES
FOR CERTAIN CREDIT UNION LOANS.
Section 107(a)(5) of the Federal Credit Union Act (12
U.S.C. 1757(5)) (as so redesignated by section 101(1)) is
amended in the matter preceding subparagraph (A), by striking
``except as otherwise provided herein'' and inserting ``or
any longer maturity as the Board may allow, in regulations,
except as otherwise provided in this Act''.
SEC. 105. PROVIDING THE NATIONAL CREDIT UNION ADMINISTRATION
WITH GREATER FLEXIBILITY IN RESPONDING TO
MARKET CONDITIONS.
Section 107(a)(5)(A)(vi)(I) of the Federal Credit Union Act
(12 U.S.C. 1757(5)(A)(vi)(I)) (as so redesignated by section
101(1)) 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. 106. CONVERSIONS OF CERTAIN CREDIT UNIONS TO A COMMUNITY
CHARTER.
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. 107. CREDIT UNION PARTICIPATION IN THE SBA SECTION 504
PROGRAM.
Section 107(a)(5)(A)(iii) of the Federal Credit Union Act
(12 U.S.C. 1757(5)(A)(iii)) (as so redesignated by section
101(1)) is amended by inserting ``, and applicable
regulations,'' after ``specified in the law''.
SEC. 108. AMENDMENTS RELATING TO CREDIT UNION SERVICE TO
UNDERSERVED AREAS.
(a) In General.--Paragraph (2) of section 109(c) of the
Federal Credit Union Act (12 U.S.C. 1759(c)(2)) is amended to
read as follows:
``(2) Exception for underserved areas.--
``(A) In general.--Notwithstanding subsection (b), the
Board may approve an application by a Federal credit union to
allow the membership of such credit union to include any
person or organization whose principal residence or place of
business is located within a local community, neighborhood,
or rural district if--
``(i) the Board determines--
``(I) at any time after August 7, 1998, that all of the
local community, neighborhood, or rural district taken into
account for purposes of this paragraph is an underserved area
(as defined in section 101(10)); and
``(II) at the time of such approval, that the credit union
is well capitalized or adequately capitalized (as defined in
section 216(c)(1)); and
``(ii) before the end of the 24-month period beginning on
the date of such approval, the credit union has established
and maintains an office or facility in the local community,
neighborhood, or rural district at which credit union
services are available.
``(B) Termination of approval.--Any failure of a Federal
credit union to meet the requirement of clause (ii) of
subparagraph (A) by the end of the 24-month period referred
to in such clause shall constitute a termination, as a matter
of law, of any approval of an application under this
paragraph by the Board with respect to the membership of such
credit union.
``(C) Annual credit union reporting requirement.--Any
Federal credit union which has an application approved under
this paragraph shall submit an annual report to the
Administration on the number of members of the credit union
who are members by reason of such application and the number
of offices or facilities maintained by the credit union in
the local community, neighborhood, or rural district taken
into account by the Board in approving such application.
``(D) Publication by administration.--The Administration
shall publish annually a report containing--
``(i) a list of all the applications approved under this
paragraph prior to the publication of the report;
``(ii) the number and locations of the underserved areas
taken into account in approving such applications; and
``(iii) the total number of members of credit unions who
are members by reason of the approval of such
applications.''.
(b) Underserved Area Defined.--Section 101 of the Federal
Credit Union Act (12 U.S.C. 1752) is amended--
(1) by striking ``and'' at the end of paragraph (8);
(2) by striking the period at the end of paragraph (9) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(10) the term `underserved area'--
``(A) means a geographic area consisting of a single census
tract or a group of census tracts, each of which--
``(i) meets the criteria for--
``(I) a low income community, as defined in section 45D(e)
of the Internal Revenue Code of 1986; or
``(II) an investment area, as defined and designated under
section 103(16) of the Community Development Banking and
Financial Institutions Act of 1994; and
``(ii) is not a tract in which 50 percent or more of the
resident families have annual incomes in excess of $75,000
(as adjusted periodically by the Board, at the discretion of
the Board, to reflect changes in the average Consumer Price
Index for all-urban consumers published by the Department of
Labor); and
``(B) notwithstanding subparagraph (A), includes, with
respect to any Federal credit union, any geographic area
within which such credit union--
``(i) has received approval to provide service before the
date of the enactment of the Credit Union, Bank, and Thrift
Regulatory Relief Act of 2008 from the National Credit Union
Administration; and
``(ii) has established a service facility before such date
of enactment.''.
SEC. 109. SHORT-TERM PAYDAY LOAN ALTERNATIVES WITHIN FIELD OF
MEMBERSHIP.
Section 107(a) of the Federal Credit Union Act (12 U.S.C.
1757(5)) (as so redesignated by section 101(1)) is amended--
(1) by redesignating paragraphs (16) and (17) as paragraphs
(17) and (18), respectively; and
(2) by inserting after paragraph (15) the end the following
new paragraph:
``(16) to make short-term unsecured loans as an alternative
to payday loans, in amounts not more than $1,000 each and for
a term of not more than 90 days, to nonmembers in the field
of membership, subject to the same terms and conditions as
are applicable under paragraph (5)(A), including the
[[Page H5981]]
interest rate ceiling, with respect to loans to members, to
the extent applicable, and to regulations prescribed by the
Board.''.
SEC. 110. 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.''.
SEC. 111. ENCOURAGING SMALL BUSINESS DEVELOPMENT IN
UNDERSERVED URBAN AND RURAL COMMUNITIES.
Section 107A(c)(1)(B) of the Federal Credit Union Act (12
U.S.C. 1757a(c)(1)(B)) is amended--
(1) by striking ``or'' after the semicolon at the end of
clause (iv);
(2) by redesignating clause (v) as clause (vi); and
(3) by inserting after clause (iv) the following new
clause:
``(v) that is made to a member, the proceeds of which are
to be used for commercial, corporate, business, farm or
agricultural purposes in an underserved area if such
extension of credit--
``(I) is made to a person or organization whose principal
residence or place of business is located within an
underserved area (as defined in section 101(10)) served by
the credit union, and is not a business, or a local outlet of
a business, operating on a nationwide basis (for purposes of
the preceding clause, a locally-owned franchise that consists
only of local operations shall not be treated as a business
operating on a nationwide basis); or
``(II) is secured by real property located within, or is
intended to operate as part of a business located within,
such underserved area; or''.
TITLE II--SAVINGS ASSOCIATION PROVISIONS
SEC. 201. 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. 202. 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. 203. 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. 204. 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 202(a) 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. 205. 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. 206. 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.
TITLE III--NOTICE PROVISIONS
SEC. 301. 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)(iii) 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.''.
TITLE IV--BUSINESS CHECKING
SEC. 401. SHORT TITLE.
This title may be cited as the ``Business Checking Fairness
Act of 2008''.
SEC. 402. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED
FOR ALL BUSINESSES.
Section 2 of Public Law 93-100 (12 U.S.C. 1832) is
amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively; and
(2) by inserting after subsection (a) the following:
``(b) Notwithstanding any other provision of law, any
depository institution may permit the owner of any deposit or
account which is a deposit or account on which interest or
dividends are paid and is not a deposit or account described
in subsection (a)(2) to make up to 24 transfers per month (or
such greater number as the Board of Governors of the Federal
Reserve System may determine by rule or order), for any
purpose, to another account of the owner in the same
institution. An account offered pursuant to this subsection
shall be considered a transaction account for purposes of
section 19 of the Federal Reserve Act unless the Board of
Governors of the Federal Reserve System determines
otherwise.''.
SEC. 403. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED.
(a) Repeal of Prohibition on Payment of Interest on Demand
Deposits.--
(1) Federal reserve act.--Section 19(i) of the Federal
Reserve Act (12 U.S.C. 371a) is amended to read as follows:
``(i) [Repealed]''.
(2) Home owners' loan act.--The first sentence of section
5(b)(1)(B) of the Home Owners' Loan Act (12 U.S.C.
1464(b)(1)(B)) is amended by striking ``savings association
may not--'' and all that follows through ``(ii) permit any''
and inserting ``savings association may not permit any''.
(3) Federal deposit insurance act.--Section 18(g) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(g)) is amended
to read as follows:
``(g) [Repealed]''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect at
[[Page H5982]]
the end of the 2-year period beginning on the date of the
enactment of this Act.
SEC. 404. RULES OF CONSTRUCTION.
In the case of an escrow account maintained at a depository
institution for the purpose of completing the settlement of a
real estate transaction--
(1) the absorption, by the depository institution, of
expenses incidental to providing a normal banking service
with respect to such escrow account;
(2) the forbearance, by the depository institution, from
charging a fee for providing any such banking function; and
(3) any benefit which may accrue to the holder or the
beneficiary of such escrow account as a result of an action
of the depository institution described in subparagraph (1)
or (2) or similar in nature to such action, including any
benefits which have been so determined by the appropriate
Federal regulator,
shall not be treated as the payment or receipt of interest
for purposes of this title and any provision of Public Law
93-100, the Federal Reserve Act, the Home Owners' Loan Act,
or the Federal Deposit Insurance Act relating to the payment
of interest on accounts or deposits at depository
institutions. No provision of this title shall be construed
so as to require a depository institution that maintains an
escrow account in connection with a real estate transaction
to pay interest on such escrow account or to prohibit such
institution from paying interest on such escrow account. No
provision of this title shall be construed as preempting the
provisions of law of any State dealing with the payment of
interest on escrow accounts maintained in connection with
real estate transactions.
SEC. 405. CONSUMER BANKING COSTS ASSESSMENT.
(a) In General.--The Federal Reserve Act (12 U.S.C. 221 et
seq.) is amended--
(1) by redesignating sections 30 and 31 as sections 31 and
32, respectively; and
(2) by inserting after section 29 the following new
section:
``SEC. 30. SURVEY OF BANK FEES AND SERVICES.
``(a) Biennial Survey Required.--The Board of Governors of
the Federal Reserve System shall obtain biennially a sample,
which is representative by type and size of the institution
(including small institutions) and geographic location, of
the following retail banking services and products provided
by insured depository institutions and insured credit unions
(along with related fees and minimum balances):
``(1) Checking and other transaction accounts.
``(2) Negotiable order of withdrawal and savings accounts.
``(3) Automated teller machine transactions.
``(4) Other electronic transactions.
``(b) Minimum Survey Requirement.--The biennial survey
described in subsection (a) shall meet the following minimum
requirements:
``(1) Checking and other transaction accounts.--Data on
checking and transaction accounts shall include, at a
minimum, the following:
``(A) Monthly and annual fees and minimum balances to avoid
such fees.
``(B) Minimum opening balances.
``(C) Check processing fees.
``(D) Check printing fees.
``(E) Balance inquiry fees.
``(F) Fees imposed for using a teller or other institution
employee.
``(G) Stop payment order fees.
``(H) Nonsufficient fund fees.
``(I) Overdraft fees.
``(J) Fees imposed in connection with bounced-check
protection and overdraft protection programs.
``(K) Deposit items returned fees.
``(L) Availability of no-cost or low-cost accounts for
consumers who maintain low balances.
``(2) Negotiable order of withdrawal accounts and savings
accounts.--Data on negotiable order of withdrawal accounts
and savings accounts shall include, at a minimum, the
following:
``(A) Monthly and annual fees and minimum balances to avoid
such fees.
``(B) Minimum opening balances.
``(C) Rate at which interest is paid to consumers.
``(D) Check processing fees for negotiable order of
withdrawal accounts.
``(E) Fees imposed for using a teller or other institution
employee.
``(F) Availability of no-cost or low-cost accounts for
consumers who maintain low balances.
``(3) Automated teller transactions.--Data on automated
teller machine transactions shall include, at a minimum, the
following:
``(A) Monthly and annual fees.
``(B) Card fees.
``(C) Fees charged to customers for withdrawals, deposits,
and balance inquiries through institution-owned machines.
``(D) Fees charged to customers for withdrawals, deposits,
and balance inquiries through machines owned by others.
``(E) Fees charged to noncustomers for withdrawals,
deposits, and balance inquiries through institution-owned
machines.
``(F) Point-of-sale transaction fees.
``(4) Other electronic transactions.--Data on other
electronic transactions shall include, at a minimum, the
following:
``(A) Wire transfer fees.
``(B) Fees related to payments made over the Internet or
through other electronic means.
``(5) Other fees and charges.--Data on any other fees and
charges that the Board of Governors of the Federal Reserve
System determines to be appropriate to meet the purposes of
this section.
``(6) Federal reserve board authority.--The Board of
Governors of the Federal Reserve System may cease the
collection of information with regard to any particular fee
or charge specified in this subsection if the Board makes a
determination that, on the basis of changing practices in the
financial services industry, the collection of such
information is no longer necessary to accomplish the purposes
of this section.
``(c) Biennial Report to Congress Required.--
``(1) Preparation.--The Board of Governors of the Federal
Reserve System shall prepare a report of the results of each
survey conducted pursuant to subsections (a) and (b) of this
section and section 136(b)(1) of the Consumer Credit
Protection Act.
``(2) Contents of the report.--In addition to the data
required to be collected pursuant to subsections (a) and (b),
each report prepared pursuant to paragraph (1) shall include
a description of any discernible trend, in the Nation as a
whole, in a representative sample of the 50 States (selected
with due regard for regional differences), and in each
consolidated metropolitan statistical area (as defined by the
Director of the Office of Management and Budget), in the cost
and availability of the retail banking services, including
those described in subsections (a) and (b) (including related
fees and minimum balances), that delineates differences
between institutions on the basis of the type of institution
and the size of the institution, between large and small
institutions of the same type, and any engagement of the
institution in multistate activity.
``(3) Submission to the congress.--The Board of Governors
of the Federal Reserve System shall submit an biennial report
to the Congress not later than June 1, 2009, and before the
end of each 2-year period beginning after such date.
``(d) Definitions.--For purposes of this section, the term
`insured depository institution' has the meaning given such
term in section 3 of the Federal Deposit Insurance Act, and
the term `insured credit union' has the meaning given such
term in section 101 of the Federal Credit Union Act.''.
(b) Conforming Amendment.--
(1) In general.--Paragraph (1) of section 136(b) of the
Truth in Lending Act (15 U.S.C. 1646(b)(1)) is amended to
read as follows:
``(1) Collection required.--The Board shall collect, on a
semiannual basis, from a broad sample of financial
institutions which offer credit card services, credit card
price and availability information including--
``(A) the information required to be disclosed under
section 127(c);
``(B) the average total amount of finance charges paid by
consumers; and
``(C) the following credit card rates and fees:
``(i) Application fees.
``(ii) Annual percentage rates for cash advances and
balance transfers.
``(iii) Maximum annual percentage rate that may be charged
when an account is in default.
``(iv) Fees for the use of convenience checks.
``(v) Fees for balance transfers.
``(vi) Fees for foreign currency conversions.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on January 1, 2009.
(c) Repeal of Other Report Provisions.--Section 1002 of
Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and section 108 of the Riegle-Neal Interstate Banking
and Branching Efficiency Act of 1994 are hereby repealed.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Pennsylvania (Mr. Kanjorski) and the gentleman from California (Mr.
Royce) each will control 20 minutes.
The Chair recognizes the gentleman from Pennsylvania.
General Leave
Mr. KANJORSKI. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks as to this legislation and to insert extraneous material
thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Pennsylvania?
There was no objection.
Mr. KANJORSKI. Mr. Speaker, I yield myself 4\1/2\ minutes.
(Mr. KANJORSKI asked and was given permission to revise and extend
his remarks.)
Mr. KANJORSKI. Mr. Speaker, I rise today in strong support of H.R.
6312. This bill will make a number of statutory improvements in the
laws concerning credit unions, banks and thrifts. It will also help
consumers assist businesses, ease paperwork burdens and promote
economic development in underserved communities.
In developing this bill, we have sought to identify an appropriate
balance between competing interests. I am
[[Page H5983]]
especially pleased that this legislation contains a number of important
provisions affecting credit unions. Some of these provisions have
previously passed the House, including the sections concerning the
treatment of loans made by credit unions to nonprofit religious
organizations, the authority of credit unions to invest in high-grade
securities and the governance of credit unions.
The bill also contains a number of new provisions based on the
proposals first set out in the Credit Union Regulatory Improvements
Act, or CURIA. The inclusion of these provisions in this bill is an
important step forward in our legislative debates about how best to
ensure that credit unions can better serve their members.
One provision found in CURIA and contained in this bill we are now
considering will permit all Federal credit unions, regardless of
charter type, to expand services to eligible communities that the
Treasury Department determines meets income, unemployment and other
distress criteria. This change fixes a drafting error made nearly a
decade ago when the Congress passed H.R. 1151, the Credit Union
Membership Access Act.
Like CURIA, we also make in this bill important and sensible
modifications to the definition of an ``underserved area.'' Moreover,
the legislation will allow credit unions to help underserved
communities in two other important ways:
First, at the request of the chairman of the Financial Services
Committee, it will permit credit unions to provide short-term,
unsecured loans to anyone in their field of membership. Second, it will
exempt loans made to small businesses operating in underserved areas,
consensus tracks from the existing member business lending caps.
Together, these two provisions will help to promote economic
development and will provide a stable source of funds for businesses
and individuals.
Another provision in this bill that permits financial institutions to
pay interest on business checking accounts will also help small
business growth. I have worked for more than a decade on this issue,
and have previously introduced legislation to implement the
recommendations first made by regulators in 1996.
Before closing, Mr. Speaker, I want to thank several of my colleagues
for their assistance in bringing this legislation forward today: The
gentleman from Massachusetts (Mr. Frank) provided essential guidance
and assistance in developing this legislative product. Additionally,
the gentleman from California (Mr. Royce) has stood with me for 5 years
as we have worked on a bipartisan basis to update the laws governing
credit unions. I am grateful for his support. The gentleman from Kansas
(Mr. Moore) also provided important contributions to the package before
us, especially regarding the reduction of paperwork burdens and the
collection of needed information about consumer banking services and
costs.
In sum, Mr. Speaker, this bill will help credit unions to provide
better services and to promote economic growth in underdeveloped areas.
Moreover, H.R. 6312 is, without question, the most significant piece of
credit union legislation considered in the House in nearly a decade.
H.R. 6312 will also appropriately ease regulatory burdens but will
still protect the interests of consumers. It also addresses some of the
concerns of banks and thrifts.
Because it is a balanced product, I urge all of my colleagues to
support H.R. 6312.
I reserve the balance of my time.
Mr. ROYCE. Mr. Speaker, I yield myself such time as I may consume.
I rise also in support of this legislation. This is the Credit Union,
Bank and Thrift Regulatory Relief Act that we have before us.
As our capital markets continue to change and continue to evolve, the
regulatory model overseeing our financial institutions must adjust as
well. This legislation today is a small example of this effort to
improve the regulatory structure overseeing the banks and the credit
unions and the thrifts. By reducing the regulatory burdens, H.R. 6312
allows credit unions and banks and thrifts to devote more resources
toward better servicing their customers and toward better serving those
who use these institutions.
Since the 108th Congress, as Mr. Kanjorski mentioned, he and I have
coauthored the Credit Union Regulatory Improvements Act in an effort to
modernize the regulatory model overseeing America's credit unions. We
have made tremendous strides over the years. That bill, which is called
CURIA now, has the support of 150 Members of this Chamber, and while
today's legislation may not go as far as some would like, it is
important that we not let the perfect be the enemy of the good. The
Credit Union, Bank and Thrift Regulatory Relief Act has several
worthwhile provisions which deserve consideration.
Among other things, this measure clarifies the intent of the Credit
Union Membership Access Act, which is that all federally chartered
credit unions should be allowed to serve underserved areas around the
country. By increasing the field of membership and by exempting member
business loans made in these underserved areas, this provision will
allow credit unions to extend credit to these areas. Following a
hearing in the Financial Services Committee, this provision was
adjusted to ensure those areas that benefit are, indeed, underserved.
Additionally, this bill would support the community development work
of nonprofit religious institutions by excluding such loans from credit
union business lending caps. I introduced legislation to do just this
back in 2003 with the intent of closing a longstanding liquidity gap
between creditors and nonprofit organizations.
I believe the other major provisions contained in CURIA and which are
not in today's legislation are important, and I believe they should not
be forgotten. In particular, I am going to continue to push to
modernize the capital requirements for our credit unions because we
must replace the current one-size-fits-all leverage capital requirement
with a more rigorous, two-part, net worth structure that will more
closely monitor actual asset risk. This will put credit unions' capital
requirements on par with those of other FDIC-insured institutions.
One hundred fifty Members of this Congress have signed on to CURIA,
and it will remain the ultimate objective for those of us trying to
bring the regulatory structure of overseeing credit unions into the
21st century.
Today's legislation joins regulatory relief for credit unions with
improvements geared towards thrifts and towards banks. Representative
Moore's reg relief bill, much of which has been incorporated into this
measure, will remove several unnecessary regulatory burdens faced by
these financial institutions, allowing them to better serve their
customers.
Among other things, the bill provides savings institutions with
greater lending flexibility by removing limits on small business and on
auto loans. The bill also increases the ability of savings associations
to invest in small business investment companies and to make commercial
real estate loans. Furthermore, this measure 6312 authorizes banks and
thrifts to pay interest on business checking accounts for their
customers.
Again, I would like to thank Chairman Kanjorski, and I would like to
thank Representative Moore for their work on this legislation. This
bill is an important step toward removing some of the unnecessary
regulatory burdens placed on our Nation's financial institutions.
I have no further speakers on this side, and I yield back the balance
of my time.
Mr. KANJORSKI. I yield 5 minutes to the gentleman from Kansas (Mr.
Moore).
Mr. MOORE of Kansas. I thank my friend, Mr. Kanjorski, for yielding
me time.
I also want to congratulate Mr. Kanjorski and Mr. Royce on their hard
work in crafting a bipartisan bill to provide reg relief to credit
unions.
As you know, the legislation before us today combines important
provisions from credit union regulatory relief legislation previously
introduced by Mr. Kanjorski and Mr. Royce with provisions from my
legislation H.R. 5841, the Bank and Thrift Regulatory Relief Act of
2008.
At a time when many businesses are having difficulty obtaining access
to credit, H.R. 5841 will provide important credit opportunities for
small- and medium-sized businesses. Among other
[[Page H5984]]
provisions, this legislation would remove the existing limits on small
business lending for thrifts, thereby enhancing the role of savings
associations as community leaders. The Homeowners Loan Act currently
caps the aggregate amount of commercial loans other than small business
loans at 10 percent of a savings association's assets, and it permits
commercial lending, including small business lending, of up to 20
percent of assets.
According to the Small Business Administration's Office of Advocacy,
smaller businesses have experienced difficulty in obtaining relatively
small loans from large commercial banks that set minimum loan amounts
relatively high. Savings associations are increasingly important
providers of small business credit and communities throughout the
country.
This change, Mr. Chairman, will allow savings associations to
continue to serve their small business customers and to further
diversify their assets while also providing businesses with greater
choice and flexibility to meet their credit needs.
Additionally, this proposal will significantly reduce the amount of
time financial institutions spend filling out paperwork, and it will
free up resources for the thousands of institutions on the front lines
of community lending.
For example, the legislation would provide relief to community banks
and financial institutions from requirements under the Gramm-Leach-
Bliley Act to provide annual privacy notices to their customers,
detailing their privacy policies and the way they share information.
While I have consistently advocated for increased protection of
sensitive financial information, there should be targeted exemptions
from this requirement to relieve the burden from small banks that do
not share information with their affiliates and that have not otherwise
changed their privacy policies.
{time} 2015
This change, Mr. Speaker, will save small businesses millions of
dollars in compliance costs while also protecting consumers from
unnecessary and duplicative notices.
The legislation also contains important provisions that would repeal
the prohibition against the payment of interest on business checking.
This prohibition was enacted during the Depression as part of the
Banking Act of 1933, to protect banks in the heat of competition from
offering interest levels on deposit balances that might be sustained
through risky investments.
In their 1996 report ``Streamlining of Regulatory Requirements,'' the
Federal banking regulators concluded, however, that the statutory
prohibition against paying interest on business accounts no longer
serves a valid public purposes. For example, large financial services
companies have devised products, such as ``sweep accounts'' that, in
effect, provide interest on deposit accounts, giving them a competitive
advantage over small community banks that may not have the capability
to offer such accounts.
In addition, most small business owners don't have the minimum
balances necessary to maintain a sweep account so they are forced to
keep vital cash in zero-interest checking accounts. Making this small
change would make a huge difference for small businesses.
Furthermore, every provision in this bill providing regulatory relief
for banks and thrifts has been approved previously by Congress in one
form or another. The bipartisan support for this bill shows just how
important it is for both businesses and consumers that Congress pass
this meaningful legislation.
America's financial services industry is the most effective and
competitive in the world and my proposal will help us stay out in
front. Reducing regulatory burdens on businesses and consumers is
simply the right thing to.
Mr. Speaker, I thank Chairman Kanjorski and the staff, and I look
forward to passage of this legislation today.
Mr. KANJORSKI. Mr. Speaker, I yield 1 minute to the gentleman from
Pennsylvania (Mr. Altmire).
Mr. ALTMIRE. I thank the gentleman.
Mr. Speaker, there are over 90 million members of America's credit
unions, including more than 168,000 in the district I represent. Each
of them will benefit from passage of this bill, which I strongly
support. It is a bipartisan piece of legislation that is an excellent
first step towards improving the regulatory framework for our Nation's
credit unions and banks.
Credit unions serve a broad and diverse membership, including many
low and moderate-income individuals who would otherwise be unable to
access the services provided by financial institutions. This bill will
allow Federal credit unions to better serve consumers and provide them
with greater access to financial products and services.
I ask my colleagues to support this commonsense and long-overdue
legislation.
Mr. KANJORSKI. Mr. Speaker, I yield to the gentleman from Kansas (Mr.
Moore) who wishes to enter into a colloquy.
Mr. MOORE of Kansas. As one of the cosponsors of this legislation, I
would like to engage its primary sponsor, you, Mr. Kanjorski, in a
colloquy on two questions related to section 111. This section concerns
the encouragement of small business development in underserved urban
and rural communities.
First, I have a question about the meaning of the provision that
exempts business loans made by credit unions in underserved areas from
the existing cap on member business lending. Is it the intent of this
provision that the proceeds from exempt loans will be used to support
business operations inside underserved areas?
Mr. KANJORSKI. Yes, the provision would exempt from the cap those
loans that are used to support business operations in an underserved
area in order to stimulate economic growth in these areas.
Mr. MOORE of Kansas. Thank you, Mr. Kanjorski, for that
clarification.
Section 111 of the bill also includes language that member business
loans in an underserved area underwritten by a credit union for a
business, or a local outlet of a business, operating on a nationwide
basis, shall not be eligible from exemption from the business lending
cap.
It is the phrase ``operating on a nationwide basis'' where I have a
question. For the purpose of this section, it would seem that a
business located in an underserved area that meets the other criteria,
like a small family-owned business but which has a Web site that sells
their goods to anyone who visits it, would not be treated as a business
operated on a nationwide basis for the purpose of this section, as the
economic benefit from those sales is going to that business in the
underserved area.
Have I correctly characterized the intent of this section?
Mr. KANJORSKI. Yes, you have. As the title of the section indicates,
the intent of this section is to promote economic growth by encouraging
small business development in underserved urban and rural communities.
We want to help businesses and business owners that have a presence
there, like a mom-and-pop operation with an Internet store. Moreover,
we have taken steps in the legislation to ensure that a locally owned
franchise that consists only of local operations shall not be treated
as a business operating on a nationwide basis.
Mr. MOORE of Kansas. Thank you for this clarification, Mr. Kanjorski.
I agree with your assessments.
Mr. KANJORSKI. Mr. Speaker, I have no further requests for time, and
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Pennsylvania (Mr. Kanjorski) that the House suspend the
rules and pass the bill, H.R. 6312.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill was passed.
A motion to reconsider was laid on the table.
____________________