[Congressional Record (Bound Edition), Volume 150 (2004), Part 4]
[House]
[Pages 4581-4615]
[From the U.S. Government Publishing Office, www.gpo.gov]




            FINANCIAL SERVICES REGULATORY RELIEF ACT OF 2003

  The SPEAKER pro tempore (Mr. Walden of Oregon). Pursuant to House 
Resolution 566 and rule XVIII, the Chair declares the House in the 
Committee of the Whole House on the State of the Union for the 
consideration of the bill, H.R. 1375.

                              {time}  1119


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 1375) to provide regulatory relief and improve productivity for 
insured depository institutions, and for other purposes, with Mr. 
LaHood in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from Ohio (Mr. Oxley) and the gentleman 
from Massachusetts (Mr. Frank) each will control 30 minutes.
  The Chair recognizes the gentleman from Ohio (Mr. Oxley).
  Mr. OXLEY. Mr. Chairman, I yield myself 5 minutes.
  Mr. Chairman, I am pleased to bring to the floor today H.R. 1375, 
bipartisan legislation making a number of changes to Federal banking, 
thrift, and credit union laws that will enable these sectors of the 
financial services industry to operate more productively and provide a 
higher level of service to their customers.
  I want to begin by recognizing the efforts of the principal sponsor 
of this legislation, a valued member of the Committee on Financial 
Services, the gentlewoman from West Virginia (Mrs. Capito), as well as 
her primary democratic cosponsor, the gentleman from Arkansas (Mr. 
Ross). In putting together this legislation, the gentlewoman from West 
Virginia (Mrs. Capito) and the committee consulted extensively with the 
Federal banking and credit union regulators, as well as affected 
private sector parties, to fashion a package that, by removing unneeded 
or outdated legal restrictions, helps to maintain the competitive 
standing of the U.S. banking and financial services system that has no 
equal in the world.
  In the aftermath of the September 11 terrorist attacks on America, 
President Bush and this Congress have called upon the financial 
services industry to play a major role in the effort to starve al Qaeda 
and like-minded organizations of the funds they need to inflict terror 
on the civilized world. Title III of the USA PATRIOT Act enacted 
shortly after the September 11 attacks imposes a host of new mandates 
and due diligence requirements on financial institutions designed to 
identify and block the movement of terrorist funds through the global 
financial system. Committee on Financial Services has conducted 
extensive oversight on the implementation of title III, and I think I 
speak for many members of the committee in applauding the seriousness 
and sense of commitment with which the financial services industry has 
gone about fulfilling the front-line responsibilities it has been asked 
to assume in the financial war against terrorism.
  Shouldering these burdens is not without significant costs, of 
course. The changes made by the PATRIOT Act require banks and other 
depository institutions to devote significant compliance resources to 
monitoring and examining transactions, verifying the identities of new 
customers, and responding to inquiries by law enforcement authorities 
seeking to track terrorist finances through the U.S. banking system. 
Both as a way of offsetting these new expenses and freeing institutions 
to devote sufficient resources to PATRIOT Act compliance and serving 
their customers, the committee began during the last Congress to try to 
identify regulatory or statutory requirements that could have outlived 
their useful purpose and could be eliminated without any adverse 
affects on the safety and soundness of the banking system or on basic 
consumer protections. H.R. 1375 is the end result of that process.
  The legislation, which enjoyed bipartisan support in the Committee on 
Financial Services, reflects significant contributions from several 
members of the committee. For example, the bill incorporates 
legislation authored by the gentleman from California (Mr. Ose) which 
would permit credit unions to offer check-cashing and wire transfer 
services to individuals who are not members of the credit union, but 
are within its field of membership, thereby promoting alternative 
sources of banking services for many low- and moderate-income 
Americans. An important amendment offered in committee by the gentleman 
from Oklahoma (Mr. Lucas) would greatly improve coordination between 
home and host State supervisors of State-chartered banks that operate 
branches in multiple States.
  I also want to commend the gentleman from Ohio (Mr. Gillmor) and the 
ranking member, the gentleman from Massachusetts (Mr. Frank) for their 
hard work in crafting a compromise on an issue that was the subject of 
spirited debate in the committee: the extent to which certain 
commercially owned industrial loan companies, which are insured 
depository institutions chartered in a handful of States, should be 
permitted to exercise the new branching authority provided for in 
section 401 of the bill. I will offer a manager's amendment later today 
that incorporates the good work of the gentleman from Ohio (Mr. 
Gillmor) and the ranking member on this difficult issue.
  Finally, I want to thank the gentleman from Alabama (Mr. Bachus), the 
chairman of the Subcommittee on Financial Institutions and Consumer 
Credit, for quarterbacking this effort in his subcommittee and helping 
to shepherd it through the full committee.
  Thanks to hard work of the gentlewoman from West Virginia (Mrs. 
Capito) and the gentleman from Arizona (Mr. Ross) and many other 
members of our committee, the House will have an opportunity to vote 
later today on legislation that improves the productivity and 
efficiency of our financial services industry. A vote for

[[Page 4582]]

this bill is a vote to allow banks, thrifts, and credit unions to 
channel their resources away from complying with unneeded regulatory 
mandates and toward making loans and providing other financial products 
and services to consumers and to their small business customers, which 
can only help fuel economic growth in local communities across this 
country.
  I strongly urge my colleagues to support this bipartisan piece of 
legislation.
  Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, I want to express my appreciation to the chairman of 
the committee and the chairman of the subcommittee, because this is 
another example of where we have been able to work in a cooperative 
way. We do not agree on everything, but our method of operation allows 
us to refine our disagreements and to present to the House some 
legitimate policy disagreements, but in a form and in a context that 
does not interfere with our ability to go forward where there is 
consensus.
  There will be two amendments that we will be debating. The gentleman 
from Alabama will offer one, which I plan to oppose, that would reject 
a request from the FDIC to make it easier for them to proceed against 
people in the banking area that they think have been negligent. The 
gentleman from New York (Mr. Weiner) will be offering an amendment that 
I think protects consumers. I feel strongly in favor of that one. Other 
than that, I believe we have agreement at the committee level. I want 
to emphasize, and I must say I am very hopeful that the Weiner 
amendment will be adopted, but we will have to see what happens.
  I just want to reiterate my view that this reflects what I think 
ought to be our approach; namely, we start with respect for the market 
and an understanding that the free market is the best way to make our 
economy prosper. Particularly in the financial area that our committee 
has jurisdiction over, the role of the institutions as intermediaries 
in garnering the financial resources that are then made available to 
the people who do the production of goods and services, that is very 
important; and it is our obligation to make sure that that can be done 
with the maximum efficiency.
  At the same time we recognize, many of us, that the market is not 
perfect. It does well what it is supposed to do, but there are areas of 
importance in our life that the market does not deal with. There are 
also inevitable tendencies in any institution, government, the private 
sector, the nonprofit sector, to do things that if there were 
constraints, it should not do. That does not mean that they are evil or 
that they are dysfunctional; it just means that human nature being what 
it is, no entity ought to be able to function without some restraints.
  So our job is to provide for consumer protection in particular, which 
the market itself would not automatically do. Let me check that. In 
some areas I think we can rely on the market in the consumer area. 
There is a major merger, or a major sale in New England going on now 
where Fleet Boston is being bought by Bank of America. I have worked 
very closely with a number of entities that are advocates for low- and 
moderate-income people in the area of housing and in the area of small 
business and community development, because I do not think the market 
itself will take care of those. In other areas, in customer service, I 
think you can rely more on the market. There are competing institutions 
that will try to steal customers away. That is a good thing because, in 
the area of customer service, there will be competition. In areas where 
we are talking about lower-income people, competition does not do it, 
and we have to try to intervene.
  What we need to do is to recognize the importance of regulation but, 
at the same time, make sure that we do not regulate unnecessarily, 
because there are regulatory costs. I do not object to regulatory costs 
if they are essential to achieving an important public purpose. Where 
they can be shown not to have that relationship, they ought to be 
removed. We ought to also try to pick among various regulatory 
approaches until we get the one that gives us the most benefit for the 
least cost. This bill is, on the whole, an effort to do that.
  The chairman mentioned that in the controversial area of industrial 
loan corporations, we heard the forceful statements of the gentleman 
from Iowa who thinks that we should be more restrictive. We have 
Members who represent particularly States where the ILCs have played a 
major role, California and Utah in particular, who are represented in 
our committee, who think we have been too restrictive. The gentleman 
from Iowa (Mr. Gillmor) took the lead, and I was glad to work with him, 
in using a formula we had previously adopted in the Congress; namely, 
that to be a financial institution you should be 85 percent financial 
in your revenues, and we have used that as a screen for the additional 
entities that might be entering the ILC field. I think that is a 
reasonable compromise. I think that will protect the public interests, 
while continuing to allow consumer choice, and I congratulate the 
chairman and others for creating the context in which we could work 
that out.
  I know we will be proceeding to debate on a couple of controversial 
issues and, as I said, I think this is a good overall bill, but Members 
may be waiting to see what happens on some of the amendments to make 
their final judgment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. OXLEY. Mr. Chairman, I am pleased to yield 5 minutes to the 
gentleman from Alabama (Mr. Bachus), the chairman of the Subcommittee 
on Financial Institutions and Consumer Credit.
  Mr. BACHUS. Mr. Chairman, I thank the chairman for yielding me this 
time.
  Mr. Chairman, the financial services industry spends a great deal of 
time and a great deal of money every year complying with outdated and 
ineffective regulations. That is money that could be loaned to 
consumers and industries to buy new cars, new homes, new factories, new 
businesses, and that is what this bill is all about. It is also, as the 
chairman correctly said, delivering on a promise that this Congress 
made these same institutions, when we imposed title III of the PATRIOT 
Act, and also the Sarbanes-Oxley accountability measures. We told them 
that we would come and follow that with legislation to compensate them 
for that cost.

                              {time}  1130

  And in that regard, as the chairman so well put, I want to commend 
the financial institutions in this country for helping starve al Qaeda 
and other terrorist organizations. They have done an excellent job of 
cutting off the flow, not only to the terrorist organizations but also 
to narcotics traffickers and other criminal organizations, which is 
another benefit of these new money laundering legislations that this 
Congress put on the financial institutions. So it has had a very 
positive effect even on some areas that we might not have anticipated.
  Secondly, I would like to commend the ranking member, the gentleman 
from Massachusetts (Mr. Frank). I would like to commend him for working 
closely on this legislation. We talk about bipartisanship in this body. 
This committee, under the chairman, the gentleman from Ohio (Mr. Oxley) 
and the ranking member, the gentleman from Massachusetts (Mr. Frank), 
has achieved on more than one occasion, on many occasions, a bipartisan 
spirit of cooperation which I think ought to be the model for other 
committees in the Congress as a whole. So I commend both these 
gentlemen.
  I would like to commend the two sponsors of this bill, the 
gentlewoman from West Virginia (Mrs. Capito). She has done an excellent 
job. I would also like to commend the Democratic member of the 
committee who offered this legislation, and that is the gentleman from 
Arkansas (Mr. Ross).
  Finally, I would like to call special attention to the legislation of 
the gentleman from Oklahoma (Mr. Lucas),

[[Page 4583]]

the provisions within this legislation which will greatly improve the 
coordination between home and host State supervisors of State-chartered 
banks. When State-chartered banks branch beyond State lines, there is a 
great need for the bank supervisors to coordinate in the supervision. 
And I think this is a long overdue provision.
  I would also like to commend the gentleman from Massachusetts (Mr. 
Frank) and the gentleman from Ohio (Mr. Gillmor) for working out, I 
think, an excellent compromise on this ILC provision, their compromise, 
the widespread almost unanimous support of the committee. There are 
Members who this morning have protested it.
  The gentleman from Iowa (Mr. Leach) had offered on another bill the 
way he wanted to address this. The committee on the bank interest bill 
actually rejected that idea, competing idea, by a vote of 50 to 8. So 
this has been an issue that has been debated on prior occasions.
  Finally, I would like to say that this is a regulatory relief bill, 
not a regulatory burden bill. For that reason, I will be offering an 
amendment to take and strike section 614 which equates independent 
contractors who do business with the bank, whether they be attorneys, 
whether they be accountants, whether they be appraisers, whether they 
be real estate agents, all sorts of independent contractors, which 
equates them with having the same knowledge of banking operation as 
insiders. That is simply not the case. And, in fact, I believe strongly 
that in these cases they ought to have the right to a jury trial, to a 
full hearing.
  But if we do not strike section 614, any accountants, any attorney, 
any realtor, any appraiser who does business with the bank, will be 
subjected to having the same knowledge as an insider. Simply not the 
case. I think we all agree they do not have that same knowledge. And I 
oppose the Weiner amendment which is a regulatory burden amendment.
  Mr. Chairman, I rise in strong support of H.R. 522, the Financial 
Services Regulatory Relief Act of 2003.
  I want to begin by thanking Chairman Oxley for the tremendous 
leadership he has shown in steering this complex bill through the 
legislative process. I also want to thank the ranking member of the 
committee, Mr. Frank, for his support of this important piece of 
legislation.
  This bipartisan legislation, introduced by our colleagues on the 
subcommittee, Mrs. Capito and Mr. Ross, reflects a commonsense approach 
to easing regulatory burdens imposed on our nation's depository 
institutions. H.R. 1375 is largely a product of recommendations that 
the committee has received over the last several years from the Federal 
and State financial regulators.
  The legislation has strong bipartisan support and was approved by the 
Financial Services Committee by a unanimous voice vote. It is supported 
by a host of interested parties, including the Financial Services 
Roundtable, America's Community Bankers, the National Association of 
Federal Credit Unions, and the Credit Union National Association.
  The banking industry estimates that it spends somewhere in the 
neighborhood of $25 billion annually to comply with regulatory 
requirements imposed at the Federal and State levels. A large portion 
of that regulatory burden is justified by the need to ensure the safety 
and soundness of our banking institutions; enforce compliance with 
various consumer protection statutes; and combat laundering and other 
financial crimes.
  However, not all regulatory mandates that emanate from Washington, 
DC, or other State capitals across the country are created equal. Some 
are overly burdensome, unnecessarily costly, or largely duplicative of 
other legal requirements. Where examples of such regulatory overkill 
can be identified, Congress should act to eliminate them.
  The bill that Congresswoman Capito and Congressman Ross have 
introduced--and that I am proud to cosponsor along with Chairman 
Oxley--contains a broad range of constructive provisions that, taken as 
a whole, will allow banks and other depository institutions to devote 
more resources to the business of lending to consumers and less to the 
bureaucratic maze of compliance with outdated and unneeded regulations. 
Reducing the regulatory burden on financial institutions will also 
lower the cost of credit for consumers.
  In closing, let me once again commend Mrs. Capito and Mr. Ross for 
this important legislative as well as the full committee chairman, Mr. 
Oxley. The chairman has demonstrated a strong commitment to getting 
regulatory relief legislation enacted this year. I look forward to 
working with him to help accomplish that objective.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield such time as he may 
consume to the gentleman from New York (Mr. Meeks), a very hard working 
member of this committee.
  Mr. MEEKS of New York. Mr. Chairman, let me begin by congratulating 
the leadership, the gentleman from Ohio (Mr. Oxley) and the ranking 
member, the gentleman from Massachusetts (Mr. Frank) on this great 
bill.
  It proves that when Democrats and Republicans sit down and talk and 
work together, we really can come to a consensus. And the leadership of 
this committee should be applauded in a way that this bill, this 
important bill has gone through the committee. And I thank both the 
ranking member and the chairman.
  My position has never been to favor one depository institution 
charter over another but, instead, to support policies that give each 
charter the best opportunity to be competitive and improve service 
delivery to their business and individual constituents.
  It is my assertion that H.R. 1375, the regulatory relief bill, does 
just that for national banks, savings institutions, and credit unions, 
all of whom are vital to the financial health of this Nation and the 
provision of financial services to businesses and individuals 
nationwide.
  For national banks, the bill eases certain restrictions related to 
directors, provides for flexibility in declaring dividends, and makes 
it easier to expand through intrastate branching or mergers with State 
banks.
  For savings institutions, the bill provides more flexibility to 
provide automobile loans and leases for personal use. It also 
eliminates the limitation on small businesses, lending based on 
percentage of assets. These changes, among others, will greatly allow 
savings institutions to increase the diversity of their lending 
portfolios.
  Federally chartered credit unions will be able to purchase and hold 
for their own account highly rated investment securities. They will be 
able to provide check cashing and money transfer services to nonmembers 
within their field of membership.
  These changes, along with others, such as easing the process for 
voluntary mergers, will help credit unions diversify their portfolios 
and provide more services to individuals and the communities that they 
serve.
  The ever-changing dynamics of the financial service industry demands 
that from time to time this committee review the existing laws and take 
action where required, not just to increase the laws as we often do, 
but to adjust and even eliminate archaic laws that may be hindering the 
success of our financial industry. I believe that this is just what we 
have done with this regulatory bill, a bill that has a little bit of 
something for everyone.
  Mr. OXLEY. Mr. Chairman, I yield 4 minutes to the gentlewoman from 
West Virginia (Mrs. Capito), the lead sponsor of this important 
legislation.
  Mrs. CAPITO. Mr. Chairman, I want to thank my colleague, the 
gentleman from Arkansas (Mr. Ross), for sponsoring the Regulatory 
Relief Act of 2003 with me. He has been very instrumental in bringing 
this much-needed legislation to the floor. I also want to thank the 
gentleman from Alabama (Mr. Bachus) and the ranking member, the 
gentleman from Massachusetts (Mr. Frank), and especially the gentleman 
from Ohio (Mr. Oxley) for shepherding this bill through the process, it 
has been a process, and their strong leadership on the committee.
  With the passage of the Gramm-Leach-Bliley Act, the U.S. PATRIOT Act, 
and the Sarbanes-Oxley Act, Congress has imposed sweeping reforms and 
multiple new mandates on the financial services industry. While I 
firmly believe that these new laws have strengthened this important 
sector of our economy, such sweeping reforms do not come without a 
cost, a cost that is ultimately paid for by every American who writes a 
check, saves for their retirement, or simply purchases groceries with a 
credit card.

[[Page 4584]]

  The gentleman from Arkansas (Mr. Ross) and I introduced this bill to 
restore regulatory balance. While Federal regulations play an important 
role in protecting consumers, instilling confidence and ensuring a 
level playing field, overregulation can depress innovation, stifle 
competition, and actually retard our economy's ability to grow.
  Periodically reviewing and questioning the regulations put into place 
over time will ensure that as industries and technologies change, so 
too will the rules that govern them.
  This bipartisan legislation will roll back several outdated and 
burdensome mandates while also providing new commonsense provisions 
that together will benefit the financial services industry and their 
consumers.
  To promote efficiency our bill allows the FDIC the flexibility to 
rely on new technology to store records electronically, streamlines the 
merger application process, and gives examining agencies the discretion 
to adjust the exam cycle so their resources can be used most 
efficiently, among very many other revisions in the regulatory process.
  We provided enhanced consumer protection by prohibiting a person from 
working at a bank who has been convicted of a breach of trust and by 
allowing interagency data sharing to ensure that a lack of information 
does not result in malfeasance.
  H.R. 1375 strikes a balance that will help the financial services 
community thrive, compete, and offer the best services to their 
customers. Again, I want to thank the ranking member and our chairman 
and the gentleman from Alabama (Mr. Baucus) and the other Members for 
the bipartisan nature of which this bill has been brought to the floor.
  I urge my colleagues' support.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 5 minutes to the 
gentlewoman from New York (Mrs. Maloney), a very able member of our 
subcommittee, the ranking member of the Subcommittee on International 
and Domestic Monetary Policy.
  Mrs. MALONEY. Mr. Chairman, I thank the gentleman from Massachusetts 
(Mr. Frank) for yielding and for his leadership.
  I rise in support of the financial services regulatory relief 
legislation. This bill is the subject of several years of work and I 
thank the sponsors, the gentlewoman from West Virginia (Mrs. Capito) 
and the gentleman from Arkansas (Mr. Ross) for their hard work.
  I especially want to thank them for the inclusion of an amendment 
that I offered in committee with my colleague, the gentleman from 
Oklahoma (Mr. Lucas). This amendment prohibits nonchartering States 
from unilaterally imposing a discriminatory fee against State-chartered 
banks from other States. It also strengthens cooperative agreements 
among the States for supervision of multistate institutions by giving 
Federal recognition to the cooperative agreements and requiring 
chartering States to follow them. This language is very important for 
preserving the vitality of our dual banking system.
  As for amendments that will be offered today, I want to thank my 
colleague, the gentleman from New York (Mr. Weiner) for his checking 
amendment. He is a great consumer advocate. I have some concerns about 
how the amendment will work in practice, and I look forward to working 
with him on this as the process goes forward.
  I also want to indicate my strong support for the Kelly-Toomey 
amendment. This language tracks legislation that the gentlewoman from 
New York (Mrs. Kelly) and I passed on the floor of this Congress 
earlier this year in the Business Checking Freedom Act.
  This language builds on the important modernization of financial 
services that Congress has worked on in recent years. It lifts the 
prohibition on the payment of interest on business checking accounts 
after a 2-year phase-in. During the phase-in, banks may increase sweeps 
to interest-paying accounts to 24 intervals per month.
  The prohibition on interest on both consumer and business accounts 
was enacted during the Great Depression. At the time it was enacted to 
limit competitive pressures to pay higher interests that were feared 
could lead to bank failures. Today given the global nature of financial 
services, interstate banking and many advances in technology, interest 
payment limits only distort competition and force businesses to seek 
out alternative interest bearing opportunities.
  The prohibition on paying interest on consumer checking accounts was 
repealed by Congress more than 20 years ago and has not increased any 
concern about safety and soundness. Today the House, once again, takes 
an important step forward in offering this same benefit to the business 
community.
  Importantly, this language will disproportionately benefit small 
businesses. Small businesses must keep money in checking accounts to 
meet payrolls and pay expenses. They are less likely to have complex 
financial arrangements that will allow them to get around interest 
restrictions.
  The legislation also allows the Federal Reserve to pay interest on 
sterile accounts. These are reserves private banks hold at the Federal 
Reserve which the Fed can manipulate as a tool of monetary policy. And 
this provision is endorsed by Federal Reserve Chairman Alan Greenspan.
  I support the legislation. I urge my colleagues to support it.
  Mr. OXLEY. Mr. Chairman, I yield 5 minutes to the gentleman from Iowa 
(Mr. Leach), the distinguished former chairman of the committee.
  Mr. LEACH. Mr. Chairman, let me just say this bill has a number of 
very commonsense provisions, but in the name of a relatively large 
number of minor commonsense issues, there is more than a small measure 
of regulatory mischief.
  This bill is about less regulation but it is also about more 
imbalance.

                              {time}  1145

  It empowers a hitherto largely unknown charter in America called 
Industrial Loan Companies to have all the powers of commercial banks 
and, added with one of the amendments that is likely to pass today, a 
power to not only branch in all 50 States, but to do checking in a 
business kind of way, something ILCs were not hitherto empowered to do.
  We will be giving five States in America the right to offer a charter 
with less regulation than 45 States. We will be putting an inequity in 
law that relates to this charter versus all others; and then we are 
going to be putting in a very intriguing way inequity between the 
charters, that is, those that have existed for a while will have more 
rights than those industrial loan companies that will be empowered 
later.
  I would only like to stress to my colleagues, because there is some 
misunderstanding here, that one of the theories of the grandfather is 
to block a particular institution from getting an industrial loan 
company charter with full powers, which by the way indicates that those 
full powers are very significant. That particular company is unpopular 
with some of its competitors in the financial services industry. It is 
unpopular with organized labor. So there is a grandfather provision 
against that company; but the intriguing aspect of it is, it is a very 
enfeebled grandfather provision.
  It is enfeebled because it gives the States the power of 
interpretation. There is no tie-in to Federal statute; and so any new 
company can get a new ILC charter, can buy an existing ILC charter. 
Then there are rules about changing control, but States have different 
change-of-control statutes. Some change of control is 25 percent 
ownership; some over 80 percent ownership. So a company can buy an 
existing charter and take on all the powers of an ILC under the pre-
grandfather provisions, even though there appear to be in this statute 
certain restrictions, for example, that relate to a percentage that is 
financial in nature of their current operating business. All this is 
being interpreted by State government which has a vested interest to 
give charters rather than to stop charters because it means more jobs 
for their States.
  The history of the ILC is that they were small institutions until 
1987 when Congress, without much forethought,

[[Page 4585]]

exempted them from the Bank Holding Company Act; and so the largest ILC 
charter had been less than $400 million, now the largest is $60 
billion, and there are eight above a billion in size. If we give ILCs 
all the powers contemplated in this bill, there will be a pell mell run 
to the ILC charter.
  This will sweep assets from 45 States to five States. It will breach 
commerce and banking in ways that have never been breached in modern 
day, and it will create great pressure to move grandfather dates and 
change existing statute in other ways because of the obvious inequities 
that will almost immediately develop within the ILC charter itself.
  So I would like to suggest to this body that this was something that 
could be handled very simply, credibly, and that is simply to put ILCs 
like most other financial institutions of any size under the Bank 
Holding Company Act; but because of insider power, that amendment was 
not even allowed to be considered on this floor, and I cannot tell my 
colleagues that it would have passed. I can tell my colleagues that 
Chairman Greenspan thinks it would be very important to the security of 
the United States and, in many different ways, not only due to the fact 
that American ILCs can operate without oversight of the holding company 
but foreign companies can have ILCs.
  So the FDIC, which is a very credible regulator, can look at the 
bank; but let us say a foreign company in Latin America or in Russia 
gets Utah to give them a charter. They create jobs in Utah. They could 
operate the bank credibly, but they could also be money laundering from 
their host company abroad, and so this is an invitation as a charter to 
greater money laundering.
  I frankly urge my colleagues to think twice; and, unfortunately, I am 
in a position of suggesting opposing the bill.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield 5 minutes to the 
gentleman from Vermont (Mr. Sanders), a member of the committee, who is 
the ranking member of the subcommittee which has jurisdiction over this 
bill.
  Mr. SANDERS. Mr. Chairman, I thank the gentleman from Massachusetts 
for yielding me the time.
  Mr. Chairman, among other things, the Financial Services Regulatory 
Relief Act would make it easier for some of the biggest banks and other 
financial institutions in this country to merge. At a time in America 
where big institutions are becoming bigger and small institutions are 
being driven out of business, I think we have to ask whether this is a 
good idea. At a time in America when the people at top are making out 
like bandits, the middle class is shrinking and poverty is increasing. 
I think we have to ask whether it is proper for the United States 
Congress to give ``regulatory relief'' to huge multibillion dollar 
institutions. I think not.
  Specifically, this bill would reduce the Federal review process for 
bank mergers from 30 days to a mere 5 days. This bill would allow the 
Officer of Comptroller Currency to waive notice requirements for 
national bank mergers located within the same State. This bill would 
end the prohibition of out-of-state banks merging with in-state banks 
that have been in existence for less than 5 years. This bill also gives 
Federal thrifts the ability to merge with one or more of their 
nonthrift affiliates; and, finally, this bill would eliminate certain 
reporting requirements for banks' CEOs in regard to inside-lending 
activities.
  Mr. Chairman, I have serious concerns about the provisions in this 
bill; but equally important, I have major concerns about what this bill 
is not addressing, what it is not addressing, and what the American 
people and consumers all over this country are deeply concerned about.
  For example, while the prime rate is at a historic low of 4 percent 
and the Federal Reserve has lowered the Federal funds rate 13 times to 
a mere 1 percent; credit card issuers are making record-breaking 
profits by ripping off consumers through outrageously high interest 
rates of 25 to 30 percent. How come in the midst of giving the ability 
of large banks to become larger, we forgot about demanding that 
interest rates go down so that people who already are hurting are not 
forced to pay usurious interest rates. I guess we just forgot about 
that.
  Mr. Chairman, at a time when banks are making record-breaking $7.3 
billion in late fees they collect from consumers, another major rip-
off, there is nothing in this bill that would bring down these 
excessive fees. I guess we forgot about that issue as well.
  Mr. Chairman, every Member of this Congress understands that 
throughout America we are hemorrhaging decent-paying jobs in 
manufacturing and in information technology; and one of the areas, one 
of the industries where we are hemorrhaging good-paying jobs is in the 
financial services industry. No mention, no mention in this bill of a 
concern that with these mergers comes the loss of decent-paying jobs. 
Maybe when we talk about financial services, we might want to talk 
about the ordinary people who do business in banks rather than just the 
needs of the CEOs who make huge compensation packages running these 
banks.
  Mr. Chairman, while credit card issuers are ripping off middle class 
Americans by charging sky-high interest rates and outrageous fees, 
credit card CEOs are laughing all the way to the bank; and mark my 
words, this will be an issue that the American people will demand this 
Congress to address. We cannot ignore the fact that scam after scam is 
forcing hard-pressed American people to pay 20, 25 percent a year in 
interest rates on their credit card. That issue will come before the 
United States Congress.
  In the midst of all of these rip-offs, if I may use that word, the 
compensation packages of the CEOs are going sky high. Over the past 5 
years, the CEO of Citigroup made over $500 million in total 
compensation and the CEO of Capital One made over $169 million in total 
compensation. When we deregulate these industries, maybe we want to say 
a word on that issue as well.
  Bottom line is that this legislation works on behalf of the largest 
financial institutions. It does not work on behalf of consumers, and I 
respectfully ask for a ``no'' vote on it.
  Mr. OXLEY. Mr. Chairman, I am now pleased to yield 3 minutes to the 
outstanding gentleman from Ohio (Mr. LaTourette), a valued member of 
the committee.
  Mr. LaTOURETTE. Mr. Chairman, I want to talk about some of the 
smaller financial institutions in America. It has been about 6 years 
since the Congress passed the Credit Union Membership Access Act, a 
piece of legislation that forever changed the nature and the way the 
credit unions do business in this country, and I want to congratulate 
the gentleman from Ohio (Chairman Oxley) and the gentleman from 
Massachusetts (Ranking Member Frank) for including in this regulatory 
relief bill provisions that benefit credit unions once again.
  Mr. Chairman, nearly 84 million Americans enjoy low-cost financial 
services at their credit unions. It is imperative that we allow credit 
unions to continue to change with the ever-expanding financial 
marketplace, just as we do with the banking and the thrift industry.
  Credit unions do an excellent job of serving their members, a 
tradition we need to help protect and preserve. Sometimes the members 
of credit unions will be the men and women who are serving our country 
valiantly in the Armed Forces.
  The bill being considered today would allow credit unions to build 
their own buildings on DOD facilities and to pay a nominal fee for 
rent, a practice which had been in effect but has recently been 
changed. Credit unions at DOD facilities provide our troops with the 
tools for money management so that while they are away defending our 
great Nation, their personal financial dealings back at home are not 
ignored. This may not always be profitable; but with credit unions, it 
is not a matter of profit. It is a matter of people. As member-owned 
not-for-profit entities, credit unions serve their members to the 
fullest capacity.
  Another provision that I want to highlight would allow credit unions 
who convert to community charters to continue to serve their select 
employee groups who were added before their

[[Page 4586]]

conversion. As we are all aware, with today's troubled economic times, 
there are times when a credit union that has been associated with a 
plant or an industry and it is closed down or the jobs are lost, the 
credit union is lost as well. The credit unions that serve the people 
whose jobs are gone and whose plants are closed, rather than also 
shutting down and leaving, are instead converting to community 
charters.
  This accomplishes two things: One, it would allow the institution to 
stay open and bring in new members from the community; and, two, it 
allows those workers to continue their important relationship with 
their credit union.
  Mr. Chairman, again I want to congratulate the gentleman from 
Massachusetts, ranking member Frank, and Chairman Oxley for crafting 
this bill, and I want to congratulate the trades that represent the 
credit unions in this town for making sure that H.R. 1375 has 
provisions with real teeth that benefit the credit union industry.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  Before yielding time to one of the coauthors of the bill, the 
gentleman from Arkansas, who has done a lot of work on this, I did want 
to respond to the gentleman from Vermont.
  Frankly, I was somewhat surprised to hear him raise some of those 
issues because he is, as I noted, the ranking member on the minority 
side of the subcommittee of jurisdiction; and I must say that had he 
raised some of them when we were considering this bill, he might not 
now feel they were being ignored.
  One of them, of course, is not germane to this bill, the credit card 
question. That was debated and voted on in the committee last year, but 
some of the other issues he raised now, I just have to say that it is a 
little late to come to the floor, when the bill is already before us, 
and raise issues, particularly when you are the ranking member of the 
subcommittee and you have hearings and you have markup in subcommittee 
and you have markup in full committee.
  In one case I would note he objected to the fact that this bill 
reduces the period during which the Federal Government can wait and 
study a merger for antitrust. Yes, I agree that that is a problem. We 
debated that one, in fact, in committee. It was the gentlewoman from 
California (Ms. Waters) who raised that; and I appreciate the fact that 
because she, having raised it, stuck with it, she has worked with the 
majority, and an amendment that will put that back up to 15 days, 
instead of 5, I believe, is going to be accepted.
  So I would like to inform the gentleman, he has left the floor, that 
there was, in fact, an agreement to address one of those issues that he 
raised.
  He also raised the question of executive compensation, and I have 
been working with the very good staff that we have on our side of the 
committee to deal particularly with the aspect of executive 
compensation, top-level executive compensation, that is, the perverse 
incentive that stock options give to the top people.

                              {time}  1200

  So that one I assure him is going to be dealt with. But I do not 
think it makes sense to deal with it only for financial institutions. I 
think it should be dealt with across the board.
  The committee is going to remain in business, and I have to say to my 
now absent colleague from Vermont that, as ranking member, he is fully 
positioned to raise these, and many of the other members would be glad 
to work with him, as we were able to work with the gentlewoman from 
California when she took a very serious look at this and accomplished 
something.
  Mr. Chairman, I yield such time as he may consume to the gentleman 
from Arkansas (Mr. Ross), who is a cosponsor of this bill.
  Mr. ROSS. Mr. Chairman, I am pleased to join my colleagues, the 
gentleman from Ohio (Mr. Oxley), the chairman, and the ranking member, 
the gentleman from Massachusetts (Mr. Frank), and the gentlewoman from 
West Virginia (Mrs. Capito) as a cosponsor of this legislation.
  Mr. Chairman, I live in a small rural town, I am a small business 
owner, and I recognize the limited resources that exist for small 
businesses. H.R. 1375, the Financial Services Regulatory Relief Act 
will assist financial institutions in my congressional district, and 
all across America for that matter, by easing some of the regulatory 
demands they have, which will allow them to focus more on service to 
their customers.
  The Committee on Financial Services held a hearing on this bill with 
representatives of each of the regulatory agencies responsible for 
oversight of these institutions. Each presented their perspectives on 
the legislation and the need for implementation. I appreciate the 
efforts of my colleagues and the committee staff who have worked 
together since the full committee markup to make further improvements 
to ensure the final bill reflects a true bipartisan product; and, 
indeed, it does. It is what I call a piece of commonsense legislation.
  This legislation is well balanced for all financial institutions, 
both large and small; both rural and urban. I believe it is imperative 
that Congress continues to work to help strengthen our struggling 
economy by making sure that our financial institutions have the 
necessary tools they need to operate more effectively and more 
efficiently. They are an integral part of our community's economic 
development and need legislation like H.R. 1375 to alleviate some of 
the burdens that impede their services to the public.
  Again, I thank my colleagues, Chairman Oxley, Ranking Member Frank, 
and the gentlewoman from West Virginia (Mrs. Capito) for all of their 
hard work on this, and I urge my colleagues to support this 
legislation, H.R. 1375.
  Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume to 
also recognize the leadership of the gentleman from Arkansas for being 
the lead Democrat sponsor on this legislation. We appreciate his hard 
work on this endeavor.
  Mr. Chairman, I yield 3 minutes to the gentleman from California (Mr. 
Royce), a valuable member of the committee.
  Mr. ROYCE. Mr. Chairman, I thank the gentleman for yielding me this 
time, and I rise today to bring some more facts to the debate over 
industrial loan companies.
  ILCs are well regulated, both at the State and Federal levels. They 
have played an important part in our country's financial system for 
over 100 years. I have a letter from the chairman, Donald Powell, of 
the Federal Deposit Insurance Corporation, and I will provide it for 
the Record, but I also thought I would just read some of the 
observations that Chairman Powell makes about ILCs.
  Chairman Powell says that industrial loan companies and industrial 
banks have existed since the early 1900s, and overall it is the FDIC's 
view that ILC charters pose no greater safety and soundness risk than 
other charter types. As with any other insured institution, ILCs are 
subject to examinations and other supervisory activities. The FDIC's 
authority to pursue formal or informal enforcement actions against an 
ILC is the same as the FDIC authority with respect to any other State 
nonmember bank, with limited exceptions. In short, the FDIC does not 
believe that there are any compelling safety and soundness reasons to 
impose constraints on this charter type that are not imposed on other 
charter types.
  Chairman Powell of the FDIC goes on to say that the FDIC and the 
State chartering authorities directly supervise insured ILCs, which 
must comply with the FDIC's rules and regulations, including those 
requirements for capital standards, safe and sound operations, and 
consumer compliance and community reinvestment. Further, as he says, 
the FDIC has the authority to examine any affiliate of an ILC, 
including its parent company, as may be necessary, to determine the 
relationship between the ILC and the affiliate, and to determine the 
effect of such relationship on the ILC.
  I thought I would bring those facts to light. I know that some 
competitors of

[[Page 4587]]

ILCs worry because they do not want more competition in the banking 
marketplace, but we all know that competition is good for consumers, it 
is good for businesses, and it is good for our economy as a whole. And 
since I have heard other companies make the argument that ILCs are not 
safe and sound, I wanted to respond by saying that ILCs are heavily 
regulated financial institutions, ILCs are regulated by the FDIC and by 
State banking regulators in every State in which they operate, and I 
think we should judge ILCs on the facts.
  To that end, Mr. Chairman, I submit the letter of Chairman Donald 
Powell for the Record herewith:

                                                   Federal Deposit


                                        Insurance Corporation,

                                   Washington, DC, April 30, 2003.
     Hon. Edward R. Royce,
     House of Representatives,
     Washington, DC.
       Dear Congressman Royce: Thank you for your recent letter 
     concerning industrial loan companies. We are closely 
     monitoring the recent attention that industrial loan 
     companies are receiving and appreciate your questions.
       Industrial loan companies and industrial banks 
     (collectively, ILCs) have existed since the early 1900s. 
     States with existing insured ILCs include California, 
     Colorado, Indiana, Minnesota, Nevada, and Utah. There are 51 
     insured ILCs, with the vast majority operated from Utah (24) 
     and California (17). The charters are unique in that, as long 
     as they meet certain criteria (typically, not accepting 
     demand deposits), they are not considered ``banks'' under the 
     Bank Holding Company Act. As a result, an ILC's parent 
     company is not subject to supervision by the Federal Reserve. 
     Just as is true of unitary thrift holding companies and 
     parent companies of limited-purpose credit card banks, the 
     parent companies of ILCs include a diverse group of financial 
     and commercial firms.
       Overall, it is the FDIC's view that ILC charters pose no 
     greater safety and soundness risk than other charter types. 
     As with any other insured institution, ILCs are subject to 
     examinations and other supervisory activities. The FDIC's 
     authority to pursue formal or informal enforcement actions 
     against an ILC is the same as the FDIC's authority with 
     respect to any other state nonmember bank, with limited 
     exceptions. Those exceptions pertain to cross-guaranty 
     authority and golden parachute payments, and legislative 
     changes to eliminate those exceptions are being pursued in 
     H.R. 1375, the proposed Financial Services Regulatory Relief 
     Act of 2003. In short, the FDIC does not believe there are 
     compelling safety and soundness reasons to impose constraints 
     on this charter type that are not imposed on other charter 
     types.
       The risk posed by any insured depository institution 
     depends on the appropriateness of the business plan and 
     model, management's competency in administering the 
     institution's affairs, and the quality and implementation of 
     risk management programs. Similar to institutions with other 
     charter types, an ILC's capital adequacy and overall safety 
     and soundness is driven by the composition and stability of 
     its lending, investing and funding activities and the 
     competence of management.
       The FDIC and the state chartering authorities directly 
     supervise insured ILCs, which must comply with the FDIC's 
     Rules and Regulations, including, but not limited to, those 
     requirements for capital standards, safe and sound 
     operations, and consumer compliance and community 
     reinvestment. ILCs also are subject to Sections 23A and 23B 
     of the Federal Reserve Act, which restrict or limit 
     transactions with a bank's affiliates and the Federal Reserve 
     Board's Regulation O, which governs credit to insiders and 
     their related interests. Further, the FDIC has the authority 
     to examine any affiliate of an ILC, including its parent 
     company, as may be necessary to determine the relationship 
     between the ILC and the affiliate and to determine the effect 
     of such relationship on the ILC.
       Answers to your specific questions are enclosed. If you 
     would like additional information, please do not hesitate to 
     contact me or Alice Goodman, Director of our Office of 
     Legislative Affairs, at (202) 898-8730.
           Sincerely,
                                                 Donald E. Powell,
                                                         Chairman.
       Enclosure.

  Response of the Federal Deposit Insurance Corporation's Division of 
Supervision and Consumer Protection to Questions Concerning Industrial 
                             Loan Companies

     In what banking activities are these institutions engaged? Do 
         they have the authority to provide services that may not 
         be offered by full-service commercial banks?
       Generally, the authority of industrial loan companies and 
     industrial banks (collectively, ILCs) to engage in activities 
     is determined by the laws of the chartering state. The 
     authority granted to an ILC may vary from one state to 
     another and may be different from the authority granted to 
     commercial banks. Except for offering demand deposits, an ILC 
     generally may engage in all types of consumer and commercial 
     lending activities and all other banking activities 
     permissible for banks in general.
       Core ILC functions are traditional financial activities 
     that can generally be engaged in by institutions of all 
     charter types. The exception would be institutions organized 
     and chartered as limited-purpose institutions, which 
     generally focus on credit card or trust activities.
       Existing ILCs can generally be grouped according to one of 
     four broadly defined business models:
       Institutions that are operated as community-focused 
     institutions, including stand-alone institutions and those 
     serving a community niche within a larger organization. These 
     institutions often provide credit to consumers and small- to 
     medium-sized businesses. In addition to retail deposits (many 
     ILCs offer NOW accounts), funding sources may include 
     commercial and wholesale deposits, as well as borrowings. 
     Institutions that operate within a larger corporate 
     organization may also obtain funding through the parent 
     organization.
       Independent institutions that focus on specialty lending 
     programs, including leasing, factoring, and real estate 
     activities. Funding sources for this relatively small number 
     of institutions may include retail and commercial deposits, 
     wholesale deposits, and borrowings.
       Institutions that are embedded in organizations whose 
     activities are predominantly financial in nature, or within 
     the financial services units of larger corporate 
     organizations. These institutions may serve a particular 
     lending, funding, or processing function within the 
     organization. Lending strategies can carry greatly, but, 
     within a specific institutions, are often focused on a 
     limited range of products, such as credit cards, real estate 
     mortgages, or commercial loans. Corporate strategies play a 
     larger role in determing funding strategies in these cases, 
     with some institutions periodically selling some or all 
     outstanding loans to the parent organization. Parent 
     assessments of funding options across all business units 
     frequently determine the specific tactics at the ILC level. A 
     few institutions restrict themselves to facilitating 
     corporate access to the payment system or supporting cash 
     management functions, such as administering escrowed funds.
       Institutions that directly support the parent 
     organizations' distinctly commercial activities. These 
     institutions largely finance retail purchases of parent 
     company products, ranging from general merchandise to 
     automobiles, truck stop activities, fuel for rental car 
     operations, and heating and air conditioning installations. 
     Loan products might include credit cards, lines of credit, 
     and term loans. Funding is generally limited to wholesale or 
     money center operations, borrowings, or other options from 
     within the parent organization.
       From a federal law perspective, one of the primary 
     differences between an ILC charter and other depository 
     institution charters is that certain ILCs have a 
     grandfathered exemption from the requirements and 
     restrictions of the Bank Holding Company Act (BHCA). 
     Generally, an LIC can maintain its exemption so long as it 
     meets at least one of the following conditions: (1) the 
     institution does not accept demand deposits, (2) the 
     institution's total assets are less than $100,000,000, or (3) 
     control of the institution has not been acquired by any 
     company after August 10, 1987.
     How does the FDIC go about regulating ILCs? What authority 
         does the FDIC have to examine ILC parent companies? Does 
         the FDIC feel it has the tools necessary to adequately 
         and comprehensively regulate ILCs and their relationship 
         to their owners?
       The FDIC regulates ILCs in the same manner as other state 
     nonmember institutions. ILCs are subject to the FDIC's safety 
     and soundness regulations (with two exceptions discussed 
     below), as well as federal consumer protection regulations. 
     Like all insured depository institutions, ILCs receive 
     regular examinations, during which compliance with the 
     regulations is reviewed and overall performance and condition 
     are analyzed. For FDIC-insured, state-chartered institutions 
     that are not members of the Federal Reserve System, the FDIC 
     and/or the state authority will conduct the examination. The 
     FDIC has agreements with most states to conduct examinations 
     under alternating schedules, although in the case of a 
     troubled institution, the FDIC and the estate authority 
     generally conduct joint or concurrent examinations.
       Transactions with affiliates are reviewed during each 
     examination. An ILC's transactions with its affiliates are 
     restricted by Sections 23A and 23B of the Federal Reserve 
     Act, which are made applicable to state nonmember banks in 
     general by section 18(j) of the FDI Act, 12 U.S.C. 
     Sec. 1828(j). Section 23A essentially limits the total amount 
     of loans to affiliates and limits other transactions between 
     a bank and its affiliates. These restrictions also apply to 
     loans to third parties to pay debts to or purchase goods and 
     services from an affiliate. Section 23B generally prohibits 
     any transaction with an affiliate on terms or conditions less 
     favorable to the bank than a transaction with an unrelated 
     third party.

[[Page 4588]]

       While the FDIC does not have statutory authority to 
     supervise the parent companies of ILCs, the FDIC does have 
     the authority, in examining any insured depository 
     institution, to examine any affiliate of the institution 
     (under 12 U.S.C. Sec. 1820(b)(4)), including its parent 
     company, as may be necessary to determine the relationship 
     between the institution and the affiliate and to determine 
     the effect of such relationship on the institution. In the 
     case of a parent subject to the reporting requirements of 
     another regulatory body covered under the Gramm-Leach-Bliley 
     Act of 1999, such as the Securities and Exchange Commission 
     or a state insurance commissioner, the FDIC has agreements in 
     place to share information with the functional regulator.
        In determining whether to grant deposit insurance to an 
     ILC, the FDIC must consider the same statutory factors of 
     section 6 of the FDI Act, 12 U.S.C. Sec. 1816, that it 
     considers for all other applications for deposit insurance. 
     These factors are:
        The financial history and condition of the depository 
     institution;
        The adequacy of its capital structure;
        Its future earnings prospects;
        The general character and fitness of its management;
        The risk presented by such depository institution to the 
     deposit insurance fund;
        The convenience and needs of the community to be served by 
     the depository institution; and
        Whether its corporate powers are consistent with the 
     purposes of the Act.
        The FDIC has determined that there are two limitations in 
     our authority regarding ILCs as compared to other 
     institutions. These two limitations would be addressed by 
     remedies included in the Financial Services Regulatory Relief 
     Act of 2003, as proposed. These are:
        Amendment to clarify the FDIC's cross-guarantee authority: 
     As part of the Federal Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (FIRREA), Congress 
     established a system that generally permits the FDIC to 
     assess liability across commonly controlled institutions for 
     FDIC losses caused by the default of one of the institutions. 
     Currently, cross-guarantee liability is limited to insured 
     depository institutions that are commonly controlled as 
     defined in the statute. The definition of ``commonly 
     controlled'' limits liability to insured depository 
     institutions that are controlled by the same depository 
     institution holding company, i.e., either a bank holding 
     company or a savings and loan holding company. Since the 
     parent company of an ILC is neither a bank holding company 
     nor a savings and loan holding company, ILCs that are owned 
     by the same parent company would not be ``commonly 
     controlled.'' As a result, cross-guarantee liability may not 
     attach to ILCs that are owned by the same parent company. The 
     Financial Services regulatory Relief Act of 2003 contains 
     language that would enhance the FDIC's efforts to protect the 
     deposit insurance funds by establishing parity with other 
     charter types. This discretionary authority would extend only 
     against an insured depository institution under common 
     control with the defaulting institution.
        Amendment to clarify the FDIC's Golden Parachute 
     authority: As part of H.R. 1375, there also is an amendment 
     to section 18(k) of the FDI Act, 12 U.S.C. Sec. 1828(k), to 
     clarify that the FDIC could prohibit or limit a nonbank 
     holding company's golden parachute payment or indemnification 
     payment. In 1990 Congress authorized the FDIC to prohibit or 
     limit prepayment of salaries or any liabilities or legal 
     expenses of an institution-affiliated party by an insured 
     depository institution or a depository institution holding 
     company. Such payments are prohibited if they are made in 
     contemplation of the insolvency of such institution or 
     holding company or if they prevent the proper application of 
     assets to creditors or create a preference for creditors of 
     the institution. Due to the existing statutory definition of 
     a depository institution holding company, it is not clear 
     that the FDIC is authorized to prohibit these types of 
     payments made by nonbank holding companies (such as ILC 
     parent companies).
     What differences, if any, exist between the manner in which 
         the FDIC regulates industrial loan banks compared with 
         commercial banks?
        As indicated above, the FDIC regulates ILCs in the same 
     manner as all other state nonmember institutions.
     In your view, would ILCs pose a greater risk to the safety 
         and soundness of the banking system than traditional 
         banks if both received enhanced de novo interstate 
         branching authority?
        We do not believe that ILCs would pose a greater risk to 
     the safety and soundness of the banking system than 
     traditional banks if both received enhanced de novo 
     interstate branching authority. As described above, insured 
     ILCs are subject to the same Federal supervisory regime that 
     applies to other insured institutions. ILC transactions with 
     their parent companies are subject to the same restrictions 
     that apply to transactions between other insured institutions 
     and their parent companies.
     Can you comment generally on the capital adequacy and safety 
         and soundness record of the ILCs and compare these to the 
         performance of commercial banks?
        ILCs currently have an examination rating distribution 
     that is similar to the insured banking universe. Similar to 
     institutions with other charter types, an ILC's capital 
     adequacy and overall safety and soundness is driven by the 
     composition and stability of its lending, investing and 
     funding activities as well as competence of management.
        For troubled ILCs, several common issues have generally 
     been evident, each reflecting faulty strategic or tactical 
     decisions rather than issues of permissible activities, 
     commercial affiliations, or the regulatory regime over the 
     larger corporate organization:
        Poorly conceived lending strategies, characterized by 
     concentrations in relatively higher-risk loan problems, 
     economic sectors, or borrowers, have resulted in an excessive 
     volume of poor quality credits.
        Less than satisfactory internal processes have hampered 
     institutions' ability to identify and respond to changing 
     circumstances, including deterioration in credit quality, 
     which have thwarted timely corrective actions or collection 
     efforts.
        Reliance on potentially volatile funds management 
     strategies, including wholesale deposit solicitations, 
     borrowings, and large-scale loan sales, have placed 
     additional strain on the institutions' earnings performance 
     and liquidity posture.
        If any institution is identified as troubled, the FDIC 
     modifies its supervisory strategy. In addition, these 
     institutions are generally subject to formal and informal 
     enforcement actions. As a rule, the FDIC's supervisory 
     strategies and specific actions are coordinated with those of 
     the chartering state authority. Further, in those situations 
     in which the parent organization controls multiple insured 
     institutions, the FDIC also coordinates with the other state 
     authorities or primary federal regulators to ensure that a 
     comprehensive strategy is implemented.
       Given the concerns some observers have raised about the 
     ILCs' ability to affiliate with a commercial entity, it is 
     important to note that the current group of troubled ILCs 
     have problems that are not unique to the ILC charter, nor do 
     the troubled ILCs have a history of unusual influence from 
     parent companies or affiliates. As described above, the 
     issues facing the troubled institutions are not dissimilar to 
     those encountered under all charter types, including those in 
     a traditional bank holding company framework.
     Can you describe the regulatory framework that addresses 
         safety and soundness concerns, or potential conflicts of 
         interest, that may arise from the relationship of ILCs to 
         their parent companies?
       In general, the regulatory framework used to address safety 
     and soundness concerns and potential conflicts of interest 
     regarding an ILC and its parent is the same as that 
     applicable to any insured state bank. For example, with 
     regard to safety and soundness, section 8 of the FDI Act, 12 
     U.S.C. Sec. 1818, generally provides the FDIC with the 
     authority to (i) terminate or suspend the insurance of an ILC 
     for unsafe or unsound practices or unsafe or unsound 
     condition, and (ii) order the ILC to cease and desist from 
     engaging in an unsafe or unsound practice, or from the 
     violation of any law, rule, regulation, written condition 
     imposed in connection with the granting of any application, 
     or any written agreement with the FDIC.
       We do not believe that the potential for conflicts of 
     interest is any greater for ILCs than for other FDIC-insured 
     institutions operating in a holding company structure. For 
     example, an ILC and its parent company are subject to the 
     tying restrictions of section 106 of the Bank Holding Company 
     Act Amendments of 1970 to the same extent as if the ILC were 
     a ``bank'' and the parent company were a ``bank holding 
     company.'' Generally, the tying restrictions provide that a 
     bank may not extend credit, sell or lease property, or 
     furnish any service, or fix or vary the consideration for any 
     of the foregoing based upon any of five specific conditions. 
     Those conditions include, for example, that the customer 
     obtain some additional credit, property or service from the 
     holding company or an affiliate.
       In order to ensure sufficient autonomy and insulation of 
     the bank from the parent, the state authority or the FDIC 
     typically imposes some or all of the following controls:
       Executive ILC management is onsite at the ILC, as opposed 
     to the sometimes distant location of the parent and 
     affiliates;
       The ILC Board of Directors consists of local 
     representatives who are capable of providing strong oversight 
     over the operations of the bank and establishing prudent 
     policies and procedures;
       Lending files, credit documentation and ILC policies are 
     maintained at the institution and not the parent;
       Lending policies and authorities are established and 
     enforced by the ILC;
       The bank's policies, processes and activities are 
     consistent with regulatory laws, regulations, policy 
     statements and other regulatory guidance;
       Definitive bank-level business plans are established and 
     followed by the bank;
       All transactions with the parent or affiliate pass the 
     strictest arms-length scrutiny; and

[[Page 4589]]

       Sufficient resources are available at the ILC to carry out 
     ILC activities.
       With the above-noted prudential factors in place and 
     experienced bankers at the helm of ILCs, we have not noted 
     problems or issues unique to the ILC charter.

  Mr. ROSS. Mr. Chairman, I am pleased to yield such time as he may 
consume to the gentleman from Utah (Mr. Matheson), my colleague on the 
Committee on Financial Services and someone who has worked tirelessly 
on this piece of bipartisan commonsense legislation.
  Mr. MATHESON. Mr. Chairman, I have listened to the debate today and 
there have been a couple of items that I think deserve some comment.
  We have heard a lot of misinformation, in my opinion, about 
industrial loan companies. I think it is important that this Congress 
needs to go through an exercise in education about these institutions 
to learn about what they are and what they are not, and I want to 
address some of those things.
  First of all, some people seem to think there is a lack of 
regulation; that ILCs are unregulated. That is not true. The FDIC 
regulates ILCs in the same manner as other State nonmember 
institutions. ILCs are subject to the FDIC safety and soundness 
regulations, as well as Federal consumer protections.
  How about another thing that I often hear that I believe is a myth 
about this subject; that ILCs pose a threat to the safety and soundness 
of the national banking system. The fact is, overall, it is the FDIC's 
view that the ILC charters pose no greater safety and soundness risk 
than other charter types.
  Another misconception out there about ILCs. Some people seem to think 
that ILCs may allow for inappropriate mixing of banking and commerce. 
The fact is, as the FDIC has said, they do not believe that the 
potential for conflict is any greater for ILCs than for other FDIC-
insured institutions operating in a holding company structure. My 
colleague, the gentleman from California (Mr. Royce), is submitting a 
letter that was written by Chairman Powell from the FDIC that will 
provide greater expansion on those particular thoughts.
  I voted for this bill when it came out of committee. I supported the 
regulatory relief bill, and I still think many components of the 
underlying bill are very good and positive. I am concerned about the 
components of the manager's amendment that tend to place restrictions 
on the branching capabilities of industrial loan companies.
  Now, you will hear a lot of people, in the earlier debate on the rule 
and whatnot, saying these provisions do not go far enough; that we need 
greater restrictions. I want to point out there is another point of 
view, which is that I think these go too far. I do not think it is 
helpful. I think it is important we should talk about just what ILCs 
mean to this country, just so people will know.
  Industrial loan banks are FDIC-regulated depository institutions. 
And, yes, they are chartered in five different States. There are more 
than 50 industrial loan banks in operation. They have been in operation 
for many years. They are subject to the same banking laws and are 
regulated in the same manner as other depository institutions. They are 
supervised and examined both by the States that charter them and by the 
FDIC. They are subject to the same general safety and soundness, 
consumer protection deposit insurance, Community Reinvestment Act, and 
other requirements that apply to other FDIC-insured depository 
institutions, and they have an exemplary record in serving the 
communities in which they operate.
  Industrial loan banks have already been subject to the same rules 
regarding interstate branching as other banks. And although they have 
rarely used this authority, these banks have been authorized to open 
branches by acquisition, where State laws allow.
  Most owners of industrial loan banks are exempted from the Bank 
Holding Company Act regulation through a specific provision added to 
the Bank Holding Company Act in 1987. This is neither a loophole nor a 
particularly unique provision. Similar Bank Holding Company Act 
exemptions apply to many institutions not owned by other companies, and 
to financial institutions that do not offer a full range of banking 
services, such as credit card banks, Edge Act banks, grandfathered 
``nonbank banks,'' grandfathered ``unitary thrifts,'' and trust banks. 
These exemptions benefit bank customers. They introduce additional 
competition into the marketplace without increased risk to the deposit 
insurance system.
  As I said earlier, some people will claim that these industrial loan 
banks are unregulated. That is just not true. They are subject to many 
of the same requirements as bank holding companies, such as strict 
restrictions on transactions with their bank affiliates. They are 
regulated under State law and are subject to examination by the FDIC 
and to prompt corrective action and capital guarantee requirements if 
the banks they control encounter financial difficulties. These tools, 
in the words of FDIC Chairman Donald Powell, allow the FDIC to manage 
the relationships between industrial loan banks and their parents 
``with little or no risk to the deposit insurance funds, and no subsidy 
transferred to the nonbank parent.''
  I think that it is important to note that what we are talking about 
here is choices. We have heard about, oh, these are only chartered in 5 
States and that is to the detriment of 45 other States. This is about 
American consumers being given more choices; more choices and more 
efficiency in our economy. We should not be afraid of competition. 
There are various interest groups out there that are going to oppose 
ILCs. And I think they oppose them because they are saying, oh, gee, we 
are disadvantaged. I think they are trying to protect an advantage. 
Competition is good. Competition is a good thing in our country and in 
our economy here. It is something I would advocate for.
  And I think the people have been well served in the many years in 
which ILCs have been in existence, and I think that businesses and 
consumers will continue to be served in all 50 States by the benefits 
of the services that industrial loan companies provide.
  So as I said at the outset, a lot of things have been said. I think 
there is a lot of confusion about what ILCs are and are not. I have 
tried to walk through some of the fundamental comments that have been 
made that raise concern for me, and I would also suggest that this 
manager's amendment, which is a purported compromise, is not 
necessarily something that I agree with. I think it goes too far in 
being restrictive, and I think that it gives me concerns for a bill 
that otherwise passed through committee with very little controversy.
  Mr. LEACH. Mr. Chairman, will the gentleman yield?
  Mr. MATHESON. I yield to the gentleman from Iowa.
  Mr. LEACH. Mr. Chairman, the gentleman is, of course, correct in part 
of what he says on regulation. But the reason that ILCs were exempted 
from the Bank Holding Company Act was they did not have all the powers 
of a bank. Now they are being given all the powers of a bank and also 
want to stay exempt from the Bank Holding Company Act.
  What the Bank Holding Company Act says is that the parent of an ILC 
will be examined in a consolidated way, the way Europe is moving to, 
the same as the United States has attempted to establish in principle. 
But with this bill we make a breach in principle of profound 
dimensions. It is that examination of the bank holding company that is 
critical to an understanding of how you protect the taxpayer and how 
you protect the financial system. That is what is so important in this 
debate.
  Mr. MATHESON. Reclaiming my time, Mr. Chairman, I appreciate the 
comments of the gentleman from Iowa. We have had discussions about this 
in the past and we tend to take a little bit different point of view on 
this issue.
  But I do appreciate his mentioning some actions that are taking place 
within the European Union. Financial owners of industrial loan banks 
may very well soon be subject to further regulation, and holding 
company supervision will be driven by the European Union mandate that 
institutions

[[Page 4590]]

doing business there be subject to consolidated holding company 
supervision.
  It is my understanding the Securities and Exchange Commission has 
proposed a consolidated supervisory regime for holding companies 
predominantly engaged in securities business.

                              {time}  1215

  I do acknowledge that there are some other actions taking place to 
address this holding company issue and I am glad the gentleman raised 
that point. That being said, I guess I would just repeat one more time 
that I do believe that these are entities where, according to the 
Federal agency that regulates them now, the FDIC, they do not see any 
relationship in terms of, substantive, between the holding company and 
the bank component of the business.
  Mr. LEACH. If the gentleman will yield on that point, as the 
gentleman knows there is a profound difference between the Federal 
Reserve and the FDIC on this point. The Federal Reserve holds the exact 
opposite position. The Federal Reserve is what is in charge of the 
payment system, and by this bill we are allowing people access to the 
payment system without thorough oversight of the parent company. All I 
am asking is that ILCs come under the same national law as everybody 
else that operates as the equivalent of a full service bank, nothing 
less, nothing more. But it does have the effect of devaluing all other 
financial institution charters. That is a concern, although the 
principal concern is protection of the public purse. In that regard, I 
agree that the FDIC has a different position.
  But I only make one final point. Under the Gramm-Leach-Bliley Act, 
the effort was to have coordination of all the Federal banking 
regulators. Here you have one banking regulator that wants to operate 
outside coordination of all the others. In that regard, I have some 
concerns about FDIC judgment which I believe is driven by a desire to 
regulate a greater body of institutions. That is a personal view. Maybe 
they have other motives. I do not know. But I want Federal 
coordination. I want public protection to the maximum degree possible.
  Mr. MATHESON. I appreciate those comments. I would just say I 
understand there is a difference between the FDIC and the Federal 
Reserve and there is a difference on this particular issue. I just want 
to point out that this is not just an ILC issue, though. There are 
other entities that are also not regulated by the Federal Reserve.
  Mr. OXLEY. Mr. Chairman, I am pleased to yield 2 minutes to the 
gentleman from Indiana (Mr. Chocola).
  Mr. CHOCOLA. I thank the gentleman for yielding me this time.
  Mr. Chairman, the banking industry estimates that it spends 
approximately $25 billion annually to comply with the regulatory 
requirements imposed at the Federal and State levels of government. 
While some of these regulations help to ensure the reliability of our 
financial services sector, many of the mandates that emerge from 
Washington, D.C. are overly burdensome, unnecessarily costly, and 
oftentimes hinder profitability, innovation and competition. Whenever 
we can identify examples of unnecessary regulatory obstacles, Congress 
should act to eliminate them.
  H.R. 1375, the Financial Services Regulatory Relief Act of 2004, is a 
well-crafted bill that does exactly that. It allows credit unions, 
savings associations, and national banks to devote more of their 
resources to the business of lending to consumers and less to the 
bureaucratic maze of compliance with outdated and unnecessary 
regulations. It contains a broad range of provisions that, taken as a 
whole, will help grant parity among financial institutions of all 
characters and sizes as well as the agencies that regulate them and, 
most importantly, the customers they serve.
  Of the many important provisions in this bill, several are 
significant for Indiana's credit unions. For example, access to the 
Federal Home Loan Bank is available only for financial institutions 
that are federally insured. H.R. 1375 contains a provision that would 
allow privately insured financial institutions to join the Federal Home 
Loan Bank. The Federal Home Loan Bank is a significant low-cost source 
of funds that a credit union can use to expand loan products, 
especially mortgage loans, to its members. Indiana has more than 20 
privately insured credit unions, including Elkhart County Farm Bureau 
Credit Union, whose members could benefit from access to the Federal 
Home Loan Bank.
  Currently, credit unions may only offer check cashing and money 
transfer services to members. H.R. 1375 contains a provision that 
allows credit unions to offer these services to anyone who is eligible 
for membership but has not yet joined the credit union. This would 
allow credit unions to extend services to underserved consumers at a 
lower cost than check cashers and money transfer providers, while 
introducing them to mainstream financial services.
  By passing this legislation, Congress will demonstrate its commitment 
to reducing the regulatory burden. I urge all of my colleagues to 
support H.R. 1375.
  Mr. OXLEY. Mr. Chairman, I yield myself the balance of my time. I 
would simply say this has been a very good debate and, in fact, a great 
representation of the legislative process at work. We have had a lot of 
strong opinions, particularly on the ILC issue. But overall this is an 
attempt to provide regulatory relief to institutions who have 
undertaken a tremendous burden, particularly under the PATRIOT Act 
strictures. For that reason, this bill needs to go forward.
  Ms. LEE. Mr. Chairman, although I do have some reservations about 
this bill, I rise in support of the vast majority of the underlying 
bill and want to praise the excellent bipartisan leadership exercised 
in crafting it and moving it to the floor today. It was a long time in 
the making and I congratulate my colleagues on their hard work.
  The bill provides much needed regulatory relief to credit unions, 
national banks, and savings and loan institutions. We all know that 
regulations can do great good, but they need to be reexamined and 
refined from time to time, especially when new consumer protections are 
warranted and where they can provide needed flexibility to enhance 
efficiency.
  This bill does exactly that and I am pleased with many of its 
provisions, especially those that will help the credit unions compete, 
thrive and improve their services to consumers.
  Mr. Chairman, I hope that we will improve the bill before us today by 
adopting the Manager's amendment, and Waters amendment, among others.
  Mr. CANTOR. Mr. Chairman, I rise today to speak in favor of The 
Financial Services Regulatory Relief Act. This important legislation 
will help relieve several of the regulatory burdens that hinder the 
business practices of financial institutions throughout our Nation. By 
lifting these regulations, banks, credit unions, and other institutions 
will be able to better serve the average American.
  Particularly, I would like to mention the importance of Section 208 
of this legislation. This provision would remove a limitation on 
savings associations that prevents them from offering a larger 
percentage of automobile loans to their customers.
  Presently, automobile loans are included in the household or consumer 
loan restriction limit of 35% of an institution's assets. Many savings 
associations will be forced to stop or limit the number of automobile 
loan products they offer because of this restriction. With less 
competition in the marketplace, the American people will be left with 
fewer options to purchase automobiles.
  The language currently in this legislation will remove automobile 
loans from household or consumer loan restriction. This provision will 
help guard against predatory practices and add flexibility to the 
lending industry by creating better marketplace options for the 
American consumer.
  For over 150 years, thrift banks have focused on providing consumers 
with the necessary means to obtain the American dream of ownership. We 
should not limit Americans in that dream.
  Mr. Chairman, I would like to thank the Financial Services Committee 
and Chairman Oxley for including this important provision in H.R. 1375. 
I urge that we pass this legislation, and I yield back the balance of 
my time.
  Mr. TERRY. Mr. Chairman, I rise today in reluctant opposition to H.R. 
1375.
  The United States is a government of limited powers and of 
Federalism. We defer to the States to make their own determinations to 
ensure the health, welfare, and consumer protection of their citizens.

[[Page 4591]]

  During my legislative career, I have fought to ease the regulatory 
burden on our Nation's businesses, our Nation's engines for growth. I 
have fought against unwarranted government intrusion.
  As much as I support the removal of unnecessary and onerous 
regulatory burdens on our Nation's businesses, I am also a strong 
supporter of States rights.
  In America we do not take a one-size-fits-all approach to government. 
One reason why we enjoy the highest standard of living in the world is 
because we have a laboratory of our States who are given the freedom to 
set their own paths. Similar to completion in the private sector, we 
allow States to offer competing plans to protect the safety and welfare 
of their citizens.
  H.R. 1375 has many admirable provisions to ease the regulatory 
environment on our Nation's financial service industry; however, the 
bill amends the interstate branching laws to permit de novo interstate 
branching, thus eliminating the State's role in ``entry-by-
acquisition'' only rules that apply under Federal law today. This is an 
unjustified unsurpation of State regulatory authority.
  Currently, de novo interstate branching may occur only if a State's 
law expressly permits it. Seventeen States have passed laws that permit 
de novo branching, while thirty-three States, like Nebraska, do not.
  It is for this reason only I reluctantly cannot support H.R. 1375.
  Mr. CASTLE. Mr. Chairman, I rise today in support of H.R. 1375, the 
``Financial Services Regulatory Relief Act.'' I commend Chairman Oxley 
and Subcommittee Chairman Bachus for continuing the Financial Services 
Committee's efforts to address regulatory relief for our financial 
institutions.
  This legislation will address regulatory relief for a number of 
financial institution systems; banks, savings associations and credit 
unions. It eases regulatory burden which in turn will improve 
productivity, ultimately benefiting consumers and small businesses.
  As Members of Congress it is important for us not to forget our role 
in oversight of the laws and regulations that we create and address the 
regulations as needed. We should ensure that the laws and regulations 
we create follow our original intent and are not overly burdensome. I 
commend our committee for revisiting the regulatory requirements. It is 
essential we make sure we have streamlined them for efficiency and not 
made them overly onerous.
  Mr. Chairman, this legislation is a good bipartisan bill that members 
of the Financial Services Committee held a number of hearings on. I am 
pleased today that we have brought this much needed bill to the floor. 
I urge my colleagues on both sides of the aisle to join me in 
supporting this important and very necessary legislation.
  Mr. BEREUTER. Mr. Chairman, this Member has been a strong supporter 
of regulatory burden relief for our financial institutions in the past. 
However, this Member will oppose the Financial Services Regulatory 
Relief Act of 2003 (H.R. 1375) because of the provisions which preempt 
the laws of over 30 states on either interstate bank branching, the 
bank acquisition ``age'' requirements or both. As a former State 
senator in the Nebraska Unicameral legislature, this Member believes 
Congress should continue to defer to State legislatures on these 
questions.
  Under current Federal law, State and national chartered banks can 
branch de novo into a new State only if the State explicitly permits de 
novo interstate branching. This provision of Federal law was enacted in 
the Riegle-Neal Interstate Banking and Branching Efficiency Act of 
1994. Furthermore, under Riegle-Neal, bank holding companies are 
permitted to acquire an existing bank in any State. However, under this 
law, a state can adopt ``age'' laws which provide that a bank holding 
company located out-of-State can only acquire a bank in the State if 
the bank has been in existence for a certain amount of time (up to 5 
years) as determined by the State.
  Section 401 of H.R. 1375 would preempt State laws as they relate to 
both interstate bank branching and the ``age'' requirement for the 
acquisition of existing banks. In the 107th Congress, this Member did 
offer an amendment on this subject during a Financial Services 
Committee Markup of the Financial Services Regulatory Relief Act of 
2002. This Member's amendment would have deleted the provision of this 
bill which preempted the laws of States on bank branching and bank 
acquisition. Unfortunately, the amendment was defeated by a vote of 13 
to 32.
  In conclusion, this Member will oppose H.R. 1375 because of the 
provisions in Section 401 which preempted the laws of over 30 States. 
This Member strongly believes that these banking questions should be 
left to our State legislatures.
  Mr. GUTIERREZ. Mr. Chairman, I had intended to offer an amendment on 
this legislation regarding the OCC preemption rules, but withdrew it in 
anticipation of revisiting that important issue soon on other 
legislation.
  I do, however, want to state my strong support for a particular 
provision of H.R. 1375, the Financial Services Regulatory Relief Act of 
2003. I am very pleased that credit unions will be permitted to offer 
remittance products to nonmembers under this legislation. I want to 
thank Chairman Oxley, Ranking Member Frank, Charlie Gonzalez and Doug 
Ose for their work on this important provision. Credit unions offer the 
lowest cost remittance products and the best exchange rates on the 
market. In addition, increased competition in this arena will provide 
more favorable options for consumers.
  This is most important because many purveyors of remittance products 
charge extremely high fees and provide very unfavorable exchange rates 
to their consumers, and they often fail to provide adequate disclosure. 
I have legislation that addresses this issue, requiring meaningful 
disclosure of fees and rates, in the language that is used to advertise 
and/or transact business with consumers. I hope this meaningful 
legislation will soon advance to floor consideration.
  Again, thank you, Chairman Oxley and Ranking Member Frank, for 
including this important remittance provision in the legislation.
  Mr. OXLEY. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN pro tempore (Mr. Simmons). All time for general debate 
has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill shall be considered as an original bill 
for the purpose of amendment under the 5-minute rule and shall be 
considered read.
  The text of the committee amendment in the nature of a substitute is 
as follows:

                               H.R. 1375

       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 2003''.
       (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. Capital equivalency deposits for Federal branches and 
              agencies of foreign banks.
Sec. 108. Equal treatment for Federal agencies of foreign banks.
Sec. 109. Maintenance of a Federal branch and a Federal agency in the 
              same State.
Sec. 110. Business organization flexibility for national banks.
Sec. 111. Clarification of the main place of business of a national 
              bank.

                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.
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.

[[Page 4592]]

Sec. 213. Clarifying citizenship of Federal savings associations for 
              Federal court jurisdiction.
Sec. 214. Clarification of applicability of certain procedural 
              doctrines.

                   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.

              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.

         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.

                  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. Clarification of extent of suspension, removal, and 
              prohibition authority of Federal banking agencies in 
              cases of certain crimes by institution-affiliated 
              parties.
Sec. 607. Streamlining depository institution merger application 
              requirements.
Sec. 608. Inclusion of Director of the Office of Thrift Supervision in 
              list of banking agencies regarding insurance customer 
              protection regulations.
Sec. 609. Shortening of post-approval antitrust review period with the 
              agreement of the Attorney General.
Sec. 610. Protection of confidential information received by Federal 
              banking regulators from foreign banking supervisors.
Sec. 611. Prohibition on the participation in the affairs of bank 
              holding company or Edge Act or agreement corporations by 
              convicted individual.
Sec. 612. Clarification that notice after separation from service may 
              be made by an order.
Sec. 613. Examiners of financial institutions.
Sec. 614. Parity in standards for institution-affiliated parties.
Sec. 615. Enforcement against misrepresentations regarding FDIC deposit 
              insurance coverage.
Sec. 616. Compensation of Federal home loan bank directors.
Sec. 617. Extension of terms of Federal home loan bank directors.
Sec. 618. Biennial reports on the status of agency employment of 
              minorities and women.
Sec. 619. Coordination of State examination authority.

              TITLE VII--CLERICAL AND TECHNICAL AMENDMENTS

Sec. 701. Clerical amendments to the Home Owners' Loan Act.
Sec. 702. Technical corrections to the Federal Credit Union Act.
Sec. 703. Other technical corrections.
Sec. 704. Repeal of obsolete provisions of the Bank Holding Company Act 
              of 1956.

                   TITLE I--NATIONAL BANK PROVISIONS

     SEC. 101. NATIONAL BANK DIRECTORS.

       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.''.

     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:

     ``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''.

[[Page 4593]]



     SEC. 107. 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. 108. 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. 109. 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. 110. 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. 111. 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''.

                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
       (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

[[Page 4594]]

     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 10 
     percent of the savings association's capital stock actually 
     paid in and unimpaired and 10 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
       ``(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.

[[Page 4595]]



     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 
     State in which such savings association has its main 
     office.''.

     SEC. 214. CLARIFICATION OF APPLICABILITY OF CERTAIN 
                   PROCEDURAL DOCTRINES.

       Section 11A(d) of the Federal Deposit Insurance Act (12 
     U.S.C. 1821a(d)) is amended--
       (1) by striking ``Legal Proceedings.--Any judgment'' and 
     inserting ``Legal Proceedings.--
       ``(1) In general.--Any judgment''; and
       (2) by adding at the end the following new paragraph:
       ``(2) Clarification of applicability of certain procedural 
     doctrines.--In any proceeding seeking a monetary recovery 
     against the United States, or an agency or official thereof, 
     based upon actions of the Federal Savings and Loan Insurance 
     Corporation prior to its dissolution, or the Federal Home 
     Loan Bank Board prior to its dissolution, and arising from 
     the Financial Institutions Reform, Recovery, and Enforcement 
     Act of 1989 or its implementation, and where any monetary 
     recovery in such proceeding would be paid from the FSLIC 
     Resolution Fund or any supplements thereto, neither the 
     United States Court of Federal Claims, the United States 
     Court of Appeals for the Federal Circuit, nor any other court 
     of competent jurisdiction shall dismiss, or affirm on appeal 
     the dismissal of, the claims of any party seeking such 
     monetary recovery, on the basis of res judicata, collateral 
     estoppel, or any similar doctrine, defense, or rule of law, 
     based upon any decision, opinion, or order of judgment 
     entered by any court prior to July 1, 1996. Unless some other 
     defense is applicable, in any such proceeding, the United 
     States Court of Federal Claims, the United States Court of 
     Appeals for the Federal Circuit, and any other court of 
     competent jurisdiction shall review the merits of the claims 
     of the party seeking such monetary relief and shall enter 
     judgment accordingly.''.

                   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--
       ``(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) Investment for the Credit Union's Own Account.--
       ``(1) In general.--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

[[Page 4596]]

     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 
     electronic fund transfers); and
       ``(B) to cash checks and money orders and receive 
     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)(vi)(I) of the Federal Credit Union Act 
     (12 U.S.C. 1757(5)(A)(vi)(I)) (as so designated by section 
     303 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 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.

              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) 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. 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.''.

[[Page 4597]]

       (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);
       (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
       (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), an appropriate 
     Federal banking agency may enforce, under section 8, the 
     terms of--

[[Page 4598]]

       ``(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(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.
       (8) 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.
       (9) 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.''.
       (10) 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''.
       (11) 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), by striking ``insured bank'' and 
     inserting ``insured depository institution''; 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''.
       (12) 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)).'';
       (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''.

         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

[[Page 4599]]

     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.''.

                  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;
       (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''; and
       (2) by adding at the end the following new clause:
       ``(ii) Old records.--In the case of records of an insured 
     depository institution which are at least 10 years old as of 
     the date the Corporation is appointed as the receiver of such 
     depository institution, 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. 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 Institution.--
       (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), by striking ``the depository'' 
     each place such term appears and inserting ``any 
     depository'';
       (B) in subparagraph (B)(i), by inserting ``of which the 
     subject of the order is an institution-affiliated party'' 
     before the period at the end;
       (C) in subparagraph (C), by striking ``the depository'' 
     each place such term appears and inserting ``any 
     depository'';

[[Page 4600]]

       (D) in subparagraph (D)(i), by inserting ``of which the 
     subject of the order is an institution-affiliated party'' 
     after ``upon the depository institution''; and
       (E) by adding at the end the following new subparagraph:
       ``(E) Continuation of authority.--A Federal banking agency 
     may issue an order under this paragraph with respect to an 
     individual who is an institution-affiliated party at a 
     depository institution at the time of an offense described in 
     subparagraph (A) without regard to--
       ``(i) whether such individual is an institution-affiliated 
     party at any depository institution at the time the order is 
     considered or issued by the agency; or
       ``(ii) whether the depository institution 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 agency.''.
       (2) Clerical amendment.--Section 8(g) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1818(g)) is amended by 
     striking ``(g)'' and inserting the following new subsection 
     heading:
       ``(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), by striking ``the credit union'' 
     each place such term appears and inserting ``any credit 
     union'';
       (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. 607. 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, before acting on any application for approval of a 
     merger transaction, the responsible agency, unless the agency 
     finds that it must act immediately in order to prevent the 
     probable failure of a depository institution involved, 
     shall--
       ``(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) 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.--The penultimate 
     sentence of section 18(c)(6) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1828(c)(6)) is amended to read as follows: 
     ``If the agency has advised the Attorney General under 
     paragraph (4)(B) 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. 608. 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. 609. SHORTENING OF POST-APPROVAL ANTITRUST REVIEW PERIOD 
                   WITH THE AGREEMENT OF THE ATTORNEY GENERAL.

       (a) Antitrust Reviews Under the Bank Holding Company Act of 
     1956.--The 4th sentence of section 11(b) of the Bank Holding 
     Company Act of 1956 (12 U.S.C. 1849(b) is amended by striking 
     ``15 calendar days'' and inserting ``5 calendar days''.
       (b) Antitrust Reviews Under the Federal Deposit Insurance 
     Act.--The last sentence of section 18(c)(6) of the Federal 
     Deposit Insurance Act (12 U.S.C. 1828(c)(6)) is amended by 
     striking ``15 calendar days'' and inserting ``5 calendar 
     days''.

     SEC. 610. 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 may not be compelled to disclose 
     information received from a foreign regulatory or supervisory 
     authority if--
       ``(A) 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. 611. PROHIBITION ON PARTICIPATION BY CONVICTED 
                   INDIVIDUAL.

       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 bank holding company, any subsidiary 
     (other than a bank) of 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, 
     subsidiary, 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.''.

     SEC. 612. 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. 613. EXAMINERS OF FINANCIAL INSTITUTIONS.

       (a) Offer of Credit to Bank Examiner.--Section 212 of title 
     18, United States Code, is amended to read as follows:

     ``Sec. 212. Offer of credit to bank examiner

       ``(a) Subject to section 213(b), whoever being an officer, 
     director or employee of a financial institution extends 
     credit to any examiner which the examiner is prohibited from 
     accepting under section 213 shall be fined under this title 
     or imprisoned not more than one year, or both; and may be 
     fined a further sum equal to the amount of the credit 
     extended.
       ``(b) For purposes of this section, the following 
     definitions shall apply:
       ``(1) The term `financial institution' does not include a 
     credit union, a Federal reserve bank, a Federal home loan 
     bank, or a depository institution holding company.

[[Page 4601]]

       ``(2) The term `examiner' means any person--
       ``(A) appointed by a Federal financial institution 
     regulatory agency or pursuant to the laws of any State to 
     examine a financial institution; or
       ``(B) elected under the law of any State to conduct 
     examinations of any financial institution.
       ``(3) The term `Federal financial institution regulatory 
     agency' means--
       ``(A) the Comptroller of the Currency;
       ``(B) the Board of Governors of the Federal Reserve System;
       ``(C) the Director of the Office of Thrift Supervision;
       ``(D) the Federal Deposit Insurance Corporation;
       ``(E) the Federal Housing Finance Board;
       ``(F) the Farm Credit Administration;
       ``(G) the Farm Credit System Insurance Corporation; and
       ``(H) the Small Business Administration.''.
       (b) Acceptance of Credit by a Bank Examiner.--Section 213 
     of title 18, United States Code, is amended to read as 
     follows:

     ``Sec. 213. Acceptance of credit by bank examiner

       ``(a) Whoever, being an examiner, accepts an extension of 
     credit from any financial institution that the examiner 
     examines or has authority to examine, or from any person 
     connected with any such financial institution, shall be fined 
     under this title or imprisoned not more than one year, or 
     both; and may be fined a further sum equal to the amount of 
     the credit extended, and shall be disqualified from holding 
     office as such examiner.
       ``(b) Notwithstanding subsection (a) or section 212, a 
     Federal financial institution regulatory agency may, by 
     regulation or by order on a case-by-case basis, permit a 
     financial institution to extend credit to an examiner, and 
     permit an examiner to accept an extension of credit from a 
     financial institution, if the agency determines that the 
     extension of credit would not likely affect the integrity of 
     any examination of a financial institution. Before 
     prescribing regulations or issuing any order under this 
     subsection, a Federal financial institution regulatory agency 
     shall consult with each other Federal financial institution 
     regulatory agency with regard to any such regulation or 
     order. Any regulation prescribed by a Federal financial 
     institution regulatory agency under this subsection, may 
     exempt certain classes or categories of credit from the scope 
     of this section or section 212, and shall provide procedures 
     for examiners and financial institutions to request case-by-
     case exemption orders under this subsection, subject to 
     subsection (c).
       ``(c) In considering any request by a financial institution 
     or examiner for a case-by-case exemption order under 
     subsection (b), a Federal financial institution regulatory 
     agency shall consider such factors as the agency determines 
     to be appropriate, including--
       ``(1) whether the terms and conditions of the credit being 
     offered the examiner are generally comparable to those 
     offered by the financial institution in connection with 
     similar types of credit extended to other customers in 
     similar circumstances;
       ``(2) the nature and extent of any other relationship the 
     examiner has with the financial institution or any officer, 
     director, or employee of the financial institution;
       ``(3) the proximity in time between any examination of the 
     financial institution in which the examiner participated, or 
     is scheduled to participate, and the extension, or the offer 
     of an extension, of credit;
       ``(4) whether there are any other circumstances involving 
     the transaction, or the proposed transaction, that may be 
     perceived as providing the examiner with preferential 
     treatment; and
       ``(5) any other fact or circumstance the agency may 
     consider to be appropriate under the circumstances.
       ``(d) Notwithstanding subsection (a) or section 212, an 
     examiner employed by a Federal financial institution 
     regulatory agency may apply for and receive a credit card, or 
     otherwise be approved as a cardholder, under any credit card 
     account under an open end consumer credit plan, to the extent 
     the terms and conditions applicable with respect to such 
     account, and any credit extended under such account, are no 
     more favorable generally to the examiner than the terms and 
     conditions that are generally applicable to credit card 
     accounts offered by the same financial institution to other 
     cardholders under open end consumer credit plans.
       ``(e) For purposes of this section, the following 
     definitions shall apply:
       ``(1) The terms `examiner', `Federal financial institution 
     regulatory agency', and `financial institution' have the same 
     meaning as in section 212.
       ``(2) The term `credit' means the right granted by a 
     creditor to a debtor to defer payment of debt or to incur 
     debt and defer its payment.
       ``(3) The term `creditor' refers only to a person who both 
     (A) regularly extends, whether in connection with loans, 
     sales of property or services, or otherwise, consumer credit 
     which is payable by agreement in more than four installments 
     or for which the payment of a finance charge is or may be 
     required, and (B) is the person to whom the debt arising from 
     the consumer credit transaction is initially payable on the 
     face of the evidence of indebtedness or, if there is no such 
     evidence of indebtedness, by agreement. Notwithstanding the 
     preceding sentence, in the case of an open-end credit plan 
     involving a credit card, the card issuer and any person who 
     honors the credit card and offers a discount which is a 
     finance charge are creditors.
       ``(4) The term `consumer', when used with reference to an 
     open end credit plan, means a credit plan under which the 
     party to whom credit is offered or extended is a natural 
     person, and the money, property, or services which are the 
     subject of any transaction under the plan are primarily for 
     personal, family, or household purposes.
       ``(5) The term `open end credit plan' means a plan under 
     which the creditor reasonably contemplates repeated 
     transactions, which prescribes the terms of such 
     transactions, and which provides for a finance charge which 
     may be computed from time to time on the outstanding unpaid 
     balance. A credit plan which is an open end credit plan 
     within the meaning of the preceding sentence is an open end 
     credit plan even if credit information is verified from time 
     to time.
       ``(6) The term `credit card' means any card, plate, coupon 
     book or other credit device existing for the purpose of 
     obtaining money, property, labor, or services on credit.
       ``(7) The term `cardholder' means any person to whom a 
     credit card is issued or any person who has agreed with the 
     card issuer to pay obligations arising from the issuance of a 
     credit card to another person.
       ``(8) The term `card issuer' means any person who issues a 
     credit card, or the agent of such person with respect to such 
     card.''.
       (c) Clerical Amendments.--The table of sections for chapter 
     11 of title 18, United States Code, is amended by striking 
     the items relating to sections 212 and 213 and inserting the 
     following new items:

``212. Offer of credit to bank examiner.
``213. Acceptance of credit by bank examiner.''.

     SEC. 614. PARITY IN STANDARDS FOR INSTITUTION-AFFILIATED 
                   PARTIES.

       Section 3(u)(4) of the Federal Deposit Insurance Act (12 
     U.S.C. 1813(u)(4)) is amended by striking ``knowingly or 
     recklessly''.

     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.

[[Page 4602]]

       ``(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. COMPENSATION OF FEDERAL HOME LOAN BANK DIRECTORS.

       Section 7(i) of the Federal Home Loan Bank Act (12 U.S.C. 
     1427(i)) is amended to read as follows:
       ``(i) Directors' Compensation.--
       ``(1) In general.--Each Federal home loan bank may pay the 
     directors on the board of directors of the bank reasonable 
     compensation for the time required of such directors, and 
     reasonable expenses incurred by the directors, in connection 
     with service on the board of directors, in accordance with 
     resolutions adopted by the board of directors and subject to 
     the approval of the board.
       ``(2) Annual report by the board.--Information regarding 
     compensation and expenses paid by the Federal home loan banks 
     to the directors on the boards of directors of the banks 
     shall be included in the annual report submitted to the 
     Congress by the Board pursuant to section 2B(d).''.

     SEC. 617. EXTENSION OF TERMS OF FEDERAL HOME LOAN BANK 
                   DIRECTORS.

       (a) In General.--Section 7(d) of the Federal Home Loan Bank 
     Act (12 U.S.C. 1427(d)) is amended--
       (1) in the first sentence, by striking ``3 years'' and 
     inserting ``4 years''; and
       (2) in the 2nd sentence--
       (A) by striking ``Federal Home Loan Bank System 
     Modernization Act of 1999'' and inserting ``Financial 
     Services Regulatory Relief Act of 2003''; and
       (B) by striking ``1/3'' and inserting ``1/4''.
       (b) Prospective Application.--The amendment made by 
     subsection (a) shall not apply to the term of office in which 
     any director of a Federal home loan bank is serving as of the 
     date of the enactment of this Act, including any director 
     elected or appointed to fill a vacancy in any such term of 
     office.

     SEC. 618. BIENNIAL REPORTS ON THE STATUS OF AGENCY EMPLOYMENT 
                   OF MINORITIES AND WOMEN.

       (a) In General.--Before December 31, 2003, 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''--
       (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) In general.--The appropriate State bank supervisor of 
     the home State of an insured State bank has authority to 
     examine and supervise the bank. The State bank supervisor of 
     the home State of an insured State bank shall exercise its 
     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. Except as expressly provided in a cooperative 
     agreement between the State bank supervisors of the home 
     State and host State(s) 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.--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--
       ``(A) 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
       ``(B) 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. The State bank supervisor of the home State 
     of an insured State bank shall 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. 
     The State bank supervisor of the bank's home State shall 
     provide such notice 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.--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. Except for State bank supervisors, no provision of 
     this subsection (h) 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) The terms `host State', `home State', and `out-of-
     State bank' have the same meanings as in section 44(g).
       ``(B) 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) 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--

[[Page 4603]]

       ``(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) 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.''.

              TITLE VII--CLERICAL AND TECHNICAL AMENDMENTS

     SEC. 701. 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. 702. 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 ``under 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 section 207(c)(8)(D)(ii)(I), insert a closing 
     parenthesis after ``Act of 1934''.
       (23) In the heading for subparagraph (A) of section 
     207(d)(3), strike ``to'' and insert ``with''.
       (24) In section 207(f)(3)(A), strike ``category or 
     claimants'' and insert ``category of claimants''.
       (25) In section 209(a)(8), strike the period at the end and 
     insert a semicolon.
       (26) In section 216(n), insert ``any action'' before ``that 
     is required''.
       (27) In section 304(b)(3), strike ``the affairs or such 
     credit union'' and insert ``the affairs of such credit 
     union''.
       (28) In section 310, strike ``section 102(e)'' and insert 
     ``section 102(d)''.

     SEC. 703. 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. 704. 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)''.

  The CHAIRMAN pro tempore. No amendment to the committee amendment is 
in order except those printed in House Report 108-439. Each amendment 
may be offered only in the order printed in the report, by a Member 
designated in the report, shall be considered read, shall be debatable 
for the time specified in the report, equally divided and controlled by 
the proponent and an opponent, shall not be subject to amendment, and 
shall not be subject to a demand for division of the question.
  It is now in order to consider amendment No. 1 printed in House 
Report 108-439.


                  Amendment No. 1 Offered by Mr. Oxley

  Mr. OXLEY. Mr. Chairman, I offer an amendment made in order under the 
rule.
  The CHAIRMAN pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Oxley:
       Page 9, strike line 3 and all that follows through page 10, 
     line 2 (and redesignate subsequent sections and any cross 
     reference to any such section and conform the table of 
     contents accordingly).
       Page 31, line 2, strike ``main'' and insert ``home''.
       Page 31, strike line 3 and all that follows through page 
     32, line 13 (and conform the table of contents accordingly).
       Page 37, strike lines 16 and 17 and insert the following 
     new heading:
       ``(b) Additional Investment Authority.--
       Page 37, line 18, strike ``A Federal'' and insert ``In 
     addition to any investments otherwise authorized, a 
     Federal''.
       Page 47, after line 5, insert the following new paragraphs 
     (and redesignate the subsequent paragraph accordingly):
       (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--

       ``(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.''.

[[Page 4604]]

       (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''.
       Page 47, line 21, insert ``or are applicable to an insured 
     State nonmember bank under section 18(d)(3) of the Federal 
     Deposit Insurance Act'' after ``Revised Statutes of the 
     United States''.
       Page 51, line 4, insert before the semicolon at the end 
     ``and inserting the following new paragraph''.
       Page 51, after line 4, insert 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).''.
       Page 58, line 19, insert ``(i)'' after ``section 
     38(e)(2)(E)''.
       Page 88, strike line 1 and all that follows through the 2 
     items following line 15 on page 94 (and redesignate 
     subsequent sections and any cross reference to any such 
     section and conform the table of contents accordingly).

  The CHAIRMAN pro tempore. Pursuant to House Resolution 566, the 
gentleman from Ohio (Mr. Oxley) and a Member opposed each will control 
10 minutes.
  The Chair recognizes the gentleman from Ohio (Mr. Oxley).


                         Parliamentary Inquiry

  Mr. FRANK of Massachusetts. Mr. Chairman, I have a parliamentary 
inquiry.
  The CHAIRMAN pro tempore. The gentleman will state it.
  Mr. FRANK of Massachusetts. I do not see anyone on the floor who is 
opposed to this amendment. Is it then permissible under the rules for 
me to request the rest of the time?
  The CHAIRMAN pro tempore. The gentleman may request unanimous 
consent.
  Mr. OXLEY. Mr. Chairman, I yield myself 3 minutes.
  Mr. Chairman, my amendment makes certain technical and conforming 
changes to the bill requested by the Federal financial regulators, 
deletes sections from the bill reported by the Committee on Financial 
Services that have been superseded by other legislative or judicial 
developments, and, most importantly, incorporates compromise language 
developed by two highly respected members of our committee, the 
gentleman from Ohio (Mr. Gillmor) and the gentleman from Massachusetts 
(Mr. Frank), limiting the scope of the de novo branching authority 
provided for in section 401 of the bill.
  As reported by the Committee on Financial Services, section 401 
eliminates current statutory restrictions on banks' ability to branch 
across State lines. When the committee marked up H.R. 1375, the 
gentleman from Ohio (Mr. Gillmor) and other Members expressed concerns 
about extending this de novo branching authority to industrial loan 
companies, or ILCs, that are owned by commercial companies, such as 
retailers and auto manufacturers. Since the markup, the gentleman from 
Ohio (Mr. Gillmor) and the gentleman from Massachusetts (Mr. Frank) 
have worked together to develop language that would permit ILCs owned 
by financial firms to avail themselves of the new de novo branching 
authority while prohibiting branching by ILCs owned by nonfinancial or 
commercial firms that did not become insured depositories until after a 
grandfather date specified in the amendment.
  Like any good compromise, the Gillmor-Frank amendment does not embody 
total consensus. There are those in this body who believe we should 
place no restrictions on the activities of ILCs that do not also apply 
to other depository institutions and those on the other hand who feel 
equally strongly that the ILC charter has been expanded beyond its 
original purpose and should be scaled back. Indeed, we have heard 
strong debate on that during general debate. On the whole, I believe 
that the Gillmor-Frank language strikes a reasonable compromise on a 
very difficult issue, and I am pleased to include it in this manager's 
amendment.
  Mr. Chairman, I urge all Members to support the manager's amendment.
  Mr. Chairman, I reserve the balance of my time.
  The CHAIRMAN pro tempore. Does any Member claim time in opposition to 
the amendment?
  Mr. FRANK of Massachusetts. Mr. Chairman, if it is appropriate, I 
will, although I am not in opposition.
  The CHAIRMAN pro tempore. If not, without objection, the gentleman 
from Massachusetts may claim the time otherwise reserved for opposition 
to the amendment.
  There was no objection.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  I just want to address one important issue on this question of the 
industrial loan companies that the gentleman from Iowa had raised 
previously. It is clear, as we all agree, that the ILCs are in fact 
regulated. They are regulated by a Federal bank regulator, the FDIC. 
The element of unregulation goes with holding companies. Bank holding 
companies are regulated by the Federal Reserve. Heretofore, these 
holding companies have not had, in my experience, much independent 
existence and so the regulation by the FDIC has done it.
  I will say to the gentleman from Iowa, while he is not here right 
now, he has been very conscientious on this bill and is probably 
following this, that I would be prepared to work with him on the 
question of whether or not an appropriate form of regulation for the 
holding companies ought to exist. Perhaps the FDIC or some other entity 
should have it. I do not think we have a regulatory hole. We have not 
had one historically. I do not think we are creating one. But I would 
note the only potential argument is there would not be a regulation of 
the holding company. All of the bank activities of the ILCs would be 
regulated by the FDIC.
  Having said that, I just would repeat what the gentleman from Ohio 
essentially said. This is, I think, an effort to fine-tune regulation. 
I do not believe in any regard it cuts back excessively. I did disagree 
with the proposal to cut the review time for antitrust to 5 days. We 
have an amendment that will be coming soon from the gentlewoman from 
California that will push it back up to 15, not exactly where I would 
like it. We then will have a couple of other amendments to deal with. 
But I would note that we are going to correct what I think is one of 
the flaws in this bill.
  Mr. Chairman, I reserve the balance of my time.
  Mr. OXLEY. Mr. Chairman, I am pleased to yield 3 minutes to the 
distinguished gentleman from Ohio (Mr. Gillmor).
  Mr. GILLMOR. Mr. Chairman, I rise in strong support of the manager's 
amendment to this bill. I want to thank the gentleman from Ohio (Mr. 
Oxley) both for his outstanding work on this bill and also for allowing 
an essential provision authored by myself and the gentleman from 
Massachusetts (Mr. Frank) in the manager's amendment. I want to thank 
the gentleman from Massachusetts for the very effective and the 
bipartisan way that he has worked to make this amendment happen. Our 
compromise language closes a dangerous loophole that would allow large 
commercial entities to obtain bank charters and to be unregulated at 
the holding company level in providing banking products and services in 
all 50 States.
  Section 401 expands the authority of banks and industrial loan 
companies, or ILCs, to branch across State lines on a de novo basis 
rather than acquiring an existing bank. That means if a large retailer 
were to acquire an ILC, they could not only enter the banking industry 
without being subject to the Bank Holding Company Act but branch freely 
across the country. This would clearly be in defiance of our 
longstanding tradition of separating banking and commerce, most 
recently affirmed by Congress in the Gramm-Leach-Bliley Act of 1999. 
Large retailers have attempted to acquire, and in some cases have 
acquired, ILCs in several States and continue to express

[[Page 4605]]

publicly their desire to offer financial services to their customers. 
While this amendment grandfathers some ILCs which were owned by 
commercial firms before, it provides that any ILC acquired in the 
future must play by the same rules in interstate branching as other 
financial institutions. There are some commercial or industrial 
companies who oppose the manager's amendment. Some companies want to 
prospectively create a giant loophole for themselves that would enable 
them to branch interstate in a way that no one else can. They include 
companies such as Wal-Mart, John Deere, Target, among others. The 
manager's amendment closes the loophole and simply requires they be 
treated the same as anybody else.
  The existing business relationships of longstanding ILCs supported by 
FDIC insurance are protected by our language in the form of a 
grandfather clause. However, the risks associated with the mixing of 
banking and commerce are real and the compromise provisions contained 
in this language such as that allowing corporate reorganizations are 
not in any way meant to allow circumvention of our overall goal of 
preventing the acquisition of a grandfathered ILC by a commercial 
parent.
  I urge support of the manager's amendment.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield back the balance of 
my time.
  Mr. OXLEY. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN pro tempore. The question is on the amendment offered by 
the gentleman from Ohio (Mr. Oxley).
  The amendment was agreed to.
  The CHAIRMAN pro tempore. It is now in order to consider amendment 
No. 2 printed in House report 108-439.

                              {time}  1230


                 Amendment No. 2 Offered by Ms. Waters

  Ms. WATERS. Mr. Chairman, I offer an amendment.
  The Chairman pro tempore (Mr. Simmons). The Clerk will designate the 
amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Ms. Waters:
       Page 84, strike line 1 and all that follows through line 13 
     (and redesignate subsequent sections and any cross reference 
     to any such section and conform the table of contents 
     accordingly).

  The CHAIRMAN pro tempore. Pursuant to House Resolution 566, the 
gentlewoman from California (Ms. Waters) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentlewoman from California (Ms. Waters).
  Ms. WATERS. Mr. Chairman, I yield myself such time as I may consume.
  I would first like to thank the gentleman from Ohio (Mr. Oxley) and 
the gentleman from Massachusetts (Mr. Frank) for the leadership that 
they have provided in this committee not only on this issue but on all 
of the issues that we work with on the Committee on Financial Services. 
I think someone said it earlier, and I agree, I believe it was the 
gentleman from Alabama (Mr. Bachus) who said it, we do have a way of 
working together, and we do have a way of respecting the work that is 
done on both sides of the aisle; and I am appreciative for the 
comradery that has developed out of that committee. So with that, I 
would like to thank also the chairman and the members of the Committee 
on Rules for making my rule in order.
  During the course of a bank merger process, both the Federal 
financial supervisory agency and the Department of Justice review the 
merger proposal for competitive concerns. After a Federal banking 
agency approves a merger, DOJ has 30 days to decide whether to 
challenge the merger approval on antitrust grounds. At a minimum, the 
merging banks must now wait 15 days before completing their merger. As 
proposed, section 609 would reduce the minimum 15-day waiting period to 
5 days when the Department of Justice indicates it will not file suit 
challenging the merger approval order.
  This amendment is designed to preserve the existing 15-calendar-day 
waiting period in which members of the public may challenge a bank 
merger after the Department of Justice has approved a merger between 
banks or between bank-holding companies. This mandatory waiting period 
protects the rights of the public to raise concerns with respect to the 
propriety of bank mergers once the Department of Justice decides 
whether to challenge a merger on antitrust grounds. Currently, banking 
law allows third parties, other than Federal banking agencies or DOJ, 
to file suit during the post-approval waiting period. Such private 
enforcement is critical to ensuring that important policy concerns 
including the adequacy of the banks' Community Reinvestment Act 
performance, are taken into account when Federal courts evaluate 
whether an agency's approval of a proposed bank merger should be 
upheld. Such private suits are the vehicle through which community 
organizations may gain information about a proposed bank merger to 
ensure that the merger will not result in disproportionate branch 
closures in low-income or minority communities.
  The existing law strikes the proper balance between the right of 
third parties to seek judicial review of bank merger approval orders 
and the rights of parties to the merger to finalize their transaction. 
Section 609 of the bill as reported would seriously impair the right of 
community organizations to seek this judicial review of Federal bank 
merger approval orders. The current 15-day waiting period should be 
preserved.
  So my amendment has been made in order under the proposed rule, and I 
would ask support for the amendment.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN pro tempore (Mr. Sweeney). Does the gentleman from Ohio 
(Mr. Oxley) rise in opposition to the amendment?
  Mr. OXLEY. Mr. Chairman, I am not opposed.
  The CHAIRMAN pro tempore. Without objection, the gentleman is 
recognized for 5 minutes.
  There was no objection.
  Mr. OXLEY. Mr. Chairman, I yield myself such time as I may consume.
  We are prepared to accept the amendment, and I say to the gentlewoman 
from California, good work on this issue.
  Mr. OXLEY. Mr. Chairman, I have no further requests for time, and I 
yield back the balance of my time.
  The CHAIRMAN pro tempore. The question is on the amendment offered by 
the gentlewoman from California (Ms. Waters).
  The amendment was agreed to.
  The CHAIRMAN pro tempore. It is now in order to consider amendment 
No. 3 printed in House Report 108-439.


                 Amendment No. 3 Offered by Mr. Bachus

  Mr. BACHUS. Mr. Chairman, I offer an amendment.
  The Chairman pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Bachus:
       Page 94, strike line 16 and all that follows through line 
     20 (and redesignate subsequent sections and any cross 
     reference to any such section and conform the table of 
     contents accordingly).

  The CHAIRMAN pro tempore. Pursuant to House Resolution 566, the 
gentleman from Alabama (Mr. Bachus) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentleman from Alabama (Mr. Bachus).
  Mr. BACHUS. Mr. Chairman, I yield myself 3 minutes.
  Mr. Chairman, my amendment simply strikes section 614, and what 614 
does is, in a read relief bill, it actually shifts a burden to any 
independent contractor that deals with the banks, and it creates a 
presumption or a burden of proof on any independent contractor dealing 
with a bank in an enforcement provision by one of the regulatory 
agents. It puts a burden of proof on them in an administrative court 
hearing to basically prove their innocence. And they have no right to a 
trial by jury. They have no right to an appeal and trial de novo. Their 
assets can be frozen while these hearings are going on. And I think 
that that is a tremendous hammer to give to the regulatory

[[Page 4606]]

bodies, one that we certainly do not need to do in this bill.
  What section 614 would do, and I will be brief in this, is it simply 
equates and says that an independent contractor dealing with a bank 
will be treated as having the same knowledge or an equivalent knowledge 
as a bank insider, a director or a board member of that bank. So if 
they are an attorney, if they are an accountant, if they are an 
appraiser, if they are a Realtor, or if they are any of these 
affiliated parties, they are treated as if they have the inside 
knowledge of a bank insider; and that is simply not the case.
  Not only are they equated with that knowledge, but when these charges 
are brought against them, as I said a minute ago, they have no right to 
a jury trial, and the administrative judge that makes a determination 
on whether they are guilty or innocent is appointed by the regulatory 
agent. And right now the burden of proof is on the regulatory agent to 
prove that the insider knew, had knowledge, or was reckless. And I 
think that standard proved to be the right standard during the savings 
and loan crisis during the mid-1980s. There has been no shortage of 
enforcement action by the regulators. So I simply say, let us strike 
section 614. The gentlewoman from Oregon (Ms. Hooley), the gentleman 
from Alabama (Mr. Davis), and the gentleman from Virginia (Mr. Cantor) 
are supporting me in this amendment, as are the American Bar 
Association, the appraisers, the accounting organizations, all of which 
simply are aghast that we would put some provision like this in a bill 
which would give the regulators such ominous authority.
  Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I rise in opposition. Mr. 
Chairman, I yield myself 3 minutes.
  This is one of the two disagreements here. I should note that the 
section that is in the bill that the gentleman from Alabama seeks to 
strike was requested by the Federal Deposit Insurance Corporation. What 
they said was they want to be able to issue their orders. They do not 
have criminal procedures here. This does not take away one's right to a 
jury trial for any criminal trial. The FDIC has administrative powers. 
They can order one to cease and desist from a certain practice; they 
can debar one from working.
  What they are saying is they do not want to be unable to bar people 
or to order a stop to people who are being grossly negligent. The 
language that will be governing the FDIC's regulating authority with 
regard to lawyers and others who work on banking matters, these are 
people that are hired by banks as professionals; and let me say there 
was some argument before that, well, these people should not be held to 
knowing banking law. We are not talking about the guys who install the 
drywall. We are not talking about the people who do the valet parking 
at the big soirees. We are talking about lawyers and other 
professionals. And, yes, I do believe it is reasonable to hold lawyers 
to a standard of knowing bank law when they do lawyering for banks. And 
what the FDIC said is we do not want to have to prove that they were 
reckless or deliberate. If they are grossly negligent, we want to be 
able to step in.
  It is not a criminal proceeding. It is the FDIC. The FDIC wants to be 
able to hold professionals who are offering their professional services 
voluntarily to banks and working on bank matters to a knowledge of 
banking law to the extent if they are negligent, or even grossly 
negligent, if this amendment said the standard was gross negligence, it 
would be less of a problem for me, but this says for the FDIC to be 
able to discipline an attorney or any other professional servicing a 
bank, it must be a standard of either knowledge or recklessness of the 
conduct, and I think that is a mistake.
  We know that there is not always a great difference between the 
people who work full-time for the bank and the people who are working 
as professionals for the bank. There are people who specialize, lawyers 
who specialize, in serving banks, other professionals who would 
specialize in serving banks. It seems to me entirely reasonable for 
them to be held to that standard.
  So I do agree that we want to be deregulatory here, and a few minutes 
ago some of us were saying it was a good thing we have the FDIC. They 
are the regulators of the ILCs. They are an important regulator. This 
is a case where the regulators have asked us to keep a standard for 
them which they use when they are dealing with the banks themselves, 
and they want to be able to apply it to the independent contractors. I 
think it would be a mistake to give the FDIC significantly less power 
to act in enforcement proceedings against lawyers and other 
professionals than they now have.
  Mr. Chairman, I reserve the balance of my time.


                         Parliamentary Inquiry

  Mr. FRANK of Massachusetts. Mr. Chairman, I have a parliamentary 
inquiry.
  The CHAIRMAN pro tempore. The gentleman will state the inquiry.
  Mr. FRANK of Massachusetts. Mr. Chairman, do I have the right to 
close on this amendment?
  The CHAIRMAN pro tempore. Yes, the gentleman will. The manager in 
opposition has the right to close.
  Mr. BACHUS. Mr. Chairman, I yield back the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield back the balance of 
my time.
  The CHAIRMAN pro tempore. The question is on the amendment offered by 
the gentleman from Alabama (Mr. Bachus).
  The amendment was agreed to.
  The CHAIRMAN pro tempore. It is now in order to consider amendment 
No. 4 printed in House Report 108-439.


                 Amendment No. 4 Offered by Mr. Weiner

  Mr. WEINER. Mr. Chairman, I offer an amendment.
  The Chairman pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Mr. Weiner:
       Page 67, after line 13, insert the following new section 
     (and conform the table of contents accordingly):

     SEC. 410. CERTAIN CHECK DISHONORMENT FEES PROHIBITED.

       (a) In General.--Section 607 of the Expedited Funds 
     Availability Act (12 U.S.C. 4006) (relating to miscellaneous 
     provisions) is amended by adding at the end the following new 
     subsection:
       ``(f) Fees on Dishonored Checks.--
       ``(1) Receiving depository institution.--In the case of a 
     check drawn on an account at an originating institution which 
     is dishonored by the originating institution due to the lack 
     of sufficient funds in such account to pay the check, a 
     receiving depository institution may not impose any fee on 
     the depositor, in connection with such check, due to such 
     dishonorment.
       ``(2) Rule of construction.--No provision of this section 
     shall be construed as affecting any intervening depository 
     institution or the costs of the services provided by such 
     depository institution.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply after the end of the 180-day period beginning on 
     the date of the enactment of this Act.

  The CHAIRMAN pro tempore. Pursuant to House Resolution 566, the 
gentleman from New York (Mr. Weiner) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentleman from New York (Mr. Weiner).
  Mr. WEINER. Mr. Chairman, I yield 1 minute to the gentleman from 
Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. Mr. Chairman, this is a very proconsumer 
effort. I do think people ought to be penalized when they can control 
it. But as the gentleman from New York as pointed out, bank practices 
today blame the victim. If one is a recipient of a bad check and they 
in good faith deposit it in their bank, they are penalized. Indeed, I 
would contrast this with the previous amendment. If one is an attorney 
now under this bill and they behave with gross negligence, the FDIC 
cannot do anything about it; but if they are the consumer who gets a 
bad check, they get whacked. I do not think it is anticapitalist to say 
that people who are the victims of bad checks once should not be 
victimized by bad checks twice. People have said, well, we should give 
them an incentive. As the gentleman from New York had said, I do not 
know many people who say I do not mind getting a bad check as long as 
my bank does not hurt me.

[[Page 4607]]

I think there is already every incentive they have got to say no to it. 
We are not talking about someone who takes eight bad checks from the 
same person. The first time someone victimizes someone with a check 
that has insufficient funds, they are victimized.
  This amendment is a good amendment.
  Mr. WEINER. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, this is a very easy-to-understand issue, but a very 
difficult-to-understand fee. When someone writes someone a check and 
they do not have the funds in that account, they pay a penalty. They 
pay a fine. They violated the rules of the transaction. When they 
receive the check, what have they done wrong? What rule have they 
violated? What sanctions should be against someone for receiving the 
bad check? And the gentleman from Massachusetts was absolutely correct. 
This is a proconsumer measure. But let us remember who the recipients 
of most bounced checks are. They are small businesses, they are 
supermarkets, they are liquor stores, they are appliance stores that 
are not only out the money, they are out the goods. It simply makes no 
sense.
  I have seen some of the arguments against this. They say, well, it is 
going to increase the cost of banking for consumers. If there is a cost 
to this transaction, I ask only one question: Why does the victim pay 
it? All my amendment does is it says they cannot charge the victim of a 
bad check for that action.

                              {time}  1245

  Why should the victim pay? Why should the victim pay?
  Mr. Chairman, I reserve the balance of my time.
  Mr. BACHUS. Mr. Chairman, I rise in opposition to the Weiner 
amendment, and I yield myself such time as I may consume.
  Mr. Chairman, what this amendment does is it says, when a customer 
accepts a bad check from a third party and deposits that check into his 
account and the bank takes a hit, and it does take a hit anywhere from, 
according to the Massachusetts Division of Banks, which is one of the 
more liberal supervisors, it says that cost can be as much as $15, 
$14.46. It can be as little as $1 or $2. But this is not a pro-consumer 
bill; this is, in my mind, a pro-either customer who accepts a bad 
check, or a pro-person who issues worthless checks. I mean, the only 
person that is rewarded by this provision is someone who issues a bad 
check.
  As drafted, it is not even clear whether the fee prohibition will 
apply only to the customer who accepts a bad check but, apparently, the 
prohibition will also pass through to the person who wrote the bad 
check.
  So we have the perverse situation here where banks cannot charge for 
worthless checks. This provision is actually going to discourage 
responsibility by customers. It is going to prohibit the bank from 
passing that charge on to the customer who writes the check. In fact, 
what it could do is, if this thing passes, a fraudulent attempt could 
simply be to write a bunch of bad checks, deposit them in my account or 
deposit them in a friend's account, and we could swap and we could 
start inundating the bank with worthless checks.
  Who would be saddled with that? Well, according to the gentleman from 
New York (Mr. Weiner), the bank, because the bank cannot pass it on to 
the customer, so what would the bank do? It would raise its fees to 
everyone. The end result would be that those customers, those of us who 
are diligent in determining who we are dealing with and accepting 
checks from other parties, would end up with the burden.
  This really creates an unfair situation where customers who do not 
deposit bad checks or high-risk checks subsidize those who do on the 
cost of handling those items. In my mind, it is just the American 
system; banks are no different from you and I. When they incur costs, 
they ought to be able to charge the party responsible for causing that 
cost. Depository institutions should be allowed to charge those 
customers who cause the institution to incur the cost. It is just 
simply the way we have done business in this country since the start. 
We are simply absolving people of responsibility who are the people in 
the position to take responsibility. A customer who deposits a bad 
check has the opportunity, he often has the opportunity to pass any 
fees that are assessed back to the person who wrote the check.
  So even if this is drafted, and I believe it is drafted where it is 
just a prohibition, it does not say that they can put it on anybody. 
They cannot put it on their customer. They certainly do not have any 
connection or relationship with the third party who wrote the bad 
check, so it is going to be almost very impractical, if not illegal 
under this provision, for them to charge the person who wrote the bad 
check.
  Right now, I think it works very well. A landlord gets a bad check 
from a renter, the landlord takes that check down and deposits it to 
the bank, the bank gets stiffed with a bad check, it passes it back to 
the landlord, the landlord turns around and charges it to the renter. 
That is the way it ought to be. The bank, and all of the customers of 
the bank, should not have to pay for a renter who writes a worthless 
check to the landlord. That ought to be charged to the landlord, and 
then they can pass that back to the renter.
  Let me simply close by saying this is a regulatory relief bill that 
we promised to the financial institutions because of all of the costs 
they were incurring as a result of the PATRIOT Act. It is not a 
regulatory burden bill. We do not reward someone with more punishment. 
We have imposed all of these money-laundering requirements on them, and 
we told them we would come back in this legislation and help them 
recover some of the costs, and thrifts are going to be stuck with this, 
credit unions cannot charge. It is going to really hurt a lot of 
institutions and a lot of customers.
  Mr. WEINER. Mr. Chairman, I yield myself such time as I may consume.
  I do not know where to start. First, let us start about the mistake 
that the gentleman made about the bill, line 13, page 1: may not impose 
a fee on the depositor. Nothing in this bill stops the bank from 
charging a fee to the person who bounced the check. Let me say it 
again. Nothing in this bill stops the person who bounced the check from 
getting a fee. You can charge them $10,000. I think it is too high, but 
$10,000.
  Here is the scenario I would like to explain to the gentleman. The 
gentleman from Alabama (Mr. Bachus) knows me. The gentleman and I serve 
on a committee together. I give the gentleman a check. I have violated 
the rules. I give the gentleman a check that does not have enough money 
to back it. Can the gentleman check whether I have enough money in the 
account? Under the rules of privacy we passed here, he can. He does 
everything exactly according to Hoyle.
  The gentleman is now the victim of a bad check. The gentleman is the 
victim of a bad check, I say to the gentleman. I leave town. I do not 
get reelected. I get elected mayor. Stranger things have happened. And 
the gentleman from Alabama is now out the money for the check, and his 
bank is charging him a fee.
  I want to make sure the gentleman understands this, because he 
misstated it consistently over 5 minutes. There is nothing stopping the 
bank from penalizing the person who bounces the check. This is about 
the person receiving the bad check. And this notion about the landlord 
and the oppression that we are putting on people, do my colleagues know 
who benefits from this bill the most? Those that are represented by the 
food marketing institute, local supermarkets, local liquor stores, 
local bodegas, people who receive checks in large numbers, who do 
everything according to the rules the gentleman from Alabama just 
described; and they are facing a sanction for the benefit of having a 
bounced check. The gentleman says, well, we are sticking this to the 
banks. No. There is no reason that we should stick this to anyone, but 
especially not the victim.
  To oppose this amendment is to say, I believe the person who had the 
check

[[Page 4608]]

bounced against them should pay this fee. I would say, Mr. Chairman, 
there are a lot of reasons why I can see the banks are so jealously 
guarding this. They all have dollar signs after them. They make a lot 
of money from this practice. But, frankly, it is patently unfair, 
unfair to individual consumers, unfair to that landlord. In the 
gentleman's description, the landlord is out the rent, and he is out 
the fee. What did that guy do wrong? What is the purpose of a penalty 
if it is not penalizing anything that he can avoid? He followed every 
single rule.
  And I would ask the gentleman again, you are running a supermarket, 
you get a check. You say, I want to see your ID; I want to see your 
driver's license. I want a photograph. I want to know where you live. I 
want to know the names of your sisters and brothers. And they take the 
check, following every rule the bank set up, and it bounces. What have 
you done wrong? How do you avoid that sanction? What kind of a law do 
we ever pass here where we tell how you avoid the penalty? It is 
patently unfair.
  I want to reiterate this. This is a consumer issue, because consumers 
get bad checks. Ninety-nine percent of these checks are to businesses, 
small businesses who use this check as an article of faith, and we 
should not penalize them for doing that.
  The CHAIRMAN pro tempore (Mr. Sweeney). The gentleman's time has 
expired. All time has expired.
  The question is on the amendment offered by the gentleman from New 
York (Mr. Weiner).
  The question was taken; and the Chairman pro tempore announced that 
the noes appeared to have it.
  Mr. WEINER. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from New York 
(Mr. Weiner) will be postponed.
  It is now in order to consider amendment No. 5 printed in House 
report 108-439.


          Amendment No. 5 Offered by Ms. Jackson-Lee of Texas

  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The Chairman pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 5 offered by Ms. Jackson-Lee of Texas:
       Page 83, line 4, strike the closing quotation marks and the 
     2nd period.
       Page 83, after line 4, insert the following new 
     subparagraph:
       ``(C) Sense of the congress.--It is the sense of the 
     Congress that, when a requesting agency requires expeditious 
     action on an application for a merger transaction, 
     consideration should be made as to the impact the merger 
     transaction will have on corporate and individual customers 
     in an effort to ensure that no harmful effects will result 
     from the merger transaction.''.

  The CHAIRMAN pro tempore. Pursuant to House Resolution 566, the 
gentlewoman from Texas (Ms. Jackson-Lee) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield myself such time as I 
may consume.
  Let me, first of all, add my appreciation to the chairman of the full 
committee and the ranking member of the full committee and of course 
the subcommittee Chair and ranking member, because I believe that they 
understand that everyone in every community has experienced the impact 
which my amendment is attempting to address.
  We understand that this is a Nation now of mergers and acquisitions, 
but the real question on bank mergers is what happens to the friendly 
bank officer that most of us are familiar with? What happens to the 
civic spirit? What happens to the decision-making, and what happens to 
the jobs?
  My amendment is simple. It says that when there is an expedited 
process in a merger transaction, consideration should be made as to the 
impact the transaction will have on corporate and individual customers 
in an effort to ensure that no harmful effects will result from the 
merger transaction.
  What does that mean? It means that we know when there are large 
conglomerates coming together, whether you are in an urban area or 
whether you are in a rural area, there is going to be some loss. What 
is that loss? First of all, we may lose something that this body has 
been discussing over a number of months because of the large percentage 
of unemployment in our Nation. We will lose jobs in a certain area. But 
then we will lose something that is very important that many of us do 
not focus on: the decision-making capacity to lend monies to the 
community, home loans, bank loans dealing with businesses, maybe even 
car loans.
  I have in my possession information that shows that in rural Texas, 
42 percent of those who apply for loans are able to get it; but then 
the other remaining body does not. So there is a problem. When a 
conglomerate will merge with smaller banks in rural areas, it takes 
away that ability to gain the right to a decision to secure monies.
  Mr. Chairman, this is again a simple amendment that I would ask my 
colleagues to support enthusiastically, to not abdicate our 
responsibilities of oversight when a merger comes about in terms of its 
impact on our communities.
  Mr. Chairman, I reserve the balance of my time.
  Mr. BACHUS. Mr. Chairman, I rise in opposition to the amendment, and 
claim that time, and I yield myself such time as I may consume.
  Mr. Chairman, I believe that the gentlewoman's concerns are already 
fully addressed in this legislation. I believe that because the current 
law requires Federal financial regulators to closely examine the impact 
of any mergers, not only on the financial system, but also on the 
communities involved. If my colleagues will look at 12 USC 1842, it 
says: ``A Federal financial regulator may not approve any merger where 
the proposed acquisition merger or consolidation may substantially 
lessen competition, tend to create a monopoly, or restrain trade, 
unless it finds that the anti-competitive effects of the proposed 
transaction are clearly outweighed in the public interest by the 
probable effect of the transaction in meeting the convenience and needs 
of the communities to be served.''
  This section of the U.S. Code goes on to state that in every 
acquisition, merger, or consolidation the regulator shall take into 
consideration the financial and managerial resources and future 
prospects of the company or companies and bank concerns and the 
convenience and needs of the community. Let me stress that: and the 
convenience and needs of the communities.
  All mergers, acquisitions, and consolidations are subject to 
antitrust review by the Department of Justice to ensure that there is 
not a negative impact on the financial system or on the communities 
that the financial institutions serve.
  So we have all of these tests, all of these hurdles that must be gone 
through.
  Finally, not only that, but notice must be given that a merger is 
being considered, and under the Community Reinvestment Act, members of 
the affected communities have the ability to comment on the impact of 
the merger to the banking agency. So we have all of this. Nothing in 
this regulation relief bill changes that.
  These same protections and considerations apply when a financial 
institution is participating in an expedited merger process.

                              {time}  1300

  Accordingly, this amendment simply is not necessary. It will add 
additional cost. And I must urge its defeat on the grounds I have just 
stated and on the further grounds, as I have said in opposing the last 
amendment, that we promised the financial institutions, the credit 
unions, the thrifts, and the small banks, those that have the greatest 
regulatory burden, the greatest percentage of cost in complying with 
these new money laundering provisions, that we would take the burdens 
off of them, not put more burdens on them.
  So I would urge the defeat of this amendment.

[[Page 4609]]

  Mr. Chairman, I reserve the balance of my time.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, I am disappointed in the gentleman's opposition, but I 
press on in any event, because I press on on behalf of the consumers.
  I would, with all due respect, refer to the gentleman from Ohio (Mr. 
Oxley), who is on the floor, to look at this amendment. It is simply a 
sense of Congress that we not abdicate our oversight.
  I have heard the gentleman from Alabama (Mr. Bachus) on the fact that 
we have all of the oversight. But clearly I think in the expedited 
process, the indication or instruction, if you will, to the appropriate 
regulators that we should look keenly at whether or not these mergers 
impact negatively on corporate and individual consumers in the elements 
that I have listed, the loss of jobs, the element of decision-making, 
the question of civic mindedness, if you will, and clearly to note in 
our communities when headquarters lift up and move from cities that 
have hosted these banks for years and years and years.
  This is not an excessive burden, Mr. Chairman. It is simply the 
responsibility of Congress to ensure that not only are we, if you will, 
the protectors of the corporate elite and large banking institutions, 
but we also respect the responsibilities that we have to the average 
Joe Consumer, whether that happens to be the small business consumer, 
the individual family who is seeking a home loan, or in individual 
accounts.
  We know that the new kid on the block in our banking success stories 
is consumer banking. We know for a fact that we have had the 
opportunity to see our banks grow and thrive because of the fact that 
they have been basing their bottom line, their bottom black line, if 
you will, their success and profits on consumer banking. Why would we 
suggest that this is a burden to our credit unions or our banking 
institutions to be keenly sensitive to mergers and to make sure, in 
fact, that we have the opportunity to review this matter in a way that 
is appropriate for this body?
  Again, it is a sense of Congress. That is all it is, gentlemen. Why 
in the world would we have a difficulty in a sense of Congress that 
does not in any way attempt to jeopardize the working relationship? It 
is not regulatory; it is a sense of Congress. Can we not have a 
commonality of viewpoints and response? I do not see why we cannot have 
an agreement on this. Again, it is a sense of Congress.
  I want to just make this point, Mr. Chairman, if I can. The idea is 
that this is not isolated to one area versus another. All of us face 
mergers in our community. This is the next step of banks. We know that. 
For some reason they find it to be more accommodating to have these 
large institutions. This does not in any way undermine having a large 
institution. What it says is just be diligent to ensure that with 
respect to the sense of Congress that we ensure that these issues are 
covered.
  I would ask my colleagues to support this amendment on behalf of 
rural America, urban America, suburban America, and on behalf of 
preserving the civic mindedness or at least paying attention to the 
civic mindedness that our banks provide.
  Mr. BACHUS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, we are concerned about many of the same things the 
gentlewoman from Texas (Ms. Jackson-Lee) is concerned about. We simply 
think that existing law addresses these concerns. And I have reiterated 
those.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN pro tempore (Mr. Sweeney). The question is on the 
amendment offered by the gentlewoman from Texas (Ms. Jackson-Lee).
  The question was taken; and the Chairman pro tempore announced that 
the noes appeared to have it.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentlewoman from Texas (Ms. 
Jackson-Lee) will be postponed.
  It is now in order to consider Amendment No. 6 printed in House 
Report 108-439.


                 Amendment No. 6 Offered by Mrs. Kelly

  Mrs. KELLY. Mr. Chairman, I offer an amendment.
  The CHAIRMAN pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Mrs. Kelly:
       Page 108, after line 14, insert the following new title 
     (and redesignate the subsequent title and sections and 
     conform the table of contents accordingly):

                  TITLE VII--BUSINESS CHECKING FREEDOM

     SEC. 701. SHORT TITLE.

       This title may be cited as the ``Business Checking Freedom 
     Act of 2004''.

     SEC. 702. INTEREST-BEARING TRANSACTION ACCOUNTS AUTHORIZED 
                   FOR ALL BUSINESSES.

       (a) 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.''.
       (b) Effective at the end of the 2-year period beginning on 
     the date of the enactment of this Act, section 2 of Public 
     Law 93-100 (12 U.S.C. 1832) is amended--
       (1) in subsection (a)(1), by striking ``but subject to 
     paragraph (2)'';
       (2) by striking paragraph (2) of subsection (a) and 
     inserting the following new paragraph:
       ``(2) No provision of this section may be construed as 
     conferring the authority to offer demand deposit accounts to 
     any institution that is prohibited by law from offering 
     demand deposit accounts.''; and
       (3) in subsection (b) (as added by subsection (a) of this 
     section) by striking ``and is not a deposit or account 
     described in subsection (a)(2)''.

     SEC. 703. 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 the end of the 2-year period beginning 
     on the date of the enactment of this Act.

     SEC. 704. PAYMENT OF INTEREST ON RESERVES AT FEDERAL RESERVE 
                   BANKS.

       (a) In General.--Section 19(b) of the Federal Reserve Act 
     (12 U.S.C. 461(b)) is amended by adding at the end the 
     following new paragraph:
       ``(12) Earnings on reserves.--
       ``(A) In general.--Balances maintained at a Federal reserve 
     bank by or on behalf of a depository institution may receive 
     earnings to be paid by the Federal reserve bank at least once 
     each calendar quarter at a rate or rates not to exceed the 
     general level of short-term interest rates.
       ``(B) Regulations relating to payments and distribution.--
     The Board may prescribe regulations concerning--
       ``(i) the payment of earnings in accordance with this 
     paragraph;
       ``(ii) the distribution of such earnings to the depository 
     institutions which maintain balances at such banks or on 
     whose behalf such balances are maintained; and
       ``(iii) the responsibilities of depository institutions, 
     Federal home loan banks, and the National Credit Union 
     Administration Central Liquidity Facility with respect to the 
     crediting and distribution of earnings attributable to 
     balances maintained, in accordance with subsection (c)(1)(A), 
     in a Federal reserve bank by any such entity on behalf of 
     depository institutions.

[[Page 4610]]

       ``(C) Depository institutions defined.--For purposes of 
     this paragraph, the term `depository institution', in 
     addition to the institutions described in paragraph (1)(A), 
     includes any trust company, corporation organized under 
     section 25A or having an agreement with the Board under 
     section 25, or any branch or agency of a foreign bank (as 
     defined in section 1(b) of the International Banking Act of 
     1978).''.
       (b) Authorization for Pass Through Reserves for Member 
     Banks.--Section 19(c)(1)(B) of the Federal Reserve Act (12 
     U.S.C. 461(c)(1)(B)) is amended by striking ``which is not a 
     member bank''.
       (c) Consumer Banking Costs Assessment.--
       (1) In general.--The Federal Reserve Act (12 U.S.C. 221 et 
     seq.) is amended--
       (A) by redesignating sections 30 and 31 as sections 31 and 
     32, respectively; and
       (B) by inserting after section 29 the following new 
     section:

     ``SEC. 30. SURVEY OF BANK FEES AND SERVICES.

       ``(a) Annual Survey Required.--The Board of Governors of 
     the Federal Reserve System shall obtain annually 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 annual 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) Deposit items returned fees.
       ``(K) 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) Annual 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 congress.--The Board of Governors of 
     the Federal Reserve System shall submit an annual report to 
     the Congress not later than June 1, 2005, and not later than 
     June 1 of each subsequent year.
       ``(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.''.
       (2) Conforming amendment.--
       (A) 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) of this chapter;
       ``(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.''.
       (B) Effective date.--The amendment made by subparagraph (A) 
     shall take effect on January 1, 2004.
       (3) 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.
       (d) Technical and Conforming Amendments.--Section 19 of the 
     Federal Reserve Act (12 U.S.C. 461) is amended--
       (1) in subsection (b)(4) (12 U.S.C. 461(b)(4)), by striking 
     subparagraph (C) and redesignating subparagraphs (D) and (E) 
     as subparagraphs (C) and (D), respectively; and
       (2) in subsection (c)(1)(A) (12 U.S.C. 461(c)(1)(A)), by 
     striking ``subsection (b)(4)(C)'' and inserting ``subsection 
     (b)''.

     SEC. 705. INCREASED FEDERAL RESERVE BOARD FLEXIBILITY IN 
                   SETTING RESERVE REQUIREMENTS.

       Section 19(b)(2)(A) of the Federal Reserve Act (12 U.S.C. 
     461(b)(2)(A)) is amended--
       (1) in clause (i), by striking ``the ratio of 3 per 
     centum'' and inserting ``a ratio not greater than 3 percent 
     (and which may be zero)''; and
       (2) in clause (ii), by striking ``and not less than 8 per 
     centum,'' and inserting ``(and which may be zero),''.

     SEC. 706. TRANSFER OF FEDERAL RESERVE SURPLUSES.

       (a) In General.--Section 7(b) of the Federal Reserve Act 
     (12 U.S.C. 289(b)) is amended by adding at the end the 
     following new paragraph:
       ``(4) Additional transfers to cover interest payments for 
     fiscal years 2003 through 2007.--
       ``(A) In general.--In addition to the amounts required to 
     be transferred from the surplus funds of the Federal reserve 
     banks pursuant to subsection (a)(3), the Federal reserve 
     banks shall transfer from such surplus funds to the Board of 
     Governors of the Federal Reserve System for transfer to the 
     Secretary of the Treasury for deposit in the general fund of 
     the Treasury, such sums as are necessary to equal the net 
     cost of section 19(b)(12) in each of the fiscal years 2003 
     through 2007.
       ``(B) Allocation by federal reserve board.--Of the total 
     amount required to be paid by the Federal reserve banks under 
     subparagraph (A) for fiscal years 2003 through 2007, the 
     Board of Governors of the Federal Reserve System shall 
     determine the amount each such bank shall pay in such fiscal 
     year.
       ``(C) Replenishment of surplus fund prohibited.--During 
     fiscal years 2003 through 2007, no Federal reserve bank may 
     replenish such bank's surplus fund by the amount of any 
     transfer by such bank under subparagraph (A).''.
       (b) Technical and Conforming Amendment.--Section 7(a) of 
     the Federal Reserve Act (12 U.S.C. 289(a)) is amended by 
     adding at the end the following new paragraph:

[[Page 4611]]

       ``(3) Payment to treasury.--During fiscal years 2003 
     through 2007, any amount in the surplus fund of any Federal 
     reserve bank in excess of the amount equal to 3 percent of 
     the paid-in capital and surplus of the member banks of such 
     bank shall be transferred to the Secretary of the Treasury 
     for deposit in the general fund of the Treasury.''.

     SEC. 707. RULE OF CONSTRUCTION.

       In the case of an escrow account maintained at a depository 
     institution in connection with 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,
     shall not be treated as the payment or receipt of interest 
     for purposes of this Act 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, 
     provided, however, that nothing herein 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. Nor 
     shall anything herein be construed to preempt the provisions 
     of law of any State dealing with the payment of interest on 
     escrow accounts maintained in connection with real estate 
     transactions.

  The CHAIRMAN pro tempore. Pursuant to House Resolution 566, the 
gentlewoman from New York (Mrs. Kelly) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentlewoman from New York (Mrs. Kelly).
  Mrs. KELLY. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I also want to thank the gentleman from Pennsylvania 
(Mr. Toomey) for his collaboration on this proposal and Members of the 
Committee on Rules for allowing this amendment to be considered today.
  Most Americans with checking accounts would be shocked to learn that 
if they started their own business, any checking account they establish 
for that business would be prohibited from earning any interest. Yet 
that is the case today. Checking accounts held by small businesses are 
banned by Federal law from collecting the interest that money would 
earn if it were held by an individual.
  The amendment I am offering addresses this matter and it has been 
pending before Congress for some time now. This body has actually 
passed this measure by voice vote not once, not twice, but actually 
three times; twice in the last Congress, and once earlier in the 
earlier year in this Congress.
  Unfortunately, the job is not yet done. So I am coming again in the 
hope that we will finally be able to send this language to the 
President's desk.
  The provisions in this amendment will go a long way in helping our 
main street banks and small businesses which are essential to growth 
and communities and our overall economy. The Business Checking Freedom 
Act contains a number of important provisions. First, it repeals the 
70-year-old law prohibiting banks from paying interest on business 
checking accounts after a transition period. And while I believe it 
should be repealed entirely, a bipartisan group of Members have agreed 
that a proper transition period is necessary.
  We are also aware of the potential impact of an outright repeal of 
the law. That is why a transition period is crucial. And we will 
continue to work to ensure that the needs of our smaller banks are 
being addressed. As a result, the legislation includes a 2-year 
transition period contained in the bill.
  I would also like to say that I share and recognize the concerns of 
some Members with regard to the ILCs and will work with my colleagues, 
including the gentleman from Ohio (Mr. Gillmor) and the gentleman from 
Massachusetts (Mr. Frank) to achieve a remedy to the concerns that have 
been raised about the ILCs.
  The legislation is important. It allows banks to increase money 
market deposits and savings account sweeps from the current 6 to 24 
times a month. This gives banks an increase in their sweep activities, 
increasing the interest which businesses can make on their accounts.
  The final provision gives the Federal Reserve the opportunity to pay 
interest on the reserves that the banks need to keep within the Federal 
Reserve system. And Chairman Greenspan has repeatedly testified that he 
is in favor of this provision.
  It also gives the Fed the flexibility to lower reserve requirements, 
which enables the Fed to have greater control to maintain reserves at 
specific and consistent levels. This language will help foster healthy 
receiver balances and reduce the potential for volatility within the 
bank Federal funds rate protecting the Federal Reserve's ability to 
conduct monetary policy.
  Quite simply, this legislation is about creating a new and broader 
market option and supporting our small businesses at the same time. The 
amendment allows banks to pay interest on business checking accounts 
and increase sweeps activities. The amendment also allows the Fed to 
pay interest on the sterile reserves that banks are required to keep 
with them and lower reserve requirements.
  The amendment does not require or mandate anything. It allows the 
market to create change and not the government.
  I want to thank the gentleman from Pennsylvania (Mr. Toomey) once 
again for working so closely with me on this proposal. I thank Members 
for considering, once again, this important legislation. I have been 
working on it for many years. I really am pleased to be able to bring 
it to the floor.
  I ask my colleagues on both sides of the aisle to join me in strong 
support for this commonsense amendment that will help banks and small 
businesses fuel the economy.
  Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, in the apparent absence of 
anyone in opposition, I would ask for the time.
  The CHAIRMAN pro tempore. Without objection, the gentleman is 
recognized for 5 minutes.
  There was no objection.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, this is, as I think has been made clear, a bill that 
has already passed the House. Clearly the former reasons for the 
prohibition on interest on business checking accounts no longer make 
sense in light of the current economy.
  I appreciate the gentlewoman from New York (Mrs. Kelly) alluding to 
the issue of the ILCs. When we had originally dealt with this, it had 
been my hope as this bill went forward in the other body, the 
compromise we had adopted could be considered there. For a variety of 
reasons this did not go forward in the other body. And the rules 
prohibit me from commenting on whether or not anyone ought to be 
surprised by the absence of that progress, so I shall not.
  But this, once again, we hope will go forward; because it is, I 
think, an important thing especially, as has been clear, for the small 
businesses. Interest on their checking accounts, if you are a smaller 
business and you have to maintain a large percentage of your funds in 
checking accounts for a variety of reasons, then the lack of interest 
could become a significant factor.
  So I hope that this will ultimately pass, but I do hope that the ILC 
issue will get some further attention.
  Mr. Chairman, I yield back the balance of my time.
  Mrs. KELLY. Mr. Chairman, I yield my remaining minute to the 
gentleman from Pennsylvania (Mr. Toomey.)
  Mr. FRANK of Massachusetts. Mr. Chairman, I ask unanimous consent to 
reclaim my time, and I also yield 1 minute to the gentleman from 
Pennsylvania (Mr. Toomey).
  The CHAIRMAN pro tempore. Without objection, the gentleman from 
Massachusetts may reclaim his time.
  There was no objection.
  The CHAIRMAN pro tempore. The gentleman from Pennsylvania (Mr. 
Toomey) is recognized for 2 minutes.
  Mr. TOOMEY. Mr. Chairman, I would like to thank my colleague, the 
gentlewoman from New York (Mrs. Kelly),

[[Page 4612]]

as well as my colleague, the gentleman from Massachusetts (Mr. Frank) 
for kindly yielding time.
  Certainly I rise in strong support of this amendment. I want to 
congratulate the gentlewoman from New York (Mrs. Kelly) for her 
leadership on this issue for a number of years.
  This amendment simply is going to help small businesses. It is going 
to help small banks. It is going to help promote a rational allocation 
of resources and a free economy. It makes a lot of sense. In fact, it 
is hard to believe we ever passed a law that said it ought to be 
illegal to pay interest on deposits, any kind of deposits. But that is 
the fact. It is on the books. And I am hoping that today we take a big 
step in the direction of repealing this ban.
  This amendment itself really reflects the confluence of two separate 
bills, one that I had introduced, one that the gentlewoman from New 
York (Mrs. Kelly) had introduced. And together they really simply 
amount to a commonsense reduction of long-outdated, unnecessary 
regulations.
  Again, the people that are most harmed by the current regulation are 
the people operating small businesses, the people who have modest 
accounts, the people who have not got sophisticated Treasury operations 
to circumvent the regulations, and the people who therefore really need 
this help.
  It will help small businesses do a host of things that they could do 
with a little more resources, whether it is hiring another employee, 
whether it is buying some more equipment, defraying other costs, it 
just makes a lot of sense.
  I should observe that the Federal Reserve and the Treasury Department 
both fully support this legislation for a variety of reasons, not the 
least of which it will make banking services less expensive, more 
directly responsive to customers' needs, and basically every industry 
group that has looked at this legislation supports it as well, from the 
U.S. Chamber of Commerce, the NFIB, America's Community Bankers, to the 
Association for Financial Professionals. Pretty much there is a broad 
consensus that this is just a commonsense thing to do.
  So I, again, would like to thank the gentleman from Massachusetts 
(Mr. Frank) for his cooperation, the gentlewoman from New York (Mrs. 
Kelly) for her years of service on this issue. I urge my colleagues to 
adopt this amendment.
  The CHAIRMAN pro tempore. The question is on the amendment offered by 
the gentlewoman from New York (Mrs. Kelly).
  The question was taken; and the Chairman pro tempore announced that 
the ayes appeared to have it.
  Mrs. KELLY. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentlewoman from New York 
(Mrs. Kelly) will be postponed.


          Sequential Votes Postponed in Committee of the Whole

  The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XVIII, 
proceedings will now resume on those amendments on which further 
proceedings were postponed in the following order: amendment number 4 
offered by the gentleman from New York (Mr. Weiner); amendment number 5 
offered by the gentlewoman from Texas (Ms. Jackson-Lee); and amendment 
number 6 offered by the gentlewoman from New York (Mrs. Kelly).
  The Chair will reduce to 5 minutes the time for any electronic vote 
after the first vote in this series.


                 Amendment No. 4 Offered by Mr. Weiner

  The CHAIRMAN pro tempore. The pending business is the demand for a 
recorded vote on the amendment offered by the gentleman from New York 
(Mr. Weiner) on which further proceedings were postponed and on which 
the noes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN pro tempore. A recorded vote has been demanded.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 167, 
noes 255, not voting 11, as follows:

                             [Roll No. 66]

                               AYES--167

     Abercrombie
     Ackerman
     Andrews
     Baca
     Baird
     Baldwin
     Ballance
     Barton (TX)
     Becerra
     Bell
     Berkley
     Berman
     Bishop (NY)
     Blumenauer
     Boyd
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Chandler
     Clay
     Clyburn
     Conyers
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Jo Ann
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Doyle
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gephardt
     Green (TX)
     Greenwood
     Grijalva
     Gutierrez
     Hastings (FL)
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hoyer
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kleczka
     Lampson
     Langevin
     Lantos
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lynch
     Majette
     Maloney
     Markey
     Matheson
     Matsui
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mollohan
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Otter
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (PA)
     Platts
     Price (NC)
     Rangel
     Reyes
     Rodriguez
     Rothman
     Roybal-Allard
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Scott (VA)
     Serrano
     Simpson
     Slaughter
     Smith (NJ)
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tauscher
     Thompson (MS)
     Tierney
     Towns
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--255

     Aderholt
     Akin
     Alexander
     Allen
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Bass
     Beauprez
     Bereuter
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (UT)
     Blunt
     Boehlert
     Bonilla
     Bonner
     Bono
     Boozman
     Boswell
     Boucher
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Carter
     Case
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cooper
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (FL)
     Davis (TN)
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dooley (CA)
     Doolittle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Goss
     Granger
     Graves
     Green (WI)
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hooley (OR)
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Inslee
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Keller
     Kelly
     Kennedy (MN)
     Kind
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline
     Knollenberg
     Kolbe
     LaHood
     Larsen (WA)
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     Marshall
     McCarthy (MO)
     McCotter
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Michaud
     Miller (FL)
     Miller (MI)
     Miller (NC)
     Miller, Gary
     Moore
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Oxley
     Paul
     Pearce
     Pence
     Peterson (MN)
     Petri
     Pickering
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Rahall
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ross
     Royce
     Ruppersberger
     Ryan (WI)
     Ryun (KS)
     Sandlin
     Saxton
     Schrock
     Scott (GA)
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shuster
     Simmons
     Skelton
     Smith (MI)
     Smith (TX)
     Snyder
     Souder
     Stearns
     Stenholm
     Sullivan
     Sweeney

[[Page 4613]]


     Tancredo
     Tanner
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Tiahrt
     Toomey
     Turner (OH)
     Upton
     Visclosky
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Weldon (FL)
     Weller
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--11

     Blackburn
     Boehner
     Harman
     John
     Kucinich
     Shimkus
     Smith (WA)
     Tauzin
     Tiberi
     Weldon (PA)
     Whitfield


                Announcement by the Chairman Pro Tempore

  The CHAIRMAN pro tempore (Mr. Simmons) (during the vote). Members are 
notified there are 2 minutes remaining in this vote.

                              {time}  1340

  Ms. EDDIE BERNICE JOHNSON of Texas and Messrs. VITTER, BERRY, CANNON, 
PETRI, POMEROY and ISSA changed their vote from ``aye'' to ``no.''
  Mr. OWENS and Mr. PALLONE changed their vote from ``no'' to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.


                Announcement by the Chairman pro Tempore

  The CHAIRMAN pro tempore. Pursuant to clause 6 of rule XV, the 
remainder of votes in this series will be conducted as 5-minute votes.


          Amendment No. 4 Offered by Ms. Jackson-Lee of Texas

  The CHAIRMAN pro tempore. The pending business is the demand for a 
recorded vote on amendment No. 4 offered by the gentlewoman from Texas 
(Ms. Jackson-Lee) on which further proceedings were postponed and on 
which the noes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN pro tempore. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 194, 
noes 225, not voting 14, as follows:

                             [Roll No. 67]

                               AYES--194

     Abercrombie
     Ackerman
     Aderholt
     Alexander
     Allen
     Andrews
     Baca
     Baird
     Baldwin
     Ballance
     Becerra
     Bell
     Bereuter
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Boswell
     Brady (PA)
     Brown (OH)
     Brown, Corrine
     Camp
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Case
     Chandler
     Clay
     Clyburn
     Costello
     Crowley
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Doyle
     Duncan
     Edwards
     Ehlers
     Emanuel
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Ford
     Frank (MA)
     Frost
     Gephardt
     Gonzalez
     Green (TX)
     Grijalva
     Gutierrez
     Hastings (FL)
     Hill
     Hinchey
     Hinojosa
     Hoeffel
     Hoekstra
     Holden
     Holt
     Honda
     Hooley (OR)
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Leach
     Lee
     Levin
     Lewis (GA)
     Lofgren
     Lowey
     Lynch
     Majette
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller (NC)
     Miller, George
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Pence
     Pomeroy
     Porter
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Rush
     Ryan (OH)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Schakowsky
     Schiff
     Scott (GA)
     Scott (VA)
     Serrano
     Shays
     Sherman
     Skelton
     Slaughter
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Wamp
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Wexler
     Woolsey
     Wu
     Wynn

                               NOES--225

     Akin
     Bachus
     Baker
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Biggert
     Bilirakis
     Bishop (UT)
     Blumenauer
     Blunt
     Boehlert
     Bonilla
     Bonner
     Bono
     Boozman
     Boucher
     Boyd
     Bradley (NH)
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Chocola
     Coble
     Cole
     Collins
     Cooper
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cunningham
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeLay
     DeMint
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dooley (CA)
     Doolittle
     Dreier
     Dunn
     Emerson
     English
     Everett
     Feeney
     Ferguson
     Flake
     Foley
     Forbes
     Fossella
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Goode
     Goodlatte
     Gordon
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hobson
     Hostettler
     Houghton
     Hulshof
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Keller
     Kelly
     Kennedy (MN)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kleczka
     Kline
     Knollenberg
     Kolbe
     LaHood
     Latham
     LaTourette
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney
     Manzullo
     Markey
     Marshall
     McCotter
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Michaud
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy
     Musgrave
     Myrick
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pearce
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Royce
     Ruppersberger
     Ryan (WI)
     Ryun (KS)
     Sandlin
     Saxton
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Sherwood
     Shuster
     Simmons
     Simpson
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stenholm
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Tiahrt
     Toomey
     Turner (OH)
     Vitter
     Walden (OR)
     Walsh
     Weldon (FL)
     Weller
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--14

     Blackburn
     Boehner
     Conyers
     Harman
     Hunter
     John
     Kucinich
     Lewis (CA)
     Shimkus
     Smith (WA)
     Tauzin
     Tiberi
     Weldon (PA)
     Whitfield


                Announcement by the Chairman Pro Tempore

  The CHAIRMAN pro tempore (Mr. Sweeney) (during the vote). Members are 
advised 2 minutes remain in this vote.

                              {time}  1348

  Mr. WAMP and Mr. DUNCAN changed their vote from ``no'' to ``aye.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.


                 Amendment No. 6 Offered by Mrs. Kelly

  The CHAIRMAN pro tempore. The pending business is the demand for a 
recorded vote on the amendment offered by the gentlewoman from New York 
(Mrs. Kelly) on which further proceedings were postponed and on which 
the ayes prevailed by voice vote.
  The Clerk will redesignate the amendment.
  The Clerk redesignated the amendment.


                             Recorded Vote

  The CHAIRMAN pro tempore. A recorded vote has been demanded.
  A recorded vote was ordered.
  The CHAIRMAN pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 418, 
noes 0, not voting 15, as follows:

                             [Roll No. 68]

                               AYES--418

     Abercrombie
     Ackerman
     Aderholt
     Akin
     Alexander
     Allen
     Andrews
     Baca
     Bachus
     Baird
     Baker
     Baldwin
     Ballance
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Becerra
     Bell
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)

[[Page 4614]]


     Blumenauer
     Blunt
     Boehlert
     Bonilla
     Bonner
     Bono
     Boozman
     Boswell
     Boucher
     Boyd
     Bradley (NH)
     Brady (PA)
     Brady (TX)
     Brown (OH)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Case
     Castle
     Chabot
     Chandler
     Chocola
     Clay
     Clyburn
     Coble
     Cole
     Collins
     Cooper
     Costello
     Cox
     Cramer
     Crane
     Crenshaw
     Crowley
     Cubin
     Culberson
     Cummings
     Cunningham
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     DeMint
     Deutsch
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Dooley (CA)
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Emanuel
     Emerson
     Engel
     English
     Eshoo
     Etheridge
     Evans
     Everett
     Farr
     Fattah
     Feeney
     Ferguson
     Filner
     Flake
     Foley
     Forbes
     Ford
     Fossella
     Frank (MA)
     Franks (AZ)
     Frelinghuysen
     Frost
     Gallegly
     Garrett (NJ)
     Gephardt
     Gerlach
     Gibbons
     Gilchrest
     Gillmor
     Gingrey
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green (TX)
     Green (WI)
     Greenwood
     Grijalva
     Gutierrez
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hill
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Honda
     Hooley (OR)
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hyde
     Inslee
     Isakson
     Israel
     Issa
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Keller
     Kelly
     Kennedy (MN)
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kleczka
     Kline
     Knollenberg
     Kolbe
     LaHood
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Lucas (OK)
     Lynch
     Majette
     Maloney
     Manzullo
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCotter
     McCrery
     McDermott
     McGovern
     McHugh
     McInnis
     McIntyre
     McKeon
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Mica
     Michaud
     Millender-McDonald
     Miller (FL)
     Miller (MI)
     Miller (NC)
     Miller, Gary
     Miller, George
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Musgrave
     Myrick
     Nadler
     Napolitano
     Neal (MA)
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Osborne
     Ose
     Otter
     Owens
     Oxley
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pearce
     Pelosi
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Rehberg
     Renzi
     Reyes
     Reynolds
     Rodriguez
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Royce
     Ruppersberger
     Rush
     Ryan (OH)
     Ryan (WI)
     Ryun (KS)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanders
     Sandlin
     Saxton
     Schakowsky
     Schiff
     Schrock
     Scott (GA)
     Scott (VA)
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shuster
     Simmons
     Simpson
     Skelton
     Slaughter
     Smith (MI)
     Smith (TX)
     Snyder
     Solis
     Souder
     Spratt
     Stark
     Stearns
     Stenholm
     Strickland
     Stupak
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Tauscher
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Tiahrt
     Tierney
     Toomey
     Towns
     Turner (OH)
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Weldon (FL)
     Weller
     Wexler
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                             NOT VOTING--15

     Blackburn
     Boehner
     Carter
     Conyers
     Goss
     Harman
     John
     Kucinich
     Shimkus
     Smith (NJ)
     Smith (WA)
     Tauzin
     Tiberi
     Weldon (PA)
     Whitfield


                Announcement by the Chairman Pro Tempore

  The CHAIRMAN pro tempore (during the vote). Members are advised 2 
minutes remain in this vote.

                              {time}  1356

  So the amendment was agreed to.
  The result of the vote was announced as above recorded.
  The CHAIRMAN pro tempore. The question is on the committee amendment 
in the nature of a substitute, as amended.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  The CHAIRMAN pro tempore. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Simpson) having assumed the chair, Mr. Sweeney, Chairman pro tempore of 
the Committee of the Whole House on the State of the Union, reported 
that that Committee, having had under consideration the bill (H.R. 
1375) to provide regulatory relief and improve productivity for insured 
depository institutions, and for other purposes, pursuant to House 
Resolution 566, he reported the bill back to the House with an 
amendment adopted by the Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on any amendment to the committee 
amendment in the nature of a substitute adopted by the Committee of the 
Whole? If not, the question is on the amendment.
  The amendment was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. BACHUS. 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, this 15-
minute vote on final passage will be followed by two 5-minute votes on 
the motions to suspend the rules that were debated yesterday.
  The vote was taken by electronic device, and there were--yeas 392, 
nays 25, not voting 16, as follows:

                             [Roll No. 69]

                               YEAS--392

     Ackerman
     Akin
     Alexander
     Allen
     Andrews
     Baca
     Bachus
     Baird
     Baker
     Baldwin
     Ballance
     Ballenger
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bass
     Beauprez
     Becerra
     Bell
     Berkley
     Berman
     Berry
     Biggert
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Blunt
     Boehlert
     Bonilla
     Bonner
     Bono
     Boozman
     Boucher
     Boyd
     Bradley (NH)
     Brady (PA)
     Brady (TX)
     Brown (OH)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Burgess
     Burns
     Burr
     Burton (IN)
     Buyer
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Capps
     Capuano
     Cardin
     Cardoza
     Carson (IN)
     Carson (OK)
     Carter
     Case
     Castle
     Chabot
     Chandler
     Chocola
     Clay
     Clyburn
     Coble
     Cole
     Collins
     Costello
     Cox
     Cramer
     Crane
     Crenshaw
     Cubin
     Culberson
     Cummings
     Cunningham
     Davis (AL)
     Davis (CA)
     Davis (FL)
     Davis (IL)
     Davis (TN)
     Davis, Jo Ann
     Davis, Tom
     Deal (GA)
     DeGette
     DeLauro
     DeLay
     DeMint
     Deutsch
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Dooley (CA)
     Doolittle
     Doyle
     Dreier
     Duncan
     Edwards
     Ehlers
     Emanuel
     Emerson
     Engel
     English
     Eshoo
     Etheridge
     Everett
     Farr
     Fattah
     Feeney
     Ferguson
     Filner
     Flake
     Foley
     Forbes
     Ford
     Fossella
     Frank (MA)
     Franks (AZ)
     Frelinghuysen
     Frost
     Gallegly
     Garrett (NJ)
     Gephardt
     Gerlach
     Gibbons
     Gillmor
     Gingrey
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Goss
     Granger
     Graves
     Green (TX)
     Green (WI)
     Greenwood
     Grijalva
     Gutierrez
     Gutknecht
     Hall
     Harris
     Hart
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Hensarling
     Herger
     Hill
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Honda
     Hooley (OR)
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hyde
     Inslee
     Isakson
     Israel
     Issa
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, E. B.

[[Page 4615]]


     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kaptur
     Keller
     Kelly
     Kennedy (MN)
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind
     King (NY)
     Kingston
     Kirk
     Kleczka
     Kline
     Knollenberg
     Kolbe
     LaHood
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     LaTourette
     Lee
     Levin
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Lucas (OK)
     Lynch
     Majette
     Maloney
     Manzullo
     Marshall
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCotter
     McCrery
     McGovern
     McHugh
     McInnis
     McIntyre
     McKeon
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Mica
     Michaud
     Millender-McDonald
     Miller (FL)
     Miller (MI)
     Miller (NC)
     Miller, Gary
     Miller, George
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Murphy
     Murtha
     Myrick
     Nadler
     Napolitano
     Neal (MA)
     Nethercutt
     Neugebauer
     Ney
     Northup
     Norwood
     Nunes
     Oberstar
     Obey
     Olver
     Ortiz
     Ose
     Otter
     Owens
     Oxley
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pearce
     Pelosi
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Putnam
     Quinn
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Rehberg
     Renzi
     Reyes
     Reynolds
     Rodriguez
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Ryan (WI)
     Ryun (KS)
     Sabo
     Sanchez, Linda T.
     Sanchez, Loretta
     Sandlin
     Saxton
     Schakowsky
     Schiff
     Schrock
     Scott (GA)
     Scott (VA)
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shuster
     Simmons
     Simpson
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Snyder
     Solis
     Souder
     Spratt
     Stark
     Stearns
     Stenholm
     Strickland
     Stupak
     Sullivan
     Sweeney
     Tancredo
     Tanner
     Tauscher
     Taylor (NC)
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Tiahrt
     Tierney
     Toomey
     Towns
     Turner (OH)
     Turner (TX)
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Vitter
     Walden (OR)
     Walsh
     Wamp
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Weldon (FL)
     Weller
     Wexler
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                                NAYS--25

     Bereuter
     Bishop (UT)
     Boswell
     Cooper
     DeFazio
     Delahunt
     Evans
     Gilchrest
     Hinchey
     Kanjorski
     King (IA)
     Latham
     Leach
     Lewis (GA)
     Markey
     Matheson
     McDermott
     Musgrave
     Nussle
     Osborne
     Royce
     Sanders
     Slaughter
     Taylor (MS)
     Terry

                             NOT VOTING--16

     Abercrombie
     Aderholt
     Blackburn
     Boehner
     Conyers
     Crowley
     Dunn
     Harman
     John
     Kucinich
     Shimkus
     Smith (WA)
     Tauzin
     Tiberi
     Weldon (PA)
     Whitfield


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. Simpson) (during the vote). Members are 
advised that 2 minutes remain in this vote.

                              {time}  1414

  Mr. EVANS changed his vote from ``yea'' to ``nay.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________