[House Report 106-214]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 106-214
======================================================================
PROVIDING FOR THE CONSIDERATION OF H.R. 10, FINANCIAL SERVICES ACT OF
1999
_______
June 30, 1999.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Sessions, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 235]
The Committee on Rules, having had under consideration
House Resolution 235, by a record vote of 9 to 3, report the
same to the House with the recommendation that the resolution
be adopted.
summary of provisions of resolution
The resolution provides for the consideration of H.R. 10,
the ``Financial Services Act of 1999,'' under a structured
rule. The rule provides 90 minutes of general debate: 45
minutes divided equally between the chairman and ranking
minority member of the Committee on Commerce.
The rule waives all points of order against consideration
of the bill. The rule makes in order the amendment in the
nature of a substitute consisting of the text of the Rules
Committee Print dated June 24, 1999, as original text for the
purpose of amendment. The rule waives all points of order
against the amendment in the nature a substitute.
The rule provides that no amendment to the amendment in the
nature of a substitute shall be in order except those printed
in this report, which may be offered in the order printed in
this report, may be offered only by a Member designated in this
report, shall be considered as read, shall be debatable for the
time specified in this 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 a division
of the question. The rule waives all points of order against
the amendments printed in this report.
The rule allows the chairman of the Committee of the Whole
to postpone recorded votes and reduce voting time to five
minutes on any postponed question, provided voting time on the
first in any series of questions is not less than 15 minutes.
Finally, the rule provides one motion to recommit with or
without instructions.
The waiver of all points of order against consideration of
the Bill is necessary due to a violation of clause 3(c) of rule
XIII (requiring the inclusion in the report of a CBO cost
estimate of comparison of the total estimated funding levels
for the relevant programs). The reason for this waiver is that
the Commerce Committee filed its report (106-74, Part 3)
without a CBO cost estimate or a comparison of funding levels.
Furthermore, a cost estimate is not yet available from CBO for
the Commerce Committee to file a supplemental report. The
waiver of all points of order against consideration of the bill
is also necessary due to a violation of clause 3(d) of rule
XIII (relating to the availability of a cost estimate in the
report). The reason for this waiver is that the Commerce
Committee states in its report (106-74, Part 3) that the CBO
cost estimate is not available; however, the committee also did
not include its own cost estimate of the bill.
The waiver of all points of order against consideration of
the amendment in the nature of a substitute is necessary due to
a violation of clause 7 of rule XVI (prohibiting nongermane
amendments). The reason for this waiver is that Title V
(Privacy) of the amendment in the nature of a substitute is not
germane to the bill as introduced.
committee votes
Pursuant to clause 3(b) of House rule XIII the results of
each record vote on an amendment or motion to report, together
with the names of those voting for and against, are printed
below:
Rules Committee record vote No. 48
Date: June 30, 1999.
Measure: H.R. 10, Financial Services Act of 1999.
Motion by: Mr. Moakley.
Summary of motion: To make in order the amendment No. 10
offered by Representative Markey that allows consumers the
right to say ``no'' or ``opt out'' to a financial institution
transferring or selling a consumer's personal financial
information to its affiliates or to third parties.
Results: Defeated 2 to 9.
Vote by members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings--Nay; Myrick--Nay; Sessions--Nay;
Reynolds--Nay; Moakely--Nay; Frost--Yea; Dreier--Nay.
Rules Committee record vote No. 49
Date: June 30, 1999.
Measure: H.R. 10, Financial Services Act of 1999.
Motion by: Mr. Moakley.
Summary of motion: To make in order amendment No. 43
offered by Representative Conduit, Representative Markey,
Representative Towns, Representative Waxman, and Representative
Dingell that deletes subtitle D of Title II, ``Confidentiality
of Health and Medical Information,'' to preserve protections in
current Federal and state laws for confidentiality.
Results: Defeated 2 to 9.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings--Nay; Myrick--Nay; Sessions--Nay;
Reynolds--Nay; Moakely--Yea; Frost--Yea; Dreier--Nay.
Rules Committee record vote No. 50
Date: June 30, 1999.
Measure: H.R. 10, Financial Services Act of 1999.
Motion by: Mr. Frost.
Summary of motion: To self-execute amendment No. 49A
offered by Representative Lee, Representative Campbell,
Representative Gutierrez, Representative Waters, Representative
Schakowsky, Representative Tubbs-Jones, Representative Meeks,
and Representative Frank which aims to discourage, prevent and
abolish the discriminatory practice of denying or
discriminating against women and minority applicants for
homeowner's insurance and mortgage services otherwise known as
``redlining.''
Results: Defeated 2 to 9.
Vote by Members: Goss--Nay; Linder--Nay; Pryce--Nay; Diaz-
Balart--Nay; Hastings--Nay; Myrick--Nay; Sessions--Nay;
Reynolds--Nay; Moakley--Yea; Frost--Yea; Dreier--Nay.
Rules Committee record vote No. 51
Date: June 30, 1999.
Measure: H.R. 10, Financial Services Act of 1999.
Motion by: Mr. Goss.
Summary of motion: To report the resolution.
Results: Defeated 9 to 3.
Vote by Members: Goss--Yea; Linder--Yea; Pryce--Yea; Diaz-
Balart--Yea; Hastings--Yea; Myrick--Yea; Sessions--Yea;
Reynolds--Yea; Moakley--Nay; Frost--Nay; Slaughter--Nay;
Dreier--Yea.
summary of amendments made in order
1. Burr/Myrick No. 67: Provides that a financial holding
company otherwise meeting all requirements for grandfathering
of non-financial activities shall not be subject to expansion
limitations with respect to federally-regulated communications
companies or related communication production companies owned
by an insurance holding company since January 1, 1998. (10
minutes)
2. Schakowsky/Lee/Gutierrez/Watt No. 17: Provides for a 5-
year study by the U.S. Treasury Department with the Federal
bank regulators on the effect of the bill on small business and
farm lending. (10 minutes)
3. King/Velazquez No. 1. Modifies provisions in the bill
concerning restrictions on foreign banks to provide equal
treatment for foreign banks doing business in the United
States. (10 minutes)
4. Paul/Barr/Campbell No. 49: Eliminates authority to
require ``Know your Customer'' (``profiling'' of accounts and
source of funds); Replaces ``Suspicious Activity Report''
(SARS) with a ``safe harbor'' for financial institutions to
report transactions ``relevant to a possible violation of law
or regulation''; Adjusts the Currency Transaction Report (CTR)
limit for inflation; adds privacy advocate to the Bank Secrecy
Act Advisory Group and adds a ``sunshine'' clause to their
meetings; Expires Bank Secrecy Act documents after expiry of
statute of limitations (unless being used in an investigation);
and Directs the Federal banking agencies to recommend ways to
conform penalties for the Bank Secrecy Act to be no more severe
than those dictating penalties for ``safety and soundness''.
(10 minutes)
5. Foley No. 15: Allows foreign banks to upgrade to a
branch with the approval of the appropriate chartering agency
(the OCC or the State Bank Supervisor) and the Federal Reserve
Board, and the chartering agency (the OCC or the State Bank
Supervisor) and the Federal Reserve Board, and the chartering
agency would have to be in existence for the time periods set
forth in the 1994 Riegle-Neal Act and would also have to meet
the requirements for consolidated home country supervisions.
(10 minutes)
6. Slaughter No. 7: Expresses the ``Sense of the Congress''
that financial advisors, trust officers, insurance salepersons
and estate planners are encouraged to treat women fairly in the
selling of wills and trusts. (10 minutes)
7. Cook No. 60: Replaces section 241, subtitle D, of title
II with a provision requiring the General Accounting Office to
study ``the consequences of limiting through regulation
commissions, fees, or other costs incurred by customers in the
acquisition of financial products.'' Through this study,
Congress could determine the potential negative effects of the
regulation of commissions and fees before directing regulators
to impose such rules. (10 minutes)
8. Roukema No. 47: Requires the Securities and Exchange
Commission to consult and coordinate comments with the
appropriate Federal banking agency on the issue of loan loss
reserves before issuing any such comments, taking any action or
rendering any opinion on such issue or practices for insured
depository institutions or their holding companies. (10
minutes)
9. Watt No. 33: Clarifies that institutions or their
subsidiaries could not require customers to purchase insurance
products from them as a condition of receiving a loan and that
customers could purchase such insurance product from another
source. (10 minutes)
10. Bliley No. 57: Allows mutual insurance companies to
redomesticate to another state and reorganize into a mutual
holding company or stock company. Only takes effect in states
which do not have enacted laws governing such transaction.
Redomestication is subject to approval by the state insurance
regular of the new domicile, who must make an affirmative
determination that the reorganization plan meets a number of
consumer protection requirements. Amends provisions directing
the federal banking regulators to issue consumer protections
governing bank insurance sales, to prohibit discrimination
against victims of domestic violence, preventing such status
from being considered as a criterion in any insurance activity
conducted by or at a bank, or by a bank representative. (10
minutes)
11. Oxley/Pryce/Roukema No. 73: Imposes on all financial
institutions an ``affirmative and continuing obligation'' to
respect the privacy of customers and to protect the security
and confidentiality of customer's nonpublic personal
information, requires regulatory standards to insure security
and confidentiality of customer records and information to
protect against unauthorized access and use; requires that
consumers be given opportunity to opt-out of the disclosure of
their private information with unaffiliated third parties, with
limited exceptions for handling of consumer initiated
transactions, consumer reporting, compliance with law,
regulation, examination requirements, etc; prohibits
unaffiliated third parties that receive confidential customer
information from a financial institution for any purpose from
sharing this information with any other unaffiliated parties;
requires all financial institutions to disclose to customers
their policies and practices for collecting customer
information, for protecting confidential information, and for
sharing such information with unaffiliated parties; prohibits
financial institutions from sharing with unaffiliated parties
any credit care, savings, and transaction account numbers or
other means of access to such accounts for purposes of
marketing to the customer; enhances regulatory authority to
detect and enforce violations of consumer privacy requirements;
requires study of current information sharing among affiliates
and unaffiliated third parties; requires regulations to
implement these privacy protections and security standards and
authorizes the regulators full enforcement authority under
existing standards. (30 minutes)
text of amendments made in order under the rule
1. An Amendment To Be Offered by Representative Burr of North Carolina,
or Representative Myrick of North Carolina, or a Designee, Debatable
for 10 Minutes
Page 29, line 24, before the period insert ``, except this
paragraph shall not apply with respect to a company that owns a
broadcasting station licensed under title III of the
Communications Act of 1934 and the shares of which have been
controlled by an insurance company since January 1, 1998''.
----------
2. An Amendment To Be Offered by Representative Schakowsky of Illinois,
or Representative Lee of California, or a Designee, Debatable for 10
Minutes
Page 72, after line 13, insert the following new section (and
amend the table of contents accordingly):
SEC. 110A. STUDY OF FINANCIAL MODERNIZATION'S AFFECT ON THE
ACCESSIBILITY OF SMALL BUSINESS AND FARM LOANS
(a) Study.--The Secretary of the Treasury, in consultation
with the Federal banking agencies (as defined in Section 3(z)
of the Federal Deposit Insurance Act), shall conduct a study of
the extent to which credit is being provided to and for small
business and farms, as a result of this Act.
(b) Report.--Before the end of the 5-year period beginning on
the date of the enactment of this Act, the Secretary, in
consultation with the Federal banking agencies, shall submit a
report to the Congress on the study conducted pursuant to
subsection (a) and shall include such recommendations as the
Secretary determines to be appropriate for administrative and
legislative action.
----------
3. An Amendment To Be Offered by Representative King of New York, or
Representative Velaquez of New York, or a Designee, Debatable for 10
Minutes
Page 96, line 12, strike ``operations of ''.
----------
4. An Amendment To Be Offered by Representative Paul of Texas, or
Representative Barr of Georgia, or a Designee, Debatable for 10 Minutes
Page 235, after line 23, insert the following new
subsections:
(c) Prevention of Future Privacy Invasions.--
(1) In general.--Section 5318(g) of title 31, United
States Code, is amended--
(A) by striking paragraph (1) and inserting
the following new paragraph:
``(1) In general.--Any financial institution, and any
director, officer, employee, or agent of any financial
institution, may report to the Secretary any
transaction relevant to a possible violation of a law
or regulation.'';
(B) in paragraph (2), by striking
``suspicious'';
(C) in paragraph (4)(A)--
(i) by striking ``requiring'' and
inserting ``receiving''; and
(ii) by striking ``suspicious
transaction'' and inserting
``transaction relevant to a possible
violation of a law or regulation'';
(D) in paragraph (4)(B), by striking
``suspicious transaction'' and inserting
``transaction relevant to a possible violation
of a law or regulation''; and
(E) by adding at the end of paragraph (4) the
following new subparagraph:
``(D) Recordkeeping.--The Secretary shall
ensure that no report filed under this
paragraph is maintained by the Secretary or any
Federal or State law enforcement or supervisory
agency to whom access to the report (or
information therein) has been granted after the
earlier of--
``(i) the end of the 4-year period
beginning on the date the report was
received; or
``(ii) 60 days after the expiration
of the longest statute of limitations
relating to any possible violation of a
law or regulation identified in such
report,
unless the report or information contained in
the report is being used in an on-going
investigation of a possible violation of a law
or regulation identified in such report.''.
(2) Clarification of purposes of anti-money
laundering program.--Section 5318(h) of title 31,
United States Code, is amended by adding at the end the
following new paragraph:
``(3) Limitation.--Notwithstanding paragraphs (1) and
(2), the Secretary may not require or encourage an
insured depository institution or any affiliate of an
insured depository institution to--
``(A) determine the sources of funds used by
any customer of the institution or affiliate in
any transaction;
``(B) assess the purpose of any transaction
or seek from the customer an explanation for
the transaction;
``(C) determine what transactions are normal
or expected for a customer;
``(D) monitor customer body language or
behavior;
``(E) monitor customer transactions and
compare them to historical patterns; or
``(F) report to the Secretary transactions
that do not conform to a customer's historical
transaction patterns.
(3) Clerical amendments.--
(A) The subsection heading for section
5318(g) is amended to read as follows:
``(g) Reporting Possible Violations of Laws and
Regulations.--''.
(B) The paragraph heading for section
5318(g)(4) of title 31, United States Code, is
amended to read as follows:
``(4) Single designee for reporting transactions
relevant to a possible violation of law or
regulation.--''.
(d) Increase in Trigger Amount for Cash Transaction
Reports.--
(1) Domestic.--Section 5313(a) of title 31, United
States Code, is amended by adding at the end the
following new sentence: ``In no event may the Secretary
require reports under this section for transactions
involving less than $25,000.''.
(2) Importing and exporting.--Section 5316(a) is
amended by striking ``$10,000'' each place such term
appears and inserting ``$25,000''.
(e) Agency Reports on Reconciling Penalty Amounts.--Before
the end of the 1-year period beginning on the date of the
enactment of this Act, the Federal banking agencies (as defined
in section 3 of the Federal Deposit Insurance Act) shall submit
reports to the Congress containing proposed legislation to
conform the penalties imposed on depository institutions (as
defined in section 3 of the Federal Deposit Insurance Act) for
violations of subchapter II of chapter 53 of title 31, United
States Code, to the penalties imposed on such institutions
under section 8 of the Federal Deposit Insurance Act.
----------
5. An Amendment To Be Offered by Representative Foley of Florida, or a
Designee, Debatable for 10 Minutes
Page 244, after line 18, insert the following new section
(and amend the table of contents accordingly):
SEC. 198A. INTERSTATE BRANCHES AND AGENCIES OF FOREIGN BANKS.
Section 5(a)(7) of the International Banking Act of 1978
(12 U.S.C. 3103(a)(7)), is amended to read as follows:
``(7) Additional authority for interstate branches
and agencies of foreign banks, upgrades of certain
foreign bank agencies and branches.--Notwithstanding
paragraphs (1) and (2), a foreign bank may--
``(A) with the approval of the Board and the
Comptroller of the Currency, establish and
operate a Federal branch or Federal agency or,
with the approval of the Board and the
appropriate State bank supervisor, a State
branch or State agency in any State outside the
foreign bank's home State if--
``(i) the establishment and operation
of such branch or agency is permitted
by the State in which the branch or
agency is to be established, and
``(ii) in the case of a Federal or
State branch, the branch receives only
such deposits as would be permitted for
a corporation organized under section
25A of the Federal Reserve Act (12
U.S.C. 611 et seq.), or
``(B) with the approval of the Board and the
relevant licensing authority (the Comptroller
in the case of a Federal branch or the
appropriate State supervisor in the case of a
State branch), upgrade an agency, or a branch
of the type referred to in subparagraph
(A)(ii), located in a State outside the foreign
bank's home State, into a Federal or State
branch if--
``(i) the establishment and operation
of such branch is permitted by such
State; and
``(ii) such agency or branch--
``(I) was in operation in
such State on the day before
September 29, 1994; or
``(II) has been in operation
in such State for a period of
time that meets the State's
minimum age requirement
permitted under section
44(a)(5) of the Federal Deposit
Insurance Act.''.
----------
6. An Amendment To Be Offered by Representative Slaughter of New York,
or a Designee, Debatable for 10 Minutes
Page 244, after line 18, insert the following new section:
SEC. 198A. FAIR TREATMENT OF WOMEN BY FINANCIAL ADVISERS.
(a) Findings.--The Congress finds as follows:
(1) Women's stature in society has risen
considerably, as they are now able to vote, own
property, and pursue independent careers, and are
granted equal protection under the law.
(2) Women are at least as fiscally responsible as
men, and more than half of all women have sole
responsibility for balancing the family checkbook and
paying the bills.
(3) Estate planners, trust officers, investment
advisers, and other financial planners and advisers
still encourage the unjust and outdated practice of
leaving assets in trust for the category of wives and
daughters, along with senile parents, minors, and
mentally incompetent children.
(4) Estate planners, trust officers, investment
advisers, and other financial planners and advisers
still use sales themes and tactics detrimental to women
by stereotyping women as uncomfortable handling money
and needing protection from their own possible errors
of judgment and ``fortune hunters''.
(b) Sense of the Congress.--It is the sense of the Congress
that estate planners, trust officers, investment advisers, and
other financial planners and advisers should--
(1) eliminate examples in their training materials
which portray women as incapable and foolish; and
(2) develop fairer and more balanced presentations
that eliminate outmoded and stereotypical examples
which lead clients to take actions that are financially
detrimental to their wives and daughters.
----------
7. An Amendment To Be Offered by Representative Cook of Utah, or a
Designee, Debatable for 10 Minutes
Page 311, strike line 4 and all that follows through page
312, line 16 and insert the following new section (and amend
the table of contents accordingly):
SEC. 241. STUDY OF LIMITING THROUGH REGULATION FEES ASSOCIATED WITH
PROVIDING FINANCIAL PRODUCTS.
Not later than 1 year after the date of enactment of this
Act, the Comptroller General of the United States shall submit
a report to the Congress regarding the consequences of
limiting, through regulation, commissions, fees, or other costs
incurred by customers in the acquisition of financial products.
----------
8. An Amendment To Be Offered by Representative Roukema of New Jersey,
or a Designee, Debatable for 10 Minutes
Page 312, after line 16, insert the following new subtitle
(and amend the table of contents accordingly):
Subtitle E--Banks and Bank Holding Companies
SEC. 251. CONSULTATION.
(a) In General.--The Securities and Exchange Commission shall
consult and coordinate comments with the appropriate Federal
banking agency before taking any action or rendering any
opinion with respect to the manner in which any insured
depository institution or depository institution holding
company reports loan loss reserves in its financial statement,
including the amount of any such loan loss reserve.
(b) Definitions.--For purposes of subsection (a), the terms
``insured depository institution'', ``depository institution
holding company'', and ``appropriate Federal banking agency''
have the same meaning as in section 3 of the Federal Deposit
Insurance Act.
----------
9. An Amendment To Be Offered by Representative Watt of North Carolina,
or a Designee, Debatable for 10 Minutes
Page 325, line 25, strike the ``or'' after the semicolon.
Page 326, line 4, strike the period and insert ``; or''.
Page 326, after line 4, insert the following new
subparagraph:
``(C) in the case of an institution or
subsidiary at which insurance products are sold
or offered for sale, the fact that--
``(i) the approval of an extension of
credit to a customer by the institution
or subsidiary may not be conditioned on
the purchase of an insurance product by
such customer from the institution or
subsidiary; and
``(ii) the customer is free to
purchase the insurance product from
another source.''.
----------
10. An Amendment To Be Offered by Representative Bliley of Virginia, or
a Designee, Debatable for 10 Minutes
Page 327, after line 16, insert the following subsection (and
redesignate subsequent subsections accordingly):
``(e) Domestic Violence Discrimination Prohibition.--
``(1) In general.--In the case of an applicant for,
or an insured under, any insurance product described in
paragraph (2), the status of the applicant or insured
as a victim of domestic violence, or as a provider of
services to victims of domestic violence, shall not be
considered as a criterion in any decision with regard
to insurance underwriting, pricing, renewal, or scope
of coverage of insurance policies, or payment of
insurance claims, except as required or expressly
permitted under State law.
``(2) Scope of application.--The prohibition
contained in paragraph (1) shall apply to any insurance
product which is sold or offered for sale, as
principal, agent, or broker, by any insured depository
institution or wholesale financial institution or any
person who is engaged in such activities at an office
of the institution or on behalf of the institution.
``(3) Sense of the congress.--It is the sense of the
Congress that, by the end of the 30-month period
beginning on the date of the enactment of this Act, the
States should enact prohibitions against discrimination
with respect to insurance products that are at least as
strict as the prohibitions contained in paragraph (1).
``(4) Domestic violence defined.--For purposes of
this subsection, the term `domestic violence' means the
occurrence of 1 or more of the following acts by a
current or former family member, household member,
intimate partner, or caretaker:
``(A) Attempting to cause or causing or
threatening another person physical harm,
severe emotional distress, psychological
trauma, rape, or sexual assault.
``(B) Engaging in a course of conduct or
repeatedly committing acts toward another
person, including following the person without
proper authority, under circumstances that
place the person in reasonable fear of bodily
injury or physical harm.
``(C) Subjecting another person to false
imprisonment.
``(D) Attempting to cause or cause damage to
property so as to intimidate or attempt to
control the behavior of another person.
Page 336, after line 13, insert the following new subtitle
(and redesignate subsequent subtitles and amend the table of
contents accordingly):
Subtitle B--Redomestication of Mutual Insurers
SEC. 311. GENERAL APPLICATION.
This subtitle shall only apply to a mutual insurance company
in a State which has not enacted a law which expressly
establishes reasonable terms and conditions for a mutual
insurance company domiciled in such State to reorganize into a
mutual holding company.
SEC. 312. REDOMESTICATION OF MUTUAL INSURERS.
(a) Redomestication.--A mutual insurer organized under the
laws of any State may transfer its domicile to a transferee
domicile as a step in a reorganization in which, pursuant to
the laws of the transferee domicile and consistent with the
standards in subsection (f), the mutual insurer becomes a stock
insurer that is a direct or indirect subsidiary of a mutual
holding company.
(b) Resulting Domicile.--Upon complying with the applicable
law of the transferee domicile governing transfers of domicile
and completion of a transfer pursuant to this section, the
mutual insurer shall cease to be a domestic insurer in the
transferor domicile and, as a continuation of its corporate
existence, shall be a domestic insurer of the transferee
domicile.
(c) Licenses Preserved.--The certificate of authority,
agents' appointments and licenses, rates, approvals and other
items that a licensed State allows and that are in existence
immediately prior to the date that a redomesticating insurer
transfers its domicile pursuant to this subtitle shall continue
in full force and effect upon transfer, if the insurer remains
duly qualified to transact the business of insurance in such
licensed State.
(d) Effectiveness of Outstanding Policies and Contracts.--
(1) In general.--All outstanding insurance policies
and annuities contracts of a redomesticating insurer
shall remain in full force and effect and need not be
endorsed as to the new domicile of the insurer, unless
so ordered by the State insurance regulator of a
licensed State, and then only in the case of
outstanding policies and contracts whose owners reside
in such licensed State.
(2) Forms.--
(A) Applicable State law may require a
redomesticating insurer to file new policy
forms with the State insurance regulator of a
licensed State on or before the effective date
of the transfer.
(B) Notwithstanding subparagraph (A), a
redomesticating insurer may use existing policy
forms with appropriate endorsements to reflect
the new domicile of the redomesticating insurer
until the new policy forms are approved for use
by the State insurance regulator of such
licensed State.
(e) Notice.--A redomesticating insurer shall give notice of
the proposed transfer to the State insurance regulator of each
licensed State and shall file promptly any resulting amendments
to corporate documents required to be filed by a foreign
licensed mutual insurer with the insurance regulator of each
such licensed State.
(f) Procedural Requirements.--No mutual insurer may
redomesticate to another State and reorganize into a mutual
holding company pursuant to this section unless the State
insurance regulator of the transferee domicile determines that
the plan of reorganization of the insurer includes the
following requirements:
(1) Approval by board of directors and
policyholders.--The reorganization is approved by at
least a majority of the board of directors of the
mutual insurer and at least a majority of the
policyholders who vote after notice, disclosure of the
reorganization and the effects of the transaction on
policyholder contractual rights, and reasonable
opportunity to vote, in accordance with such notice,
disclosure, and voting procedures as are approved by
the State insurance regulator of the transferee
domicile.
(2) Continued voting control by policyholders; review
of public stock offering.--After the consummation of a
reorganization, the policyholders of the reorganized
insurer shall have the same voting rights with respect
to the mutual holding company as they had before the
reorganization with respect to the mutual insurer. With
respect to an initial public offering of stock, the
offering shall be conducted in compliance with
applicable securities laws and in a manner approved by
the State insurance regulator of the transferee
domicile.
(3) Award of stock or grant of options to officers
and directors.--For a period of 6 months after
completion of an initial public offering, neither a
stock holding company nor the converted insurer shall
award any stock options or stock grants to persons who
are elected officers or directors of the mutual holding
company, the stock holding company, or the converted
insurer, except with respect to any such awards or
options to which a person is entitled as a policyholder
and as approved by the State insurance regulator of the
transferee domicile.
(4) Contractual rights.--Upon reorganization into a
mutual holding company, the contractual rights of the
policyholders are preserved.
(5) Fair and equitable treatment of policyholders.--
The reorganization is approved as fair and equitable to
the policyholders by the insurance regulator of the
transferee domicile.
SEC. 313. EFFECT ON STATE LAWS RESTRICTING REDOMESTICATION.
(a) In General.--Unless otherwise permitted by this subtitle,
State laws of any transferor domicile that conflict with the
purposes and intent of this subtitle are preempted, including
but not limited to--
(1) any law that has the purpose or effect of
impeding the activities of, taking any action against,
or applying any provision of law or regulation to, any
insurer or an affiliate of such insurer because that
insurer or any affiliate plans to redomesticate, or has
redomesticated, pursuant to this subtitle;
(2) any law that has the purpose or effect of
impeding the activities of, taking action against, or
applying any provision of law or regulation to, any
insured or any insurance licensee or other intermediary
because such person has procured insurance from or
placed insurance with any insurer or affiliate of such
insurer that plans to redomesticate, or has
redomesticated, pursuant to this subtitle, but only to
the extent that such law would treat such insured
licensee or other intermediary differently than if the
person procured insurance from, or placed insurance
with, an insured licensee or other intermediary which
had not redomesticated;
(3) any law that has the purpose or effect of
terminating, because of the redomestication of a mutual
insurer pursuant to this subtitle, any certificate of
authority, agent appointment or license, rate approval,
or other approval, of any State insurance regulator or
other State authority in existence immediately prior to
the redomestication in any State other than the
transferee domicile.
(b) Differential Treatment Prohibited.--No State law,
regulation, interpretation, or functional equivalent thereof,
of a State other than a transferee domicile may treat a
redomesticating or redomesticated insurer or any affiliate
thereof any differently than an insurer operating in that State
that is not a redomesticating or redomesticated insurer.
(c) Laws Prohibiting Operations.--If any licensed State fails
to issue, delays the issuance of, or seeks to revoke an
original or renewal certificate of authority of a
redomesticated insurer immediately following redomestication,
except on grounds and in a manner consistent with its past
practices regarding the issuance of certificates of authority
to foreign insurers that are not redomesticating, then the
redomesticating insurer shall be exempt from any State law of
the licensed State to the extent that such State law or the
operation of such State law would make unlawful, or regulate,
directly or indirectly, the operation of the redomesticated
insurer, except that such licensed State may require the
redomesticated insurer to--
(1) comply with the unfair claim settlement practices
law of the licensed State;
(2) pay, on a nondiscriminatory basis, applicable
premium and other taxes which are levied on licensed
insurers or policyholders under the laws of the
licensed State;
(3) register with and designate the State insurance
regulator as its agent solely for the purpose of
receiving service of legal documents or process;
(4) submit to an examination by the State insurance
regulator in any licensed state in which the
redomesticated insurer is doing business to determine
the insurer's financial condition, if--
(A) the State insurance regulator of the
transferee domicile has not begun an
examination of the redomesticated insurer and
has not scheduled such an examination to begin
before the end of the 1-year period beginning
on the date of the redomestication; and
(B) any such examination is coordinated to
avoid unjustified duplication and repetition;
(5) comply with a lawful order issued in--
(A) a delinquency proceeding commenced by the
State insurance regulator of any licensed State
if there has been a judicial finding of
financial impairment under paragraph (7); or
(B) a voluntary dissolution proceeding;
(6) comply with any State law regarding deceptive,
false, or fraudulent acts or practices, except that if
the licensed State seeks an injunction regarding the
conduct described in this paragraph, such injunction
must be obtained from a court of competent jurisdiction
as provided in section 314(a);
(7) comply with an injunction issued by a court of
competent jurisdiction, upon a petition by the State
insurance regulator alleging that the redomesticating
insurer is in hazardous financial condition or is
financially impaired;
(8) participate in any insurance insolvency guaranty
association on the same basis as any other insurer
licensed in the licensed State; and
(9) require a person acting, or offering to act, as
an insurance licensee for a redomesticated insurer in
the licensed State to obtain a license from that State,
except that such State may not impose any qualification
or requirement that discriminates against a nonresident
insurance licensee.
SEC. 314. OTHER PROVISIONS.
(a) Judicial Review.--The appropriate United States district
court shall have exclusive jurisdiction over litigation arising
under this section involving any redomesticating or
redomesticated insurer.
(b) Severability.--If any provision of this section, or the
application thereof to any person or circumstances, is held
invalid, the remainder of the section, and the application of
such provision to other persons or circumstances, shall not be
affected thereby.
SEC. 315. DEFINITIONS.
For purposes of this subtitle, the following definitions
shall apply:
(1) Court of competent jurisdiction.--The term
``court of competent jurisdiction'' means a court
authorized pursuant to section 314(a) to adjudicate
litigation arising under this subtitle.
(2) Domicile.--The term ``domicile'' means the State
in which an insurer is incorporated, chartered, or
organized.
(3) Insurance licensee.--The term ``insurance
licensee'' means any person holding a license under
State law to act as insurance agent, subagent, broker,
or consultant.
(4) Institution.--The term ``institution'' means a
corporation, joint stock company, limited liability
company, limited liability partnership, association,
trust, partnership, or any similar entity.
(5) Licensed state.--The term ``licensed State''
means any State, the District of Columbia, American
Samoa, Guam, Puerto Rico, or the United States Virgin
Islands in which the redomesticating insurer has a
certificate of authority in effect immediately prior to
the redomestication.
(6) Mutual insurer.--The term ``mutual insurer''
means a mutual insurer organized under the laws of any
State.
(7) Person.--The term ``person'' means an individual,
institution, government or governmental agency, State
or political subdivision of a State, public
corporation, board, association, estate, trustee, or
fiduciary, or other similar entity.
(8) Policyholder.--The term ``policyholder'' means
the owner of a policy issued by a mutual insurer,
except that, with respect to voting rights, the term
means a member of a mutual insurer or mutual holding
company granted the right to vote, as determined under
applicable State law.
(9) Redomesticated insurer.--The term
``redomesticated insurer'' means a mutual insurer that
has redomesticated pursuant to this subtitle.
(10) Redomesticating insurer.--The term
``redomesticating insurer'' means a mutual insurer that
is redomesticating pursuant to this subtitle.
(11) Redomestication or transfer.--The terms
``redomestication'' and ``transfer'' mean the transfer
of the domicile of a mutual insurer from one State to
another State pursuant to this subtitle.
(12) State insurance regulator.--The term ``State
insurance regulator'' means the principal insurance
regulatory authority of a State, the District of
Columbia, American Samoa, Guam, Puerto Rico, or the
United States Virgin Islands.
(13) State law.--The term ``State law'' means the
statutes of any State, the District of Columbia,
American Samoa, Guam, Puerto Rico, or the United States
Virgin Islands and any regulation, order, or
requirement prescribed pursuant to any such statute.
(14) Transferee domicile.--The term ``transferee
domicile'' means the State to which a mutual insurer is
redomesticating pursuant to this subtitle.
(15) Transferor domicile.--The term ``transferor
domicile'' means the State from which a mutual insurer
is redomesticating pursuant to this subtitle.
SEC. 316. EFFECTIVE DATE.
This subtitle shall take effect on the date of the enactment
of this Act.
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11. An Amendment To Be Offered by Representative Oxley of Ohio, or
Representative Pryce of Ohio, or a Designee, Debatable for 30 Minutes
Page 378, beginning on line 16, strike subtitle A of title V
and insert the following (and conform the table of contents
accordingly):
Subtitle A--Disclosure of Nonpublic Personal Information
SEC. 501. PROTECTION OF NONPUBLIC PERSONAL INFORMATION.
(a) Privacy Obligation Policy.--It is the policy of the
Congress that each financial institution has an affirmative and
continuing obligation to respect the privacy of its customers
and to protect the security and confidentiality of those
customers' nonpublic personal information.
(b) Financial Institutions Safeguards.--In furtherance of the
policy in subsection (a), each agency or authority described in
section 505(a) shall establish appropriate standards for the
financial institutions subject to their jurisdiction relating
to administrative, technical, and physical safeguards--
(1) to insure the security and confidentiality of
customer records and information;
(2) to protect against any anticipated threats or
hazards to the security or integrity of such records;
and
(3) to protect against unauthorized access to or use
of such records or information which could result in
substantial harm or inconvenience to any customer.
SEC. 502. OBLIGATIONS WITH RESPECT TO DISCLOSURES OF PERSONAL
INFORMATION.
(a) Notice Requirements.--Except as otherwise provided in
this subtitle, a financial institution may not, directly or
through any affiliate, disclose to a nonaffiliated third party
any nonpublic personal information, unless such financial
institution provides or has provided to the consumer a notice
that complies with section 503(b).
(b) Opt Out.--
(1) In general.--A financial institution may not
disclose nonpublic personal information to
nonaffiliated third parties unless--
(A) such financial institution clearly and
conspicuously discloses to the consumer, in
writing or in electronic form (or other form
permitted by the regulations prescribed under
section 504), that such information may be
disclosed to such third parties;
(B) the consumer is given the opportunity,
before the time that such information is
initially disclosed, to direct that such
information not be disclosed to such third
parties; and
(C) the consumer is given an explanation of
how the consumer can exercise that
nondisclosure option.
(2) Exception.--This subsection shall not prevent a
financial institution from providing nonpublic personal
information to a nonaffiliated third party to perform
services or functions on behalf of the financial
institution, including marketing of the financial
institution's own products or services or financial
products or services offered pursuant to joint
agreements between two or more financial institutions
that comply with the requirements imposed by the
regulations prescribed under section 504, if the
financial institution fully discloses the providing of
such information and enters into a contractual
agreement with the third party that requires the third
party to maintain the confidentiality of such
information.
(c) Limits on Reuse of Information.--Except as otherwise
provided in this subtitle, a nonaffiliated third party that
receives from a financial institution nonpublic personal
information under this section shall not, directly or through
an affiliate of such receiving third party, disclose such
information to any other person that is a nonaffiliated third
party of both the financial institution and such receiving
third party, unless such disclosure would be lawful if made
directly to such other person by the financial institution.
(d) Limitations on the Sharing of Account Number Information
for Marketing Purposes.--A financial institution shall not
disclose an account number or similar form of access number or
access code for a credit card account, deposit account, or
transaction account of a consumer to any nonaffiliated third
party for use in telemarketing, direct mail marketing, or other
marketing through electronic mail to the consumer.
(e) General Exceptions.--Subsections (a) and (b) shall not
prohibit the disclosure of nonpublic personal information--
(1) as necessary to effect, administer, or enforce a
transaction requested or authorized by the consumer, or
in connection with--
(A) servicing or processing a financial
product or service requested or authorized by
the consumer;
(B) maintaining or servicing the consumer's
account with the financial institution; or
(C) a proposed or actual securitization,
secondary market sale (including sales of
servicing rights), or similar transaction
related to a transaction of the consumer;
(2) with the consent or at the direction of the
consumer;
(3) to protect the confidentiality or security of its
records pertaining to the consumer, the service or
product, or the transaction therein, or to protect
against or prevent actual or potential fraud,
unauthorized transactions, claims, or other liability,
for required institutional risk control, or for
resolving customer disputes or inquiries, or to persons
holding a beneficial interest relating to the consumer,
or to persons acting in a fiduciary capacity on behalf
of the consumer;
(4) to provide information to insurance rate advisory
organizations, guaranty funds or agencies, applicable
rating agencies of the financial institution, persons
assessing the institution's compliance with industry
standards, and the institution's attorneys,
accountants, and auditors;
(5) to the extent specifically permitted or required
under other provisions of law and in accordance with
the Right to Financial Privacy Act of 1978, to law
enforcement agencies (including a Federal functional
regulator, a State insurance authority, or the Federal
Trade Commission), self-regulatory organizations, or
for an investigation on a matter related to public
safety;
(6) to a consumer reporting agency in accordance with
the Fair Credit Reporting Act, or in accordance with
interpretations of such Act by the Board of Governors
of the Federal Reserve System or the Federal Trade
Commission, including interpretations published as
commentary (16 C.F.R. 601-622);
(7) in connection with a proposed or actual sale,
merger, transfer, or exchange of all or a portion of a
business or operating unit if the disclosure of
nonpublic personal information concerns solely
consumers of such business or unit; or
(8) to comply with Federal, State, or local laws,
rules, and other applicable legal requirements; to
comply with a properly authorized civil, criminal, or
regulatory investigation or subpoena by Federal, State,
or local authorities; or to respond to judicial process
or government regulatory authorities having
jurisdiction over the financial institution for
examination, compliance, or other purposes as
authorized by law.
SEC. 503. DISCLOSURE OF INSTITUTION PRIVACY POLICY.
(a) Disclosure Required.--A financial institution shall
clearly and conspicuously disclose to each consumer, at the
time of establishing the customer relationship with the
consumer and not less than annually, in writing or in
electronic form (or other form permitted by the regulations
prescribed under section 504), its policies and practices with
respect to protecting the nonpublic personal information of
consumers in accordance with the rules prescribed under section
504.
(b) Information to be Included.--The disclosure required by
subsection (a) shall include--
(1) the policy and practices of the institution with
respect to disclosing nonpublic personal information to
nonaffiliated third parties, other than agents of the
institution, consistent with section 502 of this
subtitle, and including--
(A) the categories of persons to whom the
information is or may be disclosed, other than
the persons to whom the information may be
provided pursuant to section 502(e); and
(B) the practices and policies of the
institution with respect to disclosing of
nonpublic personal information of persons who
have ceased to be customers of the financial
institution;
(2) the categories of nonpublic personal information
that are collected by the financial institution;
(3) the policies that the institution maintains to
protect the confidentiality and security of nonpublic
personal information in accordance with section 501;
and
(4) the disclosures required, if any, under section
603(d)(2)(A)(iii) of the Fair Credit Reporting Act.
SEC. 504. RULEMAKING.
(a) Regulatory Authority.--The Federal banking agencies, the
National Credit Union Association, the Secretary of the
Treasury, and the Securities and Exchange Commission, shall
jointly prescribe, after consultation with the Federal Trade
Commission, and representatives of State insurance authorities
designated by the National Association of Insurance
Commissioners, such regulations as may be necessary to carry
out the purposes of this subtitle. Such regulations shall be
prescribed in accordance with applicable requirements of the
title 5, United States Code, and shall be issued in final form
within 6 months after the date of enactment of this Act.
(b) Authority to Grant Exceptions.--The regulations
prescribed under subsection (a) may include such additional
exceptions to subsections (a) and (b) of section 502 as are
deemed consistent with the purposes of this subtitle.
SEC. 505. ENFORCEMENT.
(a) In General.--This subtitle and the rules prescribed
thereunder shall be enforced by the Federal functional
regulators, the State insurance authorities, and the Federal
Trade Commission with respect to financial institutions subject
to their jurisdiction under applicable law, as follows:
(1) Under section 8 of the Federal Deposit Insurance
Act, in the case of--
(A) national banks, Federal branches and
Federal agencies of foreign banks, and any
subsidiaries of such entities, by the Office of
the Comptroller of the Currency;
(B) member banks of the Federal Reserve
System (other than national banks), branches
and agencies of foreign banks (other than
Federal branches, Federal agencies, and insured
State branches of foreign banks), commercial
lending companies owned or controlled by
foreign banks, organizations operating under
section 25 or 25A of the Federal Reserve Act,
bank holding companies and their nonbank
subsidiaries or affiliates (except broker-
dealers, affiliates providing insurance,
investment companies, and investment advisers),
by the Board of Governors of the Federal
Reserve System;
(C) banks insured by the Federal Deposit
Insurance Corporation (other than members of
the Federal Reserve System), insured State
branches of foreign banks, and any subsidiaries
of such entities, by the Board of Directors of
the Federal Deposit Insurance Corporation; and
(D) savings association the deposits of which
are insured by the Federal Deposit Insurance
Corporation, and any subsidiaries of such a
savings association, by the Director of the Office
of Thrift Supervision.
(2) Under the Federal Credit Union Act, by the
Administrator of the National Credit Union
Administration with respect to any Federal or state
chartered credit union, and any subsidiaries of such an
entity.
(3) Under the Farm Credit Act of 1971, by the Farm
Credit Administration with respect to the Federal
Agricultural Mortgage Corporation, any Federal land
bank, Federal land bank association, Federal
intermediate credit bank, or production credit
association.
(4) Under the Securities Exchange Act of 1934, by the
Securities and Exchange Commission with respect to any
broker-dealer.
(5) Under the Investment Company Act of 1940, by the
Securities and Exchange Commission with respect to
investment companies.
(6) Under the Investment Advisers Act of 1940, by the
Securities and Exchange Commission with respect to
investment advisers registered with the Commission
under such Act.
(7) Under Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U. S. C. 4501 et
seq.), by the Office of Federal Housing Enterprise
Oversight with respect to the Federal National Mortgage
Association and the Federal Home Loan Mortgage
Corporation.
(8) Under the Federal Home Loan Bank Act, by the
Federal Housing Finance Board with respect to Federal
home loan banks.
(9) Under State insurance law, in the case of any
person engaged in providing insurance, by the State
insurance authority of the State in which the person is
domiciled, subject to section 104 of this Act.
(10) Under the Federal Trade Commission Act, by the
Federal Trade Commission for any other financial
institution that is not subject to the jurisdiction of
any agency or authority under paragraphs (1) through
(9) of this subsection.
(b) Enforcement of Section 501.--
(1) In general.--Except as provided in paragraph (2),
the agencies and authorities described in subsection
(a) shall implement the standards prescribed under
section 501(b) in the same manner, to the extent
practicable, as standards prescribed pursuant to
subsection (a) of section 39 of the Federal Deposit
Insurance Act are implemented pursuant to such section.
(2) Exception.--The agencies and authorities
described in paragraphs (4), (5), (6), (9), and (10) of
subsection (a) shall implement the standards prescribed
under section 501(b) by rule with respect to the
financial institutions subject to their respective
jurisdictions under subsection (a).
(c) Definitions.--The terms used in subsection (a)(1) that
are not defined in this subtitle or otherwise defined in
section 3(s) of the Federal Deposit Insurance Act shall have
the meaning given to them in section 1(b) of the International
Banking Act of 1978.
SEC. 506. FAIR CREDIT REPORTING ACT AMENDMENT.
(a) Amendment.--Section 621 of the Fair Credit Reporting Act
(15 U.S.C. 1681s) is amended--
(1) in subsection (d), by striking everything
following the end of the second sentence; and
(2) by striking subsection ``(e)'' and inserting in
lieu thereof the following:
``(e) Regulatory Authority.--
``(1) The Federal banking agencies referred to in
paragraphs (1) and (2) of subsection (b) shall jointly
prescribe such regulations as necessary to carry out
the purposes of this Act with respect to any persons
identified under paragraphs (1) and (2) of subsection
(b), or to the holding companies and affiliates of such
persons.
``(2) The Administrator of the National Credit Union
Administration shall prescribe such regulations as
necessary to carry out the purposes of this Act with
respect to any persons identified under paragraph (3)
of subsection (b).''.
(b) Conforming Amendment.--Section 621(a) of the Fair Credit
Reporting Act (15 U.S.C. 1681s(a)) is amended by striking
paragraph (4).
SEC. 507. RELATION TO OTHER PROVISIONS.
This subtitle shall not apply to any information to which
subtitle D of title III applies.
SEC. 508. STUDY OF INFORMATION SHARING AMONG FINANCIAL AFFILIATES.
(a) In General.--The Secretary of the Treasury, in
conjunction with the Federal functional regulators and the
Federal Trade Commission, shall conduct a study of information
sharing practices among financial institutions and their
affiliates. Such study shall include--
(1) the purposes for the sharing of confidential
customer information with affiliates or with
nonaffiliated third parties;
(2) the extent and adequacy of security protections
for such information;
(3) the potential risks for customer privacy of such
sharing of information;
(4) the potential benefits for financial institutions
and affiliates of such sharing of information;
(5) the potential benefits for customers of such
sharing of information;
(6) the adequacy of existing laws to protect customer
privacy;
(7) the adequacy of financial institution privacy
policy and privacy rights disclosure under existing
law;
(8) the feasibility of different approaches,
including opt-out and opt-in, to permit customers to
direct that confidential information not be shared with
affiliates and nonaffiliated third parties; and
(9) the feasibility of restricting sharing of
information for specific uses or of permitting
customers to direct the uses for which information may
be shared.
(b) Consultation.--The Secretary shall consult with
representatives of State insurance authorities designated by
the National Association of Insurance Commissioners, and also
with financial services industry, consumer organizations and
privacy groups, and other representatives of the general
public, in formulating and conducting the study required by
subsection (a).
(c) Report.--Before the end of the 6-month period beginning
on the date of the enactment of this Act, the Secretary shall
submit a report to the Congress containing the findings and
conclusions of the study required under subsection (a),
together with such recommendations for legislative or
administrative action as may be appropriate.
SEC. 509. DEFINITIONS.
As used in this subtitle:
(1) Federal banking agency.--The term ``Federal
banking agency'' has the meanings given to such terms
in section 3 of the Federal Deposit Insurance Act.
(2) Federal functional regulator.--The term ``Federal
functional regulator'' means--
(A) the Board of Governors of the Federal
Reserve System;
(B) the Office of the Comptroller of the
Currency;
(C) the Board of Directors of the Federal
Deposit Insurance Corporation;
(D) the Director of the Office of Thrift
Supervision;
(E) the National Credit Union Administration
Board;
(F) the Farm Credit Administration; and
(G) the Securities and Exchange Commission.
(3) Financial institution.--The term ``financial
institution'' means any institution the business of
which is engaging in financial activities or activities
that are incidental to financial activities, as
described in section 6(c) of the Bank Holding Company
Act of 1956.
(4) Nonpublic personal information.--
(A) The term ``nonpublic personal
information'' means personally identifiable
financial information--
(i) provided by a consumer to a
financial institution;
(ii) resulting from any transaction
with the consumer or the service
performed for the consumer; or
(iii) otherwise obtained by the
financial institution.
(B) Such term does not include publicly
available information, as such term is defined
by the regulations prescribed under section
504.
(C) Notwithstanding subparagraph (B), such
term shall include any list, description, or
other grouping of consumers (and publicly
available information pertaining to them) that
is derived using any personally identifiable
information other than publicly available
information.
(5) Nonaffiliated third parties.--The term
``nonaffiliated third parties'' means any entity that
is not an affiliate of, or related by common ownership
or affiliated by corporate control with, the financial
institution, but does not include a joint employee of
such institution.
(6) Affiliate.--The term ``affiliate'' means any
company that controls, is controlled by, or is under
common control with another company.
(7) Necessary to effect, administer, or enforce.--The
term ``as necessary to effect, administer or enforce
the transaction'' means--
(A) the disclosure is required, or is a
usual, appropriate or acceptable method, to
carry out the transaction or the product or
service business of which the transaction is a
part, and record or service or maintain the
consumer's account in the ordinary course of
providing the financial service or financial
product, or to administer or service benefits
or claims relating to the transaction or the
product or service business of which it is a
part, and includes--
(i) providing the consumer or the
consumer's agent or broker with a
confirmation, statement, or other
record of the transaction, or
information on the status or value of
the financial service or financial
product; and
(ii) the accrual or recognition of
incentives or bonuses associated with
the transaction that are provided by
the financial institution or any other
party;
(B) the disclosure is required, or is one of
the lawful or appropriate methods, to enforce
the rights of the financial institution or of
other persons engaged in carrying out the
financial transaction, or providing the product
or service;
(C) the disclosure is required, or is a
usual, appropriate, or acceptable method, for
insurance underwriting at the consumer's
request or for reinsurance purposes, or for any
of the following purposes as they relate to a
consumer's insurance: account administration,
reporting, investigating, or preventing fraud
or material misrepresentation, processing
premium payments, processing insurance claims,
administering insurance benefits (including
utilization review activities), participating
in research projects, or as otherwise required
or specifically permitted by Federal or State
law; or
(D) the disclosure is required, or is a
usual, appropriate or acceptable method, in
connection with--
(i) the authorization, settlement,
billing, processing, clearing,
transferring, reconciling, or
collection of amounts charged, debited,
or otherwise paid using a debit, credit
or other payment card, check, or
account number, or by other payment
means;
(ii) the transfer of receivables,
accounts or interests therein; or
(iii) the audit of debit, credit or
other payment information.
(8) State insurance authority.--The term ``State
insurance authority'' means, in the case of any person
engaged in providing insurance, the State insurance
authority of the State in which the person is
domiciled.
(9) Consumer.--The term ``consumer'' means an
individual who obtains, from a financial institution,
financial products or services which are to be used
primarily for personal, family, or household purposes,
and also means the legal representative of such an
individual.
(10) Joint agreement.--The term ``joint agreement''
means a formal written contract pursuant to which two
or more financial institutions jointly offer, endorse,
or sponsor a financial product or service, and any
payments between the parties are based on business or
profit generated.
SEC. 510. EFFECTIVE DATE.
This subtitle shall take effect 6 months after the date on
which the rules under section 503 are promulgated, except--
(1) to the extent that a later date is specified in
such rules; and
(2) that section 506 shall be effective upon
enactment.