[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.
                              ----------                              


  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.

                                  
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