[House Report 108-152]
[From the U.S. Government Publishing Office]



108th Congress                                            Rept. 108-152
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
            FINANCIAL SERVICES REGULATORY RELIEF ACT OF 2003

                                _______
                                

                 June 12, 2003.--Ordered to be printed

                                _______
                                

  Mr. Oxley, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1375]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Financial Services, to whom was referred the 
bill (H.R. 1375) to provide regulatory relief and improve 
productivity for insured depository institutions, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................    30
Background and Need for Legislation..............................    31
Hearings.........................................................    32
Committee Consideration..........................................    32
Committee Votes..................................................    32
Committee Oversight Findings.....................................    34
Performance Goals and Objectives.................................    34
New Budget Authority, Eintitlement Authority, and Tax 
  Expenditures...................................................    34
Committee Cost Estimate..........................................    34
Congressional Budget Office Cost Estimate........................    35
Federal Mandates Statement.......................................    43
Advisory Committee Statement.....................................    43
Constitutional Authority Statement...............................    43
Applicability to Legislative Branch..............................    43
Section-by-Section Analysis......................................    44
Changes in Existing Law Make by the Bill, as Reported............    57
Additional Views.................................................   138

                               Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Financial Services 
Regulatory Relief Act of 2003''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

                   TITLE I--NATIONAL BANK PROVISIONS

Sec. 101. National bank directors.
Sec. 102. Voting in shareholder elections.
Sec. 103. Simplifying dividend calculations for national banks.
Sec. 104. Repeal of obsolete limitation on removal authority of the 
Comptroller of the Currency.
Sec. 105. Repeal of intrastate branch capital requirements.
Sec. 106. Clarification of waiver of publication requirements for bank 
merger notices.
Sec. 107. Capital equivalency deposits for Federal branches and 
agencies of foreign banks.
Sec. 108. Equal treatment for Federal agencies of foreign banks.
Sec. 109. Maintenance of a Federal branch and a Federal agency in the 
same State.
Sec. 110. Business organization flexibility for national banks.
Sec. 111. Clarification of the main place of business of a national 
bank.

                TITLE II--SAVINGS ASSOCIATION PROVISIONS

Sec. 201. Parity for savings associations under the Securities Exchange 
Act of 1934 and the Investment Advisers Act of 1940.
Sec. 202. Investments by Federal savings associations authorized to 
promote the public welfare.
Sec. 203. Mergers and consolidations of Federal savings associations 
with nondepository institution affiliates.
Sec. 204. Repeal of statutory dividend notice requirement for savings 
association subsidiaries of savings and loan holding companies.
Sec. 205. Modernizing statutory authority for trust ownership of 
savings associations.
Sec. 206. Repeal of overlapping rules governing purchased mortgage 
servicing rights.
Sec. 207. Restatement of authority for Federal savings associations to 
invest in small business investment companies.
Sec. 208. Removal of limitation on investments in auto loans.
Sec. 209. Selling and offering of deposit products.
Sec. 210. Funeral- and cemetery-related fiduciary services.
Sec. 211. Repeal of qualified thrift lender requirement with respect to 
out-of-state branches.
Sec. 212. Small business and other commercial loans.
Sec. 213. Clarifying citizenship of Federal savings associations for 
Federal court jurisdiction.
Sec. 214. Clarification of applicability of certain procedural 
doctrines.

                   TITLE III--CREDIT UNION PROVISIONS

Sec. 301. Privately insured credit unions authorized to become members 
of a Federal home loan bank.
Sec. 302. Leases of land on Federal facilities for credit unions.
Sec. 303. Investments in securities by Federal credit unions.
Sec. 304. Increase in general 12-year limitation of term of Federal 
credit union loans to 15 years.
Sec. 305. Increase in 1 percent investment limit in credit union 
service organizations.
Sec. 306. Member business loan exclusion for loans to nonprofit 
religious organizations.
Sec. 307. Check cashing and money transfer services offered within the 
field of membership.
Sec. 308. Voluntary mergers involving multiple common-bond credit 
unions.
Sec. 309. Conversions involving common-bond credit unions.
Sec. 310. Credit union governance.
Sec. 311. Providing the National Credit Union Administration with 
greater flexibility in responding to market conditions.
Sec. 312. Exemption from pre-merger notification requirement of the 
Clayton Act.
Sec. 313. Treatment of credit unions as depository institutions under 
securities laws.

              TITLE IV--DEPOSITORY INSTITUTION PROVISIONS

Sec. 401. Easing restrictions on interstate branching and mergers.
Sec. 402. Statute of limitations for judicial review of appointment of 
a receiver for depository institutions.
Sec. 403. Reporting requirements relating to insider lending.
Sec. 404. Amendment to provide an inflation adjustment for the small 
depository institution exception under the Depository Institution 
Management Interlocks Act.
Sec. 405. Enhancing the safety and soundness of insured depository 
institutions.
Sec. 406. Investments by insured savings associations in bank service 
companies authorized.
Sec. 407. Cross guarantee authority.
Sec. 408. Golden parachute authority and nonbank holding companies.
Sec. 409. Amendments relating to change in bank control.

         TITLE V--DEPOSITORY INSTITUTION AFFILIATES PROVISIONS

Sec. 501. Clarification of cross marketing provision.
Sec. 502. Amendment to provide the Federal Reserve Board with 
discretion concerning the imputation of control of shares of a company 
by trustees.
Sec. 503. Eliminating geographic limits on thrift service companies.
Sec. 504. Clarification of scope of applicable rate provision.

                  TITLE VI--BANKING AGENCY PROVISIONS

Sec. 601. Waiver of examination schedule in order to allocate examiner 
resources.
Sec. 602. Interagency data sharing.
Sec. 603. Penalty for unauthorized participation by convicted 
individual.
Sec. 604. Amendment permitting the destruction of old records of a 
depository institution by the FDIC after the appointment of the FDIC as 
receiver.
Sec. 605. Modernization of recordkeeping requirement.
Sec. 606. Clarification of extent of suspension, removal, and 
prohibition authority of Federal banking agencies in cases of certain 
crimes by institution-affiliated parties.
Sec. 607. Streamlining depository institution merger application 
requirements.
Sec. 608. Inclusion of Director of the Office of Thrift Supervision in 
list of banking agencies regarding insurance customer protection 
regulations.
Sec. 609. Shortening of post-approval antitrust review period with the 
agreement of the Attorney General.
Sec. 610. Protection of confidential information received by Federal 
banking regulators from foreign banking supervisors.
Sec. 611. Prohibition on the participation in the affairs of bank 
holding company or Edge Act or agreement corporations by convicted 
individual.
Sec. 612. Clarification that notice after separation from service may 
be made by an order.
Sec. 613. Examiners of financial institutions.
Sec. 614. Parity in standards for institution-affiliated parties.
Sec. 615. Enforcement against misrepresentations regarding FDIC deposit 
insurance coverage.
Sec. 616. Compensation of Federal home loan bank directors.
Sec. 617. Extension of terms of Federal home loan bank directors.
Sec. 618. Biennial reports on the status of agency employment of 
minorities and women.
Sec. 619. Coordination of State examination authority.

              TITLE VII--CLERICAL AND TECHNICAL AMENDMENTS

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

                   TITLE I--NATIONAL BANK PROVISIONS

SEC. 101. NATIONAL BANK DIRECTORS.

  Section 5146 of the Revised Statutes of the United States (12 U.S.C. 
72) is amended--
          (1) by striking ``Sec. 5146. Every director must during'' and 
        inserting the following:

``SEC. 5146. REQUIREMENTS FOR BANK DIRECTORS.

  ``(a) Residency Requirements.--Every director of a national bank 
shall, during'';
          (2) by striking ``total number of directors. Every director 
        must own in his or her own right'' and inserting ``total number 
        of directors.
  ``(b) Investment Requirement.--
          ``(1) In general.--Every director of a national bank shall 
        own, in his or her own right,''; and
          (3) by adding at the end the following new paragraph:
          ``(2) Exception for subordinated debt in certain cases.--In 
        lieu of the requirements of paragraph (1) relating to the 
        ownership of capital stock in the national bank, the 
        Comptroller of the Currency may, by regulation or order, permit 
        an individual to serve as a director of a national bank that 
        has elected, or notifies the Comptroller of the bank's 
        intention to elect, to operate as a S corporation pursuant to 
        section 1362(a) of the Internal Revenue Code of 1986, if that 
        individual holds debt of at least $1,000 issued by the national 
        bank that is subordinated to the interests of depositors and 
        other general creditors of the national bank.''.

SEC. 102. VOTING IN SHAREHOLDER ELECTIONS.

  Section 5144 of the Revised Statutes of the United States (12 U.S.C. 
61) is amended--
          (1) by striking ``or to cumulate'' and inserting ``or, if so 
        provided by the articles of association of the national bank, 
        to cumulate'';
          (2) by striking the comma after ``his shares shall equal''; 
        and
          (3) by adding at the end the following new sentence: ``The 
        Comptroller of the Currency may prescribe such regulations to 
        carry out the purposes of this section as the Comptroller 
        determines to be appropriate.''.

SEC. 103. SIMPLIFYING DIVIDEND CALCULATIONS FOR NATIONAL BANKS.

  (a) In General.--Section 5199 of the Revised Statutes of the United 
States (12 U.S.C. 60) is amended to read as follows:

``SEC. 5199. NATIONAL BANK DIVIDENDS.

  ``(a) In General.--Subject to subsection (b), the directors of any 
national bank may declare a dividend of so much of the undivided 
profits of the bank as the directors judge to be expedient.
  ``(b) Approval Required Under Certain Circumstances.--A national bank 
may not declare and pay dividends in any year in excess of an amount 
equal to the sum of the total of the net income of the bank for that 
year and the retained net income of the bank in the preceding two 
years, minus any transfers required by the Comptroller of the Currency 
(including any transfers required to be made to a fund for the 
retirement of any preferred stock), unless the Comptroller of the 
Currency approves the declaration and payment of dividends in excess of 
such amount.''.
  (b) Clerical Amendment.--The table of sections for chapter three of 
title LXII of the Revised Statutes of the United States is amended by 
striking the item relating to section 5199 and inserting the following 
new item:

``5199.  National bank dividends.''.

SEC. 104. REPEAL OF OBSOLETE LIMITATION ON REMOVAL AUTHORITY OF THE 
                    COMPTROLLER OF THE CURRENCY.

  Section 8(e)(4) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(e)(4)) is amended by striking the 5th sentence.

SEC. 105. REPEAL OF INTRASTATE BRANCH CAPITAL REQUIREMENTS.

  Section 5155(c) of the Revised Statutes of the United States (12 
U.S.C. 36(c)) is amended--
          (1) in the 2nd sentence, by striking ``, without regard to 
        the capital requirements of this section,''; and
          (2) by striking the last sentence.

SEC. 106. CLARIFICATION OF WAIVER OF PUBLICATION REQUIREMENTS FOR BANK 
                    MERGER NOTICES.

  The last sentence of sections 2(a) and 3(a)(2) of the National Bank 
Consolidation and Merger Act (12 U.S.C. 215(a) and 215a(a)(2), 
respectively) are each amended by striking ``Publication of notice may 
be waived, in cases where the Comptroller determines that an emergency 
exists justifying such waiver, by unanimous action of the shareholders 
of the association or State bank'' and inserting ``Publication of 
notice may be waived if the Comptroller determines that an emergency 
exists justifying such waiver or if the shareholders of the association 
or State bank agree by unanimous action to waive the publication 
requirement for their respective institutions''.

SEC. 107. CAPITAL EQUIVALENCY DEPOSITS FOR FEDERAL BRANCHES AND 
                    AGENCIES OF FOREIGN BANKS.

  Section 4(g) of the International Banking Act of 1978 (12 U.S.C. 
3102(g)) is amended to read as follows:
  ``(g) Capital Equivalency Deposit.--
          ``(1) In general.--Upon the opening of a Federal branch or 
        agency of a foreign bank in any State and thereafter, the 
        foreign bank, in addition to any deposit requirements imposed 
        under section 6, shall keep on deposit, in accordance with such 
        regulations as the Comptroller of the Currency may prescribe in 
        accordance with paragraph (2), dollar deposits, investment 
        securities, or other assets in such amounts as the Comptroller 
        of the Currency determines to be necessary for the protection 
        of depositors and other investors and to be consistent with the 
        principles of safety and soundness.
          ``(2) Limitation.--Notwithstanding paragraph (1), regulations 
        prescribed under such paragraph shall not permit a foreign bank 
        to keep assets on deposit in an amount that is less than the 
        amount required for a State licensed branch or agency of a 
        foreign bank under the laws and regulations of the State in 
        which the Federal agency or branch is located.''.

SEC. 108. EQUAL TREATMENT FOR FEDERAL AGENCIES OF FOREIGN BANKS.

  The 1st sentence of section 4(d) of the International Banking Act of 
1978 (12 U.S.C. 3102(d)) is amended by inserting ``from citizens or 
residents of the United States'' after ``deposits''.

SEC. 109. MAINTENANCE OF A FEDERAL BRANCH AND A FEDERAL AGENCY IN THE 
                    SAME STATE.

  Section 4(e) of the International Banking Act of 1978 (12 U.S.C. 
3102(e)) is amended by inserting ``if the maintenance of both an agency 
and a branch in the State is prohibited under the law of such State'' 
before the period at the end.

SEC. 110. BUSINESS ORGANIZATION FLEXIBILITY FOR NATIONAL BANKS.

  (a) In General.--Chapter one of title LXII of the Revised Statutes of 
the United States (12 U.S.C. 21 et seq.) is amended by inserting after 
section 5136B the following new section:

``SEC. 5136C. ALTERNATIVE BUSINESS ORGANIZATION.

  ``(a) In General.--The Comptroller of the Currency may prescribe 
regulations--
          ``(1) to permit a national bank to be organized other than as 
        a body corporate; and
          ``(2) to provide requirements for the organizational 
        characteristics of a national bank organized and operating 
        other than as a body corporate, consistent with the safety and 
        soundness of the national bank.
  ``(b) Equal Treatment.--Except as provided in regulations prescribed 
under subsection (a), a national bank that is operating other than as a 
body corporate shall have the same rights and privileges and shall be 
subject to the same duties, restrictions, penalties, liabilities, 
conditions, and limitations as a national bank that is organized as a 
body corporate.''.
  (b) Technical and Conforming Amendment.--Section 5136 of the Revised 
Statutes of the United States (12 U.S.C. 24) is amended, in the matter 
preceding the paragraph designated as the ``First'', by inserting ``or 
other form of business organization provided under regulations 
prescribed by the Comptroller of the Currency under section 5136C'' 
after ``a body corporate''.
  (c) Clerical Amendment.--The table of sections for chapter one of 
title LXII of the Revised Statutes of the United States (12 U.S.C. 21 
et seq.) is amended by inserting after the item relating to section 
5136B the following new item:

``5136C. Alternative business organization.''.

SEC. 111. CLARIFICATION OF THE MAIN PLACE OF BUSINESS OF A NATIONAL 
                    BANK.

  Title LXII of the Revised Statutes of the United States is amended--
          (1) in the paragraph designated the ``Second'' of section 
        5134 (12 U.S.C. 22), by striking ``The place where its 
        operations of discount and deposit are to be carried on'' and 
        inserting ``The place where the main office of the national 
        bank is, or is to be, located''; and
          (2) in section 5190 (12 U.S.C. 81), by striking ``the place 
        specified in its organization certificate'' and inserting ``the 
        main office of the national bank''.

                TITLE II--SAVINGS ASSOCIATION PROVISIONS

SEC. 201. PARITY FOR SAVINGS ASSOCIATIONS UNDER THE SECURITIES EXCHANGE 
                    ACT OF 1934 AND THE INVESTMENT ADVISERS ACT OF 
                    1940.

  (a) Securities Exchange Act of 1934.--
          (1) Definition of bank.--Section 3(a)(6) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78c(a)(6)) is amended--
                  (A) in subparagraph (A), by inserting ``or a Federal 
                savings association, as defined in section 2(5) of the 
                Home Owners' Loan Act'' after ``a banking institution 
                organized under the laws of the United States''; and
                  (B) in subparagraph (C)--
                          (i) by inserting ``or savings association as 
                        defined in section 2(4) of the Home Owners' 
                        Loan Act,'' after ``banking institution,''; and
                          (ii) by inserting ``or savings associations'' 
                        after ``having supervision over banks''.
          (2) Include ots under the definition of appropriate 
        regulatory agency for certain purposes.--Section 3(a)(34) of 
        such Act (15 U.S.C. 78c(a)(34)) is amended--
                  (A) in subparagraph (A)--
                          (i) in clause (ii), by striking ``(i) or 
                        (iii)'' and inserting ``(i), (iii), or (iv)'';
                          (ii) by striking ``and'' at the end of clause 
                        (iii);
                          (iii) by redesignating clause (iv) as clause 
                        (v); and
                          (iv) by inserting the following new clause 
                        after clause (iii):
                          ``(iv) the Director of the Office of Thrift 
                        Supervision, in the case of a savings 
                        association (as defined in section 3(b) of the 
                        Federal Deposit Insurance Act (12 U.S.C. 
                        1813(b))) the deposits of which are insured by 
                        the Federal Deposit Insurance Corporation, a 
                        subsidiary or a department or division of any 
                        such savings association, or a savings and loan 
                        holding company; and'';
                  (B) in subparagraph (B)--
                          (i) in clause (ii), by striking ``(i) or 
                        (iii)'' and inserting ``(i), (iii), or (iv)'';
                          (ii) by striking ``and'' at the end of clause 
                        (iii);
                          (iii) by redesignating clause (iv) as clause 
                        (v); and
                          (iv) by inserting the following new clause 
                        after clause (iii):
                          ``(iv) the Director of the Office of Thrift 
                        Supervision, in the case of a savings 
                        association (as defined in section 3(b) of the 
                        Federal Deposit Insurance Act (12 U.S.C. 
                        1813(b))) the deposits of which are insured by 
                        the Federal Deposit Insurance Corporation, or a 
                        subsidiary of any such savings association, or 
                        a savings and loan holding company; and'';
                  (C) in subparagraph (C)--
                          (i) in clause (ii), by striking ``(i) or 
                        (iii)'' and inserting ``(i), (iii), or (iv)'';
                          (ii) by striking ``and'' at the end of clause 
                        (iii);
                          (iii) by redesignating clause (iv) as clause 
                        (v); and
                          (iv) by inserting the following new clause 
                        after clause (iii):
                          ``(iv) the Director of the Office of Thrift 
                        Supervision, in the case of a savings 
                        association (as defined in section 3(b) of the 
                        Federal Deposit Insurance Act (12 U.S.C. 
                        1813(b))) the deposits of which are insured by 
                        the Federal Deposit Insurance Corporation, a 
                        savings and loan holding company, or a 
                        subsidiary of a savings and loan holding 
                        company when the appropriate regulatory agency 
                        for such clearing agency is not the Commission; 
                        and'';
                  (D) in subparagraph (D)--
                          (i) by striking ``and'' at the end of clause 
                        (ii);
                          (ii) by redesignating clause (iii) as clause 
                        (iv); and
                          (iii) by inserting the following new clause 
                        after clause (ii):
                          ``(iii) the Director of the Office of Thrift 
                        Supervision, in the case of a savings 
                        association (as defined in section 3(b) of the 
                        Federal Deposit Insurance Act (12 U.S.C. 
                        1813(b))) the deposits of which are insured by 
                        the Federal Deposit Insurance Corporation; 
                        and'';
                  (E) in subparagraph (F)--
                          (i) by redesignating clauses (ii), (iii), and 
                        (iv) as clauses (iii), (iv), and (v), 
                        respectively; and
                          (ii) by inserting the following new clause 
                        after clause (i):
                          ``(ii) the Director of the Office of Thrift 
                        Supervision, in the case of a savings 
                        association (as defined in section 3(b) of the 
                        Federal Deposit Insurance Act (12 U.S.C. 
                        1813(b))) the deposits of which are insured by 
                        the Federal Deposit Insurance Corporation; 
                        and'';
                  (F) by moving subparagraph (H) and inserting such 
                subparagraph after subparagraph (G); and
                  (G) by adding at the end the following new sentence: 
                ``As used in this paragraph, the term `savings and loan 
                holding company' has the meaning given it in section 
                10(a) of the Home Owners' Loan Act (12 U.S.C. 
                1467a(a)).''.
  (b) Investment Advisers Act of 1940.--
          (1) Definition of bank.--Section 202(a)(2) of the Investment 
        Advisers Act of 1940 (15 U.S.C. 80b-2(a)(2)) is amended--
                  (A) in subparagraph (A) by inserting ``or a Federal 
                savings association, as defined in section 2(5) of the 
                Home Owners' Loan Act'' after ``a banking institution 
                organized under the laws of the United States''; and
                  (B) in subparagraph (C)--
                          (i) by inserting ``, savings association as 
                        defined in section 2(4) of the Home Owners' 
                        Loan Act,'' after ``banking institution''; and
                          (ii) by inserting ``or savings associations'' 
                        after ``having supervision over banks''.
          (2) Conforming amendments.--Subsections (a)(1)(A)(i), 
        (a)(1)(B), (a)(2), and (b) of section 210A of such Act (15 
        U.S.C. 80b-10a), as added by section 220 of the Gramm-Leach-
        Bliley Act, are each amended by striking ``bank holding 
        company'' each place it occurs and inserting ``bank holding 
        company or savings and loan holding company''.
  (c) Conforming Amendment to the Investment Company Act of 1940.--
Section 10(c) of the Investment Company Act of 1940 (15 U.S.C. 80a-
10(c)), as amended by section 213(c) of the Gramm-Leach-Bliley Act, is 
amended by inserting after ``1956)'' the following: ``or any one 
savings and loan holding company (together with its affiliates and 
subsidiaries) (as such terms are defined in section 10 of the Home 
Owners' Loan Act)''.

SEC. 202. INVESTMENTS BY FEDERAL SAVINGS ASSOCIATIONS AUTHORIZED TO 
                    PROMOTE THE PUBLIC WELFARE.

  (a) In General.--Section 5(c)(3) of the Home Owners' Loan Act (12 
U.S.C. 1464(c)) is amended by adding at the end the following new 
subparagraph:
                  ``(D) Direct investments to promote the public 
                welfare.--
                          ``(i) In general.--A Federal savings 
                        association may make investments designed 
                        primarily to promote the public welfare, 
                        including the welfare of low- and moderate-
                        income communities or families through the 
                        provision of housing, services, and jobs.
                          ``(ii) Direct investments or acquisition of 
                        interest in other companies.--Investments under 
                        clause (i) may be made directly or by 
                        purchasing interests in an entity primarily 
                        engaged in making such investments.
                          ``(iii) Prohibition on unlimited liability.--
                        No investment may be made under this 
                        subparagraph which would subject a Federal 
                        savings association to unlimited liability to 
                        any person.
                          ``(iv) Single investment limitation to be 
                        established by director.--Subject to clauses 
                        (v) and (vi), the Director shall establish, by 
                        order or regulation, limits on--
                                  ``(I) the amount any savings 
                                association may invest in any 1 
                                project; and
                                  ``(II) the aggregate amount of 
                                investment of any savings association 
                                under this subparagraph.
                          ``(v) Flexible aggregate investment 
                        limitation.--The aggregate amount of 
                        investments of any savings association under 
                        this subparagraph may not exceed an amount 
                        equal to the sum of 5 percent of the savings 
                        association's capital stock actually paid in 
                        and unimpaired and 5 percent of the savings 
                        association's unimpaired surplus, unless--
                                  ``(I) the Director determines that 
                                the savings association is adequately 
                                capitalized; and
                                  ``(II) the Director determines, by 
                                order, that the aggregate amount of 
                                investments in a higher amount than the 
                                limit under this clause will pose no 
                                significant risk to the affected 
                                deposit insurance fund.
                          ``(vi) Maximum aggregate investment 
                        limitation.--Notwithstanding clause (v), the 
                        aggregate amount of investments of any savings 
                        association under this subparagraph may not 
                        exceed an amount equal to the sum of 10 percent 
                        of the savings association's capital stock 
                        actually paid in and unimpaired and 10 percent 
                        of the savings association's unimpaired 
                        surplus.
                          ``(vii) Investments not subject to other 
                        limitation on quality of investments.--No 
                        obligation a Federal savings association 
                        acquires or retains under this subparagraph 
                        shall be taken into account for purposes of the 
                        limitation contained in section 28(d) of the 
                        Federal Deposit Insurance Act on the 
                        acquisition and retention of any corporate debt 
                        security not of investment grade.''.
  (b) Technical and Conforming Amendment.--Section 5(c)(3)(A) of the 
Home Owners' Loan Act (12 U.S.C. 1464(c)(3)(A)) is amended to read as 
follows:
                  ``(A) [Repealed.]''.

SEC. 203. MERGERS AND CONSOLIDATIONS OF FEDERAL SAVINGS ASSOCIATIONS 
                    WITH NONDEPOSITORY INSTITUTION AFFILIATES.

  Section 5(d)(3) of the Home Owners' Loan Act (12 U.S.C. 1464(d)(3)) 
is amended--
          (1) by redesignating subparagraph (B) as subparagraph (C); 
        and
          (2) by inserting after subparagraph (A) the following new 
        subparagraph:
                  ``(B) Mergers and consolidations with nondepository 
                institution affiliates.--
                          ``(i) In general.--Upon the approval of the 
                        Director, a Federal savings association may 
                        merge with any nondepository institution 
                        affiliate of the savings association.
                          ``(ii) Rule of construction.--No provision of 
                        clause (i) shall be construed as--
                                  ``(I) affecting the applicability of 
                                section 18(c) of the Federal Deposit 
                                Insurance Act; or
                                  ``(II) granting a Federal savings 
                                association any power or any authority 
                                to engage in any activity that is not 
                                authorized for a Federal savings 
                                association under any other provision 
                                of this Act or any other provision of 
                                law.''.

SEC. 204. REPEAL OF STATUTORY DIVIDEND NOTICE REQUIREMENT FOR SAVINGS 
                    ASSOCIATION SUBSIDIARIES OF SAVINGS AND LOAN 
                    HOLDING COMPANIES.

  Section 10(f) of the Home Owners' Loan Act (12 U.S.C. 1467a(f)) is 
amended to read as follows:
  ``(f) Declaration of Dividend.--The Director may--
          ``(1) require a savings association that is a subsidiary of a 
        savings and loan holding company to give prior notice to the 
        Director of the intent of the savings association to pay a 
        dividend on its guaranty, permanent, or other nonwithdrawable 
        stock; and
          ``(2) establish conditions on the payment of dividends by 
        such a savings association.''.

SEC. 205. MODERNIZING STATUTORY AUTHORITY FOR TRUST OWNERSHIP OF 
                    SAVINGS ASSOCIATIONS.

  (a) In General.--Section 10(a)(1)(C) of the Home Owners' Loan Act (12 
U.S.C. 1467a(a)(1)(C)) is amended--
          (1) by striking ``trust,'' and inserting ``business trust,''; 
        and
          (2) by inserting ``or any other trust unless by its terms it 
        must terminate within 25 years or not later than 21 years and 
        10 months after the death of individuals living on the 
        effective date of the trust,'' after ``or similar 
        organization,''.
  (b) Technical and Conforming Amendment.--Section 10(a)(3) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(a)(3)) is amended--
          (1) by striking ``does not include--'' and all that follows 
        through ``any company by virtue'' where such term appears in 
        subparagraph (A) and inserting ``does not include any company 
        by virtue'';
          (2) by striking ``; and'' at the end of subparagraph (A) and 
        inserting a period; and
          (3) by striking subparagraph (B).

SEC. 206. REPEAL OF OVERLAPPING RULES GOVERNING PURCHASED MORTGAGE 
                    SERVICING RIGHTS.

  Section 5(t) of the Home Owners' Loan Act (12 U.S.C. 1464(t)) is 
amended--
          (1) by striking paragraph (4) and inserting the following new 
        paragraph:
          ``(4) [Repealed.]''; and
          (2) in paragraph (9)(A), by striking ``intangible assets, 
        plus'' and all that follows through the period at the end and 
        inserting ``intangible assets.''.

SEC. 207. RESTATEMENT OF AUTHORITY FOR FEDERAL SAVINGS ASSOCIATIONS TO 
                    INVEST IN SMALL BUSINESS INVESTMENT COMPANIES.

  Subparagraph (D) of section 5(c)(4) of the Home Owners' Loan Act (12 
U.S.C. 1464(c)(4)) is amended to read as follows:
                  ``(D) Small business investment companies.--Any 
                Federal savings association may invest in 1 or more 
                small business investment companies, or in any entity 
                established to invest solely in small business 
                investment companies formed under the Small Business 
                Investment Act of 1958, except that the total amount of 
                investments under this subparagraph may not at any time 
                exceed the amount equal to 5 percent of capital and 
                surplus of the savings association.''.

SEC. 208. REMOVAL OF LIMITATION ON INVESTMENTS IN AUTO LOANS.

  (a) In General.--Section 5(c)(1) of the Home Owners' Loan Act (12 
U.S.C. 1464(c)(1)) is amended by adding at the end the following new 
subparagraph:
                  ``(V) Auto loans.--Loans and leases for motor 
                vehicles acquired for personal, family, or household 
                purposes.''.
  (b) Technical and Conforming Amendment relating to Qualified Thrift 
Investments.--Section 10(m)(4)(C)(ii) of the Home Owners' Loan Act (12 
U.S.C. 1467a(m)(4)(C)(ii)) is amended by adding at the end the 
following new subclause:
                                  ``(VIII) Loans and leases for motor 
                                vehicles acquired for personal, family, 
                                or household purposes.''.

SEC. 209. SELLING AND OFFERING OF DEPOSIT PRODUCTS.

          Section 15(h) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78o(h)) is amended by adding at the end the following 
        new paragraph:
          ``(4) Selling and offering of deposit products.--No law, 
        rule, regulation, or order, or other administrative action of 
        any State or political subdivision thereof shall directly or 
        indirectly require any individual who is an agent of 1 Federal 
        savings association (as such term is defined in section 2(5) of 
        the Home Owners' Loan Act (12 U.S.C. 1462(5)) in selling or 
        offering deposit (as such term is defined in section 3 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1813(l)) products 
        issued by such association to qualify or register as a broker, 
        dealer, associated person of a broker, or associated person of 
        a dealer, or to qualify or register in any other similar status 
        or capacity, if the individual does not--
                  ``(A) accept deposits or make withdrawals on behalf 
                of any customer of the association;
                  ``(B) offer or sell a deposit product as an agent for 
                another entity that is not subject to supervision and 
                examination by a Federal banking agency (as defined in 
                section 3(z) of the Federal Deposit Insurance Act (12 
                U.S.C. 1813(z)), the National Credit Union 
                Administration, or any officer, agency, or other entity 
                of any State which has primary regulatory authority 
                over State banks, State savings associations, or State 
                credit unions;
                  ``(C) offer or sell a deposit product that is not an 
                insured deposit (as defined in section 3(m) of the 
                Federal Deposit Insurance Act (12 U.S.C. 1813(m)));
                  ``(D) offer or sell a deposit product which contains 
                a feature that makes it callable at the option of such 
                Federal savings association; or
                  ``(E) create a secondary market with respect to a 
                deposit product or otherwise add enhancements or 
                features to such product independent of those offered 
                by the association.''.

SEC. 210. FUNERAL- AND CEMETERY-RELATED FIDUCIARY SERVICES.

  Section 5(n) of the Home Owners' Loan Act (12 U.S.C. 1464(n)) is 
amended by adding at the end the following new paragraph:
          ``(11) Funeral- and cemetery-related fiduciary services.--
                  ``(A) In general.--A funeral director or cemetery 
                operator, when acting in such capacity, (or any other 
                person in connection with a contract or other agreement 
                with a funeral director or cemetery operator) may 
                engage any Federal savings association, regardless of 
                where the association is located, to act in any 
                fiduciary capacity in which the savings association has 
                the right to act in accordance with this section, 
                including holding funds deposited in trust or escrow by 
                the funeral director or cemetery operator (or by such 
                other party), and the savings association may act in 
                such fiduciary capacity on behalf of the funeral 
                director or cemetery operator (or such other person).
                  ``(B) Definitions.--For purposes of this paragraph, 
                the following definitions shall apply:
                          ``(i) Cemetery.--The term `cemetery' means 
                        any land or structure used, or intended to be 
                        used, for the interment of human remains in any 
                        form.
                          ``(ii) Cemetery operator.--The term `cemetery 
                        operator' means any person who contracts or 
                        accepts payment for merchandise, endowment, or 
                        perpetual care services in connection with a 
                        cemetery.
                          ``(iii) Funeral director.--The term `funeral 
                        director' means any person who contracts or 
                        accepts payment to provide or arrange--
                                  ``(I) services for the final 
                                disposition of human remains; or
                                  ``(II) funeral services, property, or 
                                merchandise (including cemetery 
                                services, property, or merchandise).''.

SEC. 211. REPEAL OF QUALIFIED THRIFT LENDER REQUIREMENT WITH RESPECT TO 
                    OUT-OF-STATE BRANCHES.

  Section 5(r)(1) of the Home Owners' Loan Act (12 U.S.C. 1464(r)(1)) 
is amended by striking the last sentence.

SEC. 212. SMALL BUSINESS AND OTHER COMMERCIAL LOANS.

  (a) Elimination of Lending Limit on Small Business Loans.--Section 
5(c)(1) of the Home Owners' Loan Act (12 U.S.C. 1464(c)(1)) is amended 
by inserting after subparagraph (V) (as added by section 208 of this 
title) the following new subparagraph:
                  ``(W) Small business loans.--Small business loans, as 
                defined in regulations which the Director shall 
                prescribe.''.
  (b) Increase in Lending Limit on Other Business Loans.--Section 
5(c)(2)(A) of the Home Owners' Loan Act (12 U.S.C. 1464(c)(2)(A)) is 
amended by striking ``, and amounts in excess of 10 percent'' and all 
that follows through ``by the Director''.

SEC. 213. CLARIFYING CITIZENSHIP OF FEDERAL SAVINGS ASSOCIATIONS FOR 
                    FEDERAL COURT JURISDICTION.

  Section 5 of the Home Owners' Loan Act (12 U.S.C. 1464) is amended by 
adding at the end the following new subsection:
  ``(x) Home State Citizenship.--In determining whether a Federal court 
has diversity jurisdiction over a case in which a Federal savings 
association is a party, the Federal savings association shall be 
considered to be a citizen only of the State in which such savings 
association has its main office.''.

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

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

                   TITLE III--CREDIT UNION PROVISIONS

SEC. 301. PRIVATELY INSURED CREDIT UNIONS AUTHORIZED TO BECOME MEMBERS 
                    OF A FEDERAL HOME LOAN BANK.

  (a) In General.--Section 4(a) of the Federal Home Loan Bank Act (12 
U.S.C. 1424(a)) is amended by adding at the end the following new 
paragraph:
          ``(5) Certain privately insured credit unions.--
                  ``(A) In general.--A credit union which has been 
                determined, in accordance with section 43(e)(1) of the 
                Federal Deposit Insurance Act and subject to the 
                requirements of subparagraph (B), to meet all 
                eligibility requirements for Federal deposit insurance 
                shall be treated as an insured depository institution 
                for purposes of determining the eligibility of such 
                credit union for membership in a Federal home loan bank 
                under paragraphs (1), (2), and (3).
                  ``(B) Certification by appropriate supervisor.--
                          ``(i) In general.--For purposes of this 
                        paragraph and subject to clause (ii), a credit 
                        union which lacks Federal deposit insurance and 
                        which has applied for membership in a Federal 
                        home loan bank may be treated as meeting all 
                        the eligibility requirements for Federal 
                        deposit insurance only if the appropriate 
                        supervisor of the State in which the credit 
                        union is chartered has determined that the 
                        credit union meets all the eligibility 
                        requirements for Federal deposit insurance as 
                        of the date of the application for membership.
                          ``(ii) Certification deemed valid.--If, in 
                        the case of any credit union to which clause 
                        (i) applies, the appropriate supervisor of the 
                        State in which such credit union is chartered 
                        fails to make a determination pursuant to such 
                        clause by the end of the 6-month period 
                        beginning on the date of the application, the 
                        credit union shall be deemed to have met the 
                        requirements of clause (i).
                  ``(C) Security interests of federal home loan bank 
                not avoidable.--Notwithstanding any provision of State 
                law authorizing a conservator or liquidating agent of a 
                credit union to repudiate contracts, no such provision 
                shall apply with respect to--
                          ``(i) any extension of credit from any 
                        Federal home loan bank to any credit union 
                        which is a member of any such bank pursuant to 
                        this paragraph; or
                          ``(ii) any security interest in the assets of 
                        such credit union securing any such extension 
                        of credit.''.
  (b) Copies of Audits of Private Insurers of Certain Depository 
Institutions Required To Be Provided to Supervisory Agencies.--Section 
43(a)(2) of the Federal Deposit Insurance Act (12 U.S.C. 1831t(a)(2)) 
is amended--
          (1) by striking ``and'' at the end of subparagraph (A)(i);
          (2) by striking the period at the end of clause (ii) of 
        subparagraph (A) and inserting a semicolon;
          (3) by inserting the following new clauses at the end of 
        subparagraph (A):
                          ``(iii) in the case of depository 
                        institutions described in subsection (f)(2)(A) 
                        the deposits of which are insured by the 
                        private insurer, the National Credit Union 
                        Administration, not later than 7 days after 
                        that audit is completed; and
                          ``(iv) in the case of depository institutions 
                        described in subsection (f)(2)(A) the deposits 
                        of which are insured by the private insurer 
                        which are members of a Federal home loan bank, 
                        the Federal Housing Finance Board, not later 
                        than 7 days after that audit is completed.''; 
                        and
          (4) by adding at the end the following new subparagraph:
                  ``(C) Consultation.--The appropriate supervisory 
                agency of each State in which a private deposit insurer 
                insures deposits in an institution described in 
                subsection (f)(2)(A) which--
                          ``(i) lacks Federal deposit insurance; and
                          ``(ii) has become a member of a Federal home 
                        loan bank, shall provide the National Credit 
                        Union Administration, upon request, with the 
                        results of any examination and reports related 
                        thereto concerning the private deposit insurer 
                        to which such agency may have in its 
                        possession.''.

SEC. 302. LEASES OF LAND ON FEDERAL FACILITIES FOR CREDIT UNIONS.

  (a) In General.--Section 124 of the Federal Credit Union Act (12 
U.S.C. 1770) is amended--
          (1) by striking ``Upon application by any credit union'' and 
        inserting ``Notwithstanding any other provision of law, upon 
        application by any credit union'';
          (2) by inserting ``on lands reserved for the use of, and 
        under the exclusive or concurrent jurisdiction of, the United 
        States or'' after ``officer or agency of the United States 
        charged with the allotment of space'';
          (3) by inserting ``lease land or'' after ``such officer or 
        agency may in his or its discretion''; and
          (4) by inserting ``or the facility built on the lease land'' 
        after ``credit union to be served by the allotment of space''.
  (b) Clerical Amendment.--The heading for section 124 is amended by 
inserting ``or federal land'' after ``buildings''.

SEC. 303. INVESTMENTS IN SECURITIES BY FEDERAL CREDIT UNIONS.

  Section 107 of the Federal Credit Union Act (12 U.S.C. 1757) is 
amended--
          (1) in the matter preceding paragraph (1) by striking ``A 
        Federal credit union'' and inserting ``(a) In General.--Any 
        Federal credit union''; and
          (2) by adding at the end the following new subsection:
  ``(b) Investment for the Credit Union's Own Account.--
          ``(1) In general.--A Federal credit union may purchase and 
        hold for its own account such investment securities of 
        investment grade as the Board may authorize by regulation, 
        subject to such limitations and restrictions as the Board may 
        prescribe in the regulations.
          ``(2) Percentage limitations.--
                  ``(A) Single obligor.--In no event may the total 
                amount of investment securities of any single obligor 
                or maker held by a Federal credit union for the credit 
                union's own account exceed at any time an amount equal 
                to 10 percent of the net worth of the credit union.
                  ``(B) Aggregate investments.--In no event may the 
                aggregate amount of investment securities held by a 
                Federal credit union for the credit union's own account 
                exceed at any time an amount equal to 10 percent of the 
                assets of the credit union.
          ``(3) Investment security defined.--
                  ``(A) In general.--For purposes of this subsection, 
                the term `investment security' means marketable 
                obligations evidencing the indebtedness of any person 
                in the form of bonds, notes, or debentures and other 
                instruments commonly referred to as investment 
                securities.
                  ``(B) Further definition by board.--The Board may 
                further define the term `investment security'.
          ``(4) Investment grade defined.--The term `investment grade' 
        means with respect to an investment security purchased by a 
        credit union for its own account, an investment security that 
        at the time of such purchase is rated in one of the 4 highest 
        rating categories by at least 1 nationally recognized 
        statistical rating organization.
          ``(5) Clarification of prohibition on stock ownership.--No 
        provision of this subsection shall be construed as authorizing 
        a Federal credit union to purchase shares of stock of any 
        corporation for the credit union's own account, except as 
        otherwise permitted by law.''.

SEC. 304. INCREASE IN GENERAL 12-YEAR LIMITATION OF TERM OF FEDERAL 
                    CREDIT UNION LOANS TO 15 YEARS.

  Section 107(a)(5) of the Federal Credit Union Act (12 U.S.C. 1757(5)) 
(as so designated by section 303 of this title) is amended--
          (1) in the matter preceding subparagraph (A), by striking 
        ``to make loans, the maturities of which shall not exceed 
        twelve years except as otherwise provided herein'' and 
        inserting ``to make loans, the maturities of which shall not 
        exceed 15 years or any longer maturity as the Board may allow, 
        in regulations, except as otherwise provided in this Act'';
          (2) in subparagraph (A)--
                  (A) by striking clause (ii);
                  (B) by redesignating clauses (iii) through (x) as 
                clauses (ii) through (ix), respectively; and
                  (C) by inserting ``and'' after the semicolon at the 
                end of clause (viii) (as so redesignated).

SEC. 305. INCREASE IN 1 PERCENT INVESTMENT LIMIT IN CREDIT UNION 
                    SERVICE ORGANIZATIONS.

  Section 107(a)(7)(I) of the Federal Credit Union Act (12 U.S.C. 
1757(7)(I)) (as so designated by section 303 of this title) is amended 
by striking ``up to 1 per centum of the total paid'' and inserting ``up 
to 3 percent of the total paid''.

SEC. 306. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS TO NONPROFIT 
                    RELIGIOUS ORGANIZATIONS.

  Section 107A(a) of the Federal Credit Union Act (12 U.S.C. 1757a(a)) 
is amended by inserting ``, excluding loans made to nonprofit religious 
organizations,'' after ``total amount of such loans''.

SEC. 307. CHECK CASHING AND MONEY TRANSFER SERVICES OFFERED WITHIN THE 
                    FIELD OF MEMBERSHIP.

  Paragraph (12) of section 107(a) of the Federal Credit Union Act (12 
U.S.C. 1757(12)) (as so designated by section 303 of this title) is 
amended to read as follows:
          ``(12) in accordance with regulations prescribed by the 
        Board--
                  ``(A) to sell, to persons in the field of membership, 
                negotiable checks (including travelers checks), money 
                orders, and other similar money transfer instruments 
                (including electronic fund transfers); and
                  ``(B) to cash checks and money orders and receive 
                electronic fund transfers for persons in the field of 
                membership for a fee;''.

SEC. 308. VOLUNTARY MERGERS INVOLVING MULTIPLE COMMON-BOND CREDIT 
                    UNIONS.

  Section 109(d)(2) of the Federal Credit Union Act (12 U.S.C. 
1759(d)(2)) is amended--
          (1) by striking ``or'' at the end of clause (ii) of 
        subparagraph (B);
          (2) by striking the period at the end of subparagraph (C) and 
        inserting ``; or''; and
          (3) by adding at the end the following new subparagraph:
                  ``(D) a merger involving any such Federal credit 
                union approved by the Board on or after August 7, 
                1998.''.

SEC. 309. CONVERSIONS INVOLVING COMMON-BOND CREDIT UNIONS.

  Section 109(g) of the Federal Credit Union Act (12 U.S.C. 1759(g)) is 
amended by inserting after paragraph (2) the following new paragraph:
          ``(3) Criteria for continued membership of certain member 
        groups in community charter conversions.--In the case of a 
        voluntary conversion of a common-bond credit union described in 
        paragraph (1) or (2) of subsection (b) into a community credit 
        union described in subsection (b)(3), the Board shall 
        prescribe, by regulation, the criteria under which the Board 
        may determine that a member group or other portion of a credit 
        union's existing membership, that is located outside the well-
        defined local community, neighborhood, or rural district that 
        shall constitute the community charter, can be satisfactorily 
        served by the credit union and remain within the community 
        credit union's field of membership.''.

SEC. 310. CREDIT UNION GOVERNANCE.

  (a) Expulsion of Members For Just Cause.--Subsection (b) of section 
118 of the Federal Credit Union Act (12 U.S.C. 1764(b)) is amended to 
read as follows:
  ``(b) Policy and Actions of Boards of Directors of Federal Credit 
Unions.--
          ``(1) Expulsion of members for nonparticipation or for just 
        cause.--The board of directors of a Federal credit union may, 
        by majority vote of a quorum of directors, adopt and enforce a 
        policy with respect to expulsion from membership, by a majority 
        vote of such board of directors, based on just cause, including 
        disruption of credit union operations, or on nonparticipation 
        by a member in the affairs of the credit union.
          ``(2) Written notice of policy to members.--If a policy 
        described in paragraph (1) is adopted, written notice of the 
        policy as adopted and the effective date of such policy shall 
        be provided to--
                  ``(A) each existing member of the credit union not 
                less than 30 days prior to the effective date of such 
                policy; and
                  ``(B) each new member prior to or upon applying for 
                membership.''.
  (b) Term Limits Authorized for Board Members of Federal Credit 
Unions.--Section 111(a) of the Federal Credit Union Act (12 U.S.C. 
1761(a)) is amended by adding at the end the following new sentence: 
``The bylaws of a Federal credit union may limit the number of 
consecutive terms any person may serve on the board of directors of 
such credit union.''.
  (c) Reimbursement For Lost Wages Due to Service on Credit Union Board 
Not Treated as Compensation.--Section 111(c) of the Federal Credit 
Union Act (12 U.S.C. 1761(c)) is amended by inserting ``, including 
lost wages,'' after ``the reimbursement of reasonable expenses''.

SEC. 311. PROVIDING THE NATIONAL CREDIT UNION ADMINISTRATION WITH 
                    GREATER FLEXIBILITY IN RESPONDING TO MARKET 
                    CONDITIONS.

  Section 107(a)(5)(A)(vi)(I) of the Federal Credit Union Act (12 
U.S.C. 1757(5)(A)(vi)(I)) (as so designated by section 303 of this 
title) is amended by striking ``six-month period and that prevailing 
interest rate levels'' and inserting ``6-month period or that 
prevailing interest rate levels''.

SEC. 312. EXEMPTION FROM PRE-MERGER NOTIFICATION REQUIREMENT OF THE 
                    CLAYTON ACT.

  Section 7A(c)(7) of the Clayton Act (15 U.S.C. 18a(c)(7)) is amended 
by inserting ``section 205(b)(3) of the Federal Credit Union Act (12 
U.S.C. 1785(b)(3)),'' before ``or section 3''.

SEC. 313. TREATMENT OF CREDIT UNIONS AS DEPOSITORY INSTITUTIONS UNDER 
                    SECURITIES LAWS.

  (a) Definition of Bank Under the Securities Exchange Act of 1934.--
Section 3(a)(6) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(6)) (as amended by section 201(a)(1) of this Act) is amended--
          (1) by striking ``this title, and (D) a receiver'' and 
        inserting ``this title, (D) an insured credit union (as defined 
        in section 101(7) of the Federal Credit Union Act) but only for 
        purposes of paragraphs (4) and (5) of this subsection and only 
        for activities otherwise authorized by applicable laws to which 
        such credit unions are subject, and (E) a receiver''; and
          (2) in subparagraph (E) (as so redesignated by paragraph (1) 
        of this subsection) by striking ``(A), (B), or (C)'' and 
        inserting ``(A), (B), (C), or (D)''.
  (b) Definition of Bank Under the Investment Advisers Act of 1940.--
Section 202(a)(2) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-2(a)(2)) (as amended by section 201(b)(1) of this Act) is amended--
          (1) by striking ``this title, and (D) a receiver'' and 
        inserting ``this title, (D) an insured credit union (as defined 
        in section 101(7) of the Federal Credit Union Act) but only for 
        activities otherwise authorized by applicable laws to which 
        such credit unions are subject, and (E) a receiver''; and
          (2) in subparagraph (E) (as so redesignated by paragraph (1) 
        of this subsection) by striking ``(A), (B), or (C)'' and 
        inserting ``(A), (B), (C), or (D)''.
  (c) Definition of Appropriate Federal Banking Agency.--Section 
210A(c) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-10a(c)) 
is amended by inserting ``and includes the National Credit Union 
Administration Board, in the case of an insured credit union (as 
defined in section 101(7) of the Federal Credit Union Act)'' before the 
period at the end.

              TITLE IV--DEPOSITORY INSTITUTION PROVISIONS

SEC. 401. EASING RESTRICTIONS ON INTERSTATE BRANCHING AND MERGERS.

  (a) De Novo Interstate Branches of National Banks.--
          (1) In general.--Section 5155(g)(1) of the Revised Statutes 
        of the United States (12 U.S.C. 36(g)(1)) is amended by 
        striking ``maintain a branch if--'' and all that follows 
        through the end of subparagraph (B) and inserting ``maintain a 
        branch.''.
          (2) Clerical amendment.--The heading for subsection (g) of 
        section 5155 of the Revised Statutes of the United States is 
        amended by striking ``State `Opt-In' Election to Permit''.
  (b) De Novo Interstate Branches of State Nonmember Banks.--
          (1) In general.--Section 18(d)(4)(A) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1828(d)(4)(A)) is amended by striking 
        ``maintain a branch if--'' and all that follows through the end 
        of clause (ii) and inserting ``maintain a branch.''.
          (2) Clerical amendment.--The heading for paragraph (4) of 
        section 18(d) of the Federal Deposit Insurance Act is amended 
        by striking ``State `opt-in' election to permit interstate'' 
        and inserting ``Interstate''.
  (c) De Novo Interstate Branches of State Member Banks.--The 3rd 
undesignated paragraph of section 9 of the Federal Reserve Act (12 
U.S.C. 321) is amended by adding at the end the following new 
sentences: ``A State member bank may establish and operate a de novo 
branch in a host State (as such terms are defined in section 18(d) of 
the Federal Deposit Insurance Act) on the same terms and conditions and 
subject to the same limitations and restrictions as are applicable to 
the establishment of a de novo branch of a national bank in a host 
State under section 5155(g) of the Revised Statutes of the United 
States. Such section 5155(g) shall be applied for purposes of the 
preceding sentence by substituting `Board of Governors of the Federal 
Reserve System' for `Comptroller of the Currency' and `State member 
bank' for `national bank'.''.
  (d) Interstate Merger of Banks.--
          (1) Merger of insured bank with another depository 
        institution or trust company.--Section 44(a)(1) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1831u(a)(1)) is amended--
                  (A) by striking ``Beginning on June 1, 1997, the'' 
                and inserting ``The''; and
                  (B) by striking ``insured banks with different home 
                States'' and inserting ``an insured bank and another 
                insured depository institution or trust company with a 
                different home State than the resulting insured bank''.
          (2) National bank trust company merger with other trust 
        company.--Subsection (b) of section 4 of the National Bank 
        Consolidation and Merger Act (12 U.S.C. 215a-1(b)) is amended 
        to read as follows:
  ``(b) Merger of National Bank Trust Company With Another Trust 
Company.--A national bank that is a trust company may engage in a 
consolidation or merger under this Act with any trust company with a 
different home State, under the same terms and conditions that would 
apply if the trust companies were located within the same State.''.
  (e) Interstate Fiduciary Activity.--Section 18(d) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(d)) is amended by adding at the 
end the following new paragraph:
          ``(5) Interstate fiduciary activity.--
                  ``(A) Authority of state bank supervisor.--The State 
                bank supervisor of a State bank may approve an 
                application by the State bank, when not in 
                contravention of home State or host State law, to act 
                as trustee, executor, administrator, registrar of 
                stocks and bonds, guardian of estates, assignee, 
                receiver, committee of estates of lunatics, or in any 
                other fiduciary capacity in a host State in which State 
                banks or other corporations which come into competition 
                with national banks are permitted to act under the laws 
                of such host State.
                  ``(B) Noncontravention of host state law.--Whenever 
                the laws of a host State authorize or permit the 
                exercise of any or all of the foregoing powers by State 
                banks or other corporations which compete with national 
                banks, the granting to and the exercise of such powers 
                by a State bank as provided in this paragraph shall not 
                be deemed to be in contravention of host State law 
                within the meaning of this paragraph.
                  ``(C) State bank includes trust companies.--For 
                purposes of this paragraph, the term `State bank' 
                includes any State-chartered trust company (as defined 
                in section 44(g)).
                  ``(D) Other definitions.--For purposes of this 
                paragraph, the term `home State' and `host State' have 
                the meanings given such terms in section 44.''.
  (f) Technical and Conforming Amendments.--
          (1) Section 44 of the Federal Deposit Insurance Act (12 
        U.S.C. 1831u) is amended--
                  (A) in subsection (a)--
                          (i) by striking paragraph (4) and inserting 
                        the following new paragraph:
          ``(4) Treatment of branches in connection with certain 
        interstate merger transactions.--In the case of an interstate 
        merger transaction which involves the acquisition of a branch 
        of an insured depository institution or trust company without 
        the acquisition of the insured depository institution or trust 
        company, the branch shall be treated, for purposes of this 
        section, as an insured depository institution or trust company 
        the home State of which is the State in which the branch is 
        located.''; and
                          (ii) by striking paragraphs (5) and (6);
                  (B) in subsection (b)--
                          (i) by striking ``bank'' each place such term 
                        appears in paragraph (2)(B)(i) and inserting 
                        ``insured depository institution'';
                          (ii) by striking ``banks'' where such term 
                        appears in paragraph (2)(E) and inserting 
                        ``insured depository institutions or trust 
                        companies'';
                          (iii) by striking ``bank affiliate'' each 
                        place such term appears in that portion of 
                        paragraph (3) that precedes subparagraph (A) 
                        and inserting ``insured depository institution 
                        affiliate'';
                          (iv) by striking ``any bank'' where such term 
                        appears in paragraph (3)(B) and inserting ``any 
                        insured depository institution'';
                          (v) by striking ``bank'' where such term 
                        appears in paragraph (4)(A) and inserting 
                        ``insured depository institution and trust 
                        company''; and
                          (vi) by striking ``all banks'' where such 
                        term appears in paragraph (5) and inserting 
                        ``all insured depository institutions and trust 
                        companies'';
                  (C) in subsection (d)(1), by striking ``any bank'' 
                and inserting ``any insured depository institution or 
                trust company'';
                  (D) in subsection (e)--
                          (i) by striking ``1 or more banks'' and 
                        inserting ``1 or more insured depository 
                        institutions''; and
                          (ii) by striking ``paragraph (2), (4), or 
                        (5)'' and inserting ``paragraph (2)'';
                  (E) by striking clauses (i) and (ii) of subsection 
                (g)(4)(A) and inserting the following new clauses:
                          ``(i) with respect to a national bank or 
                        Federal savings association, the State in which 
                        the main office of the bank or savings 
                        association is located; and
                          ``(ii) with respect to a State bank, State 
                        savings association, or State-chartered trust 
                        company, the State by which the bank, savings 
                        association, or trust company is chartered; 
                        and'';
                  (F) by striking paragraph (5) of subsection (g) and 
                inserting the following new paragraph:
          ``(5) Host state.--The term `host State' means--
                  ``(A) with respect to a bank, a State, other than the 
                home State of the bank, in which the bank maintains, or 
                seeks to establish and maintain, a branch; and
                  ``(B) with respect to a trust company and solely for 
                purposes of section 18(d)(5), a State, other than the 
                home State of the trust company, in which the trust 
                company acts, or seeks to act, in 1 or more fiduciary 
                capacities.'';
                  (G) in subsection (g)(10), by striking ``section 
                18(c)(2)'' and inserting ``paragraph (1) or (2) of 
                section 18(c), as appropriate,''; and
                  (H) in subsection (g), by adding at the end the 
                following new paragraph:
          ``(12) Trust company.--The term `trust company' means--
                  ``(A) any national bank;
                  ``(B) any savings association; and
                  ``(C) any bank, banking association, trust company, 
                savings bank, or other banking institution which is 
                incorporated under the laws of any State,
        that is authorized to act in 1 or more fiduciary capacities but 
        is not engaged in the business of receiving deposits other than 
        trust funds (as defined in section 3(p)).''.
          (2) Section 3(d) of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1842(d)) is amended--
                  (A) in paragraph (1)--
                          (i) by striking subparagraphs (B) and (C); 
                        and
                          (ii) by redesignating subparagraph (D) as 
                        subparagraph (B); and
                  (B) in paragraph (5), by striking ``subparagraph (B) 
                or (D)'' and inserting ``subparagraph (B)''.
          (3) Subsection (c) of section 4 of the National Bank 
        Consolidation and Merger Act (12 U.S.C. 215a-1(c)) is amended 
        to read as follows:
  ``(c) Definitions.--For purposes of this section, the terms `home 
State', `out-of-State bank', and `trust company' each have the same 
meaning as in section 44(g) of the Federal Deposit Insurance Act.''.
  (g) Clerical Amendments.--
          (1) The heading for section 44(b)(2)(E) of the Federal 
        Deposit Insurance Act (12 U.S.C. 1831u(b)(2)(E)) is amended by 
        striking ``banks'' and inserting ``insured depository 
        institutions and trust companies''.
          (2) The heading for section 44(e) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1831u(e)) is amended by striking 
        ``Banks'' and inserting ``Insured Depository Institutions''.

SEC. 402. STATUTE OF LIMITATIONS FOR JUDICIAL REVIEW OF APPOINTMENT OF 
                    A RECEIVER FOR DEPOSITORY INSTITUTIONS.

  (a) National Banks.--Section 2 of the National Bank Receivership Act 
(12 U.S.C. 191) is amended--
          (1) by striking ``Section 2. The Comptroller of the 
        Currency'' and inserting the following:

``SEC. 2. APPOINTMENT OF RECEIVER FOR A NATIONAL BANK.

  ``(a) In General.--The Comptroller of the Currency''; and
          (2) by adding at the end the following new subsection:
  ``(b) Judicial Review.--If the Comptroller of the Currency appoints a 
receiver under subsection (a), the national bank may, within 30 days 
thereafter, bring an action in the United States district court for the 
judicial district in which the home office of such bank is located, or 
in the United States District Court for the District of Columbia, for 
an order requiring the Comptroller of the Currency to remove the 
receiver, and the court shall, upon the merits, dismiss such action or 
direct the Comptroller of the Currency to remove the receiver.''.
  (b) Insured Depository Institutions.--Section 11(c)(7) of the Federal 
Deposit Insurance Act (12 U.S.C. 1821(c)(7)) is amended to read as 
follows:
          ``(7) Judicial review.--If the Corporation is appointed 
        (including the appointment of the Corporation as receiver by 
        the Board of Directors) as conservator or receiver of a 
        depository institution under paragraph (4), (9), or (10), the 
        depository institution may, within 30 days thereafter, bring an 
        action in the United States district court for the judicial 
        district in which the home office of such depository 
        institution is located, or in the United States District Court 
        for the District of Columbia, for an order requiring the 
        Corporation to be removed as the conservator or receiver 
        (regardless of how such appointment was made), and the court 
        shall, upon the merits, dismiss such action or direct the 
        Corporation to be removed as the conservator or receiver.''.
  (c) Expansion of Period for Challenging the Appointment of a 
Liquidating Agent.--Subparagraph (B) of section 207(a)(1) of the 
Federal Credit Union Act (12 U.S.C. 1787(a)(1)) is amended by striking 
``10 days'' and inserting ``30 days''.
  (d) Effective Date.--The amendments made by subsections (a), (b), and 
(c) shall apply with respect to conservators, receivers, or liquidating 
agents appointed on or after the date of the enactment of this Act.

SEC. 403. REPORTING REQUIREMENTS RELATING TO INSIDER LENDING.

  (a) Reporting Requirements Regarding Loans to Executive Officers of 
Member Banks.--Section 22(g) of the Federal Reserve Act (12 U.S.C. 
375a) is amended--
          (1) by striking paragraphs (6) and (9); and
          (2) by redesignating paragraphs (7), (8), and (10) as 
        paragraphs (6), (7), and (8), respectively.
  (b) Reporting Requirements Regarding Loans From Correspondent Banks 
to Executive Officers and Shareholders of Insured Banks.--Section 
106(b)(2) of the Bank Holding Company Act Amendments of 1970 (12 U.S.C. 
1972(2)) is amended--
          (1) by striking subparagraph (G); and
          (2) by redesignating subparagraphs (H) and (I) as 
        subparagraphs (G) and (H), respectively.

SEC. 404. AMENDMENT TO PROVIDE AN INFLATION ADJUSTMENT FOR THE SMALL 
                    DEPOSITORY INSTITUTION EXCEPTION UNDER THE 
                    DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT.

  Section 203(1) of the Depository Institution Management Interlocks 
Act (12 U.S.C. 3202(1)) is amended by striking ``$20,000,000'' and 
inserting ``$100,000,000''.

SEC. 405. ENHANCING THE SAFETY AND SOUNDNESS OF INSURED DEPOSITORY 
                    INSTITUTIONS.

  (a) Clarification Relating to the Enforceability of Agreements and 
Conditions.--The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) 
is amended by adding at the end the following new section:

``SEC. 49. ENFORCEMENT OF AGREEMENTS.

  ``(a) In General.--Notwithstanding clause (i) or (ii) of section 
8(b)(6)(A) or section 38(e)(2)(E), an appropriate Federal banking 
agency may enforce, under section 8, the terms of--
          ``(1) any condition imposed in writing by the agency on a 
        depository institution or an institution-affiliated party 
        (including a bank holding company) in connection with any 
        action on any application, notice, or other request concerning 
        a depository institution; or
          ``(2) any written agreement entered into between the agency 
        and an institution-affiliated party (including a bank holding 
        company).
  ``(b) Receiverships and Conservatorships.--After the appointment of 
the Corporation as the receiver or conservator for any insured 
depository institution, the Corporation may enforce any condition or 
agreement described in paragraph (1) or (2) of subsection (a) involving 
such institution or any institution-affiliated party (including a bank 
holding company), through an action brought in an appropriate United 
States district court.''.
  (b) Protection of Capital of Insured Depository Institutions.--
Paragraph (1) of section 18(u) of the Federal Deposit Insurance Act (12 
U.S.C. 1828(u)) is amended by striking subparagraph (B) and by 
redesignating subparagraph (C) as subparagraph (B).

SEC. 406. INVESTMENTS BY INSURED SAVINGS ASSOCIATIONS IN BANK SERVICE 
                    COMPANIES AUTHORIZED.

  (a) In General.--Sections 2 and 3 of the Bank Service Company Act (12 
U.S.C. 1862, 1863) are each amended by striking ``insured bank'' each 
place such term appears and inserting ``insured depository 
institution''.
  (b) Technical and Conforming Amendments.--
          (1) Section 1(b)(4) of the Bank Service Company Act (12 
        U.S.C. 1861(b)(4)) is amended--
                  (A) by inserting ``, except when such term appears in 
                connection with the term `insured depository 
                institution','' after ``means''; and
                  (B) by striking ``Federal Home Loan Bank Board'' and 
                inserting ``Director of the Office of Thrift 
                Supervision''.
          (2) Section 1(b) of the Bank Service Company Act (12 U.S.C. 
        1861(b)) is amended--
                  (A) by striking paragraph (5) and inserting the 
                following new paragraph:
          ``(5) Insured depository institution.--The term `insured 
        depository institution' has the meaning given the term in 
        section 3(c) of the Federal Deposit Insurance Act;'';
                  (B) by striking ``and'' at the end of paragraph (7);
                  (C) by striking the period at the end of paragraph 
                (8) and inserting ``; and''; and
                  (D) by adding at the end the following new paragraph:
          ``(9) the terms `State depository institution', `Federal 
        depository institution', `State savings association' and 
        `Federal savings association' have the meanings given the terms 
        in section 3 of the Federal Deposit Insurance Act.''.
          (3) The 1st sentence of section 5(c)(4)(B) of the Home 
        Owners' Loan Act (12 U.S.C. 1464(c)(4)(B)) is amended by 
        striking ``by savings associations of such State and by Federal 
        associations'' and inserting ``by State and Federal depository 
        institutions''.
          (4) Subparagraph (A)(ii) and subparagraph (B)(ii) of section 
        1(b)(2) of the Bank Service Company Act (12 U.S.C. 1861(b)(2)) 
        are each amended by striking ``insured banks'' and inserting 
        ``insured depository institutions''.
          (5) Section 1(b)(8) of the Bank Service Company Act (12 
        U.S.C. 1861(b)(8)) is further amended--
                  (A) by striking ``insured bank'' and inserting 
                ``insured depository institution''
                  (B) by striking ``insured banks'' each place such 
                term appears and inserting ``insured depository 
                institutions''; and
                  (C) by striking ``the bank's'' and inserting ``the 
                depository institution's''.
          (6) Section 2 of the Bank Service Company Act (12 U.S.C. 
        1862) is amended by inserting ``or savings associations, other 
        than the limitation on the amount of investment by a Federal 
        savings association contained in section 5(c)(4)(B) of the Home 
        Owners' Loan Act'' after ``relating to banks''.
          (7) Section 4(c) of the Bank Service Company Act (12 U.S.C. 
        1864(c)) is amended by inserting ``or State savings 
        association'' after ``State bank'' each place such term 
        appears.
          (8) Section 4(d) of the Bank Service Company Act (12 U.S.C. 
        1864(d)) is amended by inserting ``or Federal savings 
        association'' after ``national bank'' each place such term 
        appears.
          (9) Section 4(e) of the Bank Service Company Act (12 U.S.C. 
        1864(e)) is amended to read as follows:
  ``(e) A bank service company may perform--
          ``(1) only those services that each depository institution 
        shareholder or member is otherwise authorized to perform under 
        any applicable Federal or State law; and
          ``(2) such services only at locations in a State in which 
        each such shareholder or member is authorized to perform such 
        services.''.
          (10) Section 4(f) of the Bank Service Company Act (12 U.S.C. 
        1864(f)) is amended by inserting ``or savings associations'' 
        after ``location of banks''.
          (11) Section 5 of the Bank Service Company Act (12 U.S.C. 
        1865) is amended--
                  (A) in subsection (a)--
                          (i) by striking ``insured bank'' and 
                        inserting ``insured depository institution''; 
                        and
                          (ii) by striking ``bank's'' and inserting 
                        ``institution's''.
                  (B) in subsection (b), by striking ``insured bank'' 
                and inserting ``insured depository institution''; and
                  (C) in subsection (c)--
                          (i) by striking ``the bank or banks'' and 
                        inserting ``any depository institution''; and
                          (ii) by striking ``capability of the bank'' 
                        and inserting ``capability of the depository 
                        institution''.
          (12) Section 7 of the Bank Service Company Act (12 U.S.C. 
        1867) is amended--
                  (A) in subsection (b), by striking ``insured bank'' 
                and inserting ``insured depository institution''; and
                  (B) in subsection (c)--
                          (i) by striking ``a bank'' each place such 
                        term appears and inserting ``a depository 
                        institution''; and
                          (ii) by striking ``the bank'' each place such 
                        term appears and inserting ``the depository 
                        institution''.

SEC. 407. CROSS GUARANTEE AUTHORITY.

  Subparagraph (A) of section 5(e)(9) of the Federal Deposit Insurance 
Act (12 U.S.C. 1815(e)(9)(A)) is amended to read as follows:
                  ``(A) such institutions are controlled by the same 
                company; or''.

SEC. 408. GOLDEN PARACHUTE AUTHORITY AND NONBANK HOLDING COMPANIES.

  Subsection (k) of section 18 of the Federal Deposit Insurance Act (12 
U.S.C. 1828(k)) is amended--
          (1) in paragraph (2)(A), by striking ``or depository 
        institution holding company'' and inserting ``or covered 
        company'';
          (2) by striking subparagraph (B) of paragraph (2) and 
        inserting the following new subparagraph:
                  ``(B) Whether there is a reasonable basis to believe 
                that the institution-affiliated party is substantially 
                responsible for--
                          ``(i) the insolvency of the depository 
                        institution or covered company;
                          ``(ii) the appointment of a conservator or 
                        receiver for the depository institution; or
                          ``(iii) the depository institution's troubled 
                        condition (as defined in the regulations 
                        prescribed pursuant to section 32(f)).'';
          (3) in paragraph (2)(F), by striking ``depository institution 
        holding company'' and inserting ``covered company,'';
          (4) in paragraph (3) in the matter preceding subparagraph 
        (A), by striking ``depository institution holding company'' and 
        inserting ``covered company'';
          (5) in paragraph (3)(A), by striking ``holding company'' and 
        inserting ``covered company'';
          (6) in paragraph (4)(A)--
                  (A) by striking ``depository institution holding 
                company'' each place such term appears and inserting 
                ``covered company''; and
                  (B) by striking ``holding company'' each place such 
                term appears (other than in connection with the term 
                referred to in subparagraph (A)) and inserting 
                ``covered company'';
          (7) in paragraph (5)(A), by striking ``depository institution 
        holding company'' and inserting ``covered company'';
          (8) in paragraph (5), by adding at the end the following new 
        subparagraph:
                  ``(D) Covered company.--The term `covered company' 
                means any depository institution holding company 
                (including any company required to file a report under 
                section 4(f)(6) of the Bank Holding Company Act of 
                1956), or any other company that controls an insured 
                depository institution.''; and
          (9) in paragraph (6)--
                  (A) by striking ``depository institution holding 
                company'' and inserting ``covered company,''; and
                  (B) by striking ``or holding company'' and inserting 
                ``or covered company''.

SEC. 409. AMENDMENTS RELATING TO CHANGE IN BANK CONTROL.

  Section 7(j) of the Federal Deposit Insurance Act (12 U.S.C. 1817(j)) 
is amended--
          (1) in paragraph (1)(D)--
                  (A) by striking ``is needed to investigate'' and 
                inserting ``is needed--
                          ``(i) to investigate'';
                  (B) by striking ``United States Code.'' and inserting 
                ``United States Code; or''; and
                  (C) by adding at the end the following new clause:
                          ``(ii) to analyze the safety and soundness of 
                        any plans or proposals described in paragraph 
                        (6)(E) or the future prospects of the 
                        institution.''; and
          (2) in paragraph (7)(C), by striking ``the financial 
        condition of any acquiring person'' and inserting ``either the 
        financial condition of any acquiring person or the future 
        prospects of the institution''.

         TITLE V--DEPOSITORY INSTITUTION AFFILIATES PROVISIONS

SEC. 501. CLARIFICATION OF CROSS MARKETING PROVISION.

  Section 4(n)(5) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1843(n)(5)) is amended--
          (1) in subparagraph (B), by striking ``subsection (k)(4)(I)'' 
        and inserting ``subparagraph (H) or (I) of subsection (k)(4)''; 
        and
          (2) by adding at the end the following new subparagraph:
                  ``(C) Threshold of control.--Subparagraph (A) shall 
                not apply with respect to a company described or 
                referred to in clause (i) or (ii) of such subparagraph 
                if the financial holding company does not own or 
                control 25 percent or more of the total equity or any 
                class of voting securities of such company.''.

SEC. 502. AMENDMENT TO PROVIDE THE FEDERAL RESERVE BOARD WITH 
                    DISCRETION CONCERNING THE IMPUTATION OF CONTROL OF 
                    SHARES OF A COMPANY BY TRUSTEES.

  Section 2(g)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841(g)(2)) is amended by inserting ``, unless the Board determines 
that such treatment is not appropriate in light of the facts and 
circumstances of the case and the purposes of this Act'' before the 
period at the end.

SEC. 503. ELIMINATING GEOGRAPHIC LIMITS ON THRIFT SERVICE COMPANIES.

  (a) In General.--The 1st sentence of section 5(c)(4)(B) of the Home 
Owners' Loan Act (12 U.S.C. 1464(c)(4)(B)) (as amended by section 
406(b)(3) of this Act) is amended--
          (1) by striking ``corporation organized'' and all that 
        follows through ``is available for purchase'' and inserting 
        ``company, if the entire capital of the company is available 
        for purchase''; and
          (2) by striking ``having their home offices in such State''.
  (b) Technical Corrections.--
          (1) The heading for subparagraph (B) of section 5(c)(4) of 
        the Home Owners' Loan Act (12 U.S.C. 1464(c)(4)(B)) is amended 
        by striking ``corporations'' and inserting ``companies''.
          (2) The 2nd sentence of section 5(n)(1) of the Home Owners' 
        Loan Act (12 U.S.C. 1464(n)(1)) is amended by striking 
        ``service corporations'' and inserting ``service companies''.
          (3) Section 5(q)(1) of the Home Owners' Loan Act (12 U.S.C. 
        1464(q)(1)) is amended by striking ``service corporation'' each 
        place such term appears in subparagraphs (A), (B), and (C) and 
        inserting ``service company''.
          (4) Section 10(m)(4)(C)(iii)(II) of the Home Owners' Loan Act 
        (12 U.S.C. 1467a(m)(4)(C)(iii)(II)) is amended by striking 
        ``service corporation'' each place such term appears and 
        inserting ``service company''.

SEC. 504. CLARIFICATION OF SCOPE OF APPLICABLE RATE PROVISION.

  Section 44(f) of the Federal Deposit Insurance Act (12 U.S.C. 
1831u(f)) is amended by adding at the end the following new paragraphs:
          ``(3) Other lenders.--In the case of any other lender doing 
        business in the State described in paragraph (1), the maximum 
        interest rate or amount of interest, discount points, finance 
        charges, or other similar charges that may be charged, taken, 
        received, or reserved from time to time in any loan, discount, 
        or credit sale made, or upon any note, bill of exchange, 
        financing transaction, or other evidence of debt issued to or 
        acquired by any other lender shall be equal to not more than 
        the greater of the rates described in subparagraph (A) or (B) 
        of paragraph (1).
          ``(4) Other lender defined.--For purposes of paragraph (3), 
        the term `other lender' means any person engaged in the 
        business of selling or financing the sale of personal property 
        (and any services incidental to the sale of personal property) 
        in such State, except that, with regard to any person or entity 
        described in such paragraph, such term does not include--
                  ``(A) an insured depository institution; or
                  ``(B) any person or entity engaged in the business of 
                providing a short-term cash advance to any consumer in 
                exchange for--
                          ``(i) a consumer's personal check or share 
                        draft, in the amount of the advance plus a fee, 
                        where presentment or negotiation of such check 
                        or share draft is deferred by agreement of the 
                        parties until a designated future date; or
                          ``(ii) a consumer authorization to debit the 
                        consumer's transaction account, in the amount 
                        of the advance plus a fee, where such account 
                        will be debited on or after a designated future 
                        date.''.

                  TITLE VI--BANKING AGENCY PROVISIONS

SEC. 601. WAIVER OF EXAMINATION SCHEDULE IN ORDER TO ALLOCATE EXAMINER 
                    RESOURCES.

  Section 10(d) of the Federal Deposit Insurance Act (12 U.S.C. 
1820(d)) is amended--
          (1) by redesignating paragraphs (5), (6), (7), (8), (9), and 
        (10) as paragraphs (6), (7), (8), (9), (10), and (11), 
        respectively;
          (2) by inserting after paragraph (4), the following new 
        paragraph:
          ``(5) Waiver of schedule when necessary to achieve safe and 
        sound allocation of examiner resources.--Notwithstanding 
        paragraphs (1), (2), (3), and (4), an appropriate Federal 
        banking agency may make adjustments in the examination cycle 
        for an insured depository institution if necessary to allocate 
        available resources of examiners in a manner that provides for 
        the safety and soundness of, and the effective examination and 
        supervision of, insured depository institutions.''; and
          (3) in paragraphs (8) and (9), as so redesignated, by 
        striking ``paragraph (6)'' and inserting ``paragraph (7)''.

SEC. 602. INTERAGENCY DATA SHARING.

  (a) Federal Banking Agencies.--Section 7(a)(2) of the Federal Deposit 
Insurance Act (12 U.S.C. 1817(a)(2)) is amended by adding at the end 
the following new subparagraph:
                  ``(C) Data sharing with other agencies and persons.--
                In addition to reports of examination, reports of 
                condition, and other reports required to be regularly 
                provided to the Corporation (with respect to all 
                insured depository institutions, including a depository 
                institution for which the Corporation has been 
                appointed conservator or receiver) or an appropriate 
                State bank supervisor (with respect to a State 
                depository institution) under subparagraph (A) or (B), 
                a Federal banking agency may, in the agency's 
                discretion, furnish any report of examination or other 
                confidential supervisory information concerning any 
                depository institution or other entity examined by such 
                agency under authority of any Federal law, to--
                          ``(i) any other Federal or State agency or 
                        authority with supervisory or regulatory 
                        authority over the depository institution or 
                        other entity;
                          ``(ii) any officer, director, or receiver of 
                        such depository institution or entity; and
                          ``(iii) any other person the Federal banking 
                        agency determines to be appropriate.''.
  (b) National Credit Union Administration.--Section 202(a) of the 
Federal Credit Union Act (12 U.S.C. 1782(a)) is amended by adding at 
the end the following new paragraph:
          ``(8) Data sharing with other agencies and persons.--In 
        addition to reports of examination, reports of condition, and 
        other reports required to be regularly provided to the Board 
        (with respect to all insured credit unions, including a credit 
        union for which the Corporation has been appointed conservator 
        or liquidating agent) or an appropriate State commission, 
        board, or authority having supervision of a State-chartered 
        credit union, the Board may, in the Board's discretion, furnish 
        any report of examination or other confidential supervisory 
        information concerning any credit union or other entity 
        examined by the Board under authority of any Federal law, to--
                  ``(A) any other Federal or State agency or authority 
                with supervisory or regulatory authority over the 
                credit union or other entity;
                  ``(B) any officer, director, or receiver of such 
                credit union or entity; and
                  ``(C) any other institution-affiliated party of such 
                credit union or entity the Board determines to be 
                appropriate.''.

SEC. 603. PENALTY FOR UNAUTHORIZED PARTICIPATION BY CONVICTED 
                    INDIVIDUAL.

  Section 19 of the Federal Deposit Insurance Act (12 U.S.C. 1829) is 
amended by adding at the end the following new subsection:
  ``(c) Noninsured Banks.--Subsections (a) and (b) shall apply to a 
noninsured national bank and a noninsured State member bank, and any 
agency or noninsured branch (as such terms are defined in section 1(b) 
of the International Banking Act of 1978) of a foreign bank as if such 
bank, branch, or agency were an insured depository institution, except 
such subsections shall be applied for purposes of this subsection by 
substituting the agency determined under the following paragraphs for 
`Corporation' each place such term appears in such subsections:
          ``(1) The Comptroller of the Currency, in the case of a 
        noninsured national bank or any Federal agency or noninsured 
        Federal branch of a foreign bank.
          ``(2) The Board of Governors of the Federal Reserve System, 
        in the case of a noninsured State member bank or any State 
        agency or noninsured State branch of a foreign bank.''.

SEC. 604. AMENDMENT PERMITTING THE DESTRUCTION OF OLD RECORDS OF A 
                    DEPOSITORY INSTITUTION BY THE FDIC AFTER THE 
                    APPOINTMENT OF THE FDIC AS RECEIVER.

  Section 11(d)(15)(D) of the Federal Deposit Insurance Act (12 U.S.C. 
1821(d)(15)(D)) is amended--
          (1) by striking ``Recordkeeping requirement.--After the end 
        of the 6-year period'' and inserting ``Recordkeeping 
        requirement.--
                          ``(i) In general.--Except as provided in 
                        clause (ii), after the end of the 6-year 
                        period''; and
          (2) by adding at the end the following new clause:
                          ``(ii) Old records.--In the case of records 
                        of an insured depository institution which are 
                        at least 10 years old as of the date the 
                        Corporation is appointed as the receiver of 
                        such depository institution, the Corporation 
                        may destroy such records in accordance with 
                        clause (i) any time after such appointment is 
                        final without regard to the 6-year period of 
                        limitation contained in such clause.''.

SEC. 605. MODERNIZATION OF RECORDKEEPING REQUIREMENT.

  Subsection (f) of section 10 of the Federal Deposit Insurance Act (12 
U.S.C. 1820(f)) is amended to read as follows:
  ``(f) Preservation of Agency Records.--
          ``(1) In general.--A Federal banking agency may cause any and 
        all records, papers, or documents kept by the agency or in the 
        possession or custody of the agency to be--
                  ``(A) photographed or microphotographed or otherwise 
                reproduced upon film; or
                  ``(B) preserved in any electronic medium or format 
                which is capable of--
                          ``(i) being read or scanned by computer; and
                          ``(ii) being reproduced from such electronic 
                        medium or format by printing or any other form 
                        of reproduction of electronically stored data.
          ``(2) Treatment as original records.--Any photographs, 
        microphotographs, or photographic film or copies thereof 
        described in paragraph (1)(A) or reproduction of electronically 
        stored data described in paragraph (1)(B) shall be deemed to be 
        an original record for all purposes, including introduction in 
        evidence in all State and Federal courts or administrative 
        agencies and shall be admissible to prove any act, transaction, 
        occurrence, or event therein recorded.
          ``(3) Authority of the federal banking agencies.--Any 
        photographs, microphotographs, or photographic film or copies 
        thereof described in paragraph (1)(A) or reproduction of 
        electronically stored data described in paragraph (1)(B) shall 
        be preserved in such manner as the Federal banking agency shall 
        prescribe and the original records, papers, or documents may be 
        destroyed or otherwise disposed of as the Federal banking 
        agency may direct.''.

SEC. 606. CLARIFICATION OF EXTENT OF SUSPENSION, REMOVAL, AND 
                    PROHIBITION AUTHORITY OF FEDERAL BANKING AGENCIES 
                    IN CASES OF CERTAIN CRIMES BY INSTITUTION-
                    AFFILIATED PARTIES.

  (a) Insured Depository Institution.--
          (1) In general.--Section 8(g)(1) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1818(g)(1)) is amended--
                  (A) in subparagraph (A), by striking ``the 
                depository'' each place such term appears and inserting 
                ``any depository'';
                  (B) in subparagraph (B)(i), by inserting ``of which 
                the subject of the order is an institution-affiliated 
                party'' before the period at the end;
                  (C) in subparagraph (C), by striking ``the 
                depository'' each place such term appears and inserting 
                ``any depository'';
                  (D) in subparagraph (D)(i), by inserting ``of which 
                the subject of the order is an institution-affiliated 
                party'' after ``upon the depository institution''; and
                  (E) by adding at the end the following new 
                subparagraph:
                  ``(E) Continuation of authority.--A Federal banking 
                agency may issue an order under this paragraph with 
                respect to an individual who is an institution-
                affiliated party at a depository institution at the 
                time of an offense described in subparagraph (A) 
                without regard to--
                          ``(i) whether such individual is an 
                        institution-affiliated party at any depository 
                        institution at the time the order is considered 
                        or issued by the agency; or
                          ``(ii) whether the depository institution at 
                        which the individual was an institution-
                        affiliated party at the time of the offense 
                        remains in existence at the time the order is 
                        considered or issued by the agency.''.
          (2) Clerical amendment.--Section 8(g) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1818(g)) is amended by striking 
        ``(g)'' and inserting the following new subsection heading:
  ``(g) Suspension, Removal, and Prohibition From Participation Orders 
in the Case of Certain Criminal Offenses.--''.
  (b) Insured Credit Unions.--
          (1) In general.--Section 206(i)(1) of the Federal Credit 
        Union Act (12 U.S.C. 1786(i)(1)) is amended--
                  (A) in subparagraph (A), by striking ``the credit 
                union'' each place such term appears and inserting 
                ``any credit union'';
                  (B) in subparagraph (B)(i), by inserting ``of which 
                the subject of the order is, or most recently was, an 
                institution-affiliated party'' before the period at the 
                end;
                  (C) in subparagraph (C), by striking ``the credit 
                union'' each place such term appears and inserting 
                ``any credit union'';
                  (D) in subparagraph (D)(i), by striking ``upon such 
                credit union'' and inserting ``upon the credit union of 
                which the subject of the order is, or most recently 
                was, an institution-affiliated party''; and
                  (E) by adding at the end the following new 
                subparagraph:
                  ``(E) Continuation of authority.--The Board may issue 
                an order under this paragraph with respect to an 
                individual who is an institution-affiliated party at a 
                credit union at the time of an offense described in 
                subparagraph (A) without regard to--
                          ``(i) whether such individual is an 
                        institution-affiliated party at any credit 
                        union at the time the order is considered or 
                        issued by the Board; or
                          ``(ii) whether the credit union at which the 
                        individual was an institution-affiliated party 
                        at the time of the offense remains in existence 
                        at the time the order is considered or issued 
                        by the Board.''.
          (2) Clerical amendment.--Section 206(i) of the Federal Credit 
        Union Act (12 U.S.C. 1786(i)) is amended by striking ``(i)'' at 
        the beginning and inserting the following new subsection 
        heading:
  ``(i) Suspension, Removal, and Prohibition From Participation Orders 
in the Case of Certain Criminal Offenses.--''.

SEC. 607. STREAMLINING DEPOSITORY INSTITUTION MERGER APPLICATION 
                    REQUIREMENTS.

  (a) In General.--Paragraph (4) of section 18(c) of the Federal 
Deposit Insurance Act (12 U.S.C. 1828(c)) is amended to read as 
follows:
          ``(4) Reports on competitive factors.--
                  ``(A) Request for report.--In the interests of 
                uniform standards, before acting on any application for 
                approval of a merger transaction, the responsible 
                agency, unless the agency finds that it must act 
                immediately in order to prevent the probable failure of 
                a depository institution involved, shall--
                          ``(i) request a report on the competitive 
                        factors involved from the Attorney General; and
                          ``(ii) provide a copy of the request to the 
                        Corporation (when the Corporation is not the 
                        responsible agency).
                  ``(B) Furnishing of report.--The report requested 
                under subparagraph (A) shall be furnished by the 
                Attorney General to the responsible agency--
                          ``(i) not more than 30 calendar days after 
                        the date on which the Attorney General received 
                        the request; or
                          ``(ii) not more than 10 calendar days after 
                        such date, if the requesting agency advises the 
                        Attorney General that an emergency exists 
                        requiring expeditious action.''.
  (b) Technical and Conforming Amendment.--The penultimate sentence of 
section 18(c)(6) of the Federal Deposit Insurance Act (12 U.S.C. 
1828(c)(6)) is amended to read as follows: ``If the agency has advised 
the Attorney General under paragraph (4)(B) of the existence of an 
emergency requiring expeditious action and has requested a report on 
the competitive factors within 10 days, the transaction may not be 
consummated before the fifth calendar day after the date of approval by 
the agency.''.

SEC. 608. INCLUSION OF DIRECTOR OF THE OFFICE OF THRIFT SUPERVISION IN 
                    LIST OF BANKING AGENCIES REGARDING INSURANCE 
                    CUSTOMER PROTECTION REGULATIONS.

  Section 47(g)(2)(B)(i) of the Federal Deposit Insurance Act (12 
U.S.C. 1831x(g)(2)(B)(i)) is amended by inserting ``the Director of the 
Office of Thrift Supervision,'' after ``Comptroller of the Currency,''.

SEC. 609. SHORTENING OF POST-APPROVAL ANTITRUST REVIEW PERIOD WITH THE 
                    AGREEMENT OF THE ATTORNEY GENERAL.

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

SEC. 610. PROTECTION OF CONFIDENTIAL INFORMATION RECEIVED BY FEDERAL 
                    BANKING REGULATORS FROM FOREIGN BANKING 
                    SUPERVISORS.

  Section 15 of the International Banking Act of 1978 (12 U.S.C. 3109) 
is amended by adding at the end the following new subsection:
  ``(c) Confidential Information Received From Foreign Supervisors.--
          ``(1) In General.--Except as provided in paragraph (3), a 
        Federal banking agency may not be compelled to disclose 
        information received from a foreign regulatory or supervisory 
        authority if--
                  ``(A) the foreign regulatory or supervisory authority 
                has, in good faith, determined and represented to such 
                Federal banking agency that public disclosure of the 
                information would violate the laws applicable to that 
                foreign regulatory or supervisory authority; and
                  ``(B) the relevant Federal banking agency obtained 
                such information pursuant to--
                          ``(i) such procedures as the Federal banking 
                        agency may establish for use in connection with 
                        the administration and enforcement of Federal 
                        banking laws; or
                          ``(ii) a memorandum of understanding or other 
                        similar arrangement between the Federal banking 
                        agency and the foreign regulatory or 
                        supervisory authority.
          ``(2) Treatment under title 5, united states code.--For 
        purposes of section 552 of title 5, United States Code, this 
        subsection shall be treated as a statute described in 
        subsection (b)(3)(B) of such section.
          ``(3) Savings provision.--No provision of this section shall 
        be construed as--
                  ``(A) authorizing any Federal banking agency to 
                withhold any information from any duly authorized 
                committee of the House of Representatives or the 
                Senate; or
                  ``(B) preventing any Federal banking agency from 
                complying with an order of a court of the United States 
                in an action commenced by the United States or such 
                agency.
          ``(4) Federal banking agency defined.--For purposes of this 
        subsection, the term `Federal banking agency' means the Board, 
        the Comptroller, the Federal Deposit Insurance Corporation, and 
        the Director of the Office of Thrift Supervision.''.

SEC. 611. PROHIBITION ON PARTICIPATION BY CONVICTED INDIVIDUAL.

  Section 19 of the Federal Deposit Insurance Act (12 U.S.C. 1829) is 
amended by inserting after subsection (c) (as added by section 603 of 
this title) the following new subsections:
  ``(d) Bank Holding Companies.--Subsections (a) and (b) shall apply to 
any bank holding company, any subsidiary (other than a bank) of a bank 
holding company, and any organization organized and operated under 
section 25A of the Federal Reserve Act or operating under section 25 of 
the Federal Reserve Act as if such bank holding company, subsidiary, or 
organization were an insured depository institution, except such 
subsections shall be applied for purposes of this subsection by 
substituting `Board of Governors of the Federal Reserve System' for 
`Corporation' each place such term appears in such subsections.
  ``(e) Savings and Loan Holding Companies.--Subsections (a) and (b) 
shall apply to any savings and loan holding company and any subsidiary 
(other than a savings association) of a savings and loan holding 
company as if such savings and loan holding company or subsidiary were 
an insured depository institution, except such subsections shall be 
applied for purposes of this subsection by substituting `Director of 
the Office of Thrift Supervision' for `Corporation' each place such 
term appears in such subsections.''.

SEC. 612. CLARIFICATION THAT NOTICE AFTER SEPARATION FROM SERVICE MAY 
                    BE MADE BY AN ORDER.

  (a) In General.--Section 8(i)(3) of the Federal Deposit Insurance Act 
(12 U.S.C. 1818(i)(3)) is amended by inserting ``or order'' after 
``notice'' each place such term appears.
  (b) Technical and Conforming Amendment.--The heading for section 
8(i)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1818(i)(3)) is 
amended by inserting ``or order'' after ``Notice''.

SEC. 613. EXAMINERS OF FINANCIAL INSTITUTIONS.

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

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

  ``(a) Subject to section 213(b), whoever being an officer, director 
or employee of a financial institution extends credit to any examiner 
which the examiner is prohibited from accepting under section 213 shall 
be fined under this title or imprisoned not more than one year, or 
both; and may be fined a further sum equal to the amount of the credit 
extended.
  ``(b) For purposes of this section, the following definitions shall 
apply:
          ``(1) The term `financial institution' does not include a 
        credit union, a Federal reserve bank, a Federal home loan bank, 
        or a depository institution holding company.
          ``(2) The term `examiner' means any person--
                  ``(A) appointed by a Federal financial institution 
                regulatory agency or pursuant to the laws of any State 
                to examine a financial institution; or
                  ``(B) elected under the law of any State to conduct 
                examinations of any financial institution.
          ``(3) The term `Federal financial institution regulatory 
        agency' means--
                  ``(A) the Comptroller of the Currency;
                  ``(B) the Board of Governors of the Federal Reserve 
                System;
                  ``(C) the Director of the Office of Thrift 
                Supervision;
                  ``(D) the Federal Deposit Insurance Corporation;
                  ``(E) the Federal Housing Finance Board;
                  ``(F) the Farm Credit Administration;
                  ``(G) the Farm Credit System Insurance Corporation; 
                and
                  ``(H) the Small Business Administration.''.
  (b) Acceptance of Credit by a Bank Examiner.--Section 213 of title 
18, United States Code, is amended to read as follows:

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

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

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

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

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

SEC. 615. ENFORCEMENT AGAINST MISREPRESENTATIONS REGARDING FDIC DEPOSIT 
                    INSURANCE COVERAGE.

  (a) In General.--Section 18(a) of the Federal Deposit Insurance Act 
(12 U.S.C. 1828(a)) is amended by adding at the end the following new 
paragraph:
          ``(4) False advertising, misuse of fdic names, and 
        misrepresentation to indicate insured status.--
                  ``(A) Prohibition on false advertising and misuse of 
                fdic names.--No person may--
                          ``(i) use the terms `Federal Deposit', 
                        `Federal Deposit Insurance', `Federal Deposit 
                        Insurance Corporation', any combination of such 
                        terms, or the abbreviation `FDIC' as part of 
                        the business name or firm name of any person, 
                        including any corporation, partnership, 
                        business trust, association, or other business 
                        entity; or
                          ``(ii) use such terms or any other sign or 
                        symbol as part of an advertisement, 
                        solicitation, or other document,
                to represent, suggest or imply that any deposit 
                liability, obligation, certificate or share is insured 
                or guaranteed by the Federal Deposit Insurance 
                Corporation, if such deposit liability, obligation, 
                certificate, or share is not insured or guaranteed by 
                the Corporation.
                  ``(B) Prohibition on misrepresentations of insured 
                status.--No person may knowingly misrepresent--
                          ``(i) that any deposit liability, obligation, 
                        certificate, or share is federally insured, if 
                        such deposit liability, obligation, 
                        certificate, or share is not insured by the 
                        Corporation; or
                          ``(ii) the extent to which or the manner in 
                        which any deposit liability, obligation, 
                        certificate, or share is insured by the Federal 
                        Deposit Insurance Corporation, if such deposit 
                        liability, obligation, certificate, or share is 
                        not insured by the Corporation to the extent or 
                        in the manner represented.
                  ``(C) Authority of fdic.--The Corporation shall 
                have--
                          ``(i) jurisdiction over any person that 
                        violates this paragraph, or aids or abets the 
                        violation of this paragraph; and
                          ``(ii) for purposes of enforcing the 
                        requirements of this paragraph with regard to 
                        any person--
                                  ``(I) the authority of the 
                                Corporation under section 10(c) to 
                                conduct investigations; and
                                  ``(II) the enforcement authority of 
                                the Corporation under subsections (b), 
                                (c), (d) and (i) of section 8,
                as if such person were a state nonmember insured bank.
                  ``(D) Other actions preserved.--No provision of this 
                paragraph shall be construed as barring any action 
                otherwise available, under the laws of the United 
                States or any State, to any Federal or State law 
                enforcement agency or individual.''.
  (b) Enforcement Orders.--Section 8(c) of the Federal Deposit 
Insurance Act (12 U.S.C. 1818(c)) is amended by adding at the end the 
following new paragraph:
          ``(4) False advertising or misuse of names to indicate 
        insured status.--
                  ``(A) Temporary order.--
                          ``(i) In general.--If a notice of charges 
                        served under subsection (b)(1) of this section 
                        specifies on the basis of particular facts that 
                        any person is engaged in conduct described in 
                        section 18(a)(4), the Corporation may issue a 
                        temporary order requiring--
                                  ``(I) the immediate cessation of any 
                                activity or practice described, which 
                                gave rise to the notice of charges; and
                                  ``(II) affirmative action to prevent 
                                any further, or to remedy any existing, 
                                violation.
                          ``(ii) Effect of order.--Any temporary order 
                        issued under this subparagraph shall take 
                        effect upon service.
                  ``(B) Effective period of temporary order.--A 
                temporary order issued under subparagraph (A) shall 
                remain effective and enforceable, pending the 
                completion of an administrative proceeding pursuant to 
                subsection (b)(1) in connection with the notice of 
                charges--
                          ``(i) until such time as the Corporation 
                        shall dismiss the charges specified in such 
                        notice; or
                          ``(ii) if a cease-and-desist order is issued 
                        against such person, until the effective date 
                        of such order.
                  ``(C) Civil money penalties.--Violations of section 
                18(a)(4) shall be subject to civil money penalties as 
                set forth in subsection (i) in an amount not to exceed 
                $1,000,000 for each day during which the violation 
                occurs or continues.''.
  (c) Technical and Conforming Amendments.--
          (1) Section 18(a)(3) of the Federal Deposit Insurance Act (12 
        U.S.C. 1828(a)) is amended--
                  (A) in the 1st sentence by striking ``of this 
                subsection'' and inserting ``of paragraphs (1) and 
                (2)'';
                  (B) by striking the 2nd sentence; and
                  (C) in the 3rd sentence, by striking ``of this 
                subsection'' and inserting ``of paragraphs (1) and 
                (2)''.
          (2) The heading for subsection (a) of section 18 of the 
        Federal Deposit Insurance Act (12 U.S.C. 1828(a)) is amended by 
        striking ``Insurance logo.--'' and inserting ``Representations 
        of deposit insurance.--''.

SEC. 616. COMPENSATION OF FEDERAL HOME LOAN BANK DIRECTORS.

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

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

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

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

  (a) In General.--Before December 31, 2003, and the end of each 2-year 
period beginning after such date, each Federal banking agency shall 
submit a report to the Congress on the status of the employment by the 
agency of minority individuals and women.
  (b) Factors To Be Included.--The report shall include a detailed 
assessment of each of the following:
          (1) The extent of hiring of minority individuals and women by 
        the agency as of the time the report is prepared.
          (2) The successes achieved and challenges faced by the agency 
        in operating minority and women outreach programs.
          (3) Challenges the agency may face in finding qualified 
        minority individual and women applicants.
          (4) Such other information, findings, and conclusions, and 
        recommendations for legislative or agency action, as the agency 
        may determine to be appropriate to include in the report.
  (c) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Federal banking agency.--The term ``Federal banking 
        agency''--
                  (A) has the same meaning as in section 3(z) of the 
                Federal Deposit Insurance Act; and
                  (B) includes the National Credit Union 
                Administration.
          (2) Minority.--The term ``minority'' has the same meaning as 
        in section 1204(c)(3) of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989.

SEC. 619. COORDINATION OF STATE EXAMINATION AUTHORITY.

  Section 10(h) of the Federal Deposit Insurance Act (12 U.S.C. 
1820(h)) is amended to read as follows:
  ``(h) Coordination of Examination Authority.--
          ``(1) In general.--The appropriate State bank supervisor of 
        the home State of an insured State bank has authority to 
        examine and supervise the bank. The State bank supervisor of 
        the home State of an insured State bank shall exercise its 
        authority to supervise and examine the branches of the bank in 
        a host State in accordance with the terms of any applicable 
        cooperative agreement between the home State bank supervisor 
        and the State bank supervisor of the relevant host State. 
        Except as expressly provided in a cooperative agreement between 
        the State bank supervisors of the home State and host State(s) 
        of an insured State bank, only the State bank supervisor of the 
        home State of an insured State bank may levy or charge State 
        supervisory fees on the bank.
          ``(2) Host state examination.--With respect to a branch 
        operated in a host State by an out-of-State insured State bank 
        that resulted from an interstate merger transaction approved 
        under section 44 or that was established in such State pursuant 
        to section 5155(g) of the Revised Statutes, the third 
        undesignated paragraph of section 9 of the Federal Reserve Act 
        or section 18(d)(4) of this Act, the appropriate State bank 
        supervisor of such host State may--
                  ``(A) with written notice to the State bank 
                supervisor of the bank's home State and subject to the 
                terms of any applicable cooperative agreement with the 
                State bank supervisor of such home State, examine such 
                branch for the purpose of determining compliance with 
                host State laws that are applicable pursuant to section 
                24(j) of this Act, including those that govern 
                community reinvestment, fair lending, and consumer 
                protection; and
                  ``(B) if expressly permitted under and subject to the 
                terms of a cooperative agreement with the State bank 
                supervisor of the bank's home State or if such out-of-
                State insured State bank has been determined to be in a 
                troubled condition by either the State bank supervisor 
                of the bank's home State or the bank's appropriate 
                Federal banking agency, participate in the examination 
                of the bank by the State bank supervisor of the bank's 
                home State to ascertain that the activities of the 
                branch in such host State are not conducted in an 
                unsafe or unsound manner. The State bank supervisor of 
                the home State of an insured State bank shall notify 
                the State bank supervisor of each host State of the 
                bank if there has been a final determination that the 
                bank is in a troubled condition. The State bank 
                supervisor of the bank's home State shall provide such 
                notice as soon as reasonably possible but in all cases 
                within 15 business days after the State bank supervisor 
                has made such final determination or has received 
                written notification of such final determination.
          ``(3) Host state enforcement.--If the State bank supervisor 
        of a host State determines that a branch of an out-of-State 
        State insured State bank is violating any law of the host State 
        that is applicable to such branch pursuant to section 24(j) of 
        this Act, including a law that governs community reinvestment, 
        fair lending, or consumer protection, the State bank supervisor 
        of the host State or, to the extent authorized by the law of 
        the host State, a host State law enforcement officer may, with 
        written notice to the State bank supervisor of the bank's home 
        State and subject to the terms of any applicable cooperative 
        agreement with the State bank supervisor of the bank's home 
        State, undertake such enforcement actions and proceedings as 
        would be permitted under the law of the host State as if the 
        branch were a bank chartered by that host State.
          ``(4) Cooperative agreement.--The State bank supervisors from 
        2 or more States may enter into cooperative agreements to 
        facilitate State regulatory supervision of State banks, 
        including cooperative agreements relating to the coordination 
        of examinations and joint participation in examinations. For 
        purposes of this subsection (h), the term ``cooperative 
        agreement'' means a written agreement that is signed by the 
        home State bank supervisor and host State bank supervisor to 
        facilitate State regulatory supervision of State banks and 
        includes nationwide or multi-state cooperative agreements and 
        cooperative agreements solely between the home State and host 
        State. Except for State bank supervisors, no provision of this 
        subsection (h) relating to such cooperative agreements shall be 
        construed as limiting in any way the authority of home and host 
        State law enforcement officers, regulatory supervisors, or 
        other officials that have not signed such cooperative 
        agreements to enforce host State laws that are applicable to a 
        branch of an out-of-State insured State bank located in the 
        host State pursuant to section 24(j) of this Act.
          ``(5) Federal regulatory authority.--No provision of this 
        subsection shall be construed as limiting in any way the 
        authority of any Federal banking agency.
          ``(6) State taxation authority not affected.--No provision of 
        this subsection (h) shall be construed as affecting the 
        authority of any State or political subdivision of any State to 
        adopt, apply, or administer any tax or method of taxation to 
        any bank, bank holding company, or foreign bank, or any 
        affiliate of any bank, bank holding company, or foreign bank, 
        to the extent such tax or tax method is otherwise permissible 
        by or under the Constitution of the United States or other 
        Federal law.
          ``(7) Definitions.--For purpose of this section, the 
        following definition shall apply:
                  ``(A) The terms `host State', `home State', and `out-
                of-State bank' have the same meanings as in section 
                44(g).
                  ``(B) The term `State supervisory fees' means 
                assessments, examination fees, branch fees, license 
                fees, and all other fees that are levied or charged by 
                a State bank supervisor directly upon an insured State 
                bank or upon branches of an insured State bank.
                  ``(C) Solely for purposes of subparagraph (2)(B) of 
                this subsection (h), an insured State bank has been 
                determined to be in `troubled condition' if the bank--
                          ``(i) has a composite rating, as determined 
                        in its most recent report of examination, of 4 
                        or 5 under the Uniform Financial Institutions 
                        Ratings System (UFIRS); or
                          ``(ii) is subject to a proceeding initiated 
                        by the Corporation for termination or 
                        suspension of deposit insurance; or
                          ``(iii) is subject to a proceeding initiated 
                        by the State bank supervisor of the bank's home 
                        State to vacate, revoke, or terminate the 
                        charter of the bank, or to liquidate the bank, 
                        or to appoint a receiver for the bank.
                  ``(D) For the purposes of paragraph (2)(B), the term 
                `final determination' means the transmittal of a Report 
                of Examination to the bank or transmittal of official 
                notice of proceedings to the bank.''.

              TITLE VII--CLERICAL AND TECHNICAL AMENDMENTS

SEC. 701. CLERICAL AMENDMENTS TO THE HOME OWNERS' LOAN ACT.

  (a) Amendment to Table of Contents.--The table of contents in section 
1 of the Home Owners' Loan Act (12 U.S.C. 1461) is amended by striking 
the items relating to sections 5 and 6 and inserting the following new 
items:

``Sec. 5. Savings associations.
``Sec. 6. [Repealed.]''.

  (b) Clerical Amendments to Headings.--
          (1) The heading for section 4(a) of the Home Owners' Loan Act 
        (12 U.S.C. 1463(a)) is amended by striking ``(a) Federal 
        Savings Associations.--'' and inserting ``(a) General 
        Responsibilities of the Director.--''.
          (2) The section heading for section 5 of the Home Owners' 
        Loan Act (12 U.S.C. 1464) is amended to read as follows:

``SEC. 5. SAVINGS ASSOCIATIONS.''.

SEC. 702. TECHNICAL CORRECTIONS TO THE FEDERAL CREDIT UNION ACT.

  The Federal Credit Union Act (12 U.S.C. 1751 et seq.) is amended as 
follows:
          (1) In section 101(3), strike ``and'' after the semicolon.
          (2) In section 101(5), strike the terms ``account account'' 
        and ``account accounts'' each place any such term appears and 
        insert ``account''.
          (3) In section 107(a)(5)(E) (as so designated by section 303 
        of this Act), strike the period at the end and insert a 
        semicolon.
          (4) In paragraphs (6) and (7) of section 107(a) (as so 
        designated by section 303 of this Act), strike the period at 
        the end and insert a semicolon.
          (5) In section 107(a)(7)(D) (as so designated by section 303 
        of this Act), strike ``the Federal Savings and Loan Insurance 
        Corporation or''.
          (6) In section 107(a)(7)(E) (as so designated by section 303 
        of this Act), strike ``the Federal Home Loan Bank Board,'' and 
        insert ``the Federal Housing Finance Board,''.
          (7) In section 107(a)(9) (as so designated by section 303 of 
        this Act), strike ``subchapter III'' and insert ``title III''.
          (8) In section 107(a)(13) (as so designated by section 303 of 
        this Act), strike the ``and'' after the semicolon at the end.
          (9) In section 109(c)(2)(A)(i), strike ``(12 U.S.C. 
        4703(16))''.
          (10) In section 120(h), strike ``under the Act approved July 
        30, 1947 (6 U.S.C., secs. 6-13),'' and insert ``chapter 93 of 
        title 31, United States Code,''.
          (11) In section 201(b)(5), strike ``section 116 of''.
          (12) In section 202(h)(3), strike ``section 207(c)(1)'' and 
        insert ``section 207(k)(1)''.
          (13) In section 204(b), strike ``such others powers'' and 
        insert ``such other powers''.
          (14) In section 206(e)(3)(D), strike ``and'' after the 
        semicolon at the end.
          (15) In section 206(f)(1), strike ``subsection (e)(3)(B)'' 
        and insert ``subsection (e)(3)''.
          (16) In section 206(g)(7)(D), strike ``and subsection (1)''.
          (17) In section 206(t)(2)(B), insert ``regulations'' after 
        ``as defined in''.
          (18) In section 206(t)(2)(C), strike ``material affect'' and 
        insert ``material effect''.
          (19) In section 206(t)(4)(A)(ii)(II), strike ``or'' after the 
        semicolon at the end.
          (20) In section 206A(a)(2)(A), strike ``regulator agency'' 
        and insert ``regulatory agency''.
          (21) In section 207(c)(5)(B)(i)(I), insert ``and'' after the 
        semicolon at the end.
          (22) In section 207(c)(8)(D)(ii)(I), insert a closing 
        parenthesis after ``Act of 1934''.
          (23) In the heading for subparagraph (A) of section 
        207(d)(3), strike ``to'' and insert ``with''.
          (24) In section 207(f)(3)(A), strike ``category or 
        claimants'' and insert ``category of claimants''.
          (25) In section 209(a)(8), strike the period at the end and 
        insert a semicolon.
          (26) In section 216(n), insert ``any action'' before ``that 
        is required''.
          (27) In section 304(b)(3), strike ``the affairs or such 
        credit union'' and insert ``the affairs of such credit union''.
          (28) In section 310, strike ``section 102(e)'' and insert 
        ``section 102(d)''.

SEC. 703. OTHER TECHNICAL CORRECTIONS.

  (a) Section 1306 of title 18, United States Code, is amended by 
striking ``5136A'' and inserting ``5136B''.
  (b) Section 5239 of the Revised Statutes of the United States (12 
U.S.C. 93) is amended by redesignating the second of the 2 subsections 
designated as subsection (d) (as added by section 331(b)(3) of the 
Riegle Community Development and Regulatory Improvement Act of 1994) as 
subsection (e).

SEC. 704. REPEAL OF OBSOLETE PROVISIONS OF THE BANK HOLDING COMPANY ACT 
                    OF 1956.

  (a) In General.--Section 2 of the Bank Holding Company Act of 1956 
(12 U.S.C. 1841) is amended--
          (1) in subsection (c)(2), by striking subparagraphs (I) and 
        (J); and
          (2) by striking subsection (m) and inserting the following 
        new subsection:
  ``(m) [Repealed]''.
  (b) Technical and Conforming Amendments.--Paragraphs (1) and (2) of 
section 4(h) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1843(h)) are each amended by striking ``(G), (H), (I), or (J) of 
section 2(c)(2)'' and inserting ``(G), or (H) of section 2(c)(2)''.

                          Purpose and Summary

    H.R. 1375, the Financial Services Regulatory Relief Act of 
2003, is intended to alter or eliminate statutory banking 
provisions in order to reduce the regulatory compliance burden 
on insured depository institutions and improve their 
productivity, as well as to make needed technical corrections 
to current statutes. H.R. 1375 is also intended to 
counterbalance the additional regulatory burden placed on 
insured depository institutions in the USA Patriot Act to focus 
their compliance efforts on combating money laundering and 
terrorist financing.

                  Background and Need for Legislation

    In 2001, Chairman Oxley requested that Federal and State 
financial regulators recommend legislative items that would 
provide regulatory relief for insured depository institutions. 
The regulators, as well as the financial services industry, 
submitted a number of wide-ranging proposals affecting banks, 
savings associations, and credit unions, resulting in the 
introduction of H.R. 3951, the Financial Services Regulatory 
Relief Act of 2002, which was approved last year by the 
Subcommittee on Financial Institutions and Consumer Credit and 
by the full Committee. Early this year, Chairman Oxley again 
requested that financial regulators recommend regulatory relief 
items. H.R. 1375, introduced by Congresswoman Capito, is 
essentially last year's bill with the addition of various 
provisions recommended by regulators.
    For banks, H.R. 1375: (1) removes the prohibition on 
national and State banks from expanding across State lines by 
opening branches; (2) allows the use of subordinated debt 
instruments to meet eligibility requirements for national banks 
to benefit from Subchapter S tax treatment; (3) eliminates 
unnecessary and costly reporting requirements on banks 
regarding lending to bank officials; (4) changes the exemption 
from the prohibition on management interlocks for banks in 
metropolitan statistical areas from $20 million in assets to 
$100 million; and (5) streamlines bank merger application 
regulatory requirements.
    For savings associations, the bill: (1) removes lending 
limits on small business and auto loans and increases the limit 
on other business loans; (2) gives these institutions parity 
with banks with respect to broker-dealer and investment adviser 
SEC registration requirements; (3) allows Federal thrifts to 
merge with one or more of their non-thrift subsidiaries or 
affiliates, the same as national banks; (4) permits investment 
in service companies without regard to geographic restrictions; 
and (5) gives thrifts the same authority as national and State 
banks to make investments primarily designed to promote 
community development.
    For credit unions, the bill: (1) expands the investment 
authority of Federal credit unions; (2) increases the general 
limit on the term of Federal credit union loans from 12 to 15 
years; (3) increases the limit on investment by Federal credit 
unions in credit union service organizations from 1 percent to 
3 percent of shares and earnings; (4) permits privately insured 
credit unions to be eligible to join a Federal Home Loan Bank; 
and (5) eases restrictions on voluntary mergers between healthy 
credit unions.
    For Federal financial regulatory agencies, the bill 
includes these provisions: (1) provides agencies the discretion 
to adjust the examination cycle for insured depository 
institutions to use agency resources in the most efficient 
manner; (2) allows the agencies to share confidential 
supervisory information concerning an examined institution; (3) 
modernizes agency recordkeeping requirements to allow use of 
optically imaged or computer scanned images; (4) clarifies that 
agencies may suspend or prohibit individuals charged with 
certain crimes from participation in the affairs of any 
depository institution and not only the institution with which 
the individual is associated; and (5) strengthens agency 
enforcement of written agreements when an institution-
affiliated party or controlling shareholder agrees to provide 
capital to the depository institution.
    All of these changes were the result of the Committee's 
hearing and consultation process with the affected parties, 
regulators, and the public. As a result of these, H.R. 1375 
will allow financial institutions to devote more resources to 
the business of lending to consumers and less to compliance 
with outdated and unneeded regulations. Reducing regulatory 
burden should lower credit costs for consumers and help the 
economy recover.

                                Hearings

    The Subcommittee on Financial Institutions and Consumer 
Credit held a hearing on March 27, 2003, on H.R. 1375. The 
following witnesses testified: The Honorable Mark Olson, 
Member, Board of Governors of the Federal Reserve System; The 
Honorable Dennis Dollar, Chairman, National Credit Union 
Administration; Ms. Julie L. Williams, First Senior Deputy 
Comptroller and Chief Counsel, Office of the Comptroller of the 
Currency; Mr. William F. Kroener, III, General Counsel, Federal 
Deposit Insurance Corporation; Ms. Carolyn Buck, Chief Counsel, 
Office of Thrift Supervision; Mr. Gavin M. Gee, Director of 
Finance, Idaho Department of Finance, on behalf of the 
Conference of State Bank Supervisors; and Ms. Jerrie J. 
Lattimore, Administrator, Credit Union Division, State of North 
Carolina, on behalf of the National Association of State Credit 
Union Supervisors.

                        Committee Consideration

    The Subcommittee on Financial Institutions and Consumer 
Credit met in open session on April 9, 2003, and approved H.R. 
1375 for full Committee consideration, as amended, by a voice 
vote.
    The Committee on Financial Services met in open session on 
May 20, 2003, and ordered H.R. 1375 reported to the House, with 
an amendment, by a voice vote, a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Oxley to report the bill to the House with a 
favorable recommendation was agreed to by a voice vote.
    The following amendment was considered by a record vote. 
The names of Members voting for and against follow:

          An amendment to the amendment in the nature of a 
        substitute by Ms. Waters, no. 1b, striking section 609 
        (relating to the shortening of the antitrust review 
        period), was not agreed to by a record vote of 27 yeas 
        and 35 nays.

                                              RECORD VOTE NO. FC-6
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Oxley......................  ........        X   .........  Mr. Frank (MA)...        X   ........  .........
Mr. Leach......................  ........        X   .........   Mr. Kanjorski...        X   ........  .........
Mr. Bereuter...................  ........        X   .........   Ms. Waters......        X   ........  .........
Mr. Baker......................  ........        X   .........   Mr. Sanders*....        X   ........  .........
Mr. Bachus.....................  ........        X   .........   Mrs. Maloney....        X   ........  .........
Mr. Castle.....................  ........  ........  .........   Mr. Gutierrez...        X   ........  .........
Mr. King.......................  ........        X   .........   Ms. Velazquez...        X   ........  .........
Mr. Royce......................  ........        X   .........   Mr. Watt........        X   ........  .........
Mr. Lucas (OK).................  ........        X   .........   Mr. Ackerman....  ........  ........  .........
Mr. Ney........................  ........        X   .........   Ms. Hooley (OR).        X   ........  .........
Mrs. Kelly.....................  ........        X   .........   Ms. Carson (IN).        X   ........  .........
Mr. Paul.......................  ........        X   .........   Mr. Sherman.....        X   ........  .........
Mr. Gillmor....................  ........        X   .........   Mr. Meeks (NY)..        X   ........  .........
Mr. Ryun (KS)..................  ........        X   .........   Ms. Lee.........        X   ........  .........
Mr. LaTourette.................  ........        X   .........   Mr. Inslee......        X   ........  .........
Mr. Manzullo...................  ........        X   .........   Mr. Moore.......  ........        X   .........
Mr. Jones (NC).................  ........        X   .........   Mr. Gonzalez....  ........  ........  .........
Mr. Ose........................  ........        X   .........   Mr. Capuano.....        X   ........  .........
Mrs. Biggert...................  ........        X   .........  Mr. Ford.........        X   ........  .........
Mr. Green (WI).................  ........        X   .........   Mr. Hinojosa....        X   ........  .........
Mr. Toomey.....................  ........        X   .........   Mr. Lucas (KY)..  ........        X   .........
Mr. Shays......................  ........  ........  .........   Mr. Crowley.....        X   ........  .........
Mr. Shadegg....................  ........        X   .........   Mr. Clay........  ........  ........  .........
Mr. Fossella...................  ........  ........  .........   Mr. Israel......        X   ........  .........
Mr. Gary G. Miller (CA)........  ........  ........  .........   Mr. Ross........  ........  ........  .........
Ms. Hart.......................  ........        X   .........   Mrs. McCarthy     ........  ........  .........
                                                                 (NY).
Mrs. Capito....................  ........        X   .........   Mr. Baca........        X   ........  .........
Mr. Tiberi.....................  ........        X   .........   Mr. Matheson....        X   ........  .........
Mr. Kennedy (MN)...............  ........        X   .........   Mr. Lynch.......        X   ........  .........
Mr. Feeney.....................  ........        X   .........   Mr. Miller (NC).        X   ........  .........
Mr. Hensarling.................  ........        X   .........   Mr. Emanuel.....        X   ........  .........
Mr. Garrett (NJ)...............  ........        X   .........   Mr. Scott (GA)..        X   ........  .........
Mr. Murphy.....................  ........        X   .........   Mr. Davis (AL)..        X   ........  .........
Ms. Ginny Brown-Waite (FL).....  ........        X   .........  .................  ........  ........  .........
Mr. Barrett (SC)...............  ........        X   .........  .................  ........  ........  .........
Ms. Harris.....................  ........        X   .........  .................  ........  ........  .........
Mr. Renzi......................  ........        X   .........  .................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------
*Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

    The Committee considered the following other amendments:

    An amendment in the nature of a substitute by Mr. Oxley, 
no. 1a, making extensions of the terms of the Federal Home Loan 
Bank Directors prospective and clarifying the civil remedies 
that can be imposed by the Federal Deposit Insurance 
Corporation, was agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Lucas, no. 1b, clarifying the regulatory structure for 
State chartered, multi-State banks, was agreed to by a voice 
vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Bachus, no. 1c, striking section 614 (relating to 
standards for institution-affiliated parties), was withdrawn.
    An amendment to the amendment in the nature of a substitute 
by Mr. Ackerman, no. 1d, requiring any depository institution 
who reports negative information to a consumer reporting agency 
disclose that information to the consumer, was withdrawn.
    An amendment to the amendment in the nature of a substitute 
by Mr. Israel, no. 1e, providing protection of credit of people 
in combat or activated for military service, was withdrawn.
    An amendment to the amendment in the nature of a substitute 
by Mr. Gutierrez, no. 1f, requiring disclosures for wire 
transfers, was withdrawn.
    An amendment to the amendment in the nature of a substitute 
by Mr. Gillmor, no. 1g, prohibiting ILCs that are not financial 
in nature from exercising de novo branching authority, was 
withdrawn.
    An amendment to the amendment in the nature of a substitute 
by Mr. Kanjorski, no. 1h, striking section 301 (relating to 
privately insured credit union membership in the Federal Home 
Loan Bank), was not agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Leach, no. 1i, prohibiting all ILCs from engaging in de 
novo branching, was not agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Gutierrez, no. 1j, requiring a study by the Federal 
Reserve Board on the use of matricula consular cards, was 
withdrawn.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee made findings that are 
reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    This legislation makes important changes to banking 
statutes to significantly reduce the burden of outdated and 
unnecessary laws and regulations on banks, savings 
associations, and credit unions. The appropriate banking 
regulatory agencies will streamline regulatory compliance for 
insured depository institutions in order to improve the 
efficiency and productivity of those institutions in providing 
financial services to consumers.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of budget authority, entitlement authority, or 
tax expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 11, 2003.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1375, the 
Financial Services Regulatory Relief Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kathleen 
Gramp and Jenny Lin (for federal costs), Pam Greene (for 
revenues), Victoria Heid Hall (for the state and local impact), 
and Judith Ruud.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 1375--Financial Services Regulatory Relief Act of 2003

    Summary: H.R. 1375 would affect the operations of financial 
institutions and the agencies that regulate them. Some 
provisions would address specific sectors: national banks could 
more easily operate as S corporations or adopt other 
alternative organizational structures; thrift institutions 
would be given some of the same investment, lending, and 
ownership options available to banks; credit unions would have 
new options for investments, lending, mergers, and leasing 
federal property; and certain privately insured credit unions 
could become members of the Federal Home Loan Bank system. The 
bill would provide the Federal Deposit Insurance Corporation 
(FDIC) with new enforcement authorities and modify regulatory 
procedures governing certain types of transactions, such as the 
establishment of de novo branches and interstate mergers. It 
would also give agencies more flexibility in sharing data, 
retaining records, and scheduling examinations, and would limit 
the legal defenses that the United States could use against 
certain claims for monetary damages.
    CBO estimates that enacting this bill would reduce federal 
revenues by $37 million over the next five years and by a total 
of $117 million over the 2004-2013 period. In addition, we 
estimate that direct spending would increase by $17 million 
over the next five years and by a total of $22 million over the 
2004-2013 period.
    H.R. 1375 contains intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA), but CBO estimates that 
the cost of complying with those requirements would not exceed 
the threshold for intergovernmental mandates established in 
UMRA ($59 million in 2003, adjusted annually for inflation).
    H.R. 1375 contains several private-sector mandates. Those 
mandates would affect certain depository institutions, 
nondepository institutions that control depository 
institutions, uninsured banks, bank holding companies and their 
subsidiaries, savings and loan association holding companies 
and their subsidiaries, and Federal Home Loan banks. At the 
same time, the bill would relax some restrictions on the 
operations of certain financial institutions. CBO estimates 
that the aggregate direct cost of complying with the private-
sector mandates in the bill would not exceed the annual 
threshold established in UMRA ($117 million in 2003, adjusted 
annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1375 is shown in the following table. 
The costs of this legislation fall within budget function 370 
(commerce and housing credit).

----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year, in millions of dollars--
                                    ----------------------------------------------------------------------------
                                      2004   2005   2006   2007    2008    2009    2010    2011    2012    2013
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES

Estimated revenues:
    S Corporation status...........     -2     -5     -8      -9     -11     -13     -14     -12     -12     -13
    Business organization                *      *      *       *      -1      -2      -2      -3      -4      -5
     flexibility...................
                                    ----------------------------------------------------------------------------
      Total \1\....................     -2     -5     -8     -10     -12     -15     -17     -14     -16     -18

                                         CHANGES IN DIRECT SPENDING \2\

Estimated budget authority.........      1      1      1       7       7       1       1       1       1       1
Estimated outlays..................      1      1      1       7       7       1       1       1       1       1
----------------------------------------------------------------------------------------------------------------
\1\ Negative revenues indicate a reduction in revenue collections.
\2\ CBO estimates that implementing H.R. 1375 could affect spending subject to appropriation, but we estimate
  that any such effect would be insignificant.

Notes.--* = Revenue loss is less than $500,000.

Basis of estimate

    Most of the budgetary impacts of this legislation would 
result from three provisions: section 101, which would make it 
easier for national banks to convert to S corporation status or 
alternative organization forms: section 214, which would limit 
the government's legal defenses against certain claims for 
monetary damages; and section 302, which would allow certain 
federal credit unions to lease federal land at no charge. For 
this estimate, CBO assumes that H.R. 1375 will be enacted in 
the fall of 2003.
    H.R. 1375 also would affect the workload at agencies that 
regulate financial institutions. We estimate that the net 
change in agency spending would not be significant. Based on 
information from each of the agencies, CBO estimates that the 
change in administrative expenses--both costs and potential 
savings--would average less than $500,000 a year over the next 
several years. Expenditures of the Office of the Comptroller of 
the Currency (OCC), the Office of Thrift Supervision (OTS), the 
National Credit Union Administration (NCUA), and the FDIC are 
classified as direct spending and would be covered by fees or 
insurance premiums paid by the institutions they regulate. Any 
change in spending by the Federal Reserve would affect net 
revenues, while adjustments in the budget of the Securities and 
Exchange Commission (SEC) and Federal Trade Commission (FTC) 
would be subject to appropriation.
            Revenues
    CBO estimates that enacting H.R. 1375 would reduce federal 
tax revenues collected from national and state-chartered banks 
and would have an insignificant effect on civil and criminal 
penalties collected for violations of the bill's provisions.
    S Corporation Status. Under this bill, some national banks 
would find it easier to convert from C corporation status to S 
corporation status. Section 101 would allow directors of 
national banks to be issued subordinated debt to satisfy the 
requirement that directors of a bank own qualifying shares in 
the bank. This provision would effectively reduce the number of 
shareholders of a bank by removing directors from shareholder 
status, making it easier for banks to comply with the 75-
shareholder limit that defines eligibility for subchapter S 
election.
    Income earned by banks taxed as C corporations is subject 
to the corporate income tax, and post-tax income distributed to 
shareholders is taxed again at individual income tax rates. 
Income earned by banks operating as S corporations is taxed 
only at the personal income tax rates of the banks' 
shareholders and is not subject to the corporate income tax. 
The average effective tax rate on S corporation income is lower 
than the average effective tax rate on C corporation income. 
CBO estimates that enacting this provision would reduce 
revenues by a total of $36 million over the next five years and 
by $100 million over the 2004-2013 period.
    Based on information from the Federal Reserve Board, the 
OCC, and private trade associations, CBO expects that most of 
the banks that would be affected are small, although banks and 
bank holding companies with assets over $500 million would also 
be affected. In addition, states are likely to amend the rules 
for state-chartered banks to match those for national banks. 
CBO expects that most conversions to Subchapter S status would 
occur between 2004 and 2006 and that national banks would 
convert earlier than state-chartered banks.
    Business Organization Flexibility. Under section 110 of 
this bill, the Comptroller of the Currency could allow national 
banks to organize in noncorporate form, for example as Limited 
Liability Corporations (LLCs) as defined by state law. LLCs 
generally choose to be taxed as partnerships. Only a few states 
currently allow banks to organize as LLCs, however, and the 
Internal Revenue Service (IRS) currently taxes state-chartered 
bank-LLCs as C corporations. LLCs have more organizational 
flexibility than S corporations while retaining the corporate 
characteristic of limited liability.
    Income earned by banks taxed as C corporations is subject 
to the corporate income tax, and post-tax income distributed to 
shareholders is taxed again at individual income tax rates. 
Income earned by partnerships--like that earned by S 
corporations--is taxed only at the personal income tax rates of 
the partners and is not subject to the corporate income tax. 
The average effective tax rate on partnerships is lower than 
the average effective tax rate on C corporation income but is 
similar to the average effective tax rate on S corporation 
income.
    Based on information from the OCC, the FDIC, and private 
trade associations, CBO believes that it is quite possible that 
the OCC would alter its regulations to allow national banks to 
organize in noncorporate form. We expect that, over the next 
decade, most states that do not currently allow banks to 
organize as LLCs will begin allowing them to do so in order to 
be competitive. Under H.R. 1375, future IRS tax treatment of 
bank-LLCs is uncertain. CBO assumes that the IRS may allow 
bank-LLCs to be taxed as partnerships at some point in the next 
decade. The estimated revenue effects of section 110 reflect 
CBO's estimate of the likelihood of such IRS actions. CBO 
anticipates that banks forming as LLCs would most likely be 
newly chartered institutions and that, over the next decade, 
only a very limited number of banks would convert from C 
corporation or S corporation status to LLCs taxed as 
partnerships.
    CBO estimates that enacting this provision would reduce 
federal revenues by a total of $1 million over the next five 
years and by $17 million over the 2004-2013 period.
    Civil and Criminal Penalties. H.R. 1375 would make all 
depository institutions--not just insured institutions--subject 
to certain civil and criminal fines for violating rules 
regarding breach of trust, dishonesty, and certain other 
crimes. It also would authorize the FDIC to take enforcement 
action or impose civil penalties of up to $1 million a day on 
any individual, corporation, or other entity that falsely 
implies that deposits or other funds are insured by the agency. 
Based on information from the FDIC, CBO expects that 
enforcement actions would likely deter most individuals or 
institutions from violating rules regarding breach of trust, 
dishonesty, or certain other crimes. As a result, we estimate 
that any additional penalty collections under those provisions 
would not be significant.
            Direct spending
    CBO estimates that enacting H.R. 1375 would increase direct 
spending by a total of about $15 million over the 2004-2013 
period to pay for increased litigation costs and larger 
payments for ``goodwill'' claims against the government. The 
bill also would reduce offsetting receipts collected from 
credit unions that lease federal facilities, and it could 
affect the cost of deposit insurance.
    Monetary Damages in Goodwill Cases. Section 214 would 
preclude the use of certain legal defenses in claims for 
damages against the United States arising out of the 
implementation of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (FIRREA). CBO estimates that 
enacting this provision would increase the cost of litigating 
and resolving such claims by a total of $15 million over the 
next five years.
    Background on Goodwill Cases. Under section 214, courts 
could not dismiss a claim arising out of the implementation of 
FIRREA on the basis of res judicata, collateral estoppel, or 
similar defenses if the defense was based on a decision, 
opinion, or order of judgment entered by any court prior to 
July 1, 1996. On that date, the Supreme Court decided United 
States v. Winstar Corp., 518 U.S. 839 (1996), holding that the 
government became liable for damages in breach of contract when 
the accounting treatment of ``supervisory goodwill'' that it 
had previously approved was prevented by enactment of FIRREA. 
About 100 ``goodwill'' cases against the government are still 
pending before the courts, with claims totaling about $20 
billion. CBO estimates that, under current law, such claims 
will cost the government about $1.5 billion over the 2004-2013 
period. Judgments, settlements, and litigation expenses for 
such claims are paid from the FSLIC Resolution Fund, and such 
payments do not require appropriation action.
    By eliminating some defenses currently available to the 
United States in such cases, section 214 would increase the 
likelihood that some claims would reach a hearing on the 
merits, thereby allowing cases to proceed further in the 
judicial process than may otherwise be likely. According to the 
Department of Justice (DOJ) and the FDIC, this provision would 
affect only a few of the goodwill cases; claims in the affected 
cases could total about $200 million. (This provision also 
could affect cases in which the FDIC is the plaintiff as the 
receiver of a failed thrift, but any monetary awards to the 
FDIC would be intragovernmental payments and would have no 
affect on the federal budget.)
    Estimated Cost of This Provision. CBO expects that enacting 
section 214 would increase the cost of litigation and potential 
settlements or judgments against the United States. Whether 
those costs are large or small would depend on the role those 
defenses would otherwise play in the outcome of each case. For 
example, the cost could be significant if the loss of those 
defenses resulted in a judgment for plaintiffs on the merits 
but could be negligible if the judgment were against the 
plaintiffs.
    For this estimate, CBO assumes that defenses of res 
judicata and collateral estoppel would be just two of several 
possible defenses and other factors affecting awards of 
monetary damages and that barring them would therefore have a 
small effect on the potential costs of such claims. We estimate 
that enacting this provision would increase expected payments 
for such claims by about $10 million--or 5 percent of the 
roughly $200 million in claims that might be affected by this 
provision. Given the pace of such litigation, we expect that 
those added costs would occur in 2007 and 2008. In addition, 
CBO estimates that DOJ's administrative costs would increase by 
an average of about $1 million a year as a result of the added 
time and workload associated with those cases. This estimate is 
based on historical trends in the cost of litigating such 
claims.
    Nongoodwill Cases. Because section 214 would not limit the 
affected claims to goodwill cases, this provision also could 
affect other types of claims for monetary damages arising out 
of the implementation of FIRREA that meet the criteria in the 
bill. This provision could encourage the filing of such claims 
that were resolved prior to July 1, 1996; however, DOJ is 
currently unaware of any such claims.
    Offsetting Receipts From Federal Leases. Section 302 would 
allow federal agencies to lease land to federal credit unions 
without charge under certain conditions. Under existing law, 
agencies may allocate space in federal buildings without charge 
if at least 95 percent of the credit union's members are or 
were federal employees. Some credit unions, primarily those 
serving military bases, have leased federal land to build a 
facility. Prior to 1991, leases awarded by the Department of 
Defense (DoD) were free of charge and for terms of up to 25 
years; a statutory change enacted that year limited the term of 
such leases to five years and required the lessee to pay a fair 
market value for the property. According to DoD, about 35 
credit unions have leased land since 1991 and are paying a 
total of about $525,000 a year to lease federal property. Those 
proceeds are recorded as offsetting receipts, and any spending 
of those payments is subject to appropriation.
    CBO expects that enacting this provision would result in a 
loss of offsetting receipts from all credit union leases. Those 
lessees currently paying a fee would stop making those payments 
after they renew their current leases, all of which should 
expire within the next five years. In addition, credit unions 
that have long-term, no-cost leases would be able to renew them 
without becoming subject to the fees they otherwise would pay 
under current law. CBO estimates that enacting this provision 
would cost a total of about $2 million over the next five years 
and an average of about $700,000 annually after 2008.
    Deposit Insurance. Several provisions in the bill could 
affect the cost of federal deposit insurance. For example, the 
bill would streamline the approval process for mergers, 
branching, and affiliations, which could give eligible 
institutions the opportunity to diversify and compete more 
effectively with other financial businesses. In some cases, 
such efficiencies could reduce the risk of insolvency. It is 
also possible, however, the some of the new lending and 
investment options could increase the risk of losses to the 
deposit insurance funds.
    CBO has no clear basis for predicting the direction or the 
amount of any change in spending for insurance that could 
result from the new investment, lending, and operational 
arrangements authorized by this bill. The net budgetary impact 
of such changes would be negligible over time, however, because 
any increase or decease in costs would be offset by adjustments 
in the insurance premiums paid by banks, thrifts, or credit 
unions.
            Spending subject to appropriation
    Section 201 provides thrift institutions with exemptions 
from broker-dealer and investment-advisor registration 
requirements similar to those accorded banks. Section 313 
provides similar exemptions for federally insured credit 
unions. Based on information from the SEC, CBO estimates that 
the budgetary effects of those exemptions would not be 
significant.
    Section 312 would exempt federally insured credit unions 
from filing certain acquisition or merger notices with the FTC. 
Under current law, the FTC charges filing fees ranging from 
$45,000 to $280,000, depending on the value of the transaction. 
The collection of such fees is contingent on appropriation 
action. Based on information from the FTC, CBO estimates that 
this exemption would have no significant effect on the amounts 
collected from such fees.
    Estimated impact on state, local, and tribal governments: 
H.R. 1375 would preempt certain state laws and place new 
requirements on certain state agencies that regulate financial 
institutions. Both the preemptions and the new requirements 
would be mandates as defined in UMRA. CBO estimates that the 
cost of those mandates taken together would not exceed the 
threshold established in UMRA ($59 million in 2003, adjusted 
annually for inflation).
    Section 209 would preempt certain state securities laws by 
prohibiting states from requiring agents representing a federal 
savings association to register as brokers or dealers if they 
sell deposit products (CDs) issued by the savings association. 
Such a preemption would impose costs (in the form of lost 
revenues) on those states that currently require such 
registration. Based on information from representatives of the 
securities industry and securities regulators, CBO estimates 
that losses to states as a result of this prohibition would 
total less than $1 million a year.
    Section 301 would authorize certain privately insured 
credit unions to apply for membership in a Federal Home Loan 
Bank (FHLB). Part of the application process would require 
state regulators of credit unions to determine whether an 
applicant is eligible for federal deposit insurance. This 
requirement would be a mandate, but because the regulators 
already make that determination under state law, the additional 
cost to comply with the requirement would be minimal.
    Upon becoming members, those credit unions would be 
eligible for loans from the FHLB. To preserve the value of 
those loans, section 301 would preempt certain state contract 
laws that otherwise would allow defaulting credit unions to 
avoid certain contractual obligations. Because those credit 
unions are not currently eligible for membership in a federal 
home loan bank, and accordingly, have no contracts for credit, 
this preemption, while a mandate, would impose no costs on 
state, local, or tribal governments.
    Section 302 would require state regulators of credit unions 
to provide certain information when requested by the NCUA. 
Because this provision would not require states to prepare any 
additional reports, merely to provide them to NCUA upon 
request, CBO estimates that the cost to states would be 
minimal.
    Section 401 would expand an existing preemption of state 
laws related to mergers between insured depository institutions 
chartered in different states. Current law preempts state laws 
that restrict mergers between insured banks with different home 
states. This section would expand that preemption to cover 
mergers between insured banks and other insured depository 
institutions or trust companies with different home states. 
This expansion of a preemption would be a mandate under UMRA 
but would impose little or no cost on states.
    Section 401 also would preempt state laws that regulate 
certain fiduciary activities performed by insured banks and 
other depository institutions. The bill would allow banks and 
trusts of a state (the home state) to locate a branch in 
another state (the host state) as long as the services provided 
by the branch are not in contravention of home state or host 
state law. Further, if the host state allows other types of 
entities to offer the same services as the branch bank or trust 
seeking to locate in the host state, home state approval of the 
branch would not be in contravention of host state law. This 
provision could preempt laws of the host state but would impose 
no costs on them.
    Section 619 provides that, except where expressly provided 
in a cooperative agreement, only the bank supervisor of the 
home state of an insured state bank may impose supervisory fees 
on the bank. To the extent that state laws permit such charges, 
this provision would preempt state authority. However, based on 
information from the Conference of State Bank Supervisors, 
under current practice, host states rarely if ever charge such 
fees, and therefore, we estimate that enacting this provision 
would have no significant effect on state revenues.

Estimated impact on the private sector

    H.R. 1375 contains several private-sector mandates as 
defined by UMRA. At the same time, the bill would relax some 
restrictions on the operations of certain financial 
institutions. CBO estimates that the aggregate direct costs of 
mandates in the bill would not exceed the annual threshold 
estimated in UMRA ($117 million in 2003, adjusted annually for 
inflation).
            Mandates
    The bill would impose mandates on depository institutions 
controlled by companies other than depository institution 
holding companies; nondepository institutions that control 
insured depository institutions; uninsured banks; bank holding 
companies and their subsidiaries; savings and loan association 
holding companies and their subsidiaries; and Federal Home Loan 
Banks. Mandates in the bill include an expansion of the 
authority of the FDIC over certain insured depositories and 
companies that control insured depositories, a prohibition on 
participation in the affairs of financial institutions of 
people convicted of certain crimes, and additional reporting 
requirements for FHLBs.
    Expansion of the FDIC's Authorities. The Gramm-Leach-Bliley 
Act allowed new forms of affiliations among depositories and 
other financial services firms. Consequently, insured 
depository institutions may now be controlled by a company 
other than a depository institution holding company (DIHC). 
H.R. 1375 would amend current law to give the FDIC certain 
authorities concerning troubled or failing depository 
institutions held by those new forms of holding companies.
    Under current law, if the FDIC suffers a loss from 
liquidating or selling a failed depository institution, the 
FDIC has the authority to obtain reimbursement from any insured 
depository institution within the same DIHC. Section 407 would 
expand the scope of the FDIC's reimbursement power to include 
all insured depository institutions controlled by the same 
company, not just those controlled by the same DIHC.
    The cost of this mandate would depend, among other things, 
on the probability of failure of the additional institutions 
subject to this authority and the probability that the FDIC 
would incur a loss as a result of those failures. The new 
authority would apply only to a handful of depository 
institutions. Based on information from the FDIC, CBO estimates 
that the cost of this mandate would not be substantial.
    In addition, section 408 would allow the FDIC to prohibit 
or limit any company that controls an insured depository from 
making ``golden parachute'' payments or indemnification 
payments to institution-affiliated parties of troubled or 
failing insured depositories. (Institution-affiliated parties 
include directors, officers, employees, and controlling 
shareholders. Institute-affiliated parties also include 
independent contractors such as accountants or lawyers who 
participate in violations of the law or undertake unsound 
business practices that may cause a financial loss to, or 
adverse effect on, the insured depository institution.)
    Based on information from the FDIC, CBO expects that only a 
few institutions would be covered by the new authority. In the 
event that the FDIC exercises this authority, CBO expects that 
the cost to institutions of withholding such payments would be 
administrative in nature and minimal, if any.
    Prohibitions on Convicted Individuals. Current law 
prohibits a person convicted of a crime involving dishonesty, a 
breach of trust, or money laundering from participating in the 
affairs of an insured depository institution without FDIC 
approval. The bill would extend that prohibition so that 
uninsured banks, bank holding companies and their subsidiaries, 
and savings and loan holding companies and their subsidiaries 
could not allow such persons to participate in their affairs 
without the prior written consent of their designated federal 
banking regulatory.
    Assuming that those institutions already screen potential 
directors, officers, and employees for criminal offenses, the 
incremental cost of complying with this mandate would be small.
    Reporting Requirements for Federal Home Loan Banks. Section 
616 would require the Federal Home Loan Banks to report the 
compensation and expenses paid to directors in their annual 
reports. CBO expects that the cost of complying with this 
mandate would be minimal.
    Estimate prepared by: Federal costs: Kathleen Gramp and 
Jenny Lin; Federal revenues: Pam Greene; Impact of state, 
local, and tribal governments: Victoria Heid Hall; Impact on 
the private sector: Judith Ruud.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis; G. Thomas Woodward, Assistant 
Director for Tax Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
defense and general welfare of the United States), and clause 3 
(relating to the power to regulate foreign and interstate 
commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             Section-by-Section Analysis of the Legislation


Section 1. Short Title; Table of Contents

    This section establishes the short title of the bill, the 
``Financial Services Regulatory Relief Act of 2003,'' and 
provides a table of contents.

                   title i--national bank provisions


Section 101. National bank directors

    Currently, all directors of a national bank must own shares 
of the bank having an aggregate par value of at least $1,000, 
or an equivalent interest in the bank holding company that 
controls the bank. This requirement creates difficulties for 
some national banks that operate or wish to operate in 
subchapter S form. It effectively requires that all directors 
be shareholders, thus making it difficult or impossible for a 
bank to comply with the 75-shareholder limit that defines 
eligibility for the benefit of subchapter S tax treatment, 
which avoids double tax on the bank's earnings. This section 
permits the Office of the Comptroller of the Currency (OCC) to 
allow the use of a debt instrument that is subordinated to all 
other liabilities of the bank to satisfy the qualifying shares 
requirement by directors of banks operating in subchapter S 
status. Such a subordinated debt instrument would be closely 
equivalent to an equity capital interest, since the directors 
could only be repaid if all other claims of depositors and 
nondeposit creditors of the bank (including the FDIC) were 
first paid in full, and would therefore ensure that directors 
retain their personal stake in the financial soundness of the 
bank.

Section 102. Voting in shareholder elections

    Current law imposes mandatory cumulative voting 
requirements on all national banks. This section permits a 
national bank to provide in its articles of association which 
method of electing its directors best suits its business goals 
and needs. A national bank would choose whether to allow 
cumulative voting.

Section 103. Simplifying dividend calculations for national banks

    This section provides more flexibility than current law to 
a national bank to pay dividends as deemed appropriate by its 
board of directors. The current requirement that OCC's approval 
is necessary if the dividend exceeds a certain amount is 
retained.

Section 104. Repeal of obsolete limitation on removal authority of the 
        Comptroller of the Currency

    Under current law, all of the Federal banking agencies, 
except for the OCC, may remove a person who engages in certain 
improper conduct from the banking business. The determination 
of whether to remove an individual from a national bank is made 
by the Federal Reserve Board. This section would give OCC the 
same removal authority as the other banking agencies.

Section 105. Repeal of intrastate branch capital requirements

    Currently, a national bank, in order to establish an 
intrastate branch in a State, must meet the capital 
requirements imposed by the State on State banks seeking to 
establish intrastate branches. This section eliminates this 
requirement. Branching restrictions are already imposed under 
other provisions of law to limit the operations of a bank if it 
is in troubled condition.

Section 106. Clarification of waiver of publication requirements for 
        bank merger notices

    This section clarifies that the requirement to publish a 
notice for shareholders that applies in the case of a 
consolidation or merger of a national bank with another bank 
located within the same State may be waived by OCC in emergency 
situations or by unanimous vote of the shareholders.

Section 107. Capital equivalency deposits for Federal branches and 
        agencies of foreign banks

    Under current law, Federal branches and agencies of foreign 
banks are required to hold capital equivalency deposits (CEDs) 
in Federal Reserve member banks, equal to at least 5 percent of 
the liabilities of the branch or agency. State branches and 
agencies are subject to similar asset pledge requirements, but 
State banking commissioners often have flexibility to adjust 
the requirement to take into account the circumstances of the 
institution involved. This section would give the Comptroller 
of the Currency similar discretion to adjust the amount of the 
CED; however, OCC may not permit a foreign bank to keep assets 
on deposit in an amount that is less than the amount required 
for a State branch or agency of a foreign bank under the laws 
and regulations of the State in which the Federal branch or 
agency is located.

Section 108. Equal treatment for Federal agencies of foreign banks

    This section provides that Federal agencies of foreign 
banks have the same right as State agencies of foreign banks to 
receive limited foreign source uninsured deposits (deposits 
that are not from U.S. citizens or residents).

Section 109. Maintenance of a Federal branch and a Federal agency in 
        the same State

    Current law prohibits a foreign bank from operating both a 
Federal branch and a Federal agency in the same State. This 
section permits a foreign bank to maintain both a branch and an 
agency in those States that do not prohibit a foreign bank from 
maintaining both.

Section 110. Business organization flexibility for national banks

    This section allows banks to choose among different forms 
of business organizations, as permitted by the Comptroller of 
the Currency. For example, if the Comptroller should permit a 
national bank to organize as a limited liability company (LLC), 
the bank may be able to take advantage of the pass-through tax 
treatment for LLCs under certain tax laws and eliminate double 
taxation, under which the same earnings are taxed both at the 
corporate level as income and at the shareholder level as 
dividends. The LLC structure may be particularly attractive for 
community banks and could provide a more flexible structure 
than a Subchapter S corporation.

Section 111. Clarification of the main place of business of a national 
        bank

    This section clarifies where a national bank's principal 
place of business is located for corporate status purposes.

                title ii--savings association provisions


Section 201. Parity for savings associations under the Securities 
        Exchange Act of 1934 and the Investment Advisers Act of 1940

    This section gives thrift institutions parity with banks 
with respect to investment adviser and broker-dealer 
registration requirements.

Section 202. Investments by Federal savings associations authorized to 
        promote the public welfare

    This section gives Federal thrift institutions the same 
authority national banks and State member banks have to make 
investments primarily designed to promote the public welfare, 
directly or indirectly by investing in an entity primarily 
engaged in making public welfare investments. The provision 
establishes an aggregate limit on investments of 5 percent of a 
thrift's capital and surplus, unless the Office of Thrift 
Supervision (OTS) determines the thrift is adequately 
capitalized and that a higher amount poses no significant risk 
to the deposit insurance fund. In no case may the aggregate 
investments by a thrift exceed 10 percent of its capital and 
surplus. Thrifts may use this new community development 
investment authority without regard to the prohibition against 
acquiring or retaining corporate debt that is not of investment 
grade; no similar limit applies to banks.

Section 203. Mergers and consolidations of Federal savings associations 
        with non-depository institution affiliates

    This section gives Federal thrift institutions the 
authority to merge with one or more of their non-thrift 
affiliates, equivalent to recently-enacted authority for 
national banks. Thrifts would continue to have the authority to 
merge with other depository institutions, but could not merge 
with other kinds of entities.

Section 204. Repeal of statutory dividend notice requirement for 
        savings association subsidiaries of savings and loan holding 
        companies

    This section eliminates the requirement that any thrift 
institution owned by a savings and loan holding company must 
notify OTS 30 days before paying a dividend. Instead, OTS would 
have the discretion to require prior notice and could establish 
reasonable conditions on the payment of dividends.

Section 205. Modernizing statutory authority for trust ownership of 
        savings associations

    This section conforms the treatment of trusts that own 
thrift institutions to the treatment of trusts that own banks.

Section 206. Repeal of overlapping rules governing purchased mortgage 
        servicing rights

    This section repeals the overlapping, obsolete requirements 
governing purchased mortgage servicing rights (PMSRs) in the 
Home Owners' Loan Act (HOLA). Section 475 of the Federal 
Deposit Insurance Corporation Improvement Act of 1991 will 
continue to govern the valuation of PMSRs for savings 
associations and other depository institutions. Section 475 
already permits overriding the valuation limit, and repealing 
this provision will simply eliminate potential confusion 
without sacrificing safety and soundness objectives.

Section 207. Restatement of authority for Federal savings associations 
        to invest in small business investment companies

    This section restates recently-enacted statutory authority 
for Federal savings associations to invest in small business 
investment companies (SBICs) and entities established to invest 
solely in SBICs. Savings associations are subject to an 
aggregate 5 percent of capital limit on such investments.

Section 208. Removal of limitation on investments in auto loans

    Federal savings associations are currently limited in 
making automobile loans to 35 percent of total assets. This 
asset limitation is removed by this section.

Section 209. Selling and offering of deposit products

    This section exempts insurance agents, who represent a 
Federal savings association in selling FDIC-insured certificate 
of deposit products, from registering as securities law agents 
under State law. Safeguards are provided, so that agents may 
not accept deposits or make withdrawals for any customer of the 
savings association, may not sell CDs for any entity that is 
not subject to Federal or State regulation or sell CDs that are 
not Federally insured, and may not create a secondary market in 
CDs or otherwise add features to CDs independent of the savings 
association.

Section 210. Funeral- and cemetery-related fiduciary services

    This section authorizes a funeral director or cemetery 
operator to engage a Federal savings association to act in any 
fiduciary capacity, including holding funds deposited in trust 
or escrow by the funeral director or cemetery operator.

Section 211. Repeal of qualified thrift lender requirement with respect 
        to out-of-State branches

    Under current law, Federal savings associations must meet 
the qualified thrift lender (QTL) test both as an entity 
operating regionally or nationally and in each State where 
there are branches. This section eliminates the requirement to 
meet the QTL test on a State-by-State basis, only requiring 
savings associations to meet the test on the basis of entire 
multi-State operations.

Section 212. Small business and other commercial loans

    For Federal savings associations, this section eliminates 
the lending limit on small business loans and increases the 
lending limit on other business loans from 10 percent to 20 
percent of assets.

Section 213. Clarifying citizenship of Federal savings associations for 
        Federal court jurisdiction

    This section treats Federal savings associations for 
corporate purposes as being located in the State in which the 
thrift has its home office.

Section 214. Clarification of applicability of certain procedural 
        doctrines

    This section is intended to ensure that all institutions 
having claims for relief under the Supreme Court's 1996 
decision in United States v. Winstar, 518 U.S. 839 (1996) which 
held that the government breached its contracts with 
institutions that purchased failing thrifts at the government's 
request when it implemented the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (FIRREA), are treated 
equally in seeking to have those claims adjudicated in the 
Federal courts.

                   title iii--credit union provisions


Section 301. Privately insured credit unions authorized to become 
        members of a Federal Home Loan Bank

    This section permits privately insured credit unions to 
apply to become members of a Federal Home Loan Bank. Currently, 
only Federally insured credit unions may become members. The 
State regulator of a privately insured credit union applying 
for Federal Home Loan Bank membership would have to certify 
that the credit union meets the eligibility requirements for 
Federal deposit insurance before it would qualify for 
membership in the Federal Home Loan Bank system. The section 
clarifies that the Federal Home Loan Bank System's superlien--
which gives the System priority in the event that one of its 
borrowers becomes insolvent--remains in effect notwithstanding 
any conflicting State law. The section requires that the 
statutorily mandated annual audit of any entity that provides 
private deposit insurance to credit unions must be submitted to 
the Federal Housing Finance Board and the National Credit Union 
Administration.

Section 302. Leases of land on Federal facilities for credit unions

    This section gives military and civilian authorities 
responsible for buildings erected on Federal property the 
discretion to extend to credit unions that finance the 
construction of credit union facilities on Federal land real 
estate leases at minimal charge.

Section 303. Investments in securities by Federal credit unions

    The Federal Credit Union Act limits the investment 
authority of Federal credit unions to loans, government 
securities, deposits in other financial institutions, and 
certain other limited investments. This section provides 
additional investment authority to purchase for the credit 
union's own account certain investment securities of investment 
grade. The total amount of the investment securities of any one 
obligor or maker could not exceed 10 percent of the credit 
union's net worth.

Section 304. Increase in general 12-year limitation of term of Federal 
        credit union loans to 15 years

    Currently, Federal credit unions are authorized to make 
loans to members, to other credit unions, and to credit union 
service organizations. The Federal Credit Union Act imposes 
various restrictions on these authorities, including a 12-year 
maturity limit that is subject to limited exceptions. This 
section would allow loan maturities up to 15 years, or longer 
terms as permitted by the National Credit Union Administration 
(NCUA) Board.

Section 305. Increase in 1 percent investment limit in credit union 
        service organizations

    The Federal Credit Union Act authorizes Federal credit 
unions to invest in organizations providing services to credit 
unions and credit union members. An individual Federal credit 
union, however, may invest in aggregate no more than one 
percent of its shares and undivided earnings in these 
organizations, commonly known as credit union service 
organizations or CUSOs. This section raises the limit to three 
percent.

Section 306. Member business loan exclusion for loans to non-profit 
        religious organizations

    This section excludes loans or loan participations by 
Federal credit unions to non-profit religious organizations 
from the member business loan limit contained in the Federal 
Credit Union Act.

Section 307. Check cashing and money transfer services offered within 
        the field of membership

    Federal credit unions are currently authorized to provide 
check cashing and money transfer services to members. This 
section allows Federal credit unions to provide those services 
to anyone eligible to become a member.

Section 308. Voluntary mergers involving multiple common bond credit 
        unions

    In voluntary mergers of multiple bond credit unions, NCUA 
has determined that it must consider not transferring employee 
groups over 3,000 from the merging credit union and requiring 
such groups to spin off and form separate credit unions. This 
section provides that this numerical limitation does not apply 
in voluntary mergers.

Section 309. Conversions involving common bond credit unions

    This section requires that when a single or multiple common 
bond credit union voluntarily merges with or converts to a 
community credit union, NCUA must establish the criteria 
whereby it may determine that a member group or other portion 
of a credit union's existing membership, located outside the 
community, can be satisfactorily served and remain within the 
credit union's field of membership.

Section 310. Credit union governance

    This section gives Federal credit union boards flexibility 
to expel a member who is disruptive to the operations of the 
credit union, including harassing personnel and creating safety 
concerns, without the need for a two-thirds vote of the 
membership present at a special meeting as required by current 
law. Federal credit unions are authorized to limit the length 
of service of their boards of directors to ensure broader 
representation from the membership. Finally, this section 
allows Federal credit unions to reimburse board of director 
volunteers for wages they would otherwise forfeit by 
participating in credit union affairs.

Section 311. Providing the National Credit Union Administration with 
        greater flexibility in responding to market conditions

    Under this section, in determining whether to lift the 
usury ceiling for Federal credit unions, NCUA will consider 
rising interest rates or whether prevailing interest rate 
levels threaten the safety and soundness of individual credit 
unions.

Section 312. Exemption from pre-merger notification requirement of the 
        Clayton Act

    This section gives Federally insured credit unions the same 
exemption as banks and thrift institutions from pre-merger 
notification requirements and fees imposed by Federal antitrust 
law.

Section 313. Treatment of credit unions as depository institutions 
        under securities laws

    This section gives Federally insured credit unions 
exceptions, similar to those provided banks, from broker-dealer 
and investment adviser registration requirements.

              title iv--depository institution provisions


Section 401. Easing restrictions on interstate branching and mergers

    This section removes the prohibition in current law on 
national and State banks expanding through de novo interstate 
branching. Currently, banks may expand in this fashion only if 
a State's law expressly permits interstate branching. This 
section clarifies that a State member bank may establish a de 
novo interstate branch under the same terms and conditions 
applicable to national banks. The authority for a State to 
prohibit an out-of-State bank or bank holding company from 
acquiring, through merger or acquisition, an in-State bank that 
has not existed for at least five years is eliminated. Insured 
banks are authorized to acquire by merger or consolidation 
another insured depository institution (including a savings 
association) or an uninsured trust company that has a different 
home State than the acquiring insured bank.
    This section permits a State bank supervisor to authorize 
State trust companies it supervises to act in a fiduciary 
capacity on an interstate basis either with or without 
interstate offices. Those activities must not be in 
contravention of State law, but will not be deemed to 
contravene State law to the extent that a host State grants to 
its trust institutions the fiduciary powers sought to be 
exercised on an interstate basis. This authority parallels 
existing authority of national banks and national trust 
companies under the National Bank Act.

Section 402. Statute of limitations for judicial review of appointment 
        of a receiver for depository institutions

    This section provides greater consistency in Federal law 
governing how much time an insured depository institution has 
to challenge the appointment of a receiver.

Section 403. Reporting requirements relating to insider lending

    This section eliminates certain reporting requirements 
currently imposed on banks and their executive officers and 
principal shareholders related to lending by banks to insiders. 
This would not alter restrictions on the ability of banks to 
make insider loans or limit the ability of Federal banking 
agencies to take enforcement action against a bank or its 
insiders for violation of lending limits.

Section 404. Amendment to provide an inflation adjustment for the small 
        depository institution exception under the Depository 
        Institution Management Interlocks Act

    The Depository Institutions Management Interlocks Act 
prohibits depository organizations from having interlocking 
management officials, if the depositories are located or have 
an affiliate located in the same metropolitan statistical area, 
primary metropolitan statistical area, or consolidated 
metropolitan statistical area. This statutory prohibition does 
not apply to depository organizations that have less than $20 
million in assets. This section increases the exemption limit 
to $100 million in assets.

Section 405. Enhancing the safety and soundness of insured depository 
        institutions

    This section provides that the Federal banking agencies may 
enforce conditions imposed in writing and written agreements, 
in which an institution-affiliated party or controlling 
shareholder agrees to provide capital to the depository 
institution. Transfers to depository institutions to bolster 
their capital will not be reversed if the institution-
affiliated party or controlling shareholder later becomes 
bankrupt. This section also clarifies existing FDIC authority 
as receiver or conservator to enforce written conditions or 
agreements.

Section 406. Investments by insured savings associations in bank 
        service companies authorized

    Bank service companies allow one or more banks to establish 
a subsidiary or participate in a joint venture with other banks 
to provide banking or related services. Activities are limited 
to services for depository institutions, such as check sorting 
and posting and bookkeeping. This section permits thrifts to 
invest in a bank service company on the same basis as banks, 
but otherwise preserves current structure, terms, limits, and 
conditions. It permits banks to invest in thrift service 
companies as well.

Section 407. Cross guarantee authority

    This section clarifies the scope of cross guarantee 
liability to include all insured depository institutions 
commonly controlled by the same company. The assessment of 
liability by the FDIC would continue to be only against the 
insured depository institution commonly controlled with the 
defaulting institution.

Section 408. Golden parachute authority and nonbank holding companies

    This section clarifies that the FDIC could prohibit or 
limit a nonbank holding company's golden parachute payment or 
indemnification payment to institution-affiliated parties.

Section 409. Amendments relating to change in bank control

    The Change in Bank Control Act authorizes Federal banking 
agencies to disapprove a change-in-control notice within a set 
period of time. Change-in-control notices are subject to strict 
time periods for disapproval and extensions of time beyond 45 
days are available only in limited circumstances. This section 
allows Federal banking agencies to extend the time for review 
of the notice to consider business plan information, which is 
already collected, and to use that information in determining 
whether to disapprove the notice.

         title v--depository institution affiliates provisions


Section 501. Clarification of cross marketing provision

    The cross marketing provisions of the Gramm-Leach-Bliley 
Act were enacted to provide a safeguard against the mixing of 
banking and commerce. Cross marketing could lead to the 
integration of a portfolio company into a bank's operations, 
making the portfolio company a de facto division of a bank. If, 
however, the portfolio company was not under the control of the 
financial holding company, it could not function as a division 
of a subsidiary bank. This section provides that the cross 
marketing prohibition would only apply to entities controlled 
by a financial holding company. ``Control'' for this purpose 
would be determined pursuant to the definitional provisions of 
section 2 of the Bank Holding Company Act. Cross-marketing 
arrangements between depository institutions and non-financial 
companies would be authorized when the shares of those 
companies are owned or controlled by a securities firm or its 
affiliate.

Section 502. Amendment to provide the Federal Reserve Board with 
        discretion concerning the imputation of control of shares of a 
        company by trustees

    Currently, any shares held by a trust for the benefit of a 
bank holding company, or its shareholders, members, or 
employees are deemed to be controlled by the company. This is 
intended to prevent a bank holding company from evading 
restrictions on the acquisition of shares of banks and 
nonbanking companies by having such shares acquired by a trust 
controlled by the company, either directly or through its 
management, shareholders, or employees. This section allows the 
Federal Reserve Board to waive this so-called attribution rule 
in circumstances where the Board determines such action is 
appropriate.

Section 503. Eliminating geographic limits on thrift service companies

    This section permits Federal thrift institutions to invest 
in service companies without regard to geographic restrictions.

Section 504. Clarification of scope of applicable rate provision

    Currently, an insured depository institution chartered with 
a home office in a State that has a constitutional usury 
ceiling may charge an interest rate on loans equal to the rate 
charged by national banks or Federal savings associations 
located in the State. This section permits finance companies 
located in these States to charge the same rates as national 
and State banks.

                  title vi--banking agency provisions


Section 601. Waiver of examination schedule in order to allocate 
        examiner resources

    This section permits the appropriate Federal banking 
agencies to adjust the examination cycle of insured depository 
institutions to ensure that examiner resources are allocated in 
a manner that provides for the safety and soundness of insured 
depository institutions. This section permits the agencies, 
when necessary for safety and soundness purposes, to adjust 
their mandatory examination schedules to use their resources in 
the most efficient manner.

Section 602. Interagency data sharing

    The Gramm-Leach-Bliley Act gave the Federal Reserve Board 
authority to provide confidential supervisory information 
concerning an examined entity to another supervisory authority, 
an officer, director, or receiver of the examined entity, or 
any other person determined by the supervisory agency to be 
appropriate. This section gives the same authority to all 
Federal banking agencies.

Section 603. Penalty for unauthorized participation by convicted 
        individual

    Currently, a person convicted of a crime involving 
dishonesty or a breach of trust may not participate in the 
affairs of an insured depository institution without FDIC 
approval. Certain special purpose banks and foreign banking 
institutions operate without insured status (e.g., trust banks 
and foreign branches). This section extends the prohibition to 
include uninsured national and State member banks and uninsured 
offices of foreign banks.

Section 604. Amendment permitting the destruction of old records of a 
        depository institution by the FDIC after the appointment of the 
        FDIC as receiver

    This section modifies the requirement for retention of old 
records of a failed insured depository institution when a 
receiver is appointed. The FDIC is authorized to destroy 
records that are ten or more years old at the time of its 
appointment as receiver, unless directed not to do so by a 
court or a government agency or prohibited by law.

Section 605. Modernization of recordkeeping requirement

    This section allows Federal banking agencies to rely upon 
records preserved electronically, such as optically imaged or 
computer scanned images. Currently, agencies are permitted to 
use photographic records in place of original records for all 
purposes, including introduction into evidence in courts. This 
section gives agencies the flexibility to rely on appropriate 
new technology, while maintaining the requirement that agencies 
prescribe the manner of the preservation of records, to ensure 
their reliability, regardless of the technology used.

Section 606. Clarification of extent of suspension, removal, and 
        prohibition authority of Federal banking agencies in cases of 
        certain crimes by institution-affiliated parties

    This section clarifies that the appropriate Federal banking 
agency may suspend or prohibit individuals charged with certain 
crimes from participation in the affairs of any depository 
institution and not only the insured depository with which the 
institution affiliated party is or was associated. The agency 
may also use the prohibition authority even when the 
institution with which the individuals were associated ceases 
to exist.

Section 607. Streamlining depository institution merger application 
        requirements

    This section streamlines application requirements by 
eliminating the requirement that each Federal banking agency 
request a competitive factors report from the other three 
Federal banking agencies as well as from the Attorney General. 
The amendment decreases the number to two, with the Attorney 
General continuing to be required to consider the competitive 
factors involved in each merger transaction and the FDIC, as 
insurer, receiving notice even where it is not the appropriate 
banking agency for the particular merger.

Section 608. Inclusion of Director of the Office of Thrift Supervision 
        in list of banking agencies regarding insurance customer 
        protection regulations

    The four Federal banking agencies are required by current 
law to publish insurance customer protection regulations. OTS 
has the same responsibilities in this connection as FDIC, OCC, 
and the Federal Reserve Board, with one exception, i.e., 
current law provides for preemption of State law in certain 
circumstances, if the banking agencies, except for OTS, jointly 
determine the Federal protections are greater than comparable 
State protections. This section adds OTS to the list of banking 
agencies responsible for making the preemption determination.

Section 609. Shortening of post-approval antitrust review waiting 
        period for bank acquisitions and mergers with the agreement of 
        the Attorney General

    Currently, banks and bank holding companies must delay 
consummating any bank acquisition or merger for at least 15 
days after the transaction has been approved by a Federal 
banking agency. This waiting period is designed to allow the 
Attorney General to challenge the transaction, if the Attorney 
General believes the transaction would significantly harm 
competition. This section would allow the banking agency to 
reduce the waiting period to 5 days, only in cases where the 
Attorney General has agreed in advance that the acquisition or 
merger would not have serious anticompetitive effects. In such 
circumstances, a longer waiting period is not needed to allow 
the Attorney General to review the transaction and merely 
delays the ability of the banking organizations to achieve 
their business objectives. This section does not shorten the 
time period for private parties to challenge the banking 
agency's approval of the transaction under the Community 
Reinvestment Act or banking laws.

Section 610. Protection of confidential information received by Federal 
        banking regulators from foreign banking supervisors

    This section is intended to facilitate the sharing of 
information by ensuring that Federal banking agencies may hold 
confidential any nonpublic supervisory information obtained 
from a foreign regulatory authority. This would not affect the 
ability of Congress or a defendant in an action instituted by a 
banking agency to obtain such information.

Section 611. Prohibition on the participation by convicted individual

    This section would prohibit a person convicted of a 
criminal offense involving dishonesty, a breach of trust, or 
money laundering from participating in the affairs of a bank 
holding company or any of its nonbank subsidiaries or an Edge 
or Agreement Corporation, without the consent of the Federal 
Reserve Board, and from participating in the affairs of a 
savings and loan holding company or any of its nonthrift 
subsidiaries, without the consent of the Office of Thrift 
Supervision.

Section 612. Clarification that notice after separation from service 
        may be made by an order

    The Federal Deposit Insurance Act ensures that Federal 
banking agencies may take enforcement action against a person 
for conduct that occurred during his or her affiliation with a 
banking organization, even if the person resigns. Because such 
enforcement actions may take the form of both notices and 
orders, this section clarifies that those protections apply 
regardless of how the enforcement action is styled.

Section 613. Examiners of financial institutions

    This section authorizes limited waivers from the 
prohibition on examiners accepting credit from a bank being 
examined, if the examiner fully discloses the nature and 
circumstances of the loan and receives a determination from the 
examiner's employer that the loan would not affect the 
integrity of the examination. Examiners are permitted to 
receive credit cards on terms and conditions no more favorable 
to the examiner than those generally applicable to other 
consumers.

Section 614. Parity in standards for institution-affiliated parties

    In recent years, bank regulators have seen an increase in 
audit and internal control deficiencies at many insured 
institutions, some of which have caused operating losses and 
failures. Currently, independent contractors, such as 
accountants, attorneys, and appraisers, are treated more 
leniently from an enforcement standpoint than directors, 
officers, and others. To be within its enforcement 
jurisdiction, a bank regulator must first establish that an 
independent contractor is an ``institution-affiliated party.'' 
This section holds independent contractors to a standard closer 
to other institution-affiliated parties, by removing a 
statutory requirement that the Federal banking agencies 
demonstrate that an independent contractor acted ``knowingly or 
recklessly'' when participating in violations of law or 
regulation, breaches of fiduciary duty, or unsafe or unsound 
practices.

Section 615. Enforcement against misrepresentations regarding FDIC 
        deposit insurance coverage

    This section authorizes the FDIC to take enforcement 
actions and impose civil monetary penalties of up to $1 million 
per day on any individual, corporation, or other entity for 
misrepresentation of FDIC insurance coverage.

Section 616. Compensation of Federal Home Loan Bank directors

    Currently, a limit is placed on the compensation of 
directors of Federal Home Loan Bank boards. This section allows 
each Federal Home Loan Bank to pay its board members reasonable 
compensation for the time required of them and necessary 
expenses.

Section 617. Extension of terms of Federal Home Loan Bank directors

    Currently, the term of each Federal Home Loan Bank 
director, whether elected or appointed, is three years. This 
section extends the term to four years and provides that terms 
are staggered with one-quarter of the terms expiring each year. 
The extension would apply only prospectively, not to the terms 
of existing directors.

Section 618. Biennial reports on the status of agency employment of 
        minorities and women

    This section requires that, before December 31, 2003 and 
the end of each two-year period thereafter, each of the Federal 
banking agencies submit a report to Congress on the status of 
the employment by the agency of minority individuals and women.

Section 619. Coordination of State examination authority

    This section is intended to improve coordination of 
supervision of multi-State State-chartered banks, by clarifying 
how State-chartered institutions with branches in more than one 
State are examined. While giving primacy of supervision to the 
chartering or home State, this section requires the home State 
bank supervisor to abide by any written cooperative agreement 
relating to coordination of exams and joint participation in 
exams, with the host State supervisor where an out-of-State 
branch is located. Unless otherwise permitted by a cooperative 
agreement, only the home State supervisor may charge State 
supervisory fees on the bank. If a branch in a host State 
resulted from certain interstate merger transactions, the host 
State supervisor may, with written notice to the home State 
supervisor, examine the branch for compliance with host State 
consumer protection laws. If permitted by a cooperative 
agreement or if the out-of-State bank is in a troubled 
condition, the host State supervisor may participate in the 
examination of the bank by the home State supervisor to 
ascertain that branch activities are not conducted in an unsafe 
or unsound manner. If the host State supervisor determines that 
a branch is violating host State consumer protection laws, the 
supervisor may, with written notice to the home State 
supervisor, undertake enforcement actions. This section does 
not limit in any way the authority of Federal banking 
regulators and does not affect State taxation authority.

              title vii--clerical and technical amendments


Section 701. Clerical amendments to Home Owners' Loan Act

    This section corrects the table of contents for the Home 
Owners' Loan Act (HOLA). The Financial Regulatory Relief and 
Economic Efficiency Act of 2000 repealed section 6 of HOLA but 
did not conform the table of contents. The section also 
corrects the captions for sections 4(a) and 5 of HOLA, to 
eliminate confusion over the scope of the sections.

Section 702. Technical corrections to the Federal Credit Union Act

    This section makes technical and conforming amendments to 
the Federal Credit Union Act.

Section 703. Other technical corrections

    This section makes technical corrections to title 18, 
United States Code.

Section 704. Repeal of obsolete provisions of the Bank Holding Company 
        Act of 1956

    This section eliminates certain outdated provisions of the 
Bank Holding Company Act that no longer have any effect.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

REVISED STATUTES OF THE UNITED STATES

           *       *       *       *       *       *       *


                          T I T L E  L X I I.

                            NATIONAL BANKS.

                         C H A P T E R  O N E.

                        ORGANIZATION AND POWERS.

Sec.
5133.  Formation of national banking associations.
     * * * * * * *
5136C.  Alternative business organization.

           *       *       *       *       *       *       *

  Sec. 5134. The persons uniting to form such an association 
shall, under their hands, make an organization certificate, 
which shall specifically state:
  First. The name assumed by such association; which name shall 
include the word ``national''.
  Second. [The place where its operations of discount and 
deposit are to be carried on] The place where the main office 
of the national bank is, or is to be, located, designating the 
State, Territory, or district, and the particular county and 
city, town, or village.

           *       *       *       *       *       *       *

  Sec. 5136. Upon duly making and filing articles of 
association and an organization certificate, the association 
shall become, as from the date of the execution of its 
organization certificate, a body corporate or other form of 
business organization provided under regulations prescribed by 
the Comptroller of the Currency under section 5136C, and as 
such, and in the name designated in the organization 
certificate, it shall have power--
  First. To adopt and use a corporate seal.

           *       *       *       *       *       *       *


SEC. 5136C. ALTERNATIVE BUSINESS ORGANIZATION.

  (a) In General.--The Comptroller of the Currency may 
prescribe regulations--
          (1) to permit a national bank to be organized other 
        than as a body corporate; and
          (2) to provide requirements for the organizational 
        characteristics of a national bank organized and 
        operating other than as a body corporate, consistent 
        with the safety and soundness of the national bank.
  (b) Equal Treatment.--Except as provided in regulations 
prescribed under subsection (a), a national bank that is 
operating other than as a body corporate shall have the same 
rights and privileges and shall be subject to the same duties, 
restrictions, penalties, liabilities, conditions, and 
limitations as a national bank that is organized as a body 
corporate.

           *       *       *       *       *       *       *

  Sec. 5144. In all elections of directors, each shareholder 
shall have the right to vote the number of shares owned by him 
for as many persons as there are directors to be elected, [or 
to cumulate] or, if so provided by the articles of association 
of the national bank, to cumulate such shares and give one 
candidate as many votes as the number of directors multiplied 
by the number of his shares shall equal[,] or to distribute 
them on the same principle among as many candidates as he shall 
think fit; and in deciding all other questions at meetings of 
shareholders, each shareholder shall be entitled to one vote on 
each share of stock held by him; except that (1) this shall not 
be construed as limiting the voting rights of holders of 
preferred stock under the terms and provisions of articles of 
association, or amendments thereto, adopted pursuant to the 
provisions of section 302(a) of the Emergency Banking and Bank 
Conservation Act, approved March 9, 1933, as amended; (2) in 
the election of directors, shares of its own stock held by a 
national bank as sole trustee, whether registered in its own 
name as such trustee or in the name of its nominee, shall not 
be voted by the registered owner unless under the terms of the 
trust the manner in which such shares shall be voted may be 
determined by a donor or beneficiary of the trust and unless 
such donor or beneficiary actually directs how such shares 
shall be voted; and (3) shares of its own stock held by a 
national bank and one or more persons as trustees may be voted 
by such other person or persons, as trustees, in the same 
manner as if he or they were the sole trustee. Shareholders may 
vote by proxies duly authorized in writing; but no officer, 
clerk, teller, or bookkeeper of such bank shall act as proxy; 
and no shareholder whose liability is past due and unpaid shall 
be allowed to vote. Whenever shares of stock cannot be voted by 
reason of being held by the bank as sole trustee such shares 
shall be excluded in determining whether matters voted upon by 
the shareholders were adopted by the requisite percentage of 
shares. The Comptroller of the Currency may prescribe such 
regulations to carry out the purposes of this section as the 
Comptroller determines to be appropriate.

           *       *       *       *       *       *       *

  [Sec. 5146. Every director must during]

SEC. 5146. REQUIREMENTS FOR BANK DIRECTORS.

  (a) Residency Requirements.--Every director of a national 
bank shall, during his whole term of service, be a citizen of 
the United States, and at least a majority of the directors 
must have resided in the State, Territory, or District in which 
the association is located, or within one hundred miles of the 
location of the office of the association, for at least one 
year immediately preceding their election, and must be 
residents of such State or within a one-hundred-mile territory 
of the location of the association during their continuance in 
office, except that the Comptroller may, in the discretion of 
the Comptroller, waive the requirement of residency, and waive 
the requirement of citizenship in the case of not more than a 
minority of the [total number of directors. Every director must 
own in his or her own right] total number of directors.
  (b) Investment Requirement.--
          (1) In general.--Every director of a national bank 
        shall own, in his or her own right, either shares of 
        the capital stock of the association of which he or she 
        is a director the aggregate par value of which is not 
        less than $1,000, or an equivalent interest, as 
        determined by the Comptroller of the Currency, in any 
        company which has control over such association within 
        the meaning of section 2 of the Bank Holding Company 
        Act of 1956 (12 U.S.C. 1841). If the capital of the 
        bank does not exceed $25,000, every director must own 
        in his or her own right either shares of such capital 
        stock the aggregate par value of which is not less than 
        $500, or an equivalent interest, as determined by the 
        Comptroller of the Currency, in any company which has 
        control over such association within the meaning of 
        section 2 of the Bank Holding Company Act of 1956 (12 
        U.S.C. 1841). Any director who ceases to be the owner 
        of the required number of shares of the stock, or who 
        becomes in any other manner disqualified, shall thereby 
        vacate his place.
          (2) Exception for subordinated debt in certain 
        cases.--In lieu of the requirements of paragraph (1) 
        relating to the ownership of capital stock in the 
        national bank, the Comptroller of the Currency may, by 
        regulation or order, permit an individual to serve as a 
        director of a national bank that has elected, or 
        notifies the Comptroller of the bank's intention to 
        elect, to operate as a S corporation pursuant to 
        section 1362(a) of the Internal Revenue Code of 1986, 
        if that individual holds debt of at least $1,000 issued 
        by the national bank that is subordinated to the 
        interests of depositors and other general creditors of 
        the national bank.

           *       *       *       *       *       *       *

  Sec. 5155. The conditions upon which a national banking 
association may retain or establish and operate a branch or 
branches are the following:
  (a)  * * *

           *       *       *       *       *       *       *

  (c) A national banking association may, with the approval of 
the Comptroller of the Currency, establish and operate new 
branches: (1) Within the limits of the city, town or village in 
which said association is situated, if such establishment and 
operation are at the time expressly authorized to State banks 
by the law of the State in question; and (2) at any point 
within the State in which said association is situated, if such 
establishment and operation are at the time authorized to State 
banks by the statute law of the State in question by language 
specifically granting such authority affirmatively and not 
merely by implication or recognition, and subject to the 
restrictions as to location imposed by the law of the State on 
State banks. In any State in which State banks are permitted by 
statute law to maintain branches within county or greater 
limits, if no bank is located and doing business in the place 
where the proposed agency is to be located, any national 
banking association situated in such State may, with the 
approval of the Comptroller of the Currency, establish and 
operate[, without regard to the capital requirements of this 
section,] a seasonal agency in any resort community within the 
limits of the county in which the main office of such 
association is located, for the purpose of receiving and paying 
out deposits, issuing and cashing checks and drafts, and doing 
business incident thereto: Provided, That any permit issued 
under this sentence shall be revoked upon the opening of a 
State or national bank in such community. [Except as provided 
in the immediately preceding sentence, no such association 
shall establish a branch outside of the city, town, or village 
in which it is situated unless it has a combined capital stock 
and surplus equal to the combined amount of capital stock and 
surplus, if any, required by the law of the State in which such 
association is situated for the establishment of such branches 
by State banks, or, if the law of such State requires only a 
minimum capital stock for the establishment of such branches by 
State banks, unless such association has not less than an equal 
amount of capital stock.]

           *       *       *       *       *       *       *

  (g) [State ``Opt-In'' Election To Permit] Interstate 
Branching Through De Novo Branches.--
          (1) In general.--Subject to paragraph (2), the 
        Comptroller of the Currency may approve an application 
        by a national bank to establish and operate a de novo 
        branch in a State (other than the bank's home State) in 
        which the bank does not [maintain a branch if--
                  [(A) there is in effect in the host State a 
                law that--
                          [(i) applies equally to all banks; 
                        and
                          [(ii) expressly permits all out-of-
                        State banks to establish de novo 
                        branches in such State; and
                  [(B) the conditions established in, or made 
                applicable to this paragraph by, paragraph (2) 
                are met.] maintain a branch.

           *       *       *       *       *       *       *


                       C H A P T E R  T H R E E.

                  REGULATION OF THE BANKING BUSINESS.

Sec.
5190.  Place of business of banking associations.
     * * * * * * *
[5199.  Dividends.]
5199.  National bank dividends.

           *       *       *       *       *       *       *

  Sec. 5190. The general business of each national banking 
association shall be transacted in [the place specified in its 
organization certificate] the main office of the national bank 
and in the branch or branches, if any, established or 
maintained by it in accordance with the provisions of section 
5155 of the Revised Statutes, as amended by this Act.

           *       *       *       *       *       *       *

  [Sec. 5199. (a) The directors of any national banking 
association may, quarterly, semiannually or annually, declare a 
dividend of so much of the undivided profits of the 
association, subject to the limitations in subsection (b), as 
they shall judge expedient, except that until the surplus fund 
of such association shall equal its common capital, no 
dividends shall be declared unless there has been carried to 
the surplus fund not less than one-tenth part of the 
association's net income of the preceding half year in the case 
of quarterly or semiannual dividends, or not less than one-
tenth part of its net income of the preceding two consecutive 
half-year periods in the case of annual dividends: Provided, 
That for the purposes of this section, any amounts paid into a 
fund for the retirement of any preferred stock of any such 
association out of its net income for such period or periods 
shall be deemed to be additions to its surplus fund if, upon 
the retirement of such preferred stock, the amounts so paid 
into such retirement fund may then properly be carried to 
surplus. In any such case the association shall be obligated to 
transfer to surplus the amounts so paid into such retirement 
fund on account of the preferred stock as such stock is 
retired.
  [(b) The approval of the Comptroller of the Currency shall be 
required if the total of all dividends declared by such 
association in any calendar year shall exceed the total of its 
net income of that year combined with its retained net income 
of the preceding two years, less any required transfers to 
surplus or a fund for the retirement of any preferred stock.]

SEC. 5199. NATIONAL BANK DIVIDENDS.

  (a) In General.--Subject to subsection (b), the directors of 
any national bank may declare a dividend of so much of the 
undivided profits of the bank as the directors judge to be 
expedient.
  (b) Approval Required Under Certain Circumstances.--A 
national bank may not declare and pay dividends in any year in 
excess of an amount equal to the sum of the total of the net 
income of the bank for that year and the retained net income of 
the bank in the preceding two years, minus any transfers 
required by the Comptroller of the Currency (including any 
transfers required to be made to a fund for the retirement of 
any preferred stock), unless the Comptroller of the Currency 
approves the declaration and payment of dividends in excess of 
such amount.

           *       *       *       *       *       *       *


                        C H A P T E R  F O U R.

DISSOLUTION AND RECEIVERSHIP.

           *       *       *       *       *       *       *


  Sec. 5239. (a) * * *

           *       *       *       *       *       *       *

  [(d)] (e) Authority.--The Comptroller of the Currency may act 
in the Comptroller's own name and through the Comptroller's own 
attorneys in enforcing any provision of this title, regulations 
thereunder, or any other law or regulation, or in any action, 
suit, or proceeding to which the Comptroller of the Currency is 
a party.

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL DEPOSIT INSURANCE ACT

           *       *       *       *       *       *       *


  Sec. 3. As used in this Act--
  (a) * * *

           *       *       *       *       *       *       *

  (u) Institution-Affiliated Party.--The term ``institution-
affiliated party'' means--
          (1) * * *

           *       *       *       *       *       *       *

          (4) any independent contractor (including any 
        attorney, appraiser, or accountant) who [knowingly or 
        recklessly] participates in--
                  (A) * * *

           *       *       *       *       *       *       *


SEC. 5. DEPOSIT INSURANCE.

  (a)  * * *

           *       *       *       *       *       *       *

  (e) Liability of Commonly Controlled Depository 
Institutions.--
          (1)  * * *

           *       *       *       *       *       *       *

          (9) Commonly controlled defined.--For purposes of 
        this subsection, depository institutions are commonly 
        controlled if--
                  [(A) such institutions are controlled by the 
                same depository institution holding company 
                (including any company required to file reports 
                pursuant to section 4(f)(6) of the Bank Holding 
                Company Act of 1956); or]
                  (A) such institutions are controlled by the 
                same company; or

           *       *       *       *       *       *       *

  Sec. 7. (a)(1)  * * *
  (2)(A)  * * *

           *       *       *       *       *       *       *

                  (C) Data sharing with other agencies and 
                persons.--In addition to reports of 
                examination, reports of condition, and other 
                reports required to be regularly provided to 
                the Corporation (with respect to all insured 
                depository institutions, including a depository 
                institution for which the Corporation has been 
                appointed conservator or receiver) or an 
                appropriate State bank supervisor (with respect 
                to a State depository institution) under 
                subparagraph (A) or (B), a Federal banking 
                agency may, in the agency's discretion, furnish 
                any report of examination or other confidential 
                supervisory information concerning any 
                depository institution or other entity examined 
                by such agency under authority of any Federal 
                law, to--
                          (i) any other Federal or State agency 
                        or authority with supervisory or 
                        regulatory authority over the 
                        depository institution or other entity;
                          (ii) any officer, director, or 
                        receiver of such depository institution 
                        or entity; and
                          (iii) any other person the Federal 
                        banking agency determines to be 
                        appropriate.

           *       *       *       *       *       *       *

  (j)(1) No person, acting directly or indirectly or through or 
in concert with one or more other persons, shall acquire 
control of any insured depository institution through a 
purchase, assignment, transfer, pledge, or other disposition of 
voting stock of such insured depository institution unless the 
appropriate Federal banking agency has been given sixty days' 
prior written notice of such proposed acquisition and within 
that time period the agency has not issued a notice 
disapproving the proposed acquisition or, in the discretion of 
the agency, extending for an additional 30 days the period 
during which such a disapproval may issue. The period for 
disapproval under the preceding sentence may be extended not to 
exceed 2 additional times for not more than 45 days each time 
if--
          (A) * * *

           *       *       *       *       *       *       *

          (D) the agency determines that additional time [is 
        needed to investigate] is needed--
                          (i) to investigate and determine that 
                        no acquiring party has a record of 
                        failing to comply with the requirements 
                        of subchapter II of chapter 53 of title 
                        31, [United States Code.] United States 
                        Code; or
                          (ii) to analyze the safety and 
                        soundness of any plans or proposals 
                        described in paragraph (6)(E) or the 
                        future prospects of the institution.

           *       *       *       *       *       *       *

  (7) The appropriate Federal banking agency may disapprove any 
proposed acquisition if--
          (A) * * *

           *       *       *       *       *       *       *

          (C) [the financial condition of any acquiring person] 
        either the financial condition of any acquiring person 
        or the future prospects of the institution is such as 
        might jeopardize the financial stability of the bank or 
        prejudice the interests of the depositors of the bank;

           *       *       *       *       *       *       *

  Sec. 8. (a) * * *

           *       *       *       *       *       *       *

  (c)(1) * * *

           *       *       *       *       *       *       *

          (4) False advertising or misuse of names to indicate 
        insured status.--
                  (A) Temporary order.--
                          (i) In general.--If a notice of 
                        charges served under subsection (b)(1) 
                        of this section specifies on the basis 
                        of particular facts that any person is 
                        engaged in conduct described in section 
                        18(a)(4), the Corporation may issue a 
                        temporary order requiring--
                                  (I) the immediate cessation 
                                of any activity or practice 
                                described, which gave rise to 
                                the notice of charges; and
                                  (II) affirmative action to 
                                prevent any further, or to 
                                remedy any existing, violation.
                          (ii) Effect of order.--Any temporary 
                        order issued under this subparagraph 
                        shall take effect upon service.
                  (B) Effective period of temporary order.--A 
                temporary order issued under subparagraph (A) 
                shall remain effective and enforceable, pending 
                the completion of an administrative proceeding 
                pursuant to subsection (b)(1) in connection 
                with the notice of charges--
                          (i) until such time as the 
                        Corporation shall dismiss the charges 
                        specified in such notice; or
                          (ii) if a cease-and-desist order is 
                        issued against such person, until the 
                        effective date of such order.
                  (C) Civil money penalties.--Violations of 
                section 18(a)(4) shall be subject to civil 
                money penalties as set forth in subsection (i) 
                in an amount not to exceed $1,000,000 for each 
                day during which the violation occurs or 
                continues.

           *       *       *       *       *       *       *

  (e) Removal and Prohibition Authority.--
          (1) * * *

           *       *       *       *       *       *       *

  (4) A notice of intention to remove an institution-affiliated 
party from office or to prohibit such party from participating 
in the conduct of the affairs of an insured depository 
institution, shall contain a statement of the facts 
constituting grounds therefor, and shall fix a time and place 
at which a hearing will be held thereon. Such hearing shall be 
fixed for a date not earlier than thirty days nor later than 
sixty days after the date of service of such notice, unless an 
earlier or a later date is set by the agency at the request of 
(A) such party, and for good cause shown, or (B) the Attorney 
General of the United States. Unless such party shall appear at 
the hearing in person or by a duly authorized representative, 
such party shall be deemed to have consented to the issuance of 
an order of such removal or prohibition. In the event of such 
consent, or if upon the record made at any such hearing the 
agency shall find that any of the grounds specified in such 
notice have been established, the agency may issue such orders 
of suspension or removal from office, or prohibition from 
participation in the conduct of the affairs of the depository 
institution, as it may deem appropriate. [In any action brought 
under this section by the Comptroller of the Currency in 
respect to any such party with respect to a national banking 
association or a District depository institution, the findings 
and conclusions of the Administrative Law Judge shall be 
certified to the Board of Governors of the Federal Reserve 
System for the determination of whether any order shall issue.] 
Any such order shall become effective at the expiration of 
thirty days after service upon such depository institution and 
such party (except in the case of an order issued upon consent, 
which shall become effective at the time specified therein). 
Such order shall remain effective and enforceable except to 
such extent as it is stayed, modified, terminated, or set aside 
by action of the agency or a reviewing court.

           *       *       *       *       *       *       *

  [(g)] (g) Suspension, Removal, and Prohibition From 
Participation Orders in the Case of Certain Criminal 
Offenses.--
          (1) Suspension or prohibition.--
                  (A) In general.--Whenever any institution-
                affiliated party is charged in any information, 
                indictment, or complaint, with the commission 
                of or participation in--
                          (i) * * *

           *       *       *       *       *       *       *

                the appropriate Federal banking agency may, if 
                continued service or participation by such 
                party may pose a threat to the interests of 
                [the depository] any depository institution's 
                depositors or may threaten to impair public 
                confidence in [the depository] any depository 
                institution, by written notice served upon such 
                party, suspend such party from office or 
                prohibit such party from further participation 
                in any manner in the conduct of the affairs of 
                [the depository] any depository institution.
                  (B) Provisions applicable to notice.--
                          (i) Copy.--A copy of any notice under 
                        subparagraph (A) shall also be served 
                        upon the depository institution of 
                        which the subject of the order is an 
                        institution-affiliated party.

           *       *       *       *       *       *       *

                  (C) Removal or prohibition.--
                          (i) In general.--If a judgment of 
                        conviction or an agreement to enter a 
                        pretrial diversion or other similar 
                        program is entered against an 
                        institution-affiliated party in 
                        connection with a crime described in 
                        subparagraph (A)(i), at such time as 
                        such judgment is not subject to further 
                        appellate review, the appropriate 
                        Federal banking agency may, if 
                        continued service or participation by 
                        such party may pose a threat to the 
                        interests of [the depository] any 
                        depository institution's depositors or 
                        may threaten to impair public 
                        confidence in [the depository] any 
                        depository institution, issue and serve 
                        upon such party an order removing such 
                        party from office or prohibiting such 
                        party from further participation in any 
                        manner in the conduct of the affairs of 
                        [the depository] any depository 
                        institution without the prior written 
                        consent of the appropriate agency.
                          (ii) Required for certain offenses.--
                        In the case of a judgment of conviction 
                        or agreement against an institution-
                        affiliated party in connection with a 
                        violation described in subparagraph 
                        (A)(ii), the appropriate Federal 
                        banking agency shall issue and serve 
                        upon such party an order removing such 
                        party from office or prohibiting such 
                        party from further participation in any 
                        manner in the conduct of the affairs of 
                        [the depository] any depository 
                        institution without the prior written 
                        consent of the appropriate agency.
                  (D) Provisions applicable to order.--
                          (i) Copy.--A copy of any order under 
                        subparagraph (C) shall also be served 
                        upon the depository institution of 
                        which the subject of the order is an 
                        institution-affiliated party, whereupon 
                        the institution-affiliated party who is 
                        subject to the order (if a director or 
                        an officer) shall cease to be a 
                        director or officer of such depository 
                        institution.

           *       *       *       *       *       *       *

                  (E) Continuation of authority.--A Federal 
                banking agency may issue an order under this 
                paragraph with respect to an individual who is 
                an institution-affiliated party at a depository 
                institution at the time of an offense described 
                in subparagraph (A) without regard to--
                          (i) whether such individual is an 
                        institution-affiliated party at any 
                        depository institution at the time the 
                        order is considered or issued by the 
                        agency; or
                          (ii) whether the depository 
                        institution at which the individual was 
                        an institution-affiliated party at the 
                        time of the offense remains in 
                        existence at the time the order is 
                        considered or issued by the agency.

           *       *       *       *       *       *       *

  (i)(1) * * *

           *       *       *       *       *       *       *

          (3) Notice or order under this section after 
        separation from service.--The resignation, termination 
        of employment or participation, or separation of an 
        institution-affiliated party (including a separation 
        caused by the closing of an insured depository 
        institution) shall not affect the jurisdiction and 
        authority of the appropriate Federal banking agency to 
        issue any notice or order and proceed under this 
        section against any such party, if such notice or order 
        is served before the end of the 6-year period beginning 
        on the date such party ceased to be such a party with 
        respect to such depository institution (whether such 
        date occurs before, on, or after the date of the 
        enactment of this paragraph).

           *       *       *       *       *       *       *

  Sec. 10. (a) * * *

           *       *       *       *       *       *       *

  (d) Annual On-Site Examinations of All Insured Depository 
Institutions Required.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) Waiver of schedule when necessary to achieve safe 
        and sound allocation of examiner resources.--
        Notwithstanding paragraphs (1), (2), (3), and (4), an 
        appropriate Federal banking agency may make adjustments 
        in the examination cycle for an insured depository 
        institution if necessary to allocate available 
        resources of examiners in a manner that provides for 
        the safety and soundness of, and the effective 
        examination and supervision of, insured depository 
        institutions.
          [(5)] (6) Certain government-controlled institutions 
        exempted.--Paragraph (1) does not apply to--
                  (A) * * *

           *       *       *       *       *       *       *

          [(6)] (7)  Coordinated examinations.--To minimize the 
        disruptive effects of examinations on the operations of 
        insured depository institutions--
                  (A) * * *

           *       *       *       *       *       *       *

          [(7)] (8) Separate examinations permitted.--
        Notwithstanding paragraph [(6)] (7), each appropriate 
        Federal banking agency may conduct a separate 
        examination in an emergency or under other exigent 
        circumstances, or when the agency believes that a 
        violation of law may have occurred.
          [(8)] (9) Report.--At the time the system provided 
        for in paragraph [(6)] (7) is established, the Federal 
        banking agencies shall submit a joint report describing 
        the system to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate and the Committee on 
        Banking, Finance and Urban Affairs of the House of 
        Representatives. Thereafter, the Federal banking 
        agencies shall annually submit a joint report to the 
        Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Banking, Finance and Urban 
        Affairs of the House of Representatives regarding the 
        progress of the agencies in implementing the system and 
        indicating areas in which enhancements to the system, 
        including legislature improvements, would be 
        appropriate.
          [(9)] (10) Standards for determining adequacy of 
        state examinations.--The Federal Financial Institutions 
        Examination Council shall issue guidelines establishing 
        standards to be used at the discretion of the 
        appropriate Federal banking agency for purposes of 
        making a determination under paragraph (3).
          [(10)] (11) Agencies authorized to increase maximum 
        asset amount of institutions for certain purposes.--At 
        any time after the end of the 2-year period beginning 
        on the date of enactment of the Riegle Community 
        Development and Regulatory Improvement Act of 1994, the 
        appropriate Federal banking agency, in the agency's 
        discretion, may increase the maximum amount limitation 
        contained in paragraph (4)(C)(ii), by regulation, from 
        $100,000,000 to an amount not to exceed $250,000,000 
        for purposes of such paragraph, if the agency 
        determines that the greater amount would be consistent 
        with the principles of safety and soundness for insured 
        depository institutions.

           *       *       *       *       *       *       *

  [(f) The Corporation may cause any and all records, papers, 
or documents kept by it or in its possession or custody to be 
photographed or microphotographed or otherwise reproduced upon 
film, which photographic film shall comply with the minimum 
standards of quality approved for permanent photographic 
records by the National Bureau of Standards. Such photographs, 
microphotographs, or photographic film or copies thereof shall 
be deemed to be an original record for all purposes, including 
introduction in evidence in all State and Federal courts or 
administrative agencies and shall be admissible to prove any 
act, transaction, occurrence, or event therein recorded. Such 
photographs, microphotographs, or reproduction shall be 
preserved in such manner as the Board of Directors of the 
Corporation shall prescribe and the original records, papers, 
or documents may be destroyed or otherwise disposed of as the 
Board shall direct.]
  (f) Preservation of Agency Records.--
          (1) In general.--A Federal banking agency may cause 
        any and all records, papers, or documents kept by the 
        agency or in the possession or custody of the agency to 
        be--
                  (A) photographed or microphotographed or 
                otherwise reproduced upon film; or
                  (B) preserved in any electronic medium or 
                format which is capable of--
                          (i) being read or scanned by 
                        computer; and
                          (ii) being reproduced from such 
                        electronic medium or format by printing 
                        or any other form of reproduction of 
                        electronically stored data.
          (2) Treatment as original records.--Any photographs, 
        microphotographs, or photographic film or copies 
        thereof described in paragraph (1)(A) or reproduction 
        of electronically stored data described in paragraph 
        (1)(B) shall be deemed to be an original record for all 
        purposes, including introduction in evidence in all 
        State and Federal courts or administrative agencies and 
        shall be admissible to prove any act, transaction, 
        occurrence, or event therein recorded.
          (3) Authority of the federal banking agencies.--Any 
        photographs, microphotographs, or photographic film or 
        copies thereof described in paragraph (1)(A) or 
        reproduction of electronically stored data described in 
        paragraph (1)(B) shall be preserved in such manner as 
        the Federal banking agency shall prescribe and the 
        original records, papers, or documents may be destroyed 
        or otherwise disposed of as the Federal banking agency 
        may direct.

           *       *       *       *       *       *       *

  [(h) Coordination of Examination Authority.--
          [(1) In general.--The appropriate State bank 
        supervisor of a host State may examine a branch 
        operated in such State by an out-of-State insured State 
        bank that resulted from an interstate merger 
        transaction approved under section 44 or a branch 
        established in such State pursuant to section 5155(g) 
        of the Revised Statutes or section 18(d)(4)--
                  [(A) for the purpose of determining 
                compliance with host State laws, including 
                those that govern banking, community 
                reinvestment, fair lending, consumer 
                protection, and permissible activities; and
                  [(B) to ensure that the activities of the 
                branch are not conducted in an unsafe or 
                unsound manner.
          [(2) Enforcement.--If the State bank supervisor of a 
        host State determines that there is a violation of the 
        law of the host State concerning the activities being 
        conducted by a branch described in paragraph (1) or 
        that the branch is being operated in an unsafe and 
        unsound manner, the State bank supervisor of the host 
        State or, to the extent authorized by the law of the 
        host State, a State law enforcement officer may 
        undertake such enforcement actions and proceedings as 
        would be permitted under the law of the host State as 
        if the branch were a bank chartered by that host State.
          [(3) Cooperative agreement.--The State bank 
        supervisors from 2 or more States may enter into 
        cooperative agreements to facilitate State regulatory 
        supervision of State banks, including cooperative 
        agreements relating to the coordination of examinations 
        and joint participation in examinations.
          [(4) Federal regulatory authority.--No provision of 
        this subsection shall be construed as limiting in any 
        way the authority of an appropriate Federal banking 
        agency to examine or to take any enforcement actions or 
        proceedings against any bank or branch of a bank for 
        which the agency is the appropriate Federal banking 
        agency.]
  (h) Coordination of Examination Authority.--
          (1) In general.--The appropriate State bank 
        supervisor of the home State of an insured State bank 
        has authority to examine and supervise the bank. The 
        State bank supervisor of the home State of an insured 
        State bank shall exercise its authority to supervise 
        and examine the branches of the bank in a host State in 
        accordance with the terms of any applicable cooperative 
        agreement between the home State bank supervisor and 
        the State bank supervisor of the relevant host State. 
        Except as expressly provided in a cooperative agreement 
        between the State bank supervisors of the home State 
        and host State(s) of an insured State bank, only the 
        State bank supervisor of the home State of an insured 
        State bank may levy or charge State supervisory fees on 
        the bank.
          (2) Host state examination.--With respect to a branch 
        operated in a host State by an out-of-State insured 
        State bank that resulted from an interstate merger 
        transaction approved under section 44 or that was 
        established in such State pursuant to section 5155(g) 
        of the Revised Statutes, the third undesignated 
        paragraph of section 9 of the Federal Reserve Act or 
        section 18(d)(4) of this Act, the appropriate State 
        bank supervisor of such host State may--
                  (A) with written notice to the State bank 
                supervisor of the bank's home State and subject 
                to the terms of any applicable cooperative 
                agreement with the State bank supervisor of 
                such home State, examine such branch for the 
                purpose of determining compliance with host 
                State laws that are applicable pursuant to 
                section 24(j) of this Act, including those that 
                govern community reinvestment, fair lending, 
                and consumer protection; and
                  (B) if expressly permitted under and subject 
                to the terms of a cooperative agreement with 
                the State bank supervisor of the bank's home 
                State or if such out-of-State insured State 
                bank has been determined to be in a troubled 
                condition by either the State bank supervisor 
                of the bank's home State or the bank's 
                appropriate Federal banking agency, participate 
                in the examination of the bank by the State 
                bank supervisor of the bank's home State to 
                ascertain that the activities of the branch in 
                such host State are not conducted in an unsafe 
                or unsound manner. The State bank supervisor of 
                the home State of an insured State bank shall 
                notify the State bank supervisor of each host 
                State of the bank if there has been a final 
                determination that the bank is in a troubled 
                condition. The State bank supervisor of the 
                bank's home State shall provide such notice as 
                soon as reasonably possible but in all cases 
                within 15 business days after the State bank 
                supervisor has made such final determination or 
                has received written notification of such final 
                determination.
          (3) Host state enforcement.--If the State bank 
        supervisor of a host State determines that a branch of 
        an out-of-State State insured State bank is violating 
        any law of the host State that is applicable to such 
        branch pursuant to section 24(j) of this Act, including 
        a law that governs community reinvestment, fair 
        lending, or consumer protection, the State bank 
        supervisor of the host State or, to the extent 
        authorized by the law of the host State, a host State 
        law enforcement officer may, with written notice to the 
        State bank supervisor of the bank's home State and 
        subject to the terms of any applicable cooperative 
        agreement with the State bank supervisor of the bank's 
        home State, undertake such enforcement actions and 
        proceedings as would be permitted under the law of the 
        host State as if the branch were a bank chartered by 
        that host State.
          (4) Cooperative agreement.--The State bank 
        supervisors from 2 or more States may enter into 
        cooperative agreements to facilitate State regulatory 
        supervision of State banks, including cooperative 
        agreements relating to the coordination of examinations 
        and joint participation in examinations. For purposes 
        of this subsection (h), the term ``cooperative 
        agreement,'' means a written agreement that is signed 
        by the home State bank supervisor and host State bank 
        supervisor to facilitate State regulatory supervision 
        of State banks and includes nationwide or multi-state 
        cooperative agreements and cooperative agreements 
        solely between the home State and host State. Except 
        for State bank supervisors, no provision of this 
        subsection (h) relating to such cooperative agreements 
        shall be construed as limiting in any way the authority 
        of home and host State law enforcement officers, 
        regulatory supervisors, or other officials that have 
        not signed such cooperative agreements to enforce host 
        State laws that are applicable to a branch of an out-
        of-State insured State bank located in the host State 
        pursuant to section 24(j) of this Act.
          (5) Federal regulatory authority.--No provision of 
        this subsection shall be construed as limiting in any 
        way the authority of any Federal banking agency.
          (6) State taxation authority not affected.--No 
        provision of this subsection (h) shall be construed as 
        affecting the authority of any State or political 
        subdivision of any State to adopt, apply, or administer 
        any tax or method of taxation to any bank, bank holding 
        company, or foreign bank, or any affiliate of any bank, 
        bank holding company, or foreign bank, to the extent 
        such tax or tax method is otherwise permissible by or 
        under the Constitution of the United States or other 
        Federal law.
          (7) Definitions.--For purpose of this section, the 
        following definition shall apply:
                  (A) The terms ``host State'', ``home State'', 
                and ``out-of-State bank'' have the same 
                meanings as in section 44(g).
                  (B) The term ``State supervisory fees'' means 
                assessments, examination fees, branch fees, 
                license fees, and all other fees that are 
                levied or charged by a State bank supervisor 
                directly upon an insured State bank or upon 
                branches of an insured State bank.
                  (C) Solely for purposes of subparagraph 
                (2)(B) of this subsection (h), an insured State 
                bank has been determined to be in ``troubled 
                condition'' if the bank--
                          (i) has a composite rating, as 
                        determined in its most recent report of 
                        examination, of 4 or 5 under the 
                        Uniform Financial Institutions Ratings 
                        System (UFIRS); or
                          (ii) is subject to a proceeding 
                        initiated by the Corporation for 
                        termination or suspension of deposit 
                        insurance; or
                          (iii) is subject to a proceeding 
                        initiated by the State bank supervisor 
                        of the bank's home State to vacate, 
                        revoke, or terminate the charter of the 
                        bank, or to liquidate the bank, or to 
                        appoint a receiver for the bank.
                  (D) For the purposes of paragraph (2)(B), the 
                term ``final determination'' means the 
                transmittal of a Report of Examination to the 
                bank or transmittal of official notice of 
                proceedings to the bank.

           *       *       *       *       *       *       *

  Sec. 11. (a)  * * *

           *       *       *       *       *       *       *

  (c) Appointment of Corporation as Conservator or Receiver.--
          (1)  * * *

           *       *       *       *       *       *       *

          [(7) Judicial review.--If the Corporation appoints 
        itself as conservator or receiver under paragraph (4), 
        the insured State depository institution may, within 30 
        days thereafter, bring an action in the United States 
        district court for the judicial district in which the 
        home office of such institution is located, or in the 
        United States District Court for the District of 
        Columbia, for an order requiring the Corporation to 
        remove itself as such conservator or receiver, and the 
        court shall, upon the merits, dismiss such action or 
        direct the Corporation to remove itself as such 
        conservator or receiver.]
          (7) Judicial review.--If the Corporation is appointed 
        (including the appointment of the Corporation as 
        receiver by the Board of Directors) as conservator or 
        receiver of a depository institution under paragraph 
        (4), (9), or (10), the depository institution may, 
        within 30 days thereafter, bring an action in the 
        United States district court for the judicial district 
        in which the home office of such depository institution 
        is located, or in the United States District Court for 
        the District of Columbia, for an order requiring the 
        Corporation to be removed as the conservator or 
        receiver (regardless of how such appointment was made), 
        and the court shall, upon the merits, dismiss such 
        action or direct the Corporation to be removed as the 
        conservator or receiver.

           *       *       *       *       *       *       *

  (d) Powers and Duties of Corporation as Conservator or 
Receiver.--
          (1)  * * *

           *       *       *       *       *       *       *

          (15) Accounting and recordkeeping requirements.--
                  (A)  * * *

           *       *       *       *       *       *       *

                  (D) [Recordkeeping requirement.--After the 
                end of the 6-year period] Recordkeeping 
                requirement.--
                          (i) In general.--Except as provided 
                        in clause (ii), after the end of the 6-
                        year period beginning on the date the 
                        Corporation is appointed as receiver of 
                        an insured depository institution, the 
                        Corporation may destroy any records of 
                        such institution which the Corporation, 
                        in the Corporation's discretion, 
                        determines to be unnecessary unless 
                        directed not to do so by a court of 
                        competent jurisdiction or governmental 
                        agency, or prohibited by law.
                          (ii) Old records.--In the case of 
                        records of an insured depository 
                        institution which are at least 10 years 
                        old as of the date the Corporation is 
                        appointed as the receiver of such 
                        depository institution, the Corporation 
                        may destroy such records in accordance 
                        with clause (i) any time after such 
                        appointment is final without regard to 
                        the 6-year period of limitation 
                        contained in such clause.

           *       *       *       *       *       *       *


SEC. 11A. FSLIC RESOLUTION FUND.

  (a)  * * *

           *       *       *       *       *       *       *

  (d) [Legal Proceedings.--Any judgment] Legal Proceedings.--
          (1) In general.--Any judgment resulting from a 
        proceeding to which the Federal Savings and Loan 
        Insurance Corporation was a party prior to its 
        dissolution or which is initiated against the 
        Corporation with respect to the Federal Savings and 
        Loan Insurance Corporation or with respect to the FSLIC 
        Resolution Fund shall be limited to the assets of the 
        FSLIC Resolution Fund.
          (2) Clarification of applicability of certain 
        procedural doctrines.--In any proceeding seeking a 
        monetary recovery against the United States, or an 
        agency or official thereof, based upon actions of the 
        Federal Savings and Loan Insurance Corporation prior to 
        its dissolution, or the Federal Home Loan Bank Board 
        prior to its dissolution, and arising from the 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 or its implementation, and 
        where any monetary recovery in such proceeding would be 
        paid from the FSLIC Resolution Fund or any supplements 
        thereto, neither the United States Court of Federal 
        Claims, the United States Court of Appeals for the 
        Federal Circuit, nor any other court of competent 
        jurisdiction shall dismiss, or affirm on appeal the 
        dismissal of, the claims of any party seeking such 
        monetary recovery, on the basis of res judicata, 
        collateral estoppel, or any similar doctrine, defense, 
        or rule of law, based upon any decision, opinion, or 
        order of judgment entered by any court prior to July 1, 
        1996. Unless some other defense is applicable, in any 
        such proceeding, the United States Court of Federal 
        Claims, the United States Court of Appeals for the 
        Federal Circuit, and any other court of competent 
        jurisdiction shall review the merits of the claims of 
        the party seeking such monetary relief and shall enter 
        judgment accordingly.

           *       *       *       *       *       *       *

  Sec. 18. (a) [Insurance Logo.--] Representations of deposit 
insurance.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Regulations.--The Corporation shall prescribe 
        regulations to carry out the purposes [of this 
        subsection] of paragraphs (1) and (2), including 
        regulations governing the manner of display or use of 
        such signs, except that the size of the sign prescribed 
        under paragraph (1) shall be similar to that prescribed 
        under paragraph (2)(A). [Initial regulations under this 
        subsection shall be prescribed on the date of enactment 
        of the Financial Institutions Recovery, Reform, and 
        Enforcement Act of 1989.] For each day an insured 
        depository institution continues to violate any 
        provisions [of this subsection] of paragraphs (1) and 
        (2) or any lawful provisions of said regulations, it 
        shall be subject to a penalty of not more than $100, 
        which the Corporation may recover for its use.
          (4) False advertising, misuse of fdic names, and 
        misrepresentation to indicate insured status.--
                  (A) Prohibition on false advertising and 
                misuse of fdic names.--No person may--
                          (i) use the terms ``Federal 
                        Deposit'', ``Federal Deposit 
                        Insurance'', ``Federal Deposit 
                        Insurance Corporation'', any 
                        combination of such terms, or the 
                        abbreviation ``FDIC'' as part of the 
                        business name or firm name of any 
                        person, including any corporation, 
                        partnership, business trust, 
                        association, or other business entity; 
                        or
                          (ii) use such terms or any other sign 
                        or symbol as part of an advertisement, 
                        solicitation, or other document,
                to represent, suggest or imply that any deposit 
                liability, obligation, certificate or share is 
                insured or guaranteed by the Federal Deposit 
                Insurance Corporation, if such deposit 
                liability, obligation, certificate, or share is 
                not insured or guaranteed by the Corporation.
                  (B) Prohibition on misrepresentations of 
                insured status.--No person may knowingly 
                misrepresent--
                          (i) that any deposit liability, 
                        obligation, certificate, or share is 
                        federally insured, if such deposit 
                        liability, obligation, certificate, or 
                        share is not insured by the 
                        Corporation; or
                          (ii) the extent to which or the 
                        manner in which any deposit liability, 
                        obligation, certificate, or share is 
                        insured by the Federal Deposit 
                        Insurance Corporation, if such deposit 
                        liability, obligation, certificate, or 
                        share is not insured by the Corporation 
                        to the extent or in the manner 
                        represented.
                  (C) Authority of fdic.--The Corporation shall 
                have--
                          (i) jurisdiction over any person that 
                        violates this paragraph, or aids or 
                        abets the violation of this paragraph; 
                        and
                          (ii) for purposes of enforcing the 
                        requirements of this paragraph with 
                        regard to any person--
                                  (I) the authority of the 
                                Corporation under section 10(c) 
                                to conduct investigations; and
                                  (II) the enforcement 
                                authority of the Corporation 
                                under subsections (b), (c), (d) 
                                and (i) of section 8,
                as if such person were a state nonmember 
                insured bank.
                  (D) Other actions preserved.--No provision of 
                this paragraph shall be construed as barring 
                any action otherwise available, under the laws 
                of the United States or any State, to any 
                Federal or State law enforcement agency or 
                individual.

           *       *       *       *       *       *       *

  (c)(1)  * * *

           *       *       *       *       *       *       *

  [(4) In the interests of uniform standards, before acting on 
any application for approval of a merger transaction, the 
responsible agency, unless it finds that it must act 
immediately in order to prevent the probable failure of one of 
the banks or savings associations involved, shall request 
reports on the competitive factors involved from the Attorney 
General and the other Federal banking agencies referred to in 
this subsection. The reports shall be furnished within thirty 
calendar days of the date on which they are requested, or 
within ten calendar days of such date if the requesting agency 
advises the Attorney General and the other Federal banking 
agencies that an emergency exists requiring expeditious action. 
Notwithstanding the preceding sentence, a banking agency shall 
not be required to file a report requested by the responsible 
agency under this paragraph if such banking agency advises the 
responsible agency by the applicable date under the preceding 
sentence that the report is not necessary because none of the 
effects described in paragraph (5) are likely to occur as a 
result of the transaction.]
          (4) Reports on competitive factors.--
                  (A) Request for report.--In the interests of 
                uniform standards, before acting on any 
                application for approval of a merger 
                transaction, the responsible agency, unless the 
                agency finds that it must act immediately in 
                order to prevent the probable failure of a 
                depository institution involved, shall--
                          (i) request a report on the 
                        competitive factors involved from the 
                        Attorney General; and
                          (ii) provide a copy of the request to 
                        the Corporation (when the Corporation 
                        is not the responsible agency).
                  (B) Furnishing of report.--The report 
                requested under subparagraph (A) shall be 
                furnished by the Attorney General to the 
                responsible agency--
                          (i) not more than 30 calendar days 
                        after the date on which the Attorney 
                        General received the request; or
                          (ii) not more than 10 calendar days 
                        after such date, if the requesting 
                        agency advises the Attorney General 
                        that an emergency exists requiring 
                        expeditious action.

           *       *       *       *       *       *       *

  (6) The responsible agency shall immediately notify the 
Attorney General of any approval by it pursuant to this 
subsection of a proposed merger transaction. If the agency has 
found that it must act immediately to prevent the probable 
failure of one of the banks or savings associations involved 
and reports on the competitive factors have been dispensed 
with, the transaction may be consummated immediately upon 
approval by the agency. [If the agency has advised the Attorney 
General and the other Federal banking agencies of the existence 
of an emergency requiring expeditious action and has requested 
reports on the competitive factors within ten days, the 
transaction may not be consummated before the fifth calendar 
day after the date of approval by the agency.] If the agency 
has advised the Attorney General under paragraph (4)(B) of the 
existence of an emergency requiring expeditious action and has 
requested a report on the competitive factors within 10 days, 
the transaction may not be consummated before the fifth 
calendar day after the date of approval by the agency. In all 
other cases, the transaction may not be consummated before the 
thirtieth calendar day after the date of approval by the agency 
or, if the agency has not received any adverse comment from the 
Attorney General of the United States relating to competitive 
factors, such shorter period of time as may be prescribed by 
the agency with the concurrence of the Attorney General, but in 
no event less than [15] 5 calendar days after the date of 
approval.

           *       *       *       *       *       *       *

  (d)(1)  * * *

           *       *       *       *       *       *       *

          (4) [State ``opt-in'' election to permit interstate] 
        Interstate branching through de novo branches.--
                  (A) In general.--Subject to subparagraph (B), 
                the Corporation may approve an application by 
                an insured State nonmember bank to establish 
                and operate a de novo branch in a State (other 
                than the bank's home State) in which the bank 
                does not [maintain a branch if--
                          [(i) there is in effect in the host 
                        State a law that--
                                  [(I) applies equally to all 
                                banks; and
                                  [(II) expressly permits all 
                                out-of-State banks to establish 
                                de novo branches in such State; 
                                and
                          [(ii) the conditions established in, 
                        or made applicable to this paragraph 
                        by, subparagraph (B) are met.] maintain 
                        a branch.

           *       *       *       *       *       *       *

          (5) Interstate fiduciary activity.--
                  (A) Authority of state bank supervisor.--The 
                State bank supervisor of a State bank may 
                approve an application by the State bank, when 
                not in contravention of home State or host 
                State law, to act as trustee, executor, 
                administrator, registrar of stocks and bonds, 
                guardian of estates, assignee, receiver, 
                committee of estates of lunatics, or in any 
                other fiduciary capacity in a host State in 
                which State banks or other corporations which 
                come into competition with national banks are 
                permitted to act under the laws of such host 
                State.
                  (B) Noncontravention of host state law.--
                Whenever the laws of a host State authorize or 
                permit the exercise of any or all of the 
                foregoing powers by State banks or other 
                corporations which compete with national banks, 
                the granting to and the exercise of such powers 
                by a State bank as provided in this paragraph 
                shall not be deemed to be in contravention of 
                host State law within the meaning of this 
                paragraph.
                  (C) State bank includes trust companies.--For 
                purposes of this paragraph, the term ``State 
                bank'' includes any State-chartered trust 
                company (as defined in section 44(g)).
                  (D) Other definitions.--For purposes of this 
                paragraph, the term ``home State'' and ``host 
                State'' have the meanings given such terms in 
                section 44.

           *       *       *       *       *       *       *

  (k) Authority To Regulate or Prohibit Certain Forms of 
Benefits to Institution-Affiliated Parties.--
          (1)  * * *
          (2) Factors to be taken into account.--The 
        Corporation shall prescribe, by regulation, the factors 
        to be considered by the Corporation in taking any 
        action pursuant to paragraph (1) which may include such 
        factors as the following:
                  (A) Whether there is a reasonable basis to 
                believe that the institution-affiliated party 
                has committed any fraudulent act or omission, 
                breach of trust or fiduciary duty, or insider 
                abuse with regard to the depository institution 
                [or depository institution holding company] or 
                covered company that has had a material affect 
                on the financial condition of the institution.
                  [(B) Whether there is a reasonable basis to 
                believe that the institution-affiliated party 
                is substantially responsible for the insolvency 
                of the depository institution or depository 
                institution holding company, the appointment of 
                a conservator or receiver for the depository 
                institution, or the depository institution's 
                troubled condition (as defined in the 
                regulations prescribed pursuant to section 
                32(f)).]
                  (B) Whether there is a reasonable basis to 
                believe that the institution-affiliated party 
                is substantially responsible for--
                          (i) the insolvency of the depository 
                        institution or covered company;
                          (ii) the appointment of a conservator 
                        or receiver for the depository 
                        institution; or
                          (iii) the depository institution's 
                        troubled condition (as defined in the 
                        regulations prescribed pursuant to 
                        section 32(f)).

           *       *       *       *       *       *       *

                  (F) The length of time the party was 
                affiliated with the insured depository 
                institution or [depository institution holding 
                company] covered company, and the degree to 
                which--
                          (i)  * * *

           *       *       *       *       *       *       *

          (3) Certain payments prohibited.--No insured 
        depository institution or [depository institution 
        holding company] covered company may prepay the salary 
        or any liability or legal expense of any institution-
        affiliated party if such payment is made--
                  (A) in contemplation of the insolvency of 
                such institution or [holding] covered company 
                or after the commission of an act of 
                insolvency; and

           *       *       *       *       *       *       *

          (4) Golden parachute payment defined.--For purposes 
        of this subsection--
                  (A) In general.--The term ``golden parachute 
                payment'' means any payment (or any agreement 
                to make any payment) in the nature of 
                compensation by any insured depository 
                institution or [depository institution holding 
                company] covered company for the benefit of any 
                institution-affiliated party pursuant to an 
                obligation of such institution or [holding 
                company] covered company that--
                          (i) is contingent on the termination 
                        of such party's affiliation with the 
                        institution or [holding company] 
                        covered company; and
                          (ii) is received on or after the date 
                        on which--
                                  (I) the insured depository 
                                institution or [depository 
                                institution holding company] 
                                covered company, or any insured 
                                depository institution 
                                subsidiary of such [holding 
                                company] covered company, is 
                                insolvent;

           *       *       *       *       *       *       *

          (5) Other definitions.--For purposes of this 
        subsection--
                  (A) Indemnification payment.--Subject to 
                paragraph (6), the term ``indemnification 
                payment'' means any payment (or any agreement 
                to make any payment) by any insured depository 
                institution or [depository institution holding 
                company] covered company for the benefit of any 
                person who is or was an institution-affiliated 
                party, to pay or reimburse such person for any 
                liability or legal expense with regard to any 
                administrative proceeding or civil action 
                instituted by the appropriate Federal banking 
                agency which results in a final order under 
                which such person--
                          (i)  * * *

           *       *       *       *       *       *       *

                  (D) Covered company.--The term ``covered 
                company'' means any depository institution 
                holding company (including any company required 
                to file a report under section 4(f)(6) of the 
                Bank Holding Company Act of 1956), or any other 
                company that controls an insured depository 
                institution.
          (6) Certain commercial insurance coverage not treated 
        as covered benefit payment.--No provision of this 
        subsection shall be construed as prohibiting any 
        insured depository institution or [depository 
        institution holding company] covered company, from 
        purchasing any commercial insurance policy or fidelity 
        bond, except that, subject to any requirement described 
        in paragraph (5)(A)(iii), such insurance policy or bond 
        shall not cover any legal or liability expense of the 
        institution [or holding company] or covered company 
        which is described in paragraph (5)(A).

           *       *       *       *       *       *       *

  (u) Limitation on Claims.--
          (1) In general.--No person may bring a claim against 
        any Federal banking agency (including in its capacity 
        as conservator or receiver) for the return of assets of 
        an affiliate or controlling shareholder of the insured 
        depository institution transferred to, or for the 
        benefit of, an insured depository institution by such 
        affiliate or controlling shareholder of the insured 
        depository institution, or a claim against such Federal 
        banking agency for monetary damages or other legal or 
        equitable relief in connection with such transfer, if 
        at the time of the transfer--
                  (A) the insured depository institution is 
                subject to any direction issued in writing by a 
                Federal banking agency to increase its capital;
                  [(B) the insured depository institution is 
                undercapitalized (as defined in section 38 of 
                this Act); and]
                  [(C)] (B) for that portion of the transfer 
                that is made by an entity covered by section 
                5(g) of the Bank Holding Company Act of 1956 or 
                section 45 of this Act, the Federal banking 
                agency has followed the procedure set forth in 
                such section.

           *       *       *       *       *       *       *


SEC. 19. PENALTY FOR UNAUTHORIZED PARTICIPATION BY CONVICTED 
                    INDIVIDUAL.

  (a)  * * *

           *       *       *       *       *       *       *

  (c) Noninsured Banks.--Subsections (a) and (b) shall apply to 
a noninsured national bank and a noninsured State member bank, 
and any agency or noninsured branch (as such terms are defined 
in section 1(b) of the International Banking Act of 1978) of a 
foreign bank as if such bank, branch, or agency were an insured 
depository institution, except such subsections shall be 
applied for purposes of this subsection by substituting the 
agency determined under the following paragraphs for 
``Corporation'' each place such term appears in such 
subsections:
          (1) The Comptroller of the Currency, in the case of a 
        noninsured national bank or any Federal agency or 
        noninsured Federal branch of a foreign bank.
          (2) The Board of Governors of the Federal Reserve 
        System, in the case of a noninsured State member bank 
        or any State agency or noninsured State branch of a 
        foreign bank.
  (d) Bank Holding Companies.--Subsections (a) and (b) shall 
apply to any bank holding company, any subsidiary (other than a 
bank) of a bank holding company, and any organization organized 
and operated under section 25A of the Federal Reserve Act or 
operating under section 25 of the Federal Reserve Act as if 
such bank holding company, subsidiary, or organization were an 
insured depository institution, except such subsections shall 
be applied for purposes of this subsection by substituting 
``Board of Governors of the Federal Reserve System'' for 
``Corporation'' each place such term appears in such 
subsections.
  (e) Savings and Loan Holding Companies.--Subsections (a) and 
(b) shall apply to any savings and loan holding company and any 
subsidiary (other than a savings association) of a savings and 
loan holding company as if such savings and loan holding 
company or subsidiary were an insured depository institution, 
except such subsections shall be applied for purposes of this 
subsection by substituting ``Director of the Office of Thrift 
Supervision'' for ``Corporation'' each place such term appears 
in such subsections.

           *       *       *       *       *       *       *


SEC. 43. DEPOSITORY INSTITUTIONS LACKING FEDERAL DEPOSIT INSURANCE.

  (a) Annual Independent Audit of Private Deposit Insurers.--
          (1)  * * *
          (2) Providing copies of audit report.--
                  (A) Private deposit insurer.--The private 
                deposit insurer shall provide a copy of the 
                audit report--
                          (i) to each depository institution 
                        the deposits of which are insured by 
                        the private deposit insurer, not later 
                        than 14 days after the audit is 
                        completed; [and]
                          (ii) to the appropriate supervisory 
                        agency of each State in which such an 
                        institution receives deposits, not 
                        later than 7 days after the audit is 
                        completed[.];
                          (iii) in the case of depository 
                        institutions described in subsection 
                        (f)(2)(A) the deposits of which are 
                        insured by the private insurer, the 
                        National Credit Union Administration, 
                        not later than 7 days after that audit 
                        is completed; and
                          (iv) in the case of depository 
                        institutions described in subsection 
                        (f)(2)(A) the deposits of which are 
                        insured by the private insurer which 
                        are members of a Federal home loan 
                        bank, the Federal Housing Finance 
                        Board, not later than 7 days after that 
                        audit is completed.

           *       *       *       *       *       *       *

                  (C) Consultation.--The appropriate 
                supervisory agency of each State in which a 
                private deposit insurer insures deposits in an 
                institution described in subsection (f)(2)(A) 
                which--
                          (i) lacks Federal deposit insurance; 
                        and
                          (ii) has become a member of a Federal 
                        home loan bank,
                shall provide the National Credit Union 
                Administration, upon request, with the results 
                of any examination and reports related thereto 
                concerning the private deposit insurer to which 
                such agency may have in its possession.

           *       *       *       *       *       *       *


SEC. 44. INTERSTATE BANK MERGERS.

  (a) Approval of Interstate Merger Transactions Authorized.--
          (1) In general.--[Beginning on June 1, 1997, the] The 
        responsible agency may approve a merger transaction 
        under section 18(c) between [insured banks with 
        different home States] an insured bank and another 
        insured depository institution or trust company with a 
        different home State than the resulting insured bank, 
        without regard to whether such transaction is 
        prohibited under the law of any State.

           *       *       *       *       *       *       *

          [(4) Interstate merger transactions involving 
        acquisitions of branches.--
                  [(A) In general.--An interstate merger 
                transaction may involve the acquisition of a 
                branch of an insured bank without the 
                acquisition of the bank only if the law of the 
                State in which the branch is located permits 
                out-of-State banks to acquire a branch of a 
                bank in such State without acquiring the bank.
                  [(B) Treatment of branch for purposes of this 
                section.--In the case of an interstate merger 
                transaction which involves the acquisition of a 
                branch of an insured bank without the 
                acquisition of the bank, the branch shall be 
                treated, for purposes of this section, as an 
                insured bank the home State of which is the 
                State in which the branch is located.
          [(5) Preservation of state age laws.--
                  [(A) In general.--The responsible agency may 
                not approve an application pursuant to 
                paragraph (1) that would have the effect of 
                permitting an out-of-State bank or out-of-State 
                bank holding company to acquire a bank in a 
                host State that has not been in existence for 
                the minimum period of time, if any, specified 
                in the statutory law of the host State.
                  [(B) Special rule for state age laws 
                specifying a period of more than 5 years.--
                Notwithstanding subparagraph (A), the 
                responsible agency may approve a merger 
                transaction pursuant to paragraph (1) involving 
                the acquisition of a bank that has been in 
                existence at least 5 years without regard to 
                any longer minimum period of time specified in 
                a statutory law of the host State.
          [(6) Shell banks.--For purposes of this subsection, a 
        bank that has been chartered solely for the purpose of, 
        and does not open for business prior to, acquiring 
        control of, or acquiring all or substantially all of 
        the assets of, an existing bank or branch shall be 
        deemed to have been in existence for the same period of 
        time as the bank or branch to be acquired.]
          (4) Treatment of branches in connection with certain 
        interstate merger transactions.--In the case of an 
        interstate merger transaction which involves the 
        acquisition of a branch of an insured depository 
        institution or trust company without the acquisition of 
        the insured depository institution or trust company, 
        the branch shall be treated, for purposes of this 
        section, as an insured depository institution or trust 
        company the home State of which is the State in which 
        the branch is located.
  (b) Provisions Relating to Application and Approval 
Process.--
          (1)  * * *
          (2) Concentration limits.--
                  (A)  * * *
                  (B) Statewide concentration limits other than 
                with respect to initial entries.--The 
                responsible agency may not approve an 
                application for an interstate merger 
                transaction if--
                          (i) any [bank] insured depository 
                        institution involved in the transaction 
                        (including all insured depository 
                        institutions which are affiliates of 
                        any such [bank] insured depository 
                        institution) has a branch in any State 
                        in which any other [bank] insured 
                        depository institution involved in the 
                        transaction has a branch; and

           *       *       *       *       *       *       *

                  (E) Exception for certain [banks] insured 
                depository institutions and trust companies.--
                This paragraph shall not apply with respect to 
                any interstate merger transaction involving 
                only affiliated [banks] insured depository 
                institutions or trust companies.
          (3) Community reinvestment compliance.--In 
        determining whether to approve an application for an 
        interstate merger transaction in which the resulting 
        bank would have a branch or [bank affiliate] insured 
        depository institution affiliate immediately following 
        the transaction in any State in which the bank 
        submitting the application (as the acquiring bank) had 
        no branch or [bank affiliate] insured depository 
        institution affiliate immediately before the 
        transaction, the responsible agency shall--
                  (A)  * * *
                  (B) take into account the most recent written 
                evaluation under section 804 of the Community 
                Reinvestment Act of 1977 of [any bank] any 
                insured depository institution which would be 
                an affiliate of the resulting bank; and

           *       *       *       *       *       *       *

          (4) Adequacy of capital and management skills.--The 
        responsible agency may approve an application for an 
        interstate merger transaction pursuant to subsection 
        (a) only if--
                  (A) each [bank] insured depository 
                institution and trust company involved in the 
                transaction is adequately capitalized as of the 
                date the application is filed; and

           *       *       *       *       *       *       *

          (5) Surrender of charter after merger transaction.--
        The charters of [all banks] all insured depository 
        institutions and trust companies involved in an 
        interstate merger transaction, other than the charter 
        of the resulting bank, shall be surrendered, upon 
        request, to the Federal banking agency or State bank 
        supervisor which issued the charter.

           *       *       *       *       *       *       *

  (d) Operations of the Resulting Bank.--
          (1) Continued operations.--A resulting bank may, 
        subject to the approval of the appropriate Federal 
        banking agency, retain and operate, as a main office or 
        a branch, any office that [any bank] any insured 
        depository institution or trust company involved in an 
        interstate merger transaction was operating as a main 
        office or a branch immediately before the merger 
        transaction.

           *       *       *       *       *       *       *

  (e) Exception for [Banks] Insured Depository Institutions in 
Default or in Danger of Default.--If an application under 
subsection (a)(1) for approval of a merger transaction which 
involves [1 or more banks] 1 or more insured depository 
institutions in default or in danger of default or with respect 
to which the Corporation provides assistance under section 
13(c), the responsible agency may approve such application 
without regard to subsection (b), or paragraph (2)[, (4), or 
(5)] of subsection (a).
  (f) Applicable Rate and Other Charge Limitations.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Other lenders.--In the case of any other lender 
        doing business in the State described in paragraph (1), 
        the maximum interest rate or amount of interest, 
        discount points, finance charges, or other similar 
        charges that may be charged, taken, received, or 
        reserved from time to time in any loan, discount, or 
        credit sale made, or upon any note, bill of exchange, 
        financing transaction, or other evidence of debt issued 
        to or acquired by any other lender shall be equal to 
        not more than the greater of the rates described in 
        subparagraph (A) or (B) of paragraph (1).
          (4) Other lender defined.--For purposes of paragraph 
        (3), the term ``other lender'' means any person engaged 
        in the business of selling or financing the sale of 
        personal property (and any services incidental to the 
        sale of personal property) in such State, except that, 
        with regard to any person or entity described in such 
        paragraph, such term does not include--
                  (A) an insured depository institution; or
                  (B) any person or entity engaged in the 
                business of providing a short-term cash advance 
                to any consumer in exchange for--
                          (i) a consumer's personal check or 
                        share draft, in the amount of the 
                        advance plus a fee, where presentment 
                        or negotiation of such check or share 
                        draft is deferred by agreement of the 
                        parties until a designated future date; 
                        or
                          (ii) a consumer authorization to 
                        debit the consumer's transaction 
                        account, in the amount of the advance 
                        plus a fee, where such account will be 
                        debited on or after a designated future 
                        date.
  (g) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1)  * * *

           *       *       *       *       *       *       *

          (4) Home state.--The term ``home State''--
                  (A) means--
                          [(i) with respect to a national bank, 
                        the State in which the main office of 
                        the bank is located; and
                          [(ii) with respect to a State bank, 
                        the State by which the bank is 
                        chartered; and]
                          (i) with respect to a national bank 
                        or Federal savings association, the 
                        State in which the main office of the 
                        bank or savings association is located; 
                        and
                          (ii) with respect to a State bank, 
                        State savings association, or State-
                        chartered trust company, the State by 
                        which the bank, savings association, or 
                        trust company is chartered; and

           *       *       *       *       *       *       *

          [(5) Host state.--The term ``host State'' means, with 
        respect to a bank, a State, other than the home State 
        of the bank, in which the bank maintains, or seeks to 
        establish and maintain, a branch.]
          (5) Host state.--The term ``host State'' means--
                  (A) with respect to a bank, a State, other 
                than the home State of the bank, in which the 
                bank maintains, or seeks to establish and 
                maintain, a branch; and
                  (B) with respect to a trust company and 
                solely for purposes of section 18(d)(5), a 
                State, other than the home State of the trust 
                company, in which the trust company acts, or 
                seeks to act, in 1 or more fiduciary 
                capacities.

           *       *       *       *       *       *       *

          (10) Responsible agency.--The term ``responsible 
        agency'' means the agency determined in accordance with 
        [section 18(c)(2)] paragraph (1) or (2) of section 
        18(c), as appropriate, with respect to a merger 
        transaction.

           *       *       *       *       *       *       *

          (12) Trust company.--The term ``trust company'' 
        means--
                  (A) any national bank;
                  (B) any savings association; and
                  (C) any bank, banking association, trust 
                company, savings bank, or other banking 
                institution which is incorporated under the 
                laws of any State,
        that is authorized to act in 1 or more fiduciary 
        capacities but is not engaged in the business of 
        receiving deposits other than trust funds (as defined 
        in section 3(p)).

           *       *       *       *       *       *       *


SEC. 47. INSURANCE CUSTOMER PROTECTIONS.

  (a)  * * *

           *       *       *       *       *       *       *

  (g) Effect on Other Authority.--
          (1)  * * *
          (2) Coordination with state law.--
                  (A)  * * *
                  (B) Preemption.--
                          (i) In general.--If, with respect to 
                        any provision of the regulations 
                        prescribed under this section, the 
                        Board of Governors of the Federal 
                        Reserve System, the Comptroller of the 
                        Currency, the Director of the Office of 
                        Thrift Supervision, and the Board of 
                        Directors of the Corporation determine 
                        jointly that the protection afforded by 
                        such provision for customers is greater 
                        than the protection provided by a 
                        comparable provision of the statutes, 
                        regulations, orders, or interpretations 
                        referred to in subparagraph (A) of any 
                        State, the appropriate State regulatory 
                        authority shall be notified of such 
                        determination in writing.

           *       *       *       *       *       *       *


SEC. 49. ENFORCEMENT OF AGREEMENTS.

  (a) In General.--Notwithstanding clause (i) or (ii) of 
section 8(b)(6)(A) or section 38(e)(2)(E), an appropriate 
Federal banking agency may enforce, under section 8, the terms 
of--
          (1) any condition imposed in writing by the agency on 
        a depository institution or an institution-affiliated 
        party (including a bank holding company) in connection 
        with any action on any application, notice, or other 
        request concerning a depository institution; or
          (2) any written agreement entered into between the 
        agency and an institution-affiliated party (including a 
        bank holding company).
  (b) Receiverships and Conservatorships.--After the 
appointment of the Corporation as the receiver or conservator 
for any insured depository institution, the Corporation may 
enforce any condition or agreement described in paragraph (1) 
or (2) of subsection (a) involving such institution or any 
institution-affiliated party (including a bank holding 
company), through an action brought in an appropriate United 
States district court.
                              ----------                              


NATIONAL BANK CONSOLIDATION AND MERGER ACT

           *       *       *       *       *       *       *


SEC. 2. CONSOLIDATION OF BANKS WITHIN THE SAME STATE.

  (a) In General.--Any national bank or any bank incorporated 
under the laws of any State may, with the approval of the 
Comptroller, be consolidated with one or more national banking 
associations located in the same State under the charter of a 
national banking association on such terms and conditions as 
may be lawfully agreed upon by a majority of the board of 
directors of each association or bank proposing to consolidate, 
and be ratified and confirmed by the affirmative vote of the 
shareholders of each such association or bank owning at least 
two-thirds of its capital stock outstanding, or by a greater 
proportion of such capital stock in the case of such State bank 
if the laws of the State where it is organized so require, at a 
meeting to be held on the call of the directors after 
publishing notice of the time, place, and object of the meeting 
for four consecutive weeks in a newspaper of general 
circulation published in the place where the association or 
bank is located, or, if there is no such newspaper, then in the 
paper of general circulation published nearest thereto, and 
after sending such notice to each shareholder of record by 
certified or registered mail at least ten days prior to the 
meeting, except to those shareholders who specifically waive 
notice, but any additional notice shall be given to the 
shareholders of such State bank which may be required by the 
laws of the State where it is organized. [Publication of notice 
may be waived, in cases where the Comptroller determines that 
an emergency exists justifying such waiver, by unanimous action 
of the shareholders of the association or State bank] 
Publication of notice may be waived if the Comptroller 
determines that an emergency exists justifying such waiver or 
if the shareholders of the association or State bank agree by 
unanimous action to waive the publication requirement for their 
respective institutions.

           *       *       *       *       *       *       *

  Sec. 3. (a) One or more national banking associations or one 
or more State banks, with the approval of the Comptroller, 
under an agreement not inconsistent with this Act, may merge 
into a national banking association located within the same 
State, under the charter of the receiving association. The 
merger agreement shall--
          (1)  * * *
          (2) be ratified and confirmed by the affirmative vote 
        of the shareholders of each such association or State 
        bank owning at least two-thirds of its capital stock 
        outstanding, or by a greater proportion of such capital 
        stock in the case of a State bank if the laws of the 
        State where it is organized so require, at a meeting to 
        be held on the call of the directors, after publishing 
        notice of the time, place, and object of the meeting 
        for four consecutive weeks in a newspaper of general 
        circulation published in the place where the 
        association or State bank is located, or, if there is 
        no such newspaper, then in the newspaper of general 
        circulation published nearest thereto, and after 
        sending such notice to each shareholder of record by 
        certified or registered mail at least ten days prior to 
        the meeting, except to those shareholders who 
        specifically waive notice, but any additional notice 
        shall be given to the shareholders of such State bank 
        which may be required by the laws of the State where it 
        is organized. [Publication of notice may be waived, in 
        cases where the Comptroller determines that an 
        emergency exists justifying such waiver, by unanimous 
        action of the shareholders of the association or State 
        bank] Publication of notice may be waived if the 
        Comptroller determines that an emergency exists 
        justifying such waiver or if the shareholders of the 
        association or State bank agree by unanimous action to 
        waive the publication requirement for their respective 
        institutions;

           *       *       *       *       *       *       *


SEC. 4. INTERSTATE CONSOLIDATIONS AND MERGERS.

  (a)  * * *
  [(b) Scope of Application.--Subsection (a) shall not apply 
with respect to any consolidation or merger before June 1, 
1997, unless the home State of each bank involved in the 
transaction has in effect a law described in section 44(a)(3) 
of the Federal Deposit Insurance Act.
  [(c) Definitions.--The terms ``home State'' and ``out-of-
State bank'' have the same meaning as in section 44(f) of the 
Federal Deposit Insurance Act.]
  (b) Merger of National Bank Trust Company With Another Trust 
Company.--A national bank that is a trust company may engage in 
a consolidation or merger under this Act with any trust company 
with a different home State, under the same terms and 
conditions that would apply if the trust companies were located 
within the same State.
  (c) Definitions.--For purposes of this section, the terms 
``home State'', ``out-of-State bank'', and ``trust company'' 
each have the same meaning as in section 44(g) of the Federal 
Deposit Insurance Act.

           *       *       *       *       *       *       *

                              ----------                              


                   INTERNATIONAL BANKING ACT OF 1978

  Sec. 4. (a)  * * *

           *       *       *       *       *       *       *

  (d) Notwithstanding any other provision of this section, a 
foreign bank shall not receive deposits from citizens or 
residents of the United States or exercise fiduciary powers at 
any Federal agency. A foreign bank may, however, maintain at a 
Federal agency for the account of others credit balances 
incidental to, or arising out of, the exercise of its lawful 
powers.
  (e) No foreign bank may maintain both a Federal branch and a 
Federal agency in the same State if the maintenance of both an 
agency and a branch in the State is prohibited under the law of 
such State.

           *       *       *       *       *       *       *

  [(g)(1) Upon the opening of a Federal branch or agency in any 
State and thereafter, a foreign bank, in addition to any 
deposit requirements imposed under section 6 of this Act, shall 
keep on deposit, in accordance with such rules and regulations 
as the Comptroller may prescribe, with a member bank designated 
by such foreign bank, dollar deposits or investment securities 
of the type that may be held by national banks for their own 
accounts pursuant to paragraph ``Seventh'' of section 5136 of 
the Revised Statutes, as amended, in an amount as hereinafter 
set forth. Such depository bank shall be located in the State 
where such branch or agency is located and shall be approved by 
the Comptroller if it is a national bank and by the Board of 
Governors of the Federal Reserve System if it is a State Bank.
  [(2) The aggregate amount of deposited in investment 
securities (calculated on the basis of principal amount or 
market value, whichever is lower) and dollar deposits for each 
branch or agency established and operating under this section 
shall be not less than the greater of (1) that amount of 
capital (but not surplus) which would be required of a national 
bank being organized at this location, or (2) 5 per centum of 
the total liabilities of such branch or agency, including 
acceptances, but excluding (A) accrued expenses, and (B) 
amounts due and other liabilities to offices, branches, 
agencies, and subsidiaries of such foreign bank. The 
Comptroller may require that the assets deposited pursuant to 
this subsection shall be maintained in such amounts as he may 
from time to time deem necessary or desirable, for the 
maintenance of a sound financial condition, the protection of 
depositors, and the public interest, but such additional amount 
shall in no event be greater than would be required to conform 
to generally accepted banking practices as manifested by banks 
in the area in which the branch or agency is located.
  [(3) The deposit shall be maintained with any such member 
bank pursuant to a deposit agreement in such form and 
containing such limitations and conditions as the Comptroller 
may prescribe. So long as it continues business in the ordinary 
course such foreign bank shall, however, be permitted to 
collect income on the securities and funds so deposited and 
from time to time examine and exchange such securities.
  [(4) Subject to such conditions and requirements as may be 
prescribed by the Comptroller, each foreign bank shall hold in 
each State in which it has a Federal branch or agency, assets 
of such types and in such amount as the Comptroller may 
prescribe by general or specific regulation or ruling as 
necessary or desirable for the maintenance of a sound financial 
condition, the protection of depositors, creditors and the 
public interest. In determining compliance with any such 
prescribed asset requirements, the Comptroller shall give 
credit to (A) assets required to be maintained pursuant to 
paragraphs (1) and (2) of this subsection, (B) reserves 
required to be maintained pursuant to section 7(a) of this Act, 
and (C) assets pledged, and surety bonds payable, to the 
Federal Deposit Insurance Corporation to secure the payment of 
domestic deposits. The Comptroller may prescribe different 
asset requirements for branches or agencies in different 
States, in order to ensure competitive equality of Federal 
branches and agencies with State branches and agencies and 
domestic banks in those States.]
  (g) Capital Equivalency Deposit.--
          (1) In general.--Upon the opening of a Federal branch 
        or agency of a foreign bank in any State and 
        thereafter, the foreign bank, in addition to any 
        deposit requirements imposed under section 6, shall 
        keep on deposit, in accordance with such regulations as 
        the Comptroller of the Currency may prescribe in 
        accordance with paragraph (2), dollar deposits, 
        investment securities, or other assets in such amounts 
        as the Comptroller of the Currency determines to be 
        necessary for the protection of depositors and other 
        investors and to be consistent with the principles of 
        safety and soundness.
          (2) Limitation.--Notwithstanding paragraph (1), 
        regulations prescribed under such paragraph shall not 
        permit a foreign bank to keep assets on deposit in an 
        amount that is less than the amount required for a 
        State licensed branch or agency of a foreign bank under 
        the laws and regulations of the State in which the 
        Federal agency or branch is located.

           *       *       *       *       *       *       *


SEC. 15. COOPERATION WITH FOREIGN SUPERVISORS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Confidential Information Received From Foreign 
Supervisors.--
          (1) In general.--Except as provided in paragraph (3), 
        a Federal banking agency may not be compelled to 
        disclose information received from a foreign regulatory 
        or supervisory authority if--
                  (A) the foreign regulatory or supervisory 
                authority has, in good faith, determined and 
                represented to such Federal banking agency that 
                public disclosure of the information would 
                violate the laws applicable to that foreign 
                regulatory or supervisory authority; and
                  (B) the relevant Federal banking agency 
                obtained such information pursuant to--
                          (i) such procedures as the Federal 
                        banking agency may establish for use in 
                        connection with the administration and 
                        enforcement of Federal banking laws; or
                          (ii) a memorandum of understanding or 
                        other similar arrangement between the 
                        Federal banking agency and the foreign 
                        regulatory or supervisory authority.
          (2) Treatment under title 5, united states code.--For 
        purposes of section 552 of title 5, United States Code, 
        this subsection shall be treated as a statute described 
        in subsection (b)(3)(B) of such section.
          (3) Savings provision.--No provision of this section 
        shall be construed as--
                  (A) authorizing any Federal banking agency to 
                withhold any information from any duly 
                authorized committee of the House of 
                Representatives or the Senate; or
                  (B) preventing any Federal banking agency 
                from complying with an order of a court of the 
                United States in an action commenced by the 
                United States or such agency.
          (4) Federal banking agency defined.--For purposes of 
        this subsection, the term ``Federal banking agency'' 
        means the Board, the Comptroller, the Federal Deposit 
        Insurance Corporation, and the Director of the Office 
        of Thrift Supervision.

           *       *       *       *       *       *       *

                              ----------                              


SECURITIES EXCHANGE ACT OF 1934

           *       *       *       *       *       *       *


                  DEFINITIONS AND APPLICATION OF TITLE

  Sec. 3. (a) When used in this title, unless the context 
otherwise requires--
          (1) * * *

           *       *       *       *       *       *       *

          (6) The term ``bank'' means (A) a banking institution 
        organized under the laws of the United States or a 
        Federal savings association, as defined in section 2(5) 
        of the Home Owners' Loan Act, (B) a member bank of the 
        Federal Reserve System, (C) any other banking 
        institution, or savings association as defined in 
        section 2(4) of the Home Owners' Loan Act, whether 
        incorporated or not, doing business under the laws of 
        any State or of the United States, a substantial 
        portion of the business of which consists of receiving 
        deposits or exercising fiduciary powers similar to 
        those permitted to national banks under the authority 
        of the Comptroller of the Currency pursuant to the 
        first section of Public Law 87-722 (12 U.S.C. 92a), and 
        which is supervised and examined by State or Federal 
        authority having supervision over banks or savings 
        associations, and which is not operated for the purpose 
        of evading the provisions of [this title, and (D) a 
        receiver] this title, (D) an insured credit union (as 
        defined in section 101(7) of the Federal Credit Union 
        Act) but only for purposes of paragraphs (4) and (5) of 
        this subsection and only for activities otherwise 
        authorized by applicable laws to which such credit 
        unions are subject, and (E) a receiver, conservator, or 
        other liquidating agent of any institution or firm 
        included in clauses [(A), (B), or (C)] (A), (B), (C), 
        or (D) of this paragraph.

           *       *       *       *       *       *       *

          (34) The term ``appropriate regulatory agency'' 
        means--
                  (A) When used with respect to a municipal 
                securities dealer:
                          (i) * * *
                          (ii) the Board of Governors of the 
                        Federal Reserve System, in the case of 
                        a State member bank of the Federal 
                        Reserve System, a subsidiary or a 
                        department or division thereof, a bank 
                        holding company, a subsidiary of a bank 
                        holding company which is a bank other 
                        than a bank specified in clause [(i) or 
                        (iii)] (i), (iii), or (iv) of this 
                        subparagraph, or a subsidiary or a 
                        department or division of such 
                        subsidiary;
                          (iii) the Federal Deposit Insurance 
                        Corporation, in the case of a bank 
                        insured by the Federal Deposit 
                        Insurance Corporation (other than a 
                        member of the Federal Reserve System), 
                        or a subsidiary or department or 
                        division thereof; [and]
                          (iv) the Director of the Office of 
                        Thrift Supervision, in the case of a 
                        savings association (as defined in 
                        section 3(b) of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813(b))) the 
                        deposits of which are insured by the 
                        Federal Deposit Insurance Corporation, 
                        a subsidiary or a department or 
                        division of any such savings 
                        association, or a savings and loan 
                        holding company; and
                          [(iv)] (v) the Commission in the case 
                        of all other municipal securities 
                        dealers.
                  (B) When used with respect to a clearing 
                agency or transfer agent:
                          (i) * * *
                          (ii) the Board of Governors of the 
                        Federal Reserve System, in the case of 
                        a State member bank of the Federal 
                        Reserve System, a subsidiary thereof, a 
                        bank holding company, or a subsidiary 
                        of a bank holding company which is a 
                        bank other than a bank specified in 
                        clause [(i) or (iii)] (i), (iii), or 
                        (iv) of this subparagraph;
                          (iii) the Federal Deposit Insurance 
                        Corporation, in the case of a bank 
                        insured by the Federal Deposit 
                        Insurance Corporation (other than a 
                        member of the Federal Reserve System), 
                        or a subsidiary thereof; [and]
                          (iv) the Director of the Office of 
                        Thrift Supervision, in the case of a 
                        savings association (as defined in 
                        section 3(b) of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813(b))) the 
                        deposits of which are insured by the 
                        Federal Deposit Insurance Corporation, 
                        or a subsidiary of any such savings 
                        association, or a savings and loan 
                        holding company; and
                          [(iv)] (v) the Commission in the case 
                        of all other clearing agencies and 
                        transfer agents.
                  (C) When used with respect to a participant 
                or applicant to become a participant in a 
                clearing agency or a person requesting or 
                having access to services offered by a clearing 
                agency:
                          (i) * * *
                          (ii) the Board of Governors of the 
                        Federal Reserve System in the case of a 
                        State member bank of the Federal 
                        Reserve System, a bank holding company, 
                        or a subsidiary of a bank holding 
                        company, or a subsidiary of a bank 
                        holding company which is a bank other 
                        than a bank specified in clause [(i) or 
                        (iii)] (i), (iii), or (iv) of this 
                        subparagraph when the appropriate 
                        regulatory agency for such clearing 
                        agency is not the Commission;
                          (iii) the Federal Deposit Insurance 
                        Corporation, in the case of a bank 
                        insured by the Federal Deposit 
                        Insurance Corporation (other than a 
                        member of the Federal Reserve System) 
                        when the appropriate regulatory agency 
                        for such clearing agency is not the 
                        Commission; [and]
                          (iv) the Director of the Office of 
                        Thrift Supervision, in the case of a 
                        savings association (as defined in 
                        section 3(b) of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813(b))) the 
                        deposits of which are insured by the 
                        Federal Deposit Insurance Corporation, 
                        a savings and loan holding company, or 
                        a subsidiary of a savings and loan 
                        holding company when the appropriate 
                        regulatory agency for such clearing 
                        agency is not the Commission; and
                          [(iv)] (v) the Commission in all 
                        other cases.
                  (D) When used with respect to an 
                institutional investment manager which is a 
                bank the deposits of which are insured in 
                accordance with the Federal Deposit Insurance 
                Act:
                          (i) * * *
                          (ii) the Board of Governors of the 
                        Federal Reserve System, in the case of 
                        any other member bank of the Federal 
                        Reserve System; [and]
                          (iii) the Director of the Office of 
                        Thrift Supervision, in the case of a 
                        savings association (as defined in 
                        section 3(b) of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813(b))) the 
                        deposits of which are insured by the 
                        Federal Deposit Insurance Corporation; 
                        and
                          [(iii)] (iv) the Federal Deposit 
                        Insurance Corporation, in the case of 
                        any other insured bank.

           *       *       *       *       *       *       *

                  (F) When used with respect to a person 
                exercising investment discretion with respect 
                to an account:
                          (i) * * *
                          (ii) the Director of the Office of 
                        Thrift Supervision, in the case of a 
                        savings association (as defined in 
                        section 3(b) of the Federal Deposit 
                        Insurance Act (12 U.S.C. 1813(b))) the 
                        deposits of which are insured by the 
                        Federal Deposit Insurance Corporation; 
                        and
                          [(ii)] (iii) the Board of Governors 
                        of the Federal Reserve System in the 
                        case of any other member bank of the 
                        Federal Reserve System;
                          [(iii)] (iv) the Federal Deposit 
                        Insurance Corporation, in the case of 
                        any other bank the deposits of which 
                        are insured in accordance with the 
                        Federal Deposit Insurance Act; and
                          [(iv)] (v) the Commission in the case 
                        of all other such persons.

           *       *       *       *       *       *       *

                  (H) When used with respect to an institution 
                described in subparagraph (D), (F), or (G) of 
                section 2(c)(2), or held under section 4(f), of 
                the Bank Holding Company Act of 1956--
                          (i) * * *

           *       *       *       *       *       *       *

        As used in this paragraph, the terms ``bank holding 
        company'' and ``subsidiary of a bank holding company'' 
        have the meanings given them in section 2 of the Bank 
        Holding Company Act of 1956, and the term ``District of 
        Columbia savings and loan association'' means any 
        association subject to examination and supervision by 
        the Office of Thrift Supervision under section 8 of the 
        Home Owners' Loan Act of 1933. As used in this 
        paragraph, the term ``savings and loan holding 
        company'' has the meaning given it in section 10(a) of 
        the Home Owners' Loan Act (12 U.S.C. 1467a(a)).

           *       *       *       *       *       *       *


           REGISTRATION AND REGULATION OF BROKERS AND DEALERS

  Sec. 15. (a) * * *

           *       *       *       *       *       *       *

  (h) Limitations on State Law.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Selling and offering of deposit products.--No 
        law, rule, regulation, or order, or other 
        administrative action of any State or political 
        subdivision thereof shall directly or indirectly 
        require any individual who is an agent of 1 Federal 
        savings association (as such term is defined in section 
        2(5) of the Home Owners' Loan Act (12 U.S.C. 1462(5)) 
        in selling or offering deposit (as such term is defined 
        in section 3 of the Federal Deposit Insurance Act (12 
        U.S.C. 1813(l)) products issued by such association to 
        qualify or register as a broker, dealer, associated 
        person of a broker, or associated person of a dealer, 
        or to qualify or register in any other similar status 
        or capacity, if the individual does not--
                  (A) accept deposits or make withdrawals on 
                behalf of any customer of the association;
                  (B) offer or sell a deposit product as an 
                agent for another entity that is not subject to 
                supervision and examination by a Federal 
                banking agency (as defined in section 3(z) of 
                the Federal Deposit Insurance Act (12 U.S.C. 
                1813(z)), the National Credit Union 
                Administration, or any officer, agency, or 
                other entity of any State which has primary 
                regulatory authority over State banks, State 
                savings associations, or State credit unions;
                  (C) offer or sell a deposit product that is 
                not an insured deposit (as defined in section 
                3(m) of the Federal Deposit Insurance Act (12 
                U.S.C. 1813(m)));
                  (D) offer or sell a deposit product which 
                contains a feature that makes it callable at 
                the option of such Federal savings association; 
                or
                  (E) create a secondary market with respect to 
                a deposit product or otherwise add enhancements 
                or features to such product independent of 
                those offered by the association.

           *       *       *       *       *       *       *

                              ----------                              


                    INVESTMENT ADVISERS ACT OF 1940

TITLE II--INVESTMENT ADVISERS

           *       *       *       *       *       *       *


                              DEFINITIONS

  Sec. 202. (a) When used in this title, unless the context 
otherwise requires, the following definitions shall apply:
          (1) * * *
          (2) ``Bank'' means (A) a banking institution 
        organized under the laws of the United States or a 
        Federal savings association, as defined in section 2(5) 
        of the Home Owners' Loan Act, (B) a member bank of the 
        Federal Reserve System, (C) any other banking 
        institution, savings association as defined in section 
        2(4) of the Home Owners' Loan Act, or trust company, 
        whether incorporated or not, doing business under the 
        laws of any State or of the United States, a 
        substantial portion of the business of which consists 
        of receiving deposits or exercising fiduciary powers 
        similar to those permitted to national banks under the 
        authority of the Comptroller of the Currency, and which 
        is supervised and examined by State or Federal 
        authority having supervision over banks or savings 
        associations, and which is not operated for the purpose 
        of evading the provisions of [this title, and (D) a 
        receiver] this title, (D) an insured credit union (as 
        defined in section 101(7) of the Federal Credit Union 
        Act) but only for activities otherwise authorized by 
        applicable laws to which such credit unions are 
        subject, and (E) a receiver, conservator, or other 
        liquidating agent of any institution or firm included 
        in clauses [(A), (B), or (C)] (A), (B), (C), or (D) of 
        this paragraph.

           *       *       *       *       *       *       *


SEC. 210A. CONSULTATION.

  (a) Examination Results and Other Information.--
          (1) The appropriate Federal banking agency shall 
        provide the Commission upon request the results of any 
        examination, reports, records, or other information to 
        which such agency may have access--
                  (A) with respect to the investment advisory 
                activities of any--
                          (i) bank holding company or savings 
                        and loan holding company;

           *       *       *       *       *       *       *

                  (B) in the case of a bank holding company or 
                savings and loan holding company or bank that 
                has a subsidiary or a separately identifiable 
                department or division registered under that 
                section, with respect to the investment 
                advisory activities of such bank or bank 
                holding company or savings and loan holding 
                company.
          (2) The Commission shall provide to the appropriate 
        Federal banking agency upon request the results of any 
        examination, reports, records, or other information 
        with respect to the investment advisory activities of 
        any bank holding company or savings and loan holding 
        company, bank, or separately identifiable department or 
        division of a bank, which is registered under section 
        203 of this title.

           *       *       *       *       *       *       *

  (b) Effect on Other Authority.--Nothing in this section shall 
limit in any respect the authority of the appropriate Federal 
banking agency with respect to such bank holding company or 
savings and loan holding company (or affiliates or subsidiaries 
thereof), bank, or subsidiary, department, or division or a 
bank under any other provision of law.
  (c) Definition.--For purposes of this section, the term 
``appropriate Federal banking agency'' shall have the same 
meaning as given in section 3 of the Federal Deposit Insurance 
Act and includes the National Credit Union Administration 
Board, in the case of an insured credit union (as defined in 
section 101(7) of the Federal Credit Union Act).

           *       *       *       *       *       *       *

                              ----------                              


            SECTION 10 OF THE INVESTMENT COMPANY ACT OF 1940

                       AFFILIATIONS OF DIRECTORS

  Sec. 10. (a) * * *

           *       *       *       *       *       *       *

  (c) No registered investment company shall have a majority of 
its board of directors consisting of persons who are officers, 
directors, or employees of any one bank (together with its 
affiliates and subsidiaries) or any one bank holding company 
(together with its affiliates and subsidiaries) (as such terms 
are defined in section 2 of the Bank Holding Company Act of 
1956) or any one savings and loan holding company (together 
with its affiliates and subsidiaries) (as such terms are 
defined in section 10 of the Home Owners' Loan Act), except 
that, if on March 15, 1940, any registered investment company 
had a majority of its directors consisting of persons who are 
directors, officers, or employees of any one bank, such company 
may continue to have the same percentage of its board of 
directors consisting of persons who are directors, officers, or 
employees of such bank.

           *       *       *       *       *       *       *

                              ----------                              


                         HOME OWNERS' LOAN ACT

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

  This Act may be cited as the ``Home Owners' Loan Act''.

                            TABLE OF CONTENTS

Sec. 1. Short title and table of contents.
     * * * * * * *
[Sec. 5. Federal savings associations.
[Sec. 6. Liquid asset requirements.]
Sec. 5. Savings associations.
Sec. 6. [Repealed.]
     * * * * * * *

SEC. 4. SUPERVISION OF SAVINGS ASSOCIATIONS.

  [(a) Federal Savings Associations.--] (a) General 
Responsibilities of the Director.--
          (1) * * *

           *       *       *       *       *       *       *


[SEC. 5. FEDERAL SAVINGS ASSOCIATIONS.]

SEC. 5. SAVINGS ASSOCIATIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Loans and Investments.--To the extent specified in 
regulations of the Director, a Federal savings association may 
invest in, sell, or otherwise deal in the following loans and 
other investments:
          (1) Loans or investments without percentage of assets 
        limitation.--Without limitation as a percentage of 
        assets, the following are permitted:
                  (A) * * *

           *       *       *       *       *       *       *

                  (V) Auto loans.--Loans and leases for motor 
                vehicles acquired for personal, family, or 
                household purposes.
                  (W) Small business loans.--Small business 
                loans, as defined in regulations which the 
                Director shall prescribe.
          (2) Loans or investments limited to a percentage of 
        assets or capital.--The following loans or investments 
        are permitted, but only to the extent specified:
                  (A) Commercial and other loans.--Secured or 
                unsecured loans for commercial, corporate, 
                business, or agricultural purposes. The 
                aggregate amount of loans made under this 
                subparagraph may not exceed 20 percent of the 
                total assets of the Federal savings 
                association[, and amounts in excess of 10 
                percent of such total assets may be used under 
                this subparagraph only for small business 
                loans, as that term is defined by the 
                Director].

           *       *       *       *       *       *       *

          (3) Loans or investments limited to 5 percent of 
        assets.--The following loans or investments are 
        permitted, but not to exceed 5 percent of assets of a 
        Federal savings association for each subparagraph:
                  [(A) Community development investments.--
                Investments in real property and obligations 
                secured by liens on real property located 
                within a geographic area or neighborhood 
                receiving concentrated development assistance 
                by a local government under title I of the 
                Housing and Community Development Act of 1974. 
                No investment under this subparagraph in such 
                real property may exceed an aggregate of 2 
                percent of the assets of the Federal savings 
                association.]
                  (A) [Repealed]

           *       *       *       *       *       *       *

                  (D) Direct investments to promote the public 
                welfare.--
                          (i) In general.--A Federal savings 
                        association may make investments 
                        designed primarily to promote the 
                        public welfare, including the welfare 
                        of low- and moderate-income communities 
                        or families through the provision of 
                        housing, services, and jobs.
                          (ii) Direct investments or 
                        acquisition of interest in other 
                        companies.--Investments under clause 
                        (i) may be made directly or by 
                        purchasing interests in an entity 
                        primarily engaged in making such 
                        investments.
                          (iii) Prohibition on unlimited 
                        liability.--No investment may be made 
                        under this subparagraph which would 
                        subject a Federal savings association 
                        to unlimited liability to any person.
                          (iv) Single investment limitation to 
                        be established by director.--Subject to 
                        clauses (v) and (vi), the Director 
                        shall establish, by order or 
                        regulation, limits on--
                                  (I) the amount any savings 
                                association may invest in any 1 
                                project; and
                                  (II) the aggregate amount of 
                                investment of any savings 
                                association under this 
                                subparagraph.
                          (v) Flexible aggregate investment 
                        limitation.--The aggregate amount of 
                        investments of any savings association 
                        under this subparagraph may not exceed 
                        an amount equal to the sum of 5 percent 
                        of the savings association's capital 
                        stock actually paid in and unimpaired 
                        and 5 percent of the savings 
                        association's unimpaired surplus, 
                        unless--
                                  (I) the Director determines 
                                that the savings association is 
                                adequately capitalized; and
                                  (II) the Director determines, 
                                by order, that the aggregate 
                                amount of investments in a 
                                higher amount than the limit 
                                under this clause will pose no 
                                significant risk to the 
                                affected deposit insurance 
                                fund.
                          (vi) Maximum aggregate investment 
                        limitation.--Notwithstanding clause 
                        (v), the aggregate amount of 
                        investments of any savings association 
                        under this subparagraph may not exceed 
                        an amount equal to the sum of 10 
                        percent of the savings association's 
                        capital stock actually paid in and 
                        unimpaired and 10 percent of the 
                        savings association's unimpaired 
                        surplus.
                          (vii) Investments not subject to 
                        other limitation on quality of 
                        investments.--No obligation a Federal 
                        savings association acquires or retains 
                        under this subparagraph shall be taken 
                        into account for purposes of the 
                        limitation contained in section 28(d) 
                        of the Federal Deposit Insurance Act on 
                        the acquisition and retention of any 
                        corporate debt security not of 
                        investment grade.
          (4) Other loans and investments.--The following 
        additional loans and other investments to the extent 
        authorized below:
                  (A) * * *
                  (B) Service [corporations] companies.--
                Investments in the capital stock, obligations, 
                or other securities of any [corporation 
                organized under the laws of the State in which 
                the Federal savings association's home office 
                is located, if such corporation's entire 
                capital stock is available for purchase] 
                company, if the entire capital of the company 
                is available for purchase only [by savings 
                associations of such State and by Federal 
                associations having their home offices in such 
                State] by State and Federal depository 
                institutions. No Federal savings association 
                may make any investment under this subparagraph 
                if the association's aggregate outstanding 
                investment under this subparagraph would exceed 
                3 percent of the association's assets. Not less 
                than one-half of the investment permitted under 
                this subparagraph which exceeds 1 percent of 
                the association's assets shall be used 
                primarily for community, inner-city, and 
                community development purposes.

           *       *       *       *       *       *       *

                  [(D) Small business investment companies.--A 
                Federal savings association may invest in 
                stock, obligations, or other securities of any 
                small business investment company formed 
                pursuant to section 301(d) of the Small 
                Business Investment Act of 1958 for the purpose 
                of aiding members of a Federal home loan bank. 
                A Federal savings association may not make any 
                investment under this subparagraph if its 
                aggregate outstanding investment under this 
                subparagraph would exceed 1 percent of the 
                assets of such savings association.]
                  (D) Small business investment companies.--Any 
                Federal savings association may invest in 1 or 
                more small business investment companies, or in 
                any entity established to invest solely in 
                small business investment companies formed 
                under the Small Business Investment Act of 
                1958, except that the total amount of 
                investments under this subparagraph may not at 
                any time exceed the amount equal to 5 percent 
                of capital and surplus of the savings 
                association.

           *       *       *       *       *       *       *

  (d) Regulatory Authority.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Regulations.--
                  (A) * * *
                  (B) Mergers and consolidations with 
                nondepository institution affiliates.--
                          (i) In general.--Upon the approval of 
                        the Director, a Federal savings 
                        association may merge with any 
                        nondepository institution affiliate of 
                        the savings association.
                          (ii) Rule of construction.--No 
                        provision of clause (i) shall be 
                        construed as--
                                  (I) affecting the 
                                applicability of section 18(c) 
                                of the Federal Deposit 
                                Insurance Act; or
                                  (II) granting a Federal 
                                savings association any power 
                                or any authority to engage in 
                                any activity that is not 
                                authorized for a Federal 
                                savings association under any 
                                other provision of this Act or 
                                any other provision of law.
                  [(B)] (C) FDIC or rtc as conservator or 
                receiver.--In any case where the Federal 
                Deposit Insurance Corporation or the Resolution 
                Trust Corporation is the conservator or 
                receiver, any regulations prescribed by the 
                Director shall be consistent with any 
                regulations prescribed by the Federal Deposit 
                Insurance Corporation pursuant to the Federal 
                Deposit Insurance Act.

           *       *       *       *       *       *       *

  (n) Trusts.--
          (1) Permits.--The Director may grant by special 
        permit to a Federal savings association applying 
        therefor the right to act as trustee, executor, 
        administrator, guardian, or in any other fiduciary 
        capacity in which State banks, trust companies, or 
        other corporations which compete with Federal savings 
        associations are permitted to act under the laws of the 
        State in which the Federal savings association is 
        located. Subject to the regulations of the Director, 
        service [corporations] companies may invest in State or 
        federally chartered corporations which are located in 
        the State in which the home office of the Federal 
        savings association is located and which are engaged in 
        trust activities.

           *       *       *       *       *       *       *

          (11) Funeral- and cemetery-related fiduciary 
        services.--
                  (A) In general.--A funeral director or 
                cemetery operator, when acting in such 
                capacity, (or any other person in connection 
                with a contract or other agreement with a 
                funeral director or cemetery operator) may 
                engage any Federal savings association, 
                regardless of where the association is located, 
                to act in any fiduciary capacity in which the 
                savings association has the right to act in 
                accordance with this section, including holding 
                funds deposited in trust or escrow by the 
                funeral director or cemetery operator (or by 
                such other party), and the savings association 
                may act in such fiduciary capacity on behalf of 
                the funeral director or cemetery operator (or 
                such other person).
                  (B) Definitions.--For purposes of this 
                paragraph, the following definitions shall 
                apply:
                          (i) Cemetery.--The term ``cemetery'' 
                        means any land or structure used, or 
                        intended to be used, for the interment 
                        of human remains in any form.
                          (ii) Cemetery operator.--The term 
                        ``cemetery operator'' means any person 
                        who contracts or accepts payment for 
                        merchandise, endowment, or perpetual 
                        care services in connection with a 
                        cemetery.
                          (iii) Funeral director.--The term 
                        ``funeral director'' means any person 
                        who contracts or accepts payment to 
                        provide or arrange--
                                  (I) services for the final 
                                disposition of human remains; 
                                or
                                  (II) funeral services, 
                                property, or merchandise 
                                (including cemetery services, 
                                property, or merchandise).

           *       *       *       *       *       *       *

  (q) Tying Arrangements.--(1) A savings association may not in 
any manner extend credit, lease, or sell property of any kind, 
or furnish any service, or fix or vary the consideration for 
any of the foregoing, on the condition or requirement--
          (A) that the customer shall obtain additional credit, 
        property, or service from such savings association, or 
        from any [service corporation] service company or 
        affiliate of such association, other than a loan, 
        discount, deposit, or trust service;
          (B) that the customer provide additional credit, 
        property, or service to such association, or to any 
        [service corporation] service company or affiliate of 
        such association, other than those related to and 
        usually provided in connection with a similar loan, 
        discount, deposit, or trust service; and
          (C) that the customer shall not obtain some other 
        credit, property, or service from a competitor of such 
        association, or from a competitor of any [service 
        corporation] service company or affiliate of such 
        association, other than a condition or requirement that 
        such association shall reasonably impose in connection 
        with credit transactions to assure the soundness of 
        credit.

           *       *       *       *       *       *       *

  (r) Out-of-State Branches.--(1) No Federal savings 
association may establish, retain, or operate a branch outside 
the State in which the Federal savings association has its home 
office, unless the association qualifies as a domestic building 
and loan association under section 7701(a)(19) of the Internal 
Revenue Code of 1986 or meets the asset composition test 
imposed by subparagraph (C) of that section on institutions 
seeking so to qualify, or qualifies as a qualified thrift 
lender, as determined under section 10(m) of this Act. [No out-
of-State branch so established shall be retained or operated 
unless the total assets of the Federal savings association 
attributable to all branches of the Federal savings association 
in that State would qualify the branches as a whole, were they 
otherwise eligible, for treatment as a domestic building and 
loan association under section 7701(a)(19) or as a qualified 
thrift lender, as determined under section 10(m) of this Act, 
as applicable.]

           *       *       *       *       *       *       *

  (t) Capital Standards.--
          (1) * * *

           *       *       *       *       *       *       *

          [(4) Special rules for purchased mortgage servicing 
        rights.--
                  [(A) In general.--Notwithstanding paragraphs 
                (1)(C) and (9), the standards prescribed under 
                paragraph (1) may permit a savings association 
                to include in calculating capital for the 
                purpose of the leverage limit and risk-based 
                capital requirement prescribed under paragraph 
                (1), on terms no less stringent than under both 
                the capital standards applicable to State 
                nonmember banks and (except as to the amount 
                that may be included in calculating capital) 
                the capital standards applicable to national 
                banks, 90 percent of the fair market value of 
                readily marketable purchased mortgage servicing 
                rights.
                  [(B) Tangible capital requirement.--
                Notwithstanding paragraphs (1)(C) and (9)(C), 
                the standards prescribed under paragraph (1) 
                may permit a savings association to include in 
                calculating capital for the purpose of the 
                tangible capital requirement prescribed under 
                paragraph (1), on terms no less stringent than 
                under both the capital standards applicable to 
                State nonmember banks and (except as to the 
                amount that may be included in calculating 
                capital) the capital standards applicable to 
                national banks, 90 percent of the fair market 
                value of readily marketable purchased mortgage 
                servicing rights.
                  [(C) Percentage limitation prescribed by 
                fdic.--Notwithstanding paragraph (1)(C) and 
                subparagraphs (A) and (B) of this paragraph--
                          [(i) for the purpose of subparagraph 
                        (A), the maximum amount of purchased 
                        mortgage servicing rights that may be 
                        included in calculating capital under 
                        the leverage limit and the risk-based 
                        capital requirement prescribed under 
                        paragraph (1) may not exceed the amount 
                        that could be included if the savings 
                        association were an insured State 
                        nonmember bank; and
                          [(ii) for the purpose of subparagraph 
                        (B), the Corporation shall prescribe a 
                        maximum percentage of the tangible 
                        capital requirement that savings 
                        associations may satisfy by including 
                        purchased mortgage servicing rights in 
                        calculating such capital.
                  [(D) Quarterly valuation.--The fair market 
                value of purchased mortgage servicing rights 
                shall be determined not less often than 
                quarterly.]
          (4) [Repealed]

           *       *       *       *       *       *       *

          (9) Definitions.--For purposes of this subsection--
                  (A) Core capital.--Unless the Director 
                prescribes a more stringent definition, the 
                term ``core capital'' means core capital as 
                defined by the Comptroller of the Currency for 
                national banks, less any unidentifiable 
                [intangible assets, plus any purchased mortgage 
                servicing rights excluded from the 
                Comptroller's definition of capital but 
                included in calculating the core capital of 
                savings associations pursuant to paragraph 
                (4).] intangible assets.

           *       *       *       *       *       *       *

  (x) Home State Citizenship.--In determining whether a Federal 
court has diversity jurisdiction over a case in which a Federal 
savings association is a party, the Federal savings association 
shall be considered to be a citizen only of the State in which 
such savings association has its main office.

           *       *       *       *       *       *       *


SEC. 10. REGULATION OF HOLDING COMPANIES.

  (a) Definitions.--
          (1) In general.--As used in this section, unless the 
        context otherwise requires--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) Company.--The term ``company'' means any 
                corporation, partnership, business trust, 
                joint-stock company, or similar organization, 
                or any other trust unless by its terms it must 
                terminate within 25 years or not later than 21 
                years and 10 months after the death of 
                individuals living on the effective date of the 
                trust, but does not include the Federal Deposit 
                Insurance Corporation, the Resolution Trust 
                Corporation, any Federal home loan bank, or any 
                company the majority of the shares of which is 
                owned by the United States or any State, or by 
                an instrumentality of the United States or any 
                State.

           *       *       *       *       *       *       *

          (3) Exclusions.--Notwithstanding any other provision 
        of this subsection, the term ``savings and loan holding 
        company'' [does not include--
                  [(A) any company by virtue] does not include 
                any company by virtue of its ownership or 
                control of voting shares of a savings 
                association or a savings and loan holding 
                company acquired in connection with the 
                underwriting of securities if such shares are 
                held only for such period of time (not 
                exceeding 120 days unless extended by the 
                Director) as will permit the sale thereof on a 
                reasonable basis[; and].
                  [(B) any trust (other than a pension, profit-
                sharing, shareholders', voting, or business 
                trust) which controls a savings association or 
                a savings and loan holding company if such 
                trust by its terms must terminate within 25 
                years or not later than 21 years and 10 months 
                after the death of individuals living on the 
                effective date of the trust, and is (i) in 
                existence on June 26, 1967, or (ii) a 
                testamentary trust created on or after June 26, 
                1967.]

           *       *       *       *       *       *       *

  [(f) Declaration of Dividend.--Every subsidiary savings 
association of a savings and loan holding company shall give 
the Director not less than 30 days' advance notice of the 
proposed declaration by its directors of any dividend on its 
guaranty, permanent, or other nonwithdrawable stock. Such 
notice period shall commence to run from the date of receipt of 
such notice by the Director. Any such dividend declared within 
such period, or without the giving of such notice to the 
Director, shall be invalid and shall confer no rights or 
benefits upon the holder of any such stock.]
  (f) Declaration of Dividend.--The Director may--
          (1) require a savings association that is a 
        subsidiary of a savings and loan holding company to 
        give prior notice to the Director of the intent of the 
        savings association to pay a dividend on its guaranty, 
        permanent, or other nonwithdrawable stock; and
          (2) establish conditions on the payment of dividends 
        by such a savings association.

           *       *       *       *       *       *       *

  (m) Qualified Thrift Lender Test.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) Qualified thrift investments.--
                          (i) * * *
                          (ii) Assets includible without 
                        limit.--The following assets are 
                        described in this clause for purposes 
                        of clause (i):
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (VIII) Loans and leases for 
                                motor vehicles acquired for 
                                personal, family, or household 
                                purposes.
                          (iii) Assets includible subject to 
                        percentage restriction.--The following 
                        assets are described in this clause for 
                        purposes of clause (i):
                                  (I) * * *
                                  (II) Investments in the 
                                capital stock or obligations 
                                of, and any other security 
                                issued by, any [service 
                                corporation] service company if 
                                such [service corporation] 
                                service company derives at 
                                least 80 percent of its annual 
                                gross revenues from activities 
                                directly related to purchasing, 
                                refinancing, constructing, 
                                improving, or repairing 
                                domestic residential real 
                                estate or manufactured housing.

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL HOME LOAN BANK ACT

           *       *       *       *       *       *       *


             ELIGIBILITY OF MEMBERS AND NONMEMBER BORROWERS

  Sec. 4. (a) Criteria for Eligibility.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) Certain privately insured credit unions.--
                  (A) In general.--A credit union which has 
                been determined, in accordance with section 
                43(e)(1) of the Federal Deposit Insurance Act 
                and subject to the requirements of subparagraph 
                (B), to meet all eligibility requirements for 
                Federal deposit insurance shall be treated as 
                an insured depository institution for purposes 
                of determining the eligibility of such credit 
                union for membership in a Federal home loan 
                bank under paragraphs (1), (2), and (3).
                  (B) Certification by appropriate 
                supervisor.--
                          (i) In general.--For purposes of this 
                        paragraph and subject to clause (ii), a 
                        credit union which lacks Federal 
                        deposit insurance and which has applied 
                        for membership in a Federal home loan 
                        bank may be treated as meeting all the 
                        eligibility requirements for Federal 
                        deposit insurance only if the 
                        appropriate supervisor of the State in 
                        which the credit union is chartered has 
                        determined that the credit union meets 
                        all the eligibility requirements for 
                        Federal deposit insurance as of the 
                        date of the application for membership.
                          (ii) Certification deemed valid.--If, 
                        in the case of any credit union to 
                        which clause (i) applies, the 
                        appropriate supervisor of the State in 
                        which such credit union is chartered 
                        fails to make a determination pursuant 
                        to such clause by the end of the 6-
                        month period beginning on the date of 
                        the application, the credit union shall 
                        be deemed to have met the requirements 
                        of clause (i).
                  (C) Security interests of federal home loan 
                bank not avoidable.--Notwithstanding any 
                provision of State law authorizing a 
                conservator or liquidating agent of a credit 
                union to repudiate contracts, no such provision 
                shall apply with respect to--
                          (i) any extension of credit from any 
                        Federal home loan bank to any credit 
                        union which is a member of any such 
                        bank pursuant to this paragraph; or
                          (ii) any security interest in the 
                        assets of such credit union securing 
                        any such extension of credit.

           *       *       *       *       *       *       *


                          MANAGEMENT OF BANKS

  Sec. 7. (a) * * *

           *       *       *       *       *       *       *

  (d) The term of each director, whether elected or appointed, 
shall be [3] 4 years. The board of directors of each Federal 
home loan bank and the Finance Board shall adjust the terms of 
members first elected or appointed after the date of the 
enactment of the [Federal Home Loan Bank System Modernization 
Act of 1999] Financial Services Regulatory Relief Act of 2003 
to ensure that the terms of the members of the board of 
directors are staggered with approximately [\1/3\] \1/4\ of the 
terms expiring each year. If any person, before or after, or 
partly before and partly after, the date of the enactment of 
this sentence, has been elected to each of three consecutive 
full terms as an elective director of a Federal home loan bank 
in any elective directorship or elective directorships and has 
served for all or part of each of said terms, such person shall 
not be eligible for election to an elective directorship of 
such bank for a term which begins earlier than two years after 
the expiration of the last expiring of said three terms. The 
Board is hereby authorized to prescribe such rules and 
regulations as it may deem necessary or appropriate for the 
nomination and election of directors of Federal home loan 
banks, including, without limitation on the generality of the 
foregoing, rules and regulations with respect to the breaking 
of ties and with respect to the inclusion of more than one 
directorship on a single ballot and the methods of voting and 
of determining the results of voting in such cases.

           *       *       *       *       *       *       *

  [(i) Directors' Compensation.--
          [(1) In general.--Subject to paragraph (2), each bank 
        may pay its directors reasonable compensation for the 
        time required of them, and their necessary expenses, in 
        the performance of their duties, in accordance with the 
        resolutions adopted by the such directors, subject to 
        the approval of the board.
          [(2) Limitation.--
                  [(A) In general.--The annual salary of each 
                of the following members of the board of 
                directors of a Federal home loan bank may not 
                exceed the amount specified:

                                                [The annual compensation
In the case of the--                                  may not exceed--  
    Chairperson...............................................  $25,000 
    Vice Chairperson..........................................  $20,000 
    All other members.........................................  $15,000.

                  [(B) Adjustment.--Beginning January 1, 2001, 
                each dollar amount referred to in the table in 
                subparagraph (A) shall be adjusted annually by 
                the Finance Board, based on the annual 
                percentage increase, if any, in the Consumer 
                Price Index for all urban consumers, as 
                published by the Department of Labor.
                  [(C) Expenses.--Subparagraph (A) shall not be 
                construed as prohibiting the reimbursement of 
                expenses incurred by members of the board of 
                directors of any Federal home loan bank in 
                connection with service on the board of 
                directors.]
  (i) Directors' Compensation.--
          (1) In general.--Each Federal home loan bank may pay 
        the directors on the board of directors of the bank 
        reasonable compensation for the time required of such 
        directors, and reasonable expenses incurred by the 
        directors, in connection with service on the board of 
        directors, in accordance with resolutions adopted by 
        the board of directors and subject to the approval of 
        the board.
          (2) Annual report by the board.--Information 
        regarding compensation and expenses paid by the Federal 
        home loan banks to the directors on the boards of 
        directors of the banks shall be included in the annual 
        report submitted to the Congress by the Board pursuant 
        to section 2B(d).

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL CREDIT UNION ACT

           *       *       *       *       *       *       *


                     TITLE I--FEDERAL CREDIT UNIONS

                              definitions

  Sec. 101. As used in this Act--
          (1) * * *

           *       *       *       *       *       *       *

          (3) the term ``Administration'' means the National 
        Credit Union Administration; [and]

           *       *       *       *       *       *       *

          (5) The terms ``member account'' and ``account'' mean 
        a share, share certificate, or share draft account 
        [account] of a member of a credit union of a type 
        approved by the Board which evidences money or its 
        equivalent received or held by a credit union in the 
        usual course of business and for which it has given or 
        is obligated to give credit to the account of the 
        member, and, in the case of a credit union serving 
        predominantly low-income members (as defined by the 
        Board), such terms (when referring to the account of a 
        nonmember served by such credit union) mean a share, 
        share certificate, or share draft account account of 
        such nonmember which is of a type approved by the Board 
        and evidences money or its equivalent received or held 
        by such credit union in the usual course of business 
        and for which it has given or is obligated to give 
        credit to the account of such nonmember, and such terms 
        mean share, share certificate, or share draft account 
        [accounts] of nonmember credit unions and nonmember 
        units of Federal, State, or local governments and 
        political subdivisions thereof enumerated in section 
        207 of this Act, and such terms mean custodial accounts 
        established for loans sold in whole or in part pursuant 
        to section 107(13): Provided, That for purposes of 
        insured State credit unions, reference in this 
        paragraph to ``share'', ``share certificate'', or 
        ``share draft'' accounts includes, as determined by the 
        Board, the equivalent of such accounts under State law;

           *       *       *       *       *       *       *


                                 powers

  Sec. 107. [A Federal credit union] (a) In General.--Any 
Federal credit union shall have succession in its corporate 
name during its existence and shall have power--
          (1) * * *

           *       *       *       *       *       *       *

          (5) [to make loans, the maturities of which shall not 
        exceed twelve years except as otherwise provided 
        herein] to make loans, the maturities of which shall 
        not exceed 15 years or any longer maturity as the Board 
        may allow, in regulations, except as otherwise provided 
        in this Act, and extend lines of credit to its members, 
        to other credit unions, and to credit union 
        organizations and to participate with other credit 
        unions, credit union organizations, or financial 
        organizations in making loans to credit union members 
        in accordance with the following:
                  (A) Loans to members shall be made in 
                conformity with criteria established by the 
                board of directors: Provided, That--
                          (i) * * *
                          [(ii) a loan to finance the purchase 
                        of a mobile home, which shall be 
                        secured by a first lien on such mobile 
                        home, to be used by the credit union 
                        member as his residence, or a second 
                        mortgage loan secured by a residential 
                        dwelling which is the residence of a 
                        credit union member shall have a 
                        maturity not to exceed 15 years or any 
                        longer term which the Board may allow;]
                          [(iii)] (ii) a loan secured by the 
                        insurance or guarantee of, or with 
                        advance commitment to purchase the loan 
                        by, the Federal Government, a State 
                        government, or any agency of either may 
                        be made for the maturity and under the 
                        terms and conditions specified in the 
                        law under which such insurance, 
                        guarantee, or commitment is provided;
                          [(iv)] (iii) a loan or aggregate of 
                        loans to a director or member of the 
                        supervisory or credit committee of the 
                        credit union making the loan which 
                        exceeds $20,000 plus pledged shares, be 
                        approved by the board of directors;
                          [(v)] (iv) loans to other members for 
                        which directors or members of the 
                        supervisory or credit committee act as 
                        guarantor or endorser be approved by 
                        the board of directors when such loans 
                        standing alone or when added to any 
                        outstanding loan or loans of the 
                        guarantor or endorser exceeds $20,000;
                          [(vi)] (v) the rate of interest may 
                        not exceed 15 per centum per annum on 
                        the unpaid balance inclusive of all 
                        finance charges, except that the Board 
                        may establish--
                                  (I) after consultation with 
                                the appropriate committees of 
                                the Congress, the Department of 
                                Treasury, and the Federal 
                                financial institution 
                                regulatory agencies, an 
                                interest rate ceiling exceeding 
                                such 15 per centum per annum 
                                rate, for periods not to exceed 
                                18 months, if it determines 
                                that money market interest 
                                rates have risen over the 
                                preceding [six-month period and 
                                that prevailing interest rate 
                                levels] 6-month period or that 
                                prevailing interest rate levels 
                                threaten the safety and 
                                soundness of individual credit 
                                unions as evidenced by adverse 
                                trends in liquidity, capital, 
                                earnings, and growth; and

           *       *       *       *       *       *       *

                          [(vii)] (vi) the taking, receiving, 
                        reserving, or charging of a rate of 
                        interest greater than is allowed by 
                        this paragraph, when knowingly done, 
                        shall be deemed a forfeiture of the 
                        entire interest which the note, bill, 
                        or other evidence of debt carries with 
                        it, or which has been agreed to be paid 
                        thereon. If such greater rate of 
                        interest has been paid, the person by 
                        whom it has been paid, or his legal 
                        representatives, may recover back from 
                        the credit union taking or receiving 
                        the same, in an action in the nature of 
                        an action of debt, the entire amount of 
                        interest paid; but such action must be 
                        commenced within two years from the 
                        time the usurious collection was made;
                          [(viii)] (vii) a borrower may repay 
                        his loan, prior to maturity in whole or 
                        in part on any business day without 
                        penalty, except that on a first or 
                        second mortgage loan a Federal credit 
                        union may require that any partial 
                        prepayments (I) be made on the date 
                        monthly installments are due, and (II) 
                        be in the amount of that part of one or 
                        more monthly installments which would 
                        be applicable to principal;
                          [(ix)] (viii) loans shall be paid or 
                        amortized in accordance with rules and 
                        regulations prescribed by the Board 
                        after taking into account the needs or 
                        conditions of the borrowers, the 
                        amounts and duration of the loans, the 
                        interests of the members and the credit 
                        unions, and such other factors as the 
                        Board deems relevant; and
                          [(x)] (ix) loans must be approved by 
                        the credit committee or a loan officer, 
                        but no loan may be made to any member 
                        if, upon the making of that loan, the 
                        member would be indebted to the Federal 
                        credit union upon loans made to him in 
                        an aggregate amount which would exceed 
                        10 per centum of the credit union's 
                        unimpaired capital and surplus.

           *       *       *       *       *       *       *

                  (E) Participation loans with other credit 
                unions, credit union organizations, or 
                financial organizations shall be in accordance 
                with written policies of the board of 
                directors: Provided, That a credit union which 
                originates a loan for which participation 
                arrangements are made in accordance with this 
                subsection shall retain an interest of at least 
                10 per centum of the face amount of the 
                loan[.];

           *       *       *       *       *       *       *

          (6) to receive from its members, from other credit 
        unions, from an officer, employee, or agent of those 
        nonmember units of Federal, Indian tribal, State, or 
        local governments and political subdivisions thereof 
        enumerated in section 207 of this Act and in the manner 
        so prescribed, from the central liquidity facility, and 
        from nonmembers in the case of credit unions serving 
        predominately low-income members (as defined by the 
        Board) payments, representing equity, on--
                  (A) * * *

           *       *       *       *       *       *       *

        subject to such terms, rates, and conditions as may be 
        established by the board of directors, within 
        limitations prescribed by the Board[.];
          (7) to invest its funds (A) in loans exclusively to 
        members; (B) in obligations of the United States of 
        America, or securities fully guaranteed as to principal 
        and interest thereby; (C) in accordance with rules and 
        regulations prescribed by the Board, in loans to other 
        credit unions in the total amount not exceeding 25 per 
        centum of its paid-in and unimpaired capital and 
        surplus; (D) in shares or accounts of savings and loan 
        associations or mutual savings banks, the accounts of 
        which are insured by [the Federal Savings and Loan 
        Insurance Corporation or] the Federal Deposit Insurance 
        Corporation; (E) in obligations issued by banks for 
        cooperatives, Federal land banks, Federal intermediate 
        credit banks, Federal home loan banks, [the Federal 
        Home Loan Bank Board,] the Federal Housing Finance 
        Board, or any corporation designated in section 101 of 
        the Government Corporation Control Act as a wholly 
        owned Government corporation; or in obligations, 
        participations, or other instruments of or issued by, 
        or fully guaranteed as to principal and interest by, 
        the Federal National Mortgage Association or the 
        Government National Mortgage Association; or in 
        mortgages, obligations, or other securities which are 
        or ever have been sold by the Federal Home Loan 
        Mortgage Corporation pursuant to section 305 or section 
        306 of the Federal Home Loan Mortgage Corporation Act; 
        or in obligations, participations, securities, or other 
        instruments of, or issued by, or fully guaranteed as to 
        principal and interest by any other agency of the 
        United States and a Federal credit union may issue and 
        sell securities which are guaranteed pursuant to 
        section 306(g) of the National Housing Act; (F) in 
        participation certificates evidencing beneficial 
        interests in obligations, or in the right to receive 
        interest and principal collections therefrom, which 
        obligations have been subjected by one or more 
        Government agencies to a trust or trusts for which any 
        executive department, agency, or instrumentality of the 
        United States (or the head thereof) has been named to 
        act as trustee; (G) in shares or deposits of any 
        central credit union in which such investments are 
        specifically authorized by the board of directors of 
        the Federal credit union making the investment; (H) in 
        shares, share certificates, or share deposits of 
        federally insured credit unions; (I) in the shares, 
        stocks, or obligations of any other organization, 
        providing services which are associated with the 
        routine operations of credit unions, [up to 1 per 
        centum of the total paid] up to 3 percent of the total 
        paid in and unimpaired capital and surplus of the 
        credit union with the approval of the Board: Provided, 
        however, That such authority does not include the power 
        to acquire control directly or indirectly, of another 
        financial institution, nor invest in shares, stocks or 
        obligations of an insurance company, trade association, 
        liquidity facility or any other similar organization, 
        corporation, or association, except as otherwise 
        expressly provided by this Act; (J) in the capital 
        stock of the National Credit Union Central Liquidity 
        Facility; (K) investments in obligations of, or issued 
        by, any State or political subdivision thereof 
        (including any agency, corporation, or instrumentality 
        of a State or political subdivision), except that no 
        credit union may invest more than 10 per centum of its 
        unimpaired capital and surplus in the obligations of 
        any one issuer (exclusive of general obligations of the 
        issuer)[.];

           *       *       *       *       *       *       *

          (9) to borrow, in accordance with such rules and 
        regulations as may be prescribed by the Board, from any 
        source, in an aggregate amount not exceeding, except as 
        authorized by the Board in carrying out the provisions 
        of [subchapter III] title III, 50 per centum of its 
        paid-in and unimpaired capital and surplus: Provided, 
        That any Federal credit union may discount with or sell 
        to any Federal intermediate credit bank any eligible 
        obligations up to the amount of its paid-in and 
        unimpaired capital;

           *       *       *       *       *       *       *

          [(12) in accordance with rules and regulations 
        prescribed by the Board, to sell to members negotiable 
        checks (including travelers checks), money orders, and 
        other similar money transfer instruments, and to cash 
        checks and money orders for members, for a fee;]
          (12) in accordance with regulations prescribed by the 
        Board--
                  (A) to sell, to persons in the field of 
                membership, negotiable checks (including 
                travelers checks), money orders, and other 
                similar money transfer instruments (including 
                electronic fund transfers); and
                  (B) to cash checks and money orders and 
                receive electronic fund transfers for persons 
                in the field of membership for a fee;
          (13) in accordance with rules and regulations 
        prescribed by the Board, to purchase, sell, pledge, or 
        discount or otherwise receive or dispose of, in whole 
        or in part, any eligible obligations (as defined by the 
        Board) of its members and to purchase from any 
        liquidating credit union notes made by individual 
        members of the liquidating credit union at such prices 
        as may be agreed upon by the board of directors of the 
        liquidating credit union and the board of directors of 
        the purchasing credit union, but no purchase may be 
        made under authority of this paragraph if, upon the 
        making of that purchase, the aggregate of the unpaid 
        balances of notes purchased under authority of this 
        paragraph would exceed 5 per centum of the unimpaired 
        capital and surplus of the credit union; [and]

           *       *       *       *       *       *       *

  (b) Investment for the Credit Union's Own Account.--
          (1) In general.--A Federal credit union may purchase 
        and hold for its own account such investment securities 
        of investment grade as the Board may authorize by 
        regulation, subject to such limitations and 
        restrictions as the Board may prescribe in the 
        regulations.
          (2) Percentage limitations.--
                  (A) Single obligor.--In no event may the 
                total amount of investment securities of any 
                single obligor or maker held by a Federal 
                credit union for the credit union's own account 
                exceed at any time an amount equal to 10 
                percent of the net worth of the credit union.
                  (B) Aggregate investments.--In no event may 
                the aggregate amount of investment securities 
                held by a Federal credit union for the credit 
                union's own account exceed at any time an 
                amount equal to 10 percent of the assets of the 
                credit union.
          (3) Investment security defined.--
                  (A) In general.--For purposes of this 
                subsection, the term ``investment security'' 
                means marketable obligations evidencing the 
                indebtedness of any person in the form of 
                bonds, notes, or debentures and other 
                instruments commonly referred to as investment 
                securities.
                  (B) Further definition by board.--The Board 
                may further define the term ``investment 
                security''.
          (4) Investment grade defined.--The term ``investment 
        grade'' means with respect to an investment security 
        purchased by a credit union for its own account, an 
        investment security that at the time of such purchase 
        is rated in one of the 4 highest rating categories by 
        at least 1 nationally recognized statistical rating 
        organization.
          (5) Clarification of Prohibition on Stock 
        Ownership.--No provision of this subsection shall be 
        construed as authorizing a Federal credit union to 
        purchase shares of stock of any corporation for the 
        credit union's own account, except as otherwise 
        permitted by law.

           *       *       *       *       *       *       *


SEC. 107A. LIMITATION ON MEMBER BUSINESS LOANS.

  (a) In General.--On and after the date of enactment of this 
section, no insured credit union may make any member business 
loan that would result in a total amount of such loans, 
excluding loans made to nonprofit religious organizations, 
outstanding at that credit union at any one time equal to more 
than the lesser of--
          (1) * * *

           *       *       *       *       *       *       *


                               membership

  Sec. 109. (a) * * *

           *       *       *       *       *       *       *

  (c) Exceptions.--
          (1) * * *
          (2) Exception for underserved areas.--Notwithstanding 
        subsection (b), in the case of a Federal credit union, 
        the field of membership category of which is described 
        in subsection (b)(2), the Board may allow the 
        membership of the credit union to include any person or 
        organization within a local community, neighborhood, or 
        rural district if--
                  (A) the Board determines that the local 
                community, neighborhood, or rural district--
                          (i) is an ``investment area'', as 
                        defined in section 103(16) of the 
                        Community Development Banking and 
                        Financial Institutions Act of 1994 [(12 
                        U.S.C. 4703(16))], and meets such 
                        additional requirements as the Board 
                        may impose; and

           *       *       *       *       *       *       *

  (d) Multiple Common-Bond Credit Union Group 
Requirements.--
          (1) * * *
          (2) Exceptions.--In the case of any Federal credit 
        union, the field of membership category of which is 
        described in subsection (b)(2), the numerical 
        limitation in paragraph (1) of this subsection shall 
        not apply with respect to--
                  (A) * * *
                  (B) any group transferred from another credit 
                union--
                          (i) * * *
                          (ii) by the Board in the Board's 
                        capacity as 
                        conservator or liquidating agent with 
                        respect to that other credit union; 
                        [or]

           *       *       *       *       *       *       *

                  (C) any group transferred in connection with 
                a 
                voluntary merger, having received conditional 
                approval by the Administration of the merger 
                application prior to October 25, 1996, but not 
                having consummated the merger prior to October 
                25, 1996, if the merger is consummated not 
                later than 180 days after the date of enactment 
                of the Credit Union Membership Access Act[.]; 
                or
                  (D) a merger involving any such Federal 
                credit union approved by the Board on or after 
                August 7, 1998.

           *       *       *       *       *       *       *

  (g) Regulations Required for Community Credit Unions.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Criteria for continued membership of certain 
        member groups in community charter conversions.--In the 
        case of a voluntary conversion of a common-bond credit 
        union described in paragraph (1) or (2) of subsection 
        (b) into a community credit union described in 
        subsection (b)(3), the Board shall prescribe, by 
        regulation, the criteria under which the Board may 
        determine that a member group or other portion of a 
        credit union's existing membership, that is located 
        outside the well-defined local community, neighborhood, 
        or rural district that shall constitute the community 
        charter, can be satisfactorily served by the credit 
        union and remain within the community credit union's 
        field of membership.

           *       *       *       *       *       *       *


                               management

  Sec. 111. (a) The management of a Federal credit union shall 
be by a board of directors, a supervisory committee, and where 
the bylaws so provide, a credit committee. The board shall 
consist of an odd number of directors, at least five in number, 
to be elected annually by and from the members as the bylaws 
provide. Any vacancy occurring on the board shall be filled 
until the next annual election by appointment by the remainder 
of the directors. The bylaws of a Federal credit union may 
limit the number of consecutive terms any person may serve on 
the board of directors of such credit union.

           *       *       *       *       *       *       *

  (c) No member of the board or of any other committee shall, 
as such, be compensated, except that reasonable health, 
accident, similar insurance protection, and the reimbursement 
of reasonable expenses, including lost wages, incurred in the 
execution of the duties of the position shall not be considered 
compensation.

           *       *       *       *       *       *       *


                        expulsion and withdrawal

  Sec. 118. (a) * * *
  [(b) The board of directors of a Federal credit union may, by 
majority vote of a quorum of directors, adopt and enforce a 
policy with respect to expulsion from membership based on 
nonparticipation by a member in the affairs of the credit 
union. In establishing its policy, the board should consider a 
member's failure to vote in annual credit union elections or 
failure to purchase shares from, obtain a loan from, or lend to 
the Federal credit union. If such a policy is adopted, written 
notice of the policy as adopted and the effective date of such 
policy shall be mailed to each member of the credit union at 
the member's current address appearing on the records of the 
credit union not less than thirty days prior to the effective 
date of such policy. In addition, each new member shall be 
provided written notice of any such policy prior to or upon 
applying for membership.]
  (b) Policy and Actions of Boards of Directors of Federal 
Credit Unions.--
          (1) Expulsion of members for nonparticipation or for 
        just cause.--The board of directors of a Federal credit 
        union may, by majority vote of a quorum of directors, 
        adopt and enforce a policy with respect to expulsion 
        from membership, by a majority vote of such board of 
        directors, based on just cause, including disruption of 
        credit union operations, or on nonparticipation by a 
        member in the affairs of the credit union.
          (2) Written notice of policy to members.--If a policy 
        described in paragraph (1) is adopted, written notice 
        of the policy as adopted and the effective date of such 
        policy shall be provided to--
                  (A) each existing member of the credit union 
                not less than 30 days prior to the effective 
                date of such policy; and
                  (B) each new member prior to or upon applying 
                for membership.

           *       *       *       *       *       *       *


                        certain powers of board

  Sec. 120. (a) * * *

           *       *       *       *       *       *       *

  (h) The Board is authorized, empowered, and directed to 
require that every person appointed or elected by any Federal 
credit union to any position requiring the receipt, payment, or 
custody of money or other personal property owned by a Federal 
credit union, or in its custody or control as collateral or 
otherwise, give bond in a corporate surety company holding a 
certificate of authority from the Secretary of the Treasury 
[under the Act approved July 30, 1947 (6 U.S.C., secs. 6-13),] 
chapter 93 of title 31, United States Code, as an acceptable 
surety on Federal bonds. Any such bond or bonds shall be in a 
form approved by the Board with a view to providing surety 
coverage to the Federal credit union with reference to loss by 
reason of acts of fraud or dishonesty including forgery, theft, 
embezzlement, wrongful abstraction, or misapplication on the 
part of the person, directly or through connivance with others, 
and such other surety coverages as the Board may determine to 
be reasonably appropriate or as elsewhere required by this Act. 
Any such bond or bonds shall be in such an amount in relation 
to the money or other personal property involved or in relation 
to the assets of the Federal credit union as the Board may from 
time to time prescribe by regulation for the purpose of 
requiring reasonable coverage. In lieu of individual bonds the 
Board may approve the use of a form of schedule or blanket bond 
which covers all of the officers and employees of a Federal 
credit union whose duties include the receipt, payment, or 
custody of money or other personal property for or on behalf of 
the Federal credit union. The Board may also approve the use of 
a form of excess coverage bond whereby a Federal credit union 
may obtain an amount of coverage in excess of the basic surety 
coverage.

           *       *       *       *       *       *       *


               space in federal buildings or federal land

  Sec. 124. [Upon application by any credit union] 
Notwithstanding any other provision of law, upon application by 
any credit union organized under State law or by any Federal 
credit union organized in accordance with the terms of this 
Act, which application shall be addressed to the officer or 
agency of the United States charged with the allotment of space 
on lands reserved for the use of, and under the exclusive or 
concurrent jurisdiction of, the United States or in the Federal 
buildings in the community or district in which such credit 
union does business, such officer or agency may in his or its 
discretion lease land or allot space to such credit union 
without charge for rent or services if at least 95 percent of 
the membership of the credit union to be served by the 
allotment of space or the facility built on the lease land is 
composed of persons who either are presently Federal employees 
or were Federal employees at the time of admission into the 
credit union, and members of their families, and if space is 
available. For the purpose of this section, the term 
``services'' includes, but is not limited to, the providing of 
lighting, heating, cooling, electricity, office furniture, 
office machines and equipment, telephone service (including 
installation lines and equipment and other expenses associated 
with telephone service), and security systems (including 
installation of and other expenses associated with security 
systems). Where there is an agreement for the payment of costs 
associated with the provision of space or services, nothing in 
title 31, United States Code, or any other provision of law, 
shall be construed to prohibit or restrict payment by 
reimbursement to the miscellaneous receipts or other 
appropriate account of the Treasury.

           *       *       *       *       *       *       *


                       TITLE II--SHARE INSURANCE

        insurance of member accounts and eligibility provisions

  Sec. 201. (a) * * *
  (b) Application for insurance of member accounts shall be 
made immediately by each Federal credit union and may be made 
at any time by a State credit union or a credit union operating 
under the jurisdiction of the Department of Defense. 
Applications for such insurance shall be in such form as the 
Board shall provide and shall contain an agreement by the 
applicant--
          (1) * * *
          * * * * * * *
          (5) to maintain such regular reserves as may be 
        required by the laws of the State, district, territory, 
        or other jurisdiction pursuant to which it is organized 
        and operated, in the case of a State-chartered credit 
        union, or as may be required by [section 116 of] this 
        Act, in the case of a Federal credit union;
          * * * * * * *

   reports of condition; certified statements; premiums for insurance

  Sec. 202. (a)(1) * * *
          * * * * * * *
          (8) Data sharing with other agencies and persons.--In 
        addition to reports of examination, reports of 
        condition, and other reports required to be regularly 
        provided to the Board (with respect to all insured 
        credit unions, including a credit union for which the 
        Corporation has been appointed conservator or 
        liquidating agent) or an appropriate State commission, 
        board, or authority having supervision of a State-
        chartered credit union, the Board may, in the Board's 
        discretion, furnish any report of examination or other 
        confidential supervisory information concerning any 
        credit union or other entity examined by the Board 
        under authority of any Federal law, to--
                  (A) any other Federal or State agency or 
                authority with supervisory or regulatory 
                authority over the credit union or other 
                entity;
                  (B) any officer, director, or receiver of 
                such credit union or entity; and
                  (C) any other institution-affiliated party of 
                such credit union or entity the Board 
                determines to be appropriate.
  (h) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) * * *

           *       *       *       *       *       *       *

          (3) Insured shares.--The term ``insured shares'', 
        when applied to this section, includes share, share 
        draft, share certificate, and other similar accounts as 
        determined by the Board, but does not include amounts 
        exceeding the insured account limit set forth in 
        [section 207(c)(1)] section 207(k)(1).

           *       *       *       *       *       *       *


                  examination of insured credit unions

  Sec. 204. (a) * * *
  (b) In connection with examinations of insured credit unions, 
or with other types of investigations to determine compliance 
with applicable law and regulations, the Board, or its 
designated representatives, shall have power to administer 
oaths and affirmations, to examine and to take and preserve 
testimony under oath as to any matter in respect of the affairs 
of any such credit union, and to issue subpenas and subpenas 
duces tecum and to exercise such [others] other powers as are 
set forth in section 206(p) and, for the enforcement thereof, 
to apply to the United States district court for the judicial 
district or the United States court in any territory in which 
the principal office of the credit union is located or in which 
the witness resides or carries on business. Such courts shall 
have jurisdiction and power to order and require compliance 
with any such subpena.

           *       *       *       *       *       *       *


termination of insurance; cease-and-desist proceedings; suspension and/
   or removal of directors, officers, and committee members; taking 
                    possession of committee members

  Sec. 206. (a) * * *

           *       *       *       *       *       *       *

  (e)(1) * * *

           *       *       *       *       *       *       *

          (3) Affirmative action to correct conditions 
        resulting from violations or practices.--The authority 
        to issue an order under this subsection and subsection 
        (f) which requires an insured credit union or any 
        institution-affiliated party to take affirmative action 
        to correct any conditions resulting from any violation 
        or practice with respect to which such order is issued 
        includes the authority to require such insured credit 
        union or such party to--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) dispose of any loan or asset involved; 
                [and]

           *       *       *       *       *       *       *

  (f)(1) Whenever the Board shall determine that the violation 
or threatened violation or the unsafe or unsound practice or 
practices, specified in the notice of charges served upon the 
credit union or any institution-affiliated party pursuant to 
paragraph (1) of subsection (e) of this section, or the 
continuation thereof, is likely to cause insolvency or 
significant dissipation of assets or earnings of the credit 
union, or is likely to weaken the condition of the credit union 
or otherwise prejudice the interests of its insured members 
prior to the completion of the proceedings conducted pursuant 
to paragraph (1) of subsection (e) of this section, the Board 
may issue a temporary order requiring the credit union or such 
party to cease and desist from any such violation or practice 
and to take affirmative action to prevent such insolvency, 
dissipation, condition, or prejudice pending completion of such 
proceedings. Such order may include any requirement authorized 
under [subsection (e)(3)(B)] subsection (e)(3). Such order 
shall become effective upon service upon the credit union or 
institution-affiliated party and, unless set aside, limited, or 
suspended by a court in proceedings authorized by paragraph (2) 
of this subsection, shall remain effective and enforceable 
pending the completion of the administrative proceedings 
pursuant to such notice and until such time as the 
Administration shall dismiss the charges specified in such 
notice, or if a cease-and-desist order is issued against the 
credit union or such party, until the effective date of such 
order.

           *       *       *       *       *       *       *

  (g) Removal and Prohibition Authority.--
          (1) * * *

           *       *       *       *       *       *       *

  (7) Industrywide prohibition.--
          (A) * * *

           *       *       *       *       *       *       *

                  (D) Appropriate federal financial 
                institutions regulatory agency defined.--For 
                purposes of this paragraph [and subsection 
                (1)], the term ``appropriate Federal financial 
                institutions regulatory agency'' means--
                          (i) * * *

           *       *       *       *       *       *       *

  [(i)] (i) Suspension, Removal, and Prohibition From 
Participation Orders in the Case of Certain Criminal 
Offenses.--
          (1) Suspension or prohibition authorized.--
                  (A) In general.--Whenever any institution-
                affiliated party is charged in any information, 
                indictment, or complaint, with the commission 
                of or participation in--
                          (i) * * *

           *       *       *       *       *       *       *

                the Board may, if continued service or 
                participation by such party may pose a threat 
                to the interests of the credit union's members 
                or may threaten to impair public confidence in 
                [the credit union] any credit union, by written 
                notice served upon such party, suspend such 
                party from office or prohibit such party from 
                further participation in any manner in the 
                conduct of the affairs of [the credit union] 
                any credit union.
                  (B) Provisions applicable to notice.--
                          (i) Copy.--A copy of any notice under 
                        subparagraph (A) shall also be served 
                        upon the credit union of which the 
                        subject of the order is, or most 
                        recently was, an institution-affiliated 
                        party.

           *       *       *       *       *       *       *

                  (C) Removal or prohibition.--
                          (i) In general.--If a judgment of 
                        conviction or an agreement to enter a 
                        pretrial diversion or other similar 
                        program is entered against an 
                        institution-affiliated party in 
                        connection with a crime described in 
                        subparagraph (A)(i), at such time as 
                        such judgment is not subject to further 
                        appellate review, the Board may, if 
                        continued service or participation by 
                        such party may pose a threat to the 
                        interests of the credit union's members 
                        or may threaten to impair public 
                        confidence in [the credit union] any 
                        credit union, issue and serve upon such 
                        party an order removing such party from 
                        office or prohibiting such party from 
                        further participation in any manner in 
                        the conduct of the affairs of [the 
                        credit union] any credit union without 
                        the prior written consent of the Board.
                          (ii) Required for certain offenses--
                        In the case of a judgment of conviction 
                        or agreement against an institution-
                        affiliated party in connection with a 
                        violation described in subparagraph 
                        (A)(ii), the Board shall issue and 
                        serve upon such party an order removing 
                        such party from office or prohibiting 
                        such party from further participation 
                        in any manner in the conduct of the 
                        affairs of [the credit union] any 
                        credit union without the prior written 
                        consent of the Board.
                  (D) Provisions applicable to order.--
                          (i) Copy.--A copy of any order under 
                        subparagraph (C) shall also be served 
                        [upon such credit union] upon the 
                        credit union of which the subject of 
                        the order is, or most recently was, an 
                        institution-affiliated party, whereupon 
                        such party (if a director or an 
                        officer) shall cease to be a director 
                        or officer of such credit union.

           *       *       *       *       *       *       *

                  (E) Continuation of authority.--The Board may 
                issue an order under this paragraph with 
                respect to an individual who is an institution-
                affiliated party at a credit union at the time 
                of an offense described in subparagraph (A) 
                without regard to--
                          (i) whether such individual is an 
                        institution-affiliated party at any 
                        credit union at the time the order is 
                        considered or issued by the Board; or
                          (ii) whether the credit union at 
                        which the individual was an 
                        institution-affiliated party at the 
                        time of the offense remains in 
                        existence at the time the order is 
                        considered or issued by the Board.

           *       *       *       *       *       *       *

  (t) Regulation of Certain Forms of Benefits to Institution-
Affiliated Parties.--
          (1) * * *
          (2) Factors to be taken into account.--The Board 
        shall prescribe, by regulation, the factors to be 
        considered by the Board in taking any action pursuant 
        to paragraph (1) which may include such factors as the 
        following:
                  (A) * * *
                  (B) Whether there is a reasonable basis to 
                believe that the institution-affiliated party 
                is substantially responsible for the insolvency 
                of the credit union, the appointment of a 
                conservator or liquidating agent for the credit 
                union, or the credit union's troubled condition 
                (as defined in regulations prescribed by the 
                Board pursuant to paragraph (4)(A)(ii)(III)).
                  (C) Whether there is a reasonable basis to 
                believe that the institution-affiliated party 
                has materially violated any applicable Federal 
                or State banking law or regulation that has had 
                a material [affect] effect on the financial 
                condition of the credit union.
          * * * * * * *
          (4) Golden parachute payment defined.--For purposes 
        of this subsection--
                  (A) In general.--The term ``golden parachute 
                payment'' means any payment (or any agreement 
                to make any payment) in the nature of 
                compensation by any credit union for the 
                benefit of any institution-affiliated party 
                pursuant to an obligation of such credit union 
                that--
                          (i) * * *
                          (ii) is received on or after the date 
                        on which--
                                  (I) the credit union is 
                                insolvent;
                                  (II) any conservator or 
                                liquidating agent is appointed 
                                for such credit union; [or]
          * * * * * * *

SEC. 206A. REGULATION AND EXAMINATION OF CREDIT UNION ORGANIZATIONS AND 
                    SERVICE PROVIDERS.

  (a) Regulation and Examination of Credit Union 
Organizations.--
          (1) * * *
          (2) Examination by other banking agencies.--The Board 
        may authorize to make an examination of a credit union 
        organization in accordance with paragraph (1)--
                  (A) any Federal [regulator] regulatory agency 
                that supervises any activity of a credit union 
                organization; or
          * * * * * * *

                          payment of insurance

  Sec. 207. (a)(1)(A) * * *
  (B) Not later than [10] 30 days after the date on which the 
Board closes a credit union for liquidation pursuant to 
paragraph (1), or accepts appointment as liquidating agent 
pursuant to subsection (b), such insured credit union may apply 
to the United States district court for the judicial district 
in which the principal office of such insured credit union is 
located or the United States District Court for the District of 
Columbia, for an order requiring the Board to show cause why it 
should not be prohibited from continuing such liquidation. 
Except as otherwise provided in this subparagraph, no court may 
take any action for or toward the removal of any liquidating 
agent or, except at the instance of the Board, restrain or 
affect the exercise of powers or functions of a liquidating 
agent.

           *       *       *       *       *       *       *

  (c) Provisions Relating to Contracts Entered Into Before 
Appointment of Conservator or Liquidating Agent.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) Leases under which the credit union is the 
        lessor.--
                  (A) * * *
                  (B) Provisions applicable to lessee remaining 
                in possession.--If any lessee under a lease 
                described in subparagraph (A) remains in 
                possession of a leasehold interest pursuant to 
                clause (ii) of such subparagraph--
                          (i) the lessee--
                                  (I) shall continue to pay the 
                                contractual rent pursuant to 
                                the terms of the lease after 
                                the date of the repudiation of 
                                such lease; and

           *       *       *       *       *       *       *

          (8) Certain qualified financial contracts.--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) Certain contracts and agreements 
                defined.--For purposes of this subsection--
                          (i) * * *
                          (ii) Securities contract.--The term 
                        ``securities contract''--
                                  (I) has the meaning given to 
                                such term in section 741 of 
                                title 11, United States Code, 
                                except that the term 
                                ``security'' (as used in such 
                                section) shall be deemed to 
                                include any mortgage loan, any 
                                mortgage-related security (as 
                                defined in section 3(a)(41) of 
                                the Securities Exchange Act of 
                                1934), and any interest in any 
                                mortgage loan or mortgage-
                                related security; and

           *       *       *       *       *       *       *

  (d) Payment of Insured Deposits.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Resolution of disputes.--
                  (A) Resolutions in accordance [to] with board 
                regulations.--In the case of any disputed claim 
                relating to any insured deposit or any 
                determination of insurance coverage with 
                respect to any deposit, the Board may resolve 
                such disputed claim in accordance with 
                regulations prescribed by the Board 
                establishing procedures for resolving such 
                claims.

           *       *       *       *       *       *       *

  (f) Valuation of Claims in Default.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Additional payments authorized.--
                  (A) In general.--The Board may, in its 
                discretion and in the interests of minimizing 
                its losses, use its own resources to make 
                additional payments or credit additional 
                amounts to or with respect to or for the 
                account of any claimant or category of 
                claimants. The Board shall not be obligated, as 
                a result of having made any such payment or 
                credited any such amount to or with respect to 
                or for the account of any claimant or category 
                of claimants, to make payments to any other 
                claimant or category [or] of claimants.

           *       *       *       *       *       *       *


                       administrative provisions

  Sec. 209. (a) In carrying out the purposes of this title, the 
Board may--
          (1) * * *

           *       *       *       *       *       *       *

          (8) make examinations of and require information and 
        reports from insured credit unions, as provided in this 
        title[.];

           *       *       *       *       *       *       *


SEC. 216. PROMPT CORRECTIVE ACTION.

  (a) * * *

           *       *       *       *       *       *       *

  (n) Other Authority Not Affected.--This section does not 
limit any authority of the Board or a State to take action in 
addition to (but not in derogation of) any action that is 
required under this section.

           *       *       *       *       *       *       *


TITLE III--CENTRAL LIQUIDITY FACILITY

           *       *       *       *       *       *       *



                               membership

  Sec. 304. (a) * * *
  (b) A credit union or group of credit unions, primarily 
serving other credit unions, may be an Agent member of the 
Facility by--
          (1) * * *

           *       *       *       *       *       *       *

          (3) agreeing to comply with rules and regulations the 
        Board shall prescribe with respect to, but not limited 
        to, management quality, asset and liability safety and 
        soundness, internal operating and control practices and 
        procedures, and participation of natural persons in the 
        affairs [or] of such credit union or credit union 
        group; and

           *       *       *       *       *       *       *


                             annual report

  Sec. 310. The annual report required by [section 102(e)] 
section 102(d) shall include a full report of the activities of 
the Facility.

           *       *       *       *       *       *       *

                              ----------                              


                     SECTION 7A OF THE CLAYTON ACT

  Sec. 7A. (a) * * *

           *       *       *       *       *       *       *

  (c) The following classes of transactions are exempt from the 
requirements of this section--
          (1) * * *

           *       *       *       *       *       *       *

          (7) transactions which require agency approval under 
        section 10(e) of the Home Owners' Loan Act, section 
        18(c) of the Federal Deposit Insurance Act (12 U.S.C. 
        1828(c)), section 205(b)(3) of the Federal Credit Union 
        Act (12 U.S.C. 1785(b)(3)), or section 3 of the Bank 
        Holding Company Act of 1956 (12 U.S.C. 1842), except 
        that a portion of a transaction is not exempt under 
        this paragraph if such portion of the transaction (A) 
        is subject to section 4(k) of the Bank Holding Company 
        Act of 1956; and (B) does not require agency approval 
        under section 3 of the Bank Holding Company Act of 
        1956;

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL RESERVE ACT

           *       *       *       *       *       *       *



                        state banks as members.

  Sec. 9. Any bank incorporated by special law of any State, or 
organized under the general laws of any State or of the United 
States, including Morris Plan banks and other incorporated 
banking institutions engaged in similar business, desiring to 
become a member of the Federal Reserve System, may make 
application to the Board of Governors of the Federal Reserve 
System, under such rules and regulations as it may prescribe, 
for the right to subscribe to the stock of the Federal reserve 
bank organized within the district in which the applying bank 
is located. Such application shall be for the same amount of 
stock that the applying bank would be required to subscribe to 
as a national bank. For the purposes of membership of any such 
bank the terms ``capital'' and ``capital stock'' shall include 
the amount of outstanding capital notes and debentures legally 
issued by the applying bank and purchased by the Reconstruction 
Finance Corporation. The Board of Governors of the Federal 
Reserve System, subject to the provisions of this Act and to 
such conditions as it may prescribe pursuant thereto may permit 
the applying bank to become a stockholder of such Federal 
reserve bank.
  Upon the conversion of a national bank into a State bank, or 
the merger or consolidation of a national bank with a State 
bank which is not a member of the Federal Reserve System, the 
resulting or continuing State bank may be admitted to 
membership in the Federal Reserve System by the Board of 
Governors of the Federal Reserve System in accordance with the 
provisions of this section, but, otherwise, the Federal Reserve 
bank stock owned by the national bank shall be canceled and 
paid for as provided in section 5 of this Act. Upon the merger 
or consolidation of a national bank with a State member bank 
under a State charter, the membership of the State bank in the 
Federal Reserve System shall continue.
  Any such State bank which, at the date of the approval of 
this Act, has established and is operating a branch or branches 
in conformity with the State law, may retain and operate the 
same while remaining or upon becoming a stockholder of such 
Federal reserve bank; but no such State bank may retain or 
acquire stock in a Federal reserve bank except upon 
relinquishment of any branch or branches established after the 
date of the approval of this Act beyond the limits of the city, 
town, or village in which the parent bank is situated. 
Provided, however, That nothing herein contained shall prevent 
any State member bank from establishing and operating branches 
in the United States or any dependency or insular possession 
thereof or in any foreign country, on the same terms and 
conditions and subject to the same limitations and restrictions 
as are applicable to the establishment of branches by national 
banks except that the approval of the Board of Governors of the 
Federal Reserve System, instead of the Comptroller of the 
Currency, shall be obtained before any State member bank may 
hereafter establish any branch and before any State bank 
hereafter admitted to membership may retain any branch 
established after February 25, 1927, beyond the limits of the 
city, town, or village in which the parent bank is situated. 
The approval of the Board shall likewise be obtained before any 
State member bank may establish any new branch within the 
limits of any such city, town, or village (except within the 
District of Columbia.) A State member bank may establish and 
operate a de novo branch in a host State (as such terms are 
defined in section 18(d) of the Federal Deposit Insurance Act) 
on the same terms and conditions and subject to the same 
limitations and restrictions as are applicable to the 
establishment of a de novo branch of a national bank in a host 
State under section 5155(g) of the Revised Statutes of the 
United States. Such section 5155(g) shall be applied for 
purposes of the preceding sentence by substituting ``Board of 
Governors of the Federal Reserve System'' for ``Comptroller of 
the Currency'' and ``State member bank'' for ``national bank''.

           *       *       *       *       *       *       *

  Sec. 22.
  (d) * * *

           *       *       *       *       *       *       *

  (g)(1) * * *

           *       *       *       *       *       *       *

  [(6) Whenever an executive officer of a member bank becomes 
indebted to any bank or banks (other than the one of which he 
is an officer) on account of extensions of credit of any one of 
the three categories respectively referred to in paragraphs 
(2), (3) and (4) in an aggregate amount greater than the 
aggregate amount of credit of the same category that could 
lawfully be extended to him by the bank, he shall make a 
written report to the board of directors of the bank, stating 
the date and amount of each such extension of credit, the 
security therefor, and the purposes for which the proceeds have 
been or are to be used.]
  [(7)] (6) This subsection does not prohibit any executive 
officer of a member bank from endorsing or guaranteeing for the 
protection of the bank any loan or other asset previously 
acquired by the bank in good faith or from incurring any 
indebtedness to the bank for the purpose of protecting the bank 
against loss or giving financial assistance to it.
  [(8)] (7) Each day that any extension of credit in violation 
of this subsection exists is a continuation of the violation 
for the purposes of section 8 of the Federal Deposit Insurance 
Act.
  [(9) Each member bank shall include with (but not as part of) 
each report of condition and copy thereof filed under section 
7(a)(3) of the Federal Deposit Insurance Act a report of all 
loans under authority of this subsection made by the bank since 
its previous report of condition.]
  [(10)] (8) The Board of Governors of the Federal Reserve 
System may prescribe such rules and regulations, including 
definitions of terms, as it deems necessary to effectuate the 
purposes and to prevent evasions of this subsection. (12 U.S.C. 
375a).

           *       *       *       *       *       *       *

                              ----------                              


BANK HOLDING COMPANY ACT OF 1956

           *       *       *       *       *       *       *



                              definitions

  Sec. 2. (a) * * *

           *       *       *       *       *       *       *

  (c) Bank Defined.--For purposes of this Act--
          (1) * * *
          (2) Exceptions.--The term ``bank'' does not include 
        any of the following:
                  (A) * * *

           *       *       *       *       *       *       *

                  [(I) The Investors Fiduciary Trust Company, 
                located in Kansas City, Missouri, so long as 
                such institution--
                          [(i) engages only in trust, 
                        fiduciary, and agency activities in 
                        which it was lawfully engaged on March 
                        5, 1987;
                          [(ii) engages in such activities only 
                        at the same number of locations at 
                        which such activities were conducted on 
                        such date;
                          [(iii) does not accept demand 
                        deposits other than demand deposits 
                        which are maintained by such 
                        institution in--
                                  [(I) a trust or fiduciary 
                                capacity;
                                  [(II) the institution's 
                                capacity as a custodian or as a 
                                paying, transfer, shareholder 
                                servicing, securities clearing, 
                                escrow, or dividend disbursing 
                                agent; or
                                  [(III) any capacity which is 
                                incidental to the trust or 
                                fiduciary activities of the 
                                institution;
                          [(iv) does not engage in the business 
                        of making commercial loans;
                          [(v) does not exercise discount or 
                        borrowing privileges pursuant to 
                        section 19(b)(7) of the Federal Reserve 
                        Act; and
                          [(vi) is not directly or indirectly 
                        controlled by any company other than a 
                        company which directly or indirectly 
                        controlled such institution on March 5, 
                        1987.
                  [(J) A savings bank (as defined in section 
                3(g) of the Federal Deposit Insurance Act) 
                which--
                          [(i) is an insured bank (as defined 
                        in section 3(h) of such Act);
                          [(ii) is a subsidiary of the Great 
                        Western Financial Corporation as a 
                        result of an approval in writing by the 
                        State bank supervisor of the State of 
                        New York before June 30, 1987;
                          [(iii) meets or exceeds the 
                        investment requirements which an 
                        insured institution must meet in order 
                        to be a qualified thrift lender under 
                        section 408(o) of the National Housing 
                        Act; and
                          [(iv) does not, directly, or through 
                        insurance products such savings bank 
                        receives from or provides to the Great 
                        Western Financial Corporation, engage 
                        in the sale or underwriting of 
                        insurance, except that this 
                        subparagraph shall cease to apply with 
                        respect to such savings bank or any 
                        successor institution if any deposits 
                        of any other subsidiary or affiliate of 
                        the Great Western Financial Corporation 
                        which are subject to an assessment of 
                        an insurance premium under subsection 
                        (b) or (c) of section 404 of the 
                        National Housing Act are, directly or 
                        indirectly by any device whatsoever, 
                        transferred to or acquired by such 
                        savings bank or any successor 
                        institution which would have the effect 
                        of materially reducing such premium 
                        assessments. The exemption provided by 
                        this subparagraph shall cease to apply 
                        if Great Western Financial Corporation 
                        uses such savings bank or any successor 
                        institution as a vehicle to move such 
                        Corporation from Federal Savings and 
                        Loan Insurance Corporation insurance to 
                        Federal Deposit Insurance Corporation 
                        insurance.]

           *       *       *       *       *       *       *

  (g) For the purposes of this Act--
          (1) * * *
          (2) shares held or controlled directly or indirectly 
        by trustees for the benefit of (A) a company, (B) the 
        shareholders or members of a company, or (C) the 
        employees (whether exclusively or not) of a company, 
        shall be deemed to be controlled by such company, 
        unless the Board determines that such treatment is not 
        appropriate in light of the facts and circumstances of 
        the case and the purposes of this Act.

           *       *       *       *       *       *       *

  [(m) Qualified Savings Bank.--For purposes of this Act, the 
term ``qualified savings bank''--
          [(1) means any savings bank (as defined in section 
        3(g) of the Federal Deposit Insurance Act) which was 
        organized on or before March 5, 1987; and
          [(2) includes any cooperative bank that is an insured 
        bank (as defined in section 3(h) of the Federal Deposit 
        Insurance Act) and any interim savings bank that is 
        established to facilitate a corporate reorganization, 
        or the formation of a holding company, involving a 
        savings bank described in paragraph (1).]
  (m) [Repealed]

           *       *       *       *       *       *       *


                  acquisition of bank shares or assets

  Sec. 3. (a) * * *

           *       *       *       *       *       *       *

  (d) Interstate Banking.--
          (1) Approvals authorized.--
                  (A) * * *
                  [(B) Preservation of state age laws.--
                          [(i) In general.--Notwithstanding 
                        subparagraph (A), the Board may not 
                        approve an application pursuant to such 
                        subparagraph that would have the effect 
                        of permitting an out-of-State bank 
                        holding company to acquire a bank in a 
                        host State that has not been in 
                        existence for the minimum period of 
                        time, if any, specified in the 
                        statutory law of the host State.
                          [(ii) Special rule for state age laws 
                        specifying a period of more than 5 
                        years.--Notwithstanding clause (i), the 
                        Board may approve, pursuant to 
                        subparagraph (A), the acquisition of a 
                        bank that has been in existence for at 
                        least 5 years without regard to any 
                        longer minimum period of time specified 
                        in a statutory law of the host State.
                  [(C) Shell banks.--For purposes of this 
                subsection, a bank that has been chartered 
                solely for the purpose of, and does not open 
                for business prior to, acquiring control of, or 
                acquiring all or substantially all of the 
                assets of, an existing bank shall be deemed to 
                have been in existence for the same period of 
                time as the bank to be acquired.]
                  [(D)] (B) Effect on state contingency laws.--
                No provision of this subsection shall be 
                construed as affecting the applicability of a 
                State law that makes an acquisition of a bank 
                contingent upon a requirement to hold a portion 
                of such bank's assets available for call by a 
                State-sponsored housing entity established 
                pursuant to State law, if--
                          (i) * * *

           *       *       *       *       *       *       *

          (5) Exception for banks in default or in danger of 
        default.--The Board may approve an application pursuant 
        to paragraph (1)(A) which involves--
                  (A) an acquisition of 1 or more banks in 
                default or in danger of default; or
                  (B) an acquisition with respect to which 
                assistance is provided under section 13(c) of 
                the Federal Deposit Insurance Act;
        without regard to subparagraph (B) [or (D)] of 
        paragraph (1) or paragraph (2) or (3).

           *       *       *       *       *       *       *


                 interests in nonbanking organizations

  Sec. 4. (a) * * *

           *       *       *       *       *       *       *

  (h) Tying Provisions.--
          (1) Applicable to certain exempt institutions and 
        parent companies.--An institution described in 
        subparagraph (D), (F), [(G), (H), (I), or (J) of 
        section 2(c)(2)] (G), or (H) of section 2(c)(2) shall 
        be treated as a bank, and a company that controls such 
        an institution shall be treated as a bank holding 
        company, for purposes of section 106 of the Bank 
        Holding Company Act Amendments of 1970 and section 
        22(h) of the Federal Reserve Act and any regulation 
        prescribed under any such section.
          (2) Applicable with respect to certain 
        transactions.--A company that controls an institution 
        described in subparagraph (D), (F), [(G), (H), (I), or 
        (J) of section 2(c)(2)] (G), or (H) of section 2(c)(2) 
        and any of such company's other affiliates, shall be 
        subject to the tying restrictions of section 106 of the 
        Bank Holding Company Act Amendments of 1970 in 
        connection with any transaction involving the products 
        or services of such company or affiliate and those of 
        such institution, as if such company or affiliate were 
        a bank and such institution were a subsidiary of a bank 
        holding company.

           *       *       *       *       *       *       *

  (n) Authority To Retain Limited Nonfinancial Activities and 
Affiliations.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) Cross marketing restrictions applicable to 
        commercial activities.--
                  (A) * * *
                  (B) Rule of construction.--Subparagraph (A) 
                shall not be construed as prohibiting an 
                arrangement between a depository institution 
                and a company owned or controlled pursuant to 
                [subsection (k)(4)(I)] subparagraph (H) or (I) 
                of subsection (k)(4) for the marketing of 
                products or services through statement inserts 
                or Internet websites if--
                          (i) * * *

           *       *       *       *       *       *       *

                  (C) Threshold of control.--Subparagraph (A) 
                shall not apply with respect to a company 
                described or referred to in clause (i) or (ii) 
                of such subparagraph if the financial holding 
                company does not own or control 25 percent or 
                more of the total equity or any class of voting 
                securities of such company.

           *       *       *       *       *       *       *


                            saving provision

  Sec. 11. (a) * * *
  (b) Antitrust Review.--
          (1) In general.--The Board shall immediately notify 
        the Attorney General of any approval by it pursuant to 
        section 3 of a proposed acquisition, merger, or 
        consolidation transaction and, if the transaction also 
        involves an acquisition under section 4, the Board 
        shall also notify the Federal Trade Commission of such 
        approval. If the Board has found that it must act 
        immediately in order to prevent the probable failure of 
        a bank or bank holding company involved in any such 
        transaction, the transaction may be consummated 
        immediately upon approval by the Board. If the Board 
        has advised the Comptroller of the Currency or the 
        State supervisory authority, as the case may be, of the 
        existence of an emergency requiring expeditious action 
        and has required the submission of views and 
        recommendations within ten days, the transaction may 
        not be consummated before the fifth calendar day after 
        the date of approval by the Board. In all other cases, 
        the transaction may not be consummated before the 
        thirtieth calendar day after the date of approval by 
        the Board or, if the Board has not received any adverse 
        comment from the Attorney General of the United States 
        relating to competitive factors, such shorter period of 
        time as may be prescribed by the Board with the 
        concurrence of the Attorney General, but in no event 
        less than [15] 5 calendar days after the date of 
        approval. Any action brought under the antitrust laws 
        arising out of an acquisition, merger, or consolidation 
        transaction approved under section 3 shall be commenced 
        prior to the earliest time under this subsection at 
        which the transaction approval under section 3 might be 
        consummated. The commencement of such an action shall 
        stay the effectiveness of the Board's approval unless 
        the court shall otherwise specifically order. In any 
        such action, the court shall review de novo the issues 
        presented. In any judicial proceeding attacking any 
        acquisition, merger, or consolidation transaction 
        approved pursuant to section 3 on the ground that such 
        transaction alone and of itself constituted a violation 
        of any antitrust laws other than section 2 of the Act 
        of July 2, 1890 (section 2 of the Sherman Antitrust 
        Act, 15 U.S.C. 2), the standards applied by the court 
        shall be identical with those that the Board is 
        directed to apply under section 3 of this Act. Upon the 
        consummation of an acquisition, merger, or 
        consolidation transaction approved under section 3 in 
        compliance with this Act and after the termination of 
        any antitrust litigation commenced within the period 
        prescribed in this section, or upon the termination of 
        such period if no such litigation is commenced therein, 
        the transaction may not thereafter be attacked in any 
        judicial proceeding on the ground that it alone and of 
        itself constituted a violation of any antitrust laws 
        other than section 2 of the Act of July 2, 1890 
        (section 2 of the Sherman Antitrust Act, 15 U.S.C. 2), 
        but nothing in this Act shall exempt any bank holding 
        company involved in such a transaction from complying 
        with the antitrust laws after the consummation of such 
        transaction.

           *       *       *       *       *       *       *

                              ----------                              


            SECTION 2 OF THE NATIONAL BANK RECEIVERSHIP ACT

  [Section 2. The Comptroller of the Currency]

SEC. 2. APPOINTMENT OF RECEIVER FOR A NATIONAL BANK.

  (a) In General.--The Comptroller of the Currency may, without 
prior notice or hearings, appoint a receiver for any national 
bank (and such receiver shall be the Federal Deposit Insurance 
Corporation if the national bank is an insured bank (as defined 
in section 3(h) of the Federal Deposit Insurance Act)) if the 
Comptroller determines, in the Comptroller's discretion, that--
          (1) * * *

           *       *       *       *       *       *       *

  (b) Judicial Review.--If the Comptroller of the Currency 
appoints a receiver under subsection (a), the national bank 
may, within 30 days thereafter, bring an action in the United 
States district court for the judicial district in which the 
home office of such bank is located, or in the United States 
District Court for the District of Columbia, for an order 
requiring the Comptroller of the Currency to remove the 
receiver, and the court shall, upon the merits, dismiss such 
action or direct the Comptroller of the Currency to remove the 
receiver.

           *       *       *       *       *       *       *

                              ----------                              


     SECTION 106 OF THE BANK HOLDING COMPANY ACT AMENDMENTS OF 1970

  Sec. 106. (a) * * *
  (b)(1) * * *
  (2)(A) * * *

           *       *       *       *       *       *       *

  [(G)(i) Each executive officer and each stockholder of record 
who directly or indirectly owns, controls, or has the power to 
vote more than 10 per centum of any class of voting securities 
of an insured bank shall make a written report to the board of 
directors of such bank for any year during which such executive 
officer or shareholder has outstanding an extension of credit 
from a bank which maintains a corresponding account in the name 
of such bank. Such report shall include the following 
information:
          [(1) the maximum amount of indebtedness to the bank 
        maintaining the correspondent account during such year 
        of (a) such executive officer or stockholder of record, 
        (b) each company controlled by such executive officer 
        or stockholder, or (c) each political or campaign 
        committee the funds or services of which will benefit 
        such executive officer or stockholder, or which is 
        controlled by such executive officer or stockholder;
          [(2) the amount of indebtedness to the bank 
        maintaining the correspondent account outstanding as of 
        a date not more than ten days prior to the date of 
        filing of such report of (a) such executive officer or 
        stockholder of record, (b) each company controlled by 
        such executive officer or stockholder, or (c) each 
        political or campaign committee the funds or services 
        of which will benefit such executive officer or 
        stockholder;
          [(3) the range of interest rates charged on such 
        indebtedness of such executive officer or stockholder 
        of record; and
          [(4) the terms and conditions of such indebtedness of 
        such executive officer or stockholder of record.
  [(ii) The appropriate Federal banking agencies are authorized 
to issue rules and regulations, including definitions of terms, 
to require the reporting and public disclosure of information 
by any bank or executive officer or principal shareholder 
thereof concerning any extension of credit by a correspondent 
bank to the reporting bank's executive officers or principal 
shareholders, or the related interests of such persons.]
  [(H)] (G) For the purpose of this paragraph--
          (i) * * *

           *       *       *       *       *       *       *

  [(I)] (H) Notice Under This Section After Separation From 
Service.--The resignation, termination of employment or 
participation, or separation of an institution-affiliated party 
(within the meaning of section 3(u) of the Federal Deposit 
Insurance Act) with respect to such a bank (including a 
separation caused by the closing of such a bank) shall not 
affect the jurisdiction and authority of the appropriate 
Federal banking agency to issue any notice and proceed under 
this section against any such party, if such notice is served 
before the end of the 6-year period beginning on the date such 
party ceased to be such a party with respect to such bank 
(whether such date occurs before, on, or after the date of the 
enactment of this subparagraph).

           *       *       *       *       *       *       *

                              ----------                              


  SECTION 203 OF THE DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS ACT

  Sec. 203. A management official of a depository institution 
or a depository holding company may not serve as a management 
official of any other depository institution or depository 
holding company not affiliated therewith if an office of one of 
the institutions or any depository institution that is an 
affiliate of such institutions is located within either--
          (1) the same primary metropolitan statistical area, 
        the same metropolitan statistical area, or the same 
        consolidated metropolitan statistical area that is not 
        comprised of designated primary metropolitan 
        statistical areas as defined by the Office of 
        Management and Budget, except in the case of depository 
        institutions with less than [$20,000,000] $100,000,000 
        in assets in which case the provision of paragraph (2) 
        shall apply, as that in which an office of the other 
        institution or any depository institution that is an 
        affiliate of such institution is located, or

           *       *       *       *       *       *       *

                              ----------                              


                        BANK SERVICE COMPANY ACT

                      SHORT TITLE AND DEFINITIONS

  Section 1. (a) * * *
  (b) For the purpose of this Act--
          (1) * * *
          (2) the term ``bank service company'' means--
                  (A) any corporation--
                          (i) * * *
                          (ii) all of the capital stock of 
                        which is owned by 1 or more [insured 
                        banks] insured depository institutions; 
                        and
                  (B) any limited liability company--
                          (i) * * *
                          (ii) all of the members of which are 
                        1 or more [insured banks] insured 
                        depository institutions.

           *       *       *       *       *       *       *

          (4) the term ``depository institution'' means, except 
        when such term appears in connection with the term 
        ``insured depository institution'', an insured bank, a 
        financial institution subject to examination by the 
        [Federal Home Loan Bank Board] Director of the Office 
        of Thrift Supervision or the National Credit Union 
        Administration Board, or a financial institution the 
        accounts or deposits of which are insured or guaranteed 
        under State law and are eligible to be insured by the 
        Federal Deposit Insurance Corporation, the Federal 
        Savings and Loan Insurance Corporation, or the National 
        Credit Union Administration Board;
          [(5) the term ``insured bank'' shall have the meaning 
        provided in section 3(h) of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813(h));]
          (5) Insured depository institution.--The term 
        ``insured depository institution'' has the meaning 
        given the term in section 3(c) of the Federal Deposit 
        Insurance Act;

           *       *       *       *       *       *       *

          (7) the term ``limited liability company'' means any 
        company, partnership, trust, or similar business entity 
        organized under the law of a State (as defined in 
        section 3 of the Federal Deposit Insurance Act) which 
        provides that a member or manager of such company is 
        not personally liable for a debt, obligation, or 
        liability of the company solely by reason of being, or 
        acting as, a member or manager of such company; [and]
          (8) the term ``principal investor'' means the 
        [insured bank] insured depository institution that has 
        the largest dollar amount invested in the equity of a 
        bank service company. In any case where two or more 
        [insured banks] insured depository institutions have 
        equal dollar amounts invested in a bank service 
        company, the company shall, prior to commencing 
        operations, select one of the [insured banks] insured 
        depository institutions as its principal investor and 
        shall notify [the bank's] the depository institution's 
        appropriate Federal banking agency of that choice 
        within 5 business days of its selection[.]; and
          (9) the terms ``State depository institution'', 
        ``Federal depository institution'', ``State savings 
        association'' and ``Federal savings association'' have 
        the meanings given the terms in section 3 of the 
        Federal Deposit Insurance Act.

              AMOUNT OF INVESTMENT IN BANK SERVICE COMPANY

  Sec. 2. Notwithstanding any limitation or prohibition 
otherwise imposed by any provision of law exclusively relating 
to banks or savings associations, other than the limitation on 
the amount of investment by a Federal savings association 
contained in section 5(c)(4)(B) of the Home Owners' Loan Act, 
an [insured bank] insured depository institution may invest not 
more than 10 per centum of paid-in and unimpaired capital and 
unimpaired surplus in a bank service company. No [insured bank] 
insured depository institution shall invest more than 5 per 
centum of its total assets in bank service companies.

PERMISSIBLE BANK SERVICE COMPANY ACTIVITIES FOR DEPOSITORY INSTITUTIONS

  Sec. 3. Without regard to the provisions of sections 4 and 5 
of this Act, an [insured bank] insured depository institution 
may invest in a bank service company that performs, and a bank 
service company may perform, the following services only for 
depository institutions: check and deposit sorting and posting, 
computation and posting of interest and other credits and 
charges, preparation and mailing of checks, statements, 
notices, and similar items, or any other clerical, bookkeeping, 
accounting, statistical, or similar functions performed for a 
depository institution.

     PERMISSIBLE BANK SERVICE COMPANY ACTIVITIES FOR OTHER PERSONS

  Sec. 4. (a) * * *

           *       *       *       *       *       *       *

  (c) A bank service company in which a State bank or State 
savings association is a shareholder or member shall perform 
only those services that such State bank or State savings 
association shareholder or member is authorized to perform 
under the law of the State in which such State bank or State 
savings association operates and shall perform such services 
only at locations in the State in which such State bank or 
State savings association shareholder or member could be 
authorized to perform such services.
  (d) A bank service company in which a national bank or 
Federal savings association is a shareholder or member shall 
perform only those services that such national bank or Federal 
savings association shareholder or member is authorized to 
perform under the law of the United States and shall perform 
such services only at locations in the State at which such 
national bank or Federal savings association shareholder or 
member could be authorized to perform such services.
  [(e) A bank service company that has both national bank and 
State bank shareholders or members shall perform only those 
services that may lawfully be performed by both any shareholder 
or member of the company which is a national bank under the law 
of the United States and any shareholder or member of the 
company which is a State bank under the law of the State in 
which any such State bank operate and shall perform such 
services only at locations in the State at which both its State 
bank and national bank shareholders or members could be 
authorized to perform such services.]
  (e) A bank service company may perform--
          (1) only those services that each depository 
        institution shareholder or member is otherwise 
        authorized to perform under any applicable Federal or 
        State law; and
          (2) such services only at locations in a State in 
        which each such shareholder or member is authorized to 
        perform such services.
  (f) Notwithstanding the other provisions of this section or 
any other provision of law, other than the provisions of 
Federal and State branching law regulating the geographic 
location of banks or savings associations to the extent that 
those laws are applicable to an activity authorized by this 
subsection, a bank service company may perform at any 
geographic location any service, other than deposit taking, 
that the Board has determined, by regulation, to be permissible 
for a bank holding company under section 4(c)(8) of the Bank 
Holding Company Act.

        PRIOR APPROVAL FOR INVESTMENTS IN BANK SERVICE COMPANIES

  Sec. 5. (a) No [insured bank] insured depository institution 
shall invest in the capital stock of a bank service company 
that performs any service under authority of subsection (c), 
(d), or (e) of section 4 of this Act without prior notice, as 
determined by the [bank's] institution's appropriate Federal 
banking agency.
  (b) No [insured bank] insured depository institution shall 
invest in the capital stock of a bank service company that 
performs any service under authority of section 4(f) of this 
Act and no bank service company shall perform any activity 
under section 4(f) of this Act without the prior approval of 
the Board.
  (c) In determining whether to approve or deny any application 
for prior approval or whether to approve or disapprove any 
notice under this section, the Board or the appropriate Federal 
banking agency, as the case may be, is authorized to consider 
the financial and managerial resources and future prospects of 
[the bank or banks] any depository institution and bank service 
company involved, including the financial [capability of the 
bank] capability of the depository institution to make a 
proposed investment under this Act, and possible adverse 
effects such as undue concentration of resources, unfair or 
decreased competition, conflicts of interest, or unsafe or 
unsound banking practices.

           *       *       *       *       *       *       *


          REGULATION AND EXAMINATION OF BANK SERVICE COMPANIES

  Sec. 7. (a) * * *
  (b) A bank service company shall be subject to the provisions 
of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 
1818) as if the bank service company were an [insured bank] 
insured depository institution. For this purpose, the 
appropriate Federal banking agency shall be the appropriate 
Federal banking agency of the principal investor of the bank 
service company.
  (c) Notwithstanding subsection (a) of this section, whenever 
[a bank] a depository institution that is regularly examined by 
an appropriate Federal banking agency, or any subsidiary or 
affiliate of such [a bank] a depository institution that is 
subject to examination by that agency, causes to be performed 
for itself, by contract or otherwise, any services authorized 
under this Act, whether on or off its premises--
          (1) such performance shall be subject to regulation 
        and examination by such agency to the same extent as if 
        such services were being performed by [the bank] the 
        depository institution itself on its own premises, and
          (2) [the bank] the depository institution shall 
        notify such agency of the existence of the service 
        relationship within thirty days after the making of 
        such service contract or the performance of the 
        service, whichever occurs first.

           *       *       *       *       *       *       *

                              ----------                              


TITLE 18, UNITED STATES CODE

           *       *       *       *       *       *       *



PART I--CRIMES

           *       *       *       *       *       *       *


         CHAPTER 11--BRIBERY, GRAFT, AND CONFLICTS OF INTEREST

Sec.
201.  Bribery of public officials and witnesses.
     * * * * * * *
[212.  Offer of loan or gratuity to bank examiner.
[213.  Acceptance of loan or gratuity by bank examiner.]
212.  Offer of credit to bank examiner.
213.  Acceptance of credit by bank examiner.
     * * * * * * *

[Sec. 212. Offer of loan or gratuity to bank examiner

  [Whoever, being an officer, director or employee of a 
financial institution which is a member of the Federal Reserve 
System, or the deposits of which are insured by the Federal 
Deposit Insurance Corporation, or which is a branch or agency 
of a foreign bank (as such terms are defined in paragraphs (1) 
and (3) of section 1(b) of the International Banking Act of 
1978), or which is an organization operating under section 25 
or section 25(a) of the Federal Reserve Act, or of any Farm 
Credit Bank, bank for cooperatives, production credit 
association, Federal land bank association, agricultural credit 
association, Federal land credit association, service 
organization chartered under section 4.26 of the Farm Credit 
Act of 1971, the Farm Credit System Financial Assistance 
Corporation, the Federal Agricultural Mortgage Credit 
Corporation, the Federal Farm Credit Banks Funding Corporation, 
the National Consumer Cooperative Bank, or other institution 
subject to examination by a Farm Credit Administration 
examiner, or of any small business investment company, makes or 
grants any loan or gratuity, to any examiner or assistant 
examiner who examines or has authority to examine such bank, 
branch, agency, organization, corporation, or institution, 
shall be fined under this title or imprisoned not more than one 
year, or both; and may be fined a further sum equal to the 
money so loaned or gratuity given.
  [The provisions of this section and section 213 of this title 
shall apply to all public examiners and assistant examiners who 
examine member banks of the Federal Reserve System, insured 
financial institutions, branches or agencies of foreign banks 
(as such terms are defined in paragraphs (1) and (3) of section 
1(b) of the International Banking Act of 1978), organizations 
operating under section 25 or section 25(a) of the Federal 
Reserve Act, whether appointed by the Comptroller of the 
Currency, by the Board of Governors of the Federal Reserve 
System, by a Federal Reserve Agent, by a Federal Reserve bank, 
by the Federal Deposit Insurance Corporation, by the Office of 
Thrift Supervision, or by the Federal Housing Finance Board, or 
appointed or elected under the laws of any state; but shall not 
apply to private examiners or assistant examiners employed only 
by a clearinghouse association or by the directors of a bank.

[Sec. 213. Acceptance of loan or gratuity by bank examiner

  [Whoever, being an examiner or assistant examiner of member 
banks of the Federal Reserve System, financial institutions the 
deposits of which are insured by the Federal Deposit Insurance 
Corporation, which are branches or agencies of foreign banks 
(as such terms are defined in paragraphs (1) and (3) of section 
1(b) of the International Banking Act of 1978), or which are 
organizations operating under section 25 or section 25(a) of 
the Federal Reserve Act, or a farm credit examiner, or an 
examiner of small business investment companies, accepts a loan 
or gratuity from any bank, branch, agency, corporation, 
association or organization examined by him or from any person 
connected herewith, shall be fined under this title or 
imprisoned not more than one year, or both; and may be fined a 
further sum equal to the money so loaned or gratuity given, and 
shall be disqualified from holding office as such examiner.]

           *       *       *       *       *       *       *


Sec. 212. Offer of credit to bank examiner

  (a) Subject to section 213(b), whoever being an officer, 
director or employee of a financial institution extends credit 
to any examiner which the examiner is prohibited from accepting 
under section 213 shall be fined under this title or imprisoned 
not more than one year, or both; and may be fined a further sum 
equal to the amount of the credit extended.
  (b) For purposes of this section, the following definitions 
shall apply:
          (1) The term ``financial institution'' does not 
        include a credit union, a Federal reserve bank, a 
        Federal home loan bank, or a depository institution 
        holding company.
          (2) The term ``examiner'' means any person--
                  (A) appointed by a Federal financial 
                institution regulatory agency or pursuant to 
                the laws of any State to examine a financial 
                institution; or
                  (B) elected under the law of any State to 
                conduct examinations of any financial 
                institution.
          (3) The term ``Federal financial institution 
        regulatory agency'' means--
                  (A) the Comptroller of the Currency;
                  (B) the Board of Governors of the Federal 
                Reserve System;
                  (C) the Director of the Office of Thrift 
                Supervision;
                  (D) the Federal Deposit Insurance 
                Corporation;
                  (E) the Federal Housing Finance Board;
                  (F) the Farm Credit Administration;
                  (G) the Farm Credit System Insurance 
                Corporation; and
                  (H) the Small Business Administration.

Sec. 213. Acceptance of credit by bank examiner

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

CHAPTER 61--LOTTERIES

           *       *       *       *       *       *       *


Sec. 1306. Participation by financial institutions

  Whoever knowingly violates section [5136A] 5136B of the 
Revised Statutes of the United States, section 9A of the 
Federal Reserve Act, or section 20 of the Federal Deposit 
Insurance Act shall be fined under this title or imprisoned not 
more than one year, or both.

           *       *       *       *       *       *       *


                            ADDITIONAL VIEWS

    Section 614 of this legislation would repeal a provision of 
title IX of the Financial Institutions Reform, Recovery and 
Enforcement Act (FIRREA), which established a ``knowingly and 
reckless'' standard for banking agency administrative actions 
against ``institution affiliated'' parties, like appraisers, 
accountants or lawyers. The effect of this provision would be 
to subject independent contractors to the banking agencies' 
enforcement authority merely as a result of their status.
    I have several concerns regarding section 614 of this bill, 
which I expressed in both the subcommittee and full committee. 
This provision would subject third parties--who do not 
participate in the financial institution's management--to the 
same enforcement penalties as management, even though they are 
not charged with the responsibility of running the institution. 
These outside contractors have no control over internal bank 
underwriting and operational decisionmaking. This proposed 
change in law would contradict the intent of FIRREA which 
enhanced the enforcement powers of the regulatory agencies in a 
way that recognized the distinction between powerful insiders 
who control their institutions and those hired independent 
contractors who perform specialized services for them.
    Moreover, it is not clear to me that the agencies do not 
have sufficient authority to bring the necessary enforcement 
actions under current law. Under current law, the banking 
agencies are empowered to bring administrative enforcement 
proceedings against a depository institution or an 
``institution affiliated party'' of that bank. Such proceedings 
include civil money penalties, suspension or removal, and 
temporary and permanent cease and desist orders. The agencies 
can assess massive fines of up to $1 million a day, seek 
restitution, or remove a professional from rendering services 
to an insured institution. Why would the agencies need any more 
authority?
    Lastly, I don't understand why a provision that imposes new 
burdens on industry is being included in a bill that calls for 
regulatory relief. Section 614 is a new provision that was 
added to this year's Regulatory Relief bill at the eleventh 
hour in response to the banking regulators. The provision has 
not been the subject of any substantive debate nor has there 
been time for input from the affected industries.
    We in Congress must be very deliberative before we grant 
broad administrative enforcement authority. Administrative 
enforcement actions are brought by agency staff, heard by an 
administrative law judge, and ultimately decided by the agency 
itself. The agencies are the judge and the jury, and in some 
cases their sentences can be draconian. Although a decision can 
be appealed in the federal courts, deference is traditionally 
given to the agencies. Such administrative process does not 
provide the type of due process that should be afforded to 
third party independent consultants who are not ``insiders.''
    As this bill moves forward in the legislative process, I 
hope my concerns will be addressed.
                                                    Spencer Bachus.

                                
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