[House Report 109-356]
[From the U.S. Government Publishing Office]



109th Congress                                            Rept. 109-356
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

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



 
            FINANCIAL SERVICES REGULATORY RELIEF ACT OF 2005

                                _______
                                

               December 17, 2005.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 3505]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Financial Services, to whom was referred the 
bill (H.R. 3505) 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........................................................     1
Purpose and Summary..............................................    45
Background and Need for Legislation..............................    45
Hearings.........................................................    48
Committee Consideration..........................................    48
Committee Votes..................................................    48
Committee Oversight Findings.....................................    50
Performance Goals and Objectives.................................    50
New Budget Authority, Entitlement Authority, and Tax Expenditures    50
Committee Cost Estimate..........................................    50
Congressional Budget Office Estimate.............................    50
Federal Mandates Statement.......................................    57
Advisory Committee Statement.....................................    57
Constitutional Authority Statement...............................    58
Applicability to Legislative Branch..............................    58
Section-by-Section Analysis of the Legislation...................    58
Changes in Existing Law Made by the Bill, as Reported............    78

                               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 2005''.
  (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. Equal treatment for Federal agencies of foreign banks.
Sec. 108. Maintenance of a Federal branch and a Federal agency in the 
same State.
Sec. 109. Business organization flexibility for national banks.
Sec. 110. Clarification of the main place of business of a national 
bank.
Sec. 111. Capital equivalency deposits for Federal branches and 
agencies of foreign banks.
Sec. 112. Enhancing the authority for national banks to make community 
development investments.

                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. Increase in limits on commercial real estate loans.
Sec. 215. Repeal of one limit on loans to one borrower.
Sec. 216. Savings association credit card banks.
Sec. 217. Interstate acquisitions by S&L holding companies.
Sec. 218. Business organization flexibility for federal savings 
associations.

                   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.
Sec. 314. Clarification of definition of net worth under certain 
circumstances for purposes of prompt corrective action.
Sec. 315. Amendments relating to nonfederally insured credit unions.

              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.
Sec. 410. Community reinvestment credit for esops and ewocs.
Sec. 411. Minority financial institutions.

         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.
Sec. 505. Savings associations acting as agents for affiliated 
depository institutions.
Sec. 506. Credit card bank investments for the public welfare.

                  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. Streamlining reports of condition.
Sec. 607. Expansion of eligibility for 18-month examination schedule 
for community banks.
Sec. 608. Short form reports of condition for certain community banks.
Sec. 609. Clarification of extent of suspension, removal, and 
prohibition authority of Federal banking agencies in cases of certain 
crimes by institution-affiliated parties.
Sec. 610. Streamlining depository institution merger application 
requirements.
Sec. 611. Inclusion of Director of the Office of Thrift Supervision in 
list of banking agencies regarding insurance customer protection 
regulations.
Sec. 612. Protection of confidential information received by Federal 
banking regulators from foreign banking supervisors.
Sec. 613. Prohibition on participation by convicted individual.
Sec. 614. Clarification that notice after separation from service may 
be made by an order.
Sec. 615. Enforcement against misrepresentations regarding FDIC deposit 
insurance coverage.
Sec. 616. Changes required to small bank holding company policy 
statement on assessment of financial and managerial factors.
Sec. 617. Exception to annual privacy notice requirement under the 
Gramm-Leach-Bliley Act.
Sec. 618. Biennial reports on the status of agency employment of 
minorities and women.
Sec. 619. Coordination of State examination authority.
Sec. 620. Nonwaiver of privileges.
Sec. 621. Right to Financial Privacy Act of 1978 amendment.
Sec. 622. Deputy director; succession authority for Director of the 
Office of Thrift Supervision.
Sec. 623. Limitation on scope of new agency guidelines.

             TITLE VII--``BSA'' COMPLIANCE BURDEN REDUCTION

Sec. 701. Exception from currency transaction reports for seasoned 
customers.
Sec. 702. Reduction in inconsistencies in monetary transaction 
recordkeeping and reporting enforcement and examination requirements.
Sec. 703. Additional reforms relating to monetary transaction and 
recordkeeping requirements applicable to financial institutions.
Sec. 704. Study by Comptroller General.
Sec. 705. Feasibility study required.
Sec. 706. Annual report by Secretary of the Treasury.
Sec. 707. Preservation of money services businesses.

             TITLE VIII--CLERICAL AND TECHNICAL AMENDMENTS

Sec. 801. Clerical amendments to the Home Owners' Loan Act.
Sec. 802. Technical corrections to the Federal Credit Union Act.
Sec. 803. Other technical corrections.
Sec. 804. Repeal of obsolete provisions of the Bank Holding Company Act 
of 1956.

        TITLE IX--FAIR DEBT COLLECTION PRACTICES ACT AMENDMENTS

Sec. 901. Exception for certain bad check enforcement programs.
Sec. 902. Other amendments.

                   TITLE I--NATIONAL BANK PROVISIONS

SEC. 101. NATIONAL BANK DIRECTORS.

  (a) In General.--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.''.
  (b) 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 striking the item relating to section 5146 and 
inserting the following new item:

``5146. Requirements for bank directors.''.

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. 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. 108. 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. 109. 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. 110. 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''.

SEC. 111. 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. 112. ENHANCING THE AUTHORITY FOR NATIONAL BANKS TO MAKE COMMUNITY 
                    DEVELOPMENT INVESTMENTS.

  The last sentence in the paragraph designated as the ``Eleventh.'' of 
section 5136 of the Revised Statutes of the United States (12 U.S.C. 
24) is amended by striking ``10 percent'' each place such term appears 
and inserting ``15 percent''.

                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 15 percent 
                        of the savings association's capital stock 
                        actually paid in and unimpaired and 15 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 States in which such savings 
association has its home office and its principal place of business (if 
the principal place of business is in a different State than the home 
office).''.

SEC. 214. INCREASE IN LIMITS ON COMMERCIAL REAL ESTATE LOANS.

  Section 5(c)(2)(B)(i) of the Home Owners' Loan Act (12 U.S.C. 
1464(c)(2)(B)(i)) is amended by striking ``400 percent'' and inserting 
``500 percent''.

SEC. 215. REPEAL OF ONE LIMIT ON LOANS TO ONE BORROWER.

  Subparagraph (A) of section 5(u)(2) of the Home Owners' Loan Act (12 
U.S.C. 1464(u)(2)(A)) is amended--
          (1) by striking subclause (I) of clause (ii);
          (2) by redesignating subclauses (II), (III), (IV), and (V) of 
        clause (ii) as subclauses (I), (II), (III), and (IV), 
        respectively;
          (3) in clause (i)--
                  (A) by striking ``for any'' and inserting ``For 
                any''; and
                  (B) by striking ``; or'' and inserting a period; and
          (4) in clause (ii), by striking ``to develop domestic'' and 
        inserting ``To develop domestic''.

SEC. 216. SAVINGS ASSOCIATION CREDIT CARD BANKS.

  Section 10(a)(1)(A) of the Home Owners' Loan Act (12 U.S.C. 
1467a(a)(1)(A)) is amended by inserting ``and such term does not 
include an institution described in section 2(c)(2)(F) of the Bank 
Holding Company Act of 1956 for purposes of subsections (a)(1)(E), 
(c)(3)(B)(i), (c)(9)(C)(i), and (e)(3)'' before the period at the end.

SEC. 217. INTERSTATE ACQUISITIONS BY S&L HOLDING COMPANIES.

  Section 10(e)(3) of the Home Owners' Loan Act (12 U.S.C. 1467a(e)(3)) 
is amended--
          (1) by redesignating subparagraphs (A), (B), and (C) as 
        subparagraphs (B), (C), and (D), respectively; and
          (2) by inserting before subparagraph (B) (as so redesignated) 
        the following new subparagraph:
                  ``(A) such acquisition would be permissible under 
                section 3(d) of the Bank Holding Company Act of 1956 if 
                the savings and loan holding company were a bank 
                holding company and any savings association to be 
                acquired were a bank;''.

SEC. 218. BUSINESS ORGANIZATION FLEXIBILITY FOR FEDERAL SAVINGS 
                    ASSOCIATIONS.

  (a) In General.--Section 5 of the Home Owners' Loan Act (12 U.S.C. 
1464) is amended by inserting after subsection (x) (as added by section 
213) following new subsection:
  ``(y) Alternative Business Organization.--
          ``(1) In general.--The Director may prescribe regulations 
        that--
                  ``(A) permit a Federal savings association to be 
                organized other than as a corporation; and
                  ``(B) provide requirements for the organizational 
                characteristics of a Federal savings association 
                organized and operating other than as a corporation, 
                consistent with the safety and soundness of the Federal 
                savings association.
          ``(2) Equal treatment.--Except as otherwise provided in 
        regulations prescribed under subsection (1), a Federal savings 
        association that is operating other than as a corporation shall 
        have the same rights and privileges and shall be subject to the 
        same duties, restrictions, penalties, liabilities, conditions, 
        and limitations as a Federal savings association that is 
        organized as a corporation.''.
  (b) Technical and Conforming Amendments.--
          (1) Section 5(a)(1) of the Home Owners' Loan Act (12 U.S.C. 
        1464(a)(1)) is amended by striking ``organization, 
        incorporation,'' and inserting ``organization (as a corporation 
        or other form of business organization provided under 
        regulations prescribed by the Director under subsection 
        (x)),''.
          (2) The last sentence of section 5(i)(1) of the Home Owners' 
        Loan Act (12 U.S.C. 1464(i)(1)) is amended by striking 
        ``incorporated'' and inserting ``organized''.
          (3) Section 5(o)(1) of the Home Owners' Loan Act (12 U.S.C. 
        1464(a)(1)) is amended by striking ``organization, 
        incorporation,'' and inserting ``organization (as a corporation 
        or other form of business organization provided under 
        regulations prescribed by the Director under subsection 
        (x)),''.

                   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) Additional Investment Authority.--
          ``(1) In general.--In addition to any investments otherwise 
        authorized, 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 international and domestic electronic fund 
                transfers); and
                  ``(B) to cash checks and money orders and receive 
                international and domestic 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)(v)(I) of the Federal Credit Union Act (12 U.S.C. 
1757(5)(A)(vi)(I)) (as so designated by section 303 and redesignated by 
section 304(2)(B) 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.

SEC. 314. CLARIFICATION OF DEFINITION OF NET WORTH UNDER CERTAIN 
                    CIRCUMSTANCES FOR PURPOSES OF PROMPT CORRECTIVE 
                    ACTION.

  Subparagraph (A) of section 216(o)(2) of the Federal Credit Union Act 
(12 U.S.C. 1790d(o)(2)(A)) is amended--
          (1) by inserting ``the'' before ``retained earnings 
        balance''; and
          (2) by inserting ``, together with any amounts that were 
        previously retained earnings of any other credit union with 
        which the credit union has combined'' before the semicolon at 
        the end.

SEC. 315. AMENDMENTS RELATING TO NONFEDERALLY INSURED CREDIT UNIONS.

  (a) In General.--Subsection (a) of section 43 of the Federal Deposit 
Insurance Act (12 U.S.C. 1831t(a)) is amended by adding at the end the 
following new paragraph:
          ``(3) Enforcement by appropriate state supervisor.--Any 
        appropriate State supervisor of a private deposit insurer, and 
        any appropriate State supervisor of a depository institution 
        which receives deposits that are insured by a private deposit 
        insurer, may examine and enforce compliance with this 
        subsection under the applicable regulatory authority of such 
        supervisor.''.
  (b) Amendment Relating to Disclosures Required, Periodic Statements 
and Account Records.--Section 43(b)(1) of the Federal Deposit Insurance 
Act (12 U.S.C. 1831t(b)(1)) is amended by striking ``or similar 
instrument evidencing a deposit'' and inserting ``or share 
certificate''.
  (c) Amendments Relating to Disclosures Required, Advertising, 
Premises.-- Section 43(b)(2) of the Federal Deposit Insurance Act (12 
U.S.C. 1831t(b)(2)) is amended to read as follows:
          ``(2) Advertising; premises.--
                  ``(A) In general.--Include clearly and conspicuously 
                in all advertising, except as provided in subparagraph 
                (B); and at each station or window where deposits are 
                normally received, its principal place of business and 
                all its branches where it accepts deposits or opens 
                accounts (excluding automated teller machines or point 
                of sale terminals), and on its main Internet page, a 
                notice that the institution is not federally insured.
                  ``(B) Exceptions.--The following need not include a 
                notice that the institution is not federally insured:
                          ``(i) Statements or reports of financial 
                        condition of the depository institution that 
                        are required to be published or posted by State 
                        or Federal law or regulation.
                          ``(ii) Any sign, document, or other item that 
                        contains the name of the depository 
                        institution, its logo, or its contact 
                        information, but only if the sign, document, or 
                        item does not include any information about the 
                        institution's products or services or 
                        information otherwise promoting the 
                        institution.
                          ``(iii) Small utilitarian items that do not 
                        mention deposit products or insurance if 
                        inclusion of the notice would be 
                        impractical.''.
  (d) Amendments Relating to Acknowledgment of Disclosure.--Section 
43(b)(3) of the Federal Deposit Insurance Act (12 U.S.C. 1831t(b)(3)) 
is amended to read as follows:
          ``(3) Acknowledgment of disclosure.--
                  ``(A) New depositors obtained other than through a 
                conversion or merger.--With respect to any depositor 
                who was not a depositor at the depository institution 
                before the effective date of the Financial Services 
                Relief Act of 2005, and who is not a depositor as 
                described in subparagraph (B), receive any deposit for 
                the account of such depositor only if the depositor has 
                signed a written acknowledgement that--
                          ``(i) the institution is not federally 
                        insured; and
                          ``(ii) if the institution fails, the Federal 
                        Government does not guarantee that the 
                        depositor will get back the depositor's money.
                  ``(B) New depositors obtained through a conversion or 
                merger.--With respect to a depositor at a federally 
                insured depository institution that converts to, or 
                merges into, a depository institution lacking federal 
                insurance after the effective date of the Financial 
                Services Regulatory Relief Act of 2005, receive any 
                deposit for the account of such depositor only if--
                          ``(i) the depositor has signed a written 
                        acknowledgement described in subparagraph (A); 
                        or
                          ``(ii) the institution makes an attempt, as 
                        described in subparagraph (D) and sent by mail 
                        no later than 45 days after the effective date 
                        of the conversion or merger, to obtain the 
                        acknowledgment.
                  ``(C) Current depositors.--Receive any deposit after 
                the effective date of the Financial Services Regulatory 
                Relief Act of 2005 for the account of any depositor who 
                was a depositor on that date only if--
                          ``(i) the depositor has signed a written 
                        acknowledgement described in subparagraph (A); 
                        or
                          ``(ii) the institution makes an attempt, as 
                        described in subparagraph (D) and sent by mail 
                        no later than 45 days after the effective date 
                        of the Financial Services Regulatory Relief Act 
                        of 2005, to obtain the acknowledgment.
                  ``(D) Alternative provision of notice to current 
                depositors and new depositors obtained through a 
                conversion or merger.--
                          ``(i) In general.--Transmit to each depositor 
                        who has not signed a written acknowledgement 
                        described in subparagraph (A)--
                                  ``(I) a conspicuous card containing 
                                the information described in clauses 
                                (i) and (ii) of subparagraph (A), and a 
                                line for the signature of the 
                                depositor; and
                                  ``(II) accompanying materials 
                                requesting the depositor to sign the 
                                card, and return the signed card to the 
                                institution.''.
  (e) Repeal of Provision Prohibiting Nondepository Institutions From 
Accepting Deposits.--Section 43 of the Federal Deposit Insurance Act 
(12 U.S.C. 1831t) is amended--
          (1) by striking subsection (e); and
          (2) by redesignating subsections (f) and (g) as subsections 
        (e) and (f), respectively.
  (f) Repeal of Provision Concerning Nondepository Institutions 
Masquerading as Depository Institutions and Clarification of Depository 
Institutions Covered by the Statute.--Subsection (e)(2) (as so 
redesignated by subsection (e) of this section) of section 43 of the 
Federal Deposit Insurance Act (12 U.S.C. 1831t) is amended to read as 
follows:
          ``(2) Depository institution.--The term `depository 
        institution'--
                  ``(A) includes any entity described in section 
                19(b)(1)(A)(iv) of the Federal Reserve Act; and
                  ``(B) does not include any national bank, State 
                member bank, or Federal branch.''.
  (g) Repeal of FTC Authority to Enforce Independent Audit Requirement; 
Concurrent State Enforcement.--Subsection (f) (as so redesignated by 
subsection (e) of this section) of section 43 of the Federal Deposit 
Insurance Act (12 U.S.C. 1831t) is amended to read as follows:
  ``(f) Enforcement.--
          ``(1) Limited ftc enforcement authority.--Compliance with the 
        requirements of subsections (b) and (c), and any regulation 
        prescribed or order issued under any such subsection, shall be 
        enforced under the Federal Trade Commission Act by the Federal 
        Trade Commission.
          ``(2) Broad state enforcement authority.--
                  ``(A) In general.--Subject to subparagraph (C), an 
                appropriate State supervisor of a depository 
                institution lacking Federal deposit insurance may 
                examine and enforce compliance with the requirements of 
                this section, and any regulation prescribed under this 
                section.
                  ``(B) State powers.--For purposes of bringing any 
                action to enforce compliance with this section, no 
                provision of this section shall be construed as 
                preventing an appropriate State supervisor of a 
                depository institution lacking Federal deposit 
                insurance from exercising any powers conferred on such 
                official by the laws of such State.
                  ``(C) Limitation on state action while federal action 
                pending.--If the Federal Trade Commission has 
                instituted an enforcement action for a violation of 
                this section, no appropriate State supervisor may, 
                during the pendency of such action, bring an action 
                under this section against any defendant named in the 
                complaint of the Commission for any violation of this 
                section that is alleged in that complaint.''.

              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) Interstate branching by subsidiaries of commercial firms 
        prohibited.--Section 18(d)(3)) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1828(d)(3)) is amended by adding at the end the 
        following new subparagraph:
                  ``(C) Interstate branching by subsidiaries of 
                commercial firms prohibited.--
                          ``(i) In general.--If the appropriate State 
                        bank supervisor of the home State of any 
                        industrial loan company, industrial bank, or 
                        other institution described in section 
                        2(c)(2)(H) of the Bank Holding Company Act of 
                        1956, or the appropriate State bank supervisor 
                        of any host State with respect to such company, 
                        bank, or institution, determines that such 
                        company, bank, or institution is controlled, 
                        directly or indirectly, by a commercial firm, 
                        such company, bank, or institution may not 
                        acquire, establish, or operate a branch in such 
                        host State.
                          ``(ii) Commercial firm defined.--For purposes 
                        of this subsection, the term `commercial firm' 
                        means any entity at least 15 percent of the 
                        annual gross revenues of which on a 
                        consolidated basis, including all affiliates of 
                        the entity, were derived from engaging, on an 
                        on-going basis, in activities that are not 
                        financial in nature or incidental to a 
                        financial activity during at least 3 of the 
                        prior 4 calendar quarters.
                          ``(iii) Grandfathered institutions.--Clause 
                        (i) shall not apply with respect to any 
                        industrial loan company, industrial bank, or 
                        other institution described in section 
                        2(c)(2)(H) of the Bank Holding Company Act of 
                        1956--
                                  ``(I) which became an insured 
                                depository institution before October 
                                1, 2003 or pursuant to an application 
                                for deposit insurance which was 
                                approved by the Corporation before such 
                                date; and
                                  ``(II) with respect to which there is 
                                no change in control, directly or 
                                indirectly, of the company, bank, or 
                                institution after September 30, 2003, 
                                that requires an application under 
                                subsection (c), section 7(j), section 3 
                                of the Bank Holding Company Act of 
                                1956, or section 10 of the Home Owners' 
                                Loan Act.
                          ``(iv) Transition provision.--Any divestiture 
                        required under this subparagraph of a branch in 
                        a host State shall be completed as quickly as 
                        is reasonably possible.
                          ``(v) Corporate reorganizations permitted.--
                        The acquisition of direct or indirect control 
                        of the company, bank, or institution referred 
                        to in clause (iii)(II) shall not be treated as 
                        a `change in control' for purposes of such 
                        clause if the company acquiring control is 
                        itself directly or indirectly controlled by a 
                        company that was an affiliate of such company, 
                        bank, or institution on the date referred to in 
                        clause (iii)(II), and remained an affiliate at 
                        all times after such date.''.
          (3) Technical and conforming amendments.--Section 18(d)(4) of 
        the Federal Deposit Insurance Act (12 U.S.C. 1828(d)(4)) is 
        amended--
                  (A) in subparagraph (A) by striking ``Subject to 
                subparagraph (B)'' and inserting ``Subject to 
                subparagraph (B) and paragraph (3)(C)''; and
                  (B) in subparagraphs (D) and (E), by striking ``The 
                term'' and inserting ``For purposes of this subsection, 
                the term''.
          (4) 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 or are applicable to an insured State nonmember bank under 
section 18(d)(3) of the Federal Deposit Insurance Act''. 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) and 
                        inserting the following new paragraph:
          ``(5) Applicability to industrial loan companies.--No 
        provision of this section shall be construed as authorizing the 
        approval of any transaction involving a industrial loan 
        company, industrial bank, or other institution described in 
        section 2(c)(2)(H) of the Bank Holding Company Act of 1956, or 
        the acquisition, establishment, or operation of a branch by any 
        such company, bank, or institution, that is not allowed under 
        section 18(d)(3).''.
                  (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)(i), 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(b) of the Bank Service Company Act (12 U.S.C. 
        1864(b)) is amended by inserting ``as permissible under 
        subsection (c), (d), or (e) or'' after ``Except''.
          (8) 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.
          (9) 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.
          (10) 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.''.
          (11) 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''.
          (12) 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)--
                          (i) by striking ``insured bank'' and 
                        inserting ``insured depository institution'';
                          (ii) by inserting ``authorized only'' after 
                        ``performs any service''; and
                          (iii) by inserting ``authorized only'' after 
                        ``perform any activity''; 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''.
          (13) 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''.

SEC. 410. COMMUNITY REINVESTMENT CREDIT FOR ESOPS AND EWOCS.

  Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C. 
2903) is amended by adding at the end the following new subsection--
  ``(d) Establishment of Esops and Ewocs.--
          ``(1) In general.--In assessing and taking into account, 
        under subsection (a), the record of a financial institution, 
        the appropriate Federal financial supervisory agency shall 
        consider as a factor activities that support or enable the 
        establishment of employee stock ownership plans or eligible 
        worker-owned cooperatives, so long as the employer sponsoring 
        the plan or cooperative is at least 51 percent owned by 
        employees, including low to moderate income employees.
          ``(2) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                  ``(A) Employee stock ownership plan.--The term 
                `employee stock ownership plan' has the same meaning as 
                in section 4975(e)(7) of the Internal Revenue Code of 
                1986.
                  ``(B) Eligible worker-owned cooperative.--The term 
                `eligible worker-owned cooperative' has the same 
                meaning as in section 1042(c)(2) of the Internal 
                Revenue Code of 1986.''.

SEC. 411. MINORITY FINANCIAL INSTITUTIONS.

  (a) In General.--The Federal Deposit Insurance Corporation and the 
Office of Thrift Supervision shall provide such technical assistance to 
minority financial institutions affected by Hurricane Katrina, 
Hurricane Rita, and Hurricane Wilma as may be appropriate to preserve 
the present number of minority depository institutions and preserve the 
minority character in cases involving mergers or acquisitions of a 
minority depository institution consistent with section 308(a) of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
  (b) Minority Financial Institution Defined.--For purposes of this 
subsection, the term ``minority financial institution'' has the same 
meaning as in section 308(b) of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989.

         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.''.

SEC. 505. SAVINGS ASSOCIATIONS ACTING AS AGENTS FOR AFFILIATED 
                    DEPOSITORY INSTITUTIONS.

  (a) In General.--Section 18(r) of the Federal Deposit Insurance Act 
(12 U.S.C. 1828(r)) is amended--
          (1) in paragraph (1)--
                  (A) by striking ``bank subsidiary'' and inserting 
                ``depository institution subsidiary''; and
                  (B) by striking ``bank holding company'' and 
                inserting ``depository institution holding company'';
          (2) in paragraph (2), by striking ``a bank acting'' and 
        inserting ``a depository institution acting'';
          (3) in paragraphs (3) and (5), by striking ``or (6)'' each 
        place such term appears in each such paragraph; and
          (4) by striking paragraph (6).
  (b) Clerical Amendment.--The heading for section 18(r)(2) of the 
Federal Deposit Insurance Act (12 U.S.C. 1828(r)) is amended by 
striking ``Bank'' and inserting ``Depository institution''.

SEC. 506. CREDIT CARD BANK INVESTMENTS FOR THE PUBLIC WELFARE.

  Section 2(c)(2)(F) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841(c)(2)(F)) is amended--
          (1) in clause (i), by striking ``engages only in credit card 
        operations;'' and inserting ``engages only in--
                                  ``(I) credit card operations; and
                                  ``(II) making investments designed 
                                primarily to promote the public 
                                welfare, including the welfare of low- 
                                and moderate-income communities or 
                                families (such as by providing housing, 
                                services, or jobs), in the manner and 
                                to the extent permitted for national 
                                banks under the paragraph designated 
                                the `Eleventh' of section 5136 of the 
                                Revised Statutes of the United States 
                                and regulations prescribed under such 
                                paragraph, except that the last 
                                sentence of such paragraph shall be 
                                applied for purposes of this subclause 
                                by substituting `5 percent' for `15 
                                percent' each place such term appears; 
                                ''; and
          (2) in clause (v), by inserting ``, other than making or 
        purchasing loans for the purposes described in and to the 
        extent permitted in clause (i)(II))'' before the period at the 
        end.

                  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'';
          (2) by striking ``to be unnecessary'' and inserting ``are 
        unnecessary and not relevant to any pending or reasonably 
        probable future litigation''; and
          (3) by adding at the end the following new clause:
                          ``(ii) Old records.--In the case of records 
                        of an insured depository institution which--
                                  ``(I) are at least 10 years old, as 
                                of the date the Corporation is 
                                appointed as the receiver of such 
                                depository institution; and
                                  ``(II) are unnecessary and not 
                                relevant to any pending or reasonably 
                                probable future litigation, as provided 
                                in clause (i),
                        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. STREAMLINING REPORTS OF CONDITION.

  Section 7(a) of the Federal Deposit Insurance Act (12 U.S.C. 1817(a)) 
is amended by adding the following new paragraph:
          ``(11) Streamlining reports of condition.--
                  ``(A) Review of information and schedules.--Before 
                the end of the 1-year period beginning on the date of 
                the enactment of the Financial Services Regulatory 
                Relief Act of 2005 and before the end of each 5-year 
                period thereafter, each Federal banking agency shall, 
                in consultation with the other relevant Federal banking 
                agencies, review the information and schedules that are 
                required to be filed by an insured depository 
                institution in a report of condition required under 
                paragraph (3).
                  ``(B) Reduction or elimination of information found 
                to be unnecessary.--After completing the review 
                required by subparagraph (A), a Federal banking agency, 
                in consultation with the other relevant Federal banking 
                agencies, shall reduce or eliminate any requirement to 
                file information or schedules under paragraph (3) 
                (other than information or schedules that are otherwise 
                required by law) if the agency determines that the 
                continued collection of such information or schedules 
                is no longer necessary or appropriate.''.

SEC. 607. EXPANSION OF ELIGIBILITY FOR 18-MONTH EXAMINATION SCHEDULE 
                    FOR COMMUNITY BANKS.

  Paragraph (4)(A) of section 10(d) of the Federal Deposit Insurance 
Act (12 U.S.C. 1820(d)) is amended by striking ``$250,000,000'' and 
inserting ``$1,000,000,000''.

SEC. 608. SHORT FORM REPORTS OF CONDITION FOR CERTAIN COMMUNITY BANKS.

  (a) In General.--Section 7(a) of the Federal Deposit Insurance Act 
(12 U.S.C. 1817(a)) is amended by inserting after paragraph (11) (as 
added by section 606 of this title) the following new paragraph:
          ``(12) Short form reports of condition for community banks.--
                  ``(A) In general.--With respect to reports of 
                condition required under paragraph (3) for each 
                calendar quarter, an insured depository institution 
                described in subparagraphs (A), (B), (C), and (D) of 
                section 10(d)(4) may submit a short form of any such 
                report of condition in 2 nonsequential quarters of any 
                calendar year.
                  ``(B) Short form defined.--The term `short form', 
                when used in connection with any report of condition 
                required under paragraph (3), means a report of 
                condition in a format established by the appropriate 
                Federal banking agency, after notice and opportunity 
                for comment, that--
                          ``(i) is significantly and materially less 
                        burdensome for the insured depository 
                        institution to prepare than the format of the 
                        report of condition required under paragraph 
                        (3); and
                          ``(ii) provides sufficient material 
                        information for the appropriate Federal banking 
                        agency to assure the maintenance of the safe 
                        and sound condition of the depository 
                        institution and safe and sound practices.''.
  (b) Regulations.--Any regulation required to carry out the amendment 
made by subsection (a) shall be published in final form before the end 
of the 6-month period beginning on the date of the enactment of this 
Act.

SEC. 609. 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 Institutions.--
          (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)--
                          (i) by striking ``is charged in any 
                        information, indictment, or complaint, with the 
                        commission of or participation in'' and 
                        inserting ``is the subject of any information, 
                        indictment, or complaint, involving the 
                        commission of or participation in'';
                          (ii) by striking ``may pose a threat to the 
                        interests of the depository institution's 
                        depositors or may threaten to impair public 
                        confidence in the depository institution,'' and 
                        insert ``posed, poses, or may pose a threat to 
                        the interests of the depositors of, or 
                        threatened, threatens, or may threaten to 
                        impair public confidence in, any relevant 
                        depository institution (as defined in 
                        subparagraph (E)),''; and
                          (iii) by striking ``affairs of the depository 
                        institution'' and inserting ``affairs of any 
                        depository institution'';
                  (B) in subparagraph (B)(i), by striking ``the 
                depository institution'' and inserting ``any depository 
                institution that the subject of the notice is 
                affiliated with at the time the notice is issued'';
                  (C) in subparagraph (C)(i)--
                          (i) by striking ``may pose a threat to the 
                        interests of the depository institution's 
                        depositors or may threaten to impair public 
                        confidence in the depository institution,'' and 
                        insert ``posed, poses, or may pose a threat to 
                        the interests of the depositors of, or 
                        threatened, threatens, or may threaten to 
                        impair public confidence in, and relevant 
                        depository institution (as defined in 
                        subparagraph (E)),''; and
                          (ii) by striking ``affairs of the depository 
                        institution'' and inserting ``affairs of any 
                        depository institution'';
                  (D) in subparagraph (C)(ii), by striking ``affairs of 
                the depository institution'' and inserting ``affairs of 
                any depository institution'';
                  (E) in subparagraph (D)(i), by striking ``the 
                depository institution'' and inserting ``any depository 
                institution that the subject of the order is affiliated 
                with at the time the order is issued''; and
                  (F) by adding at the end the following new 
                subparagraph:
                  ``(E) Relevant depository institution.--For purposes 
                of this subsection, the term `relevant depository 
                institution' means any depository institution of which 
                the party is or was an institution-affiliated party at 
                the time--
                          ``(i) the information, indictment or 
                        complaint described in subparagraph (A) was 
                        issued; or
                          ``(ii) the notice is issued under 
                        subparagraph (A) or the order is issued under 
                        subparagraph (C)(i).''.
          (2) Clerical amendment.--The heading for section 8(g) of the 
        Federal Deposit Insurance Act (12 U.S.C. 1818(g)) is amended to 
        read as follows:
  ``(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)--
                          (i) by striking ``the credit union'' each 
                        place such term appears and inserting ``any 
                        credit union''; and
                          (ii) by striking ``the credit union's'' and 
                        inserting ``any credit union's'';
                  (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. 610. 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 and subject to subparagraph (B), the 
                responsible agency shall, before acting on any 
                application for approval of a merger transaction--
                          ``(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) Concurrent consideration.--The responsible 
                agency shall not be required to make a request under 
                subparagraph (A) before acting on an application for 
                approval of a merger transaction if--
                          ``(i) the agency finds that it must act 
                        immediately in order to prevent the probable 
                        failure of a depository institution involved in 
                        the transaction; or
                          ``(ii) the transaction consists of a merger 
                        between an insured depository institution and 1 
                        or more affiliates of the depository 
                        institution.
                  ``(C) 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.--Section 18(c)(6) of the 
Federal Deposit Insurance Act (12 U.S.C. 1828(c)(6)) is amended--
          (1) in the second sentence by striking ``banks or savings 
        associations involved'' and inserting the following: ``insured 
        depository institutions involved, or if the proposed merger 
        transaction is solely between an insured depository institution 
        and 1 or more of affiliates of the depository institution,'' 
        and
          (2) by striking the penultimate sentence and inserting the 
        following: ``If the agency has advised the Attorney General 
        under paragraph (4)(C)(ii) 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. 611. 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. 612. 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 shall not be compelled to disclose 
        information received from a foreign regulatory or supervisory 
        authority if--
                  ``(A) the Federal banking agency determines that 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. 613. PROHIBITION ON PARTICIPATION BY CONVICTED INDIVIDUAL.

  (a) Extension of Automatic Prohibition.--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 company (other than a foreign bank) that is 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 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.''.
  (b) Enhanced Discretion to Remove Convicted Individuals.--Section 
8(e)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(e)(2)(A)) is amended--
          (1) by striking ``or'' at the end of clause (ii);
          (2) by striking the comma at the end of clause (iii) and 
        inserting ``; or''; and
          (3) by adding at the end the following new clause:
                          ``(iv) an institution-affiliated party of a 
                        subsidiary (other than a bank) of a bank 
                        holding company has been convicted of any 
                        criminal offense involving dishonesty or a 
                        breach of trust, or has agreed to enter into a 
                        pretrial diversion or similar program in 
                        connection with a prosecution for such an 
                        offense,''.

SEC. 614. 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. 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. CHANGES REQUIRED TO SMALL BANK HOLDING COMPANY POLICY 
                    STATEMENT ON ASSESSMENT OF FINANCIAL AND MANAGERIAL 
                    FACTORS.

  (a) Small Bank Holding Company Policy Statement on Assessment of 
Financial and Managerial Factors.--
          (1) In general.--Before the end of the 6-month period 
        beginning on the date of the enactment of this Act, the Board 
        of Governors of the Federal Reserve System shall publish in the 
        Federal Register proposed revisions to the Small Bank Holding 
        Company Policy Statement on Assessment of Financial and 
        Managerial Factors (12 C.F.R. part 225--appendix C) that 
        provide that the policy shall apply to a bank holding company 
        which has pro forma consolidated assets of less than 
        $1,000,000,000 and that--
                  (A) is not engaged in any nonbanking activities 
                involving significant leverage; and
                  (B) does not have a significant amount of outstanding 
                debt that is held by the general public.
          (2) Adjustment of amount.--The Board of Governors of the 
        Federal Reserve System shall annually adjust the dollar amount 
        referred to in paragraph (1) in the Small Bank Holding Company 
        Policy Statement on Assessment of Financial and Managerial 
        Factors by an amount equal to the percentage increase, for the 
        most recent year, in total assets held by all insured 
        depository institutions, as determined by the Board.
  (b) Increase in Debt-to-Equity Ratio of Small Bank Holding Company.--
Before the end of the 6-month period beginning on the date of the 
enactment of this Act, the Board of Governors of the Federal Reserve 
System shall publish in the Federal Register proposed revisions to the 
Small Bank Holding Company Policy Statement on Assessment of Financial 
and Managerial Factors (12 C.F.R. part 225--appendix C) such that the 
debt-to-equity ratio allowable for a small bank holding company in 
order to remain eligible to pay a corporate dividend and to remain 
eligible for expedited processing procedures under Regulation Y of the 
Board of Governors of the Federal Reserve System would increase from 
1:1 to 3:1.

SEC. 617. EXCEPTION TO ANNUAL PRIVACY NOTICE REQUIREMENT UNDER THE 
                    GRAMM-LEACH-BLILEY ACT.

  Section 503 of the Gramm-Leach-Bliley Act (15 U.S.C. 6803) is amended 
by adding the following new subsections:
  ``(c) Exception to Annual Notice Requirement.--A financial 
institution that--
          ``(1) provides nonpublic personal information only in 
        accordance with the provisions of subsection (b)(2) or (e) of 
        section 502 or regulations prescribed under section 504(b);
          ``(2) does not share information with affiliates under 
        section 603(d)(2)(A) of the Fair Credit Reporting Act; and
          ``(3) has not changed its policies and practices with regard 
        to disclosing nonpublic personal information from the policies 
        and practices that were disclosed in the most recent disclosure 
        sent to consumers in accordance with this subsection,
shall not be required to provide an annual disclosure under this 
subsection until such time as the financial institution fails to comply 
with any criteria described in paragraph (1), (2), or (3).
  ``(d) Exception to Notice Requirement.--A financial institution shall 
not be required to provide any disclosure under this section if--
          ``(1) the financial institution is licensed by a State and is 
        subject to existing regulation of consumer confidentiality that 
        prohibits disclosure of nonpublic personal information without 
        knowing and expressed consent of the consumer in the form of 
        laws, rules, or regulation of professional conduct or ethics 
        promulgated either by the court of highest appellate authority 
        or by the principal legislative body or regulatory agency or 
        body of any State of the United States, the District of 
        Columbia, any territory of the United States, Puerto Rico, 
        Guam, American Samoa, the Trust Territory of the Pacific 
        Islands, the Virgin Islands, or the Northern Mariana Islands; 
        or
          ``(2) the financial institution is licensed by a State and 
        becomes subject to future regulation of consumer 
        confidentiality that prohibits disclosure of nonpublic personal 
        information without knowing and expressed consent of the 
        consumer in the form of laws, rules, or regulation of 
        professional conduct or ethics promulgated either by the court 
        of highest appellate authority or by the principal legislative 
        body or regulatory agency or body of any State of the United 
        States, the District of Columbia, any territory of the United 
        States, Puerto Rico, Guam, American Samoa, the Trust Territory 
        of the Pacific Islands, the Virgin Islands, or the Northern 
        Mariana Islands.''.

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

  (a) In General.--Before December 31, 2005, 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) State bank supervisors of home and host states.--
                  ``(A) Home state of bank.--The appropriate State bank 
                supervisor of the home State of an insured State bank 
                has authority to examine and supervise the bank.
                  ``(B) Host state branches.--The State bank supervisor 
                of the home State of an insured State bank and any 
                State bank supervisor of an appropriate host State 
                shall exercise their respective 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.
                  ``(C) Supervisory fees.--Except as expressly provided 
                in a cooperative agreement between the State bank 
                supervisors of the home State and any host State 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.--
                  ``(A) In general.--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--
                          ``(i) 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
                          ``(ii) 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.
                  ``(B) Notice of determination.--
                          ``(i) In general.--The State bank supervisor 
                        of the home State of an insured State bank 
                        should 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.
                          ``(ii) Timing of notice.--The State bank 
                        supervisor of the home State of an insured 
                        State bank should provide notice under clause 
                        (i) 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.--
                  ``(A) In general.--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.
                  ``(B) Rule of construction.--Except for State bank 
                supervisors, no provision of this subsection 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) Host state, home state, out-of-state bank.--The 
                terms `host State', `home State', and `out-of-State 
                bank' have the same meanings as in section 44(g).
                  ``(B) State supervisory fees.--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) Troubled condition.--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) Final determination.--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. 620. NONWAIVER OF PRIVILEGES.

  (a) Insured Depository Institutions.--Section 18 of the Federal 
Deposit Insurance Act (12 U.S.C. 1828) is amended by adding at the end 
the following new subsection:
  ``(x) Privileges not Affected by Disclosure to Banking Agency or 
Supervisor.--
          ``(1) In general.--The submission by any person of any 
        information to any Federal banking agency, State bank 
        supervisor, or foreign banking authority for any purpose in the 
        course of any supervisory or regulatory process of such agency, 
        supervisor, or authority shall not be construed as waiving, 
        destroying, or otherwise affecting any privilege such person 
        may claim with respect to such information under Federal or 
        State law as to any person or entity other than such agency, 
        supervisor, or authority.
          ``(2) Rule of construction.--No provision of paragraph (1) 
        may be construed as implying or establishing that--
                  ``(A) any person waives any privilege applicable to 
                information that is submitted or transferred under any 
                circumstance to which paragraph (1) does not apply; or
                  ``(B) any person would waive any privilege applicable 
                to any information by submitting the information to any 
                Federal banking agency, State bank supervisor, or 
                foreign banking authority, but for this subsection.''.
  (b) Insured Credit Unions.--Section 205 of the Federal Credit Union 
Act (12 U.S.C.1785) is amended by adding at the end the following new 
subsection:
  ``(j) Privileges not Affected by Disclosure to Banking Agency or 
Supervisor.--
          ``(1) In general.--The submission by any person of any 
        information to the Administration, any State credit union 
        supervisor, or foreign banking authority for any purpose in the 
        course of any supervisory or regulatory process of such Board, 
        supervisor, or authority shall not be construed as waiving, 
        destroying, or otherwise affecting any privilege such person 
        may claim with respect to such information under Federal or 
        State law as to any person or entity other than such Board, 
        supervisor, or authority.
          ``(2) Rule of construction.--No provision of paragraph (1) 
        may be construed as implying or establishing that--
                  ``(A) any person waives any privilege applicable to 
                information that is submitted or transferred under any 
                circumstance to which paragraph (1) does not apply; or
                  ``(B) any person would waive any privilege applicable 
                to any information by submitting the information to the 
                Administration, any State credit union supervisor, or 
                foreign banking authority, but for this subsection.''.

SEC. 621. RIGHT TO FINANCIAL PRIVACY ACT OF 1978 AMENDMENT.

  Paragraph (1) of section 1101 of the Right to Financial Privacy Act 
of 1978 (12 U.S.C. 3401) is amended by inserting ``(including any 
lender who advances funds on pledges of personal property)'' after 
``consumer finance institution''.

SEC. 622. DEPUTY DIRECTOR; SUCCESSION AUTHORITY FOR DIRECTOR OF THE 
                    OFFICE OF THRIFT SUPERVISION.

  (a) Establishment of Position of Deputy Director.--Section 3(c)(5) of 
the Home Owners' Loan Act (12 U.S.C. 1462a(c)(5)) is amended to read as 
follows:
          ``(5) Deputy director.--
                  ``(A) In general.--The Secretary of the Treasury 
                shall appoint a Deputy Director and may appoint up to 3 
                additional Deputy Directors.
                  ``(B) First deputy director.--If the Secretary of the 
                Treasury appoints more than 1 Deputy Director of the 
                Office, the Secretary shall designate one such 
                appointee as the First Deputy Director.
                  ``(C) Duties.--Each Deputy Director appointed under 
                this paragraph shall take an oath of office and perform 
                such duties as the Director shall direct.
                  ``(D) Compensation and benefits.--The Director shall 
                fix the compensation and benefits for each Deputy 
                Director in accordance with this Act.''.
  (b) Service of Deputy Director as Acting Director.--Section 3(c)(3) 
of the Home Owners' Loan Act (12 U.S.C. 1462a(c)(3)) is amended--
          (1) by striking ``Vacancy.--A vacancy in the position of 
        Director'' and inserting ``Vacancy.--
                  ``(A) In general.--A vacancy in the position of 
                Director''; and
          (2) by adding at the end the following new subparagraphs:
                  ``(B) Acting director.--
                          ``(i) In general.--In the event of a vacancy 
                        in the position of Director or during the 
                        absence or disability of the Director, the 
                        Deputy Director shall serve as Acting Director.
                          ``(ii) Succession in case of 2 or more deputy 
                        directors.--If there are 2 or more Deputy 
                        Directors serving at the time a vacancy in the 
                        position of Director occurs or the absence or 
                        disability of the Director commences, the First 
                        Deputy Director shall serve as Acting Director 
                        under clause (i) followed by such other Deputy 
                        Directors under any order of succession the 
                        Director may establish.
                          ``(iii) Authority of acting director.--Any 
                        Deputy Director, while serving as Acting 
                        Director under this subparagraph, shall be 
                        vested with all authority, duties, and 
                        privileges of the Director under this Act and 
                        any other provision of Federal law.''.

SEC. 623. LIMITATION ON SCOPE OF NEW AGENCY GUIDELINES.

  (a) In General.--The provisions of the multi-agency guidance Numbered 
2003-1 issued by the Comptroller of the Currency, the Board of 
Governors of the Federal Reserve System, the Federal Deposit Insurance 
Corporation, and the Director of the Office of Thrift Supervision that 
relate to minimum credit card payments and negative amortization--
          (1) shall only apply to new credit card accounts established 
        by a creditor for a consumer after the date of the enactment of 
        this Act under an open end consumer credit plan; and
          (2) shall not apply to any outstanding balance on any credit 
        card account under an open end consumer credit plan as of such 
        date of enactment.
  (b) Definitions.--For purposes of this section, the terms ``credit'', 
``credit card'', ``creditor'', ``consumer'' and ``open end credit 
plan'' have the same meanings as in section 103 of the Truth in Lending 
Act.
  (c) Sunset Provision.--This section shall not apply after the end of 
the 3-year period beginning on the date of the enactment of this Act.

             TITLE VII--``BSA'' COMPLIANCE BURDEN REDUCTION

SEC. 701. EXCEPTION FROM CURRENCY TRANSACTION REPORTS FOR SEASONED 
                    CUSTOMERS.

  (a) Findings.--The Congress finds as follows:
          (1) The completion of and filing of currency transaction 
        reports under section 5313 of title 31, United States Code, 
        poses a compliance burden on the financial industry.
          (2) Due to the nature of the transactions or the persons and 
        entities conducting such transactions, certain such reports as 
        currently filed do not appear to be relevant to the detection, 
        deterrence, or investigation of financial crimes, including 
        money laundering and the financing of terrorism.
          (3) However, the data contained in such reports can provide 
        valuable context for the analysis of other data derived 
        pursuant to subchapter II of chapter 53 of title 31, United 
        States Code, as well as investigative data, which provides 
        invaluable and indispensable information supporting efforts to 
        combat money laundering and other financial crimes.
          (4) An exemption from the reporting requirements for certain 
        currency transactions that are of little or no value to ongoing 
        efforts of law enforcement agencies, financial regulatory 
        agencies, and the financial services industry to investigate, 
        detect, or deter financial crimes would serve to balance the 
        burden placed on members of the financial services industry 
        with the compelling need to produce and provide meaningful 
        information to policy-makers, financial regulators, law 
        enforcement, and intelligence agencies.
          (5) The Secretary of the Treasury has by regulation, and in 
        accordance with section 5313 of title 31, United States Code, 
        implemented a process by which institutions may seek exemptions 
        from filing certain currency transaction reports based on 
        appropriate circumstances; however, the existing exemption 
        process has not adequately balanced the burden on the financial 
        industry with the Government's need for data to support its 
        efforts in combating financial crime.
          (6) The act of providing notice to the Secretary of the 
        Treasury of designations of exemption provides meaningful 
        information to law enforcement officials on exempt customers 
        and enables law enforcement to obtain account information 
        through appropriate legal process; the act of providing notice 
        of designations of exemption complements other sections of 
        title 31, United States Code, whereby law enforcement can 
        locate financial institutions with relevant records relating to 
        a person of investigative interest, such as information 
        requests made pursuant to regulations implementing section 
        314(a) of the USA PATRIOT Act of 2001.
          (7) A designation of exemption has no effect on requirements 
        for depository institutions to apply the full range of anti-
        money laundering controls as set forth in subchapter II of 
        chapter 53 of title 31, United States Code, including the 
        requirement to apply the customer identification program 
        pursuant to Section 5326 of subchapter II of chapter 53 of 
        title 31, United States Code, and the requirement to identify, 
        monitor, and, if appropriate, report suspicious activity in 
        accordance with section 5318(g) of title 31, United States 
        Code.
          (8) The Federal banking agencies and the Financial Crimes 
        Enforcement Network have recently provided guidance through the 
        Federal Financial Institutions Examination Council Bank Secrecy 
        Act/Anti-Money Laundering Examination Manual on applying 
        appropriate levels of due diligence and identifying suspicious 
        activity by the types of cash-intensive businesses that 
        generally will be subject to exemption.
  (b) Seasoned Customer Exemption.--
          (1) In general.--Section 5313(e) of title 31, United States 
        Code, is amended to read as follows:
  ``(e) Qualified Customer Exemption.--
          ``(1) In general.--The Secretary of the Treasury shall 
        prescribe regulations within 270 days of the enactment of the 
        Financial Services Regulatory Relief Act of 2005 that exempt 
        any depository institution from filing a report pursuant to 
        this section in a transaction for the payment, receipt, or 
        transfer of United States coins or currency (or other monetary 
        instruments the Secretary of the Treasury prescribes) with a 
        qualified customer of the depository institution.
          ``(2) Qualified customer defined.--For purposes of this 
        section, the term `qualified customer', with respect to a 
        depository institution, has such meaning as the Secretary of 
        the Treasury shall prescribe, which shall include any person 
        that--
                  ``(A) is incorporated or organized under the laws of 
                the United States or any State, including a sole 
                proprietorship, or is registered as and eligible to do 
                business within the United States or a State;
                  ``(B) has maintained a deposit account with the 
                depository institution for at least 12 months; and
                  ``(C) has engaged, using such account, in multiple 
                currency transactions that are subject to the reporting 
                requirements of subsection (a).
          ``(3) Regulations.--
                  ``(A) In general.--The Secretary of the Treasury 
                shall prescribe regulations requiring a depository 
                institution to file a 1-time notice of designation of 
                exemption for each qualified customer of the depository 
                institution.
                  ``(B) Form and content of exemption notice.--The 
                Secretary shall by regulation prescribe the form, 
                manner, content, and timing of the qualified customer 
                exemption notice; such notice shall include information 
                sufficient to identify the qualified customer and its 
                accounts.
                  ``(C) Authority of secretary.--
                          ``(i) In general.--The Secretary may suspend, 
                        reject or revoke any qualified customer 
                        exemption notice, in accordance with criteria 
                        prescribed by the Secretary by regulation.
                          ``(ii) Conditions.--The Secretary may 
                        establish conditions, in accordance with 
                        criteria prescribed by regulation, under which 
                        exempt qualified customers of an insured 
                        depository institution that is merged with or 
                        acquired by another insured depository 
                        institution will continue to be treated as 
                        designated exempt qualified customers of the 
                        surviving or acquiring institution.''.
  (c) 3-Year Review and Report.--Before the end of the 3-year period 
beginning on the date of the enactment of this Act, the Secretary of 
the Treasury, in consultation with the Attorney General, the Secretary 
of the Department of Homeland Security, the Federal banking agencies, 
the banking industry, and such other persons as the Secretary deems 
appropriate, shall evaluate the operations and effect of this provision 
and make recommendations to Congress as to any legislative action with 
respect to this provision as the Secretary may determine to be 
appropriate.

SEC. 702. REDUCTION IN INCONSISTENCIES IN MONETARY TRANSACTION 
                    RECORDKEEPING AND REPORTING ENFORCEMENT AND 
                    EXAMINATION REQUIREMENTS.

  (a) Sense of the Congress.--It is the sense of the Congress that 
inconsistencies and redundancies among regulations implementing 
monetary transaction recordkeeping and reporting enforcement programs 
under section 8 of the Federal Deposit Insurance Act, section 206(q) of 
the Federal Credit Union Act, and chapter II of chapter 53 of title 31, 
United States Code by the Secretary of the Treasury and the Federal 
banking agencies--
          (1) increase the difficulty depository institutions have in 
        complying with congressional intent in creating such 
        enforcement programs,
          (2) reduce the transparency and clarity of the regulatory 
        regime;
          (3) increase the potential for conflict among the various 
        regulations in the future; and
          (4) contribute to the perception that various agencies 
        involved in the enforcement of the monetary transaction 
        recordkeeping and reporting requirements apply such 
        requirements inconsistently.
  (b) Agency Coordination of Monetary Transaction Recordkeeping and 
Reporting Requirements.--
          (1) Enforcement programs.--
                  (A) Federal deposit insurance act.--Section 8(s) of 
                the Federal Deposit Insurance Act (12 U.S.C. 1818(s)) 
                is amended by adding at the end the following new 
                paragraph:
          ``(4) Coordination on uniform requirements.--In prescribing 
        regulations under paragraph (1), the Federal banking agencies, 
        acting through the Financial Institutions Examination Council, 
        shall--
                  ``(A) consult with each other, the National Credit 
                Union Administration Board, and the Secretary of the 
                Treasury; and
                  ``(B) take such action as may be necessary to ensure 
                that the requirements for procedures established 
                pursuant to such regulations, and the examination 
                standards for reviewing such procedures, are congruent 
                and reasonably uniform (taking into account differences 
                in the form and function of the institutions subject to 
                such requirements).''.
                  (B) Federal credit union act.--Section 206(q) of the 
                Federal Credit Union Act (12 U.S.C. 1786(q)) is amended 
                by adding at the end the following new paragraph:
          ``(4) Coordination on uniform requirements.--In prescribing 
        regulations under paragraph (1), the Board, acting through the 
        Financial Institutions Examination Council, shall--
                  ``(A) consult with the Federal banking agencies and 
                the Secretary of the Treasury; and
                  ``(B) take such action as may be necessary to ensure 
                that the requirements for procedures established 
                pursuant to such regulations, and the examination 
                standards for reviewing such procedures, are congruent 
                and reasonably uniform (taking into account differences 
                in the form and function of the institutions subject to 
                such requirements).''.
          (2) Examination standards and disputes.--Section 1006 of the 
        Federal Financial Institutions Examination Council Act of 1978 
        (12 U.S.C. 3305) is amended by adding at the end the following 
        new subsection:
  ``(h) Monetary Transaction Recordkeeping and Reporting 
Requirements.--The Council and the Secretary of the Treasury shall 
jointly establish--
          ``(1) uniform standards and principles applicable to the 
        examination of financial institutions to ensure compliance with 
        the requirements of subchapter II of chapter 53, United States 
        Code, sections 8(s) and 21 of the Federal Deposit Insurance 
        Act, and section 206(q) of the Federal Credit Union Act; and
          ``(2) a clear policy statement on appropriate processes for 
        resolving examiner-institution disagreements concerning the 
        application of subchapter II of chapter 53, United States Code, 
        sections 8(s) and 21 of the Federal Deposit Insurance Act, and 
        section 206(q) of the Federal Credit Union Act to financial 
        institutions.''.
          (3) Effective date.--The Federal banking agencies, the 
        National Credit Union Administration Board, the Financial 
        Institutions Examination Council, and the Secretary of the 
        Treasury shall commence the discussions and consultations 
        required under the amendments made by this subsection as soon 
        as practicable after the date of the enactment of this Act.
  (c) Review of and Report on Additional Regulatory or Legislative 
Changes.--
          (1) Review required.--Before the end of the 6-month period 
        beginning on the date of the enactment of this Act, the 
        Secretary of the Treasury shall conduct a review of the 
        potential inconsistencies in, or redundancies among, the 
        regulations pertaining to the application of the requirements 
        of subchapter II of chapter 53, United States Code, sections 
        8(s) and 21 of the Federal Deposit Insurance Act, and section 
        206(q) of the Federal Credit Union Act to financial 
        institutions.
          (2) Report to congress and the financial institutions 
        examination council.--Upon completion of the review under 
        paragraph (1), the Secretary of the Treasury shall promptly 
        submit a report on the findings and conclusions of the 
        Secretary with respect to the review to the Committee on 
        Financial Services of the House of Representatives and the 
        Committee on Banking, Housing, and Urban Affairs of the Senate, 
        together with such recommendations for legislative and 
        administrative actions as the Secretary may determine to be 
        appropriate, and shall transmit a copy of such report to the 
        members of the Financial Institutions Examination Council.
  (d) Reform of Application of Monetary Transaction Recordkeeping and 
Reporting Requirements to Financial Institutions.--Before the end of 
the 9-month period beginning on the date of the submission of the 
report to Congress under subsection (c)(2), the Secretary of the 
Treasury shall prescribe regulations implementing appropriate changes 
to regulations within the jurisdiction of the Secretary to remedy 
redundancies or inconsistencies identified in the review by, and 
included in the recommendations of, the Secretary under subsection (c).

SEC. 703. ADDITIONAL REFORMS RELATING TO MONETARY TRANSACTION AND 
                    RECORDKEEPING REQUIREMENTS APPLICABLE TO FINANCIAL 
                    INSTITUTIONS.

  (a) Notification of Officers and Directors of Financial 
Institutions.--Before the end of the 6-month period beginning on the 
date of the enactment of this Act, the Secretary of the Treasury 
shall--
          (1) review any regulation, guideline, or guidance of the 
        Secretary, any Federal banking agency, or the National Credit 
        Union Administration Board that serves as the basis for any 
        requirement to provide notice to any officer or director of a 
        depository institution of any suspicious activity report 
        submitted by the depository institution to the Secretary and 
        any such agency or Board;
          (2) modify or eliminate any such requirement of the Secretary 
        that the Secretary determines is not necessary to achieve the 
        purposes of section 5318(g) of title 31, United States Code; 
        and
          (3) make a recommendation to any Federal banking agency or 
        the National Credit Union Administration Board to modify or 
        eliminate any such requirement of such agency or Board that the 
        Secretary determines is not necessary to achieve the purposes 
        of section 5318(g) of title 31, United States Code.
  (b) Elimination of Unnecessary Verification Requirements Applicable 
to the Purchase of Financial Instruments.--Before the end of the 9-
month period beginning on the date of the enactment of this Act, the 
Secretary of the Treasury shall--
          (1) review all verification of customer identity requirements 
        as they relate to the purchases of monetary instruments by 
        customers of depository institutions, including the regulations 
        codified in section 103.29(a)(ii) of title 31, Code of Federal 
        Regulations; and
          (2) modify or eliminate any customer identity requirement 
        related to the purchases of monetary instruments by customers 
        of depository institutions codified in section 103.29(a)(ii) of 
        title 31, Code of Federal Regulations, that the Secretary 
        determines is unnecessary.
  (c) Elimination of Recurring Filings of Suspicious Activity Reports 
on a Single Transaction.--Before the end of the 9-month period 
beginning on the date of the enactment of this Act, the Secretary of 
the Treasury, as appropriate, shall prescribe regulations, or issue 
other forms of guidance, that eliminate the need for depository 
institutions to file recurring suspicious activity reports on the same 
transaction unless there has been a subsequent change in any pattern of 
activity involving any person who was connected with the transaction.
  (d) Electronic Acknowledgement of Certain Electronic Filings.--Before 
the end of the 1-year period beginning on the date of the enactment of 
this Act, the Director of the Financial Crimes Enforcement Network 
shall put into effect a system for promptly furnishing an electronic 
acknowledgement of receipt to any institution that files a form with 
FinCEN under subchapter II of chapter 53 of title 31, United States 
Code, through the Network's electronic filing system.

SEC. 704. STUDY BY COMPTROLLER GENERAL.

  (a) Study Required.--The Comptroller General of the United States 
shall conduct a study on methods and practices which would--
          (1) reduce the overall number of currency transaction reports 
        filed with the Secretary of the Treasury under section 5313(a) 
        of title 31, United States Code, while ensuring that the needs 
        of the Secretary, the Financial Crimes Enforcement Network, law 
        enforcement agencies, and financial institution regulatory 
        agencies continue to be met;
          (2) improve financial institution utilization of the current 
        exemption provisions; and
          (3) mitigate the difficulties in the current implementation 
        of such exemption provisions that limit the utility of the 
        exemption process for financial institutions.
  (b) Report.--Before the end of the 6-month period beginning on the 
date of the enactment of this Act, the Comptroller General shall submit 
a report to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and Urban 
Affairs of the Senate on the findings and conclusions of the 
Comptroller General with respect to the study conducted under 
subsection (a) and such recommendations for legislative and 
administrative action as the Comptroller General may determine to be 
appropriate.

SEC. 705. FEASIBILITY STUDY REQUIRED.

  (a) In General.--For the purpose of simplifying, and increasing 
compliance with, the various recordkeeping and reporting requirements 
under subchapter II of chapter 53 of title 31, United States Code, 
chapter 2 of title I of Public Law 91--508, and section 21 of the 
Federal Deposit Insurance Act, and regulations prescribed under such 
provisions of law, the Secretary of the Treasury (hereafter in this 
section referred to as the ``Secretary'') shall conduct a study on the 
feasibility of developing and implementing interfaces and templates for 
use in electronic communications between financial institutions (as 
defined in section 5312 of title 31, United States Code) and the 
Secretary, the Financial Crimes Enforcement Network, and other Federal 
financial institution regulatory agencies.
  (b) Factors to Be Considered.--In conducting the study required under 
subsection (a), the Secretary shall take into account--
          (1) any procedures required to be maintained by financial 
        institutions under regulations prescribed pursuant to section 
        5318(a)(2) of title 31 of the United States Code and the manner 
        in which the use of interfaces and templates which might be 
        developed could lessen the burden of complying with such 
        procedures; and
          (2) any exemptions prescribed by the Secretary under 
        paragraph (5) or (6) of such section 5318(a) and the manner in 
        which interfaces and templates which might be developed could 
        be programmed to reflect any such exemption for a financial 
        institution, transaction, or class of transactions.
  (c) Prototype and Report Required.--
          (1) In general.--Before the end of the 1-year period 
        beginning on the date of the enactment of this Act, the 
        Secretary shall submit a report to the Congress containing a 
        detailed description of the findings and conclusions of the 
        Secretary in connection with the study required under 
        subsection (a), together with such recommendations for 
        legislative or administrative action as the Secretary may 
        determine to be appropriate.
          (2) Prototype.--Any recommendation on the feasibility of 
        developing and implementing interfaces and templates for use in 
        electronic communications shall be accompanied by prototypes of 
        such interfaces and templates that demonstrate such 
        feasibility.
  (d) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Interface.--The term ``interface'' means the point and 
        method of interaction between any 2 or more electronic data 
        storage and communication systems that permits and facilitates 
        active electronic communication between or among the systems, 
        including any procedures, codes, and protocols that enable the 
        systems to interact.
          (2) Template.--The term ``template'' means a preestablished 
        layout model using word processing or other authoring software 
        that ensures that data entered into it will adhere to a 
        consistent format and content scheme when used by all parties 
        engaged in electronic communications among each other.

SEC. 706. ANNUAL REPORT BY SECRETARY OF THE TREASURY.

  (a) Findings.--The Congress finds as follows:
          (1) Financial institutions have too little information about 
        money laundering and terrorist financing compliance in other 
        markets.
          (2) The current Financial Action Task Force designation 
        system does not adequately represent the progress countries are 
        making in combatting money laundering.
          (3) Lack of information about the compliance of countries 
        with anti-money laundering standards exposes United States 
        financial markets to excessive risk.
          (4) Failure to designate countries that fail to make progress 
        in combatting terrorist financing and money laundering 
        eliminates incentives for internal reform.
          (5) The Secretary of the Treasury has an affirmative duty to 
        provide to financial institutions and examiners the best 
        possible information on compliance with anti-money laundering 
        and terrorist financing initiatives in other markets.
  (b) Report.--Not later than March 1 of each year, the Secretary of 
the Treasury shall submit to the Congress a report that identifies the 
applicable standards of each country against money laundering and 
states whether that country is a country of primary money laundering 
concern under section 5318A of title 31, United States Code. The report 
shall include--
          (1) information on the effectiveness of each country in 
        meeting its standards against money laundering;
          (2) a determination of whether that the efforts of that 
        country to combat money laundering and terrorist financing are 
        adequate, improving, or inadequate; and
          (3) the efforts made by the Secretary to provide to the 
        government of each such country of concern technical assistance 
        to cease the activities that were the basis for the 
        determination that the country was of primary money laundering 
        concern.
  (c) Dissemination of Information in Report.--The Secretary of the 
Treasury shall make available to the Federal Financial Institutions 
Examination Council for incorporation into the examination process, in 
consultation with Federal banking agencies, and to financial 
institutions the information contained in the report submitted under 
subsection (a). Such information shall be made available to financial 
institutions without cost.
  (d) Definition.--For purposes of this section, the term ``financial 
institution'' has the meaning given that term in section 5312(a)(2) of 
title 31, United States Code.

SEC. 707. PRESERVATION OF MONEY SERVICES BUSINESSES.

  (a) Findings.--The Congress finds as follows:
          (1) Title III of the USA PATRIOT ACT provided United States 
        law enforcement agencies with new tools to combat terrorist 
        financing and money laundering.
          (2) The Financial Crimes Enforcement Network in the 
        Department of the Treasury (hereafter in this section referred 
        to as ``FinCEN'' ) has defined money services businesses to 
        include the following 5 distinct types of financial services 
        providers as well as the United States Postal Service:
                  (A) Currency dealers or exchanges.
                  (B) Check cashing services.
                  (C) Issuers of travelers' checks, money orders, or 
                stored value cards.
                  (D) Sellers or redeemers of travelers' checks, money 
                orders, or stored value cards.
                  (E) Money transmitters.
          (3) Money services businesses have had more difficulty in 
        obtaining and maintaining banking services since the passage of 
        the USA PATRIOT ACT.
          (4) On March 30, 2005, FinCEN and the Federal banking 
        agencies (as defined in section 3 of the Federal Deposit 
        Insurance Act) issued a joint statement recognizing the 
        importance of ensuring that money services businesses that 
        comply with the law have reasonable access to banking services.
          (5) On April 26, 2005, FinCEN offered guidance to money 
        service businesses on obtaining and maintaining banking 
        services by identifying and explaining to money services 
        businesses the types of information and documentation they are 
        expected to have, and to provide to, depository institutions 
        when conducting banking business.
          (6) At the same time, FinCEN and the Federal banking agencies 
        have issued joint guidance to depository institutions to--
                  (A) clarify the requirements of subchapter II of 
                chapter 53 of title 31, United States Code, and related 
                provisions of law; and
                  (B) set forth the minimum steps that depository 
                institutions should take when providing banking 
                services to money services businesses.
          (7) It is in the interest of the United States and its allies 
        in the wars against terrorism and drugs to make certain that 
        the international transfer of funds is done in a rules-based, 
        formal, and transparent manner and that individuals are not 
        forced into utilizing informal underground methods due to a 
        lack of services.
  (b) Sense of the Congress.--It is the sense of the Congress that 
depository institutions and money services businesses should follow the 
guidance offered by FinCEN for the purpose of giving money services 
businesses full access to banking services and ensuring that money 
services businesses remain in the mainstream financial system and can 
be full players in providing important financial services to their 
customers and be fully cooperative in the fight against terrorist 
financing and money laundering.

             TITLE VIII--CLERICAL AND TECHNICAL AMENDMENTS

SEC. 801. 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. 802. 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 ``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 the heading for subparagraph (A) of section 
        207(d)(3), strike ``to'' and insert ``with''.
          (23) In section 207(f)(3)(A), strike ``category or 
        claimants'' and insert ``category of claimants''.
          (24) In section 209(a)(8), strike the period at the end and 
        insert a semicolon.
          (25) In section 216(n), insert ``any action'' before ``that 
        is required''.
          (26) In section 304(b)(3), strike ``the affairs or such 
        credit union'' and insert ``the affairs of such credit union''.
          (27) In section 310, strike ``section 102(e)'' and insert 
        ``section 102(d)''.

SEC. 803. 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. 804. 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)''.

        TITLE IX--FAIR DEBT COLLECTION PRACTICES ACT AMENDMENTS

SEC. 901. EXCEPTION FOR CERTAIN BAD CHECK ENFORCEMENT PROGRAMS.

  (a) In General.--The Fair Debt Collection Practices Act (15 U.S.C. 
1692 et seq.) is amended--
          (1) by redesignating section 818 as section 819; and
          (2) by inserting after section 817 the following new section:

``Sec. 818. Exception for certain bad check enforcement programs 
                    operated by private entities

  ``(a) In General.--If--
          ``(1) a State or district attorney establishes, within the 
        jurisdiction of such State or district attorney and with 
        respect to alleged bad check violations that do not involve a 
        check described in subsection (c), a pretrial diversion program 
        for alleged bad check offenders who agree to participate 
        voluntarily in such program to avoid criminal prosecution and 
        are not described in subsection (b);
          ``(2) a private entity, that is subject to an administrative 
        support services contract with a State or district attorney and 
        operates under the direction, supervision and control of such 
        State or district attorney, operates the pretrial diversion 
        program described in paragraph (1); and
          ``(3) in the course of performing duties delegated to it by a 
        State or district attorney under the contract, the private 
        entity referred to in paragraph (2)--
                  ``(A) complies with the penal laws of the State;
                  ``(B) conforms with the terms of the contract and 
                directives of the State or district attorney;
                  ``(C) does not exercise independent prosecutorial 
                discretion;
                  ``(D) contacts any alleged offender referred to in 
                paragraph (1) for purposes of participating in a 
                program referred to in such paragraph only--
                          ``(i) as a result of any determination by the 
                        State or district attorney that sufficient 
                        evidence of a bad check violation under State 
                        law exists and that contact with the alleged 
                        offender for purposes of participation in the 
                        program is appropriate; or
                          ``(ii) as otherwise permitted in response to 
                        evidence of a bad check;
                  ``(E) includes as part of an initial written 
                communication with an alleged offender a clear and 
                conspicuous statement that--
                          ``(i) the alleged offender may dispute the 
                        validity of any alleged bad check violation 
                        through a procedure established and supervised 
                        by the State or district attorney, together 
                        with an explanation of how such a dispute may 
                        be initiated; and
                          ``(ii) where the alleged offender knows, or 
                        has reasonable cause to believe, that the 
                        alleged bad check violation is the result of 
                        theft or forgery of the check, identity theft, 
                        or other fraud that is not the result of the 
                        alleged offender's conduct, the alleged 
                        offender may file a crime report with the 
                        appropriate law enforcement agency and have 
                        further contacts or restitution efforts 
                        suspended until the question of the theft or 
                        forgery of the check, identity theft, or other 
                        fraud has been resolved, together with clear 
                        instructions on how to file such crime report; 
                        and
                  ``(F) charges only fees in connection with services 
                under the contract that--
                          ``(i) have been authorized by the contract 
                        with the State or district attorney; and
                          ``(ii) conform with the schedule of 
                        reasonable charges for such services which 
                        shall be established by the National District 
                        Attorney's Association, after consultation with 
                        the Commission and representatives of 
                        interested business and consumer organizations,
the private entity shall be treated as an officer of the State and 
excluded from the definition of debt collector, pursuant to the 
exception provided in section 803(6)(C), with respect to the entity's 
operation of the program described in paragraph (1) under the contract 
described in paragraph (2).
  ``(b) Certain Offenders Excluded.--An alleged bad check offender is 
described in this subsection if a private entity described in 
subsection (a)(2) can determine from available records that such 
offender--
          ``(1) was convicted of a bad check offense in the 3 years 
        prior to issuing the bad check under consideration; or
          ``(2) participated in a pretrial diversion program in the 18 
        months prior to issuing the bad check under consideration.
  ``(c) Certain Checks Excluded.--A check is described in this 
subsection if the check involves, or is subsequently found to involve--
          ``(1) a postdated check presented in connection with a payday 
        loan, or other similar transaction, where the holder of the 
        check knew that the issuer had insufficient funds at the time 
        the check was made, drawn or delivered;
          ``(2) a stop payment order where the issuer acted in good 
        faith and with reasonable cause in stopping payment on the 
        check;
          ``(3) a check dishonored because of an adjustment to the 
        issuer's account by the financial institution holding such 
        account without providing notice to the person at the time the 
        check was made, drawn or delivered;
          ``(4) a check for partial payment of a debt where the holder 
        had previously accepted partial payment for such debt;
          ``(5) a check issued by a person who was not competent, or 
        was not of legal age, to enter into a legal contractual 
        obligation at the time the check was made, drawn or delivered; 
        or
          ``(6) a check issued to pay an obligation arising from a 
        transaction that was illegal in the jurisdiction of the State 
        or district attorney at the time the check was made, drawn or 
        delivered.
  ``(d) Definitions.--For purposes of this section, the following 
definitions shall apply:
          ``(1) State or district attorney.--The term `State or 
        district attorney' means the chief elected or appointed 
        prosecuting attorney in a district, county (as defined in 
        section 2 of title 1, United States Code), municipality, or 
        comparable jurisdiction, including State attorneys general who 
        act as chief elected or appointed prosecuting attorneys in a 
        district, county (as so defined), municipality or comparable 
        jurisdiction, who may be referred to by a variety of titles 
        such as district attorneys, prosecuting attorneys, 
        commonwealth's attorneys, solicitors, county attorneys, and 
        state's attorneys, and who are responsible for the prosecution 
        of State crimes and violations of jurisdiction-specific local 
        ordinances.
          ``(2) Check.--The term `check' has the same meaning as in 
        section 3(6) of the Check Clearing for the 21st Century Act.
          ``(3) Bad check.--The term `bad check' means any check that--
                  ``(A) the issuer knew, or should have known, would 
                not be paid upon presentment because the issuer--
                          ``(i) had no account with the drawee 
                        financial institution at the time the check was 
                        made, drawn, or delivered;
                          ``(ii) had closed the account upon with the 
                        check was made or drawn prior to the time the 
                        check was made, drawn, or delivered; or
                          ``(iii) used a false or altered check, or 
                        false or altered check account number; or
                  ``(B) was refused payment by the financial 
                institution or other drawee for lack of sufficient 
                funds and the issuer failed to pay the full amount of 
                the check, together with reasonable costs as permitted 
                by State law--
                          ``(i) after receiving written notice from the 
                        holder of the check that payment was refused by 
                        the drawee financial institution to the extent 
                        that the timing and mode of delivery of such 
                        written notice is in compliance with the 
                        applicable State law for determining criminal 
                        liability for bad check offenses; or
                          ``(ii) in a case in which there are no 
                        applicable State law requirements as described 
                        in clause (i), within 30 days of receiving 
                        written notice, mailed to the issuer by 
                        certified mail to the address printed on the 
                        check, or given at the time the check was made, 
                        drawn or delivered or, otherwise, at the 
                        address where the alleged offender resides or 
                        is found, from the holder of the check that 
                        payment of 1 or more checks was refused by the 
                        drawee financial institution.''.
  (b) Clerical Amendment.--The table of sections for the Fair Debt 
Collection Practices Act is amended--
          (1) by redesignating the item relating to section 818 as 
        section 819; and
          (2) by inserting after the item relating to section 817 the 
        following new item:

``818. Exception for certain bad check enforcement programs operated by 
private entities.''.

SEC. 902. OTHER AMENDMENTS.

  (a) Legal Pleadings.--Section 809 of the Fair Debt Collection 
Practices Act (15 U.S.C. 1692g) is amended by adding at the end the 
following new subsection:
  ``(d) Legal Pleadings.--A communication in the form of a formal 
pleading in a civil action shall not be treated as an initial 
communication for purposes of subsection (a).''.
  (b) Notice Provisions.--Section 809 of the Fair Debt Collection 
Practices Act (15 U.S.C. 1692g) is amended by adding after subsection 
(d) (as added by subsection (a) of this section) the following new 
subsection:
  ``(e) Notice Provisions.--The sending or delivery of any form or 
notice which does not request the payment of a debt and is expressly 
required by any other Federal or State law or regulation, including the 
Internal Revenue Code of 1986, title V of Gramm-Leach-Bliley Act, and 
any data security breach notice and privacy law shall not be treated as 
a communication in connection with debt collection. ''.
  (c) Establishment of Right to Collect Within the First 30 Days.--
Section 809(b) of the Fair Debt Collection Practices Act (15 U.S.C. 
1692g(b)) is amended by striking ``If the consumer'' and inserting 
``Collection activities and communications may continue during any 30-
day period referred to in subsection (a). However, if the consumer''.

                          Purpose and Summary

    H.R. 3505, the ``Financial Services Regulatory Relief Act 
of 2005,'' is intended to alter or eliminate statutory banking 
provisions in order to lessen the growing regulatory burden on 
insured depository institutions, as well as make needed 
technical corrections to current law. H.R. 3505 contains a 
broad range of constructive provisions that, taken as a whole, 
will allow banks, thrifts, and credit unions to devote more 
resources to the business of providing financial services and 
less to compliance with outdated and unneeded regulations. 
While effective regulation of the financial services industry 
is central to the preservation of public trust, this 
legislation will benefit consumers and the economy by lowering 
costs and improving productivity.

                  Background and Need for Legislation

    In 2001, Chairman Oxley requested that Federal and State 
financial regulators, along with financial industry groups, 
recommend legislative items that would provide regulatory 
relief for insured depository institutions. The purpose was to 
lessen the regulatory burden, so banks, thrifts, and credit 
unions could better serve their customers and communities. 
Subsequently, it was also intended to be a counterbalance to 
the significant compliance responsibilities placed on 
depository institutions by the USA PATRIOT Act as well as other 
government efforts to counter terrorist financing.
    In 2004, John M. Reich, at the time Vice Chairman of the 
Federal Deposit Insurance Corporation (FDIC) and head of an 
interagency task force on reducing regulatory burden, stated 
that while ``there are no definitive studies of the total cost 
of regulation, . . . a survey of the evidence by a Federal 
Reserve Board economist in 1998 found that total regulatory 
costs account for 12 to 13 percent of banks' noninterest 
expense, or about $36 billion in 2003.'' Reich also noted that 
in the 15 years since the enactment of the Financial 
Institutions Reform, Recovery and Enforcement Act (FIRREA), the 
Federal banking and thrift regulatory agencies had promulgated 
a total of 801 final rules, often requiring ``computers to be 
reprogrammed, staff retrained, manuals updated and new forms 
produced.''
    While regulatory burden affects all of the financial 
services industry, it falls particularly hard on smaller 
institutions. In a notice published in the Federal Register, 
the Federal banking agencies acknowledged both the 
disproportionate regulatory burden faced by small institutions 
in relation to their larger counterparts, and the limitations 
of a ``one-size-fits-all'' approach that subjects small 
institutions to the same regulatory requirements in every 
instance that are imposed upon much larger institutions:

          When a new regulation is created or an old regulation 
        is changed, small institutions must devote a large 
        percentage of their staffs' time to review the 
        regulation to determine if and how it will affect them. 
        Compliance with a regulation also can take large 
        amounts of time that cannot be devoted to serving 
        customers or business planning. In a large institution, 
        ensuring regulatory compliance can take many more 
        hours; however, those hours make up a much smaller 
        percentage of the institution's resources. In 
        situations where a regulation is aimed at an activity 
        engaged in primarily by large institutions, the 
        compliance burden on small institutions can outweigh 
        its benefit.\1\
---------------------------------------------------------------------------
    \1\ 68 Fed. Reg. 35589, 35591 (June 16, 2003).
---------------------------------------------------------------------------
    The Committee ultimately approved a comprehensive 
regulatory relief bill (H.R. 1375) that passed the House during 
the 108th Congress by a vote of 392-25; however, the Senate 
took no action in that Congress.
    On July 28, 2005, Mr. Hensarling and Mr. Moore introduced 
H.R. 3505, a bill which includes virtually all of H.R. 1375, 
plus over 20 new provisions and a new title addressing Bank 
Secrecy Act issues. Previously, other Members introduced 
legislation to give regulatory relief to specific sectors of 
the financial services industry. On May 3, 2005, Mr. Ryun 
introduced H.R. 2061, the ``Community Banks Serving Their 
Communities First Act,'' containing regulatory and tax relief 
proposals targeted at small community banks. On May 12, 2005, 
Mr. Royce and Mr. Kanjorski introduced H.R. 2317, the ``Credit 
Union Regulatory Improvements Act'' (CURIA), which would modify 
credit union capital requirements and make other changes to 
credit union powers, governance, and regulatory oversight.
    For banks, H.R. 3505 includes these provisions: (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 includes these 
provisions: (1) removes lending limits on small business and 
auto loans and increases the limit on other business loans; (2) 
gives 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) 
increases the aggregate limit on commercial real estate loans 
by federal thrifts from 400 to 500 percent of capital; and (5) 
gives thrifts the same authority as national banks to make 
investments primarily designed to promote community 
development.
    For credit unions, the bill includes these provisions: (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 to 3 percent of capital and surplus; (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) increases from $250 million to $1 billion the asset 
size of well-capitalized, well-managed banks eligible for an 
18-month exam schedule and allows banks with less than $1 
billion in assets to file short-form call reports; (3) 
authorizes the agencies to share confidential supervisory 
information concerning an examined institution; (4) modernizes 
agency recordkeeping requirements to allow use of optically 
imaged or computer scanned images; and (5) clarifies that 
agencies may suspend or prohibit institution-affiliated parties 
charged with certain crimes from participation in the affairs 
of any depository institution and not only the institution with 
which the individual is or was associated.
    In addition, H.R. 3505 addresses financial institutions' 
concerns that some of the work they are being asked to do in 
the fight against financial crimes--money laundering and the 
financing of terror--is unnecessary and in some cases 
duplicative. Title VII seeks to make a number of changes, some 
statutory and others directing swift regulatory changes, to 
balance law enforcement's needs with the industry's very real 
concerns about excessive burdens.
    A major focus is reducing the number of ``currency 
transaction reports'' (CTRs) that institutions must file on 
transactions involving more than $10,000 in cash. While a 
process currently exists under which institutions may be 
exempted from filing CTRs on legitimate business with large 
cash-based operations--a Wal-Mart or a Target store, for 
example--the process by which an exemption is granted is 
considered by many to be difficult to use and requires annual 
renewals of the exemption. Section 701 of the bill directs a 
swift rewrite of the regulations governing the exemptions to 
make them easier to navigate so that institutions may be freed 
from filing unnecessary CTRs on ``seasoned customers,'' and 
directs the Secretary to prescribe regulations under which the 
filing institution may retain the exemptionif the institution 
is acquired or merged. The statutory annual renewal requirement is 
eliminated.
    The bill contains provisions to ease or eliminate 
inconsistent or duplicative requirements to file Suspicious 
Activity Reports (SARs), which complement Section 705 that 
directs the Secretary to devise computer-based methods of 
filing required reports electronically; particularly in the 
case of CTRs, virtually all of the hands-on filing burden of 
these non-subjective reports could be eliminated when 
Treasury's Financial Crimes Enforcement Network (FinCEN) adopts 
such measures.
    Title VII also eliminates inconsistencies in the 
supervision of institutions' compliance with filing CTRs and 
SARs; directs the Government Accountability Office to undertake 
a further study of ways to reduce the burden of filing CTRs; 
directs the Treasury Secretary to file annual reports with 
Congress detailing the anti-money laundering efforts of each 
country, specifying those that are of primary money-laundering 
concern and detailing those technical efforts that Treasury has 
taken to help countries leave the list of primary money-
laundering concerns; and expresses the sense of Congress that 
financial institutions and money-service businesses (MSBs) 
should follow guidance issued Spring, 2005, by FinCEN and the 
Federal banking agencies aimed at keeping MSBs within the 
mainstream of the financial-services industry.

                                Hearings

    The Subcommittee on Financial Institutions and Consumer 
Credit held a hearing on H.R. 3505 on September 22, 2005. The 
following witnesses testified: Mr. William J. Fox, Director, 
Financial Crimes Enforcement Network; the Honorable Mark W. 
Olson, Governor, Board of Governors of the Federal Reserve 
System; 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; Mr. John E. Bowman, Chief Counsel, 
Office of Thrift Supervision; Mr. Robert M. Fenner, General 
Counsel, National Credit Union Administration; Mr. Randall S. 
James, Commissioner, Texas Department of Banking, on behalf of 
Conference of State Bank Supervisors; and Mr. George Latham, 
Deputy Commissioner, Credit Unions, Bureau of Financial 
Institutions, Virginia State Corporation Commission, on behalf 
of National Association of State Credit Union Supervisors.
    The Subcommittee on Financial Institutions and Consumer 
Credit held another hearing on H.R. 3505 on October 18, 2005. 
The following witnesses testified: Mr. Bradley W. Beal, 
President and Chief Executive Officer, Nevada Federal Credit 
Union, representing National Association of Federal Credit 
Unions; Mr. Bradley E. Rock, Chairman, President, and Chief 
Executive Officer, Bank of Smithtown, New York, representing 
American Bankers Association; Ms. Norma Alexander Hart, 
President, National Bankers Association; Mr. Phillip R. Buell, 
President and Chief Executive Officer, Superior Federal Credit 
Union, Lima, Ohio, representing Credit Union National 
Association; and Mr. David Hayes, Chairman, Independent 
Community Bankers of America.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
November 16, 2005, and ordered H.R. 3505, the Financial 
Services Regulatory Relief Act of 2005, favorably reported to 
the House as amended by a record vote of 67 yeas and 0 nays.

                            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 
taken with in conjunction with the consideration of this 
legislation. A motion by Mr. Oxley to report the bill, as 
amended, to the House with a favorable recommendation was 
agreed to by a record vote of 67 yeas and 0 nays (Record vote 
No. FC-9). The names of Members voting for and against follow:

                                              Record Vote No. FC-9
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Oxley......................        X   ........  .........  Mr. Frank (MA)...        X   ........  .........
Mr. Leach......................        X   ........  .........  Mr. Kanjorski....        X   ........  .........
Mr. Baker......................        X   ........  .........  Mr. Waters.......        X   ........  .........
Ms. Pryce (OH).................        X   ........  .........  Mr. Sanders \1\..        X   ........  .........
Mr. Bachus.....................        X   ........  .........  Mrs. Maloney.....        X   ........  .........
Mr. Castle.....................        X   ........  .........  Mr. Gutierrez....        X   ........  .........
Mr. King (NY)..................        X   ........  .........  Mr. Velazquez....        X   ........  .........
Mr. Royce......................        X   ........  .........  Mr. Watt.........        X   ........  .........
Mr. Lucas......................        X   ........  .........  Mr. Ackerman.....        X   ........  .........
Mr. Ney........................        X   ........  .........  Ms. Hooley.......        X   ........  .........
Mrs. Kelly.....................        X   ........  .........  Ms. Carson.......        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. Moore (KS)...        X   ........  .........
Mr. Manzullo...................        X   ........  .........  Mr. Capuano......        X   ........  .........
Mr. Jones (NC).................        X   ........  .........  Mr. Ford.........        X   ........  .........
Mrs. Biggert...................        X   ........  .........  Mr. Hinojosa.....        X   ........  .........
Mr. Shays......................        X   ........  .........  Mr. Crowley......        X   ........  .........
Mr. Fossella...................        X   ........  .........  Mr. Clay.........        X   ........  .........
Mr. Gary G. Miller (CA)........        X   ........  .........  Mr. Israel.......        X   ........  .........
Mr. Tiberi.....................        X   ........  .........  Mrs. McCarthy....        X   ........  .........
Mr. Kennedy (MN)...............        X   ........  .........  Mr. Baca.........        X   ........  .........
Mr. Feeney.....................        X   ........  .........  Mr. Matheson.....        X   ........  .........
Mr. Hensarling.................        X   ........  .........  Mr. Lynch........        X   ........  .........
Mr. Garrett (NJ)...............        X   ........  .........  Mr. Miller (NC)..        X   ........  .........
Ms. Brown-Waite (FL)...........        X   ........  .........  Mr. Scott (GA)...        X   ........  .........
Mr. Barrett (SC)...............        X   ........  .........  Mr. Davis (AL)...        X   ........  .........
Ms. Harris.....................        X   ........  .........  Mr. Al Green (TX)        X   ........  .........
Mr. Renzi......................        X   ........  .........  Mr. Cleaver......        X   ........  .........
Mr. Gerlach....................        X   ........  .........  Ms. Bean.........        X   ........  .........
Mr. Pearce.....................  ........  ........  .........  Ms. Wasserman            X   ........  .........
                                                                 Schultz.
Mr. Neugebauer.................        X   ........  .........  Ms. Moore (WI)...        X   ........  .........
Mr. Price (GA).................        X   ........  .........  .................  ........  ........  .........
Mr. Fitzpatrick (PA)...........        X   ........  .........  .................  ........  ........  .........
Mr. Davis (KY).................        X   ........  .........  .................  ........  ........  .........
Mr. McHenry....................        X   ........  .........  .................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------
\1\ Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

    The Committee also considered the following amendments:
          An amendment by Mr. Oxley, No. 1, making technical 
        and substantive changes, was AGREED TO by a voice vote.
          An amendment by Mr. Leach, No. 2, dealing with 
        industrial loan corporations, was WITHDRAWN.
          An amendment by Mr. Renzi, No. 3, providing exception 
        from currency transaction reports for seasoned 
        customers, was AGREED TO by a voice vote.
          An amendment by Mr. Kanjorski, No. 4, striking 
        Section 301 which would authorize privately insured 
        credit unions to become members of a Federal home loan 
        bank, was AGREED TO by a voice vote, and then 
        reconsidered by voice vote and was NOT AGREED TO by a 
        voice vote.
          An amendment by Mr. Meeks of New York, No. 5, dealing 
        with minority financial institutions, was AGREED TO by 
        a voice vote.
          An amendment by Mrs. Kelly, No. 6, requiring an 
        annual report by the Secretary of the Treasury, was 
        AGREED TO by a voice vote.
          An amendment by Mr. Sanders, No. 7, limiting the 
        scope of new agency guidelines, was AGREED TO by a 
        voice vote.
          An amendment by Mr. Meeks of New York, No. 8, 
        regarding the preservation of money services 
        businesses, was AGREED TO by a voice vote.
          An amendment by Mr. Kennedy of Minnesota, No. 9, 
        requiring exceptions to notice requirements of 
        financial institutions, was AGREED TO by a voice vote.
          An amendment by Mr. Price of Georgia, No. 10, dealing 
        with credit monitoring services not treated as credit 
        repair, was WITHDRAWN.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held hearings and 
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 new 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.

                        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, December 8, 2005.
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. 3505, the 
Financial Services Regulatory Relief Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kathleen 
Gramp (for federal costs), Pam Greene (for revenues), Sarah 
Puro (for the state and local impact), and Judith Ruud (for the 
private-sector impact).
            Sincerely,
                                           Donald B. Marron
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 3505--Financial Services Regulatory Relief Act of 2005

    Summary: H.R. 3505 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. It also 
would give financial regulatory agencies more flexibility in 
sharing data, retaining records, and scheduling examinations. 
Finally, the bill would direct the Secretary of the Treasury to 
develop various reports, regulations, and programs related to 
currency transactions.
    CBO estimates that enacting this bill would reduce federal 
revenues by $42 million over the next five years and by a total 
of $120 million over the 2006-2015 period. In addition, we 
estimate that direct spending would increase by $2 million over 
the next five years and by a total of $7 million over the 2006-
2015 period. Provisions affecting programs funded by annual 
appropriations would cost another $4 million, CBO estimates, 
assuming appropriation of the necessary amounts.
    H.R. 3505 contains intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA), but CBO estimates that 
the cost of complying with the requirements would be small and 
would not exceed the threshold established in UMRA ($62 million 
in 2005, adjusted annually for inflation).
    H.R. 3505 contains several private-sector mandates as 
defined in UMRA. Those mandates would affect some depository 
institutions controlled by commercial firms, certain depository 
institutions and institution-affiliated parties, nondepository 
institutions that control depository institutions, uninsured 
banks, bank holding companies and their subsidiaries, and 
savings and loan association holding companies and their 
subsidiaries. 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 
complying with the private-sector mandates in the bill would 
not exceed the annual threshold established by UMRA ($123 
million in 2005, adjusted annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 3505 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--
                                    ----------------------------------------------------------------------------
                                      2006   2007   2008   2009    2010    2011    2012    2013    2014    2015
----------------------------------------------------------------------------------------------------------------
                                               CHANGES IN REVENUES

Estimated Revenues: \1\
    S Corporation Status...........     -3     -6     -9     -10     -12     -10     -11     -12     -14     -15
    Business Organization                *      *      *      -1      -1      -2      -2      -3      -4      -5
     Flexibility...................
                                    ----------------------------------------------------------------------------
        Total......................     -3     -6     -9     -11     -13     -12     -13     -15     -18     -20

                                           CHANGES IN DIRECT SPENDING

Estimated Budget Authority.........      *      *      *       1       1       1       1       1       1       1
Estimated Outlays..................      *      *      *       1       1       1       1       1       1       1

                                       CHANGES IN SUBJECT TO APPROPRIATION

Estimated Authorization Level......      4      0      0       0       0       0       0       0       0       0
Estimated Outlays..................      *      4      0       0       0       0       0       0       0       0

----------------------------------------------------------------------------------------------------------------
\1\ Negative revenues indicate a reduction in revenue collections.
Note.--*= Revenue loss or spending cost of 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; and 
section 302, which would allow certain federal credit unions to 
lease federal land at no charge; and title VII, which would 
direct the Secretary of the Treasury to complete various 
studies, programs, and regulatory proceedings. For this 
estimate, CBO assumes that H.R. 3505 will be enacted near the 
start of calendar year 2006.
    HR. 3505 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 budgets of the Department of 
the Treasury, Securities and Exchange Commission (SEC), and 
Federal Trade Commission (FTC) would be subject to 
appropriation.

Revenues

    CBO estimates that enacting H.R. 3505 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 100-
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 $40 million over the next five years and 
by $102 million over the 2006-2015 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 2006 and 2008 and that national banks would 
convert earlier than state-chartered banks.
    Business Organization Flexibility. Under section 109 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 IRS 
currently taxes state-chartered bank-LLCs as C corporations. 
LLCs provide 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 views that it is quite possible that 
the OCC would alter its regulations to allow national banks to 
organize in noncorporate form. CBO expects that, over the next 
decade, most states that do not currently allow banks to 
organize as LLCs will begin allowing them to do so out of 
competitiveness concerns. CBO also expects that the IRS is 
likely to reconsider allowing pass-through tax treatment to 
banks organized as LLCs and may allow such tax treatment at 
some point in the next decade. CBO believes that banks forming 
as LLCs would most likely be newly chartered institutions. 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 
revenues by a total of $2 million over the next five years and 
by $18 million over the 2006-2015 period.
    Civil and Criminal Penalties. H.R. 3505 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. 3505 would increase direct 
spending by a total of about $7 million over the 2006-2015 
period by reducing offsetting receipts collected from credit 
unions that lease federal facilities. Enacting the bill also 
could affect the cost of deposit insurance, but CBO has no 
basis for estimating the amount of any change.
    Credit Union 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 2010.
    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, that 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 decrease in costs would be offset by 
adjustments in the insurance premiums paid by banks, thrifts, 
or credit unions.

Spending subject to appropriation

    H.R. 3505 also would affect spending for activities funded 
by annual appropriations. CBO estimates implementing those 
provisions would cost about $4 million over the 2006-2010 
period, assuming appropriation of the necessary amounts.
    Title VII would direct the Secretary of the Treasury to 
develop and implement various measures related to the reporting 
of currency transactions. Based on information from the 
Treasury, CBO estimates that it would cost about $4 million to 
complete the regulations, reports, and programs required by the 
bill, assuming appropriation of the necessary amounts.
    In addition, 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.
    Finally, 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. 3505 contains intergovernmental mandates as defined in the 
Unfunded Mandates Reform Act because it would preempt certain 
state laws and place new requirements on certain state agencies 
that regulate financial institutions. CBO estimates that the 
cost of complying with the requirements would be small and 
would not exceed the threshold established in UMRA ($62 million 
in 2005, adjusted annually for inflation).
    Provisions in section 209 would preempt certain state 
securities laws by prohibiting states from requiring agents who 
represent 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.
    Other provisions of the bill would place requirements on 
state regulators of credit unions to review documents related 
to federal deposit insurance and to provide certain information 
to the NCUA. Also, section 401 would extend certain preemptions 
of state laws related to mergers between insured depository 
institutions chartered in different states and preempt state 
laws that regulate certain fiduciary activities performed by 
insured banks and other depository institutions. Section 619 
provides that only certain bank supervisors may impose 
supervisory fees on the bank. Based on information from 
industry authorities and state entities, CBO estimates that 
these provisions would impose minimal costs, if any, on state, 
local, and tribal governments.
    Estimated impact on the private sector: H.R. 3505 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 established in UMRA ($123 million in 2005, 
adjusted annually for inflation).
    Mandates in the bill include a prohibition of interstate 
branching by certain depository institutions controlled by 
commercial firms, an expansion of the authority of federal 
banking agencies over insured depository institutions and 
institution-affiliated parties with respect to safety and 
soundness enforcement, and restrictions on participation in the 
affairs of financial institutions of people convicted of 
certain crimes or the subject of certain criminal proceedings.

Prohibition of interstate branching by subsidiaries commercial firms

    The bill would prohibit interstate branching by industrial 
loan companies or industrial banks or certain other depository 
institutions that are controlled by firms that derive 15 
percent or more of their revenues from nonfinancial activities. 
The prohibition would not apply to such institutions that 
became insured depository institutions before October 1, 2003.
    This mandate only applies to a handful of institutions, 
none of which currently operates any branches. While the 
mandate does take away their option to open branches in other 
states, according to government and industry sources, the 
affected institutions had no immediate plans to use the option 
to branch. Consequently, CBO estimates that there would be 
little or no direct cost to comply with this mandate.

Enhanced safety and soundness enforcement

    The bill would expand some of the authorities of federal 
banking agencies with respect to troubled or failing 
institutions, and institution-affiliated parties. Based on 
information from the FDIC, the cost to the private sector of 
these expanded authorities would be small.
    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). The bill would amend current law to 
give the FDIC certain authorities concerning troubled or 
failing depository institutions held by those new forms of 
holding companies.
    Cross-Guarantee Authority. 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.
    Golden Parachute Authority and Nonbank Holding Companies. 
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. 
Institution-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.

Restrictions 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 regulator.
    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.
    Estimate prepared by: Federal Spending: Kathleen Gramp. 
Federal Revenues: Pam Greene. Impact on State, Local and Tribal 
Governments: Sarah Puro. Impact on the Private Sector: Judith 
Ruud.
    Estimate approved by: Peter H. Fontaine, Deputy 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 
general welfare of the United States) and clause 3 (relating to 
the power to regulate 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 2005,'' 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. 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 108. 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 109. 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 110. 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.

Section 111. 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 112. Enhancing the authority for national banks to make 
        community development investments

    Under current law, national banks are authorized to make 
investments designed primarily to promote the public welfare, 
including the welfare of low- and moderate-income communities 
or families, either directly or by purchasing interests in an 
entity primarily engaged in such investments. Aggregate 
investments are limited to 5 percent of a national bank's 
unimpaired capital and surplus, unless the Comptroller of the 
Currency determines that a higher amount will pose no 
significant risk to the deposit insurance fund and the bank is 
adequately capitalized. However, in no case may OCC permit a 
bank's aggregate investments to exceed 10 percent of unimpaired 
capital and surplus. This section increases the maximum limit 
from 10 to 15 percent.

                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 exempts Federal savings associations from the 
investment adviser and broker-dealer registration requirements 
to the same extent that banks are exempt under the Investment 
Advisers Act of 1940 and the Securities and Exchange Act of 
1934.

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

    This section amends the Home Owners' Loan Act (HOLA) to 
give 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 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 15 percent of 
its capital and surplus, consistent with Section 112. 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. 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 (CD) products, from registering as securities law 
agents under state law. Safeguards are provided, so that agents 
may not accept deposits ormake 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 to 20 percent of 
assets.

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

    This section treats Federal savings associations for 
purposes of Federal court diversity jurisdiction as being a 
citizen of two states: the state in which the thrift has its 
home office and the state in which it has its principal place 
of business.

Section 214. Increase in limits on commercial real estate loans

    This section increases the aggregate limit on commercial 
real estate loans by Federal savings associations from 400 to 
500 percent of the thrift's capital.

Section 215. Repeal of one limit on loans to one borrower

    Under their current loans-to-one-borrower authority, 
savings associations may lend the lesser of $30 million or 30 
percent of unimpaired capital and surplus for residential 
development. This section eliminates a provision that imposes a 
$500,000 per-unit cap on the purchase price of residential 
units financed under this authority.

Section 216. Savings association credit card banks

    Under current law, a savings and loan holding company 
cannot own a credit card savings association and still be 
exempt from the activity restrictions imposed on companies that 
control multiple thrifts. However, a savings and loan holding 
company could charter a credit card institution as a national 
or state bank and still be exempt from the activity 
restrictions imposed on multiple savings and loan holding 
companies. This section amends the Home Owner's Loan Act to 
permit a savings and loan holding company to charter a credit 
card savings association and still maintain its exempt status. 
It also clarifies that a savings association credit card bank 
continues to be subject to the Qualified Thrift Lender (QTL) 
test under HOLA.

Section 217. Interstate acquisitions by S&L holding companies

    This section amends the Home Owner's Loan Act to permit a 
multiple savings association to acquire associations in other 
states under the same rules that apply to bank holding 
companies under the Riegle-Neal Interstate Banking and 
Branching Efficiency Act of 1994.

Section 218. Business organization flexibility for federal savings 
        associations

    Section 109 allows national banks to choose among different 
forms of business organizations, as permitted by the 
Comptroller of the Currency. Such organizations include a 
limited liability company, whereby the institution may be able 
to take advantage of the pass-through tax treatment for LLCs 
under certain tax laws and eliminate double taxation. This 
section provides federal thrift institutions the same business 
organization flexibility.

                   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 (NCUA).

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 currently 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 amend the Federal Credit Union Act to allow loan 
maturities up to 15 years, or longer terms as permitted by the 
National Credit Union Administration 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

    This section amends the Federal Credit Union Act to allow 
Federal credit unions to sell negotiable checks, money orders, 
and other similar transfer instruments, including international 
and domestic electronic fund transfers, to anyone eligible for 
membership, regardless of their membership status. Under 
current law, a credit union is only authorized to provide such 
services to those who are already members.

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 of directors 
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 
exemptions, similar to those provided banks, from the broker-
dealer and investment adviser registration requirements of the 
Securities and Exchange Act of 1934 and the Investment Advisers 
Act of 1940.

Section 314. Clarification of definition of net worth under certain 
        circumstances for purposes of prompt corrective action

    This section amends the Federal Credit Union Act's prompt 
corrective action requirements by redefining a credit union's 
net worth as the retained earnings balance of the credit union 
(as determined under generally accepted accounting principles, 
as under current law), together with any amounts that were 
previously retained earnings of any other credit union with 
which the credit union has merged.

Section 315. Amendments relating to nonfederally insured credit unions

    This section amends Section 43 of the Federal Deposit 
Insurance Act (FDIA), which contains mandatory disclosures and 
other requirements for depository institutions lacking federal 
deposit insurance (primarily state-chartered credit unions). 
The amendments update the section's disclosure provisions, 
repeal certain provisions as inappropriate and unnecessary, 
ensure that state supervisors of the institutions and private 
insurers can enforce the section, and ensure effective Federal 
Trade Commission (FTC) enforcement.
    Section 43 of the FDIA was added in 1991 by the Federal 
Deposit Insurance Corporation Improvement Act (FDICIA). It was 
further refined in 1994 to allow alternative notifications to 
customers via the mail. From 1993 to 2003, federal 
appropriations acts barred the FTC from expending funds to 
enforce this section. In FY 2004, the spending restriction was 
lifted, allowing the FTC to enforce this provision of law.
    Subsection (a) allows state supervisors of private 
insurers, and appropriate state supervisors of depository 
institutions that receive privately insured deposits in their 
states, to examine and enforce compliance with Section 43's 
requirements for private insurer audits.
    Subsection (b) strikes the term ``or similar instrument 
evidencing a deposit'' and inserts ``or share certificate,'' 
clarifying that disclosures are not required on deposit slips.
    Subsection (c) makes minor exemptions to the requirement 
that ``all advertising'' must conspicuously display that the 
institution is not federally insured. Such exemptions include 
(i) statements or reports of financial condition required by 
state or federal regulation, (ii) signs, documents or logos 
that do not include any information about the institution's 
products or services, and (iii) small utilitarian items that do 
not mention deposit products or insurance if inclusion of the 
notice would be impractical.
    Subsection (d) updates the time frame and improves the 
disclosure requirements for depositors at privately insured 
institutions. First, the subsection requires that that new 
depositors, obtained other than through a conversion or merger, 
must sign an acknowledgement card that the institution is not 
federally insured, and that if the institution fails, the 
federal government does not guarantee that the depositor will 
get back the depositor's money. Second, the subsection requires 
this acknowledgement for new depositors obtained through a 
conversion or merger. Those depositors must sign the 
acknowledgement or receive a letter within 45 days of the 
conversion seeking to obtain the acknowledgement. NCUA 
regulations governing the conversion and merger process provide 
for extensive disclosure to depositors before the conversion or 
merger. Finally, customers who are currently in a privately 
insured institution must receive a new mailing seeking an 
acknowledgement card.
    Subsection (e) repeals the provision prohibiting non-
federally insured depository institutions other than banks from 
using instruments of interstate commerce (such as mail, 
telephone, or the Internet) to accept deposits unless the 
institution meets all requirements for federal deposit 
insurance. Enforcement of this provision could effectively 
require many privately insured credit unions to cease 
operations, causing disruption and depositor losses, regardless 
of whether the credit union's state regulator deems it 
financially sound.
    Subsection (f) repeals the provision allowing the FTC to 
identify entities that are not depository institutions but 
could reasonably be mistaken for depository institutions, 
thereby subjecting those entities to the requirements of 
Section 43. Any such entities are already likely either to be 
subject to another regulatory scheme, such as federal 
securities law, or to be engaging in significant deception 
subject to enforcement under other laws. In either case, 
Section 43's regulatory approach is unnecessary and may create 
conflicts. This subsection excludes uninsured national banks 
and state member banks from the scope of its coverage.
    Subsection (g) limits FTC enforcement to the disclosure 
requirements of Section 43 (which are particularly within its 
purview), and expressly authorizes examination and enforcement 
of Section 43 by the appropriate state supervisor of an 
institution's chartering state. In particular, state 
supervisors may be able readily to incorporate examinations for 
compliance into their regular examinations, thus providing 
efficient oversight of the 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. Industrial loan 
companies (ILCs) controlled by firms that derive 15 percent or 
more of their consolidated revenues from non-financial 
activities would not be permitted to engage in interstate 
branching, unless the ILC became an insured depository 
institution prior to October 1, 2003.
    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. Such 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 depositoryinstitutions 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. The agreements referenced in this 
section are not contracts and will not be enforced as such.

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/
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.
    This section clarifies that an investor in a bank service 
company must seek Federal Reserve approval to engage in an 
activity that could be authorized only under the Bank Service 
Company Act's Section 4(f)--that is, activities on the Fed's 
Section 4(c)(8) list that are beyond what the depository 
institution can do under its charter. All activities otherwise 
permissible for an investor in a bank service company are 
subject to the jurisdiction of the institution's appropriate 
federal bank regulator, according to the terms of the Bank 
Service Company Act or other applicable federal laws.

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.

Section 410. Community reinvestment credit for ESOPS and EWOCS

    This section amends the Community Reinvestment Act of 1977 
to permit the appropriate Federal financial supervisory agency 
to consider activities that support or enable the establishment 
of employee stock ownership plans or eligible worker-owned 
cooperatives for Community Reinvestment Act credit.

Section 411. Minority financial institutions

    This section requires the Federal Deposit Insurance 
Corporation and the Office of Thrift Supervision to provide 
technical assistance to minority financial institutions 
affected by Hurricanes Katrina, Rita, and Wilma, as appropriate 
to preserve the present number of minority depository 
institutions and preserve the minority character in mergers or 
acquisitions of a minority depository institution, consistent 
with Section 308(a) of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989.

         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.

Section 505. Savings associations acting as agents for affiliated 
        depository institutions

    This section amends the Federal Deposit Insurance Act to 
give Federal savings associations the same authority as banks 
to act as agents for their affiliated depository institutions.

Section 506. Credit card bank investments for the public welfare

    This section permits credit card banks to make an 
investment if the investment primarily benefits low- and 
moderate-income individuals, low- and moderate-income areas, or 
other areas targeted by a governmental entity for 
redevelopment, or if the investment would receive consideration 
as a ``qualified investment'' subject to appropriate 
regulation. Such investments would have to be consistent with 
the safe and sound operations of an institution and cannot 
exceed 5% of an institution's capital and surplus.

                  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

    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 more than ten years old at the time of its 
appointment as receiver, so long as the records are unnecessary 
and not relevant to any pending or reasonably probable future 
litigation, and 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. Streamlining reports of condition

    This section directs the federal banking agencies, within 
one year of date of enactment and every five years thereafter, 
to review the information and schedules that depository 
institutions are required to file in Reports of Condition (call 
reports) and reduce or eliminate any requirement where the 
agencies determine that the collection of such information is 
no longer necessary or appropriate.

Section 607. Expansion of eligibility for 18-month examination schedule 
        for community banks

    This section amends the Federal Deposit Insurance Act to 
increase from $250 million to $1 billion the asset size of 
well-capitalized, well-managed institutions eligible for the 
extended 18-month examination schedule.

Section 608. Short form reports of condition for certain community 
        banks

    This section authorizes well-capitalized, well-managed 
insured depository institutions with less than $1 billion in 
assets to file ``short form'' call reports in any two non-
sequential quarters of a calendar year. The federal banking 
agencies are directed to develop a short form report of 
condition that is significantly and materially less burdensome 
for insured depository institutions to prepare than the long 
form call report, while also providing sufficient material 
information for the agencies to assure the continued safety and 
soundness of institutions.

Section 609. 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 who are the subject 
of criminal proceedings 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 610. Streamlining depository institution merger application 
        requirements

    This section streamlines merger application requirements by 
eliminating the requirement that each federal banking agency 
must request a competitive factors report from the other three 
federal bankingagencies 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. Federal banking agencies are not required to request a 
competitive factors report if they find that they must act on a merger 
application immediately to prevent the probable failure of a depository 
institution involved in the transaction, or the transaction consists of 
a merger between an insured depository institution and one or more of 
its affiliates.

Section 611. 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 612. 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 613. 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 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. Foreign banks and 
nonbank subsidiaries of a bank holding company are excluded.

Section 614. 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 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. Changes required to small bank holding company policy 
        statement assessment of financial and managerial factors

    This section directs the Federal Reserve Board to publish 
proposed revisions to the Small Bank Holding Company Policy 
Statement on Assessment of Financial and Managerial Factors 
that provide that: (1) the policy shall apply to a bank holding 
company with pro forma consolidated assets of less than $1 
billion that meets specified criteria; and (2) the debt-to-
equity ratio allowable for a small bank holding company to 
remain eligible to pay a corporate dividend and for expedited 
processing procedures under the Board's regulation Y would 
increase from 1:1 to 3:1.

Section 617. Exception to annual privacy notice requirement under the 
        Gramm-Leach-Bliley Act

    This section amends title V of the Gramm-Leach-Bliley Act 
to exempt financial institutions from providing the annual 
privacy notice required by that title if the institution 
discloses nonpublic personal information to third parties only 
in accordance with the exceptions specified in Gramm-Leach-
Bliley, does not share certain consumer report information with 
affiliates under the Fair Credit Reporting Act, and has not 
changed its policies and practices with regard to disclosing 
nonpublic personal information since sending its last privacy 
notice to consumers. It further exempts professionals currently 
categorized by the Federal Reserve Board as financial 
institutions, such as certified public accountants, if they are 
subject to state laws that prohibit them from disclosing 
nonpublic information.

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

    Before December 31, 2005 and the end of each two-year 
period thereafter, each of the federal banking agencies will 
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 sectiondoes not 
limit in any way the authority of federal banking regulators and does 
not affect state taxation authority.

Section 620. Non-waiver of privileges

    This section provides that when a depository institution 
submits information to a Federal, State, or foreign regulator 
as part of the supervisory or regulatory process, the 
institution does not waive any privilege it may claim with 
respect to that information as to any person or entity other 
than the regulator to which the information was disclosed.

Section 621. Right to Financial Privacy Act of 1978 amendment

    This section amends the Right to Financial Privacy Act to 
include in the definition of a ``financial institution'' for 
purposes of that Act ``any lender who advances funds on pledges 
of personal property.''

Section 622. Succession authority for Director of the Office of Thrift 
        Supervision

    During a vacancy, Office of Thrift Supervision succession 
currently occurs through the process of the Vacancies Act, 
which limits the time period an acting director may serve. OTS 
is the only federal financial regulator that could be exposed 
to a vacancy problem. This section is based on long-standing 
authority for the Office of the Comptroller of the Currency and 
gives a designated deputy director authority to perform the 
functions of the director during a planned or sudden vacancy in 
the office of the director.

Section 623. Limitation on scope of new agency guidelines

    This section requires that regulatory guidance, issued by 
the Comptroller of the Currency, Federal Reserve Board, Federal 
Deposit Insurance Corporation, and Office of Thrift 
Supervision, related to minimum credit card payments and 
negative amortization only applies to new credit card accounts, 
not to existing balances, based on the date of enactment and to 
sunset in three years.

             Title VII--``BSA'' Compliance Burden Reduction


Section 701. Exception from currency transaction reports for seasoned 
        customers

    This section states a series of congressional findings 
recognizing that while currency transaction reports (CTRs) 
filed by financial institutions provide law enforcement with 
useful analytical and investigative data regarding money 
laundering and other financial crimes, filing them imposes a 
compliance burden on those same institutions. The findings also 
recognize that the current system for exempting financial 
institutions from filing CTRs on transactions that have minimal 
value to law enforcement ``has not adequately balanced the 
burden on the financial industry with the government's need for 
data to support its efforts in combating financial crime.''
    The section strikes the current statutory requirement that 
financial institutions renew existing CTR exemptions for 
``qualified business customers'' on an annual basis, and 
instead directs the Treasury Secretary to prescribe, within 
nine months, regulations that allow the exemption of an 
institution from the filing of CTRs on transactions with 
``qualified customers'' of the institution. Such customers are 
defined as those that are incorporated under Federal or State 
law or registered to do business within the U.S., have 
maintained an account at the institution for at least a year 
and have engaged, through that account, in ``multiple'' 
currency transactions that are subject to CTR reporting 
requirements. Regulations are to be promulgated that ensure the 
application for the exemption contains adequate identifying 
information and clear conditions under which the exemption 
could be rejected or revoked by the Secretary. Further, the 
regulations are to allow for the continuation of an existing 
filing exemption in the case of a merger or acquisition of the 
institution that has received the filing exemption.
    Finally, within three years the Secretary, in consultation 
with the Attorney General, the Secretary of Homeland Security, 
the Federal banking agencies, the banking industry and such 
others as the Secretary chooses, is directed to study the 
operation and effects of this section and report the findings 
of this review to Congress along with any recommendations for 
further legislative action.

Section 702. Reduction in inconsistencies in monetary transaction 
        recordkeeping and reporting and examination requirements

    This section expresses the sense of Congress that 
inconsistencies in record-keeping and reporting requirements 
for monetary transactions reduce the usefulness of the reports 
and contribute to the impression that there are inconsistencies 
in the federal banking agencies' supervision of compliance with 
the requirements. Additionally, the section requires the 
federal banking agencies, through the Federal Financial 
Institutions Examination Council (FFIEC), to ensure that BSA 
examination procedures are ``congruent and reasonably uniform'' 
across agencies. The Treasury is directed to review within six 
months and promptly report to Congress and the FFIEC any 
legislative or administrative recommendations to accomplish 
these goals, and promulgate within nine months of the report 
any appropriate regulatory changes within its jurisdiction.

Section 703. Additional reforms relating to monetary transactions and 
        recordkeeping

    This section requires the Secretary of the Treasury to 
review and make any appropriate modification to regulations 
requiring the notification of financial institution directors 
and officers of the filing of each Bank Security Act filing; 
review the current requirement to verify and record the 
identity of the purchaser of monetary instruments over $3,000 
in value and make appropriate changes to reduce redundancy with 
other customer-verification regulations; issue appropriate 
guidance or a regulation eliminating the need to file multiple 
Suspicious Activity Reports (SARs) on the same transaction 
``unless there has been a subsequent change in any pattern of 
activity involving any person who was connected with the 
transaction;'' and requires the Financial Crimes Enforcement 
Network (FinCEN) to create a system providing electronic 
acknowledgement of receipt of a SAR.

Section 704. Study by Comptroller General

    This section requires the Government Accountability Office 
to study and report to Congress on ways to reduce the number of 
currency transaction reports filed with Treasury; improve 
financial institution use of the current CTR exemptions; and 
reduce the difficulties financial institutions have in taking 
advantage of the exemptions.

Section 705. Feasibility study required

    This section requires the Secretary of the Treasury to 
conduct a study on the feasibility of developing and 
implementing improvements to the electronic filing of required 
anti-money laundering forms, to lessen the burdens of complying 
with recordkeeping and reporting requirements, and requires the 
Secretary to produce prototypes of any software or other 
computer interface that would assist in that effort.

Section 706. Annual report by Secretary of the Treasury

    This section requires the Treasury Secretary to report to 
Congress annually, by March 1, on the anti-money laundering 
standards of each country, stating whether or not each country 
is a primary money laundering concern, as per Section 5318A of 
Title 31, United States Code. The report is to include 
information on the effectiveness of each country's anti-money 
laundering efforts in meeting its standards; a determination of 
whether such efforts are or are not adequate, or if they are 
improving; and an indication of any efforts made by the 
Secretary to provide technical assistance to the government of 
each country of concern. The report is to be made available to 
Federal banking regulators, for incorporation into 
examinations, and to financial institutions at no cost.

Section 707. Preservation of money services businesses

    This section expresses the sense of Congress that 
depository institutions and money-service businesses (MSBs) 
should follow guidance issued in the spring of 2005 by FinCEN 
and the Federal banking regulators that was intended to help 
keep MSBs in the mainstream of the financial-services sector.

             Title VIII--Clerical and Technical Amendments


Section 801. Clerical amendments to the Home Owners' Loan Act

    This section corrects the table of contents for 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 802. Technical corrections to the Federal Credit Union Act

    This section makes technical, clean-up amendments to the 
Federal Credit Union Act.

Section 803. Other technical corrections

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

Section 804. 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.

        Title IX--Fair Debt Collection Practices Act Amendments


Section 901. Exception for certain bad check enforcement programs

    This section extends the current Fair Debt Collection 
Practices Act exemption for debt collection activities by state 
and local agencies to private entities that operate bad check 
pre-trial diversion programs on behalf of, and under the 
supervision of, state and local district attorneys, for the 
purpose of saving law enforcement resources and providing 
offenders with an alternative to criminal prosecution. Eligible 
pre-trial diversion programs would be limited in terms of the 
types of bad check violations that can be included in the 
programs, and must conform with other requirements in the 
amendment relating to allowable fees, consumer notice, and 
providing appropriate procedures to dispute alleged bad check 
offenses.

Section 902. Other amendments

    This section specifies that a communication, in the form of 
a formal pleading in a civil action, shall not be treated as an 
initial communication for purposes of informing a consumer of 
their right to dispute and obtain validation of an alleged 
debt, as required by the Fair Debt Collection Practices Act, 
and that the sending or delivery of any form or notice which 
does not request the payment of a debt, and is expressly 
required by any other federal or state law or regulation, shall 
not be treated as a communication in connection with debt 
collection, and codifies the Federal Trade Commission's formal 
advisory opinion regarding the proper interpretation of the 
FDCPA, by clarifying that collection activities and 
communications by a debt collector may continue during the 30-
day notice period, unless the consumer notifies the debt 
collector that the debt is in dispute.

         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 italic, existing law in which no change is 
proposed is shown in roman):

        TITLE LXII OF THE REVISED STATUTES OF THE UNITED STATES


                            NATIONAL BANKS.


                         C H A P T E R  O N E.

                        ORGANIZATION AND POWERS.

Sec.
5133.  Formation of national banking associations.
     * * * * * * *
[5146.  Requisite qualifications of directors.]
5146.  Requirements for Bank Directors.
     * * * * * * *
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.  * * *
  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.  * * *

           *       *       *       *       *       *       *

          Eleventh. To make investments designed primarily to 
        promote the public welfare, including the welfare of 
        low- and moderate-income communities or families (such 
        as by providing housing, services, or jobs). A national 
        banking association may make such investments directly 
        or by purchasing interests in an entity primarily 
        engaged in making such investments. An association 
        shall not make any such investment if the investment 
        would expose the association to unlimited liability. 
        The Comptroller of the Currency shall limit an 
        association's investments in any 1 project and an 
        association's aggregate investments under this 
        paragraph. An association's aggregate investments under 
        this paragraph shall not exceed an amount equal to the 
        sum of 5 percent of the association's capital stock 
        actually paid in and unimpaired and 5 percent of the 
        association's unimpaired surplus fund, unless the 
        Comptroller determines by order that the higher amount 
        will pose no significant risk to the affected deposit 
        insurance fund, and the association is adequately 
        capitalized. In no case shall an association's 
        aggregate investments under this paragraph exceed an 
        amount equal to the sum of [10 percent] 15 percent of 
        the association's capital stock actually paid in and 
        unimpaired and [10 percent] 15 percent of the 
        association's unimpaired surplus fund.

           *       *       *       *       *       *       *


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. 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.

           *       *       *       *       *       *       *

          (11) Streamlining reports of condition.--
                  (A) Review of information and schedules.--
                Before the end of the 1-year period beginning 
                on the date of the enactment of the Financial 
                Services Regulatory Relief Act of 2005 and 
                before the end of each 5-year period 
                thereafter, each Federal banking agency shall, 
                in consultation with the other relevant Federal 
                banking agencies, review the information and 
                schedules that are required to be filed by an 
                insured depository institution in a report of 
                condition required under paragraph (3).
                  (B) Reduction or elimination of information 
                found to be unnecessary.--After completing the 
                review required by subparagraph (A), a Federal 
                banking agency, in consultation with the other 
                relevant Federal banking agencies, shall reduce 
                or eliminate any requirement to file 
                information or schedules under paragraph (3) 
                (other than information or schedules that are 
                otherwise required by law) if the agency 
                determines that the continued collection of 
                such information or schedules is no longer 
                necessary or appropriate.
          (12) Short form reports of condition for community 
        banks.--
                  (A) In general.--With respect to reports of 
                condition required under paragraph (3) for each 
                calendar quarter, an insured depository 
                institution described in subparagraphs (A), 
                (B), (C), and (D) of section 10(d)(4) may 
                submit a short form of any such report of 
                condition in 2 nonsequential quarters of any 
                calendar year.
                  (B) Short form defined.--The term ``short 
                form'', when used in connection with any report 
                of condition required under paragraph (3), 
                means a report of condition in a format 
                established by the appropriate Federal banking 
                agency, after notice and opportunity for 
                comment, that--
                          (i) is significantly and materially 
                        less burdensome for the insured 
                        depository institution to prepare than 
                        the format of the report of condition 
                        required under paragraph (3); and
                          (ii) provides sufficient material 
                        information for the appropriate Federal 
                        banking agency to assure the 
                        maintenance of the safe and sound 
                        condition of the depository institution 
                        and safe and sound practices.

           *       *       *       *       *       *       *

  (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)  * * *
          (2) Specific violations.--
                  (A) In general.--Whenever the appropriate 
                Federal banking agency determines that--
                          (i)  * * *
                          (ii) an officer or director of an 
                        insured depository institution has 
                        knowledge that an institution-
                        affiliated party of the insured 
                        depository institution has violated any 
                        such provision or any provision of law 
                        referred to in subsection 
                        (g)(1)(A)(ii); [or]
                          (iii) an officer or director of an 
                        insured depository institution has 
                        committed any violation of the 
                        Depository Institution Management 
                        Interlocks Act[,]; or
                          (iv) an institution-affiliated party 
                        of a subsidiary (other than a bank) of 
                        a bank holding company has been 
                        convicted of any criminal offense 
                        involving dishonesty or a breach of 
                        trust, or has agreed to enter into a 
                        pretrial diversion or similar program 
                        in connection with a prosecution for 
                        such an offense,

           *       *       *       *       *       *       *

  (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] is the 
                subject of any information, indictment, or 
                complaint, involving the commission of or 
                participation in--
                          (i) a crime involving dishonesty or 
                        breach of trust which is punishable by 
                        imprisonment for a term exceeding one 
                        year under State or Federal law, or
                          (ii) a criminal violation of section 
                        1956, 1957, or 1960 of title 18, United 
                        States Code, or section 5322 or 5324 of 
                        title 31, United States Code,
                the appropriate Federal banking agency may, if 
                continued service or participation by such 
                party [may pose a threat to the interests of 
                the depository institution's depositors or may 
                threaten to impair public confidence in the 
                depository institution,] posed, poses, or may 
                pose a threat to the interests of the 
                depositors of, or threatened, threatens, or may 
                threaten to impair public confidence in, any 
                relevant depository institution (as defined in 
                subparagraph (E)), 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 institution] 
                affairs of 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] any 
                        depository institution that the subject 
                        of the notice is affiliated with at the 
                        time the notice is issued.

           *       *       *       *       *       *       *

                  (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 
                        institution's depositors or may 
                        threaten to impair public confidence in 
                        the depository institution,] posed, 
                        poses, or may pose a threat to the 
                        interests of the depositors of, or 
                        threatened, threatens, or may threaten 
                        to impair public confidence in, and 
                        relevant depository institution (as 
                        defined in subparagraph (E)), 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 institution] 
                        affairs of 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 institution] affairs 
                        of 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] any 
                        depository institution that the subject 
                        of the order is affiliated with at the 
                        time the order is issued, 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) Relevant depository institution.--For 
                purposes of this subsection, the term 
                ``relevant depository institution'' means any 
                depository institution of which the party is or 
                was an institution-affiliated party at the 
                time--
                          (i) the information, indictment or 
                        complaint described in subparagraph (A) 
                        was issued; or
                          (ii) the notice is issued under 
                        subparagraph (A) or the order is issued 
                        under subparagraph (C)(i).

           *       *       *       *       *       *       *

  (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).

           *       *       *       *       *       *       *

  (s) Compliance With Monetary Transaction Recordkeeping and 
Report Requirements.--
          (1)  * * *

           *       *       *       *       *       *       *

          (4) Coordination on uniform requirements.--In 
        prescribing regulations under paragraph (1), the 
        Federal banking agencies, acting through the Financial 
        Institutions Examination Council, shall--
                  (A) consult with each other, the National 
                Credit Union Administration Board, and the 
                Secretary of the Treasury; and
                  (B) take such action as may be necessary to 
                ensure that the requirements for procedures 
                established pursuant to such regulations, and 
                the examination standards for reviewing such 
                procedures, are congruent and reasonably 
                uniform (taking into account differences in the 
                form and function of the institutions subject 
                to such requirements).

           *       *       *       *       *       *       *

  Sec. 10. (a)  * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (4) 18-month rule for certain small institutions.--
        Paragraphs (1), (2), and (3) shall apply with ``18-
        month'' substituted for ``12-month'' if--
                  (A) the insured depository institution has 
                total assets of less than [$250,000,000] 
                $1,000,000,000;

           *       *       *       *       *       *       *

          (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)] paragraph (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)] paragraph (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) State bank supervisors of home and host states.--
                  (A) Home state of bank.--The appropriate 
                State bank supervisor of the home State of an 
                insured State bank has authority to examine and 
                supervise the bank.
                  (B) Host state branches.--The State bank 
                supervisor of the home State of an insured 
                State bank and any State bank supervisor of an 
                appropriate host State shall exercise their 
                respective 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.
                  (C) Supervisory fees.--Except as expressly 
                provided in a cooperative agreement between the 
                State bank supervisors of the home State and 
                any host State 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.--
                  (A) In general.--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--
                          (i) 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
                          (ii) 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.
                  (B) Notice of determination.--
                          (i) In general.--The State bank 
                        supervisor of the home State of an 
                        insured State bank should 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.
                          (ii) Timing of notice.--The State 
                        bank supervisor of the home State of an 
                        insured State bank should provide 
                        notice under clause (i) 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.--
                  (A) In general.--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.
                  (B) Rule of construction.--Except for State 
                bank supervisors, no provision of this 
                subsection 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) Host state, home state, out-of-state 
                bank.--The terms ``host State'', ``home 
                State'', and ``out-of-State bank'' have the 
                same meanings as in section 44(g).
                  (B) State supervisory fees.--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) Troubled condition.--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) Final determination.--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] are 
                        unnecessary and not relevant to any 
                        pending or reasonably probable future 
                        litigation 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--
                                  (I) are at least 10 years 
                                old, as of the date the 
                                Corporation is appointed as the 
                                receiver of such depository 
                                institution; and
                                  (II) are unnecessary and not 
                                relevant to any pending or 
                                reasonably probable future 
                                litigation, as provided in 
                                clause (i),
                        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. 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 and subject to subparagraph 
                (B), the responsible agency shall, before 
                acting on any application for approval of a 
                merger transaction--
                          (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) Concurrent consideration.--The 
                responsible agency shall not be required to 
                make a request under subparagraph (A) before 
                acting on an application for approval of a 
                merger transaction if--
                          (i) the agency finds that it must act 
                        immediately in order to prevent the 
                        probable failure of a depository 
                        institution involved in the 
                        transaction; or
                          (ii) the transaction consists of a 
                        merger between an insured depository 
                        institution and 1 or more affiliates of 
                        the depository institution.
                  (C) 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] 
insured depository institutions involved, or if the proposed 
merger transaction is solely between an insured depository 
institution and 1 or more of affiliates of the depository 
institution, 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)(C)(ii) 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 calendar days after the date of approval.

           *       *       *       *       *       *       *

  (d)(1)  * * *

           *       *       *       *       *       *       *

          (3) Exclusive authority for additional branches.--
                  (A)  * * *

           *       *       *       *       *       *       *

                  (C) Interstate branching by subsidiaries of 
                commercial firms prohibited.--
                          (i) In general.--If the appropriate 
                        State bank supervisor of the home State 
                        of any industrial loan company, 
                        industrial bank, or other institution 
                        described in section 2(c)(2)(H) of the 
                        Bank Holding Company Act of 1956, or 
                        the appropriate State bank supervisor 
                        of any host State with respect to such 
                        company, bank, or institution, 
                        determines that such company, bank, or 
                        institution is controlled, directly or 
                        indirectly, by a commercial firm, such 
                        company, bank, or institution may not 
                        acquire, establish, or operate a branch 
                        in such host State.
                          (ii) Commercial firm defined.--For 
                        purposes of this subsection, the term 
                        ``commercial firm'' means any entity at 
                        least 15 percent of the annual gross 
                        revenues of which on a consolidated 
                        basis, including all affiliates of the 
                        entity, were derived from engaging, on 
                        an on-going basis, in activities that 
                        are not financial in nature or 
                        incidental to a financial activity 
                        during at least 3 of the prior 4 
                        calendar quarters.
                          (iii) Grandfathered institutions.--
                        Clause (i) shall not apply with respect 
                        to any industrial loan company, 
                        industrial bank, or other institution 
                        described in section 2(c)(2)(H) of the 
                        Bank Holding Company Act of 1956--
                                  (I) which became an insured 
                                depository institution before 
                                October 1, 2003 or pursuant to 
                                an application for deposit 
                                insurance which was approved by 
                                the Corporation before such 
                                date; and
                                  (II) with respect to which 
                                there is no change in control, 
                                directly or indirectly, of the 
                                company, bank, or institution 
                                after September 30, 2003, that 
                                requires an application under 
                                subsection (c), section 7(j), 
                                section 3 of the Bank Holding 
                                Company Act of 1956, or section 
                                10 of the Home Owners' Loan 
                                Act.
                          (iv) Transition provision.--Any 
                        divestiture required under this 
                        subparagraph of a branch in a host 
                        State shall be completed as quickly as 
                        is reasonably possible.
                          (v) Corporate reorganizations 
                        permitted.--The acquisition of direct 
                        or indirect control of the company, 
                        bank, or institution referred to in 
                        clause (iii)(II) shall not be treated 
                        as a ``change in control'' for purposes 
                        of such clause if the company acquiring 
                        control is itself directly or 
                        indirectly controlled by a company that 
                        was an affiliate of such company, bank, 
                        or institution on the date referred to 
                        in clause (iii)(II), and remained an 
                        affiliate at all times after such date.
          (4) [State ``opt-in'' election to permit interstate] 
        Interstate branching through de novo branches.--
                  (A) In general.--[Subject to subparagraph 
                (B)] Subject to subparagraph (B) and paragraph 
                (3)(C), 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.

           *       *       *       *       *       *       *

                  (D) Home state defined.--[The term] For 
                purposes of this subsection, the term ``home 
                State'' means the State by which a State bank 
                is chartered.
                  (E) Host state defined.--[The term] For 
                purposes of this subsection, 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) 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 company] 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).

           *       *       *       *       *       *       *

  (r) Subsidiary Depository Institutions as Agents for Certain 
Affiliates.--
          (1) In general.--Any [bank subsidiary] depository 
        institution subsidiary of a [bank holding company] 
        depository institution holding company may receive 
        deposits, renew time deposits, close loans, service 
        loans, and receive payments on loans and other 
        obligations as an agent for a depository institution 
        affiliate.
          (2) [Bank] Depository institution acting as agent is 
        not a branch.--Notwithstanding any other provision of 
        law, [a bank acting] a depository institution acting as 
        an agent in accordance with paragraph (1) for a 
        depository institution affiliate shall not be 
        considered to be a branch of the affiliate.
          (3) Prohibitions on activities.--A depository 
        institution may not--
                  (A) conduct any activity as an agent under 
                paragraph (1) [or (6)] which such institution 
                is prohibited from conducting as a principal 
                under any applicable Federal or State law; or
                  (B) as a principal, have an agent conduct any 
                activity under paragraph (1) [or (6)] which the 
                institution is prohibited from conducting under 
                any applicable Federal or State law.

           *       *       *       *       *       *       *

          (5) Agency relationship required to be consistent 
        with safe and sound banking practices.--An agency 
        relationship between depository institutions under 
        paragraph (1) [or (6)] shall be on terms that are 
        consistent with safe and sound banking practices and 
        all applicable regulations of any appropriate Federal 
        banking agency.
          [(6) Affiliated insured savings associations.--An 
        insured savings association which was an affiliate of a 
        bank on July 1, 1994, may conduct activities as an 
        agent on behalf of such bank in the same manner as an 
        insured bank affiliate of such bank may act as agent 
        for such bank under this subsection to the extent such 
        activities are conducted only in--
                  [(A) any State in which--
                          [(i) the bank is not prohibited from 
                        operating a branch under any provision 
                        of Federal or State law; and
                          [(ii) the savings association 
                        maintained an office or branch and 
                        conducted business as of July 1, 1994; 
                        or
                  [(B) any State in which--
                          [(i) the bank is not expressly 
                        prohibited from operating a branch 
                        under a State law described in section 
                        44(a)(2); and
                          [(ii) the savings association 
                        maintained a main office and conducted 
                        business as of July 1, 1994.]

           *       *       *       *       *       *       *

  (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)  * * *
                  [(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.

           *       *       *       *       *       *       *

  (x) Privileges not Affected by Disclosure to Banking Agency 
or Supervisor.--
          (1) In general.--The submission by any person of any 
        information to any Federal banking agency, State bank 
        supervisor, or foreign banking authority for any 
        purpose in the course of any supervisory or regulatory 
        process of such agency, supervisor, or authority shall 
        not be construed as waiving, destroying, or otherwise 
        affecting any privilege such person may claim with 
        respect to such information under Federal or State law 
        as to any person or entity other than such agency, 
        supervisor, or authority.
          (2) Rule of construction.--No provision of paragraph 
        (1) may be construed as implying or establishing that--
                  (A) any person waives any privilege 
                applicable to information that is submitted or 
                transferred under any circumstance to which 
                paragraph (1) does not apply; or
                  (B) any person would waive any privilege 
                applicable to any information by submitting the 
                information to any Federal banking agency, 
                State bank supervisor, or foreign banking 
                authority, but for this subsection.

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 company (other than a foreign bank) that is 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 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.
          (3) Enforcement by appropriate state supervisor.--Any 
        appropriate State supervisor of a private deposit 
        insurer, and any appropriate State supervisor of a 
        depository institution which receives deposits that are 
        insured by a private deposit insurer, may examine and 
        enforce compliance with this subsection under the 
        applicable regulatory authority of such supervisor.
  (b) Disclosure Required.--Any depository institution lacking 
Federal deposit insurance shall, within the United States, do 
the following:
          (1) Periodic statements; account records.--Include 
        conspicuously in all periodic statements of account, on 
        each signature card, and on each passbook, certificate 
        of deposit, [or similar instrument evidencing a 
        deposit] or share certificate a notice that the 
        institution is not federally insured, and that if the 
        institution fails, the Federal Government does not 
        guarantee that depositors will get back their money.
          [(2) Advertising; premises.--Include conspicuously in 
        all advertising and at each place where deposits are 
        normally received a notice that the institution is not 
        federally insured.
          [(3) Acknowledgement of disclosure.--
                  [(A) New depositors.--With respect to any 
                depositor who was not a depositor at the 
                depository institution before June 19, 1994, 
                receive any deposit for the account of such 
                depositor only if the depositor has signed a 
                written acknowledgement that--
                          [(i) the institution is not federally 
                        insured; and
                          [(ii) if the institution fails, the 
                        Federal Government does not guarantee 
                        that the depositor will get back the 
                        depositor's money.
                  [(B) Current depositors.--Receive any deposit 
                after the effective date of this paragraph for 
                the account of any depositor who was a 
                depositor before June 19, 1994, only if--
                          [(i) the depositor has signed a 
                        written acknowledgement described in 
                        subparagraph (A); or
                          [(ii) the institution has complied 
                        with the provisions of subparagraph (C) 
                        which are applicable as of the date of 
                        the deposit.
                  [(C) Alternative provision of notice to 
                current depositors.--
                          [(i) In general.--Transmit to each 
                        depositor who was a depositor before 
                        June 19, 1994, and has not signed a 
                        written acknowledgement described in 
                        subparagraph (A)--
                                  [(I) a card containing the 
                                information described in 
                                clauses (i) and (ii) of 
                                subparagraph (A), and a line 
                                for the signature of the 
                                depositor; and
                                  [(II) accompanying materials 
                                requesting the depositor to 
                                sign the card, and return the 
                                signed card to the institution.
                          [(ii) Manner and timing of notice.--
                                  [(I) First notice.--Make the 
                                transmission described in 
                                clause (i) via first class mail 
                                not later than September 12, 
                                1994.
                                  [(II) Second notice.--Make a 
                                second transmission described 
                                in clause (i) via first class 
                                mail not less than 30 days and 
                                not more than 45 days after a 
                                transmission to the depositor 
                                in accordance with subclause 
                                (I), if the institution has 
                                not, by the date of such 
                                mailing, received from the 
                                depositor a card referred to in 
                                clause (i) which has been 
                                signed by the depositor.
                                  [(III) Third notice.--Make a 
                                third transmission described in 
                                clause (i) via first class mail 
                                not less than 30 days and not 
                                more than 45 days after a 
                                transmission to the depositor 
                                in accordance with subclause 
                                (II), if the institution has 
                                not, by the date of such 
                                mailing, received from the 
                                depositor a card referred to in 
                                clause (i) which has been 
                                signed by the depositor.]
          (2) Advertising; premises.--
                  (A) In general.--Include clearly and 
                conspicuously in all advertising, except as 
                provided in subparagraph (B); and at each 
                station or window where deposits are normally 
                received, its principal place of business and 
                all its branches where it accepts deposits or 
                opens accounts (excluding automated teller 
                machines or point of sale terminals), and on 
                its main Internet page, a notice that the 
                institution is not federally insured.
                  (B) Exceptions.--The following need not 
                include a notice that the institution is not 
                federally insured:
                          (i) Statements or reports of 
                        financial condition of the depository 
                        institution that are required to be 
                        published or posted by State or Federal 
                        law or regulation.
                          (ii) Any sign, document, or other 
                        item that contains the name of the 
                        depository institution, its logo, or 
                        its contact information, but only if 
                        the sign, document, or item does not 
                        include any information about the 
                        institution's products or services or 
                        information otherwise promoting the 
                        institution.
                          (iii) Small utilitarian items that do 
                        not mention deposit products or 
                        insurance if inclusion of the notice 
                        would be impractical.
          (3) Acknowledgment of disclosure.--
                  (A) New depositors obtained other than 
                through a conversion or merger.--With respect 
                to any depositor who was not a depositor at the 
                depository institution before the effective 
                date of the Financial Services Relief Act of 
                2005, and who is not a depositor as described 
                in subparagraph (B), receive any deposit for 
                the account of such depositor only if the 
                depositor has signed a written acknowledgement 
                that--
                          (i) the institution is not federally 
                        insured; and
                          (ii) if the institution fails, the 
                        Federal Government does not guarantee 
                        that the depositor will get back the 
                        depositor's money.
                  (B) New depositors obtained through a 
                conversion or merger.--With respect to a 
                depositor at a federally insured depository 
                institution that converts to, or merges into, a 
                depository institution lacking federal 
                insurance after the effective date of the 
                Financial Services Regulatory Relief Act of 
                2005, receive any deposit for the account of 
                such depositor only if--
                          (i) the depositor has signed a 
                        written acknowledgement described in 
                        subparagraph (A); or
                          (ii) the institution makes an 
                        attempt, as described in subparagraph 
                        (D) and sent by mail no later than 45 
                        days after the effective date of the 
                        conversion or merger, to obtain the 
                        acknowledgment.
                  (C) Current depositors.--Receive any deposit 
                after the effective date of the Financial 
                Services Regulatory Relief Act of 2005 for the 
                account of any depositor who was a depositor on 
                that date only if--
                          (i) the depositor has signed a 
                        written acknowledgement described in 
                        subparagraph (A); or
                          (ii) the institution makes an 
                        attempt, as described in subparagraph 
                        (D) and sent by mail no later than 45 
                        days after the effective date of the 
                        Financial Services Regulatory Relief 
                        Act of 2005, to obtain the 
                        acknowledgment.
                  (D) Alternative provision of notice to 
                current depositors and new depositors obtained 
                through a conversion or merger.--
                          (i) In general.--Transmit to each 
                        depositor who has not signed a written 
                        acknowledgement described in 
                        subparagraph (A)--
                                  (I) a conspicuous card 
                                containing the information 
                                described in clauses (i) and 
                                (ii) of subparagraph (A), and a 
                                line for the signature of the 
                                depositor; and
                                  (II) accompanying materials 
                                requesting the depositor to 
                                sign the card, and return the 
                                signed card to the institution.

           *       *       *       *       *       *       *

  [(e) Eligibility for Federal Deposit Insurance.--
          [(1) In general.--Except as permitted by the Federal 
        Trade Commission, in consultation with the Federal 
        Deposit Insurance Corporation, no depository 
        institution (other than a bank, including an 
        unincorporated bank) lacking Federal deposit insurance 
        may use the mails or any instrumentality of interstate 
        commerce to receive or facilitate receiving deposits, 
        unless the appropriate supervisor of the State in which 
        the institution is chartered has determined that the 
        institution meets all eligibility requirements for 
        Federal deposit insurance, including--
                  [(A) in the case of an institution described 
                in section 19(b)(1)(A)(iv) of the Federal 
                Reserve Act, all eligibility requirements set 
                forth in the Federal Credit Union Act and 
                regulations of the National Credit Union 
                Administration; and
                  [(B) in the case of any other institution, 
                all eligibility requirements set forth in this 
                Act and regulations of the Corporation.
          [(2) Authority of fdic and ncua not affected.--No 
        determination under paragraph (1) shall bind, or 
        otherwise affect the authority of, the National Credit 
        Union Administration or the Corporation.]
  [(f)] (e) Definitions.--For purposes of this section:
          (1)  * * *
          [(2) Depository institution.--The term ``depository 
        institution'' includes--
                  [(A) any entity described in section 
                19(b)(1)(A)(iv) of the Federal Reserve Act; and
                  [(B) any entity that, as determined by the 
                Federal Trade Commission--
                          [(i) is engaged in the business of 
                        receiving deposits; and
                          [(ii) could reasonably be mistaken 
                        for a depository institution by the 
                        entity's current or prospective 
                        customers.]
          (2) Depository institution.--The term ``depository 
        institution''--
                  (A) includes any entity described in section 
                19(b)(1)(A)(iv) of the Federal Reserve Act; and
                  (B) does not include any national bank, State 
                member bank, or Federal branch.
  [(g) Enforcement.--Compliance with the requirements of this 
section, and any regulation prescribed or order issued under 
this section, shall be enforced under the Federal Trade 
Commission Act by the Federal Trade Commission.]
  (f) Enforcement.--
          (1) Limited ftc enforcement authority.--Compliance 
        with the requirements of subsections (b) and (c), and 
        any regulation prescribed or order issued under any 
        such subsection, shall be enforced under the Federal 
        Trade Commission Act by the Federal Trade Commission.
          (2) Broad state enforcement authority.--
                  (A) In general.--Subject to subparagraph (C), 
                an appropriate State supervisor of a depository 
                institution lacking Federal deposit insurance 
                may examine and enforce compliance with the 
                requirements of this section, and any 
                regulation prescribed under this section.
                  (B) State powers.--For purposes of bringing 
                any action to enforce compliance with this 
                section, no provision of this section shall be 
                construed as preventing an appropriate State 
                supervisor of a depository institution lacking 
                Federal deposit insurance from exercising any 
                powers conferred on such official by the laws 
                of such State.
                  (C) Limitation on state action while federal 
                action pending.--If the Federal Trade 
                Commission has instituted an enforcement action 
                for a violation of this section, no appropriate 
                State supervisor may, during the pendency of 
                such action, bring an action under this section 
                against any defendant named in the complaint of 
                the Commission for any violation of this 
                section that is alleged in that complaint.

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.
          (5) Applicability to industrial loan companies.--No 
        provision of this section shall be construed as 
        authorizing the approval of any transaction involving a 
        industrial loan company, industrial bank, or other 
        institution described in section 2(c)(2)(H) of the Bank 
        Holding Company Act of 1956, or the acquisition, 
        establishment, or operation of a branch by any such 
        company, bank, or institution, that is not allowed 
        under section 18(d)(3).
  (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)] paragraph (2) 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)(i), 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) be agreed upon in writing by a majority of the 
        board of directors of each association or State bank 
        participating in the plan of merger;
          (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

           *       *       *       *       *       *       *


                     FEDERAL BRANCHES AND AGENCIES

  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 shall not be compelled to 
        disclose information received from a foreign regulatory 
        or supervisory authority if--
                  (A) the Federal banking agency determines 
                that 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) the Comptroller of the Currency, 
                        in the case of a national bank, or a 
                        subsidiary or a department or division 
                        of any such bank;
                          (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) the Comptroller of the Currency, 
                        in the case of a national bank;
                          (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. 3. DIRECTOR OF THE OFFICE OF THRIFT SUPERVISION.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Appointment; Term.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) [Vacancy.--A vacancy in the position of Director]
                  (A) In general.--A vacancy in the position of 
                Director which occurs before the expiration of 
                the term for which a Director was appointed 
                shall be filled in the manner established in 
                paragraph (1) and the Director appointed to 
                fill such vacancy shall be appointed only for 
                the remainder of such term.
                  (B) Acting director.--
                          (i) In general.--In the event of a 
                        vacancy in the position of Director or 
                        during the absence or disability of the 
                        Director, the Deputy Director shall 
                        serve as Acting Director.
                          (ii) Succession in case of 2 or more 
                        deputy directors.--If there are 2 or 
                        more Deputy Directors serving at the 
                        time a vacancy in the position of 
                        Director occurs or the absence or 
                        disability of the Director commences, 
                        the First Deputy Director shall serve 
                        as Acting Director under clause (i) 
                        followed by such other Deputy Directors 
                        under any order of succession the 
                        Director may establish.
                          (iii) Authority of acting director.--
                        Any Deputy Director, while serving as 
                        Acting Director under this 
                        subparagraph, shall be vested with all 
                        authority, duties, and privileges of 
                        the Director under this Act and any 
                        other provision of Federal law.

           *       *       *       *       *       *       *

          [(5) Transitional provision.--Notwithstanding 
        paragraphs (1) and (2), the Chairman of the Federal 
        Home Loan Bank Board on the date of enactment of the 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989, shall be the Director until 
        the date on which that individual's term as Chairman of 
        the Federal Home Loan Bank Board would have expired.]
          (5) Deputy director.--
                  (A) In general.--The Secretary of the 
                Treasury shall appoint a Deputy Director and 
                may appoint up to 3 additional Deputy 
                Directors.
                  (B) First deputy director.--If the Secretary 
                of the Treasury appoints more than 1 Deputy 
                Director of the Office, the Secretary shall 
                designate one such appointee as the First 
                Deputy Director.
                  (C) Duties.--Each Deputy Director appointed 
                under this paragraph shall take an oath of 
                office and perform such duties as the Director 
                shall direct.
                  (D) Compensation and benefits.--The Director 
                shall fix the compensation and benefits for 
                each Deputy Director in accordance with this 
                Act.

           *       *       *       *       *       *       *


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) In General.--In order to provide thrift institutions for 
the deposit of funds and for the extension of credit for homes 
and other goods and services, the Director is authorized, under 
such regulations as the Director may prescribe--
          (1) to provide for the [organization, incorporation,] 
        organization (as a corporation or other form of 
        business organization provided under regulations 
        prescribed by the Director under subsection (x)), 
        examination, operation, and regulation of associations 
        to be known as Federal savings associations (including 
        Federal savings banks), and

           *       *       *       *       *       *       *

  (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].
                  (B) Nonresidential real property loans.--
                          (i) In general.--Loans on the 
                        security of liens upon nonresidential 
                        real property. Except as provided in 
                        clause (ii), the aggregate amount of 
                        such loans shall not exceed [400] 500 
                        percent of the Federal savings 
                        association's capital, as determined 
                        under subsection (t).

           *       *       *       *       *       *       *

          (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 15 
                        percent of the savings association's 
                        capital stock actually paid in and 
                        unimpaired and 15 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.

           *       *       *       *       *       *       *

  (i) Conversions.--
          (1) In general.--Any savings association which is, or 
        is eligible to become, a member of a Federal home loan 
        bank may convert into a Federal savings association 
        (and in so doing may change directly from the mutual 
        form to the stock form, or from the stock form to the 
        mutual form). Such conversion shall be subject to such 
        regulations as the Director shall prescribe. Thereafter 
        such Federal savings association shall be entitled to 
        all the benefits of this section and shall be subject 
        to examination and regulation to the same extent as 
        other associations [incorporated] organized pursuant to 
        this 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] service 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).
  (o) Conversion of State Savings Banks.--(1) Subject to the 
provisions of this subsection and under regulations of the 
Director, the Director may authorize the conversion of a State-
chartered savings bank that is a Bank Insurance Fund member 
into a Federal savings bank, if such conversion is not in 
contravention of State law, and provide for the [organization, 
incorporation,] organization (as a corporation or other form of 
business organization provided under regulations prescribed by 
the Director under subsection (x)), operation, examination, and 
regulation of such institution.

           *       *       *       *       *       *       *

  (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.

           *       *       *       *       *       *       *

  (u) Limits on Loans to One Borrower.--
          (1) * * *
          (2) Special rules.--
                  (A) Notwithstanding paragraph (1), a savings 
                association may make loans to one borrower 
                under one of the following clauses:
                          (i) [for] For any purpose, not to 
                        exceed $500,000[; or].
                          (ii) [to] To develop domestic 
                        residential housing units, not to 
                        exceed the lesser of $30,000,000 or 30 
                        percent of the savings association's 
                        unimpaired capital and unimpaired 
                        surplus, if--
                                  [(I) the purchase price of 
                                each single family dwelling 
                                unit the development of which 
                                is financed under this clause 
                                does not exceed $500,000;]
                                  [(II)] (I) the savings 
                                association is and continues to 
                                be in compliance with the fully 
                                phased-in capital standards 
                                prescribed under subsection 
                                (t);
                                  [(III)] (II) the Director, by 
                                order, permits the savings 
                                association to avail itself of 
                                the higher limit provided by 
                                this clause;
                                  [(IV)] (III) loans made under 
                                this clause to all borrowers do 
                                not, in aggregate, exceed 150 
                                percent of the savings 
                                association's unimpaired 
                                capital and unimpaired surplus; 
                                and
                                  [(V)] (IV) such loans comply 
                                with all applicable loan-to-
                                value requirements.

           *       *       *       *       *       *       *

  (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 States in which 
such savings association has its home office and its principal 
place of business (if the principal place of business is in a 
different State than the home office).
  (y) Alternative Business Organization.--
          (1) In general.--The Director may prescribe 
        regulations that--
                  (A) permit a Federal savings association to 
                be organized other than as a corporation; and
                  (B) provide requirements for the 
                organizational characteristics of a Federal 
                savings association organized and operating 
                other than as a corporation, consistent with 
                the safety and soundness of the Federal savings 
                association.
          (2) Equal treatment.--Except as otherwise provided in 
        regulations prescribed under subsection (1), a Federal 
        savings association that is operating other than as a 
        corporation shall have the same rights and privileges 
        and shall be subject to the same duties, restrictions, 
        penalties, liabilities, conditions, and limitations as 
        a Federal savings association that is organized as a 
        corporation.

           *       *       *       *       *       *       *


SEC. 10. REGULATION OF HOLDING COMPANIES.

  (a) Definitions.--
          (1) In general.--As used in this section, unless the 
        context otherwise requires--
                  (A) Savings association.--The term ``savings 
                association'' includes a savings bank or 
                cooperative bank which is deemed by the 
                Director to be a savings association under 
                subsection (l) and such term does not include 
                an institution described in section 2(c)(2)(F) 
                of the Bank Holding Company Act of 1956 for 
                purposes of subsections (a)(1)(E), 
                (c)(3)(B)(i), (c)(9)(C)(i), and (e)(3).

           *       *       *       *       *       *       *

                  (C) Company.--The term ``company'' means any 
                corporation, partnership, [trust,] 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.]

           *       *       *       *       *       *       *

  (e) Acquisitions.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Interstate Acquisitions.--No acquisition shall be 
        approved by the Director under this subsection which 
        will result in the formation by any company, through 
        one or more subsidiaries or through one or more 
        transactions, of a multiple savings and loan holding 
        company controlling savings associations in more than 
        one State, unless--
                  (A) such acquisition would be permissible 
                under section 3(d) of the Bank Holding Company 
                Act of 1956 if the savings and loan holding 
                company were a bank holding company and any 
                savings association to be acquired were a bank;
                  [(A)] (B) such company, or a savings 
                association subsidiary of such company, is 
                authorized to acquire control of a savings 
                association subsidiary, or to operate a home or 
                branch office, in the additional State or 
                States pursuant to section 13(k) of the Federal 
                Deposit Insurance Act;
                  [(B)] (C) such company controls a savings 
                association subsidiary which operated a home or 
                branch office in the additional State or States 
                as of March 5, 1987; or
                  [(C)] (D) the statutes of the State in which 
                the savings association to be acquired is 
                located permit a savings association chartered 
                by such State to be acquired by a savings 
                association chartered by the State where the 
                acquiring savings association or savings and 
                loan holding company is located or by a holding 
                company that controls such a State chartered 
                savings association, and such statutes 
                specifically authorize such an acquisition by 
                language to that effect and not merely by 
                implication.

           *       *       *       *       *       *       *

  [(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.

           *       *       *       *       *       *       *

                              ----------                              


              SECTION 4 OF THE 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.

           *       *       *       *       *       *       *

                              ----------                              


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] 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] 
        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] account 
        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] 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 
                international and domestic electronic fund 
                transfers); and
                  (B) to cash checks and money orders and 
                receive international and domestic 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) Additional Investment Authority.--
          (1) In general.--In addition to any investments 
        otherwise authorized, 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.

           *       *       *       *       *       *       *


              requirements governing insured credit unions

  Sec. 205. (a) * * *

           *       *       *       *       *       *       *

  (j) Privileges not Affected by Disclosure to Banking Agency 
or Supervisor.--
          (1) In general.--The submission by any person of any 
        information to the Administration, any State credit 
        union supervisor, or foreign banking authority for any 
        purpose in the course of any supervisory or regulatory 
        process of such Board, supervisor, or authority shall 
        not be construed as waiving, destroying, or otherwise 
        affecting any privilege such person may claim with 
        respect to such information under Federal or State law 
        as to any person or entity other than such Board, 
        supervisor, or authority.
          (2) Rule of construction.--No provision of paragraph 
        (1) may be construed as implying or establishing that--
                  (A) any person waives any privilege 
                applicable to information that is submitted or 
                transferred under any circumstance to which 
                paragraph (1) does not apply; or
                  (B) any person would waive any privilege 
                applicable to any information by submitting the 
                information to the Administration, any State 
                credit union supervisor, or foreign banking 
                authority, but for this subsection.

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] 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] 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] any credit union's 
                        members or may threaten to impair 
                        public confidence in [the] 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] 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] 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.

           *       *       *       *       *       *       *

  (q) Compliance With Monetary Transaction Recordkeeping and 
Report Requirements.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Coordination on uniform requirements.--In 
        prescribing regulations under paragraph (1), the Board, 
        acting through the Financial Institutions Examination 
        Council, shall--
                  (A) consult with the Federal banking agencies 
                and the Secretary of the Treasury; and
                  (B) take such action as may be necessary to 
                ensure that the requirements for procedures 
                established pursuant to such regulations, and 
                the examination standards for reviewing such 
                procedures, are congruent and reasonably 
                uniform (taking into account differences in the 
                form and function of the institutions subject 
                to such requirements).

           *       *       *       *       *       *       *

  (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) * * *
                                  (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

           *       *       *       *       *       *       *

  (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.
  (o) Definitions.--For purposes of this section the following 
definitions shall apply:
          (1) * * *
          (2) Net worth.--The term ``net worth''--
                  (A) with respect to any insured credit union, 
                means the retained earnings balance of the 
                credit union, as determined under generally 
                accepted accounting principles, together with 
                any amounts that were previously retained 
                earnings of any other credit union with which 
                the credit union has combined; and

           *       *       *       *       *       *       *


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.

           *       *       *       *       *       *       *

  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. 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 or are applicable to an insured State nonmember 
bank under section 18(d)(3) of the Federal Deposit Insurance 
Act''. 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.

           *       *       *       *       *       *       *

                              ----------                              


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) * * *

           *       *       *       *       *       *       *

                  (F) An institution, including an institution 
                that accepts collateral for extensions of 
                credit by holding deposits under $100,000, and 
                by other means which--
                          (i) [engages only in credit card 
                        operations;] engages only in--
                                  (I) credit card operations; 
                                and
                                  (II) making investments 
                                designed primarily to promote 
                                the public welfare, including 
                                the welfare of low- and 
                                moderate-income communities or 
                                families (such as by providing 
                                housing, services, or jobs), in 
                                the manner and to the extent 
                                permitted for national banks 
                                under the paragraph designated 
                                the ``Eleventh'' of section 
                                5136 of the Revised Statutes of 
                                the United States and 
                                regulations prescribed under 
                                such paragraph, except that the 
                                last sentence of such paragraph 
                                shall be applied for purposes 
                                of this subclause by 
                                substituting ``5 percent'' for 
                                ``15 percent'' each place such 
                                term appears;

           *       *       *       *       *       *       *

                          (v) does not engage in the business 
                        of making commercial loans, other than 
                        making or purchasing loans for the 
                        purposes described in and to the extent 
                        permitted in clause (i)(II)).

           *       *       *       *       *       *       *

                  [(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) * * *
                  (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.

           *       *       *       *       *       *       *

                              ----------                              


            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) * * *
  (b) Except as permissible under subsection (c), (d), or (e) 
or with the prior approval of the Board under section 5(b) of 
this Act in accordance with subsection (f) of this section--
          (1) * * *

           *       *       *       *       *       *       *

  (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 authorized only under authority of section 
4(f) of this Act and no bank service company shall perform any 
activity authorized only 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.

           *       *       *       *       *       *       *

                              ----------                              


         SECTION 804 OF THE COMMUNITY REINVESTMENT ACT OF 1977

      Sec. 804. (a) * * *

           *       *       *       *       *       *       *

  (d) Establishment of Esops and Ewocs.--
          (1) In general.--In assessing and taking into 
        account, under subsection (a), the record of a 
        financial institution, the appropriate Federal 
        financial supervisory agency shall consider as a factor 
        activities that support or enable the establishment of 
        employee stock ownership plans or eligible worker-owned 
        cooperatives, so long as the employer sponsoring the 
        plan or cooperative is at least 51 percent owned by 
        employees, including low to moderate income employees.
          (2) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  (A) Employee stock ownership plan.--The term 
                ``employee stock ownership plan'' has the same 
                meaning as in section 4975(e)(7) of the 
                Internal Revenue Code of 1986.
                  (B) Eligible worker-owned cooperative.--The 
                term ``eligible worker-owned cooperative'' has 
                the same meaning as in section 1042(c)(2) of 
                the Internal Revenue Code of 1986.

           *       *       *       *       *       *       *

                              ----------                              


               SECTION 503 OF THE GRAMM-LEACH-BLILEY ACT

SEC. 503. DISCLOSURE OF INSTITUTION PRIVACY POLICY.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Exception to Annual Notice Requirement.--A financial 
institution that--
          (1) provides nonpublic personal information only in 
        accordance with the provisions of subsection (b)(2) or 
        (e) of section 502 or regulations prescribed under 
        section 504(b);
          (2) does not share information with affiliates under 
        section 603(d)(2)(A) of the Fair Credit Reporting Act; 
        and
          (3) has not changed its policies and practices with 
        regard to disclosing nonpublic personal information 
        from the policies and practices that were disclosed in 
        the most recent disclosure sent to consumers in 
        accordance with this subsection,
shall not be required to provide an annual disclosure under 
this subsection until such time as the financial institution 
fails to comply with any criteria described in paragraph (1), 
(2), or (3).
  (d) Exception to Notice Requirement.--A financial institution 
shall not be required to provide any disclosure under this 
section if--
          (1) the financial institution is licensed by a State 
        and is subject to existing regulation of consumer 
        confidentiality that prohibits disclosure of nonpublic 
        personal information without knowing and expressed 
        consent of the consumer in the form of laws, rules, or 
        regulation of professional conduct or ethics 
        promulgated either by the court of highest appellate 
        authority or by the principal legislative body or 
        regulatory agency or body of any State of the United 
        States, the District of Columbia, any territory of the 
        United States, Puerto Rico, Guam, American Samoa, the 
        Trust Territory of the Pacific Islands, the Virgin 
        Islands, or the Northern Mariana Islands; or
          (2) the financial institution is licensed by a State 
        and becomes subject to future regulation of consumer 
        confidentiality that prohibits disclosure of nonpublic 
        personal information without knowing and expressed 
        consent of the consumer in the form of laws, rules, or 
        regulation of professional conduct or ethics 
        promulgated either by the court of highest appellate 
        authority or by the principal legislative body or 
        regulatory agency or body of any State of the United 
        States, the District of Columbia, any territory of the 
        United States, Puerto Rico, Guam, American Samoa, the 
        Trust Territory of the Pacific Islands, the Virgin 
        Islands, or the Northern Mariana Islands.
                              ----------                              


       SECTION 1101 OF THE RIGHT TO FINANCIAL PRIVACY ACT OF 1978

                              DEFINITIONS

      Sec. 1101. For the purpose of this title, the term--
          (1) ``financial institution'', except as provided in 
        section 1114, means any office of a bank, savings bank, 
        card issuer as defined in section 103 of the Consumers 
        Credit Protection Act (15 U.S.C. 1602(n)), industrial 
        loan company, trust company, savings association, 
        building and loan, or homestead association (including 
        cooperative banks), credit union, or consumer finance 
        institution (including any lender who advances funds on 
        pledges of personal property), located in any State or 
        territory of the United States, the District of 
        Columbia, Puerto Rico, Guam, American Samoa, or the 
        Virgin Islands;

           *       *       *       *       *       *       *

                              ----------                              


              SECTION 5313 OF TITLE 31, UNITED STATES CODE

Sec. 5313. Reports on domestic coins and currency transactions

  (a) * * *

           *       *       *       *       *       *       *

  [(e) Discretionary Exemptions From Reporting Requirements.--
          [(1) In general.--The Secretary of the Treasury may 
        exempt, pursuant to section 5318(a)(6), a depository 
        institution from the reporting requirements of 
        subsection (a) with respect to transactions between the 
        depository institution and a qualified business 
        customer of the institution on the basis of information 
        submitted to the Secretary by the institution in 
        accordance with procedures which the Secretary shall 
        establish.
          [(2) Qualified business customer defined.--For 
        purposes of this subsection, the term ``qualified 
        business customer'' means a business which--
                  [(A) maintains a transaction account (as 
                defined in section 19(b)(1)(C) of the Federal 
                Reserve Act) at the depository institution;
                  [(B) frequently engages in transactions with 
                the depository institution which are subject to 
                the reporting requirements of subsection (a); 
                and
                  [(C) meets criteria which the Secretary 
                determines are sufficient to ensure that the 
                purposes of this subchapter are carried out 
                without requiring a report with respect to such 
                transactions.
          [(3) Criteria for exemption.--The Secretary of the 
        Treasury shall establish, by regulation, the criteria 
        for granting and maintaining an exemption under 
        paragraph (1).
          [(4) Guidelines.--
                  [(A) In general.--The Secretary of the 
                Treasury shall establish guidelines for 
                depository institutions to follow in selecting 
                customers for an exemption under this 
                subsection.
                  [(B) Contents.--The guidelines may include a 
                description of the types of businesses or an 
                itemization of specific businesses for which no 
                exemption will be granted under this subsection 
                to any depository institution.
          [(5) Annual review.--The Secretary of the Treasury 
        shall prescribe regulations requiring each depository 
        institution to--
                  [(A) review, at least once each year, the 
                qualified business customers of such 
                institution with respect to whom an exemption 
                has been granted under this subsection; and
                  [(B) upon the completion of such review, 
                resubmit information about such customers, with 
                such modifications as the institution 
                determines to be appropriate, to the Secretary 
                for the Secretary's approval.
          [(6) 2-year phase-in provision.--During the 2-year 
        period beginning on the date of enactment of the Money 
        Laundering Suppression Act of 1994, this subsection 
        shall be applied by the Secretary on the basis of such 
        criteria as the Secretary determines to be appropriate 
        to achieve an orderly implementation of the 
        requirements of this subsection.]
  (e) Qualified Customer Exemption.--
          (1) In general.--The Secretary of the Treasury shall 
        prescribe regulations within 270 days of the enactment 
        of the Financial Services Regulatory Relief Act of 2005 
        that exempt any depository institution from filing a 
        report pursuant to this section in a transaction for 
        the payment, receipt, or transfer of United States 
        coins or currency (or other monetary instruments the 
        Secretary of the Treasury prescribes) with a qualified 
        customer of the depository institution.
          (2) Qualified customer defined.--For purposes of this 
        section, the term ``qualified customer'', with respect 
        to a depository institution, has such meaning as the 
        Secretary of the Treasury shall prescribe, which shall 
        include any person that--
                  (A) is incorporated or organized under the 
                laws of the United States or any State, 
                including a sole proprietorship, or is 
                registered as and eligible to do business 
                within the United States or a State;
                  (B) has maintained a deposit account with the 
                depository institution for at least 12 months; 
                and
                  (C) has engaged, using such account, in 
                multiple currency transactions that are subject 
                to the reporting requirements of subsection 
                (a).
          (3) Regulations.--
                  (A) In general.--The Secretary of the 
                Treasury shall prescribe regulations requiring 
                a depository institution to file a 1-time 
                notice of designation of exemption for each 
                qualified customer of the depository 
                institution.
                  (B) Form and content of exemption notice.--
                The Secretary shall by regulation prescribe the 
                form, manner, content, and timing of the 
                qualified customer exemption notice; such 
                notice shall include information sufficient to 
                identify the qualified customer and its 
                accounts.
                  (C) Authority of secretary.--
                          (i) In general.--The Secretary may 
                        suspend, reject or revoke any qualified 
                        customer exemption notice, in 
                        accordance with criteria prescribed by 
                        the Secretary by regulation.
                          (ii) Conditions.--The Secretary may 
                        establish conditions, in accordance 
                        with criteria prescribed by regulation, 
                        under which exempt qualified customers 
                        of an insured depository institution 
                        that is merged with or acquired by 
                        another insured depository institution 
                        will continue to be treated as 
                        designated exempt qualified customers 
                        of the surviving or acquiring 
                        institution.

           *       *       *       *       *       *       *

                              ----------                              


SECTION 1006 OF THE FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL 
                              ACT OF 1978

                        FUNCTIONS OF THE COUNCIL

  Sec. 1006. (a) * * *

           *       *       *       *       *       *       *

  (h) Monetary Transaction Recordkeeping and Reporting 
Requirements.--The Council and the Secretary of the Treasury 
shall jointly establish--
          (1) uniform standards and principles applicable to 
        the examination of financial institutions to ensure 
        compliance with the requirements of subchapter II of 
        chapter 53, United States Code, sections 8(s) and 21 of 
        the Federal Deposit Insurance Act, and section 206(q) 
        of the Federal Credit Union Act; and
          (2) a clear policy statement on appropriate processes 
        for resolving examiner-institution disagreements 
        concerning the application of subchapter II of chapter 
        53, United States Code, sections 8(s) and 21 of the 
        Federal Deposit Insurance Act, and section 206(q) of 
        the Federal Credit Union Act to financial institutions.
                              ----------                              


              SECTION 1306 OF TITLE 18, UNITED STATES CODE

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.
                              ----------                              


                   FAIR DEBT COLLECTION PRACTICES ACT

                 TITLE VIII--DEBT COLLECTION PRACTICES

Sec.
801. Short title.
     * * * * * * *
818. Exception for certain bad check enforcement programs operated by 
          private entities.
[818] 819. Effective date.
     * * * * * * *

Sec. 801. Short title

  This title may be cited as the ``Fair Debt Collection 
Practices Act''.

           *       *       *       *       *       *       *


Sec. 809. Validation of debts

  (a) * * *
  (b) [If the consumer] Collection activities and 
communications may continue during any 30-day period referred 
to in subsection (a). However, if the consumer notifies the 
debt collector in writing within the thirty-day period 
described in subsection (a) that the debt, or any portion 
thereof, is disputed, or that the consumer requests the name 
and address of the original creditor, the debt collector shall 
cease collection of the debt, or any disputed portion thereof, 
until the debt collector obtains verification of the debt or a 
copy of a judgment, or the name and address of the original 
creditor, and a copy of such verification or judgment, or name 
and address of the original creditor, is mailed to the consumer 
by the debt collector.

           *       *       *       *       *       *       *

  (d) Legal Pleadings.--A communication in the form of a formal 
pleading in a civil action shall not be treated as an initial 
communication for purposes of subsection (a).
  (e) Notice Provisions.--The sending or delivery of any form 
or notice which does not request the payment of a debt and is 
expressly required by any other Federal or State law or 
regulation, including the Internal Revenue Code of 1986, title 
V of Gramm-Leach-Bliley Act, and any data security breach 
notice and privacy law shall not be treated as a communication 
in connection with debt collection.

           *       *       *       *       *       *       *


Sec. 818. Exception for certain bad check enforcement programs operated 
                    by private entities

  (a) In General.--If--
          (1) a State or district attorney establishes, within 
        the jurisdiction of such State or district attorney and 
        with respect to alleged bad check violations that do 
        not involve a check described in subsection (c), a 
        pretrial diversion program for alleged bad check 
        offenders who agree to participate voluntarily in such 
        program to avoid criminal prosecution and are not 
        described in subsection (b);
          (2) a private entity, that is subject to an 
        administrative support services contract with a State 
        or district attorney and operates under the direction, 
        supervision and control of such State or district 
        attorney, operates the pretrial diversion program 
        described in paragraph (1); and
          (3) in the course of performing duties delegated to 
        it by a State or district attorney under the contract, 
        the private entity referred to in paragraph (2)--
                  (A) complies with the penal laws of the 
                State;
                  (B) conforms with the terms of the contract 
                and directives of the State or district 
                attorney;
                  (C) does not exercise independent 
                prosecutorial discretion;
                  (D) contacts any alleged offender referred to 
                in paragraph (1) for purposes of participating 
                in a program referred to in such paragraph 
                only--
                          (i) as a result of any determination 
                        by the State or district attorney that 
                        sufficient evidence of a bad check 
                        violation under State law exists and 
                        that contact with the alleged offender 
                        for purposes of participation in the 
                        program is appropriate; or
                          (ii) as otherwise permitted in 
                        response to evidence of a bad check;
                  (E) includes as part of an initial written 
                communication with an alleged offender a clear 
                and conspicuous statement that--
                          (i) the alleged offender may dispute 
                        the validity of any alleged bad check 
                        violation through a procedure 
                        established and supervised by the State 
                        or district attorney, together with an 
                        explanation of how such a dispute may 
                        be initiated; and
                          (ii) where the alleged offender 
                        knows, or has reasonable cause to 
                        believe, that the alleged bad check 
                        violation is the result of theft or 
                        forgery of the check, identity theft, 
                        or other fraud that is not the result 
                        of the alleged offender's conduct, the 
                        alleged offender may file a crime 
                        report with the appropriate law 
                        enforcement agency and have further 
                        contacts or restitution efforts 
                        suspended until the question of the 
                        theft or forgery of the check, identity 
                        theft, or other fraud has been 
                        resolved, together with clear 
                        instructions on how to file such crime 
                        report; and
                  (F) charges only fees in connection with 
                services under the contract that--
                          (i) have been authorized by the 
                        contract with the State or district 
                        attorney; and
                          (ii) conform with the schedule of 
                        reasonable charges for such services 
                        which shall be established by the 
                        National District Attorney's 
                        Association, after consultation with 
                        the Commission and representatives of 
                        interested business and consumer 
                        organizations,
the private entity shall be treated as an officer of the State 
and excluded from the definition of debt collector, pursuant to 
the exception provided in section 803(6)(C), with respect to 
the entity's operation of the program described in paragraph 
(1) under the contract described in paragraph (2).
  (b) Certain Offenders Excluded.--An alleged bad check 
offender is described in this subsection if a private entity 
described in subsection (a)(2) can determine from available 
records that such offender--
          (1) was convicted of a bad check offense in the 3 
        years prior to issuing the bad check under 
        consideration; or
          (2) participated in a pretrial diversion program in 
        the 18 months prior to issuing the bad check under 
        consideration.
  (c) Certain Checks Excluded.--A check is described in this 
subsection if the check involves, or is subsequently found to 
involve--
          (1) a postdated check presented in connection with a 
        payday loan, or other similar transaction, where the 
        holder of the check knew that the issuer had 
        insufficient funds at the time the check was made, 
        drawn or delivered;
          (2) a stop payment order where the issuer acted in 
        good faith and with reasonable cause in stopping 
        payment on the check;
          (3) a check dishonored because of an adjustment to 
        the issuer's account by the financial institution 
        holding such account without providing notice to the 
        person at the time the check was made, drawn or 
        delivered;
          (4) a check for partial payment of a debt where the 
        holder had previously accepted partial payment for such 
        debt;
          (5) a check issued by a person who was not competent, 
        or was not of legal age, to enter into a legal 
        contractual obligation at the time the check was made, 
        drawn or delivered; or
          (6) a check issued to pay an obligation arising from 
        a transaction that was illegal in the jurisdiction of 
        the State or district attorney at the time the check 
        was made, drawn or delivered.
  (d) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) State or district attorney.--The term ``State or 
        district attorney'' means the chief elected or 
        appointed prosecuting attorney in a district, county 
        (as defined in section 2 of title 1, United States 
        Code), municipality, or comparable jurisdiction, 
        including State attorneys general who act as chief 
        elected or appointed prosecuting attorneys in a 
        district, county (as so defined), municipality or 
        comparable jurisdiction, who may be referred to by a 
        variety of titles such as district attorneys, 
        prosecuting attorneys, commonwealth's attorneys, 
        solicitors, county attorneys, and state's attorneys, 
        and who are responsible for the prosecution of State 
        crimes and violations of jurisdiction-specific local 
        ordinances.
          (2) Check.--The term ``check'' has the same meaning 
        as in section 3(6) of the Check Clearing for the 21st 
        Century Act.
          (3) Bad check.--The term ``bad check'' means any 
        check that--
                  (A) the issuer knew, or should have known, 
                would not be paid upon presentment because the 
                issuer--
                          (i) had no account with the drawee 
                        financial institution at the time the 
                        check was made, drawn, or delivered;
                          (ii) had closed the account upon with 
                        the check was made or drawn prior to 
                        the time the check was made, drawn, or 
                        delivered; or
                          (iii) used a false or altered check, 
                        or false or altered check account 
                        number; or
                  (B) was refused payment by the financial 
                institution or other drawee for lack of 
                sufficient funds and the issuer failed to pay 
                the full amount of the check, together with 
                reasonable costs as permitted by State law--
                          (i) after receiving written notice 
                        from the holder of the check that 
                        payment was refused by the drawee 
                        financial institution to the extent 
                        that the timing and mode of delivery of 
                        such written notice is in compliance 
                        with the applicable State law for 
                        determining criminal liability for bad 
                        check offenses; or
                          (ii) in a case in which there are no 
                        applicable State law requirements as 
                        described in clause (i), within 30 days 
                        of receiving written notice, mailed to 
                        the issuer by certified mail to the 
                        address printed on the check, or given 
                        at the time the check was made, drawn 
                        or delivered or, otherwise, at the 
                        address where the alleged offender 
                        resides or is found, from the holder of 
                        the check that payment of 1 or more 
                        checks was refused by the drawee 
                        financial institution.

Sec. [818] 819. Effective date

  This title takes effect upon the expiration of six months 
after the date of its enactment, but section 809 shall apply 
only with respect to debts for which the initial attempt to 
collect occurs after such effective date.

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