[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.
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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.
* * * * * * *