[House Report 119-252]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-252
======================================================================
TAILORED REGULATORY UPDATES FOR
SUPERVISORY TESTING ACT OF 2025
_______
September 8, 2025.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 4478]
The Committee on Financial Services, to whom was referred
the bill (H.R. 4478) to amend the Federal Deposit Insurance Act
to permit Federal banking agencies to examine qualifying
insured depository institutions with under $6 billion in total
assets not less than once during each 18-month period, and for
other purposes, having considered the same, reports favorably
thereon without amendment and recommends that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 2
Background and Need for Legislation.............................. 2
Committee Consideration.......................................... 2
Related Hearing.................................................. 2
Committee Votes.................................................. 3
Committee Oversight Findings..................................... 5
Performance Goals and Objectives................................. 5
Committee Cost Estimate.......................................... 5
New Budget Authority and CBO Cost Estimate....................... 5
Unfunded Mandates Statement...................................... 5
Earmark Statement................................................ 5
Federal Advisory Committee Act Statement......................... 6
Applicability to the Legislative Branch.......................... 6
Duplication of Federal Programs.................................. 6
Section-by-Section Analysis of the Legislation................... 6
Changes in Existing Law Made by the Bill, as Reported............ 6
Purpose and Summary
H.R. 4478, the Tailored Regulatory Updates for Supervisory
Testing (TRUST) Act of 2025, was introduced on July 17, 2025,
by Republican Representative Tim Moore (NC-14). H.R. 4478
raises the consolidated asset threshold from $3 billion to $6
billion for insured depository institutions to qualify for an
18-month examination cycle.
Background and Need for Legislation
The post-financial crisis regulatory framework created a
top-down, heavy-handed approach to financial regulation. This
has left smaller, less complex financial institutions, which
pose minimal systemic risk, with narrower paths to growth and
substantially higher compliance costs. In 2018, Congress
recognized this imbalance and, on a bipartisan basis, passed
reforms to provide regulatory relief for well-managed community
financial institutions. However, the intended tailoring of
supervisory requirements was not meaningfully implemented under
the Biden Administration, contributing to further consolidation
and reducing banking access in rural and underserved areas.
This bill incentivizes strong, well-capitalized institutions
with a more flexible examination schedule helps preserve
community banking, promotes competition, and allows more
resources to flow into local communities.
Committee Consideration
119TH CONGRESS
On July 17, 2025, Representative Moore introduced H.R.
4478, the Tailored Regulatory Updates for Supervisory Testing
(TRUST) Act of 2025, with Representative Ritchie Torres (D-NY)
as an original cosponsor. The bill was referred solely to the
Committee on Financial Services. The bill was attached to the
April 29, 2025, hearing titled ``Regulatory Overreach: The
Price Tag on American Prosperity.''
On July 23, 2025, the Committee on Financial Services met
in open session to consider, among others, H.R. 4478. The
Committee ordered H.R. 4478, to be favorably reported to the
House of Representatives.
Related Hearing
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 4478:
The Financial Institutions Subcommittee of the
Committee on Financial Services held an April 29, 2025,
hearing titled ``Regulatory Overreach: The Price Tag on
American Prosperity.'' A discussion draft version of
the bill was attached to the hearing. The following
witnesses testified: Ms. Sarah Christine Flowers,
Senior Vice President, Senior Associate General
Counsel, Bank Policy Institute; Mr. Michael Radcliffe,
Chairman & Chief Executive Officer, Community Financial
Services Bank; Mrs. Margaret E. Tahyar, Partner, Head
of Financial Institutions Group, Davis Polk & Wardwell
LLP; and The Honorable Graham Steele, Academic Fellow,
Rock Center for Corporate Governance, Stanford Law
School.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include record
votes on the motion to report legislation and amendments
thereto.
On July 23, 2025, the Committee ordered H.R. 4478 to be
reported favorably to the House by a recorded vote of 48 yeas
and 0 nays. (Record Vote No. FC-188).
Committee Oversight Findings
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 4478 is to
incentivize strong, well-capitalized institutions with a more
flexible examination schedule to help preserve community
banking and allow more resources to flow into local
communities.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 4478. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee will adopt as its own
the cost estimate by the Director of the Congressional Budget
Office once it has been prepared.
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee will adopt as
its own the cost estimate for the bill prepared by the Director
of the Congressional Budget Office. However, a cost estimate
was not made available to the Committee in time for the filing
of this report. The Chairman of the Committee shall cause such
estimate to be printed in the Congressional Record upon its
receipt by the Committee.
Unfunded Mandates Statement
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Chairman of the Committee shall cause
such estimate to be printed in the Congressional Record upon
its receipt by the Committee.
Earmark Statement
In compliance with clause 9 of rule XXI of the Rules of the
House of Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.
Federal Advisory Committee Act Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the 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.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides the short title is the ``Tailored
Regulatory Updates for Supervisory Testing Act of 2025'' or the
``TRUST Act of 2025.''
Section 2. Modification of examination cycle thresholds for well-
managed institutions
This section amends Section 10(d) of the Federal Deposit
Insurance Act by increasing the asset threshold for certain
small institutions to qualify for an 18-month examination cycle
to $6 billion from $3 billion.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
FEDERAL DEPOSIT INSURANCE ACT
* * * * * * *
Sec. 10. (a) The Board of Directors shall administer the
affairs of the Corporation fairly and impartially and without
discrimination. The Board of Directors of the Corporation shall
determine and prescribe the manner in which its obligations
shall be incurred and its expenses allowed and paid. The
Corporation shall be entitled to the free use of the United
States mails in the same manner as the executive departments of
the Government. The Corporation with the consent of any Federal
Reserve bank or of any board, commission, independent
establishment, or executive department of the Government,
including any field service thereof, may avail itself of the
use of information, services, and facilities thereof in
carrying out the provisions of this Act.
(b) Examinations.--
(1) Appointment of examiners and claims agents.--The
Board of Directors shall appoint examiners and claims
agents.
(2) Regular examinations.--Any examiner appointed
under paragraph (1) shall have power, on behalf of the
Corporation, to examine--
(A) any insured State nonmember bank or
insured State branch of any foreign bank;
(B) any depository institution which files an
application with the Corporation to become an
insured depository institution; and
(C) any insured depository institution in
default,
whenever the Board of Directors determines an
examination of any such depository institution is
necessary.
(3) Special examination of any insured depository
institution.--
(A) In general.--In addition to the
examinations authorized under paragraph (2),
any examiner appointed under paragraph (1)
shall have power, on behalf of the Corporation,
to make any special examination of any insured
depository institution or nonbank financial
company supervised by the Board of Governors or
a bank holding company described in section
165(a) of the Financial Stability Act of 2010,
whenever the Board of Directors determines that
a special examination of any such depository
institution is necessary to determine the
condition of such depository institution for
insurance purposes, or of such nonbank
financial company supervised by the Board of
Governors or bank holding company described in
section 165(a) of the Financial Stability Act
of 2010, for the purpose of implementing its
authority to provide for orderly liquidation of
any such company under title II of that Act,
provided that such authority may not be used
with respect to any such company that is in a
generally sound condition.
(B) Limitation.--Before conducting a special
examination of a nonbank financial company
supervised by the Board of Governors or a bank
holding company described in section 165(a) of
the Financial Stability Act of 2010, the
Corporation shall review any available and
acceptable resolution plan that the company has
submitted in accordance with section 165(d) of
that Act, consistent with the nonbinding effect
of such plan, and available reports of
examination, and shall coordinate to the
maximum extent practicable with the Board of
Governors, in order to minimize duplicative or
conflicting examinations.
(4) Examination of affiliates.--
(A) In general.--In making any examination
under paragraph (2) or (3), any examiner
appointed under paragraph (1) shall have power,
on behalf of the Corporation, to make such
examinations of the affairs of any affiliate of
any depository institution as may be necessary
to disclose fully--
(i) the relationship between such
depository institution and any such
affiliate; and
(ii) the effect of such relationship
on the depository institution.
(B) Commitment by foreign banks to allow
examinations of affiliates.--No branch or
depository institution subsidiary of a foreign
bank may become an insured depository
institution unless such foreign bank submits a
written binding commitment to the Board of
Directors to permit any examination of any
affiliate of such branch or depository
institution subsidiary pursuant to subparagraph
(A) to the extent determined by the Board of
Directors to be necessary to carry out the
purposes of this Act.
(5) Examination of insured state branches.--The Board
of Directors shall--
(A) coordinate examinations of insured State
branches of foreign banks with examinations
conducted by the Board of Governors of the
Federal Reserve System under section 7(c)(1) of
the International Banking Act of 1978; and
(B) to the extent possible, participate in
any simultaneous examination of the United
States operations of a foreign bank requested
by the Board under such section.
(6) Power and duty of examiners.--Each examiner
appointed under paragraph (1) shall--
(A) have power to make a thorough examination
of any insured depository institution or
affiliate under paragraph (2), (3), (4), or
(5); and
(B) shall make a full and detailed report of
condition of any insured depository institution
or affiliate examined to the Corporation.
(7) Power of claim agents.--Each claim agent
appointed under paragraph (1) shall have power to
investigate and examine all claims for insured
deposits.
(c) In connection with examinations of insured depository
institutions and any State nonmember bank, savings association,
or other institution making application to become insured
depository institutions, and affiliates thereof, or with other
types of investigations to determine compliance with applicable
law and regulations, the appropriate Federal banking agency, or
its designated representatives, are authorized to administer
oaths and affirmations, and to examine and and to take and
preserve testimony under oath as to any matter in respect to
the affairs or ownership of any such bank or institution or
affiliate thereof, and to exercise such other powers as are set
forth in section 8(n) of this Act.
(d) Annual On-Site Examinations of All Insured Depository
Institutions Required.--
(1) In general.--The appropriate Federal banking
agency shall, not less than once during each 12-month
period, conduct a full-scope, on-site examination of
each insured depository institution.
(2) Examinations by corporation.--Paragraph (1) shall
not apply during any 12-month period in which the
Corporation has conducted a full-scope, on-site
examination of the insured depository institution.
(3) State examinations acceptable.--The examinations
required by paragraph (1) may be conducted in alternate
12-month periods, as appropriate, if the appropriate
Federal banking agency determines that an examination
of the insured depository institution conducted by the
State during the intervening 12-month period carries
out the purpose of this subsection.
(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 [$3,000,000,000]
$6,000,000,000;
(B) the institution is well capitalized, as
defined in section 38;
(C) when the institution was most recently
examined, it was found to be well managed, and
its composite condition--
(i) was found to be outstanding; or
(ii) was found to be outstanding or
good, in the case of an insured
depository institution that has total
assets of not more than $200,000,000;
(D) the insured institution is not currently
subject to a formal enforcement proceeding or
order by the Corporation or the appropriate
Federal banking agency; and
(E) no person acquired control of the
institution during the 12-month period in which
a full-scope, on-site examination would be
required but for this paragraph.
(5) Certain government-controlled institutions
exempted.--Paragraph (1) does not apply to--
(A) any institution for which the Corporation
is conservator; or
(B) any bridge depository institution, none
of the voting securities of which are owned by
a person or agency other than the Corporation.
(6) Coordinated examinations.--To minimize the
disruptive effects of examinations on the operations of
insured depository institutions--
(A) each appropriate Federal banking agency
shall, to the extent practicable and consistent
with principles of safety and soundness and the
public interest--
(i) coordinate examinations to be
conducted by that agency at an insured
depository institution and its
affiliates;
(ii) coordinate with the other
appropriate Federal banking agencies in
the conduct of such examinations;
(iii) work to coordinate with the
appropriate State bank supervisor--
(I) the conduct of all
examinations made pursuant to
this subsection; and
(II) the number, types, and
frequency of reports required
to be submitted to such
agencies and supervisors by
insured depository
institutions, and the type and
amount of information required
to be included in such reports;
and
(iv) use copies of reports of
examinations of insured depository
institutions made by any other Federal
banking agency or appropriate State
bank supervisor to eliminate
duplicative requests for information;
and
(B) not later than 2 years after the date of
enactment of the Riegle Community Development
and Regulatory Improvement Act of 1994, the
Federal banking agencies shall jointly
establish and implement a system for
determining which one of the Federal banking
agencies or State bank supervisors shall be the
lead agency responsible for managing a unified
examination of each insured depository
institution and its affiliates, as required by
this subsection.
(7) Separate examinations permitted.--Notwithstanding
paragraph (6), 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) Report.--At the time the system provided for in
paragraph (6) 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) 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) 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
$200,000,000 to an amount not to exceed
[$3,000,000,000] $6,000,000,000 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.
(e) Examination Fees.--
(1) Regular and special examinations of depository
institutions.--The cost of conducting any regular
examination or special examination of any depository
institution under subsection (b)(2), (b)(3), or (d) or
of any entity described in section 3(q)(2) may be
assessed by the Corporation against the institution or
entity to meet the expenses of the Corporation in
carrying out such examinations.
(2) Examination of affiliates.--The cost of
conducting any examination of any affiliate of any
insured depository institution under subsection (b)(4)
may be assessed by the Corporation against each
affiliate which is examined to meet the Corporation's
expenses in carrying out such examination.
(3) Assessment against depository institution in case
of affiliate's refusal to pay.--
(A) In general.--Subject to subparagraph (B),
if any affiliate of any insured depository
institution--
(i) refuses to pay any assessment
under paragraph (2); or
(ii) fails to pay any such assessment
before the end of the 60-day period
beginning on the date the affiliate
receives notice of the assessment,
the Corporation may assess such cost against,
and collect such cost from, the depository
institution.
(B) Affiliate of more than 1 depository
institution.--If any affiliate referred to in
subparagraph (A) is an affiliate of more than 1
insured depository institution, the assessment
under subparagraph (A) may be assessed against
the depository institutions in such proportions
as the Corporation determines to be
appropriate.
(4) Civil money penalty for affiliate's refusal to
cooperate.--
(A) Penalty imposed.--If any affiliate of any
insured depository institution--
(i) refuses to permit an examiner
appointed by the Board of Directors
under subsection (b)(1) to conduct an
examination; or
(ii) refuses to provide any
information required to be disclosed in
the course of any examination,
the depository institution shall forfeit and
pay a penalty of not more than $5,000 for each
day that any such refusal continues.
(B) Assessment and collection.--Any penalty
imposed under subparagraph (A) shall be
assessed and collected by the Corporation in
the manner provided in section 8(i)(2).
(5) Deposits of examination assessment.--Amounts
received by the Corporation under this subsection
(other than paragraph (4)) may be deposited in the
manner provided in section 13.
(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
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.
(g) Authority To Prescribe Regulations and Definitions.--
Except to the extent that authority under this Act is conferred
on any of the Federal banking agencies other than the
Corporation, the Corporation may--
(1) prescribe regulations to carry out this Act; and
(2) by regulation define terms as necessary to carry
out this Act.
(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 its
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 of the United States, 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), 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 shall notify the
State bank supervisor of each host
State of the bank if there has been a
final determination that the bank is in
a troubled condition.
(ii) Timing of notice.--The State
bank supervisor of the home State of an
insured State bank shall provide notice
under clause (i) as soon as is
reasonably possible, but in all cases
not later than 15 business days after
the date on which 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 insured State bank is violating any law
of the host State that is applicable to such branch
pursuant to section 24(j), 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.
(B) Definition.--For purposes of this
subsection, the term ``cooperative agreement''
means a written agreement that is signed by the
home State bank supervisor and the 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.
(C) 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 State 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).
(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 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
that 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 definitions 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 paragraph (2)(B), 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;
(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 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.
(i) Flood Insurance Compliance by Insured Depository
Institutions.--
(1) Examinations.--The appropriate Federal banking
agency shall, during each scheduled on-site examination
required by this section, determine whether the insured
depository institution is complying with the
requirements of the national flood insurance program.
(2) Report.--
(A) Requirement.--Not later than 1 year after
the date of enactment of the Riegle Community
Development and Regulatory Improvement Act of
1994 and biennially thereafter for the next 4
years, each appropriate Federal banking agency
shall submit a report to the Congress on
compliance by insured depository institutions
with the requirements of the national flood
insurance program.
(B) Contents.--Each report submitted under
this paragraph shall include a description of
the methods used to determine compliance, the
number of institutions examined during the
reporting year, a listing and total number of
institutions found not to be in compliance,
actions taken to correct incidents of
noncompliance, and an analysis of compliance,
including a discussion of any trends, patterns,
and problems, and recommendations regarding
reasonable actions to improve the efficiency of
the examinations processes.
(j) Consultation Among Examiners.--
(1) In general.--Each appropriate Federal banking
agency shall take such action as may be necessary to
ensure that examiners employed by the agency--
(A) consult on examination activities with
respect to any depository institution; and
(B) achieve an agreement and resolve any
inconsistencies in the recommendations to be
given to such institution as a consequence of
any examinations.
(2) Examiner-in-charge.--Each appropriate Federal
banking agency shall consider appointing an examiner-
in-charge with respect to a depository institution to
ensure consultation on examination activities among all
of the examiners of that agency involved in
examinations of the institution.
(k) One-Year Restrictions on Federal Examiners of Financial
Institutions.--
(1) In general.--In addition to other applicable
restrictions set forth in title 18, United States Code,
the penalties set forth in paragraph (6) of this
subsection shall apply to any person who--
(A) was an officer or employee (including any
special Government employee) of a Federal
banking agency or a Federal reserve bank;
(B) served 2 or more months during the final
12 months of his or her employment with such
agency or entity as the senior examiner (or a
functionally equivalent position) of a
depository institution or depository
institution holding company with continuing,
broad responsibility for the examination (or
inspection) of that depository institution or
depository institution holding company on
behalf of the relevant agency or Federal
reserve bank; and
(C) within 1 year after the termination date
of his or her service or employment with such
agency or entity, knowingly accepts
compensation as an employee, officer, director,
or consultant from--
(i) such depository institution, any
depository institution holding company
that controls such depository
institution, or any other company that
controls such depository institution;
or
(ii) such depository institution
holding company or any depository
institution that is controlled by such
depository institution holding company.
(2) Definitions.--For purposes of this subsection--
(A) the term ``depository institution''
includes an uninsured branch or agency of a
foreign bank, if such branch or agency is
located in any State; and
(B) the term ``depository institution holding
company'' includes any foreign bank or company
described in section 8(a) of the International
Banking Act of 1978.
(3) Rules of construction.--For purposes of this
subsection, a foreign bank shall be deemed to control
any branch or agency of the foreign bank, and a person
shall be deemed to act as a consultant for a depository
institution, depository institution holding company, or
other company, only if such person directly works on
matters for, or on behalf of, such depository
institution, depository institution holding company, or
other company.
(4) Regulations.--
(A) In general.--Each Federal banking agency
shall prescribe rules or regulations to
administer and carry out this subsection,
including rules, regulations, or guidelines to
define the scope of persons referred to in
paragraph (1)(B).
(B) Consultation required.--The Federal
banking agencies shall consult with each other
for the purpose of assuring that the rules and
regulations issued by the agencies under
subparagraph (A) are, to the extent possible,
consistent, comparable, and practicable, taking
into account any differences in the supervisory
programs utilized by the agencies for the
supervision of depository institutions and
depository institution holding companies.
(5) Waiver.--
(A) Agency authority.--A Federal banking
agency may grant a waiver, on a case by case
basis, of the restriction imposed by this
subsection to any officer or employee
(including any special Government employee) of
that agency, and the Board of Governors of the
Federal Reserve System may grant a waiver of
the restriction imposed by this subsection to
any officer or employee of a Federal reserve
bank, if the head of such agency certifies in
writing that granting the waiver would not
affect the integrity of the supervisory program
of the relevant Federal banking agency.
(B) Definition.--For purposes of this
paragraph, the head of an agency is--
(i) the Comptroller of the Currency,
in the case of the Office of the
Comptroller of the Currency;
(ii) the Chairman of the Board of
Governors of the Federal Reserve
System, in the case of the Board of
Governors of the Federal Reserve
System; and
(iii) the Chairperson of the Board of
Directors, in the case of the
Corporation.
(6) Penalties.--
(A) In general.--In addition to any other
administrative, civil, or criminal remedy or
penalty that may otherwise apply, whenever a
Federal banking agency determines that a person
subject to paragraph (1) has become associated,
in the manner described in paragraph (1)(C),
with a depository institution, depository
institution holding company, or other company
for which such agency serves as the appropriate
Federal banking agency, the agency shall impose
upon such person one or more of the following
penalties:
(i) Industry-wide prohibition
order.--The Federal banking agency
shall serve a written notice or order
in accordance with and subject to the
provisions of section 8(e)(4) for
written notices or orders under
paragraph (1) or (2) of section 8(e),
upon such person of the intention of
the agency--
(I) to remove such person
from office or to prohibit such
person from further
participation in the conduct of
the affairs of the depository
institution, depository
institution holding company, or
other company for a period of
up to 5 years; and
(II) to prohibit any further
participation by such person,
in any manner, in the conduct
of the affairs of any insured
depository institution for a
period of up to 5 years.
(ii) Civil monetary penalty.--The
Federal banking agency may, in an
administrative proceeding or civil
action in an appropriate United States
district court, impose on such person a
civil monetary penalty of not more than
$250,000. Any administrative proceeding
under this clause shall be conducted in
accordance with section 8(i). In lieu
of an action by the Federal banking
agency under this clause, the Attorney
General of the United States may bring
a civil action under this clause in the
appropriate United States district
court.
(B) Scope of prohibition order.--Any person
subject to an order issued under subparagraph
(A)(i) shall be subject to paragraphs (6) and
(7) of section 8(e) in the same manner and to
the same extent as a person subject to an order
issued under such section.
(C) Definitions.--Solely for purposes of this
paragraph, the ``appropriate Federal banking
agency'' for a company that is not a depository
institution or depository institution holding
company shall be the Federal banking agency on
whose behalf the person described in paragraph
(1) performed the functions described in
paragraph (1)(B).
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