Mutual Depository Institution Conversion Protection Act of 1994

Summary: Mutual Depository Institution Conversion Protection Act of 1994 - Amends the Home Owners' Loan Act with respect to conversions from mutual to stock form of ownership by State and Federal savings banks and associations to:  (1) subject State institutions to Federal regulations; (2) authorize State regulatory authorities to impose conversion rules more restrictive than the Federal rules; (3) restrict the beneficial interest available to insider transactions pursuant to such conversions to the same interest available to non-insiders; (4) prohibit for one year compensation to savings institution personnel which exceeds that received before the conversion date; and (5) require the Director of the Office of Thrift Supervision to establish aggregate limits on the beneficial interests of insiders pursuant to such conversions. 
Directs the Secretary of the Treasury to study and report to the Congress on the adequacy of Federal regulations and disclosure requirements regarding such conversions.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Mutual Depository Institution 
Conversion Protection Act of 1994''.

SEC. 2. MUTUAL-TO-STOCK CONVERSIONS BY STATE INSTITUTIONS.

    Section 5(j) of the Home Owners' Loan Act (12 U.S.C. 1464(j)) is 
amended to read as follows:
    ``(j) Stock Conversions by State Institutions.--
            ``(1) Application of federal regulations.--A converting 
        institution shall be subject to such regulations as the 
        Director shall prescribe. The appropriate State regulatory 
        authority may impose more restrictive rules or regulations on 
        such conversions if it deems such action to be appropriate.
            ``(2) Limitation on insider transactions.--An officer, 
        director, or employee of a converting institution may purchase 
        or receive, directly or indirectly, shares of or any other 
        beneficial interest in that institution only under the same 
        terms and conditions and only in the same amounts as are 
        available--
                    ``(A) to any depositor of the institution who is 
                not otherwise affiliated with the institution, if such 
                officer, director, or employee is a bona fide depositor 
                of the institution; or
                    ``(B) generally to any other person who is not 
                affiliated with the institution, if such officer, 
                director, or employee is not a bona fide depositor of 
                the institution.
            ``(3) Consideration of additional compensation.--No 
        proposal may be made to the shareholders of a converted 
        institution during the 1-year period beginning on the date of 
        conversion to increase the direct or indirect compensation of 
        an officer, director, or employee of the institution in excess 
        of the compensation of such person prior to the date of the 
        conversion.
            ``(4) Aggregate limit on beneficial interests of 
        insiders.--The Director shall, by regulation, establish an 
        appropriate aggregate percentage of and an aggregate dollar 
        limitation on the beneficial interests in a converting 
        institution that may be held, directly or indirectly, by any 
        officer, director, or employee of the institution.
            ``(5) Definitions.--For purposes of this subsection--
                    ``(A) the terms `State savings association' and 
                `State savings bank' have the same meanings as in 
                section 3 of the Federal Deposit Insurance Act;
                    ``(B) the term `converted institution' means a 
                State savings association or State savings bank that 
                converted from the mutual form to the stock form after 
                January 26, 1994; and
                    ``(C) the term `converting institution' means a 
                State savings association or a State savings bank that 
                is converted from the mutual form to the stock form 
                after January 26, 1994.''.

SEC. 3. CONVERSIONS BY FEDERAL INSTITUTIONS.

    Section 5(i) of the Home Owners' Loan Act (12 U.S.C. 1864(i)) is 
amended by adding at the end the following new paragraph:
            ``(5) Insider transactions and compensation.--
                    ``(A) In general.--In any conversion, on or after 
                January 26, 1994, of a Federal savings association or a 
                Federal savings bank from the mutual form to the stock 
                form--
                            ``(i) an officer, director, or employee of 
                        the institution that is the subject of the 
                        conversion may purchase or receive, directly or 
                        indirectly, shares of or any other beneficial 
                        interest in that institution only under the 
                        same terms and conditions and only in the same 
                        amounts as are available--
                                    ``(I) to any depositor of the 
                                institution who is not otherwise 
                                affiliated with the institution, if 
                                such officer, director, or employee is 
                                a bona fide depositor of the 
                                institution; or
                                    ``(II) generally to any other 
                                person who is not affiliated with the 
                                institution, if such officer, director, 
                                or employee is not a bona fide 
                                depositor of the institution; and
                            ``(ii) no proposal may be made to the 
                        shareholders of the institution during the 1-
                        year period beginning on the date of conversion 
                        to increase the direct or indirect compensation 
                        of an officer, director, or employee of the 
                        institution in excess of the compensation of 
                        such person prior to the date of the 
                        conversion.
                    ``(B) Aggregate limit on beneficial interests of 
                insiders.--The Director shall, by regulation, establish 
                an appropriate aggregate percentage of and an aggregate 
                dollar limitation on the beneficial interests in any 
                institution that is the subject of a conversion 
                described in subparagraph (A) that may be held, 
                directly or indirectly, by any officer, director, or 
                employee of the institution.''.

SEC. 4. REGULATIONS.

    Not later than 90 days after the date of enactment of this Act, the 
Director of the Office of Thrift Supervision shall promulgate final 
regulations to implement subsections (i)(5) and (j) of section 5 of the 
Home Owners' Loan Act, as amended by this Act.

SEC. 5. STUDY AND REPORT.

    (a) Study.--The Secretary of the Treasury shall conduct a study to 
determine--
            (1) the adequacy of existing Federal law in ensuring equity 
        and fairness in the conversion of savings associations and 
        savings banks from the mutual form to the stock form;
            (2) the accuracy of existing stock appraisal and valuation 
        techniques employed in such conversions; and
            (3) the adequacy of disclosures to depositors and the 
        public concerning such conversions.
    (b) Report.--Not later than 1 year after the date of enactment of 
this Act, the Secretary of the Treasury shall submit to the Congress a 
report of the results of the study conducted under subsection (a).