108TH CONGRESS

2D SESSION H. R. 1375

AN ACT

To provide regulatory relief and improve producother purposes. tivity for insured depository institutions, and for

108TH CONGRESS

2D SESSION H. R. 1375

AN ACT

To provide regulatory relief and improve productivity for

insured depository institutions, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Financial Services Regulatory Relief Act of 2004’’.

4 (b) TABLE OF CONTENTS.—The table of contents for

5 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.

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-ofstate branches.

Sec. 212. Small business and other commercial loans.

Sec. 213. Clarifying citizenship of Federal savings associations for Federal

court jurisdiction.

TITLE III—CREDIT UNION PROVISIONS
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Sec. 301. Privately insured credit unions authorized to become members of a

Federal home loan bank.

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

Sec. 303. Investments in securities by Federal credit unions.

Sec. 304. Increase in general 12-year limitation of term of Federal credit union

loans to 15 years.

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

Sec. 306. Member business loan exclusion for loans to nonprofit religious organizations.

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

membership.

Sec. 308. Voluntary mergers involving multiple common-bond credit unions.

Sec. 309. Conversions involving common-bond credit unions.

Sec. 310. Credit union governance.

Sec. 311. Providing the National Credit Union Administration with greater

flexibility in responding to market conditions.

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

Act.

Sec. 313. Treatment of credit unions as depository institutions under securities

laws.

TITLE IV—DEPOSITORY INSTITUTION PROVISIONS

Sec. 401. Easing restrictions on interstate branching and mergers.

Sec. 402. Statute of limitations for judicial review of appointment of a receiver

for depository institutions.

Sec. 403. Reporting requirements relating to insider lending.

Sec. 404. Amendment to provide an inflation adjustment for the small depository institution exception under the Depository Institution

Management Interlocks Act.

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

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

Sec. 407. Cross guarantee authority.

Sec. 408. Golden parachute authority and nonbank holding companies.

Sec. 409. Amendments relating to change in bank control.

TITLE V—DEPOSITORY INSTITUTION AFFILIATES PROVISIONS

Sec. 501. Clarification of cross marketing provision.

Sec. 502. Amendment to provide the Federal Reserve Board with discretion

concerning the imputation of control of shares of a company

by trustees.

Sec. 503. Eliminating geographic limits on thrift service companies.

Sec. 504. Clarification of scope of applicable rate provision.

TITLE VI—BANKING AGENCY PROVISIONS

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

Sec. 602. Interagency data sharing.

Sec. 603. Penalty for unauthorized participation by convicted individual.
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Sec. 604. Amendment permitting the destruction of old records of a depository

institution by the FDIC after the appointment of the FDIC as

receiver.

Sec. 605. Modernization of recordkeeping requirement.

Sec. 606. Clarification of extent of suspension, removal, and prohibition authority of Federal banking agencies in cases of certain crimes by

institution-affiliated parties.

Sec. 607. Streamlining depository institution merger application requirements.

Sec. 608. Inclusion of Director of the Office of Thrift Supervision in list of

banking agencies regarding insurance customer protection regulations.

Sec. 609. Protection of confidential information received by Federal banking

regulators from foreign banking supervisors.

Sec. 610. Prohibition on participation by convicted individual.

Sec. 611. Clarification that notice after separation from service may be made

by an order.

Sec. 612. Enforcement against misrepresentations regarding FDIC deposit insurance coverage.

Sec. 613. Compensation of Federal home loan bank directors.

Sec. 614. Extension of terms of Federal home loan bank directors.

Sec. 615. Biennial reports on the status of agency employment of minorities

and women.

Sec. 616. Coordination of State examination authority.

TITLE VII— BUSINESS CHECKING FREEDOM

Sec. 701. Short title.

Sec. 702. Interest-bearing transaction accounts authorized for all businesses.

Sec. 703. Interest-bearing transaction accounts authorized.

Sec. 704. Payment of interest on reserves at Federal reserve banks.

Sec. 705. Increased Federal reserve board flexibility in setting reserve requirements.

Sec. 706. Transfer of Federal reserve surpluses.

Sec. 707. Rule of Construction.

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.

1 TITLE I—NATIONAL BANK

2 PROVISIONS

3 SEC. 101. NATIONAL BANK DIRECTORS.

4 Section 5146 of the Revised Statutes of the United

5 States (12 U.S.C. 72) is amended—
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1 (1) by striking ‘‘SEC. 5146. Every director

2 must during’’ and inserting the following:

3 ‘‘SEC. 5146. REQUIREMENTS FOR BANK DIRECTORS.

4 ‘‘(a) RESIDENCY REQUIREMENTS.—Every director of

5 a national bank shall, during’’;

6 (2) by striking ‘‘total number of directors.

7 Every director must own in his or her own right’’

8 and inserting ‘‘total number of directors.

9 ‘‘(b) INVESTMENT REQUIREMENT.—

10 ‘‘(1) IN GENERAL.—Every director of a na11 tional bank shall own, in his or her own right,’’; and

12 (3) by adding at the end the following new

13 paragraph:

14 ‘‘(2) EXCEPTION FOR SUBORDINATED DEBT IN

15 CERTAIN CASES.—In lieu of the requirements of

16 paragraph (1) relating to the ownership of capital

17 stock in the national bank, the Comptroller of the

18 Currency may, by regulation or order, permit an in19 dividual to serve as a director of a national bank

20 that has elected, or notifies the Comptroller of the

21 bank’s intention to elect, to operate as a S corpora22 tion pursuant to section 1362(a) of the Internal

23 Revenue Code of 1986, if that individual holds debt

24 of at least $1,000 issued by the national bank that
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1 is subordinated to the interests of depositors and

2 other general creditors of the national bank.’’.

3 SEC. 102. VOTING IN SHAREHOLDER ELECTIONS.

4 Section 5144 of the Revised Statutes of the United

5 States (12 U.S.C. 61) is amended—

6 (1) by striking ‘‘or to cumulate’’ and inserting

7 ‘‘or, if so provided by the articles of association of

8 the national bank, to cumulate’’;

9 (2) by striking the comma after ‘‘his shares

10 shall equal’’; and

11 (3) by adding at the end the following new sen12 tence: ‘‘The Comptroller of the Currency may pre13 scribe such regulations to carry out the purposes of

14 this section as the Comptroller determines to be ap15 propriate.’’.

16 SEC. 103. SIMPLIFYING DIVIDEND CALCULATIONS FOR NA17 TIONAL BANKS.

18 (a) IN GENERAL.—Section 5199 of the Revised Stat19 utes of the United States (12 U.S.C. 60) is amended to

20 read as follows:

21 ‘‘SEC. 5199. NATIONAL BANK DIVIDENDS.

22 ‘‘(a) IN GENERAL.—Subject to subsection (b), the di23 rectors of any national bank may declare a dividend of

24 so much of the undivided profits of the bank as the direc25 tors judge to be expedient.
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1 ‘‘(b) APPROVAL REQUIRED UNDER CERTAIN CIR2 CUMSTANCES.—A national bank may not declare and pay

3 dividends in any year in excess of an amount equal to the

4 sum of the total of the net income of the bank for that

5 year and the retained net income of the bank in the pre6 ceding two years, minus any transfers required by the

7 Comptroller of the Currency (including any transfers re8 quired to be made to a fund for the retirement of any

9 preferred stock), unless the Comptroller of the Currency

10 approves the declaration and payment of dividends in ex11 cess of such amount.’’.

12 (b) CLERICAL AMENDMENT.—The table of sections

13 for chapter three of title LXII of the Revised Statutes of

14 the United States is amended by striking the item relating

15 to section 5199 and inserting the following new item:

‘‘5199. National bank dividends.’’.

16 SEC. 104. REPEAL OF OBSOLETE LIMITATION ON REMOVAL

17 AUTHORITY OF THE COMPTROLLER OF THE

18 CURRENCY.

19 Section 8(e)(4) of the Federal Deposit Insurance Act

20 (12 U.S.C. 1818(e)(4)) is amended by striking the 5th

21 sentence.

22 SEC. 105. REPEAL OF INTRASTATE BRANCH CAPITAL RE23 QUIREMENTS.

24 Section 5155(c) of the Revised Statutes of the United

25 States (12 U.S.C. 36(c)) is amended—
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1 (1) in the 2nd sentence, by striking ‘‘, without

2 regard to the capital requirements of this section,’’;

3 and

4 (2) by striking the last sentence.

5 SEC. 106. CLARIFICATION OF WAIVER OF PUBLICATION RE6 QUIREMENTS FOR BANK MERGER NOTICES.

7 The last sentence of sections 2(a) and 3(a)(2) of the

8 National Bank Consolidation and Merger Act (12 U.S.C.

9 215(a) and 215a(a)(2), respectively) are each amended by

10 striking ‘‘Publication of notice may be waived, in cases

11 where the Comptroller determines that an emergency ex12 ists justifying such waiver, by unanimous action of the

13 shareholders of the association or State bank’’ and insert14 ing ‘‘Publication of notice may be waived if the Comp15 troller determines that an emergency exists justifying such

16 waiver or if the shareholders of the association or State

17 bank agree by unanimous action to waive the publication

18 requirement for their respective institutions’’.

19 SEC. 107. EQUAL TREATMENT FOR FEDERAL AGENCIES OF

20 FOREIGN BANKS.

21 The 1st sentence of section 4(d) of the International

22 Banking Act of 1978 (12 U.S.C. 3102(d)) is amended by

23 inserting ‘‘from citizens or residents of the United States’’

24 after ‘‘deposits’’.
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1 SEC. 108. MAINTENANCE OF A FEDERAL BRANCH AND A

2 FEDERAL AGENCY IN THE SAME STATE.

3 Section 4(e) of the International Banking Act of

4 1978 (12 U.S.C. 3102(e)) is amended by inserting ‘‘if the

5 maintenance of both an agency and a branch in the State

6 is prohibited under the law of such State’’ before the pe7 riod at the end.

8 SEC. 109. BUSINESS ORGANIZATION FLEXIBILITY FOR NA9 TIONAL BANKS.

10 (a) IN GENERAL.—Chapter one of title LXII of the

11 Revised Statutes of the United States (12 U.S.C. 21 et

12 seq.) is amended by inserting after section 5136B the fol13 lowing new section:

14 ‘‘SEC. 5136C. ALTERNATIVE BUSINESS ORGANIZATION.

15 ‘‘(a) IN GENERAL.—The Comptroller of the Currency

16 may prescribe regulations—

17 ‘‘(1) to permit a national bank to be organized

18 other than as a body corporate; and

19 ‘‘(2) to provide requirements for the organiza20 tional characteristics of a national bank organized

21 and operating other than as a body corporate, con22 sistent with the safety and soundness of the national

23 bank.

24 ‘‘(b) EQUAL TREATMENT.—Except as provided in

25 regulations prescribed under subsection (a), a national

26 bank that is operating other than as a body corporate shall
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1 have the same rights and privileges and shall be subject

2 to the same duties, restrictions, penalties, liabilities, condi3 tions, and limitations as a national bank that is organized

4 as a body corporate.’’.

5 (b) TECHNICAL AND CONFORMING AMENDMENT.—

6 Section 5136 of the Revised Statutes of the United States

7 (12 U.S.C. 24) is amended, in the matter preceding the

8 paragraph designated as the ‘‘First’’, by inserting ‘‘or

9 other form of business organization provided under regula10 tions prescribed by the Comptroller of the Currency under

11 section 5136C’’ after ‘‘a body corporate’’.

12 (c) CLERICAL AMENDMENT.—The table of sections

13 for chapter one of title LXII of the Revised Statutes of

14 the United States (12 U.S.C. 21 et seq.) is amended by

15 inserting after the item relating to section 5136B the fol16 lowing new item:

‘‘5136C. Alternative business organization.’’.

17 SEC. 110. CLARIFICATION OF THE MAIN PLACE OF BUSI18 NESS OF A NATIONAL BANK.

19 Title LXII of the Revised Statutes of the United

20 States is amended—

21 (1) in the paragraph designated the ‘‘Second’’

22 of section 5134 (12 U.S.C. 22), by striking ‘‘The

23 place where its operations of discount and deposit

24 are to be carried on’’ and inserting ‘‘The place
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1 where the main office of the national bank is, or is

2 to be, located’’; and

3 (2) in section 5190 (12 U.S.C. 81), by striking

4 ‘‘the place specified in its organization certificate’’

5 and inserting ‘‘the main office of the national bank’’.

6 TITLE II—SAVINGS ASSOCIATION

7 PROVISIONS

8 SEC. 201. PARITY FOR SAVINGS ASSOCIATIONS UNDER THE

9 SECURITIES EXCHANGE ACT OF 1934 AND

10 THE INVESTMENT ADVISERS ACT OF 1940.

11 (a) SECURITIES EXCHANGE ACT OF 1934.—

12 (1) DEFINITION OF BANK.—Section 3(a)(6) of

13 the Securities Exchange Act of 1934 (15 U.S.C.

14 78c(a)(6)) is amended—

15 (A) in subparagraph (A), by inserting ‘‘or

16 a Federal savings association, as defined in sec17 tion 2(5) of the Home Owners’ Loan Act’’ after

18 ‘‘a banking institution organized under the laws

19 of the United States’’; and

20 (B) in subparagraph (C)—

21 (i) by inserting ‘‘or savings associa22 tion as defined in section 2(4) of the Home

23 Owners’ Loan Act,’’ after ‘‘banking insti24 tution,’’; and
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1 (ii) by inserting ‘‘or savings associa2 tions’’ after ‘‘having supervision over

3 banks’’.

4 (2) INCLUDE OTS UNDER THE DEFINITION OF

5 APPROPRIATE REGULATORY AGENCY FOR CERTAIN

6 PURPOSES.—Section 3(a)(34) of such Act (15

7 U.S.C. 78c(a)(34)) is amended—

8 (A) in subparagraph (A)—

9 (i) in clause (ii), by striking ‘‘(i) or

10 (iii)’’ and inserting ‘‘(i), (iii), or (iv)’’;

11 (ii) by striking ‘‘and’’ at the end of

12 clause (iii);

13 (iii) by redesignating clause (iv) as

14 clause (v); and

15 (iv) by inserting the following new

16 clause after clause (iii):

17 ‘‘(iv) the Director of the Office of

18 Thrift Supervision, in the case of a savings

19 association (as defined in section 3(b) of

20 the Federal Deposit Insurance Act (12

21 U.S.C. 1813(b))) the deposits of which are

22 insured by the Federal Deposit Insurance

23 Corporation, a subsidiary or a department

24 or division of any such savings association,
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1 or a savings and loan holding company;

2 and’’;

3 (B) in subparagraph (B)—

4 (i) in clause (ii), by striking ‘‘(i) or

5 (iii)’’ and inserting ‘‘(i), (iii), or (iv)’’;

6 (ii) by striking ‘‘and’’ at the end of

7 clause (iii);

8 (iii) by redesignating clause (iv) as

9 clause (v); and

10 (iv) by inserting the following new

11 clause after clause (iii):

12 ‘‘(iv) the Director of the Office of

13 Thrift Supervision, in the case of a savings

14 association (as defined in section 3(b) of

15 the Federal Deposit Insurance Act (12

16 U.S.C. 1813(b))) the deposits of which are

17 insured by the Federal Deposit Insurance

18 Corporation, or a subsidiary of any such

19 savings association, or a savings and loan

20 holding company; and’’;

21 (C) in subparagraph (C)—

22 (i) in clause (ii), by striking ‘‘(i) or

23 (iii)’’ and inserting ‘‘(i), (iii), or (iv)’’;

24 (ii) by striking ‘‘and’’ at the end of

25 clause (iii);
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1 (iii) by redesignating clause (iv) as

2 clause (v); and

3 (iv) by inserting the following new

4 clause after clause (iii):

5 ‘‘(iv) the Director of the Office of

6 Thrift Supervision, in the case of a savings

7 association (as defined in section 3(b) of

8 the Federal Deposit Insurance Act (12

9 U.S.C. 1813(b))) the deposits of which are

10 insured by the Federal Deposit Insurance

11 Corporation, a savings and loan holding

12 company, or a subsidiary of a savings and

13 loan holding company when the appro14 priate regulatory agency for such clearing

15 agency is not the Commission; and’’;

16 (D) in subparagraph (D)—

17 (i) by striking ‘‘and’’ at the end of

18 clause (ii);

19 (ii) by redesignating clause (iii) as

20 clause (iv); and

21 (iii) by inserting the following new

22 clause after clause (ii):

23 ‘‘(iii) the Director of the Office of

24 Thrift Supervision, in the case of a savings

25 association (as defined in section 3(b) of
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1 the Federal Deposit Insurance Act (12

2 U.S.C. 1813(b))) the deposits of which are

3 insured by the Federal Deposit Insurance

4 Corporation; and’’;

5 (E) in subparagraph (F)—

6 (i) by redesignating clauses (ii), (iii),

7 and (iv) as clauses (iii), (iv), and (v), re8 spectively; and

9 (ii) by inserting the following new

10 clause after clause (i):

11 ‘‘(ii) the Director of the Office of

12 Thrift Supervision, in the case of a savings

13 association (as defined in section 3(b) of

14 the Federal Deposit Insurance Act (12

15 U.S.C. 1813(b))) the deposits of which are

16 insured by the Federal Deposit Insurance

17 Corporation; and’’;

18 (F) by moving subparagraph (H) and in19 serting such subparagraph after subparagraph

20 (G); and

21 (G) by adding at the end the following new

22 sentence: ‘‘As used in this paragraph, the term

23 ‘savings and loan holding company’ has the

24 meaning given it in section 10(a) of the Home

25 Owners’ Loan Act (12 U.S.C. 1467a(a)).’’.
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1 (b) INVESTMENT ADVISERS ACT OF 1940.—

2 (1) DEFINITION OF BANK.—Section 202(a)(2)

3 of the Investment Advisers Act of 1940 (15 U.S.C.

4 80b–2(a)(2)) is amended—

5 (A) in subparagraph (A) by inserting ‘‘or

6 a Federal savings association, as defined in sec7 tion 2(5) of the Home Owners’ Loan Act’’ after

8 ‘‘a banking institution organized under the laws

9 of the United States’’; and

10 (B) in subparagraph (C)—

11 (i) by inserting ‘‘, savings association

12 as defined in section 2(4) of the Home

13 Owners’ Loan Act,’’ after ‘‘banking insti14 tution’’; and

15 (ii) by inserting ‘‘or savings associa16 tions’’ after ‘‘having supervision over

17 banks’’.

18 (2) CONFORMING AMENDMENTS.—Subsections

19 (a)(1)(A)(i), (a)(1)(B), (a)(2), and (b) of section

20 210A of such Act (15 U.S.C. 80b–10a), as added by

21 section 220 of the Gramm-Leach-Bliley Act, are

22 each amended by striking ‘‘bank holding company’’

23 each place it occurs and inserting ‘‘bank holding

24 company or savings and loan holding company’’.
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1 (c) CONFORMING AMENDMENT TO THE INVESTMENT

2 COMPANY ACT OF 1940.—Section 10(c) of the Investment

3 Company Act of 1940 (15 U.S.C. 80a–10(c)), as amended

4 by section 213(c) of the Gramm-Leach-Bliley Act, is

5 amended by inserting after ‘‘1956)’’ the following: ‘‘or any

6 one savings and loan holding company (together with its

7 affiliates and subsidiaries) (as such terms are defined in

8 section 10 of the Home Owners’ Loan Act)’’.

9 SEC. 202. INVESTMENTS BY FEDERAL SAVINGS ASSOCIA10 TIONS AUTHORIZED TO PROMOTE THE PUB11 LIC WELFARE.

12 (a) IN GENERAL.—Section 5(c)(3) of the Home Own13 ers’ Loan Act (12 U.S.C. 1464(c)) is amended by adding

14 at the end the following new subparagraph:

15 ‘‘(D) DIRECT INVESTMENTS TO PROMOTE

16 THE PUBLIC WELFARE.—

17 ‘‘(i) IN GENERAL.—A Federal savings

18 association may make investments de19 signed primarily to promote the public wel20 fare, including the welfare of low- and

21 moderate-income communities or families

22 through the provision of housing, services,

23 and jobs.

24 ‘‘(ii) DIRECT INVESTMENTS OR ACQUI25 SITION OF INTEREST IN OTHER COMPA-
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1 NIES.—Investments under clause (i) may

2 be made directly or by purchasing interests

3 in an entity primarily engaged in making

4 such investments.

5 ‘‘(iii) PROHIBITION ON UNLIMITED LI6 ABILITY.—No investment may be made

7 under this subparagraph which would sub8 ject a Federal savings association to unlim9 ited liability to any person.

10 ‘‘(iv) SINGLE INVESTMENT LIMITA11 TION TO BE ESTABLISHED BY DIREC12 TOR.—Subject to clauses (v) and (vi), the

13 Director shall establish, by order or regula14 tion, limits on—

15 ‘‘(I) the amount any savings as16 sociation may invest in any 1 project;

17 and

18 ‘‘(II) the aggregate amount of in19 vestment of any savings association

20 under this subparagraph.

21 ‘‘(v) FLEXIBLE AGGREGATE INVEST22 MENT LIMITATION.—The aggregate

23 amount of investments of any savings asso24 ciation under this subparagraph may not

25 exceed an amount equal to the sum of 5
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1 percent of the savings association’s capital

2 stock actually paid in and unimpaired and

3 5 percent of the savings association’s

4 unimpaired surplus, unless—

5 ‘‘(I) the Director determines that

6 the savings association is adequately

7 capitalized; and

8 ‘‘(II) the Director determines, by

9 order, that the aggregate amount of

10 investments in a higher amount than

11 the limit under this clause will pose

12 no significant risk to the affected de13 posit insurance fund.

14 ‘‘(vi) MAXIMUM AGGREGATE INVEST15 MENT LIMITATION.—Notwithstanding

16 clause (v), the aggregate amount of invest17 ments of any savings association under

18 this subparagraph may not exceed an

19 amount equal to the sum of 10 percent of

20 the savings association’s capital stock actu21 ally paid in and unimpaired and 10 per22 cent of the savings association’s

23 unimpaired surplus.

24 ‘‘(vii) INVESTMENTS NOT SUBJECT TO

25 OTHER LIMITATION ON QUALITY OF IN-
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1 VESTMENTS.—No obligation a Federal sav2 ings association acquires or retains under

3 this subparagraph shall be taken into ac4 count for purposes of the limitation con5 tained in section 28(d) of the Federal De6 posit Insurance Act on the acquisition and

7 retention of any corporate debt security

8 not of investment grade.’’.

9 (b) TECHNICAL AND CONFORMING AMENDMENT.—

10 Section 5(c)(3)(A) of the Home Owners’ Loan Act (12

11 U.S.C. 1464(c)(3)(A)) is amended to read as follows:

12 ‘‘(A) [Repealed.]’’.

13 SEC. 203. MERGERS AND CONSOLIDATIONS OF FEDERAL

14 SAVINGS ASSOCIATIONS WITH NONDEPOSI15 TORY INSTITUTION AFFILIATES.

16 Section 5(d)(3) of the Home Owners’ Loan Act (12

17 U.S.C. 1464(d)(3)) is amended—

18 (1) by redesignating subparagraph (B) as sub19 paragraph (C); and

20 (2) by inserting after subparagraph (A) the fol21 lowing new subparagraph:

22 ‘‘(B) MERGERS AND CONSOLIDATIONS

23 WITH NONDEPOSITORY INSTITUTION AFFILI24 ATES.—
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1 ‘‘(i) IN GENERAL.—Upon the approval

2 of the Director, a Federal savings associa3 tion may merge with any nondepository in4 stitution affiliate of the savings associa5 tion.

6 ‘‘(ii) RULE OF CONSTRUCTION.—No

7 provision of clause (i) shall be construed

8 as—

9 ‘‘(I) affecting the applicability of

10 section 18(c) of the Federal Deposit

11 Insurance Act; or

12 ‘‘(II) granting a Federal savings

13 association any power or any author14 ity to engage in any activity that is

15 not authorized for a Federal savings

16 association under any other provision

17 of this Act or any other provision of

18 law.’’.

19 SEC. 204. REPEAL OF STATUTORY DIVIDEND NOTICE RE20 QUIREMENT FOR SAVINGS ASSOCIATION SUB21 SIDIARIES OF SAVINGS AND LOAN HOLDING

22 COMPANIES.

23 Section 10(f) of the Home Owners’ Loan Act (12

24 U.S.C. 1467a(f)) is amended to read as follows:
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1 ‘‘(f) DECLARATION OF DIVIDEND.—The Director

2 may—

3 ‘‘(1) require a savings association that is a sub4 sidiary of a savings and loan holding company to

5 give prior notice to the Director of the intent of the

6 savings association to pay a dividend on its guar7 anty, permanent, or other nonwithdrawable stock;

8 and

9 ‘‘(2) establish conditions on the payment of

10 dividends by such a savings association.’’.

11 SEC. 205. MODERNIZING STATUTORY AUTHORITY FOR

12 TRUST OWNERSHIP OF SAVINGS ASSOCIA13 TIONS.

14 (a) IN GENERAL.—Section 10(a)(1)(C) of the Home

15 Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(C)) is

16 amended—

17 (1) by striking ‘‘trust,’’ and inserting ‘‘business

18 trust,’’; and

19 (2) by inserting ‘‘or any other trust unless by

20 its terms it must terminate within 25 years or not

21 later than 21 years and 10 months after the death

22 of individuals living on the effective date of the

23 trust,’’ after ‘‘or similar organization,’’.
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1 (b) TECHNICAL AND CONFORMING AMENDMENT.—

2 Section 10(a)(3) of the Home Owners’ Loan Act (12

3 U.S.C. 1467a(a)(3)) is amended—

4 (1) by striking ‘‘does not include—’’ and all

5 that follows through ‘‘any company by virtue’’ where

6 such term appears in subparagraph (A) and insert7 ing ‘‘does not include any company by virtue’’;

8 (2) by striking ‘‘; and’’ at the end of subpara9 graph (A) and inserting a period; and

10 (3) by striking subparagraph (B).

11 SEC. 206. REPEAL OF OVERLAPPING RULES GOVERNING

12 PURCHASED MORTGAGE SERVICING RIGHTS.

13 Section 5(t) of the Home Owners’ Loan Act (12

14 U.S.C. 1464(t)) is amended—

15 (1) by striking paragraph (4) and inserting the

16 following new paragraph:

17 ‘‘(4) [Repealed.]’’; and

18 (2) in paragraph (9)(A), by striking ‘‘intangible

19 assets, plus’’ and all that follows through the period

20 at the end and inserting ‘‘intangible assets.’’.
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1 SEC. 207. RESTATEMENT OF AUTHORITY FOR FEDERAL

2 SAVINGS ASSOCIATIONS TO INVEST IN SMALL

3 BUSINESS INVESTMENT COMPANIES.

4 Subparagraph (D) of section 5(c)(4) of the Home

5 Owners’ Loan Act (12 U.S.C. 1464(c)(4)) is amended to

6 read as follows:

7 ‘‘(D) SMALL BUSINESS INVESTMENT COM8 PANIES.—Any Federal savings association may

9 invest in 1 or more small business investment

10 companies, or in any entity established to invest

11 solely in small business investment companies

12 formed under the Small Business Investment

13 Act of 1958, except that the total amount of in14 vestments under this subparagraph may not at

15 any time exceed the amount equal to 5 percent

16 of capital and surplus of the savings associa17 tion.’’.

18 SEC. 208. REMOVAL OF LIMITATION ON INVESTMENTS IN

19 AUTO LOANS.

20 (a) IN GENERAL.—Section 5(c)(1) of the Home Own21 ers’ Loan Act (12 U.S.C. 1464(c)(1)) is amended by add22 ing at the end the following new subparagraph:

23 ‘‘(V) AUTO LOANS.—Loans and leases for

24 motor vehicles acquired for personal, family, or

25 household purposes.’’.
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1 (b) TECHNICAL AND CONFORMING AMENDMENT RE2 LATING TO QUALIFIED THRIFT INVESTMENTS.—Section

3 10(m)(4)(C)(ii) of the Home Owners’ Loan Act (12

4 U.S.C. 1467a(m)(4)(C)(ii)) is amended by adding at the

5 end the following new subclause:

6 ‘‘(VIII) Loans and leases for

7 motor vehicles acquired for personal,

8 family, or household purposes.’’.

9 SEC. 209. SELLING AND OFFERING OF DEPOSIT PRODUCTS.

10 Section 15(h) of the Securities Exchange Act of

11 1934 (15 U.S.C. 78o(h)) is amended by adding at

12 the end the following new paragraph:

13 ‘‘(4) SELLING AND OFFERING OF DEPOSIT

14 PRODUCTS.—No law, rule, regulation, or order, or

15 other administrative action of any State or political

16 subdivision thereof shall directly or indirectly require

17 any individual who is an agent of 1 Federal savings

18 association (as such term is defined in section 2(5)

19 of the Home Owners’ Loan Act (12 U.S.C. 1462(5))

20 in selling or offering deposit (as such term is defined

21 in section 3 of the Federal Deposit Insurance Act

22 (12 U.S.C. 1813(l)) products issued by such associa23 tion to qualify or register as a broker, dealer, associ24 ated person of a broker, or associated person of a
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1 dealer, or to qualify or register in any other similar

2 status or capacity, if the individual does not—

3 ‘‘(A) accept deposits or make withdrawals

4 on behalf of any customer of the association;

5 ‘‘(B) offer or sell a deposit product as an

6 agent for another entity that is not subject to

7 supervision and examination by a Federal bank8 ing agency (as defined in section 3(z) of the

9 Federal Deposit Insurance Act (12 U.S.C.

10 1813(z)), the National Credit Union Adminis11 tration, or any officer, agency, or other entity

12 of any State which has primary regulatory au13 thority over State banks, State savings associa14 tions, or State credit unions;

15 ‘‘(C) offer or sell a deposit product that is

16 not an insured deposit (as defined in section

17 3(m) of the Federal Deposit Insurance Act (12

18 U.S.C. 1813(m)));

19 ‘‘(D) offer or sell a deposit product which

20 contains a feature that makes it callable at the

21 option of such Federal savings association; or

22 ‘‘(E) create a secondary market with re23 spect to a deposit product or otherwise add en24 hancements or features to such product inde25 pendent of those offered by the association.’’.
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1 SEC. 210. FUNERAL- AND CEMETERY-RELATED FIDUCIARY

2 SERVICES.

3 Section 5(n) of the Home Owners’ Loan Act (12

4 U.S.C. 1464(n)) is amended by adding at the end the fol5 lowing new paragraph:

6 ‘‘(11) FUNERAL- AND CEMETERY-RELATED FI7 DUCIARY SERVICES.—

8 ‘‘(A) IN GENERAL.—A funeral director or

9 cemetery operator, when acting in such capac10 ity, (or any other person in connection with a

11 contract or other agreement with a funeral di12 rector or cemetery operator) may engage any

13 Federal savings association, regardless of where

14 the association is located, to act in any fidu15 ciary capacity in which the savings association

16 has the right to act in accordance with this sec17 tion, including holding funds deposited in trust

18 or escrow by the funeral director or cemetery

19 operator (or by such other party), and the sav20 ings association may act in such fiduciary ca21 pacity on behalf of the funeral director or ceme22 tery operator (or such other person).

23 ‘‘(B) DEFINITIONS.—For purposes of this

24 paragraph, the following definitions shall apply:

25 ‘‘(i) CEMETERY.—The term ‘ceme26 tery’ means any land or structure used, or
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1 intended to be used, for the interment of

2 human remains in any form.

3 ‘‘(ii) CEMETERY OPERATOR.—The

4 term ‘cemetery operator’ means any person

5 who contracts or accepts payment for mer6 chandise, endowment, or perpetual care

7 services in connection with a cemetery.

8 ‘‘(iii) FUNERAL DIRECTOR.—The term

9 ‘funeral director’ means any person who

10 contracts or accepts payment to provide or

11 arrange—

12 ‘‘(I) services for the final disposi13 tion of human remains; or

14 ‘‘(II) funeral services, property,

15 or merchandise (including cemetery

16 services, property, or merchandise).’’.

17 SEC. 211. REPEAL OF QUALIFIED THRIFT LENDER RE18 QUIREMENT WITH RESPECT TO OUT-OF19 STATE BRANCHES.

20 Section 5(r)(1) of the Home Owners’ Loan Act (12

21 U.S.C. 1464(r)(1)) is amended by striking the last sen22 tence.
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1 SEC. 212. SMALL BUSINESS AND OTHER COMMERCIAL

2 LOANS.

3 (a) ELIMINATION OF LENDING LIMIT ON SMALL

4 BUSINESS LOANS.—Section 5(c)(1) of the Home Owners’

5 Loan Act (12 U.S.C. 1464(c)(1)) is amended by inserting

6 after subparagraph (V) (as added by section 208 of this

7 title) the following new subparagraph:

8 ‘‘(W) SMALL BUSINESS LOANS.—Small

9 business loans, as defined in regulations which

10 the Director shall prescribe.’’.

11 (b) INCREASE IN LENDING LIMIT ON OTHER BUSI12 NESS LOANS.—Section 5(c)(2)(A) of the Home Owners’

13 Loan Act (12 U.S.C. 1464(c)(2)(A)) is amended by strik14 ing ‘‘, and amounts in excess of 10 percent’’ and all that

15 follows through ‘‘by the Director’’.

16 SEC. 213. CLARIFYING CITIZENSHIP OF FEDERAL SAVINGS

17 ASSOCIATIONS FOR FEDERAL COURT JURIS18 DICTION.

19 Section 5 of the Home Owners’ Loan Act (12 U.S.C.

20 1464) is amended by adding at the end the following new

21 subsection:

22 ‘‘(x) HOME STATE CITIZENSHIP.—In determining

23 whether a Federal court has diversity jurisdiction over a

24 case in which a Federal savings association is a party, the

25 Federal savings association shall be considered to be a cit-
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1 izen only of the State in which such savings association

2 has its home office.’’.

3 TITLE III—CREDIT UNION

4 PROVISIONS

5 SEC. 301. PRIVATELY INSURED CREDIT UNIONS AUTHOR6 IZED TO BECOME MEMBERS OF A FEDERAL

7 HOME LOAN BANK.

8 (a) IN GENERAL.—Section 4(a) of the Federal Home

9 Loan Bank Act (12 U.S.C. 1424(a)) is amended by adding

10 at the end the following new paragraph:

11 ‘‘(5) CERTAIN PRIVATELY INSURED CREDIT

12 UNIONS.—

13 ‘‘(A) IN GENERAL.—A credit union which

14 has been determined, in accordance with section

15 43(e)(1) of the Federal Deposit Insurance Act

16 and subject to the requirements of subpara17 graph (B), to meet all eligibility requirements

18 for Federal deposit insurance shall be treated

19 as an insured depository institution for pur20 poses of determining the eligibility of such cred21 it union for membership in a Federal home loan

22 bank under paragraphs (1), (2), and (3).

23 ‘‘(B) CERTIFICATION BY APPROPRIATE SU24 PERVISOR.—
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1 ‘‘(i) IN GENERAL.—For purposes of

2 this paragraph and subject to clause (ii), a

3 credit union which lacks Federal deposit

4 insurance and which has applied for mem5 bership in a Federal home loan bank may

6 be treated as meeting all the eligibility re7 quirements for Federal deposit insurance

8 only if the appropriate supervisor of the

9 State in which the credit union is char10 tered has determined that the credit union

11 meets all the eligibility requirements for

12 Federal deposit insurance as of the date of

13 the application for membership.

14 ‘‘(ii) CERTIFICATION DEEMED

15 VALID.—If, in the case of any credit union

16 to which clause (i) applies, the appropriate

17 supervisor of the State in which such cred18 it union is chartered fails to make a deter19 mination pursuant to such clause by the

20 end of the 6-month period beginning on

21 the date of the application, the credit

22 union shall be deemed to have met the re23 quirements of clause (i).

24 ‘‘(C) SECURITY INTERESTS OF FEDERAL

25 HOME LOAN BANK NOT AVOIDABLE.—Notwith-
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1 standing any provision of State law authorizing

2 a conservator or liquidating agent of a credit

3 union to repudiate contracts, no such provision

4 shall apply with respect to—

5 ‘‘(i) any extension of credit from any

6 Federal home loan bank to any credit

7 union which is a member of any such bank

8 pursuant to this paragraph; or

9 ‘‘(ii) any security interest in the as10 sets of such credit union securing any such

11 extension of credit.’’.

12 (b) COPIES OF AUDITS OF PRIVATE INSURERS OF

13 CERTAIN DEPOSITORY INSTITUTIONS REQUIRED TO BE

14 PROVIDED TO SUPERVISORY AGENCIES.—Section

15 43(a)(2) of the Federal Deposit Insurance Act (12 U.S.C.

16 1831t(a)(2)) is amended—

17 (1) by striking ‘‘and’’ at the end of subpara18 graph (A)(i);

19 (2) by striking the period at the end of clause

20 (ii) of subparagraph (A) and inserting a semicolon;

21 (3) by inserting the following new clauses at the

22 end of subparagraph (A):

23 ‘‘(iii) in the case of depository institu24 tions described in subsection (f)(2)(A) the

25 deposits of which are insured by the pri-
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1 vate insurer, the National Credit Union

2 Administration, not later than 7 days after

3 that audit is completed; and

4 ‘‘(iv) in the case of depository institu5 tions described in subsection (f)(2)(A) the

6 deposits of which are insured by the pri7 vate insurer which are members of a Fed8 eral home loan bank, the Federal Housing

9 Finance Board, not later than 7 days after

10 that audit is completed.’’; and

11 (4) by adding at the end the following new sub12 paragraph:

13 ‘‘(C) CONSULTATION.—The appropriate

14 supervisory agency of each State in which a pri15 vate deposit insurer insures deposits in an insti16 tution described in subsection (f)(2)(A) which—

17 ‘‘(i) lacks Federal deposit insurance;

18 and

19 ‘‘(ii) has become a member of a Fed20 eral home loan bank,

21 shall provide the National Credit Union Admin22 istration, upon request, with the results of any

23 examination and reports related thereto con24 cerning the private deposit insurer to which

25 such agency may have in its possession.’’.
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1 SEC. 302. LEASES OF LAND ON FEDERAL FACILITIES FOR

2 CREDIT UNIONS.

3 (a) IN GENERAL.—Section 124 of the Federal Credit

4 Union Act (12 U.S.C. 1770) is amended—

5 (1) by striking ‘‘Upon application by any credit

6 union’’ and inserting ‘‘Notwithstanding any other

7 provision of law, upon application by any credit

8 union’’;

9 (2) by inserting ‘‘on lands reserved for the use

10 of, and under the exclusive or concurrent jurisdiction

11 of, the United States or’’ after ‘‘officer or agency of

12 the United States charged with the allotment of

13 space’’;

14 (3) by inserting ‘‘lease land or’’ after ‘‘such of15 ficer or agency may in his or its discretion’’; and

16 (4) by inserting ‘‘or the facility built on the

17 lease land’’ after ‘‘credit union to be served by the

18 allotment of space’’.

19 (b) CLERICAL AMENDMENT.—The heading for sec20 tion 124 is amended by inserting ‘‘OR FEDERAL LAND’’

21 after ‘‘BUILDINGS’’.

22 SEC. 303. INVESTMENTS IN SECURITIES BY FEDERAL CRED23 IT UNIONS.

24 Section 107 of the Federal Credit Union Act (12

25 U.S.C. 1757) is amended—
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1 (1) in the matter preceding paragraph (1) by

2 striking ‘‘A Federal credit union’’ and inserting ‘‘(a)

3 IN GENERAL.—Any Federal credit union’’; and

4 (2) by adding at the end the following new sub5 section:

6 ‘‘(b) ADDITIONAL INVESTMENT AUTHORITY.—

7 ‘‘(1) IN GENERAL.—In adition to any invest8 ments otherwise authorized, a Federal credit union

9 may purchase and hold for its own account such in10 vestment securities of investment grade as the

11 Board may authorize by regulation, subject to such

12 limitations and restrictions as the Board may pre13 scribe in the regulations.

14 ‘‘(2) PERCENTAGE LIMITATIONS.—

15 ‘‘(A) SINGLE OBLIGOR.—In no event may

16 the total amount of investment securities of any

17 single obligor or maker held by a Federal credit

18 union for the credit union’s own account exceed

19 at any time an amount equal to 10 percent of

20 the net worth of the credit union.

21 ‘‘(B) AGGREGATE INVESTMENTS.—In no

22 event may the aggregate amount of investment

23 securities held by a Federal credit union for the

24 credit union’s own account exceed at any time
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1 an amount equal to 10 percent of the assets of

2 the credit union.

3 ‘‘(3) INVESTMENT SECURITY DEFINED.—

4 ‘‘(A) IN GENERAL.—For purposes of this

5 subsection, the term ‘investment security’

6 means marketable obligations evidencing the in7 debtedness of any person in the form of bonds,

8 notes, or debentures and other instruments

9 commonly referred to as investment securities.

10 ‘‘(B) FURTHER DEFINITION BY BOARD.—

11 The Board may further define the term ‘invest12 ment security’.

13 ‘‘(4) INVESTMENT GRADE DEFINED.—The term

14 ‘investment grade’ means with respect to an invest15 ment security purchased by a credit union for its

16 own account, an investment security that at the time

17 of such purchase is rated in one of the 4 highest rat18 ing categories by at least 1 nationally recognized

19 statistical rating organization.

20 ‘‘(5) CLARIFICATION OF PROHIBITION ON

21 STOCK OWNERSHIP.—No provision of this subsection

22 shall be construed as authorizing a Federal credit

23 union to purchase shares of stock of any corporation

24 for the credit union’s own account, except as other25 wise permitted by law.’’.
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1 SEC. 304. INCREASE IN GENERAL 12-YEAR LIMITATION OF

2 TERM OF FEDERAL CREDIT UNION LOANS TO

3 15 YEARS.

4 Section 107(a)(5) of the Federal Credit Union Act

5 (12 U.S.C. 1757(5)) (as so designated by section 303 of

6 this title) is amended—

7 (1) in the matter preceding subparagraph (A),

8 by striking ‘‘to make loans, the maturities of which

9 shall not exceed twelve years except as otherwise

10 provided herein’’ and inserting ‘‘to make loans, the

11 maturities of which shall not exceed 15 years or any

12 longer maturity as the Board may allow, in regula13 tions, except as otherwise provided in this Act’’;

14 (2) in subparagraph (A)—

15 (A) by striking clause (ii);

16 (B) by redesignating clauses (iii) through

17 (x) as clauses (ii) through (ix), respectively; and

18 (C) by inserting ‘‘and’’ after the semicolon

19 at the end of clause (viii) (as so redesignated).

20 SEC. 305. INCREASE IN 1 PERCENT INVESTMENT LIMIT IN

21 CREDIT UNION SERVICE ORGANIZATIONS.

22 Section 107(a)(7)(I) of the Federal Credit Union Act

23 (12 U.S.C. 1757(7)(I)) (as so designated by section 303

24 of this title) is amended by striking ‘‘up to 1 per centum

25 of the total paid’’ and inserting ‘‘up to 3 percent of the

26 total paid’’.
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1 SEC. 306. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS

2 TO NONPROFIT RELIGIOUS ORGANIZATIONS.

3 Section 107A(a) of the Federal Credit Union Act (12

4 U.S.C. 1757a(a)) is amended by inserting ‘‘, excluding

5 loans made to nonprofit religious organizations,’’ after

6 ‘‘total amount of such loans’’.

7 SEC. 307. CHECK CASHING AND MONEY TRANSFER SERV8 ICES OFFERED WITHIN THE FIELD OF MEM9 BERSHIP.

10 Paragraph (12) of section 107(a) of the Federal

11 Credit Union Act (12 U.S.C. 1757(12)) (as so designated

12 by section 303 of this title) is amended to read as follows:

13 ‘‘(12) in accordance with regulations prescribed

14 by the Board—

15 ‘‘(A) to sell, to persons in the field of

16 membership, negotiable checks (including trav17 elers checks), money orders, and other similar

18 money transfer instruments (including elec19 tronic fund transfers); and

20 ‘‘(B) to cash checks and money orders and

21 receive electronic fund transfers for persons in

22 the field of membership for a fee;’’.

23 SEC. 308. VOLUNTARY MERGERS INVOLVING MULTIPLE

24 COMMON-BOND CREDIT UNIONS.

25 Section 109(d)(2) of the Federal Credit Union Act

26 (12 U.S.C. 1759(d)(2)) is amended—
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1 (1) by striking ‘‘or’’ at the end of clause (ii) of

2 subparagraph (B);

3 (2) by striking the period at the end of sub4 paragraph (C) and inserting ‘‘; or’’; and

5 (3) by adding at the end the following new sub6 paragraph:

7 ‘‘(D) a merger involving any such Federal

8 credit union approved by the Board on or after

9 August 7, 1998.’’.

10 SEC. 309. CONVERSIONS INVOLVING COMMON-BOND CRED11 IT UNIONS.

12 Section 109(g) of the Federal Credit Union Act (12

13 U.S.C. 1759(g)) is amended by inserting after paragraph

14 (2) the following new paragraph:

15 ‘‘(3) CRITERIA FOR CONTINUED MEMBERSHIP

16 OF CERTAIN MEMBER GROUPS IN COMMUNITY CHAR17 TER CONVERSIONS.—In the case of a voluntary con18 version of a common-bond credit union described in

19 paragraph (1) or (2) of subsection (b) into a com20 munity credit union described in subsection (b)(3),

21 the Board shall prescribe, by regulation, the criteria

22 under which the Board may determine that a mem23 ber group or other portion of a credit union’s exist24 ing membership, that is located outside the well-de25 fined local community, neighborhood, or rural dis-
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1 trict that shall constitute the community charter,

2 can be satisfactorily served by the credit union and

3 remain within the community credit union’s field of

4 membership.’’.

5 SEC. 310. CREDIT UNION GOVERNANCE.

6 (a) EXPULSION OF MEMBERS FOR JUST CAUSE.—

7 Subsection (b) of section 118 of the Federal Credit Union

8 Act (12 U.S.C. 1764(b)) is amended to read as follows:

9 ‘‘(b) POLICY AND ACTIONS OF BOARDS OF DIREC10 TORS OF FEDERAL CREDIT UNIONS.—

11 ‘‘(1) EXPULSION OF MEMBERS FOR NON12 PARTICIPATION OR FOR JUST CAUSE.—The board of

13 directors of a Federal credit union may, by majority

14 vote of a quorum of directors, adopt and enforce a

15 policy with respect to expulsion from membership,

16 by a majority vote of such board of directors, based

17 on just cause, including disruption of credit union

18 operations, or on nonparticipation by a member in

19 the affairs of the credit union.

20 ‘‘(2) WRITTEN NOTICE OF POLICY TO MEM21 BERS.—If a policy described in paragraph (1) is

22 adopted, written notice of the policy as adopted and

23 the effective date of such policy shall be provided

24 to—
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1 ‘‘(A) each existing member of the credit

2 union not less than 30 days prior to the effec3 tive date of such policy; and

4 ‘‘(B) each new member prior to or upon

5 applying for membership.’’.

6 (b) TERM LIMITS AUTHORIZED FOR BOARD MEM7 BERS OF FEDERAL CREDIT UNIONS.—Section 111(a) of

8 the Federal Credit Union Act (12 U.S.C. 1761(a)) is

9 amended by adding at the end the following new sentence:

10 ‘‘The bylaws of a Federal credit union may limit the num11 ber of consecutive terms any person may serve on the

12 board of directors of such credit union.’’.

13 (c) REIMBURSEMENT FOR LOST WAGES DUE TO

14 SERVICE ON CREDIT UNION BOARD NOT TREATED AS

15 COMPENSATION.—Section 111(c) of the Federal Credit

16 Union Act (12 U.S.C. 1761(c)) is amended by inserting

17 ‘‘, including lost wages,’’ after ‘‘the reimbursement of rea18 sonable expenses’’.

19 SEC. 311. PROVIDING THE NATIONAL CREDIT UNION AD20 MINISTRATION WITH GREATER FLEXIBILITY

21 IN RESPONDING TO MARKET CONDITIONS.

22 Section 107(a)(5)(A)(vi)(I) of the Federal Credit

23 Union Act (12 U.S.C. 1757(5)(A)(vi)(I)) (as so designated

24 by section 303 of this title) is amended by striking ‘‘six25 month period and that prevailing interest rate levels’’ and
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1 inserting ‘‘6-month period or that prevailing interest rate

2 levels’’.

3 SEC. 312. EXEMPTION FROM PRE-MERGER NOTIFICATION

4 REQUIREMENT OF THE CLAYTON ACT.

5 Section 7A(c)(7) of the Clayton Act (15 U.S.C.

6 18a(c)(7)) is amended by inserting ‘‘section 205(b)(3) of

7 the Federal Credit Union Act (12 U.S.C. 1785(b)(3)),’’

8 before ‘‘or section 3’’.

9 SEC. 313. TREATMENT OF CREDIT UNIONS AS DEPOSITORY

10 INSTITUTIONS UNDER SECURITIES LAWS.

11 (a) DEFINITION OF BANK UNDER THE SECURITIES

12 EXCHANGE ACT OF 1934.—Section 3(a)(6) of the Securi13 ties Exchange Act of 1934 (15 U.S.C. 78c(a)(6)) (as

14 amended by section 201(a)(1) of this Act) is amended—

15 (1) by striking ‘‘this title, and (D) a receiver’’

16 and inserting ‘‘this title, (D) an insured credit union

17 (as defined in section 101(7) of the Federal Credit

18 Union Act) but only for purposes of paragraphs (4)

19 and (5) of this subsection and only for activities oth20 erwise authorized by applicable laws to which such

21 credit unions are subject, and (E) a receiver’’; and

22 (2) in subparagraph (E) (as so redesignated by

23 paragraph (1) of this subsection) by striking ‘‘(A),

24 (B), or (C)’’ and inserting ‘‘(A), (B), (C), or (D)’’.
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1 (b) DEFINITION OF BANK UNDER THE INVESTMENT

2 ADVISERS ACT OF 1940.—Section 202(a)(2) of the In3 vestment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(2))

4 (as amended by section 201(b)(1) of this Act) is

5 amended—

6 (1) by striking ‘‘this title, and (D) a receiver’’

7 and inserting ‘‘this title, (D) an insured credit union

8 (as defined in section 101(7) of the Federal Credit

9 Union Act) but only for activities otherwise author10 ized by applicable laws to which such credit unions

11 are subject, and (E) a receiver’’; and

12 (2) in subparagraph (E) (as so redesignated by

13 paragraph (1) of this subsection) by striking ‘‘(A),

14 (B), or (C)’’ and inserting ‘‘(A), (B), (C), or (D)’’.

15 (c) DEFINITION OF APPROPRIATE FEDERAL BANK16 ING AGENCY.—Section 210A(c) of the Investment Advis17 ers Act of 1940 (15 U.S.C. 80b–10a(c)) is amended by

18 inserting ‘‘and includes the National Credit Union Admin19 istration Board, in the case of an insured credit union (as

20 defined in section 101(7) of the Federal Credit Union

21 Act)’’ before the period at the end.
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1 TITLE IV—DEPOSITORY

2 INSTITUTION PROVISIONS

3 SEC. 401. EASING RESTRICTIONS ON INTERSTATE BRANCH4 ING AND MERGERS.

5 (a) DE NOVO INTERSTATE BRANCHES OF NATIONAL

6 BANKS.—

7 (1) IN GENERAL.—Section 5155(g)(1) of the

8 Revised Statutes of the United States (12 U.S.C.

9 36(g)(1)) is amended by striking ‘‘maintain a

10 branch if—’’ and all that follows through the end of

11 subparagraph (B) and inserting ‘‘maintain a

12 branch.’’.

13 (2) CLERICAL AMENDMENT.—The heading for

14 subsection (g) of section 5155 of the Revised Stat15 utes of the United States is amended by striking

16 ‘‘STATE ‘OPT-IN’ ELECTION TO PERMIT’’.

17 (b) DE NOVO INTERSTATE BRANCHES OF STATE

18 NONMEMBER BANKS.—

19 (1) IN GENERAL.—Section 18(d)(4)(A) of the

20 Federal Deposit Insurance Act (12 U.S.C.

21 1828(d)(4)(A)) is amended by striking ‘‘maintain a

22 branch if—’’ and all that follows through the end of

23 clause (ii) and inserting ‘‘maintain a branch.’’.

24 (2) INTERSTATE BRANCHING BY SUBSIDIARIES

25 OF COMMERCIAL FIRMS PROHIBITED.—Section
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1 18(d)(3)) of the Federal Deposit Insurance Act (12

2 U.S.C. 1828(d)(3)) is amended by adding at the end

3 the following new subparagraph:

4 ‘‘(C) INTERSTATE BRANCHING BY SUBSIDI5 ARIES OF COMMERCIAL FIRMS PROHIBITED.—

6 ‘‘(i) IN GENERAL.—If the appropriate

7 State bank supervisor of the home State of

8 any industrial loan company, industrial

9 bank, or other institution described in sec10 tion 2(c)(2)(H) of the Bank Holding Com11 pany Act of 1956, or the appropriate State

12 bank supervisor of any host State with re13 spect to such company, bank, or institu14 tion, determines that such company, bank,

15 or institution is controlled, directly or indi16 rectly, by a commercial firm, such com17 pany, bank, or institution may not acquire,

18 establish, or operate a branch in such host

19 State.

20 ‘‘(ii) COMMERCIAL FIRM DEFINED.—

21 For purposes of this subsection, the term

22 ‘commercial firm’ means any entity at least

23 15 percent of the annual gross revenues of

24 which on a consolidated basis, including all

25 affiliates of the entity, were derived from
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1 engaging, on an on-going basis, in activi2 ties that are not financial in nature or inci3 dental to a financial activity during at

4 least 3 of the prior 4 calendar quarters.

5 ‘‘(iii) GRANDFATHERED INSTITU6 TIONS.—Clause (i) shall not apply with re7 spect to any industrial loan company, in8 dustrial bank, or other institution de9 scribed in section 2(c)(2)(H) of the Bank

10 Holding Company Act of 1956—

11 ‘‘(I) which became an insured de12 pository institution before October 1,

13 2003 or pursuant to an application

14 for deposit insurance which was ap15 proved by the Corporation before such

16 date; and

17 ‘‘(II) with respect to which there

18 is no change in control, directly or in19 directly, of the company, bank, or in20 stitution after September 30, 2003,

21 that requires an application under

22 subsection (c), section 7(j), section 3

23 of the Bank Holding Company Act of

24 1956, or section 10 of the Home

25 Owners’ Loan Act.
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1 ‘‘(iv) TRANSITION PROVISION.—Any

2 divestiture required under this subpara3 graph of a branch in a host State shall be

4 completed as quickly as is reasonably pos5 sible.

6 ‘‘(v) CORPORATE REORGANIZATIONS

7 PERMITTED.—The acquisition of direct or

8 indirect control of the company, bank, or

9 institution referred to in clause (iii)(II)

10 shall not be treated as a ‘change in con11 trol’ for purposes of such clause if the

12 company acquiring control is itself directly

13 or indirectly controlled by a company that

14 was an affiliate of such company, bank, or

15 institution on the date referred to in clause

16 (iii)(II), and remained an affiliate at all

17 times after such date.’’.

18 (3) TECHNICAL AND CONFORMING AMEND19 MENTS.—Section 18(d)(4) of the Federal Deposit

20 Insurance Act (12 U.S.C. 1828(d)(4)) is amended—

21 (A) in subparagraph (A) by striking ‘‘Sub22 ject to subparagraph (B)’’ and inserting ‘‘Sub23 ject to subparagraph (B) and paragraph

24 (3)(C)’’; and
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•HR 1375 EH

1 (B) in subparagraphs (D) and (E), by

2 striking ‘‘The term’’ and inserting ‘‘For pur3 poses of this subsection, the term’’.

4 (4) CLERICAL AMENDMENT.—The heading for

5 paragraph (4) of section 18(d) of the Federal De6 posit Insurance Act is amended by striking ‘‘STATE

7 ‘OPT-IN’ ELECTION TO PERMIT INTERSTATE’’ and in8 serting ‘‘INTERSTATE’’.

9 (c) DE NOVO INTERSTATE BRANCHES OF STATE

10 MEMBER BANKS.—The 3rd undesignated paragraph of

11 section 9 of the Federal Reserve Act (12 U.S.C. 321) is

12 amended by adding at the end the following new sen13 tences: ‘‘A State member bank may establish and operate

14 a de novo branch in a host State (as such terms are de15 fined in section 18(d) of the Federal Deposit Insurance

16 Act) on the same terms and conditions and subject to the

17 same limitations and restrictions as are applicable to the

18 establishment of a de novo branch of a national bank in

19 a host State under section 5155(g) of the Revised Statutes

20 of the United States or are applicable to an insured State

21 nonmember bank under section 18(d)(3) of the Federal

22 Deposit Insurance Act’’ after ‘‘Revised Statutes of the

23 United States’’. Such section 5155(g) shall be applied for

24 purposes of the preceding sentence by substituting ‘Board

25 of Governors of the Federal Reserve System’ for ‘Comp-
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•HR 1375 EH

1 troller of the Currency’ and ‘State member bank’ for ‘na2 tional bank’.’’.

3 (d) INTERSTATE MERGER OF BANKS.—

4 (1) MERGER OF INSURED BANK WITH ANOTHER

5 DEPOSITORY INSTITUTION OR TRUST COMPANY.—

6 Section 44(a)(1) of the Federal Deposit Insurance

7 Act (12 U.S.C. 1831u(a)(1)) is amended—

8 (A) by striking ‘‘Beginning on June 1,

9 1997, the’’ and inserting ‘‘The’’; and

10 (B) by striking ‘‘insured banks with dif11 ferent home States’’ and inserting ‘‘an insured

12 bank and another insured depository institution

13 or trust company with a different home State

14 than the resulting insured bank’’.

15 (2) NATIONAL BANK TRUST COMPANY MERGER

16 WITH OTHER TRUST COMPANY.—Subsection (b) of

17 section 4 of the National Bank Consolidation and

18 Merger Act (12 U.S.C. 215a–1(b)) is amended to

19 read as follows:

20 ‘‘(b) MERGER OF NATIONAL BANK TRUST COMPANY

21 WITH ANOTHER TRUST COMPANY.—A national bank that

22 is a trust company may engage in a consolidation or merg23 er under this Act with any trust company with a different

24 home State, under the same terms and conditions that
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1 would apply if the trust companies were located within the

2 same State.’’.

3 (e) INTERSTATE FIDUCIARY ACTIVITY.—Section

4 18(d) of the Federal Deposit Insurance Act (12 U.S.C.

5 1828(d)) is amended by adding at the end the following

6 new paragraph:

7 ‘‘(5) INTERSTATE FIDUCIARY ACTIVITY.—

8 ‘‘(A) AUTHORITY OF STATE BANK SUPER9 VISOR.—The State bank supervisor of a State

10 bank may approve an application by the State

11 bank, when not in contravention of home State

12 or host State law, to act as trustee, executor,

13 administrator, registrar of stocks and bonds,

14 guardian of estates, assignee, receiver, com15 mittee of estates of lunatics, or in any other fi16 duciary capacity in a host State in which State

17 banks or other corporations which come into

18 competition with national banks are permitted

19 to act under the laws of such host State.

20 ‘‘(B) NONCONTRAVENTION OF HOST STATE

21 LAW.—Whenever the laws of a host State au22 thorize or permit the exercise of any or all of

23 the foregoing powers by State banks or other

24 corporations which compete with national

25 banks, the granting to and the exercise of such
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1 powers by a State bank as provided in this

2 paragraph shall not be deemed to be in con3 travention of host State law within the meaning

4 of this paragraph.

5 ‘‘(C) STATE BANK INCLUDES TRUST COM6 PANIES.—For purposes of this paragraph, the

7 term ‘State bank’ includes any State-chartered

8 trust company (as defined in section 44(g)).

9 ‘‘(D) OTHER DEFINITIONS.—For purposes

10 of this paragraph, the term ‘home State’ and

11 ‘host State’ have the meanings given such

12 terms in section 44.’’.

13 (f) TECHNICAL AND CONFORMING AMENDMENTS.—

14 (1) Section 44 of the Federal Deposit Insurance

15 Act (12 U.S.C. 1831u) is amended—

16 (A) in subsection (a)—

17 (i) by striking paragraph (4) and in18 serting the following new paragraph:

19 ‘‘(4) TREATMENT OF BRANCHES IN CONNEC20 TION WITH CERTAIN INTERSTATE MERGER TRANS21 ACTIONS.—In the case of an interstate merger

22 transaction which involves the acquisition of a

23 branch of an insured depository institution or trust

24 company without the acquisition of the insured de25 pository institution or trust company, the branch
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1 shall be treated, for purposes of this section, as an

2 insured depository institution or trust company the

3 home State of which is the State in which the

4 branch is located.’’; and

5 (ii) by striking paragraphs (5) and (6)

6 and inserting the following new paragraph:

7 ‘‘(5) APPLICABILITY TO INDUSTRIAL LOAN

8 COMPANIES.—No provision of this section shall be

9 construed as authorizing the approval of any trans10 action involving a industrial loan company, indus11 trial bank, or other institution described in section

12 2(c)(2)(H) of the Bank Holding Company Act of

13 1956, or the acquisition, establishment, or operation

14 of a branch by any such company, bank, or institu15 tion, that is not allowed under section 18(d)(3).’’.

16 (B) in subsection (b)—

17 (i) by striking ‘‘bank’’ each place such

18 term appears in paragraph (2)(B)(i) and

19 inserting ‘‘insured depository institution’’;

20 (ii) by striking ‘‘banks’’ where such

21 term appears in paragraph (2)(E) and in22 serting ‘‘insured depository institutions or

23 trust companies’’;

24 (iii) by striking ‘‘bank affiliate’’ each

25 place such term appears in that portion of
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1 paragraph (3) that precedes subparagraph

2 (A) and inserting ‘‘insured depository insti3 tution affiliate’’;

4 (iv) by striking ‘‘any bank’’ where

5 such term appears in paragraph (3)(B)

6 and inserting ‘‘any insured depository in7 stitution’’;

8 (v) by striking ‘‘bank’’ where such

9 term appears in paragraph (4)(A) and in10 serting ‘‘insured depository institution and

11 trust company’’; and

12 (vi) by striking ‘‘all banks’’ where

13 such term appears in paragraph (5) and

14 inserting ‘‘all insured depository institu15 tions and trust companies’’;

16 (C) in subsection (d)(1), by striking ‘‘any

17 bank’’ and inserting ‘‘any insured depository in18 stitution or trust company’’;

19 (D) in subsection (e)—

20 (i) by striking ‘‘1 or more banks’’ and

21 inserting ‘‘1 or more insured depository in22 stitutions’’; and

23 (ii) by striking ‘‘paragraph (2), (4), or

24 (5)’’ and inserting ‘‘paragraph (2)’’;
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1 (E) by striking clauses (i) and (ii) of sub2 section (g)(4)(A) and inserting the following

3 new clauses:

4 ‘‘(i) with respect to a national bank or

5 Federal savings association, the State in

6 which the main office of the bank or sav7 ings association is located; and

8 ‘‘(ii) with respect to a State bank,

9 State savings association, or State-char10 tered trust company, the State by which

11 the bank, savings association, or trust

12 company is chartered; and’’;

13 (F) by striking paragraph (5) of subsection

14 (g) and inserting the following new paragraph:

15 ‘‘(5) HOST STATE.—The term ‘host State’

16 means—

17 ‘‘(A) with respect to a bank, a State, other

18 than the home State of the bank, in which the

19 bank maintains, or seeks to establish and main20 tain, a branch; and

21 ‘‘(B) with respect to a trust company and

22 solely for purposes of section 18(d)(5), a State,

23 other than the home State of the trust com24 pany, in which the trust company acts, or seeks

25 to act, in 1 or more fiduciary capacities.’’;
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1 (G) in subsection (g)(10), by striking ‘‘sec2 tion 18(c)(2)’’ and inserting ‘‘paragraph (1) or

3 (2) of section 18(c), as appropriate,’’; and

4 (H) in subsection (g), by adding at the end

5 the following new paragraph:

6 ‘‘(12) TRUST COMPANY.—The term ‘trust com7 pany’ means—

8 ‘‘(A) any national bank;

9 ‘‘(B) any savings association; and

10 ‘‘(C) any bank, banking association, trust

11 company, savings bank, or other banking insti12 tution which is incorporated under the laws of

13 any State,

14 that is authorized to act in 1 or more fiduciary ca15 pacities but is not engaged in the business of receiv16 ing deposits other than trust funds (as defined in

17 section 3(p)).’’.

18 (2) Section 3(d) of the Bank Holding Company

19 Act of 1956 (12 U.S.C. 1842(d)) is amended—

20 (A) in paragraph (1)—

21 (i) by striking subparagraphs (B) and

22 (C); and

23 (ii) by redesignating subparagraph

24 (D) as subparagraph (B); and
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•HR 1375 EH

1 (B) in paragraph (5), by striking ‘‘sub2 paragraph (B) or (D)’’ and inserting ‘‘subpara3 graph (B)’’.

4 (3) Subsection (c) of section 4 of the National

5 Bank Consolidation and Merger Act (12 U.S.C.

6 215a–1(c)) is amended to read as follows:

7 ‘‘(c) DEFINITIONS.—For purposes of this section, the

8 terms ‘home State’, ‘out-of-State bank’, and ‘trust com9 pany’ each have the same meaning as in section 44(g) of

10 the Federal Deposit Insurance Act.’’.

11 (g) CLERICAL AMENDMENTS.—

12 (1) The heading for section 44(b)(2)(E) of the

13 Federal Deposit Insurance Act (12 U.S.C.

14 1831u(b)(2)(E)) is amended by striking ‘‘BANKS’’

15 and inserting ‘‘INSURED DEPOSITORY INSTITUTIONS

16 AND TRUST COMPANIES’’.

17 (2) The heading for section 44(e) of the Fed18 eral Deposit Insurance Act (12 U.S.C. 1831u(e)) is

19 amended by striking ‘‘BANKS’’ and inserting ‘‘IN20 SURED DEPOSITORY INSTITUTIONS’’.

21 SEC. 402. STATUTE OF LIMITATIONS FOR JUDICIAL REVIEW

22 OF APPOINTMENT OF A RECEIVER FOR DE23 POSITORY INSTITUTIONS.

24 (a) NATIONAL BANKS.—Section 2 of the National

25 Bank Receivership Act (12 U.S.C. 191) is amended—
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1 (1) by striking ‘‘SECTION 2. The Comptroller of

2 the Currency’’ and inserting the following:

3 ‘‘SEC. 2. APPOINTMENT OF RECEIVER FOR A NATIONAL

4 BANK.

5 ‘‘(a) IN GENERAL.—The Comptroller of the Cur6 rency’’; and

7 (2) by adding at the end the following new sub8 section:

9 ‘‘(b) JUDICIAL REVIEW.—If the Comptroller of the

10 Currency appoints a receiver under subsection (a), the na11 tional bank may, within 30 days thereafter, bring an ac12 tion in the United States district court for the judicial dis13 trict in which the home office of such bank is located, or

14 in the United States District Court for the District of Co15 lumbia, for an order requiring the Comptroller of the Cur16 rency to remove the receiver, and the court shall, upon

17 the merits, dismiss such action or direct the Comptroller

18 of the Currency to remove the receiver.’’.

19 (b) INSURED DEPOSITORY INSTITUTIONS.—Section

20 11(c)(7) of the Federal Deposit Insurance Act (12 U.S.C.

21 1821(c)(7)) is amended to read as follows:

22 ‘‘(7) JUDICIAL REVIEW.—If the Corporation is

23 appointed (including the appointment of the Cor24 poration as receiver by the Board of Directors) as

25 conservator or receiver of a depository institution
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1 under paragraph (4), (9), or (10), the depository in2 stitution may, within 30 days thereafter, bring an

3 action in the United States district court for the ju4 dicial district in which the home office of such de5 pository institution is located, or in the United

6 States District Court for the District of Columbia,

7 for an order requiring the Corporation to be re8 moved as the conservator or receiver (regardless of

9 how such appointment was made), and the court

10 shall, upon the merits, dismiss such action or direct

11 the Corporation to be removed as the conservator or

12 receiver.’’.

13 (c) EXPANSION OF PERIOD FOR CHALLENGING THE

14 APPOINTMENT OF A LIQUIDATING AGENT.—Subpara15 graph (B) of section 207(a)(1) of the Federal Credit

16 Union Act (12 U.S.C. 1787(a)(1)) is amended by striking

17 ‘‘10 days’’ and inserting ‘‘30 days’’.

18 (d) EFFECTIVE DATE.—The amendments made by

19 subsections (a), (b), and (c) shall apply with respect to

20 conservators, receivers, or liquidating agents appointed on

21 or after the date of the enactment of this Act.

22 SEC. 403. REPORTING REQUIREMENTS RELATING TO IN23 SIDER LENDING.

24 (a) REPORTING REQUIREMENTS REGARDING LOANS

25 TO EXECUTIVE OFFICERS OF MEMBER BANKS.—Section
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1 22(g) of the Federal Reserve Act (12 U.S.C. 375a) is

2 amended—

3 (1) by striking paragraphs (6) and (9); and

4 (2) by redesignating paragraphs (7), (8), and

5 (10) as paragraphs (6), (7), and (8), respectively.

6 (b) REPORTING REQUIREMENTS REGARDING LOANS

7 FROM CORRESPONDENT BANKS TO EXECUTIVE OFFI8 CERS AND SHAREHOLDERS OF INSURED BANKS.—Section

9 106(b)(2) of the Bank Holding Company Act Amend10 ments of 1970 (12 U.S.C. 1972(2)) is amended—

11 (1) by striking subparagraph (G); and

12 (2) by redesignating subparagraphs (H) and (I)

13 as subparagraphs (G) and (H), respectively.

14 SEC. 404. AMENDMENT TO PROVIDE AN INFLATION AD15 JUSTMENT FOR THE SMALL DEPOSITORY IN16 STITUTION EXCEPTION UNDER THE DEPOSI17 TORY INSTITUTION MANAGEMENT INTER18 LOCKS ACT.

19 Section 203(1) of the Depository Institution Manage20 ment Interlocks Act (12 U.S.C. 3202(1)) is amended by

21 striking ‘‘$20,000,000’’ and inserting ‘‘$100,000,000’’.

22 SEC. 405. ENHANCING THE SAFETY AND SOUNDNESS OF IN23 SURED DEPOSITORY INSTITUTIONS.

24 (a) CLARIFICATION RELATING TO THE ENFORCE25 ABILITY OF AGREEMENTS AND CONDITIONS.—The Fed-
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1 eral Deposit Insurance Act (12 U.S.C. 1811 et seq.) is

2 amended by adding at the end the following new section:

3 ‘‘SEC. 49. ENFORCEMENT OF AGREEMENTS.

4 ‘‘(a) IN GENERAL.—Notwithstanding clause (i) or

5 (ii) of section 8(b)(6)(A) or section 38(e)(2)(E)(i), an ap6 propriate Federal banking agency may enforce, under sec7 tion 8, the terms of—

8 ‘‘(1) any condition imposed in writing by the

9 agency on a depository institution or an institution10 affiliated party (including a bank holding company)

11 in connection with any action on any application, no12 tice, or other request concerning a depository insti13 tution; or

14 ‘‘(2) any written agreement entered into be15 tween the agency and an institution-affiliated party

16 (including a bank holding company).

17 ‘‘(b) RECEIVERSHIPS AND CONSERVATORSHIPS.—

18 After the appointment of the Corporation as the receiver

19 or conservator for any insured depository institution, the

20 Corporation may enforce any condition or agreement de21 scribed in paragraph (1) or (2) of subsection (a) involving

22 such institution or any institution-affiliated party (includ23 ing a bank holding company), through an action brought

24 in an appropriate United States district court.’’.
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1 (b) PROTECTION OF CAPITAL OF INSURED DEPOSI2 TORY INSTITUTIONS.—Paragraph (1) of section 18(u) of

3 the Federal Deposit Insurance Act (12 U.S.C. 1828(u))

4 is amended by striking subparagraph (B) and by redesig5 nating subparagraph (C) as subparagraph (B).

6 SEC. 406. INVESTMENTS BY INSURED SAVINGS ASSOCIA7 TIONS IN BANK SERVICE COMPANIES AU8 THORIZED.

9 (a) IN GENERAL.—Sections 2 and 3 of the Bank

10 Service Company Act (12 U.S.C. 1862, 1863) are each

11 amended by striking ‘‘insured bank’’ each place such term

12 appears and inserting ‘‘insured depository institution’’.

13 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

14 (1) Section 1(b)(4) of the Bank Service Com15 pany Act (12 U.S.C. 1861(b)(4)) is amended—

16 (A) by inserting ‘‘, except when such term

17 appears in connection with the term ‘insured

18 depository institution’,’’ after ‘‘means’’; and

19 (B) by striking ‘‘Federal Home Loan Bank

20 Board’’ and inserting ‘‘Director of the Office of

21 Thrift Supervision’’.

22 (2) Section 1(b) of the Bank Service Company

23 Act (12 U.S.C. 1861(b)) is amended—

24 (A) by striking paragraph (5) and insert25 ing the following new paragraph:
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1 ‘‘(5) INSURED DEPOSITORY INSTITUTION.—The

2 term ‘insured depository institution’ has the mean3 ing given the term in section 3(c) of the Federal De4 posit Insurance Act;’’;

5 (B) by striking ‘‘and’’ at the end of para6 graph (7);

7 (C) by striking the period at the end of

8 paragraph (8) and inserting ‘‘; and’’; and

9 (D) by adding at the end the following new

10 paragraph:

11 ‘‘(9) the terms ‘State depository institution’,

12 ‘Federal depository institution’, ‘State savings asso13 ciation’ and ‘Federal savings association’ have the

14 meanings given the terms in section 3 of the Federal

15 Deposit Insurance Act.’’.

16 (3) The 1st sentence of section 5(c)(4)(B) of

17 the Home Owners’ Loan Act (12 U.S.C.

18 1464(c)(4)(B)) is amended by striking ‘‘by savings

19 associations of such State and by Federal associa20 tions’’ and inserting ‘‘by State and Federal deposi21 tory institutions’’.

22 (4) Subparagraph (A)(ii) and subparagraph

23 (B)(ii) of section 1(b)(2) of the Bank Service Com24 pany Act (12 U.S.C. 1861(b)(2)) are each amended
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1 by striking ‘‘insured banks’’ and inserting ‘‘insured

2 depository institutions’’.

3 (5) Section 1(b)(8) of the Bank Service Com4 pany Act (12 U.S.C. 1861(b)(8)) is further

5 amended—

6 (A) by striking ‘‘insured bank’’ and insert7 ing ‘‘insured depository institution’’;

8 (B) by striking ‘‘insured banks’’ each place

9 such term appears and inserting ‘‘insured de10 pository institutions’’; and

11 (C) by striking ‘‘the bank’s’’ and inserting

12 ‘‘the depository institution’s’’.

13 (6) Section 2 of the Bank Service Company Act

14 (12 U.S.C. 1862) is amended by inserting ‘‘or sav15 ings associations, other than the limitation on the

16 amount of investment by a Federal savings associa17 tion contained in section 5(c)(4)(B) of the Home

18 Owners’ Loan Act’’ after ‘‘relating to banks’’.

19 (7) Section 4(c) of the Bank Service Company

20 Act (12 U.S.C. 1864(c)) is amended by inserting ‘‘or

21 State savings association’’ after ‘‘State bank’’ each

22 place such term appears.

23 (8) Section 4(d) of the Bank Service Company

24 Act (12 U.S.C. 1864(d)) is amended by inserting
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1 ‘‘or Federal savings association’’ after ‘‘national

2 bank’’ each place such term appears.

3 (9) Section 4(e) of the Bank Service Company

4 Act (12 U.S.C. 1864(e)) is amended to read as fol5 lows:

6 ‘‘(e) A bank service company may perform—

7 ‘‘(1) only those services that each depository in8 stitution shareholder or member is otherwise author9 ized to perform under any applicable Federal or

10 State law; and

11 ‘‘(2) such services only at locations in a State

12 in which each such shareholder or member is author13 ized to perform such services.’’.

14 (10) Section 4(f) of the Bank Service Company

15 Act (12 U.S.C. 1864(f)) is amended by inserting ‘‘or

16 savings associations’’ after ‘‘location of banks’’.

17 (11) Section 5 of the Bank Service Company

18 Act (12 U.S.C. 1865) is amended—

19 (A) in subsection (a)—

20 (i) by striking ‘‘insured bank’’ and in21 serting ‘‘insured depository institution’’;

22 and

23 (ii) by striking ‘‘bank’s’’ and inserting

24 ‘‘institution’s’’.
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1 (B) in subsection (b), by striking ‘‘insured

2 bank’’ and inserting ‘‘insured depository insti3 tution’’; and

4 (C) in subsection (c)—

5 (i) by striking ‘‘the bank or banks’’

6 and inserting ‘‘any depository institution’’;

7 and

8 (ii) by striking ‘‘capability of the

9 bank’’ and inserting ‘‘capability of the de10 pository institution’’.

11 (12) Section 7 of the Bank Service Company

12 Act (12 U.S.C. 1867) is amended—

13 (A) in subsection (b), by striking ‘‘insured

14 bank’’ and inserting ‘‘insured depository insti15 tution’’; and

16 (B) in subsection (c)—

17 (i) by striking ‘‘a bank’’ each place

18 such term appears and inserting ‘‘a deposi19 tory institution’’; and

20 (ii) by striking ‘‘the bank’’ each place

21 such term appears and inserting ‘‘the de22 pository institution’’.
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1 SEC. 407. CROSS GUARANTEE AUTHORITY.

2 Subparagraph (A) of section 5(e)(9) of the Federal

3 Deposit Insurance Act (12 U.S.C. 1815(e)(9)(A)) is

4 amended to read as follows:

5 ‘‘(A) such institutions are controlled by the

6 same company; or’’.

7 SEC. 408. GOLDEN PARACHUTE AUTHORITY AND NONBANK

8 HOLDING COMPANIES.

9 Subsection (k) of section 18 of the Federal Deposit

10 Insurance Act (12 U.S.C. 1828(k)) is amended—

11 (1) in paragraph (2)(A), by striking ‘‘or deposi12 tory institution holding company’’ and inserting ‘‘or

13 covered company’’;

14 (2) by striking subparagraph (B) of paragraph

15 (2) and inserting the following new subparagraph:

16 ‘‘(B) Whether there is a reasonable basis

17 to believe that the institution-affiliated party is

18 substantially responsible for—

19 ‘‘(i) the insolvency of the depository

20 institution or covered company;

21 ‘‘(ii) the appointment of a conservator

22 or receiver for the depository institution; or

23 ‘‘(iii) the depository institution’s trou24 bled condition (as defined in the regula25 tions prescribed pursuant to section

26 32(f)).’’;
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1 (3) in paragraph (2)(F), by striking ‘‘depository

2 institution holding company’’ and inserting ‘‘covered

3 company,’’;

4 (4) in paragraph (3) in the matter preceding

5 subparagraph (A), by striking ‘‘depository institu6 tion holding company’’ and inserting ‘‘covered com7 pany’’;

8 (5) in paragraph (3)(A), by striking ‘‘holding

9 company’’ and inserting ‘‘covered company’’;

10 (6) in paragraph (4)(A)—

11 (A) by striking ‘‘depository institution

12 holding company’’ each place such term appears

13 and inserting ‘‘covered company’’; and

14 (B) by striking ‘‘holding company’’ each

15 place such term appears (other than in connec16 tion with the term referred to in subparagraph

17 (A)) and inserting ‘‘covered company’’;

18 (7) in paragraph (5)(A), by striking ‘‘depository

19 institution holding company’’ and inserting ‘‘covered

20 company’’;

21 (8) in paragraph (5), by adding at the end the

22 following new subparagraph:

23 ‘‘(D) COVERED COMPANY.—The term ‘cov24 ered company’ means any depository institution

25 holding company (including any company re-
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1 quired to file a report under section 4(f)(6) of

2 the Bank Holding Company Act of 1956), or

3 any other company that controls an insured de4 pository institution.’’; and

5 (9) in paragraph (6)—

6 (A) by striking ‘‘depository institution

7 holding company’’ and inserting ‘‘covered com8 pany,’’; and

9 (B) by striking ‘‘or holding company’’ and

10 inserting ‘‘or covered company’’.

11 SEC. 409. AMENDMENTS RELATING TO CHANGE IN BANK

12 CONTROL.

13 Section 7(j) of the Federal Deposit Insurance Act (12

14 U.S.C. 1817(j)) is amended—

15 (1) in paragraph (1)(D)—

16 (A) by striking ‘‘is needed to investigate’’

17 and inserting ‘‘is needed—

18 ‘‘(i) to investigate’’;

19 (B) by striking ‘‘United States Code.’’ and

20 inserting ‘‘United States Code; or’’; and

21 (C) by adding at the end the following new

22 clause:

23 ‘‘(ii) to analyze the safety and sound24 ness of any plans or proposals described in
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1 paragraph (6)(E) or the future prospects

2 of the institution.’’; and

3 (2) in paragraph (7)(C), by striking ‘‘the finan4 cial condition of any acquiring person’’ and inserting

5 ‘‘either the financial condition of any acquiring per6 son or the future prospects of the institution’’.

7 TITLE V—DEPOSITORY INSTITU8 TION AFFILIATES PROVI9 SIONS

10 SEC. 501. CLARIFICATION OF CROSS MARKETING PROVI11 SION.

12 Section 4(n)(5) of the Bank Holding Company Act

13 of 1956 (12 U.S.C. 1843(n)(5)) is amended—

14 (1) in subparagraph (B), by striking ‘‘sub15 section (k)(4)(I)’’ and inserting ‘‘subparagraph (H)

16 or (I) of subsection (k)(4)’’; and

17 (2) by adding at the end the following new sub18 paragraph:

19 ‘‘(C) THRESHOLD OF CONTROL.—Subpara20 graph (A) shall not apply with respect to a

21 company described or referred to in clause (i)

22 or (ii) of such subparagraph if the financial

23 holding company does not own or control 25

24 percent or more of the total equity or any class

25 of voting securities of such company.’’.
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1 SEC. 502. AMENDMENT TO PROVIDE THE FEDERAL RE2 SERVE BOARD WITH DISCRETION CON3 CERNING THE IMPUTATION OF CONTROL OF

4 SHARES OF A COMPANY BY TRUSTEES.

5 Section 2(g)(2) of the Bank Holding Company Act

6 of 1956 (12 U.S.C. 1841(g)(2)) is amended by inserting

7 ‘‘, unless the Board determines that such treatment is not

8 appropriate in light of the facts and circumstances of the

9 case and the purposes of this Act’’ before the period at

10 the end.

11 SEC. 503. ELIMINATING GEOGRAPHIC LIMITS ON THRIFT

12 SERVICE COMPANIES.

13 (a) IN GENERAL.—The 1st sentence of section

14 5(c)(4)(B) of the Home Owners’ Loan Act (12 U.S.C.

15 1464(c)(4)(B)) (as amended by section 406(b)(3) of this

16 Act) is amended—

17 (1) by striking ‘‘corporation organized’’ and all

18 that follows through ‘‘is available for purchase’’ and

19 inserting ‘‘company, if the entire capital of the com20 pany is available for purchase’’; and

21 (2) by striking ‘‘having their home offices in

22 such State’’.

23 (b) TECHNICAL CORRECTIONS.—

24 (1) The heading for subparagraph (B) of sec25 tion 5(c)(4) of the Home Owners’ Loan Act (12
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1 U.S.C. 1464(c)(4)(B)) is amended by striking ‘‘COR2 PORATIONS’’ and inserting ‘‘COMPANIES’’.

3 (2) The 2nd sentence of section 5(n)(1) of the

4 Home Owners’ Loan Act (12 U.S.C. 1464(n)(1)) is

5 amended by striking ‘‘service corporations’’ and in6 serting ‘‘service companies’’.

7 (3) Section 5(q)(1) of the Home Owners’ Loan

8 Act (12 U.S.C. 1464(q)(1)) is amended by striking

9 ‘‘service corporation’’ each place such term appears

10 in subparagraphs (A), (B), and (C) and inserting

11 ‘‘service company’’.

12 (4) Section 10(m)(4)(C)(iii)(II) of the Home

13 Owners’ Loan Act (12 U.S.C.

14 1467a(m)(4)(C)(iii)(II)) is amended by striking

15 ‘‘service corporation’’ each place such term appears

16 and inserting ‘‘service company’’.

17 SEC. 504. CLARIFICATION OF SCOPE OF APPLICABLE RATE

18 PROVISION.

19 Section 44(f) of the Federal Deposit Insurance Act

20 (12 U.S.C. 1831u(f)) is amended by adding at the end

21 the following new paragraphs:

22 ‘‘(3) OTHER LENDERS.—In the case of any

23 other lender doing business in the State described in

24 paragraph (1), the maximum interest rate or

25 amount of interest, discount points, finance charges,
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•HR 1375 EH

1 or other similar charges that may be charged, taken,

2 received, or reserved from time to time in any loan,

3 discount, or credit sale made, or upon any note, bill

4 of exchange, financing transaction, or other evidence

5 of debt issued to or acquired by any other lender

6 shall be equal to not more than the greater of the

7 rates described in subparagraph (A) or (B) of para8 graph (1).

9 ‘‘(4) OTHER LENDER DEFINED.—For purposes

10 of paragraph (3), the term ‘other lender’ means any

11 person engaged in the business of selling or financ12 ing the sale of personal property (and any services

13 incidental to the sale of personal property) in such

14 State, except that, with regard to any person or en15 tity described in such paragraph, such term does not

16 include—

17 ‘‘(A) an insured depository institution; or

18 ‘‘(B) any person or entity engaged in the

19 business of providing a short-term cash advance

20 to any consumer in exchange for—

21 ‘‘(i) a consumer’s personal check or

22 share draft, in the amount of the advance

23 plus a fee, where presentment or negotia24 tion of such check or share draft is de-
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1 ferred by agreement of the parties until a

2 designated future date; or

3 ‘‘(ii) a consumer authorization to

4 debit the consumer’s transaction account,

5 in the amount of the advance plus a fee,

6 where such account will be debited on or

7 after a designated future date.’’.

8 TITLE VI—BANKING AGENCY

9 PROVISIONS

10 SEC. 601. WAIVER OF EXAMINATION SCHEDULE IN ORDER

11 TO ALLOCATE EXAMINER RESOURCES.

12 Section 10(d) of the Federal Deposit Insurance Act

13 (12 U.S.C. 1820(d)) is amended—

14 (1) by redesignating paragraphs (5), (6), (7),

15 (8), (9), and (10) as paragraphs (6), (7), (8), (9),

16 (10), and (11), respectively;

17 (2) by inserting after paragraph (4), the fol18 lowing new paragraph:

19 ‘‘(5) WAIVER OF SCHEDULE WHEN NECESSARY

20 TO ACHIEVE SAFE AND SOUND ALLOCATION OF EX21 AMINER RESOURCES.—Notwithstanding paragraphs

22 (1), (2), (3), and (4), an appropriate Federal bank23 ing agency may make adjustments in the examina24 tion cycle for an insured depository institution if

25 necessary to allocate available resources of exam-
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1 iners in a manner that provides for the safety and

2 soundness of, and the effective examination and su3 pervision of, insured depository institutions.’’; and

4 (3) in paragraphs (8) and (9), as so redesig5 nated, by striking ‘‘paragraph (6)’’ and inserting

6 ‘‘paragraph (7)’’.

7 SEC. 602. INTERAGENCY DATA SHARING.

8 (a) FEDERAL BANKING AGENCIES.—Section 7(a)(2)

9 of the Federal Deposit Insurance Act (12 U.S.C.

10 1817(a)(2)) is amended by adding at the end the following

11 new subparagraph:

12 ‘‘(C) DATA SHARING WITH OTHER AGEN13 CIES AND PERSONS.—In addition to reports of

14 examination, reports of condition, and other re15 ports required to be regularly provided to the

16 Corporation (with respect to all insured deposi17 tory institutions, including a depository institu18 tion for which the Corporation has been ap19 pointed conservator or receiver) or an appro20 priate State bank supervisor (with respect to a

21 State depository institution) under subpara22 graph (A) or (B), a Federal banking agency

23 may, in the agency’s discretion, furnish any re24 port of examination or other confidential super25 visory information concerning any depository
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1 institution or other entity examined by such

2 agency under authority of any Federal law,

3 to—

4 ‘‘(i) any other Federal or State agen5 cy or authority with supervisory or regu6 latory authority over the depository institu7 tion or other entity;

8 ‘‘(ii) any officer, director, or receiver

9 of such depository institution or entity;

10 and

11 ‘‘(iii) any other person the Federal

12 banking agency determines to be appro13 priate.’’.

14 (b) NATIONAL CREDIT UNION ADMINISTRATION.—

15 Section 202(a) of the Federal Credit Union Act (12

16 U.S.C. 1782(a)) is amended by adding at the end the fol17 lowing new paragraph:

18 ‘‘(8) DATA SHARING WITH OTHER AGENCIES

19 AND PERSONS.—In addition to reports of examina20 tion, reports of condition, and other reports required

21 to be regularly provided to the Board (with respect

22 to all insured credit unions, including a credit union

23 for which the Corporation has been appointed con24 servator or liquidating agent) or an appropriate

25 State commission, board, or authority having super-
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1 vision of a State-chartered credit union, the Board

2 may, in the Board’s discretion, furnish any report

3 of examination or other confidential supervisory in4 formation concerning any credit union or other enti5 ty examined by the Board under authority of any

6 Federal law, to—

7 ‘‘(A) any other Federal or State agency or

8 authority with supervisory or regulatory author9 ity over the credit union or other entity;

10 ‘‘(B) any officer, director, or receiver of

11 such credit union or entity; and

12 ‘‘(C) any other institution-affiliated party

13 of such credit union or entity the Board deter14 mines to be appropriate.’’.

15 SEC. 603. PENALTY FOR UNAUTHORIZED PARTICIPATION

16 BY CONVICTED INDIVIDUAL.

17 Section 19 of the Federal Deposit Insurance Act (12

18 U.S.C. 1829) is amended by adding at the end the fol19 lowing new subsection:

20 ‘‘(c) NONINSURED BANKS.—Subsections (a) and (b)

21 shall apply to a noninsured national bank and a non22 insured State member bank, and any agency or non23 insured branch (as such terms are defined in section 1(b)

24 of the International Banking Act of 1978) of a foreign

25 bank as if such bank, branch, or agency were an insured
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1 depository institution, except such subsections shall be ap2 plied for purposes of this subsection by substituting the

3 agency determined under the following paragraphs for

4 ‘Corporation’ each place such term appears in such sub5 sections:

6 ‘‘(1) The Comptroller of the Currency, in the

7 case of a noninsured national bank or any Federal

8 agency or noninsured Federal branch of a foreign

9 bank.

10 ‘‘(2) The Board of Governors of the Federal

11 Reserve System, in the case of a noninsured State

12 member bank or any State agency or noninsured

13 State branch of a foreign bank.’’.

14 SEC. 604. AMENDMENT PERMITTING THE DESTRUCTION OF

15 OLD RECORDS OF A DEPOSITORY INSTITU16 TION BY THE FDIC AFTER THE APPOINTMENT

17 OF THE FDIC AS RECEIVER.

18 Section 11(d)(15)(D) of the Federal Deposit Insur19 ance Act (12 U.S.C. 1821(d)(15)(D)) is amended—

20 (1) by striking ‘‘RECORDKEEPING REQUIRE21 MENT.—After the end of the 6-year period’’ and in22 serting ‘‘RECORDKEEPING REQUIREMENT.—

23 ‘‘(i) IN GENERAL.—Except as pro24 vided in clause (ii), after the end of the 6-

25 year period’’; and
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1 (2) by adding at the end the following new

2 clause:

3 ‘‘(ii) OLD RECORDS.—In the case of

4 records of an insured depository institution

5 which are at least 10 years old as of the

6 date the Corporation is appointed as the

7 receiver of such depository institution, the

8 Corporation may destroy such records in

9 accordance with clause (i) any time after

10 such appointment is final without regard

11 to the 6-year period of limitation contained

12 in such clause.’’.

13 SEC. 605. MODERNIZATION OF RECORDKEEPING REQUIRE14 MENT.

15 Subsection (f) of section 10 of the Federal Deposit

16 Insurance Act (12 U.S.C. 1820(f)) is amended to read as

17 follows:

18 ‘‘(f) PRESERVATION OF AGENCY RECORDS.—

19 ‘‘(1) IN GENERAL.—A Federal banking agency

20 may cause any and all records, papers, or documents

21 kept by the agency or in the possession or custody

22 of the agency to be—

23 ‘‘(A) photographed or microphotographed

24 or otherwise reproduced upon film; or
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1 ‘‘(B) preserved in any electronic medium

2 or format which is capable of—

3 ‘‘(i) being read or scanned by com4 puter; and

5 ‘‘(ii) being reproduced from such elec6 tronic medium or format by printing or

7 any other form of reproduction of elec8 tronically stored data.

9 ‘‘(2) TREATMENT AS ORIGINAL RECORDS.—Any

10 photographs, microphotographs, or photographic

11 film or copies thereof described in paragraph (1)(A)

12 or reproduction of electronically stored data de13 scribed in paragraph (1)(B) shall be deemed to be

14 an original record for all purposes, including intro15 duction in evidence in all State and Federal courts

16 or administrative agencies and shall be admissible to

17 prove any act, transaction, occurrence, or event

18 therein recorded.

19 ‘‘(3) AUTHORITY OF THE FEDERAL BANKING

20 AGENCIES.—Any photographs, microphotographs, or

21 photographic film or copies thereof described in

22 paragraph (1)(A) or reproduction of electronically

23 stored data described in paragraph (1)(B) shall be

24 preserved in such manner as the Federal banking

25 agency shall prescribe and the original records, pa-
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1 pers, or documents may be destroyed or otherwise

2 disposed of as the Federal banking agency may di3 rect.’’.

4 SEC. 606. CLARIFICATION OF EXTENT OF SUSPENSION, RE5 MOVAL, AND PROHIBITION AUTHORITY OF

6 FEDERAL BANKING AGENCIES IN CASES OF

7 CERTAIN CRIMES BY INSTITUTION-AFFILI8 ATED PARTIES.

9 (a) INSURED DEPOSITORY INSTITUTION.—

10 (1) IN GENERAL.—Section 8(g)(1) of the Fed11 eral Deposit Insurance Act (12 U.S.C. 1818(g)(1))

12 is amended—

13 (A) in subparagraph (A), by striking ‘‘the

14 depository’’ each place such term appears and

15 inserting ‘‘any depository’’;

16 (B) in subparagraph (B)(i), by inserting

17 ‘‘of which the subject of the order is an institu18 tion-affiliated party’’ before the period at the

19 end;

20 (C) in subparagraph (C), by striking ‘‘the

21 depository’’ each place such term appears and

22 inserting ‘‘any depository’’;

23 (D) in subparagraph (D)(i), by inserting

24 ‘‘of which the subject of the order is an institu-
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1 tion-affiliated party’’ after ‘‘upon the depository

2 institution’’; and

3 (E) by adding at the end the following new

4 subparagraph:

5 ‘‘(E) CONTINUATION OF AUTHORITY.—A

6 Federal banking agency may issue an order

7 under this paragraph with respect to an indi8 vidual who is an institution-affiliated party at a

9 depository institution at the time of an offense

10 described in subparagraph (A) without regard

11 to—

12 ‘‘(i) whether such individual is an in13 stitution-affiliated party at any depository

14 institution at the time the order is consid15 ered or issued by the agency; or

16 ‘‘(ii) whether the depository institu17 tion at which the individual was an institu18 tion-affiliated party at the time of the of19 fense remains in existence at the time the

20 order is considered or issued by the agen21 cy.’’.

22 (2) CLERICAL AMENDMENT.—Section 8(g) of

23 the Federal Deposit Insurance Act (12 U.S.C.

24 1818(g)) is amended by striking ‘‘(g)’’ and inserting

25 the following new subsection heading:
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1 ‘‘(g) SUSPENSION, REMOVAL, AND PROHIBITION

2 FROM PARTICIPATION ORDERS IN THE CASE OF CERTAIN

3 CRIMINAL OFFENSES.—’’.

4 (b) INSURED CREDIT UNIONS.—

5 (1) IN GENERAL.—Section 206(i)(1) of the

6 Federal Credit Union Act (12 U.S.C. 1786(i)(1)) is

7 amended—

8 (A) in subparagraph (A), by striking ‘‘the

9 credit union’’ each place such term appears and

10 inserting ‘‘any credit union’’;

11 (B) in subparagraph (B)(i), by inserting

12 ‘‘of which the subject of the order is, or most

13 recently was, an institution-affiliated party’’ be14 fore the period at the end;

15 (C) in subparagraph (C), by striking ‘‘the

16 credit union’’ each place such term appears and

17 inserting ‘‘any credit union’’;

18 (D) in subparagraph (D)(i), by striking

19 ‘‘upon such credit union’’ and inserting ‘‘upon

20 the credit union of which the subject of the

21 order is, or most recently was, an institution-af22 filiated party’’; and

23 (E) by adding at the end the following new

24 subparagraph:
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1 ‘‘(E) CONTINUATION OF AUTHORITY.—The

2 Board may issue an order under this paragraph

3 with respect to an individual who is an institu4 tion-affiliated party at a credit union at the

5 time of an offense described in subparagraph

6 (A) without regard to—

7 ‘‘(i) whether such individual is an in8 stitution-affiliated party at any credit

9 union at the time the order is considered

10 or issued by the Board; or

11 ‘‘(ii) whether the credit union at

12 which the individual was an institution-af13 filiated party at the time of the offense re14 mains in existence at the time the order is

15 considered or issued by the Board.’’.

16 (2) CLERICAL AMENDMENT.—Section 206(i) of

17 the Federal Credit Union Act (12 U.S.C. 1786(i)) is

18 amended by striking ‘‘(i)’’ at the beginning and in19 serting the following new subsection heading:

20 ‘‘(i) SUSPENSION, REMOVAL, AND PROHIBITION

21 FROM PARTICIPATION ORDERS IN THE CASE OF CERTAIN

22 CRIMINAL OFFENSES.—’’.
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1 SEC. 607. STREAMLINING DEPOSITORY INSTITUTION MERG2 ER APPLICATION REQUIREMENTS.

3 (a) IN GENERAL.—Paragraph (4) of section 18(c) of

4 the Federal Deposit Insurance Act (12 U.S.C. 1828(c))

5 is amended to read as follows:

6 ‘‘(4) REPORTS ON COMPETITIVE FACTORS.—

7 ‘‘(A) REQUEST FOR REPORT.—In the in8 terests of uniform standards, before acting on

9 any application for approval of a merger trans10 action, the responsible agency, unless the agen11 cy finds that it must act immediately in order

12 to prevent the probable failure of a depository

13 institution involved, shall—

14 ‘‘(i) request a report on the competi15 tive factors involved from the Attorney

16 General; and

17 ‘‘(ii) provide a copy of the request to

18 the Corporation (when the Corporation is

19 not the responsible agency).

20 ‘‘(B) FURNISHING OF REPORT.—The re21 port requested under subparagraph (A) shall be

22 furnished by the Attorney General to the re23 sponsible agency—

24 ‘‘(i) not more than 30 calendar days

25 after the date on which the Attorney Gen26 eral received the request; or
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1 ‘‘(ii) not more than 10 calendar days

2 after such date, if the requesting agency

3 advises the Attorney General that an emer4 gency exists requiring expeditious action.’’.

5 (b) TECHNICAL AND CONFORMING AMENDMENT.—

6 The penultimate sentence of section 18(c)(6) of the Fed7 eral Deposit Insurance Act (12 U.S.C. 1828(c)(6)) is

8 amended to read as follows: ‘‘If the agency has advised

9 the Attorney General under paragraph (4)(B) of the exist10 ence of an emergency requiring expeditious action and has

11 requested a report on the competitive factors within 10

12 days, the transaction may not be consummated before the

13 fifth calendar day after the date of approval by the agen14 cy.’’.

15 SEC. 608. INCLUSION OF DIRECTOR OF THE OFFICE OF

16 THRIFT SUPERVISION IN LIST OF BANKING

17 AGENCIES REGARDING INSURANCE CUS18 TOMER PROTECTION REGULATIONS.

19 Section 47(g)(2)(B)(i) of the Federal Deposit Insur20 ance Act (12 U.S.C. 1831x(g)(2)(B)(i)) is amended by in21 serting ‘‘the Director of the Office of Thrift Supervision,’’

22 after ‘‘Comptroller of the Currency,’’.
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1 SEC. 609. PROTECTION OF CONFIDENTIAL INFORMATION

2 RECEIVED BY FEDERAL BANKING REGU3 LATORS FROM FOREIGN BANKING SUPER4 VISORS.

5 Section 15 of the International Banking Act of 1978

6 (12 U.S.C. 3109) is amended by adding at the end the

7 following new subsection:

8 ‘‘(c) CONFIDENTIAL INFORMATION RECEIVED FROM

9 FOREIGN SUPERVISORS.—

10 ‘‘(1) IN GENERAL.—Except as provided in

11 paragraph (3), a Federal banking agency may not be

12 compelled to disclose information received from a

13 foreign regulatory or supervisory authority if—

14 ‘‘(A) the foreign regulatory or supervisory

15 authority has, in good faith, determined and

16 represented to such Federal banking agency

17 that public disclosure of the information would

18 violate the laws applicable to that foreign regu19 latory or supervisory authority; and

20 ‘‘(B) the relevant Federal banking agency

21 obtained such information pursuant to—

22 ‘‘(i) such procedures as the Federal

23 banking agency may establish for use in

24 connection with the administration and en25 forcement of Federal banking laws; or
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1 ‘‘(ii) a memorandum of understanding

2 or other similar arrangement between the

3 Federal banking agency and the foreign

4 regulatory or supervisory authority.

5 ‘‘(2) TREATMENT UNDER TITLE 5, UNITED

6 STATES CODE.—For purposes of section 552 of title

7 5, United States Code, this subsection shall be treat8 ed as a statute described in subsection (b)(3)(B) of

9 such section.

10 ‘‘(3) SAVINGS PROVISION.—No provision of this

11 section shall be construed as—

12 ‘‘(A) authorizing any Federal banking

13 agency to withhold any information from any

14 duly authorized committee of the House of Rep15 resentatives or the Senate; or

16 ‘‘(B) preventing any Federal banking

17 agency from complying with an order of a court

18 of the United States in an action commenced by

19 the United States or such agency.

20 ‘‘(4) FEDERAL BANKING AGENCY DEFINED.—

21 For purposes of this subsection, the term ‘Federal

22 banking agency’ means the Board, the Comptroller,

23 the Federal Deposit Insurance Corporation, and the

24 Director of the Office of Thrift Supervision.’’.
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1 SEC. 610. PROHIBITION ON PARTICIPATION BY CONVICTED

2 INDIVIDUAL.

3 Section 19 of the Federal Deposit Insurance Act (12

4 U.S.C. 1829) is amended by inserting after subsection (c)

5 (as added by section 603 of this title) the following new

6 subsections:

7 ‘‘(d) BANK HOLDING COMPANIES.—Subsections (a)

8 and (b) shall apply to any bank holding company, any sub9 sidiary (other than a bank) of a bank holding company,

10 and any organization organized and operated under sec11 tion 25A of the Federal Reserve Act or operating under

12 section 25 of the Federal Reserve Act as if such bank

13 holding company, subsidiary, or organization were an in14 sured depository institution, except such subsections shall

15 be applied for purposes of this subsection by substituting

16 ‘Board of Governors of the Federal Reserve System’ for

17 ‘Corporation’ each place such term appears in such sub18 sections.

19 ‘‘(e) SAVINGS AND LOAN HOLDING COMPANIES.—

20 Subsections (a) and (b) shall apply to any savings and

21 loan holding company and any subsidiary (other than a

22 savings association) of a savings and loan holding com23 pany as if such savings and loan holding company or sub24 sidiary were an insured depository institution, except such

25 subsections shall be applied for purposes of this subsection

26 by substituting ‘Director of the Office of Thrift Super-
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1 vision’ for ‘Corporation’ each place such term appears in

2 such subsections.’’.

3 SEC. 611. CLARIFICATION THAT NOTICE AFTER SEPARA4 TION FROM SERVICE MAY BE MADE BY AN

5 ORDER.

6 (a) IN GENERAL.—Section 8(i)(3) of the Federal De7 posit Insurance Act (12 U.S.C. 1818(i)(3)) is amended by

8 inserting ‘‘or order’’ after ‘‘notice’’ each place such term

9 appears.

10 (b) TECHNICAL AND CONFORMING AMENDMENT.—

11 The heading for section 8(i)(3) of the Federal Deposit In12 surance Act (12 U.S.C. 1818(i)(3)) is amended by insert13 ing ‘‘OR ORDER’’ after ‘‘NOTICE’’.

14 SEC. 612. ENFORCEMENT AGAINST MISREPRESENTATIONS

15 REGARDING FDIC DEPOSIT INSURANCE COV16 ERAGE.

17 (a) IN GENERAL.—Section 18(a) of the Federal De18 posit Insurance Act (12 U.S.C. 1828(a)) is amended by

19 adding at the end the following new paragraph:

20 ‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC

21 NAMES, AND MISREPRESENTATION TO INDICATE IN22 SURED STATUS.—

23 ‘‘(A) PROHIBITION ON FALSE ADVER24 TISING AND MISUSE OF FDIC NAMES.—No per25 son may—
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1 ‘‘(i) use the terms ‘Federal Deposit’,

2 ‘Federal Deposit Insurance’, ‘Federal De3 posit Insurance Corporation’, any combina4 tion of such terms, or the abbreviation

5 ‘FDIC’ as part of the business name or

6 firm name of any person, including any

7 corporation, partnership, business trust,

8 association, or other business entity; or

9 ‘‘(ii) use such terms or any other sign

10 or symbol as part of an advertisement, so11 licitation, or other document,

12 to represent, suggest or imply that any deposit

13 liability, obligation, certificate or share is in14 sured or guaranteed by the Federal Deposit In15 surance Corporation, if such deposit liability,

16 obligation, certificate, or share is not insured or

17 guaranteed by the Corporation.

18 ‘‘(B) PROHIBITION ON MISREPRESENTA19 TIONS OF INSURED STATUS.—No person may

20 knowingly misrepresent—

21 ‘‘(i) that any deposit liability, obliga22 tion, certificate, or share is federally in23 sured, if such deposit liability, obligation,

24 certificate, or share is not insured by the

25 Corporation; or
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1 ‘‘(ii) the extent to which or the man2 ner in which any deposit liability, obliga3 tion, certificate, or share is insured by the

4 Federal Deposit Insurance Corporation, if

5 such deposit liability, obligation, certificate,

6 or share is not insured by the Corporation

7 to the extent or in the manner represented.

8 ‘‘(C) AUTHORITY OF FDIC.—The Corpora9 tion shall have—

10 ‘‘(i) jurisdiction over any person that

11 violates this paragraph, or aids or abets

12 the violation of this paragraph; and

13 ‘‘(ii) for purposes of enforcing the re14 quirements of this paragraph with regard

15 to any person—

16 ‘‘(I) the authority of the Cor17 poration under section 10(c) to con18 duct investigations; and

19 ‘‘(II) the enforcement authority

20 of the Corporation under subsections

21 (b), (c), (d) and (i) of section 8,

22 as if such person were a state nonmember in23 sured bank.

24 ‘‘(D) OTHER ACTIONS PRESERVED.—No

25 provision of this paragraph shall be construed
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1 as barring any action otherwise available, under

2 the laws of the United States or any State, to

3 any Federal or State law enforcement agency or

4 individual.’’.

5 (b) ENFORCEMENT ORDERS.—Section 8(c) of the

6 Federal Deposit Insurance Act (12 U.S.C. 1818(c)) is

7 amended by adding at the end the following new para8 graph:

9 ‘‘(4) FALSE ADVERTISING OR MISUSE OF

10 NAMES TO INDICATE INSURED STATUS.—

11 ‘‘(A) TEMPORARY ORDER.—

12 ‘‘(i) IN GENERAL.—If a notice of

13 charges served under subsection (b)(1) of

14 this section specifies on the basis of par15 ticular facts that any person is engaged in

16 conduct described in section 18(a)(4), the

17 Corporation may issue a temporary order

18 requiring—

19 ‘‘(I) the immediate cessation of

20 any activity or practice described,

21 which gave rise to the notice of

22 charges; and

23 ‘‘(II) affirmative action to pre24 vent any further, or to remedy any ex25 isting, violation.
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1 ‘‘(ii) EFFECT OF ORDER.—Any tem2 porary order issued under this subpara3 graph shall take effect upon service.

4 ‘‘(B) EFFECTIVE PERIOD OF TEMPORARY

5 ORDER.—A temporary order issued under sub6 paragraph (A) shall remain effective and en7 forceable, pending the completion of an admin8 istrative proceeding pursuant to subsection

9 (b)(1) in connection with the notice of

10 charges—

11 ‘‘(i) until such time as the Corpora12 tion shall dismiss the charges specified in

13 such notice; or

14 ‘‘(ii) if a cease-and-desist order is

15 issued against such person, until the effec16 tive date of such order.

17 ‘‘(C) CIVIL MONEY PENALTIES.—Violations

18 of section 18(a)(4) shall be subject to civil

19 money penalties as set forth in subsection (i) in

20 an amount not to exceed $1,000,000 for each

21 day during which the violation occurs or con22 tinues.’’.

23 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

24 (1) Section 18(a)(3) of the Federal Deposit In25 surance Act (12 U.S.C. 1828(a)) is amended—
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1 (A) in the 1st sentence by striking ‘‘of this

2 subsection’’ and inserting ‘‘of paragraphs (1)

3 and (2)’’;

4 (B) by striking the 2nd sentence; and

5 (C) in the 3rd sentence, by striking ‘‘of

6 this subsection’’ and inserting ‘‘of paragraphs

7 (1) and (2)’’.

8 (2) The heading for subsection (a) of section 18

9 of the Federal Deposit Insurance Act (12 U.S.C.

10 1828(a)) is amended by striking ‘‘INSURANCE

11 LOGO.—’’ and inserting ‘‘REPRESENTATIONS OF DE12 POSIT INSURANCE.—’’.

13 SEC. 613. COMPENSATION OF FEDERAL HOME LOAN BANK

14 DIRECTORS.

15 Section 7(i) of the Federal Home Loan Bank Act (12

16 U.S.C. 1427(i)) is amended to read as follows:

17 ‘‘(i) DIRECTORS’ COMPENSATION.—

18 ‘‘(1) IN GENERAL.—Each Federal home loan

19 bank may pay the directors on the board of directors

20 of the bank reasonable compensation for the time re21 quired of such directors, and reasonable expenses in22 curred by the directors, in connection with service on

23 the board of directors, in accordance with resolutions

24 adopted by the board of directors and subject to the

25 approval of the board.
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1 ‘‘(2) ANNUAL REPORT BY THE BOARD.—Infor2 mation regarding compensation and expenses paid

3 by the Federal home loan banks to the directors on

4 the boards of directors of the banks shall be included

5 in the annual report submitted to the Congress by

6 the Board pursuant to section 2B(d).’’.

7 SEC. 614. EXTENSION OF TERMS OF FEDERAL HOME LOAN

8 BANK DIRECTORS.

9 (a) IN GENERAL.—Section 7(d) of the Federal Home

10 Loan Bank Act (12 U.S.C. 1427(d)) is amended—

11 (1) in the first sentence, by striking ‘‘3 years’’

12 and inserting ‘‘4 years’’; and

13 (2) in the 2nd sentence—

14 (A) by striking ‘‘Federal Home Loan Bank

15 System Modernization Act of 1999’’ and insert16 ing ‘‘Financial Services Regulatory Relief Act

17 of 2003’’; and

18 (B) by striking ‘‘1/3’’ and inserting ‘‘1/4’’.

19 (b) PROSPECTIVE APPLICATION.—The amendment

20 made by subsection (a) shall not apply to the term of office

21 in which any director of a Federal home loan bank is serv22 ing as of the date of the enactment of this Act, including

23 any director elected or appointed to fill a vacancy in any

24 such term of office.
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1 SEC. 615. BIENNIAL REPORTS ON THE STATUS OF AGENCY

2 EMPLOYMENT OF MINORITIES AND WOMEN.

3 (a) IN GENERAL.—Before December 31, 2003, and

4 the end of each 2-year period beginning after such date,

5 each Federal banking agency shall submit a report to the

6 Congress on the status of the employment by the agency

7 of minority individuals and women.

8 (b) FACTORS TO BE INCLUDED.—The report shall

9 include a detailed assessment of each of the following:

10 (1) The extent of hiring of minority individuals

11 and women by the agency as of the time the report

12 is prepared.

13 (2) The successes achieved and challenges faced

14 by the agency in operating minority and women out15 reach programs.

16 (3) Challenges the agency may face in finding

17 qualified minority individual and women applicants.

18 (4) Such other information, findings, and con19 clusions, and recommendations for legislative or

20 agency action, as the agency may determine to be

21 appropriate to include in the report.

22 (c) DEFINITIONS.—For purposes of this section, the

23 following definitions shall apply:

24 (1) FEDERAL BANKING AGENCY.—The term

25 ‘‘Federal banking agency’’—
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1 (A) has the same meaning as in section

2 3(z) of the Federal Deposit Insurance Act; and

3 (B) includes the National Credit Union

4 Administration.

5 (2) MINORITY.—The term ‘‘minority’’ has the

6 same meaning as in section 1204(c)(3) of the Finan7 cial Institutions Reform, Recovery, and Enforcement

8 Act of 1989.

9 SEC. 616. COORDINATION OF STATE EXAMINATION AU10 THORITY.

11 Section 10(h) of the Federal Deposit Insurance Act

12 (12 U.S.C. 1820(h)) is amended to read as follows:

13 ‘‘(h) COORDINATION OF EXAMINATION AUTHOR14 ITY.—

15 ‘‘(1) IN GENERAL.—The appropriate State

16 bank supervisor of the home State of an insured

17 State bank has authority to examine and supervise

18 the bank. The State bank supervisor of the home

19 State of an insured State bank shall exercise its au20 thority to supervise and examine the branches of the

21 bank in a host State in accordance with the terms

22 of any applicable cooperative agreement between the

23 home State bank supervisor and the State bank su24 pervisor of the relevant host State. Except as ex25 pressly provided in a cooperative agreement between
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1 the State bank supervisors of the home State and

2 host State(s) of an insured State bank, only the

3 State bank supervisor of the home State of an in4 sured State bank may levy or charge State super5 visory fees on the bank.

6 ‘‘(2) HOST STATE EXAMINATION.—With respect

7 to a branch operated in a host State by an out-of8 State insured State bank that resulted from an

9 interstate merger transaction approved under section

10 44 or that was established in such State pursuant

11 to section 5155(g) of the Revised Statutes, the third

12 undesignated paragraph of section 9 of the Federal

13 Reserve Act or section 18(d)(4) of this Act, the ap14 propriate State bank supervisor of such host State

15 may—

16 ‘‘(A) with written notice to the State bank

17 supervisor of the bank’s home State and subject

18 to the terms of any applicable cooperative

19 agreement with the State bank supervisor of

20 such home State, examine such branch for the

21 purpose of determining compliance with host

22 State laws that are applicable pursuant to sec23 tion 24(j) of this Act, including those that gov24 ern community reinvestment, fair lending, and

25 consumer protection; and
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1 ‘‘(B) if expressly permitted under and sub2 ject to the terms of a cooperative agreement

3 with the State bank supervisor of the bank’s

4 home State or if such out-of-State insured

5 State bank has been determined to be in a trou6 bled condition by either the State bank super7 visor of the bank’s home State or the bank’s

8 appropriate Federal banking agency, participate

9 in the examination of the bank by the State

10 bank supervisor of the bank’s home State to as11 certain that the activities of the branch in such

12 host State are not conducted in an unsafe or

13 unsound manner. The State bank supervisor of

14 the home State of an insured State bank shall

15 notify the State bank supervisor of each host

16 State of the bank if there has been a final de17 termination that the bank is in a troubled con18 dition. The State bank supervisor of the bank’s

19 home State shall provide such notice as soon as

20 reasonably possible but in all cases within 15

21 business days after the State bank supervisor

22 has made such final determination or has re23 ceived written notification of such final deter24 mination.
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1 ‘‘(3) HOST STATE ENFORCEMENT.—If the State

2 bank supervisor of a host State determines that a

3 branch of an out-of-State State insured State bank

4 is violating any law of the host State that is applica5 ble to such branch pursuant to section 24(j) of this

6 Act, including a law that governs community rein7 vestment, fair lending, or consumer protection, the

8 State bank supervisor of the host State or, to the ex9 tent authorized by the law of the host State, a host

10 State law enforcement officer may, with written no11 tice to the State bank supervisor of the bank’s home

12 State and subject to the terms of any applicable co13 operative agreement with the State bank supervisor

14 of the bank’s home State, undertake such enforce15 ment actions and proceedings as would be permitted

16 under the law of the host State as if the branch

17 were a bank chartered by that host State.

18 ‘‘(4) COOPERATIVE AGREEMENT.—The State

19 bank supervisors from 2 or more States may enter

20 into cooperative agreements to facilitate State regu21 latory supervision of State banks, including coopera22 tive agreements relating to the coordination of ex23 aminations and joint participation in examinations.

24 For purposes of this subsection (h), the term ‘‘coop25 erative agreement’’ means a written agreement that
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1 is signed by the home State bank supervisor and

2 host State bank supervisor to facilitate State regu3 latory supervision of State banks and includes na4 tionwide or multi-state cooperative agreements and

5 cooperative agreements solely between the home

6 State and host State. Except for State bank super7 visors, no provision of this subsection (h) relating to

8 such cooperative agreements shall be construed as

9 limiting in any way the authority of home and host

10 State law enforcement officers, regulatory super11 visors, or other officials that have not signed such

12 cooperative agreements to enforce host State laws

13 that are applicable to a branch of an out-of-State in14 sured State bank located in the host State pursuant

15 to section 24(j) of this Act.

16 ‘‘(5) FEDERAL REGULATORY AUTHORITY.—No

17 provision of this subsection shall be construed as

18 limiting in any way the authority of any Federal

19 banking agency.

20 ‘‘(6) STATE TAXATION AUTHORITY NOT AF21 FECTED.—No provision of this subsection (h) shall

22 be construed as affecting the authority of any State

23 or political subdivision of any State to adopt, apply,

24 or administer any tax or method of taxation to any

25 bank, bank holding company, or foreign bank, or
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1 any affiliate of any bank, bank holding company, or

2 foreign bank, to the extent such tax or tax method

3 is otherwise permissible by or under the Constitution

4 of the United States or other Federal law.

5 ‘‘(7) DEFINITIONS.—For purpose of this sec6 tion, the following definition shall apply:

7 ‘‘(A) The terms ‘host State’, ‘home State’,

8 and ‘out-of-State bank’ have the same meanings

9 as in section 44(g).

10 ‘‘(B) The term ‘State supervisory fees’

11 means assessments, examination fees, branch

12 fees, license fees, and all other fees that are lev13 ied or charged by a State bank supervisor di14 rectly upon an insured State bank or upon

15 branches of an insured State bank.

16 ‘‘(C) Solely for purposes of subparagraph

17 (2)(B) of this subsection (h), an insured State

18 bank has been determined to be in ‘troubled

19 condition’ if the bank—

20 ‘‘(i) has a composite rating, as deter21 mined in its most recent report of exam22 ination, of 4 or 5 under the Uniform Fi23 nancial Institutions Ratings System

24 (UFIRS); or
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1 ‘‘(ii) is subject to a proceeding initi2 ated by the Corporation for termination or

3 suspension of deposit insurance; or

4 ‘‘(iii) is subject to a proceeding initi5 ated by the State bank supervisor of the

6 bank’s home State to vacate, revoke, or

7 terminate the charter of the bank, or to

8 liquidate the bank, or to appoint a receiver

9 for the bank.

10 ‘‘(D) For the purposes of paragraph

11 (2)(B), the term ‘final determination’ means

12 the transmittal of a Report of Examination to

13 the bank or transmittal of official notice of pro14 ceedings to the bank.’’.

15 TITLE VII—BUSINESS CHECKING

16 FREEDOM

17 SEC. 701. SHORT TITLE.

18 This title may be cited as the ‘‘Business Checking

19 Freedom Act of 2004’’.

20 SEC. 702. INTEREST-BEARING TRANSACTION ACCOUNTS

21 AUTHORIZED FOR ALL BUSINESSES.

22 (a) Section 2 of Public Law 93–100 (12 U.S.C. 1832)

23 is amended—

24 (1) by redesignating subsections (b) and (c) as

25 subsections (c) and (d), respectively; and
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1 (2) by inserting after subsection (a) the fol2 lowing:

3 ‘‘(b) Notwithstanding any other provision of law, any

4 depository institution may permit the owner of any deposit

5 or account which is a deposit or account on which interest

6 or dividends are paid and is not a deposit or account de7 scribed in subsection (a)(2) to make up to 24 transfers

8 per month (or such greater number as the Board of Gov9 ernors of the Federal Reserve System may determine by

10 rule or order), for any purpose, to another account of the

11 owner in the same institution. An account offered pursu12 ant to this subsection shall be considered a transaction

13 account for purposes of section 19 of the Federal Reserve

14 Act unless the Board of Governors of the Federal Reserve

15 System determines otherwise.’’.

16 (b) Effective at the end of the 2-year period begin17 ning on the date of the enactment of this Act, section 2

18 of Public Law 93–100 (12 U.S.C. 1832) is amended—

19 (1) in subsection (a)(1), by striking ‘‘but sub20 ject to paragraph (2)’’;

21 (2) by striking paragraph (2) of subsection (a)

22 and inserting the following new paragraph:

23 ‘‘(2) No provision of this section may be con24 strued as conferring the authority to offer demand
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1 deposit accounts to any institution that is prohibited

2 by law from offering demand deposit accounts.’’; and

3 (3) in subsection (b) (as added by subsection

4 (a) of this section) by striking ‘‘and is not a deposit

5 or account described in subsection (a)(2)’’.

6 SEC. 703. INTEREST-BEARING TRANSACTION ACCOUNTS

7 AUTHORIZED.

8 (a) REPEAL OF PROHIBITION ON PAYMENT OF IN9 TEREST ON DEMAND DEPOSITS.—

10 (1) FEDERAL RESERVE ACT.—Section 19(i) of

11 the Federal Reserve Act (12 U.S.C. 371a) is amend12 ed to read as follows:

13 ‘‘(i) [Repealed]’’.

14 (2) HOME OWNERS’ LOAN ACT.—The first sen15 tence of section 5(b)(1)(B) of the Home Owners’

16 Loan Act (12 U.S.C. 1464(b)(1)(B)) is amended by

17 striking ‘‘savings association may not—’’ and all

18 that follows through ‘‘(ii) permit any’’ and inserting

19 ‘‘savings association may not permit any’’.

20 (3) FEDERAL DEPOSIT INSURANCE ACT.—Sec21 tion 18(g) of the Federal Deposit Insurance Act (12

22 U.S.C. 1828(g)) is amended to read as follows:

23 ‘‘(g) [Repealed]’’.
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1 (b) EFFECTIVE DATE.—The amendments made by

2 subsection (a) shall take effect at the end of the 2-year

3 period beginning on the date of the enactment of this Act.

4 SEC. 704. PAYMENT OF INTEREST ON RESERVES AT FED5 ERAL RESERVE BANKS.

6 (a) IN GENERAL.—Section 19(b) of the Federal Re7 serve Act (12 U.S.C. 461(b)) is amended by adding at

8 the end the following new paragraph:

9 ‘‘(12) EARNINGS ON RESERVES.—

10 ‘‘(A) IN GENERAL.—Balances maintained

11 at a Federal reserve bank by or on behalf of a

12 depository institution may receive earnings to

13 be paid by the Federal reserve bank at least

14 once each calendar quarter at a rate or rates

15 not to exceed the general level of short-term in16 terest rates.

17 ‘‘(B) REGULATIONS RELATING TO PAY18 MENTS AND DISTRIBUTION.—The Board may

19 prescribe regulations concerning—

20 ‘‘(i) the payment of earnings in ac21 cordance with this paragraph;

22 ‘‘(ii) the distribution of such earnings

23 to the depository institutions which main24 tain balances at such banks or on whose

25 behalf such balances are maintained; and
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1 ‘‘(iii) the responsibilities of depository

2 institutions, Federal home loan banks, and

3 the National Credit Union Administration

4 Central Liquidity Facility with respect to

5 the crediting and distribution of earnings

6 attributable to balances maintained, in ac7 cordance with subsection (c)(1)(A), in a

8 Federal reserve bank by any such entity on

9 behalf of depository institutions.

10 ‘‘(C) DEPOSITORY INSTITUTIONS DE11 FINED.—For purposes of this paragraph, the

12 term ‘depository institution’, in addition to the

13 institutions described in paragraph (1)(A), in14 cludes any trust company, corporation orga15 nized under section 25A or having an agree16 ment with the Board under section 25, or any

17 branch or agency of a foreign bank (as defined

18 in section 1(b) of the International Banking Act

19 of 1978).’’.

20 (b) AUTHORIZATION FOR PASS THROUGH RESERVES

21 FOR MEMBER BANKS.—Section 19(c)(1)(B) of the Fed22 eral Reserve Act (12 U.S.C. 461(c)(1)(B)) is amended by

23 striking ‘‘which is not a member bank’’.

24 (c) CONSUMER BANKING COSTS ASSESSMENT.—
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1 (1) IN GENERAL.—The Federal Reserve Act

2 (12 U.S.C. 221 et seq.) is amended—

3 (A) by redesignating sections 30 and 31 as

4 sections 31 and 32, respectively; and

5 (B) by inserting after section 29 the fol6 lowing new section:

7 ‘‘SEC. 30. SURVEY OF BANK FEES AND SERVICES.

8 ‘‘(a) ANNUAL SURVEY REQUIRED.—The Board of

9 Governors of the Federal Reserve System shall obtain an10 nually a sample, which is representative by type and size

11 of the institution (including small institutions) and geo12 graphic location, of the following retail banking services

13 and products provided by insured depository institutions

14 and insured credit unions (along with related fees and

15 minimum balances):

16 ‘‘(1) Checking and other transaction accounts.

17 ‘‘(2) Negotiable order of withdrawal and sav18 ings accounts.

19 ‘‘(3) Automated teller machine transactions.

20 ‘‘(4) Other electronic transactions.

21 ‘‘(b) MINIMUM SURVEY REQUIREMENT.—The annual

22 survey described in subsection (a) shall meet the following

23 minimum requirements:
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1 ‘‘(1) CHECKING AND OTHER TRANSACTION AC2 COUNTS.—Data on checking and transaction ac3 counts shall include, at a minimum, the following:

4 ‘‘(A) Monthly and annual fees and min5 imum balances to avoid such fees.

6 ‘‘(B) Minimum opening balances.

7 ‘‘(C) Check processing fees.

8 ‘‘(D) Check printing fees.

9 ‘‘(E) Balance inquiry fees.

10 ‘‘(F) Fees imposed for using a teller or

11 other institution employee.

12 ‘‘(G) Stop payment order fees.

13 ‘‘(H) Nonsufficient fund fees.

14 ‘‘(I) Overdraft fees.

15 ‘‘(J) Deposit items returned fees.

16 ‘‘(K) Availability of no-cost or low-cost ac17 counts for consumers who maintain low

18 balances.

19 ‘‘(2) NEGOTIABLE ORDER OF WITHDRAWAL AC20 COUNTS AND SAVINGS ACCOUNTS.—Data on nego21 tiable order of withdrawal accounts and savings ac22 counts shall include, at a minimum, the following:

23 ‘‘(A) Monthly and annual fees and min24 imum balances to avoid such fees.

25 ‘‘(B) Minimum opening balances.
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1 ‘‘(C) Rate at which interest is paid to con2 sumers.

3 ‘‘(D) Check processing fees for negotiable

4 order of withdrawal accounts.

5 ‘‘(E) Fees imposed for using a teller or

6 other institution employee.

7 ‘‘(F) Availability of no-cost or low-cost ac8 counts for consumers who maintain low

9 balances.

10 ‘‘(3) AUTOMATED TELLER TRANSACTIONS.—

11 Data on automated teller machine transactions shall

12 include, at a minimum, the following:

13 ‘‘(A) Monthly and annual fees.

14 ‘‘(B) Card fees.

15 ‘‘(C) Fees charged to customers for with16 drawals, deposits, and balance inquiries through

17 institution-owned machines.

18 ‘‘(D) Fees charged to customers for with19 drawals, deposits, and balance inquiries through

20 machines owned by others.

21 ‘‘(E) Fees charged to noncustomers for

22 withdrawals, deposits, and balance inquiries

23 through institution-owned machines.

24 ‘‘(F) Point-of-sale transaction fees.
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1 ‘‘(4) OTHER ELECTRONIC TRANSACTIONS.—

2 Data on other electronic transactions shall include,

3 at a minimum, the following:

4 ‘‘(A) Wire transfer fees.

5 ‘‘(B) Fees related to payments made over

6 the Internet or through other electronic means.

7 ‘‘(5) OTHER FEES AND CHARGES.—Data on

8 any other fees and charges that the Board of Gov9 ernors of the Federal Reserve System determines to

10 be appropriate to meet the purposes of this section.

11 ‘‘(6) FEDERAL RESERVE BOARD AUTHORITY.—

12 The Board of Governors of the Federal Reserve Sys13 tem may cease the collection of information with re14 gard to any particular fee or charge specified in this

15 subsection if the Board makes a determination that,

16 on the basis of changing practices in the financial

17 services industry, the collection of such information

18 is no longer necessary to accomplish the purposes of

19 this section.

20 ‘‘(c) ANNUAL REPORT TO CONGRESS REQUIRED.—

21 ‘‘(1) PREPARATION.—The Board of Governors

22 of the Federal Reserve System shall prepare a report

23 of the results of each survey conducted pursuant to

24 subsections (a) and (b) of this section and section

25 136(b)(1) of the Consumer Credit Protection Act.
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1 ‘‘(2) CONTENTS OF THE REPORT.—In addition

2 to the data required to be collected pursuant to sub3 sections (a) and (b), each report prepared pursuant

4 to paragraph (1) shall include a description of any

5 discernible trend, in the Nation as a whole, in a rep6 resentative sample of the 50 States (selected with

7 due regard for regional differences), and in each

8 consolidated metropolitan statistical area (as defined

9 by the Director of the Office of Management and

10 Budget), in the cost and availability of the retail

11 banking services, including those described in sub12 sections (a) and (b) (including related fees and min13 imum balances), that delineates differences between

14 institutions on the basis of the type of institution

15 and the size of the institution, between large and

16 small institutions of the same type, and any engage17 ment of the institution in multistate activity.

18 ‘‘(3) SUBMISSION TO CONGRESS.—The Board

19 of Governors of the Federal Reserve System shall

20 submit an annual report to the Congress not later

21 than June 1, 2005, and not later than June 1 of

22 each subsequent year.

23 ‘‘(d) DEFINITIONS.—For purposes of this section, the

24 term ‘insured depository institution’ has the meaning

25 given such term in section 3 of the Federal Deposit Insur-
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1 ance Act, and the term ‘insured credit union’ has the

2 meaning given such term in section 101 of the Federal

3 Credit Union Act.’’.

4 (2) CONFORMING AMENDMENT.—

5 (A) IN GENERAL.—Paragraph (1) of sec6 tion 136(b) of the Truth in Lending Act (15

7 U.S.C. 1646(b)(1)) is amended to read as fol8 lows:

9 ‘‘(1) COLLECTION REQUIRED.—The Board shall

10 collect, on a semiannual basis, from a broad sample

11 of financial institutions which offer credit card serv12 ices, credit card price and availability information

13 including—

14 ‘‘(A) the information required to be dis15 closed under section 127(c) of this chapter;

16 ‘‘(B) the average total amount of finance

17 charges paid by consumers; and

18 ‘‘(C) the following credit card rates and

19 fees:

20 ‘‘(i) Application fees.

21 ‘‘(ii) Annual percentage rates for cash

22 advances and balance transfers.

23 ‘‘(iii) Maximum annual percentage

24 rate that may be charged when an account

25 is in default.
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1 ‘‘(iv) Fees for the use of convenience

2 checks.

3 ‘‘(v) Fees for balance transfers.

4 ‘‘(vi) Fees for foreign currency con5 versions.’’.

6 (B) EFFECTIVE DATE.—The amendment

7 made by subparagraph (A) shall take effect on

8 January 1, 2004.

9 (3) REPEAL OF OTHER REPORT PROVISIONS.—

10 Section 1002 of Financial Institutions Reform, Re11 covery, and Enforcement Act of 1989 and section

12 108 of the Riegle-Neal Interstate Banking and

13 Branching Efficiency Act of 1994 are hereby re14 pealed.

15 (d) TECHNICAL AND CONFORMING AMENDMENTS.—

16 Section 19 of the Federal Reserve Act (12 U.S.C. 461)

17 is amended—

18 (1) in subsection (b)(4) (12 U.S.C. 461(b)(4)),

19 by striking subparagraph (C) and redesignating sub20 paragraphs (D) and (E) as subparagraphs (C) and

21 (D), respectively; and

22 (2) in subsection (c)(1)(A) (12 U.S.C.

23 461(c)(1)(A)), by striking ‘‘subsection (b)(4)(C)’’

24 and inserting ‘‘subsection (b)’’.
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1 SEC. 705. INCREASED FEDERAL RESERVE BOARD FLEXI2 BILITY IN SETTING RESERVE REQUIRE3 MENTS.

4 Section 19(b)(2)(A) of the Federal Reserve Act (12

5 U.S.C. 461(b)(2)(A)) is amended—

6 (1) in clause (i), by striking ‘‘the ratio of 3 per

7 centum’’ and inserting ‘‘a ratio not greater than 3

8 percent (and which may be zero)’’; and

9 (2) in clause (ii), by striking ‘‘and not less than

10 8 per centum,’’ and inserting ‘‘(and which may be

11 zero),’’.

12 SEC. 706. TRANSFER OF FEDERAL RESERVE SURPLUSES.

13 (a) IN GENERAL.—Section 7(b) of the Federal Re14 serve Act (12 U.S.C. 289(b)) is amended by adding at

15 the end the following new paragraph:

16 ‘‘(4) ADDITIONAL TRANSFERS TO COVER IN17 TEREST PAYMENTS FOR FISCAL YEARS 2003

18 THROUGH 2007.—

19 ‘‘(A) IN GENERAL.—In addition to the

20 amounts required to be transferred from the

21 surplus funds of the Federal reserve banks pur22 suant to subsection (a)(3), the Federal reserve

23 banks shall transfer from such surplus funds to

24 the Board of Governors of the Federal Reserve

25 System for transfer to the Secretary of the

26 Treasury for deposit in the general fund of the
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1 Treasury, such sums as are necessary to equal

2 the net cost of section 19(b)(12) in each of the

3 fiscal years 2003 through 2007.

4 ‘‘(B) ALLOCATION BY FEDERAL RESERVE

5 BOARD.—Of the total amount required to be

6 paid by the Federal reserve banks under sub7 paragraph (A) for fiscal years 2003 through

8 2007, the Board of Governors of the Federal

9 Reserve System shall determine the amount

10 each such bank shall pay in such fiscal year.

11 ‘‘(C) REPLENISHMENT OF SURPLUS FUND

12 PROHIBITED.—During fiscal years 2003

13 through 2007, no Federal reserve bank may re14 plenish such bank’s surplus fund by the amount

15 of any transfer by such bank under subpara16 graph (A).’’.

17 (b) TECHNICAL AND CONFORMING AMENDMENT.—

18 Section 7(a) of the Federal Reserve Act (12 U.S.C.

19 289(a)) is amended by adding at the end the following

20 new paragraph:

21 ‘‘(3) PAYMENT TO TREASURY.—During fiscal

22 years 2003 through 2007, any amount in the sur23 plus fund of any Federal reserve bank in excess of

24 the amount equal to 3 percent of the paid-in capital

25 and surplus of the member banks of such bank shall
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1 be transferred to the Secretary of the Treasury for

2 deposit in the general fund of the Treasury.’’.

3 SEC. 707. RULE OF CONSTRUCTION.

4 In the case of an escrow account maintained at a de5 pository institution in connection with a real estate

6 transaction—

7 (1) the absorption, by the depository institution,

8 of expenses incidental to providing a normal banking

9 service with respect to such escrow account;

10 (2) the forbearance, by the depository institu11 tion, from charging a fee for providing any such

12 banking function; and

13 (3) any benefit which may accrue to the holder

14 or the beneficiary of such escrow account as a result

15 of an action of the depository institution described

16 in subparagraph (1) or (2) or similar in nature to

17 such action,

18 shall not be treated as the payment or receipt of interest

19 for purposes of this Act and any provision of Public Law

20 93–100, the Federal Reserve Act, the Home Owners’ Loan

21 Act, or the Federal Deposit Insurance Act relating to the

22 payment of interest on accounts or deposits at depository

23 institutions, provided, however, that nothing herein shall

24 be construed so as to require a depository institution that

25 maintains an escrow account in connection with a real es-
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1 tate transaction to pay interest on such escrow account

2 or to prohibit such institution from paying interest on

3 such escrow account. Nor shall anything herein be con4 strued to preempt the provisions of law of any State deal5 ing with the payment of interest on escrow accounts main6 tained in connection with real estate transactions.

7 TITLE VIII—CLERICAL AND

8 TECHNICAL AMENDMENTS

9 SEC. 801. CLERICAL AMENDMENTS TO THE HOME OWNERS’

10 LOAN ACT.

11 (a) AMENDMENT TO TABLE OF CONTENTS.—The

12 table of contents in section 1 of the Home Owners’ Loan

13 Act (12 U.S.C. 1461) is amended by striking the items

14 relating to sections 5 and 6 and inserting the following

15 new items:

‘‘Sec. 5. Savings associations.

‘‘Sec. 6. [Repealed.]’’.

16 (b) CLERICAL AMENDMENTS TO HEADINGS.—

17 (1) The heading for section 4(a) of the Home

18 Owners’ Loan Act (12 U.S.C. 1463(a)) is amended

19 by striking ‘‘(a) FEDERAL SAVINGS ASSOCIA20 TIONS.—’’ and inserting ‘‘(a) GENERAL RESPON21 SIBILITIES OF THE DIRECTOR.—’’.

22 (2) The section heading for section 5 of the

23 Home Owners’ Loan Act (12 U.S.C. 1464) is

24 amended to read as follows:
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1 ‘‘SEC. 5. SAVINGS ASSOCIATIONS.’’.

2 SEC. 802. TECHNICAL CORRECTIONS TO THE FEDERAL

3 CREDIT UNION ACT.

4 The Federal Credit Union Act (12 U.S.C. 1751 et

5 seq.) is amended as follows:

6 (1) In section 101(3), strike ‘‘and’’ after the

7 semicolon.

8 (2) In section 101(5), strike the terms ‘‘account

9 account’’ and ‘‘account accounts’’ each place any

10 such term appears and insert ‘‘account’’.

11 (3) In section 107(a)(5)(E) (as so designated

12 by section 303 of this Act), strike the period at the

13 end and insert a semicolon.

14 (4) In paragraphs (6) and (7) of section 107(a)

15 (as so designated by section 303 of this Act), strike

16 the period at the end and insert a semicolon.

17 (5) In section 107(a)(7)(D) (as so designated

18 by section 303 of this Act), strike ‘‘the Federal Sav19 ings and Loan Insurance Corporation or’’.

20 (6) In section 107(a)(7)(E) (as so designated

21 by section 303 of this Act), strike ‘‘the Federal

22 Home Loan Bank Board,’’ and insert ‘‘the Federal

23 Housing Finance Board,’’.

24 (7) In section 107(a)(9) (as so designated by

25 section 303 of this Act), strike ‘‘subchapter III’’ and

26 insert ‘‘title III’’.
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1 (8) In section 107(a)(13) (as so designated by

2 section 303 of this Act), strike the ‘‘and’’ after the

3 semicolon at the end.

4 (9) In section 109(c)(2)(A)(i), strike ‘‘(12

5 U.S.C. 4703(16))’’.

6 (10) In section 120(h), strike ‘‘under the Act

7 approved July 30, 1947 (6 U.S.C., secs. 6–13),’’ and

8 insert ‘‘chapter 93 of title 31, United States Code,’’.

9 (11) In section 201(b)(5), strike ‘‘section 116

10 of’’.

11 (12) In section 202(h)(3), strike ‘‘section

12 207(c)(1)’’ and insert ‘‘section 207(k)(1)’’.

13 (13) In section 204(b), strike ‘‘such others pow14 ers’’ and insert ‘‘such other powers’’.

15 (14) In section 206(e)(3)(D), strike ‘‘and’’ after

16 the semicolon at the end.

17 (15) In section 206(f)(1), strike ‘‘subsection

18 (e)(3)(B)’’ and insert ‘‘subsection (e)(3)’’.

19 (16) In section 206(g)(7)(D), strike ‘‘and sub20 section (1)’’.

21 (17) In section 206(t)(2)(B), insert ‘‘regula22 tions’’ after ‘‘as defined in’’.

23 (18) In section 206(t)(2)(C), strike ‘‘material

24 affect’’ and insert ‘‘material effect’’.
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1 (19) In section 206(t)(4)(A)(ii)(II), strike ‘‘or’’

2 after the semicolon at the end.

3 (20) In section 206A(a)(2)(A), strike ‘‘regulator

4 agency’’ and insert ‘‘regulatory agency’’.

5 (21) In section 207(c)(5)(B)(i)(I), insert ‘‘and’’

6 after the semicolon at the end.

7 (22) In section 207(c)(8)(D)(ii)(I), insert a

8 closing parenthesis after ‘‘Act of 1934’’.

9 (23) In the heading for subparagraph (A) of

10 section 207(d)(3), strike ‘‘TO’’ and insert ‘‘WITH’’.

11 (24) In section 207(f)(3)(A), strike ‘‘category

12 or claimants’’ and insert ‘‘category of claimants’’.

13 (25) In section 209(a)(8), strike the period at

14 the end and insert a semicolon.

15 (26) In section 216(n), insert ‘‘any action’’ be16 fore ‘‘that is required’’.

17 (27) In section 304(b)(3), strike ‘‘the affairs or

18 such credit union’’ and insert ‘‘the affairs of such

19 credit union’’.

20 (28) In section 310, strike ‘‘section 102(e)’’ and

21 insert ‘‘section 102(d)’’.

22 SEC. 803. OTHER TECHNICAL CORRECTIONS.

23 (a) Section 1306 of title 18, United States Code, is

24 amended by striking ‘‘5136A’’ and inserting ‘‘5136B’’.
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1 (b) Section 5239 of the Revised Statutes of the

2 United States (12 U.S.C. 93) is amended by redesignating

3 the second of the 2 subsections designated as subsection

4 (d) (as added by section 331(b)(3) of the Riegle Commu5 nity Development and Regulatory Improvement Act of

6 1994) as subsection (e).

7 SEC. 804. REPEAL OF OBSOLETE PROVISIONS OF THE BANK

8 HOLDING COMPANY ACT OF 1956.

9 (a) IN GENERAL.—Section 2 of the Bank Holding

10 Company Act of 1956 (12 U.S.C. 1841) is amended—

11 (1) in subsection (c)(2), by striking subpara12 graphs (I) and (J); and

13 (2) by striking subsection (m) and inserting the

14 following new subsection:

15 ‘‘(m) [Repealed]’’.

16 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

17 Paragraphs (1) and (2) of section 4(h) of the Bank Hold18 ing Company Act of 1956 (12 U.S.C. 1843(h)) are each

19 amended by striking ‘‘(G), (H), (I), or (J) of section

20 2(c)(2)’’ and inserting ‘‘(G), or (H) of section 2(c)(2)’’.

Passed the House of Representatives March 18,

2004.

Attest:

Clerk.