109TH CONGRESS 

2D SESSION H. R. 3505

AN ACT

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

109TH CONGRESS 

2D SESSION H. R. 3505

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 2005’’. 

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. 

Sec. 111. Capital equivalency deposits for Federal branches and agencies of foreign banks. 

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

TITLE II—SAVINGS ASSOCIATION PROVISIONS 

Sec. 201. Parity for savings associations under the Securities Exchange Act of 

1934 and the Investment Advisers Act of 1940. 

Sec. 202. Investments by Federal savings associations authorized to promote 

the public welfare. 

Sec. 203. Mergers and consolidations of Federal savings associations with nondepository institution affiliates. 

Sec. 204. Repeal of statutory dividend notice requirement for savings association subsidiaries of savings and loan holding companies. 

Sec. 205. Modernizing statutory authority for trust ownership of savings associations. 

Sec. 206. Repeal of overlapping rules governing purchased mortgage servicing 

rights. 

Sec. 207. Restatement of authority for Federal savings associations to invest in 

small business investment companies. 

Sec. 208. Removal of limitation on investments in auto loans. 

Sec. 209. Selling and offering of deposit products. 

Sec. 210. Funeral- and cemetery-related fiduciary services. 

Sec. 211. Repeal of qualified thrift lender requirement with respect to out-ofstate branches. 

Sec. 212. Small business and other commercial loans. 
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Sec. 213. Clarifying citizenship of Federal savings associations for Federal 

court jurisdiction. 

Sec. 214. Increase in limits on commercial real estate loans. 

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

Sec. 216. Savings association credit card banks. 

Sec. 217. Interstate acquisitions by S&L holding companies. 

Sec. 218. Business organization flexibility for federal savings associations. 

TITLE III—CREDIT UNION PROVISIONS 

Sec. 301. Privately insured credit unions authorized to become members of a 

Federal home loan bank. 

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

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

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

loans to 15 years. 

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

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

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

membership. 

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

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

Sec. 310. Credit union governance. 

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

flexibility in responding to market conditions. 

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

Act. 

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

laws. 

Sec. 314. Clarification of definition of net worth under certain circumstances 

for purposes of prompt corrective action. 

Sec. 315. Amendments relating to nonfederally insured credit unions. 

TITLE IV—DEPOSITORY INSTITUTION PROVISIONS 

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

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

for depository institutions. 

Sec. 403. Reporting requirements relating to insider lending. 

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

Management Interlocks Act. 

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

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

Sec. 407. Cross guarantee authority. 

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

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

Sec. 410. Community reinvestment credit for esops and ewocs. 

Sec. 411. Minority financial institutions. 

TITLE V—DEPOSITORY INSTITUTION AFFILIATES PROVISIONS 
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Sec. 501. Clarification of cross marketing provision. 

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

concerning the imputation of control of shares of a company 

by trustees. 

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

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

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

Sec. 506. Credit card bank investments for the public welfare. 

TITLE VI—BANKING AGENCY PROVISIONS 

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

Sec. 602. Interagency data sharing. 

Sec. 603. Penalty for unauthorized participation by convicted individual. 

Sec. 604. Amendment permitting the destruction of old records of a depository 

institution by the FDIC after the appointment of the FDIC as 

receiver. 

Sec. 605. Modernization of recordkeeping requirement. 

Sec. 606. Streamlining reports of condition. 

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

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

Sec. 609. Clarification of extent of suspension, removal, and prohibition authority of Federal banking agencies in cases of certain crimes by 

institution-affiliated parties. 

Sec. 610. Streamlining depository institution merger application requirements. 

Sec. 611. Inclusion of Director of the Office of Thrift Supervision in list of 

banking agencies regarding insurance customer protection regulations. 

Sec. 612. Protection of confidential information received by Federal banking 

regulators from foreign banking supervisors. 

Sec. 613. Prohibition on participation by convicted individual. 

Sec. 614. Clarification that notice after separation from service may be made 

by an order. 

Sec. 615. Enforcement against misrepresentations regarding FDIC deposit insurance coverage. 

Sec. 616. Changes required to small bank holding company policy statement on 

assessment of financial and managerial factors. 

Sec. 617. Exception to annual privacy notice requirement under the GrammLeach-Bliley Act. 

Sec. 618. Biennial reports on the status of agency employment of minorities 

and women. 

Sec. 619. Coordination of State examination authority. 

Sec. 620. Nonwaiver of privileges. 

Sec. 621. Right to Financial Privacy Act of 1978 amendment. 

Sec. 622. Deputy director; succession authority for Director of the Office of 

Thrift Supervision. 

Sec. 623. Limitation on scope of new agency guidelines. 

TITLE VII—‘‘BSA’’ COMPLIANCE BURDEN REDUCTION 

Sec. 701. Exception from currency transaction reports for seasoned customers. 

Sec. 702. Reduction in inconsistencies in monetary transaction recordkeeping 

and reporting enforcement and examination requirements. 
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Sec. 703. Additional reforms relating to monetary transaction and recordkeeping requirements applicable to financial institutions. 

Sec. 704. Study by Comptroller General. 

Sec. 705. Feasibility study required. 

Sec. 706. Annual report by Secretary of the Treasury. 

Sec. 707. Preservation of money services businesses. 

TITLE VIII—CLERICAL AND TECHNICAL AMENDMENTS 

Sec. 801. Clerical amendments to the Home Owners’ Loan Act. 

Sec. 802. Technical corrections to the Federal Credit Union Act. 

Sec. 803. Other technical corrections. 

Sec. 804. Repeal of obsolete provisions of the Bank Holding Company Act of 

1956. 

TITLE IX—FAIR DEBT COLLECTION PRACTICES ACT 

AMENDMENTS 

Sec. 901. Exception for certain bad check enforcement programs. 

Sec. 902. Other amendments.

1 TITLE I—NATIONAL BANK 

2 PROVISIONS 

3 SEC. 101. NATIONAL BANK DIRECTORS. 

4 (a) IN GENERAL.—Section 5146 of the Revised Stat5 utes of the United States (12 U.S.C. 72) is amended—

6 (1) by striking ‘‘SEC. 5146. Every director 

7 must during’’ and inserting the following: 

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

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

10 a national bank shall, during’’; 

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

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

13 and inserting ‘‘total number of directors. 

14 ‘‘(b) INVESTMENT REQUIREMENT.—

15 ‘‘(1) IN GENERAL.—Every director of a na16 tional bank shall own, in his or her own right,’’; and 
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1 (3) by adding at the end the following new 

2 paragraph: 

3 ‘‘(2) EXCEPTION FOR SUBORDINATED DEBT IN

4 CERTAIN CASES.—In lieu of the requirements of 

5 paragraph (1) relating to the ownership of capital 

6 stock in the national bank, the Comptroller of the 

7 Currency may, by regulation or order, permit an in8 dividual to serve as a director of a national bank 

9 that has elected, or notifies the Comptroller of the 

10 bank’s intention to elect, to operate as a S corpora11 tion pursuant to section 1362(a) of the Internal 

12 Revenue Code of 1986, if that individual holds debt 

13 of at least $1,000 issued by the national bank that 

14 is subordinated to the interests of depositors and 

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

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

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

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

19 striking the item relating to section 5146 and inserting 

20 the following new item:

‘‘5146. Requirements for bank directors.’’.

21 SEC. 102. VOTING IN SHAREHOLDER ELECTIONS. 

22 Section 5144 of the Revised Statutes of the United 

23 States (12 U.S.C. 61) is amended—
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1 (1) by striking ‘‘or to cumulate’’ and inserting 

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

3 the national bank, to cumulate’’; 

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

5 shall equal’’; and 

6 (3) by adding at the end the following new sen7 tence: ‘‘The Comptroller of the Currency may pre8 scribe such regulations to carry out the purposes of 

9 this section as the Comptroller determines to be ap10 propriate.’’. 

11 SEC. 103. SIMPLIFYING DIVIDEND CALCULATIONS FOR NA12 TIONAL BANKS. 

13 (a) IN GENERAL.—Section 5199 of the Revised Stat14 utes of the United States (12 U.S.C. 60) is amended to 

15 read as follows: 

16 ‘‘SEC. 5199. NATIONAL BANK DIVIDENDS. 

17 ‘‘(a) IN GENERAL.—Subject to subsection (b), the di18 rectors of any national bank may declare a dividend of 

19 so much of the undivided profits of the bank as the direc20 tors judge to be expedient. 

21 ‘‘(b) APPROVAL REQUIRED UNDER CERTAIN CIR22 CUMSTANCES.—A national bank may not declare and pay 

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

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

25 year and the retained net income of the bank in the pre-
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1 ceding two years, minus any transfers required by the 

2 Comptroller of the Currency (including any transfers re3 quired to be made to a fund for the retirement of any 

4 preferred stock), unless the Comptroller of the Currency 

5 approves the declaration and payment of dividends in ex6 cess of such amount.’’. 

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

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

9 the United States is amended by striking the item relating 

10 to section 5199 and inserting the following new item:

‘‘5199. National bank dividends.’’.

11 SEC. 104. REPEAL OF OBSOLETE LIMITATION ON REMOVAL 

12 AUTHORITY OF THE COMPTROLLER OF THE 

13 CURRENCY. 

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

15 (12 U.S.C. 1818(e)(4)) is amended by striking the 5th 

16 sentence. 

17 SEC. 105. REPEAL OF INTRASTATE BRANCH CAPITAL RE18 QUIREMENTS. 

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

20 States (12 U.S.C. 36(c)) is amended—

21 (1) in the 2nd sentence, by striking ‘‘, without 

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

23 and 

24 (2) by striking the last sentence. 
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1 SEC. 106. CLARIFICATION OF WAIVER OF PUBLICATION RE2 QUIREMENTS FOR BANK MERGER NOTICES. 

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

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

5 215(a) and 215a(a)(2), respectively) are each amended by 

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

7 where the Comptroller determines that an emergency ex8 ists justifying such waiver, by unanimous action of the 

9 shareholders of the association or State bank’’ and insert10 ing ‘‘Publication of notice may be waived if the Comp11 troller determines that an emergency exists justifying such 

12 waiver or if the shareholders of the association or State 

13 bank agree by unanimous action to waive the publication 

14 requirement for their respective institutions’’. 

15 SEC. 107. EQUAL TREATMENT FOR FEDERAL AGENCIES OF 

16 FOREIGN BANKS. 

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

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

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

20 after ‘‘deposits’’. 

21 SEC. 108. MAINTENANCE OF A FEDERAL BRANCH AND A 

22 FEDERAL AGENCY IN THE SAME STATE. 

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

24 1978 (12 U.S.C. 3102(e)) is amended by inserting ‘‘if the 

25 maintenance of both an agency and a branch in the State 
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1 is prohibited under the law of such State’’ before the pe2 riod at the end. 

3 SEC. 109. BUSINESS ORGANIZATION FLEXIBILITY FOR NA4 TIONAL BANKS. 

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

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

7 seq.) is amended by inserting after section 5136B the fol8 lowing new section: 

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

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

11 may prescribe regulations—

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

13 other than as a body corporate; and 

14 ‘‘(2) to provide requirements for the organiza15 tional characteristics of a national bank organized 

16 and operating other than as a body corporate, con17 sistent with the safety and soundness of the national 

18 bank. 

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

20 regulations prescribed under subsection (a), a national 

21 bank that is operating other than as a body corporate shall 

22 have the same rights and privileges and shall be subject 

23 to the same duties, restrictions, penalties, liabilities, condi24 tions, and limitations as a national bank that is organized 

25 as a body corporate.’’. 
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1 (b) TECHNICAL AND CONFORMING AMENDMENT.—

2 Section 5136 of the Revised Statutes of the United States 

3 (12 U.S.C. 24) is amended, in the matter preceding the 

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

5 other form of business organization provided under regula6 tions prescribed by the Comptroller of the Currency under 

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

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

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

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

11 inserting after the item relating to section 5136B the fol12 lowing new item:

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

13 SEC. 110. CLARIFICATION OF THE MAIN PLACE OF BUSI14 NESS OF A NATIONAL BANK. 

15 Title LXII of the Revised Statutes of the United 

16 States is amended—

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

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

19 place where its operations of discount and deposit 

20 are to be carried on’’ and inserting ‘‘The place 

21 where the main office of the national bank is, or is 

22 to be, located’’; and 

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

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

25 and inserting ‘‘the main office of the national bank’’. 
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1 SEC. 111. CAPITAL EQUIVALENCY DEPOSITS FOR FEDERAL 

2 BRANCHES AND AGENCIES OF FOREIGN 

3 BANKS. 

4 Section 4(g) of the International Banking Act of 

5 1978 (12 U.S.C. 3102(g)) is amended to read as follows: 

6 ‘‘(g) CAPITAL EQUIVALENCY DEPOSIT.—

7 ‘‘(1) IN GENERAL.—Upon the opening of a 

8 Federal branch or agency of a foreign bank in any 

9 State and thereafter, the foreign bank, in addition to 

10 any deposit requirements imposed under section 6, 

11 shall keep on deposit, in accordance with such regu12 lations as the Comptroller of the Currency may pre13 scribe in accordance with paragraph (2), dollar de14 posits, investment securities, or other assets in such 

15 amounts as the Comptroller of the Currency deter16 mines to be necessary for the protection of deposi17 tors and other investors and to be consistent with 

18 the principles of safety and soundness. 

19 ‘‘(2) LIMITATION.—Notwithstanding paragraph 

20 (1), regulations prescribed under such paragraph 

21 shall not permit a foreign bank to keep assets on de22 posit in an amount that is less than the amount re23 quired for a State licensed branch or agency of a 

24 foreign bank under the laws and regulations of the 

25 State in which the Federal agency or branch is lo26 cated.’’. 
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1 SEC. 112. ENHANCING THE AUTHORITY FOR NATIONAL 

2 BANKS TO MAKE COMMUNITY DEVELOPMENT 

3 INVESTMENTS. 

4 The last sentence in the paragraph designated as the 

5 ‘‘Eleventh.’’ of section 5136 of the Revised Statutes of the 

6 United States (12 U.S.C. 24) is amended by striking ‘‘10 

7 percent’’ each place such term appears and inserting ‘‘15 

8 percent’’. 

9 TITLE II—SAVINGS ASSOCIATION 

10 PROVISIONS 

11 SEC. 201. PARITY FOR SAVINGS ASSOCIATIONS UNDER THE 

12 SECURITIES EXCHANGE ACT OF 1934 AND 

13 THE INVESTMENT ADVISERS ACT OF 1940. 

14 (a) SECURITIES EXCHANGE ACT OF 1934.—

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

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

17 78c(a)(6)) is amended—

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

19 a Federal savings association, as defined in sec20 tion 2(5) of the Home Owners’ Loan Act’’ after 

21 ‘‘a banking institution organized under the laws 

22 of the United States’’; and 

23 (B) in subparagraph (C)—

24 (i) by inserting ‘‘or savings associa25 tion as defined in section 2(4) of the Home 
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1 Owners’ Loan Act,’’ after ‘‘banking insti2 tution,’’; and 

3 (ii) by inserting ‘‘or savings associa4 tions’’ after ‘‘having supervision over 

5 banks’’. 

6 (2) INCLUDE OTS UNDER THE DEFINITION OF

7 APPROPRIATE REGULATORY AGENCY FOR CERTAIN

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

9 U.S.C. 78c(a)(34)) is amended—

10 (A) in subparagraph (A)—

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

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

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

14 clause (iii); 

15 (iii) by redesignating clause (iv) as 

16 clause (v); and 

17 (iv) by inserting the following new 

18 clause after clause (iii): 

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

20 Thrift Supervision, in the case of a savings 

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

22 the Federal Deposit Insurance Act (12 

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

24 insured by the Federal Deposit Insurance 

25 Corporation, a subsidiary or a department 
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1 or division of any such savings association, 

2 or a savings and loan holding company; 

3 and’’; 

4 (B) in subparagraph (B)—

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

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

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

8 clause (iii); 

9 (iii) by redesignating clause (iv) as 

10 clause (v); and 

11 (iv) by inserting the following new 

12 clause after clause (iii): 

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

14 Thrift Supervision, in the case of a savings 

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

16 the Federal Deposit Insurance Act (12 

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

18 insured by the Federal Deposit Insurance 

19 Corporation, or a subsidiary of any such 

20 savings association, or a savings and loan 

21 holding company; and’’; 

22 (C) in subparagraph (C)—

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

24 (iii)’’ and inserting ‘‘(i), (iii), or (iv)’’; 
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1 (ii) by striking ‘‘and’’ at the end of 

2 clause (iii); 

3 (iii) by redesignating clause (iv) as 

4 clause (v); and 

5 (iv) by inserting the following new 

6 clause after clause (iii): 

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

8 Thrift Supervision, in the case of a savings 

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

10 the Federal Deposit Insurance Act (12 

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

12 insured by the Federal Deposit Insurance 

13 Corporation, a savings and loan holding 

14 company, or a subsidiary of a savings and 

15 loan holding company when the appro16 priate regulatory agency for such clearing 

17 agency is not the Commission; and’’; 

18 (D) in subparagraph (D)—

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

20 clause (ii); 

21 (ii) by redesignating clause (iii) as 

22 clause (iv); and 

23 (iii) by inserting the following new 

24 clause after clause (ii): 
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1 ‘‘(iii) the Director of the Office of 

2 Thrift Supervision, in the case of a savings 

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

4 the Federal Deposit Insurance Act (12 

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

6 insured by the Federal Deposit Insurance 

7 Corporation; and’’; 

8 (E) in subparagraph (F)—

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

10 and (iv) as clauses (iii), (iv), and (v), re11 spectively; and 

12 (ii) by inserting the following new 

13 clause after clause (i): 

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

15 Thrift Supervision, in the case of a savings 

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

17 the Federal Deposit Insurance Act (12 

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

19 insured by the Federal Deposit Insurance 

20 Corporation; and’’; 

21 (F) by moving subparagraph (H) and in22 serting such subparagraph after subparagraph 

23 (G); and 

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

25 sentence: ‘‘As used in this paragraph, the term 
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1 ‘savings and loan holding company’ has the 

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

3 Owners’ Loan Act (12 U.S.C. 1467a(a)).’’. 

4 (b) INVESTMENT ADVISERS ACT OF 1940.—

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

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

7 80b–2(a)(2)) is amended—

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

9 a Federal savings association, as defined in sec10 tion 2(5) of the Home Owners’ Loan Act’’ after 

11 ‘‘a banking institution organized under the laws 

12 of the United States’’; and 

13 (B) in subparagraph (C)—

14 (i) by inserting ‘‘, savings association 

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

16 Owners’ Loan Act,’’ after ‘‘banking insti17 tution’’; and 

18 (ii) by inserting ‘‘or savings associa19 tions’’ after ‘‘having supervision over 

20 banks’’. 

21 (2) CONFORMING AMENDMENTS.—Subsections 

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

23 210A of such Act (15 U.S.C. 80b–10a), as added by 

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

25 each amended by striking ‘‘bank holding company’’ 
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1 each place it occurs and inserting ‘‘bank holding 

2 company or savings and loan holding company’’. 

3 (c) CONFORMING AMENDMENT TO THE INVESTMENT

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

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

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

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

8 one savings and loan holding company (together with its 

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

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

11 SEC. 202. INVESTMENTS BY FEDERAL SAVINGS ASSOCIA12 TIONS AUTHORIZED TO PROMOTE THE PUB13 LIC WELFARE. 

14 (a) IN GENERAL.—Section 5(c)(3) of the Home Own15 ers’ Loan Act (12 U.S.C. 1464(c)) is amended by adding 

16 at the end the following new subparagraph: 

17 ‘‘(D) DIRECT INVESTMENTS TO PROMOTE

18 THE PUBLIC WELFARE.—

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

20 association may make investments de21 signed primarily to promote the public wel22 fare, including the welfare of low- and 

23 moderate-income communities or families 

24 through the provision of housing, services, 

25 and jobs. 
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1 ‘‘(ii) DIRECT INVESTMENTS OR ACQUI2 SITION OF INTEREST IN OTHER COMPA3 NIES.—Investments under clause (i) may 

4 be made directly or by purchasing interests 

5 in an entity primarily engaged in making 

6 such investments. 

7 ‘‘(iii) PROHIBITION ON UNLIMITED LI8 ABILITY.—No investment may be made 

9 under this subparagraph which would sub10 ject a Federal savings association to unlim11 ited liability to any person. 

12 ‘‘(iv) SINGLE INVESTMENT LIMITA13 TION TO BE ESTABLISHED BY DIREC14 TOR.—Subject to clauses (v) and (vi), the 

15 Director shall establish, by order or regula16 tion, limits on—

17 ‘‘(I) the amount any savings as18 sociation may invest in any 1 project; 

19 and 

20 ‘‘(II) the aggregate amount of in21 vestment of any savings association 

22 under this subparagraph. 

23 ‘‘(v) FLEXIBLE AGGREGATE INVEST24 MENT LIMITATION.—The aggregate 

25 amount of investments of any savings asso-
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1 ciation under this subparagraph may not 

2 exceed an amount equal to the sum of 5 

3 percent of the savings association’s capital 

4 stock actually paid in and unimpaired and 

5 5 percent of the savings association’s 

6 unimpaired surplus, unless—

7 ‘‘(I) the Director determines that 

8 the savings association is adequately 

9 capitalized; and 

10 ‘‘(II) the Director determines, by 

11 order, that the aggregate amount of 

12 investments in a higher amount than 

13 the limit under this clause will pose 

14 no significant risk to the affected de15 posit insurance fund. 

16 ‘‘(vi) MAXIMUM AGGREGATE INVEST17 MENT LIMITATION.—Notwithstanding 

18 clause (v), the aggregate amount of invest19 ments of any savings association under 

20 this subparagraph may not exceed an 

21 amount equal to the sum of 15 percent of 

22 the savings association’s capital stock actu23 ally paid in and unimpaired and 15 per24 cent of the savings association’s 

25 unimpaired surplus. 
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1 ‘‘(vii) INVESTMENTS NOT SUBJECT TO

2 OTHER LIMITATION ON QUALITY OF IN3 VESTMENTS.—No obligation a Federal sav4 ings association acquires or retains under 

5 this subparagraph shall be taken into ac6 count for purposes of the limitation con7 tained in section 28(d) of the Federal De8 posit Insurance Act on the acquisition and 

9 retention of any corporate debt security 

10 not of investment grade.’’. 

11 (b) TECHNICAL AND CONFORMING AMENDMENT.—

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

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

14 ‘‘(A) [Repealed].’’. 

15 SEC. 203. MERGERS AND CONSOLIDATIONS OF FEDERAL 

16 SAVINGS ASSOCIATIONS WITH NONDEPOSI17 TORY INSTITUTION AFFILIATES. 

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

19 U.S.C. 1464(d)(3)) is amended—

20 (1) by redesignating subparagraph (B) as sub21 paragraph (C); and 

22 (2) by inserting after subparagraph (A) the fol23 lowing new subparagraph: 
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•HR 3505 EH 

1 ‘‘(B) MERGERS AND CONSOLIDATIONS

2 WITH NONDEPOSITORY INSTITUTION AFFILI3 ATES.—

4 ‘‘(i) IN GENERAL.—Upon the approval 

5 of the Director, a Federal savings associa6 tion may merge with any nondepository in7 stitution affiliate of the savings associa8 tion. 

9 ‘‘(ii) RULE OF CONSTRUCTION.—No 

10 provision of clause (i) shall be construed 

11 as—

12 ‘‘(I) affecting the applicability of 

13 section 18(c) of the Federal Deposit 

14 Insurance Act; or 

15 ‘‘(II) granting a Federal savings 

16 association any power or any author17 ity to engage in any activity that is 

18 not authorized for a Federal savings 

19 association under any other provision 

20 of this Act or any other provision of 

21 law.’’. 
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1 SEC. 204. REPEAL OF STATUTORY DIVIDEND NOTICE RE2 QUIREMENT FOR SAVINGS ASSOCIATION SUB3 SIDIARIES OF SAVINGS AND LOAN HOLDING 

4 COMPANIES. 

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

6 U.S.C. 1467a(f)) is amended to read as follows: 

7 ‘‘(f) DECLARATION OF DIVIDEND.—The Director 

8 may—

9 ‘‘(1) require a savings association that is a sub10 sidiary of a savings and loan holding company to 

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

12 savings association to pay a dividend on its guar13 anty, permanent, or other nonwithdrawable stock; 

14 and 

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

16 dividends by such a savings association.’’. 

17 SEC. 205. MODERNIZING STATUTORY AUTHORITY FOR 

18 TRUST OWNERSHIP OF SAVINGS ASSOCIA19 TIONS. 

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

21 Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(C)) is amend22 ed—

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

24 trust,’’; and 

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

26 its terms it must terminate within 25 years or not 
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1 later than 21 years and 10 months after the death 

2 of individuals living on the effective date of the 

3 trust,’’ after ‘‘or similar organization,’’. 

4 (b) TECHNICAL AND CONFORMING AMENDMENT.—

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

6 U.S.C. 1467a(a)(3)) is amended—

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

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

9 such term appears in subparagraph (A) and insert10 ing ‘‘does not include any company by virtue’’; 

11 (2) by striking ‘‘; and’’ at the end of subpara12 graph (A) and inserting a period; and 

13 (3) by striking subparagraph (B). 

14 SEC. 206. REPEAL OF OVERLAPPING RULES GOVERNING 

15 PURCHASED MORTGAGE SERVICING RIGHTS. 

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

17 U.S.C. 1464(t)) is amended—

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

19 following new paragraph: 

20 ‘‘(4) [Repealed].’’; and 

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

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

23 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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•HR 3505 EH 

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 1934 

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

12 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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•HR 3505 EH 

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 
30

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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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•HR 3505 EH 

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 cit26 izen only of the States in which such savings association 
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•HR 3505 EH 

1 has its home office and its principal place of business (if 

2 the principal place of business is in a different State than 

3 the home office).’’. 

4 SEC. 214. INCREASE IN LIMITS ON COMMERCIAL REAL ES5 TATE LOANS. 

6 Section 5(c)(2)(B)(i) of the Home Owners’ Loan Act 

7 (12 U.S.C. 1464(c)(2)(B)(i)) is amended by striking ‘‘400 

8 percent’’ and inserting ‘‘500 percent’’. 

9 SEC. 215. REPEAL OF ONE LIMIT ON LOANS TO ONE BOR10 ROWER. 

11 Subparagraph (A) of section 5(u)(2) of the Home 

12 Owners’ Loan Act (12 U.S.C. 1464(u)(2)(A)) is amend13 ed—

14 (1) by striking subclause (I) of clause (ii); 

15 (2) by redesignating subclauses (II), (III), (IV), 

16 and (V) of clause (ii) as subclauses (I), (II), (III), 

17 and (IV), respectively; 

18 (3) in clause (i)—

19 (A) by striking ‘‘for any’’ and inserting 

20 ‘‘For any’’; and 

21 (B) by striking ‘‘; or’’ and inserting a pe22 riod; and 

23 (4) in clause (ii), by striking ‘‘to develop domes24 tic’’ and inserting ‘‘To develop domestic’’. 
33

•HR 3505 EH 

1 SEC. 216. SAVINGS ASSOCIATION CREDIT CARD BANKS. 

2 Section 10(a)(1)(A) of the Home Owners’ Loan Act 

3 (12 U.S.C. 1467a(a)(1)(A)) is amended by inserting ‘‘and 

4 such term does not include an institution described in sec5 tion 2(c)(2)(F) of the Bank Holding Company Act of 1956 

6 for purposes of subsections (a)(1)(E), (c)(3)(B)(i), 

7 (c)(9)(C)(i), and (e)(3)’’ before the period at the end. 

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

9 COMPANIES. 

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

11 U.S.C. 1467a(e)(3)) is amended—

12 (1) by redesignating subparagraphs (A), (B), 

13 and (C) as subparagraphs (B), (C), and (D), respec14 tively; and 

15 (2) by inserting before subparagraph (B) (as so 

16 redesignated) the following new subparagraph: 

17 ‘‘(A) such acquisition would be permissible 

18 under section 3(d) of the Bank Holding Com19 pany Act of 1956 if the savings and loan hold20 ing company were a bank holding company and 

21 any savings association to be acquired were a 

22 bank;’’. 

23 SEC. 218. BUSINESS ORGANIZATION FLEXIBILITY FOR FED24 ERAL SAVINGS ASSOCIATIONS. 

25 (a) IN GENERAL.—Section 5 of the Home Owners’ 

26 Loan Act (12 U.S.C. 1464) is amended by inserting after 
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•HR 3505 EH 

1 subsection (x) (as added by section 213) following new 

2 subsection: 

3 ‘‘(y) ALTERNATIVE BUSINESS ORGANIZATION.—

4 ‘‘(1) IN GENERAL.—The Director may prescribe 

5 regulations that—

6 ‘‘(A) permit a Federal savings association 

7 to be organized other than as a corporation; 

8 and 

9 ‘‘(B) provide requirements for the organi10 zational characteristics of a Federal savings as11 sociation organized and operating other than as 

12 a corporation, consistent with the safety and 

13 soundness of the Federal savings association. 

14 ‘‘(2) EQUAL TREATMENT.—Except as otherwise 

15 provided in regulations prescribed under subsection 

16 (1), a Federal savings association that is operating 

17 other than as a corporation shall have the same 

18 rights and privileges and shall be subject to the 

19 same duties, restrictions, penalties, liabilities, condi20 tions, and limitations as a Federal savings associa21 tion that is organized as a corporation.’’. 

22 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

23 (1) Section 5(a)(1) of the Home Owners’ Loan 

24 Act (12 U.S.C. 1464(a)(1)) is amended by striking 

25 ‘‘organization, incorporation,’’ and inserting ‘‘organi-
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•HR 3505 EH 

1 zation (as a corporation or other form of business 

2 organization provided under regulations prescribed 

3 by the Director under subsection (x)),’’. 

4 (2) The last sentence of section 5(i)(1) of the 

5 Home Owners’ Loan Act (12 U.S.C. 1464(i)(1)) is 

6 amended by striking ‘‘incorporated’’ and inserting 

7 ‘‘organized’’. 

8 (3) Section 5(o)(1) of the Home Owners’ Loan 

9 Act (12 U.S.C. 1464(a)(1)) is amended by striking 

10 ‘‘organization, incorporation,’’ and inserting ‘‘organi11 zation (as a corporation or other form of business 

12 organization provided under regulations prescribed 

13 by the Director under subsection (x)),’’. 

14 TITLE III—CREDIT UNION 

15 PROVISIONS 

16 SEC. 301. PRIVATELY INSURED CREDIT UNIONS AUTHOR17 IZED TO BECOME MEMBERS OF A FEDERAL 

18 HOME LOAN BANK. 

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

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

21 at the end the following new paragraph: 

22 ‘‘(5) CERTAIN PRIVATELY INSURED CREDIT

23 UNIONS.—

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

25 has been determined, in accordance with section 
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•HR 3505 EH 

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

2 and subject to the requirements of subpara3 graph (B), to meet all eligibility requirements 

4 for Federal deposit insurance shall be treated 

5 as an insured depository institution for pur6 poses of determining the eligibility of such cred7 it union for membership in a Federal home loan 

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

9 ‘‘(B) CERTIFICATION BY APPROPRIATE SU10 PERVISOR.—

11 ‘‘(i) IN GENERAL.—For purposes of 

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

13 credit union which lacks Federal deposit 

14 insurance and which has applied for mem15 bership in a Federal home loan bank may 

16 be treated as meeting all the eligibility re17 quirements for Federal deposit insurance 

18 only if the appropriate supervisor of the 

19 State in which the credit union is char20 tered has determined that the credit union 

21 meets all the eligibility requirements for 

22 Federal deposit insurance as of the date of 

23 the application for membership. 

24 ‘‘(ii) CERTIFICATION DEEMED

25 VALID.—If, in the case of any credit union 
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•HR 3505 EH 

1 to which clause (i) applies, the appropriate 

2 supervisor of the State in which such cred3 it union is chartered fails to make a deter4 mination pursuant to such clause by the 

5 end of the 6-month period beginning on 

6 the date of the application, the credit 

7 union shall be deemed to have met the re8 quirements of clause (i). 

9 ‘‘(C) SECURITY INTERESTS OF FEDERAL

10 HOME LOAN BANK NOT AVOIDABLE.—Notwith11 standing any provision of State law authorizing 

12 a conservator or liquidating agent of a credit 

13 union to repudiate contracts, no such provision 

14 shall apply with respect to—

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

16 Federal home loan bank to any credit 

17 union which is a member of any such bank 

18 pursuant to this paragraph; or 

19 ‘‘(ii) any security interest in the as20 sets of such credit union securing any such 

21 extension of credit.’’. 

22 (b) COPIES OF AUDITS OF PRIVATE INSURERS OF

23 CERTAIN DEPOSITORY INSTITUTIONS REQUIRED TO BE

24 PROVIDED TO SUPERVISORY AGENCIES.—Section 
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•HR 3505 EH 

1 43(a)(2) of the Federal Deposit Insurance Act (12 U.S.C. 

2 1831t(a)(2)) is amended—

3 (1) by striking ‘‘and’’ at the end of subpara4 graph (A)(i); 

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

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

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

8 end of subparagraph (A): 

9 ‘‘(iii) in the case of depository institu10 tions described in subsection (f)(2)(A) the 

11 deposits of which are insured by the pri12 vate insurer, the National Credit Union 

13 Administration, not later than 7 days after 

14 that audit is completed; and 

15 ‘‘(iv) in the case of depository institu16 tions described in subsection (f)(2)(A) the 

17 deposits of which are insured by the pri18 vate insurer which are members of a Fed19 eral home loan bank, the Federal Housing 

20 Finance Board, not later than 7 days after 

21 that audit is completed.’’; and 

22 (4) by adding at the end the following new sub23 paragraph: 

24 ‘‘(C) CONSULTATION.—The appropriate 

25 supervisory agency of each State in which a pri-
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•HR 3505 EH 

1 vate deposit insurer insures deposits in an insti2 tution described in subsection (f)(2)(A) which—

3 ‘‘(i) lacks Federal deposit insurance; 

4 and 

5 ‘‘(ii) has become a member of a Fed6 eral home loan bank, 

7 shall provide the National Credit Union Admin8 istration, upon request, with the results of any 

9 examination and reports related thereto con10 cerning the private deposit insurer to which 

11 such agency may have in its possession.’’. 

12 SEC. 302. LEASES OF LAND ON FEDERAL FACILITIES FOR 

13 CREDIT UNIONS. 

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

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

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

17 union’’ and inserting ‘‘Notwithstanding any other 

18 provision of law, upon application by any credit 

19 union’’; 

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

21 of, and under the exclusive or concurrent jurisdiction 

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

23 the United States charged with the allotment of 

24 space’’; 
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•HR 3505 EH 

1 (3) by inserting ‘‘lease land or’’ after ‘‘such of2 ficer or agency may in his or its discretion’’; and 

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

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

5 allotment of space’’. 

6 (b) CLERICAL AMENDMENT.—The heading for sec7 tion 124 is amended by inserting ‘‘OR FEDERAL LAND’’ 

8 after ‘‘BUILDINGS’’. 

9 SEC. 303. INVESTMENTS IN SECURITIES BY FEDERAL CRED10 IT UNIONS. 

11 Section 107 of the Federal Credit Union Act (12 

12 U.S.C. 1757) is amended—

13 (1) in the matter preceding paragraph (1) by 

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

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

16 (2) by adding at the end the following new sub17 section: 

18 ‘‘(b) ADDITIONAL INVESTMENT AUTHORITY.—

19 ‘‘(1) IN GENERAL.—In addition to any invest20 ments otherwise authorized, a Federal credit union 

21 may purchase and hold for its own account such in22 vestment securities of investment grade as the 

23 Board may authorize by regulation, subject to such 

24 limitations and restrictions as the Board may pre25 scribe in the regulations. 
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•HR 3505 EH 

1 ‘‘(2) PERCENTAGE LIMITATIONS.—

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

3 the total amount of investment securities of any 

4 single obligor or maker held by a Federal credit 

5 union for the credit union’s own account exceed 

6 at any time an amount equal to 10 percent of 

7 the net worth of the credit union. 

8 ‘‘(B) AGGREGATE INVESTMENTS.—In no 

9 event may the aggregate amount of investment 

10 securities held by a Federal credit union for the 

11 credit union’s own account exceed at any time 

12 an amount equal to 10 percent of the assets of 

13 the credit union. 

14 ‘‘(3) INVESTMENT SECURITY DEFINED.—

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

16 subsection, the term ‘investment security’ 

17 means marketable obligations evidencing the in18 debtedness of any person in the form of bonds, 

19 notes, or debentures and other instruments 

20 commonly referred to as investment securities. 

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

22 The Board may further define the term ‘invest23 ment security’. 

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

25 ‘investment grade’ means with respect to an invest-
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•HR 3505 EH 

1 ment security purchased by a credit union for its 

2 own account, an investment security that at the time 

3 of such purchase is rated in one of the 4 highest rat4 ing categories by at least 1 nationally recognized 

5 statistical rating organization. 

6 ‘‘(5) CLARIFICATION OF PROHIBITION ON

7 STOCK OWNERSHIP.—No provision of this subsection 

8 shall be construed as authorizing a Federal credit 

9 union to purchase shares of stock of any corporation 

10 for the credit union’s own account, except as other11 wise permitted by law.’’. 

12 SEC. 304. INCREASE IN GENERAL 12-YEAR LIMITATION OF 

13 TERM OF FEDERAL CREDIT UNION LOANS TO 

14 15 YEARS. 

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

16 (12 U.S.C. 1757(5)) (as so designated by section 303 of 

17 this title) is amended—

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

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

20 shall not exceed twelve years except as otherwise 

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

22 maturities of which shall not exceed 15 years or any 

23 longer maturity as the Board may allow, in regula24 tions, except as otherwise provided in this Act’’; 

25 (2) in subparagraph (A)—
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1 (A) by striking clause (ii); 

2 (B) by redesignating clauses (iii) through 

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

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

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

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

7 CREDIT UNION SERVICE ORGANIZATIONS. 

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

9 (12 U.S.C. 1757(7)(I)) (as so designated by section 303 

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

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

12 total paid’’. 

13 SEC. 306. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS 

14 TO NONPROFIT RELIGIOUS ORGANIZATIONS. 

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

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

17 loans made to nonprofit religious organizations,’’ after 

18 ‘‘total amount of such loans’’. 

19 SEC. 307. CHECK CASHING AND MONEY TRANSFER SERV20 ICES OFFERED WITHIN THE FIELD OF MEM21 BERSHIP. 

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

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

24 by section 303 of this title) is amended to read as follows: 
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1 ‘‘(12) in accordance with regulations prescribed 

2 by the Board—

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

4 membership, negotiable checks (including trav5 elers checks), money orders, and other similar 

6 money transfer instruments (including inter7 national and domestic electronic fund trans8 fers); and 

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

10 receive international and domestic electronic 

11 fund transfers for persons in the field of mem12 bership for a fee;’’. 

13 SEC. 308. VOLUNTARY MERGERS INVOLVING MULTIPLE 

14 COMMON-BOND CREDIT UNIONS. 

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

16 (12 U.S.C. 1759(d)(2)) is amended—

17 (1) by striking ‘‘or’’ at the end of clause (ii) of 

18 subparagraph (B); 

19 (2) by striking the period at the end of sub20 paragraph (C) and inserting ‘‘; or’’; and 

21 (3) by adding at the end the following new sub22 paragraph: 

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

24 credit union approved by the Board on or after 

25 August 7, 1998.’’. 
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•HR 3505 EH 

1 SEC. 309. CONVERSIONS INVOLVING COMMON-BOND CRED2 IT UNIONS. 

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

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

5 (2) the following new paragraph: 

6 ‘‘(3) CRITERIA FOR CONTINUED MEMBERSHIP

7 OF CERTAIN MEMBER GROUPS IN COMMUNITY CHAR8 TER CONVERSIONS.—In the case of a voluntary con9 version of a common-bond credit union described in 

10 paragraph (1) or (2) of subsection (b) into a com11 munity credit union described in subsection (b)(3), 

12 the Board shall prescribe, by regulation, the criteria 

13 under which the Board may determine that a mem14 ber group or other portion of a credit union’s exist15 ing membership, that is located outside the well-de16 fined local community, neighborhood, or rural dis17 trict that shall constitute the community charter, 

18 can be satisfactorily served by the credit union and 

19 remain within the community credit union’s field of 

20 membership.’’. 

21 SEC. 310. CREDIT UNION GOVERNANCE. 

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

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

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

25 ‘‘(b) POLICY AND ACTIONS OF BOARDS OF DIREC26 TORS OF FEDERAL CREDIT UNIONS.—
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•HR 3505 EH 

1 ‘‘(1) EXPULSION OF MEMBERS FOR NON2 PARTICIPATION OR FOR JUST CAUSE.—The board of 

3 directors of a Federal credit union may, by majority 

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

5 policy with respect to expulsion from membership, 

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

7 on just cause, including disruption of credit union 

8 operations, or on nonparticipation by a member in 

9 the affairs of the credit union. 

10 ‘‘(2) WRITTEN NOTICE OF POLICY TO MEM11 BERS.—If a policy described in paragraph (1) is 

12 adopted, written notice of the policy as adopted and 

13 the effective date of such policy shall be provided 

14 to—

15 ‘‘(A) each existing member of the credit 

16 union not less than 30 days prior to the effec17 tive date of such policy; and 

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

19 applying for membership.’’. 

20 (b) TERM LIMITS AUTHORIZED FOR BOARD MEM21 BERS OF FEDERAL CREDIT UNIONS.—Section 111(a) of 

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

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

24 ‘‘The bylaws of a Federal credit union may limit the num-
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•HR 3505 EH 

1 ber of consecutive terms any person may serve on the 

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

3 (c) REIMBURSEMENT FOR LOST WAGES DUE TO

4 SERVICE ON CREDIT UNION BOARD NOT TREATED AS

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

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

7 ‘‘, including lost wages,’’ after ‘‘the reimbursement of rea8 sonable expenses’’. 

9 SEC. 311. PROVIDING THE NATIONAL CREDIT UNION AD10 MINISTRATION WITH GREATER FLEXIBILITY 

11 IN RESPONDING TO MARKET CONDITIONS. 

12 Section 107(a)(5)(A)(v)(I) of the Federal Credit 

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

14 by section 303 and redesignated by section 304(2)(B) of 

15 this title) is amended by striking ‘‘six-month period and 

16 that prevailing interest rate levels’’ and inserting ‘‘6-

17 month period or that prevailing interest rate levels’’. 

18 SEC. 312. EXEMPTION FROM PRE-MERGER NOTIFICATION 

19 REQUIREMENT OF THE CLAYTON ACT. 

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

21 18a(c)(7)) is amended by inserting ‘‘section 205(b)(3) of 

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

23 before ‘‘or section 3’’. 
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1 SEC. 313. TREATMENT OF CREDIT UNIONS AS DEPOSITORY 

2 INSTITUTIONS UNDER SECURITIES LAWS. 

3 (a) DEFINITION OF BANK UNDER THE SECURITIES

4 EXCHANGE ACT OF 1934.—Section 3(a)(6) of the Securi5 ties Exchange Act of 1934 (15 U.S.C. 78c(a)(6)) (as 

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

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

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

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

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

11 and (5) of this subsection and only for activities oth12 erwise authorized by applicable laws to which such 

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

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

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

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

17 (b) DEFINITION OF BANK UNDER THE INVESTMENT

18 ADVISERS ACT OF 1940.—Section 202(a)(2) of the In19 vestment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(2)) 

20 (as amended by section 201(b)(1) of this Act) is amend21 ed—

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

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

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

25 Union Act) but only for activities otherwise author-
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1 ized by applicable laws to which such credit unions 

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

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

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

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

6 (c) DEFINITION OF APPROPRIATE FEDERAL BANK7 ING AGENCY.—Section 210A(c) of the Investment Advis8 ers Act of 1940 (15 U.S.C. 80b–10a(c)) is amended by 

9 inserting ‘‘and includes the National Credit Union Admin10 istration Board, in the case of an insured credit union (as 

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

12 Act)’’ before the period at the end. 

13 SEC. 314. CLARIFICATION OF DEFINITION OF NET WORTH 

14 UNDER CERTAIN CIRCUMSTANCES FOR PUR15 POSES OF PROMPT CORRECTIVE ACTION. 

16 Subparagraph (A) of section 216(o)(2) of the Federal 

17 Credit Union Act (12 U.S.C. 1790d(o)(2)(A)) is amend18 ed—

19 (1) by inserting ‘‘the’’ before ‘‘retained earnings 

20 balance’’; and 

21 (2) by inserting ‘‘, together with any amounts 

22 that were previously retained earnings of any other 

23 credit union with which the credit union has com24 bined’’ before the semicolon at the end. 
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1 SEC. 315. AMENDMENTS RELATING TO NONFEDERALLY IN2 SURED CREDIT UNIONS. 

3 (a) IN GENERAL.—Subsection (a) of section 43 of the 

4 Federal Deposit Insurance Act (12 U.S.C. 1831t(a)) is 

5 amended by adding at the end the following new para6 graph: 

7 ‘‘(3) ENFORCEMENT BY APPROPRIATE STATE

8 SUPERVISOR.—Any appropriate State supervisor of a 

9 private deposit insurer, and any appropriate State 

10 supervisor of a depository institution which receives 

11 deposits that are insured by a private deposit in12 surer, may examine and enforce compliance with this 

13 subsection under the applicable regulatory authority 

14 of such supervisor.’’. 

15 (b) AMENDMENT RELATING TO DISCLOSURES RE16 QUIRED, PERIODIC STATEMENTS AND ACCOUNT

17 RECORDS.—Section 43(b)(1) of the Federal Deposit In18 surance Act (12 U.S.C. 1831t(b)(1)) is amended by strik19 ing ‘‘or similar instrument evidencing a deposit’’ and in20 serting ‘‘or share certificate’’. 

21 (c) AMENDMENTS RELATING TO DISCLOSURES RE22 QUIRED, ADVERTISING, PREMISES.— Section 43(b)(2) of 

23 the Federal Deposit Insurance Act (12 U.S.C. 

24 1831t(b)(2)) is amended to read as follows: 

25 ‘‘(2) ADVERTISING; PREMISES.—
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1 ‘‘(A) IN GENERAL.—Include clearly and 

2 conspicuously in all advertising, except as pro3 vided in subparagraph (B); and at each station 

4 or window where deposits are normally received, 

5 its principal place of business and all its 

6 branches where it accepts deposits or opens ac7 counts (excluding automated teller machines or 

8 point of sale terminals), and on its main Inter9 net page, a notice that the institution is not 

10 federally insured. 

11 ‘‘(B) EXCEPTIONS.—The following need 

12 not include a notice that the institution is not 

13 federally insured: 

14 ‘‘(i) Statements or reports of financial 

15 condition of the depository institution that 

16 are required to be published or posted by 

17 State or Federal law or regulation. 

18 ‘‘(ii) Any sign, document, or other 

19 item that contains the name of the deposi20 tory institution, its logo, or its contact in21 formation, but only if the sign, document, 

22 or item does not include any information 

23 about the institution’s products or services 

24 or information otherwise promoting the in25 stitution. 
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•HR 3505 EH 

1 ‘‘(iii) Small utilitarian items that do 

2 not mention deposit products or insurance 

3 if inclusion of the notice would be imprac4 tical.’’. 

5 (d) AMENDMENTS RELATING TO ACKNOWLEDGMENT

6 OF DISCLOSURE.—Section 43(b)(3) of the Federal De7 posit Insurance Act (12 U.S.C. 1831t(b)(3)) is amended 

8 to read as follows: 

9 ‘‘(3) ACKNOWLEDGMENT OF DISCLOSURE.—

10 ‘‘(A) NEW DEPOSITORS OBTAINED OTHER

11 THAN THROUGH A CONVERSION OR MERGER.—

12 With respect to any depositor who was not a 

13 depositor at the depository institution before 

14 the effective date of the Financial Services Re15 lief Act of 2005, and who is not a depositor as 

16 described in subparagraph (B), receive any de17 posit for the account of such depositor only if 

18 the depositor has signed a written acknowledge19 ment that—

20 ‘‘(i) the institution is not federally in21 sured; and 

22 ‘‘(ii) if the institution fails, the Fed23 eral Government does not guarantee that 

24 the depositor will get back the depositor’s 

25 money. 
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1 ‘‘(B) NEW DEPOSITORS OBTAINED

2 THROUGH A CONVERSION OR MERGER.—With 

3 respect to a depositor at a federally insured de4 pository institution that converts to, or merges 

5 into, a depository institution lacking federal in6 surance after the effective date of the Financial 

7 Services Regulatory Relief Act of 2005, receive 

8 any deposit for the account of such depositor 

9 only if—

10 ‘‘(i) the depositor has signed a written 

11 acknowledgement described in subpara12 graph (A); or 

13 ‘‘(ii) the institution makes an attempt, 

14 as described in subparagraph (D) and sent 

15 by mail no later than 45 days after the ef16 fective date of the conversion or merger, to 

17 obtain the acknowledgment. 

18 ‘‘(C) CURRENT DEPOSITORS.—Receive any 

19 deposit after the effective date of the Financial 

20 Services Regulatory Relief Act of 2005 for the 

21 account of any depositor who was a depositor 

22 on that date only if—

23 ‘‘(i) the depositor has signed a written 

24 acknowledgement described in subpara25 graph (A); or 
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1 ‘‘(ii) the institution makes an attempt, 

2 as described in subparagraph (D) and sent 

3 by mail no later than 45 days after the ef4 fective date of the Financial Services Reg5 ulatory Relief Act of 2005, to obtain the 

6 acknowledgment. 

7 ‘‘(D) ALTERNATIVE PROVISION OF NOTICE

8 TO CURRENT DEPOSITORS AND NEW DEPOSI9 TORS OBTAINED THROUGH A CONVERSION OR

10 MERGER.—

11 ‘‘(i) IN GENERAL.—Transmit to each 

12 depositor who has not signed a written ac13 knowledgement described in subparagraph 

14 (A)—

15 ‘‘(I) a conspicuous card con16 taining the information described in 

17 clauses (i) and (ii) of subparagraph 

18 (A), and a line for the signature of 

19 the depositor; and 

20 ‘‘(II) accompanying materials re21 questing the depositor to sign the 

22 card, and return the signed card to 

23 the institution.’’. 

24 (e) REPEAL OF PROVISION PROHIBITING NON25 DEPOSITORY INSTITUTIONS FROM ACCEPTING DEPOS-
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•HR 3505 EH 

1 ITS.—Section 43 of the Federal Deposit Insurance Act (12 

2 U.S.C. 1831t) is amended—

3 (1) by striking subsection (e); and 

4 (2) by redesignating subsections (f) and (g) as 

5 subsections (e) and (f), respectively. 

6 (f) REPEAL OF PROVISION CONCERNING NON7 DEPOSITORY INSTITUTIONS MASQUERADING AS DEPOSI8 TORY INSTITUTIONS AND CLARIFICATION OF DEPOSITORY

9 INSTITUTIONS COVERED BY THE STATUTE.—Subsection 

10 (e)(2) (as so redesignated by subsection (e) of this section) 

11 of section 43 of the Federal Deposit Insurance Act (12 

12 U.S.C. 1831t) is amended to read as follows: 

13 ‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de14 pository institution’—

15 ‘‘(A) includes any entity described in sec16 tion 19(b)(1)(A)(iv) of the Federal Reserve Act; 

17 and 

18 ‘‘(B) does not include any national bank, 

19 State member bank, or Federal branch.’’. 

20 (g) REPEAL OF FTC AUTHORITY TO ENFORCE INDE21 PENDENT AUDIT REQUIREMENT; CONCURRENT STATE

22 ENFORCEMENT.—Subsection (f) (as so redesignated by 

23 subsection (e) of this section) of section 43 of the Federal 

24 Deposit Insurance Act (12 U.S.C. 1831t) is amended to 

25 read as follows: 
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•HR 3505 EH 

1 ‘‘(f) ENFORCEMENT.—

2 ‘‘(1) LIMITED FTC ENFORCEMENT AUTHOR3 ITY.—Compliance with the requirements of sub4 sections (b) and (c), and any regulation prescribed 

5 or order issued under any such subsection, shall be 

6 enforced under the Federal Trade Commission Act 

7 by the Federal Trade Commission. 

8 ‘‘(2) BROAD STATE ENFORCEMENT AUTHOR9 ITY.—

10 ‘‘(A) IN GENERAL.—Subject to subpara11 graph (C), an appropriate State supervisor of a 

12 depository institution lacking Federal deposit 

13 insurance may examine and enforce compliance 

14 with the requirements of this section, and any 

15 regulation prescribed under this section. 

16 ‘‘(B) STATE POWERS.—For purposes of 

17 bringing any action to enforce compliance with 

18 this section, no provision of this section shall be 

19 construed as preventing an appropriate State 

20 supervisor of a depository institution lacking 

21 Federal deposit insurance from exercising any 

22 powers conferred on such official by the laws of 

23 such State. 

24 ‘‘(C) LIMITATION ON STATE ACTION

25 WHILE FEDERAL ACTION PENDING.—If the 
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•HR 3505 EH 

1 Federal Trade Commission has instituted an 

2 enforcement action for a violation of this sec3 tion, no appropriate State supervisor may, dur4 ing the pendency of such action, bring an action 

5 under this section against any defendant named 

6 in the complaint of the Commission for any vio7 lation of this section that is alleged in that com8 plaint.’’. 

9 TITLE IV—DEPOSITORY 

10 INSTITUTION PROVISIONS 

11 SEC. 401. EASING RESTRICTIONS ON INTERSTATE BRANCH12 ING AND MERGERS. 

13 (a) DE NOVO INTERSTATE BRANCHES OF NATIONAL

14 BANKS.—

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

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

17 36(g)(1)) is amended by striking ‘‘maintain a 

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

19 subparagraph (B) and inserting ‘‘maintain a 

20 branch.’’. 

21 (2) CLERICAL AMENDMENT.—The heading for 

22 subsection (g) of section 5155 of the Revised Stat23 utes of the United States is amended by striking 

24 ‘‘STATE ‘OPT-IN’ ELECTION TO PERMIT’’. 
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1 (b) DE NOVO INTERSTATE BRANCHES OF STATE

2 NONMEMBER BANKS.—

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

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

5 1828(d)(4)(A)) is amended by striking ‘‘maintain a 

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

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

8 (2) INTERSTATE BRANCHING BY SUBSIDIARIES

9 OF COMMERCIAL FIRMS PROHIBITED.—Section 

10 18(d)(3)) of the Federal Deposit Insurance Act (12 

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

12 the following new subparagraph: 

13 ‘‘(C) INTERSTATE BRANCHING BY SUBSIDI14 ARIES OF COMMERCIAL FIRMS PROHIBITED.—

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

16 State bank supervisor of the home State of 

17 any industrial loan company, industrial 

18 bank, or other institution described in sec19 tion 2(c)(2)(H) of the Bank Holding Com20 pany Act of 1956, or the appropriate State 

21 bank supervisor of any host State with re22 spect to such company, bank, or institu23 tion, determines that such company, bank, 

24 or institution is controlled, directly or indi25 rectly, by a commercial firm, such com-
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•HR 3505 EH 

1 pany, bank, or institution may not acquire, 

2 establish, or operate a branch in such host 

3 State. 

4 ‘‘(ii) COMMERCIAL FIRM DEFINED.—

5 For purposes of this subsection, the term 

6 ‘commercial firm’ means any entity at least 

7 15 percent of the annual gross revenues of 

8 which on a consolidated basis, including all 

9 affiliates of the entity, were derived from 

10 engaging, on an on-going basis, in activi11 ties that are not financial in nature or inci12 dental to a financial activity during at 

13 least 3 of the prior 4 calendar quarters. 

14 ‘‘(iii) GRANDFATHERED INSTITU15 TIONS.—Clause (i) shall not apply with re16 spect to any industrial loan company, in17 dustrial bank, or other institution de18 scribed in section 2(c)(2)(H) of the Bank 

19 Holding Company Act of 1956—

20 ‘‘(I) which became an insured de21 pository institution before October 1, 

22 2003 or pursuant to an application 

23 for deposit insurance which was ap24 proved by the Corporation before such 

25 date; and 
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1 ‘‘(II) with respect to which there 

2 is no change in control, directly or in3 directly, of the company, bank, or in4 stitution after September 30, 2003, 

5 that requires an application under 

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

7 of the Bank Holding Company Act of 

8 1956, or section 10 of the Home 

9 Owners’ Loan Act. 

10 ‘‘(iv) TRANSITION PROVISION.—Any 

11 divestiture required under this subpara12 graph of a branch in a host State shall be 

13 completed as quickly as is reasonably pos14 sible. 

15 ‘‘(v) CORPORATE REORGANIZATIONS

16 PERMITTED.—The acquisition of direct or 

17 indirect control of the company, bank, or 

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

19 shall not be treated as a ‘change in con20 trol’ for purposes of such clause if the 

21 company acquiring control is itself directly 

22 or indirectly controlled by a company that 

23 was an affiliate of such company, bank, or 

24 institution on the date referred to in clause 
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1 (iii)(II), and remained an affiliate at all 

2 times after such date.’’. 

3 (3) TECHNICAL AND CONFORMING AMEND4 MENTS.—Section 18(d)(4) of the Federal Deposit 

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

6 (A) in subparagraph (A) by striking ‘‘Sub7 ject to subparagraph (B)’’ and inserting ‘‘Sub8 ject to subparagraph (B) and paragraph 

9 (3)(C)’’; and 

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

11 striking ‘‘The term’’ and inserting ‘‘For pur12 poses of this subsection, the term’’. 

13 (4) CLERICAL AMENDMENT.—The heading for 

14 paragraph (4) of section 18(d) of the Federal De15 posit Insurance Act is amended by striking ‘‘STATE

16 ‘OPT-IN’ ELECTION TO PERMIT INTERSTATE’’ and in17 serting ‘‘INTERSTATE’’. 

18 (c) DE NOVO INTERSTATE BRANCHES OF STATE

19 MEMBER BANKS.—The 3rd undesignated paragraph of 

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

21 amended by adding at the end the following new sen22 tences: ‘‘A State member bank may establish and operate 

23 a de novo branch in a host State (as such terms are de24 fined in section 18(d) of the Federal Deposit Insurance 

25 Act) on the same terms and conditions and subject to the 
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1 same limitations and restrictions as are applicable to the 

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

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

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

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

6 Deposit Insurance Act’’. Such section 5155(g) shall be ap7 plied for purposes of the preceding sentence by sub8 stituting ‘Board of Governors of the Federal Reserve Sys9 tem’ for ‘Comptroller of the Currency’ and ‘State member 

10 bank’ for ‘national bank’.’’. 

11 (d) INTERSTATE MERGER OF BANKS.—

12 (1) MERGER OF INSURED BANK WITH ANOTHER

13 DEPOSITORY INSTITUTION OR TRUST COMPANY.—

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

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

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

17 1997, the’’ and inserting ‘‘The’’; and 

18 (B) by striking ‘‘insured banks with dif19 ferent home States’’ and inserting ‘‘an insured 

20 bank and another insured depository institution 

21 or trust company with a different home State 

22 than the resulting insured bank’’. 

23 (2) NATIONAL BANK TRUST COMPANY MERGER

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

25 section 4 of the National Bank Consolidation and 
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•HR 3505 EH 

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

2 read as follows: 

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

4 WITH ANOTHER TRUST COMPANY.—A national bank that 

5 is a trust company may engage in a consolidation or merg6 er under this Act with any trust company with a different 

7 home State, under the same terms and conditions that 

8 would apply if the trust companies were located within the 

9 same State.’’. 

10 (e) INTERSTATE FIDUCIARY ACTIVITY.—Section 

11 18(d) of the Federal Deposit Insurance Act (12 U.S.C. 

12 1828(d)) is amended by adding at the end the following 

13 new paragraph: 

14 ‘‘(5) INTERSTATE FIDUCIARY ACTIVITY.—

15 ‘‘(A) AUTHORITY OF STATE BANK SUPER16 VISOR.—The State bank supervisor of a State 

17 bank may approve an application by the State 

18 bank, when not in contravention of home State 

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

20 administrator, registrar of stocks and bonds, 

21 guardian of estates, assignee, receiver, com22 mittee of estates of lunatics, or in any other fi23 duciary capacity in a host State in which State 

24 banks or other corporations which come into 
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1 competition with national banks are permitted 

2 to act under the laws of such host State. 

3 ‘‘(B) NONCONTRAVENTION OF HOST STATE

4 LAW.—Whenever the laws of a host State au5 thorize or permit the exercise of any or all of 

6 the foregoing powers by State banks or other 

7 corporations which compete with national 

8 banks, the granting to and the exercise of such 

9 powers by a State bank as provided in this 

10 paragraph shall not be deemed to be in con11 travention of host State law within the meaning 

12 of this paragraph. 

13 ‘‘(C) STATE BANK INCLUDES TRUST COM14 PANIES.—For purposes of this paragraph, the 

15 term ‘State bank’ includes any State-chartered 

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

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

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

19 ‘host State’ have the meanings given such 

20 terms in section 44.’’. 

21 (f) TECHNICAL AND CONFORMING AMENDMENTS.—

22 (1) Section 44 of the Federal Deposit Insurance 

23 Act (12 U.S.C. 1831u) is amended—

24 (A) in subsection (a)—
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•HR 3505 EH 

1 (i) by striking paragraph (4) and in2 serting the following new paragraph: 

3 ‘‘(4) TREATMENT OF BRANCHES IN CONNEC4 TION WITH CERTAIN INTERSTATE MERGER TRANS5 ACTIONS.—In the case of an interstate merger 

6 transaction which involves the acquisition of a 

7 branch of an insured depository institution or trust 

8 company without the acquisition of the insured de9 pository institution or trust company, the branch 

10 shall be treated, for purposes of this section, as an 

11 insured depository institution or trust company the 

12 home State of which is the State in which the 

13 branch is located.’’; and 

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

15 and inserting the following new paragraph: 

16 ‘‘(5) APPLICABILITY TO INDUSTRIAL LOAN

17 COMPANIES.—No provision of this section shall be 

18 construed as authorizing the approval of any trans19 action involving a industrial loan company, indus20 trial bank, or other institution described in section 

21 2(c)(2)(H) of the Bank Holding Company Act of 

22 1956, or the acquisition, establishment, or operation 

23 of a branch by any such company, bank, or institu24 tion, that is not allowed under section 18(d)(3).’’. 

25 (B) in subsection (b)—
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1 (i) by striking ‘‘bank’’ each place such 

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

3 inserting ‘‘insured depository institution’’; 

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

5 term appears in paragraph (2)(E) and in6 serting ‘‘insured depository institutions or 

7 trust companies’’; 

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

9 place such term appears in that portion of 

10 paragraph (3) that precedes subparagraph 

11 (A) and inserting ‘‘insured depository insti12 tution affiliate’’; 

13 (iv) by striking ‘‘any bank’’ where 

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

15 and inserting ‘‘any insured depository in16 stitution’’; 

17 (v) by striking ‘‘bank’’ where such 

18 term appears in paragraph (4)(A) and in19 serting ‘‘insured depository institution and 

20 trust company’’; and 

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

22 such term appears in paragraph (5) and 

23 inserting ‘‘all insured depository institu24 tions and trust companies’’; 
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1 (C) in subsection (d)(1), by striking ‘‘any 

2 bank’’ and inserting ‘‘any insured depository in3 stitution or trust company’’; 

4 (D) in subsection (e)—

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

6 inserting ‘‘1 or more insured depository in7 stitutions’’; and 

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

9 (5)’’ and inserting ‘‘paragraph (2)’’; 

10 (E) by striking clauses (i) and (ii) of sub11 section (g)(4)(A) and inserting the following 

12 new clauses: 

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

14 Federal savings association, the State in 

15 which the main office of the bank or sav16 ings association is located; and 

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

18 State savings association, or State-char19 tered trust company, the State by which 

20 the bank, savings association, or trust 

21 company is chartered; and’’; 

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

23 (g) and inserting the following new paragraph: 

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

25 means—
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1 ‘‘(A) with respect to a bank, a State, other 

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

3 bank maintains, or seeks to establish and main4 tain, a branch; and 

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

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

7 other than the home State of the trust com8 pany, in which the trust company acts, or seeks 

9 to act, in 1 or more fiduciary capacities.’’; 

10 (G) in subsection (g)(10), by striking ‘‘sec11 tion 18(c)(2)’’ and inserting ‘‘paragraph (1) or 

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

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

14 the following new paragraph: 

15 ‘‘(12) TRUST COMPANY.—The term ‘trust com16 pany’ means—

17 ‘‘(A) any national bank; 

18 ‘‘(B) any savings association; and 

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

20 company, savings bank, or other banking insti21 tution which is incorporated under the laws of 

22 any State, 

23 that is authorized to act in 1 or more fiduciary ca24 pacities but is not engaged in the business of receiv-
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1 ing deposits other than trust funds (as defined in 

2 section 3(p)).’’. 

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

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

5 (A) in paragraph (1)—

6 (i) by striking subparagraphs (B) and 

7 (C); and 

8 (ii) by redesignating subparagraph 

9 (D) as subparagraph (B); and 

10 (B) in paragraph (5), by striking ‘‘sub11 paragraph (B) or (D)’’ and inserting ‘‘subpara12 graph (B)’’. 

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

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

15 215a–1(c)) is amended to read as follows: 

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

17 terms ‘home State’, ‘out-of-State bank’, and ‘trust com18 pany’ each have the same meaning as in section 44(g) of 

19 the Federal Deposit Insurance Act.’’. 

20 (g) CLERICAL AMENDMENTS.—

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

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

23 1831u(b)(2)(E)) is amended by striking ‘‘BANKS’’ 

24 and inserting ‘‘INSURED DEPOSITORY INSTITUTIONS

25 AND TRUST COMPANIES’’. 
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1 (2) The heading for section 44(e) of the Fed2 eral Deposit Insurance Act (12 U.S.C. 1831u(e)) is 

3 amended by striking ‘‘BANKS’’ and inserting ‘‘IN4 SURED DEPOSITORY INSTITUTIONS’’. 

5 SEC. 402. STATUTE OF LIMITATIONS FOR JUDICIAL REVIEW 

6 OF APPOINTMENT OF A RECEIVER FOR DE7 POSITORY INSTITUTIONS. 

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

9 Bank Receivership Act (12 U.S.C. 191) is amended—

10 (1) by striking ‘‘SECTION 2. The Comptroller 

11 of the Currency’’ and inserting the following: 

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

13 BANK. 

14 ‘‘(a) IN GENERAL.—The Comptroller of the Cur15 rency’’; and 

16 (2) by adding at the end the following new sub17 section: 

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

19 Currency appoints a receiver under subsection (a), the na20 tional bank may, within 30 days thereafter, bring an ac21 tion in the United States district court for the judicial dis22 trict in which the home office of such bank is located, or 

23 in the United States District Court for the District of Co24 lumbia, for an order requiring the Comptroller of the Cur25 rency to remove the receiver, and the court shall, upon 
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1 the merits, dismiss such action or direct the Comptroller 

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

3 (b) INSURED DEPOSITORY INSTITUTIONS.—Section 

4 11(c)(7) of the Federal Deposit Insurance Act (12 U.S.C. 

5 1821(c)(7)) is amended to read as follows: 

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

7 appointed (including the appointment of the Cor8 poration as receiver by the Board of Directors) as 

9 conservator or receiver of a depository institution 

10 under paragraph (4), (9), or (10), the depository in11 stitution may, within 30 days thereafter, bring an 

12 action in the United States district court for the ju13 dicial district in which the home office of such de14 pository institution is located, or in the United 

15 States District Court for the District of Columbia, 

16 for an order requiring the Corporation to be re17 moved as the conservator or receiver (regardless of 

18 how such appointment was made), and the court 

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

20 the Corporation to be removed as the conservator or 

21 receiver.’’. 

22 (c) EXPANSION OF PERIOD FOR CHALLENGING THE

23 APPOINTMENT OF A LIQUIDATING AGENT.—Subpara24 graph (B) of section 207(a)(1) of the Federal Credit 
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1 Union Act (12 U.S.C. 1787(a)(1)) is amended by striking 

2 ‘‘10 days’’ and inserting ‘‘30 days’’. 

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

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

5 conservators, receivers, or liquidating agents appointed on 

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

7 SEC. 403. REPORTING REQUIREMENTS RELATING TO IN8 SIDER LENDING. 

9 (a) REPORTING REQUIREMENTS REGARDING LOANS

10 TO EXECUTIVE OFFICERS OF MEMBER BANKS.—Section 

11 22(g) of the Federal Reserve Act (12 U.S.C. 375a) is 

12 amended—

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

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

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

16 (b) REPORTING REQUIREMENTS REGARDING LOANS

17 FROM CORRESPONDENT BANKS TO EXECUTIVE OFFI18 CERS AND SHAREHOLDERS OF INSURED BANKS.—Section 

19 106(b)(2) of the Bank Holding Company Act Amend20 ments of 1970 (12 U.S.C. 1972(2)) is amended—

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

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

23 as subparagraphs (G) and (H), respectively. 
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1 SEC. 404. AMENDMENT TO PROVIDE AN INFLATION AD2 JUSTMENT FOR THE SMALL DEPOSITORY IN3 STITUTION EXCEPTION UNDER THE DEPOSI4 TORY INSTITUTION MANAGEMENT INTER5 LOCKS ACT. 

6 Section 203(1) of the Depository Institution Manage7 ment Interlocks Act (12 U.S.C. 3202(1)) is amended by 

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

9 SEC. 405. ENHANCING THE SAFETY AND SOUNDNESS OF IN10 SURED DEPOSITORY INSTITUTIONS. 

11 (a) CLARIFICATION RELATING TO THE ENFORCE12 ABILITY OF AGREEMENTS AND CONDITIONS.—The Fed13 eral Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 

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

15 ‘‘SEC. 49. ENFORCEMENT OF AGREEMENTS. 

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

17 (ii) of section 8(b)(6)(A) or section 38(e)(2)(E)(i), an ap18 propriate Federal banking agency may enforce, under sec19 tion 8, the terms of—

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

21 agency on a depository institution or an institution22 affiliated party (including a bank holding company) 

23 in connection with any action on any application, no24 tice, or other request concerning a depository insti25 tution; or 
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1 ‘‘(2) any written agreement entered into be2 tween the agency and an institution-affiliated party 

3 (including a bank holding company). 

4 ‘‘(b) RECEIVERSHIPS AND CONSERVATORSHIPS.—

5 After the appointment of the Corporation as the receiver 

6 or conservator for any insured depository institution, the 

7 Corporation may enforce any condition or agreement de8 scribed in paragraph (1) or (2) of subsection (a) involving 

9 such institution or any institution-affiliated party (includ10 ing a bank holding company), through an action brought 

11 in an appropriate United States district court.’’. 

12 (b) PROTECTION OF CAPITAL OF INSURED DEPOSI13 TORY INSTITUTIONS.—Paragraph (1) of section 18(u) of 

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

15 is amended by striking subparagraph (B) and by redesig16 nating subparagraph (C) as subparagraph (B). 

17 SEC. 406. INVESTMENTS BY INSURED SAVINGS ASSOCIA18 TIONS IN BANK SERVICE COMPANIES AU19 THORIZED. 

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

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

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

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

24 (b) TECHNICAL AND CONFORMING AMENDMENTS.—
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1 (1) Section 1(b)(4) of the Bank Service Com2 pany Act (12 U.S.C. 1861(b)(4)) is amended—

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

4 appears in connection with the term ‘insured 

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

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

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

8 Thrift Supervision’’. 

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

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

11 (A) by striking paragraph (5) and insert12 ing the following new paragraph: 

13 ‘‘(5) INSURED DEPOSITORY INSTITUTION.—The 

14 term ‘insured depository institution’ has the mean15 ing given the term in section 3(c) of the Federal De16 posit Insurance Act;’’; 

17 (B) by striking ‘‘and’’ at the end of para18 graph (7); 

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

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

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

22 paragraph: 

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

24 ‘Federal depository institution’, ‘State savings asso25 ciation’ and ‘Federal savings association’ have the 
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1 meanings given the terms in section 3 of the Federal 

2 Deposit Insurance Act.’’. 

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

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

5 1464(c)(4)(B)) is amended by striking ‘‘by savings 

6 associations of such State and by Federal associa7 tions’’ and inserting ‘‘by State and Federal deposi8 tory institutions’’. 

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

10 (B)(ii) of section 1(b)(2) of the Bank Service Com11 pany Act (12 U.S.C. 1861(b)(2)) are each amended 

12 by striking ‘‘insured banks’’ and inserting ‘‘insured 

13 depository institutions’’. 

14 (5) Section 1(b)(8) of the Bank Service Com15 pany Act (12 U.S.C. 1861(b)(8)) is further amend16 ed—

17 (A) by striking ‘‘insured bank’’ and insert18 ing ‘‘insured depository institution’’; 

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

20 such term appears and inserting ‘‘insured de21 pository institutions’’; and 

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

23 ‘‘the depository institution’s’’. 

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

25 (12 U.S.C. 1862) is amended by inserting ‘‘or sav-
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1 ings associations, other than the limitation on the 

2 amount of investment by a Federal savings associa3 tion contained in section 5(c)(4)(B) of the Home 

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

5 (7) Section 4(b) of the Bank Service Company 

6 Act (12 U.S.C. 1864(b)) is amended by inserting 

7 ‘‘as permissible under subsection (c), (d), or (e) or’’ 

8 after ‘‘Except’’. 

9 (8) Section 4(c) of the Bank Service Company 

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

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

12 place such term appears. 

13 (9) Section 4(d) of the Bank Service Company 

14 Act (12 U.S.C. 1864(d)) is amended by inserting 

15 ‘‘or Federal savings association’’ after ‘‘national 

16 bank’’ each place such term appears. 

17 (10) Section 4(e) of the Bank Service Company 

18 Act (12 U.S.C. 1864(e)) is amended to read as fol19 lows: 

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

21 ‘‘(1) only those services that each depository in22 stitution shareholder or member is otherwise author23 ized to perform under any applicable Federal or 

24 State law; and 
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1 ‘‘(2) such services only at locations in a State 

2 in which each such shareholder or member is author3 ized to perform such services.’’. 

4 (11) Section 4(f) of the Bank Service Company 

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

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

7 (12) Section 5 of the Bank Service Company 

8 Act (12 U.S.C. 1865) is amended—

9 (A) in subsection (a)—

10 (i) by striking ‘‘insured bank’’ and in11 serting ‘‘insured depository institution’’; 

12 and 

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

14 ‘‘institution’s’’; 

15 (B) in subsection (b)—

16 (i) by striking ‘‘insured bank’’ and in17 serting ‘‘insured depository institution’’; 

18 (ii) by inserting ‘‘authorized only’’ 

19 after ‘‘performs any service’’; and 

20 (iii) by inserting ‘‘authorized only’’ 

21 after ‘‘perform any activity’’; and 

22 (C) in subsection (c)—

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

24 and inserting ‘‘any depository institution’’; 

25 and 
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1 (ii) by striking ‘‘capability of the 

2 bank’’ and inserting ‘‘capability of the de3 pository institution’’. 

4 (13) Section 7 of the Bank Service Company 

5 Act (12 U.S.C. 1867) is amended—

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

7 bank’’ and inserting ‘‘insured depository insti8 tution’’; and 

9 (B) in subsection (c)—

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

11 such term appears and inserting ‘‘a deposi12 tory institution’’; and 

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

14 such term appears and inserting ‘‘the de15 pository institution’’. 

16 SEC. 407. CROSS GUARANTEE AUTHORITY. 

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

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

19 amended to read as follows: 

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

21 same company; or’’. 

22 SEC. 408. GOLDEN PARACHUTE AUTHORITY AND NONBANK 

23 HOLDING COMPANIES. 

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

25 Insurance Act (12 U.S.C. 1828(k)) is amended—
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1 (1) in paragraph (2)(A), by striking ‘‘or deposi2 tory institution holding company’’ and inserting ‘‘or 

3 covered company’’; 

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

5 (2) and inserting the following new subparagraph: 

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

7 to believe that the institution-affiliated party is 

8 substantially responsible for—

9 ‘‘(i) the insolvency of the depository 

10 institution or covered company; 

11 ‘‘(ii) the appointment of a conservator 

12 or receiver for the depository institution; or 

13 ‘‘(iii) the depository institution’s trou14 bled condition (as defined in the regula15 tions prescribed pursuant to section 

16 32(f)).’’; 

17 (3) in paragraph (2)(F), by striking ‘‘depository 

18 institution holding company’’ and inserting ‘‘covered 

19 company,’’; 

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

21 subparagraph (A), by striking ‘‘depository institu22 tion holding company’’ and inserting ‘‘covered com23 pany’’; 

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

25 company’’ and inserting ‘‘covered company’’; 
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1 (6) in paragraph (4)(A)—

2 (A) by striking ‘‘depository institution 

3 holding company’’ each place such term appears 

4 and inserting ‘‘covered company’’; and 

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

6 place such term appears (other than in connec7 tion with the term referred to in subparagraph 

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

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

10 institution holding company’’ and inserting ‘‘covered 

11 company’’; 

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

13 following new subparagraph: 

14 ‘‘(D) COVERED COMPANY.—The term ‘cov15 ered company’ means any depository institution 

16 holding company (including any company re17 quired to file a report under section 4(f)(6) of 

18 the Bank Holding Company Act of 1956), or 

19 any other company that controls an insured de20 pository institution.’’; and 

21 (9) in paragraph (6)—

22 (A) by striking ‘‘depository institution 

23 holding company’’ and inserting ‘‘covered com24 pany,’’; and 
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1 (B) by striking ‘‘or holding company’’ and 

2 inserting ‘‘or covered company’’. 

3 SEC. 409. AMENDMENTS RELATING TO CHANGE IN BANK 

4 CONTROL. 

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

6 U.S.C. 1817(j)) is amended—

7 (1) in paragraph (1)(D)—

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

9 and inserting ‘‘is needed—

10 ‘‘(i) to investigate’’; 

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

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

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

14 clause: 

15 ‘‘(ii) to analyze the safety and sound16 ness of any plans or proposals described in 

17 paragraph (6)(E) or the future prospects 

18 of the institution.’’; and 

19 (2) in paragraph (7)(C), by striking ‘‘the finan20 cial condition of any acquiring person’’ and inserting 

21 ‘‘either the financial condition of any acquiring per22 son or the future prospects of the institution’’. 
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1 SEC. 410. COMMUNITY REINVESTMENT CREDIT FOR ESOPS 

2 AND EWOCS. 

3 Section 804 of the Community Reinvestment Act of 

4 1977 (12 U.S.C. 2903) is amended by adding at the end 

5 the following new subsection—

6 ‘‘(d) ESTABLISHMENT OF ESOPS AND EWOCS.—

7 ‘‘(1) IN GENERAL.—In assessing and taking 

8 into account, under subsection (a), the record of a 

9 financial institution, the appropriate Federal finan10 cial supervisory agency shall consider as a factor ac11 tivities that support or enable the establishment of 

12 employee stock ownership plans or eligible worker13 owned cooperatives, so long as the employer spon14 soring the plan or cooperative is at least 51 percent 

15 owned by employees, including low to moderate in16 come employees. 

17 ‘‘(2) DEFINITIONS.—For purposes of this sub18 section, the following definitions shall apply: 

19 ‘‘(A) EMPLOYEE STOCK OWNERSHIP

20 PLAN.—The term ‘employee stock ownership 

21 plan’ has the same meaning as in section 

22 4975(e)(7) of the Internal Revenue Code of 

23 1986. 

24 ‘‘(B) ELIGIBLE WORKER-OWNED COOPERA25 TIVE.—The term ‘eligible worker-owned cooper26 ative’ has the same meaning as in section 
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1 1042(c)(2) of the Internal Revenue Code of 

2 1986.’’. 

3 SEC. 411. MINORITY FINANCIAL INSTITUTIONS. 

4 (a) IN GENERAL.—The Federal Deposit Insurance 

5 Corporation and the Office of Thrift Supervision shall pro6 vide such technical assistance to minority financial institu7 tions affected by Hurricane Katrina, Hurricane Rita, and 

8 Hurricane Wilma as may be appropriate to preserve the 

9 present number of minority depository institutions and 

10 preserve the minority character in cases involving mergers 

11 or acquisitions of a minority depository institution con12 sistent with section 308(a) of the Financial Institutions 

13 Reform, Recovery, and Enforcement Act of 1989. 

14 (b) MINORITY FINANCIAL INSTITUTION DEFINED.—

15 For purposes of this subsection, the term ‘‘minority finan16 cial institution’’ has the same meaning as in section 

17 308(b) of the Financial Institutions Reform, Recovery, 

18 and Enforcement Act of 1989. 

19 TITLE V—DEPOSITORY INSTITU20 TION AFFILIATES PROVI21 SIONS 

22 SEC. 501. CLARIFICATION OF CROSS MARKETING PROVI23 SION. 

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

25 of 1956 (12 U.S.C. 1843(n)(5)) is amended—
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1 (1) in subparagraph (B), by striking ‘‘sub2 section (k)(4)(I)’’ and inserting ‘‘subparagraph (H) 

3 or (I) of subsection (k)(4)’’; and 

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

6 ‘‘(C) THRESHOLD OF CONTROL.—Subpara7 graph (A) shall not apply with respect to a 

8 company described or referred to in clause (i) 

9 or (ii) of such subparagraph if the financial 

10 holding company does not own or control 25 

11 percent or more of the total equity or any class 

12 of voting securities of such company.’’. 

13 SEC. 502. AMENDMENT TO PROVIDE THE FEDERAL RE14 SERVE BOARD WITH DISCRETION CON15 CERNING THE IMPUTATION OF CONTROL OF 

16 SHARES OF A COMPANY BY TRUSTEES. 

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

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

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

20 appropriate in light of the facts and circumstances of the 

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

22 the end. 
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1 SEC. 503. ELIMINATING GEOGRAPHIC LIMITS ON THRIFT 

2 SERVICE COMPANIES. 

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

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

5 1464(c)(4)(B)) (as amended by section 406(b)(3) of this 

6 Act) is amended—

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

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

9 inserting ‘‘company, if the entire capital of the com10 pany is available for purchase’’; and 

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

12 such State’’. 

13 (b) TECHNICAL CORRECTIONS.—

14 (1) The heading for subparagraph (B) of sec15 tion 5(c)(4) of the Home Owners’ Loan Act (12 

16 U.S.C. 1464(c)(4)(B)) is amended by striking ‘‘COR17 PORATIONS’’ and inserting ‘‘COMPANIES’’. 

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

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

20 amended by striking ‘‘service corporations’’ and in21 serting ‘‘service companies’’. 

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

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

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

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

26 ‘‘service company’’. 
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1 (4) Section 10(m)(4)(C)(iii)(II) of the Home 

2 Owners’ Loan Act (12 U.S.C. 

3 1467a(m)(4)(C)(iii)(II)) is amended by striking 

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

5 and inserting ‘‘service company’’. 

6 SEC. 504. CLARIFICATION OF SCOPE OF APPLICABLE RATE 

7 PROVISION. 

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

9 (12 U.S.C. 1831u(f)) is amended by adding at the end 

10 the following new paragraphs: 

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

12 other lender doing business in the State described in 

13 paragraph (1), the maximum interest rate or 

14 amount of interest, discount points, finance charges, 

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

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

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

18 of exchange, financing transaction, or other evidence 

19 of debt issued to or acquired by any other lender 

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

21 rates described in subparagraph (A) or (B) of para22 graph (1). 

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

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

25 person engaged in the business of selling or financ-
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1 ing the sale of personal property (and any services 

2 incidental to the sale of personal property) in such 

3 State, except that, with regard to any person or en4 tity described in such paragraph, such term does not 

5 include—

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

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

8 business of providing a short-term cash advance 

9 to any consumer in exchange for—

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

11 share draft, in the amount of the advance 

12 plus a fee, where presentment or negotia13 tion of such check or share draft is de14 ferred by agreement of the parties until a 

15 designated future date; or 

16 ‘‘(ii) a consumer authorization to 

17 debit the consumer’s transaction account, 

18 in the amount of the advance plus a fee, 

19 where such account will be debited on or 

20 after a designated future date.’’. 

21 SEC. 505. SAVINGS ASSOCIATIONS ACTING AS AGENTS FOR 

22 AFFILIATED DEPOSITORY INSTITUTIONS. 

23 (a) IN GENERAL.—Section 18(r) of the Federal De24 posit Insurance Act (12 U.S.C. 1828(r)) is amended—

25 (1) in paragraph (1)—
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1 (A) by striking ‘‘bank subsidiary’’ and in2 serting ‘‘depository institution subsidiary’’; and 

3 (B) by striking ‘‘bank holding company’’ 

4 and inserting ‘‘depository institution holding 

5 company’’; 

6 (2) in paragraph (2), by striking ‘‘a bank act7 ing’’ and inserting ‘‘a depository institution acting’’; 

8 (3) in paragraphs (3) and (5), by striking ‘‘or 

9 (6)’’ each place such term appears in each such 

10 paragraph; and 

11 (4) by striking paragraph (6). 

12 (b) CLERICAL AMENDMENT.—The heading for sec13 tion 18(r)(2) of the Federal Deposit Insurance Act (12 

14 U.S.C. 1828(r)) is amended by striking ‘‘BANK’’ and in15 serting ‘‘DEPOSITORY INSTITUTION’’. 

16 SEC. 506. CREDIT CARD BANK INVESTMENTS FOR THE PUB17 LIC WELFARE. 

18 Section 2(c)(2)(F) of the Bank Holding Company Act 

19 of 1956 (12 U.S.C. 1841(c)(2)(F)) is amended—

20 (1) in clause (i), by striking ‘‘engages only in 

21 credit card operations;’’ and inserting ‘‘engages only 

22 in—

23 ‘‘(I) credit card operations; and 

24 ‘‘(II) making investments de25 signed primarily to promote the public 
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1 welfare, including the welfare of low2 and moderate-income communities or 

3 families (such as by providing hous4 ing, services, or jobs), in the manner 

5 and to the extent permitted for na6 tional banks under the paragraph des7 ignated the ‘Eleventh’ of section 5136 

8 of the Revised Statutes of the United 

9 States and regulations prescribed 

10 under such paragraph, except that the 

11 last sentence of such paragraph shall 

12 be applied for purposes of this sub13 clause by substituting ‘5 percent’ for 

14 ‘15 percent’ each place such term ap15 pears; ’’; and 

16 (2) in clause (v), by inserting ‘‘, other than 

17 making or purchasing loans for the purposes de18 scribed in and to the extent permitted in clause 

19 (i)(II))’’ before the period at the end. 

20 TITLE VI—BANKING AGENCY 

21 PROVISIONS 

22 SEC. 601. WAIVER OF EXAMINATION SCHEDULE IN ORDER 

23 TO ALLOCATE EXAMINER RESOURCES. 

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

25 (12 U.S.C. 1820(d)) is amended—
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1 (1) by redesignating paragraphs (5), (6), (7), 

2 (8), (9), and (10) as paragraphs (6), (7), (8), (9), 

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

4 (2) by inserting after paragraph (4), the fol5 lowing new paragraph: 

6 ‘‘(5) WAIVER OF SCHEDULE WHEN NECESSARY

7 TO ACHIEVE SAFE AND SOUND ALLOCATION OF EX8 AMINER RESOURCES.—Notwithstanding paragraphs 

9 (1), (2), (3), and (4), an appropriate Federal bank10 ing agency may make adjustments in the examina11 tion cycle for an insured depository institution if 

12 necessary to allocate available resources of exam13 iners in a manner that provides for the safety and 

14 soundness of, and the effective examination and su15 pervision of, insured depository institutions.’’; and 

16 (3) in paragraphs (8) and (9), as so redesig17 nated, by striking ‘‘paragraph (6)’’ and inserting 

18 ‘‘paragraph (7)’’. 

19 SEC. 602. INTERAGENCY DATA SHARING. 

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

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

22 1817(a)(2)) is amended by adding at the end the following 

23 new subparagraph: 

24 ‘‘(C) DATA SHARING WITH OTHER AGEN25 CIES AND PERSONS.—In addition to reports of 
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1 examination, reports of condition, and other re2 ports required to be regularly provided to the 

3 Corporation (with respect to all insured deposi4 tory institutions, including a depository institu5 tion for which the Corporation has been ap6 pointed conservator or receiver) or an appro7 priate State bank supervisor (with respect to a 

8 State depository institution) under subpara9 graph (A) or (B), a Federal banking agency 

10 may, in the agency’s discretion, furnish any re11 port of examination or other confidential super12 visory information concerning any depository 

13 institution or other entity examined by such 

14 agency under authority of any Federal law, 

15 to—

16 ‘‘(i) any other Federal or State agen17 cy or authority with supervisory or regu18 latory authority over the depository institu19 tion or other entity; 

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

21 of such depository institution or entity; 

22 and 

23 ‘‘(iii) any other person the Federal 

24 banking agency determines to be appro25 priate.’’. 
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1 (b) NATIONAL CREDIT UNION ADMINISTRATION.—

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

3 U.S.C. 1782(a)) is amended by adding at the end the fol4 lowing new paragraph: 

5 ‘‘(8) DATA SHARING WITH OTHER AGENCIES

6 AND PERSONS.—In addition to reports of examina7 tion, reports of condition, and other reports required 

8 to be regularly provided to the Board (with respect 

9 to all insured credit unions, including a credit union 

10 for which the Corporation has been appointed con11 servator or liquidating agent) or an appropriate 

12 State commission, board, or authority having super13 vision of a State-chartered credit union, the Board 

14 may, in the Board’s discretion, furnish any report of 

15 examination or other confidential supervisory infor16 mation concerning any credit union or other entity 

17 examined by the Board under authority of any Fed18 eral law, to—

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

20 authority with supervisory or regulatory author21 ity over the credit union or other entity; 

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

23 such credit union or entity; and 
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1 ‘‘(C) any other institution-affiliated party 

2 of such credit union or entity the Board deter3 mines to be appropriate.’’. 

4 SEC. 603. PENALTY FOR UNAUTHORIZED PARTICIPATION 

5 BY CONVICTED INDIVIDUAL. 

6 Section 19 of the Federal Deposit Insurance Act (12 

7 U.S.C. 1829) is amended by adding at the end the fol8 lowing new subsection: 

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

10 shall apply to a noninsured national bank and a non11 insured State member bank, and any agency or non12 insured branch (as such terms are defined in section 1(b) 

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

14 bank as if such bank, branch, or agency were an insured 

15 depository institution, except such subsections shall be ap16 plied for purposes of this subsection by substituting the 

17 agency determined under the following paragraphs for 

18 ‘Corporation’ each place such term appears in such sub19 sections: 

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

21 case of a noninsured national bank or any Federal 

22 agency or noninsured Federal branch of a foreign 

23 bank. 

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

25 Reserve System, in the case of a noninsured State 
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1 member bank or any State agency or noninsured 

2 State branch of a foreign bank.’’. 

3 SEC. 604. AMENDMENT PERMITTING THE DESTRUCTION OF 

4 OLD RECORDS OF A DEPOSITORY INSTITU5 TION BY THE FDIC AFTER THE APPOINTMENT 

6 OF THE FDIC AS RECEIVER. 

7 Section 11(d)(15)(D) of the Federal Deposit Insur8 ance Act (12 U.S.C. 1821(d)(15)(D)) is amended—

9 (1) by striking ‘‘RECORDKEEPING REQUIRE10 MENT.—After the end of the 6-year period’’ and in11 serting ‘‘RECORDKEEPING REQUIREMENT.—

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clause (ii), after the end of the 6-

14 year period’’; 

15 (2) by striking ‘‘to be unnecessary’’ and insert16 ing ‘‘are unnecessary and not relevant to any pend17 ing or reasonably probable future litigation’’; and 

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

19 clause: 

20 ‘‘(ii) OLD RECORDS.—In the case of 

21 records of an insured depository institution 

22 which—

23 ‘‘(I) are at least 10 years old, as 

24 of the date the Corporation is ap-
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1 pointed as the receiver of such deposi2 tory institution; and 

3 ‘‘(II) are unnecessary and not 

4 relevant to any pending or reasonably 

5 probable future litigation, as provided 

6 in clause (i), 

7 the Corporation may destroy such records 

8 in accordance with clause (i) any time 

9 after such appointment is final without re10 gard to the 6-year period of limitation con11 tained in such clause.’’. 

12 SEC. 605. MODERNIZATION OF RECORDKEEPING REQUIRE13 MENT. 

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

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

16 follows: 

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

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

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

20 kept by the agency or in the possession or custody 

21 of the agency to be—

22 ‘‘(A) photographed or microphotographed 

23 or otherwise reproduced upon film; or 

24 ‘‘(B) preserved in any electronic medium 

25 or format which is capable of—
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1 ‘‘(i) being read or scanned by com2 puter; and 

3 ‘‘(ii) being reproduced from such elec4 tronic medium or format by printing or 

5 any other form of reproduction of elec6 tronically stored data. 

7 ‘‘(2) TREATMENT AS ORIGINAL RECORDS.—Any 

8 photographs, microphotographs, or photographic 

9 film or copies thereof described in paragraph (1)(A) 

10 or reproduction of electronically stored data de11 scribed in paragraph (1)(B) shall be deemed to be 

12 an original record for all purposes, including intro13 duction in evidence in all State and Federal courts 

14 or administrative agencies and shall be admissible to 

15 prove any act, transaction, occurrence, or event 

16 therein recorded. 

17 ‘‘(3) AUTHORITY OF THE FEDERAL BANKING

18 AGENCIES.—Any photographs, microphotographs, or 

19 photographic film or copies thereof described in 

20 paragraph (1)(A) or reproduction of electronically 

21 stored data described in paragraph (1)(B) shall be 

22 preserved in such manner as the Federal banking 

23 agency shall prescribe and the original records, pa24 pers, or documents may be destroyed or otherwise 
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1 disposed of as the Federal banking agency may di2 rect.’’. 

3 SEC. 606. STREAMLINING REPORTS OF CONDITION. 

4 Section 7(a) of the Federal Deposit Insurance Act 

5 (12 U.S.C. 1817(a)) is amended by adding the following 

6 new paragraph: 

7 ‘‘(11) STREAMLINING REPORTS OF CONDI8 TION.—

9 ‘‘(A) REVIEW OF INFORMATION AND

10 SCHEDULES.—Before the end of the 1-year pe11 riod beginning on the date of the enactment of 

12 the Financial Services Regulatory Relief Act of 

13 2005 and before the end of each 5-year period 

14 thereafter, each Federal banking agency shall, 

15 in consultation with the other relevant Federal 

16 banking agencies, review the information and 

17 schedules that are required to be filed by an in18 sured depository institution in a report of con19 dition required under paragraph (3). 

20 ‘‘(B) REDUCTION OR ELIMINATION OF IN21 FORMATION FOUND TO BE UNNECESSARY.—

22 After completing the review required by sub23 paragraph (A), a Federal banking agency, in 

24 consultation with the other relevant Federal 

25 banking agencies, shall reduce or eliminate any 
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1 requirement to file information or schedules 

2 under paragraph (3) (other than information or 

3 schedules that are otherwise required by law) if 

4 the agency determines that the continued collec5 tion of such information or schedules is no 

6 longer necessary or appropriate.’’. 

7 SEC. 607. EXPANSION OF ELIGIBILITY FOR 18-MONTH EX8 AMINATION SCHEDULE FOR COMMUNITY 

9 BANKS. 

10 Paragraph (4)(A) of section 10(d) of the Federal De11 posit Insurance Act (12 U.S.C. 1820(d)) is amended by 

12 striking ‘‘$250,000,000’’ and inserting ‘‘$1,000,000,000’’. 

13 SEC. 608. SHORT FORM REPORTS OF CONDITION FOR CER14 TAIN COMMUNITY BANKS. 

15 (a) IN GENERAL.—Section 7(a) of the Federal De16 posit Insurance Act (12 U.S.C. 1817(a)) is amended by 

17 inserting after paragraph (11) (as added by section 606 

18 of this title) the following new paragraph: 

19 ‘‘(12) SHORT FORM REPORTS OF CONDITION

20 FOR COMMUNITY BANKS.—

21 ‘‘(A) IN GENERAL.—With respect to re22 ports of condition required under paragraph (3) 

23 for each calendar quarter, an insured depository 

24 institution described in subparagraphs (A), (B), 

25 (C), and (D) of section 10(d)(4) may submit a 
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1 short form of any such report of condition in 2 

2 nonsequential quarters of any calendar year. 

3 ‘‘(B) SHORT FORM DEFINED.—The term 

4 ‘short form’, when used in connection with any 

5 report of condition required under paragraph 

6 (3), means a report of condition in a format es7 tablished by the appropriate Federal banking 

8 agency, after notice and opportunity for com9 ment, that—

10 ‘‘(i) is significantly and materially less 

11 burdensome for the insured depository in12 stitution to prepare than the format of the 

13 report of condition required under para14 graph (3); and 

15 ‘‘(ii) provides sufficient material infor16 mation for the appropriate Federal bank17 ing agency to assure the maintenance of 

18 the safe and sound condition of the deposi19 tory institution and safe and sound prac20 tices.’’. 

21 (b) REGULATIONS.—Any regulation required to carry 

22 out the amendment made by subsection (a) shall be pub23 lished in final form before the end of the 6-month period 

24 beginning on the date of the enactment of this Act. 
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1 SEC. 609. CLARIFICATION OF EXTENT OF SUSPENSION, RE2 MOVAL, AND PROHIBITION AUTHORITY OF 

3 FEDERAL BANKING AGENCIES IN CASES OF 

4 CERTAIN CRIMES BY INSTITUTION-AFFILI5 ATED PARTIES. 

6 (a) INSURED DEPOSITORY INSTITUTIONS.—

7 (1) IN GENERAL.—Section 8(g)(1) of the Fed8 eral Deposit Insurance Act (12 U.S.C. 1818(g)(1)) 

9 is amended—

10 (A) in subparagraph (A)—

11 (i) by striking ‘‘is charged in any in12 formation, indictment, or complaint, with 

13 the commission of or participation in’’ and 

14 inserting ‘‘is the subject of any informa15 tion, indictment, or complaint, involving 

16 the commission of or participation in’’; 

17 (ii) by striking ‘‘may pose a threat to 

18 the interests of the depository institution’s 

19 depositors or may threaten to impair pub20 lic confidence in the depository institu21 tion,’’ and insert ‘‘posed, poses, or may 

22 pose a threat to the interests of the deposi23 tors of, or threatened, threatens, or may 

24 threaten to impair public confidence in, 

25 any relevant depository institution (as de26 fined in subparagraph (E)),’’; and 
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1 (iii) by striking ‘‘affairs of the deposi2 tory institution’’ and inserting ‘‘affairs of 

3 any depository institution’’; 

4 (B) in subparagraph (B)(i), by striking 

5 ‘‘the depository institution’’ and inserting ‘‘any 

6 depository institution that the subject of the no7 tice is affiliated with at the time the notice is 

8 issued’’; 

9 (C) in subparagraph (C)(i)—

10 (i) by striking ‘‘may pose a threat to 

11 the interests of the depository institution’s 

12 depositors or may threaten to impair pub13 lic confidence in the depository institu14 tion,’’ and insert ‘‘posed, poses, or may 

15 pose a threat to the interests of the deposi16 tors of, or threatened, threatens, or may 

17 threaten to impair public confidence in, 

18 and relevant depository institution (as de19 fined in subparagraph (E)),’’; and 

20 (ii) by striking ‘‘affairs of the deposi21 tory institution’’ and inserting ‘‘affairs of 

22 any depository institution’’; 

23 (D) in subparagraph (C)(ii), by striking 

24 ‘‘affairs of the depository institution’’ and in25 serting ‘‘affairs of any depository institution’’; 
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1 (E) in subparagraph (D)(i), by striking 

2 ‘‘the depository institution’’ and inserting ‘‘any 

3 depository institution that the subject of the 

4 order is affiliated with at the time the order is 

5 issued’’; and 

6 (F) by adding at the end the following new 

7 subparagraph: 

8 ‘‘(E) RELEVANT DEPOSITORY INSTITU9 TION.—For purposes of this subsection, the 

10 term ‘relevant depository institution’ means any 

11 depository institution of which the party is or 

12 was an institution-affiliated party at the time—

13 ‘‘(i) the information, indictment or 

14 complaint described in subparagraph (A) 

15 was issued; or 

16 ‘‘(ii) the notice is issued under sub17 paragraph (A) or the order is issued under 

18 subparagraph (C)(i).’’. 

19 (2) CLERICAL AMENDMENT.—The heading for 

20 section 8(g) of the Federal Deposit Insurance Act 

21 (12 U.S.C. 1818(g)) is amended to read as follows: 

22 ‘‘(g) SUSPENSION, REMOVAL, AND PROHIBITION

23 FROM PARTICIPATION ORDERS IN THE CASE OF CERTAIN

24 CRIMINAL OFFENSES.—’’. 

25 (b) INSURED CREDIT UNIONS.—
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1 (1) IN GENERAL.—Section 206(i)(1) of the 

2 Federal Credit Union Act (12 U.S.C. 1786(i)(1)) is 

3 amended—

4 (A) in subparagraph (A), by striking ‘‘the 

5 credit union’’ each place such term appears and 

6 inserting ‘‘any credit union’’; 

7 (B) in subparagraph (B)(i), by inserting 

8 ‘‘of which the subject of the order is, or most 

9 recently was, an institution-affiliated party’’ be10 fore the period at the end; 

11 (C) in subparagraph (C)—

12 (i) by striking ‘‘the credit union’’ each 

13 place such term appears and inserting 

14 ‘‘any credit union’’; and 

15 (ii) by striking ‘‘the credit union’s’’ 

16 and inserting ‘‘any credit union’s’’; 

17 (D) in subparagraph (D)(i), by striking 

18 ‘‘upon such credit union’’ and inserting ‘‘upon 

19 the credit union of which the subject of the 

20 order is, or most recently was, an institution-af21 filiated party’’; and 

22 (E) by adding at the end the following new 

23 subparagraph: 

24 ‘‘(E) CONTINUATION OF AUTHORITY.—The 

25 Board may issue an order under this paragraph 
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1 with respect to an individual who is an institu2 tion-affiliated party at a credit union at the 

3 time of an offense described in subparagraph 

4 (A) without regard to—

5 ‘‘(i) whether such individual is an in6 stitution-affiliated party at any credit 

7 union at the time the order is considered 

8 or issued by the Board; or 

9 ‘‘(ii) whether the credit union at 

10 which the individual was an institution-af11 filiated party at the time of the offense re12 mains in existence at the time the order is 

13 considered or issued by the Board.’’. 

14 (2) CLERICAL AMENDMENT.—Section 206(i) of 

15 the Federal Credit Union Act (12 U.S.C. 1786(i)) is 

16 amended by striking ‘‘(i)’’ at the beginning and in17 serting the following new subsection heading: 

18 ‘‘(i) SUSPENSION, REMOVAL, AND PROHIBITION

19 FROM PARTICIPATION ORDERS IN THE CASE OF CERTAIN

20 CRIMINAL OFFENSES.—’’. 

21 SEC. 610. STREAMLINING DEPOSITORY INSTITUTION MERG22 ER APPLICATION REQUIREMENTS. 

23 (a) IN GENERAL.—Paragraph (4) of section 18(c) of 

24 the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) 

25 is amended to read as follows: 
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1 ‘‘(4) REPORTS ON COMPETITIVE FACTORS.—

2 ‘‘(A) REQUEST FOR REPORT.—In the in3 terests of uniform standards and subject to 

4 subparagraph (B), the responsible agency shall, 

5 before acting on any application for approval of 

6 a merger transaction—

7 ‘‘(i) request a report on the competi8 tive factors involved from the Attorney 

9 General; and 

10 ‘‘(ii) provide a copy of the request to 

11 the Corporation (when the Corporation is 

12 not the responsible agency). 

13 ‘‘(B) CONCURRENT CONSIDERATION.—The 

14 responsible agency shall not be required to 

15 make a request under subparagraph (A) before 

16 acting on an application for approval of a merg17 er transaction if—

18 ‘‘(i) the agency finds that it must act 

19 immediately in order to prevent the prob20 able failure of a depository institution in21 volved in the transaction; or 

22 ‘‘(ii) the transaction consists of a 

23 merger between an insured depository in24 stitution and 1 or more affiliates of the de25 pository institution. 
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1 ‘‘(C) FURNISHING OF REPORT.—The re2 port requested under subparagraph (A) shall be 

3 furnished by the Attorney General to the re4 sponsible agency—

5 ‘‘(i) not more than 30 calendar days 

6 after the date on which the Attorney Gen7 eral received the request; or 

8 ‘‘(ii) not more than 10 calendar days 

9 after such date, if the requesting agency 

10 advises the Attorney General that an emer11 gency exists requiring expeditious action.’’. 

12 (b) TECHNICAL AND CONFORMING AMENDMENT.—

13 Section 18(c)(6) of the Federal Deposit Insurance Act (12 

14 U.S.C. 1828(c)(6)) is amended—

15 (1) in the second sentence by striking ‘‘banks 

16 or savings associations involved’’ and inserting the 

17 following: ‘‘insured depository institutions involved, 

18 or if the proposed merger transaction is solely be19 tween an insured depository institution and 1 or 

20 more of affiliates of the depository institution,’’ and 

21 (2) by striking the penultimate sentence and in22 serting the following: ‘‘If the agency has advised the 

23 Attorney General under paragraph (4)(C)(ii) of the 

24 existence of an emergency requiring expeditious ac25 tion and has requested a report on the competitive 
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1 factors within 10 days, the transaction may not be 

2 consummated before the fifth calendar day after the 

3 date of approval by the agency.’’. 

4 SEC. 611. INCLUSION OF DIRECTOR OF THE OFFICE OF 

5 THRIFT SUPERVISION IN LIST OF BANKING 

6 AGENCIES REGARDING INSURANCE CUS7 TOMER PROTECTION REGULATIONS. 

8 Section 47(g)(2)(B)(i) of the Federal Deposit Insur9 ance Act (12 U.S.C. 1831x(g)(2)(B)(i)) is amended by in10 serting ‘‘the Director of the Office of Thrift Supervision,’’ 

11 after ‘‘Comptroller of the Currency,’’. 

12 SEC. 612. PROTECTION OF CONFIDENTIAL INFORMATION 

13 RECEIVED BY FEDERAL BANKING REGU14 LATORS FROM FOREIGN BANKING SUPER15 VISORS. 

16 Section 15 of the International Banking Act of 1978 

17 (12 U.S.C. 3109) is amended by adding at the end the 

18 following new subsection: 

19 ‘‘(c) CONFIDENTIAL INFORMATION RECEIVED FROM

20 FOREIGN SUPERVISORS.—

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (3), a Federal banking agency shall not be 

23 compelled to disclose information received from a 

24 foreign regulatory or supervisory authority if—
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1 ‘‘(A) the Federal banking agency deter2 mines that the foreign regulatory or supervisory 

3 authority has, in good faith, determined and 

4 represented to such Federal banking agency 

5 that public disclosure of the information would 

6 violate the laws applicable to that foreign regu7 latory or supervisory authority; and 

8 ‘‘(B) the relevant Federal banking agency 

9 obtained such information pursuant to—

10 ‘‘(i) such procedures as the Federal 

11 banking agency may establish for use in 

12 connection with the administration and en13 forcement of Federal banking laws; or 

14 ‘‘(ii) a memorandum of understanding 

15 or other similar arrangement between the 

16 Federal banking agency and the foreign 

17 regulatory or supervisory authority. 

18 ‘‘(2) TREATMENT UNDER TITLE 5, UNITED

19 STATES CODE.—For purposes of section 552 of title 

20 5, United States Code, this subsection shall be treat21 ed as a statute described in subsection (b)(3)(B) of 

22 such section. 

23 ‘‘(3) SAVINGS PROVISION.—No provision of this 

24 section shall be construed as—
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1 ‘‘(A) authorizing any Federal banking 

2 agency to withhold any information from any 

3 duly authorized committee of the House of Rep4 resentatives or the Senate; or 

5 ‘‘(B) preventing any Federal banking 

6 agency from complying with an order of a court 

7 of the United States in an action commenced by 

8 the United States or such agency. 

9 ‘‘(4) FEDERAL BANKING AGENCY DEFINED.—

10 For purposes of this subsection, the term ‘Federal 

11 banking agency’ means the Board, the Comptroller, 

12 the Federal Deposit Insurance Corporation, and the 

13 Director of the Office of Thrift Supervision.’’. 

14 SEC. 613. PROHIBITION ON PARTICIPATION BY CONVICTED 

15 INDIVIDUAL. 

16 (a) EXTENSION OF AUTOMATIC PROHIBITION.—Sec17 tion 19 of the Federal Deposit Insurance Act (12 U.S.C. 

18 1829) is amended by inserting after subsection (c) (as 

19 added by section 603 of this title) the following new sub20 sections: 

21 ‘‘(d) BANK HOLDING COMPANIES.—Subsections (a) 

22 and (b) shall apply to any company (other than a foreign 

23 bank) that is a bank holding company and any organiza24 tion organized and operated under section 25A of the Fed25 eral Reserve Act or operating under section 25 of the Fed-
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1 eral Reserve Act as if such bank holding company or orga2 nization were an insured depository institution, except 

3 such subsections shall be applied for purposes of this sub4 section by substituting ‘Board of Governors of the Federal 

5 Reserve System’ for ‘Corporation’ each place such term 

6 appears in such subsections. 

7 ‘‘(e) SAVINGS AND LOAN HOLDING COMPANIES.—

8 Subsections (a) and (b) shall apply to any savings and 

9 loan holding company and any subsidiary (other than a 

10 savings association) of a savings and loan holding com11 pany as if such savings and loan holding company or sub12 sidiary were an insured depository institution, except such 

13 subsections shall be applied for purposes of this subsection 

14 by substituting ‘Director of the Office of Thrift Super15 vision’ for ‘Corporation’ each place such term appears in 

16 such subsections.’’. 

17 (b) ENHANCED DISCRETION TO REMOVE CONVICTED

18 INDIVIDUALS.—Section 8(e)(2)(A) of the Federal Deposit 

19 Insurance Act (12 U.S.C. 1818(e)(2)(A)) is amended—

20 (1) by striking ‘‘or’’ at the end of clause (ii); 

21 (2) by striking the comma at the end of clause 

22 (iii) and inserting ‘‘; or’’; and 

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

24 clause: 
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1 ‘‘(iv) an institution-affiliated party of 

2 a subsidiary (other than a bank) of a bank 

3 holding company has been convicted of any 

4 criminal offense involving dishonesty or a 

5 breach of trust, or has agreed to enter into 

6 a pretrial diversion or similar program in 

7 connection with a prosecution for such an 

8 offense,’’. 

9 SEC. 614. CLARIFICATION THAT NOTICE AFTER SEPARA10 TION FROM SERVICE MAY BE MADE BY AN 

11 ORDER. 

12 (a) IN GENERAL.—Section 8(i)(3) of the Federal De13 posit Insurance Act (12 U.S.C. 1818(i)(3)) is amended by 

14 inserting ‘‘or order’’ after ‘‘notice’’ each place such term 

15 appears. 

16 (b) TECHNICAL AND CONFORMING AMENDMENT.—

17 The heading for section 8(i)(3) of the Federal Deposit In18 surance Act (12 U.S.C. 1818(i)(3)) is amended by insert19 ing ‘‘OR ORDER’’ after ‘‘NOTICE’’. 

20 SEC. 615. ENFORCEMENT AGAINST MISREPRESENTATIONS 

21 REGARDING FDIC DEPOSIT INSURANCE COV22 ERAGE. 

23 (a) IN GENERAL.—Section 18(a) of the Federal De24 posit Insurance Act (12 U.S.C. 1828(a)) is amended by 

25 adding at the end the following new paragraph: 
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1 ‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC

2 NAMES, AND MISREPRESENTATION TO INDICATE IN3 SURED STATUS.—

4 ‘‘(A) PROHIBITION ON FALSE ADVER5 TISING AND MISUSE OF FDIC NAMES.—No per6 son may—

7 ‘‘(i) use the terms ‘Federal Deposit’, 

8 ‘Federal Deposit Insurance’, ‘Federal De9 posit Insurance Corporation’, any combina10 tion of such terms, or the abbreviation 

11 ‘FDIC’ as part of the business name or 

12 firm name of any person, including any 

13 corporation, partnership, business trust, 

14 association, or other business entity; or 

15 ‘‘(ii) use such terms or any other sign 

16 or symbol as part of an advertisement, so17 licitation, or other document, 

18 to represent, suggest or imply that any deposit 

19 liability, obligation, certificate or share is in20 sured or guaranteed by the Federal Deposit In21 surance Corporation, if such deposit liability, 

22 obligation, certificate, or share is not insured or 

23 guaranteed by the Corporation. 
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1 ‘‘(B) PROHIBITION ON MISREPRESENTA2 TIONS OF INSURED STATUS.—No person may 

3 knowingly misrepresent—

4 ‘‘(i) that any deposit liability, obliga5 tion, certificate, or share is federally in6 sured, if such deposit liability, obligation, 

7 certificate, or share is not insured by the 

8 Corporation; or 

9 ‘‘(ii) the extent to which or the man10 ner in which any deposit liability, obliga11 tion, certificate, or share is insured by the 

12 Federal Deposit Insurance Corporation, if 

13 such deposit liability, obligation, certificate, 

14 or share is not insured by the Corporation 

15 to the extent or in the manner represented. 

16 ‘‘(C) AUTHORITY OF FDIC.—The Corpora17 tion shall have—

18 ‘‘(i) jurisdiction over any person that 

19 violates this paragraph, or aids or abets 

20 the violation of this paragraph; and 

21 ‘‘(ii) for purposes of enforcing the re22 quirements of this paragraph with regard 

23 to any person—
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1 ‘‘(I) the authority of the Cor2 poration under section 10(c) to con3 duct investigations; and 

4 ‘‘(II) the enforcement authority 

5 of the Corporation under subsections 

6 (b), (c), (d) and (i) of section 8, 

7 as if such person were a state nonmember in8 sured bank. 

9 ‘‘(D) OTHER ACTIONS PRESERVED.—No 

10 provision of this paragraph shall be construed 

11 as barring any action otherwise available, under 

12 the laws of the United States or any State, to 

13 any Federal or State law enforcement agency or 

14 individual.’’. 

15 (b) ENFORCEMENT ORDERS.—Section 8(c) of the 

16 Federal Deposit Insurance Act (12 U.S.C. 1818(c)) is 

17 amended by adding at the end the following new para18 graph: 

19 ‘‘(4) FALSE ADVERTISING OR MISUSE OF

20 NAMES TO INDICATE INSURED STATUS.—

21 ‘‘(A) TEMPORARY ORDER.—

22 ‘‘(i) IN GENERAL.—If a notice of 

23 charges served under subsection (b)(1) of 

24 this section specifies on the basis of par25 ticular facts that any person is engaged in 
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1 conduct described in section 18(a)(4), the 

2 Corporation may issue a temporary order 

3 requiring—

4 ‘‘(I) the immediate cessation of 

5 any activity or practice described, 

6 which gave rise to the notice of 

7 charges; and 

8 ‘‘(II) affirmative action to pre9 vent any further, or to remedy any ex10 isting, violation. 

11 ‘‘(ii) EFFECT OF ORDER.—Any tem12 porary order issued under this subpara13 graph shall take effect upon service. 

14 ‘‘(B) EFFECTIVE PERIOD OF TEMPORARY

15 ORDER.—A temporary order issued under sub16 paragraph (A) shall remain effective and en17 forceable, pending the completion of an admin18 istrative proceeding pursuant to subsection 

19 (b)(1) in connection with the notice of 

20 charges—

21 ‘‘(i) until such time as the Corpora22 tion shall dismiss the charges specified in 

23 such notice; or 
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1 ‘‘(ii) if a cease-and-desist order is 

2 issued against such person, until the effec3 tive date of such order. 

4 ‘‘(C) CIVIL MONEY PENALTIES.—Violations 

5 of section 18(a)(4) shall be subject to civil 

6 money penalties as set forth in subsection (i) in 

7 an amount not to exceed $1,000,000 for each 

8 day during which the violation occurs or con9 tinues.’’. 

10 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

11 (1) Section 18(a)(3) of the Federal Deposit In12 surance Act (12 U.S.C. 1828(a)) is amended—

13 (A) in the 1st sentence by striking ‘‘of this 

14 subsection’’ and inserting ‘‘of paragraphs (1) 

15 and (2)’’; 

16 (B) by striking the 2nd sentence; and 

17 (C) in the 3rd sentence, by striking ‘‘of 

18 this subsection’’ and inserting ‘‘of paragraphs 

19 (1) and (2)’’. 

20 (2) The heading for subsection (a) of section 18 

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

22 1828(a)) is amended by striking ‘‘INSURANCE

23 LOGO.—’’ and inserting ‘‘REPRESENTATIONS OF

24 DEPOSIT INSURANCE.—’’. 
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1 SEC. 616. CHANGES REQUIRED TO SMALL BANK HOLDING 

2 COMPANY POLICY STATEMENT ON ASSESS3 MENT OF FINANCIAL AND MANAGERIAL FAC4 TORS. 

5 (a) SMALL BANK HOLDING COMPANY POLICY

6 STATEMENT ON ASSESSMENT OF FINANCIAL AND MANA7 GERIAL FACTORS.—

8 (1) IN GENERAL.—Before the end of the 6-

9 month period beginning on the date of the enact10 ment of this Act, the Board of Governors of the 

11 Federal Reserve System shall publish in the Federal 

12 Register proposed revisions to the Small Bank Hold13 ing Company Policy Statement on Assessment of Fi14 nancial and Managerial Factors (12 C.F.R. part 

15 225—appendix C) that provide that the policy shall 

16 apply to a bank holding company which has pro 

17 forma consolidated assets of less than 

18 $1,000,000,000 and that—

19 (A) is not engaged in any nonbanking ac20 tivities involving significant leverage; and 

21 (B) does not have a significant amount of 

22 outstanding debt that is held by the general 

23 public. 

24 (2) ADJUSTMENT OF AMOUNT.—The Board of 

25 Governors of the Federal Reserve System shall an26 nually adjust the dollar amount referred to in para-
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1 graph (1) in the Small Bank Holding Company Pol2 icy Statement on Assessment of Financial and Man3 agerial Factors by an amount equal to the percent4 age increase, for the most recent year, in total assets 

5 held by all insured depository institutions, as deter6 mined by the Board. 

7 (b) INCREASE IN DEBT-TO-EQUITY RATIO OF SMALL

8 BANK HOLDING COMPANY.—Before the end of the 6-

9 month period beginning on the date of the enactment of 

10 this Act, the Board of Governors of the Federal Reserve 

11 System shall publish in the Federal Register proposed re12 visions to the Small Bank Holding Company Policy State13 ment on Assessment of Financial and Managerial Factors 

14 (12 C.F.R. part 225—appendix C) such that the debt-to15 equity ratio allowable for a small bank holding company 

16 in order to remain eligible to pay a corporate dividend and 

17 to remain eligible for expedited processing procedures 

18 under Regulation Y of the Board of Governors of the Fed19 eral Reserve System would increase from 1:1 to 3:1. 

20 SEC. 617. EXCEPTION TO ANNUAL PRIVACY NOTICE RE21 QUIREMENT UNDER THE GRAMM-LEACH-BLI22 LEY ACT. 

23 Section 503 of the Gramm-Leach-Bliley Act (15 

24 U.S.C. 6803) is amended by adding the following new sub25 sections: 
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1 ‘‘(c) EXCEPTION TO ANNUAL NOTICE REQUIRE2 MENT.—A financial institution that—

3 ‘‘(1) provides nonpublic personal information 

4 only in accordance with the provisions of subsection 

5 (b)(2) or (e) of section 502 or regulations prescribed 

6 under section 504(b); 

7 ‘‘(2) does not share information with affiliates 

8 under section 603(d)(2)(A) of the Fair Credit Re9 porting Act; and 

10 ‘‘(3) has not changed its policies and practices 

11 with regard to disclosing nonpublic personal infor12 mation from the policies and practices that were dis13 closed in the most recent disclosure sent to con14 sumers in accordance with this subsection, 

15 shall not be required to provide an annual disclosure under 

16 this subsection until such time as the financial institution 

17 fails to comply with any criteria described in paragraph 

18 (1), (2), or (3). 

19 ‘‘(d) EXCEPTION TO NOTICE REQUIREMENT.—A fi20 nancial institution shall not be required to provide any dis21 closure under this section if—

22 ‘‘(1) the financial institution is licensed by a 

23 State and is subject to existing regulation of con24 sumer confidentiality that prohibits disclosure of 

25 nonpublic personal information without knowing and 
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1 expressed consent of the consumer in the form of 

2 laws, rules, or regulation of professional conduct or 

3 ethics promulgated either by the court of highest ap4 pellate authority or by the principal legislative body 

5 or regulatory agency or body of any State of the 

6 United States, the District of Columbia, any terri7 tory of the United States, Puerto Rico, Guam, 

8 American Samoa, the Trust Territory of the Pacific 

9 Islands, the Virgin Islands, or the Northern Mariana 

10 Islands; or 

11 ‘‘(2) the financial institution is licensed by a 

12 State and becomes subject to future regulation of 

13 consumer confidentiality that prohibits disclosure of 

14 nonpublic personal information without knowing and 

15 expressed consent of the consumer in the form of 

16 laws, rules, or regulation of professional conduct or 

17 ethics promulgated either by the court of highest ap18 pellate authority or by the principal legislative body 

19 or regulatory agency or body of any State of the 

20 United States, the District of Columbia, any terri21 tory of the United States, Puerto Rico, Guam, 

22 American Samoa, the Trust Territory of the Pacific 

23 Islands, the Virgin Islands, or the Northern Mariana 

24 Islands.’’. 
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1 SEC. 618. BIENNIAL REPORTS ON THE STATUS OF AGENCY 

2 EMPLOYMENT OF MINORITIES AND WOMEN. 

3 (a) IN GENERAL.—Before December 31, 2005, 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. 619. 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) STATE BANK SUPERVISORS OF HOME AND

16 HOST STATES.—

17 ‘‘(A) HOME STATE OF BANK.—The appro18 priate State bank supervisor of the home State 

19 of an insured State bank has authority to ex20 amine and supervise the bank. 

21 ‘‘(B) HOST STATE BRANCHES.—The State 

22 bank supervisor of the home State of an in23 sured State bank and any State bank super24 visor of an appropriate host State shall exercise 

25 their respective authority to supervise and ex-
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1 amine the branches of the bank in a host State 

2 in accordance with the terms of any applicable 

3 cooperative agreement between the home State 

4 bank supervisor and the State bank supervisor 

5 of the relevant host State. 

6 ‘‘(C) SUPERVISORY FEES.—Except as ex7 pressly provided in a cooperative agreement be8 tween the State bank supervisors of the home 

9 State and any host State of an insured State 

10 bank, only the State bank supervisor of the 

11 home State of an insured State bank may levy 

12 or charge State supervisory fees on the bank. 

13 ‘‘(2) HOST STATE EXAMINATION.—

14 ‘‘(A) IN GENERAL.—With respect to a 

15 branch operated in a host State by an out-of16 State insured State bank that resulted from an 

17 interstate merger transaction approved under 

18 section 44 or that was established in such State 

19 pursuant to section 5155(g) of the Revised 

20 Statutes, the third undesignated paragraph of 

21 section 9 of the Federal Reserve Act or section 

22 18(d)(4) of this Act, the appropriate State bank 

23 supervisor of such host State may—

24 ‘‘(i) with written notice to the State 

25 bank supervisor of the bank’s home State 
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1 and subject to the terms of any applicable 

2 cooperative agreement with the State bank 

3 supervisor of such home State, examine 

4 such branch for the purpose of determining 

5 compliance with host State laws that are 

6 applicable pursuant to section 24(j) of this 

7 Act, including those that govern commu8 nity reinvestment, fair lending, and con9 sumer protection; and 

10 ‘‘(ii) if expressly permitted under and 

11 subject to the terms of a cooperative agree12 ment with the State bank supervisor of the 

13 bank’s home State or if such out-of-State 

14 insured State bank has been determined to 

15 be in a troubled condition by either the 

16 State bank supervisor of the bank’s home 

17 State or the bank’s appropriate Federal 

18 banking agency, participate in the exam19 ination of the bank by the State bank su20 pervisor of the bank’s home State to ascer21 tain that the activities of the branch in 

22 such host State are not conducted in an 

23 unsafe or unsound manner. 

24 ‘‘(B) NOTICE OF DETERMINATION.—
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1 ‘‘(i) IN GENERAL.—The State bank 

2 supervisor of the home State of an insured 

3 State bank should notify the State bank 

4 supervisor of each host State of the bank 

5 if there has been a final determination that 

6 the bank is in a troubled condition. 

7 ‘‘(ii) TIMING OF NOTICE.—The State 

8 bank supervisor of the home State of an 

9 insured State bank should provide notice 

10 under clause (i) as soon as reasonably pos11 sible but in all cases within 15 business 

12 days after the State bank supervisor has 

13 made such final determination or has re14 ceived written notification of such final de15 termination. 

16 ‘‘(3) HOST STATE ENFORCEMENT.—If the State 

17 bank supervisor of a host State determines that a 

18 branch of an out-of-State State insured State bank 

19 is violating any law of the host State that is applica20 ble to such branch pursuant to section 24(j) of this 

21 Act, including a law that governs community rein22 vestment, fair lending, or consumer protection, the 

23 State bank supervisor of the host State or, to the ex24 tent authorized by the law of the host State, a host 

25 State law enforcement officer may, with written no-
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1 tice to the State bank supervisor of the bank’s home 

2 State and subject to the terms of any applicable co3 operative agreement with the State bank supervisor 

4 of the bank’s home State, undertake such enforce5 ment actions and proceedings as would be permitted 

6 under the law of the host State as if the branch 

7 were a bank chartered by that host State. 

8 ‘‘(4) COOPERATIVE AGREEMENT.—

9 ‘‘(A) IN GENERAL.—The State bank super10 visors from 2 or more States may enter into co11 operative agreements to facilitate State regu12 latory supervision of State banks, including co13 operative agreements relating to the coordina14 tion of examinations and joint participation in 

15 examinations. For purposes of this subsection 

16 (h), the term ‘cooperative agreement’ means a 

17 written agreement that is signed by the home 

18 State bank supervisor and host State bank su19 pervisor to facilitate State regulatory super20 vision of State banks and includes nationwide 

21 or multi-state cooperative agreements and coop22 erative agreements solely between the home 

23 State and host State. 

24 ‘‘(B) RULE OF CONSTRUCTION.—Except 

25 for State bank supervisors, no provision of this 
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1 subsection relating to such cooperative agree2 ments shall be construed as limiting in any way 

3 the authority of home and host State law en4 forcement officers, regulatory supervisors, or 

5 other officials that have not signed such cooper6 ative agreements to enforce host State laws that 

7 are applicable to a branch of an out-of-State in8 sured State bank located in the host State pur9 suant to section 24(j) of this Act. 

10 ‘‘(5) FEDERAL REGULATORY AUTHORITY.—No 

11 provision of this subsection shall be construed as 

12 limiting in any way the authority of any Federal 

13 banking agency. 

14 ‘‘(6) STATE TAXATION AUTHORITY NOT AF15 FECTED.—No provision of this subsection (h) shall 

16 be construed as affecting the authority of any State 

17 or political subdivision of any State to adopt, apply, 

18 or administer any tax or method of taxation to any 

19 bank, bank holding company, or foreign bank, or 

20 any affiliate of any bank, bank holding company, or 

21 foreign bank, to the extent such tax or tax method 

22 is otherwise permissible by or under the Constitution 

23 of the United States or other Federal law. 

24 ‘‘(7) DEFINITIONS.—For purpose of this sec25 tion, the following definition shall apply: 
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1 ‘‘(A) HOST STATE, HOME STATE, OUT-OF2 STATE BANK.—The terms ‘host State’, ‘home 

3 State’, and ‘out-of-State bank’ have the same 

4 meanings as in section 44(g). 

5 ‘‘(B) STATE SUPERVISORY FEES.—The 

6 term ‘State supervisory fees’ means assess7 ments, examination fees, branch fees, license 

8 fees, and all other fees that are levied or 

9 charged by a State bank supervisor directly 

10 upon an insured State bank or upon branches 

11 of an insured State bank. 

12 ‘‘(C) TROUBLED CONDITION.—Solely for 

13 purposes of subparagraph (2)(B) of this sub14 section (h), an insured State bank has been de15 termined to be in ‘troubled condition’ if the 

16 bank—

17 ‘‘(i) has a composite rating, as deter18 mined in its most recent report of exam19 ination, of 4 or 5 under the Uniform Fi20 nancial Institutions Ratings System 

21 (UFIRS); or 

22 ‘‘(ii) is subject to a proceeding initi23 ated by the Corporation for termination or 

24 suspension of deposit insurance; or 
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1 ‘‘(iii) is subject to a proceeding initi2 ated by the State bank supervisor of the 

3 bank’s home State to vacate, revoke, or 

4 terminate the charter of the bank, or to 

5 liquidate the bank, or to appoint a receiver 

6 for the bank. 

7 ‘‘(D) FINAL DETERMINATION.—For the 

8 purposes of paragraph (2)(B), the term ‘final 

9 determination’ means the transmittal of a re10 port of examination to the bank or transmittal 

11 of official notice of proceedings to the bank.’’. 

12 SEC. 620. NONWAIVER OF PRIVILEGES. 

13 (a) INSURED DEPOSITORY INSTITUTIONS.—Section 

14 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) 

15 is amended by adding at the end the following new sub16 section: 

17 ‘‘(x) PRIVILEGES NOT AFFECTED BY DISCLOSURE TO

18 BANKING AGENCY OR SUPERVISOR.—

19 ‘‘(1) IN GENERAL.—The submission by any per20 son of any information to any Federal banking agen21 cy, State bank supervisor, or foreign banking au22 thority for any purpose in the course of any super23 visory or regulatory process of such agency, super24 visor, or authority shall not be construed as waiving, 

25 destroying, or otherwise affecting any privilege such 
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1 person may claim with respect to such information 

2 under Federal or State law as to any person or enti3 ty other than such agency, supervisor, or authority. 

4 ‘‘(2) RULE OF CONSTRUCTION.—No provision 

5 of paragraph (1) may be construed as implying or 

6 establishing that—

7 ‘‘(A) any person waives any privilege appli8 cable to information that is submitted or trans9 ferred under any circumstance to which para10 graph (1) does not apply; or 

11 ‘‘(B) any person would waive any privilege 

12 applicable to any information by submitting the 

13 information to any Federal banking agency, 

14 State bank supervisor, or foreign banking au15 thority, but for this subsection.’’. 

16 (b) INSURED CREDIT UNIONS.—Section 205 of the 

17 Federal Credit Union Act (12 U.S.C.1785) is amended by 

18 adding at the end the following new subsection: 

19 ‘‘(j) PRIVILEGES NOT AFFECTED BY DISCLOSURE TO

20 BANKING AGENCY OR SUPERVISOR.—

21 ‘‘(1) IN GENERAL.—The submission by any per22 son of any information to the Administration, any 

23 State credit union supervisor, or foreign banking au24 thority for any purpose in the course of any super25 visory or regulatory process of such Board, super-
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1 visor, or authority shall not be construed as waiving, 

2 destroying, or otherwise affecting any privilege such 

3 person may claim with respect to such information 

4 under Federal or State law as to any person or enti5 ty other than such Board, supervisor, or authority. 

6 ‘‘(2) RULE OF CONSTRUCTION.—No provision 

7 of paragraph (1) may be construed as implying or 

8 establishing that—

9 ‘‘(A) any person waives any privilege appli10 cable to information that is submitted or trans11 ferred under any circumstance to which para12 graph (1) does not apply; or 

13 ‘‘(B) any person would waive any privilege 

14 applicable to any information by submitting the 

15 information to the Administration, any State 

16 credit union supervisor, or foreign banking au17 thority, but for this subsection.’’. 

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

19 AMENDMENT. 

20 Paragraph (1) of section 1101 of the Right to Finan21 cial Privacy Act of 1978 (12 U.S.C. 3401) is amended 

22 by inserting ‘‘(including any lender who advances funds 

23 on pledges of personal property)’’ after ‘‘consumer finance 

24 institution’’. 
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1 SEC. 622. DEPUTY DIRECTOR; SUCCESSION AUTHORITY 

2 FOR DIRECTOR OF THE OFFICE OF THRIFT 

3 SUPERVISION. 

4 (a) ESTABLISHMENT OF POSITION OF DEPUTY DI5 RECTOR.—Section 3(c)(5) of the Home Owners’ Loan Act 

6 (12 U.S.C. 1462a(c)(5)) is amended to read as follows: 

7 ‘‘(5) DEPUTY DIRECTOR.—

8 ‘‘(A) IN GENERAL.—The Secretary of the 

9 Treasury shall appoint a Deputy Director and 

10 may appoint up to 3 additional Deputy Direc11 tors. 

12 ‘‘(B) FIRST DEPUTY DIRECTOR.—If the 

13 Secretary of the Treasury appoints more than 

14 1 Deputy Director of the Office, the Secretary 

15 shall designate one such appointee as the First 

16 Deputy Director. 

17 ‘‘(C) DUTIES.—Each Deputy Director ap18 pointed under this paragraph shall take an oath 

19 of office and perform such duties as the Direc20 tor shall direct. 

21 ‘‘(D) COMPENSATION AND BENEFITS.—

22 The Director shall fix the compensation and 

23 benefits for each Deputy Director in accordance 

24 with this Act.’’. 
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1 (b) SERVICE OF DEPUTY DIRECTOR AS ACTING DI2 RECTOR.—Section 3(c)(3) of the Home Owners’ Loan Act 

3 (12 U.S.C. 1462a(c)(3)) is amended—

4 (1) by striking ‘‘VACANCY.—A vacancy in the 

5 position of Director’’ and inserting ‘‘VACANCY.—

6 ‘‘(A) IN GENERAL.—A vacancy in the posi7 tion of Director’’; and 

8 (2) by adding at the end the following new sub9 paragraphs: 

10 ‘‘(B) ACTING DIRECTOR.—

11 ‘‘(i) IN GENERAL.—In the event of a 

12 vacancy in the position of Director or dur13 ing the absence or disability of the Direc14 tor, the Deputy Director shall serve as 

15 Acting Director. 

16 ‘‘(ii) SUCCESSION IN CASE OF 2 OR

17 MORE DEPUTY DIRECTORS.—If there are 2 

18 or more Deputy Directors serving at the 

19 time a vacancy in the position of Director 

20 occurs or the absence or disability of the 

21 Director commences, the First Deputy Di22 rector shall serve as Acting Director under 

23 clause (i) followed by such other Deputy 

24 Directors under any order of succession 

25 the Director may establish. 
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1 ‘‘(iii) AUTHORITY OF ACTING DIREC2 TOR.—Any Deputy Director, while serving 

3 as Acting Director under this subpara4 graph, shall be vested with all authority, 

5 duties, and privileges of the Director under 

6 this Act and any other provision of Federal 

7 law.’’. 

8 SEC. 623. LIMITATION ON SCOPE OF NEW AGENCY GUIDE9 LINES. 

10 (a) IN GENERAL.—The provisions of the multi-agen11 cy guidance Numbered 2003–1 issued by the Comptroller 

12 of the Currency, the Board of Governors of the Federal 

13 Reserve System, the Federal Deposit Insurance Corpora14 tion, and the Director of the Office of Thrift Supervision 

15 that relate to minimum credit card payments and negative 

16 amortization—

17 (1) shall only apply to new credit card accounts 

18 established by a creditor for a consumer after the 

19 date of the enactment of this Act under an open end 

20 consumer credit plan; and 

21 (2) shall not apply to any outstanding balance 

22 on any credit card account under an open end con23 sumer credit plan as of such date of enactment. 

24 (b) DEFINITIONS.—For purposes of this section, the 

25 terms ‘‘credit’’, ‘‘credit card’’, ‘‘creditor’’, ‘‘consumer’’ and 
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1 ‘‘open end credit plan’’ have the same meanings as in sec2 tion 103 of the Truth in Lending Act. 

3 (c) SUNSET PROVISION.—This section shall not apply 

4 after the end of the 3-year period beginning on the date 

5 of the enactment of this Act . 

6 TITLE VII—‘‘BSA’’ COMPLIANCE 

7 BURDEN REDUCTION 

8 SEC. 701. EXCEPTION FROM CURRENCY TRANSACTION RE9 PORTS FOR SEASONED CUSTOMERS. 

10 (a) FINDINGS.—The Congress finds as follows: 

11 (1) The completion of and filing of currency 

12 transaction reports under section 5313 of title 31, 

13 United States Code, poses a compliance burden on 

14 the financial industry. 

15 (2) Due to the nature of the transactions or the 

16 persons and entities conducting such transactions, 

17 certain such reports as currently filed do not appear 

18 to be relevant to the detection, deterrence, or inves19 tigation of financial crimes, including money laun20 dering and the financing of terrorism. 

21 (3) However, the data contained in such reports 

22 can provide valuable context for the analysis of other 

23 data derived pursuant to subchapter II of chapter 

24 53 of title 31, United States Code, as well as inves25 tigative data, which provides invaluable and indis-
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1 pensable information supporting efforts to combat 

2 money laundering and other financial crimes. 

3 (4) An exemption from the reporting require4 ments for certain currency transactions that are of 

5 little or no value to ongoing efforts of law enforce6 ment agencies, financial regulatory agencies, and the 

7 financial services industry to investigate, detect, or 

8 deter financial crimes would serve to balance the 

9 burden placed on members of the financial services 

10 industry with the compelling need to produce and 

11 provide meaningful information to policy-makers, fi12 nancial regulators, law enforcement, and intelligence 

13 agencies. 

14 (5) The Secretary of the Treasury has by regu15 lation, and in accordance with section 5313 of title 

16 31, United States Code, implemented a process by 

17 which institutions may seek exemptions from filing 

18 certain currency transaction reports based on appro19 priate circumstances; however, the existing exemp20 tion process has not adequately balanced the burden 

21 on the financial industry with the Government’s 

22 need for data to support its efforts in combating fi23 nancial crime. 

24 (6) The act of providing notice to the Secretary 

25 of the Treasury of designations of exemption pro-
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1 vides meaningful information to law enforcement of2 ficials on exempt customers and enables law enforce3 ment to obtain account information through appro4 priate legal process; the act of providing notice of 

5 designations of exemption complements other sec6 tions of title 31, United States Code, whereby law 

7 enforcement can locate financial institutions with 

8 relevant records relating to a person of investigative 

9 interest, such as information requests made pursu10 ant to regulations implementing section 314(a) of 

11 the USA PATRIOT Act of 2001. 

12 (7) A designation of exemption has no effect on 

13 requirements for depository institutions to apply the 

14 full range of anti-money laundering controls as set 

15 forth in subchapter II of chapter 53 of title 31, 

16 United States Code, including the requirement to 

17 apply the customer identification program pursuant 

18 to Section 5326 of subchapter II of chapter 53 of 

19 title 31, United States Code, and the requirement to 

20 identify, monitor, and, if appropriate, report sus21 picious activity in accordance with section 5318(g) 

22 of title 31, United States Code. 

23 (8) The Federal banking agencies and the Fi24 nancial Crimes Enforcement Network have recently 

25 provided guidance through the Federal Financial In-
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1 stitutions Examination Council Bank Secrecy Act/

2 Anti-Money Laundering Examination Manual on ap3 plying appropriate levels of due diligence and identi4 fying suspicious activity by the types of cash-inten5 sive businesses that generally will be subject to ex6 emption. 

7 (b) SEASONED CUSTOMER EXEMPTION.—

8 (1) IN GENERAL.—Section 5313(e) of title 31, 

9 United States Code, is amended to read as follows: 

10 ‘‘(e) QUALIFIED CUSTOMER EXEMPTION.—

11 ‘‘(1) IN GENERAL.—The Secretary of the 

12 Treasury shall prescribe regulations within 270 days 

13 of the enactment of the Financial Services Regu14 latory Relief Act of 2005 that exempt any depository 

15 institution from filing a report pursuant to this sec16 tion in a transaction for the payment, receipt, or 

17 transfer of United States coins or currency (or other 

18 monetary instruments the Secretary of the Treasury 

19 prescribes) with a qualified customer of the deposi20 tory institution. 

21 ‘‘(2) QUALIFIED CUSTOMER DEFINED.—For 

22 purposes of this section, the term ‘qualified cus23 tomer’, with respect to a depository institution, has 

24 such meaning as the Secretary of the Treasury shall 

25 prescribe, which shall include any person that—
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1 ‘‘(A) is incorporated or organized under 

2 the laws of the United States or any State, in3 cluding a sole proprietorship, or is registered as 

4 and eligible to do business within the United 

5 States or a State; 

6 ‘‘(B) has maintained a deposit account 

7 with the depository institution for at least 12 

8 months; and 

9 ‘‘(C) has engaged, using such account, in 

10 multiple currency transactions that are subject 

11 to the reporting requirements of subsection (a). 

12 ‘‘(3) REGULATIONS.—

13 ‘‘(A) IN GENERAL.—The Secretary of the 

14 Treasury shall prescribe regulations requiring a 

15 depository institution to file a 1-time notice of 

16 designation of exemption for each qualified cus17 tomer of the depository institution. 

18 ‘‘(B) FORM AND CONTENT OF EXEMPTION

19 NOTICE.—The Secretary shall by regulation 

20 prescribe the form, manner, content, and timing 

21 of the qualified customer exemption notice; such 

22 notice shall include information sufficient to 

23 identify the qualified customer and its accounts. 

24 ‘‘(C) AUTHORITY OF SECRETARY.—
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1 ‘‘(i) IN GENERAL.—The Secretary 

2 may suspend, reject or revoke any qualified 

3 customer exemption notice, in accordance 

4 with criteria prescribed by the Secretary by 

5 regulation. 

6 ‘‘(ii) CONDITIONS.—The Secretary 

7 may establish conditions, in accordance 

8 with criteria prescribed by regulation, 

9 under which exempt qualified customers of 

10 an insured depository institution that is 

11 merged with or acquired by another in12 sured depository institution will continue 

13 to be treated as designated exempt quali14 fied customers of the surviving or acquir15 ing institution.’’. 

16 (c) 3-YEAR REVIEW AND REPORT.—Before the end 

17 of the 3-year period beginning on the date of the enact18 ment of this Act, the Secretary of the Treasury, in con19 sultation with the Attorney General, the Secretary of the 

20 Department of Homeland Security, the Federal banking 

21 agencies, the banking industry, and such other persons as 

22 the Secretary deems appropriate, shall evaluate the oper23 ations and effect of this provision and make recommenda24 tions to Congress as to any legislative action with respect 
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1 to this provision as the Secretary may determine to be ap2 propriate. 

3 SEC. 702. REDUCTION IN INCONSISTENCIES IN MONETARY 

4 TRANSACTION RECORDKEEPING AND RE5 PORTING ENFORCEMENT AND EXAMINATION 

6 REQUIREMENTS. 

7 (a) SENSE OF THE CONGRESS.—It is the sense of the 

8 Congress that inconsistencies and redundancies among 

9 regulations implementing monetary transaction record10 keeping and reporting enforcement programs under sec11 tion 8 of the Federal Deposit Insurance Act, section 

12 206(q) of the Federal Credit Union Act, and chapter II 

13 of chapter 53 of title 31, United States Code by the Sec14 retary of the Treasury and the Federal banking agen15 cies—

16 (1) increase the difficulty depository institutions 

17 have in complying with congressional intent in cre18 ating such enforcement programs, 

19 (2) reduce the transparency and clarity of the 

20 regulatory regime; 

21 (3) increase the potential for conflict among the 

22 various regulations in the future; and 

23 (4) contribute to the perception that various 

24 agencies involved in the enforcement of the monetary 
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1 transaction recordkeeping and reporting require2 ments apply such requirements inconsistently. 

3 (b) AGENCY COORDINATION OF MONETARY TRANS4 ACTION RECORDKEEPING AND REPORTING REQUIRE5 MENTS.—

6 (1) ENFORCEMENT PROGRAMS.—

7 (A) FEDERAL DEPOSIT INSURANCE ACT.—

8 Section 8(s) of the Federal Deposit Insurance 

9 Act (12 U.S.C. 1818(s)) is amended by adding 

10 at the end the following new paragraph: 

11 ‘‘(4) COORDINATION ON UNIFORM REQUIRE12 MENTS.—In prescribing regulations under paragraph 

13 (1), the Federal banking agencies, acting through 

14 the Financial Institutions Examination Council, 

15 shall—

16 ‘‘(A) consult with each other, the National 

17 Credit Union Administration Board, and the 

18 Secretary of the Treasury; and 

19 ‘‘(B) take such action as may be necessary 

20 to ensure that the requirements for procedures 

21 established pursuant to such regulations, and 

22 the examination standards for reviewing such 

23 procedures, are congruent and reasonably uni24 form (taking into account differences in the 
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1 form and function of the institutions subject to 

2 such requirements).’’. 

3 (B) FEDERAL CREDIT UNION ACT.—Sec4 tion 206(q) of the Federal Credit Union Act 

5 (12 U.S.C. 1786(q)) is amended by adding at 

6 the end the following new paragraph: 

7 ‘‘(4) COORDINATION ON UNIFORM REQUIRE8 MENTS.—In prescribing regulations under paragraph 

9 (1), the Board, acting through the Financial Institu10 tions Examination Council, shall—

11 ‘‘(A) consult with the Federal banking 

12 agencies and the Secretary of the Treasury; and 

13 ‘‘(B) take such action as may be necessary 

14 to ensure that the requirements for procedures 

15 established pursuant to such regulations, and 

16 the examination standards for reviewing such 

17 procedures, are congruent and reasonably uni18 form (taking into account differences in the 

19 form and function of the institutions subject to 

20 such requirements).’’. 

21 (2) EXAMINATION STANDARDS AND DIS22 PUTES.—Section 1006 of the Federal Financial In23 stitutions Examination Council Act of 1978 (12 

24 U.S.C. 3305) is amended by adding at the end the 

25 following new subsection: 
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1 ‘‘(h) MONETARY TRANSACTION RECORDKEEPING

2 AND REPORTING REQUIREMENTS.—The Council and the 

3 Secretary of the Treasury shall jointly establish—

4 ‘‘(1) uniform standards and principles applica5 ble to the examination of financial institutions to en6 sure compliance with the requirements of subchapter 

7 II of chapter 53, United States Code, sections 8(s) 

8 and 21 of the Federal Deposit Insurance Act, and 

9 section 206(q) of the Federal Credit Union Act; and 

10 ‘‘(2) a clear policy statement on appropriate 

11 processes for resolving examiner-institution disagree12 ments concerning the application of subchapter II of 

13 chapter 53, United States Code, sections 8(s) and 

14 21 of the Federal Deposit Insurance Act, and sec15 tion 206(q) of the Federal Credit Union Act to fi16 nancial institutions.’’. 

17 (3) EFFECTIVE DATE.—The Federal banking 

18 agencies, the National Credit Union Administration 

19 Board, the Financial Institutions Examination 

20 Council, and the Secretary of the Treasury shall 

21 commence the discussions and consultations required 

22 under the amendments made by this subsection as 

23 soon as practicable after the date of the enactment 

24 of this Act. 
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1 (c) REVIEW OF AND REPORT ON ADDITIONAL REGU2 LATORY OR LEGISLATIVE CHANGES.—

3 (1) REVIEW REQUIRED.—Before the end of the 

4 6-month period beginning on the date of the enact5 ment of this Act, the Secretary of the Treasury shall 

6 conduct a review of the potential inconsistencies in, 

7 or redundancies among, the regulations pertaining to 

8 the application of the requirements of subchapter II 

9 of chapter 53, United States Code, sections 8(s) and 

10 21 of the Federal Deposit Insurance Act, and sec11 tion 206(q) of the Federal Credit Union Act to fi12 nancial institutions. 

13 (2) REPORT TO CONGRESS AND THE FINANCIAL

14 INSTITUTIONS EXAMINATION COUNCIL.—Upon com15 pletion of the review under paragraph (1), the Sec16 retary of the Treasury shall promptly submit a re17 port on the findings and conclusions of the Secretary 

18 with respect to the review to the Committee on Fi19 nancial Services of the House of Representatives and 

20 the Committee on Banking, Housing, and Urban Af21 fairs of the Senate, together with such recommenda22 tions for legislative and administrative actions as the 

23 Secretary may determine to be appropriate, and 

24 shall transmit a copy of such report to the members 

25 of the Financial Institutions Examination Council. 
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1 (d) REFORM OF APPLICATION OF MONETARY TRANS2 ACTION RECORDKEEPING AND REPORTING REQUIRE3 MENTS TO FINANCIAL INSTITUTIONS.—Before the end of 

4 the 9-month period beginning on the date of the submis5 sion of the report to Congress under subsection (c)(2), the 

6 Secretary of the Treasury shall prescribe regulations im7 plementing appropriate changes to regulations within the 

8 jurisdiction of the Secretary to remedy redundancies or 

9 inconsistencies identified in the review by, and included 

10 in the recommendations of, the Secretary under subsection 

11 (c). 

12 SEC. 703. ADDITIONAL REFORMS RELATING TO MONETARY 

13 TRANSACTION AND RECORDKEEPING RE14 QUIREMENTS APPLICABLE TO FINANCIAL IN15 STITUTIONS. 

16 (a) NOTIFICATION OF OFFICERS AND DIRECTORS OF

17 FINANCIAL INSTITUTIONS.—Before the end of the 6-

18 month period beginning on the date of the enactment of 

19 this Act, the Secretary of the Treasury shall—

20 (1) review any regulation, guideline, or guid21 ance of the Secretary, any Federal banking agency, 

22 or the National Credit Union Administration Board 

23 that serves as the basis for any requirement to pro24 vide notice to any officer or director of a depository 

25 institution of any suspicious activity report sub-
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1 mitted by the depository institution to the Secretary 

2 and any such agency or Board; 

3 (2) modify or eliminate any such requirement of 

4 the Secretary that the Secretary determines is not 

5 necessary to achieve the purposes of section 5318(g) 

6 of title 31, United States Code; and 

7 (3) make a recommendation to any Federal 

8 banking agency or the National Credit Union Ad9 ministration Board to modify or eliminate any such 

10 requirement of such agency or Board that the Sec11 retary determines is not necessary to achieve the 

12 purposes of section 5318(g) of title 31, United 

13 States Code. 

14 (b) ELIMINATION OF UNNECESSARY VERIFICATION

15 REQUIREMENTS APPLICABLE TO THE PURCHASE OF FI16 NANCIAL INSTRUMENTS.—Before the end of the 9-month 

17 period beginning on the date of the enactment of this Act, 

18 the Secretary of the Treasury shall—

19 (1) review all verification of customer identity 

20 requirements as they relate to the purchases of mon21 etary instruments by customers of depository institu22 tions, including the regulations codified in section 

23 103.29(a)(ii) of title 31, Code of Federal Regula24 tions; and 
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1 (2) modify or eliminate any customer identity 

2 requirement related to the purchases of monetary in3 struments by customers of depository institutions 

4 codified in section 103.29(a)(ii) of title 31, Code of 

5 Federal Regulations, that the Secretary determines 

6 is unnecessary. 

7 (c) ELIMINATION OF RECURRING FILINGS OF SUS8 PICIOUS ACTIVITY REPORTS ON A SINGLE TRANS9 ACTION.—Before the end of the 9-month period beginning 

10 on the date of the enactment of this Act, the Secretary 

11 of the Treasury, as appropriate, shall prescribe regula12 tions, or issue other forms of guidance, that eliminate the 

13 need for depository institutions to file recurring suspicious 

14 activity reports on the same transaction unless there has 

15 been a subsequent change in any pattern of activity involv16 ing any person who was connected with the transaction. 

17 (d) ELECTRONIC ACKNOWLEDGEMENT OF CERTAIN

18 ELECTRONIC FILINGS.—Before the end of the 1-year pe19 riod beginning on the date of the enactment of this Act, 

20 the Director of the Financial Crimes Enforcement Net21 work shall put into effect a system for promptly furnishing 

22 an electronic acknowledgement of receipt to any institu23 tion that files a form with FinCEN under subchapter II 

24 of chapter 53 of title 31, United States Code, through the 

25 Network’s electronic filing system. 
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1 SEC. 704. STUDY BY COMPTROLLER GENERAL. 

2 (a) STUDY REQUIRED.—The Comptroller General of 

3 the United States shall conduct a study on methods and 

4 practices which would—

5 (1) reduce the overall number of currency 

6 transaction reports filed with the Secretary of the 

7 Treasury under section 5313(a) of title 31, United 

8 States Code, while ensuring that the needs of the 

9 Secretary, the Financial Crimes Enforcement Net10 work, law enforcement agencies, and financial insti11 tution regulatory agencies continue to be met; 

12 (2) improve financial institution utilization of 

13 the current exemption provisions; and 

14 (3) mitigate the difficulties in the current im15 plementation of such exemption provisions that limit 

16 the utility of the exemption process for financial in17 stitutions. 

18 (b) REPORT.—Before the end of the 6-month period 

19 beginning on the date of the enactment of this Act, the 

20 Comptroller General shall submit a report to the Com21 mittee on Financial Services of the House of Representa22 tives and the Committee on Banking, Housing, and Urban 

23 Affairs of the Senate on the findings and conclusions of 

24 the Comptroller General with respect to the study con25 ducted under subsection (a) and such recommendations 
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1 for legislative and administrative action as the Comp2 troller General may determine to be appropriate. 

3 SEC. 705. FEASIBILITY STUDY REQUIRED. 

4 (a) IN GENERAL.—For the purpose of simplifying, 

5 and increasing compliance with, the various recordkeeping 

6 and reporting requirements under subchapter II of chap7 ter 53 of title 31, United States Code, chapter 2 of title 

8 I of Public Law 91—508, and section 21 of the Federal 

9 Deposit Insurance Act, and regulations prescribed under 

10 such provisions of law, the Secretary of the Treasury 

11 (hereafter in this section referred to as the ‘‘Secretary’’) 

12 shall conduct a study on the feasibility of developing and 

13 implementing interfaces and templates for use in elec14 tronic communications between financial institutions (as 

15 defined in section 5312 of title 31, United States Code) 

16 and the Secretary, the Financial Crimes Enforcement 

17 Network, and other Federal financial institution regu18 latory agencies. 

19 (b) FACTORS TO BE CONSIDERED.—In conducting 

20 the study required under subsection (a), the Secretary 

21 shall take into account—

22 (1) any procedures required to be maintained 

23 by financial institutions under regulations prescribed 

24 pursuant to section 5318(a)(2) of title 31 of the 

25 United States Code and the manner in which the 
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1 use of interfaces and templates which might be de2 veloped could lessen the burden of complying with 

3 such procedures; and 

4 (2) any exemptions prescribed by the Secretary 

5 under paragraph (5) or (6) of such section 5318(a) 

6 and the manner in which interfaces and templates 

7 which might be developed could be programmed to 

8 reflect any such exemption for a financial institu9 tion, transaction, or class of transactions. 

10 (c) PROTOTYPE AND REPORT REQUIRED.—

11 (1) IN GENERAL.—Before the end of the 1-year 

12 period beginning on the date of the enactment of 

13 this Act, the Secretary shall submit a report to the 

14 Congress containing a detailed description of the 

15 findings and conclusions of the Secretary in connec16 tion with the study required under subsection (a), 

17 together with such recommendations for legislative 

18 or administrative action as the Secretary may deter19 mine to be appropriate. 

20 (2) PROTOTYPE.—Any recommendation on the 

21 feasibility of developing and implementing interfaces 

22 and templates for use in electronic communications 

23 shall be accompanied by prototypes of such inter24 faces and templates that demonstrate such feasi25 bility. 
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1 (d) DEFINITIONS.—For purposes of this section, the 

2 following definitions shall apply: 

3 (1) INTERFACE.—The term ‘‘interface’’ means 

4 the point and method of interaction between any 2 

5 or more electronic data storage and communication 

6 systems that permits and facilitates active electronic 

7 communication between or among the systems, in8 cluding any procedures, codes, and protocols that en9 able the systems to interact. 

10 (2) TEMPLATE.—The term ‘‘template’’ means a 

11 preestablished layout model using word processing or 

12 other authoring software that ensures that data en13 tered into it will adhere to a consistent format and 

14 content scheme when used by all parties engaged in 

15 electronic communications among each other. 

16 SEC. 706. ANNUAL REPORT BY SECRETARY OF THE TREAS17 URY. 

18 (a) FINDINGS.—The Congress finds as follows: 

19 (1) Financial institutions have too little infor20 mation about money laundering and terrorist financ21 ing compliance in other markets. 

22 (2) The current Financial Action Task Force 

23 designation system does not adequately represent 

24 the progress countries are making in combatting 

25 money laundering. 
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1 (3) Lack of information about the compliance 

2 of countries with anti-money laundering standards 

3 exposes United States financial markets to excessive 

4 risk. 

5 (4) Failure to designate countries that fail to 

6 make progress in combatting terrorist financing and 

7 money laundering eliminates incentives for internal 

8 reform. 

9 (5) The Secretary of the Treasury has an af10 firmative duty to provide to financial institutions 

11 and examiners the best possible information on com12 pliance with anti-money laundering and terrorist fi13 nancing initiatives in other markets. 

14 (b) REPORT.—Not later than March 1 of each year, 

15 the Secretary of the Treasury shall submit to the Congress 

16 a report that identifies the applicable standards of each 

17 country against money laundering and states whether that 

18 country is a country of primary money laundering concern 

19 under section 5318A of title 31, United States Code. The 

20 report shall include—

21 (1) information on the effectiveness of each 

22 country in meeting its standards against money 

23 laundering; 

24 (2) a determination of whether that the efforts 

25 of that country to combat money laundering and ter-
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1 rorist financing are adequate, improving, or inad2 equate; and 

3 (3) the efforts made by the Secretary to provide 

4 to the government of each such country of concern 

5 technical assistance to cease the activities that were 

6 the basis for the determination that the country was 

7 of primary money laundering concern. 

8 (c) DISSEMINATION OF INFORMATION IN REPORT.—

9 The Secretary of the Treasury shall make available to the 

10 Federal Financial Institutions Examination Council for 

11 incorporation into the examination process, in consultation 

12 with Federal banking agencies, and to financial institu13 tions the information contained in the report submitted 

14 under subsection (a). Such information shall be made 

15 available to financial institutions without cost. 

16 (d) DEFINITION.—For purposes of this section, the 

17 term ‘‘financial institution’’ has the meaning given that 

18 term in section 5312(a)(2) of title 31, United States Code. 

19 SEC. 707. PRESERVATION OF MONEY SERVICES BUSI20 NESSES. 

21 (a) FINDINGS.—The Congress finds as follows: 

22 (1) Title III of the USA PATRIOT ACT pro23 vided United States law enforcement agencies with 

24 new tools to combat terrorist financing and money 

25 laundering. 
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1 (2) The Financial Crimes Enforcement Net2 work in the Department of the Treasury (hereafter 

3 in this section referred to as ‘‘FinCEN’’ ) has de4 fined money services businesses to include the fol5 lowing 5 distinct types of financial services providers 

6 as well as the United States Postal Service: 

7 (A) Currency dealers or exchanges. 

8 (B) Check cashing services. 

9 (C) Issuers of travelers’ checks, money or10 ders, or stored value cards. 

11 (D) Sellers or redeemers of travelers’ 

12 checks, money orders, or stored value cards. 

13 (E) Money transmitters. 

14 (3) Money services businesses have had more 

15 difficulty in obtaining and maintaining banking serv16 ices since the passage of the USA PATRIOT ACT. 

17 (4) On March 30, 2005, FinCEN and the Fed18 eral banking agencies (as defined in section 3 of the 

19 Federal Deposit Insurance Act) issued a joint state20 ment recognizing the importance of ensuring that 

21 money services businesses that comply with the law 

22 have reasonable access to banking services. 

23 (5) On April 26, 2005, FinCEN offered guid24 ance to money service businesses on obtaining and 

25 maintaining banking services by identifying and ex-
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1 plaining to money services businesses the types of 

2 information and documentation they are expected to 

3 have, and to provide to, depository institutions when 

4 conducting banking business. 

5 (6) At the same time, FinCEN and the Federal 

6 banking agencies have issued joint guidance to de7 pository institutions to—

8 (A) clarify the requirements of subchapter 

9 II of chapter 53 of title 31, United States Code, 

10 and related provisions of law; and 

11 (B) set forth the minimum steps that de12 pository institutions should take when providing 

13 banking services to money services businesses. 

14 (7) It is in the interest of the United States 

15 and its allies in the wars against terrorism and 

16 drugs to make certain that the international transfer 

17 of funds is done in a rules-based, formal, and trans18 parent manner and that individuals are not forced 

19 into utilizing informal underground methods due to 

20 a lack of services. 

21 (b) SENSE OF THE CONGRESS.—It is the sense of 

22 the Congress that depository institutions and money serv23 ices businesses should follow the guidance offered by 

24 FinCEN for the purpose of giving money services busi25 nesses full access to banking services and ensuring that 
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1 money services businesses remain in the mainstream fi2 nancial system and can be full players in providing impor3 tant financial services to their customers and be fully co4 operative in the fight against terrorist financing and 

5 money laundering. 

6 TITLE VIII—CLERICAL AND 

7 TECHNICAL AMENDMENTS 

8 SEC. 801. CLERICAL AMENDMENTS TO THE HOME OWNERS’ 

9 LOAN ACT. 

10 (a) AMENDMENT TO TABLE OF CONTENTS.—The 

11 table of contents in section 1 of the Home Owners’ Loan 

12 Act (12 U.S.C. 1461) is amended by striking the items 

13 relating to sections 5 and 6 and inserting the following 

14 new items:

‘‘Sec. 5. Savings associations. 

‘‘Sec. 6. [Repealed.].’’.

15 (b) CLERICAL AMENDMENTS TO HEADINGS.—

16 (1) The heading for section 4(a) of the Home 

17 Owners’ Loan Act (12 U.S.C. 1463(a)) is amended 

18 by striking ‘‘(a) FEDERAL SAVINGS ASSOCIA19 TIONS.—’’ and inserting ‘‘(a) GENERAL RESPON20 SIBILITIES OF THE DIRECTOR.—’’. 

21 (2) The section heading for section 5 of the 

22 Home Owners’ Loan Act (12 U.S.C. 1464) is 

23 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 ‘‘the Act ap7 proved 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 the heading for subparagraph (A) of 

8 section 207(d)(3), strike ‘‘TO’’ and insert ‘‘WITH’’. 

9 (23) In section 207(f)(3)(A), strike ‘‘category 

10 or claimants’’ and insert ‘‘category of claimants’’. 

11 (24) In section 209(a)(8), strike the period at 

12 the end and insert a semicolon. 

13 (25) In section 216(n), insert ‘‘any action’’ be14 fore ‘‘that is required’’. 

15 (26) In section 304(b)(3), strike ‘‘the affairs or 

16 such credit union’’ and insert ‘‘the affairs of such 

17 credit union’’. 

18 (27) In section 310, strike ‘‘section 102(e)’’ and 

19 insert ‘‘section 102(d)’’. 

20 SEC. 803. OTHER TECHNICAL CORRECTIONS. 

21 (a) Section 1306 of title 18, United States Code, is 

22 amended by striking ‘‘5136A’’ and inserting ‘‘5136B’’. 

23 (b) Section 5239 of the Revised Statutes of the 

24 United States (12 U.S.C. 93) is amended by redesignating 

25 the second of the 2 subsections designated as subsection 
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1 (d) (as added by section 331(b)(3) of the Riegle Commu2 nity Development and Regulatory Improvement Act of 

3 1994) as subsection (e). 

4 SEC. 804. REPEAL OF OBSOLETE PROVISIONS OF THE BANK 

5 HOLDING COMPANY ACT OF 1956. 

6 (a) IN GENERAL.—Section 2 of the Bank Holding 

7 Company Act of 1956 (12 U.S.C. 1841) is amended—

8 (1) in subsection (c)(2), by striking subpara9 graphs (I) and (J); and 

10 (2) by striking subsection (m) and inserting the 

11 following new subsection: 

12 ‘‘(m) [Repealed]’’. 

13 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

14 Paragraphs (1) and (2) of section 4(h) of the Bank Hold15 ing Company Act of 1956 (12 U.S.C. 1843(h)) are each 

16 amended by striking ‘‘(G), (H), (I), or (J) of section 

17 2(c)(2)’’ and inserting ‘‘(G), or (H) of section 2(c)(2)’’. 

18 TITLE IX—FAIR DEBT COLLEC19 TION PRACTICES ACT AMEND20 MENTS 

21 SEC. 901. EXCEPTION FOR CERTAIN BAD CHECK ENFORCE22 MENT PROGRAMS. 

23 (a) IN GENERAL.—The Fair Debt Collection Prac24 tices Act (15 U.S.C. 1692 et seq.) is amended—
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1 (1) by redesignating section 818 as section 819; 

2 and 

3 (2) by inserting after section 817 the following 

4 new section: 

5 ‘‘§ 818. Exception for certain bad check enforcement 

6 programs operated by private entities 

7 ‘‘(a) IN GENERAL.—If—

8 ‘‘(1) a State or district attorney establishes, 

9 within the jurisdiction of such State or district attor10 ney and with respect to alleged bad check violations 

11 that do not involve a check described in subsection 

12 (c), a pretrial diversion program for alleged bad 

13 check offenders who agree to participate voluntarily 

14 in such program to avoid criminal prosecution and 

15 are not described in subsection (b); 

16 ‘‘(2) a private entity, that is subject to an ad17 ministrative support services contract with a State 

18 or district attorney and operates under the direction, 

19 supervision and control of such State or district at20 torney, operates the pretrial diversion program de21 scribed in paragraph (1); and 

22 ‘‘(3) in the course of performing duties dele23 gated to it by a State or district attorney under the 

24 contract, the private entity referred to in paragraph 

25 (2)—
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1 ‘‘(A) complies with the penal laws of the 

2 State; 

3 ‘‘(B) conforms with the terms of the con4 tract and directives of the State or district at5 torney; 

6 ‘‘(C) does not exercise independent pros7 ecutorial discretion; 

8 ‘‘(D) contacts any alleged offender referred 

9 to in paragraph (1) for purposes of partici10 pating in a program referred to in such para11 graph only—

12 ‘‘(i) as a result of any determination 

13 by the State or district attorney that suffi14 cient evidence of a bad check violation 

15 under State law exists and that contact 

16 with the alleged offender for purposes of 

17 participation in the program is appro18 priate; or 

19 ‘‘(ii) as otherwise permitted in re20 sponse to evidence of a bad check; 

21 ‘‘(E) includes as part of an initial written 

22 communication with an alleged offender a clear 

23 and conspicuous statement that—

24 ‘‘(i) the alleged offender may dispute 

25 the validity of any alleged bad check viola-
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1 tion through a procedure established and 

2 supervised by the State or district attor3 ney, together with an explanation of how 

4 such a dispute may be initiated; and 

5 ‘‘(ii) where the alleged offender 

6 knows, or has reasonable cause to believe, 

7 that the alleged bad check violation is the 

8 result of theft or forgery of the check, 

9 identity theft, or other fraud that is not 

10 the result of the alleged offender’s conduct, 

11 the alleged offender may file a crime report 

12 with the appropriate law enforcement 

13 agency and have further contacts or res14 titution efforts suspended until the ques15 tion of the theft or forgery of the check, 

16 identity theft, or other fraud has been re17 solved, together with clear instructions on 

18 how to file such crime report; and 

19 ‘‘(F) charges only fees in connection with 

20 services under the contract that—

21 ‘‘(i) have been authorized by the con22 tract with the State or district attorney; 

23 and 

24 ‘‘(ii) conform with the schedule of rea25 sonable charges for such services which 
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1 shall be established by the National Dis2 trict Attorney’s Association, after consulta3 tion with the Commission and representa4 tives of interested business and consumer 

5 organizations, 

6 the private entity shall be treated as an officer of the State 

7 and excluded from the definition of debt collector, pursu8 ant to the exception provided in section 803(6)(C), with 

9 respect to the entity’s operation of the program described 

10 in paragraph (1) under the contract described in para11 graph (2). 

12 ‘‘(b) CERTAIN OFFENDERS EXCLUDED.—An alleged 

13 bad check offender is described in this subsection if a pri14 vate entity described in subsection (a)(2) can determine 

15 from available records that such offender— 

16 ‘‘(1) was convicted of a bad check offense in the 

17 3 years prior to issuing the bad check under consid18 eration; or 

19 ‘‘(2) participated in a pretrial diversion pro20 gram in the 18 months prior to issuing the bad 

21 check under consideration. 

22 ‘‘(c) CERTAIN CHECKS EXCLUDED.—A check is de23 scribed in this subsection if the check involves, or is subse24 quently found to involve—
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1 ‘‘(1) a postdated check presented in connection 

2 with a payday loan, or other similar transaction, 

3 where the holder of the check knew that the issuer 

4 had insufficient funds at the time the check was 

5 made, drawn or delivered; 

6 ‘‘(2) a stop payment order where the issuer 

7 acted in good faith and with reasonable cause in 

8 stopping payment on the check; 

9 ‘‘(3) a check dishonored because of an adjust10 ment to the issuer’s account by the financial institu11 tion holding such account without providing notice 

12 to the person at the time the check was made, 

13 drawn or delivered; 

14 ‘‘(4) a check for partial payment of a debt 

15 where the holder had previously accepted partial 

16 payment for such debt; 

17 ‘‘(5) a check issued by a person who was not 

18 competent, or was not of legal age, to enter into a 

19 legal contractual obligation at the time the check 

20 was made, drawn or delivered; or 

21 ‘‘(6) a check issued to pay an obligation arising 

22 from a transaction that was illegal in the jurisdiction 

23 of the State or district attorney at the time the 

24 check was made, drawn or delivered. 
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1 ‘‘(d) DEFINITIONS.—For purposes of this section, the 

2 following definitions shall apply: 

3 ‘‘(1) STATE OR DISTRICT ATTORNEY.—The 

4 term ‘State or district attorney’ means the chief 

5 elected or appointed prosecuting attorney in a dis6 trict, county (as defined in section 2 of title 1, 

7 United States Code), municipality, or comparable ju8 risdiction, including State attorneys general who act 

9 as chief elected or appointed prosecuting attorneys 

10 in a district, county (as so defined), municipality or 

11 comparable jurisdiction, who may be referred to by 

12 a variety of titles such as district attorneys, pros13 ecuting attorneys, commonwealth’s attorneys, solici14 tors, county attorneys, and state’s attorneys, and 

15 who are responsible for the prosecution of State 

16 crimes and violations of jurisdiction-specific local or17 dinances. 

18 ‘‘(2) CHECK.—The term ‘check’ has the same 

19 meaning as in section 3(6) of the Check Clearing for 

20 the 21st Century Act. 

21 ‘‘(3) BAD CHECK.—The term ‘bad check’ means 

22 any check that—

23 ‘‘(A) the issuer knew, or should have 

24 known, would not be paid upon presentment be25 cause the issuer—
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1 ‘‘(i) had no account with the drawee 

2 financial institution at the time the check 

3 was made, drawn, or delivered; 

4 ‘‘(ii) had closed the account upon with 

5 the check was made or drawn prior to the 

6 time the check was made, drawn, or deliv7 ered; or 

8 ‘‘(iii) used a false or altered check, or 

9 false or altered check account number; or 

10 ‘‘(B) was refused payment by the financial 

11 institution or other drawee for lack of sufficient 

12 funds and the issuer failed to pay the full 

13 amount of the check, together with reasonable 

14 costs as permitted by State law—

15 ‘‘(i) after receiving written notice 

16 from the holder of the check that payment 

17 was refused by the drawee financial insti18 tution to the extent that the timing and 

19 mode of delivery of such written notice is 

20 in compliance with the applicable State law 

21 for determining criminal liability for bad 

22 check offenses; or 

23 ‘‘(ii) in a case in which there are no 

24 applicable State law requirements as de25 scribed in clause (i), within 30 days of re-
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1 ceiving written notice, mailed to the issuer 

2 by certified mail to the address printed on 

3 the check, or given at the time the check 

4 was made, drawn or delivered or, other5 wise, at the address where the alleged of6 fender resides or is found, from the holder 

7 of the check that payment of 1 or more 

8 checks was refused by the drawee financial 

9 institution.’’. 

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

11 for the Fair Debt Collection Practices Act is amended—

12 (1) by redesignating the item relating to section 

13 818 as section 819; and 

14 (2) by inserting after the item relating to sec15 tion 817 the following new item:

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

16 SEC. 902. OTHER AMENDMENTS. 

17 (a) LEGAL PLEADINGS.—Section 809 of the Fair 

18 Debt Collection Practices Act (15 U.S.C. 1692g) is 

19 amended by adding at the end the following new sub20 section: 

21 ‘‘(d) LEGAL PLEADINGS.—A communication in the 

22 form of a formal pleading in a civil action shall not be 

23 treated as an initial communication for purposes of sub24 section (a).’’. 
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1 (b) NOTICE PROVISIONS.—Section 809 of the Fair 

2 Debt Collection Practices Act (15 U.S.C. 1692g) is 

3 amended by adding after subsection (d) (as added by sub4 section (a) of this section) the following new subsection: 

5 ‘‘(e) NOTICE PROVISIONS.—The sending or delivery 

6 of any form or notice which does not request the payment 

7 of a debt and is expressly required by any other Federal 

8 or State law or regulation, including the Internal Revenue 

9 Code of 1986, title V of Gramm-Leach-Bliley Act, and any 

10 data security breach notice and privacy law shall not be 

11 treated as a communication in connection with debt collec12 tion. ’’. 

13 (c) ESTABLISHMENT OF RIGHT TO COLLECT WITHIN

14 THE FIRST 30 DAYS.—Section 809(b) of the Fair Debt 

15 Collection Practices Act (15 U.S.C. 1692g(b)) is amended 

16 by striking ‘‘If the consumer’’ and inserting ‘‘Collection 

17 activities and communications may continue during any 

18 30-day period referred to in subsection (a). However, if 

19 the consumer’’.

Passed the House of Representatives March 8, 

2006. 

Attest:

Clerk.