IB 

Union Calendar No. 206 

109TH CONGRESS 

2D SESSION H. R. 3505 

[Report No. 109–356, Parts I and II] 

To provide regulatory relief and improve productivity for insured depository 

institutions, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 28, 2005 

Mr. HENSARLING (for himself and Mr. MOORE of Kansas) introduced the 

following bill; which was referred to the Committee on Financial Services 

DECEMBER 17, 2005 

Reported from the Committee on Financial Services with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

DECEMBER 17, 2005 

Referred to the Committee on the Judiciary, for a period ending not later than 

December 31, 2005 for consideration of such provisions of the bill and 

amendment as fall within the jurisdiction of that committee pursuant to 

clause 1(l), rule X 

DECEMBER 31, 2005 

Referral to the Committee on the Judiciary extended for a period ending not 

later than February 3, 2006 

FEBRUARY 3, 2006 

Referral to the Committee on the Judiciary extended for a period ending not 

later than February 24, 2006 

FEBRUARY 16, 2006 

Additional sponsors: Mr. HINOJOSA, Mr. ROSS, Mr. ROTHMAN, Mr. CROWLEY, 

Ms. WASSERMAN SCHULTZ, Mr. FEENEY, Mr. BACHUS, Mr. MARCHANT, 

Mr. GILLMOR, Mr. NEUGEBAUER, Mr. LEWIS of California, Mr. MEEKS

of New York, Mr. PEARCE, Mr. RYUN of Kansas, Mr. ISRAEL, Mr. PAUL, 

Mr. SESSIONS, Mr. JONES of North Carolina, Ms. ROYBAL-ALLARD, Mr. 

GARRETT of New Jersey, Ms. HOOLEY, Mr. RENZI, Mr. CANTOR, Mr. 
2 

•HR 3505 RH2 

ADERHOLT, Mr. MILLER of Florida, Mr. AL GREEN of Texas, Mrs. 

MALONEY, Mr. PENCE, Mr. RUPPERSBERGER, Mr. MCCAUL of Texas, 

Mr. LEWIS of Kentucky, Mr. SOUDER, Mr. RYAN of Ohio, Mr. WELLER, 

Mr. SODREL, Ms. HARRIS, Mr. CARNAHAN, and Mr. CHABOT

FEBRUARY 16, 2006 

Reported from the Committee on the Judiciary with an amendment, committed to the Committee of the Whole House on the State of the Union, 

and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on July 28, 2005] 

A BILL 

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, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the ‘‘Fi5 nancial Services Regulatory Relief Act of 2005’’. 

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

7 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. 
3 

•HR 3505 RH2 

Sec. 110. Clarification of the main place of business of a national bank. 

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

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

TITLE II—SAVINGS ASSOCIATION PROVISIONS 

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

1934 and the Investment Advisers Act of 1940. 

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

public welfare. 

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

Sec. 204. Repeal of statutory dividend notice requirement for savings association 

subsidiaries of savings and loan holding companies. 

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

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

rights. 

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

small business investment companies. 

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

Sec. 209. Selling and offering of deposit products. 

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

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

branches. 

Sec. 212. Small business and other commercial loans. 

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

jurisdiction. 

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

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

Sec. 216. Savings association credit card banks. 

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

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

TITLE III—CREDIT UNION PROVISIONS 

Sec. 301. Privately insured credit unions authorized to become members of a Federal home loan bank. 

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

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

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

loans to 15 years. 

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

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

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

membership. 

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

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

Sec. 310. Credit union governance. 

Sec. 311. Providing the National Credit Union Administration with greater flexibility in responding to market conditions. 

Sec. 312. Exemption from pre-merger notification requirement of the Clayton Act. 
4 

•HR 3505 RH2 

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

laws. 

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

purposes of prompt corrective action. 

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

TITLE IV—DEPOSITORY INSTITUTION PROVISIONS 

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

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

for depository institutions. 

Sec. 403. Reporting requirements relating to insider lending. 

Sec. 404. Amendment to provide an inflation adjustment for the small depository 

institution exception under the Depository Institution Management Interlocks Act. 

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

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

authorized. 

Sec. 407. Cross guarantee authority. 

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

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

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

Sec. 411. Minority financial institutions. 

TITLE V—DEPOSITORY INSTITUTION AFFILIATES PROVISIONS 

Sec. 501. Clarification of cross marketing provision. 

Sec. 502. Amendment to provide the Federal Reserve Board with discretion concerning the imputation of control of shares of a company by 

trustees. 

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

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

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

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

TITLE VI—BANKING AGENCY PROVISIONS 

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

Sec. 602. Interagency data sharing. 

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

Sec. 604. Amendment permitting the destruction of old records of a depository institution by the FDIC after the appointment of the FDIC as receiver. 

Sec. 605. Modernization of recordkeeping requirement. 

Sec. 606. Streamlining reports of condition. 

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

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

Sec. 609. Clarification of extent of suspension, removal, and prohibition authority 

of Federal banking agencies in cases of certain crimes by institution-affiliated parties. 

Sec. 610. Streamlining depository institution merger application requirements. 

Sec. 611. Inclusion of Director of the Office of Thrift Supervision in list of banking agencies regarding insurance customer protection regulations. 
5 

•HR 3505 RH2 

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. 

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 

•HR 3505 RH2 

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

2 during’’ and inserting the following: 

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

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

5 a national bank shall, during’’; 

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

7 director must own in his or her own right’’ and in8 serting ‘‘total number of directors. 

9 ‘‘(b) INVESTMENT REQUIREMENT.— 

10 ‘‘(1) IN GENERAL.—Every director of a national 

11 bank shall own, in his or her own right,’’; and 

12 (3) by adding at the end the following new para13 graph: 

14 ‘‘(2) EXCEPTION FOR SUBORDINATED DEBT IN

15 CERTAIN CASES.—In lieu of the requirements of para16 graph (1) relating to the ownership of capital stock 

17 in the national bank, the Comptroller of the Currency 

18 may, by regulation or order, permit an individual to 

19 serve as a director of a national bank that has elected, 

20 or notifies the Comptroller of the bank’s intention to 

21 elect, to operate as a S corporation pursuant to sec22 tion 1362(a) of the Internal Revenue Code of 1986, if 

23 that individual holds debt of at least $1,000 issued by 

24 the national bank that is subordinated to the interests 
7 

•HR 3505 RH2 

1 of depositors and other general creditors of the na2 tional bank.’’. 

3 (b) CLERICAL AMENDMENT.—The table of sections for 

4 chapter one of title LXII of the Revised Statutes of the 

5 United States (12 U.S.C. 21 et seq.) is amended by striking 

6 the item relating to section 5146 and inserting the following 

7 new item: 

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

8 SEC. 102. VOTING IN SHAREHOLDER ELECTIONS. 

9 Section 5144 of the Revised Statutes of the United 

10 States (12 U.S.C. 61) is amended— 

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

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

13 national bank, to cumulate’’; 

14 (2) by striking the comma after ‘‘his shares shall 

15 equal’’; and 

16 (3) by adding at the end the following new sen17 tence: ‘‘The Comptroller of the Currency may pre18 scribe such regulations to carry out the purposes of 

19 this section as the Comptroller determines to be ap20 propriate.’’. 

21 SEC. 103. SIMPLIFYING DIVIDEND CALCULATIONS FOR NA22 TIONAL BANKS. 

23 (a) IN GENERAL.—Section 5199 of the Revised Stat24 utes of the United States (12 U.S.C. 60) is amended to read 

25 as follows: 
8 

•HR 3505 RH2 

1 ‘‘SEC. 5199. NATIONAL BANK DIVIDENDS. 

2 ‘‘(a) IN GENERAL.—Subject to subsection (b), the di3 rectors of any national bank may declare a dividend of so 

4 much of the undivided profits of the bank as the directors 

5 judge to be expedient. 

6 ‘‘(b) APPROVAL REQUIRED UNDER CERTAIN CIR7 CUMSTANCES.—A national bank may not declare and pay 

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

9 sum of the total of the net income of the bank for that year 

10 and the retained net income of the bank in the preceding 

11 two years, minus any transfers required by the Comptroller 

12 of the Currency (including any transfers required to be 

13 made to a fund for the retirement of any preferred stock), 

14 unless the Comptroller of the Currency approves the dec15 laration and payment of dividends in excess of such 

16 amount.’’. 

17 (b) CLERICAL AMENDMENT.—The table of sections for 

18 chapter three of title LXII of the Revised Statutes of the 

19 United States is amended by striking the item relating to 

20 section 5199 and inserting the following new item: 

‘‘5199. National bank dividends.’’. 
9 

•HR 3505 RH2 

1 SEC. 104. REPEAL OF OBSOLETE LIMITATION ON REMOVAL 

2 AUTHORITY OF THE COMPTROLLER OF THE 

3 CURRENCY. 

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

5 (12 U.S.C. 1818(e)(4)) is amended by striking the 5th sen6 tence. 

7 SEC. 105. REPEAL OF INTRASTATE BRANCH CAPITAL RE8 QUIREMENTS. 

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

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

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

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

13 and 

14 (2) by striking the last sentence. 

15 SEC. 106. CLARIFICATION OF WAIVER OF PUBLICATION RE16 QUIREMENTS FOR BANK MERGER NOTICES. 

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

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

19 215(a) and 215a(a)(2), respectively) are each amended by 

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

21 where the Comptroller determines that an emergency exists 

22 justifying such waiver, by unanimous action of the share23 holders of the association or State bank’’ and inserting 

24 ‘‘Publication of notice may be waived if the Comptroller 

25 determines that an emergency exists justifying such waiver 

26 or if the shareholders of the association or State bank agree 
10 

•HR 3505 RH2 

1 by unanimous action to waive the publication requirement 

2 for their respective institutions’’. 

3 SEC. 107. EQUAL TREATMENT FOR FEDERAL AGENCIES OF 

4 FOREIGN BANKS. 

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

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

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

8 after ‘‘deposits’’. 

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

10 FEDERAL AGENCY IN THE SAME STATE. 

11 Section 4(e) of the International Banking Act of 1978 

12 (12 U.S.C. 3102(e)) is amended by inserting ‘‘if the mainte13 nance of both an agency and a branch in the State is pro14 hibited under the law of such State’’ before the period at 

15 the end. 

16 SEC. 109. BUSINESS ORGANIZATION FLEXIBILITY FOR NA17 TIONAL BANKS. 

18 (a) IN GENERAL.—Chapter one of title LXII of the Re19 vised Statutes of the United States (12 U.S.C. 21 et seq.) 

20 is amended by inserting after section 5136B the following 

21 new section: 

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

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

24 may prescribe regulations— 
11 

•HR 3505 RH2 

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

2 other than as a body corporate; and 

3 ‘‘(2) to provide requirements for the organiza4 tional characteristics of a national bank organized 

5 and operating other than as a body corporate, con6 sistent with the safety and soundness of the national 

7 bank. 

8 ‘‘(b) EQUAL TREATMENT.—Except as provided in reg9 ulations prescribed under subsection (a), a national bank 

10 that is operating other than as a body corporate shall have 

11 the same rights and privileges and shall be subject to the 

12 same duties, restrictions, penalties, liabilities, conditions, 

13 and limitations as a national bank that is organized as 

14 a body corporate.’’. 

15 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec16 tion 5136 of the Revised Statutes of the United States (12 

17 U.S.C. 24) is amended, in the matter preceding the para18 graph designated as the ‘‘First’’, by inserting ‘‘or other form 

19 of business organization provided under regulations pre20 scribed by the Comptroller of the Currency under section 

21 5136C’’ after ‘‘a body corporate’’. 

22 (c) CLERICAL AMENDMENT.—The table of sections for 

23 chapter one of title LXII of the Revised Statutes of the 

24 United States (12 U.S.C. 21 et seq.) is amended by insert-
12 

•HR 3505 RH2 

1 ing after the item relating to section 5136B the following 

2 new item: 

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

3 SEC. 110. CLARIFICATION OF THE MAIN PLACE OF BUSI4 NESS OF A NATIONAL BANK. 

5 Title LXII of the Revised Statutes of the United States 

6 is amended— 

7 (1) in the paragraph designated the ‘‘Second’’ of 

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

9 where its operations of discount and deposit are to be 

10 carried on’’ and inserting ‘‘The place where the main 

11 office of the national bank is, or is to be, located’’; 

12 and 

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

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

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

16 SEC. 111. CAPITAL EQUIVALENCY DEPOSITS FOR FEDERAL 

17 BRANCHES AND AGENCIES OF FOREIGN 

18 BANKS. 

19 Section 4(g) of the International Banking Act of 1978 

20 (12 U.S.C. 3102(g)) is amended to read as follows: 

21 ‘‘(g) CAPITAL EQUIVALENCY DEPOSIT.— 

22 ‘‘(1) IN GENERAL.—Upon the opening of a Fed23 eral branch or agency of a foreign bank in any State 

24 and thereafter, the foreign bank, in addition to any 

25 deposit requirements imposed under section 6, shall 
13 

•HR 3505 RH2 

1 keep on deposit, in accordance with such regulations 

2 as the Comptroller of the Currency may prescribe in 

3 accordance with paragraph (2), dollar deposits, in4 vestment securities, or other assets in such amounts as 

5 the Comptroller of the Currency determines to be nec6 essary for the protection of depositors and other inves7 tors and to be consistent with the principles of safety 

8 and soundness. 

9 ‘‘(2) LIMITATION.—Notwithstanding paragraph 

10 (1), regulations prescribed under such paragraph 

11 shall not permit a foreign bank to keep assets on de12 posit in an amount that is less than the amount re13 quired for a State licensed branch or agency of a for14 eign bank under the laws and regulations of the State 

15 in which the Federal agency or branch is located.’’. 

16 SEC. 112. ENHANCING THE AUTHORITY FOR NATIONAL 

17 BANKS TO MAKE COMMUNITY DEVELOPMENT 

18 INVESTMENTS. 

19 The last sentence in the paragraph designated as the 

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

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

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

23 percent’’. 
14 

•HR 3505 RH2 

1 TITLE II—SAVINGS ASSOCIATION 

2 PROVISIONS 

3 SEC. 201. PARITY FOR SAVINGS ASSOCIATIONS UNDER THE 

4 SECURITIES EXCHANGE ACT OF 1934 AND THE 

5 INVESTMENT ADVISERS ACT OF 1940. 

6 (a) SECURITIES EXCHANGE ACT OF 1934.— 

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

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

9 78c(a)(6)) is amended— 

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

11 a Federal savings association, as defined in sec12 tion 2(5) of the Home Owners’ Loan Act’’ after 

13 ‘‘a banking institution organized under the laws 

14 of the United States’’; and 

15 (B) in subparagraph (C)— 

16 (i) by inserting ‘‘or savings association 

17 as defined in section 2(4) of the Home Own18 ers’ Loan Act,’’ after ‘‘banking institution,’’; 

19 and 

20 (ii) by inserting ‘‘or savings associa21 tions’’ after ‘‘having supervision over 

22 banks’’. 

23 (2) INCLUDE OTS UNDER THE DEFINITION OF

24 APPROPRIATE REGULATORY AGENCY FOR CERTAIN
15 

•HR 3505 RH2 

1 PURPOSES.—Section 3(a)(34) of such Act (15 U.S.C. 

2 78c(a)(34)) is amended— 

3 (A) in subparagraph (A)— 

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

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

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

7 clause (iii); 

8 (iii) by redesignating clause (iv) as 

9 clause (v); and 

10 (iv) by inserting the following new 

11 clause after clause (iii): 

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

13 Thrift Supervision, in the case of a savings 

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

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

16 1813(b))) the deposits of which are insured 

17 by the Federal Deposit Insurance Corpora18 tion, a subsidiary or a department or divi19 sion of any such savings association, or a 

20 savings and loan holding company; and’’; 

21 (B) in subparagraph (B)— 

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

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

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

25 clause (iii); 
16 

•HR 3505 RH2 

1 (iii) by redesignating clause (iv) as 

2 clause (v); and 

3 (iv) by inserting the following new 

4 clause after clause (iii): 

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

6 Thrift Supervision, in the case of a savings 

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

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

9 1813(b))) the deposits of which are insured 

10 by the Federal Deposit Insurance Corpora11 tion, or a subsidiary of any such savings 

12 association, or a savings and loan holding 

13 company; and’’; 

14 (C) in subparagraph (C)— 

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

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

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

18 clause (iii); 

19 (iii) by redesignating clause (iv) as 

20 clause (v); and 

21 (iv) by inserting the following new 

22 clause after clause (iii): 

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

24 Thrift Supervision, in the case of a savings 

25 association (as defined in section 3(b) of the 
17 

•HR 3505 RH2 

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

2 1813(b))) the deposits of which are insured 

3 by the Federal Deposit Insurance Corpora4 tion, a savings and loan holding company, 

5 or a subsidiary of a savings and loan hold6 ing company when the appropriate regu7 latory agency for such clearing agency is 

8 not the Commission; and’’; 

9 (D) in subparagraph (D)— 

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

11 clause (ii); 

12 (ii) by redesignating clause (iii) as 

13 clause (iv); and 

14 (iii) by inserting the following new 

15 clause after clause (ii): 

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

17 Thrift Supervision, in the case of a savings 

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

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

20 1813(b))) the deposits of which are insured 

21 by the Federal Deposit Insurance Corpora22 tion; and’’; 

23 (E) in subparagraph (F)— 
18 

•HR 3505 RH2 

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

2 and (iv) as clauses (iii), (iv), and (v), re3 spectively; and 

4 (ii) by inserting the following new 

5 clause after clause (i): 

6 ‘‘(ii) the Director of the Office of Thrift 

7 Supervision, in the case of a savings asso8 ciation (as defined in section 3(b) of the 

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

10 1813(b))) the deposits of which are insured 

11 by the Federal Deposit Insurance Corpora12 tion; and’’; 

13 (F) by moving subparagraph (H) and in14 serting such subparagraph after subparagraph 

15 (G); and 

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

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

18 ‘savings and loan holding company’ has the 

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

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

21 (b) INVESTMENT ADVISERS ACT OF 1940.— 

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

23 the Investment Advisers Act of 1940 (15 U.S.C. 80b– 

24 2(a)(2)) is amended— 
19 

•HR 3505 RH2 

1 (A) in subparagraph (A) by inserting ‘‘or a 

2 Federal savings association, as defined in section 

3 2(5) of the Home Owners’ Loan Act’’ after ‘‘a 

4 banking institution organized under the laws of 

5 the United States’’; and 

6 (B) in subparagraph (C)— 

7 (i) by inserting ‘‘, savings association 

8 as defined in section 2(4) of the Home Own9 ers’ Loan Act,’’ after ‘‘banking institution’’; 

10 and 

11 (ii) by inserting ‘‘or savings associa12 tions’’ after ‘‘having supervision over 

13 banks’’. 

14 (2) CONFORMING AMENDMENTS.—Subsections 

15 (a)(1)(A)(i), (a)(1)(B), (a)(2), and (b) of section 210A 

16 of such Act (15 U.S.C. 80b–10a), as added by section 

17 220 of the Gramm-Leach-Bliley Act, are each amend18 ed by striking ‘‘bank holding company’’ each place it 

19 occurs and inserting ‘‘bank holding company or sav20 ings and loan holding company’’. 

21 (c) CONFORMING AMENDMENT TO THE INVESTMENT

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

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

24 by section 213(c) of the Gramm-Leach-Bliley Act, is amend25 ed by inserting after ‘‘1956)’’ the following: ‘‘or any one 
20 

•HR 3505 RH2 

1 savings and loan holding company (together with its affili2 ates and subsidiaries) (as such terms are defined in section 

3 10 of the Home Owners’ Loan Act)’’. 

4 SEC. 202. INVESTMENTS BY FEDERAL SAVINGS ASSOCIA5 TIONS AUTHORIZED TO PROMOTE THE PUB6 LIC WELFARE. 

7 (a) IN GENERAL.—Section 5(c)(3) of the Home Own8 ers’ Loan Act (12 U.S.C. 1464(c)) is amended by adding 

9 at the end the following new subparagraph: 

10 ‘‘(D) DIRECT INVESTMENTS TO PROMOTE

11 THE PUBLIC WELFARE.— 

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

13 association may make investments designed 

14 primarily to promote the public welfare, in15 cluding the welfare of low- and moderate-in16 come communities or families through the 

17 provision of housing, services, and jobs. 

18 ‘‘(ii) DIRECT INVESTMENTS OR ACQUI19 SITION OF INTEREST IN OTHER COMPA20 NIES.—Investments under clause (i) may be 

21 made directly or by purchasing interests in 

22 an entity primarily engaged in making 

23 such investments. 

24 ‘‘(iii) PROHIBITION ON UNLIMITED LI25 ABILITY.—No investment may be made 
21 

•HR 3505 RH2 

1 under this subparagraph which would sub2 ject a Federal savings association to unlim3 ited liability to any person. 

4 ‘‘(iv) SINGLE INVESTMENT LIMITATION

5 TO BE ESTABLISHED BY DIRECTOR.—Sub6 ject to clauses (v) and (vi), the Director 

7 shall establish, by order or regulation, lim8 its on— 

9 ‘‘(I) the amount any savings asso10 ciation may invest in any 1 project; 

11 and 

12 ‘‘(II) the aggregate amount of in13 vestment of any savings association 

14 under this subparagraph. 

15 ‘‘(v) FLEXIBLE AGGREGATE INVEST16 MENT LIMITATION.—The aggregate amount 

17 of investments of any savings association 

18 under this subparagraph may not exceed an 

19 amount equal to the sum of 5 percent of the 

20 savings association’s capital stock actually 

21 paid in and unimpaired and 5 percent of 

22 the savings association’s unimpaired sur23 plus, unless— 
22 

•HR 3505 RH2 

1 ‘‘(I) the Director determines that 

2 the savings association is adequately 

3 capitalized; and 

4 ‘‘(II) the Director determines, by 

5 order, that the aggregate amount of in6 vestments in a higher amount than the 

7 limit under this clause will pose no 

8 significant risk to the affected deposit 

9 insurance fund. 

10 ‘‘(vi) MAXIMUM AGGREGATE INVEST11 MENT LIMITATION.—Notwithstanding clause 

12 (v), the aggregate amount of investments of 

13 any savings association under this subpara14 graph may not exceed an amount equal to 

15 the sum of 15 percent of the savings associa16 tion’s capital stock actually paid in and 

17 unimpaired and 15 percent of the savings 

18 association’s unimpaired surplus. 

19 ‘‘(vii) INVESTMENTS NOT SUBJECT TO

20 OTHER LIMITATION ON QUALITY OF INVEST21 MENTS.—No obligation a Federal savings 

22 association acquires or retains under this 

23 subparagraph shall be taken into account 

24 for purposes of the limitation contained in 

25 section 28(d) of the Federal Deposit Insur-
23 

•HR 3505 RH2 

1 ance Act on the acquisition and retention of 

2 any corporate debt security not of invest3 ment grade.’’. 

4 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec5 tion 5(c)(3)(A) of the Home Owners’ Loan Act (12 U.S.C. 

6 1464(c)(3)(A)) is amended to read as follows: 

7 ‘‘(A) [Repealed].’’. 

8 SEC. 203. MERGERS AND CONSOLIDATIONS OF FEDERAL 

9 SAVINGS ASSOCIATIONS WITH NONDEPOSI10 TORY INSTITUTION AFFILIATES. 

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

12 U.S.C. 1464(d)(3)) is amended— 

13 (1) by redesignating subparagraph (B) as sub14 paragraph (C); and 

15 (2) by inserting after subparagraph (A) the fol16 lowing new subparagraph: 

17 ‘‘(B) MERGERS AND CONSOLIDATIONS WITH

18 NONDEPOSITORY INSTITUTION AFFILIATES.— 

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

20 of the Director, a Federal savings associa21 tion may merge with any nondepository in22 stitution affiliate of the savings association. 

23 ‘‘(ii) RULE OF CONSTRUCTION.—No 

24 provision of clause (i) shall be construed 

25 as— 
24 

•HR 3505 RH2 

1 ‘‘(I) affecting the applicability of 

2 section 18(c) of the Federal Deposit In3 surance Act; or 

4 ‘‘(II) granting a Federal savings 

5 association any power or any author6 ity to engage in any activity that is 

7 not authorized for a Federal savings 

8 association under any other provision 

9 of this Act or any other provision of 

10 law.’’. 

11 SEC. 204. REPEAL OF STATUTORY DIVIDEND NOTICE RE12 QUIREMENT FOR SAVINGS ASSOCIATION SUB13 SIDIARIES OF SAVINGS AND LOAN HOLDING 

14 COMPANIES. 

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

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

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

18 may— 

19 ‘‘(1) require a savings association that is a sub20 sidiary of a savings and loan holding company to 

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

22 savings association to pay a dividend on its guar23 anty, permanent, or other nonwithdrawable stock; 

24 and 
25 

•HR 3505 RH2 

1 ‘‘(2) establish conditions on the payment of divi2 dends by such a savings association.’’. 

3 SEC. 205. MODERNIZING STATUTORY AUTHORITY FOR 

4 TRUST OWNERSHIP OF SAVINGS ASSOCIA5 TIONS. 

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

7 Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(C)) is amend8 ed— 

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

10 trust,’’; and 

11 (2) by inserting ‘‘or any other trust unless by its 

12 terms it must terminate within 25 years or not later 

13 than 21 years and 10 months after the death of indi14 viduals living on the effective date of the trust,’’ after 

15 ‘‘or similar organization,’’. 

16 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec17 tion 10(a)(3) of the Home Owners’ Loan Act (12 U.S.C. 

18 1467a(a)(3)) is amended— 

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

20 follows through ‘‘any company by virtue’’ where such 

21 term appears in subparagraph (A) and inserting 

22 ‘‘does not include any company by virtue’’; 

23 (2) by striking ‘‘; and’’ at the end of subpara24 graph (A) and inserting a period; and 

25 (3) by striking subparagraph (B). 
26 

•HR 3505 RH2 

1 SEC. 206. REPEAL OF OVERLAPPING RULES GOVERNING 

2 PURCHASED MORTGAGE SERVICING RIGHTS. 

3 Section 5(t) of the Home Owners’ Loan Act (12 U.S.C. 

4 1464(t)) is amended— 

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

6 following new paragraph: 

7 ‘‘(4) [Repealed].’’; and 

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

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

10 at the end and inserting ‘‘intangible assets.’’. 

11 SEC. 207. RESTATEMENT OF AUTHORITY FOR FEDERAL SAV12 INGS ASSOCIATIONS TO INVEST IN SMALL 

13 BUSINESS INVESTMENT COMPANIES. 

14 Subparagraph (D) of section 5(c)(4) of the Home Own15 ers’ Loan Act (12 U.S.C. 1464(c)(4)) is amended to read 

16 as follows: 

17 ‘‘(D) SMALL BUSINESS INVESTMENT COMPA18 NIES.—Any Federal savings association may in19 vest in 1 or more small business investment com20 panies, or in any entity established to invest 

21 solely in small business investment companies 

22 formed under the Small Business Investment Act 

23 of 1958, except that the total amount of invest24 ments under this subparagraph may not at any 

25 time exceed the amount equal to 5 percent of 

26 capital and surplus of the savings association.’’. 
27 

•HR 3505 RH2 

1 SEC. 208. REMOVAL OF LIMITATION ON INVESTMENTS IN 

2 AUTO LOANS. 

3 (a) IN GENERAL.—Section 5(c)(1) of the Home Own4 ers’ Loan Act (12 U.S.C. 1464(c)(1)) is amended by adding 

5 at the end the following new subparagraph: 

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

7 motor vehicles acquired for personal, family, or 

8 household purposes.’’. 

9 (b) TECHNICAL AND CONFORMING AMENDMENT RE10 LATING TO QUALIFIED THRIFT INVESTMENTS.—Section 

11 10(m)(4)(C)(ii) of the Home Owners’ Loan Act (12 U.S.C. 

12 1467a(m)(4)(C)(ii)) is amended by adding at the end the 

13 following new subclause: 

14 ‘‘(VIII) Loans and leases for 

15 motor vehicles acquired for personal, 

16 family, or household purposes.’’. 

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

18 Section 15(h) of the Securities Exchange Act of 1934 

19 (15 U.S.C. 78o(h)) is amended by adding at the end the 

20 following new paragraph: 

21 ‘‘(4) SELLING AND OFFERING OF DEPOSIT PROD22 UCTS.—No law, rule, regulation, or order, or other 

23 administrative action of any State or political sub24 division thereof shall directly or indirectly require 

25 any individual who is an agent of 1 Federal savings 

26 association (as such term is defined in section 2(5) of 
28 

•HR 3505 RH2 

1 the Home Owners’ Loan Act (12 U.S.C. 1462(5)) in 

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

3 section 3 of the Federal Deposit Insurance Act (12 

4 U.S.C. 1813(l)) products issued by such association to 

5 qualify or register as a broker, dealer, associated per6 son of a broker, or associated person of a dealer, or 

7 to qualify or register in any other similar status or 

8 capacity, if the individual does not— 

9 ‘‘(A) accept deposits or make withdrawals 

10 on behalf of any customer of the association; 

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

12 agent for another entity that is not subject to su13 pervision and examination by a Federal banking 

14 agency (as defined in section 3(z) of the Federal 

15 Deposit Insurance Act (12 U.S.C. 1813(z)), the 

16 National Credit Union Administration, or any 

17 officer, agency, or other entity of any State 

18 which has primary regulatory authority over 

19 State banks, State savings associations, or State 

20 credit unions; 

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

22 not an insured deposit (as defined in section 

23 3(m) of the Federal Deposit Insurance Act (12 

24 U.S.C. 1813(m))); 
29 

•HR 3505 RH2 

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

2 contains a feature that makes it callable at the 

3 option of such Federal savings association; or 

4 ‘‘(E) create a secondary market with respect 

5 to a deposit product or otherwise add enhance6 ments or features to such product independent of 

7 those offered by the association.’’. 

8 SEC. 210. FUNERAL- AND CEMETERY-RELATED FIDUCIARY 

9 SERVICES. 

10 Section 5(n) of the Home Owners’ Loan Act (12 U.S.C. 

11 1464(n)) is amended by adding at the end the following 

12 new paragraph: 

13 ‘‘(11) FUNERAL- AND CEMETERY-RELATED FIDU14 CIARY SERVICES.— 

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

16 cemetery operator, when acting in such capacity, 

17 (or any other person in connection with a con18 tract or other agreement with a funeral director 

19 or cemetery operator) may engage any Federal 

20 savings association, regardless of where the asso21 ciation is located, to act in any fiduciary capac22 ity in which the savings association has the right 

23 to act in accordance with this section, including 

24 holding funds deposited in trust or escrow by the 

25 funeral director or cemetery operator (or by such 
30 

•HR 3505 RH2 

1 other party), and the savings association may 

2 act in such fiduciary capacity on behalf of the 

3 funeral director or cemetery operator (or such 

4 other person). 

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

6 paragraph, the following definitions shall apply: 

7 ‘‘(i) CEMETERY.—The term ‘cemetery’ 

8 means any land or structure used, or in9 tended to be used, for the interment of 

10 human remains in any form. 

11 ‘‘(ii) CEMETERY OPERATOR.—The term 

12 ‘cemetery operator’ means any person who 

13 contracts or accepts payment for merchan14 dise, endowment, or perpetual care services 

15 in connection with a cemetery. 

16 ‘‘(iii) FUNERAL DIRECTOR.—The term 

17 ‘funeral director’ means any person who 

18 contracts or accepts payment to provide or 

19 arrange— 

20 ‘‘(I) services for the final disposi21 tion of human remains; or 

22 ‘‘(II) funeral services, property, or 

23 merchandise (including cemetery serv24 ices, property, or merchandise).’’. 
31 

•HR 3505 RH2 

1 SEC. 211. REPEAL OF QUALIFIED THRIFT LENDER REQUIRE2 MENT WITH RESPECT TO OUT-OF-STATE 

3 BRANCHES. 

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

5 U.S.C. 1464(r)(1)) is amended by striking the last sentence. 

6 SEC. 212. SMALL BUSINESS AND OTHER COMMERCIAL 

7 LOANS. 

8 (a) ELIMINATION OF LENDING LIMIT ON SMALL BUSI9 NESS LOANS.—Section 5(c)(1) of the Home Owners’ Loan 

10 Act (12 U.S.C. 1464(c)(1)) is amended by inserting after 

11 subparagraph (V) (as added by section 208 of this title) 

12 the following new subparagraph: 

13 ‘‘(W) SMALL BUSINESS LOANS.—Small 

14 business loans, as defined in regulations which 

15 the Director shall prescribe.’’. 

16 (b) INCREASE IN LENDING LIMIT ON OTHER BUSINESS

17 LOANS.—Section 5(c)(2)(A) of the Home Owners’ Loan Act 

18 (12 U.S.C. 1464(c)(2)(A)) is amended by striking ‘‘, and 

19 amounts in excess of 10 percent’’ and all that follows 

20 through ‘‘by the Director’’. 

21 SEC. 213. CLARIFYING CITIZENSHIP OF FEDERAL SAVINGS 

22 ASSOCIATIONS FOR FEDERAL COURT JURIS23 DICTION. 

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

25 1464) is amended by adding at the end the following new 

26 subsection: 
32 

•HR 3505 RH2 

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

2 whether a Federal court has diversity jurisdiction over a 

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

4 Federal savings association shall be considered to be a cit5 izen only of the States in which such savings association 

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

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

8 the home office).’’. 

9 SEC. 214. INCREASE IN LIMITS ON COMMERCIAL REAL ES10 TATE LOANS. 

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

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

13 percent’’ and inserting ‘‘500 percent’’. 

14 SEC. 215. REPEAL OF ONE LIMIT ON LOANS TO ONE BOR15 ROWER. 

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

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

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

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

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

21 and (IV), respectively; 

22 (3) in clause (i)— 

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

24 ‘‘For any’’; and 
33 

•HR 3505 RH2 

1 (B) by striking ‘‘; or’’ and inserting a pe2 riod; and 

3 (4) in clause (ii), by striking ‘‘to develop domes4 tic’’ and inserting ‘‘To develop domestic’’. 

5 SEC. 216. SAVINGS ASSOCIATION CREDIT CARD BANKS. 

6 Section 10(a)(1)(A) of the Home Owners’ Loan Act (12 

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

8 term does not include an institution described in section 

9 2(c)(2)(F) of the Bank Holding Company Act of 1956 for 

10 purposes of subsections (a)(1)(E), (c)(3)(B)(i), (c)(9)(C)(i), 

11 and (e)(3)’’ before the period at the end. 

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

13 COMPANIES. 

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

15 U.S.C. 1467a(e)(3)) is amended— 

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

17 and (C) as subparagraphs (B), (C), and (D), respec18 tively; and 

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

20 redesignated) the following new subparagraph: 

21 ‘‘(A) such acquisition would be permissible 

22 under section 3(d) of the Bank Holding Com23 pany Act of 1956 if the savings and loan holding 

24 company were a bank holding company and any 

25 savings association to be acquired were a bank;’’. 
34 

•HR 3505 RH2 

1 SEC. 218. BUSINESS ORGANIZATION FLEXIBILITY FOR FED2 ERAL SAVINGS ASSOCIATIONS. 

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

4 Loan Act (12 U.S.C. 1464) is amended by inserting after 

5 subsection (x) (as added by section 213) following new sub6 section: 

7 ‘‘(y) ALTERNATIVE BUSINESS ORGANIZATION.— 

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

9 regulations that— 

10 ‘‘(A) permit a Federal savings association 

11 to be organized other than as a corporation; and 

12 ‘‘(B) provide requirements for the organiza13 tional characteristics of a Federal savings asso14 ciation organized and operating other than as a 

15 corporation, consistent with the safety and 

16 soundness of the Federal savings association. 

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

18 provided in regulations prescribed under subsection 

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

20 other than as a corporation shall have the same rights 

21 and privileges and shall be subject to the same duties, 

22 restrictions, penalties, liabilities, conditions, and lim23 itations as a Federal savings association that is orga24 nized as a corporation.’’. 

25 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 
35 

•HR 3505 RH2 

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

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

3 ‘‘organization, incorporation,’’ and inserting ‘‘organi4 zation (as a corporation or other form of business or5 ganization provided under regulations prescribed by 

6 the Director under subsection (x)),’’. 

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

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

9 amended by striking ‘‘incorporated’’ and inserting 

10 ‘‘organized’’. 

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

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

13 ‘‘organization, incorporation,’’ and inserting ‘‘organi14 zation (as a corporation or other form of business or15 ganization provided under regulations prescribed by 

16 the Director under subsection (x)),’’. 

17 TITLE III—CREDIT UNION 

18 PROVISIONS 

19 SEC. 301. PRIVATELY INSURED CREDIT UNIONS AUTHOR20 IZED TO BECOME MEMBERS OF A FEDERAL 

21 HOME LOAN BANK. 

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

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

24 at the end the following new paragraph: 
36 

•HR 3505 RH2 

1 ‘‘(5) CERTAIN PRIVATELY INSURED CREDIT

2 UNIONS.— 

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

4 has been determined, in accordance with section 

5 43(e)(1) of the Federal Deposit Insurance Act 

6 and subject to the requirements of subparagraph 

7 (B), to meet all eligibility requirements for Fed8 eral deposit insurance shall be treated as an in9 sured depository institution for purposes of de10 termining the eligibility of such credit union for 

11 membership in a Federal home loan bank under 

12 paragraphs (1), (2), and (3). 

13 ‘‘(B) CERTIFICATION BY APPROPRIATE SU14 PERVISOR.— 

15 ‘‘(i) IN GENERAL.—For purposes of 

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

17 credit union which lacks Federal deposit in18 surance and which has applied for member19 ship in a Federal home loan bank may be 

20 treated as meeting all the eligibility require21 ments for Federal deposit insurance only if 

22 the appropriate supervisor of the State in 

23 which the credit union is chartered has de24 termined that the credit union meets all the 

25 eligibility requirements for Federal deposit 
37 

•HR 3505 RH2 

1 insurance as of the date of the application 

2 for membership. 

3 ‘‘(ii) CERTIFICATION DEEMED

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

5 to which clause (i) applies, the appropriate 

6 supervisor of the State in which such credit 

7 union is chartered fails to make a deter8 mination pursuant to such clause by the 

9 end of the 6-month period beginning on the 

10 date of the application, the credit union 

11 shall be deemed to have met the require12 ments of clause (i). 

13 ‘‘(C) SECURITY INTERESTS OF FEDERAL

14 HOME LOAN BANK NOT AVOIDABLE.—Notwith15 standing any provision of State law authorizing 

16 a conservator or liquidating agent of a credit 

17 union to repudiate contracts, no such provision 

18 shall apply with respect to— 

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

20 Federal home loan bank to any credit union 

21 which is a member of any such bank pursu22 ant to this paragraph; or 

23 ‘‘(ii) any security interest in the assets 

24 of such credit union securing any such ex25 tension of credit.’’. 
38 

•HR 3505 RH2 

1 (b) COPIES OF AUDITS OF PRIVATE INSURERS OF

2 CERTAIN DEPOSITORY INSTITUTIONS REQUIRED TO BE

3 PROVIDED TO SUPERVISORY AGENCIES.—Section 43(a)(2) 

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

5 1831t(a)(2)) is amended— 

6 (1) by striking ‘‘and’’ at the end of subpara7 graph (A)(i); 

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

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

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

11 end of subparagraph (A): 

12 ‘‘(iii) in the case of depository institu13 tions described in subsection (f)(2)(A) the 

14 deposits of which are insured by the private 

15 insurer, the National Credit Union Admin16 istration, not later than 7 days after that 

17 audit is completed; and 

18 ‘‘(iv) in the case of depository institu19 tions described in subsection (f)(2)(A) the 

20 deposits of which are insured by the private 

21 insurer which are members of a Federal 

22 home loan bank, the Federal Housing Fi23 nance Board, not later than 7 days after 

24 that audit is completed.’’; and 
39 

•HR 3505 RH2 

1 (4) by adding at the end the following new sub2 paragraph: 

3 ‘‘(C) CONSULTATION.—The appropriate su4 pervisory agency of each State in which a pri5 vate deposit insurer insures deposits in an insti6 tution described in subsection (f)(2)(A) which— 

7 ‘‘(i) lacks Federal deposit insurance; 

8 and 

9 ‘‘(ii) has become a member of a Fed10 eral home loan bank, 

11 shall provide the National Credit Union Admin12 istration, upon request, with the results of any 

13 examination and reports related thereto con14 cerning the private deposit insurer to which such 

15 agency may have in its possession.’’. 

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

17 CREDIT UNIONS. 

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

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

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

21 union’’ and inserting ‘‘Notwithstanding any other 

22 provision of law, upon application by any credit 

23 union’’; 

24 (2) by inserting ‘‘on lands reserved for the use of, 

25 and under the exclusive or concurrent jurisdiction of, 
40 

•HR 3505 RH2 

1 the United States or’’ after ‘‘officer or agency of the 

2 United States charged with the allotment of space’’; 

3 (3) by inserting ‘‘lease land or’’ after ‘‘such offi4 cer or agency may in his or its discretion’’; and 

5 (4) by inserting ‘‘or the facility built on the lease 

6 land’’ after ‘‘credit union to be served by the allot7 ment of space’’. 

8 (b) CLERICAL AMENDMENT.—The heading for section 

9 124 is amended by inserting ‘‘OR FEDERAL LAND’’ after 

10 ‘‘BUILDINGS’’. 

11 SEC. 303. INVESTMENTS IN SECURITIES BY FEDERAL CRED12 IT UNIONS. 

13 Section 107 of the Federal Credit Union Act (12 

14 U.S.C. 1757) is amended— 

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

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

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

18 (2) by adding at the end the following new sub19 section: 

20 ‘‘(b) ADDITIONAL INVESTMENT AUTHORITY.— 

21 ‘‘(1) IN GENERAL.—In addition to any invest22 ments otherwise authorized, a Federal credit union 

23 may purchase and hold for its own account such in24 vestment securities of investment grade as the Board 

25 may authorize by regulation, subject to such limita-
41 

•HR 3505 RH2 

1 tions and restrictions as the Board may prescribe in 

2 the regulations. 

3 ‘‘(2) PERCENTAGE LIMITATIONS.— 

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

5 the total amount of investment securities of any 

6 single obligor or maker held by a Federal credit 

7 union for the credit union’s own account exceed 

8 at any time an amount equal to 10 percent of 

9 the net worth of the credit union. 

10 ‘‘(B) AGGREGATE INVESTMENTS.—In no 

11 event may the aggregate amount of investment 

12 securities held by a Federal credit union for the 

13 credit union’s own account exceed at any time 

14 an amount equal to 10 percent of the assets of 

15 the credit union. 

16 ‘‘(3) INVESTMENT SECURITY DEFINED.— 

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

18 subsection, the term ‘investment security’ means 

19 marketable obligations evidencing the indebted20 ness of any person in the form of bonds, notes, 

21 or debentures and other instruments commonly 

22 referred to as investment securities. 

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

24 The Board may further define the term ‘invest25 ment security’. 
42 

•HR 3505 RH2 

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

2 ‘investment grade’ means with respect to an invest3 ment security purchased by a credit union for its own 

4 account, an investment security that at the time of 

5 such purchase is rated in one of the 4 highest rating 

6 categories by at least 1 nationally recognized statis7 tical rating organization. 

8 ‘‘(5) CLARIFICATION OF PROHIBITION ON STOCK

9 OWNERSHIP.—No provision of this subsection shall be 

10 construed as authorizing a Federal credit union to 

11 purchase shares of stock of any corporation for the 

12 credit union’s own account, except as otherwise per13 mitted by law.’’. 

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

15 TERM OF FEDERAL CREDIT UNION LOANS TO 

16 15 YEARS. 

17 Section 107(a)(5) of the Federal Credit Union Act (12 

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

19 title) is amended— 

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

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

22 shall not exceed twelve years except as otherwise pro23 vided herein’’ and inserting ‘‘to make loans, the ma24 turities of which shall not exceed 15 years or any 
43 

•HR 3505 RH2 

1 longer maturity as the Board may allow, in regula2 tions, except as otherwise provided in this Act’’; 

3 (2) in subparagraph (A)— 

4 (A) by striking clause (ii); 

5 (B) by redesignating clauses (iii) through 

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

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

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

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

10 CREDIT UNION SERVICE ORGANIZATIONS. 

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

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

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

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

15 paid’’. 

16 SEC. 306. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS 

17 TO NONPROFIT RELIGIOUS ORGANIZATIONS. 

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

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

20 loans made to nonprofit religious organizations,’’ after 

21 ‘‘total amount of such loans’’. 
44 

•HR 3505 RH2 

1 SEC. 307. CHECK CASHING AND MONEY TRANSFER SERV2 ICES OFFERED WITHIN THE FIELD OF MEM3 BERSHIP. 

4 Paragraph (12) of section 107(a) of the Federal Credit 

5 Union Act (12 U.S.C. 1757(12)) (as so designated by sec6 tion 303 of this title) is amended to read as follows: 

7 ‘‘(12) in accordance with regulations prescribed 

8 by the Board— 

9 ‘‘(A) to sell, to persons in the field of mem10 bership, negotiable checks (including travelers 

11 checks), money orders, and other similar money 

12 transfer instruments (including international 

13 and domestic electronic fund transfers); and 

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

15 receive international and domestic electronic 

16 fund transfers for persons in the field of member17 ship for a fee;’’. 

18 SEC. 308. VOLUNTARY MERGERS INVOLVING MULTIPLE 

19 COMMON-BOND CREDIT UNIONS. 

20 Section 109(d)(2) of the Federal Credit Union Act (12 

21 U.S.C. 1759(d)(2)) is amended— 

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

23 subparagraph (B); 

24 (2) by striking the period at the end of subpara25 graph (C) and inserting ‘‘; or’’; and 
45 

•HR 3505 RH2 

1 (3) by adding at the end the following new sub2 paragraph: 

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

4 credit union approved by the Board on or after 

5 August 7, 1998.’’. 

6 SEC. 309. CONVERSIONS INVOLVING COMMON-BOND CRED7 IT UNIONS. 

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

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

10 (2) the following new paragraph: 

11 ‘‘(3) CRITERIA FOR CONTINUED MEMBERSHIP OF

12 CERTAIN MEMBER GROUPS IN COMMUNITY CHARTER

13 CONVERSIONS.—In the case of a voluntary conversion 

14 of a common-bond credit union described in para15 graph (1) or (2) of subsection (b) into a community 

16 credit union described in subsection (b)(3), the Board 

17 shall prescribe, by regulation, the criteria under 

18 which the Board may determine that a member group 

19 or other portion of a credit union’s existing member20 ship, that is located outside the well-defined local 

21 community, neighborhood, or rural district that shall 

22 constitute the community charter, can be satisfac23 torily served by the credit union and remain within 

24 the community credit union’s field of membership.’’. 
46 

•HR 3505 RH2 

1 SEC. 310. CREDIT UNION GOVERNANCE. 

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

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

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

5 ‘‘(b) POLICY AND ACTIONS OF BOARDS OF DIRECTORS

6 OF FEDERAL CREDIT UNIONS.— 

7 ‘‘(1) EXPULSION OF MEMBERS FOR NONPARTICI8 PATION OR FOR JUST CAUSE.—The board of directors 

9 of a Federal credit union may, by majority vote of a 

10 quorum of directors, adopt and enforce a policy with 

11 respect to expulsion from membership, by a majority 

12 vote of such board of directors, based on just cause, 

13 including disruption of credit union operations, or on 

14 nonparticipation by a member in the affairs of the 

15 credit union. 

16 ‘‘(2) WRITTEN NOTICE OF POLICY TO MEM17 BERS.—If a policy described in paragraph (1) is 

18 adopted, written notice of the policy as adopted and 

19 the effective date of such policy shall be provided to— 

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

21 union not less than 30 days prior to the effective 

22 date of such policy; and 

23 ‘‘(B) each new member prior to or upon ap24 plying for membership.’’. 

25 (b) TERM LIMITS AUTHORIZED FOR BOARD MEMBERS

26 OF FEDERAL CREDIT UNIONS.—Section 111(a) of the Fed-
47 

•HR 3505 RH2 

1 eral Credit Union Act (12 U.S.C. 1761(a)) is amended by 

2 adding at the end the following new sentence: ‘‘The bylaws 

3 of a Federal credit union may limit the number of consecu4 tive terms any person may serve on the board of directors 

5 of such credit union.’’. 

6 (c) REIMBURSEMENT FOR LOST WAGES DUE TO SERV7 ICE ON CREDIT UNION BOARD NOT TREATED AS COM8 PENSATION.—Section 111(c) of the Federal Credit Union 

9 Act (12 U.S.C. 1761(c)) is amended by inserting ‘‘, includ10 ing lost wages,’’ after ‘‘the reimbursement of reasonable ex11 penses’’. 

12 SEC. 311. PROVIDING THE NATIONAL CREDIT UNION AD13 MINISTRATION WITH GREATER FLEXIBILITY 

14 IN RESPONDING TO MARKET CONDITIONS. 

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

16 Act (12 U.S.C. 1757(5)(A)(vi)(I)) (as so designated by sec17 tion 303 and redesignated by section 304(2)(B) of this title) 

18 is amended by striking ‘‘six-month period and that pre19 vailing interest rate levels’’ and inserting ‘‘6-month period 

20 or that prevailing interest rate levels’’. 

21 SEC. 312. EXEMPTION FROM PRE-MERGER NOTIFICATION 

22 REQUIREMENT OF THE CLAYTON ACT. 

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

24 18a(c)(7)) is amended by inserting ‘‘section 205(b)(3) of the 
48 

•HR 3505 RH2 

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

2 ‘‘or section 3’’. 

3 SEC. 313. TREATMENT OF CREDIT UNIONS AS DEPOSITORY 

4 INSTITUTIONS UNDER SECURITIES LAWS. 

5 (a) DEFINITION OF BANK UNDER THE SECURITIES

6 EXCHANGE ACT OF 1934.—Section 3(a)(6) of the Securities 

7 Exchange Act of 1934 (15 U.S.C. 78c(a)(6)) (as amended 

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

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

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

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

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

13 and (5) of this subsection and only for activities oth14 erwise authorized by applicable laws to which such 

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

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

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

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

19 (b) DEFINITION OF BANK UNDER THE INVESTMENT

20 ADVISERS ACT OF 1940.—Section 202(a)(2) of the Invest21 ment Advisers Act of 1940 (15 U.S.C. 80b–2(a)(2)) (as 

22 amended by section 201(b)(1) of this Act) is amended— 

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

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

25 (as defined in section 101(7) of the Federal Credit 
49 

•HR 3505 RH2 

1 Union Act) but only for activities otherwise author2 ized by applicable laws to which such credit unions 

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

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

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

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

7 (c) DEFINITION OF APPROPRIATE FEDERAL BANKING

8 AGENCY.—Section 210A(c) of the Investment Advisers Act 

9 of 1940 (15 U.S.C. 80b–10a(c)) is amended by inserting 

10 ‘‘and includes the National Credit Union Administration 

11 Board, in the case of an insured credit union (as defined 

12 in section 101(7) of the Federal Credit Union Act)’’ before 

13 the period at the end. 

14 SEC. 314. CLARIFICATION OF DEFINITION OF NET WORTH 

15 UNDER CERTAIN CIRCUMSTANCES FOR PUR16 POSES OF PROMPT CORRECTIVE ACTION. 

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

18 Credit Union Act (12 U.S.C. 1790d(o)(2)(A)) is amended— 

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. 
50 

•HR 3505 RH2 

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 paragraph: 

6 ‘‘(3) ENFORCEMENT BY APPROPRIATE STATE SU7 PERVISOR.—Any appropriate State supervisor of a 

8 private deposit insurer, and any appropriate State 

9 supervisor of a depository institution which receives 

10 deposits that are insured by a private deposit insurer, 

11 may examine and enforce compliance with this sub12 section under the applicable regulatory authority of 

13 such supervisor.’’. 

14 (b) AMENDMENT RELATING TO DISCLOSURES RE15 QUIRED, PERIODIC STATEMENTS AND ACCOUNT

16 RECORDS.—Section 43(b)(1) of the Federal Deposit Insur17 ance Act (12 U.S.C. 1831t(b)(1)) is amended by striking 

18 ‘‘or similar instrument evidencing a deposit’’ and inserting 

19 ‘‘or share certificate’’. 

20 (c) AMENDMENTS RELATING TO DISCLOSURES RE21 QUIRED, ADVERTISING, PREMISES.— Section 43(b)(2) of 

22 the Federal Deposit Insurance Act (12 U.S.C. 1831t(b)(2)) 

23 is amended to read as follows: 

24 ‘‘(2) ADVERTISING; PREMISES.— 

25 ‘‘(A) IN GENERAL.—Include clearly and 

26 conspicuously in all advertising, except as pro-
51 

•HR 3505 RH2 

1 vided in subparagraph (B); and at each station 

2 or window where deposits are normally received, 

3 its principal place of business and all its 

4 branches where it accepts deposits or opens ac5 counts (excluding automated teller machines or 

6 point of sale terminals), and on its main Inter7 net page, a notice that the institution is not fed8 erally insured. 

9 ‘‘(B) EXCEPTIONS.—The following need not 

10 include a notice that the institution is not feder11 ally insured: 

12 ‘‘(i) Statements or reports of financial 

13 condition of the depository institution that 

14 are required to be published or posted by 

15 State or Federal law or regulation. 

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

17 item that contains the name of the deposi18 tory institution, its logo, or its contact in19 formation, but only if the sign, document, 

20 or item does not include any information 

21 about the institution’s products or services 

22 or information otherwise promoting the in23 stitution. 

24 ‘‘(iii) Small utilitarian items that do 

25 not mention deposit products or insurance 
52 

•HR 3505 RH2 

1 if inclusion of the notice would be imprac2 tical.’’. 

3 (d) AMENDMENTS RELATING TO ACKNOWLEDGMENT

4 OF DISCLOSURE.—Section 43(b)(3) of the Federal Deposit 

5 Insurance Act (12 U.S.C. 1831t(b)(3)) is amended to read 

6 as follows: 

7 ‘‘(3) ACKNOWLEDGMENT OF DISCLOSURE.— 

8 ‘‘(A) NEW DEPOSITORS OBTAINED OTHER

9 THAN THROUGH A CONVERSION OR MERGER.— 

10 With respect to any depositor who was not a de11 positor at the depository institution before the ef12 fective date of the Financial Services Relief Act 

13 of 2005, and who is not a depositor as described 

14 in subparagraph (B), receive any deposit for the 

15 account of such depositor only if the depositor 

16 has signed a written acknowledgement that— 

17 ‘‘(i) the institution is not federally in18 sured; and 

19 ‘‘(ii) if the institution fails, the Fed20 eral Government does not guarantee that the 

21 depositor will get back the depositor’s 

22 money. 

23 ‘‘(B) NEW DEPOSITORS OBTAINED

24 THROUGH A CONVERSION OR MERGER.—With re25 spect to a depositor at a federally insured deposi-
53 

•HR 3505 RH2 

1 tory institution that converts to, or merges into, 

2 a depository institution lacking federal insur3 ance after the effective date of the Financial 

4 Services Regulatory Relief Act of 2005, receive 

5 any deposit for the account of such depositor 

6 only if— 

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

8 acknowledgement described in subparagraph 

9 (A); or 

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

11 as described in subparagraph (D) and sent 

12 by mail no later than 45 days after the ef13 fective date of the conversion or merger, to 

14 obtain the acknowledgment. 

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

16 deposit after the effective date of the Financial 

17 Services Regulatory Relief Act of 2005 for the ac18 count of any depositor who was a depositor on 

19 that date only if— 

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

21 acknowledgement described in subparagraph 

22 (A); or 

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

24 as described in subparagraph (D) and sent 

25 by mail no later than 45 days after the ef-
54 

•HR 3505 RH2 

1 fective date of the Financial Services Regu2 latory Relief Act of 2005, to obtain the ac3 knowledgment. 

4 ‘‘(D) ALTERNATIVE PROVISION OF NOTICE

5 TO CURRENT DEPOSITORS AND NEW DEPOSITORS

6 OBTAINED THROUGH A CONVERSION OR MERG7 ER.— 

8 ‘‘(i) IN GENERAL.—Transmit to each 

9 depositor who has not signed a written ac10 knowledgement described in subparagraph 

11 (A)— 

12 ‘‘(I) a conspicuous card con13 taining the information described in 

14 clauses (i) and (ii) of subparagraph 

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

16 depositor; and 

17 ‘‘(II) accompanying materials re18 questing the depositor to sign the card, 

19 and return the signed card to the insti20 tution.’’. 

21 (e) REPEAL OF PROVISION PROHIBITING NONDEPOSI22 TORY INSTITUTIONS FROM ACCEPTING DEPOSITS.—Section 

23 43 of the Federal Deposit Insurance Act (12 U.S.C. 1831t) 

24 is amended— 

25 (1) by striking subsection (e); and 
55 

•HR 3505 RH2 

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

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

3 (f) REPEAL OF PROVISION CONCERNING NONDEPOSI4 TORY INSTITUTIONS MASQUERADING AS DEPOSITORY IN5 STITUTIONS AND CLARIFICATION OF DEPOSITORY INSTITU6 TIONS COVERED BY THE STATUTE.—Subsection (e)(2) (as 

7 so redesignated by subsection (e) of this section) of section 

8 43 of the Federal Deposit Insurance Act (12 U.S.C. 1831t) 

9 is amended to read as follows: 

10 ‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de11 pository institution’— 

12 ‘‘(A) includes any entity described in sec13 tion 19(b)(1)(A)(iv) of the Federal Reserve Act; 

14 and 

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

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

17 (g) REPEAL OF FTC AUTHORITY TO ENFORCE INDE18 PENDENT AUDIT REQUIREMENT; CONCURRENT STATE EN19 FORCEMENT.—Subsection (f) (as so redesignated by sub20 section (e) of this section) of section 43 of the Federal De21 posit Insurance Act (12 U.S.C. 1831t) is amended to read 

22 as follows: 

23 ‘‘(f) ENFORCEMENT.— 

24 ‘‘(1) LIMITED FTC ENFORCEMENT AUTHORITY.— 

25 Compliance with the requirements of subsections (b) 
56 

•HR 3505 RH2 

1 and (c), and any regulation prescribed or order issued 

2 under any such subsection, shall be enforced under the 

3 Federal Trade Commission Act by the Federal Trade 

4 Commission. 

5 ‘‘(2) BROAD STATE ENFORCEMENT AUTHOR6 ITY.— 

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (C), an appropriate State supervisor of a 

9 depository institution lacking Federal deposit in10 surance may examine and enforce compliance 

11 with the requirements of this section, and any 

12 regulation prescribed under this section. 

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

14 bringing any action to enforce compliance with 

15 this section, no provision of this section shall be 

16 construed as preventing an appropriate State su17 pervisor of a depository institution lacking Fed18 eral deposit insurance from exercising any pow19 ers conferred on such official by the laws of such 

20 State. 

21 ‘‘(C) LIMITATION ON STATE ACTION WHILE

22 FEDERAL ACTION PENDING.—If the Federal 

23 Trade Commission has instituted an enforcement 

24 action for a violation of this section, no appro25 priate State supervisor may, during the pend-
57 

•HR 3505 RH2 

1 ency of such action, bring an action under this 

2 section against any defendant named in the com3 plaint of the Commission for any violation of 

4 this section that is alleged in that complaint.’’. 

5 TITLE IV—DEPOSITORY 

6 INSTITUTION PROVISIONS 

7 SEC. 401. EASING RESTRICTIONS ON INTERSTATE BRANCH8 ING AND MERGERS. 

9 (a) DE NOVO INTERSTATE BRANCHES OF NATIONAL

10 BANKS.— 

11 (1) IN GENERAL.—Section 5155(g)(1) of the Re12 vised Statutes of the United States (12 U.S.C. 

13 36(g)(1)) is amended by striking ‘‘maintain a branch 

14 if—’’ and all that follows through the end of subpara15 graph (B) and inserting ‘‘maintain a branch.’’. 

16 (2) CLERICAL AMENDMENT.—The heading for 

17 subsection (g) of section 5155 of the Revised Statutes 

18 of the United States is amended by striking ‘‘STATE

19 ‘OPT-IN’ ELECTION TO PERMIT’’. 

20 (b) DE NOVO INTERSTATE BRANCHES OF STATE NON21 MEMBER BANKS.— 

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

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

24 1828(d)(4)(A)) is amended by striking ‘‘maintain a 
58 

•HR 3505 RH2 

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

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

3 (2) INTERSTATE BRANCHING BY SUBSIDIARIES

4 OF COMMERCIAL FIRMS PROHIBITED.—Section 

5 18(d)(3)) of the Federal Deposit Insurance Act (12 

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

7 the following new subparagraph: 

8 ‘‘(C) INTERSTATE BRANCHING BY SUBSIDI9 ARIES OF COMMERCIAL FIRMS PROHIBITED.— 

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

11 State bank supervisor of the home State of 

12 any industrial loan company, industrial 

13 bank, or other institution described in sec14 tion 2(c)(2)(H) of the Bank Holding Com15 pany Act of 1956, or the appropriate State 

16 bank supervisor of any host State with re17 spect to such company, bank, or institution, 

18 determines that such company, bank, or in19 stitution is controlled, directly or indirectly, 

20 by a commercial firm, such company, bank, 

21 or institution may not acquire, establish, or 

22 operate a branch in such host State. 

23 ‘‘(ii) COMMERCIAL FIRM DEFINED.— 

24 For purposes of this subsection, the term 

25 ‘commercial firm’ means any entity at least 
59 

•HR 3505 RH2 

1 15 percent of the annual gross revenues of 

2 which on a consolidated basis, including all 

3 affiliates of the entity, were derived from 

4 engaging, on an on-going basis, in activities 

5 that are not financial in nature or inci6 dental to a financial activity during at 

7 least 3 of the prior 4 calendar quarters. 

8 ‘‘(iii) GRANDFATHERED INSTITU9 TIONS.—Clause (i) shall not apply with re10 spect to any industrial loan company, in11 dustrial bank, or other institution described 

12 in section 2(c)(2)(H) of the Bank Holding 

13 Company Act of 1956— 

14 ‘‘(I) which became an insured de15 pository institution before October 1, 

16 2003 or pursuant to an application for 

17 deposit insurance which was approved 

18 by the Corporation before such date; 

19 and 

20 ‘‘(II) with respect to which there 

21 is no change in control, directly or in22 directly, of the company, bank, or in23 stitution after September 30, 2003, 

24 that requires an application under 

25 subsection (c), section 7(j), section 3 of 
60 

•HR 3505 RH2 

1 the Bank Holding Company Act of 

2 1956, or section 10 of the Home Own3 ers’ Loan Act. 

4 ‘‘(iv) TRANSITION PROVISION.—Any 

5 divestiture required under this subpara6 graph of a branch in a host State shall be 

7 completed as quickly as is reasonably pos8 sible. 

9 ‘‘(v) CORPORATE REORGANIZATIONS

10 PERMITTED.—The acquisition of direct or 

11 indirect control of the company, bank, or 

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

13 shall not be treated as a ‘change in control’ 

14 for purposes of such clause if the company 

15 acquiring control is itself directly or indi16 rectly controlled by a company that was an 

17 affiliate of such company, bank, or institu18 tion on the date referred to in clause 

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

20 times after such date.’’. 

21 (3) TECHNICAL AND CONFORMING AMEND22 MENTS.—Section 18(d)(4) of the Federal Deposit In23 surance Act (12 U.S.C. 1828(d)(4)) is amended— 

24 (A) in subparagraph (A) by striking ‘‘Sub25 ject to subparagraph (B)’’ and inserting ‘‘Subject 
61 

•HR 3505 RH2 

1 to subparagraph (B) and paragraph (3)(C)’’; 

2 and 

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

4 striking ‘‘The term’’ and inserting ‘‘For purposes 

5 of this subsection, the term’’. 

6 (4) CLERICAL AMENDMENT.—The heading for 

7 paragraph (4) of section 18(d) of the Federal Deposit 

8 Insurance Act is amended by striking ‘‘STATE ‘OPT9 IN’ ELECTION TO PERMIT INTERSTATE’’ and inserting 

10 ‘‘INTERSTATE’’. 

11 (c) DE NOVO INTERSTATE BRANCHES OF STATE MEM12 BER BANKS.—The 3rd undesignated paragraph of section 

13 9 of the Federal Reserve Act (12 U.S.C. 321) is amended 

14 by adding at the end the following new sentences: ‘‘A State 

15 member bank may establish and operate a de novo branch 

16 in a host State (as such terms are defined in section 18(d) 

17 of the Federal Deposit Insurance Act) on the same terms 

18 and conditions and subject to the same limitations and re19 strictions as are applicable to the establishment of a de novo 

20 branch of a national bank in a host State under section 

21 5155(g) of the Revised Statutes of the United States or are 

22 applicable to an insured State nonmember bank under sec23 tion 18(d)(3) of the Federal Deposit Insurance Act’’. Such 

24 section 5155(g) shall be applied for purposes of the pre25 ceding sentence by substituting ‘Board of Governors of the 
62 

•HR 3505 RH2 

1 Federal Reserve System’ for ‘Comptroller of the Currency’ 

2 and ‘State member bank’ for ‘national bank’.’’. 

3 (d) INTERSTATE MERGER OF BANKS.— 

4 (1) MERGER OF INSURED BANK WITH ANOTHER

5 DEPOSITORY INSTITUTION OR TRUST COMPANY.—Sec6 tion 44(a)(1) of the Federal Deposit Insurance Act 

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

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

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

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

12 bank and another insured depository institution 

13 or trust company with a different home State 

14 than the resulting insured bank’’. 

15 (2) NATIONAL BANK TRUST COMPANY MERGER

16 WITH OTHER TRUST COMPANY.—Subsection (b) of sec17 tion 4 of the National Bank Consolidation and Merg18 er Act (12 U.S.C. 215a–1(b)) is amended to read as 

19 follows: 

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

21 WITH ANOTHER TRUST COMPANY.—A national bank that 

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

24 home State, under the same terms and conditions that 
63 

•HR 3505 RH2 

1 would apply if the trust companies were located within the 

2 same State.’’. 

3 (e) INTERSTATE FIDUCIARY ACTIVITY.—Section 18(d) 

4 of the Federal Deposit Insurance Act (12 U.S.C. 1828(d)) 

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

7 ‘‘(5) INTERSTATE FIDUCIARY ACTIVITY.— 

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

10 bank may approve an application by the State 

11 bank, when not in contravention of home State 

12 or host State law, to act as trustee, executor, ad13 ministrator, registrar of stocks and bonds, 

14 guardian of estates, assignee, receiver, committee 

15 of estates of lunatics, or in any other fiduciary 

16 capacity in a host State in which State banks or 

17 other corporations which come into competition 

18 with national banks are permitted to act under 

19 the laws of such host State. 

20 ‘‘(B) NONCONTRAVENTION OF HOST STATE

21 LAW.—Whenever the laws of a host State author22 ize or permit the exercise of any or all of the 

23 foregoing powers by State banks or other cor24 porations which compete with national banks, 

25 the granting to and the exercise of such powers 
64 

•HR 3505 RH2 

1 by a State bank as provided in this paragraph 

2 shall not be deemed to be in contravention of host 

3 State law within the meaning of this paragraph. 

4 ‘‘(C) STATE BANK INCLUDES TRUST COMPA5 NIES.—For purposes of this paragraph, the term 

6 ‘State bank’ includes any State-chartered trust 

7 company (as defined in section 44(g)). 

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

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

10 ‘host State’ have the meanings given such terms 

11 in section 44.’’. 

12 (f) TECHNICAL AND CONFORMING AMENDMENTS.— 

13 (1) Section 44 of the Federal Deposit Insurance 

14 Act (12 U.S.C. 1831u) is amended— 

15 (A) in subsection (a)— 

16 (i) by striking paragraph (4) and in17 serting the following new paragraph: 

18 ‘‘(4) TREATMENT OF BRANCHES IN CONNECTION

19 WITH CERTAIN INTERSTATE MERGER TRANS20 ACTIONS.—In the case of an interstate merger trans21 action which involves the acquisition of a branch of 

22 an insured depository institution or trust company 

23 without the acquisition of the insured depository in24 stitution or trust company, the branch shall be treat25 ed, for purposes of this section, as an insured deposi-
65 

•HR 3505 RH2 

1 tory institution or trust company the home State of 

2 which is the State in which the branch is located.’’; 

3 and 

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

5 and inserting the following new paragraph: 

6 ‘‘(5) APPLICABILITY TO INDUSTRIAL LOAN COM7 PANIES.—No provision of this section shall be con8 strued as authorizing the approval of any transaction 

9 involving a industrial loan company, industrial 

10 bank, or other institution described in section 

11 2(c)(2)(H) of the Bank Holding Company Act of 

12 1956, or the acquisition, establishment, or operation 

13 of a branch by any such company, bank, or institu14 tion, that is not allowed under section 18(d)(3).’’. 

15 (B) in subsection (b)— 

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

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

18 inserting ‘‘insured depository institution’’; 

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

20 term appears in paragraph (2)(E) and in21 serting ‘‘insured depository institutions or 

22 trust companies’’; 

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

24 place such term appears in that portion of 

25 paragraph (3) that precedes subparagraph 
66 

•HR 3505 RH2 

1 (A) and inserting ‘‘insured depository insti2 tution affiliate’’; 

3 (iv) by striking ‘‘any bank’’ where such 

4 term appears in paragraph (3)(B) and in5 serting ‘‘any insured depository institu6 tion’’; 

7 (v) by striking ‘‘bank’’ where such term 

8 appears in paragraph (4)(A) and inserting 

9 ‘‘insured depository institution and trust 

10 company’’; and 

11 (vi) by striking ‘‘all banks’’ where such 

12 term appears in paragraph (5) and insert13 ing ‘‘all insured depository institutions and 

14 trust companies’’; 

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

16 bank’’ and inserting ‘‘any insured depository in17 stitution or trust company’’; 

18 (D) in subsection (e)— 

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

20 inserting ‘‘1 or more insured depository in21 stitutions’’; and 

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

23 (5)’’ and inserting ‘‘paragraph (2)’’; 
67 

•HR 3505 RH2 

1 (E) by striking clauses (i) and (ii) of sub2 section (g)(4)(A) and inserting the following new 

3 clauses: 

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

5 Federal savings association, the State in 

6 which the main office of the bank or savings 

7 association is located; and 

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

9 State savings association, or State-chartered 

10 trust company, the State by which the bank, 

11 savings association, or trust company is 

12 chartered; and’’; 

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

14 (g) and inserting the following new paragraph: 

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

16 means— 

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

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

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

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

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

23 other than the home State of the trust company, 

24 in which the trust company acts, or seeks to act, 

25 in 1 or more fiduciary capacities.’’; 
68 

•HR 3505 RH2 

1 (G) in subsection (g)(10), by striking ‘‘sec2 tion 18(c)(2)’’ and inserting ‘‘paragraph (1) or 

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

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

5 the following new paragraph: 

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

8 ‘‘(A) any national bank; 

9 ‘‘(B) any savings association; and 

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

11 company, savings bank, or other banking institu12 tion which is incorporated under the laws of any 

13 State, 

14 that is authorized to act in 1 or more fiduciary ca15 pacities but is not engaged in the business of receiving 

16 deposits other than trust funds (as defined in section 

17 3(p)).’’. 

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

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

20 (A) in paragraph (1)— 

21 (i) by striking subparagraphs (B) and 

22 (C); and 

23 (ii) by redesignating subparagraph (D) 

24 as subparagraph (B); and 
69 

•HR 3505 RH2 

1 (B) in paragraph (5), by striking ‘‘subpara2 graph (B) or (D)’’ and inserting ‘‘subparagraph 

3 (B)’’. 

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

5 Bank Consolidation and Merger Act (12 U.S.C. 215a– 

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

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

8 terms ‘home State’, ‘out-of-State bank’, and ‘trust company’ 

9 each have the same meaning as in section 44(g) of the Fed10 eral Deposit Insurance Act.’’. 

11 (g) CLERICAL AMENDMENTS.— 

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

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

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

15 inserting ‘‘INSURED DEPOSITORY INSTITUTIONS AND

16 TRUST COMPANIES’’. 

17 (2) The heading for section 44(e) of the Federal 

18 Deposit Insurance Act (12 U.S.C. 1831u(e)) is 

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

21 SEC. 402. STATUTE OF LIMITATIONS FOR JUDICIAL REVIEW 

22 OF APPOINTMENT OF A RECEIVER FOR DE23 POSITORY INSTITUTIONS. 

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

25 Bank Receivership Act (12 U.S.C. 191) is amended— 
70 

•HR 3505 RH2 

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

2 the Currency’’ and inserting the following: 

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

4 BANK. 

5 ‘‘(a) IN GENERAL.—The Comptroller of the Currency’’; 

6 and 

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

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

10 Currency appoints a receiver under subsection (a), the na11 tional bank may, within 30 days thereafter, bring an action 

12 in the United States district court for the judicial district 

13 in which the home office of such bank is located, or in the 

14 United States District Court for the District of Columbia, 

15 for an order requiring the Comptroller of the Currency to 

16 remove the receiver, and the court shall, upon the merits, 

17 dismiss such action or direct the Comptroller of the Cur18 rency to remove the receiver.’’. 

19 (b) INSURED DEPOSITORY INSTITUTIONS.—Section 

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

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

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

23 appointed (including the appointment of the Corpora24 tion as receiver by the Board of Directors) as conser25 vator or receiver of a depository institution under 
71 

•HR 3505 RH2 

1 paragraph (4), (9), or (10), the depository institution 

2 may, within 30 days thereafter, bring an action in 

3 the United States district court for the judicial dis4 trict in which the home office of such depository insti5 tution is located, or in the United States District 

6 Court for the District of Columbia, for an order re7 quiring the Corporation to be removed as the conser8 vator or receiver (regardless of how such appointment 

9 was made), and the court shall, upon the merits, dis10 miss such action or direct the Corporation to be re11 moved as the conservator or receiver.’’. 

12 (c) EXPANSION OF PERIOD FOR CHALLENGING THE

13 APPOINTMENT OF A LIQUIDATING AGENT.—Subparagraph 

14 (B) of section 207(a)(1) of the Federal Credit Union Act 

15 (12 U.S.C. 1787(a)(1)) is amended by striking ‘‘10 days’’ 

16 and inserting ‘‘30 days’’. 

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

18 subsections (a), (b), and (c) shall apply with respect to con19 servators, receivers, or liquidating agents appointed on or 

20 after the date of the enactment of this Act. 

21 SEC. 403. REPORTING REQUIREMENTS RELATING TO IN22 SIDER LENDING. 

23 (a) REPORTING REQUIREMENTS REGARDING LOANS

24 TO EXECUTIVE OFFICERS OF MEMBER BANKS.—Section 
72 

•HR 3505 RH2 

1 22(g) of the Federal Reserve Act (12 U.S.C. 375a) is amend2 ed— 

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

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

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

6 (b) REPORTING REQUIREMENTS REGARDING LOANS

7 FROM CORRESPONDENT BANKS TO EXECUTIVE OFFICERS

8 AND SHAREHOLDERS OF INSURED BANKS.—Section 

9 106(b)(2) of the Bank Holding Company Act Amendments 

10 of 1970 (12 U.S.C. 1972(2)) is amended— 

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

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

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

14 SEC. 404. AMENDMENT TO PROVIDE AN INFLATION ADJUST15 MENT FOR THE SMALL DEPOSITORY INSTITU16 TION EXCEPTION UNDER THE DEPOSITORY 

17 INSTITUTION MANAGEMENT INTERLOCKS 

18 ACT. 

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

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

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

24 (a) CLARIFICATION RELATING TO THE ENFORCE25 ABILITY OF AGREEMENTS AND CONDITIONS.—The Federal 
73 

•HR 3505 RH2 

1 Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended 

2 by adding at the end the following new section: 

3 ‘‘SEC. 49. ENFORCEMENT OF AGREEMENTS. 

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

5 of section 8(b)(6)(A) or section 38(e)(2)(E)(i), an appro6 priate Federal banking agency may enforce, under section 

7 8, the terms of— 

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

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

11 in connection with any action on any application, 

12 notice, or other request concerning a depository insti13 tution; or 

14 ‘‘(2) any written agreement entered into between 

15 the agency and an institution-affiliated party (in16 cluding a bank holding company). 

17 ‘‘(b) RECEIVERSHIPS AND CONSERVATORSHIPS.—After 

18 the appointment of the Corporation as the receiver or con19 servator for any insured depository institution, the Cor20 poration may enforce any condition or agreement described 

21 in paragraph (1) or (2) of subsection (a) involving such 

22 institution or any institution-affiliated party (including a 

23 bank holding company), through an action brought in an 

24 appropriate United States district court.’’. 
74 

•HR 3505 RH2 

1 (b) PROTECTION OF CAPITAL OF INSURED DEPOSI2 TORY INSTITUTIONS.—Paragraph (1) of section 18(u) of the 

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

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

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

9 (a) IN GENERAL.—Sections 2 and 3 of the Bank Serv10 ice Company Act (12 U.S.C. 1862, 1863) are each amended 

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

12 and inserting ‘‘insured depository institution’’. 

13 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

14 (1) Section 1(b)(4) of the Bank Service Company 

15 Act (12 U.S.C. 1861(b)(4)) is amended— 

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

17 appears in connection with the term ‘insured de18 pository institution’,’’ after ‘‘means’’; and 

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

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

21 Thrift Supervision’’. 

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

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

24 (A) by striking paragraph (5) and inserting 

25 the following new paragraph: 
75 

•HR 3505 RH2 

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

2 term ‘insured depository institution’ has the meaning 

3 given the term in section 3(c) of the Federal Deposit 

4 Insurance Act;’’; 

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

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

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

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

10 paragraph: 

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

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

14 meanings given the terms in section 3 of the Federal 

15 Deposit Insurance Act.’’. 

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

17 Home Owners’ Loan Act (12 U.S.C. 1464(c)(4)(B)) is 

18 amended by striking ‘‘by savings associations of such 

19 State and by Federal associations’’ and inserting ‘‘by 

20 State and Federal depository institutions’’. 

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

22 (B)(ii) of section 1(b)(2) of the Bank Service Com23 pany Act (12 U.S.C. 1861(b)(2)) are each amended 

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

25 depository institutions’’. 
76 

•HR 3505 RH2 

1 (5) Section 1(b)(8) of the Bank Service Company 

2 Act (12 U.S.C. 1861(b)(8)) is further amended— 

3 (A) by striking ‘‘insured bank’’ and insert4 ing ‘‘insured depository institution’’; 

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

6 such term appears and inserting ‘‘insured depos7 itory institutions’’; and 

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

9 ‘‘the depository institution’s’’. 

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

11 (12 U.S.C. 1862) is amended by inserting ‘‘or savings 

12 associations, other than the limitation on the amount 

13 of investment by a Federal savings association con14 tained in section 5(c)(4)(B) of the Home Owners’ 

15 Loan Act’’ after ‘‘relating to banks’’. 

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

17 Act (12 U.S.C. 1864(b)) is amended by inserting ‘‘as 

18 permissible under subsection (c), (d), or (e) or’’ after 

19 ‘‘Except’’. 

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

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

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

23 place such term appears. 

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

25 Act (12 U.S.C. 1864(d)) is amended by inserting ‘‘or 
77 

•HR 3505 RH2 

1 Federal savings association’’ after ‘‘national bank’’ 

2 each place such term appears. 

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

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

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

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

10 law; and 

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

12 which each such shareholder or member is authorized 

13 to perform such services.’’. 

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

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

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

17 (12) Section 5 of the Bank Service Company Act 

18 (12 U.S.C. 1865) is amended— 

19 (A) in subsection (a)— 

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

22 and 

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

24 ‘‘institution’s’’; 

25 (B) in subsection (b)— 
78 

•HR 3505 RH2 

1 (i) by striking ‘‘insured bank’’ and in2 serting ‘‘insured depository institution’’; 

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

4 after ‘‘performs any service’’; and 

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

6 after ‘‘perform any activity’’; and 

7 (C) in subsection (c)— 

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

9 and inserting ‘‘any depository institution’’; 

10 and 

11 (ii) by striking ‘‘capability of the 

12 bank’’ and inserting ‘‘capability of the de13 pository institution’’. 

14 (13) Section 7 of the Bank Service Company Act 

15 (12 U.S.C. 1867) is amended— 

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

17 bank’’ and inserting ‘‘insured depository institu18 tion’’; and 

19 (B) in subsection (c)— 

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

21 such term appears and inserting ‘‘a deposi22 tory institution’’; and 

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

24 such term appears and inserting ‘‘the depos25 itory institution’’. 
79 

•HR 3505 RH2 

1 SEC. 407. CROSS GUARANTEE AUTHORITY. 

2 Subparagraph (A) of section 5(e)(9) of the Federal De3 posit Insurance Act (12 U.S.C. 1815(e)(9)(A)) is amended 

4 to read as follows: 

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

6 same company; or’’. 

7 SEC. 408. GOLDEN PARACHUTE AUTHORITY AND NONBANK 

8 HOLDING COMPANIES. 

9 Subsection (k) of section 18 of the Federal Deposit In10 surance Act (12 U.S.C. 1828(k)) is amended— 

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

13 covered company’’; 

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

15 (2) and inserting the following new subparagraph: 

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

17 believe that the institution-affiliated party is 

18 substantially responsible for— 

19 ‘‘(i) the insolvency of the depository in20 stitution or covered company; 

21 ‘‘(ii) the appointment of a conservator 

22 or receiver for the depository institution; or 

23 ‘‘(iii) the depository institution’s trou24 bled condition (as defined in the regulations 

25 prescribed pursuant to section 32(f)).’’; 
80 

•HR 3505 RH2 

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

2 institution holding company’’ and inserting ‘‘covered 

3 company,’’; 

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

5 subparagraph (A), by striking ‘‘depository institution 

6 holding company’’ and inserting ‘‘covered company’’; 

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

8 company’’ and inserting ‘‘covered company’’; 

9 (6) in paragraph (4)(A)— 

10 (A) by striking ‘‘depository institution hold11 ing company’’ each place such term appears and 

12 inserting ‘‘covered company’’; and 

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

14 place such term appears (other than in connec15 tion with the term referred to in subparagraph 

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

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

18 institution holding company’’ and inserting ‘‘covered 

19 company’’; 

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

21 following new subparagraph: 

22 ‘‘(D) COVERED COMPANY.—The term ‘cov23 ered company’ means any depository institution 

24 holding company (including any company re25 quired to file a report under section 4(f)(6) of the 
81 

•HR 3505 RH2 

1 Bank Holding Company Act of 1956), or any 

2 other company that controls an insured deposi3 tory institution.’’; and 

4 (9) in paragraph (6)— 

5 (A) by striking ‘‘depository institution hold6 ing company’’ and inserting ‘‘covered com7 pany,’’; and 

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

9 inserting ‘‘or covered company’’. 

10 SEC. 409. AMENDMENTS RELATING TO CHANGE IN BANK 

11 CONTROL. 

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

13 U.S.C. 1817(j)) is amended— 

14 (1) in paragraph (1)(D)— 

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

16 and inserting ‘‘is needed— 

17 ‘‘(i) to investigate’’; 

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

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

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

21 clause: 

22 ‘‘(ii) to analyze the safety and sound23 ness of any plans or proposals described in 

24 paragraph (6)(E) or the future prospects of 

25 the institution.’’; and 
82 

•HR 3505 RH2 

1 (2) in paragraph (7)(C), by striking ‘‘the finan2 cial condition of any acquiring person’’ and inserting 

3 ‘‘either the financial condition of any acquiring per4 son or the future prospects of the institution’’. 

5 SEC. 410. COMMUNITY REINVESTMENT CREDIT FOR ESOPS 

6 AND EWOCS. 

7 Section 804 of the Community Reinvestment Act of 

8 1977 (12 U.S.C. 2903) is amended by adding at the end 

9 the following new subsection— 

10 ‘‘(d) ESTABLISHMENT OF ESOPS AND EWOCS.— 

11 ‘‘(1) IN GENERAL.—In assessing and taking into 

12 account, under subsection (a), the record of a finan13 cial institution, the appropriate Federal financial su14 pervisory agency shall consider as a factor activities 

15 that support or enable the establishment of employee 

16 stock ownership plans or eligible worker-owned co17 operatives, so long as the employer sponsoring the 

18 plan or cooperative is at least 51 percent owned by 

19 employees, including low to moderate income employ20 ees. 

21 ‘‘(2) DEFINITIONS.—For purposes of this sub22 section, the following definitions shall apply: 

23 ‘‘(A) EMPLOYEE STOCK OWNERSHIP

24 PLAN.—The term ‘employee stock ownership 
83 

•HR 3505 RH2 

1 plan’ has the same meaning as in section 

2 4975(e)(7) of the Internal Revenue Code of 1986. 

3 ‘‘(B) ELIGIBLE WORKER-OWNED COOPERA4 TIVE.—The term ‘eligible worker-owned coopera5 tive’ has the same meaning as in section 

6 1042(c)(2) of the Internal Revenue Code of 

7 1986.’’. 

8 SEC. 411. MINORITY FINANCIAL INSTITUTIONS. 

9 (a) IN GENERAL.—The Federal Deposit Insurance 

10 Corporation and the Office of Thrift Supervision shall pro11 vide such technical assistance to minority financial institu12 tions affected by Hurricane Katrina, Hurricane Rita, and 

13 Hurricane Wilma as may be appropriate to preserve the 

14 present number of minority depository institutions and 

15 preserve the minority character in cases involving mergers 

16 or acquisitions of a minority depository institution con17 sistent with section 308(a) of the Financial Institutions Re18 form, Recovery, and Enforcement Act of 1989. 

19 (b) MINORITY FINANCIAL INSTITUTION DEFINED.— 

20 For purposes of this subsection, the term ‘‘minority finan21 cial institution’’ has the same meaning as in section 308(b) 

22 of the Financial Institutions Reform, Recovery, and En23 forcement Act of 1989. 
84 

•HR 3505 RH2 

1 TITLE V—DEPOSITORY INSTITU2 TION AFFILIATES PROVI3 SIONS 

4 SEC. 501. CLARIFICATION OF CROSS MARKETING PROVI5 SION. 

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

7 1956 (12 U.S.C. 1843(n)(5)) is amended— 

8 (1) in subparagraph (B), by striking ‘‘subsection 

9 (k)(4)(I)’’ and inserting ‘‘subparagraph (H) or (I) of 

10 subsection (k)(4)’’; and 

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

13 ‘‘(C) THRESHOLD OF CONTROL.—Subpara14 graph (A) shall not apply with respect to a com15 pany described or referred to in clause (i) or (ii) 

16 of such subparagraph if the financial holding 

17 company does not own or control 25 percent or 

18 more of the total equity or any class of voting se19 curities of such company.’’. 

20 SEC. 502. AMENDMENT TO PROVIDE THE FEDERAL RE21 SERVE BOARD WITH DISCRETION CON22 CERNING THE IMPUTATION OF CONTROL OF 

23 SHARES OF A COMPANY BY TRUSTEES. 

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

25 1956 (12 U.S.C. 1841(g)(2)) is amended by inserting ‘‘, un-
85 

•HR 3505 RH2 

1 less the Board determines that such treatment is not appro2 priate in light of the facts and circumstances of the case 

3 and the purposes of this Act’’ before the period at the end. 

4 SEC. 503. ELIMINATING GEOGRAPHIC LIMITS ON THRIFT 

5 SERVICE COMPANIES. 

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

7 5(c)(4)(B) of the Home Owners’ Loan Act (12 U.S.C. 

8 1464(c)(4)(B)) (as amended by section 406(b)(3) of this 

9 Act) is amended— 

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

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

12 inserting ‘‘company, if the entire capital of the com13 pany is available for purchase’’; and 

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

15 such State’’. 

16 (b) TECHNICAL CORRECTIONS.— 

17 (1) The heading for subparagraph (B) of section 

18 5(c)(4) of the Home Owners’ Loan Act (12 U.S.C. 

19 1464(c)(4)(B)) is amended by striking ‘‘CORPORA20 TIONS’’ and inserting ‘‘COMPANIES’’. 

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

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

23 amended by striking ‘‘service corporations’’ and in24 serting ‘‘service companies’’. 
86 

•HR 3505 RH2 

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

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

3 ‘‘service corporation’’ each place such term appears in 

4 subparagraphs (A), (B), and (C) and inserting ‘‘serv5 ice company’’. 

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

7 Owners’ Loan Act (12 U.S.C. 

8 1467a(m)(4)(C)(iii)(II)) is amended by striking 

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

10 and inserting ‘‘service company’’. 

11 SEC. 504. CLARIFICATION OF SCOPE OF APPLICABLE RATE 

12 PROVISION. 

13 Section 44(f) of the Federal Deposit Insurance Act (12 

14 U.S.C. 1831u(f)) is amended by adding at the end the fol15 lowing new paragraphs: 

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

17 lender doing business in the State described in para18 graph (1), the maximum interest rate or amount of 

19 interest, discount points, finance charges, or other 

20 similar charges that may be charged, taken, received, 

21 or reserved from time to time in any loan, discount, 

22 or credit sale made, or upon any note, bill of ex23 change, financing transaction, or other evidence of 

24 debt issued to or acquired by any other lender shall 
87 

•HR 3505 RH2 

1 be equal to not more than the greater of the rates de2 scribed in subparagraph (A) or (B) of paragraph (1). 

3 ‘‘(4) OTHER LENDER DEFINED.—For purposes of 

4 paragraph (3), the term ‘other lender’ means any per5 son engaged in the business of selling or financing the 

6 sale of personal property (and any services incidental 

7 to the sale of personal property) in such State, except 

8 that, with regard to any person or entity described in 

9 such paragraph, such term does not include— 

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

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

12 business of providing a short-term cash advance 

13 to any consumer in exchange for— 

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

15 share draft, in the amount of the advance 

16 plus a fee, where presentment or negotiation 

17 of such check or share draft is deferred by 

18 agreement of the parties until a designated 

19 future date; or 

20 ‘‘(ii) a consumer authorization to debit 

21 the consumer’s transaction account, in the 

22 amount of the advance plus a fee, where 

23 such account will be debited on or after a 

24 designated future date.’’. 
88 

•HR 3505 RH2 

1 SEC. 505. SAVINGS ASSOCIATIONS ACTING AS AGENTS FOR 

2 AFFILIATED DEPOSITORY INSTITUTIONS. 

3 (a) IN GENERAL.—Section 18(r) of the Federal De4 posit Insurance Act (12 U.S.C. 1828(r)) is amended— 

5 (1) in paragraph (1)— 

6 (A) by striking ‘‘bank subsidiary’’ and in7 serting ‘‘depository institution subsidiary’’; and 

8 (B) by striking ‘‘bank holding company’’ 

9 and inserting ‘‘depository institution holding 

10 company’’; 

11 (2) in paragraph (2), by striking ‘‘a bank act12 ing’’ and inserting ‘‘a depository institution acting’’; 

13 (3) in paragraphs (3) and (5), by striking ‘‘or 

14 (6)’’ each place such term appears in each such para15 graph; and 

16 (4) by striking paragraph (6). 

17 (b) CLERICAL AMENDMENT.—The heading for section 

18 18(r)(2) of the Federal Deposit Insurance Act (12 U.S.C. 

19 1828(r)) is amended by striking ‘‘BANK’’ and inserting 

20 ‘‘DEPOSITORY INSTITUTION’’. 

21 SEC. 506. CREDIT CARD BANK INVESTMENTS FOR THE PUB22 LIC WELFARE. 

23 Section 2(c)(2)(F) of the Bank Holding Company Act 

24 of 1956 (12 U.S.C. 1841(c)(2)(F)) is amended— 
89 

•HR 3505 RH2 

1 (1) in clause (i), by striking ‘‘engages only in 

2 credit card operations;’’ and inserting ‘‘engages only 

3 in— 

4 ‘‘(I) credit card operations; and 

5 ‘‘(II) making investments de6 signed primarily to promote the public 

7 welfare, including the welfare of low8 and moderate-income communities or 

9 families (such as by providing housing, 

10 services, or jobs), in the manner and to 

11 the extent permitted for national banks 

12 under the paragraph designated the 

13 ‘Eleventh’ of section 5136 of the Re14 vised Statutes of the United States and 

15 regulations prescribed under such 

16 paragraph, except that the last sentence 

17 of such paragraph shall be applied for 

18 purposes of this subclause by sub19 stituting ‘5 percent’ for ‘15 percent’ 

20 each place such term appears; ’’; and 

21 (2) in clause (v), by inserting ‘‘, other than mak22 ing or purchasing loans for the purposes described in 

23 and to the extent permitted in clause (i)(II))’’ before 

24 the period at the end. 
90 

•HR 3505 RH2 

1 TITLE VI—BANKING AGENCY 

2 PROVISIONS 

3 SEC. 601. WAIVER OF EXAMINATION SCHEDULE IN ORDER 

4 TO ALLOCATE EXAMINER RESOURCES. 

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

6 U.S.C. 1820(d)) is amended— 

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

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

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

10 (2) by inserting after paragraph (4), the fol11 lowing new paragraph: 

12 ‘‘(5) WAIVER OF SCHEDULE WHEN NECESSARY

13 TO ACHIEVE SAFE AND SOUND ALLOCATION OF EXAM14 INER RESOURCES.—Notwithstanding paragraphs (1), 

15 (2), (3), and (4), an appropriate Federal banking 

16 agency may make adjustments in the examination 

17 cycle for an insured depository institution if nec18 essary to allocate available resources of examiners in 

19 a manner that provides for the safety and soundness 

20 of, and the effective examination and supervision of, 

21 insured depository institutions.’’; and 

22 (3) in paragraphs (8) and (9), as so redesig23 nated, by striking ‘‘paragraph (6)’’ and inserting 

24 ‘‘paragraph (7)’’. 
91 

•HR 3505 RH2 

1 SEC. 602. INTERAGENCY DATA SHARING. 

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

3 the Federal Deposit Insurance Act (12 U.S.C. 1817(a)(2)) 

4 is amended by adding at the end the following new subpara5 graph: 

6 ‘‘(C) DATA SHARING WITH OTHER AGEN7 CIES AND PERSONS.—In addition to reports of 

8 examination, reports of condition, and other re9 ports required to be regularly provided to the 

10 Corporation (with respect to all insured deposi11 tory institutions, including a depository institu12 tion for which the Corporation has been ap13 pointed conservator or receiver) or an appro14 priate State bank supervisor (with respect to a 

15 State depository institution) under subpara16 graph (A) or (B), a Federal banking agency 

17 may, in the agency’s discretion, furnish any re18 port of examination or other confidential super19 visory information concerning any depository 

20 institution or other entity examined by such 

21 agency under authority of any Federal law, to— 

22 ‘‘(i) any other Federal or State agency 

23 or authority with supervisory or regulatory 

24 authority over the depository institution or 

25 other entity; 
92 

•HR 3505 RH2 

1 ‘‘(ii) any officer, director, or receiver of 

2 such depository institution or entity; and 

3 ‘‘(iii) any other person the Federal 

4 banking agency determines to be appro5 priate.’’. 

6 (b) NATIONAL CREDIT UNION ADMINISTRATION.—Sec7 tion 202(a) of the Federal Credit Union Act (12 U.S.C. 

8 1782(a)) is amended by adding at the end the following 

9 new paragraph: 

10 ‘‘(8) DATA SHARING WITH OTHER AGENCIES AND

11 PERSONS.—In addition to reports of examination, re12 ports of condition, and other reports required to be 

13 regularly provided to the Board (with respect to all 

14 insured credit unions, including a credit union for 

15 which the Corporation has been appointed conservator 

16 or liquidating agent) or an appropriate State com17 mission, board, or authority having supervision of a 

18 State-chartered credit union, the Board may, in the 

19 Board’s discretion, furnish any report of examination 

20 or other confidential supervisory information con21 cerning any credit union or other entity examined by 

22 the Board under authority of any Federal law, to— 

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

24 authority with supervisory or regulatory author25 ity over the credit union or other entity; 
93 

•HR 3505 RH2 

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

2 such credit union or entity; and 

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

4 of such credit union or entity the Board deter5 mines to be appropriate.’’. 

6 SEC. 603. PENALTY FOR UNAUTHORIZED PARTICIPATION 

7 BY CONVICTED INDIVIDUAL. 

8 Section 19 of the Federal Deposit Insurance Act (12 

9 U.S.C. 1829) is amended by adding at the end the following 

10 new subsection: 

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

12 shall apply to a noninsured national bank and a non13 insured State member bank, and any agency or noninsured 

14 branch (as such terms are defined in section 1(b) of the 

15 International Banking Act of 1978) of a foreign bank as 

16 if such bank, branch, or agency were an insured depository 

17 institution, except such subsections shall be applied for pur18 poses of this subsection by substituting the agency deter19 mined under the following paragraphs for ‘Corporation’ 

20 each place such term appears in such subsections: 

21 ‘‘(1) The Comptroller of the Currency, in the case 

22 of a noninsured national bank or any Federal agency 

23 or noninsured Federal branch of a foreign bank. 

24 ‘‘(2) The Board of Governors of the Federal Re25 serve System, in the case of a noninsured State mem-
94 

•HR 3505 RH2 

1 ber bank or any State agency or noninsured State 

2 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 Insurance 

8 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 provided 

13 in clause (ii), after the end of the 6-year pe14 riod’’; 

15 (2) by striking ‘‘to be unnecessary’’ and inserting 

16 ‘‘are unnecessary and not relevant to any pending or 

17 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-
95 

•HR 3505 RH2 

1 pointed as the receiver of such deposi2 tory institution; and 

3 ‘‘(II) are unnecessary and not rel4 evant 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 after 

9 such appointment is final without regard to 

10 the 6-year period of limitation contained in 

11 such clause.’’. 

12 SEC. 605. MODERNIZATION OF RECORDKEEPING REQUIRE13 MENT. 

14 Subsection (f) of section 10 of the Federal Deposit In15 surance Act (12 U.S.C. 1820(f)) is amended to read as fol16 lows: 

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 of 

21 the agency to be— 

22 ‘‘(A) photographed or microphotographed or 

23 otherwise reproduced upon film; or 

24 ‘‘(B) preserved in any electronic medium or 

25 format which is capable of— 
96 

•HR 3505 RH2 

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 electroni6 cally stored data. 

7 ‘‘(2) TREATMENT AS ORIGINAL RECORDS.—Any 

8 photographs, microphotographs, or photographic film 

9 or copies thereof described in paragraph (1)(A) or re10 production of electronically stored data described in 

11 paragraph (1)(B) shall be deemed to be an original 

12 record for all purposes, including introduction in evi13 dence in all State and Federal courts or administra14 tive agencies and shall be admissible to prove any act, 

15 transaction, occurrence, or event therein recorded. 

16 ‘‘(3) AUTHORITY OF THE FEDERAL BANKING

17 AGENCIES.—Any photographs, microphotographs, or 

18 photographic film or copies thereof described in para19 graph (1)(A) or reproduction of electronically stored 

20 data described in paragraph (1)(B) shall be preserved 

21 in such manner as the Federal banking agency shall 

22 prescribe and the original records, papers, or docu23 ments may be destroyed or otherwise disposed of as 

24 the Federal banking agency may direct.’’. 
97 

•HR 3505 RH2 

1 SEC. 606. STREAMLINING REPORTS OF CONDITION. 

2 Section 7(a) of the Federal Deposit Insurance Act (12 

3 U.S.C. 1817(a)) is amended by adding the following new 

4 paragraph: 

5 ‘‘(11) STREAMLINING REPORTS OF CONDITION.— 

6 ‘‘(A) REVIEW OF INFORMATION AND SCHED7 ULES.—Before the end of the 1-year period be8 ginning on the date of the enactment of the Fi9 nancial Services Regulatory Relief Act of 2005 

10 and before the end of each 5-year period there11 after, each Federal banking agency shall, in con12 sultation with the other relevant Federal banking 

13 agencies, review the information and schedules 

14 that are required to be filed by an insured depos15 itory institution in a report of condition re16 quired under paragraph (3). 

17 ‘‘(B) REDUCTION OR ELIMINATION OF IN18 FORMATION FOUND TO BE UNNECESSARY.—After 

19 completing the review required by subparagraph 

20 (A), a Federal banking agency, in consultation 

21 with the other relevant Federal banking agencies, 

22 shall reduce or eliminate any requirement to file 

23 information or schedules under paragraph (3) 

24 (other than information or schedules that are 

25 otherwise required by law) if the agency deter26 mines that the continued collection of such infor-
98 

•HR 3505 RH2 

1 mation or schedules is no longer necessary or ap2 propriate.’’. 

3 SEC. 607. EXPANSION OF ELIGIBILITY FOR 18-MONTH EXAM4 INATION SCHEDULE FOR COMMUNITY BANKS. 

5 Paragraph (4)(A) of section 10(d) of the Federal De6 posit Insurance Act (12 U.S.C. 1820(d)) is amended by 

7 striking ‘‘$250,000,000’’ and inserting ‘‘$1,000,000,000’’. 

8 SEC. 608. SHORT FORM REPORTS OF CONDITION FOR CER9 TAIN COMMUNITY BANKS. 

10 (a) IN GENERAL.—Section 7(a) of the Federal Deposit 

11 Insurance Act (12 U.S.C. 1817(a)) is amended by inserting 

12 after paragraph (11) (as added by section 606 of this title) 

13 the following new paragraph: 

14 ‘‘(12) SHORT FORM REPORTS OF CONDITION FOR

15 COMMUNITY BANKS.— 

16 ‘‘(A) IN GENERAL.—With respect to reports 

17 of condition required under paragraph (3) for 

18 each calendar quarter, an insured depository in19 stitution described in subparagraphs (A), (B), 

20 (C), and (D) of section 10(d)(4) may submit a 

21 short form of any such report of condition in 2 

22 nonsequential quarters of any calendar year. 

23 ‘‘(B) SHORT FORM DEFINED.—The term 

24 ‘short form’, when used in connection with any 

25 report of condition required under paragraph 
99 

•HR 3505 RH2 

1 (3), means a report of condition in a format es2 tablished by the appropriate Federal banking 

3 agency, after notice and opportunity for com4 ment, that— 

5 ‘‘(i) is significantly and materially less 

6 burdensome for the insured depository insti7 tution to prepare than the format of the re8 port of condition required under paragraph 

9 (3); and 

10 ‘‘(ii) provides sufficient material infor11 mation for the appropriate Federal banking 

12 agency to assure the maintenance of the safe 

13 and sound condition of the depository insti14 tution and safe and sound practices.’’. 

15 (b) REGULATIONS.—Any regulation required to carry 

16 out the amendment made by subsection (a) shall be pub17 lished in final form before the end of the 6-month period 

18 beginning on the date of the enactment of this Act. 

19 SEC. 609. CLARIFICATION OF EXTENT OF SUSPENSION, RE20 MOVAL, AND PROHIBITION AUTHORITY OF 

21 FEDERAL BANKING AGENCIES IN CASES OF 

22 CERTAIN CRIMES BY INSTITUTION-AFFILI23 ATED PARTIES. 

24 (a) INSURED DEPOSITORY INSTITUTIONS.— 
100 

•HR 3505 RH2 

1 (1) IN GENERAL.—Section 8(g)(1) of the Federal 

2 Deposit Insurance Act (12 U.S.C. 1818(g)(1)) is 

3 amended— 

4 (A) in subparagraph (A)— 

5 (i) by striking ‘‘is charged in any in6 formation, indictment, or complaint, with 

7 the commission of or participation in’’ and 

8 inserting ‘‘is the subject of any information, 

9 indictment, or complaint, involving the 

10 commission of or participation in’’; 

11 (ii) by striking ‘‘may pose a threat to 

12 the interests of the depository institution’s 

13 depositors or may threaten to impair public 

14 confidence in the depository institution,’’ 

15 and insert ‘‘posed, poses, or may pose a 

16 threat to the interests of the depositors of, or 

17 threatened, threatens, or may threaten to 

18 impair public confidence in, any relevant 

19 depository institution (as defined in sub20 paragraph (E)),’’; and 

21 (iii) by striking ‘‘affairs of the deposi22 tory institution’’ and inserting ‘‘affairs of 

23 any depository institution’’; 

24 (B) in subparagraph (B)(i), by striking 

25 ‘‘the depository institution’’ and inserting ‘‘any 
101 

•HR 3505 RH2 

1 depository institution that the subject of the no2 tice is affiliated with at the time the notice is 

3 issued’’; 

4 (C) in subparagraph (C)(i)— 

5 (i) by striking ‘‘may pose a threat to 

6 the interests of the depository institution’s 

7 depositors or may threaten to impair public 

8 confidence in the depository institution,’’ 

9 and insert ‘‘posed, poses, or may pose a 

10 threat to the interests of the depositors of, or 

11 threatened, threatens, or may threaten to 

12 impair public confidence in, and relevant 

13 depository institution (as defined in sub14 paragraph (E)),’’; and 

15 (ii) by striking ‘‘affairs of the deposi16 tory institution’’ and inserting ‘‘affairs of 

17 any depository institution’’; 

18 (D) in subparagraph (C)(ii), by striking 

19 ‘‘affairs of the depository institution’’ and insert20 ing ‘‘affairs of any depository institution’’; 

21 (E) in subparagraph (D)(i), by striking 

22 ‘‘the depository institution’’ and inserting ‘‘any 

23 depository institution that the subject of the 

24 order is affiliated with at the time the order is 

25 issued’’; and 
102 

•HR 3505 RH2 

1 (F) by adding at the end the following new 

2 subparagraph: 

3 ‘‘(E) RELEVANT DEPOSITORY INSTITU4 TION.—For purposes of this subsection, the term 

5 ‘relevant depository institution’ means any de6 pository institution of which the party is or was 

7 an institution-affiliated party at the time— 

8 ‘‘(i) the information, indictment or 

9 complaint described in subparagraph (A) 

10 was issued; or 

11 ‘‘(ii) the notice is issued under sub12 paragraph (A) or the order is issued under 

13 subparagraph (C)(i).’’. 

14 (2) CLERICAL AMENDMENT.—The heading for 

15 section 8(g) of the Federal Deposit Insurance Act (12 

16 U.S.C. 1818(g)) is amended to read as follows: 

17 ‘‘(g) SUSPENSION, REMOVAL, AND PROHIBITION FROM

18 PARTICIPATION ORDERS IN THE CASE OF CERTAIN CRIMI19 NAL OFFENSES.—’’. 

20 (b) INSURED CREDIT UNIONS.— 

21 (1) IN GENERAL.—Section 206(i)(1) of the Fed22 eral Credit Union Act (12 U.S.C. 1786(i)(1)) is 

23 amended— 
103 

•HR 3505 RH2 

1 (A) in subparagraph (A), by striking ‘‘the 

2 credit union’’ each place such term appears and 

3 inserting ‘‘any credit union’’; 

4 (B) in subparagraph (B)(i), by inserting 

5 ‘‘of which the subject of the order is, or most re6 cently was, an institution-affiliated party’’ be7 fore the period at the end; 

8 (C) in subparagraph (C)— 

9 (i) by striking ‘‘the credit union’’ each 

10 place such term appears and inserting ‘‘any 

11 credit union’’; and 

12 (ii) by striking ‘‘the credit union’s’’ 

13 and inserting ‘‘any credit union’s’’; 

14 (D) in subparagraph (D)(i), by striking 

15 ‘‘upon such credit union’’ and inserting ‘‘upon 

16 the credit union of which the subject of the order 

17 is, or most recently was, an institution-affiliated 

18 party’’; and 

19 (E) by adding at the end the following new 

20 subparagraph: 

21 ‘‘(E) CONTINUATION OF AUTHORITY.—The 

22 Board may issue an order under this paragraph 

23 with respect to an individual who is an institu24 tion-affiliated party at a credit union at the 
104 

•HR 3505 RH2 

1 time of an offense described in subparagraph (A) 

2 without regard to— 

3 ‘‘(i) whether such individual is an in4 stitution-affiliated party at any credit 

5 union at the time the order is considered or 

6 issued by the Board; or 

7 ‘‘(ii) whether the credit union at which 

8 the individual was an institution-affiliated 

9 party at the time of the offense remains in 

10 existence at the time the order is considered 

11 or issued by the Board.’’. 

12 (2) CLERICAL AMENDMENT.—Section 206(i) of 

13 the Federal Credit Union Act (12 U.S.C. 1786(i)) is 

14 amended by striking ‘‘(i)’’ at the beginning and in15 serting the following new subsection heading: 

16 ‘‘(i) SUSPENSION, REMOVAL, AND PROHIBITION FROM

17 PARTICIPATION ORDERS IN THE CASE OF CERTAIN CRIMI18 NAL OFFENSES.—’’. 

19 SEC. 610. STREAMLINING DEPOSITORY INSTITUTION MERG20 ER APPLICATION REQUIREMENTS. 

21 (a) IN GENERAL.—Paragraph (4) of section 18(c) of 

22 the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is 

23 amended to read as follows: 

24 ‘‘(4) REPORTS ON COMPETITIVE FACTORS.— 
105 

•HR 3505 RH2 

1 ‘‘(A) REQUEST FOR REPORT.—In the inter2 ests of uniform standards and subject to sub3 paragraph (B), the responsible agency shall, be4 fore acting on any application for approval of a 

5 merger transaction— 

6 ‘‘(i) request a report on the competitive 

7 factors involved from the Attorney General; 

8 and 

9 ‘‘(ii) provide a copy of the request to 

10 the Corporation (when the Corporation is 

11 not the responsible agency). 

12 ‘‘(B) CONCURRENT CONSIDERATION.—The 

13 responsible agency shall not be required to make 

14 a request under subparagraph (A) before acting 

15 on an application for approval of a merger 

16 transaction if— 

17 ‘‘(i) the agency finds that it must act 

18 immediately in order to prevent the prob19 able failure of a depository institution in20 volved in the transaction; or 

21 ‘‘(ii) the transaction consists of a 

22 merger between an insured depository insti23 tution and 1 or more affiliates of the depos24 itory institution. 
106 

•HR 3505 RH2 

1 ‘‘(C) FURNISHING OF REPORT.—The report 

2 requested under subparagraph (A) shall be fur3 nished by the Attorney General to the responsible 

4 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 ad10 vises the Attorney General that an emer11 gency exists requiring expeditious action.’’. 

12 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec13 tion 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 or 

16 savings associations involved’’ and inserting the fol17 lowing: ‘‘insured depository institutions involved, or 

18 if the proposed merger transaction is solely between 

19 an insured depository institution and 1 or more of af20 filiates 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 
107 

•HR 3505 RH2 

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 fol18 lowing 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 for24 eign regulatory or supervisory authority if— 
108 

•HR 3505 RH2 

1 ‘‘(A) the Federal banking agency determines 

2 that the foreign regulatory or supervisory au3 thority has, in good faith, determined and rep4 resented to such Federal banking agency that 

5 public disclosure of the information would vio6 late 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 reg17 ulatory or supervisory authority. 

18 ‘‘(2) TREATMENT UNDER TITLE 5, UNITED

19 STATES CODE.—For purposes of section 552 of title 5, 

20 United States Code, this subsection shall be treated as 

21 a statute described in subsection (b)(3)(B) of such sec22 tion. 

23 ‘‘(3) SAVINGS PROVISION.—No provision of this 

24 section shall be construed as— 
109 

•HR 3505 RH2 

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 agen6 cy from complying with an order of a court of 

7 the United States in an action commenced by the 

8 United States or such agency. 

9 ‘‘(4) FEDERAL BANKING AGENCY DEFINED.—For 

10 purposes of this subsection, the term ‘Federal banking 

11 agency’ means the Board, the Comptroller, the Fed12 eral Deposit Insurance Corporation, and the Director 

13 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 added 

19 by section 603 of this title) the following new subsections: 

20 ‘‘(d) BANK HOLDING COMPANIES.—Subsections (a) 

21 and (b) shall apply to any company (other than a foreign 

22 bank) that is a bank holding company and any organiza23 tion organized and operated under section 25A of the Fed24 eral Reserve Act or operating under section 25 of the Fed25 eral Reserve Act as if such bank holding company or orga-
110 

•HR 3505 RH2 

1 nization were an insured depository institution, except such 

2 subsections shall be applied for purposes of this subsection 

3 by substituting ‘Board of Governors of the Federal Reserve 

4 System’ for ‘Corporation’ each place such term appears in 

5 such subsections. 

6 ‘‘(e) SAVINGS AND LOAN HOLDING COMPANIES.—Sub7 sections (a) and (b) shall apply to any savings and loan 

8 holding company and any subsidiary (other than a savings 

9 association) of a savings and loan holding company as if 

10 such savings and loan holding company or subsidiary were 

11 an insured depository institution, except such subsections 

12 shall be applied for purposes of this subsection by sub13 stituting ‘Director of the Office of Thrift Supervision’ for 

14 ‘Corporation’ each place such term appears in such sub15 sections.’’. 

16 (b) ENHANCED DISCRETION TO REMOVE CONVICTED

17 INDIVIDUALS.—Section 8(e)(2)(A) of the Federal Deposit 

18 Insurance Act (12 U.S.C. 1818(e)(2)(A)) is amended— 

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

20 (2) by striking the comma at the end of clause 

21 (iii) and inserting ‘‘; or’’; and 

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

23 clause: 

24 ‘‘(iv) an institution-affiliated party of 

25 a subsidiary (other than a bank) of a bank 
111 

•HR 3505 RH2 

1 holding company has been convicted of any 

2 criminal offense involving dishonesty or a 

3 breach of trust, or has agreed to enter into 

4 a pretrial diversion or similar program in 

5 connection with a prosecution for such an 

6 offense,’’. 

7 SEC. 614. CLARIFICATION THAT NOTICE AFTER SEPARA8 TION FROM SERVICE MAY BE MADE BY AN 

9 ORDER. 

10 (a) IN GENERAL.—Section 8(i)(3) of the Federal De11 posit Insurance Act (12 U.S.C. 1818(i)(3)) is amended by 

12 inserting ‘‘or order’’ after ‘‘notice’’ each place such term ap13 pears. 

14 (b) TECHNICAL AND CONFORMING AMENDMENT.—The 

15 heading for section 8(i)(3) of the Federal Deposit Insurance 

16 Act (12 U.S.C. 1818(i)(3)) is amended by inserting ‘‘OR

17 ORDER’’ after ‘‘NOTICE’’. 

18 SEC. 615. ENFORCEMENT AGAINST MISREPRESENTATIONS 

19 REGARDING FDIC DEPOSIT INSURANCE COV20 ERAGE. 

21 (a) IN GENERAL.—Section 18(a) of the Federal De22 posit Insurance Act (12 U.S.C. 1828(a)) is amended by 

23 adding at the end the following new paragraph: 
112 

•HR 3505 RH2 

1 ‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC

2 NAMES, AND MISREPRESENTATION TO INDICATE IN3 SURED STATUS.— 

4 ‘‘(A) PROHIBITION ON FALSE ADVERTISING

5 AND MISUSE OF FDIC NAMES.—No person may— 

6 ‘‘(i) use the terms ‘Federal Deposit’, 

7 ‘Federal Deposit Insurance’, ‘Federal De8 posit Insurance Corporation’, any combina9 tion of such terms, or the abbreviation 

10 ‘FDIC’ as part of the business name or firm 

11 name of any person, including any corpora12 tion, partnership, business trust, associa13 tion, or other business entity; or 

14 ‘‘(ii) use such terms or any other sign 

15 or symbol as part of an advertisement, so16 licitation, or other document, 

17 to represent, suggest or imply that any deposit 

18 liability, obligation, certificate or share is in19 sured or guaranteed by the Federal Deposit In20 surance Corporation, if such deposit liability, ob21 ligation, certificate, or share is not insured or 

22 guaranteed by the Corporation. 

23 ‘‘(B) PROHIBITION ON MISREPRESENTA24 TIONS OF INSURED STATUS.—No person may 

25 knowingly misrepresent— 
113 

•HR 3505 RH2 

1 ‘‘(i) that any deposit liability, obliga2 tion, certificate, or share is federally in3 sured, if such deposit liability, obligation, 

4 certificate, or share is not insured by the 

5 Corporation; or 

6 ‘‘(ii) the extent to which or the manner 

7 in which any deposit liability, obligation, 

8 certificate, or share is insured by the Fed9 eral Deposit Insurance Corporation, if such 

10 deposit liability, obligation, certificate, or 

11 share is not insured by the Corporation to 

12 the extent or in the manner represented. 

13 ‘‘(C) AUTHORITY OF FDIC.—The Corpora14 tion shall have— 

15 ‘‘(i) jurisdiction over any person that 

16 violates this paragraph, or aids or abets the 

17 violation of this paragraph; and 

18 ‘‘(ii) for purposes of enforcing the re19 quirements of this paragraph with regard to 

20 any person— 

21 ‘‘(I) the authority of the Corpora22 tion under section 10(c) to conduct in23 vestigations; and 
114 

•HR 3505 RH2 

1 ‘‘(II) the enforcement authority of 

2 the Corporation under subsections (b), 

3 (c), (d) and (i) of section 8, 

4 as if such person were a state nonmember in5 sured bank. 

6 ‘‘(D) OTHER ACTIONS PRESERVED.—No 

7 provision of this paragraph shall be construed as 

8 barring any action otherwise available, under 

9 the laws of the United States or any State, to 

10 any Federal or State law enforcement agency or 

11 individual.’’. 

12 (b) ENFORCEMENT ORDERS.—Section 8(c) of the Fed13 eral Deposit Insurance Act (12 U.S.C. 1818(c)) is amended 

14 by adding at the end the following new paragraph: 

15 ‘‘(4) FALSE ADVERTISING OR MISUSE OF NAMES

16 TO INDICATE INSURED STATUS.— 

17 ‘‘(A) TEMPORARY ORDER.— 

18 ‘‘(i) IN GENERAL.—If a notice of 

19 charges served under subsection (b)(1) of 

20 this section specifies on the basis of par21 ticular facts that any person is engaged in 

22 conduct described in section 18(a)(4), the 

23 Corporation may issue a temporary order 

24 requiring— 
115 

•HR 3505 RH2 

1 ‘‘(I) the immediate cessation of 

2 any activity or practice described, 

3 which gave rise to the notice of charges; 

4 and 

5 ‘‘(II) affirmative action to prevent 

6 any further, or to remedy any existing, 

7 violation. 

8 ‘‘(ii) EFFECT OF ORDER.—Any tem9 porary order issued under this subpara10 graph shall take effect upon service. 

11 ‘‘(B) EFFECTIVE PERIOD OF TEMPORARY

12 ORDER.—A temporary order issued under sub13 paragraph (A) shall remain effective and en14 forceable, pending the completion of an adminis15 trative proceeding pursuant to subsection (b)(1) 

16 in connection with the notice of charges— 

17 ‘‘(i) until such time as the Corporation 

18 shall dismiss the charges specified in such 

19 notice; or 

20 ‘‘(ii) if a cease-and-desist order is 

21 issued against such person, until the effec22 tive date of such order. 

23 ‘‘(C) CIVIL MONEY PENALTIES.—Violations 

24 of section 18(a)(4) shall be subject to civil money 

25 penalties as set forth in subsection (i) in an 
116 

•HR 3505 RH2 

1 amount not to exceed $1,000,000 for each day 

2 during which the violation occurs or continues.’’. 

3 (c) TECHNICAL AND CONFORMING AMENDMENTS.— 

4 (1) Section 18(a)(3) of the Federal Deposit In5 surance Act (12 U.S.C. 1828(a)) is amended— 

6 (A) in the 1st sentence by striking ‘‘of this 

7 subsection’’ and inserting ‘‘of paragraphs (1) 

8 and (2)’’; 

9 (B) by striking the 2nd sentence; and 

10 (C) in the 3rd sentence, by striking ‘‘of this 

11 subsection’’ and inserting ‘‘of paragraphs (1) 

12 and (2)’’. 

13 (2) The heading for subsection (a) of section 18 

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

15 1828(a)) is amended by striking ‘‘INSURANCE

16 LOGO.—’’ and inserting ‘‘REPRESENTATIONS OF DE17 POSIT INSURANCE.—’’. 

18 SEC. 616. CHANGES REQUIRED TO SMALL BANK HOLDING 

19 COMPANY POLICY STATEMENT ON ASSESS20 MENT OF FINANCIAL AND MANAGERIAL FAC21 TORS. 

22 (a) SMALL BANK HOLDING COMPANY POLICY STATE23 MENT ON ASSESSMENT OF FINANCIAL AND MANAGERIAL

24 FACTORS.— 
117 

•HR 3505 RH2 

1 (1) IN GENERAL.—Before the end of the 6-month 

2 period beginning on the date of the enactment of this 

3 Act, the Board of Governors of the Federal Reserve 

4 System shall publish in the Federal Register proposed 

5 revisions to the Small Bank Holding Company Policy 

6 Statement on Assessment of Financial and Manage7 rial Factors (12 C.F.R. part 225—appendix C) that 

8 provide that the policy shall apply to a bank holding 

9 company which has pro forma consolidated assets of 

10 less than $1,000,000,000 and that— 

11 (A) is not engaged in any nonbanking ac12 tivities involving significant leverage; and 

13 (B) does not have a significant amount of 

14 outstanding debt that is held by the general pub15 lic. 

16 (2) ADJUSTMENT OF AMOUNT.—The Board of 

17 Governors of the Federal Reserve System shall annu18 ally adjust the dollar amount referred to in para19 graph (1) in the Small Bank Holding Company Pol20 icy Statement on Assessment of Financial and Mana21 gerial Factors by an amount equal to the percentage 

22 increase, for the most recent year, in total assets held 

23 by all insured depository institutions, as determined 

24 by the Board. 
118 

•HR 3505 RH2 

1 (b) INCREASE IN DEBT-TO-EQUITY RATIO OF SMALL

2 BANK HOLDING COMPANY.—Before the end of the 6-month 

3 period beginning on the date of the enactment of this Act, 

4 the Board of Governors of the Federal Reserve System shall 

5 publish in the Federal Register proposed revisions to the 

6 Small Bank Holding Company Policy Statement on Assess7 ment of Financial and Managerial Factors (12 C.F.R. part 

8 225—appendix C) such that the debt-to-equity ratio allow9 able for a small bank holding company in order to remain 

10 eligible to pay a corporate dividend and to remain eligible 

11 for expedited processing procedures under Regulation Y of 

12 the Board of Governors of the Federal Reserve System would 

13 increase from 1:1 to 3:1. 

14 SEC. 617. EXCEPTION TO ANNUAL PRIVACY NOTICE RE15 QUIREMENT UNDER THE GRAMM-LEACH-BLI16 LEY ACT. 

17 Section 503 of the Gramm-Leach-Bliley Act (15 U.S.C. 

18 6803) is amended by adding the following new subsections: 

19 ‘‘(c) EXCEPTION TO ANNUAL NOTICE REQUIRE20 MENT.—A financial institution that— 

21 ‘‘(1) provides nonpublic personal information 

22 only in accordance with the provisions of subsection 

23 (b)(2) or (e) of section 502 or regulations prescribed 

24 under section 504(b); 
119 

•HR 3505 RH2 

1 ‘‘(2) does not share information with affiliates 

2 under section 603(d)(2)(A) of the Fair Credit Report3 ing Act; and 

4 ‘‘(3) has not changed its policies and practices 

5 with regard to disclosing nonpublic personal informa6 tion from the policies and practices that were dis7 closed in the most recent disclosure sent to consumers 

8 in accordance with this subsection, 

9 shall not be required to provide an annual disclosure under 

10 this subsection until such time as the financial institution 

11 fails to comply with any criteria described in paragraph 

12 (1), (2), or (3). 

13 ‘‘(d) EXCEPTION TO NOTICE REQUIREMENT.—A fi14 nancial institution shall not be required to provide any dis15 closure under this section if— 

16 ‘‘(1) the financial institution is licensed by a 

17 State and is subject to existing regulation of consumer 

18 confidentiality that prohibits disclosure of nonpublic 

19 personal information without knowing and expressed 

20 consent of the consumer in the form of laws, rules, or 

21 regulation of professional conduct or ethics promul22 gated either by the court of highest appellate author23 ity or by the principal legislative body or regulatory 

24 agency or body of any State of the United States, the 

25 District of Columbia, any territory of the United 
120 

•HR 3505 RH2 

1 States, Puerto Rico, Guam, American Samoa, the 

2 Trust Territory of the Pacific Islands, the Virgin Is3 lands, or the Northern Mariana Islands; or 

4 ‘‘(2) the financial institution is licensed by a 

5 State and becomes subject to future regulation of con6 sumer confidentiality that prohibits disclosure of non7 public personal information without knowing and ex8 pressed consent of the consumer in the form of laws, 

9 rules, or regulation of professional conduct or ethics 

10 promulgated either by the court of highest appellate 

11 authority or by the principal legislative body or regu12 latory agency or body of any State of the United 

13 States, the District of Columbia, any territory of the 

14 United States, Puerto Rico, Guam, American Samoa, 

15 the Trust Territory of the Pacific Islands, the Virgin 

16 Islands, or the Northern Mariana Islands.’’. 

17 SEC. 618. BIENNIAL REPORTS ON THE STATUS OF AGENCY 

18 EMPLOYMENT OF MINORITIES AND WOMEN. 

19 (a) IN GENERAL.—Before December 31, 2005, and the 

20 end of each 2-year period beginning after such date, each 

21 Federal banking agency shall submit a report to the Con22 gress on the status of the employment by the agency of mi23 nority individuals and women. 

24 (b) FACTORS TO BE INCLUDED.—The report shall in25 clude a detailed assessment of each of the following: 
121 

•HR 3505 RH2 

1 (1) The extent of hiring of minority individuals 

2 and women by the agency as of the time the report 

3 is prepared. 

4 (2) The successes achieved and challenges faced 

5 by the agency in operating minority and women out6 reach programs. 

7 (3) Challenges the agency may face in finding 

8 qualified minority individual and women applicants. 

9 (4) Such other information, findings, and con10 clusions, and recommendations for legislative or agen11 cy action, as the agency may determine to be appro12 priate to include in the report. 

13 (c) DEFINITIONS.—For purposes of this section, the fol14 lowing definitions shall apply: 

15 (1) FEDERAL BANKING AGENCY.—The term 

16 ‘‘Federal banking agency’’— 

17 (A) has the same meaning as in section 3(z) 

18 of the Federal Deposit Insurance Act; and 

19 (B) includes the National Credit Union Ad20 ministration. 

21 (2) MINORITY.—The term ‘‘minority’’ has the 

22 same meaning as in section 1204(c)(3) of the Finan23 cial Institutions Reform, Recovery, and Enforcement 

24 Act of 1989. 
122 

•HR 3505 RH2 

1 SEC. 619. COORDINATION OF STATE EXAMINATION AU2 THORITY. 

3 Section 10(h) of the Federal Deposit Insurance Act (12 

4 U.S.C. 1820(h)) is amended to read as follows: 

5 ‘‘(h) COORDINATION OF EXAMINATION AUTHORITY.— 

6 ‘‘(1) STATE BANK SUPERVISORS OF HOME AND

7 HOST STATES.— 

8 ‘‘(A) HOME STATE OF BANK.—The appro9 priate State bank supervisor of the home State of 

10 an insured State bank has authority to examine 

11 and supervise the bank. 

12 ‘‘(B) HOST STATE BRANCHES.—The State 

13 bank supervisor of the home State of an insured 

14 State bank and any State bank supervisor of an 

15 appropriate host State shall exercise their respec16 tive authority to supervise and examine the 

17 branches of the bank in a host State in accord18 ance with the terms of any applicable coopera19 tive agreement between the home State bank su20 pervisor and the State bank supervisor of the rel21 evant host State. 

22 ‘‘(C) SUPERVISORY FEES.—Except as ex23 pressly provided in a cooperative agreement be24 tween the State bank supervisors of the home 

25 State and any host State of an insured State 

26 bank, only the State bank supervisor of the home 
123 

•HR 3505 RH2 

1 State of an insured State bank may levy or 

2 charge State supervisory fees on the bank. 

3 ‘‘(2) HOST STATE EXAMINATION.— 

4 ‘‘(A) IN GENERAL.—With respect to a 

5 branch operated in a host State by an out-of6 State insured State bank that resulted from an 

7 interstate merger transaction approved under 

8 section 44 or that was established in such State 

9 pursuant to section 5155(g) of the Revised Stat10 utes, the third undesignated paragraph of section 

11 9 of the Federal Reserve Act or section 18(d)(4) 

12 of this Act, the appropriate State bank super13 visor of such host State may— 

14 ‘‘(i) with written notice to the State 

15 bank supervisor of the bank’s home State 

16 and subject to the terms of any applicable 

17 cooperative agreement with the State bank 

18 supervisor of such home State, examine such 

19 branch for the purpose of determining com20 pliance with host State laws that are appli21 cable pursuant to section 24(j) of this Act, 

22 including those that govern community re23 investment, fair lending, and consumer pro24 tection; and 
124 

•HR 3505 RH2 

1 ‘‘(ii) if expressly permitted under and 

2 subject to the terms of a cooperative agree3 ment with the State bank supervisor of the 

4 bank’s home State or if such out-of-State in5 sured State bank has been determined to be 

6 in a troubled condition by either the State 

7 bank supervisor of the bank’s home State or 

8 the bank’s appropriate Federal banking 

9 agency, participate in the examination of 

10 the bank by the State bank supervisor of the 

11 bank’s home State to ascertain that the ac12 tivities of the branch in such host State are 

13 not conducted in an unsafe or unsound 

14 manner. 

15 ‘‘(B) NOTICE OF DETERMINATION.— 

16 ‘‘(i) IN GENERAL.—The State bank su17 pervisor of the home State of an insured 

18 State bank should notify the State bank su19 pervisor of each host State of the bank if 

20 there has been a final determination that 

21 the bank is in a troubled condition. 

22 ‘‘(ii) TIMING OF NOTICE.—The State 

23 bank supervisor of the home State of an in24 sured State bank should provide notice 

25 under clause (i) as soon as reasonably pos-
125 

•HR 3505 RH2 

1 sible but in all cases within 15 business 

2 days after the State bank supervisor has 

3 made such final determination or has re4 ceived written notification of such final de5 termination. 

6 ‘‘(3) HOST STATE ENFORCEMENT.—If the State 

7 bank supervisor of a host State determines that a 

8 branch of an out-of-State State insured State bank is 

9 violating any law of the host State that is applicable 

10 to such branch pursuant to section 24(j) of this Act, 

11 including a law that governs community reinvest12 ment, fair lending, or consumer protection, the State 

13 bank supervisor of the host State or, to the extent au14 thorized by the law of the host State, a host State law 

15 enforcement officer may, with written notice to the 

16 State bank supervisor of the bank’s home State and 

17 subject to the terms of any applicable cooperative 

18 agreement with the State bank supervisor of the 

19 bank’s home State, undertake such enforcement ac20 tions and proceedings as would be permitted under 

21 the law of the host State as if the branch were a bank 

22 chartered by that host State. 

23 ‘‘(4) COOPERATIVE AGREEMENT.— 

24 ‘‘(A) IN GENERAL.—The State bank super25 visors from 2 or more States may enter into co-
126 

•HR 3505 RH2 

1 operative agreements to facilitate State regu2 latory supervision of State banks, including co3 operative agreements relating to the coordination 

4 of examinations and joint participation in ex5 aminations. For purposes of this subsection (h), 

6 the term ‘cooperative agreement’ means a written 

7 agreement that is signed by the home State bank 

8 supervisor and host State bank supervisor to fa9 cilitate State regulatory supervision of State 

10 banks and includes nationwide or multi-state co11 operative agreements and cooperative agreements 

12 solely between the home State and host State. 

13 ‘‘(B) RULE OF CONSTRUCTION.—Except for 

14 State bank supervisors, no provision of this sub15 section relating to such cooperative agreements 

16 shall be construed as limiting in any way the 

17 authority of home and host State law enforce18 ment officers, regulatory supervisors, or other of19 ficials that have not signed such cooperative 

20 agreements to enforce host State laws that are 

21 applicable to a branch of an out-of-State insured 

22 State bank located in the host State pursuant to 

23 section 24(j) of this Act. 

24 ‘‘(5) FEDERAL REGULATORY AUTHORITY.—No 

25 provision of this subsection shall be construed as lim-
127 

•HR 3505 RH2 

1 iting in any way the authority of any Federal bank2 ing agency. 

3 ‘‘(6) STATE TAXATION AUTHORITY NOT AF4 FECTED.—No provision of this subsection (h) shall be 

5 construed as affecting the authority of any State or 

6 political subdivision of any State to adopt, apply, or 

7 administer any tax or method of taxation to any 

8 bank, bank holding company, or foreign bank, or any 

9 affiliate of any bank, bank holding company, or for10 eign bank, to the extent such tax or tax method is oth11 erwise permissible by or under the Constitution of the 

12 United States or other Federal law. 

13 ‘‘(7) DEFINITIONS.—For purpose of this section, 

14 the following definition shall apply: 

15 ‘‘(A) HOST STATE, HOME STATE, OUT-OF16 STATE BANK.—The terms ‘host State’, ‘home 

17 State’, and ‘out-of-State bank’ have the same 

18 meanings as in section 44(g). 

19 ‘‘(B) STATE SUPERVISORY FEES.—The term 

20 ‘State supervisory fees’ means assessments, exam21 ination fees, branch fees, license fees, and all 

22 other fees that are levied or charged by a State 

23 bank supervisor directly upon an insured State 

24 bank or upon branches of an insured State bank. 
128 

•HR 3505 RH2 

1 ‘‘(C) TROUBLED CONDITION.—Solely for 

2 purposes of subparagraph (2)(B) of this sub3 section (h), an insured State bank has been de4 termined to be in ‘troubled condition’ if the 

5 bank— 

6 ‘‘(i) has a composite rating, as deter7 mined in its most recent report of examina8 tion, of 4 or 5 under the Uniform Financial 

9 Institutions Ratings System (UFIRS); or 

10 ‘‘(ii) is subject to a proceeding initi11 ated by the Corporation for termination or 

12 suspension of deposit insurance; or 

13 ‘‘(iii) is subject to a proceeding initi14 ated by the State bank supervisor of the 

15 bank’s home State to vacate, revoke, or ter16 minate the charter of the bank, or to liq17 uidate the bank, or to appoint a receiver for 

18 the bank. 

19 ‘‘(D) FINAL DETERMINATION.—For the pur20 poses of paragraph (2)(B), the term ‘final deter21 mination’ means the transmittal of a report of 

22 examination to the bank or transmittal of offi23 cial notice of proceedings to the bank.’’. 
129 

•HR 3505 RH2 

1 SEC. 620. NONWAIVER OF PRIVILEGES. 

2 (a) INSURED DEPOSITORY INSTITUTIONS.—Section 18 

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

4 amended by adding at the end the following new subsection: 

5 ‘‘(x) PRIVILEGES NOT AFFECTED BY DISCLOSURE TO

6 BANKING AGENCY OR SUPERVISOR.— 

7 ‘‘(1) IN GENERAL.—The submission by any per8 son of any information to any Federal banking agen9 cy, State bank supervisor, or foreign banking author10 ity for any purpose in the course of any supervisory 

11 or regulatory process of such agency, supervisor, or 

12 authority shall not be construed as waiving, destroy13 ing, or otherwise affecting any privilege such person 

14 may claim with respect to such information under 

15 Federal or State law as to any person or entity other 

16 than such agency, supervisor, or authority. 

17 ‘‘(2) RULE OF CONSTRUCTION.—No provision of 

18 paragraph (1) may be construed as implying or es19 tablishing that— 

20 ‘‘(A) any person waives any privilege ap21 plicable to information that is submitted or 

22 transferred under any circumstance to which 

23 paragraph (1) does not apply; or 

24 ‘‘(B) any person would waive any privilege 

25 applicable to any information by submitting the 

26 information to any Federal banking agency, 
130 

•HR 3505 RH2 

1 State bank supervisor, or foreign banking au2 thority, but for this subsection.’’. 

3 (b) INSURED CREDIT UNIONS.—Section 205 of the 

4 Federal Credit Union Act (12 U.S.C.1785) is amended by 

5 adding at the end the following new subsection: 

6 ‘‘(j) PRIVILEGES NOT AFFECTED BY DISCLOSURE TO

7 BANKING AGENCY OR SUPERVISOR.— 

8 ‘‘(1) IN GENERAL.—The submission by any per9 son of any information to the Administration, any 

10 State credit union supervisor, or foreign banking au11 thority for any purpose in the course of any super12 visory or regulatory process of such Board, supervisor, 

13 or authority shall not be construed as waiving, de14 stroying, or otherwise affecting any privilege such 

15 person may claim with respect to such information 

16 under Federal or State law as to any person or entity 

17 other than such Board, supervisor, or authority. 

18 ‘‘(2) RULE OF CONSTRUCTION.—No provision of 

19 paragraph (1) may be construed as implying or es20 tablishing that— 

21 ‘‘(A) any person waives any privilege ap22 plicable to information that is submitted or 

23 transferred under any circumstance to which 

24 paragraph (1) does not apply; or 
131 

•HR 3505 RH2 

1 ‘‘(B) any person would waive any privilege 

2 applicable to any information by submitting the 

3 information to the Administration, any State 

4 credit union supervisor, or foreign banking au5 thority, but for this subsection.’’. 

6 SEC. 621. RIGHT TO FINANCIAL PRIVACY ACT OF 1978 

7 AMENDMENT. 

8 Paragraph (1) of section 1101 of the Right to Finan9 cial Privacy Act of 1978 (12 U.S.C. 3401) is amended by 

10 inserting ‘‘(including any lender who advances funds on 

11 pledges of personal property)’’ after ‘‘consumer finance in12 stitution’’. 

13 SEC. 622. DEPUTY DIRECTOR; SUCCESSION AUTHORITY FOR 

14 DIRECTOR OF THE OFFICE OF THRIFT SUPER15 VISION. 

16 (a) ESTABLISHMENT OF POSITION OF DEPUTY DIREC17 TOR.—Section 3(c)(5) of the Home Owners’ Loan Act (12 

18 U.S.C. 1462a(c)(5)) is amended to read as follows: 

19 ‘‘(5) DEPUTY DIRECTOR.— 

20 ‘‘(A) IN GENERAL.—The Secretary of the 

21 Treasury shall appoint a Deputy Director and 

22 may appoint up to 3 additional Deputy Direc23 tors. 

24 ‘‘(B) FIRST DEPUTY DIRECTOR.—If the Sec25 retary of the Treasury appoints more than 1 
132 

•HR 3505 RH2 

1 Deputy Director of the Office, the Secretary shall 

2 designate one such appointee as the First Deputy 

3 Director. 

4 ‘‘(C) DUTIES.—Each Deputy Director ap5 pointed under this paragraph shall take an oath 

6 of office and perform such duties as the Director 

7 shall direct. 

8 ‘‘(D) COMPENSATION AND BENEFITS.—The 

9 Director shall fix the compensation and benefits 

10 for each Deputy Director in accordance with this 

11 Act.’’. 

12 (b) SERVICE OF DEPUTY DIRECTOR AS ACTING DIREC13 TOR.—Section 3(c)(3) of the Home Owners’ Loan Act (12 

14 U.S.C. 1462a(c)(3)) is amended— 

15 (1) by striking ‘‘VACANCY.—A vacancy in the 

16 position of Director’’ and inserting ‘‘VACANCY.— 

17 ‘‘(A) IN GENERAL.—A vacancy in the posi18 tion of Director’’; and 

19 (2) by adding at the end the following new sub20 paragraphs: 

21 ‘‘(B) ACTING DIRECTOR.— 

22 ‘‘(i) IN GENERAL.—In the event of a 

23 vacancy in the position of Director or dur24 ing the absence or disability of the Director, 
133 

•HR 3505 RH2 

1 the Deputy Director shall serve as Acting 

2 Director. 

3 ‘‘(ii) SUCCESSION IN CASE OF 2 OR

4 MORE DEPUTY DIRECTORS.—If there are 2 

5 or more Deputy Directors serving at the 

6 time a vacancy in the position of Director 

7 occurs or the absence or disability of the Di8 rector commences, the First Deputy Director 

9 shall serve as Acting Director under clause 

10 (i) followed by such other Deputy Directors 

11 under any order of succession the Director 

12 may establish. 

13 ‘‘(iii) AUTHORITY OF ACTING DIREC14 TOR.—Any Deputy Director, while serving 

15 as Acting Director under this subpara16 graph, shall be vested with all authority, 

17 duties, and privileges of the Director under 

18 this Act and any other provision of Federal 

19 law.’’. 

20 SEC. 623. LIMITATION ON SCOPE OF NEW AGENCY GUIDE21 LINES. 

22 (a) IN GENERAL.—The provisions of the multi-agency 

23 guidance Numbered 2003–1 issued by the Comptroller of the 

24 Currency, the Board of Governors of the Federal Reserve 

25 System, the Federal Deposit Insurance Corporation, and 
134 

•HR 3505 RH2 

1 the Director of the Office of Thrift Supervision that relate 

2 to minimum credit card payments and negative amortiza3 tion— 

4 (1) shall only apply to new credit card accounts 

5 established by a creditor for a consumer after the date 

6 of the enactment of this Act under an open end con7 sumer credit plan; and 

8 (2) shall not apply to any outstanding balance 

9 on any credit card account under an open end con10 sumer credit plan as of such date of enactment. 

11 (b) DEFINITIONS.—For purposes of this section, the 

12 terms ‘‘credit’’, ‘‘credit card’’, ‘‘creditor’’, ‘‘consumer’’ and 

13 ‘‘open end credit plan’’ have the same meanings as in sec14 tion 103 of the Truth in Lending Act. 

15 (c) SUNSET PROVISION.—This section shall not apply 

16 after the end of the 3-year period beginning on the date 

17 of the enactment of this Act . 

18 TITLE VII—‘‘BSA’’ COMPLIANCE 

19 BURDEN REDUCTION 

20 SEC. 701. EXCEPTION FROM CURRENCY TRANSACTION RE21 PORTS FOR SEASONED CUSTOMERS. 

22 (a) FINDINGS.—The Congress finds as follows: 

23 (1) The completion of and filing of currency 

24 transaction reports under section 5313 of title 31, 
135 

•HR 3505 RH2 

1 United States Code, poses a compliance burden on the 

2 financial industry. 

3 (2) Due to the nature of the transactions or the 

4 persons and entities conducting such transactions, 

5 certain such reports as currently filed do not appear 

6 to be relevant to the detection, deterrence, or inves7 tigation of financial crimes, including money laun8 dering and the financing of terrorism. 

9 (3) However, the data contained in such reports 

10 can provide valuable context for the analysis of other 

11 data derived pursuant to subchapter II of chapter 53 

12 of title 31, United States Code, as well as investiga13 tive data, which provides invaluable and indispen14 sable information supporting efforts to combat money 

15 laundering and other financial crimes. 

16 (4) An exemption from the reporting require17 ments for certain currency transactions that are of 

18 little or no value to ongoing efforts of law enforcement 

19 agencies, financial regulatory agencies, and the finan20 cial services industry to investigate, detect, or deter fi21 nancial crimes would serve to balance the burden 

22 placed on members of the financial services industry 

23 with the compelling need to produce and provide 

24 meaningful information to policy-makers, financial 

25 regulators, law enforcement, and intelligence agencies. 
136 

•HR 3505 RH2 

1 (5) The Secretary of the Treasury has by regula2 tion, and in accordance with section 5313 of title 31, 

3 United States Code, implemented a process by which 

4 institutions may seek exemptions from filing certain 

5 currency transaction reports based on appropriate 

6 circumstances; however, the existing exemption proc7 ess has not adequately balanced the burden on the fi8 nancial industry with the Government’s need for data 

9 to support its efforts in combating financial crime. 

10 (6) The act of providing notice to the Secretary 

11 of the Treasury of designations of exemption provides 

12 meaningful information to law enforcement officials 

13 on exempt customers and enables law enforcement to 

14 obtain account information through appropriate legal 

15 process; the act of providing notice of designations of 

16 exemption complements other sections of title 31, 

17 United States Code, whereby law enforcement can lo18 cate financial institutions with relevant records relat19 ing to a person of investigative interest, such as infor20 mation requests made pursuant to regulations imple21 menting section 314(a) of the USA PATRIOT Act of 

22 2001. 

23 (7) A designation of exemption has no effect on 

24 requirements for depository institutions to apply the 

25 full range of anti-money laundering controls as set 
137 

•HR 3505 RH2 

1 forth in subchapter II of chapter 53 of title 31, 

2 United States Code, including the requirement to 

3 apply the customer identification program pursuant 

4 to Section 5326 of subchapter II of chapter 53 of title 

5 31, United States Code, and the requirement to iden6 tify, monitor, and, if appropriate, report suspicious 

7 activity in accordance with section 5318(g) of title 

8 31, United States Code. 

9 (8) The Federal banking agencies and the Finan10 cial Crimes Enforcement Network have recently pro11 vided guidance through the Federal Financial Institu12 tions Examination Council Bank Secrecy Act/Anti13 Money Laundering Examination Manual on apply14 ing appropriate levels of due diligence and identi15 fying suspicious activity by the types of cash-inten16 sive businesses that generally will be subject to exemp17 tion. 

18 (b) SEASONED CUSTOMER EXEMPTION.— 

19 (1) IN GENERAL.—Section 5313(e) of title 31, 

20 United States Code, is amended to read as follows: 

21 ‘‘(e) QUALIFIED CUSTOMER EXEMPTION.— 

22 ‘‘(1) IN GENERAL.—The Secretary of the Treas23 ury shall prescribe regulations within 270 days of the 

24 enactment of the Financial Services Regulatory Relief 

25 Act of 2005 that exempt any depository institution 
138 

•HR 3505 RH2 

1 from filing a report pursuant to this section in a 

2 transaction for the payment, receipt, or transfer of 

3 United States coins or currency (or other monetary 

4 instruments the Secretary of the Treasury prescribes) 

5 with a qualified customer of the depository institu6 tion. 

7 ‘‘(2) QUALIFIED CUSTOMER DEFINED.—For pur8 poses of this section, the term ‘qualified customer’, 

9 with respect to a depository institution, has such 

10 meaning as the Secretary of the Treasury shall pre11 scribe, which shall include any person that— 

12 ‘‘(A) is incorporated or organized under the 

13 laws of the United States or any State, includ14 ing a sole proprietorship, or is registered as and 

15 eligible to do business within the United States 

16 or a State; 

17 ‘‘(B) has maintained a deposit account with 

18 the depository institution for at least 12 months; 

19 and 

20 ‘‘(C) has engaged, using such account, in 

21 multiple currency transactions that are subject 

22 to the reporting requirements of subsection (a). 

23 ‘‘(3) REGULATIONS.— 

24 ‘‘(A) IN GENERAL.—The Secretary of the 

25 Treasury shall prescribe regulations requiring a 
139 

•HR 3505 RH2 

1 depository institution to file a 1-time notice of 

2 designation of exemption for each qualified cus3 tomer of the depository institution. 

4 ‘‘(B) FORM AND CONTENT OF EXEMPTION

5 NOTICE.—The Secretary shall by regulation pre6 scribe the form, manner, content, and timing of 

7 the qualified customer exemption notice; such no8 tice shall include information sufficient to iden9 tify the qualified customer and its accounts. 

10 ‘‘(C) AUTHORITY OF SECRETARY.— 

11 ‘‘(i) IN GENERAL.—The Secretary may 

12 suspend, reject or revoke any qualified cus13 tomer exemption notice, in accordance with 

14 criteria prescribed by the Secretary by regu15 lation. 

16 ‘‘(ii) CONDITIONS.—The Secretary 

17 may establish conditions, in accordance 

18 with criteria prescribed by regulation, 

19 under which exempt qualified customers of 

20 an insured depository institution that is 

21 merged with or acquired by another insured 

22 depository institution will continue to be 

23 treated as designated exempt qualified cus24 tomers of the surviving or acquiring institu25 tion.’’. 
140 

•HR 3505 RH2 

1 (c) 3-YEAR REVIEW AND REPORT.—Before the end of 

2 the 3-year period beginning on the date of the enactment 

3 of this Act, the Secretary of the Treasury, in consultation 

4 with the Attorney General, the Secretary of the Department 

5 of Homeland Security, the Federal banking agencies, the 

6 banking industry, and such other persons as the Secretary 

7 deems appropriate, shall evaluate the operations and effect 

8 of this provision and make recommendations to Congress 

9 as to any legislative action with respect to this provision 

10 as the Secretary may determine to be appropriate. 

11 SEC. 702. REDUCTION IN INCONSISTENCIES IN MONETARY 

12 TRANSACTION RECORDKEEPING AND RE13 PORTING ENFORCEMENT AND EXAMINATION 

14 REQUIREMENTS. 

15 (a) SENSE OF THE CONGRESS.—It is the sense of the 

16 Congress that inconsistencies and redundancies among reg17 ulations implementing monetary transaction recordkeeping 

18 and reporting enforcement programs under section 8 of the 

19 Federal Deposit Insurance Act, section 206(q) of the Federal 

20 Credit Union Act, and chapter II of chapter 53 of title 31, 

21 United States Code by the Secretary of the Treasury and 

22 the Federal banking agencies— 

23 (1) increase the difficulty depository institutions 

24 have in complying with congressional intent in cre25 ating such enforcement programs, 
141 

•HR 3505 RH2 

1 (2) reduce the transparency and clarity of the 

2 regulatory regime; 

3 (3) increase the potential for conflict among the 

4 various regulations in the future; and 

5 (4) contribute to the perception that various 

6 agencies involved in the enforcement of the monetary 

7 transaction recordkeeping and reporting requirements 

8 apply such requirements inconsistently. 

9 (b) AGENCY COORDINATION OF MONETARY TRANS10 ACTION RECORDKEEPING AND REPORTING REQUIRE11 MENTS.— 

12 (1) ENFORCEMENT PROGRAMS.— 

13 (A) FEDERAL DEPOSIT INSURANCE ACT.— 

14 Section 8(s) of the Federal Deposit Insurance Act 

15 (12 U.S.C. 1818(s)) is amended by adding at the 

16 end the following new paragraph: 

17 ‘‘(4) COORDINATION ON UNIFORM REQUIRE18 MENTS.—In prescribing regulations under paragraph 

19 (1), the Federal banking agencies, acting through the 

20 Financial Institutions Examination Council, shall— 

21 ‘‘(A) consult with each other, the National 

22 Credit Union Administration Board, and the 

23 Secretary of the Treasury; and 

24 ‘‘(B) take such action as may be necessary 

25 to ensure that the requirements for procedures es-
142 

•HR 3505 RH2 

1 tablished pursuant to such regulations, and the 

2 examination standards for reviewing such proce3 dures, are congruent and reasonably uniform 

4 (taking into account differences in the form and 

5 function of the institutions subject to such re6 quirements).’’. 

7 (B) FEDERAL CREDIT UNION ACT.—Section 

8 206(q) of the Federal Credit Union Act (12 

9 U.S.C. 1786(q)) is amended by adding at the end 

10 the following new paragraph: 

11 ‘‘(4) COORDINATION ON UNIFORM REQUIRE12 MENTS.—In prescribing regulations under paragraph 

13 (1), the Board, acting through the Financial Institu14 tions Examination Council, shall— 

15 ‘‘(A) consult with the Federal banking agen16 cies and the Secretary of the Treasury; and 

17 ‘‘(B) take such action as may be necessary 

18 to ensure that the requirements for procedures es19 tablished pursuant to such regulations, and the 

20 examination standards for reviewing such proce21 dures, are congruent and reasonably uniform 

22 (taking into account differences in the form and 

23 function of the institutions subject to such re24 quirements).’’. 
143 

•HR 3505 RH2 

1 (2) EXAMINATION STANDARDS AND DISPUTES.— 

2 Section 1006 of the Federal Financial Institutions 

3 Examination Council Act of 1978 (12 U.S.C. 3305) 

4 is amended by adding at the end the following new 

5 subsection: 

6 ‘‘(h) MONETARY TRANSACTION RECORDKEEPING AND

7 REPORTING REQUIREMENTS.—The Council and the Sec8 retary of the Treasury shall jointly establish— 

9 ‘‘(1) uniform standards and principles applica10 ble to the examination of financial institutions to en11 sure compliance with the requirements of subchapter 

12 II of chapter 53, United States Code, sections 8(s) 

13 and 21 of the Federal Deposit Insurance Act, and sec14 tion 206(q) of the Federal Credit Union Act; and 

15 ‘‘(2) a clear policy statement on appropriate 

16 processes for resolving examiner-institution disagree17 ments concerning the application of subchapter II of 

18 chapter 53, United States Code, sections 8(s) and 21 

19 of the Federal Deposit Insurance Act, and section 

20 206(q) of the Federal Credit Union Act to financial 

21 institutions.’’. 

22 (3) EFFECTIVE DATE.—The Federal banking 

23 agencies, the National Credit Union Administration 

24 Board, the Financial Institutions Examination 

25 Council, and the Secretary of the Treasury shall com-
144 

•HR 3505 RH2 

1 mence the discussions and consultations required 

2 under the amendments made by this subsection as 

3 soon as practicable after the date of the enactment of 

4 this Act. 

5 (c) REVIEW OF AND REPORT ON ADDITIONAL REGU6 LATORY OR LEGISLATIVE CHANGES.— 

7 (1) REVIEW REQUIRED.—Before the end of the 6- 

8 month period beginning on the date of the enactment 

9 of this Act, the Secretary of the Treasury shall con10 duct a review of the potential inconsistencies in, or 

11 redundancies among, the regulations pertaining to the 

12 application of the requirements of subchapter II of 

13 chapter 53, United States Code, sections 8(s) and 21 

14 of the Federal Deposit Insurance Act, and section 

15 206(q) of the Federal Credit Union Act to financial 

16 institutions. 

17 (2) REPORT TO CONGRESS AND THE FINANCIAL

18 INSTITUTIONS EXAMINATION COUNCIL.—Upon comple19 tion of the review under paragraph (1), the Secretary 

20 of the Treasury shall promptly submit a report on the 

21 findings and conclusions of the Secretary with respect 

22 to the review to the Committee on Financial Services 

23 of the House of Representatives and the Committee on 

24 Banking, Housing, and Urban Affairs of the Senate, 

25 together with such recommendations for legislative 
145 

•HR 3505 RH2 

1 and administrative actions as the Secretary may de2 termine to be appropriate, and shall transmit a copy 

3 of such report to the members of the Financial Insti4 tutions Examination Council. 

5 (d) REFORM OF APPLICATION OF MONETARY TRANS6 ACTION RECORDKEEPING AND REPORTING REQUIREMENTS

7 TO FINANCIAL INSTITUTIONS.—Before the end of the 9- 

8 month period beginning on the date of the submission of 

9 the report to Congress under subsection (c)(2), the Secretary 

10 of the Treasury shall prescribe regulations implementing 

11 appropriate changes to regulations within the jurisdiction 

12 of the Secretary to remedy redundancies or inconsistencies 

13 identified in the review by, and included in the rec14 ommendations of, the Secretary under subsection (c). 

15 SEC. 703. ADDITIONAL REFORMS RELATING TO MONETARY 

16 TRANSACTION AND RECORDKEEPING RE17 QUIREMENTS APPLICABLE TO FINANCIAL IN18 STITUTIONS. 

19 (a) NOTIFICATION OF OFFICERS AND DIRECTORS OF

20 FINANCIAL INSTITUTIONS.—Before the end of the 6-month 

21 period beginning on the date of the enactment of this Act, 

22 the Secretary of the Treasury shall— 

23 (1) review any regulation, guideline, or guidance 

24 of the Secretary, any Federal banking agency, or the 

25 National Credit Union Administration Board that 
146 

•HR 3505 RH2 

1 serves as the basis for any requirement to provide no2 tice to any officer or director of a depository institu3 tion of any suspicious activity report submitted by 

4 the depository institution to the Secretary and any 

5 such agency or Board; 

6 (2) modify or eliminate any such requirement of 

7 the Secretary that the Secretary determines is not 

8 necessary to achieve the purposes of section 5318(g) of 

9 title 31, United States Code; and 

10 (3) make a recommendation to any Federal 

11 banking agency or the National Credit Union Admin12 istration Board to modify or eliminate any such re13 quirement of such agency or Board that the Secretary 

14 determines is not necessary to achieve the purposes of 

15 section 5318(g) of title 31, United States Code. 

16 (b) ELIMINATION OF UNNECESSARY VERIFICATION RE17 QUIREMENTS APPLICABLE TO THE PURCHASE OF FINAN18 CIAL INSTRUMENTS.—Before the end of the 9-month period 

19 beginning on the date of the enactment of this Act, the Sec20 retary of the Treasury shall— 

21 (1) review all verification of customer identity 

22 requirements as they relate to the purchases of mone23 tary instruments by customers of depository institu24 tions, including the regulations codified in section 
147 

•HR 3505 RH2 

1 103.29(a)(ii) of title 31, Code of Federal Regulations; 

2 and 

3 (2) modify or eliminate any customer identity 

4 requirement related to the purchases of monetary in5 struments by customers of depository institutions 

6 codified in section 103.29(a)(ii) of title 31, Code of 

7 Federal Regulations, that the Secretary determines is 

8 unnecessary. 

9 (c) ELIMINATION OF RECURRING FILINGS OF SUS10 PICIOUS ACTIVITY REPORTS ON A SINGLE TRANSACTION.— 

11 Before the end of the 9-month period beginning on the date 

12 of the enactment of this Act, the Secretary of the Treasury, 

13 as appropriate, shall prescribe regulations, or issue other 

14 forms of guidance, that eliminate the need for depository 

15 institutions to file recurring suspicious activity reports on 

16 the same transaction unless there has been a subsequent 

17 change in any pattern of activity involving any person who 

18 was connected with the transaction. 

19 (d) ELECTRONIC ACKNOWLEDGEMENT OF CERTAIN

20 ELECTRONIC FILINGS.—Before the end of the 1-year period 

21 beginning on the date of the enactment of this Act, the Di22 rector of the Financial Crimes Enforcement Network shall 

23 put into effect a system for promptly furnishing an elec24 tronic acknowledgement of receipt to any institution that 

25 files a form with FinCEN under subchapter II of chapter 
148 

•HR 3505 RH2 

1 53 of title 31, United States Code, through the Network’s 

2 electronic filing system. 

3 SEC. 704. STUDY BY COMPTROLLER GENERAL. 

4 (a) STUDY REQUIRED.—The Comptroller General of 

5 the United States shall conduct a study on methods and 

6 practices which would— 

7 (1) reduce the overall number of currency trans8 action reports filed with the Secretary of the Treasury 

9 under section 5313(a) of title 31, United States Code, 

10 while ensuring that the needs of the Secretary, the Fi11 nancial Crimes Enforcement Network, law enforce12 ment agencies, and financial institution regulatory 

13 agencies continue to be met; 

14 (2) improve financial institution utilization of 

15 the current exemption provisions; and 

16 (3) mitigate the difficulties in the current imple17 mentation of such exemption provisions that limit the 

18 utility of the exemption process for financial institu19 tions. 

20 (b) REPORT.—Before the end of the 6-month period be21 ginning on the date of the enactment of this Act, the Comp22 troller General shall submit a report to the Committee on 

23 Financial Services of the House of Representatives and the 

24 Committee on Banking, Housing, and Urban Affairs of the 

25 Senate on the findings and conclusions of the Comptroller 
149 

•HR 3505 RH2 

1 General with respect to the study conducted under sub2 section (a) and such recommendations for legislative and 

3 administrative action as the Comptroller General may de4 termine to be appropriate. 

5 SEC. 705. FEASIBILITY STUDY REQUIRED. 

6 (a) IN GENERAL.—For the purpose of simplifying, and 

7 increasing compliance with, the various recordkeeping and 

8 reporting requirements under subchapter II of chapter 53 

9 of title 31, United States Code, chapter 2 of title I of Public 

10 Law 91—508, and section 21 of the Federal Deposit Insur11 ance Act, and regulations prescribed under such provisions 

12 of law, the Secretary of the Treasury (hereafter in this sec13 tion referred to as the ‘‘Secretary’’) shall conduct a study 

14 on the feasibility of developing and implementing interfaces 

15 and templates for use in electronic communications between 

16 financial institutions (as defined in section 5312 of title 

17 31, United States Code) and the Secretary, the Financial 

18 Crimes Enforcement Network, and other Federal financial 

19 institution regulatory agencies. 

20 (b) FACTORS TO BE CONSIDERED.—In conducting the 

21 study required under subsection (a), the Secretary shall take 

22 into account— 

23 (1) any procedures required to be maintained by 

24 financial institutions under regulations prescribed 

25 pursuant to section 5318(a)(2) of title 31 of the 
150 

•HR 3505 RH2 

1 United States Code and the manner in which the use 

2 of interfaces and templates which might be developed 

3 could lessen the burden of complying with such proce4 dures; and 

5 (2) any exemptions prescribed by the Secretary 

6 under paragraph (5) or (6) of such section 5318(a) 

7 and the manner in which interfaces and templates 

8 which might be developed could be programmed to re9 flect any such exemption for a financial institution, 

10 transaction, or class of transactions. 

11 (c) PROTOTYPE AND REPORT REQUIRED.— 

12 (1) IN GENERAL.—Before the end of the 1-year 

13 period beginning on the date of the enactment of this 

14 Act, the Secretary shall submit a report to the Con15 gress containing a detailed description of the findings 

16 and conclusions of the Secretary in connection with 

17 the study required under subsection (a), together with 

18 such recommendations for legislative or administra19 tive action as the Secretary may determine to be ap20 propriate. 

21 (2) PROTOTYPE.—Any recommendation on the 

22 feasibility of developing and implementing interfaces 

23 and templates for use in electronic communications 

24 shall be accompanied by prototypes of such interfaces 

25 and templates that demonstrate such feasibility. 
151 

•HR 3505 RH2 

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 or 

5 more electronic data storage and communication sys6 tems that permits and facilitates active electronic 

7 communication between or among the systems, includ8 ing any procedures, codes, and protocols that enable 

9 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 the 

24 progress countries are making in combatting money 

25 laundering. 
152 

•HR 3505 RH2 

1 (3) Lack of information about the compliance of 

2 countries with anti-money laundering standards ex3 poses 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 affirm10 ative duty to provide to financial institutions and ex11 aminers the best possible information on compliance 

12 with anti-money laundering and terrorist financing 

13 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 coun22 try in meeting its standards against money laun23 dering; 

24 (2) a determination of whether that the efforts of 

25 that country to combat money laundering and ter-
153 

•HR 3505 RH2 

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 avail15 able 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. 
154 

•HR 3505 RH2 

1 (2) The Financial Crimes Enforcement Network 

2 in the Department of the Treasury (hereafter in this 

3 section referred to as ‘‘FinCEN’’ ) has defined money 

4 services businesses to include the following 5 distinct 

5 types of financial services providers as well as the 

6 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’ checks, 

12 money orders, or stored value cards. 

13 (E) Money transmitters. 

14 (3) Money services businesses have had more dif15 ficulty 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 guidance 

24 to money service businesses on obtaining and main25 taining banking services by identifying and explain-
155 

•HR 3505 RH2 

1 ing to money services businesses the types of informa2 tion and documentation they are expected to have, 

3 and to provide to, depository institutions when con4 ducting banking business. 

5 (6) At the same time, FinCEN and the Federal 

6 banking agencies have issued joint guidance to deposi7 tory 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 depos12 itory institutions should take when providing 

13 banking services to money services businesses. 

14 (7) It is in the interest of the United States and 

15 its allies in the wars against terrorism and drugs to 

16 make certain that the international transfer of funds 

17 is done in a rules-based, formal, and transparent 

18 manner and that individuals are not forced into uti19 lizing informal underground methods due to a lack of 

20 services. 

21 (b) SENSE OF THE CONGRESS.—It is the sense of the 

22 Congress that depository institutions and money services 

23 businesses should follow the guidance offered by FinCEN 

24 for the purpose of giving money services businesses full ac25 cess to banking services and ensuring that money services 
156 

•HR 3505 RH2 

1 businesses remain in the mainstream financial system and 

2 can be full players in providing important financial serv3 ices to their customers and be fully cooperative in the fight 

4 against terrorist financing and money laundering. 

5 TITLE VIII—CLERICAL AND 

6 TECHNICAL AMENDMENTS 

7 SEC. 801. CLERICAL AMENDMENTS TO THE HOME OWNERS’

8 LOAN ACT. 

9 (a) AMENDMENT TO TABLE OF CONTENTS.—The table 

10 of contents in section 1 of the Home Owners’ Loan Act (12 

11 U.S.C. 1461) is amended by striking the items relating to 

12 sections 5 and 6 and inserting the following new items: 

‘‘Sec. 5. Savings associations. 

‘‘Sec. 6. [Repealed.].’’. 

13 (b) CLERICAL AMENDMENTS TO HEADINGS.— 

14 (1) The heading for section 4(a) of the Home 

15 Owners’ Loan Act (12 U.S.C. 1463(a)) is amended by 

16 striking ‘‘(a) FEDERAL SAVINGS ASSOCIATIONS.—’’ 

17 and inserting ‘‘(a) GENERAL RESPONSIBILITIES OF

18 THE DIRECTOR.—’’. 

19 (2) The section heading for section 5 of the Home 

20 Owners’ Loan Act (12 U.S.C. 1464) is amended to 

21 read as follows: 
157 

•HR 3505 RH2 

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 seq.) 

5 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 such 

10 term appears and insert ‘‘account’’. 

11 (3) In section 107(a)(5)(E) (as so designated by 

12 section 303 of this Act), strike the period at the end 

13 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 the 

16 period at the end and insert a semicolon. 

17 (5) In section 107(a)(7)(D) (as so designated by 

18 section 303 of this Act), strike ‘‘the Federal Savings 

19 and Loan Insurance Corporation or’’. 

20 (6) In section 107(a)(7)(E) (as so designated by 

21 section 303 of this Act), strike ‘‘the Federal Home 

22 Loan Bank Board,’’ and insert ‘‘the Federal Housing 

23 Finance Board,’’. 

24 (7) In section 107(a)(9) (as so designated by sec25 tion 303 of this Act), strike ‘‘subchapter III’’ and in26 sert ‘‘title III’’. 
158 

•HR 3505 RH2 

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 U.S.C. 

5 4703(16))’’. 

6 (10) In section 120(h), strike ‘‘the Act approved 

7 July 30, 1947 (6 U.S.C., secs. 6–13),’’ and insert 

8 ‘‘chapter 93 of title 31, United States Code,’’. 

9 (11) In section 201(b)(5), strike ‘‘section 116 of’’. 

10 (12) In section 202(h)(3), strike ‘‘section 

11 207(c)(1)’’ and insert ‘‘section 207(k)(1)’’. 

12 (13) In section 204(b), strike ‘‘such others pow13 ers’’ and insert ‘‘such other powers’’. 

14 (14) In section 206(e)(3)(D), strike ‘‘and’’ after 

15 the semicolon at the end. 

16 (15) In section 206(f)(1), strike ‘‘subsection 

17 (e)(3)(B)’’ and insert ‘‘subsection (e)(3)’’. 

18 (16) In section 206(g)(7)(D), strike ‘‘and sub19 section (1)’’. 

20 (17) In section 206(t)(2)(B), insert ‘‘regulations’’ 

21 after ‘‘as defined in’’. 

22 (18) In section 206(t)(2)(C), strike ‘‘material af23 fect’’ and insert ‘‘material effect’’. 

24 (19) In section 206(t)(4)(A)(ii)(II), strike ‘‘or’’ 

25 after the semicolon at the end. 
159 

•HR 3505 RH2 

1 (20) In section 206A(a)(2)(A), strike ‘‘regulator 

2 agency’’ and insert ‘‘regulatory agency’’. 

3 (21) In section 207(c)(5)(B)(i)(I), insert ‘‘and’’ 

4 after the semicolon at the end. 

5 (22) In the heading for subparagraph (A) of sec6 tion 207(d)(3), strike ‘‘TO’’ and insert ‘‘WITH’’. 

7 (23) In section 207(f)(3)(A), strike ‘‘category or 

8 claimants’’ and insert ‘‘category of claimants’’. 

9 (24) In section 209(a)(8), strike the period at the 

10 end and insert a semicolon. 

11 (25) In section 216(n), insert ‘‘any action’’ be12 fore ‘‘that is required’’. 

13 (26) In section 304(b)(3), strike ‘‘the affairs or 

14 such credit union’’ and insert ‘‘the affairs of such 

15 credit union’’. 

16 (27) In section 310, strike ‘‘section 102(e)’’ and 

17 insert ‘‘section 102(d)’’. 

18 SEC. 803. OTHER TECHNICAL CORRECTIONS. 

19 (a) Section 1306 of title 18, United States Code, is 

20 amended by striking ‘‘5136A’’ and inserting ‘‘5136B’’. 

21 (b) Section 5239 of the Revised Statutes of the United 

22 States (12 U.S.C. 93) is amended by redesignating the sec23 ond of the 2 subsections designated as subsection (d) (as 

24 added by section 331(b)(3) of the Riegle Community Devel-
160 

•HR 3505 RH2 

1 opment and Regulatory Improvement Act of 1994) as sub2 section (e). 

3 SEC. 804. REPEAL OF OBSOLETE PROVISIONS OF THE BANK 

4 HOLDING COMPANY ACT OF 1956. 

5 (a) IN GENERAL.—Section 2 of the Bank Holding 

6 Company Act of 1956 (12 U.S.C. 1841) is amended— 

7 (1) in subsection (c)(2), by striking subpara8 graphs (I) and (J); and 

9 (2) by striking subsection (m) and inserting the 

10 following new subsection: 

11 ‘‘(m) [Repealed]’’. 

12 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

13 Paragraphs (1) and (2) of section 4(h) of the Bank Holding 

14 Company Act of 1956 (12 U.S.C. 1843(h)) are each amend15 ed by striking ‘‘(G), (H), (I), or (J) of section 2(c)(2)’’ and 

16 inserting ‘‘(G), or (H) of section 2(c)(2)’’. 

17 TITLE IX—FAIR DEBT COLLEC18 TION PRACTICES ACT AMEND19 MENTS 

20 SEC. 901. EXCEPTION FOR CERTAIN BAD CHECK ENFORCE21 MENT PROGRAMS. 

22 (a) IN GENERAL.—The Fair Debt Collection Practices 

23 Act (15 U.S.C. 1692 et seq.) is amended— 

24 (1) by redesignating section 818 as section 819; 

25 and 
161 

•HR 3505 RH2 

1 (2) by inserting after section 817 the following 

2 new section: 

3 ‘‘§ 818. Exception for certain bad check enforcement 

4 programs operated by private entities 

5 ‘‘(a) IN GENERAL.—If— 

6 ‘‘(1) a State or district attorney establishes, 

7 within the jurisdiction of such State or district attor8 ney and with respect to alleged bad check violations 

9 that do not involve a check described in subsection (c), 

10 a pretrial diversion program for alleged bad check of11 fenders who agree to participate voluntarily in such 

12 program to avoid criminal prosecution and are not 

13 described in subsection (b); 

14 ‘‘(2) a private entity, that is subject to an ad15 ministrative support services contract with a State or 

16 district attorney and operates under the direction, su17 pervision and control of such State or district attor18 ney, operates the pretrial diversion program described 

19 in paragraph (1); and 

20 ‘‘(3) in the course of performing duties delegated 

21 to it by a State or district attorney under the con22 tract, the private entity referred to in paragraph 

23 (2)— 

24 ‘‘(A) complies with the penal laws of the 

25 State; 
162 

•HR 3505 RH2 

1 ‘‘(B) conforms with the terms of the contract 

2 and directives of the State or district attorney; 

3 ‘‘(C) does not exercise independent prosecu4 torial discretion; 

5 ‘‘(D) contacts any alleged offender referred 

6 to in paragraph (1) for purposes of participating 

7 in a program referred to in such paragraph 

8 only— 

9 ‘‘(i) as a result of any determination 

10 by the State or district attorney that suffi11 cient evidence of a bad check violation 

12 under State law exists and that contact 

13 with the alleged offender for purposes of 

14 participation in the program is appro15 priate; or 

16 ‘‘(ii) as otherwise permitted in re17 sponse to evidence of a bad check; 

18 ‘‘(E) includes as part of an initial written 

19 communication with an alleged offender a clear 

20 and conspicuous statement that— 

21 ‘‘(i) the alleged offender may dispute 

22 the validity of any alleged bad check viola23 tion through a procedure established and su24 pervised by the State or district attorney, 
163 

•HR 3505 RH2 

1 together with an explanation of how such a 

2 dispute may be initiated; and 

3 ‘‘(ii) where the alleged offender knows, 

4 or has reasonable cause to believe, that the 

5 alleged bad check violation is the result of 

6 theft or forgery of the check, identity theft, 

7 or other fraud that is not the result of the 

8 alleged offender’s conduct, the alleged of9 fender may file a crime report with the ap10 propriate law enforcement agency and have 

11 further contacts or restitution efforts sus12 pended until the question of the theft or for13 gery of the check, identity theft, or other 

14 fraud has been resolved, together with clear 

15 instructions on how to file such crime re16 port; and 

17 ‘‘(F) charges only fees in connection with 

18 services under the contract that— 

19 ‘‘(i) have been authorized by the con20 tract with the State or district attorney; 

21 and 

22 ‘‘(ii) conform with the schedule of rea23 sonable charges for such services which shall 

24 be established by the National District At25 torney’s Association, after consultation with 
164 

•HR 3505 RH2 

1 the Commission and representatives of in2 terested business and consumer organiza3 tions, 

4 the private entity shall be treated as an officer of the State 

5 and excluded from the definition of debt collector, pursuant 

6 to the exception provided in section 803(6)(C), with respect 

7 to the entity’s operation of the program described in para8 graph (1) under the contract described in paragraph (2). 

9 ‘‘(b) CERTAIN OFFENDERS EXCLUDED.—An alleged 

10 bad check offender is described in this subsection if a private 

11 entity described in subsection (a)(2) can determine from 

12 available records that such offender— 

13 ‘‘(1) was convicted of a bad check offense in the 

14 3 years prior to issuing the bad check under consider15 ation; or 

16 ‘‘(2) participated in a pretrial diversion pro17 gram in the 18 months prior to issuing the bad check 

18 under consideration. 

19 ‘‘(c) CERTAIN CHECKS EXCLUDED.—A check is de20 scribed in this subsection if the check involves, or is subse21 quently found to involve— 

22 ‘‘(1) a postdated check presented in connection 

23 with a payday loan, or other similar transaction, 

24 where the holder of the check knew that the issuer had 
165 

•HR 3505 RH2 

1 insufficient funds at the time the check was made, 

2 drawn or delivered; 

3 ‘‘(2) a stop payment order where the issuer acted 

4 in good faith and with reasonable cause in stopping 

5 payment on the check; 

6 ‘‘(3) a check dishonored because of an adjustment 

7 to the issuer’s account by the financial institution 

8 holding such account without providing notice to the 

9 person at the time the check was made, drawn or de10 livered; 

11 ‘‘(4) a check for partial payment of a debt where 

12 the holder had previously accepted partial payment 

13 for such debt; 

14 ‘‘(5) a check issued by a person who was not 

15 competent, or was not of legal age, to enter into a 

16 legal contractual obligation at the time the check was 

17 made, drawn or delivered; or 

18 ‘‘(6) a check issued to pay an obligation arising 

19 from a transaction that was illegal in the jurisdiction 

20 of the State or district attorney at the time the check 

21 was made, drawn or delivered. 

22 ‘‘(d) DEFINITIONS.—For purposes of this section, the 

23 following definitions shall apply: 

24 ‘‘(1) STATE OR DISTRICT ATTORNEY.—The term 

25 ‘State or district attorney’ means the chief elected or 
166 

•HR 3505 RH2 

1 appointed prosecuting attorney in a district, county 

2 (as defined in section 2 of title 1, United States 

3 Code), municipality, or comparable jurisdiction, in4 cluding State attorneys general who act as chief elect5 ed or appointed prosecuting attorneys in a district, 

6 county (as so defined), municipality or comparable 

7 jurisdiction, who may be referred to by a variety of 

8 titles such as district attorneys, prosecuting attorneys, 

9 commonwealth’s attorneys, solicitors, county attor10 neys, and state’s attorneys, and who are responsible 

11 for the prosecution of State crimes and violations of 

12 jurisdiction-specific local ordinances. 

13 ‘‘(2) CHECK.—The term ‘check’ has the same 

14 meaning as in section 3(6) of the Check Clearing for 

15 the 21st Century Act. 

16 ‘‘(3) BAD CHECK.—The term ‘bad check’ means 

17 any check that— 

18 ‘‘(A) the issuer knew, or should have known, 

19 would not be paid upon presentment because the 

20 issuer— 

21 ‘‘(i) had no account with the drawee fi22 nancial institution at the time the check 

23 was made, drawn, or delivered; 

24 ‘‘(ii) had closed the account upon with 

25 the check was made or drawn prior to the 
167 

•HR 3505 RH2 

1 time the check was made, drawn, or deliv2 ered; or 

3 ‘‘(iii) used a false or altered check, or 

4 false or altered check account number; or 

5 ‘‘(B) was refused payment by the financial 

6 institution or other drawee for lack of sufficient 

7 funds and the issuer failed to pay the full 

8 amount of the check, together with reasonable 

9 costs as permitted by State law— 

10 ‘‘(i) after receiving written notice from 

11 the holder of the check that payment was re12 fused by the drawee financial institution to 

13 the extent that the timing and mode of de14 livery of such written notice is in compli15 ance with the applicable State law for de16 termining criminal liability for bad check 

17 offenses; or 

18 ‘‘(ii) in a case in which there are no 

19 applicable State law requirements as de20 scribed in clause (i), within 30 days of re21 ceiving written notice, mailed to the issuer 

22 by certified mail to the address printed on 

23 the check, or given at the time the check was 

24 made, drawn or delivered or, otherwise, at 

25 the address where the alleged offender re-
168 

•HR 3505 RH2 

1 sides or is found, from the holder of the 

2 check that payment of 1 or more checks was 

3 refused by the drawee financial institu4 tion.’’. 

5 (b) CLERICAL AMENDMENT.—The table of sections for 

6 the Fair Debt Collection Practices Act is amended— 

7 (1) by redesignating the item relating to section 

8 818 as section 819; and 

9 (2) by inserting after the item relating to section 

10 817 the following new item: 

‘‘818. Exception for certain bad check enforcement programs operated by private 

entities.’’. 

11 SEC. 902. OTHER AMENDMENTS. 

12 (a) LEGAL PLEADINGS.—Section 809 of the Fair Debt 

13 Collection Practices Act (15 U.S.C. 1692g) is amended by 

14 adding at the end the following new subsection: 

15 ‘‘(d) LEGAL PLEADINGS.—A communication in the 

16 form of a formal pleading in a civil action shall not be 

17 treated as an initial communication for purposes of sub18 section (a).’’. 

19 (b) NOTICE PROVISIONS.—Section 809 of the Fair 

20 Debt Collection Practices Act (15 U.S.C. 1692g) is amended 

21 by adding after subsection (d) (as added by subsection (a) 

22 of this section) the following new subsection: 

23 ‘‘(e) NOTICE PROVISIONS.—The sending or delivery of 

24 any form or notice which does not request the payment of 
169 

•HR 3505 RH2 

1 a debt and is expressly required by any other Federal or 

2 State law or regulation, including the Internal Revenue 

3 Code of 1986, title V of Gramm-Leach-Bliley Act, and any 

4 data security breach notice and privacy law shall not be 

5 treated as a communication in connection with debt collec6 tion. ’’. 

7 (c) ESTABLISHMENT OF RIGHT TO COLLECT WITHIN

8 THE FIRST 30 DAYS.—Section 809(b) of the Fair Debt Col9 lection Practices Act (15 U.S.C. 1692g(b)) is amended by 

10 striking ‘‘If the consumer’’ and inserting ‘‘Collection activi11 ties and communications may continue during any 30-day 

12 period referred to in subsection (a). However, if the con13 sumer’’. 
Union Calendar No. 206 

109TH CONGRESS 

2D SESSION H. R. 3505 

[Report No. 109–356, Parts I and II] 

A BILL 

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

FEBRUARY 16, 2006 

Reported from the Committee on the Judiciary with an 

printed House on the State of the Union, and ordered to be amendment, committed to the Committee of the Whole