I

104TH CONGRESS

1ST SESSION H. R. 1362

To reduce paperwork and additional regulatory burdens for depository

institutions.

IN THE HOUSE OF REPRESENTATIVES

MARCH 30, 1995

Mr. BEREUTER (for himself, Mr. LEACH, Mr. MCCOLLUM, Mrs. ROUKEMA,

Mr. ROTH, Mr. BAKER of Louisiana, Mr. LAZIO of New York, Mr.

BACHUS, Mr. ROYCE, Mr. WELLER, Mr. KING, Mr. BONO, Mr. EHRLICH,

Mr. CHRYSLER, Mr. CREMEANS, Mr. WATTS of Oklahoma, Mrs. KELLY,

Mr. BARRETT of Nebraska, Mr. ORTON, Mr. CASTLE, Mr. HEINEMAN,

Mr. LATHAM, Mr. CHRISTENSEN, and Mr. FOX of Pennsylvania) introduced the following bill; which was referred to the Committee on Banking

and Financial Services

A BILL

To reduce paperwork and additional regulatory burdens for

depository institutions.

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

5 ‘‘Financial Institutions Regulatory Relief Act of 1995’’.

6 (b) TABLE OF CONTENTS.—

Sec. 1. Short title; Table of contents.

TITLE I—REDUCTIONS IN GOVERNMENT OVERREGULATION
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Subtitle A—The Home Mortgage Process

Sec. 101. Transfer of RESPA regulatory authority; elimination of redundant

regulators.

Sec. 102. Truth in Lending Act and RESPA comparability.

Sec. 103. Increased regulatory flexibility under the Truth in Lending Act.

Sec. 104. Reductions in RESPA regulatory burdens; clarifying amendments.

Sec. 105. Alternative disclosures for adjustable rate mortgages.

Sec. 106. Treatment of certain charges.

Sec. 107. Exemption from rescission.

Sec. 108. Tolerance; basis of disclosures.

Sec. 109. Limitation on liability.

Sec. 110. Applicability.

Sec. 111. Limitation on rescission period.

Sec. 112. Calculation of actual damages.

Sec. 113. Assignee liability.

Sec. 114. Recovery of fees.

Sec. 115. Homeownership debt counseling notification.

Sec. 116. Home Mortgage Disclosure Act.

Subtitle B—Community Reinvestment Act Amendments

Sec. 121. Expression of congressional intent.

Sec. 122. Community Reinvestment Act exemption.

Sec. 123. Self-certification of CRA compliance.

Sec. 124. Community input and conclusive rating.

Sec. 125. Special purpose banks.

Sec. 126. Increased incentives to lending to low- and moderate-income communities.

Sec. 127. Prohibition on additional reporting under CRA.

Sec. 128. Technical amendment.

Sec. 129. Duplicative reporting.

Subtitle C—Consumer Banking Reforms

Sec. 131. Truth in savings.

Sec. 132. Unauthorized electronic fund transfers.

Sec. 133. Liability for unauthorized use of credit cards.

Sec. 134. Information sharing.

Sec. 135. Electronic Funds Transfer Act clarification.

Subtitle D—Equal Credit Opportunity Act Amendments

Sec. 141. Short title.

Sec. 142. Findings and purpose.

Sec. 143. Equal Credit Opportunity Act amendments.

Sec. 144. Fair Credit Reporting Act amendments.

Sec. 145. Incentives for self-testing.

Sec. 146. Credit scoring systems.

Sec. 147. Effective date.

Subtitle E—Consumer Leasing Act Amendments

Sec. 151. Short title.

Sec. 152. Congressional findings and declaration of purpose.

Sec. 153. Regulations.

Sec. 154. Segregated leasing disclosures.
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Sec. 155. Consumer lease advertising.

Subtitle F—Federal Home Loan Bank Amendments

Sec. 161. Application for membership in the FHLB system.

Sec. 162. Federal Home Loan Bank external auditors.

TITLE II—STREAMLINING GOVERNMENT REGULATIONS

Subtitle A—Regulatory Approval Issues

Sec. 201. Streamlined nonbanking acquisitions by well capitalized and well

managed banking organizations.

Sec. 202. Streamlined bank acquisitions by well capitalized and well managed

banking organizations.

Sec. 203. Eliminate bank merger act filing and approval requirements for insured depository institutions already controlled by the same

holding company.

Sec. 204. Eliminate redundant approval requirement for Oakar transactions.

Sec. 205. Eliminate duplicative requirements imposed on bank holding companies under the Home Owners’ Loan Act.

Sec. 206. Eliminate requirement that approval be obtained for divestitures.

Sec. 207. Eliminate unnecessary branch applications.

Sec. 208. Eliminate branch applications/requirements for ATMs and similar facilities.

Sec. 209. Eliminate requirement for approval of investments in bank premises

for well capitalized and well managed banks.

Sec. 210. Eliminate unnecessary filing for officer and director appointments.

Sec. 211. Streamlining process for determining new nonbanking activities.

Subtitle B—Streamlining of Government Regulations; Miscellaneous Provisions

Sec. 221. Eliminate the per-branch capital requirement for national banks and

State member banks.

Sec. 222. Branch closures.

Sec. 223. Amendments to the Depository Institutions Management Interlocks

Act.

Sec. 224. Consolidation of appraisal subcommittee.

Sec. 225. Eliminate unnecessary and duplicative recordkeeping and reporting

requirements relating to loans to executive officers and permit

participation in employee benefit plans.

Sec. 226. Expanded regulatory discretion for small bank examinations.

Sec. 227. Cost reimbursement.

Sec. 228. Identification of nonbank financial institution customers.

Sec. 229. Paperwork reduction review.

Sec. 230. Repeal of unnecessary reporting requirements.

Sec. 231. Daily confirmations for hold-in-custody repurchase transactions.

Sec. 232. Required regulatory review of regulations.

Sec. 233. Country risk requirements.

Sec. 234. Audit costs.

Sec. 235. Due process protections.

Sec. 236. Culpability standards for outside directors.

Sec. 237. Rules on deposit taking.

Sec. 238. Transition period for new regulations.

Sec. 239. Foreign bank applications.

Sec. 240. Duplicate examination of foreign banks.

Sec. 241. Second mortgages.
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TITLE III—LENDER LIABILITY

Sec. 301. Lender Liability.

1 TITLE I—REDUCTIONS IN GOVERNMENT

2 OVERREGULATION

3 Subtitle A—The Home Mortgage Process

4 SEC. 101. TRANSFER OF RESPA REGULATORY AUTHORITY;

5 ELIMINATION OF REDUNDANT REGULATORS.

6 (a) TRANSFER OF AUTHORITY.—The Real Estate

7 Settlement Procedures Act (12 U.S.C. 2601 et seq) is

8 amended—

9 (1) by striking ‘‘Secretary’’ each time it ap10 pears and inserting ‘‘Board’’, except in sections

11 3(1)(B)(ii), 3(6) and Section 14 (12 U.S.C.

12 2602(1)(B)(ii), 2602(6) and 2612, respectively); and

13 (2) in section 3 by adding at the end thereof a

14 new paragraph (9) as follows:

15 ‘‘(9) the term ‘Board’ means the Board of Gov16 ernors of the Federal Reserve System.’’.

17 (b) ELIMINATION OF REDUNDANT REGULATORS.—

18 The Real Estate Settlement Procedures Act (12 U.S.C.

19 2601 et seq.)) is amended—

20 (1) in section 19 by striking subsection (a) and

21 inserting in lieu thereof the following:

22 ‘‘(a) The Board shall prescribe regulations to carry

23 out the purpose of this title. These regulations may con24 tain such classifications, differentiations, or other provi-
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1 sions, and may provide for such adjustments and excep2 tions for any class of transactions, as in the judgment of

3 the Board are necessary or proper to effectuate the pur4 poses of this title, to prevent circumvention or evasion

5 thereof, or to facilitate compliance therewith. Such regula6 tions shall minimize the burdens and cost imposed upon

7 creditors and shall ensure that costs, burdens, and com8 plexities to consumers are reduced.’’; and

9 (2) by inserting after section 19 of the Real Es10 tate Settlement Procedures Act (12 U.S.C. 2617)

11 the following:

12 ‘‘SEC. 20. ADMINISTRATIVE ENFORCEMENT.

13 ‘‘(a) Compliance with the requirements imposed

14 under this subtitle shall be enforced under—

15 ‘‘(1) section 8 of the Federal Deposit Insurance

16 Act, in the case of—

17 ‘‘(A) national banks, and Federal branches

18 and Federal agencies of foreign banks, by the

19 Office of the Comptroller of the Currency;

20 ‘‘(B) member banks of the Federal Reserve

21 System (other than national banks), branches

22 and agencies of foreign banks (other than Fed23 eral branches, Federal agencies, and insured

24 State branches of foreign banks), commercial

25 lending companies owned or controlled by for-
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1 eign banks, and organizations operating under

2 section 25 and 25A of the Federal Reserve Act,

3 by the Board; and

4 ‘‘(C) banks insured by the Federal Deposit

5 Insurance Corporation (other than members of

6 the Federal Reserve System) and insured State

7 branches of foreign banks, by the Board of Di8 rectors of the Federal Deposit Insurance Cor9 poration;

10 ‘‘(2) section 8 of the Federal Deposit Insurance

11 Act, by the Director of the Office of Thrift Super12 vision, in the case of a savings association the depos13 its of which are insured by the Federal Deposit In14 surance Corporation;

15 ‘‘(3) the Federal Credit Union Act, by the Ad16 ministrator of the National Credit Union Adminis17 tration with respect to any Federal credit union;

18 ‘‘(4) the Packers and Stockyards Act of 1921

19 (except as provided in section 406 of that Act), by

20 the Secretary of Agriculture with respect to any ac21 tivities subject to that Act; and

22 ‘‘(5) The Farm Credit Act of 1971, by the

23 Farm Credit Administration with respect to any

24 Federal land bank, Federal land bank association,
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1 Federal intermediate credit bank, or production

2 credit association.

3 The terms used in paragraph (1) that are not defined in

4 this title or otherwise defined in section 3(s) of the Federal

5 Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the

6 meaning given to them in section 1(b) of the International

7 Banking Act of 1978 (12 U.S.C. 3101).

8 ‘‘(b) For the purpose of the exercise by any agency

9 referred to in subsection (a) of its powers under any Act

10 referred to in that subsection, a violation of any require11 ment imposed under this title shall be deemed to be a vio12 lation of a requirement imposed under that Act. In addi13 tion to its powers under any provision of law specifically

14 referred to in subsection (a), each of the agencies referred

15 to in that subsection may exercise, for the purpose of en16 forcing compliance with any requirement imposed under

17 this title, any other authority conferred on it by law.

18 ‘‘(c) Except to the extent that the enforcement of the

19 requirements imposed under this title is specifically com20 mitted to some other Government agency under subsection

21 (a), the Federal Trade Commission shall enforce such re22 quirements. For the purpose of the exercise by the Federal

23 Trade Commission of its functions and powers under the

24 Federal Trade Commission Act, a violation of any require25 ment imposed under this title shall be deemed a violation
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1 of a requirement imposed under that Act. All of the func2 tions and powers of the Federal Trade Commission under

3 the Federal Trade Commission Act are available to the

4 Commission to enforce compliance by any person with the

5 requirements imposed under this title, irrespective of

6 whether that person is engaged in commerce or meets any

7 other jurisdictional tests in the Federal Trade Commission

8 Act.’’.

9 SEC. 102. TRUTH IN LENDING AND RESPA COMPARABILITY.

10 (a) Section 102 of the Truth in Lending Act (15

11 U.S.C. 1601) is amended by adding a new subsection (c)

12 as follows:

13 ‘‘(c) The Congress also finds that the disclosure and

14 other requirements related to consumer credit have be15 come overly costly, burdensome, and complex to consum16 ers and to creditors. It is also the purpose of this title

17 to reduce the complexity of the disclosure requirements for

18 creditors and consumers by directing the Board to reduce

19 the complexity and difficulty of understanding, preparing

20 and providing disclosures for credit transactions. Improve21 ments in the disclosures and timing of disclosures should

22 serve the dual purpose of reducing compliance errors and

23 increasing the ability of consumers to understand and use

24 the information provided in the disclosures. Clarifications

25 should include the development of uniform terms to de-
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1 scribe credit costs and uniform formats to arrange and

2 provide the information both under this Act and other

3 Acts affecting the consumer credit process.’’.

4 (b) Section 105 of the Truth in Lending Act (15

5 U.S.C. 1604) is amended by inserting a new subsection

6 (e) as follows:

7 ‘‘(e) The Board shall by regulation eliminate, modify,

8 or simplify any disclosure required by this title, including

9 the content and timing of the disclosure, where such action

10 will make disclosures and timing of disclosures required

11 by this title uniform with other laws relating to the disclo12 sure of information in connection with credit transactions,

13 including the Real Estate Settlement Procedures Act. No

14 additional disclosure requirements may be added as a re15 sult of this subsection.’’.

16 (c) Section 2 of the Real Estate Procedures Act (12

17 U.S.C. 2602) is amended by adding to the end of sub18 section (a) the following: ‘‘The Congress also finds that

19 the disclosure and other requirements related to consumer

20 credit, including mortgage transactions, have become over21 ly costly, burdensome, and complex to consumers and to

22 creditors and that changes to the required disclosures re23 lated to such credit must be streamlined and reduced in

24 order to eliminate unnecessary cost, burdens, and com25 plexity.’’.
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1 (d) Section 19 of the Real Estate Settlement Proce2 dures Act (12 U.S.C. 2617) (as amended by section 101

3 of this Act) is amended by inserting the following new sub4 section (b) and redesignating the remaining subsections

5 accordingly:

6 ‘‘(b) The Board shall be regulation eliminate, modify,

7 or simplify any disclosure required by this title, including

8 the content and timing of the disclosure, where such action

9 will make disclosures and timing of the disclosures re10 quired by this title uniform with other laws relating to

11 the disclosure of information in connection with credit

12 transactions, including the Truth in Lending Act. No ad13 ditional disclosure requirements may be added as a result

14 of this subsection.’’.

15 SEC. 103. INCREASED REGULATORY FLEXIBILITY UNDER

16 THE TRUTH IN LENDING ACT.

17 (a) REGULATORY FLEXIBILITY.—Section 104 of the

18 Truth in Lending Act (15 U.S.C. 1603) is amended by

19 adding at the end the following new paragraph:

20 ‘‘(7) Transactions for which the Board, by reg21 ulation, determines that coverage under the Act is

22 not needed to carry out the purposes of the Act.’’.

23 (b) EXEMPTIVE AUTHORITY.—Section 105 of the

24 Truth in Lending Act (15 U.S.C. 1604) is amended by
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1 redesignating subsections (b) through (d) as (c) through

2 (e) and inserting a new subsection (b) as follows:

3 ‘‘(b) EXEMPTIVE AUTHORITY.—The Board shall ex4 empt from all or parts of this title any class of trans5 actions for which, in the Board’s judgment, coverage

6 under all or part of this title does not provide a measur7 able benefit to consumers in the form of useful informa8 tion or protection. In determining which classes of trans9 actions to exempt in whole or in part, the Board shall con10 sider, among other factors, the following:

11 ‘‘(1) The amount of the loan or closing costs

12 and whether the disclosures, right of rescission, and

13 other provisions are necessary, particularly for small

14 loans.

15 ‘‘(2) Whether the requirements of this title

16 complicate, hinder, or make more expensive the cred17 it process for the class of transactions.

18 ‘‘(3) The status of the borrower, including, the

19 borrowers’ related financial arrangements, the finan20 cial sophistication of the borrower relative to the

21 type of transaction, and the importance of the credit

22 and related supporting property to the borrower.’’.
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1 SEC. 104. REDUCTIONS IN RESPA REGULATORY BURDENS;

2 CLARIFYING AMENDMENTS.

3 (a) UNNECESSARY DISCLOSURE.—Section 6(a) of the

4 Real Estate Settlement Procedures Act (12 U.S.C. 2605),

5 is amended to read as follows:

6 ‘‘(a) DISCLOSURE TO APPLICANT RELATING TO AS7 SIGNMENT, SALE, OR TRANSFER OF LOAN SERVICING.—

8 ‘‘(1) IN GENERAL.—Each person who makes a

9 federally related mortgage loan shall disclose to each

10 person who applies for any such loan, at the time of

11 application for the loan, whether the servicing of any

12 such loan may be assigned, sold, or transferred to

13 any other person at any time while such loan is out14 standing.

15 ‘‘(2) SIGNATURE OF APPLICANT.—Any disclo16 sure of the information required under paragraph

17 (1) shall not be effective for purposes of this section

18 unless the disclosure is accompanied by a written

19 statement, in such form as the Secretary shall de20 velop before the expiration of the one hundred and

21 eighty-day period beginning on the date of enact22 ment, that the applicant has read and understood

23 the disclosure and that is evidenced by the signature

24 of the applicant at the place where such statement

25 appears in the application.’’.
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1 (b) EFFECTIVE DATE.—This subsection shall become

2 effective one hundred and eighty days after the date of

3 enactment.

4 (c) SECOND MORTGAGES.—Section 3(1)(A) of the

5 Real Estate Settlement Procedures Act (12 U.S.C.

6 2602(1)(A)), is amended by striking ‘‘or subordinate’’.

7 (d) CONSISTENCY OF RESPA AND TRUTH IN LEND8 ING ACT EXEMPTION OF BUSINESS LOANS.—Section 7 of

9 the Real Estate Settlement Procedures Act (12 U.S.C.

10 2606) is amended—

11 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

12 ‘‘This Act’’; and

13 (2) inserting a new subsection (b) as follows:

14 ‘‘(b) INTERPRETATION.—In issuing regulations pur15 suant to section 19(a) of this Act, the Board shall ensure

16 that with regard to subsection (a), the exemption for busi17 ness credit includes all ‘‘business credit’’ exempted from

18 the Truth in Lending Act (15 U.S.C. 1601) as that term

19 has been interpreted by the Board of Governors of the

20 Federal Reserve System in section 226.3(a) of regulation

21 Z (12 C.F.R. 226.3(a)) as in effect on the date of enact22 ment.’’.
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1 SEC. 105. ALTERNATIVE DISCLOSURES FOR ADJUSTABLE

2 RATE MORTGAGES.

3 (a) Section 127A(a)(2)(G) of the Truth in Lending

4 Act (15 U.S.C. 1637a(a)(2)(G)) is amended by inserting

5 before the semicolon ‘‘, or a statement that the monthly

6 payment may increase or decrease significantly due to in7 creases in the annual percentage rate’’.

8 (b) Section 128(a) of the Truth in Lending Act (15

9 U.S.C. 1638(a)) is amended by inserting at the end the

10 following new paragraph (14):

11 ‘‘(14) In any variable rate residential mortgage

12 transaction, at the creditors’ option, a statement

13 that the monthly payment may increase or decrease

14 substantially, or a historical example illustrating the

15 effects of interest rate changes implemented accord16 ing to the loan program.’’.

17 SEC. 106. CERTAIN CHARGES.

18 (a) THIRD PARTY FEES.—Section 106(a) of the

19 Truth in Lending Act (15 U.S.C. 1605(a)) is amended

20 by adding after the second sentence the following new sen21 tence: ‘‘The finance charge shall not include fees and

22 amounts imposed by third parties not affiliated with the

23 creditor (including settlement agents, attorneys, and es24 crow and title companies) if the creditor does not expressly

25 require the imposition of the charges and does not retain

26 the charges.’’.
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1 (b) TAXES ON SECURITY INSTRUMENTS OR EVI2 DENCES OF INDEBTEDNESS.—Section 106(d) of the

3 Truth in Lending Act (15 U.S.C. 1605(d)) is amended

4 by adding at the end the following new paragraph:

5 ‘‘(3) Any tax levied on security instruments or

6 on documents evidencing indebtedness if the pay7 ment of such taxes is a precondition for recording

8 the instrument securing the evidence of indebted9 ness.’’.

10 (c) PREPARATION OF LOAN DOCUMENTS.—Section

11 106(e)(2) of the Truth in Lending Act (15 U.S.C.

12 1605(e)(2)) is amended to read as follows:

13 ‘‘(2) Fees for preparation of loan-related docu14 ments and attending or conducting settlement.’’.

15 (d) FEES RELATING TO PEST INFESTATIONS, IN16 SPECTIONS, AND HAZARDS.—Section 106(e)(5) of the

17 Truth in Lending Act (15 U.S.C. 1605(e)(5)) is amended

18 by inserting ‘‘, including fees related to pest infestations,

19 premises and structural inspections, and flood hazards’’

20 before the period.

21 SEC. 107. EXEMPTIONS FROM RESCISSION.

22 (a) CERTAIN REFINANCING.—Section 125(e) of the

23 Truth in Lending Act (15 U.S.C. 1635(e)) is amended—

24 (1) by striking ‘‘or’’ at the end of paragraph

25 (3);
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1 (2) by striking the period at the end of para2 graph (4) and inserting instead ‘‘; or’’; and

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

4 paragraph:

5 ‘‘(5) a transaction, other than a mortgage re6 ferred to in section 103(aa), which—

7 ‘‘(A) is secured by a first lien, in any

8 amount; and

9 ‘‘(B) constitutes a refinancing or consoli10 dation of an existing extension of credit.’’.

11 (b) TECHNICAL AND CONFORMING AMENDMENT.—

12 Section 125(e)(2) of the Truth in Lending Act (15 U.S.C.

13 1635(e)(2)) is amended by inserting ‘‘, other than a trans14 action described in subsection (e)(5),’’ after ‘‘a refinancing

15 or consolidation (with no new advances).’’.

16 SEC. 108. TOLERANCES; BASIS OF DISCLOSURES.

17 (a) TOLERANCES FOR ACCURACY.—Section 106 of

18 the Truth in Lending Act (15 U.S.C. 1605) is amended

19 by adding at the end the following new subsection:

20 ‘‘(f) TOLERANCES FOR ACCURACY.—In connection

21 with credit transactions not under an open end credit plan

22 that are secured by real property or a dwelling, the disclo23 sure of the finance charge and other disclosures affected

24 by any finance charge shall be treated as being accurate

25 for purposes of this title if the amount disclosed as the
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1 finance charge does not vary from the actual finance

2 charge by more than an amount equal to one-half of the

3 numerical tolerance corresponding to, and generated by,

4 the tolerance provided by section 107(c) with respect to

5 the annual percentage rate.’’.

6 (b) BASIS OF DISCLOSURE FOR PER DIEM INTER7 EST.—Section 121(c) of the Truth in Lending Act (15

8 U.S.C. 1631(c)) is amended by adding at the end the fol9 lowing new sentence: ‘‘In the case of any consumer credit

10 transaction a portion of the interest on which is deter11 mined on a per diem basis and is to be collected upon

12 the consummation of such transaction, any disclosure with

13 respect to such portion of interest shall be deemed to be

14 accurate for purposes of this title if the disclosure is based

15 on information actually known to the creditor at the time

16 that the disclosure documents are being prepared for the

17 consummation of the transaction.’’.

18 SEC. 109. LIMITATION ON LIABILITY.

19 (a) IN GENERAL.—Chapter 2 of the Truth in Lend20 ing Act (15 U.S.C. 1631 et seq.) is amended by adding

21 at the end the following new section:

22 ‘‘SEC. 139. CERTAIN LIMITATIONS ON LIABILITY.

23 ‘‘(a) LIMITATIONS ON LIABILITY FOR DISCLOSURES

24 RELATING TO CERTAIN FEES AND CHARGES OTHER

25 THAN FINANCE CHARGES.—
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1 ‘‘(1) IN GENERAL.—For transactions con2 summated before the date of the enactment of the

3 Financial Institutions Regulatory Relief Act of

4 1995, a creditor or any assignee of a creditor shall

5 have no civil, administrative, or criminal liability

6 under this title for, and a consumer shall have no

7 extended rescission rights under section 125(f) with

8 respect to, the creditor’s treatment, for disclosure

9 purposes, of—

10 ‘‘(A) taxes described in section 106(d)(3);

11 ‘‘(B) fees and amounts described in section

12 106(e) (2) and (5) and third party fees and

13 amounts described in section 106(a); and

14 ‘‘(C) delivery charges imposed by a credi15 tor.

16 ‘‘(2) EXCEPTIONS.—Subsection (a) shall not

17 apply to—

18 ‘‘(A) any individual action or counterclaim

19 brought under this title—

20 ‘‘(i) which was filed before October 1,

21 1994; and

22 ‘‘(ii) the pleadings in which (as filed

23 before such date) allege improper disclo24 sure of charges described in paragraph (1),

25 (2), or (3) of subsection (a);
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1 ‘‘(B) any class action brought under this

2 title—

3 ‘‘(i) for which a class was certified be4 fore October 1, 1994; and

5 ‘‘(ii) the pleadings in which (as filed

6 before such date) allege improper disclo7 sure of charges described in paragraph (1),

8 (2), or (3) of subsection (a);

9 ‘‘(C) the named individual plaintiffs in any

10 class action brought under this title—

11 ‘‘(i) which was filed before October 1,

12 1994; and

13 ‘‘(ii) the pleadings in which (as filed

14 before such date) allege improper disclo15 sure of charges described in paragraph (1),

16 (2), or (3) of subsection (a); or

17 ‘‘(D) any consumer credit transaction with

18 respect to which a timely notice of rescission

19 was sent to the creditor before October 1, 1994.

20 ‘‘(b) EXEMPTION FROM LIABILITY FOR FINANCE

21 CHARGE DISCLOSURES WITHIN TOLERANCE LIMITS.—

22 ‘‘(1) IN GENERAL.—In the case of any

23 consumer credit transaction subject to this title, in24 cluding a transaction consummated before the date

25 of the enactment of the Financial Institutions Regu-
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1 latory Relief Act of 1995, no creditor or assignee

2 with respect to such transaction shall have any civil,

3 administrative, or criminal liability under this title

4 for, and no consumer shall have extended rescission

5 rights under section 125 by reason of, any disclosure

6 relating to the finance charge imposed with respect

7 to such transaction if the amount or percentage ac8 tually disclosed—

9 ‘‘(A) may be treated as accurate pursuant

10 to section 106(f), or

11 ‘‘(B) is greater than the amount or per12 centage required to be disclosed under this title.

13 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

14 apply to—

15 ‘‘(A) any individual action or counterclaim

16 brought under this title which was filed before

17 October 1, 1994;

18 ‘‘(B) any class action brought under this

19 title for which a class was certified before Octo20 ber 1, 1994;

21 ‘‘(C) the named individual plaintiffs in any

22 class action brought under this title which was

23 filed before October 1, 1994; or

24 ‘‘(D) any consumer credit transaction with

25 respect to which a timely notice of rescission
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1 was sent to the creditor before October 1,

2 1994.’’.

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

4 for chapter 2 of the Truth in Lending Act is amended

5 by inserting after the item relating to section 138 the fol6 lowing new item:

‘‘Sec. 139. Certain limitations on liability.’’.

7 SEC. 110. APPLICABILITY.

8 Except as otherwise provided in section 109, the

9 amendments made by sections 106, 107, 108, 109, 110,

10 111, 112, and 113 shall apply to all consumer credit trans11 actions consummated on or after the date of enactment

12 of this Act, except that the amendments made by sub13 sections (a) and (b) of section 107 shall apply to all exten14 sions of credit with respect to which rescission rights have

15 not been asserted as of January 1, 1995.

16 SEC. 111. LIMITATION ON RESCISSION PERIOD.

17 Section 125(f) of the Truth in Lending Act (15

18 U.S.C. 1635(f)) is amended by adding at the end the fol19 lowing sentences: ‘‘The expiration of the right of rescission

20 pursuant to this subsection shall be absolute and no

21 consumer may assert rescission, affirmatively or as a de22 fense, in any action in any State or Federal court after

23 the earlier of the end of the three-year period beginning

24 on the date of the consummation of the transaction or the

25 sale of the property securing the loan or other extension
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1 of credit, except as otherwise provided in the preceding

2 sentence. This subsection shall supersede any State law

3 which is inconsistent with any provision of this sub4 section.’’.

5 SEC. 112. CALCULATION OF ACTUAL DAMAGES.

6 Paragraph (1) of section 130(a) of the Truth in

7 Lending Act (15 U.S.C. 1640(a)) is amended to read as

8 follows:

9 ‘‘(1) Any actual damages sustained by such

10 person as a result of the failure (to the extent the

11 person demonstrates reliance on the inaccurate dis12 closure which prevented the person from accepting

13 better credit terms actually available to the person

14 from another creditor) and the amount of such dam15 ages shall be the difference between the finance

16 charges actually paid and the finance charges that

17 would have been paid over the same period under

18 credit terms applicable with respect to credit actu19 ally available to the person from another creditor.’’.

20 SEC. 113. ASSIGNEE LIABILITY.

21 (a) VIOLATIONS APPARENT ON THE FACE OF TRANS22 ACTION DOCUMENTS.—Section 131(a) of the Truth in

23 Lending Act (15 U.S.C. 1641(a)) is amended to read as

24 follows:
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1 ‘‘(a) LIABILITY OF ASSIGNEE FOR APPARENT VIOLA2 TIONS.—

3 ‘‘(1) IN GENERAL.—Except as otherwise specifi4 cally provided in this title, any civil action against

5 a creditor for a violation of this title, and any pro6 ceeding under section 108 against a creditor, with

7 respect to a consumer credit transaction may be

8 maintained against any assignee of such creditor

9 only if—

10 ‘‘(A) the violation for which such action or

11 proceeding is brought is apparent on the face of

12 the disclosure statement provided in connection

13 with such transaction pursuant to this title; and

14 ‘‘(B) the assignment to the assignee was

15 voluntary.

16 ‘‘(2) VIOLATION APPARENT ON THE FACE OF

17 THE DISCLOSURE DESCRIBED.—For the purpose of

18 this section, a violation is apparent on the face of

19 the disclosure statement if—

20 ‘‘(A) the disclosure can be determined to

21 be incomplete or inaccurate from the face of the

22 disclosure statement; or

23 ‘‘(B) the disclosure does not use the terms

24 or format required to be used by this title.’’.
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1 (b) SERVICER NOT TREATED AS ASSIGNEE.—Section

2 131 of the Truth in Lending Act (15 U.S.C. 1641) is

3 amended by adding at the end the following new sub4 section:

5 ‘‘(d) TREATMENT OF SERVICER.—

6 ‘‘(1) IN GENERAL.—A servicer of a consumer

7 obligation arising from a consumer credit trans8 action shall not be treated as an assignee of such ob9 ligation for purposes of this section unless the

10 servicer is the owner of the obligation.

11 ‘‘(2) SERVICER NOT TREATED AS OWNER ON

12 BASIS OF ASSIGNMENT FOR ADMINISTRATIVE CON13 VENIENCE.—A servicer of a consumer obligation

14 arising from a consumer credit transaction shall not

15 be treated as the owner of the obligation for pur16 poses of this section on the basis of an assignment

17 of the obligation from the creditor or another as18 signee to the servicer solely for the administrative

19 convenience of the servicer in servicing the obliga20 tion.

21 ‘‘(3) SERVICER DEFINED.—For purposes of this

22 subsection, the term ‘servicer’ has the same meaning

23 as in section 6(i)(2) of the Real Estate Settlement

24 Procedures Act of 1974.’’.
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1 SEC. 114. RECOVERY OF FEES.

2 Section 125(b) of the Truth in Lending Act (15

3 U.S.C. 1635) is amended—

4 (1) in the first sentence, by inserting ‘‘, except

5 any charge for a appraisal report or credit report’’

6 after ‘‘other charge’’; and

7 (2) in the second sentence, by striking ‘‘other8 wise’’ and inserting ‘‘as otherwise required under

9 this subsection’’.

10 SEC. 115. HOMEOWNERSHIP DEBT COUNSELING NOTIFICA11 TION.

12 Section 106(c)(5) of the Housing and Urban Devel13 opment Act of 1968 (12 U.S.C. 1701x(c)(5)) is repealed.

14 SEC. 116. HOME MORTGAGE DISCLOSURE ACT.

15 (a) Section 309 of the Home Mortgage Disclosure

16 Act of 1975 (12 U.S.C. 2808) is amended—

17 (1) in the second sentence, by striking

18 ‘‘$10,000,000’’ and inserting ‘‘$50,000,000’’; and,

19 (2) by inserting at the end the following new

20 sentence: ‘‘The Board may also, by regulation, ex21 empt from the provisions of this Act institutions

22 specified in section 303(2)(A) which have total as23 sets as of their last full fiscal year of $50,000,000

24 or greater where the burden of complying with this

25 Act on such institutions outweighs the usefulness of

26 the information required to be disclosed. The exemp-
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1 tions provided under this section shall not be appli2 cable to an institution which the Board, by order,

3 has found a reasonable basis to believe is not fulfill4 ing its obligations to serve the housing needs of the

5 communities and neighborhoods in which it located.

6 An institution subject to such an order shall be re7 quired to comply with the requirements of this Act

8 for loans made after the time that the order is is9 sued at such time and for such period as the Board

10 deems appropriate. The dollar amount in this section

11 shall be adjusted annually after December 31, 1994,

12 by the annual percentage increase in the Consumer

13 Price Index for Urban Wage Earners and Clerical

14 Workers published by the Bureau of Labor Statis15 tics.’’.

16 (b) Section 304 of the Home Mortgage Disclosure

17 Act of 1975 (12 U.S.C. 2803) is amended by adding the

18 following new subsection (m) at the end as follows:

19 ‘‘(m) OPPORTUNITY TO REDUCE COMPLIANCE BUR20 DEN.—

21 ‘‘(1) A depository institution will have satisfied

22 the public availability requirements of subsection (a)

23 if such institution keeps the information required

24 under that subsection at its home office and provides

25 notice at the branch locations specified in such sub-
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1 section that such information is available upon re2 quest from the home office of the institution. A

3 home office of the depository institution receiving a

4 request for such information pursuant to this sub5 section shall provide the information pertinent to the

6 location of the branch in question within fifteen days

7 of the receipt of the written request.

8 ‘‘(2) In complying with paragraph (1), a deposi9 tory institution may provide the individual request10 ing such information, at the institution’s choice,

11 with—

12 ‘‘(A) a paper copy of the information re13 quested; or

14 ‘‘(B) if acceptable to the individual, the in15 formation via a form of electronic medium, such

16 as computer disc.’’.

17 Subtitle B—Community Reinvestment Act

18 Amendments

19 SEC. 121. EXPRESSION OF CONGRESSIONAL INTENT.

20 Subsection (b) of section 802 of the Community Rein21 vestment Act of 1977 (12 U.S.C. 2901) is amended to

22 read as follows:

23 ‘‘(b) It is the purpose of this title to require each ap24 propriate Federal financial supervisory agency to use its

25 authority, when examining financial institutions, to en-
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1 courage such institutions to help meet the credit needs of

2 the local communities in which they are chartered consist3 ent with the safe and sound operation of such institutions.

4 When examining financial institutions, a supervisory agen5 cy shall not impose additional burden, recordkeeping, or

6 reporting upon such institutions.’’.

7 SEC. 122. COMMUNITY REINVESTMENT ACT EXEMPTION.

8 The Community Reinvestment Act of 1977 (12

9 U.S.C. 2901 et seq.) is amended by adding at the end

10 the following new section:

11 ‘‘SEC. 808. EXAMINATION EXEMPTION.

12 ‘‘A regulated financial institution shall not be subject

13 to the examination requirements of this title or any regula14 tions issued hereunder if—

15 ‘‘(1) the main office (and each branch of such

16 institution) is located in a town, political subdivision,

17 or other unit of general local government of a State

18 that has a population of not more than thirty thou19 sand persons and which is not part of a metropolitan

20 statistical area; and

21 ‘‘(2) the institution and its parent bank holding

22 company have aggregate assets of not more than

23 $100,000,000.

24 The dollar amount in this section shall be adjusted annu25 ally after December 31, 1994, by the annual percentage
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1 increase in the Consumer Price Index for Urban Wage

2 Earners and Clerical Workers published by the Bureau of

3 Labor Statistics.’’.

4 SEC. 123. SELF-CERTIFICATION OF CRA COMPLIANCE.

5 Section 804 of the Community Reinvestment Act of

6 1977 (12 U.S.C. 2903) is amended by adding at the end

7 the following new subsection (c):

8 ‘‘(c) SELF-CERTIFICATION OF CRA COMPLIANCE.—

9 ‘‘(1) CERTIFICATION.—In lieu of being evalu10 ated under section 806A and receiving a written

11 evaluation under section 807, a qualifying financial

12 institution may choose to self-certify to the appro13 priate Federal financial supervisory agency that it is

14 in compliance with the goals of this Act.

15 ‘‘(2) QUALIFYING INSTITUTION.—A financial

16 institution shall be deemed a ‘qualifying institution’

17 for purposes of this Act if it has—

18 ‘‘(A) no more than $250 million in assets;

19 ‘‘(B) not been found to have engaged in a

20 pattern or practice of illegal discrimination

21 under the Fair Housing Act or the Equal Cred22 it Opportunity Act for the preceding five-year

23 calendar period; and

24 ‘‘(C) a current CRA rating of ‘satisfactory’

25 or ‘outstanding’.
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1 The dollar amount in this paragraph shall be ad2 justed annually after December 31, 1994, by the an3 nual percentage increase in the Consumer Price

4 Index for Urban Wage Earners and Clerical Work5 ers published by the Bureau of Labor Statistics.

6 ‘‘(3) PUBLIC NOTICE.—A qualifying institution

7 must maintain in every branch a public notice stat8 ing that the institution has self-certified that it is

9 satisfactorily helping to meet the credit needs of its

10 community, and that it maintains—

11 ‘‘(A) a public file at its main office which

12 contains a copy of its self-certification to its ap13 propriate regulator;

14 ‘‘(B) a map delineating its community;

15 ‘‘(C) a list of the types of credit and serv16 ices that it provides to its community;

17 ‘‘(D) such other information that the insti18 tution believes demonstrates its record of help19 ing to meet the credit needs of its community;

20 and

21 ‘‘(E) every public comment or letter to the

22 institution (and any response by the institution)

23 received within the previous two year-period

24 about its record of helping to meet the credit

25 needs of its community.
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1 The institution shall maintain a public file at its

2 main office containing the contents described in this

3 paragraph.

4 ‘‘(4) RATING.—A qualifying institution shall be

5 deemed to have a rating of a ‘satisfactory record of

6 meeting community credit needs’ for the purposes of

7 this section and section 806A(c). Each Federal fi8 nancial supervisory agency shall publish in the Fed9 eral Register once each month a list of institutions

10 that have self-certified during the previous month.

11 Publication of the name of the institution in the

12 Federal Register as having self-certified shall con13 stitution disclosure of the rating of the institution to

14 the public under sections 806A and 807 of this Act.

15 ‘‘(5) REGULATORY REVIEW.—During each ex16 amination for safety and soundness, a qualifying in17 stitution’s supervisory agency shall, as part of its

18 loan review, assess whether the institution’s basis for

19 its self-certification is reasonable. If the agency de20 termines that the institution’s self-certification is

21 unreasonable, then the agency shall schedule an ex22 amination of the institution for the purpose of as23 sessing the institution’s record of helping to meet

24 the credit needs of its community. If that assess25 ment results in a less than ‘satisfactory’ rating, then
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1 the agency shall revoke the institution’s self-certifi2 cation and substitute a written evaluation as pro3 vided under section 807. An institution that has had

4 its self-certification revoked shall not be permitted to

5 self-certify pursuant to this subsection for five years

6 from the year of revocation. At any time thereafter,

7 if the institution meets the requirements for self-cer8 tification, it may again opt to self-certify.’’

9 SEC. 124. COMMUNITY INPUT AND CONCLUSIVE RATING.

10 (a) CONFORMING AMENDMENT.—Section 804(a) of

11 the Community Reinvestment Act of 1977 (12 U.S.C.

12 2903) is amended by inserting ‘‘conducted in accordance

13 with Section 806A,’’ after ‘‘financial institution,’’.

14 (b) COMMUNITY INPUT AND CONCLUSIVE RATING.—

15 The Community Reinvestment Act of 1977 (12 U.S.C.

16 2901 et seq.) is amended by inserting after Section 806

17 a new Section 806A as follows:

18 ‘‘SEC. 806A. COMMUNITY INPUT AND CONCLUSIVE RATING.

19 ‘‘(a) PUBLICATION OF EXAM SCHEDULE AND OPPOR20 TUNITY FOR COMMENT.—Each appropriate Federal finan21 cial supervisory agency shall publish in the Federal Reg22 ister, thirty days prior to the beginning of a calendar quar23 ter, a listing of institutions scheduled for examination pur24 suant to this Act during that calendar quarter, and pro25 vide opportunity for written comments from the commu-
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1 nity on the performance, under this Act, of each institu2 tion scheduled for examination. Such comments shall be

3 received by the appropriate Federal financial supervisory

4 agency no later thirty days after the commencement of

5 such calendar quarter. The agency shall provide a copy

6 of such comments to the institution.

7 ‘‘(b) EVALUATION.—The appropriate Federal finan8 cial supervisory agency shall evaluate the institution in ac9 cordance with the standards set forth in section 804 of

10 this Act, and shall prepare and publish a written evalua11 tion of the institution as required under section 807 of

12 this Act.

13 ‘‘(c) RECONSIDERATION OF RATING.—A reconsider14 ation of an institution’s rating, referred to in Section

15 807(b)(1)(C), may be requested within thirty days of the

16 rating’s disclosure to the public. Any such request must

17 be made in writing and filed with the appropriate Federal

18 financial supervisory agency, and may be filed by the insti19 tution or a member of the community. Any such request

20 shall be based on significant issues of a substantive nature

21 which are relevant to the delineated community of the in22 stitution, and in the case of a request by a member of

23 the community shall be limited to issues previously raised

24 in comments submitted pursuant to subsection (a). The

25 appropriate Federal financial supervisory agency shall
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1 complete any requested reconsideration within thirty days

2 of the filing of the request.

3 ‘‘(d) CONCLUSIVE RATING.—An institution’s rating

4 becomes ‘conclusive’ on the later of—

5 ‘‘(1) thirty days after the rating is disclosed to

6 the public; or

7 ‘‘(2) the completion of any requested reconsid8 eration by the Federal financial supervisory agency.

9 An institution’s rating shall be the conclusive assessment

10 of its record of meeting the credit needs of its community

11 for purposes of section 804 of this Act until the institu12 tion’s next rating, developed pursuant to an examination,

13 becomes conclusive. Institutions which have received a

14 ‘satisfactory’ or ‘outstanding’ rating shall be deemed to

15 have satisfied section 804 of this Act. Notwithstanding

16 any other provision of law, nothing herein shall be con17 strued to grant a cause of action to any person.’’.

18 SEC. 125. SPECIAL PURPOSE BANKS.

19 The Community Reinvestment Act of 1977 (12

20 U.S.C. 2901 et seq.) is amended—

21 (1) in section 803 (12 U.S.C. 2902), by insert22 ing at the end thereof the following new paragraph

23 (5):
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1 ‘‘(5) the term ‘special purpose banks’ means a

2 bank that does not generally accept retail deposits,

3 such as credit card banks and trust banks.’’; and

4 (2) in section 804 (12 U.S.C. 2903), by insert5 ing after subsection (c) (as added by section 122 of

6 this title):

7 ‘‘(d) In conducting assessments pursuant to this sec8 tion at special purpose banks, each appropriate Federal

9 financial supervisory agency shall take into consideration

10 the nature of business such banks are involved in and de11 velop standards under which such banks may be deemed

12 to have complied with the requirements of this Act which

13 are consistent with the specific nature of such busi14 nesses.’’.

15 SEC. 126. INCREASED INCENTIVES TO LENDING TO LOW16 AND MODERATE-INCOME COMMUNITIES.

17 Section 804(a) of the Community Reinvestment Act

18 of 1977 (12 U.S.C. 2903(a)) is amended—

19 (1) in paragraph (1), by striking ‘‘; and’’ at the

20 end and inserting;

21 (2) in paragraph (2), by striking the period and

22 inserting ‘‘; and’’; and

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

24 paragraph:
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1 ‘‘(3) provide the institution with credit, for pur2 poses of satisfying the requirements of this Act, for

3 investments in, and loans to—

4 ‘‘(A) minority depository institutions and

5 women’s depository institutions (as defined in

6 section 808(b)); and

7 ‘‘(B) joint ventures or other entities or

8 projects which provide benefits to distressed

9 communities, as such term is defined by the ap10 propriate Federal financial supervisory agency,

11 whether those minority or women’s depository insti12 tutions, or those communities, are located within or

13 outside of the service area of the regulated financial

14 institution.’’.

15 SEC. 127. PROHIBITION ON ADDITIONAL REPORTING

16 UNDER CRA.

17 Section 806 of the Community Reinvestment Act of

18 1977 (12 U.S.C. 2905) is amended to read as follows:

19 ‘‘SEC. 806. REGULATIONS.

20 ‘‘Regulations to carry out the purposes of this title

21 shall be published by each appropriate Federal financial

22 supervisory agency. Such regulations and any policy state23 ments, commentary, examiner guidance, or other super24 visory material shall not impose any additional record25 keeping on a financial institution. No loan data may be
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1 required to be collected and reported by a financial institu2 tion and no such data may be made public by any Federal

3 financial supervisory agency under this title.’’.

4 SEC. 128. TECHNICAL AMENDMENT.

5 Section 807(b)(1)(B) of the Community Reinvest6 ment Act (12 U.S.C. 2906) is amended by striking ‘‘The

7 information’’ and inserting in its place ‘‘In the case of a

8 regulated financial institution that maintains domestic

9 branches in two or more States, the information’’.

10 SEC. 129. DUPLICATIVE REPORTING.

11 Section 10(g) of the Federal Home Loan Bank Act

12 (12 U.S.C. 1430(g)) is amended by adding at the end

13 thereof the following new paragraph (3):

14 ‘‘(3) SPECIAL RULE.—This subsection shall not

15 apply to members receiving a grade of ‘outstanding’

16 or ‘satisfactory’ under section 807 of the Community

17 Reinvestment Act of 1977.’’.

18 Subtitle C—Consumer Banking Reforms

19 SEC. 131. TRUTH IN SAVINGS.

20 (a) Section 262 of the Truth in Savings Act (12

21 U.S.C. 4301) is amended to read as follows:

22 ‘‘SEC. 262. PURPOSE.

23 ‘‘It is the purpose of this Act to ensure that consum24 ers can make a meaningful comparison between the com25 peting claims of depository institutions with regard to de-
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1 posit accounts by requiring that institutions offering inter2 est-bearing accounts pay interest on the full amount of

3 principal each day in a consumer deposit account at the

4 rate agreed to be paid by the institution.’’.

5 (b) Section 263 is amended to read as follows:

6 ‘‘SEC. 263. PROHIBITION ON MISLEADING OR INACCURATE

7 ADVERTISEMENTS AND DISCLOSURES.

8 ‘‘No depository institution or deposit broker shall

9 make any advertisement, announcement, solicitation or

10 disclosure relating to a deposit account that is inaccurate

11 or misleading or that misrepresents its deposit contracts.’’.

12 (c) Sections 264, 265, and 266 of the Truth is Sav13 ings Act (12 U.S.C. 4302, 4303, 4304, and 4305, respect14 fully) are hereby repealed.

15 (d) Section 267 of the Truth in Savings Act (12

16 U.S.C. 4306) is redesignated as Sec. 263.

17 (e) Section 268 of the Truth in Savings Act (12

18 U.S.C. 4307) is hereby repealed.

19 (f) Section 269 of the Truth in Savings Act (12

20 U.S.C. 4308) is redesignated as Sec. 264 and is amended

21 to read as follows:

22 ‘‘SEC. 264. REGULATIONS.

23 ‘‘(a) IN GENERAL.—The Board, after consultation

24 with each agency referred to in section 265(a) and public
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1 notice and opportunity for comment, shall prescribe regu2 lations to carry out the purpose and provisions of this title.

3 ‘‘(b) EFFECTIVE DATE OF REGULATIONS.—The pro4 visions of this subtitle shall not apply with respect to any

5 depository institution before the effective date of regula6 tions prescribed by the Board under this subsection.’’.

7 (f) Section 270 of the Truth in Savings Act (12

8 U.S.C. 4309) is redesignated as Sec. 265.

9 (g) Sections 271 and 273 of the Truth in Savings

10 Act (12 U.S.C. 4310 and 4312) are hereby repealed.

11 (h) Section 272 of the Truth in Savings Act (12

12 U.S.C. 4311) is redesignated as Sec. 266.

13 (i) Section 274 of the Truth in Savings Act (12

14 U.S.C. 4313) is redesignated as Sec. 267 and is amended

15 to read as follows:

16 ‘‘SEC. 267. DEFINITIONS.

17 ‘‘For the purposes of this chapter—

18 ‘‘(1) ACCOUNTS.—The term ‘account’ means

19 any account intended for use by and generally used

20 by a consumer primarily for personal, family, or

21 household purposes that is offered by a depository

22 institution into which a customer deposits funds, in23 cluding demand deposits, time accounts, negotiable

24 order of withdrawal accounts, and share draft ac25 counts.
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1 ‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de2 pository institution’ has the meaning given such

3 term in clause (i) through (vi) of section 19(b)(1)(A)

4 of the Federal Reserve Act.

5 ‘‘(3) INTEREST.—The term ‘interest’ includes

6 dividends paid with respect to share draft accounts

7 which are accounts within the meaning of paragraph

8 (1).

9 ‘‘(4) BOARD.—The term ‘Board’ means the

10 Board of Governors of the Federal Reserve Sys11 tem.’’.

12 SEC. 132. UNAUTHORIZED ELECTRONIC FUND TRANSFERS.

13 (a) Section 909(a)(1) of Electronic Fund Transfer

14 Act (15 U.S.C. 1693g(a)(1)) is amended by inserting ‘‘(or

15 in cases where the cardholder has substantially contrib16 uted to the unauthorized use, including writing on or keep17 ing with the card or other means of access a personal iden18 tification or other security code, $500)’’ after ‘‘$50’’.

19 (b) Section 909 of the Electronic Fund Transfer Act

20 (15 U.S.C. 1693g) is amended by adding at the end the

21 following new subsections:

22 ‘‘(f) Notwithstanding any provision of subsection (a)

23 or subsection (b)—

24 ‘‘(1) a financial institution may request that a

25 consumer who alleges an unauthorized electronic
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1 fund transfer involving the consumer’s account pro2 vide reasonable cooperation in connection with the

3 financial institution’s investigation of the alleged un4 authorized electronic fund transfer; and

5 ‘‘(2) the consumer shall remain liable for the

6 amount of the alleged unauthorized electronic fund

7 transfer if the consumer fails or refuses to provide

8 such cooperation, unless the financial institution oth9 erwise has information which confirms that the elec10 tronic fund transfer was unauthorized.

11 ‘‘(g) Notwithstanding any provision of subsection (a)

12 or subsection (b), a consumer who authorizes a person to

13 use the consumer’s access device may be held liable by

14 the financial institution for all electronic fund transfers

15 made by such person using such access device prior to the

16 consumer revoking the authorization and notifying the fi17 nancial institution of the revocation in accordance with

18 procedures reasonably established by the financial institu19 tion for such a revocation of authority, as more specifically

20 provided by the Board in regulations prescribed under this

21 title.’’.

22 SEC. 133. LIABILITY FOR UNAUTHORIZED USE OF CREDIT

23 CARDS.

24 Section 133(a) of the Truth in Lending Act (15

25 U.S.C. 1643(a)) is amended—
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1 (1) by redesignating paragraph (2) as para2 graph (3);

3 (2) by inserting after paragraph (1) the

4 following:

5 ‘‘(2)(A) Notwithstanding paragraph (1), a card6 holder shall be liable for the unauthorized use of a

7 credit card if—

8 ‘‘(i) the liability is in excess of $50; and

9 ‘‘(ii) the cardholder fails to notify the card

10 issuer of any unauthorized transaction which

11 appears on the statement of the cardholder’s

12 account in connection with an extension of

13 consumer credit within sixty days of the trans14 mission of such statement.

15 ‘‘(B) The liability described in subparagraph

16 (A) shall not apply if the cardholder demonstrates

17 that the failure to timely notify the card issuer of

18 the unauthorized use was due to extenuating cir19 cumstances such as extended travel or hospitaliza20 tion, and notice was provided at the earliest possible

21 time thereafter.

22 ‘‘(C) The liability described in subparagraph

23 (A) shall only apply where the card issuer has pro24 vided prior notice to the cardholder of such liabil-
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1 ity.’’.; and inserting after paragraph (3) (as so re2 designated by paragraph (1) of this section).

3 ‘‘(4) Notwithstanding any other provision of

4 this subsection or subsection (b)—

5 ‘‘(A) a card issuer may request that a

6 cardholder who alleges unauthorized use of his

7 or her credit card provide reasonable coopera8 tion in connection with the card issuer’s inves9 tigation of the alleged unauthorized use; and

10 ‘‘(B) the cardholder shall remain liable for

11 the amount of the alleged unauthorized use if

12 the cardholder fails or refuses to provide such

13 cooperation, unless the card issuer otherwise

14 has information which clearly establishes the

15 unauthorized use.

16 ‘‘(5) Notwithstanding any other provision of

17 this subsection or subsection (b), a cardholder who

18 authorizes a person to use the cardholder’s credit

19 card may be held liable by the card issuer for all ex20 tensions of credit which are obtained by such person

21 using such credit card prior to the cardholder revok22 ing the authorization and notifying the card issuer

23 of the revocation in accordance with procedures rea24 sonably established by the card issuer for such a rev25 ocation of authority, as more specifically provided by
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1 the Board in regulations prescribed under this

2 title.’’.

3 SEC. 134. INFORMATION SHARING.

4 Section 18 of the Federal Deposit Insurance Act (12

5 U.S.C. 1828) is amended by adding at the end of the fol6 lowing new subsection:

7 ‘‘(s) CUSTOMER ACCESS TO PRODUCTS.—

8 ‘‘(1) IN GENERAL.—Notwithstanding any other

9 provision of law, any depository institution or any

10 affiliate or subsidiary thereof may share or exchange

11 information or otherwise transfer information be12 tween or among themselves without any restriction

13 or limitation if it is clearly and conspicuously dis14 closed that the information may be communicated

15 among such persons and the consumer is given the

16 opportunity, prior to the time that the information

17 is initially communicated, to direct that such infor18 mation not be communicated among such persons.

19 ‘‘(2) DEFINITION.—For purposes of this sub20 section, ‘information’ means any and all data,

21 records, or other information and material obtained

22 or maintained by any depository institution or any

23 affiliate or subsidiary thereof in the ordinary course

24 of its business that relates in any way to a person

25 (as that term is defined in 15 U.S.C. 1681a(b)) who
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1 applies for, maintains or has maintained an account

2 or credit relationship with or applied for, purchased

3 or obtained other products or services from any de4 pository institution or any affiliate or subsidiary

5 thereof, regardless of the source of manner in which

6 the information is obtained or furnished.

7 ‘‘(3) RULE OF CONSTRUCTION.—Any depository

8 institution or any affiliate or subsidiary thereof rely9 ing on this subsection shall not be deemed to be a

10 consumer reporting agency, user or third party, and

11 the information itself shall not constitute a

12 consumer report, within the meaning of Fair Credit

13 Reporting Act or other similar law.’’.

14 SEC. 135. ELECTRONIC FUND TRANSFER ACT CLARIFICA15 TION.

16 (a) Section 903(1) of the Electronic Fund Transfer

17 Act (15 U.S.C. 1693a(1)) is amended by inserting before

18 the semicolon the following: ‘‘, but such term does not in19 clude a card or device that a person may use to pay for

20 transactions through use of value stored on the card or

21 device itself, except for those transactions where such card

22 or device is actually used to access an account to effect

23 such transaction’’.

24 (b) Section 903(2) of the Electronic Fund Transfer

25 Act (15 U.S.C. 1693a(2)) is amended by inserting before
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1 the semicolon the following: ‘‘and does not include any

2 value which is stored on a card or device itself that enables

3 a person to pay for transactions through use of that stored

4 value’’.

5 Subtitle D—Equal Credit Opportunity Act

6 Amendments

7 SEC. 141. SHORT TITLE.

8 This subtitle may be cited as the Equal Credit Oppor9 tunity Act Amendments of 1995.

10 SEC. 142. FINDINGS AND PURPOSE.

11 (a) The Congress finds that both the Equal Credit

12 Opportunity Act (15 U.S.C. 1691, et seq.) and the Fair

13 Credit Reporting Act (15 U.S.C. 1681, et seq.) contain

14 requirements that applicants for consumer credit be given

15 certain information in the event that adverse action is

16 taken on the application. These requirements differ in

17 both scope and content and for that reason are confusing

18 to both the consumer who receives the information and

19 the party required to furnish the information.

20 (b) It is the purpose of this act to combine and sim21 plify the adverse action notification requirements of the

22 Equal Credit Opportunity Act and the Fair Credit Report23 ing Act regarding applications for consumer credit and to

24 make the information that is required to be furnished

25 more understandable.
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1 SEC. 143. EQUAL CREDIT OPPORTUNITY ACT AMEND2 MENTS.

3 (a) Section 701(d)(2)(B) of the Equal Credit Oppor4 tunity Act (15 U.S.C. 1691(d)(2)(B)) is amended to read

5 as follows:

6 ‘‘(B) giving written notification of adverse ac7 tion which discloses

8 ‘‘(i) the applicant’s right to a statement of

9 reasons within thirty days after receipt by the

10 creditor of a request made within sixty days

11 after such notification;

12 ‘‘(ii) if credit is denied or the charge for

13 such credit is increased either wholly or partly

14 because of information contained in a consumer

15 report from a consumer reporting agency, that

16 fact and the name and address of the consumer

17 reporting agency making the report;

18 ‘‘(iii) if credit is denied or the charge

19 therefor is increased either wholly or partly be20 cause of information obtained from a person

21 other than a consumer reporting agency bearing

22 upon the consumer’s credit worthiness, credit

23 standing, credit capacity, character, general

24 reputation, personal characteristics or mode of

25 living, that fact and the right to receive disclo26 sure of the nature of the information so re-
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1 ceived upon receipt of the consumer’s written

2 request therefor within sixty days after learning

3 of such adverse action; and

4 ‘‘(iv) the identity of the person or office

5 from which such notification may be obtained.

6 Such statement of reasons may be given orally if the

7 written notification advises the applicant of his right

8 to have the statement of reasons confirmed in writ9 ing on written request.’’.

10 (b) Paragraph 701(d)(3) of the Equal Credit

11 Opportunity Act (15 U.S.C. 1691(d)(3)) is amended

12 by striking the period at the end and adding the fol13 lowing: ‘‘and, to the extent applicable, the name and

14 address of the consumer reporting agency identified

15 in accordance with the requirements of subsection

16 (d)(3)(ii) and a statement of the right to obtain dis17 closure of the nature of the information upon which

18 adverse action was taken as required by subsection

19 (d)(3)(iii).’’.

20 (c) Section 706 of the Equal Credit Opportunity Act

21 (15 U.S.C. 1691e) is amended by adding at the end the

22 following new subsection:

23 ‘‘(e) No person shall be held liable for any violation

24 of subsection 701(d) hereof if he shows by a preponder25 ance of the evidence that at the time of the alleged viola-
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1 tion he maintained reasonable procedures to assure com2 pliance with the provisions of the subsection.’’.

3 SEC. 144. FAIR CREDIT REPORTING ACT AMENDMENTS.

4 (a) Section 615(a) of the Fair Credit Reporting Act

5 (15 U.S.C. 1681m(a)) is amended by striking ‘‘credit or’’

6 each time such term appears.

7 (b) Section 615 of the Fair Credit Reporting Act (15

8 U.S.C. 1681m) is amended by striking subsection (b) and

9 redesignating subsection (c) as subsection (b).

10 (c) Section 615(b) (as redesignated by this section)

11 of the Fair Credit Reporting Act (15 U.S.C. 1681m(b))

12 is amended by striking ‘‘subsections (a) and (b)’’ and in13 serting ‘‘subsection (a)’’.

14 SEC. 145. INCENTIVES FOR SELF-TESTING.

15 (a) EQUAL CREDIT OPPORTUNITY.—The Equal

16 Credit Opportunity Act (15 U.S.C. 1691 et seq.) is

17 amended—

18 (1) by inserting after section 704 the following

19 new section:

20 ‘‘SEC. 704A. SELF-TESTING ENHANCEMENT.

21 ‘‘Whenever a creditor conducts, or authorizes an

22 independent third party to conduct, a test or review of

23 the creditor’s lending or any part of its lending operations

24 in order to determine the level or effectiveness of compli25 ance with this Act by the creditor, then any report or re-
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1 sults of such a test or review may not be reviewed, ob2 tained, examined or otherwise acquired or used by any ap3 plicant in any proceeding or civil action brought under this

4 Act.’’;

5 (2) in section 706(g), by inserting the following

6 new language after the second sentence: ‘‘No agency

7 shall refer a matter to the Attorney General if the

8 creditor has already identified the matter as a pos9 sible violation of the Equal Credit Opportunity Act

10 as the result of internal review, self-testing, compli11 ance review or other audit or review procedure insti12 tuted by the creditor to determine compliance with

13 the Act. No provision of this section shall be con14 strued as limiting the authority of the agency to en15 force the provisions of this Act under any other pro16 vision of law.’’; and

17 (3) in section 706(k), by adding at the end the

18 following: ‘‘No agency referred to in paragraph (1),

19 (2) or (3) of section 704(a) shall notify the Sec20 retary of Housing and Urban Development or the

21 applicant of a violation of the Equal Credit Oppor22 tunity Act or of the Fair Housing Act if the creditor

23 has already identified the matter as a possible viola24 tion of either of those Acts as a result of internal

25 review, self-testing, compliance review or other audit
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1 or review procedure instituted by the creditor to de2 termine compliance with the Act. No provisions of

3 this section shall be construed as limiting the au4 thority of the agency to enforce the provisions of this

5 Act under any other provision of law.’’.

6 (b) FAIR HOUSING.—The Fair Housing Act (42

7 U.S.C. 3601 et seq.) is amended by adding the following:

8 ‘‘SEC. 814A. SELF-TESTING ENHANCEMENT.

9 ‘‘Whenever any person conducts, or authorizes an

10 independent third party to conduct, a test or review of

11 that person’s residential real estate or real estate-related

12 activities or any part thereof in order to determine the

13 level or effectiveness of compliance with this Act by the

14 person, then any report or results of such a test or review

15 may not be reviewed, obtained, examined or otherwise ac16 quired or used by the applicant, aggrieved party, or com17 plainant in any proceeding or civil action brought under

18 this Act.’’.

19 SEC. 146. CREDIT SCORING SYSTEMS.

20 Section 701 of the Equal Credit Opportunity Act (15

21 U.S.C. 1691) is amended by adding at the end the follow22 ing new subsection:

23 ‘‘(f) A creditor shall be deemed to be in compliance

24 with subsection (a) with respect to any credit decision

25 made by the creditor which is based solely on the use of
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1 an empirically derived, demonstrably and statistically

2 sound, credit scoring system, as defined by the Board in

3 regulations prescribed under this title, if such system does

4 not utilize any category protected under subsection (a) or

5 use as a factor in such system any criterion which is so

6 directly associated with such a category as to be the func7 tional equivalent of such a category. Nothing in this sub8 section shall preclude a creditor from using age as a factor

9 in such a system as otherwise permitted under this title.’’.

10 SEC. 147. EFFECTIVE DATE.

11 This Act shall take effect two hundred seventy days

12 after enactment. The Board of Governors of the Federal

13 Reserve System shall promulgate regulations to implement

14 this Act at least ninety days before its effective date.

15 Subtitle E—Consumer Leasing Act

16 Amendments

17 SEC. 151. SHORT TITLE.

18 This subtitle may be cited as the ‘‘Consumer Leasing

19 Act Amendments of 1995’’.

20 SEC. 152. CONGRESSIONAL FINDINGS AND DECLARATION

21 OF PURPOSE.

22 (a) The Congress finds that competition among the

23 various financial institutions and other firms engaged in

24 the business of consumer leasing is greatest when there

25 is informed use of leasing. The informed use of leasing
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1 results from an awareness of the cost thereof by consum2 ers. It is the purpose of this subchapter to assure a simple,

3 meaningful disclosure of leasing terms so that the

4 consumer will be able to compare more readily the various

5 leasing terms available to him and avoid the uninformed

6 use of leasing, and to protect the consumer against inac7 curate and unfair leasing practices.

8 (b) The Congress also finds that there has been a

9 continued trend toward leasing automobiles and other du10 rable goods for consumer use as an alternative to install11 ment credit sales and that leasing product advances have

12 occurred such that lessors have been unable to provide

13 consistent industry-wide disclosures to fully account for

14 the competitive progress that has occurred. To provide for

15 adequate cost disclosures that reflect the marketplace

16 without impairing competition and the development of new

17 leasing products, it is the purpose of this subchapter to

18 provide the Board with the regulatory authority to assure

19 a simplified, meaningful definition and disclosure of the

20 terms of certain leases of personal property for personal,

21 family, or household purposes so as to enable the lessee

22 to compare more readily the various lease terms available

23 to the lessee, enable comparison of lease terms with credit

24 terms where appropriate and to assure meaningful and ac25 curate disclosures of lease terms in advertisements.
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1 SEC. 153. REGULATIONS.

2 Chapter 5 of the Consumer Credit Protection Act is

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

4 ‘‘SEC. 187. REGULATIONS.

5 ‘‘(a) IN GENERAL.—The Board shall write regula6 tions or staff commentary, if appropriate, to update and

7 clarify the requirements and definitions for lease disclo8 sures, contracts, and any other specific issues related to

9 consumer leasing which would carry out the purposes of

10 the Consumer Leasing Act, to prevent its circumvention,

11 and to facilitate compliance with its requirements. The

12 regulations may contain classifications and differentia13 tions and may provide for adjustments and exceptions for

14 any class of transaction.

15 ‘‘(b) MODEL DISCLOSURES.—The Board shall pub16 lish model disclosure forms and clauses to facilitate com17 pliance with the disclosure requirements and to aid the

18 consumer in understanding the transaction. In designing

19 forms, the Board shall consider the use by lessors of data

20 processing or similar automated equipment. Use of the

21 models shall be optional. A lessor who properly uses the

22 material aspects of the models shall be deemed to be in

23 compliance with the disclosure requirements.

24 ‘‘(c) EFFECTIVE DATES.—Any regulation of the

25 Board, or any amendment or interpretation thereof, that

26 requires a disclosure different from the disclosures pre-
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1 viously required shall have an effective date of October 1

2 that follows the date of promulgation by at least six

3 months. The Board may at its discretion lengthen that

4 period of time to permit lessors to adjust their forms to

5 accommodate new requirements. The Board may also

6 shorten that period of time if it makes a specific finding

7 that such action is necessary to comply with the findings

8 of a court or to prevent unfair or deceptive practices. In

9 any case, lessors may comply with any newly promulgated

10 disclosure requirement prior to its effective date.’’.

11 SEC. 154. SEGREGATED LEASING DISCLOSURES.

12 Section 182 of the Consumer Credit Protection Act

13 (15 U.S.C. 1667(a)) is amended—

14 (1) by inserting ‘‘(a)’’ before ‘‘Each lessor’’ in

15 the first sentence; and,

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

18 ‘‘(b) Prior to or at the time the consumer receives

19 the disclosures required under Section 182(a), the lessor

20 shall separately disclose, to the extent applicable, each of

21 the following items in a tabular format in a manner to

22 be prescribed by the Board:

23 ‘‘(1) Total amount of funds due at lease incep24 tion. This amount shall include any security deposit,

25 whether or not it is refundable and any other fees
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1 required to be paid to the lessor at lease inception

2 by the consumer.

3 ‘‘(2) Total monthly payment due to the Lessor.

4 This amount does not include any taxes payable by

5 the lessee to any governmental entity.

6 ‘‘(3) Number of Payments.

7 ‘‘(4) Total of Monthly Payments.

8 ‘‘(5) Capitalized Cost.

9 ‘‘(6) Residual Value.

10 ‘‘(7) Whether or not the Lessee has the right

11 to purchase the Vehicle during or at the end of the

12 Lease.

13 ‘‘(8) Excess Mileage Charge: The amount that

14 the Lessee, at scheduled termination, must pay for

15 each mile in excess of a predetermined number of

16 miles.

17 ‘‘(9) Early Termination: In the event of early

18 termination of the lease by the lessee, the disclosure

19 of the payment allocation method by name alone

20 which would facilitate comparison shopping by con21 sumers.

22 In prescribing regulations to carry out this clause, the

23 Board shall define and name not more than the five early

24 termination liability calculation methods determined by

25 the Board to be the most commonly used methods.’’.
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1 SEC. 155. CONSUMER LEASE ADVERTISING.

2 Section 184 of the Consumer Credit Protection Act

3 (15 U.S.C. 1667(c)) is amended to read as follows:

4 ‘‘SEC. 184. CONSUMER LEASE ADVERTISING.

5 ‘‘(a) If an advertisement for a consumer lease states

6 the amount of any payment or states that any or no initial

7 payment is required, the advertisement must also clearly

8 and conspicuously state the following terms, as applicable:

9 ‘‘(1) That the transaction advertised is a lease.

10 ‘‘(2) The total of initial payments required at

11 or before consummation of the lease or delivery of

12 the property, whichever is later.

13 ‘‘(3) That a security deposit is required.

14 ‘‘(4) The number, amounts, and timing of

15 scheduled payments.

16 ‘‘(5) For a lease in which the consumer’s liabil17 ity at the end of the lease term is based on the an18 ticipated residual value of the property, that an

19 extra charge may be imposed at the end of the lease

20 term.

21 ‘‘(b) Any owner or personnel of any medium in which

22 an advertisement appears or through which it is dissemi23 nated shall not be liable under this section.’’.
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1 Subtitle F—Federal Home Loan Bank

2 Amendments

3 SEC. 161. APPLICATION FOR MEMBERSHIP IN THE FHLB

4 SYSTEM.

5 Section 4(b) of the Federal Home Loan Bank Act

6 (12 U.S.C. 1424) is amended to read as follows:

7 ‘‘(b) MEMBERSHIP BASED ON CONVENIENCY.—An

8 institution eligible to become a member under this section

9 may become a member by submitting its application for

10 membership to the Bank in the district where the appli11 cant’s principal place of business is located. An application

12 for membership shall be approved by the Bank if, in the

13 judgement of the Bank, the applicant meets the criteria

14 for eligibility contained in this section. An institution eligi15 ble to become a member under this section may apply for

16 membership in an adjoining district, if appropriate for the

17 convenience of the institution and then only with the ap18 proval of the Board.’’.

19 SEC. 162. FEDERAL HOME LOAN BANK EXTERNAL AUDI20 TORS.

21 Section 11(j) of the Federal Home Loan Bank Act

22 (12 U.S.C. 1431(j)) is amended to read as follows:

23 ‘‘(j) AUDITS.—

24 ‘‘(1) Notwithstanding the provisions of section

25 9105(a)(1)(B) of title 31, United States Code, au-
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1 dits by the General Accounting Office of the finan2 cial transactions of a Federal home loan bank shall

3 not be limited to periods during which Government

4 capital has been invested therein. The provisions of

5 section 9107(c)(2) and 9108(d)(1) of title 31, of

6 such Code, shall not apply to any Federal home loan

7 bank.

8 ‘‘(2) Notwithstanding any other provision of

9 law, the Board shall not participate in the hiring of

10 an external auditor by the banks; except, that the

11 Board may establish requirements for external audit

12 contracts and accounting standards and, that all

13 twelve banks shall contract for an annual audit with

14 a single provider.’’.

15 TITLE II—STREAMLINING GOVERNMENT

16 REGULATIONS

17 Subtitle A—Regulatory Approval Issues

18 SEC. 201. STREAMLINED NONBANKING ACQUISITIONS BY

19 WELL CAPITALIZED AND WELL MANAGED

20 BANKING ORGANIZATIONS.

21 (a) NOTICE REQUIREMENTS.—Section 4(j) of the

22 Bank Holding Company Act of 1956 (12 U.S.C. 1843(j)

23 is amended as follows—
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1 (1) in paragraph (1), strike ‘‘No’’ and insert in

2 its place ‘‘Except as provided in paragraph (3), no’’;

3 and

4 (2) add at the end the following new para5 graphs:

6 ‘‘(3) NO NOTICE REQUIRED FOR CERTAIN

7 TRANSACTIONS.—No notice under paragraph (1) or

8 subsections (c)(8) or (a)(2)(B) is required for a pro9 posal by a bank holding company to engage in any

10 activity or acquire the shares or assets of any com11 pany if the proposal qualifies under paragraph (4).

12 ‘‘(4) CRITERIA FOR STATUTORY APPROVAL.—A

13 proposal qualifies under this paragraph if all of the

14 following criteria are met:

15 ‘‘(A) FINANCIAL CRITERIA.—Both before

16 and immediately after the proposed trans17 action—

18 ‘‘(i) the acquiring bank holding com19 pany is well capitalized;

20 ‘‘(ii) the lead insured depository insti21 tution of such holding company is well cap22 italized;

23 ‘‘(iii) well capitalized insured deposi24 tory institutions control at least 80 percent

25 of the aggregate total risk-weighted assets
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1 of insured depository institutions controlled

2 by such holding company; and

3 ‘‘(iv) no insured depository institution

4 controlled by such holding company is

5 undercapitalized.

6 ‘‘(B) MANAGERIAL CRITERIA.—

7 ‘‘(i) WELL MANAGED.—At the time of

8 the transaction, the acquiring bank holding

9 company, its lead insured depository insti10 tution, and insured depository institutions

11 that control at least 90 per centum of the

12 aggregate total risk-weighted assets of in13 sured depository institutions controlled by

14 such holding company are well managed.

15 ‘‘(ii) LIMITATION ON POORLY MAN16 AGED INSTITUTIONS.—

17 ‘‘(I) IN GENERAL.—No insured

18 depository institution controlled by

19 the acquiring bank holding company

20 has received one of the lowest two

21 composite ratings at the later of the

22 institution’s most recent examination

23 or subsequent review.

24 ‘‘(II) RECENTLY ACQUIRED IN25 STITUTIONS.—Insured depository in-
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1 stitutions acquired by the bank hold2 ing company within the previous

3 twelve months may be excluded for

4 purposes of subclause (I) if—

5 ‘‘(aa) the bank holding com6 pany has developed a plan ac7 ceptable to the appropriate Fed8 eral banking agency (as defined

9 in section 3 of the Federal De10 posit Insurance Act) for the insti11 tution to restore the capital and

12 management of the institution;

13 and

14 ‘‘(bb) all such insured depos15 itory institutions represent, in

16 the aggregate, less than 10 per

17 centum of the aggregate total

18 risk-weighted assets of all in19 sured depository institutions con20 trolled by the bank holding com21 pany.

22 ‘‘(C) ACTIVITIES PERMISSIBLE.—Following

23 consummation of the proposal, the bank holding

24 company engages directly or through a subsidi25 ary solely in:
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1 ‘‘(i) activities that are permissible

2 under subsection (c)(8), as determined by

3 the Board by regulation or order there4 under, subject to all of the restrictions,

5 terms and conditions of such subsection

6 and such regulation or order; and

7 ‘‘(ii) such other activities as are other8 wise permissible under this section, subject

9 to the restrictions, terms and conditions,

10 including any prior notice or approval re11 quirements, provided in this section.

12 ‘‘(D) SIZE OF ACQUISITION.—

13 ‘‘(i) ASSET SIZE.—The book value of

14 the total assets acquired does not exceed

15 10 per centum of the consolidated total

16 risk-weighted assets of the acquiring bank

17 holding company; and

18 ‘‘(ii) CONSIDERATION.—The gross

19 consideration to be paid for the securities

20 or assets does not exceed 15 per centum of

21 the consolidated Tier 1 capital of the ac22 quiring bank holding company.

23 ‘‘(E) NOTICE NOT OTHERWISE WAR24 RANTED.—For proposals described in para25 graph (5)(B), the Board has not, prior to the
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1 conclusion of the period provided in paragraph

2 (5)(B), advised the bank holding company that

3 a notice under paragraph (1) is required.

4 ‘‘(5) NOTIFICATION.—

5 ‘‘(A) COMMENCEMENT OF ACTIVITIES AP6 PROVED BY RULE.—A bank holding company

7 that qualifies under paragraph (4) and that

8 proposes to engage de novo, directly or through

9 a subsidiary, in any activity that is permissible

10 under subsection (c)(8), as determined by the

11 Board by regulation, may commence that activ12 ity without prior notice to the Board and must

13 provide written notification to the Board no

14 later than ten business days after commencing

15 the activity.

16 ‘‘(B) ACTIVITIES PERMITTED BY ORDER

17 AND ACQUISITIONS.—At least twelve business

18 days prior to commencing any activity pursuant

19 to paragraph (3) other than an activity de20 scribed in subparagraph (A) or acquiring shares

21 or assets of any company pursuant to para22 graph (3), the bank holding company must pro23 vide the Board written notification of the pro24 posal, unless the Board determines that no no25 tice or a shorter notice period is appropriate. A
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1 notification under this subparagraph must in2 clude a description of the proposed activities

3 and the terms of any proposed acquisition.

4 ‘‘(6) ADJUSTMENT OF AMOUNTS.—The Board

5 may by regulation adjust the amounts and the man6 ner in which the percentage of insured depository in7 stitutions is calculated under paragraph (4)(B)(i),

8 paragraph (4)(B)(ii)(II)(bb), and paragraph (4)(D)

9 if the Board determines that any such adjustment is

10 consistent with safety and soundness and the pur11 poses of this Act.

12 (b) DEFINITIONS.—Section 2(o)(1) of the Bank

13 Holding Company Act (12 U.S.C. 1841) is amended by

14 adding at the end the following new paragraphs:

15 ‘‘(1) CAPITAL TERMS.—

16 ‘‘(A) INSURED DEPOSITORY INSTITU17 TIONS.—With respect to insured depository in18 stitutions, the terms ‘well-capitalized,’ ‘ade19 quately capitalized’ and ‘uncapitalized’ have the

20 meaning given those terms in section 38(b) of

21 the Federal Deposit Insurance Act.

22 ‘‘(B) BANK HOLDING COMPANY.—

23 ‘‘(i) ADEQUATELY CAPITALIZED.—

24 The term ‘adequately capitalized’ means a

25 level of capitalization which meets or ex-
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1 ceeds all applicable Federal regulatory cap2 ital standards;

3 ‘‘(ii) WELL CAPITALIZED.—A bank

4 holding company is ‘well capitalized’ if it

5 meets the required capital levels for well

6 capitalized bank holding companies estab7 lished by the Board.

8 ‘‘(C) OTHER CAPITAL TERMS.—The terms

9 ‘Tier 1’ and ‘risk-weighted assets’ have the

10 meaning given those terms in the capital guide11 lines or regulations established by the Board for

12 bank holding companies.

13 ‘‘(p) LEAD INSURED DEPOSITORY INSTITUTIONS.—

14 The term ‘lead insured depository institution’ means the

15 largest insured depository institution controlled by the

16 bank holding company at any time, based on a companion

17 of the average total risk-weighted assets controlled by each

18 insured depository institution during the previous twelve

19 month period. For purposes of this subsection and section

20 4(j)(4), the term ‘insured depository institution’ shall also

21 include any branch or agency operated in the United

22 States by a foreign bank.

23 ‘‘(q) WELL MANAGED.—A company or depository in24 stitution is ‘well managed’ if, at its most recent examina-
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1 tion or subsequent review, the company or institution re2 ceived—

3 ‘‘(1) one of the highest two composite ratings;

4 and

5 ‘‘(2) at least a satisfactory rating for manage6 ment, if such rating is given.’’.

7 SEC. 202. STREAMLINED BANK ACQUISITIONS BY WELL

8 CAPITALIZED AND WELL MANAGED BANKING

9 ORGANIZATIONS.

10 (a) BANK HOLDING COMPANY ACT AMENDMENTS.—

11 Section 3 of the Bank Holding Company Act (12 U.S.C.

12 1842) is amended by adding at the end the following new

13 subsection:

14 ‘‘(h) NO APPROVAL REQUIRED FOR CERTAIN TRANS15 ACTIONS.—Notwithstanding subsections (a)(3) or (a)(5),

16 an acquisition of shares by a registered bank holding com17 pany, or a merger or consolidation between registered

18 bank holding companies, shall be deemed approved at the

19 conclusion of the period specified in paragraph (7) if:

20 ‘‘(1) FINANCIAL AND MANAGERIAL CRITERIA.—

21 ‘‘(A) WELL CAPITALIZED BANK HOLDING

22 COMPANY.—Both at the time of and imme23 diately after the proposed transaction, the ac24 quiring bank holding company is well capital25 ized.
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1 ‘‘(B) WELL CAPITALIZED LEAD INSURED

2 DEPOSITORY INSTITUTION.—Both at the time

3 of and immediately after the proposed trans4 action, the lead insured depository institution of

5 the acquiring bank holding company is well cap6 italized.

7 ‘‘(C) CAPITAL OF OTHER INSURED DEPOSI8 TORY INSTITUTIONS.—At the time of the trans9 action, well capitalized insured depository insti10 tutions control at least 80 per centum of the

11 aggregate total risk-weighted assets of insured

12 depository institutions controlled by the acquir13 ing bank holding company.

14 ‘‘(D) NO UNDERCAPITALIZED INSURED

15 DEPOSITORY INSTITUTIONS.—At the time of the

16 transaction, no insured depository institution

17 controlled by the acquiring bank holding com18 pany is undercapitalized.

19 ‘‘(E) WELL MANAGED.—

20 ‘‘(i) IN GENERAL.—At the time of the

21 transaction, the acquiring bank holding

22 company, its lead insured depository insti23 tution, and insured depository institutions

24 that control at least 90 per centum of the

25 aggregate total risk-weighted assets of in-
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1 sured depository institutions controlled by

2 such holding company are well managed.

3 ‘‘(ii) NO POORLY MANAGED INSTITU4 TIONS.—

5 ‘‘(I) IN GENERAL.—No insured

6 depository institution controlled by

7 the acquiring bank holding company

8 has received one of the lowest two

9 composite ratings at the later of the

10 institution’s most recent examination

11 or subsequent review.

12 ‘‘(II) RECENTLY ACQUIRED IN13 STITUTIONS.—Insured depository in14 stitutions acquired by the bank hold15 ing company within the previous

16 twelve months may be excluded for

17 purposes of subclause (I) if—

18 ‘‘(aa) the bank holding com19 pany has developed a plan ac20 ceptable to the appropriate Fed21 eral banking agency (as defined

22 in section 3 of the Federal De23 posit Insurance Act) for the insti24 tution to restore the capital and
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1 management of the institution;

2 and

3 ‘‘(bb) all such insured depos4 itory institutions represent, in

5 the aggregate, less than 10 per

6 centum of the aggregate total

7 risk-weighted assets of all in8 sured depository institutions con9 trolled by the holding company.

10 ‘‘(iii) ADJUSTMENT OF AMOUNTS.—

11 The Board may by regulation adjust the

12 amounts and the manner in which the per13 centage of insured depository institutions

14 is calculated under clauses (i) and

15 (ii)(II)(bb) if the Board determines that

16 such adjustment is consistent with safety

17 and soundness and the purposes of this

18 Act.

19 ‘‘(2) NO UNSATISFACTORY CRA RATINGS.—

20 ‘‘(A) IN GENERAL.—No insured depository

21 institution controlled by the acquiring bank

22 holding company has received a ‘needs to im23 prove’ or ‘substantial noncompliance’ composite

24 rating at its most recent examination under the

25 Community Reinvestment Act.
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1 ‘‘(B) RECENTLY ACQUIRED INSTITU2 TIONS.—Insured depository institutions ac3 quired by such bank holding company within

4 the previous twelve months may be excluded for

5 purposes of subparagraph (A) if the bank hold6 ing company has developed a plan acceptable to

7 the appropriate Federal banking agency (as de8 fined in section 3 of the Federal Deposit Insur9 ance Act) to restore the performance of the in10 stitution to at least a ‘satisfactory’ rating under

11 the Community Reinvestment Act.

12 ‘‘(3) COMPETITIVE CRITERIA.—Consummation

13 of the proposal complies with guidelines established

14 by the Board by regulation, after consultation with

15 the Attorney General, that identify proposals that

16 are not likely to have a significantly adverse effect

17 on competition in any relevant market.

18 ‘‘(4) SIZE OF ACQUISITION.—

19 ‘‘(A) LIMITATIONS.—

20 ‘‘(i) ASSET SIZE.—The book value of

21 the total assets acquired does not exceed

22 10 per centum of the consolidated total

23 risk weighted assets of the acquiring bank

24 holding company.
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1 ‘‘(ii) CONSIDERATION.—The gross

2 consideration to be paid for the securities

3 or assets does not exceed 15 per centum of

4 the consolidated Tier 1 capital of the ac5 quiring bank holding company.

6 ‘‘(B) ADJUSTMENT TO LIMITATIONS.—The

7 Board may by regulation adjust the limitations

8 established in this paragraph in a manner con9 sistent with safety and soundness and the pur10 poses of this Act.

11 ‘‘(5) INTERSTATE ACQUISITIONS.—Board ap12 proval of the transaction is not prohibited under

13 subsection (d).

14 ‘‘(6) OTHER CONSIDERATIONS.—Board ap15 proval of the transaction is not prohibited under

16 subsection (c)(3); and

17 ‘‘(7) NOTIFICATION.—The acquiring bank hold18 ing company provides the Board with written notice

19 of the transaction, including a description of the

20 terms of the transaction, at least fifteen business

21 days (or such shorter period as permitted by the

22 Board) prior to consummation of the transaction,

23 and, prior to the conclusion of that period, the

24 Board has not required an application under sub25 section (a).’’.
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1 SEC. 203. ELIMINATE BANK MERGER ACT FILING AND AP2 PROVAL REQUIREMENTS FOR INSURED DE3 POSITORY INSTITUTIONS ALREADY CON4 TROLLED BY THE SAME HOLDING COMPANY.

5 Section 18(c) of the Federal Deposit Insurance Act

6 is amended by adding at the end the following new

7 paragraph:

8 ‘‘(12) The provisions of this subsection shall

9 not apply to any merger, consolidation, acquisition

10 of assets or assumption of liabilities involving only

11 insured depository institutions that are subsidiaries

12 of the same depository institution holding company

13 if—

14 ‘‘(A) the responsible agency would not be

15 prohibited from approving the transaction

16 under section 44;

17 ‘‘(B) the acquiring, assuming, or resulting

18 institution complies with all applicable provi19 sions of section 44 as if the merger, consolida20 tion or acquisition were approved under this

21 subsection; and

22 ‘‘(C) the acquiring, assuming, or resulting

23 institution provides written notification of the

24 transaction to the appropriate Federal banking

25 agency for the institution at least 10 days prior

26 to consummation of the transaction.’’.
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1 SEC. 204. ELIMINATE REDUNDANT APPROVAL REQUIRE2 MENT FOR OAKAR TRANSACTIONS.

3 Section 5(d)(3) of the Federal Deposit Insurance Act

4 (12 U.S.C. 1815(d)(3)) is amended—

5 (1) in subparagraph (A), by striking ‘‘with the

6 prior written approval of the responsible agency

7 under section 18(c)(2)’’;

8 (2) in subparagraph (E)—

9 (A) by striking clause (iv) and inserting

10 the following new clause:

11 ‘‘(iv) A transaction shall not be au12 thorized under this paragraph unless the

13 acquiring, assuming, or resulting deposi14 tory institution will meet all applicable cap15 ital requirements upon consummation of

16 the transaction.’’;

17 (B) by striking clauses (i) and (ii); and

18 (C) by redesignating clauses (iii) and (iv)

19 as clauses (i) and (ii), respectively;

20 (3) by striking subparagraph (G) and redesig21 nating the subsequent subparagraphs accordingly.
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1 SEC. 205. ELIMINATE DUPLICATIVE REQUIREMENTS IM2 POSED ON BANK HOLDING COMPANIES

3 UNDER THE HOME OWNERS’ LOAN ACT.

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

5 U.S.C. 1467a(a)) is amended by adding at the end the

6 following new paragraph:

7 ‘‘(5) EXEMPTION FOR BANK HOLDING COMPA8 NIES.—The provisions of this section shall not apply

9 to any company that is a bank holding company reg10 istered under, and subject to, the provisions of the

11 Bank Holding Company Act, or to any company di12 rectly or indirectly controlled by such company

13 (other than a savings association).’’.

14 (b) Section 10(a)(1)(D) of the Home Owners’ Loan

15 Act (12 U.S.C. 1467a(a)(1)(D)) is amended to read as

16 follows:

17 ‘‘(i) SAVINGS AND LOAN HOLDING

18 COMPANY.—Except as provided in clause

19 (ii), the term ‘savings and loan holding

20 company’ means any company which di21 rectly or indirectly controls a savings asso22 ciation or controls any other company

23 which is a savings and loan holding com24 pany.

25 ‘‘(ii) EXCLUSION.—The term ‘savings

26 and loan holding company’ does not in-
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1 clude a bank holding company that is reg2 istered under, and subject to, the provi3 sions of the Bank Holding Company Act,

4 or any company controlled by such bank

5 holding company.’’.

6 (c) Section 10(e)(1)(B) of the Home Owners’ Loan

7 Act (12 U.S.C. 1467a(e)(1)(B)) is amended—

8 (1) by striking ‘‘or (ii)’’ and inserting ‘‘(ii)’’;

9 (2) by inserting before the period at the end of

10 the first sentence the following: ‘‘, or (iii) acquired

11 by a bank holding company that is registered under,

12 and subject to, the provisions of the Bank Holding

13 Company Act, or any company controlled by such

14 bank holding company’’.

15 SEC. 206. ELIMINATE REQUIREMENT THAT APPROVAL BE

16 OBTAINED FOR DIVESTITURES.

17 Section 2(g) of the Bank Holding Company Act (12

18 U.S.C. 1841(g)) is amended—

19 (1) by striking paragraph (3);

20 (2) by inserting ‘‘and’’ after paragraph (1); and

21 (3) by striking ‘‘; and’’ at the end of paragraph

22 (2) and inserting a period.
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1 SEC. 207. ELIMINATE UNNECESSARY BRANCH APPLICA2 TIONS.

3 (a) NATIONAL BANK BRANCH APPLICATIONS.—Sec4 tion 5155(i) of the Revised Statutes (12 U.S.C. 36(i)) is

5 amended—

6 (1) by striking ‘‘No branch’’ and inserting the

7 following:

8 ‘‘(1) APPROVAL REQUIRED.—Except as pro9 vided in paragraph (2), no branch’’; and

10 (2) by adding at the end the following new

11 paragraphs:

12 ‘‘(2) NO APPROVAL REQUIRED FOR CERTAIN

13 BRANCHES.—Notwithstanding this subsection, sub14 section (b) or subsection (c), the consent and ap15 proval of the Comptroller of the Currency shall not

16 be required for a national banking association to es17 tablish and operate, or to retain and operate, a

18 branch or seasonal agency if—

19 ‘‘(A) the association is well capitalized, as

20 that term is defined in section 38 of the Fed21 eral Deposit Insurance Act and regulations pre22 scribed by the Comptroller of the Currency

23 under such section;

24 ‘‘(B) the association received a composite

25 CAMEL rating of ‘1’ or ‘2’ under the Uniform

26 Financial Institutions Rating System (or an
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1 equivalent rating under a comparable rating

2 system) as of its most recent examination;

3 ‘‘(C) the association did not receive a

4 ‘needs to improve’ or substantial noncompliance

5 composite rating at its most recent examination

6 under the Community Reinvestment Act; and

7 ‘‘(D) the Comptroller of the Currency is

8 authorized to grant approval under this section

9 to such association to establish and operate, or

10 to retain and operate, a branch or seasonal

11 agency at the proposed location.

12 ‘‘(3) A branch or seasonal agency established by

13 a national banking association under paragraph (2)

14 shall be deemed to have been established and oper15 ated pursuant to an application approved under this

16 section.’’.

17 (b) STATE MEMBER BANK BRANCH APPLICA18 TIONS.—The third undesignated paragraph of section 9

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

20 by adding at the end the following: ‘‘Notwithstanding the

21 previous two sentences, the approval of the Board shall

22 not be required for a State member bank to establish and

23 operate a branch or seasonal agency if—

24 ‘‘(A) the State member bank is well-cap25 italized, as that term is defined in section 38 of
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1 the Federal Deposit Insurance Act and regula2 tions prescribed by the Board under such sec3 tion;

4 ‘‘(B) the State member bank received a

5 composite CAMEL rating of ‘1’ or ‘2’ under the

6 Uniform Financial Institutions Rating System

7 (or an equivalent rating under a comparable

8 rating system);

9 ‘‘(C) the State member bank did not re10 ceive a ‘needs to improve’ or substantial non11 compliance composite rating at its most recent

12 examination under the Community reinvestment

13 Act; and

14 ‘‘(D) the Board is authorized to grant ap15 proval under this section to such State member

16 bank to establish and operate a branch or sea17 sonal agency at the proposed location.

18 A branch or seasonal agency established by a State

19 member bank under the previous sentence shall be deemed

20 to have been established and operated pursuant to an ap21 plication approved under this section.’’.

22 (c) STATE NONMEMBER BANK BRANCH APPLICA23 TIONS.—Section 18(d) of the Federal Deposit Insurance

24 Act (12 U.S.C. 1828(d)) is amended by adding at the end

25 the following new paragraphs:
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1 ‘‘(5) APPLICATION EXEMPTION FOR CERTAIN

2 BANKS.—Notwithstanding paragraph (1), the con3 sent of the Corporation shall not be required for a

4 State nonmember insured bank to establish and op5 erate any domestic branch if—

6 ‘‘(A) the bank is well-capitalized, as that

7 term is defined in section 38 and regulations

8 prescribed by the Corporation under such sec9 tion;

10 ‘‘(B) the bank received a composite

11 CAMEL rating of ‘1’ or ‘2’ under the Uniform

12 Financial Institutions Rating System (or an

13 equivalent rating under a comparable rating

14 system) as of its most recent examination;

15 ‘‘(C) the bank did not receive a ‘needs to

16 improve’ or substantial noncompliance compos17 ite rating at its most recent examination under

18 the Community Reinvestment Act; and

19 ‘‘(D) the Corporation is authorized to give

20 consent under this section to such bank to es21 tablish and operate a domestic branch at the

22 proposed location.

23 ‘‘(6) APPROVAL GRANTED.—A branch estab24 lished by a State member bank under paragraph (5)

25 shall be deemed to have been established and oper-
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1 ated pursuant to an application approved under this

2 section.’’.

3 SEC. 208. ELIMINATE BRANCH APPLICATIONS/REQUIRE4 MENTS FOR ATMs AND SIMILAR FACILITIES.

5 (a) ‘‘BRANCH’’ UNDER NATIONAL BANK ACT.—Sec6 tion 5155(j) of the Revised Statutes (12 U.S.C. 36(j)) is

7 amended by adding at the end the following: ‘‘The term

8 ‘branch’ does not include automated teller machines or re9 mote service units.’’.

10 (b) ‘‘BRANCH’’ UNDER FEDERAL DEPOSIT INSUR11 ANCE ACT.—Section 3(o) of the Federal Deposit Insur12 ance Act (12 U.S.C. 1813(o)) is amended by striking

13 ‘‘lent; and the’’ and inserting ‘‘lent. The term ‘domestic

14 branch’ does not include automated teller machines or re15 mote service units. The’’.

16 SEC. 209. ELIMINATE REQUIREMENT FOR APPROVAL OF IN17 VESTMENTS IN BANK PREMISES FOR WELL

18 CAPITALIZED AND WELL MANAGED BANKS.

19 Section 24A of the Federal Reserve Act (12 U.S.C.

20 371d) is amended by inserting before the period in that

21 section the following: ‘‘unless such bank received a com22 posite CAMEL rating of ‘1’ or ‘2’ under the Uniform Fi23 nancial Institutions Rating System (or an equivalent rat24 ing under a comparable rating system) as of its most re25 cent examination and, both before and immediately follow-
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1 ing the investment or loan, is well capitalized (as defined

2 under section 38 of the Federal Deposit Insurance Act)’’.

3 SEC. 210. ELIMINATE UNNECESSARY FILING FOR OFFICER

4 AND DIRECTOR APPOINTMENTS.

5 Section 32 of the Federal Deposit Insurance Act (12

6 U.S.C. 1831i) is amended as follows:

7 (1) in subsection (a),

8 (A) by inserting after ‘‘thirty days (or such

9 other period as determined by the agency)’’;

10 (B) by striking ‘‘if the insured depository

11 institution or depository institution holding

12 company’’ and inserting ‘‘if’’;

13 (C) by striking paragraphs (1) and (2);

14 (D) in paragraph (3),

15 (i) by inserting ‘‘the insured deposi16 tory institution or depository institution

17 holding company’’ before ‘‘is not in compli18 ance’’;

19 (ii) by striking the period and insert20 ing instead ‘‘; and’’;

21 (E) by redesignating paragraph (3) as

22 paragraph (1); and

23 (F) by adding at the end the following new

24 paragraph:
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1 ‘‘(2) the agency determines, in connection with

2 its review of the plan required under section 38 or

3 otherwise, that such prior notice is appropriate.’’;

4 and

5 (2) in subsection (b), by striking ‘‘thirty-day’’

6 and inserting in its place ‘‘notice’’.

7 SEC. 211. STREAMLINING PROCESS FOR DETERMINING

8 NEW NONBANKING ACTIVITIES.

9 Section 4(c)(8) of the Bank Holding Company Act

10 of 1956 (12 U.S.C. 1843(c)(8)) is amended by striking

11 ‘‘and opportunity for hearing’’.

12 Subtitle B—Streamlining of Government

13 Regulations; Miscellaneous Provisions

14 SEC. 221. ELIMINATE THE PER-BRANCH CAPITAL REQUIRE15 MENT FOR NATIONAL BANKS AND STATE

16 MEMBER BANKS.

17 Section 5155 of the Revised Statutes (12 U.S.C. 36)

18 is amended by striking subsection (h).

19 SEC. 222. BRANCH CLOSURES.

20 Section 39 of the Federal Deposit Insurance Act (12

21 U.S.C. 1831p) (as added by section 228 of the Federal

22 Deposit Insurance Corporation Improvement Act of 1991)

23 is amended by adding at the end the following new sub24 sections:
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1 ‘‘(d) DEFINITIONS.—For purposes of this section, the

2 term ‘branch’ shall not include the following:

3 ‘‘(1) automated teller machines;

4 ‘‘(2) a branch acquired through merger, consoli5 dation, purchase, assumption or other method that

6 is located in a local market area currently served by

7 another branch of the acquiring institution;

8 ‘‘(3) a branch that is closed and reopened in

9 another location within the same local market area

10 which would continue to provide banking services to

11 substantially all of the customers currently served by

12 the branch that is closed;

13 ‘‘(4) a branch that is closed in connection

14 with—

15 ‘‘(A) an emergency acquisition under—

16 ‘‘(i) section 11(n); or

17 ‘‘(ii) subsections (f) or (k) of section

18 13; or

19 ‘‘(B) any assistance provided by the Cor20 poration under section 13(c); and

21 ‘‘(5) any other branch closure whose exemption

22 from the notice requirements of this section would

23 not produce a result inconsistent with the purposes

24 of this section. The appropriate Federal banking

25 agency shall, by regulation, determine the cir-
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1 cumstances under which such exemptions will be

2 granted.

3 ‘‘(e) EFFECTIVE DATE.—The amendments made by

4 this section shall become effective on the date of enact5 ment of the Federal Deposit Insurance Corporation Im6 provement Act of 1991.’’.

7 SEC. 223. AMENDMENTS TO THE DEPOSITORY INSTITU8 TIONS MANAGEMENT INTERLOCKS ACT.

9 (a) DUAL SERVICE IN SAME AREA, TOWN, OR VIL10 LAGE.—Section 203 of the Depository Institution Man11 agement Interlocks Act (12 U.S.C. 3202) is amended—

12 (1) by inserting ‘‘(a) PROHIBITIONS.—’’ before

13 ‘‘A management official’’; and

14 (2) by adding after subsection (a) the following

15 new subsection:

16 ‘‘(b) SMALL MARKET SHARE EXEMPTION.—This sec17 tion shall not prohibit a management official of a deposi18 tory institution or depository holding company from serv19 ing as a management official of another depository institu20 tion or depository holding company not affiliated therewith

21 if the depository institutions or depository holding compa22 nies with which the management official serves hold, to23 gether with their affiliates, in the aggregate no more that

24 20 per centum of the deposits in each relevant geographic

25 banking market, as defined by the Board of Governors of
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1 the Federal Reserve System, where offices of the deposi2 tory institutions or depository holding companies or their

3 affiliates are located.’’.

4 (b) DUAL SERVICE AMONG LARGER ORGANIZA5 TIONS.—Section 204 of the Depository Institution Man6 agement Interlocks Act (12 U.S.C. 3203) is amended—

7 (1) by striking ‘‘$1,000,000,000’’ and inserting

8 ‘‘$2,000,000,000’’; and

9 (2) by striking ‘‘$500,000,000’’ and inserting

10 ‘‘$1,000,000,000’’; and,

11 (3) by adding at the end thereof the following:

12 ‘‘The dollar amount in this section shall be adjusted

13 annually after December 31, 1994, by the annual

14 percentage increase in the Consumer Price Index for

15 Urban Wage Earners and Clerical Workers pub16 lished by the Bureau of Labor Statistics.’’.

17 (c) EXTENSION OF GRANDFATHER EXEMPTION.—

18 Section 206 of the Depository Institution Management

19 Interlocks Act (12 U.S.C. 3205) is amended—

20 (1) in subsection (a), by striking ‘‘for a period

21 of, subject to the requirements of subsection (c),

22 twenty years after the date of enactment of this

23 title’’;

24 (2) by inserting a period after ‘‘position’’ the

25 second place such term appears;
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1 (3) in subsection (b), by striking the second

2 sentence; and

3 (4) by striking subsection (c).

4 (d) RULES OR REGULATIONS.—Section 209 of the

5 Depository Institution Management Interlocks Act (12

6 U.S.C. 3207) is amended—

7 (1) by striking ‘‘(a) IN GENERAL.—Rules’’ and

8 inserting ‘‘Rules’’;

9 (2) by inserting ‘‘, including rules or regula10 tions which permit service by a management official

11 which would otherwise be prohibited by section 203

12 or section 204,’’ after ‘‘chapter’’; and

13 (3) by striking subsections (b) and (c).

14 SEC. 224. CONSOLIDATION OF APPRAISAL SUBCOMMITTEE.

15 (a) APPRAISAL SUBCOMMITTEE CONSOLIDATION.—

16 The Appraisal Subcommittee established under the Fed17 eral Financial Institutions Examination Council Act of

18 1978 is abolished and its functions shall be consolidated

19 into the Financial Institutions Examination Council.

20 (b) CONFORMING AMENDMENTS TO TITLE XI.—

21 (1) The Federal Financial Institutions Exam22 ination Council Act of 1978 is amended by striking

23 the following sections:

24 (A) Section 1102 (12 U.S.C. 3310).

25 (B) Section 1104 (12 U.S.C. 3333).
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1 (C) Section 1105 (12 U.S.C. 3334).

2 (D) Section 1106 (12 U.S.C. 3335).

3 (E) Section 1108 (12 U.S.C. 3337).

4 (F) Section 1116(e) (12 U.S.C. 3345(e)).

5 (G) Section 1122(e) (12 U.S.C. 3351(e)).

6 (2) section 1121 of the FIECA of 1978 (12

7 U.S.C. 3350) is amended—

8 (A) by striking paragraphs (2) and (8);

9 (B) by redesignating paragraphs (3)

10 through (7) as paragraphs (2) through (6), re11 spectively; and

12 (C) by redesignating paragraphs (9)

13 through (10) as paragraphs (7) through (8), re14 spectively.

15 (c) CONFORMING AMENDMENT.—Section 202(e) of

16 the National Housing Act (12 U.S.C. 1078(e)) is amended

17 by striking paragraph (2) and redesignating paragraphs

18 (3) and (4) and paragraphs (2) through (3).

19 (d) CONSOLIDATION OF FUNCTIONS TO FFIEC; RE20 DUCTION OF ASSESSMENTS ON APPRAISERS.—

21 (1) Section 1103 of the Financial Institutions

22 Reform, Recovery and Enforcement Act of 1989 (12

23 U.S.C. 3332) is amended—
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1 (A) by striking ‘‘Appraisal Subcommittee’’

2 each place it appears and inserting instead ‘‘Fi3 nancial Institutions Examination Council’’;

4 (B) in paragraph (a)(3), by inserting be5 fore ‘‘maintain’’ the words ‘‘if the Council de6 termines that doing so will further the purposes

7 of this chapter,’’; and

8 (C) by amending paragraph (a)(4) to read

9 as follows:

10 ‘‘(4) include in its annual report to Congress a

11 description of how it has performed the functions as12 signed to it under this chapter.’’.

13 (2) Section 1109 of the Financial Institutions

14 Reform, Recovery and Enforcement Act of 1989 (12

15 U.S.C. 3338) is amended to read as follows:

16 ‘‘SEC. 1109. ROSTER OF STATE CERTIFIED OR LICENSED

17 APPRAISERS.

18 ‘‘(a) ROSTER; COLLECTION OF FEES.—Each State

19 with an appraiser certifying and licensing agency whose

20 certifications and licenses comply with this chapter,

21 shall—

22 ‘‘(1) upon request of the Federal Financial In23 stitutions Examination Council, transmit to the

24 Council annually (or at any less frequent interval

25 specified by the Council) a roster listing individuals
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1 who have received a State certification or license in

2 accordance with this chapter;

3 ‘‘(2) collect from such individuals who perform

4 or seek to perform appraisals in federally related

5 transactions, an annual registry fee, the amount of

6 which is to be determined by the Council but not to

7 exceed $25 per year, to support its activities under

8 this chapter; and

9 ‘‘(3) transmit all registry fees to the Council on

10 an annual basis.

11 ‘‘(b) STATUS OF REGISTRY FEES.—Registry fees col12 lected and transmitted to the Council pursuant to this sec13 tion shall not constitute appropriated funds.’’.

14 (3) Section 1116(e) of the Financial Institu15 tions Reform, Recovery and Enforcement Act of

16 1989 (12 U.S.C. 3345(e)) is amended by striking

17 ‘‘Appraisal Subcommittee’’ and ‘‘Subcommittee’’ and

18 inserting instead ‘‘Financial Institutions Examina19 tion Council’’.

20 (4) Section 1118 of the Financial Institutions

21 Reform, Recovery and Enforcement Act of 1989 (12

22 U.S.C. 3347) is amended by striking ‘‘Appraisal

23 Subcommittee’’ each place it appears and inserting

24 instead ‘‘Financial Institutions Examination Coun25 cil’’.
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1 (5) Section 1119 of the Financial Institutions

2 Reform, Recovery and Enforcement Act of 1989 (12

3 U.S.C. 3348) is amended—

4 (A) by striking ‘‘Subject to the approval of

5 the Council, the Appraisal Subcommittee’’ and

6 inserting in its place ‘‘The Council’’;

7 (B) by striking ‘‘Appraisal Subcommittee’’

8 each place it appears and inserting instead ‘‘Fi9 nancial Institutions Examination Council’’.

10 (6) Section 1120 of the Financial Institutions

11 Reform, Recovery and Enforcement Act of 1989 (12

12 U.S.C. 3349) is amended by striking ‘‘Appraisal

13 Subcommittee’’ and inserting instead ‘‘Financial In14 stitutions Examination Council’’.

15 (e) REMISSION OF FUNDS TO THE TREASURY.—All

16 funds held by, and the right to collect all funds owed to,

17 the Appraisal Subcommittee on the effective date of this

18 section shall be transferred to the United States Treasury.

19 (f) REPAYMENT OF PREPAID REGISTRY FEES.—Be20 fore the effective date specified in subsection (g), the Ap21 praisal Subcommittee shall refund to the States any reg22 istry fees prepaid to the Subcommittee for the period after

23 December 31, 1995.

24 (g) EMPLOYEES TRANSFERRED.—
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1 (1) IDENTIFYING EMPLOYEES FOR TRANS2 FER.—

3 (A) IN GENERAL.—The Financial Institu4 tions Examination Council shall identify those

5 employees of the Appraisal Subcommittee for

6 transfer to the Council needed to perform func7 tions transferred from the Subcommittee to the

8 Council, in a manner that the Council, in its

9 sole discretion, deems equitable.

10 (B) IDENTIFIED EMPLOYEES TRANS11 FERRED.—All employees of the Appraisal Sub12 committee identified for transfer to the Council

13 under subparagraph (A) shall be transferred to

14 the Council for employment on the date set

15 forth in subsection (h).

16 (2) PRIORITY OF THIS ACT.—If any protection

17 provided under this section conflicts with any protec18 tion provided to transferred employees under section

19 3503 of title 5, United States Code, the provisions

20 of this section shall control.

21 (3) RIGHTS OF TRANSFERRED EMPLOYEES.—

22 (A) COMPARABLE POSITIONS.—Each em23 ployee transferred to the Financial Institutions

24 Examination Council shall, on the date of

25 transfer, be appointed to a position under the
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1 compensation system and performance evalua2 tion system of the Council that is comparable in

3 tenure and grade to that of the position the em4 ployee held on the enactment date of this Act.

5 (B) PAY.—

6 (i) IN GENERAL.—Except as provided

7 in clause (ii), each employee transferred to

8 the Financial Institutions Examination

9 Council under this section shall, during the

10 one-year period after the date of transfer,

11 receive pay at a rate not less than the

12 basic rate of pay that the employee re13 ceived at the Appraisal Subcommittee dur14 ing the one-year period immediately before

15 the enactment date of this Act.

16 (ii) EXCEPTIONS.—Clause (i) does not

17 limit the right of the Council to reduce a

18 transferred employee’s rate of basic pay—

19 (I) for cause;

20 (II) for unacceptable perform21 ance; or

22 (III) with the employee’s consent.

23 (iii) PROTECTION ONLY WHILE EM24 PLOYED.—Subparagraph (B) applies to a
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1 transferred employee only while that em2 ployee remains employed by the Council.

3 (4) RETIREMENT BENEFITS.—

4 (A) CONTINUATION OF EXISTING RETIRE5 MENT PLAN.—Except as otherwise permitted by

6 law, each employee who transfers to the Finan7 cial Institutions Examination Council under

8 this section shall remain enrolled in the retire9 ment plan (and any associated thrift savings

10 plan) in which he or she was enrolled on the

11 day before the date of transfer while he or she

12 remains employed by the Council.

13 (B) EMPLOYER’S CONTRIBUTION.—The

14 Financial Institutions Examination Council

15 shall pay any employer contributions to the re16 tirement plan in which each transferred em17 ployee is subject during his or her period of

18 service at the Council, as required under that

19 plan.

20 (5) NO PRIVATE RIGHT OF ACTION.—The sec21 tion does not provide any employee transferred to

22 the Financial Institutions Examination Council

23 under this section with any right of action to require

24 the Council, or any officer, employee, agent, or ad-
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1 ministrator thereof, to take any action under this

2 section.

3 (h) EFFECTIVE DATE.—This section shall take effect

4 ninety days from enactment, except that, unless otherwise

5 provided, subsections (f) and (g) shall take effect imme6 diately.

7 SEC. 225. ELIMINATE UNNECESSARY AND DUPLICATIVE

8 RECORDKEEPING AND REPORTING REQUIRE9 MENTS RELATING TO LOANS TO EXECUTIVE

10 OFFICERS AND PERMIT PARTICIPATION IN

11 EMPLOYEE BENEFIT PLANS.

12 (a) AMENDMENTS TO SECTION 22(h) OF THE FED13 ERAL RESERVE ACT.—Section 22(h) of the Federal Re14 serve Act (12 U.S.C. 375b(2)) is amended—

15 (1) EMPLOYEE BENEFIT PLANS.—In paragraph

16 (2)—

17 (A) by renumbering subparagraphs (A)

18 and (C) as clauses (i) through (iii) respectively;

19 (B) by striking ‘‘(2) Preferential terms

20 prohibited’’ and inserting in its place:

21 ‘‘(2) PREFERENTIAL TERMS PROHIBITED.—

22 ‘‘(A) IN GENERAL.’’; and

23 (C) by inserting at the end a new subpara24 graph (B) to read as follows:
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1 ‘‘(B) EXCEPTION.—Nothing in this para2 graph shall prohibit extensions of credit made

3 pursuant to a benefit or compensation program

4 widely available to employees of the member

5 bank.’’;

6 (2) EXCEPTION FOR EXTENSIONS OF CREDIT

7 TO EXECUTIVE OFFICERS AND DIRECTORS OF

8 NONBANK AFFILIATES.—In subsection (h)(8)(B) by

9 striking the phrase ‘‘, except as that subparagraph

10 makes applicable paragraph (2),’’; and

11 (3) RECORDKEEPING REQUIREMENTS.—In

12 paragraph (10), by adding at the end the following:

13 ‘‘The Board shall specify by regulation the record14 keeping required of member banks to ensure compli15 ance with this section. Compliance with the record16 keeping requirements adopted pursuant to this para17 graph shall satisfy the audit requirement of section

18 36(e) of the Federal Deposit Insurance Act, to the

19 extent that its requirements are applicable to this

20 section.’’.

21 (b) REPORTING REQUIREMENTS.—

22 (1) UNNECESSARY REPORTS.—Section 22(g) of

23 the Federal Reserve Act is amended by deleting

24 paragraphs (6) and (9) and in their entirety and re-
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1 numbering paragraphs (7), (8), and (10) as para2 graphs (6), (7), and (8), respectively.

3 (2) UNNECESSARY REPORTS.—Section 7(k) of

4 the Federal Deposit Insurance Act (12 U.S.C. 1817)

5 is amended to read as follows:

6 ‘‘(k) RESERVED.’’.

7 (3) UNNECESSARY REPORTS REGARDING LOANS

8 FROM CORRESPONDENT BANKS.—Section 106(b)(2)

9 of the Bank Holding Company Act Amendments of

10 1970 (12 U.S.C. 1972)) is amended—

11 (A) by deleting subparagraph (G) in its en12 tirety; and

13 (B) by redesignating subparagraphs (H)

14 and (I) as subparagraphs (G) and (H), respec15 tively.

16 SEC. 226. EXPANDED REGULATORY DISCRETION FOR

17 SMALL BANK EXAMINATIONS.

18 (a) TIME PERIOD DISCRETION.—Section 10(d)(4) of

19 the Federal Deposit Insurance Act (12 U.S.C. 1820(d)(4))

20 is amended—

21 (1) in the title, by striking ‘‘18-MONTH

22 RULE’’ and inserting ‘‘24-MONTH RULE’’; and

23 (2) in the first sentence, by striking ‘‘18-

24 month’’ and inserting ‘‘24-month’’.
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1 (b) SMALL BANK SIZE DISCRETION.—Section

2 10(d)(8) of the Federal Deposit Insurance Act (12 U.S.C.

3 1820(d)(8)) is amended by striking ‘‘$175,000,000’’ and

4 inserting ‘‘$250,000,000’’.

5 (c) INFLATION ADJUSTMENT.—Section

6 10(d) of the Federal Deposit Insurance Act (12

7 U.S.C. 1820(d)) is amended by adding at the

8 end thereof the following new paragraph:

9 ‘‘(9) The dollar amount in this section shall be

10 adjusted annually after December 31, 1994, by the

11 annual percentage increase in the Consumer Price

12 Index for Urban Wage Earners and Clerical Work13 ers published by the Bureau of Labor Statistics.’’.

14 SEC. 227. COST REIMBURSEMENT.

15 Section 1115 of the Right to Financial Privacy Act

16 (12 U.S.C. 3415) is amended by inserting ‘‘(including cor17 porate customers)’’ after ‘‘pertaining to a customer’’.

18 SEC. 228. IDENTIFICATION OF NONBANK FINANCIAL INSTI19 TUTION CUSTOMERS.

20 (a) IN GENERAL.—Subchapter 2 of chapter 53 of

21 title 31, United States Code, is amended by striking sec22 tion 5327.

23 (b) TECHNICAL AND CONFORMING AMENDMENT.—

24 Section 5321(a) of title 31, United States Code, is amend25 ed by striking paragraph (7).
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1 (c) CLERICAL AMENDMENT.—The table of sections

2 for subchapter 2 of chapter 53 of title 31, Untied States

3 Code, is amended by striking the item relating to section

4 5327.

5 SEC. 229. PAPERWORK REDUCTION REVIEW.

6 Not later than one hundred eighty days after the date

7 of enactment of this Act, each appropriate Federal bank8 ing agency, in consultation with insured depository institu9 tions and other interested parties, shall—

10 (1) review the extent to which current regula11 tions require insured depository institutions to

12 produce unnecessary internal written policies; and

13 (2) eliminate such requirements, where appro14 priate.

15 For purposes of this section, the terms ‘‘insured deposi16 tory institution’’ and ‘‘appropriate Federal banking agen17 cy’’ have the same meanings as in section 3 of the Federal

18 Deposit Insurance Act.

19 SEC. 230. REPEAL OF UNNECESSARY REPORTING REQUIRE20 MENTS.

21 Sections 122 and 477 of the Federal Deposit Insur22 ance Corporation Improvement Act of 1991 (Public Law

23 102–242) are hereby repealed.
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1 SEC. 231. DAILY CONFIRMATIONS FOR HOLD-IN-CUSTODY

2 REPURCHASE TRANSACTIONS.

3 Within one year after the date of enactment of this

4 section, the Secretary of the Treasury shall revise the reg5 ulation under section 15C of the Securities Exchange Act

6 of 1934 relating to the obligations of financial institutions

7 holding custody of securities subject to a repurchase

8 agreement to confirm, daily and in writing, the securities

9 that are subject to such repurchase agreement. Such revi10 sion shall permit the counterparty to such agreement to

11 waive in writing the right to obtain such daily written con12 firmation if the counterparty has received a disclosure, in

13 a form prescribed by the Secretary, that adequately in14 forms the counterparty of the benefits of receiving such

15 daily written confirmations.

16 SEC. 232. REQUIRED REGULATORY REVIEW OF REGULA17 TIONS.

18 (a) IN GENERAL.—The Financial Institutions Exam19 ination Council shall, within every ten-year period, conduct

20 a review of all of the regulations issued pursuant to its

21 or its representatives’ authority to identify outdated or

22 otherwise unnecessary regulatory requirements imposed

23 upon insured depository institutions.

24 (b) PROCESS.—In conducting the review required

25 under subsection (a), the Council shall—
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1 (1) categorize such regulations by type (such as

2 consumer regulations, safety and soundness regula3 tions, or such other designation as determined by

4 the Council); and

5 (2) at regular intervals, provide notice and so6 licit public comment on a particular category or cat7 egories of regulations, requesting commentators to

8 identify areas of such regulations considered out9 dated, unnecessary, or unduly burdensome.

10 The Council shall, over a ten-year period, ensure that all

11 categories of regulations have been set out for notice and

12 comment.

13 (c) REGUALTORY RESPONSE.—The Council shall—

14 (1) publish in the Federal Register a summary

15 of the comments received pursuant to this section,

16 identifying significant issues raised and providing

17 comment on such issues; and

18 (2) eliminate unnecessary regulations wherever

19 appropriate.

20 (d) REPORT TO CONGRESS.—The Council shall, with21 in thirty days of publishing the summary required under

22 subsection (c)(1), provide a report to the Congress sum23 marizing any significant issues raised during such com24 ment period, the relative merits of such issues, and wheth25 er the appropriate Federal banking agency involved can
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1 address the regulatory burdens associated with such issues

2 by regulation, or whether such concerns can only be ad3 dressed by legislation.

4 (e) DEFINITIONS.—For purposes of this section, the

5 terms ‘‘insured depository institution’’ and ‘‘appropriate

6 Federal banking agency’’ have the same meaning as in

7 section 3 of the Federal Deposit Insurance Act.

8 SEC. 233. COUNTRY RISK REQUIREMENTS.

9 (a) Section 905 of the International Lending Super10 vision Act (12 U.S.C. 3904) is amended—

11 (1) in subsection (a)(1), by striking ‘‘shall’’ and

12 inserting ‘‘may’’; and

13 (2) in subsection (b), by striking ‘‘shall’’ and

14 inserting ‘‘may’’.

15 (b) Section 905A of the International Lending Super16 vision Act (12 U.S.C. 3904a) is repealed.

17 SEC. 234. AUDIT COSTS.

18 (a) IN GENERAL.—Section 36 of the Federal Deposit

19 Insurance At (12 U.S.C. 1831m) (as added by section 112

20 of the Federal Deposit Insurance Corporation Improve21 ment Act of 1991) is amended as follows:

22 (1) AUDITOR ATTESTATIONS.—

23 (A) In subsection (a)(2)(A)(ii), by striking

24 ‘‘subsections (c) and (d)’’ and inserting ‘‘sub25 section (c)’’.
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1 (B) By striking subsection (c).

2 (C) In subsection (d), by deleting ‘‘(d)’’

3 and inserting ‘‘(c)’’.

4 (D) By striking subsection (e).

5 (2) INDEPENDENT AUDIT COMMITTEES.—

6 (A) In subsection (g)(1)(A), by striking

7 ‘‘entirely’’ and inserting ‘‘the majority of which

8 is’’.

9 (B) In subsection (g)(1), by inserting the

10 following new subparagraph:

11 ‘‘(D) EXEMPTIVE AUTHORITY.—Each ap12 propriate Federal banking agency shall, by reg13 ulation, exempt from the requirements of this

14 subsection all insured depository institutions

15 which face hardships in retaining competent di16 rector on their internal audit committees as a

17 result of this subsection. In determining what

18 types of institutions will be exempted, the agen19 cy shall consider such factors as the size of the

20 institution and the availability of competent

21 outside director in the community.’’.

22 (3) PUBLIC AVAILABILITY.—In subsection

23 (a)(3), by inserting at the end the following new sen24 tence: ‘‘Notwithstanding the previous sentence, the

25 Corporation and the appropriate Federal banking
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1 agencies may designate certain information as privi2 leged and confidential and not available to the

3 public.’’.

4 SEC. 235. DUE PROCESS PROTECTIONS.

5 (a) ATTACHMENT OF ASSETS.—

6 (1) INSURED DEPOSITORY INSTITUTIONS.—

7 (A) Section 11(d)(19) of the Federal De8 posit Insurance Act (12 U.S.C. 1821(d)(19)) is

9 amended—

10 (i) in subparagraph (A), by striking

11 ‘‘without regard’’ and all that follows

12 through ‘‘immediate’’; and

13 (ii) in subparagraph (B), by striking

14 ‘‘(as modified with respect to such proceed15 ing by subparagraph (A))’’.

16 (B) Section 8(b) of the Federal Deposit

17 Insurance Act (12 U.S.C. 1818(b)) is amended

18 by redesignating subsection (b)(6)(F) as sub19 section (b)(6)(G), and inserting after subsection

20 (b)(6)(E) the following:

21 ‘‘(F) prohibit such person from withdraw22 ing, transferring, removing, dissipating, or dis23 posing of any funds, assets or other property

24 where injury, loss, or damage to such property

25 is irreparable and immediate; and’’.
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1 (C) Section 8(i) of the Federal Deposit In2 surance Act (12 U.S.C. 1818(i)) is amended by

3 striking paragraph (4)(B) and inserting the

4 following:

5 ‘‘(B) STANDARD.—Rule 65 of the Federal

6 Rules of Civil Procedure shall apply with re7 spect to any proceeding under this paragraph.’’.

8 (2) CREDIT UNIONS.—

9 (A) Section 207(b)(2)(H) of the Federal

10 Credit Union Act (12 U.S.C. 1787(b)(2)(H)) is

11 amended—

12 (i) in clause (i), by striking ‘‘without

13 regard’’ and all that follows through ‘‘im14 mediate’’; and

15 (ii) in clause (ii), by striking ‘‘(as

16 modified with respect to such proceeding

17 by clause (i))’’.

18 (B) Section 206(e)(3) of the Federal Cred19 it Union Act (12 U.S.C. 1786(e)(3)) is amend20 ed by redesignating subsection (e)(3)(F) as sub21 section (e)(3)(G), and inserting after subsection

22 (e)(3)(E) the following:

23 ‘‘(F) prohibit such person from withdraw24 ing, transferring, removing, dissipating, or dis25 posing of any funds, assets or other property
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1 where injury, loss, or damage to such property

2 is irreparable and immediate; and’’.

3 SEC. 236. CULPABILITY STANDARDS FOR OUTSIDE DIREC4 TORS.

5 Section 3(u) of the Federal Deposit Insurance Act

6 (12 U.S.C. 1813(u)) is amended—

7 (1) in paragraph (1), by inserting ‘‘(other than

8 an outside director)’’ after ‘‘director’’;

9 (2) in paragraph (3), by inserting ‘‘(other than

10 an outside director)’’ after ‘‘any other person’’; and

11 (3) in paragraph (4), by inserting ‘‘or outside

12 director’’ after ‘‘or accountant)’’.

13 SEC. 237. RULES ON DEPOSIT TAKING.

14 Section 29(g)(3) of the Federal Deposit Insurance

15 Act (12 U.S.C. 1831f(g)(3)) is amended—

16 (1) by inserting ‘‘undercapitalized’’ after ‘‘in17 cludes any’’;

18 (2) by inserting ‘‘undercapitalized’’ after ‘‘em19 ployee of any’’; and

20 (3) by striking ‘‘that is not well capitalized’’.

21 SEC. 238. TRANSITION PERIOD FOR NEW REGULATIONS.

22 Section 302(b) of the Riegle Community Develop23 ment and Regulatory Improvement Act of 1994 is amend24 ed by striking ‘‘a calendar quarter’’ and inserting ‘‘the

25 semiannual period’’.
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1 SEC. 239. FOREIGN BANK APPLICATIONS.

2 Section 7(d) of the International Banking Act of

3 1978 (12 U.S.C. 3105(d)) is amended as follows:

4 (1) By striking paragraphs (1) and (2) and in5 serting in lieu thereof the following:

6 ‘‘(1) PRIOR REVIEW REQUIRED.—Before any

7 foreign bank application to establish a branch or an

8 agency, or acquire ownership or control of a com9 mercial lending company may be approved by any

10 appropriate State bank supervisor or the Comptrol11 ler of the Currency, the application must first be

12 submitted for review to the Board for a period of

13 not more than one hundred eighty days. The pur14 pose of the review is to determine whether approval

15 of any application would place at risk the safe and

16 sound operation of the United States banking

17 system.

18 ‘‘(2) AUTHORITY OF THE BOARD.—Based on

19 the determination described in paragraph (1), the

20 Board is authorized to—

21 ‘‘(A) deny the application;

22 ‘‘(B) extend for one hundred eighty days

23 the period for review of any application, after

24 providing notice of, and the reasons for, the ex25 tension to the applicant and any appropriate
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1 State bank supervisor or the Comptroller of the

2 Currency; or

3 ‘‘(C) approve the application, either by af4 firmative action or by taking no action during

5 the 180 day review period.’’.

6 (2) In paragraph (3), by redesignating subpara7 graph (A) through (D) as subparagraphs (C)

8 through (F); by striking all from ‘‘In’’ through ‘‘ac9 count—’’; and by inserting the following: ‘‘In mak10 ing any determination under paragraph (1), the

11 Board may consider—

12 ‘‘(A) whether the foreign bank engages di13 rectly in the business of banking outside the

14 United States and is subject to comprehensive

15 supervision or regulation on a consolidated

16 basis by the appropriate authorities in its home

17 country;

18 ‘‘(B) whether the foreign bank has fur19 nished to the Board the information it needs to

20 adequately assess the application;’’.

21 SEC. 240. DUPLICATE EXAMINATION OF FOREIGN BANKS.

22 Section 7(c)(1) of the International Banking Act of

23 1978 (12 U.S.C. 3105(b)(1)) is amended by striking sub24 paragraphs (B), (C), and (D) and inserting in lieu thereof:
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1 ‘‘(B) RELIANCE ON PRIMARY SUPER2 VISOR.—In order to avoid unnecessary duplica3 tion and cost, the Board shall, to the extent

4 practicable, rely upon the reports of examina5 tions made by the Comptroller, the Federal De6 posit Insurance Corporation, or the appropriate

7 State bank supervisor in achieving the purposes

8 of this subsection.’’

9 ‘‘(C) ON-SITE EXAMINATION.—Each

10 branch or agency of a foreign bank shall be

11 subject to on-site examination on the same

12 schedule that a comparable national or State

13 nonmember bank would be examined by the

14 Comptroller of the Currency of the Federal De15 posit Insurance Corporation.

16 ‘‘(D) COST OF EXAMINATIONS.—The cost

17 of any examination undertaken pursuant to

18 subparagraph (A) shall be assessed against and

19 collected from the foreign bank or the foreign

20 company that controls the foreign bank, as the

21 case may be, but only to the same extent that

22 fees are collected by the Board for examination

23 of any State member insured bank.’’
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1 SEC. 241. SECOND MORTGAGES.

2 Section 103 of the Truth in Lending Act (15 U.S.C.

3 1602 is amended—

4 (1) in paragraph (aa)(1) by inserting ‘‘a subor5 dinate mortgage on’’ after ‘‘secured by’’; and

6 (2) by deleting ‘‘a residential mortgage trans7 action’’.

8 TITLE III—LENDER LIABILITY

9 SEC. 301. LENDER LIABILITY.

10 (a) IN GENERAL.—The Federal Deposit Insurance

11 Act (12 U.S.C. 1811 et seq.) is amended by adding after

12 section 44, the following new section:

13 ‘‘SEC. 45. LENDER, FIDUCIARY AND GOVERNMENT AGENCY

14 ENVIRONMENTAL LIABILITIES.

15 ‘‘(a) LENDER ENVIRONMENTAL LIABILITY.—

16 ‘‘(1) Notwithstanding any other provision or

17 rule of Federal law, no lender shall be liable pursu18 ant to a Federal environmental law, except as pro19 vided in this section.

20 ‘‘(2) A lender shall only be liable pursuant to

21 a Federal environmental law when the lender actu22 ally participates in management of another person’s

23 activities which create liability under the same Fed24 eral environmental law.

25 ‘‘(3) For purposes of this section—
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1 ‘‘(A) the term ‘participate in management’

2 means actually participating in the management

3 or operational affairs of other persons’ activi4 ties, and does not include merely having the ca5 pacity to influence, or the unexercised right to

6 control such activities;

7 ‘‘(B) a person shall be considered to ‘par8 ticipate in management’ while a borrower is still

9 in possession of property, only if such person—

10 ‘‘(i) exercises decisionmaking control

11 over the environmental compliance of a

12 borrower, such that the person has under13 taken responsibility for the hazardous sub14 stance handling or disposal practices of the

15 borrower; or

16 ‘‘(ii) exercises control at a level com17 parable to that of a manager of the enter18 prise of the borrower, such that the person

19 has assumed or manifested responsibility

20 for the overall management of the enter21 prise encompassing day-to-day decision22 making with respect to environmental com23 pliance, or with respect to substantially all

24 of the operational aspects (as distinguished

25 from financial or administrative aspects) of
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1 the enterprise, other than environmental

2 compliance;

3 ‘‘(C) the term ‘participate in management’

4 does not include engaging in an act or failing

5 to act prior to the time that an extension of

6 credit is made or a security interest is created

7 in property; and

8 ‘‘(D) the term ‘participate in management’

9 does not include—

10 ‘‘(i) holding an extension of credit or

11 a security interest or abandoning or releas12 ing an extension of credit or a security in13 terest;

14 ‘‘(ii) including in the terms of an ex15 tension of credit, or in a contract or secu16 rity agreement relating to such an exten17 sion, covenants, warranties, or other terms

18 and conditions that relate to environmental

19 compliance;

20 ‘‘(iii) monitoring or enforcing the

21 terms and conditions of an extension of

22 credit or security interest;

23 ‘‘(iv) monitoring or undertaking one

24 or more inspections of property;
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1 ‘‘(v) requiring or conducting a re2 sponse action or other lawful means of ad3 dressing the release or threatened release

4 of a hazardous substance in connection

5 with property prior to, during, or upon the

6 expiration of the term of an extension of

7 credit;

8 ‘‘(vi) providing financial or other ad9 vice or counseling in an effort to mitigate,

10 prevent, or cure default or diminution in

11 the value of the property;

12 ‘‘(vii) restructuring, renegotiating, or

13 otherwise agreeing to alter the terms and

14 conditions of an extension of credit or se15 curity interest, or exercising forbearance;

16 or

17 ‘‘(viii) exercising other remedies that

18 may be available under applicable law for

19 the breach of any term or condition of the

20 extension of credit or security agreement;

21 if such actions do not rise to the level of partici22 pating in management, as defined in subpara23 graphs (A) and (B).

24 ‘‘(E) When a lender did not participate in

25 management of property prior to foreclosure,
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1 then the lender shall not be liable even if such

2 person forecloses on property, sells, re-leases, or

3 liquidates property, maintains business activi4 ties, winds up operations, or undertakes any re5 sponse action with respect to property, or takes

6 other measures to preserve, protect, or prepare

7 property prior to sale or disposition, if such

8 person seeks to sell, release, or otherwise divest

9 the property at the earliest practical, commer10 cially reasonable time, on commercially reason11 able terms, taking into account market condi12 tions and legal and regulatory requirements.

13 ‘‘(4) The liability of any lender that is liable

14 under any federal environmental law shall be limited

15 to the unpaid balance of any outstanding extension

16 of credit related to the property or activities forming

17 the basis for the liability.

18 ‘‘(b) FIDUCIARY ENVIRONMENTAL LIABILITY.—

19 ‘‘(1) Notwithstanding any other provision or

20 rule of Federal law, no fiduciary shall be liable pur21 suant to any Federal environmental law, except as

22 provided in this section.

23 ‘‘(2)(A) Subject to subparagraphs (B) and (C),

24 a fiduciary holding title to property or otherwise af25 filiated with property solely in a fiduciary capacity
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1 shall be personally subject to the obligations and li2 abilities of any person under any Federal environ3 mental law, to the same extent as if the property

4 were held by the fiduciary free of trust.

5 ‘‘(B) The personal obligations and liabilities of

6 a fiduciary referred to in subparagraph (A) shall be

7 limited to the extent to which the assets of the trust

8 or estate are sufficient to indemnify the fiduciary,

9 unless—

10 ‘‘(i) the obligations and liabilities would

11 have arisen even if the person had not served

12 as a fiduciary;

13 ‘‘(ii) the fiduciary’s own failure to exercise

14 due care with respect to property caused or

15 contributed to the release of hazardous sub16 stances following establishment of the trust, es17 tate, or fiduciary relationship;

18 ‘‘(iii) the fiduciary had a role in establish19 ing the trust, estate, or fiduciary relationship,

20 and such trust, estate, or fiduciary relationship

21 has no objectively reasonable or substantial pur22 pose apart from the avoidance or limitation of

23 liability under an environmental law.
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1 ‘‘(C) a fiduciary shall not be personally liable

2 for undertaking or directing another to undertake a

3 response action.

4 ‘‘(3) Nothing in this section shall be construed

5 to affect the liability, if any, of a person who—

6 ‘‘(A)(i) acts in a capacity other than a fi7 duciary capacity; and

8 ‘‘(ii) directly or indirectly benefits from a

9 trust or fiduciary relationship; or

10 ‘‘(B)(i) is a beneficiary and a fiduciary

11 with respect to the same fiduciary estate; and

12 ‘‘(ii) as a fiduciary, receives benefits that

13 exceed customary or reasonable compensation,

14 and incidental benefits, permitted under other

15 applicable laws.

16 ‘‘(c) DEFINITIONS.—For purposes of subsections (a)

17 and (b):

18 ‘‘(1) The term ‘Federal environmental law’

19 means any Federal statute or rule of common law

20 with the purpose of protection of the environment

21 and any Federal regulation promulgated thereunder

22 and any State statute or regulation created as a fed23 erally approved or delegated program implementing

24 these laws, including but not limited to 7 U.S.C.

25 136–136y, 15 U.S.C. 2601–2692, 15 U.S.C. 2641–
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1 2654, 33 U.S.C. 1251–1387, 33 U.S.C. 2701–2761,

2 42 U.S.C. 7401–7642, 42 U.S.C. 6901–6991i, 42

3 U.S.C. 9601–9675, and 42 U.S.C. 13101–13109.

4 ‘‘(2) The term ‘extension of credit’ means the

5 making or renewal of any loan, a granting of a line

6 of credit or extending credit in any manner, such as

7 an advance by means of an overdraft or the issuance

8 of a standby letter of credit, and a lease finance

9 transaction—

10 ‘‘(A) in which the lessor does not initially

11 select the leased property and does not, during

12 the lease term, control the daily operation or

13 maintenance of the property; or

14 ‘‘(B) that conforms with regulations issued

15 by the appropriate Federal banking agency or

16 the appropriate State bank supervisory (as

17 these terms are defined in section 3 of the Fed18 eral Deposit Insurance Act or with regulations

19 issued by the National Credit Union Adminis20 tration Board, as appropriate.

21 ‘‘(3) The term ‘fiduciary’ means a person who

22 acts for the exclusive benefit of another person as a

23 bona fide fiduciary within the meaning of section

24 3(31) of the Employee Retirement Income Security

25 Act of 1974, trustee, executor, administrator, custo-
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1 dian, guardian, conservator, receiver, committee of

2 estates of lunatics or other disabled persons, or per3 sonal representative; except, that the term ‘fiduciary’

4 does not include any person—

5 ‘‘(A) who owns, or controls, is affiliated

6 with or takes any action with respect to prop7 erty on behalf of or for the benefit of a lender

8 or takes any action to protect a lender’s exten9 sion of credit or security interest (any such per10 son shall be treated as a lender under sub11 section (a) of this section); or

12 ‘‘(B) who is acting as a fiduciary with re13 spect to a trust or other fiduciary estate that—

14 ‘‘(i) was not created as part of, or to

15 facilitate, one or more estate plans or pur16 suant to the incapacity of a natural per17 son; and

18 ‘‘(ii) was organized for the primary

19 purpose of, or is engaged in, actively carry20 ing on a trade or business for profit.

21 ‘‘(4) The term ‘financial or administrative as22 pect’ means a function such as a credit manager, ac23 counts payable officer, accounts receivable officer,

24 personnel manager, comptroller, or chief financial of25 ficer, or any similar function.
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1 ‘‘(5) The term ‘foreclosure’ and ‘foreclose’

2 means, respectively, acquiring, and to acquire, prop3 erty through—

4 ‘‘(A) purchase at sale under a judgment or

5 decree, a power of sale, a nonjudicial fore6 closure sale, or from a trustee, deed in lieu of

7 foreclosure, or similar conveyance, or through

8 repossession, if such property was security for

9 an extension of credit previously contracted;

10 ‘‘(B) conveyance pursuant to an extension

11 of credit previously contracted, including, but

12 not limited to, the termination of a lease agree13 ment; or

14 ‘‘(C) any other formal or informal manner

15 by which the person acquires, for subsequent

16 disposition, possession of collateral in order to

17 protect the security interest of the person.

18 ‘‘(6) The term ‘hazardous substance’ means any

19 chemical, biological, organic, inorganic, or radio20 active pollutants, contaminants, materials, waste or

21 other substances regulated under, defined, listed or

22 included in any Federal environmental law.

23 ‘‘(7) The term ‘lender’ means—

24 ‘‘(A) a person that makes a bona fide ex25 tension of credit to or takes a security interest
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1 from another person and includes a successor

2 or assign of the person which makes the exten3 sion of credit or takes the security interest;

4 ‘‘(B) the Federal National Mortgage Asso5 ciation, the Federal Home Loan Mortgage Cor6 poration, the Federal Agricultural Mortgage

7 Corporation, or other entity that in a bona fide

8 manner is engaged in the business of buying or

9 selling loans on interests therein;

10 ‘‘(C) any person engaged in the business of

11 insuring or guaranteeing against a default in

12 the repayment of an extension of credit, or act13 ing as a surety with respect to an extension of

14 credit, to other persons; or

15 ‘‘(D) any person regularly engaged in the

16 business of providing title insurance who ac17 quires property as a result of assignment or

18 conveyance in the course of underwriting claims

19 and claims settlement.

20 ‘‘(8) The term ‘operational aspect’ means a

21 function such as a facility or plant manager, oper22 ations manager, chief operating officer, or chief ex23 ecutive officer.

24 ‘‘(9) The term ‘person’ means an individual,

25 firm, corporation, association, partnership, consor-
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1 tium, joint venture, commercial entity, United States

2 Government, State, municipality, commission, politi3 cal subdivision of a State, or any interstate body.

4 ‘‘(10) The term ‘property’ means real, personal

5 and mixed property.

6 ‘‘(11) The term ‘response action’ shall have the

7 same meaning as that term is defined in section 101

8 of the Comprehensive Environmental Response,

9 Compensation and Liability Act.

10 ‘‘(12) The term ‘security interest’ means a

11 right under a mortgage, deed of trust, assignment,

12 judgment lien, pledge, security agreement, factoring

13 agreement, or lease, or any other right accruing to

14 a person to secure the repayment of money, the per15 formance of a duty, or some other obligation.

16 ‘‘(d) SAVINGS CLAUSE.—Nothing in subsections (a)

17 (b), or (c), shall—

18 ‘‘(1) affect the rights or immunities or other de19 fenses that are already available to lenders or fidu20 ciaries under any Federal environmental law;

21 ‘‘(2) be construed to create any liability for any

22 lender or fiduciary; or

23 ‘‘(3) create a private right of action against any

24 lender or fiduciary.
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1 ‘‘(e) FEDERAL BANKING AND LENDING AGENCY EN2 VIRONMENTAL LIABILITY.—

3 ‘‘(1) GOVERNMENTAL ENTITIES.—

4 ‘‘(A) BANKING AND LENDING AGENCIES.—

5 Except as provided in paragraph (C), a Federal

6 banking or lending agency shall not be liable

7 under any law imposing strict liability for the

8 release or threatened release of petroleum or a

9 hazardous substance at or from property (in10 cluding any right or interest therein) ac11 quired—

12 ‘‘(i) in connection with the exercise of

13 receivership or conservatorship authority,

14 or the liquidation or winding up of the af15 fairs of an insured depository institution,

16 including any of its subsidiaries, and

17 bridge bank;

18 ‘‘(ii) in connection with the provision

19 of loans, discounts, advances, guarantees,

20 insurance or other financial assistance; or

21 ‘‘(iii) in connection with property re22 ceived in any civil or criminal proceeding,

23 or administrative enforcement action,

24 whether by settlement or order.
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1 ‘‘(B) APPLICATION OF STATE LAW.—Noth2 ing in paragraph (e) shall be construed as pre3 empting, affecting, applying to, or modifying

4 any State law, or any rights, actions, cause of

5 action, or obligations under State law, except

6 that liability under State law shall not exceed

7 the value of the agency’s interest in the asset

8 giving rise to such liability. Nothing in this sec9 tion shall be construed to prevent a Federal

10 banking or lending agency from agreeing with

11 a State to transfer property to such State in

12 lieu of any liability that might otherwise be im13 posed under State law.

14 ‘‘(C) LIMITATION.—Notwithstanding para15 graph (A), and subject to section 107(d) of the

16 Comprehensive Environmental Response, Com17 pensation, and Liability Act of 1980, a Federal

18 banking or lending agency that directly caused

19 or materially contributed to the release of pe20 troleum or a hazardous substance may be liable

21 for removal, remedial, or other response action

22 pertaining to that release.

23 ‘‘(D) SUBSEQUENT PURCHASER.—The im24 munity provided by paragraphs (A) and (B)

25 shall extend to the first subsequent purchaser
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1 of property described in such paragraph from a

2 Federal banking or lending agency, unless such

3 purchaser—

4 ‘‘(i) would otherwise be liable or po5 tentially liable for all or part of the costs

6 of the removal, remedial, or other response

7 action due to a prior relationship with the

8 property;

9 ‘‘(ii) is or was affiliated with or related to

10 a party described in subparagraph (i);

11 ‘‘(iii) fails to agree to take reasonable

12 steps necessary to abate the release or

13 threatened release or to protect public

14 health and safety in a manner consistent

15 with the purposes of applicable Federal en16 vironmental laws; or

17 ‘‘(iv) directly causes or significantly

18 and materially contributes to any addi19 tional release or threatened release on the

20 property.

21 ‘‘(E) FEDERAL OR STATE ACTION.—Not22 withstanding subparagraph (D), if a Federal

23 agency or State environmental agency is re24 quired to take remedial action due to the failure

25 of a subsequent purchaser to carry out, in good
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1 faith, the agreement described in subpararaph

2 (D)(iii), such subsequent purchaser shall reim3 burse the Federal or State environmental agen4 cy for the costs of such remedial action. Any

5 such reimbursement shall not exceed the in6 crease in the fair market value of the property

7 attributable to the remedial action.

8 ‘‘(2) LIEN EXEMPTION.—Notwithstanding any

9 other provision of law, any property held by a subse10 quent purchaser referred to in subsection (a)(4) or

11 held by a Federal banking or lending agency shall

12 not be subject to any lien for costs or damages asso13 ciated with the release or threatened release of pe14 troleum or a hazardous substance existing at the

15 time of the transfer.

16 ‘‘(3) EXEMPTION FROM COVENANTS TO REME17 DIATE.—A Federal banking or lending agency shall

18 be exempt from any law requiring such agency to

19 grant covenants warranting that a removal, reme20 dial, or other response action has been, or will in the

21 future be, taken with respect to property acquired in

22 the manner described in paragraph (e)(1)(A).

23 ‘‘(4) DEFINITIONS.—For purposes of subsection

24 (e), the following definitions shall apply:
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1 ‘‘(A) The term ‘Federal banking or lending

2 agency’ means the Corporation, the Resolution

3 Trust Corporation, the Board of Governors of

4 the Federal Reserve System, the Comptroller of

5 the Currency, the Office of Thrift Supervision,

6 a Federal Reserve Bank, a Federal Home Loan

7 Bank, the Department of Housing and Urban

8 Development, the National Credit Union Ad9 ministration Board, the Farm Credit Adminis10 tration, the Farm Credit System Insurance

11 Corporation, the Farm Credit System Assist12 ance Board, the Farmers Home Administration,

13 the Rural Electrification Administration, the

14 Small Business Administration, and any other

15 Federal agency acting in a similar capacity, in

16 any of their capacities, and their agents or ap17 pointees.

18 ‘‘(B) The term ‘hazardous substance’ has

19 the same meaning as in section 101(14) of the

20 Comprehensive Environmental Response, Com21 pensation, and Liability Act of 1980.

22 ‘‘(C) The term ‘release’ has the same

23 meaning as in section 101(22) of the Com24 prehensive Environmental Response, Compensa25 tion, and Liability Act of 1980, and includes
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1 the use, storage, disposal, treatment, genera2 tion, or transportation of a hazardous sub3 stance.

4 ‘‘(5) SAVINGS CLAUSE.—Nothing in subsection

5 (e) shall—

6 ‘‘(A) affect the rights or immunities or

7 other defenses that are available under this Act

8 or other applicable law to any party, subject to

9 the provisions of this section;

10 ‘‘(B) be construed to create any liability

11 for any party; or

12 ‘‘(C) create a private right of action

13 against an insured depository institution or

14 lender or against a Federal banking or lending

15 agency.’’.

16 (b) EFFECTIVE DATE.—This section shall take effect

17 upon the date of enactment and shall apply to any claim

18 against any lender, fiduciary or government agency under

19 any Federal environmental law that has not been finally

20 resolved by adjudication or settlement prior to enactment.

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