I

104TH CONGRESS

2D SESSION H. R. 3567

To fully capitalize the deposit insurance funds, to provide regulatory relief

for insured depository institutions and depository institution holding companies, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 4, 1996

Mr. BEREUTER introduced the following bill; which was referred to the

Committee on Banking and Financial Services

A BILL

To fully capitalize the deposit insurance funds, to provide

regulatory relief for insured depository institutions and

depository institution holding companies, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Federal Deposit Insurance Funds and Regulatory Relief

6 Act of 1996’’.

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

8 this Act is as follows:
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Sec. 1. Short title; table of contents.

TITLE I—THRIFT AND BANK CHARTER MERGER

Subtitle A—Recapitalization of Savings Association Insurance Fund

Sec. 101. Special assessment to capitalize SAIF.

Subtitle B—Status of Banks and Savings Associations

Sec. 111. Comprehensive review of charter merger.

Subtitle C—Merger of Insurance Funds

Sec. 121. Merger of BIF and SAIF.

Subtitle D—FICO INTEREST COSTS SHARED

Sec. 131. Financing corporation assessments shared proportionally by all insured depository institutions.

Subtitle E—Refunds of Excess Amounts in Deposit Fund

Sec. 141. Refund of amounts in deposit insurance fund in excess of designated

reserve amount.

Subtitle F—Limitation on Assessments

Sec. 151. Assessments authorized only if needed to maintain the reserve ratio

of a deposit insurance fund.

Subtitle G—Miscellaneous Provisions

Sec. 161. Definitions.

TITLE II—TRANSITIONAL PROVISIONS

Sec. 201. Applicability of FICO assessments to certain SAIF-assessable deposits until merger of BIF and SAIF.

Sec. 202. Deposit insurance fund cross guarantees.

Sec. 203. Savings association insurance fund member assessment rate.

Sec. 204. Deposit shifts between BIF and SAIF member subsidiaries of the

same holding company.

Sec. 205. Transfer of Federal reserve surplus funds to meet FICO carrying

costs.

TITLE III—REDUCTIONS IN GOVERNMENT OVERREGULATION

Sec. 300. Short title.

Subtitle A—The Home Mortgage Process

Sec. 301. Regulatory authority over disclosures and escrow accounts under

RESPA transferred to Federal Reserve Board.

Sec. 302. Simplification and unification of disclosures required under RESPA

and TILA for mortgage transactions.

Sec. 303. Increased regulatory flexibility under the Truth in Lending Act.

Sec. 304. Reductions in RESPA regulatory burdens; clarifying amendments.

Sec. 305. Disclosures for adjustable rate mortgages.

Sec. 306. Certain charges.
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Sec. 307. Exemptions from rescission.

Sec. 308. Recovery of fees.

Sec. 309. Home ownership debt counseling notification.

Sec. 310. Home Mortgage Disclosure Act.

Subtitle B—Community Reinvestment Act Amendments

Sec. 321. Expression of congressional intent.

Sec. 322. Community Reinvestment Act exemption.

Sec. 323. Community input and conclusive rating.

Sec. 324. Special purpose financial institutions.

Sec. 325. Increased incentives for lending to low- and moderate-income communities.

Sec. 326. Prohibition on additional reporting under CRA.

Sec. 327. Technical amendment.

Sec. 328. Duplicative reporting.

Sec. 329. CRA congressional oversight.

Sec. 330. Consultation among examiners.

Sec. 331. Limitation on regulations.

Subtitle C—Consumer Banking Reforms

Sec. 341. Truth in Savings.

Sec. 342. Information sharing.

Sec. 343. Electronic Fund Transfer Act clarification.

Sec. 344. Limit on restitution for Truth in Lending violations if safety and

soundness of violator would be affected.

Subtitle D—Equal Credit Opportunity Act Amendments

Sec. 351. Short title.

Sec. 352. Findings and purpose.

Sec. 353. Equal Credit Opportunity Act amendments.

Sec. 354. Fair Credit Reporting Act amendments.

Sec. 355. Incentives for self-testing.

Sec. 356. Credit scoring systems.

Sec. 357. Consultation by Attorney General required in nonreferral cases.

Sec. 358. Effective date.

Subtitle E—Consumer Leasing Act Amendments

Sec. 361. Short title.

Sec. 362. Congressional findings and declaration of purpose.

Sec. 363. Regulations.

Sec. 364. Consumer lease advertising.

Sec. 365. Statutory penalties.

TITLE IV—STREAMLINING GOVERNMENT REGULATIONS

Subtitle A—Regulatory Approval Issues

Sec. 401. Streamlined nonbanking acquisitions by well capitalized and well

managed banking organizations.

Sec. 402. Streamlined bank acquisitions by well capitalized and well managed

banking organizations.

Sec. 403. Eliminate filing and approval requirements for insured depository institutions already controlled by the same holding company.

Sec. 404. Eliminate redundant approval requirement for Oakar transactions.
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Sec. 405. Elimination of duplicative requirements imposed upon bank holding

companies and other regulatory relief under the Home Owners’

Loan Act.

Sec. 406. Eliminate requirement that approval be obtained for divestitures.

Sec. 407. Eliminate unnecessary branch applications.

Sec. 408. Eliminate branch applications and requirements for ATMs and similar facilities.

Sec. 409. Eliminate requirement for approval of investments in bank premises

for well capitalized and well managed banks.

Sec. 410. Eliminate unnecessary filing for officer and director appointments.

Sec. 411. Streamlining process for determining new nonbanking activities.

Sec. 412. Disposition of foreclosed assets.

Sec. 413. Increase in certain credit union loan ceilings.

Subtitle B—Streamlining of Government Regulations; Miscellaneous Provisions

Sec. 421. Eliminate the per-branch capital requirement for national banks and

State member banks.

Sec. 422. Branch closures.

Sec. 423. Amendments to the Depository Institutions Management Interlocks

Act.

Sec. 424. Acceleration of repayment to Treasury.

Sec. 425. Eliminate unnecessary and duplicative recordkeeping and reporting

requirements relating to loans to executive officers and permit

participation in employee benefit plans.

Sec. 426. Expanded regulatory discretion for small bank examinations.

Sec. 427. Cost reimbursement.

Sec. 428. Identification of foreign nonbank financial institution customers.

Sec. 429. Paperwork reduction review.

Sec. 430. Daily confirmations for hold-in-custody repurchase transactions.

Sec. 431. Required regulatory review of regulations.

Sec. 432. Country risk requirements.

Sec. 433. Audit costs.

Sec. 434. Standards for director and officer liability.

Sec. 435. Foreign bank applications.

Sec. 436. Duplicate examination of foreign banks.

Sec. 437. Second mortgages.

Sec. 438. Streamlining FDIC approval of new State bank powers.

Sec. 439. Repeal of call report attestation requirement.

Sec. 440. Authorizing bank service companies to organize as limited liability

partnerships.

Sec. 441. Bank investments in Edge Act and agreement corporations.

Sec. 442. Report on the reconciliation of differences between regulatory accounting principles and generally accepted accounting principles.

Sec. 443. Waivers authorized for residency requirement for national bank directors.

TITLE V—LENDER LIABILITY

Sec. 501. Lender liability.

TITLE VI—ANNUAL STUDY AND REPORT ON IMPACT ON

LENDING TO SMALL BUSINESS

Sec. 601. Annual study and report.
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1 TITLE I—THRIFT AND BANK

2 CHARTER MERGER

3 Subtitle A—Recapitalization of

4 Savings Association Insurance

5 Fund

6 SEC. 101. SPECIAL ASSESSMENT TO CAPITALIZE SAIF.

7 (a) IN GENERAL.—Except as provided in subsection

8 (f), the Board of Directors shall impose a special assess9 ment on the SAIF-assessable deposits of each insured de10 pository institution at a rate applicable to all such institu11 tions that the Board of Directors, in its sole discretion,

12 determines (after taking into account the adjustments de13 scribed in subsections (g) through (j)) will cause the Sav14 ings Association Insurance Fund to achieve the designated

15 reserve ratio on January 1, 1998.

16 (b) FACTORS TO BE CONSIDERED.—In carrying out

17 subsection (a), the Board of Directors shall base its deter18 mination on—

19 (1) the monthly Savings Association Insurance

20 Fund balance most recently calculated;

21 (2) data on insured deposits reported in the

22 most recent reports of condition filed not later than

23 70 days before the date of enactment of this Act by

24 insured depository institutions; and
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1 (3) any other factors that the Board of Direc2 tors deems appropriate.

3 (c) DATE OF DETERMINATION.—For purposes of

4 subsection (a), the amount of the SAIF-assessable depos5 its of an insured depository institution shall be determined

6 as of March 31, 1995.

7 (d) DATE PAYMENT DUE.—The special assessment

8 imposed under this section shall be—

9 (1) due on January 1, 1998; and

10 (2) paid to the Corporation on the later of—

11 (A) January 1, 1998; or

12 (B) such other date as the Corporation

13 shall prescribe, but not later than March 1,

14 1998.

15 (e) ASSESSMENT DEPOSITED IN SAIF.—Notwith16 standing any other provision of law, the proceeds of the

17 special assessment imposed under this section shall be de18 posited in the Savings Association Insurance Fund.

19 (f) EXEMPTIONS FOR CERTAIN INSTITUTIONS.—

20 (1) EXEMPTION FOR WEAK INSTITUTIONS.—

21 The Board of Directors may, by order, in its sole

22 discretion, exempt any insured depository institution

23 that the Board of Directors determines to be weak,

24 from paying the special assessment imposed under

25 this section if the Board of Directors determines
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1 that the exemption would reduce risk to the Savings

2 Association Insurance Fund.

3 (2) GUIDELINES REQUIRED.—Not later than 30

4 days after the date of enactment of this Act, the

5 Board of Directors shall prescribe guidelines setting

6 forth the criteria that the Board of Directors will

7 use in exempting institutions under paragraph (1).

8 Such guidelines shall be published in the Federal

9 Register.

10 (3) EXEMPTION FOR CERTAIN NEWLY CHAR11 TERED AND OTHER DEFINED INSTITUTIONS.—

12 (A) IN GENERAL.—In addition to the insti13 tutions exempted from paying the special as14 sessment under paragraph (1), the Board of

15 Directors shall exempt any insured depository

16 institution from payment of the special assess17 ment if the institution—

18 (i) was in existence on October 1,

19 1995, and held no SAIF-assessable depos20 its before January 1, 1993;

21 (ii) is a Federal savings bank which—

22 (I) was established de novo in

23 April 1994 in order to acquire the de24 posits of a savings association which
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1 was in default or in danger of default;

2 and

3 (II) received minority interim

4 capital assistance from the Resolution

5 Trust Corporation under section

6 21A(w) of the Federal Home Loan

7 Bank Act in connection with the ac8 quisition of any such savings associa9 tion; or

10 (iii) is a savings association, the de11 posits of which are insured by the Savings

12 Association Insurance Fund, which—

13 (I) before January 1, 1987, was

14 chartered as a Federal savings bank

15 insured by the Federal Savings and

16 Loan Insurance Corporation for the

17 purpose of acquiring all or substan18 tially all of the assets and assuming

19 all or substantially all of the deposit

20 liabilities of a national bank in a

21 transaction consummated after July

22 1, 1986; and

23 (II) as of the date of that trans24 action, had assets of less than

25 $150,000,000.
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1 (B) DEFINITION.—For purposes of this

2 paragraph, an institution shall be deemed to

3 have held SAIF-assessable deposits before Jan4 uary 1, 1993, if—

5 (i) the institution directly held SAIF6 assessable insured deposits before that

7 date; or

8 (ii) the institution succeeded to, ac9 quired, purchased, or otherwise holds any

10 SAIF-assessable deposits as of the date of

11 enactment of this Act that were SAIF-as12 sessable deposits before January 1, 1993.

13 (4) EXEMPT INSTITUTIONS REQUIRED TO PAY

14 ASSESSMENTS AT FORMER RATES.—

15 (A) PAYMENTS TO SAIF AND DIF.—Any in16 sured depository institution that the Board of

17 Directors exempts under this subsection from

18 paying the special assessment imposed under

19 this section shall pay semiannual assessments

20 during calendar years 1998, 1999, 2000, and

21 2001—

22 (i) into the Deposit Insurance Fund,

23 based on SAIF-assessable deposits of that

24 institution as of December 31, 1997, at as25 sessment rates calculated under the sched-
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1 ule in effect for Savings Association Insur2 ance Fund members on June 30, 1995; or

3 (ii) into the Savings Association In4 surance Fund, based on SAIF-assessable

5 deposits of that institution, at assessment

6 rates calculated under the schedule in ef7 fect for Savings Association Insurance

8 Fund members on June 30, 1995, if the

9 Bank Insurance Fund and the Savings As10 sociation Insurance Fund are not merged

11 into the Deposit Insurance Fund.

12 (B) OPTIONAL PRO RATA PAYMENT OF

13 SPECIAL ASSESSMENT.—This paragraph shall

14 not apply with respect to any insured depository

15 institution (or successor insured depository in16 stitution) that has paid, during any calendar

17 year from 1998 through 2001, upon such terms

18 as the Corporation may announce, an amount

19 equal to the product of—

20 (i) 12.5 percent of the special assess21 ment that the institution would have been

22 required to pay under subsection (a), if the

23 Board of Directors had not exempted the

24 institution; and
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1 (ii) the number of full semiannual pe2 riods remaining between the date of the

3 payment and December 31, 2001.

4 (g) SPECIAL ELECTION FOR CERTAIN INSTITUTIONS

5 FACING HARDSHIP AS A RESULT OF THE SPECIAL AS6 SESSMENT.—

7 (1) ELECTION AUTHORIZED.—If—

8 (A) an insured depository institution, or

9 any depository institution holding company

10 which, directly or indirectly, controls such insti11 tution, is subject to terms or covenants in any

12 debt obligation or preferred stock outstanding

13 on September 13, 1995; and

14 (B) the payment of the special assessment

15 under subsection (a) would pose a significant

16 risk of causing such depository institution or

17 holding company to default or violate any such

18 term or covenant,

19 the depository institution may elect, with the ap20 proval of the Corporation, to pay such special as21 sessment in accordance with paragraphs (2) and (3)

22 in lieu of paying such assessment in the manner re23 quired under subsection (a).

24 (2) 1ST ASSESSMENT.—An insured depository

25 institution which makes an election under paragraph
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1 (1) shall pay an assessment of 50 percent of the

2 amount of the special assessment that would other3 wise apply under subsection (a), by the date on

4 which such special assessment is otherwise due

5 under subsection (d).

6 (3) 2D ASSESSMENT.—An insured depository

7 institution which makes an election under paragraph

8 (1) shall pay a 2d assessment, by the date estab9 lished by the Board of Directors in accordance with

10 paragraph (4), in an amount equal to the product of

11 51 percent of the rate determined by the Board of

12 Directors under subsection (a) for determining the

13 amount of the special assessment and the SAIF-as14 sessable deposits of the institution on March 31,

15 1999, or such other date in calendar year 1999 as

16 the Board of Directors determines to be appropriate.

17 (4) DUE DATE OF 2D ASSESSMENT.—The date

18 established by the Board of Directors for the pay19 ment of the assessment under paragraph (3) by a

20 depository institution shall be the earliest practicable

21 date which the Board of Directors determines to be

22 appropriate, which is at least 15 days after the date

23 used by the Board of Directors under paragraph (3).

24 (5) SUPPLEMENTAL SPECIAL ASSESSMENT.—

25 An insured depository institution which makes an
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1 election under paragraph (1) shall pay a supple2 mental special assessment, at the same time the pay3 ment under paragraph (3) is made, in an amount

4 equal to the product of—

5 (A) 50 percent of the rate determined by

6 the Board of Directors under subsection (a) for

7 determining the amount of the special assess8 ment; and

9 (B) 95 percent of the amount by which the

10 SAIF-assessable deposits used by the Board of

11 Directors for determining the amount of the 1st

12 assessment under paragraph (2) exceeds, if any,

13 the SAIF-assessable deposits used by the Board

14 for determining the amount of the 2d assess15 ment under paragraph (3).

16 (h) ADJUSTMENT OF SPECIAL ASSESSMENT FOR

17 CERTAIN BANK INSURANCE FUND MEMBER BANKS.—

18 (1) IN GENERAL.—For purposes of computing

19 the special assessment imposed under this section

20 with respect to an institution which, as of June 30,

21 1995, is a Bank Insurance Fund member, the

22 amount of any deposits of any insured depository in23 stitution which section 5(d)(3) of the Federal De24 posit Insurance Act treats as insured by the Savings
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1 Association Insurance Fund shall be reduced by 20

2 percent—

3 (A) if the adjusted attributable deposit

4 amount of the Bank Insurance Fund member

5 bank is less than 50 percent of the total domes6 tic deposits of that member bank as of June 30,

7 1995; or

8 (B) if, as of June 30, 1995, the Bank In9 surance Fund member—

10 (i) had an adjusted attributable de11 posit amount equal to less than 75 percent

12 of the total assessable deposits of that

13 member bank;

14 (ii) had total assessable deposits

15 greater than $5,000,000,000; and

16 (iii) was owned or controlled by a

17 bank holding company that owned or con18 trolled insured depository institutions hav19 ing an aggregate amount of deposits in20 sured or treated as insured by the Bank

21 Insurance Fund greater than the aggre22 gate amount of deposits insured or treated

23 as insured by the Savings Association In24 surance Fund.
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1 (2) ADJUSTED ATTRIBUTABLE DEPOSIT

2 AMOUNT.—For purposes of this subsection, the ‘‘ad3 justed attributable deposit amount’’ shall be deter4 mined in accordance with section 5(d)(3)(C) of the

5 Federal Deposit Insurance Act.

6 (i) ADJUSTMENT TO THE ADJUSTED ATTRIBUTABLE

7 DEPOSIT AMOUNT FOR CERTAIN BANK INSURANCE FUND

8 MEMBER BANKS.—Section 5(d)(3) of the Federal Deposit

9 Insurance Act (12 U.S.C. 1815(d)(3)) is amended—

10 (1) in subparagraph (C), by striking ‘‘The ad11 justed attributable deposit amount’’ and inserting

12 ‘‘Except as provided in subparagraph (K), the ad13 justed attributable deposit amount’’; and

14 (2) by adding at the end the following new sub15 paragraph:

16 ‘‘(K) ADJUSTMENT OF ADJUSTED ATTRIB17 UTABLE DEPOSIT AMOUNT.—The amount deter18 mined under subparagraph (C)(i) for deposits

19 acquired by March 31, 1995, shall be reduced

20 by 20 percent for purposes of computing the

21 adjusted attributable deposit amount for the

22 payment of any assessment for any semiannual

23 period after the date of the enactment of the

24 Federal Deposit Insurance Funds and Regu25 latory Relief Act of 1996 (other than the spe-
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1 cial assessment imposed under section 101(a) of

2 such Act), for a Bank Insurance Fund member

3 bank that, as of June 30, 1995—

4 ‘‘(i) had an adjusted attributable de5 posit amount that was less than 50 percent

6 of the total deposits of that member bank;

7 or

8 ‘‘(ii)(I) had an adjusted attributable

9 deposit amount equal to less than 75 per10 cent of the total assessable deposits of that

11 member bank;

12 ‘‘(II) had total assessable deposits

13 greater than $5,000,000,000; and

14 ‘‘(III) was owned or controlled by a

15 bank holding company that owned or con16 trolled insured depository institutions hav17 ing an aggregate amount of deposits in18 sured or treated as insured by the Bank

19 Insurance Fund greater than the aggre20 gate amount of deposits insured or treated

21 as insured by the Savings Association In22 surance Fund.’’.

23 (j) ADJUSTMENT OF SPECIAL ASSESSMENT FOR

24 CERTAIN SAVINGS ASSOCIATIONS.—
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1 (1) SPECIAL ASSESSMENT REDUCTION.—For

2 purposes of computing the special assessment im3 posed under this section, in the case of any con4 verted association, the amount of any deposits of

5 such association which were insured by the Savings

6 Association Insurance Fund as of March 31, 1995,

7 shall be reduced by 20 percent.

8 (2) CONVERTED ASSOCIATION.—For purposes

9 of this subsection, the term ‘‘converted association’’

10 means—

11 (A) any Federal savings association—

12 (i) that is a member of the Savings

13 Association Insurance Fund and that has

14 deposits subject to assessment by that

15 fund which did not exceed $4,000,000,000,

16 as of March 31, 1995; and

17 (ii) that had been, or is a successor by

18 merger, acquisition, or otherwise to an in19 stitution that had been, a State savings

20 bank, the deposits of which were insured

21 by the Federal Deposit Insurance Corpora22 tion before August 9, 1989, that converted

23 to a Federal savings association pursuant

24 to section 5(i) of the Home Owners’ Loan

25 Act before January 1, 1985;
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1 (B) a State depository institution that is a

2 member of the Savings Association Insurance

3 Fund that had been a State savings bank be4 fore October 15, 1982, and was a Federal sav5 ings association on August 9, 1989;

6 (C) an insured bank that—

7 (i) was established de novo in order to

8 acquire the deposits of a savings associa9 tion in default or in danger of default;

10 (ii) did not open for business before

11 acquiring the deposits of such savings as12 sociation; and

13 (iii) was a Savings Association Insur14 ance Fund member as of the date of enact15 ment of this Act; and

16 (D) an insured bank that—

17 (i) resulted from a savings association

18 before December 19, 1991, in accordance

19 with section 5(d)(2)(G) of the Federal De20 posit Insurance Act; and

21 (ii) had an increase in its capital in

22 conjunction with the conversion in an

23 amount equal to more than 75 percent of

24 the capital of the institution on the day be25 fore the date of the conversion.
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1 (k) DEPOSIT OF FEES INTO SAIF.—

2 (1) IN GENERAL.—Section 5(d)(2)(E)(i) of the

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

4 1815(d)(2)(E)(i)) is amended by striking ‘‘subpara5 graph (F)) which—’’ and all that follows through

6 the semicolon at the end and inserting ‘‘subpara7 graph (F)) which shall be deposited in the Savings

8 Association Insurance Fund;’’.

9 (2) TREATMENT OF PRIOR FEES.—All fees col10 lected by the Federal Deposit Insurance Corporation

11 pursuant to section 5(d)(2)(E)(i) of the Federal De12 posit Insurance Act before the date of the enactment

13 of this Act which are held by the Corporation as of

14 such date shall be deposited in the Savings Associa15 tion Insurance Fund in accordance with such sec16 tion, as amended by paragraph (1) of this sub17 section.

18 Subtitle B—Status of Banks and

19 Savings Associations

20 SEC. 111. COMPREHENSIVE REVIEW OF CHARTER MERGER.

21 It is the intent of the Congress—

22 (1) acting through the Committee on Banking

23 and Financial Services of the House of Representa24 tives and the Committee on Banking, Housing, and

25 Urban Affairs of the Senate, to make a comprehen-
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1 sive review of all issues relating to the merger of the

2 charters of banks and savings associations;

3 (2) to pass out of each House of the Congress,

4 by no later than September 30, 1997, appropriate

5 legislation to provide for such merger; and

6 (3) to enact such legislation before the effective

7 date of subtitle C.

8 Subtitle C—Merger of Insurance

9 Funds

10 SEC. 121. MERGER OF BIF AND SAIF.

11 (a) IN GENERAL.—

12 (1) MERGER.—The Bank Insurance Fund and

13 the Savings Association Insurance Fund shall be

14 merged into the Deposit Insurance Fund established

15 by section 11(a)(4) of the Federal Deposit Insurance

16 Act, as amended by this section.

17 (2) DISPOSITION OF ASSETS AND LIABIL18 ITIES.—All assets and liabilities of the Bank Insur19 ance Fund and the Savings Association Insurance

20 Fund shall be transferred to the Deposit Insurance

21 Fund.

22 (3) NO SEPARATE EXISTENCE.—The separate

23 existence of the Bank Insurance Fund and the Sav24 ings Association Insurance Fund shall cease.
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1 (b) SPECIAL RESERVE OF THE DEPOSIT INSURANCE

2 FUND.—

3 (1) IN GENERAL.—Immediately before the

4 merger of the Bank Insurance Fund and the Sav5 ings Association Insurance Fund, if the reserve ratio

6 of the Savings Association Insurance Fund exceeds

7 the designated reserve ratio, the amount by which

8 that reserve ratio exceeds the designated reserve

9 ratio shall be placed in the Special Reserve of the

10 Deposit Insurance Fund, established under section

11 11(a)(5) of the Federal Deposit Insurance Act, as

12 amended by this section.

13 (2) DEFINITION.—For purposes of this sub14 section, the term ‘‘reserve ratio’’ means the ratio of

15 the net worth of the Savings Association Insurance

16 Fund to the aggregate estimated amount of deposits

17 insured by the Savings Association Insurance Fund.

18 (c) EFFECTIVE DATE.—This section and the amend19 ments made by this section shall take effect on January

20 1, 1998, if no insured depository institution is a savings

21 association on such date.

22 (d) TECHNICAL AND CONFORMING AMENDMENTS.—

23 (1) DEPOSIT INSURANCE FUND.—Section

24 11(a)(4) of the Federal Deposit Insurance Act (12

25 U.S.C. 1821(a)(4)) is amended—
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1 (A) by redesignating subparagraph (B) as

2 subparagraph (C);

3 (B) by striking subparagraph (A) and in4 serting the following:

5 ‘‘(A) ESTABLISHMENT.—There is estab6 lished the Deposit Insurance Fund, which the

7 Corporation shall—

8 ‘‘(i) maintain and administer;

9 ‘‘(ii) use to carry out its insurance

10 purposes in the manner provided by this

11 subsection; and

12 ‘‘(iii) invest in accordance with section

13 13(a).

14 ‘‘(B) USES.—The Deposit Insurance Fund

15 shall be available to the Corporation for use

16 with respect to Deposit Insurance Fund mem17 bers.’’; and

18 (C) by striking ‘‘(4) GENERAL PROVISIONS

19 RELATING TO FUNDS.—’’ and inserting the fol20 lowing:

21 ‘‘(4) ESTABLISHMENT OF THE DEPOSIT INSUR22 ANCE FUND.—’’.

23 (2) OTHER REFERENCES.—Section 11(a)(4)(C)

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

25 1821(a)(4)(C), as redesignated by paragraph (1) of
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1 this subsection) is amended by striking ‘‘Bank In2 surance Fund and the Savings Association Insur3 ance Fund’’ and inserting ‘‘Deposit Insurance

4 Fund’’.

5 (3) DEPOSITS INTO FUND.—Section 11(a)(4) of

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

7 1821(a)(4)) is amended by adding at the end the

8 following new subparagraph:

9 ‘‘(D) DEPOSITS.—All amounts assessed

10 against insured depository institutions by the

11 Corporation shall be deposited in the Deposit

12 Insurance Fund.’’.

13 (4) SPECIAL RESERVE OF DEPOSITS.—Section

14 11(a)(5) of the Federal Deposit Insurance Act (12

15 U.S.C. 1821(a)(5)) is amended to read as follows:

16 ‘‘(5) SPECIAL RESERVE OF DEPOSIT INSUR17 ANCE FUND.—

18 ‘‘(A) ESTABLISHMENT.—

19 ‘‘(i) IN GENERAL.—There is estab20 lished a Special Reserve of the Deposit In21 surance Fund, which shall be administered

22 by the Corporation and shall be invested in

23 accordance with section 13(a).

24 ‘‘(ii) LIMITATION.—The Corporation

25 shall not provide any assessment credit, re-
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1 fund, or other payment from any amount

2 in the Special Reserve.

3 ‘‘(B) EMERGENCY USE OF SPECIAL RE4 SERVE.—Notwithstanding subparagraph (A)(ii),

5 the Corporation may, in its sole discretion,

6 transfer amounts from the Special Reserve to

7 the Deposit Insurance Fund, for the purposes

8 set forth in paragraph (4), only if—

9 ‘‘(i) the reserve ratio of the Deposit

10 Insurance Fund is less than 50 percent of

11 the designated reserve ratio; and

12 ‘‘(ii) the Corporation expects the re13 serve ratio of the Deposit Insurance Fund

14 to remain at less than 50 percent of the

15 designated reserve ratio for each of the

16 next 4 calendar quarters.

17 ‘‘(C) EXCLUSION OF SPECIAL RESERVE IN

18 CALCULATING RESERVE RATIO.—Notwithstand19 ing any other provision of law, any amounts in

20 the Special Reserve shall be excluded in cal21 culating the reserve ratio of the Deposit Insur22 ance Fund under section 7.’’.

23 (5) FEDERAL HOME LOAN BANK ACT.—Section

24 21B(f)(2)(C)(ii) of the Federal Home Loan Bank

25 Act (12 U.S.C. 1441b(f)(2)(C)(ii)) is amended—
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1 (A) in subclause (I), by striking ‘‘to Sav2 ings Associations Insurance Fund members’’

3 and inserting ‘‘to insured depository institu4 tions, and their successors, which were Savings

5 Association Insurance Fund members on Sep6 tember 1, 1995’’; and

7 (B) in subclause (II), by striking ‘‘to Sav8 ings Associations Insurance Fund members’’

9 and inserting ‘‘to insured depository institu10 tions, and their successors, which were Savings

11 Association Insurance Fund members on Sep12 tember 1, 1995’’.

13 (6) REPEALS.—

14 (A) SECTION 3.—Section 3(y) of the Fed15 eral Deposit Insurance Act (12 U.S.C. 1813(y))

16 is amended to read as follows:

17 ‘‘(y) DEFINITIONS RELATING TO THE DEPOSIT IN18 SURANCE FUND.—

19 ‘‘(1) DEPOSIT INSURANCE FUND.—The term

20 ‘Deposit Insurance Fund’ means the fund estab21 lished under section 11(a)(4).

22 ‘‘(2) RESERVE RATIO.—The term ‘reserve ratio’

23 means the ratio of the net worth of the Deposit In24 surance Fund to aggregate estimated insured depos25 its held in all insured depository institutions.
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1 ‘‘(3) DESIGNATED RESERVE RATIO.—The des2 ignated reserve ratio of the Deposit Insurance Fund

3 for each year shall be—

4 ‘‘(A) 1.25 percent of estimated insured de5 posits; or

6 ‘‘(B) a higher percentage of estimated in7 sured deposits that the Board of Directors de8 termines to be justified for that year by cir9 cumstances raising a significant risk of sub10 stantial future losses to the fund.

11 (B) SECTION 7.—Section 7 of the Federal

12 Deposit Insurance Act (12 U.S.C. 1817) is

13 amended—

14 (i) by striking subsection (l);

15 (ii) by redesignating subsections (m)

16 and (n) as subsections (l) and (m), respec17 tively;

18 (iii) in subsection (b)(2), by striking

19 subparagraphs (B) and (F), and by redes20 ignating subparagraphs (C), (E), (G), and

21 (H) as subparagraphs (B) through (E), re22 spectively.

23 (C) SECTION 11.—Section 11(a) of the

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

25 1821(a)) is amended—
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1 (i) by striking paragraphs (6) and (7);

2 and

3 (ii) by redesignating paragraph (8) as

4 paragraph (6).

5 (7) SECTION 5136 OF THE REVISED STAT6 UTES.—The paragraph designated the ‘‘Eleventh’’ of

7 section 5136 of the Revised Statutes (12 U.S.C. 24)

8 is amended in the 5th sentence, by striking ‘‘affected

9 deposit insurance fund’’ and inserting ‘‘Deposit In10 surance Fund’’.

11 (8) INVESTMENTS PROMOTING PUBLIC WEL12 FARE; LIMITATIONS ON AGGREGATE INVEST13 MENTS.—The 23d undesignated paragraph of sec14 tion 9 of the Federal Reserve Act (12 U.S.C. 338a)

15 is amended in the 4th sentence, by striking ‘‘affected

16 deposit insurance fund’’ and inserting ‘‘Deposit In17 surance Fund’’.

18 (9) ADVANCES TO CRITICALLY UNDERCAPITAL19 IZED DEPOSITORY INSTITUTIONS.—Section

20 10B(b)(3)(A)(ii) of the Federal Reserve Act (12

21 U.S.C. 347b(b)(3)(A)(ii)) is amended by striking

22 ‘‘any deposit insurance fund in’’ and inserting ‘‘the

23 Deposit Insurance Fund of’’.

24 (10) AMENDMENTS TO THE BALANCED BUDGET

25 AND EMERGENCY DEFICIT CONTROL ACT OF 1985.—
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1 Section 255(g)(1)(A) of the Balanced Budget and

2 Emergency Deficit Control Act of 1985 (2 U.S.C.

3 905(g)(1)(A)) is amended—

4 (A) by striking ‘‘Bank Insurance Fund’’

5 and inserting ‘‘Deposit Insurance Fund’’; and

6 (B) by striking ‘‘Federal Deposit Insur7 ance Corporation, Savings Association Insur8 ance Fund;’’.

9 (11) FURTHER AMENDMENTS TO THE FEDERAL

10 HOME LOAN BANK ACT.—The Federal Home Loan

11 Bank Act (12 U.S.C. 1421 et seq.) is amended—

12 (A) in section 11(k) (12 U.S.C.

13 1431(k))—

14 (i) in the subsection heading, by strik15 ing ‘‘SAIF’’ and inserting ‘‘THE DEPOSIT

16 INSURANCE FUND’’; and

17 (ii) by striking ‘‘Savings Association

18 Insurance Fund’’ each place such term ap19 pears and inserting ‘‘Deposit Insurance

20 Fund’’;

21 (B) in section 21A(b)(4)(B) (12 U.S.C.

22 1441a(b)(4)(B)), by striking ‘‘affected deposit

23 insurance fund’’ and inserting ‘‘Deposit Insur24 ance Fund’’;
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1 (C) in section 21A(b)(6)(B) (12 U.S.C.

2 1441a(b)(6)(B))—

3 (i) in the subparagraph heading, by

4 striking ‘‘SAIF-INSURED BANKS’’ and in5 serting ‘‘CHARTER CONVERSIONS’’; and

6 (ii) by striking ‘‘Savings Association

7 Insurance Fund member’’ and inserting

8 ‘‘savings association’’;

9 (D) in section 21A(b)(10)(A)(iv)(II) (12

10 U.S.C. 1441a(b)(10)(A)(iv)(II)), by striking

11 ‘‘Savings Association Insurance Fund’’ and in12 serting ‘‘Deposit Insurance Fund’’;

13 (E) in section 21B(e) (12 U.S.C.

14 1441b(e))—

15 (i) in paragraph (5), by inserting ‘‘as

16 of the date of funding’’ after ‘‘Savings As17 sociation Insurance Fund members’’ each

18 place such term appears;

19 (ii) by striking paragraph (7); and

20 (iii) by redesignating paragraph (8) as

21 paragraph (7); and

22 (F) in section 21B(k) (12 U.S.C.

23 1441b(k))—

24 (i) by striking paragraph (8); and
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1 (ii) by redesignating paragraphs (9)

2 and (10) as paragraphs (8) and (9), re3 spectively.

4 (12) AMENDMENTS TO THE HOME OWNERS’

5 LOAN ACT.—The Home Owners’ Loan Act (12

6 U.S.C. 1461 et seq.) is amended—

7 (A) in section 5 (12 U.S.C. 1464)—

8 (i) in subsection (c)(5)(A), by striking

9 ‘‘that is a member of the Bank Insurance

10 Fund’’;

11 (ii) in subsection (c)(6), by striking

12 ‘‘As used in this subsection—’’ and insert13 ing ‘‘For purposes of this subsection, the

14 following definitions shall apply:’’;

15 (iii) in subsection (o)(1), by striking

16 ‘‘that is a Bank Insurance Fund member’’;

17 (iv) in subsection (o)(2)(A), by strik18 ing ‘‘a Bank Insurance Fund member until

19 such time as it changes its status to a Sav20 ings Association Insurance Fund member’’

21 and inserting ‘‘insured by the Deposit In22 surance Fund’’;

23 (v) in subsection (t)(5)(D)(iii)(II), by

24 striking ‘‘affected deposit insurance fund’’

25 and inserting ‘‘Deposit Insurance Fund’’;
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1 (vi) in subsection (t)(7)(C)(i)(I), by

2 striking ‘‘affected deposit insurance fund’’

3 and inserting ‘‘Deposit Insurance Fund’’;

4 and

5 (vii) in subsection (v)(2)(A)(i), by

6 striking ‘‘, the Savings Association Insur7 ance Fund’’ and inserting ‘‘or the Deposit

8 Insurance Fund’’; and

9 (B) in section 10 (12 U.S.C. 1467a)—

10 (i) in subsection (e)(1)(A)(iii)(VII), by

11 adding ‘‘or’’ at the end;

12 (ii) in subsection (e)(1)(A)(iv), by

13 adding ‘‘and’’ at the end;

14 (iii) in subsection (e)(1)(B), by strik15 ing ‘‘Savings Association Insurance Fund

16 or Bank Insurance Fund’’ and inserting

17 ‘‘Deposit Insurance Fund’’;

18 (iv) in subsection (e)(2), by striking

19 ‘‘Savings Association Insurance Fund or

20 the Bank Insurance Fund’’ and inserting

21 ‘‘Deposit Insurance Fund’’; and

22 (v) in subsection (m)(3), by striking

23 subparagraph (E), and by redesignating

24 subparagraphs (F), (G), and (H) as sub25 paragraphs (E), (F), and (G), respectively.
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1 (13) AMENDMENTS TO THE NATIONAL HOUSING

2 ACT.—The National Housing Act (12 U.S.C. 1701

3 et seq.) is amended—

4 (A) in section 317(b)(1)(B) (12 U.S.C.

5 1723i(b)(1)(B)), by striking ‘‘Bank Insurance

6 Fund for banks or through the Savings Asso7 ciation Insurance Fund for savings associa8 tions’’ and inserting ‘‘Deposit Insurance Fund’’;

9 and

10 (B) in section 526(b)(1)(B)(ii) (12 U.S.C.

11 1735f–14(b)(1)(B)(ii)), by striking ‘‘Bank In12 surance Fund for banks and through the Sav13 ings Association Insurance Fund for savings as14 sociations’’ and inserting ‘‘Deposit Insurance

15 Fund’’.

16 (14) FURTHER AMENDMENTS TO THE FEDERAL

17 DEPOSIT INSURANCE ACT.—The Federal Deposit In18 surance Act (12 U.S.C. 1811 et seq.) is amended—

19 (A) in section 3(a)(1) (12 U.S.C.

20 1813(a)(1)), by striking subparagraph (B) and

21 inserting the following:

22 ‘‘(B) includes any former savings associa23 tion.’’;

24 (B) in section 5(b)(5) (12 U.S.C.

25 1815(b)(5)), by striking ‘‘the Bank Insurance
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1 Fund or the Savings Association Insurance

2 Fund;’’ and inserting ‘‘Deposit Insurance

3 Fund,’’;

4 (C) in section 5(d) (12 U.S.C. 1815(d)),

5 by striking paragraphs (2) and (3);

6 (D) in section 5(d)(1) (12 U.S.C.

7 1815(d)(1))—

8 (i) in subparagraph (A), by striking

9 ‘‘reserve ratios in the Bank Insurance

10 Fund and the Savings Association Insur11 ance Fund’’ and inserting ‘‘the reserve

12 ratio of the Deposit Insurance Fund’’;

13 (ii) by striking subparagraph (B) and

14 inserting the following:

15 ‘‘(2) FEE CREDITED TO THE DEPOSIT INSUR16 ANCE FUND.—The fee paid by the depository insti17 tution under paragraph (1) shall be credited to the

18 Deposit Insurance Fund.’’;

19 (iii) by striking ‘‘(1) UNINSURED IN20 STITUTIONS.—’’; and

21 (iv) by redesignating subparagraphs

22 (A) and (C) as paragraphs (1) and (3), re23 spectively, and moving the margins 2 ems

24 to the left;

25 (E) in section 5(e) (12 U.S.C. 1815(e))—
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1 (i) in paragraph (5)(A), by striking

2 ‘‘Bank Insurance Fund or the Savings As3 sociation Insurance Fund’’ and inserting

4 ‘‘Deposit Insurance Fund’’;

5 (ii) by striking paragraph (6); and

6 (iii) by redesignating paragraphs (7),

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

8 (8), respectively;

9 (F) in section 6(5) (12 U.S.C. 1816(5)),

10 by striking ‘‘Bank Insurance Fund or the Sav11 ings Association Insurance Fund’’ and inserting

12 ‘‘Deposit Insurance Fund’’;

13 (G) in section 7(b) (12 U.S.C. 1817(b))—

14 (i) in paragraph (1)(D), by striking

15 ‘‘each deposit insurance fund’’ and insert16 ing ‘‘the Deposit Insurance Fund’’;

17 (ii) in clauses (i)(I) and (iv) of para18 graph (2)(A), by striking ‘‘each deposit in19 surance fund’’ each place such term ap20 pears and inserting ‘‘the Deposit Insurance

21 Fund’’;

22 (iii) in paragraph (2)(A)(iii), by strik23 ing ‘‘a deposit insurance fund’’ and insert24 ing ‘‘the Deposit Insurance Fund’’;
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1 (iv) by striking clause (iv) of para2 graph (2)(A);

3 (v) in paragraph (2)(C) (as redesig4 nated by paragraph (6)(B) of this sub5 section)—

6 (I) by striking ‘‘any deposit in7 surance fund’’ and inserting ‘‘the De8 posit Insurance Fund’’; and

9 (II) by striking ‘‘that fund’’ each

10 place such term appears and inserting

11 ‘‘the Deposit Insurance Fund’’;

12 (vi) in paragraph (2)(D) (as redesig13 nated by paragraph (6)(B) of this sub14 section)—

15 (I) in the subparagraph heading,

16 by striking ‘‘FUNDS ACHIEVE’’ and in17 serting ‘‘FUND ACHIEVES’’; and

18 (II) by striking ‘‘a deposit insur19 ance fund’’ and inserting ‘‘the Deposit

20 Insurance Fund’’;

21 (vii) in paragraph (3)—

22 (I) in the paragraph heading, by

23 striking ‘‘FUNDS’’ and inserting

24 ‘‘FUND’’;
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1 (II) by striking ‘‘that fund’’ each

2 place such term appears and inserting

3 ‘‘the Deposit Insurance Fund’’;

4 (III) in subparagraph (A), by

5 striking ‘‘Except as provided in para6 graph (2)(F), if’’ and inserting ‘‘If’’;

7 (IV) in subparagraph (A), by

8 striking ‘‘any deposit insurance fund’’

9 and inserting ‘‘the Deposit Insurance

10 Fund’’; and

11 (V) by striking subparagraphs

12 (C) and (D) and inserting the follow13 ing:

14 ‘‘(C) AMENDING SCHEDULE.—The Cor15 poration may, by regulation, amend a schedule

16 promulgated under subparagraph (B).’’; and

17 (viii) in paragraph (6)—

18 (I) by striking ‘‘any such assess19 ment’’ and inserting ‘‘any such assess20 ment is necessary’’;

21 (II) by striking ‘‘(A) is nec22 essary—’’;

23 (III) by striking subparagraph

24 (B);
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1 (IV) by redesignating clauses (i),

2 (ii), and (iii) as subparagraphs (A),

3 (B), and (C), respectively, and moving

4 the margins 2 ems to the left; and

5 (V) in subparagraph (C) (as re6 designated), by striking ‘‘; and’’ and

7 inserting a period;

8 (H) in section 11(f)(1) (12 U.S.C.

9 1821(f)(1)), by striking ‘‘, except that—’’ and

10 all that follows through the end of the para11 graph and inserting a period;

12 (I) in section 11(i)(3) (12 U.S.C.

13 1821(i)(3))—

14 (i) by striking subparagraph (B);

15 (ii) by redesignating subparagraph

16 (C) as subparagraph (B); and

17 (iii) in subparagraph (B) (as redesig18 nated), by striking ‘‘subparagraphs (A)

19 and (B)’’ and inserting ‘‘subparagraph

20 (A)’’;

21 (J) in section 11A(a) (12 U.S.C.

22 1821a(a))—

23 (i) in paragraph (2), by striking ‘‘LI24 ABILITIES.—’’ and all that follows through
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1 ‘‘Except’’ and inserting ‘‘LIABILITIES.—

2 Except’’;

3 (ii) by striking paragraph (2)(B); and

4 (iii) in paragraph (3), by striking ‘‘the

5 Bank Insurance Fund, the Savings Asso6 ciation Insurance Fund,’’ and inserting

7 ‘‘the Deposit Insurance Fund’’;

8 (K) in section 11A(b) (12 U.S.C.

9 1821a(b)), by striking paragraph (4);

10 (L) in section 11A(f) (12 U.S.C.

11 1821a(f)), by striking ‘‘Savings Association In12 surance Fund’’ and inserting ‘‘Deposit Insur13 ance Fund’’;

14 (M) in section 13 (12 U.S.C. 1823)—

15 (i) in subsection (a)(1), by striking

16 ‘‘Bank Insurance Fund, the Savings Asso17 ciation Insurance Fund,’’ and inserting

18 ‘‘Deposit Insurance Fund, the Special Re19 serve of the Deposit Insurance Fund,’’;

20 (ii) in subsection (c)(4)(E)—

21 (I) in the subparagraph heading,

22 by striking ‘‘FUNDS’’ and inserting

23 ‘‘FUND’’; and
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1 (II) in clause (i), by striking

2 ‘‘any insurance fund’’ and inserting

3 ‘‘the Deposit Insurance Fund’’;

4 (iii) in subsection (c)(4)(G)(ii)—

5 (I) by striking ‘‘appropriate in6 surance fund’’ and inserting ‘‘Deposit

7 Insurance Fund’’;

8 (II) by striking ‘‘the members of

9 the insurance fund (of which such in10 stitution is a member)’’ and inserting

11 ‘‘insured depository institutions’’;

12 (III) by striking ‘‘each mem13 ber’s’’ and inserting ‘‘each insured de14 pository institution’s’’; and

15 (IV) by striking ‘‘the member’s’’

16 each place such term appears and in17 serting ‘‘the institution’s’’;

18 (iv) in subsection (c), by striking

19 paragraph (11);

20 (v) in subsection (h), by striking

21 ‘‘Bank Insurance Fund’’ and inserting

22 ‘‘Deposit Insurance Fund’’;

23 (vi) in subsection (k)(4)(B)(i), by

24 striking ‘‘Savings Association Insurance
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1 Fund’’ and inserting ‘‘Deposit Insurance

2 Fund’’; and

3 (vii) in subsection (k)(5)(A), by strik4 ing ‘‘Savings Association Insurance Fund’’

5 and inserting ‘‘Deposit Insurance Fund’’;

6 (N) in section 14(a) (12 U.S.C. 1824(a))

7 in the 5th sentence—

8 (i) by striking ‘‘Bank Insurance Fund

9 or the Savings Association Insurance

10 Fund’’ and inserting ‘‘Deposit Insurance

11 Fund’’; and

12 (ii) by striking ‘‘each such fund’’ and

13 inserting ‘‘the Deposit Insurance Fund’’;

14 (O) in section 14(b) (12 U.S.C. 1824(b)),

15 by striking ‘‘Bank Insurance Fund or Savings

16 Association Insurance Fund’’ and inserting

17 ‘‘Deposit Insurance Fund’’;

18 (P) in section 14(c) (12 U.S.C. 1824(c)),

19 by striking paragraph (3);

20 (Q) in section 14(d) (12 U.S.C.

21 1824(d))—

22 (i) by striking ‘‘BIF’’ each place such

23 term appears and inserting ‘‘DIF’’; and
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1 (ii) by striking ‘‘Bank Insurance

2 Fund’’ each place such term appears and

3 inserting ‘‘Deposit Insurance Fund’’;

4 (R) in section 15(c)(5) (12 U.S.C.

5 1825(c)(5))—

6 (i) by striking ‘‘the Bank Insurance

7 Fund or Savings Association Insurance

8 Fund, respectively’’ each place such term

9 appears and inserting ‘‘the Deposit Insur10 ance Fund’’; and

11 (ii) in subparagraph (B), by striking

12 ‘‘the Bank Insurance Fund or the Savings

13 Association Insurance Fund, respectively’’

14 and inserting ‘‘the Deposit Insurance

15 Fund’’;

16 (S) in section 17(a) (12 U.S.C. 1827(a))—

17 (i) in the subsection heading, by strik18 ing ‘‘BIF, SAIF,’’ and inserting ‘‘THE DE19 POSIT INSURANCE FUND’’; and

20 (ii) in paragraph (1), by striking ‘‘the

21 Bank Insurance Fund, the Savings Asso22 ciation Insurance Fund,’’ each place such

23 term appears and inserting ‘‘the Deposit

24 Insurance Fund’’;
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1 (T) in section 17(d) (12 U.S.C. 1827(d)),

2 by striking ‘‘the Bank Insurance Fund, the

3 Savings Association Insurance Fund,’’ each

4 place such term appears and inserting ‘‘the De5 posit Insurance Fund’’;

6 (U) in section 18(m)(3) (12 U.S.C.

7 1828(m)(3))—

8 (i) by striking ‘‘Savings Association

9 Insurance Fund’’ each place such term ap10 pears and inserting ‘‘Deposit Insurance

11 Fund’’; and

12 (ii) in subparagraph (C), by striking

13 ‘‘or the Bank Insurance Fund’’;

14 (V) in section 18(p) (12 U.S.C. 1828(p)),

15 by striking ‘‘deposit insurance funds’’ and in16 serting ‘‘Deposit Insurance Fund’’;

17 (W) in section 24 (12 U.S.C. 1831a) in

18 subsections (a)(1) and (d)(1)(A), by striking

19 ‘‘appropriate deposit insurance fund’’ each

20 place such term appears and inserting ‘‘Deposit

21 Insurance Fund’’;

22 (X) in section 28 (12 U.S.C. 1831e), by

23 striking ‘‘affected deposit insurance fund’’ each

24 place such term appears and inserting ‘‘Deposit

25 Insurance Fund’’;
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1 (Y) by striking section 31 (12 U.S.C.

2 1831h);

3 (Z) in section 36(i)(3) (12 U.S.C.

4 1831m(i)(3)) by striking ‘‘affected deposit in5 surance fund’’ and inserting ‘‘Deposit Insur6 ance Fund’’;

7 (AA) in section 38(a) (12 U.S.C.

8 1831o(a)) in the subsection heading, by striking

9 ‘‘FUNDS’’ and inserting ‘‘FUND’’;

10 (BB) in section 38(k) (12 U.S.C.

11 1831o(k))—

12 (i) in paragraph (1), by striking ‘‘a

13 deposit insurance fund’’ and inserting ‘‘the

14 Deposit Insurance Fund’’; and

15 (ii) in paragraph (2)(A)—

16 (I) by striking ‘‘A deposit insur17 ance fund’’ and inserting ‘‘The De18 posit Insurance Fund’’; and

19 (II) by striking ‘‘the deposit in20 surance fund’s outlays’’ and inserting

21 ‘‘the outlays of the Deposit Insurance

22 Fund’’; and

23 (CC) in section 38(o) (12 U.S.C.

24 1831o(o))—
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1 (i) by striking ‘‘ASSOCIATIONS.—’’

2 and all that follows through ‘‘Subsections

3 (e)(2)’’ and inserting ‘‘ASSOCIATIONS.—

4 Subsections (e)(2)’’;

5 (ii) by redesignating subparagraphs

6 (A), (B), and (C) as paragraphs (1), (2),

7 and (3), respectively, and moving the mar8 gins 2 ems to the left; and

9 (iii) in paragraph (1) (as redesig10 nated), by redesignating clauses (i) and (ii)

11 as subparagraphs (A) and (B), respec12 tively, and moving the margins 2 ems to

13 the left.

14 (15) AMENDMENTS TO THE FINANCIAL INSTI15 TUTIONS REFORM, RECOVERY, AND ENFORCEMENT

16 ACT OF 1989.—The Financial Institutions Reform,

17 Recovery, and Enforcement Act is amended—

18 (A) in section 951(b)(3)(B) (12 U.S.C.

19 1833a(b)(3)(B)), by striking ‘‘Bank Insurance

20 Fund, the Savings Association Insurance

21 Fund,’’ and inserting ‘‘Deposit Insurance

22 Fund’’; and

23 (B) in section 1112(c)(1)(B) (12 U.S.C.

24 3341(c)(1)(B)), by striking ‘‘Bank Insurance

25 Fund, the Savings Association Insurance
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1 Fund,’’ and inserting ‘‘Deposit Insurance

2 Fund’’.

3 (16) AMENDMENT TO THE BANK ENTERPRISE

4 ACT OF 1991.—Section 232(a)(1) of the Bank Enter5 prise Act of 1991 (12 U.S.C. 1834(a)(1)) is amend6 ed by striking ‘‘section 7(b)(2)(H)’’ and inserting

7 ‘‘section 7(b)(2)(G)’’.

8 (17) AMENDMENT TO THE BANK HOLDING

9 COMPANY ACT.—Section 2(j)(2) of the Bank Hold10 ing Company Act of 1956 (12 U.S.C. 1841(j)(2)) is

11 amended by striking ‘‘Savings Association Insurance

12 Fund’’ and inserting ‘‘Deposit Insurance Fund’’.

13 Subtitle D—FICO INTEREST

14 COSTS SHARED

15 SEC. 131. FINANCING CORPORATION ASSESSMENTS

16 SHARED PROPORTIONALLY BY ALL INSURED

17 DEPOSITORY INSTITUTIONS.

18 (a) IN GENERAL.—Section 21 of the Federal Home

19 Loan Bank Act (12 U.S.C. 1441) is amended—

20 (1) in subsection (f)(2)—

21 (A) in the matter immediately preceding

22 subparagraph (A)—

23 (i) by striking ‘‘Savings Association

24 Insurance Fund member’’ and inserting

25 ‘‘insured depository institution’’; and
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1 (ii) by striking ‘‘members’’ and insert2 ing ‘‘institutions’’; and

3 (B) by striking ‘‘, except that—’’ and all

4 that follows through the end of the paragraph

5 and inserting ‘‘, except that—

6 ‘‘(A) the Financing Corporation shall have

7 first priority to make the assessment; and

8 ‘‘(B) no limitation under clause (i) or (iii)

9 of section 7(b)(2)(A) of the Federal Deposit In10 surance Act shall apply for purposes of this

11 paragraph.’’; and

12 (2) in subsection (k)—

13 (A) by striking ‘‘section—’’ and inserting

14 ‘‘section, the following definitions shall apply:’’;

15 (B) by striking paragraph (1);

16 (C) by redesignating paragraphs (2) and

17 (3) as paragraphs (1) and (2), respectively; and

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

19 paragraph:

20 ‘‘(3) INSURED DEPOSITORY INSTITUTION.—The

21 term ‘insured depository institution’ has the same

22 meaning as in section 3 of the Federal Deposit In23 surance Act.’’.
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1 (b) CONFORMING AMENDMENT.—Section 7(b)(2) of

2 the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(2))

3 is amended by striking subparagraph (D).

4 (c) EFFECTIVE DATE.—This section and the amend5 ments made by this section shall take effect on January

6 1, 1998.

7 Subtitle E—Refunds of Excess

8 Amounts in Deposit Fund

9 SEC. 141. REFUND OF AMOUNTS IN DEPOSIT INSURANCE

10 FUND IN EXCESS OF DESIGNATED RESERVE

11 AMOUNT.

12 (a) IN GENERAL.—Subsection (e) of section 7 of the

13 Federal Deposit Insurance Act (12 U.S.C. 1817(e)) is

14 amended to read as follows:

15 ‘‘(e) REFUNDS.—

16 ‘‘(1) OVERPAYMENTS.—In the case of any pay17 ment of an assessment by an insured depository in18 stitution in excess of the amount due to the Cor19 poration, the Corporation may—

20 ‘‘(A) refund the amount of the excess pay21 ment to the insured depository institution; or

22 ‘‘(B) credit such excess amount toward the

23 payment of subsequent semiannual assessments

24 until such credit is exhausted.
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1 ‘‘(2) BALANCE IN INSURANCE FUND IN EXCESS

2 OF DESIGNATED RESERVE.—

3 ‘‘(A) IN GENERAL.—Subject to subpara4 graphs (B) and (C), if, as of the end of any

5 semiannual assessment period, the amount of

6 the actual reserves in—

7 ‘‘(i) the Bank Insurance Fund (until

8 the merger of such fund into the Deposit

9 Insurance Fund pursuant to section 121 of

10 the Federal Deposit Insurance Funds and

11 Regulatory Relief Act of 1996); or

12 ‘‘(ii) the Deposit Insurance Fund

13 (after the establishment of such fund),

14 exceeds the balance required to meet the des15 ignated reserve ratio applicable with respect to

16 such fund, such excess amount shall be re17 funded to insured depository institutions by the

18 Corporation on such basis as the Board of Di19 rectors determines to be appropriate, taking

20 into account the factors considered under the

21 risk-based assessment system.

22 ‘‘(B) REFUND NOT TO EXCEED PREVIOUS

23 SEMIANNUAL ASSESSMENT.—The amount of

24 any refund under this paragraph to any mem25 ber of a deposit insurance fund for any semi-
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1 annual assessment period may not exceed the

2 total amount of assessments paid by such mem3 ber to the insurance fund with respect to such

4 period.

5 ‘‘(C) REFUND LIMITATION FOR CERTAIN

6 INSTITUTIONS.—No refund may be made under

7 this paragraph with respect to the amount of

8 any assessment paid for any semiannual assess9 ment period by any insured depository institu10 tion described in clause (v) of subsection

11 (b)(2)(A).’’.

12 (b) EFFECTIVE DATE.—Paragraph (2) of section

13 7(e) of the Federal Deposit Insurance Act (as amended

14 by subsection (a) of this section) shall apply with respect

15 to semiannual assessment periods ending on or after De16 cember 31, 1995.

17 Subtitle F—Limitation on

18 Assessments

19 SEC. 151. ASSESSMENTS AUTHORIZED ONLY IF NEEDED TO

20 MAINTAIN THE RESERVE RATIO OF A DE21 POSIT INSURANCE FUND.

22 (a) IN GENERAL.—Section 7(b)(2)(A)(i) of the Fed23 eral Deposit Insurance Act (12 U.S.C. 1817(b)(2)(A)(i))

24 is amended in the matter preceding subclause (I) by in-
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1 serting ‘‘when necessary, and only to the extent nec2 essary’’ after ‘‘insured depository institutions’’.

3 (b) LIMITATION ON ASSESSMENT.—Section

4 7(b)(2)(A)(iii) of the Federal Deposit Insurance Act (12

5 U.S.C. 1817(b)(2)(A)(iii)) is amended to read as follows:

6 ‘‘(iii) LIMITATION ON ASSESSMENT.—

7 Except as provided in clause (v), the Board

8 of Directors shall not set semiannual as9 sessments with respect to a deposit insur10 ance fund in excess of the amount need11 ed—

12 ‘‘(I) to maintain the reserve ratio

13 of the fund at the designated reserve

14 ratio; or

15 ‘‘(II) if the reserve ratio is less

16 than the designated reserve ratio, to

17 increase the reserve ratio to the des18 ignated reserve ratio.’’.

19 (c) EXCEPTION TO LIMITATION ON ASSESSMENTS.—

20 Section 7(b)(2)(A) of the Federal Deposit Insurance Act

21 (12 U.S.C. 1817(b)(2)(A)) is amended by adding at the

22 end the following new clause:

23 ‘‘(v) EXCEPTION TO LIMITATION ON

24 ASSESSMENTS.—The Board of Directors

25 may set semiannual assessments in excess
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1 of the amount permitted under clauses (i)

2 and (iii) with respect to insured depository

3 institutions that exhibit financial, oper4 ational, or compliance weaknesses ranging

5 from moderately severe to unsatisfactory,

6 or are not well capitalized, as that term is

7 defined in section 38.’’.

8 Subtitle G—Miscellaneous

9 Provisions

10 SEC. 161. DEFINITIONS.

11 The following definitions shall apply for purposes of

12 this title and title II:

13 (1) BANK INSURANCE FUND.—The term

14 ‘‘Bank Insurance Fund’’ means the fund established

15 pursuant to section (11)(a)(5)(A) of the Federal De16 posit Insurance Act, as that section existed on the

17 day before the date of enactment of this Act.

18 (2) MEMBER OF BIF AND SAIF.—The terms

19 ‘‘Bank Insurance Fund member’’ and ‘‘Savings As20 sociation Insurance Fund member’’ have the same

21 meanings as in section 7(l) of the Federal Deposit

22 Insurance Act.

23 (3) DEFINITIONS FROM FEDERAL DEPOSIT IN24 SURANCE ACT.—The terms ‘‘bank’’, ‘‘Board of Di25 rectors’’, ‘‘Corporation’’, ‘‘insured depository institu-
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1 tion’’, ‘‘Federal savings association’’, ‘‘savings asso2 ciation’’, ‘‘State savings bank’’, and ‘‘State deposi3 tory institution’’ have the same meanings as in sec4 tion 3 of the Federal Deposit Insurance Act.

5 (4) DEPOSIT INSURANCE FUND.—The term

6 ‘‘Deposit Insurance Fund’’ means the fund estab7 lished under section 11(a)(4) of the Federal Deposit

8 Insurance Act (as amended by section 121(d) of this

9 Act).

10 (5) DEPOSITORY INSTITUTION HOLDING COM11 PANY.—The term ‘‘depository institution holding

12 company’’ has the same meaning as in section 3 of

13 the Federal Deposit Insurance Act.

14 (6) DESIGNATED RESERVE RATIO.—The term

15 ‘‘designated reserve ratio’’ has the same meaning as

16 in section 7(b)(2)(A)(iv) of the Federal Deposit In17 surance Act.

18 (7) SAIF.—The term ‘‘Savings Association In19 surance Fund’’ means the fund established pursuant

20 to section 11(a)(6)(A) of the Federal Deposit Insur21 ance Act, as that section existed on the day before

22 the date of enactment of this Act.

23 (8) SAIF-ASSESSABLE DEPOSIT.—The term

24 ‘‘SAIF-assessable deposit’’—

25 (A) means—
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1 (i) a deposit that is subject to assess2 ment for purposes of the Savings Associa3 tion Insurance Fund under the Federal

4 Deposit Insurance Act; and

5 (ii) a deposit that section 5(d)(3) of

6 the Federal Deposit Insurance Act treats

7 as insured by the Savings Association In8 surance Fund; and

9 (B) includes any deposit assumed after

10 March 31, 1995, if the insured depository insti11 tution, the deposits of which are assumed, is

12 not an insured depository institution when the

13 special assessment is imposed under section

14 101(a).

15 TITLE II—TRANSITIONAL

16 PROVISIONS

17 SEC. 201. APPLICABILITY OF FICO ASSESSMENTS TO CER18 TAIN SAIF-ASSESSABLE DEPOSITS UNTIL

19 MERGER OF BIF AND SAIF.

20 Notwithstanding the definition in section 21(k)(1) of

21 the Federal Home Loan Bank Act, during the period be22 ginning on the 1st day of the 1st quarter which begins

23 after the date of the enactment of this Act and ending

24 on the date on which subtitle C of title I takes effect, any

25 Bank Insurance Fund member which has SAIF-assessable
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•HR 3567 IH

1 deposits shall be treated as a Savings Association Insur2 ance Fund member to the extent of such SAIF-assessable

3 deposits for purposes of section 21(f)(2) of such Act and

4 shall be subject to assessments under such section with

5 respect to such deposits.

6 SEC. 202. DEPOSIT INSURANCE FUND CROSS GUARANTEES.

7 (a) IN GENERAL.—Notwithstanding paragraphs

8 (4)(A), (5)(C), and (6)(B) of section 11(a) of the Federal

9 Deposit Insurance Act or any other provision of law, dur10 ing the period beginning on the date of the enactment of

11 this Act and ending on the earlier of the date the balance

12 in the Savings Association Insurance Fund first equals or

13 exceeds the designated reserve ratio applicable to such

14 fund or the date on which subtitle C takes effect—

15 (1) the balance in the Bank Insurance Fund

16 shall be available to cover, to the extent provided in

17 subsection (b), losses incurred by the Savings Asso18 ciation Insurance Fund if the balance in the Savings

19 Association Insurance Fund is insufficient to cover

20 such losses; and

21 (2) the balance in the Savings Association In22 surance Fund shall be available to cover losses in23 curred by the Bank Insurance Fund if the balance

24 in the Bank Insurance Fund is insufficient to cover

25 such losses.
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1 (b) MAXIMUM AMOUNT OF GUARANTEE.—The total

2 amount of funds available for transfer from the Bank In3 surance Fund to the Savings Association Insurance Fund

4 pursuant to subsection (a)(1) shall not exceed the amount

5 equal to—

6 (1) the amount which would be in the Savings

7 Association Insurance Fund, as of the date of the

8 enactment of this Act, if the reserve ratio of fund

9 were equal to the designated reserve ratio as of such

10 date; minus

11 (2) the amount in the Savings Association In12 surance Fund as of such date.

13 (c) NO INCREASE IN PREMIUMS AUTHORIZED BE14 CAUSE OF THE GUARANTEE.—Notwithstanding any provi15 sion of section 7 of the Federal Deposit Insurance Act,

16 the rate of any assessment applicable to any Bank Insur17 ance Fund member or Savings Association Insurance

18 Fund member under such section may not be increased

19 by the Federal Deposit Insurance Corporation by reason

20 of the guarantee established under subsection (a) unless

21 a transfer of funds has been made from any such fund

22 pursuant to such subsection which has caused the balance

23 in the fund to decrease below the designated reserve ratio

24 applicable to such fund.
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1 SEC. 203. SAVINGS ASSOCIATION INSURANCE FUND MEM2 BER ASSESSMENT RATE.

3 (a) IN GENERAL.—Notwithstanding any provision of

4 section 7 of the Federal Deposit Insurance Act, during

5 the period beginning on the 1st day of the 1st quarter

6 which begins after the date of the enactment of this Act

7 and ending on the date on which subtitle C of title I takes

8 effect, the semiannual assessments with respect to Savings

9 Association Insurance Fund members under section 7 may

10 not exceed the projected costs and expenses of the Savings

11 Association Insurance Fund for the semiannual period.

12 (b) EXCEPTION TO LIMITATION ON ASSESSMENTS.—

13 The Board of Directors of the Federal Deposit Insurance

14 Corporation may set semiannual assessments in excess of

15 the amount permitted under subsection (a) with respect

16 to Savings Association Insurance Fund members which

17 have a CAMEL rating of 3, 4, or 5 (or an equivalent rat18 ing under a comparable rating system) to the extent ap19 propriate to effectuate the risk-based assessment system

20 established under section 7 of the Federal Deposit Insur21 ance Act.

22 (c) FICO ASSESSMENTS NOT INCLUDED IN LIMITA23 TION.—Subsection (a) shall not be construed as limiting

24 the amount of any assessment imposed under section

25 21(f)(2) with respect to any Savings Association Insur26 ance Fund member or SAIF-assessable deposits.
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1 SEC. 204. DEPOSIT SHIFTS BETWEEN BIF AND SAIF MEM2 BER SUBSIDIARIES OF THE SAME HOLDING

3 COMPANY.

4 Notwithstanding any provision of section 7 of the

5 Federal Deposit Insurance Act, during the period begin6 ning on the 1st day of the 1st quarter which begins after

7 the date of the enactment of this Act and ending on the

8 date on which subtitle C of title I takes effect, the Federal

9 Deposit Insurance Corporation—

10 (1) may take into account any deposits which

11 have been shifted from a Savings Association Insur12 ance Fund member subsidiary of a depository insti13 tution holding company to a Bank Insurance Fund

14 member subsidiary of the same holding company

15 after the date of the enactment of this Act in deter16 mining the amount of the assessment rate applicable

17 to Savings Association Insurance Fund members for

18 any semiannual period which begins during such pe19 riod; and

20 (2) may, if the Corporation determines that the

21 aggregate amount of deposits of Savings Association

22 Insurance Fund member subsidiaries of a depository

23 institution holding company which have been shifted

24 from such subsidiaries to Bank Insurance Fund

25 member subsidiaries of the same depository institu26 tion holding company after the date of the enact-
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1 ment of this Act exceeds 15 percent of the aggregate

2 amount of the deposits of such Savings Association

3 Insurance Fund members as of such date, treat the

4 amount of such deposits as SAIF-assessable deposits

5 for purposes of—

6 (A) determining the amount and rate of

7 the assessment imposed on insured depository

8 institutions with respect to SAIF-assessable de9 posits pursuant to section 7 of the Federal De10 posit Insurance Act for any semiannual period

11 which begins during such period; and

12 (B) determining the amount of any assess13 ment imposed by the Financing Corporation on

14 insured depository institutions with respect to

15 SAIF-assessable deposits pursuant to section

16 21(f)(2) of the Federal Home Loan Bank Act.

17 SEC. 205. TRANSFER OF FEDERAL RESERVE SURPLUS

18 FUNDS TO MEET FICO CARRYING COSTS.

19 (a) IN GENERAL.—Section 7(a) of the Federal Re20 serve Act (12 U.S.C. 289) is amended by adding at the

21 end the following new paragraph:

22 ‘‘(4) FICO PAYMENTS.—

23 ‘‘(A) IN GENERAL.—During the period be24 ginning on the date of the enactment of the

25 Federal Deposit Insurance Funds and Regu-
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•HR 3567 IH

1 latory Relief Act of 1996 and ending on the

2 date the Financing Corporation ceases to have

3 any obligations outstanding under section 21(e)

4 of the Federal Home Loan Bank Act, the

5 Board shall annually transfer (in addition to

6 the transfers of funds required under paragraph

7 (3)) to the Financing Corporation, from

8 amounts in the surplus funds of the Federal re9 serve banks, an amount equal to

10 $2,000,000,000 divided by the number of cal11 endar years any portion of which falls within

12 such period for use in accordance with section

13 21(f)(1) of the Federal Home Loan Bank Act.

14 ‘‘(B) ALLOCATION.—The Board shall an15 nually determine, on the basis of such factors

16 as the Board considers appropriate, the manner

17 in which the amount of the obligation of the

18 Board under subparagraph (A) shall be allo19 cated among the surplus funds of the Federal

20 reserve banks.

21 ‘‘(C) REPLENISHMENT OF SURPLUS FUND

22 PROHIBITED.—No Federal reserve bank may

23 replenish such bank’s surplus fund by the

24 amount of any transfer by such bank pursuant

25 to this paragraph.’’.
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1 (b) CONFORMING AMENDMENT.—Paragraph (1) of

2 section 21(f) of the Federal Home Loan Bank Act (12

3 U.S.C. 1441(f)) is amended to read as follows:

4 ‘‘(1) FEDERAL RESERVE SURPLUS.—

5 ‘‘(A) IN GENERAL.—Amounts transferred

6 to the Financing Corporation by the Board of

7 Governors of the Federal Reserve System from

8 the surplus funds of the Federal reserve banks

9 in accordance with section 7(a)(4) of the Fed10 eral Reserve Act.

11 ‘‘(B) TREATMENT IN CASE OF BANK IN12 SURANCE FUND MEMBER ASSESSMENTS.—To

13 the extent Bank Insurance Fund members (as

14 defined in section 7(l)(4) of the Federal Deposit

15 Insurance Act) are subject to any assessments

16 under this subsection, the total amount of such

17 assessments which, but for this subparagraph,

18 would be imposed on all such members for any

19 year shall be reduced by the transferred amount

20 referred to in subparagraph (A) with respect to

21 such year.’’.
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1 TITLE III—REDUCTIONS IN GOV2 ERNMENT OVERREGULATION

3 SEC. 300. SHORT TITLE.

4 Titles III and IV may be cited as the ‘‘Financial In5 stitutions Regulatory Relief Act of 1996’’.

6 Subtitle A—The Home Mortgage

7 Process

8 SEC. 301. REGULATORY AUTHORITY OVER DISCLOSURES

9 AND ESCROW ACCOUNTS UNDER RESPA

10 TRANSFERRED TO FEDERAL RESERVE

11 BOARD.

12 (a) IN GENERAL.—Sections 4, 5, 6, and 10(d) of the

13 Real Estate Settlement Procedures Act of 1974 (12

14 U.S.C. 2601 et seq.) are amended by striking ‘‘Secretary’’

15 each place such term appears and inserting ‘‘Board’’.

16 (b) CLARIFICATION OF PURPOSE.—Section 2(b)(2) of

17 the Real Estate Settlement Procedures Act of 1974 (12

18 U.S.C. 2601(b)(2)) is amended by inserting the following

19 before the semicolon at the end: ‘‘without—

20 ‘‘(A) directly regulating settlement services

21 prices; or

22 ‘‘(B) directly regulating wages to bona fide

23 employees that are not designed as a subterfuge

24 to facilitate kickbacks among affiliated compa25 nies’’.
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1 (c) BOARD DEFINED.—Section 3 of the Real Estate

2 Settlement Procedures Act of 1974 (12 U.S.C. 2602) is

3 amended—

4 (1) by striking ‘‘and’’ at the end of paragraph

5 (7);

6 (2) by striking the period at the end of para7 graph (8) and inserting ‘‘; and’’; and

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

9 paragraph:

10 ‘‘(9) the term ‘Board’ means the Board of Gov11 ernors of the Federal Reserve System.’’.

12 (d) NEGOTIATED REGULATIONS UNDER SECTIONS 8

13 AND 9.—Section 8 of the Real Estate Settlement Proce14 dures Act of 1974 (12 U.S.C. 2607) is amended by adding

15 at the end the following new subsection:

16 ‘‘(e) NEGOTIATED REGULATIONS.—

17 ‘‘(1) IN GENERAL.—The Secretary may not

18 publish a proposed or final regulation under this sec19 tion and section 9 after the date of the enactment

20 of the Financial Institutions Regulatory Relief Act

21 of 1996 unless the Secretary has used the negotiated

22 rulemaking procedure established under subchapter

23 III of chapter 5 of title 5, United States Code, to

24 attempt to negotiate and develop the rule.
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1 ‘‘(2) CONSISTENCY WITH PURPOSE.—Any regu2 lation prescribed in accordance with paragraph (1)

3 shall be consistent with the purposes of this title as

4 set forth in section 2.’’.

5 (e) ADMINISTRATIVE ENFORCEMENT OF PROHIBI6 TION AGAINST KICKBACKS AND UNEARNED FEES.—Sec7 tion 8 of the Real Estate Settlement Procedures Act of

8 1974 (12 U.S.C. 2607) is amended by adding after sub9 section (e) (as added by subsection (d) of this section) the

10 following new subsection:

11 ‘‘(f) ADMINISTRATIVE ENFORCEMENT.—

12 ‘‘(1) IN GENERAL.—Compliance with the re13 quirements of this section and sections 9 and 12

14 shall be enforced under this Act—

15 ‘‘(A) in the case of an insured depository

16 institution (as defined in section 3 of the Fed17 eral Deposit Insurance Act), by the appropriate

18 Federal banking agency (as defined in such sec19 tion);

20 ‘‘(B) in the case of an insured credit union

21 (as defined in section 101(7) of the Federal

22 Credit Union Act), by the National Credit

23 Union Administration;

24 ‘‘(C) in the case of a bank holding com25 pany (as defined in section 2 of the Bank Hold-
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1 ing Company Act of 1956) and any affiliate of

2 any such holding company (other than an in3 sured depository institution), by the Board;

4 ‘‘(D) in the case of a savings and loan

5 holding company (as defined in section 10 of

6 the Home Owners’ Loan Act) and any affiliate

7 of any such holding company (other than an in8 sured depository institution), by the Director of

9 the Office of Thrift Supervision; and

10 ‘‘(E) in the case of any other person, by

11 the Secretary.

12 ‘‘(2) SPECIAL RULES RELATING TO DETER13 MINATION OF APPROPRIATE REGULATOR.—

14 ‘‘(A) CASES OF MORE THAN 1 APPRO15 PRIATE REGULATOR.—If, under paragraph (1),

16 a company may be regulated by more than 1

17 agency, the Board shall determine which agency

18 shall be the responsible agency, notwithstanding

19 paragraph (1).

20 ‘‘(B) CASES INVOLVING JOINT VENTURES,

21 PARTNERSHIPS, AND OTHER AFFILIATED BUSI22 NESS ARRANGEMENTS.—If any insured deposi23 tory institution is involved in a joint venture,

24 partnership, or other affiliated business ar25 rangement with any person who is not an in-
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1 sured depository institution, the agency respon2 sible for enforcing this section and sections 9

3 and 12 with respect to such insured depository

4 institution shall be the agency with such re5 sponsibility with respect to such joint venture,

6 partnership, or other affiliated business ar7 rangement.

8 ‘‘(3) INTERAGENCY COOPERATION AND EN9 FORCEMENT GUIDELINES.—All the agencies referred

10 to in any subparagraph of paragraph (1) shall co11 operate with each other to develop enforcement

12 guidelines and other means for achieving effective

13 compliance with this section and sections 9 and 12.

14 ‘‘(4) PREFERENCE FOR CIVIL ENFORCEMENT

15 OVER CRIMINAL ENFORCEMENT.—As part of the co16 operative efforts required under paragraph (3), the

17 agencies referred to in paragraph (1) shall consider

18 means for achieving compliance with this section and

19 section 9 through the exercise of administrative en20 forcement authority under this subsection without

21 resorting to criminal enforcement actions under sub22 section (d) except in appropriate cases.

23 ‘‘(5) EFFECTIVE DATE.—Paragraphs (1) and

24 (2) shall not take effect until joint interagency co25 operation and enforcement guidelines are adopted by
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1 all the agencies to which paragraphs (1) and (2)

2 apply and the enforcement authority of the Sec3 retary with respect to this section and sections 9 and

4 12 shall continue until such paragraphs take ef5 fect.’’.

6 (f) INCREASED SCIENTER REQUIREMENT FOR CRIMI7 NAL PENALTY.—Section 8(d) of the Real Estate Settle8 ment Procedures Act of 1974 (12 U.S.C. 2607(d)) is

9 amended—

10 (1) in paragraph (1), by inserting ‘‘willfully’’

11 after ‘‘persons who’’; and

12 (2) in paragraph (3), by striking ‘‘was not in13 tentional and’’.

14 (g) REDESIGNATION OF CONTROLLED BUSINESS AR15 RANGEMENTS AS AFFILIATED BUSINESS ARRANGE16 MENTS.—The Real Estate Settlement Procedures Act of

17 1974 (12 U.S.C. 2601 et seq.) is amended—

18 (1) in section 3(7), by striking ‘‘controlled busi19 ness arrangement’’ and inserting ‘‘affiliated business

20 arrangement’’; and

21 (2) in subsections (c)(4) and (d)(6) of section

22 8, by striking ‘‘controlled business arrangements’’

23 and inserting ‘‘affiliated business arrangements’’.

24 (h) TECHNICAL AND CONFORMING AMENDMENTS.—
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1 (1) Section 4(a) of the Real Estate Settlement

2 Procedures Act of 1974 (12 U.S.C. 2603(a)) is

3 amended by striking ‘‘Federal Home Loan Bank

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

5 Thrift Supervision’’.

6 (2) Section 8(d)(4) of the Real Estate Settle7 ment Procedures Act of 1974 (12 U.S.C.

8 2607(d)(4)) is amended by inserting ‘‘any other

9 agency described in subsection (f)(1),’’ after ‘‘the

10 Secretary,’’.

11 (3) Section 10(c)(1)(C) of the Real Estate Set12 tlement Procedures Act of 1974 (12 U.S.C.

13 2609(c)(1)(C)) is amended by striking ‘‘Not later

14 than the expiration of the 90-day period beginning

15 on the date of the enactment of the Cranston-Gon16 zalez National Affordable Housing Act, the’’ and in17 serting ‘‘The’’.

18 (4) Section 16 of the Real Estate Settlement

19 Procedures Act of 1974 (12 U.S.C. 2614) is amend20 ed by striking ‘‘Secretary,’’ and inserting ‘‘Board, an

21 agency referred to in any subparagraph of section

22 8(f)(1),’’.

23 (5) Section 18 of the Real Estate Settlement

24 Procedures Act of 1974 (12 U.S.C. 2616) is amend25 ed—
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1 (A) by striking ‘‘Secretary is authorized

2 to’’ and inserting ‘‘Board and Secretary may

3 jointly’’;

4 (B) by striking ‘‘Secretary’’ each place

5 such term appears other than the 1st place and

6 inserting ‘‘Board and Secretary’’; and

7 (C) by striking ‘‘determines that such

8 laws’’ and inserting ‘‘determine that such

9 laws’’.

10 (6) Section 19(a) of the Real Estate Settlement

11 Procedures Act of 1974 (12 U.S.C. 2617(a)) is

12 amended to read as follows:

13 ‘‘(a) REGULATIONS.—

14 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

15 the Secretary and the Board may prescribe such

16 regulations, make such interpretations, and grant

17 such reasonable exemptions for classes of trans18 actions, as may be necessary to achieve the purposes

19 of this Act.

20 ‘‘(2) APPLICATION.—

21 ‘‘(A) BOARD.—The authority of the Board

22 under paragraph (1) shall apply with respect

23 to—

24 ‘‘(i) sections 4, 5, 6, 10, and 12; and
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1 ‘‘(ii) sections 3, 7, 17, and 18 to the

2 extent such sections are applicable with re3 spect to the sections described in clause (i).

4 ‘‘(B) SECRETARY.—The authority of the

5 Secretary under paragraph (1) shall apply with

6 respect to—

7 ‘‘(i) sections 8 and 9; and

8 ‘‘(ii) sections 3, 7, 17, and 18 to the

9 extent such sections are applicable with re10 spect to the sections described in clause

11 (i).’’.

12 (7) Section 19(b) of the Real Estate Settlement

13 Procedures Act of 1974 (12 U.S.C. 2617(b)) is

14 amended by inserting ‘‘, the Board,’’ after ‘‘the Sec15 retary’’.

16 (8) Section 19(c) of the Real Estate Settlement

17 Procedures Act of 1974 (12 U.S.C. 2617(c)) is

18 amended—

19 (A) in paragraph (1)—

20 (i) by striking ‘‘Secretary’’ the 1st

21 place such term appears and inserting

22 ‘‘Board, with respect to any action to en23 force section 4, 5, 6, or 10, and each agen24 cy referred to in any subparagraph of sec-
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1 tion 8(f)(1), with respect to any action to

2 enforce section 8, 9, or 12,’’; and

3 (ii) by striking ‘‘Secretary’’ each place

4 such term appears other than the 1st place

5 and inserting ‘‘Board or such other agen6 cy’’; and

7 (B) in paragraph (2), by striking ‘‘Sec8 retary’’ and inserting ‘‘Board or an agency re9 ferred to in any subparagraph of section

10 8(f)(1)’’.

11 (9) The heading for section 19 of the Real Es12 tate Settlement Procedures Act of 1974 (12 U.S.C.

13 2617) is amended to read as follows:

14 ‘‘AUTHORITY OF THE SECRETARY AND THE FEDERAL

15 RESERVE BOARD’’.

16 (i) REPEAL OF OBSOLETE PROVISIONS.—The Real

17 Estate Settlement Procedures Act of 1974 (12 U.S.C.

18 2601 et seq.) is amended by striking sections 13, 14, and

19 15.

20 SEC. 302. SIMPLIFICATION AND UNIFICATION OF DISCLO21 SURES REQUIRED UNDER RESPA AND TILA

22 FOR MORTGAGE TRANSACTIONS.

23 (a) IN GENERAL.—With respect to credit trans24 actions which are subject to the Real Estate Settlement

25 Procedures Act of 1974 and the Truth in Lending Act,
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1 the Board of Governors of the Federal Reserve System

2 shall take such action as may be necessary before the end

3 of the 3-month period beginning on the date of the enact4 ment of this Act—

5 (1) to simplify the disclosures applicable to such

6 transactions under such Acts, including the timing

7 of the disclosures; and

8 (2) to provide a single format for such disclo9 sures which will satisfy the requirements of each

10 such Act with respect to such transactions.

11 (b) REGULATIONS.—To the extent that it is nec12 essary to prescribe any regulation in order to effect any

13 changes required to be made under subsection (a), the pro14 posed regulation shall be published in the Federal Register

15 before the end of the 3-month period referred to in sub16 section (a).

17 (c) RECOMMENDATIONS FOR LEGISLATION.—If the

18 Board of Governors of the Federal Reserve System finds

19 that legislative action may be necessary or appropriate in

20 order to simplify and unify the disclosure requirements

21 under the Real Estate Settlement Procedures Act of 1974

22 and the Truth in Lending Act, the Board shall submit

23 a report containing recommendations to the Congress con24 cerning such action.
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1 SEC. 303. INCREASED REGULATORY FLEXIBILITY UNDER

2 THE TRUTH IN LENDING ACT.

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

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

5 adding at the end the following new paragraph:

6 ‘‘(7) Transactions for which the Board, by reg7 ulation, determines that coverage under the Act is

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

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

10 Truth in Lending Act (15 U.S.C. 1604) is amended—

11 (1) by redesignating subsections (b), (c), and

12 (d) as subsections (c), (d), and (e), respectively; and

13 (2) by inserting after subsection (a) the follow14 ing new subsection:

15 ‘‘(b) EXEMPTIVE AUTHORITY.—

16 ‘‘(1) IN GENERAL.—The Board shall exempt

17 from all or parts of this title any class of trans18 actions for which, in the Board’s judgment, coverage

19 under all or part of this title does not provide a

20 measurable benefit to consumers in the form of use21 ful information or protection.

22 ‘‘(2) FACTORS TO BE CONSIDERED.—In deter23 mining which classes of transactions to exempt in

24 whole or in part, the Board shall consider, among

25 other factors, the following:
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1 ‘‘(A) The amount of the loan or closing

2 costs and whether the disclosures, right of re3 scission, and other provisions are necessary,

4 particularly for small loans.

5 ‘‘(B) Whether the requirements of this title

6 complicate, hinder, or make more expensive the

7 credit process for the class of transactions.

8 ‘‘(C) The status of the borrower, including,

9 the borrowers’ related financial arrangements,

10 the financial sophistication of the borrower rel11 ative to the type of transaction, and the impor12 tance of the credit and related supporting prop13 erty to the borrower.’’.

14 SEC. 304. REDUCTIONS IN RESPA REGULATORY BURDENS;

15 CLARIFYING AMENDMENTS.

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

17 Real Estate Settlement Procedures Act of 1974 (12

18 U.S.C. 2605) is amended to read as follows:

19 ‘‘(a) DISCLOSURE TO APPLICANT RELATING TO AS20 SIGNMENT, SALE, OR TRANSFER OF LOAN SERVICING.—

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

22 federally related mortgage loan shall disclose to each

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

24 application for the loan, whether the servicing of any

25 such loan may be assigned, sold, or transferred to
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1 any other person at any time while such loan is out2 standing.

3 ‘‘(2) SIGNATURE OF APPLICANT.—Any disclo4 sure of the information required under paragraph

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

6 unless the disclosure is accompanied by a written

7 statement, in such form as the Secretary shall de8 velop before the expiration of the 180-day period be9 ginning on the date of the enactment of the Finan10 cial Institutions Regulatory Relief Act of 1996, that

11 the applicant has read and understood the disclosure

12 and that is evidenced by the signature of the appli13 cant at the place where such statement appears in

14 the application.’’.

15 (b) EFFECTIVE DATE.—The amendments made by

16 subsection (a) shall take effect 180 days after the date

17 of the enactment of this Act.

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

19 Real Estate Settlement Procedures Act of 1974 (12

20 U.S.C. 2602(1)(A)) is amended by striking ‘‘or subordi21 nate’’.

22 (d) CONSISTENCY OF RESPA AND TRUTH IN LEND23 ING ACT EXEMPTION OF BUSINESS LOANS.—Section 7 of

24 the Real Estate Settlement Procedures Act of 1974 (12

25 U.S.C. 2606) is amended—
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1 (1) by inserting ‘‘(a) IN GENERAL.—’’ before

2 ‘‘This Act’’; and

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

4 subsection:

5 ‘‘(b) INTERPRETATION.—In issuing regulations pur6 suant to section 19(a) of this Act, the Board shall ensure

7 that, with regard to subsection (a), the exemption for busi8 ness credit includes all business credit which is exempt

9 from the Truth in Lending Act in accordance with section

10 226.3(a) of the regulations prescribed by the Board known

11 as ‘regulation Z’ (12 C.F.R. 226.3(a)), as in effect on the

12 date of enactment of the Financial Institutions Regulatory

13 Relief Act of 1996.’’.

14 SEC. 305. DISCLOSURES FOR ADJUSTABLE RATE MORT15 GAGES.

16 (a) IN GENERAL.—Section 127A(a)(2)(G) of the

17 Truth in Lending Act (15 U.S.C. 1637a(a)(2)(G)) is

18 amended by inserting before the semicolon ‘‘, or a state19 ment that the monthly payment may increase or decrease

20 significantly due to increases in the annual percentage

21 rate’’.

22 (b) TECHNICAL AND CONFORMING AMENDMENT.—

23 Section 127A(b)(3) of the Truth in Lending Act (15

24 U.S.C. 1637a(b)(3)) is amended by striking ‘‘required

25 under’’ and inserting ‘‘referred to in’’.
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1 (c) ALTERNATIVE TO HISTORICAL EXAMPLE.—Sec2 tion 128(a) of the Truth in Lending Act (15 U.S.C.

3 1638(a)) is amended by inserting at the end the following

4 new paragraph:

5 ‘‘(14) In any variable rate transaction secured

6 by the consumer’s principal dwelling with a term

7 greater than 1 year, at the creditors’ option, a state8 ment that the monthly payment may increase or de9 crease substantially, or a historical example illustrat10 ing the effects of interest rate changes implemented

11 according to the loan program.’’.

12 (d) ENSURING HONORING OF LOCK-IN PROMISES.—

13 Section 128(b) of the Truth in Lending Act (15 U.S.C.

14 1638(b)) is amended by adding at the end the following

15 new paragraph:

16 ‘‘(3) In the case of a residential mortgage trans17 action, the disclosures under subsection (a) shall include

18 the following:

19 ‘‘(A) The note rate and points, and a state20 ment, if applicable, that these terms are subject to

21 change.

22 ‘‘(B) A statement that the creditor must in23 clude the disclosed note rate and points in the credit

24 agreement unless, in relation to either or both of

25 those terms—
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1 ‘‘(i) the disclosure clearly and conspicu2 ously indicates that the term is subject to

3 change, or

4 ‘‘(ii) in the case of any term to which

5 clause (i) does not apply—

6 ‘‘(I) the creditor has clearly and con7 spicuously indicated that the term is condi8 tioned on closing the transaction within a

9 prescribed time;

10 ‘‘(II) the creditor has promptly and

11 clearly communicated to the consumer the

12 information and documentation that the

13 consumer is required to provide to the

14 creditor; and

15 ‘‘(III) the consumer has failed to pro16 vide such information and documentation

17 within a reasonable time after receiving

18 that communication.’’.

19 SEC. 306. CERTAIN CHARGES.

20 Section 106(c) of the Truth in Lending Act (15

21 U.S.C. 1605(c)) is amended to read as follows:

22 ‘‘(c) TREATMENT OF CERTAIN DEBT CANCELLATION

23 AND DEFICIENCY WAIVER CONTRACTS.—Charges or pre24 miums for any insurance or for any voluntary noninsur25 ance product, written in connection with any consumer
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1 credit transaction, that provides protections against loss

2 of or damage to property or against part or all of the debt3 or’s liability for amounts in excess of the value of the col4 lateral securing the debtor’s obligation, or against liability

5 arising out of the ownership or use of property, shall be

6 included in the finance charge unless a clear and specific

7 statement in writing is furnished by the creditor to the

8 person to whom the credit is extended, setting forth the

9 cost of the insurance or product if obtained from or

10 through the creditor, and stating that the person to whom

11 credit is extended may choose the person through which

12 the insurance or product is to be obtained.’’.

13 SEC. 307. EXEMPTIONS FROM RESCISSION.

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

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

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

17 (3);

18 (2) by striking the period at the end of para19 graph (4) and inserting ‘‘; or’’; and

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

21 paragraph:

22 ‘‘(5) a transaction, other than a mortgage re23 ferred to in section 103(aa), which—

24 ‘‘(A) is a refinancing of the principal bal25 ance then due and any accrued and unpaid fi-
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1 nance charges of a residential mortgage trans2 action as defined in section 103(w), or is any

3 subsequent refinancing of such a transaction;

4 and

5 ‘‘(B) does not provide any new consolida6 tion or new advance.’’.

7 (b) TECHNICAL AND CONFORMING AMENDMENT.—

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

9 1635(e)(2)) is amended by inserting ‘‘, other than a trans10 action described in subsection (e)(5),’’ after ‘‘a refinancing

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

12 SEC. 308. RECOVERY OF FEES.

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

14 U.S.C. 1635) is amended—

15 (1) in the 1st sentence, by inserting ‘‘, except

16 any charge for an appraisal report or credit report’’

17 after ‘‘other charge’’; and

18 (2) in the 2d sentence, by striking ‘‘otherwise’’

19 and inserting ‘‘as otherwise required under this sub20 section’’.

21 SEC. 309. HOME OWNERSHIP DEBT COUNSELING NOTIFICA22 TION.

23 Section 106(c) of the Housing and Urban Develop24 ment Act of 1968 (12 U.S.C. 1701x(c)) is amended by

25 striking paragraph (5).
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1 SEC. 310. HOME MORTGAGE DISCLOSURE ACT.

2 (a) Section 309 of the Home Mortgage Disclosure

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

4 (1) in the 2d sentence, by striking

5 ‘‘$10,000,000’’ and inserting ‘‘$50,000,000’’; and

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

7 sentences: ‘‘The Board may also, by regulation, ex8 empt from the provisions of this Act institutions

9 specified in section 303(2)(A) which have total as10 sets as of their last full fiscal year of $50,000,000

11 or greater where the burden of complying with this

12 Act on such institutions outweighs the usefulness of

13 the information required to be disclosed. The exemp14 tions provided under this section shall not be appli15 cable to an institution which the Board, by order,

16 has found a reasonable basis to believe is not fulfill17 ing its obligations to serve the housing needs of the

18 communities and neighborhoods in which it located.

19 An institution subject to such an order shall be re20 quired to comply with the requirements of this Act

21 for loans made after the time that the order is is22 sued at such time and for such period as the Board

23 deems appropriate. The dollar amount in this section

24 shall be adjusted annually after December 31, 1994,

25 by the annual percentage increase in the Consumer

26 Price Index for Urban Wage Earners and Clerical
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1 Workers published by the Bureau of Labor Statis2 tics.’’.

3 (b) Section 304 of the Home Mortgage Disclosure

4 Act of 1975 (12 U.S.C. 2803) is amended by adding at

5 the end the following new subsection:

6 ‘‘(m) OPPORTUNITY TO REDUCE COMPLIANCE BUR7 DEN.—

8 ‘‘(1) A depository institution shall be considered

9 to have satisfied the public availability requirements

10 of subsection (a) if such institution keeps the infor11 mation required under that subsection at its home

12 office and provides notice at the branch locations

13 specified in such subsection that such information is

14 available upon request from the home office of the

15 institution. A home office of the depository institu16 tion receiving a request for such information pursu17 ant to this subsection shall provide the information

18 pertinent to the location of the branch in question

19 within fifteen days of the receipt of the written re20 quest.

21 ‘‘(2) In complying with paragraph (1), a deposi22 tory institution may provide the individual request23 ing such information, at the institution’s choice,

24 with—
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1 ‘‘(A) a paper copy of the information re2 quested; or

3 ‘‘(B) if acceptable to the individual, the in4 formation through a form of electronic medium,

5 such as computer disc.’’.

6 Subtitle B—Community

7 Reinvestment Act Amendments

8 SEC. 321. EXPRESSION OF CONGRESSIONAL INTENT.

9 Subsection (b) of section 802 of the Community Rein10 vestment Act of 1977 (12 U.S.C. 2901) is amended to

11 read as follows:

12 ‘‘(b) It is the purpose of this title to require each ap13 propriate Federal financial supervisory agency to use its

14 authority, when examining financial institutions, to en15 courage such institutions to help meet the credit needs of

16 the local communities in which they are chartered consist17 ent with the safe and sound operation of such institutions.

18 When examining financial institutions, a supervisory agen19 cy shall not impose additional burden, recordkeeping, or

20 reporting upon such institutions.’’.

21 SEC. 322. COMMUNITY REINVESTMENT ACT EXEMPTION.

22 The Community Reinvestment Act of 1977 (12

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

24 the following new section:
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1 ‘‘SEC. 809. EXAMINATION EXEMPTION.

2 ‘‘(a) IN GENERAL.—A regulated financial institution

3 shall not be subject to the examination requirements of

4 this title or any regulations issued under this section if

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

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

7 or other unit of general local government no part of

8 which falls within any metropolitan statistical area;

9 and

10 ‘‘(2) the aggregate assets of such institution

11 and any depository institution holding company

12 which controls such institution is not greater than

13 $100,000,000.

14 ‘‘(b) ANNUAL ADJUSTMENT.—The dollar amount in

15 subsection (a)(2) shall be adjusted annually after Decem16 ber 31, 1994, by the annual percentage increase in the

17 Consumer Price Index for Urban Wage Earners and Cleri18 cal Workers published by the Bureau of Labor Statis19 tics.’’.

20 SEC. 323. COMMUNITY INPUT AND CONCLUSIVE RATING.

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

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

23 2903) is amended by inserting ‘‘conducted in accordance

24 with section 806A,’’ after ‘‘financial institution,’’.

25 (b) COMMUNITY INPUT AND CONCLUSIVE RATING.—

26 The Community Reinvestment Act of 1977 (12 U.S.C.
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1 2901 et seq.) is amended by inserting after section 806

2 the following new section:

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

4 ‘‘(a) PUBLICATION OF EXAM SCHEDULE AND OPPOR5 TUNITY FOR COMMENT.—

6 ‘‘(1) PUBLICATION OF NOTICE.—Each appro7 priate Federal financial supervisory agency shall—

8 ‘‘(A) publish in the Federal Register, 30

9 days before the beginning of a calendar quarter,

10 a listing of institutions scheduled for evaluation

11 for compliance with this title during such cal12 endar quarter; and

13 ‘‘(B) provide opportunity for written com14 ments from the community on the performance,

15 under this title, of each institution scheduled

16 for evaluation.

17 ‘‘(2) COMMENT PERIOD.—Written comments

18 may not be submitted to an appropriate Federal fi19 nancial supervisory agency pursuant to paragraph

20 (1) after the end of the 30-day period beginning on

21 the first day of the calendar quarter.

22 ‘‘(3) COPY OF COMMENTS.—The agency shall

23 provide a copy of such comments to the institution.

24 ‘‘(b) EVALUATION.—The appropriate Federal finan25 cial supervisory agency shall—
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1 ‘‘(1) evaluate the institution in accordance with

2 the standards contained in section 804; and

3 ‘‘(2) prepare and publish a written evaluation of

4 the institution as required under section 807.

5 ‘‘(c) RECONSIDERATION OF RATING.—

6 ‘‘(1) REQUEST FOR RECONSIDERATION.—A re7 consideration of an institution’s rating referred to in

8 section 807(b)(1)(C), may be requested within 30

9 days of the rating’s disclosure to the public.

10 ‘‘(2) PROCEDURES FOR REQUEST.—Any such

11 request shall be made in writing and filed with the

12 appropriate Federal financial supervisory agency,

13 and may be filed by the institution or a member of

14 the community.

15 ‘‘(3) BASIS FOR REQUEST.—Any request for re16 consideration under this subsection shall be based on

17 significant issues of a substantive nature which are

18 relevant to the delineated community of the institu19 tion and, in the case of a request by a member of

20 the community, shall be limited to issues previously

21 raised in comments submitted pursuant to sub22 section (a).

23 ‘‘(4) COMPLETION OF REVIEW.—The appro24 priate Federal financial supervisory agency shall
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1 complete any requested reconsideration within 30

2 days of the filing of the request.

3 ‘‘(d) CONCLUSIVE RATING.—

4 ‘‘(1) IN GENERAL.—An institution’s rating shall

5 become conclusive on the later of—

6 ‘‘(A) 30 days after the rating is disclosed

7 to the public; or

8 ‘‘(B) the completion of any requested re9 consideration by the Federal financial super10 visory agency.

11 ‘‘(2) RATING CONCLUSIVE OF MEETING COMMU12 NITY CREDIT NEEDS.—An institution’s rating shall

13 be the conclusive assessment of the institution’s

14 record of meeting the credit needs of its community

15 for purposes of section 804 until the institution’s

16 next rating, developed pursuant to an examination,

17 becomes conclusive.

18 ‘‘(3) SAFE HARBOR.—Institutions which have

19 received a ‘satisfactory’ or ‘outstanding’ rating shall

20 be deemed to have met the purposes of section 804.

21 ‘‘(4) RULE OF CONSTRUCTION.—Notwithstand22 ing any other provision of law, no provision of this

23 section shall be construed as granting a cause of ac24 tion to any person.’’.
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1 (c) OVERALL EVALUATION OF INSTITUTION.—Para2 graph (2) of section 804(a) of the Community Reinvest3 ment Act of 1977 (12 U.S.C. 2903(a)) is amended to read

4 as follows:

5 ‘‘(2) take such record into account in the over6 all evaluation of the condition of the institution by

7 the appropriate Federal financial supervisory agen8 cy.’’.

9 SEC. 324. SPECIAL PURPOSE FINANCIAL INSTITUTIONS.

10 (a) IN GENERAL.—Section 804 of the Community

11 Reinvestment Act of 1977 (12 U.S.C. 2903) is amended

12 by adding at the end the following new subsection:

13 ‘‘(c) SPECIAL PURPOSE INSTITUTIONS.—

14 ‘‘(1) IN GENERAL.—In conducting assessments

15 pursuant to this section at any special purpose insti16 tution, the appropriate Federal financial supervisory

17 agency shall—

18 ‘‘(A) consider the nature of business such

19 institution is involved in; and

20 ‘‘(B) assess and take into account the

21 record of the institution commensurate with the

22 amount of deposits (as defined in section 3(1)

23 of the Federal Deposit Insurance Act) received

24 by such institution.
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1 ‘‘(2) STANDARDS.—Each appropriate Federal

2 financial supervisory agency shall develop standards

3 under which special purpose institutions may be

4 deemed to have complied with the requirements of

5 this title which are consistent with the specific na6 ture of such businesses.’’.

7 (b) SPECIAL PURPOSE INSTITUTION DEFINED.—

8 Section 803 of the Community Reinvestment Act of 1977

9 (12 U.S.C. 2902) is amended by adding at the end the

10 following new paragraph:

11 ‘‘(5) SPECIAL PURPOSE INSTITUTIONS.—The

12 term ‘special purpose institution’ means a financial

13 institution that does not generally accept deposits

14 from the public in amounts of less than $100,000,

15 such as wholesale, credit card, and trust institu16 tions.’’.

17 SEC. 325. INCREASED INCENTIVES FOR LENDING TO LOW18 AND MODERATE-INCOME COMMUNITIES.

19 (a) IN GENERAL.—Section 804(b) of the Community

20 Reinvestment Act of 1977 (12 U.S.C. 2903(b)) is amend21 ed to read as follows:

22 ‘‘(b) POSITIVE CONSIDERATION OF CERTAIN LOANS

23 AND INVESTMENTS.—In assessing and taking into ac24 count the records of a regulated financial institution under
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1 subsection (a), the appropriate Federal financial super2 visory agency shall—

3 ‘‘(1) consider as a positive factor, consistent

4 with the safe and sound operation of the institution,

5 the institution’s investment in or loan to—

6 ‘‘(A) any minority depository institution or

7 women’s depository institution (as such terms

8 are defined in section 808(b)) or any low-in9 come credit union;

10 ‘‘(B) any joint venture or other entity or

11 project which promotes the public welfare in

12 any distressed community (as defined by such

13 agency) whether or not the distressed commu14 nity is located in the local community in which

15 the regulated financial institution is chartered

16 to do business; and

17 ‘‘(C) targeted low- and moderate-income

18 communities, including real property loans to

19 such communities; and

20 ‘‘(2) consider equally with other factors capital

21 investment, loan participation, and other ventures

22 undertaken by the institution in cooperation with—

23 ‘‘(A) minority- and women-owned financial

24 institutions and low-income credit unions to the

25 extent that these activities help meet the credit
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1 needs of the local communities in which such

2 institutions are chartered; and

3 ‘‘(B) community development corporations

4 in extending credit and other financial services

5 principally to low- and moderate-income persons

6 and small businesses to the extent that such

7 community development corporations help meet

8 the credit needs of the local communities served

9 by the majority-owned institution.’’.

10 (b) AMENDMENT TO DEFINITIONS.—Section 803 of

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

12 2902) is amended by inserting after paragraph (5) (as

13 added by section 324(b) of this subtitle) the following new

14 paragraph:

15 ‘‘(6) STATE BANK SUPERVISOR.—The term

16 ‘State bank supervisor’ has the same meaning as in

17 section 3(r) of the Federal Deposit Insurance Act.’’.

18 (c) TECHNICAL CORRECTION.—The 1st of the 2

19 paragraphs designated as paragraph (2) of section 803 of

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

21 2902) is amended to read as follows:

22 ‘‘(D) the Director of the Office of Thrift

23 Supervision with respect to any savings associa24 tion (the deposits of which are insured by the

25 Federal Deposit Insurance Corporation) and
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1 any savings and loan holding company (other

2 than a company which is a bank holding com3 pany);’’.

4 SEC. 326. PROHIBITION ON ADDITIONAL REPORTING

5 UNDER CRA.

6 Section 806 of the Community Reinvestment Act of

7 1977 (12 U.S.C. 2905) is amended to read as follows:

8 ‘‘SEC. 806. REGULATIONS.

9 ‘‘(a) IN GENERAL.—

10 ‘‘(1) PUBLICATION REQUIREMENT.—Regula11 tions to carry out the purposes of this title shall be

12 published by each appropriate Federal financial su13 pervisory agency.

14 ‘‘(2) PROHIBITION ON ADDITIONAL RECORD15 KEEPING.—Regulations prescribed and policy state16 ments, commentary, examiner guidance, or other su17 pervisory material issued under this title shall not

18 impose any additional recordkeeping on a financial

19 institution.

20 ‘‘(3) PROHIBITION ON LOAN DATA COLLEC21 TION.—No loan data may be required to be collected

22 and reported by a financial institution and no such

23 data may be made public by any Federal financial

24 supervisory agency under this title.’’.
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1 SEC. 327. TECHNICAL AMENDMENT.

2 Section 807(b)(1)(B) of the Community Reinvest3 ment Act (12 U.S.C. 2906) is amended by striking ‘‘The

4 information’’ and inserting ‘‘In the case of a regulated fi5 nancial institution that maintains domestic branches in 2

6 or more States, the information’’.

7 SEC. 328. DUPLICATIVE REPORTING.

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

9 (12 U.S.C. 1430(g)) is amended by adding at the end the

10 following new paragraph (3):

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

12 apply to members receiving a grade of ‘outstanding’

13 or ‘satisfactory’ under section 807 of the Community

14 Reinvestment Act of 1977.’’.

15 SEC. 329. CRA CONGRESSIONAL OVERSIGHT.

16 (a) SENSE OF CONGRESS RELATING TO AGGRESSIVE

17 OVERSIGHT.—It is the sense of the Congress that the ap18 propriate committees of the House of Representatives and

19 the Senate should exercise aggressive oversight of the

20 adoption and implementation of any regulation by any ap21 propriate Federal financial supervisory agency under the

22 Community Reinvestment Act of 1977 after the date of

23 the enactment of this Act.

24 (b) AGENCY REPORTS REQUIRED.—

25 (1) IN GENERAL.—Each appropriate Federal fi26 nancial supervisory agency shall submit a report to
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1 the Congress by December 31, 1996, and by Decem2 ber 31, 1997, on the implementation of all regula3 tions prescribed by such agency under the Commu4 nity Reinvestment Act of 1977 after the date of the

5 enactment of this Act.

6 (2) REQUIREMENTS RELATING TO PREPARA7 TION OF REPORTS.—In preparing each report re8 quired under paragraph (1), each appropriate Fed9 eral financial supervisory agency shall—

10 (A) solicit and include comments from reg11 ulated financial institutions with respect to the

12 regulations which are the subject of the report;

13 and

14 (B) include quantifiable measures of the

15 cost savings achieved under the regulations

16 which are the subject of the report and the ef17 fectiveness of such regulations in achieving the

18 purposes of the Community Reinvestment Act

19 of 1977.

20 (3) DEFINITIONS.—For purposes of this sec21 tion, the terms ‘‘appropriate Federal financial super22 visory agency’’ and ‘‘regulated financial institution’’

23 have the same meanings as in section 803 of the

24 Community Reinvestment Act of 1977.
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1 SEC. 330. CONSULTATION AMONG EXAMINERS.

2 Section 10 of the Federal Deposit Insurance Act (12

3 U.S.C. 1820) is amended by adding at the end the follow4 ing new subsection:

5 ‘‘(j) CONSULTATION AMONG EXAMINERS.—

6 ‘‘(1) IN GENERAL.—Each appropriate Federal

7 banking agency shall take such action as may be

8 necessary to ensure that examiners employed by the

9 agency—

10 ‘‘(A) consult on examination activities with

11 respect to any depository institution; and

12 ‘‘(B) achieve an agreement and resolve any

13 inconsistencies on the recommendations to be

14 given to such institution as a consequence of

15 any examinations.

16 ‘‘(2) EXAMINER-IN-CHARGE.—Each agency

17 shall consider appointing an examiner-in-charge with

18 respect to a depository institution to ensure con19 sultation on examination activities among all of the

20 agency’s examiners involved in examinations of such

21 institution.’’.

22 SEC. 331. LIMITATION ON REGULATIONS.

23 Section 806 of the Community Reinvestment Act of

24 1977 (12 U.S.C. 2905) (as amended by section 326 of

25 this subtitle) is amended by adding at the end the follow26 ing new subsections:
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1 ‘‘(b) LIMITATION ON REGULATIONS.—No regulation

2 may be prescribed under this title by any Federal agency

3 which would—

4 ‘‘(1) require any regulated financial institution

5 to—

6 ‘‘(A) make any loan or enter into any

7 other agreement on the basis of any discrimina8 tory criteria prohibited under any law of the

9 United States; or

10 ‘‘(B) make any loan to, or enter into any

11 other agreement with, any uncreditworthy per12 son that would jeopardize the safety and sound13 ness of such institution; or

14 ‘‘(2) prevent or hinder in any way a financial

15 institution’s full responsibility to provide credit to all

16 segments of the community.

17 ‘‘(c) ENCOURAGE LOANS TO CREDITWORTHY BOR18 ROWERS.—Regulations prescribed under this title shall en19 courage regulated financial institutions to make loans and

20 extend credit to all creditworthy persons, consistent with

21 safety and soundness.’’.
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1 Subtitle C—Consumer Banking

2 Reforms

3 SEC. 341. TRUTH IN SAVINGS.

4 (a) PURPOSE.—Section 262 of the Truth in Savings

5 Act (12 U.S.C. 4301) is amended to read as follows:

6 ‘‘SEC. 262. PURPOSE.

7 ‘‘It is the purpose of this subtitle to ensure that con8 sumers can make a meaningful comparison between the

9 competing claims of depository institutions with regard to

10 deposit accounts by requiring that institutions offering in11 terest-bearing accounts pay interest on the full amount of

12 principal each day in a consumer deposit account at the

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

14 (b) PROHIBITION ON MISLEADING OR INACCURATE

15 ADVERTISEMENTS AND DISCLOSURES.—Section 263 is

16 amended to read as follows:

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

18 ADVERTISEMENTS AND DISCLOSURES.

19 ‘‘No depository institution or deposit broker shall

20 make any advertisement, announcement, solicitation or

21 disclosure relating to a deposit account that is inaccurate

22 or misleading, including any inaccurate or misleading de23 scription of a free or no-cost account, or that misrepre24 sents its deposit contracts.’’.
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1 (c) ACCOUNT INFORMATION UPON OPENING AN AC2 COUNT.—Section 264 of the Truth in Savings Act (12

3 U.S.C. 4304) is amended to read as follows:

4 ‘‘SEC. 264. ACCOUNT INFORMATION.

5 ‘‘(a) IN GENERAL.—Each depository institution shall

6 disclose fees, charges, penalties, and interest rates applica7 ble to each class of accounts offered by the institution in

8 accordance with this section.

9 ‘‘(b) INFORMATION ON FEES AND CHARGES.—Each

10 depository institution shall disclose the following informa11 tion with respect to any account to a consumer at the time

12 the account is opened, or at such earlier time as a

13 consumer may request (and no additional information may

14 be required to be disclosed under this subtitle by regula15 tion or otherwise with respect to such account):

16 ‘‘(1) A description of all fees, periodic service

17 charges, penalties, and interest rates which may be

18 charged or assessed against the account (or against

19 the account holder in connection with such account),

20 the amount of any such fees, charges, or penalties

21 (or the method by which such amount will be cal22 culated), and the conditions under which any such

23 amount will be assessed.

24 ‘‘(2) All minimum balance requirements that af25 fect fees, charges, and penalties, including a clear
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1 description of how each such minimum balance is

2 calculated.

3 ‘‘(3) Any minimum amount required with re4 spect to the initial deposit in order to open the ac5 count.

6 ‘‘(c) INFORMATION ON INTEREST RATES.—The dis7 closures required under subsections (a) and (b) with re8 spect to any account shall include the following informa9 tion:

10 ‘‘(1) Any annual rate of simple interest.

11 ‘‘(2) The frequency with which interest will be

12 compounded and credited.

13 ‘‘(d) NO REGULATIONS AUTHORIZED.—No regula14 tions may be prescribed with respect to this section by the

15 Board or any agency referred to in this title, including

16 any regulation to define any terms used in this section.’’.

17 (d) DISCLOSURE OF CHANGE IN TERMS.—Section

18 265 of the Truth in Savings Act (12 U.S.C. 4304) is

19 amended to read as follows:

20 ‘‘SEC. 265. DISCLOSURE OF CHANGE IN TERMS.

21 ‘‘If any change is made in any item required to be

22 disclosed under section 264, all account holders who may

23 be affected by such change shall be notified by mail and

24 provided with a description of such change at least 30

25 days before the effective date of the change.’’.
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1 (e) REPEAL OF SECTIONS.—Sections 266, 268, 271,

2 and 273 of the Truth in Savings Act (12 U.S.C. 4304,

3 4305, 4307, 4310, and 4312, respectively) are hereby re4 pealed.

5 (f) REDESIGNATION OF SECTIONS.—Section 267,

6 270, 272 of the Truth in Savings Act (12 U.S.C. 4306,

7 4309, and 4311) are redesignated as sections 266, 268,

8 and 269, respectively.

9 (g) REDESIGNATION AND AMENDMENT OF SECTION

10 269.—Section 269 of the Truth in Savings Act (12 U.S.C.

11 4308) (as determined before the redesignation made by

12 subsection (f) of this section) is amended to read as fol13 lows:

14 ‘‘SEC. 267. REGULATIONS.

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

16 with each agency referred to in section 268(a) and public

17 notice and opportunity for comment, shall prescribe regu18 lations to carry out the purpose and provisions of this sub19 title.

20 ‘‘(b) EFFECTIVE DATE OF REGULATIONS.—The pro21 visions of this subtitle shall not apply with respect to any

22 depository institution before the effective date of regula23 tions prescribed by the Board under this subsection.’’.
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1 (h) REDESIGNATION AND AMENDMENT OF SECTION

2 274.—Section 274 of the Truth in Savings Act (12 U.S.C.

3 4313) is amended to read as follows:

4 ‘‘SEC. 270. DEFINITIONS.

5 ‘‘For the purposes of this subtitle, the following defi6 nitions shall apply:

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

8 any account intended for use by and generally used

9 by a consumer primarily for personal, family, or

10 household purposes that is offered by a depository

11 institution.

12 ‘‘(2) DEPOSIT BROKER.—The term ‘deposit

13 broker’—

14 ‘‘(A) has the meaning given to such term

15 in section 29(f)(1) of the Federal Deposit In16 surance Act; and

17 ‘‘(B) includes any person who solicits any

18 amount from any other person for deposit in an

19 insured depository institution.

20 ‘‘(3) DEPOSITORY INSTITUTION.—The term ‘de21 pository institution’—

22 ‘‘(A) means an institution described in

23 clause (i), (ii), (iii), (iv), (v), or (vi) of section

24 19(b)(1)(A) of the Federal Reserve Act; and
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1 ‘‘(B) does not include nonautomated credit

2 unions which were not required to comply with

3 the requirements of this title as of the date of

4 the enactment of the Financial Institutions

5 Regulatory Relief Act of 1996 pursuant to the

6 determination of the National Credit Union Ad7 ministration Board.

8 ‘‘(4) INTEREST.—The term ‘interest’ includes

9 dividends paid with respect to share accounts which

10 are accounts within the meaning of paragraph (1).

11 ‘‘(5) BOARD.—The term ‘Board’ means the

12 Board of Governors of the Federal Reserve Sys13 tem.’’.

14 (i) EFFECTIVE DATE.—

15 (1) IN GENERAL.—The amendments made by

16 this section shall take effect on the effective date of

17 regulations prescribed by the Board of Governors of

18 the Federal Reserve System to implement such

19 amendments.

20 (2) AUTHORITY TO ISSUE REGULATIONS.—Not21 withstanding paragraph (1), the Board of Governors

22 of the Federal Reserve System shall prescribe regu23 lations in accordance with the amendment made by

24 subsection (g).
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1 (3) CONTINUED APPLICABILITY OF PROVISIONS

2 UNTIL EFFECTIVE DATE OF NEW REGULATIONS.—

3 The Truth in Savings Act, as in effect on the day

4 before the date of the enactment of this Act, shall

5 continue to apply on and after such date until the

6 effective date of the amendments to such Act under

7 this section.

8 SEC. 342. INFORMATION SHARING.

9 Section 18 of the Federal Deposit Insurance Act (12

10 U.S.C. 1828) is amended by adding at the end the follow11 ing new subsection:

12 ‘‘(s) CUSTOMER ACCESS TO PRODUCTS.—

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

14 provision of law, any depository institution, or any

15 affiliate or subsidiary of any depository institution,

16 may share or exchange information or otherwise

17 transfer information between or among themselves

18 without any restriction or limitation if it is clearly

19 and conspicuously disclosed that the information

20 may be communicated among such persons and the

21 consumer is given the opportunity, before the time

22 that the information is initially communicated, to di23 rect that such information not be communicated

24 among such persons.
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1 ‘‘(2) DEFINITION.—For purposes of this sub2 section, the term ‘information’ means any and all

3 data, records, or other information and material ob4 tained or maintained by any depository institution or

5 any affiliate or subsidiary thereof in the ordinary

6 course of its business that relates in any way to a

7 person (as such term is defined in section 603(b) of

8 the Fair Credit Reporting Act) who applies for,

9 maintains, or has maintained an account or credit

10 relationship with or applied for, purchased or ob11 tained other products or services from any deposi12 tory institution or any affiliate or subsidiary of any

13 depository institution, regardless of the source of

14 manner in which the information is obtained or fur15 nished.

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

17 institution, or any affiliate or subsidiary of any de18 pository institution, relying on this subsection shall

19 not be deemed to be a consumer reporting agency,

20 user, or third party, and the information itself shall

21 not constitute a consumer report, within the mean22 ing of the Fair Credit Reporting Act or other similar

23 law.’’.
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1 SEC. 343. ELECTRONIC FUND TRANSFER ACT CLARIFICA2 TION.

3 (a) DEFINITION OF ACCEPTED CARD OR OTHER

4 MEANS OF ACCESS.—Section 903(1) of the Electronic

5 Fund Transfer Act (15 U.S.C. 1693a(1)) is amended by

6 inserting before the semicolon at the end the following:

7 ‘‘, but such term does not include a card, device, or com8 puter that a person may use to pay for transactions

9 through use of value stored on, or assigned to, the card,

10 device, or computer itself, except for those transactions

11 where such card, device, or computer is actually used to

12 access an account to effect such transaction’’.

13 (b) DEFINITION OF ACCOUNT.—Section 903(2) of

14 the Electronic Fund Transfer Act (15 U.S.C. 1693a(2))

15 is amended by inserting before the semicolon at the end

16 the following: ‘‘and does not include any value which is

17 stored on, or assigned to, a card, device, or computer itself

18 that enables a person to pay for transactions through use

19 of that stored value’’.

20 SEC. 344. LIMIT ON RESTITUTION FOR TRUTH IN LENDING

21 VIOLATIONS IF SAFETY AND SOUNDNESS OF

22 VIOLATOR WOULD BE AFFECTED.

23 Section 108(e)(3)(A) of the Truth in Lending Act (15

24 U.S.C. 1607(e)(3)(A)) is amended—
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1 (1) by striking ‘‘in any such case, the agency

2 may require’’ and inserting ‘‘in any such case, the

3 agency may (i) require’’;

4 (2) by striking ‘‘, except that with respect to

5 any transaction consummated after the effective

6 date of section 608 of the Truth in Lending Sim7 plification and Reform Act, the agency shall’’ and

8 inserting ‘‘; or (ii)’’; and

9 (3) by striking ‘‘reasonable,’’ and inserting

10 ‘‘reasonable if, in the case of an agency referred to

11 in paragraph (1), (2), or (3) of subsection (a), the

12 agency determines that a partial adjustment or the

13 making of partial payments over an extended period

14 is necessary to avoid causing the creditor to become

15 undercapitalized (as determined in accordance with

16 regulations prescribed by such agency under section

17 38 of the Federal Deposit Insurance Act);’’.

18 Subtitle D—Equal Credit

19 Opportunity Act Amendments

20 SEC. 351. SHORT TITLE.

21 This subtitle may be cited as the ‘‘Equal Credit Op22 portunity Act Amendments of 1995’’.

23 SEC. 352. FINDINGS AND PURPOSE.

24 (a) FINDINGS.—The Congress finds that both the

25 Equal Credit Opportunity Act (15 U.S.C. 1691, et seq.)
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1 and the Fair Credit Reporting Act (15 U.S.C. 1681, et

2 seq.) contain requirements that applicants for consumer

3 credit be given certain information in the event that ad4 verse action is taken on the application. These require5 ments differ in both scope and content and for that reason

6 are confusing to both the consumer who receives the infor7 mation and the party required to furnish the information.

8 (b) PURPOSE.—It is the purpose of this subtitle to

9 combine and simplify the adverse action notification re10 quirements of the Equal Credit Opportunity Act and the

11 Fair Credit Reporting Act regarding applications for

12 consumer credit and to make the information that is re13 quired to be furnished more understandable.

14 SEC. 353. EQUAL CREDIT OPPORTUNITY ACT AMEND15 MENTS.

16 (a) NOTICE OF ADVERSE ACTION.—Section

17 701(d)(2)(B) of the Equal Credit Opportunity Act (15

18 U.S.C. 1691(d)(2)(B)) is amended to read as follows:

19 ‘‘(B) giving written notification of adverse

20 action which discloses—

21 ‘‘(i) the applicant’s right to a state22 ment of reasons within 30 days after re23 ceipt by the creditor of a request made

24 within 60 days after such notification;
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1 ‘‘(ii) if credit is denied or the charge

2 for such credit is increased either wholly or

3 partly because of information contained in

4 a consumer report from a consumer re5 porting agency—

6 ‘‘(I) that fact and the name, ad7 dress, and telephone number of the

8 consumer reporting agency making

9 the report;

10 ‘‘(II) the consumer’s right to ob11 tain, under section 612, a free copy of

12 a consumer report on the consumer,

13 from the consumer reporting agency

14 referred to in subclause (I) within the

15 30-day period provided under such

16 section; and

17 ‘‘(III) the consumer’s right to

18 dispute, under section 611, with a

19 consumer reporting agency the accu20 racy or completeness of any informa21 tion in a consumer report furnished

22 by the agency.

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

24 for credit is increased either wholly or

25 partly because of information obtained
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1 from a person other than a consumer re2 porting agency bearing upon the consum3 er’s credit worthiness, credit standing,

4 credit capacity, character, general reputa5 tion, personal characteristics or mode of

6 living, that fact and the right to receive

7 disclosure of the nature of the information

8 so received, within a reasonable period of

9 time, upon the consumer’s written request

10 for information within 60 days after learn11 ing of such adverse action; and

12 ‘‘(iv) the identity of the person or of13 fice from which such notification may be

14 obtained.

15 Such statement of reasons may be given orally

16 if the written notification advises the applicant

17 of his right to have the statement of reasons

18 confirmed in writing on written request.’’.

19 (b) TECHNICAL AND CONFORMING AMENDMENT.—

20 Section 701(d)(3) of the Equal Credit Opportunity Act

21 (15 U.S.C. 1691(d)(3)) is amended by striking the period

22 at the end and adding the following: ‘‘and, to the extent

23 applicable, the name, address, and telephone number of

24 the consumer reporting agency identified in accordance

25 with the requirements of subsection (d)(3)(ii) and a state-
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1 ment of the right to obtain disclosure of the nature of the

2 information upon which adverse action was taken as re3 quired by such subsection.’’.

4 (c) REASONABLE PROCEDURES TO ASSURE COMPLI5 ANCE.—Section 706 of the Equal Credit Opportunity Act

6 (15 U.S.C. 1691e) is amended by adding at the end the

7 following new subsection:

8 ‘‘(l) REASONABLE PROCEDURES TO ASSURE COM9 PLIANCE.—No person shall be held liable for any violation

10 of subsection 701(d) if such person shows by a preponder11 ance of the evidence that at the time of the alleged viola12 tion the person maintained reasonable procedures to as13 sure compliance with the provisions of the subsection.’’.

14 SEC. 354. FAIR CREDIT REPORTING ACT AMENDMENTS.

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

16 (15 U.S.C. 1681m(a)) is amended by striking ‘‘credit or’’

17 each place such term appears.

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

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

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

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

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

23 is amended by striking ‘‘subsections (a) and (b)’’ and in24 serting ‘‘subsection (a)’’.
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1 SEC. 355. INCENTIVES FOR SELF-TESTING.

2 (a) EQUAL CREDIT OPPORTUNITY.—

3 (1) IN GENERAL.—The Equal Credit Oppor4 tunity Act (15 U.S.C. 1691 et seq.) is amended by

5 inserting after section 704 the following new section:

6 ‘‘SEC. 704A. INCENTIVES FOR SELF-TESTING AND SELF7 CORRECTION.

8 ‘‘(a) IN GENERAL.—If a creditor—

9 ‘‘(1) conducts, or authorizes an independent

10 third party to conduct, a self-test of the creditor’s

11 lending or any part of the creditor’s lending oper12 ations in order to determine the level or effectiveness

13 of compliance with this title by the creditor; and

14 ‘‘(2) has identified discriminatory practices and

15 has taken or is taking appropriate corrective actions

16 to address the discrimination,

17 any report or results of such a self-test may not be ob18 tained or used by any applicant, department, or agency

19 in any proceeding or civil action brought under this title.

20 ‘‘(b) RESULTS OF SELF-TESTING.—No provision of

21 this section shall be construed as preventing an applicant,

22 department, or agency from obtaining and using the re23 sults of any self-testing in any proceeding or civil action

24 brought under this title if—
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1 ‘‘(1) the creditor or any other entity conducted

2 such activity at the request of a department or agen3 cy;

4 ‘‘(2) the creditor or any other entity, or any

5 person acting on behalf of the creditor or other en6 tity—

7 ‘‘(A) voluntarily releases or discloses all, or

8 any part of, such results; or

9 ‘‘(B) refers to or describes such results as

10 a defense to charges of unlawful discrimination

11 against such creditor, person, or entity; or

12 ‘‘(3) the results are sought by the applicant, de13 partment, or agency by means of a discovery request

14 for the purposes of determining an appropriate pen15 alty or remedy for a violation of this title.

16 ‘‘(c) REGULATIONS.—The appropriate Federal de17 partment or agency shall prescribe regulations, after no18 tice and opportunity for comment, which determine what

19 types of ‘self-tests’ are sufficiently extensive so as to con20 stitute a determination of the level or effectiveness of a

21 creditor’s compliance with this title.’’.

22 (2) REFERRALS TO THE ATTORNEY GEN23 ERAL.—Section 706(g) of the Equal Credit Oppor24 tunity Act (15 U.S.C. 1691e(g)) is amended—
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1 (A) by striking ‘‘(g) The agencies’’ and in2 serting ‘‘(g) REFERRALS TO THE ATTORNEY

3 GENERAL.—

4 ‘‘(1) IN GENERAL.—The agencies’’; and

5 (B) by adding at the end the following new

6 paragraphs:

7 ‘‘(2) LIMITATION ON REFERRALS OF SELF8 TESTING RESULTS.—

9 ‘‘(A) IN GENERAL.—No agency shall be re10 quired to refer any report or results of a self11 test relating to any creditor to the Attorney

12 General if the creditor—

13 ‘‘(i) has already identified discrimina14 tory practices as the result of self-testing

15 instituted by the creditor to determine

16 compliance with this title; and

17 ‘‘(ii) has taken or is taking appro18 priate corrective actions to address the dis19 crimination.

20 ‘‘(3) ENFORCEMENT UNDER OTHER LAWS.—No

21 provision of this section shall be construed as limit22 ing the authority of the agency to enforce the provi23 sions of this title under any other provision of law.’’.

24 (3) REFERRALS TO HUD.—Section 706(k) of

25 the Equal Credit Opportunity Act (15 U.S.C.
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1 1691e(k)) is amended by adding at the end the fol2 lowing: ‘‘No such agency shall be required to notify

3 the Secretary of Housing and Urban Development or

4 the applicant that the agency has reason to believe

5 that a violation of this title or the Fair Housing Act

6 occurred if the reason is based on a result of self7 testing instituted by the creditor to determine com8 pliance with this title, and the creditor has already

9 identified the possible violation and has taken or is

10 taking appropriate corrective actions to address the

11 possible violation. No provisions of this section shall

12 be construed as limiting the authority of the agency

13 to enforce the provisions of this title under any other

14 provision of law.’’.

15 (4) CLERICAL AMENDMENT.—The table of sec16 tions for title VII of the Consumer Credit Protection

17 Act is amended by inserting after the item relating

18 to section 704 the following new item:

‘‘704A. Incentives for self-testing and self-correction.’’.

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

20 U.S.C. 3601 et seq.) is amended by inserting after section

21 814 the following new section:

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

23 ‘‘(a) IN GENERAL.—If any person—

24 ‘‘(1) conducts, or authorizes an independent

25 third party to conduct, a self-test of that person’s
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1 residential real estate related lending activities, or

2 any part of such activities, in order to determine the

3 level or effectiveness of compliance with this title by

4 the person; and

5 ‘‘(2) has identified discriminatory practices and

6 has taken or is taking appropriate corrective actions

7 to address the discrimination,

8 any report or results of such a self-test may not be ob9 tained or used by any aggrieved person, complainant, de10 partment, or agency in any proceeding or civil action

11 brought under this title.

12 ‘‘(b) RESULTS OF SELF-TESTING.—No provision of

13 this section shall be construed as preventing an aggrieved

14 person, complainant, department, or agency from obtain15 ing and using the results of any self-testing as described

16 in subsection (a) in any proceeding or civil action brought

17 under this title if—

18 ‘‘(1) the creditor or any other entity conducted

19 such activity at the request of a department or agen20 cy;

21 ‘‘(2) the creditor or any other entity, or any

22 person acting on behalf of the creditor or other en23 tity—

24 ‘‘(A) voluntarily releases or discloses all, or

25 any part of, such results; or
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1 ‘‘(B) refers to or describes such results as

2 a defense to charges of unlawful discrimination

3 against such creditor, person, or entity; or

4 ‘‘(3) the results are sought by the aggrieved

5 person, complainant, department, or agency by

6 means of a discovery request for the purposes of de7 termining an appropriate penalty or remedy for a

8 violation of this title.

9 ‘‘(c) REGULATIONS.—The appropriate Federal de10 partment or agency shall prescribe regulations, after no11 tice and opportunity for comment, which determine what

12 types of ‘self-tests’ are sufficiently extensive so as to con13 stitute a determination of the level or effectiveness of a

14 creditor’s compliance with this title.’’.

15 SEC. 356. CREDIT SCORING SYSTEMS.

16 Section 701 of the Equal Credit Opportunity Act (15

17 U.S.C. 1691) is amended by adding at the end the follow18 ing new subsection:

19 ‘‘(f) CREDIT SCORING SYSTEM.—

20 ‘‘(1) IN GENERAL.—A creditor shall be deemed

21 to be in compliance with subsection (a) with respect

22 to any credit decision made by the creditor which is

23 based solely on the use of an empirically derived, de24 monstrably and statistically sound, credit scoring
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1 system (as defined by the Board in regulations pre2 scribed under this title) if such system—

3 ‘‘(A) does not utilize any category pro4 tected under subsection (a);

5 ‘‘(B) does not use as a factor in such sys6 tem any criterion which is so directly associated

7 with such a category as to be the functional

8 equivalent of such a category; and

9 ‘‘(C) does not use as a factor in such sys10 tem any criterion that has a disparate impact

11 on a category protected under subsection (a)

12 unless use of the criterion is justified by busi13 ness necessity and there is no less discrimina14 tory alternative available.

15 ‘‘(2) AGE AS A FACTOR.—No provision of this

16 subsection shall be construed as precluding a credi17 tor from using age as a factor in a credit scoring

18 system under paragraph (1) to the extent otherwise

19 permitted under this title.’’.

20 SEC. 357. CONSULTATION BY ATTORNEY GENERAL RE21 QUIRED IN NONREFERRAL CASES.

22 (a) EQUAL CREDIT OPPORTUNITY.—Section 706(h)

23 of the Equal Credit Opportunity Act (15 U.S.C. 1691e(h))

24 is amended by adding at the end the following new sen25 tence: ‘‘Before bringing a civil action against any creditor
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1 described in paragraph (1), (2), or (3) of section 704(a),

2 the Attorney General shall consult with the appropriate

3 agency under such paragraph.’’.

4 (b) FAIR HOUSING ACT.—Section 814(a) of the Fair

5 Housing Act (42 U.S.C. 3614(a)) is amended by adding

6 at the end the following new sentence: ‘‘Before bringing

7 a civil action under the preceding sentence against any

8 person or group of persons described in paragraph (1),

9 (2), or (3) of section 704(a) of the Equal Credit Oppor10 tunity Act with respect to a violation of 805(a) of this

11 title, the Attorney General shall consult with the appro12 priate agency under such paragraph.’’.

13 SEC. 358. EFFECTIVE DATE.

14 (a) IN GENERAL.—Except with respect to the re15 quirements of subsection (b), this Act shall take effect at

16 the end of the 270-day period beginning on the date of

17 the enactment of this Act.

18 (b) IMPLEMENTING REGULATIONS.—The Board of

19 Governors of the Federal Reserve System shall prescribe

20 regulations to implement this Act and such regulations

21 shall be published in final form before the end of the 180-

22 day period beginning on the date of the enactment of this

23 Act.
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1 Subtitle E—Consumer Leasing Act

2 Amendments

3 SEC. 361. SHORT TITLE.

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

5 Act Amendments of 1995’’.

6 SEC. 362. CONGRESSIONAL FINDINGS AND DECLARATION

7 OF PURPOSE.

8 (a) FINDINGS.—The Congress finds the following:

9 (1) Competition among the various financial in10 stitutions and other firms engaged in the business of

11 consumer leasing is greatest when there is informed

12 use of leasing. The informed use of leasing results

13 from an awareness of the cost of leasing by consum14 ers.

15 (2) There has been a continued trend toward

16 leasing automobiles and other durable goods for

17 consumer use as an alternative to installment credit

18 sales and that leasing product advances have oc19 curred such that lessors have been unable to provide

20 consistent industry-wide disclosures to fully account

21 for the competitive progress that has occurred.

22 (b) PURPOSES.—

23 (1) It is the purpose of this subtitle to assure

24 a simple, meaningful disclosure of leasing terms so

25 that the consumer will be able to compare more
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1 readily the various leasing terms available to the

2 consumer and avoid the uninformed use of leasing,

3 and to protect the consumer against inaccurate and

4 unfair leasing practices.

5 (2) To provide for adequate cost disclosures

6 that reflect the marketplace without impairing com7 petition and the development of new leasing prod8 ucts, it is the purpose of this subtitle to provide the

9 Board with the regulatory authority to assure a sim10 plified, meaningful definition and disclosure of the

11 terms of certain leases of personal property for per12 sonal, family, or household purposes so as to enable

13 the lessee to compare more readily the various lease

14 terms available to the lessee, enable comparison of

15 lease terms with credit terms where appropriate and

16 to assure meaningful and accurate disclosures of

17 lease terms in advertisements.

18 SEC. 363. REGULATIONS.

19 (a) IN GENERAL.—Chapter 5 of title I of the

20 Consumer Credit Protection Act (15 U.S.C. 1601 et seq.)

21 is amended by adding at the end the following new section:

22 ‘‘SEC. 187. REGULATIONS.

23 ‘‘(a) REGULATIONS AUTHORIZED.—

24 ‘‘(1) IN GENERAL.—The Board shall write reg25 ulations or staff commentary, if appropriate, to up-
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1 date and clarify the requirements and definitions for

2 lease disclosures, contracts, and any other specific

3 issues related to consumer leasing which would carry

4 out the purposes of this chapter, to prevent any cir5 cumvention of the chapter, and to facilitate compli6 ance with the requirements of the chapter.

7 ‘‘(2) CLASSIFICATIONS, ADJUSTMENTS.—The

8 regulations prescribed under paragraph (1) may con9 tain classifications and differentiations and may pro10 vide for adjustments and exceptions for any class of

11 transaction.

12 ‘‘(b) MODEL DISCLOSURES.—The Board shall pub13 lish model disclosure forms and clauses to facilitate com14 pliance with the disclosure requirements and to aid the

15 consumer in understanding the transaction. In designing

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

17 processing or similar automated equipment. Use of the

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

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

20 compliance with the disclosure requirements.

21 ‘‘(c) EFFECTIVE DATES.—

22 ‘‘(1) IN GENERAL.—Any regulation of the

23 Board, or any amendment or interpretation of any

24 regulation of the Board, that requires a disclosure

25 different from the disclosures previously required
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1 shall have an effective date of the October 1 that

2 follows the date of promulgation by at least 6

3 months.

4 ‘‘(2) LONGER PERIOD.—The Board may, in the

5 Board’s discretion, lengthen the period of time re6 ferred to in paragraph (1) to permit lessors to ad7 just their forms to accommodate new requirements.

8 ‘‘(3) SHORTER PERIOD.—The Board may also

9 shorten the period of time referred to in paragraph

10 (1) if the Board makes a specific finding that such

11 action is necessary to comply with the findings of a

12 court or to prevent unfair or deceptive practices.

13 ‘‘(4) COMPLIANCE BEFORE EFFECTIVE DATE.—

14 Lessors may comply with any newly promulgated

15 disclosure requirement before the effective date of

16 such requirement.’’.

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

18 for chapter 5 of title I of the Consumer Credit Protection

19 Act (15 U.S.C. 1601 et seq.) is amended by inserting after

20 the item relating to section 186 the following new item:

‘‘187. Regulations.’’.

21 SEC. 364. CONSUMER LEASE ADVERTISING.

22 Section 184 of the Consumer Credit Protection Act

23 (15 U.S.C. 1667c) is amended to read as follows:
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1 ‘‘SEC. 184. CONSUMER LEASE ADVERTISING.

2 ‘‘(a) IN GENERAL.—If an advertisement for a

3 consumer lease states the amount of any payment or

4 states that any or no initial payment is required, the ad5 vertisement must also clearly and conspicuously state the

6 following terms, as applicable:

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

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

9 or before consummation of the lease or delivery of

10 the property, whichever is later.

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

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

13 scheduled payments.

14 ‘‘(5) For a lease in which the consumer’s liabil15 ity at the end of the lease term is based on the an16 ticipated residual value of the property, that an

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

18 term.

19 ‘‘(b) ADVERTISING MEDIUM NOT LIABLE.—Any

20 owner or personnel of any medium in which an advertise21 ment appears or through which it is disseminated shall

22 not be liable under this section.’’.

23 SEC. 365. STATUTORY PENALTIES.

24 Section 185(a) of the Consumer Credit Protection

25 Act (15 U.S.C. 1667d(a)) is amended by adding at the

26 end the following new sentence: ‘‘Notwithstanding the pre-
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1 ceding sentence, a creditor shall only have liability deter2 mined under section 130(a)(2) for failing to comply with

3 the requirements of paragraph (2), (8), (9), or (10) of sec4 tion 182 or for failing to comply with disclosure require5 ments under State law for any term which the Board has

6 determined to be substantially the same in meaning under

7 section 186 as any of the terms referred to in section

8 182.’’.

9 TITLE IV—STREAMLINING

10 GOVERNMENT REGULATIONS

11 Subtitle A—Regulatory Approval

12 Issues

13 SEC. 401. STREAMLINED NONBANKING ACQUISITIONS BY

14 WELL CAPITALIZED AND WELL MANAGED

15 BANKING ORGANIZATIONS.

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

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

18 is amended—

19 (1) in paragraph (1)(A), by striking ‘‘No’’ and

20 inserting ‘‘Except as provided in paragraph (3), no’’;

21 and

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

23 paragraphs:

24 ‘‘(3) NO NOTICE REQUIRED FOR CERTAIN

25 TRANSACTIONS.—No notice under paragraph (1) or
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1 subsections (c)(8) or (a)(2)(B) is required for a pro2 posal by a bank holding company to engage in any

3 activity or acquire the shares or assets of any com4 pany if the proposal qualifies under paragraph (4).

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

6 proposal qualifies under this paragraph if all of the

7 following criteria are met:

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

9 and immediately after the proposed trans10 action—

11 ‘‘(i) the acquiring bank holding com12 pany is well capitalized;

13 ‘‘(ii) the lead insured depository insti14 tution of such holding company is well cap15 italized;

16 ‘‘(iii) well capitalized insured deposi17 tory institutions control at least 80 percent

18 of the aggregate total risk-weighted assets

19 of insured depository institutions controlled

20 by such holding company; and

21 ‘‘(iv) no insured depository institution

22 controlled by such holding company is

23 undercapitalized.

24 ‘‘(B) MANAGERIAL CRITERIA.—
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1 ‘‘(i) WELL MANAGED.—At the time of

2 the transaction, the acquiring bank holding

3 company, its lead insured depository insti4 tution, and insured depository institutions

5 that control at least 90 percent of the ag6 gregate total risk-weighted assets of in7 sured depository institutions controlled by

8 such holding company are well managed.

9 ‘‘(ii) LIMITATION ON POORLY MAN10 AGED INSTITUTIONS.—Except with respect

11 to insured depository institutions described

12 in paragraph (6), no insured depository in13 stitution controlled by the acquiring bank

14 holding company has received 1 of the 2

15 lowest composite ratings at the later of the

16 institution’s most recent examination or

17 subsequent review.

18 ‘‘(C) ACTIVITIES PERMISSIBLE.—Following

19 consummation of the proposal, the bank holding

20 company engages directly or through a subsidi21 ary solely in—

22 ‘‘(i) activities that are permissible

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

24 the Board by regulation or order there25 under, subject to all of the restrictions,
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1 terms and conditions of such subsection

2 and such regulation or order; and

3 ‘‘(ii) such other activities as are other4 wise permissible under this section, subject

5 to the restrictions, terms and conditions,

6 including any prior notice or approval re7 quirements, provided in this section.

8 ‘‘(D) SIZE OF ACQUISITION.—

9 ‘‘(i) ASSET SIZE.—The book value of

10 the total assets to be acquired does not ex11 ceed 10 percent of the consolidated total

12 risk-weighted assets of the acquiring bank

13 holding company; and

14 ‘‘(ii) CONSIDERATION.—The gross

15 consideration to be paid for the securities

16 or assets does not exceed 15 percent of the

17 consolidated Tier 1 capital of the acquiring

18 bank holding company.

19 ‘‘(E) NOTICE NOT OTHERWISE WAR20 RANTED.—For proposals described in para21 graph (5)(B), the Board has not, before the

22 conclusion of the period provided in paragraph

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

24 a notice under paragraph (1) is required.
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1 ‘‘(F) COMPLIANCE CRITERION.—During

2 the 12-month period ending on the date on

3 which the bank holding company proposes to

4 commence an activity or acquisition, no admin5 istrative enforcement action has been com6 menced, and no cease and desist order has been

7 issued pursuant to section 8 of the Federal De8 posit Insurance Act, against the bank holding

9 company or any depository institution subsidi10 ary of the holding company and no such en11 forcement action, order, or other administrative

12 enforcement proceeding is pending as of such

13 date.

14 ‘‘(5) NOTIFICATION.—

15 ‘‘(A) COMMENCEMENT OF ACTIVITIES AP16 PROVED BY RULE.—A bank holding company

17 that qualifies under paragraph (4) and that

18 proposes to engage de novo, directly or through

19 a subsidiary, in any activity that is permissible

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

21 Board by regulation, may commence that activ22 ity without prior notice to the Board and must

23 provide written notification to the Board no

24 later than ten business days after commencing

25 the activity.
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1 ‘‘(B) ACTIVITIES PERMITTED BY ORDER

2 AND ACQUISITIONS.—

3 ‘‘(i) IN GENERAL.—At least 12 busi4 ness days before commencing any activity

5 pursuant to paragraph (3) (other than an

6 activity described in subparagraph (A)) or

7 acquiring shares or assets of any company

8 pursuant to paragraph (3), the bank hold9 ing company shall provide written notice of

10 the proposal to the Board, unless the

11 Board determines that no notice or a

12 shorter notice period is appropriate.

13 ‘‘(ii) DESCRIPTION OF ACTIVITIES

14 AND TERMS.—A notification under this

15 subparagraph shall include a description of

16 the proposed activities and the terms of

17 any proposed acquisition.

18 ‘‘(6) RECENTLY ACQUIRED INSTITUTIONS.—In19 sured depository institutions which have been ac20 quired by a bank holding company during the 12-

21 month period preceding the date on which the com22 pany proposes to commence an activity or acquisi23 tion pursuant to paragraph (3) may be excluded for

24 purposes of paragraph (4)(B)(ii) if—
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1 ‘‘(A) the bank holding company has devel2 oped a plan for the institution to restore the

3 capital and management of the institution

4 which is acceptable to the appropriate Federal

5 banking agency; and

6 ‘‘(B) all such insured depository institu7 tions represent, in the aggregate, less than 10

8 percent of the aggregate total risk-weighted as9 sets of all insured depository institutions con10 trolled by the bank holding company.

11 ‘‘(7) ADJUSTMENT OF PERCENTAGES.—The

12 Board may, by regulation, adjust the percentages

13 and the manner in which the percentages of insured

14 depository institutions are calculated under para15 graph (4)(B)(i), (4)(D), or paragraph (6)(B) if the

16 Board determines that any such adjustment is con17 sistent with safety and soundness and the purposes

18 of this Act.’’.

19 (b) DEFINITIONS.—Section 2(o) of the Bank Holding

20 Company Act of 1956 (12 U.S.C. 1841(o)) is amended—

21 (1) by striking paragraph (1) and inserting the

22 following new paragraph:

23 ‘‘(1) CAPITAL TERMS.—

24 ‘‘(A) INSURED DEPOSITORY INSTITU25 TIONS.—With respect to insured depository in-
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1 stitutions, the terms ‘well-capitalized’, ‘ade2 quately capitalized’, and ‘uncapitalized’ have

3 the meaning given those terms in section 38(b)

4 of the Federal Deposit Insurance Act.

5 ‘‘(B) BANK HOLDING COMPANY.—

6 ‘‘(i) ADEQUATELY CAPITALIZED.—

7 The term ‘adequately capitalized’ means a

8 level of capitalization which meets or ex9 ceeds all applicable Federal regulatory cap10 ital standards.

11 ‘‘(ii) WELL CAPITALIZED.—A bank

12 holding company is ‘well capitalized’ if it

13 meets the required capital levels for well

14 capitalized bank holding companies estab15 lished by the Board.

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

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

18 meaning given those terms in the capital guide19 lines or regulations established by the Board for

20 bank holding companies.’’; and

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

22 paragraphs:

23 ‘‘(8) LEAD INSURED DEPOSITORY INSTITU24 TIONS.—
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1 ‘‘(A) IN GENERAL.—The term ‘lead in2 sured depository institution’ means the largest

3 insured depository institution controlled by the

4 bank holding company at any time, based on

5 a comparison of the average total risk-weighted

6 assets controlled by each insured depository in7 stitution during the previous 12-month period.

8 ‘‘(B) BRANCH OR AGENCY.—For purposes

9 of this paragraph and section 4(j)(4), the term

10 ‘insured depository institution’ shall also in11 clude any branch or agency operated in the

12 United States by a foreign bank.

13 ‘‘(9) WELL MANAGED.—The term ‘well man14 aged’ means—

15 ‘‘(A) in the case of any company or deposi16 tory institution which receives examinations, the

17 achievement of—

18 ‘‘(i) a CAMEL composite rating of 1

19 or 2 (or an equivalent rating under an

20 equivalent rating system) in connection

21 with the most recent examination or subse22 quent review of such company or institu23 tion; and

24 ‘‘(ii) at least a satisfactory rating for

25 management, if such rating is given; or
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1 ‘‘(B) in the case of a company or deposi2 tory institution that has not received an exam3 ination rating, the existence and use of manage4 rial resources which the Board determines are

5 satisfactory.’’.

6 SEC. 402. STREAMLINED BANK ACQUISITIONS BY WELL

7 CAPITALIZED AND WELL MANAGED BANKING

8 ORGANIZATIONS.

9 Section 3 of the Bank Holding Company Act (12

10 U.S.C. 1842) is amended by adding at the end the follow11 ing new subsection:

12 ‘‘(h) NO APPROVAL REQUIRED FOR CERTAIN TRANS13 ACTIONS.—

14 ‘‘(1) IN GENERAL.—Notwithstanding paragraph

15 (3) or (5) of subsection (a) and subject to para16 graphs (5) and (6), an acquisition of shares by a

17 registered bank holding company, or a merger or

18 consolidation between registered bank holding com19 panies, shall be deemed approved at the conclusion

20 of the period specified in subparagraph (G) if all of

21 the following conditions have been met:

22 ‘‘(A) FINANCIAL AND MANAGERIAL CRI23 TERIA.—

24 ‘‘(i) WELL CAPITALIZED BANK HOLD25 ING COMPANY.—Both at the time of and
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1 immediately after the proposed trans2 action, the acquiring bank holding com3 pany is well capitalized.

4 ‘‘(ii) WELL CAPITALIZED LEAD IN5 SURED DEPOSITORY INSTITUTION.—Both

6 at the time of and immediately after the

7 proposed transaction, the lead insured de8 pository institution of the acquiring bank

9 holding company is well capitalized.

10 ‘‘(iii) CAPITAL OF OTHER INSURED

11 DEPOSITORY INSTITUTIONS.—At the time

12 of the transaction, well capitalized insured

13 depository institutions control at least 80

14 percent of the aggregate total risk-weight15 ed assets of insured depository institutions

16 controlled by the acquiring bank holding

17 company.

18 ‘‘(iv) NO UNDERCAPITALIZED IN19 SURED DEPOSITORY INSTITUTIONS.—At

20 the time of the transaction, no insured de21 pository institution controlled by the ac22 quiring bank holding company is under23 capitalized.

24 ‘‘(v) WELL MANAGED.—
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1 ‘‘(I) IN GENERAL.—At the time

2 of the transaction, the acquiring bank

3 holding company, its lead insured de4 pository institution, and insured de5 pository institutions that control at

6 least 90 percent of the aggregate total

7 risk-weighted assets of insured deposi8 tory institutions controlled by such

9 holding company are well managed.

10 ‘‘(II) NO POORLY MANAGED IN11 STITUTIONS.—Except with respect to

12 insured depository institutions de13 scribed in paragraph (2), no insured

14 depository institution controlled by

15 the acquiring bank holding company

16 has received 1 of the 2 lowest compos17 ite ratings at the later of the institu18 tion’s most recent examination or sub19 sequent review.

20 ‘‘(B) NO UNSATISFACTORY CRA RAT21 INGS.—Except with respect to insured deposi22 tory institutions described in paragraph (3), no

23 insured depository institution controlled by the

24 acquiring bank holding company has received a

25 ‘needs to improve’ or ‘substantial noncompli-
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1 ance’ composite rating as a result of the institu2 tion’s most recent examination under the Com3 munity Reinvestment Act of 1977.

4 ‘‘(C) COMPETITIVE CRITERIA.—Con5 summation of the proposal complies with guide6 lines established by the Board by regulation,

7 after consultation with the Attorney General,

8 that identify proposals that are not likely to

9 have a significantly adverse effect on competi10 tion in any relevant market.

11 ‘‘(D) SIZE OF ACQUISITION.—

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

13 the total assets to be acquired does not ex14 ceed 10 percent of the consolidated total

15 risk weighted assets of the acquiring bank

16 holding company.

17 ‘‘(ii) CONSIDERATION.—The gross

18 consideration to be paid for the securities

19 or assets does not exceed 15 percent of the

20 consolidated Tier 1 capital of the acquiring

21 bank holding company.

22 ‘‘(E) INTERSTATE ACQUISITIONS.—Board

23 approval of the transaction is not prohibited

24 under subsection (d).
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1 ‘‘(F) COMPLIANCE CRITERION.—During

2 the 12-month period ending on the date of the

3 transaction, no administrative enforcement ac4 tion has been commenced, and no cease and de5 sist order has been issued pursuant to section

6 8 of the Federal Deposit Insurance Act, against

7 any bank holding company involved in the

8 transaction or any depository institution sub9 sidiary of any such holding company and no

10 such enforcement action, order, or other admin11 istrative enforcement proceeding is pending as

12 of such date.

13 ‘‘(G) OTHER CONSIDERATIONS.—Board

14 approval of the transaction is not prohibited

15 under subsection (c)(3).

16 ‘‘(H) NOTIFICATION.—The acquiring bank

17 holding company provides written notice of the

18 transaction, including a description of the terms

19 of the transaction, to the Board and the Attor20 ney General, simultaneously, at least 15 busi21 ness days (or such shorter period as permitted

22 by the Board) before the transaction is con23 summated.

24 ‘‘(I) NO BOARD DISAPPROVAL.—Before the

25 end of the 15-day period (or the shorter period)
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1 referred to in subparagraph (H), the Board has

2 not required an application under subsection

3 (a).

4 ‘‘(2) SPECIAL RULE RELATING TO THE RE5 QUIREMENT FOR WELL MANAGED INSTITUTIONS.—

6 Insured depository institutions which have been ac7 quired by a bank holding company during the 12-

8 month period preceding the date of the transaction

9 may be excluded for purposes of paragraph

10 (1)(A)(v)(II) if—

11 ‘‘(A) the bank holding company has devel12 oped a plan for the institution to restore the

13 capital and management of the institution

14 which is acceptable to the appropriate Federal

15 banking agency; and

16 ‘‘(B) all such insured depository institu17 tions represent, in the aggregate, less than 10

18 percent of the aggregate total risk-weighted as19 sets of all insured depository institutions con20 trolled by the holding company.

21 ‘‘(3) SPECIAL RULE RELATING TO THE RE22 QUIREMENT FOR COMMUNITY INVESTMENT.—In23 sured depository institutions acquired during the 12-

24 month period preceding the date of the transaction

25 may be excluded for purposes of paragraph (1)(B)
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1 if the bank holding company has developed a plan to

2 restore the performance of the institution to at least

3 a ‘satisfactory’ rating under the Community Rein4 vestment Act of 1977 which is acceptable to the ap5 propriate Federal banking agency.

6 ‘‘(4) ADJUSTMENT OF PERCENTAGES.—The

7 Board may by regulation adjust the percentages and

8 the manner in which the percentages of insured de9 pository institutions are calculated under subpara10 graph (A)(v)(I) or (D) of paragraph (1) or para11 graph (2)(B) if the Board determines that such ad12 justment is consistent with safety and soundness

13 and the purposes of this Act.

14 ‘‘(5) ADVICE OF ATTORNEY GENERAL.—The

15 Attorney General shall advise the Board during the

16 period referred to in paragraph (1)(H) in writing if

17 any competitive concerns exist with respect to the

18 transaction.

19 ‘‘(6) WAIVER OF POSTAPPROVAL WAITING PE20 RIOD.—If the Attorney General advises the Board

21 that no competitive concerns exist with respect to

22 the transaction, the provisions of section 11(b) relat23 ing to a postapproval waiting shall not apply with

24 respect to such transaction.’’.
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1 SEC. 403. ELIMINATE FILING AND APPROVAL REQUIRE2 MENTS FOR INSURED DEPOSITORY INSTITU3 TIONS ALREADY CONTROLLED BY THE SAME

4 HOLDING COMPANY.

5 (a) BANK MERGER ACT.—Section 18(c) of the Fed6 eral Deposit Insurance Act (12 U.S.C. 1828(c)) is amend7 ed by adding at the end the following new 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, if applicable;

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

18 institution complies with all applicable provi19 sions of section 44, if any, as if the merger,

20 consolidation, or acquisition were approved

21 under this subsection;

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; and
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1 ‘‘(D) after receiving such notice, the agen2 cy does not require the institution to submit an

3 application with respect to such transaction and

4 so notifies the institution.’’.

5 (b) NATIONAL BANK CONSOLIDATION AND MERGER

6 ACT.—

7 (1) CONSOLIDATIONS.—Section 2 of the Na8 tional Bank Consolidation and Merger Act (12

9 U.S.C. 215) is amended—

10 (A) in subsection (a), by adding at the end

11 the following new sentence:

12 ‘‘No approval by the Comptroller of the Currency is re13 quired under this subsection for a transaction which in14 volves the consolidation of banks that, at the time of the

15 consolidation, are all subsidiaries (as defined in section 3

16 of the Federal Deposit Insurance Act) of the same com17 pany.’’; and

18 (B) in subsection (b)—

19 (i) by striking ‘‘, and thereafter the

20 consolidation shall be approved by the

21 Comptroller’’; and

22 (ii) by striking ‘‘when such consolida23 tion is approved by the Comptroller’’.
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1 (2) MERGERS.—Section 3 of the National Bank

2 Consolidation and Merger Act (12 U.S.C. 215a) is

3 amended—

4 (A) in subsection (a), by adding at the end

5 the following new sentence:

6 ‘‘No approval by the Comptroller of the Currency is re7 quired under this subsection for a transaction which in8 volves the merger of banks that, at the time of the merger,

9 are all subsidiaries (as defined in section 3 of the Federal

10 Deposit Insurance Act) of the same company.’’; and

11 (B) in subsection (b)—

12 (i) by striking ‘‘, and thereafter the

13 merger shall be approved by the Comptrol14 ler’’; and

15 (ii) by striking ‘‘when such merger

16 shall be approved by the Comptroller’’.

17 SEC. 404. ELIMINATE REDUNDANT APPROVAL REQUIRE18 MENT FOR OAKAR TRANSACTIONS.

19 (a) IN GENERAL.—Section 5(d)(3) of the Federal

20 Deposit Insurance Act (12 U.S.C. 1815(d)(3)) is amend21 ed—

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

23 prior written approval of the responsible agency

24 under section 18(c)(2)’’;

25 (2) in subparagraph (E)—
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1 (A) by striking clause (iv) and inserting

2 the following new clause:

3 ‘‘(iv) A transaction shall not be au4 thorized under this paragraph unless the

5 acquiring, assuming, or resulting deposi6 tory institution will meet all applicable cap7 ital requirements upon consummation of

8 the transaction.’’;

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

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

11 (as amended by subparagraph (A) of this para12 graph) as clauses (i) and (ii), respectively; and

13 (3) by striking subparagraph (G) and redesig14 nating the subsequent subparagraphs accordingly.

15 (b) TECHNICAL AND CONFORMING AMENDMENT.—

16 Section 5156A(b)(1) of the Revised Statutes of the United

17 States (12 U.S.C. 215c(b)(1)) is amended by striking

18 ‘‘section 5(d)(3) of the Federal Deposit Insurance Act or’’.

19 (c) CLERICAL AMENDMENT.—The heading for sec20 tion 5(d)(3)(E) of the Federal Deposit Insurance Act (12

21 U.S.C. 1815(d)(3)(E)) is amended by striking ‘‘FOR AP22 PROVAL, GENERALLY’’.
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1 SEC. 405. ELIMINATION OF DUPLICATIVE REQUIREMENTS

2 IMPOSED UPON BANK HOLDING COMPANIES

3 AND OTHER REGULATORY RELIEF UNDER

4 THE HOME OWNERS’ LOAN ACT.

5 (a) EXEMPTION FOR BANK HOLDING COMPANIES.—

6 Section 10 of the Home Owners’ Loan Act (12 U.S.C.

7 1467a) is amended by adding at the end the following new

8 subsection:

9 ‘‘(t) EXEMPTION FOR BANK HOLDING COMPA10 NIES.—This section shall not apply to a bank holding com11 pany that is subject to the Bank Holding Company Act

12 of 1956 or any company controlled by such bank holding

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

14 (b) DEFINITION OF SAVINGS AND LOAN HOLDING

15 COMPANY.—Section 10(a)(1)(D) of the Home Owners’

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

17 as follows:

18 ‘‘(D) SAVINGS AND LOAN HOLDING COM19 PANY.—

20 ‘‘(i) IN GENERAL.—Except as pro21 vided in clause (ii), the term ‘savings and

22 loan holding company’ means any company

23 which directly or indirectly controls a sav24 ings association or controls any other com25 pany which is a savings and loan holding

26 company.
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1 ‘‘(ii) EXCEPTION FOR BANK HOLDING

2 COMPANY.—The term ‘savings and loan

3 holding company’ does not include any

4 company which is registered under, and

5 subject to, the provisions of the Bank

6 Holding Company Act of 1956, or any

7 company directly or indirectly controlled by

8 such company.’’.

9 (c) AMENDMENTS TO THE BANK HOLDING COMPANY

10 ACT OF 1956.—Section 4(i) of the Bank Holding Com11 pany Act of 1956 (12 U.S.C. 1843(i)) is amended by add12 ing at the end the following new paragraphs:

13 ‘‘(4) SOLICITATION OF VIEWS.—

14 ‘‘(A) NOTICE TO DIRECTOR.—Upon receiv15 ing any application or notice by a bank holding

16 company to acquire directly or indirectly a sav17 ings association under subsection (c)(8), the

18 Board shall solicit the Director’s comments and

19 recommendations with respect to such acquisi20 tion.

21 ‘‘(B) COMMENT PERIOD.—The comments

22 and views of the Director under subparagraph

23 (A) with respect to any acquisition subject to

24 such subparagraph shall be transmitted to the

25 Board within 30 days of the receipt by the Di-
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1 rector of the notice relating to such acquisition

2 (or such shorter period as the Board may speci3 fy if the Board advises the Director that an

4 emergency exists which requires expeditious ac5 tion).

6 ‘‘(5) EXAMINATION.—

7 ‘‘(A) SCOPE.—The Board shall consult

8 with the Director, as appropriate, in establish9 ing the scope of an examination by the Board

10 of a bank holding company that controls di11 rectly or indirectly a savings association.

12 ‘‘(B) ACCESS TO INSPECTION REPORTS.—

13 Upon the request of the Director, the Board

14 shall furnish the Director with a copy of any in15 spection report, additional examination mate16 rials, or supervisory information relating to any

17 bank holding company which directly or indi18 rectly controls a savings association.

19 ‘‘(6) COORDINATION OF ENFORCEMENT EF20 FORTS.—The Board and the Director shall cooper21 ate in any enforcement action against any bank

22 holding company which controls a savings associa23 tion, if the relevant conduct involves such associa24 tion.
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1 ‘‘(7) DIRECTOR DEFINED.—For purposes of

2 this section, the term ‘Director’ means the Director

3 of the Office of Thrift Supervision.’’.

4 (d) ALTERNATIVE TEST.—Section 10(m) of the

5 Home Owners’ Loan Act (12 U.S.C. 1467a(m)) is amend6 ed—

7 (1) in paragraph (1), by striking ‘‘(2) and (7)’’

8 and inserting ‘‘(2), (7), and (8)’’; and

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

10 paragraph:

11 ‘‘(8) ALTERNATIVE TEST.—Any savings asso12 ciation which meets the requirements set forth in

13 section 7701(a)(19)(C) of the Internal Revenue

14 Code of 1986 shall be deemed to be a qualified thrift

15 lender and any qualified thrift lender shall be

16 deemed to meet the requirements of such section.’’.

17 SEC. 406. ELIMINATE REQUIREMENT THAT APPROVAL BE

18 OBTAINED FOR DIVESTITURES.

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

20 1956 (12 U.S.C. 1841(g)) is amended—

21 (1) by striking paragraph (3);

22 (2) by inserting ‘‘and’’ after the semicolon at

23 the end of paragraph (1); and

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

25 (2) and inserting a period.
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1 SEC. 407. 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 ‘‘(i) No branch’’ and inserting

7 ‘‘(i) RELOCATION.—

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 or

14 subsection (b) or (c), the consent and approval of

15 the Comptroller of the Currency shall not be re16 quired for a national bank to establish and operate,

17 or to retain and operate, a branch or seasonal agen18 cy if—

19 ‘‘(A) the bank is well capitalized (as de20 fined in section 38 of the Federal Deposit In21 surance Act and regulations prescribed by the

22 Comptroller of the Currency under such sec23 tion);

24 ‘‘(B) the bank 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 bank did not receive a ‘needs to

4 improve’ or ‘substantial noncompliance’ compos5 ite rating at its most recent examination under

6 the Community Reinvestment Act of 1977; and

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

8 otherwise authorized to grant approval under

9 this section to such bank to establish and oper10 ate, or to retain and operate, a branch or sea11 sonal agency at the proposed location.

12 ‘‘(3) CERTAIN BRANCHES DEEMED TO HAVE

13 APPROVED APPLICATIONS.—A branch or seasonal

14 agency established by a national bank under para15 graph (2) shall be deemed to have been established

16 and operated pursuant to an application approved

17 under this section.’’.

18 (b) STATE MEMBER BANK BRANCH APPLICA19 TIONS.—The 3d undesignated paragraph of section 9 of

20 the Federal Reserve Act (12 U.S.C. 321) is amended by

21 adding at the end the following: ‘‘Notwithstanding the pre22 ceding 2 sentences, the approval of the Board shall not

23 be required for a State member bank to establish and op24 erate a branch or seasonal agency if—
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1 ‘‘(A) the State member bank is well-capitalized

2 (as defined in section 38 of the Federal Deposit In3 surance Act and regulations prescribed by the Board

4 under such section);

5 ‘‘(B) the State member bank received a com6 posite CAMEL rating of ‘1’ or ‘2’ under the Uni7 form Financial Institutions Rating System (or an

8 equivalent rating under a comparable rating sys9 tem);

10 ‘‘(C) the State member bank did not receive a

11 ‘needs to improve’ or ‘substantial noncompliance’

12 composite rating at its most recent examination

13 under the Community Reinvestment Act of 1977;

14 and

15 ‘‘(D) the Board is otherwise authorized to grant

16 approval under this section to such State member

17 bank to establish and operate a branch or seasonal

18 agency at the proposed location.

19 A branch or seasonal agency established by a State mem20 ber bank under the previous sentence shall be deemed to

21 have been established and operated pursuant to an appli22 cation approved under this section.’’.

23 (c) STATE NONMEMBER BANK BRANCH APPLICA24 TIONS.—Section 18(d) of the Federal Deposit Insurance
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1 Act (12 U.S.C. 1828(d)) is amended by adding at the end

2 the following new paragraphs:

3 ‘‘(5) APPLICATION EXEMPTION FOR CERTAIN

4 BANKS.—Notwithstanding paragraph (1), the con5 sent of the Corporation shall not be required for a

6 State nonmember insured bank to establish and op7 erate any domestic branch if—

8 ‘‘(A) the bank is well-capitalized (as de9 fined in section 38 and regulations prescribed

10 by the Corporation under such section);

11 ‘‘(B) the bank received a composite

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

13 Financial Institutions Rating System (or an

14 equivalent rating under a comparable rating

15 system) as of its most recent examination;

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

17 improve’ or ‘substantial noncompliance’ compos18 ite rating as result of the bank’s most recent

19 examination under the Community Reinvest20 ment Act of 1977; and

21 ‘‘(D) the Corporation is otherwise author22 ized to give consent under this section to such

23 bank to establish and operate a domestic

24 branch at the proposed location.
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1 ‘‘(6) APPROVAL GRANTED.—A branch estab2 lished by a State member bank under paragraph (5)

3 shall be deemed to have been established and oper4 ated pursuant to an application approved under this

5 section.’’.

6 SEC. 408. ELIMINATE BRANCH APPLICATIONS AND RE7 QUIREMENTS FOR ATMs AND SIMILAR FA8 CILITIES.

9 (a) DEFINITION OF BRANCH UNDER NATIONAL

10 BANK ACT.—Section 5155(j) of the Revised Statutes (12

11 U.S.C. 36(j)) is amended—

12 (1) by striking ‘‘(j) The term’’ and inserting

13 ‘‘(j) BRANCH.—

14 ‘‘(1) IN GENERAL.—The term’’; and

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

16 paragraph:

17 ‘‘(2) CERTAIN PROPRIETARY ATMS AND RE18 MOTE SERVICING UNITS.—The term ‘branch’ does

19 not include any automated teller machine or remote

20 service unit which is owned and operated by a depos21 itory institution—

22 ‘‘(A) primarily for the benefit of the insti23 tution and the affiliates of the institution; and

24 ‘‘(B) which could operate a branch at the

25 location of such machine or unit.’’.
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1 (b) DEFINITION OF BRANCH UNDER FEDERAL DE2 POSIT INSURANCE ACT.—Section 3(o) of the Federal De3 posit Insurance Act (12 U.S.C. 1813(o)) is amended—

4 (1) by striking ‘‘(o) The term’’ and inserting

5 ‘‘(o) DEFINITIONS RELATING TO BRANCHES.—

6 ‘‘(1) DOMESTIC BRANCH.—

7 ‘‘(A) IN GENERAL.—The term’’; and

8 (2) by striking ‘‘lent; and the term’’ and insert9 ing ‘‘lent.

10 ‘‘(B) CERTAIN PROPRIETARY ATMS AND

11 REMOTE SERVICING UNITS.—The term ‘domes12 tic branch’ does not include any automated tell13 er machine or remote service unit which is

14 owned and operated by a depository institu15 tion—

16 ‘‘(i) primarily for the benefit of the in17 stitution and the affiliates of the institu18 tion; and

19 ‘‘(ii) which could operate a branch at

20 the location of such machine or unit.

21 ‘‘(2) FOREIGN BRANCH.—The term’’.
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1 SEC. 409. ELIMINATE REQUIREMENT FOR APPROVAL OF IN2 VESTMENTS IN BANK PREMISES FOR WELL

3 CAPITALIZED AND WELL MANAGED BANKS.

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

5 371d) is amended by inserting before the period in that

6 section the following: ‘‘or, in the case of a bank which re7 ceived a composite CAMEL rating of ‘1’ or ‘2’ under the

8 Uniform Financial Institutions Rating System (or an

9 equivalent rating under a comparable rating system) as

10 of its most recent examination and, both before and imme11 diately following the investment or loan, is well capitalized

12 (as defined under section 38 of the Federal Deposit Insur13 ance Act), the amount which is equal to 150 percent of

14 the capital stock and surplus of such bank’’.

15 SEC. 410. ELIMINATE UNNECESSARY FILING FOR OFFICER

16 AND DIRECTOR APPOINTMENTS.

17 Section 32(d) of the Federal Deposit Insurance Act

18 (12 U.S.C. 1831i(d)) is amended to read as follows:

19 ‘‘(d) ADDITIONAL INFORMATION.—

20 ‘‘(1) IN GENERAL.—Any notice submitted to an

21 appropriate Federal banking agency with respect to

22 an individual by any insured depository institution

23 or depository institution holding company pursuant

24 to subsection (a) shall include—

25 ‘‘(A) the information described in section

26 7(j)(6)(A) about the individual; and
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1 ‘‘(B) such other information as the agency

2 may prescribe by regulation.

3 ‘‘(2) WAIVER.—An appropriate Federal bank4 ing agency may waive the requirement of this section

5 by regulation or on a case-by-case basis consistent

6 with safety and soundness.’’.

7 SEC. 411. 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 SEC. 412. DISPOSITION OF FORECLOSED ASSETS.

13 Section 4(c)(2) of the Bank Holding Company Act

14 of 1956 (12 U.S.C. 1843(c)(2)) is amended—

15 (1) by striking ‘‘for not more than one year at

16 a time’’; and

17 (2) by striking ‘‘but no such extensions shall ex18 tend beyond a date five years’’ and inserting ‘‘and,

19 in the case of a bank holding company which has

20 not disposed of such shares within 5 years of the

21 date such shares were acquired, the Board may,

22 upon the application of such company, grant addi23 tional exemptions if, in the Board’s judgment, such

24 extension would not be detrimental to the public in25 terest and either the bank holding company has
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1 made a good faith attempt to dispose of such shares

2 during such 5-year period or the disposal of such

3 shares during such 5-year period would have been

4 detrimental to the company, but the aggregate dura5 tion of such extensions shall not extend 10 years’’.

6 SEC. 413. INCREASE IN CERTAIN CREDIT UNION LOAN

7 CEILINGS.

8 Section 107(5)(A) of the Federal Credit Union Act

9 (12 U.S.C. 1757(5)(A)) is amended—

10 (1) in clause (iv), by striking ‘‘$10,000’’ and in11 serting ‘‘$50,000’’; and

12 (2) in clause (v), by striking ‘‘$10,000’’ and in13 serting ‘‘$50,000’’.

14 Subtitle B—Streamlining of Gov15 ernment Regulations; Mis16 cellaneous Provisions

17 SEC. 421. ELIMINATE THE PER-BRANCH CAPITAL REQUIRE18 MENT FOR NATIONAL BANKS AND STATE

19 MEMBER BANKS.

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

21 is amended—

22 (1) by striking subsection (h); and

23 (2) by redesignating subsections (i) (as amend24 ed by section 407(a) of this title), (j) (as amended
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•HR 3567 IH

1 by section 408(a) of this title), (k), and (l) as sub2 sections (h), (i), (j), and (k), respectively.

3 SEC. 422. BRANCH CLOSURES.

4 (a) IN GENERAL.—Section 42 of the Federal Deposit

5 Insurance Act (12 U.S.C. 1831r–1) is amended by adding

6 at the end the following new subsection:

7 ‘‘(e) SCOPE OF APPLICATION.—

8 ‘‘(1) IN GENERAL.—This section shall not apply

9 with respect to—

10 ‘‘(A) an automated teller machine;

11 ‘‘(B) a branch which—

12 ‘‘(i) has been acquired through merg13 er, consolidation, purchase, assumption, or

14 other method; and

15 ‘‘(ii) is located—

16 ‘‘(I) within 2.5 miles of another

17 branch of the acquiring institution; or

18 ‘‘(II) within a neighborhood cur19 rently being served by another branch

20 of the acquiring institution,

21 if such other branch of the acquiring institution

22 is expected to continue to provide banking serv23 ices to substantially all of the customers cur24 rently served by the branch acquired;
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1 ‘‘(C) a branch which is closing and reopen2 ing at a location which is—

3 ‘‘(i) within 2.5 miles of the location of

4 the branch being closed; or

5 ‘‘(ii) within the same neighborhood as

6 the branch being closed,

7 if the branch at the new location is expected to

8 continue to provide banking services to substan9 tially all of the customers served by the branch

10 at the former location;

11 ‘‘(D) a branch that is closed in connection

12 with—

13 ‘‘(i) an emergency acquisition under—

14 ‘‘(I) section 11(n); or

15 ‘‘(II) subsections (f) or (k) of

16 section 13; or

17 ‘‘(ii) any assistance provided by the

18 Corporation under section 13(c); and

19 ‘‘(E) any other branch closure whose ex20 emption from the notice requirements of this

21 section would not produce a result inconsistent

22 with the purposes of this section.

23 ‘‘(2) REGULATIONS.—The appropriate Federal

24 banking agency shall, by regulation, determine the
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1 circumstances under which any exemption under

2 paragraph(1)(E) may be granted.’’.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply as if such amendment had been

5 included in section 42 of the Federal Deposit Insurance

6 Act as of the date of the enactment of the Federal Deposit

7 Insurance Corporation Improvement Act of 1991.

8 SEC. 423. AMENDMENTS TO THE DEPOSITORY INSTITU9 TIONS MANAGEMENT INTERLOCKS ACT.

10 (a) DUAL SERVICE IN SAME AREA, TOWN, OR VIL11 LAGE.—Section 203 of the Depository Institution Man12 agement Interlocks Act (12 U.S.C. 3202) is amended—

13 (1) by inserting ‘‘(a) PROHIBITIONS.—’’ before

14 ‘‘A management official’’; and

15 (2) by adding after subsection (a) the following

16 new subsection:

17 ‘‘(b) SMALL MARKET SHARE EXEMPTION.—

18 ‘‘(1) IN GENERAL.—This section shall not be

19 construed as prohibiting a management official of a

20 depository institution or depository holding company

21 from serving as a management official of another de22 pository institution or depository holding company

23 not affiliated with such institution or holding com24 pany if the depository institutions or depository

25 holding companies with which the management offi-
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1 cial serves hold, together with all the affiliates of

2 such institutions or holding companies, in the aggre3 gate no more that 20 percent of the deposits in each

4 relevant geographic banking market where offices of

5 the depository institutions or depository holding

6 companies or their affiliates are located.

7 ‘‘(2) RELEVANT GEOGRAPHIC BANKING MARKET

8 DEFINED.—For purposes of paragraph (1), the term

9 ‘relevant geographic banking market’ means—

10 ‘‘(A) the area defined by the boundaries

11 identified by the Board of Governors of the

12 Federal Reserve System;

13 ‘‘(B) if the Board has not defined such

14 boundaries, the area defined by the boundaries

15 of the Ranally Metropolitan Area in which the

16 office of the depository institution or the depos17 itory institution holding company is located;

18 and

19 ‘‘(C) if the office of such institution or

20 company is not located within a Ranally Metro21 politan Area, the area defined by the county (or

22 an equivalent area of general local government)

23 in which such office is located.’’.

24 (b) DUAL SERVICE AMONG LARGER ORGANIZA25 TIONS.—Section 204 of the Depository Institution Man-
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1 agement Interlocks Act (12 U.S.C. 3203) is amended to

2 read as follows:

3 ‘‘SEC. 204. DUAL SERVICE AMONG LARGER ORGANIZA4 TIONS.

5 ‘‘(a) IN GENERAL.—If a depository institution, de6 pository institution holding company, or depository insti7 tution affiliate of any such institution or company has

8 total assets exceeding $2,500,000,000, a management offi9 cial of such institution, company, or affiliate may not serve

10 as a management official of any other depository institu11 tion, depository institution holding company, or depository

12 institution affiliate of any such institution or company

13 which—

14 ‘‘(1) is not an affiliate of the institution, com15 pany, or affiliate of which such person is a manage16 ment official; and

17 ‘‘(2) has total assets exceeding $1,500,000,000.

18 ‘‘(b) CPI ADJUSTMENTS.—The dollar amounts in

19 this section shall be adjusted annually after December 31,

20 1994, by the annual percentage increase in the Consumer

21 Price Index for Urban Wage Earners and Clerical Work22 ers published by the Bureau of Labor Statistics.’’.

23 (c) EXTENSION OF GRANDFATHER EXEMPTION.—

24 Section 206 of the Depository Institution Management

25 Interlocks Act (12 U.S.C. 3205) is amended—
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1 (1) in subsection (a), by striking ‘‘for a period

2 of, subject to the requirements of subsection (c), 20

3 years after the date of enactment of this title’’;

4 (2) in subsection (b), by striking the 2d sen5 tence; and

6 (3) by striking subsection (c).

7 (d) RULES OR REGULATIONS.—Section 209 of the

8 Depository Institution Management Interlocks Act (12

9 U.S.C. 3207) is amended—

10 (1) by striking ‘‘(a) IN GENERAL.—Rules’’ and

11 inserting ‘‘Rules’’;

12 (2) by inserting ‘‘, including rules or regula13 tions which permit service by a management official

14 which would otherwise be prohibited by section 203

15 or section 204,’’ after ‘‘title’’; and

16 (3) by striking subsections (b) and (c).

17 SEC. 424. ACCELERATION OF REPAYMENT TO TREASURY.

18 The Appraisal Subcommittee of the Financial Institu19 tions Examination Council shall repay to the Secretary of

20 the Treasury the funds specified in section 1108 of Finan21 cial Institutions Reform, Recovery, and Enforcement Act

22 of 1989 by not later than September 30, 1998, and the

23 Secretary shall deposit such funds in the general fund of

24 the Treasury.
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1 SEC. 425. ELIMINATE UNNECESSARY AND DUPLICATIVE

2 RECORDKEEPING AND REPORTING REQUIRE3 MENTS RELATING TO LOANS TO EXECUTIVE

4 OFFICERS AND PERMIT PARTICIPATION IN

5 EMPLOYEE BENEFIT PLANS.

6 (a) AMENDMENTS TO SECTION 22(h) OF THE FED7 ERAL RESERVE ACT.—

8 (1) EMPLOYEE BENEFIT PLANS.—Section

9 22(h)(2) of the Federal Reserve Act (12 U.S.C.

10 375b(2)) is amended—

11 (A) by redesignating subparagraphs (A),

12 (B), and (C) as clauses (i), (ii), and (iii), re13 spectively, and moving the left margins of such

14 clauses 2 ems to the right;

15 (B) by striking ‘‘(2) PREFERENTIAL

16 TERMS PROHIBITED.—A member bank’’ and in17 serting ‘‘(2) PREFERENTIAL TERMS PROHIB18 ITED.—

19 ‘‘(A) IN GENERAL.—A member bank’’; and

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

21 subparagraph:

22 ‘‘(B) EXCEPTION.—No provision of this

23 paragraph shall be construed as prohibiting ex24 tensions of credit that constitute a benefit or

25 compensation program that is widely available

26 to and used by employees of the member bank,
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1 including employees who are not executive offi2 cers of the bank.’’.

3 (2) EXCEPTION FOR EXTENSIONS OF CREDIT

4 TO EXECUTIVE OFFICERS AND DIRECTORS OF

5 NONBANK AFFILIATES.—Section 22(h)(8)(B) of the

6 Federal Reserve Act (12 U.S.C. 375b(8)(B)) is

7 amended to read as follows:

8 ‘‘(B) EXCEPTION.—The Board may, by

9 regulation, make exceptions to subparagraph

10 (A) for an executive officer or director of a sub11 sidiary of a company that controls the member

12 bank if—

13 ‘‘(i) the executive officer or director

14 does not have authority to participate, and

15 does not participate, in major policymaking

16 functions of the member bank; and

17 ‘‘(ii) the assets of such subsidiary do

18 not exceed 10 percent of the consolidated

19 assets of a company that controls the

20 member bank and such subsidiary (and is

21 not controlled by any other company).’’.

22 (3) RECORDKEEPING REQUIREMENTS.—Section

23 22(h)(10) of the Federal Reserve Act (12 U.S.C.

24 375b(10)) is amended by adding at the end the fol25 lowing: ‘‘The Board shall specify by regulation the
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1 recordkeeping required of member banks to ensure

2 compliance with this section.’’.

3 (b) REPORTING REQUIREMENTS.—

4 (1) UNNECESSARY REPORTS.—Section 22(g) of

5 the Federal Reserve Act (12 U.S.C. 375a) is amend6 ed—

7 (A) by striking paragraphs (6) and (9);

8 and

9 (B) by redesignating paragraphs (7), (8),

10 and (10) as paragraphs (8), (9), and (10), re11 spectively.

12 (2) UNNECESSARY REPORTS.—Section 7 of the

13 Federal Deposit Insurance Act (12 U.S.C. 1817) is

14 amended by striking subsection (k).

15 (3) UNNECESSARY REPORTS REGARDING LOANS

16 FROM CORRESPONDENT BANKS.—Section 106(b)(2)

17 of the Bank Holding Company Act Amendments of

18 1970 (12 U.S.C. 1972(2)) is amended—

19 (A) by striking subparagraph (G); and

20 (B) by redesignating subparagraphs (H)

21 and (I) as subparagraphs (G) and (H), respec22 tively.

23 (c) AMENDMENTS RELATING TO LOANS TO EXECU24 TIVE OFFICERS.—Section 22(g) of the Federal Reserve
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1 Act (12 U.S.C. 375a) (as amended by subsection (a) of

2 this section) is amended—

3 (1) in paragraph (1)(D), by striking ‘‘of any

4 one of the three categories respectively referred to in

5 paragraphs (2), (3), and (4)’’ and inserting ‘‘of any

6 category referred to in paragraph (2), (3), (4), (5),

7 or (6)’’;

8 (2) by redesignating paragraphs (4) and (5) as

9 paragraphs (6) and (7), respectively;

10 (3) by inserting after paragraph (3) the follow11 ing new paragraph:

12 ‘‘(4) HOME EQUITY LINES OF CREDIT.—A

13 member bank may make a revolving open-end exten14 sion of credit to any executive officer of the bank if

15 the credit—

16 ‘‘(A) does not exceed $100,000; and

17 ‘‘(B) is secured by a dwelling that is owned

18 by such officer and used by the officer as a res19 idence.

20 ‘‘(5) LOANS SECURED BY MARKETABLE AS21 SETS.—A member bank may extend credit to any

22 executive officer of the bank if the credit is secured

23 by readily marketable assets of a value not exceeding

24 such amount as the Board may establish by regula25 tion.’’; and
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1 (4) in paragraph (7) (as so redesignated by

2 paragraph (2) of this subsection) by striking ‘‘(4)’’

3 each place such term appears and inserting ‘‘(6)’’.

4 SEC. 426. EXPANDED REGULATORY DISCRETION FOR

5 SMALL BANK EXAMINATIONS.

6 (a) SMALL BANK SIZE DISCRETION.—Section 10(d)

7 of the Federal Deposit Insurance Act (12 U.S.C. 1820(d))

8 is amended—

9 (1) by redesignating paragraph (9) as para10 graph (10);

11 (2) by redesignating the 2d of the 2 paragraphs

12 designated as paragraph (8) as paragraph (9); and

13 (3) in paragraph (9) (as so redesignated), by

14 striking ‘‘$175,000,000’’ and inserting

15 ‘‘$250,000,000’’.

16 (b) INFLATION ADJUSTMENT.—Section 10(d) of the

17 Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is

18 amended by inserting after paragraph (10) (as so redesig19 nated in subsection (a)(1) of this section) the following

20 new paragraph:

21 ‘‘(11) ANNUAL CPI ADJUSTMENT.—The dollar

22 amount in this section shall be adjusted annually

23 after December 31, 1994, by the annual percentage

24 increase in the Consumer Price Index for Urban
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1 Wage Earners and Clerical Workers published by

2 the Bureau of Labor Statistics.’’.

3 (c) COORDINATED FEDERAL AND STATE EXAMINA4 TIONS.—The Federal banking agencies (as defined in sec5 tion 3 of the Federal Deposit Insurance Act) shall submit

6 semiannual reports to the Congress on the progress made

7 by such agencies in implementing the requirements of sec8 tion 10(d)(6) of the Federal Deposit Insurance Act until

9 such agencies submit a final report that—

10 (1) the examination system provided for in such

11 section is in place; and

12 (2) such system provides for full coordination of

13 examinations of State depository institutions with

14 State bank supervisors.

15 SEC. 427. COST REIMBURSEMENT.

16 Section 1115 of the Right to Financial Privacy Act

17 (12 U.S.C. 3415) is amended by inserting ‘‘(including cor18 porate customers)’’ after ‘‘pertaining to a customer’’.

19 SEC. 428. IDENTIFICATION OF FOREIGN NONBANK FINAN20 CIAL INSTITUTION CUSTOMERS.

21 (a) IN GENERAL.—Section 5327(a)(1) of title 31,

22 United States Code, is amended to read as follows:

23 ‘‘(1) is a financial institution (other than a for24 eign bank (as defined in section 101(b) of the Inter-
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1 national Banking Act of 1978)) which is a foreign

2 person; and’’.

3 (b) TECHNICAL AND CONFORMING AMENDMENT.—

4 The heading for section 5327 of title 31, United States

5 Code, is amended by inserting ‘‘FOREIGN NONBANK’’

6 after ‘‘OF’’.

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

8 for chapter 53 of title 31, United States Code, is amended

9 by striking the item relating to section 5327 and inserting

10 the following new item:

‘‘5327. Identification of foreign nonbank financial institutions.’’.

11 SEC. 429. PAPERWORK REDUCTION REVIEW.

12 (a) IN GENERAL.—Not later than 180 days after the

13 date of enactment of this Act, each appropriate Federal

14 banking agency and the National Credit Union Adminis15 tration, in consultation with insured depository institu16 tions, insured credit unions, and other interested parties,

17 shall—

18 (1) review the extent to which current regula19 tions require insured depository institutions and in20 sured credit unions to produce unnecessary internal

21 written policies; and

22 (2) eliminate such requirements, where appro23 priate.

24 (b) DEFINITIONS.—For purposes of this section, the fol25 lowing definitions shall apply:
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1 (1) INSURED DEPOSITORY INSTITUTION; AP2 PROPRIATE FEDERAL BANKING AGENCY.—The

3 terms ‘‘insured depository institution’’ and ‘‘appro4 priate Federal banking agency’’ have the meanings

5 given to such terms in section 3 of the Federal De6 posit Insurance Act.

7 (2) INSURED CREDIT UNION.—The term ‘‘in8 sured credit union’’ has the meaning given to such

9 term in section 101(7) of the Federal Credit Union

10 Act.

11 SEC. 430. DAILY CONFIRMATIONS FOR HOLD-IN-CUSTODY

12 REPURCHASE TRANSACTIONS.

13 (a) IN GENERAL.—Before the end of the 1-year pe14 riod beginning on the date of the enactment of this Act,

15 the Secretary of the Treasury shall revise the regulation

16 under section 15C of the Securities Exchange Act of 1934

17 relating to the obligations of financial institutions and of

18 brokers and dealer registered under such Act holding cus19 tody of securities subject to a repurchase agreement to

20 confirm, daily and in writing, the securities that are sub21 ject to such repurchase agreement.

22 (b) REQUIREMENTS FOR REVISION.—The revision re23 quired under subsection (a) shall permit the counterparty

24 to such agreement to waive in writing the right to obtain

25 such daily written confirmation if the counterparty has re-
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1 ceived a clear and conspicuous disclosure before entering

2 into any side agreement, in a form prescribed by the Sec3 retary, that adequately informs the counterparty of the

4 benefits of receiving such daily written confirmations.

5 SEC. 431. REQUIRED REGULATORY REVIEW OF REGULA6 TIONS.

7 (a) IN GENERAL.—Not less frequently than once

8 every 10 years, the Financial Institutions Examination

9 Council (hereafter in this section referred to as the ‘‘Coun10 cil’’) and each appropriate Federal banking agency (as de11 fined in section 3(q) of the Federal Deposit Insurance

12 Act) represented on the Council shall conduct a review of

13 all regulations prescribed by the Council or by any such

14 agency, respectively, in order to identify outdated or other15 wise unnecessary regulatory requirements imposed upon

16 insured depository institutions.

17 (b) PROCESS.—In conducting the review under sub18 section (a), the Council or the appropriate Federal bank19 ing agency shall—

20 (1) categorize the regulations by type (such as

21 consumer regulations, safety and soundness regula22 tions, or such other designations as determined by

23 the Council); and

24 (2) at regular intervals, provide notice and so25 licit public comment on a particular category or cat-
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1 egories of regulations, requesting commentators to

2 identify areas of the regulations that are outdated,

3 unnecessary, or unduly burdensome.

4 (c) COMPLETE REVIEW.—The Council or the appro5 priate Federal banking agency shall ensure that the notice

6 and comment period described in subsection (b)(2) is con7 ducted with respect to all regulations described in sub8 section (a) not less frequently than once every 10 years.

9 (d) REGULATORY RESPONSE.—The Council or the

10 appropriate Federal banking agency shall—

11 (1) publish in the Federal Register a summary

12 of the comments received under this section, identi13 fying significant issues raised and providing com14 ment on such issues; and

15 (2) eliminate unnecessary regulations to the ex16 tent that such action is appropriate.

17 (e) REPORT TO CONGRESS.—Not later than 30 days

18 after carrying out subsection (d)(1), the Council shall pro19 vide to the Congress a report, which shall include—

20 (1) a summary of any significant issues raised

21 by public comments received by the Council and the

22 appropriate Federal banking agencies under this sec23 tion and the relative merits of such issues; and

24 (2) an analysis of whether the appropriate Fed25 eral banking agency involved is able to address the
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1 regulatory burdens associated with such issues by

2 regulation, or whether such burdens must be ad3 dressed by legislative action.

4 SEC. 432. COUNTRY RISK REQUIREMENTS.

5 Subsections (a)(1) and (b) of section 905 of the

6 International Lending Supervision Act of 1983 (12 U.S.C.

7 3904) are amended by striking ‘‘shall’’ and inserting

8 ‘‘may’’.

9 SEC. 433. AUDIT COSTS.

10 (a) IN GENERAL.—

11 (1) AUDITOR ATTESTATIONS.—Section 36 of

12 the Federal Deposit Insurance At (12 U.S.C.

13 1831m) is amended—

14 (A) in subsection (a)(2)(A)(ii), by striking

15 ‘‘subsections (c) and (d)’’ and inserting ‘‘sub16 section (c)’’;

17 (B) by striking subsections (c) and (e);

18 and

19 (C) by redesignating subsections (d), (f),

20 (g), (h), (i), and (j) as subsections (c), (d), (e),

21 (f), (g), and (h), respectively.

22 (2) PUBLIC AVAILABILITY.—Section 36(a)(3) of

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

24 1831m(a)(3)) is amended by inserting at the end the

25 following new sentence: ‘‘Notwithstanding the pre-
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1 ceding sentence, the Corporation and the appro2 priate Federal banking agencies may designate cer3 tain information as privileged and confidential and

4 not available to the public.’’.

5 (b) EXEMPTION FOR WELL-CAPITALIZED AND

6 WELL-MANAGED INSURED DEPOSITORY INSTITU7 TIONS.—Section 36 of the Federal Deposit Insurance Act

8 (12 U.S.C. 1831m) (as amended by subsection (a) of this

9 section) is amended by adding at the end the following

10 new subsection:

11 ‘‘(i) EXEMPTION FOR WELL-CAPITALIZED AND

12 WELL-MANAGED INSURED DEPOSITORY INSTITU13 TIONS.—No provision of this section other than subsection

14 (c) shall apply with respect to any insured depository insti15 tution which is well-capitalized and well-managed.’’.

16 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

17 (1) Paragraph (1)(B) of section 36(e) of the

18 Federal Deposit Insurance Act (as so redesignated

19 by subsection (a)(1)(C) of this section) is amended

20 by striking ‘‘(b)(2), (c), and (d)’’ and inserting

21 ‘‘(b)(2) and (c)’’.

22 (2) Paragraph (1) of section 36(g) of the Fed23 eral Deposit Insurance Act (as so redesignated by

24 subsection (a)(1)(C) of this section) is amended by

25 striking ‘‘(d)’’ and inserting ‘‘(c)’’.
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1 SEC. 434. STANDARDS FOR DIRECTOR AND OFFICER LI2 ABILITY.

3 Section 3(u) of the Federal Deposit Insurance Act

4 (12 U.S.C. 1813(u)) is amended—

5 (1) in paragraph (1), by inserting ‘‘(other than

6 an outside director)’’ after ‘‘director’’;

7 (2) in paragraph (3), by inserting ‘‘(other than

8 an outside director)’’ after ‘‘any other person’’; and

9 (3) in paragraph (4), by inserting ‘‘or outside

10 director’’ after ‘‘or accountant)’’.

11 SEC. 435. FOREIGN BANK APPLICATIONS.

12 (a) PROVISIONS RELATING TO ESTABLISHMENT OF

13 BANK OFFICES.—Section 7(d) of the International Bank14 ing Act of 1978 (12 U.S.C. 3105(d)) is amended—

15 (1) in paragraph (2), by striking ‘‘The’’ and in16 serting ‘‘Except as provided in paragraph (6), the’’;

17 (2) in paragraph (5), by striking ‘‘Consistent

18 with the standards for approval in paragraph (2),

19 the’’ and inserting ‘‘The’’; and

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

21 paragraphs:

22 ‘‘(6) EXCEPTION.—

23 ‘‘(A) IN GENERAL.—If the Board is unable

24 to find under paragraph (2) that a foreign bank

25 is subject to comprehensive supervision or regu26 lation on a consolidated basis by the appro-
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1 priate authorities in its home country, the

2 Board may nevertheless approve an application

3 under paragraph (1) by such foreign bank if—

4 ‘‘(i) the appropriate authorities in the

5 home country of such foreign bank are

6 working to establish arrangements for the

7 consolidated supervision of such bank; and

8 ‘‘(ii) all other factors are consistent

9 with approval.

10 ‘‘(B) ADDITIONAL CONDITIONS.—The

11 Board, after requesting and considering the

12 views of the appropriate State bank supervisor

13 or the Comptroller of the Currency, as the case

14 may be, may impose such conditions or restric15 tions relating to activities or business oper16 ations of the proposed branch, agency, or com17 mercial lending company subsidiary, including

18 restrictions on sources of funding, as are con19 sidered appropriate in the public interest.

20 ‘‘(C) MODIFICATION OF CONDITIONS.—

21 Any condition or restriction imposed by the

22 Board under this subsection in connection with

23 the approval of an application may be varied or

24 withdrawn where such modification is consistent

25 with the public interest.
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1 ‘‘(7) TIME PERIOD FOR BOARD ACTION.—

2 ‘‘(A) FINAL ACTION.—The Board shall

3 take final action on any application under para4 graph (1) within 180 days of receipt of the ap5 plication, except that the Board may extend for

6 an additional 180 days the period within which

7 to take final action on such application, after

8 providing notice of, and the reasons for, the ex9 tension to the applicant foreign bank and any

10 appropriate State bank supervisor or the Comp11 troller of the Currency, as the case may be.

12 ‘‘(B) FAILURE TO SUBMIT INFORMA13 TION.—The Board may deny any application if

14 it has not received information requested from

15 the applicant foreign bank or appropriate au16 thorities in the home country in sufficient time

17 to permit the Board to evaluate such informa18 tion adequately within the time periods for final

19 action set forth in subparagraph (A).

20 ‘‘(C) WAIVER.—A foreign bank may waive

21 the applicability of subparagraph (A) with re22 spect to any such application.’’.

23 (b) PROVISION RELATING TO TERMINATION OF

24 BANK OFFICES.—Section 7(e)(1)(A) of the International
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1 Banking Act of 1978 (12 U.S.C. 3105(e)(1)(A)) is amend2 ed—

3 (1) by striking ‘‘(A)’’ and inserting ‘‘(A)(i)’’;

4 (2) by striking ‘‘; or’’ and inserting ‘‘; and’’;

5 and

6 (3) by inserting at the end the following new

7 clause:

8 ‘‘(ii) the appropriate authorities in the

9 home country are not making progress in estab10 lishing arrangements for the comprehensive su11 pervision or regulation of such foreign bank on

12 a consolidated basis; or’’.

13 (c) UNIFORM TERMINATIONS OF FOREIGN BANK OF14 FICES, AGENCIES, BRANCHES, AND SUBSIDIARIES BY THE

15 FEDERAL RESERVE SYSTEM.—

16 (1) IN GENERAL.—Section 7(e)(1) of the Inter17 national Banking Act of 1978 (12 U.S.C.

18 3105(e)(1)) is amended—

19 (A) by inserting ‘‘or the Comptroller of the

20 Currency’’ after ‘‘State bank supervisor’’;

21 (B) by inserting ‘‘or a Federal branch or

22 agency’’ after ‘‘commercial lending company

23 subsidiary’’ the 1st place such term appears;

24 and
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1 (C) in the last sentence, by inserting ‘‘or

2 a Federal branch or agency’’ after ‘‘commercial

3 lending company subsidiary’’.

4 (2) TECHNICAL AND CONFORMING AMEND5 MENT.—Section 7(e) of the International Banking

6 Act of 1978 (12 U.S.C. 3105(e)) is amended—

7 (A) by striking paragraph (5); and

8 (B) by redesignating paragraphs (6) and

9 (7) as paragraphs (5) and (6), respectively.

10 SEC. 436. DUPLICATE EXAMINATION OF FOREIGN BANKS.

11 Section 7(c)(1) of the International Banking Act of

12 1978 (12 U.S.C. 3105(c)(1)) is amended—

13 (1) by adding after clause (ii) of subparagraph

14 (B) the following new clause:

15 ‘‘(iii) AVOIDANCE OF DUPLICATION.—

16 In exercising its authority under this para17 graph, the Board shall take all reasonable

18 measures to reduce burden and avoid un19 necessary duplication of examinations.’’;

20 (2) by striking subparagraph (C) and inserting

21 the following:

22 ‘‘(C) ON-SITE EXAMINATION.—Each Fed23 eral branch or agency, and each State branch

24 or agency, of a foreign bank shall be subject to

25 on-site examination by a Federal banking agen-
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1 cy or State bank supervisor as frequently as

2 would a national bank or State bank, respec3 tively, by its appropriate Federal banking agen4 cy.’’; and

5 (3) by amending subparagraph (D) to read as

6 follows:

7 ‘‘(D) COST OF EXAMINATIONS.—The cost

8 of any examination undertaken pursuant to

9 subparagraph (A) shall be assessed against and

10 collected from the foreign bank or the foreign

11 company that controls the foreign bank, as the

12 case may be, but only to the same extent that

13 fees are collected by the Board for examination

14 of any State member insured bank.’’.

15 SEC. 437. SECOND MORTGAGES.

16 (a) IN GENERAL.—Section 103(aa)(1) of the Truth

17 in Lending Act (15 U.S.C. 1602(aa)(1)) is amended—

18 (1) by inserting ‘‘a subordinate mortgage on’’

19 after ‘‘secured by’’; and

20 (2) by striking ‘‘a residential mortgage trans21 action’’.

22 (b) EFFECT ON PENDING CASES.—Any administra23 tive enforcement proceeding or other action which—

24 (1) is pending on the date of the enactment of

25 this Act; and
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1 (2) is based on regulations in effect as of such

2 date under the Truth in Lending Act with respect

3 to high-cost residential mortgage transactions which

4 are not subordinate mortgages,

5 shall be dismissed as of such date.

6 SEC. 438. STREAMLINING FDIC APPROVAL OF NEW STATE

7 BANK POWERS.

8 (a) IN GENERAL.—Section 24(a) of the Federal De9 posit Insurance Act (12 U.S.C. 1831a(a)) is amended to

10 read as follows:

11 ‘‘(a) ACTIVITIES GENERALLY.—

12 ‘‘(1) IN GENERAL.—An insured State bank may

13 not engage as principal in any type of activity that

14 is not permissible for a national bank unless—

15 ‘‘(A) the bank has given the Corporation

16 written notice of the bank’s intention to engage

17 in such activity at least 60 days before com18 mencing to engage in the activity and within

19 such 60-day period (or within the extended pe20 riod provided under paragraph (2)) the Cor21 poration has not disapproved the activity; and

22 ‘‘(B) the State bank is, and continues to

23 be, in compliance with applicable capital stand24 ards prescribed by the appropriate Federal

25 banking agency.
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1 ‘‘(2) EXTENSION OF PERIOD.—The Corporation

2 may extend the 60-day period referred to in para3 graph (1) for issuing a notice of disapproval with re4 spect to any activity for an additional 30 days.

5 ‘‘(3) CONTENTS OF NOTICE.—Any notice sub6 mitted by a State bank under paragraph (1)(A) shall

7 contain such information as the Corporation may re8 quire.

9 ‘‘(4) BASIS FOR DISAPPROVAL.—The Corpora10 tion may disapprove an activity for a State bank

11 under this subsection unless the Corporation deter12 mines that the activity would pose no significant risk

13 to the appropriate insurance fund.’’.

14 (b) SUBSIDIARIES OF INSURED STATE BANKS.—Sec15 tion 24(d)(1) of the Federal Deposit Insurance Act (12

16 U.S.C. 1831a(d)(1)) is amended to read as follows:

17 ‘‘(1) ACTIVITIES GENERALLY.—

18 ‘‘(A) IN GENERAL.—A subsidiary of an in19 sured State bank may not engage as principal

20 in any type of activity that is not permissible

21 for a subsidiary of a national bank unless—

22 ‘‘(i) the subsidiary has given the Cor23 poration written notice of the subsidiary’s

24 intention to engage in such activity at least

25 60 days before commencing to engage in
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1 the activity and within such 60-day period

2 (or within the extended period provided

3 under paragraph (2)) the Corporation has

4 not disapproved the activity; and

5 ‘‘(ii) the bank is, and continues to be,

6 in compliance with applicable capital

7 standards prescribed by the appropriate

8 Federal banking agency.

9 ‘‘(B) EXTENSION OF PERIOD.—The Cor10 poration may extend the 60-day period referred

11 to in subparagraph (A) for issuing a notice of

12 disapproval with respect to any activity for an

13 additional 30 days.

14 ‘‘(C) CONTENTS OF NOTICE.—Any notice

15 submitted by a subsidiary of an insured State

16 bank under subparagraph (A)(i) shall contain

17 such information as the Corporation may re18 quire.

19 ‘‘(D) BASIS FOR DISAPPROVAL.—The Cor20 poration may disapprove an activity for a sub21 sidiary of an insured State bank under this

22 paragraph unless the Corporation determines

23 that the activity would pose no significant risk

24 to the appropriate insurance fund.’’.
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1 SEC. 439. REPEAL OF CALL REPORT ATTESTATION RE2 QUIREMENT.

3 Section 5211(a) of the Revised Statutes (12 U.S.C.

4 161(a)) is amended by striking the 4th sentence.

5 SEC. 440. AUTHORIZING BANK SERVICE COMPANIES TO OR6 GANIZE AS LIMITED LIABILITY PARTNER7 SHIPS.

8 (a) AMENDMENT TO SHORT TITLE.—Section 1 of the

9 Bank Service Corporation Act (12 U.S.C. 1861(a)) is

10 amended by striking subsection (a) and inserting the fol11 lowing new subsection:

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

13 ‘Bank Service Company Act’.’’;

14 (b) AMENDMENTS TO DEFINITIONS.—Section 1(b) of

15 the Bank Service Corporation Act (12 U.S.C. 1861(b)) is

16 amended—

17 (1) by striking paragraph (2) and inserting the

18 following new paragraph:

19 ‘‘(2) the term ‘bank service company’ means—

20 ‘‘(A) any corporation—

21 ‘‘(i) which is organized to perform

22 services authorized by this Act; and

23 ‘‘(ii) all of the capital stock of which

24 is owned by 1 or more insured banks; and

25 ‘‘(B) any limited liability company—
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1 ‘‘(i) which is organized to perform

2 services authorized by this Act; and

3 ‘‘(ii) all of the members of which are

4 1 or more insured banks.’’;

5 (2) in paragraph (6)—

6 (A) by striking ‘‘corporation’’ and inserting

7 ‘‘company’’; and

8 (B) by striking ‘‘and’’ after the semicolon;

9 (3) by redesignating paragraph (7) as para10 graph (8) and inserting after paragraph (6) the fol11 lowing new paragraph:

12 ‘‘(7) the term ‘limited liability company’ means

13 any company organized under the law of a State (as

14 defined in section 3 of the Federal Deposit Insur15 ance Act) which provides that a member or manager

16 of such company is not personally liable for a debt,

17 obligation, or liability of the company solely by rea18 son of being, or acting as, a member or manager of

19 such company; and’’; and

20 (4) in paragraph (8) (as so redesignated)—

21 (A) by striking ‘‘corporation’’ each place

22 such term appears and inserting ‘‘company’’;

23 and

24 (B) by striking ‘‘capital stock’’ and insert25 ing ‘‘equity’’.
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1 (c) AMENDMENTS TO SECTION 2.—Section 2 of the

2 Bank Service Corporation Act (12 U.S.C. 1862) is amend3 ed—

4 (1) by striking ‘‘corporation’’ and inserting

5 ‘‘company’’;

6 (2) by striking ‘‘corporations’’ and inserting

7 ‘‘companies’’; and

8 (3) in the heading for such section, by striking

9 ‘‘CORPORATION’’ and inserting ‘‘COMPANY’’.

10 (d) AMENDMENTS TO SECTION 3.—Section 3 of the

11 Bank Service Corporation Act (12 U.S.C. 1863) is amend12 ed—

13 (1) by striking ‘‘corporation’’ each place such

14 term appears and inserting ‘‘company’’; and

15 (2) in the heading for such section, by striking

16 ‘‘CORPORATION’’ and inserting ‘‘COMPANY’’.

17 (e) AMENDMENTS TO SECTION 4.—Section 4 of the

18 Bank Service Corporation Act (12 U.S.C. 1864) is amend19 ed—

20 (1) by striking ‘‘corporation’’ each place such

21 term appears and inserting ‘‘company’’;

22 (2) in subsection (b), by inserting ‘‘or mem23 bers’’ after ‘‘shareholders’’ each place such term ap24 pears;
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1 (3) in subsections (c) and (d), by inserting ‘‘or

2 member’’ after ‘‘shareholder’’ each place such term

3 appears;

4 (4) in subsection (e)—

5 (A) by inserting ‘‘or members’’ after ‘‘na6 tional bank and State bank shareholders’’;

7 (B) by striking ‘‘its national bank share8 holder or shareholders’’ and inserting ‘‘any

9 shareholder or member of the company which is

10 a national bank’’;

11 (C) by striking ‘‘its State bank shareholder

12 or shareholders’’ and inserting ‘‘any share13 holder or member of the company which is a

14 State bank’’;

15 (D) by striking ‘‘such State bank or

16 banks’’ and inserting ‘‘any such State bank’’;

17 and

18 (E) by inserting ‘‘or members’’ after

19 ‘‘State bank and national bank shareholders’’;

20 (5) in subsection (f), by inserting ‘‘or providing

21 insurance as principal, agent, or broker (except to

22 the extent permitted under subparagraph (A) or (E)

23 of section 4(c)(8) of the Bank Holding Company Act

24 of 1956)’’ after ‘‘or deposit taking’’; and
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1 (6) in the heading for such section, by striking

2 ‘‘CORPORATION’’ and inserting ‘‘COMPANY’’.

3 (f) AMENDMENTS TO SECTION 5.—Section 5 of the

4 Bank Service Corporation Act (12 U.S.C. 1865) is amend5 ed—

6 (1) by striking ‘‘corporation’’ each place such

7 term appears and inserting ‘‘company’’; and

8 (2) in the heading for such section, by striking

9 ‘‘CORPORATIONS’’ and inserting ‘‘COMPANIES’’.

10 (g) AMENDMENTS TO SECTION 6.—Section 6 of the

11 Bank Service Corporation Act (12 U.S.C. 1866) is amend12 ed—

13 (1) by striking ‘‘corporation’’ each place such

14 term appears and inserting ‘‘company’’;

15 (2) by inserting ‘‘or is not a member of’’ after

16 ‘‘does not own stock in’’;

17 (3) by striking ‘‘the nonstockholding institu18 tion’’ and inserting ‘‘such depository institution’’;

19 (4) by inserting ‘‘or is a member of’’ after ‘‘that

20 owns stock in’’;

21 (5) in paragraphs (1) and (2), by inserting ‘‘or

22 nonmember’’ after ‘‘nonstockholding’’; and

23 (6) in the heading for such section by inserting

24 ‘‘OR NONMEMBERS’’ after ‘‘NONSTOCKHOLDERS’’.
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1 (h) AMENDMENTS TO SECTION 7.—Section 7 of the

2 Bank Service Corporation Act (12 U.S.C. 1867) is amend3 ed—

4 (1) by striking ‘‘corporation’’ each place such

5 term appears and inserting ‘‘company’’;

6 (2) in subsection (a)—

7 (A) by inserting ‘‘or principal member’’

8 after ‘‘principal shareholder’’; and

9 (B) by inserting ‘‘or member’’ after ‘‘other

10 shareholder’’; and

11 (3) in the heading for such section, by striking

12 ‘‘CORPORATIONS’’ and inserting ‘‘COMPANIES’’.

13 SEC. 441. BANK INVESTMENTS IN EDGE ACT AND AGREE14 MENT CORPORATIONS.

15 The 10th undesignated paragraph of section 25A of

16 the Federal Reserve Act (12 U.S.C. 618) is amended by

17 striking the last sentence and inserting the following:

18 ‘‘Any national bank may invest in the stock of any cor19 poration organized under this section. The aggregate

20 amount of stock held by any national bank in all corpora21 tions engaged in business of the kind described in this sec22 tion or section 25 shall not exceed an amount equal to

23 10 percent of the capital and surplus of such bank unless

24 the Board determines that the investment of an additional

25 amount by the bank would not be unsafe or unsound and,
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1 in any case, shall not exceed an amount equal to 25 per2 cent of the capital and surplus of such bank.’’.

3 SEC. 442. REPORT ON THE RECONCILIATION OF DIF4 FERENCES BETWEEN REGULATORY AC5 COUNTING PRINCIPLES AND GENERALLY AC6 CEPTED ACCOUNTING PRINCIPLES.

7 Before the end of the 180-day period beginning on

8 the date of the enactment of this Act, each appropriate

9 Federal banking agency (as defined in section 3 of the

10 Federal Deposit Insurance Act) shall submit to the Com11 mittee on Banking and Financial Services of the House

12 of Representatives and the Committee on Banking, Hous13 ing, and Urban Affairs of the Senate a report on the ac14 tions taken and to be taken by the agency to eliminate

15 or conform inconsistent or duplicative accounting and re16 porting requirements applicable to reports or statements

17 filed with any such agency by insured depository institu18 tions, as required by section 121 of the Federal Deposit

19 Insurance Corporation Improvement Act of 1991.

20 SEC. 443. WAIVERS AUTHORIZED FOR RESIDENCY RE21 QUIREMENTS FOR NATIONAL BANK DIREC22 TORS.

23 The 1st sentence of section 5146 of the Revised Stat24 utes of the United states (12 U.S.C. 72) is amended by

25 inserting ‘‘(1) the Comptroller of the Currency may, in
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1 the Comptroller’s discretion, waive the residency require2 ments in the case of any director or a national bank to

3 whom the requirement would otherwise apply, and (2)’’

4 after ‘‘except that’’.

5 TITLE V—LENDER LIABILITY

6 SEC. 501. LENDER LIABILITY.

7 (a) PARTICIPATION IN MANAGEMENT.—

8 (1) IN GENERAL.—It is the sense of Congress

9 that a person who holds indicia of ownership pri10 marily to protect the person’s security interest in a

11 vessel or facility should not be considered to have

12 participated in management, as that term is used in

13 section 101(20) of the Comprehensive Environ14 mental Response, Compensation, and Liability Act

15 of 1980 (42 U.S.C. 9601(20)), unless the person—

16 (A) exercises decisionmaking control over

17 the borrower’s environmental compliance such

18 that the person has undertaken responsibility

19 for the hazardous substance handling or dis20 posal practices of the vessel or facility; or

21 (B) exercises control at a level comparable

22 to that of a manager of the borrower’s vessel or

23 facility such that the person has assumed or

24 manifested responsibility for the overall man25 agement of the vessel or facility encompassing
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1 day-to-day decisionmaking over either environ2 mental compliance or over the operational, as

3 opposed to financial and administrative, aspects

4 of the vessel or facility.

5 (2) OPERATIONAL ASPECTS DEFINED.—In

6 paragraph (1)(B), the term ‘‘operational aspects’’

7 includes functions such as those of a facility or plant

8 manager, operations manager, chief operating offi9 cer, or chief executive officer.

10 (b) EXCLUSIONS.—If is further the sense of Congress

11 that the term ‘‘participation in management’’ as used in

12 such section 101(20) should not include any of the follow13 ing:

14 (1) The mere capacity to influence, or ability to

15 influence, or the unexercised right to control vessel

16 or facility operations.

17 (2) Any act of a security interest holder to re18 quire another person to comply with applicable laws

19 or to respond lawfully to disposal of any hazardous

20 substance.

21 (3) Conducting an act or failing to act prior to

22 the time that a security interest is created in a ves23 sel or facility.
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1 (4) Holding a security interest in a vessel or fa2 cility or abandoning or releasing such a security in3 terest.

4 (5) Including in the terms of an extension of

5 credit, or in a contract or security agreement relat6 ing to such an extension, covenants, warranties, or

7 other terms and conditions that relate to environ8 mental compliance.

9 (6) Monitoring or enforcing the terms and con10 ditions of the extension of credit or security interest.

11 (7) Monitoring or undertaking 1 or more in12 spections of the vessel or facility.

13 (8) Under section 107(d) of the Comprehensive

14 Environmental Response, Compensation, and Liabil15 ity Act of 1980, or under the direction of an on16 scene coordinator, conducting a response action or

17 other lawful means of addressing the release or

18 threatened release of a hazardous substance in con19 nection with the vessel or facility prior to, during, or

20 upon the expiration of the term of the extension of

21 credit.

22 (9) Providing financial or other advice or coun23 seling in an effort to mitigate, prevent, or cure de24 fault or diminution in the value of the vessel or facil25 ity.
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1 (10) Restructuring, renegotiating, or otherwise

2 agreeing to alter the terms and conditions of the ex3 tension of credit or security interest or exercising

4 forbearance.

5 (11) Exercising other remedies that may be

6 available under applicable law for the breach of any

7 term or condition of the extension of credit or secu8 rity agreement.

9 (12) Holding legal or equitable title acquired by

10 a security interest holder through foreclosure or its

11 equivalent primarily to protect a security interest

12 provided that the holder undertakes to sell, re-lease,

13 or otherwise divest the property in a reasonably ex14 peditious manner on commercially reasonable terms,

15 taking into account market conditions and legal and

16 regulatory requirements.

17 (c) SECURITY INTEREST.—It is further the sense of

18 Congress that the term ‘‘security interest’’ as used in such

19 section 101(20) should include rights under a mortgage,

20 deed of trust, assignment, judgment, lien, pledge, security

21 agreement, factoring agreement, lease, or any other right

22 accruing to person to secure the repayment of money, the

23 performance of a duty, or some other obligation.

24 (d) MISCELLANEOUS.—It is further the sense of the

25 Congress that the potential Superfund liability of fidu-
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1 ciaries and the potential Resource Conservation and Re2 covery Act liability of lenders and fiduciaries should be

3 addressed by the Congress.

4 TITLE VI—ANNUAL STUDY AND

5 REPORT ON IMPACT ON

6 LENDING TO SMALL BUSI7 NESS

8 SEC. 601. ANNUAL STUDY AND REPORT.

9 Not later than 12 months after the date of the en10 actment of this Act, and annually thereafter, the Board

11 of Governors of the Federal Reserve System, the Director

12 of the Office of Thrift Supervision, the Comptroller of the

13 Currency, and the Board of Directors of the Federal De14 posit Insurance Corporation shall jointly conduct a study

15 and submit to the Congress a report on the extent to

16 which this Act and the amendments made by this Act

17 have, through reductions in regulatory burdens, resulted

18 in increased lending to small businesses.

Æ