I

103D CONGRESS

2D SESSION H. R. 4956

To create an open and competitive marketplace for financial services which

ensures the safety and soundness of the Nation’s financial system as

well as the availability of innovative financial products and services

for consumers, business, and government at the lowest possible cost,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 12, 1994

Mr. NEAL of North Carolina (for himself, Mr. MCCOLLUM, Mr. LAFALCE, Mr.

FRANK of Massachusetts, Mr. LAROCCO, Mr. ORTON, Mr. DOOLEY, Mr.

RIDGE, Mr. BAKER of Louisiana, and Mr. KING) introduced the following

bill; which was referred jointly to the Committees on Banking, Finance

and Urban Affairs and Energy and Commerce

A BILL

To create an open and competitive marketplace for financial

services which ensures the safety and soundness of the

Nation’s financial system as well as the availability of

innovative financial products and services for consumers,

business, and government at the lowest possible cost,

and for other purposes.

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

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

3 ‘‘Financial Services Competitiveness Act’’.

4 (b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents.

Sec. 2. Findings and purposes.

Sec. 3. Definitions.

Sec. 4. Establishment of a diversified financial services holding company.

Sec. 5. Compliance with change in control requirements.

Sec. 6. Adequate capitalization.

Sec. 7. Additional provisions relating to regulation of insured depository institution subsidiaries.

Sec. 8. Insider lending and tying provisions.

Sec. 9. Enforcement and examination; payment system services; oversight.

Sec. 10. Criminal and civil penalties.

Sec. 11. Technical and conforming amendments.

5 SEC. 2. FINDINGS AND PURPOSES.

6 (a) FINDINGS.—The Congress hereby finds that—

7 (1) outdated laws and regulations inhibit inno8 vation, efficiency, and competition in the financial

9 services industry to the detriment of consumers and

10 providers;

11 (2) a new legal framework for financial services

12 must be created which will accord all financial serv13 ice companies equal opportunity to serve the full

14 range of credit and financial needs in the market15 place;

16 (3) expanded product and service opportunities

17 for all components of the financial services industry

18 would strengthen individual intermediaries as well as

19 the overall financial system;
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1 (4) the rapid globalization of the financial serv2 ice marketplace and the emerging interdependence of

3 major financial markets further underscore the ne4 cessity for modernizing domestic laws to maintain

5 the competitiveness of United States financial mar6 kets; and

7 (5) the regulation of separate segments, sub8 sidiaries, and affiliates along functional lines without

9 regard to ownership or control would serve national

10 priorities better than the present system.

11 (b) PURPOSES.—The purposes of this Act are as fol12 lows:

13 (1) To promote the safety and soundness of the

14 Nation’s financial system.

15 (2) To promote the availability of financial

16 products and services to consumers, businesses,

17 charitable institutions and government in an effi18 cient and cost-effective manner.

19 (3) To promote a legal structure governing pro20 viders of financial services that permits open and

21 fair competition and affords all financial services

22 companies equal opportunity to serve the full range

23 of credit and financial needs in the marketplace.
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1 (4) To ensure that domestic financial institu2 tions and companies are able to compete effectively

3 in international financial markets.

4 (5) To encourage regulation of financial activi5 ties and companies along functional lines without re6 gard to ownership, control, or affiliation.

7 SEC. 3. DEFINITIONS.

8 For purposes of this Act, the following definitions

9 shall apply:

10 (1) AFFILIATE.—Except as provided in section

11 105(e), the term ‘‘affiliate’’ means any company

12 which controls, is controlled by, or is under common

13 control with another company.

14 (2) ADEQUATELY CAPITALIZED.—With respect

15 to an insured depository institution, the term ‘‘ade16 quately capitalized’’ has the same meaning as in sec17 tion 38(b) of the Federal Deposit Insurance Act.

18 (3) APPROPRIATE FEDERAL BANKING AGEN19 CY.—The term ‘‘appropriate Federal banking agen20 cy’’ has the same meaning as in section 3(q) of the

21 Federal Deposit Insurance Act.

22 (4) BANK HOLDING COMPANY.—The term

23 ‘‘bank holding company’’ has the same meaning as

24 in section 2(a) of the Bank Holding Company Act

25 of 1956.
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1 (5) BOARD.—The term ‘‘Board’’ means the

2 Board of Governors of the Federal Reserve System.

3 (6) COMPANY.—The term ‘‘company’’ has the

4 same meaning as in section 2(b) of the Bank Hold5 ing Company Act of 1956.

6 (7) CONTROL.—

7 (A) IN GENERAL.—Except as provided in

8 subparagraph (B) and section 7(e), the term

9 ‘‘control’’ has the same meaning as in para10 graphs (2) and (3) of section 2(a) of the Bank

11 Holding Company Act of 1956.

12 (B) EXCEPTIONS.—

13 (i) ACQUISITIONS INCIDENTAL TO

14 OTHER BUSINESS.—No company shall be

15 deemed to control or to have acquired con16 trol of any other company for purposes of

17 this title by virtue of the company’s owner18 ship of the voting securities of such other

19 company if the voting securities were—

20 (I) acquired or held in an agency,

21 trust, or other fiduciary capacity

22 (whether with or without the sole dis23 cretion to vote such securities);

24 (II) acquired or held in connec25 tion with, or incidental to, the under-
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1 writing of securities if such securities

2 are held only for such period of time

3 as will permit the sale of the securi4 ties on a reasonable basis;

5 (III) acquired or held in connec6 tion with, or incidental to, market

7 making, dealing, trading, brokerage or

8 other securities-related activities and

9 not with a view to acquiring, exercis10 ing, or transferring any control over

11 the management of policies of such

12 company; or

13 (IV) acquired in securing or col14 lecting a debt previously contracted in

15 good faith, until 2 years after the date

16 of acquisition or for such additional

17 period of time as the appropriate Fed18 eral banking agency may permit.

19 (ii) PROXY SOLICITATION.—No com20 pany formed for the sole purpose of par21 ticipating in a proxy solicitation shall be

22 deemed to control another company by vir23 tue of the company’s acquisition of voting

24 rights with respect to shares of such other
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1 company which are acquired in the course

2 of such solicitation.

3 (8) DEPOSITORY INSTITUTION HOLDING COM4 PANY.—The term ‘‘depository institution holding

5 company’’ has the same meaning as in section

6 3(w)(1) of the Federal Deposit Insurance Act.

7 (9) DIVERSIFIED FINANCIAL SERVICES HOLD8 ING COMPANY.—The term ‘‘diversified financial serv9 ices holding company’’ means a company—

10 (A) that has filed a notice with the Board

11 of such company’s intent to become a diversi12 fied financial services holding company and

13 comply with the requirements of this Act and

14 has not withdrawn such notice; and

15 (B) which is described in at least 1 of the

16 following clauses:

17 (i) The company controls an insured

18 depository institution.

19 (ii) The company has, within the pre20 ceding 12 months, filed a notice under sec21 tion 4 to acquire control of an insured de22 pository institution or a depository institu23 tion holding company and such notice has

24 not been disapproved.
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1 (iii) The company controls a company

2 which has, within the preceding 12

3 months, filed an application for deposit in4 surance under section 4 or 5 of the Fed5 eral Deposit Insurance Act which has not

6 been disapproved.

7 (10) FINANCIAL INSTITUTION.—The term ‘‘fi8 nancial institution’’ means—

9 (A) any bank (as defined in section 3(a)(1)

10 of the Federal Deposit Insurance Act), savings

11 association (as defined in section 3(b)(1) of

12 such Act), insurance company, finance com13 pany, real estate company, investment company

14 (as defined in section 3 of the Investment Com15 pany Act of 1940), or investment adviser (as

16 defined in section 202 of the Investment Advis17 ers Act of 1940);

18 (B) any broker, dealer, government securi19 ties broker, government securities dealer, mu20 nicipal securities broker, or municipal securities

21 dealer (as such terms are defined in the Securi22 ties Exchange Act of 1934); or

23 (C) any other financial services company

24 that is regulated, supervised, or examined under

25 the laws of any State.
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1 (11) INSURED DEPOSITORY INSTITUTION.—The

2 term ‘‘insured depository institution’’ has the same

3 meaning as in section 3(c)(2) of the Federal Deposit

4 Insurance Act.

5 (12) REPRESENTATIVE.—The term ‘‘represent6 ative’’ includes any agent, principal, solicitor, broker,

7 director, officer, employee, institution-affiliated party

8 (as defined in section 3 of the Federal Deposit In9 surance Act), or other representative of any com10 pany or insured depository institution or any affili11 ate of any such company or institution.

12 (13) SAVINGS AND LOAN HOLDING COMPANY.—

13 The term ‘‘savings and loan holding company’’ has

14 the same meaning as in section 10(a) of the Home

15 Owners’ Loan Act.

16 (14) SAVINGS ASSOCIATION.—The term ‘‘sav17 ings association’’ has the same meaning as in section

18 3(b) of the Federal Deposit Insurance Act.

19 (15) STATE.—The term ‘‘State’’ has the same

20 meaning as in section 3(a) of the Federal Deposit

21 Insurance Act.

22 SEC. 4. ESTABLISHMENT OF A DIVERSIFIED FINANCIAL

23 SERVICES HOLDING COMPANY.

24 (a) IN GENERAL.—No person may take any action

25 which causes any company to become a diversified finan-
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1 cial services holding company without submitting prior no2 tice to the Board in accordance with this section of such

3 person’s intention to establish a diversified financial serv4 ices holding company.

5 (b) NOTICE REQUIREMENTS AND PROCEDURES.—

6 The Board shall establish requirements and procedures for

7 the submission of the notice required under this section

8 with respect to the establishment of a diversified financial

9 services holding company.

10 (c) COMPLIANCE.—Any diversified financial services

11 holding company that fails to comply with this Act and

12 regulations prescribed under this Act shall cease to be a

13 diversified financial services holding company as of the

14 date of such failure to comply.

15 (d) REGULATIONS.—The Board shall prescribe such

16 regulations as the Board determines to be appropriate to

17 administer and carry out the purposes of this Act.

18 (e) TERMINATION OF BANK HOLDING COMPANY

19 STATUS UPON FILING AS DIVERSIFIED FINANCIAL SERV20 ICES HOLDING COMPANY.—Section 2 of the Bank Hold21 ing Company Act of 1956 (12 U.S.C. 1841) is amended

22 by adding at the end the following new subsection:

23 ‘‘(n) TREATMENT AS BANK HOLDING COMPANY.—

24 If—
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1 ‘‘(1) a bank holding company files a notice with

2 the Board of such company’s intent to become a di3 versified financial services holding company and to

4 comply with the requirements of the Financial Serv5 ices Competitiveness Act; and

6 ‘‘(2) all the banks which are controlled directly

7 or indirectly by a bank holding company are insured

8 banks (as defined in section 3(h) of the Federal De9 posit Insurance Act) as of the time of the filing of

10 such notice,

11 such company shall not be treated as a bank holding com12 pany for purposes of this Act after such filing so long as

13 such notice remains in effect.’’.

14 (f) TERMINATION OF S&L HOLDING COMPANY STA15 TUS UPON FILING AS DIVERSIFIED FINANCIAL SERVICES

16 HOLDING COMPANY.—Section 10 of the Home Owners’

17 Loan Act (12 U.S.C. 1467a) is amended by adding at the

18 end the following new subsection:

19 ‘‘(t) TREATMENT AS S&L HOLDING COMPANY.—If—

20 ‘‘(1) a savings and loan holding company files

21 a notice with the Board of Governors of the Federal

22 Reserve System of such company’s intent to become

23 a diversified financial services holding company and

24 to comply with the requirements of the Financial

25 Services Competitiveness Act; and
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1 ‘‘(2) all the savings associations which are con2 trolled directly or indirectly by a savings and loan

3 holding company are insured depository institutions

4 (as defined in section 3(c) of the Federal Deposit In5 surance Act) as of the time of the filing of such no6 tice,

7 such company shall not be treated as a savings and loan

8 holding company for purposes of this Act after such filing

9 so long as such notice remains in effect.’’.

10 (g) INAPPLICABILITY OF GLASS-STEAGALL TO DI11 VERSIFIED FINANCIAL SERVICE HOLDING COMPANIES.—

12 (1) Section 20 of the Banking Act of 1933 (12

13 U.S.C. 377) is amended by inserting after the 1st

14 undesignated paragraph the following new para15 graph:

16 ‘‘The provisions of this section shall not apply with

17 respect to the affiliation of—

18 ‘‘(A) any bank that is an affiliate of a diversi19 fied financial services holding company (as defined

20 in section 3 of the Financial Services Competitive21 ness Act), with

22 ‘‘(B) such company or any other affiliate of the

23 company.’’.
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1 (2) Section 32 of the Banking Act of 1933 (12

2 U.S.C. 78) is amended by inserting after the 1st un3 designated paragraph the following new paragraph:

4 ‘‘The provisions of this section shall not apply with

5 respect to relationships involving—

6 ‘‘(A) an affiliate of a diversified financial serv7 ices holding company (as defined in the Financial

8 Services Competitiveness Act); and

9 ‘‘(B) such company or any other affiliate of

10 such company.’’.

11 SEC. 5. COMPLIANCE WITH CHANGE IN CONTROL REQUIRE12 MENTS.

13 (a) IN GENERAL.—No diversified financial services

14 holding company, acting directly or indirectly, or through

15 or in concert with 1 or more other persons, may acquire

16 control of an insured depository institution, a depository

17 institution holding company, or another diversified finan18 cial services holding company through a purchase, assign19 ment, transfer, pledge or other disposition of voting stock

20 of any such institution or company unless the diversified

21 financial services holding company has complied with the

22 requirements of section 7(j) of the Federal Deposit Insur23 ance Act.

24 (b) APPLICABILITY OF SECTION 7(j) OF THE FED25 ERAL DEPOSIT INSURANCE ACT.—
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1 (1) IN GENERAL.—Section 7(j) of the Federal

2 Deposit Insurance Act shall apply with respect to a

3 diversified financial services holding company for

4 purposes of subsection (a) in the same manner and

5 to the same extent such section applies to any ac6 quiring party described in such section.

7 (2) TREATMENT OF ACQUIRED COMPANY.—In

8 applying section 7(j) of the Federal Deposit Insur9 ance Act for purposes of this section—

10 (A) the acquisition of a depository institu11 tion holding company or a diversified financial

12 services holding company shall be treated as the

13 acquisition of an insured depository institution;

14 and

15 (B) the appropriate Federal banking agen16 cy shall be—

17 (i) in the case of a depository institu18 tion holding company, the appropriate

19 Federal banking agency designated under

20 section 3(q) of such Act with respect to the

21 company; and

22 (ii) in the case of a diversified finan23 cial services company, the Board.
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1 SEC. 6. ADEQUATE CAPITALIZATION.

2 (a) NOTIFICATION.—If an appropriate Federal bank3 ing agency finds that an insured depository institution

4 subsidiary of a diversified financial services holding com5 pany is not adequately capitalized (as defined by such

6 agency pursuant to section 38 of the Federal Deposit In7 surance Act), the agency shall immediately provide a writ8 ten notice of such fact to the diversified financial services

9 holding company.

10 (b) BOND, GUARANTEE, DEPOSIT, OR SURPLUS CAP11 ITAL.—

12 (1) IN GENERAL.—In addition to any require13 ment of section 38 of the Federal Deposit Insurance

14 Act applicable to an undercapitalized insured deposi15 tory institution (as defined pursuant to such sec16 tion), an appropriate Federal banking agency may

17 require a diversified financial services holding com18 pany to which written notice has been provided

19 under subsection (a), with respect to an insured de20 pository institution subsidiary, to—

21 (A) provide a bond, guarantee or similar

22 undertaking, in a form prescribed by the appro23 priate Federal banking agency;

24 (B) place and maintain on deposit cash or

25 investment securities (calculated on the basis of

26 principal face amount or the fair market value,
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1 whichever is lower) in a segregated, earmarked

2 account at the insured depository institution;

3 (C) contribute to the surplus capital of the

4 insured depository institution an amount nec5 essary to adequately capitalize the insured de6 pository institution; or

7 (D) reduce the amount of total assets of

8 the institution,

9 until the insured depository institution is adequately

10 capitalized pursuant to an agreement described in

11 subsection (c) or otherwise or the diversified finan12 cial services holding company divests control of the

13 insured depository institution pursuant to subsection

14 (d).

15 (2) TREATMENT OF CONTRIBUTION.—To the

16 extent that a contribution to surplus is made pursu17 ant to paragraph (1), the contribution shall be seg18 regated from, and not treated as, capital for any

19 purpose unless and until the contribution is applied

20 as a capital contribution pursuant to this section.

21 (3) INVESTMENT SECURITIES.—For purposes of

22 this subsection, the term ‘‘investment securities’’

23 means—

24 (A) any security which may be held by a

25 national bank for the bank’s own account pur-
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1 suant to section 5136 of the Revised Statutes

2 of the United States; and

3 (B) may include such other liquid assets as

4 the appropriate Federal banking agency permits

5 under this paragraph.

6 (4) DIVIDENDS.—Upon receipt of a notice by a

7 diversified financial services holding company pursu8 ant to subsection (a) relating to an insured deposi9 tory institution controlled by such company—

10 (A) the insured depository institution may

11 not declare or pay a dividend to any share12 holder; and

13 (B) the diversified financial services hold14 ing company shall immediately return to the in15 stitution any dividend received from the institu16 tion during the 270-day period ending on the

17 date the written notice is received by the com18 pany.

19 (c) APPOINTMENT OF CONSERVATOR.—

20 (1) IN GENERAL.—If—

21 (A) a diversified financial services holding

22 company fails to comply with any of the re23 quirements of subsection (b); or

24 (B) before the end of the 45-day period be25 ginning on the date a diversified financial serv-
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1 ices holding company receives a notice pursuant

2 to subsection (a) with respect to an insured de3 pository institution controlled by such company,

4 the company has not—

5 (i) caused the institution to become

6 adequately capitalized; or

7 (ii) entered into an agreement accept8 able to the appropriate Federal banking

9 agency to cause the institution to become

10 adequately capitalized within a reasonable

11 time,

12 the appropriate Federal banking agency shall ap13 point a conservator for the insured depository insti14 tution in accordance with the provisions of section

15 11 of the Federal Deposit Insurance Act.

16 (2) SUSPENSION OF APPOINTMENT.—An appro17 priate Federal banking agency may, in the agency’s

18 discretion, suspend the appointment of a conservator

19 under paragraph (1) if—

20 (A) the diversified financial services hold21 ing company divests, or agrees to divest, control

22 of the insured depository institution in an or23 derly manner; and
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1 (B) the appropriate Federal banking agen2 cy determines that such divestiture will meet

3 the requirements of subsection (d).

4 (3) EXTENSION OF 45-DAY PERIOD.—The ap5 propriate Federal banking agency may, in the agen6 cy’s discretion and for good cause shown, extend the

7 45-day period described in paragraph (1) if the

8 agency determines that the condition of the insured

9 depository institution is not likely to weaken materi10 ally during any such extension.

11 (d) DIVESTITURE.—

12 (1) IN GENERAL.—If, before the end of the 90-

13 day period beginning on the date a diversified finan14 cial services holding company receives a notice pur15 suant to subsection (a) with respect to an insured

16 depository institution subsidiary, the holding com17 pany has not—

18 (A) caused the insured depository institu19 tion to become adequately capitalized; or

20 (B) entered into an agreement acceptable

21 to the appropriate Federal banking agency to

22 adequately capitalize the insured depository in23 stitution within a reasonable time,
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1 the appropriate Federal banking agency shall order

2 the diversified financial services holding company to

3 divest control of the institution.

4 (2) EXTENSION OF 90-DAY PERIOD.—The ap5 propriate Federal banking agency may, in the agen6 cy’s discretion and for good cause shown, extend the

7 90-day period described in paragraph (1) if the

8 agency determines that the condition of the insured

9 depository institution is not likely to weaken materi10 ally during any such extension.

11 (3) ADDITIONAL CAPITAL.—In connection with

12 any divestiture of an insured depository institution

13 pursuant to this subsection or subsection (c)(2) by

14 any diversified financial services holding company

15 and subject to subsection (e), the appropriate Fed16 eral banking agency shall order such company to

17 contribute additional capital to such institution or

18 take any other action described in subsection (b)

19 with respect to such institution to the extent nec20 essary for the institution to be adequately capitalized

21 immediately following the consummation of the di22 vestiture.

23 (4) APPOINTMENT OF CONSERVATOR.—The ap24 propriate Federal banking agency may appoint a

25 conservator for an insured depository institution in
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1 accordance with section 11 of the Federal Deposit

2 Insurance Act at any time during the 90-day period

3 described in paragraph (1) or any extension of such

4 period.

5 (e) TERMINATION OF CONSERVATORSHIP; RESCIS6 SION OF DIVESTITURE ORDER.—If, at any time after the

7 appointment of a conservator under subsection (c) or the

8 issuance of an order under subsection (d) by an appro9 priate Federal banking agency, the insured depository in10 stitution—

11 (1) for which the conservator has been ap12 pointed; or

13 (2) which is the subject of such order,

14 becomes adequately capitalized, the appropriate Federal

15 banking agency shall terminate such conservatorship or

16 rescind such order, as the case may be.

17 (f) AGGREGATE LIMIT ON REQUIRED CAPITAL INFU18 SIONS; RELATION TO OTHER LAWS.—The maximum

19 amount of liability for a diversified financial services hold20 ing company for any capital assistance pursuant to an

21 order issued under this section by an appropriate Federal

22 banking agency with respect to any particular insured de23 pository institution subsidiary shall not exceed the

24 amounts necessary for the institution to become ade25 quately capitalized.
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1 (g) JUDICIAL REVIEW.—

2 (1) IN GENERAL.—Before the end of the 10-day

3 period beginning on the date of the appointment of

4 a conservator by the appropriate Federal banking

5 agency under this section or the receipt of an order

6 issued by any such agency under subsection (d) with

7 respect to an insured depository institution subsidi8 ary of a diversified financial services holding com9 pany, the company may apply to the United States

10 district court for the judicial district in which the

11 principal office of the diversified financial services

12 holding company is located, or the United States

13 District Court for the District of Columbia, for an

14 order requiring the removal of the conservator or for

15 an injunction setting aside, limiting, or suspending

16 the enforcement, operation, or effectiveness of any

17 such order issued.

18 (2) COURT ACTION.—The court may, upon the

19 merits in any action brought under paragraph (1),

20 dismiss any such action, direct the removal of the

21 conservator, or provide any appropriate relief.

22 (h) CAPITAL OF DIVERSIFIED FINANCIAL SERVICES

23 HOLDING COMPANY.—No appropriate Federal banking

24 agency may impose by regulation, order, agreement, or
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1 any other means any requirement pertaining to the capital

2 of a diversified financial services holding company.

3 (i) TERMINATION OF AGREEMENTS.—Any agreement

4 entered into pursuant to this section between a diversified

5 financial services holding company and an appropriate

6 Federal banking agency with respect to the capital of an

7 undercapitalized insured depository institution subsidiary

8 of such company shall terminate when the institution be9 comes adequately capitalized.

10 SEC. 7. ADDITIONAL PROVISIONS RELATING TO REGULA11 TION OF INSURED DEPOSITORY INSTITUTION

12 SUBSIDIARIES.

13 (a) DIFFERENTIAL TREATMENT PROHIBITION.—

14 Notwithstanding any other Federal law or the law of any

15 State, no Federal regulatory agency and no State may

16 take any action pursuant to any law, regulation, order,

17 or other authority other than this subtitle if the effect of

18 such action would be—

19 (1) to differentiate between—

20 (A) insured depository institutions which

21 are controlled by diversified financial services

22 holding companies; and

23 (B) other insured depository institutions,
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1 in a manner which discriminates against insured de2 pository institutions described in subparagraph (A);

3 or

4 (2) to differentiate between—

5 (A) diversified financial services holding

6 companies or affiliates of such companies; and

7 (B) bank holding companies, savings and

8 loan holding companies, or affiliates of any such

9 company

10 in a manner which discriminates against diversified

11 financial services holding companies and affiliates of

12 any such company.

13 (b) RELATION TO STATE LAW.—

14 (1) IN GENERAL.—No provision of the law or

15 the constitution of any State, including any State

16 law relating to State banks, savings association, real

17 estate, securities, insurance, finance company, retail

18 or the provision of financial or other services, shall

19 prevent or impede or shall be interpreted or applied

20 by any administrative, executive or judicial authority

21 with the purpose or effect of preventing or imped22 ing—

23 (A) any insured depository institution, any

24 affiliate of any such institution, or any rep25 resentative of any such institution or affiliate
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1 from being acquired, owned, or controlled by, or

2 from being affiliated in any manner with, any

3 company which is or becomes a diversified fi4 nancial services holding company, or any affili5 ate of such company, because of—

6 (i) the types of activities engaged in,

7 directly or indirectly, by such insured de8 pository institution, any affiliate of such

9 institution, or any representative of any

10 such institution or affiliate; or

11 (ii) the types of activities engaged in,

12 directly or indirectly, by such diversified fi13 nancial services holding company, any affil14 iate of such company, or any representa15 tive of any such company or affiliate;

16 (B) any company which is or becomes a di17 versified financial services holding company,

18 any affiliate of any such company, or any rep19 resentative of any such company or affiliate

20 from acquiring, owning, or controlling, or being

21 affiliated in any way with, any insured deposi22 tory institution or any affiliate of any such in23 stitution because of—

24 (i) the types of activities engaged in,

25 directly or indirectly, by any such company
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1 or affiliate, or any representative of any

2 such company or affiliate; or

3 (ii) the types of activities engaged in,

4 directly or indirectly, by any such insured

5 depository institution, any affiliate of any

6 such institution, or any representative of

7 such institution or affiliate; or

8 (C) any insured depository institution, any

9 affiliate of any such institution, or any rep10 resentative of any such institution or affiliate

11 from—

12 (i) offering or marketing products or

13 services of any affiliated diversified finan14 cial services holding company or any affili15 ate of such company; or

16 (ii) from having the products or serv17 ices of such insured depository institution,

18 any affiliate of any such institution, or any

19 representative of any such institution or

20 affiliate offered or marketed by such diver21 sified financial services holding company,

22 an affiliate of such company, or by any

23 representative of such company or affiliate.

24 (2) RULE OF CONSTRUCTION.—No provision of

25 paragraph (1) shall be construed as superseding, al-
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1 tering, or otherwise affecting the application of the

2 laws of any State relating to the examination, super3 vision, or regulation of providers of financial services

4 or the protection of consumers, or as exempting any

5 company which is or becomes a diversified financial

6 services holding company, any affiliate of any such

7 company, or any representative of any such company

8 or affiliate, except to the extent that the intent, pur9 pose, or effect of those laws is inconsistent with this

10 subsection or with the purposes of this Act and then

11 only to the extent of such inconsistency.

12 (3) JUDICIAL DETERMINATION.—Any interested

13 party may institute an action in the United States

14 District Court for the District of Columbia or any

15 other appropriate district court of the United States,

16 including an action for declaratory judgment, as

17 may be appropriate to determine whether and to

18 what extent any provision of the constitution or law

19 of any State is superseded by any provision of this

20 subsection or to enjoin application of any such provi21 sion.

22 (c) ACCESS TO STATE COURTS.—

23 (1) IN GENERAL.—No State may, directly or in24 directly, deny an insured depository institution

25 which is not located in that State the right to main-
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1 tain or defend in a court in that State any action

2 which could be maintained or defended under similar

3 circumstances by a company which—

4 (A) is not located in that State; and

5 (B) is not an insured depository institu6 tion.

7 (2) EXCEPTION FOR CERTAIN INSTITUTIONS.—

8 Paragraph (1) shall not apply in the case of an in9 sured depository institution described in such para10 graph which establishes or maintains a domestic

11 branch (as defined in section 3(o) of the Federal De12 posit Insurance Act) in the State referred to in such

13 paragraph if the laws of such State do not permit

14 an out-of-State insured depository institution to es15 tablish a domestic branch in such State.

16 (3) APPLICABILITY OF VARIOUS CONDITIONS.—

17 If the maintenance or defense of an action in the

18 courts of a State by a company which is not located

19 in that State and is not an insured depository insti20 tution is subject to conditions which are applied in

21 a nondiscriminatory manner to fulfill legitimate

22 State objectives, the maintenance or defense of such

23 an action by an insured depository institution de24 scribed in paragraph (1) may be subject to the same

25 conditions to the extent that the conditions do not
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1 have the effect, directly or indirectly, of denying the

2 institution the opportunity to maintain or defend

3 such action.

4 (d) REPRESENTATIVES.—

5 (1) IN GENERAL.—No State may, directly or in6 directly, limit or deny the authority of any diversi7 fied financial services holding company or any affili8 ate of such company to utilize or compensate any

9 representative or other person who is located in that

10 State and is representing such company or affiliate

11 in any lawful capacity.

12 (2) EXCEPTION FOR CERTAIN LAWS APPLIED IN

13 NONDISCRIMINATORY MANNER.—Paragraph (1) shall

14 not apply with respect to any licensing, marketing,

15 compensation, or employment law or requirement of

16 a State—

17 (A) which is applied in a nondiscriminatory

18 manner to fulfill legitimate State regulatory ob19 jectives; and

20 (B) the intent, purpose, or effect of which

21 is not inconsistent with the purposes of this

22 Act.

23 (3) EXCEPTION FOR CERTAIN ACTIVITIES.—In

24 the case of any State the laws of which do not per25 mit an out-of-State insured depository institution to
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1 establish a domestic branch (as defined in section

2 3(o) of the Federal Deposit Insurance Act) in such

3 State, paragraph (1) shall not apply with respect to

4 the performance of activities in such State by any

5 representative or other person described in para6 graph (1) on behalf of an insured depository institu7 tion if the performance of such activities at any loca8 tion within a State other than the main office or any

9 branch office of such insured depository institution

10 would constitute, under any Federal law or the law

11 of the State, the establishment and operation of a

12 domestic branch in the State.

13 (e) AFFILIATE AND CONTROL DEFINED.—Notwith14 standing section 3, the following definitions shall apply for

15 purposes of this section:

16 (1) AFFILIATE.—The term ‘‘affiliate’’ means a

17 person that directly or indirectly controls or is con18 trolled by, or is under common control with another

19 person.

20 (2) CONTROL.—

21 (A) IN GENERAL.—The term ‘‘control’’

22 means the power, directly or indirectly, to direct

23 the management or policies of a person.

24 (B) PRESUMPTION.—A person shall be

25 presumed to control another person if the per-
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1 son, directly or indirectly, owns, controls, or

2 holds with power to vote 10 percent or more of

3 the voting securities of such other person.

4 SEC. 8. INSIDER LENDING AND TYING PROVISIONS.

5 (a) APPLICABILITY OF INSIDER LENDING RESTRIC6 TIONS.—A diversified financial services holding company

7 shall be treated as a bank holding company for purposes

8 of section 22(h) of the Federal Reserve Act and any regu9 lation prescribed under such section.

10 (b) TYING.—

11 (1) IN GENERAL.—Any diversified financial

12 services holding company and any subsidiary of such

13 company shall be subject to the restrictions of sec14 tion 106 of the Bank Holding Company Act Amend15 ments of 1970 in connection with any transaction

16 involving the products or services of such company

17 or subsidiary or an insured depository institution af18 filiate of such company, in the same manner such

19 section would apply if the company or subsidiary

20 was a bank and the insured depository institution

21 subsidiary was a subsidiary of the bank holding com22 pany.

23 (2) SUBSIDIARY DEFINED.—For purposes of

24 paragraph (1), the term ‘‘subsidiary’’ has the same
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1 meaning as in section 2(d) of the Bank Holding

2 Company Act of 1956.

3 SEC. 9. ENFORCEMENT AND EXAMINATION; PAYMENT SYS4 TEM SERVICES; OVERSIGHT.

5 (a) ADMINISTRATIVE ENFORCEMENT.—

6 (1) IN GENERAL.—Compliance with the require7 ments imposed under this Act and regulations pre8 scribed by any appropriate Federal banking agency

9 shall be enforced by the appropriate Federal banking

10 agency under section 8 of the Federal Deposit Insur11 ance Act.

12 (2) ADDITIONAL ENFORCEMENT POWERS.—

13 (A) VIOLATION OF THIS ACT TREATED AS

14 VIOLATION OF OTHER ACTS.—For purposes of

15 applying section 8 of the Federal Deposit Insur16 ance Act with respect to any diversified finan17 cial services holding company or any affiliate of

18 such company pursuant to paragraph (1), a vio19 lation of a requirement imposed under this Act

20 shall be deemed to be a violation of a require21 ment imposed under section 8 of the Federal

22 Deposit Insurance Act.

23 (B) ENFORCEMENT AUTHORITY UNDER

24 OTHER ACTS.—In addition to any appropriate

25 Federal banking agency’s powers under section
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1 8 of the Federal Deposit Insurance Act, each

2 such agency may exercise, for purposes of en3 forcing compliance with any requirement im4 posed under this Act, any other authority con5 ferred on such agency by any other law.

6 (b) EXAMINATION.—The appropriate Federal bank7 ing agency may examine the books, records and affairs

8 of, or require reports from, any affiliate of an insured de9 pository institution which is a subsidiary of a diversified

10 financial services holding company in order to ensure com11 pliance with the requirements of this Act.

12 (c) FEDERAL RESERVE PAYMENT SERVICES.—

13 (1) IN GENERAL.—All Federal reserve bank

14 services described in section 13 of the Federal Re15 serve Act, the 14th undesignated paragraph of sec16 tion 16 of such Act, and the Expedited Funds Avail17 ability Act shall be available to all insured depository

18 institutions, on the same terms and conditions and

19 subject to the same limitations and restrictions,

20 without regard to the identity of the insured deposi21 tory institution’s affiliates, except to the extent nec22 essary to avoid a material adverse effect on a large

23 dollar payment system.

24 (2) DEFINITION.—For purposes of this sub25 section, the term ‘‘a material adverse effect on a
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1 large dollar payment system’’ means any activity of

2 an insured depository institution which results in

3 violations of any uniformly applied payment system

4 risk-reduction policy cap or limitation established by

5 the Board of Governors of the Federal Reserve Sys6 tem which—

7 (A) occur during any period consisting of

8 5 consecutive business days; and

9 (B) exceed the median number of viola10 tions for all users of the applicable large dollar

11 payment services during that same period.

12 (3) FEDERAL RESERVE ENFORCEMENT

13 POWER.—

14 (A) ADMINISTRATIVE ENFORCEMENT.—In

15 the case of an insured depository institution

16 which has engaged in any activity that has re17 sulted in a material adverse effect on a large

18 dollar payment system, the Board of Governors

19 of the Federal Reserve System shall be treated

20 as the appropriate Federal banking agency for

21 such institution with respect to such activity for

22 purposes of subsection (a).

23 (B) EXAMINATION.—The Board of Gov24 ernors of the Federal Reserve System may ex25 amine the books, records and affairs of any in-
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1 sured depository institution which has engaged

2 in any activity that has resulted in a material

3 adverse effect on a large dollar payment system,

4 or require reports from any such institution

5 with respect to any such activity.

6 SEC. 10. CRIMINAL AND CIVIL PENALTIES.

7 (a) KNOWING AND INTENTIONAL VIOLATIONS.—

8 (1) IN GENERAL.—Whoever knowingly violates

9 or participates in a violation of—

10 (A) any provision of this Act, or any regu11 lation prescribed or order issued by an appro12 priate Federal banking agency pursuant to this

13 Act;

14 (B) being a company, violates any regula15 tion prescribed or order issued by the Board

16 under this Act; or

17 (C) any written agreement between—

18 (i) any diversified financial services

19 holding company or any affiliate of such

20 company which is not an insured deposi21 tory institution; and

22 (ii) any appropriate Federal banking

23 agency,
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1 shall be fined under title 18, United States Code, for

2 each day during which the violation continues, im3 prisoned for not more than 1 year, or both.

4 (2) VIOLATIONS WITH INTENT TO DECEIVE, DE5 FRAUD, OR PROFIT.—Whoever, with the intent to

6 deceive, defraud, or profit significantly, knowingly

7 commits a violation, or participates in a violation,

8 described in paragraph (1) shall be fined not more

9 than $1,000,000 for each day during which the vio10 lation continues, imprisoned for not more than 5

11 years, or both.

12 (b) FALSE ENTRY OR STATEMENT.—Each officer, di13 rector, employee, and agent of a diversified financial serv14 ices holding company or any affiliate of any such company

15 which is not an insured depository institution, shall be

16 subject to the same penalties for false entries in any book,

17 report, or statement of such company as are applicable

18 to officers, directors, employees and agents of member

19 banks, bank holding companies, and savings and loan

20 holding companies for false entries in any books, reports,

21 or statements of member banks, bank holding companies,

22 and savings and loan holding companies under section

23 1005 of title 18, United States Code, to the extent that

24 any such false entry refers in any material way to the af-
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1 fairs of an insured depository institution affiliate of such

2 company.

3 (c) CIVIL PENALTY.—

4 (1) FIRST TIER.—Any person who—

5 (A) violates this Act or any regulation pre6 scribed or order issued by the Board under this

7 Act; or

8 (B) violates any written agreement be9 tween such person and the Board;

10 shall forfeit and pay a civil penalty of not more than

11 $5,000 for each day during which such violation con12 tinues.

13 (2) SECOND TIER.—Notwithstanding subpara14 graph (A), if any person—

15 (A) commits any violation described in any

16 clause of subparagraph (A) or breaches any fi17 duciary duty; and

18 (B) such violation or breach—

19 (i) is part of a pattern of misconduct;

20 (ii) causes or is likely to cause more

21 than a minimal loss to a depository institu22 tion; or

23 (iii) results in pecuniary gain or other

24 benefit to such person,
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1 such person shall forfeit and pay a civil penalty of

2 not more than $25,000 for each day during which

3 such violation or breach continues.

4 (3) THIRD TIER.—Notwithstanding subpara5 graphs (A) and (B), if any person—

6 (A) knowingly commits any violation de7 scribed in subparagraph (A) or breaches any fi8 duciary duty; and

9 (B) knowingly or recklessly causes a sub10 stantial loss to a depository institution or a

11 substantial pecuniary gain or other benefit to

12 such person by reason of such violation or

13 breach,

14 such person shall forfeit and pay a civil penalty in

15 an amount not to exceed the applicable maximum

16 amount determined under paragraph (4) for each

17 day during which such violation or breach continues.

18 (4) MAXIMUM AMOUNTS OF PENALTIES FOR

19 ANY VIOLATION DESCRIBED IN SUBPARAGRAPH

20 (C).—The maximum daily amount of any civil pen21 alty which may be assessed pursuant to paragraph

22 (3) for any violation or breach described in such

23 paragraph is—
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1 (A) in the case of any person other than

2 an insured depository institution, an amount

3 not to exceed $1,000,000; and

4 (B) in the case of any insured depository

5 institution, an amount not to exceed the lesser

6 of—

7 (i) $1,000,000; or

8 (ii) 1 percent of the total assets of

9 such institution.

10 (5) ASSESSMENT.—

11 (A) WRITTEN NOTICE.—Any penalty im12 posed under paragraph (1), (2), or (3) may be

13 assessed and collected by the Board by written

14 notice.

15 (B) FINALITY OF ASSESSMENT.—If, with

16 respect to any assessment under subparagraph

17 (A), a hearing is not requested pursuant to

18 paragraph (8) within the period of time allowed

19 under such subparagraph, the assessment shall

20 constitute a final and unappealable order.

21 (6) AUTHORITY TO MODIFY OR REMIT PEN22 ALTY.—The Board may compromise, modify, or

23 remit any penalty which the Board may assess or

24 had already assessed under paragraph (1), (2), or

25 (3).
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1 (7) MITIGATING FACTORS.—In determining the

2 amount of any penalty imposed under paragraph

3 (1), (2), or (3), the Board shall take into account

4 the appropriateness of the penalty with respect to—

5 (A) the size of financial resources and good

6 faith of the person charged;

7 (B) the gravity of the violation;

8 (C) the history of previous violations; and

9 (D) such other matters as justice may re10 quire.

11 (8) HEARING.—The person against whom any

12 penalty is assessed under this paragraph shall be af13 forded an agency hearing if such person submits a

14 request for such hearing within 20 days after the is15 suance of the notice of assessment.

16 (9) COLLECTION.—

17 (A) REFERRAL.—If any person fails to pay

18 an assessment after any penalty assessed under

19 this subsection has become final, the Board

20 shall recover the amount assessed by action in

21 the appropriate United States district court.

22 (B) APPROPRIATENESS OF PENALTY NOT

23 REVIEWABLE.—In any civil action under sub24 paragraph (A), the validity and appropriateness

25 of the penalty shall not be subject to review.
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1 (10) DISBURSEMENT.—All penalties collected

2 under authority of this paragraph shall be deposited

3 into the Treasury.

4 (11) REGULATIONS.—The Board shall prescribe

5 regulations establishing such procedures as may be

6 necessary to carry out this paragraph.

7 (d) VIOLATE DEFINED.—For purposes of this sec8 tion, the term ‘‘violate’’ includes any action (alone or with

9 another or others) for or toward causing, bringing about,

10 participating in, counseling, or aiding and abetting a viola11 tion.

12 SEC. 11. TECHNICAL AND CONFORMING AMENDMENTS.

13 (a) BANK HOLDING COMPANY ACT OF 1956.—

14 (1) Section 2(a)(1) of the Bank Holding Com15 pany Act of 1956 (12 U.S.C. 1841(a)(1)) is amend16 ed by inserting ‘‘or subsection (n)’’ after ‘‘paragraph

17 (5) of this subsection’’.

18 (2) Section 2(c)(2) of the Bank Holding Com19 pany Act of 1956 (12 U.S.C. 1841(c)) is amended

20 by adding at the end the following new subpara21 graph:

22 ‘‘(K) An insured bank (as defined in sec23 tion 3(h) of the Federal Deposit Insurance Act)

24 which is not controlled by any company other

25 than a diversified financial services holding
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1 company (as defined in the Financial Services

2 Competitiveness Act).’’.

3 (3) Section 5(d) of the Bank Holding Company

4 Act of 1956 (12 U.S.C. 1844(d)) is amended by in5 serting ‘‘or the Financial Services Competitiveness

6 Act’’ after ‘‘this Act’’.

7 (b) AMENDMENT TO THE BANK HOLDING COMPANY

8 ACT AMENDMENTS OF 1970.—Section 106(b) of the Bank

9 Holding Company Act Amendments of 1970 (12 U.S.C.

10 1972) is amended—

11 (1) by adding at the end the following new

12 paragraphs:

13 ‘‘(3) EXEMPTION FOR CERTAIN TYING AR14 RANGEMENTS.—A bank shall not be prohibited from

15 providing a loan, discount, deposit, or trust service,

16 or fixing or varying the consideration of any of the

17 foregoing, on the condition or requirement that—

18 ‘‘(A) the customer shall obtain or provide

19 some additional loan, discount, deposit, or trust

20 service from, or to, such bank or from, or to,

21 such bank holding company of such bank or

22 from, or to, any subsidiary of such bank hold23 ing company; or

24 ‘‘(B) the customer provide some additional

25 credit, property, or service to such bank, or to
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1 such bank holding company of such bank, or to

2 any subsidiary of such bank holding company,

3 if such additional credit, property, or service is

4 related to and usually provided in connection

5 with a loan, discount, deposit, or trust service.

6 ‘‘(4) EXCEPTIONS BY REGULATION OR

7 ORDER.—The Board may, by regulation or order,

8 permit such exceptions to the prohibitions contained

9 in paragraph (1) as the Board considers will not be

10 contrary to the purposes of this title.’’;

11 (2) in paragraph (1), by striking ‘‘(1) A bank’’

12 and inserting ‘‘(1) IN GENERAL.—Except as pro13 vided in paragraph (3), a bank’’;

14 (3) in paragraph (1)(A) by striking ‘‘other than

15 a loan, discount, deposit, or trust service’’;

16 (4) in paragraph (1)(C) by striking ‘‘other than

17 those related to and usually provided in connection

18 with a loan, discount, deposit or trust service’’; and

19 (5) by striking the last sentence of paragraph

20 (1).

21 (c) AMENDMENTS TO THE FEDERAL RESERVE

22 ACT.—Section 23A of the Federal Reserve Act (12 U.S.C.

23 371c) is amended by—

24 (1) inserting at the end of subsection (a) the

25 following new paragraph:
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1 ‘‘(5) CERTAIN LOANS NOT TREATED AS TRANS2 ACTIONS WITH AFFILIATES.—Notwithstanding para3 graph (2), a loan or extension of credit shall not be

4 deemed to be made to any affiliate, for purposes of

5 this section, if—

6 ‘‘(A) the member bank approves such loan

7 or extension of credit in accordance with sub8 stantially the same standards and procedures

9 and on substantially the same terms that it ap10 plies to similar loans or extensions of credit the

11 proceeds of which are not transferred to or for

12 the benefit of an affiliate; and

13 ‘‘(B) such loan or extension of credit is not

14 made for the purposes of evading any of the re15 quirements of this section.’’; and

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

18 ‘‘(f) COORDINATION WITH FINANCIAL SERVICES

19 COMPETITIVENESS ACT.—The provisions of this section

20 shall be subject to section 102 of the Financial Services

21 Competitiveness Act.’’.

22 (d) AMENDMENTS TO THE FEDERAL DEPOSIT IN23 SURANCE ACT.—
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1 (1) Section 7(j)(8) of the Federal Deposit In2 surance Act (12 U.S.C. 1817(j)(8)) is amended to

3 read as follows:

4 ‘‘(8) CONTROL DEFINED.—

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

6 subsection, the term ‘‘control’’ has the same

7 meaning as in section 2(a) of the Bank Holding

8 Company Act of 1956.

9 ‘‘(B) EXCEPTION FOR SECURITIES AC10 QUIRED IN CERTAIN CAPACITIES.—For pur11 poses of this subsection, no company shall be

12 deemed to control or to have acquired control of

13 any other company by virtue of the company’s

14 ownership of the voting securities of such other

15 company which were—

16 ‘‘(i) acquired or held in an agency,

17 trust, or other fiduciary capacity (whether

18 with or without the sole discretion to vote

19 such securities);

20 ‘‘(ii) acquired or held in connection

21 with or incidental to—

22 ‘‘(I) the underwriting of securi23 ties if such securities are held only for

24 such period of time as will permit the

25 sale thereof on a reasonable basis; or
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1 ‘‘(II) acquired or held in connec2 tion with or incidental to market mak3 ing, dealing, trading, brokerage or

4 other securities related activities and

5 not with a view to acquiring, exercis6 ing or transferring any control over

7 the management or policies of such

8 company; or

9 ‘‘(iii) acquired in securing or collect10 ing a debt previously contracted in good

11 faith, during the 2-year period beginning

12 on the date of such acquisition or for such

13 additional time (not exceeding 3 years) as

14 the appropriate Federal banking agency

15 may permit if the appropriate Federal

16 banking agency determines that such ex17 tension will not be detrimental to the pub18 lic interest.

19 ‘‘(C) EXCEPTION FOR COMPANIES FORMED

20 FOR PROXY SOLICITATIONS.—For purposes of

21 this subsection, no company formed for the sole

22 purpose of participating in a proxy solicitation

23 shall be deemed to control or to have acquired

24 control of any other company by virtue of the

25 company’s acquisition of voting rights with re-
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1 spect to shares of such other company which

2 were acquired in the course of such solicita3 tion.’’.

4 (2) Paragraph (9) of section 5(e) of the Federal

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

6 amended—

7 (A) by striking ‘‘or’’ at the end of subpara8 graph (A);

9 (B) by redesignating subparagraph (B) as

10 subparagraph (C); and

11 (C) by inserting after subparagraph (A)

12 the following new subparagraph:

13 ‘‘(B) such institutions are controlled by the

14 same diversified financial services holding company

15 (as defined in section 3(a) of the Financial Services

16 Competitiveness Act); or’’.

17 (3) Section 3(u) of the Federal Deposit Insur18 ance Act (12 U.S.C. section 1813(u)) is amended—

19 (A) in paragraph (1), by inserting ‘‘, a di20 versified financial services holding company,’’

21 after ‘‘bank holding company’’; and

22 (B) by adding at the end the following new

23 paragraph:

24 ‘‘(7) DIVERSIFIED FINANCIAL SERVICES HOLD25 ING COMPANY.—The term ‘diversified financial serv-
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1 ices holding company’’ has the same meaning as in

2 section 3(9) of the Financial Services Competitive3 ness Act.’’.

4 (e) AMENDMENT TO THE CLAYTON ACT.—Section

5 7A(c)(8) of the Clayton Act (15 U.S.C. 18a(C)(8)), is

6 amended by striking ‘‘of 1933 (12 U.S.C. 1464)’’ and in7 serting ‘‘(12 U.S.C. 1464) or transactions which require

8 agency notification under section 4 of the Financial Serv9 ices Competitiveness Act or section 7(j) of the Federal De10 posit Insurance Act’’.

11 (f) AMENDMENTS TO THE COMMUNITY REINVEST12 MENT ACT.—Section 803(3) of the Community Reinvest13 ment Act (12 U.S.C. 2902(3)) is amended—

14 (1) by inserting ‘‘or notice, as the case may

15 be,’’ after ‘‘an application’’;

16 (2) by striking ‘‘or’’ at the end of subparagraph

17 (E);

18 (3) by striking the period at the end of sub19 paragraph (F) and inserting ‘‘; or’’; and

20 (4) by adding at the end the following new sub21 paragraph:

22 ‘‘(G) the acquisition of an insured bank or

23 an insured institution requiring prior notice
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1 under section 4 of the Financial Services Com2 petitiveness Act.’’.

Æ

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