Union Calendar No. 404

103D CONGRESS

2D SESSION H. R. 4926

[Report No. 103–727]

A BILL

To require the Secretary of the Treasury to identify

Bank Holding Company Act of 1956.the International Banking Act of 1978 and theconsidering applications by foreign banks underagencies to take such assessments into account inganizations, and to require Federal bankingbe having a significant adverse effect on such ortions and to assess whether any such denial maytreatment to United States banking organizaforeign countries which may be denying national

SEPTEMBER 19, 1994

Reported with amendments, committed to the Committee

dered to be printedof the Whole House on the State of the Union, and or-
IB

Union Calendar No. 404

103D CONGRESS

2D SESSION H. R. 4926

[Report No. 103–727]

To require the Secretary of the Treasury to identify foreign countries which

may be denying national treatment to United States banking organizations and to assess whether any such denial may be having a significant

adverse effect on such organizations, and to require Federal banking

agencies to take such assessments into account in considering applications by foreign banks under the International Banking Act of 1978

and the Bank Holding Company Act of 1956.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 9, 1994

Mr. SCHUMER (for himself and Mr. LEACH) introduced the following bill;

which was referred to the Committee on Banking, Finance and Urban Affairs

SEPTEMBER 19, 1994

Reported with amendments, committed to the Committee of the Whole House

on the State of the Union, and ordered to be printed

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

[For text of introduced bill, see copy of bill as introduced on August 9, 1994]

A BILL

To require the Secretary of the Treasury to identify foreign

countries which may be denying national treatment to

United States banking organizations and to assess

whether any such denial may be having a significant

adverse effect on such organizations, and to require Fed-
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eral banking agencies to take such assessments into account in considering applications by foreign banks under

the International Banking Act of 1978 and the Bank

Holding Company Act of 1956.

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.

4 This Act may be cited as the ‘‘National Treatment in

5 Banking Act of 1994’’.

6 SEC. 2. FAILURE TO ACCORD NATIONAL TREATMENT TO

7 UNITED STATES BANKING ORGANIZATIONS.

8 (a) IDENTIFYING COUNTRIES THAT MAY BE DENYING

9 NATIONAL TREATMENT TO UNITED STATES BANKING OR10 GANIZATIONS.—The Secretary of the Treasury shall iden11 tify, after consultation with the Federal banking agencies,

12 the extent to which foreign countries may be denying na13 tional treatment to United States banking organizations—

14 (1) based on information relating to banking in

15 the most recent report under section 3602 of the Om16 nibus Trade and Competitiveness Act of 1988 (or the

17 most recent update of such report); or

18 (2) based on more recent information that the

19 Secretary considers appropriate.

20 (b) ASSESSING WHETHER POSSIBLE DENIAL OF NA21 TIONAL TREATMENT MAY BE HAVING A SIGNIFICANT AD22 VERSE EFFECT.—
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1 (1) IN GENERAL.—The Secretary shall assess,

2 after consultation with the Federal banking agencies,

3 whether the possible denial of national treatment to

4 United States banking organizations by a foreign

5 country identified under subsection (a) may be hav6 ing a significant adverse effect on such organizations.

7 (2) FACTORS TO BE CONSIDERED.—In making

8 any assessment under paragraph (1), the Secretary

9 shall consider appropriate factors, including the fol10 lowing:

11 (A) The extent of United States trade with

12 and investment in the foreign country, the size

13 of the foreign country’s markets for banking serv14 ices, and the extent to which United States bank15 ing organizations operate or seek to operate in

16 those markets.

17 (B) The importance of operations by United

18 States banking organizations in the foreign

19 country to the export of goods and services by

20 United States firms to such country.

21 (C) The extent to which the foreign country

22 provides in advance to United States banking

23 organizations a written draft of any measure of

24 general application that the country proposes to

25 adopt, such as regulations, guidelines, or other
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1 policies regarding new products and services, in

2 order to allow an opportunity for such organiza3 tions to comment on the measure and for such

4 comments to be taken into account by the foreign

5 country.

6 (D) The extent to which the foreign coun7 try—

8 (i) makes available, in writing, to

9 United States banking organizations the

10 foreign country’s requirements for complet11 ing any application relating to the provi12 sion of financial services by any such orga13 nization;

14 (ii) applies published, objective stand15 ards and criteria in evaluating any such

16 application from any United States bank17 ing organization; and

18 (iii) renders administrative decisions

19 relating to any such application within a

20 reasonable period of time.

21 (3) SOLICITATION OF COMMENTS.—Before mak22 ing any assessment under paragraph (1), the Sec23 retary may solicit comments concerning the effect of

24 the possible denial of national treatment on United

25 States banking organizations from interested parties.
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1 (c) PUBLICATION.—The Secretary may publish a no2 tice in the Federal Register of—

3 (1) any assessment made under subsection (b)(1)

4 with respect to any country; and

5 (2) any change made with respect to any assess6 ment under such subsection which was previously

7 published in the Federal Register.

8 (d) DEFINITIONS.—The following definitions shall

9 apply for purposes of this section:

10 (1) BANKING ORGANIZATION.—

11 (A) IN GENERAL.—The term ‘‘banking orga12 nization’’ means any bank, any bank holding

13 company (including any company required to

14 file reports pursuant to section 4(f)(6) of the

15 Bank Holding Company Act of 1956), and any

16 savings and loan holding company (as such term

17 is defined in section 10(a)(1)(D) of the Home

18 Owners’ Loan Act).

19 (B) BANKING TERMS.—For purposes of this

20 paragraph, the terms ‘‘bank’’ and ‘‘bank holding

21 company’’ have the same meaning as in section

22 2 of the Bank Holding Company Act of 1956.

23 (2) FEDERAL BANKING AGENCIES.—The term

24 ‘‘Federal banking agencies’’ has the same meaning as

25 in section 3(z) of the Federal Deposit Insurance Act.
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1 (3) NATIONAL TREATMENT.—The term ‘‘national

2 treatment’’ means, with respect to any foreign coun3 try, treatment that offers United States banking orga4 nizations the same competitive opportunities (includ5 ing effective market access) in such country as are

6 available to the foreign country’s domestic banking

7 organizations in like circumstances.

8 (4) SECRETARY.—The term ‘‘Secretary’’ means

9 the Secretary of the Treasury.

10 SEC. 3. APPLICATIONS BY FOREIGN BANKS AND OTHER

11 PERSONS OF A FOREIGN COUNTRY.

12 (a) APPLICATIONS UNDER THE INTERNATIONAL BANK13 ING ACT OF 1978.—Section 7(d) of the International Bank14 ing Act of 1978 (12 U.S.C. 3105(d)) is amended by adding

15 at the end the following new paragraph:

16 ‘‘(6) ADDITIONAL STANDARD.—In acting on any

17 application under paragraph (1), the Board shall

18 take into account whether the Secretary of the Treas19 ury has published a notice, in accordance with section

20 2(c) of the National Treatment in Banking Act of

21 1994, that the possible denial of national treatment to

22 United States banking organizations by the foreign

23 bank’s home country identified under section 2(a) of

24 such Act may be having a significant adverse effect

25 on such organizations.’’.
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1 (b) APPLICATIONS UNDER THE BANK HOLDING COM2 PANY ACT OF 1956.—Section 5 of the Bank Holding Com3 pany Act of 1956 (12 U.S.C. 1844) is amended by adding

4 at the end the following new subsection:

5 ‘‘(g) APPLICATIONS BY A FOREIGN BANK.—In consid6 ering any application or notice under section 3 or 4 by

7 any foreign bank (as defined in section 1(b) of the Inter8 national Banking Act of 1978), the Board shall take into

9 account whether the Secretary of the Treasury has published

10 a notice, in accordance with section 2(c) of the National

11 Treatment in Banking Act of 1994, that the possible denial

12 of national treatment to United States banking organiza13 tions by the foreign bank’s home country identified under

14 section 2(a) of such Act may be having a significant adverse

15 effect on such organizations.’’.

16 (c) AMENDMENT TO CHANGE IN BANK CONTROL

17 ACT.—Section 7(j) of the Federal Deposit Insurance Act (12

18 U.S.C. 1817(j)) is amended by adding at the end the follow19 ing new paragraph:

20 ‘‘(19) NOTICE BY A PERSON OF A FOREIGN COUN21 TRY.—

22 ‘‘(A) IN GENERAL.—In considering a notice

23 under this subsection by a person of a foreign

24 country, the appropriate Federal banking agency

25 shall take into account whether the Secretary of
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1 the Treasury has published a notice, in accord2 ance with section 2(c) of the National Treatment

3 in Banking Act of 1994, that the possible denial

4 of national treatment to United States banking

5 organizations by such person’s home country

6 identified under section 2(a) of such Act may be

7 having a significant adverse effect on such orga8 nizations.

9 ‘‘(B) PERSON OF A FOREIGN COUNTRY DE10 FINED.—For purposes of this paragraph, the

11 term ‘person of a foreign country’ means—

12 ‘‘(i) any entity that—

13 ‘‘(I) is organized under the laws

14 of the foreign country, or

15 ‘‘(II) has the entity’s principal

16 place of business in the foreign coun17 try;

18 ‘‘(ii) an individual who—

19 ‘‘(I) is a citizen of the foreign

20 country, or

21 ‘‘(II) is domiciled in the foreign

22 country; and

23 ‘‘(iii) any person that is, directly or

24 indirectly, under the control of any entity
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1 or individual described in clause (i) or

2 (ii).’’.

3 (d) AMENDMENT TO NATIONAL BANK ACT.—Section

4 5155 of the Revised Statutes (12 U.S.C. 36) is amended

5 by adding at the end the following new subsection:

6 ‘‘(i) APPLICATION BY A BANK WHICH IS A PERSON

7 OF A FOREIGN COUNTRY.—In considering any application

8 under this section by any bank which is a person of a for9 eign country (as defined in section 7(j)(19)(B) of the Fed10 eral Deposit Insurance Act), the Comptroller of the Cur11 rency shall take into account whether the Secretary of the

12 Treasury has published a notice, in accordance with section

13 2(c) of the National Treatment in Banking Act of 1994,

14 that the possible denial of national treatment to United

15 States banking organizations by such person’s home coun16 try identified under section 2(a) of such Act may be having

17 a significant adverse effect on such organizations.’’.

18 (e) AMENDMENT TO FEDERAL DEPOSIT INSURANCE

19 ACT.—Section 18(c) of the Federal Deposit Insurance Act

20 (12 U.S.C. 1828(c)) is amended by adding at the end the

21 following new paragraph:

22 ‘‘(12) APPLICATION BY A BANK WHICH IS A PER23 SON OF A FOREIGN COUNTRY.—In considering any

24 merger transaction under this subsection involving

25 any bank which is a person of a foreign country (as
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1 defined in section 7(j)(19)(B)), the responsible agency

2 shall take into account whether the Secretary of the

3 Treasury has published a notice, in accordance with

4 section 2(c) of the National Treatment in Banking

5 Act of 1994, that the possible denial of national treat6 ment to United States banking organizations by such

7 person’s home country identified under section 2(a) of

8 such Act may be having a significant adverse effect

9 on such organizations.’’.

10 (f) AMENDMENT TO FEDERAL RESERVE ACT.—The 3d

11 undesignated paragraph of section 9 of the Federal Reserve

12 Act (12 U.S.C. 321) is amended in the proviso by inserting

13 ‘‘, including section 5155(i) of the Revised Statutes,’’ after

14 ‘‘limitations and restrictions’’.

Amend the title so as to read: ‘‘A bill to require the

Secretary of the Treasury to identify foreign countries

which may be denying national treatment to United

States banking organizations and to assess whether any

such denial may be having a significant adverse effect on

such organizations, and to require Federal banking agencies to take such assessments into account in considering

certain applications and notices by foreign banks and

other persons of a foreign country.’’.