IIA

103D CONGRESS

2D SESSION H. R. 4926

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 30 (legislative day, SEPTEMBER 12), 1994

Received

OCTOBER 8 (legislative day, SEPTEMBER 12), 1994

Read twice and referred to the Committee on Banking, Housing, and Urban

Affairs

AN ACT

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.

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

5 in Banking Act of 1994’’.
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1 SEC. 2. FAILURE TO ACCORD NATIONAL TREATMENT TO

2 UNITED STATES BANKING ORGANIZATIONS.

3 (a) IDENTIFYING COUNTRIES THAT MAY BE DENY4 ING NATIONAL TREATMENT TO UNITED STATES BANK5 ING ORGANIZATIONS.—The Secretary of the Treasury

6 shall identify, after consultation with the Federal banking

7 agencies, the extent to which foreign countries may be de8 nying national treatment to United States banking organi9 zations—

10 (1) based on information relating to banking in

11 the most recent report under section 3602 of the

12 Omnibus Trade and Competitiveness Act of 1988

13 (or the most recent update of such report); or

14 (2) based on more recent information that the

15 Secretary considers appropriate.

16 (b) ASSESSING WHETHER POSSIBLE DENIAL OF NA17 TIONAL TREATMENT MAY BE HAVING A SIGNIFICANT

18 ADVERSE EFFECT.—

19 (1) IN GENERAL.—The Secretary shall assess,

20 after consultation with the Federal banking agen21 cies, whether the possible denial of national treat22 ment to United States banking organizations by a

23 foreign country identified under subsection (a) may

24 be having a significant adverse effect on such orga25 nizations.
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1 (2) FACTORS TO BE CONSIDERED.—In making

2 any assessment under paragraph (1), the Secretary

3 shall consider appropriate factors, including the fol4 lowing:

5 (A) The extent of United States trade with

6 and investment in the foreign country, the size

7 of the foreign country’s markets for banking

8 services, and the extent to which United States

9 banking organizations operate or seek to oper10 ate in those markets.

11 (B) The importance of operations by

12 United States banking organizations in the for13 eign country to the export of goods and services

14 by United States firms to such country.

15 (C) The extent to which the foreign coun16 try provides in advance to United States bank17 ing organizations a written draft of any

18 measure of general application that the country

19 proposes to adopt, such as regulations, guide20 lines, or other policies regarding new products

21 and services, in order to allow an opportunity

22 for such organizations to comment on the meas23 ure and for such comments to be taken into ac24 count by the foreign country.
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1 (D) The extent to which the foreign coun2 try—

3 (i) makes available, in writing, to

4 United States banking organizations the

5 foreign country’s requirements for complet6 ing any application relating to the provi7 sion of financial services by any such orga8 nization;

9 (ii) applies published, objective stand10 ards and criteria in evaluating any such

11 application from any United States bank12 ing organization; and

13 (iii) renders administrative decisions

14 relating to any such application within a

15 reasonable period of time.

16 (3) SOLICITATION OF COMMENTS.—Before

17 making any assessment under paragraph (1), the

18 Secretary may solicit comments concerning the ef19 fect of the possible denial of national treatment on

20 United States banking organizations from interested

21 parties.

22 (c) PUBLICATION.—The Secretary may publish a no23 tice in the Federal Register of—

24 (1) any assessment made under subsection

25 (b)(1) with respect to any country; and
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1 (2) any change made with respect to any as2 sessment under such subsection which was pre3 viously published in the Federal Register.

4 (d) DEFINITIONS.—The following definitions shall

5 apply for purposes of this section:

6 (1) BANKING ORGANIZATION.—

7 (A) IN GENERAL.—The term ‘‘banking or8 ganization’’ means any bank, any bank holding

9 company (including any company required to

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

11 Bank Holding Company Act of 1956), and any

12 savings and loan holding company (as such

13 term is defined in section 10(a)(1)(D) of the

14 Home Owners’ Loan Act).

15 (B) BANKING TERMS.—For purposes of

16 this paragraph, the terms ‘‘bank’’ and ‘‘bank

17 holding company’’ have the same meaning as in

18 section 2 of the Bank Holding Company Act of

19 1956.

20 (2) FEDERAL BANKING AGENCIES.—The term

21 ‘‘Federal banking agencies’’ has the same meaning

22 as in section 3(z) of the Federal Deposit Insurance

23 Act.

24 (3) NATIONAL TREATMENT.—The term ‘‘na25 tional treatment’’ means, with respect to any foreign
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1 country, treatment that offers United States bank2 ing organizations the same competitive opportunities

3 (including effective market access) in such country

4 as are available to the foreign country’s domestic

5 banking organizations in like circumstances.

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

7 the Secretary of the Treasury.

8 SEC. 3. APPLICATIONS BY FOREIGN BANKS AND OTHER

9 PERSONS OF A FOREIGN COUNTRY.

10 (a) APPLICATIONS UNDER THE INTERNATIONAL

11 BANKING ACT OF 1978.—Section 7(d) of the Inter12 national Banking Act of 1978 (12 U.S.C. 3105(d)) is

13 amended by adding at the end the following new para14 graph:

15 ‘‘(6) ADDITIONAL STANDARD.—In acting on

16 any application under paragraph (1), the Board

17 shall take into account whether the Secretary of the

18 Treasury has published a notice, in accordance with

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

20 Act of 1994, that the possible denial of national

21 treatment to United States banking organizations by

22 the foreign bank’s home country identified under

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

24 adverse effect on such organizations.’’.
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1 (b) APPLICATIONS UNDER THE BANK HOLDING

2 COMPANY ACT OF 1956.—Section 5 of the Bank Holding

3 Company Act of 1956 (12 U.S.C. 1844) is amended by

4 adding at the end the following new subsection:

5 ‘‘(g) APPLICATIONS BY A FOREIGN BANK.—In con6 sidering 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 pub10 lished a notice, in accordance with section 2(c) of the Na11 tional Treatment in Banking Act of 1994, that the pos12 sible denial of national treatment to United States bank13 ing organizations by the foreign bank’s home country

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

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

16 (c) AMENDMENT TO CHANGE IN BANK CONTROL

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

18 (12 U.S.C. 1817(j)) is amended by adding at the end the

19 following new paragraph:

20 ‘‘(19) NOTICE BY A PERSON OF A FOREIGN

21 COUNTRY.—

22 ‘‘(A) IN GENERAL.—In considering a no23 tice under this subsection by a person of a for24 eign country, the appropriate Federal banking

25 agency shall take into account whether the Sec-
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1 retary of the Treasury has published a notice,

2 in accordance with section 2(c) of the National

3 Treatment in Banking Act of 1994, that the

4 possible denial of national treatment to United

5 States banking organizations by such person’s

6 home country identified under section 2(a) of

7 such Act may be having a significant adverse

8 effect on such organizations.

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 sec13 tion 2(c) of the National Treatment in Banking Act of

14 1994, that the possible denial of national treatment to

15 United States banking organizations by such person’s

16 home country identified under section 2(a) of such Act

17 may be having a significant adverse effect on such organi18 zations.’’.

19 (e) AMENDMENT TO FEDERAL DEPOSIT INSURANCE

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

21 (12 U.S.C. 1828(c)) is amended by adding at the end the

22 following new paragraph:

23 ‘‘(12) APPLICATION BY A BANK WHICH IS A

24 PERSON OF A FOREIGN COUNTRY.—In considering

25 any merger transaction under this subsection involv-
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1 ing any bank which is a person of a foreign country

2 (as defined in section 7(j)(19)(B)), the responsible

3 agency shall take into account whether the Secretary

4 of the Treasury has published a notice, in accord5 ance with section 2(c) of the National Treatment in

6 Banking Act of 1994, that the possible denial of na7 tional treatment to United States banking organiza8 tions by such person’s home country identified under

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

10 adverse effect on such organizations.’’.

11 (f) AMENDMENT TO FEDERAL RESERVE ACT.—The

12 3d undesignated paragraph of section 9 of the Federal Re13 serve Act (12 U.S.C. 321) is amended in the proviso by

14 inserting ‘‘, including section 5155(i) of the Revised Stat15 utes,’’ after ‘‘limitations and restrictions’’.

16 SEC. 4. CONSISTENCY WITH BILATERAL AND MULTILAT17 ERAL AGREEMENTS.

18 No authority under this Act or any amendment made

19 by this Act to any other law may be used to take any

20 action with respect to a foreign country which is inconsist21 ent with any bilateral or multilateral agreement that gov22 erns financial services in which such country is obligated
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1 to provide national treatment for United States banking

2 organizations.

Passed the House of Representatives September 30,

1994.

Attest: DONNALD K. ANDERSON,

Clerk.