Union Calendar No. 98

104TH CONGRESS

1ST SESSION H. R. 1858

[Report No. 104–193]

A BILL

To reduce paperwork and additional regulatory

burdens for depository institutions.

JULY 18, 1995

Reported with an amendment, committed to the Commitordered to be printed tee of the Whole House on the State of the Union, and
IB

Union Calendar No. 98

104TH CONGRESS

1ST SESSION H. R. 1858

[Report No. 104–193]

To reduce paperwork and additional regulatory burdens for depository

institutions.

IN THE HOUSE OF REPRESENTATIVES

JUNE 15, 1995

Mr. LEACH introduced the following bill; which was referred to the Committee

on Banking and Financial Services

JULY 18, 1995

Reported with an amendment, 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 June 15, 1995]

A BILL

To reduce paperwork and additional regulatory burdens for

depository institutions.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

5 ‘‘Financial Institutions Regulatory Relief Act of 1995’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—REDUCTIONS IN GOVERNMENT OVERREGULATION

Subtitle A—The Home Mortgage Process

Sec. 101. Regulatory authority over disclosures and escrow accounts under

RESPA transferred to Federal Reserve Board.

Sec. 102. Simplification and unification of disclosures required under RESPA

and TILA for mortgage transactions.

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

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

Sec. 105. Disclosures for adjustable rate mortgages.

Sec. 106. Certain charges.

Sec. 107. Exemptions from rescission.

Sec. 108. Tolerances; basis of disclosures.

Sec. 109. Limitation on liability.

Sec. 110. Limitation on rescission liability.

Sec. 111. Calculation of damages.

Sec. 112. Assignee liability.

Sec. 113. Rescission rights in foreclosure.

Sec. 114. Recovery of fees.

Sec. 115. Home ownership debt counseling notification.

Sec. 116. Home Mortgage Disclosure Act.

Sec. 117. Applicability.

Subtitle B—Community Reinvestment Act Amendments

Sec. 121. Expression of congressional intent.

Sec. 122. Community Reinvestment Act exemption.

Sec. 123. Self-certification of CRA compliance.

Sec. 124. Community input and conclusive rating.

Sec. 125. Special purpose financial institutions.

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

communities.

Sec. 127. Prohibition on additional reporting under CRA.

Sec. 128. Technical amendment.

Sec. 129. Duplicative reporting.

Sec. 130. CRA congressional oversight.

Sec. 131. Consultation among examiners.

Sec. 132. Limitation on regulations.

Subtitle C—Consumer Banking Reforms

Sec. 141. Truth in Savings.

Sec. 142. Information sharing.

Sec. 143. Electronic Fund Transfer Act clarification.

Sec. 144. 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. 151. Short title.
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Sec. 152. Findings and purpose.

Sec. 153. Equal Credit Opportunity Act amendments.

Sec. 154. Fair Credit Reporting Act amendments.

Sec. 155. Incentives for self-testing.

Sec. 156. Credit scoring systems.

Sec. 157. Consultation by Attorney General required in nonreferral cases.

Sec. 158. Effective date.

Subtitle E—Consumer Leasing Act Amendments

Sec. 161. Short title.

Sec. 162. Congressional findings and declaration of purpose.

Sec. 163. Regulations.

Sec. 164. Consumer lease advertising.

Sec. 165. Statutory penalties.

Subtitle F—Federal Home Loan Bank Amendments

Sec. 171. Application for membership in the FHLB System.

Sec. 172. Federal home loan bank external auditors.

TITLE II—STREAMLINING GOVERNMENT REGULATIONS

Subtitle A—Regulatory Approval Issues

Sec. 201. Streamlined nonbanking acquisitions by well capitalized and well managed banking organizations.

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

banking organizations.

Sec. 203. Eliminate filing and approval requirements for insured depository institutions already controlled by the same holding company.

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

Sec. 205. Elimination of duplicative requirements imposed upon bank holding

companies and other regulatory relief under the Home Owners’

Loan Act.

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

Sec. 207. Eliminate unnecessary branch applications.

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

facilities.

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

well capitalized and well managed banks.

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

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

Sec. 212. Disposition of foreclosed assets.

Sec. 213. Increase in certain credit union loan ceilings.

Subtitle B—Streamlining of Government Regulations; Miscellaneous Provisions

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

State member banks.

Sec. 222. Branch closures.

Sec. 223. Amendments to the Depository Institutions Management Interlocks Act.

Sec. 224. Acceleration of repayment to Treasury.

Sec. 225. Eliminate unnecessary and duplicative recordkeeping and reporting requirements relating to loans to executive officers and permit participation in employee benefit plans.

Sec. 226. Expanded regulatory discretion for small bank examinations.
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Sec. 227. Cost reimbursement.

Sec. 228. Identification of foreign nonbank financial institution customers.

Sec. 229. Paperwork reduction review.

Sec. 230. Daily confirmations for hold-in-custody repurchase transactions.

Sec. 231. Required regulatory review of regulations.

Sec. 232. Country risk requirements.

Sec. 233. Audit costs.

Sec. 234. Standards for director and officer liability.

Sec. 235. Foreign bank applications.

Sec. 236. Duplicate examination of foreign banks.

Sec. 237. Second mortgages.

Sec. 238. Streamlining FDIC approval of new State bank powers.

Sec. 239. Repeal of call report attestation requirement.

Sec. 240. Authority of the Comptroller of the Currency.

Sec. 241. National bank community development insurance activities.

Sec. 242. Authorizing bank service companies to organize as limited liability

partnerships.

Sec. 243. Bank investments in Edge Act and agreement corporations.

Sec. 244. Report on the reconciliation of differences between regulatory accounting principles and generally accepted accounting principles.

Sec. 245. Waivers authorized for residency requirement for national bank directors.

TITLE III—LENDER LIABILITY

Sec. 301. Lender liability.

TITLE IV—ANNUAL STUDY AND REPORT ON IMPACT ON LENDING

TO SMALL BUSINESS

Sec. 401. Annual study and report.

1 TITLE I—REDUCTIONS IN GOV2 ERNMENT OVERREGULATION

3 Subtitle A—The Home Mortgage

4 Process

5 SEC. 101. REGULATORY AUTHORITY OVER DISCLOSURES

6 AND ESCROW ACCOUNTS UNDER RESPA

7 TRANSFERRED TO FEDERAL RESERVE

8 BOARD.

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

10 Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
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1 2601 et seq.) are amended by striking ‘‘Secretary’’ each

2 place such term appears and inserting ‘‘Board’’.

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

4 the Real Estate Settlement Procedures Act of 1974 (12

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

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

7 ‘‘(A) directly regulating settlement services

8 prices; or

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

10 employees that are not designed as a subterfuge

11 to facilitate kickbacks among affiliated compa12 nies’’.

13 (c) BOARD DEFINED.—Section 3 of the Real Estate

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

15 amended—

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

17 (7);

18 (2) by striking the period at the end of para19 graph (8) and inserting ‘‘; and’’; and

20 (3) by adding at the end the following new para21 graph:

22 ‘‘(9) the term ‘Board’ means the Board of Gov23 ernors of the Federal Reserve System.’’.

24 (d) NEGOTIATED REGULATIONS UNDER SECTIONS 8

25 AND 9.—Section 8 of the Real Estate Settlement Procedures
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1 Act of 1974 (12 U.S.C. 2607) is amended by adding at the

2 end the following new subsection:

3 ‘‘(e) NEGOTIATED REGULATIONS.—

4 ‘‘(1) IN GENERAL.—The Secretary may not pub5 lish a proposed or final regulation under this section

6 and section 9 after the date of the enactment of the

7 Financial Institutions Regulatory Relief Act of 1995

8 unless the Secretary has used the negotiated rule9 making procedure established under subchapter III of

10 chapter 5 of title 5, United States Code, to attempt

11 to negotiate and develop the rule.

12 ‘‘(2) CONSISTENCY WITH PURPOSE.—Any regula13 tion prescribed in accordance with paragraph (1)

14 shall be consistent with the purposes of this title as

15 set forth in section 2.’’.

16 (e) ADMINISTRATIVE ENFORCEMENT OF PROHIBITION

17 AGAINST KICKBACKS AND UNEARNED FEES.—Section 8 of

18 the Real Estate Settlement Procedures Act of 1974 (12

19 U.S.C. 2607) is amended by adding after subsection (e) (as

20 added by subsection (d) of this section) the following new

21 subsection:

22 ‘‘(f) ADMINISTRATIVE ENFORCEMENT.—

23 ‘‘(1) IN GENERAL.—Compliance with the require24 ments of this section and sections 9 and 12 shall be

25 enforced under this Act—
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1 ‘‘(A) in the case of an insured depository

2 institution (as defined in section 3 of the Federal

3 Deposit Insurance Act), by the appropriate Fed4 eral banking agency (as defined in such section);

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

6 (as defined in section 101(7) of the Federal Cred7 it Union Act), by the National Credit Union Ad8 ministration;

9 ‘‘(C) in the case of a bank holding company

10 (as defined in section 2 of the Bank Holding

11 Company Act of 1956) and any affiliate of any

12 such holding company (other than an insured

13 depository institution), by the Board;

14 ‘‘(D) in the case of a savings and loan hold15 ing company (as defined in section 10 of the

16 Home Owners’ Loan Act) and any affiliate of

17 any such holding company (other than an in18 sured depository institution), by the Director of

19 the Office of Thrift Supervision; and

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

21 Secretary.

22 ‘‘(2) SPECIAL RULES RELATING TO DETERMINA23 TION OF APPROPRIATE REGULATOR.—

24 ‘‘(A) CASES OF MORE THAN 1 APPROPRIATE

25 REGULATOR.—If, under paragraph (1), a com-
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1 pany may be regulated by more than 1 agency,

2 the Board shall determine which agency shall be

3 the responsible agency, notwithstanding para4 graph (1).

5 ‘‘(B) CASES INVOLVING JOINT VENTURES,

6 PARTNERSHIPS, AND OTHER AFFILIATED BUSI7 NESS ARRANGEMENTS.—If any insured deposi8 tory institution is involved in a joint venture,

9 partnership, or other affiliated business arrange10 ment with any person who is not an insured de11 pository institution, the agency responsible for

12 enforcing this section and sections 9 and 12 with

13 respect to such insured depository institution

14 shall be the agency with such responsibility with

15 respect to such joint venture, partnership, or

16 other affiliated business arrangement.

17 ‘‘(3) INTERAGENCY COOPERATION AND ENFORCE18 MENT GUIDELINES.—All the agencies referred to in

19 any subparagraph of paragraph (1) shall cooperate

20 with each other to develop enforcement guidelines and

21 other means for achieving effective compliance with

22 this section and sections 9 and 12.

23 ‘‘(4) PREFERENCE FOR CIVIL ENFORCEMENT

24 OVER CRIMINAL ENFORCEMENT.—As part of the coop25 erative efforts required under paragraph (3), the
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1 agencies referred to in paragraph (1) shall consider

2 means for achieving compliance with this section and

3 section 9 through the exercise of administrative en4 forcement authority under this subsection without re5 sorting to criminal enforcement actions under sub6 section (d) except in appropriate cases.

7 ‘‘(5) EFFECTIVE DATE.—Paragraphs (1) and (2)

8 shall not take effect until joint interagency coopera9 tion and enforcement guidelines are adopted by all

10 the agencies to which paragraphs (1) and (2) apply

11 and the enforcement authority of the Secretary with

12 respect to this section and sections 9 and 12 shall con13 tinue until such paragraphs take effect.’’.

14 (f) INCREASED SCIENTER REQUIREMENT FOR CRIMI15 NAL PENALTY.—Section 8(d) of the Real Estate Settlement

16 Procedures Act of 1974 (12 U.S.C. 2607(d)) is amended—

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

18 after ‘‘persons who’’; and

19 (2) in paragraph (3), by striking ‘‘was not in20 tentional and’’.

21 (g) REDESIGNATION OF CONTROLLED BUSINESS AR22 RANGEMENTS AS AFFILIATED BUSINESS ARRANGE23 MENTS.—The Real Estate Settlement Procedures Act of

24 1974 (12 U.S.C. 2601 et seq.) is amended—
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1 (1) in section 3(7), by striking ‘‘controlled busi2 ness arrangement’’ and inserting ‘‘affiliated business

3 arrangement’’; and

4 (2) in subsections (c)(4) and (d)(6) of section 8,

5 by striking ‘‘controlled business arrangements’’ and

6 inserting ‘‘affiliated business arrangements’’.

7 (h) TECHNICAL AND CONFORMING AMENDMENTS.—

8 (1) Section 4(a) of the Real Estate Settlement

9 Procedures Act of 1974 (12 U.S.C. 2603(a)) is amend10 ed by striking ‘‘Federal Home Loan Bank Board’’

11 and inserting ‘‘Director of the Office of Thrift Super12 vision’’.

13 (2) Section 8(d)(4) of the Real Estate Settlement

14 Procedures Act of 1974 (12 U.S.C. 2607(d)(4)) is

15 amended by inserting ‘‘any other agency described in

16 subsection (f)(1),’’ after ‘‘the Secretary,’’.

17 (3) Section 10(c)(1)(C) of the Real Estate Settle18 ment Procedures Act of 1974 (12 U.S.C.

19 2609(c)(1)(C)) is amended by striking ‘‘Not later than

20 the expiration of the 90-day period beginning on the

21 date of the enactment of the Cranston-Gonzalez Na22 tional Affordable Housing Act, the’’ and inserting

23 ‘‘The’’.

24 (4) Section 16 of the Real Estate Settlement Pro25 cedures Act of 1974 (12 U.S.C. 2614) is amended by
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1 striking ‘‘Secretary,’’ and inserting ‘‘Board, an agen2 cy referred to in any subparagraph of section

3 8(f)(1),’’.

4 (5) Section 18 of the Real Estate Settlement Pro5 cedures Act of 1974 (12 U.S.C. 2616) is amended—

6 (A) by striking ‘‘Secretary is authorized to’’

7 and inserting ‘‘Board and Secretary may joint8 ly’’;

9 (B) by striking ‘‘Secretary’’ each place such

10 term appears other than the 1st place and insert11 ing ‘‘Board and Secretary’’; and

12 (C) by striking ‘‘determines that such laws’’

13 and inserting ‘‘determine that such laws’’.

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

15 Procedures Act of 1974 (12 U.S.C. 2617(a)) is amend16 ed to read as follows:

17 ‘‘(a) REGULATIONS.—

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

19 Secretary and the Board may prescribe such regula20 tions, make such interpretations, and grant such rea21 sonable exemptions for classes of transactions, as may

22 be necessary to achieve the purposes of this Act.

23 ‘‘(2) APPLICATION.—
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1 ‘‘(A) BOARD.—The authority of the Board

2 under paragraph (1) shall apply with respect

3 to—

4 ‘‘(i) sections 4, 5, 6, 10, and 12; and

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

6 extent such sections are applicable with re7 spect to the sections described in clause (i).

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

9 Secretary under paragraph (1) shall apply with

10 respect to—

11 ‘‘(i) sections 8 and 9; and

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

13 extent such sections are applicable with re14 spect to the sections described in clause

15 (i).’’.

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

17 Procedures Act of 1974 (12 U.S.C. 2617(b)) is amend18 ed by inserting ‘‘, the Board,’’ after ‘‘the Secretary’’.

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

20 Procedures Act of 1974 (12 U.S.C. 2617(c)) is amend21 ed—

22 (A) in paragraph (1)—

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

24 place such term appears and inserting

25 ‘‘Board, with respect to any action to en-
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1 force section 4, 5, 6, or 10, and each agency

2 referred to in any subparagraph of section

3 8(f)(1), with respect to any action to enforce

4 section 8, 9, or 12,’’; and

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

6 such term appears other than the 1st place

7 and inserting ‘‘Board or such other agen8 cy’’; and

9 (B) in paragraph (2), by striking ‘‘Sec10 retary’’ and inserting ‘‘Board or an agency re11 ferred to in any subparagraph of section

12 8(f)(1)’’.

13 (9) The heading for section 19 of the Real Estate

14 Settlement Procedures Act of 1974 (12 U.S.C. 2617)

15 is amended to read as follows:

16 ‘‘AUTHORITY OF THE SECRETARY AND THE FEDERAL

17 RESERVE BOARD’’.

18 (i) REPEAL OF OBSOLETE PROVISIONS.—The Real Es19 tate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et

20 seq.) is amended by striking sections 13, 14, and 15.

21 SEC. 102. SIMPLIFICATION AND UNIFICATION OF DISCLO22 SURES REQUIRED UNDER RESPA AND TILA

23 FOR MORTGAGE TRANSACTIONS.

24 (a) IN GENERAL.—With respect to credit transactions

25 which are subject to the Real Estate Settlement Procedures
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1 Act of 1974 and the Truth in Lending Act, the Board of

2 Governors of the Federal Reserve System shall take such ac3 tion as may be necessary before the end of the 3-month pe4 riod beginning on the date of the enactment of this Act—

5 (1) to simplify the disclosures applicable to such

6 transactions under such Acts, including the timing of

7 the disclosures; and

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

10 Act with respect to such transactions.

11 (b) REGULATIONS.—To the extent that it is necessary

12 to prescribe any regulation in order to effect any changes

13 required to be made under subsection (a), the proposed regu14 lation shall be published in the Federal Register before the

15 end of the 3-month period referred to in subsection (a).

16 (c) RECOMMENDATIONS FOR LEGISLATION.—If the

17 Board of Governors of the Federal Reserve System finds that

18 legislative action may be necessary or appropriate in order

19 to simplify and unify the disclosure requirements under the

20 Real Estate Settlement Procedures Act of 1974 and the

21 Truth in Lending Act, the Board shall submit a report con22 taining recommendations to the Congress concerning such

23 action.
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1 SEC. 103. 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 add5 ing at the end the following new paragraph:

6 ‘‘(7) Transactions for which the Board, by regu7 lation, determines that coverage under the Act is not

8 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 (d)

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

13 (2) by inserting after subsection (a) the following

14 new subsection:

15 ‘‘(b) EXEMPTIVE AUTHORITY.—

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

17 all or parts of this title any class of transactions for

18 which, in the Board’s judgment, coverage under all or

19 part of this title does not provide a measurable benefit

20 to consumers in the form of useful information or

21 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 costs

2 and whether the disclosures, right of rescission,

3 and other provisions are necessary, particularly

4 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. 104. 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 U.S.C.

18 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 any
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1 other person at any time while such loan is outstand2 ing.

3 ‘‘(2) SIGNATURE OF APPLICANT.—Any disclosure

4 of the information required under paragraph (1) shall

5 not be effective for purposes of this section unless the

6 disclosure is accompanied by a written statement, in

7 such form as the Secretary shall develop before the ex8 piration of the 180-day period beginning on the date

9 of the enactment of the Financial Institutions Regu10 latory Relief Act of 1995, that the applicant has read

11 and understood the disclosure and that is evidenced

12 by the signature of the applicant at the place where

13 such statement appears in the application.’’.

14 (b) EFFECTIVE DATE.—The amendments made by sub15 section (a) shall take effect 180 days after the date of the

16 enactment of this Act.

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

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

19 2602(1)(A)) is amended by striking ‘‘or subordinate’’.

20 (d) CONSISTENCY OF RESPA AND TRUTH IN LENDING

21 ACT EXEMPTION OF BUSINESS LOANS.—Section 7 of the

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

23 2606) is amended—

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

25 ‘‘This Act’’; and
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1 (2) by inserting at the end the following new

2 subsection:

3 ‘‘(b) INTERPRETATION.—In issuing regulations pursu4 ant to section 19(a) of this Act, the Board shall ensure that,

5 with regard to subsection (a), the exemption for business

6 credit includes all business credit which is exempt from the

7 Truth in Lending Act in accordance with section 226.3(a)

8 of the regulations prescribed by the Board known as ‘regula9 tion Z’ (12 C.F.R. 226.3(a)), as in effect on the date of

10 enactment of the Financial Institutions Regulatory Relief

11 Act of 1995.’’.

12 SEC. 105. DISCLOSURES FOR ADJUSTABLE RATE MORT13 GAGES.

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

15 in Lending Act (15 U.S.C. 1637a(a)(2)(G)) is amended by

16 inserting before the semicolon ‘‘, or a statement that the

17 monthly payment may increase or decrease significantly

18 due to increases in the annual percentage rate’’.

19 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec20 tion 127A(b)(3) of the Truth in Lending Act (15 U.S.C.

21 1637a(b)(3)) is amended by striking ‘‘required under’’ and

22 inserting ‘‘referred to in’’.

23 (c) ALTERNATIVE TO HISTORICAL EXAMPLE.—Section

24 128(a) of the Truth in Lending Act (15 U.S.C. 1638(a))
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1 is amended by inserting at the end the following new para2 graph:

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

4 by the consumer’s principal dwelling with a term

5 greater than 1 year, at the creditors’ option, a state6 ment that the monthly payment may increase or de7 crease substantially, or a historical example illustrat8 ing the effects of interest rate changes implemented

9 according to the loan program.’’.

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

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

12 1638(b)) is amended by adding at the end the following new

13 paragraph:

14 ‘‘(3) In the case of a residential mortgage transaction,

15 the disclosures under subsection (a) shall include the follow16 ing:

17 ‘‘(A) The note rate and points, and a statement,

18 if applicable, that these terms are subject to change.

19 ‘‘(B) A statement that the creditor must include

20 the disclosed note rate and points in the credit agree21 ment unless, in relation to either or both of those

22 terms—

23 ‘‘(i) the disclosure clearly and conspicuously

24 indicates that the term is subject to change, or
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1 ‘‘(ii) in the case of any term to which clause

2 (i) does not apply—

3 ‘‘(I) the creditor has clearly and con4 spicuously indicated that the term is condi5 tioned on closing the transaction within a

6 prescribed time;

7 ‘‘(II) the creditor has promptly and

8 clearly communicated to the consumer the

9 information and documentation that the

10 consumer is required to provide to the credi11 tor; and

12 ‘‘(III) the consumer has failed to pro13 vide such information and documentation

14 within a reasonable time after receiving

15 that communication.’’.

16 SEC. 106. CERTAIN CHARGES.

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

18 in Lending Act (15 U.S.C. 1605(a)) is amended by adding

19 after the 2d sentence the following new sentence: ‘‘The fi20 nance charge shall not include fees and amounts imposed

21 by third party closing agents (including settlement agents,

22 attorneys, and escrow and title companies) if the creditor

23 does not expressly require the imposition of the charges or

24 the services provided and does not retain the charges.’’.
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1 (b) MORTGAGE BROKER FEES.—Section 106(a) of the

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

3 adding at the end the following new paragraph:

4 ‘‘(6) Mortgage broker fees.’’.

5 (c) TREATMENT OF CERTAIN DEBT CANCELLATION

6 AND DEFICIENCY WAIVER CONTRACTS.—Section 106(c) of

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

8 to read as follows:

9 ‘‘(c) TREATMENT OF CERTAIN DEBT CANCELLATION

10 AND DEFICIENCY WAIVER CONTRACTS.—Charges or pre11 miums for any insurance or for any voluntary noninsur12 ance product, written in connection with any consumer

13 credit transaction, that provides protections against loss of

14 or damage to property or against part or all of the debtor’s

15 liability for amounts in excess of the value of the collateral

16 securing the debtor’s obligation, or against liability arising

17 out of the ownership or use of property, shall be included

18 in the finance charge unless a clear and specific statement

19 in writing is furnished by the creditor to the person to

20 whom the credit is extended, setting forth the cost of the

21 insurance or product if obtained from or through the credi22 tor, and stating that the person to whom credit is extended

23 may choose the person through which the insurance or prod24 uct is to be obtained.’’.
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1 (d) TAXES ON SECURITY INSTRUMENTS OR EVIDENCES

2 OF INDEBTEDNESS.—Section 106(d) of the Truth in Lend3 ing Act (15 U.S.C. 1605(d)) is amended by adding at the

4 end the following new paragraph:

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

6 on documents evidencing indebtedness if the payment

7 of such taxes is a precondition for recording the in8 strument securing the evidence of indebtedness.’’.

9 (e) PREPARATION OF LOAN DOCUMENTS.—Section

10 106(e)(2) of the Truth in Lending Act (15 U.S.C.

11 1605(e)(2)) is amended to read as follows:

12 ‘‘(2) Fees for preparation of loan-related docu13 ments and for attending or conducting settlement.’’.

14 (f) FEES RELATING TO PEST INFESTATIONS, INSPEC15 TIONS, AND HAZARDS.—Section 106(e)(5) of the Truth in

16 Lending Act (15 U.S.C. 1605(e)(5)) is amended by insert17 ing ‘‘, including fees related to pest infestations, premises

18 and structural inspections, and flood hazards’’ before the

19 period.

20 (g) ENSURING FINANCE CHARGES REFLECT COST OF

21 CREDIT.—

22 (1) REPORT.—

23 (A) IN GENERAL.—Not later than 6 months

24 after the date of the enactment of this Act, the

25 Board of Governors of the Federal Reserve Sys-
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1 tem shall submit to the Congress a report con2 taining recommendations on any regulatory or

3 statutory changes necessary—

4 (i) to ensure that finance charges im5 posed in connection with consumer credit

6 transactions more accurately reflect the cost

7 of providing credit; and

8 (ii) to address abusive refinancing

9 practices engaged in solely for the purpose

10 of avoiding rescission.

11 (B) REPORT REQUIREMENTS.—In prepar12 ing the report under this paragraph, the Board

13 shall—

14 (i) consider the extent to which it is

15 feasible to include in finance charges all

16 charges payable directly or indirectly by the

17 consumer to whom credit is extended, and

18 imposed directly or indirectly by the credi19 tor as an incident to the extension of credit

20 (especially those charges excluded from fi21 nance charges under section 106 of the

22 Truth in Lending Act as of the date of the

23 enactment of this Act), excepting only those

24 charges which are payable in a comparable

25 cash transaction; and
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1 (ii) consult with and consider the

2 views of affected industries and consumer

3 groups.

4 (2) REGULATIONS.—The Board of Governors of

5 the Federal Reserve System shall prescribe any appro6 priate regulation in order to effect any change in7 cluded in the report under paragraph (1), and shall

8 publish the regulation in the Federal Register before

9 the end of the 1-year period beginning on the date of

10 enactment of this Act.

11 SEC. 107. EXEMPTIONS FROM RESCISSION.

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

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

14 (1) by striking ‘‘or’’ at the end of paragraph (3);

15 (2) by striking the period at the end of para16 graph (4) and inserting ‘‘; or’’; and

17 (3) by adding at the end the following new para18 graph:

19 ‘‘(5) a transaction, other than a mortgage re20 ferred to in section 103(aa), which—

21 ‘‘(A) is a refinancing of the principal bal22 ance then due and any accrued and unpaid fi23 nance charges of a residential mortgage trans24 action as defined in section 103(w), or is any
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1 subsequent refinancing of such a transaction;

2 and

3 ‘‘(B) does not provide any new consolida4 tion or new advance.’’.

5 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec6 tion 125(e)(2) of the Truth in Lending Act (15 U.S.C.

7 1635(e)(2)) is amended by inserting ‘‘, other than a trans8 action described in subsection (e)(5),’’ after ‘‘a refinancing

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

10 SEC. 108. TOLERANCES; BASIS OF DISCLOSURES.

11 (a) TOLERANCES FOR ACCURACY.—Section 106 of the

12 Truth in Lending Act (15 U.S.C. 1605) is amended by add13 ing at the end the following new subsection:

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

15 with credit transactions not under an open end credit plan

16 that are secured by real property or a dwelling, the disclo17 sure of the finance charge and other disclosures affected by

18 any finance charge—

19 ‘‘(1) except as provided in paragraph (2), shall

20 be treated as being accurate for purposes of this title

21 if the amount disclosed as the finance charge—

22 ‘‘(A) does not vary from the actual finance

charge by more than an amount equal to 1 23 ⁄2 of

24 the numerical tolerance corresponding to, and

25 generated by, the tolerance provided by section
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1 107(c) with respect to the annual percentage

2 rate, but in no case may the tolerance under this

3 paragraph be less than $25 or greater than $200;

4 or

5 ‘‘(B) is greater than the amount required to

6 be disclosed under this title; and

7 ‘‘(2) shall be treated as being accurate for pur8 poses of section 125 if the amount disclosed as the fi9 nance charge does not vary from the actual finance

10 charge by more than an amount equal to 0.5 percent

11 of the total amount of credit extended.’’.

12 (b) BASIS OF DISCLOSURE FOR PER DIEM INTER13 EST.—Section 121(c) of the Truth in Lending Act (15

14 U.S.C. 1631(c)) is amended by adding at the end the follow15 ing new sentence: ‘‘In the case of any consumer credit trans16 action a portion of the interest on which is determined on

17 a per diem basis and is to be collected upon the consumma18 tion of such transaction, any disclosure with respect to such

19 portion of interest shall be deemed to be accurate for pur20 poses of this title if the disclosure is based on information

21 actually known to the creditor at the time that the disclo22 sure documents are being prepared for the consummation

23 of the transaction.’’.
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1 SEC. 109. LIMITATION ON LIABILITY.

2 (a) IN GENERAL.—Chapter 2 of the Truth in Lending

3 Act (15 U.S.C. 1631 et seq.) is amended by adding at the

4 end the following new section:

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

6 ‘‘(a) LIMITATIONS ON LIABILITY.—For any consumer

7 credit transaction subject to this title that is consummated

8 before the date of the enactment of the Financial Institu9 tions Regulatory Relief Act of 1995, a creditor or any as10 signee of a creditor shall have no civil, administrative, or

11 criminal liability under this title for, and a consumer shall

12 have no extended rescission rights under section 125(f) with

13 respect to—

14 ‘‘(1) the creditor’s treatment, for disclosure pur15 poses, of—

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

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

18 106(e) (2) and (5);

19 ‘‘(C) fees and amounts referred to in the 3rd

20 sentence of section 106(a); or

21 ‘‘(D) mortgage broker fees referred to in sec22 tion 106(a)(6);

23 ‘‘(2) the form of written notice used by the credi24 tor to inform the obligor of the rights of the obligor

25 under section 125 if the creditor provided the obligor

26 with a properly dated form of written notice pub-
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1 lished and adopted by the Board or a comparable

2 written notice; or

3 ‘‘(3) any disclosure relating to the finance charge

4 imposed with respect to the transaction if the amount

5 or percentage actually disclosed—

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

7 to section 106(f), or

8 ‘‘(B) is greater than the amount or percent9 age required to be disclosed under this title.

10 ‘‘(b) EXCEPTIONS.—Subsection (a) shall not apply

11 to—

12 ‘‘(1) any individual action or counterclaim

13 brought under this title which was filed before June

14 1, 1995;

15 ‘‘(2) any class action brought under this title for

16 which a final order certifying a class was entered be17 fore January 1, 1995;

18 ‘‘(3) the named individual plaintiffs in any class

19 action brought under this title which was filed before

20 June 1, 1995; or

21 ‘‘(4) any consumer credit transaction with re22 spect to which a timely notice of rescission was sent

23 to the creditor before June 1, 1995.’’.

24 (b) CLERICAL AMENDMENT.—The table of sections for

25 chapter 2 of the Truth in Lending Act is amended by insert-
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1 ing after the item relating to section 138 the following new

2 item:

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

3 SEC. 110. LIMITATION ON RESCISSION LIABILITY.

4 Section 125 of the Truth in Lending Act (15 U.S.C.

5 1635) is further amended by adding at the end the following

6 new subsection:

7 ‘‘(h) LIMITATION ON RESCISSION.—An obligor shall

8 have no rescission rights arising from the form of written

9 notice used by the creditor to inform the obligor of the rights

10 of the obligor under this section, if the creditor provided

11 the obligor the appropriate form of written notice published

12 and adopted by the Board, or a comparable written notice

13 of the rights of the obligor, that was properly completed by

14 the creditor.’’.

15 SEC. 111. CALCULATION OF DAMAGES.

16 Section 130(a)(2)(A) of the Truth in Lending Act (15

17 U.S.C. 1640(a)(2)(A)) is amended—

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

19 and

20 (2) by inserting before the semicolon at the end

21 the following: ‘‘, or (iii) in the case of an individual

22 action relating to a credit transaction not under an

23 open end credit plan that is secured by real property

24 or a dwelling, not less than $250 or greater than

25 $2,500’’.
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1 SEC. 112. ASSIGNEE LIABILITY.

2 (a) VIOLATIONS APPARENT ON THE FACE OF TRANS3 ACTION DOCUMENTS.—Section 131 of the Truth in Lending

4 Act (15 U.S.C. 1641) is amended by adding at the end the

5 following new subsection:

6 ‘‘(e) LIABILITY OF ASSIGNEE FOR CONSUMER CREDIT

7 TRANSACTIONS SECURED BY REAL PROPERTY.—

8 ‘‘(1) IN GENERAL.—Except as otherwise specifi9 cally provided in this title, any civil action against

10 a creditor for a violation of this title, and any pro11 ceeding under section 108 against a creditor, with re12 spect to a consumer credit transaction secured by real

13 property may be maintained against any assignee of

14 such creditor only if—

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

16 proceeding is brought is apparent on the face of

17 the disclosure statement provided in connection

18 with such transaction pursuant to this title; and

19 ‘‘(B) the assignment to the assignee was vol20 untary.

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

22 DISCLOSURE DESCRIBED.—For the purpose of this

23 section, a violation is apparent on the face of the dis24 closure statement if—

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

26 incomplete or inaccurate from the face of the dis-
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1 closure statement, any itemization of the amount

2 financed, or any other disclosure of disburse3 ment; or

4 ‘‘(B) the disclosure statement does not use

5 the terms or format required to be used by this

6 title.’’.

7 (b) SERVICER NOT TREATED AS ASSIGNEE.—Section

8 131 of the Truth in Lending Act (15 U.S.C. 1641) is

9 amended by inserting after subsection (e) (as added by sub10 section (a) of this section) the following new subsection:

11 ‘‘(f) TREATMENT OF SERVICER.—

12 ‘‘(1) IN GENERAL.—A servicer of a consumer ob13 ligation arising from a consumer credit transaction

14 shall not be treated as an assignee of such obligation

15 for purposes of this section unless the servicer is the

16 owner of the obligation.

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

18 BASIS OF ASSIGNMENT FOR ADMINISTRATIVE CONVEN19 IENCE.—A servicer of a consumer obligation arising

20 from a consumer credit transaction shall not be treat21 ed as the owner of the obligation for purposes of this

22 section on the basis of an assignment of the obligation

23 from the creditor or another assignee to the servicer

24 solely for the administrative convenience of the

25 servicer in servicing the obligation. Upon written re-
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1 quest by the obligor, the servicer shall provide the ob2 ligor, to the best knowledge of the servicer, with the

3 name, address, and telephone number of the owner of

4 the obligation or the master servicer of the obligation.

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

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

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

8 Procedures Act of 1974.’’.

9 SEC. 113. RESCISSION RIGHTS IN FORECLOSURE.

10 Section 125 of the Truth in Lending Act (15 U.S.C.

11 1635) is amended by inserting after subsection (h) (as

12 added by section 110) the following new subsection:

13 ‘‘(i) RESCISSION RIGHTS IN FORECLOSURE.—

14 ‘‘(1) IN GENERAL.—Notwithstanding section 139,

15 and subject to the time period provided in subsection

16 (f), in addition to any other right of rescission avail17 able under this section for a transaction, upon an ac18 tion of a creditor to execute foreclosure on the pri19 mary dwelling of an obligor securing an extension of

20 credit, the obligor shall have a right to rescind the

21 transaction equivalent to other rescission rights pro22 vided by this section, if—

23 ‘‘(A) a mortgage brokers fee is not included

24 in the finance charge in accordance with the

25 laws and regulations in effect at the time the
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1 consumer credit transaction was consummated;

2 or

3 ‘‘(B) the form of notice of rescission for the

4 transaction is not the appropriate form of writ5 ten notice published and adopted by the Board

6 or a comparable written notice, or was not prop7 erly completed by the creditor.

8 ‘‘(2) TOLERANCE FOR DISCLOSURES.—Notwith9 standing section 106(f), and subject to the time period

10 provided in subsection (f), for the purposes of exercis11 ing any rescission rights following an action by a

12 creditor to foreclose on the principal dwelling of the

13 obligor securing an extension of credit, the disclosure

14 of the finance charge and other disclosures affected by

15 any finance charge shall be treated as being accurate

16 for purposes of this section if the amount disclosed as

17 the finance charge does not vary from the actual fi18 nance charge by more than $35 or is greater than the

19 amount required to be disclosed under this title.’’.

20 SEC. 114. RECOVERY OF FEES.

21 Section 125(b) of the Truth in Lending Act (15 U.S.C.

22 1635) is amended—

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

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

25 after ‘‘other charge’’; and
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1 (2) in the 2d sentence, by striking ‘‘otherwise’’

2 and inserting ‘‘as otherwise required under this sub3 section’’.

4 SEC. 115. HOME OWNERSHIP DEBT COUNSELING NOTIFICA5 TION.

6 Section 106(c) of the Housing and Urban Development

7 Act of 1968 (12 U.S.C. 1701x(c)) is amended by striking

8 paragraph (5).

9 SEC. 116. HOME MORTGAGE DISCLOSURE ACT.

10 (a) Section 309 of the Home Mortgage Disclosure Act

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

12 (1) in the 2d sentence, by striking ‘‘$10,000,000’’

13 and inserting ‘‘$50,000,000’’; and

14 (2) by inserting at the end the following new sen15 tences: ‘‘The Board may also, by regulation, exempt

16 from the provisions of this Act institutions specified

17 in section 303(2)(A) which have total assets as of

18 their last full fiscal year of $50,000,000 or greater

19 where the burden of complying with this Act on such

20 institutions outweighs the usefulness of the informa21 tion required to be disclosed. The exemptions provided

22 under this section shall not be applicable to an insti23 tution which the Board, by order, has found a reason24 able basis to believe is not fulfilling its obligations to

25 serve the housing needs of the communities and neigh-
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1 borhoods in which it located. An institution subject to

2 such an order shall be required to comply with the re3 quirements of this Act for loans made after the time

4 that the order is issued at such time and for such pe5 riod as the Board deems appropriate. The dollar

6 amount in this section shall be adjusted annually

7 after December 31, 1994, by the annual percentage in8 crease in the Consumer Price Index for Urban Wage

9 Earners and Clerical Workers published by the Bu10 reau of Labor Statistics.’’.

11 (b) Section 304 of the Home Mortgage Disclosure Act

12 of 1975 (12 U.S.C. 2803) is amended by adding at the end

13 the following new subsection:

14 ‘‘(m) OPPORTUNITY TO REDUCE COMPLIANCE BUR15 DEN.—

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

17 to have satisfied the public availability requirements

18 of subsection (a) if such institution keeps the informa19 tion required under that subsection at its home office

20 and provides notice at the branch locations specified

21 in such subsection that such information is available

22 upon request from the home office of the institution.

23 A home office of the depository institution receiving

24 a request for such information pursuant to this sub25 section shall provide the information pertinent to the
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1 location of the branch in question within fifteen days

2 of the receipt of the written request.

3 ‘‘(2) In complying with paragraph (1), a deposi4 tory institution may provide the individual request5 ing such information, at the institution’s choice,

6 with—

7 ‘‘(A) a paper copy of the information re8 quested; or

9 ‘‘(B) if acceptable to the individual, the in10 formation through a form of electronic medium,

11 such as computer disc.’’.

12 SEC. 117. APPLICABILITY.

13 (a) IN GENERAL.—The amendments made by sub14 sections (a), (d), (e), and (f) of section 106 and sections

15 108, 112, and 113 shall apply to all consumer credit trans16 actions in existence or consummated on or after the date

17 of enactment of this Act.

18 (b) EXCEPTION.—Notwithstanding subsection (a), in

19 the case of—

20 (1) an individual action or a counterclaim re21 ferred to in section 139(b)(1) of the Truth in Lending

22 Act, as amended by section 109(a) of this Act;

23 (2) a class action referred to in section 139(b)(2)

24 of that Act;
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1 (3) a claim of an individual as a named indi2 vidual plaintiff in a class action referred to in section

3 139(b)(3) of that Act; or

4 (4) a claim relating to a consumer credit trans5 action referred to in section 139(b)(4) of that Act;

6 the Truth in Lending Act shall apply as in effect on the

7 date of the consummation of the consumer credit trans8 action that is the subject of the individual action, counter9 claim, class action, or claim, respectively.

10 Subtitle B—Community

11 Reinvestment Act Amendments

12 SEC. 121. EXPRESSION OF CONGRESSIONAL INTENT.

13 Subsection (b) of section 802 of the Community Rein14 vestment Act of 1977 (12 U.S.C. 2901) is amended to read

15 as follows:

16 ‘‘(b) It is the purpose of this title to require each ap17 propriate Federal financial supervisory agency to use its

18 authority, when examining financial institutions, to en19 courage such institutions to help meet the credit needs of

20 the local communities in which they are chartered consist21 ent with the safe and sound operation of such institutions.

22 When examining financial institutions, a supervisory agen23 cy shall not impose additional burden, recordkeeping, or re24 porting upon such institutions.’’.
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1 SEC. 122. COMMUNITY REINVESTMENT ACT EXEMPTION.

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

3 2901 et seq.) is amended by adding at the end the following

4 new section:

5 ‘‘SEC. 809. EXAMINATION EXEMPTION.

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

7 shall not be subject to the examination requirements of this

8 title or any regulations issued under this section if the insti9 tution and any bank holding company which controls such

10 institution have aggregate assets of not more than

11 $100,000,000.

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

13 subsection (a) shall be adjusted annually after December 31,

14 1994, by the annual percentage increase in the Consumer

15 Price Index for Urban Wage Earners and Clerical Workers

16 published by the Bureau of Labor Statistics.’’.

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

18 Section 804 of the Community Reinvestment Act of

19 1977 (12 U.S.C. 2903) is amended by adding at the end

20 the following new subsection (c):

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

22 ‘‘(1) CERTIFICATION.—In lieu of being evaluated

23 under section 806A and receiving a written evalua24 tion under section 807, a qualifying financial institu25 tion may elect to self-certify to the appropriate Fed-
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1 eral financial supervisory agency that such institu2 tion is in compliance with the goals of this title.

3 ‘‘(2) QUALIFYING INSTITUTION.—

4 ‘‘(A) IN GENERAL.—For purposes of para5 graph (1), the term ‘qualifying institution’

6 means a financial institution which—

7 ‘‘(i) has not more than $250 million in

8 assets;

9 ‘‘(ii) has not been found to have en10 gaged in a pattern or practice of illegal dis11 crimination under the Fair Housing Act or

12 the Equal Credit Opportunity Act for the

13 preceding 5-year calendar period; and

14 ‘‘(iii) received rating under section

15 807(b)(2) of ‘satisfactory’ or ‘outstanding’

16 in the most recent evaluation of such insti17 tution under this title.

18 ‘‘(B) ANNUAL ADJUSTMENT.—The dollar

19 amount in subparagraph (A) shall be adjusted

20 annually after December 31, 1994, by the annual

21 percentage increase in the Consumer Price Index

22 for Urban Wage Earners and Clerical Workers

23 published by the Bureau of Labor Statistics.

24 ‘‘(3) PUBLIC NOTICE.—
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1 ‘‘(A) IN GENERAL.—A qualifying institu2 tion shall maintain in every branch a public no3 tice stating that—

4 ‘‘(i) the institution has self-certified

5 that the institution is satisfactorily helping

6 to meet the credit needs of its community;

7 ‘‘(ii) the institution maintains—

8 ‘‘(I) at the main office of such in9 stitution, a public file which contains

10 a copy of the self-certification to the

11 appropriate Federal financial super12 visory agency; and

13 ‘‘(II) a map delineating the com14 munity served by the institution;

15 ‘‘(iii) a list of the types of credit and

16 services that the institution provides to the

17 community served by the institution;

18 ‘‘(iv) such other information that the

19 institution believes demonstrates the institu20 tion’s record of helping to meet the credit

21 needs of its community; and

22 ‘‘(v) every public comment or letter to

23 the institution (and any response by the in24 stitution) received within the previous 2-

25 year period about the record of the institu-
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1 tion of helping to meet the credit needs of

2 its community.

3 ‘‘(B) PUBLIC FILE.—A qualifying institu4 tion shall maintain a public file containing the

5 contents described in this paragraph at the insti6 tution’s main office.

7 ‘‘(4) RATING.—

8 ‘‘(A) IN GENERAL.—A qualifying institu9 tion shall be deemed to have a rating of a ‘satis10 factory record of meeting community credit

11 needs’ for the purposes of this section and section

12 806A(c).

13 ‘‘(B) PUBLICATION.—Each Federal finan14 cial supervisory agency shall publish in the Fed15 eral Register once each month a list of institu16 tions that have self-certified during the previous

17 month.

18 ‘‘(C) PUBLICATION CONSTITUTES DISCLO19 SURE.—Publication of the name of the institu20 tion in the Federal Register as having self-cer21 tified shall constitute disclosure of the rating of

22 the institution to the public for purposes of sec23 tions 806A and 807.

24 ‘‘(5) REGULATORY REVIEW.—
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1 ‘‘(A) ASSESSMENT.—During each examina2 tion for safety and soundness, a qualifying insti3 tution’s supervisory agency shall, as part of the

4 agency’s review of the institution’s loans, assess

5 whether the institution’s basis for its self-certifi6 cation is reasonable based on the public notice

7 and the information contained in the public file

8 pursuant to paragraph (3).

9 ‘‘(B) EXAMINATION IF SELF-CERTIFICATION

10 IS NOT REASONABLE.—If the agency determines

11 that the institution’s basis for the institution’s

12 self-certification is not reasonable, the agency

13 shall schedule an examination of the institution

14 for the purpose of assessing the institution’s

15 record of helping to meet the credit needs of its

16 community.

17 ‘‘(C) REVOCATION OF SELF-CERTIFI18 CATION.—If an assessment pursuant to subpara19 graph (B) results in a less than ‘satisfactory’

20 rating, the agency shall revoke the institution’s

21 self-certification and substitute a written evalua22 tion as provided under section 807.

23 ‘‘(D) PERIOD OF INELIGIBILITY FOR SELF24 CERTIFICATION.—An institution whose self-cer25 tification has been revoked may not self-certify
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1 pursuant to this subsection during the 5 years

2 succeeding the year in which the self-certification

3 is revoked.

4 ‘‘(E) SUBSEQUENT ELIGIBILITY.—After the

5 end of the period of ineligibility described in

6 subparagraph (D), an institution which meets

7 the requirements for self-certification may elect

8 to self-certify.

9 ‘‘(6) PROHIBITION ON ADDITIONAL REQUIRE10 MENTS.—No appropriate Federal financial super11 visory agency may impose any additional require12 ments, whether by regulation or otherwise, relating to

13 the self-certification procedure under this subsection.’’.

14 SEC. 124. COMMUNITY INPUT AND CONCLUSIVE RATING.

15 (a) CONFORMING AMENDMENT.—Section 804(a) of the

16 Community Reinvestment Act of 1977 (12 U.S.C. 2903) is

17 amended by inserting ‘‘conducted in accordance with sec18 tion 806A,’’ after ‘‘financial institution,’’.

19 (b) COMMUNITY INPUT AND CONCLUSIVE RATING.—

20 The Community Reinvestment Act of 1977 (12 U.S.C. 2901

21 et seq.) is amended by inserting after section 806 the follow22 ing new section:

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

24 ‘‘(a) PUBLICATION OF EXAM SCHEDULE AND OPPOR25 TUNITY FOR COMMENT.—
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1 ‘‘(1) PUBLICATION OF NOTICE.—Each appro2 priate Federal financial supervisory agency shall—

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

4 days before the beginning of a calendar quarter,

5 a listing of institutions scheduled for evaluation

6 for compliance with this title during such cal7 endar quarter; and

8 ‘‘(B) provide opportunity for written com9 ments from the community on the performance,

10 under this title, of each institution scheduled for

11 evaluation.

12 ‘‘(2) COMMENT PERIOD.—Written comments may

13 not be submitted to an appropriate Federal financial

14 supervisory agency pursuant to paragraph (1) after

15 the end of the 30-day period beginning on the first

16 day of the calendar quarter.

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

18 provide a copy of such comments to the institution.

19 ‘‘(b) EVALUATION.—The appropriate Federal financial

20 supervisory agency shall—

21 ‘‘(1) evaluate the institution in accordance with

22 the standards contained in section 804; and

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

24 the institution as required under section 807.

25 ‘‘(c) RECONSIDERATION OF RATING.—
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1 ‘‘(1) REQUEST FOR RECONSIDERATION.—A re2 consideration of an institution’s rating referred to in

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

4 of the rating’s disclosure to the public.

5 ‘‘(2) PROCEDURES FOR REQUEST.—Any such re6 quest shall be made in writing and filed with the ap7 propriate Federal financial supervisory agency, and

8 may be filed by the institution or a member of the

9 community.

10 ‘‘(3) BASIS FOR REQUEST.—Any request for re11 consideration under this subsection shall be based on

12 significant issues of a substantive nature which are

13 relevant to the delineated community of the institu14 tion and, in the case of a request by a member of the

15 community, shall be limited to issues previously

16 raised in comments submitted pursuant to subsection

17 (a).

18 ‘‘(4) COMPLETION OF REVIEW.—The appropriate

19 Federal financial supervisory agency shall complete

20 any requested reconsideration within 30 days of the

21 filing of the request.

22 ‘‘(d) CONCLUSIVE RATING.—

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

24 become conclusive on the later of—
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1 ‘‘(A) 30 days after the rating is disclosed to

2 the public; or

3 ‘‘(B) the completion of any requested recon4 sideration by the Federal financial supervisory

5 agency.

6 ‘‘(2) RATING CONCLUSIVE OF MEETING COMMU7 NITY CREDIT NEEDS.—An institution’s rating shall be

8 the conclusive assessment of the institution’s record of

9 meeting the credit needs of its community for pur10 poses of section 804 until the institution’s next rating,

11 developed pursuant to an examination, becomes con12 clusive.

13 ‘‘(3) SAFE HARBOR.—Institutions which have re14 ceived a ‘satisfactory’ or ‘outstanding’ rating shall be

15 deemed to have met the purposes of section 804.

16 ‘‘(4) RULE OF CONSTRUCTION.—Notwithstanding

17 any other provision of law, no provision of this sec18 tion shall be construed as granting a cause of action

19 to any person.’’.

20 (c) OVERALL EVALUATION OF INSTITUTION.—Para21 graph (2) of section 804(a) of the Community Reinvestment

22 Act of 1977 (12 U.S.C. 2903(a)) is amended to read as fol23 lows:
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1 ‘‘(2) take such record into account in the overall

2 evaluation of the condition of the institution by the

3 appropriate Federal financial supervisory agency.’’.

4 SEC. 125. SPECIAL PURPOSE FINANCIAL INSTITUTIONS.

5 (a) IN GENERAL.—Section 804 of the Community Re6 investment Act of 1977 (12 U.S.C. 2903) is amended by

7 inserting after subsection (c) (as added by section 123 of

8 this title) the following new subsection:

9 ‘‘(d) SPECIAL PURPOSE INSTITUTIONS.—

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

11 pursuant to this section at any special purpose insti12 tution, the appropriate Federal financial supervisory

13 agency shall—

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

15 institution is involved in; and

16 ‘‘(B) assess and take into account the record

17 of the institution commensurate with the amount

18 of deposits (as defined in section 3(1) of the Fed19 eral Deposit Insurance Act) received by such in20 stitution.

21 ‘‘(2) STANDARDS.—Each appropriate Federal fi22 nancial supervisory agency shall develop standards

23 under which special purpose institutions may be

24 deemed to have complied with the requirements of this
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1 title which are consistent with the specific nature of

2 such businesses.’’.

3 (b) SPECIAL PURPOSE INSTITUTION DEFINED.—Sec4 tion 803 of the Community Reinvestment Act of 1977 (12

5 U.S.C. 2902) is amended by adding at the end the following

6 new paragraph:

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

8 term ‘special purpose institution’ means a financial

9 institution that does not generally accept deposits

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

11 such as wholesale, credit card, and trust institu12 tions.’’.

13 SEC. 126. INCREASED INCENTIVES FOR LENDING TO LOW14 AND MODERATE-INCOME COMMUNITIES.

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

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

17 to read as follows:

18 ‘‘(b) POSITIVE CONSIDERATION OF CERTAIN LOANS

19 AND INVESTMENTS.—In assessing and taking into account

20 the records of a regulated financial institution under sub21 section (a), the appropriate Federal financial supervisory

22 agency shall—

23 ‘‘(1) consider as a positive factor, consistent with

24 the safe and sound operation of the institution, the

25 institution’s investment in or loan to—
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1 ‘‘(A) any minority depository institution or

2 women’s depository institution (as such terms

3 are defined in section 808(b)) or any low-income

4 credit union;

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

6 project which promotes the public welfare in any

7 distressed community (as defined by such agen8 cy) whether or not the distressed community is

9 located in the local community in which the reg10 ulated financial institution is chartered to do

11 business; and

12 ‘‘(C) targeted low- and moderate-income

13 communities, including real property loans to

14 such communities; and

15 ‘‘(2) consider equally with other factors capital

16 investment, loan participation, and other ventures

17 undertaken by the institution in cooperation with—

18 ‘‘(A) minority- and women-owned financial

19 institutions and low-income credit unions to the

20 extent that these activities help meet the credit

21 needs of the local communities in which such in22 stitutions are chartered; and

23 ‘‘(B) community development corporations

24 in extending credit and other financial services

25 principally to low- and moderate-income persons
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1 and small businesses to the extent that such com2 munity development corporations help meet the

3 credit needs of the local communities served by

4 the majority-owned institution.’’.

5 (b) AMENDMENT TO DEFINITIONS.—Section 803 of the

6 Community Reinvestment Act of 1977 (12 U.S.C. 2902) is

7 amended by inserting after paragraph (5) (as added by sec8 tion 125(b) of this subtitle) the following new paragraph:

9 ‘‘(6) STATE BANK SUPERVISOR.—The term ‘State

10 bank supervisor’ has the same meaning as in section

11 3(r) of the Federal Deposit Insurance Act.’’.

12 (c) TECHNICAL CORRECTION.—The 1st of the 2 para13 graphs designated as paragraph (2) of section 803 of the

14 Community Reinvestment Act of 1977 (12 U.S.C. 2902) is

15 amended to read as follows:

16 ‘‘(D) the Director of the Office of Thrift Su17 pervision with respect to any savings association

18 (the deposits of which are insured by the Federal

19 Deposit Insurance Corporation) and any savings

20 and loan holding company (other than a com21 pany which is a bank holding company);’’.

22 SEC. 127. PROHIBITION ON ADDITIONAL REPORTING

23 UNDER CRA.

24 Section 806 of the Community Reinvestment Act of

25 1977 (12 U.S.C. 2905) is amended to read as follows:
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1 ‘‘SEC. 806. REGULATIONS.

2 ‘‘(a) IN GENERAL.—

3 ‘‘(1) PUBLICATION REQUIREMENT.—Regulations

4 to carry out the purposes of this title shall be pub5 lished by each appropriate Federal financial super6 visory agency.

7 ‘‘(2) PROHIBITION ON ADDITIONAL RECORD8 KEEPING.—Regulations prescribed and policy state9 ments, commentary, examiner guidance, or other su10 pervisory material issued under this title shall not

11 impose any additional recordkeeping on a financial

12 institution.

13 ‘‘(3) PROHIBITION ON LOAN DATA COLLEC14 TION.—No loan data may be required to be collected

15 and reported by a financial institution and no such

16 data may be made public by any Federal financial

17 supervisory agency under this title.’’.

18 SEC. 128. TECHNICAL AMENDMENT.

19 Section 807(b)(1)(B) of the Community Reinvestment

20 Act (12 U.S.C. 2906) is amended by striking ‘‘The informa21 tion’’ and inserting ‘‘In the case of a regulated financial

22 institution that maintains domestic branches in 2 or more

23 States, the information’’.
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1 SEC. 129. DUPLICATIVE REPORTING.

2 Section 10(g) of the Federal Home Loan Bank Act (12

3 U.S.C. 1430(g)) is amended by adding at the end the follow4 ing new paragraph (3):

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

6 apply to members receiving a grade of ‘outstanding’

7 or ‘satisfactory’ under section 807 of the Community

8 Reinvestment Act of 1977.’’.

9 SEC. 130. CRA CONGRESSIONAL OVERSIGHT.

10 (a) SENSE OF CONGRESS RELATING TO AGGRESSIVE

11 OVERSIGHT.—It is the sense of the Congress that the appro12 priate committees of the House of Representatives and the

13 Senate should exercise aggressive oversight of the adoption

14 and implementation of any regulation by any appropriate

15 Federal financial supervisory agency under the Community

16 Reinvestment Act of 1977 after the date of the enactment

17 of this Act.

18 (b) AGENCY REPORTS REQUIRED.—

19 (1) IN GENERAL.—Each appropriate Federal fi20 nancial supervisory agency shall submit a report to

21 the Congress by December 31, 1996, and by December

22 31, 1997, on the implementation of all regulations

23 prescribed by such agency under the Community Re24 investment Act of 1977 after the date of the enactment

25 of this Act.
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1 (2) REQUIREMENTS RELATING TO PREPARATION

2 OF REPORTS.—In preparing each report required

3 under paragraph (1), each appropriate Federal finan4 cial supervisory agency shall—

5 (A) solicit and include comments from regu6 lated financial institutions with respect to the

7 regulations which are the subject of the report;

8 and

9 (B) include quantifiable measures of the

10 cost savings achieved under the regulations

11 which are the subject of the report and the effec12 tiveness of such regulations in achieving the pur13 poses of the Community Reinvestment Act of

14 1977.

15 (3) DEFINITIONS.—For purposes of this section,

16 the terms ‘‘appropriate Federal financial supervisory

17 agency’’ and ‘‘regulated financial institution’’ have

18 the same meanings as in section 803 of the Commu19 nity Reinvestment Act of 1977.

20 SEC. 131. CONSULTATION AMONG EXAMINERS.

21 Section 10 of the Federal Deposit Insurance Act (12

22 U.S.C. 1820) is amended by adding at the end the following

23 new subsection:

24 ‘‘(j) CONSULTATION AMONG EXAMINERS.—
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1 ‘‘(1) IN GENERAL.—Each appropriate Federal

2 banking agency shall take such action as may be nec3 essary to ensure that examiners employed by the

4 agency—

5 ‘‘(A) consult on examination activities with

6 respect to any depository institution; and

7 ‘‘(B) achieve an agreement and resolve any

8 inconsistencies on the recommendations to be

9 given to such institution as a consequence of any

10 examinations.

11 ‘‘(2) EXAMINER-IN-CHARGE.—Each agency shall

12 consider appointing an examiner-in-charge with re13 spect to a depository institution to ensure consulta14 tion on examination activities among all of the agen15 cy’s examiners involved in examinations of such in16 stitution.’’.

17 SEC. 132. LIMITATION ON REGULATIONS.

18 Section 806 of the Community Reinvestment Act of

19 1977 (12 U.S.C. 2905) (as amended by section 127) is

20 amended by adding at the end the following new sub21 sections:

22 ‘‘(b) LIMITATION ON REGULATIONS.—No regulation

23 may be prescribed under this title by any Federal agency

24 which would—
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1 ‘‘(1) require any regulated financial institution

2 to—

3 ‘‘(A) make any loan or enter into any other

4 agreement on the basis of any discriminatory

5 criteria prohibited under any law of the United

6 States; or

7 ‘‘(B) make any loan to, or enter into any

8 other agreement with, any uncreditworthy person

9 that would jeopardize the safety and soundness of

10 such institution; or

11 ‘‘(2) prevent or hinder in any way a financial

12 institution’s full responsibility to provide credit to all

13 segments of the community.

14 ‘‘(c) ENCOURAGE LOANS TO CREDITWORTHY BORROW15 ERS.—Regulations prescribed under this title shall encour16 age regulated financial institutions to make loans and ex17 tend credit to all creditworthy persons, consistent with safe18 ty and soundness.’’.

19 Subtitle C—Consumer Banking

20 Reforms

21 SEC. 141. TRUTH IN SAVINGS.

22 (a) PURPOSE.—Section 262 of the Truth in Savings

23 Act (12 U.S.C. 4301) is amended to read as follows:
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1 ‘‘SEC. 262. PURPOSE.

2 ‘‘It is the purpose of this subtitle to ensure that con3 sumers can make a meaningful comparison between the

4 competing claims of depository institutions with regard to

5 deposit accounts by requiring that institutions offering in6 terest-bearing accounts pay interest on the full amount of

7 principal each day in a consumer deposit account at the

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

9 (b) PROHIBITION ON MISLEADING OR INACCURATE AD10 VERTISEMENTS AND DISCLOSURES.—Section 263 is amend11 ed to read as follows:

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

13 ADVERTISEMENTS AND DISCLOSURES.

14 ‘‘No depository institution or deposit broker shall make

15 any advertisement, announcement, solicitation or disclosure

16 relating to a deposit account that is inaccurate or mislead17 ing, including any inaccurate or misleading description of

18 a free or no-cost account, or that misrepresents its deposit

19 contracts.’’.

20 (c) ACCOUNT INFORMATION UPON OPENING AN AC21 COUNT.—Section 264 of the Truth in Savings Act (12

22 U.S.C. 4304) is amended to read as follows:

23 ‘‘SEC. 264. ACCOUNT INFORMATION.

24 ‘‘(a) IN GENERAL.—Each depository institution shall

25 disclose fees, charges, penalties, and interest rates applicable
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1 to each class of accounts offered by the institution in accord2 ance with this section.

3 ‘‘(b) INFORMATION ON FEES AND CHARGES.—Each de4 pository institution shall disclose the following information

5 with respect to any account to a consumer at the time the

6 account is opened, or at such earlier time as a consumer

7 may request (and no additional information may be re8 quired to be disclosed under this subtitle by regulation or

9 otherwise with respect to such account):

10 ‘‘(1) A description of all fees, periodic service

11 charges, penalties, and interest rates which may be

12 charged or assessed against the account (or against

13 the account holder in connection with such account),

14 the amount of any such fees, charges, or penalties (or

15 the method by which such amount will be calculated),

16 and the conditions under which any such amount will

17 be assessed.

18 ‘‘(2) All minimum balance requirements that af19 fect fees, charges, and penalties, including a clear de20 scription of how each such minimum balance is cal21 culated.

22 ‘‘(3) Any minimum amount required with re23 spect to the initial deposit in order to open the ac24 count.
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1 ‘‘(c) INFORMATION ON INTEREST RATES.—The disclo2 sures required under subsections (a) and (b) with respect

3 to any account shall include the following information:

4 ‘‘(1) Any annual rate of simple interest.

5 ‘‘(2) The frequency with which interest will be

6 compounded and credited.

7 ‘‘(d) NO REGULATIONS AUTHORIZED.—No regulations

8 may be prescribed with respect to this section by the Board

9 or any agency referred to in this title, including any regula10 tion to define any terms used in this section.’’.

11 (d) DISCLOSURE OF CHANGE IN TERMS.—Section 265

12 of the Truth in Savings Act (12 U.S.C. 4304) is amended

13 to read as follows:

14 ‘‘SEC. 265. DISCLOSURE OF CHANGE IN TERMS.

15 ‘‘If any change is made in any item required to be

16 disclosed under section 264, all account holders who may

17 be affected by such change shall be notified by mail and

18 provided with a description of such change at least 30 days

19 before the effective date of the change.’’.

20 (e) REPEAL OF SECTIONS.—Sections 266, 268, 271,

21 and 273 of the Truth in Savings Act (12 U.S.C. 4304, 4305,

22 4307, 4310, and 4312, respectively) are hereby repealed.

23 (f) REDESIGNATION OF SECTIONS.—Section 267, 270,

24 272 of the Truth in Savings Act (12 U.S.C. 4306, 4309,
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1 and 4311) are redesignated as sections 266, 268, and 269,

2 respectively.

3 (g) REDESIGNATION AND AMENDMENT OF SECTION

4 269.—Section 269 of the Truth in Savings Act (12 U.S.C.

5 4308) (as determined before the redesignation made by sub6 section (f) of this section) is amended to read as follows:

7 ‘‘SEC. 267. REGULATIONS.

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

9 with each agency referred to in section 268(a) and public

10 notice and opportunity for comment, shall prescribe regula11 tions to carry out the purpose and provisions of this sub12 title.

13 ‘‘(b) EFFECTIVE DATE OF REGULATIONS.—The provi14 sions of this subtitle shall not apply with respect to any

15 depository institution before the effective date of regulations

16 prescribed by the Board under this subsection.’’.

17 (h) REDESIGNATION AND AMENDMENT OF SECTION

18 274.—Section 274 of the Truth in Savings Act (12 U.S.C.

19 4313) is amended to read as follows:

20 ‘‘SEC. 270. DEFINITIONS.

21 ‘‘For the purposes of this subtitle, the following defini22 tions shall apply:

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

24 account intended for use by and generally used by a
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1 consumer primarily for personal, family, or household

2 purposes that is offered by a depository institution.

3 ‘‘(2) DEPOSIT BROKER.—The term ‘deposit

4 broker’—

5 ‘‘(A) has the meaning given to such term in

6 section 29(f)(1) of the Federal Deposit Insurance

7 Act; and

8 ‘‘(B) includes any person who solicits any

9 amount from any other person for deposit in an

10 insured depository institution.

11 ‘‘(3) DEPOSITORY INSTITUTION.—The term ‘de12 pository institution’—

13 ‘‘(A) means an institution described in

14 clause (i), (ii), (iii), (iv), (v), or (vi) of section

15 19(b)(1)(A) of the Federal Reserve Act; and

16 ‘‘(B) does not include nonautomated credit

17 unions which were not required to comply with

18 the requirements of this title as of the date of the

19 enactment of the Financial Institutions Regu20 latory Relief Act of 1995 pursuant to the deter21 mination of the National Credit Union Adminis22 tration Board.

23 ‘‘(4) INTEREST.—The term ‘interest’ includes

24 dividends paid with respect to share accounts which

25 are accounts within the meaning of paragraph (1).
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1 ‘‘(5) BOARD.—The term ‘Board’ means the

2 Board of Governors of the Federal Reserve System.’’.

3 (i) EFFECTIVE DATE.—

4 (1) IN GENERAL.—The amendments made by

5 this section shall take effect on the effective date of

6 regulations prescribed by the Board of Governors of

7 the Federal Reserve System to implement such

8 amendments.

9 (2) AUTHORITY TO ISSUE REGULATIONS.—Not10 withstanding paragraph (1), the Board of Governors

11 of the Federal Reserve System shall prescribe regula12 tions in accordance with the amendment made by

13 subsection (g).

14 (3) CONTINUED APPLICABILITY OF PROVISIONS

15 UNTIL EFFECTIVE DATE OF NEW REGULATIONS.—The

16 Truth in Savings Act, as in effect on the day before

17 the date of the enactment of this Act, shall continue

18 to apply on and after such date until the effective

19 date of the amendments to such Act under this sec20 tion.

21 SEC. 142. INFORMATION SHARING.

22 Section 18 of the Federal Deposit Insurance Act (12

23 U.S.C. 1828) is amended by adding at the end the following

24 new subsection:

25 ‘‘(s) CUSTOMER ACCESS TO PRODUCTS.—
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1 ‘‘(1) IN GENERAL.—Notwithstanding any other

2 provision of law, any depository institution, or any

3 affiliate or subsidiary of any depository institution,

4 may share or exchange information or otherwise

5 transfer information between or among themselves

6 without any restriction or limitation if it is clearly

7 and conspicuously disclosed that the information may

8 be communicated among such persons and the

9 consumer is given the opportunity, before the time

10 that the information is initially communicated, to di11 rect that such information not be communicated

12 among such persons.

13 ‘‘(2) DEFINITION.—For purposes of this sub14 section, the term ‘information’ means any and all

15 data, records, or other information and material ob16 tained or maintained by any depository institution

17 or any affiliate or subsidiary thereof in the ordinary

18 course of its business that relates in any way to a

19 person (as such term is defined in section 603(b) of

20 the Fair Credit Reporting Act) who applies for,

21 maintains, or has maintained an account or credit

22 relationship with or applied for, purchased or ob23 tained other products or services from any depository

24 institution or any affiliate or subsidiary of any de25 pository institution, regardless of the source of man-
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1 ner in which the information is obtained or fur2 nished.

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

4 institution, or any affiliate or subsidiary of any de5 pository institution, relying on this subsection shall

6 not be deemed to be a consumer reporting agency,

7 user, or third party, and the information itself shall

8 not constitute a consumer report, within the meaning

9 of the Fair Credit Reporting Act or other similar

10 law.’’.

11 SEC. 143. ELECTRONIC FUND TRANSFER ACT CLARIFICA12 TION.

13 (a) DEFINITION OF ACCEPTED CARD OR OTHER

14 MEANS OF ACCESS.—Section 903(1) of the Electronic Fund

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

16 before the semicolon at the end the following: ‘‘, but such

17 term does not include a card, device, or computer that a

18 person may use to pay for transactions through use of value

19 stored on, or assigned to, the card, device, or computer itself,

20 except for those transactions where such card, device, or

21 computer is actually used to access an account to effect such

22 transaction’’.

23 (b) DEFINITION OF ACCOUNT.—Section 903(2) of the

24 Electronic Fund Transfer Act (15 U.S.C. 1693a(2)) is

25 amended by inserting before the semicolon at the end the
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1 following: ‘‘and does not include any value which is stored

2 on, or assigned to, a card, device, or computer itself that

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

4 stored value’’.

5 SEC. 144. LIMIT ON RESTITUTION FOR TRUTH IN LENDING

6 VIOLATIONS IF SAFETY AND SOUNDNESS OF

7 VIOLATOR WOULD BE AFFECTED.

8 Section 108(e)(3)(A) of the Truth in Lending Act (15

9 U.S.C. 1607(e)(3)(A)) is amended—

10 (1) by striking ‘‘in any such case, the agency

11 may require’’ and inserting ‘‘in any such case, the

12 agency may (i) require’’;

13 (2) by striking ‘‘, except that with respect to any

14 transaction consummated after the effective date of

15 section 608 of the Truth in Lending Simplification

16 and Reform Act, the agency shall’’ and inserting ‘‘;

17 or (ii)’’; and

18 (3) by striking ‘‘reasonable,’’ and inserting ‘‘rea19 sonable if, in the case of an agency referred to in

20 paragraph (1), (2), or (3) of subsection (a), the agen21 cy determines that a partial adjustment or the mak22 ing of partial payments over an extended period is

23 necessary to avoid causing the creditor to become

24 undercapitalized (as determined in accordance with
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1 regulations prescribed by such agency under section

2 38 of the Federal Deposit Insurance Act);’’.

3 Subtitle D—Equal Credit

4 Opportunity Act Amendments

5 SEC. 151. SHORT TITLE.

6 This subtitle may be cited as the ‘‘Equal Credit Oppor7 tunity Act Amendments of 1995’’.

8 SEC. 152. FINDINGS AND PURPOSE.

9 (a) FINDINGS.—The Congress finds that both the

10 Equal Credit Opportunity Act (15 U.S.C. 1691, et seq.) and

11 the Fair Credit Reporting Act (15 U.S.C. 1681, et seq.) con12 tain requirements that applicants for consumer credit be

13 given certain information in the event that adverse action

14 is taken on the application. These requirements differ in

15 both scope and content and for that reason are confusing

16 to both the consumer who receives the information and the

17 party required to furnish the information.

18 (b) PURPOSE.—It is the purpose of this subtitle to

19 combine and simplify the adverse action notification re20 quirements of the Equal Credit Opportunity Act and the

21 Fair Credit Reporting Act regarding applications for

22 consumer credit and to make the information that is re23 quired to be furnished more understandable.
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1 SEC. 153. EQUAL CREDIT OPPORTUNITY ACT AMENDMENTS.

2 (a) NOTICE OF ADVERSE ACTION.—Section

3 701(d)(2)(B) of the Equal Credit Opportunity Act (15

4 U.S.C. 1691(d)(2)(B)) is amended to read as follows:

5 ‘‘(B) giving written notification of adverse

6 action which discloses—

7 ‘‘(i) the applicant’s right to a state8 ment of reasons within 30 days after receipt

9 by the creditor of a request made within 60

10 days after such notification;

11 ‘‘(ii) if credit is denied or the charge

12 for such credit is increased either wholly or

13 partly because of information contained in

14 a consumer report from a consumer report15 ing agency—

16 ‘‘(I) that fact and the name, ad17 dress, and telephone number of the

18 consumer reporting agency making the

19 report;

20 ‘‘(II) the consumer’s right to ob21 tain, under section 612, a free copy of

22 a consumer report on the consumer,

23 from the consumer reporting agency re24 ferred to in subclause (I) within the

25 30-day period provided under such sec26 tion; and
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1 ‘‘(III) the consumer’s right to dis2 pute, under section 611, with a

3 consumer reporting agency the accu4 racy or completeness of any informa5 tion in a consumer report furnished by

6 the agency.

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

8 for credit is increased either wholly or part9 ly because of information obtained from a

10 person other than a consumer reporting

11 agency bearing upon the consumer’s credit

12 worthiness, credit standing, credit capacity,

13 character, general reputation, personal

14 characteristics or mode of living, that fact

15 and the right to receive disclosure of the na16 ture of the information so received, within

17 a reasonable period of time, upon the con18 sumer’s written request for information

19 within 60 days after learning of such ad20 verse action; and

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

22 from which such notification may be ob23 tained.

24 Such statement of reasons may be given orally if

25 the written notification advises the applicant of
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1 his right to have the statement of reasons con2 firmed in writing on written request.’’.

3 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec4 tion 701(d)(3) of the Equal Credit Opportunity Act (15

5 U.S.C. 1691(d)(3)) is amended by striking the period at

6 the end and adding the following: ‘‘and, to the extent appli7 cable, the name, address, and telephone number of the

8 consumer reporting agency identified in accordance with

9 the requirements of subsection (d)(3)(ii) and a statement

10 of the right to obtain disclosure of the nature of the informa11 tion upon which adverse action was taken as required by

12 such subsection.’’.

13 (c) REASONABLE PROCEDURES TO ASSURE COMPLI14 ANCE.—Section 706 of the Equal Credit Opportunity Act

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

16 following new subsection:

17 ‘‘(l) REASONABLE PROCEDURES TO ASSURE COMPLI18 ANCE.—No person shall be held liable for any violation of

19 subsection 701(d) if such person shows by a preponderance

20 of the evidence that at the time of the alleged violation the

21 person maintained reasonable procedures to assure compli22 ance with the provisions of the subsection.’’.
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1 SEC. 154. FAIR CREDIT REPORTING ACT AMENDMENTS.

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

3 (15 U.S.C. 1681m(a)) is amended by striking ‘‘credit or’’

4 each place such term appears.

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

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

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

8 (c) Section 615(b) (as redesignated by this section) of

9 the Fair Credit Reporting Act (15 U.S.C. 1681m(b)) is

10 amended by striking ‘‘subsections (a) and (b)’’ and insert11 ing ‘‘subsection (a)’’.

12 SEC. 155. INCENTIVES FOR SELF-TESTING.

13 (a) EQUAL CREDIT OPPORTUNITY.—

14 (1) IN GENERAL.—The Equal Credit Oppor15 tunity Act (15 U.S.C. 1691 et seq.) is amended by in16 serting after section 704 the following new section:

17 ‘‘SEC. 704A. INCENTIVES FOR SELF-TESTING AND SELF-COR18 RECTION.

19 ‘‘(a) IN GENERAL.—If a creditor—

20 ‘‘(1) conducts, or authorizes an independent

21 third party to conduct, a self-test of the creditor’s

22 lending or any part of the creditor’s lending oper23 ations in order to determine the level or effectiveness

24 of compliance with this title by the creditor; and
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1 ‘‘(2) has identified discriminatory practices and

2 has taken or is taking appropriate corrective actions

3 to address the discrimination,

4 any report or results of such a self-test may not be obtained

5 or used by any applicant, department, or agency in any

6 proceeding or civil action brought under this title.

7 ‘‘(b) RESULTS OF SELF-TESTING.—No provision of

8 this section shall be construed as preventing an applicant,

9 department, or agency from obtaining and using the results

10 of any self-testing in any proceeding or civil action brought

11 under this title if—

12 ‘‘(1) the creditor or any other entity conducted

13 such activity at the request of a department or agen14 cy;

15 ‘‘(2) the creditor or any other entity, or any per16 son acting on behalf of the creditor or other entity—

17 ‘‘(A) voluntarily releases or discloses all, or

18 any part of, such results; or

19 ‘‘(B) refers to or describes such results as a

20 defense to charges of unlawful discrimination

21 against such creditor, person, or entity; or

22 ‘‘(3) the results are sought by the applicant, de23 partment, or agency by means of a discovery request

24 for the purposes of determining an appropriate pen25 alty or remedy for a violation of this title.
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1 ‘‘(c) REGULATIONS.—The appropriate Federal depart2 ment or agency shall prescribe regulations, after notice and

3 opportunity for comment, which determine what types of

4 ‘self-tests’ are sufficiently extensive so as to constitute a de5 termination of the level or effectiveness of a creditor’s com6 pliance with this title.’’.

7 (2) REFERRALS TO THE ATTORNEY GENERAL.—

8 Section 706(g) of the Equal Credit Opportunity Act

9 (15 U.S.C. 1691e(g)) is amended—

10 (A) by striking ‘‘(g) The agencies’’ and in11 serting ‘‘(g) REFERRALS TO THE ATTORNEY

12 GENERAL.—

13 ‘‘(1) IN GENERAL.—The agencies’’; and

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

15 paragraphs:

16 ‘‘(2) LIMITATION ON REFERRALS OF SELF-TEST17 ING RESULTS.—

18 ‘‘(A) IN GENERAL.—No agency shall be re19 quired to refer any report or results of a self-test

20 relating to any creditor to the Attorney General

21 if the creditor—

22 ‘‘(i) has already identified discrimina23 tory practices as the result of self-testing in24 stituted by the creditor to determine compli25 ance with this title; and
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1 ‘‘(ii) has taken or is taking appro2 priate corrective actions to address the dis3 crimination.

4 ‘‘(3) ENFORCEMENT UNDER OTHER LAWS.—No

5 provision of this section shall be construed as limiting

6 the authority of the agency to enforce the provisions

7 of this title under any other provision of law.’’.

8 (3) REFERRALS TO HUD.—Section 706(k) of the

9 Equal Credit Opportunity Act (15 U.S.C. 1691e(k))

10 is amended by adding at the end the following: ‘‘No

11 such agency shall be required to notify the Secretary

12 of Housing and Urban Development or the applicant

13 that the agency has reason to believe that a violation

14 of this title or the Fair Housing Act occurred if the

15 reason is based on a result of self-testing instituted by

16 the creditor to determine compliance with this title,

17 and the creditor has already identified the possible

18 violation and has taken or is taking appropriate cor19 rective actions to address the possible violation. No

20 provisions of this section shall be construed as limit21 ing the authority of the agency to enforce the provi22 sions of this title under any other provision of law.’’.

23 (4) CLERICAL AMENDMENT.—The table of sec24 tions for title VII of the Consumer Credit Protection
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1 Act is amended by inserting after the item relating to

2 section 704 the following new item:

‘‘704A. Incentives for self-testing and self-correction.’’.

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

4 U.S.C. 3601 et seq.) is amended by inserting after section

5 814 the following new section:

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

7 ‘‘(a) IN GENERAL.—If any person—

8 ‘‘(1) conducts, or authorizes an independent

9 third party to conduct, a self-test of that person’s resi10 dential real estate related lending activities, or any

11 part of such activities, in order to determine the level

12 or effectiveness of compliance with this title by the

13 person; 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 obtained

18 or used by any aggrieved person, complainant, department,

19 or agency in any proceeding or civil action brought under

20 this title.

21 ‘‘(b) RESULTS OF SELF-TESTING.—No provision of

22 this section shall be construed as preventing an aggrieved

23 person, complainant, department, or agency from obtaining

24 and using the results of any self-testing as described in sub-
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1 section (a) in any proceeding or civil action brought under

2 this title if—

3 ‘‘(1) the creditor or any other entity conducted

4 such activity at the request of a department or agen5 cy;

6 ‘‘(2) the creditor or any other entity, or any per7 son acting on behalf of the creditor or other entity—

8 ‘‘(A) voluntarily releases or discloses all, or

9 any part of, such results; or

10 ‘‘(B) refers to or describes such results as a

11 defense to charges of unlawful discrimination

12 against such creditor, person, or entity; or

13 ‘‘(3) the results are sought by the aggrieved per14 son, complainant, department, or agency by means of

15 a discovery request for the purposes of determining an

16 appropriate penalty or remedy for a violation of this

17 title.

18 ‘‘(c) REGULATIONS.—The appropriate Federal depart19 ment or agency shall prescribe regulations, after notice and

20 opportunity for comment, which determine what types of

21 ‘self-tests’ are sufficiently extensive so as to constitute a de22 termination of the level or effectiveness of a creditor’s com23 pliance with this title.’’.
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1 SEC. 156. CREDIT SCORING SYSTEMS.

2 Section 701 of the Equal Credit Opportunity Act (15

3 U.S.C. 1691) is amended by adding at the end the following

4 new subsection:

5 ‘‘(f) CREDIT SCORING SYSTEM.—

6 ‘‘(1) IN GENERAL.—A creditor shall be deemed to

7 be in compliance with subsection (a) with respect to

8 any credit decision made by the creditor which is

9 based solely on the use of an empirically derived, de10 monstrably and statistically sound, credit scoring sys11 tem (as defined by the Board in regulations pre12 scribed under this title) if such system—

13 ‘‘(A) does not utilize any category protected

14 under subsection (a);

15 ‘‘(B) does not use as a factor in such system

16 any criterion which is so directly associated with

17 such a category as to be the functional equivalent

18 of such a category; and

19 ‘‘(C) does not use as a factor in such system

20 any criterion that has a disparate impact on a

21 category protected under subsection (a) unless

22 use of the criterion is justified by business neces23 sity and there is no less discriminatory alter24 native available.

25 ‘‘(2) AGE AS A FACTOR.—No provision of this

26 subsection shall be construed as precluding a creditor
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1 from using age as a factor in a credit scoring system

2 under paragraph (1) to the extent otherwise permitted

3 under this title.’’.

4 SEC. 157. CONSULTATION BY ATTORNEY GENERAL RE5 QUIRED IN NONREFERRAL CASES.

6 (a) EQUAL CREDIT OPPORTUNITY.—Section 706(h) of

7 the Equal Credit Opportunity Act (15 U.S.C. 1691e(h)) is

8 amended by adding at the end the following new sentence:

9 ‘‘Before bringing a civil action against any creditor de10 scribed in paragraph (1), (2), or (3) of section 704(a), the

11 Attorney General shall consult with the appropriate agency

12 under such paragraph.’’.

13 (b) FAIR HOUSING ACT.—Section 814(a) of the Fair

14 Housing Act (42 U.S.C. 3614(a)) is amended by adding

15 at the end the following new sentence: ‘‘Before bringing a

16 civil action under the preceding sentence against any per17 son or group of persons described in paragraph (1), (2),

18 or (3) of section 704(a) of the Equal Credit Opportunity

19 Act with respect to a violation of 805(a) of this title, the

20 Attorney General shall consult with the appropriate agency

21 under such paragraph.’’.

22 SEC. 158. EFFECTIVE DATE.

23 (a) IN GENERAL.—Except with respect to the require24 ments of subsection (b), this Act shall take effect at the end
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1 of the 270-day period beginning on the date of the enact2 ment of this Act.

3 (b) IMPLEMENTING REGULATIONS.—The Board of

4 Governors of the Federal Reserve System shall prescribe reg5 ulations to implement this Act and such regulations shall

6 be published in final form before the end of the 180-day

7 period beginning on the date of the enactment of this Act.

8 Subtitle E—Consumer Leasing Act

9 Amendments

10 SEC. 161. SHORT TITLE.

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

12 Act Amendments of 1995’’.

13 SEC. 162. CONGRESSIONAL FINDINGS AND DECLARATION

14 OF PURPOSE.

15 (a) FINDINGS.—The Congress finds the following:

16 (1) Competition among the various financial in17 stitutions and other firms engaged in the business of

18 consumer leasing is greatest when there is informed

19 use of leasing. The informed use of leasing results

20 from an awareness of the cost of leasing by consumers.

21 (2) There has been a continued trend toward

22 leasing automobiles and other durable goods for

23 consumer use as an alternative to installment credit

24 sales and that leasing product advances have occurred

25 such that lessors have been unable to provide consist-
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1 ent industry-wide disclosures to fully account for the

2 competitive progress that has occurred.

3 (b) PURPOSES.—

4 (1) It is the purpose of this subtitle to assure a

5 simple, meaningful disclosure of leasing terms so that

6 the consumer will be able to compare more readily the

7 various leasing terms available to the consumer and

8 avoid the uninformed use of leasing, and to protect

9 the consumer against inaccurate and unfair leasing

10 practices.

11 (2) To provide for adequate cost disclosures that

12 reflect the marketplace without impairing competition

13 and the development of new leasing products, it is the

14 purpose of this subtitle to provide the Board with the

15 regulatory authority to assure a simplified, meaning16 ful definition and disclosure of the terms of certain

17 leases of personal property for personal, family, or

18 household purposes so as to enable the lessee to com19 pare more readily the various lease terms available to

20 the lessee, enable comparison of lease terms with cred21 it terms where appropriate and to assure meaningful

22 and accurate disclosures of lease terms in advertise23 ments.
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1 SEC. 163. REGULATIONS.

2 (a) IN GENERAL.—Chapter 5 of title I of the Consumer

3 Credit Protection Act (15 U.S.C. 1601 et seq.) is amended

4 by adding at the end the following new section:

5 ‘‘SEC. 187. REGULATIONS.

6 ‘‘(a) REGULATIONS AUTHORIZED.—

7 ‘‘(1) IN GENERAL.—The Board shall write regu8 lations or staff commentary, if appropriate, to update

9 and clarify the requirements and definitions for lease

10 disclosures, contracts, and any other specific issues re11 lated to consumer leasing which would carry out the

12 purposes of this chapter, to prevent any circumven13 tion of the chapter, and to facilitate compliance with

14 the requirements of the chapter.

15 ‘‘(2) CLASSIFICATIONS, ADJUSTMENTS.—The reg16 ulations prescribed under paragraph (1) may contain

17 classifications and differentiations and may provide

18 for adjustments and exceptions for any class of trans19 action.

20 ‘‘(b) MODEL DISCLOSURES.—The Board shall publish

21 model disclosure forms and clauses to facilitate compliance

22 with the disclosure requirements and to aid the consumer

23 in understanding the transaction. In designing forms, the

24 Board shall consider the use by lessors of data processing

25 or similar automated equipment. Use of the models shall

26 be optional. A lessor who properly uses the material aspects
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1 of the models shall be deemed to be in compliance with the

2 disclosure requirements.

3 ‘‘(c) EFFECTIVE DATES.—

4 ‘‘(1) IN GENERAL.—Any regulation of the Board,

5 or any amendment or interpretation of any regula6 tion of the Board, that requires a disclosure different

7 from the disclosures previously required shall have an

8 effective date of the October 1 that follows the date of

9 promulgation by at least 6 months.

10 ‘‘(2) LONGER PERIOD.—The Board may, in the

11 Board’s discretion, lengthen the period of time re12 ferred to in paragraph (1) to permit lessors to adjust

13 their forms to accommodate new requirements.

14 ‘‘(3) SHORTER PERIOD.—The Board may also

15 shorten the period of time referred to in paragraph

16 (1) if the Board makes a specific finding that such

17 action is necessary to comply with the findings of a

18 court or to prevent unfair or deceptive practices.

19 ‘‘(4) COMPLIANCE BEFORE EFFECTIVE DATE.—

20 Lessors may comply with any newly promulgated dis21 closure requirement before the effective date of such re22 quirement.’’.

23 (b) CLERICAL AMENDMENT.—The table of sections for

24 chapter 5 of title I of the Consumer Credit Protection Act
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1 (15 U.S.C. 1601 et seq.) is amended by inserting after the

2 item relating to section 186 the following new item:

‘‘187. Regulations.’’.

3 SEC. 164. CONSUMER LEASE ADVERTISING.

4 Section 184 of the Consumer Credit Protection Act (15

5 U.S.C. 1667c) is amended to read as follows:

6 ‘‘SEC. 184. CONSUMER LEASE ADVERTISING.

7 ‘‘(a) IN GENERAL.—If an advertisement for a

8 consumer lease states the amount of any payment or states

9 that any or no initial payment is required, the advertise10 ment must also clearly and conspicuously state the follow11 ing terms, as applicable:

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

13 ‘‘(2) The total of initial payments required at or

14 before consummation of the lease or delivery of the

15 property, whichever is later.

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

17 ‘‘(4) The number, amounts, and timing of sched18 uled payments.

19 ‘‘(5) For a lease in which the consumer’s liabil20 ity at the end of the lease term is based on the antici21 pated residual value of the property, that an extra

22 charge may be imposed at the end of the lease term.

23 ‘‘(b) ADVERTISING MEDIUM NOT LIABLE.—Any owner

24 or personnel of any medium in which an advertisement ap-
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1 pears or through which it is disseminated shall not be liable

2 under this section.’’.

3 SEC. 165. STATUTORY PENALTIES.

4 Section 185(a) of the Consumer Credit Protection Act

5 (15 U.S.C. 1667d(a)) is amended by adding at the end the

6 following new sentence: ‘‘Notwithstanding the preceding

7 sentence, a creditor shall only have liability determined

8 under section 130(a)(2) for failing to comply with the re9 quirements of paragraph (2), (8), (9), or (10) of section 182

10 or for failing to comply with disclosure requirements under

11 State law for any term which the Board has determined

12 to be substantially the same in meaning under section 186

13 as any of the terms referred to in section 182.’’.

14 Subtitle F—Federal Home Loan

15 Bank Amendments

16 SEC. 171. APPLICATION FOR MEMBERSHIP IN THE FHLB

17 SYSTEM.

18 Section 4(b) of the Federal Home Loan Bank Act (12

19 U.S.C. 1424) is amended to read as follows:

20 ‘‘(b) MEMBERSHIP BASED ON CONVENIENCY.—An in21 stitution eligible to become a member of a Federal home

22 loan bank under this section may become a member by sub23 mitting the institution’s application for membership to the

24 bank in the district where the applicant’s principal place

25 of business is located. An application for membership shall
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1 be approved by the bank if, in the judgment of the bank,

2 the applicant meets the criteria for eligibility contained in

3 this section. An institution eligible to become a member

4 under this section may apply for membership in an adjoin5 ing district, if appropriate for the convenience of the insti6 tution and then only with the approval of the Board.’’.

7 SEC. 172. FEDERAL HOME LOAN BANK EXTERNAL AUDI8 TORS.

9 Section 11(j) of the Federal Home Loan Bank Act (12

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

11 ‘‘(j) AUDITS.—

12 ‘‘(1) Notwithstanding any other provision of law,

13 audits by the Comptroller General of the United

14 States of the financial transactions of a Federal home

15 loan bank shall not be limited to periods during

16 which Government capital has been invested in the

17 bank. The provisions of section 9107(c)(2) and

18 9108(d)(1) of title 31, of such Code, shall not apply

19 to any Federal home loan bank.

20 ‘‘(2) Notwithstanding any other provision of law,

21 the Board shall not participate in the hiring of an ex22 ternal auditor by the banks; except, that the Board

23 may establish requirements for external audit con24 tracts and, that all 12 banks shall contract for an an25 nual audit with a single provider.’’.
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1 TITLE II—STREAMLINING

2 GOVERNMENT REGULATIONS

3 Subtitle A—Regulatory Approval

4 Issues

5 SEC. 201. STREAMLINED NONBANKING ACQUISITIONS BY

6 WELL CAPITALIZED AND WELL MANAGED

7 BANKING ORGANIZATIONS.

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

9 Holding Company Act of 1956 (12 U.S.C. 1843(j) is

10 amended—

11 (1) in paragraph (1)(A), by striking ‘‘No’’ and

12 inserting ‘‘Except as provided in paragraph (3), no’’;

13 and

14 (2) by adding at the end the following new para15 graphs:

16 ‘‘(3) NO NOTICE REQUIRED FOR CERTAIN TRANS17 ACTIONS.—No notice under paragraph (1) or sub18 sections (c)(8) or (a)(2)(B) is required for a proposal

19 by a bank holding company to engage in any activity

20 or acquire the shares or assets of any company if the

21 proposal qualifies under paragraph (4).

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

23 proposal qualifies under this paragraph if all of the

24 following criteria are met:
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1 ‘‘(A) FINANCIAL CRITERIA.—Both before

2 and immediately after the proposed trans3 action—

4 ‘‘(i) the acquiring bank holding com5 pany is well capitalized;

6 ‘‘(ii) the lead insured depository insti7 tution of such holding company is well cap8 italized;

9 ‘‘(iii) well capitalized insured deposi10 tory institutions control at least 80 percent

11 of the aggregate total risk-weighted assets of

12 insured depository institutions controlled by

13 such holding company; and

14 ‘‘(iv) no insured depository institution

15 controlled by such holding company is

16 undercapitalized.

17 ‘‘(B) MANAGERIAL CRITERIA.—

18 ‘‘(i) WELL MANAGED.—At the time of

19 the transaction, the acquiring bank holding

20 company, its lead insured depository insti21 tution, and insured depository institutions

22 that control at least 90 percent of the aggre23 gate total risk-weighted assets of insured de24 pository institutions controlled by such

25 holding company are well managed.
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1 ‘‘(ii) LIMITATION ON POORLY MANAGED

2 INSTITUTIONS.—Except with respect to in3 sured depository institutions described in

4 paragraph (6), no insured depository insti5 tution controlled by the acquiring bank

6 holding company has received 1 of the 2

7 lowest composite ratings at the later of the

8 institution’s most recent examination or

9 subsequent review.

10 ‘‘(C) ACTIVITIES PERMISSIBLE.—Following

11 consummation of the proposal, the bank holding

12 company engages directly or through a subsidi13 ary solely in—

14 ‘‘(i) activities that are permissible

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

16 the Board by regulation or order there17 under, subject to all of the restrictions,

18 terms and conditions of such subsection and

19 such regulation or order; and

20 ‘‘(ii) such other activities as are other21 wise permissible under this section, subject

22 to the restrictions, terms and conditions, in23 cluding any prior notice or approval re24 quirements, provided in this section.

25 ‘‘(D) SIZE OF ACQUISITION.—
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1 ‘‘(i) ASSET SIZE.—The book value of

2 the total assets to be acquired does not ex3 ceed 10 percent of the consolidated total

4 risk-weighted assets of the acquiring bank

5 holding company; and

6 ‘‘(ii) CONSIDERATION.—The gross con7 sideration to be paid for the securities or

8 assets does not exceed 15 percent of the con9 solidated Tier 1 capital of the acquiring

10 bank holding company.

11 ‘‘(E) NOTICE NOT OTHERWISE WAR12 RANTED.—For proposals described in paragraph

13 (5)(B), the Board has not, before the conclusion

14 of the period provided in paragraph (5)(B), ad15 vised the bank holding company that a notice

16 under paragraph (1) is required.

17 ‘‘(F) COMPLIANCE CRITERION.—During the

18 12-month period ending on the date on which the

19 bank holding company proposes to commence an

20 activity or acquisition, no administrative en21 forcement action has been commenced, and no

22 cease and desist order has been issued pursuant

23 to section 8 of the Federal Deposit Insurance

24 Act, against the bank holding company or any

25 depository institution subsidiary of the holding
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1 company and no such enforcement action, order,

2 or other administrative enforcement proceeding

3 is pending as of such date.

4 ‘‘(5) NOTIFICATION.—

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

7 that qualifies under paragraph (4) and that pro8 poses to engage de novo, directly or through a

9 subsidiary, in any activity that is permissible

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

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

13 provide written notification to the Board no

14 later than ten business days after commencing

15 the activity.

16 ‘‘(B) ACTIVITIES PERMITTED BY ORDER

17 AND ACQUISITIONS.—

18 ‘‘(i) IN GENERAL.—At least 12 business

19 days before commencing any activity pursu20 ant to paragraph (3) (other than an activ21 ity described in subparagraph (A)) or ac22 quiring shares or assets of any company

23 pursuant to paragraph (3), the bank hold24 ing company shall provide written notice of

25 the proposal to the Board, unless the Board
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1 determines that no notice or a shorter notice

2 period is appropriate.

3 ‘‘(ii) DESCRIPTION OF ACTIVITIES AND

4 TERMS.—A notification under this subpara5 graph shall include a description of the pro6 posed activities and the terms of any pro7 posed acquisition.

8 ‘‘(6) RECENTLY ACQUIRED INSTITUTIONS.—In9 sured depository institutions which have been ac10 quired by a bank holding company during the 12-

11 month period preceding the date on which the com12 pany proposes to commence an activity or acquisition

13 pursuant to paragraph (3) may be excluded for pur14 poses of paragraph (4)(B)(ii) if—

15 ‘‘(A) the bank holding company has devel16 oped a plan for the institution to restore the cap17 ital and management of the institution which is

18 acceptable to the appropriate Federal banking

19 agency; and

20 ‘‘(B) all such insured depository institu21 tions represent, in the aggregate, less than 10

22 percent of the aggregate total risk-weighted assets

23 of all insured depository institutions controlled

24 by the bank holding company.
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1 ‘‘(7) ADJUSTMENT OF PERCENTAGES.—The

2 Board may, by regulation, adjust the percentages and

3 the manner in which the percentages of insured depos4 itory institutions are calculated under paragraph

5 (4)(B)(i), (4)(D), or paragraph (6)(B) if the Board

6 determines that any such adjustment is consistent

7 with safety and soundness and the purposes of this

8 Act.’’.

9 (b) DEFINITIONS.—Section 2(o) of the Bank Holding

10 Company Act of 1956 (12 U.S.C. 1841(o)) is amended—

11 (1) by striking paragraph (1) and inserting the

12 following new paragraph:

13 ‘‘(1) CAPITAL TERMS.—

14 ‘‘(A) INSURED DEPOSITORY INSTITU15 TIONS.—With respect to insured depository insti16 tutions, the terms ‘well-capitalized’, ‘adequately

17 capitalized’, and ‘uncapitalized’ have the mean18 ing given those terms in section 38(b) of the Fed19 eral Deposit Insurance Act.

20 ‘‘(B) BANK HOLDING COMPANY.—

21 ‘‘(i) ADEQUATELY CAPITALIZED.—The

22 term ‘adequately capitalized’ means a level

23 of capitalization which meets or exceeds all

24 applicable Federal regulatory capital stand25 ards.
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1 ‘‘(ii) WELL CAPITALIZED.—A bank

2 holding company is ‘well capitalized’ if it

3 meets the required capital levels for well

4 capitalized bank holding companies estab5 lished by the Board.

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

7 ‘Tier 1’ and ‘risk-weighted assets’ have the mean8 ing given those terms in the capital guidelines or

9 regulations established by the Board for bank

10 holding companies.’’; and

11 (2) by adding at the end the following new para12 graphs:

13 ‘‘(8) LEAD INSURED DEPOSITORY INSTITU14 TIONS.—

15 ‘‘(A) IN GENERAL.—The term ‘lead insured

16 depository institution’ means the largest insured

17 depository institution controlled by the bank

18 holding company at any time, based on a com19 parison of the average total risk-weighted assets

20 controlled by each insured depository institution

21 during the previous 12-month period.

22 ‘‘(B) BRANCH OR AGENCY.—For purposes of

23 this paragraph and section 4(j)(4), the term ‘in24 sured depository institution’ shall also include
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1 any branch or agency operated in the United

2 States by a foreign bank.

3 ‘‘(9) WELL MANAGED.—The term ‘well managed’

4 means—

5 ‘‘(A) in the case of any company or deposi6 tory institution which receives examinations, the

7 achievement of—

8 ‘‘(i) a CAMEL composite rating of 1

9 or 2 (or an equivalent rating under an

10 equivalent rating system) in connection

11 with the most recent examination or subse12 quent review of such company or institu13 tion; and

14 ‘‘(ii) at least a satisfactory rating for

15 management, if such rating is given; or

16 ‘‘(B) in the case of a company or depository

17 institution that has not received an examination

18 rating, the existence and use of managerial re19 sources which the Board determines are satisfac20 tory.’’.
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1 SEC. 202. STREAMLINED BANK ACQUISITIONS BY WELL CAP2 ITALIZED AND WELL MANAGED BANKING OR3 GANIZATIONS.

4 Section 3 of the Bank Holding Company Act (12

5 U.S.C. 1842) is amended by adding at the end the following

6 new subsection:

7 ‘‘(h) NO APPROVAL REQUIRED FOR CERTAIN TRANS8 ACTIONS.—

9 ‘‘(1) IN GENERAL.—Notwithstanding paragraph

10 (3) or (5) of subsection (a) and subject to paragraphs

11 (5) and (6), an acquisition of shares by a registered

12 bank holding company, or a merger or consolidation

13 between registered bank holding companies, shall be

14 deemed approved at the conclusion of the period speci15 fied in subparagraph (G) if all of the following condi16 tions have been met:

17 ‘‘(A) FINANCIAL AND MANAGERIAL CRI18 TERIA.—

19 ‘‘(i) WELL CAPITALIZED BANK HOLD20 ING COMPANY.—Both at the time of and im21 mediately after the proposed transaction,

22 the acquiring bank holding company is well

23 capitalized.

24 ‘‘(ii) WELL CAPITALIZED LEAD IN25 SURED DEPOSITORY INSTITUTION.—Both at

26 the time of and immediately after the pro-
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1 posed transaction, the lead insured deposi2 tory institution of the acquiring bank hold3 ing company is well capitalized.

4 ‘‘(iii) CAPITAL OF OTHER INSURED DE5 POSITORY INSTITUTIONS.—At the time of

6 the transaction, well capitalized insured de7 pository institutions control at least 80 per8 cent of the aggregate total risk-weighted as9 sets of insured depository institutions con10 trolled by the acquiring bank holding com11 pany.

12 ‘‘(iv) NO UNDERCAPITALIZED INSURED

13 DEPOSITORY INSTITUTIONS.—At the time of

14 the transaction, no insured depository insti15 tution controlled by the acquiring bank

16 holding company is undercapitalized.

17 ‘‘(v) WELL MANAGED.—

18 ‘‘(I) IN GENERAL.—At the time of

19 the transaction, the acquiring bank

20 holding company, its lead insured de21 pository institution, and insured de22 pository institutions that control at

23 least 90 percent of the aggregate total

24 risk-weighted assets of insured deposi-
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1 tory institutions controlled by such

2 holding company are well managed.

3 ‘‘(II) NO POORLY MANAGED INSTI4 TUTIONS.—Except with respect to in5 sured depository institutions described

6 in paragraph (2), no insured deposi7 tory institution controlled by the ac8 quiring bank holding company has re9 ceived 1 of the 2 lowest composite rat10 ings at the later of the institution’s

11 most recent examination or subsequent

12 review.

13 ‘‘(B) NO UNSATISFACTORY CRA RATINGS.—

14 Except with respect to insured depository insti15 tutions described in paragraph (3), no insured

16 depository institution controlled by the acquiring

17 bank holding company has received a ‘needs to

18 improve’ or ‘substantial noncompliance’ compos19 ite rating as a result of the institution’s most re20 cent examination under the Community Rein21 vestment Act of 1977.

22 ‘‘(C) COMPETITIVE CRITERIA.—Consumma23 tion of the proposal complies with guidelines es24 tablished by the Board by regulation, after con25 sultation with the Attorney General, that iden-
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1 tify proposals that are not likely to have a sig2 nificantly adverse effect on competition in any

3 relevant market.

4 ‘‘(D) SIZE OF ACQUISITION.—

5 ‘‘(i) ASSET SIZE.—The book value of

6 the total assets to be acquired does not ex7 ceed 10 percent of the consolidated total risk

8 weighted assets of the acquiring bank hold9 ing company.

10 ‘‘(ii) CONSIDERATION.—The gross con11 sideration to be paid for the securities or

12 assets does not exceed 15 percent of the con13 solidated Tier 1 capital of the acquiring

14 bank holding company.

15 ‘‘(E) INTERSTATE ACQUISITIONS.—Board

16 approval of the transaction is not prohibited

17 under subsection (d).

18 ‘‘(F) COMPLIANCE CRITERION.—During the

19 12-month period ending on the date of the trans20 action, no administrative enforcement action has

21 been commenced, and no cease and desist order

22 has been issued pursuant to section 8 of the Fed23 eral Deposit Insurance Act, against any bank

24 holding company involved in the transaction or

25 any depository institution subsidiary of any
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1 such holding company and no such enforcement

2 action, order, or other administrative enforce3 ment proceeding is pending as of such date.

4 ‘‘(G) OTHER CONSIDERATIONS.—Board ap5 proval of the transaction is not prohibited under

6 subsection (c)(3).

7 ‘‘(H) NOTIFICATION.—The acquiring bank

8 holding company provides written notice of the

9 transaction, including a description of the terms

10 of the transaction, to the Board and the Attorney

11 General, simultaneously, at least 15 business

12 days (or such shorter period as permitted by the

13 Board) before the transaction is consummated.

14 ‘‘(I) NO BOARD DISAPPROVAL.—Before the

15 end of the 15-day period (or the shorter period)

16 referred to in subparagraph (H), the Board has

17 not required an application under subsection

18 (a).

19 ‘‘(2) SPECIAL RULE RELATING TO THE REQUIRE20 MENT FOR WELL MANAGED INSTITUTIONS.—Insured

21 depository institutions which have been acquired by a

22 bank holding company during the 12-month period

23 preceding the date of the transaction may be excluded

24 for purposes of paragraph (1)(A)(v)(II) if—
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1 ‘‘(A) the bank holding company has devel2 oped a plan for the institution to restore the cap3 ital and management of the institution which is

4 acceptable to the appropriate Federal banking

5 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 assets

9 of all insured depository institutions controlled

10 by the holding company.

11 ‘‘(3) SPECIAL RULE RELATING TO THE REQUIRE12 MENT FOR COMMUNITY INVESTMENT.—Insured deposi13 tory institutions acquired during the 12-month period

14 preceding the date of the transaction may be excluded

15 for purposes of paragraph (1)(B) if the bank holding

16 company has developed a plan to restore the perform17 ance of the institution to at least a ‘satisfactory’ rat18 ing under the Community Reinvestment Act of 1977

19 which is acceptable to the appropriate Federal bank20 ing agency.

21 ‘‘(4) ADJUSTMENT OF PERCENTAGES.—The

22 Board may by regulation adjust the percentages and

23 the manner in which the percentages of insured depos24 itory institutions are calculated under subparagraph

25 (A)(v)(I) or (D) of paragraph (1) or paragraph
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1 (2)(B) if the Board determines that such adjustment

2 is consistent with safety and soundness and the pur3 poses of this Act.

4 ‘‘(5) ADVICE OF ATTORNEY GENERAL.—The At5 torney General shall advise the Board during the pe6 riod referred to in paragraph (1)(H) in writing if

7 any competitive concerns exist with respect to the

8 transaction.

9 ‘‘(6) WAIVER OF POSTAPPROVAL WAITING PE10 RIOD.—If the Attorney General advises the Board

11 that no competitive concerns exist with respect to the

12 transaction, the provisions of section 11(b) relating to

13 a postapproval waiting shall not apply with respect

14 to such transaction.’’.

15 SEC. 203. ELIMINATE FILING AND APPROVAL REQUIRE16 MENTS FOR INSURED DEPOSITORY INSTITU17 TIONS ALREADY CONTROLLED BY THE SAME

18 HOLDING COMPANY.

19 (a) BANK MERGER ACT.—Section 18(c) of the Federal

20 Deposit Insurance Act (12 U.S.C. 1828(c)) is amended by

21 adding at the end the following new paragraph:

22 ‘‘(12) The provisions of this subsection shall not

23 apply to any merger, consolidation, acquisition of as24 sets or assumption of liabilities involving only in-
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1 sured depository institutions that are subsidiaries of

2 the same depository institution holding company if—

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

4 prohibited from approving the transaction under

5 section 44, if applicable;

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

7 institution complies with all applicable provi8 sions of section 44, if any, as if the merger, con9 solidation, or acquisition were approved under

10 this subsection;

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

12 institution provides written notification of the

13 transaction to the appropriate Federal banking

14 agency for the institution at least 10 days prior

15 to consummation of the transaction; and

16 ‘‘(D) after receiving such notice, the agency

17 does not require the institution to submit an ap18 plication with respect to such transaction and so

19 notifies the institution.’’.

20 (b) NATIONAL BANK CONSOLIDATION AND MERGER

21 ACT.—

22 (1) CONSOLIDATIONS.—Section 2 of the National

23 Bank Consolidation and Merger Act (12 U.S.C. 215)

24 is amended—
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1 (A) in subsection (a), by adding at the end

2 the following new sentence:

3 ‘‘No approval by the Comptroller of the Currency is re4 quired under this subsection for a transaction which in5 volves the consolidation of banks that, at the time of the

6 consolidation, are all subsidiaries (as defined in section 3

7 of the Federal Deposit Insurance Act) of the same com8 pany.’’; and

9 (B) in subsection (b)—

10 (i) by striking ‘‘, and thereafter the

11 consolidation shall be approved by the

12 Comptroller’’; and

13 (ii) by striking ‘‘when such consolida14 tion is approved by the Comptroller’’.

15 (2) MERGERS.—Section 3 of the National Bank

16 Consolidation and Merger Act (12 U.S.C. 215a) is

17 amended—

18 (A) in subsection (a), by adding at the end

19 the following new sentence:

20 ‘‘No approval by the Comptroller of the Currency is re21 quired under this subsection for a transaction which in22 volves the merger of banks that, at the time of the merger,

23 are all subsidiaries (as defined in section 3 of the Federal

24 Deposit Insurance Act) of the same company.’’; and

25 (B) in subsection (b)—
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1 (i) by striking ‘‘, and thereafter the

2 merger shall be approved by the Comptrol3 ler’’; and

4 (ii) by striking ‘‘when such merger

5 shall be approved by the Comptroller’’.

6 SEC. 204. ELIMINATE REDUNDANT APPROVAL REQUIRE7 MENT FOR OAKAR TRANSACTIONS.

8 (a) IN GENERAL.—Section 5(d)(3) of the Federal De9 posit Insurance Act (12 U.S.C. 1815(d)(3)) is amended—

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

11 prior written approval of the responsible agency

12 under section 18(c)(2)’’;

13 (2) in subparagraph (E)—

14 (A) by striking clause (iv) and inserting the

15 following new clause:

16 ‘‘(iv) A transaction shall not be au17 thorized under this paragraph unless the ac18 quiring, assuming, or resulting depository

19 institution will meet all applicable capital

20 requirements upon consummation of the

21 transaction.’’;

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

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

24 (as amended by subparagraph (A) of this para25 graph) as clauses (i) and (ii), respectively; and
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1 (3) by striking subparagraph (G) and redesig2 nating the subsequent subparagraphs accordingly.

3 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec4 tion 5156A(b)(1) of the Revised Statutes of the United

5 States (12 U.S.C. 215c(b)(1)) is amended by striking ‘‘sec6 tion 5(d)(3) of the Federal Deposit Insurance Act or’’.

7 (c) CLERICAL AMENDMENT.—The heading for section

8 5(d)(3)(E) of the Federal Deposit Insurance Act (12 U.S.C.

9 1815(d)(3)(E)) is amended by striking ‘‘FOR APPROVAL,

10 GENERALLY’’.

11 SEC. 205. ELIMINATION OF DUPLICATIVE REQUIREMENTS

12 IMPOSED UPON BANK HOLDING COMPANIES

13 AND OTHER REGULATORY RELIEF UNDER

14 THE HOME OWNERS’ LOAN ACT.

15 (a) EXEMPTION FOR BANK HOLDING COMPANIES.—

16 Section 10 of the Home Owners’ Loan Act (12 U.S.C.

17 1467a) is amended by adding at the end the following new

18 subsection:

19 ‘‘(t) EXEMPTION FOR BANK HOLDING COMPANIES.—

20 This section shall not apply to a bank holding company

21 that is subject to the Bank Holding Company Act of 1956

22 or any company controlled by such bank holding company

23 (other than a savings association).’’.
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1 (b) DEFINITION OF SAVINGS AND LOAN HOLDING COM2 PANY.—Section 10(a)(1)(D) of the Home Owners’ Loan Act

3 (12 U.S.C. 1467a(a)(1)(D)) is amended to read as follows:

4 ‘‘(D) SAVINGS AND LOAN HOLDING COM5 PANY.—

6 ‘‘(i) IN GENERAL.—Except as provided

7 in clause (ii), the term ‘savings and loan

8 holding company’ means any company

9 which directly or indirectly controls a sav10 ings association or controls any other com11 pany which is a savings and loan holding

12 company.

13 ‘‘(ii) EXCEPTION FOR BANK HOLDING

14 COMPANY.—The term ‘savings and loan

15 holding company’ does not include any

16 company which is registered under, and

17 subject to, the provisions of the Bank Hold18 ing Company Act of 1956, or any company

19 directly or indirectly controlled by such

20 company.’’.

21 (c) AMENDMENTS TO THE BANK HOLDING COMPANY

22 ACT OF 1956.—Section 4(i) of the Bank Holding Company

23 Act of 1956 (12 U.S.C. 1843(i)) is amended by adding at

24 the end the following new paragraphs:

25 ‘‘(4) SOLICITATION OF VIEWS.—
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1 ‘‘(A) NOTICE TO DIRECTOR.—Upon receiv2 ing any application or notice by a bank holding

3 company to acquire directly or indirectly a sav4 ings association under subsection (c)(8), the

5 Board shall solicit the Director’s comments and

6 recommendations with respect to such acquisi7 tion.

8 ‘‘(B) COMMENT PERIOD.—The comments

9 and views of the Director under subparagraph

10 (A) with respect to any acquisition subject to

11 such subparagraph shall be transmitted to the

12 Board within 30 days of the receipt by the Di13 rector of the notice relating to such acquisition

14 (or such shorter period as the Board may specify

15 if the Board advises the Director that an emer16 gency exists which requires expeditious action).

17 ‘‘(5) EXAMINATION.—

18 ‘‘(A) SCOPE.—The Board shall consult with

19 the Director, as appropriate, in establishing the

20 scope of an examination by the Board of a bank

21 holding company that controls directly or indi22 rectly a savings association.

23 ‘‘(B) ACCESS TO INSPECTION REPORTS.—

24 Upon the request of the Director, the Board shall

25 furnish the Director with a copy of any inspec-
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1 tion report, additional examination materials, or

2 supervisory information relating to any bank

3 holding company which directly or indirectly

4 controls a savings association.

5 ‘‘(6) COORDINATION OF ENFORCEMENT EF6 FORTS.—The Board and the Director shall cooperate

7 in any enforcement action against any bank holding

8 company which controls a savings association, if the

9 relevant conduct involves such association.

10 ‘‘(7) DIRECTOR DEFINED.—For purposes of this

11 section, the term ‘Director’ means the Director of the

12 Office of Thrift Supervision.’’.

13 (d) ALTERNATIVE TEST.—Section 10(m) of the Home

14 Owners’ Loan Act (12 U.S.C. 1467a(m)) is amended—

15 (1) in paragraph (1), by striking ‘‘(2) and (7)’’

16 and inserting ‘‘(2), (7), and (8)’’; and

17 (2) by adding at the end the following new para18 graph:

19 ‘‘(8) ALTERNATIVE TEST.—Any savings associa20 tion which meets the requirements set forth in section

21 7701(a)(19)(C) of the Internal Revenue Code of 1986

22 shall be deemed to be a qualified thrift lender and

23 any qualified thrift lender shall be deemed to meet the

24 requirements of such section.’’.
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1 SEC. 206. ELIMINATE REQUIREMENT THAT APPROVAL BE

2 OBTAINED FOR DIVESTITURES.

3 Section 2(g) of the Bank Holding Company Act of

4 1956 (12 U.S.C. 1841(g)) is amended—

5 (1) by striking paragraph (3);

6 (2) by inserting ‘‘and’’ after the semicolon at the

7 end of paragraph (1); and

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

9 (2) and inserting a period.

10 SEC. 207. ELIMINATE UNNECESSARY BRANCH APPLICA11 TIONS.

12 (a) NATIONAL BANK BRANCH APPLICATIONS.—Section

13 5155(i) of the Revised Statutes (12 U.S.C. 36(i)) is amend14 ed—

15 (1) by striking ‘‘(i) No branch’’ and inserting

16 ‘‘(i) RELOCATION.—

17 ‘‘(1) APPROVAL REQUIRED.—Except as provided

18 in paragraph (2), no branch’’; and

19 (2) by adding at the end the following new para20 graphs:

21 ‘‘(2) NO APPROVAL REQUIRED FOR CERTAIN

22 BRANCHES.—Notwithstanding this subsection or sub23 section (b) or (c), the consent and approval of the

24 Comptroller of the Currency shall not be required for

25 a national bank to establish and operate, or to retain

26 and operate, a branch or seasonal agency if—
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1 ‘‘(A) the bank is well capitalized (as defined

2 in section 38 of the Federal Deposit Insurance

3 Act and regulations prescribed by the Comptrol4 ler of the Currency under such section);

5 ‘‘(B) the bank received a composite CAMEL

6 rating of ‘1’ or ‘2’ under the Uniform Financial

7 Institutions Rating System (or an equivalent

8 rating under a comparable rating system) as of

9 its most recent examination;

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

11 improve’ or ‘substantial noncompliance’ compos12 ite rating at its most recent examination under

13 the Community Reinvestment Act of 1977; and

14 ‘‘(D) the Comptroller of the Currency is oth15 erwise authorized to grant approval under this

16 section to such bank to establish and operate, or

17 to retain and operate, a branch or seasonal agen18 cy at the proposed location.

19 ‘‘(3) CERTAIN BRANCHES DEEMED TO HAVE AP20 PROVED APPLICATIONS.—A branch or seasonal agency

21 established by a national bank under paragraph (2)

22 shall be deemed to have been established and operated

23 pursuant to an application approved under this sec24 tion.’’.
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1 (b) STATE MEMBER BANK BRANCH APPLICATIONS.—

2 The third undesignated paragraph of section 9 of the Fed3 eral Reserve Act (12 U.S.C. 321) is amended by adding at

4 the end the following: ‘‘Notwithstanding the preceding 2

5 sentences, the approval of the Board shall not be required

6 for a State member bank to establish and operate a branch

7 or seasonal agency if—

8 ‘‘(A) the State member bank is well-capital9 ized (as defined in section 38 of the Federal De10 posit Insurance Act and regulations prescribed

11 by the Board under such section);

12 ‘‘(B) the State member bank received a com13 posite CAMEL rating of ‘1’ or ‘2’ under the Uni14 form Financial Institutions Rating System (or

15 an equivalent rating under a comparable rating

16 system);

17 ‘‘(C) the State member bank did not receive

18 a ‘needs to improve’ or ‘substantial noncompli19 ance’ composite rating at its most recent exam20 ination under the Community Reinvestment Act

21 of 1977; and

22 ‘‘(D) the Board is otherwise authorized to

23 grant approval under this section to such State

24 member bank to establish and operate a branch

25 or seasonal agency at the proposed location.
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1 A branch or seasonal agency established by a State member

2 bank under the previous sentence shall be deemed to have

3 been established and operated pursuant to an application

4 approved under this section.’’.

5 (c) STATE NONMEMBER BANK BRANCH APPLICA6 TIONS.—Section 18(d) of the Federal Deposit Insurance Act

7 (12 U.S.C. 1828(d)) is amended by adding at the end the

8 following new paragraphs:

9 ‘‘(5) APPLICATION EXEMPTION FOR CERTAIN

10 BANKS.—Notwithstanding paragraph (1), the consent

11 of the Corporation shall not be required for a State

12 nonmember insured bank to establish and operate any

13 domestic branch if—

14 ‘‘(A) the bank is well-capitalized (as defined

15 in section 38 and regulations prescribed by the

16 Corporation under such section);

17 ‘‘(B) the bank received a composite CAMEL

18 rating of ‘1’ or ‘2’ under the Uniform Financial

19 Institutions Rating System (or an equivalent

20 rating under a comparable rating system) as of

21 its most recent examination;

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

23 improve’ or ‘substantial noncompliance’ compos24 ite rating as result of the bank’s most recent ex-
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1 amination under the Community Reinvestment

2 Act of 1977; and

3 ‘‘(D) the Corporation is otherwise author4 ized to give consent under this section to such

5 bank to establish and operate a domestic branch

6 at the proposed location.

7 ‘‘(6) APPROVAL GRANTED.—A branch established

8 by a State member bank under paragraph (5) shall

9 be deemed to have been established and operated pur10 suant to an application approved under this sec11 tion.’’.

12 SEC. 208. ELIMINATE BRANCH APPLICATIONS AND RE13 QUIREMENTS FOR ATMs AND SIMILAR FACILI14 TIES.

15 (a) DEFINITION OF BRANCH UNDER NATIONAL BANK

16 ACT.—Section 5155(j) of the Revised Statutes (12 U.S.C.

17 36(j)) is amended—

18 (1) by striking ‘‘(j) The term’’ and inserting ‘‘(j)

19 BRANCH.—

20 ‘‘(1) IN GENERAL.—The term’’; and

21 (2) by adding at the end the following new para22 graph:

23 ‘‘(2) CERTAIN PROPRIETARY ATMS AND REMOTE

24 SERVICING UNITS.—The term ‘branch’ does not in25 clude any automated teller machine or remote service
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1 unit which is owned and operated by a depository in2 stitution—

3 ‘‘(A) primarily for the benefit of the institu4 tion and the affiliates of the institution; and

5 ‘‘(B) which could operate a branch at the

6 location of such machine or unit.’’.

7 (b) DEFINITION OF BRANCH UNDER FEDERAL DE8 POSIT INSURANCE ACT.—Section 3(o) of the Federal De9 posit Insurance Act (12 U.S.C. 1813(o)) is amended—

10 (1) by striking ‘‘(o) The term’’ and inserting

11 ‘‘(o) DEFINITIONS RELATING TO BRANCHES.—

12 ‘‘(1) DOMESTIC BRANCH.—

13 ‘‘(A) IN GENERAL.—The term’’; and

14 (2) by striking ‘‘lent; and the term’’ and insert15 ing ‘‘lent.

16 ‘‘(B) CERTAIN PROPRIETARY ATMS AND RE17 MOTE SERVICING UNITS.—The term ‘domestic

18 branch’ does not include any automated teller

19 machine or remote service unit which is owned

20 and operated by a depository institution—

21 ‘‘(i) primarily for the benefit of the in22 stitution and the affiliates of the institu23 tion; and

24 ‘‘(ii) which could operate a branch at

25 the location of such machine or unit.
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1 ‘‘(2) FOREIGN BRANCH.—The term’’.

2 SEC. 209. ELIMINATE REQUIREMENT FOR APPROVAL OF IN3 VESTMENTS IN BANK PREMISES FOR WELL

4 CAPITALIZED AND WELL MANAGED BANKS.

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

6 371d) is amended by inserting before the period in that sec7 tion the following: ‘‘or, in the case of a bank which received

8 a composite CAMEL rating of ‘1’ or ‘2’ under the Uniform

9 Financial Institutions Rating System (or an equivalent

10 rating under a comparable rating system) as of its most

11 recent examination and, both before and immediately fol12 lowing the investment or loan, is well capitalized (as de13 fined under section 38 of the Federal Deposit Insurance

14 Act), the amount which is equal to 150 percent of the cap15 ital stock and surplus of such bank’’.

16 SEC. 210. ELIMINATE UNNECESSARY FILING FOR OFFICER

17 AND DIRECTOR APPOINTMENTS.

18 Section 32(d) of the Federal Deposit Insurance Act (12

19 U.S.C. 1831i(d)) is amended to read as follows:

20 ‘‘(d) ADDITIONAL INFORMATION.—

21 ‘‘(1) IN GENERAL.—Any notice submitted to an

22 appropriate Federal banking agency with respect to

23 an individual by any insured depository institution

24 or depository institution holding company pursuant

25 to subsection (a) shall include—
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1 ‘‘(A) the information described in section

2 7(j)(6)(A) about the individual; and

3 ‘‘(B) such other information as the agency

4 may prescribe by regulation.

5 ‘‘(2) WAIVER.—An appropriate Federal banking

6 agency may waive the requirement of this section by

7 regulation or on a case-by-case basis consistent with

8 safety and soundness.’’.

9 SEC. 211. STREAMLINING PROCESS FOR DETERMINING NEW

10 NONBANKING ACTIVITIES.

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

12 1956 (12 U.S.C. 1843(c)(8)) is amended—

13 (1) by striking ‘‘and opportunity for hearing’’;

14 and

15 (2) by striking ‘‘approval by the Board prior to

16 January 1, 1971.’’ and inserting the following: ‘‘ap17 proval by the Board prior to January 1, 1971, except

18 that, after March 30, 1997, it shall be closely related

19 to banking or managing or controlling banks and a

20 proper incident thereto to provide insurance as a

21 principal, agent, or broker in any State, in full com22 pliance with the laws and regulations of such State

23 that apply uniformly to each type of insurance license

24 or authorization in that State, including laws that

25 restrict a bank in that State from having an affiliate,
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1 agent, or employee in that State licensed to provide

2 insurance as principal, agent, or broker. The Board

3 shall prescribe regulations concerning insurance af4 filiations that provide equivalent treatment for all

5 stock and mutual fund insurance companies that con6 trol or are affiliated with a bank, and fully accommo7 date and are consistent with State law.’’.

8 SEC. 212. DISPOSITION OF FORECLOSED ASSETS.

9 Section 4(c)(2) of the Bank Holding Company Act of

10 1956 (12 U.S.C. 1843(c)(2)) is amended—

11 (1) by striking ‘‘for not more than one year at

12 a time’’; and

13 (2) by striking ‘‘but no such extensions shall ex14 tend beyond a date five years’’ and inserting ‘‘and, in

15 the case of a bank holding company which has not

16 disposed of such shares within 5 years of the date

17 such shares were acquired, the Board may, upon the

18 application of such company, grant additional ex19 emptions if, in the Board’s judgment, such extension

20 would not be detrimental to the public interest and ei21 ther the bank holding company has made a good faith

22 attempt to dispose of such shares during such 5-year

23 period or the disposal of such shares during such 5-

24 year period would have been detrimental to the com-
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1 pany, but the aggregate duration of such extensions

2 shall not extend 10 years’’.

3 SEC. 213. INCREASE IN CERTAIN CREDIT UNION LOAN CEIL4 INGS.

5 Section 107(5)(A) of the Federal Credit Union Act (12

6 U.S.C. 1757(5)(A)) is amended—

7 (1) in clause (iv), by striking ‘‘$10,000’’ and in8 serting ‘‘$50,000’’; and

9 (2) in clause (v), by striking ‘‘$10,000’’ and in10 serting ‘‘$50,000’’.

11 Subtitle B—Streamlining of Gov12 ernment Regulations; Mis13 cellaneous Provisions

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

16 MEMBER BANKS.

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

18 is amended—

19 (1) by striking subsection (h); and

20 (2) by redesignating subsections (i) (as amended

21 by section 207(a) of this Act), (j) (as amended by sec22 tion 208(a) of this Act), (k), and (l) as subsections

23 (h), (i), (j), and (k), respectively.
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1 SEC. 222. BRANCH CLOSURES.

2 (a) IN GENERAL.—Section 42 of the Federal Deposit

3 Insurance Act (12 U.S.C. 1831r–1) is amended by adding

4 at the end the following new subsection:

5 ‘‘(e) SCOPE OF APPLICATION.—

6 ‘‘(1) IN GENERAL.—This section shall not apply

7 with respect to—

8 ‘‘(A) an automated teller machine;

9 ‘‘(B) a branch which—

10 ‘‘(i) has been acquired through merger,

11 consolidation, purchase, assumption, or

12 other method; and

13 ‘‘(ii) is located—

14 ‘‘(I) within 2.5 miles of another

15 branch of the acquiring institution; or

16 ‘‘(II) within a neighborhood cur17 rently being served by another branch

18 of the acquiring institution,

19 if such other branch of the acquiring institution

20 is expected to continue to provide banking serv21 ices to substantially all of the customers cur22 rently served by the branch acquired;

23 ‘‘(C) a branch which is closing and reopen24 ing at a location which is—

25 ‘‘(i) within 2.5 miles of the location of

26 the branch being closed; or
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1 ‘‘(ii) within the same neighborhood as

2 the branch being closed,

3 if the branch at the new location is expected to

4 continue to provide banking services to substan5 tially all of the customers served by the branch

6 at the former location;

7 ‘‘(D) a branch that is closed in connection

8 with—

9 ‘‘(i) an emergency acquisition under—

10 ‘‘(I) section 11(n); or

11 ‘‘(II) subsections (f) or (k) of sec12 tion 13; or

13 ‘‘(ii) any assistance provided by the

14 Corporation under section 13(c); and

15 ‘‘(E) any other branch closure whose exemp16 tion from the notice requirements of this section

17 would not produce a result inconsistent with the

18 purposes of this section.

19 ‘‘(2) REGULATIONS.—The appropriate Federal

20 banking agency shall, by regulation, determine the

21 circumstances under which any exemption under

22 paragraph(1)(E) may be granted.’’.

23 (b) EFFECTIVE DATE.—The amendment made by sub24 section (a) shall apply as if such amendment had been in25 cluded in section 42 of the Federal Deposit Insurance Act
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1 as of the date of the enactment of the Federal Deposit Insur2 ance Corporation Improvement Act of 1991.

3 SEC. 223. AMENDMENTS TO THE DEPOSITORY INSTITU4 TIONS MANAGEMENT INTERLOCKS ACT.

5 (a) DUAL SERVICE IN SAME AREA, TOWN, OR VIL6 LAGE.—Section 203 of the Depository Institution Manage7 ment Interlocks Act (12 U.S.C. 3202) is amended—

8 (1) by inserting ‘‘(a) PROHIBITIONS.—’’ before

9 ‘‘A management official’’; and

10 (2) by adding after subsection (a) the following

11 new subsection:

12 ‘‘(b) SMALL MARKET SHARE EXEMPTION.—

13 ‘‘(1) IN GENERAL.—This section shall not be con14 strued as prohibiting a management official of a de15 pository institution or depository holding company

16 from serving as a management official of another de17 pository institution or depository holding company

18 not affiliated with such institution or holding com19 pany if the depository institutions or depository hold20 ing companies with which the management official

21 serves hold, together with all the affiliates of such in22 stitutions or holding companies, in the aggregate no

23 more that 20 percent of the deposits in each relevant

24 geographic banking market where offices of the deposi-
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1 tory institutions or depository holding companies or

2 their affiliates are located.

3 ‘‘(2) RELEVANT GEOGRAPHIC BANKING MARKET

4 DEFINED.—For purposes of paragraph (1), the term

5 ‘relevant geographic banking market’ means—

6 ‘‘(A) the area defined by the boundaries

7 identified by the Board of Governors of the Fed8 eral Reserve System;

9 ‘‘(B) if the Board has not defined such

10 boundaries, the area defined by the boundaries of

11 the Ranally Metropolitan Area in which the of12 fice of the depository institution or the deposi13 tory institution holding company is located; and

14 ‘‘(C) if the office of such institution or com15 pany is not located within a Ranally Metropoli16 tan Area, the area defined by the county (or an

17 equivalent area of general local government) in

18 which such office is located.’’.

19 (b) DUAL SERVICE AMONG LARGER ORGANIZA20 TIONS.—Section 204 of the Depository Institution Manage21 ment Interlocks Act (12 U.S.C. 3203) is amended to read

22 as follows:

23 ‘‘SEC. 204. DUAL SERVICE AMONG LARGER ORGANIZATIONS.

24 ‘‘(a) IN GENERAL.—If a depository institution, deposi25 tory institution holding company, or depository institution
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1 affiliate of any such institution or company has total assets

2 exceeding $2,500,000,000, a management official of such in3 stitution, company, or affiliate may not serve as a manage4 ment official of any other depository institution, depository

5 institution holding company, or depository institution affil6 iate of any such institution or company which—

7 ‘‘(1) is not an affiliate of the institution, com8 pany, or affiliate of which such person is a manage9 ment official; and

10 ‘‘(2) has total assets exceeding $1,500,000,000.

11 ‘‘(b) CPI ADJUSTMENTS.—The dollar amounts in this

12 section shall be adjusted annually after December 31, 1994,

13 by the annual percentage increase in the Consumer Price

14 Index for Urban Wage Earners and Clerical Workers pub15 lished by the Bureau of Labor Statistics.’’.

16 (c) EXTENSION OF GRANDFATHER EXEMPTION.—Sec17 tion 206 of the Depository Institution Management Inter18 locks Act (12 U.S.C. 3205) is amended—

19 (1) in subsection (a), by striking ‘‘for a period

20 of, subject to the requirements of subsection (c), 20

21 years after the date of enactment of this title’’;

22 (2) in subsection (b), by striking the 2d sentence;

23 and

24 (3) by striking subsection (c).
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1 (d) RULES OR REGULATIONS.—Section 209 of the De2 pository Institution Management Interlocks Act (12 U.S.C.

3 3207) is amended—

4 (1) by striking ‘‘(a) IN GENERAL.—Rules’’ and

5 inserting ‘‘Rules’’;

6 (2) by inserting ‘‘, including rules or regulations

7 which permit service by a management official which

8 would otherwise be prohibited by section 203 or sec9 tion 204,’’ after ‘‘title’’; and

10 (3) by striking subsections (b) and (c).

11 SEC. 224. ACCELERATION OF REPAYMENT TO TREASURY.

12 The Appraisal Subcommittee of the Financial Institu13 tions Examination Council shall repay to the Secretary of

14 the Treasury the funds specified in section 1108 of Finan15 cial Institutions Reform, Recovery, and Enforcement Act

16 of 1989 by not later than September 30, 1998, and the Sec17 retary shall deposit such funds in the general fund of the

18 Treasury.

19 SEC. 225. ELIMINATE UNNECESSARY AND DUPLICATIVE

20 RECORDKEEPING AND REPORTING REQUIRE21 MENTS RELATING TO LOANS TO EXECUTIVE

22 OFFICERS AND PERMIT PARTICIPATION IN

23 EMPLOYEE BENEFIT PLANS.

24 (a) AMENDMENTS TO SECTION 22(h) OF THE FEDERAL

25 RESERVE ACT.—
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1 (1) EMPLOYEE BENEFIT PLANS.—Section

2 22(h)(2) of the Federal Reserve Act (12 U.S.C.

3 375b(2)) is amended—

4 (A) by redesignating subparagraphs (A),

5 (B), and (C) as clauses (i), (ii), and (iii), respec6 tively, and moving the left margins of such

7 clauses 2 ems to the right;

8 (B) by striking ‘‘(2) PREFERENTIAL TERMS

9 PROHIBITED.—A member bank’’ and inserting

10 ‘‘(2) PREFERENTIAL TERMS PROHIBITED.—

11 ‘‘(A) IN GENERAL.—A member bank’’; and

12 (C) by adding at the end the following new

13 subparagraph:

14 ‘‘(B) EXCEPTION.—No provision of this

15 paragraph shall be construed as prohibiting ex16 tensions of credit that constitute a benefit or

17 compensation program that is widely available

18 to and used by employees of the member bank,

19 including employees who are not executive offi20 cers of the bank.’’.

21 (2) EXCEPTION FOR EXTENSIONS OF CREDIT TO

22 EXECUTIVE OFFICERS AND DIRECTORS OF NONBANK

23 AFFILIATES.—Section 22(h)(8)(B) of the Federal Re24 serve Act (12 U.S.C. 375b(8)(B)) is amended to read

25 as follows:
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1 ‘‘(B) EXCEPTION.—The Board may, by reg2 ulation, make exceptions to subparagraph (A) for

3 an executive officer or director of a subsidiary of

4 a company that controls the member bank if—

5 ‘‘(i) the executive officer or director

6 does not have authority to participate, and

7 does not participate, in major policymaking

8 functions of the member bank; and

9 ‘‘(ii) the assets of such subsidiary do

10 not exceed 10 percent of the consolidated as11 sets of a company that controls the member

12 bank and such subsidiary (and is not con13 trolled by any other company).’’.

14 (3) RECORDKEEPING REQUIREMENTS.—Section

15 22(h)(10) of the Federal Reserve Act (12 U.S.C.

16 375b(10)) is amended by adding at the end the follow17 ing: ‘‘The Board shall specify by regulation the rec18 ordkeeping required of member banks to ensure com19 pliance with this section.’’.

20 (b) REPORTING REQUIREMENTS.—

21 (1) UNNECESSARY REPORTS.—Section 22(g) of

22 the Federal Reserve Act (12 U.S.C. 375a) is amend23 ed—

24 (A) by striking paragraphs (6) and (9); and
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1 (B) by redesignating paragraphs (7), (8),

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

4 (2) UNNECESSARY REPORTS.—Section 7 of the

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

6 amended by striking subsection (k).

7 (3) UNNECESSARY REPORTS REGARDING LOANS

8 FROM CORRESPONDENT BANKS.—Section 106(b)(2) of

9 the Bank Holding Company Act Amendments of 1970

10 (12 U.S.C. 1972(2)) is amended—

11 (A) by striking subparagraph (G); and

12 (B) by redesignating subparagraphs (H)

13 and (I) as subparagraphs (G) and (H), respec14 tively.

15 (c) AMENDMENTS RELATING TO LOANS TO EXECUTIVE

16 OFFICERS.—Section 22(g) of the Federal Reserve Act (12

17 U.S.C. 375a) (as amended by subsection (a) of this section)

18 is amended—

19 (1) in paragraph (1)(D), by striking ‘‘of any one

20 of the three categories respectively referred to in para21 graphs (2), (3), and (4)’’ and inserting ‘‘of any cat22 egory referred to in paragraph (2), (3), (4), (5), or

23 (6)’’;

24 (2) by redesignating paragraphs (4) and (5) as

25 paragraphs (6) and (7), respectively;
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1 (3) by inserting after paragraph (3) the follow2 ing new paragraph:

3 ‘‘(4) HOME EQUITY LINES OF CREDIT.—A mem4 ber bank may make a revolving open-end extension of

5 credit to any executive officer of the bank if the cred6 it—

7 ‘‘(A) does not exceed $100,000; and

8 ‘‘(B) is secured by a dwelling that is owned

9 by such officer and used by the officer as a resi10 dence.

11 ‘‘(5) LOANS SECURED BY MARKETABLE AS12 SETS.—A member bank may extend credit to any ex13 ecutive officer of the bank if the credit is secured by

14 readily marketable assets of a value not exceeding

15 such amount as the Board may establish by regula16 tion.’’; and

17 (4) in paragraph (7) (as so redesignated by

18 paragraph (2) of this subsection) by striking ‘‘(4)’’

19 each place such term appears and inserting ‘‘(6)’’.

20 SEC. 226. EXPANDED REGULATORY DISCRETION FOR SMALL

21 BANK EXAMINATIONS.

22 (a) SMALL BANK SIZE DISCRETION.—Section 10(d) of

23 the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is

24 amended—
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1 (1) by redesignating paragraph (9) as para2 graph (10);

3 (2) by redesignating the 2d of the 2 paragraphs

4 designated as paragraph (8) as paragraph (9); and

5 (3) in paragraph (9) (as so redesignated), by

6 striking ‘‘$175,000,000’’ and inserting

7 ‘‘$250,000,000’’.

8 (b) INFLATION ADJUSTMENT.—Section 10(d) of the

9 Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is

10 amended by inserting after paragraph (10) (as so redesig11 nated in subsection (a)(1) of this section) the following new

12 paragraph:

13 ‘‘(11) ANNUAL CPI ADJUSTMENT.—The dollar

14 amount in this section shall be adjusted annually

15 after December 31, 1994, by the annual percentage in16 crease in the Consumer Price Index for Urban Wage

17 Earners and Clerical Workers published by the Bu18 reau of Labor Statistics.’’.

19 (c) COORDINATED FEDERAL AND STATE EXAMINA20 TIONS.—The Federal banking agencies (as defined in sec21 tion 3 of the Federal Deposit Insurance Act) shall submit

22 semiannual reports to the Congress on the progress made

23 by such agencies in implementing the requirements of sec24 tion 10(d)(6) of the Federal Deposit Insurance Act until

25 such agencies submit a final report that—
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1 (1) the examination system provided for in such

2 section is in place; and

3 (2) such system provides for full coordination of

4 examinations of State depository institutions with

5 State bank supervisors.

6 SEC. 227. COST REIMBURSEMENT.

7 Section 1115 of the Right to Financial Privacy Act

8 (12 U.S.C. 3415) is amended by inserting ‘‘(including cor9 porate customers)’’ after ‘‘pertaining to a customer’’.

10 SEC. 228. IDENTIFICATION OF FOREIGN NONBANK FINAN11 CIAL INSTITUTION CUSTOMERS.

12 (a) IN GENERAL.—Section 5327(a)(1) of title 31,

13 United States Code, is amended to read as follows:

14 ‘‘(1) is a financial institution (other than a for15 eign bank (as defined in section 101(b) of the Inter16 national Banking Act of 1978)) which is a foreign

17 person; and’’.

18 (b) TECHNICAL AND CONFORMING AMENDMENT.—The

19 heading for section 5327 of title 31, United States Code,

20 is amended by inserting ‘‘FOREIGN NONBANK’’ after

21 ‘‘OF’’.

22 (c) CLERICAL AMENDMENT.—The table of sections for

23 chapter 53 of title 31, United States Code, is amended by

24 striking the item relating to section 5327 and inserting the

25 following new item:

‘‘5327. Identification of foreign nonbank financial institutions.’’.
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1 SEC. 229. PAPERWORK REDUCTION REVIEW.

2 Not later than 180 days after the date of enactment

3 of this Act, each appropriate Federal banking agency and

4 the National Credit Union Administration, in consultation

5 with insured depository institutions, insured credit unions,

6 and other interested parties, shall—

7 (1) review the extent to which current regula8 tions require insured depository institutions and in9 sured credit unions to produce unnecessary internal

10 written policies; and

11 (2) eliminate such requirements, where appro12 priate.

13 For purposes of this section, the terms ‘‘insured depository

14 institution’’ and ‘‘appropriate Federal banking agency’’

15 have the same meanings as in section 3 of the Federal De16 posit Insurance Act and the term ‘‘insured credit union’’

17 has the same meaning as in section 101(7) of the Federal

18 Credit Union Act.

19 SEC. 230. DAILY CONFIRMATIONS FOR HOLD-IN-CUSTODY

20 REPURCHASE TRANSACTIONS.

21 Before the end of the 1-year period beginning on the

22 date of the enactment of this Act, the Secretary of the Treas23 ury shall revise the regulation under section 15C of the Se24 curities Exchange Act of 1934 relating to the obligations

25 of financial institutions and of brokers and dealer registered

26 under such Act holding custody of securities subject to a
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1 repurchase agreement to confirm, daily and in writing, the

2 securities that are subject to such repurchase agreement.

3 Such revision shall permit the counterparty to such agree4 ment to waive in writing the right to obtain such daily

5 written confirmation if the counterparty has received a

6 clear and conspicuous disclosure before entering into any

7 side agreement, in a form prescribed by the Secretary, that

8 adequately informs the counterparty of the benefits of re9 ceiving such daily written confirmations.

10 SEC. 231. REQUIRED REGULATORY REVIEW OF REGULA11 TIONS.

12 (a) IN GENERAL.—Not less frequently than once every

13 10 years, the Financial Institutions Examination Council

14 (hereafter in this section referred to as the ‘‘Council’’) and

15 each appropriate Federal banking agency (as defined in sec16 tion 3(q) of the Federal Deposit Insurance Act) represented

17 on the Council shall conduct a review of all regulations pre18 scribed by the Council or by any such agency, respectively,

19 in order to identify outdated or otherwise unnecessary regu20 latory requirements imposed upon insured depository insti21 tutions.

22 (b) PROCESS.—In conducting the review under sub23 section (a), the Council or the appropriate Federal banking

24 agency shall—
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1 (1) categorize the regulations by type (such as

2 consumer regulations, safety and soundness regula3 tions, or such other designations as determined by the

4 Council); and

5 (2) at regular intervals, provide notice and so6 licit public comment on a particular category or cat7 egories of regulations, requesting commentators to

8 identify areas of the regulations that are outdated,

9 unnecessary, or unduly burdensome.

10 (c) COMPLETE REVIEW.—The Council or the appro11 priate Federal banking agency shall ensure that the notice

12 and comment period described in subsection (b)(2) is con13 ducted with respect to all regulations described in subsection

14 (a) not less frequently than once every 10 years.

15 (d) REGULATORY RESPONSE.—The Council or the ap16 propriate Federal banking agency shall—

17 (1) publish in the Federal Register a summary

18 of the comments received under this section, identify19 ing significant issues raised and providing comment

20 on such issues; and

21 (2) eliminate unnecessary regulations to the ex22 tent that such action is appropriate.

23 (e) REPORT TO CONGRESS.—Not later than 30 days

24 after carrying out subsection (d)(1), the Council shall pro25 vide to the Congress a report, which shall include—
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1 (1) a summary of any significant issues raised

2 by public comments received by the Council and the

3 appropriate Federal banking agencies under this sec4 tion and the relative merits of such issues; and

5 (2) an analysis of whether the appropriate Fed6 eral banking agency involved is able to address the

7 regulatory burdens associated with such issues by reg8 ulation, or whether such burdens must be addressed

9 by legislative action.

10 SEC. 232. COUNTRY RISK REQUIREMENTS.

11 Subsections (a)(1) and (b) of section 905 of the Inter12 national Lending Supervision Act of 1983 (12 U.S.C. 3904)

13 are amended by striking ‘‘shall’’ and inserting ‘‘may’’.

14 SEC. 233. AUDIT COSTS.

15 (a) IN GENERAL.—

16 (1) AUDITOR ATTESTATIONS.—Section 36 of the

17 Federal Deposit Insurance At (12 U.S.C. 1831m) is

18 amended—

19 (A) in subsection (a)(2)(A)(ii), by striking

20 ‘‘subsections (c) and (d)’’ and inserting ‘‘sub21 section (c)’’;

22 (B) by striking subsections (c) and (e); and

23 (C) by redesignating subsections (d), (f), (g),

24 (h), (i), and (j) as subsections (c), (d), (e), (f),

25 (g), and (h), respectively.
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1 (2) PUBLIC AVAILABILITY.—Section 36(a)(3) of

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

3 1831m(a)(3)) is amended by inserting at the end the

4 following new sentence: ‘‘Notwithstanding the preced5 ing sentence, the Corporation and the appropriate

6 Federal banking agencies may designate certain in7 formation as privileged and confidential and not

8 available to the public.’’.

9 (b) EXEMPTION FOR WELL-CAPITALIZED AND WELL10 MANAGED INSURED DEPOSITORY INSTITUTIONS.—Section

11 36 of the Federal Deposit Insurance Act (12 U.S.C. 1831m)

12 (as amended by subsection (a) of this section) is amended

13 by adding at the end the following new subsection:

14 ‘‘(i) EXEMPTION FOR WELL-CAPITALIZED AND WELL15 MANAGED INSURED DEPOSITORY INSTITUTIONS.—No pro16 vision of this section other than subsection (c) shall apply

17 with respect to any insured depository institution which is

18 well-capitalized and well-managed.’’.

19 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

20 (1) Paragraph (1)(B) of section 36(e) of the Fed21 eral Deposit Insurance Act (as so redesignated by sub22 section (a)(1)(C) of this section) is amended by strik23 ing ‘‘(b)(2), (c), and (d)’’ and inserting ‘‘(b)(2) and

24 (c)’’.
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1 (2) Paragraph (1) of section 36(g) of the Federal

2 Deposit Insurance Act (as so redesignated by sub3 section (a)(1)(C) of this section) is amended by strik4 ing ‘‘(d)’’ and inserting ‘‘(c)’’.

5 SEC. 234. STANDARDS FOR DIRECTOR AND OFFICER LIABIL6 ITY.

7 Section 3(u) of the Federal Deposit Insurance Act (12

8 U.S.C. 1813(u)) is amended—

9 (1) in paragraph (1), by inserting ‘‘(other than

10 an outside director)’’ after ‘‘director’’;

11 (2) in paragraph (3), by inserting ‘‘(other than

12 an outside director)’’ after ‘‘any other person’’; and

13 (3) in paragraph (4), by inserting ‘‘or outside

14 director’’ after ‘‘or accountant)’’.

15 SEC. 235. FOREIGN BANK APPLICATIONS.

16 (a) PROVISIONS RELATING TO ESTABLISHMENT OF

17 BANK OFFICES.—Section 7(d) of the International Banking

18 Act of 1978 (12 U.S.C. 3105(d)) is amended—

19 (1) in paragraph (2), by striking ‘‘The’’ and in20 serting ‘‘Except as provided in paragraph (6), the’’;

21 (2) in paragraph (5), by striking ‘‘Consistent

22 with the standards for approval in paragraph (2),

23 the’’ and inserting ‘‘The’’; and

24 (3) by adding at the end the following new para25 graphs:
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1 ‘‘(6) EXCEPTION.—

2 ‘‘(A) IN GENERAL.—If the Board is unable

3 to find under paragraph (2) that a foreign bank

4 is subject to comprehensive supervision or regula5 tion on a consolidated basis by the appropriate

6 authorities in its home country, the Board may

7 nevertheless approve an application under para8 graph (1) by such foreign bank if—

9 ‘‘(i) the appropriate authorities in the

10 home country of such foreign bank are

11 working to establish arrangements for the

12 consolidated supervision of such bank; and

13 ‘‘(ii) all other factors are consistent

14 with approval.

15 ‘‘(B) ADDITIONAL CONDITIONS.—The

16 Board, after requesting and considering the

17 views of the appropriate State bank supervisor

18 or the Comptroller of the Currency, as the case

19 may be, may impose such conditions or restric20 tions relating to activities or business operations

21 of the proposed branch, agency, or commercial

22 lending company subsidiary, including restric23 tions on sources of funding, as are considered ap24 propriate in the public interest.
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1 ‘‘(C) MODIFICATION OF CONDITIONS.—Any

2 condition or restriction imposed by the Board

3 under this subsection in connection with the ap4 proval of an application may be varied or with5 drawn where such modification is consistent

6 with the public interest.

7 ‘‘(7) TIME PERIOD FOR BOARD ACTION.—

8 ‘‘(A) FINAL ACTION.—The Board shall take

9 final action on any application under para10 graph (1) within 180 days of receipt of the ap11 plication, except that the Board may extend for

12 an additional 180 days the period within which

13 to take final action on such application, after

14 providing notice of, and the reasons for, the ex15 tension to the applicant foreign bank and any

16 appropriate State bank supervisor or the Comp17 troller of the Currency, as the case may be.

18 ‘‘(B) FAILURE TO SUBMIT INFORMATION.—

19 The Board may deny any application if it has

20 not received information requested from the ap21 plicant foreign bank or appropriate authorities

22 in the home country in sufficient time to permit

23 the Board to evaluate such information ade24 quately within the time periods for final action

25 set forth in subparagraph (A).
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1 ‘‘(C) WAIVER.—A foreign bank may waive

2 the applicability of subparagraph (A) with re3 spect to any such application.’’.

4 (b) PROVISION RELATING TO TERMINATION OF BANK

5 OFFICES.—Section 7(e)(1)(A) of the International Banking

6 Act of 1978 (12 U.S.C. 3105(e)(1)(A)) is amended—

7 (1) by striking ‘‘(A)’’ and inserting ‘‘(A)(i)’’;

8 (2) by striking ‘‘; or’’ and inserting ‘‘; and’’; and

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

10 clause:

11 ‘‘(ii) the appropriate authorities in the

12 home country are not making progress in estab13 lishing arrangements for the comprehensive su14 pervision or regulation of such foreign bank on

15 a consolidated basis; or’’.

16 (c) UNIFORM TERMINATIONS OF FOREIGN BANK OF17 FICES, AGENCIES, BRANCHES, AND SUBSIDIARIES BY THE

18 FEDERAL RESERVE SYSTEM.—

19 (1) IN GENERAL.—Section 7(e)(1) of the Inter20 national Banking Act of 1978 (12 U.S.C. 3105(e)(1))

21 is amended—

22 (A) by inserting ‘‘or the Comptroller of the

23 Currency’’ after ‘‘State bank supervisor’’;
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1 (B) by inserting ‘‘or a Federal branch or

2 agency’’ after ‘‘commercial lending company sub3 sidiary’’ the 1st place such term appears; and

4 (C) in the last sentence, by inserting ‘‘or a

5 Federal branch or agency’’ after ‘‘commercial

6 lending company subsidiary’’.

7 (2) TECHNICAL AND CONFORMING AMEND8 MENT.—Section 7(e) of the International Banking Act

9 of 1978 (12 U.S.C. 3105(e)) is amended—

10 (A) by striking paragraph (5); and

11 (B) by redesignating paragraphs (6) and

12 (7) as paragraphs (5) and (6), respectively.

13 SEC. 236. DUPLICATE EXAMINATION OF FOREIGN BANKS.

14 Section 7(c)(1) of the International Banking Act of

15 1978 (12 U.S.C. 3105(c)(1)) is amended—

16 (1) by adding after clause (ii) of subparagraph

17 (B) the following new clause:

18 ‘‘(iii) AVOIDANCE OF DUPLICATION.—

19 In exercising its authority under this para20 graph, the Board shall take all reasonable

21 measures to reduce burden and avoid un22 necessary duplication of examinations.’’;

23 (2) by striking subparagraph (C) and inserting

24 the following:
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1 ‘‘(C) ON-SITE EXAMINATION.—Each Federal

2 branch or agency, and each State branch or

3 agency, of a foreign bank shall be subject to on4 site examination by a Federal banking agency or

5 State bank supervisor as frequently as would a

6 national bank or State bank, respectively, by its

7 appropriate Federal banking agency.’’; and

8 (3) by amending subparagraph (D) to read as

9 follows:

10 ‘‘(D) COST OF EXAMINATIONS.—The cost of

11 any examination undertaken pursuant to sub12 paragraph (A) shall be assessed against and col13 lected from the foreign bank or the foreign com14 pany that controls the foreign bank, as the case

15 may be, but only to the same extent that fees are

16 collected by the Board for examination of any

17 State member insured bank.’’.

18 SEC. 237. SECOND MORTGAGES.

19 (a) IN GENERAL.—Section 103(aa)(1) of the Truth in

20 Lending Act (15 U.S.C. 1602(aa)(1)) is amended—

21 (1) by inserting ‘‘a subordinate mortgage on’’

22 after ‘‘secured by’’; and

23 (2) by striking ‘‘a residential mortgage trans24 action’’.
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1 (b) EFFECT ON PENDING CASES.—Any administrative

2 enforcement proceeding or other action which—

3 (1) is pending on the date of the enactment of

4 this Act; and

5 (2) is based on regulations in effect as of such

6 date under the Truth in Lending Act with respect to

7 high-cost residential mortgage transactions which are

8 not subordinate mortgages,

9 shall be dismissed as of such date.

10 SEC. 238. STREAMLINING FDIC APPROVAL OF NEW STATE

11 BANK POWERS.

12 (a) IN GENERAL.—Section 24(a) of the Federal De13 posit Insurance Act (12 U.S.C. 1831a(a)) is amended to

14 read as follows:

15 ‘‘(a) ACTIVITIES GENERALLY.—

16 ‘‘(1) IN GENERAL.—An insured State bank may

17 not engage as principal in any type of activity that

18 is not permissible for a national bank unless—

19 ‘‘(A) the bank has given the Corporation

20 written notice of the bank’s intention to engage

21 in such activity at least 60 days before commenc22 ing to engage in the activity and within such 60-

23 day period (or within the extended period pro24 vided under paragraph (2)) the Corporation has

25 not disapproved the activity; and
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1 ‘‘(B) the State bank is, and continues to be,

2 in compliance with applicable capital standards

3 prescribed by the appropriate Federal banking

4 agency.

5 ‘‘(2) EXTENSION OF PERIOD.—The Corporation

6 may extend the 60-day period referred to in para7 graph (1) for issuing a notice of disapproval with re8 spect to any activity for an additional 30 days.

9 ‘‘(3) CONTENTS OF NOTICE.—Any notice submit10 ted by a State bank under paragraph (1)(A) shall

11 contain such information as the Corporation may re12 quire.

13 ‘‘(4) BASIS FOR DISAPPROVAL.—The Corporation

14 may disapprove an activity for a State bank under

15 this subsection unless the Corporation determines that

16 the activity would pose no significant risk to the ap17 propriate insurance fund.’’.

18 (b) SUBSIDIARIES OF INSURED STATE BANKS.—Sec19 tion 24(d)(1) of the Federal Deposit Insurance Act (12

20 U.S.C. 1831a(d)(1)) is amended to read as follows:

21 ‘‘(1) ACTIVITIES GENERALLY.—

22 ‘‘(A) IN GENERAL.—A subsidiary of an in23 sured State bank may not engage as principal in

24 any type of activity that is not permissible for

25 a subsidiary of a national bank unless—
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1 ‘‘(i) the subsidiary has given the Cor2 poration written notice of the subsidiary’s

3 intention to engage in such activity at least

4 60 days before commencing to engage in the

5 activity and within such 60-day period (or

6 within the extended period provided under

7 paragraph (2)) the Corporation has not dis8 approved the activity; and

9 ‘‘(ii) the bank is, and continues to be,

10 in compliance with applicable capital

11 standards prescribed by the appropriate

12 Federal banking agency.

13 ‘‘(B) EXTENSION OF PERIOD.—The Cor14 poration may extend the 60-day period referred

15 to in subparagraph (A) for issuing a notice of

16 disapproval with respect to any activity for an

17 additional 30 days.

18 ‘‘(C) CONTENTS OF NOTICE.—Any notice

19 submitted by a subsidiary of an insured State

20 bank under subparagraph (A)(i) shall contain

21 such information as the Corporation may re22 quire.

23 ‘‘(D) BASIS FOR DISAPPROVAL.—The Cor24 poration may disapprove an activity for a sub25 sidiary of an insured State bank under this
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1 paragraph unless the Corporation determines

2 that the activity would pose no significant risk

3 to the appropriate insurance fund.’’.

4 SEC. 239. REPEAL OF CALL REPORT ATTESTATION RE5 QUIREMENT.

6 Section 5211(a) of the Revised Statutes (12 U.S.C.

7 161(a)) is amended by striking the 4th sentence.

8 SEC. 240. AUTHORITY OF THE COMPTROLLER OF THE CUR9 RENCY.

10 (a) STATE SUPERVISION.—Chapter 1 of title LXII of

11 the Revised Statutes of the United States (12 U.S.C. 21 et

12 seq.) is amended—

13 (1) by redesignating section 5136A as section

14 5136C; and

15 (2) by inserting after section 5136 (12 U.S.C.

16 24) the following new section:

17 ‘‘SEC. 5136A. STATE SUPERVISION OF INSURANCE.

18 ‘‘(a) STATE LICENSING OF INSURANCE ACTIVITIES.—

19 ‘‘(1) IN GENERAL.—Subject to paragraph (2), no

20 provision of section 5136, any other section of this

21 title, or section 13 of the Federal Reserve Act may be

22 construed as limiting or otherwise impairing the au23 thority of any State to regulate—

24 ‘‘(A) the extent to which, and the manner in

25 which, a national bank may engage within the
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1 State in insurance activities pursuant to section

2 5136B of this chapter or section 13 of the Fed3 eral Reserve Act;

4 ‘‘(B) the manner in which a national bank

5 may engage within the State in insurance ac6 tivities pursuant to section 5136(b)(2)(B) of the

7 Revised Statutes of the United States; or

8 ‘‘(C) the manner in which a national bank

9 may engage within the State in insurance ac10 tivities pursuant to section 5136(b)(2)(A) of the

11 Revised Statutes of the United States through,

12 and limited to, consumer disclosure requirements

13 or licensing requirements, procedures, and quali14 fications as described in paragraph (2)(C).

15 ‘‘(2) PROHIBITION ON STATE DISCRIMINATION

16 AGAINST NATIONAL BANKS.—Notwithstanding para17 graph (1)—

18 ‘‘(A) PROVIDING INSURANCE AS AGENT OR

19 BROKER.—No State may impose any insurance

20 regulatory requirement relating to providing in21 surance as an agent or broker that treats a na22 tional bank differently than all other persons

23 who are authorized to provide insurance as

24 agents or brokers in such State, unless there is

25 a legitimate and reasonable State regulatory
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1 purpose for the requirement for which there is no

2 less restrictive alternative.

3 ‘‘(B) PROVIDING INSURANCE AS PRINCIPAL,

4 AGENT, OR BROKER.—

5 ‘‘(i) No State may impose on a na6 tional bank any insurance regulatory re7 quirement relating to providing insurance

8 as principal, agent, or broker that treats the

9 national bank more restrictively than any

10 other depository institution (as defined in

11 section 3(c)(1) of the Federal Deposit Insur12 ance Act, 12 U.S.C. 1813(c)(1)) operating

13 in the State.

14 ‘‘(ii) Nothing in this subparagraph

15 shall affect the validity of a State law

16 that—

17 ‘‘(I) prevents a national bank

18 from engaging in insurance activities

19 within the State to as great an extent

20 as a savings association (as defined in

21 section 3(b)(1) of the Federal Deposit

22 Insurance Act, 12 U.S.C. 1813(b)(1))

23 may engage in such activities within

24 the State; and
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1 ‘‘(II) was in effect on June 1,

2 1995.

3 ‘‘(C) LICENSING QUALIFICATIONS AND PRO4 CEDURES.—No State may discriminate against

5 a national bank with respect to the following re6 quirements, procedures, and qualifications as

7 such requirements, procedures, and qualifications

8 relate to the authority of the national bank to

9 provide insurance in such State as an agent or

10 broker:

11 ‘‘(i) License application and process12 ing procedures.

13 ‘‘(ii) Character, experience, and edu14 cational qualifications for licenses.

15 ‘‘(iii) Testing and examination re16 quirements for licenses.

17 ‘‘(iv) Fee requirements for licenses.

18 ‘‘(v) Continuing education require19 ments.

20 ‘‘(vi) Types of licenses required.

21 ‘‘(vii) Standards and requirements for

22 renewal of licenses.

23 ‘‘(b) AUTHORITY OF THE COMPTROLLER OF THE CUR24 RENCY.—A national bank may not provide insurance as

25 a principal, agent, or broker except as specifically provided
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1 in this section, the paragraph designated as the ‘Seventh’

2 of section 5136(a) of this chapter, section 5136(b) or 5136B

3 of this chapter, or section 13 of the Federal Reserve Act.

4 ‘‘(c) PRESERVATION OF FEDERALLY AUTHORIZED

5 BANK ACTIVITIES IN PERMISSIVE STATES.—No provision

6 of this section may be construed as affecting the authority,

7 pursuant to section 5136B of this chapter or section 13 of

8 the Federal Reserve Act, of a national bank to act as insur9 ance agent or broker consistent with State law.

10 ‘‘(d) PRESERVATION OF NATIONAL BANK AUTHORITY

11 CONSISTENT WITH STATE BANK AUTHORITY.—Except as

12 provided in subsection (a)(2)(B), no provision of this sec13 tion or section 5136(b)(1) shall have the effect of enabling

14 a State to deny a national bank authority that the bank

15 otherwise possesses to provide a product in a State, includ16 ing as agent, broker, or principal, where the bank is not

17 providing the product in the State other than to an extent

18 and in a manner that a State bank (as defined in section

19 3(a)(2) of the Federal Deposit Insurance Act, 12 U.S.C.

20 1813(a)(2)) is permitted by the law of the State to provide

21 such product, except that nothing in this subsection shall

22 be construed as granting any new authority to a national

23 bank to provide any product because the law of the State

24 has authorized State banks to provide such product.
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1 ‘‘(e) DEFINITIONS.—For purposes of this section, sec2 tions 5136 and 5136B, and section 13 of the Federal Re3 serve Act, the following definitions shall apply:

4 ‘‘(1) INSURANCE.—The term ‘insurance’ means

5 any product defined or regulated as insurance, con6 sistent with the relevant State insurance law, by the

7 insurance regulatory authority of the State in which

8 such product is sold, solicited, or underwritten, in9 cluding any annuity contract the income on which is

10 tax deferred under section 72 of the Internal Revenue

11 Code of 1986.

12 ‘‘(2) STATE.—The term ‘State’ has the same

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

14 Insurance Act.

15 ‘‘(f) GRANDFATHER PROVISION.—

16 ‘‘(1) IN GENERAL.—Any national bank which,

17 before January 1, 1995, was providing insurance as

18 agent or broker under section 13 of the Federal Re19 serve Act may provide insurance as an agent or

20 broker under such section, to no less extent and in a

21 no more restrictive manner as such bank was provid22 ing insurance as agent or broker under such section

23 on January 1, 1995, notwithstanding contrary State

24 law, subject to final, controlling judgment in a pend25 ing action.
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1 ‘‘(2) TERMINATION.—This subsection shall cease

2 to apply with respect to any national bank described

3 in paragraph (1) if—

4 ‘‘(A) the bank is subject to an acquisition,

5 merger, consolidation, or change in control, other

6 than a transaction to which section 18(c)(12) of

7 the Federal Deposit Insurance Act applies; or

8 ‘‘(B) any bank holding company which di9 rectly or indirectly controls such bank is subject

10 to an acquisition, merger, consolidation, or

11 change in control, other than a transaction in

12 which the beneficial ownership of such bank hold13 ing company or of a bank holding company

14 which controls such company does not change as

15 a result of the transaction.

16 ‘‘(g) PRESERVATION OF BANKING PRODUCTS.—Noth17 ing in this section shall be construed as affecting the ability

18 of a national bank, or a subsidiary of a national bank, to

19 engage in any activity, including any activity authorized

20 pursuant to the paragraph designated the ‘‘Seventh’’ of sec21 tion 5136(a), that is part of, and not merely incidental to,

22 the business of banking.’’.

23 (b) INTERPRETIVE AUTHORITY OF THE COMPTROLLER

24 OF THE CURRENCY.—Section 5136 of the Revised Statutes

25 of the United States (12 U.S.C. 24) is amended—
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1 (1) by striking ‘‘Upon duly making and filing

2 articles of association’’ and inserting ‘‘(a) IN GEN3 ERAL.—Upon duly making and filing articles of asso4 ciation’’; and

5 (2) by adding at the end the following new sub6 section:

7 ‘‘(b) INTERPRETIVE AUTHORITY OF THE COMPTROL8 LER OF THE CURRENCY.—

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

10 shall not be incidental to banking for a national bank

11 to provide insurance as a principal, agent, or broker.

12 ‘‘(2) SCOPE OF APPLICATION.—Notwithstanding

13 paragraph (1), it shall be incidental to banking for

14 a national bank to engage in the following activities:

15 ‘‘(A) Providing, as an agent or broker, any

16 annuity contract the income on which is tax de17 ferred under section 72 of the Internal Revenue

18 Code of 1986.

19 ‘‘(B) Providing, as a principal, agent, or

20 broker, any type of insurance, other than an an21 nuity or title insurance, which the Comptroller

22 of the Currency specifically determined, before

23 May 1, 1995, to be incidental to banking with

24 respect to national banks.’’.

25 (c) TECHNICAL AND CONFORMING AMENDMENTS.—
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1 (1) The 11th undesignated paragraph of section

2 13 of the Federal Reserve Act (12 U.S.C. 92) is

3 amended by inserting ‘‘, and subject to section 5136A

4 of the Revised Statutes of the United States,’’ after

5 ‘‘the laws of the United States’’.

6 (2) The paragraph designated the ‘‘Seventh’’ of

7 section 5136 of the Revised Statutes of the United

8 States (12 U.S.C. 24) is amended by striking ‘‘subject

9 to law,’’ and inserting ‘‘subject to subsection (b), sec10 tion 5136A, and any other provision of law,’’.

11 (3) Section 1306 of title 18, United States Code,

12 is amended by striking ‘‘5136A’’ and inserting

13 ‘‘5136C’’.

14 (d) CLERICAL AMENDMENT.—The table of sections for

15 chapter 1 of title LXII of the Revised Statutes of the United

16 States is amended—

17 (1) by redesignating the item relating to section

18 5136A as section 5136C; and

19 (2) by inserting after the item relating to section

20 5136 the following new item:

‘‘5136A. State supervision of insurance.’’.

21 (e) PRESERVATION OF BANK HOLDING COMPANY IN22 SURANCE AUTHORITY.—No provision of this section, and

23 no amendment made by this section to any other provision

24 of law, may be construed as affecting the authority of a

25 bank holding company to engage in insurance agency activ-
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1 ity pursuant to section 4(c) of the Bank Holding Company

2 Act of 1956 (12 U.S.C. 1843(c)).

3 SEC. 241. NATIONAL BANK COMMUNITY DEVELOPMENT IN4 SURANCE ACTIVITIES.

5 (a) IN GENERAL.—Chapter 1 of title LXII of the Re6 vised Statutes of the United States (12 U.S.C. 21 et seq.)

7 is amended by inserting after section 5136A (as added by

8 section 240(a) of this Act) the following new section:

9 ‘‘SEC. 5136B. INSURANCE SALES IN EMPOWERMENT ZONES.

10 ‘‘(a) AUTHORITY TO SELL INSURANCE AS AGENT

11 FROM EMPOWERMENT ZONES.—The Comptroller of the

12 Currency may approve an application by a national bank

13 maintaining a main office or full-service branch in an

14 empowerment zone to act as an agent or broker from such

15 office or branch for any fire, life, or other insurance com16 pany authorized to do business in the State in which the

17 customer is located if—

18 ‘‘(1) the bank provides sufficient evidence that

19 the availability of competitively priced insurance in

20 the empowerment zone is inadequate; and

21 ‘‘(2) the insurance is sold only in the

22 empowerment zone.

23 ‘‘(b) APPLICATION OF STATE LAW.—State laws which

24 regulate conducting the business of insurance shall apply

25 to national banks and their employees that sell insurance
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1 as agent or broker under this section to the same extent as

2 such laws apply to other entities and persons not affiliated

3 with depository institutions except—

4 ‘‘(1) in any case in which the Comptroller of the

5 Currency determines, after notice to and comment by

6 the appropriate State insurance officials, that the ap7 plication of a State law would have an unreasonably

8 discriminatory effect upon the sale of insurance by

9 national banks or their employees in comparison with

10 the effect the application of the State law would have

11 with respect to sale of insurance by other entities; or

12 ‘‘(2) when State law by its own terms does not

13 apply to national banks or employees of such banks.

14 ‘‘(c) AUTHORITY OF COMPTROLLER OF THE CUR15 RENCY.—

16 ‘‘(1) IN GENERAL.—The Comptroller of the Cur17 rency may prescribe regulations governing sales of in18 surance by national banks pursuant to this section.

19 ‘‘(2) ENFORCEMENT OF STATE LAW.—The provi20 sions of any State law to which a national bank is

21 subject under this section shall be enforced with re22 spect to such bank by the Comptroller of the Cur23 rency.

24 ‘‘(d) DEFINITIONS.—
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1 ‘‘(1) EMPOWERMENT ZONE.—The term

2 ‘empowerment zone’ means an area that meets the

3 standards for designation as an empowerment zone or

4 enterprise community under section 1392 of the Inter5 nal Revenue Code of 1986 or an Indian reservation.

6 ‘‘(2) FULL-SERVICE BRANCH.—The term ‘full7 service branch’ means a staffed facility which has

8 been approved as a branch and offers loan and de9 posit services.

10 ‘‘(3) INDIAN RESERVATION.—The term ‘Indian

11 reservation’ has the meaning given such term by sec12 tion 168(j)(6) of the Internal Revenue Code of 1986.’’.

13 (b) CLERICAL AMENDMENT.—The table of sections for

14 chapter 1 of title LXII of the Revised Statutes of the United

15 States is amended by inserting after the item relating to

16 section 5136A (as added by section 240(d) of this title) the

17 following new item:

‘‘5136B. Insurance sales in empowerment zones.’’.

18 SEC. 242. AUTHORIZING BANK SERVICE COMPANIES TO OR19 GANIZE AS LIMITED LIABILITY PARTNER20 SHIPS.

21 (a) AMENDMENT TO SHORT TITLE.—Section 1 of the

22 Bank Service Corporation Act (12 U.S.C. 1861(a)) is

23 amended by striking subsection (a) and inserting the follow24 ing new subsection:
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1 ‘‘(a) SHORT TITLE.—This Act may be cited as the

2 ‘Bank Service Company Act’.’’;

3 (b) AMENDMENTS TO DEFINITIONS.—Section 1(b) of

4 the Bank Service Corporation Act (12 U.S.C. 1861(b)) is

5 amended—

6 (1) by striking paragraph (2) and inserting the

7 following new paragraph:

8 ‘‘(2) the term ‘bank service company’ means—

9 ‘‘(A) any corporation—

10 ‘‘(i) which is organized to perform

11 services authorized by this Act; and

12 ‘‘(ii) all of the capital stock of which is

13 owned by 1 or more insured banks; and

14 ‘‘(B) any limited liability company—

15 ‘‘(i) which is organized to perform

16 services authorized by this Act; and

17 ‘‘(ii) all of the members of which are 1

18 or more insured banks.’’;

19 (2) in paragraph (6)—

20 (A) by striking ‘‘corporation’’ and inserting

21 ‘‘company’’; and

22 (B) by striking ‘‘and’’ after the semicolon;

23 (3) by redesignating paragraph (7) as para24 graph (8) and inserting after paragraph (6) the fol25 lowing new paragraph:
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1 ‘‘(7) the term ‘limited liability company’ means

2 any company organized under the law of a State (as

3 defined in section 3 of the Federal Deposit Insurance

4 Act) which provides that a member or manager of

5 such company is not personally liable for a debt, obli6 gation, or liability of the company solely by reason

7 of being, or acting as, a member or manager of such

8 company; and’’; and

9 (4) in paragraph (8) (as so redesignated)—

10 (A) by striking ‘‘corporation’’ each place

11 such term appears and inserting ‘‘company’’;

12 and

13 (B) by striking ‘‘capital stock’’ and insert14 ing ‘‘equity’’.

15 (c) AMENDMENTS TO SECTION 2.—Section 2 of the

16 Bank Service Corporation Act (12 U.S.C. 1862) is amend17 ed—

18 (1) by striking ‘‘corporation’’ and inserting

19 ‘‘company’’;

20 (2) by striking ‘‘corporations’’ and inserting

21 ‘‘companies’’; and

22 (3) in the heading for such section, by striking

23 ‘‘CORPORATION’’ and inserting ‘‘COMPANY’’.
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1 (d) AMENDMENTS TO SECTION 3.—Section 3 of the

2 Bank Service Corporation Act (12 U.S.C. 1863) is amend3 ed—

4 (1) by striking ‘‘corporation’’ each place such

5 term appears and inserting ‘‘company’’; and

6 (2) in the heading for such section, by striking

7 ‘‘CORPORATION’’ and inserting ‘‘COMPANY’’.

8 (e) AMENDMENTS TO SECTION 4.—Section 4 of the

9 Bank Service Corporation Act (12 U.S.C. 1864) is amend10 ed—

11 (1) by striking ‘‘corporation’’ each place such

12 term appears and inserting ‘‘company’’;

13 (2) in subsection (b), by inserting ‘‘or members’’

14 after ‘‘shareholders’’ each place such term appears;

15 (3) in subsections (c) and (d), by inserting ‘‘or

16 member’’ after ‘‘shareholder’’ each place such term ap17 pears;

18 (4) in subsection (e)—

19 (A) by inserting ‘‘or members’’ after ‘‘na20 tional bank and State bank shareholders’’;

21 (B) by striking ‘‘its national bank share22 holder or shareholders’’ and inserting ‘‘any

23 shareholder or member of the company which is

24 a national bank’’;
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1 (C) by striking ‘‘its State bank shareholder

2 or shareholders’’ and inserting ‘‘any shareholder

3 or member of the company which is a State

4 bank’’;

5 (D) by striking ‘‘such State bank or banks’’

6 and inserting ‘‘any such State bank’’; and

7 (E) by inserting ‘‘or members’’ after ‘‘State

8 bank and national bank shareholders’’;

9 (5) in subsection (f), by inserting ‘‘or providing

10 insurance as principal, agent, or broker (except to the

11 extent permitted under subparagraph (A) or (E) of

12 section 4(c)(8) of the Bank Holding Company Act of

13 1956)’’ after ‘‘or deposit taking’’; and

14 (6) in the heading for such section, by striking

15 ‘‘CORPORATION’’ and inserting ‘‘COMPANY’’.

16 (f) AMENDMENTS TO SECTION 5.—Section 5 of the

17 Bank Service Corporation Act (12 U.S.C. 1865) is amend18 ed—

19 (1) by striking ‘‘corporation’’ each place such

20 term appears and inserting ‘‘company’’; and

21 (2) in the heading for such section, by striking

22 ‘‘CORPORATIONS’’ and inserting ‘‘COMPANIES’’.

23 (g) AMENDMENTS TO SECTION 6.—Section 6 of the

24 Bank Service Corporation Act (12 U.S.C. 1866) is amend25 ed—
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1 (1) by striking ‘‘corporation’’ each place such

2 term appears and inserting ‘‘company’’;

3 (2) by inserting ‘‘or is not a member of’’ after

4 ‘‘does not own stock in’’;

5 (3) by striking ‘‘the nonstockholding institution’’

6 and inserting ‘‘such depository institution’’;

7 (4) by inserting ‘‘or is a member of’’ after ‘‘that

8 owns stock in’’;

9 (5) in paragraphs (1) and (2), by inserting ‘‘or

10 nonmember’’ after ‘‘nonstockholding’’; and

11 (6) in the heading for such section by inserting

12 ‘‘OR NONMEMBERS’’ after ‘‘NONSTOCKHOLDERS’’.

13 (h) AMENDMENTS TO SECTION 7.—Section 7 of the

14 Bank Service Corporation Act (12 U.S.C. 1867) is amend15 ed—

16 (1) by striking ‘‘corporation’’ each place such

17 term appears and inserting ‘‘company’’;

18 (2) in subsection (a)—

19 (A) by inserting ‘‘or principal member’’

20 after ‘‘principal shareholder’’; and

21 (B) by inserting ‘‘or member’’ after ‘‘other

22 shareholder’’; and

23 (3) in the heading for such section, by striking

24 ‘‘CORPORATIONS’’ and inserting ‘‘COMPANIES’’.
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1 SEC. 243. BANK INVESTMENTS IN EDGE ACT AND AGREE2 MENT CORPORATIONS.

3 The 10th undesignated paragraph of section 25A of the

4 Federal Reserve Act (12 U.S.C. 618) is amended by striking

5 the last sentence and inserting the following: ‘‘Any national

6 bank may invest in the stock of any corporation organized

7 under this section. The aggregate amount of stock held by

8 any national bank in all corporations engaged in business

9 of the kind described in this section or section 25 shall not

10 exceed an amount equal to 10 percent of the capital and

11 surplus of such bank unless the Board determines that the

12 investment of an additional amount by the bank would not

13 be unsafe or unsound and, in any case, shall not exceed

14 an amount equal to 25 percent of the capital and surplus

15 of such bank.’’.

16 SEC. 244. REPORT ON THE RECONCILIATION OF DIF17 FERENCES BETWEEN REGULATORY AC18 COUNTING PRINCIPLES AND GENERALLY AC19 CEPTED ACCOUNTING PRINCIPLES.

20 Before the end of the 180-day period beginning on the

21 date of the enactment of this Act, each appropriate Federal

22 banking agency (as defined in section 3 of the Federal De23 posit Insurance Act) shall submit to the Committee on

24 Banking and Financial Services of the House of Represent25 atives and the Committee on Banking, Housing, and Urban

26 Affairs of the Senate a report on the actions taken and to
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1 be taken by the agency to eliminate or conform inconsistent

2 or duplicative accounting and reporting requirements ap3 plicable to reports or statements filed with any such agency

4 by insured depository institutions, as required by section

5 121 of the Federal Deposit Insurance Corporation Improve6 ment Act of 1991.

7 SEC. 245. WAIVERS AUTHORIZED FOR RESIDENCY REQUIRE8 MENT FOR NATIONAL BANK DIRECTORS.

9 The 1st sentence of section 5146 of the Revised Statutes

10 of the United States (12 U.S.C. 72) is amended by inserting

11 ‘‘(1) the Comptroller of the Currency may, in the Comptrol12 ler’s discretion, waive the residency requirement in the case

13 of any director of a national bank to whom the requirement

14 would otherwise apply, and (2)’’ after ‘‘except that’’.

15 TITLE III—LENDER LIABILITY

16 SEC. 301. LENDER LIABILITY.

17 (a) IN GENERAL.—The Federal Deposit Insurance Act

18 (12 U.S.C. 1811 et seq.) is amended by adding after section

19 44, the following new section:

20 ‘‘SEC. 45. LENDER, FIDUCIARY, AND GOVERNMENT AGENCY

21 ENVIRONMENTAL LIABILITIES.

22 ‘‘(a) LENDER ENVIRONMENTAL LIABILITY.—

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

24 provision or rule of Federal law, no lender, acting as

25 defined in this section, shall be liable pursuant to a
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1 Federal environmental law, except as provided in this

2 section.

3 ‘‘(2) ACTUAL PARTICIPATION REQUIRED.—A

4 lender shall only be liable pursuant to a Federal envi5 ronmental law when the lender actually participates

6 in management of another person’s activities which

7 create liability under the same Federal environmental

8 law.

9 ‘‘(3) DEFINITIONS.—The following definitions

10 shall apply for purposes of this section:

11 ‘‘(A) PARTICIPATE IN MANAGEMENT.—The

12 term ‘participate in management’ means actu13 ally participating in the management or oper14 ational affairs of other persons’ activities, and

15 does not include merely having the capacity to

16 influence, or the unexercised right to control such

17 activities.

18 ‘‘(B) PARTICIPATE IN MANAGEMENT.—A

19 person shall be considered to ‘participate in

20 management’ while a borrower is still in posses21 sion of property, only if such person—

22 ‘‘(i) exercises decisionmaking control

23 over the environmental compliance of a bor24 rower, such that the person has undertaken

25 responsibility for the hazardous substance
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1 handling or disposal practices of the bor2 rower; or

3 ‘‘(ii) exercises control at a level com4 parable to that of a manager of the enter5 prise of the borrower, such that the person

6 has assumed or manifested responsibility for

7 the overall management of the enterprise en8 compassing day-to-day decisionmaking with

9 respect to environmental compliance, or

10 with respect to substantially all of the oper11 ational aspects (as distinguished from fi12 nancial or administrative aspects) of the

13 enterprise, other than environmental com14 pliance.

15 ‘‘(C) PARTICIPATE IN MANAGEMENT.—The

16 term ‘participate in management’ does not in17 clude engaging in an act or failing to act before

18 the time that an extension of credit is made or

19 a security interest is created in property.

20 ‘‘(D) PARTICIPATE IN MANAGEMENT.—The

21 term ‘participate in management’ does not in22 clude, unless such actions rise to the level of par23 ticipating in management (as defined in sub24 paragraphs (A) and (B))—
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1 ‘‘(i) holding an extension of credit or a

2 security interest or abandoning or releasing

3 an extension of credit or a security interest;

4 ‘‘(ii) including in the terms of an ex5 tension of credit, or in a contract or secu6 rity agreement relating to such an exten7 sion, covenants, warranties, or other terms

8 and conditions that relate to environmental

9 compliance;

10 ‘‘(iii) monitoring or enforcing the

11 terms and conditions of an extension of

12 credit or security interest;

13 ‘‘(iv) monitoring or undertaking 1 or

14 more inspections of property, except that

15 monitoring or undertaking any such inspec16 tion, although not required by this sub17 section, shall provide probative evidence

18 that a holder of a security interest is acting

19 to preserve and protect the property during

20 the time the holder may have possession or

21 control of such property;

22 ‘‘(v) requiring or conducting a re23 sponse action or other lawful means of ad24 dressing the release or threatened release of

25 a hazardous substance in connection with
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1 property prior to, during, or upon the expi2 ration of the term of an extension of credit;

3 ‘‘(vi) providing financial or other ad4 vice or counseling in an effort to mitigate,

5 prevent, or cure default or diminution in

6 the value of the property;

7 ‘‘(vii) restructuring, renegotiating, or

8 otherwise agreeing to alter the terms and

9 conditions of an extension of credit or secu10 rity interest, or exercising forbearance; or

11 ‘‘(viii) exercising other remedies that

12 may be available under applicable law for

13 the breach of any term or condition of the

14 extension of credit or security agreement.

15 ‘‘(E) When a lender did not participate in

16 management of property prior to foreclosure,

17 then the lender shall not be liable even if such

18 person forecloses on property, sells, re-leases, or

19 liquidates property, maintains business activi20 ties, winds up operations, or undertakes any re21 sponse action with respect to property, or takes

22 other measures to preserve, protect, or prepare

23 property prior to sale or disposition, if such per24 son seeks to sell, release, or otherwise divest the

25 property at the earliest practical, commercially
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1 reasonable time, on commercially reasonable

2 terms, taking into account market conditions

3 and legal and regulatory requirements.

4 ‘‘(4) LIMITATION ON LIABILITY.—The liability of

5 any lender that is liable under any Federal environ6 mental law shall be limited to only the cost of any

7 response action or corrective action to the extent and

8 in the amount that the lender actively and directly

9 contributed to the hazardous substance release. A

10 lender shall not be liable for the cost of any response

11 action or corrective action relating to the release of a

12 hazardous substance which commences before and con13 tinues after the lender obtains a security interest in

14 the property so long as the lender does not actively

15 and directly contribute to the hazardous substance re16 lease.

17 ‘‘(b) FIDUCIARY ENVIRONMENTAL LIABILITY.—

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

19 provision or rule of Federal law, no fiduciary, acting

20 as defined in this section, shall be liable pursuant to

21 any Federal environmental law, except as provided in

22 this section.

23 ‘‘(2) LIABILITY OF FIDUCIARY.—

24 ‘‘(A) Subject to subparagraphs (B) and (C),

25 a fiduciary holding title to property or otherwise
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1 affiliated with property solely in a fiduciary ca2 pacity shall be personally subject to the obliga3 tions and liabilities of any person under any

4 Federal environmental law, to the same extent

5 as if the property were held by the fiduciary free

6 of trust.

7 ‘‘(B) The personal obligations and liabil8 ities of a fiduciary referred to in subparagraph

9 (A) shall be limited to the extent to which the as10 sets of the trust or estate are sufficient to indem11 nify the fiduciary, unless—

12 ‘‘(i) the obligations and liabilities

13 would have arisen even if the person had

14 not served as a fiduciary;

15 ‘‘(ii) the fiduciary’s own failure to ex16 ercise due care with respect to property

17 caused or contributed to the release of haz18 ardous substances following establishment of

19 the trust, estate, or fiduciary relationship;

20 or

21 ‘‘(iii) the fiduciary had a role in estab22 lishing the trust, estate, or fiduciary rela23 tionship, and such trust, estate, or fiduciary

24 relationship has no objectively reasonable or

25 substantial purpose apart from the avoid-
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1 ance or limitation of liability under an en2 vironmental law.

3 Nothing in the preceding sentence shall be con4 strued as requiring indemnification by an em5 ployee benefit plan (within the meaning of para6 graph (3) of section 3 of the Employee Retire7 ment Income Security Act of 1974), or by any

8 trust forming a part thereof, of any fiduciary of

9 such plan contrary to the terms of the plan or

10 in an amount in excess of the amount permitted

11 under the terms of such plan.

12 ‘‘(C) A fiduciary shall not be personally lia13 ble for undertaking or directing another to un14 dertake a response action.

15 ‘‘(3) RULE OF CONSTRUCTION.—No provision of

16 this subsection shall be construed as affecting the li17 ability, if any, of any person who—

18 ‘‘(A)(i) acts in a capacity other than a fi19 duciary capacity; and

20 ‘‘(ii) directly or indirectly benefits from a

21 trust or fiduciary relationship; or

22 ‘‘(B)(i) is a beneficiary and a fiduciary

23 with respect to the same fiduciary estate; and

24 ‘‘(ii) as a fiduciary, receives benefits that

25 exceed customary or reasonable compensation,
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1 and incidental benefits, permitted under other

2 applicable laws.

3 ‘‘(c) DEFINITIONS.—For purposes of subsections (a)

4 and (b), the following definitions shall apply:

5 ‘‘(1) FEDERAL ENVIRONMENTAL LAW.—The term

6 ‘Federal environmental law’ means any Federal stat7 ute or rule of common law with the purpose of protec8 tion of the environment and any Federal regulation

9 promulgated thereunder and any State statute or reg10 ulation created as a federally approved or delegated

11 program implementing these laws, including the fol12 lowing:

13 ‘‘(A) The Federal Insecticide, Fungicide,

14 and Rodenticide Act (7 U.S.C. 136 et seq.).

15 ‘‘(B) The Toxic Substances Control Act (15

16 U.S.C. 2601 et seq.).

17 ‘‘(C) The Federal Water Pollution Control

18 Act (33 U.S.C. 1251 et seq.).

19 ‘‘(D) The Oil Pollution Act of 1990 (33

20 U.S.C. 2701 et seq.).

21 ‘‘(E) The Clean Air Act (42 U.S.C. 7401 et

22 seq.).

23 ‘‘(F) The Solid Waste Disposal Act (42

24 U.S.C. 6901 et seq.).
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1 ‘‘(G) The Comprehensive Environmental

2 Response, Compensation, and Liability Act of

3 1980 (42 U.S.C. 9601 et seq.).

4 ‘‘(H) The Pollution Prevention Act of 1990

5 (42 U.S.C. 13101 et seq.).

6 ‘‘(2) EXTENSION OF CREDIT.—The term ‘exten7 sion of credit’ means the making or renewal of any

8 loan, a granting of a line of credit or extending credit

9 in any manner, such as an advance by means of an

10 overdraft or the issuance of a standby letter of credit,

11 and a lease finance transaction—

12 ‘‘(A) in which the lessor does not initially

13 select the leased property and does not, during

14 the lease term, control the daily operation or

15 maintenance of the property; or

16 ‘‘(B) that conforms with regulations issued

17 by the appropriate Federal banking agency or

18 the appropriate State bank supervisory (as these

19 terms are defined in section 3 of the Federal De20 posit Insurance Act or with regulations issued by

21 the National Credit Union Administration

22 Board, as appropriate.

23 ‘‘(3) FIDUCIARY.—The term ‘fiduciary’ means a

24 person who acts for the exclusive benefit of another

25 person as a bona fide fiduciary within the meaning
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1 of section 3(21) of the Employee Retirement Income

2 Security Act of 1974, trustee, executor, administrator,

3 custodian, guardian, conservator, receiver, committee

4 of estates of lunatics or other disabled persons, or per5 sonal representative; except, that the term ‘fiduciary’

6 does not include any person—

7 ‘‘(A) who owns, or controls, is affiliated

8 with, or takes any action with respect to prop9 erty on behalf of or for the benefit of a lender or

10 takes any action to protect a lender’s extension

11 of credit or security interest (any such person

12 shall be treated as a lender under subsection (a)

13 of this section); or

14 ‘‘(B) who is acting as a fiduciary with re15 spect to a trust or other fiduciary estate that—

16 ‘‘(i) was not created as part of, or to

17 facilitate, one or more estate plans or pur18 suant to the incapacity of a natural person;

19 and

20 ‘‘(ii) was organized for the primary

21 purpose of, or is engaged in, actively carry22 ing on a trade or business for profit.

23 ‘‘(4) FINANCIAL OR ADMINISTRATIVE ASPECT.—

24 The term ‘financial or administrative aspect’ means

25 a function such as a credit manager, accounts pay-
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1 able officer, accounts receivable officer, personnel

2 manager, comptroller, or chief financial officer, or

3 any similar function.

4 ‘‘(5) FORECLOSURE, FORECLOSE.—The terms

5 ‘foreclosure’ and ‘foreclose’ means, respectively, ac6 quiring, and to acquire, property through—

7 ‘‘(A) purchase at sale under a judgment or

8 decree, a power of sale, a nonjudicial foreclosure

9 sale, or from a trustee, deed in lieu of foreclosure,

10 or similar conveyance, or through repossession, if

11 such property was security for an extension of

12 credit previously contracted;

13 ‘‘(B) conveyance pursuant to an extension

14 of credit previously contracted, including the ter15 mination of a lease agreement; or

16 ‘‘(C) any other formal or informal manner

17 by which the person acquires, for subsequent dis18 position, possession of collateral in order to pro19 tect the security interest of the person.

20 ‘‘(6) HAZARDOUS SUBSTANCE.—The term ‘haz21 ardous substance’ means any chemical, biological, or22 ganic, inorganic, or radioactive pollutants, contami23 nants, materials, waste, or other substances regulated

24 under, defined, listed, or included in any Federal en25 vironmental law.
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1 ‘‘(7) LENDER.—The term ‘lender’ means—

2 ‘‘(A) a person that makes a bona fide exten3 sion of credit to or takes a security interest from

4 another person and includes a successor or as5 sign of the person which makes the extension of

6 credit or takes the security interest;

7 ‘‘(B) the Federal National Mortgage Asso8 ciation, the Federal Home Loan Mortgage Cor9 poration, the Federal Agricultural Mortgage Cor10 poration, or other entity that in a bona fide

11 manner is engaged in the business of buying or

12 selling loans on interests therein;

13 ‘‘(C) any person engaged in the business of

14 insuring or guaranteeing against a default in

15 the repayment of an extension of credit, or act16 ing as a surety with respect to an extension of

17 credit, to other persons; or

18 ‘‘(D) any person regularly engaged in the

19 business of providing title insurance who ac20 quires property as a result of assignment or con21 veyance in the course of underwriting claims

22 and claims settlement.

23 ‘‘(8) OPERATIONAL ASPECT.—The term ‘oper24 ational aspect’ means a function such as a facility or
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1 plant manager, operations manager, chief operating

2 officer, or chief executive officer.

3 ‘‘(9) PERSON.—The term ‘person’ means an in4 dividual, firm, corporation, association, partnership,

5 consortium, joint venture, commercial entity, United

6 States Government, State, municipality, commission,

7 political subdivision of a State, or any interstate

8 body.

9 ‘‘(10) PROPERTY.—The term ‘property’ means

10 real, personal, and mixed property.

11 ‘‘(11) RESPONSE ACTION.—The term ‘response

12 action’ shall have the same meaning as that term is

13 defined in section 101 of the Comprehensive Environ14 mental Response, Compensation and Liability Act.

15 ‘‘(12) SECURITY INTEREST.—The term ‘security

16 interest’ means a right under a mortgage, deed of

17 trust, assignment, judgment lien, pledge, security

18 agreement, factoring agreement, or lease, or any other

19 right accruing to a person to secure the repayment of

20 money, the performance of a duty, or some other obli21 gation.

22 ‘‘(d) SAVINGS CLAUSE.—Nothing in subsections (a)

23 (b), or (c), shall—
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1 ‘‘(1) affect the rights or immunities or other de2 fenses that are already available to lenders or fidu3 ciaries under any Federal environmental law;

4 ‘‘(2) be construed to create any liability for any

5 lender or fiduciary; or

6 ‘‘(3) create a private right of action against any

7 lender or fiduciary.

8 ‘‘(e) FEDERAL BANKING AND LENDING AGENCY ENVI9 RONMENTAL LIABILITY.—

10 ‘‘(1) GOVERNMENTAL ENTITIES.—

11 ‘‘(A) BANKING AND LENDING AGENCIES.—

12 Except as provided in paragraph (C), a Federal

13 banking or lending agency shall not be liable

14 under any law imposing strict liability for the

15 release or threatened release of petroleum or a

16 hazardous substance at or from property (includ17 ing any right or interest therein) acquired—

18 ‘‘(i) in connection with the exercise of

19 receivership or conservatorship authority, or

20 the liquidation or winding up of the affairs

21 of an insured depository institution, includ22 ing any of its subsidiaries, and bridge bank;

23 ‘‘(ii) in connection with the provision

24 of loans, discounts, advances, guarantees,

25 insurance, or other financial assistance; or
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1 ‘‘(iii) in connection with property re2 ceived in any civil or criminal proceeding,

3 or administrative enforcement action,

4 whether by settlement or order.

5 ‘‘(B) APPLICATION OF STATE LAW.—Noth6 ing in paragraph (e) shall be construed as pre7 empting, affecting, applying to, or modifying

8 any State law, or any rights, actions, cause of

9 action, or obligations under State law, except

10 that liability under State law shall not exceed

11 the value of the agency’s interest in the asset giv12 ing rise to such liability. Nothing in this section

13 shall be construed to prevent a Federal banking

14 or lending agency from agreeing with a State to

15 transfer property to such State in lieu of any li16 ability that might otherwise be imposed under

17 State law.

18 ‘‘(C) LIMITATION.—Notwithstanding para19 graph (A), and subject to section 107(d) of the

20 Comprehensive Environmental Response, Com21 pensation, and Liability Act of 1980, a Federal

22 banking or lending agency that directly caused

23 or materially contributed to the release of petro24 leum or a hazardous substance may be liable for
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1 removal, remedial, or other response action per2 taining to that release.

3 ‘‘(D) SUBSEQUENT PURCHASER.—The im4 munity provided by paragraphs (A) and (B)

5 shall extend to the first subsequent purchaser of

6 property described in such paragraph from a

7 Federal banking or lending agency, unless such

8 purchaser—

9 ‘‘(i) would otherwise be liable or poten10 tially liable for all or part of the costs of the

11 removal, remedial, or other response action

12 due to a prior relationship with the prop13 erty;

14 ‘‘(ii) is or was affiliated with or relat15 ed to a party described in subparagraph (i);

16 ‘‘(iii) fails to agree to take reasonable

17 steps necessary to abate the release or

18 threatened release or to protect public health

19 and safety in a manner consistent with the

20 purposes of applicable Federal environ21 mental laws; or

22 ‘‘(iv) directly causes or significantly

23 and materially contributes to any addi24 tional release or threatened release on the

25 property.
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1 ‘‘(E) FEDERAL OR STATE ACTION.—Not2 withstanding subparagraph (D), if a Federal

3 agency or State environmental agency is re4 quired to take remedial action due to the failure

5 of a subsequent purchaser to carry out, in good

6 faith, the agreement described in subparagraph

7 (D)(iii), such subsequent purchaser shall reim8 burse the Federal or State environmental agency

9 for the costs of such remedial action. Any such

10 reimbursement shall not exceed the increase in

11 the fair market value of the property attributable

12 to the remedial action.

13 ‘‘(2) LIEN EXEMPTION.—Notwithstanding any

14 other provision of law, any property held by a subse15 quent purchaser referred to in paragraph (1)(D) or

16 held by a Federal banking or lending agency shall not

17 be subject to any lien for costs or damages associated

18 with the release or threatened release of petroleum or

19 a hazardous substance existing at the time of the

20 transfer.

21 ‘‘(3) EXEMPTION FROM COVENANTS TO REMEDI22 ATE.—A Federal banking or lending agency shall be

23 exempt from any law requiring such agency to grant

24 covenants warranting that a removal, remedial, or

25 other response action has been, or will in the future
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1 be, taken with respect to property acquired in the

2 manner described in paragraph (e)(1)(A).

3 ‘‘(4) DEFINITIONS.—For purposes of subsection

4 (e), the following definitions shall apply:

5 ‘‘(A) FEDERAL BANKING OR LENDING AGEN6 CY.—The term ‘Federal banking or lending agen7 cy’ means the Corporation, the Resolution Trust

8 Corporation, the Board of Governors of the Fed9 eral Reserve System, the Comptroller of the Cur10 rency, the Office of Thrift Supervision, a Federal

11 Reserve Bank, a Federal Home Loan Bank, the

12 Department of Housing and Urban Develop13 ment, the National Credit Union Administration

14 Board, the Farm Credit Administration, the

15 Farm Credit System Insurance Corporation, the

16 Farm Credit System Assistance Board, the

17 Farmers Home Administration, the Rural Elec18 trification Administration, the Small Business

19 Administration, and any other Federal agency

20 acting in a similar capacity, in any of their ca21 pacities, and their agents or appointees.

22 ‘‘(B) HAZARDOUS SUBSTANCE.—The term

23 ‘hazardous substance’ has the same meaning as

24 in section 101(14) of the Comprehensive Envi-
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1 ronmental Response, Compensation, and Liabil2 ity Act of 1980.

3 ‘‘(C) RELEASE.—The term ‘release’ has the

4 same meaning as in section 101(22) of the Com5 prehensive Environmental Response, Compensa6 tion, and Liability Act of 1980, and includes the

7 use, storage, disposal, treatment, generation, or

8 transportation of a hazardous substance.

9 ‘‘(5) SAVINGS CLAUSE.—Nothing in subsection

10 (e) shall—

11 ‘‘(A) affect the rights or immunities or other

12 defenses that are available under this Act or

13 other applicable law to any party, subject to the

14 provisions of this section;

15 ‘‘(B) be construed to create any liability for

16 any party; or

17 ‘‘(C) create a private right of action against

18 an insured depository institution or lender or

19 against a Federal banking or lending agency.’’.

20 (b) EFFECTIVE DATE.—This section shall take effect

21 upon the date of the enactment of this Act and shall apply

22 to any claim against any lender, fiduciary, or government

23 agency under any Federal environmental law that has not

24 been finally resolved by adjudication or settlement before

25 such date.
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1 TITLE IV—ANNUAL STUDY AND

2 REPORT ON IMPACT ON

3 LENDING TO SMALL BUSI4 NESS

5 SEC. 401. ANNUAL STUDY AND REPORT.

6 Not later than 12 months after the date of the enact7 ment of this Act, and annually thereafter, the Board of Gov8 ernors of the Federal Reserve System, the Director of the

9 Office of Thrift Supervision, the Comptroller of the Cur10 rency, and the Board of Directors of the Federal Deposit

11 Insurance Corporation shall jointly conduct a study and

12 submit to the Congress a report on the extent to which this

13 Act and the amendments made by this Act have, through

14 reductions in regulatory burdens, resulted in increased

15 lending to small businesses.