I

104TH CONGRESS

1ST SESSION H. R. 1858

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

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’’.

6 (b) TABLE OF CONTENTS.—

Sec. 1. Short title; table of contents.

TITLE I—REDUCTIONS IN GOVERNMENT OVERREGULATION

Subtitle A—The Home Mortgage Process

Sec. 101. Transfer of RESPA regulatory authority; elimination of redundant

regulators.

Sec. 102. Truth in Lending Act and RESPA comparability.

Sec. 103. Increased regulatory flexibility under the Truth in Lending Act.
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Sec. 104. Reductions in RESPA regulatory burdens; clarifying amendments.

Sec. 105. Alternative disclosures for adjustable rate mortgages.

Sec. 106. Treatment of certain charges.

Sec. 107. Exemption from rescission.

Sec. 108. Tolerance; basis of disclosures.

Sec. 109. Limitation on liability.

Sec. 110. Applicability.

Sec. 111. Limitation on rescission period.

Sec. 112. Calculation of actual damages.

Sec. 113. Assignee liability.

Sec. 114. Recovery of fees.

Sec. 115. Homeownership debt counseling notification.

Sec. 116. Home Mortgage Disclosure Act.

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 banks.

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

Sec. 127. Prohibition on additional reporting under CRA.

Sec. 128. Technical amendment.

Sec. 129. Duplicative reporting.

Subtitle C—Consumer Banking Reforms

Sec. 131. Truth in Savings.

Sec. 132. Unauthorized electronic fund transfers.

Sec. 133. Liability for unauthorized use of credit cards.

Sec. 134. Information sharing.

Sec. 135. Electronic Funds Transfer Act clarification.

Subtitle D—Equal Credit Opportunity Act Amendments

Sec. 141. Short title.

Sec. 142. Findings and purpose.

Sec. 143. Equal Credit Opportunity Act amendments.

Sec. 144. Fair Credit Reporting Act amendments.

Sec. 145. Incentives for self-testing.

Sec. 146. Credit scoring systems.

Sec. 147. Effective date.

Subtitle E—Consumer Leasing Act Amendments

Sec. 151. Short title.

Sec. 152. Congressional findings and declaration of purpose.

Sec. 153. Regulations.

Sec. 154. Segregated leasing disclosures.

Sec. 155. Consumer lease advertising.

Subtitle F—Federal Home Loan Bank Amendments

Sec. 161. Application for membership in the FHLB system.

Sec. 162. Federal Home Loan Bank external auditors.
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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 bank merger act 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. Eliminate duplicative requirements imposed on bank holding companies 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/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.

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. Consolidation of appraisal subcommittee.

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.

Sec. 227. Cost reimbursement.

Sec. 228. Identification of nonbank financial institution customers.

Sec. 229. Paperwork reduction review.

Sec. 230. Repeal of unnecessary reporting requirements.

Sec. 231. Daily confirmations for hold-in-custody repurchase transactions.

Sec. 232. Required regulatory review of regulations.

Sec. 233. Country risk requirements.

Sec. 234. Audit costs.

Sec. 235. Due process protections.

Sec. 236. Culpability standards for outside directors.

Sec. 237. Rules on deposit taking.

Sec. 238. Transition period for new regulations.

Sec. 239. Foreign bank applications.

Sec. 240. Duplicate examination of foreign banks.

Sec. 241. Second mortgages.

Sec. 242. OCC authority.

TITLE III—LENDER LIABILITY

Sec. 301. Lender liability.
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1 TITLE I—REDUCTIONS IN GOV2 ERNMENT OVERREGULATION

3 Subtitle A—The Home Mortgage

4 Process

5 SEC. 101. TRANSFER OF RESPA REGULATORY AUTHORITY;

6 ELIMINATION OF REDUNDANT REGULATORS.

7 (a) TRANSFER OF AUTHORITY.—The Real Estate

8 Settlement Procedures Act (12 U.S.C. 2601 et seq.) is

9 amended—

10 (1) by striking ‘‘Secretary’’ each time it ap11 pears and inserting ‘‘Board’’, except in sections

12 3(1)(B)(ii), 3(6) and section 14 (12 U.S.C.

13 2602(1)(B)(ii), 2602(6) and 2612, respectively); and

14 (2) in section 3 by adding at the end thereof a

15 new paragraph (9) as follows:

16 ‘‘(9) the term ‘‘Board’’ means the Board of

17 Governors of the Federal Reserve System.’’.

18 (b) ELIMINATION OF REDUNDANT REGULATORS.—

19 The Real Estate Settlement Procedures Act (12 U.S.C.

20 2601 et seq.) is amended—

21 (1) in section 19 by striking subsection (a) and

22 inserting in lieu thereof the following:

23 ‘‘(a) The Board shall prescribe regulations to carry

24 out the purpose of this title. These regulations may con25 tain such classifications, differentiations, or other provi-
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1 sions, and may provide for such adjustments and excep2 tions for any class of transactions, as in the judgment of

3 the Board are necessary or proper to effectuate the pur4 poses of this title, to prevent circumvention or evasion

5 thereof, or to facilitate compliance therewith. Such regula6 tions shall minimize the burdens and cost imposed upon

7 creditors and shall ensure that costs, burdens, and com8 plexities to consumers are reduced.’’; and

9 (2) by inserting after section 19 of the Real Es10 tate Settlement Procedures Act (12 U.S.C. 2617)

11 the following:

12 ‘‘SEC. 20. ADMINISTRATIVE ENFORCEMENT.

13 ‘‘(a) Compliance with the requirements imposed

14 under this subtitle shall be enforced under—

15 ‘‘(1) section 8 of the Federal Deposit Insurance

16 Act, in the case of—

17 ‘‘(A) national banks, and Federal branches

18 and Federal agencies of foreign banks, by the

19 Office of the Comptroller of the Currency;

20 ‘‘(B) member banks of the Federal Reserve

21 System (other than national banks), branches

22 and agencies of foreign banks (other than Fed23 eral branches, Federal agencies, and insured

24 State branches of foreign banks), commercial

25 lending companies owned or controlled by for-
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1 eign banks, and organizations operating under

2 section 25 or 25A of the Federal Reserve Act,

3 by the Board; and

4 ‘‘(C) banks insured by the Federal Deposit

5 Insurance Corporation (other than members of

6 the Federal Reserve System) and insured State

7 branches of foreign banks, by the Board of Di8 rectors of the Federal Deposit Insurance Cor9 poration;

10 ‘‘(2) section 8 of the Federal Deposit Insurance

11 Act, by the Director of the Office of Thrift Super12 vision, in the case of a savings association the depos13 its of which are insured by the Federal Deposit In14 surance Corporation.

15 ‘‘(3) the Federal Credit Union Act, by the Ad16 ministrator of the National Credit Union Adminis17 tration with respect to any Federal credit union.

18 ‘‘(4) The Packers and Stockyards Act of 1921

19 (except as provided in section 406 of that Act), by

20 the Secretary of Agriculture with respect to any ac21 tivities subject to that Act.

22 ‘‘(5) the Farm Credit Act of 1971, by the Farm

23 Credit Administration with respect to any Federal

24 land bank, Federal land bank association, Federal
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1 intermediate credit bank or production credit asso2 ciation.

3 The terms used in paragraph (1) that are not defined in

4 this title or otherwise defined in section 3(s) of the Federal

5 Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the

6 meaning given to them in section 1(b) of the International

7 Banking Act of 1978 (12 U.S.C. 3101).

8 ‘‘(b) For the purpose of the exercise by any agency

9 referred to in subsection (a) of its powers under any Act

10 referred to in that subsection, a violation of any require11 ment imposed under this title shall be deemed to be a vio12 lation of a requirement imposed under the Act. In addition

13 to its powers under any provision of law specifically re14 ferred to in subsection (a), each of the agencies referred

15 to in that subsection may exercise, for the purpose of en16 forcing compliance with any requirement imposed under

17 this title, any other authority conferred on it by law.

18 ‘‘(c) Except to the extent that the enforcement of the

19 requirements imposed under this title is specifically com20 mitted to some other Government agency under subsection

21 (a), the Federal Trade Commission shall enforce such re22 quirements. For the purpose of the exercise by the Federal

23 Trade Commission of its functions and powers under the

24 Federal Trade Commission Act, a violation of any require25 ment imposed under this title shall be deemed a violation
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1 of a requirement imposed under that Act. All of the func2 tions and powers of the Federal Trade Commission under

3 the Federal Trade Commission Act are available to the

4 Commission to enforce compliance by any person with the

5 requirements imposed under this title, irrespective of

6 whether that person is engaged in commerce or meets any

7 other jurisdictional tests in the Federal Trade Commission

8 Act.’’.

9 SEC. 102. TRUTH IN LENDING AND RESPA COMPARABILITY.

10 (a) Section 102 of the Truth in Lending Act (15

11 U.S.C. 1601) is amended by adding a new subsection (c)

12 as follows:

13 ‘‘(c) The Congress also finds that the disclosure and

14 other requirements related in consumer credit have be15 come overly costly, burdensome, and complex to consum16 ers and to creditors. It is also the purpose of this title

17 to reduce the complexity of the disclosure requirements for

18 creditors and consumers by directing the Board to reduce

19 the complexity and difficulty of understanding, preparing

20 and providing disclosures for credit transactions. Improve21 ments in the disclosures and timing of disclosures should

22 serve the dual purpose of reducing compliance errors and

23 increasing the ability of consumers to understand and use

24 the information provided in the disclosures. Clarifications

25 should include the development of uniform terms to de-
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1 scribe credit costs and uniform formats to arrange and

2 provide the information both under this Act and other

3 Acts affecting the consumer credit process.’’.

4 (b) Section 105 of the Truth in Lending Act (15

5 U.S.C. 1604) is amended by inserting a new subsection

6 (e) as follows:

7 ‘‘(e) The Board shall by regulation eliminate, modify,

8 or simplify any disclosure required by this title, including

9 the content and timing of the disclosure, where such action

10 will make disclosures and timing of disclosures required

11 by this title uniform with other laws relating to the disclo12 sure of information in connection with credit transactions,

13 including the Real Estate Settlement Procedures Act. No

14 additional disclosure requirements may be added as a re15 sult of this subsection.’’.

16 (c) Section 2 of the Real Estate Settlement Proce17 dures Act (12 U.S.C. 2602) is amended by adding to the

18 end of subsection (a) the following: ‘‘The Congress also

19 finds that the disclosure and other requirements related

20 to consumer credit, including mortgage transactions, have

21 become overly costly, burdensome, and complex to con22 sumers and to creditors and that changes to the required

23 disclosures related to such credit must be streamlined and

24 reduced in order to eliminate unnecessary cost, burdens,

25 and complexity.’’.
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1 (d) Section 19 of the Real Estate Procedures Act (12

2 U.S.C. 2617) (as amended by Section 101 of this Act)

3 is amended by inserting the following new subsection (b)

4 and redesignating the remaining subsections accordingly:

5 ‘‘(b) The Board shall by regulation eliminate, modify,

6 or simplify any disclosure required by this title, including

7 the content and timing of the disclosure, where such action

8 will make disclosures and timing of disclosures required

9 by this title uniform with other laws relating to the disclo10 sure of information in connection with credit transactions,

11 including the Truth in Lending Act. No additional disclo12 sure requirements may be added as a result of this sub13 section.’’.

14 SEC. 103. INCREASED REGULATORY FLEXIBILITY UNDER

15 THE TRUTH IN LENDING ACT.

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

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

18 adding at the end the following new paragraph:

19 ‘‘(7) Transactions for which the Board, by reg20 ulation, determines that coverage under the Act is

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

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

23 Truth in Lending Act (15 U.S.C. 1604) is amended by

24 redesignating subsections (b) through (d) as (c) through

25 (e) and inserting a new subsection (b) as follows:
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1 ‘‘(b) EXEMPTIVE AUTHORITY.—The Board shall ex2 empt from all or parts of this title any class of trans3 actions for which, in the Board’s judgment, coverage

4 under all or part of this title does not provide a measur5 able benefit to consumers in the form of useful informa6 tion or protection. In determining which classes of trans7 actions to exempt in whole or in part, the Board shall con8 sider, among other factors, the following:

9 ‘‘(1) The amount of the loan or closing costs

10 and whether the disclosures, right of rescission, and

11 other provisions are necessary, particularly for small

12 loans.

13 ‘‘(2) Whether the requirements of this title

14 complicate, hinder, or make more expensive the cred15 it process for the class of transactions.

16 ‘‘(3) The status of the borrower, including, the

17 borrowers’ related financial arrangements, the finan18 cial sophistication of the borrower relative to the

19 type of transaction, and the importance of the credit

20 and related supporting property to the borrower.’’.

21 SEC. 104. REDUCTIONS IN RESPA REGULATORY BURDENS;

22 CLARIFYING AMENDMENTS.

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

24 Real Estate Settlement Procedures Act (12 U.S.C. 2605),

25 is amended to read as follows:
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1 ‘‘(a) DISCLOSURE TO APPLICANT RELATING TO AS2 SIGNMENT, SALE, OR TRANSFER OF LOAN SERVICING.—

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

4 federally related mortgage loan shall disclose to each

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

6 application for the loan, whether the servicing of any

7 such loan may be assigned, sold, or transferred to

8 any other person at any time while such loan is out9 standing.

10 ‘‘(2) SIGNATURE OF APPLICANT.—Any disclo11 sure of the information required under paragraph

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

13 unless the disclosure is accompanied by a written

14 statement, in such form as the Secretary shall de15 velop before the expiration of the 180-day period be16 ginning on the date of enactment, that the applicant

17 has read and understood the disclosure and that is

18 evidenced by the signature of the applicant at the

19 place where such statement appears in the applica20 tion.’’.

21 (b) EFFECTIVE DATE.—This subsection shall become

22 effective 180 days after the date of enactment.

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

24 Real Estate Settlement Procedures Act (12 U.S.C.

25 2602(1)(A)), is amended by striking ‘‘or subordinate’’.
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1 (d) CONSISTENCY OF RESPA AND TRUTH IN LEND2 ING ACT EXEMPTION OF BUSINESS LOANS.—Section 7 of

3 the Real Estate Settlement Procedures Act (12 U.S.C.

4 2606) is amended—

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

6 ‘‘This Act’’; and

7 ‘‘(2) inserting a new subsection (b) as follows:

8 ‘‘(b) INTERPRETATION.—In issuing regulations pur9 suant to Section 19(a) of this Act, the Board shall ensure

10 that with regard to subsection (a), the exemption for busi11 ness credit includes all ‘‘business credit’’ exempted from

12 the Truth in Lending Act (15 U.S.C. 1601) as that term

13 has been interpreted by the Board of Governors of the

14 Federal Reserve System in Section 226.3(a) of Regulation

15 Z (12 C.F.R. 226.3(a)) as in effect on the date of enact16 ment.’’.

17 SEC. 105. ALTERNATIVE DISCLOSURES FOR ADJUSTABLE

18 RATE MORTGAGES.

19 (a) Section 127A(a)(2)(G) of the Truth in Lending

20 Act (15 U.S.C. 1637a(a)(2)(G)) is amended by inserting

21 before the semicolon ‘‘, or a statement that the monthly

22 payment may increase or decrease significantly due to in23 creases in the annual percentage rate’’.
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1 (b) Section 128(a) of the Truth in Lending Act (15

2 U.S.C. 1638(a)) is amended by inserting at the end the

3 following new paragraph (14):

4 ‘‘(14) In any variable rate residential mortgage

5 transaction, at the creditors’ option, a statement

6 that the monthly payment may increase or decrease

7 substantially, or a historical example illustrating the

8 effects of interest rate changes implemented accord9 ing to the loan program.’’.

10 SEC. 106. CERTAIN CHARGES.

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

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

13 by adding after the second sentence the following new sen14 tence: ‘‘The finance charge shall not include fees and

15 amounts imposed by third parties not affiliated with the

16 creditor (including settlement agents, attorneys, and es17 crow and title companies) if the creditor does not expressly

18 require the imposition of the charges and does not retain

19 the charges.’’.

20 (b) TAXES ON SECURITY INSTRUMENTS OR EVI21 DENCES OF INDEBTEDNESS.—Section 106(d) of the

22 Truth in Lending Act (15 U.S.C. 1605(d)) is amended

23 by adding at the end the following new paragraph:

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

25 on documents evidencing indebtedness if the pay-
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1 ment of such taxes is a precondition for the instru2 ment securing the evidence of indebtedness.’’.

3 (c) PREPARATION OF LOAN DOCUMENTS.—Section

4 106(e)(2) of the Truth in Lending Act (15 U.S.C.

5 1605(e)(2)) is amended to read as follows:

6 ‘‘(2) Fees for preparation of loan-related docu7 ments and attending or conducting settlement.’’.

8 (d) FEES RELATING TO PEST INFESTATIONS, IN9 SPECTIONS, AND HAZARDS.—Section 106(e)(5) of the

10 Truth in Lending Act (15 U.S.C. 1605(e)(5)) is amended

11 by inserting ‘‘, including fees related to pest infestations,

12 premises and structural inspections, and flood hazards’’

13 before the period.

14 SEC. 107. EXEMPTIONS FROM RESCISSION.

15 (a) CERTAIN REFINANCINGS.—Section 125(e) of the

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

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

18 (3);

19 (2) by striking the period at the end of para20 graph (4) and inserting instead ‘‘; or’’; and

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

22 paragraph:

23 ‘‘(5) a transaction, other than a mortgage re24 ferred to in section 103(aa), which—
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1 ‘‘(A) is secured by a first lien, in any

2 amount; and

3 ‘‘(B) constitutes a refinancing or consoli4 dation of an existing extension of credit.’’.

5 (b) TECHNICAL AND CONFORMING AMENDMENT.—

6 Section 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

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

13 by adding at the end the following new subsection:

14 ‘‘(f) TOLERANCE 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

18 by any finance charge shall be treated as being accurate

19 for purposes of this title if the amount disclosed as the

20 finance charge does not vary from the actual finance

21 charge by more than an amount equal to one-half of the

22 numerical tolerance corresponding to, and generated by,

23 the tolerance provided by section 107(c) with respect to

24 the annual percentage rate.’’.
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1 (b) BASIS OF DISCLOSURE FOR PER DIEM INTER2 EST.—Section 121(c) of the Truth in Lending Act (15

3 U.S.C. 1631(c)) is amended by adding at the end the fol4 lowing new sentence: ‘‘In the case of any consumer credit

5 transaction a portion of the interest on which is deter6 mined on a per diem basis and is to be collected upon

7 the consummation of such transaction, any disclosure with

8 respect to such portion of interest shall be deemed to be

9 accurate for purposes of this title if the disclosure is based

10 on information actually known to the creditor at the time

11 that the disclosure documents are being prepared for the

12 consummation of the transaction.’’.

13 SEC. 109. LIMITATION ON LIABILITY.

14 (a) IN GENERAL.—Chapter 2 of the Truth in Lend15 ing Act (15 U.S.C. 1631 et seq.) is amended by adding

16 at the end the following new section:

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

18 ‘‘(a) LIMITATIONS ON LIABILITY FOR DISCLOSURES

19 RELATING TO CERTAIN FEES AND CHARGES OTHER

20 THAN FINANCE CHARGES.—

21 ‘‘(1) IN GENERAL.—For transactions con22 summated before the date of the enactment of the

23 Financial Institutions Regulatory Relief Act of

24 1995, a creditor or any assignee of a creditor shall

25 have no civil, administrative, or criminal liability
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1 under this title for, and a consumer shall have no

2 extended rescission rights under section 125(f) with

3 respect to, the creditor’s treatment, for disclosure

4 purposes, of—

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

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

7 106(e) (2) and (5) and third party fees and

8 amounts described in section 106(a); and

9 ‘‘(C) delivery charges imposed by a credi10 tor.

11 ‘‘(2) EXCEPTIONS.—Subsection (a) shall not

12 apply to—

13 ‘‘(A) any individual action or counterclaim

14 brought under this title—

15 ‘‘(i) which was filed before October 1,

16 1994; and

17 ‘‘(ii) the pleadings in which (as filed

18 before such date) allege improper disclo19 sure of charges described in paragraph (1),

20 (2), or (3) of subsection (a);

21 ‘‘(B) any class action brought under this

22 title—

23 ‘‘(i) for which a class was certified be24 fore October 1, 1994; and
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1 ‘‘(ii) the pleadings in which (as filed

2 before such date) allege improper disclo3 sure of charges described in paragraph (1),

4 (2), or (3) of subsection (a);

5 ‘‘(C) the named individual plaintiffs in any

6 class action brought under this title—

7 ‘‘(i) which was filed before October 1,

8 1994; and

9 ‘‘(ii) the pleadings in which (as filed

10 before such date) allege improper disclo11 sure of charges described in paragraph (1),

12 (2), or (3) of subsection (a); or

13 ‘‘(D) any consumer credit transaction with

14 respect to which a timely notice of rescission

15 was sent to the creditor before October 1, 1994.

16 ‘‘(b) EXEMPTION FROM LIABILITY FOR FINANCE

17 CHARGE DISCLOSURES WITHIN TOLERANCE LIMITS.—

18 ‘‘(1) IN GENERAL.—In the case of any

19 consumer credit transaction subject to this title, in20 cluding a transaction consummated before the date

21 of the enactment of the Financial Institutions Regu22 latory Relief Act of 1995, no creditor or assignee

23 with respect to such transaction shall have any civil,

24 administrative, or criminal liability under this title

25 for, and no consumer shall have extended rescission
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1 rights under section 125 by reason of, any disclosure

2 relating to the finance charge imposed with respect

3 to such transaction if the amount or percentage ac4 tually disclosed—

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

6 to section 106(f), or

7 ‘‘(B) is greater than the amount or per8 centage required to be disclosed under this title.

9 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

10 apply to—

11 ‘‘(A) any individual action or counterclaim

12 brought under this title which was filed before

13 October 1, 1994;

14 ‘‘(B) any class action brought under this

15 title for which a class was certified before Octo16 ber 1, 1994;

17 ‘‘(C) the named individual plaintiffs in any

18 class action brought under this title which was

19 filed before October 1, 1994; or

20 ‘‘(D) any consumer credit transaction with

21 respect to which a timely notice of rescission

22 was sent to the creditor before October 1,

23 1994.’’.

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

25 for chapter 2 of the Truth in Lending Act is amended
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1 by inserting after the item relating to section 138 the fol2 lowing new item:

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

3 SEC. 110. APPLICABILITY.

4 Except as otherwise provided in section 109, the

5 amendments made by sections 106, 107, 108, 109, 110,

6 111, 112, 113 shall apply to all consumer credit trans7 actions consummated on or after the date of enactment

8 of this Act, except that the amendments made by sub9 sections (a) and (b) of section 107 shall apply to all exten10 sions of credit with respect to which rescission rights have

11 not been asserted as of January 1, 1995.

12 SEC. 111. LIMITATION ON RESCISSION PERIOD.

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

14 U.S.C. 1635(f)) is amended by adding at the end the fol15 lowing sentences: ‘‘The expiration of the right of rescission

16 pursuant to this subsection shall be absolute and no

17 consumer may assert rescission, affirmatively or as a de18 fense, in any action in any State or Federal court after

19 the earlier of the end of the 3-year period beginning on

20 the date of the consummation of the transaction or the

21 sale of the property securing the loan or other extension

22 of credit, except as otherwise provided in the preceding

23 sentence. This subsection shall supersede any State law

24 which is inconsistent with any provision of this sub25 section.’’.
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1 SEC. 112. CALCULATION OF ACTUAL DAMAGES.

2 Paragraph (1) of section 130(a) of the Truth in

3 Lending Act (15 U.S.C. 1640(a)) is amended to read as

4 follows:

5 ‘‘(1) Any actual damages sustained by such

6 person as a result of the failure (to the extent the

7 person demonstrates reliance on the inaccurate dis8 closure which prevented the person from accepting

9 better credit terms actually available to the person

10 from another creditor) and the amount of such dam11 ages shall be the difference between the finance

12 charges actually paid and the finance charges that

13 would have been paid over the same period under

14 credit terms applicable with respect to credit actu15 ally available to the person from another creditor.’’.

16 SEC. 113. ASSIGNEE LIABILITY.

17 (a) VIOLATIONS APPARENT ON THE FACE OF TRANS18 ACTION DOCUMENTS.—Section 131(a) of the Truth in

19 Lending Act (15 U.S.C. 1641(a)) is amended to read as

20 follows:

21 ‘‘(a) LIABILITY OF ASSIGNEE FOR APPARENT VIOLA22 TIONS.—

23 ‘‘(1) IN GENERAL.—Except as otherwise specifi24 cally provided in this title, any civil action against

25 a creditor for a violation of this title, and any pro26 ceeding under section 108 against a creditor, with
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1 respect to a consumer credit transaction may be

2 maintained against any assignee of such creditor

3 only if—

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

5 proceeding is brought is apparent on the face of

6 the disclosure statement provided in connection

7 with such transaction pursuant to this title; and

8 ‘‘(B) the assignment to the assignee was

9 voluntary.

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

11 THE DISCLOSURE DESCRIBED.—For the purpose of

12 this section, a violation is apparent on the face of

13 the disclosure statement if—

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

15 be incomplete or inaccurate from the face of the

16 disclosure statement; or

17 ‘‘(B) the disclosure does not use the terms

18 or format required to be used by this title.’’.

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

20 131 of the Truth in Lending Act (15 U.S.C. 1641) is

21 amended by adding at the end the following new sub22 section:

23 ‘‘(d) TREATMENT OF SERVICER.—

24 ‘‘(1) IN GENERAL.—A servicer of a consumer

25 obligation arising from a consumer credit trans-
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1 action shall not be treated as an assignee of such ob2 ligation for purposes of this section unless the

3 servicer is the owner of the obligation.

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

5 BASIS OF ASSIGNMENT FOR ADMINISTRATIVE CON6 VENIENCE.—A servicer of a consumer obligation

7 arising from a consumer credit transaction shall not

8 be treated as the owner of the obligation for pur9 poses of this section on the basis of an assignment

10 of the obligation from the creditor or another as11 signee to the servicer solely for the administrative

12 convenience of the servicer in servicing the obliga13 tion.

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

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

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

17 Procedures Act of 1974.’’.

18 SEC. 114. RECOVERY OF FEES.

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

20 U.S.C. 1635) is amended—

21 (a) in the first sentence, by inserting ‘‘, except

22 any charge for a appraisal report or credit report’’

23 after ‘‘other charge’’; and
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1 (b) in the second sentence, by striking ‘‘other2 wise’’ and inserting ‘‘as otherwise required under

3 this subsection’’.

4 SEC. 115. HOMEOWNERSHIP DEBT COUNSELING NOTIFICA5 TION.

6 Section 106(c)(5) of the Housing and Urban Devel7 opment Act of 1968 (12 U.S.C. 1701x(c)(5)) is repealed.

8 SEC. 116. HOME MORTGAGE DISCLOSURE ACT.

9 (a) Section 309 of the Home Mortgage Disclosure

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

11 (1) in the second sentence, by striking

12 ‘‘$10,000,000’’ and inserting ‘‘$50,000,000’’; and,

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

14 sentence: ‘‘The Board may also, by regulation, ex15 empt from the provisions of this Act institutions

16 specified in section 303(2)(A) which have total as17 sets as of their last full fiscal year of $50,000,000

18 or greater where the burden of complying with this

19 Act on such institutions outweighs the usefulness of

20 the information required to be disclosed. The exemp21 tions provided under this section shall not be appli22 cable to an institution which the Board, by order,

23 has found a reasonable basis to believe is not fulfill24 ing its obligations to serve the housing needs of the

25 communities and neighborhoods in which it located.
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1 An institution subject to such an order shall be re2 quired to comply with the requirements of this Act

3 for loans made after the time that the order is is4 sued at such time and for such period as the Board

5 deems appropriate. The dollar amount in this section

6 shall be adjusted annually after December 31, 1994,

7 by the annual percentage increase in the Consumer

8 Price Index for Urban Wage Earners and Clerical

9 Workers published by the Bureau of Labor Statis10 tics.’’.

11 (b) Section 304 of the Home Mortgage Disclosure

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

13 following new subsection (m) at the end as follows:

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

16 ‘‘(1) A depository institution will have satisfied

17 the public availability requirements of subsection (a)

18 if such institution keeps the information required

19 under that subsection at its home office and provides

20 notice at the branch locations specified in such sub21 section that such information is available upon re22 quest from the home office of the institution. A

23 home office of the depository institution receiving a

24 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 15 days of

2 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 via a form of electronic medium, such

11 as computer disc.’’.

12 Subtitle B—Community

13 Reinvestment Act Amendments

14 SEC. 121. EXPRESSION OF CONGRESSIONAL INTENT.

15 Subsection (b) of Section 802 of the Community Re16 investment Act of 1977 (12 U.S.C. 2901) is amended to

17 read as follows:

18 ‘‘(b) It is the purpose of this title to require each ap19 propriate Federal financial supervisory agency to use its

20 authority, when examining financial institutions, to en21 courage such institutions to help meet the credit needs of

22 the local communities in which they are chartered consist23 ent with the safe and sound operation of such institutions.

24 When examining financial institutions, a supervisory agen-
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1 cy shall not impose additional burden, recordkeeping, or

2 reporting upon such institutions.’’.

3 SEC. 122. COMMUNITY REINVESTMENT ACT EXEMPTION.

4 The Community Reinvestment Act of 1977 (12

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

6 the following new section:

7 ‘‘SEC. 808. EXAMINATION EXEMPTION.

8 ‘‘A regulated financial institution shall not be subject

9 to the examination requirements of this title or any regula10 tions issued hereunder if—

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

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

13 or other unit of general local government of a State

14 that has a population of not more than 30,000 per15 sons and which is not part of a metropolitan statis16 tical area; and

17 ‘‘(2) the institution and its parent bank holding

18 company have aggregate assets of not more than

19 $100,000,000.

20 The dollar amount in this section shall be adjusted annu21 ally after December 31, 1994, by the annual percentage

22 increase in the Consumer Price Index for Urban Wage

23 Earners and Clerical Workers published by the Bureau of

24 Labor Statistics.’’.
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1 SEC. 123. SELF-CERTIFICATION OF CRA COMPLIANCE.

2 Section 804 of the Community Reinvestment Act of

3 1977 (12 U.S.C. 2903) is amended by adding at the end

4 the following new subsection (c):

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

6 ‘‘(1) CERTIFICATION.—In lieu of being evalu7 ated under section 806A and receiving a written

8 evaluation under section 807, a qualifying financial

9 institution may choose to self-certify to the appro10 priate Federal financial supervisory agency that it is

11 in compliance with the goals of this Act.

12 ‘‘(2) QUALIFYING INSTITUTION.—A financial

13 institution shall be deemed a ‘qualifying institution’

14 for purposes of this Act if it has—

15 ‘‘(A) no more than $250 million in assets;

16 ‘‘(B) not been found to have engaged in a

17 pattern or practice of illegal discrimination

18 under the Fair Housing Act or the Equal Cred19 it Opportunity Act for the preceding 5-year cal20 endar period; and

21 ‘‘(C) a current CRA rating of ‘satisfactory’

22 or ‘outstanding’.

23 The dollar amount in this paragraph shall be ad24 justed annually after December 31, 1994, by the an25 nual percentage increase in the Consumer Price
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1 Index for Urban Wage Earners and Clerical Work2 ers published by the Bureau of Labor Statistics.

3 ‘‘(3) PUBLIC NOTICE.—A qualifying institution

4 must maintain in every branch a public notice stat5 ing that the institution has self-certified that it is

6 satisfactorily helping to meet the credit needs of its

7 community, and that it maintains:

8 ‘‘(A) a public file at its main office which

9 contains a copy of its self-certification to its ap10 propriate regulator;

11 ‘‘(B) a map delineating its community;

12 ‘‘(C) a list of the types of credit and serv13 ices that it provides to its community;

14 ‘‘(D) such other information that the insti15 tution believes demonstrates its record of help16 ing to meet the credit needs of its community;

17 and

18 ‘‘(E) every public comment or letter to the

19 institution (and any response by the institution)

20 received within the previous two year-period

21 about its record of helping to meet the credit

22 needs of its community.

23 The institution shall maintain a public file at its

24 main office containing the contents described in this

25 paragraph.
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1 ‘‘(4) RATING.—A qualifying institution shall be

2 deemed to have a rating of a ‘satisfactory record of

3 meeting community credit needs’ for the purposes of

4 this section and section 806A(c). Each Federal fi5 nancial supervisory agency shall publish in the Fed6 eral Register once each month a list of institutions

7 that have self-certified during the previous month.

8 Publication of the name of the institution in the

9 Federal Register as having self-certified shall con10 stitute disclosure of the rating of the institution to

11 the public under sections 806A and 807 of this Act.

12 ‘‘(5) REGULATORY REVIEW.—During each ex13 amination for safety and soundness, a qualifying in14 stitution’s supervisory agency shall, as part of its

15 loan review, assess whether the institution’s basis for

16 its self-certification is reasonable. If the agency de17 termines that the institution’s self-certification is

18 unreasonable, then the agency shall schedule an ex19 amination of the institution for the purpose of as20 sessing the institution’s record of helping to meet

21 the credit needs of its community. If that assess22 ment results in a less than ‘satisfactory’ rating, then

23 the agency shall revoke the institution’s self-certifi24 cation and substitute a written evaluation as pro25 vided under section 807. An institution that has had
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1 its self-certification revoked shall not be permitted to

2 self-certify pursuant to this subsection for five years

3 from the year of revocation. At any time thereafter,

4 if the institution meets the requirements for self-cer5 tification, it may again opt to self-certify.’’.

6 SEC. 124. COMMUNITY INPUT AND CONCLUSIVE RATING.

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

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

9 2903) is amended by inserting ‘‘conducted in accordance

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

11 (b) COMMUNITY INPUT AND CONCLUSIVE RATING.—

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

13 2901 et seq.) is amended by inserting after section 806

14 a new section 806A as follows:

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

16 ‘‘(a) PUBLICATION OF EXAM SCHEDULE AND OPPOR17 TUNITY FOR COMMENT.—Each appropriate Federal finan18 cial supervisory agency shall publish in the Federal Reg19 ister, thirty days prior to the beginning of a calendar quar20 ter, a listing of institutions scheduled for examination pur21 suant to this Act during that calendar quarter, and pro22 vide opportunity for written comments from the commu23 nity on the performance, under this Act, of each institu24 tion scheduled for examination. Such comments shall be

25 received by the appropriate Federal financial supervisory
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1 agency no later than 30 days after the commencement of

2 such calendar quarter. The agency shall provide a copy

3 of such comments to the institution.

4 ‘‘(b) EVALUATION.—The appropriate Federal finan5 cial supervisory agency shall evaluate the institution in ac6 cordance with the standards set forth in section 804 of

7 this Act, and shall prepare and publish a written evalua8 tion of the institution as required under section 807 of

9 this Act.

10 ‘‘(c) RECONSIDERATION OF RATING.—A reconsider11 ation of an institution’s rating, referred to in section

12 807(b)(1)(C), may be requested within 30 days of the rat13 ing’s disclosure to the public. Any such request must be

14 made in writing and filed with the appropriate Federal

15 financial supervisory agency, and may be filed by the insti16 tution or a member of the community. Any such request

17 shall be based on significant issues of a substantive nature

18 which are relevant to the delineated community of the in19 stitution, and in the case of a request by a member of

20 the community shall be limited to issues previously raised

21 in comments submitted pursuant to subsection (a). The

22 appropriate Federal financial supervisory agency shall

23 complete any requested reconsideration within 30 days of

24 the filing of the request.
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1 ‘‘(d) CONCLUSIVE RATING.—An institution’s rating

2 becomes ‘conclusive’ on the later of—

3 ‘‘(1) 30 days after the rating is disclosed to the

4 public; or

5 ‘‘(2) the completion of any requested reconsid6 eration by the Federal financial supervisory agency.

7 An institution’s rating shall be the conclusive assessment

8 of its record of meeting the credit needs of its community

9 for purposes of section 804 of this Act until the institu10 tion’s next rating, developed pursuant to an examination,

11 becomes conclusive. Institutions which have received a

12 ‘satisfactory’ or ‘outstanding’ rating shall be deemed to

13 have satisfied section 804 of this Act. Notwithstanding

14 any other provision of law, nothing herein shall be con15 strued to grant a cause of action to any person.’’.

16 SEC. 125. SPECIAL PURPOSE BANKS.

17 The Community Reinvestment Act of 1977 (12

18 U.S.C. 2901 et seq.) is amended—

19 (1) in section 803 (12 U.S.C. 2902), by insert20 ing at the end thereof the following new paragraph

21 (5):

22 ‘‘(5) the term ‘special purpose banks’ means a

23 bank that does not generally accept retail deposits,

24 such as credit card banks and trust banks.’’; and
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1 (2) in section 804 (12 U.S.C. 2903), by insert2 ing after subsection (c) (as added by section 122 of

3 this title):

4 ‘‘(d) In conducting assessments pursuant to this sec5 tion as special purpose banks, each appropriate Federal

6 financial supervisory agency shall take into consideration

7 the nature of business such banks are involved in and de8 velop standards under which such banks may be deemed

9 to have complied with the requirements of this Act which

10 are consistent with the specific nature for such busi11 nesses.’’.

12 SEC. 126. INCREASED INCENTIVES TO LENDING TO LOW13 AND MODERATE-INCOME COMMUNITIES.

14 Section 804(a) of the Community Reinvestment Act

15 of 1977 (12 U.S.C. 2903(a)) is amended—

16 (1) in paragraph (1), by striking ‘‘; and’’ at the

17 end and inserting;

18 (2) in paragraph (2), by striking the period and

19 inserting ‘‘; and’’; and

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

21 paragraph:

22 ‘‘(3) provide the institution with credit, for pur23 poses of satisfying the requirements of this Act, for

24 investments in, and loans to—
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1 ‘‘(A) minority depository institutions and

2 women’s depository institutions (as defined in

3 section 808(b)); and

4 ‘‘(B) joint ventures or other entities or

5 projects which provide benefits to distressed

6 communities, as such term is defined by the ap7 propriate Federal financial supervisory agency.

8 whether those minority or women’s depository insti9 tutions, or those communities, are located within or

10 outside of the service area of the regulated financial

11 institution.’’.

12 SEC. 127. PROHIBITION ON ADDITIONAL REPORTING

13 UNDER CRA.

14 Section 806 of the Community Reinvestment Act of

15 1977 (12 U.S.C. 2905) is amended to read as follows:

16 ‘‘SEC. 806. REGULATIONS.

17 ‘‘Regulations to carry out the purposes of this title

18 shall be published by each appropriate Federal financial

19 supervisory agency. Such regulations and any policy state20 ments, commentary, examiner guidance, or other super21 visory material shall not impose any additional record22 keeping on a financial institution. No loan data may be

23 required to be collected and reported by a financial institu24 tion and no such data may be made public by any Federal

25 financial supervisory agency under this title.’’.
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1 SEC. 128. TECHNICAL AMENDMENT.

2 Section 807(b)(1)(B) of the Community Reinvest3 ment Act (12 U.S.C. 2906) is amended by striking ‘‘the

4 information’’ and inserting in its place ‘‘In the case of a

5 regulated financial institution that maintains domestic

6 branches in 2 or more States, the information’’.

7 SEC. 129. DUPLICATIVE REPORTING.

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

9 (12 U.S.C. 1430(g)) is amended by adding at the end

10 thereof the following new paragraph (3):

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

12 apply to members receiving a grade of ‘outstanding’

13 or ‘satisfactory’ under section 807 of the Community

14 Reinvestment Act of 1977.’’.

15 Subtitle C—Consumer Banking

16 Reforms

17 SEC. 131. TRUTH IN SAVINGS.

18 (a) Section 262 of the Truth in Savings Act (12

19 U.S.C. 4301) is amended to read as follows:

20 ‘‘SEC. 262. PURPOSE.

21 ‘‘It is the purpose of this Act to ensure that consum22 ers can make a meaningful comparison between the com23 peting claims of depository institutions with regard to de24 posit accounts by requiring that institutions offering inter25 est-bearing accounts pay interest on the full amount of
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1 principal each day in a consumer deposit account at the

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

3 (b) Section 263 is amended to read as follows:

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

5 ADVERTISEMENTS AND DISCLOSURES.

6 ‘‘No depository institution or deposit broker shall

7 make any advertisement, announcement, solicitation or

8 disclosure relating to a deposit account that is inaccurate

9 or misleading or that misrepresents its deposit contracts.’’.

10 (c) Sections 264, 265, and 266 of the Truth in Sav11 ings Act (12 U.S.C. 4302, 4303, 4304, and 4305, respec12 tively) are hereby repealed.

13 (d) Section 267 of the Truth in Savings Act (12

14 U.S.C. 4306) is redesignated as Sec. 263.

15 (e) Section 268 of the Truth in Savings Act (12

16 U.S.C. 4307) is hereby repealed.

17 (f) Section 269 of the Truth in Savings Act (12

18 U.S.C. 4308) is redesignated as Sec. 264 and is amended

19 to read as follows:

20 ‘‘SEC. 264. REGULATIONS.

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

22 with each agency referred to in section 265(a) and public

23 notice and opportunity for comment, shall prescribe regu24 lations to carry out the purpose and provisions of this title.
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1 ‘‘(b) EFFECTIVE DATE OF REGULATIONS.—The pro2 visions of this subtitle shall not apply with respect to any

3 depository institution before the effective date of regula4 tions prescribed by the Board under this subsection.’’.

5 (f) Section 270 of the Truth in Savings Act (12

6 U.S.C. 4309) is redesignated as Sec. 265.

7 (g) Sections 271 and 273 of the Truth in Savings

8 Act (12 U.S.C. 4310 and 4312) are hereby repealed.

9 (h) Section 272 of the Truth in Savings Act (12

10 U.S.C. 4311) is redesignated as Sec. 266.

11 (i) Section 274 of the Truth in Savings Act (12

12 U.S.C. 4313) is redesignated as Sec. 267 and is amended

13 to read as follows:

14 ‘‘SEC. 267. DEFINITIONS.

15 ‘‘For the purposes of this chapter—

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

17 any account intended for use by and generally used

18 by a consumer primarily for personal, family, or

19 household purposes that is offered by a depository

20 institution into which a customer deposits funds, in21 cluding demand deposits, time accounts, negotiable

22 order of withdrawal accounts, and share draft ac23 counts.

24 ‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de25 pository institution’ has the meaning given such
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1 term in clauses (i) through (vi) of section

2 19(b)(1)(A) of the Federal Reserve Act.

3 ‘‘(3) INTEREST.—The term ‘interest’ includes

4 dividends paid with respect to share draft accounts

5 which are accounts within the meaning of paragraph

6 (1).

7 ‘‘(4) BOARD.—The term ‘Board’ means the

8 Board of Governors of the Federal Reserve Sys9 tem.’’.

10 SEC. 132. UNAUTHORIZED ELECTRONIC FUND TRANSFERS.

11 (a) Section 909(a)(1) of the Electronic Fund Trans12 fer Act (15 U.S.C. 1693g(a)(1)) is amended by inserting

13 ‘‘(or in cases where the cardholder has substantially con14 tributed to the unauthorized use, including writing on or

15 keeping with the card or other means of access a personal

16 identification or other security code, $500)’’ after ‘‘$50’’.

17 (b) Section 909 of the Electronic Fund Transfer Act

18 (15 U.S.C. 1693g) is amended by adding at the end the

19 following new subsections—

20 ‘‘(f) Notwithstanding any provision of subsection (a)

21 or subsection (b)—

22 ‘‘(1) a financial institution may request that a

23 consumer who alleges an unauthorized electronic

24 fund transfer involving the consumer’s account pro25 vide reasonable cooperation in connection with the
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1 financial institution’s investigation of the alleged un2 authorized electronic fund transfer; and

3 ‘‘(2) the consumer shall remain liable for the

4 amount of the alleged unauthorized electronic fund

5 transfer if the consumer fails or refuses to provide

6 such cooperation, unless the financial institution oth7 erwise has information which confirms that the elec8 tronic fund transfer was unauthorized.

9 ‘‘(g) Notwithstanding any provision of subsection (a)

10 or subsection (b), a consumer who authorizes a person to

11 use the consumer’s access device may be held liable by

12 the financial institution for all electronic fund transfers

13 made by such person using such access device prior to the

14 consumer revoking the authorization and notifying the fi15 nancial institution of the revocation in accordance with

16 procedures reasonably established by the financial institu17 tion for such a revocation of authority, as more specifically

18 provided by the Board in regulations prescribed under this

19 title.’’.

20 SEC. 133. LIABILITY FOR UNAUTHORIZED USE OF CREDIT

21 CARDS.

22 Section 133(a) of the Truth in Lending Act (15

23 U.S.C. 1643(a)) is amended—

24 (1) by redesignating paragraph (2) as para25 graph (3);
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1 (2) by inserting after paragraph (1) the follow2 ing:

3 ‘‘(2)(A) Notwithstanding paragraph (1), a card4 holder shall be liable for the unauthorized use of a

5 credit card if—

6 ‘‘(i) the liability is in excess of $50; and

7 ‘‘(ii) the cardholder fails to notify the card

8 issuer of any unauthorized transaction which

9 appears on the statement of the cardholder’s

10 account in connection with an extension of

11 consumer credit within 60 days of the trans12 mission of such statement.

13 ‘‘(B) The liability described in subparagraph

14 (A) shall not apply if the cardholder demonstrates

15 that the failure to timely notify the card issuer of

16 the unauthorized use was due to extenuating cir17 cumstances such as extended travel or hospitaliza18 tion, and notice was provided at the earliest possible

19 time thereafter.

20 ‘‘(C) The liability described in subparagraph

21 (A) shall only apply where the card issuer has pro22 vided prior notice to the cardholder of such liabil23 ity.’’;

24 and inserting after paragraph (3) (as so redesig25 nated by paragraph (1) of this section):
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1 ‘‘(4) Notwithstanding any other provision of

2 this subsection or subsection (b)—

3 ‘‘(A) a card issuer may request that a

4 cardholder who alleges unauthorized use of his

5 or her credit card provide reasonable coopera6 tion in connection with the card issuer’s inves7 tigation of the alleged unauthorized use; and

8 ‘‘(B) the cardholder shall remain liable for

9 the amount of the alleged unauthorized use if

10 the cardholder fails or refuses to provide such

11 cooperation, unless the card issuer otherwise

12 has information which clearly establishes the

13 unauthorized use.

14 ‘‘(5) Notwithstanding any other provision of

15 this subsection or subsection (b), a cardholder who

16 authorizes a person to use the cardholder’s credit

17 card may be held liable by the card issuer for all ex18 tensions of credit which are obtained by such person

19 using such credit card prior to the cardholder revok20 ing the authorization and notifying the card issuer

21 of the revocation in accordance with procedures rea22 sonably established by the card issuer for such a rev23 ocation of authority, as more specifically provided by

24 the Board in regulations prescribed under this

25 title.’’.
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1 SEC. 134. INFORMATION SHARING.

2 Section 18 of the Federal Deposit Insurance Act (12

3 U.S.C. 1828) is amended by adding at the end the follow4 ing new subsection:

5 ‘‘(s) CUSTOMER ACCESS TO PRODUCTS.—

6 ‘‘(1) IN GENERAL.—Notwithstanding any other

7 provision of law, any depository institution or any

8 affiliate or subsidiary thereof may share or exchange

9 information or otherwise transfer information be10 tween or among themselves without any restriction

11 or limitation if it is clearly and conspicuously dis12 closed that the information may be communicated

13 among such persons and the consumer is given the

14 opportunity, prior to the time that the information

15 is initially communicated, to direct that such infor16 mation not be communicated among such persons.

17 ‘‘(2) DEFINITION.—For purposes of this sub18 section, ‘information’ means any and all data,

19 records, or other information and material obtained

20 or maintained by any depository institution or any

21 affiliate or subsidiary thereof in the ordinary course

22 of its business that relates in any way to a person

23 (as that term is defined in 15 U.S.C. 1681a(b)) who

24 applies for, maintains or has maintained an account

25 or credit relationship with or applied for, purchased

26 or obtained other products or services from any de-
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1 pository institution or any affiliate or subsidiary

2 thereof, regardless of the source or manner in which

3 the information is obtained or furnished.

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

5 institution or any affiliate or subsidiary thereof rely6 ing on this subsection shall not be deemed to be a

7 consumer reporting agency, user or third party, and

8 the information itself shall not constitute a

9 consumer report, within the meaning of Fair Credit

10 Reporting Act or other similar law.’’.

11 SEC. 135. ELECTRONIC FUND TRANSFER ACT CLARIFICA12 TION.

13 (a) Section 903(1) of the Electronic Fund Transfer

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

15 the semicolon the following: ‘‘, but such term does not in16 clude a card or device that a person may use to pay for

17 transactions through use of value stored on the card or

18 device itself, except for those transactions where such card

19 or device is actually used to access an account to effect

20 such transaction’’.

21 (b) Section 903(2) of the Electronic Fund Transfer

22 Act (15 U.S.C. 1693a(2)) is amended by inserting before

23 the semicolon the following: ‘‘and does not include any

24 value which is stored on a card or device itself that enables
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1 a person to pay for transactions through use of that stored

2 value’’.

3 Subtitle D—Equal Credit

4 Opportunity Act Amendments

5 SEC. 141. SHORT TITLE.

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

8 SEC. 142. FINDINGS AND PURPOSE.

9 (a) The Congress finds that both the Equal Credit

10 Opportunity Act (15 U.S.C. 1691, et seq.) and the Fair

11 Credit Reporting Act (15 U.S.C. 1681, et seq.) contain

12 requirements that applicants for consumer credit be given

13 certain information in the event that adverse action is

14 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

17 the party required to furnish the information.

18 (b) It is the purpose of this Act to combine and sim19 plify the adverse action notification requirements of the

20 Equal Credit Opportunity Act and the Fair Credit Report21 ing Act regarding applications for consumer credit and to

22 make the information that is required to be furnished

23 more understandable.
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1 SEC. 143. EQUAL CREDIT OPPORTUNITY ACT AMEND2 MENTS.

3 (a) Section 701(d)(2)(B) of the Equal Credit Oppor4 tunity Act (15 U.S.C. 1691(d)(2)(B)) is amended to read

5 as follows:

6 ‘‘(B) Giving written notification of adverse

7 action which discloses—

8 ‘‘(i) the applicant’s right to a state9 ment of reasons within thirty days after

10 receipt by the creditor of a request made

11 within sixty days after such notification;

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

13 for such credit is increased either wholly or

14 partly because of information contained in

15 a consumer report from a consumer re16 porting agency, that fact and the name

17 and address of the consumer reporting

18 agency making the report;

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

20 therefor is increased either wholly or partly

21 because of information obtained from a

22 person other than a consumer reporting

23 agency bearing upon the consumer’s credit

24 worthiness, credit standing, credit capacity,

25 character, general reputation, personal

26 characteristics or mode of living, that fact
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1 and the right to receive disclosure of the

2 nature of the information so received upon

3 receipt of the consumer’s written request

4 therefor within sixty days after learning of

5 such adverse action; and

6 ‘‘(iv) the identity of the person or of7 fice from which such notification may be

8 obtained.

9 Such statement of reasons may be given orally

10 if the written notification advises the applicant

11 of his right to have the statement of reasons

12 confirmed in writing on written request.’’.

13 (b) Paragraph 701(d)(3) of the Equal Credit Oppor14 tunity Act (15 U.S.C. 1691(d)(3)) is amended by striking

15 the period at the end and adding the following: ‘‘and, to

16 the extent applicable, the name and address of the

17 consumer reporting agency identified in accordance with

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

19 of the right to obtain disclosure of the nature of the infor20 mation upon which adverse action was taken as required

21 by subsection (d)(3)(iii).’’.

22 (c) Section 706 of the Equal Credit Opportunity Act

23 (15 U.S.C. 1691e) is amended by adding at the end the

24 following new subsection:
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1 ‘‘(e) No person shall be held liable for any violation

2 of subsection 701(d) hereof if he shows by a preponder3 ance of the evidence that at the time of the alleged viola4 tion he maintained reasonable procedures to assure com5 pliance with the provisions of the subsection.’’.

6 SEC. 144. FAIR CREDIT REPORTING ACT AMENDMENTS.

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

8 (15 U.S.C. 1681m(a)) is amended by striking ‘‘credit or’’

9 each time such term appears.

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

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

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

13 (c) Section 615(b) (as redesignated by this section)

14 of the Fair Credit Reporting Act (15 U.S.C. 1681m(b))

15 is amended by striking ‘‘subsections (a) and (b)’’ and in16 serting ‘‘subsection (a)’’.

17 SEC. 145. INCENTIVES FOR SELF-TESTING.

18 (a) EQUAL CREDIT OPPORTUNITY.—The Equal

19 Credit Opportunity Act (15 U.S.C. 1691 et seq.) is

20 amended—

21 (1) by inserting after section 704 the following

22 new section:

23 ‘‘SEC. 704A. SELF-TESTING ENHANCEMENT.

24 ‘‘Whenever a creditor conducts, or authorizes an

25 independent third party to conduct, a test or review of
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1 the creditor’s lending or any part of its lending operations

2 in order to determine the level or effectiveness of compli3 ance with this Act by the creditor, then any report or re4 sults of such a test or review may not be reviewed, ob5 tained, examined or otherwise acquired or used by any ap6 plicant in any proceeding or civil action brought under this

7 Act.’’;

8 (2) in section 706(g), by inserting the following

9 new language after the 2d sentence: ‘‘No agency

10 shall refer a matter to the Attorney General if the

11 creditor has already identified the matter as a pos12 sible violation of the Equal Credit Opportunity Act

13 as the result of internal review, self-testing, compli14 ance review or other audit or review procedure insti15 tuted by the creditor to determine compliance with

16 the Act. No provision of this section shall be con17 strued as limiting the authority of the agency to en18 force the provisions of this Act under any other pro19 vision of law.’’; and

20 (3) in section 706(k), by adding at the end the

21 following: ‘‘No agency referred to in paragraph (1),

22 (2), or (3) of section 704(a) shall notify the Sec23 retary of Housing and Urban Development or the

24 applicant of a violation of the Equal Credit Oppor25 tunity Act or of the Fair Housing Act if the creditor
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1 has already identified the matter as a possible viola2 tion of either of those Acts as a result of internal

3 review, self-testing, compliance review or other audit

4 or review procedure instituted by the creditor to de5 termine compliance with the Act. No provisions of

6 this section shall be construed as limiting the au7 thority of the agency to enforce the provisions of this

8 Act under any other provision of law.’’.

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

10 U.S.C. 3601 et seq.) is amended by adding the following:

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

12 ‘‘Whenever any person conducts, or authorizes an

13 independent third party to conduct, a test or review of

14 that person’s residential real estate or real estate-related

15 activities or any part thereof in order to determine the

16 level or effectiveness of compliance with this Act by the

17 person, then any report or results of such a test or review

18 may not be reviewed, obtained, examined or otherwise ac19 quired or used by the applicant, aggrieved party, or com20 plainant in any proceeding or civil action brought under

21 this Act.’’.

22 SEC. 146. CREDIT SCORING SYSTEMS.

23 Section 701 of the Equal Credit Opportunity Act (15

24 U.S.C. 1691) is amended by adding at the end the follow25 ing new subsection:
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1 ‘‘(f) A creditor shall be deemed to be in compliance

2 with subsection (a) with respect to any credit decision

3 made by the creditor which is based solely on the use of

4 an empirically derived, demonstrably and statistically

5 sound, credit scoring system, as defined by the Board in

6 regulations prescribed under this title, if such system does

7 not utilize any category protected under subsection (a) or

8 use as a factor in such system any criterion which is so

9 directly associated with such a category as to be the func10 tional equivalent of such a category. Nothing in this sub11 section shall preclude a creditor from using age as a factor

12 in such a system as otherwise permitted under this title.’’.

13 SEC. 147. EFFECTIVE DATE.

14 This Act shall take effect 270 days after enactment.

15 The Board of Governors of the Federal Reserve System

16 shall promulgate regulations to implement this Act at least

17 90 days before its effective date.

18 Subtitle E—Consumer Leasing Act

19 Amendments

20 SEC. 151. SHORT TITLE.

21 This subtitle may be cited as the Consumer Leasing

22 Act Amendments of 1995.
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1 SEC. 152. CONGRESSIONAL FINDINGS AND DECLARATION

2 OF PURPOSE.

3 (a) The Congress finds that competition among the

4 various financial institutions and other firms engaged in

5 the business of consumer leasing is greatest when there

6 is informed use of leasing. The informed use of leasing

7 results from an awareness of the cost thereof by consum8 ers. It is the purpose of this subchapter to assure a simple,

9 meaningful disclosure of leasing terms so that the

10 consumer will be able to compare more readily the various

11 leasing terms available to him and avoid the uninformed

12 use of leasing, and to protect the consumer against inac13 curate and unfair leasing practices.

14 (b) The Congress also finds that there has been a

15 continued trend toward leasing automobiles and other du16 rable goods for consumer use as an alternative to install17 ment credit sales and that leasing product advances have

18 occurred such that lessors have been unable to provide

19 consistent industry-wide disclosures to fully account for

20 the competitive progress that has occurred. To provide for

21 adequate cost disclosures that reflect the marketplace

22 without impairing competition and the development of new

23 leasing products it is the purpose of this subchapter to

24 provide the Board with the regulatory authority to assure

25 a simplified, meaningful definition and disclosure of the

26 terms of certain leases of personal property for personal,
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1 family, or household purposes so as to enable the lessee

2 to compare more readily the various lease terms available

3 to the lessee, enable comparison of lease terms with credit

4 terms where appropriate and to assure meaningful and ac5 curate disclosures of lease terms in advertisements.

6 SEC. 153. REGULATIONS.

7 Chapter 5 of the Consumer Credit Protection Act is

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

9 ‘‘SEC. 187. REGULATIONS.

10 ‘‘(a) IN GENERAL.—The Board shall write regula11 tions or staff commentary, if appropriate, to update and

12 clarify the requirements and definitions for lease disclo13 sures, contracts, and any other specific issues related to

14 consumer leasing which would carry out the purposes of

15 the Consumer Leasing Act, to prevent its circumvention,

16 and to facilitate compliance with its requirements. The

17 regulations may contain classifications and differentia18 tions and may provide for adjustments and exceptions for

19 any class of transaction.

20 ‘‘(b) MODEL DISCLOSURES.—The Board shall pub21 lish model disclosure forms and clauses to facilitate com22 pliance with the disclosure requirements and to aid the

23 consumer in understanding the transaction. In designing

24 forms, the Board shall consider the use by lessors of data

25 processing or similar automated equipment. Use of the
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1 models shall be optional. A lessor who properly uses the

2 material aspects of the models shall be deemed to be in

3 compliance with the disclosure requirements.

4 ‘‘(c) EFFECTIVE DATES.—Any regulation of the

5 Board, or any amendment or interpretation thereof, that

6 requires a disclosure different from the disclosures pre7 viously required shall have an effective date of October 1

8 that follows the date of promulgation by at least six

9 months. The Board may at its discretion lengthen that

10 period of time to permit lessors to adjust their forms to

11 accommodate new requirements. The Board may also

12 shorten that period of time if it makes a specific finding

13 that such action is necessary to comply with the findings

14 of a court or to prevent unfair or deceptive practices. In

15 any case, lessors may comply with any newly promulgated

16 disclosure requirement prior to its effective date.’’.

17 SEC. 154. SEGREGATED LEASING DISCLOSURES.

18 Section 182 of the Consumer Credit Protection Act

19 as amended (15 U.S.C. 1667(a)) is amended—

20 (a) by inserting ‘‘(a)’’ before ‘‘Each lessor’’ in

21 the first sentence; and,

22 (b) by adding at the end the following new sub23 section:

24 ‘‘(b) Prior to or at the time the consumer receives

25 the disclosure required under section 182(a), the lessor
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1 shall separately disclose, to the extent applicable, each of

2 the following items in a tabular format in a manner to

3 be prescribed by the Board:

4 ‘‘(1) Total amount of funds due at lease incep5 tion. This amount shall include any security deposit,

6 whether or not it is refundable and any other fees

7 required to be paid to the lessor at lease inception

8 by the consumer.

9 ‘‘(2) Total monthly payment due to the Lessor.

10 This amount does not include any taxes payable by

11 the lessee to any governmental entity.

12 ‘‘(3) Number of Payments.

13 ‘‘(4) Total of Monthly Payments.

14 ‘‘(5) Capitalized Cost.

15 ‘‘(6) Residual Value.

16 ‘‘(7) Whether or not the Lessee has the right

17 to purchase the Vehicle during or at the end of the

18 Lease.

19 ‘‘(8) Excess Mileage Charge: The amount that

20 the Lessee, at scheduled termination, must pay for

21 each mile in excess of a pre-determined number of

22 miles.

23 ‘‘(9) Early Termination: In the even of early

24 termination of the lease by the lessee, the disclosure

25 of the payment allocation method by name alone
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1 which would facilitate comparison shopping by con2 sumers.

3 In prescribing regulations to carry out this clause, the

4 Board shall define and name not more than the five early

5 termination liability calculation methods determined by

6 the Board to be the most commonly used methods.’’.

7 SEC. 155. CONSUMER LEASE ADVERTISING.

8 Section 184 of the Consumer Credit Protection Act

9 (15 U.S.C. 1667(c)) is amended to read as follows:

10 ‘‘SEC. 184. CONSUMER LEASE ADVERTISING.

11 ‘‘(a) If an advertisement for a consumer lease states

12 the amount of any payment or states that any or no initial

13 payment is required, the advertisement must also clearly

14 and conspicuously state the following terms, as applicable:

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

16 ‘‘(2) The total of initial payments required at

17 or before consummation of the lease or delivery of

18 the property, whichever is later.

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

20 ‘‘(4) The number, amounts, and timing of

21 scheduled payments.

22 ‘‘(5) For a lease in which the consumer’s liabil23 ity at the end of the lease term is based on the an24 ticipated residual value of the property, that an
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1 extra charge may be imposed at the end of the lease

2 term.

3 ‘‘(b) Any owner or personnel of any medium in which

4 an advertisement appears or through which it is dissemi5 nated shall not be liable under this section.’’.

6 Subtitle F—Federal Home Loan

7 Bank Amendments

8 SEC. 161. APPLICATION FOR MEMBERSHIP IN THE FHLB

9 SYSTEM.

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

11 (12 U.S.C. 1424) is amended to read as follows:

12 ‘‘(b) MEMBERSHIP BASED ON CONVENIENCY.—An

13 institution eligible to become a member under this section

14 may become a member by submitting its application for

15 membership to the Bank in the district where the appli16 cant’s principal place of business is located. An application

17 for membership shall be approved by the Bank if, in the

18 judgment of the Bank, the applicant meets the criteria

19 for eligibility contained in this section. An institution eligi20 ble to become a member under this section may apply for

21 membership in an adjoining district, if appropriate for the

22 convenience of the institution and then only with the ap23 proval of the Board.’’.
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1 SEC. 162. FEDERAL HOME LOAN BANK EXTERNAL

2 AUDITORS.

3 Section 11(j) of the Federal Home Loan Bank Act

4 (12 U.S.C. 1431(j)) is amended to read as follows:

5 ‘‘(j) AUDITS.—

6 ‘‘(1) Notwithstanding the provisions of section

7 9105(a)(1)(B) of title 31, United States Code, au8 dits by the General Accounting Office of the finan9 cial transactions of a Federal home loan bank shall

10 not be limited to periods during which Government

11 capital has been invested therein. The provisions of

12 section 9107(c)(2) and 9108(d)(1) of title 31, of

13 such Code, shall not apply to any Federal home loan

14 bank.

15 ‘‘(2) Notwithstanding any other provision of

16 law, the Board shall not participate in the hiring of

17 an external auditor by the banks; except, that the

18 Board may establish requirements for external audit

19 contracts and accounting standards and, that all 12

20 banks shall contract for an annual audit with a sin21 gle 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

9 Bank Holding Company Act of 1956 (12 U.S.C. 1843(j))

10 is amended as follows:

11 (1) In paragraph (1), strike ‘‘No’’ and insert in

12 its place ‘‘Except as provided in paragraph (3), no’’;

13 (2) add at the end the following new para14 graphs:

15 ‘‘(3) NO NOTICE REQUIRED FOR CERTAIN

16 TRANSACTIONS.—No notice under paragraph (1) or

17 subsections (c)(8) or (a)(2)(B) is required for a pro18 posal by a bank holding company to engage in any

19 activity or acquire the shares or assets of any com20 pany if the proposal qualifies under paragraph (4).

21 ‘‘(4) CRITERIA FOR STATUTORY APPROVAL.—A

22 proposal qualifies under this paragraph if all of the

23 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

12 of insured depository institutions controlled

13 by 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 ag23 gregate total risk-weighted assets of in24 sured depository institutions controlled by

25 such holding company are well managed.
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1 ‘‘(ii) LIMITATION ON POORLY MAN2 AGED INSTITUTIONS.—

3 ‘‘(I) IN GENERAL.—No insured

4 depository institution controlled by

5 the acquiring bank holding company

6 has received one of the lowest 2 com7 posite ratings at the later of the insti8 tution’s most recent examination or

9 subsequent review.

10 ‘‘(II) RECENTLY ACQUIRED IN11 STITUTIONS.—Insured depository in12 stitutions acquired by the bank hold13 ing company within the previous 12

14 months may be excluded for purposes

15 of subclause (I) if—

16 ‘‘(aa) the bank holding com17 pany has developed a plan ac18 ceptable to the appropriate Fed19 eral banking agency (as defined

20 in section 3 of the Federal De21 posit Insurance Act) for the insti22 tution to restore the capital and

23 management of the institution;

24 and
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1 ‘‘(bb) all such insured depos2 itory institutions represent, in

3 the aggregate, less than 10 per4 cent of the aggregate total risk5 weighted assets of all insured de6 pository institutions controlled by

7 the bank holding company.

8 ‘‘(C) ACTIVITIES PERMISSIBLE.—Following

9 consummation of the proposal, the bank holding

10 company engages directly or through a subsidi11 ary solely in—

12 ‘‘(i) activities that are permissible

13 under subsection (c)(8), as determined by

14 the Board by regulation or order there15 under, subject to all of the restrictions,

16 terms and conditions of such subsection

17 and such regulation or order; and

18 ‘‘(ii) such other activities as are other19 wise permissible under this section, subject

20 to the restrictions, terms and conditions,

21 including any prior notice or approval re22 quirements, provided in this section.

23 ‘‘(D) SIZE OF ACQUISITION.—

24 ‘‘(i) ASSET SIZE.—The book value of

25 the total assets acquired does not exceed
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1 10 percent of the consolidated total risk2 weighted assets of the acquiring bank hold3 ing company; and

4 ‘‘(ii) CONSIDERATION.—The gross

5 consideration to be paid for the securities

6 or assets does not exceed 15 percent of the

7 consolidated Tier 1 capital of the acquiring

8 bank holding company.

9 ‘‘(E) NOTICE NOT OTHERWISE WAR10 RANTED.—For proposals described in para11 graph (5)(B), the Board has not, prior to the

12 conclusion of the period provided in paragraph

13 (5)(B), advised the bank holding company that

14 a notice under paragraph (1) is required.

15 ‘‘(5) NOTIFICATION.—

16 ‘‘(A) COMMENCEMENT OF ACTIVITIES AP17 PROVED BY RULE.—A bank holding company

18 that qualifies under paragraph (4) and that

19 proposes to engage de novo, directly or through

20 a subsidiary, in any activity that is permissible

21 under subsection (c)(8), as determined by the

22 Board by regulation, may commence that activ23 ity without prior notice to the Board and must

24 provide written notification to the Board no
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1 later than 10 business days after commencing

2 the activity.

3 ‘‘(B) ACTIVITIES PERMITTED BY ORDER

4 AND ACQUISITIONS.—At least 12 business days

5 prior to commencing any activity pursuant to

6 paragraph (3) other than an activity described

7 in subparagraph (A) or acquiring shares or as8 sets of any company pursuant to paragraph (3),

9 the bank holding company must provide the

10 Board written notification of the proposal, un11 less the Board determines that no notice or a

12 shorter notice period is appropriate. A notifica13 tion under this subparagraph must include a

14 description of the proposed activities and the

15 terms of any proposed acquisition.

16 ‘‘(6) ADJUSTMENT OF AMOUNTS.—The Board

17 may by regulation adjust the amounts and the man18 ner in which the percentage of insured depository in19 stitutions is calculated under paragraph (4)(B)(i),

20 paragraph (4)(B)(ii)(II)(bb), and paragraph (4)(D)

21 if the Board determines that any such adjustment is

22 consistent with safety and soundness and the pur23 poses of this Act.’’.
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1 (b) DEFINITIONS.—Section 2(o)(1) of the Bank

2 Holding Company Act (12 U.S.C. 1841) is amended by

3 adding at the end the following new paragraphs:

4 ‘‘(1) CAPITAL TERMS.—

5 ‘‘(A) INSURED DEPOSITORY INSTITU6 TIONS.—With respect to insured depository in7 stitutions, the terms ‘well-capitalized,’ ‘ade8 quately capitalized,’ and ‘undercapitalized’ have

9 the meaning given those terms in section 38(b)

10 of the Federal Deposit Insurance Act.

11 ‘‘(B) BANK HOLDING COMPANY.—

12 ‘‘(i) ADEQUATELY CAPITALIZED.—

13 The term ‘adequately capitalized’ means a

14 level of capitalization which meets or ex15 ceeds all applicable Federal regulatory cap16 ital standards;

17 ‘‘(ii) WELL CAPITALIZED.—A bank

18 holding company is ‘well capitalized’ if it

19 meets the required capital levels for well

20 capitalized bank holding companies estab21 lished by the Board.

22 ‘‘(C) OTHER CAPITAL TERMS.—The term

23 ‘Tier 1’ and ‘risk-weighted assets’ have the

24 meaning given those terms in the capital guide-
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1 lines or regulations established by the Board for

2 bank holding companies.

3 ‘‘(p) LEAD INSURED DEPOSITORY INSTITUTION.—

4 The term ‘lead insured depository institution’ means the

5 largest insured depository institution controlled by the

6 bank holding company at any time, based on a comparison

7 of the average total risk-weighted assets controlled by each

8 insured depository institution during the previous 12

9 month period. For purposes of this subsection and section

10 4(j)(4), the term ‘insured depository institution’ shall also

11 include any branch or agency operated in the United

12 States by a foreign bank.

13 ‘‘(q) WELL MANAGED.—A company or depository in14 stitution is ‘well managed’ if, at its most recent examina15 tion or subsequent review, the company or institution re16 ceived—

17 ‘‘(1) one of the highest 2 composite ratings;

18 and

19 ‘‘(2) at least a satisfactory rating for manage20 ment, if such rating is given.’’.

21 SEC. 202. STREAMLINED BANK ACQUISITIONS BY WELL

22 CAPITALIZED AND WELL MANAGED BANKING

23 ORGANIZATIONS.

24 (a) BANK HOLDING COMPANY ACT AMENDMENTS.—

25 Section 3 of the Bank Holding Company Act (12 U.S.C.
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1 1842) is amended by adding at the end the following new

2 subsection:

3 ‘‘(h) NO APPROVAL REQUIRED FOR CERTAIN TRANS4 ACTIONS.—Notwithstanding subsections (a)(3) or (a)(5),

5 an acquisition of shares by a registered bank holding com6 pany, or a merger or consolidation between registered

7 bank holding companies, shall be deemed approved at the

8 conclusion of the period specified in paragraph (7) if—

9 ‘‘(1) FINANCIAL AND MANAGERIAL CRITERIA.—

10 ‘‘(A) WELL CAPITALIZED BANK HOLDING

11 COMPANY.—Both at the time of and imme12 diately after the proposed transaction, the ac13 quiring bank holding company is well capital14 ized.

15 ‘‘(B) WELL CAPITALIZED LEAD INSURED

16 DEPOSITORY INSTITUTION.—Both at the time

17 of and immediately after the proposed trans18 action, the lead insured depository institution of

19 the acquiring bank holding company is well cap20 italized.

21 ‘‘(C) CAPITAL OF OTHER INSURED DEPOSI22 TORY INSTITUTIONS.—At the time of the trans23 action, well capitalized insured depository insti24 tutions control at least 80 percent of the aggre25 gate total risk-weighted assets of insured depos-
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1 itory institutions controlled by the acquiring

2 bank holding company.

3 ‘‘(D) NO UNDERCAPITALIZED INSURED

4 DEPOSITORY INSTITUTIONS.—At the time of the

5 transaction, no insured depository institution

6 controlled by the acquiring bank holding com7 pany is undercapitalized.

8 ‘‘(E) WELL MANAGED.—

9 ‘‘(i) IN GENERAL.—At the time of the

10 transaction, the acquiring bank holding

11 company, its lead insured depository insti12 tution, and insured depository institutions

13 that control at least 90 percent of the ag14 gregate total risk-weighted assets of in15 sured depository institutions controlled by

16 such holding company are well managed.

17 ‘‘(ii) NO POORLY MANAGED INSTITU18 TIONS.—

19 ‘‘(I) IN GENERAL.—No insured

20 depository institution controlled by

21 the acquiring bank holding company

22 has received one of the lowest two

23 composite ratings at the later of the

24 institution’s most recent examination

25 or subsequent review.
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1 ‘‘(II) RECENTLY ACQUIRED IN2 STITUTIONS.—Insured depository in3 stitutions acquired by the bank hold4 ing company within the previous 12

5 months may be excluded for purposes

6 of subclause (I) if—

7 ‘‘(aa) the bank holding com8 pany has developed a plan ac9 ceptable to the appropriate Fed10 eral banking agency (as defined

11 in section 3 of the Federal De12 posit Insurance Act) for the insti13 tution to restore the capital and

14 management of the institution;

15 and

16 ‘‘(bb) all such insured depos17 itory institutions represent, in

18 the aggregate, less than 10 per19 cent of the aggregate total risk20 weighted assets of all insured de21 pository institutions controlled by

22 the holding company.

23 ‘‘(iii) ADJUSTMENT OF AMOUNTS.—

24 The Board may by regulation adjust the

25 amounts and the manner in which the per-
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1 centage of insured depository institutions

2 is calculated under clauses (i) and

3 (ii)(II)(bb) if the Board determines that

4 such adjustment is consistent with safety

5 and soundness and the purposes of this

6 Act.

7 ‘‘(2) NO UNSATISFACTORY CRA RATINGS.—

8 ‘‘(A) IN GENERAL.—No insured depository

9 institution controlled by the acquiring bank

10 holding company has received a ‘needs to im11 prove’ or ‘substantial noncompliance’ composite

12 rating at its most recent examination under the

13 Community Reinvestment Act.

14 ‘‘(B) RECENTLY ACQUIRED INSTITU15 TIONS.—Insured depository institutions ac16 quired by such bank holding company within

17 the previous 12 months may be excluded for

18 purposes of subparagraph (A) if the bank hold19 ing company has developed a plan acceptable to

20 the appropriate Federal banking agency (as de21 fined in section 3 of the Federal Deposit Insur22 ance Act) to restore the performance of the in23 stitution to at least a ‘satisfactory’ rating under

24 the Community Reinvestment Act.
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1 ‘‘(3) COMPETITIVE CRITERIA.—Consummation

2 of the proposal complies with guidelines established

3 by the Board by regulation, after consultation with

4 the Attorney General, that identify proposals that

5 are not likely to have a significantly adverse effect

6 on competition in any relevant market.

7 ‘‘(4) SIZE OF ACQUISITION.—

8 ‘‘(A) LIMITATIONS.—

9 ‘‘(i) ASSET SIZE.—The book value of

10 the total assets acquired does not exceed

11 10 percent of the consolidated total risk

12 weighted assets of the acquiring bank hold13 ing company.

14 ‘‘(ii) CONSIDERATION.—The gross

15 consideration to be paid for the securities

16 or assets does not exceed 15 percent of the

17 consolidated Tier 1 capital of the acquiring

18 bank holding company.

19 ‘‘(B) ADJUSTMENT TO LIMITATIONS.—The

20 Board may by regulation adjust the limitations

21 established in this paragraph in a manner con22 sistent with safety and soundness and the pur23 poses of this Act.
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1 ‘‘(5) INTERSTATE ACQUISITIONS.—Board ap2 proval of the transaction is not prohibited under

3 subsection (d).

4 ‘‘(6) OTHER CONSIDERATIONS.—Board ap5 proval of the transaction is not prohibited under

6 subsection (c)(3); and

7 ‘‘(7) NOTIFICATION.—The acquiring bank hold8 ing company provides the Board with written notice

9 of the transaction, including a description of the

10 terms of the transaction, at least 15 business days

11 (or such shorter period as permitted by the Board)

12 prior to consummation of the transaction, and, prior

13 to the conclusion of that period, the Board has not

14 required an application under subsection (a).’’.

15 SEC. 203. ELIMINATE BANK MERGER ACT FILING AND AP16 PROVAL REQUIREMENTS FOR INSURED DE17 POSITORY INSTITUTIONS ALREADY CON18 TROLLED BY THE SAME HOLDING COMPANY.

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

20 is amended by adding at the end the following new para21 graph:

22 ‘‘(12) The provisions of this subsection shall

23 not apply to any merger, consolidation, acquisition

24 of assets or assumption of liabilities involving only

25 insured depository institutions that are subsidiaries
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1 of the same depository institution holding company

2 if—

3 ‘‘(A) the responsible agency would not be

4 prohibited from approving the transaction

5 under section 44;

6 ‘‘(B) the acquiring, assuming, or resulting

7 institution complies with all applicable provi8 sions of section 44 as if the merger, consolida9 tion, or acquisition were approved under this

10 subsection; and

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.’’.

16 SEC. 204. ELIMINATE REDUNDANT APPROVAL REQUIRE17 MENT FOR OAKAR TRANSACTIONS.

18 Section 5(d)(3) of the Federal Deposit Insurance Act

19 (12 U.S.C. 1815(d)(3)) is amended—

20 (1) in subparagraph (A), by striking ‘‘with the

21 prior written approval of the responsible agency

22 under section 18(c)(2)’’;

23 (2) in subparagraph (E)—

24 (A) by striking clause (iv) and inserting

25 the following new clause:
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1 ‘‘(iv) A transaction shall not be au2 thorized under this paragraph unless the

3 acquiring, assuming, or resulting deposi4 tory institution will meet all applicable cap5 ital requirements upon consummation of

6 the transaction.’’;

7 (B) by striking clauses (i) and (ii); and

8 (C) by redesignating clauses (iii) and (iv)

9 as clauses (i) and (ii), respectively;

10 (3) by striking subparagraph (G) and redesig11 nating the subsequent subparagraphs accordingly.

12 SEC. 205. ELIMINATE DUPLICATIVE REQUIREMENTS IM13 POSED ON BANK HOLDING COMPANIES

14 UNDER THE HOME OWNERS’ LOAN ACT.

15 (a) Section 10(a) of the Home Owners’ Loan Act (12

16 U.S.C. 1467a(a)) is amended by adding at the end the

17 following new paragraph:

18 ‘‘(5) EXEMPTION FOR BANK HOLDING COMPA19 NIES.—The provisions of this section shall not apply

20 to any company that is a bank holding company reg21 istered under, and subject to, the provisions of the

22 Bank Holding Company Act, or to any company di23 rectly or indirectly controlled by such company

24 (other than a savings association).’’.
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1 (b) Section 10(a)(1)(D) of the Home Owners’ Loan

2 Act (12 U.S.C. 1467a(a)(1)(D)) is amended to read as

3 follows:

4 ‘‘(i) SAVINGS AND LOAN HOLDING

5 COMPANY.—Except as provided in clause

6 (ii), the term ‘savings and loan holding

7 company’ means any company which di8 rectly or indirectly controls a savings asso9 ciation or controls any other company

10 which is a savings and loan holding com11 pany.

12 ‘‘(ii) EXCLUSION.—The term ‘savings

13 and loan holding company’ does not in14 clude a bank holding company that is reg15 istered under, and subject to, the provi16 sions of the Bank Holding Company Act,

17 or any company controlled by such bank

18 holding company.’’.

19 (c) Section 10(e)(1)(B) of the Home Owners’ Loan

20 Act (12 U.S.C. 1467a(e)(1)(B)) is amended—

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

22 (2) by inserting before the period at the end of

23 the first sentence the following: ‘‘, or (iii) acquired

24 by a bank holding company that is registered under,

25 and subject to, the provisions of the Bank Holding
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1 Company Act, or any company controlled by such

2 bank holding company’’.

3 SEC. 206. ELIMINATE REQUIREMENT THAT APPROVAL BE

4 OBTAINED FOR DIVESTITURES.

5 Section 2(g) of the Bank Holding Company Act (12

6 U.S.C. 1841(g)) is amended—

7 (1) by striking paragraph (3);

8 (2) by inserting ‘‘and’’ after paragraph (1); and

9 (3) by striking ‘‘; and’’ at the end of paragraph

10 (2) and inserting a period.

11 SEC. 207. ELIMINATE UNNECESSARY BRANCH APPLICA12 TIONS.

13 (a) NATIONAL BANK BRANCH APPLICATIONS.—Sec14 tion 5155(i) of the Revised Statutes (12 U.S.C. 36(i)) is

15 amended—

16 (1) by striking ‘‘No branch’’ and inserting the

17 following:

18 ‘‘(1) APPROVAL REQUIRED.—Except as pro19 vided in paragraph (2), no branch’’; and

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

21 paragraphs:

22 ‘‘(2) NO APPROVAL REQUIRED FOR CERTAIN

23 BRANCHES.—Notwithstanding this subsection, sub24 section (b) or subsection (c), the consent and ap25 proval of the Comptroller of the Currency shall not
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1 be required for a national banking association to es2 tablish and operate, or to retain and operate, a

3 branch or seasonal agency if—

4 ‘‘(A) the association is well-capitalized, as

5 that term is defined in section 38 of the Fed6 eral Deposit Insurance Act and regulations pre7 scribed by the Comptroller of the Currency

8 under such section;

9 ‘‘(B) the association received a composite

10 CAMEL rating of ‘1’ or ‘2’ under the Uniform

11 Financial Institutions Rating System (or an

12 equivalent rating under a comparable rating

13 system) as of its most recent examination;

14 ‘‘(C) the association did not receive a

15 ‘needs to improve’ or ‘substantial noncompli16 ance’ composite rating at its most recent exam17 ination under the Community Reinvestment

18 Act; and

19 ‘‘(D) the Comptroller of the Currency is

20 authorized to grant approval under this section

21 to such association to establish and operate, or

22 to retain and operate, a branch or seasonal

23 agency at the proposed location.

24 ‘‘(3) A branch or seasonal agency established by

25 a national banking association under paragraph (2)
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1 shall be deemed to have been established and oper2 ated pursuant to an application approved under this

3 section.’’.

4 (b) STATE MEMBER BANK BRANCH APPLICA5 TIONS.—The third undesignated paragraph of section 9

6 of the Federal Reserve Act (12 U.S.C. 321) is amended

7 by adding at the end the following: ‘‘Notwithstanding the

8 previous two sentences, the approval of the Board shall

9 not be required for a State member bank to establish and

10 operate a branch or seasonal agency if—

11 ‘‘(A) the State member bank is well-capitalized,

12 as that term is defined in section 38 of the Federal

13 Deposit Insurance Act and regulations prescribed by

14 the Board under such section;

15 ‘‘(B) the State member bank received a com16 posite CAMEL rating of ‘1’ or ‘2’ under the Uni17 form Financial Institutions Rating System (or an

18 equivalent rating under a comparable rating sys19 tem);

20 ‘‘(C) the State member bank did not receive a

21 ‘needs to improve’ or ‘substantial noncompliance’

22 composite rating at its most recent examination

23 under the Community Reinvestment Act; and

24 ‘‘(D) the Board is authorized to grant approval

25 under this section to such State member bank to es-
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1 tablish and operate a branch or seasonal agency at

2 the proposed location.

3 A branch or seasonal agency established by a State mem4 ber bank under the previous sentence shall be deemed to

5 have been established and operated pursuant to an appli6 cation approved under this section.’’.

7 (c) STATE NONMEMBER BANK BRANCH APPLICA8 TIONS.—Section 18(d) of the Federal Deposit Insurance

9 Act (12 U.S.C. 1828(d)) is amended by adding at the end

10 the following new paragraphs:

11 ‘‘(5) APPLICATION EXEMPTION FOR CERTAIN

12 BANKS.—Notwithstanding paragraph (1), the con13 sent of the Corporation shall not be required for a

14 State nonmember insured bank to establish and op15 erate any domestic branch if—

16 ‘‘(A) the bank is well-capitalized, as that

17 term is defined in section 38 and regulations

18 prescribed by the Corporation under such sec19 tion;

20 ‘‘(B) the bank received a composite

21 CAMEL rating of ‘1’ or ‘2’ under the Uniform

22 Financial Institutions Rating System (or an

23 equivalent rating under a comparable rating

24 system) as of its most recent examination;
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1 ‘‘(C) the bank did not receive a ‘needs to

2 improve’ or ‘substantial noncompliance’ compos3 ite rating at its most recent examination under

4 the Community Reinvestment Act; and

5 ‘‘(D) the Corporation is authorized to give

6 consent under this section to such bank to es7 tablish and operate a domestic branch at the

8 proposed location.

9 ‘‘(6) APPROVAL GRANTED.—A branch estab10 lished by a State member bank under paragraph (5)

11 shall be deemed to have been established and oper12 ated pursuant to an application approved under this

13 section.’’.

14 SEC. 208. ELIMINATE BRANCH APPLICATIONS/REQUIRE15 MENTS FOR ATMs AND SIMILAR FACILITIES.

16 (1) ‘‘BRANCH’’ UNDER NATIONAL BANK ACT.—Sec17 tion 5155(j) of the Revised Statutes (12 U.S.C. 36(j)) is

18 amended by adding at the end the following: ‘‘The term

19 ‘branch’ does not include automated teller machines or re20 mote service units.’’.

21 (2) ‘‘BRANCH’’ UNDER FEDERAL DEPOSIT INSUR22 ANCE ACT.—Section 3(o) of the Federal Deposit Insur23 ance Act (12 U.S.C. 1813(o)) is amended by striking

24 ‘‘lent; and the’’ and inserting ‘‘lent. The term ‘domestic
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1 branch’ does not include automated teller machines or re2 mote service units. The’’.

3 SEC. 209. ELIMINATE REQUIREMENT FOR APPROVAL OF IN4 VESTMENTS IN BANK PREMISES FOR WELL

5 CAPITALIZED AND WELL MANAGED BANKS.

6 Section 24A of the Federal Reserve Act (12 U.S.C.

7 371d) is amended by inserting before the period in that

8 section the following: ‘‘unless such bank received a com9 posite CAMEL rating of ‘1’ or ‘2’ under the Uniform Fi10 nancial Institutions Rating System (or an equivalent rat11 ing under a comparable rating system) as of its most re12 cent examination and, both before and immediately follow13 ing the investment or loan, is well capitalized (as defined

14 under section 38 of the Federal Deposit Insurance Act)’’.

15 SEC. 210. ELIMINATE UNNECESSARY FILING FOR OFFICER

16 AND DIRECTOR APPOINTMENTS.

17 Section 32 of the Federal Deposit Insurance Act (12

18 U.S.C. 1831i) is amended as follows:

19 (1) in subsection (a)—

20 (A) by inserting after ‘‘30 days (or such

21 other period as determined by the agency)’’;

22 (B) by striking ‘‘if the insured depository

23 institution or depository institution holding

24 company’’ and inserting ‘‘if’’;

25 (C) by striking paragraphs (1) and (2);
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1 (D) in paragraph (3)—

2 (i) by inserting ‘‘the insured deposi3 tory institution or depository institution

4 holding company’’ before ‘‘is not in compli5 ance’’; and

6 (ii) by striking the period and insert7 ing instead ‘‘; and’’;

8 (E) by redesignating paragraph (3) as

9 paragraph (1); and

10 (F) by adding at the end the following new

11 paragraph:

12 ‘‘(2) the agency determines, in connection with

13 its review of the plan required under section 38 or

14 otherwise, that such prior notice is appropriate.’’;

15 and

16 (2) in subsection (b), by striking ‘‘30-day’’ and

17 inserting in its place ‘‘notice’’.

18 SEC. 211. STREAMLINING PROCESS FOR DETERMINING

19 NEW NONBANKING ACTIVITIES.

20 Section 4(c)(8) of the Bank Holding Company Act

21 of 1956 (12 U.S.C. 1843(c)(8)) is amended by striking

22 ‘‘and opportunity for hearing’’.
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1 Subtitle B—Streamlining of Gov2 ernment Regulations; Mis3 cellaneous Provisions

4 SEC. 221. ELIMINATE THE PER-BRANCH CAPITAL REQUIRE5 MENT FOR NATIONAL BANKS AND STATE

6 MEMBER BANKS.

7 Section 5155 of the Revised Statutes (12 U.S.C. 36)

8 is amended by striking subsection (h).

9 SEC. 222. BRANCH CLOSURES.

10 Section 39 of the Federal Deposit Insurance Act (12

11 U.S.C. 1831p) (as added by section 228 of the Federal

12 Deposit Insurance Corporation Improvement Act of 1991)

13 is amended by adding at the end the following new sub14 sections:

15 ‘‘(a) DEFINITIONS.—For purposes of this section, the

16 term ‘branch’ shall not include the following:

17 ‘‘(1) Automated teller machines.

18 ‘‘(2) A branch acquired through merger, con19 solidation, purchase, assumption, or other method

20 that is located in a local market area currently

21 served by another branch of the acquiring institu22 tion.

23 ‘‘(3) A branch that is closed and reopened in

24 another location within the same local market area

25 which would continue to provide banking services to
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1 substantially all of the customers currently served by

2 the branch that is closed.

3 ‘‘(4) A branch that is closed in connection

4 with—

5 ‘‘(A) an emergency acquisition under—

6 ‘‘(i) section 11(n); or

7 ‘‘(ii) subsections (f) or (k) of section

8 13; or

9 ‘‘(B) any assistance provided by the Cor10 poration under section 13(c).

11 ‘‘(5) Any other branch closure whose exemption

12 from the notice requirements of this section would

13 not produce a result inconsistent with the purposes

14 of this section. The appropriate Federal banking

15 agency shall, by regulation, determine the cir16 cumstances under which such exemptions will be

17 granted.

18 ‘‘(e) EFFECTIVE DATE.—The amendments made by

19 this section shall become effective on the date of enact20 ment of the Federal Deposit Insurance Corporation Im21 provement Act of 1991.’’.
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1 SEC. 223. AMENDMENTS TO THE DEPOSITORY INSTITU2 TIONS MANAGEMENT INTERLOCKS ACT.

3 (a) DUAL SERVICE IN SAME AREA, TOWN, OR VIL4 LAGE.—Section 203 of the Depository Institution Man5 agement Interlocks Act (12 U.S.C. 3202) is amended—

6 (1) by inserting ‘‘(a) PROHIBITIONS.—’’ before

7 ‘‘A management official’’; and

8 (2) by adding after subsection (a) the following

9 new subsection:

10 ‘‘(b) SMALL MARKET SHARE EXEMPTION.—This sec11 tion shall not prohibit a management official of a deposi12 tory institution or depository holding company from serv13 ing as a management official of another depository institu14 tion or depository holding company not affiliated therewith

15 if the depository institutions or depository holding compa16 nies with which the management official serves hold, to17 gether with their affiliates, in the aggregate no more than

18 20 percent of the deposits in each relevant geographic

19 banking market, as defined by the Board of Governors of

20 the Federal Reserve System, where offices of the deposi21 tory institutions or depository holding companies or their

22 affiliates are located.’’.

23 (b) DUAL SERVICE AMONG LARGER ORGANIZA24 TIONS.—Section 204 of the Depository Institution Man25 agement Interlocks Act (12 U.S.C. 3203) is amended—
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1 (1) by striking ‘‘$1,000,000,000’’ and inserting

2 ‘‘$2,000,000,000’’; and

3 (2) by striking ‘‘$500,000,000’’ and inserting

4 ‘‘$1,000,000,000’’; and,

5 (3) by adding at the end thereof the following:

6 ‘‘The dollar amount in this section shall be adjusted

7 annually after December 31, 1994, by the annual

8 percentage increase in the Consumer Price Index for

9 Urban Wage Earners and Clerical Workers pub10 lished by the Bureau of Labor Statistics.’’.

11 (c) EXTENSION OF GRANDFATHER EXEMPTION.—

12 Section 206 of the Depository Institution Management

13 Interlocks Act (12 U.S.C. 3205) is amended—

14 (1) in subsection (a), by striking ‘‘for a period

15 of, subject to the requirements of subsection (c), 20

16 years after the date of enactment of this title’’;

17 (2) by inserting a period after ‘‘position’’ the

18 second place such term appears;

19 (3) in subsection (b), by striking the second

20 sentence; and

21 (4) by striking subsection (c).

22 (d) RULES OR REGULATIONS.—Section 209 of the

23 Depository Institution Management Interlocks Act (12

24 U.S.C. 3207) is amended—
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1 (1) by striking ‘‘(a) IN GENERAL.—Rules’’ and

2 inserting ‘‘Rules’’;

3 (2) by inserting ‘‘, including rules or regula4 tions which permit service by a management official

5 which would otherwise be prohibited by section 203

6 or section 204,’’ after ‘‘chapter’’; and

7 (3) by striking subsections (b) and (c).

8 SEC. 224. CONSOLIDATION OF APPRAISAL SUBCOMMITTEE.

9 (a) APPRAISAL SUBCOMMITTEE CONSOLIDATION.—

10 The Appraisal Subcommittee established under the Fed11 eral Financial Institutions Examination Council Act of

12 1978 is abolished and its functions shall be consolidated

13 into the Financial Institutions Examination Council.

14 (b) CONFORMING AMENDMENTS TO TITLE XI.—

15 (1) The Federal Financial Institutions Exam16 ination Council Act of 1978 is amended by striking

17 the following sections:

18 (A) Section 1102 (12 U.S.C. 3310).

19 (B) Section 1104 (12 U.S.C. 3333).

20 (C) Section 1105 (12 U.S.C. 3334).

21 (D) Section 1106 (12 U.S.C. 3335).

22 (E) Section 1108 (12 U.S.C. 3337).

23 (F) Section 1116(e) (12 U.S.C. 3345(e)).

24 (G) Section 1122(e) (12 U.S.C. 3351(e)).
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1 (2) Section 1121 of the FIECA of 1978 (12

2 U.S.C. 3350) is amended—

3 (A) by striking paragraphs (2) and (8);

4 (B) by redesignating paragraphs (3)

5 through (7) as paragraphs (2) through (6), re6 spectively; and

7 (C) by redesignating paragraphs (9)

8 through (10) as paragraphs (7) through (8), re9 spectively.

10 (c) CONFORMING AMENDMENT.—Section 202(e) of

11 the National Housing Act (12 U.S.C. 1708(e)) is amended

12 by striking paragraph (2) and redesignating paragraphs

13 (3) and (4) as paragraphs (2) through (3).

14 (d) CONSOLIDATION OF FUNCTIONS TO FFIEC; RE15 DUCTION OF ASSESSMENTS ON APPRAISERS.—

16 (1) Section 1103 of the Financial Institutions

17 Reform, Recovery and Enforcement Act of 1989 (12

18 U.S.C. 3332) is amended—

19 (A) by striking ‘‘Appraisal Subcommittee’’

20 each place it appears and inserting instead ‘‘Fi21 nancial Institutions Examination Council’’;

22 (B) in paragraph (a)(3), by inserting be23 fore ‘‘maintain’’ the words ‘‘if the Council de24 termines that doing so will further the purposes

25 of this chapter,’’; and
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1 (C) by amending paragraph (a)(4) to read

2 as follows:

3 ‘‘(4) include in its annual report to Congress a

4 description of how it has performed the functions as5 signed to it under this chapter.’’.

6 (2) Section 1109 of the Financial Institutions

7 Reform, Recovery and Enforcement Act of 1989 (12

8 U.S.C. 3338) is amended to read as follows:

9 ‘‘SEC. 1109. ROSTER OF STATE CERTIFIED OR LICENSED

10 APPRAISERS.

11 ‘‘(a) ROSTER; COLLECTION OF FEES.—Each State

12 with an appraiser certifying and licensing agency whose

13 certifications and licenses comply with this chapter,

14 shall—

15 ‘‘(1) upon request of the Federal Financial In16 stitutions Examination Council, transmit to the

17 Council annually (or at any less frequent interval

18 specified by the Council) a roster listing individuals

19 who have received a State certification or license in

20 accordance with this chapter;

21 ‘‘(2) collect from such individuals who perform

22 or seek to perform appraisals in federally related

23 transactions, an annual registry fee, the amount of

24 which is to be determined by the Council but not to
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1 exceed $25 per year, to support its activities under

2 this chapter; and

3 ‘‘(3) transmit all registry fees to the Council on

4 an annual basis.

5 ‘‘(b) STATUS OF REGISTRY FEES.—Registry fees col6 lected and transmitted to the Council pursuant to this sec7 tion shall not constitute appropriated funds.’’.

8 (3) Section 1116(e) of the Financial Institu9 tions Reform, Recovery and Enforcement Act of

10 1989 (12 U.S.C. 3345(e)) is amended by striking

11 ‘‘Appraisal Subcommittee’’ and ‘‘Subcommittee’’ and

12 inserting instead ‘‘Financial Institutions Examina13 tion Council’’.

14 (4) Section 1118 of the Financial Institutions

15 Reform, Recovery and Enforcement of 1989 (12

16 U.S.C. 3347) is amended by striking ‘‘Appraisal

17 Subcommittee’’ each place it appears and inserting

18 instead ‘‘Financial Institutions Examination Coun19 cil’’.

20 (5) Section 1119 of the Financial Institutions

21 Reform, Recovery and Enforcement Act of 1989 (12

22 U.S.C. 3348) is amended—

23 (A) by striking ‘‘Subject to the approval of

24 the Council, the Appraisal Subcommittee’’ and

25 inserting in its place ‘‘The Council’’;
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1 (B) by striking ‘‘Appraisal Subcommittee’’

2 each place it appears and inserting instead ‘‘Fi3 nancial Institutions Examination Council’’.

4 (6) Section 1120 of the Financial Institutions

5 Reform, Recovery and Enforcement Act of 1989 (12

6 U.S.C. 3349) is amended by striking ‘‘Appraisal

7 Subcommittee’’ and inserting instead ‘‘Financial In8 stitutions Examination Council’’.

9 (e) REMISSION OF FUNDS TO THE TREASURY.—All

10 funds held by, and the right to collect all funds owed to,

11 the Appraisal Subcommittee on the effective date of this

12 section shall be transferred to the United States Treasury.

13 (f) REPAYMENT OF PREPAID REGISTRY FEES.—Be14 fore the effective date specified in subsection (g), the Ap15 praisal Subcommittee shall refund to the States any reg16 istry fees prepaid to the Subcommittee for the period after

17 December 31, 1995.

18 (g) EMPLOYEES TRANSFERRED.—

19 (1) IDENTIFYING EMPLOYEES FOR TRANS20 FER.—

21 (A) IN GENERAL.—The Financial Institu22 tions Examination Council shall identify those

23 employees of the Appraisal Subcommittee for

24 transfer to the Council needed to perform func25 tions transferred from the Subcommittee to the
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1 Council, in a manner that the Council, in its

2 sole discretion, deems equitable.

3 (B) IDENTIFIED EMPLOYEES TRANS4 FERRED.—All employees of the Appraisal Sub5 committee identified for transfer to the Council

6 under subparagraph (A) shall be transferred to

7 the Council for employment on the date set

8 forth in subsection (h).

9 (2) PRIORITY OF THIS ACT.—If any protection

10 provided under this section conflicts with any protec11 tion provided to transferred employees under section

12 3503 of title 5, United States Code, the provisions

13 of this section shall control.

14 (3) RIGHTS OF TRANSFERRED EMPLOYEES.—

15 (A) COMPARABLE POSITIONS.—Each em16 ployee transferred to the Financial Institutions

17 Examination Council shall, on the date of

18 transfer, be appointed to a position under the

19 compensation system and performance evalua20 tion system of the Council that is comparable in

21 tenure and grade to that of the position the em22 ployee held on the enactment date of this Act.

23 (B) PAY.—

24 (i) IN GENERAL.—Except as provided

25 in clause (ii), each employee transferred to
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1 the Financial Institutions Examination

2 Council under this section shall, during the

3 1-year period after the date of transfer, re4 ceive pay at a rate not less than the basic

5 rate of pay that the employee received at

6 the Appraisal Subcommittee during the 1-

7 year period immediately before the enact8 ment date of this Act.

9 (ii) EXCEPTIONS.—Clause (i) does not

10 limit the right of the Council to reduce a

11 transferred employee’s rate of basic pay—

12 (I) for cause;

13 (II) for unacceptable perform14 ance; or

15 (III) with the employee’s consent.

16 (iii) PROTECTION ONLY WHILE EM17 PLOYED.—Subparagraph (B) applies to a

18 transferred employee only while that em19 ployee remains employed by the Council.

20 (4) RETIREMENT BENEFITS.—

21 (A) CONTINUATION OF EXISTING RETIRE22 MENT PLAN.—Except as otherwise permitted by

23 law, each employee who transfers to the Finan24 cial Institutions Examination Council under

25 this section shall remain enrolled in the retire-
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1 ment plan (and any associated thrift savings

2 plan) in which he or she was enrolled on the

3 day before the date of transfer while he or she

4 remains employed by the Council.

5 (B) EMPLOYER’S CONTRIBUTION.—The

6 Financial Institutions Examination Council

7 shall pay any employer contributions to the re8 tirement plan in which each transferred em9 ployee is subject during his or her period of

10 service at the Council, as required under that

11 plan.

12 (5) NO PRIVATE RIGHT OF ACTION.—This sec13 tion does not provide any employee transferred to

14 the Financial Institutions Examination Council

15 under this section with any right of action to require

16 the Council, or any officer, employee, agent, or ad17 ministrator thereof, to take any action under this

18 section.

19 (h) EFFECTIVE DATE.—This section shall take effect

20 90 days from enactment, except that, unless otherwise

21 provided, subsections (f) and (g) shall take effect imme22 diately.
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1 SEC. 225. ELIMINATE UNNECESSARY AND DUPLICATIVE

2 RECORDKEEPING AND REPORTING REQUIRE3 MENTS RELATING TO LOANS TO EXECUTIVE

4 OFFICERS AND PERMIT PARTICIPATION IN

5 EMPLOYEE BENEFIT PLANS.

6 (a) AMENDMENTS TO SECTION 22(h) OF THE FED7 ERAL RESERVE ACT.—Section 22(h) of the Federal Re8 serve Act (12 U.S.C. 375b(2)) is amended—

9 (1) EMPLOYEE BENEFIT PLANS.—In paragraph

10 (2)—

11 (A) by renumbering subparagraphs (A)

12 and (C) as clauses (i) through (iii) respectively;

13 (B) by striking ‘‘(2) Preferential terms

14 prohibited’’ and inserting in its place:

15 ‘‘(2) PREFERENTIAL TERMS PROHIBITED.—

16 ‘‘(A) IN GENERAL; and

17 (C) by inserting at the end a new subpara18 graph (B) to read as follows:

19 ‘‘(B) EXCEPTION.—Nothing in this para20 graph shall prohibit extensions of credit made

21 pursuant to a benefit or compensation program

22 widely available to employees of the member

23 bank.’’;

24 (2) EXCEPTION FOR EXTENSIONS OF CREDIT

25 TO EXECUTIVE OFFICERS AND DIRECTORS OF

26 NONBANK AFFILIATES.—In subsection (h)(8)(B) by
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1 striking the phrase’’, except as that subparagraph

2 makes applicable paragraph (2),’’; and

3 (3) RECORDKEEPING REQUIREMENTS.—In

4 paragraph (10), by adding at the end the following:

5 ‘‘The Board shall specify by regulation the record6 keeping required of member banks to ensure compli7 ance with this section. Compliance with the record8 keeping requirements adopted pursuant to this para9 graph shall satisfy the audit requirement of section

10 36(e) of the Federal Deposit Insurance Act, to the

11 extent that its requirements are applicable to this

12 section.’’.

13 (b) REPORTING REQUIREMENTS.—

14 (1) UNNECESSARY REPORTS.—Section 22(g) of

15 the Federal Reserve Act is amended by deleting

16 paragraphs (6) and (9) and in their entirety and re17 numbering paragraphs (7), (8), and (10) as para18 graphs (6), (7), and (8), respectively.

19 (2) UNNECESSARY REPORTS.—Section 7(k) of

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

21 is amended to read as follows:

22 ‘‘(k) RESERVED.’’.

23 (3) UNNECESSARY REPORTS REGARDING LOANS

24 FROM CORRESPONDENT BANKS.—Section 106(b)(2)
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1 of the Bank Holding Company Act Amendments of

2 1970 (12 U.S.C. 1972(2)) is amended—

3 (A) by deleting subparagraph (G) in its en4 tirety; and

5 (B) by redesignating subparagraphs (H)

6 and (I) as subparagraphs (G) and (H), respec7 tively.

8 SEC. 226. EXPANDED REGULATORY DISCRETION FOR

9 SMALL BANK EXAMINATIONS.

10 (a) TIME PERIOD DISCRETION.—Section 10(d)(4) of

11 the Federal Deposit Insurance Act (12 U.S.C. 1820(d)(4))

12 is amended by—

13 (1) in the title, by striking ‘‘18-MONTH RULE’’

14 and inserting ‘‘24-MONTH RULE’’; and

15 (2) in the first sentence, by striking ‘‘18-

16 month’’ and inserting ‘‘24-month’’.

17 (b) SMALL BANK SIZE DISCRETION.—Section

18 10(d)(8) of the Federal Deposit Insurance Act (12 U.S.C.

19 1820(d)(8)) is amended by striking ‘‘$175,000,000’’ and

20 inserting ‘‘$250,000,000’’.

21 (c) INFLATION ADJUSTMENT.—Section 10(d) of the

22 Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is

23 amended by adding at the end thereof the following new

24 paragraph:
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1 ‘‘(9) The dollar amount in this section shall be

2 adjusted annually after December 31, 1994, by the

3 annual percentage increase in the Consumer Price

4 Index for Urban Wage Earners and Clerical Work5 ers published by the Bureau of Labor Statistics.’’.

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 NONBANK FINANCIAL INSTI11 TUTION CUSTOMERS.

12 (a) IN GENERAL.—Subchapter 2 of chapter 53 of

13 title 31, United States Code, is amended by striking sec14 tion 5327.

15 (b) TECHNICAL AND CONFORMING AMENDMENT.—

16 Section 5321(a) of title 31, United States Code, is amend17 ed by striking paragraph (7).

18 (c) CLERICAL AMENDMENT.—The table of sections

19 for subchapter 2 of chapter 53 of title 31, United States

20 Code, is amended by striking the item relating to section

21 5327.

22 SEC. 229. PAPERWORK REDUCTION REVIEW.

23 Not later than 180 days after the date of enactment

24 of this Act, each appropriate Federal banking agency, in
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1 consultation with insured depository institutions and other

2 interested parties, shall—

3 (1) review the extent to which current regula4 tions require insured depository institutions to

5 produce unnecessary internal written policies; and

6 (2) eliminate such requirements, where appro7 priate.

8 For purposes of this section, the terms ‘‘insured deposi9 tory institution’’ and ‘‘appropriate Federal banking agen10 cy’’ have the same meanings as in section 3 of the Federal

11 Deposit Insurance Act.

12 SEC. 230. REPEAL OF UNNECESSARY REPORTING REQUIRE13 MENTS.

14 Sections 122 and 477 of the Federal Deposit Insur15 ance Corporation Improvement Act of 1991 (Public Law

16 102–242) are hereby repealed.

17 SEC. 231. DAILY CONFIRMATIONS FOR HOLD-IN-CUSTODY

18 REPURCHASE TRANSACTIONS.

19 Within one year after the date of enactment of this

20 section, the Secretary of the Treasury shall revise the reg21 ulation under section 15C of the Securities Exchange Act

22 of 1934 relating to the obligations of financial institutions

23 holding custody of securities subject to a repurchase

24 agreement to confirm, daily and in writing, the securities

25 that are subject to such repurchase agreement. Such revi-
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1 sion shall permit the counterparty to such agreement to

2 waive in writing the right to obtain such daily written con3 firmation if the counterparty has received a disclosure, in

4 a form prescribed by the Secretary, that adequately in5 forms the counterparty of the benefits of receiving such

6 daily written confirmations.

7 SEC. 232. REQUIRED REGULATORY REVIEW OF REGULA8 TIONS.

9 (a) IN GENERAL.—The Financial Institutions Exam10 ination Council shall, within every 10-year period, conduct

11 a review of all of the regulations issued pursuant to its

12 or its representatives’ authority to identify outdated or

13 otherwise unnecessary regulatory requirements imposed

14 upon insured depository institutions.

15 (b) PROCESS.—In conducting the review required

16 under subsection (a), the Council shall—

17 (1) categorize such regulations by type (such as

18 consumer regulations, safety and soundness regula19 tions, or such other designation as determined by

20 the Council); and

21 (2) at regular intervals, provide notice and so22 licit public comment on a particular category or cat23 egories of regulations, requesting commentators to

24 identify areas of such regulations considered out25 dated, unnecessary or unduly burdensome.
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1 The Council shall, over a 10-year period, ensure that all

2 categories of regulations have been set out for notice and

3 comment.

4 (c) REGULATORY RESPONSE.—The Council shall—

5 (1) publish in the Federal Register a summary

6 of the comments received pursuant to this section,

7 identifying significant issues raised and providing

8 comment on such issues; and

9 (2) eliminate unnecessary regulations wherever

10 appropriate.

11 (d) REPORT TO CONGRESS.—The Council shall, with12 in 30 days of publishing the summary required under sub13 section (c)(1), provide a report to the Congress summariz14 ing any significant issues raised during such comment pe15 riod, the relative merits of such issues, and whether the

16 appropriate Federal banking agency involved can address

17 the regulatory burdens associated with such issues by reg18 ulation, or whether such concerns can only be addressed

19 by legislation.

20 (e) DEFINITIONS.—For purposes of this section, the

21 terms ‘‘insured depository institution’’ and ‘‘appropriate

22 Federal banking agency’’ have the same meaning as in

23 section 3 of the Federal Deposit Insurance Act.
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1 SEC. 233. COUNTRY RISK REQUIREMENTS.

2 (a) Section 905 of the International Lending Super3 vision Act (12 U.S.C. 3904) is amended—

4 (1) in subsection (a)(1), by striking ‘‘shall’’ and

5 inserting ‘‘may’’; and

6 (2) in subsection (b), by striking ‘‘shall’’ and

7 inserting ‘‘may’’.

8 (b) Section 905A of the International Lending Super9 vision Act (12 U.S.C. 3904a) is repealed.

10 SEC. 234. AUDIT COSTS.

11 (a) IN GENERAL.—Section 36 of the Federal Deposit

12 Insurance Act (12 U.S.C. 1831m) (as added by section

13 112 of the Federal Deposit Insurance Corporation Im14 provement Act of 1991) is amended—

15 (1) AUDITOR ATTESTATIONS.—

16 (A) in subsection (a)(2)(A)(ii), by striking

17 ‘‘subsections (c) and (d)’’ and inserting ‘‘sub18 section (c)’’;

19 (B) by striking subsection (c);

20 (C) in subsection (d), by deleting ‘‘(d)’’

21 and inserting ‘‘(c)’’; and

22 (D) by striking subsection (e);

23 (2) INDEPENDENT AUDIT COMMITTEES.—

24 (A) in subsection (g)(1)(A), by striking

25 ‘‘entirely’’ and inserting ‘‘the majority of which

26 is’’;
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1 (B) in subsection (g)(1), by inserting the

2 following new subparagraph:

3 ‘‘(D) EXEMPTIVE AUTHORITY.—Each ap4 propriate Federal banking agency shall, by reg5 ulation, exempt from the requirements of this

6 subsection all insured depository institutions

7 which face hardships in retaining competent di8 rectors on their internal audit committees as a

9 result of this subsection. In determining what

10 types of institutions will be exempted, the agen11 cy shall consider such factors as the size of the

12 institution and the availability of competent

13 outside directors in the community.’’.

14 (3) PUBLIC AVAILABILITY.—In subsection

15 (a)(3), by inserting at the end the following new sen16 tence: ‘‘Notwithstanding the previous sentence, the

17 Corporation and the appropriate Federal banking

18 agencies may designate certain information as privi19 leged and confidential and not available to the

20 public.’’.

21 SEC. 235. DUE PROCESS PROTECTIONS.

22 (a) ATTACHMENT OF ASSETS.—

23 (1) INSURED DEPOSITORY INSTITUTIONS.—
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1 (A) Section 11(d)(19) of the Federal De2 posit Insurance Act (12 U.S.C. 1821(d)(19)) is

3 amended—

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

5 ‘‘without regard’’ and all that follows

6 through ‘‘immediate’’; and

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

8 ‘‘(as modified with respect to such proceed9 ing by subparagraph (A))’’.

10 (B) Section 8(b) of the Federal Deposit

11 Insurance Act (12 U.S.C. 1818(b)) is amended

12 by redesignating subsection (b)(6)(F) as sub13 section (b)(6)(G), and inserting after subsection

14 (b)(6)(E) the following:

15 ‘‘(F) prohibit such person from withdraw16 ing, transferring, removing, dissipating, or dis17 posing of any funds, assets or other property

18 where injury, loss, or damage to such property

19 is irreparable and immediate; and’’.

20 (C) Section 8(i) of the Federal Deposit In21 surance Act (12 U.S.C. 1818(i)) is amended by

22 striking paragraph (4)(B) and inserting the fol23 lowing:
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1 ‘‘(B) STANDARD.—Rule 65 of the Federal

2 Rules of Civil Procedure shall apply with re3 spect to any proceeding under this paragraph.’’.

4 (2) CREDIT UNIONS.—

5 (A) Section 207(b)(2)(H) of the Federal

6 Credit Union Act (12 U.S.C. 1787(b)(2)(H)) is

7 amended—

8 (i) in clause (i), by striking ‘‘without

9 regard’’ and all that follows through ‘‘im10 mediate’’; and

11 (ii) in clause (ii), by striking ‘‘(as

12 modified with respect to such proceeding

13 by clause (i))’’.

14 (B) Section 206(e)(3) of the Federal Cred15 it Union Act (12 U.S.C. 1786(e)(3)) is amend16 ed by redesignating subsection (e)(3)(F) as sub17 section (e)(3)(G), and inserting after subsection

18 (e)(3)(E) the following:

19 ‘‘(F) prohibit such person from withdraw20 ing, transferring, removing, dissipating, or dis21 posing of any funds, assets or other property

22 where injury, loss, or damage to such property

23 is irreparable and immediate; and’’.
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1 SEC. 236. CULPABILITY STANDARDS FOR OUTSIDE DIREC2 TORS.

3 Section 3(u) of the Federal Deposit Insurance Act

4 (12 U.S.C. 1813(u)) is amended—

5 (1) in paragraph (1), by inserting ‘‘(other than

6 an outside director)’’ after ‘‘director’’;

7 (2) in paragraph (3), inserting ‘‘(other than an

8 outside director)’’ after ‘‘any other person’’; and

9 (3) in paragraph (4), by inserting ‘‘or outside

10 director’’ after ‘‘or accountant)’’.

11 SEC. 237. RULES ON DEPOSIT TAKING.

12 Section 29(g)(3) of the Federal Deposit Insurance

13 Act (12 U.S.C. 1831f(g)(3)) is amended—

14 (1) by inserting ‘‘undercapitalized’’ after ‘‘in15 cludes any’’;

16 (2) by inserting ‘‘undercapitalized’’ after ‘‘em17 ployee of any’’; and

18 (3) by striking ‘‘that is not well capitalized’’.

19 SEC. 238. TRANSITION PERIOD FOR NEW REGULATIONS.

20 Section 302(b) of the Riegle Community Develop21 ment and Regulatory Improvement Act of 1994 is amend22 ed by striking ‘‘a calendar quarter’’ and inserting ‘‘the

23 semiannual period’’

24 SEC. 239. FOREIGN BANK APPLICATIONS.

25 Section 7(d) of the International Banking Act of

26 1978 (12 U.S.C. 3105(d)) is amended as follows:
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1 (1) By striking paragraphs (1) and (2) and in2 serting in lieu thereof the following:

3 ‘‘(1) PRIOR REVIEW REQUIRED.—Before any

4 foreign bank application to establish a branch or an

5 agency, or acquire ownership or control of a com6 mercial lending company may be approved by any

7 appropriate State bank supervisor or the Comptrol8 ler of the Currency, the application must first be

9 submitted for review to the Board for a period of

10 not more than 180 days. The purpose of the review

11 is to determine whether approval of any application

12 would place at risk the safe and sound operation of

13 the United States banking system.

14 ‘‘(2) AUTHORITY OF THE BOARD.—Based on

15 the determination described in paragraph (1), the

16 Board is authorized to—

17 ‘‘(A) deny the application;

18 ‘‘(B) extend for 180 days the period for re19 view of any application, after providing notice

20 of, and the reasons for, the extension to the ap21 plicant and any appropriate State bank super22 visor or the Comptroller of the Currency; or

23 ‘‘(C) approve the application, either by af24 firmative action or by taking no action during

25 the 180 day review period.’’.
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1 (2) In paragraph (3), by redesignating subpara2 graphs (A) through (D) as subparagraphs (C)

3 through (F); by striking all from ‘‘In’’ through ‘‘ac4 count—’’; and by inserting the following: ‘‘In mak5 ing any determination under paragraph (1), the

6 Board may consider—

7 ‘‘(A) whether the foreign bank engages di8 rectly in the business of banking outside the

9 United States and is subject to comprehensive

10 supervision or regulation on a consolidated

11 basis by the appropriate authorities in its home

12 country; and

13 ‘‘(B) whether the foreign bank has fur14 nished to the Board the information it needs to

15 adequately assess the application.’’.

16 SEC. 240. DUPLICATE EXAMINATION OF FOREIGN BANKS.

17 Section 7(c)(1) of the International Banking Act of

18 1978 (12 U.S.C. 3105(b)(1)) is amended by striking sub19 paragraphs (B), (C), and (D) and inserting in lieu thereof:

20 ‘‘(B) RELIANCE ON PRIMARY SUPER21 VISOR.—In order to avoid unnecessary duplica22 tion and cost, the Board shall, to the extent

23 practicable, rely upon the reports of examina24 tions made by the Comptroller, the Federal De25 posit Insurance Corporation, or the appropriate
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1 State bank supervisor in achieving the purposes

2 of this subsection.

3 ‘‘(C) ON-SITE EXAMINATION.—Each

4 branch or agency of a foreign bank shall be

5 subject to on-site examination on the same

6 schedule that a comparable national or State

7 non-member bank would be examined by the

8 Comptroller of the Currency or the Federal De9 posit Insurance Corporation.

10 ‘‘(D) COST OF EXAMINATIONS.—The cost

11 of any examination undertaken pursuant to

12 subparagraph (A) shall be assessed against and

13 collected from the foreign bank or the foreign

14 company that controls the foreign bank, as the

15 case may be, but only to the same extent that

16 fees are collected by the Board for examination

17 of any State member insured bank.’’.

18 SEC. 241. SECOND MORTGAGES.

19 Section 103 of the Truth in Lending Act (15 U.S.C.

20 1602) is amended—

21 (1) in paragraph (aa)(1) by inserting ‘‘a subor22 dinate mortgage on’’ after ‘‘secured by’’; and

23 (2) by deleting ‘‘a residential mortgage trans24 action’’.
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1 SEC. 242. OCC AUTHORITY.

2 The Comptroller of the Currency shall not authorize

3 or allow by rule, regulation, order, action, inaction or oth4 erwise any activity that would have the effect of permitting

5 a national bank to provide insurance as principal, agent

6 or broker, and no national bank shall engage in any such

7 activity, except to the extent that such specific activity was

8 authorized for national banks on June 12, 1995.

9 TITLE III—LENDER LIABILITY

10 SEC. 301. LENDER LIABILITY.

11 (a) IN GENERAL.—The Federal Deposit Insurance

12 Act (12 U.S.C. 1811 et seq.) is amended by adding after

13 section 44, the following new section:

14 ‘‘SEC. 45. LENDER, FIDUCIARY AND GOVERNMENT AGENCY

15 ENVIRONMENTAL LIABILITIES.

16 ‘‘(a) LENDER ENVIRONMENTAL LIABILITY.—

17 ‘‘(1) Nothwithstanding any other provision or

18 rule of Federal law, no lender shall be liable pursu19 ant to any Federal environmental law, except as pro20 vided in this section.

21 ‘‘(2) A lender shall only be liable pursuant to

22 an Federal environmental law when the lender actu23 ally participates in management of another person’s

24 activities which create liability under the same Fed25 eral environmental law.

26 ‘‘(3) For purposes of this section—
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1 ‘‘(A) the term ‘participate in management’

2 means actually participating in the management

3 or operational affairs of other persons’ activi4 ties, and does not include merely having the ca5 pacity to influence, or the unexercised right to

6 control such activities;

7 ‘‘(B) a person shall be considered to ‘par8 ticipate in management’ while a borrower is still

9 in possession of property, only if such person—

10 ‘‘(i) exercises decisionmaking control

11 over the environmental compliance of a

12 borrower, such that the person has under13 taken responsibility for the hazardous sub14 stance handling or disposal practices of the

15 borrower; or

16 ‘‘(ii) exercises control at a level com17 parable to that of a manager of the enter18 prise of the borrower, such that the person

19 has assumed or manifested responsibility

20 for the overall management of the enter21 prise encompassing day-to-day decision22 making with respect to environmental com23 pliance, or with respect to substantially all

24 of the operational aspects (as distinguished

25 from financial or administrative aspects) of
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1 the enterprise, other than environmental

2 compliance;

3 ‘‘(C) the term ‘participate in management’

4 does not include engaging in an act of failing

5 to act prior to the time that an extension of

6 credit is made or a security interest is created

7 in property; and

8 ‘‘(D) the term ‘participate in management’

9 does not include—

10 ‘‘(i) holding an extension of credit or

11 a security interest or abandoning or releas12 ing an extension of credit or a security in13 terest;

14 ‘‘(ii) including in the terms of an ex15 tension of credit, or in a contract or secu16 rity agreement relating to such an exten17 sion, convenants, warranties, or other

18 terms and conditions that relate to envi19 ronmental compliance;

20 ‘‘(iii) monitoring or enforcing the

21 terms and conditions of an extension of

22 credit or security interest;

23 ‘‘(iv) monitoring or undertaking one

24 or more inspections of property;
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1 ‘‘(v) requiring or conducting a re2 sponse action or other lawful means of ad3 dressing the release or threatened release

4 of a hazardous substance in connection

5 with property prior to, during, or upon the

6 expiration of the term of an extension of

7 credit;

8 ‘‘(vi) providing financial or other ad9 vice or counseling in an effort to mitigate,

10 prevent, or cure default or dimunition in

11 the value of the property;

12 ‘‘(vii) restructuring, renegotiating, or

13 otherwise agreeing to alter the terms and

14 conditions of an extension of credit or se15 curity interest, or exercising forbearance;

16 or

17 ‘‘(viii) exercising other remedies that

18 may be available under applicable law for

19 the breach of any term or condition of the

20 extension of credit or security agreement;

21 if such actions do not rise to the level of partici22 pating in management, as defined in subpara23 graphs (A) and (B).

24 ‘‘(E) When a lender did not participate in

25 management of property prior to foreclosure,
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1 then the lender shall not be liable even if such

2 person forecloses on property, sells, re-leases, or

3 liquidates property, maintains business activi4 ties, winds up operations, or undertakes any re5 sponse action with respect to property, or takes

6 other measures to preserve, protect, or prepare

7 property prior to sale or disposition, if such

8 person seeks to sell, re-lease, or otherwise divest

9 the property at the earliest practical, commer10 cially reasonable time, on commercially reason11 able terms, taking into account market condi12 tions and legal and regulatory requirements.

13 ‘‘(4) The liability of any lender that is liable

14 under any Federal environmental law shall be lim15 ited to the unpaid balance of any outstanding exten16 sion of credit related to the property or activities

17 forming the basis for the liability.

18 ‘‘(b) FIDUCIARY ENVIRONMENTAL LIABILITY.—

19 ‘‘(1) Notwithstanding any other provision or

20 rule of Federal law, no fiduciary shall be liable pur21 suant to any Federal environmental law, except as

22 provided in this section.

23 ‘‘(2)(A) Subject to subparagraphs (B) and (C),

24 a fiduciary holding title to property or otherwise af25 filiated with property solely in a fiduciary capacity
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1 shall be personally subject to the obligations and li2 abilities of any person under an Federal environ3 mental law, to the same extent as if the property

4 were held by the fiduciary free of trust.

5 ‘‘(B) The personal obligations and liabilities of

6 a fiduciary referred to in subparagraph (A) shall be

7 limited to the extent to which the assets of the trust

8 or estate are sufficient to indemnify the fiduciary,

9 unless—

10 ‘‘(i) the obligations and liabilities would

11 have arisen even if the person had not served

12 as a fiduciary;

13 ‘‘(ii) the fiduciary’s own failure to exercise

14 due care with respect to property caused or

15 contributed to the release of hazardous sub16 stances following establishment of the trust, es17 tate, or fiduciary relationship;

18 ‘‘(iii) the fiduciary had a role in establish19 ing the trust, estate, or fiduciary relationship,

20 and such trust, estate, or fiduciary relationship

21 has no objectively reasonable or substantial pur22 pose apart from the avoidance or limitation of

23 liability under an environmental law.
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1 ‘‘(C) a fiduciary shall not be personally liable

2 for undertaking or directing another to undertake a

3 response action.

4 ‘‘(3) Nothing in this section shall be construed

5 to effect the liability, if any, of a person who—

6 ‘‘(A)(i) acts in a capacity other than a fi7 duciary capacity; and

8 ‘‘(ii) directly or indirectly benefits from a

9 trust or fiduciary relationship; or

10 ‘‘(B)(i) is a beneficiary and a fiduciary

11 with respect to the same fiduciary estate; and

12 ‘‘(ii) as a fiduciary, receives benefits that

13 exceed customary or reasonable compensation,

14 and incidental benefits, permitted under other

15 applicable laws.

16 ‘‘(c) DEFINITIONS.—For purposes of subsections (a)

17 and (b)—

18 ‘‘(1) The term ‘Federal environmental law’

19 means any Federal statue or rule of common law

20 with the purpose of protection of the environment

21 and any Federal regulation promulgated thereunder

22 and any State statute or regulation created as a

23 Federal approved or delegated program implement24 ing these laws, including but not limited to 7 U.S.C.

25 136–136y, 15 U.S.C. 2601–2692, 15 U.S.C. 2641–
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1 2654, 33 U.S.C. 1251–1387, 33 U.S.C. 2701–2761,

2 42 U.S.C. 7401–7642, 42 U.S.C. 6901–6991i, 42

3 U.S.C. 9601–9675, and 42 U.S.C. 13101–13109.

4 ‘‘(2) The term ‘extension of credit’ means the

5 making or renewal of any loan, a granting of a line

6 of credit or extending credit in any manner, such as

7 an advance by means of an overdraft or the issuance

8 of a standby letter of credit, and a lease finance

9 transaction—

10 ‘‘(A) in which the lessor does not initially

11 select the leased property and does not, during

12 the lease term, control the daily operation or

13 maintenance of the property; or

14 ‘‘(B) that conforms with regulations issued

15 by the appropriate Federal banking agency or

16 the appropriate state bank supervisor (as these

17 terms are defined in section 3 of the Federal

18 Deposit Insurance Act or with regulations is19 sued by the National Credit Union Administra20 tion Board, as appropriate.

21 ‘‘(3) The term ‘fiduciary’ means a person who

22 acts for the exclusive benefit of another person as a

23 bona fide fiduciary within the meaning of section

24 3(31) of the Employee Retirement Income Security

25 Act of 1974, trustee, executor, administrator, custo-
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1 dian, guardian, conservator, receiver, committee of

2 estates of lunatics or other disabled persons, or per3 sonal representative; except, that the term ‘fiduciary’

4 does not include any person—

5 ‘‘(A) who owns, or controls, is affiliated

6 with or takes any action with respect to prop7 erty on behalf of or for the benefit of a lender

8 or takes any action to protect a lender’s exten9 sion of credit or security interest (any such per10 son shall be treated as a lender under sub11 section (a) of this section); or

12 ‘‘(B) who is acting as a fiduciary with re13 spect to a trust or other fiduciary estate that—

14 ‘‘(i) was not created as part of, or to

15 facilitate, one or more estate plans or pur16 suant to the incapacity of a natural per17 son; and

18 ‘‘(ii) was organized for the primary

19 purpose of, or is engaged in, actively carry20 ing on a trade or business for profit.

21 ‘‘(4) The term ‘financial or administrative as22 pect’ means a function such as a credit manager, ac23 counts payable officer, accounts receivable officer,

24 personnel manager, comptroller, or chief financial of25 ficer, or any similar function.
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1 ‘‘(5) The term ‘foreclosure’ and ‘foreclose’

2 means, respectively, acquiring, and to acquire, prop3 erty through—

4 ‘‘(A) purchase at sale under a judgment or

5 decree, a power of sale, a nonjudicial fore6 closure sale, or from a trustee, deed in lieu of

7 foreclosure, or similar conveyance, or through

8 repossession, if such property was security for

9 an extension of credit previously contracted;

10 ‘‘(B) conveyance pursuant to an extension

11 of credit previously contracted, including, but

12 not limited to, the termination of a lease agree13 ment; or

14 ‘‘(C) any other formal or informal manner

15 by which the person acquires, for subsequent

16 disposition, possession of collateral in order to

17 protect the security interest of the person.

18 ‘‘(6) The term ‘hazardous substance’ means any

19 chemical, biological, organic, inorganic, or radio20 active pollutants, contaminants, materials, waste or

21 other substances regulated under, defined, listed or

22 included in any Federal environmental law.

23 ‘‘(7) The term ‘lender’ means—

24 ‘‘(A) a person that makes a bona fide ex25 tension of credit to or takes a security interest
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1 from another person and includes a successor

2 or assign of the person which makes the exten3 sion of credit or takes the security interest;

4 ‘‘(B) the Federal National Mortgage Asso5 ciation, the Federal Home Loan Mortgage Cor6 poration, the Federal Agricultural Mortgage

7 Corporation, or other entity that in a bona fide

8 manner is engaged in the business of buying or

9 selling loans on interests therein;

10 ‘‘(C) any person engaged in the business of

11 insuring or guaranteeing against default in the

12 repayment of an extension of credit, or acting

13 as a surety with respect to an extension of cred14 it, to other persons; or

15 ‘‘(D) any person regularly engaged in the

16 business of providing title insurance who ac17 quires property as a result of assignment or

18 conveyance in the course of underwriting claims

19 and claims settlement.

20 ‘‘(8) The term ‘operational aspect’ means a

21 function such as a facility or plant manager, oper22 ations manager, chief operating officer, or chief ex23 ecutive officer.

24 ‘‘(9) The term ‘person’ means an individual,

25 firm, corporation, association, partnership, consor-
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1 tium, joint venture, commercial entity, United States

2 Government, State, municipality, commission, politi3 cal subdivision of a State, or any interstate body.

4 ‘‘(10) The term ‘property’ means real, personal

5 and mixed property.

6 ‘‘(11) The term ‘response action’ shall have the

7 same meaning as that term is defined in section 101

8 of the Comprehensive Environmental Response,

9 Compensation and Liability Act.

10 ‘‘(12) The term ‘security interest’ means a

11 right under a mortgage, deed of trust, assignment,

12 judgment lien, pledge, security agreement, factoring

13 agreement, or lease, or any other right accruing to

14 a person to secure the repayment of money, the per15 formance of a duty, or some other obligation.

16 ‘‘(d) SAVINGS CLAUSE.—Nothing in subsection (a),

17 (b), or (c), shall—

18 ‘‘(1) affect the rights or immunities or other de19 fense that are already available to lenders or fidu20 ciaries under any Federal environmental law;

21 ‘‘(2) be construed to create any liability for any

22 lender or fiduciary; or

23 ‘‘(3) create a private right of action against any

24 lender or fiduciary.
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1 ‘‘(e) FEDERAL BANKING AND LENDING AGENCY EN2 VIRONMENTAL LIABILITY.—

3 ‘‘(1) GOVERNMENTAL ENTITIES.—

4 ‘‘(A) BANKING AND LENDING AGENCIES.—

5 Except as provided in paragraph (C), a Federal

6 banking or lending agency shall not be liable

7 under any law imposing strict liability for the

8 release or threatened release of petroleum or a

9 hazardous substance at or from property (in10 cluding any right or interest therein) ac11 quired—

12 ‘‘(i) in connection with the exercise of

13 receivership or conservatorship authority,

14 or the liquidation or winding up of the af15 fairs of an insured depository institution,

16 including any of its subsidiaries, and

17 bridge bank;

18 ‘‘(ii) in connection with the provision

19 of loans, discounts, advances, guarantees,

20 insurance or other financial assistance; or

21 ‘‘(iii) in connection with property re22 ceived in any civil or criminal proceeding,

23 or administrative enforcement action,

24 whether by settlement or order.
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1 ‘‘(B) APPLICATION OF STATE LAW.—Noth2 ing in paragraph (e) shall be construed as pre3 empting, affecting, applying to, or modifying

4 any state law, or any rights, actions, cause of

5 action, or obligations under State law, except

6 that liability under State law shall not exceed

7 the value of the agency’s interest in the asset

8 giving rise to such liability. Nothing in this sec9 tion shall be construed to prevent a Federal

10 banking or lending agency from agreeing with

11 a State to transfer property to such State in

12 lieu of any liability that might otherwise be im13 posed under State law.

14 ‘‘(C) LIMITATION.—Notwithstanding para15 graph (A), and subject to section 107(d) of the

16 Comprehensive Environmental Response, Com17 pensation, and Liability Act of 1980, a Federal

18 banking or lending agency that directly caused

19 or and materially contributed to the release of

20 petroleum or a hazardous substance may be lia21 ble for removal, remedial, or other response ac22 tion pertaining to that release.

23 ‘‘(D) SUBSEQUENT PURCHASER.—The im24 munity provided by paragraphs (A) and (B)

25 shall extend to the first subsequent purchaser
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1 of property described in such paragraph from a

2 Federal banking or lending agency, unless such

3 purchaser—

4 ‘‘(i) would otherwise be liable or po5 tentially liable for all or part of the costs

6 of the removal, remedial, or other response

7 action due to a prior relationship with the

8 property;

9 ‘‘(ii) is or was affiliated with or relat10 ed to a party described in subparagraph

11 (i);

12 ‘‘(iii) fails to agree to take reasonable

13 steps necessary to abate the release or

14 threatened release or to protect public

15 health and safety in a manner consistent

16 with the purposes of applicable Federal en17 vironmental laws; or

18 ‘‘(iv) directly causes or significantly

19 and materially contributes to any addi20 tional release or threatened release on the

21 property.

22 ‘‘(E) FEDERAL OR STATE ACTION.—Not23 withstanding subparagraph (D), if a Federal

24 agency or State environmental agency is re25 quired to take remedial action due to the failure
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1 of a subsequent purchaser to carry out, in good

2 faith, the agreement described in subparagraph

3 (D)(iii), such subsequent purchaser shall reim4 burse the Federal or State environmental agen5 cy for the costs of such remedial action. Any

6 such reimbursement shall not exceed the in7 crease in the fair market value of the property

8 attributable to the remedial action.

9 ‘‘(2) LIEN EXEMPTION.—Notwithstanding any

10 other provision of law, any property held by a subse11 quent purchaser referred to in subsection (a)(4) or

12 held by a Federal banking or lending agency shall

13 not be subject to any lien for costs or damages asso14 ciated with the release or threatened release of pe15 troleum or a hazardous substance existing at the

16 time of the transfer.

17 ‘‘(3) EXEMPTION FROM COVENANTS TO REME18 DIATE.—A Federal banking or lending agency shall

19 be exempt from any law requiring such agency to

20 grant covenants warranting that a removal, reme21 dial, or other response action has been, or will in the

22 future be, taken with respect to property acquired in

23 the manner described in paragraph (e)(1)(A).

24 ‘‘(4) DEFINTIONS.—For purposes of subsection

25 (e), the following definitions shall apply—
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1 ‘‘(A) The term ‘Federal banking or lending

2 agency’ means the Corporation, the Resolution

3 Trust Corporation, the Board of Governors of

4 the Federal Reserve System, the Comptroller of

5 the Currency, the Office of Thrift Supervision,

6 a Federal Reserve Bank, a Federal Home Loan

7 Bank, the Department of Housing and Urban

8 Development, the National Credit Union Ad9 ministration Board, the Farm Credit Adminis10 tration, the Farm Credit System Insurance

11 Corporation, the Farm Credit System Assist12 ance Board, the Farmers Home Administration,

13 the Rural Electrification Administration, the

14 Small Business Administration, and any other

15 Federal agency acting in a similar capacity, in

16 any of their capacities, and their agents or ap17 pointees.

18 ‘‘(B) The term ‘hazardous substance’ has

19 the same meaning as in section 101(14) of the

20 Comprehensive Environmental Response, Com21 pensation, and Liability Act of 1980.

22 ‘‘(C) The term ‘release’ has the same

23 meaning as in section 101(22) of the Com24 prehensive Environmental Response, Compensa25 tion, and Liability Act of 1980, and includes
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1 the use, storage, disposal, treatment, genera2 tion, or transportation of a hazardous sub3 stance.

4 ‘‘(5) SAVINGS CLAUSE.—Nothing in subsection

5 (e) shall—

6 ‘‘(A) affect the rights of immunities or

7 other defenses that are available under this Act

8 or other applicable law to any party, subject to

9 the provisions of this section;

10 ‘‘(B) be construed to create any liability

11 for any party; or

12 ‘‘(C) create a private right of action

13 against an insured depository institution or

14 lender or against a Federal banking or lending

15 agency.’’.

16 (b) EFFECTIVE DATE.—This section shall take effect

17 upon the date of enactment and shall apply to any claim

18 against any lender, fiduciary or government agency under

19 any Federal environmental law that has not been finally

20 resolved by adjudication or settlement prior to enactment.

Æ