99–006

107TH CONGRESS REPT. 107–516 " ! HOUSE OF REPRESENTATIVES 2d Session Part 2

FINANCIAL SERVICES REGULATORY RELIEF ACT OF 2002

JULY 22, 2002.—Committed to the Committee of the Whole House on the State of

the Union and ordered to be printed

Mr. SENSENBRENNER, from the Committee on the Judiciary,

submitted the following

R E P O R T

together with

ADDITIONAL VIEWS

[To accompany H.R. 3951]

[Including cost estimate of the Congressional Budget Office]

The Committee on the Judiciary, to whom was referred the bill

(H.R. 3951) to provide regulatory relief and improve productivity

for insured depository institutions, and for other purposes, having

considered the same, reports favorably thereon with amendments

and recommends that the bill as amended do pass.

CONTENTS

Page

The Amendment ...................................................................................................... 2

Purpose and Summary ............................................................................................ 2

Background and Need for the Legislation

A. Background ..................................................................................................... 2

B. Amendments ................................................................................................... 3

Hearings ................................................................................................................... 4

Committee Consideration ........................................................................................ 4

Vote of the Committee ............................................................................................. 4

Committee Oversight Findings ............................................................................... 4

Performance Goals and Objectives ......................................................................... 4

New Budget Authority and Tax Expenditures ...................................................... 5

Congressional Budget Office Cost Estimate .......................................................... 5

Constitutional Authority Statement ...................................................................... 15

Section-by-Section Analysis and Discussion .......................................................... 15

Changes in Existing Law Made by the Bill, as Reported ..................................... 17

Markup Transcript .................................................................................................. 18

Additional Views ...................................................................................................... 115

2

The amendments (made to the committee print document containing the text of the amendment as reported by the Committee 

on Financial Services) are as follows:

After section 311, insert the following (and make such technical and conforming changes as may be appropriate):

SEC. 312. EXEMPTION FROM PREMERGER NOTIFICATION REQUIREMENT OF THE CLAYTON ACT. 

Section 7A(c)(7) of the Clayton Act (15 U.S.C. 

18a(c)(7)) is amended by inserting ‘‘205(b)(3) of the Federal 

Credit Union Act (12 U.S.C. 1785(b)(3),’’ before ‘‘or section 

3’’.

Strike section 607 (and make such technical and conforming 

changes as may be appropriate).

PURPOSE AND SUMMARY

H.R. 3951, as reported by the Committee on the Judiciary, is intended to alter or eliminate statutory banking provisions in order 

to lessen the regulatory compliance burden on insured depository 

institutions and improve their productivity, as well as to make 

needed technical corrections to current statutes without compromising existing protections against anti-competitive behavior. 

BACKGROUND AND NEED FOR THE LEGISLATION

A. BACKGROUND

On June 18, 2002, the Committee on Financial Services reported 

H.R. 3951, the ‘‘Financial Services Regulatory Relief Act of 2002’’ (See H. Rept. 107–516). The bill was sequentially referred to the 

Committee on the Judiciary for a period not later than July 22, 

2002. The sections within the jurisdiction of the Committee on the 

Judiciary deal with the Federal courts, claims against the United 

States, and for regulation of the banking industry as it pertains to 

antitrust considerations. 

H.R. 3951 provides the following regulatory improvements for national banks: (1) removes the prohibition on national and State 

banks expanding across State lines by opening branches; (2) allows 

the use of subordinated debt instruments to meet eligibility requirements for national banks to benefit from subchapter S tax 

treatment; (3) eliminates duplicative and costly reporting requirements on banks regarding lending to bank officials; (4) changes the 

exemption from the prohibition on management interlocks for 

banks in metropolitan statistical areas from $20 million in assets 

to $100 million; and (5) streamlines bank merger application regulatory requirements. 

H.R. 3951 provides the following regulatory improvements for 

savings associations: (1) gives savings associations parity with 

banks with respect to broker-dealer and investment adviser Securities and Exchange Commission (SEC) registration requirements; 

(2) removes auto lending and small business lending limits and expands business lending limit for Federal thrifts; (3) allows Federal 

thrifts to merge with one or more of their non-thrift subsidiaries 

or affiliates, the same as national banks; (4) permits Federal thrifts 

to invest in service companies without regard to geographic restricVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2
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tions; and (5) gives Federal thrifts the same authority as national 

and State banks to make investments primarily designed to promote community development. 

H.R. 3951 provides the following regulatory improvements for 

credit unions: (1) allows privately insured credit unions to apply for 

membership to the Federal Home Loan Bank system; (2) expands 

the investment authority of Federal credit unions; (3) permits offering of check cashing and money transfer services to eligible members; (4) increases the limit on investment by Federal credit unions 

in credit union service organizations from 1 percent to 3 percent of 

shares and earnings; and (5) raises the general limit on the term 

of Federal credit union loans from 12 to 15 years. 

H.R. 3951 provides the following regulatory improvements for 

Federal financial regulatory agencies: (1) provides agencies the discretion to adjust the examination cycle for insured depository institutions to use agency resources in the most efficient manner; (2) allows the agencies to share confidential supervisory information concerning an examined institution; (3) modernizes agency record 

keeping requirements to allow use of optically imaged or computer 

scanned images; (4) clarifies that agencies may suspend or prohibit 

individuals charged with certain crimes from participation in the 

affairs of any depository institution and not only the institution 

with which the individual is associated; and (5) allows bank examiners to receive credit cards from examined depository institutions 

if issued under the same terms and conditions as generally offered 

to the public. 

These improvements will allow financial institutions to devote 

more resources to the business of lending to consumers and less to 

compliance with outdated and unneeded regulations. Reducing regulatory burden should lower credit costs for consumers and boost 

the national economy. 

B. AMENDMENTS

An amendment offered by Mr. Bachus, which creates a new section 312 of H.R. 3951, amends the Clayton Act to exempt credit 

unions from a premerger notification requirement, and was adopted by voice vote. 

Under provisions of the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976 (15 U.S.C. 18a), certain acquired and acquiring persons—including federally insured credit unions—must 

file a notification and report form with the Federal Trade Commission (FTC) to provide advance notification of mergers and acquisitions when the value of the transaction exceeds $50 million. The 

information submitted is reviewed by the FTC to determine if the 

proposed transaction may be anticompetitive and to justify, if appropriate, taking enforcement action to prevent the consummation 

of transactions that violate Section 7 of the Clayton Act. Only after 

observing the waiting period under the HSR Act may the companies complete the proposed transaction. 

A tiered fee structure requires that companies pay a $45,000 filing fee for transactions valued at less than $100 million, $125,000 

for transactions valued at $100 million to less than $500 million, 

and $280,000 for transactions valued at $500 million or more. 

(Transactions valued at less than $50 million are exempt from the 

requirement of filing the pre-merger notification forms). 

4

Exempting federally insured credit unions from the pre-merger 

notification requirements of the HSR Act would in no way relieve 

credit unions from the prohibitions found in Section 1 of the Sherman Act which outlaws every contract, combination or conspiracy, 

in restraint of trade or those found in Section 2 of the Sherman Act 

which make it unlawful for a company to monopolize, or attempt 

to monopolize trade or commerce. Nor would such an exemption 

shield credit unions from Section 7 of the Clayton Act, which prohibits mergers and acquisitions in which the effect may be to substantially lessen competition or tend to create a monopoly. 

In addition, if the attorney general of any State believed that the 

merger of two credit unions resulted in injury to persons residing 

in his/her State by virtue of alleged violations of either the Sherman or the Clayton Act, nothing would impede the ability of the 

attorney general to bring a civil action in the name of the State on 

behalf of those individuals living in that State. This action could 

be brought in any U.S. District Court having jurisdiction over the 

defendant. 

An amendment offered by Ms. Jackson Lee to eliminate section 

607 of H.R. 3951 was adopted by voice vote. Section 607 would 

have amended the Bank Holding Company Act of 1956, 12 U.S.C. 

§ 1849(b), by eliminating an existing minimum 15 day waiting period for bank and bank holding companies to merge with or acquire 

another bank or bank holding company. Currently, the Bank Holding Act provides a 30 day waiting period, which may be reduced 

to 15 days upon a concurrence of the Attorney General and the relevant banking agency. 

HEARINGS

No hearings were held on H.R. 3951. 

COMMITTEE CONSIDERATION

On Wednesday, July 17, 2002, the Committee met in open session and ordered favorably reported the bill H.R. 3951, with 

amendment, by voice vote, a quorum being present. 

VOTE OF THE COMMITTEE

There were no recorded votes taken on H.R. 3951. 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

PERFORMANCE GOALS AND OBJECTIVES

H.R. 3951 does not authorize funding. Therefore, clause 3(c) of 

rule XIII of the Rules of the House of Representatives is inapplicable. 

5

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of House rule XIII is inapplicable because this legislation does not provide new budgetary authority or increased tax 

expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 3951, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, July 19, 2002. 

Hon. F. JAMES SENSENBRENNER, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3951, the Financial Services Regulatory Relief Act of 2002. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Kathleen Gramp, who 

can be reached at 226–2860. 

Sincerely, 

DAN L. CRIPPEN, Director.

Enclosure

cc: Honorable John Conyers, Jr. 

Ranking Member 

H.R. 3951—Financial Services Regulatory Relief Act of 2002. 

SUMMARY

H.R. 3951 would affect the operations of financial institutions 

and the agencies that regulate them. Some provisions would address specific sectors: national banks could more easily operate as 

S corporations; thrift institutions would be given some of the same 

investment, lending, and ownership options available to banks; 

credit unions would have new options for investments, lending, 

mergers, and leasing Federal property; and certain privately insured credit unions could become members of the Federal Home 

Loan Bank system. The bill would modify regulatory procedures 

governing certain financial transactions, such as de novo branches 

and interstate mergers, and give agencies more flexibility in sharing data, retaining records, and scheduling exams. It also would 

limit the legal defenses that the United States could use against 

certain claims for monetary damages. Finally, H.R. 3951 would require insured depository institutions and credit unions to notify a 

consumer if information that may be construed as being adverse is 

being given to a credit reporting agency. 

CBO estimates that enacting this bill would reduce Federal reve- nues by $23 million over the next 5 years and by a total of $72 million over the 2003–2012 period. In addition, we estimate that direct spending would increase by $17 million over the next 5 years and 

6

by a total of $22 million over the 2003–2012 period. Because H.R. 

3951 would affect direct spending and receipts, pay-as-you-go procedures would apply. 

H.R. 3951 contains intergovernmental mandates as defined in 

the Unfunded Mandates Reform Act (UMRA), but CBO estimates 

that the cost of complying with those requirements would not exceed the threshold for intergovernmental mandates established in 

UMRA ($58 million in 2002, adjusted annually for inflation). 

H.R. 3951 contains several private-sector mandates as defined by 

UMRA. Those mandates would affect insured depository institutions and credit unions, uninsured banks, nondepository institutions that control depository institutions, certain parties affiliated 

with those depository institutions, and people charged with or convicted of crimes of dishonesty. At the same time, the bill would 

relax some restrictions on the operations of certain financial institutions. CBO estimates that the aggregate direct cost of privatesector mandates in the bill would exceed the annual threshold established in UMRA ($115 million in 2002, adjusted annually for inflation). 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of H.R. 3951 is shown in the following table. The costs of this legislation fall within budget function 370 (commerce and housing credit).

BASIS OF ESTIMATE

Most of the budgetary impacts of this legislation would result 

from three provisions: section 101, which would make it easier for 

national banks to convert to S corporation status; section 214, 

which would limit the Government’s legal defenses against certain 

claims for monetary damages, and section 302, which would allow 

certain Federal credit unions to lease Federal land at no charge. 

For this estimate, CBO assumes that H.R. 3951 will be enacted in 

the fall of 2002. 

HR. 3951 also would affect the workload at agencies that regulate financial institutions, but we estimate that the net change in 

agency spending would not be significant. Based on information 

from each of the agencies, CBO estimates that the change in adVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

3951CBOA.eps
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ministrative expenses—both costs and potential savings—would average less than $500,000 a year over the next several years. Expenditures of the Office of the Comptroller of the Currency (OCC), 

the Office of Thrift Supervision (OTS), the National Credit Union 

Administration (NCUA), and the Federal Deposit Insurance Corporation (FDIC) are classified as direct spending and would be covered by fees or insurance premiums paid by the institutions they 

regulate. Any change in spending by the Federal Reserve would affect net revenues, while adjustments in the budget of the Securities 

and Exchange Commission would be subject to appropriation. 

Revenues 

CBO estimates that enacting H.R. 3951 would reduce Federal tax 

revenues collected from national and State-chartered banks and 

would have an insignificant effect on civil and criminal penalties 

collected for violations of the bill’s provisions. 

S CORPORATION STATUS. Under this bill, some national banks 

would find it easier to convert from C corporation status to S corporation status. section 101 would allow directors of national banks 

to be issued subordinated debt to satisfy the requirement that directors of a bank own qualifying shares in the bank. This provision 

would effectively reduce the number of shareholders of a bank by 

removing directors from shareholder status, making it easier for 

banks to comply with the 75-shareholder limit that defines eligibility for subchapter S election. 

Income earned by banks taxed as C corporations is subject to the 

corporate income tax, and post-tax income distributed to shareholders is taxed again at individual income tax rates. Income 

earned by banks operating as S corporations is taxed only at the 

personal income tax rates of the banks’ shareholders and is not 

subject to the corporate income tax. The average effective tax rate 

on S-corporation income is lower than the average effective tax rate 

on C-corporation income. CBO estimates that enacting this provision would reduce revenues by a total of $23 million over the 2003–

2007 period and by $72 million over the 2002–2012 period. 

Based on information from the Federal Reserve Board, the OCC, 

and private trade associations, CBO expects that most of the banks 

that would be affected are small, although banks and bank holding 

companies with assets over $500 million would also be affected. In 

addition, States are likely to amend the rules for State-chartered 

banks to match those for national banks. CBO expects that most 

conversions to Subchapter S status would occur between 2003 and 

2006 and that national banks would convert earlier than Statechartered banks. 

CIVIL AND CRIMINAL PENALTIES. H.R. 3951 would make all depository institutions—not just insured institutions—subject to certain 

civil and criminal fines for violating rules regarding breach of trust, 

dishonesty, and certain other crimes. CBO estimates that any additional penalty collections under those provisions would not be significant. 

Direct Spending 

CBO estimates that enacting H.R. 3951 would increase direct 

spending by a total of about $15 million over the 2003–2012 period 

to pay for increased litigation costs and larger payments for ‘‘goodVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2
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will’’ claims against the Government. The bill also would reduce 

offsetting receipts from credit unions that lease Federal facilities, 

and it could affect the cost of deposit insurance. 

MONETARY DAMAGES IN GOODWILL CASES. Section 214 would preclude the use of certain legal defenses in claims for damages 

against the United States arising out of the implementation of the 

Financial Institutions Reform, Recovery, and Enforcement Act of 

1989 (FIRREA). CBO estimates that enacting this provision would 

increase the cost of litigating and resolving such claims by a total 

of $15 million over the next 5 years. 

Background on Goodwill Cases. Under section 214, courts could 

not dismiss a claim arising out of the implementation of FIRREA 

on the basis of res judicata, collateral estoppel, or similar defenses 

if the defense was based on a decision, opinion, or order of judgment entered by any court prior to July 1, 1996. On that date, the 

Supreme Court decided United States v. Winstar Corp., 518 U.S. 

839 (1996), holding that the Government became liable for damages in breach of contract when the accounting treatment of ‘‘supervisory goodwill’’ that it had previously approved was prevented 

by enactment of FIRREA. About 100 ‘‘goodwill’’ cases against the 

Government are still pending before the courts, with claims totaling about $20 billion. CBO estimates that, under current law, such 

claims will cost the Government about $2 billion over the 2003– 2012 period. Judgments, settlements, and litigation expenses for 

such claims are paid from the FSLIC Resolution Fund, and such 

payments do not require appropriation action. 

By eliminating some defenses currently available to the United 

States in such cases, section 214 would increase the likelihood that 

some claims would reach a hearing on the merits, thereby allowing 

cases to proceed further in the judicial process than may otherwise 

be likely. According to the Department of Justice (DOJ) and the 

FDIC, this provision would affect only a few of the goodwill cases; 

claims in the affected cases could total about $200 million. (This 

provision also could affect cases in which the FDIC is the plaintiff 

as the receiver of a failed thrift, but any monetary awards to the 

FDIC would be intragovernmental payments and would have no 

net effect on the Federal budget.) 

Estimated Cost of This Provision. CBO expects that enacting section 214 would increase the cost of litigation and potential settlements or judgments against the United States. Whether those costs 

are large or small would depend on the role those defenses would 

otherwise play in the outcome of each case. For example, the cost 

could be significant if the loss of those defenses resulted in a judgment for plaintiffs on the merits, but could be negligible if the judgment were against the plaintiffs. 

For this estimate, CBO assumes that defenses of res judicata and 

collateral estoppel would be just two of several possible defenses 

and other factors affecting awards of monetary damages and that 

barring them would therefore have a small effect on the potential 

costs of such claims. We estimate that enacting this provision 

would increase expected payments for such claims by about $10 

million—or 5 percent of the $200 million in claims that may be affected by this provision. Given the pace of such litigation, we expect 

that those added costs would occur in 2006 and 2007. In addition, 

CBO estimates that DOJ’s administrative costs would increase by 

9

an average of about $1 million a year as a result of the added time 

and workload associated with those cases. This estimate is based 

on historical trends in the cost of litigating such claims. 

Nongoodwill Cases. Because section 214 would not limit the affected claims to goodwill cases, this provision also could affect other 

types of claims for monetary damages arising out of the implementation of FIRREA that meet the criteria in the bill. This provision 

could encourage the filing of such claims that were resolved prior 

to July 1, 1996; however, DOJ is currently unaware of any such 

claims. 

OFFSETTING RECEIPTS FROM FEDERAL LEASES. Section 302 would 

allow Federal agencies to lease land to Federal credit unions without charge under certain conditions. Under existing law, agencies 

may allocate space in Federal buildings without charge if at least 

95 percent of the credit union’s members are or were Federal employees. Some credit unions, primarily those serving military bases, 

have leased Federal land to build a facility. Prior to 1991, leases 

awarded by the Department of Defense (DoD) were free of charge 

and for terms of up to 25 years; a statutory change enacted that 

year limited the term of such leases to 5 years and required the 

lessee to pay a fair market value for the property. According to 

DoD, about 35 credit unions have leased land since 1991 and are 

paying a total of about $525,000 a year to lease Federal property. 

Those proceeds are recorded as offsetting receipts, and any spending of those payments is subject to appropriation. 

CBO expects that enacting this provision would result in a loss 

of offsetting receipts from all credit union leases. Those lessees currently paying a fee would stop making those payments after they 

renew their current leases, all of which should expire within the 

next 5 years. In addition, credit unions that have long-term, no-cost 

leases would be able to renew them without becoming subject to 

the fees they otherwise would pay under current law. CBO estimates that enacting this provision would cost a total of about $2 

million over the next 5 years and would cost an average about 

$700,000 annually after 2007. 

DEPOSIT INSURANCE. Several provisions in the bill could affect 

the cost of Federal deposit insurance. For example, the bill would 

streamline the approval process for mergers, branching, and affiliations, which could give eligible institutions the opportunity to diversify and compete more effectively with other financial businesses. In some cases, such efficiencies could reduce the risk of insolvency. It is also possible, however, that some of the new lending 

and investment options could increase the risk of losses to the deposit insurance funds. 

CBO has no clear basis for predicting the direction or the amount 

of any change in spending for insurance that could result from the 

new investment, lending, and operational arrangements authorized 

by this bill. The net budgetary impact of such changes would be 

negligible over time, however, because any increase or decrease in 

costs would be offset by adjustments in income from insurance premiums from banks, thrifts, or credit unions. 

Spending Subject to Appropriation 

Section 312 would exempt federally insured credit unions from 

filing certain acquisition or merger notices with the Federal Trade 

10

Commission (FTC). Under current law, the FTC charges filing fees 

ranging from $45,000 to $280,000, depending on the value of the 

transaction. The collection of such fees is contingent on appropriation action. Based on information from the FTC, CBO estimates 

that this exemption would have no significant effect on the 

amounts collected from such fees. 

PAY-AS-YOU-GO CONSIDERATIONS

The Balanced Budget and Emergency Deficit Control Act sets up 

pay-as-you-go procedures for legislation affecting direct spending or 

receipts. The net changes in outlays and governmental receipts 

that are subject to pay-as-you-go procedures are shown in the following table. For the purposes of enforcing pay-as-you-go procedures, only the effects through fiscal year 2006 are counted.

ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

H.R. 3951 would preempt certain State laws and place new requirements on certain State agencies that regulate financial institutions. Both the preemptions and the new requirements would be 

mandates as defined in UMRA. 

Section 209 would preempt certain State securities laws by prohibiting States from requiring agents representing a Federal savings association to register as brokers or dealers if they sell deposit 

products (CDs) issued by the savings association. Specifically, this 

provision would affect States that register exclusive agents of certain insurance companies who offer or sell CDs issued by the thrift 

they are affiliated with. Such a preemption would impose costs (in 

the form of lost revenues) on those States that currently require 

such registration. Information from representatives of the securities industry and securities regulators indicates that 16 States 

could be affected by this provision, but that only a small number 

of agents would fall under the preemption. CBO estimates that 

losses to States as a result of this prohibition would total less than 

$1 million a year. 

Section 301 would authorize certain privately insured credit 

unions to apply for membership in a Federal home loan bank. Part 

of the application process would require the relevant State regulators of credit unions to determine whether an applicant is eligible 

for Federal deposit insurance. This requirement would be a mandate, but because the regulators already make that determination 

under State law, the additional cost to comply with the requirement would be minimal. 

Upon becoming a member of a Federal home loan bank, such a 

credit union would be eligible for loans from that bank. To preserve 

the value of these loans, section 301 would preempt certain State 

contract laws that otherwise would allow defaulting credit unions 

to avoid certain contractual obligations. Because those credit 


3951CBOB.eps
11

unions are not currently eligible for membership in a Federal home 

loan bank, and accordingly, have no contracts for credit, this preemption, while a mandate, would impose no costs on State, local, 

or tribal governments. 

Section 302 would require State regulators of credit unions to 

provide certain information when requested by the NCUA. Because 

this provision would not require States to prepare any additional 

reports, merely to provide them to NCUA upon request, CBO estimates the cost to States would be minimal. 

Section 401 would expand an existing preemption of State laws 

related to mergers between insured depository institutions chartered in different States. Current law preempts State laws that restrict mergers between insured banks with different home States. 

This section would expand that preemption to cover mergers between insured banks and other insured depository institutions or 

trust companies with different home States. This expansion of a 

preemption would be a mandate under UMRA but would impose 

little or no cost on States. 

Section 401 also would preempt State laws that regulate certain 

fiduciary activities performed by insured banks and other depository institutions. The bill would allow banks and trusts of a State 

(the home State) to locate a branch in another State (the host 

State) as long as the services provided by the branch are not in 

contravention of home State or host State law. Further, if the host 

State allows other types of entities to offer the same services as the 

branch bank or trust seeking to locate in the host State, home 

State approval of the branch would not be in contravention of host 

State law. This provision could preempt laws of the host State but 

would impose no costs on them. 

CBO estimates that the cost of those mandates taken together 

would not exceed the threshold established in UMRA ($58 million 

in 2002, adjusted annually for inflation). 

ESTIMATED IMPACT ON THE PRIVATE SECTOR

H.R. 3951 contains several private-sector mandates as defined by 

UMRA. At the same time, the bill would relax some restrictions on 

the operations of certain financial institutions. CBO estimates that 

the aggregate direct costs of mandates in the bill would well exceed 

the annual threshold established in UMRA ($115 million in 2002, 

adjusted annually for inflation). CBO does not have sufficient data 

to provide an estimate of the total private-sector cost of complying 

with mandates in the bill, but we estimate that start-up costs 

would be at least $250 million and ongoing costs at least $600 million a year. 

Mandates 

The bill would impose mandates on insured depository institutions and credit unions, uninsured banks, nondepository institutions that control depository institutions, certain parties affiliated 

with those depository institutions, and people charged with or convicted of crimes of dishonesty. Mandates in the bill include a new 

consumer notification requirement, an expansion of the authority of 

the Federal Deposit Insurance Corporation over insured depositories controlled by a company that is not a depository institution 

12

holding company, and expanded prohibitions on employment at financial institutions of people convicted of certain crimes. 

CONSUMER NOTIFICATION REQUIREMENT. Section 409 would require insured depository institutions and insured credit unions to 

notify customers when information that is, or may be construed as, 

adverse to the interests of the customer is furnished to a consumer 

reporting agency. 

To comply with this mandate, the affected institutions would 

incur start-up and ongoing costs. Start-up costs would include additional data processing, legal services, personnel training, and the 

design of notification forms. Primary ongoing costs would include 

the costs of producing and mailing notices and any additional personnel needed to answer customers’ questions about the new notifications and to handle customer disputes. 

Start-up Costs. Institutions that report information to consumer 

credit reporting agencies would have to keep track of the information furnished to such agencies and report it to the customer at the 

same time it is reported to the agency. The costs of required data 

processing changes could include the purchase and installation of 

software and equipment, programming and testing, and charges by 

third-party processors. Based on data from a Federal Reserve study 

of the cost of implementing the Truth in Savings Act, CBO estimates that the cost to set up data-processing systems could average 

about $15,000 per institution. About 16,500 insured depository institutions and credit unions furnish customer data to consumer reporting agencies. Thus, CBO estimates that the cost of data-processing systems would amount to at least $250 million. To the extent that the data processing changes necessary to comply with 

this mandate would likely be more complicated than what was necessary to comply with the Truth in Savings Act, the compliance 

costs would be larger. 

Institutions also would likely incur legal costs, training costs, 

and the costs of designing and producing notification forms. CBO 

does not have adequate information to estimate those costs of complying with this mandate. 

Ongoing Costs. According to industry sources, consumer reporting agencies receive about 2 billion updates per month on consumer 

accounts from all types of financial service firms. About 200 million 

to 300 million of those notices are obviously adverse reports, such 

as a report of late payments. Assuming that about half of those adverse notices are furnished by insured depository institutions, they 

would be responsible for at least 100 million to 

150 million notices per month. Many additional types of reports, 

however, may be construed as an adverse report under the bill. For 

example, opening a new credit card account may be construed as 

adverse by a lender reviewing a credit report if an individual already has several lines of credit. 

The ongoing cost of compliance would depend on whether the notices would have to be sent out separately to qualify as notifying 

the customer ‘‘at the same time’’ as the information is furnished to 

the consumer reporting agencies. Because the notices would have 

to be personalized (as opposed to a blanket policy disclosure that 

is the same for all customers), they would have to be mailed at a 

first-class rate. Depending upon the presorting done by the depository institution, first-class postage could range from 28 cents to 37 

13

cents a piece. In addition to postage, mailing costs would include 

the cost of paper, envelopes, printing, and labor. According to industry sources, outside letter shops might charge between 50 cents 

and $1 a piece to mail such notices, including postage. (If insured 

depository institutions are allowed to include notices in monthly 

statements that they already send, the incremental cost of mailing 

could be much lower.) If separate notices are required, and if 100 

million notices would be mailed per month at a cost of 50 cents 

each, the ongoing costs of producing and mailing such notices 

would be $600 million per year. But CBO expects the printing and 

mailing costs would probably be higher than this amount. In addition to those costs, institutions would incur ongoing expenses for 

any additional personnel who would be needed to respond to customers’ inquiries, correct errors, and resolve disputes. 

Because reporting to consumer credit reporting agencies is voluntary, it is possible that insured depository institutions might 

mitigate their cost of compliance by decreasing the frequency with 

which they report customer data to such agencies, or by reducing 

the information they report, or stop such reporting altogether. 

However, depository institutions would have to weigh the costs and 

benefits of reducing their reporting to consumer credit reporting 

agencies. For example, depository institutions themselves benefit 

from having more comprehensive information about a potential 

borrower’s credit history when making decisions about extending 

credit to that individual. 

EXPANSION OF THE FDIC’S AUTHORITIES. The Gramm-Leach-Bliley Act allowed new forms of affiliations among depositories and 

other financial services firms. Consequently, insured depository institutions may now be controlled by a company other than a depository institution holding company (DIHC). H.R. 3951 would amend 

current law so that certain regulatory authorities of the FDIC 

would apply to all commonly controlled depository institutions, regardless of the form of their holding company. 

Under current law, if the FDIC suffers a loss from liquidating or 

selling a failed depository institution, the FDIC has the authority 

to obtain reimbursement from any insured depository institutions 

within the same DIHC. Section 407 would expand the scope of the 

FDIC’s reimbursement power to include all insured depository institutions controlled by the same company, not just those controlled 

by the same DIHC. Section 408 would broaden the FDIC’s authority to prohibit or limit any company that controls an insured depository from making ‘‘golden parachute’’ payments or indemnification 

payments to institution-affiliated parties of insured depositories. 

(Institution-affiliated parties include directors, officers, employees, 

and controlling shareholders.) CBO has no basis to estimate the 

costs of these mandates. 

EMPLOYMENT PRACTICES. The bill would prevent people convicted 

of certain crimes from participating in the affairs of uninsured 

banks and would give bank regulatory agencies the authority to 

bar individuals charged with certain crimes of dishonesty from 

working at any depository institution. Section 604 would give the 

OCC and the Federal Reserve the authority to penalize uninsured 

banks for unauthorized participation by individuals convicted of 

certain crimes. Section 608 would expand the suspension, removal, 

and prohibition authority of Federal banking agencies and the NaVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00013 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2
14

tional Credit Union Administration Board with regard to individuals charged with certain crimes. CBO has no basis to estimate the 

cost of these mandates. 

Other Private-Sector Effects 

Several provisions of the bill would benefit financial institutions 

by allowing for greater flexibility of operations and relaxing certain 

restrictions. However, those provisions do not qualify as direct savings under UMRA since those benefits do not result directly from 

compliance with the mandates or affect the same activities as the 

mandates and cannot be netted against the mandate costs. Some 

of the provisions that would benefit the private sector are listed 

below:

• Section 101 would make it easier for some national banks to 

meet the requirements for S-corporation status, and could 

lower the taxes paid by those banks.

• Title II would give Federal thrift institutions some of the 

same powers available to banks, such as parity with banks 

with respect to investment adviser and broker-dealer registration requirements, allowing investments in community 

development and small businesses, ownership by trusts, and 

mergers with nonthrift affiliates.

• Title III would give Federal credit unions new options for investments, lending, and mergers, subject to certain terms 

and conditions. Section 302 would allow Federal agencies to 

lease land to Federal credit unions without charge under certain conditions. Section 312 would exempt insured credit 

unions from the requirement to file a notification and report 

form with the Federal Government in advance of a merger.

• Title IV would ease restrictions on interstate branching and 

mergers and eliminate reporting requirements regarding insider lending imposed on banks and banks’ executive officers. 

PREVIOUS ESTIMATES

On July 17, 2002, CBO transmitted a cost estimate for H.R. 3951 

as ordered reported by the House Committee on Financial Services 

on June 6, 2002. The version ordered reported by the Committee 

on the Judiciary differs only with regard to the timing of antitrust 

reviews and the filing of pre-merger notifications by federally insured credit unions. CBO estimates that those differences would 

have no significant effect on the impact of the bill on the Federal 

budget or on the costs of the intergovernmental or private-sector 

mandates imposed by the bill. 

ESTIMATE PREPARED BY: 

Federal Costs: Kathleen Gramp (226–2860) 

Federal Revenues: Pam Greene (226–2680) 

Impact on State, Local, and Tribal Governments: Susan Sieg Tompkins (225–3220) 

Impact on the Private Sector: Judith Ruud (226–2940) 

ESTIMATE APPROVED BY: 

Robert A. Sunshine 

15

Assistant Director for Budget Analysis 

and 

G. Thomas Woodward 

Assistant Director for Tax Analysis 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional 

Authority for this legislation in article 1, section 8, clause 1 (relating to the general welfare of the United States); article 1, section 

8, clause 3 (relating to the power to regulate interstate commerce); 

article 1, section 8, clause 5 (relating to the power to coin money 

and regulate the value thereof); and article I, section 8, clause 18 

(relating to making all laws necessary and proper for carrying into 

execution powers vested by the Constitution in the government of 

the United States). 

SECTION-BY-SECTION ANALYSIS AND DISCUSSION

The following section by section analysis describes the sections of 

H.R. 3951 as reported by the Committee on the Judiciary. 

TITLE I—NATIONAL BANKS

Provisions contained in title I were not referred to the Committee 

on the Judiciary, see H. Rept. 107–516 for analysis. 

TITLE II—SAVINGS ASSOCIATIONS PROVISIONS

Section 213. Clarifying citizenship of Federal savings associations 

for Federal court jurisdiction. This section amends the Home Owners’ Loan Act, 12 U.S.C. § 1464, by establishing home State citizenship for Federal savings associations in the State where the association’s main office is located. Federal diversity jurisdiction requires all of the parties of a lawsuit be citizens of different States 

and there be at least $75,000 in dispute. Currently Federal savings 

associations do not satisfy the requirements of diversity jurisdiction 

because they are chartered by the Federal Government, typically 

operate in a number of States, and thus have no State citizenship. 

This section will conform the legal citizenship of Federal savings 

associations with that of national banks, which have been deemed 

citizens of the State where they are headquartered. 

Section 214. Clarification of applicability of certain procedural 

doctrines. This section amends Section 11A(d) of the Federal Deposit Insurance Act, 12 U.S.C. § 1821a(d), by prohibiting the assertion of res judicata, collateral estoppel, or any similar defense or 

rule of law for claims brought against the United States or related 

agency based upon actions of the Federal Savings and Loan Insurance Corporation prior to its dissolution, or the Federal Home Loan 

Bank Board prior to its dissolution, and arising from th Financial 

Institutions Reform, Recovery, and Enforcement Act of 1989 

(FIRREA) or its implementation where any monetary recovery 

would be paid from the Federal Savings & Loan Insurance Corporation (FSLIC) Resolution Fund. During the savings and loan 

crisis of the 1980’s, Federal thrift regulators sought to avoid incurring additional deposit insurance liabilities by encouraging healthy 

thrifts to take over ailing thrifts through supervisory mergers. In 

16

exchange, the Federal thrift regulators offered to treat a failed 

thrift’s negative net worth as supervisory goodwill and include it 

in regulatory capital. In 1989, Congress enacted FIRREA, which 

prohibited thrifts from counting supervisory goodwill as regulatory 

capital. In 1996, in United States v. Winstar, 518 U.S. 839 (1996), 

the Supreme Court held that the government had entered into contracts with the acquiring thrifts, and had breached those contracts 

when it implemented FIRREA’s prohibitions on including supervisory goodwill in calculating regulatory capital. Section 214 seeks 

to ensure that all institutions entitled to pursue claims against the 

government under the Winstar decision be treated equally and 

given an opportunity to have those claims heard on their merits. 

TITLE III—CREDIT UNION PROVISIONS

Section 312. Exemption from Premerger Notification Requirement 

of the Clayton Act. This section amends the Clayton Act to exempt 

credit unions form provisions of the Hart-Scott-Rodino Antitrust 

Improvements Act of 1976 (15 U.S.C. 18a) which require certain acquired and acquiring persons—including federally insured credit 

unions to file a notification and report form with the Federal Trade 

Commission (FTC) to provide advance notification of mergers and 

acquisitions when the value of the transaction exceeds $50 million. 

TITLE IV—DEPOSITORY INSTITUTION PROVISIONS

Section 402. Statute of Limitations gor Judicial Review of Appointment of a Receiver for Depository Institutions. This section 

amends the National Bank Receivership Act, 12 U.S.C. § 191, the 

Federal Deposit Insurance Act, 12 U.S.C. § 1821(c)(7), and the Federal Credit Union Act, 12 U.S.C. § 1787(a)(1), by establishing a uniform 30 day statute of limitations for national banks, State chartered non-member banks, and credit unions to challenge decisions 

by the Office of the Comptroller of the Currency, Federal Deposit 

Insurance Corporation, and the National Credit Union Administrator to appoint a receiver. Current law generally provides that 

challenges to a decision by the Federal Deposit Insurance Corporation or the Office of Thrift Supervision to appoint a receiver for an 

insured State bank or savings association must be raised within 30 

days of the appointment. See 12 U.S.C. §§ 1821(c)(7), 1464(d)(2)(B). 

However, there is no statutory limitation on national banks’ ability 

to challenge a decision by the Office of the Comptroller of the Currency to appoint a receiver of an insured or uninsured national 

bank. As a result, the general 6 year statute of limitations currently applies to national banks in these instances. This protracted 

time period severely limits the Office of the Comptroller of the Currency’s authority to mange insolvent national banks that are placed 

in receivership and the ability of the Federal Deposit Insurance 

Corporation to wind up the affairs of an insured national bank in 

a timely manner with legal certainty. See James Madison, Ltd. v. 

Ludwig, 82 F.3d 1085 (1996). 

TITLE V—BANKING AGENCY PROVISIONS

Provisions contained in title V were not referred to the Committee on the Judiciary, see H. Rept. 107–516 for analysis. 

17

TITLE VI—BANKING AGENCY PROVISIONS

Section 609. Streamlining Depository Institution Merger Application Requirements. This section 609 amends paragraph 4 of section 

18(c) of the Federal Deposit Insurance Act, 12 U.S.C. § 1828(c), by 

establishing new competitive report requirements for depository institution merger applications. Currently, depository merger applications require competitive factors reports from the Office of the 

Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve, and the Office of Thrift Supervision, 

and the United States Department of Justice (DOJ). This section 

simplifies the competitive report requirement by requiring a report 

from the responsible banking agency and the DOJ, and requires 

that all report requests be filed with the FDIC to provide notice as 

it relates to the provision of Federal deposit insurance. 

TITLE VII—CLERICAL AND TECHNICAL AMENDMENTS

Section 703. Other Technical Corrections. This section amends 18 

U.S.C. § 1306 by making a technical correction to a cross reference 

to section 5136A of the Revised Statutes of the United States. 18 

U.S.C. § 1306 imposes criminal penalties for national or State 

banks in violation of the banking laws, which prohibit banks from 

participating in a lottery. In 1999, when Gramm-Leach-Bliley, Pub. 

L. No. 106–102, was enacted, the law that prohibits national banks 

from participating in lotteries was re-designated from section 

5136A to section 5136B of the Revised Statutes of the United 

States; however, no corresponding change was made to the cross 

reference in title 18. This section correctly amends title 18 to conform with the change made in 1999 by correctly changing the cross 

reference to section 5136B of the Revised Statutes of the United 

States. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported by the Committee on Financial Services, are shown in 

Report 107–516 part 1, filed on June 18, 2002.

The Committee on the Judiciary adopted amendments (shown 

at the beginning of this report) to the bill as reported by the Committee on Financial Services. Changes in provisions of existing law 

that would result from those amendments and differ from the 

changes that would result from the bill as reported by the Committee on Financial Services are shown as follows (new matter is 

printed in italics and existing law in which no change is proposed 

is shown in roman):

SECTION 7A OF THE CLAYTON ACT

SEC. 7A. (a)***

* * * * * * *

(c) The following classes of transactions are exempt from the 

requirements of this section—

18

(1) * * *

* * * * * * *

(7) transactions which require agency approval under section 10(e) of the Home Owners’ Loan Act, section 18(c) of the 

Federal Deposit Insurance Act (12 U.S.C. 1828(c)), 205(b)(3) of 

the Federal Credit Union Act (12 U.S.C. 1785(b)(3), or section 

3 of the Bank Holding Company Act of 1956 (12 U.S.C. 1842), 

except that a portion of a transaction is not exempt under this 

paragraph if such portion of the transaction (A) is subject to 

section 4(k) of the Bank Holding Company Act of 1956; and (B) 

does not require agency approval under section 3 of the Bank 

Holding Company Act of 1956; 

* * * * * * *

MARKUP TRANSCRIPT

BUSINESS MEETING 

WEDNESDAY, JULY 17, 2002

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Committee met, pursuant to notice, at 10:05 a.m., in Room 

2141, Rayburn House Office Building, Hon. F. James Sensenbrenner, Jr. [Chairman of the Committee] presiding. 

Chairman SENSENBRENNER. The Committee will be in order. 

* * * * * * *

Pursuant to notice, I now call up the bill H.R. 3951, the ‘‘Financial Services Regulatory Relief Act,’’ for purposes of markup and 

move its favorable recommendation to the House. 

Without objection, the bill will be considered as read and open 

for amendment at any point. 

[The bill, H.R. 3951, follows:]

19

1

[JUDICIARY COMMITTEE PRINT]

Union Calendar No. 

107TH CONGRESS

2D SESSION H. R. 3951

[Report No. 107– ]

To provide regulatory relief and improve productivity for insured depository

institutions, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 13, 2002

Mrs. CAPITO (for herself, Mr. SANDLIN, Mr. OXLEY, and Mr. BACHUS) introduced the following bill; which was referred to the Committee on Financial Services

JUNE , 2002

Reported with an amendment, committed to the Committee of the Whole

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

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

[For text of introduced bill, see copy of bill as introduced on March 13, 2002]

A BILL

To provide regulatory relief and improve productivity for

insured depository institutions, and for other purposes.

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


3951.AAB
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2

1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the ‘‘Fi3 nancial Services Regulatory Relief Act of 2002’’.

4 (b) TABLE OF CONTENTS.—The table of contents for

5 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—NATIONAL BANK PROVISIONS

Sec. 101. National bank directors.

Sec. 102. Voting in shareholder elections.

Sec. 103. Simplifying dividend calculations for national banks.

Sec. 104. Repeal of obsolete limitation on removal authority of the Comptroller

of the Currency.

Sec. 105. Repeal of intrastate branch capital requirements.

Sec. 106. Clarification of waiver of publication requirements for bank merger notices.

Sec. 107. Capital equivalency deposits for Federal branches and agencies of foreign banks.

Sec. 108. Equal treatment for Federal agencies of foreign banks.

Sec. 109. Maintenance of a Federal branch and a Federal agency in the same

State.

TITLE II—SAVINGS ASSOCIATION PROVISIONS

Sec. 201. Parity for savings associations under the Securities Exchange Act of

1934 and the Investment Advisers Act of 1940.

Sec. 202. Investments by Federal savings associations authorized to promote the

public welfare.

Sec. 203. Merger and consolidation of Federal savings associations with nondepository institution affiliates.

Sec. 204. Repeal of statutory dividend notice requirement for savings association

subsidiaries of savings and loan holding companies.

Sec. 205. Modernizing statutory authority for trust ownership of savings associations.

Sec. 206. Repeal of overlapping rules governing purchased mortgage servicing

rights.

Sec. 207. Restatement of authority for Federal savings associations to invest in

small business investment companies.

Sec. 208. Removal of limitation on investments in auto loans.

Sec. 209. Selling and offering of deposit products.

Sec. 210. Funeral- and cemetery-related fiduciary services.

Sec. 211. Repeal of qualified thrift lender requirement with respect to out-of-State

branches.

Sec. 212. Small business and other commercial loans.

Sec. 213. Clarifying citizenship of Federal savings associations for Federal court

jurisdiction.

Sec. 214. Clarification of applicability of certain procedural doctrines.


3951.AAC
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3

TITLE III—CREDIT UNION PROVISIONS

Sec. 301. Privately insured credit unions authorized to become members of a Federal home loan bank.

Sec. 302. Leases of land on Federal facilities for credit unions.

Sec. 303. Investments in securities by Federal credit unions.

Sec. 304. Increase in general 12-year limitation of term of Federal credit union

loans to 15 years.

Sec. 305. Increase in 1 percent investment limit in credit union service organizations.

Sec. 306. Member business loan exclusion for loans to nonprofit religious organizations.

Sec. 307. Check cashing and money transfer services offered within the field of

membership.

Sec. 308. Voluntary mergers involving multiple common-bond credit unions.

Sec. 309. Conversions involving common-bond credit unions.

Sec. 310. Credit union governance.

Sec. 311. Providing the National Credit Union Administration with greater flexibility in responding to market conditions.

TITLE IV—DEPOSITORY INSTITUTION PROVISIONS

Sec. 401. Easing restrictions on interstate branching and mergers.

Sec. 402. Statute of limitations for judicial review of appointment of a receiver

for depository institutions.

Sec. 403. Reporting requirements relating to insider lending.

Sec. 404. Amendment to provide an inflation adjustment for the small depository

institution exception under the Depository Institution Management Interlocks Act.

Sec. 405. Enhancing the safety and soundness of insured depository institutions.

Sec. 406. Investments by insured savings associations in bank service companies

authorized.

Sec. 407. Cross guarantee authority.

Sec. 408. Golden parachute authority and nonbank holding companies.

Sec. 409. Duty of depository institutions to inform customers of certain adverse

actions.

TITLE V—DEPOSITORY INSTITUTION AFFILIATES PROVISIONS

Sec. 501. Clarification of cross marketing provision.

Sec. 502. Amendment to provide the Federal Reserve Board with discretion concerning the imputation of control of shares of a company by

trustees.

Sec. 503. Eliminating geographic limits on thrift service companies.

Sec. 504. Clarification of scope of applicable rate provision.

TITLE VI—BANKING AGENCY PROVISIONS

Sec. 601. Waiver of examination schedule in order to allocate examiner resources.

Sec. 602. Credit card accounts permitted for bank examiners on same terms as

other consumers.

Sec. 603. Interagency data sharing.

Sec. 604. Penalty for unauthorized participation by convicted individual.

Sec. 605. Amendment permitting the destruction of old records of a depository institution by the FDIC after the appointment of the FDIC as receiver.

Sec. 606. Modernization of FDIC recordkeeping requirement.


3951.AAD
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4

Sec. 607. Repeal of minimum antitrust review period with the agreement of the

Attorney General.

Sec. 608. Clarification of extent of suspension, removal, and prohibition authority

of Federal banking agencies in cases of certain crimes by institution-affiliated parties.

Sec. 609. Streamlining depository institution merger application requirements.

Sec. 610. Inclusion of Director of the Office of Thrift Supervision in list of banking agencies regarding insurance customer protection regulations.

TITLE VII—CLERICAL AND TECHNICAL AMENDMENTS

Sec. 701. Clerical amendments to the Home Owners’ Loan Act.

Sec. 702. Technical corrections to the Federal Credit Union Act.

Sec. 703. Other technical corrections.

1 TITLE I—NATIONAL BANK

2 PROVISIONS

3 SEC. 101. NATIONAL BANK DIRECTORS.

4 Section 5146 of the Revised Statutes of the United

5 States (12 U.S.C. 72) is amended—

6 (1) by striking ‘‘SEC. 5146. Every director must

7 during’’ and inserting the following:

8 ‘‘SEC. 5146. REQUIREMENTS FOR BANK DIRECTORS.

9 ‘‘(a) RESIDENCY REQUIREMENTS.—Every director of

10 a national bank shall, during’’;

11 (2) by striking ‘‘total number of directors. Every

12 director must own in his or her own right’’ and in13 serting ‘‘total number of directors.

14 ‘‘(b) INVESTMENT REQUIREMENT.—

15 ‘‘(1) IN GENERAL.—Every director of a national

16 bank shall own, in his or her own right,’’; and

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


3951.AAE
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5

1 ‘‘(2) EXCEPTION FOR SUBORDINATED DEBT IN

2 CERTAIN CASES.—In lieu of the requirements of para3 graph (1) relating to the ownership of capital stock

4 in the national bank, the Comptroller of the Currency

5 may, by regulation or order, permit an individual to

6 serve as a director of a national bank that has elected,

7 or notifies the Comptroller of the bank’s intention to

8 elect, to operate as a S corporation pursuant to sec9 tion 1362(a) of the Internal Revenue Code of 1986, if

10 that individual holds debt of at least $1,000 issued by

11 the national bank that is subordinated to the interests

12 of depositors and other general creditors of the na13 tional bank.’’.

14 SEC. 102. VOTING IN SHAREHOLDER ELECTIONS.

15 Section 5144 of the Revised Statutes of the United

16 States (12 U.S.C. 61) is amended—

17 (1) by striking ‘‘or to cumulate’’ and inserting

18 ‘‘or, if so provided by the articles of association of the

19 national bank, to cumulate’’;

20 (2) by striking the comma after ‘‘his shares shall

21 equal’’; and

22 (3) by adding at the end the following new sen23 tence: ‘‘The Comptroller of the Currency may pre24 scribe such regulations to carry out the purposes of


3951.AAF
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6

1 this section as the Comptroller determines to be ap2 propriate.’’.

3 SEC. 103. SIMPLIFYING DIVIDEND CALCULATIONS FOR NA4 TIONAL BANKS.

5 Section 5199 of the Revised Statutes of the United

6 States (12 U.S.C. 60) is amended to read as follows:

7 ‘‘SEC. 5199. NATIONAL BANK DIVIDENDS.

8 ‘‘(a) IN GENERAL.—Subject to subsection (b), the di9 rectors of any national bank may declare a dividend of so

10 much of the undivided profits of the bank as the directors

11 judge to be expedient.

12 ‘‘(b) APPROVAL REQUIRED UNDER CERTAIN CIR13 CUMSTANCES.—A national bank may not declare and pay

14 dividends in any year in excess of an amount equal to the

15 sum of the total of the net income of the bank for that year

16 and the retained net income of the bank in the preceding

17 two years, minus any transfers required by the Comptroller

18 of the Currency (including any transfers required to be

19 made to a fund for the retirement of any preferred stock),

20 unless the Comptroller of the Currency approves the dec21 laration and payment of dividends in excess of such

22 amount.’’.


3951.AAG
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7

1 SEC. 104. REPEAL OF OBSOLETE LIMITATION ON REMOVAL

2 AUTHORITY OF THE COMPTROLLER OF THE

3 CURRENCY.

4 Section 8(e)(4) of the Federal Deposit Insurance Act

5 (12 U.S.C. 1818(e)(4)) is amended by striking the 5th sen6 tence.

7 SEC. 105. REPEAL OF INTRASTATE BRANCH CAPITAL RE8 QUIREMENTS.

9 Section 5155(c) of the Revised Statutes of the United

10 States (12 U.S.C. 36(c)) is amended—

11 (1) in the 2nd sentence, by striking ‘‘, without

12 regard to the capital requirements of this section,’’;

13 and

14 (2) by striking the last sentence.

15 SEC. 106. CLARIFICATION OF WAIVER OF PUBLICATION RE16 QUIREMENTS FOR BANK MERGER NOTICES.

17 The last sentence of sections 2(a) and 3(a)(2) of the

18 National Bank Consolidation and Merger Act (12 U.S.C.

19 215(a) and 215a(a)(2), respectively) are each amended by

20 striking ‘‘Publication of notice may be waived, in cases

21 where the Comptroller determines that an emergency exists

22 justifying such waiver, by unanimous action of the share23 holders of the association or State bank’’ and inserting

24 ‘‘Publication of notice may be waived if the Comptroller

25 determines that an emergency exists justifying such waiver

26 or if the shareholders of the association or State bank agree


3951.AAH
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8

1 by unanimous action to waive the publication requirement

2 for their respective institutions’’.

3 SEC. 107. CAPITAL EQUIVALENCY DEPOSITS FOR FEDERAL

4 BRANCHES AND AGENCIES OF FOREIGN

5 BANKS.

6 (a) IN GENERAL.—Section 4(g) of the International

7 Banking Act of 1978 (12 U.S.C. 3102(g)) is amended to

8 read as follows:

9 ‘‘(g) CAPITAL EQUIVALENCY DEPOSIT.—

10 ‘‘(1) IN GENERAL.—Upon the opening of a Fed11 eral branch or agency of a foreign bank in any State

12 and thereafter, the foreign bank, in addition to any

13 deposit requirements imposed under section 6, shall

14 keep on deposit investment securities, dollar deposits,

15 or other similar types of assets approved by the

16 Comptroller of the Currency in such amounts as the

17 Comptroller of the Currency determines to be nec18 essary for the protection of depositors and other inves19 tors and to be consistent with the principles of safety

20 and soundness.

21 ‘‘(2) REGULATIONS REQUIRED.—The Comp22 troller of the Currency shall prescribe such regulations

23 as the Comptroller determines to be necessary or ap24 propriate for implementing the requirements estabVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00026 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

3951.AAI
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9

1 lished under paragraph (1), in consultation with the

2 Financial Institutions Examination Council.

3 ‘‘(3) SUMMARY OF CONSULTATION.—In pub4 lishing any proposed or final regulation under para5 graph (2), the Comptroller of the Currency shall in6 clude a description of the issues taken into account in

7 developing such regulation, a summary of the com8 ments of the Financial Institutions Examination

9 Council with respect to such regulation, and a state10 ment describing the manner in which such comments

11 were addressed by the Comptroller.’’.

12 (b) SUNSET PROVISION.—

13 (1) IN GENERAL.—The amendment made by sub14 section (a) shall cease to apply as of the date that the

15 Board of Governors of the Federal Reserve System de16 termines that any State described in paragraph (2)

17 has in effect a provision of law or regulation applica18 ble to State branches or agencies (of foreign banks) lo19 cated in such State that is essentially equivalent to

20 the amendment made by subsection (a). As of such

21 date, section 4(g) of the International Banking Act of

22 1978 is amended to read as such section was in effect

23 immediately before the effective date of the amend24 ment made by subsection (a).


3951.AAJ
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10

1 (2) DESCRIPTION.—A State referred to in para2 graph (1) is any State in which are located branches

3 and agencies (of foreign banks) the total assets of

4 which constitute more than 50 percent of the total as5 sets in the United States of all branches or agencies

6 of foreign banks.

7 SEC. 108. EQUAL TREATMENT FOR FEDERAL AGENCIES OF

8 FOREIGN BANKS.

9 The 1st sentence of section 4(d) of the International

10 Banking Act of 1978 (12 U.S.C. 3102(d)) is amended by

11 inserting ‘‘from citizens or residents of the United States’’

12 after ‘‘deposits’’.

13 SEC. 109. MAINTENANCE OF A FEDERAL BRANCH AND A

14 FEDERAL AGENCY IN THE SAME STATE.

15 Section 4(e) of the International Banking Act of 1978

16 (12 U.S.C. 3102(e)) is amended by inserting ‘‘if the mainte17 nance of both an agency and a branch in the State is pro18 hibited under the law of such State’’ before the period at

19 the end.

20 TITLE II—SAVINGS ASSOCIATION

21 PROVISIONS

22 SEC. 201. PARITY FOR SAVINGS ASSOCIATIONS UNDER THE

23 SECURITIES EXCHANGE ACT OF 1934 AND THE

24 INVESTMENT ADVISERS ACT OF 1940.

25 (a) SECURITIES EXCHANGE ACT OF 1934.—


3951.AAK
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1 (1) DEFINITION OF BANK.—Section 3(a)(6) of

2 the Securities Exchange Act of 1934 (15 U.S.C.

3 78c(a)(6)) is amended by striking ‘‘(A) a banking in4 stitution organized under the laws of the United

5 States’’ and inserting ‘‘(A) a depository institution

6 (as defined in section 3 of the Federal Deposit Insur7 ance Act) or a branch or agency of a foreign bank (as

8 such terms are defined in section 1(b) of the Inter9 national Banking Act of 1978)’’.

10 (2) INCLUDE OTS UNDER THE DEFINITION OF

11 APPROPRIATE REGULATORY AGENCY FOR CERTAIN

12 PURPOSES.—Section 3(a)(34) of such Act (15 U.S.C.

13 78c(a)(34)) is amended—

14 (A) in subparagraph (A)—

15 (i) in clause (ii), by striking ‘‘(i) or

16 (iii)’’ and inserting ‘‘(i), (iii), or (iv)’’;

17 (ii) by striking ‘‘and’’ at the end of

18 clause (iii);

19 (iii) by redesignating clause (iv) as

20 clause (v); and

21 (iv) by inserting the following new

22 clause after clause (iii):

23 ‘‘(iv) the Director of the Office of

24 Thrift Supervision, in the case of a savings

25 association (as defined in section 3(b) of the


3951.AAL
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12

1 Federal Deposit Insurance Act (12 U.S.C.

2 1813(b))) the deposits of which are insured

3 by the Federal Deposit Insurance Corpora4 tion, a subsidiary or a department or divi5 sion of any such savings association, or a

6 savings and loan holding company; and’’;

7 (B) in subparagraph (B)—

8 (i) in clause (ii), by striking ‘‘(i) or

9 (iii)’’ and inserting ‘‘(i), (iii), or (iv)’’;

10 (ii) by striking ‘‘and’’ at the end of

11 clause (iii);

12 (iii) by redesignating clause (iv) as

13 clause (v); and

14 (iv) by inserting the following new

15 clause after clause (iii):

16 ‘‘(iv) the Director of the Office of

17 Thrift Supervision, in the case of a savings

18 association (as defined in section 3(b) of the

19 Federal Deposit Insurance Act (12 U.S.C.

20 1813(b))) the deposits of which are insured

21 by the Federal Deposit Insurance Corpora22 tion, or a subsidiary of any such savings

23 association, or a savings and loan holding

24 company; and’’;

25 (C) in subparagraph (C)—


3951.AAM
31

13

1 (i) in clause (ii), by striking ‘‘(i) or

2 (iii)’’ and inserting ‘‘(i), (iii), or (iv)’’;

3 (ii) by striking ‘‘and’’ at the end of

4 clause (iii);

5 (iii) by redesignating clause (iv) as

6 clause (v); and

7 (iv) by inserting the following new

8 clause after clause (iii):

9 ‘‘(iv) the Director of the Office of

10 Thrift Supervision, in the case of a savings

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

12 Federal Deposit Insurance Act (12 U.S.C.

13 1813(b))) the deposits of which are insured

14 by the Federal Deposit Insurance Corpora15 tion, a savings and loan holding company,

16 or a subsidiary of a savings and loan hold17 ing company when the appropriate regu18 latory agency for such clearing agency is

19 not the Commission; and’’;

20 (D) in subparagraph (D)—

21 (i) by striking ‘‘and’’ at the end of

22 clause (ii);

23 (ii) by redesignating clause (iii) as

24 clause (iv); and


3951.AAN
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14

1 (iii) by inserting the following new

2 clause after clause (ii):

3 ‘‘(iii) the Director of the Office of

4 Thrift Supervision, in the case of a savings

5 association (as defined in section 3(b) of the

6 Federal Deposit Insurance Act (12 U.S.C.

7 1813(b))) the deposits of which are insured

8 by the Federal Deposit Insurance Corpora9 tion; and’’;

10 (E) in subparagraph (F)—

11 (i) by redesignating clauses (ii), (iii),

12 and (iv) as clauses (iii), (iv), and (v), re13 spectively; and

14 (ii) by inserting the following new

15 clause after clause (i):

16 ‘‘(ii) the Director of the Office of Thrift

17 Supervision, in the case of a savings asso18 ciation (as defined in section 3(b) of the

19 Federal Deposit Insurance Act (12 U.S.C.

20 1813(b))) the deposits of which are insured

21 by the Federal Deposit Insurance Corpora22 tion; and’’; and

23 (F) at the end of the last undesignated

24 paragraph, by inserting the following new sen25 tence: ‘‘As used in this paragraph, the term ‘savVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00032 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

3951.AAO
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15

1 ings and loan holding company’ has the mean2 ing given it in section 10(a) of the Home Own3 ers’ Loan Act (12 U.S.C. 1467a(a)).’’.

4 (b) INVESTMENT ADVISERS ACT OF 1940.—

5 (1) DEFINITION OF BANK.—Section 202(a)(2) of

6 the Investment Advisers Act of 1940 (15 U.S.C. 80b–

7 2(a)(2)) is amended by striking ‘‘(A) a banking insti8 tution organized under the laws of the United States’’

9 and inserting ‘‘(A) a depository institution (as de10 fined in section 3 of the Federal Deposit Insurance

11 Act) or a branch or agency of a foreign bank (as such

12 terms are defined in section 1(b) of the International

13 Banking Act of 1978)’’.

14 (2) CONFORMING AMENDMENTS.—Subsections

15 (a)(1)(A)(i), (a)(1)(B), (a)(2), and (b) of section 210A

16 of such Act (15 U.S.C. 80b–10a), as added by section

17 220 of the Gramm-Leach-Bliley Act, are each amend18 ed by striking ‘‘bank holding company’’ each place it

19 occurs and inserting ‘‘bank holding company or sav20 ings and loan holding company’’.

21 (c) CONFORMING AMENDMENT TO THE INVESTMENT

22 COMPANY ACT OF 1940.—Section 10(c) of the Investment

23 Company Act of 1940 (15 U.S.C. 80a–10(c)), as amended

24 by section 213(c) of the Gramm-Leach-Bliley Act, is amend25 ed by inserting after ‘‘1956)’’ the following: ‘‘or any one


3951.AAP
34

16

1 savings and loan holding company (together with its affili2 ates and subsidiaries) (as such terms are defined in section

3 10 of the Home Owners’ Loan Act)’’.

4 SEC. 202. INVESTMENTS BY FEDERAL SAVINGS ASSOCIA5 TIONS AUTHORIZED TO PROMOTE THE PUB6 LIC WELFARE.

7 (a) IN GENERAL.—Section 5(c)(3) of the Home Own8 ers’ Loan Act (12 U.S.C. 1464(c)) is amended by adding

9 at the end the following new subparagraph:

10 ‘‘(E) DIRECT INVESTMENTS TO PROMOTE

11 THE PUBLIC WELFARE.—

12 ‘‘(i) IN GENERAL.—A Federal savings

13 association may make investments designed

14 primarily to promote the public welfare, in15 cluding the welfare of low- and moderate-in16 come communities or families through the

17 provision of housing, services, and jobs.

18 ‘‘(ii) DIRECT INVESTMENTS OR ACQUI19 SITION OF INTEREST IN OTHER COMPA20 NIES.—Investments under clause (i) may be

21 made directly or by purchasing interests in

22 an entity primarily engaged in making

23 such investments.

24 ‘‘(iii) PROHIBITION ON UNLIMITED LI25 ABILITY.—No investment may be made


3951.AAQ
35

17

1 under this subparagraph which would sub2 ject a Federal savings association to unlim3 ited liability to any person.

4 ‘‘(iv) SINGLE INVESTMENT LIMITATION

5 TO BE ESTABLISHED BY DIRECTOR.—Sub6 ject to clauses (v) and (vi), the Director

7 shall establish, by order or regulation, lim8 its on—

9 ‘‘(I) the amount any savings asso10 ciation may invest in any 1 project;

11 and

12 ‘‘(II) the aggregate amount of in13 vestment of any savings association

14 under this subparagraph.

15 ‘‘(v) FLEXIBLE AGGREGATE INVEST16 MENT LIMITATION.—The aggregate amount

17 of investments of any savings association

18 under this subparagraph may not exceed an

19 amount equal to the sum of 5 percent of the

20 savings association’s capital stock actually

21 paid in and unimpaired and 5 percent of

22 the savings association’s unimpaired sur23 plus, unless—


3951.AAR
36

18

1 ‘‘(I) the Director determines that

2 the savings association is adequately

3 capitalized; and

4 ‘‘(II) the Federal Deposit Insur5 ance Corporation determines, by order,

6 that the aggregate amount of invest7 ments in a higher amount than the

8 limit under this clause will pose no

9 significant risk to the affected deposit

10 insurance fund.

11 ‘‘(vi) MAXIMUM AGGREGATE INVEST12 MENT LIMITATION.—Notwithstanding clause

13 (v), the aggregate amount of investments of

14 any savings association under this subpara15 graph may not exceed an amount equal to

16 the sum of 10 percent of the savings associa17 tion’s capital stock actually paid in and

18 unimpaired and 10 percent of the savings

19 association’s unimpaired surplus.

20 ‘‘(vii) INVESTMENTS NOT SUBJECT TO

21 OTHER LIMITATION ON QUALITY OF INVEST22 MENTS.—No obligation a Federal savings

23 association acquires or retains under this

24 subparagraph shall be taken into account

25 for purposes of the limitation contained in


3951.AAS
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19

1 section 28(d) of the Federal Deposit Insur2 ance Act on the acquisition and retention of

3 any corporate debt security not of invest4 ment grade.’’.

5 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec6 tion 5(c)(3)(A) of the Home Owners’ Loan Act (12 U.S.C.

7 1464(c)(3)(A)) is amended to read as follows:

8 ‘‘(A) [Repealed.]’’.

9 SEC. 203. MERGERS AND CONSOLIDATIONS OF FEDERAL

10 SAVINGS ASSOCIATIONS WITH NONDEPOSI11 TORY INSTITUTION AFFILIATES.

12 Section 5(d)(3) of the Home Owners’ Loan Act (12

13 U.S.C. 1464(d)(3)) is amended—

14 (1) by redesignating subparagraph (B) as sub15 paragraph (C); and

16 (2) by inserting after subparagraph (A) the fol17 lowing new subparagraph:

18 ‘‘(B) MERGERS AND CONSOLIDATIONS WITH

19 NONDEPOSITORY INSTITUTION AFFILIATES.—

20 ‘‘(i) IN GENERAL.—Upon the approval

21 of the Director, a Federal savings associa22 tion may merge with any nondepository in23 stitution affiliate of the savings association.


3951.AAT
38

20

1 ‘‘(ii) RULE OF CONSTRUCTION.—No

2 provision of clause (i) shall be construed

3 as—

4 ‘‘(I) affecting the applicability of

5 section 18(c) of the Federal Deposit In6 surance Act; or

7 ‘‘(II) granting a Federal savings

8 association any power or any author9 ity to engage in any activity that is

10 not authorized for a Federal savings

11 association under any other provision

12 of this Act or any other provision of

13 law.’’.

14 SEC. 204. REPEAL OF STATUTORY DIVIDEND NOTICE RE15 QUIREMENT FOR SAVINGS ASSOCIATION SUB16 SIDIARIES OF SAVINGS AND LOAN HOLDING

17 COMPANIES.

18 Section 10(f) of the Home Owners’ Loan Act (12

19 U.S.C. 1467a(f)) is amended to read as follows:

20 ‘‘(f) DECLARATION OF DIVIDEND.—The Director

21 may—

22 ‘‘(1) require a savings association that is a sub23 sidiary of a savings and loan holding company to

24 give prior notice to the Director of the intent of the

25 savings association to pay a dividend on its guarVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00038 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

3951.AAU
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21

1 anty, permanent, or other nonwithdrawable stock;

2 and

3 ‘‘(2) establish conditions on the payment of divi4 dends by such a savings association.’’.

5 SEC. 205. MODERNIZING STATUTORY AUTHORITY FOR

6 TRUST OWNERSHIP OF SAVINGS ASSOCIA7 TIONS.

8 (a) IN GENERAL.—Section 10(a)(1)(C) of the Home

9 Owners’ Loan Act (12 U.S.C. 1467a(a)(1)(C)) is

10 amended—

11 (1) by striking ‘‘trust,’’ and inserting ‘‘business

12 trust,’’; and

13 (2) by inserting ‘‘or any other trust unless by its

14 terms it must terminate within 25 years or not later

15 than 21 years and 10 months after the death of indi16 viduals living on the effective date of the trust,’’ after

17 ‘‘or similar organization,’’.

18 (b) TECHNICAL AND CONFORMING AMENDMENT.—Sec19 tion 10(a)(3) of the Home Owners’ Loan Act (12 U.S.C.

20 1467a(a)(3)) is amended—

21 (1) by striking ‘‘does not include—’’ and all that

22 follows through ‘‘any company by virtue’’ where such

23 term appears in subparagraph (A) and inserting

24 ‘‘does not include any company by virtue’’;


3951.AAV
40

22

1 (2) by striking ‘‘; and’’ at the end of subpara2 graph (A) and inserting a period; and

3 (3) by striking subparagraph (B).

4 SEC. 206. REPEAL OF OVERLAPPING RULES GOVERNING

5 PURCHASED MORTGAGE SERVICING RIGHTS.

6 Section 5(t) of the Home Owners’ Loan Act (12 U.S.C.

7 1464(t)) is amended—

8 (1) by striking paragraph (4) and inserting the

9 following new paragraph:

10 ‘‘(4) [Repealed.]’’; and

11 (2) in paragraph (9)(A), by striking ‘‘intangible

12 assets, plus’’ and all that follows through the period

13 at the end and inserting ‘‘intangible assets.’’.

14 SEC. 207. RESTATEMENT OF AUTHORITY FOR FEDERAL SAV15 INGS ASSOCIATIONS TO INVEST IN SMALL

16 BUSINESS INVESTMENT COMPANIES.

17 Subparagraph (D) of section 5(c)(4) of the Home Own18 ers’ Loan Act (12 U.S.C. 1464(c)(4)) is amended to read

19 as follows:

20 ‘‘(D) SMALL BUSINESS INVESTMENT COMPA21 NIES.—Any Federal savings association may in22 vest in 1 or more small business investment com23 panies, or in any entity established to invest

24 solely in small business investment companies

25 formed under the Small Business Investment Act


3951.AAW
41

23

1 of 1958, except that the total amount of invest2 ments under this subparagraph may not at any

3 time exceed the amount equal to 5 percent of

4 capital and surplus of the savings association.’’.

5 SEC. 208. REMOVAL OF LIMITATION ON INVESTMENTS IN

6 AUTO LOANS.

7 (a) IN GENERAL.—Section 5(c)(1) of the Home Own8 ers’ Loan Act (12 U.S.C. 1464(c)(1)) is amended by adding

9 at the end the following new subparagraph:

10 ‘‘(V) AUTO LOANS.—Loans and leases for

11 motor vehicles acquired for personal, family, or

12 household purposes.’’.

13 (b) TECHNICAL AND CONFORMING AMENDMENT RE14 LATING TO QUALIFIED THRIFT INVESTMENTS.—Section

15 10(m)(4)(C)(ii) of the Home Owners’ Loan Act (12 U.S.C.

16 1467a(m)(4)(C)(ii)) is amended by adding at the end the

17 following new subclause:

18 ‘‘(VIII) Loans and leases for

19 motor vehicles acquired for personal,

20 family, or household purposes.’’.

21 SEC. 209. SELLING AND OFFERING OF DEPOSIT PRODUCTS.

22 Section 15(h) of the Securities Exchange Act of

23 1934 (15 U.S.C. 78o(h)) is amended by adding at the

24 end the following new paragraph:


3951.AAX
42

24

1 ‘‘(4) SELLING AND OFFERING OF DEPOSIT PROD2 UCTS.—No law, rule, regulation, or order, or other

3 administrative action of any State or political sub4 division thereof shall directly or indirectly require

5 any agent who represents 1 Federal savings associa6 tion (as such term is defined in section 2(5) of the

7 Home Owners’ Loan Act (12 U.S.C. 1462(5)) in sell8 ing or offering deposit (as such term is defined in sec9 tion 3 of the Federal Deposit Insurance Act (12

10 U.S.C. 1813(l)) products issued by such association to

11 qualify or register as a broker, dealer, associated per12 son of a broker, or associated person of a dealer, or

13 to qualify or register in any other similar status or

14 capacity.’’.

15 SEC. 210. FUNERAL- AND CEMETERY-RELATED FIDUCIARY

16 SERVICES.

17 Section 5(n) of the Home Owners’ Loan Act (12 U.S.C.

18 1464(n)) is amended by adding at the end the following

19 new paragraph:

20 ‘‘(11) FUNERAL- AND CEMETERY-RELATED FI21 DUCIARY SERVICES.—

22 ‘‘(A) IN GENERAL.—A funeral director or

23 cemetery operator, when acting in such capacity,

24 (or any other person in connection with a con25 tract or other agreement with a funeral director


3951.AAY
43

25

1 or cemetery operator) may engage any Federal

2 savings association, regardless of where the asso3 ciation is located, to act in any fiduciary capac4 ity in which the savings association has the right

5 to act in accordance with this section, including

6 holding funds deposited in trust or escrow by the

7 funeral director or cemetery operator (or by such

8 other party), and the savings association may

9 act in such fiduciary capacity on behalf of the

10 funeral director or cemetery operator (or such

11 other person).

12 ‘‘(B) DEFINITIONS.—For purposes of this

13 paragraph, the following definitions shall apply:

14 ‘‘(i) CEMETERY.—The term ‘cemetery’

15 means any land or structure used, or in16 tended to be used, for the internment of

17 human remains in any form.

18 ‘‘(ii) CEMETERY OPERATOR.—The term

19 ‘cemetery operator’ means any person who

20 contracts or accepts payment for merchan21 dise, endowment, or perpetual care services

22 in connection with a cemetery.

23 ‘‘(iii) FUNERAL DIRECTOR.—The term

24 ‘funeral director’ means any person who


3951.AAZ
44

26

1 contracts or accepts payment to provide or

2 arrange—

3 ‘‘(I) services for the final disposi4 tion of human remains; or

5 ‘‘(II) funeral services, property, or

6 merchandise (including cemetery serv7 ices, property, or merchandise).’’.

8 SEC. 211. REPEAL OF QUALIFIED THRIFT REQUIREMENT

9 WITH RESPECT TO OUT-OF-STATE BRANCHES.

10 Section 5(r)(1) of the Home Owners’ Loan Act (12

11 U.S.C. 1464(r)(1)) is amended by striking the ultimate sen12 tence.

13 SEC. 212. SMALL BUSINESS AND OTHER COMMERCIAL

14 LOANS.

15 (a) ELIMINATION OF LENDING LIMIT ON SMALL BUSI16 NESS LOANS.—Section 5(c)(1) of the Home Owners’ Loan

17 Act (12 U.S.C. 1464(c)(1)) is amended by inserting after

18 subparagraph (V) (as added by section 208 of this title)

19 the following new subparagraph:

20 ‘‘(W) SMALL BUSINESS LOANS.—Small

21 business loans, as defined in regulations which

22 the Director shall prescribe.’’

23 (b) INCREASE IN LENDING LIMIT ON OTHER BUSINESS

24 LOANS.—Section 5(c)(2)(A) of the Home Owners’ Loan Act

25 (12 U.S.C. 1464(c)(2)(A)) is amended by striking ‘‘, and


3951.ABA
45

27

1 amounts in excess of 10 percent’’ and all that follows

2 through ‘‘by the Director’’.

3 SEC. 213. CLARIFYING CITIZENSHIP OF FEDERAL SAVINGS

4 ASSOCIATIONS FOR FEDERAL COURT JURIS5 DICTION.

6 Section 5 of the Home Owners’ Loan Act (12 U.S.C.

7 1464) is amended by adding at the end the following new

8 subsection:

9 ‘‘(x) HOME STATE CITIZENSHIP.—In determining

10 whether a Federal court has diversity jurisdiction over a

11 case in which a Federal savings association is a party, the

12 Federal savings association shall be considered to be a cit13 izen only of the State in which such savings association

14 has its main office.’’.

15 SEC. 214. CLARIFICATION OF APPLICABILITY OF CERTAIN

16 PROCEDURAL DOCTRINES.

17 Section 11A(d) of the Federal Deposit Insurance Act

18 (12 U.S.C. 1821a(d)) is amended—

19 (1) by striking ‘‘LEGAL PROCEEDINGS.—Any

20 judgment’’ and inserting ‘‘LEGAL PROCEEDINGS.—

21 ‘‘(1) IN GENERAL.—Any judgment’’; and

22 (2) by adding at the end the following new para23 graph:

24 ‘‘(2) CLARIFICATION OF APPLICABILITY OF CER25 TAIN PROCEDURAL DOCTRINES.—In any proceeding


3951.ABB
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28

1 seeking a monetary recovery against the United

2 States, or an agency or official thereof, based upon

3 actions of the Federal Savings and Loan Insurance

4 Corporation prior to its dissolution, or the Federal

5 Home Loan Bank Board prior to its dissolution, and

6 arising from the Financial Institutions Reform, Re7 covery, and Enforcement Act of 1989 or its implemen8 tation, and where any monetary recovery in such pro9 ceeding would be paid from the FSLIC Resolution

10 Fund or any supplements thereto, neither the United

11 States Court of Federal Claims, the United States

12 Court of Appeals for the Federal Circuit, nor any

13 other court of competent jurisdiction shall dismiss, or

14 affirm on appeal the dismissal of, the claims of any

15 party seeking such monetary recovery, on the basis of

16 res judicata, collateral estoppel, or any similar doc17 trine, defense, or rule of law, based upon any deci18 sion, opinion, or order of judgment entered by any

19 court prior to July 1, 1996. Unless some other defense

20 is applicable, in any such proceeding, the United

21 States Court of Federal Claims, the United States

22 Court of Appeals for the Federal Circuit, and any

23 other court of competent jurisdiction shall review the

24 merits of the claims of the party seeking such mone25 tary relief and shall enter judgment accordingly.’’.


3951.ABC
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29

1 TITLE III—CREDIT UNION

2 PROVISIONS

3 SEC. 301. PRIVATELY INSURED CREDIT UNIONS AUTHOR4 IZED TO BECOME MEMBERS OF A FEDERAL

5 HOME LOAN BANK.

6 (a) IN GENERAL.—Section 4(a) of the Federal Home

7 Loan Bank Act (12 U.S.C. 1424(a)) is amended by adding

8 at the end the following new paragraph:

9 ‘‘(5) CERTAIN PRIVATELY INSURED CREDIT

10 UNIONS.—

11 ‘‘(A) IN GENERAL.—A credit union which

12 has been determined, in accordance with section

13 43(e)(1) of the Federal Deposit Insurance Act

14 and subject to the requirements of subparagraph

15 (B), to meet all eligibility requirements for Fed16 eral deposit insurance shall be treated as an in17 sured depository institution for purposes of de18 termining the eligibility of such credit union for

19 membership in a Federal home loan bank under

20 paragraphs (1), (2), and (3).

21 ‘‘(B) CERTIFICATION BY APPROPRIATE SU22 PERVISOR.—

23 ‘‘(i) IN GENERAL.—For purposes of

24 this paragraph and subject to clause (ii), a

25 credit union which lacks Federal deposit inVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00047 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

3951.ABD
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30

1 surance and which has applied for member2 ship in a Federal home loan bank may be

3 treated as meeting all the eligibility require4 ments for Federal deposit insurance only if

5 the appropriate supervisor of the State in

6 which the credit union is chartered has de7 termined that the credit union meets all the

8 eligibility requirements for Federal deposit

9 insurance as of the date of the application

10 for membership.

11 ‘‘(ii) CERTIFICATION DEEMED

12 VALID.—If, in the case of any credit union

13 to which clause (i) applies, the appropriate

14 supervisor of the State in which such credit

15 union is chartered fails to make a deter16 mination pursuant to such clause by the

17 end of the 6-month period beginning on the

18 date of the application, the credit union

19 shall be deemed to have met the require20 ments of clause (i).

21 ‘‘(C) SECURITY INTERESTS OF FEDERAL

22 HOME LOAN BANK NOT AVOIDABLE.—Notwith23 standing any provision of State law authorizing

24 a conservator or liquidating agent of a credit


3951.ABE
49

31

1 union to repudiate contracts, no such provision

2 shall apply with respect to—

3 ‘‘(i) any extension of credit from any

4 Federal home loan bank to any credit union

5 which is a member of any such bank pursu6 ant to this paragraph; or

7 ‘‘(ii) any security interest in the assets

8 of such credit union securing any such ex9 tension of credit.’’.

10 (b) COPIES OF AUDITS OF PRIVATE INSURERS OF

11 CERTAIN DEPOSITORY INSTITUTIONS REQUIRED TO BE

12 PROVIDED TO SUPERVISORY AGENCIES.—Section 43(a)(2)

13 of the Federal Deposit Insurance Act (12 U.S.C.

14 1831t(a)(2)) is amended—

15 (1) by striking ‘‘and’’ at the end of subpara16 graph (A)(i);

17 (2) by striking the period at the end of clause

18 (ii) of subparagraph (A) and inserting a semicolon;

19 (3) by inserting the following new clauses at the

20 end of subparagraph (A):

21 ‘‘(iii) in the case of depository institu22 tions described in subsection (f)(2)(A) the

23 deposits of which are insured by the private

24 insurer, the National Credit Union AdminVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00049 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

3951.ABF
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32

1 istration, not later than 7 days after that

2 audit is completed; and

3 ‘‘(iv) in the case of depository institu4 tions described in subsection (f)(2)(A) the

5 deposits of which are insured by the private

6 insurer which are members of a Federal

7 home loan bank, the Federal Housing Fi8 nance Board, not later than 7 days after

9 that audit is completed.’’; and

10 (4) by adding at the end of such section 43(a)(2)

11 the following new subparagraph:

12 ‘‘(C) CONSULTATION.—The appropriate su13 pervisory agency of each State in which a pri14 vate deposit insurer insures deposits in an insti15 tution described in subsection (f)(2)(A) which—

16 ‘‘(i) lacks Federal deposit insurance;

17 and

18 ‘‘(ii) has become a member of a Fed19 eral home loan bank,

20 shall provide the National Credit Union Admin21 istration, upon request, with the results of any

22 examination and reports related thereto con23 cerning the private deposit insurer to which such

24 agency may have in its possession.’’.


3951.ABG
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33

1 SEC. 302. LEASES OF LAND ON FEDERAL FACILITIES FOR

2 CREDIT UNIONS.

3 (a) IN GENERAL.—Section 124 of the Federal Credit

4 Union Act (12 U.S.C. 1770) is amended—

5 (1) by striking ‘‘Upon application by any credit

6 union’’ and inserting ‘‘Notwithstanding any other

7 provision of law, upon application by any credit

8 union’’;

9 (2) by inserting ‘‘on lands reserved for the use of,

10 and under the exclusive or concurrent jurisdiction of,

11 the United States or’’ after ‘‘officer or agency of the

12 United States charged with the allotment of space’’;

13 (3) by inserting ‘‘lease land or’’ after ‘‘such offi14 cer or agency may in his or its discretion’’; and

15 (4) by inserting ‘‘or the facility built on the lease

16 land’’ after ‘‘credit union to be served by the allot17 ment of space’’.

18 (b) CLERICAL AMENDMENT.—The heading for section

19 124 is amended by inserting ‘‘OR FEDERAL LAND’’ after

20 ‘‘BUILDINGS’’.

21 SEC. 303. INVESTMENTS IN SECURITIES BY FEDERAL CRED22 IT UNIONS.

23 Section 107 of the Federal Credit Union Act (12

24 U.S.C. 1757) is amended—


3951.ABH
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34

1 (1) in the matter preceding paragraph (1) by

2 striking ‘‘A Federal credit union’’ and inserting ‘‘(a)

3 IN GENERAL.—Any Federal credit union’’; and

4 (2) by adding at the end the following new sub5 section:

6 ‘‘(b) INVESTMENT FOR THE CREDIT UNION’S OWN AC7 COUNT.—

8 ‘‘(1) IN GENERAL.—A Federal credit union may

9 purchase and hold for its own account such invest10 ment securities of investment grade as the Board may

11 authorize by regulation, subject to such limitations

12 and restrictions as the Board may prescribe in the

13 regulations.

14 ‘‘(2) PERCENTAGE LIMITATION.—In no event

15 may the total amount of investment securities of any

16 single obligor or maker held by a Federal credit union

17 for the credit union’s own account exceed at any time

18 an amount equal to 10 percent of the net worth of the

19 credit union.

20 ‘‘(3) INVESTMENT SECURITY DEFINED.—

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

22 subsection, the term ‘investment security’ means

23 marketable obligations evidencing the indebted24 ness of any person in the form of bonds, notes,


3951.ABI
53

35

1 or debentures and other instruments commonly

2 referred to as investment securities.

3 ‘‘(B) FURTHER DEFINITION BY BOARD.—

4 The Board may further define the term ‘invest5 ment security’.

6 ‘‘(4) INVESTMENT GRADE DEFINED.—The term

7 ‘investment grade’ means with respect to an invest8 ment security purchased by a credit union for its own

9 account, an investment security that at the time of

10 such purchase is rated in one of the 4 highest rating

11 categories by at least 1 nationally recognized statis12 tical rating organization.

13 ‘‘(5) CLARIFICATION OF PROHIBITION ON STOCK

14 OWNERSHIP.—No provision of this subsection shall be

15 construed as authorizing a Federal credit union to

16 purchase shares of stock of any corporation for the

17 credit union’s own account, except as otherwise per18 mitted by law.’’.

19 SEC. 304. INCREASE IN GENERAL 12-YEAR LIMITATION OF

20 TERM OF FEDERAL CREDIT UNION LOANS TO

21 15 YEARS.

22 Section 107(a)(5) of the Federal Credit Union Act (12

23 U.S.C. 1757(5)) (as so designated by section 303 of this

24 title) is amended—


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1 (1) in the matter preceding subparagraph (A),

2 by striking ‘‘to make loans, the maturities of which

3 shall not exceed twelve years except as otherwise pro4 vided herein’’ and inserting ‘‘to make loans, the ma5 turities of which shall not exceed 15 years or any

6 longer maturity as the Board may allow, in regula7 tions, except as otherwise provided in this Act’’;

8 (2) in subparagraph (A)—

9 (A) by striking clause (ii);

10 (B) by redesignating clauses (iii) through

11 (x) as clauses (ii) through (ix), respectively; and

12 (C) by inserting ‘‘and’’ after the semicolon

13 at the end of clause (viii) (as so redesignated).

14 SEC. 305. INCREASE IN 1 PERCENT INVESTMENT LIMIT IN

15 CREDIT UNION SERVICE ORGANIZATIONS.

16 Section 107(a)(7)(I) of the Federal Credit Union Act

17 (12 U.S.C. 1757(7)(I)) (as so designated by section 303 of

18 this title) is amended by striking ‘‘up to 1 per centum of

19 the total paid’’ and inserting ‘‘up to 3 percent of the total

20 paid’’.

21 SEC. 306. MEMBER BUSINESS LOAN EXCLUSION FOR LOANS

22 TO NONPROFIT RELIGIOUS ORGANIZATIONS.

23 Section 107A(a) of the Federal Credit Union Act (12

24 U.S.C. 1757a(a)) is amended by inserting ‘‘, excluding


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1 loans made to nonprofit religious organizations,’’ after

2 ‘‘total amount of such loans’’.

3 SEC. 307. CHECK CASHING AND MONEY TRANSFER SERV4 ICES OFFERED WITHIN THE FIELD OF MEM5 BERSHIP.

6 Paragraph (12) of section 107(a) of the Federal Credit

7 Union Act (12 U.S.C. 1757(12)) (as so designated by sec8 tion 303 of this title) is amended to read as follows:

9 ‘‘(12) in accordance with regulations prescribed

10 by the Board—

11 ‘‘(A) to sell, to persons in the field of mem12 bership, negotiable checks (including travelers

13 checks), money orders, and other similar money

14 transfer instruments (including electronic fund

15 transfers); and

16 ‘‘(B) to cash checks and money orders and

17 receive electronic fund transfers for persons in

18 the field of membership for a fee;’’.

19 SEC. 308. VOLUNTARY MERGERS INVOLVING MULTIPLE

20 COMMON-BOND CREDIT UNIONS.

21 Section 109(d)(2) of the Federal Credit Union Act (12

22 U.S.C. 1759(d)(2) is amended—

23 (1) by striking ‘‘or’’ at the end of clause (ii) of

24 subparagraph (B);


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1 (2) by striking the period at the end of subpara2 graph (C) and inserting ‘‘; or’’; and

3 (3) by adding at the end the following new sub4 paragraph:

5 ‘‘(D) a merger involving any such Federal

6 credit union approved by the Board on or after

7 August 7, 1998.’’.

8 SEC. 309. CONVERSIONS INVOLVING COMMON-BOND CRED9 IT UNIONS.

10 Section 109(g) of the Federal Credit Union Act (12

11 U.S.C. 1759(g)) is amended by inserting after paragraph

12 (2) the following new paragraph:

13 ‘‘(3) CRITERIA FOR CONTINUED MEMBERSHIP OF

14 CERTAIN MEMBER GROUPS IN COMMUNITY CHARTER

15 CONVERSIONS.—In the case of a voluntary conversion

16 of a common-bond credit union described in para17 graph (1) or (2) of subsection (b) into a community

18 credit union described in subsection (b)(3), the Board

19 shall prescribe, by regulation, the criteria under

20 which the Board may determine that a member group

21 or other portion of a credit union’s existing member22 ship, that is located outside the well-defined local

23 community, neighborhood, or rural district that shall

24 constitute the community charter, can be satisfacVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00056 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

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1 torily served by the credit union and remain within

2 the community credit union’s field of membership.’’.

3 SEC. 310. CREDIT UNION GOVERNANCE.

4 (a) EXPULSION OF MEMBERS FOR JUST CAUSE.—

5 Subsection (b) of section 118 of the Federal Credit Union

6 Act (12 U.S.C. 1764(b)) is amended to read as follows:

7 ‘‘(b) POLICY AND ACTIONS OF BOARDS OF DIRECTORS

8 OF FEDERAL CREDIT UNIONS.—

9 ‘‘(1) EXPULSION OF MEMBERS FOR NONPARTICI10 PATION OR FOR JUST CAUSE.—The board of directors

11 of a Federal credit union may, by majority vote of a

12 quorum of directors, adopt and enforce a policy with

13 respect to expulsion from membership, by a majority

14 vote of such board of directors, based on just cause,

15 including disruption of credit union operations, or on

16 nonparticipation by a member in the affairs of the

17 credit union.

18 ‘‘(2) WRITTEN NOTICE OF POLICY TO MEM19 BERS.—If a policy described in paragraph (1) is

20 adopted, written notice of the policy as adopted and

21 the effective date of such policy shall be provided to—

22 ‘‘(A) each existing member of the credit

23 union not less than 30 days prior to the effective

24 date of such policy; and


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1 ‘‘(B) each new member prior to or upon ap2 plying for membership.’’.

3 (b) TERM LIMITS AUTHORIZED FOR BOARD MEMBERS

4 OF FEDERAL CREDIT UNIONS.—Section 111(a) of the Fed5 eral Credit Union Act (12 U.S.C. 1761(a)) is amended by

6 adding at the end the following new sentence: ‘‘The bylaws

7 of a Federal credit union may limit the number of consecu8 tive terms any person may serve on the board of directors

9 of such credit union.’’.

10 (c) REIMBURSEMENT FOR LOST WAGES DUE TO

11 SERVICE ON CREDIT UNION BOARD NOT TREATED AS COM12 PENSATION.—Section 111(c) of the Federal Credit Union

13 Act (12 U.S.C. 1761(c)) is amended by inserting ‘‘, includ14 ing lost wages,’’ after ‘‘the reimbursement of reasonable ex15 penses’’.

16 SEC. 311. PROVIDING THE NATIONAL CREDIT UNION AD17 MINISTRATION WITH GREATER FLEXIBILITY

18 IN RESPONDING TO MARKET CONDITIONS.

19 Section 107(a)(5)(A)(vi)(I) of the Federal Credit

20 Union Act (12 U.S.C. 1757(5)(A)(vi)(I)) (as so designated

21 by section 303 of this title) is amended by striking ‘‘six22 month period and that prevailing interest rate levels’’ and

23 inserting ‘‘6-month period or that prevailing interest rate

24 levels’’.


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1 TITLE IV—DEPOSITORY

2 INSTITUTION PROVISIONS

3 SEC. 401. EASING RESTRICTIONS ON INTERSTATE BRANCH4 ING AND MERGERS.

5 (a) DE NOVO INTERSTATE BRANCHES OF NATIONAL

6 BANKS.—

7 (1) IN GENERAL.—Section 5155(g)(1) of the Re8 vised Statutes of the United States (12 U.S.C.

9 36(g)(1)) is amended by striking ‘‘maintain a branch

10 if—’’ and all that follows through the end of subpara11 graph (B) and inserting ‘‘maintain a branch.’’.

12 (2) CLERICAL AMENDMENT.—The heading for

13 subsection (g) of section 5155 of the Revised Statutes

14 of the United States is amended by striking ‘‘STATE

15 ‘OPT-IN’ ELECTION TO PERMIT’’.

16 (b) DE NOVO INTERSTATE BRANCHES OF STATE NON17 MEMBER BANKS.—

18 (1) IN GENERAL.—Section 18(d)(4)(A) of the

19 Federal Deposit Insurance Act (12 U.S.C.

20 1828(d)(4)(A)) is amended by striking ‘‘maintain a

21 branch if—’’ and all that follows through the end of

22 clause (ii) and inserting ‘‘maintain a branch.’’.

23 (2) CLERICAL AMENDMENT.—The heading for

24 paragraph (4) of section 18(d) of the Federal Deposit

25 Insurance Act is amended by striking ‘‘STATE ‘OPTVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00059 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

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1 IN’ ELECTION TO PERMIT INTERSTATE’’ and inserting

2 ‘‘INTERSTATE’’.

3 (c) DE NOVO INTERSTATE BRANCHES OF STATE MEM4 BER BANKS.—The 3rd undesignated paragraph of section

5 9 of the Federal Reserve Act (12 U.S.C. 321) is amended

6 by adding at the end the following new sentences: ‘‘A State

7 member bank may establish and operate a de novo branch

8 in a host State (as such terms are defined in section 18(d)

9 of the Federal Deposit Insurance Act) on the same terms

10 and conditions and subject to the same limitations and re11 strictions as are applicable to the establishment of a de novo

12 branch of a national bank in a host State under section

13 5155(g) of the Revised Statutes of the United States. Such

14 section 5155(g) shall be applied for purposes of the pre15 ceding sentence by substituting ‘Board of Governors of the

16 Federal Reserve System’ for ‘Comptroller of the Currency’

17 and ‘State member bank’ for ‘national bank’.’’.

18 (d) INTERSTATE MERGER OF BANKS.—

19 (1) MERGER OF INSURED BANK WITH ANOTHER

20 DEPOSITORY INSTITUTION OR TRUST COMPANY.—Sec21 tion 44(a)(1) of the Federal Deposit Insurance Act

22 (12 U.S.C. 1831u(a)(1)) is amended)—

23 (A) by striking ‘‘Beginning on June 1,

24 1997, the’’ and inserting ‘‘The’’; and


3951.ABQ
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1 (B) by striking ‘‘insured banks with dif2 ferent home States’’ and inserting ‘‘an insured

3 bank and another insured depository institution

4 or trust company with a different home State

5 than the resulting insured bank’’.

6 (2) NATIONAL BANK TRUST COMPANY MERGER

7 WITH OTHER TRUST COMPANY.—Subsection (b) of sec8 tion 4 of the National Bank Consolidation and Merg9 er Act (12 U.S.C. 215a–1(b)) is amended to read as

10 follows:

11 ‘‘(b) MERGER OF NATIONAL BANK TRUST COMPANY

12 WITH ANOTHER TRUST COMPANY.—A national bank that

13 is a trust company may engage in a consolidation or merg14 er under this Act with any trust company with a different

15 home State, under the same terms and conditions that

16 would apply if the trust companies were located within the

17 same State.’’.

18 (e) INTERSTATE FIDUCIARY ACTIVITY.—Section 18(d)

19 of the Federal Deposit Insurance Act (12 U.S.C. 1828(d))

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

22 ‘‘(5) INTERSTATE FIDUCIARY ACTIVITY.—

23 ‘‘(A) AUTHORITY OF STATE BANK SUPER24 VISOR.—The State bank supervisor of a State

25 bank may approve an application by the State


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1 bank, when not in contravention of home State

2 or host State law, to act as trustee, executor, ad3 ministrator, registrar of stocks and bonds,

4 guardian of estates, assignee, receiver, committee

5 of estates of lunatics, or in any other fiduciary

6 capacity in a host State in which State banks or

7 other corporations which come into competition

8 with national banks are permitted to act under

9 the laws of such host State.

10 ‘‘(B) NONCONTRAVENTION OF HOST STATE

11 LAW.—Whenever the laws of a host State author12 ize or permit the exercise of any or all of the

13 foregoing powers by State banks or other cor14 porations which compete with national banks,

15 the granting to and the exercise of such powers

16 by a State bank as provided in this paragraph

17 shall not be deemed to be in contravention of host

18 State law within the meaning of this paragraph.

19 ‘‘(C) STATE BANK INCLUDES TRUST COMPA20 NIES.—For purposes of this paragraph, the term

21 ‘State bank’ includes any State-chartered trust

22 company (as defined in section 44(g)).

23 ‘‘(D) OTHER DEFINITIONS.—For purposes

24 of this paragraph, the term ‘home State’ and


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1 ‘host State’ have the meanings given such terms

2 in section 44.’’.

3 (f) TECHNICAL AND CONFORMING AMENDMENTS.—

4 (1) Section 44 of the Federal Deposit Insurance

5 Act (12 U.S.C. 1831u) is amended—

6 (A) in subsection (a)—

7 (i) by striking paragraph (4) and in8 serting the following new paragraph:

9 ‘‘(4) TREATMENT OF BRANCHES IN CONNECTION

10 WITH CERTAIN INTERSTATE MERGER TRANS11 ACTIONS.—In the case of an interstate merger trans12 action which involves the acquisition of a branch of

13 an insured depository institution or trust company

14 without the acquisition of the insured depository in15 stitution or trust company, the branch shall be treat16 ed, for purposes of this section, as an insured deposi17 tory institution or trust company the home State of

18 which is the State in which the branch is located.’’;

19 and

20 (ii) by striking paragraphs (5) and

21 (6);

22 (B) in subsection (b)—

23 (i) by striking ‘‘bank’’ each place such

24 term appears in paragraph (2)(B)(i) and


3951.ABT
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1 inserting ‘‘insured depository institution or

2 trust company’’;

3 (ii) by striking ‘‘banks’’ where such

4 term appears in paragraph (2)(E) and in5 serting ‘‘insured depository institutions or

6 trust companies’’;

7 (iii) by striking ‘‘bank affiliate’’ each

8 place such term appears in that portion of

9 paragraph (3) that precedes subparagraph

10 (A) and inserting ‘‘insured depository insti11 tution affiliate’’;

12 (iv) by striking ‘‘any bank’’ where such

13 term appears in paragraph (3)(B) and in14 serting ‘‘any insured depository institu15 tion’’;

16 (v) by striking ‘‘bank’’ where such term

17 appears in paragraph (4)(A) and inserting

18 ‘‘insured depository institution and trust

19 company’’; and

20 (vi) by striking ‘‘all banks’’ where such

21 term appears in paragraph (5) and insert22 ing ‘‘all insured depository institutions and

23 trust companies’’;


3951.ABU
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1 (C) in subsection (d)(1), by striking ‘‘any

2 bank’’ and inserting ‘‘any insured depository in3 stitution or trust company’’;

4 (D) in subsection (e)—

5 (i) by striking ‘‘1 or more banks’’ and

6 inserting ‘‘1 or more insured depository in7 stitutions’’; and

8 (ii) by striking ‘‘paragraph (2), (4), or

9 (5)’’ and inserting ‘‘paragraph (2)’’;

10 (E) by striking clauses (i) and (ii) of sub11 section (g)(4)(A) and inserting the following new

12 clauses:

13 ‘‘(i) with respect to a national bank or

14 Federal savings association, the State in

15 which the main office of the bank or savings

16 association is located; and

17 ‘‘(ii) with respect to a State bank,

18 State savings association, or State-chartered

19 trust company, the State by which the bank,

20 savings association, or trust company is

21 chartered; and’’;

22 (F) by striking paragraph (5) of subsection

23 (g) and inserting the following new paragraph:

24 ‘‘(5) HOST STATE.—The term ‘host State’

25 means—


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1 ‘‘(A) with respect to an insured depository

2 institution, a State, other than the home State of

3 the depository institution, in which the deposi4 tory institution maintains, or seeks to establish

5 and maintain, a branch; and

6 ‘‘(B) with respect to a trust company, a

7 State, other than the home State of the trust

8 company, in which the trust company acts, or

9 seeks to act, in 1 or more fiduciary capacities.’’;

10 (G) in subsection (g)(10), by striking ‘‘sec11 tion 18(c)(2)’’ and inserting ‘‘paragraph (1) or

12 (2) of section 18(c), as appropriate,’’; and

13 (H) in subsection (g), by adding at the end

14 the following new paragraph:

15 ‘‘(12) TRUST COMPANY.—The term ‘trust com16 pany’ means—

17 ‘‘(A) any national bank;

18 ‘‘(B) any savings association; and

19 ‘‘(C) any bank, banking association, trust

20 company, savings bank, or other banking institu21 tion which is incorporated under the laws of any

22 State,

23 that is authorized to act in 1 or more fiduciary ca24 pacities but is not in the business of receiving deposits

25 other than trust funds (as defined in section 3(p)).’’.


3951.ABW
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1 (2) Section 3(d) of the Bank Holding Company

2 Act of 1956 (12 U.S.C. 1842(d)) is amended—

3 (A) in paragraph (1)—

4 (i) by striking subparagraphs (B) and

5 (C); and

6 (ii) by redesignating subparagraph (D)

7 as subparagraph (B); and

8 (B) in paragraph (5), by striking ‘‘subpara9 graph (B) or (D)’’ and inserting ‘‘subparagraph

10 (B)’’.

11 (3) Subsection (c) of section 4 of the National

12 Bank Consolidation and Merger Act (12 U.S.C. 215a–

13 1(c)) is amended to read as follows:

14 ‘‘(c) DEFINITIONS.—For purposes of this section, the

15 terms ‘home State’, ‘out-of-State bank’, and ‘trust company’

16 each have same meaning as in section 44(g) of the Federal

17 Deposit Insurance Act.

18 (g) CLERICAL AMENDMENTS.—

19 (1) The heading for section 44(b)(2)(E) of the

20 Federal Deposit Insurance Act (12 U.S.C.

21 1831u(b)(2)(E)) is amended by striking ‘‘BANKS’’ and

22 inserting ‘‘INSURED DEPOSITORY INSTITUTIONS AND

23 TRUST COMPANIES’’.

24 (2) The heading for section 44(e) of the Federal

25 Deposit Insurance Act (12 U.S.C. 1831u(e)) is


3951.ABX
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1 amended by striking ‘‘BANKS’’ and inserting ‘‘IN2 SURED DEPOSITORY INSTITUTIONS’’.

3 SEC. 402. STATUTE OF LIMITATIONS FOR JUDICIAL REVIEW

4 OF APPOINTMENT OF A RECEIVER FOR DE5 POSITORY INSTITUTIONS.

6 (a) NATIONAL BANKS.—Section 2 of the National

7 Bank Receivership Act (12 U.S.C. 191) is amended—

8 (1) by striking ‘‘SECTION 2. The Comptroller of

9 the Currency’’ and inserting the following:

10 ‘‘SEC. 2. APPOINTMENT OF RECEIVER FOR A NATIONAL

11 BANK.

12 ‘‘(a) IN GENERAL.—The Comptroller of the Currency’’;

13 and

14 (2) by adding at the end the following new sub15 section:

16 ‘‘(b) JUDICIAL REVIEW.—If the Comptroller of the

17 Currency appoints a receiver under subsection (a), the na18 tional bank may, within 30 days thereafter, bring an action

19 in the United States district court for the judicial district

20 in which the home office of such bank is located, or in the

21 United States District Court for the District of Columbia,

22 for an order requiring the Comptroller of the Currency to

23 remove the receiver, and the court shall, upon the merits,

24 dismiss such action or direct the Comptroller of the Cur25 rency to remove the receiver.’’.


3951.ABY
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1 (b) INSURED DEPOSITORY INSTITUTIONS.—Section

2 11(c)(7) of the Federal Deposit Insurance Act (12 U.S.C.

3 1821(c)(7)) is amended to read as follows:

4 ‘‘(7) JUDICIAL REVIEW.—If the Corporation is

5 appointed (including the appointment of the Corpora6 tion as receiver by the Board of Directors) as conser7 vator or receiver of a depository institution under

8 paragraph (4), (9), or (10), the depository institution

9 may, within 30 days thereafter, bring an action in

10 the United States district court for the judicial dis11 trict in which the home office of such depository insti12 tution is located, or in the United States District

13 Court for the District of Columbia, for an order re14 quiring the Corporation to be removed as the conser15 vator or receiver (regardless of how such appointment

16 was made), and the court shall, upon the merits, dis17 miss such action or direct the Corporation to be re18 moved as the conservator or receiver.’’.

19 (c) EXPANSION OF PERIOD FOR CHALLENGING THE

20 APPOINTMENT OF A LIQUIDATING AGENT.—Subparagraph

21 (B) of section 207(a)(1) of the Federal Credit Union Act

22 (12 U.S.C. 1787(a)(1)) is amended by striking ‘‘10 days’’

23 and inserting ‘‘30 days’’.

24 (d) EFFECTIVE DATE.—The amendments made by

25 subsections (a), (b), and (c) shall apply with respect to conVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00069 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

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1 servators, receivers, or liquidating agents appointed on or

2 after the date of the enactment of this Act.

3 SEC. 403. REPORTING REQUIREMENTS RELATING TO IN4 SIDER LENDING.

5 (a) REPORTING REQUIREMENTS REGARDING LOANS

6 TO EXECUTIVE OFFICERS OF MEMBER BANKS.—Section

7 22(g) of the Federal Reserve Act (12 U.S.C. 375a) is

8 amended—

9 (1) by striking paragraphs (6) and (9); and

10 (2) by redesignating paragraphs (7), (8), and

11 (10) as paragraphs (6), (7), and (8), respectively.

12 (b) REPORTING REQUIREMENTS REGARDING LOANS

13 FROM CORRESPONDENT BANKS TO EXECUTIVE OFFICERS

14 AND SHAREHOLDERS OF INSURED BANKS.—Section

15 106(b)(2) of the Bank Holding Company Act Amendments

16 of 1970 (12 U.S.C. 1972(2)) is amended—

17 (1) by striking subparagraph (G); and

18 (2) by redesignating subparagraphs (H) and (I)

19 as subparagraphs (G) and (H), respectively.


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1 SEC. 404. AMENDMENT TO PROVIDE AN INFLATION ADJUST2 MENT FOR THE SMALL DEPOSITORY INSTITU3 TION EXCEPTION UNDER THE DEPOSITORY

4 INSTITUTION MANAGEMENT INTERLOCKS

5 ACT.

6 Section 203(1) of the Depository Institution Manage7 ment Interlocks Act (12 U.S.C. 3202(1)) is amended by

8 striking ‘‘$20,000,000’’ and inserting ‘‘$100,000,000’’.

9 SEC. 405. ENHANCING THE SAFETY AND SOUNDNESS OF IN10 SURED DEPOSITORY INSTITUTIONS.

11 (a) CLARIFICATION RELATING TO THE ENFORCE12 ABILITY OF AGREEMENTS AND CONDITIONS.—The Federal

13 Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended

14 by adding at the end the following new section:

15 ‘‘SEC. 49. ENFORCEMENT OF AGREEMENTS.

16 ‘‘(a) IN GENERAL.—Notwithstanding clause (i) or (ii)

17 of section 8(b)(6)(A) or section 38(e)(2)(E), an appropriate

18 Federal banking agency may enforce, under section 8, the

19 terms of—

20 ‘‘(1) any condition imposed in writing by the

21 agency on a depository institution or an institution22 affiliated party (including a bank holding company)

23 in connection with any action on any application,

24 notice, or other request concerning a depository insti25 tution; or


3951.ACB
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1 ‘‘(2) any written agreement entered into between

2 the agency and an institution-affiliated party (in3 cluding a bank holding company).

4 ‘‘(b) RECEIVERSHIPS AND CONSERVATORSHIPS.—After

5 the appointment of the Corporation as the receiver or con6 servator for any insured depository institution, the Cor7 poration may enforce any condition or agreement described

8 in paragraph (1) or (2) of subsection (a) involving such

9 institution or any institution-affiliated party (including a

10 bank holding company), through an action brought in an

11 appropriate United States district court.’’.

12 (b) PROTECTION OF CAPITAL OF INSURED DEPOSI13 TORY INSTITUTIONS.—Paragraph (1) of section 18(u) of the

14 Federal Deposit Insurance Act (12 U.S.C. 1828(u)) is

15 amended by striking subparagraph (B) and by redesig16 nating subparagraph (C) as subparagraph (B).

17 SEC. 406. INVESTMENTS BY INSURED SAVINGS ASSOCIA18 TIONS IN BANK SERVICE COMPANIES AU19 THORIZED.

20 (a) IN GENERAL.—Sections 2 and 3 of the Bank Serv21 ice Company Act (12 U.S.C. 1862, 1863) are each amended

22 by striking ‘‘insured bank’’ each place such term appears

23 and inserting ‘‘insured depository institution’’.

24 (b) TECHNICAL AND CONFORMING AMENDMENTS.—


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1 (1) Section 1(b)(4) of the Bank Service Company

2 Act (12 U.S.C. 1861(b)(4)) is amended—

3 (A) by inserting ‘‘, except when such term

4 appears in connection with the term ‘insured de5 pository institution’,’’ after ‘‘means’’; and

6 (B) by striking ‘‘Federal Home Loan Bank

7 Board’’ and inserting ‘‘Director of the Office of

8 Thrift Supervision’’.

9 (2) Section 1(b) of the Bank Service Company

10 Act (12 U.S.C. 1861(b)) is amended—

11 (A) by striking paragraph (5) and inserting

12 the following new paragraph:

13 ‘‘(5) INSURED DEPOSITORY INSTITUTION.—The

14 term ‘insured depository institution’ has the meaning

15 given the term in section 3(c) of the Federal Deposit

16 Insurance Act;’’;

17 (B) by striking ‘‘and’’ at the end of para18 graph (7);

19 (C) by striking the period at the end of

20 paragraph (8) and inserting ‘‘; and’’; and

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

22 paragraph:

23 ‘‘(9) the terms ‘State depository institution’,

24 ‘Federal depository institution’, ‘State savings asso25 ciation’ and ‘Federal savings association’ have the


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1 meanings given the terms in section 3 of the Federal

2 Deposit Insurance Act.’’.

3 (3) The 1st sentence of section 5(c)(4)(B) of the

4 Home Owners’ Loan Act (12 U.S.C. 1464(c)(4)(B)) is

5 amended by striking ‘‘by savings associations of such

6 State and by Federal associations’’ and inserting ‘‘by

7 State and Federal depository institutions’’.

8 (4) Subparagraph (A)(ii) and subparagraph

9 (B)(ii) of section 1(b)(2) of the Bank Service Com10 pany Act (12 U.S.C. 1861(b)(2)) are each amended

11 by striking ‘‘insured banks’’ and inserting ‘‘insured

12 depository institutions’’.

13 (5) Section 1(b)(8) of the Bank Service Company

14 Act (12 U.S.C. 1861(b)(8)) is further amended—

15 (A) by striking ‘‘insured bank’’ and insert16 ing ‘‘insured depository institution’’

17 (B) by striking ‘‘insured banks’’ each place

18 such term appears and inserting ‘‘insured depos19 itory institutions’’; and

20 (C) by striking ‘‘the bank’s’’ and inserting

21 ‘‘the depository institution’s’’.

22 (6) Section 2 of the Bank Service Company Act

23 (12 U.S.C. 1862) is amended by inserting ‘‘or savings

24 associations, other than the limitation on the amount

25 of investment by a Federal savings association conVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00074 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

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1 tained in section 5(c)(4)(B) of Home Owners’ Loan

2 Act’’ after ‘‘relating to banks’’.

3 (7) Section 4(c) of the Bank Service Company

4 Act (12 U.S.C. 1864(c)) is amended by inserting ‘‘or

5 State savings association’’ after ‘‘State bank’’ each

6 place such term appears.

7 (8) Section 4(d) of the Bank Service Company

8 Act (12 U.S.C. 1864(d)) is amended by inserting ‘‘or

9 Federal savings association’’ after ‘‘national bank’’

10 each place such term appears.

11 (9) Section 4(e) of the Bank Service Company

12 Act (12 U.S.C. 1864(e)) is amended to read as fol13 lows:

14 ‘‘(e) A bank service company may perform—

15 ‘‘(1) only those services that each depository in16 stitution shareholder or member is otherwise author17 ized to perform under any applicable Federal or State

18 law; and

19 ‘‘(2) such services only at locations in a State in

20 which each such shareholder or member is authorized

21 to perform such services.’’.

22 (10) Section 4(f) of the Bank Service Company

23 Act (12 U.S.C. 1864(f)) is amended by inserting ‘‘or

24 savings associations’’ after ‘‘location of banks’’.


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1 (11) Section 5 of the Bank Service Company Act

2 (12 U.S.C. 1865) is amended—

3 (A) in subsection (a)—

4 (i) by striking ‘‘insured bank’’ and in5 serting ‘‘insured depository institution’’;

6 and

7 (ii) by striking ‘‘bank’s’’ and inserting

8 ‘‘institution’s’’.

9 (B) in subsection (b), by striking ‘‘insured

10 bank’’ and inserting ‘‘insured depository institu11 tion’’; and

12 (C) in subsection (c)—

13 (i) by striking ‘‘the bank or banks’’

14 and inserting ‘‘any depository institution’’;

15 and

16 (ii) by striking ‘‘capability of the

17 bank’’ and inserting ‘‘capability of the de18 pository institution’’.

19 (12) Section 7 of the Bank Service Company Act

20 (12 U.S.C. 1867) is amended—

21 (A) in subsection (b), by striking ‘‘insured

22 bank’’ and inserting ‘‘insured depository institu23 tion’’;

24 (B) in subsection (c)—


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1 (i) by striking ‘‘a bank’’ each place

2 such term appears and inserting ‘‘a deposi3 tory institution’’; and

4 (ii) by striking ‘‘the bank’’ each place

5 such term appears and inserting ‘‘the depos6 itory institution’’.

7 SEC. 407. CROSS GUARANTEE AUTHORITY.

8 Subparagraph (A) of section 5(e)(9) of the Federal De9 posit Insurance Act (12 U.S.C. 1815(e)(9)(A)) is amended

10 to read as follows:

11 ‘‘(A) such institutions are controlled by the

12 same company; or’’.

13 SEC. 408. GOLDEN PARACHUTE AUTHORITY AND NONBANK

14 HOLDING COMPANIES.

15 Subsection (k) of section 18 of the Federal Deposit In16 surance Act (12 U.S.C. 1828(k)) is amended—

17 (1) in paragraph (2)(A), by striking ‘‘or deposi18 tory institution holding company’’ and inserting ‘‘or

19 covered company’’;

20 (2) by striking subparagraph (B) of paragraph

21 (2) and inserting the following new subparagraph:

22 ‘‘(B) Whether there is a reasonable basis to

23 believe that the institution-affiliated party is

24 substantially responsible for—


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1 ‘‘(i) the insolvency of the depository in2 stitution or covered company;

3 ‘‘(ii) the appointment of a conservator

4 or receiver for the depository institution; or

5 ‘‘(iii) the depository institution’s trou6 bled condition (as defined in the regulations

7 prescribed pursuant to section 32(f)).’’;

8 (3) in paragraph (2)(F), by striking ‘‘depository

9 institution holding company’’ and inserting ‘‘covered

10 company,’’;

11 (4) in paragraph (3) in the matter preceding

12 subparagraph (A), by striking ‘‘depository institution

13 holding company’’ and inserting ‘‘covered company’’;

14 (5) in paragraph (3)(A), by striking ‘‘holding

15 company’’ and inserting ‘‘covered company’’;

16 (6) in paragraph (4)(A)—

17 (A) by striking ‘‘depository institution hold18 ing company’’ each place such term appears and

19 inserting ‘‘covered company’’; and

20 (B) by striking ‘‘holding company’’ each

21 place such term appears (other than in connec22 tion with the term referred to in subparagraph

23 (A)) and inserting ‘‘covered company’’;


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1 (7) in paragraph (5)(A), by striking ‘‘depository

2 institution holding company’’ and inserting ‘‘covered

3 company’’;

4 (8) in paragraph (5), by adding at the end the

5 following new subparagraph:

6 ‘‘(D) COVERED COMPANY.—The term ‘cov7 ered company’ means any depository institution

8 holding company (including any company re9 quired to file a report under section 4(f)(6) of the

10 Bank Holding Company Act of 1956), or any

11 other company that controls an insured deposi12 tory institution.’’; and

13 (9) in paragraph (6)—

14 (A) by striking ‘‘depository institution hold15 ing company’’ and inserting ‘‘covered com16 pany,’’; and

17 (B) by striking ‘‘or holding company’’ and

18 inserting ‘‘or covered company’’.

19 SEC. 409. DUTY OF DEPOSITORY INSTITUTIONS TO INFORM

20 CUSTOMERS OF CERTAIN ADVERSE ACTIONS.

21 (a) INSURED DEPOSITORY INSTITUTIONS.—Section 18

22 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is

23 amended by adding at the end the following new subsection:

24 ‘‘(x) DUTY TO NOTIFY OF ADVERSE ACTION.—Any in25 sured depository institution that furnishes, to a consumer


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1 reporting agency (as defined in section 603 of the Fair

2 Credit Reporting Act), any information relating to a cus3 tomer of the depository institution that is, or may be con4 strued as being, adverse to the interests of the customer shall

5 notify the customer, at the same time the information is

6 furnished to the agency, that such information has been pro7 vided to such agency, together with a brief description of

8 such information sufficient to allow the customer to deter9 mine the accuracy or completeness of the information so

10 furnished.’’.

11 (b) INSURED CREDIT UNIONS.—Section 206 of the

12 Federal Credit Union Act (12 U.S.C. 1786) is amended by

13 adding at the end the following new subsection:

14 ‘‘(w) DUTY TO NOTIFY OF ADVERSE ACTION.—Any in15 sured credit union that furnishes, to a consumer reporting

16 agency (as defined in section 603 of the Fair Credit Report17 ing Act), any information relating to a shareholder or mem18 ber of the insured credit union that is, or may be construed

19 as being, adverse to the interests of the shareholder or mem20 ber shall notify the shareholder or member, at the same time

21 the information is furnished to the agency, that such infor22 mation has been provided to such agency, together with a

23 brief description of such information sufficient to allow the

24 shareholder or member to determine the accuracy or com25 pleteness of the information so furnished.’’.


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1 TITLE V—DEPOSITORY INSTITU2 TION AFFILIATES PROVI3 SIONS

4 SEC. 501. CLARIFICATION OF CROSS MARKETING PROVI5 SION.

6 Section 4(n)(5) of the Bank Holding Company Act of

7 1956 (12 U.S.C. 1843(n)(5)) is amended—

8 (1) in subparagraph (B), by striking ‘‘subsection

9 (k)(4)(I)’’ and inserting ‘‘subparagraph (H) or (I) of

10 subsection (k)(4)’’; and

11 (2) by adding at the end the following new sub12 paragraph:

13 ‘‘(C) THRESHOLD OF CONTROL.—Subpara14 graph (A) shall not apply with respect to a com15 pany described or referred to in clause (i) or (ii)

16 of such subparagraph if the financial holding

17 company does not own or control 25 percent or

18 more of the total equity or any class of voting se19 curities of such company.’’.

20 SEC. 502. AMENDMENT TO PROVIDE THE FEDERAL RE21 SERVE BOARD WITH DISCRETION CON22 CERNING THE IMPUTATION OF CONTROL OF

23 SHARES OF A COMPANY BY TRUSTEES.

24 Section 2(g)(2) of the Bank Holding Company Act of

25 1956 (12 U.S.C. 1841(g)(2)) is amended by inserting ‘‘, unVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00081 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

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1 less the Board determines that such treatment is not appro2 priate in light of the facts and circumstances of the case

3 and the purposes of this Act’’ before the period at the end.

4 SEC. 503. ELIMINATING GEOGRAPHIC LIMITS ON THRIFT

5 SERVICE COMPANIES.

6 (a) IN GENERAL.—The 1st sentence of section

7 5(c)(4)(B) of the Home Owners’ Loan Act (12 U.S.C.

8 1464(c)(4)(B)) (as amended by section 406(b)(3) of this

9 Act) is amended—

10 (1) by striking ‘‘corporation organized’’ and all

11 that follows through ‘‘is available for purchase’’ and

12 inserting ‘‘company, if the entire capital of the com13 pany is available for purchase’’; and

14 (2) by striking ‘‘having their home offices in

15 such State’’.

16 (b) TECHNICAL CORRECTIONS.—

17 (1) The heading for subparagraph (B) of section

18 5(c)(4) of the Home Owners’ Loan Act (12 U.S.C.

19 1464(c)(4)(B)) is amended by striking ‘‘CORPORA20 TIONS’’ and inserting ‘‘COMPANIES’’.

21 (2) The 2nd sentence of section 5(n)(1) of the

22 Home Owners’ Loan Act (12 U.S.C. 1464(n)(1)) is

23 amended by striking ‘‘service corporations’’ and in24 serting ‘‘service companies’’.


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1 (3) Section 5(q)(1) of the Home Owners’ Loan

2 Act (12 U.S.C. 1464(q)(1)) is amended by striking

3 ‘‘service corporation’’ each place such term appears in

4 subparagraphs (A), (B), and (C) and inserting ‘‘serv5 ice company’’.

6 (4) Section 10(m)(4)(C)(iii)(II) of the Home

7 Owners’ Loan Act (12 U.S.C.

8 1467a(m)(4)(C)(iii)(II)) is amended by striking

9 ‘‘service corporation’’ each place such term appears

10 and inserting ‘‘service company’’.

11 SEC. 504. CLARIFICATION OF SCOPE OF APPLICABLE RATE

12 PROVISION.

13 Section 44(f) of the Federal Deposit Insurance Act (12

14 U.S.C. 1831u(f)) is amended—

15 (1) in paragraph (1), by striking ‘‘loan or dis16 count’’ and all that follows through ‘‘the greater of—

17 ’’ and inserting ‘‘loan, discount, or credit sale made

18 or upon any note, bill of exchange, financing trans19 action, or other evidence of debt issued to or acquired

20 by any competing lender, shall be equal to not more

21 than the greater of—’’;

22 (2) in paragraph (2), by striking subparagraph

23 (A) and inserting the following:

24 ‘‘(A) the authority of any competing lender

25 to take, receive, reserve, or charge interest on any


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1 loan or credit sale made in any State other than

2 the State referred to in paragraph (1); or’’; and

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

4 ‘‘(3) DEFINITION.—For purposes of this sub5 section, the term ‘competing lender’ means—

6 ‘‘(A) any insured depository institution

7 whose home State is such State; and

8 ‘‘(B) any other person or entity engaged in

9 the business of selling or financing the sale of

10 property (and any services incidental to the sale

11 of property) in such State, except that, with re12 gard to any person or entity described in this

13 subparagraph, such term does not include any

14 person or entity engaged in the business of pro15 viding a short-term cash advance to any con16 sumer in exchange for—

17 ‘‘(i) a consumer’s personal check or

18 share draft, in the amount of the advance

19 plus a fee, where presentment or negotiation

20 of such check or share draft is deferred by

21 agreement of the parties until a designated

22 future date; or

23 ‘‘(ii) a consumer’s authorization to

24 debit the consumer’s transaction account, in

25 the amount of the advance plus a fee, where


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1 such account will be debited on or after a

2 designated future date.’’.

3 TITLE VI—BANKING AGENCY

4 PROVISIONS

5 SEC. 601. WAIVER OF EXAMINATION SCHEDULE IN ORDER

6 TO ALLOCATE EXAMINER RESOURCES.

7 Section 10(d) of the Federal Deposit Insurance Act (12

8 U.S.C. 1820(d)) is amended—

9 (1) by redesignating paragraphs (5), (6), (7),

10 (8), (9), and (10) as paragraphs (6), (7), (8), (9),

11 (10), and (11), respectively;

12 (2) by inserting after paragraph (4), the fol13 lowing new paragraph:

14 ‘‘(5) WAIVER OF SCHEDULE WHEN NECESSARY

15 TO ACHIEVE SAFE AND SOUND ALLOCATION OF EXAM16 INER RESOURCES.—Notwithstanding paragraphs (1),

17 (2), (3), and (4), an appropriate Federal banking

18 agency may make adjustments in the examination

19 cycle for an insured depository institution if nec20 essary to allocate available resources of examiners in

21 a manner that provides for the safety and soundness

22 of, and the effective examination and supervision of,

23 insured depository institutions.’’; and


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1 (3) in paragraphs (8) and (9), as so redesig2 nated, by striking ‘‘paragraph (6)’’ and inserting

3 ‘‘paragraph (7)’’.

4 SEC. 602. CREDIT CARD ACCOUNTS PERMITTED FOR BANK

5 EXAMINERS ON SAME TERMS AS OTHER CON6 SUMERS.

7 Section 212 of title 18, United States Code, is amended

8 by adding at the end the following new paragraph:

9 ‘‘With respect to any employee of a Federal banking

10 agency (as defined in section 3 of the Federal Deposit Insur11 ance Act) including any examiner or assistant examiner,

12 the provisions of this section and section 213 shall not pro13 hibit such employee from applying for, or being a card14 holder under, any credit card account under an open end

15 consumer credit plan (as such terms are defined in the

16 Truth in Lending Act), to the extent the terms and condi17 tions applicable with respect to such account, and any cred18 it extended under such account, are no more favorable to

19 the employee than the terms and conditions that are gen20 erally applicable to credit card accounts established under

21 open end consumer credit plans for other consumers.’’.

22 SEC. 603. INTERAGENCY DATA SHARING.

23 (a) FEDERAL BANKING AGENCIES.—Section 7(a)(2) of

24 the Federal Deposit Insurance Act (12 U.S.C. 1817(a)(2))


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1 is amended by adding at the end the following new subpara2 graph:

3 ‘‘(C) DATA SHARING WITH OTHER AGEN4 CIES AND PERSONS.—In addition to reports of

5 examination, reports of condition, and other re6 ports required to be regularly provided to the

7 Corporation (with respect to all insured deposi8 tory institutions, including a depository institu9 tion for which the Corporation has been ap10 pointed conservator or receiver) or an appro11 priate State bank supervisor (with respect to a

12 State depository institution) under subpara13 graph (A) or (B), a Federal banking agency

14 may, in the agency’s discretion, furnish any re15 port of examination or other confidential super16 visory information concerning any depository

17 institution or other entity examined by such

18 agency under authority of any Federal law, to—

19 ‘‘(i) any other Federal or State agency

20 or authority with supervisory or regulatory

21 authority over the depository institution or

22 other entity;

23 ‘‘(ii) to any officer, director, or receiver

24 of such depository institution or entity; and


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1 ‘‘(iii) any other person the Federal

2 banking agency determines to be appro3 priate.’’.

4 (b) NATIONAL CREDIT UNION ADMINISTRATION.—Sec5 tion 202(a) of the Federal Credit Union Act (12 U.S.C.

6 1782(a)) is amended by adding at the end the following

7 new paragraph:

8 ‘‘(8) DATA SHARING WITH OTHER AGENCIES AND

9 PERSONS.—In addition to reports of examination, re10 ports of condition, and other reports required to be

11 regularly provided to the Board (with respect to all

12 insured credit unions, including a credit union for

13 which the Corporation has been appointed conservator

14 or liquidating agent) or an appropriate State com15 mission, board, or authority having supervision of a

16 State-chartered credit union, the Board may, in the

17 Board’s discretion, furnish any report of examination

18 or other confidential supervisory information con19 cerning any credit union or other entity examined by

20 the Board under authority of any Federal law, to—

21 ‘‘(A) any other Federal or State agency or

22 authority with supervisory or regulatory author23 ity over the credit union or other entity;

24 ‘‘(B) to any officer, director, or receiver of

25 such credit union or entity; and


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1 ‘‘(C) any other institution-affiliated party

2 of such credit union or entity the Board deter3 mines to be appropriate.’’.

4 SEC. 604. PENALTY FOR UNAUTHORIZED PARTICIPATION

5 BY CONVICTED INDIVIDUAL.

6 Section 19 of the Federal Deposit Insurance Act (12

7 U.S.C. 1829) is amended by adding at the end the following

8 new subsection:

9 ‘‘(c) NONINSURED BANKS.—Subsections (a) and (b)

10 shall apply to a noninsured national bank and a non11 insured State member bank, and any agency or noninsured

12 branch (as such terms are defined in section 1(b) of the

13 International Banking Act of 1978) of a foreign bank as

14 if such bank, branch, or agency were an insured depository

15 institution, except such subsections shall be applied for pur16 poses of this subsection by substituting the agency deter17 mined under the following paragraphs for ‘Corporation’

18 each place such term appears in such subsections:

19 ‘‘(1) The Comptroller of the Currency, in the case

20 of a noninsured national bank or any Federal agency

21 or noninsured Federal branch of a foreign bank.

22 ‘‘(2) The Board of Governors of the Federal Re23 serve System, in the case of a noninsured State mem24 ber bank or any State agency or noninsured State

25 branch of a foreign bank.’’.


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1 SEC. 605. AMENDMENT PERMITTING THE DESTRUCTION OF

2 OLD RECORDS OF A DEPOSITORY INSTITU3 TION BY THE FDIC AFTER THE APPOINTMENT

4 OF THE FDIC AS RECEIVER.

5 Section 11(d)(15)(D) of the Federal Deposit Insurance

6 Act (12 U.S.C. 1821(d)(15)(D)) is amended—

7 (1) by striking ‘‘RECORDKEEPING REQUIRE8 MENT.—After the end of the 6-year period’’ and in9 serting ‘‘RECORDKEEPING REQUIREMENT.—

10 ‘‘(i) IN GENERAL.—Except as provided

11 in clause (ii), after the end of the 6-year pe12 riod’’; and

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

14 clause:

15 ‘‘(ii) OLD RECORDS.—In the case of

16 records of an insured depository institution

17 which are at least 10 years old as of the

18 date the Corporation is appointed as the re19 ceiver of such depository institution, the

20 Corporation may destroy such records in

21 accordance with clause (i) any time after

22 such appointment is final without regard to

23 the 6-year period of limitation contained in

24 such clause.’’.


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1 SEC. 606. MODERNIZATION OF FDIC RECORDKEEPING RE2 QUIREMENT.

3 Subsection (f) of section 10 of the Federal Deposit In4 surance Act (12 U.S.C. 1820(f)) is amended to read as fol5 lows:

6 ‘‘(f) PRESERVATION OF AGENCY RECORDS.—

7 ‘‘(1) IN GENERAL.— The Corporation may cause

8 any and all records, papers, or documents kept by the

9 Corporation or in the possession or custody of the

10 Corporation to be—

11 ‘‘(A) photographed or microphotographed or

12 otherwise reproduced upon film; or

13 ‘‘(B) preserved in any electronic medium or

14 format which is capable of—

15 ‘‘(i) being read or scanned by com16 puter; and

17 ‘‘(ii) being reproduced from such elec18 tronic medium or format by printing or

19 any other form of reproduction of electroni20 cally stored data.

21 ‘‘(2) TREATMENT AS ORIGINAL RECORDS.—Any

22 photographs, microphotographs, or photographic film

23 or copies thereof described in paragraph (1)(A) or re24 production of electronically stored data described in

25 paragraph (1)(B) shall be deemed to be an original

26 record for all purposes, including introduction in eviVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00091 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

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1 dence in all State and Federal courts or administra2 tive agencies and shall be admissible to prove any act,

3 transaction, occurrence, or event therein recorded.

4 ‘‘(3) AUTHORITY OF THE BOARD OF DIREC5 TORS.—Any photographs, microphotographs, or pho6 tographic film or copies thereof described in para7 graph (1)(A) or reproduction of electronically stored

8 data described in paragraph (1)(B) shall be preserved

9 in such manner as the Board of Directors shall pre10 scribe and the original records, papers, or documents

11 may be destroyed or otherwise disposed of as the

12 Board of Directors may direct.’’.

13 SEC. 607. REPEAL OF MINIMUM ANTITRUST REVIEW PERIOD

14 WITH THE AGREEMENT OF THE ATTORNEY

15 GENERAL.

16 (a) ANTITRUST REVIEWS UNDER THE BANK HOLDING

17 COMPANY ACT OF 1956.—The 4th sentence of section 11(b)

18 of the Bank Holding Company Act of 1956 (12 U.S.C.

19 1849(b) is amended by striking ‘‘, but in no event less than

20 fifteen calendar days after the date of approval’’.

21 (b) ANTITRUST REVIEWS UNDER THE FEDERAL DE22 POSIT INSURANCE ACT.—The last sentence of section

23 18(c)(6) of the Federal Deposit Insurance Act (12 U.S.C.

24 1828(c)(6)) is amended by striking ‘‘, but in no event less

25 than 15 calendar days after the date of approval’’.


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1 SEC. 608. CLARIFICATION OF EXTENT OF SUSPENSION, RE2 MOVAL, AND PROHIBITION AUTHORITY OF

3 FEDERAL BANKING AGENCIES IN CASES OF

4 CERTAIN CRIMES BY INSTITUTION-AFFILI5 ATED PARTIES.

6 (a) INSURED DEPOSITORY INSTITUTION.—

7 (1) IN GENERAL.—Section 8(g)(1) of the Federal

8 Deposit Insurance Act (12 U.S.C. 1818(g) is

9 amended—

10 (A) in subparagraph (A), by striking ‘‘the

11 depository’’ each place such term appears and

12 inserting ‘‘any depository’’;

13 (B) in subparagraph (B)(i), by inserting

14 ‘‘of which the subject of the order is an institu15 tion-affiliated party’’ before the period at the

16 end;

17 (C) in subparagraph (C), by striking ‘‘the

18 depository’’ each place such term appears and

19 inserting ‘‘any depository’’;

20 (D) in subparagraph (D)(i), by inserting

21 ‘‘of which the subject of the order is an institu22 tion-affiliated party’’ after ‘‘upon the depository

23 institution’’; and

24 (E) by adding at the end the following new

25 subparagraph:


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1 ‘‘(E) CONTINUATION OF AUTHORITY.—A

2 Federal banking agency may issue an order

3 under this paragraph with respect to an indi4 vidual who is an institution-affiliated party at

5 a depository institution at the time of an offense

6 described in subparagraph (A) without regard

7 to—

8 ‘‘(i) whether such individual is an in9 stitution-affiliated party at any depository

10 institution at the time the order is consid11 ered or issued by the agency; or

12 ‘‘(ii) whether the depository institution

13 at which the individual was an institution14 affiliated party at the time of the offense re15 mains in existence at the time the order is

16 considered or issued by the agency.’’.

17 (2) CLERICAL AMENDMENT.—Section 8(g) of the

18 Federal Deposit Insurance Act (12 U.S.C. 1818(g) is

19 amended by striking ‘‘(g)’’ and inserting the following

20 new subsection heading:

21 ‘‘(g) SUSPENSION, REMOVAL, AND PROHIBITION FROM

22 PARTICIPATION ORDERS IN THE CASE OF CERTAIN CRIMI23 NAL OFFENSES.—’’.

24 (b) INSURED CREDIT UNIONS.—


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1 (1) IN GENERAL.—Section 206(i)(1) of the Fed2 eral Credit Union Act (12 U.S.C. 1786(i)(1)) is

3 amended—

4 (A) in subparagraph (A), by striking ‘‘the

5 credit union’’ each place such term appears and

6 inserting ‘‘any credit union’’;

7 (B) in subparagraph (B)(i), by inserting

8 ‘‘of which the subject of the order is, or most re9 cently was, an institution-affiliated party’’ be10 fore the period at the end;

11 (C) in subparagraph (C), by striking ‘‘the

12 credit union’’ each place such term appears and

13 inserting ‘‘any credit union’’;

14 (D) in subparagraph (D)(i), by striking

15 ‘‘upon such credit union’’ and inserting ‘‘upon

16 the credit union of which the subject of the order

17 is, or most recently was, an institution-affiliated

18 party’’; and

19 (E) by adding at the end the following new

20 subparagraph:

21 ‘‘(E) CONTINUATION OF AUTHORITY.—The

22 Board may issue an order under this paragraph

23 with respect to an individual who is an institu24 tion-affiliated party at a credit union at the


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1 time of an offense described in subparagraph (A)

2 without regard to—

3 ‘‘(i) whether such individual is an in4 stitution-affiliated party at any credit

5 union at the time the order is considered or

6 issued by the Board; or

7 ‘‘(ii) whether the credit union at which

8 the individual was an institution-affiliated

9 party at the time of the offense remains in

10 existence at the time the order is considered

11 or issued by the Board.’’.

12 (2) CLERICAL AMENDMENT.—Section 206(i) of

13 the Federal Credit Union Act (12 U.S.C. 1786(i)) is

14 amended by striking ‘‘(i)’’ at the beginning and in15 serting the following new subsection heading:

16 ‘‘(i) SUSPENSION, REMOVAL, AND PROHIBITION FROM

17 PARTICIPATION ORDERS IN THE CASE OF CERTAIN CRIMI18 NAL OFFENSES.—’’.

19 SEC. 609. STREAMLINING DEPOSITORY INSTITUTION MERG20 ER APPLICATION REQUIREMENTS.

21 (a) IN GENERAL.—Paragraph (4) of section 18(c) of

22 the Federal Deposit Insurance Act (12 U.S.C. 1828(c)) is

23 amended to read as follows:

24 ‘‘(4) REPORTS ON COMPETITIVE FACTORS.—


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1 ‘‘(A) REQUEST FOR REPORT.—In the inter2 ests of uniform standards, before acting on any

3 application for approval of a merger trans4 action, the responsible agency, unless the agency

5 finds that it must act immediately in order to

6 prevent the probable failure of a depository insti7 tution involved, shall—

8 ‘‘(i) request a report on the competitive

9 factors involved from the Attorney General;

10 and

11 ‘‘(ii) provide a copy of the request to

12 the Corporation (when the Corporation is

13 not the responsible agency).

14 ‘‘(B) FURNISHING OF REPORT.—The report

15 requested under subparagraph (A) shall be fur16 nished by the Attorney General to the responsible

17 agency—

18 ‘‘(i) not more than 30 calendar days

19 after the date on which the Attorney Gen20 eral received the request; or

21 ‘‘(ii) not more than 10 calendar days

22 after such date, if the requesting agency ad23 vises the Attorney General that an emer24 gency exists requiring expeditious action.’’.


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1 (b) TECHNICAL AND CONFORMING AMENDMENT.—The

2 penultimate sentence of section 18(c)(6) of the Federal De3 posit Insurance Act (12 U.S.C. 1828(c)(6)) is amended to

4 read as follows: ‘‘If the agency has advised the Attorney

5 General under paragraph (4)(B) of the existence of an emer6 gency requiring expeditious action and has requested a re7 port on the competitive factors within 10 days, the trans8 action may not be consummated before the fifth calendar

9 day after the date of approval by the agency.’’.

10 SEC. 610. INCLUSION OF DIRECTOR OF THE OFFICE OF

11 THRIFT SUPERVISION IN LIST OF BANKING

12 AGENCIES REGARDING INSURANCE CUS13 TOMER PROTECTION REGULATIONS.

14 Section 47(g)(2)(B)(i) of the Federal Deposit Insur15 ance Act (12 U.S.C. 1831x(g)(2)(B)(i)) is amended by in16 serting ‘‘the Director of the Office of Thrift Supervision,’’

17 after ‘‘Comptroller of the Currency,’’.

18 TITLE VII—CLERICAL AND

19 TECHNICAL AMENDMENTS

20 SEC. 701. CLERICAL AMENDMENTS TO THE HOME OWNERS’

21 LOAN ACT.

22 (a) AMENDMENT TO TABLE OF CONTENTS.—The table

23 of contents in section 1 of the Home Owners’ Loan Act (12

24 U.S.C. 1461) is amended by striking the items relating to

25 sections 5 and 6 and inserting the following new items:


3951.ADC
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81

‘‘Sec. 5. Savings associations.

‘‘Sec. 6. [Repealed.]’’.

1 (b) CLERICAL AMENDMENTS TO HEADINGS.—

2 (1) The heading for section 4(a) of the Home

3 Owners’ Loan Act (12 U.S.C. 1463(a)) is amended by

4 striking ‘‘(a) FEDERAL SAVINGS ASSOCIATIONS.—’’

5 and inserting ‘‘(a) GENERAL RESPONSIBILITIES OF

6 THE DIRECTOR.—’’.

7 (2) The section heading for section 5 of the Home

8 Owners’ Loan Act (12 U.S.C. 1464) is amended to

9 read as follows:

10 ‘‘SEC. 5. SAVINGS ASSOCIATIONS.’’.

11 SEC. 702. TECHNICAL CORRECTIONS TO THE FEDERAL

12 CREDIT UNION ACT.

13 The Federal Credit Union Act (12 U.S.C. 1751 et seq.)

14 is amended as follows:

15 (1) In section 101(3), strike ‘‘and’’ after the

16 semicolon.

17 (2) In section 101(5), strike the terms ‘‘account

18 account’’ and ‘‘account accounts’’ each place any such

19 term appears and insert ‘‘account’’.

20 (3) In section 107(a)(5)(E) (as so designated by

21 section 303 of this Act), strike the period at the end

22 and insert a semicolon.


3951.ADD
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82

1 (4) In paragraphs (6) and (7) of section 107(a)

2 (as so designated by section 303 of this Act), strike the

3 period at the end and insert a semicolon.

4 (5) In section 107(a)(7)(D) (as so designated by

5 section 303 of this Act), strike ‘‘the Federal Savings

6 and Loan Insurance Corporation or’’.

7 (6) In section 107(a)(7)(E) (as so designated by

8 section 303 of this Act), strike ‘‘the Federal Home

9 Loan Bank Board,’’ and insert ‘‘the Federal Housing

10 Finance Board,’’.

11 (7) In section 107(a)(9) (as so designated by sec12 tion 303 of this Act), strike ‘‘subchapter III’’ and in13 sert ‘‘title III’’.

14 (8) In section 107(a)(13) (as so designated by

15 section 303 of this Act), strike the ‘‘and’’ after the

16 semicolon at the end.

17 (9) In section 109(c)(2)(i), strike ‘‘(12 U.S.C.

18 4703(16))’’.

19 (10) In section 120(h), strike ‘‘under the Act ap20 proved July 30, 1947 (6 U.S.C., secs. 6–13),’’ and in21 sert ‘‘chapter 93 of title 31, United States Code,’’.

22 (11) In section 201(b)(5), strike ‘‘section 116 of’’.

23 (12) In section 202(h)(3), strike ‘‘section

24 207(c)(1)’’ and insert ‘‘section 207(k)(1)’’.


3951.ADE
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83

1 (13) In section 204(b), strike ‘‘such others pow2 ers’’ and insert ‘‘such other powers’’.

3 (14) In section 206(e)(3)(D), strike ‘‘and’’ after

4 the semicolon at the end.

5 (15) In section 206(f)(1), strike ‘‘subsection

6 (e)(3)(B)’’ and insert ‘‘subsection (e)(3)’’.

7 (16) In section 206(g)(7)(D), strike ‘‘and sub8 section (1)’’.

9 (17) In section 206(t)(2)(B), insert ‘‘regulations’’

10 after ‘‘as defined in’’.

11 (18) In section 206(t)(2)(C), strike ‘‘material af12 fect’’ and insert ‘‘material effect’’.

13 (19) In section 206(t)(4)(A)(ii)(II), strike ‘‘or’’

14 after the semicolon at the end.

15 (20) In section 206A(a)(2)(A), strike ‘‘regulator

16 agency’’ and insert ‘‘regulatory agency’’.

17 (21) In section 207(c)(5)(B)(i)(I), insert ‘‘and’’

18 after the semicolon at the end.

19 (22) In section 207(c)(8)(D)(ii)(I), insert a clos20 ing parenthesis after ‘‘Act of 1934’’.

21 (23) In the heading for subparagraph (A) of sec22 tion 207(d)(3), strike ‘‘TO’’ and insert ‘‘WITH’’.

23 (24) In section 207(f)(3)(A), strike ‘‘category or

24 claimants’’ and insert ‘‘category of claimants’’.


3951.ADF
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84

1 (25) In section 209(a)(8), strike the period at the

2 end and insert a semicolon.

3 (26) In section 216(n), insert ‘‘any action’’ be4 fore ‘‘that is required’’.

5 (27) In section 304(b)(3), strike ‘‘the affairs or

6 such credit union’’ and insert ‘‘the affairs of such

7 credit union’’.

8 (28) In section 310, strike ‘‘section 102(e)’’ and

9 insert ‘‘section 102(d)’’.

10 SEC. 703. OTHER TECHNICAL CORRECTIONS.

11 Section 1306 of title 18, United States Code, is amend12 ed by striking ‘‘5136A’’ and inserting ‘‘5136B’’.


3951.ADG
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Chairman SENSENBRENNER. The Chair now recognizes himself 

for 5 minutes for purposes of a statement. 

This bill was reported by the Committee on Financial Services 

and was sequentially referred to the Judiciary Committee for a period not later than July 22, which is next Monday so we have to 

act on this bill today. Sections 213, 214, 402, 607, 609, and 703 are 

within the jurisdiction of this Committee and will be open for 

amendment. 

The last time Congress overhauled the regulation of America’s 

banking industry, the FIRREA law was enacted in 1989. At that 

time we were recovering from an S&L crisis which prompted Congress to develop comprehensive reform to restore the integrity and 

reliability of the banking industry. While FIRREA has generally 

been a large success, the bill addresses many shortcomings in the 

law. It is estimated that the annual cost of compliance with various 

State and Federal banking regulations is nearly $26 billion. While 

the need for effective banking regulation is absolutely necessary to 

ensure the soundness of banking institutions, enforce compliance 

with various consumer protection statutes, and combat money 

laundering and other financial crimes, this bill eliminates duplicative and unnecessary regulation. As a result, banking regulation 

will be more focused, regulators will be better prepared to conduct 

thorough and effective reviews, and banks should be able to improve productivity for the American consumer. 

The bill was carefully reviewed by the Financial Services Committee during 2 days of hearing and subsequent markup. It has received wide bipartisan support and was adopted in that Committee 

by a voice vote. It is common-sense legislation because it eliminates 

bureaucratic red tape and costly regulations that are not being utilized, and I would urge the Members to support it. 

At this point in time, I recognize the gentleman from Michigan, 

Mr. Conyers, for an opening statement. 

Mr. CONYERS. Thank you, Mr. Chairman. 

I agree with your opening statement, and I hope my colleagues 

on this side of the aisle will as well. The only thing that we would 

ask that you consider is the Waters amendment, which would—

could make this a much shorter hearing. And I don’t know if 

you——

Chairman SENSENBRENNER. Without objection, all Members may 

include opening statements in the record at this point. 

Are there amendments? And the gentleman from Alabama has 

an amendment. 

Mr. BACHUS. Thank you. 

Chairman SENSENBRENNER. For what purpose does the gentleman from Alabama seek recognition? 

Mr. BACHUS. Mr. Chairman, I have an amendment at the table, 

and I——

Chairman SENSENBRENNER. The clerk will report the amendment. 

The CLERK. Amendment to Judiciary——

Mr. CONYERS. Mr. Chairman, I reserve a point of order. 

Chairman SENSENBRENNER. A point of order is reserved. 

The CLERK. Amendment to Judiciary Committee Print to H.R. 

3951, offered by Mr. Bachus——

104

Mr. BACHUS. Mr. Chairman, I’d ask that the amendment be considered as read. 

Chairman SENSENBRENNER. Without objection, the amendment is 

considered as read. 

[The amendment follows:]

Chairman SENSENBRENNER. The gentleman from Alabama is recognized for 5 minutes on the condition that the gentleman from 

Michigan has reserved a point of order. The gentleman from Alabama is recognized. 

Mr. BACHUS. Mr. Chairman, my amendment’s very simple. It 

amends current law to give credit unions the same exemption from 

the pre-merger notification requirements of Hart-Scott-Rodino that 

banks and thrifts already enjoy. As my colleagues know, that act 

requires that certain businesses that are planning to engage in 

merger transactions must file notice with the FTC and pay a 

$45,000 filing fee. The act sets forth specific exemptions for certain 

transactions that are already subject to review and approval by 

Federal agencies other than the FTIC, including mergers involving 

banks and thrifts that are reviewed by the Federal Reserve, the 

Comptroller, the FDIC, and OTS. As with these depository institutions, when credit unions merge, the transaction is subject to reVerDate Jul 17 2002 01:43 Jul 23, 2002 Jkt 099006 PO 00000 Frm 00104 Fmt 6659 Sfmt 6601 E:\HR\OC\HR516P2.XXX pfrm12 PsN: HR516P2

A3951A.eps
105

view and approval by the Federal regulator, the National Credit 

Union Administration, which, like the FTIC, is an independent 

Federal agency. 

I have heard no one offer any justification for why credit unions 

should be treated any differently from mergers involving banks and 

thrifts. My amendment simply ensures parity of treatment among 

the various kinds of financial institutions. This amendment has the 

strong support of the NCUA board. Its chairman, appointed by the 

President, has written a letter earlier this week endorsing the 

amendment. I’d like to move that that be made a part of the 

record. 

Chairman SENSENBRENNER. Without objection. 

[The letter follows:]

106


NCUA1.eps
107

Mr. BACHUS. I would also like to thank the Federal Association 

of Federal Credit Unions and the Credit Union National Association, NAFCU and CUNA, for their support for this effort. I urge 

adoption of the amendment and reserve the balance of my time. 

Mr. WATT. Would the gentleman yield for a second? 

Mr. BACHUS. I would yield. 

Mr. WATT. I wanted to inquire, apparently the amendment is 

fairly non-controversial except that your amendment refers to 17—

12 U.S.C. 1785(b), and I’m told that the specific section that you 

want to amend would actually be 12 U.S.C. 1785(b), subparagraph 

(3), as opposed to the entire section. 

Mr. BACHUS. That’s correct. 

Mr. WATT. I am wondering if the gentleman would entertain a—

would amend his amendment to insert the reference to 1785(b)(3) 

as opposed to just 1785(b)? 

Chairman SENSENBRENNER. Will the gentleman——

Mr. BACHUS. I consider that a perfecting——

Chairman SENSENBRENNER. Would the gentleman from Alabama 

yield? When the staff is given permission to make technical and 

conforming changes, should this bill be reported out, that issue can 

be picked up and the correction made pursuant to authority. 

Mr. WATT. I think that this is a little bit more than a technical 

amendment, Mr. Chairman. This has substance to it because what 

the amendment currently does is waive all the provisions of the 

Clayton Act as opposed to just the specific pre-merger provision. So 

I don’t think the staff can do this on a technical clean-up, and so 

I would ask the gentleman if he would include the reference specifically or at least let’s make it clear that we are talking about 

1785(b)(3). 

Mr. BACHUS. We are. We’re just talking about the pre-merger notification requirement alone. So I believe that what you are proposing is consistent with what I’m attempting to do. So I would accept the——

Chairman SENSENBRENNER. Without objection, the amendment is 

so modified. 

Mr. CONYERS. Mr. Chairman? 

Chairman SENSENBRENNER. The question—does the gentleman 

from Michigan insist upon his point of order? 

Mr. CONYERS. No, sir, I do not. 

Chairman SENSENBRENNER. The reservation is withdrawn. The 

question is——


NCUA2.eps
108

Mr. CONYERS. No, wait a minute. I seek recognition. 

Chairman SENSENBRENNER. The gentleman is recognized for 5 

minutes. 

Mr. CONYERS. Thank you. 

We’re back in this ‘‘hurry up and let’s get out of here’’ stage 

today, aren’t we, Mr. Bachus? In your other Committee, we hold 

hearings on this bill, H.R. 3951. In the Judiciary Committee, we 

hold no hearings. And then on top of it, you have the concern to 

come forward with an amendment with no discussion, no warning, 

that credit unions should be exempt from the Hart-Scott-Rodino. 

Could you explain to me—— Mr. BACHUS. Now—— Mr. CONYERS. Could you explain to me why you didn’t bring it 

up in the bill that you originally introduced back in March but this 

morning, without a single hearing, you find it very timely to run 

it through? And I yield. 

Mr. BACHUS. No, I appreciate the gentleman raising that. The 

provisions in the credit union title of 3951 are all amendments to 

the Federal Credit Union Act and other banking law. And my 

amendment amends the Clayton Act, as you said, but it was not 

included in the measure that came out of the Financial Services, 

a difference to this Committee’s jurisdictional prerogative, and 

not——

Mr. CONYERS. Okay—— Mr. BACHUS.—because the Financial Services Committee had 

any concerns about the substance of the provision. 

Mr. CONYERS. All right. 

Mr. BACHUS. In fact, the Chairman has—— Mr. CONYERS. Okay, fine. Excuse me, sir. 

Mr. BACHUS. So this—— Mr. CONYERS. Now that you’ve explained why it didn’t come up 

in this Committee, could you please tell me why credit unions 

should be exempt from Hart-Scott-Rodino? 

Mr. BACHUS. Yes. All we’re exempting them from is the premerger notification requirement that the act exempted banks and 

thrifts from. So we’re not exempting them from the whole act. 

We’re simply exempting them from the requirement that they pay 

the $45,000 fee and get——

Mr. CONYERS. Okay, sir. Let me put it this way: Are you exempting them from the reporting—the credit unions from the reporting 

requirements of Hart-Scott-Rodino? 

Mr. BACHUS. No, not other than——

Mr. CONYERS. No. 

Mr. BACHUS. No. 

Mr. CONYERS. Well, then, I have a staff problem because it’s suggested from them that you are. 

Mr. BACHUS. From who? 

Chairman SENSENBRENNER. Will the gentleman from Michigan——

Mr. CONYERS. My staff. 

Chairman SENSENBRENNER. Will the gentleman from Michigan 

yield? 

Mr. CONYERS. The people that we pay to help us out. 

Chairman SENSENBRENNER. Will the gentleman from Michigan 

yield? 

109

Mr. CONYERS. Of course. 

Chairman SENSENBRENNER. I think the best way to handle this 

is while we’re voting on the journal vote is to resolve this problem. 

But the Chair notes the presence of a reporting quorum, and I 

think it would be a good idea to get the four bills that we have already debated reported out while we have a reporting quorum 

present. 

So the Chair asks unanimous consent——

Mr. WEINER. Mr. Chairman? Mr. Chairman, in light of the fact 

that several of us had amendments to bills that have already been 

considered and you want to report out now, I move the Committee 

rise. 

Chairman SENSENBRENNER. That is not in order. The motion to 

rise is not in order in a Committee session. The Chair asks——

Ms. JACKSON LEE. Mr. Chairman? 

Chairman SENSENBRENNER. The previous question has been ordered on the four bills that were called up——

Ms. JACKSON LEE. Mr. Chairman, strike the last word. 

Chairman SENSENBRENNER.—when a working quorum—the 

Committee is in recess——

Ms. JACKSON LEE. I move to reconsider the previous bills. 

Chairman SENSENBRENNER. The Committee will be in recess 

until after this vote. Members will return——

Ms. JACKSON LEE. Thank you, Mr. Chairman. 

Chairman SENSENBRENNER.—promptly, and had the Members 

been here promptly at 10 o’clock, they would have had a chance to 

offer their amendments rather than attempting to backtrack. 

[Recess.] 

Chairman SENSENBRENNER. The Committee will be in order. The 

Chair notes the presence of a reporting quorum—working quorum, 

I’m sorry, correction. 

When the Committee recessed, pending was the Bachus amendment to the bill H.R. 3951. Mr. Bachus was speaking at that time. 

The gentleman from Alabama is recognized. 

Mr. BACHUS. Mr. Chairman, exempting federally insured credit 

unions from the pre-merger notification requirements of HSR Act 

would in no way relieve credit unions from prohibitions found in 

section 1 of the Sherman Act, which outlaws every contract combination or conspiracy in restraint of trade or those found in section 2 of the Sherman Act. It would make it unlawful for a company to monopolize or attempt to monopolize trade or commerce. 

Nor would such exemption shield credit unions from section 7 of 

the Clayton Act which prohibits mergers and acquisitions in which 

the effect may be to substantially lessen competition or tend to create a monopoly. 

Credit union mergers involve institutions that hold only a small 

fraction of the deposits held for consumers in the Nation’s financial 

system—it’s actually less than 2 percent—and are, therefore, far 

less likely than mergers of banks and thrifts to raise the anti-competitive issues that Hart-Scott-Rodino review is designed to address. It makes—and this is the bottom line. It makes absolutely 

no sense to exempt banks and thrifts from this requirement and 

not credit unions, and that’s what this—this is simply an amendment to offer equity to credit unions. 

110

I yield back the balance of my time and ask for adoption of the 

amendment. 

Mr. WATT. Would the gentleman yield? 

Mr. BACHUS. I yield. 

Mr. WATT. I just wanted to revise the prior unanimous consent 

request to reflect what I understand to be what we should be technically doing, and so I would ask unanimous consent that on line 

4, after 205(b), we insert (3), and on line 5, after 1785(b), we insert 

(3). 

Chairman SENSENBRENNER. Without objection, the modification 

is agreed to. 

Mr. BACHUS. Thank you. 

Chairman SENSENBRENNER. The gentleman from Alabama. 

Mr. BACHUS. I yield back the balance of my time. 

Chairman SENSENBRENNER. The question—the gentleman from 

North Carolina, Mr. Watt? 

Mr. WATT. At the risk of prolonging this, I think Mr. Conyers 

and his staff may have had some problems about it because they 

thought this related to doing something substantially more than it 

really does. This is just a pre—a pre-exemption—pre-merger notification. It doesn’t exempt credit unions from the provisions of the 

Clayton Act. It exempts them from just one minor pre-notice provision that banks and other financial institutions are already exempt 

from. If there were controversy, it really would have been controversy about the banks and other financial institutions being exempted, not the credit unions. Most of the credit unions aren’t 

large enough to really have substantial antitrust implications, anyway. But I don’t think there’s a real problem with this, so I would 

ask bipartisan support for it. 

Chairman SENSENBRENNER. The question is on agreeing to 

the——

Ms. JACKSON LEE. I have an amendment at the desk. 

Chairman SENSENBRENNER. There is an amendment pending. Is 

this an amendment to the amendment? 

Ms. JACKSON LEE. No. I’m sorry. Thank you, Mr. Chairman. 

Chairman SENSENBRENNER. The question is on agreeing to the 

amendment offered by the gentleman from Alabama, Mr. Bachus. 

Those in favor will say aye? Opposed, no? 

The ayes appear to have it. The ayes have it and the amendment 

is agreed to. 

For what purpose does the gentlewoman from Texas seek recognition? 

Ms. JACKSON LEE. An amendment at the desk——

Chairman SENSENBRENNER. The clerk will report the amendment. 

Ms. JACKSON LEE. Ms. Waters and Ms. Jackson Lee. 

The CLERK. Amendment to Committee—to the Judiciary Committee Print of H.R. 3951, offered by Ms. Waters and Ms. Jackson 

Lee. 

Chairman SENSENBRENNER. Without objection, the amendment is 

considered as read. 

[The amendment follows:]

111

Chairman SENSENBRENNER. And the gentlewoman from Texas, 

Ms. Jackson Lee, is recognized for 5 minutes. 

Ms. JACKSON LEE. Thank you very much, Mr. Chairman. I ask 

that this amendment be studied by my colleagues. This bill is not 

a balanced bill. It gives very little to consumers while it takes away 

some of the few rights consumers have. Section 607, for example, 

repeals the current 15-day period that merging banks must well—

must wait before completing their merger. The reason behind the 

15-day period is straightforward and very important. It provides 

groups and individuals with an opportunity to challenge a merger 

before it is improved—before it’s approved. 

During the regular course of a bank merger process, both the 

Federal financial supervisory agency and the Department of Justice review the merger proposal for competitive concerns. The Federal financial agency also reviews the proposal for issues related to 

the Community Reinvestment Act and other fair lending laws. The 

Department of Justice does not undertake this second review. 

Once the Federal banking agency approves a merger, the Department of Justice has 30 days in which to challenge the merger on 

antitrust grounds. The merging banks must wait at least 15 days 

before completing their merger, regardless of whether the DOJ decides to file a suit. 

Under section 607, this minimum 35-day period would be eliminated in cases when the DOJ indicates it will not file suit challenging the merger, leaving the consumer without any relief. Unfortunately, eliminating the 15-day period also takes community 

groups, bank applicants, and other parties out of the loop. Right 

now those groups and individuals are able to file suit challenging 

the merger during the 15-day period whether or not the DOJ decides to file the suit. Eliminating that waiting period effectively removes any pre-consummation judicial review for any party. 

The 15-day waiting period provides the only tool community 

groups have to ensure that a Federal financial supervisory agency 

complies with this responsibility under the CRA. Specifically, the 

CRA requires such agencies to consider a bank merger applicant’s 

record and meet the requirements and the needs of its community. 


A3951B.eps
112

Repealing the 15-day period provides regulatory relief to banks and 

other financial institutions at the expense of their communities. I 

would appreciate our colleagues joining us in support of our 

amendment, which does nothing more than strike the provision 

that removes the 15-day waiting period. Banks preparing to complete a proposed merger will not be injured by waiting 15 days, but 

community groups and individuals who are not given the opportunity to contest a proposed merger certainly will be. 

I would think my colleagues, in light of the climate that we’re in 

as it relates to corporate reform and knowing that community 

groups are always at a disadvantage as it relates to the CRA, notice the ability to organize and to present their grievances should 

cause us to be convinced that leaving in the 15-day period is in line 

with the horrific acts of the past that we’ve seen corporate—corporate involvement. We’ve seen unclean hands come to the table, 

and I believe the 15-day period is instructive, it is helpful, it balances this bill to include relief for the consumer. And I would hope 

that we would not want to pass this bill out of Judiciary where we 

are supposed to protect the rights of consumers under the Department of Justice by not having this provision in the legislation. 

With that, I will yield back my time. 

Chairman SENSENBRENNER. The gentleman from Alabama, Mr. 

Bachus? 

Mr. BACHUS. Mr. Chairman, an identical amendment to this 

one——

Chairman SENSENBRENNER. The gentleman is recognized for 5 

minutes. 

Mr. BACHUS. Thank you. An identical amendment to this one 

was offered by Ms. Schakowsky at the Financial Services Committee markup of this legislation, and it was defeated on a rollcall 

vote. Section 607 amends the Bank Holding Company Act by eliminating an existing minimum 15-day waiting period for banks and 

bank holding companies to merge with or acquire another bank or 

bank holding company. Currently, the Bank Holding Act provides 

a 30-day waiting period which may be reduced to 15 days upon a 

concurrence of the Attorney General and the relevant banking 

agency. As a result, this section provides the Attorney General and 

Federal banking agencies more flexibility in processing acquisitions 

and mergers that do not significantly adversely—have adverse effects on competition. 

The Justice Department is supportive of the additional flexibility 

provided by this section. The provision does not preclude challenges 

to acquisitions and mergers based on CRA. It only provides for expedited processing of acquisition or merger requests that the DOJ 

and responsible bank agencies deem not to pose a significant adverse effect on competition. 

I disagree with the gentlelady on her interpretation of the provision, of this provision. She says that the provision in its current 

stage will wipe out a party’s ability—a party that think it’s aggrieved to file suit to challenge a merger order by the regulator. Actually, the provisions of the bill and the way they stand will not 

wipe out anyone’s ability to challenge a decision of merger on CRA 

grounds. 

The only preclusion will be to challenge the Justice Department 

on antitrust grounds. In fact, section 1848 of the Bank Holding 

113

Company Act gives the right for an aggrieved party to obtain a review of such an order, a merger order, and specifically will be 

maintained for CRA. So in that regard, Mr. Chairman, the purpose 

of this language, in fact, was brought to us by the Federal Reserve 

because it requires both notices as well as the Department of Justice to sign off on the antitrust issues. 

I yield back the balance of my——

Mr. CONYERS. Mr. Chairman? 

Chairman SENSENBRENNER. The gentleman from Michigan. 

Mr. CONYERS. What we’re doing here is saying that community 

organizations don’t need 15 days to review a merger. Of course, the 

Department of Justice doesn’t have any problem. They’ve got hundreds of lawyers, so 15 days one way or the other isn’t going to 

mean that much, Mr. Bachus. What it does affect, though, are consumer organizations and people in minority communities who want 

to get information of fair lending practices, and people in rural 

areas, by the way, which you have some familiarity with. They’re 

all—they’re all getting wiped out. So, I mean, we are talking a couple of weeks. 

Mr. BACHUS. Mr. Conyers, out of respect for the gentlelady from 

Texas and you——

Mr. CONYERS. And the gentlelady from California. 

Mr. BACHUS.—I don’t have any strong feelings about this amendment and would ask—I’m not going to urge its adoption because I 

have to defend the Financial Services Committee, but if I—an affirmative vote certainly wouldn’t—I don’t think it would have much 

effect. 

Chairman SENSENBRENNER. Does the gentleman from Michigan 

yield back his time? 

Mr. CONYERS. Yes, sir. 

Chairman SENSENBRENNER. The question is on agreeing to the 

amendment offered by the gentlewoman from Texas, Ms. Jackson 

Lee. Those in favor——

Ms. JACKSON LEE. California. 

Chairman SENSENBRENNER.—will say aye. Opposed, no? 

The ayes appear to have it. The ayes have it and the amendment 

is agreed to. 

Are there further amendments to the bill? If not, the Chair notes 

the presence of a reporting quorum. The question occurs on reporting the bill favorably as amended. Those in favor will say aye? Opposed, no? 

The ayes appear to have it. The ayes have it and the bill as 

amended is reported favorably. Without objection, the bill will be 

reported favorably to the House in the form of a single amendment 

in the nature of a substitute, incorporating the amendment adopted 

here today. Without objection, the Chairman is authorized to move 

to go to conference pursuant to House rules. Without objection, the 

staff is directed to make any technical and conforming changes, 

and all Members will be given 2 days, as provided by the House 

rules, in which to submit additional dissenting, supplemental, or 

minority views. 

(115)

ADDITIONAL VIEWS

We support the version of H.R. 3951 as reported out of the Committee on the Judiciary, however, we wish to provide additional 

views regarding section 607 of the bill as it was reported out of the 

Financial Services Committee. This section amends section 11(b) 

the Bank Holding Company Act of 1956, 12 U.S.C. § 1849(b), and 

section 18(c)(6) of the Federal Deposit Insurance Act, 12 U.S.C. 

§ 1828(c)(6), by eliminating the minimum waiting period for banks 

and bank holding companies to merge with or acquire other banks 

or bank holding companies. Section 607 was struck from the bill in 

the Committee on the Judiciary and we which to share our strong 

support for the decision to eliminate this provision. 

Community organizations raised strong concerns about section 

607 which repeals the pre-merger, mandatory 15-day waiting period with the Attorney General’s approval. During the course of a 

bank merger process, both the Federal financial supervisory agency 

and the Department of Justice review the merger proposal for competitive concerns. After a Federal banking agency approves a merger, DOJ has 30 days to decide whether to challenge the merger approval on antitrust grounds. At a minimum, the merging banks 

must wait 15 days before completing their merger. Currently, 

banking law allows 3rd parties (other than Federal banking agencies or DOJ) to file suit during the post-approval waiting period. As 

proposed, section 607 would eliminate the minimum 15-day waiting 

period when DOJ indicates it will not file suit challenging the 

merger approval order. 

We believe that this provision is anti-Community Reinvestment 

Act (‘‘CRA’’) and strips the organizations’ right to seek judicial review of Federal bank merger approval orders. Without such review, 

community organizations will be deprived of impartial means and 

mechanisms for ensuring that CRA performance obligations are 

taken into account when considering merger approvals. Community-based organizations use such suits to obtain information about 

the merger and ensure that the merger will not result in disproportionate branch closures in low-income or minority communities. We 

believe they play an important role in the public interest and 

would like to reaffirm our desire that the mandatory 15-day waiting period remain and that section 607, therefore, remain stricken 

from the bill.

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In addition, we must express concern about an amendment that 

was suddenly raised and passed at the mark-up that eliminates 

merger filing requirements for credit unions. Due to the small size 

and limited offices of most credit unions, we remain concerned 

about closures that could result without any input from the communities affected.

JOHN CONYERS, JR. 

WILLIAM D. DELAHUNT.

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