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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1151 Introduced in Senate (IS)]

103d CONGRESS
  1st Session
                                S. 1151

 To facilitate the flow of credit to small business by easing certain 
 regulatory burdens on depository institutions, to require analysis of 
     such burdens and their effectiveness, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                June 24 (legislative day, June 22), 1993

 Mr. Dole (for himself and Mr. D'Amato) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
 To facilitate the flow of credit to small business by easing certain 
 regulatory burdens on depository institutions, to require analysis of 
     such burdens and their effectiveness, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Crunch Relief Act of 1993''.

SEC. 2. EXEMPTION FROM LOAN DOCUMENTATION REVIEW.

    Section 10 of the Federal Deposit Insurance Act (12 U.S.C. 1820) is 
amended by adding at the end the following new subsection:
    ``(h) Exemption From Loan Documentation Review.--
            ``(1) Definitions.--For purposes of this subsection--
                    ``(A) the term `adequately capitalized' has the 
                same meaning as in section 38;
                    ``(B) the term `eligible depository institution' 
                means a depository institution that--
                            ``(i) is adequately capitalized; and
                            ``(ii) has a CAMEL or MACRO composite 
                        rating of 1 or 2 under the Uniform Financial 
                        Institutions Rating System as of the most 
                        recent examination of such institution by the 
                        appropriate Federal banking agency;
                    ``(C) the term `small business' has the meaning 
                given to such term by the Administrator of the Small 
                Business Administration;
                    ``(D) the term `small farm' has the meaning given 
                to such term by the Secretary of Agriculture; and
                    ``(E) the term `qualifying loan' means a loan to a 
                small business or a small farm that is identified by an 
                eligible depository institution under paragraph (3) and 
                that otherwise meets the requirements of this 
                subsection.
            ``(2) Exemption.--Except to the extent provided by an order 
        or regulation of an appropriate Federal banking agency, a 
        depository institution examiner may not consider the adequacy 
        of the documentation accompanying the extension of qualifying 
        loans by an eligible depository institution in making any 
        examination or evaluation of the institution under this 
        section. Qualifying loans shall be evaluated by the appropriate 
        Federal banking agency solely on the performance of such loans.
            ``(3) Qualifying loans.--An eligible depository institution 
        may identify a portion of its portfolio of loans to small 
        businesses or to small farms, in writing, as qualifying loans 
        for purposes of the exemption provided in paragraph (2).
            ``(4) Limitations.--
                    ``(A) Loan types and amounts.--A loan may not be 
                considered to be a qualifying loan if--
                            ``(i) inclusion of the loan in the total 
                        number of qualifying loans identified by an 
                        eligible depository institution would result in 
                        an aggregate value of all qualifying loans made 
                        by that institution equal to more than 40 
                        percent of the total capital of the 
                        institution;
                            ``(ii) the loan amount is more than the 
                        lesser of--
                                    ``(I) $900,000; or
                                    ``(II) 5 percent of the total 
                                capital of the eligible depository 
                                institution; or
                            ``(iii) the borrower is an executive 
                        officer, director, or principal shareholder of 
                        such institution.
                    ``(B) Adjustments.--Each appropriate Federal 
                banking agency may adjust the limitations set forth in 
                subparagraph (A), to permit eligible depository 
                institutions to make additional qualifying loans, 
                consistent with preserving the safety and soundness of 
                such institutions, in order to further promote credit 
                availability.
            ``(5) Internal documentation.--An eligible depository 
        institution shall--
                    ``(A) maintain an aggregate list or accounting 
                segregation of its qualifying loans which includes the 
                current performance status of each such loan; and
                    ``(B) fully evaluate and maintain an internal 
                record of the collectibility of each qualifying loan in 
                determining the adequacy of its allowance for loan and 
                lease losses or general valuation allowance 
                attributable to such loan.
            ``(6) Loss of eligibility.--A depository institution may 
        not identify any new qualifying loans (including loan renewals) 
        for purposes of the exemption provided in paragraph (2) at any 
        time during which it fails to meet the eligibility requirements 
        of this subsection.''.

SEC. 3. PRESIDENTIAL REVIEW AND AUTHORITY TO SUSPEND.

    (a) In General.--Not later than 30 days after the date of enactment 
of this Act, the President shall conduct a thorough review and 
evaluation of all statutory and regulatory provisions affecting insured 
depository institutions. This review shall include an analysis of--
            (1) the purposes of the provision;
            (2) the effectiveness of the provision in achieving such 
        purposes;
            (3) whether any other provision provides an alternative or 
        duplicative means of achieving those purposes;
            (4) the cost imposed by compliance with the provisions upon 
        insured depository institutions and consumers; and
            (5) the relationship between the provision, its compliance 
        costs, and the availability of credit in the United States.
    (b) Authority To Suspend.--If the President makes a determination 
described in subsection (c), the President may, by executive order, 
suspend the applicability of--
            (1) any Federal law affecting insured depository 
        institutions or depository institution holding companies (or 
        any portion thereof); and
            (2) any regulation or guideline promulgated by any of the 
        Federal banking agencies (or any portion thereof).
    (c) Determination.--The President may not suspend the applicability 
of any law, regulation, or guideline under subsection (b) unless the 
President determines that--
            (1) the Federal law, regulation, or guideline has 
        accomplished its goal and the law, regulation, or guideline is 
        therefore no longer necessary;
            (2) the law, regulation, or guideline is not as effective 
        in achieving its intended purpose as other available 
        alternatives that would impose lesser costs on financial 
        institutions, their customers, or the economy;
            (3) the cost of compliance with the law, regulation, or 
        guideline outweighs the potential benefits sought to be 
        accomplished by the law, regulation, or guideline; or
            (4) the law, regulation, or guideline has a negative impact 
        on the availability of credit in the United States which 
        outweighs the benefits sought to be accomplished by the law, 
        regulation, or guideline.
    (d) Publication and Effective Date.--A Presidential order issued 
pursuant to this section shall be published in the Federal Register, 
and shall become effective 30 days after such publication, unless the 
President, for good cause, determines that a shorter period is 
necessary and in the public interest.
    (e) Consultation.--Prior to making a determination under subsection 
(b) that a law, regulation, or guideline is to be suspended, the 
President shall consult with the Secretary of the Treasury, the 
Chairperson of the Federal Deposit Insurance Corporation, the Chairman 
of the Board of Governors of the Federal Reserve System, the 
Comptroller of the Currency, and the Director of the Office of Thrift 
Supervision.
    (f) Notification.--The President shall notify the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the Committee on 
Banking, Finance and Urban Affairs of the House of Representatives 
prior to issuing any order under subsection (b).
    (g) Restriction.--Nothing in this section authorizes the President 
to suspend any law, regulation, or guideline--
            (1) that is necessary for the safe and sound operation of 
        insured depository institutions; or
            (2) that--
                    (A) prohibits discrimination in the provision of 
                financial services based on race, sex, national origin, 
                marital status, or age;
                    (B) relates directly to the conduct of monetary 
                policy; or
                    (C) pertains to an enforcement proceeding or 
                supervisory action with respect to a particular 
                institution or party.
    (h) Sunset.--The authority of the President to suspend any law, 
regulation, or guideline under this section shall terminate on January 
1, 1997.
    (i) Incorporated Definitions.--For purposes of this section, the 
terms ``Federal banking agencies'' and ``insured depository 
institution'' have the same meanings as in section 3 of the Federal 
Deposit Insurance Act.

SEC. 4. NEW FEDERAL BANKING REGULATIONS SUBJECT TO REGULATORY IMPACT 
              ANALYSIS.

    (a) Regulatory Impact Analysis.--
            (1) In general.--No new regulation shall be promulgated by 
        an appropriate Federal banking agency until such agency has 
        conducted a regulatory impact analysis and concluded that the 
        benefits of the proposed regulation outweigh the costs of 
        implementing and complying with the regulation, including the 
        particular benefits and costs of compliance with the proposed 
        regulation for small banks.
            (2) New regulations.--For purposes of this subsection, a 
        regulation shall be considered to be ``new'' if it is 
        promulgated, modified, amended, or reissued on or after the 
        date of enactment of this Act.
    (b) Costs.--In reviewing the costs of implementing and complying 
with a proposed regulation under subsection (a), the appropriate 
Federal banking agency shall consider the impact of the proposed 
regulation on--
            (1) the national economy (including the potential for job 
        creation);
            (2) consumers;
            (3) small businesses;
            (4) small banks (including administrative and personnel 
        costs);
            (5) other users of financial services; and
            (6) new paperwork and documentation requirements.
    (c) Benefits.--In reviewing the benefits of a proposed regulation 
under subsection (a), the appropriate Federal banking agency shall 
consider the benefits of the proposed regulation to--
            (1) the public;
            (2) taxpayers; and
            (3) the overall safety and soundness of the Nation's 
        banking system.
    (d) Easing Burden on Small Banks.--In conducting the regulatory 
impact analysis under subsection (a), the appropriate Federal banking 
agency shall consider including in the proposed regulation a provision 
that eases the regulatory burden on small banks, including special 
compliance provisions.
    (e) Estimate Required.--The regulatory impact analysis required by 
subsection (a) shall include an estimate of the number of small banks 
and small businesses that will be affected by the regulation.
    (f) Definitions.--For the purposes of this section, the following 
definitions shall apply:
            (1) Incorporated definitions.--The terms ``appropriate 
        Federal banking agency'' and ``bank'', have the same meanings 
        as in section 3 of the Federal Deposit Insurance Act.
            (2) Regulatory impact analysis.--The term ``regulatory 
        impact analysis'' means a review of the potential costs and 
        benefits of a proposed regulation, and in particular, the costs 
        to small banks and their customers.
            (3) Small bank.--The term ``small bank'' means a bank or 
        savings association with total assets of not more than 
        $400,000,000.

SEC. 5. PRESUMPTION OF COMPLIANCE WITH COMMUNITY REINVESTMENT ACT.

    Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C. 
2903) is amended by adding at the end the following new subsection:
    ``(c) Safe Harbor Provision.--
            ``(1) Presumption of compliance.--In the evaluation of an 
        application for a deposit facility by a regulated financial 
        institution that has received a rating of `Satisfactory' or 
        `Outstanding' in the most recent written evaluation of its 
        record under section 807(b), the institution shall be entitled 
        to a presumption, rebuttable by clear and convincing evidence, 
        that it is meeting the credit needs of the entire community and 
        is otherwise in compliance with the requirements of this title.
            ``(2) Resolution of disputes.--The appropriate Federal 
        financial supervisory agency shall resolve any disputed 
        evaluation of compliance with this title not later than 30 days 
        after the dispute arises.''.

SEC. 6. EXTENSION OF EFFECTIVE DATE.

    Section 132 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991 (12 U.S.C. 1831p-1 note) is amended--
            (1) in subsection (b), by striking ``August 1, 1993'' and 
        inserting ``January 1, 1996''; and
            (2) by amending subsection (c) to read as follows:
    ``(c) Effective Date.--The amendment made by subsection (a) shall 
become effective on January 1, 1996.''.

SEC. 7. CONSUMER SURVEYS AND REPORT.

    (a) Surveys.--Not later than 6 months after the date of enactment 
of this Act, each of the Federal banking agencies (as defined in 
section 3 of the Federal Deposit Insurance Act) shall conduct a 
statistically valid survey of financial services consumers to determine 
the general public awareness of, perceived benefits to consumers of, 
and cost effectiveness of the Federal banking laws under which the 
agency operates that are intended for the protection of such consumers, 
including, but not limited to--
            (1) the Expedited Funds Availability Act;
            (2) the Truth in Lending Act;
            (3) the Truth in Savings Act;
            (4) the Real Estate Settlement Procedures Act of 1974;
            (5) the Home Mortgage Disclosure Act of 1975;
            (6) the Fair Credit Reporting Act;
            (7) the Equal Credit Opportunity Act;
            (8) the Community Reinvestment Act of 1977;
            (9) the Home Equity Loan Consumer Protection Act;
            (10) the Fair Credit and Charge Card Disclosure Act; and
            (11) the rules and regulations promulgated under those 
        Acts.
    (b) Report.--Not later than 30 days after completion of its survey 
under subsection (a), each of the Federal banking agencies shall submit 
a report of the results of its survey to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Banking, 
Finance and Urban Affairs of the House of Representatives.

                                 <all>
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