I

103D CONGRESS

1ST SESSION H. R. 3474

To reduce administrative requirements for insured depository institutions to

the extent consistent with safe and sound banking practices, to facilitate

the establishment of community development financial institutions, and

for other purposes.

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 9, 1993

Mr. GONZALEZ introduced the following bill; which was referred to the

Committee on Banking, Finance and Urban Affairs

A BILL

To reduce administrative requirements for insured depository

institutions to the extent consistent with safe and sound

banking practices, to facilitate the establishment of community development financial 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,

3 TITLE I—REGULATORY REFORM

4 SEC. 100. SHORT TITLE.

5 This title may be cited as the ‘‘Regulatory Reform

6 Act of 1993’’.
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1 Subtitle A—Amendments Relating

2 to the Federal Deposit Insur3 ance Corporation Improvement

4 Act of 1991

5 SEC. 101. AUDIT COSTS.

6 (a) HOLDING COMPANY AUDIT REQUIREMENTS.—

7 Section 36(i) of the Federal Deposit Insurance Act (12

8 U.S.C. 1831m(i)) is amended by striking paragraph (2)

9 and inserting the following:

10 ‘‘(2) the institution is described in 1 of the fol11 lowing subparagraphs:

12 ‘‘(A) The institution has total assets, as of

13 the beginning of such fiscal year, of less than

14 $5,000,000,000.

15 ‘‘(B) The institution has—

16 ‘‘(i) total assets, as of the beginning

17 of such fiscal year, of more than

18 $5,000,000,000 and less than

19 $9,000,000,000; and

20 ‘‘(ii) a CAMEL composite rating of 1

21 or 2 under the Uniform Financial Institu22 tions Rating System (or an equivalent rat23 ing by any such agency under a com24 parable rating system) as of the most re25 cent examination of such institution by the
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1 Corporation or the appropriate Federal

2 banking agency.

3 ‘‘(C) The institution

4 ‘‘(i) has—

5 ‘‘(I) total assets, as of the begin6 ning of such fiscal year, of more than

7 $9,000,000,000; and

8 ‘‘(II) a CAMEL composite rating

9 of 1 or 2 under the Uniform Financial

10 Institutions Rating System (or an

11 equivalent rating by any such agency

12 under a comparable rating system) as

13 of the most recent examination of

14 such institution by the Corporation or

15 the appropriate Federal banking agen16 cy; and

17 ‘‘(ii) is in compliance with the require18 ments of subsection (b) (without regard to

19 any exemption such institution may have

20 from the requirements of such subsection

21 under this subsection).

22 Notwithstanding paragraph (2), the audit committee of

23 the holding company of an institution that the Corporation

24 determines to be a large institution shall not include any

25 large customers of the institution.’’.
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1 (b) WRITTEN NOTICE OF REQUIREMENT FOR AUDIT

2 OF QUARTERLY REPORTS.—Section 36(g)(2) of the Fed3 eral Deposit Insurance Act (12 U.S.C. 1831m(g)(2)) is

4 amended by adding at the end the following new subpara5 graph:

6 ‘‘(D) NOTICE TO INSTITUTION.—The Cor7 poration shall promptly notify an insured depos8 itory institution, in writing, of a determination

9 pursuant to subparagraph (A) to require a re10 view of such institution’s quarterly financial re11 ports.’’.

12 SEC. 102. 18-MONTH EXAMINATION RULE FOR CERTAIN

13 SMALL INSTITUTIONS.

14 Section 10(d)(4) of the Federal Deposit Insurance

15 Act (12 U.S.C. 1820(d)(4)) is amended—

16 (1) in subparagraph (A), by striking

17 ‘‘$100,000,000’’ and inserting ‘‘$250,000,000’’;

18 (2) in subparagraph (C), by striking ‘‘and’’ at

19 the end;

20 (3) by redesignating subparagraph (D) as sub21 paragraph (E); and

22 (4) by inserting after subparagraph (C) the fol23 lowing new subparagraph:

24 ‘‘(D) the insured institution is not cur25 rently subject to a formal enforcement proceed-
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1 ing or order by the Corporation or the appro2 priate Federal banking agency; and’’.

3 SEC. 103. STANDARDS FOR SAFETY AND SOUNDNESS.

4 (a) ELIMINATION OF STOCK VALUATION PROVI5 SION.—Section 39(b)(1) of the Federal Deposit Insurance

6 Act (12 U.S.C. 1831p–1(b)(1), as added by section 132(a)

7 of the Federal Deposit Insurance Corporation Improve8 ments Act of 1991) is amended—

9 (1) in subparagraph (A), by adding ‘‘and’’ at

10 the end; and

11 (2) by striking subparagraph (C).

12 (b) HOLDING COMPANIES EXCLUDED FROM SCOPE

13 OF STANDARDS.—Section 39 of the Federal Deposit In14 surance Act (12 U.S.C. 1831a) is amended—

15 (1) in subsections (a) and (b), by striking ‘‘and

16 depository institution holding companies’’;

17 (2) in paragraphs (1)(A) and (2) of subsection

18 (e), by striking ‘‘or depository institution holding

19 company’’; and

20 (3) in subsection (e), by striking ‘‘or company’’

21 each place such term appears.

22 (c) ESTABLISHING STANDARDS IN GUIDELINES.—

23 Section 39(d)(1) of the Federal Deposit Insurance Act is

24 amended—
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1 (1) in the 1st sentence, by inserting ‘‘or guide2 line’’ before the period; and

3 (2) in the 2d sentence, by inserting ‘‘or guide4 lines’’ after ‘‘Such regulations’’.

5 (d) EFFECTIVE DATE.—The amendments made by

6 subsection (a) shall be construed to have the same effec7 tive date as section 39 of the Federal Deposit Insurance

8 Act, as provided in section 132(c) of the Federal Deposit

9 Insurance Corporation Improvements Act of 1991.

10 SEC. 104. CLARIFYING AMENDMENT RELATING TO DATA

11 COLLECTION.

12 Section 7(a)(9) of the Federal Deposit Insurance Act

13 (12 U.S.C. 1817(a)(9)) is amended by adding at the end

14 the following new sentence: ‘‘In prescribing reporting and

15 other requirements pursuant to this paragraph, the Cor16 poration shall minimize the regulatory burden imposed

17 upon insured depository institutions to the greatest extent

18 possible while taking into account the benefit of the infor19 mation to the Corporation in enabling the Corporation to

20 more accurately determine the total amount of insured de21 posits in the banking system.’’.
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1 Subtitle B—General Regulatory

2 Reform

3 SEC. 111. STATE REGULATION OF REAL ESTATE APPRAIS4 ALS.

5 Section 1122 of the Financial Institutions Reform,

6 Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351)

7 is amended—

8 (1) by redesignating subsections (b) through (e)

9 as subsections (c) through (f), respectively;

10 (2) by inserting after subsection (a) the follow11 ing new subsection:

12 ‘‘(b) RECIPROCITY.—The Appraisal Subcommittee

13 shall encourage the States to develop reciprocity agree14 ments that readily authorize an appraiser who—

15 ‘‘(1) is licensed or certified in 1 State; and

16 ‘‘(2) is in good standing with the State ap17 praiser certifying or licensing agency in such State,

18 to perform appraisals in other States.’’; and

19 (3) in subsection (a)—

20 (A) by redesignating paragraphs (1)

21 through (3) as subparagraphs (A) through (C),

22 and moving the left margin of such subpara23 graphs (as so redesignated) 2 ems to the right;

24 (B) by striking ‘‘PRACTICE.—A State’’ and

25 inserting ‘‘PRACTICE.—
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1 ‘‘(1) IN GENERAL.—A State’’; and

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

3 paragraph:

4 ‘‘(2) FEES FOR TEMPORARY PRACTICE.—A

5 State appraiser certifying or licensing agency shall

6 not impose excessive fees or burdensome require7 ments, as determined by the Appraisal Subcommit8 tee, for temporary practice under this subsection.’’.

9 SEC. 112. COLLATERALIZATION OF PUBLIC DEPOSITS.

10 Section 13(e) of the Federal Deposit Insurance Act

11 (12 U.S.C. 1823(e)) is amended—

12 (1) by redesignating paragraphs (1) through

13 (4) as subparagraphs (A) through (D), respectively,

14 and moving the left margin of such subparagraphs

15 (as so redesignated) 2 ems to the right;

16 (2) by striking ‘‘CORPORATION.—No agree17 ment’’ and inserting ‘‘CORPORATION.—

18 ‘‘(1) IN GENERAL.—No agreement’’; and

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

20 paragraph:

21 ‘‘(2) PUBLIC DEPOSITS.—An agreement to pro22 vide for the lawful collateralization of deposits of a

23 Federal, State, or local governmental entity or of

24 any depositor referred to in section 11(a)(2) shall

25 not be deemed to be invalid pursuant to paragraph
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1 (1)(B) solely because of changes in the collateral

2 made in accordance with such agreement that do not

3 substantially alter the degree of collateralization of

4 such deposits.’’.

5 SEC. 113. BANK DEPOSIT FINANCIAL ASSISTANCE PRO6 GRAM.

7 Effective December 19, 1994, section 7(i)(1) of the

8 Federal Deposit Insurance Act (12 U.S.C. 1817(i)(1)) is

9 amended by inserting ‘‘, or pursuant to any revocable trust

10 established under the Bank Deposit Financial Assistance

11 Program of the Department of Energy,’’ after ‘‘written

12 trust agreement’’.

13 SEC. 114. COORDINATED AND UNIFIED EXAMINATIONS.

14 Section 10(d) of the Federal Deposit Insurance Act

15 (12 U.S.C. 1820(d)) is amended by adding at the end the

16 following new paragraphs:

17 ‘‘(6) COORDINATED EXAMINATIONS.—To mini18 mize the disruptive effects of examinations on the

19 operations of insured depository institutions, each

20 appropriate Federal banking agency shall, to the ex21 tent practicable and consistent with safety and

22 soundness principles and the public interest—

23 ‘‘(A) coordinate examinations to be con24 ducted by that agency at an insured depository

25 institution and any affiliate of such institution;
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1 ‘‘(B) coordinate with the other appropriate

2 Federal banking agencies in the conduct of

3 such examinations;

4 ‘‘(C) work to coordinate the conduct of all

5 examinations made pursuant to this subsection

6 with the appropriate State bank supervisor; and

7 ‘‘(D) obtain and use copies of reports of

8 examinations of insured depository institutions

9 made by any other appropriate Federal banking

10 agency or appropriate State bank supervisor.

11 ‘‘(7) SAFETY AND SOUNDNESS EXAMS.—Not12 withstanding any provision of paragraph (6) or any

13 system established pursuant to such paragraph, any

14 appropriate Federal banking agency may conduct a

15 separate examination of an insured depository insti16 tution at any time for safety and soundness pur17 poses.’’.

18 SEC. 115. COORDINATION OF FEDERAL AND STATE RE19 PORTING REQUIREMENTS TO REDUCE DU20 PLICATIVE EFFORTS.

21 (a) STATE ACCESS TO FEDERAL AGENCY RE22 PORTS.—The 1st sentence of section 7(a)(2)(A) of the

23 Federal Deposit Insurance Act (12 U.S.C. 1817(a)(2)(A))

24 is amended by inserting ‘‘and, with respect to any State
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1 depository institution, any appropriate State bank super2 visor for such institution’’ after ‘‘The Corporation’’.

3 (b) STATE COORDINATION WITH FEDERAL REPORT4 ING REQUIREMENTS.—The Federal banking agencies and

5 State bank supervisors shall, to the greatest extent prac6 ticable—

7 (1) coordinate the number, types, and frequency

8 of reports required to be submitted to such agencies

9 and supervisors by insured depository institutions

10 and the type and amount of information required to

11 be included in such reports; and

12 (2) obtain and use copies of reports of condition

13 and other reports submitted by such institutions to

14 any such agency or supervisor.

15 SEC. 116. LIMITING POTENTIAL LIABILITY ON FOREIGN AC16 COUNTS.

17 (a) AMENDMENT TO THE FEDERAL RESERVE ACT.—

18 The Federal Reserve Act (12 U.S.C. 221 et seq.) is

19 amended by inserting after section 25B the following new

20 section:

21 ‘‘SEC. 25C. POTENTIAL LIABILITY ON FOREIGN ACCOUNTS.

22 ‘‘(a) IN GENERAL.—A member bank shall not be re23 quired to repay any deposit made at a foreign branch of

24 the bank if the branch cannot repay the deposit due to—
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1 ‘‘(1) an act of war, insurrection or civil strife;

2 or

3 ‘‘(2) an action by a foreign government or in4 strumentality (whether de jure or de facto) in the

5 country in which the branch is located,

6 unless the member bank has expressly agreed in writing

7 to repay the deposit under those circumstances.

8 ‘‘(b) REGULATIONS.—The Board may prescribe such

9 regulations as the Board may determine to be necessary

10 to carry out this section.’’.

11 (b) CONFORMING AMENDMENTS TO THE FEDERAL

12 DEPOSIT INSURANCE ACT.—

13 (1) IN GENERAL.—Section 18 of the Federal

14 Deposit Insurance Act (12 U.S.C. 1828) is amended

15 by adding at the end the following new subsection:

16 ‘‘(q) SOVEREIGN RISK.—Section 25C of the Federal

17 Reserve Act shall apply to every nonmember insured bank

18 in the same manner and to the same extent as if the

19 nonmember insured bank were a member bank.’’.

20 (2) CONFORMING AMENDMENT.—Subparagraph

21 (A) of section 3(l)(5) of the Federal Deposit Insur22 ance Act (12 U.S.C. 1813(l)(5)) is amended to read

23 as follows:

24 ‘‘(A) any obligation of a depository institu25 tion which is carried on the books and records
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1 of an office of such bank or savings association

2 located outside of any State, unless—

3 ‘‘(i) such obligation would be a deposit

4 if it were carried on the books and records

5 of the depository institution, and would be

6 payable at, an office located in any State;

7 and

8 ‘‘(ii) the contract evidencing the obli9 gation provides by express terms, and not

10 by implication, for payment at an office of

11 the depository institution located in any

12 State; and’’.

13 (c) EXISTING CLAIMS NOT AFFECTED—Section 25C

14 of the Federal Reserve Act (as added by subsection (a))

15 shall not be applied retroactively and shall not be con16 strued to affect or apply to any claim or cause of action

17 (to which such section would otherwise apply) which arises

18 from events or circumstances that occurred before the date

19 of enactment of this Act.

20 SEC. 117. EXPEDITED PROCEDURES FOR FORMING A BANK

21 HOLDING COMPANY.

22 The 2d sentence of section 3(a) of the Bank Holding

23 Company Act of 1956 (12 U.S.C. 1842(a)) is amended—

24 (1) by striking ‘‘or (B)’’ and inserting ‘‘(B)’’;

25 and
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1 (2) by inserting before the period the following:

2 ‘‘; or (C) the acquisition, by a company, of control

3 of a bank in a reorganization in which a person or

4 group of persons exchange their shares of the bank

5 for shares of a newly formed bank holding company

6 and receive after the reorganization substantially the

7 same proportional share interest in the holding com8 pany as they held in the bank except for changes in

9 shareholders’ interests resulting from the exercise of

10 dissenting shareholders’ rights under State or Fed11 eral law if—

12 ‘‘(i) immediately following the acquisi13 tion—

14 ‘‘(I) the bank holding company

15 meets the capital and other financial

16 standards prescribed by the Board by

17 regulation for such a bank holding

18 company; and

19 ‘‘(II) the bank is adequately cap20 italized (as defined in section 38 of

21 the Federal Deposit Insurance Act);

22 ‘‘(ii) the holding company does not en23 gage in any activities other than those of

24 managing and controlling banks as a result

25 of the reorganization;
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1 ‘‘(iii) the company provides 30 days

2 prior notice to the Board and the Board

3 does not object to such transaction during

4 such 30-day period; and

5 ‘‘(iv) the holding company will not ac6 quire control of any additional bank as a

7 result of the reorganization.’’.

8 SEC. 118. FLEXIBILITY IN CHOOSING BOARDS OF DIREC9 TORS.

10 Section 5146 of the Revised Statutes (12 U.S.C. 72)

11 is amended in the 1st sentence, by striking ‘‘two thirds’’

12 and inserting ‘‘a majority’’.

13 SEC. 119. REPEAL OF OBSOLETE REQUIREMENTS FOR NA14 TIONAL BANKS.

15 (a) REPEAL OF PROVISIONS IN THE REVISED STAT16 UTES.—The following sections of the Revised Statutes are

17 hereby repealed:

18 (1) Section 5170 (12 U.S.C. 28).

19 (2) Section 5203 (12 U.S.C. 87).

20 (3) Section 5206 (12 U.S.C. 88).

21 (4) Section 5196 (12 U.S.C. 89).

22 (5) Section 5158 (12 U.S.C. 102).

23 (6) Section 5159 (12 U.S.C. 101a).

24 (7) Section 5172 (12 U.S.C. 104)

25 (8) Section 5173 (12 U.S.C. 107).
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1 (9) Section 5174 (12 U.S.C. 108).

2 (10) Section 5182 (12 U.S.C. 109).

3 (11) Section 5183 (12 U.S.C. 110).

4 (12) Section 5195 (12 U.S.C. 123).

5 (13) Section 5184 (12 U.S.C. 124).

6 (14) Section 5226 (12 U.S.C. 131).

7 (15) Section 5227 (12 U.S.C. 132).

8 (16) Section 5228 (12 U.S.C. 133).

9 (17) Section 5229 (12 U.S.C. 134).

10 (18) Section 5230 (12 U.S.C. 137).

11 (19) Section 5231 (12 U.S.C. 138).

12 (20) Section 5232 (12 U.S.C. 135).

13 (21) Section 5233 (12 U.S.C. 136).

14 (22) Section 5185 (12 U.S.C. 151).

15 (23) Section 5186 (12 U.S.C. 152).

16 (24) Section 5160 (12 U.S.C. 168).

17 (25) Section 5161 (12 U.S.C. 169).

18 (26) Section 5162 (12 U.S.C. 170).

19 (27) Section 5163 (12 U.S.C. 171).

20 (28) Section 5164 (12 U.S.C. 172).

21 (29) Section 5165 (12 U.S.C. 173).

22 (30) Section 5166 (12 U.S.C. 174).

23 (31) Section 5167 (12 U.S.C. 175).

24 (32) Section 5222 (12 U.S.C. 183).

25 (33) Section 5223 (12 U.S.C. 184).
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1 (34) Section 5224 (12 U.S.C. 185).

2 (35) Section 5225 (12 U.S.C. 186).

3 (36) Section 5237 (12 U.S.C. 195).

4 (b) REPEAL OF OTHER OBSOLETE PROVISIONS IN

5 BANKING LAWS.—The following provisions of law are

6 hereby repealed:

7 (1) Section 26 of the Federal Deposit Insurance

8 Act (12 U.S.C. 1831c).

9 (2) Section 12 of the Act entitled ‘‘An Act To

10 define and fix the standard of value, to maintain the

11 parity of all forms of money issued or coined by the

12 United States, to refund the public debt, and for

13 other purposes.’’ and approved March 14, 1900 (12

14 U.S.C. 101).

15 (3) Section 3 of the Act entitled ‘‘An Act To

16 amend the laws relating to the denominations of cir17 culating notes by national banks and to permit the

18 issuance of notes of small denominations, and for

19 other purposes.’’ and approved October 5, 1917 (12

20 U.S.C. 103).

21 (4) The following sections of the Act entitled

22 ‘‘An Act fixing the amount of United States notes,

23 providing for a redistribution of the national-bank

24 currency, and for other purposes.’’ and approved

25 June 20, 1874:
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1 (A) Section 5 (12 U.S.C. 105).

2 (B) Section 3 (12 U.S.C. 121).

3 (C) Section 8 (12 U.S.C. 126).

4 (D) Section 4 (12 U.S.C. 176).

5 (5) The following sections of the Act entitled

6 ‘‘An Act to enable national-banking associations to

7 extend their corporate existence, and for other pur8 poses.’’ and approved July 12, 1882:

9 (A) Section 8 (12 U.S.C. 177).

10 (B) Section 9 (12 U.S.C. 178).

11 (6) The Act entitled ‘‘An Act to amend the na12 tional bank act in providing for the redemption of

13 national bank notes stolen from or lost by banks of

14 issue.’’ and approved July 28, 1892 (12 U.S.C.

15 125).

16 (7) The Act entitled ‘‘An Act authorizing the

17 conversion of national gold banks.’’ and approved

18 February 14, 1880 (12 U.S.C. 153).

19 (c) AMENDMENTS TO OTHER LAWS.—

20 (1) The Act entitled ‘‘An Act to provide for the

21 redemption of national-bank notes, Federal Reserve

22 bank notes, and Federal Reserve notes which cannot

23 be identified as to the bank of issue.’’ and approved

24 June 13, 1933, is amended—

25 (A) in the 1st section (12 U.S.C. 121a)—
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1 (i) by striking ‘‘whenever any na2 tional-bank notes, Federal Reserve bank

3 notes,’’ and inserting ‘‘whenever any Fed4 eral Reserve bank notes’’; and

5 (ii) by striking ‘‘, and the notes, other

6 than Federal Reserve notes, so redeemed

7 shall be forwarded to the Comptroller of

8 the Currency for cancellation and destruc9 tion’’; and

10 (B) in section 2 (12 U.S.C. 122a)—

11 (i) by striking ‘‘National-bank notes

12 and’’; and

13 (ii) by striking ‘‘national-bank notes

14 and’’.

15 (2) The 1st section of the Act entitled ‘‘An Act

16 making appropriations for sundry civil expenses of

17 the Government for the fiscal year ending June thir18 tieth, eighteen hundred and seventy-six, and for

19 other purposes.’’ and approved March 3, 1875, is

20 amended in the 1st paragraph which appears under

21 the heading ‘‘NATIONAL CURRENCY’’ by striking

22 ‘‘Secretary of the Treasury: Provided, That’’ and all

23 that follows through the period and inserting ‘‘Sec24 retary of the Treasury.’’.
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1 (3) The Act entitled ‘‘An Act to simplify the ac2 counts of the Treasurer of the United States, and

3 for other purposes.’’ and approved October 10, 1940

4 (12 U.S.C. 177a) is amended by striking all after

5 the enacting clause and inserting the following:

6 ‘‘That the cost of transporting and redeeming out7 standing national bank notes and Federal Reserve

8 bank notes as may be presented to the Treasurer of

9 the United States for redemption shall be paid from

10 the regular annual appropriation for the Department

11 of the Treasury.’’.

12 (4) Section 5234 of the Revised Statutes (12

13 U.S.C. 192) is amended by striking ‘‘has refused to

14 pay its circulating notes as therein mentioned, and’’.

15 (5) Section 5236 of the Revised Statutes (12

16 U.S.C. 194) is amended by striking ‘‘, after full pro17 vision has been first made for refunding to the

18 United States any deficiency in redeeming the notes

19 of such association’’.

20 (6) Section 5238 of the Revised Statutes (12

21 U.S.C. 196) is amended by striking the 1st sentence.

22 (d) AMENDMENTS TO OUTDATED DIVIDEND PROVI23 SIONS.—
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1 (1) WITHDRAWAL OF CAPITAL.—Section 5204

2 of the Revised Statutes (12 U.S.C. 56) is amend3 ed—

4 (A) in the second sentence, by striking

5 ‘‘net profits then on hand, deducting therefrom

6 its losses and bad debts’’ and inserting ‘‘undi7 vided profits, subject to other applicable provi8 sions of law’’; and

9 (B) by striking the third sentence.

10 (2) DECLARATION OF DIVIDENDS.—Section

11 5199 of the Revised Statutes (12 U.S.C. 60) is

12 amended—

13 (A) in the 1st sentence, by striking ‘‘net

14 profits of the association’’ and inserting ‘‘undi15 vided profits of the association, subject to the

16 limitations in subsection (b),’’;

17 (B) by striking ‘‘net profits’’ each subse18 quent place such term appears and inserting

19 ‘‘net income’’; and

20 (C) by striking subsection (c).
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1 Subtitle C—Other Regulatory

2 Reform

3 SEC. 121. ELIMINATION OF DUPLICATIVE DISCLOSURES

4 FOR HOME EQUITY LOANS.

5 Section 4(a) of the Real Estate Settlement Proce6 dures Act (12 U.S.C. 2603(a)) is amended by adding at

7 the end the following: ‘‘In the case of a federally related

8 mortgage loan secured by a subordinate lien on residential

9 property, disclosures made under section 127A(a) of the

10 Truth in Lending Act may be used in lieu of the disclo11 sures required under this section if—

12 ‘‘(1) the disclosures made pursuant to such sec13 tion 127A(a) contain all of the information that is

14 required under this section; and

15 ‘‘(2) the information is disclosed in a manner

16 that is no less conspicuous than is required under

17 this section.’’.

18 SEC. 122. HOME OWNERSHIP DEBT COUNSELING NOTIFICA19 TION.

20 Section 106(c)(5)(B)(ii) of the Housing and Urban

21 Development Act of 1968 (12 U.S.C. 1701x(c)(5)(B)(ii))

22 is amended to read as follows:

23 ‘‘(ii) before—

24 ‘‘(I) the end of the 45-day period

25 beginning on the date on which the
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1 failure referred to in such subpara2 graph occurs, except that creditors

3 shall not be required to provide such

4 notification pursuant to this subclause

5 more than once annually; and

6 ‘‘(II) any foreclosure on the prop7 erty securing the loan.’’.

8 SEC. 123. CLARIFICATION OF RESPA DISCLOSURE RE9 QUIREMENTS.

10 Section 6(a)(1)(B) of the Real Estate Settlement

11 Procedures Act of 1974 (12 U.S.C. 2605(a)(1)(B)) is

12 amended—

13 (1) by striking ‘‘(B) for each of the most re14 cent’’ and inserting ‘‘(B) at the choice of the person

15 making a federally related mortgage loan—

16 ‘‘(i) for each of the most recent’’;

17 (2) by redesignating clauses (i) and (ii) as

18 subclauses (I) and (II), respectively, and moving the

19 left margin of such subclauses (as so redesignated)

20 2 ems to the right;

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

22 (II) (as so redesignated by paragraph (2) of this sec23 tion and inserting ‘‘or’’; and
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1 (4) by inserting after clause (i) (as so des2 ignated by paragraph (1) of this section the follow3 ing new clause:

4 ‘‘(ii) a statement that the person mak5 ing the loan has previously assigned, sold,

6 or transferred the servicing of federally re7 lated mortgage loans; and’’.

8 SEC. 124. EXEMPTION OF BUSINESS LOANS FROM REAL ES9 TATE SETTLEMENT PROCEDURES ACT RE10 QUIREMENTS.

11 The Real Estate Settlement Procedures Act of 1974

12 (12 U.S.C. 2601 et seq.) is amended by inserting after

13 section 6 the following new section:

14 ‘‘SEC. 7. EXEMPTED TRANSACTIONS.

15 ‘‘This Act shall not apply to credit transactions in16 volving extensions of credit—

17 ‘‘(1) primarily for business, commercial, or ag18 ricultural purposes; or

19 ‘‘(2) to government or governmental agencies or

20 instrumentalities.’’.

21 SEC. 125. SPECIAL RULES FOR DISCLOSURES FOR RADIO

22 ADVERTISING OF CREDIT PLANS, DEPOSITS,

23 AND CONSUMER LEASES.

24 (a) OPEN END CREDIT PLANS.—Section 143 of the

25 Truth in Lending Act (15 U.S.C. 1663) is amended—
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1 (1) by striking ‘‘No advertisement’’ and insert2 ing ‘‘(a) IN GENERAL.—No advertisement’’; and

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

5 ‘‘(b) RADIO ADVERTISEMENTS.—An advertisement

6 by radio broadcast to aid, promote, or assist, directly or

7 indirectly, the extension of consumer credit under an open

8 end credit plan meets the requirements of subsection (a)

9 if the advertisement, clearly and conspicuously—

10 ‘‘(1) states any periodic rate that may be ap11 plied under the plan, expressed as an annual per12 centage rate;

13 ‘‘(2) states that a variable periodic rate applies

14 under the plan, if such a rate applies; and

15 ‘‘(3) includes—

16 ‘‘(A) a referral to—

17 ‘‘(i) a toll-free telephone number that

18 may be used by consumers to obtain the

19 information required under subsection (a)

20 in accordance with subsection (c); or

21 ‘‘(ii) an advertisement that—

22 ‘‘(I) appears in a publication in

23 general circulation in the community

24 served by the radio station (on which

25 such advertisement is broadcast) dur-
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1 ing the period beginning 7 days before

2 the broadcast and ending 7 days after

3 the broadcast; and

4 ‘‘(II) includes the information re5 quired to be disclosed under sub6 section (a); and

7 ‘‘(B) in any case to which subparagraph

8 (A)(ii) applies, the name and date of the publi9 cation.

10 ‘‘(c) ESTABLISHMENT OF TOLL-FREE TELEPHONE

11 NUMBER.—

12 ‘‘(1) IN GENERAL.—In the case of an advertise13 ment described in subsection (b) or section 144(e) or

14 147(b) which includes a referral to a toll-free tele15 phone number in accordance with such subsection or

16 section, a creditor that offers the credit which such

17 advertisement aids, supports, or assists shall—

18 ‘‘(A) establish the telephone number by not

19 later than the date on which any advertisement

20 is broadcast which includes a referral to the

21 number; and

22 ‘‘(B) maintain the telephone number at

23 least until the end of the 7-day period begin24 ning on the date of any such broadcast.

25 ‘‘(2) AVAILABILITY OF INFORMATION.—
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1 ‘‘(A) IN GENERAL.—The creditor referred

2 to in subparagraph (A) shall provide the infor3 mation required under subsection (a) with re4 spect to the open end credit plan for which the

5 toll-free telephone line is established to any per6 son who calls such number in response to an

7 advertisement by radio broadcast.

8 ‘‘(B) FORM OF INFORMATION.—The infor9 mation required to be provided under subpara10 graph (A) may be provided orally or by offering

11 to mail a written copy of such information to

12 such person.’’.

13 (b) CREDIT OTHER THAN UNDER OPEN END CRED14 IT PLANS.—Section 144 of the Truth in Lending Act (15

15 U.S.C. 1664) is amended—

16 (1) in subsection (a) by inserting ‘‘APPLICA17 TION GENERALLY.—’’ before ‘‘Except as provided’’;

18 (2) in subsection (b) by inserting ‘‘LIMITATION

19 ON APPLICATION.—’’ before ‘‘The provisions’’;

20 (3) in subsection (c) by inserting ‘‘DISCLO21 SURES REGARDING FINANCE CHARGES.—’’ before

22 ‘‘If any’’;

23 (4) in subsection (d) by inserting ‘‘OTHER RE24 QUIRED DISCLOSURES.—‘‘If any advertisement’’;

25 and
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1 (5) by adding at the end the following new sub2 section:

3 ‘‘(e) RADIO ADVERTISEMENTS.—An advertisement

4 by radio broadcast to aid, promote, or assist, directly or

5 indirectly, any consumer credit sale, loan, or other exten6 sion of credit subject to this title, other than an open end

7 consumer credit plan, meets the requirements of sub8 section (d) if the advertisement, clearly and conspicu9 ously—

10 ‘‘(1) states the rate of the finance charge;

11 ‘‘(2) states that the rate of finance charge may

12 be increased after the date on which credit is ex13 tended, if such an increase is authorized under the

14 terms of the extension of credit to which the adver15 tisement relates; and

16 ‘‘(3) includes—

17 ‘‘(A) a referral to—

18 ‘‘(i) a toll-free telephone number that

19 may be used by consumers to obtain, in ac20 cordance with section 143(c), the informa21 tion required under subsection (d); or

22 ‘‘(ii) an advertisement that—

23 ‘‘(I) appears in a publication in

24 general circulation in the community

25 served by the radio station (on which
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1 such advertisement is broadcast) dur2 ing the period beginning 7 days before

3 the broadcast and ending 7 days after

4 the broadcast; and

5 ‘‘(II) includes the information re6 quired to be disclosed under sub7 section (d); and

8 ‘‘(B) in any case to which subparagraph

9 (A)(ii) applies, the name and date of the publi10 cation.’’.

11 (c) CREDIT PLANS SECURED BY CONSUMER’S PRIN12 CIPAL DWELLING.—Section 147 of the Truth in Lending

13 Act (15 U.S.C. 1665b) is amended—

14 (1) by redesignating subsections (b), (c), (d),

15 (e), and (f) as subsections (c), (d), (e), (f), and (g),

16 respectively; and

17 (2) by inserting after subsection (a) the follow18 ing:

19 ‘‘(b) RADIO ADVERTISEMENTS.—An advertisement

20 by radio broadcast to aid, promote, or assist, directly or

21 indirectly, the extension of consumer credit under an open

22 end credit plan secured by a consumer’s principal dwelling

23 meets the requirements of subsection (a) if the advertise24 ment, clearly and conspicuously—
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1 ‘‘(1) contains the information described in para2 graphs (2) and (3) of subsection (a); and

3 ‘‘(2) includes—

4 ‘‘(A) a referral to—

5 ‘‘(i) a toll-free telephone number that

6 may be used by consumers to obtain the

7 information required under subsection (a)

8 in accordance with section 143(c); or

9 ‘‘(ii) an advertisement that—

10 ‘‘(I) appears in a publication in

11 general circulation in the community

12 served by the radio station (on which

13 such advertisement is broadcast) dur14 ing the period beginning 7 days before

15 the broadcast and ending 7 days after

16 the broadcast; and

17 ‘‘(II) includes the information re18 quired to be disclosed under sub19 section (a); and

20 ‘‘(B) in any case to which subparagraph

21 (A)(ii) applies, the name and date of the publi22 cation.’’.

23 (d) DEPOSITS SUBJECT TO TRUTH IN SAVINGS.—

24 Section 263(b) of the Truth in Savings Act (12 U.S.C.

25 4302(b)) is amended—
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1 (1) by striking ‘‘EXCEPTION.—The Board

2 may—’’ and inserting ‘‘EXCEPTION.—

3 ‘‘(1) IN GENERAL.—The Board may’’; and

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

5 paragraph:

6 ‘‘(2) RADIO ADVERTISEMENTS.—Paragraphs

7 (4), (5), and (6) of subsection (a) shall not apply

8 with respect to an advertisement, announcement, or

9 solicitation (which is otherwise subject to such sub10 section) by radio broadcast.’’.

11 (e) CONSUMER LEASES.—Section 184 of the Truth

12 in Leasing Act is amended—

13 (1) by redesignating subsection (b) as sub14 section (d); and

15 (2) by inserting after subsection (a) the follow16 ing new subsections:

17 ‘‘(b) RADIO ADVERTISEMENTS.—An advertisement

18 by radio broadcast to aid, promote, or assist, directly or

19 indirectly, any consumer lease meets the requirements of

20 subsection (a) if the advertisement, clearly and conspicu21 ously—

22 ‘‘(1) states the information described in para23 graphs (1) and (2) of subsection (a);
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1 ‘‘(2) states the sum of the amount financed and

2 the finance charge, which shall be described as the

3 ‘total of payments’; and

4 ‘‘(3) includes—

5 ‘‘(A) a referral to—

6 ‘‘(i) a toll-free telephone number that

7 may be used by consumers to obtain the

8 information required under subsection (a)

9 in accordance with subsection (c); or

10 ‘‘(ii) an advertisement that—

11 ‘‘(I) appears in a publication in

12 general circulation in the community

13 served by the radio station (on which

14 such advertisement is broadcast) dur15 ing the period beginning 7 days before

16 the broadcast and ending 7 days after

17 the broadcast; and

18 ‘‘(II) includes the information re19 quired to be disclosed under sub20 section (a); and

21 ‘‘(B) in any case to which subparagraph

22 (A)(ii) applies, the name and date of the publi23 cation.

24 ‘‘(c) ESTABLISHMENT OF TOLL-FREE TELEPHONE

25 NUMBER.—
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1 ‘‘(1) IN GENERAL.—In the case of an advertise2 ment described in subsection (b) which includes a re3 ferral to a toll-free telephone number in accordance

4 with such subsection, a lessor who offers the

5 consumer lease which such advertisement aids, sup6 ports, or assists shall—

7 ‘‘(A) establish the telephone number by not

8 later than the date on which an advertisement

9 is broadcast which includes a referral to the

10 number; and

11 ‘‘(B) maintain the telephone number at

12 least until the end of the 7-day period begin13 ning on the date of any such broadcast.

14 ‘‘(2) AVAILABILITY OF INFORMATION.—

15 ‘‘(A) IN GENERAL.—The lessor referred to

16 in subparagraph (A) shall provide the informa17 tion required under subsection (a) with respect

18 to the consumer lease for which the toll-free

19 telephone line is established to any person who

20 calls such number in response to an advertise21 ment by radio broadcast.

22 ‘‘(B) FORM OF INFORMATION.—The infor23 mation required to be provided under subpara24 graph (A) may be provided orally or by offering
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1 to mail a written copy of such information to

2 such person.’’.

3 Subtitle D—Reports, Studies,

4 Streamlined Regulatory Re5 quirements

6 SEC. 131. STUDY ON CAPITAL STANDARDS AND THEIR IM7 PACT ON THE ECONOMY.

8 (a) IN GENERAL.—The Secretary of the Treasury, in

9 consultation with the Federal banking agencies, shall con10 duct a study of the effect that the implementation of risk11 based capital standards, including the Basle international

12 capital standards, is having on—

13 (1) the safety and soundness of insured deposi14 tory institutions;

15 (2) the availability of credit, particularly to in16 dividuals and small businesses; and

17 (3) economic growth.

18 (b) REPORT.—

19 (1) IN GENERAL.—Before the end of the 1-year

20 period beginning on the date of the enactment of

21 this Act, the Secretary of the Treasury shall submit

22 report on the findings and conclusions of the Sec23 retary with respect to the study conducted under

24 subsection (a) to the Committee on Banking, Fi25 nance and Urban Affairs of the House of Represent-
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1 atives and the Committee on Banking, Housing, and

2 Urban Affairs of the Senate.

3 (2) RECOMMENDATIONS.—The report shall con4 tain any recommendations with respect to capital

5 standards that the Secretary of the Treasury may

6 determine to be appropriate.

7 (c) DEFINITIONS.—For purposes of this section, the

8 terms ‘‘Federal banking agency’’ and ‘‘insured depository

9 institution’’ have the meanings given to such terms in sec10 tion 3 of the Federal Deposit Insurance Act.

11 SEC. 132. STUDY OF THE CONSUMER CREDIT SYSTEM.

12 (a) IN GENERAL.—The Secretary of the Treasury, in

13 consultation with the Board of Governors of the Federal

14 Reserve System, the Administrator of the Small Business

15 Administration, the Secretary of Housing and Urban De16 velopment, and the other Federal banking agencies, shall

17 conduct a study of the manner in which and the extent

18 to which credit is made available for consumers and small

19 businesses in order to identify procedures which have the

20 effect of—

21 (1) reducing the amount of credit available for

22 such purposes or the number of persons eligible for

23 such credit; and

24 (2) increasing the level of consumer inconven25 ience, cost, and time delays in connection with the
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1 extension consumer and small business credit with2 out any corresponding benefit with respect to the

3 protection of consumers or small businesses or the

4 safety and soundness of insured depository institu5 tions.

6 (b) REPORT.—

7 (1) IN GENERAL.—Before the end of the 1-year

8 period beginning on the date of the enactment of

9 this Act, the Secretary of the Treasury shall submit

10 report on the findings and conclusions of the Sec11 retary with respect to the study conducted under

12 subsection (a) to the Committee on Banking, Fi13 nance and Urban Affairs of the House of Represent14 atives and the Committee on Banking, Housing, and

15 Urban Affairs of the Senate.

16 (2) RECOMMENDATIONS.—The report shall con17 tain any recommendations for administrative action

18 that the Secretary of the Treasury may determine to

19 be appropriate.

20 SEC. 133. STUDIES ON THE IMPACT OF THE PAYMENT OF

21 INTEREST ON RESERVES.

22 (a) FEDERAL RESERVE STUDY.—Not later than 180

23 days after the date of enactment of this Act, the Board

24 of Governors of the Federal Reserve System, in consulta25 tion with the Federal Deposit Insurance Corporation and
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1 the National Credit Union Administration, shall conduct

2 a study and report to Congress on—

3 (1) the necessity, for monetary policy purposes,

4 of continuing to require insured depository institu5 tions to maintain sterile reserves;

6 (2) the appropriateness of paying a market rate

7 of interest to insured depository institutions on ster8 ile reserves or, in the alternative, providing for pay9 ment of such interest into the appropriate deposit

10 insurance fund;

11 (3) the monetary impact that the failure to pay

12 interest on sterile reserves has had on insured depos13 itory institutions, including an estimate of the total

14 dollar amount of interest and the potential income

15 lost by insured depository institutions; and

16 (4) the impact that the failure to pay interest

17 on sterile reserves has had on the ability of the

18 banking industry to compete with nonbanking pro19 viders of financial services and with foreign banks.

20 (b) BUDGETARY IMPACT STUDY.—Not later than

21 180 days after the date of enactment of this Act, the Di22 rector of the Office of Management and Budget and the

23 Director of the Congressional Budget Office, in consulta24 tion with the Committees on the Budget of the Senate and
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1 the House of Representatives, shall each conduct a study

2 and report to the Congress on the budgetary impact of—

3 (1) paying a market rate of interest to insured

4 depository institutions on sterile reserves; and

5 (2) paying such interest into the respective

6 deposit insurance funds.

7 (c) INSURED DEPOSITORY INSTITUTION DEFINED.—

8 For purposes of this section, the term ‘‘insured depository

9 institution’’—

10 (1) has the meaning given to such term in sec11 tion 3(c) of the Federal Deposit Insurance Act; and

12 (2) includes an insured credit union (as defined

13 in section 101 of the Federal Credit Union Act).

14 SEC. 134. STREAMLINING OF REGULATORY REQUIRE15 MENTS.

16 (a) REVIEW OF REGULATIONS; REGULATORY UNI17 FORMITY.—During the 2-year period beginning on the

18 date of enactment of this Act, each Federal banking agen19 cy shall, consistent with principles of safety and soundness

20 and the public interest—

21 (1) conduct a review of the regulations and

22 written policies of that agency to—

23 (A) streamline those regulations and poli24 cies in order to improve efficiency, reduce un-
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1 necessary costs, and eliminate unwarranted con2 straints on credit availability;

3 (B) remove inconsistencies and outmoded

4 and duplicative requirements; and

5 (C) with respect to regulations prescribed

6 pursuant to section 18(o) of the Federal De7 posit Insurance Act, consider the impact that

8 such standards have on the availability of credit

9 for small business, residential, and agricultural

10 purposes, and on low- and moderate-income

11 communities;

12 (2) work jointly with the other Federal banking

13 agencies to make uniform all regulations and guide14 lines implementing common statutory or supervisory

15 policies; and

16 (3) review the continuing appropriateness of

17 collecting data for purposes of the Fair Housing Act

18 which is not required to be collected under the Home

19 Mortgage Disclosure Act of 1975.

20 (b) REPORT TO CONGRESS.—The Federal banking

21 agencies shall submit a joint report to the Congress annu22 ally for 3 years following the date of the enactment of this

23 Act detailing the progress of the agencies in carrying out

24 the requirements of subsection (a).
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1 SEC. 135. CALL REPORT SIMPLIFICATION.

2 (a) MODERNIZATION OF CALL REPORT FILING AND

3 DISCLOSURE SYSTEM.—In order to reduce the adminis4 trative requirements pertaining to bank reports of condi5 tion, savings association financial reports, and bank hold6 ing company consolidated financial statements, and to im7 prove the timeliness of such reports and statements, the

8 Federal banking agencies shall—

9 (1) work jointly to develop a system under

10 which—

11 (A) insured depository institutions and

12 their affiliates may file such reports and state13 ments electronically; and

14 (B) the Federal banking agencies may

15 make such reports and statements available to

16 the public electronically; and

17 (2) not later than 1 year after the date of en18 actment of this Act, report to the Congress and

19 make recommendations for legislation that would en20 hance efficiency for filers and users of such reports

21 and statements.

22 (b) UNIFORM REPORTS AND SIMPLIFICATION OF IN23 STRUCTIONS.—The Federal banking agencies shall, con24 sistent with the principles of safety and soundness, work

25 jointly—
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1 (1) to adopt a single form for the filing of core

2 information required to be submitted under Federal

3 law to all such agencies in the reports and state4 ments referred to in subsection (a); and

5 (2) to simplify instructions accompanying such

6 reports and statements and to provide an index to

7 the instructions that is adequate to meet the needs

8 of both filers and users.

9 (c) REVIEW OF CALL REPORT SCHEDULE.—Each

10 Federal banking agency shall—

11 (1) review the information required by sched12 ules supplementing the core information referred to

13 in subsection (b); and

14 (2) eliminate requirements that are not war15 ranted for reasons of safety and soundness or other

16 public purposes.

17 SEC. 136. ADMINISTRATIVE CONSIDERATION OF BURDEN

18 WITH NEW REGULATIONS.

19 (a) IN GENERAL.—In determining the effective date

20 and administrative compliance requirements for new regu21 lations that impose additional reporting, disclosure, or

22 other requirements on insured depository institutions,

23 each Federal banking agency (as defined in section 3 of

24 the Federal Deposit Insurance Act) shall consider, consist-
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1 ent with the principles of safety and soundness and the

2 public interest—

3 (1) any administrative burdens that such regu4 lations would place on depository institutions, in5 cluding small depository institutions, and customers

6 of depository institutions; and

7 (2) the benefits of such regulations.

8 (b) ADEQUATE TRANSITION PERIOD FOR NEW REG9 ULATIONS.—No new regulation issued by a Federal bank10 ing agency which imposes additional reporting, disclosure

11 or other requirements on insured depository institutions

12 shall take effect on the 1st day of the calendar quarter

13 which begins at or after the end of the 90-day period be14 ginning on the date the regulations are published in final

15 form unless—

16 (1) the agency makes a finding that—

17 (A) an emergency exists which requires the

18 regulation to take effect before the 1st day of

19 such calendar quarter; or

20 (B) a delay would have a substantial im21 pact upon the safety and soundness of insured

22 depository institutions; or

23 (2) the regulation is required to take effect be24 fore the 1st day of such calendar quarter pursuant

25 to any other provision of law.
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1 SEC. 137. ELIMINATION OF DUPLICATIVE FILINGS.

2 The Federal banking agencies (as defined in section

3 3 of the Federal Deposit Insurance Act) shall work joint4 ly—

5 (1) to eliminate, to the extent practicable, du6 plicative or otherwise unnecessary requests for infor7 mation in connection with applications or notices to

8 the agencies; and

9 (2) to harmonize, to the extent practicable, any

10 inconsistent publication and public notice require11 ments.

12 SEC. 138. RECOURSE AGREEMENTS.

13 The Federal banking agencies (as defined in section

14 3(z) of the Federal Deposit Insurance Act) shall jointly—

15 (1) review the manner in which loans sold with

16 recourse by insured depository institutions are treat17 ed under capital standards and other accounting

18 principles applicable with respect to such insured de19 pository institutions; and

20 (2) issue an appropriate revision to any such

21 standard or principle (which may not be less strin22 gent than generally accepted accounting principles)

23 before the end of the 180-day period beginning on

24 the date of the enactment of this Act.
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1 SEC. 139. ANTITRUST REPORTS IN CONNECTION WITH

2 MERGER TRANSACTIONS.

3 The last sentence of section 18(c)(6) of the Federal

4 Deposit Insurance Act (12 U.S.C. 1828(c)(6)) is amended

5 by inserting before the period at the end the following :‘‘,

6 unless the agency is advised by the other 2 banking agen7 cies before such date that the reports required under para8 graph (4) on the anticompetitive effects of the transaction

9 are not necessary because none of the effects described

10 in paragraph (5) is likely to occur as a result of the trans11 action’’.

12 SEC. 140. BANKERS’ BANKS.

13 (a) OWNERSHIP BY BANKERS’ BANKS.—OWNERSHIP

14 BY DEPOSITORY INSTITUTION HOLDING COMPANIES.—

15 (1) PROVISION RELATING TO NATIONAL BANK

16 INVESTMENTS.—The 5th proviso of the 7th undesig17 nated paragraph of section 5136 of the Revised

18 Statutes of the United States (12 U.S.C. 24) is

19 amended—

20 (A) by inserting ‘‘or by depository institu21 tion holding companies (as defined in section

22 3(w) of the Federal Deposit Insurance Act)’’

23 after ‘‘is owned exclusively (except to the extent

24 directors’ qualifying shares are required by law)

25 by depository institutions’’; and
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1 (B) by striking ‘‘employees’’ and inserting

2 ‘‘employees (any such bank or company is com3 monly referred to as a ‘bankers’ bank’)’’.

4 (2) PROVISION RELATING TO NATIONAL BANK

5 CHARTERS.—Section 5169(b)(1) of the Revised

6 Statutes of the United States (12 U.S.C. 27(b)(1))

7 is amended—

8 (A) by inserting ‘‘or by depository institu9 tion holding companies (as defined in section

10 3(w) of the Federal Deposit Insurance Act)’’

11 after ‘‘is owned exclusively (except to the extent

12 directors’ qualifying shares are required by law)

13 by other depository institutions’’; and

14 (B) by striking ‘‘employees’’ and inserting

15 ‘‘employees (such association is commonly re16 ferred to as a ‘bankers’ bank’)’’.

17 (b) OWNERSHIP BY SAVINGS ASSOCIATIONS.—Sec18 tion 5(c)(4) of the Home Owners’ Loan Act (12 U.S.C.

19 1464(c)(4)) is amended by adding at the end the following

20 new subparagraph:

21 ‘‘(E) BANKERS’ BANKS.—A Federal sav22 ings association may purchase, for the associa23 tion’s own account, shares of stock of a bank24 ers’ bank or holding company described in the

25 5th proviso of the 7th undesignated paragraph
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1 of section 5136 of the Revised Statutes of the

2 United States or section 5169(b) of such Re3 vised Statutes on the same terms and condi4 tions a national bank may purchase such

5 shares.’’.

6 (c) TECHNICAL AND CONFORMING AMENDMENTS.—

7 (1) BANK HOLDING COMPANY ACT.—Section

8 3(e) of the Bank Holding Company Act of 1956 (12

9 U.S.C. 1842(e)) is amended by striking the second

10 sentence.

11 (2) DEPOSITORY INSTITUTION MANAGEMENT

12 INTERLOCKS ACT AMENDMENT.—Section 202(3)(D)

13 of the Depository Institution Management Interlocks

14 Act (12 U.S.C. 3201(3)(D)) is amended by striking

15 ‘‘the voting securities’’ the 1st place such term ap16 pears and all that follows through ‘‘the surplus of

17 such other bank; or’’ and inserting ‘‘which is a

18 bankers’ bank described in the 5th proviso of the

19 7th undesignated paragraph of section 5136 of the

20 Revised Statutes of the United States; or’’.

21 SEC. 141. DUE PROCESS PROTECTIONS RELATING TO AT22 TACHMENT OF ASSETS.

23 Section 8 of the Federal Deposit Insurance Act (12

24 U.S.C. 1818) is amended—
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1 (1) by striking subsection (i)(4)(B) and insert2 ing the following new subparagraph:

3 ‘‘(B) STANDARD.—

4 ‘‘(i) SHOWING.—Rule 65 of the Fed5 eral Rules of Civil Procedure shall apply

6 with respect to any proceeding under sub7 paragraph (A) without regard to the re8 quirement of such rule that the applicant

9 show that the injury, loss, or damage is ir10 reparable and immediate.

11 ‘‘(ii) STATE PROCEEDING.—If, in the

12 case of any proceeding in a State court,

13 the court determines that rules of civil pro14 cedure available under the laws of such

15 State provide substantially similar protec16 tions to such party’s right to due process

17 as Rule 65 (as modified with respect to

18 such proceeding by clause (i)), the relief

19 sought under subparagraph (A) may be re20 quested under the laws of such State.’’;

21 and

22 (2) in subsection (b), by adding the following

23 new paragraph:

24 ‘‘(9) STANDARD FOR CERTAIN ORDERS.—No

25 authority under this subsection or subsection (c) to
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1 prohibit any institution-affiliated party from with2 drawing, transferring, removing, dissipating, or dis3 posing of any funds, assets, or other property may

4 be exercised unless the agency meets the standards

5 of Rule 65 of the Federal Rules of Civil Procedure

6 without regard to the requirement of such rule that

7 the applicant show that the injury, loss, or damage

8 is irreparable and immediate.’’.

9 TITLE II—COMMUNITY DEVEL10 OPMENT FINANCIAL INSTITU11 TIONS

12 SEC. 201. SHORT TITLE.

13 This title may be cited as the ‘‘Community Develop14 ment Banking and Financial Institutions Act of 1993’’.

15 SEC. 202. FINDINGS AND PURPOSE.

16 (a) FINDINGS.—The Congress finds that—

17 (1) many of the Nation’s urban and rural com18 munities and Indian reservations face critical social

19 and economic problems arising in part from the lack

20 of economic growth, people living in poverty, and the

21 lack of employment and other opportunities;

22 (2) the restoration and maintenance of the

23 economies of these communities will require coordi24 nated development strategies, intensive supportive

25 services, and increased access to capital and credit
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1 for development activities, including investment in

2 businesses, housing, commercial real estate, human

3 development, and other activities that promote the

4 long-term economic and social viability of the com5 munity;

6 (3) in many urban and rural communities, low7 and moderate-income neighborhoods, and Indian res8 ervations, there is a shortage of capital and credit

9 for business and affordable housing;

10 (4) access to capital and credit is essential to

11 unleash the untapped entrepreneurial energy of

12 America’s poorest communities and to empower indi13 viduals and communities to become self-sufficient;

14 and

15 (5) community development financial institu16 tions have proven their ability to identify and re17 spond to community needs for capital, credit, and

18 development services in the absence of, or as a com19 plement to, services provided by other lenders.

20 (b) PURPOSE.—The purpose of this title is to create

21 a Community Development Banking and Financial Insti22 tutions Fund that will support a program of investment

23 in and assistance to community development financial in24 stitutions. The Community Development Banking and Fi25 nancial Institutions Fund will provide financial and tech-
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1 nical assistance, including training, to community develop2 ment financial institutions, serve as a national information

3 clearinghouse, and be an institutional voice for community

4 development. The community development financial insti5 tutions that the Community Development Banking and

6 Financial Institutions Fund supports will provide capital,

7 credit, and development services to targeted investment

8 areas or populations, and will promote economic revitaliza9 tion and community development.

10 SEC. 203. DEFINITIONS.

11 (a) APPROPRIATE FEDERAL BANKING AGENCY.—

12 The term ‘‘appropriate Federal banking agency’’ has the

13 same meaning given such term in section 3(q) of the Fed14 eral Deposit Insurance Act (12 U.S.C. 1813(q)).

15 (b) COMMUNITY DEVELOPMENT FINANCIAL INSTI16 TUTION.—The term ‘‘community development financial in17 stitution’’ means any bank, savings association, depository

18 institution holding company, credit union, micro-enter19 prise loan fund, community development corporation, com20 munity development revolving loan fund, minority-owned

21 or other insured depository institution, or non-depository

22 organization that—

23 (1) has as its primary mission the promotion of

24 community development through the provision of
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1 capital, credit, or development services in its invest2 ment areas or to targeted populations; and

3 (2) encourages, through representation on its

4 governing board or otherwise, the input of residents

5 in the investment area or the targeted populations.

6 A depository institution holding company may qualify as

7 a community development financial institution only if the

8 holding company and its subsidiaries collectively satisfy

9 the requirements of paragraphs (1) and (2). No subsidiary

10 of a depository institution holding company may qualify

11 as a community development financial institution if the

12 holding company and its subsidiaries collectively do not

13 meet the requirements of paragraphs (1) and (2). The

14 term ‘‘community development financial institution’’ does

15 not include an agency or instrumentality of the United

16 States or an agency or instrumentality of any State or

17 political subdivision thereof.

18 (c) DEPOSITORY INSTITUTION HOLDING COM19 PANY.—The term ‘‘depository institution holding com20 pany’’ has the same meaning given such term in section

21 3(w) of the Federal Deposit Insurance Act (12 U.S.C.

22 1813(w)).

23 (d) DEVELOPMENT SERVICES.—The term ‘‘develop24 ment services’’ means activities conducted by a community

25 development financial institution that promote community
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1 development by developing, supporting, and strengthening

2 the lending, investment, and capacity-building activities

3 undertaken by institutions, including, but not limited to—

4 (1) business planning services;

5 (2) financial and credit counseling services;

6 (3) marketing and management assistance; and

7 (4) administrative activities associated with

8 lending or investment.

9 (e) INSURED COMMUNITY DEVELOPMENT FINANCIAL

10 INSTITUTION.—The term ‘‘insured community develop11 ment financial institution’’ means any community develop12 ment financial institution that is an insured depository in13 stitution. The term also includes an insured credit union

14 which has been designated as low-income by the National

15 Credit Union Administration.

16 (f) INSURED CREDIT UNION.—The term ‘‘insured

17 credit union’’ has the same meaning given such term in

18 section 101(7) of the Federal Credit Union Act (12 U.S.C.

19 1752(7)).

20 (g) INSURED DEPOSITORY INSTITUTION.—The term

21 ‘‘insured depository institution’’ has the same meaning

22 given such term in section 3(c) of the Federal Deposit In23 surance Act (12 U.S.C. 1813(c)).

24 (h) INVESTMENT AREA.—The term ‘‘investment

25 area’’ means an identifiable community that—
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1 (1) meets objective criteria of distress, including

2 the number of low-income families, the extent of

3 poverty, the extent of unemployment, the extend of

4 unmet credit needs, the degree of availability of

5 basic financial services, the degree of limited access

6 to capital and credit provided by existing financial

7 institutions, and other factors that the Fund deter8 mines to be appropriate; or

9 (2) is located in an empowerment zone or enter10 prise community designated under section 1391 of

11 the Internal Revenue Code of 1986.

12 (i) QUALIFIED COMMUNITY DEVELOPMENT FINAN13 CIAL INSTITUTION.—The term ‘‘qualified community de14 velopment financial institution’’ means a community devel15 opment financial institution that meets the requirements

16 of sections 5(b) (2) through (8) of this title.

17 (j) TARGETED POPULATION.—The term ‘‘targeted

18 population’’ means an identifiable group of low-income or

19 disadvantaged persons that are underserved by existing

20 financial institutions.

21 SEC. 204. ESTABLISHMENT OF NATIONAL FUND FOR COM22 MUNITY DEVELOPMENT BANKING.

23 (a) IN GENERAL.—There is hereby established a cor24 porate to be known as the Community Development Bank25 ing and Financial Institutions Fund (hereafter in this title
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1 referred to as the ‘‘Fund’’) that shall have the powers and

2 responsibilities specified by this Act. The Fund shall have

3 succession until dissolved. The charter of the Fund may

4 be revised, amended, or modified by Congress at any time.

5 The offices of the Fund shall be in Washington, D.C.

6 (b) BOARD OF DIRECTORS.—

7 (1) IN GENERAL.—The powers and manage8 ment of the Fund shall be vested in a Board of Di9 rectors (hereafter referred to in this title as the

10 ‘‘Board’’), which shall have nine members.

11 (2) MEMBERS.—The members of the Board

12 shall consist of the following:

13 (A) The Secretary of Agriculture.

14 (B) The Secretary of Commerce.

15 (C) The Secretary of Housing and Urban

16 Development.

17 (D) The Secretary of the Treasury.

18 (E) The Administrator of the Small Busi19 ness Administration.

20 (F) Four private citizens, appointed by the

21 President with the advice and consent of the

22 Senate, that collectively—

23 (i) represent community groups whose

24 constituencies include low-income persons

25 or residents of investment areas,
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1 (ii) have expertise in the operations

2 and activities of insured depository institu3 tions, and

4 (iii) have expertise in community de5 velopment and lending; provided that there

6 should not be less than one member from

7 each of the three categories described in

8 clauses (i) through (iii) of this subpara9 graph.

10 (3) CHAIRPERSON.—The President shall ap11 point from among the members of the Board speci12 fied in paragraph (2)(F) a chairperson of the Board,

13 who shall serve at the pleasure of the President for

14 a term of two years.

15 (4) VICE-CHAIRPERSON.—The President shall

16 appoint from among the members specified in para17 graph (2) a vice-chairperson who will serve as chair18 person in the absence, disability, or recusal of the

19 chairperson. The vice-chairperson shall serve at the

20 pleasure of the President for a term of two years.

21 (5) TERMS OF APPOINTED MEMBERS.—

22 (A) IN GENERAL.—Each member ap23 pointed pursuant to paragraph (2)(F) shall

24 serve at the pleasure of the President for a
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1 term of four years, except as provided in para2 graph (5)(C).

3 (B) VACANCIES.—Any member appointed

4 to fill a vacancy occurring prior to the expira5 tion of the term for which the previous member

6 was appointed shall be appointed for the re7 mainder of such term. Appointed members may

8 continue to serve following the expiration of

9 their terms until a successor is appointed and

10 qualified.

11 (C) TERMS.—The terms of the initial ap12 pointed members shall be for four years and

13 shall begin on the date each member is ap14 pointed, except that two of the members ini15 tially appointed pursuant to paragraph (2)(F)

16 shall be designated to serve at the pleasure of

17 the President for five years.

18 (6) ACTING OFFICIALS.—In the event of a va19 cancy or absence of the individual in any of the of20 fices described in paragraphs (2) (A) through (E),

21 the official acting in that office shall be a member

22 of the Board.

23 (7) AUTHORITY TO DELEGATE.—Each member

24 of the Board specified in paragraphs (2) (A)

25 through (E) may designate another official who has
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1 been appointed by the President with the advice and

2 consent of the Senate within the same agency to

3 serve as a member in his or her stead.

4 (8) COMPENSATION.—Members of the Board

5 who are otherwise officers or employees of the

6 United States shall serve without additional com7 pensation for their duties as members, but shall be

8 reimbursed by the Fund for travel, per diem, and

9 other necessary expenses incurred in the perform10 ance of their duties, in accordance with sections

11 5702 and 5703 of title 5, United States Code. The

12 appointed members of the Board shall be entitled to

13 receive compensation at the daily equivalent of the

14 rate for a position under Level IV of the Executive

15 Schedule under section 5315 of title 5, United

16 States Code, and shall be reimbursed by the Fund

17 for travel, per diem, and other necessary expenses

18 incurred in the performance of their duties, in ac19 cordance with sections 5702 and 5703 of title 5,

20 United States Code.

21 (9) MEETINGS.—The Board shall hold meetings

22 at least quarterly. Special meetings of the Board

23 may be called by the Chairperson or on the written

24 request of three members of the Board. A majority
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1 of the members of the Board in office shall con2 stitute a quorum.

3 (c) OFFICERS AND EMPLOYEES.—The Board shall

4 appoint a Chief Executive Officer who will be responsible

5 for the management of the Fund and such other duties

6 deemed appropriate by the Board. The Board shall ap7 point a Chief Financial Officer who shall oversee all of

8 the financial management activities of the Fund. The

9 Board shall also appoint an Inspector General. The Board

10 may appoint such other officers and employees of the

11 Fund as the Board determines to be necessary or appro12 priate. The Chief Executive Officer, Chief Financial Offi13 cer, and up to 3 other officers of the Fund may be ap14 pointed without regard to the provisions of title 5 of the

15 United States Code governing appointments in the Fed16 eral service and compensated without regard to chapter

17 51 and subchapter III of chapter 53 of title 5 of the

18 United States Code, except that the rate of pay for the

19 Chief Executive Officer shall not exceed the rate for a po20 sition under Level II of the Executive Schedule under sec21 tion 5313 of title 5 of the United States Code and the

22 rate of pay for the remaining four officers shall not exceed

23 the rate for a position under Level IV of the Executive

24 Schedule under section 5315 of title 5 of the United States

25 Code.
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1 (d) GENERAL POWERS.—In carrying out its powers

2 and duties, the Fund—

3 (1) shall have all necessary and proper powers

4 to carry out its authority under this title;

5 (2) may adopt, alter, and use a corporate seal,

6 which shall be judicially noticed;

7 (3) may sue and be sued in its corporate name

8 and complain and defend in any court of competent

9 jurisdiction;

10 (4) may adopt, amend, and repeal bylaws, rules,

11 and regulations governing the manner in which its

12 business may be conducted and shall have power to

13 make such rules and regulations as may be nec14 essary or appropriate to implement the provisions of

15 this title;

16 (5) may enter into and perform such agree17 ments, contracts, and transactions as may be

18 deemed necessary or appropriate to the conduct of

19 activities authorized under this title;

20 (6) may determine the character of and neces21 sity for its expenditures and the manner in which

22 they shall be incurred, allowed, and paid;

23 (7) may utilize or employ the services of person24 nel of any agency or instrumentality of the United

25 States with the consent of the agency or instrumen-
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1 tality concerned on a reimbursable or

2 nonreimbursable basis; and

3 (8) may execute all instruments necessary or

4 appropriate in the exercise of any of its functions

5 under this title and may delegate to the members of

6 the Board, to the Chief Executive Officer, or the of7 ficers of the Fund such of its powers and respon8 sibilities as it deems necessary or appropriate for the

9 administration of the Fund.

10 (e) WHOLLY-OWNED GOVERNMENT CORPORA11 TION.—

12 (1) The Fund shall be a wholly-owned Govern13 ment corporation in the Executive branch and shall

14 be treated in all respects as an agency of the United

15 States, except to the extent this title provides other16 wise.

17 (2) Section 9101(3) of title 31, United States

18 Code, is amended—

19 (A) by redesignating paragraphs (B)

20 through (M) as paragraphs (C) through (N),

21 respectively; and

22 (B) by inserting after paragraph (A) the

23 following:

24 ‘‘(B) the Community Development Banking and

25 Financial Institutions Fund.’’; and
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1 (3) Section 9107(b) of title 31, United States

2 Code, shall not apply to deposits of the Fund made

3 pursuant to section 207.

4 (f) LIMITATION OF FUND AND FEDERAL LIABIL5 ITY.—The liability of the Fund and of the United States

6 Government arising out of any investment in a community

7 development financial institution in accordance with this

8 title shall be limited to the amount of the investment and

9 the Fund shall be exempt from any assessments and other

10 liabilities that may be imposed on controlling or principal

11 shareholders by any Federal law or the law of any State,

12 Territory, or the District of Columbia. A community devel13 opment financial institution that receives assistance pur14 suant to this title shall not be deemed to be an agency,

15 department, or instrumentality of the United States.

16 (g) PROHIBITION OF ISSUANCE OF SECURITIES.—

17 The Fund may not issue stock, bonds, debentures, notes,

18 or other securities.

19 SEC. 205. APPLICATIONS FOR ASSISTANCE.

20 (a) FORM AND PROCEDURES.—An application for as21 sistance under this title shall be submitted by an applicant

22 in such form and in accordance with such procedures as

23 the Board shall establish. The Board shall publish regula24 tions with respect to application requirements and proce25 dures not later than 210 days after enactment of this title.
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1 (b) MINIMUM REQUIREMENTS.—The Board shall re2 quire that the application—

3 (1) demonstrate to the satisfaction of the Board

4 that the applicant is, or upon the receipt of a char5 ter will be, a community development financial insti6 tution as defined in section 203(a);

7 (2) demonstrate that the applicant will serve—

8 (A) a targeted population; or

9 (B) an area which is an investment area;

10 (3) in the case of an applicant that has pre11 viously received assistance under this title, dem12 onstrate that the applicant—

13 (A) has successfully carried out its respon14 sibilities under this title;

15 (B) has become or is about to become an

16 entity that will not be dependent upon assist17 ance from the Fund for continued viability; and

18 (C) will expand its operations into a new

19 investment area, offer new services, or will in20 crease the volume of its current business;

21 (4) in the case of a community development fi22 nancial institution with existing operations, dem23 onstrate a record of success of serving investment

24 areas or targeted populations;
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•HR 3474 IH

1 (5) include a detailed and comprehensive strate2 gic plan for the organization that contains—

3 (A) a business plan of at least five years

4 that demonstrates the applicant is properly

5 managed and has the capacity to form and op6 erate a community development financial insti7 tution that is, or will become, an entity that will

8 not be dependent upon assistance from the

9 Fund for continued viability;

10 (B) a statement that the applicant has, or

11 will have, in its charter or other governing doc12 uments a primary commitment to community

13 development, or other evidence of a prior his14 tory and a continuing affirmation of a primary

15 commitment of community development;

16 (C) an analysis of the needs of the invest17 ment area or targeted populations and a strat18 egy for how the applicant will attempt to meet

19 those needs;

20 (D) a plan to coordinate use of assistance

21 from the Fund with existing Federal, govern22 ment-sponsored enterprise, and State and local

23 assistance programs, and private sector finan24 cial services;
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1 (E) a statement that the proposed activi2 ties of the applicant are consistent with existing

3 economic, community and housing development

4 plans adopted by or applicable to the invest5 ment area;

6 (F) a description of how the applicant will

7 affiliate, network, or otherwise coordinate with

8 a full range of community organizations and fi9 nancial institutions which provide, or will pro10 vide, capital, credit, or secondary markets in

11 order to assure that banking, economic develop12 ment, investment, affordable housing, and other

13 related services will be available within the in14 vestment area or to targeted populations; and

15 (G) such other information as the Board

16 deems appropriate for inclusion in the strategic

17 plan;

18 (6) demonstrate that the applicant will carry on

19 its activities consistent with the purposes of this title

20 within the investment area or with respect to a tar21 geted population;

22 (7) include a detailed and specific statement of

23 applicant’s plans and likely sources of funds to

24 match the amount of assistance from the Fund with
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1 funds from private sources in accordance with the

2 requirements of section 207(d); and

3 (8) include such other information as the Board

4 may require.

5 (c) PRE-APPLICATION OUTREACH PROGRAM.—The

6 Fund shall provide for an outreach program to identify

7 and provide information to potential applicants and to in8 crease the capacity of potential applicants to meet the ap9 plication and other requirements of this title.

10 SEC. 206. SELECTION OF INSTITUTIONS.

11 (a) SELECTION CRITERIA.—The Board shall, in its

12 discretion, select applications that meet the requirements

13 of section 205 and award assistance from the Fund in ac14 cordance with section 207. In selecting applications, the

15 Board shall consider applications based on, but not limited

16 to—

17 (1) the likelihood of success of the applicant in

18 forming and operating a community development fi19 nancial institution;

20 (2) the range and comprehensiveness of the

21 capital, credit, and development services to be pro22 vided by the applicant;

23 (3) the extent of the need, as measured by ob24 jective criteria of distress, within the investment
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•HR 3474 IH

1 areas or targeted populations for the types of activi2 ties proposed by the applicant;

3 (4) the likelihood that the proposed activities

4 will benefit a significant portion of the investment

5 areas or targeted populations or, in the case of a

6 community development financial institution with ex7 isting operations, evidence of a record of success in

8 serving investment areas or targeted populations;

9 (5) the extent to which the applicant will con10 centrate its activities on serving low and very low11 income families;

12 (6) the evidence of the extent of a broad cross13 section of support from the investment areas or tar14 geted populations;

15 (7) the experience and background of the pro16 posed management team;

17 (8) the amount of legally enforceable commit18 ments available at the time of application to meet or

19 exceed the matching requirements under section

20 207(d) and the strength of the plan for raising the

21 balance of the match;

22 (9) in the case of applicants that have pre23 viously received assistance pursuant to this title, the

24 extent to which they have met or exceeded their per25 formance goals;
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1 (10) the extent to which the proposed activities

2 will expand the employment base within the invest3 ment areas or the targeted populations;

4 (11) the extent to which the applicant is, or will

5 be, community-owned or community-governed;

6 (12) whether the applicant is, or will become,

7 an insured community development financial institu8 tion;

9 (13) whether the applicant is, or will be located,

10 in an empowerment zone or enterprise community

11 designated under section 1391 of the Internal Reve12 nue Code of 1986;

13 (14) in the case of an institution that is not an

14 insured community development financial institution,

15 the extent to which the institution has or will have

16 the ability to increase its resources through affili17 ation with a secondary market, insured depository

18 institution, or other financial intermediary in order

19 to multiply the amount of capital or credit available

20 for community development;

21 (15) in the case of an insured depository insti22 tution or insured credit union applicant, whether the

23 institution—

24 (A) has or will have a substantial affili25 ation with an entity or network of entities that
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1 are community development financial institu2 tions; and

3 (B) has a comprehensive plan for providing

4 meaningful financial assistance to such an en5 tity or network of entities; and

6 (16) other factors deemed appropriate by the

7 Board.

8 (b) GEOGRAPHIC DIVERSITY.—In addition to the

9 above, in making its selections the Board shall seek to

10 fund a geographically diverse group of applicants, which

11 shall include applicants from nonmetropolitan and rural

12 areas.

13 (c) PUBLICATION REQUIREMENT.—The Board shall

14 publish regulations with respect to its selection criteria not

15 later than 210 days after the date of enactment of this

16 title.

17 SEC. 207. ASSISTANCE PROVIDED BY THE FUND.

18 (a) PURPOSE OF ASSISTANCE.—

19 (1) The Fund shall work to promote an envi20 ronment hospitable to business information, eco21 nomic growth, community development, and afford22 able housing in distressed communities. The Fund

23 shall coordinate its activities with existing Federal

24 and other community and economic development

25 programs.
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1 (2) Assistance may be provided to an existing

2 qualified community development financial institu3 tion to expand its activities to serve investment

4 areas or targeted populations not currently served by

5 another qualified community development financial

6 institution receiving assistance under this section or

7 to expand the volume of its activities consistent with

8 the purposes of this title, or to form a new entity

9 to undertake activities consistent with the purposes

10 of this title, or to assist an existing entity to modify

11 its structure or activities in order to undertake ac12 tivities consistent with the purposes of this title.

13 (b) TYPES OF ASSISTANCE.—

14 (1) IN GENERAL.—The Fund may provide fi15 nancial assistance to qualified community develop16 ment financial institutions through equity invest17 ments, loans, deposits, membership shares, and

18 grants. The Fund may also provide technical assist19 ance, including training, and grants for technical as20 sistance to qualified community development finan21 cial institutions. The allocation of awards of assist22 ance between insured and uninsured community de23 velopment financial institutions shall be in the dis24 cretion of the Board: Provided, That due consider-
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•HR 3474 IH

1 ation shall be given to the allocation of funds to in2 sured community development financial institutions.

3 (2) FINANCIAL ASSISTANCE.—The Fund shall

4 structure financial assistance to a qualified commu5 nity development financial institution in such a man6 ner that it does not own more than 50 percent of

7 the equity of such institution and does not control

8 the operations of such institution. The Fund will not

9 be deemed to control such institution for the pur10 poses of applicable laws. With respect to equity in11 vestments, the Fund shall hold only transferable,

12 nonvoting investments. Such equity investments may

13 provide for convertibility to voting stock upon trans14 fer by the Fund.

15 (3) DEPOSITS.—Notwithstanding any other

16 provision of law, deposits made pursuant to this sec17 tion in qualified insured community development fi18 nancial institutions shall not be subject to any re19 quirement for collateral or security.

20 (4) LIMITATIONS ON OBLIGATIONS.—Direct

21 loan obligations may be incurred only to the extent

22 that appropriations of budget authority to cover

23 their costs, as defined in section 502 of the Congres24 sional Budget Act of 1974, are made in advance.
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1 (c) PURPOSE OF FINANCIAL ASSISTANCE.—Financial

2 assistance made available under this title may be used by

3 assisted institutions to develop or support—

4 (1) commercial facilities that enhance revitaliza5 tion, community stability, or job creation and reten6 tion efforts;

7 (2) business creation and expansion efforts

8 that—

9 (A) create or retain jobs for low-income

10 people;

11 (B) enhance the availability of products

12 and services to low-income people; or

13 (C) create or retain businesses owned by

14 low-income people or residents of a targeted

15 area;

16 (3) community facilities that provide benefits to

17 low-income people or enhance community stability;

18 (4) the provision of basic financial services to

19 low-income people or residents of a targeted area;

20 (5) the provision of development services;

21 (6) home ownership opportunities that are af22 fordable to low-income households;

23 (7) rental housing that is principally affordable

24 to low-income households; and
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1 (8) other activities deemed appropriate by the

2 Fund.

3 (d) AMOUNT OF ASSISTANCE.—The Fund may pro4 vide up to $5,000,000 of assistance per application to any

5 one qualified insured community development financial in6 stitution and up to $2,000,000 per application to any

7 other qualified community development financial institu8 tion. The Fund shall have the authority to set minimum

9 amounts of assistance per institution.

10 (e) MATCHING REQUIREMENTS.—

11 (1) Assistance provided to qualified insured

12 community development financial institutions, other

13 than deposits or membership shares of $100,000 or

14 less, technical assistance, or grants for technical as15 sistance, shall be matched by no less than one dollar

16 of equity, deposits or membership shares for each

17 dollar provided by the Fund. The Fund shall require

18 a match for all other assistance, the amount and

19 form of which shall be in the discretion of the Fund:

20 Provided, That the Fund shall in no event require

21 assistance provided in the form of deposits or mem22 bership shares of $100,000 or less, technical assist23 ance, or grants for technical assistance to be

24 matched. The Fund shall provide no assistance ex25 cept technical assistance or grants for technical as-
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1 sistance until a qualified community development fi2 nancial institution has secured legally enforceable

3 commitments for the entire match required. Assist4 ance may be provided in one lump sum, or over a

5 period of time, as determined by the Fund.

6 (2) Assistance shall be matched with funds

7 from sources other than the Federal Government.

8 (f) TERMS AND CONDITIONS.—

9 (1) IN GENERAL.—The Fund shall provide as10 sistance authorized under this title in such form and

11 subject to such restrictions as are necessary to en12 sure that to the maximum extent practicable—

13 (A) all assistance granted is used by the

14 qualified community development financial in15 stitution in a manner consistent with the pur16 poses of this title;

17 (B) qualified community development fi18 nancial institutions receiving assistance that are

19 not otherwise regulated by the Federal Govern20 ment or by a State government are financially

21 and managerially sound;

22 (C) assistance results in a net increase,

23 both nationally and in the local communities in

24 which assistance is provided, in capital, credit,

25 and development services; and
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1 (D) assistance is provided in a manner

2 that encourages affiliations and partnerships

3 between insured depository institutions, second4 ary markets or other sources of credit or lever5 age and local organizations dedicated to com6 munity development.

7 (2) CONSULTATION WITH BANKING REGU8 LATORS.—Prior to providing assistance to a quali9 fied insured community development financial insti10 tution, the Board should consult with the appro11 priate Federal banking agency or, in the case of an

12 insured credit union, the National Credit Union

13 Administration.

14 (3) ASSISTANCE AGREEMENT.—

15 (A) The Board shall impose restrictions on

16 the use of assistance through a stock purchase

17 agreement, share purchase agreement, or

18 through a contract entered into in consideration

19 for the provision of assistance.

20 (B) Such agreement or contract shall re21 quire institutions assisted under this title to

22 comply with performance goals. The perform23 ance goals shall be negotiated between the

24 Board and each qualified community develop25 ment financial institution receiving assistance
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•HR 3474 IH

1 based upon the strategic plan submitted pursu2 ant to section 205(b)(5). The performance goals

3 may be renegotiated jointly as necessary or ap4 propriate, subject to subparagraph (C) of this

5 section. Activity levels for insured community

6 development financial institutions should be de7 termined by the Board in consultation with the

8 appropriate Federal banking agency or, in the

9 case of an insured credit union, with the Na10 tional Credit Union Administration.

11 (C) The agreement or contract shall speci12 fy sanctions available to the Board, in its dis13 cretion, in the event of noncompliance with the

14 purposes of this title or the terms of the agree15 ment. The sanctions may include revocation of

16 approval of the application, terminating or re17 ducing future assistance, requiring repayment

18 of assistance, and requiring changes to the per19 formance goals imposed pursuant to subpara20 graph (B) or to the strategic plan submitted

21 pursuant to section 205(b)(5). In the case of an

22 insured community development financial insti23 tution, the Board shall consult with the appro24 priate Federal banking agency or, in the case of

25 an insured credit union, the National Credit
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•HR 3474 IH

1 Union Administration, before imposing sanc2 tions pursuant to this paragraph.

3 (4) REVIEW.—At least annually, the Board

4 shall review the performance of each assisted quali5 fied community development financial institution in

6 carrying out its strategic plan and performance

7 goals.

8 (5) REPORTING.—The Board shall require each

9 qualified community development financial institu10 tion receiving assistance to submit an annual report

11 to the Fund on its activities, its financial condition,

12 its success in meeting performance goals, and its

13 compliance with other requirements of this title.

14 (g) AUTHORITY TO SELL EQUITY INVESTMENTS AND

15 LOANS.—The Board shall have the authority at any time

16 to sell its investments and loans and may, in its discretion,

17 retain the power to enforce limitations on assistance en18 tered into in accordance with the requirements of this title.

19 (h) NO AUTHORITY TO LIMIT SUPERVISION AND

20 REGULATION.—Nothing in this title shall affect any au21 thority of the appropriate Federal banking agency or, in

22 the case of an insured credit union, the National Credit

23 Union Administration, to supervise and regulate an in24 sured community development financial institution.
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1 SEC. 208. ENCOURAGEMENT OF PRIVATE ENTITIES.

2 The Board may cause to be incorporated, or encour3 age the incorporation of, private non-profit and for-profit

4 entities that will complement the activities of the Fund

5 in carrying out the purposes of this title. The purposes

6 of any such entities shall be limited to investing in and

7 assisting community development financial institutions in

8 a manner similar to the activities of the Fund under this

9 title. Any such entities shall be managed exclusively by

10 private individuals who are selected in accordance with the

11 laws of the jurisdiction of incorporation.

12 SEC. 209. CLEARINGHOUSE FUNCTION.

13 The Fund shall establish and maintain an informa14 tion clearinghouse in coordination with the Departments

15 of Agriculture, Commerce, and Housing and Urban Devel16 opment, the Small Business Administration, other Federal

17 agencies, and community development financial institu18 tions—

19 (1) to cause to be collected, compiled, and ana20 lyzed information pertinent to community develop21 ment financial institutions that will assist in creat22 ing, developing, expanding, and preserving these in23 stitutions; and

24 (2) to cause to be established a service center

25 for comprehensive information on financial, tech26 nical, and management assistance, case studies of
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1 the activities of community development financial in2 stitutions, regulations, and other information that

3 may promote the purposes of this title.

4 SEC. 210. RECORDKEEPING, REPORTS, AND AUDITS.

5 (a) RECORDKEEPING.—

6 (1) A qualified community development finan7 cial institution receiving assistance from the Fund

8 shall keep such records as may be reasonably nec9 essary to disclose the disposition of any assistance

10 under this title and to ensure compliance with the

11 requirements of this title.

12 (2) The Fund shall have access, for the purpose

13 of determining compliance with this title, to any

14 books, documents, papers, and records of a qualified

15 community development financial institution receiv16 ing assistance from the Fund that are pertinent to

17 assistance received under this title.

18 (b) REPORTS.—

19 (1) ANNUAL REPORT.—The Fund shall conduct

20 an annual evaluation of the activities carried out

21 pursuant to this title and shall submit a report of

22 its findings to the President within 120 days of the

23 end of each fiscal year of the Fund. The report shall

24 include financial statements audited in accordance

25 with subsection (c).
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1 (2) INSTITUTIONAL VOICE FOR COMMUNITY DE2 VELOPMENT.—

3 (A) ONGOING STUDY.—The Fund shall

4 conduct, or cause to be conducted, an ongoing

5 study to identify and evaluate the most effective

6 and financially sound policies and practices for

7 encouraging investment in distressed commu8 nities, including small business and commercial

9 lending, business formation and expansion,

10 community and economic development, commer11 cial real estate and multi-family housing, and

12 home mortgages. In addition, the Fund may

13 study, or cause to be studied, related matters,

14 such as identification of sources of and access

15 to capital and loans for community investment;

16 development of secondary markets for economic

17 and community development, small business

18 and commercial loans, and home mortgage

19 loans and investments; and methods to involve

20 all segments of the financial services industry in

21 community development.

22 (B) CONSULTATION.—In the conduct of

23 the study, the Fund shall consult, or cause con24 sultation with, the Office of the Comptroller of

25 the Currency, the Federal Deposit Insurance
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1 Corporation, the Board of Governors of the

2 Federal Reserve System, the Federal Housing

3 Finance Board, the Farm Credit Administra4 tion, the Office of Thrift Supervision, the Na5 tional Credit Union Administration, community

6 reinvestment, civil rights, consumer and finan7 cial organizations, and such representatives of

8 agencies or other persons as the Fund may de9 termine.

10 (C) REPORTS.—Within 270 days after the

11 date of enactment of this title, the Fund shall

12 report to the President its initial findings and

13 recommendations regarding the matters set

14 forth in subparagraph (A). Thereafter, the

15 Fund shall report its findings and recommenda16 tions to the President with the annual report

17 required by paragraph (b)(1).

18 (3) INVESTMENT, GOVERNANCE, AND ROLE OF

19 FUND.—Six years following the date of enactment of

20 this title, the Fund, in accordance with the proce21 dures described in paragraphs (2)(A) and (B), shall

22 conduct a study evaluating the structure, govern23 ance, and performance of the Fund. The study shall

24 be submitted to the President. Such study shall in25 clude an evaluation of the overall performance of the
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1 Fund in meeting the purposes of this title and any

2 recommendations of the Fund for restructuring the

3 Board, altering procedures under which the Fund is

4 governed, the future role of the Fund in addressing

5 community development, and the ability of the Fund

6 to become a private, self-sustaining entity capable of

7 fulfilling the purposes of this title.

8 (c) EXAMINATION AND AUDIT.—The financial state9 ments of the Fund shall be audited in accordance with

10 section 9105 of title 31, United States Code, except that

11 audits required by section 9105(a) of that title shall be

12 performed annually.

13 SEC. 211. INVESTMENT OF RECEIPTS AND PROCEEDS.

14 Any dividends on equity investments and proceeds

15 from the disposition of investments, deposits, or member16 ship shares that are received by the Fund as a result of

17 assistance provided pursuant to section 217 shall be de18 posited and accredited to an account of the Fund estab19 lished to carry out the authorized purposes of this title.

20 Upon request of the Chief Executive Officer, the Secretary

21 of the Treasury shall invest amounts deposited in such ac22 count in public debt securities with maturities suitable to

23 the needs of the Fund, as determined by the Chief Execu24 tive Officer, and bearing interest at rates determined by

25 the Secretary of the Treasury, taking into consideration
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1 current market yields on outstanding marketable obliga2 tions of the United States of comparable maturities.

3 Amounts deposited into the account and interest earned

4 on such amounts pursuant to this section shall be available

5 to the Fund until expended.

6 SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

7 (a) IN GENERAL.—There are authorized to be appro8 priated to the Fund, to remain available until expended,

9 $60,000,000 for fiscal year 1994, $104,000,000 for fiscal

10 year 1995, $107,000,000 for fiscal year 1996, and

11 $111,000,000 for fiscal year 1997, or such greater sums

12 as may be appropriated, to carry out the purposes of the

13 title.

14 (b) ADMINISTRATIVE EXPENSES.—The Fund may

15 set aside up to $10,000,000 each fiscal year to pay admin16 istrative costs and expenses.

17 SEC. 213. CONFORMING AMENDMENT.

18 Section 8E(a)(2) of the Inspector General Act of

19 1978 (5 U.S.C. app. 3, 8E(a)(2)) is amended by inserting

20 ‘‘the Community Development Banking and Financial In21 stitutions Fund,’’ immediately following ‘‘the Commodity

22 Futures Trading Commission.’’.

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